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Weapons of Mass Destruction (WMD)

USIS Washington File

17 September 1998

TEXT: PRESIDENT'S REPORT TO CONGRESS ON IRAN NATIONAL EMERGENCY

(Iran continues to present threat to U.S. national security) (2250)
Washington -- "The actions and policies of the Government of Iran
continue to present an extraordinary and unusual threat to the
national security, foreign policy, and economy of the United States,"
President Clinton said in a September 17 letter to Congress.
In his report on developments concerning the national emergency with
respect to Iran, the President cited in particular Iran's support of
international terrorism, its efforts to undermine the Middle East
Peace Process and its efforts to acquire weapons of mass destruction
and the means to deliver them.
"The declaration of the national emergency with respect to Iran
contained in Executive Order 12957 and the comprehensive economic
sanctions imposed by Executive Order 12959 underscore the [U.S.]
Government's opposition to the actions and policies of the Government
of Iran," he stated.
"I shall exercise the powers at my disposal to deal with these
problems and will report periodically to the Congress on significant
developments," he said.
Following is the text of the report:
(Begin text)
THE WHITE HOUSE
Office of the Press Secretary
September 17, 1998
TO THE CONGRESS OF THE UNITED STATES:
I hereby report to the Congress on developments concerning the
national emergency with respect to Iran that was declared in Executive
Order 12957 of March 15, 1995, and matters relating to the measures in
that order and in Executive Order 12959 of May 6, 1995, and in
Executive Order 13059 of August 19, 1997. This report is submitted
pursuant to section 204(c) of the International Emergency Economic
Powers Act, 50 U.S.C. 1703(c) (IEEPA), section 401(c) of the National
Emergencies Act, 50 U.S.C. 1641(c), and section 505(c) of the
International Security and Development Cooperation Act of 1985, 22
U.S.C. 2349aa-9(c). This report discusses only matters concerning the
national emergency with respect to Iran that was declared in Executive
Order 12957 and does not deal with those relating to the emergency
declared on November 14, 1979, in connection with the hostage crisis.
1. On March 15, 1995, I issued Executive Order 12957 (60 Fed. Reg.
14615, March 17, 1995) to declare a national emergency with respect to
Iran pursuant to IEEPA, and to prohibit the financing, management, or
supervision by United States persons of the development of Iranian
petroleum resources. This action was in response to actions and
policies of the Government of Iran, including support for
international terrorism, efforts to undermine the Middle East peace
process, and the acquisition of weapons of mass destruction and the
means to deliver them. A copy of the Order was provided to the Speaker
of the House and the President of the Senate by letter dated March 15,
1995.
Following the imposition of these restrictions with regard to the
development of Iranian petroleum resources, Iran continued to engage
in activities that represent a threat to the peace and security of all
nations, including Iran's continuing support for international
terrorism, its support for acts that undermine the Middle East peace
process, and its intensified efforts to acquire weapons of mass
destruction. On May 6, 1995, I issued Executive Order 12959 (60 Fed.
Reg. 24757, May 9, 1995) to further respond to the Iranian threat to
the national security, foreign policy, and economy of the United
States. The terms of that order and an earlier order imposing an
import ban on Iranian-origin goods and services (Executive Order 12613
of October 29, 1987) were consolidated and clarified in Executive
Order 13059 of August 19, 1997.
At the time of signing Executive Order 12959, I directed the Secretary
of the Treasury to authorize through specific licensing certain
transactions, including transactions by United States persons related
to the Iran-United States Claims Tribunal in The Hague, established
pursuant to the Algiers Accords, and related to other international
obligations and U.S. Government functions, and transactions related to
the export of agricultural commodities pursuant to preexisting
contracts consistent with section 5712(c) of title 7, United States
Code. I also directed the Secretary of the Treasury, in consultation
with the Secretary of State, to consider authorizing United States
persons through specific licensing to participate in market-based
swaps of crude oil from the Caspian Sea area for Iranian crude oil in
support of energy projects in Azerbaijan, Kazakhstan, and
Turkmenistan.
Executive Order 12959 revoked sections 1 and 2 of Executive Order
12613 of October 29, 1987, and sections 1 and 2 of Executive Order
12957 of March 15, 1995, to the extent they are inconsistent with it.
A copy of Executive Order 12959 was transmitted to the Congressional
leadership by letter dated May 6, 1995.
2. On August 19, 1997, I issued Executive Order 13059 in order to
clarify the steps taken in Executive Order 12957 and Executive Order
12959, to confirm that the embargo on Iran prohibits all trade and
investment activities by United States persons, wherever located, and
to consolidate in one order the various prohibitions previously
imposed to deal with the national emergency declared on March 15,
1995. A copy of the Order was transmitted to the Speaker of the House
and the President of the Senate by letter dated August 19, 1997.
The Order prohibits (1) the importation into the United States of any
goods or services of Iranian origin or owned or controlled by the
Government of Iran except information or informational material; (2)
the exportation, reexportation, sale, or supply from the United States
or by a United States person, wherever located, of goods, technology,
or services to Iran or the Government of Iran, including knowing
transfers to a third country for direct or indirect supply,
transshipment, or reexportation to Iran or the Government of Iran, or
specifically for use in the production, commingling with, or
incorporation into goods, technology, or services to be supplied,
trans-shipped, or reexported exclusively or predominantly to Iran or
the Government of Iran; (3) knowing reexportation from a third country
to Iran or the Government of Iran of certain controlled U.S.-origin
goods, technology, or services by a person other than a United States
person; (4) the purchase, sale, transport, swap, brokerage, approval,
financing, facilitation, guarantee, or other transactions or dealings
by United States persons, wherever located, related to goods,
technology, or services for exportation, reexportation, sale or
supply, directly or indirectly, to Iran or the Government of Iran, or
to goods or services of Iranian origin or owned or controlled by the
Government of Iran; (5) new investment by United States persons in
Iran or in property or entities owned or controlled by the Government
of Iran; (6) approval, financing, facilitation, or guarantee by a
United States person of any transaction by a foreign person that a
United States person would be prohibited from performing under the
terms of the Order; and (7) any transaction that evades, avoids, or
attempts to violate a prohibition under the Order.
Executive Order 13059 became effective at 12:01 a.m., eastern daylight
time on August 20, 1997. Because the Order consolidated and clarified
the provisions of prior orders, Executive Order 12613 and paragraphs
(a), (b), (c), (d) and (f) of section 1 of Executive Order 12959 were
revoked by Executive Order 13059. The revocation of corresponding
provisions in the prior Executive orders did not affect the
applicability of those provisions, or of regulations, licenses or
other administrative actions taken pursuant to those provisions, with
respect to any transaction or violation occurring before the effective
date of Executive Order 13059. Specific licenses issued pursuant to
prior Executive orders continue in effect, unless revoked or amended
by the Secretary of the Treasury. General licenses, regulations,
orders, and directives issued pursuant to prior orders continue in
effect, except to the extent inconsistent with Executive Order 13059
or otherwise revoked or modified by the Secretary of the Treasury.
The declaration of national emergency made by Executive Order 12957,
and renewed each year since, remains in effect and is not affected by
the Order.
3. On March 4, 1998, I renewed for another year the national emergency
with respect to Iran pursuant to IEEPA. This renewal extended the
authority for the current comprehensive trade embargo against Iran in
effect since May 1995. Under these sanctions, virtually all trade with
Iran is prohibited except for trade in information and informational
materials and certain other limited exceptions.
4. There have been no amendments to the Iranian Transactions
Regulations, 31 CFR Part 560 (the "ITR"), since my report of March 16,
1998.
5. During the current 6-month period, the Department of the Treasury's
Office of Foreign Assets Control (OFAC) made numerous decisions with
respect to applications for licenses to engage in transactions under
the ITR, and issued 12 licenses.
The majority of denials were in response to requests to authorize
commercial exports to Iran -- particularly of machinery and equipment
for various industries -- and the importation of Iranian-origin goods.
The licenses that were issued authorized certain financial
transactions and transactions relating to air safety policy. Pursuant
to sections 3 and 4 of Executive Order 12959, Executive Order 13059,
and consistent with statutory restrictions concerning certain goods
and technology, including those involved in air safety cases, the
Department of the Treasury continues to consult with the Departments
of State and Commerce on these matters.
Since the issuance of Executive Order 13059, more than 1,500
transactions involving Iran initially have been "rejected" by U.S.
financial institutions under IEEPA and the ITR. United States banks
declined to process these transactions in the absence of OFAC
authorization. Twenty percent of the 1,500 transactions scrutinized by
OFAC resulted in investigations by OFAC to assure compliance with
IEEPA and ITR by United States persons.
Such investigations resulted in 15 referrals for civil penalty action,
issuance of 5 warning letters, and an additional 52 cases still under
compliance or legal review prior to final agency action.
Since my last report, OFAC has collected 20 civil monetary penalties
totaling more than $110,000 for violations of IEEPA and the ITR
related to the import or export to Iran of goods and services. Five
U.S. financial institutions, twelve companies, and three individuals
paid penalties for these prohibited transactions. Civil penalty action
is pending against another 45 United States persons for violations of
the ITR.
6. On January 22, 1997, an Iranian national resident in Oregon and a
U.S. citizen were indicted on charges related to the attempted
exportation to Iran of spare parts for gas turbines and precursor
agents utilized in the production of nerve gas. The 5-week trial of
the American citizen defendant, which began in early February 1998,
resulted in his conviction on all counts. That defendant is awaiting
sentencing. The other defendant pleaded guilty to one count of
criminal conspiracy and was sentenced to 21 months in prison.
On March 24, 1998, a Federal grand jury in Newark, New Jersey,
returned an indictment against a U.S. national and an Iranian-born
resident of Singapore for violation of IEEPA and the ITR relating to
exportation of munitions, helicopters, and weapons systems components
to Iran. Among the merchandise the defendants conspired to export were
parts for Phoenix air-to-air missiles used on F-14A fighter jets in
Iran. Trial is scheduled to begin on October 6, 1998.
The U.S. Customs Service has continued to effect numerous seizures of
Iranian-origin merchandise, primarily carpets, for violation of the
import prohibitions of the ITR. Various enforcement actions carried
over from previous reporting periods are continuing and new reports of
violations are being aggressively pursued.
7. The expenses incurred by the Federal Government in the 6-month
period from March 15 through September 14, 1998, that are directly
attributable to the exercise of powers and authorities conferred by
the declaration of a national emergency with respect to Iran are
reported to be approximately $1.7 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
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 Intelligence and Research, and the Office of the Legal
Adviser); and the Department of Commerce (the Bureau of Export
Administration and the General Counsel's Office).
8. The situation reviewed above continues to present an extraordinary
and unusual threat to the national security, foreign policy, and
economy of the United States. The declaration of the national
emergency with respect to Iran contained in Executive Order 12957 and
the comprehensive economic sanctions imposed by Executive Order 12959
underscore the Government's opposition to the actions and policies of
the Government of Iran, particularly its support of international
terrorism and its efforts to acquire weapons of mass destruction and
the means to deliver them. The Iranian Transactions Regulations issued
pursuant to Executive Orders 12957, 12959, and 13059 continue to
advance important objectives in promoting the nonproliferation and
anti-terrorism policies of the United States. I shall exercise the
powers at my disposal to deal with these problems and will report
periodically to the Congress on significant developments.
WILLIAM J. CLINTON
THE WHITE HOUSE,
September 16, 1998.
(End text)




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