[Federal Register Volume 70, Number 177 (Wednesday, September 14, 2005)]
[Rules and Regulations]
[Pages 54258-54259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-18245]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 575


Iraqi Debt Unblocked

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

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SUMMARY: The Office of Foreign Assets Control (``OFAC'') of the U.S. 
Department of the Treasury is amending the Iraqi Sanctions Regulations, 
31 CFR part 575, to unblock debt in which the Government of Iraq has an 
interest.

DATES: This rule is effective September 9, 2005.

FOR FURTHER INFORMATION CONTACT: Chief of Policy Planning and Program 
Management, tel. 202/622-2500, or Chief Counsel, tel.: 202/622-2410, 
Office of Foreign Assets Control, Department of the Treasury, 
Washington, DC 20220 (not toll free numbers).

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 
against Iraq, including a complete trade embargo and a freeze of 
Government of Iraq property and interests in property, including any 
debt owed by the Government of Iraq (``Iraqi debt''). 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 (the ``Regulations''), implement Executive Orders 12722 
and 12724 and are administered by the Treasury Department's Office of 
Foreign Assets Control (``OFAC'').

[[Page 54259]]

    On May 22, 2003, the United Nations Security Council adopted 
Resolution 1483, which substantially lifted the multilateral economic 
sanctions with respect to Iraq. On July 29, 2004, the President issued 
Executive Order 13350 terminating the national emergency declared in 
Executive Order 12722 and revoking Executive Orders 12722 and 12724 and 
all other Executive orders based on that national emergency. 
Notwithstanding the termination of the national emergency, this new 
Executive order, pursuant to the President's authority under section 
207 of IEEPA (50 U.S.C. 1706), continues prohibitions with regard to 
transactions involving any property blocked pursuant to Executive Order 
12722 or Executive Order 12724 that remains blocked as of July 30, 
2004. Moreover, the new Executive order indicates that the termination 
``shall not affect any action taken or proceeding pending but not 
finally concluded'' as of July 30, 2004, any action or proceeding based 
on any act committed prior to such date, or ``any rights or duties that 
had matured or penalties that were incurred'' prior to that date.
    Because property blocked as of the termination of sanctions against 
Iraq remains blocked pursuant to Executive Order 13350, any Iraqi debt 
blocked pursuant to those sanctions has remained blocked. Because of 
the lifting of multilateral and U.S. sanctions against Iraq, including 
the resolution of issues relating to Iraqi debt, the Office of Foreign 
Assets Control is today issuing a new general license unblocking debt 
in which the Government of Iraq has an interest, subject to certain 
conditions.
    First, notwithstanding the new general license, transactions that 
remained prohibited by paragraphs (b)(3) and (b)(5) of 31 CFR 575.533 
continue to remain prohibited. Second, the general license does not 
authorize the purchase, exchange or settlement of debt in which the 
Government of Iraq has an interest utilizing funds or other property 
that is blocked pursuant to this part.

Procedural Matters

    Because the Iraqi Sanctions Regulations involve a foreign affairs 
function of the United States, the provisions in the Administrative 
Procedure Act (5 U.S.C. 553) requiring notice and public procedure and 
a delayed effective date are inapplicable. Because no notice of 
proposed rulemaking is required, the provisions of the Regulatory 
Flexibility Act (5 U.S.C. Chapter 6) do not apply.

Electronic and Facsimile Availability

    This file is available for download without charge in ASCII and 
Adobe Acrobat readable (*.PDF) formats at GPO Access. GPO Access 
supports HTTP, FTP, and Telnet at http://fedbbs.access.gpo.gov. It may 
also be accessed by modem dialup at 202/512-1387 followed by typing ``/
GO/FAC.'' Paper copies of this document can be obtained by calling the 
Government Printing Office at 202/512-1530. This document and 
additional information concerning the programs of the Office of Foreign 
Assets Control are available for downloading from the Office's Internet 
Home Page: http://www.treas.gov/ofac, or via FTP at ofacftp.treas.gov. 
Facsimiles of information are available through the Office's 24-hour 
fax-on-demand service: call 202/622-0077 using a fax machine, fax 
modem, or (within the United States) a touch-tone telephone.

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 in 31 CFR Part 575

    Administrative practice and procedure, Banks, banking, Blocking of 
assets, Foreign trade, Iraq, Penalties, Sanctions.

0
For the reasons set forth in the preamble, 31 CFR chapter V is amended 
as follows:

PART 575--IRAQI SANCTIONS REGULATIONS

0
1. The authority citation for 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; E.O. 13350, 69 FR 46055, 
July 29, 2004.

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

0
2. A new section 575.535 is added to read as follows:


Sec.  575.535  Iraqi Debt Unblocked.

    (a) Except as provided in paragraph (b) of this section, all 
transactions otherwise prohibited by this part that involve debts in 
which the Government of Iraq has an interest are authorized.
    (b) For purposes of this part:
    (1) This section does not authorize transactions that remain 
prohibited under the terms of paragraphs (b)(3) and (b)(5) of Sec.  
575.533 of this part.
    (2) This section does not authorize the purchase, exchange or 
settlement of debt in which the Government of Iraq has an interest 
utilizing funds or other property that is blocked pursuant to this 
part.

    Dated: September 6, 2005.
Robert W. Werner,
Director, Office of Foreign Assets Control.
Stuart A. Levey,
Under Secretary of the Treasury, Office of Terrorism and Financial 
Intelligence, Department of the Treasury.
[FR Doc. 05-18245 Filed 9-9-05; 12:57 pm]
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