[Federal Register Volume 81, Number 247 (Friday, December 23, 2016)]
[Rules and Regulations]
[Pages 94254-94259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30968]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 560


Iranian Transactions and Sanctions Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

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[[Page 94255]]

SUMMARY: The Department of the Treasury's Office of Foreign Assets 
Control (OFAC) is adopting a final rule amending the Iranian 
Transactions and Sanctions Regulations (ITSR) to reflect OFAC's 
licensing policies and address inquiries from the regulated public. 
This final rule makes changes relating to authorized sales of 
agricultural commodities, medicine, and medical devices to Iran 
pursuant to the Trade Sanctions Reform and Export Enhancement Act of 
2000 (TSRA), as amended, and clarifies the definition of the terms 
goods of Iranian origin and Iranian-origin goods.

DATES: Effective: December 23, 2016.

FOR FURTHER INFORMATION CONTACT: The Department of the Treasury's 
Office of Foreign Assets Control: Assistant Director for Licensing, 
tel.: 202-622-2480, Assistant Director for Regulatory Affairs, tel.: 
202-622-4855, Assistant Director for Sanctions Compliance & Evaluation, 
tel.: 202-622-2490; or the Department of the Treasury's Office of the 
Chief Counsel (Foreign Assets Control), Office of the General Counsel, 
tel.: 202-622-2410.

SUPPLEMENTARY INFORMATION: 

Electronic Availability

    This document and additional information concerning OFAC are 
available from OFAC's Web site (www.treasury.gov/ofac).

Background

TSRA Amendments

    OFAC first issued regulations to implement TSRA (22 U.S.C. 7201 et 
seq.) on July 12, 2001 (66 FR 36683). Since then, OFAC has amended the 
licensing provisions of the ITSR (and its predecessor, the Iranian 
Transactions Regulations), 31 CFR part 560, as they relate to the 
exportation and reexportation of agricultural commodities, medicine, or 
medical devices to Iran on a number of occasions. As set forth in more 
detail below, OFAC is adopting a final rule to amend the licensing 
provisions of the ITSR to expand the scope of medical devices and 
agricultural commodities generally authorized for export or reexport to 
Iran and, in response to feedback from the regulated public regarding 
improving patient safety, provide new or expanded authorizations 
relating to training, replacement parts, software and services related 
to the operation, maintenance, and repair of medical devices, and items 
that are broken or connected to product recalls or other safety 
concerns.

Statutory Background

    TSRA provides that, with certain exceptions, the President may not 
impose a unilateral agricultural sanction or unilateral medical 
sanction against a foreign country or foreign entity unless, at least 
60 days before imposing such a sanction, the President submits a report 
to Congress describing the proposed sanction and the reasons for it and 
Congress enacts a joint resolution approving the report. See 22 U.S.C. 
7202. Section 906 of TSRA, however, requires in pertinent part that the 
export of agricultural commodities, medicine, or medical devices to the 
government of a country that has been determined by the Secretary of 
State, pursuant to, inter alia, Section 6(j) of the Export 
Administration Act of 1979 (50 U.S.C. App. 2405(j)), to have repeatedly 
provided support for acts of international terrorism,\1\ or to any 
entity in such a country, shall be made pursuant to one-year licenses 
issued by the United States Government, except that the requirements of 
such one-year licenses shall be no more restrictive than general 
licenses administered by the Department of the Treasury. See 22 U.S.C. 
7205(a)(1). Section 906 also specifies that procedures shall be in 
place to deny licenses for exports of agricultural commodities, 
medicine, or medical devices to any entity within such country 
promoting international terrorism.
---------------------------------------------------------------------------

    \1\ The Secretary of State made such a determination with 
respect to Iran on January 19, 1984.
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    As provided in Section 221 of the USA PATRIOT Act (Pub. L. 107-56) 
(codified at 22 U.S.C. 7210), nothing in TSRA shall limit the 
application or scope of any law, including any Executive order or 
regulation promulgated pursuant to such law, establishing criminal or 
civil penalties for the unlawful export of any agricultural commodity, 
medicine, or medical device to: A Foreign Terrorist Organization; a 
foreign organization, group, or person designated pursuant to Executive 
Orders 12947 or 13224 (sanctions on terrorists and certain supporters 
of terrorism); weapons of mass destruction or missile proliferators; or 
designated narcotics trafficking entities. In addition, TSRA provides 
in Section 904(2) that the restrictions on the imposition of unilateral 
agricultural sanctions or unilateral medical sanctions shall not affect 
any authority or requirement to impose a sanction to the extent such 
sanction applies to any agricultural commodity, medicine, or medical 
device that is controlled on the United States Munitions List (USML), 
controlled on any control list established under the Export 
Administration Act of 1979 or any successor statute, or used to 
facilitate the design, development, or production of chemical or 
biological weapons, missiles, or weapons of mass destruction. See 22 
U.S.C. 7203(2).

Specific TSRA-Related Regulatory Amendments

    On October 22, 2012, OFAC adopted a final rule that, among other 
things, added a general license in Sec.  560.530(a)(3) of the ITSR that 
authorized the exportation or reexportation of medicine and basic 
medical supplies to the Government of Iran, to individuals or entities 
in Iran, or to persons in third countries purchasing specifically for 
resale to any of the foregoing, and the conduct of related transactions 
(see 77 FR 64664). The term ``basic medical supplies'' was defined to 
mean those medical devices, as defined in the ITSR, that were included 
on the List of Basic Medical Supplies made available on OFAC's Web site 
and published in the Federal Register, but did not include replacement 
parts. On April 17, 2014, OFAC adopted a final rule that, among other 
things, updated the definition of ``basic medical supplies'' to exclude 
the word ``basic'' and make related conforming changes, including 
renaming the list on OFAC's Web site as the ``List of Medical 
Supplies'' (see 79 FR 18990). On November 2, 2015 and April 12, 2016, 
OFAC updated the List of Medical Supplies to add additional medical 
devices to the list.
    Also on April 17, 2014, OFAC expanded an existing general license 
in Sec.  560.530(a)(2) that authorized the exportation and 
reexportation of food to authorize the exportation or reexportation of 
the broader category of agricultural commodities, with certain 
specified exceptions, to the Government of Iran, to individuals or 
entities in Iran, or to persons in third countries purchasing 
specifically for resale to any of the foregoing, and the conduct of 
related transactions (see 79 FR 18980). OFAC also added a general 
license in Sec.  560.530(a)(4) authorizing the exportation or 
reexportation of replacement parts for certain medical devices, 
provided that the replacement parts are designated as EAR99 or, in the 
case of replacement parts that are not subject to the EAR, would be 
designated as EAR99 if they were located in the United States, and 
further provided that the replacement parts are limited to a one-for-
one basis of exchange (i.e., only one replacement part can be exported 
or

[[Page 94256]]

reexported to replace a broken or non-operational component).
    Since these amendments, in consultation with the Department of 
State, OFAC has routinely issued specific licenses authorizing the 
exportation or reexportation of certain additional medical devices and 
agricultural commodities to the Government of Iran, to individuals or 
entities in Iran, or to persons in third countries purchasing such 
goods specifically for resale to any of the foregoing. In addition, 
OFAC has continued to receive feedback from the regulated public and 
review its TSRA licensing procedures, particularly the procedures for 
licensing exports and reexports of medical devices and agricultural 
commodities.
    As a result of this review, OFAC today is amending the general 
license relating to authorized sales of certain medical devices in 
Sec.  560.530(a)(3) to expand the scope of medical devices that may be 
exported or reexported to Iran without specific authorization. OFAC is 
also narrowing the list of agricultural commodities excluded from the 
general license relating to authorized sales of agricultural 
commodities in Sec.  560.530(a)(2). In addition, in response to 
feedback from the regulated public regarding improving patient safety, 
OFAC is making the following changes: Expanding existing general 
licenses to authorize the provision of training for the safe and 
effective use or operation of agricultural commodities, medicine, and 
medical devices; expanding an existing general license authorizing the 
exportation or reexportation to Iran of replacement parts to permit 
certain additional replacement parts to be exported or reexported and 
stored for future use; adding a new general license to authorize the 
exportation and reexportation to Iran of software and services related 
to the operation, maintenance, and repair of medical devices previously 
exported pursuant to an OFAC authorization; and adding a new general 
license to authorize the importation into the United States of items 
previously exported pursuant to an OFAC authorization in connection 
with product recalls, adverse events, or other safety concerns, as set 
forth in more detail below.
    Additional medical devices. OFAC is amending the existing general 
license in Sec.  560.530(a)(3) relating to authorized exports or 
reexports of certain medical devices specified on the List of Medical 
Supplies. As amended, the general license has been expanded to 
authorize the exportation or reexportation to Iran of all items meeting 
the definition of the term ``medical device'' as set forth in Sec.  
560.530(e)(3), except for certain medical devices that are explicitly 
excluded from the authorization as specified in a new List of Medical 
Devices Requiring Specific Authorization, which is maintained on OFAC's 
Web site on the Iran Sanctions page, as set forth in revised Sec.  
560.530(a)(3)(ii). The List of Medical Devices Requiring Specific 
Authorization will also be published in the Federal Register, as will 
any changes to this list. The exportation and reexportation of the 
specified excluded medical devices requires specific authorization from 
OFAC, as reflected in amended Sec.  560.530(a)(1)(ii)(C). Medical 
devices other than those specified on the new List of Medical Devices 
Requiring Specific Authorization may be exported or reexported to Iran 
without separate authorization from OFAC. In light of these changes, 
this rule also eliminates reference to the List of Medical Supplies.
    Excluded agricultural commodities. OFAC is also narrowing the list 
of excluded agricultural commodities set forth in Sec.  
560.530(a)(2)(ii). Pursuant to this amendment, the general license in 
Sec.  560.530(a)(2) now authorizes the exportation or reexportation to 
Iran of shrimp and shrimp eggs.
    Training. OFAC is adding a new provision in Sec.  560.530(a)(2)(iv) 
to generally authorize the provision of training necessary and 
ordinarily incident to the safe and effective use of agricultural 
commodities exported or reexported pursuant to the general license in 
Sec.  560.530(a)(2). OFAC similarly is adding a new provision in Sec.  
560.530(a)(3)(v) to authorize the provision of training necessary and 
ordinarily incident to the safe and effective use or operation of 
medicine and medical devices exported or reexported pursuant to the 
general license in Sec.  560.530(a)(3).
    Additional replacement parts. OFAC is amending the existing general 
license in Sec.  560.530(a)(4) authorizing exports or reexports of and 
related transactions for replacement parts for certain medical devices 
that are designated as EAR99 or, in the case of replacement parts that 
are not subject to the EAR, would be designated as EAR99 if they were 
located in the United States, on a one-for-one export or reexport basis 
of exchange. As amended, the general license removes the requirement 
for a one-for-one basis of exchange and allows the exportation and 
reexportation of such replacement parts provided that they are intended 
to replace a broken or nonoperational component of a medical device 
previously exported or reexported to Iran pursuant to an OFAC 
authorization or that the exportation or reexportation of the 
replacement part is ordinarily incident and necessary to the proper 
preventative maintenance of such a medical device, and further provided 
that the number of replacement parts that are exported or reexported to 
and stored in Iran does not exceed the number of corresponding parts in 
use in relevant medical devices in Iran.
    Software and services related to the operation, maintenance, and 
repair of medical devices. OFAC is adding a new general license in 
Sec.  560.530(a)(5) to authorize the exportation or reexportation to 
Iran of software and services related to the operation, maintenance, 
and repair of medical devices that previously were exported or 
reexported to Iran pursuant to an OFAC authorization, provided that, 
among other things, such software is designated as EAR99, or in the 
case of software that is not subject to the EAR, would be designated as 
EAR99 if it were located in the United States. In Sec.  
560.530(a)(5)(i), OFAC is adding an authorization for the exportation 
or reexportation to Iran of software necessary for the installation and 
operation of medical devices authorized for export or reexport by OFAC. 
In Sec.  560.530(a)(5)(ii), OFAC is adding an authorization to allow 
the exportation or reexportation of software updates for those devices. 
In Sec.  560.530(a)(5)(iii), OFAC is adding an authorization for repair 
services for medical devices authorized for export or reexport to Iran 
by OFAC, including inspection, testing, calibration, and diagnostic 
services to ensure patient safety or effective operation of such 
medical devices.
    Importation of items that are broken, defective, or non-operational 
or in connection with product recalls, adverse events, or other safety 
concerns. OFAC also is adding a new general license in Sec.  
560.530(a)(6) to authorize the importation into the United States of 
certain U.S.-origin agricultural commodities, medicine, and medical 
devices that previously were exported or reexported to Iran pursuant to 
the authorization in Sec.  560.530 and that are broken, defective, or 
non-operational or connected to product recalls, adverse events, or 
other safety concerns.
    Conforming change to section headings. In light of the addition of 
several new general licenses in Sec.  560.530, OFAC is also making a 
conforming change to the section heading to reflect the additions. As 
the new general licenses require the payment and financing terms set 
forth in Sec.  560.532, OFAC is making a similar

[[Page 94257]]

conforming change to that section heading to reflect the additions.

Amendment to Definition of ``Goods of Iranian Origin'' and ``Iranian-
Origin Goods''

    To address inquiries from the regulated public, including with 
regard to the status of goods on vessels and aircraft, OFAC also is 
amending the definition in Sec.  560.306 of the terms goods of Iranian 
origin and Iranian-origin goods to clarify that this definition does 
not include certain categories of goods, provided that such goods were 
not grown, produced, manufactured, extracted, or processed in Iran. 
First, the amended definition excludes goods exported or reexported to 
Iran under an authorization issued pursuant to this part (e.g., a 
medical device or a personal communications device exported or 
reexported to Iran pursuant to a general or specific license issued 
pursuant to this part) and that have subsequently been reexported from 
and are located outside of Iran. Second, the amended definition also 
clarifies that it does not include goods transported on a vessel or 
aircraft, as well as the underlying vessel or aircraft itself, that 
passed though Iranian territorial waters or stopped at a port or place 
in Iran en route to a destination outside of Iran and that have not 
otherwise come into contact with Iran. A note clarifies that, pursuant 
to this section, goods that are temporarily offloaded from a vessel in 
Iranian territorial waters or at a port in Iran and reloaded onto the 
same vessel or another vessel in the same location en route to a 
destination outside of Iran and that have not otherwise come into 
contact with Iran are not considered goods of Iranian origin. 
Similarly, goods that are offloaded from an aircraft at a place in Iran 
and reloaded onto the same aircraft or another aircraft in the same 
location en route to a destination outside of Iran and that have not 
otherwise come into contact with Iran are not considered goods of 
Iranian origin. This amended definition is relevant to the prohibitions 
in Sec. Sec.  560.201 and 560.206 of the ITSR, which remain in place; 
it is not relevant to the prohibitions in Sec. Sec.  560.204, 560.205, 
and 560.211 on exports of goods to Iran and on transactions in goods 
involving blocked persons, which also remain in place.

Public Participation

    Because the amendment of the ITSR 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 the ITSR 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 in 31 CFR Part 560

    Administrative practice and procedure, Agricultural commodities, 
Banks, Banking, Iran, Medicine, Medical devices.

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

PART 560--IRANIAN TRANSACTIONS AND SANCTIONS REGULATIONS

0
1. The authority citation for part 560 continues to read as follows:

    Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C. 
2349aa-9; 22 U.S.C. 7201-7211; 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); Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); Pub. L. 
111-195, 124 Stat. 1312 (22 U.S.C. 8501-8551); Pub. L. 112-81, 125 
Stat. 1298 (22 U.S.C. 8513a); Pub. L. 112-158, 126 Stat. 1214 (22 
U.S.C. 8701-8795); 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; E.O. 13599, 77 FR 6659, 3 CFR, 2012 Comp., 
p. 215; E.O. 13628, 77 FR 62139, 3 CFR, 2012 Comp., p. 314.

Subpart C--General Definitions

0
2. Amend Sec.  560.306 by revising paragraph (a), redesignating 
paragraphs (b) through (d) as paragraphs (c) through (e), and adding 
new paragraph (b) to read as follows:


Sec.  560.306  Iranian-origin goods or services; goods or services 
owned or controlled by the Government of Iran.

    (a) Except as provided in paragraph (b) of this section, the terms 
goods of Iranian origin and Iranian-origin goods include:
    (1) Goods grown, produced, manufactured, extracted, or processed in 
Iran; and
    (2) Goods that have entered into Iranian commerce.
    (b) The terms goods of Iranian origin and Iranian-origin goods do 
not include the following categories of goods, provided that such goods 
were not grown, produced, manufactured, extracted, or processed in 
Iran:
    (1) Goods exported or reexported to Iran under an authorization 
issued pursuant to this part and that have subsequently been reexported 
from and are located outside of Iran; or
    (2) Goods transported on a vessel or aircraft, as well as the 
vessel or aircraft itself, that passed though Iranian territorial 
waters or stopped at a port or place in Iran en route to a destination 
outside of Iran and that have not otherwise come into contact with 
Iran.

    Note to paragraph (b)(2) of Sec.  560.306: Pursuant to this 
section, goods that are temporarily offloaded from a vessel in 
Iranian territorial waters or at a port or place in Iran and 
reloaded onto the same vessel or another vessel in the same location 
en route to a destination outside of Iran and that have not 
otherwise come into contact with Iran are not considered goods of 
Iranian origin. Similarly, goods that are offloaded from an aircraft 
at a place in Iran and reloaded onto the same aircraft or another 
aircraft in the same location en route to a destination outside of 
Iran and that have not otherwise come into contact with Iran are not 
considered goods of Iranian origin.

* * * * *

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

0
3. Amend Sec.  560.530 as follows:
0
a. Revise the section heading and paragraphs (a)(1)(ii)(C) and (D) and 
(a)(2)(ii) and (iii);
0
b. Add paragraph (a)(2)(iv);
0
c. Revise paragraphs (a)(3)(i), (ii), and (iv);
0
d. Add paragraph (a)(3)(v);
0
e. Revise paragraphs (a)(4)(i) and (ii);
0
f. Add paragraphs (a)(5) and (6); and
0
g. Revise paragraph (c)(5).
    The revisions and additions read as follows:


Sec.  560.530   Commercial sales, exportation, and reexportation of 
agricultural commodities, medicine, medical devices, and certain 
related software and services.

    (a)(1) * * *
    (ii) * * *
    (C) The excluded medical devices specified in paragraph (a)(3)(ii) 
of this section; and
    (D) Agricultural commodities (as defined in paragraph (e)(1) of 
this

[[Page 94258]]

section), medicine (as defined in paragraph (e)(2) of this section), 
and medical devices (as defined in paragraph (e)(3) of this section) to 
military, intelligence, or law enforcement purchasers or importers.
    (2) * * *
    (ii) Excluded agricultural commodities. Paragraph (a)(2)(i) of this 
section does not authorize the exportation or reexportation of the 
following items: Castor beans, castor bean seeds, certified pathogen-
free eggs (unfertilized or fertilized), dried egg albumin, live animals 
(excluding live cattle, shrimp, and shrimp eggs), embryos (excluding 
cattle embryos), Rosary/Jequirity peas, non-food-grade gelatin powder, 
peptones and their derivatives, super absorbent polymers, western red 
cedar, or all fertilizers.
    (iii) Excluded persons. Paragraph (a)(2)(i) of this section does 
not authorize the exportation or reexportation of agricultural 
commodities to military, intelligence, or law enforcement purchasers or 
importers.
    (iv) General license for related training. The provision by a 
covered person (as defined in paragraph (e)(4) of this section) of 
training necessary and ordinarily incident to the safe and effective 
use of agricultural commodities exported or reexported pursuant to 
paragraph (a)(2) of this section to the Government of Iran, to any 
individual or entity in Iran, or to persons in a third country 
purchasing such goods specifically for resale to any of the foregoing 
is authorized, provided that:
    (A) Unless otherwise authorized by specific license, payment terms 
and financing for sales pursuant to this general license are limited 
to, and consistent with, those authorized by Sec.  560.532;
    (B) Any technology released pursuant to this authorization is 
designated as EAR99; and
    (C) Such training is not provided to any military, intelligence, or 
law enforcement entity, or any official or agent thereof.
* * * * *
    (3)(i) General license for the exportation or reexportation of 
medicine and medical devices. Except as provided in paragraphs 
(a)(3)(ii) through (iv) of this section, the exportation or 
reexportation by a covered person (as defined in paragraph (e)(4) of 
this section) of medicine (as defined in paragraph (e)(2) of this 
section) and medical devices (as defined in paragraph (e)(3) of this 
section) to the Government of Iran, to any individual or entity in 
Iran, or to persons in third countries purchasing specifically for 
resale to any of the foregoing, and the conduct of related 
transactions, including the making of shipping and cargo inspection 
arrangements, obtaining of insurance, arrangement of financing and 
payment, shipping of the goods, receipt of payment, and entry into 
contracts (including executory contracts), are hereby authorized, 
provided that, unless otherwise authorized by specific license, payment 
terms and financing for sales pursuant to this general license are 
limited to, and consistent with, those authorized by Sec.  560.532; and 
further provided that all such exports or reexports are shipped within 
the 12-month period beginning on the date of the signing of the 
contract for export or reexport.
    (ii) Excluded medical devices. Paragraph (a)(3)(i) of this section 
does not authorize the exportation or reexportation of medical devices 
on the List of Medical Devices Requiring Specific Authorization, which 
is maintained on OFAC's Web site (www.treasury.gov/ofac) on the Iran 
Sanctions page.
* * * * *
    (iv) Excluded persons. Paragraph (a)(3)(i) of this section does not 
authorize the exportation or reexportation of medicine or medical 
devices to military, intelligence, or law enforcement purchasers or 
importers.
    (v) General license for related training. The provision by a 
covered person (as defined in paragraph (e)(4) of this section) of 
training necessary and ordinarily incident to the safe and effective 
use of medicine and medical devices exported or reexported pursuant to 
paragraph (a)(3) of this section to the Government of Iran, to any 
individual or entity in Iran, or to persons in a third country 
purchasing such goods specifically for resale to any of the foregoing 
is authorized, provided that:
    (A) Unless otherwise authorized by specific license, payment terms 
and financing for sales pursuant to this general license are limited 
to, and consistent with, those authorized by Sec.  560.532;
    (B) Any technology released pursuant to this authorization is 
designated as EAR99; and
    (C) Such training is not provided to any military, intelligence, or 
law enforcement entity, or any official or agent thereof.
* * * * *
    (4) * * *
    (i) Except as provided in paragraph (a)(4)(ii) of this section, the 
exportation or reexportation by a covered person (as defined in 
paragraph (e)(4) of this section) of replacement parts to the 
Government of Iran, to any individual or entity in Iran, or to persons 
in third countries purchasing specifically for resale to any of the 
foregoing, for medical devices (as defined in paragraph (e)(3) of this 
section) exported or reexported pursuant to paragraph (a)(1) or 
(a)(3)(i) of this section, and the conduct of related transactions, 
including the making of shipping and cargo inspection arrangements, 
obtaining of insurance, arrangement of financing and payment, shipping 
of the goods, receipt of payment, and entry into contracts (including 
executory contracts), are hereby authorized, provided that, unless 
otherwise authorized by specific license, payment terms and financing 
for sales pursuant to this general license are limited to, and 
consistent with, those authorized by Sec.  560.532; and further 
provided that:
    (A) Such replacement parts are designated as EAR99, or, in the case 
of replacement parts that are not subject to the Export Administration 
Regulations, 15 CFR parts 730 through 774 (EAR), would be designated as 
EAR99 if they were located in the United States;
    (B) Such replacement parts are exported or reexported to replace a 
broken or nonoperational component of a medical device that previously 
was exported or reexported pursuant to paragraph (a)(3)(i) of this 
section, or the exportation or reexportation of such replacements parts 
is necessary and ordinarily incident to the proper preventative 
maintenance of such a medical device;
    (C) The number of replacement parts that are exported or reexported 
and stored in Iran does not exceed the number of corresponding 
operational parts currently in use in relevant medical devices in Iran; 
and
    (D) The broken or non-operational replacement parts that are being 
replaced are promptly exported, reexported, or otherwise provided to a 
non-Iranian entity located outside of Iran selected by the supplier of 
the replacement parts.
    (ii) Excluded persons. Paragraph (a)(4)(i) of this section does not 
authorize the exportation or reexportation of replacement parts for 
medical devices to military, intelligence, or law enforcement 
purchasers or importers.
* * * * *
    (5) General license for services and software necessary for the 
operation, maintenance, and repair of medical devices--(i) Operational 
software. Except as provided in paragraph

[[Page 94259]]

(a)(5)(iv) of this section, the exportation or reexportation by a 
covered person (as defined in paragraph (e)(4) of this section) to the 
Government of Iran, to any individual or entity in Iran, or to persons 
in a third country purchasing specifically for resale to any of the 
foregoing, of software necessary for the installation and operation of 
medical devices or replacement parts exported or reexported pursuant to 
this section, and the conduct of related transactions, are hereby 
authorized, provided that such software is designated as EAR99, or in 
the case of software that is not subject to the EAR, would be 
designated as EAR99 if it were located in the United States, and 
further provided that, unless otherwise authorized by specific license, 
payment terms and financing for sales pursuant to this general license 
are limited to, and consistent with, those authorized by Sec.  560.532.
    (ii) Software updates. Except as provided in paragraph (a)(5)(iv) 
of this section, the exportation or reexportation by a covered person 
(as defined in paragraph (e)(4) of this section) to the Government of 
Iran, to any individual or entity in Iran, or to persons in a third 
country purchasing specifically for resale to any of the foregoing, of 
software intended for and limited to the provision of safety and 
service updates and the correction of system or operational errors in 
medical devices, replacement parts, and associated software that 
previously were exported, reexported, or provided pursuant to this 
part, and the conduct of related transactions, are hereby authorized, 
provided that such software is designated as EAR99, or in the case of 
software that is not subject to the EAR, would be designated as EAR99 
if it were located in the United States, and further provided that, 
unless otherwise authorized by specific license, payment terms and 
financing for sales pursuant to this general license are limited to, 
and consistent with, those authorized by Sec.  560.532. Such software 
updates may be exported or reexported only to the same end user to whom 
the original software was exported or reexported.
    (iii) Maintenance and Repair Services. Except as provided in 
paragraph (a)(5)(iv) of this section, the exportation or reexportation 
by a covered person (as defined in paragraph (e)(4) of this section) to 
the Government of Iran, to any individual or entity in Iran, or to 
persons in a third country purchasing specifically for resale to any of 
the foregoing, of services necessary to maintain and repair medical 
devices that previously were exported or reexported pursuant to this 
section, including inspection, testing, calibration, or repair services 
to ensure patient safety or effective operation, and the conduct of 
related transactions, are hereby authorized, provided that such 
services do not substantively alter the functional capacities of the 
medical device as originally authorized for export or reexport, and 
further provided that, unless otherwise authorized by specific license, 
payment terms and financing for sales pursuant to this general license 
are limited to, and consistent with, those authorized by Sec.  560.532.
    (iv) Excluded persons. Paragraphs (a)(5)(i) through (iii) of this 
section do not authorize the exportation or reexportation of software, 
software updates, or maintenance and repair services for medical 
devices to military, intelligence, or law enforcement purchasers or 
importers.
    (6)(i) General license for the importation of certain U.S.-origin 
agricultural commodities, medicine, and medical devices. Except as 
provided in paragraph (a)(6)(ii) of this section, the importation into 
the United States of U.S.-origin agricultural commodities, medicine, 
and medical devices, including parts, components, or accessories 
thereof, that previously were exported or reexported pursuant to the 
authorizations in this section and that are broken, defective, or non-
operational, or are connected to product recalls, adverse events, or 
other safety concerns, and the conduct of related transactions, are 
hereby authorized.
    (ii) Excluded persons. Paragraph (a)(6)(i) of this section does not 
authorize the importation into the United States of U.S.-origin 
agricultural commodities, medicine, and medical devices that previously 
were exported or reexported pursuant to the authorizations in this 
section as broken, defective, or non-operational, or in connection with 
product recalls, adverse events, or other safety concerns, from 
military, intelligence, or law enforcement purchasers or importers.
* * * * *
    (c) * * *
    (5) For items subject to the EAR, an Official Commodity 
Classification of EAR99 issued by the Department of Commerce's Bureau 
of Industry and Security (BIS), certifying that the product is 
designated as EAR99, is required to be submitted to OFAC with the 
request for a license authorizing the exportation or reexportation of 
all fertilizers, live horses, western red cedar, or the excluded 
medical devices specified in paragraph (a)(3)(ii) of this section. See 
15 CFR 748.3 for instructions for obtaining an Official Commodity 
Classification of EAR99 from BIS.
* * * * *

0
4. Amend Sec.  560.532 by revising the section heading to read as 
follows:


Sec.  560.532   Payment for and financing of exports and reexports of 
agricultural commodities, medicine, and medical devices, and certain 
related software and services.

* * * * *

John E. Smith,
Acting Director, Office of Foreign Assets Control.
[FR Doc. 2016-30968 Filed 12-22-16; 8:45 am]
 BILLING CODE 4810-AL-P