    [Weekly Compilation of Presidential Documents Volume 35, Number 1 (Monday, January 11, 1999)]
    [Pages 8-10]
    [Online from the Government Publishing Office, www.gpo.gov]

    <R04>
    Letter to Congressional Leaders Reporting on the National Emergency With
    Respect to the Federal Republic of Yugoslavia (Serbia and Montenegro)

    January 5, 1999

    Dear Mr. Speaker:  (Dear Mr. President:)

        On June 9, 1998, by Executive Order 13088 (63 Fed. Reg. 32109, June
    12, 1998), I declared a national emergency to deal with the unusual and
    extraordinary threat to the national security and foreign policy of the
    United States constituted by the actions and policies of the Governments
    of the Federal Republic of Yugoslavia (Serbia and Montenegro), and the
    Republic of Serbia with respect to Kosovo. The order blocks all property
    and interests in property of the Governments of the Federal Republic of
    Yugoslavia (Serbia and Montenegro), the Republic of Serbia and the
    Republic of Montenegro within the United States or within the possession
    or control of United States persons, and prohibits all new investment in
    the territory of the Republic of Serbia by United States persons, and
    the approval or other facilitation by United States persons of other
    persons' new investment in the territory of the Republic of Serbia.

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        1. The declaration of the national emergency on June 9, 1998, was
    made pursuant to the authority vested in me by the Constitution and laws
    of the United States, including the International Emergency Economic
    Powers Act (50 U.S.C. 1701 et seq.), the National Emergencies Act (50
    U.S.C. 1601 et seq.), and section 301 of title 3 of the United States
    Code. The emergency declaration was reported by message to the Congress
    dated June 10, 1998, pursuant to section 204(b) of the International
    Emergency Economic Powers Act (50 U.S.C. 1703(b)).
        The present report is submitted pursuant to 50 U.S.C. 1641(c) and
    1703(c) and covers the period from June 9 through December 8, 1998. It
    discusses only Administration actions and expenses directly related to
    the exercise of powers and authorities conferred by the declaration of a
    national emergency in Executive Order 13088.
        2. The Office of Foreign Assets Control (OFAC), acting under
    authority delegated by the Secretary of the Treasury, implemented the
    sanctions imposed under the foregoing statutes and Executive Order 13088
    and has issued the Federal Republic of Yugoslavia (Serbia and
    Montenegro) Kosovo Sanctions Regulations, 31 CFR part 586 (the
    ``Regulations'') (63 Fed. Reg. 54575, October 13, 1998). A copy of the
    Regulations is attached to this report.
        The Regulations block all property and interests in property of the
    Governments of the Federal Republic of Yugoslavia (Serbia and
    Montenegro), the Republic of Serbia, and the Republic of Montenegro that
    are in the United States, that hereafter come within the United States,
    or that are or hereafter come within the possession of control of United
    States persons, including their overseas branches. The Regulations also
    prohibit financial transactions with, including trade financing for, the
    Governments of the Federal Republic of Yugoslavia (Serbia and
    Montenegro), the Republic of Serbia, and the Republic of Montenegro by
    United States persons. However, the Regulations provide an exemption,
    contained in section 2 of Executive Order 13088, for financial
    transactions, including trade financing, by United States persons within
    the territory of the Federal Republic of Yugoslavia (Serbia and
    Montenegro) that are (a) conducted exclusively through the domestic
    banking system within the Federal Republic of Yugoslavia (Serbia and
    Montenegro) in local currency (dinars), or (b) conducted using bank
    notes or barter.
        The Regulations also prohibit all new investment in the territory of
    the Republic of Serbia by United States persons, and the approval or
    other facilitation by United States persons or other persons' new
    investment in the territory of the Republic of Serbia. The term ``new
    investment,'' means (a) the acquisition of debt or equity interests in,
    (b) a commitment or contribution of funds or other assets to, or (c) a
    loan or other extension of credit to, a public or private undertaking,
    entity, or project, other than donations of funds to charitable
    organizations for purely humanitarian purposes. Any transaction by a
    United States persons that evades or avoids, or that has the purpose of
    evading or avoiding, or attempts to violate, any of the prohibitions set
    forth in Executive Order 13088 is prohibited. Finally, the Regulations
    provide a general license, authorizing all transactions by United States
    persons involving property or interests in property of the Government of
    the Republic of Montenegro, except as provided pursuant to the Federal
    Republic of Yugoslavia (Serbia and Montenegro) and Bosnian Serb-
    Controlled Areas of the Republic of Bosnia and Herzegovina Sanctions
    Regulations, 31 CFR part 585.
        3. Since the issuance of Executive Order 13088 on June 9, 1998, OFAC
    has issued 73 specific licenses, the majority of which (55) authorized
    financial transactions with respect to personal remittances by
    individuals to the territory of the Federal Republic of Yugoslavia
    (Serbia and Montenegro) and funding of humanitarian operations by
    nongovernmental organizations (NGOs) within the Federal Republic of
    Yugoslavia (Serbia and Montenegro). Other licenses authorized certain
    diplomatic transactions, transactions related to air safety issues and
    payment of overflight fees, the closure of Federal Republic of
    Yugoslavia (Serbia and Montenegro) entities formerly operating within
    the United States and the liquidation and maintenance of blocked
    tangible property, and intellectual property protection for U.S. firms
    operating in the Federal Republic of Yugoslavia (Serbia

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    and Montenegro). OFAC also instituted a mechanism for NGOs to continue
    to support humanitarian operations in Yugoslavia and administers a
    registration program for NGOs to route money and supplies there as
    appropriate.
        Since June 9, 1998, U.S. banks and banks in the United States have
    reported to OFAC that they have blocked 877 transactions totaling
    $20,361,767 pursuant to the sanctions. Most of the blockings were of
    funds transfers originating from, or destined for, Serbian banks.
        4. The expenses incurred by the Federal Government in the 6-month
    period from June 9 through December 8, 1998, that are directly
    attributable to the declaration of a national emergency with respect to
    the Federal Republic of Yugoslavia (Serbia and Montenegro) and the
    Republic of Serbia in connection with the situation in Kosovo are
    estimated at approximately $715,000, most of which represents wage and
    salary costs for Federal personnel. Personnel costs were largely
    centered in the Department of the Treasury (particularly in OFAC and its
    Chief Counsel's Office), the Department of State, and the National
    Security Council.
        5. The situation reviewed above continues to present an
    extraordinary and unusual threat to the national security and foreign
    policy of the United States. The declaration of the national emergency
    with respect to the Federal Republic of Yugoslavia (Serbia and
    Montenegro) and the Republic of Serbia contained in Executive Order
    13088 was made in reaction to the unacceptable actions and policies of
    the Belgrade authorities in Kosovo, and continues to apply. The current
    situation in Kosovo is fragile and, as yet, unresolved. It is of
    particular importance that developments in Kosovo should not disrupt
    progress in implementing the Dayton peace agreement. This threat to the
    peace of the region constitutes an unusual and extraordinary threat to
    the national security of the United States.
        With this in mind and in support of the United Nations Security
    Council Resolutions 1099 and 1203, I shall continue to exercise the
    powers at my disposal with respect to the measures against the
    Government of the Federal Republic of Yugoslavia (Serbia and
    Montenegro), the Republic of Serbia, and the Republic of Montenegro, as
    long as these measures are appropriate, and will continue to report
    periodically to the Congress on significant developments pursuant to 50
    U.S.C. 1703(c).
        Sincerely,
                                                William J. Clinton

    Note: Identical letters were sent to Newt Gingrich, Speaker of the House
    of Representatives, and Albert Gore, Jr., President of the Senate.