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[House Document 107-251]
[From the U.S. Government Publishing Office]

107th Congress, 2d Session - - - - - - - - - - - - House Document 107-251

 
    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)

September 4, 2002--Referred to the Committee on International Relations 
                       and ordered to be printed
                                           The White House,
                                                        Washington.
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, 50 U.S.C. 
1703(c), I transmit herewith a 6-month periodic report prepared 
by my Administration on the national emergency with respect to 
Libya that was declared in Executive Order 12543 of January 
1986.
            Sincerely,
                                                    George W. Bush.
    Periodic Report on the National Emergency With Respect to Libya

    This report to the Congress covers 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 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. During the current reporting period, OFAC reviewed 
numerous applications for licenses to authorize transactions 
under the Libyan Sanctions Regulations, 31 CFR Part 550 (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 authorized 
remittances between persons who are not blocked parties to flow 
through Libyan banks located outside Libya. Eighteen licenses 
were issued authorizing the commercial sale and exportation of 
bulk agricultural commodities and two for medicine or medical 
equipment. Two licenses authorizing certain legal services and/
or payment of professional fees were also issued. Finally, one 
license was issued authorizing the negotiation of a new 
standstill agreement and one license was issued authorizing the 
negotiation of a new suspension agreement; one license for the 
sale of telecommunications equipment for use in an embassy in 
Libya was also authorized. As of May 9, 2002, a total of 65 
licenses had been issued during the reporting period.
    2. 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. As of May 10, 2002, 75 transactions, totaling more than 
$5.4 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, 140 transactions were rejected, without 
further processing, by U.S. banks causing a disruption of $5.8 
million in financial dealings involving Libya.
    3. Since my last report, OFAC has collected 13 civil 
monetary penalties totaling nearly $90,000 for violations of 
IEEPA and the Regulations from nine U.S. financial 
institutions, two indivdiuals, and two companies. Two of the 
individuals remitting penalties as part of plea agreements with 
the Department of Justice. An additional 14 cases are 
undergoing penalty action for violation of IEEPA and the 
Regulations.
    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 had constructive 
possession or control of the oil at a time when the Government 
of Libya held a blockable interest in the property. Vitol, S.A. 
has filed an appeal in the U.S. Court of Appeals for the Fifth 
Circuit. The matter is still pending before the court. Other 
enforcement actions carried over from previous reporting 
periods continue and new reports of alleged violations are 
being aggressively pursued.
    4. The expenses incurred by the Federal Government in the 
6-month period from January 7 through July 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 $500,000, 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.
    5. Despite the U.N. Security council's suspension of UN 
sanctions against Libya upon the Libyan government's handover 
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 interests of the United 
States and U.S. economic sanctions will, therefore, remain in 
force.

                                
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