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105th Congress, 1st Session - - - - - - - - - - - House Document 105-11


 
  DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO IRAN

                               __________

                             COMMUNICATION

                                  From

                   THE PRESIDENT OF THE UNITED STATES

                              TRANSMITTING

A REPORT ON DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT 
TO IRAN THAT WAS DECLARED IN EXECUTIVE ORDER NO. 12170 OF NOVEMBER 14, 
 1979--RECEIVED IN THE UNITED STATES HOUSE OF REPRESENTATIVES NOVEMBER 
                15, 1996, PURSUANT TO 50 U.S.C. 1703(c)

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January 7, 1997.--Referred to the Committee on International Relations 
                       and ordered to be printed


                                           The White House,
                                 Washington, DC, November 14, 1996.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: I hereby report to the Congress on 
developments since the last Presidential report of May 16, 
1996, concerning the national emergency with respect to Iran 
that was declared in Executive Order 12170 of November 14, 
1979. This report is submitted pursuant to section 204(c) of 
the International Emergency Economic Powers Act, 50 U.S.C. 
1703(c). This report covers events through September 16, 1996. 
My last report, dated May 16, 1996, covered events through 
March 1, 1996.
    1. The Iranian Assets Control Regulations, 31 CFR Part 535 
(IACR), were amended on August 22, 1996, to add the 
Antiterrorism and Effective Death Penalty Act of 1996 (Public 
Law 104-132; 110 Stat. 1214-1319) (the ``Antiterrorism Act'') 
as an authority for the Regulations (61 Fed. Reg. 43460, August 
23, 1996). On April 24, 1996, I signed into law the 
Antiterrorism Act. Section 321 of the Antiterrorism Act (18 
U.S.C. 2332d) makes it a criminal offense for United States 
persons, except as provided in regulations issued by the 
Secretary of the Treasury in consultation with the Secretary of 
State, to engage in a financial transaction with the 
governments of countries designated under section 6(j) of the 
Export Administration Act (50 U.S.C. App. 2405) as supporting 
international terrorism. United States persons who engage in 
such transactions shall be fined under title 18, United States 
Code, or imprisoned for up to 10 years, or both. Because the 
IACR already prohibited such transactions with minor exceptions 
found to be in the public interest, no substantive change to 
the prohibitions of the IACR was necessary. A copy of the 
amendment is attached.
    2. The Iran-United States Claims Tribunal (the 
``Tribunal''), established at The Hague pursuant to the Algiers 
Accords, continues to make progress in arbitrating the claims 
before it. Since the period covered in my last report, the 
Tribunal has rendered additional awards, in which the claims of 
dual nationals were dismissed for lack of jurisdiction. This 
brings the total number of awards rendered to 571, the majority 
of which have been in favor of U.S. claimants. As of September 
16, 1996, the value of awards to successful U.S. claimants from 
the Security Account held by the NV Settlement Bank was 
$2,376,010,041.91.
    On July 24, 1996, Iran directed the transfer of $37,700,000 
to the Security Account, established by the Algiers Accords to 
ensure payment of awards to successful U.S. claimants, from the 
Interest Account. However, the Security Account has remained 
continuously below the $500 million balance required by the 
Algiers Accords since November 15, 1992. As of September 23, 
1996, the total amount in the Security Account was 
$233,070,127.71, and the total amount in the Interest Account 
was $5,494,387.30.
    Therefore, the United States continues to pursue Case A/28, 
filed in September 1993, to require Iran to meet its 
obligations under the Algiers Accords to replenish the Security 
Account. Iran filed its Statement of Defense in that case on 
August 30, 1995, and the United States filed a Reply on 
December 4, 1995. Iran is scheduled to file its Rejoinder on 
December 4, 1996.
    The United States also continues to pursue Case A/29, filed 
in July 1994, to require Iran to meets its obligations under 
the Algiers Accords to pay its equal share of advances for 
Tribunal expenses when directed to do so by the Tribunal. Iran 
filed its Statement of Defense on July 5, 1996. The United 
States filed its Reply on October 11, 1996.
    3. The Department of State continues to present other 
United States Government claims against Iran and to respond to 
claims brought against the United States by Iran, in 
coordination with concerned government agencies.
    In May 1996, the United States filed comments in response 
to a Tribunal inquiry whether experts meetings could facilitate 
the resolution of the United States Request to Dismiss Certain 
Claims from Case B/61, filed in August 1995 as part of the 
United States consolidated submission on the merits of that 
case. The United States stated that experts meetings were 
inadvisable. Case B/61 involves a claim by Iran for 
compensation with respect to primarily military equipment that 
Iran had sought to purchase or have repaired under commercial 
contracts with more than 50 private American companies, but 
that Iran alleges it did not receive. Iran alleges that it 
suffered direct losses and consequential damages in excess of 
$2 billion because of the United States Government refusal to 
allow the export of the equipment after January 19, 1981, in 
alleged contravention of the Algiers Accords. Iran's rebuttal 
of the United States consolidated submission in Case B/61 is 
due December 9, 1996.
    On May 6, 1996, in connection with Cases A/4, A/7, and A/15 
(I: F and III), Iran requested that the Tribunal order the 
United States to terminate its leases of two former diplomatic 
properties of Iran to its current tenants. The United States 
responded by submitting comments to the Tribunal on May 31, 
1996. The Tribunal has not yet issued a decision on Iran's 
request. A hearing of these cases has remained postponed by the 
parties' mutual agreement and under Tribunal order since 
October 11, 1994.
    On May 10, 1996, Iran made a request for interim measures 
in Cases A/15(IV) and A/24, brought against the United States 
for its alleged failure to terminate litigation in U.S. courts 
in violation of the Algiers Accords. Iran requested that the 
Tribunal order the United States to stay the McKesson-OPIC 
litigation against Iran in U.S. district court. On June 20, 
1996, after briefing by both parties, the Tribunal denied 
Iran's request for interim measures. The parties await the 
Tribunal's award on the merits of the cases, which were heard 
more than a year ago before the Full Tribunal.
    On June 27, 1996, in connection with Case B/1, the United 
States renewed a request for a Tribunal order directing Iran to 
produce seized United States Government documents and 
suspending the proceedings until Iran complies with the order. 
In this renewal of the pending request, the United States 
identified nine exhibits recently submitted to the Tribunal by 
Iran that appeared to have been seized from U.S. facilities in 
Iran.
    The United States pointed out to the Tribunal that Iran had 
previously informed the Tribunal on several occasions that the 
Iranian government does not possess any of the documents that 
were once stored in the U.S. facilities in Iran. Iran submitted 
a response to the Tribunal on September 5, 1995, asserting that 
the documents were handed over to Iranian representatives in 
the normal course of the Foreign Military sales program 
operations.
    In August 1996, Iran filed a Statement of Claim in a new 
case, number A/30, alleging that the United States has violated 
paragraphs 1 and 10 of the General Declaration of the Algiers 
Accords. Iran bases its claim, inter alia, on press statements 
about an alleged covert action program aimed at Iran and U.S. 
economic sanctions, including the Iran-Libya Sanctions Act of 
1996. The United States is currently preparing its Statement of 
Defense in response to Iran's claim.
    In Case A/11, Iran alleges that the United States violated 
the Algiers Accords by failing to assist Iran in obtaining the 
return of the Shah's assets. The Department of State is 
currently in the process of preparing the United States Hearing 
Memorial, which is due to be filed on December 13, 1996. Under 
the procedures established by the settlement reached February 
22, 1996, on which I reported previously, the United States has 
begun to pay ex gratia amounts to the survivors of Iranian 
victims of the July 3, 1988, shootdown of Iran Air 655. As of 
the closing day for this report, 34 beneficiaries representing 
12 of the deceased passengers had received payments totaling 
$2,850,000.00 Under the terms of the settlement, no money will 
be paid to the Government of Iran.
    4. Since my last report, the Tribunal conducted hearings in 
two cases involving U.S. nationals, considered dual U.S.-
Iranian nationals by the Tribunal. On May 16, 1996, Chamber 
Three held a one-day hearing in Claim No. 266, Aryeh v. The 
Islamic Republic of Iran, which involves the alleged 
expropriation by Iran of claimant's property in Iran. On June 
12-14, 1996, Chamber Two held a hearing in Claim No. 953 Hakim 
v. The Islamic Republic of Iran, another claim for the 
expropriation of property in Iran.
    In August 1996, the United States submitted a brief on 
behalf of private dual national claimants in a proceeding 
before Chamber One of the Tribunal. The United States argued 
that the Tribunal erred in a previous decision when it denied a 
dual national's claim on the ground that the claimant had 
acquired his property in his capacity as an Iranian national. 
The brief takes issue with the rationale of the Tribunal's 
decision and urges the Tribunal not to extend this approach to 
the other pending dual national cases.
    5. The situation reviewed above continues to implicate 
important diplomatic, financial, and legal interests of the 
United States and its nationals and presents an unusual 
challenge to the national security and foreign policy of the 
United States. The Iranian Assets Control Regulations issued 
pursuant to Executive Order 12170 continue to play an important 
role in structuring our relationship with Iran and in enabling 
the United States to implement properly the Algiers Accords. I 
shall continue to exercise the powers at my disposal to deal 
with these problems and will continue to report periodically to 
the Congress on significant developments.
            Sincerely,
                                                William J. Clinton.

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