July 8, 1988
To the Congress of the United States:
1. I hereby report to the Congress on developments since my last report of January 12, 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); 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 January 12, 1988, 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 have been amended twice (attached). The first set of amendments to the Regulations, published in the Federal Register at 53 FR 5571 (February 25, 1988), affect sections 550.304 and 550.406. Section 550.304 was modified to correct an inadvertent deletion from the definition section. It now states that the Secretary of the Treasury may designate any person or organization to be included in the definition of ``Government of Libya,'' and that a juridical person will not be included within the definition solely because it is located or organized or has its principal place of business in Libya. Section 550.406 was modified to conform to the interpretation of the Office of Foreign Assets Control that the prohibition on dealing in property in which the Government of Libya has an interest applies to any transaction by U.S. persons worldwide. These transactions include purchasing, selling, or acting as a broker for the sale of Libyan crude oil.
The second set of amendments, published in the Federal Register at 53 FR 7355 (March 8, 1988) add prepenalty and penalty procedures to the Regulations at sections 550.703 - 550.706. These new sections describe procedures that, consistent with section 206(a) of the International Emergency Economic Powers Act, 50 U.S.C. 1705(a), provide for the imposition of civil monetary penalties for violations of the Regulations as a means of insuring compliance.
There have been no amendments or changes since January 12, 1988, 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. Licensing actions occurring during the past 6 months included reinstituting reporting requirements for U.S. oil companies holding suspense agreements with Libya. In addition, two immediate family members of Libyan nationals registered their eligibility to enter into transactions related to residence within Libya. Two licenses were extended that authorize U.S. persons to obtain services in connection with Libyan patent, trademark, copyright, and other intellectual property protection.
4. Various enforcement actions mentioned in previous reports continue to be pursued. In January 1988, two individuals were convicted and fined for exporting petrochemical goods and equipment to Libya. Other suspected violations of the Regulations are presently the subject of ongoing investigations.
5. Litigation is 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 the three cases, but is closely monitoring the proceedings. Hearings on a Libyan request for summary judgment in the first of these cases are scheduled to take place on July 12, 1988.
6. On April 12, 1988, the United States Court of Appeals for the District of Columbia Circuit entered a per curiam order affirming the opinion of the District Court finding in favor of the United States in the case of Louis Farrakhan, et al. v. Reagan, et al. In that action, plaintiffs unsuccessfully challenged aspects of the Libyan Sanctions Regulations on grounds that they impermissibly infringed First Amendment rights of the plaintiffs.
7. The expenses incurred by the Federal Government in the 6-month period from January 12, 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 $681,419. 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.
8. 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).
Ronald Reagan
The White House,
July 8, 1988.