[Public Papers of the Presidents of the United States: William J. Clinton (1998, Book I)]
[February 3, 1998]
[Pages 167-170]
[From the U.S. Government Publishing Office www.gpo.gov]
Message to the Congress Reporting on the National Emergency With Respect
to Iraq
February 3, 1998
To the Congress of the United States:
I hereby report to the Congress on the developments since my last
report of July 31, 1997, concerning the national emergency with respect
to Iraq that was declared in Executive Order 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 (IEEPA), 50 U.S.C. 1703(c).
Executive Order 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 United States 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. United States persons were 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 12724, which was issued in order to align the sanctions
imposed by the United States with United Nations Security Council
Resolution (UNSCR) 661 of August 6, 1990.
This report discusses only matters concerning the national emergency
with respect to Iraq that was declared in Executive Order 12722 and
matters relating to Executive Orders 12724 and 12817 (the ``Executive
Orders''). The report covers events from August 2, 1997, through
February 1, 1998.
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 every 90 days for a total of 180 days under U.N. supervision in
order to finance the purchase of food, medicine, and other humanitarian
supplies. 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. On August 8, 1996, the UNSC committee
established pursuant to UNSCR 661 (``the 661 Committee'') adopted
procedures to be employed by the 661 Committee in implementation of
UNSCR 986. On December 9, 1996, the President of the Security Council
received the report prepared by the Secretary General as requested by
paragraph 13 of UNSCR 986, making UNSCR 986 effective as of 12:01 a.m.
December 10, 1996.
On June 4, 1997, the U.N. Security Council adopted UNSCR 1111,
renewing for another 180 days the authorization for Iraqi petroleum
sales and purchases of humanitarian aid contained in UNSCR 986 of April
14, 1995. The Resolution became effective on June 8, 1997. On September
12, 1997, the Security Council, noting Iraq's decision not to export
petroleum and petroleum products pursuant to UNSCR 1111 during the
period June 8 to August 13,
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1997, and deeply concerned about the resulting humanitarian consequences
for the Iraqi people, adopted UNSCR 1129. This resolution replaced the
two 90-day quotas with one 120-day quota and one 60-day quota in order
to enable Iraq to export its full $2 billion quota of oil within the
original 180 days of UNSCR 1111. On December 4, 1997, the U.N. Security
Council adopted UNSCR 1143, renewing for another 180 days, beginning
December 5, 1997, the authorization for Iraqi petroleum sales and
humanitarian aid purchases contained in UNSCR 986. As of January 2,
1998, however, Iraq still had not exported any petroleum under UNSCR
1143. During the reporting period, imports into the United States under
this program totaled about 14.2 million barrels, bringing total imports
since December 10, 1996, to approximately 23.7 million barrels.
2. There have been two amendments to the Iraqi Sanctions
Regulations, 31 C.F.R. Part 575 (the ``ISR'' or the ``Regulations'')
administered by the Office of Foreign Assets Control (OFAC) of the
Department of the Treasury during the reporting period. The Regulations
were amended on August 25, 1997. General reporting, recordkeeping,
licensing, and other procedural regulations were moved from the
Regulations to a separate part (31 C.F.R. Part 501) dealing solely with
such procedural matters (62 Fed. Reg. 45098, August 25, 1997). A copy of
the amendment is attached.
On December 30, 1997, the Regulations were amended to remove from
appendices A and B to 31 C.F.R. chapter V the name of an individual who
had been determined previously to act for or on behalf of, or to be
owned or controlled by, the Government of Iraq (62 Fed. Reg. 67729,
December 30, 1997). A copy of the amendment is attached.
As previously reported, the Regulations were amended on December 10,
1996, to provide a statement of licensing policy regarding specific
licensing of United States persons seeking to purchase Iraqi-origin
petroleum and petroleum products from Iraq (61 Fed. Reg. 65312, December
11, 1996). Statements of licensing policy were also provided regarding
sales of essential parts and equipment for the Kirkuk-Yumurtalik
pipeline system, and sales of humanitarian goods to Iraq, pursuant to
United Nations approval. A general license was also added to authorize
dealings in Iraqi-origin petroleum and petroleum products that have been
exported from Iraq with United Nations and United States Government
approval.
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 661 Committee and
satisfaction of other conditions established by the United Nations, 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.
On July 15, 1995, a jury in the Eastern District of New York
returned a verdict of not guilty for two defendants charged with the
attempted exportation and transshipment to Iraq of zirconium ingots in
violation of IEEPA and the ISR. The two were charged in a Federal
indictment on July 10, 1995, along with another defendant who entered a
guilty plea on February 6, 1997.
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.
Since my last report, OFAC collected civil monetary penalties
totaling more than $1.125 million for violations of IEEPA and the ISR
relating to the sale and shipment of goods to the Government of Iraq and
an entity in Iraq. Additional administrative proceedings have been
initiated and others await commencement.
4. The Office of Foreign Assets Control has issued hundreds of
licensing determinations regarding transactions pertaining to Iraq or
Iraqi assets since August 1990. Specific 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
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purposes, sales of humanitarian supplies to Iraq under UNSCR 986 and
1111, diplomatic transactions, 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, 88 specific licenses have been issued,
most with respect to sales of humanitarian goods.
Since December 10, 1996, OFAC has issued specific licenses
authorizing commercial sales of humanitarian goods funded by Iraqi oil
sales pursuant to UNSCR 986 and 1111 valued at more than $239 million.
Of that amount, approximately $222 million represents sales of basic
foodstuffs, $7.9 million for medicines and medical supplies, $8.2
million for water testing and treatment equipment, and nearly $700,000
to fund a variety of United Nations activities in Iraq. International
humanitarian relief in Iraq is coordinated under the direction of the
United Nations Office of the Humanitarian Coordinator of Iraq. Assisting
U.N. agencies include the World Food Program, the U.N. Population Fund,
the U.N. Food and Agriculture Organization, the World Health
Organization, and UNICEF. As of January 8, 1998, OFAC had authorized
sales valued at more than $165.8 million worth of humanitarian goods
during the reporting period beginning August 2, 1997.
5. The expenses incurred by the Federal Government in the 6-month
period from August 2, 1997, through February 1, 1998, 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 $1.2 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 Bureau of
Intelligence and Research, the U.S. Mission to the United Nations, and
the Office of the Legal Adviser), and the Department of Transportation
(particularly the U.S. Coast Guard).
6. 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 relevant United Nations
Security Council resolutions. Iraqi compliance with these resolutions is
necessary before the United States will consider lifting economic
sanctions. 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. Seven and a half 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 to provide immediate, unconditional, and
unrestricted access to sites by these inspectors; 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 all forms of political
expression, oppression of minorities, and denial of humanitarian
assistance. The Government of Iraq has repeatedly said it will not
comply with UNSCR 688 of April 5, 1991. The Iraqi military routinely
harasses residents of the north, and has attempted to ``Arabize'' the
Kurdish, Turkomen, 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.
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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 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.
William J. Clinton
The White House,
February 3, 1998.
Note: This message was released by the Office of the Press Secretary on
February 4.