Federal Register / Vol. 65, No. 208 / Thursday, October 26, 2000 / Rules and Regulations 64137

1 17 CFR 240.9b–1.

2 15 U.S.C. 78a et seq.

3Securities Exchange Act Release No. 40129

(June 25, 1998), 63 FR 36138 (July 1, 1998)

(‘‘Proposing Release’’).

4The term ‘‘standardized options’’ is defined as

‘‘options contracts trading on a national securities

exchange, an automated quotation system of a

registered securities association, or a foreign

securities exchange which relate to options classes

the terms of which are limited to specific expiration

date and exercise prices, or such other securities as

the Commission may, by order, designate.’’ 17 CFR

240.9b–1(a)(4).

5The term ‘‘options market’’ is defined as ‘‘a

national securities exchange, an automated

quotation system of a registered securities

association or a foreign securities exchange on

which standardized options are traded.’’ 17 CFR

240.9b–1(a)(1).

6See Securities Exchange Act Release Nos. 18836

(June 24, 1982), 47 FR 28688 (July 1, 1982) (‘‘1982

Proposing Release’’) and 19055 (Sept. 16, 1982), 47

FR 41950 (Sept. 23, 1982) (‘‘1982 Adopting

Release’’). 7 1982 Proposing Release, id. at 47 FR 28688. 8Concurrent with the adoption of Rule 9b–1, the

Commission adopted a Form S–20 for the

registration of standardized options under the

Securities Act. 1982 Adopting Release, supra note

6, 47 FR at 41951–2. This Form requires the filing

of information relating to standardized options and

their issuer. The Form must be filed with the

Commission by the issuer and become effective

before an options disclosure document may be

distributed. 17 CFR 240.9b–1(b)(1).

§ 140.72 [Amended]

2. Paragraph (a) of § 140.72 is

amended by removing ‘‘and each of the

Directors of the Market Surveillance

Branches’’ and adding, ‘‘each of the

Directors of the Market Surveillance

Branches, the Director of the Office of

International Affairs and the Deputy

Director of the Office of International

Affairs’’ in its place.

§ 140.73 [Amended]

3. Paragraph (a) of § 140.73 is

amended by adding, ‘‘and the Director

of the Office of International Affairs or,

in his or her absence, the Deputy

Director of the Office of International

Affairs’’ after ‘‘each Deputy Director of

the Division of Trading and Markets.’’

Issued in Washington, DC on October 19,

2000 by the Commission.

Jean A. Webb,

Secretary of the Commission.

[FR Doc. 00–27481 Filed 10–25–00; 8:45 am]

BILLING CODE 6351–01–M

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Part 240

[Release No. 34–43461, File No. S7–18–98]

RIN 3235–AH30

Amendments to Rule 9b–1 Under the

Securities Exchange Act of 1934

Relating to the Options Disclosure

Document

AGENCY: Securities and Exchange

Commission.

ACTION: Final rule.

SUMMARY: The Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

is adopting amendments to Rule 9b–1

(‘‘Rule’’) under the Securities Exchange

Act of 1934 (‘‘Exchange Act’’). Rule 9b–

1 governs the filing and dissemination

of, and the information to be included

in, an options disclosure document. The

amendments are intended to provide

greater clarity to the Rule’s provisions,

while continuing a regulatory scheme

that fosters investors’ understanding of

the characteristics and risks of

standardized options.

EFFECTIVE DATE: This final rule is

effective November 27, 2000.

FOR FURTHER INFORMATION CONTACT:

Nancy J. Sanow, Assistant Director, at

(202) 942–0796, or Steven Johnston,

Special Counsel, at (202) 942–0795,

Office of Market Supervision, Division

of Market Regulation, 450 Fifth Street,

NW., Washington, DC 20549–1001.

SUPPLEMENTARY INFORMATION: The

Commission is adopting amendments to

Rule 9b–1 1 under the Securities

Exchange Act of 1934 2 to make

technical and clarifying changes to the

Rule to better reflect the disclosure

requirements regarding standardized

options.

I. Introduction

In June 1998, the Commission

published for comment amendments to

Rule 9b–1 under the Exchange Act to

revise certain language in the Rule to

better reflect the disclosure

requirements regarding standardized

options.3 The changes are minor or

technical in nature and do not alter the

basic purpose of the Rule, namely, to

ensure the dissemination of essential

options information to less

sophisticated investors in a manner that

they can easily understand. The changes

should also help to ensure that the Rule

addresses the evolving nature of the

markets for standardized options.4 The

Commission received two comments

supporting the proposal and is adopting

the revisions as proposed.

II. Background

In general, Rule 9b–1: (i) Specifies

when a self-regulatory organization is

required to file an options disclosure

document (‘‘ODD’’) with the

Commission; (ii) itemizes the

information required to be contained in

the ODD; (iii) describes the

Commission’s process of reviewing a

preliminary ODD; and (iv) establishes

the obligations of broker-dealers to

furnish the ODD prior to approving a

customer’s account for trading in

options.

Rule 9b–1 provides that an options

disclosure document containing the

information specified in paragraph (c) of

the Rule must be filed with the

Commission by an options market 5 at

least 60 days prior to the date definitive

copies of the document are furnished to

customers. Rule 9b–1(c) specifies that,

with respect to the options classes

covered by the ODD, the document must

contain, among other things, a

discussion of the mechanics of buying,

writing, and exercising the options; the

risks of trading the options; the market

for the option; and a brief reference to

the transaction costs, margin

requirements, and tax consequences of

options trading. Further, Rule 9b–1(d)

provides that no broker or dealer shall

accept an options order from a

customer, or approve the customer’s

account for the trading of options,

‘‘unless the broker or dealer furnishes or

has furnished to the customer the

options disclosure document.’’

Adopted in 1982, the Rule is intended

to foster better investor understanding

of standardized options trading and to

reduce the costs of issuer compliance

with the registration requirements of the

Securities Act of 1933 (‘‘Securities

Act’’).6 Prior to the Rule’s adoption, it

was necessary for an options issuer to

file a registration statement containing

detailed information about the issuer of

the options and the mechanics of

options trading, to meet the registration

requirements of the Securities Act.

These registration requirements,

however, made the prospectus ‘‘lengthy

and complicated’’ and did not meet the

needs of less sophisticated options

investors.7 Accordingly, the

Commission developed a disclosure

document that contains information

concerning the risks and uses of options

trading and presents the information in

a manner easily understandable by

investors lacking a financial

background. With the adoption of Rule

9b–1, the Commission established a new

disclosure procedure specifically geared

to satisfying the information needs of

investors in standardized options.8

Following the adoption of Rule 9b–1,

an options disclosure document was

prepared jointly by The American Stock

Exchange LLC, the Chicago Board

Options Exchange, Inc. (‘‘CBOE’’), the

Pacific Exchange, Inc., the Philadelphia

Stock Exchange, Inc., and The Options

Clearing Corporation (‘‘OCC’’). The

64138 Federal Register / Vol. 65, No. 208 / Thursday, October 26, 2000 / Rules and Regulations

9 In addition to the ODD utilized by the U.S.

options exchanges, several foreign markets have

filed ODDs with the Commission which enables

them to effect options transactions with U.S. market

participants under certain conditions. These ODDs

are modeled after the U.S. options market ODD.

10See Letter from James Yong, First Vice

President and General Counsel, The Options

Clearing Corporation, to Jonathan G. Katz,

Secretary, Securities and Exchange Commission,

dated August 26, 1998 (‘‘OCC Letter’’); Letter from

Edith Hallahan, Vice President and Associate

General Counsel, Philadelphia Stock Exchange

(‘‘Phlx’’), to Jonathan G. Katz, Secretary, Securities

and Exchange Commission, dated August 28, 1998

(‘‘Phlx Letter’’).

11OCC Letter, p. 2.

12Phlx Letter, p. 1.

13See Securities Exchange Act Release No. 36841

(Feb. 14, 1996), 61 FR 6666 (Feb. 21, 1996) (order

approving the listing of FLEX Equity Options)

(CBOE–95–43).

14See Securities Exchange Act Release No. 35617

(Apr. 17, 1995), 60 FR 20132 (Apr. 24, 1995) (order

approving the listing of LEAPS) (CBOE–95–02).

15Rule 134a states that written materials related

to standardized options will not be deemed to be

a prospectus for purposes of Section 2(10) of the

Securities Act provided that, among other

conditions, such materials are limited to

explanatory information describing the general

nature of the standardized options markets. 17 CFR

230.134a. Rule 135b states that, for purposes of

Section 5 of the Securities Act, materials meeting

the requirements of Rule 9b–1 of the Exchange Act

will not be deemed to constitute either an offer to

sell or an offer to buy any security. 17 CFR

230.134b. 16 17 CFR 230.134a; 17 CFR 230.134b.

initial disclosure document consisted of

a single booklet that generally described

the risks and uses of exchange-listed

options on individual equity securities.

Since that time, several revised

disclosure booklets have been published

that describe, among other things, the

risks and uses of listed options on stock

indexes, debt instruments, and foreign

currencies. Currently, the ODD utilized

by the U.S. options exchanges is entitled

‘‘Characteristics and Risks of

Standardized Options.9

The Commission determined that

Rule 9b–1 would be clearer if certain

technical amendments were made.

While the substantive goals of the Rule

did not require revision, the Rule

required specific changes to make the

language more precise. The changes are

technical in nature and only codify

current practice as it has evolved over

time. The specific changes are discussed

more fully below.

III. Discussion

The Commission received two

comments on the proposed changes to

Rule 9b–1.10 The OCC commented that

the proposal would eliminate

uncertainty and urged the Commission

to promptly adopt the proposed changes

to Rule 9b–1.11 The Philadelphia Stock

Exchange, Inc. (‘‘Phlx’’) commented that

the proposed changes to Rule 9b–1

would better reflect the Rule’s

underlying intent and provide more

precise and clear language.12 The

Commission agrees with these

comments and is adopting Rule 9b–1 as

proposed.

Paragraph (a)(3) of the Rule, the

definition of an ‘‘options disclosure

document,’’ is being amended to

explicitly state that the amendments

and supplements to the ODD are

included as part of the ODD. New

financial products have been introduced

into the standardized options

marketplace such as Flexible Exchange

Options on specified equity securities

(‘‘FLEX Equity options’’) 13 and LongTerm Index Option series (‘‘LEAPS’’).14

Descriptions of these and other similar

products are often initially incorporated

into the ODD through a supplement and

delivered to the customer along with the

bound ODD. These amendments remove

the potential ambiguity regarding

whether such supplements are part of

the ODD and should be delivered to

customers. In addition, paragraph (a)(3)

of the Rule is being amended to conform

the definition of ‘‘definitive options

disclosure document’’ to Rules 134a and

135b under the Securities Act.15

Several technical clarifying changes

are also being made to the Rule. In

paragraph (b)(2)(i), the word ‘‘options’’

is inserted before the phrase ‘‘disclosure

document.’’ Similarly, in paragraph

(b)(2)(ii), the phrase ‘‘options disclosure

document’’ replaces the phrase ‘‘such

material,’’ and the phrase ‘‘options

classes covered by the document’’

replaces the more general language of

‘‘the subject standardized options

contracts.’’ In paragraphs (b)(2) (i) and

(ii), the Rule is also being amended to

clarify that both amendments and

supplements to the ODD are permissible

and clarifies the issuer’s obligation to

supply supplements to investors and the

Commission. Additionally, paragraph

(c)(6) is amended to add the phrase ‘‘the

identification of’’ before the phrase ‘‘the

issuer of the options.’’ The Commission

believes that the new language clarifies

the Rule language and eliminates

potential ambiguity.

The Rule’s current provisions

requiring that the ODD contain

information regarding the ‘‘mechanics of

buying, writing and exercising options,

including settlement procedures’’ and

‘‘the risks of trading options’’ are

amended to better reflect the

information that should be included in

the ODD. Specifically, paragraph (c)(2)

now requires a discussion of the

‘‘mechanics of exercising’’ options and

paragraph (c)(3) now requires a

discussion of the risks of ‘‘being a

holder or writer’’ of options. These

amendments are intended to make clear

that the exchanges are not required to

provide information via the ODD to

customers on how to ‘‘trade’’ options,

such as information regarding

investment strategies. To clarify the

intended scope of information included

within the ODD, paragraph (c)(4) of the

Rule is amended to require ‘‘the

identification of the market or markets

in which the options are traded,’’ rather

than a discussion of the ‘‘market for the

options.’’ Also, paragraph (c)(7) is

amended to require a ‘‘general’’

discussion of the ‘‘type’’ of instruments

underlying the options classes. The

Commission believes that these changes

help clarify the purpose of the ODD and

do not require any changes to the

current disclosures in the ODD.

Paragraphs (d)(1) and (2) are also

being amended to reflect the revised

definition of ‘‘definitive options

disclosure document’’ contained in

paragraph (a)(3). Again, this change

does not affect the substantive nature of

the Rule, but merely conforms the

terminology to accurately reflect

references in Rules 134a and 135b under

the Securities Act.16 Paragraph (d)(2) is

also being amended to reflect the

inclusion of supplements noted in

revised paragraphs (b)(2) (i) and (ii).

IV. Cost-Benefit Analysis

The Commission believes that the

amendments are likely to benefit

investors and do not have any costs

associated with them. To assist the

Commission in its evaluation of the

costs and benefits that may result from

the amendments, commenters were

requested to provide analysis and data,

if possible, relating to costs and benefits

associated with the proposal. While the

two comments received supported the

amendments, no comments were

received concerning the costs to

investors, broker-dealers or others. The

Commission anticipates that the

proposed amendments will not change

any substantive disclosure obligations

or currently existing compliance costs,

but will rather clarify the disclosure

requirements and goals regarding

standardized options products, and

thereby benefit investors.

V. Consideration of Burden on

Competition

Section 23(a)(2) of the Exchange Act

requires that the Commission, when

promulgating rules under the Exchange

Act, consider, among other matters, the

impact any such rules would have on

Federal Register / Vol. 65, No. 208 / Thursday, October 26, 2000 / Rules and Regulations 64139

17 15 U.S.C. 78w(a)(2).

18 15 U.S.C. 78c(f).

19 5 U.S.C. 605(b). 20 44 U.S.C. 3501 et seq.

competition and not adopt any rule that

would impose a burden on competition

that is not necessary or appropriate in

the public interest.17 In the Proposing

Release, the Commission solicited

comments on the effect on competition.

The Commission received no comments

regarding this issue. The Commission

has considered the amendments in light

of the standards cited in section 23(a)(2)

of the Exchange Act and believes that

they would not impose any burden on

competition.

Because the amendments are intended

to clarify the exchanges’ obligations to

make certain disclosures to customers

via the ODD, the changes should not

materially affect the substance of the

existing required disclosures or the

filing or delivery obligations under the

Rule. The Commission does not expect

that the amendments will impose any

additional costs on the exchanges and

will help to remove potential

ambiguities in the Rule. Thus, the

Commission believes that the

amendments should impose no burdens

on competition.

VI. Promotion of Efficiency,

Competition, and Capital Formation

Section 3(f)18 of the Exchange Act

requires the Commission, when

engaging in rulemaking that requires it

to consider or determine whether an

action is necessary or appropriate in the

public interest, to consider whether the

action will promote efficiency,

competition, and capital formation. No

comments were received on this point.

The Commission believes that the

amendments will reduce potential

investor confusion and help to clarify

the Rule’s goals and objectives. In

addition, the Commission believes that

making such clarifying changes to the

Rule will help to enhance the operation

of the options markets. The Commission

further believes that the changes to the

Rule will help issuers understand their

obligations and enhance opportunities

for capital formation in the options

markets. Accordingly, the Commission

believes that the amendments being

adopted today promote efficiency,

competition, and capital formation.

VII. Regulatory Flexibility Act

Consideration

Pursuant to section 605(b) of the

Regulatory Flexibility Act,19 the

Chairman of the Commission has

certified that Rule 9b–1 would not have

a significant economic impact on a

substantial number of small entities.

This certification, including the reasons

therefore, was attached to the Proposing

Release as Appendix A. The

Commission solicited comments

concerning the impact on small entities

and the Regulatory Flexibility Act

certification, but received no comments.

VIII. Paperwork Reduction Act

Certain provisions of Rule 9b–1

contain ‘‘collection of information’’

requirements within the meaning of the

Paperwork Reduction Act of 1995

(‘‘PRA’’).20 The Commission previously

submitted the Rule to the Office of

Management and Budget (‘‘OMB’’) for

review in accordance with 44 U.S.C.

3507(d) and OMB has assigned the Rule

OMB control number 3235–0480.

Because the amendments should not

materially affect the substance of the

required disclosures or the filing and

delivery obligations under the Rule,

there is no requirement that the

Commission resubmit the Rule with the

amendments to OMB for review under

the PRA. The Commission received no

comments regarding the analysis under

the Paperwork Reduction Act.

IX. Statutory Basis

The amendments to Rule 9b–1 are

being adopted pursuant to 15 U.S.C. 78a

et seq., particularly sections 9 and 23 of

the Exchange Act.

List of Subjects in 17 CFR Part 240

Reporting and recordkeeping

requirements, Securities.

Text of the Rule Amendments

In accordance with the foregoing,

Title 17, Chapter II of the Code of

Federal Regulations is amended as

follows:

PART 240—GENERAL RULES AND

REGULATIONS, SECURITIES

EXCHANGE ACT OF 1934

1. The authority citation for part 240

continues to read in part as follows:

Authority: 15 U.S.C. 77c, 77d, 77g, 77j,

77s, 77z-2, 77eee, 77ggg, 77nnn, 77sss, 77ttt,

78c, 78d, 78f, 78i, 78j, 78j-1, 78k, 78k-1, 78l,

78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w,

78x, 78ll(d), 79q, 79t, 80a-20, 80a-23, 80a-29,

80a-37, 80b-3, 80b-4 and 80b-11, unless

otherwise noted.

* * * * *

2. Section 240.9b–1 is amended by

revising paragraphs (a)(3), (b)(2)(i),

(b)(2)(ii), (c), and (d) to read as follows:

§ 240.9b–1 Options disclosure

document.

(a) * * *

(3) ‘‘Options disclosure document’’

means a document, including all

amendments and supplements thereto,

prepared by one or more options

markets which has been filed with the

Commission or distributed in

accordance with paragraph (b) of this

section. ‘‘Definitive options disclosure

document’’ or ‘‘document’’ means an

options disclosure document furnished

to customers in accordance with

paragraph (b) of this section.

* * * * *

(b)(1) * * *

(2)(i) If the information contained in

the options disclosure document

becomes or will become materially

inaccurate or incomplete or there is or

will be an omission of material

information necessary to make the

options disclosure document not

misleading, the options market shall

amend or supplement its options

disclosure document by filing five

copies of an amendment or supplement

to such options disclosure document

with the Commission at least 30 days

prior to the date definitive copies are

furnished to customers, unless the

Commission determines otherwise

having due regard to the adequacy of the

information disclosed and the public

interest and protection of investors. Five

copies of the definitive options

disclosure document, as amended or

supplemented, shall be filed with the

Commission not later than the date the

amendment or supplement, or the

amended options disclosure document,

is furnished to customers.

(ii) Notwithstanding paragraph

(b)(2)(i) of this section, an options

market may distribute an amendment or

supplement to an options disclosure

document prior to such 30 day period

if it determines, in good faith, that such

delivery is necessary to ensure timely

and accurate disclosure with respect to

one or more of the options classes

covered by the document. Five copies of

any amendment or supplement

distributed pursuant to this paragraph

shall be filed with the Commission at

the time of distribution. In that instance,

if the Commission determines, having

given due regard to the adequacy of the

information disclosed and the public

interest and the protection of investors,

it may require refiling of the amendment

pursuant to paragraph (b)(2)(i) of this

section.

(c) Information required in an options

disclosure document. An options

disclosure document shall contain the

following information, unless otherwise

provided by the Commission, with

respect to the options classes covered by

the document:

64140 Federal Register / Vol. 65, No. 208 / Thursday, October 26, 2000 / Rules and Regulations

(1) A glossary of terms;

(2) A discussion of the mechanics of

exercising the options;

(3) A discussion of the risks of being

a holder or writer of the options;

(4) The identification of the market or

markets in which the options are traded;

(5) A brief reference to the transaction

costs, margin requirements and tax

consequences of options trading;

(6) The identification of the issuer of

the options;

(7) A general identification of the type

of instrument or instruments underlying

the options class or classes covered by

the document;

(8) The registration of the options on

Form S–20 (17 CFR 239.20) and the

availability of the prospectus and the

information in Part II of the registration

statement; and

(9) Such other information as the

Commission may specify.

(d) Broker-dealer obligations. (1) No

broker or dealer shall accept an order

from a customer to purchase or sell an

option contract relating to an options

class that is the subject of a definitive

options disclosure document, or

approve the customer’s account for the

trading of such option, unless the broker

or dealer furnishes or has furnished to

the customer a copy of the definitive

options disclosure document.

(2) If a definitive options disclosure

document relating to an options class is

amended or supplemented, each broker

and dealer shall promptly send a copy

of the definitive amendment or

supplement or a copy of the definitive

options disclosure document as

amended to each customer whose

account is approved for trading the

options class or classes to which the

amendment or supplement relates.

Dated: October 19, 2000.

By the Commission.

Jonathan G. Katz,

Secretary.

[FR Doc. 00–27479 Filed 10–25–00; 8:45 am]

BILLING CODE 8010–01–P

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 12

[T.D. 00–75]

RIN 1515–AC70

Import Restrictions Imposed On

Archaeological Material From the

Prehispanic Cultures of the Republic

of Nicaragua

AGENCY: Customs Service, Treasury.

ACTION: Final rule.

SUMMARY: This document amends the

Customs Regulations to reflect the

imposition of import restrictions on

certain archaeological material ranging

in date from approximately 8000 B.C.

through approximately 1500 A.D. and

representing prehispanic cultures of the

Republic of Nicaragua. These

restrictions are being imposed pursuant

to an agreement between the United

States and Nicaragua that has been

entered into under the authority of the

Convention on Cultural Property

Implementation Act in accordance with

the United Nations Educational,

Scientific and Cultural Organization

(UNESCO) Convention on the Means of

Prohibiting and Preventing the Illicit

Import, Export and Transfer of

Ownership of Cultural Property. The

document amends the Customs

Regulations by adding Nicaragua to the

list of countries for which an agreement

has been entered into for imposing

import restrictions. The document also

contains the Designated List of

Archaeological Material that describes

the types of articles to which the

restrictions apply.

EFFECTIVE DATE: October 26, 2000.

FOR FURTHER INFORMATION CONTACT:

(Legal Aspects) Joanne Stump,

Intellectual Property Rights Branch

(202) 927–2330; (Operational Aspects)

Al Morawski, Trade Operations (202)

927–0402.

SUPPLEMENTARY INFORMATION:

Background

The value of cultural property,

whether archaeological or ethnological

in nature, is immeasurable. Such items

often constitute the very essence of a

society and convey important

information concerning a people’s

origin, history, and traditional setting.

The importance and popularity of such

items regrettably makes them targets of

theft, encourages clandestine looting of

archaeological sites, and results in their

illegal export and import.

The U.S. shares in the international

concern for the need to protect

endangered cultural property. The

appearance in the U.S. of stolen or

illegally exported artifacts from other

countries where there has been pillage

has, on occasion, strained our foreign

and cultural relations. This situation,

combined with the concerns of

museum, archaeological, and scholarly

communities, was recognized by the

President and Congress. It became

apparent that it was in the national

interest for the U.S. to join with other

countries to control illegal trafficking of

such articles in international commerce.

The U.S. joined international efforts

and actively participated in

deliberations resulting in the 1970

UNESCO Convention on the Means of

Prohibiting and Preventing the Illicit

Import, Export and Transfer of

Ownership of Cultural Property (823

U.N.T.S. 231 (1972)). U.S. acceptance of

the 1970 UNESCO Convention was

codified into U.S. law as the

‘‘Convention on Cultural Property

Implementation Act’’ (Pub.L. 97–446, 19

U.S.C. 2601 et seq.) (‘‘the Act’’). This

was done to promote U.S. leadership in

achieving greater international

cooperation towards preserving cultural

treasures that are of importance to the

nations from where they originate and

in achieving greater international

understanding of mankind’s common

heritage.

During the past several years, import

restrictions have been imposed on

archaeological and ethnological artifacts

of a number of signatory nations. These

restrictions have been imposed as a

result of requests for protection received

from those nations as well as pursuant

to bilateral agreements between the

United States and other countries. More

information on import restrictions can

be found on the International Cultural

Property Protection web site (http://

exchanges.state.gov/education/culprop).

Import restrictions are now being

imposed on certain archaeological

material of Nicaragua representing the

prehispanic period of its cultural

heritage as the result of a bilateral

agreement entered into between the

United States and Nicaragua pursuant to

19 U.S.C. 2602. This agreement was

signed on June 16, 1999, and, following

completion by the Government of

Nicaragua of all internal legal

requirements, entered into force on

October 20, 2000, with the exchange of

diplomatic notes. Accordingly,

§ 12.104g(a) of the Customs Regulations

is being amended to indicate that

restrictions have been imposed pursuant

to the agreement between the United

States and Nicaragua. This document

amends the regulations by imposing

import restrictions on certain

archaeological material from Nicaragua

as described below.

Material Encompassed in Import

Restrictions

In reaching the decision to

recommend protection for Nicaragua’s

cultural patrimony, the Deputy Director

of the former U.S. Information Agency

(USIA) has determined that, pursuant to

the requirements of the Act, the cultural

patrimony of Nicaragua is in jeopardy

from the pillage of archaeological

materials which represent its