[Federal Register Volume 60, Number 175 (Monday, September 11, 1995)]
[Rules and Regulations]
[Pages 47061-47074]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22387]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 560
Iranian Transactions Regulations; Implementation of Executive
Orders 12957 and 12959
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule; amendments.
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SUMMARY: The Office of Foreign Assets Control of the U.S. Department of
the Treasury is amending the Iranian Transactions Regulations to
implement the President's declaration of national emergency and
imposition of sanctions against Iran.
EFFECTIVE DATE: September 6, 1995.
FOR FURTHER INFORMATION CONTACT: Regarding the issuance of licenses,
Steven I. Pinter, Chief, Licensing Division (tel.: 202/622-2480);
regarding banking and compliance questions, Dennis P. Wood, Chief,
Compliance Programs Division (tel.: 202/622-2490); regarding Iranian
government entities, J. Robert McBrien, Chief, International Programs
Division (tel.: 202/622-2420); regarding legal questions, 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
[[Page 47062]]
202/515-1530 for disks or paper copies. This file is available in
WordPerfect 5.1, ASCII, and Adobe AcrobatTM readable (*.PDF)
formats.
Background
In Executive Order 12613 of October 29, 1987 (3 CFR, 1987 Comp., p.
256, 52 FR 41940), President Reagan imposed import sanctions against
Iran, invoking the authority, inter alia, of section 505 of the
International Security and Development Cooperation Act of 1985, 22
U.S.C. 2349aa-9 (``ISDCA''). In Executive Order 12957 of March 15, 1995
(60 FR 14615, March 17, 1995), President Clinton declared a national
emergency with respect to the actions and policies of the Government of
Iran and imposed additional sanctions against Iran, invoking the
authority, inter alia, of the International Emergency Economic Powers
Act, 50 U.S.C. 1701-06 (``IEEPA''). The President substantially
supplemented and amended the sanctions in those orders in Executive
Order 12959 of May 6, 1995 (60 FR 24757, May 9, 1995), invoking the
authority, inter alia, of IEEPA and ISDCA. In the Executive orders, the
President authorized the Secretary of the Treasury, in consultation
with the Secretary of State, to take such actions, including the
promulgation of rules and regulations, as might be necessary to carry
out the purposes of those orders. In implementation of these orders,
the Office of Foreign Assets Control is amending in their entirety the
Iranian Transactions Regulations (as amended, the ``Regulations'').
The Regulations continue the prohibitions previously contained in
31 CFR part 560 concerning the importation into the United States, or
the financing of such importation, of any goods or services of Iranian
origin. The Regulations also expand the prohibitions to (a) the
exportation from the United States to Iran or the Government of Iran,
or the financing of such exportation, of any goods, technology, or
services; (b) the reexportation to Iran of certain goods and technology
of U.S. origin; (c) any transaction by a United States person relating
to goods or services of Iranian origin or owned or controlled by the
Government of Iran; (d) any new investment by a United States person in
Iran or in property owned or controlled by the Government of Iran; (e)
the approval or facilitation by a United States person of the entry
into or performance by a foreign entity owned or controlled by a United
States person of a transaction or contract if the United States person
is prohibited from engaging directly in such activity; and (f) any
transaction by any United States person or within the United States
that evades or avoids, or attempts to violate, these prohibitions.
All General Licenses and General Notices issued by the Office of
Foreign Assets Control prior to September 11, 1995 (see 60 FR 40881,
Aug. 10, 1995), may continue to be relied on to validate actions prior
to this date during the period of their validity. Specific licenses
issued by OFAC prior to this date continue in effect according to their
terms unless modified by the Office of Foreign Assets Control.
Authorizations contained in General Licenses issued prior to
publication of the Regulations can now be found in the following
sections.
------------------------------------------------------------------------
General License No. Date of Issuance Regulations Section
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1................... 05/19/95 560.515
2................... 06/01/95 560.516
3................... 06/01/95 560.517
4................... 06/13/95 560.518, 560.524
5................... 06/14/95 560.210, 560.523
6................... 06/14/95 560.521
7................... 06/14/95 560.519
8................... 06/14/95 560.520
9................... 06/14/95 560.512
10.................. 06/14/95 560.510
11.................. 07/21/95 560.524
12.................. 07/21/95 560.525
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Transactions otherwise prohibited by this part may be authorized by
a general license contained in subpart E or by a specific license
issued pursuant to the procedures described in Sec. 560.801 of subpart
H.
The following sections contained in part 560 are removed and
reserved and are no longer in force: Secs. 560.202, 560.302, 560.309,
560.403, 560.404, 560.405, 560.409, 560.503, 560.504, 560.511, and
560.514.
Because the Regulations 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. Wherever possible, however, it is the practice of the Office of
Foreign Assets Control to receive written submissions or hold informal
consultations with interested parties concerning any rule or other
public document.
The collection of information requirements contained in Secs.
560.601, 560.602, and 560.801 have been previously approved by the
Office of Management and Budget (``OMB'') and assigned control number
1505-0106. Because the Regulations are being issued without prior
notice and public procedures pursuant to the Administrative Procedure
Act, the collection of information requirements contained in
Secs. 560.603 and 560.704 are being submitted to OMB under the
Paperwork Reduction Act of 1980, 44 U.S.C. 3501-3520. Comments
concerning the collection of information and the accuracy of estimated
average annual burden, and suggestions for reducing this burden should
be directed to OMB, Paperwork Reduction Project (1505--0106),
Washington, DC 20503, with copies to the Office of Foreign Assets
Control, Department of the Treasury, 1500 Pennsylvania Ave., N.W.--
Annex, Washington, DC 20220. Notice of OMB action on these requests
will be published in the Federal Register.
This collection of information is required by the Office of Foreign
Assets Control for licensing, compliance, civil penalty, and
enforcement purposes. This information will be used to determine the
eligibility of applicants for the benefits provided through specific
licenses, to determine whether persons subject to the Regulations are
in compliance with applicable requirements, and to determine whether
and to what extent civil penalty or other enforcement action is
appropriate. The likely respondents and recordkeepers are individuals
and business organizations.
Estimated total annual reporting and/or recordkeeping burden: 1000
hours.
The estimated annual burden per respondent/recordkeeper varies from
30 minutes to ten hours, depending on the individual circumstances,
with an estimated average of 2 hours.
Estimated number of respondents and/or recordkeepers: 500.
Estimated annual frequency of responses: 1 to 4.
List of Subjects in 31 CFR Part 560
Administrative practice and procedure, Agricultural commodities,
Banking and finance, Exports, Foreign trade, Imports, Information,
Investments, Iran, Loans, Penalties, Reporting and recordkeeping
requirements, Services, Specially designated nationals, Transportation.
For the reasons set forth in the preamble, 31 CFR part 560 is
revised to read as follows:
[[Page 47063]]
PART 560--IRANIAN TRANSACTIONS REGULATIONS
Authority: 50 U.S.C. 1701-1706; 50 U.S.C. 1601-1651; 22 U.S.C.
2349aa-9; 3 U.S.C. 301; E.O. 12613, 52 FR 41940, 3 CFR, 1987 Comp.,
p. 256; E.O. 12957, 60 FR 14615, March 17, 1995; E.O. 12959, 60 FR
24757, May 9, 1995.
Subpart A--Relation of This Part to Other Laws and Regulations
Sec.
560.101 Relation of this part to other laws and regulations.
Subpart B--Prohibitions
560.201 Prohibited importation of goods and services from Iran.
560.202 [Reserved]
560.203 Evasions; attempts.
560.204 Prohibited exportation of goods, technology, and services to
Iran.
560.205 Prohibited reexportation of goods and technology to Iran.
560.206 Prohibited transactions related to Iranian-origin goods or
services.
560.207 Prohibited investment.
560.208 Prohibited approval or facilitation.
560.209 Prohibited transactions with respect to the development of
Iranian petroleum resources.
560.210 Exempt transactions.
Subpart C--General Definitions
560.301 Effective date.
560.302 [Reserved]
560.303 Iran; Iranian.
560.304 Government of Iran.
560.305 Person; entity.
560.306 Iranian-origin goods and services.
560.307 United States.
560.308 Importation.
560.309 [Reserved]
560.310 License.
560.311 General license.
560.312 Specific license.
560.313 Entity owned or controlled by the Government of Iran.
560.314 United States person.
560.315 Information or informational materials.
560.516 New investment.
560.317 Credits or loans.
560.318 Technology.
560.319 United States depository institution.
560.320 Iranian accounts.
Subpart D--Interpretations
560.401 Reference to amended sections.
560.402 Effect of amendment.
560.403 [Reserved]
560.404 [Reserved]
560.405 [Reserved]
560.406 Transshipments prohibited.
560.407 Transactions related to Iranian-origin goods.
560.408 Importation into and release from a bonded warehouse or
foreign trade zone.
560.409 [Reserved]
560.410 Exportation of services.
560.411 Offshore transactions in Iranian-origin goods and services.
560.412 Extensions of credits or loans to Iran.
560.413 Letter of credit payments by Iranian banks in the United
States.
560.414 Exports to third countries; reexports.
Subpart E--Licenses, Authorizations and Statements of Licensing Policy
560.501 Effect of license or authorization.
560.502 Exclusion from licenses and authorizations.
560.503 [Reserved]
560.504 [Reserved]
560.505 Certain services relating to participation in various events
authorized.
560.506 Importation and exportation of certain gifts authorized.
560.507 Accompanied baggage authorized.
560.508 Telecommunications and mail transactions authorized.
560.509 Certain transactions related to patents, trademarks and
copyrights authorized.
560.510 Transactions related to the resolution of disputes between
the United States or United States nationals and the Government of
Iran.
560.511 [Reserved]
560.512 Iranian Government missions in the United States.
560.513 Importation of Iranian-origin oil.
560.514 [Reserved]
560.515 30-day delayed effective date for pre-May 7, 1995 trade
contracts involving Iran.
560.516 Payment and United States dollar clearing transactions
involving Iran.
560.517 Exportation of services: Iranian accounts at United States
depository institutions.
560.518 Transactions in Iranian-origin and Iranian Government
property.
560.519 Policy governing news organization offices.
560.520 Exportation of agricultural commodities.
560.521 Diplomatic pouches.
560.522 Allowable payments for overflights of Iranian airspace.
560.523 Importation of information and informational materials.
560.524 Household goods and personal effects.
560.525 Exportation of certain legal services.
560.526 Commodities trading and related transactions.
560.527 Rescheduling existing loans.
560.528 Aircraft safety.
Subpart F--Reports
560.601 Required records.
560.602 Reports to be furnished on demand.
560.603 Reports on oil transactions engaged in by foreign
affiliates.
Subpart G--Penalties
560.701 Penalties.
560.702 Detention of shipments.
560.703 Prepenalty notice.
560.704 Presentation responding to prepenalty notice.
560.705 Penalty notice.
560.706 Referral for administrative collection measures or to United
States Department of Justice.
Subpart H--Procedures
560.801 Licensing.
560.802 Decisions.
560.803 Amendment, modification, or revocation.
560.804 Rulemaking.
560.805 Delegation by the Secretary of the Treasury.
560.806 Customs procedures: Goods specified in Sec. 560.201.
560.807 Rules governing availability of information.
Subpart I--Paperwork Reduction Act
560.901 Paperwork Reduction Act notice.
Subpart A--Relation of This Part to Other Laws and Regulations
Sec. 560.101 Relation of this part to other laws and regulations.
(a) This part is separate from, and independent of, the other parts
of this chapter, including part 535, ``Iranian Assets Control
Regulations.'' 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 regulations 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.
Subpart B--Prohibitions
Sec. 560.201 Prohibited importation of goods and services from Iran.
Except as otherwise authorized, and notwithstanding any contract
entered into or any license or permit granted prior to May 7, 1995, the
importation into the United States, or the financing of such
importation, of any goods or services of Iranian origin, other than
Iranian-origin publications and materials imported for news
publications or news broadcast dissemination, is prohibited.
Sec. 560.202 [Reserved]
Sec. 560.203 Evasions; attempts.
Any transaction by any United States person or within the United
States that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions contained in
this part is hereby prohibited.
Sec. 560.204 Prohibited exportation of goods, technology, and services
to Iran.
Except as otherwise authorized, and notwithstanding any contract
entered into or any license or permit granted prior to May 7, 1995, the
exportation from the United States to Iran or the Government of Iran,
or the financing of such exportation, of any goods, technology, or
services is prohibited.
[[Page 47064]]
Sec. 560.205 Prohibited reexportation of goods and technology to Iran.
Except as otherwise authorized, and notwithstanding any contract
entered into or any license or permit granted prior to May 7, 1995, the
reexportation to Iran or the Government of Iran of any goods or
technology exported from the United States, the exportation of which to
Iran was subject to export license application requirements under any
United States regulations in effect immediately prior to May 6, 1995,
is prohibited, unless the reexportation is of goods that have been
substantially transformed outside the United States, or incorporated
into another product outside the United States and constitute less than
10 percent by value of that product exported from a third country.
Sec. 560.206 Prohibited transactions related to Iranian-origin goods
or services.
Except as otherwise authorized, and notwithstanding any contract
entered into or any license or permit granted prior to May 7, 1995, any
transaction, including purchase, sale, transportation, swap, financing,
or brokering transactions, by a United States person relating to goods
or services of Iranian origin or owned or controlled by the Government
of Iran is prohibited.
Sec. 560.207 Prohibited investment.
Except as otherwise authorized, and notwithstanding any contract
entered into or any license or permit granted prior to May 7, 1995, any
new investment by a United States person in Iran or in property
(including entities) owned or controlled by the Government of Iran is
prohibited.
Sec. 560.208 Prohibited approval or facilitation.
Except as otherwise authorized, and notwithstanding any contract
entered into or any license or permit granted prior to May 7, 1995, the
approval or facilitation by a United States person of the entry into or
performance by an entity owned or controlled by a United States person
of a transaction or contract prohibited as to United States persons by
Secs. 560.205, 560.206, and 560.207, or relating to the financing of
activities prohibited as to United States persons by those sections, or
of a guaranty of another person's performance of such transaction or
contract, is prohibited.
Sec. 560.209 Prohibited transactions with respect to the development
of Iranian petroleum resources.
Except as otherwise authorized, and notwithstanding any contract
entered into or any license or permit granted prior to March 16, 1995,
the following are prohibited:
(a) The entry into or performance by a United States person, or the
approval by a United States person of the entry into or performance by
an entity owned or controlled by a United States person, of:
(1) A contract that includes overall supervision and management
responsibility for the development of petroleum resources located in
Iran, or
(2) A guaranty of another person's performance under such contract;
or
(b) The entry into or performance by a United States person, or the
approval by a United States person of the entry into or performance by
an entity owned or controlled by a United States person, of
(1) A contract for the financing of the development of petroleum
resources located in Iran, or
(2) A guaranty of another person's performance under such a
contract.
Sec. 560.210 Exempt transactions.
(a) Personal communications. The prohibitions of Secs. 560.204 and
560.206 do not apply to any postal, telegraphic, telephonic, or other
personal communication, which does not involve the transfer of anything
of value.
(b) Humanitarian donations. The prohibitions of Secs. 560.204 and
560.206 do not apply to donations by United States persons of articles,
such as food, clothing, and medicine, intended to be used to relieve
human suffering.
(c) Information and informational materials.
(1) The prohibitions of Secs. 560.204 and 560.206 do not apply to
the exportation from the United States to Iran of information and
informational materials, as defined in Sec. 560.315, whether commercial
or otherwise, regardless of format or medium of transmission, or any
transaction of common carriers incident to such exportation.
(2) Paragraph (c)(1) of this section does not authorize
transactions related to information and informational materials not
fully created and in existence at the date of the transaction, or to
the substantive or artistic alteration or enhancement of information or
informational materials, or the provision of marketing and business
consulting services by a United States person. Such prohibited
transactions include, without limitation, payment of advances for
information or informational materials not yet created and completed,
and provision of services to market, produce or co-produce, create or
assist in the creation of information or informational materials.
(3) Paragraph (c)(1) does not authorize transactions incident to
the exportation of restricted technical data as defined in part 779 of
the Export Administration Regulations, 15 CFR part 779, or to the
exportation of goods for use in the transmission of any data. The
exportation of such goods to Iran is prohibited, as provided in
Sec. 560.204.
(d) Travel. The prohibitions contained in this part do not apply to
transactions ordinarily incident to travel to or from any country,
including importation of accompanied baggage for personal use,
maintenance within any country including payment of living expenses and
acquisition of goods or services for personal use, and arrangement or
facilitation of such travel including nonscheduled air, sea, or land
voyages. This exemption extends to transactions with Iranian carriers
and those involving group tours and payments in Iran made with cash or
traveler's checks for transactions incident to personal travel. The use
of currency drafts, charge, debit, or credit cards is not permitted.
(e) Letters of Credit. Letters of credit and other financing
agreements with respect to trade contracts in force as of May 6, 1995,
may be performed pursuant to their terms with respect to underlying
trade transactions occurring prior to 12:01 a.m. EDT, June 6, 1995. See
Sec. 560.413.
Subpart C--General Definitions
Sec. 560.301 Effective date.
The term ``effective date'' means:
(a) 12:01 p.m., Eastern Standard Time, October 29, 1987, for all
prohibitions set forth in Sec. 560.201.
(b) 12:01 a.m., Eastern Daylight Time, June 6, 1995, for all
prohibitions set forth in Secs. 560.204, 560.205, and 560.206 with
respect to trade transactions based on contracts in force as of May 6,
1995, and which were authorized pursuant to federal regulations in
force immediately prior to May 6, 1995.
(c) 12:01 a.m., Eastern Standard Time, March 16, 1995, for all
prohibitions set forth in Sec. 560.209 and the prohibitions set forth
in Sec. 560.203 as they apply to the prohibitions set forth in
Sec. 560.209.
(d) 12:01 a.m., Eastern Daylight Time, May 7, 1995, for all other
prohibitions contained in this part.
Sec. 560.302 [Reserved]
Sec. 560.303 Iran; Iranian.
The term ``Iran'' means the territory of Iran, and any other
territory or marine area, including the exclusive economic zone and
continental shelf, over which the Government of Iran claims
sovereignty, sovereign rights or jurisdiction, provided that the
[[Page 47065]]
Government of Iran exercises partial or total de facto control over the
area or derives a benefit from economic activity in the area pursuant
to an international agreement. The term ``Iranian'' means pertaining to
Iran as defined in this section.
Sec. 560.304 Government of Iran.
The term ``Government of Iran'' includes:
(a) The state and the Government of Iran, as well as any political
subdivision, agency, or instrumentality thereof;
(b) Any entity owned or controlled directly or indirectly 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 applicable effective date, acting or
purporting to act directly or indirectly on behalf of any of the
foregoing; and
(d) Any person or entity designated by the Secretary of the
Treasury as included within paragraphs (a) through (c) of this section.
Sec. 560.305 Person; entity.
(a) The term ``person'' means an individual or entity.
(b) The term ``entity'' means a partnership, association, trust,
joint venture, corporation or other organization.
Sec. 560.306 Iranian-origin goods and services.
(a) The term ``goods or services of Iranian origin'' includes:
(1) Goods grown, produced, manufactured, extracted, or processed in
Iran;
(2) Goods which have entered into Iranian commerce; and
(3) Services performed in Iran or by the Government of Iran, as
defined in Sec. 560.304.
(b) The term ``services of Iranian origin'' does not include:
(1) Diplomatic and consular services performed by or on behalf of
the Government of Iran;
(2) Diplomatic and consular services performed by or on behalf of
the Government of the United States; or
(3) Services provided in the United States by an Iranian national
resident in the United States.
Sec. 560.307 United States.
The term ``United States'' means the United States, including its
territories and possessions.
Sec. 560.308 Importation.
The term ``importation'' means the bringing of any goods into the
United States, except that in the case of goods transported by vessel,
``importation'' means the bringing of any goods into the United States
with the intent to unlade them.
Sec. 560.309 [Reserved]
Sec. 560.310 License.
Except as otherwise specified, the term ``license'' means any
license or authorization contained in or issued pursuant to this part.
Sec. 560.311 General license.
The term ``general license'' means any license or authorization the
terms of which are set forth in this part.
Sec. 560.312 Specific license.
The term ``specific license'' means any license or authorization
not set forth in this part but issued pursuant to this part.
Sec. 560.313 Entity owned or controlled by the Government of Iran.
The term ``entity owned or controlled by the Government of Iran''
includes any corporation, partnership, association, or other entity in
which the Government of Iran owns a majority or controlling interest,
and any entity which is otherwise controlled by that government.
Sec. 560.314 United States person.
The term ``United States person'' means any United States citizen,
permanent resident alien, entity organized under the laws of the United
States (including foreign branches), or any person in the United
States.
Sec. 560.315 Information or informational materials.
(a) The term ``information'' or ``informational materials''
includes, without limitation:
(1) Publications, films, posters, phonograph records, photographs,
microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and
news wire feeds.
(2) To be considered ``information'' or ``informational
materials'', artworks must be classified under chapter subheading 9701,
9702, or 9703 of the Harmonized Tariff Schedule of the United States.
(b) The term ``information'' and ``informational materials'' with
respect to United States exports does not include items:
(1) That were, as of April 30, 1994, controlled for export pursuant
to section 5 of the Export Administration Act of 1979, 50 U.S.C. App.
2401-2420 (the ``EAA''), or section 6 of the EAA to the extent that
such controls promote the nonproliferation or antiterrorism policies of
the United States, including ``software'' that is not ``publicly
available'' as these terms are defined in 15 CFR parts 779 and 799.1;
or
(2) With respect to which acts are prohibited by 18 U.S.C. chapter
37.
Sec. 560.316 New investment.
The term ``new investment'' means a transaction after 12:01 EDT,
May 7, 1995, that constitutes:
(a) A commitment or contribution of funds or other assets; or
(b) A loan or other extension of credit, as defined in
Sec. 560.317.
Sec. 560.317 Credits or loans.
The term ``credits'' or ``loans'' means any transfer or extension
of funds or credit on the basis of an obligation to repay, or any
assumption or guarantee of the obligation of another to repay an
extension of funds or credit, including but not limited to: overdrafts;
currency swaps; purchases of debt securities issued by the Government
of Iran; purchases of a loan made by another person; sales of financial
assets subject to an agreement to repurchase; renewals or refinancings
whereby funds or credits are transferred to or extended to a prohibited
borrower or prohibited recipient; the issuance of standby letters of
credit; and drawdowns on existing lines of credit.
Sec. 560.318 Technology.
For purposes of Secs. 560.204 and 560.205, the term ``technology''
includes technical data or other information subject to the Export
Administration Regulations, 15 CFR parts 768-799.
Sec. 560.319 United States depository institution.
The term ``United States depository institution'' means:
(a) Any entity organized under the laws of any jurisdiction within
the United States (including its foreign branches), and
(b) Any agency, office, or branch located in the United States of a
foreign entity; that is engaged primarily in the business of banking,
including accepting deposits and making, granting, transferring,
holding, or brokering loans or credits, or purchasing or selling
foreign exchange, or procuring purchasers and sellers thereof, as
principal or agent. The term includes, among others, banks, savings
banks, savings associations, mortgage companies, credit unions, and
trust companies and United States holding companies.
Sec. 560.320 Iranian accounts.
The term ``Iranian accounts'' means accounts of persons located in
Iran or of
[[Page 47066]]
the Government of Iran maintained on the books of a United States
depository institution.
Subpart D--Interpretations
Sec. 560.401 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 refers to the same as currently
amended.
Sec. 560.402 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 does not, unless otherwise specifically
provided, 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 continue and may be enforced as if such amendment,
modification, or revocation had not been made.
Sec. 560.403 [Reserved]
Sec. 560.404 [Reserved]
Sec. 560.405 [Reserved]
Sec. 560.406 Transshipments prohibited.
(a) The prohibitions in Sec. 560.201 apply to the importation into
the United States, for transshipment or transit, of Iranian-origin
goods which are intended or destined for third countries.
(b) The prohibitions in Sec. 560.204 apply to the exportation from
the United States, for transshipment or transit, of goods which are
intended or destined for Iran.
(c) The prohibitions in Sec. 560.205 apply to the reexportation of
goods described in that section, for transshipment or transit, which
are intended or destined for Iran.
(d) The prohibitions in Sec. 560.206 apply to any transaction
relating to the transshipment of goods of Iranian origin or owned or
controlled by the Government of Iran through any country.
Sec. 560.407 Transactions related to Iranian-origin goods.
(a) Importation into the United States from third countries of
goods containing Iranian-origin raw materials or components is not
prohibited if those raw materials or components have been incorporated
into manufactured products or substantially transformed in a third
country by a person other than a United States person.
(b) Transactions relating to Iranian-origin goods that have not
been incorporated into manufactured products or substantially
transformed in a third country are prohibited.
(c) Transactions relating to goods containing Iranian-origin raw
materials or components are not prohibited if those raw materials or
components have been incorporated into manufactured products or
substantially transformed in a third country by a person other than a
United States person.
Sec. 560.408 Importation into and release from a bonded warehouse or
foreign trade zone.
The prohibitions in Sec. 560.201 apply to importation into a bonded
warehouse or a foreign trade zone of the United States. However,
Sec. 560.201 does not prohibit the release from a bonded warehouse or a
foreign trade zone of Iranian-origin goods imported into a bonded
warehouse or a foreign trade zone prior to October 29, 1987.
Sec. 560.409 [Reserved]
Sec. 560.410 Exportation of services.
(a) The prohibition on the exportation of services from the United
States contained in Sec. 560.204 applies only to services performed on
behalf of a person in Iran or the Government of Iran or where the
benefit of such services is otherwise received in Iran, if such
services are performed:
(1) In the United States, or
(2) Outside the United States by an individual United States person
ordinarily resident in the United States, or
(3) Outside the United States by an overseas branch of an entity
located in the United States.
(b) The benefit of services performed anywhere in the world on
behalf of the Government of Iran is presumed to be received in Iran.
(c) Services provided in the United States or by a United States
person to a non-Iranian carrier transporting passengers or goods to or
from Iran are not considered to be exported to Iran.
(d) Services provided in a third country by a United States person
ordinarily resident outside the United States are not considered to be
exported from the United States.
Sec. 560.411 Offshore transactions in Iranian-origin goods and
services.
The prohibitions contained in Sec. 560.206 apply to, among other
things, transactions by United States persons in locations outside the
United States with respect to goods or services which the United States
person knows, or has reason to know, are of Iranian origin or owned or
controlled by the Government of Iran, including:
(a) Importing into or exporting from such locations; and
(b) Purchasing, selling, financing, swapping, insuring,
transporting, lifting, storing, incorporating, or transforming, or
brokering any of the foregoing.
Sec. 560.412 Extensions of credits or loans to Iran.
(a) The prohibitions contained in Sec. 560.207 apply, among other
things, to the unauthorized renewal or rescheduling of credits or loans
in existence as of May 6, 1995.
(b) The prohibitions contained in Sec. 560.209 apply, among other
things, to the unauthorized renewal or rescheduling of credits or loans
in existence as of March 15, 1995.
(c) The prohibitions contained in Secs. 560.207 and 560.209 apply,
among other things, to credits or loans in any currency.
Sec. 560.413 Letter of credit payments by Iranian banks in the United
States.
(a) For purposes of the exemption in Sec. 560.210(e), payment of
letters of credit and other financing agreements according to their
terms includes, in the case of payments made by an Iranian bank's
branch or agency located in the United States, payments that such
branch or agency is:
(1) Legally obligated to make pursuant to the terms of letters of
credit and other financing agreements relating to pre-May 7, 1995 trade
contracts; or
(2) Licensed to make by the Office of Foreign Assets Control with
respect to pre-May 7, 1995 trade contracts.
(b) Payments that are not binding legal obligations of an Iranian
bank's branch or agency pursuant to the terms of the letter of credit
or other financing agreement are not covered by this exemption.
Sec. 560.414 Exports to third countries; reexports.
(a) The prohibitions contained in Sec. 560.205 do not apply to the
reexportation to Iran by a person who is not a United States person of
any item described in that section which was exported from the United
States prior to 12:01 a.m. EDT, May 7, 1995, and was not the property
of a United States person as of 12:01 a.m. EDT, May 7, 1995, if the
reexportation to Iran of such item was not subject to export license
application requirements under any United States regulations in effect
immediately prior to May 6, 1995.
(b) United States persons are prohibited as of 12:01 a.m. EDT, May
7,
[[Page 47067]]
1995, from reexporting any item subject to the prohibitions contained
in Sec. 560.205 regardless of when the item was exported from the
United States. United States persons are prohibited from approving or
facilitating any reexport by an entity owned or controlled by a United
States person of any item subject to the prohibitions of Sec. 560.205
of this part regardless of when the item was exported from the United
States.
(c) Effective 12:01 a.m. EDT May 7, 1995, the exportation from the
United States to any destination of any item that was subject to export
license application requirements under any United States regulations in
effect immediately prior to May 6, 1995, is subject to the condition
that the reexportation to Iran requires a specific license, except as
otherwise authorized by this part.
Subpart E--Licenses, Authorizations and Statements of Licensing
Policy
Sec. 560.501 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, authorizes or validates any
transaction effected prior to the issuance of the license, unless
specifically provided in such license or other authorization.
(b) No regulation, ruling, instruction, or license authorizes a
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 authorizes any
transactions 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 this part 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.
Sec. 560.502 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 is
binding upon all persons receiving actual or constructive notice of
such exclusion or restriction.
Sec. 560.503 [Reserved]
Sec. 560.504 [Reserved]
Sec. 560.505 Certain services relating to participation in various
events authorized.
The importation of Iranian-origin services into the United States
is authorized where such services are performed in the United States by
an Iranian national who enters the United States on a visa issued by
the State Department for the purpose of participating in a public
conference, performance, exhibition or similar event, and such services
are consistent with that purpose.
Sec. 560.506 Importation and exportation of certain gifts authorized.
The importation into the United States of Iranian-origin goods, and
the exportation from the United States of goods, is authorized for
goods sent as gifts to persons provided that the value of the gift is
not more than $100.
Sec. 560.507 Accompanied baggage authorized.
(a) Persons entering the United States directly or indirectly from
Iran are authorized to import into the United States Iranian-origin
accompanied baggage normally incident to travel.
(b) Persons leaving the United States for Iran are authorized to
export from the United States accompanied baggage normally incident to
travel.
(c) This authorization applies to accompanied baggage that includes
only articles that are necessary for personal use incident to travel,
not intended for any other person or for sale, and are not otherwise
prohibited from importation or exportation under applicable United
States laws.
Sec. 560.508 Telecommunications and mail transactions authorized.
All transactions of common carriers incident to the receipt or
transmission of telecommunications and mail between the United States
and Iran are authorized. For purposes of this section, the term
``mail'' includes parcels only to the extent the parcels contain goods
exempted from the prohibitions contained in this part or otherwise
eligible for importation from or exportation to Iran under a general or
specific license.
Sec. 560.509 Certain transactions related to patents, trademarks and
copyrights authorized.
(a) All of the following transactions in connection with patent,
trademark, copyright or other intellectual property protection in the
United States or Iran are authorized:
(1) The filing and prosecution of any application to obtain a
patent, trademark, copyright or other form of intellectual property
protection;
(2) The receipt of a patent, trademark, copyright or other form of
intellectual property protection;
(3) The renewal or maintenance of a patent, trademark, copyright or
other form of intellectual property protection; and
(4) The filing and prosecution of opposition or infringement
proceedings with respect to a patent, trademark, copyright or other
form of intellectual property protection, or the entrance of a defense
to any such proceedings.
(b) Nothing in this section affects obligations under any other
provision of law.
Sec. 560.510 Transactions related to the resolution of disputes
between the United States or United States nationals and the Government
of Iran.
(a) Except as otherwise authorized, specific licenses may be issued
on a case-by-case basis to authorize transactions in connection with
awards, decisions or orders of the Iran-United States Claims Tribunal
in The Hague, the International Court of Justice, or other
international tribunals (collectively, ``tribunals''); agreements
settling claims brought before tribunals; and awards, orders, or
decisions of an administrative, judicial or arbitral proceeding in the
United States or abroad, where the proceeding involves the enforcement
of awards, decisions or orders of tribunals, or is contemplated under
an international agreement, or involves claims arising before 12:01
a.m. EDT, May 7, 1995, that resolve disputes between the Government of
Iran and the United States or United States nationals, including the
following transactions:
(1) Importation into the United States of, or any transaction
related to, goods and services of Iranian origin or owned or controlled
by the Government of Iran;
(2) Exportation or reexportation to Iran or the Government of Iran
of any goods, technology, or services, except to the extent that such
exportation or reexportation is also subject to export licensing
application requirements of another agency of the United States
Government and the granting of such a
[[Page 47068]]
license by that agency would be prohibited by law;
(3) Financial transactions related to the resolution of disputes at
tribunals, including transactions related to the funding of proceedings
or of accounts related to proceedings or to a tribunal; participation,
representation, or testimony before a tribunal; and the payment of
awards of a tribunal; and
(4) Other transactions otherwise prohibited by this part which are
necessary to permit implementation of the foregoing awards, decisions,
orders, or agreements.
(b) Specific licenses may be issued on a case-by-case basis to
authorize payment of costs related to the storage or maintenance of
goods in which the Government of Iran has title, and to authorize the
transfer of title to such goods, provided that such goods are in the
United States and that such goods are the subject of a proceeding
pending before a tribunal.
(c)(1) All transactions are authorized with respect to the
importation of Iranian-origin goods and services necessary to the
initiation and conduct of legal proceedings, in the United States or
abroad, including administrative, judicial and arbitral proceedings and
proceedings before tribunals.
(2) Specific licenses may be issued on a case-by-case basis to
authorize the exportation to Iran or the Government of Iran of goods,
and of services not otherwise authorized by Sec. 560.525, necessary to
the initiation and conduct of legal proceedings, in the United States
or abroad, including administrative, judicial and arbitral proceedings
and proceedings before tribunals, except to the extent that the
exportation is also subject to export licensing application
requirements of another agency of the United States Government and the
granting of such a license by that agency would be prohibited by law.
(3) Representation of United States persons or of third country
persons in legal proceedings, in the United States or abroad, including
administrative, judicial and arbitral proceedings and proceedings
before tribunals, against Iran or the Government of Iran is not
prohibited by this part. The exportation of certain legal services to a
person in Iran or the Government of Iran is authorized in Sec. 560.525.
(d) The following are authorized:
(1) All transactions related to payment of awards of the Iran-
United States Claims Tribunal in The Hague against Iran out of the
Security Account provided for in paragraph 7 of the Declaration of the
Government of the Democratic and Popular Republic of Algeria of January
19, 1981.
(2) All transactions necessary to the payment of awards in a legal
proceeding to which the United States Government is a party, or to
payments pursuant to settlement agreements entered into by the United
States Government in such a legal proceeding.
Sec. 560.511 [Reserved]
Sec. 560.512 Iranian Government missions in the United States.
(a) All transactions ordinarily incident to the importation of
goods or services into the United States by, the exportation of goods
or services from the United States by, or the provision of goods or
services in the United States to, the missions of the Government of
Iran to international organizations in the United States, and Iranians
admitted to the United States under section 101(a)(15)(G) of the
Immigration and Nationality Act (``INA''), 8 U.S.C. 1101(a)(15)(G), are
authorized, provided that:
(1) The goods or services are for the conduct of the official
business of the mission, or for personal use of personnel admitted to
the United States under INA section 101(a)(15)(G), and are not for
resale; and
(2) The transaction is not otherwise prohibited by law.
(b) All transactions ordinarily incident to the importation of
goods or services into the United States by, the exportation of goods
or services from the United States by, or the provision of goods or
services in the United States to, the Iranian Interests Section of the
Embassy of Pakistan (or any successor protecting power) in the United
States, are authorized, provided that:
(1) The goods or services are for the conduct of the official
business of the Iranian Interests Section, and are not for resale; and
(2) The transaction is not otherwise prohibited by law.
(c) All transactions ordinarily incident to the provision of goods
or services in the United States to the employees of Iranian missions
to international organizations in the United States, and to employees
of the Iranian Interests Section of the Embassy of Pakistan (or any
successor protecting power) in the United States, are authorized,
provided that the transaction is not otherwise prohibited by law.
Sec. 560.513 Importation of Iranian-origin oil.
(a) Specific licenses will be issued on a case-by-case basis to
permit the importation of Iranian-origin oil in connection with the
resolution or settlement of cases before the Iran-United States Claims
Tribunal in The Hague, established pursuant to the Declaration of the
Government of the Democratic and Popular Republic of Algeria Concerning
the Settlement of Claims by the Government of the United States of
America and the Government of the Islamic Republic of Iran of January
19, 1981, or where the proceeds are otherwise to be deposited in the
Tribunal's Security Account.
(b) License applications submitted pursuant to this section must
contain the importer's certification that the oil is of Iranian origin
with all relevant supporting documentation, including specification of
the production site at which the oil was extracted, and that the sale
or transfer of the oil is by or for the account of the Government of
Iran. Licenses will not be issued for importations of Iranian-origin
oil which is not sold or transferred by or for the account of the
Government of Iran. In cases where the oil is being imported either in
whole or in part in resolution or settlement of a case pending before
the Tribunal, applicants are required to identify the case and submit a
copy of the settlement agreement and the Award on Agreed Terms issued
by the Tribunal. In cases where any proceeds are generated for the
account of the Government of Iran from the importation of Iranian-
origin oil, the importer must demonstrate that irrevocable arrangements
are in place that will ensure that the proceeds will be deposited in
the Tribunal's Security Account.
Sec. 560.514 [Reserved]
Sec. 560.515 30-day delayed effective date for pre-May 7, 1995 trade
contracts involving Iran.
(a) All transactions necessary to complete performance of a trade
contract entered into prior to May 7, 1995, and involving Iran (a
``pre-existing trade contract''), including the exportation of goods,
services (including financial services), or technology from the United
States that was authorized pursuant to Federal regulations in force
immediately prior to May 6, 1995, or performance under a pre-existing
trade contract for transactions in Iranian-origin or Government of Iran
owned or controlled goods or services not involving importation into
the United States, are authorized without specific licensing by the
Office of Foreign Assets Control if the conditions in paragraph (a)(1)
or (a)(2) are met:
(1) If the pre-existing trade contract is for exportation of goods
or technology from the United States that was
[[Page 47069]]
authorized pursuant to Federal regulations in force immediately prior
to May 6, 1995, the goods or technology must be exported from the
United States prior to 12:01 a.m. EDT, June 6, 1995, and all other
activity by U.S. persons that is necessary and incidental to the
performance of the pre-existing trade contract (other than payment
under a financing contract) must be completed prior to 12:01 a.m. EDT,
August 6, 1995; or
(2) If the pre-existing trade contract is for:
(i) The exportation of services from the United States and
benefitting a person in Iran or the Government of Iran; or
(ii) The reexportation of goods or technology to Iran, the
Government of Iran, or an entity owned or controlled by the Government
of Iran that was authorized pursuant to Federal regulations in force
immediately prior to May 6, 1995, or
(iii) Transactions relating to goods or services of Iranian origin
or owned or controlled by the Government of Iran other than
transactions relating to importation into the United States of such
goods or services, all obligations under the pre-existing trade
contract (other than payment under a financing contract) must be fully
completed prior to 12:01 a.m. EDT, June 6, 1995.
(b) In order to complete performance of a pre-existing trade
contract, the arrangement or renegotiation of contracts for
transactions necessary and incidental to performance of the pre-
existing trade contract is authorized. Such incidental transactions may
include, for example, financing, shipping and insurance arrangements.
Amendments to a pre-existing trade contract for the purpose of
accelerating a previously-specified delivery schedule under a contract
for a fixed quantity or value of goods, technology or services, or
curtailing or canceling required performance, are authorized without
specific licensing. Any other alteration of the trade contract must be
specifically licensed by the Office of Foreign Assets Control.
(c) The existence of a contract will be determined with reference
to the principles contained in Article 2 of the Uniform Commercial
Code.
(d) No U.S. person may change its policies or operating procedures
in order to enable a foreign entity owned or controlled by U.S. persons
to enter into a transaction that could not be entered into directly by
a U.S. person located in the United States pursuant to the prohibitions
contained in this part.
Sec. 560.516 Payment and United States dollar clearing transactions
involving Iran.
(a) United States depository institutions are authorized to process
transfers of funds to or from Iran, or for the direct or indirect
benefit of persons in Iran or the Government of Iran, if the transfer
is covered in full by any of the following conditions and does not
involve debiting or crediting an Iranian account:
(1) The transfer is by order of a foreign bank which is not an
Iranian entity from its own account in a domestic bank (directly or
through a foreign branch or subsidiary of a domestic bank) to an
account held by a domestic bank (directly or through a foreign branch
or subsidiary of a domestic bank) for a second foreign bank which is
not an Iranian entity. For purposes of this section ``foreign bank''
includes a foreign subsidiary, but not a foreign branch of a domestic
bank;
(2) The transfer arises from an underlying transaction that has
been authorized by a specific or general license issued pursuant to
this part;
(3) The transfer arises from an underlying transaction that is not
prohibited or is exempted from regulation pursuant to Section 203(b) of
the International Emergency Economic Powers Act, 50 U.S.C. 1702(b),
such as an exportation of information or informational materials to
Iran, a travel-related remittance, or payment for the shipment of a
donation of articles to relieve human suffering or a third country
transaction not involving a United States person nor otherwise
prohibited by this part; or
(4) The transfer is a non-commercial remittance to or from Iran,
such as a family remittance not related to a family-owned enterprise.
(b) Before a United States depository institution initiates a
payment subject to the prohibitions contained in this part on behalf of
any customer, or credits a transfer subject to such prohibitions to the
account on its books of the ultimate beneficiary, the U.S. depository
institution must determine that the transfer is not prohibited by this
part.
(c) Pursuant to the prohibitions contained in Sec. 560.208, a
United States depository institution may not make transfers to or for
the benefit of a foreign-organized entity owned or controlled by it if
the underlying transaction would be prohibited if engaged in directly
by the U.S. depository institution.
(d) This section does not authorize transactions with respect to
property blocked pursuant to part 535.
Sec. 560.517 Exportation of services: Iranian accounts at United
States depository institutions.
(a) United States depository institutions are prohibited from
performing services with respect to Iranian accounts, as defined in
Sec. 560.320, at the instruction of the Government of Iran or persons
located in Iran, except that United States depository institutions are
authorized to provide and be compensated for services and incidental
transactions with respect to:
(1) The maintenance of Iranian accounts, including the payment of
interest and the debiting of service charges;
(2) The processing of transfers arising from underlying
transactions that are exempted from regulation pursuant to section
203(b) of the International Emergency Economic Powers Act, 50 U.S.C.
1702(b), such as an exportation of information or informational
materials to Iran, a travel-related remittance, or payment for the
shipment of a donation of articles to relieve human suffering; and
(3) At the request of the account party, the closing of Iranian
accounts and the lump sum transfer only to the account party of all
remaining funds and other assets in the account.
(b) Specific licenses may be issued with respect to the operation
of Iranian accounts that constitute accounts of:
(1) Foreign government missions and their personnel in Iran; or
(2) Missions of the Government of Iran in the United States.
Sec. 560.518 Transactions in Iranian-origin and Iranian Government
property.
(a) Except for transactions involving the Government of Iran, all
domestic transactions with respect to Iranian-origin goods located in
the United States are authorized, provided that this paragraph (a) does
not affect the status of property blocked pursuant to part 535 or
detained or seized, or subject to detention or seizure, pursuant to
this part.
(b) All transactions necessary and incidental to a United States
person's sale or other disposition of goods or services of Iranian
origin or owned or controlled by the Government of Iran that are
located or to be performed outside the United States and were acquired
by that United States person in transactions not prohibited by part 535
or this part are authorized, provided:
(1) The sale or other disposition does not result in the
importation of such goods or services into the United States, and
[[Page 47070]]
(2) The sale or other disposition is completed no later than 12:01
a.m. EDT, August 6, 1995.
(c) Except as provided in paragraphs (a) and (b) of this section,
United States persons may not deal in goods or services of Iranian
origin or owned or controlled by the Government of Iran, except that
the following transactions are authorized:
(1) Transactions by a United States person with third-country
nationals incidental to the storage and maintenance in third countries
of Iranian-origin goods owned prior to May 7, 1995, by that United
States person or acquired thereafter by that United States person
consistent with the provisions of this part;
(2) Exportation of Iranian-origin household and personal effects
from the United States incident to the relocation of United States
persons outside the United States; and
(3) Purchase for personal use or consumption in Iran of Iranian-
origin goods or services.
(d) In addition to transactions authorized by paragraph (c)(1) of
this section, a United States person is authorized after 12:01 a.m.
EDT, May 7, 1995, to use or dispose of Iranian-origin household and
personal effects that are located outside the United States and that
have been acquired by the United States person in transactions not
prohibited by part 535 or this part.
Sec. 560.519 Policy governing news organization offices.
(a) Specific licenses may be issued on a case-by-case basis
authorizing transactions necessary for the establishment and operation
of news bureaus in Iran by United States organizations whose primary
purpose is the gathering and dissemination of news to the general
public.
(b) Transactions that may be authorized include but are not limited
to those incident to the following:
(1) Leasing office space and securing related goods and services;
(2) Hiring support staff;
(3) Purchasing Iranian-origin goods for use in the operation of the
office; and
(4) Paying fees related to the operation of the office in Iran.
(c) Specific licenses may be issued on a case-by-case basis
authorizing transactions necessary for the establishment and operation
of news bureaus in the United States by Iranian organizations whose
primary purpose is the gathering and dissemination of news to the
general public.
(d) The number assigned to such specific licenses should be
referenced in all import and export documents and in all funds
transfers and other banking transactions through banking institutions
organized or located in the United States in connection with the
licensed transactions to avoid disruption of the trade and financial
transactions.
Sec. 560.520 Exportation of agricultural commodities.
(a) All transactions by United States persons in connection with
the exportation from the United States to Iran of any agricultural
commodity under an export sales contract are authorized, provided:
(1) Such contract was entered into prior to 12:01 a.m. EDT, May 7,
1995; and
(2) The terms of such contract require delivery of the commodity
prior to February 2, 1996.
(b) The performance of letters of credit and other financing
agreements with respect to exports authorized by this section is
authorized pursuant to their terms.
(c) For purposes of this section, the term ``agricultural
commodity'' means feed grains, rice, wheat, cotton, peanuts, tobacco,
dairy products, and oilseeds (including vegetable oil).
(d) Specific licenses may be granted on a case-by-case basis for
transactions by United States persons in connection with the
exportation of other agricultural articles from the United States to
Iran that do not fall within the definition of ``agricultural
commodity'' contained in paragraph (c) of this section, provided such
exportation is pursuant to an export sales contract and the conditions
contained in paragraphs (a)(1) and (a)(2) of this section are met.
Sec. 560.521 Diplomatic pouches.
All transactions in connection with the importation into the United
States from Iran, or the exportation from the United States to Iran, of
diplomatic pouches and their contents are authorized.
Sec. 560.522 Allowable payments for overflights of Iranian airspace.
Payments to Iran of charges for services rendered by the Government
of Iran in connection with the overflight of Iran or emergency landing
in Iran of aircraft owned by a United States person or registered in
the United States are authorized.
Sec. 560.523 Importation of information and informational materials.
(a) In addition to transactions relating to information or
informational materials that are exempted from regulation under
Sec. 560.210, the following are authorized:
(1) The importation of information and informational materials of
Iranian origin from any location, whether commercial or otherwise,
regardless of format or medium of transmission; and
(2) All financial and other transactions related to the importation
of information and informational materials.
(b) Specific licenses may be issued on a case-by-case basis for the
exportation of equipment necessary for the establishment of news wire
feeds or other transmissions of information or informational materials.
Sec. 560.524 Household goods and personal effects.
(a) The exportation from the United States to Iran of household and
personal effects, including baggage and articles for family use, of
persons departing the United States to relocate in Iran is authorized
provided the articles included in such effects have been actually used
by such persons or by family members accompanying them, are not
intended for any other person or for sale, and are not otherwise
prohibited from exportation. See also, Sec. 560.518(c)(2).
(b) The importation of Iranian-origin household and personal
effects, including baggage and articles for family use, of persons
arriving in the United States is authorized; to qualify, articles
included in such effects must have been actually used abroad by such
persons or by other family members arriving from the same foreign
household, must not be intended for any other person or for sale, and
must not be otherwise prohibited from importation.
Sec. 560.525 Exportation of certain legal services.
(a) The provision of the following legal services to the Government
of Iran or to a person in Iran, and receipt of payment therefor, are
authorized:
(1) Provision of legal advice and counselling on the requirements
of and compliance with the laws of any jurisdiction within the United
States, provided that such advice and counselling is not provided to
facilitate transactions that would violate any of the prohibitions
contained in this part;
(2) Representation when a person in Iran or the Government of Iran
has been named as a defendant in or otherwise made a party to domestic
United States legal, arbitration, or administrative proceedings;
(3) Initiation of domestic United States legal, arbitration, or
administrative proceedings in defense of
[[Page 47071]]
property interests of the Government of Iran that were in existence
prior to May 7, 1995, or acquired thereafter in a transaction not
inconsistent with the prohibitions contained in this part;
(4) Representation before any federal or state agency with respect
to the imposition, administration, or enforcement of United States
sanctions against Iran;
(5) Initiation and conduct of legal proceedings, in the United
States or abroad, including administrative, judicial and arbitral
proceedings and proceedings before international tribunals (including
the Iran-United States Claims Tribunal in The Hague and the
International Court of Justice):
(i) To resolve disputes between the Government of Iran and the
United States or a United States national;
(ii) Where the proceeding is contemplated under an international
agreement; or
(iii) Where the proceeding involves the enforcement of awards,
decisions, or orders resulting from legal proceedings within the scope
of paragraph (a)(5)(i) or (a)(5)(ii) of this section, provided that any
transaction, unrelated to the provision of legal services or the
payment therefor, that is necessary or related to the execution of an
award, decision or order resulting from such legal proceeding, or
otherwise necessary for the conduct of such proceeding, and which would
otherwise be prohibited by this part requires a specific license in
accordance with Secs. 560.510 and 560.801;
(6) Provision of legal advice and counselling in connection with
settlement or other resolution of matters described in paragraph (a)(5)
of this section; and
(7) Provision of legal services in any other context in which
prevailing United States law requires access to legal counsel at public
expense.
(b) The provision of any other legal services to a person in Iran
or the Government of Iran, not otherwise authorized in or exempted by
this part, requires the issuance of a specific license.
Sec. 560.526 Commodities trading and related transactions.
(a) Trading in Iranian-origin commodities. With respect to
Sec. 560.206, specific licenses may be issued on a case-by-case basis
to authorize certain commodities trading by a United States person in
Iranian-origin goods, or transactions incidental to such trading,
where:
(1) No party to the transaction with the United States person is a
person in Iran or the Government of Iran, and
(2) It was impossible for the United States person to determine at
the time of entry into the transaction, given all circumstances of the
transaction, that the goods would be of Iranian origin or would be
owned or controlled by the Government of Iran.
(b) Trading in commodities destined for Iran or the Government of
Iran. With respect to Sec. 560.204, specific licenses may be issued on
a case-by-case basis to authorize certain trading by United States
persons in commodities of U.S. or third-country origin destined for
Iran or the Government of Iran, or transactions incidental to such
trading, where:
(1) It was impossible for the United States person to determine at
the time of entry into the transaction, given all circumstances of the
transaction, that the goods would be for delivery to Iran or to the
Government of Iran;
(2) The United States person did not contract with a person in Iran
or the Government of Iran; and
(3) The United States person did not initiate the nomination of the
commodity's destination as Iran or the Government of Iran.
Sec. 560.527 Rescheduling existing loans.
Specific licenses may be issued on a case-by-case basis for
rescheduling loans or otherwise extending the maturities of existing
loans, and for charging fees or interest at commercially reasonable
rates, in connection therewith, provided that no new funds or credits
are thereby transferred or extended to Iran or the Government of Iran.
Sec. 560.528 Aircraft safety.
Specific licenses may be issued on a case-by-case basis for the
exportation and reexportation of goods, services, and technology to
insure the safety of civil aviation and safe operation of U.S.-origin
commercial passenger aircraft.
Subpart F--Reports
Sec. 560.601 Required records.
Every person engaging in any transaction subject to the provisions
of this part must keep a full and accurate record of each such
transaction in which that person engages, regardless of whether such
transaction is effected pursuant to license or otherwise, and such
record must be available for examination for at least 2 years after the
date of such transaction.
Sec. 560.602 Reports to be furnished on demand.
Every person is required to furnish under oath, in the form of
reports or otherwise, from time to time and at any time as may be
required, complete information relative to any transaction, regardless
of whether such transaction is effected pursuant to license or
otherwise, subject to the provisions of this part. Such reports may be
required to include the production of any books of account, contracts,
letters or other papers, connected with any such transaction or
property, in the custody or control of the persons required to make
such reports. Reports with respect to transactions may be required
either before or after such transactions are completed. The Director of
Foreign Assets Control may, through any person or agency, conduct
investigations, hold hearings, administer oaths, examine witnesses,
receive evidence, take depositions, and require by subpoena the
attendance and testimony of witnesses and the production of all books,
papers, and documents relating to any matter under investigation,
regardless of whether any report has been required or filed in
connection therewith.
Sec. 560.603 Reports on oil transactions engaged in by foreign
affiliates.
(a) Requirement for reports. Reports are required to be filed in
the manner prescribed in this section with respect to all reportable
transactions, as defined in paragraph (f) of this section, engaged in
by the foreign affiliates of a United States person. Reports are due
within fifteen days after the end of each calendar quarter. The first
report must cover the period beginning June 6, 1995, and ending
September 30, 1995. Reports must be filed covering each three-month
period thereafter.
(b) Who must report. Reports are required to be filed by any United
States person whose foreign affiliate engaged in a reportable
transaction during the prior calendar quarter. A single United States
entity within a consolidated or affiliated group may be designated to
report on each foreign affiliate of the United States members of the
group. Such centralized reporting may be done by the United States
person who owns or controls, or has been delegated authority to file on
behalf of, the remaining United States persons in the group.
(c) What must be reported.
(1) Part I of the report must include the following information
with respect to United States persons with a foreign affiliate:
(i) Its name and address;
(ii) Its principal place of business;
(iii) For entities, its state of incorporation; and
[[Page 47072]]
(iv) The name, corporate title, and telephone number of the
individual to contact concerning the report.
(2) Part II of the report must include the following information
with respect to the foreign affiliate:
(i) Its name and address;
(ii) The country of its incorporation and its principal place of
business;
(iii) Its entity type (e.g., corporation, partnership, limited
liability company, etc.);
(iv) Its relationship to the reporting United States person,
including percentage of direct and indirect ownership;
(v) The name, title, and nationality of principal corporate
officers; and
(vi) A description of the manner and degree to which the United
States person exercises control over the foreign affiliate's oil-
related transactions. The description must include any written or
verbal directions or instructions issued by the United States person to
the foreign affiliate concerning such transactions, any requirements
for prior approval by the United States person concerning such
transactions, and the frequency of, and the nature of information
contained in, written or verbal reports by the foreign affiliate to the
United States person in which these transactions are described,
aggregated, or summarized.
(3) Part III of the report must include the following information
with respect to each reportable transaction (a separate part III must
be submitted for each reportable transaction):
(i) The nature of transaction (e.g., purchase, sale, swap);
(ii) A description of the product, technology, or service involved;
(iii) The name of the Iranian or third country party involved in
the transaction;
(iv) The currency and amount of the transaction (and corresponding
United States dollar value of the transaction, if not conducted in
United States dollars);
(v) The division or branch of the foreign affiliate involved in the
negotiating and executing of the transaction;
(vi) The name, corporate title, and nationality of each employee
engaged in the transaction; and
(vii) How the transaction is reflected in the report or reports as
required by paragraph (c)(2)(vi) of this section. If the transaction is
aggregated with other transactions, an explanation must be provided for
all the components in the aggregate report.
(d) Where to report. Reports must be filed with the Compliance
Programs Division, Office of Foreign Assets Control, Department of the
Treasury, 1500 Pennsylvania Avenue, NW--Annex, Washington, DC 20220.
Reports may be submitted by facsimile transmission at 202-622-1657. A
copy must be retained for the reporter's records.
(e) Whom to contact. Blocked Assets Division, Office of Foreign
Assets Control, Department of the Treasury, 1500 Pennsylvania Avenue,
NW--Annex, Washington, DC 20220, telephone: 202-622-2440.
(f) Definitions. For the purposes of this section:
(1) The term ``foreign affiliate'' means a person or entity (other
than a United States person as defined in Sec. 560.314) which is
organized or located outside of the United States, and which is owned
or controlled by a United States person or persons; and
(2) The term ``reportable transaction'' includes any purchase,
sale, or swap, or the provision of services related to such purchase,
sale, or swap, such as financing, lifting, transporting, insuring,
processing, transforming, or incorporating, related to:
(i) Iranian-origin crude oil or natural gas; or
(ii) Crude oil or natural gas and involving Iran or the Government
of Iran.
Subpart G--Penalties
Sec. 560.701 Penalties.
(a) Attention is directed to Sec. 206 of the International
Emergency Economic Powers Act (50 U.S.C. 1705), which provides that a
civil penalty of not to exceed $10,000 may be imposed on any person who
violates any license, order, or regulation issued under the
International Emergency Economic Powers Act, and that whoever willfully
violates any license, order, or regulation issued under the
International Emergency Economic Powers Act may, upon conviction, be
fined not more than $50,000, or, if a natural person, may be imprisoned
for not more than 10 years, or both; and any officer, director, or
agent of any corporation who knowingly participates in such violation
may be punished by a like fine, imprisonment, or both. Section 206 of
the International Emergency Economic Powers Act is applicable to
violations of any provision of this part and to violations 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.
(b) Attention is 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 statements or
representation or makes or uses any false writing or document knowing
the same to contain any false, fictitious or fraudulent statement or
entry, may be fined not more than $10,000 or imprisoned not more than 5
years, or both.
(c) Violations of this part may also be subject to relevant
provisions of the Customs laws and other applicable laws.
Sec. 560.702 Detention of shipments.
Import shipments into the United States of Iranian-origin goods in
violation of Sec. 560.201 and export shipments from the United States
of goods destined for Iran in violation of Secs. 560.202 or 560.204
shall be detained. No such import, export, or reexport will be
permitted to proceed, except as specifically authorized by the
Secretary of the Treasury. Unless licensed, such shipments are subject
to penalty or seizure and forfeiture action, under the Customs laws or
other applicable provisions of law, depending on the circumstances.
Sec. 560.703 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 may issue to the
person concerned a notice of his intent to impose a monetary penalty.
The prepenalty notice may 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 will
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
[[Page 47073]]
penalty should not be imposed, or, if imposed, why it should be in a
lesser amount than proposed.
Sec. 560.704 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 the 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.
Sec. 560.705 Penalty notice.
(a) No violation. If, after considering any 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 shall promptly 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 may
issue a written notice of the imposition of the monetary penalty to
that person.
Sec. 560.706 Referral for administrative collection measures or to
United States Department of Justice.
In the event that the person named does not pay the penalty imposed
pursuant to this part 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 may be referred for
administrative collection measures or 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
Sec. 560.801 Licensing.
(a) General licenses. General licenses have been issued authorizing
under appropriate terms and conditions certain types of transactions
which are subject to the prohibitions contained in this part. All such
licenses in effect on the date of publication are set forth in subpart
E of this part. It is the policy of the Office of Foreign Assets
Control not to grant applications for specific licenses authorizing
transactions to which the provisions of an outstanding general license
are applicable. Persons availing themselves of certain general licenses
may be required to file reports and statements in accordance with the
instructions specified in those licenses. Failure to file such reports
or statements will nullify the authorization to such person provided by
the general license.
(b) Specific licenses--(1) General course of procedure.
Transactions subject to the prohibitions contained in this part which
are not authorized by general license may be effected only under
specific licenses.
(2) Applications for specific licenses. Applications for specific
licenses to engage in any transactions prohibited by or pursuant to
this part may be filed by letter with the Office of Foreign Assets
Control. Any person having an interest in a transaction or proposed
transaction may file an application for a license authorizing such
transaction, but the applicant for a specific license is required to
make full disclosure of all parties in interest to the transaction so
that a decision on the application may be made with full knowledge of
all relevant facts and so that the identity and location of the persons
who know about the transaction may be easily ascertained in the event
of inquiry.
(3) Information to be supplied. The applicant must supply all
information specified by relevant instructions and/or forms, and must
fully disclose the names of all the parties who are concerned with or
interested in the proposed transaction. If the application is filed by
an agent, the agent must disclose the name of his principal(s). Such
documents as may be relevant shall be attached to each application as a
part of such application except that documents previously filed with
the Office of Foreign Assets Control may, where appropriate, be
incorporated by reference. Applicants may be required to furnish such
further information as is deemed necessary to a proper determination by
the Office of Foreign Assets Control. Any applicant or other party in
interest desiring to present additional information or discuss or argue
the application may do so at any time before or after decision.
Arrangements for oral presentation should be made with the Office of
Foreign Assets Control.
(4) Effect of denial. The denial of a license does not preclude the
reopening of an application or the filing of a further application. The
applicant or any other party in interest may at any time request
explanation of the reasons for a denial by correspondence or personal
interview.
(5) Reports under specific licenses. As a condition for the
issuance of any license, the licensee may be required to file reports
with respect to the transaction covered by the license, in such form
and at such times and places as may be prescribed in the license or
otherwise.
(6) Issuance of license. Licenses will be issued by the Office of
Foreign Assets Control acting on behalf of the Secretary of the
Treasury, or licenses may be issued by the Secretary of the Treasury
acting directly or through any specifically designated person, agency,
or instrumentality.
(c) Address. License applications, reports, and inquiries should be
addressed to the appropriate section or individual within the Office of
Foreign Assets Control, or to the Director, at the following address:
Office of Foreign Assets Control, Department of the Treasury, 1500
Pennsylvania Avenue, NW--Annex, Washington, DC 20220.
Sec. 560.802 Decisions.
The Office of Foreign Assets Control will advise each applicant of
the decision respecting filed applications. The decision of the Office
of Foreign Assets Control acting on behalf of the Secretary of the
Treasury with respect to an application shall constitute final agency
action.
Sec. 560.803 Amendment, modification, or revocation.
The provisions of this part and any rulings, licenses, whether
general or specific, authorizations, instructions, orders, or forms
issued hereunder may be amended, modified, or revoked at any time.
Sec. 560.804 Rulemaking.
(a) All rules and other public documents are issued by the
Secretary of the Treasury upon recommendation of the Director of the
Office of Foreign Assets Control. In general, rulemaking by the Office
of Foreign Assets Control involves foreign affairs functions of the
United States, and for that reason is exempt from the requirements
under the Administrative Procedure Act (5 U.S.C. 553) for notice of
proposed rulemaking, opportunity for public comment, and delay in
effective date. Wherever possible, however, it is the practice of the
Office of Foreign Assets Control to receive written submissions or hold
informal consultations with interested parties before the issuance of
any rule or other public document.
(b) Any interested person may petition the Director of the Office
of
[[Page 47074]]
Foreign Assets Control in writing for the issuance, amendment, or
repeal of any rule.
Sec. 560.805 Delegation by the Secretary of the Treasury.
Any action which the Secretary of the Treasury is authorized to
take pursuant to Executive Order 12613, Executive Order 12957,
Executive Order 12959, and any further Executive orders relating to the
national emergency declared in Executive Order 12957 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.
Sec. 560.806 Customs procedures: Goods specified in Sec. 560.201.
(a) With respect to goods specified in Sec. 560.201, and not
otherwise licensed or excepted from the scope of that section,
appropriate Customs officers shall not accept or allow any:
(1) Entry for consumption or warehouse (including any appraisement
entry, any entry of goods imported in the mails, regardless of value,
and any informal entries);
(2) Entry for immediate exportation;
(3) Entry for transportation and exportation;
(4) Withdrawal from warehouse;
(5) Admission, entry, transfer or withdrawal to or from a foreign
trade zone; or
(6) Manipulation or manufacture in a warehouse or in a foreign
trade zone.
(b) Customs officers may accept or allow the importation of
Iranian-origin goods under the procedures listed in paragraph (a) if:
(1) A specific license pursuant to this part is presented; or
(2) Instructions authorizing the transaction are received from the
Office of Foreign Assets Control.
(c) Whenever a specific license is presented to an appropriate
Customs officer in accordance with this section, one additional legible
copy of the entry, withdrawal or other appropriate document with
respect to the merchandise involved must be filed with the appropriate
Customs officers at the port where the transaction is to take place.
Each copy of any such entry, withdrawal or other appropriate document,
including the additional copy, must bear plainly on its face the number
of the license pursuant to which it is filed. The original copy of the
specific license must be presented to the appropriate Customs officers
in respect of each such transaction and must bear a notation in ink by
the licensee or person presenting the license showing the description,
quantity and value of the merchandise to be entered, withdrawn or
otherwise dealt with. This notation must be so placed and so written
that there will exist no possibility of confusing it with anything
placed on the license at the time of its issuance. If the license in
fact authorizes the entry, withdrawal, or other transaction with regard
to the merchandise, the appropriate Customs officer, or other
authorized Customs employee, shall verify the notation by signing or
initialing it after first assuring himself that it accurately describes
the merchandise it purports to represent. The license shall thereafter
be returned to the person presenting it and the additional copy of the
entry, withdrawal or other appropriate document shall be forwarded by
the appropriate Customs officer to the Office of Foreign Assets
Control.
(d) If it is unclear whether an entry, withdrawal or other action
affected by this section requires a specific license from the Office of
Foreign Assets Control, the appropriate Customs officer may withhold
any action thereon and shall advise such person to communicate directly
with the Office of Foreign Assets Control to request that instructions
be sent to the Customs officer to authorize him to take action with
regard thereto.
Sec. 560.807 Rules governing availability of information.
(a) The records of the Office of Foreign Assets Control which are
required by 5 U.S.C. 552 to be made available to the public shall be
made available in accordance with the definitions, procedures, payment
of fees, and other provisions of the Regulations on the Disclosure of
Records of the Office of the Secretary and of other bureaus and offices
of the Department of Treasury issued pursuant to 5 U.S.C. 552 and
published at 31 CFR part 1.
(b) The records of the Office of Foreign Assets Control required by
the Privacy Act (5 U.S.C. 552a) to be made available to an individual
shall be made available in accordance with the definitions, procedures,
requirements for payment of fees, and other provisions of the
Regulations on Disclosure of Records of the Departmental Offices and of
other bureaus and offices of the Department of the Treasury issued
under 5 U.S.C. 552a and published at 31 CFR part 1.
(c) Any form issued for use in connection with the Iranian
Transactions Regulations may be obtained in person or by writing to the
Office of Foreign Assets Control, Department of the Treasury, 1500
Pennsylvania Avenue, NW--Annex, Washington, DC 20220 or by calling 202/
622-2480.
Subpart I--Paperwork Reduction Act
Sec. 560.901 Paperwork Reduction Act notice.
The information collection requirements in Secs. 560.601, 560.602,
and 560.801 have been approved by the Office of Management and Budget
and assigned control number 1505-0106.
Dated: August 23, 1995.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
Approved: August 28, 1995.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 95-22387 Filed 9-6-95; 5:01 pm]
BILLING CODE 4810-25-F