U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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89–011 2001

107th Congress, 1st Session – – – – – – – – – – – – – House Document 107–6

REPORT TO CONGRESS ON THE NATIONAL EMERGENCIES WITH RESPECT TO THE FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND MONTENEGRO)

AND KOSOVO

COMMUNICATION

FROM

THE PRESIDENT OF THE UNITED STATES

TRANSMITTING

A REPORT ON DEVELOPMENTS CONCERNING THE NATIONAL

EMERGENCY WITH RESPECT TO THE FEDERAL REPUBLIC OF

YUGOSLAVIA (SERBIA AND MONTENEGRO) AND KOSOVO, PURSUANT TO 50 U.S.C. 1703(c)

JANUARY 3, 2001.—Referred to the Committee on International Relations

and ordered to be printed

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THE WHITE HOUSE,

Washington, December 20, 2000.

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 the Yugoslavia (Serbia and Montenegro) emergency declared in Executive Order 12808 on May 30,

1992, and with respect to the Kosovo emergency declared in Executive Order 13088 on June 9, 1998.

Sincerely,

WILLIAM J. CLINTON.

(3)

REPORT TO CONGRESS ON THE NATIONAL EMERGENCIES WITH RESPECT TO THE FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND

MONTENEGRO) AND KOSOVO

On May 30, 1992, by Executive Order 12808, President Bush declared a national emergency to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy

of the United States constituted by the actions and policies of the

Governments of Serbia and Montenegro, blocking all property and

interests in property of those Governments. President Bush took

additional measures to prohibit trade and other transactions with

the Federal Republic of Yugoslavia (Serbia and Montenegro) (the

‘‘FRY (S&M)’’), by Executive Orders 12810 and 12831, issued on

June 5, 1992, and January 15, 1993, respectively.

On April 25, 1993, I issued Executive Order 12846, blocking the

property and interests in property of all commercial, industrial, or

public utility undertakings or entities organized or located in the

FRY (S&M), and prohibiting trade-related transactions by U.S. persons involving those areas of the Republic of Bosnia and

Herzegovina controlled by the Bosnian Serb forces and the United

Nations Protected Areas in the Republic of Croatia. On October 25,

1994, because of the actions and policies of the Bosnian Serbs, I expanded the scope of the national emergency by issuance of Executive Order 12934.

On November 22, 1995, the United Nations Security Council

passed Resolution (‘‘UNSCR’’) 1022, immediately and indefinitely

suspending U.N. economic sanctions against the FRY (S&M). On

October 1, 1996, the United Nations passed UNSCR 1074, terminating U.N. sanctions against the FRY (S&M) and the Bosnian

Serbs in light of the elections that took place in Bosnia and

Herzegovina on September 14, 1996. Both UNSCR 1022 and

UNSCR 1074, however, provided that funds and assets previously

blocked pursuant to sanctions against the FRY (S&M) that are subject to claims and encumbrances, or that are the property of persons deemed insolvent, shall remained blocked until ‘‘released in

accordance with applicable law.’’ This provision was implemented

in the United States on December 27, 1995, by Presidential Determination No. 96–7, which directed the Secretary of the Treasury to

suspend the application of sanctions on the FRY (S&M) and to continue to block property previously blocked.

On June 9, 1998, by Executive Order 13088, I declared a new

and separate national emergency to deal with the unusual and extraordinary threat to the national security and foreign policy of the

United States constituted by the actions and policies of the Governments of the FRY (S&M) and the Republic of Serbia with respect

to Kosovo. Executive Order 13088, with certain exceptions, blocked

all property and interests in property of the Governments of the

FRY (S&M), the Republic of Serbia, and the Republic of MonteVerDate 11-MAY-2000 00:01 Jan 05, 2001 Jkt 089011 PO 00000 Frm 00005 Fmt 6601 Sfmt 6601 E:\HR\OC\HD006.XXX pfrm03 PsN: HD006
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negro within the United States or within the possession or control

of U.S. persons, and prohibited all new investment in the territory

of the Republic of Serbia by U.S. persons, and the approval or other

facilitation by U.S. persons of other persons’ new investment in the

territory of the Republic of Serbia.

On April 30, 1999, I took additional steps with respect to the national emergency declared in Executive Order 13088 by issuing Executive Order 13121, which became effective at 12:01 a.m., EDT,

May 1, 1999. Executive Order 13121 continues to block all property

and interests in property of the Governments of the FRY (S&M),

the Republic of Serbia, and the Republic of Montenegro within the

United States or within the possession or control of U.S. persons.

The Order also revoked section 2 of Executive Order 13088, which

had permitted U.S. persons to engage in certain financial transactions within the territory of the FRY (S&M). Executive Order

13121 added a new section 2 to Executive Order 13088, which prohibits trade transactions involving the FRY (S&M).

On October 12, 2000, in support of Yugoslavia’s newly elected

leaders, I directed the Department of the Treasury and the Department of State to take immediate steps to begin lifting trade and financial sanctions imposed against Serbia in 1998 and 1999, except

those targeted against members of the former regime. This directive included, with immediate effect, lifting of the oil embargo and

flight ban.

The present report is submitted pursuant to 50 U.S.C. 1641(c)

and 1703(c) and covers the period from May 30 through November

29, 2000. It discusses Administration actions and expenses directly

related to the exercise of powers and authorities conferred by the

declaration of a national emergency in Executive Order 12808 as

modified by Executive Order 12810, Executive Order 12831, Executive Order 12846, and Executive Order 12934, the declaration of a

national emergency in Executive Order 13088, as revised by Executive Order 13121, and my October 12 statement on the lifting of

sanctions against Serbia.

1. The declaration of the national emergency in Executive Order

12808 on May 30, 1992, and the declaration of a national emergency in Executive Order 13088 on June 9, 1998, were made pursuant to the authority vested in the President by the Constitution

and laws of the United States, including the International Emergency Economic Powers Act (‘‘IEEPA’’) (50 U.S.C. 1701 et seq.), the

National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301

of title 3 of the United States Code. Additional sanctions set forth

in related Executive orders were imposed pursuant to the authority

vested in the President by the Constitution and laws of the United

States, including the statutes cited above, sections 1114 of the Federal Aviation Act of 1958 (49 U.S.C. App. 1514), and section 5 of

the United Nations Participation Act of 1945 (22 U.S.C. 287c).

2. The Office of Foreign Assets Control (‘‘OFAC’’), acting under

authority delegated by the Secretary of the Treasury, implemented

the sanctions imposed under the foregoing statutes and Executive

orders in the Federal Republic of Yugoslavia (Serbia and Montenegro) and Bosnia Serb-Controlled Areas of the Republic of Bosnia

and Herzegovina Sanctions Regulations, 31 CFR Part 585 (the

‘‘Regulations’’) and the Federal Republic of Yugoslavia (Serbia and

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Montenegro) Kosovo Sanctions Regulations, 31 CFR Part 586 (the

‘‘Kosovo Sanctions Regulations’’). On November 8, 1999, pursuant

to the Kosovo Sanctions Regulations, OFAC published in the Federal Register changes to appendix A to 31 CFR Chapter V, inter

alia, adding the names of 650 entities determined to be state- or

socially-owned entities organized or located in the FRY (S&M) and

76 individuals determined to be acting for or on behalf of the Governments of the FRY (S&M) and/or the Republic of Serbia by virtue

of the high-level positions they hold in those governments (64 Fed.

Reg. 60660).

On June 10, 1998, OFAC issued General License No. 1, excluding

the Government of the Republic of Montenegro from the blocking

provisions of the Kosovo sanctions. On May 5, 1999, OFAC issued

a Notice revoking provisions of the Kosovo Sanctions Regulations

that were inconsistent with the additional sanctions imposed in Executive Order 13121. By the Notice of May 5, 1999, OFAC also

issued General License No. 2 authorizing certain trade and traderelated transactions involving the Republic of Montenegro that

would otherwise be prohibited by Executive Order 13088, as revised.

On May 20, 1999, OFAC issued General License No. 3, authorizing all transactions ordinarily incident to the exportation of goods

(including petroleum and petroleum products), software, or technology (including technical data) from the United States or reexportation of U.S.-origin goods, software, or technology from a foreign

country to any person in the FRY (S&M), to the Government of the

FRY (S&M), or to the Government of the Republic of Serbia, provided that the following terms and conditions, among others, are

met: (1) the exportation or reexportation is licensed or otherwise

authorized by the Department of Commerce under the provisions

of the Export Administration Act of 1979 (50 U.S.C. App. 2401 et

seq.) and IEEPA; and (2) the exportation or reexportation is financed by a financial institution in a third country that is neither

a U.S. person nor a person whose property is blocked pursuant to

the Kosovo Sanctions Regulations, or by cash payment in advance,

or by open account financing not to exceed 90 days net.

On August 19, 1999, OFAC issued General License No. 4, authorizing, subject to specific terms and conditions, certain trade and

trade-related transactions involving the territory of Kosovo that

would otherwise be prohibited by Executive Order 13088, as revised. General License No. 4 also authorizes all new investment by

U.S. persons in the territory of Kosovo and the approval or other

facilitation by U.S. persons of other persons’ new investment in the

territory of Kosovo.

To implement the President’s directive on the lifting of sanctions

against Serbia, on October 12, OFAC issued General Licenses No.

5 and No. 6. General License No. 5 authorizes air transportationrelated transactions involving the FRY (S&M). This authorization

includes: (1) the provision of air transportation services, directly or

indirectly, between the United States and the FRY (S&M); (2) the

provision of ground support services by Judoslovenski

Aerotransport (‘‘JAT’’) in the FRY (S&M) or in any third country;

(3) the operation of charter flights to or from the FRY (A&M), except for a charter flight operated by or for JAT; and (4) the payVerDate 11-MAY-2000 00:01 Jan 05, 2001 Jkt 089011 PO 00000 Frm 00007 Fmt 6601 Sfmt 6602 E:\HR\OC\HD006.XXX pfrm03 PsN: HD006
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ment of charges for services rendered and all fees assessed in connection with taking off from, landing in, or overflying the FRY

(S&M). General License No. 5 does not authorize any transactions

or dealings, directly or indirectly, by a U.S. person relating to JAT

taking off from, landing in, or overflying the United States. Finally,

General License No. 5 does not excuse a person from complying

with other applicable laws, including, but not limited to, title 49 of

the U.S. Code and regulations issued thereunder, as well as those

laws governing the importation, exportation, reexportation, sale or

supply of goods, software, technology (including technical data), or

services.

General License No. 6 authorizes transactions relating to the exportation of petroleum and petroleum products to the FRY (S&M).

All transactions or dealings relating to the exportation, reexportation, sale, or supply, directly or indirectly, from the United

States, or by a U.S. person, wherever located, of any petroleum or

petroleum products to the FRY (S&M) are authorized. General License No. 6 does not authorize: (1) any transactions or dealings, directly or indirectly, with Jugopetrol or Nis-Nafta Industrija Srebije;

(2) any transactions or dealings, by a U.S. person with any financial institution located or headquartered in the Republic of Serbia;

or (3) any debit to a blocked account or setoff against blocked property. Moreover, General License No. 6 does not excuse a person

from complying with other applicable U.S. laws and regulations, including, but not limited to, those governing the exportation, reexportation, sale or supply of goods, software, technology (including

technical data), or services.

3. Over the past four years, the Departments of State and the

Treasury have worked closely with European Union member states

and other U.N. member nations to implement the provisions of

UNSCR 1022 and UNSCR 1074. In the United States, retention of

statutory blocking authority pursuant to the extension of a national

emergency helps provide a framework for administration of an orderly claims settlement process. This accords with past policy and

practice with respect to the suspension of sanctions regimes.

4. During this reporting period, OFAC issued a total of 59 specific licenses pursuant to the Regulations. Specific licenses were

issued to: (1) unblock wire transfers involving generally small

amounts of individuals’ purely personal funds; (2) authorize the

settlement of pending legal actions and receipt of payment for legal

services; (3) authorize certain transactions relating to air safety

policy; and (4) authorize certain administrative transactions by

other United States government agencies. No additional OFAC registrations of nongovernmental agencies providing humanitarian assistance have been made since my last report. Thus, the total of

such registrations since the inception of the program remains at

50.

During the past six months, OFAC has continued to oversee the

maintenance of FRY (S&M) accounts blocked pursuant to 31 CFR

Part 585, and records with respect to: (1) liquidated tangible assets

and personalty of the fifteen blocked U.S. subsidiaries of entities

organized in the FRY (S&M); (2) the blocked personalty, files, and

records of the two Serbian banking institutions in New York previously placed in secure storage; and (3) remaining blocked FRY

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(S&M) tangible property, including real estate. Pursuant to the

Kosovo Sanctions Regulations, 31 CFR Part 586, OFAC blocked

146 transactions totaling more than $3.7 million during this reporting period. Most of the blockings were of funds transfers originating from, or destined for, Serbian banks. In addition, 369 funds

transfers totaling more than $3.8 million were rejected by U.S.

banking institutions as contrary to U.S. sanctions.

5. OFAC has continued to work closely with the U.S. Customs

Service and other cooperating agencies to investigate alleged violations of the sanctions imposed pursuant to Executive Order 12808,

as modified, and Executive Order 13088, as revised.

On February 16, 2000, a resident alien, along with his company,

was named in a 40-count indictment in the Central District of California. The indictment alleged unauthorized sales and exportation

from the United States of aircraft parts to Jugoslovenski

Aerotransport (‘‘JAT’’) in the FRY (S&M) and further alleged conspiracy with U.S. persons to acquire U.S.-manufactured aircraft

parts from companies such as Boeing, Pratt & Whitney, Honeywell,

and others for resale and exportation to JAT. The defendant

shipped the aircraft parts to JAT in third countries with the knowledge that they would be transshipped to the FRY (S&M) without

authorization by the United States Government. Trial has been

scheduled for February 2001.

On October 10, 2000, a New York corporation pleaded guilty in

the Southern District of New York to one count of exporting carbon

black from the United States to Serbia in violation of IEEPA and

the Regulations. Carbon black is a component in the manufacture

of tires. This action was the culmination of a lengthy and difficult

investigation by the U.S. Customs Service that began in 1993. The

defendant has stipulated in a plea agreement to pay a criminal fine

of between $40,000 and $60,000 for its violation of IEEPA and the

FRY (S&M) sanctions.

Since my last report, OFAC has collected six civil monetary penalties totaling more than $80,000 for violations of the sanctions.

These violations involved prohibited payments either to the Government of the FRY (S&M), persons in the FRY (S&M), or to

blocked entities owned or controlled by the Government of the FRY

(S&M), as well as the export of unauthorized services to the FRY

(S&M). The violators included three U.S. financial institutions, one

company, one organization, and one individual. An additional two

cases are undergoing penalty action for violation of the Regulations, and an additional 46 cases are undergoing penalty action for

violation of the Kosovo Sanctions Regulations.

6. The expenses incurred by the Federal Government in the sixmonth period from May 30 through November 29, 2000 that are directly attributable to the declaration of the national emergencies in

Executive Orders 12808 and 13088 are estimated at approximately

$700,000, most of which represents wage and salary costs for Federal personnel. Personnel costs were largely centered in the Department of the Treasury (particularly in OFAC, the Chief Counsel’s Office (Office of Foreign Assets Control), and the U.S. Customs

Service), the Department of State, the National Security Council,

and the Department of Commerce.

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7. Serbia’s September 24, 2000, elections unleashed a chain of

events leading to the dramatic end of the Milosevic dictatorship a

few days later. Following confirmation of the victory of democratic

forces, on October 12, 2000, I directed the Departments of Treasury

and State to remove the flight ban and oil embargo and take immediate steps to lift remaining sanctions. We have a strong interest

in supporting Yugoslavia’s newly elected leaders as they work to

build a truly democratic society. Further, we will ensure that such

sanctions-lifting measures do not allow supporters of Milosevic to

continue the systematic theft of resources that have marked the

last thirteen years.

I shall continue to exercise the powers at my disposal with respect to the measures against the former Government of the FRY

(S&M) and the former Government of the Republic of Serbia as

long as these measures are appropriate, and will continue to report

periodically to the Congress on significant developments pursuant

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

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