[Federal Register Volume 68, Number 226 (Monday, November 24, 2003)]
[Rules and Regulations]
[Pages 65844-65845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29237]



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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 575


Authorization for U.S. Financial Institutions To Transfer Certain 
Claims Against the Government of 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 
Department of the Treasury is amending the Iraqi Sanctions Regulations 
to incorporate a general license authorizing U.S. financial 
institutions to transfer certain claims against the Government of Iraq 
for unpaid loans and other debts to their home offices or to other 
foreign offices of the same institution.

DATES: Effective September 30, 2003. Written comments must be received 
no later than January 23, 2004.

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 section 575.533 
of the Regulations (68 FR 38188-38190). Section 575.533 of the 
Regulations contained four exceptions to the broad lifting of 
sanctions, including a provision that ``[a]ll property and interests in 
property that were blocked * * * as of the effective date of this 
section [i.e., May 23, 2003] remain blocked * * *.''
    On September 30, 2003, OFAC issued another general license that is 
being published today as new section 575.534 of the Regulations. New 
section 575.534 provides a limited authorization for U.S. financial 
institutions to transfer a category of blocked property and interests 
in property--i.e., their ``claims that were booked in the United States 
as of May 23, 2003, against the Government of Iraq for unpaid loans and 
other debts''--to their home offices or to other foreign offices of the 
same institution. This new section authorizes only the transfer of 
claims under the circumstances described and does not authorize the 
debiting of any blocked account.

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 January 23, 2004. 
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 February 23, 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 in 31 CFR Part 575

    Administrative practice and procedure, Banks, banking, Blocking of 
assets, Exports, Foreign trade,

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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; E.O. 13290, 68 FR 
14307, March 20, 2003.

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

0
2. Add a new Sec.  575.534 to subpart E to read as follows:


Sec.  575.534  Transfers of certain blocked claims by U.S. financial 
institutions.

    U.S. financial institutions are authorized to transfer claims that 
were booked in the United States as of May 23, 2003, against the 
Government of Iraq for unpaid loans and other debts to their home 
offices or to other foreign offices of the same institution. This 
section authorizes only the transfer of claims and does not authorize 
the debiting of any blocked account.

    Dated: September 30, 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. 03-29237 Filed 11-19-03; 2:59 pm]
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