July 10, 1987 To the Congress of the United States:
1. I hereby report to the Congress on developments since my last report of January 21, 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. As set forth in detail in my July 30, 1986, report, in Executive Order No. 12543, I prohibited, with effect from February 1, 1986: (1) the import into the United States from Libya, and (2) the export to Libya, of any goods or services; (3) transactions relating to transportation to or from Libya; (4) the purchase by U.S. persons of goods for export from Libya to any country; and (5) the performance by U.S. persons of any contract in support of an industrial or other commercial or governmental project in Libya. I further prohibited, with immediate effect: (6) the grant or extension of credits or loans by U.S. citizens or permanent resident aliens to Libya, or activities within Libya, other than for the purpose of: (a) effecting such persons' departure from Liyba, (b) performing acts listed in items (1) through (5) above, prior to February 1, 1986, or (c) travel for journalistic activity by professional journalists. On January 8, 1986, in Executive Order No. 12544, I augmented the transactional prohibitions contained in Executive Order No. 12543 by ordering the immediate blocking of all property and interests in property of the Government of Libya (including the Central Bank of Libya and other government-controlled entities) then or thereafter located in the United States, or then or thereafter coming within the possession or control of U.S. persons, including their overseas branches.
3. Since my January 21, 1987, report, there have been no amendments to the Libyan Sanctions Regulations, 31 C.F.R. Part 550, administered by the Office of Foreign Assets Control of the Department of the Treasury. Additionally, since January 21, 1987, 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.
4. During the current 6-month period two licenses were issued to U.S. service contractors that were operating in Libya at the time the national emergency with respect to Libya was declared. Consistent with Administration policy, these licenses authorize the companies to sell assets in Libya only to Libyan-controlled entities. The extension of credit to Libyan purchasers was authorized in connection with the sales.
5. Also during the current 6-month period, several enforcement actions have been initiated for violations of the Libyan Sanctions Regulations. (a) On March 24, 1987, a Federal grand jury in Atlanta, Georgia, returned a five-count indictment charging a U.S. citizen with violations of the International Emergency Economic Powers Act and the Libyan Sanctions Regulations. The violations charged included engaging in unlicensed transactions with respect to travel to and from Libya and activities within Libya, as well as entering into an employment contract with a Libyan oil company to provide services as a pilot in Libya. (b) Another case involving travel to and from Libya and employment within Libya as a pipeline and tank system inspector was concluded by the United States Attorney's allowing the person involved to apply for a pre-trial diversion. The person was then ordered to perform community service in lieu of facing trial. (c) Three arrests have been made in a third case where petroleum equipment was allegedly transshipped from the United States to Libya through a European conduit.
6. The General Accounting Office, at the request of the Congress, recently completed a report assessing the effectiveness of the sanctions against Libya. In gathering information for the report, the GAO spoke to relevant officials at the Departments of the Treasury, Commerce, and State. The report, based on 1986 data, concludes that the Libyan sanctions have been successful in distancing the United States from contributing directly to the Libyan economy and virtually eliminating U.S. trade with Libya. In addition, foreign subsidiaries of U.S. firms, which are not required to comply with the restrictions, have decreased their Libyan business significantly. However, the report indicates that the impact of the U.S. trade sanctions on Libya has been lessened by the extensive foreign availability of oil field equipment, services, and supplies, as well as the reluctance of third countries to adopt sanctions similar to those of the United States.
7. Litigation is pending in an English court, involving a claim by Libya against the London branch of Bankers Trust Company for failure to release to Libya blocked assets in New York and London. The United States Government is not a party to the litigation but is closely monitoring it. A trial on the merits of this case began on June 8, 1987, and is expected to continue until mid-July 1987.
8. The expenses incurred by the Federal Government in the 6-month period from January 21, 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 $646,812. 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.
9. 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).
The White House,
July 10, 1987.