[Federal Register Volume 83, Number 125 (Thursday, June 28, 2018)]
[Rules and Regulations]
[Pages 30335-30338]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13939]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 560
Iranian Transactions and Sanctions Regulations
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of the Treasury's Office of Foreign Assets
Control (OFAC) is amending the Iranian Transactions and Sanctions
Regulations (ITSR) to implement the President's May 8, 2018 decision to
end the United States' participation in the Joint Comprehensive Plan of
Action (JCPOA) on Iran's nuclear program, as outlined in National
Security Presidential Memorandum-11 of May 8, 2018 (NSPM-11).
Specifically, OFAC is amending the ITSR to: Amend the general licenses
authorizing the importation into the United States of, and dealings in,
Iranian-origin carpets and foodstuffs, as well as related letters of
credit and brokering services, to narrow the scope of such general
licenses to the wind down of such activities through August 6, 2018;
add a new general license to authorize the wind down, through August 6,
2018, of transactions related to the negotiation of contingent
contracts for activities eligible for authorization under the Statement
of Licensing Policy for Activities Related to the Export or Re-export
to Iran of Commercial Passenger Aircraft and Related Parts and
Services, which was rescinded following the issuance of NSPM-11; and
add a new general license to authorize the wind down, through November
4, 2018, of certain transactions relating to foreign entities owned or
controlled by a United States person.
DATES: Effective Date: June 27, 2018.
FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for
Licensing, tel.: 202-622-2480; Assistant Director for Regulatory
Affairs, tel.: 202-622-4855; Assistant Director for Sanctions
Compliance & Evaluation, tel.: 202-622-2490; or the Department of the
Treasury's Office of the Chief Counsel (Foreign Assets Control), Office
of the General Counsel, tel.: 202-622-2410.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document and additional information concerning OFAC are
available on OFAC's website (www.treasury.gov/ofac).
Background
On May 8, 2018, the President issued NSPM-11, which set forth his
decision to end the United States' participation in the JCPOA. In NSPM-
11, the
[[Page 30336]]
President directed the Secretary of State and the Secretary of the
Treasury to immediately begin taking steps to re-impose all United
States sanctions lifted or waived in connection with the JCPOA as
expeditiously as possible, and in no case later than 180 days from the
date of NSPM-11. Today, OFAC is amending the ITSR, 31 CFR part 560, to
issue wind-down authorizations for activities involving Iran that were
previously authorized by OFAC in connection with the U.S. sanctions
relief provided for under the JCPOA. In conjunction with this action,
OFAC has revoked General License H and General License I, two
authorizations for activities involving Iran that were previously
issued by OFAC in connection with the U.S. sanctions relief provided
for under the JCPOA.
On January 16, 2016, OFAC issued General License H to license
certain transactions relating to foreign entities owned or controlled
by a United States person. At the time of its issuance, General License
H was posted on OFAC's website (www.treasury.gov/ofac).
Also on January 16, 2016, OFAC issued a Statement of Licensing
Policy for Activities Related to the Export or Re-export to Iran of
Commercial Passenger Aircraft and Related Parts and Services (JCPOA
SLP). At the time of its issuance, the JCPOA SLP was posted on OFAC's
website (www.treasury.gov/ofac). Following the issuance of NSPM-11,
OFAC rescinded the JCPOA SLP and posted an archived version of the
JCPOA SLP on its website for reference purposes.
On January 21, 2016, OFAC amended the ITSR to license the
importation into the United States of certain Iranian-origin carpets
and foodstuffs, including pistachios and caviar (81 FR 3330).
Specifically, OFAC added Sec. 560.534 to the ITSR to authorize by
general license the importation into the United States of, and dealings
in, certain Iranian-origin foodstuffs and carpets from Iran or a third
country. OFAC also added Sec. 560.535 to the ITSR to authorize by
general license certain letters of credit and brokering services
relating to certain Iranian-origin foodstuffs and carpets.
On March 24, 2016, OFAC issued General License I to authorize
certain transactions related to the negotiation of, and entry into,
contingent contracts for activities eligible for authorization under
the JCPOA SLP. At the time of its issuance, General License I was
posted on OFAC's website (www.treasury.gov/ofac).
Today, OFAC is amending the ITSR to implement the wind-down
authorizations for the above-referenced activities involving Iran that
were previously authorized by OFAC pursuant to the ITSR in connection
with the U.S. sanctions relief provided for under the JCPOA.
First, OFAC is amending Sec. 560.534 to narrow the scope of that
general license to authorize, through 11:59 p.m. eastern daylight time
on August 6, 2018, only the wind down of transactions related to the
importation into the United States of, and dealings in, certain
Iranian-origin foodstuffs and carpets. U.S. persons will be authorized
to engage in all transactions and activities that are ordinarily
incident and necessary to the wind down of transactions that were
previously authorized under Sec. 560.534. After 11:59 p.m. eastern
daylight time on August 6, 2018, no further transactions are authorized
under amended Sec. 560.534.
OFAC is also amending Sec. 560.535 to narrow the scope of that
general license to authorize, through 11:59 p.m. eastern daylight time
on August 6, 2018, only the wind down of transactions related to
letters of credit and brokering services relating to certain Iranian-
origin foodstuffs and carpets. U.S. persons will be authorized to
engage in all transactions and activities that are ordinarily incident
and necessary to the wind down of transactions that were previously
authorized under Sec. 560.535. After 11:59 p.m. eastern daylight time
on August 6, 2018, no further transactions are authorized under amended
Sec. 560.535.
In addition, OFAC is adding Sec. 560.536 to authorize, through
11:59 p.m. eastern daylight time on August 6, 2018, all transactions
and activities that are ordinarily incident and necessary to the wind
down of transactions related to the negotiation of contingent contracts
for activities that were, at the time of the negotiation, eligible for
authorization under the JCPOA SLP. This wind-down authorization enables
U.S. persons to wind down, through August 6, 2018, activities that were
previously authorized pursuant to General License I. In conjunction
with this action, OFAC has revoked General License I and has posted an
archived version of General License I on its website (www.treasury.gov/ofac) for reference purposes. After 11:59 p.m. eastern daylight time on
August 6, 2018, no further transactions are authorized under Sec.
560.536.
Finally, OFAC is adding Sec. 560.537 to authorize, through 11:59
p.m. eastern standard time on November 4, 2018, all transactions and
activities that are ordinarily incident and necessary to the wind down
of transactions relating to foreign entities owned or controlled by a
United States person that were previously authorized under General
License H. In conjunction with this action, OFAC has revoked General
License H and has posted an archived version of General License H on
its website (www.treasury.gov/ofac) for reference purposes. After 11:59
p.m. eastern standard time on November 4, 2018, no further transactions
are authorized under Sec. 560.537.
Public Participation
Because the amendment of the ITSR involves a foreign affairs
function, the provisions of Executive Order 12866 and the
Administrative Procedure Act (5 U.S.C. 553) requiring notice of
proposed rulemaking, opportunity for public participation, and delay in
effective date, as well as the provisions of Executive Order 13771, are
inapplicable. Because no notice of proposed rulemaking is required for
this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not
apply.
Paperwork Reduction Act
The collections of information related to the ITSR are contained in
31 CFR part 501 (the ``Reporting, Procedures and Penalties
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44
U.S.C. 3507), those collections of information have been approved by
the Office of Management and Budget under control number 1505-0164. An
agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the collection of
information displays a valid control number.
List of Subjects in 31 CFR Part 560
Administrative practice and procedure, Aircraft, Banks, Banking,
Carpet, Civil aviation, Foodstuffs, Iran, Letters of credit.
For the reasons set forth in the preamble, the Department of the
Treasury's Office of Foreign Assets Control amends 31 CFR chapter V as
follows:
PART 560--IRANIAN TRANSACTIONS AND SANCTIONS REGULATIONS
0
1. The authority citation for part 560 continues to read as follows:
Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C.
2349aa-9; 22 U.S.C. 7201-7211; 31 U.S.C. 321(b); 50 U.S.C. 1601-
1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461
note); Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); Pub. L.
111-195, 124 Stat. 1312 (22 U.S.C. 8501-8551); Pub. L. 112-81, 125
Stat. 1298 (22 U.S.C. 8513a); Pub. L. 112-158, 126 Stat. 1214 (22
U.S.C. 8701-8795); E.O. 12613, 52 FR 41940,
[[Page 30337]]
3 CFR, 1987 Comp., p. 256; E.O. 12957, 60 FR 14615, 3 CFR, 1995
Comp., p. 332; E.O. 12959, 60 FR 24757, 3 CFR, 1995 Comp., p. 356;
E.O. 13059, 62 FR 44531, 3 CFR, 1997 Comp., p. 217; E.O. 13599, 77
FR 6659, 3 CFR, 2012 Comp., p. 215; E.O. 13628, 77 FR 62139, 3 CFR,
2012 Comp., p. 314.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
0
2. Revise Sec. 560.534 to read as follows:
Sec. 560.534 Winding down of transactions related to the importation
into the United States of, and dealings in, certain foodstuffs and
carpets.
(a) Except as provided in paragraphs (b) and (c) of this section,
all transactions and activities that are ordinarily incident and
necessary to the wind down of the following activities are authorized
through 11:59 p.m. eastern daylight time on August 6, 2018:
(1) The importation into the United States, from Iran or a third
country, of the following goods of Iranian origin:
(i) Foodstuffs intended for human consumption that are classified
under chapters 2-23 of the Harmonized Tariff Schedule of the United
States; and
(ii) Carpets and other textile floor coverings and carpets used as
wall hangings that are classified under chapter 57 or heading
9706.00.0060 of the Harmonized Tariff Schedule of the United States.
(2) United States persons, wherever located, engaging in
transactions or dealings in or related to the categories of Iranian-
origin goods described in paragraph (a)(1) of this section, provided
that the transaction or dealing does not involve or relate to goods,
technology, or services for exportation, reexportation, sale, or
supply, directly or indirectly, to Iran, the Government of Iran, an
Iranian financial institution, or any other person whose property and
interests in property are blocked pursuant to Sec. 560.211, other than
services described in Sec. 560.405 (``Transactions ordinarily incident
to a licensed transaction authorized'') and transfers of funds
described in Sec. 560.516 (``Transfers of funds involving Iran'').
(b) This general license does not authorize the importation into
the United States of goods that were under seizure or detention by the
Department of Homeland Security, as of January 21, 2016, pursuant to
Customs regulations or other applicable provisions of law, until any
applicable penalties, charges, duties, or other conditions are
satisfied. This general license does not authorize the importation into
the United States of goods for which forfeiture proceedings have
commenced or of goods that have been forfeited to the U.S. Government,
other than through U.S. Customs and Border Protection disposition,
including by selling at auction.
(c) Nothing in this section authorizes debits or credits to Iranian
accounts, as defined in Sec. 560.320.
0
3. Revise Sec. 560.535 to read as follows:
Sec. 560.535 Winding down of transactions related to letters of
credit and brokering services relating to certain foodstuffs and
carpets.
(a) Wind down. Except as provided in paragraph (b) of this section,
all transactions and activities that are ordinarily incident and
necessary to the wind down of the following activities are authorized
through 11:59 p.m. eastern daylight time on August 6, 2018:
(1) Purchases from Iran or the Government of Iran or certain other
blocked persons. United States depository institutions issuing letters
of credit in favor of a beneficiary in Iran, the Government of Iran, an
Iranian financial institution, or any other person whose property and
interests in property are blocked pursuant to Sec. 560.211 to pay for
purchases from Iran or the Government of Iran of the categories of
Iranian-origin goods described in Sec. 560.534(a)(1), provided that
such letters of credit are not advised, negotiated, paid, or confirmed
by the Government of Iran, an Iranian financial institution, or any
other person whose property and interests in property are blocked
pursuant to Sec. 560.211.
(2) Transactions or dealings in Iranian-origin goods located in
third countries, other than purchases from the Government of Iran or
certain other blocked persons. United States depository institutions
issuing, advising, negotiating, or confirming letters of credit to pay
for transactions in or related to Iranian-origin goods described in
Sec. 560.534(a)(1) and located in a third-country, other than
purchases from the Government of Iran, an Iranian financial
institution, or any other person whose property and interests in
property are blocked pursuant to Sec. 560.211, provided that such
letters of credit are not issued, advised, negotiated, paid, or
confirmed by the Government of Iran, an Iranian financial institution,
or any other person whose property and interests in property are
blocked pursuant to Sec. 560.211.
(3) Brokering. United States persons, wherever located, acting as
brokers for the purchase or sale of the categories of Iranian-origin
goods described in Sec. 560.534(a)(1), provided that the goods are not
for exportation, reexportation, sale, or supply, directly or
indirectly, to Iran, the Government of Iran, an Iranian financial
institution, or any other person whose property and interests in
property are blocked pursuant to Sec. 560.211.
(b) Iranian accounts. Nothing in this section authorizes debits or
credits to Iranian accounts, as defined in Sec. 560.320.
Note 1 to Sec. 560.535: See Sec. Sec. 560.304 and 560.313 for
information relating to individuals and entities that are included
within the definition of the term Government of Iran and Sec.
560.324 regarding entities included within the definition of the
term Iranian financial institution. See Sec. 560.516 for
information relating to authorized transfers to Iran by U.S.
depository institutions relating to licensed transactions.
0
4. Add Sec. 560.536 to subpart E to read as follows:
Sec. 560.536 Winding down of transactions related to the negotiation
of contingent contracts for activities eligible for authorization under
the Statement of Licensing Policy for Activities Related to the Export
or Re-export to Iran of Commercial Passenger Aircraft and Related Parts
and Services.
(a) All transactions and activities that are ordinarily incident
and necessary to the wind down of the following activities are
authorized through 11:59 p.m. eastern daylight time on August 6, 2018:
U.S. persons engaging in all transactions ordinarily incident to the
negotiation of contingent contracts for activities that were, at the
time of the negotiation, eligible for authorization under the now-
rescinded Statement of Licensing Policy for Activities Related to the
Export or Re-export to Iran of Commercial Passenger Aircraft and
Related Parts and Services (JCPOA SLP).
Note 1 to paragraph (a): OFAC has posted an archived copy of the
JCPOA SLP on its website (www.treasury.gov/ofac) for reference
purposes.
(b) Nothing in paragraph (a) of this section authorizes the
exportation, reexportation, sale, or supply, directly or indirectly, of
any goods or technology to Iran, the Government of Iran, an Iranian
financial institution, or any other person whose property and interests
in property are blocked pursuant to Sec. 560.211.
(c) For purposes of this section, the term ``contingent contract''
means a contract where the performance of the contract is made
expressly contingent upon the issuance of a specific license by the
Office of Foreign Assets Control authorizing the activities to be
performed. For purposes of this section, the term ``contingent
contract'' includes executory contracts, executory pro forma invoices,
agreements in principle,
[[Page 30338]]
executory offers capable of acceptance such as bids or proposals in
response to public tenders, binding memoranda of understanding, or any
other similar agreement.
0
5. Add Sec. 560.537 to subpart E to read as follows:
Sec. 560.537 Winding down of transactions relating to foreign
entities owned or controlled by a U.S. person.
(a) Except as provided in paragraph (c) of this section, all
transactions and activities that are ordinarily incident and necessary
to the wind down of the following activities are authorized through
11:59 p.m. eastern standard time on November 4, 2018: an entity owned
or controlled by a United States person and established or maintained
outside the United States (a ``U.S.-owned or -controlled foreign
entity'') engaging in transactions, directly or indirectly, with the
Government of Iran or any person subject to the jurisdiction of the
Government of Iran that would otherwise be prohibited by Sec. 560.215.
(b) All transactions and activities that are ordinarily incident
and necessary to the wind down of the following activities are
authorized through 11:59 p.m. eastern standard time on November 4,
2018: A United States person engaging in the following:
(1) Activities related to the establishment or alteration of
operating policies and procedures of a United States entity or a U.S.-
owned or -controlled foreign entity, to the extent necessary to allow a
U.S.-owned or -controlled foreign entity to engage in transactions
authorized in paragraph (a) of this section; and
(2) Activities to make available to those foreign entities that the
U.S. person owns or controls any automated and globally integrated
computer, accounting, email, telecommunications, or other business
support system, platform, database, application, or server necessary to
store, collect, transmit, generate, or otherwise process documents or
information related to transactions authorized in paragraph (a) of this
section.
Note 1 to paragraph (b): See Sec. 560.208 for prohibitions on
facilitation by United States persons, which remain in effect, with
the exception of activities authorized in paragraph (b) of this
section.
(c) Paragraph (a) of this section does not authorize transactions
involving:
(1) The exportation, reexportation, sale, or supply, directly or
indirectly, from the United States of any goods, technology, or
services prohibited by Sec. 560.204 or the reexportation from a third
country of any goods, technology, or services prohibited by Sec.
560.205;
(2) Any transfer of funds to, from, or through a United States
depository institution or a United States-registered broker or dealer
in securities;
(3) Any person on OFAC's list of Specially Designated Nationals and
Blocked Persons (SDN List), or any activity that would be prohibited by
any part of 31 CFR chapter V other than part 560 if engaged in by a
United States person or in the United States;
(4) Any person identified on the List of Foreign Sanctions Evaders
pursuant to Executive Order 13608;
(5) Any activity involving any item (including information) subject
to the Export Administration Regulations, 15 CFR parts 730 through 774
(EAR), that is prohibited by, or otherwise requires a license under,
part 744 of the EAR; or participation in any transaction involving a
person whose export privileges have been denied pursuant to part 764 or
766 of the EAR, without authorization from the Department of Commerce;
(6) Any military, paramilitary, intelligence, or law enforcement
entity of the Government of Iran, or any official, agent, or affiliate
thereof;
(7) Any activity that is sanctionable under Executive Order 12938
or 13382 (relating to Iran's proliferation of weapons of mass
destruction and their means of delivery, including ballistic missiles);
Executive Order 13224 (relating to international terrorism); Executive
Order 13572 or 13582 (relating to Syria); Executive Order 13611
(relating to Yemen); or Executive Order 13553 or 13606, or section 2 or
3 of Executive Order 13628 (relating to Iran's commission of human
rights abuses against its citizens); or
(8) Any nuclear activity involving Iran that is subject to the
procurement channel established pursuant to paragraph 16 of the United
Nations Security Council Resolution 2231 (2015) and Section 6 of Annex
IV to the Joint Comprehensive Plan of Action of July 14, 2015 and that
has not been approved through that procurement channel process.
(d)(1) For purposes of paragraph (b)(2) of this section, the term
``automated'' refers to a computer, accounting, email,
telecommunications, or other business support system, platform,
database, application, or server that operates passively and without
human intervention to facilitate the flow of data between and among the
United States person and its owned or controlled foreign entities.
(2) For purposes of paragraph (b)(2) of this section, the term
``globally integrated'' refers to a computer, accounting, email,
telecommunications, or other business support system, platform,
database, application, or server that is available to, and in general
use by, the United States person's global organization, including the
United States person and its owned or controlled foreign entities.
(3) Paragraph (b)(2) of this section does not authorize the use of
any automated computer, accounting, email, telecommunications, or other
business support system, platform, database, application, or server in
connection with any transfer of funds to, from, or through a United
States depository institution or a United States-registered broker or
dealer in securities.
Dated: June 25, 2018.
Andrea Gacki,
Acting Director, Office of Foreign Assets Control.
[FR Doc. 2018-13939 Filed 6-27-18; 8:45 am]
BILLING CODE 4810-AL-P