U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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99–011 2002

107th Congress, 2d Session – – – – – – – – – – – – House Document 107–161

PERIODIC REPORT ON THE NATIONAL EMERGENCY

WITH RESPECT TO LIBYA

COMMUNICATION

FROM

THE PRESIDENT OF THE UNITED STATES

TRANSMITTING

A SIX MONTH PERIODIC REPORT ON THE NATIONAL EMERGENCY

WITH RESPECT TO LIBYA THAT WAS DECLARED IN EXECUTIVE

ORDER 12543 OF JANUARY 7, 1986, PURSUANT TO 50 U.S.C.

1641(c) AND 50 U.S.C. 1703(c)

JANUARY 23, 2002.—Referred to the Committee on International Relations

and ordered to be printed

(1)

THE WHITE HOUSE,

Washington, January 3, 2002.

Hon. J. DENNIS HASTERT,

Speaker of the House of Representatives,

Washington, DC.

DEAR MR. SPEAKER: As required by section 401(c) of the National

Emergencies Act, 50 U.S.C. 1641(c), and section 204(c) of the International Emergency Economic Powers Act (IEEPA), 50 U.S.C.

1703(c), I transmit herewith a 6-month periodic report on the national emergency with respect to Libya that was declared in Executive Order 12543 of January 7, 1986.

Sincerely,

GEORGE W. BUSH.

(3)

PERIODIC REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO

LIBYA

I hereby report to the Congress on developments over the course

of the past 6 months concerning the national emergency with respect to Libya that was declared in Executive Order 12543 of January 7, 1986. This report, based on information provided by relevant

sources, is submitted pursuant to 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).

1. Amendments have been promulgated to the Libyan Sanctions

Regulations, 31 CFR Part 550 (the ‘‘Regulations’’), in order to conform the Regulations to the Trade Sanctions Reform and Export

Enhancement Act of 2000, Title IX of Public Law 106–387 (October

28, 2000) (the ‘‘Trade Act’’). These amendments were published in

the Federal Register on July 12, 2001, (66 FR 36683, July 12,

2001). A copy of the amendments is attached.

2. During the current reporting period, OFAC reviewed numerous applications for licenses to authorize transactions under the

Regulations. Consistent with OFAC’s ongoing scrutiny of banking

transactions, the largest category of authorizations (40) involved

types of financial transactions that are consistent with U.S. policy.

Most of these licenses authorize remittances between persons who

are not blocked parties to flow through Libyan banks located outside Libya. Ten licenses were issued authorizing the commercial

sale and exportation of bulk agricultural commodities and six for

medicine or medical equipment. Seven licenses authorizing certain

legal services were also issued. Finally, two licenses were issued

authorizing travel transactions to and within Libya; one license for

the provision of banking services was also authorized. As of November 6, 2001, a total of 66 licenses had been issued during the

reporting period.

3. OFAC continues to emphasize to the international banking

community in the United States the importance of identifying and

blocking payments made by or on behalf of the Government of

Libya. OFAC worked closely with banks to assure the effectiveness

of interdiction software systems used to identify such payments. As

of November 2, 2001, 80 transactions, totaling more than $3.8 million, were blocked during this reporting period. Under the Regulations, unauthorized commercial funds transfers involving Libya

must be returned to the remitters without further processing, rather than blocked, where there is no blockable interest of the Government of Libya. During the reporting period, 103 transactions were

rejected, without further processing, by U.S. banks causing a disruption of more than $10 million in financial dealings involving

Libya.

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4. Since my last report, OFAC has collected eight civil monetary penalties totaling nearly $58,000 for violations of IEEPA and the

Regulations from three U.S. financial institutions, one carrier, and

four companies. Two of the companies remitted penalties as part of

plea agreements with the Department of Justice. An additional 36

cases are undergoing penalty action for violation of IEEPA and the

Regulations.

5. On August 8, 2001, the President and Vice President of a

Houston, Texas, corporation entered guilty pleas to charges outlined in a one-count criminal information filed in the illegal transshipment in 1995 of concrete pipe coating material to Libya for use

on the Great Man Made River Project (‘‘CMMRP’’). Each defendant

was sentenced to 3 years probation and each paid a civil monetary

penalty in the amount of $5,000 to OFAC. The defendants were

originally named in a multiple count criminal indictment in April

2000 charging violations of the Regulations, IEEPA, and other federal statutes for transactions in furtherance of a multimillion-dollar contract to supply pipe coating material for the GMMRP in

Libya. All of these transactions occurred without a specific license

from OFAC. In addition to the criminal prosecution, the Department of Justice proceeded with criminal forfeiture against the defendants in this case. Other enforcement actions carried over from

previous reporting periods continue and new reports of alleged violations are being aggressively pursued.

On September 17, 2001, the U.S. District Court for the Southern

District of Texas granted the government’s motion for summary

judgment in the case Vitol, S.A. v. U.S. Dep’t. of the Treasury, et

al. The plaintiff, Vitol, S.A., challenged the government’s 1994

blocking of approximately 350,000 barrels of Libyan-origin fuel oil.

In granting the government’s motion, the Court affirmed the blocking based on the government’s reasonable determination that a

U.S. person has constructive possession or control of the oil at a

time when the Government of Libya held a blockage interest in the

property.

6. The expenses incurred by the Federal Government in the 6-

month period from July 7, 2001, through January 6, 2002, that are

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

Libya, are reported to be more than $410,000, 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) and the Departments of State and

Commerce.

7. Despite the U.N. Security Council’s suspension of U.N. sanctions against Libya upon the Libyan government hand over of the

Pan Am 103 bombing suspects in April 1999, and a Scottish court’s

conviction of one suspect on January 31, 2001, Libya has not yet

complied with U.N. Security Council Resolutions 731 (1992), 748

(1992), and 883 (1993), including Libya’s obligation to accept responsibility for the actions of Libyan officials and to pay appropriate compensation. Libya continues to pose an unusual and extraordinary threat to the national security and foreign policy interVerDate 11-MAY-2000 17:28 Jan 24, 2002 Jkt 099011 PO 00000 Frm 00006 Fmt 6601 Sfmt 6602 E:\HR\OC\HD161.XXX pfrm04 PsN: HD161
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ests of the United States and U.S. economic sanctions will, therefore, remain in force.

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