Foreign Relations of the United States, 1977–1980, Volume XI, Part 1, Iran: Hostage Crisis, November 1979–September 1980

172. Summary of Conclusions of a Special Coordination Committee Meeting¹

Washington, January 31, 1980, 9–10:10 a.m.

SUBJECT

• Iran

PARTICIPANTS

• State

  • Warren Christopher
  • Harold Saunders
  • Richard Cooper

• Defense

  • W. Graham Claytor
  • William Perry

• JCS

  • General John Pustay

• CIA

  • Frank Carlucci

• Treasury

  • Secretary William Miller*

• Justice

  • Attorney General Benjamin Civiletti*

• Energy

  • John Sawhill*

• Agriculture

  • James Williams*

• Commerce

  • Secretary Philip Klutznick
  • Homer Moyers

• White House

  • Zbigniew Brzezinski**
  • David Aaron***
  • Joseph Onek*
  • Hedley Donovan
  • Stuart Eizenstat*
  • Henry Owen*

• NSC

  • Colonel William Odom
  • Gary Sick
  • Thomas Thornton

*Domestic Issues Only

**Departed at 9:30 a.m.

***Chaired from 9:30 a.m.

SUMMARY OF CONCLUSIONS

Domestic Issues:

1. Sanctions. Dr. Brzezinski reported that the President will sign the Executive Order on sanctions against Iran.² It will be handled without fanfare and simply published in the Federal Register. We will inform the allies and ask them for acts of solidarity. We will not twist their arms.

[Omitted here is material unrelated to the hostage crisis.]

Secretary Miller noted that the regulations as now drafted call for U.S. subsidiaries abroad to be included in the Iran sanctions. He thought this would create problems with a number of our friends who are concerned with the extraterritoriality question. For example, Ambassador Brewster in London reported yesterday that the extraterritoriality issue would cause problems with the UK. There was some discussion about the pros and cons, and the SCC agreed unanimously that the provisions should be removed from the regulations and that this would be consistent with the President’s decision not to expend political capital with the allies on this issue. The effect of removal would be that subsidiaries of American corporations abroad would not at this time be involved in the sanctions against Iran.³ (S)

[Omitted here is material unrelated to the hostage crisis.]

5. Iranian Oil. The Department of Energy reported that it is their understanding, particularly on the basis of talks with Shell executives, that the problem of declining oil production in Iran is not so much a need for drilling to reduce water in the wells as it is morale, labor, and mismanagement. The Iranians have not requested drilling equipment, so the decision to provide it or not is moot. Secretary Miller said he had quite a different story from Exxon who has requested a license for spare parts on oil drilling equipment⁴ and who claims that there is a critical situation. It was agreed that Energy and Treasury would get together to try and get the true story and report back to the SCC. (S)

[Omitted here is material unrelated to the hostage crisis.]

1. Source: Carter Library, National Security Affairs, Staff Material, Middle East File, Box 99, Meetings File, 1/30 and 31/80 SCC re Iran. Top Secret. The meeting took place in the White House Situation Room. Carter wrote “David, J” in the upper right corner.
2. In the left margin, Carter wrote: “Monday ok.” Monday, February 4. According to an undated memorandum from Cutler to Carter, which transmitted a draft of the Executive Order and the related Report to Congress, Cutler wrote: “Because of possible adverse reaction from our allies, the SCC decided not to apply the sanctions to the foreign subsidiaries of U.S. companies not engaged in banking. The sanctions would, however, apply to the foreign subsidiaries of banks.” (Carter Library, National Security Affairs, Brzezinski Material, Country File, Iran 3/80) As to whether the announcement would be low-key, Carter wrote, in the left margin of the Summary of Conclusions of the January 29 SCC meeting: “We should impose them & let it be known that they have, in effect, already been in effect.” (Carter Library, National Security Affairs, Staff Material, Office File, SCC Meeting #263 held 1/29/80) Carter signed Executive Order 12205 on April 7. See Document 246.
3. Carter approved the item with a checkmark, underlined the phrases “American corporations abroad” and “in the sanctions against Iran,” and then wrote in the left margin: “Legally, no—strong persuasion, yes.” Aaron relayed this Presidential decision to Vance, Miller, Brown, Civiletti, Klutznick, Duncan, and Turner in a February 1 memorandum. (Carter Library, National Security Affairs, Staff Material, Middle East File, Box 99, Meetings File, 1/30 and 31/80 SCC re Iran)
4. Carter underlined the phrase “a license for spare parts on oil drilling equipment” and wrote in the margin “no.”