[Federal Register Volume 60, Number 32 (Thursday, February 16, 1995)]
[Rules and Regulations]
[Pages 8933-8936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3984]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 500
Foreign Assets Control Regulations; North Korean Travel and
Financial Transactions; Information and Informational Materials
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule; amendments.
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SUMMARY: The Treasury Department is amending the Foreign Assets Control
Regulations (the ``Regulations'') consistent with commitments
undertaken in the October 21, l994 U.S.-Democratic People's Republic of
Korea (``North Korea'') Framework Agreement. In addition, the
Regulations are also being amended to bring them into conformity with
recent amendments to the Trading with the Enemy Act.
EFFECTIVE DATE: February 14, 1995.
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, Department of the
Treasury, Washington, D.C. 20220.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document is available as an electronic file on The Federal
Bulletin Board the day of publication in the Federal Register. By modem
dial 202/512-1387 or call 202/512-1530 for disks or paper copies. This
file is available in Postscript, WordPerfect 5.1 and ASCII.
Background
On October 21, 1994, the United States and North Korea agreed, in
the context of broader negotiations, to begin reducing barriers to
trade and investment. Based on these mutual commitments, the
Regulations are being amended by (1) adding a new Sec. 500.580 to
authorize the clearing through the U.S. banking system of U.S. dollar
transactions in which North Korea or a national thereof has an
interest; (2) adding a new Sec. 500.581 to authorize transactions
related to the operation of certain U.S. and North Korean diplomatic
missions in the United States and North Korea; (3) amending
Sec. 500.563 to authorize all U.S. persons' transactions with respect
to travel to, from, and within North Korea, including removal of
restrictions on group travel and travel service providers (including
travel agents, carriers, ticket agents and commercial and noncommercial
organizations that promote or arrange travel) and removal of the prior
$200 per diem ceiling on expenditures; (4) amending Sec. 500.566,
regarding the authorization of travel-related transactions by North
Korean nationals in the United States; (5) amending Sec. 500.579 to
authorize the case-by-case unblocking of certain funds which came into
the possession or control of U.S. banking institutions through wire
transfer instructions or check remittances in which North Korea or a
national thereof has or has had an interest, provided no funds are
transferred directly to the Government of North Korea, entities
controlled by the Government of North Korea, or to persons in North
Korea; and (6) removing Sec. 500.564, regarding reimbursment of travel
costs by foreign subsidiaries, and Sec. 500.569, regarding group travel
to North Korea, as no longer necessary.
Section 500.582 is added to the Regulations to provide a statement
of licensing policy noting that specific licenses may be issued for the
[[Page 8934]] importation into the United States of North Korean-origin
magnesite or magnesia, because the absence of North Korea as a supplier
subjects U.S. importers to unreasonably high prices due to otherwise
limited foreign sources. Section 500.583 is added to the Regulations to
provide that specific licenses may be issued to authorize transactions
necessary to establish offices in North Korea of U.S. news
organizations and for offices in the United States of North Korean news
organizations. Finally, Sec. 500.584 is added to the Regulations to
provide that specific licenses may be issued to authorize U.S. persons
to participate in certain types of energy sector projects in North
Korea with respect to the replacement of existing nuclear reactors with
light-water reactor power plants.
Section 525(b) of the Foreign Relations Authorization Act, Fiscal
Years 1994 and 1995, Pub. L. No. 103-236, 108 Stat. 474 (the ``FRAA''),
amended section 5(b)(4) of the Trading with the Enemy Act, 50 U.S.C.
App. 5(b)(4) (``TWEA''), to expand the list of items defined as
categories of informational materials to include compact discs, CD
ROMs, artworks, and news wire feed. In addition, section 5(b)(4) of
TWEA, as amended, exempts from the authority granted to the President
pursuant to TWEA the authority to regulate or prohibit, directly or
indirectly, the exportation or importation, whether commercial or
otherwise, of information or informational materials regardless of
format or medium of transmission, except exportations that would be
controlled pursuant to national security, nonproliferation, or
antiterrorism provisions of the Export Administration Act of 1979, 50
U.S.C. App. 2401-2420, or espionage provisions of 18 U.S.C. chapter 37.
Section 500.571 of the Regulations is being amended to reflect the
exemption from regulation of all transmissions of noncontrolled
information over existing telecommunications circuits, including
current settlement of telecommunications fees between the United States
and North Korea.
Note: The FRAA exemption applies to transmissions of
information, not telecommunications facilities and equipment used to
transmit information. Exportation from the United States of
equipment to enhance gateway-to-gateway telecommunications service
with North Korea is subject to licensing requirements of the
Department of Commerce, in conjunction with the general license in
Sec. 500.533 of the Regulations. Exportation or reexportation of
such equipment to North Korea from a third country by a U.S. person
requires a specific license from FAC and may also be subject to
Commerce Department licensing provisions set forth in the Export
Administration Regulations, 15 CFR parts 768-799.
Section 500.206 is amended to reflect the FRAA exemption that
applies to transactions concerning exportation and importation of
information and informational materials. The definition of the term
``informational materials'' contained in Sec. 500.332 is amended to
conform the section to amended section 5(b)(4) of TWEA. Conforming
amendments are also made to Sec. 500.550, which authorizes transactions
related to the importation and exportation of information and
informational materials.
Because the Regulations involve a foreign affairs function,
Executive Order 12866 and the provisions of the Administrative
Procedure Act, 5 U.S.C. 553, 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 in 31 CFR Part 500
Administrative practice and procedure, Banks, Banking, Cambodia,
Exports, Fines and penalties, Finance, Foreign investment in the United
States, Foreign trade, Imports, Information and informational
materials, International organizations, North Korea, Reporting and
recordkeeping requirements, Securities, Services, Travel restrictions,
Trusts and estates, Vietnam.
For the reasons set forth in the preamble, 31 CFR part 500 is
amended as set forth below:
PART 500--FOREIGN ASSETS CONTROL REGULATIONS
1. The authority citation for part 500 continues to read as
follows:
Authority: 50 U.S.C. App. 1-44; E.O. 9193, 7 FR 5205, 3 CFR,
1938-1943 Comp., p. 1174; E.O. 9989, 13 FR 4891, 3 CFR, 1943-1948
Comp., p. 748.
Subpart B--Prohibitions
2. The section heading and paragraphs (a) and (b) of Sec. 500.206
are revised to read as follows, the words ``information or'' are added
before the words ``informational materials'' in each place they appear
in paragraph (c) of Sec. 500.206, and the word ``synchronization'' and
the comma following it are removed from Example #4 of Sec. 500.206:
Sec. 500.206 Exemption of information and informational materials.
(a) The importation from any country and the exportation to any
country of information or informational materials as defined in
Sec. 500.332, whether commercial or otherwise, regardless of format or
medium of transmission, are exempt from the prohibitions and
regulations of this part.
(b) All transactions of common carriers incident to the importation
or exportation of information or informational materials, including
mail, between the United States and any foreign country designated
under Sec. 500.201, are exempt from the prohibitions and regulations of
this part.
* * * * *
Subpart C--General Definitions
3. Section Sec. 500.332 is revised to read as follows:
Sec. 500.332 Information and informational materials.
(a) For purposes of this part, the term informational materials
includes, without limitation:
(1) Publications, films, posters, phonograph records, photographs,
microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and
news wire feeds.
(2) To be considered informational materials, artworks must be
classified under chapter subheading 9701, 9702, or 9703 of the
Harmonized Tariff Schedule of the United States.
(b) The terms information and informational materials with respect
to U.S. exports do not include items:
(1) that would be controlled for export pursuant to section 5 of
the Export Administration Act of 1979, 50 U.S.C. App. 2401-2420 (1979)
(the ``EAA''), or section 6 of the EAA to the extent that such controls
promote the nonproliferation or antiterrorism policies of the United
States, including ``software'' that is not ``publicly available'' as
these terms are defined in 15 CFR Parts 779 and 799.1 (1994); or
(2) with respect to which acts are prohibited by 18 U.S.C. chapter
37.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
4. The section heading and paragraph (a) of Sec. 500.550 are
revised to read as follows, and the words ``information or'' are added
before the words ``informational materials'' in each place they appear
in the first sentence of paragraph (b) of Sec. 500.550: [[Page 8935]]
Sec. 500.550 Transactions related to information and informational
materials.
(a) All financial and other transactions directly incident to the
importation or exportation of information or informational materials as
defined in Sec. 500.332 of this part are authorized.
* * * * *
5. The section heading and text of Sec. 500.563 are revised to read
as follows:
Sec. 500.563 Transactions incident to travel to and within North
Korea.
(a) All transactions of persons subject to U.S. jurisdiction,
including travel service providers, ordinarily incident to travel to,
from, and within North Korea and to maintenance within North Korea are
authorized. This authorization extends to transactions with North
Korean carriers and those involving group tours, payment of living
expenses, the acquisition of goods in North Korea for personal use, and
normal banking transactions involving currency drafts, charge, debit or
credit cards, traveler's checks, or other financial instruments
negotiated incident to personal travel.
(b) The purchase of merchandise in North Korea by persons subject
to U.S. jurisdiction, and importation as accompanied baggage, is
limited to goods with a foreign market value not to exceed $100 per
person for personal use only. Such merchandise may not be resold. This
authorization may be used only once in every six consecutive months. As
provided in Sec. 500.206 of this part, information and informational
materials are exempt from this restriction.
(c) This section does not authorize any debit to a blocked account.
Sec. 500.564 [Reserved]
6. Section 500.564 is removed and reserved.
7. Paragraph (b) of Sec. 500.566 is removed, paragraph (c) is
redesignated as paragraph (b), and the section heading and the
introductory text of paragraph (a) and paragraph (a)(1) are revised to
read as follows:
Sec. 500.566 Certain transactions authorized on behalf of North Korean
nationals incident to their travel and maintenance expenses.
(a) Except as provided in paragraph (b) of this section, the
following transactions are authorized by or on behalf of a national of
North Korea who enters the United States on a visa issued by the
Department of State:
(1) All transactions ordinarily incident to travel to, from, and
within the United States are authorized, including the importation into
the United States of accompanied baggage for personal use;
* * * * *
Sec. 500.569 [Reserved]
8. Section 500.569 is removed and reserved.
Sec. 500.571 [Amended]
9. Section 500.571 is amended by removing the word ``Vietnam'' and
adding the words ``North Korea'' wherever it appears.
10. Section 500.579 is amended by designating the current text as
paragraph (a), and by adding the following paragraph (b) to the end of
the section to read as follows:
Sec. 500.579 Authorization for release of certain blocked transfers by
banking institutions subject to U.S. jurisdiction.
* * * * *
(b) Specific licenses may be issued authorizing the return to the
remitting party of funds that were blocked by banking institutions
subject to the jurisdiction of the United States pursuant to this part
because of an interest of North Korea or a national thereof and that
came into the banking institution's possession or control by wire
transfer or check remittance, provided that no funds are released to
the Government of North Korea, any entity controlled by the Government
of North Korea, or any person located in, controlled from, or organized
under the laws of North Korea.
11. Section 500.580 is added to read as follows:
Sec. 500.580 Authorization of U.S. dollar clearing transactions
involving North Korea.
Banking institutions organized under the laws of or located in the
United States are authorized to process the transfer of funds in which
North Korea or a national thereof has an interest. Persons subject to
U.S. jurisdiction who are originators or ultimate beneficiaries of
funds transfers, however, including U.S. banking institutions that are
themselves originators or beneficiaries, may not initiate or receive
such transfers if the underlying transactions to which they relate are
prohibited pursuant to this part.
12. Section 500.581 is added to read as follows:
Sec. 500.581 Financial transactions related to diplomatic missions
authorized.
All financial transactions related to activities of North Korean
diplomatic missions in the United States and U.S. diplomatic missions
in North Korea are authorized, with the exception of transactions
involving the North Korean mission to the United Nations in New York,
which are subject to approval by specific license.
13. Section 500.582 is added to read as follows:
Sec. 500.582 Importation of North Korean-origin magnesite and
magnesia.
Specific licenses may be issued authorizing the importation into
the United States of North Korean-origin magnesite or magnesia.
14. Section 500.583 is added to read as follows:
Sec. 500.583 News organization offices.
(a) Specific licenses may be issued authorizing all transactions
necessary for the establishment and operation of news bureaus in North
Korea by U.S. organizations whose primary purpose is the gathering and
dissemination of news to the general public.
(b) Transactions that will be authorized include but are not
limited to those incident to the following:
(1) leasing office space and securing related goods and services;
(2) hiring North Korean nationals to serve as support staff;
(3) purchasing North Korean-origin goods for use in the operation
of the office; and
(4) paying fees related to the operation of the office in North
Korea.
(c) Specific licenses may be issued authorizing transactions
necessary for the establishment and operation of news bureaus in the
United States by North Korean organizations whose primary purpose is
the gathering and dissemination of news to the general public.
(d) The number assigned to a specific license issued pursuant to
this section should be referenced in all import documents, and in all
funds transfers and other banking transactions through banking
institutions organized or located in the United States, in connection
with the licensed transactions to avoid the blocking of goods imported
from North Korea and the interruption of the financial transactions
with North Korea.
15. Section 500.584 is added to read as follows:
Sec. 500.584 Energy sector projects in North Korea.
Specific licenses may be issued to permit persons subject to U.S.
jurisdiction to participate in certain energy sector projects in North
Korea in connection with that country's transition to light-water
reactor (``LWR'') power plants. Transactions that may be licensed
include those related to LWR [[Page 8936]] power plant design, site
preparation, excavation, delivery of essential nonnuclear components
including turbines and generators, building construction, the
disposition of spentnuclear fuel, and the provision of heavy oil to
North Korea for heating and electricity generation pending completion
of the first LWR unit.
Dated: February 7, 1995.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
Approved: February 8, 1995.
John Berry,
Deputy Assistant Secretary (Enforcement).
[FR Doc. 95-3984 Filed 2-14-95; 9:15 am]
BILLING CODE 4810-25-F
