[Federal Register Volume 64, Number 147 (Monday, August 2, 1999)]
[Rules and Regulations]
[Pages 41784-41794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19628]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Parts 538, 550 and 560
Sudanese Sanctions Regulations; Libyan Sanctions Regulations;
Iranian Transactions Regulations: Licensing of Commercial Sales of
Agricultural Commodities and Products, Medicine, and Medical Equipment
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule; amendments.
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SUMMARY: The Treasury Department is amending the Sudanese Sanctions
Regulations, the Libyan Sanctions Regulations, and the Iranian
Transactions Regulations to add statements of licensing policy with
respect to commercial sales of agricultural commodities and products,
medicine, and medical equipment.
EFFECTIVE DATE: July 27, 1999.
FOR FURTHER INFORMATION CONTACT: Steven I. Pinter, Chief of Licensing
(tel.: 202/622-2480) or William B. Hoffman, Chief Counsel (tel.: 202/
622-2410), Office of Foreign Assets Control, U.S.
[[Page 41785]]
Treasury Department, Washington, DC 20220.
SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability
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FedWorld bulletin board. By modem, dial 703/321-8020, and select self-
expanding file ``T11FR00.EXE'' in TEL. For Internet access, use one of
the following protocols: Telnet = fedworld.gov (192.239.93.3); World
Wide Web (Home Page) = http://www.fedworld.gov; FTP = ftp.fedworld.gov
(192.239.92.205). Additional information concerning the programs of the
Office of Foreign Assets Control is available for downloading from the
Office's Internet Home Page: http://www.treas.gov/ofac, or in fax form
through the Office's 24-hour fax-on-demand service: call 202/622-0077
using a fax machine, fax modem, or (within the United States) a touch-
tone telephone.
Background
On April 28, 1999, President Clinton announced that existing
unilateral economic sanctions programs would be amended to modify
licensing policies to permit case-by-case review of specific proposals
for the commercial sale of agricultural commodities and products, as
well as medicine and medical equipment, where the United States
Government has the discretion to do so. He further announced that the
Administration was developing country-specific licensing criteria to
guide the case-by-case review process so that governments subject to
sanctions do not gain unjustified or unwarranted benefits from such
sales. To implement this policy, the Treasury Department's Office of
Foreign Assets Control (``OFAC'') is amending the Sudanese Sanctions
Regulations, 31 CFR part 538 (the ``SSR''), the Libyan Sanctions
Regulations, 31 CFR part 550 (the ``LSR''), and the Iranian
Transactions Regulations, 31 CFR part 560 (the ``ITR'') (collectively,
the ``Regulations''), to make available both general and specific
licenses governing commercial sales of such goods.
This final rule deals with commercial sales to Sudan, Libya and
Iran (the ``target countries'') of agricultural commodities and
products intended for ultimate consumption in a target country as food
by humans (including live animals, raw, processed and packaged foods)
or animals (including animal feeds); as seeds for food crops; or as
reproductive materials (such as live animals, fertilized eggs, embryos
and semen) for the production of food animals. It also deals with
commercial sales of medicines (including those administered by
injection) and medical equipment for use in the target countries, if
those medicines and medical equipment are not listed on the Commerce
Control List in the Export Administration Regulations, 15 CFR part 774,
supplement no. 1 (excluding items classified EAR 99), as of the date of
exportation or reexportation. Regulations, Secs. 538.523(a), 550.569(a)
and 560.530(a).
Licensing of commercial sales. The amendments authorize two tracks
for commercial sales of these goods. First, an OFAC general license
permits sellers to negotiate and sign executory contracts for
commercial sales and exportation or reexportation of any of these
agricultural or medical items to the target countries or their
governments. Performance under such executory contracts must made be
contingent upon receipt of an OFAC license. After review of an
executory contract, OFAC may authorize its performance by specific
license where OFAC finds the contract terms consistent with the
licensing policy in this final rule. Regulations, Secs. 538.523,
550.569 and 560.530. Second, persons wishing to make commercial sales
of certain bulk agricultural commodities to the target countries or
their governments may apply for specific licenses that permit future
entry into and performance of contracts for those commodities. OFAC
will issue a specific license for the proposed bulk agricultural
commodity sales and exportation and reexportation if it finds the
proposal set forth in the application consistent with the licensing
policy in this final rule. Regulations, Sec. 538.524 and SSR, appendix
A; Sec. 550.570 and LSR, appendix A; Sec. 560.531 and ITR, appendix B.
In either case, all sales to the target countries must comply with a
series of requirements intended to ensure that such sales do not
improperly benefit the target countries' governments.
Required contract terms for executory contracts. In addition to the
requirements set forth below in Required contract terms in general,
executory contracts submitted to OFAC for specific licensing must
disclose all parties with an interest in the sales transaction,
including identification of a purchasing agent's principals at the
wholesale level, if any; set forth all terms of sale (e.g., purchase
price, quantity, date of shipment, financing), except that dates for
contract performance may be made dependent upon the date OFAC issues a
specific license; and ensure that exports and reexports of any goods,
technology or services are in compliance with license application
requirements of other Federal agencies. Regulations, Secs. 538.523(b),
550.569(b) and 560.530(b).
Required contract terms for bulk agricultural commodities
contracts. Contracts entered into pursuant to an OFAC specific license
for bulk agricultural commodity sales must meet all of the requirements
set forth below in Required contract terms in general, and may only
cover commercial sales of the bulk agricultural commodities listed in
the appendices to the Regulations. Regulations, Secs. 538.524(b)(1),
550.570(b)(1) and 560.531(b)(1).
Required contract terms in general. Contracts for commercial sales
licensed pursuant to this final rule must, in addition to the
applicable requirements noted above, comply with the following
conditions. The contracts must disclose the purchasers, including (for
sales through persons in third countries) those to whom goods are to be
resold, which may only be (1) private individuals in the target
countries who are acting for their own accounts, (2) nongovernmental
entities in the target countries, (3) target-country governmental
procurement bodies identified by OFAC as not being affiliated with the
coercive organs of the state, or (4) persons in third countries
purchasing specifically for resale to any of the foregoing. (A listing
of the procurement bodies identified by OFAC as not being affiliated
with the coercive organs of the state can be found on OFAC's Web site
at http://www.treas.gov/ofac or OFAC's fax-on-demand service at 202/
622-0077.) Persons named in OFAC's list of blocked persons, specially
designated nationals, specially designated terrorists, foreign
terrorist organizations, and specially designated narcotics traffickers
(31 CFR chapter V, appendix A) or of financial institutions owned or
controlled by the government of Iran (ITR, appendix A) are not eligible
purchasers. All contracts must also provide for sales at prevailing
market
[[Page 41786]]
prices and with payment terms and financing consistent with the
policies set forth below in Payment and financing terms. Regulations,
Secs. 538.523 and 538.524(b); 550.569 and 550.570(b); 560.530 and
560.531(b).
Recordkeeping and reporting requirements. In addition, full records
of all transactions pursuant to OFAC licenses must be maintained for a
minimum of 5 years after each transaction, and reports relating to the
transactions must be provided to OFAC upon demand to ensure compliance
with all licensing requirements. Regulations, Secs. 538.523(e),
538.524(c); 550.569(e), 550.570(c); 560.530(e), 560.531(c); 501.601 and
501.602.
Payment and financing terms. Certain payment and financing terms
for commercial sales of agricultural or medical items to the target
countries or their governments are authorized by general license. These
include payment of cash in advance, sales on open account (so long as
the seller does not discount or otherwise transfer the account
receivable created by the sale), and financing by third-country
financial institutions (not U.S. persons nor target-country government
banks). U.S. financial institutions are authorized by general license
to advise or confirm such third-country financial institution
financing. Regulations, Secs. 538.525(a), 550.571(a) and 560.532(a). In
addition, specific licenses may be issued for payment terms and trade
financing not permitted by general license. Regulations,
Secs. 538.525(b), 550.571(b) and 560.532(b). Payments through the U.S.
banking system must reference the applicable OFAC license to avoid
being stopped or blocked in transit.
Brokering of target country purchases. This final rule permits, by
general license, U.S. persons to broker sales of bulk agricultural
commodities by U.S. persons destined for the target countries or their
governments. For those sales, brokerage is authorized only if the sales
meet all applicable requirements of this final rule for bulk
agricultural commodity sales. To broker sales of bulk agricultural
commodities by non-U.S. persons to the target countries or their
governments, the broker must first obtain a specific license from OFAC.
Licenses for brokerage are limited to sales of items listed in the bulk
agricultural commodities appendices to the Regulations made to target
country persons eligible to purchase bulk agricultural commodities from
U.S. persons pursuant to paragraphs (b)(2) and (e) of Secs. 538.524,
550.570 and 560.531 of the Regulations. Further, if the brokered sales
are subject to Federal licensing requirements, the sales must be made
contingent upon prior authorization of the relevant Federal agency.
Brokerage fees may not be paid from a blocked account of the Government
of Sudan or Libya or from an Iranian account as defined in 31 CFR
560.530. Finally, brokers of any sales subject to this final rule must
comply with the OFAC recordkeeping and reporting requirements in
Secs. 501.601 and 501.602 of 31 CFR chapter V. Regulations,
Secs. 538.526, 550.572 and 560.533.
Incidental transactions. The SSR are interpreted to permit most
transactions incidental to licensed transactions. SSR, Sec. 538.405.
This final rule amends the LSR and ITR to provide similar
interpretations to that of the SSR, and to clarify in all three
provisions that OFAC does not interpret the following as permitted
incidental transactions: transportation services to or from the target
countries except the discharging of licensed or exempt cargo;
distribution or leasing of containers in the target countries after
performing transportation services; or financing agricultural and
medical sales described in this final rule. Regulations, Secs. 538.405,
550.405 and 560.405. (General licenses for certain financing terms and
statements of licensing policy with respect to alternative terms are
noted above.) Travel-related transactions are not restricted in the SSR
or ITR. This final rule amends the LSR to authorize travel-related
transactions for the negotiation of executory contracts or bulk
agricultural commodity contracts. Specific licensing is required for
installation and servicing of medical equipment sold to Libya pursuant
to executory contracts. LSR, Sec. 550.573.
Paperwork Reduction Act
As authorized in the Administrative Procedure Act (5 U.S.C.
553)(the ``APA''), this final rule is amending the Regulations is being
issued without prior notice and public comment procedure. 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 approved by the Office of
Management and Budget (``OMB'') under control number 1505-0164. An
agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the collection of
information displays a valid control number.
Because the Regulations involve a foreign affairs function,
Executive Order 12866 and the provisions of the APA requiring notice of
proposed rulemaking, opportunity for public participation, and delay in
effective date, are inapplicable. Because no notice of proposed
rulemaking is required for this rule, the Regulatory Flexibility Act (5
U.S.C. 601-612) does not apply.
List of Subjects
31 CFR Part 538
Administrative practice and procedure, Agricultural commodities,
Banks, banking, Blocking of assets, Drugs, Exports, Foreign trade,
Humanitarian aid, Imports, Medical devices, Penalties, Reporting and
recordkeeping requirements, Specially designated nationals, Sudan,
Terrorism, Transportation.
31 CFR Part 550
Administrative practice and procedure, Agricultural commodities,
Banks, banking, Blocking of assets, Drugs, Exports, Foreign investment,
Foreign trade, Government of Libya, Imports, Libya, Loans, Medical
devices, Penalties, Reporting and recordkeeping requirements,
Securities, Services, Specially designated nationals, Terrorism, Travel
restrictions.
31 CFR Part 560
Administrative practice and procedure, Agricultural commodities,
Banks, banking, Drugs, Exports, Foreign trade, Imports, Information,
Investments, Iran, Loans, Medical devices, Penalties, Reporting and
recordkeeping requirements, Services, Specially designated nationals,
Terrorism, Transportation.
For the reasons set forth in the preamble, 31 CFR parts 538, 550
and 560 are amended as set forth below:
PART 538--SUDANESE SANCTIONS REGULATIONS
1. The authority citation for part 538 continues to read as
follows:
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651,
1701-1706; E.O. 13067, 62 FR 59989, 3 CFR, 1997 Comp., p. 230.
Subpart D--Interpretations
2. Section 538.405 is revised to read as follows:
Sec. 538.405 Transactions incidental to a licensed transaction
authorized.
Any transaction ordinarily incident to a licensed transaction and
necessary to give effect thereto is also authorized, except:
[[Page 41787]]
(a) A transaction by an unlicensed Sudanese governmental entity or
involving a debit to a blocked account or a transfer of blocked
property not explicitly authorized within the terms of the license;
(b) Provision of any transportation services to or from Sudan not
explicitly authorized in or pursuant to this part other than
discharging licensed or exempt cargo there;
(c) Distribution or leasing in Sudan of any containers or similar
goods owned or controlled by United States persons after the
performance of transportation services to Sudan; and
(d) Financing of licensed sales for exportation or reexportation of
agricultural commodities or products, medicine, or medical equipment to
Sudan or the Government of Sudan. See Sec. 538.525.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
3. Section 538.523 is added to subpart E to read as follows:
Sec. 538.523 Commercial sales and exportation of agricultural
commodities and products, medicine, and medical equipment.
(a) General license for executory contracts. Except as provided in
paragraph (c) of this section, entry into executory contracts is
authorized for the following transactions with individuals in Sudan
acting for their own account, nongovernmental entities in Sudan, or
procurement bodies of the Government of Sudan identified by the Office
of Foreign Assets Control as not being affiliated with the coercive
organs of the state, or with persons in third countries purchasing
specifically for resale to any of the foregoing, provided that
performance of the executory contracts (including any preparatory
activities, payments or deposits related to such executory contracts)
is contingent upon the prior authorization of the Office of Foreign
Assets Control in or pursuant to this part:
(1) The sale of agricultural commodities and products, if those
commodities and products are intended for ultimate consumption in Sudan
as:
(i) Food by humans (including live animals, raw, processed and
packaged foods) or animals (including animal feeds);
(ii) Seeds for food crops; and
(iii) Reproductive materials (such as live animals, fertilized
eggs, embryos and semen) for the production of food animals; and
(2) The sale of medicines (including those administered by
injection) and medical equipment for use in Sudan, if those medicines
and medical equipment are not listed on the Commerce Control List in
the Export Administration Regulations, 15 CFR part 774, supplement no.
1 (excluding items classified EAR99), as of the date of exportation or
reexportation. (EAR99 items may in certain instances require a license
from the Department of Commerce, Bureau of Export Administration. See,
e.g., 15 CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10.)
Note to paragraph (a) of Sec. 538.523. See Sec. 538.524 with
respect to the availability of specific licenses for sales of
certain bulk agricultural commodities for exportation or
reexportation to Sudan or the Government of Sudan.
(b) Required terms of executory contracts. The authorization
contained in paragraph (a) of this section applies only to executory
contracts that:
(1) Disclose all parties with an interest in the sales transaction.
If the goods are being sold to a purchasing agent in Sudan, the
executory contract must identify the agent's principals at the
wholesale level for whom the purchase is being made;
(2) Provide only for sales at prevailing market prices;
(3) Set forth all terms of sale (e.g., purchase price, quantity,
date of shipment, financing), except that dates for contract
performance may be made dependent upon the date a specific license
pursuant to paragraph (d) of this section is obtained from the Office
of Foreign Assets Control;
(4) Make any performance involving the exportation or reexportation
of any goods, technology (including technical data, software, or other
information) or services that are subject to license application
requirements of another Federal agency contingent upon the prior
authorization of that agency. (For example, EAR99 items may in certain
instances require a license from the Department of Commerce, Bureau of
Export Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through
744.4, 744.7, and 744.10; see also 22 CFR 123.9); and
(5) Provide for payment terms consistent with the provisions of
Sec. 538.525.
(c) Ineligible purchasers. Nothing in this section permits entry
into or performance of a sales contract with a person specifically
named in appendix A to this chapter V or in appendix A to part 560 of
this chapter, other than a procurement body of the Government of Sudan
identified by the Office of Foreign Assets Control as not being
affiliated with the coercive organs of the state.
Note to paragraph (c) of Sec. 538.523. Information on ineligible
purchasers and eligible procurement bodies will be published in the
Federal Register and may be found on the Office of Foreign Assets
Control's Internet site: http://www.treas.gov/ofac, or on its fax-
on-demand system: 202/622-0077.
(d) Specific licenses for performance under executory contracts.
Specific licenses may be issued on a case-by-case basis to permit the
performance of executory contracts meeting the requirements of
paragraphs (a) and (b) of this section. See Sec. 501.801(b) of this
chapter with respect to specific licensing procedures.
(e) Recordkeeping and reporting requirements. Attention is drawn to
the recordkeeping, retention, and reporting requirements of
Secs. 501.601 and 501.602.
4. Section 538.524 is added to subpart E to read as follows:
Sec. 538.524 Commercial sales and exportation of certain bulk
agricultural commodities.
(a) Sales of bulk agricultural commodities by licensed sellers.
Specific licenses may be issued on a case-by-case basis to permit the
sale and exportation or reexportation to persons in Sudan or the
Government of Sudan of bulk agricultural commodities intended for
ultimate consumption in Sudan as food by humans or animals (including
animal feeds) and seeds for food crops, for sales meeting all
requirements of paragraph (b) of this section.
(b) Required contract terms for commercial sales of bulk
agricultural commodities. Specific licenses issued pursuant to this
section will authorize entry into and performance only of contracts
that:
(1) Provide for the sale and exportation or reexportation only of
bulk agricultural commodities listed in appendix A to this part 538;
(2) Fully identify the purchasers of the bulk agricultural
commodities, including (for sales through persons in third countries)
those to whom the commodities are to be resold, and do not include as a
purchaser any person in Sudan or any person within the definition of
the term Government of Sudan other than:
(i) A private individual in Sudan acting for his or her own
account;
(ii) A nongovernmental entity in Sudan; or
(iii) A procurement body of the Government of Sudan identified by
the Office of Foreign Assets Control as not being affiliated with the
coercive organs of the state;
(3) Provide only for sales at prevailing market prices;
[[Page 41788]]
(4) Make any performance involving the exportation or reexportation
of any goods, technology (including technical data, software, or other
information) or services that are subject to license application
requirements of another Federal agency contingent upon the prior
authorization of that agency. (For example, EAR99 items may in certain
instances require a license from the Department of Commerce, Bureau of
Export Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through
744.4, 744.7, and 744.10; see also 22 CFR 123.9); and
(5) Provide for payment terms consistent with the provisions of
Sec. 538.525.
(c) Recordkeeping and reporting requirements. Attention is drawn to
the recordkeeping, retention, and reporting requirements of
Secs. 501.601 and 501.602.
(d) Other commodities and products. Requests may be made to the
Office of Foreign Assets Control for specific licenses analogous to
those available pursuant to paragraph (a) of this section where the
applicant demonstrates to the satisfaction of the Office of Foreign
Assets Control that, in light of industry practices, sales of the
particular agricultural commodity or product, medicine, or medical
equipment are impracticable under the executory contract licensing
procedures contained in Sec. 538.523.
(e) Ineligible purchasers. Nothing in this section permits entry
into or performance of a sales contract with a person specifically
named in appendix A to this chapter V or in appendix A to part 560 of
this chapter, other than a procurement body of the Government of Sudan
identified by the Office of Foreign Assets Control as not being
affiliated with the coercive organs of the state.
Note to paragraph (e) of Sec. 538.524. Information on ineligible
purchasers and eligible procurement bodies will be published in the
Federal Register and may be found on the Office of Foreign Assets
Control's Internet site: http://www.treas.gov/ofac, or on its fax-
on-demand system: 202/622-0077.
5. Section 538.525 is added to subpart E to read as follows:
Sec. 538.525 Payment for and financing of commercial sales of
agricultural commodities and products, medicine, and medical equipment.
(a) General license for payment terms. The following payment terms
for sales of agricultural commodities and products, medicine, and
medical equipment pursuant to Secs. 538.523 and 538.524 are authorized:
(1) Payment of cash in advance;
(2) Sales on open account, provided that the account receivable may
not be transferred by the person extending the credit; or
(3) Financing by third-country financial institutions that are
neither United States persons nor Government of Sudan entities. Such
financing may be confirmed or advised by U.S. financial institutions.
(b) Specific licenses for alternate payment terms. Specific
licenses may be issued on a case-by-case basis for payment terms and
trade financing not authorized by the general license in paragraph (a)
of this section for sales pursuant to Secs. 538.523 and 538.524, except
that such financing may not be provided by the Government of Sudan. See
Sec. 501.801(b) of this chapter for specific licensing procedures.
(c) No debits to blocked accounts. Nothing in this section
authorizes payment terms or trade financing involving a debit to an
account of the Government of Sudan blocked pursuant to this part.
(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, 538.524, or 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.
6. Section 538.526 is added to subpart E to read as follows:
Sec. 538.526 Brokering sales of bulk agricultural commodities.
(a) General license for brokering sales by U.S. persons. United
States persons are authorized to broker the sale and exportation or
reexportation by United States persons of the bulk agricultural
commodities listed in appendix A to this part 538 to individuals in
Sudan acting for their own account, nongovernmental entities in Sudan,
procurement bodies of the Government of Sudan identified by the Office
of Foreign Assets Control as not being affiliated with the coercive
organs of the state, or persons in third countries purchasing
specifically for resale to any of the foregoing, provided that the
brokered sales meet all conditions of Sec. 538.524.
(b) Specific licensing for brokering sales by non-U.S. persons.
Specific licenses may be issued on a case-by-case basis to permit
United States persons to broker the sale and exportation or
reexportation of bulk agricultural commodities by non-United States
persons to persons in Sudan or the Government of Sudan. Specific
licenses issued pursuant to this section will authorize the brokerage
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 paragraphs (b)(2) and
(e) of Sec. 538.524;
(3) Require that any performance that is subject to license
application requirements of another Federal agency be contingent upon
the prior authorization of that agency. (For example, items classified
EAR99 under the Export Administration Regulations, 15 CFR parts 730
through 774, may in certain instances require a license from the
Department of Commerce, Bureau of Export Administration. See, e.g., 15
CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10; see also 22
CFR 123.9.)
(c) No debit to blocked accounts. Payment for any brokerage fee
earned pursuant to this section may not involve a debit to an account
blocked pursuant to this part.
(d) Recordkeeping and reporting requirements. Attention is drawn to
the recordkeeping, retention, and reporting requirements of
Secs. 501.601 and 501.602.
7. Appendix A to part 538 is added to read as follows:
Appendix A to Part 538--Bulk Agricultural Commodities
Notes:
1. Appendix A sets forth those agricultural commodities eligible
for the bulk agricultural commodity sales licensing procedures in
Sec. 538.524.
2. Commodities are identified by their classification numbers in
the Harmonized Tariff Schedule of the United States (see 19 U.S.C.
1202) (``HTS'').
------------------------------------------------------------------------
HTS Number Commodity
------------------------------------------------------------------------
1001.10 Durum Wheat
1001.90 Other Wheat and Meslin, including seed, Red Spring
Wheat, White Winter Wheat, ``Canadian'' Western
Red Winter Wheat, Soft White Spring Wheat, and
Wheat not elsewhere specified
1101.00 Wheat or Meslin Flour
1006.10 Rice in the husk (paddy or rough)
1006.20 Husked (brown) Rice
1006.30 Semi-milled or wholly milled Rice, whether or not
polished or glazed
[[Page 41789]]
1006.40 Broken Rice
1102.30 Rice Flour
1103.14 Rice Groats, Meal and Pellets
1002.00 Rye
1003.00 Barley
1004.00 Oats
1007.00 Grain Sorghum
1005.00 Corn (Maize)
0713.31 Dried Beans including Vigna mungo (L.), Hepper,
and Vigna radiata (L.) Wilczek
0713.32 Small red (adzuki) beans
0713.33 Kidney beans, including white pea beans
0713.39 Beans, other
0713.50 Broad beans and horse beans
0713.10 Dried Peas (Pisum sativum)
0713.20 Chickpeas (garbanzos)
0713.40 Lentils
0713.90 Dried leguminous vegetables, shelled, not
elsewhere specified
1201.00 Soybeans, whether or not broken
2304.00 Soybean cake, meal and pellets
1507.10 Soybean oil, crude
1507.90 Soybean oil, other
1514.10 Rapeseed, colza and mustard oil, crude
1514.90 Rapeseed, colza and mustard oil, other
1515.21 Corn (Maize) oil, crude
1515.29 Corn (Maize) oil, other
1512.21 Cottonseed oil, crude
1512.29 Cottonseed oil, other
1517.90 Cottonseed oil, hydrogenated
1508.10 Peanut (ground-nut) oil, crude
1508.90 Peanut (ground-nut) oil, other
1515.50 Sesame oil
1512.11 Sunflower-seed oil, crude
1512.19 Sunflower-seed oil, other
1212.91 Sugar Beets, fresh, chilled, frozen or dried
1212.92 Sugar Cane, fresh, chilled, frozen or dried
1701.11 Cane Sugar, raw, solid form
1701.12 Beet Sugar, raw, solid form
1701.91 Cane or Beet Sugar, solid form, containing added
coloring or flavoring
1701.99 Cane or Beet Sugar, other, not elsewhere specified
------------------------------------------------------------------------
PART 550--LIBYAN SANCTIONS REGULATIONS
1. The authority citation for part 550 is revised to read as
follows:
Authority: 3 U.S.C. 301; 18 U.S.C. 2332d; 22 U.S.C. 287c,
2349aa-8 and 2349aa-9; 31 U.S.C. 321(b); 49 U.S.C. 40106(b); 50
U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28
U.S.C. 2461 note); E.O. 12543, 51 FR 875, 3 CFR, 1986 Comp., p. 181;
E.O. 12544, 51 FR 1235, 3 CFR, 1986 Comp., p. 183; E.O. 12801, 57 FR
14319, 3 CFR, 1992 Comp., p. 294.
2. Section 550.405 is revised to read as follows:
Sec. 550.405 Transactions incidental to a licensed transaction
authorized.
Any transaction ordinarily incident to a licensed transaction and
necessary to give effect thereto is also authorized, except:
(a) A transaction by an unlicensed Libyan governmental entity or
involving a debit to a blocked account or a transfer of blocked
property not explicitly authorized within the terms of the license;
(b) Provision of any transportation services to or from Libya not
explicitly authorized in or pursuant to this part other than
discharging licensed or exempt cargo there;
(c) Distribution or leasing in Libya of any containers or similar
goods owned or controlled by United States persons after the
performance of transportation services to Libya; and
(d) Financing of licensed sales for exportation or reexportation of
agricultural commodities or products, medicine or medical equipment to
Libya or the Government of Libya. See Sec. 550.571.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
3. Section 550.569 is added to subpart E to read as follows:
Sec. 550.569 Commercial sales of agricultural commodities and
products, medicine, and medical equipment.
(a) General license for executory contracts. Entry into executory
contracts is authorized for the following transactions with individuals
in Libya acting for their own account, nongovernmental entities in
Libya or procurement bodies of the Government of Libya identified by
the Office of Foreign Assets Control as not being affiliated with the
coercive organs of the state, or with persons in third countries
purchasing specifically for resale to any of the foregoing, provided
that performance of the executory contracts (including any preparatory
activities, payments or deposits related to such executory contracts)
is contingent upon the prior authorization of the Office of Foreign
Assets Control in or pursuant to this part:
(1) The sale of agricultural commodities and products, if those
commodities and products are intended for ultimate consumption in Libya
as:
(i) Food by humans (including live animals, raw, processed and
packaged foods) or animals (including animal feeds);
(ii) Seeds for food crops; and
(iii) Reproductive materials (such as live animals, fertilized
eggs, embryos and semen) for the production of food animals; and
(2) The sale of medicines (including those administered by
injection) and medical equipment for use in Libya, if those medicines
and medical equipment are not listed on the Commerce Control List in
the Export Administration Regulations, 15 CFR part 774, supplement no.
1 (excluding items classified EAR99), as of the date of exportation or
reexportation. (EAR99 items may in certain instances require a license
from the Department of Commerce, Bureau of Export Administration. See,
e.g., 15 CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10.)
Note to paragraph (a) of Sec. 550.569: See Sec. 550.570 with
respect to the availability of specific licenses for sales of
certain bulk agricultural commodities for exportation or
reexportation to Libya or the Government of Libya.
(b) Required terms of executory contracts. The authorization
contained in paragraph (a) of this section applies only to executory
contracts that:
(1) Disclose all parties with an interest in the sales transaction.
If the goods are being sold to a purchasing agent in Libya, the
executory contract must identify the agent's principals at the
wholesale level for whom the purchase is being made;
(2) Provide only for sales at prevailing market prices;
(3) Set forth all terms of sale (e.g., purchase price, quantity,
date of shipment, financing), except that dates for contract
performance may be made dependent upon the date a specific license
pursuant to paragraph (d) of this section is obtained from the Office
of Foreign Assets Control;
(4) Make any performance involving the exportation or reexportation
of any goods, technology (including technical data, software, or other
information) or services that are subject to license application
requirements of another Federal agency contingent upon the prior
authorization of that agency. (For example, items classified EAR99
under the Export Administration Regulations, 15 CFR parts 730 through
774, may in certain instances require a license from the Department of
Commerce, Bureau of Export Administration. See, e.g., 15 CFR
736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10; see also 22 CFR
123.9); and
(5) Provide for payment terms consistent with the provisions of
Sec. 550.571.
(c) Ineligible purchasers. Nothing in this section permits entry
into or performance of a sales contract with a person specifically
named in appendix A to this chapter V or in appendix A to
[[Page 41790]]
part 560 of this chapter, other than a procurement body of the
Government of Libya identified by the Office of Foreign Assets Control
as not being affiliated with the coercive organs of the state.
Note to paragraph (c) of Sec. 550.569. Information on ineligible
purchasers and eligible procurement bodies will be published in the
Federal Register and may be found on the Office of Foreign Assets
Control's Internet site: http://www.treas.gov/ofac, or on its fax-
on-demand system: 202/622-0077.
(d) Specific licenses for performance under executory contracts.
Specific licenses may be issued on a case-by-case basis to permit the
performance of executory contracts meeting the requirements of
paragraphs (a) and (b) of this section. See Sec. 501.801(b) of this
chapter with respect to specific licensing procedures.
(e) Recordkeeping and reporting requirements. Attention is drawn to
the recordkeeping, retention, and reporting requirements of
Secs. 501.601 and 501.602.
4. Section 550.570 is added to subpart E to read as follows:
Sec. 550.570 Commercial sales of certain bulk agricultural
commodities.
(a) Sales of bulk agricultural commodities by licensed sellers.
Specific licenses may be issued on a case-by-case basis to permit the
sale and exportation or reexportation to persons in Libya or the
Government of Libya of bulk agricultural commodities intended for
ultimate consumption in Libya as food by humans or animals (including
animal feeds) and seeds for food crops, for sales meeting all
requirements of paragraph (b) of this section.
(b) Required contract terms for commercial sales of bulk
agricultural commodities. Specific licenses issued pursuant to this
section will authorize entry into and performance only of contracts
that:
(1) Provide for the sale and exportation or reexportation only of
bulk agricultural commodities listed in appendix A to this part 550;
(2) Fully identify the purchasers of the bulk agricultural
commodities, including (for sales through persons in third countries)
those to whom the commodities are to be resold, and do not include as a
purchaser any person in Libya or any person within the definition of
the term Government of Libya other than:
(i) A private individual in Libya acting for his or her own
account;
(ii) A nongovernmental entity in Libya; or
(iii) A procurement body of the Government of Libya identified by
the Office of Foreign Assets Control as not being affiliated with the
coercive organs of the state;
(3) Provide only for sales at prevailing market prices;
(4) Make any performance involving the exportation or reexportation
of any goods, technology (including technical data, software, or other
information) or services that are subject to license application
requirements of another Federal agency contingent upon the prior
authorization of that agency. (For example, EAR99 items may in certain
instances require a license from the Department of Commerce, Bureau of
Export Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through
744.4, 744.7, and 744.10; see also 22 CFR 123.9); and
(5) Provide for payment terms consistent with the provisions of
Sec. 550.571.
(c) Recordkeeping and reporting requirements. Attention is drawn to
the recordkeeping, retention, and reporting requirements of
Secs. 501.601 and 501.602.
(d) Other commodities and products. Requests may be made to the
Office of Foreign Assets Control for specific licenses analogous to
those available pursuant to paragraph (a) of this section where the
applicant demonstrates to the satisfaction of the Office of Foreign
Assets Control that, in light of industry practices, sales of the
particular agricultural commodity or product, medicine, or medical
equipment are impracticable under the executory contract licensing
procedures contained in Sec. 550.569.
(e) Ineligible purchasers. Nothing in this section permits entry
into or performance of a sales contract with a person specifically
named in appendix A to this chapter V or in appendix A to part 560 of
this chapter, other than a procurement body of the Government of Libya
identified by the Office of Foreign Assets Control as not being
affiliated with the coercive organs of the state.
Note to paragraph (e) of Sec. 550.570. Information on ineligible
purchasers and eligible procurement bodies will be published in the
Federal Register and may be found on the Office of Foreign Assets
Control's Internet site: http://www.treas.gov/ofac, or on its fax-
on-demand system: 202/622-0077.
5. Section 550.571 is added to subpart E to read as follows:
Sec. 550.571 Payment for and financing of commercial sales of
agricultural commodities and products, medicine, and medical equipment.
(a) General license for payment terms. The following payment terms
for sales of agricultural commodities and products, medicine, and
medical equipment pursuant to Secs. 550.569 and 550.570 are authorized:
(1) Payment of cash in advance;
(2) Sales on open account, provided that the account receivable may
not be transferred by the person extending the credit; or
(3) Financing by third-country financial institutions that are
neither United States persons nor Government of Libya entities. Such
financing may be confirmed or advised by U.S. financial institutions.
(b) Specific licenses for alternate payment terms. Specific
licenses may be issued on a case-by-case basis for payment terms and
trade financing not authorized by the general license in paragraph (a)
of this section for sales pursuant to Secs. 550.569 and 550.570, except
that such financing may not be provided by the Government of Libya. See
Sec. 501.801(b) of this chapter for specific licensing procedures.
(c) No debits to blocked accounts. Nothing in this section
authorizes payment terms or trade financing involving a debit to an
account of the Government of Libya blocked pursuant to this part.
(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, 550.570, or 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.
6. Section 550.572 is added to subpart E to read as follows:
Sec. 550.572 Brokering sales of bulk agricultural commodities.
(a) General license for brokering sales by U.S. persons. United
States persons are authorized to broker the sale and exportation or
reexportation by United States persons of the bulk agricultural
commodities listed in appendix A to this part 550 to individuals in
Libya acting for their own account, nongovernmental entities in Libya,
procurement bodies of the Government of Libya identified by the Office
of Foreign Assets Control as not being affiliated with the coercive
organs of the state, or persons in third countries purchasing
specifically for resale to any of the foregoing, provided that the
[[Page 41791]]
brokered sales meet all conditions of Sec. 550.570.
(b) Specific licensing for brokering sales by non-U.S. persons.
Specific licenses may be issued on a case-by-case basis to permit
United States persons to broker the sale and exportation or
reexportation of bulk agricultural commodities by non-United States
persons to persons in Libya or the Government of Libya. Specific
licenses issued pursuant to this section will authorize the brokerage
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 paragraphs (b)(2) and
(e) of Sec. 550.570;
(3) Require that any performance that is subject to license
application requirements of another Federal agency be contingent upon
the prior authorization of that agency. (For example, items classified
EAR99 under the Export Administration Regulations, 15 CFR parts 730
through 774, may in certain instances require a license from the
Department of Commerce, Bureau of Export Administration. See, e.g., 15
CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10; see also 22
CFR 123.9.)
(c) No debit to blocked accounts. Payment for any brokerage fee
earned pursuant to this section may not involve a debit to an account
blocked pursuant to this part.
(d) Recordkeeping and reporting requirements. Attention is drawn to
the recordkeeping, retention, and reporting requirements of
Secs. 501.601 and 501.602.
7. Section 550.573 is added to subpart E to read as follows:
Sec. 550.573 Travel transactions in connection with licensed sales of
agricultural commodities and products, medicine, and medical products.
Travel transactions to, from, and within Libya for the sole purpose
of negotiating contracts authorized by Sec. 550.569 or Sec. 550.570 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.
8. Appendix A to part 550 is added to read as follows:
Appendix A to Part 550--Bulk Agricultural Commodities
Notes:
1. Appendix A sets forth those agricultural commodities eligible
for the bulk agricultural commodity sales licensing procedures in
Sec. 550.570.
2. Commodities are identified by their classification numbers in
the Harmonized Tariff Schedule of the United States (see 19 U.S.C.
1202) (``HTS'').
------------------------------------------------------------------------
HTS Number Commodity
------------------------------------------------------------------------
1001.10 Durum Wheat
1001.90 Other Wheat and Meslin, including seed, Red Spring
Wheat, White Winter Wheat, ``Canadian'' Western
Red Winter Wheat, Soft White Spring Wheat, and
Wheat not elsewhere specified
1101.00 Wheat or Meslin Flour
1006.10 Rice in the husk (paddy or rough)
1006.20 Husked (brown) Rice
1006.30 Semi-milled or wholly milled Rice, whether or not
polished or glazed
1006.40 Broken Rice
1102.30 Rice Flour
1103.14 Rice Groats, Meal and Pellets
1002.00 Rye
1003.00 Barley
1004.00 Oats
1007.00 Grain Sorghum
1005.00 Corn (Maize)
0713.31 Dried Beans including Vigna mungo (L.), Hepper,
and Vigna radiata (L.) Wilczek
0713.32 Small red (adzuki) beans
0713.33 Kidney beans, including white pea beans
0713.39 Beans, other
0713.50 Broad beans and horse beans
0713.10 Dried Peas (Pisum sativum)
0713.20 Chickpeas (garbanzos)
0713.40 Lentils
0713.90 Dried leguminous vegetables, shelled, not
elsewhere specified
1201.00 Soybeans, whether or not broken
2304.00 Soybean cake, meal and pellets
1507.10 Soybean oil, crude
1507.90 Soybean oil, other
1514.10 Rapeseed, colza and mustard oil, crude
1514.90 Rapeseed, colza and mustard oil, other
1515.21 Corn (Maize) oil, crude
1515.29 Corn (Maize) oil, other
1512.21 Cottonseed oil, crude
1512.29 Cottonseed oil, other
1517.90 Cottonseed oil, hydrogenated
1508.10 Peanut (ground-nut) oil, crude
1508.90 Peanut (ground-nut) oil, other
1515.50 Sesame oil
1512.11 Sunflower-seed oil, crude
1512.19 Sunflower-seed oil, other
1212.91 Sugar Beets, fresh, chilled, frozen or dried
1212.92 Sugar Cane, fresh, chilled, frozen or dried
1701.11 Cane Sugar, raw, solid form
1701.12 Beet Sugar, raw, solid form
1701.91 Cane or Beet Sugar, solid form, containing added
coloring or flavoring
1701.99 Cane or Beet Sugar, other, not elsewhere specified
------------------------------------------------------------------------
PART 560--IRANIAN TRANSACTIONS REGULATIONS
1. The authority citation for part 560 continues to read as
follows:
Authority:3 U.S.C. 301; 18 U.S.C. 2332d; 22 U.S.C. 2349aa-9; 31
U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104
Stat. 890 (28 U.S.C. 2461 note); E.O. 12613, 52 FR 41940, 3 CFR,
1987 Comp., p. 256; E.O. 12957, 60 FR 14615, 3 CFR, 1995 Comp., p.
332; E.O. 12959, 60 FR 24757, 3 CFR, 1995 Comp., p. 356; E.O. 13059,
62 FR 44531, 3 CFR, 1997 Comp., p. 217.
Subpart D--Interpretations
2. Section 560.405 is added to subpart D to read as follows:
Sec. 560.405 Transactions incidental to a licensed transaction
authorized.
Any transaction ordinarily incident to a licensed transaction and
necessary to give effect thereto is also authorized, except:
(a) A transaction by an unlicensed Iranian governmental entity or
involving a debit or credit to an Iranian account not explicitly
authorized within the terms of the license;
(b) Provision of any transportation services to or from Iran not
explicitly authorized in or pursuant to this part other than
discharging licensed or exempt cargo there;
(c) Distribution or leasing in Iran of any containers or similar
goods owned or controlled by United States persons after the
performance of transportation services to Iran; and
(d) Financing of licensed sales for exportation or reexportation of
agricultural commodities or products, medicine or medical equipment to
Iran or the Government of Iran. See Sec. 560.532.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
3. Section 560.530 is added to subpart E to read as follows:
Sec. 560.530 Commercial sales of agricultural commodities and
products, medicine, and medical equipment.
(a) General license for executory contracts. Entry into executory
contracts is authorized for the following transactions with
nongovernmental
[[Page 41792]]
entities in Iran or procurement bodies of the Government of Iran not
affiliated with the coercive organs of the state, provided that
performance of the executory contracts (including any preparatory
activities, payments or deposits related to such executory contracts)
is contingent upon the prior authorization of the Office of Foreign
Assets Control in or pursuant to this part:
(1) The sale of agricultural commodities and products, if those
commodities and products are intended for ultimate consumption in Iran
as:
(i) Food by humans (including live animals, raw, processed and
packaged foods) or animals (including animal feeds);
(ii) Seeds for food crops; and
(iii) Reproductive materials (such as live animals, fertilized
eggs, embryos and semen) for the production of food animals; and
(2) The sale of medicines (including those administered by
injection) and medical equipment for use in Iran, if those medicines
and medical equipment are not listed on the Commerce Control List in
the Export Administration Regulations, 15 CFR part 774, supplement no.
1 (excluding items classified EAR99), as of the date of exportation or
reexportation. (EAR99 items may in certain instances require a license
from the Department of Commerce, Bureau of Export Administration. See,
e.g., 15 CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10.)
Note to paragraph (a) of Sec. 560.530. See Sec. 560.531 with
respect to the availability of specific licenses for entry into and
performance of contracts for sales of certain bulk agricultural
commodities.
(b) Required terms of executory contracts. The authorization
contained in paragraph (a) of this section applies only to executory
contracts that:
(1) Disclose all parties with an interest in the sales transaction.
If the goods are being sold to a purchasing agent in Iran, the
executory contract must identify the agent's principals at the
wholesale level for whom the purchase is being made;
(2) Provide only for sales at prevailing market prices;
(3) Set forth all terms of sale (e.g., purchase price, quantity,
date of shipment, financing), except that dates for contract
performance may be made dependent upon the date a specific license
pursuant to paragraph (d) of this section is obtained from the Office
of Foreign Assets Control;
(4) Make any performance involving the exportation or reexportation
of any goods, technology (including technical data, software, or other
information) or services that are subject to license application
requirements of another Federal agency contingent upon the prior
authorization of that agency. (For example, items classified EAR99
under the Export Administration Regulations, 15 CFR parts 730 through
774, may in certain instances require a license from the Department of
Commerce, Bureau of Export Administration. See, e.g., 15 CFR
736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10; see also 22 CFR
123.9); and
(5) Provide for payment terms consistent with the provisions of
Sec. 560.532.
(c) Ineligible purchasers. Nothing in this section permits entry
into or performance of a sales contract with a person specifically
named in appendix A to this chapter V or in appendix A to this part
560, other than a procurement body of the Government of Iran identified
by the Office of Foreign Assets Control as not being affiliated with
the coercive organs of the state.
Note to paragraph (c) of Sec. 560.530. Information on ineligible
purchasers and eligible procurement bodies will be published in the
Federal Register and may be found on the Office of Foreign Assets
Control's Internet site: http://www.treas.gov/ofac, or on its fax-
on-demand system: 202/622-0077.
(d) Specific licenses for performance under executory contracts.
Specific licenses may be issued on a case-by-case basis to permit the
performance of executory contracts meeting the requirements of
paragraphs (a) and (b) of this section. See Sec. 501.801(b) of this
chapter with respect to specific licensing procedures.
(e) Recordkeeping and reporting requirements. Attention is drawn to
the recordkeeping, retention, and reporting requirements of
Secs. 501.601 and 501.602.
4. Section 560.531 is added to subpart E to read as follows:
Sec. 560.531 Commercial sales of certain bulk agricultural
commodities.
(a) Sales of bulk agricultural commodities by licensed sellers.
Specific licenses may be issued on a case-by-case basis to permit the
sale and exportation or reexportation to persons in Iran or the
Government of Iran of bulk agricultural commodities intended for
ultimate consumption in Iran as food by humans or animals (including
animal feeds) and seeds for food crops, for sales meeting all
requirements of paragraph (b) of this section.
(b) Required contract terms for commercial sales of bulk
agricultural commodities. Specific licenses issued pursuant to this
section will authorize entry into and performance only of contracts
that:
(1) Provide for the sale and exportation or reexportation only of
bulk agricultural commodities listed in appendix B to this part 560;
(2) Fully identify the purchasers of the bulk agricultural
commodities, including (for sales through persons in third countries)
those to whom the commodities are to be resold, and do not include as a
purchaser any person in Iran or any person within the definition of the
term Government of Iran other than:
(i) A private individual in Iran acting for his or her own account;
(ii) A nongovernmental entity in Iran; or
(iii) A procurement body of the Government of Iran identified by
the Office of Foreign Assets Control as not being affiliated with the
coercive organs of the state;
(3) Provide only for sales at prevailing market prices;
(4) Make any performance involving the exportation or reexportation
of any goods, technology (including technical data, software, or other
information) or services that are subject to license application
requirements of another Federal agency contingent upon the prior
authorization of that agency. (For example, EAR99 items may in certain
instances require a license from the Department of Commerce, Bureau of
Export Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through
744.4, 744.7, and 744.10; see also 22 CFR 123.9); and
(5) Provide for payment terms consistent with the provisions of
Sec. 560.532.
(c) Recordkeeping and reporting requirements. Attention is drawn to
the recordkeeping, retention, and reporting requirements of
Secs. 501.601 and 501.602.
(d) Other commodities and products. Requests may be made to the
Office of Foreign Assets Control for specific licenses analogous to
those available pursuant to paragraph (a) of this section where the
applicant demonstrates to the satisfaction of the Office of Foreign
Assets Control that, in light of industry practices, sales of the
particular agricultural commodity or product, medicine, or medical
equipment are impracticable under the executory contract licensing
procedures contained in Sec. 560.530.
(e) Ineligible purchasers. Nothing in this section permits entry
into or performance of a sales contract with a person specifically
named in appendix A to this chapter V or in appendix A to this part
560, other than a procurement body of the Government of Iran identified
by the Office of Foreign
[[Page 41793]]
Assets Control as not being affiliated with the coercive organs of the
state.
Note to paragraph (e) of Sec. 560.531. Information on ineligible
purchasers and eligible procurement bodies will be published in the
Federal Register and may be found on the Office of Foreign Assets
Control's Internet site: http://www.treas.gov/ofac, or on its fax-
on-demand system: 202/622-0077.
5. Section 560.532 is added to subpart E to read as follows:
Sec. 560.532 Payment for and financing of commercial sales of
agricultural commodities and products, medicine, and medical equipment.
(a) General license for payment terms. The following payment terms
for sales of agricultural commodities and products, medicine, and
medical equipment pursuant to Secs. 560.530 and 560.531 are authorized:
(1) Payment of cash in advance;
(2) Sales on open account, provided that the account receivable may
not be transferred by the person extending the credit; or
(3) Financing by third-country financial institutions that are
neither United States persons nor Government of Iran entities. Such
financing may be confirmed or advised by U.S. financial institutions.
(b) Specific licenses for alternate payment terms. Specific
licenses may be issued on a case-by-case basis for payment terms and
trade financing not authorized by the general license in paragraph (a)
of this section for sales pursuant to Secs. 560.530 and 560.531, except
that such financing may not be provided by the Government of Iran. See
Sec. 501.801(b) of this chapter for specific licensing procedures.
(c) No use of Iranian accounts. Nothing in this section authorizes
payment terms or trade financing involving a debit or credit to an
Iranian account.
(d) Transfers through the U.S. financial system. Any payment
relating to a transaction authorized in or pursuant to Sec. 560.530,
560.531, or 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).
6. Section 560.533 is added to subpart E to read as follows:
Sec. 560.533 Brokering sales of bulk agricultural commodities.
(a) General license for brokering sales by U.S. persons. United
States persons are authorized to broker the sale by United States
persons of the bulk agricultural commodities listed in appendix B to
this part 560 to individuals in Iran acting for their own account,
nongovernmental entities in Iran, procurement bodies of the Government
of Iran identified by the Office of Foreign Assets Control as not being
affiliated with the coercive organs of the state, or persons in third
countries purchasing specifically for resale to any of the foregoing,
provided that the brokered sales meet all conditions of Sec. 560.531.
(b) Specific licensing for brokering sales by non-U.S. persons.
Specific licenses may be issued on a case-by-case basis to permit
United States persons to broker the sale and exportation or
reexportation of bulk agricultural commodities by non-United States
persons to persons in Iran or the Government of Iran. Specific licenses
issued pursuant to this section will authorize the brokerage 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 paragraphs (b)(2) and
(e) of Sec. 560.531;
(3) Require that any performance that is subject to license
application requirements of another Federal agency be contingent upon
the prior authorization of that agency. (For example, items classified
EAR99 under the Export Administration Regulations, 15 CFR parts 730
through 774, may in certain instances require a license from the
Department of Commerce, Bureau of Export Administration. See, e.g., 15
CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10; see also 22
CFR 123.9.)
(c) No debit to an Iranian account. Payment for any brokerage fee
pursuant to this section may not involve a debit or credit to an
Iranian account.
(d) Recordkeeping and reporting requirements. Attention is drawn to
the recordkeeping, retention, and reporting requirements of
Secs. 501.601 and 501.602.
Appendix A to Part 560 [Redesignated]
7. The appendix to part 560 is redesignated as Appendix A to Part
560.
8. Appendix B to part 560 is added to read as follows:
Appendix B to Part 560--Bulk Agricultural Commodities
Notes:
1. Appendix B sets forth those agricultural commodities eligible
for the bulk agricultural commodity sales licensing procedures in
Sec. 560.531.
2. Commodities are identified by their classification numbers in
the Harmonized Tariff Schedule of the United States (see 19 U.S.C.
1202) (``HTS'').
------------------------------------------------------------------------
HTS Number Commodity
------------------------------------------------------------------------
1001.10 Durum Wheat
1001.90 Other Wheat and Meslin, including seed, Red Spring
Wheat, White Winter Wheat, ``Canadian'' Western
Red Winter Wheat, Soft White Spring Wheat, and
Wheat not elsewhere specified
1101.00 Wheat or Meslin Flour
1006.10 Rice in the husk (paddy or rough)
1006.20 Husked (brown) Rice
1006.30 Semi-milled or wholly milled Rice, whether or not
polished or glazed
1006.40 Broken Rice
1102.30 Rice Flour
1103.14 Rice Groats, Meal and Pellets
1002.00 Rye
1003.00 Barley
1004.00 Oats
1007.00 Grain Sorghum
1005.00 Corn (Maize)
0713.31 Dried Beans including Vigna mungo (L.), Hepper,
and Vigna radiata (L.) Wilczek
0713.32 Small red (adzuki) beans
0713.33 Kidney beans, including white pea beans
0713.39 Beans, other
0713.50 Broad beans and horse beans
0713.10 Dried Peas (Pisum sativum)
0713.20 Chickpeas (garbanzos)
0713.40 Lentils
0713.90 Dried leguminous vegetables, shelled, not
elsewhere specified
1201.00 Soybeans, whether or not broken
2304.00 Soybean cake, meal and pellets
1507.10 Soybean oil, crude
1507.90 Soybean oil, other
1514.10 Rapeseed, colza and mustard oil, crude
1514.90 Rapeseed, colza and mustard oil, other
1515.21 Corn (Maize) oil, crude
1515.29 Corn (Maize) oil, other
1512.21 Cottonseed oil, crude
1512.29 Cottonseed oil, other
1517.90 Cottonseed oil, hydrogenated
1508.10 Peanut (ground-nut) oil, crude
1508.90 Peanut (ground-nut) oil, other
1515.50 Sesame oil
1512.11 Sunflower-seed oil, crude
1512.19 Sunflower-seed oil, other
1212.91 Sugar Beets, fresh, chilled, frozen or dried
1212.92 Sugar Cane, fresh, chilled, frozen or dried
1701.11 Cane Sugar, raw, solid form
1701.12 Beet Sugar, raw, solid form
1701.91 Cane or Beet Sugar, solid form, containing added
coloring or flavoring
1701.99 Cane or Beet Sugar, other, not elsewhere specified
------------------------------------------------------------------------
[[Page 41794]]
Dated: July 26, 1999.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
Approved: July 26, 1999.
Elisabeth A. Bresee,
Assistant Secretary (Enforcement), Department of the Treasury.
[FR Doc. 99-19628 Filed 7-27-99; 4:18 pm]
BILLING CODE 4810-25-F
