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Office of the Press Secretary

For Immediate Release August 5, 1996
                          PRESS BRIEFING BY

The Briefing Room

2:35 P.M. EDT

MR. JOHNSON: Good afternoon. As all of you know I think, there's been a couple of things this morning which have focused very heavily on terrorism. And before we start the main part of the briefing with Mike today I thought it would be a good opportunity for some of you to ask some questions if you had them about some items that might be remaining from this morning.

We have with us today to answer your questions, Mark Richard, the Deputy Assistant Attorney General in the Criminal Division who would be glad to address any questions you might have about the International Crime Control Act of 1996 that the President introduced in his speech this morning. We have Phil Wilcox, the Ambassador-at-large for Counterterrorism from the State Department. He'll be glad to answer more general questions about terrorism and our work with our allies and partners abroad. And we also have Robert Kyle, the Senior Director for International Economic Policy from the NEC and NSC staffs, who would be glad to address questions you might have about the Iran and Libya Sanctions Act of 1996.

So if you would raise your hands if you have any questions about those issues.

Q What about the extent of the embargo -- does this still cover companies which make oil equipment that they sell to oil companies? Does it cover the whole oil sector or only the exportation --

MR. KYLE: The bill covers several things. First of all, with regard to Iran, the bill covers foreign companies that invest in the petroleum sector, in the development of petroleum resources in Iran in amounts over $40 million. So it would not cover those who simply sold equipment in that case.

In the case of Libya, the same type of investment in Libya would be covered. And in addition, foreign companies that violate the U.N. sanctions would be covered. Some of the U.N. sanctions prohibit trade in certain oil and gas equipment, and to that extent, companies that do that in violation of the U.N. sanctions would be covered by the bill.

Q To make it clear, a company that could invest in a plant in Libya or Iran, a plant making equipment, oil equipment, would not be subject to the embargo?

MR. KYLE: No, I do not believe they'd be covered. Companies that do have questions about their coverage can apply to the State Department for a ruling in that regard. And, of course, I'd have to know the specifics of that case and so forth.

Q A question about the International Crime Control Act of 1996 -- what's new in it? What does it specifically do that existing law does not provide for? And is this more organized-crime oriented than terrorism oriented?

MR. RICHARD: Well, it certainly has potential impact on terrorist cases, but it's much broader than just terrorism. As far as what's knew I think there is a factual handout emphasizing a variety of areas. It does, among other things, extend the jurisdiction of the FBI to address certain violent acts committed against U.S. nationals, business people abroad, involving murder, kidnapping, extortion and the like, under certain circumstances. It also affords us an opportunity to extradite people from the U.S. without an extradition treaty, but consistent with due process and the rule of law.

It has a variety of steps designed to facilitate money-laundering prosecutions in the international arena. It enables us to exclude from the U.S., from entry into the U.S. individuals who are organized crime figures. And it permits us to deny entry to people who are wanted in other countries and to return them to the country where they are wanted for prosecution. And there are many, many examples of what I would regard as new enforcement initiatives contained in this proposed bill.

Q There was no mechanism previously to deny entry to those who are trying to avoid prosecution?

MR. RICHARD: Per se, that's correct. That would not be a basis per se of exclusion. Moreover, even if they were excludable we could not return them to the country that wanted them.

Now, I would emphasize that this proposal does not in any way modify the asylum provisions or obligations under asylum conventions. But, nevertheless, it would afford us new mechanisms to, in effect, preclude the U.S. from becoming a safe haven for international organized crime figures.

Q Could you explain -- could you elaborate by which companies would be targets for sanctions under this new law?

MR. KYLE: The bill is perspective in the sense that it covers new investments or new violations of the U.N. sanctions against Libya. So it's not possible for me right now to identify which company because it's perspective.

Q You mean it would not affect Total or it would affect --

Q So, it wouldn't affect it --

MR. KYLE: It affects companies that engage in new investments. So existing investments are not covered by the sanctions under the act.

Q And where does Total S.A. rank in those categories? Is that new or is it --

MR. KYLE: Well, what Total did prior to enactment of the act presumably is an existing investment. What Total does in the future would be subject to the provisions of the act and a determination would have to be made whether it's a new investment or not.

Q So if it doesn't an existing investments doesn't that kind of defeat the purpose of the bill then? I mean, if it's going to --

MR. KYLE: First of all, there are very few foreign investments in Iran right now, but the purpose of the bill was to deny Iran and Libya new revenues that could help fund activities that we oppose. And the bill does deter new investments or new trading of the type that is prohibited by the U.N. sanctions.

Q Do you have some notion of what the economic impact would be, the potential in, say, the next few years of lost investments, revenues to these two countries?

MR. KYLE: I don't think -- it's tough to predict that because you would have to have some sense of what investments would have occurred but for this and what it will deter, and I don't think we'll know that until we see how the bill --

Q Is this considered significant or minor or --

MR. KYLE: I think there are significant provisions, but whether I can put a specific dollar value on it I think is pretty much impossible at this time.

Q I just want to go back to the point I was trying to make earlier. It may not be hugely significant, but the fact is there is a loophole there for ongoing investments. Don't you seek to try and close those at any point?

MR. KYLE: It's not a loophole. I mean, there are -- the concept of contract sanctity is a fairly established idea in U.S. law. And the idea here was to address new investments and new activities by companies that would know that this law was in effect and try to stop them.

Q Can you elaborate a little bit on the money laundering aspects of the new crime bill. They're talking about expanding the list of money laundering and predicate crimes. What does this mean? And what effectively -- what more powers does this give to the President than was not existing previously?

MR. KYLE: Well, I'm sure I can't, but I think Mark probably can.

MR. RICHARD: It affords us new opportunities. As you know, the money laundering provision contains a variety of predicate acts. It expands the range of predicate acts that would be covered, including would enable us to go by way of the money laundering statute to reach, for example, activities involving the use of explosives, offenses involving public corruption, fraud schemes directed against foreign governments and the like.

It also clarifies the obligation of why a transfer concern's to report suspicious transactions and the like, which should be very significant in terms of surfacing in this context possible ongoing money laundering schemes. So it does have a variety of money laundering direct provisions and related provisions that could enhance our ability to respond to these problems.

Q Is there anyone of a political background here who could estimate what the chances are in Congress? Is there any Republican opposition looming to this bill?

MR. RICHARD: I would say that this bill was crafted through an interagency process that began at the direction of President Clinton. If you recall, in his speech before the United Nations of October of '95 I think it was, he directed the Department of Justice to commence an interagency process to explore possible gaps in responding to the problem of international organized crime, and this is the product, if you will, of that interagency process.

Q Just to make sure I'm clear, this law, this new law doesn't affect any existing contracts?

MR. KYLE: It doesn't. It affects only new investments in Iran and Libya. So existing contracts are not covered by the new law.

Q Are you aware of any activity that was being -- that was on the horizon?

MR. KYLE: I don't know of activity, necessarily, on the horizon, and obviously that company would probably take into account this legislation as it's trying to figure out whether to make the new investment or not. Remember, these are large investments. I mean, we're talking about over $40 million or so.

Q Why did you set it at $40 million?

MR. KYLE: So that there would -- basically any normal-sized investment in petroleum development in either of these countries would tend to exceed $40 million. So, though it's large, it would tend to capture most of the investments that are made. But we did want to make sure that we didn't cover de minimis exceptions, and that level has been in there since the beginning in the Senate bill.

Q Isn't it possible that, theoretically, you could, depending upon how this act is implemented, the President could choose a couple of the, I guess, six possible sanctions that might have no conceivable effect on the target company? Let's say this company never participated in Ex-Im Bank loans, never bid for U.S. government contracts -- the President could choose those two sanctions and it would have no conceivable effect.

MR. KYLE: Well, the President has to choose among, in effect, seven sanctions in the bill, frankly. And obviously, the sanctions -- what the question is referring to is that the sanctions may apply to some companies, may not apply to other companies. Obviously, if we have a situation where a company is violating the bill, we're going to look to see what effect it has on the company and seek to choose the route that has the most effect in stopping the activity we want to deter.

So there's flexibility for the President to choose among the sanctions. On the other hand, we have to assume a situation where we're opposed to the activity that the company's undertaken.

THE PRESS: Thank you.

END 2:40 P.M. EDT