[Federal Register Volume 68, Number 48 (Wednesday, March 12, 2003)]
[Rules and Regulations]
[Pages 11741-11745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-5952]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 560 and 575


Authorization of Certain Humanitarian Activities by 
Nongovernmental Organizations in Iraq and Iran

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Interim final rule.

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SUMMARY: The Office of Foreign Assets Control (``OFAC'') of the U.S. 
Department of the Treasury is adding new provisions to the Iraqi 
Sanctions Regulations, 31 CFR part 575, to facilitate certain 
humanitarian activities in and around Iraq. These new regulations 
provide for the establishment of a registration program that would 
authorize nongovernmental organizations to engage in humanitarian 
activities in the areas of Iraq not controlled by the Government of 
Iraq. They also permit certain humanitarian assessment missions in 
Iraq. Related regulations are being added to the Iranian Transactions 
Regulations, 31 CFR part 560, authorizing certain activities in Iran by 
nongovernmental organizations to the extent necessary to support 
authorized humanitarian activities in Iraq, as well as certain 
assessment activities in Iran.

DATES: Effective March 12, 2003. Written comments must be received no 
later than May 12, 2003.

ADDRESSES: Comments may be submitted to the Chief of Records, ATTN: 
Request for Comments, Office of Foreign Assets Control, Department of 
the Treasury, 1500 Pennsylvania Avenue, NW., Washington, DC 20220. 
Alternatively, comments may be submitted via facsimile to the Chief of 
Records at (202) 622-1657 or via OFAC's Web site <http://www.treas.gov/offices/enforcement/ofac/comment.html.

FOR FURTHER INFORMATION CONTACT: Chief of Licensing, tel. (202) 622-
2480, Chief of Compliance Programs, tel. (202) 622-2490, or Chief 
Counsel, tel. (202) 622-2410.

SUPPLEMENTARY INFORMATION:

Background

    On August 2, 1990, upon Iraq's invasion of Kuwait, the President 
issued Executive Order 12722, declaring a national emergency with 
respect to Iraq. This order, issued under the authority of, inter alia, 
the International Emergency Economic Powers Act (50 U.S.C. 1701 et 
seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.), and 
section 301 of title 3 of the U.S. Code, imposed economic sanctions, 
including a complete trade embargo, against Iraq. In keeping with 
United Nations Security Council Resolution 661 of August 6, 1990, and 
under the United Nations Participation Act (22 U.S.C. 287c), the 
President also issued Executive Order 12724 of August 9, 1990, which 
imposed additional restrictions. The Iraqi Sanctions Regulations, 31 
CFR part 575, implement Executive Orders 12722 and 12724 and are 
administered by the Treasury Department's Office of Foreign Assets 
Control (``OFAC'').
    The new sections published today are intended to facilitate 
humanitarian activities with respect to Iraq, including certain 
activities in neighboring Iran that are directly incidental and 
essential to such humanitarian activities. Section 575.527 provides for 
the case-by-case authorization of nongovernmental organizations to 
conduct certain defined humanitarian activities in the areas of Iraq 
not controlled by the Government of Iraq. These provisions incorporate 
the procedures and requirements set forth in 31 CFR 501.801(c) with 
respect to the application for obtaining a registration number. 
Applications from interested

[[Page 11742]]

nongovernmental organizations should be submitted to OFAC as described 
in section 575.527. Section 575.528 authorizes, by general license, 
more limited survey or assessment missions in Iraq (including those 
areas controlled by the Government of Iraq).
    Sections 575.329 and 575.330 provide definitions of the terms 
``areas of Iraq not controlled by the Government of Iraq,'' 
``humanitarian activities,'' ``humanitarian purposes,'' and 
``humanitarian support.''
    Section 560.536 provides that nongovernmental organizations 
authorized by specific license or under the new provisions of the Iraqi 
Sanctions Regulations may conduct certain activities in Iran that are 
directly incidental to their authorized humanitarian activities in 
Iraq. Section 560.537 authorizes such organizations to conduct limited 
survey or assessment missions in Iran pertaining to the planning of or 
preparation for the provision of humanitarian support to the Iraqi 
people.
    Where relevant, each of the regulatory changes referenced above 
indicates that, with limited exceptions, exportations and re-
exportations to Iraq and Iran remain proscribed. To the extent that 
nongovernmental organizations seek specific authorization from OFAC for 
the exportation or re-exportation of any item to Iraq or Iran, they are 
advised to ascertain the Export Control Classification Number assigned 
to the item by the Department of Commerce's Bureau of Industry and 
Security prior to submitting their request to OFAC.

Request for Comments

    Because amendment of these regulations involves 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. However, because of the 
importance of the issues addressed in these regulations, this rule is 
being issued in interim form and comments will be considered in the 
development of final regulations. Accordingly, the Department 
encourages interested persons who wish to comment to do so at the 
earliest possible time to permit the fullest consideration of their 
views. Comments may address the impact of the Regulations on the 
submitter's activities, whether of a commercial, non-commercial or 
humanitarian nature, as well as changes that would improve the clarity 
and organization of the Regulations.
    The period for submission of comments will close May 12, 2003. The 
address for submitting comments appears near the beginning of this 
notice. The Department will consider all comments received before the 
close of the comment period in developing final regulations. Comments 
received after the end of the comment period will be considered if 
possible, but their consideration cannot be assured. The Department 
will not accept public comments accompanied by a request that a part or 
all of the submission be treated confidentially because of its business 
proprietary nature or for any other reason. The Department will return 
such a submission to the originator without considering the comments in 
the development of final regulations. In the interest of accuracy and 
completeness, the Department requires comments in written form.
    All public comments on these Regulations will be a matter of public 
record. Copies of the public record concerning these Regulations will 
be made available not sooner than June 10, 2003 and will be obtainable 
from OFAC's Web site <http://www.treas.gov/ofac. If that 
service is unavailable, written requests for copies may be sent to 
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Ave, NW., Washington, DC 20220, Attn: Chief, Records 
Division.

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, 
Telnet, or FTP protocol is <fedbbs.access.gpo.gov. This 
document and additional information concerning OFAC are available from 
OFAC's Web site <http://www.treas.gov/ofac.

Paperwork Reduction Act

    The collections of information related to these regulations can be 
found in 31 CFR part 501. Pursuant to the Paperwork Reduction Act of 
1995 (44 U.S.C. 3507), those collections of information have been 
previously approved by the Office of Management and Budget under 
control number 1505-0164.

List of Subjects

31 CFR Part 560

    Administrative practice and procedure, Agricultural commodities, 
Banks, Banking, Drugs, Exports, Foods, Foreign trade, Imports, 
Information, Investments, Iran, Iraq, Loans, Medical devices, Medicine, 
Penalties, Reporting and recordkeeping requirements, Services, 
Specially designated nationals, Terrorism, Transportation.

31 CFR Part 575

    Administrative practice and procedure, Banks, banking, Blocking of 
assets, Exports, Foreign trade, Humanitarian aid, Imports, Iran, Iraq, 
Oil imports, Penalties, Petroleum, Petroleum products, Reporting and 
recordkeeping requirements, Specially designated nationals, Terrorism, 
Travel restrictions.

    For the reasons stated in the preamble, 31 CFR chapter V, parts 560 
and 575, are 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. 2339B, 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); Pub. L. 106-387, 114 
Stat 1549; 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 E--Licenses, Authorizations, and Statements of Licening 
Policy

    2. Add a new Sec.  560.536 to subpart E to read as follows:


Sec.  560.536  Humanitarian activities in and around Iraq.

    (a) A nongovernmental organization specifically licensed pursuant 
to 31 CFR part 575 or otherwise authorized pursuant to 31 CFR 575.527 
to conduct certain humanitarian activities in and around Iraq is 
authorized to conduct activities in Iran that are directly incidental 
and essential to its authorized humanitarian activities in and around 
Iraq, subject to all conditions and restrictions imposed on the 
organization pursuant to 31 CFR 575.527 and the terms of its license or 
registration. This section does not authorize the actual provision of 
humanitarian support in Iran.
    (b) No exportations or re-exportations of goods or technology, 
whether U.S. or

[[Page 11743]]

foreign origin, to Iran are permitted pursuant to this section, except 
for articles, such as food, clothing, and medicine, intended to be used 
to relieve human suffering or items intended for temporary use, as 
personal baggage, by representatives of the authorized nongovernmental 
organization, provided that:
    (1) Any such goods or technology are not of the type controlled 
under the Department of Commerce's Export Administration Regulations 
for exportation or re-exportation to Iran or controlled on the United 
States Munitions List, and
    (2) Any such personal items are either consumed by representatives 
of that organization during the visit or removed from Iran at the end 
of each visit.
    (c) This section does not authorize the shipment or transshipment 
of goods or technology, whether U.S. or foreign origin, from Iran to 
any other country, including Iraq, except for the shipment or 
transshipment to Iraq of articles, such as food, clothing, and 
medicine, intended to be used to relieve human suffering. 
Nongovernmental organizations that wish to transport other types of 
goods or technology from Iran to Iraq must apply for specific 
authorization from the Office of Foreign Assets Control pursuant to 
Sec.  501.801(b), 31 CFR chapter V.
    (d) U.S. financial institutions are authorized to engage in funds 
transfers in connection with transactions authorized pursuant to this 
section consistent with the provisions of 31 CFR 560.516.
    (e) Nongovernmental organizations conducting transactions under 
this section based on a specific license or a registration issued 
pursuant to 31 CFR part 575 must reference their license or 
registration number on all payments and funds transfers and on all 
related documentation.

    3. Add a new Sec.  560.537 to subpart E to read as follows:


Sec.  560.537  Authorization of certain survey or assessment missions 
in Iran.

    (a) Subject to the conditions of paragraphs (b), (c), and (d) of 
this section, nongovernmental organizations are authorized to conduct 
survey or assessment missions in Iran related to the planning or 
preparation for the provision of humanitarian support to the Iraqi 
people. This section does not authorize the actual provision of such 
humanitarian support in Iran.
    (b) The authorization of paragraph (a) of this section is available 
only to the following types of nongovernmental organizations:
    (1) Nongovernmental organizations registered pursuant to 31 CFR 
575.527; or
    (2) Nongovernmental organizations that have been issued specific 
licenses under 31 CFR part 575 to carry out humanitarian activities in 
Iraq, but not including organizations that have been issued specific 
licenses solely to export goods to Iraq.
    (c) This section does not authorize nongovernmental organizations 
to open offices or to establish permanent facilities of any kind or to 
purchase any goods, services, or technology in Iran of any kind, except 
those described in paragraph (d)(3) of this section.
    (d) The authorization of this section is subject to the following 
conditions:
    (1) U.S. financial institutions are authorized to engage in funds 
transfers in connection with transactions authorized pursuant to this 
section consistent with the provisions of 31 CFR 560.516.
    (2) Nongovernmental organizations conducting transactions under 
this section based on a specific license or a registration issued 
pursuant to 31 CFR part 575 must reference their license or 
registration number on all payments and funds transfers and on all 
related documentation.
    (3) Any funds transferred to Iran pursuant to this section may be 
used only for the purchase of services and goods necessary and 
essential to the conduct of the assessment mission and, whether U.S. or 
foreign origin, not of the type controlled under the Department of 
Commerce's Export Administration Regulations for exportation or re-
exportation to Iran or controlled on the United States Munitions List.
    (4)(i) No exportations or re-exportations of goods or technology, 
whether U.S. or foreign origin, to Iran are permitted pursuant to this 
section, except for those items intended for temporary use, as personal 
baggage, by mission representatives, provided that such items are 
either consumed by mission representatives during the visit or removed 
from Iran at the end of each visit, and further provided that any such 
personal items are not of the type controlled under the Department of 
Commerce's Export Administration Regulations for exportation or re-
exportation to Iran or controlled on the United States Munitions List.
    (ii) Nongovernmental organizations that wish to export or re-export 
goods or technology to Iran, beyond personal baggage items described in 
paragraph (d)(4)(i) of this section, as part of a survey or assessment 
mission must apply for specific authorization from the Office of 
Foreign Assets Control pursuant to Sec.  501.801(b), 31 CFR chapter V.
    (5) Nongovernmental organizations acting under this section shall 
take adequate measures to prevent any items authorized for exportation, 
re-exportation, or local purchase from being obtained or acquired by 
the Government of Iran.

PART 575--IRAQI SANCTIONS REGULATIONS

    4. The authority citation for 31 CFR part 575 continues to read as 
follows:

    Authority: 3 U.S.C. 301; 18 U.S.C. 2332d; 22 U.S.C. 287c; Pub. 
L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 31 U.S.C. 321(b); 
50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-513, 104 Stat, 2047-2055 
(50 U.S.C. 1701 note); E.O. 12722, 55 FR 31803, 3 CFR, 1990 Comp., 
p. 294; E.O. 12724, 55 FR 33089, 3 CFR, 1990 Comp., p. 297; E.O. 
12817, 57 FR 48433, 3 CFR, 1992 Comp., p. 317.

Subpart C--General Definitions

    5. Add a new Sec.  575.329 to subpart C to read as follows:


Sec.  575.329  Areas of Iraq not controlled by the Government of Iraq.

    The term areas of Iraq not controlled by the Government of Iraq 
means, as of January 30, 2003, the areas north of the ``Green Line'' 
and under the control of the Kurdistan Democratic Party (KDP) or the 
Patriotic Union of Kurdistan (PUK) in the following provinces of Iraq: 
Dahuk (Dohuk), Arbil (Erbil), and Sulaymaniyah (Suleimaniyah). The 
description of the term areas of Iraq not controlled by the Government 
of Iraq may be modified by the Department of State.

    Note to Sec.  575.329: Questions on the description of this term 
should be addressed to the Office of Northern Gulf Affairs, Bureau 
of Near Eastern Affairs, Room 4241, U.S. Department of State, 2201 C 
Street NW., Washington, DC 20520 (Tel: (202) 647-5692). Any changes 
to the description of this term will be posted on the Department of 
State Web site at <http://www.state.gov/e/eb/.


    6. Add a new Sec.  575.330 to subpart C to read as follows:


Sec.  575.330  Humanitarian activities, humanitarian purposes, and 
humanitarian support.

    For purposes of Sec. Sec.  575.527 and 575.528, the terms 
humanitarian activities, humanitarian purposes, and humanitarian 
support mean, as these terms have been defined by the Department of 
State for relevant United Nations Security Council Resolutions on Iraq, 
humanitarian relief, educational, cultural, recreational, and human 
rights-related activities, and activities to ameliorate the effects of 
or to investigate

[[Page 11744]]

war crimes. Such purposes may include preparatory activities and 
transactions.

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

    7. Add a new Sec.  575.527 to subpart E to read as follows:


Sec.  575.527  Registration of non-governmental organizations for 
humanitarian activities.

    (a) Registration numbers may be issued on a case-by-case basis for 
the registration of nongovernmental organizations involved in 
humanitarian activities in areas of Iraq not controlled by the 
Government of Iraq, authorizing transactions by such organizations 
otherwise prohibited by this part, including the exportation of 
services, certain goods, software, or technology to areas of Iraq not 
controlled by the Government of Iraq and the transfer of funds to and 
from such areas for humanitarian purposes. Applicants for registration 
numbers must comply with the requirements of Sec.  501.801(c), 31 CFR 
chapter V.
    (b) Successful applicants for registration under this section must 
comply with the following conditions:
    (1) No goods or technology, whether U.S. or foreign origin, of 
types controlled under the Department of Commerce's Export 
Administration Regulations for exportation or re-exportation to Iraq, 
controlled on the United States Munitions List, or listed on the United 
Nations Goods Review List may be exported or re-exported to Iraq or 
purchased or used locally in Iraq.
    (2) Registered nongovernmental organizations shall take adequate 
measures to prevent any items authorized for exportation, re-
exportation, or local purchase from being obtained or acquired by the 
Government of Iraq.
    (3) U.S. financial institutions are authorized to engage in funds 
transfers in connection with transactions authorized pursuant to a 
registration issued under this section, provided that no Iraqi or 
Iranian financial institution or other agency or instrumentality of the 
Government of Iraq or the Government of Iran may participate in any 
such funds transfer.
    (4) All transactions pursuant to a registration issued under this 
section must conform to all relevant United Nations Security Council 
Resolutions, including 661, 666, 687 and 1409, and relevant procedures 
issued by the 661 Committee.
    (5) U.S. citizens who wish to travel to Iraq pursuant to a 
registration issued under this section must apply to the Department of 
State to have their passports validated for travel to Iraq. Such 
applications should be submitted to the Deputy Assistant Secretary for 
Passport Services, ATTN: Office of Passport Policy and Advisory 
Services, U.S. Department of State, 2401 E Street NW., Washington, DC 
20522-0907. Such applications must include the applicant's name, date 
and place of birth, dates of proposed travel, and purpose of the trip. 
Issuance of a registration number under this section does not in any 
way create a presumption in favor of passport validation.
    (6) Nongovernmental organizations conducting transactions 
authorized by their registrations pursuant to this section must 
reference the registration number on all payments and funds transfers 
and on all related documentation.
    (c) This section does not authorize transfers from blocked 
accounts.

    Note to Sec.  575.527: Registration does not excuse a U.S. 
person from compliance with other provisions of 31 CFR chapter V or 
with applicable U.S. laws governing the exportation or re-
exportation of U.S.-origin goods, software, or technology (including 
technical data) to Iraq, Iran, or other countries. See, e.g., the 
Export Administration Regulations administered by the U.S. 
Department of Commerce (15 CFR chapter VII, subchapter C) and the 
International Traffic in Arms Regulations (22 CFR chapters 120-130) 
administered by the Department of State.


    8. Add a new Sec.  575.528 to subpart E to read as follows:


Sec.  575.528  Authorization of certain survey or assessment missions 
in and around Iraq.

    (a) Subject to paragraphs (b), (c), and (d) of this section, 
nongovernmental organizations are authorized to send representatives to 
Iraq for the purpose of conducting survey or assessment missions 
related to the planning or preparation for the provision of 
humanitarian support to the Iraqi people. This section does not 
authorize the actual provision of such humanitarian support.
    (b) The authorization set forth in paragraph (a) of this section 
applies only to the following types of nongovernmental organizations:
    (1) Nongovernmental organizations registered pursuant to Sec.  
575.527; or
    (2) Nongovernmental organizations that have been issued specific 
licenses under this part to carry out humanitarian activities in Iraq, 
but not including organizations that have been issued specific licenses 
solely to export goods to Iraq.
    (c) This section does not authorize nongovernmental organizations 
to open offices or to establish permanent facilities of any kind or to 
purchase any goods, services or technology in Iraq of any kind, except 
those described in paragraph (d)(3) of this section.
    (d) The authorization set forth in this section is subject to the 
following conditions:
    (1) U.S. financial institutions are authorized to engage in funds 
transfers in connection with transactions authorized pursuant to this 
section, provided that no Iraqi or Iranian financial institution or 
other agency or instrumentality of the Government of Iraq or Government 
of Iran may participate in any such funds transfer.
    (2) Nongovernmental organizations conducting transactions 
authorized by specific license or by registration issued pursuant to 
Sec.  575.527 must reference their license or registration number on 
all payments and funds transfers and on all related documentation.
    (3) Any funds transferred to Iraq pursuant to this section may be 
used only for the purchase of services and goods necessary and 
essential to the conduct of the assessment mission and, whether U.S. or 
foreign origin, not of the type controlled under the Department of 
Commerce's Export Administration Regulations for exportation or re-
exportation to Iran or Iraq or controlled on the United States 
Munitions List.
    (4)(i) No exportations or re-exportations of goods or technology 
(whether U.S. or foreign origin) to Iraq are permitted pursuant to this 
section, except for those items intended for temporary use, as personal 
baggage, by mission representatives, provided that such items are 
either consumed by mission representatives during the visit or removed 
from Iraq at the end of each visit, and further provided that any such 
personal items regardless of origin are not of the type controlled for 
exportation or re-exportation to Iran or Iraq under the Department of 
Commerce's Export Administration Regulations, controlled on the United 
States Munitions List, or listed on the United Nations Goods Review 
List.
    (ii) Nongovernmental organizations that wish to export or re-export 
goods or technology to Iraq, beyond personal baggage as described in 
paragraph (d)(4)(i) of this section, as part of a survey or assessment 
mission must apply for specific authorization from the Office of 
Foreign Assets Control pursuant to Sec.  501.801(b), 31 CFR chapter V.
    (5) Nongovernmental organizations acting under this section shall 
take adequate measures to prevent any items authorized for export, re-
export, or local

[[Page 11745]]

purchase from being obtained or acquired by the Government of Iraq.
    (6) U.S. citizens who wish to travel to Iraq pursuant to this 
section must apply to the Department of State to have their passports 
validated for travel to Iraq. Such applications should be submitted to 
the Deputy Assistant Secretary for Passport Services, ATTN: Office of 
Passport Policy and Advisory Services, U.S. Department of State, 2401 E 
Street NW., Washington, DC 20522-0907. Such applications must include 
the applicant's name, date and place of birth, dates of proposed 
travel, and purpose of the trip. This section does not in any way 
create a presumption in favor of passport validation.
    (e) This section does not authorize transfers from blocked 
accounts.

    Note to Sec.  575.528: This section does not excuse a U.S. 
person from compliance with other provisions of 31 CFR chapter V or 
with applicable U.S. laws governing the exportation or re-
exportation of U.S.-origin goods, software, or technology (including 
technical data) to Iraq, Iran, or other countries. See, e.g., the 
Export Administration Regulations administered by the U.S. 
Department of Commerce (15 CFR chapter VII, subchapter C) and the 
International Traffic in Arms Regulations (22 CFR chapters 120-130) 
administered by the Department of State.


    Dated: February 28, 2003.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: March 3, 2003.
Kenneth E. Lawson,
Assistant Secretary (Enforcement), Department of the Treasury.
[FR Doc. 03-5952 Filed 3-10-03; 8:50 am]
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