October 30, 1987

To the Congress of the United States:

I hereby report to the Congress on developments since my last report of May 1, 1987, concerning the national emergency with respect to Nicaragua that was declared in Executive Order No. 12513 of May 1, 1985. In that Order, I prohibited: (1) all imports into the United States of goods and services of Nicaraguan origin; (2) all exports from the United States of goods to or destined for Nicaragua except those destined for the organized democratic resistance; (3) Nicaraguan air carriers from engaging in air transportation to or from points in the United States; and (4) vessels of Nicaraguan registry from entering United States ports.

1. The declaration of emergency was made pursuant to the authority vested in me as President by the Constitution and laws of the United States, including the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq., and the National Emergencies Act, 50 U.S.C. 1601 et seq. This report is submitted pursuant to 50 U.S.C. 1641(c) and 1703(c).

2. The Office of Foreign Assets Control of the Department of the Treasury issued the Nicaraguan Trade Control Regulations implementing the prohibitions in Executive Order No. 12513 on May 8, 1985, 50 Fed. Reg. 19890 (May 10, 1985). There have been no changes in those regulations in the past 6 months. On March 11, 1987, a decision by the United States District Court for the District of Massachusetts upholding the exercise of emergency powers in the Nicaraguan context was affirmed by the United States Court of Appeals for the First Circuit in Beacon Products Corp. v. Reagan.

3. Since my report of May 1, 1987, fewer than 30 applications for licenses have been received with respect to Nicaragua, and the majority of these applications have been granted. Of the licenses issued in this period, most either authorized exports for humanitarian purposes, covering medical supplies, food, and animal vaccines, or extended authorizations previously given to acquire intellectual property protection under Nicaraguan law.

4. The trade sanctions complement the diplomatic and other aspects of our policy toward Nicaragua. They exert additional pressure intended to induce the Sandinistas to undertake serious dialogue with representatives of all elements of the Nicaraguan democratic resistance and to respond favorably to the many opportunities available for achieving a negotiated settlement of the conflict in Central America. The trade sanctions are part of a larger policy seeking a democratic outcome in Nicaragua by peaceful means.

5. The expenses incurred by the Federal Government in the period from May 1, 1987, through October 31, 1987, that are directly attributable to the exercise of powers and authorities conferred by the declaration of the Nicaraguan national emergency are estimated at approximately $167,800, all of which represents wage and salary costs for Federal personnel. Personnel costs were largely centered in the Department of the Treasury (particularly in the Customs Service, as well as in the Office of Foreign Assets Control, the Office of the Assistant Secretary for Enforcement, and the Office of the General Counsel), with expenses also incurred by the Department of State and the National Security Council.

6. The policies and actions of the Government of Nicaragua 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 Nicaragua as long as these measures are appropriate and will continue to report periodically to the Congress on expenses and significant developments pursuant to 50 U.S.C. 1641(c) and 1703(c).

Ronald Reagan

The White House,

October 30, 1987.