[Federal Register Volume 75, Number 46 (Wednesday, March 10, 2010)]
[Rules and Regulations]
[Pages 10997-11000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5023]


-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 515, 538, and 560


Cuban Assets Control Regulations; Sudanese Sanctions Regulations; 
Iranian Transactions Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of the Treasury's Office of Foreign Assets 
Control (``OFAC'') is amending the Sudanese Sanctions Regulations and 
the Iranian Transactions Regulations to authorize the exportation of 
certain services and software incident to the exchange of personal 
communications over the Internet. Similarly, OFAC is amending the Cuban 
Assets Control Regulations to authorize the exportation of certain 
services incident to the exchange of personal communications over the 
Internet.

DATES: Effective Date: March 8, 2010.

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

SUPPLEMENTARY INFORMATION: 

[[Page 10998]]

Electronic and Facsimile Availability

    This document and additional information concerning OFAC are 
available from OFAC's Web site (http://www.treas.gov/ofac). Certain 
general information pertaining to OFAC's sanctions programs also is 
available via facsimile through a 24-hour fax-on-demand service, tel.: 
202-622-0077.

Background

    OFAC is amending the Sudanese Sanctions Regulations, 31 CFR part 
538 (the ``SSR''), and the Iranian Transactions Regulations, 31 CFR 
part 560 (the ``ITR''), to authorize the exportation to persons in 
Sudan and Iran, respectively, of certain services and software incident 
to the exchange of personal communications over the Internet.
    Unless authorized by a general or specific license, or otherwise 
exempt, the exportation of such services and software from the United 
States or by a United States person, wherever located, to Sudan or Iran 
is prohibited. Pursuant to section 538.205 of the SSR, the exportation 
or reexportation, directly or indirectly, to Sudan of any goods, 
technology, or services from the United States or by a United States 
person, wherever located, or requiring the issuance of a license by a 
Federal agency, is prohibited. As set forth in section 538.212(g)(1) of 
the SSR, however, this prohibition does not apply with respect to most 
exports and reexports to the Specified Areas of Sudan, as defined in 
section 538.320. In addition, pursuant to section 538.201 of the SSR, 
all property and interests in property of the Government of Sudan that 
are or come within the United States, or that are or come within the 
possession or control of U.S. persons, including their overseas 
branches, are blocked and may not be transferred, paid, exported, 
withdrawn or otherwise dealt in. The term property, as defined in 
section 538.310 of the SSR, specifically includes services. As defined 
in section 538.305 of the SSR, the term Government of Sudan does not 
include the regional government of Southern Sudan.
    Section 560.204 of the ITR provides that the exportation, 
reexportation, sale, or supply, directly or indirectly, from the United 
States or by a U.S. person, wherever located, of any goods, technology, 
or services to Iran or the Government of Iran is prohibited. The Iran-
Iraq Arms Non-Proliferation Act of 1992 (Pub. L. 102-484) (50 U.S.C. 
1701 note) (``IIANPA'') and section 6 of Executive Order 13059 of 
August 19, 1997 (``Prohibiting Certain Transactions With Respect to 
Iran'') (62 FR 44531, August 21, 1997), generally preclude OFAC from 
authorizing--whether by general or specific license--the exportation to 
Iran of any goods or technology listed on the Commerce Control List 
(``CCL'') in the Export Administration Regulations, 15 CFR parts 730 
through 774 (the ``EAR''), unless the President exercises the waiver 
authority provided in section 1606 of IIANPA. On September 27, 1994, 
the President delegated his authorities under IIANPA to the Secretary 
of State. Since much of the software necessary for the exchange of 
personal communications or the sharing of information over the Internet 
is listed on the CCL, the exercise of this waiver authority is 
necessary before OFAC may generally or specifically license the 
exportation of such software to Iran.
    On December 10, 2009, the Department of State determined that it is 
essential to the national interest of the United States to exercise the 
waiver authority in section 1606 of IIANPA with respect to the 
exportation to Iran of certain dual-use software classified as mass 
market software by the Department of Commerce (``Commerce'') and 
essential for the exchange of personal communications and/or sharing of 
information over the Internet. In reporting this determination to 
Congress on December 15, 2009, the Department of State explained that 
this software is necessary to foster and support the free flow of 
information to individual Iranian citizens and, therefore, is essential 
to the national interest of the United States.
    As events in Iran since last June's Presidential election there 
have shown, personal Internet-based communications are a vital tool for 
change. Similar considerations apply in Sudan. Accordingly, to ensure 
that the sanctions on Sudan and Iran do not have an unintended chilling 
effect on the ability of companies to provide personal communications 
tools to individuals in those countries, OFAC is adding new Sec.  
538.533 to the SSR and new Sec.  560.540 to the ITR. These new sections 
authorize the exportation from the United States or by U.S. persons, 
wherever located, to persons in Sudan and Iran, respectively, of 
certain services and software incident to the exchange of personal 
communications over the Internet, such as instant messaging, chat and 
e-mail, social networking, sharing of photos and movies, web browsing, 
and blogging. To qualify for this authorization, such services and 
software must be publicly available at no cost to the user. In 
addition, such software qualifies for this authorization only if it is 
(1) Classified as ``EAR99'' under the EAR; (2) not subject to the EAR; 
or (3) classified by Commerce as mass market software under export 
control classification number (``ECCN'') 5D992 of the EAR. These new 
sections of the SSR and the ITR, however, do not authorize the direct 
or indirect exportation of services or software with knowledge or 
reason to know that such services or software are intended for the 
Government of Sudan or the Government of Iran.
    New Sec.  538.533 of the SSR and new Sec.  560.540 of the ITR each 
contain a statement of licensing policy in addition to the general 
licenses authorizing the exportation of certain Internet-based personal 
communications services and software. Paragraph (c) of each of these 
two sections provides that specific licenses may be issued on a case-
by-case basis for the exportation of services and software not covered 
by the general license that are incident to the sharing of information 
over the Internet. To be eligible for consideration under this policy, 
software must be classified as ``EAR99,'' not subject to the EAR, or 
classified by Commerce as mass market software under ECCN 5D992 of the 
EAR.
    OFAC also is amending the Cuban Assets Control Regulations, 31 CFR 
part 515 (the ``CACR''), to add a similar general license authorizing 
the exportation to persons in Cuba of certain services incident to the 
exchange of personal communications over the Internet. Unless 
authorized by a general or specific license, the exportation of such 
services from the United States or by persons subject to U.S. 
jurisdiction to Cuba is prohibited. Section 515.201 of the CACR 
prohibits all dealings in, including, without limitation, transfers, 
withdrawals, or exportations of, any property in which Cuba or a Cuban 
national has any interest of any nature whatsoever, direct or indirect, 
by any person subject to the jurisdiction of the United States. The 
term property, as defined in Sec.  515.311 of the CACR, specifically 
includes services.
    On April 13, 2009, the President stated that the promotion of 
democracy and human rights in Cuba is in the national interest of the 
United States and is a key component of U.S. foreign policy in the 
Americas. The President announced an initiative to pursue these goals 
by, among other things, increasing the flow of information to the Cuban 
people. Consistent with that initiative, OFAC is adding new Sec.  
515.578 to the CACR to authorize the exportation from the United States 
or by persons subject to U.S. jurisdiction to persons in Cuba of 
certain services incident to the exchange of personal communications

[[Page 10999]]

over the Internet, such as instant messaging, chat and email, social 
networking, sharing of photos and movies, web browsing, and blogging. 
To qualify for this authorization, the services must be publicly 
available at no cost to the user. New Sec.  515.578 does not authorize 
the direct or indirect exportation of services with knowledge or reason 
to know that such services are intended for a prohibited official of 
the Government of Cuba, as defined in Sec.  515.337 of the CACR, or a 
prohibited member of the Cuban Communist Party, as defined in Sec.  
515.338.
    Like the new authorization sections added to the SSR and ITR, new 
Sec.  515.578 contains a statement of licensing policy in addition to 
the general license authorizing the exportation of certain Internet-
based personal communications services. Paragraph (c) of Sec.  515.578 
provides that specific licenses may be issued on a case-by-case basis 
for the exportation of services not covered by the general license that 
are incident to the sharing of information over the Internet.
    The new general license for Cuba, unlike those for Sudan and Iran, 
does not include an authorization for the exportation of software, 
because the exportation of goods and technology, including software, to 
Cuba is separately licensed or otherwise authorized by Commerce under 
the EAR. Section 515.533 of the CACR generally licenses all 
transactions ordinarily incident to the exportation of items from the 
United States, or the reexportation of 100% U.S.-origin items from a 
third country, to any person in Cuba, provided the exportation or 
reexportation is licensed or otherwise authorized by Commerce under the 
EAR, and provided further that only certain specified payment and 
financing terms may be used.
    By the addition of the authorizations described above to the SSR, 
ITR, and CACR, OFAC hopes to encourage the exchange of personal 
communications over the Internet by persons in Sudan, Iran, and Cuba.

Public Participation

    Because the amendments of the CACR, SSR, and ITR involve a foreign 
affairs function, Executive Order 12866 and the provisions of 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 the CACR, SSR, and ITR 
are contained in the Reporting, Procedures and Penalties Regulations, 
31 CFR part 501. 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 515

    Banks, Banking, Communications, Cuba, Exports, Foreign trade.

31 CFR Part 538

    Banks, Banking, Communications, Exports, Foreign trade, Sudan.

31 CFR Part 560

    Banks, Banking, Communications, Exports, Foreign trade, Iran.

0
For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control amends 31 CFR parts 515, 
538, and 560 as follows:

PART 515--CUBAN ASSETS CONTROL REGULATIONS

0
1. The authority citation for part 515 is revised to read as follows:

    Authority:  18 U.S.C. 2332d; 22 U.S.C. 2370(a), 6001-6010; 22 
U.S.C. 7201-7211; 31 U.S.C. 321(b); 50 U.S.C. App 1-44; Pub. L. 101-
410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 104-114, 110 Stat. 
785 (22 U.S.C. 6082); Pub. L. 105-277, 112 Stat. 2681; Pub. L. 111-
8, 123 Stat. 524; E.O. 9193, 7 FR 5205, 3 CFR, 1938-1943 Comp., p. 
1174; E.O. 9989, 13 FR 4891, 3 CFR, 1943-1948 Comp., p. 748; Proc. 
3447, 27 FR 1085, 3 CFR, 1959-1963 Comp., p. 157; E.O. 12854, 58 FR 
36587, 3 CFR, 1993 Comp., p. 614.

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

0
2. Add a new Sec.  515.578 to subpart E to read as follows:


Sec.  515.578  Exportation of certain services incident to Internet-
based communications.

    (a) Except as provided in paragraph (b) of this section, the 
exportation from the United States or by persons subject to U.S. 
jurisdiction to persons in Cuba of services incident to the exchange of 
personal communications over the Internet, such as instant messaging, 
chat and email, social networking, sharing of photos and movies, web 
browsing, and blogging, is authorized, provided that such services are 
publicly available at no cost to the user.
    (b) This section does not authorize:
    (1) The direct or indirect exportation of services with knowledge 
or reason to know that such services are intended for a prohibited 
official of the Government of Cuba, as defined in Sec.  515.337 of this 
part, or a prohibited member of the Cuban Communist Party, as defined 
in Sec.  515.338 of this part.
    (2) The direct or indirect exportation of Internet connectivity 
services or telecommunications transmission facilities (such as 
satellite links or dedicated lines).

    Note to Sec.  515.578(b)(2):  For general licenses related to 
the provision of telecommunications services between the United 
States and Cuba and contracts for telecommunications services 
provided to particular individuals in Cuba, see Sec.  515.542(b) and 
Sec.  515.542(c), respectively, of this part. For a general license 
and a statement of specific licensing policy related to the 
establishment of telecommunications facilities linking the United 
States or third countries and Cuba, see Sec.  515.542(d) of this 
part.


    (3) The direct or indirect exportation of web-hosting services that 
are for purposes other than personal communications (e.g., web-hosting 
services for commercial endeavors) or of domain name registration 
services.
    (4) The direct or indirect exportation of any items to Cuba.

    Note to Sec.  515.578(b)(4):  For the rules related to 
transactions ordinarily incident to the exportation or reexportation 
of items, including software, to Cuba, see Sec. Sec.  515.533 and 
515.559 of this part.

    (c) Specific licenses may be issued on a case-by-case basis for the 
exportation of other services incident to the sharing of information 
over the Internet.

PART 538--SUDANESE SANCTIONS REGULATIONS

0
3. The authority citation for part 538 is revised to read as follows:

    Authority:  3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 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); 22 U.S.C. 7201-7211; Pub. L. 109-344, 120 
Stat. 1869; Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); 
E.O. 13067, 62 FR 59989, 3 CFR, 1997 Comp., p. 230; E.O. 13412, 71 
FR 61369, 3 CFR, 2006 Comp., p. 244.

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

0
4. Add a new Sec.  538.533 to subpart E to read as follows:

[[Page 11000]]

Sec.  538.533  Exportation of certain services and software incident to 
Internet-based communications.

    (a) To the extent that such transactions are not exempt from the 
prohibitions of this part and subject to the restrictions set forth in 
paragraph (b) of this section, the following transactions are 
authorized:
    (1) The exportation from the United States or by U.S. persons, 
wherever located, to persons in Sudan of services incident to the 
exchange of personal communications over the Internet, such as instant 
messaging, chat and email, social networking, sharing of photos and 
movies, web browsing, and blogging, provided that such services are 
publicly available at no cost to the user.
    (2) The exportation from the United States or by U.S. persons, 
wherever located, to persons in Sudan of software necessary to enable 
the services described in paragraph (a)(1) of this section, provided 
that such software is classified as ``EAR99'' under the Export 
Administration Regulations, 15 CFR parts 730 through 774 (the ``EAR''), 
is not subject to the EAR, or is classified by the U.S. Department of 
Commerce (``Commerce'') as mass market software under export control 
classification number (``ECCN'') 5D992 of the EAR, and provided further 
that such software is publicly available at no cost to the user.
    (b) This section does not authorize:
    (1) The direct or indirect exportation of services or software with 
knowledge or reason to know that such services or software are intended 
for the Government of Sudan.
    (2) The direct or indirect exportation of any goods or technology 
listed on the Commerce Control List in the EAR, 15 CFR part 774, 
supplement No. 1 (``CCL''), except for software necessary to enable the 
services described in paragraph (a)(1) of this section that is 
classified by Commerce as mass market software under ECCN 5D992 of the 
EAR.
    (3) The direct or indirect exportation of Internet connectivity 
services or telecommunications transmission facilities (such as 
satellite links or dedicated lines).
    (4) The direct or indirect exportation of web-hosting services that 
are for purposes other than personal communications (e.g., web-hosting 
services for commercial endeavors) or of domain name registration 
services.
    (c) Specific licenses may be issued on a case-by-case basis for the 
exportation of other services and software incident to the sharing of 
information over the Internet, provided the software is classified as 
``EAR99,'' not subject to the EAR, or classified by Commerce as mass 
market software under ECCN 5D992 of the EAR.
    (d) Nothing in this section or in any license issued pursuant to 
paragraph (c) of this section relieves the exporter from compliance 
with the export license application requirements of another Federal 
agency.

PART 560--IRANIAN TRANSACTIONS REGULATIONS

0
5. The authority citation for part 560 is revised to read as follows:

    Authority:  3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C. 
2349aa-9; 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); 22 U.S.C. 7201-7211; 
Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); E.O. 12613, 52 
FR 41940, 3 CFR, 1987 Comp., p. 256; E.O. 12957, 60 FR 14615, 3 CFR, 
1995 Comp., p. 332; E.O. 12959, 60 FR 24757, 3 CFR, 1995 Comp., p. 
356; E.O. 13059, 62 FR 44531, 3 CFR, 1997 Comp., p. 217.

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

0
6. Add a new Sec.  560.540 to subpart E to read as follows:


Sec.  560.540  Exportation of certain services and software incident to 
Internet-based communications.

    (a) To the extent that such transactions are not exempt from the 
prohibitions of this part and subject to the restrictions set forth in 
paragraph (b) of this section, the following transactions are 
authorized:
    (1) The exportation from the United States or by U.S. persons, 
wherever located, to persons in Iran of services incident to the 
exchange of personal communications over the Internet, such as instant 
messaging, chat and email, social networking, sharing of photos and 
movies, web browsing, and blogging, provided that such services are 
publicly available at no cost to the user.
    (2) The exportation from the United States or by U.S. persons, 
wherever located, to persons in Iran of software necessary to enable 
the services described in paragraph (a)(1) of this section, provided 
that such software is classified as ``EAR99'' under the Export 
Administration Regulations, 15 CFR parts 730 through 774 (the ``EAR''), 
is not subject to the EAR, or is classified by the U.S. Department of 
Commerce (``Commerce'') as mass market software under export control 
classification number (``ECCN'') 5D992 of the EAR, and provided further 
that such software is publicly available at no cost to the user.
    (b) This section does not authorize:
    (1) The direct or indirect exportation of services or software with 
knowledge or reason to know that such services or software are intended 
for the Government of Iran.
    (2) The direct or indirect exportation of any goods or technology 
listed on the Commerce Control List in the EAR, 15 CFR part 774, 
supplement No. 1 (``CCL''), except for software necessary to enable the 
services described in paragraph (a)(1) of this section that is 
classified by Commerce as mass market software under ECCN 5D992 of the 
EAR.
    (3) The direct or indirect exportation of Internet connectivity 
services or telecommunications transmission facilities (such as 
satellite links or dedicated lines).
    (4) The direct or indirect exportation of web-hosting services that 
are for purposes other than personal communications (e.g., web-hosting 
services for commercial endeavors) or of domain name registration 
services.
    (c) Specific licenses may be issued on a case-by-case basis for the 
exportation of other services and software incident to the sharing of 
information over the Internet, provided the software is classified as 
``EAR99,'' not subject to the EAR, or classified by Commerce as mass 
market software under ECCN 5D992 of the EAR.

    Dated: March 3, 2010.
Adam J. Szubin,
Director, Office of Foreign Assets Control.
[FR Doc. 2010-5023 Filed 3-8-10; 10:00 am]
BILLING CODE 4810-AL-P