January 12, 1988
Dear Mr. Speaker: (Dear Mr. President:)
1. I hereby report on developments since my last report of July 10, 1987, 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); 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 10, 1987, there have been two amendments to the Libyan Sanctions Regulations, 31 C.F.R. Part 550 (the "Regulations''), administered by the Office of Foreign Assets Control of the Department of the Treasury. These amendments, comprising sections 550.630 and 550.635 of the Regulations and published in the Federal Register at 52 FR 35548 (September 22, 1987), provide for a census of blocked assets held by U.S. persons and a census of claims of U.S. nationals against the Government of Libya and any Libyan entity. Reporting under these sections is mandatory. The submission of a report on a claim against Libya, however, does not constitute the filing with the United States Government of a formal claim for compensation, since no formal claims adjudication program currently exists. There have been no amendments or changes since July 10, 1987, to orders of the Department of Commerce or the Department of Transportation implementing aspects of Executive Order No. 12543 that relate to exports of U.S.-origin commodities and technical data and air transportation, respectively.
3. The major licensing action occurring during the past 6 months under the Regulations involved blocked assets of the Libyan Arab Foreign Bank, held by the London branch of Bankers Trust Company. The Libyan bank had sued in London for release of the funds, and the Commercial Court issued a ruling in Libyan Arab Foreign Bank v. Bankers Trust, finding no basis under British law for withholding payment of funds held in London and New York under the British deposit contract. In October, after completion of interagency consultation, the Treasury Department licensed Bankers Trust to comply with the London judgment by authorizing the release of approximately $292 million to the Libyan bank, in addition to interest for pre-sanctions breach of contract damages. This licensing action affected only the funds involved in this particular lawsuit.
Other licensing actions included extending one license authorizing a service contractor that had been operating in Libya to sell certain of its equipment in Libya to a Libyan purchaser. Three immediate family members of Libyan nationals registered their eligibility to enter into transactions related to travel to, and residence within, Libya. Two licenses were issued authorizing U.S. persons to obtain services in connection with Libyan patent, trademark, copyright, and other intellectual property protection.
4. Various enforcement actions mentioned in my last report are being pursued, and one case has been brought to trial involving prosecution of persons who allegedly exported petroleum equipment from the United States to Libya through a European conduit.
5. The expenses incurred by the Federal Government in the 6-month period from July 10, 1987, 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 $623,554. 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.
6. 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).
Note: Identical letters were sent to Jim Wright, Speaker of the House of Representatives, and George Bush, President of the Senate.