[Federal Register Volume 65, Number 86 (Wednesday, May 3, 2000)]
[Rules and Regulations]
[Pages 25642-25644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11009]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 560


Iranian Transactions Regulations: Licensing of Imports of, and 
Dealings in, Certain Iranian-Origin Foodstuffs and Carpets

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule; amendments.

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SUMMARY: The Treasury Department is amending the Iranian Transactions 
Regulations to add general licenses authorizing the importation into 
the United States of, and dealings in, certain Iranian-origin 
foodstuffs and carpets and related transactions.

EFFECTIVE DATE: April 28, 2000.

FOR FURTHER INFORMATION CONTACT: Steven I. Pinter, Chief of Licensing 
(tel.: 202/622-2480), Barbara C. Hammerle, Deputy 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 March 17, 2000, Secretary of State Madeleine K. Albright 
announced that economic sanctions against Iran would be eased to allow 
Americans to purchase and import carpets and food products such as 
dried fruits, nuts, and caviar from Iran. To implement this policy, the 
Treasury Department's Office of Foreign Assets Control (``OFAC'') is 
amending the Iranian Transactions Regulations, 31 CFR part 560 (the 
``Regulations''), to authorize, by general license, the importation 
into the United States of, and dealings in, certain Iranian-origin 
foodstuffs and carpets and related transactions.
    Section 560.534(a) of this final rule authorizes the importation 
into the United States of Iranian-origin foodstuffs intended for human 
consumption that are classified under chapters 2-23 of the Harmonized 
Tariff Schedule of the United States (``HTS''). Items that are 
classified in chapters 2-23 of the HTS that are not foodstuffs intended 
for human consumption are not authorized for importation into the 
United States by this section. This final rule also authorizes the 
importation into the United States of Iranian-origin carpets and other 
textile floor coverings and carpets used as wall hangings that are 
classified under chapter 57 or heading 9706.00.0060 of the HTS. Items 
that are classified under heading 9706.00.0060 (``Antiques of an age 
exceeding one hundred years/Other'') that are not carpets and other 
textile floor coverings or carpets used as wall hangings are not 
authorized for importation into the United States by this section.
    Section 560.534(b) of this rule authorizes U.S. persons, wherever 
located, to engage in transactions or dealings in such Iranian-origin 
foodstuffs and carpets, provided that such transactions or dealings do 
not involve a prohibited exportation to Iran or the Government of Iran. 
Section 560.534(c) sets forth the effect of this rule on open and 
closed enforcement actions initiated by the U.S. Government prior to 
the effective date of this final rule.
    Transactions ordinarily incident to the transactions authorized in 
Sec. 560.534 and necessary to give effect thereto also are authorized 
as set forth in Sec. 560.405. Section 560.405 is amended to exclude 
from the scope of permitted incidental transactions letter of credit 
services relating to transactions authorized in Sec. 560.534. See 
Sec. 560.405(e). Those letter of credit services that are authorized 
are set forth separately in Sec. 560.535. Forms of financing other than 
letters of credit are permitted as incidental transactions as set forth 
in Sec. 560.405, provided that such forms of financing do not involve a 
debit or credit to an account of a person in Iran or of the Government 
of Iran maintained on the books of a U.S. depository institution. See 
Sec. 560.534(d). Brokering services relating to transactions authorized 
by this final rule also are authorized. See Sec. 560.535(c). Examples 
of transactions permitted under this final rule are set forth in 
Secs. 560.534(e) and 560.535(e).
    Technical changes are made to Sec. 560.405, to clarify that loading 
of licensed cargo in Iran is a permitted incidental transaction, and to 
Sec. 560.524, to clarify that the importation into the United States of 
qualifying household goods and personal effects is permitted regardless 
of the time elapsed since the importer's arrival in the United States 
from Iran.
    Because the Regulations involve a foreign affairs function, 
Executive Order 12866 and the provisions of the Administrative 
Procedure Act (5 U.S.C. 553) (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.

[[Page 25643]]

Paperwork Reduction Act

    The collections of 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 were previously 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.

List of Subjects in 31 CFR Part 560

    Administrative practice and procedure, Agricultural commodities, 
Banks, banking, Carpets and rugs, Drugs, Exports, Foods, 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 part 560 is 
amended as set forth below:

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 D--Interpretations

    2. Section 560.405 is amended by revising paragraph (b), removing 
the word ``and'' at the end of paragraph (c), revising paragraph (d), 
and adding paragraph (e), to read as follows:


Sec. 560.405  Transactions incidental to a licensed transaction 
authorized.

* * * * *
    (b) Provision of any transportation services to or from Iran not 
explicitly authorized in or pursuant to this part other than loading or 
discharging licensed or exempt cargo there;
* * * * *
    (d) Financing of licensed sales for exportation or reexportation of 
agricultural commodities or products, medicine or medical equipment to 
Iran or the Government of Iran (see Sec. 560.532); and
    (e) Letter of credit services relating to transactions authorized 
in Sec. 560.534. See Sec. 560.535(a).

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

    3. Section 560.524 is amended by adding a sentence to the end of 
paragraph (b) to read as follows:


Sec. 560.524  Household goods and personal effects.

* * * * *
    (b) * * * For purposes of this paragraph, household and personal 
effects include all articles meeting the criteria stated in this 
paragraph regardless of the time elapsed since the importer's arrival 
in the United States from Iran.
    4. Section 560.534 is added to subpart E to read as follows:


Sec. 560.534  Importation into the United States of, and dealings in, 
certain foodstuffs and carpets authorized.

    (a) The importation into the United States, from Iran or a third 
country, of the following goods of Iranian-origin is authorized:
    (1) Foodstuffs intended for human consumption that are classified 
under chapters 2-23 of the Harmonized Tariff Schedule of the United 
States;
    (2) Carpets and other textile floor coverings and carpets used as 
wall hangings that are classified under chapter 57 or heading 
9706.00.0060 of the Harmonized Tariff Schedule of the United States.
    (b) United States persons, wherever located, are authorized to 
engage in transactions or dealings in or related to the categories of 
Iranian-origin goods described in paragraph (a) of this section, 
provided that the transaction or dealing does not involve or relate to 
goods, technology, or services for exportation, reexportation, sale, or 
supply, directly or indirectly, to Iran or the Government of Iran, 
other than services described in Sec. 560.405 (``Transactions 
incidental to a licensed transaction authorized'').
    (c) This section does not affect any open enforcement action 
initiated by the U.S. Government prior to April 28, 2000, or any 
seizure, forfeiture, penalty, or liquidated damages case that is 
considered closed in accordance with Customs or other agency 
regulations. This section also does not authorize the importation into 
the United States of goods that are under seizure or detention by U.S. 
Customs officials pursuant to Customs laws or other applicable 
provisions of law, until any applicable penalties, charges, duties, or 
other conditions are satisfied. This section does not authorize 
importation into the United States of goods for which forfeiture 
proceedings have commenced or of goods that have been forfeited to the 
U.S. Government, other than through Customs disposition by selling at 
auction.
    (d) Iranian accounts. Nothing in this section authorizes 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.
    (e) Examples. The following are examples of transactions permitted 
under this section:
    (1) A United States person living abroad is permitted to purchase 
or sell an Iranian-origin carpet, as long as the sale is not to Iran or 
the Government of Iran.
    (2) A United States person may process a documentary collection 
relating to the importation into the United States of Iranian-origin 
pistachios, but payment under the documentary collection may not 
involve the crediting of an account of a person located in Iran or of 
the Government of Iran maintained on the books of a U.S. depository 
institution.
    5. Section is 560.535 is added to subpart E to read as follows:


Sec. 560.535  Letters of credit and brokering services relating to 
certain foodstuffs and carpets.

    (a) Purchases from Iran or the Government of Iran. United
    States depository institutions are authorized to issue letters of 
credit in favor of a beneficiary in Iran or the Government of Iran to 
pay for purchases from Iran or the Government of Iran of the categories 
of Iranian-origin goods described in Sec. 560.534(a), provided that 
such letters of credit are not advised, negotiated, paid, or confirmed 
by the Government of Iran.
    (b) Transactions or dealings in Iranian-origin goods other than 
purchases from Iran or the Government of Iran. United States depository 
institutions are authorized to issue, advise, negotiate, pay, or 
confirm letters of credit to pay for transactions in or related to the 
categories of Iranian-origin goods described in Sec. 560.534(a), other 
than purchases from Iran or the Government of Iran, provided that such 
letters of credit are not issued, advised, negotiated, paid, or 
confirmed by the Government of Iran.
    (c) Brokering. United States persons, wherever located, are 
authorized to act as brokers for the purchase or sale of the categories 
of Iranian-origin goods described in Sec. 560.534(a), provided that the 
goods are not for exportation,

[[Page 25644]]

reexportation, sale, or supply, directly or indirectly, to Iran or the 
Government of Iran.
    (d) Iranian accounts. Nothing in this section authorizes 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.
    (e) Examples. The following are examples of transactions permitted 
under this section:
    (1) A United States depository institution may issue a letter of 
credit in favor of a person in Iran to finance the importation into the 
United States of Iranian-origin caviar; the letter of credit may be 
confirmed by a third-country bank that is not included within the 
definition of the term Government of Iran.
    (2) A United States depository institution may advise or confirm a 
letter of credit issued by a third-country bank that is not included 
within the definition of the term Government of Iran to finance the 
purchase from a third country of Iranian-origin carpets by a U.S. 
person or third-country national.
    (3) A United States person may broker the sale of Iranian-origin 
carpets from Iran to a third-country national located outside Iran.
    (4) A bank that is owned or controlled by the Government of Iran 
may forward letter of credit documents, strictly on a documentary 
collection basis, either directly to a United States depository 
institution or to a third country bank that is not included within the 
definition of the term Government of Iran and that is party to a letter 
of credit issued by a United States depository institution. The Iranian 
bank may not, however, send the documents on an ``approval'' basis, 
since it is not and cannot be party to the letter of credit.

    Note to Sec. 560.535: See Secs. 560.304 and 560.313 for 
information relating to individuals and entities that are included 
within the definition of the term Government of Iran. Some entities 
meeting this definition are listed in appendix A to this part. See 
also Sec. 560.516 for information relating to authorized transfers 
to Iran by U.S. depository institutions relating to licensed 
transactions.


    Dated: April 26, 2000.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: April 27, 2000.
Elisabeth A. Bresee,
Assistant Secretary (Enforcement), Department of the Treasury.
[FR Doc. 00-11009 Filed 4-28-00; 2:25 pm]
BILLING CODE 4810-25-P