[Federal Register Volume 71, Number 193 (Thursday, October 5, 2006)]
[Rules and Regulations]
[Pages 58742-58744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-16409]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 594, 595, and 597


Global Terrorism Sanctions Regulations; Terrorism Sanctions 
Regulations; Foreign Terrorist Organizations Sanctions Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule; amendment.

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SUMMARY: The Office of Foreign Assets Control of the U.S. Department of 
the Treasury (``OFAC'') is revising the Global Terrorism Sanctions 
Regulations, the Terrorism Sanctions Regulations, and the Foreign 
Terrorist Organizations Sanctions Regulations to authorize in-kind 
donations of medical devices and

[[Page 58743]]

medical services by U.S. nongovernmental organizations to the 
Palestinian Authority Ministry of Health.

DATES: Effective Date: July 6, 2006.

FOR FURTHER INFORMATION CONTACT: Assistant Director of Compliance, 
Outreach & Implementation, tel.: 202/622-2490, Assistant Director of 
Licensing, tel.: 202/622-2480, Assistant Director of Policy, tel.: 202/
622-4855, or Chief Counsel, tel.: 202/622-2410, Office of Foreign 
Assets Control, Department of the Treasury, Washington, DC 20220 (not 
toll free numbers).

SUPPLEMENTARY INFORMATION:

Electronic and Facsimile Availability

    This document and additional information concerning the Office of 
Foreign Assets Control (``OFAC'') are available from OFAC's Web site 
(http://www.treas.gov/ofac) or via facsimile through a 24-hour fax-on-
demand service, tel.: (202) 622-0077.

Background

    The Office of Foreign Assets Control (``OFAC'') administers three 
sanctions programs with respect to terrorists and terrorist 
organizations. The Terrorism Sanctions Regulations, 31 CFR part 595 
(``TSR''), implement Executive Order 12947 of January 23, 1995, in 
which the President declared a national emergency with respect to 
``grave acts of violence committed by foreign terrorists that disrupt 
the Middle East peace process * * *'' The Global Terrorism Sanctions 
Regulations, 31 CFR part 594 (``GTSR''), implement Executive Order 
13224 of September 23, 2001, in which the President declared an 
emergency more generally with respect to ``grave acts of terrorism and 
threats of terrorism committed by foreign terrorists * * *'' The 
Foreign Terrorist Organizations Sanctions Regulations, 31 CFR part 597 
(``FTOSR''), implement provisions of the Antiterrorism and Effective 
Death Penalty Act of 1996.
    HAMAS is a target of each of these sanctions programs, resulting in 
the blocking of any property and interests in property of HAMAS that 
are in the United States or hereafter come within the United States, or 
that are in or hereafter come within the possession or control of a 
United States person. These restrictions prohibit U.S. persons from 
dealing in property or interests in property of HAMAS. After the 
January 26, 2006 parliamentary elections in the West Bank and Gaza, 
HAMAS members formed the majority party within the Palestinian 
Legislative Council. In addition, HAMAS currently holds positions of 
authority within the government, including the position of Prime 
Minister. OFAC determined that, as a result of these elections, HAMAS 
has a property interest in the transactions of the Palestinian 
Authority. Accordingly, pursuant to the TSR, the GTSR, and the FTOSR, 
U.S. persons are prohibited from engaging in transactions with the 
Palestinian Authority unless authorized.
    Consistent with current foreign policy, OFAC issued six general 
licenses on April 12, 2006, authorizing U.S. persons to engage in 
certain transactions in which the Palestinian Authority may have an 
interest. One of those general licenses authorized in-kind donations of 
medicine by U.S. nongovernmental organizations to the Palestinian 
Authority Ministry of Health, provided that such donations were 
strictly for distribution in the West Bank or Gaza and not intended for 
resale. Based on foreign policy considerations, OFAC is expanding this 
license, effective July 6, 2006, to allow U.S. nongovernmental 
organizations to make in-kind donations to the Palestinian Authority 
Ministry of Health of medical services and medical devices, which 
include medical supplies, in addition to donations of medicine, 
provided that such donations are strictly for distribution in the West 
Bank or Gaza and not intended for resale.

Public Participation

    Because the amendment of 31 CFR parts 594, 595, and 597 involves a 
foreign affairs function, the provisions of Executive Order 12866 and 
the Administrative Procedure Act (5 U.S.C. 553) requiring notice of 
proposed rulemaking, opportunity for public participation, and delay in 
effective date, are inapplicable. Because no notice of proposed 
rulemaking is required for this rule, the Regulatory Flexibility Act (5 
U.S.C. 601-612) does not apply.

Paperwork Reduction Act

    The collections of information related to 31 CFR parts 594, 595, 
and 597 are contained in 31 CFR part 501 (the ``Reporting, Procedures 
and Penalties Regulations''). Pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3507), those collections of information have been 
approved by the Office of Management and Budget under control number 
1505-0164. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless the 
collection of information displays a valid control number.

List of Subjects

31 CFR Part 594

    Administrative practice and procedure, Banks, Banking, Penalties, 
Reporting and recordkeeping requirements, Terrorism.

31 CFR Part 595

    Administrative practice and procedure, Banks, Banking, Currency, 
Foreign investments in United States, Penalties, Reporting and 
recordkeeping requirements, Securities, Terrorism.

31 CFR Part 597

    Administrative practice and procedure, Banks, Banking, Currency, 
Foreign investments in United States, Penalties, Reporting and 
recordkeeping requirements, Securities, Terrorism.


0
For the reasons set forth in the preamble, the Office of Foreign Assets 
Control amends 31 CFR parts 594, 595, and 597 as follows:

PART 594--GLOBAL TERRORISM SANCTIONS REGULATIONS

0
1. The authority citation for part 594 continues to read as follows:

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 31 U.S.C. 321(b); 50 
U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 
U.S.C. 2461 note); E.O. 13224, 66 FR 49079, September 25, 2001; E.O. 
13268, 67 FR 44751, July 3, 2002; 3 CFR, 2002 Comp., p. 240; E.O. 
13284, 64 FR 4075, January 28, 2003.

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

0
2. Revise Sec.  594.515 to read as follows:


Sec.  594.515  In-kind donations of medicine, medical devices, and 
medical services.

    (a) Effective July 6, 2006, nongovernmental organizations that are 
U.S. persons are authorized to provide in-kind donations of medicine, 
medical devices, and medical services to the Palestinian Authority 
Ministry of Health, provided that such donations are strictly for 
distribution in the West Bank or Gaza and not intended for resale, and 
provided further that no payment pursuant to this license may involve a 
debit to an account of the Palestinian Authority on the books of a U.S. 
financial institution or to any account blocked pursuant to this part.
    (b) For the purposes of this section only, the term medical device 
has the meaning given the term ``device'' in section 201 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 321), including medical 
supplies, but does not include any item listed on the Commerce Control 
List in the Export

[[Page 58744]]

Administration Regulations, 15 CFR part 774, supplement no. 1.


    Note to paragraph (b): Nongovernmental organizations that are 
interested in providing items listed on the Commerce Control List to 
the Palestinian Authority Ministry of Health must apply for a 
specific license from the Office of Foreign Assets Control.

PART 595--TERRORISM SANCTIONS REGULATIONS

0
1. The authority citation for part 595 continues to read as follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 
E.O. 12947, 60 FR 5079; 3 CFR, 1995 Comp., p. 319.

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

0
2. Revise Sec.  595.513 to read as follows:


Sec.  595.513  In-kind donations of medicine, medical devices, and 
medical services.

    (a) Effective July 6, 2006, nongovernmental organizations that are 
U.S. persons are authorized to provide in-kind donations of medicine, 
medical devices, and medical services to the Palestinian Authority 
Ministry of Health, provided that such donations are strictly for 
distribution in the West Bank or Gaza and not intended for resale, and 
provided further that no payment pursuant to this license may involve a 
debit to an account of the Palestinian Authority on the books of a U.S. 
financial institution or to any account blocked pursuant to this part.
    (b) For the purposes of this section only, the term medical device 
has the meaning given the term ``device'' in section 201 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 321), including medical 
supplies, but does not include any item listed on the Commerce Control 
List in the Export Administration Regulations, 15 CFR part 774, 
supplement no. 1.


    Note to paragraph (b): Nongovernmental organizations that are 
interested in providing items listed on the Commerce Control List to 
the Palestinian Authority Ministry of Health must apply for a 
specific license from the Office of Foreign Assets Control.

PART 597--FOREIGN TERRORIST ORGANIZATIONS SANCTIONS REGULATIONS

0
1. The authority citation for part 597 continues to read as follows:

    Authority: 31 U.S.C. 321(b); Pub. L. 101-410, 104 Stat. 890 (28 
U.S.C. 2461 note); Pub. L. 104-132, 110 Stat. 1214, 1248-53 (8 
U.S.C. 1189, 18 U.S.C. 2339B).

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

0
2. Revise Sec.  597.511 to read as follows:


Sec.  597.511  In-kind donations of medicine, medical devices, and 
medical services.

    (a) Effective July 6, 2006, U.S. financial institutions are 
authorized to conduct all transactions ordinarily incident to the 
provision by nongovernmental organizations that are U.S. persons of in-
kind donations of medicine, medical devices, and medical services to 
the Palestinian Authority Ministry of Health, provided that such 
donations are strictly for distribution in the West Bank or Gaza and 
not intended for resale, and provided further that no payment pursuant 
to this license may involve a debit to an account of the Palestinian 
Authority on the books of a U.S. financial institution or to any 
account blocked pursuant to this part.
    (b) For the purposes of this section only, the term medical device 
has the meaning given the term ``device'' in section 201 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 321), including medical 
supplies, but does not include any item listed on the Commerce Control 
List in the Export Administration Regulations, 15 CFR part 774, 
supplement no. 1.
    (c) U.S. financial institutions are authorized to conduct all 
transactions ordinarily incident to the provision by nongovernmental 
organizations that are U.S. persons of in-kind donations of medical 
devices listed on the Commerce Control List to the Palestinian 
Authority Ministry of Health, provided that
    (1) Such donation is licensed by OFAC; and
    (2) Such donation is authorized under or pursuant to the Export 
Administration Regulations.
    (d) The retention and reporting provisions of Sec.  597.201 shall 
not apply with respect to transactions authorized by paragraphs (a) and 
(c) of this section.

    Dated: September 6, 2006.
Adam J. Szubin,
Acting Director, Office of Foreign Assets Control.
[FR Doc. E6-16409 Filed 10-4-06; 8:45 am]
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