[Federal Register Volume 64, Number 210 (Monday, November 1, 1999)]
[Rules and Regulations]
[Pages 58789-58792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28470]



[[Page 58789]]

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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 538, 550 and 560


Sudanese Sanctions Regulations; Libyan Sanctions Regulations; 
Iranian Transactions Regulations: Licensing of Commercial Sales, 
Exportation and Reexportation of Agricultural Commodities and Products, 
Medicine, and Medical Equipment; Iranian Accounts on the Books of U.S. 
Depository Institutions; Informational Materials; Visas

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule; amendments.

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SUMMARY: The Treasury Department is amending provisions relating to the 
financing of agricultural and medical sales appearing in the Sudanese 
Sanctions Regulations, the Libyan Sanctions Regulations, and the 
Iranian Transactions Regulations. While general licenses continue to 
prohibit financing of sales by entities of the Governments of Sudan, 
Libya or Iran, the amendments remove language prohibiting the issuance 
of specific licenses authorizing financing by entities of those 
governments. New appendices are added to identify approved eligible 
procurement bodies of the Governments of Libya and Iran. Technical 
changes are made in all three sets of regulations with respect to 
licensing requirements of other Federal agencies. Technical changes are 
made in the Iranian Transactions Regulations concerning debits and 
credits to Iranian accounts on the books of U.S. depository 
institutions and concerning eligible purchasers. Finally, technical 
changes are made to the Iranian Transactions Regulations to revise 
language on informational materials and on ``H'' (temporary worker) 
visas.

EFFECTIVE DATE: October 27, 1999.

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

SUPPLEMENTARY INFORMATION:

Electronic and Facsimile Availability

    This document is available as an electronic file on The Federal 
Bulletin Board the day of publication in the Federal Register. By 
modem, dial 202/512-1387 and type ``/GO FAC,'' or call 202/512-1530 for 
disk or paper copies. This file is available for downloading without 
charge in ASCII and Adobe Acrobat 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. This document 
and additional information concerning the programs of the Office of 
Foreign Assets Control are 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

    On April 28, 1999, President Clinton announced that existing 
unilateral economic sanctions programs would be amended to modify 
licensing policies to allow specific licensing of the commercial sale 
of agricultural commodities and products, medicine and medical 
equipment where the United States Government has the discretion to 
issue such licenses. On August 2, 1999, the Treasury Department's 
Office of Foreign Assets Control (``OFAC'') published in the Federal 
Register (64 FR 41784) amendments to the Sudanese Sanctions 
Regulations, 31 CFR part 538 (the ``SSR''), the Libyan Sanctions 
Regulations, 31 CFR part 550 (the ``LSR''), and the Iranian 
Transactions Regulations, 31 CFR part 560 (the ``ITR'') (collectively, 
the ``Regulations''), to make available both general and specific 
licenses governing commercial sales of such goods.
    The amendments permitted sellers, pursuant to an OFAC general 
license, to negotiate and sign executory contracts for commercial sales 
and exportation or reexportation of these agricultural or medical items 
to the target countries or their governments. Performance under such 
executory contracts was to be made contingent upon receipt of an OFAC 
specific license. Regulations, Secs. 538.523, 550.569 and 560.530. 
Persons wishing to make commercial sales of certain bulk agricultural 
commodities to the target countries or their governments could apply 
for specific licenses to permit future entry into and performance of 
contracts for such sales. Regulations, Sec. 538.524 and SSR, appendix 
A; Sec. 550.570 and LSR, appendix A; Sec. 560.531 and ITR, appendix B. 
The Regulations made all sales to the target countries subject to a 
series of requirements intended to ensure that such sales did not 
improperly benefit the target countries' governments.
    With respect to payment for and financing of sales of agricultural 
and medical items, the Regulations provided by general license that 
parties were authorized, among other things, to utilize financing by 
third-country financial institutions that were not U.S. persons or 
target-country government banks. U.S. financial institutions were 
authorized by general license to advise or confirm such financing by 
third-country financial institutions, but specific licenses were 
required for alternate payment terms. Regulations, Secs. 538.525, 
550.571, and 560.532.
    OFAC is amending provisions relating to payment for and financing 
of sales of agricultural and medical items. The general licenses in 
Secs. 538.525(a), 550.571(a), and 560.532(a) of the Regulations 
continue to prohibit financing of sales by entities of the Governments 
of Sudan, Libya or Iran. Sections 538.525(b), 550.571(b), and 
560.532(b), which provide for the specific licensing of alternative 
financing terms, are amended to remove language prohibiting the 
issuance of specific licenses authorizing financing by entities of 
those governments.
    Technical revisions are made to language on licensing requirements 
of other Federal agencies in Secs. 538.523(b)(4), 538.524(b)(4), and 
538.526(b)(3) of the SSR; 550.569(b)(4), 550.570(b)(4) and 
550.572(b)(3) of the LSR; and 560.530(b)(4), 560.531(b)(4), and 
560.533(b)(3) of the ITR. Approved eligible procurement bodies of the 
Governments of Libya and Iran are identified in new appendices to the 
LSR and ITR.
    Sections 550.569(a) of the LSR and 560.530(a) of the ITR are 
revised to conform the language on executory contracts to that in 
Sec. 538.523(a) of the SSR. Technical changes are made to 
Secs. 560.532(c) and 560.533(c) of the ITR to clarify that the 
prohibition on debits and credits to Iranian accounts refers only to 
accounts of persons located in Iran or of the Government of Iran 
maintained on the books of a U.S. depository institution.
    OFAC is making technical changes to the ITR unrelated to the August 
1999 amendments. Section 560.210(c)(2), with respect to informational 
materials, is amended to remove a reference to royalties. Section 
560.505(c) is amended to revise the reference from ``H-1b (temporary 
worker)'' to ``H (temporary worker).''

Paperwork Reduction Act

    As authorized in the APA, the Regulations are being issued without 
prior notice and public comment procedure. The collections of

[[Page 58790]]

information related to the Regulations are contained in 31 CFR part 501 
(the ``Reporting and Procedures Regulations''). Pursuant to the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of 
information have been approved by the Office of Management and Budget 
(``OMB'') under control number 1505-0164. 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.
    Because the Regulations involve a foreign affairs function, 
Executive Order 12866 and the provisions of the APA requiring notice of 
proposed rulemaking, opportunity for public participation, and delay in 
effective date, are inapplicable. Because no notice of proposed 
rulemaking is required for this rule, the Regulatory Flexibility Act (5 
U.S.C. 601-612) does not apply.

List of Subjects

31 CFR Part 538

    Administrative practice and procedure, Agricultural commodities, 
Banks, banking, Blocking of assets, Drugs, Exports, Foreign trade, 
Humanitarian aid, Imports, Medical devices, Penalties, Reporting and 
recordkeeping requirements, Specially designated nationals, Sudan, 
Terrorism, Transportation.

31 CFR Part 550

    Administrative practice and procedure, Agricultural commodities, 
Banks, banking, Blocking of assets, Drugs, Exports, Foreign investment, 
Foreign trade, Government of Libya, Imports, Libya, Loans, Medical 
devices, Penalties, Reporting and recordkeeping requirements, 
Securities, Services, Specially designated nationals, Terrorism, Travel 
restrictions.

31 CFR Part 560

    Administrative practice and procedure, Agricultural commodities, 
Banks, banking, Drugs, Exports, Foreign trade, Imports, Information, 
Investments, Iran, Loans, Medical devices, Penalties, Reporting and 
recordkeeping requirements, Services, Specially designated nationals, 
Terrorism, Transportation.
    For the reasons set forth in the preamble, 31 CFR parts 538, 550 
and 560 are amended as set forth below:

PART 538--SUDANESE SANCTIONS REGULATIONS

    1. The authority citation for part 538 continues to read as 
follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; E.O. 13067, 62 FR 59989, 3 CFR, 1997 Comp., p. 230.

Subpart E--Licenses, Authorizations, and Statements of Licensing 
Policy

    2. In Sec. 538.523, revise the section heading and the first 
sentence of paragraph (b)(4) to read as follows:


Sec. 538.523  Commercial sales, exportation and reexportation of 
agricultural commodities and products, medicine, and medical equipment.

* * * * *
    (b) * * *
    (4) Make any performance involving the exportation or reexportation 
of any goods, technology or services (including technical data, 
software, or information) that are subject to license application 
requirements of another Federal agency contingent upon the prior 
authorization of that agency. * * *
* * * * *
    3. In Sec. 538.524, revise the section heading and the first 
sentence of paragraph (b)(4) to read as follows:


Sec. 538.524  Commercial sales, exportation and reexportation of bulk 
agricultural commodities.

* * * * *
    (b) * * *
    (4) Make any performance involving the exportation or reexportation 
of any goods, technology or services (including technical data, 
software, or information) that are subject to license application 
requirements of another Federal agency contingent upon the prior 
authorization of that agency. * * *
* * * * *
    4. In Sec. 538.525, revise the first sentence of paragraph (b) to 
read as follows:


Sec. 538.525  Payment for and financing of commercial sales of 
agricultural commodities and products, medicine, and medical equipment.

* * * * *
    (b) Specific licenses for alternate payment terms. Specific 
licenses may be issued on a case-by-case basis for payment terms and 
trade financing not authorized by the general license in paragraph (a) 
of this section for sales pursuant to Secs. 538.523 and 538.524. * * *
* * * * * *
    5. In Sec. 538.526, revise the first sentence of paragraph (b)(3) 
to read as follows:


Sec. 538.526  Brokering sales of bulk agricultural commodities.

* * * * *
    (b) * * *
    (3) Make any performance involving the exportation or reexportation 
of any goods, technology or services (including technical data, 
software, or information) that are subject to license application 
requirements of another Federal agency contingent upon the prior 
authorization of that agency. * * *
* * * * *

PART 550--LIBYAN SANCTIONS REGULATIONS

    1. The authority citation for part 550 continues to read as 
follows:

    Authority: 3 U.S.C. 301; 18 U.S.C. 2332d; 22 U.S.C. 287c, 
2349aa-8 and 2349aa-9; 31 U.S.C. 321(b); 49 U.S.C. 40106(b); 50 
U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 
U.S.C. 2461 note); E.O. 12543, 51 FR 875, 3 CFR, 1986 Comp., p. 181; 
E.O. 12544, 51 FR 1235, 3 CFR, 1986 Comp., p. 183; E.O. 12801, 57 FR 
14319, 3 CFR, 1992 Comp., p. 294.

Subpart E--Licenses, Authorizations, and Statements of Licensing 
Policy

    2. In Sec. 550.569, revise the section heading, paragraph (a) 
introductory text, and the first sentence of paragraph (b)(4) to read 
as follows:


Sec. 550.569  Commercial sales, exportation and reexportation of 
agricultural commodities and products, medicine, and medical equipment.

    (a) General license for executory contracts. Except as provided in 
paragraph (c) of this section, entry into executory contracts is 
authorized for the following transactions with individuals in Libya 
acting for their own account, nongovernmental entities in Libya or 
procurement bodies of the Government of Libya identified by the Office 
of Foreign Assets Control as not being affiliated with the coercive 
organs of the state, or with persons in third countries purchasing 
specifically for resale to any of the foregoing, provided that 
performance of the executory contracts (including any preparatory 
activities, payments or deposits related to such executory contracts) 
is contingent upon the prior authorization of the Office of Foreign 
Assets Control in or pursuant to this part:
* * * * *
    (b) * * *
    (4) Make any performance involving the exportation or reexportation 
of any goods, technology or services (including technical data, 
software, or information) that are subject to license application 
requirements of another Federal agency contingent upon the prior 
authorization of that agency. * * *
* * * * *

[[Page 58791]]

    3. In Sec. 550.570, revise the section heading and the first 
sentence of paragraph (b)(4) to read as follows:


Sec. 550.570  Commercial sales, exportation and reexportation of bulk 
agricultural commodities.

* * * * *
    (b) * * *
    (4) Make any performance involving the exportation or reexportation 
of any goods, technology or services (including technical data, 
software, or information) that are subject to license application 
requirements of another Federal agency contingent upon the prior 
authorization of that agency. * * *
* * * * *
    4. In Sec. 550.571, revise the first sentence of paragraph (b) to 
read as follows:


Sec. 550.571  Payment for and financing of commercial sales of 
agricultural commodities and products, medicine, and medical equipment.

* * * * *
    (b) Specific licenses for alternate payment terms. Specific 
licenses may be issued on a case-by-case basis for payment terms and 
trade financing not authorized by the general license in paragraph (a) 
of this section for sales pursuant to Secs. 550.569 and 550.570. * * *
* * * * *
    5. In Sec. 550.572, revise the first sentence of paragraph (b)(3) 
to read as follows:


Sec. 550.572  Brokering sales of bulk agricultural commodities.

* * * * *
    (b) * * *
    (3) Make any performance involving the exportation or reexportation 
of any goods, technology or services (including technical data, 
software, or information) that are subject to license application 
requirements of another Federal agency contingent upon the prior 
authorization of that agency. * * *
* * * * *
    6. Appendix B is added to part 550 to read as follows:

Appendix B to Part 550--Eligible Procurement Bodies

    This Appendix B sets forth eligible procurement bodies of the 
Government of Libya identified by the Office of Foreign Assets 
Control as not being affiliated with the coercive organs of the 
state. See Sec. 550.570(e).
    National Supply Corporation (a.k.a. National Supplies 
Corporation; a.k.a. NASCO)

PART 560--IRANIAN TRANSACTIONS REGULATIONS

    1. The authority citation for part 560 continues 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 B--Prohibitions

    2. In Sec. 560.210, revise the last sentence of paragraph (c)(2) to 
read as follows:


Sec. 560.210  Exempt transactions.

* * * * *
    (c) * * *
    (2) * * * Transactions that are prohibited notwithstanding this 
section include, but are not limited to, payment of advances for 
information and informational materials not yet created and completed 
(with the exception of prepaid subscriptions for widely circulated 
magazines and other periodical publications), and provision of services 
to market, produce or co-produce, create or assist in the creation of 
information and informational materials.
* * * * *

Subpart E--Licenses, Authorizations and Statements of Licensing 
Policy


Sec. 560.505  [Amended]

    3. In Sec. 560.505, amend paragraph (c) by revising the phrase ``H-
1b (temporary worker)'' to read ``H (temporary worker)''.
    4. In Sec. 560.530, revise the section heading, paragraph (a) 
introductory text, and the first sentence of paragraph (b)(4) to read 
as follows:


Sec. 560.530  Commercial sales, exportation and reexportation of 
agricultural commodities and products, medicine, and medical equipment.

    (a) General license for executory contracts. Except as provided in 
paragraph (c) of this section, entry into executory contracts is 
authorized for the following transactions with individuals in Iran 
acting for their own account, nongovernmental entities in Iran or 
procurement bodies of the Government of Iran identified by the Office 
of Foreign Assets Control as not being affiliated with the coercive 
organs of the state, or with persons in third countries purchasing 
specifically for resale to any of the foregoing, provided that 
performance of the executory contracts (including any preparatory 
activities, payments or deposits related to such executory contracts) 
is contingent upon the prior authorization of the Office of Foreign 
Assets Control in or pursuant to this part:
* * * * *
    (b) * * *
    (4) Make any performance involving the exportation or reexportation 
of any goods, technology or services (including technical data, 
software, or information) that are subject to license application 
requirements of another Federal agency contingent upon the prior 
authorization of that agency. * * *
* * * * *
    5. In Sec. 560.531, revise the section heading and the first 
sentence of paragraph (b)(4) to read as follows:


Sec. 560.531  Commercial sales, exportation and reexportation of 
certain bulk agricultural commodities.

* * * * *
    (b) * * *
    (4) Make any performance involving the exportation or reexportation 
of any goods, technology or services (including technical data, 
software, or information) that are subject to license application 
requirements of another Federal agency contingent upon the prior 
authorization of that agency. * * *
* * * * *
    6. In Sec. 560.532, revise the first sentence in paragraph (b) and 
paragraph (c) to read as follows:


Sec. 560.532  Payment for and financing of commercial sales of 
agricultural commodities and products, medicine, and medical equipment.

* * * * *
    (b) Specific licenses for alternate payment terms. Specific 
licenses may be issued on a case-by-case basis for payment terms and 
trade financing not authorized by the general license in paragraph (a) 
of this section for sales pursuant to Secs. 560.530 and 560.531. * * *
    (c) No debits or credits to Iranian accounts on the books of U.S. 
depository institutions. Nothing in this section authorizes payment 
terms or trade financing involving a debit or credit to an account of a 
person located in Iran or of the Government of Iran maintained on the 
books of a U.S. depository institution.
* * * * *
    7. In Sec. 560.533, revise the first sentence of paragraph (b)(3) 
and paragraph (c) to read as follows:


Sec. 560.533  Brokering sales of bulk agricultural commodities.

* * * * *

[[Page 58792]]

    (b) * * *
    (3) Make any performance involving the exportation or reexportation 
of any goods, technology or services (including technical data, 
software, or information) that are subject to license application 
requirements of another Federal agency contingent upon the prior 
authorization of that agency. * * *
    (c) No debits or credits to Iranian accounts on the books of U.S. 
depository institutions. Payment for any brokerage fee earned pursuant 
to this section may not involve a debit or credit to an account of a 
person located in Iran or of the Government of Iran maintained on the 
books of a U.S. depository institution.
* * * * *
    8. Appendix C is added to part 560 to read as follows:

Appendix C to Part 560--Eligible Procurement Bodies

    This Appendix C sets forth eligible procurement bodies of the 
Government of Iran identified by the Office of Foreign Assets 
Control as not being affiliated with the coercive organs of the 
state. See Sec. 560.531(e).
    Government Trading Corporation (a.k.a. GTC).
    State Livestock and Logistics Co. (a.k.a. State Livestock 
Affairs Logistics; a.k.a. SLAL).

    Dated: October 27, 1999.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.

    Approved: October 27, 1999.
Elisabeth A. Bresee,
Assistant Secretary (Enforcement), Department of the Treasury.
[FR Doc. 99-28470 Filed 10-27-99; 2:25 pm]
BILLING CODE 4810-25-P