H.Doc.105-83 DOCUMENT AGREED AMONG THE STATES PARTIES TO THE TREATY ON CONVENTIONAL ...

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105th Congress, 1st Session  - - - - - - - - - - - House Document 105-82


 
  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. 12170 OF NOVEMBER 14, 
                  1979, PURSUANT TO 50 U.S.C. 1703(c)

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    May 13, 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 since the 
last Presidential report of November 14, 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) (IEEPA). This 
report covers events through March 31, 1997. My last report, 
dated November 14, 1996, covered events through September 16, 
1996.
    1. The Iranian Assets Control Regulations, 31 CFR Part 535 
(IACR), 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. Finally, the 
amendment notes the availability of higher criminal fines for 
violations of IEEPA pursuant to the formulas set forth in 18 
U.S.C. 3571. 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 eight awards. This brings the total 
number of awards rendered to 579, the majority of which have 
been in favor of U.S. claimants. As of March 24, 1997, the 
value of awards to successful U.S. claimants from the Security 
Account held by the NV Settlement Bank was $2,424,959,689.37.
    Since my last report, Iran has failed to replenish the 
Security Account established by the Algiers Accords to ensure 
payment of awards to successful U.S. claimants. Thus, since 
November 5, 1992, the Security Account has continuously 
remained below the $500 million balance required by the Algiers 
Accords. As of March 24, 1997, the total amount in the Security 
Account was $183,818,133.20, and the total amount in the 
Interest Account was $12,053,880.39. Therefore, the United 
States continues to pursue Case A/28, filed in September 1993, 
to require Iran to meet its obligation under the Algiers 
Accords to replenish the Security Account. Iran filed its 
Rejoinder on April 8, 1997.
    The United States also continues to pursue Case A/29 to 
require Iran to meet its obligation of timely payment of its 
equal share of advances for Tribunal expenses when directed to 
do so by the Tribunal. The United States filed its Reply to the 
Iranian Statement of Defense on October 11, 1996.
    Also since my last report, the United States appointed 
Richard Mosk as one of the three U.S. arbitrators on the 
Tribunal. Judge Mosk, who has previously served on the Tribunal 
and will be joining the Tribunal officially in May of this 
year, will replace Judge Richard Allison, who has served on the 
Tribunal since 1988.
    3. The Department of State continues to pursue 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.
    On December 3, 1996, the Tribunal issued its award in Case 
B/36, the U.S. claim for amounts due from Iran under two World 
War II military surplus property sales agreements. While the 
Tribunal dismissed the U.S. claim as to one of the agreements 
on jurisdictional grounds, it found Iran liable for breach of 
the second (and larger) agreement and ordered Iran to pay the 
United States principal and interest in the amountof 
$43,843,826.89. Following payment of the award, Iran requested the 
Tribunal to reconsider both the merits of the case and the calculation 
of interest; Iran's request was denied by the Tribunal on March 17, 
1997.
    Under the February 22, 1996, agreement that settled the 
Iran Air case before the International Court of Justice and 
Iran's bank-related claims against the United States before the 
Tribunal (reported in my report of May 17 1996), the United 
States agreed to make ex gratia payments to the families of 
Iranian victims of the 1988 Iran Air 655 shootdown and a fund 
was established to pay Iranian bank debt owed to U.S. 
nationals. As of March 17, 1997, payments were authorized to be 
made to surviving family members of 125 Iranian victims of the 
aerial incident, totaling $29,100,000.00. In addition, payment 
of 28 claims by U.S. nationals against Iranian banks, totaling 
$9,002,738.45 was authorized.
    On December 12, 1996, the Department of State filed the 
U.S. Hearing Memorial and Evidence on Liability in Case A/11. 
In this case, Iran alleges that the United States failed to 
perform its obligations under Paragraphs 12-14 of the Algiers 
Accords, relating to the return to Iran of assets of the late 
Shah and his close relatives. A hearing date has yet to be 
scheduled.
    On October 9, 1996, the Tribunal dismissed Case B/58, 
Iran's claim for damages arising out of the U.S. operation of 
Iran's southern railways during the Second World War. The 
Tribunal held that it lacked jurisdiction over the claim under 
Article II, paragraph two, of the Claims Settlement 
Declaration.
    4. Since my last report, the Tribunal conducted two 
hearings and issued awards in six private claims. On February 
24-25, 1997, Chamber One held a hearing in a dual national 
claim, G.E. Davidson v. The Islamic Republic of Iran, Claim No. 
457. The claimant is requesting compensation for real property 
that he claims was expropriated by the Government of Iran. On 
October 24, 1996, Chamber Two held a hearing in Case 274, 
Monemi v. The Islamic Republic of Iran, also concerning the 
claim of a dual national.
    On December 2, 1996, Chamber Three issued a decision in 
Johangir & Jila Mohtadi v. The Islamic Republic of Iran (AWD 
573-271-3), awarding the Claimants $510,000 plus interest for 
Iran's interference with the claimants' property rights in real 
property in Velenjak. The claimants also were awarded $15,000 
in costs. On December 10, 1996, Chamber Three issued a decision 
in Reza Nemazee v. The Islamic Republic of Iran (AWD 575-4-3), 
dismissing the expropriation claim for lack of proof. On 
February 25, 1997, Chamber Three issued a decision in Dadras 
Int'l v. The Islamic Republic of Iran (AWD 578-214-3), 
dismissing the claim against Kan Residential Corp. for failure 
to prove that it is an ``agency, instrumentality, or entity 
controlled by the Government of Iran'' and dismissing the claim 
against Iran for failure to prove expropriation or other 
measures affecting property rights. Dadras had previously 
received a substantial recovery pursuant to a partial award. On 
March 26, 1997, Chamber Two issued a final award in Case 389, 
Westinghouse Electric Corp. v. The Islamic Republic of Iran Air 
Force (AWD 579-389-2), awarding Westinghouse $2,553,930.25 plus 
interest in damages arising from the Iranian Air Force's breach 
of contract with Westinghouse.
    Finally, there were two settlements of claims of dual 
nationals, which resulted in awards on agreed terms. They are 
Dora Elghanayan, et al. v. The Islamic Republic of Iran (AAT 
576-800/801/802/803/804-3), in which Iran agreed to pay the 
claimants $3,150,000, and Lilly Mythra Fallah Lawrence v. The 
Islamic Republic of Iran (AAT 577-390/391-1), in which Iran 
agreed to pay the claimant $1,000,000.
    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.

                                                William J. Clinton.
    The White House, May 13, 1997.


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