[Federal Register Volume 63, Number 217 (Tuesday, November 10, 1998)]
[Rules and Regulations]
[Pages 62940-62942]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30126]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 560


Iranian Transactions Regulations: Reporting on Foreign 
Affiliates' Oil-Related Transactions

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule; amendment.

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SUMMARY: The Treasury Department is amending the Iranian Transactions 
Regulations to terminate the reporting requirement for subsidiaries' 
Iranian petrochemical transactions and Iran-related sales of services 
(including insurance and financing) and goods (including oilfield 
supplies and equipment).

EFFECTIVE DATE: November 10, 1998.

FOR FURTHER INFORMATION CONTACT: Michael Layne, Blocked Assets Division 
(tel: 202/622-2440), or William B. Hoffman, Chief Counsel (tel.: 202/
622-2410), Office of Foreign Assets Control, Department of the 
Treasury, Washington, DC 20220.

SUPPLEMENTARY INFORMATION:

Electronic Availability

    This document is available as an electronic file on The Federal 
Bulletin Board the day of publication in the

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Federal Register. By modem, dial 202/512-1387 and type ``/GO FAC,'' or 
call 202/512-1530 for disk or paper copies. This file is available for 
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readable (*.PDF) formats. For Internet access, the address for use with 
the World Wide Web (Home Page), Telnet, or FTP protocol is: 
fedbbs.access.gpo.gov. The document is also accessible for downloading 
in ASCII format without charge from Treasury's Electronic Library 
(``TEL'') in the ``Research 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). Additional information concerning the programs of the 
Office of Foreign Assets Control is available for downloading from the 
Office's Internet Home Page: http://www.treas.gov/ofac, or in fax form 
through the Office's 24-hour fax-on-demand service: call 202/622-0077 
using a fax machine, fax modem, or (within the United States) a touch-
tone telephone.

Background

    The Office of Foreign Assets Control (``OFAC'') introduced 
reporting requirements on certain oil-related transactions by foreign 
affiliates of U.S. persons as an amendment to the Iranian Transactions 
Regulations in September 1995 (60 FR 47061, Sept. 11, 1995 -- the 
``Regulations''). This amendment implemented the President's 
declaration of national emergency and imposition of sanctions against 
Iran, contained in Executive Order 12957 of March 15, 1995, 60 FR 
14615, 3 CFR, 1995 Comp., p. 332; and Executive Order 12959 of May 6, 
1995, 60 FR 24757, 3 CFR, 1995 Comp., p. 356. On November 15, 1996, 
OFAC clarified that the scope of the reporting requirements in 
Sec. 560.603 extends beyond transactions directly involving crude oil 
or natural gas to include transactions involving petrochemicals and the 
provision of certain goods (including oilfield supplies and equipment) 
and services (including financing and insurance) (61 FR 58480, Nov. 15, 
1996). On April 23, 1997, OFAC further amended the Sec. 560.603 
reporting requirements to require U.S. persons to file reports only 
with respect to foreign affiliates engaging in a reportable transaction 
or transactions totaling $1,000,000 or more during the calendar 
quarter. The foreign affiliate's relationship to the U.S. person, 
including percentage of direct and indirect ownership, no longer had to 
be reported. Reports were to be filed within 60 days, rather than 15 
days, of the end of each calendar quarter. The present amendment 
eliminates Iranian-origin petrochemicals from the definition of 
``reportable transactions'' and terminates the reporting requirements 
for subsidiaries' sales of the services and goods noted above. The 
revised Sec. 560.603 retains the reporting requirements covering crude 
oil and natural gas.
    Since 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.

Paperwork Reduction Act

    Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), 
the collections of information related to the Regulations have been 
approved by the Office of Management and Budget (``OMB'') under control 
number 1505-0106. An agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information unless the 
collection of information displays a valid control number.

List of Subjects in 31 CFR Part 560

    Administrative practice and procedure, Agricultural commodities, 
Banks, banking, Exports, Foreign trade, Imports, Information, 
Investments, Iran, Penalties, Reporting and recordkeeping requirements, 
Services, Specially designated nationals, Terrorism, Transportation.
    For the reasons set forth in the preamble, 31 CFR part 560 is 
amended as follows:

PART 560--IRANIAN TRANSACTIONS REGULATIONS

    1. The authority citation for part 560 is revised to read as 
follows:
    Authority: 3 U.S.C. 301; 18 U.S.C. 2332d; 22 U.S.C. 2349aa-9; 31 
U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 
Stat. 890 (28 U.S.C. 2461 note); E.O. 12613, 52 FR 41940, 3 CFR, 
1987 Comp., p. 256; E.O. 12957, 60 FR 14615, 3 CFR, 1995 Comp., p. 
332; E.O. 12959, 60 FR 24757, 3 CFR, 1995 Comp., p. 356; E.O. 13059, 
62 FR 44531, 3 CFR, 1997 Comp., p. 217.

Subpart F--Reports

    2. Section 560.603 is revised to read as follows:


Sec. 560.603  Reports on oil transactions engaged in by foreign 
affiliates.

    (a) Requirement for reports. A report must be filed with the Office 
of Foreign Assets Control with respect to each foreign affiliate of a 
United States person that engaged in a reportable transaction, as 
defined in paragraph (b) of this section, during the calendar quarter. 
Reports are due within 60 days after the end of each calendar quarter.
    (b) Definitions. For purposes of this section:
    (1) The term reportable transaction means any purchase, sale, or 
swap of Iranian-origin crude oil or natural gas. For purposes of this 
paragraph (b), a purchase, sale, or swap is deemed to have occurred as 
of the date of the bill of lading used in connection with such 
transaction.
    (2) The term foreign affiliate means a person or entity other than 
a United States person (see Sec. 560.314) which is organized or located 
outside the United States and which is owned or controlled by a United 
States person or persons.
    (c) Who must report. A United States person must file a report with 
respect to each foreign affiliate owned or controlled by it which 
engaged in a reportable transaction or transactions during the calendar 
quarter. For the calendar quarter beginning October 1, 1996, and all 
subsequent quarters, a United States person must file a report only as 
to each foreign affiliate owned or controlled by it which engaged in a 
reportable transaction or transactions totaling $1,000,000 or more 
during the 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.
    (d) What must be reported. (1) Part I of the report must provide 
the name, address, and principal place of business of the United States 
person; its place of incorporation or organization if an entity; and 
the name, title, and telephone number of the individual to contact 
concerning the report.
    (2) Part II of the report must provide, with respect to the foreign 
affiliate, its name and address; the type of entity, e.g., corporation, 
partnership, limited liability company; the country of its 
incorporation or organization; and its principal place of business.

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    (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 the transaction, e.g., purchase, sale, swap;
    (ii) A description of the product involved;
    (iii) The name of the Iranian or third country party or parties 
involved in the transaction;
    (iv) The currency and amount of the transaction, and corresponding 
United States dollar value of the transaction if not denominated in 
United States dollars.
    (e) 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.
    (f) 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.

    Dated: October 9, 1998.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: October 22, 1998.
Elisabeth A. Bresee
Assistant Secretary (Enforcement), Department of the Treasury.
[FR Doc. 98-30126 Filed 11-5-98; 3:17 pm]
BILLING CODE 4810-25-F