Iranian transactions and Iraqi sanctions regulations: Humanitarian activities by nongovernmental organizations; authorization,

[Federal Register: March 12, 2003 (Volume 68, Number 48)]

[Rules and Regulations]

[Page 11741-11745]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr12mr03-7]

DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 560 and 575

Authorization of Certain Humanitarian Activities by Nongovernmental Organizations in Iraq and Iran

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Interim final rule.

SUMMARY: The Office of Foreign Assets Control (``OFAC'') of the U.S. Department of the Treasury is adding new provisions to the Iraqi Sanctions Regulations, 31 CFR part 575, to facilitate certain humanitarian activities in and around Iraq. These new regulations provide for the establishment of a registration program that would authorize nongovernmental organizations to engage in humanitarian activities in the areas of Iraq not controlled by the Government of Iraq. They also permit certain humanitarian assessment missions in Iraq. Related regulations are being added to the Iranian Transactions Regulations, 31 CFR part 560, authorizing certain activities in Iran by nongovernmental organizations to the extent necessary to support authorized humanitarian activities in Iraq, as well as certain assessment activities in Iran.

DATES: Effective March 12, 2003. Written comments must be received no later than May 12, 2003.

ADDRESSES: Comments may be submitted to the Chief of Records, ATTN: Request for Comments, Office of Foreign Assets Control, Department of the Treasury, 1500 Pennsylvania Avenue, NW., Washington, DC 20220. Alternatively, comments may be submitted via facsimile to the Chief of Records at (202) 622-1657 or via OFAC's Web site .

FOR FURTHER INFORMATION CONTACT: Chief of Licensing, tel. (202) 622- 2480, Chief of Compliance Programs, tel. (202) 622-2490, or Chief Counsel, tel. (202) 622-2410.

SUPPLEMENTARY INFORMATION:

Background

On August 2, 1990, upon Iraq's invasion of Kuwait, the President issued Executive Order 12722, declaring a national emergency with respect to Iraq. This order, issued under the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3 of the U.S. Code, imposed economic sanctions, including a complete trade embargo, against Iraq. In keeping with United Nations Security Council Resolution 661 of August 6, 1990, and under the United Nations Participation Act (22 U.S.C. 287c), the President also issued Executive Order 12724 of August 9, 1990, which imposed additional restrictions. The Iraqi Sanctions Regulations, 31 CFR part 575, implement Executive Orders 12722 and 12724 and are administered by the Treasury Department's Office of Foreign Assets Control (``OFAC'').

The new sections published today are intended to facilitate humanitarian activities with respect to Iraq, including certain activities in neighboring Iran that are directly incidental and essential to such humanitarian activities. Section 575.527 provides for the case-by-case authorization of nongovernmental organizations to conduct certain defined humanitarian activities in the areas of Iraq not controlled by the Government of Iraq. These provisions incorporate the procedures and requirements set forth in 31 CFR 501.801(c) with respect to the application for obtaining a registration number. Applications from interested

[[Page 11742]]

nongovernmental organizations should be submitted to OFAC as described in section 575.527. Section 575.528 authorizes, by general license, more limited survey or assessment missions in Iraq (including those areas controlled by the Government of Iraq).

Sections 575.329 and 575.330 provide definitions of the terms ``areas of Iraq not controlled by the Government of Iraq,'' ``humanitarian activities,'' ``humanitarian purposes,'' and ``humanitarian support.''

Section 560.536 provides that nongovernmental organizations authorized by specific license or under the new provisions of the Iraqi Sanctions Regulations may conduct certain activities in Iran that are directly incidental to their authorized humanitarian activities in Iraq. Section 560.537 authorizes such organizations to conduct limited survey or assessment missions in Iran pertaining to the planning of or preparation for the provision of humanitarian support to the Iraqi people.

Where relevant, each of the regulatory changes referenced above indicates that, with limited exceptions, exportations and re- exportations to Iraq and Iran remain proscribed. To the extent that nongovernmental organizations seek specific authorization from OFAC for the exportation or re-exportation of any item to Iraq or Iran, they are advised to ascertain the Export Control Classification Number assigned to the item by the Department of Commerce's Bureau of Industry and Security prior to submitting their request to OFAC.

Request for Comments

Because amendment of these regulations involves a foreign affairs function, the provisions of Executive Order 12866 and the Administrative Procedure Act (5 U.S.C. 553) (the ``APA'') requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date, are inapplicable. However, because of the importance of the issues addressed in these regulations, this rule is being issued in interim form and comments will be considered in the development of final regulations. Accordingly, the Department encourages interested persons who wish to comment to do so at the earliest possible time to permit the fullest consideration of their views. Comments may address the impact of the Regulations on the submitter's activities, whether of a commercial, non-commercial or humanitarian nature, as well as changes that would improve the clarity and organization of the Regulations.

The period for submission of comments will close May 12, 2003. The address for submitting comments appears near the beginning of this notice. The Department will consider all comments received before the close of the comment period in developing final regulations. Comments received after the end of the comment period will be considered if possible, but their consideration cannot be assured. The Department will not accept public comments accompanied by a request that a part or all of the submission be treated confidentially because of its business proprietary nature or for any other reason. The Department will return such a submission to the originator without considering the comments in the development of final regulations. In the interest of accuracy and completeness, the Department requires comments in written form.

All public comments on these Regulations will be a matter of public record. Copies of the public record concerning these Regulations will be made available not sooner than June 10, 2003 and will be obtainable from OFAC's Web site . If that

from OFAC's Web site . If that

service is unavailable, written requests for copies may be sent to Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Ave, NW., Washington, DC 20220, Attn: Chief, Records Division.

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 and type ``/GO FAC,'' or call (202) 512-1530 for disk or paper copies. This file is available for downloading without charge in ASCII and Adobe Acrobat7 readable (*.PDF) formats. For Internet access, the address for use with the World Wide Web, Telnet, or FTP protocol is . This document and additional information concerning OFAC are available from OFAC's Web site .

OFAC's Web site .

Paperwork Reduction Act

The collections of information related to these regulations can be found in 31 CFR part 501. Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been previously approved by the Office of Management and Budget under control number 1505-0164.

List of Subjects

31 CFR Part 560

Administrative practice and procedure, Agricultural commodities, Banks, Banking, Drugs, Exports, Foods, Foreign trade, Imports, Information, Investments, Iran, Iraq, Loans, Medical devices, Medicine, Penalties, Reporting and recordkeeping requirements, Services, Specially designated nationals, Terrorism, Transportation.

31 CFR Part 575

Administrative practice and procedure, Banks, banking, Blocking of assets, Exports, Foreign trade, Humanitarian aid, Imports, Iran, Iraq, Oil imports, Penalties, Petroleum, Petroleum products, Reporting and recordkeeping requirements, Specially designated nationals, Terrorism, Travel restrictions.

For the reasons stated in the preamble, 31 CFR chapter V, parts 560 and 575, are amended as set forth below:

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. 2339B, 2332d, 22 U.S.C,. 2349aa-9, 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 106-387, 114 Stat 1549; E.O. 12613, 52 FR 41940, 3 CFR, 1987 Comp., p. 256; E.O. 12957, 60 FR 14615, 3 CFR, 1995 Comp., p. 332, E.O. 12959, 60 FR 24757, 3 CFR, 1995 Comp., p. 356, E.O. 13059, 62 FR 44531; 3 CFR, 1997 Comp., p. 217.

   Subpart E--Licenses, Authorizations, and Statements of Licening Policy

2. Add a new Sec. 560.536 to subpart E to read as follows:

   Sec. 560.536 Humanitarian activities in and around Iraq.

   (a) A nongovernmental organization specifically licensed pursuant to 31 CFR part 575 or otherwise authorized pursuant to 31 CFR 575.527 to conduct certain humanitarian activities in and around Iraq is authorized to conduct activities in Iran that are directly incidental and essential to its authorized humanitarian activities in and around Iraq, subject to all conditions and restrictions imposed on the organization pursuant to 31 CFR 575.527 and the terms of its license or registration. This section does not authorize the actual provision of humanitarian support in Iran.

   (b) No exportations or re-exportations of goods or technology, whether U.S. or

   [[Page 11743]]

   foreign origin, to Iran are permitted pursuant to this section, except for articles, such as food, clothing, and medicine, intended to be used to relieve human suffering or items intended for temporary use, as personal baggage, by representatives of the authorized nongovernmental organization, provided that:

   (1) Any such goods or technology are not of the type controlled under the Department of Commerce's Export Administration Regulations for exportation or re-exportation to Iran or controlled on the United States Munitions List, and

   (2) Any such personal items are either consumed by representatives of that organization during the visit or removed from Iran at the end of each visit.

   (c) This section does not authorize the shipment or transshipment of goods or technology, whether U.S. or foreign origin, from Iran to any other country, including Iraq, except for the shipment or transshipment to Iraq of articles, such as food, clothing, and medicine, intended to be used to relieve human suffering. Nongovernmental organizations that wish to transport other types of goods or technology from Iran to Iraq must apply for specific authorization from the Office of Foreign Assets Control pursuant to Sec. 501.801(b), 31 CFR chapter V.

   (d) U.S. financial institutions are authorized to engage in funds transfers in connection with transactions authorized pursuant to this section consistent with the provisions of 31 CFR 560.516.

   (e) Nongovernmental organizations conducting transactions under this section based on a specific license or a registration issued pursuant to 31 CFR part 575 must reference their license or registration number on all payments and funds transfers and on all related documentation.

3. Add a new Sec. 560.537 to subpart E to read as follows:

   Sec. 560.537 Authorization of certain survey or assessment missions in Iran.

   (a) Subject to the conditions of paragraphs (b), (c), and (d) of this section, nongovernmental organizations are authorized to conduct survey or assessment missions in Iran related to the planning or preparation for the provision of humanitarian support to the Iraqi people. This section does not authorize the actual provision of such humanitarian support in Iran.

   (b) The authorization of paragraph (a) of this section is available only to the following types of nongovernmental organizations:

   (1) Nongovernmental organizations registered pursuant to 31 CFR 575.527; or

   (2) Nongovernmental organizations that have been issued specific licenses under 31 CFR part 575 to carry out humanitarian activities in Iraq, but not including organizations that have been issued specific licenses solely to export goods to Iraq.

   (c) This section does not authorize nongovernmental organizations to open offices or to establish permanent facilities of any kind or to purchase any goods, services, or technology in Iran of any kind, except those described in paragraph (d)(3) of this section.

   (d) The authorization of this section is subject to the following conditions:

   (1) U.S. financial institutions are authorized to engage in funds transfers in connection with transactions authorized pursuant to this section consistent with the provisions of 31 CFR 560.516.

   (2) Nongovernmental organizations conducting transactions under this section based on a specific license or a registration issued pursuant to 31 CFR part 575 must reference their license or registration number on all payments and funds transfers and on all related documentation.

   (3) Any funds transferred to Iran pursuant to this section may be used only for the purchase of services and goods necessary and essential to the conduct of the assessment mission and, whether U.S. or foreign origin, not of the type controlled under the Department of Commerce's Export Administration Regulations for exportation or re- exportation to Iran or controlled on the United States Munitions List.

   (4)(i) No exportations or re-exportations of goods or technology, whether U.S. or foreign origin, to Iran are permitted pursuant to this section, except for those items intended for temporary use, as personal baggage, by mission representatives, provided that such items are either consumed by mission representatives during the visit or removed from Iran at the end of each visit, and further provided that any such personal items are not of the type controlled under the Department of Commerce's Export Administration Regulations for exportation or re- exportation to Iran or controlled on the United States Munitions List.

   (ii) Nongovernmental organizations that wish to export or re-export goods or technology to Iran, beyond personal baggage items described in paragraph (d)(4)(i) of this section, as part of a survey or assessment mission must apply for specific authorization from the Office of Foreign Assets Control pursuant to Sec. 501.801(b), 31 CFR chapter V.

   (5) Nongovernmental organizations acting under this section shall take adequate measures to prevent any items authorized for exportation, re-exportation, or local purchase from being obtained or acquired by the Government of Iran.

   PART 575--IRAQI SANCTIONS REGULATIONS

4. The authority citation for 31 CFR part 575 continues to read as follows:

   Authority: 3 U.S.C. 301; 18 U.S.C. 2332d; 22 U.S.C. 287c; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-513, 104 Stat, 2047-2055 (50 U.S.C. 1701 note); E.O. 12722, 55 FR 31803, 3 CFR, 1990 Comp., p. 294; E.O. 12724, 55 FR 33089, 3 CFR, 1990 Comp., p. 297; E.O. 12817, 57 FR 48433, 3 CFR, 1992 Comp., p. 317.

   Subpart C--General Definitions

5. Add a new Sec. 575.329 to subpart C to read as follows:

   Sec. 575.329 Areas of Iraq not controlled by the Government of Iraq.

   The term areas of Iraq not controlled by the Government of Iraq means, as of January 30, 2003, the areas north of the ``Green Line'' and under the control of the Kurdistan Democratic Party (KDP) or the Patriotic Union of Kurdistan (PUK) in the following provinces of Iraq: Dahuk (Dohuk), Arbil (Erbil), and Sulaymaniyah (Suleimaniyah). The description of the term areas of Iraq not controlled by the Government of Iraq may be modified by the Department of State.

   Note to Sec. 575.329: Questions on the description of this term should be addressed to the Office of Northern Gulf Affairs, Bureau of Near Eastern Affairs, Room 4241, U.S. Department of State, 2201 C Street NW., Washington, DC 20520 (Tel: (202) 647-5692). Any changes to the description of this term will be posted on the Department of State Web site at .

   State Web site at .

6. Add a new Sec. 575.330 to subpart C to read as follows:

   Sec. 575.330 Humanitarian activities, humanitarian purposes, and humanitarian support.

   For purposes of Sec. Sec. 575.527 and 575.528, the terms humanitarian activities, humanitarian purposes, and humanitarian support mean, as these terms have been defined by the Department of State for relevant United Nations Security Council Resolutions on Iraq, humanitarian relief, educational, cultural, recreational, and human rights-related activities, and activities to ameliorate the effects of or to investigate

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   war crimes. Such purposes may include preparatory activities and transactions.

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

7. Add a new Sec. 575.527 to subpart E to read as follows:

   Sec. 575.527 Registration of non-governmental organizations for humanitarian activities.

   (a) Registration numbers may be issued on a case-by-case basis for the registration of nongovernmental organizations involved in humanitarian activities in areas of Iraq not controlled by the Government of Iraq, authorizing transactions by such organizations otherwise prohibited by this part, including the exportation of services, certain goods, software, or technology to areas of Iraq not controlled by the Government of Iraq and the transfer of funds to and from such areas for humanitarian purposes. Applicants for registration numbers must comply with the requirements of Sec. 501.801(c), 31 CFR chapter V.

   (b) Successful applicants for registration under this section must comply with the following conditions:

   (1) No goods or technology, whether U.S. or foreign origin, of types controlled under the Department of Commerce's Export Administration Regulations for exportation or re-exportation to Iraq, controlled on the United States Munitions List, or listed on the United Nations Goods Review List may be exported or re-exported to Iraq or purchased or used locally in Iraq.

   (2) Registered nongovernmental organizations shall take adequate measures to prevent any items authorized for exportation, re- exportation, or local purchase from being obtained or acquired by the Government of Iraq.

   (3) U.S. financial institutions are authorized to engage in funds transfers in connection with transactions authorized pursuant to a registration issued under this section, provided that no Iraqi or Iranian financial institution or other agency or instrumentality of the Government of Iraq or the Government of Iran may participate in any such funds transfer.

   (4) All transactions pursuant to a registration issued under this section must conform to all relevant United Nations Security Council Resolutions, including 661, 666, 687 and 1409, and relevant procedures issued by the 661 Committee.

   (5) U.S. citizens who wish to travel to Iraq pursuant to a registration issued under this section must apply to the Department of State to have their passports validated for travel to Iraq. Such applications should be submitted to the Deputy Assistant Secretary for Passport Services, ATTN: Office of Passport Policy and Advisory Services, U.S. Department of State, 2401 E Street NW., Washington, DC 20522-0907. Such applications must include the applicant's name, date and place of birth, dates of proposed travel, and purpose of the trip. Issuance of a registration number under this section does not in any way create a presumption in favor of passport validation.

   (6) Nongovernmental organizations conducting transactions authorized by their registrations pursuant to this section must reference the registration number on all payments and funds transfers and on all related documentation.

   (c) This section does not authorize transfers from blocked accounts.

   Note to Sec. 575.527: Registration does not excuse a U.S. person from compliance with other provisions of 31 CFR chapter V or with applicable U.S. laws governing the exportation or re- exportation of U.S.-origin goods, software, or technology (including technical data) to Iraq, Iran, or other countries. See, e.g., the Export Administration Regulations administered by the U.S. Department of Commerce (15 CFR chapter VII, subchapter C) and the International Traffic in Arms Regulations (22 CFR chapters 120-130) administered by the Department of State.

8. Add a new Sec. 575.528 to subpart E to read as follows:

   Sec. 575.528 Authorization of certain survey or assessment missions in and around Iraq.

   (a) Subject to paragraphs (b), (c), and (d) of this section, nongovernmental organizations are authorized to send representatives to Iraq for the purpose of conducting survey or assessment missions related to the planning or preparation for the provision of humanitarian support to the Iraqi people. This section does not authorize the actual provision of such humanitarian support.

   (b) The authorization set forth in paragraph (a) of this section applies only to the following types of nongovernmental organizations:

   (1) Nongovernmental organizations registered pursuant to Sec. 575.527; or

   (2) Nongovernmental organizations that have been issued specific licenses under this part to carry out humanitarian activities in Iraq, but not including organizations that have been issued specific licenses solely to export goods to Iraq.

   (c) This section does not authorize nongovernmental organizations to open offices or to establish permanent facilities of any kind or to purchase any goods, services or technology in Iraq of any kind, except those described in paragraph (d)(3) of this section.

   (d) The authorization set forth in this section is subject to the following conditions:

   (1) U.S. financial institutions are authorized to engage in funds transfers in connection with transactions authorized pursuant to this section, provided that no Iraqi or Iranian financial institution or other agency or instrumentality of the Government of Iraq or Government of Iran may participate in any such funds transfer.

   (2) Nongovernmental organizations conducting transactions authorized by specific license or by registration issued pursuant to Sec. 575.527 must reference their license or registration number on all payments and funds transfers and on all related documentation.

   (3) Any funds transferred to Iraq pursuant to this section may be used only for the purchase of services and goods necessary and essential to the conduct of the assessment mission and, whether U.S. or foreign origin, not of the type controlled under the Department of Commerce's Export Administration Regulations for exportation or re- exportation to Iran or Iraq or controlled on the United States Munitions List.

   (4)(i) No exportations or re-exportations of goods or technology (whether U.S. or foreign origin) to Iraq are permitted pursuant to this section, except for those items intended for temporary use, as personal baggage, by mission representatives, provided that such items are either consumed by mission representatives during the visit or removed from Iraq at the end of each visit, and further provided that any such personal items regardless of origin are not of the type controlled for exportation or re-exportation to Iran or Iraq under the Department of Commerce's Export Administration Regulations, controlled on the United States Munitions List, or listed on the United Nations Goods Review List.

   (ii) Nongovernmental organizations that wish to export or re-export goods or technology to Iraq, beyond personal baggage as described in paragraph (d)(4)(i) of this section, as part of a survey or assessment mission must apply for specific authorization from the Office of Foreign Assets Control pursuant to Sec. 501.801(b), 31 CFR chapter V.

   (5) Nongovernmental organizations acting under this section shall take adequate measures to prevent any items authorized for export, re- export, or local

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   purchase from being obtained or acquired by the Government of Iraq.

   (6) U.S. citizens who wish to travel to Iraq pursuant to this section must apply to the Department of State to have their passports validated for travel to Iraq. Such applications should be submitted to the Deputy Assistant Secretary for Passport Services, ATTN: Office of Passport Policy and Advisory Services, U.S. Department of State, 2401 E Street NW., Washington, DC 20522-0907. Such applications must include the applicant's name, date and place of birth, dates of proposed travel, and purpose of the trip. This section does not in any way create a presumption in favor of passport validation.

   (e) This section does not authorize transfers from blocked accounts.

   Note to Sec. 575.528: This section does not excuse a U.S. person from compliance with other provisions of 31 CFR chapter V or with applicable U.S. laws governing the exportation or re- exportation of U.S.-origin goods, software, or technology (including technical data) to Iraq, Iran, or other countries. See, e.g., the Export Administration Regulations administered by the U.S. Department of Commerce (15 CFR chapter VII, subchapter C) and the International Traffic in Arms Regulations (22 CFR chapters 120-130) administered by the Department of State.

   Dated: February 28, 2003. R. Richard Newcomb, Director, Office of Foreign Assets Control.

   Approved: March 3, 2003. Kenneth E. Lawson, Assistant Secretary (Enforcement), Department of the Treasury.

   [FR Doc. 03-5952 Filed 3-10-03; 8:50 am]

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