[Federal Register Volume 68, Number 124 (Friday, June 27, 2003)]
[Rules and Regulations]
[Pages 38188-38190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-16216]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 575


Iraqi Sanctions Regulations; Authorization of Certain New 
Transactions

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, 
31 CFR part 575, to include a general license authorizing certain new 
transactions. The general license reflects United Nations Security 
Council Resolution 1483 and authorizes all transactions otherwise 
prohibited by subpart B of the Iraqi Sanctions Regulations, with four 
exceptions: Accounts and other property that were blocked as of May 23, 
2003, remain blocked, certain exports and reexports to Iraq will 
continue to require an OFAC license, transactions with certain persons 
are not authorized, and transactions in certain Iraqi cultural property 
are not authorized. With those four exceptions, this general license 
effectively lifts the economic sanctions administered by OFAC with 
respect to Iraq.

DATES: Effective May 23, 2003. Written comments must be received no 
later than August 26, 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: 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, with respect to 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 (the ``Regulations''), implement Executive Orders 12722 
and 12724 and are administered by the Treasury Department's Office of 
Foreign Assets Control (``OFAC'').
    On May 22, 2003, the United Nations Security Council adopted 
Resolution 1483, which substantially lifted the multilateral economic 
sanctions with respect to Iraq. On May 23, 2003, OFAC issued a general 
license that reflected Resolution 1483. This general license is 
published today as new section 575.533 of the Regulations.
    Paragraph (a) of section 575.533 authorizes all transactions that 
are otherwise prohibited by subpart B of the Regulations, with four 
exceptions addressed in paragraph (b). Paragraph (b)(1) provides that 
all property and interests in property, including accounts, that were 
blocked pursuant to subpart B of the Regulations as of the effective 
date of this section remain blocked and subject to the prohibitions and 
requirements of the Regulations.
    Paragraph (b)(2) provides that 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 OFAC. The note to paragraph (b)(2) explains 
the scope of the term ``controlled by the Department of Commerce'' and 
requests that exporters and reexporters contact the Department of 
Commerce, Bureau of Industry and Security, to inquire whether 
particular goods or technology are so controlled.
    Paragraph (b)(3) provides that the general license does not 
authorize transactions with three classes of persons: (i) Specially-
designated nationals or ``SDNs'' of the Government of Iraq, (ii) 
persons on the Defense Department's 55-person Watch List, or (iii) 
persons identified by the 661 Committee pursuant to paragraphs 19 and 
23 of United Nations Security Council Resolution 1483, adopted May 22, 
2003. To the extent that such transactions would otherwise be 
prohibited by the Regulations, they remain prohibited.
    Paragraph (b)(4) provides that the general license does not 
authorize transactions with respect to Iraqi cultural property or other 
items of archaeological, historical, cultural, rare scientific, and 
religious importance illegally removed from the Iraq National Museum, 
the National Library, and other locations in Iraq since August 6, 1990. 
Any trade in or transfer of such items, including items with respect to 
which reasonable suspicion exists that they have been illegally 
removed, remains prohibited by subpart B of the Regulations. The note 
to paragraph (b)(4) refers inquiries concerning particular Iraqi 
cultural property to the Cultural Property Office at the Department of 
State.
    Paragraph (c) provides that the effective date of the section is 
May 23, 2003.
    Examples of newly-authorized transactions include investment by 
U.S. persons in Iraq, the importation of goods or services of Iraqi 
origin (with the exception of the cultural properties described in 
paragraph (b)(4)), travel-related transactions involving Iraq, the 
transfer of funds to or from Iraq, and transactions related to 
transportation to or from Iraq. This authorization, however, does not 
eliminate the need to comply with other provisions of 31 CFR chapter V 
or with other applicable provisions of law, including any aviation, 
financial, or trade requirements of agencies other than OFAC. Such 
requirements include the International Traffic in Arms Regulations (22 
CFR chapters 120-130) administered by the Department of State.

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,

[[Page 38189]]

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 August 26, 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 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 September 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 E--Licenses, Authorizations, and Statements of Licensing 
Policy

0
2. Add a new Sec.  575.533 to subpart E to read as follows:


Sec.  575.533  Certain new transactions.

    (a) New Transactions. Except as provided in paragraph (b) of this 
section, on or after the effective date of this section, all 
transactions that are otherwise prohibited by subpart B of this part 
are authorized.

    Note to paragraph (a): This authorization does not eliminate the 
need to comply with other provisions of 31 CFR chapter V or with 
other applicable provisions of law, including any aviation, 
financial, or trade requirements of agencies other than the 
Department of the Treasury's Office of Foreign Assets Control. Such 
requirements include the International Traffic in Arms Regulations 
(22 CFR parts 120 through 130) administered by the Department of 
State.

    (b) Continued Blocking, Special Provisions for Certain Exports and 
Reexports, and Additional Conditions. (1) All property and interests in 
property that were blocked pursuant to subpart B of this part as of the 
effective date of this section remain blocked and subject to the 
prohibitions and requirements of this part.
    (2) 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.

    Note to paragraph (b)(2): The term ``controlled by the 
Department of Commerce'' means subject to a license requirement 
under the Department of Commerce's Export Administration Regulations 
(EAR). Items subject to a license requirement under the EAR include 
items on the Commerce Control List that are listed in 15 CFR 746.3 
as requiring a license for exportation or reexportation to Iraq, as 
well as items and activities that require a license under the end-
use and end-user provisions of 15 CFR part 744. To inquire whether 
particular goods or technology are controlled by the Department of 
Commerce under the Export Administration Regulations for exportation 
to Iraq, the exporter or reexporter should contact the Department of 
Commerce, Bureau of Industry and Security.

    (3) This section does not authorize any transactions with:
    (i) Persons or organizations determined by the Director of the 
Office of Foreign Assets Control to be included within Sec.  575.306,
    (ii) Persons on the Defense Department's 55-person Watch List, or
    (iii) Persons identified by the 661 Committee pursuant to 
paragraphs 19 and 23 of United Nations Security Council Resolution 
1483, adopted May 22, 2003.

    Note to paragraph (b)(3): Persons determined by the Director of 
the Office of Foreign Assets Control to be included within Sec.  
575.306 are also known as specially-designated nationals (``SDNs'') 
of the Government of Iraq. These persons are included in Appendix A 
to 31 CFR chapter V, and an up-to-date list is maintained on the 
Office of Foreign Assets Control's Web site at http://www.treas.gov/ofac.

    (4) This section does not authorize any transactions with respect 
to Iraqi cultural property or other items of archaeological, 
historical, cultural, rare scientific, and religious importance 
illegally removed from the Iraq National Museum, the National Library, 
and other locations in Iraq since August 6, 1990. Any trade in or 
transfer of such items, including items with respect to which 
reasonable suspicion exists that they have been illegally removed,

[[Page 38190]]

remains prohibited by subpart B of this part.

    Note to paragraph (b)(4): Questions concerning whether 
particular Iraqi cultural property or other items are subject to 
this paragraph should be directed to the Cultural Property Office, 
U.S. Department of State, tel. 202/619-6612, fax 202/260-4893, Web 
site http://www.exchanges.state.gov/culprop, email 
[email protected].

    (c) Effective Date. This section is effective May 23, 2003.

    Dated: June 4, 2003.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: June 23, 2003.
Juan C. Zarate,
Deputy Assistant Secretary (Terrorist Financing and Financial Crimes), 
Department of the Treasury.
[FR Doc. 03-16216 Filed 6-24-03; 11:30 am]
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