[Federal Register Volume 68, Number 109 (Friday, June 6, 2003)]
[Rules and Regulations]
[Pages 34192-34196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-14253]



[[Page 34191]]

-----------------------------------------------------------------------

Part IV





Department of Commerce





-----------------------------------------------------------------------



Bureau of Industry and Security



-----------------------------------------------------------------------



15 CFR Parts 744 and 772





Department of the Treasury





-----------------------------------------------------------------------



Office of Foreign Assets Control



-----------------------------------------------------------------------

31 CFR Part 594



Imposition and Expansion of Controls on Designated Terrorists; Global 
Terrorism Sanctions Regulation; Final Rules

  Federal Register / Vol. 68, No. 109 / Friday, June 6, 2003 / Rules 
and Regulations  

[[Page 34192]]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 744 and 772

[Docket No. 020912210-2210-01]
RIN 0694-AC60


Imposition and Expansion of Controls on Designated Terrorists

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This rule amends the Export Administration Regulations (EAR) 
by imposing a license requirement on the export and reexport of any 
item subject to the EAR by a U.S. person or non-U.S. person to persons 
designated in or pursuant to Executive Order 13224 of September 23, 
2001. In response to grave acts of terrorism and threats of terrorism, 
Executive Order 13224 blocks the property and interests in property of 
persons listed in an Annex to the order and persons designated by the 
Secretary of State or the Secretary of the Treasury pursuant to 
criteria set forth in the order. Executive Order 13224 also prohibits 
U.S. persons from engaging in any transactions with such blocked 
persons. The Department of the Treasury's Office of Foreign Assets 
Control (OFAC) announces the names of persons designated pursuant to 
Executive Order 13224 in the Federal Register and includes such persons 
in a listing of persons subject to various sanctions programs 
administered by OFAC. The Department of State also announces the names 
of foreign persons designated pursuant to Executive Order 13224 in the 
Federal Register. All persons designated in or pursuant to Executive 
Order 13224 are identified by the bracketed initials [SDGT] in the 
Department of Treasury listing and are also known as Specially 
Designated Global Terrorists (SDGTs). This rule also amends the EAR by 
expanding reexport controls on Specially Designated Terrorists (SDTs) 
and Foreign Terrorist Organizations (FTOs). OFAC also includes SDTs and 
FTOs in the Department of Treasury listing and identifies them by the 
bracketed initials [SDT] and [FTO], respectively.

DATES: This rule is effective June 6, 2003.
    Comment Dates: Comments on this rule must be received on or before 
July 21, 2003.

ADDRESSES: Written comments on this rule should be sent to Sheila 
Quarterman, Regulatory Policy Division, Bureau of Industry and 
Security, Department of Commerce, P.O. Box 273, Washington, DC 20044, 
or to E-mail address [email protected].

FOR FURTHER INFORMATION CONTACT: Joan Roberts, Director, Foreign Policy 
Controls Division, Office of Strategic Trade and Foreign Policy 
Controls, Bureau of Industry and Security, Department of Commerce. 
Telephone: (202) 482-0171, E-mail [email protected].

SUPPLEMENTARY INFORMATION: 

Background

Imposition of Controls on Specially Designated Global Terrorists 
(SDGTs)

    President Bush issued Executive Order 13224 (E.O. 13224) (Blocking 
Property and Prohibiting Transactions with Persons Who Commit, Threaten 
to Commit, or Support Terrorism) on September 23, 2001, in response to 
grave acts of terrorism and threats of terrorism. On September 28, 
2001, the United Nations Security Council (UNSC) adopted Resolution 
1373, requiring all member states, among other things, to refrain from 
providing any form of support to persons involved in terrorist acts and 
to prohibit their nationals from making economic resources available to 
persons who commit, attempt to commit, facilitate or participate in the 
commission of terrorist acts. In addition, on January 28, 2002, the 
UNSC adopted Resolution 1390, which requires all member states to 
freeze funds and other financial assets or economic resources of Usama 
bin Laden, members of the Al-Qaida organization and the Taliban and 
other individuals, groups, undertakings and entities associated with 
them, as referred to in the list created pursuant to UNSC Resolutions 
1267 (October 15, 1999) and 1333 (December 19, 2000). UNSC Resolution 
1455 (January 17, 2003) continued and improved the measures provided in 
UNSC Resolution 1390. The Bureau of Industry and Security (BIS) is 
taking action consistent with E.O. 13224 and UNSC Resolutions 1267, 
1390, 1452 (December 20, 2002), and 1455, as well as 1373, by imposing 
a license requirement on all exports and reexports to persons 
designated in or pursuant to E.O. 13224. Persons designated pursuant to 
criteria set forth in E.O. 13224 by the Secretary of State or the 
Secretary of the Treasury are announced in the Federal Register and 
listed in Appendix A to 31 CFR chapter V, which lists persons subject 
to various sanctions programs administered by OFAC (``Blocked Persons 
list''). Persons designated in or pursuant to E.O. 13224 are identified 
in Appendix A by the bracketed initials [SDGT] and are also known as 
Specially Designated Global Terrorists (SDGTs). Provisions that 
implement BIS controls on SDGTs are included in new section 744.12 of 
the EAR.

Expansion of Reexport Controls on SDTs and FTOs

    Specially Designated Terrorists (SDTs) are designated in or 
pursuant to Executive Order 12947 issued on January 23, 1995 
(Prohibiting Transactions with Terrorists Who Threaten to Disrupt the 
Middle East Peace Process), as amended by Executive Order 13099 of 
August 20, 1998. Foreign Terrorist Organizations (FTOs) are designated 
pursuant to the 1996 Anti-Terrorism and Effective Death Penalty Act 
(Pub. L. 104-132). SDTs and FTOs are included on the Blocked Persons 
list maintained by OFAC in Appendix A to 31 CFR chapter V and 
identified by the bracketed initials [SDT] and [FTO], respectively.
    On January 8, 1999, BIS issued a rule imposing foreign policy 
controls on exports and certain reexports of items subject to the EAR 
to individuals and groups designated as SDTs and groups designated as 
FTOs. The January 1999 rule imposed a license requirement on the 
following exports and reexports to a designated SDT or FTO:
    (1) The export from the United States of any item subject to the 
EAR;
    (2) The export or reexport by a U.S. person, wherever located, of 
any item subject to the EAR; and
    (3) The export from abroad or reexport by a non-U.S. person of any 
item subject to the EAR on the Commerce Control List.
    The January 1999 rule did not impose a license requirement on the 
export from abroad or reexport by a non-U.S. person of EAR99 items. The 
action BIS is now taking, effective June 6, 2003, expands current 
controls by requiring a license for the export from abroad or reexport 
to a designated SDT or FTO by a non-U.S. person of any item subject to 
the EAR, whether such item is on the Commerce Control List or is 
classified as EAR99. Provisions that expand BIS controls on SDTs and 
FTOs are found in revised sections 744.13 and 744.14 of the EAR, 
respectively.
    Note that certain persons designated in or pursuant to E.O. 13224 
also have been designated as SDTs or FTOs or both, and are 
appropriately identified by more than one of the bracketed acronyms in 
Appendix A to 31 CFR chapter V. As such, section 744.1 is also revised 
to add a new subsection (a)(2), which provides that when controls set 
forth under more than one section of

[[Page 34193]]

part 744 apply to a person, the license requirements for such a person 
will be determined based on the requirements of all applicable 
sections, and license applications will be reviewed under all 
applicable licensing policies. For example, if an entity on the Entity 
List in Supplement No. 4 to part 744 is also designated in or pursuant 
to E.O. 13224, the provisions set forth in Supplement No. 4 to part 744 
as well as the provisions set forth in section 744.12 will apply, and 
the denial policy for the export or reexport of all items subject to 
the EAR will be the operative policy. Also note that paragraph 744.1(a) 
is updated to reflect the controls in sections 744.9-744.16.

Allocation of Agency Licensing Responsibility To Avoid Dual Licensing 
Requirements

Exports by U.S. Persons
    OFAC requires a license for all exports from the United States and 
all exports and reexports by a U.S. person to any SDT or SDGT. To avoid 
duplication, if OFAC authorizes a transaction involving an export from 
the United States or an export or reexport by a U.S. person of an item 
subject to the EAR to a designated SDT or SDGT, no separate 
authorization from BIS is necessary, even if the SDT or SDGT is also an 
FTO. However, authorization from BIS is required for an export from the 
United States or an export from abroad or reexport of an item subject 
to the EAR by a U.S. person to an FTO that is not also an SDT or SDGT.
Exports From Abroad and Reexports by Non-U.S. Persons
    Authorization from BIS is required for exports from abroad and 
reexports by non-U.S. persons of items subject to the EAR to SDGTs, 
SDTs, or FTOs.

Licensing Policy

    License applications for exports or reexports to SDGTs, SDTs, or 
FTOs are subject to a policy of denial.
    OFAC announces in the Federal Register and incorporates into the 
Blocked Persons list on an on-going basis the frequent changes or 
additions to the three lists of persons subject to sanctions who are 
identified by the bracketed initials [SDGT], [SDT] or [FTO] in Appendix 
A to 31 CFR chapter V. To obtain additional information regarding the 
Blocked Persons list maintained by OFAC, contact OFAC at telephone 
number 202/622-2520. Additional information also may be found at OFAC's 
Web site at www.treas.gov/ofac.
    A foreign policy report on the new and expanded controls imposed by 
this rule on designated terrorist entities and individuals was 
submitted to the Congress on March 18, 2003.

Rulemaking Requirements

    1. This interim rule has been determined not to be significant for 
purposes of E.O. 12866.
    2. Notwithstanding any other provision of law, no person is 
required to, nor shall any person be subject to a penalty for failure 
to comply with a collection of information, subject to the Paperwork 
Reduction Act (PRA), unless that collection of information displays a 
currently valid Office of Management and Budget (OMB) Control Number. 
This rule involves a collection of information approved by the OMB 
under control number 0694-0088, ``Multi-Purpose Application,'' which 
carries a burden hour estimate of 40 minutes per electronic submission 
and 45 minutes for a manual submission. Send comments regarding this 
burden estimate or any other aspect of these collections of 
information, including suggestions for reducing the burden, to OMB Desk 
Officer, New Executive Office Building, Washington, DC 20503; and to 
the Regulatory Policy Division, Bureau of Industry and Security, 
Department of Commerce, P.O. Box 273, Washington, DC 20044.
    3. This rule does not contain policies with federalism implications 
as this term is defined under Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking, the opportunity for 
public participation, and a delay in effective date, are inapplicable 
because this regulation involves a military and foreign affairs 
function of the United States (see 5 U.S.C. 553(a)(1)). Further, no 
other law requires that a notice of proposed rulemaking and an 
opportunity for public comment be given for this interim rule. Because 
a notice of proposed rulemaking and an opportunity for public comment 
are not required to be given for this rule under title 5 U.S.C. 553 or 
by any other law, the analytical requirements of the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) are not applicable.
    However, because of the importance of the issues raised by these 
regulations, this rule is being issued in interim form and BIS will 
consider comments in the development of the final regulations.
    Accordingly, the Department of Commerce (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.
    The period for submission of comments will close July 21, 2003. 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 material be 
treated confidentially because of its business proprietary nature or 
for any other reason. The Department will return such comments and 
materials to the persons submitting the comments and will not consider 
them in the development of final regulations. All public comments on 
these regulations will be a matter of public record and will be 
available for public inspection and copying. In the interest of 
accuracy and completeness, the Department requires comments in written 
form.
    Oral comments must be followed by written memoranda, which will 
also be a matter of public record and will be available for public 
review and copying. Communications from agencies of the United States 
Government or foreign governments will not be available for public 
inspection.
    The Office of Administration, Bureau of Industry and Security, U.S. 
Department of Commerce, displays these public comments on BIS's Freedom 
of Information Act (FOIA) Web site at http://www.bis.doc.gov/foia. This 
office does not maintain a separate public inspection facility. If you 
have technical difficulties accessing this Web site, please call BIS's 
Office of Administration, at (202) 482-0637, for assistance.

List of Subjects

15 CFR Part 744

    Exports, Foreign trade, Reporting and recordkeeping requirements.

15 CFR Part 772

    Exports, Foreign trade.


0
Accordingly, parts 744 and 772 of the Export Administrations 
Regulations (15 CFR parts 730-799) are amended as follows:

PART 744--[AMENDED]

0
1. The authority citation for part 744 continues to read as follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; Sec. 901-911, Pub. L. 106-
387; Sec. 221, Pub. L. 107-56; E.O. 12058, 43 FR 20947, 3 CFR, 1978 
Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; 
E.O. 12938, 59 FR 59099, 3 CFR, 1994

[[Page 34194]]

Comp., p. 950; E.O. 12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 356; 
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 
FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 
2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 
786; notice of November 9, 2001, 66 FR 56965, 3 CFR, 2001 Comp., p. 
917; notice of August 14, 2002, 67 FR 53721, August 16, 2002.


0
2. Section 744.1 is amended by revising paragraph (a) to read as 
follows:


Sec.  744.1  General Provisions.

    (a)(1) Introduction. In this part, references to the EAR are 
references to 15 CFR chapter VII, subchapter C. This part contains 
prohibitions against exports, reexports, and selected transfers to 
certain end-users and end-uses as introduced under General Prohibition 
Five (End-use/End-users) and Nine (Orders, Terms, and Conditions), 
unless authorized by BIS. Sections 744.2, 744.3, 744.4 and 744.5 
prohibit exports and reexports of items subject to the EAR to defined 
nuclear, missile, chemical and biological activities and nuclear 
maritime end-uses. Section 744.6 prohibits certain activities by U.S. 
persons in support of certain nuclear, missile, chemical, or biological 
end-uses regardless of whether that support involves the export or 
reexport of items subject to the EAR. Sections 744.7 and 744.8 prohibit 
exports and reexports of certain items for certain aircraft and 
vessels. Section 744.9 prohibits U.S. persons from providing technical 
assistance to certain foreign persons seeking to develop or manufacture 
certain encryption commodities or software. Section 744.10 prohibits 
exports and reexports of any item subject to the EAR to Russian 
entities, included in Supplement No. 4 of this part. Sections 744.12, 
744.13 and 744.14 prohibit exports and reexports of any item subject to 
the EAR to persons designated as Specially Designated Global 
Terrorists, Specially Designated Terrorists, or Foreign Terrorist 
Organizations, respectively. Section 744.15 describes restrictions on 
exports and reexports to persons named in general orders. Section 
744.16 prohibits exports and reexports by U.S. persons of items subject 
to the EAR to persons designated pursuant to Executive Order 13088, as 
amended by Executive Order 13192, including Slobodan Milosevic, his 
close associates, and persons determined to be under open indictment by 
the International Criminal Tribunal for the former Yugoslavia. In 
addition, these sections include license review standards for export 
license applications submitted as required by these sections. It should 
also be noted that part 764 of the EAR prohibits exports, reexports and 
certain in-country transfers of items subject to the EAR to denied 
parties.
    (2) If controls set forth under more than one section of part 744 
apply to a person, the license requirements for such a person will be 
determined based on the requirements of all applicable sections of part 
744, and license applications will be reviewed under all applicable 
licensing policies.
* * * * *

0
3. Section 744.12 is added to read as follows:


Sec.  744.12  Restrictions on exports and reexports to persons 
designated in or pursuant to Executive Order 13224 (Specially 
Designated Global Terrorist) (SDGT).

    BIS maintains restrictions on exports and reexports to persons 
designated in or pursuant to Executive Order 13224 of September 23, 
2001 (Blocking Property and Prohibiting Transactions with Persons Who 
Commit, Threaten to Commit, or Support Terrorism). These persons 
include individuals and entities listed in the Annex to Executive Order 
13224, as well as persons subsequently designated by the Secretary of 
State or Secretary of the Treasury pursuant to criteria set forth in 
the Order. Pursuant to Executive Order 13224, the Department of the 
Treasury's Office of Foreign Assets Control (OFAC) maintains 31 CFR 
part 594, the Global Terrorism Sanctions Regulations. OFAC announces 
the names of persons designated pursuant to Executive Order 13224 in 
the Federal Register and includes such persons in Appendix A to 31 CFR 
Chapter V, which lists persons subject to various sanctions programs 
administered by OFAC. The Department of State also announces the names 
of foreign persons designated pursuant to Executive Order 13224 in the 
Federal Register. All persons designated in or pursuant to Executive 
Order 13224 are identified in Appendix A to 31 CFR Chapter V by the 
bracketed initials [SDGT] and are also known as Specially Designated 
Global Terrorists (SDGTs).
    (a) License requirement(s). (1) A license requirement applies to 
the export or reexport to an SDGT of any item subject to the EAR.
    (2) To avoid duplication, U.S. persons are not required to seek 
separate authorization for an export or reexport to an SDGT of an item 
subject to both the EAR and OFAC's regulatory authority pursuant to 
Executive Order 13224. Therefore, if OFAC authorizes an export from the 
United States or an export or reexport by a U.S. person to an SDGT, no 
separate authorization from BIS is necessary.
    (3) U.S. persons must seek authorization from BIS for the export or 
reexport to an SDGT of any item subject to the EAR that is not subject 
to OFAC's Global Terrorism Sanctions Regulations in 31 CFR part 594.
    (4) Non-U.S. persons must seek authorization from BIS for any 
export from abroad or reexport to an SDGT of any item subject to the 
EAR.
    (5) Any export or reexport to an SDGT of any item subject to both 
the EAR and OFAC's regulatory authority pursuant to Executive Order 
13224 and not authorized by OFAC is a violation of the EAR.
    (6) Any export or reexport by a U.S. person to an SDGT of any item 
subject to the EAR that is not subject to regulation by OFAC and not 
authorized by BIS is a violation of the EAR. Any export from abroad or 
reexport by a non-U.S. person to an SDGT of any item subject to the EAR 
and not authorized by BIS is a violation of the EAR.
    (7) These licensing requirements supplement any other requirements 
set forth elsewhere in the EAR.
    (b) Exceptions. No License Exceptions or other BIS authorization 
are available for any export or reexport to an SDGT of any item subject 
to the EAR.
    (c) Licensing policy. Applications for licenses for the export or 
reexport to an SDGT of any item subject to the EAR generally will be 
denied. You should consult with OFAC concerning transactions subject to 
OFAC licensing requirements.
    (d) Contract sanctity. Contract sanctity provisions are not 
available for license applications reviewed under this section.

    Note to Sec.  744.12: This section does not implement, construe, 
or limit the scope of any criminal statute, including (but not 
limited to) 18 U.S.C. 2339B(a)(1) and 2339A, and does not excuse any 
person from complying with any criminal statute, including (but not 
limited to) 18 U.S.C. 2339B(a)(1) and 18 U.S.C. 2339A.


0
4. Section 744.13 is revised to read as follows:


Sec.  744.13  Restrictions on exports and reexports to persons 
designated pursuant to Executive Order 12947 (Specially Designated 
Terrorist) (SDT).

    Consistent with the purpose of Executive Order 12947 of January 23, 
1995, BIS maintains restrictions on exports and reexports to Specially 
Designated Terrorists (SDTs). Executive Order 12947 prohibits 
transactions by U.S. persons with terrorists who threaten to disrupt 
the Middle East peace process. Pursuant to the Executive Order, the 
Department of the Treasury, Office of Foreign Assets Control

[[Page 34195]]

(OFAC), maintains 31 CFR part 595, the Terrorism Sanctions Regulations. 
In Appendix A to 31 CFR Chapter V, pursuant to 31 CFR part 595, these 
Specially Designated Terrorists are identified by the bracketed suffix 
initials [SDT]. The requirements set forth below further the objectives 
of Executive Order 12947.
    (a) License requirement(s). (1) A license requirement applies to 
the export or reexport to an SDT of any item subject to the EAR.
    (2) To avoid duplication, U.S. persons are not required to seek 
separate authorization for an export or reexport to an SDT of an item 
subject both to the EAR and to OFAC's Terrorism Sanctions Regulations 
in 31 CFR part 595. Therefore, if OFAC authorizes an export or reexport 
of an item by a U.S. person to a SDT, no separate authorization from 
BIS is necessary.
    (3) U.S. persons must seek authorization from BIS for the export or 
reexport to an SDT of an item subject to the EAR but not subject to 
OFAC's Terrorism Sanctions Regulations in 31 CFR part 595.
    (4) Non-U.S. persons must seek authorization from BIS for the 
export from abroad or reexport to an SDT of any item subject to the 
EAR.
    (5) Any export or reexport to an SDT by a U.S. person of any item 
subject both to the EAR and OFAC's Terrorism Sanctions Regulations in 
31 CFR part 595 and not authorized by OFAC is a violation of the EAR.
    (6) Any export or reexport by a U.S. person to an SDT of any item 
subject to the EAR that is not subject to OFAC's Terrorism Sanctions 
Regulations in 31 CFR part 595 and not authorized by BIS is a violation 
of the EAR. Any export from abroad or reexport by a non-U.S. person to 
an SDT of any item subject to the EAR and not authorized by BIS is a 
violation of the EAR.
    (7) These licensing requirements supplement any other requirements 
set forth elsewhere in the EAR.
    (b) Exceptions. No License Exceptions or other BIS authorization 
are available for export or reexport to an SDT of any item subject to 
the EAR.
    (c) Licensing policy. Applications for licenses for the export or 
reexport to an SDT of any item subject to the EAR generally will be 
denied. You should consult with OFAC concerning transactions subject to 
OFAC licensing requirements.
    (d) Contract sanctity. Contract sanctity provisions are not 
available for license applications reviewed under this section.

    Note to Sec.  744.13: This section does not implement, construe, 
or limit the scope of any criminal statute, including (but not 
limited to) 18 U.S.C. 2339B(a)(1) and 2339A, and does not excuse any 
person from complying with any criminal statute, including (but not 
limited to) 18 U.S.C. 2339B(a)(1) and 18 U.S.C. 2339A.


0
5. Section 744.14 is revised to read as follows:


Sec.  744.14  Restrictions on exports and reexports to designated 
Foreign Terrorist Organizations (FTOs).

    Consistent with the objectives of section 219 of the Immigration 
and Nationality Act, as amended (INA) (8 U.S.C. 1189), and section 303 
of the Antiterrorism and Effective Death Penalty Act 1996, as amended 
(Anti-Terrorism Act) (18 U.S.C. 2339B) (Public Law 104-132. 110 Stat. 
1214-1319), BIS maintains restrictions on exports and reexports to 
organizations designated as Foreign Terrorist Organizations (FTOs) 
pursuant to section 219 of the INA. The Department of the Treasury, 
Office of Foreign Assets Control, maintains 31 CFR part 597, the 
Foreign Terrorist Organizations Sanctions Regulations, requiring U.S. 
financial institutions to block all financial transactions involving 
assets of designated FTOs within the possession or control of such U.S. 
financial institutions. Section 303 of the Anti-Terrorism Act prohibits 
persons within the United States or subject to U.S. jurisdiction from 
knowingly providing material support or resources to a designated FTO 
and makes violations punishable by criminal penalties under title 18, 
United States Code. These designated FTOs are listed in Appendix A to 
31 CFR Chapter V and identified by the bracketed initials [FTO]. A 
designation of a foreign organization determined to meet the criteria 
of section 219 of the INA takes effect upon publication in the Federal 
Register by the Secretary of State, or the Secretary's designee.
    (a) License requirement(s). (1) A license requirement applies to 
the export or reexport to an FTO of any item subject to the EAR.
    (2) U.S. persons must seek authorization from BIS for the export or 
reexport to an FTO of any item subject to the EAR.
    (3) Non-U.S. persons must seek authorization from BIS for the 
export from abroad or reexport to an FTO of any item subject to the 
EAR.
    (4) Any export or reexport to an FTO by any person of any item 
subject to the EAR and not authorized by BIS is a violation of the EAR.
    (5) These licensing requirements supplement any other requirements 
set forth elsewhere in the EAR.
    (b) Exceptions. No License Exceptions or other BIS authorization 
for items described by paragraph (a) of this section are available for 
exports or reexports to FTOs.
    (c) Licensing policy. Applications for exports and reexports to 
FTOs of all items identified by paragraph (a) of this section will 
generally be denied, to the extent they constitute material support or 
resources, as defined in 18 U.S.C. 2339A(b).
    (d) Contract sanctity. Contract sanctity provisions are not 
available for license applications reviewed under this section.
    (e) FTOs also designated as SDTs or SDGTs. In cases in which an FTO 
is also an SDT, as described in Sec.  744.13, or an SDGT, as described 
in Sec.  744.12, the license requirements and licensing policy set 
forth in Sec.  744.13 or Sec.  744.12 will apply.

    Note to Sec.  744.14: This section does not implement, construe, 
or limit the scope of any criminal statute, including (but not 
limited to) 18 U.S.C. 2339B(a)(1) and 2339A, and does not excuse any 
person from complying with any criminal statute, including (but not 
limited to) 18 U.S.C. 2339B(a)(1) and 18 U.S.C. 2339A.

PART 772--[AMENDED]

0
6. The authority citation for part 772 continues to read as follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; notice of August 
14, 2002, 67 FR 53721, August 16, 2002.


0
7. Section 772.1 is amended by revising the definition of ``U.S. 
Person'' to read as follows:


Sec.  772.1  Definitions of terms as used in the Export Administration 
Regulations.

* * * * *
    U.S. Person. (a) For purposes of Sec. Sec.  744.6, 744.10, 744.11, 
744.12, 744.13 and 744.14 of the EAR, the term U.S. person includes:
    (1) Any individual who is a citizen of the United States, a 
permanent resident alien of the United States, or a protected 
individual as defined by 8 U.S.C. 1324b(a)(3);
    (2) Any juridical person organized under the laws of the United 
States or any jurisdiction within the United States, including foreign 
branches; and
    (3) Any person in the United States.
    (b) See also Sec.  740.9 and parts 746 and 760 of the EAR for 
definitions of ``U.S. person'' that are specific to those parts.
* * * * *


[[Page 34196]]


    Dated: May 28, 2003.
James J. Jochum,
Assistant Secretary for Export Administration.
[FR Doc. 03-14253 Filed 6-3-03; 8:50 am]
BILLING CODE 3510-33-P