Monday, June 3, 1996

 

ISSN: 0511-4187; Volume v32; Issue n22

 

Letter to Congressional leaders reporting on the Federal Republic of

Yugoslavia (Serbia and Montenegro).

Bill Clinton

Total number of pages for this article: 4 FULL TEXT

 

 

� May 30, 1995

 

 

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

 

 

� 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) 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

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

(S&M)"), and prohibiting trade-related transactions by United States

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 to block the

property of the Bosnian Serb forces and the authorities in the territory

that they control within the Republic of Bosnia and Herzegovina, as well

as the property of any entity organized or located in, or controlled by

any person in, or resident in, those areas.

 

 

� On December 27, 1995, I issued Presidential Determination No. 96-7,

directing the Secretary of the Treasury, inter alia, to suspend the

application of sanctions imposed on the FRY (S&M) pursuant to the

above-referenced Executive orders and to continue to block property

previously blocked until provision is made to address claims or

encumbrances, including the claims of the other successor states of the

former Yugoslavia. This sanctions relief, in conformity with United

Nations Security Council Resolution ("UNSCR") 1022 of November 22, 1995,

was an essential factor motivating Serbia and Montenegro's acceptance of

the General Framework Agreement for Peace in Bosnia and Herzegovina

initialed by the parties in Dayton, Ohio, on November 21, 1995 (the

"Peace Agreement"), and signed in Paris on December 14, 1995. The

sanctions imposed on the FRY (S&M) and on the United Nations Protected

Areas in the Republic of Croatia were accordingly suspended

prospectively, effective January 16, 1996. Sanctions imposed on the

Bosnian Serb forces and authorities and on the territory that they

control within the Republic of Bosnia and Herzegovina were subsequently

suspended prospectively, effective May 13, 1996, in conformity with

UNSCR 1022.

 

 

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

1703(c) and covers the period from November 30, 1995, to May 29, 1996.

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 of May 30, 1992 (57 FR

23299) and Executive Order 12934 (59 FR 54117) and to expanded sanctions

against the FRY (S&M) and the Bosnian Serbs contained in Executive Order

12810 of June 5, 1992 (57 FR 24347, June 9, 1992), Executive Order 12831

of January 15, 1993 (58 FR 5253, January 21, 1993), Executive Order

12846 of April 25, 1993 (58 FR 25771, April 27, 1993), and Executive

Order 12934 of October 25, 1994 (59 FR 54117, October 27, 1994).

 

 

� 1. The declaration of the national emergency on May 30, 1992, was 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 (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 to the Congress

pursuant to section 204(b) of the International Emergency Economic

Powers Act (50 U.S.C. 1703(b)) and the expansion of that National

Emergency under the same authorities was reported to the Congress on

October 25, 1994. The 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, section 1114 of the Federal Aviation Act (49

U.S.C. App. 1514), and section 5 of the United Nations Participation Act

(22 U.S.C. 287c).

 

 

� 2. Since the declaration of the national emergency with respect to the

FRY (S&M) on May 30, 1992, the Office of Foreign Assets Control ("FAC")

acting under authority delegated by the Secretary of the Treasury has

implemented the sanctions imposed under the foregoing statutes.

Effective January 16, 1996, FAC amended the Federal Republic of

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

the Republic of Bosnia and Herzegovina Sanctions Regulations, 31 C.F.R.

Part 585 (the "Regulations"), to implement in the United States

provisions of the Peace Agreement and UNSCR 1022 (61 FR 1282, January

19, 1996). The amended Regulations authorize prospectively all

transactions with respect to the FRY (S&M) otherwise prohibited.

Property and interests in property of the FRY (S&M) previously blocked

within the jurisdiction of the United States remain blocked, in

conformity with the Peace Agreement and UNSCR 1022, until provision is

made to address claims or encumbrances, including the claims of the

other successor states of the former Yugoslavia. A copy of the amended

Regulations is attached.

 

 

� 3. Section 2 of UNSCR 1022 of November 22, 1995, provides that

sanctions remain in force against the Bosnian Serbs until the day after

the High Representative described in the Peace Agreement or the

Commander of the International Force deployed in accordance with that

Agreement has informed the United Nations Security Council via the

Secretary General that all Bosnian Serb forces had withdrawn behind the

zones of separation established by the Peace Agreement. Finally, UNSCR

1022 provides for the reimposition of sanctions against the Bosnian

Serbs and the FRY (S&M) if either the Bosnian Serbs or the FRY (S&M)

fail significantly to meet their obligations under the Peace Agreement.

 

 

� In light of the Resolution, and the transmittal of the Commander's

report to the Security Council by the U.N. Secretary General on February

26, 1996, FAC amended the Regulations effective May 13, 1996, to

authorize prospectively those transactions previously prohibited with

respect to the Bosnian Serb forces and authorities; entities organized

or located in those areas of the Republic of Bosnia and Herzegovina

under their control; entities owned or controlled directly or indirectly

by any person in, or resident in, those areas; and any person acting for

or on behalf of any of the foregoing. United States persons are also

authorized to engage in transactions involving the areas of the Republic

of Bosnia and Herzegovina under the control of the Bosnian Serb forces,

and services may be exported either from the United States or by United

States persons to those areas. Property and interests in property

previously blocked because of an interest of any of the above persons

remains blocked (61 FR 24696, May 16, 1996). A copy of the amended

Regulations is attached.

 

 

� 4. Over the past 6 months, the Departments of State and the Treasury

have worked closely with European Union (the "EU") member states and

other U.N. member nations to implement the provisions of UNSCR 1022. In

the United States, retention of blocking authority pursuant to the

extension of the national emergency provides a framework for

administration of an orderly claims settlement. This accords with past

policy and practice with respect to the suspension of sanctions regimes.

 

 

� 5. Subsequent to the suspension of sanctions imposed on the FRY (S&M),

effective January 16, 1996, FAC has issued 20 specific licenses

regarding transactions pertaining to the FRY (S&M) or assets it owns or

controls. As of May 14, 1996, specific licenses have been issued (1) to

authorize the unblocking of certain funds and other financial assets

previously blocked; (2) for the payment of crews' wages, vessel

maintenance, and emergency supplies for FRY (S&M)-controlled ships

blocked in the United States; and (3) to authorize performance of

certain transactions under presanctions contracts.

 

 

� During the past 6 months, FAC has continued to oversee the maintenance

of blocked accounts and records with respect to: (1) liquidated tangible

assets and personality of the 15 blocked U.S. subsidiaries of entities

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

records of the 2 Serbian banking institutions in New York previously

placed in secure storage; (3) remaining tangible property, including

real estate; and (4) the 5 Yugoslav-owned vessels still blocked in the

United States.

 

 

� 6. Despite the suspension of sanctions imposed on the FRY (S&M), FAC

has continued to work closely with the U.S. Customs Service and other

cooperating agencies to investigate alleged violations that occurred

while sanctions were in force. On January 31, 1996, a Federal grand jury

in San Jose, California, handed down a three-count indictment against

the owner of a Santa Clara, California-based electronics firm. The

indictment charges that the defendant made three separate shipments of

computer equipment to Macedonia with knowledge that the equipment would

be transshipped to Serbia.

 

 

� Since the last report, FAC has collected eight civil penalties

totaling nearly $33,000. Of these, three were paid by U.S. financial

institutions for violative funds transfers involving the Government of

the FRY (S&M), persons in the FRY (S&M), or entities located or

organized in or controlled from the FRY (S&M). One U.S. company paid a

penalty related to the unlicensed sale of equipment to a FRY (S&M)

entity, another for the unauthorized import of goods originating in the

FRY (S&M). A third company settled a penalty for the performance of a

contract in the FRY (S&M). A law firm and a company remitted penalties

relating to unlicensed payments to the Government of the FRY (S&M) for

intellectual property registrations.

 

 

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

period from November 30, 1995, through May 29, 1996, that are directly

attributable to the declaration of a national emergency with respect to

the FRY (S&M) and the Bosnian Serb forces and authorities are estimated

at about $1.3 million, most of which represent wage and salary costs for

Federal personnel. Personnel costs were largely centered in the

Department of the Treasury (particularly in FAC and its Chief Counsel's

Office, and the U.S. Customs Service), the Department of State, the

National Security Council, the U.S. Coast Guard, and the Department of

Commerce.

 

 

� 8. In the last year, substantial progress has been achieved to bring

about a settlement of the conflict in the former Yugoslavia acceptable

to the parties. Before agreeing to the sanctions suspension, the United

States insisted on a credible reimposition mechanism to ensure the full

implementation of the Peace Agreement. Thus, UNSCR 1022 provides a

mechanism to reimpose the sanctions if the Federal Republic of

Yugoslavia or the Bosnian Serb authorities fail significantly to meet

their obligations under the Peace Agreement. It also provides that

sanctions will not be terminated until after the first free and fair

elections occur in the Republic of Bosnia and Herzegovina, as provided

for in the Peace Agreement, and provided that the Bosnian Serb forces

have continued to respect the zones of separation as provided in the

Peace Agreement. The Resolution also contemplates the continued blocking

of assets potentially subject to conflicting claims and encumbrances

until provision is made to address them, including claims of the other

successor states of the former Yugoslavia.

 

 

� The resolution of the crisis and conflict in the former Yugoslavia

that has resulted from the actions and policies of the Government of the

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

Bosnian Serb forces and the authorities in the territory that they

control, will not be complete until such time as the Peace Agreement is

implemented fully and the terms of UNSCR 1022 have been met. Therefore,

I have continued the national emergency declared on May 30, 1992, as

expanded in scope on October 25, 1994, and will continue to enforce the

measures adopted pursuant thereto.

 

 

� 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), and the Bosnian Serb forces, civil

authorities, and entities, 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.