U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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99–011 2002

107th Congress, 2d Session – – – – – – – – – – – – House Document 107–179

PERIODIC REPORT ON THE

NATIONAL EMERGENCY WITH RESPECT TO IRAQ

MESSAGE

FROM

THE PRESIDENT OF THE UNITED STATES

TRANSMITTING

A SIX MONTH PERIODIC REPORT ON THE NATIONAL EMERGENCY

WITH RESPECT TO IRAQ THAT WAS DECLARED IN EXECUTIVE

ORDER 12722 OF AUGUST 2, 1990, PURSUANT TO 50 U.S.C. 1641(c)

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

FEBRUARY 5, 2002.—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), and section 204(c) of the International Emergency Economic Powers Act, 50 U.S.C. 1703(c), I am providing a 6-

month periodic report prepared by my Administration on the national emergency with respect to Iraq that was declared in Executive Order 12722 of August 2, 1990.

GEORGE W. BUSH.

THE WHITE HOUSE, February 4, 2002.

(3)

PERIODIC REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO

IRAQ

This report to the Congress covers the developments over the

course of the past 6 months concerning the national emergency

with respect to Iraq that was declared in Executive Order 12722

of August 2, 1990, and matters relating to Executive Order 12724

of August 9, 1990, and Executive Order 12817 of October 23, 1992.

This report is submitted pursuant to section 204(c) of the International Emergency Economic Powers Act, 50 U.S.C. 1703(c)

(‘‘IEEPA’’), and section 401(c) of the National Emergencies Act, 50

U.S.C. 1641(c).

1. There have been no amendments to the Iraqi Sanctions Regulations, 31 C.F.R. Part 575 (the ‘‘Regulations’’) during the current

reporting period.

2. Since December 10, 1996, OFAC has issued specific licenses

authorizing participation by U.S. persons in commercial sales of

humanitarian goods to Iraq funded by Iraqi oil sales, and imports

of Iraqi petroleum products, pursuant to United Nations Security

Council Resolution (‘‘UNSCR’’) 986 and succeeding resolutions. the

total value of humanitarian sales since 1996 is approximately $669

million. Of this amount, OFAC licenses have authorized sales of

about $462 million in basic foodstuffs, nearly $68 million for medicines and medical supplies, more than $123 million for water testing and treatment equipment, irrigation systems, and other infrastructure components essential to the delivery to the Iraqi people

of food, medicine, other necessities of life, and approximately $15

million to fund a variety of United Nations activities in Iraq. During the current reporting period, as of December 3, 2001, OFACauthorized humanitarian sales were valued at nearly $22 million,

a decrease of $38 million from the prior reporting period.

In the period from February 2 to November 27, 2001, importations of Iraqi crude oil, authorized by OFAC pursuant to UNSCR

1153, were valued at approximately $203 million. In addition, sales

of oil infrastructure merchandise authorized since November 10,

1998, in conformity with UNSCRs 1153 and 1175, were valued at

nearly $140 million. OFAC issued 58 licenses during the reporting

period for the sale of oilfield parts and equipment to the Government of Iraq.

Finally, an additional 24 licenses were issued authorizing certain

diplomatic and travel transactions, the provision of legal services

(including the protection of intellectual property), and the

unblocking of wire transfer transactions where it was determined

that there was no interest of the Government of Iraq.

3. As of December 5, 2001, 29 transactions totaling more than $1

million were blocked during the reporting period. Forty-one transactions, not involving blockable interests, were rejected by U.S.

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banks causing a disruption of more than $5 million in business for

Iraq.

4. Since my last report, OFAC has collected 4 civil monetary pen- alties totaling nearly $280,000 for violations of the sanctions. Two

U.S. companies and three individuals paid the penalties for violations involving exports and an attempted export of goods to Iraq.

An additional twenty cases are undergoing agency penalty or debt

collection action for violation of the Regulations.

On November 23, 2001, OFAC issued an order to a U.S. company

to place into a blocked account funds reflecting a contract price for

approximately 1.075 million barrels of Iraqi-origin oil that were excluded from OFAC’s general license authorizing the importation of

oil from Iraq under the oil for food program. The unlicensed oil was

part of a larger shipment of oil purchased from Iraq by a non-U.S.

entity that is believed to have exceeded the exportation authorization granted to it by the U.N. 661 Committee. An investigation of

this matter is continuing.

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

month period from August 2, 2001, through February 1, 2002, that

are directly attributable to the exercise of powers and authorities

conferred by the declaration of a national emergency with respect

to Iraq, are reported to be about $195,000, 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 Department of State.

6. The United States imposed economic sanctions on Iraq in response to Iraq’s illegal invasion and occupation of Kuwait, a clear

act of brutal aggression. The United States, together with the

international community, is maintaining economic sanctions

against Iraq because the Iraqi regime has failed to comply fully

with relevant United Nations Security Council resolutions. Iraqi

compliance with these resolutions is necessary before the United

States will consider lifting economic sanctions.

The policies and actions of the Saddam Hussein regime continue

to pose an unusual and extraordinary threat to the national security and foreign policy of the United States, as well as to regional

peace and security. The Security Council resolutions affirm that

the Security Council review Iraq’s policies and practices in judging

Iraq’s compliance with those resolutions. Because of Iraq’s failure

to comply fully with these resolutions, the United States will continue to apply economic sanctions to deter it from threatening

peace and stability in the region.

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