January 11, 1989
Dear Mr. Speaker: (Dear Mr. President:)
1. I hereby report to the Congress on developments since my last report of July 8, 1988, 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, 50 U.S.C. 1703(c) (``IEEPA''); and section 505(c) of the International Security and Development Cooperation Act of 1985, 22 U.S.C. 2349aa - 9(c).
2. Since my last report on July 8, 1988, there have been no amendments to the Libyan Sanctions Regulations, 31 C.F.R. Part 550 (the ``Regulations''), administered by the Office of Foreign Assets Control (``the Office'') of the Department of the Treasury. Additionally, since July 8, 1988, there have been no amendments or changes to orders of the Department of Commerce or the Department of Transportation implementing aspects of Executive Order No. 12543 relating to exports from the United States and air transportation, respectively.
3. During the current 6-month period, the Office has issued licenses to individuals and corporations to permit them to engage in activities that would otherwise be prohibited by the Regulations. Under the Office's licensing procedures, 12 individuals registered to remain in Libya with Libyan immediate family members. Four licenses were extended authorizing transactions in connection with U.S. persons' filings or renewals of Libyan patents, copyrights, and trademarks. The Office also issued licenses to Bankers Trust Company, Manufacturers Hanover Trust Company, and the Bank of America authorizing the debiting of certain Libyan accounts held by their London branches. Finally, the Office licensed a service contractor that had been operating in Libya prior to the imposition of the Libyan sanctions to sell certain of its equipment in Libya to a Libyan purchaser.
4. Various enforcement actions mentioned in previous reports continue to be pursued. In June 1988, the U.S. Customs Service seized a shipment of canned tuna valued at $430,600 for an attempted transshipment to Libya through the United States from Mexico. In July 1988, a U.S. national, facing criminal charges for repeated visits to Libya to work in the oil industry, paid a $5,000 civil penalty and signed a consent agreement that he would refrain from travel to Libya. This marked the first instance of an independent civil penalty being imposed under the Regulations.
During October and November 1988, six Libyan nationals pleaded guilty to counts of conspiring to violate IEEPA based on a scheme to divert funds intended for a Libyan student organization into intelligence-gathering activities and anti-American demonstrations and conferences. One of the Libyan nationals also pleaded guilty to a substantive violation of IEEPA.
The latter defendant received a sentence of 5 years' imprisonment and a separate suspended sentence with 10 years' parole, while the other coconspirators received suspended sentences and deportation orders. A total of $600,300 in fines was paid in this enforcement action.
5. In October 1988, the United States Court of Appeals for the Federal Circuit affirmed a Claims Court order dismissing an action by five American petroleum engineers. The Court found that the imposition of the Libyan sanctions was not a taking of the engineers' employment contracts with a Libyan oil company and did not violate the Fifth Amendment to the United States Constitution. Chang v. United States, No. 88 - 1120 (Oct. 13, 1988), aff'g13 Cl. Ct. 555 (1987).
Three cases are pending in an English court, involving claims by Libya seeking the release of funds blocked in the London branches of Bankers Trust Company and Manufacturers Hanover Trust Company. The United States Government is not a party to these cases, but is closely monitoring the proceedings. Hearings in one of these cases are scheduled to commerce on January 16, 1989.
6. The expenses incurred by the Federal Government in the 6-month period from July 8, 1988, through the present time that are directly attributable to the exercise of powers and authorities conferred by the declaration of the Libyan national emergency are estimated at $461,745. Personnel costs were largely centered in the Department of the Treasury (particularly in the Office of Foreign Assets Control, the Customs Service, the Office of the Assistant Secretary for Enforcement, the Office of the Assistant Secretary for International Affairs, and the Office of the General Counsel), the Department of State, the Department of Commerce, the Department of Justice, the Federal Reserve Board, and the National Security Council.
7. 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 as long as these measures are appropriate and will continue to report periodically to the Congress on significant developments, pursuant to 50 U.S.C. 1703(c).
Sincerely,
Ronald Reagan
Note: Identical letters were sent to Jim Wright, Speaker of the House of Representatives, and George Bush, President of the Senate.