I hereby report to the Congress on developments since the
last Presidential report of November 14, 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) (Ieepa).
This report covers events through March 31, 1997. My last
report, dated November 14, 1996, covered events through
September 16, 1996.
1. The Iranian Assets Control Regulations, 31 Cfr
Part 535 (Iacr), were amended on October 21, 1996 (61 Fed.
Reg. 54936, October 23, 1996), to implement section 4 of
the Federal Civil Penalties Inflation Adjustment Act of
1990, as amended by the Debt Collection Improvement Act
of 1996, by adjusting for inflation the amount of the civil
monetary penalties that may be assessed under the Regulations.
The amendment increases the maximum civil monetary penalty
provided in the Regulations from $10,000 to $11,000 per
violation.
The amended Regulations also reflect an amendment to
18 U.S.C. 1001 contained in section 330016(1)(L) of Public
Law 103-322, September 13, 1994, 108 Stat. 2147. Finally,
the amendment notes the availability of higher criminal fines
for violations of Ieepa pursuant to the formulas set forth
in 18 U.S.C. 3571. 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 eight awards. This brings the total
number of awards rendered to 579, the majority of which have
been in favor of U.S. claimants. As of March 24, 1997, the
value of awards to successful U.S. claimants from the Security
Account held by the Nv Settlement Bank was $2,424,959,689.37.
Since my last report, Iran has failed to replenish the
Security Account established by the Algiers Accords to ensure
payment of awards to successful U.S. claimants. Thus, since
November 5, 1992, the Security Account has continuously remained
below the $500 million balance required by the Algiers Accords.
As of March 24, 1997, the total amount in the Security Account
was $183,818,133.20, and the total amount in the Interest
Account was $12,053,880.39. Therefore, the United States
continues to pursue Case A/28, filed in September 1993, to
require Iran to meet its obligation under the Algiers Accords
to replenish the Security Account. Iran filed its Rejoinder
on April 8, 1997.
The United States also continues to pursue Case A/29 to
require Iran to meets its obligation of timely payment of its
equal share of advances for Tribunal expenses when directed to
do so by the Tribunal. The United States filed its Reply to
the Iranian Statement of Defense on October 11, 1996.
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Also since my last report, the United States appointed
Richard Mosk as one of the three U.S. arbitrators on the
Tribunal. Judge Mosk, who has previously served on the
Tribunal and will be joining the Tribunal officially in
May of this year, will replace Judge Richard Allison, who
has served on the Tribunal since 1988.
3. The Department of State continues to pursue 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.
On December 3, 1996, the Tribunal issued its award
in Case B/36, the U.S. claim for amounts due from Iran under
two World War Ii military surplus property sales agreements.
While the Tribunal dismissed the U.S. claim as to one of the
agreements on jurisdictional grounds, it found Iran liable for
breach of the second (and larger) agreement and ordered Iran
to pay the United States principal and interest in the amount
of $43,843,826.89. Following payment of the award, Iran
requested the Tribunal to reconsider both the merits of the
case and the calculation of interest; Iran's request was
denied by the Tribunal on March 17, 1997.
Under the February 22, 1996, agreement that settled the
Iran Air case before the International Court of Justice and
Iran's bank-related claims against the United States before
the Tribunal (reported in my report of May 17, 1996), the
United States agreed to make ex gratia payments to the families
of Iranian victims of the 1988 Iran Air 655 shootdown and a fund
was established to pay Iranian bank debt owed to U.S. nationals.
As of March 17, 1997, payments were authorized to be made to
surviving family members of 125 Iranian victims of the aerial
incident, totaling $29,100,000.00. In addition, payment of
28 claims by U.S. nationals against Iranian banks, totaling
$9,002,738.45 was authorized.
On December 12, 1996, the Department of State filed
the U.S. Hearing Memorial and Evidence on Liability in
Case A/11. In this case, Iran alleges that the United States
failed to perform its obligations under Paragraphs 12-14 of
the Algiers Accords, relating to the return to Iran of assets
of the late Shah and his close relatives. A hearing date has
yet to be scheduled.
On October 9, 1996, the Tribunal dismissed Case B/58,
Iran's claim for damages arising out of the U.S. operation of
Iran's southern railways during the Second World War. The
Tribunal held that it lacked jurisdiction over the claim under
Article Ii, paragraph two, of the Claims Settlement Declaration.
4. Since my last report, the Tribunal conducted two
hearings and issued awards in six private claims. On
February 24-25, 1997, Chamber One held a hearing in a dual
national claim, G.E. Davidson v. The Islamic Republic of Iran,
Claim No. 457. The claimant is requesting compensation for real
property that he claims was expropriated by the Government of
Iran. On October 24, 1996, Chamber Two held a hearing in
Case 274, Monemi v. The Islamic Republic of Iran, also
concerning the claim of a dual national.
On December 2, 1996, Chamber Three issued a decision in
Johangir & Jila Mohtadi v. The Islamic Republic of Iran (Awd
573-271-3), awarding the claimants $510,000 plus interest for
Iran's interference with the claimants' property rights in real
property in Velenjak. The claimants also were awarded $15,000
in costs. On December 10, 1996, Chamber Three issued a decision
in Reza Nemazee v. The Islamic Republic of Iran (Awd 575-4-3),
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dismissing the expropriation claim for lack of proof. On
February 25, 1997, Chamber Three issued a decision in Dadras
Int'l v. The Islamic Republic of Iran (Awd 578-214-3),
dismissing the claim against Kan Residential Corp. for failure
to prove that it is an "agency, instrumentality, or entity
controlled by the Government of Iran" and dismissing the claim
against Iran for failure to prove expropriation or other
measures affecting property rights. Dadras had previously
received a substantial recovery pursuant to a partial award.
On March 26, 1997, Chamber Two issued a final award in Case 389,
Westinghouse Electric Corp. v. The Islamic Republic of Iran Air
Force (Awd 579-389-2), awarding Westinghouse $2,553,930.25 plus
interest in damages arising from the Iranian Air Force's breach
of contract with Westinghouse.
Finally, there were two settlements of claims of dual
nationals, which resulted in awards on agreed terms. They
are Dora Elghanayan, et al. v. The Islamic Republic of Iran
(Aat 576-800/801/802/803/804-3), in which Iran agreed to pay
the claimants $3,150,000, and Lilly Mythra Fallah Lawrence v.
The Islamic Republic of Iran (Aat 577-390/391-1), in which Iran
agreed to pay the claimant $1,000,000.
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.
William J. Clinton
The White House,
May 13, 1997.