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Letter to Congressional Leaders Reporting on the National Emergency With Respect to Iran

November 14, 1996

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

I hereby report to the Congress on developments since the last Presidential report of May 16, 1996, concerning the national emergency with respect to Iran that was declared in Executive Order 12170 of November 14, 1979. This report is submitted pursuant to section 204(c) of the International Emergency Economic Powers Act, 50 U.S.C. 1703(c). This report covers events through September 16, 1996. My last report, dated May 16, 1996, covered events through March 1, 1996.

1. The Iranian Assets Control Regulations, 31 CFR Part 535 (IACR), were amended on August 22, 1996, to add the Antiterrorism and Effective Death Penalty Act of 1996 (Public Law 104- 132; 110 Stat. 1214-1319 (the "Antiterrorism Act") as an authority for the Regulations (61 Fed. Reg. 43460, August 23, 1996). On April 24, 1996, I signed into law the Antiterrorism Act. Section 321 of the Antiterrorism Act (18 U.S.C. 2332d) makes it a criminal offense for United States persons, except as provided in regulations issued by the Secretary of the Treasury in consultation with the Secretary of State, to engage in a financial transaction with the governments of countries designated under section 6(j) of the Export Administration Act (50 U.S.C. App. 2405) as supporting international terrorism. United States persons who engage in such transactions shall be fined under title 18, United States Code, or imprisoned for up to 10 years, or both. Because the IACR already prohibited such transactions with minor exceptions found to be in the public interest, no substantive change to the prohibitions of the IACR was necessary. A copy of the amendment is attached.

2. The Iran-United States Claims Tribunal (the "Tribunal"), established at The Hague pursuant to the Algiers Accords, continues to make progress in arbitrating the claims before it. Since the period covered in my last report, the Tribunal has rendered additional awards, in which the claims of dual nationals were dismissed for lack of jurisdiction. This brings the total number of awards rendered to 571, the majority of which have been in favor of U.S. claimants. As of September 16, 1996, the value of awards to successful U.S. claimants from the Security Account held by the NV Settlement Bank was $2,376,010,041.91.

On July 24, 1996, Iran directed the transfer of $37,700,000 to the Security Account, established by the Algiers Accords to ensure payment of awards to successful U.S. claimants, from the Interest Account. However, the Security Account has remained continuously below the $500 million balance required by the Algiers Accords since November 12, 1992. As of September 23, 1996, the total amount in the Security Account was $233,070,127.71, and the total amount in the Interest Account was $5,494,387.30.

Therefore, the United States continues to pursue Case A/28, filed in September 1993, to require Iran to meet its obligations under the Algiers Accords to replenish the Security Account. Iran filed its Statement of Defense in that case on August 30, 1995, and the United States filed a Reply on December 4, 1995. Iran is scheduled to file its Rejoinder on December 4, 1996.

The United States also continues to pursue Case A/29, filed in July 1994, to require Iran to meet its obligations under the Algiers Accords to pay its equal share of advances for Tribunal expenses when directed to do so by the Tribunal. Iran filed its Statement of Defense on July 5, 1996. The United States filed its Reply on October 11, 1996.

3. The Department of State continues to present other United States Government claims against Iran and to respond to claims brought against the United States by Iran, in coordination with concerned government agencies.

In May 1996, the United States filed comments in response to a Tribunal inquiry whether experts meetings could facilitate the resolution of the United States Request to Dismiss Certain Claims from Case B/61, filed in August 1995 as part of the United States consolidated submission on the merits of that case. The United States stated that experts meetings were inadvisable. Case B/61 involves a claim by Iran for compensation with respect to primarily military equipment that Iran had sought to purchase or have repaired under commercial contracts with more than 50 private American companies, but that Iran alleges it did not receive. Iran alleges that it suffered direct losses and consequential damages in excess of $2 billion because of the United States Government refusal to allow the export of the equipment after January 19, 1981, in alleged contravention of the Algiers Accords. Iran's rebuttal of the United States consolidated submission in Case B/61 is due December 9, 1996.

On May 6, 1996, in connection with Cases A/4, A/7, and A/15 (I: F and III), Iran requested that the Tribunal order the United States to terminate its leases of two former diplomatic properties of Iran to its current tenants. The United States responded by submitting comments to the Tribunal on May 31, 1996. The Tribunal has not yet issued a decision on Iran's request. A hearing of these cases has remained postponed by the parties' mutual agreement and under Tribunal order since October 11, 1994.

On May 10, 1996, Iran made a request for interim measures in Cases A/15(IV) and A/24, brought against the United States for its alleged failure to terminate litigation in U.S. courts in violation of the Algiers Accords. Iran requested that the Tribunal order the United States to stay the McKesson-OPIC litigation against Iran in U.S. district court. On June 20, 1996, after briefing by both parties, the Tribunal denied Iran's request for interim measures. The parties await the Tribunal's award on the merits of the cases, which were heard more than a year ago before the Full Tribunal.

On June 27, 1996, in connection with Case B/1, the United States renewed a request for a Tribunal order directing Iran to produce seized United States Government documents and suspending the proceedings until Iran complies with the order. In this renewal of the pending request, the United States identified nine exhibits recently submitted to the Tribunal by Iran that appeared to have been seized from U.S. facilities in Iran.

The United States pointed out to the Tribunal that Iran had previously informed the Tribunal on several occasions that the Iranian government does not possess any of the documents that were once stored in the U.S. facilities in Iran. Iran submitted a response to the Tribunal on September 5, 1995, asserting that the documents were handed over to Iranian representatives in the normal course of the Foreign Military sales program operations.

In August 1996, Iran filed a Statement of Claim in a new case, number A/30, alleging that the United States has violated paragraphs 1 and 10 of the General Declaration of the Algiers Accords. Iran bases its claim, inter alia, on press statements about an alleged covert action program aimed at Iran and U.S. economic sanctions, including the Iran-Libya Sanctions Act of 1996. The United States is currently preparing its Statement of Defense in response to Iran's claim.

In Case A/11, Iran alleges that the United States violated the Algiers Accords by failing to assist Iran in obtaining the return of the Shah's assets. The Department of State is currently in the process of preparing the United States Hearing Memorial, which is due to be filed on December 13, 1996.

Under the procedures established by the settlement reached February 22, 1996, on which I reported previously, the United States has begun to pay ex gratia amounts to the survivors of Iranian victims of the July 3, 1988, shootdown of Iran Air 655. As of the closing day for this report, 34 beneficiaries representing 12 of the deceased passengers had received payments totaling $2,850,000.00. Under the terms of the settlement, no money will be paid to the Government of Iran.

4. Since my last report, the Tribunal conducted hearings in two cases involving U.S. nationals, considered dual U.S.-Iranian nationals by the Tribunal. On May 16, 1996, Chamber Three held a one-day hearing in Claim No. 266, Aryeh v. The Islamic Republic of Iran, which involves the alleged expropriation by Iran of claimant's property in Iran. On June 12-14, 1996, Chamber Two held a hearing in Claim No. 953, Hakim v. The Islamic Republic of Iran, another claim for the expropriation of property in Iran.

In August 1996, the United States submitted a brief on behalf of private dual national claimants in a proceeding before Chamber One of the Tribunal. The United States argued that the Tribunal erred in a previous decision when it denied a dual national's claim on the ground that the claimant had acquired his property in his capacity as an Iranian national. The brief takes issue with the rationale of the Tribunal's decision and urges the Tribunal not to extend this approach to the other pending dual national cases.

5. The situation reviewed above continues to implicate important diplomatic, financial, and legal interests of the United States and its nationals and presents an unusual challenge to the national security and foreign policy of the United States. The Iranian Assets Control Regulations issued pursuant to Executive Order 12170 continue to play an important role in structuring our relationship with Iran and in enabling the United States to implement properly the Algiers Accords. I shall continue to exercise the powers at my disposal to deal with these problems and will continue to report periodically to the Congress on significant developments.



NOTE: Identical letters were sent to Newt Gingrich, Speaker of the House of Representatives, and Albert Gore, Jr., President of the Senate. This letter was released by the Office of the Press Secretary on November 15.

William J. Clinton, Letter to Congressional Leaders Reporting on the National Emergency With Respect to Iran Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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