[Federal Register Volume 68, Number 190 (Wednesday, October 1, 2003)]
[Rules and Regulations]
[Pages 56685-56686]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24588]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 2001-16; FAR Case 2001-015; Item VII]
RIN 9000-AJ35


Federal Acquisition Regulation; Prohibited Sources

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on a final rule 
amending the Federal Acquisition Regulation (FAR) to implement recent 
Executive orders and to reflect the regulations of the Department of 
the Treasury's Office of Foreign Assets Control (OFAC).

DATES: Effective Date: October 31, 2003.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ms. Cecelia Davis, Procurement Analyst, at (202) 219-
0202. Please cite FAC 2001-16, FAR case 2001-015.

SUPPLEMENTARY INFORMATION:

A. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 67 FR 13080, March 20, 2002. The proposed rule implemented 
Executive Order 13192, Lifting and Modifying Measures With Respect to 
the Federal Republic of Yugoslavia (Serbia and Montenegro), and 
reflected the regulations of OFAC in the Department of the Treasury.
    One respondent submitted public comments. The Councils considered 
the public comments before agreeing to convert the proposed rule to a 
final rule with minor changes.
    The respondent recommended that we restore the statement at FAR 
25.701(a) that the restrictions apply to acquisitions of supplies and 
services, even for overseas use. The Councils do not concur. This 
statement regarding overseas use was included at FAR 25.701(a) because 
we were trying to make a distinction between prohibitions on import of 
some supplies and services into the United States and the voluntary 
policy of the Government not to acquire such supplies for overseas use. 
However, the Department of the Treasury brought to the attention of the 
Councils that most of the prohibitions already applied to overseas 
acquisition and use as well as to importation. The regulations at 31 
CFR chapter V provide details as to whether the prohibitions apply to 
acquisition for overseas use as well as importation.
    The respondent also was concerned that we should retain paragraph 
(c) of FAR 52.225-13, Restrictions on Certain Foreign Purchases. 
Paragraph (c) provides for flowdown of the restrictions to 
subcontractors. The proposed rule did not delete paragraph (c) from the 
clause. It was not reprinted in the Federal Register notice because no 
changes were proposed to that paragraph.
    There are other recent directives which are relevant to subpart 
25.7, which are not yet implemented in the OFAC regulations:
    [sbull] Executive Order 13224, Blocking Property and Prohibiting 
Transactions with Persons Who Commit, Threaten to Commit, or Support 
Terrorism;
    [sbull] Executive Order 13288, Blocking Property of Persons 
Undermining Democratic Processes or Institutions in Zimbabwe;
    [sbull] Executive Order 13268, Termination of Emergency With 
Respect to the Taliban and Amendment of Executive Order 13224 of 
September 23, 2001; and
    [sbull] The general license issued on May 23, 2003, by the 
Department of the Treasury entitled ``Iraqi Sanctions Regulations.''
    Contracting officers are to refer to the above directives and the 
most recent version of the regulations of OFAC at 31 CFR chapter V.
    Except as authorized by OFAC, most transactions involving Cuba, 
Iran, Libya, and Sudan are prohibited, as are most imports from North 
Korea. This rule removes Serbia, the Taliban-controlled regions of 
Afghanistan, and Iraq from the list of prohibited sources and points 
the contracting officer to lists of entities and individuals subject to 
economic sanctions that are available at http://www.epls.gov/TerList1.html.
    The contracting officer is no longer authorized in unusual 
circumstances to acquire for use outside the United States supplies or 
services restricted by this section, unless specifically authorized by 
OFAC. However, OFAC has granted authority to Department of Defense 
personnel to make emergency acquisitions in direct support of U.S. or 
allied forces deployed in military contingency, humanitarian, or 
peacekeeping operations in a country or region subject to economic 
sanctions administered by OFAC.
    This rule also amends the legal basis for use of the clause 52.225-
13, Restrictions on Certain Foreign Purchases, that is provided in the 
clauses at 52.212-5, Contract Terms and Conditions Required to 
Implement Statutes or Executive Orders--Commercial Items, and 52.213-4, 
Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Items). The rule replaces the list of specific Executive orders, which 
is incomplete and outdated, with a general reference to all 
proclamations, Executive orders, and statutes administered by OFAC.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final

[[Page 56686]]

rule will not have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., because the rule only affects 
acquisitions from prohibited sources.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
3501, et seq.

List of Subjects in 48 CFR Parts 25 and 52

    Government procurement.

    Dated: September 24, 2003.
Laura G. Auletta,
Director, Acquisition Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 25 and 52 as set forth 
below:
0
1. The authority citation for 48 CFR parts 25 and 52 is revised to read 
as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 25--FOREIGN ACQUISITION

0
2. Revise section 25.701 to read as follows:


25.701  Restrictions.

    (a) Except as authorized by the Office of Foreign Assets Control 
(OFAC) in the Department of the Treasury, agencies and their 
contractors and subcontractors must not acquire any supplies or 
services if any proclamation, Executive order, or statute administered 
by OFAC, or if OFAC's implementing regulations at 31 CFR chapter V, 
would prohibit such a transaction by a person subject to the 
jurisdiction of the United States.
    (b) Except as authorized by OFAC, most transactions involving Cuba, 
Iran, Libya, and Sudan are prohibited, as are most imports from North 
Korea into the United States or its outlying areas. In addition, lists 
of entities and individuals subject to economic sanctions are included 
in OFAC's List of Specially Designated Nationals and Blocked Persons at 
http://www.epls.gov/Terlist1.html. More information about these 
restrictions, as well as updates, is available in OFAC's regulations at 
31 CFR chapter V and/or on OFAC's Web site at http://www.treas.gov/ofac.


25.702  [Amended]

0
3. Amend section 25.702 by removing ``622-2520'' and adding ``622-
2490'' in its place.


25.1103  [Amended]

0
4. Amend section 25.1103 in paragraph (a) by removing ``(see 
25.701(a)(2))''.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Amend section 52.212-5 by revising the date of the clause and 
paragraph (b)(24) to read as follows:


52.212-5  Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required to Implement Statutes or 
Executive Orders--Commercial Items (Oct. 2003)

* * * * *
    (b) * * *
    (24) 52.225-13, Restrictions on Certain Foreign Purchases (Oct. 
2003) (E.o.s, proclamations, and statutes administered by the Office 
of Foreign Assets Control of the Department of the Treasury).
* * * * *


0
6. Amend section 52.213-4 by revising paragraph (a)(1)(iv) to read as 
follows:


52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

* * * * *
    (a) * * *
    (1) * * *
    (iv) 52.225-13, Restrictions on Certain Foreign Purchases (Oct. 
2003) (E.o.s, proclamations, and statutes administered by the Office 
of Foreign Assets Control of the Department of the Treasury).
* * * * *


0
7. Amend section 52.225-13 by revising the date of the clause and 
paragraphs (a) and (b) to read as follows:


52.225-13  Restrictions on Certain Foreign Purchases.

* * * * *

Restrictions on Certain Foreign Purchases (Oct. 2003)

    (a) Except as authorized by the Office of Foreign Assets Control 
(OFAC) in the Department of the Treasury, the Contractor shall not 
acquire, for use in the performance of this contract, any supplies 
or services if any proclamation, Executive order, or statute 
administered by OFAC, or if OFAC's implementing regulations at 31 
CFR chapter V, would prohibit such a transaction by a person subject 
to the jurisdiction of the United States.
    (b) Except as authorized by OFAC, most transactions involving 
Cuba, Iran, Libya, and Sudan are prohibited, as are most imports 
from North Korea, into the United States or its outlying areas. 
Lists of entities and individuals subject to economic sanctions are 
included in OFAC's List of Specially Designated Nationals and 
Blocked Persons at http://www.epls.gov/Terlist1.html. More 
information about these restrictions, as well as updates, is 
available in the OFAC's regulations at 31 CFR chapter V and/or on 
OFAC's Web site at http://www.treas.gov/ofac.
* * * * *
[FR Doc. 03-24588 Filed 9-30-03; 8:45 am]
BILLING CODE 6820-EP-P