[Federal Register Volume 68, Number 101 (Tuesday, May 27, 2003)]
[Rules and Regulations]
[Pages 28753-28756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13053]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 575


Iraqi Sanctions Regulations; Authorizations of Non-Commercial 
Funds Transfers and Related Transactions, Activities by the U.S. 
Government and Its Contractors or Grantees, Privately Financed 
Humanitarian Transactions, and Certain Exports and Reexports to Iraq

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 amending the Iraqi Sanctions Regulations, 
to include four general licenses issued May 7, 2003. Subject to certain 
conditions, these general licenses authorize the following activities 
involving Iraq: non-commercial funds transfers (including family 
remittances) and related transactions, activities by the U.S. 
Government and its contractors or grantees, privately financed 
humanitarian transactions, and certain exports and reexports to Iraq. 
OFAC also is publishing a technical amendment to its regulatory 
definition of the terms ``humanitarian activities,'' ``humanitarian 
purposes,'' and ``humanitarian support.''

DATES: Effective May 7, 2003. Written comments must be received no 
later than July 28, 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.

[[Page 28754]]

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: OFAC's Chief of Licensing, tel. 202/
622-2480, Chief of Policy Planning and Program Management, tel. 202/
622-2500, 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'').
    In light of recent developments in Iraq, OFAC issued four general 
licenses on May 7, 2003, to authorize additional transactions involving 
Iraq. The new sections published today incorporate these four general 
licenses into the Iraqi Sanctions Regulations.
    Paragraph (a) of new Sec.  575.529 authorizes U.S. persons to 
transfer funds to any person in Iraq for non-commercial humanitarian 
purposes, including family remittances, provided that no U.S. person 
may transfer more than $500 per month to any person in Iraq. Paragraph 
(b) authorizes U.S. financial institutions to engage in all 
transactions ordinarily incident to such transfers of funds. Paragraph 
(c) provides that this section does not authorize transfers from 
blocked accounts.
    Paragraph (a) of new Sec.  575.530 authorizes activities by the 
U.S. government and its contractors or grantees. Paragraph (b)(1) 
contains a restriction on the exportation or reexportation of any goods 
or technology (including technical data or other information) 
controlled by the Department of Commerce under the Export 
Administration Regulations (15 CFR chapter VII, subchapter C) for 
exportation to Iraq; any such exports or reexports must be separately 
authorized by OFAC. Paragraph (b)(2) describes the circumstances in 
which some exports or reexports of goods to Iraq must be submitted to 
the United Nations ``661 Committee.'' Paragraph (c) requires that all 
payments and funds transfers initiated pursuant to this authorization, 
and all related documentation, reference this section number. Note 1 to 
section 575.530 explains that the activities of any subcontractors or 
other persons who are engaged to perform activities within the scope of 
the relevant contract or grant are also authorized and subject to the 
same restrictions. Note 2 to section 575.530 provides information 
concerning the use of U.S. passports for travel to, in, or through 
Iraq.
    New Sec.  575.531 authorizes all transactions that are necessary to 
provide privately financed humanitarian support, or to plan or prepare 
for the provision of humanitarian support, to the Iraqi people in Iraq. 
Paragraph (a) includes examples of some of the newly-authorized 
transactions. The note to paragraph (a) references the definition of 
``humanitarian support'' that appears elsewhere in the Iraqi Sanctions 
Regulations. Paragraphs (b) and (c) contain special provisions on the 
exportation or reexportation of goods or technology to Iraq. Paragraph 
(d) provides that this new section does not authorize any transactions 
with persons on the Department of Defense's 55-person Watch List. 
Paragraph (e) requires that all payments and funds transfers initiated 
pursuant to this authorization, and all related documentation, 
reference this section number. The note to Sec.  575.531 provides 
information concerning the use of U.S. passports for travel to, in, or 
through Iraq.
    New Sec.  575.532 authorizes the exportation from the United States 
or, if subject to U.S. jurisdiction, the exportation or reexportation 
from a third country to Iraq of any goods, subject to two conditions. 
First, the exportation or reexportation of any goods or technology 
(including technical data or other information) controlled by the 
Department of Commerce under the Export Administration Regulations for 
exportation to Iraq, or listed on the United Nations Goods Review List, 
must be separately authorized by OFAC. Second, any exportation or 
reexportation of goods to Iraq must be submitted to the United Nations 
661 Committee to the extent and in the manner required under applicable 
UN Security Council resolutions; for information concerning this second 
condition, exporters or reexporters should contact the State Department 
office identified in Sec.  575.532.
    These new authorizations do not eliminate the need to comply with 
other provisions of law, including any aviation, financial, or trade 
requirements of agencies other than OFAC.
    OFAC also is amending Sec.  575.330, which defines the terms 
``humanitarian activities,'' ``humanitarian purposes,'' and 
``humanitarian support.'' OFAC is amending section 575.330 to remove 
the phrase ``[f]or purposes of Sec. Sec.  575.527 and 575.528,'' so 
that the definition is not limited only to those two sections of the 
Iraqi Sanctions Regulations.

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 a final rule.
    Accordingly, OFAC 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 July 28, 2003. The 
address for submitting comments appears near the beginning of this 
document. OFAC 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. OFAC 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. OFAC will return such a submission to the 
originator without considering the comments in the development of final 
regulations. In the

[[Page 28755]]

interest of accuracy and completeness, OFAC 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 August 25, 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 Acrobat 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 in 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.


0
For the reasons stated in the preamble, 31 CFR part 575 is amended as 
set forth below:

PART 575--IRAQI SANCTIONS REGULATIONS

0
1. 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

0
2. Revise Sec.  575.330 to read as follows:


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

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

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

0
3. Add a new Sec.  575.529 to subpart E to read as follows:


Sec.  575.529  Non-commercial funds transfers and related transactions.

    (a) U.S. persons are authorized to transfer funds to any person in 
Iraq for non-commercial humanitarian purposes, including family 
remittances, provided that no U.S. person may transfer more than $500 
per month to any person in Iraq.
    (b) U.S. financial institutions are authorized to engage in all 
transactions ordinarily incident to the transfer of funds authorized by 
paragraph (a) of this section, including the opening of new 
correspondent accounts for funds transfers with Iraqi financial 
institutions. U.S. financial institutions may rely on originators of 
funds transfers with regard to compliance with this part.
    (c) This section does not authorize transfers from blocked 
accounts.

0
4. Add a new Sec.  575.530 to subpart E to read as follows:


Sec.  575.530  Activities by the U.S. Government and its contractors or 
grantees.

    (a) Subject to the provisions of paragraph (b) of this section, 
U.S. government agencies and their contractors or grantees are 
authorized to engage in all transactions otherwise prohibited by 
subpart B of this part that are within the scope of their official 
duties or the relevant U.S. government contracts or grants.
    (b)(1) The exportation from the United States or, if subject to 
U.S. jurisdiction, the exportation or reexportation from a third 
country to Iraq of any goods or technology (including technical data or 
other information) controlled by the Department of Commerce under the 
Export Administration Regulations (15 CFR chapter VII, subchapter C) 
for exportation to Iraq must be separately authorized by or pursuant to 
this part.
    (2) If the contracting or granting U.S. government agency has 
determined that the relevant contract or grant is not in support of 
U.S. government humanitarian assistance or reconstruction efforts in 
Iraq, or not in support of U.S. or allied forces deployed in military 
contingency, humanitarian, or peacekeeping operations in Iraq, then the 
exportation or reexportation of any goods to Iraq must be submitted to 
the 661 Committee to the extent and in the manner required under 
applicable UN Security Council resolutions. If this paragraph (b)(2) 
applies to a proposed exportation or reexportation, the exporter or 
reexporter should contact the Office of Peacekeeping and Humanitarian 
Operations, Room 5323, U.S. Department of State, 2201 C Street NW., 
Washington, DC 20520 (tel 202/647-2708, fax 202/647-3261) for 
procedures concerning submissions to the 661 Committee.
    (c) All payments and funds transfers initiated pursuant to this 
authorization, and all related documentation, must reference this 
section number.

    Note 1 to Sec.  575.530: This authorization and the restrictions 
on certain exportations or reexportations extend to the activities 
of any subcontractors or other persons who are engaged to perform 
activities within the scope of the relevant contract or grant. See 
31 CFR 575.418.


    Note 2 to Sec.  575.530: U.S. citizens who wish to travel to 
Iraq pursuant to this authorization may be required to apply to the 
Department of State to have their passports validated for travel to 
Iraq, pursuant to 22 CFR 51.73 and 51.74 and public notices issued 
thereunder, including Public Notice 4283, 68 FR 8791 (February 25, 
2003), as amended by Public Notice 4337, 68 FR 18722 (Apr. 16, 
2003), and any subsequent public notices regarding the restriction 
on the use of U.S. passports for travel to, in or through Iraq. Such 
applications, if required, 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 general license does 
not in any way create a presumption in favor of passport validation.


0
5. Add a new Sec.  575.531 to subpart E to read as follows:

[[Page 28756]]

Sec.  575.531  Privately financed humanitarian transactions.

    (a) Subject to the conditions and limitations set forth in 
paragraphs (b)-(e) of this section, all transactions otherwise 
prohibited by subpart B of this part that are necessary to provide 
privately financed humanitarian support, or to plan or prepare for the 
provision of humanitarian support, to the Iraqi people in Iraq are 
authorized. Transactions authorized by this section include, but are 
not limited to, the exportation to Iraq of goods and services necessary 
for the provision of humanitarian support, the financing of such 
humanitarian support, travel-related transactions necessary to provide 
humanitarian support, and related funds transfers by U.S. financial 
institutions.

    Note to paragraph (a): The term humanitarian support means, as 
this term has 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 war crimes. Such purposes may include preparatory 
activities and transactions. See 31 CFR 575.330.

    (b) The exportation from the United States or, if subject to U.S. 
jurisdiction, the exportation or reexportation from a third country to 
Iraq of any goods or technology (including technical data or other 
information) controlled by the Department of Commerce under the Export 
Administration Regulations (15 CFR chapter VII, subchapter C) for 
exportation to Iraq or listed on the United Nations Goods Review List 
must be separately authorized by or pursuant to this part.
    (c) Any exportation or reexportation of goods to Iraq pursuant to 
this authorization must be submitted to the United Nations 661 
Committee to the extent, and in the manner, required under applicable 
UN Security Council resolutions. For procedures concerning submissions 
to the 661 Committee, the exporter or reexporter should contact the 
Office of Peacekeeping and Humanitarian Operations, Room 5323, U.S. 
Department of State, 2201 C Street NW., Washington, DC 20520 (tel 202/
647-2708, fax 202/647-3261).
    (d) This section does not authorize any transactions with persons 
on the Department of Defense's 55-person Watch List.
    (e) All payments and funds transfers initiated pursuant to this 
authorization, and all related documentation, must reference this 
section number.

    Note to Sec.  575.531: U.S. citizens who wish to travel to Iraq 
pursuant to this authorization may be required to apply to the 
Department of State to have their passports validated for travel to 
Iraq, pursuant to 22 CFR 51.73 and 51.74 and public notices issued 
thereunder, including Public Notice 4283, 68 FR 8791 (February 25, 
2003), as amended by Public Notice 4337, 68 FR 18722 (Apr. 16, 
2003), and any subsequent public notices regarding the restriction 
on the use of U.S. passports for travel to, in or through Iraq. Such 
applications, if required, 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 general license does 
not in any way create a presumption in favor of passport validation.

0
6. Add a new Sec.  575.532 to subpart E to read as follows:


Sec.  575.532  Certain exports and reexports to Iraq.

    The exportation from the United States or, if subject to U.S. 
jurisdiction, the exportation or reexportation from a third country to 
Iraq of any goods is authorized, provided that the exportation or 
reexportation of any goods or technology (including technical data or 
other information) controlled by the Department of Commerce under the 
Export Administration Regulations (15 CFR chapter VII, subchapter C) 
for exportation to Iraq, or listed on the United Nations Goods Review 
List, must be separately authorized by or pursuant to this part, and 
any exportation or reexportation to Iraq must be submitted to the 661 
Committee to the extent and in the manner required under applicable UN 
Security Council resolutions. For procedures concerning submissions to 
the 661 Committee, the exporter or reexporter should contact the Office 
of Peacekeeping and Humanitarian Operations, Room 5323, U.S. Department 
of State, 2201 C Street NW., Washington, DC 20520 (tel 202/647-2708, 
fax 202/647-3261).

    Dated: May 9, 2003.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: May 20, 2003.
Juan C. Zarate,
Deputy Assistant Secretary (Terrorist Financing and Financial Crimes), 
Department of the Treasury.
[FR Doc. 03-13053 Filed 5-20-03; 3:19 pm]
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