Monday, August 19, 1996

 

ISSN: 0511-4187; Volume v32; Issue n33

 

Letter to congressional leaders on Iraq.(of Aug 14, 1996)

Bill Clinton

Total number of pages for this article: 3 FULL TEXT

 

 

� August 14, 1996

 

 

� Dear Mr. Speaker: (Dear Mr. President:)

 

 

� I hereby report to the Congress on the developments since my last

report of February 9, 1996, concerning the national emergency with

respect to Iraq that was declared in Executive Order No. 12722 of August

2, 1990. This report is submitted pursuant to 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).

 

 

� Executive Order No. 12722 ordered the immediate blocking of all

property and interests in property of the Government of Iraq (including

the Central Bank of Iraq) then or thereafter located in the United

States or within the possession or control of a U.S. person. That order

also prohibited the importation into the United States of goods and

services of Iraqi origin, as well as the exportation of goods, services,

and technology from the United States to Iraq. The order prohibited

travel-related transactions to or from Iraq and the performance of any

contract in support of any industrial, commercial, or governmental

project in Iraq. U.S. persons are also prohibited from granting or

extending credit or loans to the Government of Iraq.

 

 

� The foregoing prohibitions (as well as the blocking of Government of

Iraq property) were continued and augmented on August 9, 1990, by

Executive Order No. 12724, which was issued in order to align the

sanctions imposed by the United States with United Nations Security

Council Resolution 661 of August 6, 1990.

 

 

� Executive Order No. 12817 was issued on October 21, 1992, to implement

in the United States measures adopted in United Nations Security Council

Resolution ("UNSCR") 778 of October 2, 1992. UNSCR 778 requires U.N.

Member States to transfer to a U.N. escrow account any funds (up to $200

million apiece) representing Iraqi oil sale proceeds paid by purchasers

after the imposition of U.N. sanctions on Iraq, to finance Iraq's

obligations for U.N. activities with respect to Iraq, such as expenses

to verify Iraqi weapons destruction, and to provide humanitarian

assistance in Iraq on a nonpartisan basis. A portion of the escrowed

funds also funds the activities of the U.N. Compensation Commission in

Geneva, which handles claims from victims of the Iraqi invasion and

occupation of Kuwait. Member States also may make voluntary

contributions to the account. The funds placed in the escrow account are

to be returned, with interest, to the Member States that transferred

them to the United Nations, as funds are received from future sales of

Iraqi oil authorized by the U.N. Security Council. No Member State is

required to fund more than half of the total transfers or contributions

to the escrow account.

 

 

� This report discusses only matters concerning the national emergency

with respect to Iraq that was declared in Executive Order No. 12722 and

matters relating to Executive Orders No. 12724 and 12817 (the "Executive

Orders"). The report covers events from February 2, 1996, through August

1, 1996.

 

 

� 1. In April 1995, the U.N. Security Council adopted UNSCR 986

authorizing Iraq to export up to $1 billion in petroleum and petroleum

products per quarter for 6 months under U.N. supervision in order to

finance the purchase of food, medicine, and other humanitarian supplies.

This arrangement may be renewed by the Security Council for additional

6-month periods. UNSCR 986 includes arrangements to ensure equitable

distribution of humanitarian goods purchased with UNSCR 986 oil revenues

to all the people of Iraq. The resolution also provides for the payment

of compensation to victims of Iraqi aggression and for the funding of

other U.N. activities with respect to Iraq. On May 20, 1996, a

memorandum of understanding was concluded between the Secretariat of the

United Nations and the Government of Iraq agreeing on terms for

implementing UNSCR 986. Further implementation procedures are being

considered by the Iraq Sanctions Committee which is composed of members

of the Security Council.

 

 

� 2. During the reporting period, there was one amendment to the Iraqi

Sanctions Regulations (the "ISR"). On July 10, 1996, the Department of

the Treasury's Office of Foreign Assets Control ("OFAC") amended the ISR

to provide a general license authorizing U.S. persons to enter into

executory contracts with the Government of Iraq for the purchase of

Iraqi-origin petroleum and petroleum products, the sale of essential

parts and equipment for the Kirkuk-Yumurtalik pipeline system, and the

sale of humanitarian goods and services, with performance conditioned

upon approval by the Office of Foreign Assets Control within the

framework of United Nations Security Council Resolution 986 (1995). (61

Fed. Reg. 36627, July 12, 1996.) A copy of the amended Regulations is

attached.

 

 

� All executory contracts must contain terms requiring that all proceeds

of oil purchases from the Government of Iraq, including the State Oil

marketing organization, must be placed in the U.N. escrow account at

Banque Nationale de Paris, New York (the "986 Escrow Account"), and all

Iraqi payments for authorized sales of pipeline parts and equipment,

humanitarian goods, and incidental transaction costs borne by Iraq will,

upon approval by the UNSC committee established pursuant to UNSCR 661

("the 661 Committee"), be paid or payable out of the 986 Escrow Account.

 

 

� 3. Investigations of possible violations of the Iraqi sanctions

continue to be pursued and appropriate enforcement actions taken.

Several cases from prior reporting periods are continuing and recent

additional allegations have been referred by OFAC to the U.S. Customs

Service for investigation. Several OFAC civil penalty proceedings are

pending.

 

 

� Investigation also continues into the roles played by various

individuals and firms outside Iraq in the Iraqi government procurement

network. These investigations may lead to additions to OFAC's listing of

individuals and organizations determined to be Specially Designated

Nationals ("SDNs") of the Government of Iraq.

 

 

� 4. Pursuant to Executive Order No. 12817 implementing UNSCR 778, on

October 28, 1992, OFAC directed the Federal Reserve Bank of New York to

establish a blocked account for receipt of certain post-August 6, 1990,

Iraqi oil sales proceeds, and to hold, invest, and transfer these funds

as required by the Order. Cumulative transfers from the blocked Federal

Reserve Bank of New York account since issuance of Executive Order No.

12817 amounted to $200 million as of December 21, 1995, fully satisfying

the United States' commitment to match the payments of other Member

States from blocked Iraqi oil payments, and its obligation pursuant to

UNSCR 778.

 

 

� 5. The Office of Foreign Assets Control has issued a total of 630

specific licenses regarding transactions pertaining to Iraq or Iraqi

assets since August 1990. Licenses have been issued for transactions

such as the filing of legal actions against Iraqi governmental entities,

legal representation of Iraq, and the exportation to Iraq of donated

medicine, medical supplies, and food intended for humanitarian relief

purposes, the execution of powers of attorney relating to the

administration of personal assets and decedents' estates in Iraq and the

protection of preexistent intellectual property rights in Iraq. Since my

last report, 12 specific licenses have been issued.

 

 

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

period from February 2, 1996, through August 1, 1996, 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 $1 million, most of which represents 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), the Department of

State (particularly the Bureau of Economic and Business Affairs, the

Bureau of Near Eastern Affairs, the Bureau of International Organization

Affairs, the Bureau of Political-Military Affairs, the U.S. Mission to

the United Nations, and the Office of the Legal Advisor), and the

Department of Transportation (particularly the U.S. Coast Guard).

 

 

� 7. 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 United Nations Security

Council resolutions. Security Council resolutions on Iraq call for the

elimination of Iraqi weapons of mass destruction, Iraqi recognition of

Kuwait and the inviolability of the Iraq-Kuwait boundary, the release of

Kuwaiti and other third-country Nationals, compensation for victims of

Iraqi aggression, long-term monitoring of weapons of mass destruction

capabilities, the return of Kuwaiti assets stolen during Iraq's illegal

occupation of Kuwait, renunciation of terrorism, an end to internal

Iraqi repression of its own civilian population, and the facilitation of

access of international relief organizations to all those in need in all

parts of Iraq. Six years after the invasion, a pattern of defiance

persists: a refusal to account for missing Kuwaiti detainees; failure to

return Kuwaiti property worth millions of dollars, including military

equipment that was used by Iraq in its movement of troops to the Kuwaiti

border in October 1994; sponsorship of assassinations in Lebanon and in

northern Iraq; incomplete declarations to weapons inspectors and refusal

of unimpeded access; and ongoing widespread human rights violations. As

a result, the U.N. sanctions remain in place; the United States will

continue to enforce those sanctions under domestic authority.

 

 

� The Baghdad government continues to violate basic human rights of its

own citizens through systematic repression of minorities and denial of

humanitarian assistance. The Government of Iraq has repeatedly said it

will not be bound by UNSC Resolution 688. For nearly 5 years, Baghdad

has maintained a blockade of food, medicine, and other humanitarian

supplies against northern Iraq. The Iraqi military routinely harasses

residents of the north, and has attempted to "Arabize" the Kurdish,

Turcomen, and Assyrian areas in the north. Iraq has not relented in its

artillery attacks against civilian population centers in the south, or

in its burning and draining operations in the southern marshes, which

have forced thousands to flee to neighboring States.

 

 

� 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 U.N. resolutions affirm that the Security Council must be assured of

Iraq's peaceful intentions in judging its compliance with sanctions.

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.

 

 

� 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.