Document ID: BIS-2012-0004-0001
Agency: bis
Document Type: Rule
Title: Export Administration Regulations Amendments: Addition of Reference to Provision of Iran Sanctions Act, etc.
Posted Date: 2012-02-03T05:00Z

[Federal Register Volume 77, Number 23 (Friday, February 3, 2012)]
[Rules and Regulations]
[Pages 5387-5389]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-2465]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 110718395-1482-01]
RIN 0694-AF30

Amendment to the Export Administration Regulations: Addition of a 
Reference to a Provision of the Iran Sanctions Act of 1996 (ISA) and 
Statement of the Licensing Policy for Transactions Involving Persons 
Sanctioned Under the ISA

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Final rule.

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SUMMARY: In this rule, the Bureau of Industry and Security (BIS) amends 
the Export Administration Regulations (EAR) to add a reference to the 
Iran Sanctions Act of 1996 (ISA), which states BIS's licensing policy 
for export and reexport transactions that involve persons sanctioned 
pursuant to certain enumerated statutes. In this rule, BIS provides 
notice to the public that it has a general policy of denial for export 
and reexport license applications in which a person sanctioned by the 
State Department under the ISA is a party to the transaction. BIS also 
makes technical corrections to enhance clarity and consistency.

DATES: This rule is effective February 3, 2012.

FOR FURTHER INFORMATION CONTACT: Theodore Curtin, Sr. Export Policy 
Analyst, Foreign Policy Controls Division, Bureau of Industry and 
Security, Department of Commerce, by telephone (202) 482-1975 or by 
email to theodore.curtin@bis.doc.gov.

SUPPLEMENTARY INFORMATION: 

Background

Basis of Amendment

    The Iran Sanctions Act of 1996 (50 U.S.C. 1701 note) (ISA) requires 
the President to sanction persons determined to have engaged in certain 
actions that help Iran develop petroleum resources, produce refined 
petroleum resources, or acquire refined petroleum products. Sanctions 
must also be imposed, pursuant to the ISA, on persons determined to 
have taken certain actions to help Iran acquire or develop certain 
weapons of mass destruction, missiles, or advanced conventional 
weapons. In a September 23, 2010 Presidential Memorandum, the President 
delegated the authority to impose sanctions under the ISA to the 
Secretary of State.

[[Page 5388]]

    Pursuant to that delegation, the State Department makes a 
determination whether to impose sanctions. Guidance on sanctions 
imposed by the Secretary of State under the ISA is available at http://www.state.gov/e/eeb/esc/iransanctions/. Exporters should contact the 
Department of State directly if they have questions about ISA-related 
sanctions.
    Upon making its determination, the State Department publishes in 
the Federal Register notices of the imposition of sanctions under the 
ISA. There are several possible sanctions that may be imposed under the 
ISA including a prohibition implemented by BIS on the issuance by the 
U.S. Government of a specific license or other specific permission or 
authority to export goods or technology to a sanctioned person under 
the Export Administration Act of 1979, as amended (50 U.S.C. App. 
Sec. Sec.  2401-2420).

Amendment to the EAR: Addition of a Reference to the ISA

    This rule amends the Export Administration Regulations (EAR) at 15 
CFR 744.19 to state that, consistent with the sanctions programs 
described in Section 744.19(a), (b), and (c), BIS will apply a policy 
of denial when reviewing export or reexport license applications in 
which a person sanctioned under the ISA is a party to the transaction. 
Currently, Section 744.19 of the EAR states that BIS's policy is to 
deny export or reexport license applications if a person who is a party 
to the transaction (i.e., the applicant, other party authorized to 
receive the license, purchaser, intermediate consignee, ultimate 
consignee, or end user) is subject to a sanction issued pursuant to one 
of three statutory authorities: (1) The Iran-Iraq Arms Nonproliferation 
Act of 1992 (Pub. L. 102-484); (2) the Iran, North Korea, and Syria 
Nonproliferation Act (Pub. L. 106-178); or (3) Section 11B(b)(1)(B)(i) 
or (ii) of the Export Administration Act of 1979, as amended (50 U.S.C. 
App. Sec. Sec.  2401-2420). In this rule, BIS amends Section 744.19 to 
add a reference to a fourth statute, the ISA.
    Also, this rule clarifies in Section 744.19 that the policy of 
denial applies to any person sanctioned under one of the four statutes 
who is a party to the transaction (i.e., the applicant, other party 
authorized to receive a license, purchaser, intermediate consignee, 
ultimate consignee, or end-user). To make this clarification, this rule 
replaces the term ``entity'' that previously appeared in Section 744.19 
of the EAR with ``person'' in order to be consistent with the four 
statutes and BIS's licensing policy under the EAR. As defined in the 
EAR, the term ``person'' applies to both natural persons and entities 
such as corporations and organizations.
    Also, in this rule, BIS makes technical corrections to Section 
744.19 of the EAR to update statutory citations and make conforming 
changes. This rule updates the reference to the Iran Nonproliferation 
Act of 2000, which has been amended on several occasions and is 
currently referred to as the Iran, North Korea, and Syria 
Nonproliferation Act, adds the U.S. Code citation for the Iran 
Nonproliferation Act of 2000, and amends the citations for the statutes 
referenced in Section 744.19(a), (b), and (c) to refer solely to the 
U.S. Code citations.
    Since August 21, 2001, the Export Administration Act of 1979, as 
amended, has been in lapse and the President, through Executive Order 
13222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), as extended 
most recently by the Notice of August 12, 2011 (76 FR 50661 (August 16, 
2011)), has continued the EAR in effect under the International 
Emergency Economic Powers Act. BIS continues to carry out the 
provisions of the Export Administration Act of 1979, as amended, as 
appropriate and to the extent permitted by law, pursuant to Executive 
Order 13222.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been determined to be not significant for 
purposes of Executive Order 12866.
    2. Notwithstanding any other provisions of law, no person is 
required to respond to or be subject to a penalty for failure to comply 
with a collection of information, subject to the requirements of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless 
that collection of information displays a currently valid Office of 
Management and Budget (OMB) Control Number. This rule involves a 
collection of information subject to the PRA. This collection has been 
approved by the Office of Management and Budget under control number 
0694-0088, ``Multi-Purpose Application,'' which carries a burden hour 
estimate of 58 minutes to prepare and submit form BIS-748. Total burden 
hours associated with the PRA and OMB control number 0694-0088 are not 
expected to increase as a result of this rule.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking, the opportunity for 
public participation, and a delay in effective date, are inapplicable 
because this regulation involves a military or foreign affairs function 
of the United States (see 5 U.S.C. 553(a)(1)). Further, no other law 
requires that a notice of proposed rulemaking and an opportunity for 
public comment be given for this rule. Because a notice of proposed 
rulemaking and an opportunity for public comment are not required to be 
given for this rule by 5 U.S.C. 553, or by any other law, the 
analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 
et seq.) are not applicable. Therefore, this rule is issued in final 
form.

List of Subjects in 15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

    Accordingly, part 744 of the Export Administration Regulations (15 
CFR Parts 730-774) is amended as follows:

PART 744--[AMENDED]

0
1. The authority citation for 15 CFR Part 744 continues to read as 
follows:

    Authority: Et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 
U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; 
E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 
FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12947, 60 FR 5079, 3 CFR, 
1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 
228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 
66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 
CFR, 2001 Comp., p. 786; Notice of January 13, 2011, 76 FR 3009 
(January 18, 2011); Notice of August 12, 2011, 76 FR 50661 (August 
16, 2011); Notice of November 9, 2011, 76 FR 70319 (November 10, 
2011).

0
2. Revise Sec.  744.19 to read as follows:

Sec.  744.19  Licensing Policy Regarding Persons Sanctioned Pursuant to 
Specified Statutes.

    Notwithstanding any other licensing policy elsewhere in the EAR, 
BIS will deny any export or reexport license application if any person 
who is a party

[[Page 5389]]

to the transaction (i.e., the applicant, other party authorized to 
receive a license, purchaser, intermediate consignee, ultimate 
consignee, or end-user) is subject to one or more of the sanctions 
described in paragraphs (a), (b), (c), and (e) of this section and will 
deny any export or reexport license application for an item listed on 
the Commerce Control List with a reason for control of MT if a person 
who is a party to the transaction is subject to a sanction described in 
paragraph (d) of this section.
    (a) A sanction issued pursuant to the Iran-Iraq Arms 
Nonproliferation Act of 1992 (50 U.S.C. 1701 note) that prohibits the 
issuance of any license to or by the sanctioned person.
    (b) A sanction issued pursuant to the Iran, North Korea, and Syria 
Nonproliferation Act (50 U.S.C. 1701 note) that prohibits the granting 
of a license and requires the suspension of an existing license for the 
transfer to foreign persons of items, the export of which is controlled 
under the Export Administration Act of 1979, as amended (50 U.S.C. app. 
2401-2420), or the Export Administration Regulations.
    (c) A sanction issued pursuant to section 11B(b)(1)(B)(ii) of the 
Export Administration Act of 1979, as amended (50 U.S.C. app. 2401-
2420), that prohibits the issuance of new licenses for exports to the 
sanctioned person of items controlled pursuant to the Export 
Administration Act of 1979, as amended.
    (d) A sanction issued pursuant to section 11B(b)(1)(B)(i) of the 
Export Administration Act of 1979, as amended (50 U.S.C. app. 2401-
2420), that prohibits the issuance of new licenses for exports to the 
sanctioned person of MTCR Annex equipment or technology controlled 
pursuant to the Export Administration Act of 1979, as amended.
    (e) A sanction issued pursuant to the Iran Sanctions Act of 1996 
(50 U.S.C. 1701 note) that prohibits the issuance of a specific license 
or grant of any other specific permission or authority to export any 
goods or technology to a sanctioned person under the Export 
Administration Act of 1979, as amended (50 U.S.C. app. 2401-2420).

    Dated: January 30, 2012.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2012-2465 Filed 2-2-12; 8:45 am]
BILLING CODE 3510-33-P