[Federal Register Volume 68, Number 208 (Tuesday, October 28, 2003)]
[Rules and Regulations]
[Pages 61362-61363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27073]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 575


Removal of Certain Provisions of the Iraqi Sanctions Regulations; 
Interpretive Guidance

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 
Department of the Treasury is amending the Iraqi Sanctions Regulations 
to remove provisions that preceded the substantial lifting of economic 
sanctions in late May 2003. OFAC also is publishing interpretive 
guidance concerning secondary-market transactions in Iraqi debt.

DATES: Effective October 28, 2003. Written comments must be received no 
later than December 29, 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/eotffc/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, the President issued Executive Order 12722, 
declaring a national emergency with respect to Iraq. This order was 
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 and 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 by authorizing most transactions 
that had been prohibited by the Regulations. This general license was 
published in the Federal Register on June 27, 2003, as new section 
575.533 of the Regulations (68 FR 38188-38190).
    Section 575.533 supercedes prior substantive licensing provisions 
of the Regulations. OFAC is removing and reserving previous substantive 
licensing provisions--i.e., sections 575.505, 575.506, 575.507, 
575.508, 575.509, 575.510, 575.511, 575.513, 575.514, 575.517, 575.518, 
575.519, 575.520, 575.521, 575.522, 575.523, 575.524, 575.525, 575.526, 
575.527, 575.528, 575.529, 575.530, 575.531, and 575.532--in an effort 
to clarify that the operative authorization now appears in section 
575.533.
    OFAC also is removing certain definitions that are no longer 
relevant because they pertain to other regulatory provisions that have 
been removed. The following outdated definitions are being removed: 
section 575.307 (defining ``Government of Kuwait''), section 575.325 
(defining ``986 Escrow Account'' and ``United Nations Iraq Account,'' 
both of which refer to a defunct account), and sections 575.327 and 
575.328 (defining ``Memorandum of Understanding'' and ``Guidelines,'' 
both of which refer to outdated procedures for approving certain 
transactions involving Iraq).
    OFAC expects to make other conforming amendments to the Regulations 
in the near future and welcomes public comments on this endeavor.
    OFAC also is publishing interpretive guidance concerning the scope 
of section 575.533. The new section 575.419 published today describes 
the circumstances in which U.S. persons may trade in Iraqi commercial 
or sovereign debt.

Request for Comments

    Because these regulations involve 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, they are 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 December 29, 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.

[[Page 61363]]

    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 January 26, 2004 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

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


Sec. Sec.  575.307, 575.325, 575.327 and 575.328  [Removed and 
reserved]

0
2. Remove and reserve Sec. Sec.  575.307, 575.325, 575.327, and 
575.328.

Subpart D--Interpretations

0
3. Add a new Sec.  575.419 to subpart D to read as follows:


Sec.  575.419  Transactions in Iraqi debt.

    Section 575.533 authorizes U.S. persons to trade in Iraqi 
commercial or sovereign debt in secondary markets, subject to the 
following conditions:
    (a) Such debt was not held in the United States or within the 
possession or control of a U.S. person as of May 23, 2003, see Sec.  
575.533(b)(1), (c); and
    (b) Unless licensed or otherwise authorized by the Office of 
Foreign Assets Control, no U.S. person is permitted to enter into any 
transaction, including an attempt to collect on debt, with persons or 
organizations determined by the Director of the Office of Foreign 
Assets Control to be included within Sec.  575.306, persons on the 
Defense Department's 55-person Watch List, or persons identified by the 
661 Committee pursuant to paragraphs 19 and 23 of United Nations 
Security Council Resolution 1483, adopted May 22, 2003, see Sec.  
575.533(b)(3).

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


Sec. Sec.  575.505--575.511, 575.513, 575.514, 575.517-
575.532  [Removed and reserved]

0
4. Remove and reserve Sec. Sec.  575.505, 575.506, 575.507, 575.508, 
575.509, 575.510, 575.511, 575.513, 575.514, 575.517, 575.518, 575.519, 
575.520, 575.521, 575.522, 575.523, 575.524, 575.525, 575.526, 575.527, 
575.528, 575.529, 575.530, 575.531, and 575.532.

    Dated: September 9, 2003.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: October 15, 2003.
Juan C. Zarate,
Deputy Assistant Secretary (Terrorist Financing and Financial Crimes), 
Department of the Treasury.
[FR Doc. 03-27073 Filed 10-23-03; 2:13 pm]
BILLING CODE 4810-25-P