[Federal Register Volume 83, Number 125 (Thursday, June 28, 2018)]
[Rules and Regulations]
[Pages 30335-30338]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13939]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 560


Iranian Transactions and Sanctions Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

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SUMMARY: The Department of the Treasury's Office of Foreign Assets 
Control (OFAC) is amending the Iranian Transactions and Sanctions 
Regulations (ITSR) to implement the President's May 8, 2018 decision to 
end the United States' participation in the Joint Comprehensive Plan of 
Action (JCPOA) on Iran's nuclear program, as outlined in National 
Security Presidential Memorandum-11 of May 8, 2018 (NSPM-11). 
Specifically, OFAC is amending the ITSR to: Amend the general licenses 
authorizing the importation into the United States of, and dealings in, 
Iranian-origin carpets and foodstuffs, as well as related letters of 
credit and brokering services, to narrow the scope of such general 
licenses to the wind down of such activities through August 6, 2018; 
add a new general license to authorize the wind down, through August 6, 
2018, of transactions related to the negotiation of contingent 
contracts for activities eligible for authorization under the Statement 
of Licensing Policy for Activities Related to the Export or Re-export 
to Iran of Commercial Passenger Aircraft and Related Parts and 
Services, which was rescinded following the issuance of NSPM-11; and 
add a new general license to authorize the wind down, through November 
4, 2018, of certain transactions relating to foreign entities owned or 
controlled by a United States person.

DATES: Effective Date: June 27, 2018.

FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for 
Licensing, tel.: 202-622-2480; Assistant Director for Regulatory 
Affairs, tel.: 202-622-4855; Assistant Director for Sanctions 
Compliance & Evaluation, tel.: 202-622-2490; or the Department of the 
Treasury's Office of the Chief Counsel (Foreign Assets Control), Office 
of the General Counsel, tel.: 202-622-2410.

SUPPLEMENTARY INFORMATION: 

Electronic Availability

    This document and additional information concerning OFAC are 
available on OFAC's website (www.treasury.gov/ofac).

Background

    On May 8, 2018, the President issued NSPM-11, which set forth his 
decision to end the United States' participation in the JCPOA. In NSPM-
11, the

[[Page 30336]]

President directed the Secretary of State and the Secretary of the 
Treasury to immediately begin taking steps to re-impose all United 
States sanctions lifted or waived in connection with the JCPOA as 
expeditiously as possible, and in no case later than 180 days from the 
date of NSPM-11. Today, OFAC is amending the ITSR, 31 CFR part 560, to 
issue wind-down authorizations for activities involving Iran that were 
previously authorized by OFAC in connection with the U.S. sanctions 
relief provided for under the JCPOA. In conjunction with this action, 
OFAC has revoked General License H and General License I, two 
authorizations for activities involving Iran that were previously 
issued by OFAC in connection with the U.S. sanctions relief provided 
for under the JCPOA.
    On January 16, 2016, OFAC issued General License H to license 
certain transactions relating to foreign entities owned or controlled 
by a United States person. At the time of its issuance, General License 
H was posted on OFAC's website (www.treasury.gov/ofac).
    Also on January 16, 2016, OFAC issued a Statement of Licensing 
Policy for Activities Related to the Export or Re-export to Iran of 
Commercial Passenger Aircraft and Related Parts and Services (JCPOA 
SLP). At the time of its issuance, the JCPOA SLP was posted on OFAC's 
website (www.treasury.gov/ofac). Following the issuance of NSPM-11, 
OFAC rescinded the JCPOA SLP and posted an archived version of the 
JCPOA SLP on its website for reference purposes.
    On January 21, 2016, OFAC amended the ITSR to license the 
importation into the United States of certain Iranian-origin carpets 
and foodstuffs, including pistachios and caviar (81 FR 3330). 
Specifically, OFAC added Sec.  560.534 to the ITSR to authorize by 
general license the importation into the United States of, and dealings 
in, certain Iranian-origin foodstuffs and carpets from Iran or a third 
country. OFAC also added Sec.  560.535 to the ITSR to authorize by 
general license certain letters of credit and brokering services 
relating to certain Iranian-origin foodstuffs and carpets.
    On March 24, 2016, OFAC issued General License I to authorize 
certain transactions related to the negotiation of, and entry into, 
contingent contracts for activities eligible for authorization under 
the JCPOA SLP. At the time of its issuance, General License I was 
posted on OFAC's website (www.treasury.gov/ofac).
    Today, OFAC is amending the ITSR to implement the wind-down 
authorizations for the above-referenced activities involving Iran that 
were previously authorized by OFAC pursuant to the ITSR in connection 
with the U.S. sanctions relief provided for under the JCPOA.
    First, OFAC is amending Sec.  560.534 to narrow the scope of that 
general license to authorize, through 11:59 p.m. eastern daylight time 
on August 6, 2018, only the wind down of transactions related to the 
importation into the United States of, and dealings in, certain 
Iranian-origin foodstuffs and carpets. U.S. persons will be authorized 
to engage in all transactions and activities that are ordinarily 
incident and necessary to the wind down of transactions that were 
previously authorized under Sec.  560.534. After 11:59 p.m. eastern 
daylight time on August 6, 2018, no further transactions are authorized 
under amended Sec.  560.534.
    OFAC is also amending Sec.  560.535 to narrow the scope of that 
general license to authorize, through 11:59 p.m. eastern daylight time 
on August 6, 2018, only the wind down of transactions related to 
letters of credit and brokering services relating to certain Iranian-
origin foodstuffs and carpets. U.S. persons will be authorized to 
engage in all transactions and activities that are ordinarily incident 
and necessary to the wind down of transactions that were previously 
authorized under Sec.  560.535. After 11:59 p.m. eastern daylight time 
on August 6, 2018, no further transactions are authorized under amended 
Sec.  560.535.
    In addition, OFAC is adding Sec.  560.536 to authorize, through 
11:59 p.m. eastern daylight time on August 6, 2018, all transactions 
and activities that are ordinarily incident and necessary to the wind 
down of transactions related to the negotiation of contingent contracts 
for activities that were, at the time of the negotiation, eligible for 
authorization under the JCPOA SLP. This wind-down authorization enables 
U.S. persons to wind down, through August 6, 2018, activities that were 
previously authorized pursuant to General License I. In conjunction 
with this action, OFAC has revoked General License I and has posted an 
archived version of General License I on its website (www.treasury.gov/ofac) for reference purposes. After 11:59 p.m. eastern daylight time on 
August 6, 2018, no further transactions are authorized under Sec.  
560.536.
    Finally, OFAC is adding Sec.  560.537 to authorize, through 11:59 
p.m. eastern standard time on November 4, 2018, all transactions and 
activities that are ordinarily incident and necessary to the wind down 
of transactions relating to foreign entities owned or controlled by a 
United States person that were previously authorized under General 
License H. In conjunction with this action, OFAC has revoked General 
License H and has posted an archived version of General License H on 
its website (www.treasury.gov/ofac) for reference purposes. After 11:59 
p.m. eastern standard time on November 4, 2018, no further transactions 
are authorized under Sec.  560.537.

Public Participation

    Because the amendment of the ITSR involves a foreign affairs 
function, the provisions of Executive Order 12866 and the 
Administrative Procedure Act (5 U.S.C. 553) requiring notice of 
proposed rulemaking, opportunity for public participation, and delay in 
effective date, as well as the provisions of Executive Order 13771, are 
inapplicable. Because no notice of proposed rulemaking is required for 
this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not 
apply.

Paperwork Reduction Act

    The collections of information related to the ITSR are contained in 
31 CFR part 501 (the ``Reporting, Procedures and Penalties 
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507), those collections of information have been approved by 
the Office of Management and Budget under control number 1505-0164. An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless the collection of 
information displays a valid control number.

List of Subjects in 31 CFR Part 560

    Administrative practice and procedure, Aircraft, Banks, Banking, 
Carpet, Civil aviation, Foodstuffs, Iran, Letters of credit.

    For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control amends 31 CFR chapter V as 
follows:

PART 560--IRANIAN TRANSACTIONS AND SANCTIONS REGULATIONS

0
1. The authority citation for part 560 continues to read as follows:

    Authority:  3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C. 
2349aa-9; 22 U.S.C. 7201-7211; 31 U.S.C. 321(b); 50 U.S.C. 1601-
1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 
note); Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); Pub. L. 
111-195, 124 Stat. 1312 (22 U.S.C. 8501-8551); Pub. L. 112-81, 125 
Stat. 1298 (22 U.S.C. 8513a); Pub. L. 112-158, 126 Stat. 1214 (22 
U.S.C. 8701-8795); E.O. 12613, 52 FR 41940,

[[Page 30337]]

3 CFR, 1987 Comp., p. 256; E.O. 12957, 60 FR 14615, 3 CFR, 1995 
Comp., p. 332; E.O. 12959, 60 FR 24757, 3 CFR, 1995 Comp., p. 356; 
E.O. 13059, 62 FR 44531, 3 CFR, 1997 Comp., p. 217; E.O. 13599, 77 
FR 6659, 3 CFR, 2012 Comp., p. 215; E.O. 13628, 77 FR 62139, 3 CFR, 
2012 Comp., p. 314.

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

0
2. Revise Sec.  560.534 to read as follows:


Sec.  560.534   Winding down of transactions related to the importation 
into the United States of, and dealings in, certain foodstuffs and 
carpets.

    (a) Except as provided in paragraphs (b) and (c) of this section, 
all transactions and activities that are ordinarily incident and 
necessary to the wind down of the following activities are authorized 
through 11:59 p.m. eastern daylight time on August 6, 2018:
    (1) The importation into the United States, from Iran or a third 
country, of the following goods of Iranian origin:
    (i) Foodstuffs intended for human consumption that are classified 
under chapters 2-23 of the Harmonized Tariff Schedule of the United 
States; and
    (ii) Carpets and other textile floor coverings and carpets used as 
wall hangings that are classified under chapter 57 or heading 
9706.00.0060 of the Harmonized Tariff Schedule of the United States.
    (2) United States persons, wherever located, engaging in 
transactions or dealings in or related to the categories of Iranian-
origin goods described in paragraph (a)(1) of this section, provided 
that the transaction or dealing does not involve or relate to goods, 
technology, or services for exportation, reexportation, sale, or 
supply, directly or indirectly, to Iran, the Government of Iran, an 
Iranian financial institution, or any other person whose property and 
interests in property are blocked pursuant to Sec.  560.211, other than 
services described in Sec.  560.405 (``Transactions ordinarily incident 
to a licensed transaction authorized'') and transfers of funds 
described in Sec.  560.516 (``Transfers of funds involving Iran'').
    (b) This general license does not authorize the importation into 
the United States of goods that were under seizure or detention by the 
Department of Homeland Security, as of January 21, 2016, pursuant to 
Customs regulations or other applicable provisions of law, until any 
applicable penalties, charges, duties, or other conditions are 
satisfied. This general license does not authorize the importation into 
the United States of goods for which forfeiture proceedings have 
commenced or of goods that have been forfeited to the U.S. Government, 
other than through U.S. Customs and Border Protection disposition, 
including by selling at auction.
    (c) Nothing in this section authorizes debits or credits to Iranian 
accounts, as defined in Sec.  560.320.

0
3. Revise Sec.  560.535 to read as follows:


Sec.  560.535   Winding down of transactions related to letters of 
credit and brokering services relating to certain foodstuffs and 
carpets.

    (a) Wind down. Except as provided in paragraph (b) of this section, 
all transactions and activities that are ordinarily incident and 
necessary to the wind down of the following activities are authorized 
through 11:59 p.m. eastern daylight time on August 6, 2018:
    (1) Purchases from Iran or the Government of Iran or certain other 
blocked persons. United States depository institutions issuing letters 
of credit in favor of a beneficiary in Iran, the Government of Iran, an 
Iranian financial institution, or any other person whose property and 
interests in property are blocked pursuant to Sec.  560.211 to pay for 
purchases from Iran or the Government of Iran of the categories of 
Iranian-origin goods described in Sec.  560.534(a)(1), provided that 
such letters of credit are not advised, negotiated, paid, or confirmed 
by the Government of Iran, an Iranian financial institution, or any 
other person whose property and interests in property are blocked 
pursuant to Sec.  560.211.
    (2) Transactions or dealings in Iranian-origin goods located in 
third countries, other than purchases from the Government of Iran or 
certain other blocked persons. United States depository institutions 
issuing, advising, negotiating, or confirming letters of credit to pay 
for transactions in or related to Iranian-origin goods described in 
Sec.  560.534(a)(1) and located in a third-country, other than 
purchases from the Government of Iran, an Iranian financial 
institution, or any other person whose property and interests in 
property are blocked pursuant to Sec.  560.211, provided that such 
letters of credit are not issued, advised, negotiated, paid, or 
confirmed by the Government of Iran, an Iranian financial institution, 
or any other person whose property and interests in property are 
blocked pursuant to Sec.  560.211.
    (3) Brokering. United States persons, wherever located, acting as 
brokers for the purchase or sale of the categories of Iranian-origin 
goods described in Sec.  560.534(a)(1), provided that the goods are not 
for exportation, reexportation, sale, or supply, directly or 
indirectly, to Iran, the Government of Iran, an Iranian financial 
institution, or any other person whose property and interests in 
property are blocked pursuant to Sec.  560.211.
    (b) Iranian accounts. Nothing in this section authorizes debits or 
credits to Iranian accounts, as defined in Sec.  560.320.

    Note 1 to Sec.  560.535: See Sec. Sec.  560.304 and 560.313 for 
information relating to individuals and entities that are included 
within the definition of the term Government of Iran and Sec.  
560.324 regarding entities included within the definition of the 
term Iranian financial institution. See Sec.  560.516 for 
information relating to authorized transfers to Iran by U.S. 
depository institutions relating to licensed transactions.


0
4. Add Sec.  560.536 to subpart E to read as follows:


Sec.  560.536   Winding down of transactions related to the negotiation 
of contingent contracts for activities eligible for authorization under 
the Statement of Licensing Policy for Activities Related to the Export 
or Re-export to Iran of Commercial Passenger Aircraft and Related Parts 
and Services.

    (a) All transactions and activities that are ordinarily incident 
and necessary to the wind down of the following activities are 
authorized through 11:59 p.m. eastern daylight time on August 6, 2018: 
U.S. persons engaging in all transactions ordinarily incident to the 
negotiation of contingent contracts for activities that were, at the 
time of the negotiation, eligible for authorization under the now-
rescinded Statement of Licensing Policy for Activities Related to the 
Export or Re-export to Iran of Commercial Passenger Aircraft and 
Related Parts and Services (JCPOA SLP).

    Note 1 to paragraph (a): OFAC has posted an archived copy of the 
JCPOA SLP on its website (www.treasury.gov/ofac) for reference 
purposes.

    (b) Nothing in paragraph (a) of this section authorizes the 
exportation, reexportation, sale, or supply, directly or indirectly, of 
any goods or technology to Iran, the Government of Iran, an Iranian 
financial institution, or any other person whose property and interests 
in property are blocked pursuant to Sec.  560.211.
    (c) For purposes of this section, the term ``contingent contract'' 
means a contract where the performance of the contract is made 
expressly contingent upon the issuance of a specific license by the 
Office of Foreign Assets Control authorizing the activities to be 
performed. For purposes of this section, the term ``contingent 
contract'' includes executory contracts, executory pro forma invoices, 
agreements in principle,

[[Page 30338]]

executory offers capable of acceptance such as bids or proposals in 
response to public tenders, binding memoranda of understanding, or any 
other similar agreement.

0
5. Add Sec.  560.537 to subpart E to read as follows:


Sec.  560.537   Winding down of transactions relating to foreign 
entities owned or controlled by a U.S. person.

    (a) Except as provided in paragraph (c) of this section, all 
transactions and activities that are ordinarily incident and necessary 
to the wind down of the following activities are authorized through 
11:59 p.m. eastern standard time on November 4, 2018: an entity owned 
or controlled by a United States person and established or maintained 
outside the United States (a ``U.S.-owned or -controlled foreign 
entity'') engaging in transactions, directly or indirectly, with the 
Government of Iran or any person subject to the jurisdiction of the 
Government of Iran that would otherwise be prohibited by Sec.  560.215.
    (b) All transactions and activities that are ordinarily incident 
and necessary to the wind down of the following activities are 
authorized through 11:59 p.m. eastern standard time on November 4, 
2018: A United States person engaging in the following:
    (1) Activities related to the establishment or alteration of 
operating policies and procedures of a United States entity or a U.S.-
owned or -controlled foreign entity, to the extent necessary to allow a 
U.S.-owned or -controlled foreign entity to engage in transactions 
authorized in paragraph (a) of this section; and
    (2) Activities to make available to those foreign entities that the 
U.S. person owns or controls any automated and globally integrated 
computer, accounting, email, telecommunications, or other business 
support system, platform, database, application, or server necessary to 
store, collect, transmit, generate, or otherwise process documents or 
information related to transactions authorized in paragraph (a) of this 
section.

    Note 1 to paragraph (b): See Sec.  560.208 for prohibitions on 
facilitation by United States persons, which remain in effect, with 
the exception of activities authorized in paragraph (b) of this 
section.

    (c) Paragraph (a) of this section does not authorize transactions 
involving:
    (1) The exportation, reexportation, sale, or supply, directly or 
indirectly, from the United States of any goods, technology, or 
services prohibited by Sec.  560.204 or the reexportation from a third 
country of any goods, technology, or services prohibited by Sec.  
560.205;
    (2) Any transfer of funds to, from, or through a United States 
depository institution or a United States-registered broker or dealer 
in securities;
    (3) Any person on OFAC's list of Specially Designated Nationals and 
Blocked Persons (SDN List), or any activity that would be prohibited by 
any part of 31 CFR chapter V other than part 560 if engaged in by a 
United States person or in the United States;
    (4) Any person identified on the List of Foreign Sanctions Evaders 
pursuant to Executive Order 13608;
    (5) Any activity involving any item (including information) subject 
to the Export Administration Regulations, 15 CFR parts 730 through 774 
(EAR), that is prohibited by, or otherwise requires a license under, 
part 744 of the EAR; or participation in any transaction involving a 
person whose export privileges have been denied pursuant to part 764 or 
766 of the EAR, without authorization from the Department of Commerce;
    (6) Any military, paramilitary, intelligence, or law enforcement 
entity of the Government of Iran, or any official, agent, or affiliate 
thereof;
    (7) Any activity that is sanctionable under Executive Order 12938 
or 13382 (relating to Iran's proliferation of weapons of mass 
destruction and their means of delivery, including ballistic missiles); 
Executive Order 13224 (relating to international terrorism); Executive 
Order 13572 or 13582 (relating to Syria); Executive Order 13611 
(relating to Yemen); or Executive Order 13553 or 13606, or section 2 or 
3 of Executive Order 13628 (relating to Iran's commission of human 
rights abuses against its citizens); or
    (8) Any nuclear activity involving Iran that is subject to the 
procurement channel established pursuant to paragraph 16 of the United 
Nations Security Council Resolution 2231 (2015) and Section 6 of Annex 
IV to the Joint Comprehensive Plan of Action of July 14, 2015 and that 
has not been approved through that procurement channel process.
    (d)(1) For purposes of paragraph (b)(2) of this section, the term 
``automated'' refers to a computer, accounting, email, 
telecommunications, or other business support system, platform, 
database, application, or server that operates passively and without 
human intervention to facilitate the flow of data between and among the 
United States person and its owned or controlled foreign entities.
    (2) For purposes of paragraph (b)(2) of this section, the term 
``globally integrated'' refers to a computer, accounting, email, 
telecommunications, or other business support system, platform, 
database, application, or server that is available to, and in general 
use by, the United States person's global organization, including the 
United States person and its owned or controlled foreign entities.
    (3) Paragraph (b)(2) of this section does not authorize the use of 
any automated computer, accounting, email, telecommunications, or other 
business support system, platform, database, application, or server in 
connection with any transfer of funds to, from, or through a United 
States depository institution or a United States-registered broker or 
dealer in securities.

    Dated: June 25, 2018.
Andrea Gacki,
Acting Director, Office of Foreign Assets Control.
[FR Doc. 2018-13939 Filed 6-27-18; 8:45 am]
 BILLING CODE 4810-AL-P