[Federal Register Volume 59, Number 194 (Friday, October 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-24772]


[[Page Unknown]]

[Federal Register: October 7, 1994]


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DEPARTMENT OF DEFENSE

48 CFR Parts 209 and 252

 

Defense Federal Acquisition Regulation Supplement; Terrorist 
Countries

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: The Director of Defense Procurement has issued an interim rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to require offerors and contractors to report commercial transactions 
they have conducted with the government of a terrorist country.

DATES: Effective date: September 29, 1994.
    Comment date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before December 6, 1994, to be 
considered in the formulation of the final rule.

ADDRESSES: Interested parties should submit written comments to: 
Defense Acquisition Regulations Council, Attn: Ms. Michele Peterson, 
PDUSD (A&T)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 
20301-3062. Telefax number (703) 604-5971. Please cite DFARS Case 93-
D319 in all correspondence related to this issue.

FOR FURTHER INFORMATION CONTACT:
Ms. Michele Peterson, (703) 604-5929.

SUPPLEMENTARY INFORMATION:

A. Background

    Section 843 of the National Defense Authorization Act for Fiscal 
Year 1994 (Public Law 103-160) requires offerors and contractors under 
DoD solicitations and contracts exceeding $5,000,000 to report 
commercial transactions conducted with the Government of a terrorist 
country. This interim rule adds new language to DFARS Subpart 209.1, a 
new provision at 252.209-7003, and a new clause at 252.209-7004 to 
implement the requirements of Section 843 of Public Law 103-160. The 
rule also revises the provision at 252.209-7001 for consistency with 
the terminology used in the new provision and clause.

B. Regulatory Flexibility Act

    The proposed rule is not expected to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule 
only applies to contracts exceeding $5,000,000. An initial regulatory 
flexibility analysis has therefore not been performed. Comments are 
invited from small businesses and other interested parties. Comments 
from small entities concerning the affected subparts will be considered 
in accordance with Section 610 of the Act. Such comments must be 
submitted separately and cite DFARS Case 93-D319 in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act applies. A request for approval of the 
information collection requirement has been sent to the Office of 
Management and Budget.

List of Subjects in 48 CFR Parts 209 and 252

    Government procurement.
Claudia L. Naugle,
Deputy Director, Defense Acquisition Regulations Council.

    Therefore, CFR Parts 209 and 252 are amended as follows:
    1. The authority citation for 48 CFR Parts 209 and 252 continues to 
read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 209--CONTRACTOR QUALIFICATIONS

    2. Section 209.104-1 is amended by revising the title of paragraph 
(g)(i) and adding paragraph (g)(iii) to read as follows:


209.104-1  General standards.

* * * * *
    (g) (i) Ownership or control by the government of a terrorist 
country * * *
* * * * *
    (iii) Commercial transactions with the government of a terrorist 
country.
    (A) In accordance with Section 843 of the National Defense 
Authorization Act for Fiscal Year 1994 (Public Law 103-160)--
    (1) Each offeror submitting an offer exceeding $5,000,000 must 
disclose each commercial transaction that it has conducted with the 
government of a terrorist country since February 28, 1994; and
    (2) For each contract exceeding $5,000,000, the contractor must 
annually report each commercial transaction that it conducts during the 
course of the contract (but not beyond September 30, 1996) with the 
government of a terrorist country.
    (B) Upon award of a contract exceeding $5,000,000 to an offeror 
disclosing that it has conducted commercial transactions with the 
government of a terrorist country, the contracting officer shall--
    (1) Forward a copy of the offeror's disclosure to the Deputy 
Director of Defense Procurement (Foreign Contracting); and
    (2) Include with the disclosure the following information:
    (i) Offeror's name and address;
    (ii) Contracting officer's name and telephone number; and
    (iii) Contract number and award date.
    3. Section 209.104-70 is amended by revising the title and 
paragraph (a) and adding paragraphs (c) and (d) to read as follows:


209.104-70  Solicitation provisions and contract clause.

    (a) Use the provision at 252.209-7001, Disclosure of Ownership or 
Control by the Government of a Terrorist Country, in all solicitations 
expected to result in contracts of $100,000 or more.
* * * * *
    (c) Use the provision at 252.209-7003, Disclosure of Commercial 
Transactions with the Government of a Terrorist Country, in all 
solicitations expected to result in contracts exceeding $5,000,000.
    (d) Use the clause at 252.209-7004, Reporting of Commercial 
Transactions with the Government of a Terrorist Country, in all 
solicitations that include the provision at 252.209-7003, and in all 
contracts exceeding $5,000,000.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    4. Section 252.209-7001 is revised to read as follows:


252.209-7001  Disclosure of ownership or control by the government of a 
terrorist country.

    As prescribed in 209.104-70(a), use the following provision:

Disclosure of Ownership or Control by the Government of a Terrorist 
Country (Sep 1994)

    (a) Definitions.
    As used in this provision--
    (1) ``Government of a terrorist country'' includes the state and 
the government of a terrorist country, as well as any political 
subdivision, agency, or instrumentality thereof.
    (2) ``Terrorist country'' means a country determined by the 
Secretary of State, under section 6(j)(1)(A) of the Export 
Administration Act of 1979 (50 U.S.C. App. 2405(j)(i)(A)), to be a 
country the government of which has repeatedly provided support for 
acts of international terrorism. As of the date of this provision, 
terrorist countries include: Cuba, Iran, Iraq, Libya, North Korea, 
Sudan, and Syria.
    (3) ``Significant interest'' means--
    (i) Ownership of or beneficial interest in 5 percent or more of 
the firm's or subsidiary's securities. Beneficial interest includes 
holding 5 percent or more of any class of the firm's securities in 
``nominee shares,'' ``street names,'' or some other method of 
holding securities that does not disclose the beneficial owner;
    (ii) Holding a management position in the firm, such as a 
director or officer;
    (iii) Ability to control or influence the election, appointment, 
or tenure of directors or officers in the firm;
    (iv) Ownership of 10 percent or more of the assets of a firm 
such as equipment, buildings, real estate, or other tangible assets 
of the firm; or
    (v) Holding 50 percent or more of the indebtedness of a firm.
    (b) Prohibition on award.
    In accordance with 10 U.S.C. 2327, no contract may be awarded to 
a firm or a subsidiary of a firm if the government of a terrorist 
country has a significant interest in the firm or subsidiary, unless 
a waiver is granted by the Secretary of Defense.
    (c) Disclosure.
    If the government of a terrorist country has a significant 
interest in the Offeror or a subsidiary of the Offeror, the Offeror 
shall disclose such interest in an attachment to its offer. If the 
Offeror is a subsidiary, it shall also disclose any significant 
interest the government of a terrorist country has in any firm that 
owns or controls the subsidiary. The disclosure shall include--
    (1) Identification of each government holding a significant 
interest; and
    (2) A description of the significant interest held by each 
government.

(End of provision)

    5. Sections 252.209-7003 and 252.209-7004 are added to read as 
follows:


252.209-7003  Disclosure of Commercial Transactions with the Government 
of a Terrorist Country.

    As prescribed in 209.104-70(c), use the following provision:

Disclosure of Commercial Transactions With the Government of a 
Terrorist Country (Sep 1994)

    (a) Definitions.
    Government of a terrorist country and terrorist country are 
defined in the Reporting of Commercial Transactions with the 
Government of a Terrorist Country clause of this solicitation.
    (b) Disclosure.
    (1) Section 843 of the National Defense Authorization Act for 
Fiscal Year 1994 (Pub. L. 103-160) requires offerors to disclose 
commercial transactions conducted with the government of a terrorist 
country. If this offer exceeds $5,000,000, and if the Offeror has 
conducted such transactions, the Offeror shall disclose, in an 
attachment to its offer, each commercial transaction that it has 
conducted with the government of a terrorist country since February 
28, 1994. The disclosure shall include--
    (i) Identification of the government with which each transaction 
was conducted; and
    (ii) The nature of each transaction.
    (2) This disclosure requirement does not apply to--
    (i) Transactions conducted by affiliates or subsidiaries of the 
Offeror; or
    (ii) Payment or receipt of payment of a judgment or award 
ordered by a court or arbitral tribunal of competent jurisdiction.

(End of provision)


252.209-7004  Reporting of Commercial Transactions with the Government 
of a Terrorist Country.

    As prescribed in 209.104-70(d), use the following clause:

Reporting of Commercial Transactions With the Government of a Terrorist 
Country (Sep 1994)

    (a) Definitions.
    As used in this clause--
    (1) Government of a terrorist country includes the state and the 
government of a terrorist country, as well as any political 
subdivision, agency, or instrumentality thereof.
    (2) Terrorist country means a country determined by the 
Secretary of State, under section 6(j)(1)(A) of the Export 
Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)(A)), as of 60 
days before the contract award date, to be a country the government 
of which has repeatedly provided support for acts of international 
terrorism. As of the date of this clause, terrorist countries 
include: Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria.
    (b) Reporting.
    (1) In accordance with section 843 of the National Defense 
Authorization Act for Fiscal Year 1994 (Pub. L. 103-160), if this 
contract exceeds $5,000,000, the Contractor shall report each 
commercial transaction that it conducts with the government of a 
terrorist country during the period of performance of this contract 
(but not beyond September 30, 1996).
    (2) This reporting requirement does not apply to--
    (i) Transactions conducted by affiliates or subsidiaries of the 
Contractor; or
    (ii) Payment of receipt of payment of a judgment or award 
ordered by a court or arbitral tribunal of competent jurisdiction.
    (3) The Contractor shall submit reports in the following format:

Title of Report: Report of Commercial Transactions with the 
Government of a Terrorist Country
Date of Report:
Contract Number:
Contractor's Name and Address:
Name and Telephone Number of Individual Submitting Report:
Commercial Transactions with the Government of a Terrorist Country:

Country

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Nature of Commercial Transaction

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    (4) The Contractor shall submit reports annually by September 
30, but not beyond September 30, 1996. Each report shall include 
transactions conducted during the preceding one-year period of 
contract performance.
    (5) The Contractor shall submit reports to: Deputy Director of 
Defense Procurement (Foreign Contracting), PDUSD (A&T) DP (FC), 
Washington, DC 20301-3060.

(End of clause)

[FR Doc. 94-24772 Filed 10-6-94; 8:45 am]
BILLING CODE 5000-04-M