Sudanese Sanctions Regulations; Libyan Sanctions Regulations; Iranian Transactions Regulations: Licensing of Commercial Sales, Exportation and Reexportation of Agricultural Commodities and Products, Medicine, and Medical Equipment; Iranian Accounts on the Books of U.S. Depository Institutions; Informational Materials; Visas

DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 538, 550 and 560

Sudanese Sanctions Regulations; Libyan Sanctions Regulations;

Iranian Transactions Regulations: Licensing of Commercial Sales,

Exportation and Reexportation of Agricultural Commodities and Products,

Medicine, and Medical Equipment; Iranian Accounts on the Books of U.S.

Depository Institutions; Informational Materials; Visas

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule; amendments.

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SUMMARY: The Treasury Department is amending provisions relating to the

financing of agricultural and medical sales appearing in the Sudanese

Sanctions Regulations, the Libyan Sanctions Regulations, and the

Iranian Transactions Regulations. While general licenses continue to

prohibit financing of sales by entities of the Governments of Sudan,

Libya or Iran, the amendments remove language prohibiting the issuance

of specific licenses authorizing financing by entities of those

governments. New appendices are added to identify approved eligible

procurement bodies of the Governments of Libya and Iran. Technical

changes are made in all three sets of regulations with respect to

licensing requirements of other Federal agencies. Technical changes are

made in the Iranian Transactions Regulations concerning debits and

credits to Iranian accounts on the books of U.S. depository

institutions and concerning eligible purchasers. Finally, technical

changes are made to the Iranian Transactions Regulations to revise

language on informational materials and on ``H'' (temporary worker)

visas.

EFFECTIVE DATE: October 27, 1999.

FOR FURTHER INFORMATION CONTACT: Steven I. Pinter, Chief of Licensing

(tel.: 202/622-2480) or William B. Hoffman, Chief Counsel (tel.: 202/

622-2410), Office of Foreign Assets Control, U.S. Treasury Department,

Washington, DC 20220.

SUPPLEMENTARY INFORMATION:

Electronic and Facsimile 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 (Home

Page), Telnet, or FTP protocol is: fedbbs.access.gpo.gov. This document

and additional information concerning the programs of the Office of

Foreign Assets Control are available for downloading from the Office's

Internet Home Page: http://www.treas.gov/ofac, or in fax form through

the Office's 24-hour fax-on-demand service: call 202/622-0077 using a

fax machine, fax modem, or (within the United States) a touch-tone

telephone.

Background

On April 28, 1999, President Clinton announced that existing

unilateral economic sanctions programs would be amended to modify

licensing policies to allow specific licensing of the commercial sale

of agricultural commodities and products, medicine and medical

equipment where the United States Government has the discretion to

issue such licenses. On August 2, 1999, the Treasury Department's

Office of Foreign Assets Control (``OFAC'') published in the Federal

Register (64 FR 41784) amendments to the Sudanese Sanctions

Regulations, 31 CFR part 538 (the ``SSR''), the Libyan Sanctions

Regulations, 31 CFR part 550 (the ``LSR''), and the Iranian

Transactions Regulations, 31 CFR part 560 (the ``ITR'') (collectively,

the ``Regulations''), to make available both general and specific

licenses governing commercial sales of such goods.

The amendments permitted sellers, pursuant to an OFAC general

license, to negotiate and sign executory contracts for commercial sales

and exportation or reexportation of these agricultural or medical items

to the target countries or their governments. Performance under such

executory contracts was to be made contingent upon receipt of an OFAC

specific license. Regulations, Secs. 538.523, 550.569 and 560.530.

Persons wishing to make commercial sales of certain bulk agricultural

commodities to the target countries or their governments could apply

for specific licenses to permit future entry into and performance of

contracts for such sales. Regulations, Sec. 538.524 and SSR, appendix

A; Sec. 550.570 and LSR, appendix A; Sec. 560.531 and ITR, appendix B.

The Regulations made all sales to the target countries subject to a

series of requirements intended to ensure that such sales did not

improperly benefit the target countries' governments.

With respect to payment for and financing of sales of agricultural

and medical items, the Regulations provided by general license that

parties were authorized, among other things, to utilize financing by

third-country financial institutions that were not U.S. persons or

target-country government banks. U.S. financial institutions were

authorized by general license to advise or confirm such financing by

third-country financial institutions, but specific licenses were

required for alternate payment terms. Regulations, Secs. 538.525,

550.571, and 560.532.

OFAC is amending provisions relating to payment for and financing

of sales of agricultural and medical items. The general licenses in

Secs. 538.525(a), 550.571(a), and 560.532(a) of the Regulations

continue to prohibit financing of sales by entities of the Governments

of Sudan, Libya or Iran. Sections 538.525(b), 550.571(b), and

560.532(b), which provide for the specific licensing of alternative

financing terms, are amended to remove language prohibiting the

issuance of specific licenses authorizing financing by entities of

those governments.

Technical revisions are made to language on licensing requirements

of other Federal agencies in Secs. 538.523(b)(4), 538.524(b)(4), and

538.526(b)(3) of the SSR; 550.569(b)(4), 550.570(b)(4) and

550.572(b)(3) of the LSR; and 560.530(b)(4), 560.531(b)(4), and

560.533(b)(3) of the ITR. Approved eligible procurement bodies of the

Governments of Libya and Iran are identified in new appendices to the

LSR and ITR.

Sections 550.569(a) of the LSR and 560.530(a) of the ITR are

revised to conform the language on executory contracts to that in

Sec. 538.523(a) of the SSR. Technical changes are made to

Secs. 560.532(c) and 560.533(c) of the ITR to clarify that the

prohibition on debits and credits to Iranian accounts refers only to

accounts of persons located in Iran or of the Government of Iran

maintained on the books of a U.S. depository institution.

OFAC is making technical changes to the ITR unrelated to the August

1999 amendments. Section 560.210(c)(2), with respect to informational

materials, is amended to remove a reference to royalties. Section

560.505(c) is amended to revise the reference from ``H-1b (temporary

worker)'' to ``H (temporary worker).''

Paperwork Reduction Act

As authorized in the APA, the Regulations are being issued without

prior notice and public comment procedure. The collections of

[[Page 58790]]

information related to the Regulations are contained in 31 CFR part 501

(the ``Reporting and Procedures 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

(``OMB'') 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.

Because the Regulations involve a foreign affairs function,

Executive Order 12866 and the provisions of the APA 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.

List of Subjects

31 CFR Part 538

Administrative practice and procedure, Agricultural commodities,

Banks, banking, Blocking of assets, Drugs, Exports, Foreign trade,

Humanitarian aid, Imports, Medical devices, Penalties, Reporting and

recordkeeping requirements, Specially designated nationals, Sudan,

Terrorism, Transportation.

31 CFR Part 550

Administrative practice and procedure, Agricultural commodities,

Banks, banking, Blocking of assets, Drugs, Exports, Foreign investment,

Foreign trade, Government of Libya, Imports, Libya, Loans, Medical

devices, Penalties, Reporting and recordkeeping requirements,

Securities, Services, Specially designated nationals, Terrorism, Travel

restrictions.

31 CFR Part 560

Administrative practice and procedure, Agricultural commodities,

Banks, banking, Drugs, Exports, Foreign trade, Imports, Information,

Investments, Iran, Loans, Medical devices, Penalties, Reporting and

recordkeeping requirements, Services, Specially designated nationals,

Terrorism, Transportation.

For the reasons set forth in the preamble, 31 CFR parts 538, 550

and 560 are amended as set forth below:

PART 538--SUDANESE SANCTIONS REGULATIONS

1. The authority citation for part 538 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; E.O. 13067, 62 FR 59989, 3 CFR, 1997 Comp., p. 230.

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

Policy

2. In Sec. 538.523, revise the section heading and the first

sentence of paragraph (b)(4) to read as follows:

Sec. 538.523 Commercial sales, exportation and reexportation of

agricultural commodities and products, medicine, and medical equipment.

* * * * *

(b) * * *

(4) Make any performance involving the exportation or reexportation

of any goods, technology or services (including technical data,

software, or information) that are subject to license application

requirements of another Federal agency contingent upon the prior

authorization of that agency. * * *

* * * * *

3. In Sec. 538.524, revise the section heading and the first

sentence of paragraph (b)(4) to read as follows:

Sec. 538.524 Commercial sales, exportation and reexportation of bulk

agricultural commodities.

* * * * *

(b) * * *

(4) Make any performance involving the exportation or reexportation

of any goods, technology or services (including technical data,

software, or information) that are subject to license application

requirements of another Federal agency contingent upon the prior

authorization of that agency. * * *

* * * * *

4. In Sec. 538.525, revise the first sentence of paragraph (b) to

read as follows:

Sec. 538.525 Payment for and financing of commercial sales of

agricultural commodities and products, medicine, and medical equipment.

* * * * *

(b) Specific licenses for alternate payment terms. Specific

licenses may be issued on a case-by-case basis for payment terms and

trade financing not authorized by the general license in paragraph (a)

of this section for sales pursuant to Secs. 538.523 and 538.524. * * *

* * * * * *

5. In Sec. 538.526, revise the first sentence of paragraph (b)(3)

to read as follows:

Sec. 538.526 Brokering sales of bulk agricultural commodities.

* * * * *

(b) * * *

(3) Make any performance involving the exportation or reexportation

of any goods, technology or services (including technical data,

software, or information) that are subject to license application

requirements of another Federal agency contingent upon the prior

authorization of that agency. * * *

* * * * *

PART 550--LIBYAN SANCTIONS REGULATIONS

1. The authority citation for part 550 continues to read as

follows:

Authority: 3 U.S.C. 301; 18 U.S.C. 2332d; 22 U.S.C. 287c,

2349aa-8 and 2349aa-9; 31 U.S.C. 321(b); 49 U.S.C. 40106(b); 50

U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28

U.S.C. 2461 note); E.O. 12543, 51 FR 875, 3 CFR, 1986 Comp., p. 181;

E.O. 12544, 51 FR 1235, 3 CFR, 1986 Comp., p. 183; E.O. 12801, 57 FR

14319, 3 CFR, 1992 Comp., p. 294.

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

Policy

2. In Sec. 550.569, revise the section heading, paragraph (a)

introductory text, and the first sentence of paragraph (b)(4) to read

as follows:

Sec. 550.569 Commercial sales, exportation and reexportation of

agricultural commodities and products, medicine, and medical equipment.

(a) General license for executory contracts. Except as provided in

paragraph (c) of this section, entry into executory contracts is

authorized for the following transactions with individuals in Libya

acting for their own account, nongovernmental entities in Libya or

procurement bodies of the Government of Libya identified by the Office

of Foreign Assets Control as not being affiliated with the coercive

organs of the state, or with persons in third countries purchasing

specifically for resale to any of the foregoing, provided that

performance of the executory contracts (including any preparatory

activities, payments or deposits related to such executory contracts)

is contingent upon the prior authorization of the Office of Foreign

Assets Control in or pursuant to this part:

* * * * *

(b) * * *

(4) Make any performance involving the exportation or reexportation

of any goods, technology or services (including technical data,

software, or information) that are subject to license application

requirements of another Federal agency contingent upon the prior

authorization of that agency. * * *

* * * * *

[[Page 58791]]

3. In Sec. 550.570, revise the section heading and the first

sentence of paragraph (b)(4) to read as follows:

Sec. 550.570 Commercial sales, exportation and reexportation of bulk

agricultural commodities.

* * * * *

(b) * * *

(4) Make any performance involving the exportation or reexportation

of any goods, technology or services (including technical data,

software, or information) that are subject to license application

requirements of another Federal agency contingent upon the prior

authorization of that agency. * * *

* * * * *

4. In Sec. 550.571, revise the first sentence of paragraph (b) to

read as follows:

Sec. 550.571 Payment for and financing of commercial sales of

agricultural commodities and products, medicine, and medical equipment.

* * * * *

(b) Specific licenses for alternate payment terms. Specific

licenses may be issued on a case-by-case basis for payment terms and

trade financing not authorized by the general license in paragraph (a)

of this section for sales pursuant to Secs. 550.569 and 550.570. * * *

* * * * *

5. In Sec. 550.572, revise the first sentence of paragraph (b)(3)

to read as follows:

Sec. 550.572 Brokering sales of bulk agricultural commodities.

* * * * *

(b) * * *

(3) Make any performance involving the exportation or reexportation

of any goods, technology or services (including technical data,

software, or information) that are subject to license application

requirements of another Federal agency contingent upon the prior

authorization of that agency. * * *

* * * * *

6. Appendix B is added to part 550 to read as follows:

Appendix B to Part 550--Eligible Procurement Bodies

This Appendix B sets forth eligible procurement bodies of the

Government of Libya identified by the Office of Foreign Assets

Control as not being affiliated with the coercive organs of the

state. See Sec. 550.570(e).

National Supply Corporation (a.k.a. National Supplies

Corporation; a.k.a. NASCO)

PART 560--IRANIAN TRANSACTIONS REGULATIONS

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

follows:

Authority: 3 U.S.C. 301; 18 U.S.C. 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); 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 B--Prohibitions

2. In Sec. 560.210, revise the last sentence of paragraph (c)(2) to

read as follows:

Sec. 560.210 Exempt transactions.

* * * * *

(c) * * *

(2) * * * Transactions that are prohibited notwithstanding this

section include, but are not limited to, payment of advances for

information and informational materials not yet created and completed

(with the exception of prepaid subscriptions for widely circulated

magazines and other periodical publications), and provision of services

to market, produce or co-produce, create or assist in the creation of

information and informational materials.

* * * * *

Subpart E--Licenses, Authorizations and Statements of Licensing

Policy

Sec. 560.505 [Amended]

3. In Sec. 560.505, amend paragraph (c) by revising the phrase ``H-

1b (temporary worker)'' to read ``H (temporary worker)''.

4. In Sec. 560.530, revise the section heading, paragraph (a)

introductory text, and the first sentence of paragraph (b)(4) to read

as follows:

Sec. 560.530 Commercial sales, exportation and reexportation of

agricultural commodities and products, medicine, and medical equipment.

(a) General license for executory contracts. Except as provided in

paragraph (c) of this section, entry into executory contracts is

authorized for the following transactions with individuals in Iran

acting for their own account, nongovernmental entities in Iran or

procurement bodies of the Government of Iran identified by the Office

of Foreign Assets Control as not being affiliated with the coercive

organs of the state, or with persons in third countries purchasing

specifically for resale to any of the foregoing, provided that

performance of the executory contracts (including any preparatory

activities, payments or deposits related to such executory contracts)

is contingent upon the prior authorization of the Office of Foreign

Assets Control in or pursuant to this part:

* * * * *

(b) * * *

(4) Make any performance involving the exportation or reexportation

of any goods, technology or services (including technical data,

software, or information) that are subject to license application

requirements of another Federal agency contingent upon the prior

authorization of that agency. * * *

* * * * *

5. In Sec. 560.531, revise the section heading and the first

sentence of paragraph (b)(4) to read as follows:

Sec. 560.531 Commercial sales, exportation and reexportation of

certain bulk agricultural commodities.

* * * * *

(b) * * *

(4) Make any performance involving the exportation or reexportation

of any goods, technology or services (including technical data,

software, or information) that are subject to license application

requirements of another Federal agency contingent upon the prior

authorization of that agency. * * *

* * * * *

6. In Sec. 560.532, revise the first sentence in paragraph (b) and

paragraph (c) to read as follows:

Sec. 560.532 Payment for and financing of commercial sales of

agricultural commodities and products, medicine, and medical equipment.

* * * * *

(b) Specific licenses for alternate payment terms. Specific

licenses may be issued on a case-by-case basis for payment terms and

trade financing not authorized by the general license in paragraph (a)

of this section for sales pursuant to Secs. 560.530 and 560.531. * * *

(c) No debits or credits to Iranian accounts on the books of U.S.

depository institutions. Nothing in this section authorizes payment

terms or trade financing involving a debit or credit to an account of a

person located in Iran or of the Government of Iran maintained on the

books of a U.S. depository institution.

* * * * *

7. In Sec. 560.533, revise the first sentence of paragraph (b)(3)

and paragraph (c) to read as follows:

Sec. 560.533 Brokering sales of bulk agricultural commodities.

* * * * *

[[Page 58792]]

(b) * * *

(3) Make any performance involving the exportation or reexportation

of any goods, technology or services (including technical data,

software, or information) that are subject to license application

requirements of another Federal agency contingent upon the prior

authorization of that agency. * * *

(c) No debits or credits to Iranian accounts on the books of U.S.

depository institutions. Payment for any brokerage fee earned pursuant

to this section may not involve a debit or credit to an account of a

person located in Iran or of the Government of Iran maintained on the

books of a U.S. depository institution.

* * * * *

8. Appendix C is added to part 560 to read as follows:

Appendix C to Part 560--Eligible Procurement Bodies

This Appendix C sets forth eligible procurement bodies of the

Government of Iran identified by the Office of Foreign Assets

Control as not being affiliated with the coercive organs of the

state. See Sec. 560.531(e).

Government Trading Corporation (a.k.a. GTC).

State Livestock and Logistics Co. (a.k.a. State Livestock

Affairs Logistics; a.k.a. SLAL).

Dated: October 27, 1999.

R. Richard Newcomb,

Director, Office of Foreign Assets Control.

Approved: October 27, 1999.

Elisabeth A. Bresee,

Assistant Secretary (Enforcement), Department of the Treasury.

[FR Doc. 99-28470 Filed 10-27-99; 2:25 pm]

BILLING CODE 4810-25-P