Message to the Congress
Reporting on the Continuation of the National Emergency With Respect to Iran
November 20, 1987
the Congress of the United States:
report is made pursuant to section 204(c) of the International Emergency
Economic Powers Act, 50 U.S.C. 1703(c), and, as with previous reports,
discusses only matters concerning the national emergency with respect to Iran
that was declared in Executive Order No. 12170 of November 14, 1979. This
report covers events through October 15, 1987, including those that
occurred since my last report on June 16, 1987.
The Iran-United States Claims Tribunal (the ``Tribunal''), established at The Hague pursuant to the Claims
Settlement Agreement of January 19, 1981 (the ``Algiers
Accords''), continues to make progress in arbitrating the claims before it.
Since my last report, the Tribunal has rendered 14 awards, for a total of 318
awards. Of that total, 237 have been awards in favor of American claimants; 142
of these were awards on agreed terms, authorizing and approving payment of
settlements negotiated by the parties, and 95 were decisions adjudicated on the
merits. The Tribunal has dismissed a total of 21 other claims on the merits and
44 for jurisdictional reasons. Of the 16 remaining awards, one represented a
withdrawal and 15 were in favor of the Iranian claimant. As of October
total payments to successful American claimants from the Security Account held
by the NV Settlement Bank stood at approximately $983 million.
date, the Security Account has fallen below the required balance of $500
million seven times. Each time, Iran has replenished the
account, as required by the Algiers Accords, by transferring funds from the
separate account held by the NV Settlement Bank in which interest on the
Security Account is deposited. Iran has also replenished
the account once when it was not required by the Accords, for a total of eight
replenishments. The most recent replenishment occurred on October
in the amount of $170,000, bringing the total in the Security Account to
$500,000,000.00. The aggregate amount that has been transferred is
approximately $483 million.
claims between the two governments based on contracts, the Tribunal to date has
made four awards in favor of the United States and four in favor of Iran. The Tribunal has
dismissed two claims that had been filed by the United States and dismissed 11 claims
that had been filed by Iran. In addition, Iran has withdrawn 13 of its
government-to-government claims, while the United States has withdrawn three.
July, the Government of Iran appointed Mr. Assadollah
Nouri to replace Dr. Mohsen
Mostafavi as the Iranian arbitrator in Chamber One.
As stated in my last report, the Tribunal continues to make progress in the
arbitration of claims of U.S. nationals for $250,000
or more. Over 60 percent of the non-bank claims have now been disposed of
through adjudication, settlement, or voluntary withdrawal, leaving 207 such
claims on the docket. The largest of the large claims, whose progress has been
slowed by their complexity, are finally being decided, sometimes with huge
damage awards to the U.S. claimant. In one recent
decision, a U.S. company received an award
for $117 million, while another U.S. company was awarded $58
million. The Tribunal rendered interlocutory decisions on legal issues in two
large oil company claims, finding liability on the part of Iran in both instances.
These decisions pave the way for determinations of damages and an ultimate
resolution of these cases.
The Tribunal also continues to process claims of U.S. nationals against Iran of less than $250,000
each. As of October 15, 1987, a total of 139 small
claims have been resolved, 12 of them since my last report, as a result of
decisions on the merits, awards on agreed terms, or Tribunal orders. Two
contested claims were decided in awards issued by the Tribunal since my
previous report, raising the total number of contested claims decided to 13,
eight favoring the American claimant. These decisions will help in establishing
guidelines for the adjudication or settlement of similar small claims. To date,
American claimants have also received 20 awards on agreed terms reflecting settlement
of claims under $250,000.
my last report, the three Tribunal Chambers have selected 65 claims for active
arbitration, bringing the total number of small claims currently under active
Tribunal consideration to 206. The Tribunal has held hearings in two of these
claims since my last report, and the Department of State has filed additional
pleadings in 45 such claims.
The Department of State continues to coordinate efforts of concerned
governmental agencies in presenting U.S. claims against Iran, as well as the
response of the United States Government to claims brought against it by Iran. Since my last report,
the Department has filed six pleadings in government-to-government claims based
on contracts for the provision of goods and services. Two such claims have been
settled, so 35 government-to-government claims remain pending.
my last report, the Tribunal has held two hearings on government-to-government
contract claims. On October 5 - 8, 1987, it heard Iran's claim against the United States for allegedly defective
helicopters sold to Iran under the Foreign
Military Sales program. On November 4 - 5, a hearing was held on Iran's claim for the return
of military property held by the United States Government.
Tribunal has recently issued opinions in two claims brought by Iran concerning the
interpretation and/or performance of various provisions of the Algiers Accords.
On May 4, 1987, the Tribunal denied Iran's request to find the United States responsible for the
payment of Tribunal awards in favor of Iran against nationals of
the United States. On September
the Tribunal issued a decision holding that it has the authority, inherent in
the Algiers Accords, to award interest as compensation for damages suffered.
This was the position advocated by the United States. The Tribunal further
stated that each of its three chambers may decide in each case whether interest
should be awarded and how it should be calculated.
Since my last report, two bank syndicates have been paid a total of $989,751.88
for interest accruing for the period January 1 - 18, 1981 (``January
Interest''), on the basis of settlements reached with Bank Markazi
Jomhouri Islami Iran
(``Bank Markazi,'' Iran's central bank). These
payments were made from Dollar Account No. 2 at the Bank of England.
Settlements have been signed between Bank Markazi and
three other bank syndicates for the payment of $691,912.40 from Dollar Account
No. 2. Apparently there are certain other settlements awaiting Bank Markazi's approval.
Since my last report, there have been no amendments to the Iranian Assets
Control Regulations, 31 C.F.R. Part 535, administered by the Office of Foreign
Assets Control at the Treasury Department.
The situation reviewed above continues to implicate important diplomatic,
financial, and legal interests of the United States and its nationals and
presents an unusual challenge to the national security and foreign policy of
the United States. In particular, the
Iranian Assets Control Regulations issued pursuant to Executive Order No. 12170
continue to play an important role in structuring our relationship with Iran and in enabling the United States properly to implement
the Algiers Accords. I shall continue to exercise the powers at my disposal to
deal with these problems and will continue to report periodically to the
Congress on significant developments.
November 20, 1987.