In order to understand why sanctions were initially imposed uniformly against all the republics in the former Federal Socialist Republic of Yugoslavia, but subsequently were concentrated on Serbia and Montenegro and on Serb-controlled areas in Croatia and Bosnia-Herzegovina, a little historical background is necessary.

Tito’s Yugoslavia emerged after World War II as a federation comprising six republics: Bosnia-Herzegovina, Croatia, Macedonia, Montenegro, Serbia, and Slovenia, with large highly concentrated enclaves of Serbs within Croatia and Bosnia. In 1991, Croatian Serbs constituted 12 per cent of the population of Croatia and Bosnian Serbs 31 per cent of the population of Bosnia. (In addition, 17 percent of Bosnia’s population was Croat.) Establishing the borders of these republics with such disregard for ethnic lines was not accidental, but a deliberate decision by Tito, who was part Croat and part Slovene, to avoid undue dominance of the federation by Serbia. Unfortunately, this would have disastrous consequences and lead to bitter fighting, and atrocities such as "ethnic cleansing" against helpless civilians when these republics declared their independence after Tito’s death and the end of the strategic threat posed by the Soviet Union.

Following collapse of the Yugoslav Communist party in 1990, the movement toward independence gathered momentum in the two richest and predominantly Catholic republics of Slovenia and Croatia, both urging a reorganization of Yugoslavia into a looser confederation of sovereign republics. Serbia opposed this change because it might disfranchise the Serb minorities residing in other republics and expose them to persecution; they warned that any breakup of Yugoslavia would entail a reconfiguration of the internal borders of the republics along ethnic lines. Under Tito, each republic had maintained an extensive militia, trained and equipped to carry out sustained guerrilla warfare in the event the Yugoslav federal army was overwhelmed during an invasion by the Soviet Union and its Warsaw Pact allies.

In June of 1991, notwithstanding Serbia’s objections, Slovenia and Croatia unilaterally declared their independence, and fighting began, first in Slovenia between Slovenian militia and the Serb dominated Yugoslav federal army, then in Croatia between Croatian militia and Croatian Serb paramilitary groups supported by the Yugoslav Federal Army. Serbia’s concern for the well being and safety of Croatian Serbs in the event Croatia became independent was not entirely unfounded, given the experience during World War II when fascist Croats joined Hitler’s occupation forces to massacre a large number of the Serbian minority in Croatia. It should be noted that because Serbia used the Yugoslav Federal Government and the Federal Army as proxies, the fighting in Slovenia and Croatia could be viewed as solely intended "to preserve the union," a purely domestic matter, not unlike the U.S. Civil War, in which other nations and the United Nations should not interfere.

In Slovenia, where few Serbs resided (no ethnic minority exceeded 3 percent of the population), a month after the fighting broke out a cease fire was signed with the federal government, through the mediating efforts of the European Community ("EC"). The Yugoslav army eventually departed from Slovenia, as if tacitly acknowledging that the Slovenes had a right to self-determination within their borders. However, in Croatia, where the significant Serbian minority was highly concentrated in certain provinces, the notion of independence without reconfiguration to make these enclaves a part of Serbia, or at least autonomous from Croatia, was unacceptable to Serbia and to the Serb-dominated Yugoslav army. Although the EC mediated a cease fire on June 28, 1991 and sent monitors to Croatia with the consent of the Yugoslav federal Government to observe compliance by the warring parties, fighting persisted in Croatia.

In an attempt to pressure the parties to comply with the cease fire, on July 5 the foreign ministers of the EC decided to impose an arms embargo on Yugoslavia and to freeze all EC financial aid. Acting unilaterally 2 months before the EC, the United States had suspended OPIC insurance of U.S. investments in Serbia in May, pursuant to the human rights provisions in the Foreign Assistance Act of 1961, as amended. On July 11 the Bush administration endorsed the EC arms embargo and suspended all U.S. sales and transfers of any arms and defense articles to Yugoslavia. The EC considered sending peacekeeping forces to Yugoslavia to assist in compliance with the cease fire, but when it was unable to reach a consensus, largely due to objections of the United Kingdom, several of its members, particularly France and Austria, urged the United Nations to become involved.

Despite the provision in Article 2, paragraph 7 of the Charter, which prohibits the United Nations from intervening in matters essentially within the domestic jurisdiction of any State, on September 25, 1991, the Council issued Resolution 713, which imposed a mandatory arms embargo under Chapter VII against the Yugoslav Federal Government and all six republics of Yugoslavia, expressing its concern that "the continuation of this situation constitutes a threat to international peace and security."¹ According to the press, in order to obtain the support of non-aligned members of the Council "the resolution was modified extensively to reflect the idea that the United Nations is dealing with an international crisis and not interfering in a family feud."²

It should be noted that the prohibition under Article of the Charter 2, paragraph 7 of the Charter, against U.N. intervention in essentially domestic matters does not apply to enforcement actions under Chapter VII, and that the Federal Government of Yugoslavia had consented to the arms embargo, despite not having requested the Council to impose it. In any event, the Council’s jurisdiction was not questioned. The United States having already substantially imposed an arms embargo in July, Council Resolution 713 merely provided President Bush with additional legal support.³

In 1991, the risk of an invasion by the Soviet Union and its Warsaw Pact allies was no longer a concern, and the Federal Government of Yugoslavia was in the process of stripping the republican militias of their heavy weapons. In Croatia and Bosnia-Herzegovina this process had been almost completed when the fighting began. Accordingly, although the arms embargo was applied uniformly on all the warring factions in Yugoslavia, it was having a very uneven impact, providing an unfair advantage to the Yugoslav Federal Army and its Serbian paramilitary allies in Croatia and later in Bosnia-Herzegovina. Neither of these Serbina militaries needed to procure foreign weapons or equipment because they had access to Yugoslav federal military stockpiles and to most of the defense plants producing armaments in Yugoslavia. This may explain why the Serbian-dominated federal government consented to the arms embargo, and why it failed to deter Serb attacks in Croatia and later in Bosnia-Herzegovina.

At the beginning of September 1991, the EC foreign ministers convened a peace conference at The Hague to seek an overall political resolution of the crisis in Yugoslavia. On October 18 the EC proposed the "Carrington Plan," named after Lord Carrington, former Secretary General of NATO and U.K. foreign minister, who chaired this conference. The plan contemplated a loose confederation of sovereign republics cooperating on trade, fiscal, and security matters, which would be patterned after the EC. There would be no change in the existing internal borders between republics but minorities within these borders would be granted a second nationality, their own schools, and their own legislatures. This plan was initially accepted by all the republics except Serbia (and the leadership of the Yugoslav Federal Army). Unfortunately, the EC’s inflexible insistence on sanctity of the "internal borders" of the six republics would prove the major stumbling block to reaching any agreement with Serbia.

On November 8, in an effort to bring about compliance with the cease fire in Croatia, the EC imposed trade sanctions on all parts of Yugoslavia and unsuccessfully urged the United Nations to impose an oil embargo. On November 9, during a press conference in The Hague, President Bush announced that the United States would also impose some trade sanctions comparable to the EC sanctions. When asked by a reporter whether these would be any more effective than those imposed against Iraq, he replied quite candidly, "Well, I’m not sure how effective sanctions by themselves will be. The decision to take the sanctions was to strongly back the efforts of the EC. As I mentioned, they are not complete yet. We are going to go to the United Nations to try to strengthen the concept of an oil embargo. But I don’t think anybody can predict with any accuracy that sanctions alone will solve the problems in Yugoslavia, in Haiti, or in Iraq, or in other places" [emphasis added].⁴

Despite the fact that all the warring factions in Croatia shared some blame for breaches of the cease fire, the EC concluded that Serbia and Montenegro were the aggressors and chiefly responsible for the continuing violence. Accordingly, on December 2 it lifted its trade sanctions and restored economic aid to all the republics except those two. On January 10, 1992, the EC lifted its trade sanctions against Montenegro, thereby leaving only Serbia subject to these. This was perceived as unfair discrimination by the Serbs and only deepened their distrust of the EC.

Although the U.S. trade sanctions announced by President Bush were not issued until December 6, 1991, these were not limited to Serbia and Montenegro, but were directed against all six Yugoslav republics. However, instead of declaring a national emergency under the NEA and imposing a comprehensive economic and trade embargo under the IEEPA, the President merely exercised his discretion under various and sundry trade-related statutory provisions and imposed several relatively mild trade sanctions, suspending duty-free treatment for Yugoslav imports under the Generalized System of Preferences (GSP), U.S. aid programs under the Support for East European Democracy Act, and imports of Yugoslav textiles and textile products under the bilateral textile agreement with Yugoslavia, which allowed entry of limited quantities of Yugoslav textile products for sale in the U.S. market.⁵ (These U.S. trade sanctions remained applicable to all six Yugoslav republics until after April 7, 1992, when the United States recognized the independence of Bosnia-Herzegovina, Croatia, and Slovenia. Following such recognition, the United States began to lift some of these trade sanctions against these three republics and Macedonia).

As time passed, and 1991 was about to end without Serbian acceptance of the Carrington plan, the EC gave up all hope of preserving Yugoslavia as a confederation. Accordingly, in December, yielding to pressures from Germany, which was anxious to recognize the independence of Slovenia and Croatia, the EC foreign ministers adopted a new plan under which all six republics could apply to the EC for recognition of their independence. However, such recognition would be granted only to those "good" republics that met certain criteria, including a commitment to protect the rights of minorities and to renounce the use of force as a means of changing existing internal borders. In short, this new plan, like the Carrington plan, sought to end the fighting through an overall political solution. Whereas Lord Carrington would have kept the six republics under a common umbrella, the EC had since become resigned to preside over the dissolution of Yugoslavia and to discriminate between "the good" and "the bad." Once again, EC insistence on preserving existing internal borders would doom any chance of success.

On December 15, 1991, the Council issued Resolution 724, establishing a Sanctions Committee that was initially charged with monitoring compliance with the arms embargo imposed under Resolution 713.⁶ Without any U.N. enforcement resources, this Committee had to depend on national governments and customs agencies to enforce the embargo and to report violations. On December 19, the Serb enclaves in Croatia proclaimed their independence as "The Serbian Republic of Krajina," and 3 months later, the Serb minorities in Bosnia did the same, proclaiming themselves "The Serbian Republic of Bosnia-Herzegovina." Under the new EC plan, the independence of Slovenia and Croatia was recognized by the EC in January 1992, despite some doubt over the sincerity of Croatia’s commitment to respect minorities and existing internal borders.⁷ Bosnia-Herzegovina, with its large Serb and Croat minorities, was already torn by violence before it received EC recognition as an independent republic in April 1992.⁸

Fighting in Bosnia-Herzegovina had erupted in March among Muslims, Croats, and Serbs immediately following the outcome of an EC sponsored referendum in which 99 percent of those Bosnians voting had opted for independence, a misleading vote. Although it reflected the views of the overwhelming majority of the Bosnian Muslims and Croats, it did not reflect the strong opposition of 31 percent of the population in Bosnia, because the Bosnian Serbs had boycotted the referendum. Accordingly, when the EC recognized Bosnia’s independence in conformity with the referendum, it did so on the mistaken belief that it might ease the violence. In fact, it had the opposite effect, increasing the determination of the Bosnian Serbs to purge all Muslims from their self-proclaimed Serbian Republic of Bosnia-Herzegovina.

The two republics of Serbia and Montenegro were interdependent, because the latter was too small to be economically able to survive alone, and it was needed by land-locked Serbia for access to the sea. Accordingly, Serbia and Montenegro opted to join together as the self proclaimed "Federal Republic of Yugoslavia," claiming to be the only legitimate successor to the former Socialist Federal Republic of Yugoslavia, a claim which has since been consistently rejected by the world community.⁹ Although the new Federal Republic of Yugoslavia elected a figure head President, the real ruler remained the President of Serbia, Slobodan Milosevic.

Finally, Macedonia’s recognition as an independent nation was deferred until 1993 because of objections from Greece, which claimed that recognizing the independence of a nation which called itself Macedonia would be tantamount to recognizing that it had rights over the adjoining Greek province bearing the same name. Absurd as it may seem, Greek objections over Macedonia’s name, its flag (the 16-point Vergina Star allegedly implied claims over Greek territory), and its constitution risked engulfing Albania, Bulgaria, Greece, and Turkey into a full fledged regional war. The crisis was finally defused and conflict averted when Macedonia provided appropriate assurances by amending its constitution and agreed to change its name to "The Former Yugoslav Republic of Macedonia," thereby demonstrating that a rose under another name definitely can smell sweeter. Normal relations between Greece and Macedonia were not restored until 1995, when Macedonia removed the Vergina Star from its flag and Greece lifted its embargo.¹⁰

While fighting in Croatia subsided following acceptance by the parties of a U.N. peacekeeping plan and dispatch of a contingent of U.N. peacekeepers, it intensified in Bosnia-Herzegovina following the EC’s recognition in April 1992 of that republic’s independence. On May 20, 1992, in retaliation for a Serb attack 2 days earlier on a Red Cross convoy carrying humanitarian supplies to civilians besieged in Sarajevo, the United States suspended landing rights for Yugoslavia’s national airline, JAT, thereby terminating the only direct air service between the United States and Yugoslavia.¹¹

On May 30, 1992, after vain efforts by the EC and the United Nations to get the parties to cease fighting, the Council determined that the situation in Bosnia-Herzegovina constituted a threat to international peace and security and issued Resolution 757. In the preamble to this Resolution the Council noted that "the borders of Bosnia and Herzegovina are inviolable" and that "all parties bear some responsibility for the situation," but it condemned the authorities in the Federal Republic of Yugoslavia (Serbia and Montenegro), including the federal Yugoslav army, for their failure to comply with the cease-fire. Acting under Chapter VII, it banned all flights to and from Serbia and Montenegro and imposed broad economic sanctions against these two republics, blocking their assets and prohibiting imports and exports of all commodities and products, except for supplies intended strictly for medical purposes and foodstuffs approved by the Sanctions Committee.¹²

Although this embargo purported to be sweeping, it provided a big loophole by allowing temporary entry into Serbia and Montenegro, for transshipment purposes, of commodities and products not originating in these republics. Once these had entered Serbia and Montenegro, it was difficult to verify that these did not remain there. Conversely, forged certificates of origin made it difficult to ensure that commodities and products exiting Serbia and Montenegro had not originated there.

Since Croatia and Bosnia-Herzegovina had just been recognized as independent nations, the conflict had become internationalized and there was no longer much concern by the nonaligned nations that the Council was intervening in matters within the domestic jurisdiction of Yugoslavia. On the same day that the Council issued Resolution 757, although not purporting to act pursuant thereto, President Bush issued Executive Order 12808, finally exercising his authority under the NEA and IEEPA to declare a national emergency caused by the policies of the Federal Republic of Yugoslavia (Serbia and Montenegro) against Croatia and Bosnia-Herzegovina. This order did not block property or assets of private parties but only those directly or indirectly owned or controlled by the federal government of Yugoslavia, by the governments of Serbia and Montenegro, or by entities related to these governments.¹³

In reporting this emergency to the Congress, President Bush blamed Serbia and Montenegro for "their involvement in and support for groups attempting to seize territory in Croatia and Bosnia-Herzegovina by force and violence, utilizing in part the forces of the so-called Yugoslav National Army."¹⁴ At a White House press Conference on June 4 a reporter noted that the sanctions against Serbia were not working and asked the President whether the United States would lead an international coalition to drive Serb forces out of Bosnia. The President noted that the economic sanctions had been in effect only a few days and that he was not prepared to say these would not work.¹⁵ The following day he issued Executive Order 12810 to conform U.S. sanctions to those mandated by the Council under Resolution 757.¹⁶ Under this order, imports and exports of goods and services, as well as all air traffic between the United States and these two republics were prohibited. However, the order contained the same loophole as the U.N. embargo by allowing products and commodities to be temporarily entered in Serbia and Montenegro for transshipment.¹⁷

On June 18, concerned with the urgent need to deliver humanitarian assistance to all victims of the conflict, the Council issued Resolution 760 to allow the sale and supply to the Federal Republic of Yugoslavia (Serbia and Montenegro) of those commodities and products for essential humanitarian need approved by the Sanctions Committee under a simplified and accelerated procedure. In effect, it expanded the humanitarian exception to the embargo to allow entry of other items besides medicines and foodstuffs.¹⁸ On July 20, 1992, the OFAC published a list of entities it had identified as owned or controlled by the government of the Federal Republic of Yugoslavia (Serbia and Montenegro) and whose assets were therefore blocked under E.O. 12808 and 12810.¹⁹ OFAC included on this list some U.S. and foreign companies doing business in the United States, under the presumption that under a socialist regime all companies located or organized in the Federal Republic of Yugoslavia and all their foreign branches and subsidiaries were controlled by the Yugoslav Government. The legal soundness of this presumption was challenged in the U.S. federal courts after OFAC blocked the assets of the U.S. subsidiary of a Serbian company and impounded in U.S. ports

five vessels managed by the Maltese subsidiary of a Montenegrin ocean shipping line. The issue before the courts was not whether these assets and vessels were indirectly owned or controlled by the Serbian and Montenegrin companies, but whether these companies were private entities or, as contended by OFAC, whether under the Yugoslav socialist economic system these should be presumed to be controlled indirectly by the Yugoslav Government. Both cases lingered for several years in the federal courts until these were finally resolved in favor of the United States, long after OFAC’s presumption became irrelevant under subsequent Executive Orders blocking assets owned or controlled by any entity located or organized in the Federal Republic of Yugoslavia, including vessels, irrespective of the flag under which they sailed.²⁰

The Council had not authorized a naval blockade to enforce compliance with the arms embargo it imposed under Resolution 713 or with the economic embargo under Resolution 757. The Council of Foreign Ministers of the Western European Union (WEU) meeting in Helsinki on July 10, decided that WEU would assemble a squadron of at least five or six ships to monitor, but not to enforce, compliance with these U.N. embargoes in international waters. On that same day, President Bush, who was also in Helsinki, was asked whether the United States would participate in this monitoring exercise. The President noted that the United States had two naval task forces operating in the Mediterranean and that "there is no change, and no decisions have been made about further deployments of naval forces."²¹ However, U.S. participation was assured when on July 15, NATO announced that it would also undertake its own naval monitoring operations in coordination with, but independently from, the WEU.

Accordingly, on July 16, two international squadrons, each numbering approximately six ships supported by aircraft, began to patrol their respective areas: the WEU patrol, codenamed "Sharp Vigilance," operated in the Strait of Otranto, while the NATO patrol (which included a U.S. Navy ship) was code named "Maritime Monitor" and operated in international waters off the coast of Montenegro. It was reported by the press that this was by no means a blockade, because both squadrons were under orders not to intercept any suspicious ships, but merely to observe them and to report their movements to the U.N. Sanctions Committee.²²

Coincidentally, each squadron was under the command of an Italian admiral: the WEU squadron, because Italy then held the rotational presidency and was asked by WEU to coordinate its maritime contingency force; the NATO squadron, because NATO’s Standing Naval Force Mediterranean was under integrated Italian command. Although for political reasons these two squadrons were supposed to be operating independently, common sense generally prevailed at the operational level, both squadrons eventually utilizing the same NATO standard communications systems and procedures, and coordinating their activities through NATO headquarters in Naples.²³

WEU and NATO had different capabilities. The WEU, more recently established, still lacked an integrated command structure. Because all the nations that are members of WEU are also members of NATO (although France and Spain were outside NATO’s integrated command structure), the decision by WEU members whether to assign ships to the WEU or to the NATO squadron was entirely political. This odd duplication of monitoring responsibilities by two regional security organizations with overlapping membership was not so much because of institutional jealousy between WEU and NATO, as it was because of differences between France and the United Kingdom on how much Europe should rely on the United States to safeguard future European security interests. Now that the Cold War was over, France believed that it was time to bolster the role of WEU, an organization consisting entirely of European nations, over a NATO largely dominated by the United States. Conversely, the United Kingdom still believed that NATO and full participation by the United States therein was essential to Europe’s future security. These two divergent views could be accommodated by having both organizations play a role in monitoring the U.N. embargoes.

The complex geopolitical situation made it extremely difficult for the embargo to impact effectively on those who were chiefly responsible for the violence. Most other nations were not as stringent as the United States in blocking Serbian assets under their jurisdiction, and only prohibited transfers to Serbia and Montenegro, allowing these assets to be transferred at will between third countries. Russia, in particular, had close historic ties with the Serbs, their fellow Slavs, and was most reluctant to agree to any Council action which was directed solely against Serbia. Although Serbia and Montenegro were supposed to be the targets of all-encompassing sanctions, the embargo was in fact extremely porous and did not even apply to the Serb pockets located in Croatia and Bosnia-Herzegovina. Moreover, this embargo was having, in some instances, an even more detrimental impact on adjoining countries than on the two targeted republics.

In early August, Greece closed its border with Macedonia, in effect imposing a total unilateral embargo against this land-locked republic. Denied trade with Serbia by the U.N. embargo, Macedonia had become completely dependent on Greece for most of its inbound and outbound trade. Greece now ceased to supply any oil to Macedonia, while it allegedly continued to ship oil to Serbia and Montenegro in violation of the U.N. embargo. In addition to Macedonia, the bordering countries of Romania, Bulgaria, Albania, Hungary, and the Czech and Slovak Republics had lost a primary market with the dissolution of Yugoslavia and were suffering serious economic hardship from loss of trade due to the U.N. embargo, as were Russia and the Ukraine, which had historically used the Danube as their trade route to Serbia. There was no serious effort by the Sanctions Committee established by the Council to address the issue of providing compensation to those nations under Article 50 of the Charter or to monitor implementation of the sanctions.²⁴

On August 3 the President of Bosnia-Herzegovina requested the Council to exempt his government from the arms embargo to allow it to procure the arms needed to "achieve the right of individual and collective self defence" expressly recognized under Article 51 of the Charter.²⁵ This request fell on deaf ears, with little support outside the United States and Islamic nations.

At the end of August, following the International Conference on the Former Yugoslavia (London Conference), widespread violations of the trade embargo against Serbia and Montenegro led the Conference on Security and Cooperation in Europe (CSCE) to establish sanction assistance missions (SAMs) in Hungary, Romania, Bulgaria, and Macedonia, where these operated jointly with the EC sanctions monitoring missions. All these nations shared land borders with the two republics and lacked the systems, procedures, facilities, and equipment required to effectively enforce the sanctions. In each of these border nations the SAM consisted of European, United States, and Canadian customs officials, led by a representative of one of the participating CSCE countries and supported by a small staff. Each SAM filed reports and documentation relating to suspected violations to the SAM Communications Center in Brussels which, in turn, forwarded these to the relevant national authorities for investigation. However, no SAMs were sent to observe the borders with Croatia and Bosnia-Herzegovina, which remained an uncontrolled invitation to circumvent the embargo.

Pursuant to a report from the Secretary General of the United Nations, the Council issued Resolution 769 on August 7, 1992, which authorized enlargement of the mandate and strengthened U.N. peacekeeping forces (UNPROFOR) protecting the Serb ethnic enclaves in Croatia (UNPAs) to carry out several additional responsibilities, including enforcement of the trade embargo against Serbia and Montenegro at entry points where the UNPAs adjoined the border with Hungary and Serbia. However, the enforcement of trade sanctions by UNPROFOR at what had become international borders adjoining UNPAs was not achieved.²⁶ In addition to violations at the land border crossings, violations of the embargo occurred through the Montenegrin ports on the Adriatic, and through ship and barge traffic on the Danube. This major international waterway, which enters Serbia from Hungary, constitutes a part of the border between Serbia and Romania and then the entire border between Romania and Bulgaria until it empties into the Black Sea.

On November 16 the Council issued Resolution 787, authorizing the use of force to ensure strict compliance with the naval interdiction of Serbia and Montenegro on the Adriatic and calling upon States "acting nationally or though regional agencies or arrangements, to use such measures commensurate with the specific circumstances as may be necessary under the authority of the Security Council to halt all inward and outward maritime shipping in order to inspect and verify their cargoes and destinations." Similarly, the Resolution authorized the use of force to ensure compliance with the blockade on the Danube.

Although the Resolution did not entirely eliminate the exception for transshipments, it did prohibit the transshipment through Serbia and Montenegro of all strategic commodities such as oil, natural gas, metals, tires, and vehicles, unless specially authorized case-by-case by the Sanctions Committee.²⁷

As a show of support for the Muslim-led government of Bosnia-Herzegovina, several Islamic nations sought to have the Council include a provision in Resolution 787, exempting that government from the arms embargo, but this proposal was defeated after one of the U.N. mediators, Cyrus Vance, told the Council, "It taxes credulity to suggest that lifting the arms embargo for only one party is either feasible or desirable."²⁸

The following week, in order to implement the new blockading authority provided under Resolution 787, WEU and NATO adopted rules of engagement for their respective squadrons similar to those used in enforcing the embargo against Iraq. Under these rules, WEU and NATO squadrons were authorized to halt all inward and outward maritime shipping, and to board and inspect vessels suspected of violating the embargo, firing shots across the bow when necessary to encourage these to stop. Enforcement on the Danube was to be carried out by the nations through which it flows, particularly Romania and Bulgaria.²⁹

To mark this evolution from monitoring to enforcement, WEU adopted the new code name, Sharp Fence for its operation, and NATO’s operation became Maritime Guard. In December

1992 the Albanian Government authorized the NATO squadron to patrol its territorial waters, and coordination with the WEU squadron had become sufficiently perfected for the two squadrons to exchange patrol areas. (Six months later, WEU and NATO merged their enforcement activities into a single operation codenamed Sharp Guard).

The Federal Republic of Yugoslavia possessed limited naval capabilities but still had a sufficient number of missiles, surface vessels, and submarines to present a potential threat to the WEU and NATO squadrons, should they decide to challenge the latter’s blockade operations in the Adriatic.³⁰ Accordingly, U.S. participation in this maritime enforcement program presented some risk of involving U.S. naval forces in hostilities. ³¹ Nevertheless, it does not appear that President Bush considered that the consultation requirements of the War Powers Resolution applied to these operations. In fact, the first report to Congress under the War Powers Resolution was not made until April 1993, when President Clinton reported that NATO aircraft, including U.S. aircraft, had begun flying over Bosnia-Herzegovina to enforce a ban on military flights imposed by the Council.³²

During the 1992 Presidential campaign, candidate Clinton had criticized the Bush administration for not taking more forceful actions against the Serbs. On January 15, 1993, as one of his last official acts, President Bush issued Executive Order 12831, which expanded U.S. sanctions and implemented the changes mandated 2 months earlier by the Council in Resolution 787. Under this order, the exception for transshipments provided under E.O. 12810 was revoked, and persons or entities subject to U.S. jurisdiction were henceforth prohibited from any participation in transshipments through the Federal Republic of Yugoslavia (Serbia and Montenegro); any vessel controlled by persons or entities in the Federal Republic of Yugoslavia was henceforth expressly deemed to be controlled by their Government, thereby ending the likelihood of a legal challenge if, in the future, OFAC impounded a vessel controlled by Serbian or Montenegrin private shipping interests; and finally, the Secretary of the Treasury was authorized to apply the U.S. sanctions to any area in the former Socialist Republic of Yugoslavia (i.e., the large areas of Croatia and Bosnia-Herzegovina occupied by Serbs) where there was no adequate assurance that there would not be diversion to the Federal Republic of Yugoslavia.³³

On January 26 the press reported that U.N. sanctions in Yugoslavia were still being widely circumvented, citing arms from Iran transshipped through Croatia to support the Muslim Government in Bosnia, and petroleum products shipped to Montenegro by sea, or to Serbia through the Danube. One of the more egregious violations of the embargo involved Serbian convoys of tanker barges loaded with petroleum products that continued to sail defiantly from the Black Sea up the Danube to Serbia. These convoys simply ignored any requests to stop by the Bulgarian and Rumanian authorities, threatening to set their cargo on fire, blocking the channel, and causing an ecological disaster, if any force were used to stop them.³⁴

Immediately upon taking office, President Clinton directed his foreign policy advisors to consider options and to recommend measures to resolve the crisis in Bosnia-Herzegovina. The Clinton administration was aware that U.S. public opinion opposed direct military intervention against the Serbs, which was favored by the Europeans, but that there was some support in Congress for supplying arms and training to the Bosnian Muslim forces. On February 10, 1993 Secretary of State Warren Christopher announced the new administration’s "six point" peace initiative for Bosnia-Herzegovina. Two of these consisted of amending the U.N. arms embargo to allow the United States and other nations to supply arms and training to the Bosnian Government forces and implementing stronger enforcement of the sanctions against Serbia and Montenegro.

The first of these two initiatives was opposed by all EC member nations (except Germany, which had no forces deployed on the ground) because they were concerned that it might subject peacekeeping forces to retaliation by Serbian forces and might prolong hostilities. Despite this opposition, President Clinton continued to advocate arming the Bosnian Muslims until the end of June 1993, when an attempt by the United States and the non-aligned nations to have the Council lift the embargo was put to a vote and defeated by the European members and Russia. Following this vote, U.S. efforts to have the Council lift the embargo were temporarily held in abeyance.

The Clinton administration had more success in obtaining international agreement for its second initiative, which urged more effective enforcement of the sanctions imposed by the Council. At a meeting on April 5, WEU decided to participate in police and customs operations in Bulgaria, Hungary, and Rumania pursuant to special bilateral agreements with each of these countries, in order to tighten the embargo on the Danube. The United States allocated $1.45 million for equipment and technical assistance related to enforcement of the U.N. sanctions, including expanding the number of SAM observers stationed in the border States, supplying specially designed customs boats for patrolling the Danube, strengthening the NATO/WEU fleet in the Adriatic, and establishing international links to track transactions by Serbian-controlled entities.

On April 17, 1993, the Council issued Resolution 820 calling on the Bosnian Serbs to cease their military attacks and sign on to the "Vance-Owen" peace plan for Bosnia-Herzegovina by April 26. This plan sought to preserve Bosnia-Herzegovina as a single nation divided into 10 ethnically based provinces. Failing Serb agreement to the plan, Resolution 820 called upon all member States to tighten the embargo against the Federal Republic of Yugoslavia and the Serb-occupied areas in Bosnia-Herzegovina and Croatia; prohibited all transshipments through Yugoslav territory unless expressly authorized by the Sanctions Committee; and directed the States to block all assets owned or controlled by Yugoslav entities, including vessels, land transports, and aircraft. This Resolution focused particularly on the enforcement of the embargo, expressly authorizing the seizure and confiscation of vessels and cargo found to have violated the embargo; it also prohibited use of the Danube for any transshipments through the Federal Republic of Yugoslavia, unless expressly authorized by the Sanctions Committee, coupled with effective monitoring of the vessel during its transit through Yugoslav territory. Moreover, any vessel registered or controlled by a Yugoslav entity, or any vessel suspected of having violated the embargo, was prohibited from passing through installations of the member States, including river locks or canals.³⁵

Delaying the entry into effect of the stricter sanctions until after April 26 was allegedly not so much to allow the Bosnian Serbs time to comply but so as not to hurt President Yeltsin’s chances of success in the April 25 Russian referendum in which he faced opposition from pro-Serbian conservatives. The Bosnian Serbs not having accepted the "Vance-Owen" peace plan by April 25, President Clinton issued Executive Order 12846, to become effective after midnight on April 26. This Order implemented the additional measures and tightened the embargo, as mandated by Resolution 820, expressly blocking property under U.S. jurisdiction owned or controlled by all commercial and industrial entities, whether public or private, that were organized or located in the Federal Republic of Yugoslavia (Serbia and Montenegro). The Order expressly asserted jurisdiction over property of U.S. and foreign entities theretofore blocked by OFAC under a presumption of Yugoslav Government control, which, as discussed earlier, had been challenged since 1992 in the U.S. Federal Courts.³⁶ It also expanded the prohibitions against trade with the Federal Republic of Yugoslavia, prohibiting transshipments through its territory, and trade with the Serb UNPAs in Croatia and those areas of the Republic of Bosnia-Herzegovina under control of the Serbian forces. It authorized investigation of all vessels, land carriers, and aircraft suspected of violating the embargo, even though these were not subject to blocking under the Executive Orders, and authorized their seizure, if found to have been used in violation of any of the Council sanctions. Finally, it prohibited any U.S. owned or controlled vessels, other than naval vessels, from entering the territorial waters of the Republic of Yugoslavia.³⁷

On the Adriatic, the rules of engagement for the WEU and NATO squadrons were strengthened to establish a 12-mile exclusion zone consisting of the territorial waters of the Federal Republic of Yugoslavia off the coast of Montenegro that all vessels were prohibited from entering, except in an emergency. Any vessel found to have entered this zone was subject to seizure and could be forced to stop, using "inert charges" if necessary. NATO and WEU eventually agreed to combine their naval operations in the Adriatic under the unified command structure of NATO’s Southern European Allied Naval Forces, based in Italy, adopting the code name Sharp Guard for their enforcement operations.

With growing congressional pressure for the United States to terminate its arms embargo against the Bosnian Muslims, on May 27, during the course of an interview by the British Broadcasting Corporation, President Clinton noted, "With regard to lifting the arms embargo, I have always thought that the arms embargo was unfair to the Bosnian Government, always. That has been my position from day one. I have also always thought that the United States should not unilaterally lift it, from day one."³⁸

The Parliament of the self-proclaimed Serbian Republic of Bosnia-Herzegovina having refused in May to ratify the "Vance-Owen" peace plan, the Federal Republic of Yugoslavia announced it would impose its own trade embargo, denying all but humanitarian supplies to the Bosnian Serbs until they agreed to peace. On June 10, the Council issued Resolution 838, contemplating the possible deployment of international observers at the borders between Bosnia-Herzegovina and the Federal Republic of Yugoslavia to verify that the latter was no longer supplying the Bosnian Serbs and, at the same time, to monitor compliance with the U.N. trade embargo against the Federal Republic of Yugoslavia.³⁹ As a practical matter, in the absence of using overwhelming military force as an adjunct, the deployment of international monitors on the ground at border points controlled by Serbia and by the Bosnian Serbs could be implemented only with the consent of Slobodan Milosevic, the President of Serbia and the only one in control in the Federal Republic of Yugoslavia. Although it was considered unlikely that President Milosevic would agree, the Resolution was useful as a means of testing whether he was sincere in professing to distance Serbia from the Bosnian Serbs and to support an end to hostilities in Bosnia-Herzegovina.⁴⁰

Shortly thereafter, the U.N.-sponsored "Vance-Owen" peace plan was reluctantly shelved by the Council in favor of a plan initially proposed by Croatia and Serbia for the partitioning of Bosnia along ethnic lines into "three constituent nations." This plan was to become known as the "Owen-Stoltenberg" peace plan and would ultimately lead to the Dayton Accords.

On June 18 the Council issued Resolution 843, which established a working group to monitor sanctions against the Federal Republic of Yugoslavia and also provided that requests by States for compensation under Article 50 of the Charter for losses resulting from the U.N. embargo would be referred to the U.N. Sanctions Committee for review on the merits of each claim and recommendations to the Council. Lacking adequate funds and staff, the Council could do little more than recognize a claimant’s compliance with the sanctions and appeal to all member States, international financial institutions, and regional development banks to provide assistance.⁴¹

International efforts were now intensifying to offer the Serbs inducements to end the conflict. On October 4, 1993, the Council issued Resolution 871, extending the mandate of U.N. peacekeepers (UNPROFOR) in Bosnia-Herzegovina, Croatia, and Macedonia until March 31, 1994. In this Resolution the Council implicitly linked suspension of sanctions against the Federal Republic of Yugoslavia (Serbia and Montenegro) to a settlement of the conflict between Serbs and Croats in Croatia by affirming that "full normalization of the international community’s position toward those concerned will take into account their actions in implementing all relevant resolutions of the Security Council, including those relating to the United Nations peacekeeping plan for the republic of Croatia."⁴² On November 22 the foreign ministers of the European Union (the "EC" became the "EU" on November 1, 1993, upon final ratification of the Maastricht Treaty by Germany) endorsed a proposal by France and Germany to offer the Serbs a phased suspension of sanctions in exchange for territorial concessions returning 3 or 4 percent of the Serbian held territory in Bosnia-Herzegovina to the Bosnian Muslims.⁴³

On November 30 President Clinton signed into law the National Defense Authorization Act for Fiscal Year 1994, in which Section 1511 codified into law all sanctions against the Federal Republic of Yugoslavia (Serbia and Montenegro) heretofore imposed by the President that were still in effect on that date. In addition, Section 1511 prohibited the President from modifying or waiving any of these sanctions without either an act of Congress or his certification to the Congress that such action was necessary to meet emergency humanitarian needs or to achieve a negotiated settlement of the conflict. Although this provision sought to restrict some of the President’s discretion, he did not object to it, presumably because the certification procedure allowed him some leeway.⁴⁴

On December 20, 1993, the U.N. General Assembly passed a non-binding resolution, urging the Council to lift the arms embargo on the Bosnian Government,⁴⁵ and the year ended with reports in the press that, contrary to the official position of the Clinton Administration, the CIA was predicting the deterioration of international support for enforcement of the economic and trade sanctions against Serbia and Montenegro that had been in effect for 18 months, particularly among Serbia’s neighbors to whom the sanctions were costing billions of dollars in lost trade and industrial production.⁴⁶

The new year began without any progress in the ongoing peace talks and with renewed fighting in Bosnia-Herzegovina between the Bosnian Muslims and the Bosnian Croats assisted by several thousand soldiers from the Republic of Croatia who had crossed into Bosnia. On January 6, 1994, Madeleine Albright, then U.S. Ambassador to the United Nations, warned President Tudjman that economic sanctions might be imposed against Croatia unless it ceased to provide military support to the Bosnian Croats,⁴⁷ and on February 3 the Council threatened to impose these sanctions unless Croatia withdrew all its forces from Bosnia.⁴⁸ Bosnian Muslim and Croatian military commanders agreed to a cease-fire on February 23. This cease-fire was followed by political negotiations sponsored by the United States that culminated in March, with creation of a federation between the Muslim and Croat Bosnians in which the territories under their control were divided into fifteen cantons or municipalities. However, this did not end ongoing hostilities in Bosnia-Herzegovina between the Bosnian Muslims and the Bosnian Serbs who refused to join this federation.

In February 1994 Greek Prime Minister Papandreou had announced a ban on all trade with the Former Republic of Macedonia except in foodstuffs and medicines, reiterating Greece’s unsubstantiated complaint that the similarity in name with the historic adjoining Greek Province was undermining peace and security in the entire region.⁴⁹ The EU denounced the Greek embargo as being in violation of EU law. On April 22, during an official visit to Washington by Prime Minister Papandreou, President Clinton was asked by the press what was the U.S. position on this embargo. Perhaps not to offend his guest, the President replied diplomatically, "As you know, the United States believes the embargo should be lifted, but we also believe Greece has some very legitimate concerns which ought to be allayed."⁵⁰

According to reports only publicly confirmed in 1996, Peter Galbraith, the U.S. Ambassador to Croatia, was asked in April 1994 by the President of Croatia what would be the U.S. reaction if the Bosnian Muslims were to be covertly supplied with arms in shipments to be smuggled into Bosnia through Croatia. Unbeknownst to the Department of Defense or to the C.I.A., Ambassador Galbraith was directed by the State Department, with the personal approval of President Clinton, to advise President Tudjman that he had "no instructions" on this issue, thereby signaling that the Clinton administration would not object, but did not want to leave itself open to charges that it had approved violations of the U.N. embargo or that it had participated in a "covert operation" without a Presidential "finding" of necessity and informing Congress as required under relevant statutes. In 1996, upon learning of Ambassador Galbraith’s response, congressional committees in both Houses launched an investigation to determine whether U.S. laws had been broken by any U.S. participation in a covert action, but no such participation was ever established, ⁵¹ and Congress has not been overly critical of the President for having closed his eyes to the circumvention by other nations, including Iran, of the U.N. arms embargo.⁵²

At the end of July 1994, following another rejection of the peace plan by the Bosnian Serbs, the foreign ministers of the five nations constituting the International Contact Group (the United States, France, Germany, Russia, and the United Kingdom) decided to request the Council to impose even stronger sanctions against the Federal Republic of Yugoslavia (Serbia and Montenegro), but the United States let President Milosevic know that this decision would be reconsidered, and some of the existing sanctions might even be suspended, if Serbia broke ranks with the Bosnian Serbs.

On August 4 President Milosevic announced that the Federal Republic of Yugoslavia would support the peace plan and that it would impose an economic and trade embargo against the Bosnian Serbs, closing its border with Bosnia-Herzegovina to all goods except for foodstuffs, medical supplies, and clothing for essential humanitarian needs. The members of the International Contact Group, meeting in Berlin on September 6, agreed to support the suspension of some of the U.N. sanctions against the Federal Republic of Yugoslavia if the latter allowed the deployment of international monitors on its territory to verify the implementation of this new embargo against the Bosnian Serbs.

On September 23, ignoring allegations that military supplies continued to be brought from Serbia into Bosnian territory controlled by the Serbs, the Council issued Resolution 943 to ease slightly its sanctions against the Federal Republic of Yugoslavia. This Resolution provided for the suspension of some of the least significant U.N. sanctions (reopening of the ferry service between Italy and Montenegro, resumption of civilian air traffic, participation in international sporting events and in cultural exchanges) for an initial period of 100 days but renewable thereafter, to begin on the day after the Secretary General reported that the embargo against the Bosnian Serbs announced by President Milosevic was being implemented effectively. The Resolution requested the Secretary General to provide the Council followup reports every 30 days, and if he reported at any time that the embargo was no longer being implemented effectively, the sanctions would then be reinstated at the end of the fifth working day following such report.⁵³

On the same day it delivered this small carrot to President Milosevic, the Council issued Resolution 942 aimed at further tightening the U.N. embargo in any territory under the control of the Bosnian Serb forces, banning their paramilitary forces, their government leaders, and those assisting them from traveling abroad; imposing economic sanctions against all Bosnian Serb individuals and entities; and closing all river traffic in those areas of Bosnia-Herzegovina under their control.⁵⁴

On October 4, U.N. officials certified to the Council that President Milosevic had effectively cut off shipments of military supplies to the Bosnian Serbs although U.S. intelligence was reported to believe otherwise and observers reported witnessing intensified helicopter traffic across the border between Bosnia-Herzegovina and Serbia, particularly during the night hours.⁵⁵

In 1994, while the U.S. Congress generally favored providing arms to the Bosnian Muslims to help them defend themselves against the Bosnian Serbs, it had been divided over whether this should be accomplished unilaterally by the United States in violation of the U.N. embargo, or, as advocated by President Clinton, only after overcoming European opposition and obtaining the Council’s agreement. On October 5, 1994 Congress struck a compromise in Section 1404 of the National Defense Authorization Act for Fiscal Year 1995. This required the President to introduce a Resolution in the U.N. Council to lift the arms embargo if the Bosnian Serbs did not agree by October 15 to a new peace plan that had been proposed at the beginning of July by the International Contact Group. The Act also provided that if this Resolution were not adopted by the Council by November 15, no appropriated funds could be used thereafter by the United States to continue to enforce the arms embargo against Bosnia-Herzegovina, and the President would be required to report to, and consult with, the Congress over providing training and arms to the Bosnian Government.⁵⁶

On October 25, President Clinton acted to implement the stricter sanctions against the Bosnian Serbs mandated by the Council the previous month under Resolution 942. E.O. 12934 blocked all assets under U.S. jurisdiction owned or controlled by Bosnian Serb paramilitary forces, by government leaders in areas of Bosnia-Herzegovina controlled by the Serbs, and by individuals and entities located in such areas.⁵⁷ Proclamation 6749 implemented the travel ban imposed by Resolution 942, prohibiting entry into the United States of any individual aliens who were members of the Bosnian Serb forces, those who assisted such forces, government leaders in those areas of Bosnia-Herzegovina controlled by Bosnian Serbs, and those found to have violated the Council resolutions.⁵⁸

On October 28, in compliance with section 1404 of the National Defense Authorization Act for Fiscal Year 1995, the United States submitted to the Council a Draft Resolution that would have lifted the U.N. arms embargo against the Government of Bosnia-Herzegovina 6 months later if the Bosnian Serbs did not agree to the peace plan within that deadline.⁵⁹ On November 8, for the second time, the U.N. General Assembly urged the Council to exempt the Bosnian Muslims from the arms embargo,⁶⁰ but when the U.S. Draft Resolution was debated by the Council on November 9 it was not even put to a vote because the strong opposition of the United Kingdom, France, and Russia would have ensured its defeat. Following this inconclusive debate the United States announced that, as required by Section 1404 of the National Defense Authorization Act for Fiscal Year 1995, it would cease to participate in any enforcement of the U.N. arms embargo against Bosnia-Herzegovina as of November 12, 1994.

As long as the United States took no part in training or arming the Bosnian Muslims, this unilateral termination of its participation in enforcing the arms embargo against the Bosnian Government would not constitute a violation of Resolution 713. Although every U.N. member was bound to comply with the arms embargo issued by the Council under Chapter VII of the Charter, there was no legal obligation to provide military forces to enforce compliance by other nations.

According to press reports, most weapons secretly supplied to the Bosnian Muslims had until then been transported by air. In any event, all arms transported by sea, whether intended for the Croatian military or for the Bosnian Muslim forces, would have had to be unloaded in Croatia since Bosnian Muslims lacked direct port access to the sea. This meant that the United States would no longer be enforcing the U.N. arms embargo against either Bosnia-Herzegovina or Croatia. U.S. Admiral Leighton Smith would find himself in the strange role, as NATO commander, of overseeing the naval blockade without allowing any U.S. units to enforce the arms embargo, either directly, by intercepting weapon shipments, or indirectly, by transmitting intelligence reports to other NATO members participating in this blockade. However, it was reported that, under the new U.S. rules of engagement, U.S. warships would still be allowed to seize weapons that presented a particular threat to NATO forces, such as surface-to-air missiles, or any weapons of mass destruction.⁶¹

On December 12, Russia vetoed a Draft Council Resolution that would have further tightened the U.N. embargo against the Bosnian Serbs by prohibiting Serbia from supplying them with fuel by transshipment through Serb controlled areas in Croatia. However, the new year began on a brighter note with the entry into effect of a 4- month cease-fire between the Bosnian Muslims and the Bosnian Serbs. On January 12, 1995, the Council issued Resolution 970 extending for an additional 100 days the partial suspension of sanctions against the Federal Republic of Yugoslavia, initially established under Resolution 943.⁶²

In March, President Tudjman agreed to allow the U.N. peacekeeping forces (UNPROFOR) to remain in Croatia and to begin monitoring Croatia’s borders with Serbia and the Serb controlled areas of Bosnia-Herzegovina, so as to deter transfers of military equipment and supplies to the Bosnian Serbs. On March 31 the Council issued Resolution 981, which extended the mandate of U.N. peacekeeping forces in Croatia (the name of the U.N. operation in Croatia was changed from UNPROFOR to UNCRO) until November 30 and expressly confirmed its new role of monitoring the international borders of Croatia and reporting "the crossing of military personnel, equipment, supplies, and weapons."⁶³ However, negotiations between the United States and President Milosevic over the Federal Republic of Yugoslavia’s recognition of Bosnia-Herzegovina’s borders in exchange for the possible suspension of all U.N. sanctions broke down in May, when President Milosevic insisted that the sanctions would have to be unconditionally terminated rather than merely suspended.

In August 1995 the Congress enacted S.21, "The Bosnia and Herzegovina Self-Defense Act of 1995," which would have required the administration unilaterally to lift the arms embargo against Bosnia-Herzegovina upon withdrawal of the U.N. peacekeeping force or 12 weeks following a request by the Bosnian Government for such a withdrawal, whichever came sooner. On August 11 President Clinton vetoed this legislation, as he had announced he would do, explaining in his veto message that it would risk widening and prolonging the conflict in Bosnia-Herzegovina, trigger the withdrawal of UNPROFOR, and result in the U. S. having to send ground forces to facilitate such withdrawal. The President also noted that it constituted an "attempt to regulate by statute matters for which the President is responsible under the Constitution."⁶⁴

In September, following a series of air strikes by NATO aircraft on Bosnian Serb positions, all parties finally agreed to peace talks to be held in Geneva, with President Milosevic authorized to negotiate on behalf of the Bosnian Serbs as well as on behalf of the Federal Republic of Yugoslavia. These negotiations moved to New York and ultimately to Wright-Patterson Air Force base in Dayton, Ohio, culminating on November 21, 1995 with the Presidents of Croatia, Bosnia-Herzegovina, and Serbia initialing the General Framework Agreement for Peace in Bosnia-Herzegovina and the annexes thereto (the "Dayton Accords"). Under the Dayton Accords, 51 percent of the territory of Bosnia-Herzegovina was to become the Muslim-Croat Federation and the remaining 49 percent a Bosnian Serb republic, the Republika Srpska. Both new republics were to be largely autonomous under a Bosnian central government, with the city of Sarajevo to be governed by a special unified regime.

On November 22 the Council issued Resolution 1022 suspending all economic and trade sanctions against the Federal Republic of Yugoslavia. This constituted the promised reward to President Milosevic for agreeing to the Dayton Accords. The U.N. sanctions against the Bosnian Serbs were to remain in full force until the day after the High Representative or the IFOR Commander reported to the Council through the U.N. Secretary General that all Bosnian Serb armed forces had withdrawn from the zones of separation or "buffer zones" established under the Dayton Accords. The sanctions against the Federal Republic of Yugoslavia and those against the Bosnian Serbs were to be permanently terminated on the tenth day following the first "free and fair elections" in Bosnia-Herzegovina contemplated under the Accords, but only if the Bosnian Serb forces had continued to stay out of the buffer zones. The Resolution also established a mechanism for resumption of the suspended sanctions against the Federal Republic of Yugoslavia or the Bosnian Serbs without need for a new Council Resolution (and a possible veto by Russia) if at any time the U.N. High Repre-sentative or the IFOR Commander determined that either entity failed significantly to meet its respective obligations under the Dayton Accords.⁶⁵

On the same day, the Council issued Resolution 1021, which suspended the arms embargo against all former Yugoslavia in three successive phases. The embargo would remain in force during the entire duration of the first phase which would last 90 days, and begin on the date when the parties were reported to have formally signed the Peace Agreement and annexes that they had initialed in Dayton. Beginning with the second phase, also of 90 days, the arms embargo would end and weapons and ammunition could be delivered to the Bosnian Federation, except for heavy weapons, ammunition therefor, mines, military aircraft, and helicopters, which could not be delivered until after the entry into effect of an arms control agreement. At the end of the second phase (180 days following the formal signing of the Peace Agreement), the arms embargo would completely terminate after the Secretary General issued a report to the Council that an Agreement on Regional Stabilization had been implemented.⁶⁶

On December 14, 1995, the Presidents of Bosnia-Herzegovina, Croatia, and Serbia met in Paris and formally signed the Peace Agreement they had initialed in Dayton. President Clinton issued a Presidential Determination on December 27, certifying, as required by Congress under Section 1511 of the Defense Authorization Act for Fiscal Year 1994, that suspension of U.S. trade and economic sanctions against the Federal Republic of Yugoslavia was necessary to achieve a negotiated settlement of the conflict.⁶⁷ Pursuant to this determination, OFAC amended its regulations to authorize prospectively, effective January 16, 1996, a suspension of the sanctions and resumption of transactions with the Federal Republic of Yugoslavia. However, all assets and property theretofore blocked under these sanctions were to remain blocked until any conflicting claims against such assets and property, including claims by other successor States of the former Yugoslavia, could be resolved.⁶⁸ According to press reports, the U.N. embargo against the Federal Republic of Yugoslavia had remained porous during the three years it was in force, with luxury goods smuggled from Western Europe widely available in Belgrade stores throughout the entire period, albeit at prices few could afford.

In a November 1995 interview with Reuters, the Vice Prime Minister of Serbia estimated that direct and indirect losses resulting from the embargo had amounted to between $100 and $150 billion, but some independent economists believe that the sanctions accounted for only about 15 to 20 percent of Serbia’s decline, with economic losses caused in part by inept economic policies of the Milosevic regime that triggered runaway inflation in 1993 by printing money to cover the national debt.⁶⁹ Whatever the cause, by 1993 the Permanent Mission of the Federal Republic of Yugoslavia had reported to the U.N. General Assembly that almost 80 percent of the population had fallen below the poverty line and that such necessities as medicines, baby food, spare parts to maintain medical equipment, and heating oil were lacking throughout the Republic.

In February 1996 General Mladic, the commander of the Bosnian Serb armed forces who was himself under indictment as a war criminal, ordered his military to cease all contact with the NATO Implementation Force (IFOR) until the Bosnian Government released two of his officers who had been arrested on suspicion of being war criminals as they drove by a Muslim checkpoint. This break of contact with the Bosnian Serb military jeopardized implementation of the military aspects of the Dayton Peace Accords, including completion of the Serb withdrawal from the "buffer zones." This withdrawal was a precondition under Resolution 1022 to suspending the U.N. trade and economic sanctions against the Bosnian Serbs. Although General Mladic’s order was promptly overruled by the Prime Minister of the Bosnian Serb republic, 2 weeks elapsed before the Bosnian Serb military resumed contacts with representatives of IFOR. Reportedly, during the frenzied diplomatic negotiations that ensued over this 2-week period, the Bosnian Serbs were promised immediate suspension of the trade and economic sanctions still imposed against them as soon as they reestablished military contacts with IFOR and their complete withdrawal from the "buffer zones" had been verified.

On February 27, 1996, 3 days after the IFOR Commander reported that he had resumed contacts with the Bosnian Serb military and that all Bosnian Serb forces had withdrawn behind the separation zones, all trade and economic sanctions against the Republika Srpska were suspended. The OFAC amended its regulations to authorize prospectively, as of May 10, the resumption of transactions with the Bosnian Serb controlled areas of Bosnia-Herzegovina. As when it suspended the sanctions against the Federal Republic of Yugoslavia, OFAC continued to block assets and property blocked prior to the effective date of this suspension, pending settlement of any conflicting claims.⁷⁰ For this reason, and also because these sanctions were subject to reimposition at any time at the call of the High Representative or of the IFOR Commander, the national emergency proclaimed at the time these sanctions were imposed was not terminated by President Clinton. In fact, pursuant to the NEA, the President extended the emergency for another year before it was scheduled to expire mid-May 1996. Similarly, although enforcement activities under Operation Sharp Guard were suspended in May, this operation was not terminated and U.S. naval units remained available to resume the blockade, should the sanctions be reimposed.

On September 14, 1996, the "free and fair elections" called for under the Peace Agreement were held in Bosnia-Herzegovina, and in accord with the provisions of Resolution 1022, on October 1 the Council issued Resolution 1074 terminating all outstanding trade and economic sanctions but warning that it would "consider the imposition of measures if any party fails significantly to meet its obligations under the Peace Agreement."⁷¹ As of March 1997, the President had not formally terminated the U.S. sanctions, as contemplated under Resolution 1074, and they remained only suspended. Moreover, the United States continued to withhold full diplomatic relations from the Federal Republic of Yugoslavia as well as economic benefits, defense-related materials, and U.S. support in international organizations.

Although President Milosevic blamed the U.N. sanctions for all the economic woes suffered by Serbia and finally agreed to peace in order to have these lifted, economic prosperity did not return to Serbia following suspension of the sanctions. In July 1996, during President Milosevic’s campaign for reelection, the press reported Serbia’s continuing difficulties with massive unemployment and rampant inflation, quoting an unemployed Serb machinist as saying, "A lot of people think we had a better life with sanctions. . . . When we had sanctions, the black market functioned. You could close your eyes and buy. Now people can’t afford things. And people are realizing: There is no money." ⁷² This machinist, and any other Serbs sharing his nostalgia for return to the by-gone sanctions era, almost had their wish. Following annulment by the Yugoslav courts in November 1996 of several municipal elections won by democratic opponents of President Milosevic, massive demonstrations against his regime erupted in Belgrade. On December 3, as the police threatened to use force against the demonstrators, the United States warned of the possibility that the sanctions being held in suspension might be reinstated.⁷³

The national emergency that was the basis for the U.S. sanctions against the former Yugoslavia is not scheduled to expire until mid-May 1997. Therefore, this national emergency might still be relied on by the President to reinstitute the sanctions unilaterally, pursuant to his authority under the IEEPA. However, reimposition of the U.N. sanctions multilaterally and their multilateral enforcement through a blockade, would require a new Council Resolution because the mechanism under Resolution 1022 for reinstituting the suspended sanctions without a Council resolution ceased to apply when these sanctions were terminated by Resolution 1074. Such a new Resolution would be most likely vetoed by some permanent members of the Council, particularly Russia, unless Serbia commits far more significant violations of the Dayton Accords than it has so far.⁷⁴

Fortunately for all concerned, the Serbian armed forces refused to become involved in the dispute over the outcome of the municipal elections and, after three months of unabating well-organized demonstrations by the opposition, President Milosevic finally recognized his precarious political situation and allowed the winners of all these municipal elections to take office. It is doubtful that the threat of renewed economic sanctions had any significant impact on his decision.

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