H.Doc.105-54 CUMULATIVE REPORT ON RESCISSIONS AND DEFERRALS, MARCH 1, 1997 ...

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105th Congress, 1st Session - - - - - - - - - - - House Document 105-53


 
  DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO IRAN

                               __________

                                MESSAGE

                                  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. 12957 OF MARCH 15, 
    1995, AND MATTERS RELATING TO THE MEASURES IN THAT ORDER AND IN 
EXECUTIVE ORDER NO. 12959 OF MAY 6, 1995, PURSUANT TO 50 U.S.C. 1703(c)

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   March 17, 1997.--Message and accompanying papers referred to the 
     Committee on International Relations and ordered to be printed


To the Congress of the United States:
    I hereby report to the Congress on developments concerning 
the national emergency with respect to Iran that was declared 
in Executive Order 12957 of March 15, 1995, and matters 
relating to the measures in that order and in Executive Order 
12959 of May 6, 1995. This report is submitted pursuant to 
section 204(c) of the International Emergency Economics Powers 
Act, 50 U.S.C. 1703(c) (IEEPA), section 401(c) of the National 
Emergencies Act, 50 U.S.C. 1641(c), and section 505(c) of the 
International Security and Development Cooperation Act of 1985, 
22 U.S.C. 2349aa-9(c). This report discusses only matters 
concerning the national emergency with respect to Iran that was 
declared in Executive Order 12957 and does not deal with those 
relating to the emergency declared on November 14, 1979, in 
connection with the hostage crisis.
    1. On March 15, 1995, I issued Executive Order 12957 (60 
Fed. Reg. 14615, March 17, 1995) to declare a national 
emergency with respect to Iran pursuant to IEEPA, and to 
prohibit the financing, management, or supervision by United 
States persons of the development of Iranian petroleum 
resources. This action was in response to actions and policies 
of the Government of Iran, including support for international 
terrorism, efforts to undermine the Middle East peace process, 
and the acquisition of weapons of mass destruction and the 
means to deliver them. A copy of the order was provided to the 
Speaker of the House and the President of the Senate by letter 
dated March 15, 1995.
    Following the imposition of these restrictions with regard 
to the development of Iranian petroleum resources, Iran 
continued to engage in activities that represent a threat to 
the peace and security of all nations, including Iran's 
continuing support for international terrorism, its support for 
acts that undermine the Middle East peace process, and its 
intensified efforts to acquire weapons of mass destruction. On 
May 6, 1995, I issued Executive Order 12959 to further respond 
to the Iranian threat to the national security, foreign policy, 
and economy of the United States.
    Executive Order 12959 (60 Fed. Reg. 24757, May 9, 1995) (1) 
prohibits exportation from the United States to Iran or to the 
Government of Iran of goods, technology, or services; (2) 
prohibits the reexportation of certain U.S. goods and 
technology to Iran from third countries; (3) prohibits dealings 
by United States persons in goods and services of Iranian 
origin or owned or controlled by the Government of Iran; (4) 
prohibits new investments by United States persons in Iran or 
in property owned or controlled by the Government of Iran; (5) 
prohibits U.S. companies and other United States persons from 
approving, facilitating, or financing performance by a foreign 
subsidiary or other entity owned or controlled by a United 
States person of certain reexport, investment, and trade 
transactions that a United States person is prohibited from 
performing; (6) continues the 1987 prohibition on the 
importation into the United States of goods and services of 
Iranian origin; (7) prohibits any transaction by a United 
States person or within the United States that evades or avoids 
or attempts to violate any prohibition of the order; and (8) 
allowed U.S. companies a 30-day period in which to perform 
trade transactions pursuant to contracts predating the 
Executive order.
    At the time of signing Executive Order 12959, I directed 
the Secretary of the Treasury to authorize through specific 
licensing certain transactions, including transactions by 
United States persons related to the Iran-United States Claims 
Tribunal in The Hague, established pursuant to the Algiers 
Accords, and related to other international obligations and 
United States Government functions, and transactions related to 
the export of agricultural commodities pursuant to preexisting 
contracts consistent with section 5712(c) of title 7, United 
States Code. I also directed the Secretary of the Treasury, in 
consultation with the Secretary of State, to consider 
authorizing United States persons through specific licensing to 
participate in market-based swaps of crude oil from the Caspian 
Sea area for Iranian crude oil in support of energy projects in 
Azerbaijan, Kazakstan, and Turkmenistan.
    Executive Order 12959 revoked sections 1 and 2 of Executive 
Order 12613 of October 29, 1987, and sections 1 and 2 of 
Executive Order 12957 of March 15, 1995, to the extent they are 
inconsistent with it. A copy of Executive Order 12959 was 
transmitted to the Speaker of the House of Representatives and 
the President of the Senate by letter dated May 6, 1995.
    2. On March 5, 1997, I renewed for another year the 
national emergency with respect to Iran pursuant to IEEPA. This 
renewal extended the authority for the current comprehensive 
trade embargo against Iran in effect since May 1995. Under 
these sanctions, virtually all trade with Iran is prohibited 
except for information and informational materials and certain 
other limited exceptions.
    3. The Iranian Transactions Regulations (the 
``Regulations'' or ITR), 31 CFR Part 560, were amended on 
October 21, 1996 (61 Fed. Reg. 54936, October 23, 1996), to 
implement section 4 of the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended by the Debt Collection 
Improvement Act of 1996, by adjusting for inflation the amount 
of the civil monetary penalties that may be assessed under the 
Regulations. The amendment increases the maximum civil monetary 
penalty provided in the Regulations from $10,000 to $11,000 per 
violation.
    The amended Regulations also reflect an amendment to 18 
U.S.C. 1001 contained in section 330016(1)(L) of Public Law 
103-322, September 13, 1994; 108 Stat. 2147. The amendment 
notes the availability of higher criminal fines pursuant to the 
formulas set forth in 18 U.S.C. 3571. A copy of the amendment 
is attached.
    Section 560.603 of the ITR was amended on November 15, 1996 
(61 Fed. Reg. 58480), to clarify rules relating to reporting 
requirements imposed on United States persons with foreign 
affiliations. Initial reporting under the amended Regulation 
has been deferred until May 30, 1997, by a January 14, 1997 
Federal Register notice (62 Fed. Reg. 1832). Copies of the 
amendment and the notice are attached.
    4. During the current 6-month period, the Department of the 
Treasury's Office of Foreign Assets Control (OFAC) made 
numerous decisions with respect to applications for licenses to 
engage in transactions under the ITR, and issued 13 licenses. 
The majority of denials were in response to requests to 
authorize commercial exports to Iran--particularly of machinery 
and equipment for the petroleum and manufacturing industries--
and the importation of Iranian-origin goods. The licenses 
issued authorized the export and reexport of goods, services, 
and technology essential to ensure the safety of civil aviation 
and safe operation of certain commercial passenger aircraft in 
Iran; certain financial and legal transactions; the importation 
of Iranian-origin artwork for public exhibition; and certain 
diplomatic transactions. Pursuant to sections 3 and 4 of 
Executive Order 12959 and in order to comply with the Iran-Iraq 
Arms Non-Proliferation Act of 1992 and other statutory 
restrictions applicable to certain goods and technology, 
including those involved in the air-safety cases, the 
Department of the Treasury continues to consult with the 
Departments of State and Commerce on these matters.
    The U.S. financial community continues to interdict 
transactions associated with Iran and to consult with OFAC 
about their appropriate handling. Many of these inquiries have 
resulted in investigations into the activities of U.S. parties 
and, where appropriate, the initiation of enforcement action.
    5. The U.S. Customs Service has continued to effect 
numerous seizures of Iranian-origin merchandise, primarily 
carpets, for violation of the import prohibitions of the ITR. 
Various enforcement actions carried over from previous 
reporting periods are continuing and new reports of violations 
are being aggressively pursued. Since my last report, OFAC has 
collected a civil monetary penalty in the amount of $5,000. The 
violation underlying this collection involves the unlicensed 
import of Iranian-origin goods for transshipment to a third 
country aboard a U.S.-flag vessel. Civil penalty action or 
review is pending against 21 companies, financial institutions, 
and individuals for possible violations of the Regulations.
    6. The expenses incurred by the Federal Government in the 
6-month period from September 15, 1996, through March 14, 1997, 
that are directly attributable to the exercise of powers and 
authorities conferred by the declaration of a national 
emergency with respect to Iran are approximately $800,000, most 
of which represent wage and salary costs for Federal personnel. 
Personnel costs were largely centered in the Department of the 
Treasury (particularly in the Office of Foreign Assets Control, 
the U.S. Customs Service, the Office of the Under Secretary for 
Enforcement, and the Office of the General Counsel), the 
Department of State (particularly the Bureau of Economic and 
Business Affairs, the Bureau of Near Eastern Affairs, the 
Bureau of Intelligence and Research, and the Office of the 
Legal Adviser), and the Department of Commerce (the Bureau of 
Export Administration and the General Counsel's Office).
    7. The situation reviewed above continues to involve 
important diplomatic, financial, and legal interests of the 
United States and its nationals and presents an extraordinary 
and unusual threat to the national security, foreign policy, 
and economy of the United States. The declaration of the 
national emergency with respect to Iran contained in Executive 
Order 12957 and the comprehensive economic sanctions imposed by 
Executive Order 12959 underscore the United States Government 
opposition to the actions and policies of the Government of 
Iran, particularly its support of international terrorism and 
its efforts to acquire weapons of mass destruction and the 
means to deliver them. The Iranian Transactions Regulations 
issued pursuant to Executive Orders 12957 and 12959 continue to 
advance important objectives in promoting the nonproliferation 
and antiterrorism policies of the United States. I shall 
exercise the powers at my disposal to deal with these problems 
and will report periodically to the Congress on significant 
developments.

                                                William J. Clinton.
    The White House, March 14, 1997.


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