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

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

I hereby report to the Congress on the developments since my last report of January 10, 1992, concerning the national emergency with respect to Libya that was declared in Executive Order No. 12543 of January 7, 1986. This report is submitted pursuant to section 401(c) of the National Emergencies Act, 50 U.S.C. 1641(c); section 204(c) of the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. 1703(c); and section 505(c) of the International Security and Development Cooperation Act of 1985, 22 U.S.C. 2349aa - 9(c).

1. Since my last report on January 10, 1992, the Libyan Sanctions Regulations (the "Regulations"), 31 C.F.R. Part 550, administered by the Office of Foreign Assets Control ("FAC") of the Department of the Treasury, have been amended. One amendment, published on January 14, 1992, 57 Fed. Reg. 1386, at 1389, amended the provisions of the Regulations relating to licensing and availability of information to reflect the closing of the Federal Reserve Bank of New York's Foreign Assets Control Division. A second amendment, published on March 30, 1992, 57 Fed. Reg. 10798, added the names of 46 companies to Appendix A of the Regulations, which contains a list of organizations determined to be within the definition of the term "Government of Libya" (Specially Designated Nationals of Libya).

2. During the current 6-month period, FAC made numerous decisions with respect to applications for licenses to engage in transactions under the Regulations, issuing nine new licenses. Three of the licenses authorize travel to Libya to discuss possible legal representation of the two indicated suspects in the bombing of Pan Am Flight 103. The remaining licenses authorize the correction of certain errors made by banks resulting in mistaken credits to blocked accounts. All of the licenses concern minor transactions of little or no economic benefit to Libya.

3. Various enforcement actions mentioned in previous reports continue to be pursued, and several new investigations of possibly significant violations of the Libyan sanctions were initiated. During the current reporting period, substantial monetary penalties were assessed against U.S. firms for engaging in prohibited transactions with Libya. In March 1992, FAC announced the collection of almost $550,000 in civil penalties from six companies for violations of U.S. sanctions against Libya, including almost $350,000 from two "Yugoslav" entities with offices in the United States.

Due to aggressive enforcement efforts and increased public awareness, FAC has received numerous voluntary disclosures from U.S. firms concerning their sanctions violations. Many of these reports continue to be triggered by the periodic amendments to the Regulations listing additional organizations and individuals determined to be Specially Designated Nationals ("SDNs") of Libya. For purposes of the Regulations, all dealings with the organizations and individuals listed will be considered dealings with the Government of Libya. All unlicensed transactions with these persons, or in property in which they have an interest, are prohibited. The listing of Libyan SDNs is not a static list and will be augmented from time to time as additional organizations or individuals owned or controlled by, or acting on behalf of, the Government of Libya are identified.

In March 1992, FAC announced a new law enforcement initiative, Operation Roadblock, which targets U.S. travellers who violate the U.S. sanctions on Libya. Under this initiative, warning letters and requests for information are being sent to persons believed to have travelled to and worked in Libya, or made travel-related payments to Libya in violation of U.S. law. The investigation of suspected violations is being undertaken by FAC, assisted by an interagency task force including the Departments of State and Justice, the Treasury Department's Financial Crimes Enforcement Network (FinCEN), the Federal Bureau of Investigation, and the U.S. Customs Service.

4. The expenses incurred by the Federal Government in the 6-month period from December 15, 1991, through June 14, 1992, that are directly attributable to the exercise of powers and authorities conferred by the declaration of the Libyan national emergency are estimated at $590,000. Personnel costs were largely centered in the Department of the Treasury (particularly in the Office of Foreign Assets Control, the Office of the General Counsel, and the U.S. Customs Service), the Department of State, and the Department of Commerce.

5. The policies and actions of the Government of Libya continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. I shall continue to exercise the powers at my disposal to apply economic sanctions against Libya fully and effectively, as long as those measures are appropriate, and will continue to report periodically to the Congress on significant developments as required by law.

Sincerely,

George Bush