Office of the Historian

200. Summary of Conclusions of a Special Coordination Committee Meeting1

Washington, March 6, 1980, 9–9:40 a.m.

SUBJECT

  • Iran/Afghanistan

PARTICIPANTS

  • State

    • Secretary Cyrus Vance
    • Warren Christopher
    • David Newsom
    • Peter Constable
    • Nelson Ledsky

  • OSD

    • W. Graham Claytor

  • JCS

    • General David Jones
    • Lt. Gen. John Pustay

  • Justice

    • John Shenefield

  • Treasury

    • Robert Carswell

  • Energy

    • John Sawhill

  • White House

    • Henry Owen (Chairman)
    • Jody Powell
    • Lloyd Cutler
    • Hedley Donovan

  • NSC

    • Gary Sick
    • William Odom
    • Jerrold Schecter

SUMMARY OF CONCLUSIONS

1. Iran Developments. Secretary Vance informed the group that the U.S. public reaction to the reports that the hostages were to be turned over to the Revolutionary Council would be: “We have noted what has been said in Tehran and we are waiting to see what happens.” No one should go beyond that statement. All agreed. (C)

2. Iran Sanctions. The SCC reviewed the status of sanctions on Iran as follows:

Military Spares. State and Defense reported that the embargo on sale of military spare parts was holding. [3 lines not declassified] In general, the anxiety on the part of the Iranians to find spares is evidence that the embargo is working. We are staying alert for efforts to circumvent the restrictions. (S)

Assets Freeze. Treasury reported that the freeze is holding. The Iranians are considering a counter-attachment of U.S. assets in Swiss banks, and we have retained counsel to attempt to block them. The situation will have to be played day by day. In France, a hearing on our freeze of assets in French banks is scheduled for March 17, but we are seeking a month delay. If and when the hearing is held, it is likely to go against us. [12 lines not declassified] Otherwise, Treasury noted that there are a number of tactical situations around the world which are being watched, and we are holding fast. Iran is putting pressure on Finland to repay $38 million oil payment which was caught in the freeze. The World Bank is asking us to license payment of an Iranian loan which is coming due. In the UK, seven Iranian counter suits have been consolidated but will probably not be heard before summer or fall. There are 160 suits pending in the U.S., but consolidation proceedings insure that they will not be held for at least a month or longer. (TS)2

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Oil. Iranian production has been holding at just above 2 mbd. There has been a slight decline in exports in the early part of 1980, but that is probably due more to difficulties in contracting than to the floods, sabotage, breakdowns, and labor problems NIOC has been experiencing. Over time, these problems, including the lack of new drilling, will cause a decline in oil production, but it is not likely to be steep. The gas pipeline with the USSR is totally closed down, which may be an Iranian ploy in forthcoming price negotiations with the Soviets. (S)

Immigration. A total of 56,000 Iranian students were registered; 8,000 failed to register and are being pursued. Overall, since the restrictions were imposed, about 12,000 Iranians have left the U.S., including about 3,000 students. Approximately the same number of Iranians have entered the country during the same period since we decided not to prevent immigration. (C)

Overall Effect. Admiral Turner said that the sanctions have had only a marginal effect on the Iranian economic disarray, and keeping the sanctions in effect would continue to have a marginal effect. Secretary Vance said he was more optimistic. Although the economic effects of the sanctions had not been great, the psychological effect had been real, as demonstrated by the lengths Iran went to prevent sanctions being voted in the UN. Mr. Claytor agreed that knowledgeable people were worried about the effect of the sanctions in the long run. The short term effect was minimal, but over the period of a year there would be a significant impact in terms of spare parts and production capacity. Energy agreed. Mr. Cutler noted that Iran had gone from an excellent credit rating to one of the lowest, although that was due in large part to their own actions and economic disarray. (C)

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

  1. Source: Carter Library, National Security Council, NSC Institutional Files (H–Files), Box 110. Top Secret. The meeting took place in the White House Situation Room. Carter wrote “Zbig, C” in the upper right corner. Beginning February 9, the 9 a.m. SCC meetings on Iran met only on Tuesdays and Thursdays. (Memorandum from Brzezinski to Vance, Brown, Jones, Turner, February 8; Carter Library, National Security Affairs, Staff Material, Office File, Box 18, SCC Meeting #264 held 1/30/80)↩
  2. In the left margin next to this paragraph, Carter wrote: “Keep strictest possible sanctions intact.” Brzezinski passed on these instructions in a March 7 memorandum to Vance, Miller, Brown, Civiletti, Duncan, Cutler, and Jones. (Carter Library, Records of the White House Office of Counsel to the President, Lloyd Cutler’s Files, Box 13)↩