[Federal Register Volume 60, Number 126 (Friday, June 30, 1995)]
[Rules and Regulations]
[Pages 34143-34144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16123]



-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control

31 CFR Part 505


Regulations Prohibiting Transactions Involving the Shipment of 
Certain Merchandise Between Foreign Countries; Partial Lifting of 
Restrictions

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule; amendments.

-----------------------------------------------------------------------

SUMMARY: The Treasury Department is lifting prospectively prohibitions 
set forth in the Transaction Control Regulations as they relate to 
offshore trade in strategic goods of the types controlled for 
exportation from the United States for national security reasons under 
the Export Administration Act of 1979. Offshore transactions in items 
of the types controlled for exportation under the Arms Export Control 
Act of 1976 or the Atomic Energy Act of 1954 remain subject to the 
prohibitions.

EFFECTIVE DATE: June 27, 1995.

FOR FURTHER INFORMATION CONTACT: Steven I. Pinter, Chief of Licensing 
(tel.: 202/622-2480), or William B. Hoffman, Chief Counsel (tel.: 202/
622-2410), Office of Foreign Assets Control, Department of the 
Treasury, Washington, D.C. 20220.

SUPPLEMENTARY INFORMATION:

Electronic Availability

    This document is available as an electronic file on The Federal 
Bulletin Board the day of publication in the Federal Register. By modem 
dial 202/512-1387 and type ``/GO/FAC'' or call 202/512-1530 for disks 
or paper copies. This file is available for downloading in WordPerfect 
5.1, ASCII, and Postscript formats. The document is also accessible for 
downloading in ASCII format without charge from Treasury's Electronic 
Library (``TEL'') in the ``Business, Trade and Labor Mall'' of the 
FedWorld bulletin board. By modem dial 703/321-3339, and select self-
expanding file ``T11FR00.EXE'' in TEL. For Internet access, use one of 
the following protocols: Telnet = fedworld.gov (192.239.93.3); World 
Wide Web (Home Page) = http://www.fedworld.gov; FTP = ftp.fedworld.gov 
(192.239.92.205).

Background

    On April 4, 1994, the Department of Commerce amended the Export 
Administration Regulations, 31 CFR parts 768-799 (1994) (the ``EAR''), 
to reflect the termination of the Cold War regime known as The 
Coordinating Committee for Multilateral Export Controls (``COCOM'') on 
March 31, 1994. The exportation of many dual-use items to civil end-
users in the former Soviet Bloc and China was authorized by a new 
General License GLX. In light of these developments, the Office of 
Foreign Assets Control is amending the Transaction Control Regulations, 
31 CFR part 505 (the ``TCR''), that prohibit ``persons within the 
United States'' (U.S. firms and residents and foreign firms owned or 
controlled by them) from involvement in offshore strategic exports from 
third countries to certain Communist and formerly Communist countries 
listed on a schedule in Sec. 505.10.
    Section 505.10 is amended by removing prohibitions pertaining to 
transactions in items that, were they of U.S. origin, would be 
restricted for exportation from the United States for national security 
reasons, as listed on the Commodity Control List in supplement no. 1 to 
part 799 of the EAR. Persons within the United States remain subject to 
the prohibitions in the TCR as they relate to offshore trade in items 
of the types controlled for exportation from the United States under 
the Arms Export Control Act of 1976, 22 U.S.C. 2778, or the Atomic 
Energy Act of 1954, 42 U.S.C. 2011-2297g-4. Any person within the 
United States who sells or purchases, or arranges the purchase, sale or 
financing of these items from a third country to a designated country 
must be covered by a general or specific license from the Office of 
Foreign Assets Control authorizing the transaction. This final rule 
does not affect enforcement actions with respect to prior violations of 
this part.
    Because the TCR involve a foreign affairs function, Executive Order 
12866 and the provisions of the Administrative Procedure Act, 5 U.S.C. 
553, requiring notice of proposed rulemaking, opportunity for public 
participation, and delay in effective date, are inapplicable. Because 
no notice of proposed rulemaking is required for this rule, the 
Regulatory Flexibility Act, 5 U.S.C. 601-612, does not apply.

List of Subjects in 31 CFR Part 505

    Administrative practice and procedure, Banks, banking, COCOM, 
Communist countries, Exports, Finance, Foreign trade, Penalties, 
Reporting and recordkeeping requirements.
    For the reasons set forth in the preamble, 31 CFR part 505 is 
amended as set forth below:


[[Page 34144]]


PART 505--REGULATIONS PROHIBITING TRANSACTIONS INVOLVING THE 
SHIPMENT OF CERTAIN MERCHANDISE BETWEEN FOREIGN COUNTRIES

    1. The authority citation for part 505 is revised to read as 
follows:
    Authority: 50 U.S.C. App. 1-44; E.O. 9193, 7 FR 5205, 3 CFR, 
1938-1943 Comp., p. 1174; E.O. 9989, 13 FR 4891, 3 CFR, 1943-1948 
Comp., p. 748.

    2. Paragraph (b), preceding the ``Schedule,'' of Sec. 505.10 is 
revised to read as follows:


Sec. 505.10  Prohibitions.

* * * * *
    (b) The merchandise is of a type the unauthorized exportation of 
which from the United States is prohibited by regulations issued under 
the Arms Export Control Act of 1976, 22 U.S.C. 2778, or the Atomic 
Energy Act of 1954, 42 U.S.C. 2011-2297g-4, or successor acts 
restricting the exportation of strategic goods.
* * * * *
    3. Paragraphs (a) introductory text and (a)(1) of Sec. 505.31 are 
revised to read as follows:


Sec. 505.31  General license for offshore transactions from certain 
countries.

    (a) Except as provided in paragraph (b) of this section, all 
transactions prohibited by Sec. 505.10 are hereby authorized provided:
    (1) Shipment is to a country listed in the schedule to Sec. 505.10, 
other than North Korea; and
* * * * *

    Dated: June 14, 1995.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: June 16, 1995.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 95-16123 Filed 6-27-95; 4:26 pm]
BILLING CODE 4810-25-F