18678 Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Rules and Regulations

(f) Example. The following example

illustrates the principles of this section.

The example does not address common

law doctrines or other authorities that

may apply to cause an additional period

to be included in the lease term or to

recharacterize a lease as a conditional

sale or otherwise for federal income tax

purposes. Unless otherwise indicated,

parties to the transactions are not

related to one another.

Example. Financial obligation with respect

to an additional period—(i) Facts. X, a

taxable corporation, and Y, a foreign airline

whose income is not subject to United States

taxation, enter into a lease agreement under

which X agrees to lease an aircraft to Y for

a period of 10 years. The lease agreement

provides that, at the end of the lease period,

Y is obligated to find a subsequent lessee

(replacement lessee) to enter into a

subsequent lease (replacement lease) of the

aircraft from X for an additional 10-year

period. The provisions of the lease agreement

require that any replacement lessee be

unrelated to Y and that it not be a tax-exempt

entity as defined in section 168(h)(2). The

provisions of the lease agreement also set

forth the basic terms and conditions of the

replacement lease, including its duration and

the required rental payments. In the event Y

fails to secure a replacement lease, the lease

agreement requires Y to make a payment to

X in an amount determined under the lease

agreement.

(ii) Application of this section. The lease

agreement between X and Y obligates Y to

make a payment in the event the aircraft is

not leased for the period commencing after

the initial 10-year lease period and ending on

the date the replacement lease is scheduled

to end. Accordingly, pursuant to paragraph

(b) of this section, the term of the lease

between X and Y includes such additional

period, and the lease term is 20 years for

purposes of section 168.

(iii) Facts modified. Assume the same facts

as in paragraph (i) of this Example, except

that Y is required to guarantee the payment

of rentals under the 10-year replacement

lease and to make a payment to X equal to

the present value of any excess of the

replacement lease rental payments specified

in the lease agreement between X and Y, over

the rental payments actually agreed to be

paid by the replacement lessee. Pursuant to

paragraph (b) of this section, the term of the

lease between X and Y includes the

additional period, and the lease term is 20

years for purposes of section 168.

(iv) Changes in status. If, upon the

conclusion of the stated duration of the lease

between X and Y, the aircraft either is

returned to X or leased to a replacement

lessee that is not a tax-exempt entity as

defined in section 168(h)(2), the subsequent

method of depreciation will be determined

pursuant to section 168(i)(5).

(g) Effective date—(1) In general.

Except as provided in paragraph (g)(2)

of this section, this section applies to

leases entered into on or after April 20,

1995.

(2) Special rules. Paragraphs (b)(1)(ii)

and (c) of this section apply to leases

entered into after April 26, 1996.

Margaret Milner Richardson,

Commissioner of Internal Revenue.

Approved: March 26, 1996.

Leslie Samuels,

Assistant Secretary of the Treasury.

[FR Doc. 96–10395 Filed 4–26–96; 8:45 am]

BILLING CODE 4830–01–U

Bureau of Alcohol, Tobacco and

Firearms

27 CFR Part 47

[Notice No. 821]

Removal of Certain Restrictions on

Importation of Defense Articles and

Defense Services From the Russian

Federation

AGENCY: Bureau of Alcohol, Tobacco

and Firearms (ATF), Department of the

Treasury.

ACTION: Statement of policy.

SUMMARY: The Bureau of Alcohol,

Tobacco and Firearms (ATF) is

announcing (1) that it will remove the

Russian Federation from the list of

countries from which defense articles

and defense services may not be

imported and (2) implementation of

restrictions on the importation of certain

firearms and ammunition located or

manufactured in the Russian Federation

or previously manufactured in the

Soviet Union in accordance with an

agreement between the United States

and the Russian Federation and the

guidance of the Secretary of State

regarding matters affecting world peace

and the external security and foreign

policy of the United States as expressed

in a letter dated April 5, 1996.

DATES: Removal of the Russian

Federation from the list of proscribed

countries was effective April 5, 1996.

FOR FURTHER INFORMATION CONTACT:

Mary Jo Hughes, Chief, Firearms and

Explosives Imports Branch, Bureau of

Alcohol, Tobacco and Firearms, 650

Massachusetts Avenue, NW.,

Washington, DC 20226 (202–927–8320).

SUPPLEMENTARY INFORMATION: By letter

dated April 5, 1996, the Secretary of

State advised the Director, ATF, that,

under the authority of Section 38 of the

Arms Export Control Act (AECA), 22

U.S.C. § 2778, it is no longer the policy

of the United States to deny licenses,

other approvals, exports and imports of

defense articles and defense services

destined for or originating in the

Russian Federation (Russia). The State

Department has requested that the

Director implement this decision

immediately with respect to his

authority over imports under Section 38

of the AECA and amend the regulation

at 27 CFR 47.52(a) to reflect this change

in foreign policy.

The State Department also advised

that the President decided to negotiate

an agreement with Russia concerning

the export of munitions. Carrying out

such an agreement and keeping out

unacceptable types of munitions from

the United States are U.S. foreign policy

concerns. In addition, the State

Department informed ATF that an

Agreement between the Government of

the United States of America and the

Government of the Russian Federation

on exports of firearms and ammunition

from the Russian Federation to the

United States of America (the

Agreement) was signed on April 3,

1996, and entered into force on that

date. On this basis, the State Department

advised the Department of the Treasury

that Treasury should exercise the

authority delegated to it under Section

38 of the AECA by denying applications

to import firearms and ammunition

located or manufactured in Russia or

previously manufactured in the Soviet

Union that would be inconsistent with

the Agreement. The State Department

advised Treasury that the foregoing did

not apply to conditional imports of

firearms and ammunition which would

serve as samples for purposes of

determining whether the items are of a

type authorized for importation under

the Agreement.

The Agreement provides that Russia

shall not allow the exportation to the

United States of (1) firearms other than

those specified on Annex A to the

Agreement; and (2) ammunition

specified in Annex B to the Agreement.

Nine handguns and 29 rifles are listed

in Annex A. One type of ammunition is

listed in Annex B. The Agreement also

provides that new types of firearms and

ammunition manufactured after

February 9, 1996, may not be exported

by Russia under the Agreement unless

the parties agree in writing to amend the

Agreement accordingly. The Agreement

is published in its entirety at the end of

this notice.

ATF has taken or will take the

following actions to implement the

above:

(1) ATF will remove Russia from the

list of countries from which defense

articles and defense services may not be

imported into the United States. A

Treasury Decision amending § 47.52(a)

to reflect this action will be published

in the near future.
Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Rules and Regulations 18679

(2) ATF will approve applications to

import defense articles and defense

services from Russia in accordance with

the guidance contained in the April 5,

1996, letter from the Department of

State. Consistent with that letter, only

firearms listed in Annex A of the

Agreement will be approved for

importation from Russia. Surplus

military curio or relic firearms

manufactured or located in Russia or

previously manufactured in the Soviet

Union will not be approved for

importation under 27 CFR 47.52(d)

unless the firearms are listed in Annex

A of the Agreement. Applications to

import from Russia ammunition listed

in Annex B will not be approved.

(3) ATF will not approve applications

to import from any country or territory

firearms and ammunition manufactured

in Russia or previously manufactured in

the Soviet Union that would be

inconsistent with the the Agreement.

(4) Firearms that are subject to the

AECA and the Agreement include any

nonautomatic, semiautomatic, or

automatic firearm to caliber .50

(12.7mm) inclusive, other than a

sporting shotgun, and any component or

part for such firearms.

(5) Prior to approval of an application

to import firearms and ammunition

located or manufactured in Russia or

previously manufactured in the Soviet

Union, ATF may require the conditional

importation of a sample of the firearm

or ammunition for examination to

determine whether it is of a type that

may be approved for importation

consistent with the Agreement.

(6) For purposes of the AECA, the

term ‘‘United States’’ is defined in 27

CFR 47.11 and includes Customs

bonded warehouses (CBWs) and foreign

trade zones (FTZs). Article 8 of the

Agreement provides that the Agreement

shall not affect the fulfillment of

contracts with respect to firearms or

ammunition entered or withdrawn from

warehouse for consumption in the

United States on or before February 9,

1996. This means that firearms and

ammunition entered into a CBW or FTZ

prior to February 9, 1996, that otherwise

could not be imported under the

restrictions set out above have been

imported within the meaning of Section

38 of the AECA and are not subject to

such restrictions.

(7) Permits authorizing the

importation of firearms and ammunition

whose exportation to the United States

is prohibited under the Agreement, with

the exception of those to which

paragraph (6) are applicable, are hereby

revoked. As required by 27 CFR

47.44(d), the revoked import permits

must be returned to the Firearms and

Explosives Imports Branch, ATF,

immediately. Pursuant to 27 CFR

47.44(c), holders of such permits may,

within 30 days of the date of publication

of this notice in the Federal Register,

make a written request for an

opportunity to present additional

information and to have a full review by

the Director. Any such requests will be

referred to the Department of State, as

appropriate, for its guidance on matters

affecting world peace and the external

security and foreign policy of the United

States.

Compliance With 5 U.S.C. Chapter 8

In accordance with 5 U.S.C. 808(2),

ATF has found that, consistent with

guidance from the Department of State

and for reasons of the foreign policy of

the United States, notice and public

procedure under 5 U.S.C. 801 are

unnecessary, impracticable, and

contrary to the public interest.

Text of Agreement; Agreement Between the

Government of the United States of America

and the Government of the Russian

Federation on Exports of Firearms and

Ammunition From the Russian Federation to

the United States of America

The Government of the United States of

America and the Government of the Russian

Federation, hereinafter referred to as the

‘‘Parties,’’

In the context of removing a number of

existing restrictions on the importation into

the United States of firearms and

ammunition from the Russian Federation;

Recognizing the foreign policy interest of

the Parties in expanding trade in firearms

and ammunition between the United States

and the Russian Federation in a manner

compatible with domestic security;

Recognizing the intention of the United

States of America that United States policy

with respect to access to the United States

market for firearms and ammunition be

applied in a nondiscriminatory manner to all

of its trading partners;

Wishing to promote trade and cooperation

on an equal and mutually beneficial basis

between the United States and the Russian

Federation and to expand economic

opportunities in the two countries;

Have agreed as follows:

Article 1: Definitions

The following definitions apply to this

Agreement:

(a) ‘‘Ammunition’’ means any ammunition,

cartridge case, primer, bullet, or propellent

powder designed for use in any firearm.

(b) ‘‘Firearm’’ means any nonautomatic,

semiautomatic, or automatic firearm, to

caliber .50 (12.7 mm) inclusive other than a

shotgun, or any component or part for such

firearm.

(c) ‘‘New model ammunition’’ means a

type of ammunition the manufacture of

which began after February 9, 1996.

(d) ‘‘New model firearm’’ means a type of

firearm the manufacture of which began after

February 9, 1996.

Article 2: Firearms and Ammunition Export

Prohibitions

The Government of the Russian Federation

shall not allow the exportation from the

Russian Federation, destined to the United

States, of the following firearms and

ammunition:

(a) any firearm, including any new model

firearm, except a firearm described in Annex

A to this Agreement;

(b) ammunition described in Annex B to

this Agreement; and

(c) new model ammunition.

Article 3: Consultations

(a) Each Party shall provide to the other

Party, on request, information necessary for

the implementation and enforcement of this

Agreement. A Party shall keep confidential

all information received from the other Party

that is designated by the providing Party as

confidential and shall not provide it to any

other government or any private person

without the providing Party’s written

consent.

(b) The Parties agree to consult promptly,

not later than 30 days after receipt of a

request from either Party, regarding any

matter concerning this Agreement.

(c) At any time, either Party may propose

that a firearm be added to or deleted from

Annex A or that ammunition be added to or

deleted from Annex B. The Parties shall

consult promptly regarding such a proposal

and may amend either Annex by written

agreement of the Parties.

(d) Where a question arises as to whether

a particular firearm or ammunition is subject

to the export prohibition in Article 2, the

Parties shall consult promptly. The firearm or

ammunition shall be subject to the export

prohibition pending resolution of the matter.

Article 4: Construction

Nothing in this Agreement shall be

construed to affect the applicability to

firearms, ammunition, or other products of

the laws and regulations of the United States

or the Russian Federation imposing

restrictions or requirements on importation.

Article 5: Actions To Ensure the

Effectiveness of this Agreement

Either Party may take any action, as

provided in its laws and regulations,

necessary to ensure the effectiveness of this

Agreement.

Article 6: Emergency Actions

If the Government of the United States

determines that the actual or prospective

importation of any firearm described in

Annex A or ammunition other than that

described in Annex B is causing or threatens

to cause damage to the domestic security of

the United States, the Government of the

United States reserves the right to take any

measure it deems appropriate consistent with

the Agreement on Trade Relations, signed

between the Union of Soviet Socialist

Republics and the United States of America

at Washington on June 1, 1990, as amended,

brought into force between the United States

of America and the Russian Federation

pursuant to an exchange of notes on June 17,

1992. The Government of the United States

shall consult with the Government of the
18680 Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Rules and Regulations

Russian Federation prior to taking any such

measure. If prior and prompt consultations

are not possible because of an emergency

situation, the Government of the United

States shall consult with the Government of

the Russian Federation as soon as possible

after taking the measure.

Article 7: Amendments

This Agreement may be amended by

written agreement of the Parties.

Article 8: No Effect on Articles in U.S.

Customs Territory

This Agreement shall not affect the

fulfillment of contracts with respect to

firearms or ammunition entered or

withdrawn from warehouse for consumption

in the United States on or before February 9,

1996.

Article 9: Annexes; Entry into Force;

Termination

(a) The Annexes to this Agreement are an

integral part of this Agreement.

(b) This Agreement shall enter into force

upon the date of its signature by both Parties.

(c) Either Party may terminate this

Agreement by providing written notification

to the other Party at least twelve months

prior to the date of termination.

Done at Washington on April 3, 1996, in

duplicate, in the English and Russian

languages, both texts being equally authentic.

lllllllllllllllllllll

signature

Ira Shapiro,

Ambassador, Senior Counsel, Negotiator,

Office of the U.S. Trade Representative.

For the Government of the United States of

America.

lllllllllllllllllllll

signature

Gennadiy Yanpolsky,

Deputy Chairman, State Committee on

Defense Industry Branches.

For the Government of the Russian

Federation.

Annex A

Firearms Permitted to Be Imported into the

United States from the Russian Federation

Pistols/Revolvers

1. German Model P08 Pistol

2. IZH 34M, .22 caliber Target Pistol

3. IZH 35M, .22 caliber Target Pistol

4. Mauser Model 1896 Pistol

5. MC–57–1 Pistol

6. MC–1–5 Pistol

7. Polish Vis Model 35 Pistol

8. Soviet Nagant Revolver

9. TOZ 35, .22 caliber Target Pistol

Rifles

1. BARS–4 Bolt Action Carbine

2. Biathlon Target Rifle, .22LR caliber

3. British Enfield Rifle

4. CM2, .22 caliber Target Rifle (also

known as SM2,

.22 caliber)

5. German Model 98K Rifle

6. German Model G41 Rifle

7. German Model G43 Rifle

8. IZH–94

9. LOS–7 Bolt Action Rifle

10. MC–7–07

11. MC–18–3

12. MC–19–07

13. MC–105–01

14. MC–112–02

15. MC–113–02

16. MC–115–1

17. MC–125/127

18. MC–126

19. MC–128

20. Saiga Rifle

21. Soviet Model 38 Carbine

22. Soviet Model 44 Carbine

23. Soviet Model 91/30 Rifle

24. TOZ 18, .22 caliber Bolt Action Rifle

25. TOZ 55

26. TOZ 78

27. Ural Target Rifle, .22LR caliber

28. VEPR Rifle

29. Winchester Model 1895, Russian Model

Rifle

Annex B

Ammunition Prohibited from Being Imported

into the United States from the Russian

Federation

1. 7.62X25mm caliber (also known as

7.63X25mm caliber or .30 Mauser)

Authority and Issuance

This notice is issued under the authority in

22 U.S.C. 2778.

Approved: April 19, 1996.

John W. Magaw,

Director.

[FR Doc. 96–10361 Filed 4–24–96; 4:32 pm]

BILLING CODE 4810–31–U

DEPARTMENT OF EDUCATION

34 CFR Parts 11, 50, 302, 358, 631, 632,

633, 634, 635, 653, 769, 770, 771, 772,

776, 777, 785, 786, 787, 788, 789, and

791

Removal of Regulations

AGENCY: Department of Education.

ACTION: Final regulations.

SUMMARY: The Secretary amends the

Code of Federal Regulations (CFR) to

remove unnecessary and obsolete

regulations. As a result of new

legislation, absence of funding, and

review in accordance with the

President’s regulatory reinvention

initiative, the Secretary has determined

that these regulations are no longer

needed or will become unnecessary in

the future. The Secretary takes this

action to remove the regulations from

the CFR.

EFFECTIVE DATE: Parts 11, 302, 358, 631,

632, 633, 634, 635, 653, 785, 786, 787,

788, 789, and 791 are removed effective

May 29, 1996. Parts 50, 769, 771, 772,

and 777 are removed effective October

1, 1996. Parts 770 and 776 are removed

effective October 1, 1997.

FOR FURTHER INFORMATION CONTACT:

Kenneth C. Depew, U.S. Department of

Education, Room 5112, FB–10, 600

Independence Avenue, SW.,

Washington, DC 20202–2241.

Telephone: (202) 401–8300. Individuals

who use a telecommunications device

for the deaf (TDD) may call the Federal

Information Relay Service (FIRS) at 1–

800–877–8339 between 8 a.m. and 8

p.m., Eastern time, Monday through

Friday.

SUPPLEMENTARY INFORMATION: President

Clinton’s memorandum of March 4,

1995, titled ‘‘Regulatory Reinvention

Initiative,’’ directed heads of

departments and agencies to review all

existing regulations to eliminate those

that are outdated and modify others to

increase flexibility and reduce burden.

The Department has undertaken a

thorough review of its existing

regulations and has identified the

regulations removed by this document

as obsolete or unnecessary. Additional

obsolete and unnecessary regulations

were previously removed on May 23,

1995 (60 FR 27223) as part of the

Regulatory Reinvention Initiative. Based

on this review, the Secretary also

withdraws the notice of proposed

rulemaking issued for 34 CFR Part 50 on

March 1, 1993 (58 FR 11924).

The regulations being removed are no

longer necessary to administer the

program, have been superseded by new

legislation, or were issued to implement

a program that is no longer funded. To

the extent that regulations are needed to

implement new legislation, they will be

issued separately from this document.

Any determination to issue new

regulations will be carefully considered

to ensure that it is consistent with the

President’s regulatory reform efforts and

the principles in Executive Order 12866.

The Department is continuing to

review its other existing regulations

thoroughly in consultation with its

customers and partners. To the extent

the Secretary can identify further

opportunities for regulatory reinvention,

the Secretary will propose appropriate

amendments to revise or eliminate

outdated provisions, reduce burden, and

increase flexibility.

Waiver of Proposed Rulemaking

In accordance with the

Administrative Procedure Act (5 U.S.C.

553), it is the practice of the Secretary

to offer interested parties the

opportunity to comment on proposed

regulations. However, these regulations

merely reflect statutory changes and

remove unnecessary and obsolete

regulatory provisions. Removal of the

regulations does not establish or affect

substantive policy. Therefore, the