Letter to the Speaker of the House of Representatives and the President of the Senate Reporting on the Economic Sanctions Agai

Letter to the Speaker of the House of Representatives and the President of the Senate Reporting on the Economic Sanctions Against Nicaragua

November 9, 1988

Dear Mr. Speaker: (Dear Mr. President:)

I hereby report on developments since my last report of April 29, 1988, 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 U.S. 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 (FAC) of the Department of the Treasury issued the Nicaraguan Trade Control Regulations implementing the prohibitions in Executive Order No. 12513 effective May 7, 1985, 50 Fed. Reg. 19890 (May 10, 1985). The regulations were amended effective March 8, 1988, to include procedures for assessing civil monetary penalties of up to $10,000 for violations, as provided in the International Emergency Economic Powers Act, 50 U.S.C. 1705(a) (copy attached).

3. Since my report of April 29, 1988, fewer than 50 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 and animal vaccines, or extended authorizations previously given to acquire intellectual property protection under Nicaraguan law. (Donations of medicine are exempt from the prohibition on exports to Nicaragua, while commercial exports of medicine and medical supplies are authorized by general license. Donations of medical supplies, on the other hand, must be authorized by specific license.) Certain licenses authorized the exportation of equipment to La Prensa, an opposition publication that had been shut down by the Sandinista regime for a period of time and has since resumed operations. Similar licenses have also been issued for other opposition press groups. Also, supplies have been licensed for export to certain vocational schools sponsored by labor groups in Nicaragua. In addition, during August, a license was issued to the U.S. Agency for International Development for the exportation by certain U.S. private voluntary organizations and international relief organizations of humanitarian aid for medical care and other relief for children who are the victims of Nicaraguan civil strife, pursuant to Public Law No. 100 - 276.

4. Since my last report, the Department of the Treasury completed the following enforcement actions: (a) Four principals of a U.S. aircraft company pleaded guilty to charges of conspiracy to export aircraft parts to Nicaragua in a case brought in the United States District Court for the Southern District of Florida. Two of the persons were sentenced to jail terms of 15 and 13 months each, while the other two defendants received sentences of probation and performance of community service, respectively. The company was ordered to pay a $1,000 fine. (b) The Office of Foreign Assets Control imposed a civil penalty of $5,000 against a U.S. airline company for the attempted exportation of computer equipment to Nicaragua. The goods, which were valued at $6,467, were forfeited to the U.S. Customs Service.

5. The Treasury and State Departments were sued in the United States District Court for the Southern District of Texas by an organization and certain individuals seeking to donate food, medicine, clothing, vehicles, and other items to Nicaragua. Under the International Emergency Economic Powers Act, articles such as food, clothing, and medicine, intended to be used to relieve human suffering, are exempt from export prohibitions. The Government took the position that vehicles, such as passenger cars, trucks, and buses, are fit for a variety of uses and thus do not automatically fall within the exempt category for food, medicine, clothing, and other articles whose intended use is confined to the relief of human suffering. Consequently, Treasury would not permit the transfer of the vehicles to groups in Nicaragua without a specific license. The trial court rejected the Government's position and on September 29, 1988, issued a judgment declaring that the President has no authority to regulate or prohibit, directly or indirectly, donations to an embargoed country of articles that the donor intends to be used to relieve human suffering and that can reasonably be expected to serve that end. The Government is now considering an appeal to the United States Court of Appeals for the Fifth Circuit.

6. The trade sanctions complement the diplomatic and other aspects of our policy toward Nicaragua. The deteriorating economic situation in Nicaragua was one of the principal reasons for the Sandinistas' pledge to meet the democratization and national reconciliation provisions of the Guatemala Accord (also known as the Arias Peace Plan) and to sign a preliminary cease-fire agreement with the Nicaraguan Resistance on March 23. It is essential that pressure be maintained to induce the Sandinistas to undertake serious and productive dialogue concerning a permanent cease-fire with the Nicaraguan Resistance and with all democratic opposition groups concerning democratization in Nicaragua. The trade sanctions are part of a larger policy seeking a democratic outcome in Nicaragua by peaceful means.

7. The expenses incurred by the Federal Government in the period from May 1, 1988, through November 1, 1988, that are directly attributable to the exercise of powers and authorities conferred by the declaration of the Nicaraguan national emergency are estimated at $233,975, 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 FAC and the Office of the General Counsel), with expenses also incurred by the Department of State and the National Security Council staff.

8. 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).

Sincerely,

Ronald Reagan

Note: Identical letters were sent to Jim Wright, Speaker of the House of Representatives, and George Bush, President of the Senate.