Exports to Iran; Imposition of Economic Sanctions

SUMMARY: The Bureau of Export Administration (BXA) is amending the

Export Administration Regulations (EAR) to reflect the imposition of

additional economic sanctions on Iran as a result of the issuance of

Executive Order 12959 on May 6, 1995. The Executive Order delegates

implementation responsibility to the Department of the Treasury's

Office of Foreign Assets Control (OFAC), including authority for

exports and certain reexports.

EFFECTIVE DATE: March 5, 1996.

FOR FURTHER INFORMATION CONTACT: Hillary Hess, Office of Exporter

Services, Bureau of Export Administration, Telephone: (202) 482-2440.

SUPPLEMENTARY INFORMATION:

Background

On May 6, 1995, President Clinton issued Executive Order 12959 (60

FR 24757), imposing significant new economic sanctions on Iran. The

effective date of the Executive Order was May 7, 1995 at 12:01 EDT,

except that an effective date of June 6, 1995, 12:01 a.m. EDT applied

for exports and reexports under contracts that were entered into prior

to May 7, 1995, and that were authorized pursuant to regulations in

force immediately prior to May 6, 1995. The Department of the

Treasury's Office of Foreign Assets Control (OFAC) has responsibility

for implementing the Executive Order, including issuing licenses for

exports and certain reexports to Iran. (See OFAC's Iranian Transactions

Regulations, 31 CFR part 560.) If OFAC authorizes an export or

reexport, no separate authorization from BXA is necessary. This rule

makes clear that enforcement action may be taken under the EAR with

respect to an export or reexport prohibited both by the EAR and by the

Executive Order and not authorized by OFAC.

Although the Export Administration Act (EAA) expired on August 20,

1994, the President invoked the International Emergency Economic Powers

Act and continued in effect, to the extent permitted by law, the

provisions of the EAA and the EAR in Executive Order 12924 of August

19, 1994, as extended by the President's notice of August 15, 1995 (60

Fed. Reg. 42767).

Rulemaking Requirements

1. This final rule has been determined to be not significant for

purposes of E. O. 12866.

2. This rule involves collections of information subject to the

Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). These

collections have been approved by the Office of Management and Budget

under control numbers 0694-0005, 0694-0007, and 0694-0010.

Notwithstanding any other provision of law, no person is required to

respond to nor shall a person be subject to a penalty for failure to

comply with a collection of information subject to the requirements of

the Paperwork Reduction Act unless that collection of information

displays a currently valid OMB Control Number.

3. This rule does not contain policies with Federalism implications

sufficient to warrant preparation of a Federalism assessment under

Executive Order 12612.

4. The provisions of the Administrative Procedure Act requiring

notice of proposed rulemaking, the opportunity for public

participation, and a delay in effective date, are inapplicable because

this regulation involves a military and foreign affairs function of the

United States (see 5 U.S.C. 553(a)(1)). Further, no other law requires

that a notice of proposed rulemaking and an opportunity for public

comment be given for this rule.

Therefore, this regulation is issued in final form. Although there

is no formal comment period, public comments on this regulation are

welcome on a continuing basis. Comments should be submitted to Hillary

Hess, Office of Exporter Services, Regulatory Policy Division, Bureau

of Export Administration, Department of Commerce, P.O. Box 273,

Washington, DC 20044.

5. Because a notice of proposed rulemaking and an opportunity for

public comment are not required to be given for this rule under 5

U.S.C. 553(a)(1) or by any other law, under sections 3(a) and 4 (a) of

the Regulatory Flexibility Act (5 U.S.C. 603(a) and 604(a)) no initial

or final Regulatory Flexibility Analysis has to be or will be prepared.

List of Subjects in 15 CFR Part 785

Exports.

Accordingly, Part 785 of the Export Administration Regulations (15

CFR Parts 730-799) is amended as follows:

1. The authority citation for 15 CFR Part 785 continues to read as

follows:

Authority: Pub. L. 90-351, 82 Stat. 197 (18 U.S.C. 2510 et

seq.), as amended; Pub. L. 95-223, 91 Stat. 1626 (50 U.S.C. 1701 et

seq.); Pub. L. 95-242, 92 Stat. 120 (22 U.S.C. 3201 et seq. and 42

U.S.C. 2139a); Pub. L. 96-72, 93 Stat. 503 (50 U.S.C. App. 2401 et

seq.), as amended; Pub. L. 102-484, 106 Stat. 2575 (22 U.S.C. 6004);

E.O. 12002 of July 7, 1977 (42 FR 35623, July 7, 1977), as amended;

E.O. 12058 of May 11, 1978 (43 FR 20947, May 16, 1978); E.O. 12214

of May 2, 1980 (45 FR 29783, May 6, 1980); E.O. 12730 of September

30, 1990 (55 FR 40373, October 2, 1990), as continued by Notice of

September 25, 1992 (57 FR 44649, September 28, 1992); E.O. 12924 of

August 19, 1994 (59 FR 43437, August 23, 1994); E.O. 12938 of

November 14, 1994 (59 FR 59099 of November 16, 1994); E.O. 12957 of

March 15, 1995 (60 FR 14615 of March 17, 1995); E.O. 12959 of May 6,

1995 (60 FR 24757 of May 9, 1995); and Notice of August 15, 1995, 60

FR 42767.

PART 785--[AMENDED]

2. Section 785.4 is amended by adding paragraph (b) to read as

follows:

Sec. 785.4 Country Groups T & V.

* * * * *

(b) Iran.

Note: The Treasury Department's Office of Foreign Assets Control

(OFAC) administers a comprehensive trade and investment embargo

against Iran under the authority of the International Emergency

Economic

[[Page 8472]]

Powers Act of 1977, as amended, section 505 of the International

Security and Development Cooperation Act of 1985, and Executive

Orders 12957 and 12959 of March 15, 1995 and May 6, 1995,

respectively. This embargo includes prohibitions on export and

certain reexport transactions involving Iran, including transactions

dealing with items subject to the EAR. (See OFAC's Iranian

Transactions Regulations, 31 CFR part 560.)

(1) The controls on exports and reexports to Iran, as specified in

the CCL and in paragraph (d) of this section, continue to apply. To

avoid duplication, exporters or reexporters are not required to seek

separate authorization from BXA for an export or reexport subject both

to the EAR and to OFAC's Iranian Transactions Regulations. Therefore,

if OFAC authorizes an export or reexport, no separate authorization

from BXA is necessary.

(2) Section 3 of the Executive Order directs all agencies of the

United States Government to take all appropriate measures within their

jurisdiction to carry out the order. Accordingly, no validated license,

general license or other authorization constitutes authority for any

export or reexport prohibited by the Iranian Transactions Regulations

unless authorized by OFAC, and no person may export or reexport items

subject to both the EAR and OFAC's Iranian Transactions Regulations

without prior OFAC authorization. Any export or reexport prohibited

both by the EAR and by the Executive Order and not authorized by OFAC

is a violation of the EAR.

(3) Exporters should consult with OFAC (Office of Foreign Assets

Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue,

N.W., Annex, 2nd Floor, Washington, D.C. 20220. Telephone (202) 622-

2480) for authorization for:

(i) Exports from the United States involving Iran;

(ii) Exports or reexports to Iran from a third country, when the

exporter or reexporter is a United States person (as defined in OFAC's

Iranian Transactions Regulations, 31 CFR part 560); or

(iii) Reexports to Iran of U.S.-origin items that were subject to

any export license application requirements prior to Executive Order

12959 of May 6, 1995.

(Office of Foreign Assets Control, U.S. Department of the Treasury,

1500 Pennsylvania Avenue, N.W., Annex, 2nd Floor, Washington, D.C.

20220. Telephone (202) 622-2480.)

* * * * *

Dated: February 29, 1996.

Sue E. Eckert,

Assistant Secretary for Export Administration.

[FR Doc. 96-5103 Filed 3-4-96; 8:45 am]

BILLING CODE 3510-DT-P