[Federal Register Volume 65, Number 118 (Monday, June 19, 2000)]
[Rules and Regulations]
[Pages 38165-38166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15390]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 500


Foreign Assets Control Regulations

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 Foreign Assets Control Regulations to 
implement the President's September 17, 1999, determination to ease 
sanctions against North Korea. This final rule authorizes new 
financial, trade, and other transactions with North Korea and its 
nationals. An import notification and approval procedure will be 
required for all imports from North Korea. This final rule does not 
unblock assets within U.S. jurisdiction blocked prior to this time, nor 
does it affect enforcement actions with respect to prior violations of 
the embargo.

EFFECTIVE DATE: June 19, 2000.

FOR FURTHER INFORMATION CONTACT: Dennis P. Wood, Chief of Compliance 
Programs, tel.: 202/622-2490, Steve Pinter, Acting Chief of Licensing, 
tel.: 202/622-2480, or Barbara Hammerle, Deputy 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 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 Acrobat7 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 September 17, 1999, the President announced his decision to ease 
economic sanctions against North Korea in order to improve overall 
relations with North Korea, to support the Agreed Framework, and to 
encourage North Korea to continue to refrain from testing long-range 
missiles. Accordingly, the Office of Foreign Assets Control is amending 
the Foreign Assets Control Regulations, 31 CFR part 500 (the ``FACR''), 
to add Sec. 500.586, authorizing new transactions involving property in 
which North Korean nationals have an interest. The effect of this 
amendment is that transactions involving such property coming within 
the jurisdiction of the United States or into the possession or control 
of persons subject to the jurisdiction of the United States after June 
19, 2000 or in which an interest of North Korea or a national thereof 
arises after that time, are authorized by general license. Newly 
authorized transactions include, but are not limited to, exportation to 
North Korea, new investment, and brokering transactions (except as 
otherwise restricted under regulations administered by other federal 
agencies, e.g., the Export Administration Regulations). Importations 
from North Korea require notification to and approval from the Office 
of Foreign Assets Control for purposes of compliance with Chapter 7 of 
the Arms Export Control Act. Property blocked as of June 16, 2000. 
remains blocked. Reports due under general or specific license must 
still be filed covering activities prior to the effective date of this 
rule.
    Because the Regulations involve a foreign affairs function, the 
provisions of Executive Order 12866 and 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.

Paperwork Reduction Act

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

List of Subjects in 31 CFR Part 500

    Administrative practice and procedure, Banks, Banking, Foreign 
investments in U.S., Foreign trade, Securities, North Korea.

PART 500--FOREIGN ASSETS CONTROL REGULATIONS

    1. The authority citation for part 500 continues to read as 
follows:

    Authority: 50 U.S.C. App. 1-44; E.O. 9193, 3 CFR, 1938-1943 
Comp., p. 1174; E.O. 9989, 3 CFR, 1943-1948 Comp., p. 748.

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

    2. Section 500.533 is revised to read as follows:


Sec. 500.533  Exportations, reexportations, and incidental 
transactions.

    (a) All transactions ordinarily incident to the exportation of 
goods, software, or technology (including technical data) from the 
United States or reexportation of U.S.-origin goods, software, or 
technology from a foreign country to any person in a designated foreign 
country or to the government of a designated foreign country, are 
hereby authorized, provided that the exportation or reexportation is 
licensed or otherwise authorized by the Department of Commerce under 
the Export Administration Regulations (15 CFR parts 730-799).
    (b) The general license does not authorize the financing of any 
transaction from a blocked account.

    Note to Sec.  500.533: See note to Sec.  500.586(b).


    3. Section 500.586 is added to subpart E to read as follows:


Sec. 500.586  Authorization of new transactions concerning certain 
North Korean property.

    (a) Subject to the limitations in paragraph (b) of this section,

[[Page 38166]]

transactions in which North Korea or a national thereof has an interest 
are authorized where:
    (1) The property comes within the jurisdiction of the United States 
or into the control or possession of a person subject to the 
jurisdiction of the United States on or after June 19, 2000; or
    (2) The interest in the property of North Korea or a North Korean 
national arises on or after June 19, 2000.
    (b)(1) Unless otherwise authorized by the Office of Foreign Assets 
Control, all property and interests in property of North Korea or its 
nationals that were blocked pursuant to subpart B of this part as of 
June 16, 2000, remain blocked and subject to the prohibitions and 
requirements of this part;
    (2)(i) The importation of products into the United States from 
North Korea requires approval from the Office of Foreign Assets 
Control. The person seeking to import products into the United States 
must provide information relevant to the determination whether the 
product was produced by
    (A) A foreign person whose actions triggered import sanctions under 
sections 73 and 74 of the Arms Export Control Act;
    (B) An activity of the government of North Korea relating to the 
development or production of any missile equipment or technology; or
    (C) An activity of the government of North Korea affecting the 
development or production of electronics, space systems or equipment, 
and military aircraft.
    (ii) Those seeking to import products from North Korea into the 
United States must submit all available information satisfying the 
requirements of paragraph (b)(2)(i) of this section; the name, address, 
telephone number, facsimile number, and e-mail address of the importer; 
a description of the product to be imported, including quantity and 
cost; the name and address of the producer of the product; the name of 
the location where the product was produced; and the name and address 
of the North Korean exporter. Requests for import review should be 
submitted by mail to North Korea Unit, Office of Foreign Assets 
Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue, NW, 
Annex, Washington, DC 20220. Upon review of the submitted information, 
the Office of Foreign Assets Control will issue a letter indicating the 
results of the review to the person seeking to import the product.
    (3) Except as authorized by Sec. 500.580 or unless otherwise 
authorized by the Office of Foreign Assets Control, persons subject to 
the jurisdiction of the United States are prohibited from engaging in 
any transfer from the government of North Korea:
    (i) Constituting a donation to a person subject to the jurisdiction 
of the United States; or
    (ii) With respect to which a person subject to the jurisdiction of 
the United States knows (including knowledge based on advice from an 
agent of the United States Government), or has reasonable cause to 
believe, that the transfer poses a risk of furthering terrorist acts in 
the United States.
    (4) This section does not affect any open enforcement action 
initiated by the U.S. government prior to June 19, 2000 or any seizure, 
forfeiture, penalty, or liquidated damages case that is considered 
closed in accordance with U.S. 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 provision 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 
been commenced or of goods that have been forfeited to the U.S. 
Government, other than though U.S. Customs disposition by selling at 
auction.

    Note to Sec.  500.586(b): The exportation and reexportation of 
items may be subject to license application requirements under 
regulations administered by other federal agencies (see e.g., the 
Export Administration Regulations administered by the Department of 
Commerce). Section 500.533 of this part continues to provide 
authority for transactions incident to the exportation and 
reexportation of items authorized by the Department of Commerce. It 
should also be noted that the shipment of strategic goods from a 
foreign country to North Korea by persons subject to the 
jurisdiction of the United States remains prohibited by 31 CFR part 
505. The application requirements for a specific license relating to 
such goods are found in 31 CFR 501.801.


    Dated: June 13, 2000.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: June 13, 2000.
Elisabeth A. Bresee,
Assistant Secretary (Enforcement), Department of the Treasury.
[FR Doc. 00-15390 Filed 6-16-00; 8:45 am]
BILLING CODE 4810-25-P