U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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79–011 2000

106th Congress, 2d Session – – – – – – – – – – – – House Document 106–297

SIX-MONTH PERIODIC REPORT WITH RESPECT TO THE

NATIONAL EMERGENCY IN 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 13059 OF AUGUST 19, 1997, PURSUANT TO

50 U.S.C. 1641(c)

SEPTEMBER 25, 2000.—Message and accompanying papers referred to the

Committee on International Relations and ordered to be printed

(1)

To the Congress of the United States:

As required by section 401(c) of the National Emergencies Act,

50 U.S.C. 1641(c), section 204(c) of the International Emergency

Economic Powers Act (IEEPA) 50 U.S.C. 1703(c), and section 505(c)

of the International Security and Development Cooperation Act of

1985, 22 U.S.C. 2349aa–9(c), I transmit herewith a 6-month periodic report 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, and in Executive Order 13059 of August 19, 1997.

WILLIAM J. CLINTON.

THE WHITE HOUSE, September 26, 2000.

(3)

PRESIDENT’S PERIODIC REPORT ON THE NATIONAL EMERGENCY WITH

RESPECT TO IRAN

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, and in Executive Order 13059 of August 19, 1997. This report is submitted pursuant to section 204(c) of the International

Emergency Economic 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 U.S. 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

Congress by message 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

(60 Fed. Reg. 24757, May 9, 1995) to further respond to the Iranian

threat to the national security, foreign policy, and economy of the

United States. The terms of that order and an earlier order imposing an import ban on Iranian-origin goods and services (Executive

Order 12613 of October 29, 1987) were consolidated and clarified

in Executive Order 13059 of August 19, 1997.

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 U.S. 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,

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United States Code. I also directed the Secretary of the Treasury,

in consultation with the Secretary of State, to consider authorizing

U.S. persons through specific licensing to participate in marketbased swaps of crude oil from the Caspian Sea area for Iranian

crude oil in support of energy projects in Azerbaijan, Kazakhstan,

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 and the President of the Senate by letter

dated May 6, 1995.

2. On August 19, 1997, I issued Executive Order 13059 (the

‘‘order’’) to clarify the steps taken in Executive Order 12957 and

Executive Order 12959, to confirm that the embargo on Iran prohibits all trade and investment activities by U.S. persons, wherever

located, and to consolidate in one order the various prohibitions

previously imposed to deal with the national emergency declared

on March 15, 1995. A copy of the order was transmitted to the

Speaker of the House and the President of the Senate by letter

dated August 19, 1997.

The other prohibits: (1) the importation into the United States of

any goods or services of Iranian origin or owned or controlled by

the Government of Iran except information or informational materials; (2) the exportation, reexportation, sale, or supply from the

United States or by a U.S. person, wherever located, of goods, technology, or services to Iran or the Government of Iran, including

knowing transfers to a third country for direct or indirect supply,

transshipment, or reexportation to Iran or the Government of Iran,

or specifically for use in the production, commingling with, or incorporation into goods, technology, or services to be supplied, transshipped, or reexported exclusively or predominantly to Iran or the

Government of Iran; (3) knowing reexportation from a third country to Iran or the Government of Iran of certain controlled U.S.-origin goods, technology, or services by a person other than a U.S.

person; (4) the purchase, sale, transport, swap, brokerage, approval, financing, facilitation, guarantee, or other transactions or

dealings by U.S. persons, wherever located, related to goods, technology, or services for exportation, reexportation, sale or supply, directly or indirectly, to Iran or the Government of Iran, or to goods

or services of Iranian origin or owned or controlled by the Government of Iran; (5) new investment by U.S. persons in Iran or in

property or entities owned or controlled by the Government of Iran;

(6) approval, financing, facilitation, or guarantee by a U.S. person

of any transaction by a foreign person that a U.S. person would be

prohibited from performing under the terms of the order; and (7)

any transaction that evades, avoids, or attempts to violate a prohibition under the order.

Executive Order 13059 became effective at 12:01 a.m., eastern

daylight time on August 20, 1997. Because the order consolidated

and clarified the provisions of prior orders, Executive Order 12613

and paragraphs (a), (b), (c), (d) and (f) of section 1 of Executive

Order 12959 were revoked by Executive Order 13059. The revocation of corresponding provisions in the prior Executive orders did

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not affect the applicability of those provisions, or of regulations, licenses or other administrative actions taken pursuant to those provisions, with respect to any transaction or violation occurring before the effective date of Executive Order 13059. Specific licenses

issued pursuant to prior Executive orders continue in effect, unless

revoked or amended by the Secretary of the Treasury. General licenses, regulations, orders, and directives issued pursuant to prior

orders continue in effect, except to the extent inconsistent with Executive Order 13059 or otherwise revoked or modified by the Secretary of the Treasury.

The declaration of national emergency made by Executive Order

12957, and renewed each year since, remains in effect and is not

affected by the order.

3. On March 13, 2000, 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.

4. On April 28, 1999, I announced that existing unilateral economic sanctions programs would be amended to modify licensing

policies to permit case-by-case review of specific proposals for the

commercial sale of agricultural commodities and products, as well

as medicine and medical equipment, where the United States Government has the discretion to do so. I further announced that the

Administration was developing country-specific licensing criteria to

guide the case-by-case review process so that governments subject

to sanctions do not gain unwarranted benefits from such sales.

On July 27, 1999, the Iranian Transactions Regulations, 31 CFR

Part 560 (the ‘‘ITR’’ or the ‘‘Regulations’’) were amended to add

statements of licensing policy with respect to commercial sales of

agricultural commodities and products, medicine and medical

equipment (64 Fed. Reg. 41784, August 2, 1999). These provisions

were amended on October 27, 1999 (64 Fed. Reg. 58789, November

1, 1999) to remove language that had prohibited the issuance of

specific licenses authorizing financing by entities of the governments of Sudan, Libya, and Iran. In addition, technical revisions

were made to the Regulations pertaining to informational materials

and visas.

On March 17, 2000, Secretary of State Madeleine Albright announced that economic sanctions against Iran would be eased to

allow Americans to purchase and import carpets and food products

such as dried fruits, nuts, and caviar from Iran. To implement this

policy, the Department of the Treasury’s Office of Foreign Assets

Control (‘‘OFAC’’) amended the Regulations to authorize by general

license the importation into the United States of, and dealings in,

certain Iranian-origin foodstuffs and carpets and related transactions (65 Fed. Reg. 25642, May 3, 2000).

5. During the current six-month period, OFAC made numerous

decisions with respect to applications for licenses to engage in

transactions under the ITR, and issued 62 licenses. The majority

of license denials were in response to requests to authorize commercial exports to Iran—particularly of machinery and equipment

for various industries—and the importation of Iranian-origin goods.

Twenty-one licenses were issued authorizing commercial sales and

exportation to Iran of bulk agricultural commodities; in addition, liVerDate 11-MAY-2000 10:41 Sep 28, 2000 Jkt 079006 PO 00000 Frm 00007 Fmt 6601 Sfmt 6602 E:\HR\OC\HD297.XXX pfrm07 PsN: HD297
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censes were issued that authorized 20 sales of medicines or medical

equipment. Other licenses that were issued authorized certain air

and marine safety, diplomatic, legal, financial, and travel transactions, filmmaking, humanitarian, journalistic, and research activities, and the importation of the art objects for public exhibition.

Pursuant to Section 3 and 4 of Executive Order 12959, Executive

Order 13059, and consistent with statutory restrictions concerning

certain goods and technology, including those involved in air safety

cases, Treasury continues to consult with the Department of State

and Commerce prior to issuing licenses.

For the period March 15 through September 14, 2000, on OFAC’s

instruction, U.S. banks refused to process more than 1,100 commercial transactions, the majority involving foreign financial institutions, that would have been contrary to U.S. sanctions against

Iran. The transactions rejected amounted to nearly $170 million

worth of business denied Iran by virtue of U.S. economic sanctions. Since my last report, OFAC has collected nearly $342,000 in civil

monetary penalties for violations of IEEPA and the Regulations.

The violators included one insurer, seven companies, six U.S. financial institutions, and six individuals. An additional 102 cases are

undergoing penalty action for violations of IEEPA and the Regulations.

6. On January 14, 2000, the vice president of a Wisconsin corporation was sentenced in the Eastern District of Wisconsin to 41

months in prison for his October 1999 jury conviction on charges

he violated IEEPA and the Arms Export Control Act by illegally exporting U.S.-origin military aircraft component parts to Iran. On

February 3, 2000, the corporation president was sentenced to six

months in prison and ordered to pay $5,000 fine for his guilty plea

to one count of making false statements to the Government, and

the corporation was ordered to pay a fine of $15,000. The defendants were charged with violating sanctions against Iran in an August 1998 indictment.

A California resident is scheduled to be tried in October 2000 in

the District of Maryland for IEEPA and other charges filed in a superseding indictment on March 20, 1997. The indictment charges

the defendant with the attempted exportation to Iran of gas

chromatographs from the United States.

On May 10, 2000, a Georgia corporation plead guilty in U.S. District Court in Atlanta to one count of violating IEEPA by exporting

automobile parts from the United States to Iran through third

countries. Two company officials and entered guilty pleas for making false statements to the United States Government in connection with the shipments. Sentencing is pending. The guilty pleas

were the result of a 24-count indictment returned in December

1998.

Various enforcement actions carried over from previous reporting

periods are continuing and new reports of violations are being aggressively pursued.

7. The expenses incurred by the Federal Government in the sixmonth period from March 15 through September 14, 2000 that are

directly attributable to the exercise of powers and authorities conferred by the declaration of a national emergency with respect to

Iran are reported to be approximately $1.5 million, most of which

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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 Advisor), and the Department of Commerce

(the Bureau of Export Administration and the Chief Counsel’s Office).

8. The situation reviewed above continues to present 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’s 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, 12959, and 13059 continue to advance important objectives in promoting the nonproliferation and anti-terrorism 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.

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