Monday, January 11, 1999

 

Volume 35, Issue 1; ISSN: 0511-4187

 

Letter to Congressional leaders reporting on the national emergency with

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

William J Clinton

 

 

� Dear Mr. Speaker: (Dear Mr. President:) On June 9, 1998, by

Executive Order 13088 (63 Fed. Reg. 32109, June 12, 1998), I

declared a 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 Federal Republic of Yugoslavia (Serbia and

Montenegro), and the Republic of Serbia with respect to Kosovo. The

order blocks all property and interests in property of the

Governments of the Federal Republic of Yugoslavia (Serbia and

Montenegro), the Republic of Serbia and the Republic of Montenegro

within the United States or within the possession or control of

United States persons, and prohibits all new investment in the

territory of the Republic of Serbia by United States persons, and

the approval or other facilitation by United States persons of other

persons' new investment in the territory of the Republic of Serbia.

1. The declaration of the national emergency on June 9, 1998, was

made pursuant to the authority vested in me by the Constitution and

laws of the United States, including the International Emergency

Economic Powers Act (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. The emergency declaration was reported by

message to the Congress dated June 10, 1998, pursuant to section

204(b) of the International Emergency Economic Powers Act (50 U.S.C.

1703(b)).

 

 

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

1703(c) and covers the period from June 9 through December 8, 1998.

It discusses only Administration actions and expenses directly

related to the exercise of powers and authorities conferred by the

declaration of a national emergency in Executive Order 13088.

 

 

� 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

Order 13088 and has issued the Federal Republic of Yugoslavia

(Serbia and Montenegro) Kosovo Sanctions Regulations, 31 CFR part

586 (the "Regulations") (63 Fed. Reg. 54575, October 13, 1998). A

copy of the Regulations is attached to this report.

 

 

� The Regulations block all property and interests in property of the

Governments of the Federal Republic of Yugoslavia (Serbia and

Montenegro), the Republic of Serbia, and the Republic of Montenegro

that are in the United States, that hereafter come within the United

States, or that are or hereafter come within the possession of

control of United States persons, including their overseas branches.

The Regulations also prohibit financial transactions with, including

trade financing for, the Governments of the Federal Republic of

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

Republic of Montenegro by United States persons. However, the

Regulations provide an exemption, contained in section 2 of

Executive Order 13088, for financial transactions, including trade

financing, by United States persons within the territory of the

Federal Republic of Yugoslavia (Serbia and Montenegro) that are (a)

conducted exclusively through the domestic banking system within the

Federal Republic of Yugoslavia (Serbia and Montenegro) in local

currency (dinars), or (b) conducted using bank notes or barter.

 

 

� The Regulations also prohibit all new investment in the territory

of the Republic of Serbia by United States persons, and the approval

or other facilitation by United States persons or other persons' new

investment in the territory of the Republic of Serbia. The term "new

investment," means (a) the acquisition of debt or equity interests

in, (b) a commitment or contribution of funds or other assets to, or

(c) a loan or other extension of credit to, a public or private

undertaking, entity, or project, other than donations of funds to

charitable organizations for purely humanitarian purposes. Any

transaction by a United States persons that evades or avoids, or

that has the purpose of evading or avoiding, or attempts to violate,

any of the prohibitions set forth in Executive Order 13088 is

prohibited. Finally, the Regulations provide a general license,

authorizing all transactions by United States persons involving

property or interests in property of the Government of the Republic

of Montenegro, except as provided pursuant to the Federal Republic

of Yugoslavia (Serbia and Montenegro) and Bosnian Serb-Controlled

Areas of the Republic of Bosnia and Herzegovina Sanctions

Regulations, 31 CFR part 585. 3. Since the issuance of Executive

Order 13088 on June 9, 1998, OFAC has issued 73 specific licenses,

the majority of which (55) authorized financial transactions with

respect to personal remittances by individuals to the territory of

the Federal Republic of Yugoslavia (Serbia and Montenegro) and

funding of humanitarian operations by nongovernmental organizations

(NGOs) within the Federal Republic of Yugoslavia (Serbia and

Montenegro). Other licenses authorized certain diplomatic

transactions, transactions related to air safety issues and payment

of overflight fees, the closure of Federal Republic of Yugoslavia

(Serbia and Montenegro) entities formerly operating within the

United States and the liquidation and maintenance of blocked

tangible property, and intellectual property protection for U.S.

firms operating in the Federal Republic of Yugoslavia (Serbia and

Montenegro). OFAC also instituted a mechanism for NGOs to continue

to support humanitarian operations in Yugoslavia and administers a

registration program for NGOs to route money and supplies there as

appropriate.

 

 

� Since June 9, 1998, U.S. banks and banks in the United States have

reported to OFAC that they have blocked 877 transactions totaling

$20,361,767 pursuant to the sanctions. Most of the blockings were of

funds transfers originating from, or destined for, Serbian banks.

 

 

� 4. The expenses incurred by the Federal Government in the 6-month

period from June 9 through December 8, 1998, that are directly

attributable to the declaration of a national emergency with respect

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

the Republic of Serbia in connection with the situation in Kosovo

are estimated at approximately $715,000, 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 and its Chief Counsel's Office), the Department of State, and

the National Security Council. 5. The situation reviewed above

continues to present an extraordinary and unusual threat to the

national security and foreign policy of the United States. The

declaration of the national emergency with respect to the Federal

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

Serbia contained in Executive Order 13088 was made in reaction to

the unacceptable actions and policies of the Belgrade authorities in

Kosovo, and continues to apply. The current situation in Kosovo is

fragile and, as yet, unresolved. It is of particular importance that

developments in Kosovo should not disrupt progress in implementing

the Dayton peace agreement. This threat to the peace of the region

constitutes an unusual and extraordinary threat to the national

security of the United States.

 

 

� With this in mind and in support of the United Nations Security

Council Resolutions 1099 and 1203, I shall continue to exercise the

powers at my disposal with respect to the measures against the

Government of the Federal Republic of Yugoslavia (Serbia and

Montenegro), the Republic of Serbia, and the Republic of Montenegro,

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). Sincerely, William J. Clinton NOTE:

Identical letters were sent to Newt Gingrich, Speaker of the House

of Representatives, and Albert Gore, Jr., President of the Senate.