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                            Subpart 25.7 - Prohibited Sources
        
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FAC Number: 2024-03 Effective Date: 02/23/2024
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Subpart25.025.125.225.325.425.525.625.725.825.925.1025.11
Section25.70025.70125.70225.703
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Subpart 25.7 - Prohibited SourcesSubpart 25.7 - Prohibited Sources    **Parent topic:**  Part 25 - Foreign Acquisition25.700 Scope of subpart.       This subpart implements-                                       (a) 						            Economic sanctions administered by the Office of Foreign Assets Control (OFAC) in the Department of the Treasury prohibiting transactions involving certain countries, entities, and individuals;                                          (b) 						            The Sudan Accountability and Divestment Act of 2007 (Pub. L. 110-174) (  50 U.S.C. 1701 note);                                          (c) 						            The Iran Sanctions Act of 1996 (Iran Sanctions Act) (Pub. L. 104-172; 50 U.S.C. 1701 note), including amendments by the Iran Freedom Support Act (Pub. L. 109-293), section 102 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Pub. L. 111-195), and Titles II and III of the Iran Threat Reduction and Syria Human Rights Act of 2012 (Pub. L. 112-158); and                                          (d) 						            Prohibition against contracting with entities that export sensitive technologies to Iran (  22 U.S.C. 8515).25.701 Restrictions administered by the Department of the Treasury on acquisitions of supplies or services from prohibited sources.       (a) 						            Except as authorized by OFAC, agencies and their contractors and subcontractors must not acquire any supplies or services if any proclamation, Executive order, or statute administered by OFAC, or if OFAC’s implementing regulations at 31 CFR Chapter V, would prohibit such a transaction by a person subject to the jurisdiction of the United States.                                          (b) 						            Except as authorized by OFAC, most transactions involving Cuba, Iran, and Sudan are prohibited, as are most imports from Burma or North Korea into the United States or its outlying areas. In addition, lists of entities and individuals subject to economic sanctions are included in OFAC’s List of Specially Designated Nationals and Blocked Persons at   http://www.treas.gov/offices/enforcement/ofac/sdn. More information about these restrictions, as well as updates, is available in OFAC’s regulations at 31 CFR Chapter V and/or on OFAC’s website at   http://www.treas.gov/offices/enforcement/ofac.                                          (c) 						            Refer questions concerning the restrictions in paragraphs (a) or (b) of this section to the-                Department of the Treasury Office of Foreign Assets Control Washington, DC 20220 (Telephone (202) 622-2490).25.702 Prohibition on contracting with entities that conduct restricted business operations in Sudan.    25.702-1 Definitions.       As used in this section-          *Appropriate Congressional committees* means-(1) The Committee on Banking, Housing, and Urban Affairs, The Committee on Foreign Relations, and the Select Committee on Intelligence of the Senate; and                                                                     (2) The Committee on Financial Services, the Committee on Foreign Relations, and the Permanent Select Committee on Intelligence of the House of Representatives.                                                                                          *Business operations* means engaging in commerce in any form, including by acquiring, developing, maintaining, owning, selling, possessing, leasing, or operating equipment, facilities, personnel, products, services, personal property, real property, or any other apparatus of business or commerce.          *Marginalized populations of Sudan* means-(1) Adversely affected groups in regions authorized to receive assistance under section 8(c) of the Darfur Peace and Accountability Act (Pub. L. 109-344) (  50 U.S.C. 1701 note); and                                                                     (2) Marginalized areas in Northern Sudan described in section 4(9) of such Act.                                                                                          *Restricted business operations*-(1) Means, except as provided in paragraph (2) of this definition, business operations in Sudan that include power production activities, mineral extraction activities, oil-related activities, or the production of military equipment, as those terms are defined in the Sudan Accountability and Divestment Act of 2007 (Pub. L. 110-174).                                                                     (2) Does not include business operations that the person (as that term is defined in Section 2 of the Sudan Accountability and Divestment Act of 2007) conducting the business can demonstrate-                                                                                    (i) Are conducted under contract directly and exclusively with the regional government of southern Sudan;                                                                                       (ii) Are conducted pursuant to specific authorization from the Office of Foreign Assets Control in the Department of the Treasury, or are expressly exempted under Federal law from the requirement to be conducted under such authorization;                                                                                       (iii) Consist of providing goods or services to marginalized populations of Sudan;                                                                                       (iv) Consist of providing goods or services to an internationally recognized peacekeeping force or humanitarian organization;                                                                                       (v) Consist of providing goods or services that are used only to promote health or education; or                                                                                       (vi) Have been voluntarily suspended.25.702-2 Certification.       As required by the Sudan Accountability and Divestment Act of 2007 (Pub. L. 110-174), each offeror must certify that it does not conduct restricted business operations in Sudan.25.702-3 Remedies.       Upon the determination of a false certification under subsection  25.702-2-                                       (a) 						            The contracting officer may terminate the contract;                                          (b) 						            The suspending official may suspend the contractor in accordance with the procedures in  subpart  9.4; and                                          (c) 						            The debarring official may debar the contractor for a period not to exceed 3 years in accordance with the procedures in  subpart  9.4.25.702-4 Waiver.       (a) 						            The President may waive the requirement of subsection  25.702-2 on a case-by-case basis if the President determines and certifies in writing to the appropriate congressional committees that it is in the national interest to do so.                                          (b) 						            An agency seeking waiver of the requirement shall submit the request to the Administrator of the Office of Federal Procurement Policy (OFPP), allowing sufficient time for review and approval. Upon receipt of the waiver request, OFPP shall consult with the President’s National Security Council, Office of African Affairs, and the Department of State Sudan Office and Sanctions Office to assess foreign policy aspects of making a national interest recommendation.                                          (c) 						            Agencies may request a waiver on an individual or class basis; however, waivers are not indefinite and can be cancelled if warranted.                                                         (1) 								                A class waiver may be requested only when the class of supplies is not available from any other source and it is in the national interest.                                                            (2) 								                Prior to submitting the waiver request, the request must be reviewed and cleared by the agency head.                                                            (3) 								                All waiver requests must include the following information:                                                                           (i) 										                    Agency name, complete mailing address, and point of contact name, telephone number, and email address;                                                                              (ii) 										                    Offeror’s name, complete mailing address, and point of contact name, telephone number, and email address;                                                                              (iii) 										                    Description/nature of product or service;                                                                              (iv) 										                    The total cost and length of the contract;                                                                              (v) 										                    Justification, with market research demonstrating that no	other offeror can provide the product or service and stating	why the product or service must be procured from this	offeror, as well as why it is in the national interest for	the President to waive the prohibition on contracting with	this offeror that conducts restricted business operations in	Sudan, including consideration of foreign policy aspects	identified in consultation(s) pursuant to  25.702-4(b);                                                                              (vi) 										                    Documentation regarding the offeror’s past performance and integrity (see the Contractor Performance Assessment Reporting System (CPARS) including the Federal Awardee Performance Information and Integrity System at   https://www.cpars.gov and any other relevant information);                                                                              (vii) 										                    Information regarding the offeror’s relationship or connection with other firms that conduct prohibited business operations in Sudan; and                                                                              (viii) 										                    Any humanitarian efforts engaged in by the offeror, the human rights impact of doing business with the offeror for which the waiver is requested, and the extent of the offeror’s business operations in Sudan.                                                                                                                            (d) 						            The consultation in  25.702-4(b) and the information in  25.702-4(c)(3) will be considered in	determining whether to recommend that the President waive the requirement of	subsection  25.702-2. In	accordance with section 6(c) of the Sudan Accountability and Divestment Act	of 2007, OFPP will semiannually submit a report to Congress, on April 15 th	and October 15 th, on the waivers granted.25.703 Prohibition on contracting with entities that engage in certain activities or transactions relating to Iran.    25.703-1 Definitions.       As used in this section-          *Person*-(1) Means-                                                                                    (i) A natural person;                                                                                       (ii) A corporation, business association, partnership, society, trust, financial institution, insurer, underwriter, guarantor, and any other business organization, any other nongovernmental entity, organization, or group, and any governmental entity operating as a business enterprise; and                                                                                       (iii) Any successor to any entity described in paragraph (1)(ii) of this definition; and                                                                                                                          (2) Does not include a government or governmental entity that is not operating as a business enterprise.                         *Sensitive technology*-(1) Means hardware, software, telecommunications equipment, or any other technology that is to be used specifically-                                                                                                               (i) To restrict the free flow of unbiased information in Iran; or                                                                                                                  (ii) To disrupt, monitor, or otherwise restrict speech of the people of Iran; and                                                                                                                                                                       (2) Does not include information or informational materials the export of which the President does not have the authority to regulate or prohibit pursuant to section 203(b)(3) of the International Emergency Economic Powers Act (  50 U.S.C. 1702(b)(3)).25.703-2 Iran Sanctions Act.       (a)                   *Certification*.                                                         (1)                         *Certification relating to activities described in section 5 of the Iran Sanctions Act.* As required by section 6(b)(1)(A) of the Iran Sanctions Act (  50 U.S.C. 1701 note), unless an exception applies in accordance with paragraph (c) of this subsection, or a waiver is granted in accordance with  25.703-4, each offeror must certify that the offeror, and any person owned or controlled by the offeror, does not engage in any activity for which sanctions may be imposed under section 5 of the Iran Sanctions Act. Such activities, which are described in detail in section 5 of the Iran Sanctions Act, relate to the energy sector of Iran and development by Iran of weapons of mass destruction or other military capabilities.                                                            (2)                         *Certification relating to transactions with Iran's Revolutionary Guard Corps.* As required by section 6(b)(1)(B) of the Iran Sanctions Act (  50 U.S.C. 1701 note), unless an exception applies in accordance with paragraph (c) of this subsection, or a waiver is granted in accordance with  25.703-4, each offeror must certify that the offeror, and any person owned or controlled by the offeror, does not knowingly engage in any significant transaction (*i.e.*, a transaction that exceeds $10,000, with Iran's Revolutionary Guard Corps or any of its officials, agents, or affiliates, the property and interests in property of which are blocked pursuant to the International Emergency Economic Powers Act (  50 U.S.C. 1701                         *et seq*.)(see OFAC’s Specially Designated Nationals and Blocked Persons List at   https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx).                                                                             (b)                   *Remedies*. Upon the determination of a false certification under paragraph (a) of this section, the agency shall take one or more of the following actions:                                                         (1) The contracting officer terminates the contract in accordance with procedures in part  49, or for commercial products and commercial services, see  12.403.                                                            (2) The suspending official suspends the contractor in accordance with the procedures in subpart  9.4.                                                            (3) The debarring official debars the contractor for a period of at least two years in accordance with the procedures in subpart  9.4.                                                                             (c)                   *Exception for trade agreements*. The certification requirements of paragraph (a) of this subsection do not apply if the acquisition is subject to trade agreements and the offeror certifies that all the offered products are designated country end products or designated country construction material (see subpart  25.4).25.703-3 Prohibition on contracting with entities that export sensitive technology to Iran.       (a) 						            The head of an executive agency may not enter into or extend a contract for the procurement of goods or services with a person that exports certain sensitive technology to Iran, as determined by the President, and has an active exclusion in the System for Award Management at   http://www.sam.gov (  22 U.S.C. 8515).                                          (b) 						            Each offeror must represent that it does not export any sensitive technology to the government of Iran or any entities or individuals owned or controlled by, or acting on behalf or at the direction of, the government of Iran.                                          (c)                   *Exception for trade agreements*. The representation requirement of paragraph (b) of this subsection does not apply if the acquisition is subject to trade agreements and the offeror certifies that all the offered products are designated country end products or designated country construction material (see subpart  25.4).25.703-4 Waiver.       (a) 						            An agency or contractor seeking	a waiver of the requirements of  25.703-2 or  25.703-3, consistent with	section 6(b)(5) of the Iran Sanctions Act or   22 U.S.C. 8551(b),	respectively, and the Presidential Memorandum of September 23, 2010 (75	FR 67025), shall submit the request to the Office of Federal Procurement	Policy, allowing sufficient time for review and approval.                                          (b) 						            Agencies	may request a waiver on an individual or class basis; however, waivers	are not indefinite and can be cancelled, if warranted.                                                         (1) 								                A	class waiver may be requested only when the class of supplies or	equipment is not available from any other source and it is in the	national interest.                                                            (2) 								                Prior to	submitting the waiver request, the request must be reviewed and	cleared by the agency head.                                                                             (c) 						            In general,	all waiver requests should include the following information:                                                         (1) 								                Agency	name, complete mailing address, and point of contact name, telephone	number, and e-mail address.                                                            (2) 								                Offeror’s	name, complete mailing address, and point of contact name, telephone	number, and e-mail address.                                                            (3) 								                Description/nature	of product or service.                                                            (4) 								                The total	cost and length of the contract.                                                            (5) 								                Justification,	with market research demonstrating that no other offeror can provide	the product or service and stating why the product or service must	be procured from this offeror.                                                                           (i) 										                    If the offeror	exports sensitive technology to the government of Iran or any entities	or individuals owned or controlled by, or acting on behalf or at	the direction of, the government of Iran, provide rationale why	it is in the national interest for the President to waive the prohibition	on contracting with this offeror, as required by   22 U.S.C. 8551(b).                                                                              (ii) 										                    If the	offeror conducts activities for which sanctions may be imposed under	section 5 of the Iran Sanctions Act or engages in any transaction	that exceeds the threshold	at  25.703-2(a)(2) with	Iran’s Revolutionary Guard Corps or any of its officials, agents,	or affiliates, the property and interests in property of which are	blocked pursuant to the International Emergency Economic Powers	Act, provide rationale why it is essential to the national security interests	of the United States for the President to waive the prohibition	on contracting with this offeror, as required by section 6(b)(5)	of the Iran Sanctions Act.                                                                                                           (6) 								                Documentation	regarding the offeror’s past performance and integrity (see the	Contractor Performance Assessment Reporting System (CPARS) and the	Federal Awardee Performance Information and Integrity System at   https://www.cpars.gov,	and any other relevant information).                                                            (7) 								                Information	regarding the offeror’s relationship or connection with other firms	that-                                                                           (i) 										                    Export sensitive technology to	the government of Iran or any entities or individuals owned or controlled	by, or acting on behalf or at the direction of, the government of	Iran;                                                                              (ii) 										                    Conduct	activities for which sanctions may be imposed under section 5 of	the Iran Sanctions Act; or                                                                              (iii) 										                    Conduct	any transaction that exceeds the	threshold at  25.703-2(a)(2) with	Iran’s Revolutionary Guard Corps or any of its officials, agents,	or affiliates, the property and interests in property of which are	blocked pursuant to the International Emergency Economic Powers	Act.                                                                                                           (8) 								                Describe-                                                                           (i) 										                    The	sensitive technology and the entity or individual to which it was	exported (i.e., the government of Iran or an entity or individual	owned or controlled by, or acting on behalf or at the direction	of, the government of Iran);                                                                              (ii) 										                    The activities	in which the offeror is engaged for which sanctions may be imposed	under section 5 of the Iran Sanctions Act; or                                                                              (iii) 										                    The	transactions that exceed the	threshold at  25.703-2(a)(2) with	Iran’s Revolutionary Guard Corps or any of its officials, agents,	or affiliates, the property and interests in property of which are	blocked pursuant to the International Emergency Economic Powers	Act.
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