[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.