31
Money and Finance: Treasury
2
2003-07-01
2003-07-01
false

IRAQI SANCTIONS REGULATIONS
575

PART 575
Money and Finance: Treasury
Regulations Relating to Money and Finance (Continued)
FISCAL SERVICE, DEPARTMENT OF THE TREASURY
BUREAU OF THE PUBLIC DEBT
Pt. 575

PART 575—IRAQI SANCTIONS REGULATIONS

Subpart A—Relation of This Part to Other Laws and Regulations
Sec.
575.101
Relation of this part to other laws and regulations.

Subpart B—Prohibitions
575.201
Prohibited transactions involving property in which the Government of Iraq has an interest; transactions with respect to securities.
575.202
Effect of transfers violating the provisions of this part.
575.203
Holding of certain types of blocked property in interest-bearing accounts.
575.204
Prohibited importation of goods or services from Iraq.
575.205
Prohibited exportation and reexportation of goods, technology, or services to Iraq.
575.206
Prohibited dealing in property.
575.207
Prohibited transactions relating to travel to Iraq or to activities within Iraq.
575.208
Prohibited transportation-related transactions involving Iraq.
575.209
Prohibited performance of contracts.
575.210
Prohibited transfers of funds to the Government of Iraq or any person in Iraq.
575.211
Evasions; attempts; conspiracies.
575.212
Effective dates.

Subpart C—General Definitions
575.301
Blocked account; blocked property.
575.302
Effective date.
575.303
Entity.
575.304
Entity of the Government of Iraq; Iraqi Government Entity.
575.305
General license.
575.306
Government of Iraq.
575.307
Government of Kuwait.
575.308
Interest.
575.309
Iraq; Iraqi.
575.310
Kuwait; Kuwaiti.
575.311
Iraqi origin.
575.312
Iraqi person.
575.313
License.
575.314
Person.
575.315
Property; property interest.
575.316
Specific license.
575.317
Transfer.
575.318
UNSC Resolution 661.
575.319
United States.
575.320
U.S. financial institution.
575.321
United States person; U.S. person.
575.322
United States national; U.S. national.
575.323
661 Committee.
575.324
UNSC Resolution 986.
575.325
986 Escrow Account; United Nations Iraq Account.
575.326
Executory contract.
575.327
Memorandum of Understanding.
575.328
Guidelines.
575.329
Areas of Iraq not controlled by the Government of Iraq.
575.330
Humanitarian activities, humanitarian purposes, and humanitarian support.

Subpart D—Interpretations
575.401
Reference to amended sections.
575.402
Effect of amendment.
575.403
Termination and acquisition of an interest of the Government of Iraq.
575.404
Payments from blocked accounts to U.S. exporters and for other obligations prohibited.
575.405
Acquisition of instruments including bankers acceptances.
575.406
Extensions of credits or loans to Iraq.
575.407
Payments in connection with certain authorized transactions.
575.408
Offshore transactions.
575.409
Transshipments through the United States prohibited.
575.410
Imports of Iraqi goods from third countries; transshipments.
575.411
Exports to third countries; transshipments.
575.412
Release of Iraqi goods from bonded warehouse or foreign trade zone.
575.413
Goods intended for export to Iraq.
575.414
Imports of Iraqi goods and purchases of goods from Iraq.
575.415
Setoffs prohibited.
575.416
Travel transactions for journalistic activity in Iraq.
575.417
[Reserved]
575.418
Transactions incidental to a licensed transaction.

Subpart E—Licenses, Authorizations, and Statements of Licensing Policy
575.501
Effect of license or authorization.
575.502
Exclusion from licenses and authorizations.
575.503
Payments and transfers to blocked accounts in U.S. financial institutions.
575.504
[Reserved]
575.505
Completion of certain transactions related to bankers acceptances authorized.
575.506
Payment by the Government of Iraq of obligations to persons within the United States authorized.
575.507
Certain exports to Iraq authorized.
575.508
Import of household and personal effects from Iraq authorized.
575.509
Payment and transfers authorized for shipments of oil under contract and en route to the United States prior to the effective date.
575.510
Payment and transfers authorized for goods and services exported to Iraq prior to the effective date.
575.511
Extensions or renewals authorized.
575.512
[Reserved]
575.513
Transactions related to telecommunications authorized.
575.514
Transactions related to mail authorized.
575.515—75.516
[Reserved]
575.517
Procedures established for export transactions initiated prior to the effective date.
575.518
Certain standby letters of credit and performance bonds.
575.519
Certain imports for diplomatic or official personnel authorized.
575.520
Donations of food to relieve human suffering authorized.
575.521
Donations of medical supplies authorized.
575.522
Executory contracts with the Government of Iraq for trade in petroleum, pipeline parts and equipment, humanitarian goods, and oil field equipment authorized.
575.523
Certain transactions in Iraqi petroleum and petroleum products.
575.524
Exportation of pipeline parts and equipment.
575.525
Exportation of humanitarian aid.
575.526
Dealings in and importation of certain Iraqi-origin petroleum and petroleum products authorized.
575.527
Registration of non-governmental organizations for humanitarian activities.
575.528
Authorization of certain survey or assessment missions in and around Iraq.
575.529
Non-commercial funds transfers and related transactions.
575.530
Activities by the U.S. Government and its contractors or grantees.
575.531
Privately financed humanitarian transactions.
575.532
Certain exports and reexports to Iraq.
575.533
Certain new transactions.

Subpart F—Reports
575.601
Records and reports.

Subpart G—Penalties
575.701
Penalties.
575.702
Prepenalty notice.
575.703
Presentation responding to prepenalty notice.
575.704
Penalty notice.
575.705
Referral to United States Department of Justice.

Subpart H—Procedures
575.801
Procedures.
575.802
Delegation by the Secretary of the Treasury.

Subpart I—Paperwork Reduction Act
575.901
Paperwork Reduction Act notice.

Authority:
3 U.S.C. 301; 18 U.S.C. 2332d; 22 U.S.C. 287c; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-513, 104 Stat. 2047-2055 (50 U.S.C. 1701 note); E.O. 12722, 55 FR 31803, 3 CFR, 1990 Comp., p. 294; E.O. 12724, 55 FR 33089, 3 CFR, 1990 Comp., p. 297; E.O. 12817, 57 FR 48433, 3 CFR, 1992 Comp., p. 317.

Source:
56 FR 2113, Jan. 18, 1991, unless otherwise noted.

Subpart A—Relation of This Part to Other Laws and Regulations
§ 575.101
Relation of this part to other laws and regulations.
(a) This part is separate from, and independent of, the other parts of this chapter with the exception of part 501 of this chapter, the recordkeeping and reporting requirements and license application and other procedures of which apply to this part. No license or authorization contained in or issued pursuant to those other parts authorizes any transaction prohibited by this part. No license or authorization contained in or issued pursuant to any other provision of law or regulation authorizes any transaction prohibited by this part.
(b) No license or authorization contained in or issued pursuant to this part relieves the involved parties from complying with any other applicable laws or regulations.
[56 FR 2113, Jan. 18, 1991, as amended at 62 FR 45109, Aug. 25, 1997]

Subpart B—Prohibitions
§ 575.201
Prohibited transactions involving property in which the Government of Iraq has an interest; transactions with respect to securities.
(a) Except as authorized by regulations, rulings, instructions, licenses, or otherwise, no property or interests in property of the Government of Iraq that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of U.S. persons, including their overseas branches, may be transferred, paid, exported, withdrawn or otherwise dealt in.
(b) Unless otherwise authorized by this part or by a specific license expressly referring to this section, the transfer (including the transfer on the books of any issuer or agent thereof), the endorsement or guaranty of signatures on, or any other dealing in any security (or evidence thereof) registered or inscribed in the name of the Government of Iraq and held within the possession or control of a U.S. person is prohibited, irrespective of the fact that at any time either at or subsequent to the effective date the registered or inscribed owner thereof may have, or appears to have, assigned, transferred, or otherwise disposed of any such security.
(c) When a transaction results in the blocking of funds at a financial institution pursuant to this section and a party to the transaction believes the funds have been blocked due to mistaken identity, that party may seek to have such funds unblocked pursuant to the administrative procedures set forth in § 501.806 of this chapter.
[56 FR 2113, Jan. 18, 1991, as amended at 62 FR 45109, Aug. 25, 1997]
§ 575.202
Effect of transfers violating the provisions of this part.
(a) Any transfer after the effective date, which is in violation of any provision of this part or of any regulation, ruling, instruction, license, or other direction or authorization hereunder and involves any property in which the Government of Iraq has or has had an interest since such date, is null and void and shall not be the basis for the assertion or recognition of any interest in or right, remedy, power or privilege with respect to such property.
(b) No transfer before the effective date shall be the basis for the assertion or recognition of any right, remedy, power, or privilege with respect to, or interest in, any property in which the Government of Iraq has an interest, or has had an interest since such date, unless the person with whom such property is held or maintained, prior to such date, had written notice of the transfer or by any written evidence had recognized such transfer.
(c) Unless otherwise provided, an appropriate license or other authorization issued by or pursuant to the direction or authorization of the Director of the Office of Foreign Assets Control before, during, or after a transfer shall validate such transfer or render it enforceable to the same extent that it would be valid or enforceable but for the provisions of the International Emergency Economic Powers Act, the United Nations Participation Act, this part, and any ruling, order, regulation, direction, or instruction issued hereunder.
(d) Transfers of property which otherwise would be null and void or unenforceable by virtue of the provisions of this section shall not be deemed to be null and void or unenforceable as to any person with whom such property was held or maintained (and as to such person only) in cases in which such person is able to establish to the satisfaction of the Director of the Office of Foreign Assets Control each of the following:
(1) Such transfer did not represent a willful violation of the provisions of this part by the person with whom such property was held or maintained;
(2) The person with whom such property was held or maintained did not have reasonable cause to know or suspect, in view of all the facts and circumstances known or available to such person, that such transfer required a license or authorization by or pursuant to this part and was not so licensed or authorized, or if a license or authorization did purport to cover the transfer, that such license or authorization had been obtained by misrepresentation of a third party or the withholding of material facts or was otherwise fraudulently obtained; and
(3) Promptly upon discovery that:
(i) Such transfer was in violation of the provisions of this part or any regulation, ruling, instruction, license, or other direction or authorization hereunder, or
(ii) Such transfer was not licensed or authorized by the Director of the Office of Foreign Assets Control, or
(iii) If a license did purport to cover the transfer, such license had been obtained by misrepresentation of a third party or the withholding of material facts or was otherwise fraudulently obtained;
the person with whom such property was held or maintained filed with the Office of Foreign Assets Control a report setting forth in full the circumstances relating to such transfer. The filing of a report in accordance with the provisions of this paragraph shall not be deemed evidence that the terms of paragraphs (d) (1) and (2) of this section have been satisfied.
(e) Unless licensed or authorized pursuant to this part, any attachment, judgment, decree, lien, execution, garnishment, or other judicial process is null and void with respect to any property in which, on or since the effective date, there existed an interest of the Government of Iraq.
§ 575.203
Holding of certain types of blocked property in interest-bearing accounts.
(a) Any person, including a U.S. financial institution, currently holding property subject to § 575.201 which, as of the effective date or the date of receipt if subsequent to the effective date, is not being held in an interest-bearing account, or otherwise invested in a manner authorized by the Office of Foreign Assets Control, must transfer such property to, or hold such property or cause such property to be held in, an interest-bearing account or interest-bearing status in a U.S. financial institution as of the effective date or the date of receipt if subsequent to the effective date of this section, unless otherwise authorized or directed by the Office of Foreign Assets Control. This requirement shall apply to currency, bank deposits, accounts, and any other financial assets, and any proceeds resulting from the sale of tangible or intangible property. If interest is credited to an account separate from that in which the interest-bearing asset is held, the name of the account party on both accounts must be the same and must clearly indicate the blocked Government of Iraq entity having an interest in the accounts.
(b) For purposes of this section, the term interest-bearing account means a blocked account in a U.S. financial institution earning interest at rates that are commercially reasonable for the amount of funds in the account. Except as otherwise authorized, the funds may not be invested or held in instruments the maturity of which exceeds 90 days.
(c) This section does not apply to blocked tangible property, such as chattels, nor does it create an affirmative obligation on the part of the holder of such blocked tangible property to sell or liquidate the property and put the proceeds in a blocked account. However, the Office of Foreign Assets Control may issue licenses permitting or directing sales of tangible property in appropriate cases.
§ 575.204
Prohibited importation of goods or services from Iraq.
Except as otherwise authorized, no goods or services of Iraqi origin may be imported into the United States, nor may any U.S. person engage in any activity that promotes or is intended to promote such importation.
§ 575.205
Prohibited exportation and reexportation of goods, technology, or services to Iraq.
Except as otherwise authorized, no goods, technology (including technical data or other information), or services may be exported from the United States, or, if subject to U.S. jurisdiction, exported or reexported from a third country to Iraq, to any entity owned or controlled by the Government of Iraq, or to any entity operated from Iraq, except donated foodstuffs in humanitarian circumstances, and donated supplies intended strictly for medical purposes, the exportation of which has been specifically licensed pursuant to §§ 575.507, 575.517 or 575.518.
§ 575.206
Prohibited dealing in property.
Except as otherwise authorized, no U.S. person may deal in property of Iraqi origin exported from Iraq after August 6, 1990, property intended for exportation to Iraq, or property intended for exportation from Iraq to any other country, nor may any U.S. person engage in any activity that promotes or is intended to promote such dealing.
§ 575.207
Prohibited transactions relating to travel to Iraq or to activities within Iraq.
Except as otherwise authorized, no U.S. person may engage in any transaction relating to travel by any U.S. citizen or permanent resident alien to Iraq, or to activities by any U.S. citizen or permanent resident alien within Iraq, after the effective date, other than transactions:
(a) Necessary to effect the departure of a U.S. citizen or permanent resident alien from Kuwait or Iraq;
(b) Relating to travel and activities for the conduct of the official business of the United States Government or the United Nations; or
(c) Relating to journalistic activity by persons regularly employed in such capacity by a newsgathering organization.
This section prohibits the unauthorized payment by a U.S. person of his or her own travel or living expenses to or within Iraq.
§ 575.208
Prohibited transportation-related transactions involving Iraq.
Except as otherwise authorized, the following are prohibited:
(a) Any transaction by a U.S. person relating to transportation to or from Iraq;
(b) The provision of transportation to or from the United States by any Iraqi person or any vessel or aircraft of Iraqi registration; or
(c) The sale in the United States by any person holding authority under the Federal Aviation Act of any transportation by air which includes any stop in Iraq.
(d) Example. Unless licensed or exempted, no U.S. person may insure, or provide ticketing, ground, port, refueling, bunkering, clearance, or freight forwarding services, with respect to any sea, ground, or air transportation the destination of which is Iraq, or which is intended to make a stop in Iraq.
§ 575.209
Prohibited performance of contracts.
Except as otherwise authorized, no U.S. person may perform any contract, including a financing contract, in support of an industrial, commercial, public utility, or governmental project in Iraq.
§ 575.210
Prohibited transfer of funds to the Government of Iraq or any person in Iraq.
Except as otherwise authorized, no U.S. person may commit or transfer, directly or indirectly, funds or other financial or economic resources to the Government of Iraq or any person in Iraq.
§ 575.211
Evasions; attempts; conspiracies.
Any transaction for the purpose of, or which has the effect of, evading or avoiding, or which facilitates the evasion or avoidance of, any of the prohibitions set forth in this subpart, is hereby prohibited. Any attempt to violate the prohibitions set forth in this part is hereby prohibited. Any conspiracy formed for the purpose of engaging in a transaction prohibited by this part is hereby prohibited.
§ 575.212
Effective dates.
The effective dates of the prohibitions and directives contained in this subpart B are as follow:
(a) With respect to §§ 575.201, 575.202, 575.204, 575.205, 575.207, 575.208, 575.209, and 575.211, 5 a.m., Eastern Daylight Time (“e.d.t.”), August 2, 1990;
(b) With respect to §§ 575.206, and 575.210, 8:55 p.m. e.d.t., August 9, 1990; and
(c) With respect to § 575.203, January 18, 1991.

Subpart C—General Definitions
§ 575.301
Blocked account; blocked property.
The terms blocked account and blocked property shall mean any account or property in which the Government of Iraq has an interest, and with respect to which payments, transfers, exportations, withdrawals, or other dealings may not be made or effected except pursuant to an authorization or license from OFAC authorizing such action.
§ 575.302
Effective date.
The term effective date refers to the effective date of the applicable prohibition, as identified in § 575.212.
§ 575.303
Entity.
The term entity includes a corporation, partnership, association, or other organization.
§ 575.304
Entity of the Government of Iraq; Iraqi Government entity.
The term entity of the Government of Iraq or Iraqi Government entity includes:
(a) Any corporation, partnership, association, or other entity in which the Government of Iraq owns a majority or controlling interest, any entity managed or funded by that government, or any entity which is otherwise controlled by that government;
(b) Any agency or instrumentality of the Government of Iraq, including the Central Bank of Iraq.
§ 575.305
General license.
The term general license means any license or authorization the terms of which are set forth in this part.
§ 575.306
Government of Iraq.
The term Government of Iraq includes:
(a) The state and the Government of Iraq, as well as any political subdivision, agency, or instrumentality thereof, including the Central Bank of Iraq;
(b) Any partnership, association, corporation, or other organization substantially owned or controlled by the foregoing;
(c) Any person to the extent that such person is, or has been, or to the extent that there is reasonable cause to believe that such person is, or has been, since the effective date, acting or purporting to act directly or indirectly on behalf of any of the foregoing; and
(d) Any other person or organization determined by the Director of the Office of Foreign Assets Control to be included within this section.

Note to §
575.306: Please refer to the appendices at the end of this chapter for listings of persons determined to fall within this definition that have been designated pursuant to this part. Section 501.807 of this chapter sets forth the procedures to be followed by persons seeking administrative reconsideration of their designation or that of a vessel as blocked, or who wish to assert that the circumstances resulting in the designation are no longer applicable.
[56 FR 2113, Jan. 18, 1991, as amended at 61 FR 32938, June 26, 1996; 62 FR 45109, Aug. 25, 1997]
§ 575.307
Government of Kuwait.
The term Government of Kuwait includes:
(a) The State and Government of Kuwait and any entity purporting to be the Government of Kuwait, as well as any political subdivision, agency, or instrumentality thereof, including the Central Bank of Kuwait;
(b) Any partnership, association, corporation, or other organization substantially owned or controlled by the foregoing;
(c) Any person to the extent that such person is or has been, or to the extent that there is reasonable cause to believe that such person is or has been, since the effective date, acting or purporting to act directly or indirectly on behalf of any of the foregoing;
(d) Any other person or organization determined by the Director or the Office of Foreign Assets Control to be included within this section.
§ 575.308
Interest.
Except as otherwise provided in this part, the term interest when used with respect to property (e.g., “an interest in property”) means an interest of any nature whatsoever, direct or indirect.
§ 575.309
Iraq; Iraqi.
The term Iraq means the country of Iraq and any territory under the jurisdiction or authority thereof, legal or illegal. The term Iraqi means pertaining to Iraq as defined in this section.
§ 575.310
Kuwait; Kuwaiti.
The term Kuwait means the country of Kuwait and any territory under the jurisdiction or authority thereof. The term Kuwaiti means pertaining to Kuwait as defined in this section.
§ 575.311
Iraqi origin.
The term goods or services of Iraqi origin includes:
(a) Goods produced, manufactured, grown, or processed within Iraq;
(b) Goods which have entered into Iraqi commerce;
(c) Services performed in Iraq or by a Iraqi national who is acting as an agent, employee, or contractor of the Government of Iraq, or of a business entity located in Iraq. Services of Iraqi origin are not imported into the United States when such services are provided in the United States by an Iraqi national employed in the United States.
§ 575.312
Iraqi person.
The term Iraqi person means an Iraqi citizen, any person organized under the laws of Iraq, or any person owned or controlled, directly or indirectly, by a Iraqi national or the Government of Iraq.
§ 575.313
License.
Except as otherwise specified, the term license means any license or authorization contained in or issued pursuant to this part.
§ 575.314
Person.
The term person means an individual, partnership, association, corporation, or other organization.
§ 575.315
Property; property interest.
The terms property and property interest include, but are not limited to, money, checks, drafts, bullion, bank deposits, savings accounts, debts, indebtedness, obligations, notes, debentures, stocks, bonds, coupons, any other financial instruments, bankers acceptances, mortgages, pledges, liens or other rights in the nature of security, warehouse receipts, bills of lading, trust receipts, bills of sale, any other evidences of title, ownership or indebtedness, letters of credit and any documents relating to any rights or obligations thereunder, powers of attorney, goods, wares, merchandise, chattels, stocks on hand, ships, goods on ships, real estate mortgages, deeds of trust, vendors sales agreements, land contracts, leaseholds, ground rents, real estate and any other interest therein, options, negotiable instruments, trade acceptances, royalties, book accounts, accounts payable, judgments, patents, trademarks or copyrights, insurance policies, safe deposit boxes and their contents, annuities, pooling agreements, services of any nature whatsoever, contracts of any nature whatsoever, and any other property, real, personal, or mixed, tangible or intangible, or interest or interests therein, present, future or contingent.
§ 575.316
Special license.
The term specific license means any license or authorization not set forth in this part but issued pursuant to this part in response to an application.
§ 575.317
Transfer.
The term transfer means any actual or purported act or transaction, whether or not evidenced by writing, and whether or not done or performed within the United States, the purpose, intent, or effect of which is to create, surrender, release, convey, transfer, or alter, directly or indirectly, any right, remedy, power, privilege, or interest with respect to any property and, without limitation upon the foregoing, shall include the making, execution, or delivery of any assignment, power, conveyance, check, declaration, deed, deed of trust, power of attorney, power of appointment, bill of sale, mortgage, receipt, agreement, contract, certificate, gift, sale, affidavit, or statement; the appointment of any agent, trustee, or fiduciary; the creation or transfer of any lien; the issuance, docketing, filing, or the levy of or under any judgment, decree, attachment, injunction, execution, or other judicial or administrative process or order, or the service of any garnishment; the acquisition of any interest of any nature whatsoever by reason of a judgment or decrease of any foreign country; the fulfillment of any condition; the exercise of any power of appointment, power of attorney, or other power; or the acquisition, disposition, transportation, importation, exportation, or withdrawal of any security.
§ 575.318
UNSC Resolution 661.
The term UNSC Resolution 661 means United Nations Security Council Resolution No. 661, adopted August 6, 1990, prohibiting certain transactions with respect to Iraq and Kuwait.
§ 575.319
United States.
The term United States means the United States, its territories and possessions, and all areas under the jurisdiction or authority thereof.
§ 575.320
U.S. financial institution.
The term U.S. financial institution means any U.S. person (including foreign branches) that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or credits, or purchasing or selling foreign exchange, securities, commodity futures or options, or procuring purchasers and sellers thereof, as principal or agent; including, but not limited to, depository institutions, banks, savings banks, trust companies, securities brokers and dealers, commodity futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, and U.S. holding companies, U.S. affiliates, or U.S. subsidiaries of any of the foregoing. This term includes those branches, offices and agencies of foreign financial institutions which are located in the United States, but not such institutions' foreign branches, offices, or agencies.
§ 575.321
United States person; U.S. person.
The term United States person or U.S. person means any United States citizen; permanent resident alien; juridical person organized under the laws of the United States or any jurisdiction within the United States, including foreign branches; or any person in the United States.
§ 575.322
United States national; U.S. national.
The term United States national or U.S. national means any United States citizen; any person who, though not a citizen of the United States, owes permanent allegiance to the United States; and any juridical person organized under the laws of the United States or any jurisdiction within the United States. This term does not include U.S. branches of persons organized under foreign law, or aliens, regardless of whether they have permanent resident status in the United States.
[56 FR 5636, Feb. 11, 1991]
§ 575.323
661 Committee.
The term 661 Committee means the Security Council Committee established by UNSC Resolution 661, and persons acting for or on behalf of the Committee under its specific delegation of authority for the relevant matter or category of activity, including the overseers appointed by the UN Secretary-General to examine and approve agreements for purchases of petroleum and petroleum products from the Government of Iraq pursuant to UNSC Resolution 986 (1995).
[61 FR 36628, July 12, 1996]
§ 575.324
UNSC Resolution 986.
The term UNSC Resolution 986 means United Nations Security Council Resolution 986, adopted April 14, 1995.
[61 FR 36628, July 12, 1996]
§ 575.325
986 Escrow Account; United Nations Iraq Account.
The term 986 Escrow Account or United Nations Iraq Account means the escrow account established by the Secretary-General of the United Nations pursuant to paragraph 7 of UNSC Resolution 986.
[61 FR 65313, Dec. 11, 1996]
§ 575.326
Executory contract.
The term executory contract means a contract which cannot be performed according to its terms until a stated condition has been fulfilled, such as a contract which requires the approval of a regulatory body before the contracting parties may begin performance.
[61 FR 36628, July 12, 1996]
§ 575.327
Memorandum of Understanding.
The term Memorandum of Understanding means the Memorandum of Understanding Between the Secretariat of the United Nations and the Government of Iraq on the Implementation of Security Council Resolution 986 (1995).
[61 FR 65313, Dec. 11, 1996]
§ 575.328
Guidelines.
The term Guidelines means the Procedures to be Employed by the Security Council Committee Established by Resolution 661 (1990) Concerning the Situation Between Iraq and Kuwait in the Discharge of its Responsibility as Required by Paragraph 12 of Security Council Resolution 986 (1995).
[61 FR 65313, Dec. 11, 1996]
§ 575.329
Areas of Iraq not controlled by the Government of Iraq.
The term areas of Iraq not controlled by the Government of Iraq means, as of January 30, 2003, the areas north of the “Green Line” and under the control of the Kurdistan Democratic Party (KDP) or the Patriotic Union of Kurdistan (PUK) in the following provinces of Iraq: Dahuk (Dohuk), Arbil (Erbil), and Sulaymaniyah (Suleimaniyah). The description of the term areas of Iraq not controlled by the Government of Iraq may be modified by the Department of State.

Note to § 575.329:
Questions on the description of this term should be addressed to the Office of Northern Gulf Affairs, Bureau of Near Eastern Affairs, Room 4241, U.S. Department of State, 2201 C Street NW., Washington, DC 20520 (Tel: (202) 647-5692). Any changes to the description of this term will be posted on the Department of State Web site at < http://www.state.gov/e/eb/ >.
[68 FR 11743, Mar. 12, 2003]
§ 575.330
Humanitarian activities, humanitarian purposes, and humanitarian support.
The terms humanitarian activities, humanitarian purposes, and humanitarian support mean, as these terms have been defined by the Department of State for relevant United Nations Security Council Resolutions on Iraq, humanitarian relief, educational, cultural, recreational, and human rights-related activities, and activities to ameliorate the effects of or to investigate war crimes. Such purposes may include preparatory activities and transactions.
[68 FR 28755, May 27, 2003]

Subpart D—Interpretations
§ 575.401
Reference to amended sections.
Except as otherwise specified, reference to any section of this part or to any regulation, ruling, order, instruction, direction, or license issued pursuant to this part shall be deemed to refer to the same as currently amended.
§ 575.402
Effect of amendment.
Any amendment, modification, or revocation of any section of this part or of any order, regulation, ruling, instruction, or license issued by or under the direction of the Director of the Office of Foreign Assets Control shall not, unless otherwise specifically provided, be deemed to affect any act done or omitted to be done, or any civil or criminal suit or proceeding commenced or pending prior to such amendment, modification, or revocation. All penalties, forfeitures, and liabilities under any such order, regulation, ruling, instruction, or license shall continue and may be enforced as if such amendment, modification, or revocation had not been made.
§ 575.403
Termination and acquisition of an interest of the Government of Iraq.
(a) Whenever a transaction licensed or authorized by or pursuant to this part results in the transfer of property (including any property interest) from the Government of Iraq, such property shall no longer be deemed to be property in which the Government of Iraq has or has had an interest unless there exists in the property another such interest, the transfer of which has not been effected pursuant to license or other authorization.
(b) Unless otherwise specifically provided in a license or authorization issued pursuant to this part, if property (including any property interest) is transferred or attempted to be transferred to the Government of Iraq, such property shall be deemed to be property in which there exists an interest of the Government of Iraq.
§ 575.404
Payments from blocked accounts to U.S. exporters and for other obligations prohibited.
No debits may be made to a blocked account to pay obligations to U.S. persons or other persons, including payment for goods, technology or services exported prior to the effective date, except as authorized pursuant to this part.
§ 575.405
Acquisition of instruments including bankers acceptances.
No U.S. person may acquire or deal in any obligation, including bankers acceptances, where the documents evidencing the obligation indicate, or the U.S. person has actual knowledge, that the underlying transaction is in violation of §§ 575.201, 575.204, or § 575.205. This interpretation does not apply to obligations arising from an underlying transaction licensed or otherwise authorized pursuant to this part.
§ 575.406
Extensions of credits or loans to Iraq.
(a) The prohibition in § 575.210 applies to the unlicensed renewal of credits or loans in existence on the effective date, whether by affirmative action or operation of law.
(b) The prohibition in § 575.210 applies to credits to loans extended in any currency.
§ 575.407
Payments in connection with certain authorized transactions.
Payments are authorized in connection with transactions authorized in or pursuant to subpart E.
§ 575.408
Offshore transactions.
(a) The prohibitions contained in §§ 575.201 and 575.206 apply to transactions by U.S. persons in locations outside the United States with respect to property in which the U.S. person knows, or has reason to know, that the Government of Iraq has or has had an interest since the effective date.
(b) Prohibited transactions include, but are not limited to, importation into locations outside the United States of, or dealings within such locations in, goods or services of Iraqi origin.
(c) Examples. (1) A U.S. person may not, within the United States or abroad, purchase, sell, finance, insure, transport, act as a broker for the sale or transport of, or otherwise deal in, Iraqi crude oil or petroleum products refined in Iraq.
(2) A U.S. person may not, within the United States or abroad, conduct transactions of any nature whatsoever with an entity that the U.S. person knows or has reason to know is an Iraqi Government entity unless the entity is licensed by the Office of Foreign Assets Control to conduct such transactions with U.S. persons.
§ 575.409
Transshipments through the United States prohibited.
(a) The prohibitions in § 575.205 apply to the importation into the United States, for transshipment or transit, of goods which are intended or destined for Iraq, or an entity operated from Iraq.
(b) The prohibitions in § 575.204 apply to the importation into the United States, for transshipment or transit, of goods of Iraqi origin which are intended or destined for third countries.
(c) Goods in which the Government of Iraq has an interest which are imported into or transshipped through the United States are blocked pursuant to § 575.201.
§ 575.410
Imports of Iraqi goods from third countries; transshipments.
Importation into the United States from third countries of goods, including refined petroleum products, containing raw materials or components of Iraqi origin is prohibited. In light of the universal prohibition in UNSC Resolution 661 on the importation of goods exported from Iraq or Kuwait after August 6, 1990, substantial transformation of Iraqi-origin goods in a third country does not exempt the third-country products from the prohibitions contained in this part.
§ 575.411
Exports to third countries; transshipments.
Exportation of goods or technology (including technical data and other information) from the United States to third countries is prohibited if the exporter knows, or has reason to know, that the goods or technology are intended for transshipment to Iraq (including passage through, or storage in, intermediate destinations). The exportation of goods and technology intended specifically for incorporation or substantial transformation into a third-country product is also prohibited if the particular product is to be used in Iraq, is being specifically manufactured to fill a Iraqi order, or if the manufacturer's sales of the particular product are predominantly to Iraq.
§ 575.412
Release of Iraqi goods from bonded warehouse or foreign trade zone.
Section 575.204 does not prohibit the release from a bonded warehouse or a foreign trade zone of goods of Iraqi origin imported into a bonded warehouse or a foreign trade zone either prior to the effective date or in a transaction authorized pursuant to this part after the effective date.

Note:
Pursuant to § 575.201, property in which the Government of Iraq has an interest may not be released unless authorized or licensed by the Office of Foreign Assets Control.
§ 575.413
Goods intended for export to Iraq.
The prohibitions contained in § 575.201 do not apply to goods manufactured, consigned, or destined for export to Iraq and not subject to § 575.517, if the Government of Iraq has never held or received title to such goods on or after the effective date, and if any payment received from the Government of Iraq with respect to such goods is placed in a blocked account in a U.S. financial institution pursuant to § 575.503. The prohibitions of § 575.205 apply to goods subject to this section.
§ 575.414
Imports of Iraqi goods and purchases of goods from Iraq.
The prohibitions contained in § 575.201 shall not apply to the importation of Iraqi-origin goods and services described in § 575.204 if the importation of such goods is permitted by an authorization or license issued pursuant to this part. However, any payments in connection with such importation are subject to the prohibitions contained in §§ 575.201 and 575.210.
§ 575.415
Setoffs prohibited.
A setoff against a blocked account, whether by a U.S. bank or other U.S. person, is a prohibited transfer under § 575.201 if effected after the effective date.
§ 575.416
Travel transactions for journalistic activity in Iraq.
(a) Section 575.207 does not prohibit travel transactions in Iraq by persons regularly employed in journalistic activity by recognized newsgathering organizations.
(b) For purposes of this part:
(1) A person is considered regularly employed as a journalist if he or she is employed in a constant or regular manner by a recognized newsgathering organization. Free-lance journalists should have an assignment from a recognized newsgathering organization requiring travel to Iraq, or be able to demonstrate that publication by a recognized newsgathering organization of a work requiring such travel is likely. The latter may be demonstrated by providing a resume listing previously-published free-lance works or copies of previously-published works.
(2) Recognized newsgathering organizations include those entities regularly and principally engaged in collecting news for publication in the public press, transmission by wire services, or broadcast by radio or television.
(c) Authorized travel transactions are limited to those incident to travel for the purpose of collecting and disseminating information for a recognized newsgathering organization, and do not include travel transactions related to any other activity in Iraq.
§ 575.417
[Reserved]
§ 575.418
Transactions incidental to a licensed transaction.
(a) Any transaction ordinarily incident to a licensed transaction and necessary to give effect thereto is also authorized, except a transaction by an unlicensed, blocked person or involving an unlicensed debit to a blocked account.
(b) Example. A license authorizing the Government of Iraq to complete a securities sale also authorizes all activities by other parties required to complete the sale, including transactions by the buyer, brokers, transfer agents, banks, etc.

Subpart E—Licenses, Authorizations, and Statements of Licensing Policy
§ 575.501
Effect of license or authorization.
(a) No license or other authorization contained in this part, or otherwise issued by or under the direction of the Director of the Office of Foreign Assets Control, shall be deemed to authorize or validate any transaction effected prior to the issuance of the license, unless specifically provided in such license or authorization.
(b) No regulation, ruling, instruction, or license authorizes any transaction prohibited under this part unless the regulation, ruling, instruction, or license is issued by the Office of Foreign Assets Control and specifically refers to this part. No regulation, ruling, instruction, or license referring to this part shall be deemed to authorize any transaction prohibited by any provision of this chapter unless the regulation, ruling, instruction or license specifically refers to such provision.
(c) Any regulation, ruling, instruction, or license authorizing any transaction otherwise prohibited under this part has the effect of removing a prohibition or prohibitions contained in Subpart B from the transaction, but only to the extent specifically stated by its terms. Unless the regulation, ruling, instruction, or license otherwise specifies, such an authorization does not create any right, duty, obligation, claim, or interest in, or with respect to, any property which would not otherwise exist under ordinary principles of law.
§ 575.502
Exclusion from licenses and authorizations.
The Director of the Office of Foreign Assets Control reserves the right to exclude any person, property, or transaction from the operation of any license, or from the privileges therein conferred, or to restrict the applicability thereof with respect to particular persons, property, transactions, or classes thereof. Such action shall be binding upon all persons receiving actual or constructive notice of such exclusion or restriction.
§ 575.503
Payments and transfers to blocked accounts in U.S. financial institutions.
(a) Any payment of funds or transfer of credit or other assets, including any payment or transfer by any U.S. person outside the United States, to a blocked account in a U.S. financial institution located in the United States in the name of the Government of Iraq is hereby authorized, including incidental foreign exchange transactions, provided that such payment or transfer shall not be made from any blocked account if such payment or transfer represents, directly or indirectly, a transfer of any interest of the Government of Iraq to any other country or person.
(b) This section authorizes transfer of the funds of a blocked demand deposit account to a blocked interest-bearing account under the same name or designation as was the demand deposit account, as required pursuant to § 575.203 or at the instruction of the depositor, at any time. If such transfer is to a blocked account in a different U.S. financial institution such transfer must be made to a blocked account in a U.S. financial institution located in the United States, and the transferee financial institution must furnish within 10 business days of the date of transfer, the notification described in paragraph (h) of this section to the Office of Foreign Assets Control, Blocked Assets Section.
(c) This section does not authorize any transfer from a blocked account within the United States to an account held outside the United States.
(d) This section does not authorize any payment or transfer to any blocked account held in a name other than that of the Government of Iraq where such government is the ultimate beneficiary of such payment or transfer.
(e) This section does not authorize any payment or transfer of credit comprising an integral part of a transaction which cannot be effected without the subsequent issuance of a further license.
(f) This section does not authorize the crediting of the proceeds of the sale of securities or other assets, held in a blocked account or a sub-account thereof, or the income derived from such securities or assets, to a blocked account or sub-account, under any name or designation which differs from the name or designation of the specific blocked account or sub-account in which such securities or assets were or are held.
(g) This section does not authorize any payment or transfer from a blocked account in a U.S. financial institution to a blocked account held under any name or designation which differs from the name or designation of the specified blocked account or sub-account from which the payment or transfer is made.

Note to § 575.503:
Please refer to § 501.603 of this chapter for mandatory reporting requirements regarding financial transfers.
[56 FR 2113, Jan. 18, 1991, as amended at 56 FR 5636, Feb. 11, 1991; 58 FR 47646, Sept. 10, 1993; 62 FR 45109, Aug. 25, 1997]
§ 575.504
[Reserved]
§ 575.505
Completion of certain transactions related to bankers acceptances authorized.
(a) Persons other than the Government of Iraq are authorized to buy, sell, and satisfy obligations with respect to bankers acceptances, and to pay under deferred payment undertakings, involving an interest of the Government of Iraq as long as the bankers acceptances were created or the deferred payment undertakings were incurred prior to the effective date.
(b) Persons other than the Government of Iraq are authorized to buy, sell, and satisfy obligations with respect to bankers acceptances, and to pay under deferred payment undertakings, involving the importation or exportation of goods to or from Iraq that do not involve an interest of the Government of Iraq as long as the bankers acceptances or the deferred payment undertakings were accepted prior to the effective date.
(c) Nothing in this section shall authorize or permit a debit to a blocked account. Specific licenses for the debiting of a blocked account may be issued on a case-by-case basis.
§ 575.506
Payment by the Government of Iraq of obligations to persons within the United States authorized.
(a) The transfer of funds after the effective date by, through, or to any U.S. financial institution or other U.S. person solely for the purpose of payment of obligations of the Government of Iraq to persons or accounts within the United States is authorized, provided that the obligation arose prior to the effective date, and the payment requires no debit to a blocked account. Property is not blocked by virtue of being transferred or received pursuant to this section.
(b) A person receiving payment under this section may distribute all or part of that payment to any person, provided that any such payment to the Government of Iraq must be to a blocked account in a U.S. financial institution.
(c) The authorization in this section is subject to the condition that written notification from the U.S. financial institution or U.S. person transferring or receiving funds is furnished to the Office of Foreign Assets Control, Blocked Assets Section, within 10 business days from the date of transfer or receipt. The notification shall provide the account number, name and address of the transferor and/or transferee U.S. financial institution or person, and the account number, name and address of the person into whose account payment is made.
§ 575.507
Certain exports to Iraq authorized.
(a) All transactions ordinarily incident to the exportation of any item, commodity, or product from the United States to or destined for Iraq are authorized if:
(1) Such exports would ordinarily be authorized under one of the following regulations administered by the Department of Commerce: 15 CFR 771.6—General license BAGGAGE (accompanied and unaccompanied baggage); 15 CFR 771.13—General license GUS (shipments to personnel and agencies of the U.S. Government); or,
(2) Such exports are for the official use of the United Nations, its personnel and agencies (excluding its relief or developmental agencies).
(b) All transactions related to exportation or reexportation not otherwise authorized in this part, are prohibited unless licensed pursuant to the procedures described in § 575.801 by the Office of Foreign Assets Control.
[56 FR 2113, Jan. 18, 1991, as amended at 56 FR 5636, Feb. 11, 1991]
§ 575.508
Import of household and personal effects from Iraq authorized.
The importation of household and personal effects of Iraqi origin, including baggage and articles for family use, of persons arriving in the United States directly or indirectly from Iraq is authorized. Articles included in such effects may be imported without limitation provided they were actually used by such persons or their family members abroad, are not intended for any other person or for sale, and are not otherwise prohibited from importation.
§ 575.509
Payments and transfers authorized for shipments of oil under contract and en route to the United States prior to the effective date.
(a) Oil of Iraqi origin or oil in which the Government of Iraq has an interest may be imported into the United States only if:
(1) Prior to the effective date, the oil was loaded for ultimate delivery to the United States on board a vessel in Iraq, Kuwait, or a third country;
(2) The oil was imported into the United States before 11:59 p.m. Eastern Daylight Time, October 1, 1990; and
(3) The bill of lading accompanying the oil was issued prior to the effective date.
(b) Any payment owed or balance not paid to or for the benefit of the Government of Iraq prior to the effective date for oil imported pursuant to paragraph (a) must be paid into a blocked account in a U.S. financial institution.
(c) Transactions conducted pursuant to this section must be reported in writing to the Office of Foreign Assets Control, Blocked Assets Section, no later than 10 days after the date of importation.

Note:
Transactions authorized by this provision have been completed prior to January 18, 1991. The text of this license is included for the convenience of the user.
§ 575.510
Payments and transfers authorized for goods and services exported to Iraq prior to the effective date.
(a) Specific licenses may be issued on a case-by-case basis to permit payment involving an irrevocable letter of credit issued or confirmed by a U.S. bank, or a letter of credit reimbursement confirmed by a U.S. bank, from a blocked account or otherwise, of amounts owed to or for the benefit of a person with respect to goods or services exported prior to the effective date directly or indirectly to Iraq or Kuwait, or to third countries for an entity operated from Iraq or Kuwait, or for the benefit of the Government of Iraq, where the license application presents evidence satisfactory to the Office of Foreign Assets Control that:
(1) The exportation occurred prior to the effective date (such evidence may include, e.g., the bill of lading, the air waybill, the purchaser's written confirmation of completed services, customs documents, and insurance documents); and
(2) If delivery or performance occurred after the effective date, due diligence was exercised to divert delivery of the goods from Iraq and to effect final delivery of the goods to a non-prohibited destination, or to prevent performance of the services.
(b) Specific license applications must also contain the following information:
(1) The name and address of any Iraqi broker, purchasing agent, or other participant in the sale of goods or services exported to Iraq; and an explanation of the facts and circumstances surrounding the entry into and execution of the transaction; and
(2) A notarized statement by the applicant certifying that no ownership interest greater than five (5) percent is held by the Government of Iraq or an Iraqi person in the beneficiary of the letters of credit, or if such interest exists, the name, address and ownership interest of the Government of Iraq entity or Iraqi person holding such interest.
(c) This section does not authorize exportation or the performance of services after the effective date pursuant to a contract entered into or partially performed prior to the effective date.
(d) Transactions conducted under specific licenses granted pursuant to this section must be reported in writing to the Office of Foreign Assets Control, Blocked Assets Section, no later than 10 days after the date of payment.
(e) Separate criteria may be applied to the issuance of licenses authorizing payment from an account of or held by a blocked U.S. bank owned or controlled by the Government of Iraq.
§ 575.511
Extensions or renewals authorized.
(a) The extension or renewal, at the request of the account party, of a letter of credit or a standby letter of credit issued or confirmed by a U.S. financial institution is authorized.
(b) Transactions conducted pursuant to this section must be reported to the Office of Foreign Assets Control, Blocked Assets Section, within 10 days after completion of the transaction.
§ 575.512
[Reserved]
575.513
Transactions related to telecommunications authorized.
All transactions of U.S. common carriers with respect to the receipt and transmission of telecommunications involving Iraq are authorized, provided that any payment owed to the Government of Iraq or persons in Iraq is paid into a blocked account in a U.S. financial institution.
§ 575.514
Transactions related to mail authorized.
All transactions by U.S. persons, including payment and transfers to common carriers, incident to the receipt or transmission of mail between the United States and Iraq are authorized, provided that mail is limited to personal communications not involving a transfer of anything of value and not exceeding 12 ounces.
§§ 575.515-575.516
[Reserved]
§ 575.517
Procedures established for export transactions initiated prior to effective date.
Goods awaiting exportation to Iraq on the effective date and seized or detained by the U.S. Customs Service on the effective date or thereafter may be released to the exporter, provided the following documents are filed with Customs officials at the port where such goods are located:
(a) A copy of the contract governing the exportation (sale or other transfer) of the goods to Iraq or, if no contract exists, a written explanation of the circumstances of exportation, including in either case a description of the manner and terms of payment received or to be received by the exporter (or other person) for, or by reason of, the exportation of the goods;
(b) An invoice, bill of lading, or other documentation fully describing the goods; and
(c) A statement by the exporter substantially in the following form:
Any amount received from or on behalf of the Government of Iraq by reason of the attempted exportation of the goods released to [name of exporter] by the U.S. Customs Service on [date], and fully described in the attached documents, has been or will be placed into a blocked account in a U.S. bank and the Office of Foreign Assets Control, Blocked Assets Section, will be immediately notified. [Name of exporter] agrees to fully indemnify the U.S. Government for any amount ultimately determined by a court of competent jurisdiction to be due or payable to or for the benefit of any person by reason of the failure of [name of exporter] to properly pay into a blocked account any amount received for the goods from or on behalf of the Government of Iraq. [Name of exporter] also agrees to waive all claims (1) against any payments received and placed into a blocked account, except as may be later authorized by law, regulations, or license, and (2) against the U.S. Government with regard to the disposition of the amounts placed into a blocked account.
The statement should be dated and signed by the exporter or by a person authorized to sign on the exporter's behalf. The Customs Service may release the goods to the exporter upon receipt of the documentation and statement described above, provided it is satisfied that all customs laws and regulations have been complied with, including the execution of such hold harmless assurances as it shall determine to be appropriate. The documentation and statement received by Customs will be forwarded to the Office of Foreign Assets Control for review and appropriate action.
§ 575.518
Certain standby letters of credit and performance bonds.
(a) Notwithstanding any other provision of law, payment into a blocked account in a U.S. financial institution by an issuing or confirming bank under a standby letter of credit in favor of a beneficiary that is the Government of Iraq or a person in Iraq is prohibited by § 575.201 and not authorized, notwithstanding the provisions of § 575.503, if:
(1) The account party is a U.S. person; and
(2)(i) A specific license has been issued pursuant to the provisions of paragraph (b) of this section, or
(ii) 10 business days have not expired after notice to the account party pursuant to paragraph (b) of this section.
(b) Whenever an issuing or confirming bank shall receive such demand for payment under such a standby letter of credit, it shall promptly notify the account party. The account party may then apply within five business days for a specific license authorizing the account party to establish a blocked account on its books in the name of the Iraqi beneficiary in the amount payable under the credit, in lieu of payment by the issuing or confirming bank into a blocked account and reimbursement therefor by the account party. Nothing in this section relieves any such bank or such account party from giving any notice of defense against payment or reimbursement that is required by applicable law.
(c) Where there is outstanding a demand for payment under a standby letter of credit, and the issuing or confirming bank has been enjoined from making payment, upon removal of the injunction, the account party may apply for a specific license for the same purpose and in the same manner as that set forth in paragraph (b) of this section. The issuing or confirming bank shall not make payment under the standby letter of credit unless:
(1) 10 business days have expired since the bank has received notice of the removal of the injunction, and
(2) A specific license issued to the account party pursuant to the provisions of this paragraph has not been presented to the bank.
(d) If necessary to assure the availability of the funds blocked, the Director of the Office of Foreign Assets Control may at any time require the payment of the amounts due under any letter of credit described in paragraph (a) of this section into a blocked account in a U.S. financial institution or the supplying of any form of security deemed necessary.
(e) Nothing in this section precludes the account party on any standby letter of credit or any other person from at any time contesting the legality of the demand from an Iraqi beneficiary or from raising any other legal defense to payment under the standby letter of credit.
(f) This section does not affect the obligation of the various parties to the instruments covered by this section if the instruments and payments thereunder are subsequently unblocked.
(g) The section does not authorize any U.S. person to reimburse a non-U.S. bank for payment to a Iraqi beneficiary under a standby letter of credit, except by payments into a blocked account in accordance with § 575.503 or paragraph (b) or (c) of this section.
(h) A person receiving a specific license under paragraph (b) or (c) of this section shall certify to the Office of Foreign Assets Control within 5 business days after receipt of that license that it has established the blocked account on its books as provided in those paragraphs. However, in appropriate cases, this time period may be extended upon application to the Office of Foreign Assets Control when the account party has filed a petition with an appropriate court seeking a judicial order barring payment by the issuing or confirming bank.
(i) For the purposes of this section:
(1) The term standby letter of credit shall mean a letter of credit securing performance of, or repayment of, any advance payments or deposits under a contract, or any similar obligation in the nature of a performance bond;
(2) The term account party shall mean the person for whose account the standby letter of credit is opened; and
(3) The term Iraqi beneficiary shall mean a beneficiary that is
(i) A person in Iraq,
(ii) An entity operated from Iraq, or
(iii) The Government of Iraq.
§ 575.519
Certain imports for diplomatic or official personnel authorized.
All transactions ordinarily incident to the importation of any goods or services into the United States destined for official or personal use by personnel employed by the diplomatic missions of the Government of Iraq to the United States and to international organizations located in the United States are authorized, not for resale, and unless the importation is otherwise prohibited by law.
§ 575.520
Donations of food to relieve human suffering authorized.
(a) Specific licenses may be issued on a case-by-case basis to permit exportation to Iraq of donated food intended to relieve human suffering.
(b) In general, specific licenses will only be granted for donations of food to be provided through the United Nations in accordance with United Nations Security Council Resolutions 661 and 666 and in cooperation with the International Committee of the Red Cross or other appropriate humanitarian agencies for distribution by them or under their supervision, or in such other manner as may be approved under United Nations Security Council Resolution 666 and any other applicable Security Council resolutions, in order to ensure that such donations reach the intended beneficiaries.
(c) Applications for specific licenses pursuant to paragraph (a) of this section shall be made in advance of the proposed exportation, and provide the following information:
(1) The nature, quantity, value, and intended use of the donated food; and
(2) The terms and conditions of distribution, including the intended method of compliance with such terms and conditions of distribution as may have been adopted by the United Nations Security Council or a duly authorized body subordinate thereto to govern the shipment of foodstuffs under applicable United Nations Security Council resolutions, including Resolutions 661 and 666.
§ 575.521
Donations of medical supplies authorized.
(a) Specific licenses may be issued on a case-by-case basis to permit exportation to Iraq of donated supplies intended strictly for medical purposes, in accordance with the provisions of United Nations Security Council Resolutions 661 and 666 and other applicable Security Council resolutions.
(b) In general, specific licenses will only be granted for the exportation of medical supplies through the International Committee of the Red Cross or other appropriate humanitarian agencies for distribution by them or under their supervision, or in such other manner as may be approved under applicable Security Council resolutions, in order to ensure that such supplies reach the intended recipient.
(c) Applications for specific licenses pursuant to paragraph (a) shall be made in advance of the proposed exportation, and provide the following information:
(1) The nature, quantity, value, and intended use of the medical supplies;
(2) The terms and conditions of distribution, including the intended method of compliance with such terms and conditions of distribution as may have been adopted by the United Nations Security Council or a duly authorized body subordinate thereto to govern the shipment of medical supplies under applicable Security Council resolutions.
§ 575.522
Executory contracts with the Government of Iraq for trade in petroleum, pipeline parts and equipment, humanitarian goods, and oil field equipment authorized.
(a) United States persons are authorized to enter into executory contracts with the Government of Iraq for the following transactions, the performance of which (including any preparatory activities, payments or deposits related to such executory contracts) is contingent upon the prior authorization of the Office of Foreign Assets Control in or pursuant to this part:
(1) The purchase and exportation from Iraq of Iraqi-origin petroleum and petroleum products;
(2) The sale and exportation to Iraq of parts and equipment that are essential for the safe operation of the Kirkuk-Yumurtalik pipeline system in Iraq;
(3) The sale and exportation to Iraq of medicines, health supplies, foodstuffs, and materials and supplies for essential civilian needs; and
(4) The sale and exportation to Iraq of oilfield parts and equipment to the extent necessary to enable Iraq to export petroleum and petroleum products in accordance with United Nations Security Council Resolutions No. 1153 and 1175 and other relevant UNSC Resolutions.
(b) United States persons are authorized to enter into executory contracts for the trading, importation, exportation, or other dealings in or related to Iraqi-origin petroleum and petroleum products outside Iraq, the performance of which is contingent upon the prior authorization of the Office of Foreign Assets Control in or pursuant to this part.
(c) The authorization contained in paragraphs (a) and (b) of this section applies only to executory contracts meeting both of the following conditions:
(1) The executory contracts, including all related financing, insurance, transportation, delivery, and other incidental contracts, are consistent with all requirements of UNSC Resolution 986, other applicable Security Council resolutions, the May 20, 1996 Memorandum of Understanding Between the Secretariat of the United Nations and the Government of Iraq on the Implementation of Security Council Resolution 986 (1995), and applicable guidance issued by the 661 Committee; and
(2) The executory contracts make any performance involving the exportation, reexportation, transfer or supply of any goods, technology or services that are subject to license application requirements of another Federal agency contingent upon the prior authorization of that agency. See § 575.101(b).
(d) Nothing in this section authorizes any transaction related to a United States person's travel to Iraq or activity within Iraq, or any debit to an account blocked pursuant to this part.
(e) Note: U.S. passports must be validated by the U.S. Department of State for travel to Iraq.
(f) Attention is drawn to the recordkeeping and retention requirements of § 575.601.
[61 FR 36628, July 12, 1996, as amended at 61 FR 65313, Dec. 11, 1996; 63 FR 62942, Nov. 10, 1998]
§ 575.523
Certain transactions in Iraqi petroleum and petroleum products.
(a) Specific licenses may be issued on a case-by-case basis to permit United States persons to purchase Iraqi-origin petroleum or petroleum products from the Government of Iraq in accordance with the provisions of UNSC Resolution 986, other relevant Security Council resolutions, the Memorandum of Understanding, and other guidance issued by the 661 Committee. Licensees will be included on the U.S. oil purchaser list to be provided to the 661 Committee, authorizing such U.S. persons to seek approval from the 661 Committee or its designee for the purchase of Iraqi-origin petroleum or petroleum products. Licensees are authorized to perform a contract approved by the 661 Committee or its designee in accordance with its terms.
(b) Applications for specific licenses pursuant to this section shall provide the following information:
(1) The applicant's full legal name;
(2) The applicant's mailing and street addresses;
(3) The name of the individual(s) responsible for the license application and related commercial transactions and the individual's telephone and facsimile numbers;
(4) If the applicant is a business entity, the state or jurisdiction of incorporation and principal place of business;
(5) Written certification that the applicant has entered into an executory contract for the purchase of Iraqi-origin petroleum or petroleum products with the Government of Iraq, that the contract accords with normal arms-length commercial practice, and that the applicant is familiar with this part, particularly §§ 575.601 and 575.602, and will make the executory contract and other documents related to the purchase of Iraqi-origin petroleum or petroleum products available to the Office of Foreign Assets Control in accordance with the requirements of this part; and
(6) Written certification that the applicant understands that issuance of a license pursuant to this section does not authorize a licensee to provide goods, services, or compensation of any kind to the Government of Iraq other than that specifically provided in contracts entered into by the applicant and the Government of Iraq and submitted to and approved by the 661 Committee or its designee.
(c) Applications for specific licenses pursuant to this section shall be submitted to the Licensing Division, Office of Foreign Assets Control, U.S. Treasury Department, 1500 Pennsylvania Avenue, NW.—Annex, Washington, DC 20220.
(d) Contracts may be performed only as specifically authorized pursuant to this section unless additional authorization is granted or obtained pursuant to this part for any amendment or modification.
(e) This section does not authorize any transfer of funds or other financial or economic resources to or for the benefit of the Government of Iraq or a person in Iraq except transfers to the 986 Escrow Account.
(f) Attention is drawn to § 575.418 regarding authorization for transactions ordinarily incident to a licensed transaction.
[61 FR 65313, Dec. 11, 1996]
§ 575.524
Exportation of pipeline parts and equipment.
(a) Specific licenses may be issued to U.S. persons on a case-by-case basis to permit the sale and exportation to Iraq of pipeline parts and equipment essential for the safe operation of the Kirkuk-Yumurtalik pipeline system in Iraq, in accordance with the provisions of UNSC Resolution 986, other applicable Security Council resolutions, the Memorandum of Understanding, and applicable guidance issued by the 661 Committee.
(b) Applications for specific licenses pursuant to this section shall be made in advance of the proposed sale and exportation, and provide the following information:
(1) Identification of the applicant, including:
(i) Applicant's full legal name;
(ii) Applicant's mailing and street addresses;
(iii) The name of the individual(s) responsible for the application and related commercial transactions and the individual's telephone and facsimile numbers; and
(iv) If the applicant is a business entity, the state or jurisdiction of incorporation and principal place of business;
(2) The name and address of all parties involved in the transactions and their role, including financial institutions and any Iraqi broker, purchasing agent, or other participant in the purchase of the pipeline parts or equipment;
(3) The nature, quantity, value and intended use of the pipeline parts and equipment;
(4) The intended point(s) of entry into Iraq, proposed dates of entry and delivery, and the final destination in Iraq of the pipeline parts and equipment;
(5) A copy of the concluded contract with the Government of Iraq and other relevant documentation, all of which must comply with the provisions of UNSC Resolution 986, other applicable Security Council resolutions, the Memorandum of Understanding, and applicable guidance issued by the 661 Committee; and
(6) A statement that the applicant is familiar with the requirements of the above-referenced documents, particularly Memorandum of Understanding paragraph 24 and Guidelines paragraphs 35 and 45, and will conform the letter of credit and related financing documents to their terms.
(c) Applications for specific licenses pursuant to this section shall be submitted to the Licensing Division, Office of Foreign Assets Control, U.S. Treasury Department, 1500 Pennsylvania Avenue, NW.—Annex, Washington, DC 20220.
(d) Attention is drawn to § 575.418 regarding authorization for transactions ordinarily incident to a transaction licensed by OFAC. Transactions of a U.S. person that are incidental to a third-country national's activities pursuant to UNSC Resolution 986 require specific OFAC licensing. Licensing requirements for the reexportation of goods subject to U.S. jurisdiction are addressed in § 575.205.
(e) Contracts may be performed only pursuant to the terms submitted to OFAC when specifically authorized pursuant to this section unless additional authorization is granted or obtained pursuant to this part for any amendment or modification of such contracts.
(f) Payment for goods exported pursuant to this section may be obtained only from the 986 Escrow Account, and must conform to the requirements of UNSC Resolution 986, other applicable Security Council resolutions, the Memorandum of Understanding, and applicable guidance issued by the 661 Committee.
(g) Attention is drawn to § 575.101 regarding compliance with other applicable laws and regulations. No license or authorization contained in or issued pursuant to this part shall be deemed to authorize the exportation, reexportation or retransfer of goods, technology, or services that are subject to unmet export license application requirements of another agency of the United States Government.
[61 FR 65314, Dec. 11, 1996]
§ 575.525
Exportation of humanitarian aid.
(a) Specific licenses may be issued to U.S. persons on a case-by-case basis to permit the sale and exportation to Iraq of medicine, health supplies, foodstuffs, and materials and supplies for essential civilian needs of the Iraqi population (“Humanitarian Aid”), in accordance with the provisions of UNSC Resolution 986, other applicable Security Council resolutions, the Memorandum of Understanding, and applicable guidance issued by the 661 Committee.
(b) Applications for specific licenses pursuant to this section shall be made in advance of the proposed sale and exportation, and provide the following information:
(1) Identification of the applicant, including:
(i) Applicant's full legal name;
(ii) Applicant's mailing and street addresses;
(iii) The name of the individual(s) responsible for the application and related commercial transactions and the individual's telephone and facsimile numbers; and
(iv) If the applicant is a business entity, the state or jurisdiction of incorporation and principal place of business.
(2) The name and address of all parties involved in the transactions and their role, including financial institutions and any Iraqi broker, purchasing agent, or other participant in the purchase of the Humanitarian Aid;
(3) The nature, quantity, value and the intended use of the Humanitarian Aid;
(4) The intended point(s) of entry into Iraq, proposed dates of entry and delivery, and the final destination in Iraq of the Humanitarian Aid;
(5) A copy of the concluded contract with the Government of Iraq or the United Nations Inter-Agency Humanitarian Programme and other relevant documentation, all of which must comply with the provisions of UNSC Resolution 986, other applicable Security Council resolutions, the Memorandum of Understanding, and applicable guidance issued by the 661 Committee; and
(6) A statement that the applicant is familiar with the requirements of UNSC Resolution 986, other applicable Security Council resolutions, the Memorandum of Understanding, and applicable guidance issued by the 661 Committee, particularly Memorandum of Understanding paragraph 24 and Guidelines paragraphs 35 and 45, and will conform the letter of credit and related financing documents to their terms.
(c) Applications for specific licenses pursuant to this section shall be submitted to the Licensing Division, Office of Foreign Assets Control, U.S. Treasury Department, 1500 Pennsylvania Avenue, NW.—Annex, Washington, DC 20220.
(d) Attention is drawn to § 575.418 regarding authorization for transactions ordinarily incident to a transaction licensed by OFAC. Transactions of a U.S. person that are incidental to a third-country national's activities pursuant to UNSC Resolution 986 require specific OFAC licensing. Licensing requirements for the reexportation of goods subject to U.S. jurisdiction are addressed in § 575.205.
(e) Contracts may be performed only pursuant to the terms submitted to OFAC when specifically authorized pursuant to this section unless additional authorization is granted or obtained pursuant to this part for any amendment or modification of such contracts.
(f) Payment for goods exported pursuant to this section may be obtained only from the 986 Escrow Account and must conform to the requirements of UNSC Resolution 986, other applicable Security Council resolutions, the Memorandum of Understanding, and applicable guidance issued by the 661 Committee.
(g) Attention is drawn to § 575.101 regarding compliance with other applicable laws and regulations. No license or authorization contained in or issued pursuant to this part shall be deemed to authorize the exportation, reexportation or retransfer of goods, technology, or services that are subject to unmet export license application requirements of another agency of the United States Government.
[61 FR 65314, Dec. 11, 1996]
§ 575.526
Dealings in and importation of certain Iraqi-origin petroleum and petroleum products authorized.
(a) United States persons are authorized to deal in, and to import into the United States, Iraqi-origin petroleum and petroleum products, the purchase and exportation from Iraq of which have been authorized by the 661 Committee or its designee and, if otherwise required pursuant to this part, by the Office of Foreign Assets Control.
(b) This section does not authorize any transfer of funds or other financial or economic resources to or for the benefit of the Government of Iraq or a person in Iraq except transfers to the 986 Escrow Account.
(c) Attention is drawn to § 575.418 regarding authorization for transactions ordinarily incident to a licensed transaction.
[61 FR 65315, Dec. 11, 1996]
§ 575.527
Registration of non-governmental organizations for humanitarian activities.
(a) Registration numbers may be issued on a case-by-case basis for the registration of nongovernmental organizations involved in humanitarian activities in areas of Iraq not controlled by the Government of Iraq, authorizing transactions by such organizations otherwise prohibited by this part, including the exportation of services, certain goods, software, or technology to areas of Iraq not controlled by the Government of Iraq and the transfer of funds to and from such areas for humanitarian purposes. Applicants for registration numbers must comply with the requirements of § 501.801(c), 31 CFR chapter V.
(b) Successful applicants for registration under this section must comply with the following conditions:
(1) No goods or technology, whether U.S. or foreign origin, of types controlled under the Department of Commerce's Export Administration Regulations for exportation or re-exportation to Iraq, controlled on the United States Munitions List, or listed on the United Nations Goods Review List may be exported or re-exported to Iraq or purchased or used locally in Iraq.
(2) Registered nongovernmental organizations shall take adequate measures to prevent any items authorized for exportation, re-exportation, or local purchase from being obtained or acquired by the Government of Iraq.
(3) U.S. financial institutions are authorized to engage in funds transfers in connection with transactions authorized pursuant to a registration issued under this section, provided that no Iraqi or Iranian financial institution or other agency or instrumentality of the Government of Iraq or the Government of Iran may participate in any such funds transfer.
(4) All transactions pursuant to a registration issued under this section must conform to all relevant United Nations Security Council Resolutions, including 661, 666, 687 and 1409, and relevant procedures issued by the 661 Committee.
(5) U.S. citizens who wish to travel to Iraq pursuant to a registration issued under this section must apply to the Department of State to have their passports validated for travel to Iraq. Such applications should be submitted to the Deputy Assistant Secretary for Passport Services, ATTN: Office of Passport Policy and Advisory Services, U.S. Department of State, 2401 E Street NW., Washington, DC 20522-0907. Such applications must include the applicant's name, date and place of birth, dates of proposed travel, and purpose of the trip. Issuance of a registration number under this section does not in any way create a presumption in favor of passport validation.
(6) Nongovernmental organizations conducting transactions authorized by their registrations pursuant to this section must reference the registration number on all payments and funds transfers and on all related documentation.
(c) This section does not authorize transfers from blocked accounts.

Note to § 575.527:
Registration does not excuse a U.S. person from compliance with other provisions of 31 CFR chapter V or with applicable U.S. laws governing the exportation or re-exportation of U.S.-origin goods, software, or technology (including technical data) to Iraq, Iran, or other countries. See, e.g., the Export Administration Regulations administered by the U.S. Department of Commerce (15 CFR chapter VII, subchapter C) and the International Traffic in Arms Regulations (22 CFR chapters 120-130) administered by the Department of State.
[68 FR 11744, Mar. 12, 2003]
§ 575.528
Authorization of certain survey or assessment missions in and around Iraq.
(a) Subject to paragraphs (b), (c), and (d) of this section, nongovernmental organizations are authorized to send representatives to Iraq for the purpose of conducting survey or assessment missions related to the planning or preparation for the provision of humanitarian support to the Iraqi people. This section does not authorize the actual provision of such humanitarian support.
(b) The authorization set forth in paragraph (a) of this section applies only to the following types of nongovernmental organizations:
(1) Nongovernmental organizations registered pursuant to § 575.527; or
(2) Nongovernmental organizations that have been issued specific licenses under this part to carry out humanitarian activities in Iraq, but not including organizations that have been issued specific licenses solely to export goods to Iraq.
(c) This section does not authorize nongovernmental organizations to open offices or to establish permanent facilities of any kind or to purchase any goods, services or technology in Iraq of any kind, except those described in paragraph (d)(3) of this section.
(d) The authorization set forth in this section is subject to the following conditions:
(1) U.S. financial institutions are authorized to engage in funds transfers in connection with transactions authorized pursuant to this section, provided that no Iraqi or Iranian financial institution or other agency or instrumentality of the Government of Iraq or Government of Iran may participate in any such funds transfer.
(2) Nongovernmental organizations conducting transactions authorized by specific license or by registration issued pursuant to § 575.527 must reference their license or registration number on all payments and funds transfers and on all related documentation.
(3) Any funds transferred to Iraq pursuant to this section may be used only for the purchase of services and goods necessary and essential to the conduct of the assessment mission and, whether U.S. or foreign origin, not of the type controlled under the Department of Commerce's Export Administration Regulations for exportation or re-exportation to Iran or Iraq or controlled on the United States Munitions List.
(4)(i) No exportations or re-exportations of goods or technology (whether U.S. or foreign origin) to Iraq are permitted pursuant to this section, except for those items intended for temporary use, as personal baggage, by mission representatives, provided that such items are either consumed by mission representatives during the visit or removed from Iraq at the end of each visit, and further provided that any such personal items regardless of origin are not of the type controlled for exportation or re-exportation to Iran or Iraq under the Department of Commerce's Export Administration Regulations, controlled on the United States Munitions List, or listed on the United Nations Goods Review List.
(ii) Nongovernmental organizations that wish to export or re-export goods or technology to Iraq, beyond personal baggage as described in paragraph (d)(4)(i) of this section, as part of a survey or assessment mission must apply for specific authorization from the Office of Foreign Assets Control pursuant to § 501.801(b), 31 CFR chapter V.
(5) Nongovernmental organizations acting under this section shall take adequate measures to prevent any items authorized for export, re-export, or local purchase from being obtained or acquired by the Government of Iraq.
(6) U.S. citizens who wish to travel to Iraq pursuant to this section must apply to the Department of State to have their passports validated for travel to Iraq. Such applications should be submitted to the Deputy Assistant Secretary for Passport Services, ATTN: Office of Passport Policy and Advisory Services, U.S. Department of State, 2401 E Street NW., Washington, DC 20522-0907. Such applications must include the applicant's name, date and place of birth, dates of proposed travel, and purpose of the trip. This section does not in any way create a presumption in favor of passport validation.
(e) This section does not authorize transfers from blocked accounts.

Note to § 575.528:
This section does not excuse a U.S. person from compliance with other provisions of 31 CFR chapter V or with applicable U.S. laws governing the exportation or re-exportation of U.S.-origin goods, software, or technology (including technical data) to Iraq, Iran, or other countries. See, e.g., the Export Administration Regulations administered by the U.S. Department of Commerce (15 CFR chapter VII, subchapter C) and the International Traffic in Arms Regulations (22 CFR chapters 120-130) administered by the Department of State.
[68 FR 11744, Mar. 12, 2003]
§ 575.529
Non-commercial funds transfers and related transactions.
(a) U.S. persons are authorized to transfer funds to any person in Iraq for non-commercial humanitarian purposes, including family remittances, provided that no U.S. person may transfer more than $500 per month to any person in Iraq.
(b) U.S. financial institutions are authorized to engage in all transactions ordinarily incident to the transfer of funds authorized by paragraph (a) of this section, including the opening of new correspondent accounts for funds transfers with Iraqi financial institutions. U.S. financial institutions may rely on originators of funds transfers with regard to compliance with this part.
(c) This section does not authorize transfers from blocked accounts.
[68 FR 28755, May 27, 2003]
§ 575.530
Activities by the U.S. Government and its contractors or grantees.
(a) Subject to the provisions of paragraph (b) of this section, U.S. government agencies and their contractors or grantees are authorized to engage in all transactions otherwise prohibited by subpart B of this part that are within the scope of their official duties or the relevant U.S. government contracts or grants.
(b)(1) The exportation from the United States or, if subject to U.S. jurisdiction, the exportation or reexportation from a third country to Iraq of any goods or technology (including technical data or other information) controlled by the Department of Commerce under the Export Administration Regulations (15 CFR chapter VII, subchapter C) for exportation to Iraq must be separately authorized by or pursuant to this part.
(2) If the contracting or granting U.S. government agency has determined that the relevant contract or grant is not in support of U.S. government humanitarian assistance or reconstruction efforts in Iraq, or not in support of U.S. or allied forces deployed in military contingency, humanitarian, or peacekeeping operations in Iraq, then the exportation or reexportation of any goods to Iraq must be submitted to the 661 Committee to the extent and in the manner required under applicable UN Security Council resolutions. If this paragraph (b)(2) applies to a proposed exportation or reexportation, the exporter or reexporter should contact the Office of Peacekeeping and Humanitarian Operations, Room 5323, U.S. Department of State, 2201 C Street NW., Washington, DC 20520 (tel 202/647-2708, fax 202/647-3261) for procedures concerning submissions to the 661 Committee.
(c) All payments and funds transfers initiated pursuant to this authorization, and all related documentation, must reference this section number.

Note 1 to § 575.530:
This authorization and the restrictions on certain exportations or reexportations extend to the activities of any subcontractors or other persons who are engaged to perform activities within the scope of the relevant contract or grant. See 31 CFR 575.418.

Note 2 to § 575.530:
U.S. citizens who wish to travel to Iraq pursuant to this authorization may be required to apply to the Department of State to have their passports validated for travel to Iraq, pursuant to 22 CFR 51.73 and 51.74 and public notices issued thereunder, including Public Notice 4283, 68 FR 8791 (February 25, 2003), as amended by Public Notice 4337, 68 FR 18722 (Apr. 16, 2003), and any subsequent public notices regarding the restriction on the use of U.S. passports for travel to, in or through Iraq. Such applications, if required, should be submitted to the Deputy Assistant Secretary for Passport Services, ATTN: Office of Passport Policy and Advisory Services, U.S. Department of State, 2401 E Street, NW., Washington, DC 20522-0907. Such applications must include the applicant's name, date and place of birth, dates of proposed travel, and purpose of the trip. This general license does not in any way create a presumption in favor of passport validation.
[68 FR 28755, May 27, 2003]
§ 575.531
Privately financed humanitarian transactions.
(a) Subject to the conditions and limitations set forth in paragraphs (b)-(e) of this section, all transactions otherwise prohibited by subpart B of this part that are necessary to provide privately financed humanitarian support, or to plan or prepare for the provision of humanitarian support, to the Iraqi people in Iraq are authorized. Transactions authorized by this section include, but are not limited to, the exportation to Iraq of goods and services necessary for the provision of humanitarian support, the financing of such humanitarian support, travel-related transactions necessary to provide humanitarian support, and related funds transfers by U.S. financial institutions.

Note to paragraph (a):
The term humanitarian support means, as this term has been defined by the Department of State for relevant United Nations Security Council Resolutions on Iraq, humanitarian relief, educational, cultural, recreational, and human rights-related activities, and activities to ameliorate the effects of or to investigate war crimes. Such purposes may include preparatory activities and transactions. See 31 CFR 575.330.
(b) The exportation from the United States or, if subject to U.S. jurisdiction, the exportation or reexportation from a third country to Iraq of any goods or technology (including technical data or other information) controlled by the Department of Commerce under the Export Administration Regulations (15 CFR chapter VII, subchapter C) for exportation to Iraq or listed on the United Nations Goods Review List must be separately authorized by or pursuant to this part.
(c) Any exportation or reexportation of goods to Iraq pursuant to this authorization must be submitted to the United Nations 661 Committee to the extent, and in the manner, required under applicable UN Security Council resolutions. For procedures concerning submissions to the 661 Committee, the exporter or reexporter should contact the Office of Peacekeeping and Humanitarian Operations, Room 5323, U.S. Department of State, 2201 C Street NW., Washington, DC 20520 (tel 202/647-2708, fax 202/647-3261).
(d) This section does not authorize any transactions with persons on the Department of Defense's 55-person Watch List.
(e) All payments and funds transfers initiated pursuant to this authorization, and all related documentation, must reference this section number.

Note to § 575.531:
U.S. citizens who wish to travel to Iraq pursuant to this authorization may be required to apply to the Department of State to have their passports validated for travel to Iraq, pursuant to 22 CFR 51.73 and 51.74 and public notices issued thereunder, including Public Notice 4283, 68 FR 8791 (February 25, 2003), as amended by Public Notice 4337, 68 FR 18722 (Apr. 16, 2003), and any subsequent public notices regarding the restriction on the use of U.S. passports for travel to, in or through Iraq. Such applications, if required, should be submitted to the Deputy Assistant Secretary for Passport Services, ATTN: Office of Passport Policy and Advisory Services, U.S. Department of State, 2401 E Street, NW., Washington, DC 20522-0907. Such applications must include the applicant's name, date and place of birth, dates of proposed travel, and purpose of the trip. This general license does not in any way create a presumption in favor of passport validation.
[68 FR 28755, May 27, 2003]
§ 575.532
Certain exports and reexports to Iraq.
The exportation from the United States or, if subject to U.S. jurisdiction, the exportation or reexportation from a third country to Iraq of any goods is authorized, provided that the exportation or reexportation of any goods or technology (including technical data or other information) controlled by the Department of Commerce under the Export Administration Regulations (15 CFR chapter VII, subchapter C) for exportation to Iraq, or listed on the United Nations Goods Review List, must be separately authorized by or pursuant to this part, and any exportation or reexportation to Iraq must be submitted to the 661 Committee to the extent and in the manner required under applicable UN Security Council resolutions. For procedures concerning submissions to the 661 Committee, the exporter or reexporter should contact the Office of Peacekeeping and Humanitarian Operations, Room 5323, U.S. Department of State, 2201 C Street NW., Washington, DC 20520 (tel 202/647-2708, fax 202/647-3261).
[68 FR 28736, May 27, 2003]
§ 575.533
Certain new transactions.
(a) New Transactions. Except as provided in paragraph (b) of this section, on or after the effective date of this section, all transactions that are otherwise prohibited by subpart B of this part are authorized.

Note to paragraph (a):
This authorization does not eliminate the need to comply with other provisions of 31 CFR chapter V or with other applicable provisions of law, including any aviation, financial, or trade requirements of agencies other than the Department of the Treasury's Office of Foreign Assets Control. Such requirements include the International Traffic in Arms Regulations (22 CFR parts 120 through 130) administered by the Department of State.
(b) Continued Blocking, Special Provisions for Certain Exports and Reexports, and Additional Conditions. (1) All property and interests in property that were blocked pursuant to subpart B of this part as of the effective date of this section remain blocked and subject to the prohibitions and requirements of this part.
(2) The exportation from the United States or, if subject to U.S. jurisdiction, the exportation or reexportation from a third country to Iraq of any goods or technology (including technical data or other information) controlled by the Department of Commerce under the Export Administration Regulations (15 CFR chapter VII, subchapter C) for exportation to Iraq must be separately authorized by or pursuant to this part.

Note to paragraph (b)(2):
The term “controlled by the Department of Commerce” means subject to a license requirement under the Department of Commerce's Export Administration Regulations (EAR). Items subject to a license requirement under the EAR include items on the Commerce Control List that are listed in 15 CFR 746.3 as requiring a license for exportation or reexportation to Iraq, as well as items and activities that require a license under the end-use and end-user provisions of 15 CFR part 744. To inquire whether particular goods or technology are controlled by the Department of Commerce under the Export Administration Regulations for exportation to Iraq, the exporter or reexporter should contact the Department of Commerce, Bureau of Industry and Security.
(3) This section does not authorize any transactions with:
(i) Persons or organizations determined by the Director of the Office of Foreign Assets Control to be included within § 575.306,
(ii) Persons on the Defense Department's 55-person Watch List, or
(iii) Persons identified by the 661 Committee pursuant to paragraphs 19 and 23 of United Nations Security Council Resolution 1483, adopted May 22, 2003.

Note to paragraph (b)(3):
Persons determined by the Director of the Office of Foreign Assets Control to be included within § 575.306 are also known as specially-designated nationals (“SDNs”) of the Government of Iraq. These persons are included in Appendix A to 31 CFR chapter V, and an up-to-date list is maintained on the Office of Foreign Assets Control's Web site at http://www.treas.gov/ofac.
(4) This section does not authorize any transactions with respect to Iraqi cultural property or other items of archaeological, historical, cultural, rare scientific, and religious importance illegally removed from the Iraq National Museum, the National Library, and other locations in Iraq since August 6, 1990. Any trade in or transfer of such items, including items with respect to which reasonable suspicion exists that they have been illegally removed, remains prohibited by subpart B of this part.

Note to paragraph (b)(4):
Questions concerning whether particular Iraqi cultural property or other items are subject to this paragraph should be directed to the Cultural Property Office, U.S. Department of State, tel. 202/619-6612, fax 202/260-4893, Web site http://www.exchanges.state.gov/culprop, email culprop@pd.state.gov.
(c) Effective Date. This section is effective May 23, 2003.
[68 FR 38189, June 27, 2003]

Subpart F—Reports
§ 575.601
Records and reports.
For provisions relating to records and reports, see subpart C of part 501 of this chapter.
[62 FR 45109, Aug. 25, 1997]

Subpart G—Penalties
§ 575.701
Penalties.
(a) Section 580E of the Iraq Sanctions Act of 1990 (Public Law 101-513, 104 Stat. 2049), as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), provides that, notwithstanding section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) and section 5(b) of the United Nations Participation Act of 1945 (22 U.S.C. 287c(b)):
(1) A civil penalty of not to exceed $275,000 per violation may be imposed on any person who, after the enactment of this Act, violates or evades or attempts to violate or evade Executive Order Number 12722, 12723, 12724, or 12725, or any license, order, or regulation issued under any such Executive Order;
(2) Whoever after the date of enactment of this Act willfully violates or evades or attempts to violate or evade Executive Order Number 12722, 12723, 12724, or 12725 or any license, order, or regulation issued under any such Executive Order—
(i) Shall, upon conviction, be fined not more than $1,000,000 if a person other than a natural person; or
(ii) If a natural person, shall, upon conviction, be fined not more than $1,000,000, be imprisoned for not more than 12 years, or both.
(3) Any officer, director, or agent of any corporation who knowingly participates in a violation, evasion, or attempt described in paragraph (a)(2) of this section may be punished by imposition of the fine, imprisonment (or both) specified in paragraph (a)(2)(ii) of this section.
(b) The criminal penalties provided in the Iraq Sanctions Act are subject to increase pursuant to 18 U.S.C. 3571.
(c) Attention is directed to the United Nations Participation Act, 22 U.S.C. 287c(b), which provides that any person who willfully violates or evades or attempts to violate or evade any order, rule, or regulation issued by the President pursuant to the authority granted in that section shall, upon conviction, be fined not more than $10,000 or, if a natural person, be imprisoned for not more than ten years, or both; and the officer, director or agent of any corporation who knowingly participates in such violation or evasion shall be punished by a similar fine, imprisonment or both, and any property, funds, securities, papers, or other articles or documents, or any vessel, together with tackle, apparel, furniture, and equipment, or vehicle, or aircraft, concerned in such violation shall be forfeited to the United States. The criminal penalties provided in the United Nations Participation Act are subject to increase pursuant to 18 U.S.C. 3571.
(d) Attention is also directed to 18 U.S.C. 1001, which provides that whoever, in any matter within the jurisdiction of any department or agency of the United States, knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statement or representation or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined under title 18, United States Code, or imprisoned not more than five years, or both.
(e) Attention is directed to 18 U.S.C. 2332d, as added by Public Law 104-132, section 321, which provides that, except as provided in regulations issued by the Secretary of the Treasury, in consultation with the Secretary of State, a U.S. person, knowing or having reasonable cause to know that a country is designated under section 6(j) of the Export Administration Act, 50 U.S.C. App. 2405, as a country supporting international terrorism, engages in a financial transaction with the government of that country, shall be fined under title 18, United States Code, or imprisoned for not more than 10 years, or both.
(f) Violations of this part may also be subject to relevant provisions of the Customs laws and other applicable laws.
[56 FR 2113, Jan. 18, 1991, as amended at 61 FR 43461, Aug. 23, 1996; 61 FR 54939, Oct. 23, 1996; 62 FR 45109, Aug. 25, 1997]
§ 575.702
Prepenalty notice.
(a) When required. If the Director of the Office of Foreign Assets Control has reasonable cause to believe that there has occurred a violation of any provision of this part or a violation of the provisions of any license, ruling, regulation, order, direction or instruction issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to this part or otherwise under the International Emergency Economic Powers Act, and the Director determines that further proceedings are warranted, he shall issue to the person concerned a notice of his intent to impose a monetary penalty. The prepenalty notice shall be issued whether or not another agency has taken any action with respect to this matter.
(b) Contents—(1) Facts of violation. The prepenalty notice shall describe the violation, specify the laws and regulations allegedly violated, and state the amount of the proposed monetary penalty.
(2) Right to make presentations. The prepenalty notice also shall inform the person of his right to make a written presentation within 30 days of mailing of the notice as to why a monetary penalty should not be imposed, or, if imposed, why it should be in a lesser amount than proposed.
§ 575.703
Presentation responding to prepenalty notice.
(a) Time within which to respond. The named person shall have 30 days from the date of mailing of the prepenalty notice to make a written presentation to the Director.
(b) Form and contents of written presentation. The written presentation need not be in any particular form, but shall contain information sufficient to indicate that it is in response to the prepenalty notice. It should contain responses to the allegations in the prepenalty notice and set forth the reasons why the person believes the penalty should not be imposed or, if imposed, why it should be in a lesser amount than proposed.
§ 575.704
Penalty notice.
(a) No violation. If, after considering and presentations made in response to the prepenalty notice and any relevant facts, the Director determines that there was no violation by the person named in the prepenalty notice, he promptly shall notify the person in writing of the determination and that no monetary penalty will be imposed.
(b) Violation. If, after considering any presentations made in response to the prepenalty notice, the Director determines that there was a violation by the person named in the prepenalty notice, he promptly shall issue a written notice of the imposition of the monetary penalty to that person.
§ 575.705
Referral to United States Department of Justice.
In the event that the person named does not pay the penalty imposed pursuant to this subpart or make payment arrangements acceptable to the Director within 30 days of the mailing of the written notice of the imposition of the penalty, the matter shall be referred to the United States Department of Justice for appropriate action to recover the penalty in a civil suit in a Federal district court.

Subpart H—Procedures
§ 575.801
Procedures.
For license application procedures and procedures relating to amendments, modifications, or revocations of licenses; administrative decisions; rulemaking; and requests for documents pursuant to the Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see subpart D of part 501 of this chapter.
[62 FR 45109, Aug. 25, 1997]
§ 575.802
Delegation by the Secretary of the Treasury.
Any action which the Secretary of the Treasury is authorized to take pursuant to Executive Order No. 12723 and Executive Order No. 12725 may be taken by the Director, Office of Foreign Assets Control, or by any other person to whom the Secretary of the Treasury has delegated authority so to act.
[56 FR 2113, Jan. 18, 1991. Redesignated at 62 FR 45109, Aug. 25, 1997]

Subpart I—Paperwork Reduction Act
§ 575.901
Paperwork Reduction Act notice.
For approval by the Office of Management and Budget (“OMB”) under the Paperwork Reduction Act of information collections relating to recordkeeping and reporting requirements, to licensing procedures (including those pursuant to statements of licensing policy), and to other procedures, see § 501.901 of this chapter. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.
[62 FR 45110, Aug. 25, 1997]