[Federal Register: July 12, 2001 (Volume 66,
Number 134)]
[Rules and
Regulations]
[Page 36683-36694]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR parts 515, 538, 550, and 560
Exports of Agricultural Products, Medicines, and Medical Devices to Cuba, Sudan,
Libya, and Iran; Cuba Travel-Related Transactions
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Interim rule with request for comments; amendments.
SUMMARY: The Office of Foreign Assets Control of the U.S. Department of the Treasury is issuing and amending regulations to implement the Trade Sanctions Reform and Export Enhancement Act of 2000, Title IX of Public Law 106-387 (October 28, 2000). These regulations amend the licensing provisions of the Cuban Assets Control Regulations, the Sudanese Sanctions Regulations, the Libyan Sanctions Regulations, and the Iranian Transactions Regulations, 31 CFR parts 515, 538, 550, and 560, respectively, as they relate to the exportation and reexportation from the U.S. or by U.S. persons of agricultural commodities, medicine, or medical devices to Cuba, Sudan, Libya, and Iran. These regulations also amend the Cuban Assets Control Regulations with respect to Cuba travel-related transactions.
DATES: Effective Date: July 26, 2001.
Comments: Written comments must be received
no later than September 10, 2001. Comments should be sent to David W. Mills,
Chief, Policy Planning and Program Management Division, Room 2176 Main Treasury
Annex, 1500 Pennsylvania Ave. N.W., Washington, DC 20220 or via OFAC's website (http://www.treas.gov/ofac).
FOR FURTHER INFORMATION CONTACT: Dennis P. Wood, Chief of Compliance
Programs, tel.: 202/622-2490, Steven I. Pinter, Acting Chief of Licensing, tel.:
202/622-2480, or Barbara C. Hammerle, Acting Chief Counsel, tel.: 202/622-2410,
Office of Foreign Assets Control, Department of the Treasury, Washington, DC
20220.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document is available as an electronic file on The
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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
The Trade Sanctions Reform and Export Enhancement Act of
2000, Title IX of Public Law 106-387 (October 28, 2000) (the ``TSRA''), provides
that the President shall terminate any unilateral agricultural sanction or
unilateral medical sanction in effect as of the date of enactment of the TSRA.
The TSRA does not direct the termination of any unilateral agricultural sanction
or unilateral medical sanction that prohibits, restricts, or conditions the
provision or use of any agricultural commodity, medicine, or medical device that
is controlled on the United States Munitions List, controlled on any control
list established by the Export Administration Act of 1979 or any successor
statute, or used to facilitate the development or production of chemical or
biological weapons or weapons of mass destruction. Exporters should consult the
Department of Commerce, Bureau of Export Administration (``BXA''), to determine
whether a particular item is controlled under specific Export Commodity Control
Number (``ECCN'') on the Commerce Control List in the Export Administration
Regulations, 15 CFR part 774, supplement no. 1 (the ``CCL'').
Section 906 of the TSRA further requires that the export of
agricultural commodities, medicine, or medical devices to Cuba or to the
government of a country that has been determined by the Secretary of State,
under Section 620A of the Foreign Assistance Act of 1961 (22 U.S.C. 2371),
section 6(j)(1) of the Export Administration Act of 1979 (50 U.S.C. app.
2405(j)(1)), or section 40(d) of the Arms Export Control Act (22 U.S.C.
2780(d)), to have provided support repeatedly for acts of international
terrorism, or to any other entity in such a country, shall only be made pursuant
to one-year licenses issued by the United States Government. The governments of
Cuba, Sudan, Libya, and Iran have been designated as supporting international
terrorism pursuant to section 6(j) of the Export Administration Act of 1979.
These regulations amend the Cuban Assets Control Regulations,
31 CFR part 515 (``CACR''), 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''), to
implement the TSRA as required. The Department of Treasury's Office of Foreign
Assets Control (``OFAC'') has endeavored to implement the TSRA in a way that is
consistent with both the statutory language and the intent of its drafters and
in a manner that also provides exporters with an efficient and expedited process
for engaging in authorized exports of agricultural commodities, medicine, and
medical devices. Following this approach, OFAC is applying the licensing
procedures required by section 906 of the TSRA to all exports and reexports of
agricultural commodities, medicine, and medical devices to Sudan, Libya, and
Iran that are within the current scope of OFAC's licensing jurisdiction.
Similarly, OFAC is applying this licensing procedure to cover exports to the
governments of Sudan, Libya, and Iran, any entities in these countries, and
individuals in these countries, as well as to persons in third countries
purchasing specifically for resale to any of the foregoing.
Cuban Assets Control Regulations. This rule implements the
TSRA with respect to the Cuban Assets Control Regulations, 31 CFR part 515 (the
``CACR''), in the following ways:
With respect to exports from the United States to Cuba, Sec.
515.533 of the CACR already provides a general license for transactions incident
to exportations that are licensed or otherwise authorized by the Department of
Commerce. As was the case prior to enactment of the TSRA, exporters seeking to
export items from the United States to Cuba should seek authorization from the
Commerce Department, which is also amending its regulations to implement the
TSRA.
OFAC is amending Sec. 515.533 to clarify that reexports of
U.S.-origin items by persons subject to U.S. jurisdiction are also covered by
this general license. Thus, overseas persons subject to U.S. jurisdiction that
wish to reexport U.S.-origin items to Cuba are authorized to do so provided the
reexport is licensed or otherwise authorized by the Commerce Department.
OFAC is also amending Sec. 515.533 to clarify the general
restrictions on financing sales of licensed items to Cuba and to implement the
special financing restrictions with respect to licensed agricultural sales to
Cuba contained in Section 908(b) of the TSRA. The new language slightly expands
the payment and financing terms that may be used in agricultural sales to Cuba
from those that previously existed.
Although Sec. 515.207 of the CACR prohibits the entry into
U.S. ports by vessels engaged in Cuban commerce, Sec. 515.550 already provides a
waiver for those vessels engaged in trade with Cuba that is licensed or
otherwise exempt. Thus, vessels carrying exports or reexports of agricultural
commodities, medicine, or medical supplies that have been licensed or otherwise
authorized by the Commerce Department will be permitted to enter U.S. ports,
provided they have not carried unlicensed and non-exempt cargo or persons to or
from Cuba and provided they are not currently carrying unauthorized goods in
which Cuba or a Cuban national has an interest. A short note referencing this
waiver is added to the end of Sec. 515.207, which contains the prohibition on
vessel entry.
Section 1706(a)(1) of the Cuban Democracy Act of 1992, 106
Stat. 2575, prohibits the issuance of licenses authorizing U.S.-owned or
controlled foreign firms to engage in transactions related to the xportation to
Cuba of commodities produced outside of the United States. OFAC is amending the
Note to Sec. 515.559 to make clear that U.S.-owned or controlled foreign firms
may, however, be authorized to engage in the reexport of U.S.-origin items to
Cuba pursuant to Sec. 515.533. Otherwise, the provisions of Sec. 515.559 remain
unchanged.
With respect to section 910(a) of the TSRA, which authorizes
Cuba travel-related transactions regarding the commercial sale of agricultural
commodities, Sec. 515.533(e) of the CACR already states that specific licenses
may be issued on a case-by-case basis authorizing Cuba travel-related
transactions directly incident to marketing, sales negotiation, accompanied
delivery, and servicing of exports and reexports that appear consistent with the
export and reexport licensing policy of the Commerce Department. A prospective
exporter does not need to obtain a license from the Commerce Department before
applying for such a travel license provided that the proposed exports or
reexports clearly fit within current Commerce licensing policy. Section
515.560(b) of the CACR is amended to implement section 910(b) of the TSRA.
Sudanese Sanctions Regulations (``SSR''), Libyan Sanctions
Regulations (``LSR''), Iranian Transaction Regulations (``ITR''). With respect
to the SSR, LSR, and ITR, this rule is intended to establish an expedited
process for the issuance of the one-year license required by section 906 of the
TSRA. This rule also is intended to clarify the agricultural commodities,
medical devices, and medicines covered by the new licensing provisions in these
regulations. The Department of Treasury's Office of Foreign Assets Control (``OFAC'')
will put in place expedited procedures to respond to requests for licenses to
export agricultural commodities, medicine, and medical devices to Sudan, Libya,
and Iran. Exporters of all fertilizers, live horses, western red cedar, and
medical devices require commodity classification from the Department of
Commerce, Bureau of Export Administration (``BXA'') certifying that the product
is EAR 99 included with the exporter's license request to OFAC. See, 15 CFR
748.3 for instructions for submitting commodity classifications. However, BXA
will publish on its website at www.bxa.doc.gov/Regulations/Trade
Sanctions ReformExport EnhancementAct.html a list of medical supplies, such as
syringes, bandages, gauze and similar items, that do not require BXA commodity
classification prior to submitting a license application to OFAC. When
submitting a license request to OFAC under its expedited review procedures,
exporters must indicate to OFAC that their medical supply is on the BXA medical
supply list on BXA's website. Otherwise, exporters must provide OFAC with a copy
of the BXA commodity classification for those medical devices that BXA has
classified as EAR99. BXA's website will also include a list of medicines that
are not EAR 99 and, therefore, not eligible for exportation under these rules.
The expedited process will include, when appropriate,
referral of the one-year license request to other government agencies for
guidance in evaluating the request. If no government agency raises an objection
to or concern with the application within nine business days from the date of
any such referral, OFAC will issue the one-year license, provided that the
request otherwise meets the requirements set forth in this rule. If any
government agency raises an objection to the request within nine business days
from the date of referral, OFAC will deny the request for the one-year license.
If any government agency raises a concern short of an objection with the request
within nine business days from the date of referral, OFAC will delay its
response to the license request for no more than thirty additional days to allow
for further review of the request.
The TSRA defines agricultural commodities by reference to the
meaning given to that term in section 102 of the Agricultural Trade Act of 1978
(7 U.S.C. 5602). This definition includes food commodities, feed, fish,
shellfish and fish products, beer, wine and spirits, soft drinks, livestock,
fiber, including cotton, wool, and other fibers, tobacco and tobacco products,
wood and wood products (including lumber and utility poles), seeds, and
reproductive materials such as fertilized eggs, embryos, and semen. It also
includes certain fertilizers and organic fertilizers that are not otherwise
controlled.
The term agricultural commodities does not include furniture made from wood,
clothing manufactured from plant or animal materials, agricultural equipment
(whether hand tools or motorized equipment), pesticides, insecticides,
herbicides, or cosmetics (unless derived entirely from plant materials).
Exporters may consult the Department of Agriculture website at http://www.fas.usda.gov
for assistance in determining whether a particular item meets the definition of
agricultural commodities under the Agricultural Trade Act. Although the
definition of agricultural commodities under the TSRA does not include vitamins
and minerals, food additives or supplements, or bottled drinking water, OFAC
will include such items in the definition of agricultural commodities for the
purposes of this rule. An Official Commodity Classification of EAR 99 obtained
from BXA is required to be submitted with the exporter's request to OFAC for a
one-year license to export to Sudan, Libya, or Iran fertilizers, live horses, or
western red cedar. An Official Commodity Classification from BXA is not required
to be submitted with the exporter's request for a one-year license to export to
Sudan, Libya, or Iran any other agricultural commodity. See, 15 CFR 745.3 for
instructions for obtaining an Official Commodity Classification of EAR 99 from
BXA.
The TSRA defines the terms medicine and medical device by
adopting the definitions of drug and device set forth in section 201 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321). These definitions include
prescription medicines and over-the-counter medicines for humans and animals
that are classified as EAR 99. They also include medical supplies, instruments,
equipment, and equipped ambulances that are so classified. They do not include
general-purpose furniture and equipment (such as desks, tables, lamps, and
office computers) used in medical offices and waiting rooms. Exporters may
consult with the Food and Drug Administration for assistance in determining
whether a particular item meets the definition of drug or device under the
Federal Food, Drug, and Cosmetic Act. Although most medicines and medical
devices are classified under the Export Administration Regulations, 15 CFR part
774, as EAR 99, certain vaccines, biological and chemical products, medical
devices and parts for such devices are listed on the CCL and are not eligible
for export under this rule. Exporters must have an Official Commodity
Classification of EAR 99 from BXA for all medical devices (including supplies)
prior to submitting a license request to OFAC, unless the item is specifically
listed on BXA's website at www.bxa.doc.gov/Regulations/TradeSanctionsReform
Expor EnhancementAct. This list identifies those medical supplies, such as
syringes, bandages, gauze and similar items, that do not require BXA
classification prior to submitting a license application to OFAC. When
submitting a license request to OFAC under its expedited review procedures,
exporters must indicate to OFAC that their medical supply is listed on the BXA
medical supply list on BXA's website. Otherwise, exporters must provide OFAC
with a copy of the BXA Official Commodity Classification of EAR 99 for those
medical devices not listed on the BXA website. See, 15 CFR 745.3 for
instructions for obtaining Official Commodity Classification of EAR 99 from BXA.
In addition, BXA has identified on its website a list of
medicines that are on the CCL and not eligible for OFAC's expedited review
procedures. When submitting a license application to OFAC under its expedited
review procedures, exporters must indicate to OFAC that their medicine is not on
the BXA medicine list on BXA's website, in other words, that it is classified as
EAR 99. If exporters are unsure of whether their medicine is on the CCL, they
should seek an Official Commodity Classification from BXA confirming that their
medicine is classified as EAR99 prior to submitting a license request to OFAC
under its expedited review procedures. See, 15 CFR 745.3 for instructions for
obtaining Official Commodity Classification of EAR 99 from BXA.
Sections 538.523, 550.569, and 560.530 set forth procedures
and requirements for requesting and obtaining these one-year licenses.
Incomplete requests will be returned to the requestor without action and without
prejudice.
These amendments to the SSR, LSR, and ITR also grant by
general license the authority for sellers to respond to public tenders on an
executory basis, negotiate and sign executory contracts, and make necessary
shipping and financing arrangements, not otherwise specifically prohibited by
Chapter V of 31 CFR, for the exportation to Libya and the exportation or
reexportation to Sudan and Iran of agricultural commodities, medicine, and
medical devices. Before the actual exportation to Libya or exportation or
reexportation to Sudan or Iran takes place, prospective exporters must obtain a
one-year license issued by the Department of the Treasury upon a determination
that such exports are covered by the TSRA and are not exports to any entity
within Sudan, Libya, or Iran promoting international terrorism.
Specific licenses issued prior to the effective date of this
rule authorizing the performance of executory contracts for the sale of
agricultural commodities, medicine, or medical equipment shall remain in effect
until the expiration date specified in the license or the first anniversary of
the effective date of this rule, whichever comes first. However, after the
effective date of this rule, new contracts for the exportation of agricultural
commodities, medicine, or medical devices may be entered into only pursuant to
the terms of, and as authorized by, this new rule.
Specific licenses issued prior to the effective date of this
rule authorizing the sale and exportation or reexportation of bulk agricultural
commodities listed in Appendix A to 31 CFR parts 538 and 550 and Appendix B to
31 CFR part 560 shall remain in effect solely to permit completion of
performance of contracts already entered into prior to the effective date of
this rule pursuant to the license. As of the effective date of this rule, new
contracts for the exportation of bulk agricultural commodities may be entered
into only pursuant to the terms of, and as authorized by, this new rule.
Nothing in this rule, however, affects prohibitions on the
exportation of any agricultural commodity, medicine, or medical device listed on
the CCL. Moreover, nothing in this rule affects prohibitions on the sale or
supply of U.S. equipment, technology, or software used to manufacture
agricultural commodities, medicine, or medical devices, such as technology to
design or produce biotechnological items or medical devices. This rule does not
affect U.S. nonproliferation export controls, including end-user and end-use
controls maintained under the Enhanced Proliferation Control Initiative.
This rule amends the SSR, LSR, and ITR in the following ways:
The amendments to Secs. 538.523, 550.569, and 560.530 of
these regulations implement section 906 of the Act by amending current sanctions
against Sudan, Libya, and Iran to require that all exports of covered
agricultural products, medicine, and medical devices to the governments of these
countries or any entities in these countries be authorized by one-year licenses
issued by the Department of the Treasury. These one-year licenses will authorize
the exporter to engage in the exportation or reexportation of the licensed
products for up to one year from the date of signing of any contract that is
entered into during the one-year period of the license.
The amendments to Secs. 538.523, 550.569, and 560.530 of
these regulations further implement section 906 of the Act by providing
exporters a general license to engage in certain transactions relating to the
sale and exportation of covered items to Sudan, Libya, or Iran prior to
obtaining the one-year license, such as responding to public tenders on an
executory basis, negotiating and signing executory contracts or other agreements
capable of acceptance, making shipping arrangements, obtaining insurance, and
arranging financing, to the extent not otherwise prohibited by Chapter V of 31
CFR. The one-year licenses will also authorize the performance of executory
contracts entered into pursuant to the general license. The amendments specify
that any executory contracts entered into prior to obtaining the one-year
license will be deemed to have been entered into on the date the one-year
license is issued for the purpose of determining the beginning of the 12-month
period during which exports may be shipped.
The amendments to Secs. 538.523, 550.569, and 560.530 of
these regulations also implement section 906 of the Act by providing procedures
for requesting, and for the issuance of, the one-year licenses.
Sections 538.526, 550.572, and 560.533 are amended to extend
the general license for U.S. persons to broker sales of bulk agricultural
commodities by U.S. persons to include the provision of brokerage services on
behalf of U.S. persons for sales of all agricultural commodities, medicines, and
medical devices as defined by Secs. 538.523, 550.569, and 560.530.
Clarifying amendments are made to Secs. 538.205, 538.211,
538.405, 550.306, 550.318, 550.405, and 560.405.
Because the Regulations involve a foreign affairs function,
the provisions of Executive Order 12866 and the Administrative Procedure Act (5
U.S.C. 553) (the ``APA'') requiring notice of proposed rulemaking, opportunity
for public participation, and delay in effective date, are inapplicable.
However, because of the importance of the issues raised by these regulations,
this rule is issued in interim form and comments will be considered in the
development of final regulations. Accordingly, the Department encourages
interested persons who wish to comment to do so at the earliest possible time to
permit the fullest consideration of their views.
The period for submission of comments will close September
10, 2001. The Department will consider all comments received before the close of
the comment period in developing final regulations. Comments received after the
end of the comment period will be considered if possible, but their
consideration cannot be assured. The Department will not accept public comments
accompanied by a request that a part or all of the submission be treated
confidentially because of its business proprietary nature or for any other
reason, and it will return such submission to the originator without considering
them in the development of final regulations. In the interest of accuracy and
completeness, the Department requires comments in written form.
All public comments on these regulations will be a matter of
public record. Copies of the public record concerning these regulations will be
made available, not sooner than October 10, 2001 and may be obtained from OFAC's
website (http://www.treas.gov/ofac).
If that service is unavailable, written requests for copies may be sent to:
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500
Pennsylvania Ave., NW Washington, DC 20220, Attn: Merete Evans.
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 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 previously 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.
List of Subjects
31 CFR Part 515
Administrative practice and procedure, Agricultural
commodities, Banks, Banking, Cuba, Drugs, Exports, Foods, Foreign trade,
Imports, Information, Investments, Loans, Medical devices, Medicine, Penalties,
Reporting and recordkeeping requirements, Services, Specially designated
nationals, Terrorism, Transportation.
31 CFR Part 538
Administrative practice and procedure, Agricultural
commodities, Banks, Banking, Drugs, Exports, Foods, Foreign trade, Imports,
Information, Investments, Loans, Medical devices, Medicine, Penalties, Reporting
and recordkeeping requirements, Services, Specially designated nationals, Sudan,
Terrorism, Transportation.
31 CFR Part 550
Administrative practice and procedure, Agricultural
commodities, Banks, Banking, Drugs, Exports, Foods, Foreign trade, Imports,
Information, Investments, Libya, Loans, Medical devices, Medicine, Penalties,
Reporting and recordkeeping requirements, Services, Specially designated
nationals, Terrorism, Transportation.
31 CFR Part 560
Administrative practice and procedure, Agricultural
commodities, Banks, Banking, Drugs, Exports, Foods, Foreign trade, Imports,
Information, Investments, Iran, Loans, Medical devices, Medicine, Penalties,
Reporting and recordkeeping requirements, Services, Specially designated
nationals, Terrorism, Transportation.
For the reasons set forth in the preamble, 31 CFR chapter V,
parts 515, 538, 550, and 560 are amended as follows:
PART 515--CUBAN ASSETS CONTROL REGULATIONS
Authority
1. Revise the authority citation for 31 CFR part 515 to read
as follows:
Authority: 18 U.S.C. 2332d; 22 U.S.C. 2370(a), 6001-6010; 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. 106-387, 114 Stat. 1549; E.O. 9193, 7 FR 5205, 3 CFR,
1938-1943 Comp., p. 1147; 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 B--Prohibitions
2. Amend Sec. 515.207 by adding a note to the end of the
section to read as follows:
Sec. 515.207 Entry of vessels engaged in trade with Cuba.
* * * * *
Note to Sec. 515.207: For the waiver of the prohibitions
contained in this section for certain vessels engaged in licensed or exempt
trade with Cuba, see Sec. 515.550.
Subpart E--Licenses, Authorizations, and Statements of Licensing Policy
3. Revise the heading and paragraphs (a) and (e) and remove
paragraph (f) of Sec. 515.533 to read as follow:
Sec. 515.533 Transactions incident to exportations from the United States
and reexportations of U.S.-origin items to Cuba.
(a) All transactions ordinarily incident to the exportation
of goods, wares, and merchandise from the United States, or the reexportation of
U.S.-origin goods, wares, and merchandise from a third country, to any person
within Cuba are hereby authorized, provided the following terms and conditions
are complied with:
(1) The exportation or reexportation is licensed or otherwise
authorized by the Department of Commerce under the provisions of the Export
Administration Act of 1979, as amended (50 U.S.C. app. 2401-2420) (see the
Export Administration Regulations, 15 CFR 730-774); and (2)
Only the following payment or financing terms may be used:
(i) Payment of cash in advance;
(ii) For authorized sales of agricultural items, financing by
a banking institution located in a third country provided the banking
institution is not a designated national, United States citizen, United States
permanent resident alien, or an entity organized under the laws of the United
States or any jurisdiction within the United States (including foreign
branches). Such financing may be confirmed or advised by a United States banking
institution; or
(iii) For all other authorized sales, financing by a banking
institution located in a third country provided the banking institution is not a
designated national or a person subject to the jurisdiction of the United
States. Such financing may be confirmed or advised by a United States banking
institution.
* * * * *
(e) Specific licenses may be issued on a case-by-case basis authorizing the travel-related transactions set forth in Sec. 515.560(c) and other transactions that are directly incident to the marketing, sales negotiation, accompanied delivery, or servicing of exports or reexports that are consistent with the export or reexport licensing policy of the Department of Commerce.
* * * * *
4. Revise the heading of Sec. 515.559 and the Note to Sec.
515.559 to read as follows:
Sec. 515.559 Certain transactions by U.S.-owned or controlled foreign
firms with Cuba.
* * * * *
Note to Sec. 515.559: For reexportation of U.S.-origin goods,
wares, or merchandise by U.S.-owned or controlled foreign firms, see Sec.
515.533. Transactions by U.S.-owned or controlled foreign firms directly
incident to the exportation of information or informational materials or the
donation of food to nongovernmental entities or individuals in Cuba are exempt
from the prohibitions of this part. See Sec. 515.206. For the waiver of the
prohibitions contained in Sec. 515.207 with respect to vessels transporting
shipments of goods, wares, or merchandise pursuant to this section, see Sec.
515.550.
5. Revise paragraph (b) of Sec. 515.560 to read as follows:
Sec. 515.560 Travel-related transactions to, from, and within Cuba by
persons subject to the jurisdiction of the United States.
* * * * *
(b) Effective October 28, 2000, no specific licenses will be issued authorizing the travel-related transactions in paragraph (c) of this section in connection with activities other than those referenced in paragraph (a) of this section.
* * * * *
PART 538--SUDANESE SANCTIONS REGULATIONS
Authority
1. Revise the authority citation for 31 CFR part 538 to read
as follows:
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 18 U.S.C. 2339B,
2332d; 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 106-387, 114 Stat. 1549; E.O.
13067, 62 FR 59989; 3 CFR, 1997 Comp., p. 230.
Subpart B--Prohibitions
2. Revise Sec. 538.205 to read as follows:
Sec. 538.205 Prohibited exportation and reexportation of goods,
technology, or services to Sudan.
Except as otherwise authorized, the exportation or
reexportation, directly or indirectly, to Sudan of any goods, technology
(including technical data, software, or other information) 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.
3. Amend Sec. 538.211 to redesignate paragraphs (b) through
(e) as paragraphs (c) through (f) and to add a new paragraph (b) to read as
follows:
Sec. 538.211 Exempt transactions.
* * * * *
(b) Humanitarian donations. The prohibitions of this part do not apply to donations by United States persons of articles, such as food, clothing, and medicine, intended to be used to relieve human suffering.
* * * * *
Subpart D--Interpretations
4. Amend Sec. 538.405 by revising paragraph (b) to read as
follows:
Sec. 538.405 Transactions incidental to a licensed transaction authorized.
* * * * *
(b) Provision of any transportation services to or from Sudan
not explicitly authorized in or pursuant to this part other than loading,
transporting, and discharging licensed or exempt cargo there.
* * * * *
Subpart E--Licenses, Authorizations, and Statements of Licensing Policy
5. Revise Sec. 538.523 to read as follows:
Sec. 538.523 Commercial sales, exportation, and reexportation of
agricultural commodities, medicine, and medical devices.
(a) One-year license requirement. The exportation or
reexportation of agricultural commodities (including bulk agricultural
commodities listed in appendix A to this part 538), medicine, or medical devices
to the Government of Sudan, any entity in Sudan, individuals in Sudan, or
persons in third countries purchasing specifically for resale to any of the
foregoing, shall only be made pursuant to a one-year license issued by the U.S.
Department of the Treasury, Office of Foreign Assets Control, for contracts
entered into during the one-year period of the license and shipped within the
12-month period beginning on the date of the signing of the contract. No license
will be granted for the exportation or reexportation of agricultural
commodities, medicine, or medical equipment to any entity or individual in Sudan
promoting international terrorism. Executory contracts entered into pursuant to
paragraph (b)(2) of this section prior to the issuance of the one-year license
described in this paragraph shall be deemed to have been signed on the date of
issuance of that one-year license (and, therefore, the exporter is authorized to
make shipments under that contract within the 12-month period beginning on the
date of issuance of the one-year license).
(b) General license for arrangement of exportation or
reexportation of covered products.
(1) The making of shipping arrangements, cargo inspection,
obtaining of insurance, and arrangement of financing (consistent with Sec.
538.525) for the exportation or reexportation of agricultural commodities,
medicine, or medical devices to the Government of Sudan, entities in Sudan,
individuals in Sudan, or persons in third countries purchasing specifically for
resale to any of the foregoing, is authorized.
(2) If desired, entry into executory contracts (including
executory pro forma invoices, agreements in principle, or executory offers
capable of acceptance such as bids in response to public tenders) for the
exportation or reexportation of agricultural commodities, medicine, and medical
devices to the Government of Sudan, entities in Sudan, individuals in Sudan, or
persons in third countries purchasing specifically for resale to any of the
foregoing, is authorized, provided that performance of an executory contract is
expressly made contingent upon the prior issuance of the one-year license
described in paragraph (a) of this section.
(c) Instructions for obtaining one-year licenses. In order to
obtain the one-year license described in paragraph (a), the exporter must
provide to the Office of Foreign Assets Control:
(1) The applicant's full legal name (if the applicant is a
business entity, the state or jurisdiction of incorporation and principal place
of business).
(2) The applicant's mailing and street address (so that OFAC
may reach a responsible point of contact, the applicant should also include the
name of the individual(s) responsible for the application and related commercial
transactions along with their telephone and fax numbers and, if available, email
addresses).
(3) The names, mailing addresses, and if available, fax and
telephone numbers of all parties with an interest in the transaction.
If the goods are being exported or reexported to a purchasing agent in Sudan,
the exporter must identify the agent's principals at the wholesale level for
whom the purchase is being made. If the goods are being exported or reexported
to an individual, the exporter must identify any organizations or entities with
which the individual is affiliated that have an interest in the transaction.
(4) A description of all items to be exported or reexported
pursuant to the requested one-year license, including a statement that the item
is classified as EAR 99, and, if necessary, documentation sufficient to verify
that the items to be exported or reexported are classified as EAR 99 and do not
fall within any of the limitations contained in paragraph (d) of this section.
(5) An Official Commodity Classification of EAR 99 issued by
the Department of Commerce, Bureau of Export Administration (``BXA''),
certifying that the product is EAR 99 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, and medical devices other than
basic medical supplies, such as syringes, bandages, gauze and similar items,
that are specifically listed on BXA's website, www.bxa.doc.gov/
Regulations/Trade Sanctions ReformExport EnhancementAct.html. Medical supplies
that are specifically listed on BXA's website do not require an Official
Commodity Classification of EAR 99 from BXA. BXA will also provide a list on its
website of medicines that are ineligible for a one-year license under these
procedures. If an exporter is uncertain whether the medicine to be exported is
eligible, they should seek an Official Commodity Classification of EAR 99 from
BXA and submit a copy to OFAC.
See, 15 CFR 745.3 for instructions for obtaining Official Commodity
Classification of EAR 99 from BXA.
(d) Limitations.
(1) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section relieves the exporter from compliance with the
export license application requirements of another Federal agency.
(2) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section authorizes the exportation or reexportation of
any agricultural commodity, medicine, or medical device controlled on the United
States Munitions List established under section 38 of the Arms Export Control
Act (22 U.S.C. 2778); controlled on any control list established under the
Export Administration Act of 1979 or any successor statute (50 U.S.C. App. 2401
et seq.; or used to facilitate the development or production of a chemical or
biological weapon or weapon of mass destruction.
(3) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section affects prohibitions on the sale or supply of
U.S. technology or software used to manufacture agricultural commodities,
medicine, or medical devices, such as technology to design or produce
biotechnological items or medical devices.
(4) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section affects U.S. nonproliferation export controls,
including end-user and end-use controls maintained under the Enhanced
Proliferation Control Initiative.
(5) This section does not apply to any transaction or dealing
involving property blocked pursuant to this chapter or to any other activity
prohibited by this chapter that is not otherwise authorized in this part.
(e) Covered items. For the purposes of this part,
agricultural commodities, medicine, and medical devices are defined below.
(1) Agricultural commodities. For the purposes of this
section, agricultural commodities are:
(i) Products that are not listed on the Commerce Control List
in the Export Administration Regulations, 15 CFR part 774, supplement no. 1, and
that fall within the term ``agricultural commodity'' as defined in section 102
of the Agricultural Trade Act of 1978 (7 U.S.C. 5602); and
(ii) Products not listed on the Commerce Control List in the
Export
Administration Regulations, 15 CFR part 774, supplement no. 1, that are
intended for ultimate use in Sudan as:
(A) Food for humans (including raw, processed, and packaged
foods; live animals; vitamins and minerals; food additives or supplements; and
bottled drinking water) or animals (including animal feeds);
(B) Seeds for food crops;
(C) Fertilizers or organic fertilizers; or
(D) Reproductive materials (such as live animals, fertilized
eggs, embryos, and semen) for the production of food animals.
(2) Medicine. For the purposes of this section, the term
medicine has the same meaning given the term ``drug'' in section 201 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not include any
item listed on the Commerce Control List in the Export Administration
Regulations, 15 CFR part 774, supplement no. 1 (excluding items classified as
EAR 99).
(3) Medical device. For the purposes of this section, 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) but does not include
any item listed on the Commerce Control List in the Export Administration
Regulations, 15 CFR part 774, supplement no. 1 (excluding items classified as
EAR 99).
(f) Transition period.
(1) Specific licenses issued prior to July 26, 2001
authorizing the performance of executory contracts for the sale of agricultural
commodities, medicine, or medical equipment shall remain in effect until the
expiration date specified in the license or July 26, 2002, whichever comes
first. However, after July 26, 2001, new contracts for the exportation of
agricultural commodities, medicine, or medical devices may be entered into only
pursuant to the terms of, and as authorized by, this part.
(2) Specific licenses issued prior to July 26, 2001
authorizing the sale and exportation or reexportation of bulk agricultural
commodities listed in Appendix A to 31 CFR parts 538 and 550 and Appendix B to
31 CFR part 560 shall remain in effect solely to permit completion of
performance of contracts already entered into prior to July 26, 2001 pursuant to
the license. As of July 26, 2001, new contracts for the exportation of bulk
agricultural commodities may be entered into only pursuant to the terms of, and
as authorized by, this part.
Sec. 538.524 [removed and reserved]
6. Remove and reserve Sec. 538.524.
7. Amend Sec. 538.525 to revise the heading and paragraph (d)
and to add a new paragraph (e) to read as follows:
Sec. 538.525 Payment for and financing of commercial sales of agricultural
commodities, medicine, and medical equipment.
* * * * *
(d) Transfers through the U.S. financial system. Before a
United States financial institution initiates a payment on behalf of any
customer, or credits a transfer to the account on its books of the ultimate
beneficiary, the United States financial institution must determine that the
underlying transaction is not prohibited by this part. Any payment relating to a
transaction authorized in or pursuant to Sec. 538.523 or Sec. 538.526 that is
routed through the U.S. financial system must reference the relevant Office of
Foreign Assets Control license authorizing the payment to avoid the blocking or
rejection of the transfer.
(e) Notwithstanding any other provision of this part, no
commercial exportation to Sudan may be made with United States Government
assistance, including United States foreign assistance, United States export
assistance, and any United States credit or guarantees absent a Presidential
waiver.
8. Amend Sec. 538.526 to revise the heading and paragraphs
(a), (b) introductory text, (b)(1) and (b)(2) to read as follows:
Sec. 538.526 Brokering sales of agricultural commodities, medicine, and
medical devices.
(a) General license for brokering sales by U.S. persons.
United States persons are authorized to provide brokerage services on behalf of
U.S. persons for the sale and exportation or reexportation by United States
persons of agricultural commodities, medicine, and medical devices, provided
that the sale and exportation or reexportation is authorized by a one-year
license issued pursuant to Sec. 538.523.
(b) Specific licensing for brokering sales by non-U.S.
persons of bulk agricultural commodities. Specific licenses may be issued on a
case-by-case basis to permit United States persons to provide brokerage services
on behalf of non-United States, non-Sudanese persons for the sale and
exportation or reexportation of bulk agricultural commodities to the Government
of Sudan, entities in Sudan or individuals in Sudan.
Specific licenses issued pursuant to this section will authorize the brokering
only of sales that:
(1) Are limited to the bulk agricultural commodities listed
in appendix A to this part 538;
(2) Are to purchasers permitted pursuant to Sec. 538.523;
Note to paragraph (b)(2): Requests for specific licenses to
provide brokerage services under this paragraph must include all of the
information described in Sec. 538.523(c).
* * * * *
PART 550--LIBYAN SANCTIONS REGULATIONS
Authority
1. Revise the authority citation for 31 CFR part 550 to read
as follows:
Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 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); Pub.
L. 106-387, 114 Stat. 1549; 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 C--Definitions
2. Revise Sec. 550.206 to read as follows:
Sec. 550.306 Person.
The term person means an individual or entity.
3. Revise Sec. 550.308 to read as follows:
Sec. 550.308 United States person.
The term United States person, or as abbreviated, U.S.
person, means any United States citizen, permanent resident alien, juridical
person authorized under the laws of the United States (including foreign
branches), or any person in the United States.
4. Revise Sec. 550.318 to read as follows:
Sec. 550.318 Entity.
The term entity means a partnership, association, trust,
joint venture, corporation, or other organization.
Subpart D--Interpretations
5. Amend Sec. 550.405 to revise paragraph (b) to read as
follows:
Sec. 550.405 Transactions incidental to a licensed transaction authorized.
* * * * *
(b) Provision of any transportation services to or from Libya not explicitly authorized in or pursuant to this part other than loading, transporting, and discharging licensed or exempt cargo there.
* * * * *
Subpart E--Licenses, Authorizations, and Statements of Licensing Policy
6. Revise Sec. 550.569 to read as follows:
Sec. 550.569 Commercial sales and exportation of agricultural commodities,
medicine, and medical devices.
(a) One-year license requirement. The exportation of
agricultural commodities (including bulk agricultural commodities listed in
appendix A to this part 550), medicine, or medical devices to the Government of
Libya, any entity in Libya, individuals in Libya, or persons in third countries
purchasing specifically for resale to any of the foregoing, shall only be made
pursuant to a one-year license issued by the United States Department of the
Treasury, Office of Foreign Assets Control, for contracts entered into during
the one-year period of the license and shipped within the 12-month period
beginning on the date of the signing of the contract. No license will be granted
for the exportation of agricultural commodities, medicine, or medical equipment
to any entity or individual in Libya promoting international terrorism.
Executory contracts entered into pursuant to paragraph (b)(2) of this section
prior to the issuance of the one-year license described in this paragraph shall
be deemed to have been signed on the date of issuance of that one-year license
(and, therefore, the exporter is authorized to make shipments under that
contract within the 12-month period beginning on the date of issuance of the
one-year license).
(b) General license for arrangement of exportation of covered
products.
(1) The making of shipping arrangements, cargo inspection,
obtaining of insurance, and arrangement of financing (consistent with Sec.
550.571) for the exportation of agricultural commodities, medicine, and medical
devices to the Government of Libya, entities in Libya, individuals in Libya, or
persons in third countries purchasing specifically for resale to any of the
foregoing, is authorized.
(2) If desired, entry into executory contracts (including
executory pro forma invoices, agreements in principle, or executory offers
capable of acceptance such as bids in response to public tenders) for the
exportation of agricultural commodities, medicine, and medical devices to the
Government of Libya, entities in Libya, individuals in Libya, or persons in
third countries purchasing specifically for resale to any of the foregoing, is
authorized, provided that performance of an executory contract is expressly made
contingent upon the prior issuance of the one-year license described in
paragraph (a) of this section.
(c) Instructions for obtaining one-year licenses. In order to
obtain the one-year license described in paragraph (a), the exporter must
provide to the Office of Foreign Assets Control:
(1) The applicant's full legal name (if the applicant is a
business entity, the state or jurisdiction of incorporation and principal place
of business).
(2) The applicant's mailing and street address (so that OFAC
may reach a responsible point of contact, the applicant should also include the
name of the individual(s) responsible for the application and related commercial
transactions along with their telephone and fax numbers and, if available, email
addresses).
(3) The names and addresses and, if available, fax and phone
numbers of all parties with an interest in the transaction. If the goods are
being exported to a purchasing agent in Libya, the exporter must identify the
agent's principals at the wholesale level for whom the purchase is being made.
If the goods are being exported to an individual, the exporter must identify any
organizations or entities with which the individual is affiliated that have an
interest in the transaction.
(4) A description of all items to be exported pursuant to the
requested one-year license, including a statement that the item is classified as
EAR 99, and, if necessary, documentation sufficient to verify that the items to
be exported are classified as EAR 99 and do not fall within any of the
limitations contained in paragraph (d) of this section.
(5) An Official Commodity Classification of EAR 99 issued by
the Department of Commerce, Bureau of Export Administration (``BXA''),
certifying that the product is EAR 99 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, and medical devices other than
basic medical supplies, such as syringes, bandages, gauze and similar items,
that are specifically listed on BXA's website, www.bxa.doc.gov/
Regulations/TradeSanctionsReform ExportEnhancementAct.html. Medical supplies
that are specifically listed on BXA's website do not require an Official
Commodity Classification of EAR 99 from BXA. BXA will also provide a list on its
website of medicines that are ineligible for a one-year license under these
procedures. If an exporter is uncertain whether the medicine to be exported is
eligible, they should seek an Official Commodity Classification of EAR 99 from
BXA and submit a copy to OFAC.
See, 15 CFR 745.3 for instructions for obtaining Official Commodity
Classification of EAR 99 from BXA.
(d) Limitations.
(1) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section relieves the exporter from compliance with the
export license application requirements of another Federal agency.
(2) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section authorizes the exportation or reexportation of
any agricultural commodity, medicine, or medical device controlled on the United
States Munitions List established under section 38 of the Arms Export Control
Act (22 U.S.C. 2778); controlled on any control list established under the
Export Administration Act of 1979 or any successor statute (50 U.S.C. App. 2401
et seq.); or used to facilitate the development or production of a chemical or
biological weapon or weapon of mass destruction.
(3) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section affects prohibitions on the sale or supply of
U.S. technology or software used to manufacture agricultural commodities,
medicine, or medical devices, such as technology to design or produce
biotechnological items or medical devices.
(4) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section affects U.S. nonproliferation export controls,
including end-user and end-use controls maintained under the Enhanced
Proliferation Control Initiative.
(5) This section does not apply to any transaction or dealing
involving property blocked pursuant to this chapter or any other activity
prohibited by this chapter not otherwise authorized in this part.
(e) Covered items. For the purposes of this part,
agricultural commodities, medicine, and medical devices are defined
below. (1) Agricultural commodities. For the purposes of this
section, agricultural commodities are:
(i) Products that are not listed on the Commerce Control List
in the Export Administration Regulations, 15 CFR part 774, supplement no. 1, and
that fall within the term ``agricultural commodity'' as defined in section 102
of the Agricultural Trade Act of 1978 (7 U.S.C. 5602); and
(ii) Products not listed on the Commerce Control List in the
Export Administration Regulations, 15 CFR part 774, supplement no. 1, that are
intended for ultimate use in Libya as:
(A) Food for humans (including raw, processed, and packaged
foods; live animals; vitamins and minerals; food additives or supplements; and
bottled drinking water) or animals (including animal feeds);
(B) Seeds for food crops;
(C) Fertilizers or organic fertilizers; or
(D) Reproductive materials (such as live animals, fertilized
eggs, embryos, and semen) for the production of food animals.
(2) Medicine. For the purposes of this section, the term
medicine has the same meaning given the term ``drug'' in section 201 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not include any
item listed on the Commerce Control List in the Export Administration
Regulations, 15 CFR part 774, supplement no. 1 (excluding items classified as
EAR 99).
(3) Medical device. For the purposes of this section, 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) but does not include
any item listed on the Commerce Control List in the Export Administration
Regulations, 15 CFR part 774, supplement no. 1 (excluding items classified as
EAR 99).
(f) Transition period.
(1) Specific licenses issued prior to July 26, 2001
authorizing the performance of executory contracts for the sale of agricultural
commodities, medicine, or medical equipment shall remain in effect until the
expiration date specified in the license or July 26, 2002, whichever comes
first. However, after July 26, 2001, new contracts for the exportation of
agricultural commodities, medicine, or medical devices may be entered into only
pursuant to the terms of, and as authorized by, this part.
(2) Specific licenses issued prior to July 26, 2001
authorizing the sale and exportation or reexportation of bulk agricultural
commodities listed in Appendix A to 31 CFR parts 538 and 550 and Appendix B to
31 CFR part 560 shall remain in effect solely to permit completion of
performance of contracts already entered into prior to July 26, 2001 pursuant to
the license. As of July 26, 2001, new contracts for the exportation of bulk
agricultural commodities may be entered into only pursuant to the terms of, and
as authorized by, this part.
7. Remove and reserve Sec. 550.570.
Sec. 550.570 [Removed and reserved]
8. Amend Sec. 550.571 to revise the heading and paragraph (d)
and to add a new paragraph (e) to read as follows:
Sec. 550.571 Payment for and financing of exports of agricultural
commodities, medicine, and medical equipment.
* * * * *
(d) Transfers through the U.S.
financial system. Before a United States financial institution initiates a
payment on behalf of any customer, or credits a transfer to the account on its
books of the ultimate beneficiary, the United States financial institution must
determine that the underlying transaction is not prohibited by this part. Any
payment relating to a transaction authorized in or pursuant to Sec. 550.569 or
Sec. 550.572 that is routed through the U.S. financial system must reference the
relevant Office of Foreign Assets Control license authorizing the payment to
avoid the blocking or rejection of the transfer.
(e) Notwithstanding any other provision of this part, no
commercial exportation to Libya may be made with United States Government
assistance, including United States foreign assistance, United States export
assistance, and any United States credit or guarantees absent a Presidential
waiver.
9. Amend Sec. 550.572 to revise the heading and paragraphs
(a), (b) introductory text, (b)(1) and (b)(2) to read as follows:
Sec. 550.572 Brokering sales of agricultural commodities, medicine, and
medical devices.
(a) General license for brokering sales by U.S. persons.
United States persons are authorized to provide brokerage services on behalf of
U.S. persons for the sale and exportation or reexportation by United States
persons of agricultural commodities, medicine, and medical devices, provided
that the sale and exportation or reexportation is authorized by a one-year
license issued pursuant to Sec. 550.569.
(b) Specific licensing for brokering sales by non-U.S.
persons of bulk agricultural commodities. Specific licenses may be issued on a
case-by-case basis to permit United States persons to provide brokerage services
on behalf of non-United States, non-Libyan persons for the sale and exportation
or reexportation of bulk agricultural commodities to the Government of Libya,
entities in Libya or individuals in Libya. Specific licenses issued pursuant to
this section will authorize the brokering only of sales that:
(1) Are limited to the bulk agricultural commodities listed
in appendix A to this part 550;
(2) Are to purchasers permitted pursuant to Sec. 550.569;
Note to paragraph (b)(2): Requests for specific licenses to
provide brokerage services under this paragraph must include all of the
information described in Sec. 550.569(c).
* * * * *
10. Revise Sec. 550.573 to read as follows:
Sec. 550.573 Travel transactions in connection with the exportation of
agricultural commodities, medicine, and medical devices.
Travel transactions to, from, and within Libya for the sole
purpose
of engaging in transactions authorized by Sec. 550.569 are authorized. Travel
transactions related to installation or servicing of medical equipment sold
pursuant to Sec. 550.569 must be authorized by specific license. See Sec.
501.801(b) of this chapter for specific licensing procedures.
Note to Sec. 550.573: U.S. passports must be validated by the
U.S. Department of State for travel to Libya.
PART 560--IRAN TRANSACTION REGULATIONS
Authority
1. Revise the authority citation for part 560 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); Pub. L. 106-387, 114 Stat. 1549; 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 CRF, 1995 Comp., p. 356; E.O. 13059, 62 FR
44531, 3 CFR, 1997 Comp., p. 217.
Subpart D--Interpretations
2. Amend Sec. 560.405 to revise paragraph (b) to read as
follows:
Sec. 560.405 Transactions incidental to a licensed transaction authorized.
* * * * *
(b) Provision of any transportation services to or from Iran not explicitly authorized in or pursuant to this part other than loading, transporting, and discharging licensed or exempt cargo there.
* * * * *
Subpart E--Licenses, Authorizations and Statements of Licensing Policy
3. Amend Sec. 560.520 to revise the heading to read as
follows:
Sec. 560.520 Exportation of agricultural commodities on contracts entered
into prior to May 7, 1995.
* * * * *
4. Revise Sec. 560.530 to read as follows:
Sec. 560.530 Commercial sales, exportation, and reexportation of
agricultural commodities, medicine, and medical devices.
(a) One-year license requirement. The exportation or
reexportation of agricultural commodities (including bulk agricultural
commodities listed in appendix B to this part 560), medicine, or medical devices
to the Government of Iran, any entity in Iran, individuals in Iran, or persons
in third countries purchasing specifically for resale to any of the foregoing,
shall only be made pursuant to a one-year license issued by the United States
Department of the Treasury, Office of Foreign Assets Control, for contracts
entered into during the one-year period of the license and shipped within the
12-month period beginning on the date of the signing of the contract. No license
will be granted for the exportation or reexportation of agricultural
commodities, medicine, or medical equipment to any entity or individual in Iran
promoting international terrorism. Executory contracts entered into pursuant to
paragraph (b)(2) of this section prior to the issuance of the one-year license
described in this paragraph shall be deemed to have been signed on the date of
issuance of that one-year license (and, therefore, the exporter is authorized to
make shipments under that contract within the 12-month period beginning on the
date of issuance of the one-year license).
(b) General license for arrangement of exportation and
reexportation of covered products.
(1) The making of shipping arrangements, cargo inspections,
obtaining of insurance, and arrangement of financing (consistent with Sec.
560.532) for the exportation or reexportation of agricultural commodities,
medicine, and medical devices to the Government of Iran, entities in Iran,
individuals in Iran, or persons in third countries purchasing specifically for
resale to any of the foregoing, is authorized.
(2) If desired, entry into executory contracts (including
executory pro forma invoices, agreements in principle, or executory offers
capable of acceptance such as bids in response to public tenders) for the
exportation or reexportation of agricultural commodities, medicine, and medical
devices to the Government of Iran, entities in Iran, individuals in Iran, or
persons in third countries purchasing specifically for resale to any of the
foregoing, is authorized, provided that performance of an executory contract is
expressly made contingent upon the prior issuance of the one-year license
described in paragraph (a) of this section.
(c) Instructions for obtaining one-year licenses. In order to
obtain the one-year license described in paragraph (a), the exporter must
provide to the Office of Foreign Assets Control:
(1) The applicant's full legal name (if the applicant is a
business entity, the state or jurisdiction of incorporation and principal place
of business).
(2) The applicant's mailing and street address (so that OFAC
may reach a responsible point of contact, the applicant should also include the
name of the individual(s) responsible for the application and related commercial
transactions along with their telephone and fax numbers and, if available, email
addresses).
(3) The names, mailing addresses, and, if available, fax and
telephone numbers of all parties with an interest in the transaction. If the
goods are being exported or reexported to a purchasing agent in Iran, the
exporter must identify the agent's principals at the wholesale level for whom
the purchase is being made. If the goods are being exported or reexported to an
individual, the exporter must identify any organizations or entities with which
the individual is affiliated that have an interest in the transaction.
(4) A description of all items to be exported or reexported
pursuant to the requested one-year license, including a statement that the item
is classified as EAR 99, and, if necessary, documentation sufficient to verify
that the items to be exported or reexported are classified as EAR 99 and do not
fall within any of the limitations contained in paragraph (d) of this section.
(5) An Official Commodity Classification of EAR 99 issued by
the Department of Commerce, Bureau of Export Administration (``BXA''),
certifying that the product is EAR 99 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, and medical devices other than
basic medical supplies, such as syringes, bandages, gauze and similar items,
that are specifically listed on BXA's website, www.bxa.doc.gov/Regulations/Trade
Sanctions ReformExport EnhancementAct.html. Medical supplies that are
specifically listed on BXA's website do not require an Official Commodity
Classification of EAR 99 from BXA. BXA will also provide a list on its website
of medicines that are ineligible for a one-year license under these procedures.
If an exporter is uncertain whether the medicine to be exported is eligible,
they should seek an Official Commodity Classification of EAR 99 from BXA and
submit a copy to OFAC. See, 15 CFR 745.3 for instructions for obtaining Official
Commodity Classification of EAR 99 from BXA.
(d) Limitations.
(1) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section relieves the exporter from compliance with the
export license application requirements of another Federal agency.
(2) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section authorizes the exportation or reexportation of
any agricultural commodity, medicine, or medical device controlled on the United
States Munitions List established under section 38 of the Arms Export Control
Act (22 U.S.C. 2778); controlled on any control list established under the
Export Administration Act of 1979 or any successor statute (50 U.S.C. App. 2401
et seq.); or used to facilitate the development or production of a chemical or
biological weapon or weapon of mass destruction.
(3) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section affects prohibitions on the sale or supply of
U.S. technology or software used to manufacture agricultural commodities,
medicine, or medical devices, such as technology to design or produce
biotechnological items or medical devices.
(4) Nothing in this section or in any license issued pursuant
to paragraph (a) of this section affects U.S. nonproliferation export controls,
including end-user and end-use controls maintained under the Enhanced
Proliferation Control Initiative.
(5) This section does not apply to any transaction or dealing
involving property blocked pursuant to this chapter or any other activity
prohibited by this chapter not otherwise authorized in this part.
(e) Covered items. For the purposes of this part,
agricultural commodities, medicine, and medical devices are defined below.
(1) Agricultural commodities. For the purposes of this
section, agricultural commodities are:
(i) Products not listed on the Commerce Control List in the
Export Administration Regulations, 15 CFR part 774, supplement no. 1, and that
fall within the term ``agricultural commodity'' as defined in section 102 of the
Agricultural Trade Act of 1978 (7 U.S.C. 5602); and
(ii) Products not listed on the Commerce Control List in the
Export Administration Regulations, 15 CFR part 774, supplement no. 1, that are
intended for ultimate use in Iran as:
(A) Food for humans (including raw, processed, and packaged
foods;
live animals; vitamins and minerals; food additives or supplements; and bottled
drinking water) or animals (including animal feeds);
(B) Seeds for food crops;
(C) Fertilizers or organic fertilizers; or
(D) Reproductive materials (such as live animals, fertilized
eggs, embryos, and semen) for the production of food animals.
(2) Medicine. For the purposes of this section, the term
medicine has the same meaning given the term ``drug'' in section 201 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not include any
item listed on the Commerce Control List in the Export Administration
Regulations, 15 CFR part 774, supplement no. 1 (excluding items classified as
EAR 99).
(3) Medical device. For the purposes of this section, 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) but does not include
any item listed on the Commerce Control List in the Export Administration
Regulations, 15 CFR part 774, supplement no. 1 (excluding items classified as
EAR 99).
(f) Transition period.
(1) Specific licenses issued prior to July 26, 2001
authorizing the performance of executory contracts for the sale of agricultural
commodities, medicine, or medical equipment shall remain in effect until the
expiration date specified in the license or July 26, 2002, whichever comes
first. However, after July 26, 2001, new contracts for the exportation of
agricultural commodities, medicine, or medical devices may be entered into only
pursuant to the terms of, and as authorized by, this new part.
(2) Specific licenses issued prior to July 26, 2001
authorizing the sale and exportation or reexportation of bulk agricultural
commodities listed in Appendix A to 31 CFR parts 538 and 550 and Appendix B to
31 CFR part 560 shall remain in effect solely to permit completion of
performance of contracts already entered into prior to July 26, 2001 pursuant to
the license. As of July 26, 2001, new contracts for the exportation of bulk
agricultural commodities may be entered into only pursuant to the terms of, and
as authorized by, this part.
Sec. 560.531 [Removed and reserved]
5. Remove and reserve Sec. 560.531.
6. Amend Sec. 560.532 to revise the heading and paragraph (d)
and to add a new paragraph (e) to read as follows:
Sec. 560.532 Payment for and financing of exports and reexports of
commercial commodities, medicine, and medical devices.
* * * * *
(d) Transfers through the U.S.
financial system. Any payment relating to a transaction authorized in or
pursuant to Sec. 560.530 or Sec. 560.533 that is routed through the U.S.
financial system must reference the relevant Office of Foreign Assets Control
license authorizing the payment to avoid the rejection of the transfer. See Sec.
560.516(b).
(e) Notwithstanding any other provision of this part, no
commercial exportation to Iran may be made with United States Government
assistance, including United States foreign assistance, United States export
assistance, and any United States credit or guarantees absent a Presidential
waiver.
7. Amend Sec. 560.533 to revise the heading and paragraphs
(a), (b) introductory text, (b)(1), and (b)(2) to read as follows:
Sec. 560.533 Brokering sales of agricultural commodities, medicine, and
medical devices.
(a) General license for brokering sales by U.S. persons.
United States persons are authorized to provide brokerage services on behalf of
U.S. persons for the sale and exportation or reexportation by United States
persons of agricultural commodities, medicine, and medical devices, provided
that the sale and exportation or reexportation is authorized by a one-year
license issued pursuant to Sec. 560.530.
(b) Specific licensing for brokering sales by non-U.S.
persons of bulk agricultural commodities. Specific licenses may be issued on a
case-by-case basis to permit United States persons to provide brokerage services
on behalf of non-United States, non-Iranian persons for the sale and exportation
or reexportation of bulk agricultural commodities to the Government of Iran,
entities in Iran or individuals in Iran.
Specific licenses issued pursuant to this section will authorize the brokering
only of sales that:
(1) Are limited to the bulk agricultural commodities listed
in appendix B to this part 560;
(2) Are to purchasers permitted pursuant to Sec. 560.530;
* * * * *
Note to Sec. 560.533(b)(2): Requests for specific licenses to
provide brokerage services under this paragraph must include all of the
information described in Sec. 560.530(c).
Dated: June 6, 2001.
Loren L. Dohm,
Acting Director, Office of Foreign Assets Control.
Approved: June 14, 2001.
James F. Sloan,
Acting Under Secretary (Enforcement), Department of the Treasury.
[FR Doc. 01-17466 Filed 7-10-01; 11:02 am]
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