Full Text of the New OFAC Regulations on Exporting American Agricultural and Medical
Goods to Iran
Date: 28 Jul 1999
Time: 20:58:10
Remote Name: 204.210.38.44
Comments<![CDATA[</h3>
<p><strong>Please note: The text of the new OFAC regulations on this page is direct from
the OFAC web site and it is very difficult to comprehend to for the average reader. If you
are seeking information on a particular topic, you may wish to conduct a SEARCH using your
internet browser. Click on Edit, Find, and enter the text you wish to find, ie.
"Wheat" or "Broker", etc. For further information, ITA Members
may contact our office at <a href="mailto:info@IranianTrade.org">info@IranianTrade.org</a>
. </strong></p>
<p>WHAT'S NEW - OFAC Information Update on Internet World Wide Web Page - July 27, 1999 </p>
<p>OFAC has taken steps, after close consultation with the Departments of State and
Agriculture, to implement the policy announced by President Clinton on April 28 to
authorize, with appropriate safeguards, commercial sales of food, medicine and medical
equipment under existing unilateral sanctions regimes. This policy affirmed the
President's earlier statement that "...food and other human necessities should not be
used as a tool of foreign policy except under extraordinary circumstances." The
implementation is in the form of regulations amending the current sanctions regimes for
Iran, Libya and Sudan in accordance with guidance from the Department of State developed
following an interagency process. </p>
<p>The new regulations provide that licenses will be issued--on a case-by-case basis and
with appropriate safeguards--to allow commercial sales of food, medicine and medical
equipment to approved buyers in Iran, Libya and Sudan. </p>
<p>What items are covered under this new policy? This new licensing policy applies to
agricultural commodities and products that are intended for ultimate consumption as food
by humans or animals. This includes raw, processed and packaged foods, animal feeds and
pet food, live food animals, seeds for food crops, and reproductive materials for the
production of food animals. It does not include non-food agricultural commodities, such as
cotton or tobacco. The new licensing policy also applies to medicines, including those
administered by injection, and medical equipment, as long as the medicines and medical
equipment are not listed on the Commerce Control List, which is a list maintained by the
Department of Commerce of goods that are controlled for export to certain countries for
reasons of national security, nuclear nonproliferation, anti-terrorism, and so on. </p>
<p>Who are the approved buyers in Iran, Libya and Sudan? The specific licenses that are
issued under this policy will allow sales to: private individuals acting for their own
account; nongovernmental entities; and government procurement bodies identified by the
Office of Foreign Assets Control as not being affiliated with the coercive organs of the
state. A list of such approved government procurement bodies will be available on OFAC's
Web site and from its FAX-on-Demand service and will be provided to each licensee. This
list will be updated from time to time, as necessary. In addition, persons applying for
specific licenses can propose adding other qualifying government procurement bodies to
this list. </p>
<p>What procedures do people have to follow to get a license? The new regulations set up
two different procedures for obtaining specific licenses. First, there is an expedited
licensing procedure for sales of specified bulk agricultural commodities listed in an
appendix to the regulations. Licensees under this procedure will receive one license
authorizing them to respond to requests for bids, to enter into binding contracts and to
perform contracts. Licenses will not be limited to one contract or transaction, but rather
will authorize sales of bulk agricultural commodities over a specified time period.
Applicants will not have to identify their purchasers or other sales terms, such as price,
in advance. The licenses, however, will be subject to certain conditions. For example: all
sales must be at prevailing market prices and only to approved purchasers, who must be
fully identified in the contracts; payment terms must be consistent with the regulations;
and any applicable license application requirements of another Federal agency must be
satisfied. Second, for sales of all other food items, medicines and medical equipment, the
regulations provide a two-step licensing procedure that allows for case-by-case review of
each contract. The first step is a general license authorizing entry into executory
contracts that make performance contingent upon the prior approval of the Office of
Foreign Assets Control. The executory contracts will have to meet the similar criteria to
those for bulk agricultural commodity sales contracts and, in addition, will have to
disclose up front all parties with an interest in the sale and set forth all the terms of
the sale. The second step in this licensing procedure is for the prospective seller to
apply to OFAC for a specific license permitting performance of the executory contract. The
applicant will have to submit the executory contract to OFAC, as well as any other
information necessary to demonstrate that all applicable requirements have been met. No
contract performance is permitted until OFAC issues a specific license. </p>
<p>What types of payment terms and financing will be allowed for these sales? Certain
payment and financing terms for sales licensed under the new policy are authorized by a
general license. The generally licensed payment and financing terms are limited to: cash
in advance; sales on open account, with the proviso that the account receivable may not be
transferred by the person extending the credit; or financing by third-country banks that
are neither U.S. persons nor Iranian, Libyan or Sudanese government entities. U.S. banks
may advise or confirm letters of credit issued by third- country banks. In addition, OFAC
will consider applications for specific licenses to authorize other terms for payment and
financing where compliance with the overall sanctions regime would not be undermined.
Payments for licensed sales--which must reference an appropriate OFAC license--may not
involve a debit to a blocked account, or a debit or credit to an account of a person in
Iran or of the Government of Iran maintained on the books of a U.S. depository
institution. In order to ensure that payments are not blocked or rejected, persons sending
or receiving them should be certain that their transfer instructions reference the
underlying OFAC license authorizing their transaction and ought to be prepared to show
their bank a copy of their license. There will be no U.S. Government funding or financing
in support of these sales. </p>
<p>Incidental transactions and brokering </p>
<p>The regulations also contain a general license authorizing, with some limitations,
transactions ordinarily incident to a licensed transaction, such as shipping, insurance
and payment of port fees. Since travel to Libya is currently prohibited, a separate
section authorizes travel transactions to, from and within Libya for the sole purpose of
negotiating contracts authorized by the general license for entry into executory contracts
or by specific licenses for bulk agricultural commodity sales. U.S. passports must be
validated by the Department of State for travel to Libya. Finally, there is a provision in
the new regulations authorizing U.S. persons, on certain conditions, to broker the sale by
third parties of bulk agricultural commodities to approved buyers in Iran, Libya and
Sudan. Where the underlying sale is by a U.S. person and must be specifically licensed,
brokering is permitted by general license. Where the underlying sale is a third country
sale and is not subject to OFAC licensing requirements, a U.S. person must apply for a
specific license to broker the sale. </p>
<p>A copy of the regulatory amendments follows as APPENDIX "A" to this
"What's New" file. OFAC's industry brochures and brochures on Iran, Libya, and
Sudan have been updated and a new button is being added to the Web Page to provide
information on approved government procurement bodies. Technical changes have been made to
OFAC's brochures on Cuba and UNITA. OFAC'S FAX-ON-DEMAND SERVICE OFAC's automated
fax-on-demand service is free and is available 24 hours a day, seven days a week, by
dialing 202/622-0077 from any touchtone phone and following voice prompts. OFAC documents
kept up to date on the system include all those available at this Web site as well as
notices, licensing guidelines, and copies of Federal Register notices (often including
notices filed, but not yet printed in the Federal Register). The "Index of Available
Documents" is date-specific. </p>
<p>DELIMITED & FIXED FIELD SDN FILES: The "Delimited files" button under the
heading "Special Information on Designated Nationals and Blocked Persons" is
your tool for accessing the latest copies of the SDN list in formats other than *.PDF. It
gives you the ability to download a self-expanding ASCII file which includes straight DOS
text documents as well as delimited and fixed field versions of the SDN list for
incorporation into database tables. After downloading, users should type "SDALL"
at the DOS prompt to expand the contents. </p>
<p>These computerized publications as transmitted by OFAC are designed as reference tools
providing actual notice of actions by OFAC with respect to Specially Designated Nationals
and other entities whose property is blocked, to assist the public in complying with the
various sanctions programs administered by OFAC. The latest changes may appear here prior
to their publication in the Federal Register, and it is intended that users rely on
changes indicated in these documents that post-date the most recent Federal Register
publication with respect to a particular sanctions program in the appendices to chapter V
of Title 31, Code of Federal Regulations. Such changes reflect official actions of OFAC,
and will be reflected as soon as practicable in the Federal Register under the index
heading "Foreign Assets Control." New Federal Register notices with regard to
Specially Designated Nationals or blocked entities may be published at any time. Users are
advised to check the Federal Register and these electronic publications routinely for
additional names or other changes to the listings. Entities and individuals on the list
are occasionally licensed by OFAC to transact business with U.S. persons in anticipation
of removal from the list or because of foreign policy considerations in unique
circumstances. Licensing in anticipation of official Federal Register publication of a
notice of removal based on the unblocking of an entity's or individual's property is
reflected in these publications by removal from the list. </p>
<p>Current information on licenses issued with regard to Specially Designated Nationals
and other blocked persons may be obtained or verified by calling OFAC Licensing at
202/622-2480. Format SDN_DLT consists of records separated by carriage returns (ASCII
character 13), with fields (values) within records delimited by the "@" symbol
(ASCII character 64). Text values are enclosed by quotation marks (")(ASCII character
34). Format SDN_FF consists of records separated by carriage returns, with fields within
the records beginning at fixed locations. Null values for both formats consist of
"-0-" (ASCII characters 45, 48, 45). Both the Delimited and Fixed-Field releases
consist of three ASCII text files--a main file listing the name of the SDN and other
information unique to that entity, a file of addresses, and a file of alternate names.
Addresses and alternate names are linked to particular SDNs using unique integer values in
a linking column. The integers used are assigned for linking purposes only and do not
represent an official reference to that entity. Releases of the database-format files are
intended as a service to the user community. OFAC's legal version of the SDN list is
published in the Federal Register. While all of OFAC's lists are drawn from the same
underlying data and every effort has been made to ensure consistency, the Federal Register
governs should differences arise. The files associated with the delimited and fixed field
releases are: delimited:</p>
<p>README.DEL, SDN.DEL, ADD.DEL, ALT.DEL fixed field: README.FF, SDN.FF, ADD.FF, ALT.FF
The last technical changes to the formats of the files were made on May 10, 1996. The
address field in the address tables (files ADD.DEL and ADD.FF) was adjusted from 100 to
125 characters. That change affected the positions of the city, country, and add_remarks
fields in file ADD.FF. FORMAT SDN_DEL Main table, text file name SDN.DEL Column sequence
Column name Type Size Description -------- ------------ ------- ---- ---------------------
1 ent_num integer unique record identifier/unique listing identifier 2 SDN_Name text 200
name of sdn 3 SDN_Type text 12 type of SDN 4 Program text 15 sanctions program name 5
Title text 180 title of an individual 6 Call_Sign text 8 vessel call sign 7 Vess_type text
25 vessel type 8 Tonnage text 14 vessel tonnage 9 GRT text 8 gross registered tonnage 10
Vess_flag text 40 vessel flag 11 Vess_owner text 150 vessel owner 12 Remarks text 300
remarks on SDN Address table, text file name ADD.DEL Column sequence Column name Type Size
Description -------- ------------ ------- ---- --------------------- 1 Ent_num integer
link to unique listing 2 Add_num integer unique record identifier 3 Address text 125
street address of SDN 4 City text 30 city of address 5 Country text 40 country of address
6 Add_remarks text 200 remarks on address Alternate identity table, text file name ALT.DEL
Column sequence Column name Type Size Description -------- ------------ ------- ----
--------------------- 1 ent_num integer link to unique listing 2 alt_num integer unique
record identifier 3 alt_type text 8 type of alternate identity (aka, fka, nka) 4 alt_name
text 200 alternate identity name 5 alt_remarks text 200 remarks on alternate identity
Record separator: carriage return field (value) delimiter: @ text value quotes: "
null: -0- FORMAT SDN_FF Main table, text file name SDN.FF Column Posi- sequence Column
name Type Size tion Description -------- ----------- ------- ---- ----
--------------------- 1 ent_num integer 10 1 unique record identifier/unique listing
identifier 2 SDN_Name text 200 11 name of sdn 3 SDN_Type text 12 211 type of SDN 4 Program
text 15 223 sanctions program name 5 Title text 180 238 title of an individual 6 Call_Sign
text 8 418 vessel call sign 7 Vess_type text 25 426 vessel type 8 Tonnage text 14 451
vessel tonnage 9 GRT text 8 465 gross registered tonnage 10 Vess_flag text 40 473 vessel
flag 11 Vess_owner text 150 513 vessel owner 12 Remarks text 300 663 remarks on SDN
Address table, text file name ADD.FF Column Posi- sequence Column name Type Size tion
Description -------- ----------- ------- ---- ---- --------------------- 1 Ent_num integer
10 1 link to unique listing 2 Add_num integer 10 11 unique record identifier 3 Address
text 125 21 street address of SDN 4 City text 30 146 city of address 5 Country text 40 176
country of address 6 Add_remarks text 200 216 remarks on address Alternate identity table,
text file name ALT.FF Column Posi- sequence Column name Type Size tion Description
-------- ----------- ------- ---- ---- --------------------- 1 ent_num integer 10 1 link
to unique listing 2 alt_num integer 10 11 unique record identifier 3 alt_type text 8 21
type of alternate identity (aka, fka, nka) 4 alt_name text 200 29 alternate identity name
5 alt_remarks text 200 229 remarks on alternate identity Record separator: carriage return
null: -0- User comments on the usefulness and accuracy of the various versions of the SDN
list are welcomed. Call OFAC Compliance at 202/622-2490, press the comment button on the
Home Page, or contact us through <<dennis.wood@do.treas.gov>>. APPENDIX "A" AgMed Amendments DEPARTMENT
OF THE TREASURY Office of Foreign Assets Control 31 CFR Parts 538, 550 and 560 Sudanese
Sanctions Regulations; Libyan Sanctions Regulations; Iranian Transactions Regulations:
Licensing of Commercial Sales of Agricultural Commodities and Products, Medicine, and
Medical Equipment AGENCY: Office of Foreign Assets Control, Treasury. ACTION: Final rule;
amendments. ----------------- </p>
<p><big><strong>SUMMARY: </strong></big>The Treasury Department is amending the Sudanese
Sanctions Regulations, the Libyan Sanctions Regulations, and the Iranian Transactions
Regulations to add statements of licensing policy with respect to commercial sales of
agricultural commodities and products, medicine, and medical equipment. EFFECTIVE DATE:
July 27, 1999 FOR FURTHER INFORMATION CONTACT: Steven I. Pinter, Chief of Licensing (tel.:
202/622-2480) or William B. Hoffman, Chief Counsel (tel.: 202/622-2410), Office of Foreign
Assets Control, U.S. Treasury Department, Washington, DC 20220. SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability This document is available as an electronic file on
The Federal Bulletin Board the day of publication in the Federal Register. By modem, dial
202/512-1387 and type "/GO FAC," or call 202/512-1530 for disk or paper copies.
This file is available for downloading without charge in ASCII and Adobe Acrobatþ
readable (*.PDF) formats. For Internet access, the address for use with the World Wide Web
(Home Page), Telnet, or FTP protocol is: fedbbs.access.gpo.gov. The document is also
accessible for downloading in ASCII format without charge from Treasury's Electronic
Library ("TEL") in the "Research Mall" of the FedWorld bulletin board.
By modem, dial 703/321-8020, and select self- expanding file "T11FR00.EXE" in
TEL. For Internet access, use one of the following protocols: Telnet = fedworld.gov
(192.239.93.3); World Wide Web (Home Page) = http://www.fedworld.gov; FTP =
ftp.fedworld.gov (192.239.92.205). </p>
<p>Additional information concerning the programs of the Office of Foreign Assets Control
is available for downloading from the Office's Internet Home Page:
http://www.treas.gov/ofac, or in fax form 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. Background On April 28, 1999, President Clinton announced that
existing unilateral economic sanctions programs would be amended to modify licensing
policies to permit case-by-case review of specific proposals for the commercial sale of
agricultural commodities and products, as well as medicine and medical equipment, where
the United States Government has the discretion to do so. He further announced that the
Administration was developing country-specific licensing criteria to guide the
case-by-case review process so that governments subject to sanctions do not gain
unjustified or unwarranted benefits from such sales. To implement this policy, the
Treasury Department's Office of Foreign Assets Control ("OFAC") is amending the
Sudanese Sanctions Regulations, 31 CFR part 538 (the "SSR"), the Libyan
Sanctions Regulations, 31 CFR part 550 (the "LSR"), and the Iranian Transactions
Regulations, 31 CFR part 560 (the "ITR") (collectively, the
"Regulations"), to make available both general and specific licenses governing
commercial sales of such goods. This final rule deals with commercial sales to Sudan,
Libya and Iran (the "target countries") of agricultural commodities and products
intended for ultimate consumption in a target country as food by humans (including live
animals, raw, processed and packaged foods) or animals (including animal feeds); as seeds
for food crops; or as reproductive materials (such as live animals, fertilized eggs,
embryos and semen) for the production of food animals. It also deals with commercial sales
of medicines (including those administered by injection) and medical equipment for use in
the target countries, if those medicines and medical equipment are not listed on the
Commerce Control List in the Export Administration Regulations, 15 CFR part 774,
supplement no. 1 (excluding items classified EAR 99), as of the date of exportation or
reexportation. Regulations,  538.523(a), 550.569(a) and 560.530(a). Licensing of
commercial sales. The amendments authorize two tracks for commercial sales of these goods.
First, an OFAC general license permits sellers to negotiate and sign executory contracts
for commercial sales and exportation or reexportation of any of these agricultural or
medical items to the target countries or their governments. </p>
<p>Performance under such executory contracts must made be contingent upon receipt of an
OFAC license. After review of an executory contract, OFAC may authorize its performance by
specific license where OFAC finds the contract terms consistent with the licensing policy
in this final rule. Regulations,  538.523, 550.569 and 560.530. Second, persons
wishing to make commercial sales of certain bulk agricultural commodities to the target
countries or their governments may apply for specific licenses that permit future entry
into and performance of contracts for those commodities. OFAC will issue a specific
license for the proposed bulk agricultural commodity sales and exportation and
reexportation if it finds the proposal set forth in the application consistent with the
licensing policy in this final rule. Regulations,  538.524 and SSR, appendix A; 
550.570 and LSR, appendix A;  560.531 and ITR, appendix B. In either case, all sales
to the target countries must comply with a series of requirements intended to ensure that
such sales do not improperly benefit the target countries' governments. Required contract
terms for executory contracts. In addition to the requirements set forth below in Required
contract terms in general, executory contracts submitted to OFAC for specific licensing
must disclose all parties with an interest in the sales transaction, including
identification of a purchasing agent's principals at the wholesale level, if any; set
forth all terms of sale (e.g., purchase price, quantity, date of shipment, financing),
except that dates for contract performance may be made dependent upon the date OFAC issues
a specific license; and ensure that exports and reexports of any goods, technology or
services are in compliance with license application requirements of other Federal
agencies. </p>
<p>Regulations,  538.523(b), 550.569(b) and 560.530(b). Required contract terms
for bulk agricultural commodities contracts. Contracts entered into pursuant to an OFAC
specific license for bulk agricultural commodity sales must meet all of the requirements
set forth below in Required contract terms in general, and may only cover commercial sales
of the bulk agricultural commodities listed in the appendices to the Regulations.
Regulations,  538.524(b)(1), 550.570(b)(1) and 560.531(b)(1). Required contract
terms in general. Contracts for commercial sales licensed pursuant to this final rule
must, in addition to the applicable requirements noted above, comply with the following
conditions. The contracts must disclose the purchasers, including (for sales through
persons in third countries) those to whom goods are to be resold, which may only be (1)
private individuals in the target countries who are acting for their own accounts, (2)
nongovernmental entities in the target countries, (3) target- country governmental
procurement bodies identified by OFAC as not being affiliated with the coercive organs of
the state, or (4) persons in third countries purchasing specifically for resale to any of
the foregoing. (A listing of the procurement bodies identified by OFAC as not being
affiliated with the coercive organs of the state can be found on OFAC's Web site at
http://www.treas.gov/ofac or OFAC's fax-on-demand service at 202/622-0077.) Persons named
in OFAC's list of blocked persons, specially designated nationals, specially designated
terrorists, foreign terrorist organizations, and specially designated narcotics
traffickers (31 CFR chapter V, appendix A) or of financial institutions owned or
controlled by the government of Iran (ITR, appendix A) are not eligible purchasers. </p>
<p>All contracts must also provide for sales at prevailing market prices and with payment
terms and financing consistent with the policies set forth below in Payment and financing
terms. Regulations,  538.523 and 538.524(b); 550.569 and 550.570(b); 560.530 and
560.531(b). Recordkeeping and reporting requirements. In addition, full records of all
transactions pursuant to OFAC licenses must be maintained for a minimum of 5 years after
each transaction, and reports relating to the transactions must be provided to OFAC upon
demand to ensure compliance with all licensing requirements. Regulations, 
538.523(e), 538.524(c); 550.569(e), 550.570(c); 560.530(e), 560.531(c); 501.601 and
501.602. Payment and financing terms. Certain payment and financing terms for commercial
sales of agricultural or medical items to the target countries or their governments are
authorized by general license. These include payment of cash in advance, sales on open
account (so long as the seller does not discount or otherwise transfer the account
receivable created by the sale), and financing by third-country financial institutions
(not U.S. persons nor target-country government banks). U.S. financial institutions are
authorized by general license to advise or confirm such third- country financial
institution financing. Regulations,  538.525(a), 550.571(a) and 560.532(a). In
addition, specific licenses may be issued for payment terms and trade financing not
permitted by general license. Regulations,  538.525(b), 550.571(b) and
560.532(b). </p>
<p>Payments through the U.S. banking system must reference the applicable OFAC license to
avoid being stopped or blocked in transit. Brokering of target country purchases. This
final rule permits, by general license, U.S. persons to broker sales of bulk agricultural
commodities by U.S. persons destined for the target countries or their governments. For
those sales, brokerage is authorized only if the sales meet all applicable requirements of
this final rule for bulk agricultural commodity sales. To broker sales of bulk
agricultural commodities by non-U.S. persons to the target countries or their governments,
the broker must first obtain a specific license from OFAC. Licenses for brokerage are
limited to sales of items listed in the bulk agricultural commodities appendices to the
Regulations made to target country persons eligible to purchase bulk agricultural
commodities from U.S. persons pursuant to paragraphs (b)(2) and (e) of  538.524,
550.570 and 560.531 of the Regulations. Further, if the brokered sales are subject to
Federal licensing requirements, the sales must be made contingent upon prior authorization
of the relevant Federal agency. Brokerage fees may not be paid from a blocked account of
the Government of Sudan or Libya or from an Iranian account as defined in 31 CFR 560.530. </p>
<p>Finally, brokers of any sales subject to this final rule must comply with the OFAC
recordkeeping and reporting requirements in  501.601 and 501.602 of 31 CFR
chapter V. Regulations,  538.526, 550.572 and 560.533. Incidental transactions.
The SSR are interpreted to permit most transactions incidental to licensed transactions.
SSR,  538.405. This final rule amends the LSR and ITR to provide similar
interpretations to that of the SSR, and to clarify in all three provisions that OFAC does
not interpret the following as permitted incidental transactions: transportation services
to or from the target countries except the discharging of licensed or exempt cargo;
distribution or leasing of containers in the target countries after performing
transportation services; or financing agricultural and medical sales described in this
final rule. Regulations,  538.405, 550.405 and 560.405. (General licenses for
certain financing terms and statements of licensing policy with respect to alternative
terms are noted above.) Travel-related transactions are not restricted in the SSR or ITR.
This final rule amends the LSR to authorize travel-related transactions for the
negotiation of executory contracts or bulk agricultural commodity contracts. Specific
licensing is required for installation and servicing of medical equipment sold to Libya
pursuant to executory contracts. LSR,  550.573. Paperwork Reduction Act As authorized
in the Administrative Procedure Act (5 U.S.C. 553)(the "APA"), this final rule
is amending the Regulations is being issued without prior notice and public comment
procedure. The collections of information related to the Regulations are contained in 31
CFR part 501 (the "Reporting and Procedures 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 ("OMB") under control
number 1505-0164.</p>
<p>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. Because the Regulations involve a foreign affairs function, Executive Order 12866
and the provisions of the APA requiring notice of proposed rulemaking, opportunity for
public participation, and delay in effective date, 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. List of Subjects 31 CFR Part 538 Administrative practice and
procedure, Agricultural commodities, Banks, banking, Blocking of assets, Drugs, Exports,
Foreign trade, Humanitarian aid, Imports, Medical devices, Penalties, Reporting and
recordkeeping requirements, Specially designated nationals, Sudan, Terrorism,
Transportation. 31 CFR Part 550 Administrative practice and procedure, Agricultural
commodities, Banks, banking, Blocking of assets, Drugs, Exports, Foreign investment,
Foreign trade, Government of Libya, Imports, Libya, Loans, Medical devices, Penalties,
Reporting and recordkeeping requirements, Securities, Services, Specially designated
nationals, Terrorism, Travel restrictions. 31 CFR Part 560 Administrative practice and
procedure, Agricultural commodities, Banks, banking, Drugs, Exports, Foreign trade,
Imports, Information, Investments, Iran, Loans, Medical devices, Penalties, Reporting and
recordkeeping requirements, Services, Specially designated nationals, Terrorism,
Transportation. For the reasons set forth in the preamble, 31 CFR parts 538, 550 and 560
are amended as set forth below: PART 538--SUDANESE SANCTIONS REGULATIONS 1. The authority
citation for part 538 continues to read as follows: Authority: 3 U.S.C. 301; 31 U.S.C.
321(b); 50 U.S.C. 1601- 1651, 1701-1706; E.O. 13067, 62 FR 59989, 3 CFR, 1997 Comp., p.
230. Subpart D--Interpretations 2. Section 538.405 is revised to read as follows: 
538.405 Transactions incidental to a licensed transaction authorized. </p>
<p>Any transaction ordinarily incident to a licensed transaction and necessary to give
effect thereto is also authorized, except: (a) A transaction by an unlicensed Sudanese
governmental entity or involving a debit to a blocked account or a transfer of blocked
property not explicitly authorized within the terms of the license; (b) Provision of any
transportation services to or from Sudan not explicitly authorized in or pursuant to this
part other than discharging licensed or exempt cargo there; (c) Distribution or leasing in
Sudan of any containers or similar goods owned or controlled by United States persons
after the performance of transportation services to Sudan; and (d) Financing of licensed
sales for exportation or reexportation of agricultural commodities or products, medicine,
or medical equipment to Sudan or the Government of Sudan. See  538.525. Subpart
E--Licenses, Authorizations, and Statements of Licensing Policy 3. Section 538.523 is
added to subpart E to read as follows:  538.523 Commercial sales and exportation of
agricultural commodities and products, medicine, and medical equipment. (a) General
license for executory contracts. </p>
<p>Except as provided in paragraph (c) of this section, entry into executory contracts is
authorized for the following transactions with individuals in Sudan acting for their own
account, nongovernmental entities in Sudan, or procurement bodies of the Government of
Sudan identified by the Office of Foreign Assets Control as not being affiliated with the
coercive organs of the state, or with persons in third countries purchasing specifically
for resale to any of the foregoing, provided that performance of the executory contracts
(including any preparatory activities, payments or deposits related to such executory
contracts) is contingent upon the prior authorization of the Office of Foreign Assets
Control in or pursuant to this part: (1) The sale of agricultural commodities and
products, if those commodities and products are intended for ultimate consumption in Sudan
as: (i) Food by humans (including live animals, raw, processed and packaged foods) or
animals (including animal feeds); (ii) Seeds for food crops; and (iii) Reproductive
materials (such as live animals, fertilized eggs, embryos and semen) for the production of
food animals; and (2) The sale of medicines (including those administered by injection)
and medical equipment for use in Sudan, if those medicines and medical equipment are not
listed on the Commerce Control List in the Export Administration Regulations, 15 CFR part
774, supplement no. 1 (excluding items classified EAR99), as of the date of exportation or
reexportation. (EAR99 items may in certain instances require a license from the Department
of Commerce, Bureau of Export Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through
744.4, 744.7, and 744.10.) Note to paragraph (a) of  538.523. See  538.524 with
respect to the availability of specific licenses for sales of certain bulk agricultural
commodities for exportation or reexportation to Sudan or the Government of Sudan. (b)
Required terms of executory contracts. The authorization contained in paragraph (a) of
this section applies only to executory contracts that: (1) Disclose all parties with an
interest in the sales transaction. </p>
<p>If the goods are being sold to a purchasing agent in Sudan, the executory contract must
identify the agent's principals at the wholesale level for whom the purchase is being
made; (2) Provide only for sales at prevailing market prices; (3) Set forth all terms of
sale (e.g., purchase price, quantity, date of shipment, financing), except that dates for
contract performance may be made dependent upon the date a specific license pursuant to
paragraph (d) of this section is obtained from the Office of Foreign Assets Control; (4)
Make any performance involving the exportation or reexportation of any goods, technology
(including technical data, software, or other information) or services that are subject to
license application requirements of another Federal agency contingent upon the prior
authorization of that agency. (For example, EAR99 items may in certain instances require a
license from the Department of Commerce, Bureau of Export Administration. See, e.g., 15
CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10; see also 22 CFR 123.9); and (5)
Provide for payment terms consistent with the provisions of  538.525. (c) Ineligible
purchasers. Nothing in this section permits entry into or performance of a sales contract
with a person specifically named in appendix A to this chapter V or in appendix A to part
560 of this chapter, other than a procurement body of the Government of Sudan identified
by the Office of Foreign Assets Control as not being affiliated with the coercive organs
of the state. Note to paragraph (c) of  538.523. Information on ineligible purchasers
and eligible procurement bodies will be published in the Federal Register and may be found
on the Office of Foreign Assets Control's Internet site: http://www.treas.gov/ofac, or on
its fax- on-demand system: 202/622-0077. (d) Specific licenses for performance under
executory contracts. </p>
<p>Specific licenses may be issued on a case-by-case basis to permit the performance of
executory contracts meeting the requirements of paragraphs (a) and (b) of this section.
See  501.801(b) of this chapter with respect to specific licensing procedures. (e)
Recordkeeping and reporting requirements. Attention is drawn to the recordkeeping,
retention, and reporting requirements of  501.601 and 501.602. 4. Section
538.524 is added to subpart E to read as follows:  538.524 Commercial sales and
exportation of certain bulk agricultural commodities. (a) Sales of bulk agricultural
commodities by licensed sellers. Specific licenses may be issued on a case-by-case basis
to permit the sale and exportation or reexportation to persons in Sudan or the Government
of Sudan of bulk agricultural commodities intended for ultimate consumption in Sudan as
food by humans or animals (including animal feeds) and seeds for food crops, for sales
meeting all requirements of paragraph (b) of this section. (b) Required contract terms for
commercial sales of bulk agricultural commodities. </p>
<p>Specific licenses issued pursuant to this section will authorize entry into and
performance only of contracts that: (1) Provide for the sale and exportation or
reexportation only of bulk agricultural commodities listed in appendix A to this part 538;
(2) Fully identify the purchasers of the bulk agricultural commodities, including (for
sales through persons in third countries) those to whom the commodities are to be resold,
and do not include as a purchaser any person in Sudan or any person within the definition
of the term Government of Sudan other than: (i) A private individual in Sudan acting for
his or her own account; (ii) A nongovernmental entity in Sudan; or (iii) A procurement
body of the Government of Sudan identified by the Office of Foreign Assets Control as not
being affiliated with the coercive organs of the state; (3) Provide only for sales at
prevailing market prices; (4) Make any performance involving the exportation or
reexportation of any goods, technology (including technical data, software, or other
information) or services that are subject to license application requirements of another
Federal agency contingent upon the prior authorization of that agency. (For example, EAR99
items may in certain instances require a license from the Department of Commerce, Bureau
of Export Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and
744.10; see also 22 CFR 123.9); and (5) Provide for payment terms consistent with the
provisions of  538.525. (c) Recordkeeping and reporting requirements. Attention is
drawn to the recordkeeping, retention, and reporting requirements of  501.601
and 501.602. (d) Other commodities and products. Requests may be made to the Office of
Foreign Assets Control for specific licenses analogous to those available pursuant to
paragraph (a) of this section where the applicant demonstrates to the satisfaction of the
Office of Foreign Assets Control that, in light of industry practices, sales of the
particular agricultural commodity or product, medicine, or medical equipment are
impracticable under the executory contract licensing procedures contained in 
538.523. (e) Ineligible purchasers. Nothing in this section permits entry into or
performance of a sales contract with a person specifically named in appendix A to this
chapter V or in appendix A to part 560 of this chapter, other than a procurement body of
the Government of Sudan identified by the Office of Foreign Assets Control as not being
affiliated with the coercive organs of the state. </p>
<p>Note to paragraph (e) of  538.524. Information on ineligible purchasers and
eligible procurement bodies will be published in the Federal Register and may be found on
the Office of Foreign Assets Control's Internet site: http://www.treas.gov/ofac, or on its
fax- on-demand system: 202/622-0077. 5. Section 538.525 is added to subpart E to read as
follows:  538.525 Payment for and financing of commercial sales of agricultural
commodities and products, medicine, and medical equipment. (a) General license for payment
terms. The following payment terms for sales of agricultural commodities and products,
medicine, and medical equipment pursuant to  538.523 and 538.524 are authorized:
(1) Payment of cash in advance; (2) Sales on open account, provided that the account
receivable may not be transferred by the person extending the credit; or (3) Financing by
third-country financial institutions that are neither United States persons nor Government
of Sudan entities. Such financing may be confirmed or advised by U.S. financial
institutions. (b) Specific licenses for alternate payment terms. Specific licenses may be
issued on a case-by-case basis for payment terms and trade financing not authorized by the
general license in paragraph (a) of this section for sales pursuant to  538.523
and 538.524, except that such financing may not be provided by the Government of Sudan.
See  501.801(b) of this chapter for specific licensing procedures. (c) No debits to
blocked accounts. Nothing in this section authorizes payment terms or trade financing
involving a debit to an account of the Government of Sudan blocked pursuant to this part.
(d) Transfers through the U.S. financial system. Before a United States financial
institution initiates a payment on behalf of any customer, or credits a transfer to the
account on its books of the ultimate beneficiary, the United States financial institution
must determine that the underlying transaction is not prohibited by this part. Any payment
relating to a transaction authorized in or pursuant to  538.523, 538.524, or 538.526
that is routed through the U.S. financial system must reference the relevant Office of
Foreign Assets Control license authorizing the payment to avoid the blocking or rejection
of the transfer. 6. Section 538.526 is added to subpart E to read as follows: </p>
<p> 538.526 Brokering sales of bulk agricultural commodities. (a) General license for
brokering sales by U.S. persons. United States persons are authorized to broker the sale
and exportation or reexportation by United States persons of the bulk agricultural
commodities listed in appendix A to this part 538 to individuals in Sudan acting for their
own account, nongovernmental entities in Sudan, procurement bodies of the Government of
Sudan identified by the Office of Foreign Assets Control as not being affiliated with the
coercive organs of the state, or persons in third countries purchasing specifically for
resale to any of the foregoing, provided that the brokered sales meet all conditions of
 538.524. (b) Specific licensing for brokering sales by non-U.S. persons. Specific
licenses may be issued on a case-by-case basis to permit United States persons to broker
the sale and exportation or reexportation of bulk agricultural commodities by non-United
States persons to persons in Sudan or the Government of Sudan. Specific licenses issued
pursuant to this section will authorize the brokerage only of sales that: (1) Are limited
to the bulk agricultural commodities listed in appendix A to this part 538; (2) Are to
purchasers permitted pursuant to paragraphs (b)(2) and (e) of  538.524; (3) Require
that any performance that is subject to license application requirements of another
Federal agency be contingent upon the prior authorization of that agency. (For example,
items classified EAR99 under the Export Administration Regulations, 15 CFR parts 730
through 774, may in certain instances require a license from the Department of Commerce,
Bureau of Export Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through 744.4,
744.7, and 744.10; see also 22 CFR 123.9.) (c) No debit to blocked accounts. </p>
<p>Payment for any brokerage fee earned pursuant to this section may not involve a debit
to an account blocked pursuant to this part. (d) Recordkeeping and reporting requirements.
Attention is drawn to the recordkeeping, retention, and reporting requirements of
 501.601 and 501.602. 7. Appendix A to part 538 is added to read as follows:
Appendix A to Part 538--Bulk Agricultural Commodities Notes: 1. Appendix A sets forth
those agricultural commodities eligible for the bulk agricultural commodity sales
licensing procedures in  538.524. 2. Commodities are identified by their
classification numbers in the Harmonized Tariff Schedule of the United States (see 19
U.S.C. 1202) ("HTS"). HTS Number Commodity 1001.10 Durum Wheat 1001.90 Other
Wheat and Meslin, including seed, Red Spring Wheat, White Winter Wheat,
"Canadian" Western Red Winter Wheat, Soft White Spring Wheat, and Wheat not
elsewhere specified 1101.00 Wheat or Meslin Flour 1006.10 Rice in the husk (paddy or
rough) 1006.20 Husked (brown) Rice 1006.30 Semi-milled or wholly milled Rice, whether or
not polished or glazed 1006.40 Broken Rice 1102.30 Rice Flour 1103.14 Rice Groats, Meal
and Pellets 1002.00 Rye 1003.00 Barley 1004.00 Oats 1007.00 Grain Sorghum 1005.00 Corn
(Maize) 0713.31 Dried Beans including Vigna mungo (L.), Hepper, and Vigna radiata (L.)
Wilczek 0713.32 Small red (adzuki) beans 0713.33 Kidney beans, including white pea beans
0713.39 Beans, other 0713.50 Broad beans and horse beans 0713.10 Dried Peas (Pisum
sativum) 0713.20 Chickpeas (garbanzos) 0713.40 Lentils 0713.90 Dried leguminous
vegetables, shelled, not elsewhere specified 1201.00 Soybeans, whether or not broken
2304.00 Soybean cake, meal and pellets 1507.10 Soybean oil, crude 1507.90 Soybean oil,
other 1514.10 Rapeseed, colza and mustard oil, crude 1514.90 Rapeseed, colza and mustard
oil, other 1515.21 Corn (Maize) oil, crude 1515.29 Corn (Maize) oil, other 1512.21
Cottonseed oil, crude 1512.29 Cottonseed oil, other 1517.90 Cottonseed oil, hydrogenated
1508.10 Peanut (ground-nut) oil, crude 1508.90 Peanut (ground-nut) oil, other 1515.50
Sesame oil 1512.11 Sunflower-seed oil, crude 1512.19 Sunflower-seed oil, other 1212.91
Sugar Beets, fresh, chilled, frozen or dried 1212.92 Sugar Cane, fresh, chilled, frozen or
dried 1701.11 Cane Sugar, raw, solid form 1701.12 Beet Sugar, raw, solid form 1701.91 Cane
or Beet Sugar, solid form, containing added coloring or flavoring 1701.99 Cane or Beet
Sugar, other, not elsewhere specified PART 550--LIBYAN SANCTIONS REGULATIONS 1. The
authority citation for part 550 is revised to read as follows: Authority: 3 U.S.C. 301; 18
U.S.C. 2332d; 22 U.S.C. 287c, 2349aa-8 and 2349aa-9; 31 U.S.C. 321(b); 49 U.S.C. 40106(b);
50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); E.O.
12543, 51 FR 875, 3 CFR, 1986 Comp., p. 181; E.O. 12544, 51 FR 1235, 3 CFR, 1986 Comp., p.
183; E.O. 12801, 57 FR 14319, 3 CFR, 1992 Comp., p. 294. 2. Section 550.405 is revised to
read as follows: </p>
<p> 550.405 Transactions incidental to a licensed transaction authorized. Any
transaction ordinarily incident to a licensed transaction and necessary to give effect
thereto is also authorized, except: (a) A transaction by an unlicensed Libyan governmental
entity or involving a debit to a blocked account or a transfer of blocked property not
explicitly authorized within the terms of the license; (b) Provision of any transportation
services to or from Libya not explicitly authorized in or pursuant to this part other than
discharging licensed or exempt cargo there; (c) Distribution or leasing in Libya of any
containers or similar goods owned or controlled by United States persons after the
performance of transportation services to Libya; and (d) Financing of licensed sales for
exportation or reexportation of agricultural commodities or products, medicine or medical
equipment to Libya or the Government of Libya. See  550.571. Subpart E--Licenses,
Authorizations, and Statements of Licensing Policy 3. Section 550.569 is added to subpart
E to read as follows:  550.569 Commercial sales of agricultural commodities and
products, medicine, and medical equipment. (a) General license for executory contracts.
Entry into executory contracts is authorized for the following transactions with
individuals in Libya acting for their own account, nongovernmental entities in Libya or
procurement bodies of the Government of Libya identified by the Office of Foreign Assets
Control as not being affiliated with the coercive organs of the state, or with persons in
third countries purchasing specifically for resale to any of the foregoing, provided that
performance of the executory contracts (including any preparatory activities, payments or
deposits related to such executory contracts) is contingent upon the prior authorization
of the Office of Foreign Assets Control in or pursuant to this part: (1) The sale of
agricultural commodities and products, if those commodities and products are intended for
ultimate consumption in Libya as: (i) Food by humans (including live animals, raw,
processed and packaged foods) or animals (including animal feeds); (ii) Seeds for food
crops; and (iii) Reproductive materials (such as live animals, fertilized eggs, embryos
and semen) for the production of food animals; and (2) The sale of medicines (including
those administered by injection) and medical equipment for use in Libya, if those
medicines and medical equipment are not listed on the Commerce Control List in the Export
Administration Regulations, 15 CFR part 774, supplement no. 1 (excluding items classified
EAR99), as of the date of exportation or reexportation. (EAR99 items may in certain
instances require a license from the Department of Commerce, Bureau of Export
Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10.)
Note to paragraph (a) of  550.569: See  550.570 with respect to the availability
of specific licenses for sales of certain bulk agricultural commodities for exportation or
reexportation to Libya or the Government of Libya. (b) Required terms of executory
contracts. </p>
<p>The authorization contained in paragraph (a) of this section applies only to executory
contracts that: (1) Disclose all parties with an interest in the sales transaction. If the
goods are being sold to a purchasing agent in Libya, the executory contract must identify
the agent's principals at the wholesale level for whom the purchase is being made; (2)
Provide only for sales at prevailing market prices; (3) Set forth all terms of sale (e.g.,
purchase price, quantity, date of shipment, financing), except that dates for contract
performance may be made dependent upon the date a specific license pursuant to paragraph
(d) of this section is obtained from the Office of Foreign Assets Control; (4) Make any
performance involving the exportation or reexportation of any goods, technology (including
technical data, software, or other information) or services that are subject to license
application requirements of another Federal agency contingent upon the prior authorization
of that agency. (For example, items classified EAR99 under the Export Administration
Regulations, 15 CFR parts 730 through 774, may in certain instances require a license from
the Department of Commerce, Bureau of Export Administration. See, e.g., 15 CFR
736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10; see also 22 CFR 123.9); and (5)
Provide for payment terms consistent with the provisions of  550.571. (c) Ineligible
purchasers. Nothing in this section permits entry into or performance of a sales contract
with a person specifically named in appendix A to this chapter V or in appendix A to part
560 of this chapter, other than a procurement body of the Government of Libya identified
by the Office of Foreign Assets Control as not being affiliated with the coercive organs
of the state. Note to paragraph (c) of  550.569. </p>
<p>Information on ineligible purchasers and eligible procurement bodies will be published
in the Federal Register and may be found on the Office of Foreign Assets Control's
Internet site: http://www.treas.gov/ofac, or on its fax- on-demand system: 202/622-0077.
(d) Specific licenses for performance under executory contracts. Specific licenses may be
issued on a case-by-case basis to permit the performance of executory contracts meeting
the requirements of paragraphs (a) and (b) of this section. See  501.801(b) of this
chapter with respect to specific licensing procedures. (e) Recordkeeping and reporting
requirements. Attention is drawn to the recordkeeping, retention, and reporting
requirements of  501.601 and 501.602. 4. Section 550.570 is added to subpart E
to read as follows:  550.570 Commercial sales of certain bulk agricultural
commodities. (a) Sales of bulk agricultural commodities by licensed sellers. Specific
licenses may be issued on a case-by-case basis to permit the sale and exportation or
reexportation to persons in Libya or the Government of Libya of bulk agricultural
commodities intended for ultimate consumption in Libya as food by humans or animals
(including animal feeds) and seeds for food crops, for sales meeting all requirements of
paragraph (b) of this section. (b) Required contract terms for commercial sales of bulk
agricultural commodities. Specific licenses issued pursuant to this section will authorize
entry into and performance only of contracts that: (1) Provide for the sale and
exportation or reexportation only of bulk agricultural commodities listed in appendix A to
this part 550; (2) Fully identify the purchasers of the bulk agricultural commodities,
including (for sales through persons in third countries) those to whom the commodities are
to be resold, and do not include as a purchaser any person in Libya or any person within
the definition of the term Government of Libya other than: (i) A private individual in
Libya acting for his or her own account; (ii) A nongovernmental entity in Libya; or (iii)
A procurement body of the Government of Libya identified by the Office of Foreign Assets
Control as not being affiliated with the coercive organs of the state; (3) Provide only
for sales at prevailing market prices; (4) Make any performance involving the exportation
or reexportation of any goods, technology (including technical data, software, or other
information) or services that are subject to license application requirements of another
Federal agency contingent upon the prior authorization of that agency. (For example, EAR99
items may in certain instances require a license from the Department of Commerce, Bureau
of Export Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and
744.10; see also 22 CFR 123.9); and (5) Provide for payment terms consistent with the
provisions of  550.571. (c) Recordkeeping and reporting requirements. Attention is
drawn to the recordkeeping, retention, and reporting requirements of  501.601
and 501.602. (d) Other commodities and products. Requests may be made to the Office of
Foreign Assets Control for specific licenses analogous to those available pursuant to
paragraph (a) of this section where the applicant demonstrates to the satisfaction of the
Office of Foreign Assets Control that, in light of industry practices, sales of the
particular agricultural commodity or product, medicine, or medical equipment are
impracticable under the executory contract licensing procedures contained in 
550.569. (e) Ineligible purchasers. Nothing in this section permits entry into or
performance of a sales contract with a person specifically named in appendix A to this
chapter V or in appendix A to part 560 of this chapter, other than a procurement body of
the Government of Libya identified by the Office of Foreign Assets Control as not being
affiliated with the coercive organs of the state. </p>
<p>Note to paragraph (e) of  550.570. Information on ineligible purchasers and
eligible procurement bodies will be published in the Federal Register and may be found on
the Office of Foreign Assets Control's Internet site: http://www.treas.gov/ofac, or on its
fax- on-demand system: 202/622-0077. 5. Section 550.571 is added to subpart E to read as
follows:  550.571 Payment for and financing of commercial sales of agricultural
commodities and products, medicine, and medical equipment. (a) General license for payment
terms. The following payment terms for sales of agricultural commodities and products,
medicine, and medical equipment pursuant to  550.569 and 550.570 are authorized:
(1) Payment of cash in advance; (2) Sales on open account, provided that the account
receivable may not be transferred by the person extending the credit; or (3) Financing by
third-country financial institutions that are neither United States persons nor Government
of Libya entities. Such financing may be confirmed or advised by U.S. financial
institutions. (b) Specific licenses for alternate payment terms. Specific licenses may be
issued on a case-by-case basis for payment terms and trade financing not authorized by the
general license in paragraph (a) of this section for sales pursuant to  550.569
and 550.570, except that such financing may not be provided by the Government of Libya.
See  501.801(b) of this chapter for specific licensing procedures. (c) No debits to
blocked accounts. Nothing in this section authorizes payment terms or trade financing
involving a debit to an account of the Government of Libya blocked pursuant to this part.
(d) Transfers through the U.S. financial system. Before a United States financial
institution initiates a payment on behalf of any customer, or credits a transfer to the
account on its books of the ultimate beneficiary, the United States financial institution
must determine that the underlying transaction is not prohibited by this part. Any payment
relating to a transaction authorized in or pursuant to  538.523, 538.524, or 538.526
that is routed through the U.S. financial system must reference the relevant Office of
Foreign Assets Control license authorizing the payment to avoid the blocking or rejection
of the transfer. 6. Section 550.572 is added to subpart E to read as follows: 
550.572 Brokering sales of bulk agricultural commodities. (a) General license for
brokering sales by U.S. persons. </p>
<p>United States persons are authorized to broker the sale and exportation or
reexportation by United States persons of the bulk agricultural commodities listed in
appendix A to this part 550 to individuals in Libya acting for their own account,
nongovernmental entities in Libya, procurement bodies of the Government of Libya
identified by the Office of Foreign Assets Control as not being affiliated with the
coercive organs of the state, or persons in third countries purchasing specifically for
resale to any of the foregoing, provided that the brokered sales meet all conditions of
 550.570. (b) Specific licensing for brokering sales by non-U.S. persons. Specific
licenses may be issued on a case-by-case basis to permit United States persons to broker
the sale and exportation or reexportation of bulk agricultural commodities by non-United
States persons to persons in Libya or the Government of Libya. Specific licenses issued
pursuant to this section will authorize the brokerage only of sales that: (1) Are limited
to the bulk agricultural commodities listed in appendix A to this part 550; (2) Are to
purchasers permitted pursuant to paragraphs (b)(2) and (e) of  550.570; (3) Require
that any performance that is subject to license application requirements of another
Federal agency be contingent upon the prior authorization of that agency. (For example,
items classified EAR99 under the Export Administration Regulations, 15 CFR parts 730
through 774, may in certain instances require a license from the Department of Commerce,
Bureau of Export Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through 744.4,
744.7, and 744.10; see also 22 CFR 123.9.) (c) No debit to blocked accounts. Payment for
any brokerage fee earned pursuant to this section may not involve a debit to an account
blocked pursuant to this part. (d) Recordkeeping and reporting requirements. Attention is
drawn to the recordkeeping, retention, and reporting requirements of  501.601
and 501.602. 7. Section 550.573 is added to subpart E to read as follows:  550.573
Travel transactions in connection with licensed sales of agricultural commodities and
products, medicine, and medical products. Travel transactions to, from, and within Libya
for the sole purpose of negotiating contracts authorized by  550.569 or  550.570
are authorized. Travel transactions related to installation or servicing of medical
equipment sold pursuant to  550.569 must be authorized by specific license. See 
501.801(b) of this chapter for specific licensing procedures. Note to  550.573. U.S.
passports must be validated by the U.S. Department of State for travel to Libya. 8.
Appendix A to part 550 is added to read as follows: Appendix A to Part 550--Bulk
Agricultural Commodities Notes: 1. Appendix A sets forth those agricultural commodities
eligible for the bulk agricultural commodity sales licensing procedures in  550.570.
2. Commodities are identified by their classification numbers in the Harmonized Tariff
Schedule of the United States (see 19 U.S.C. 1202) ("HTS"). HTS Number Commodity
1001.10 Durum Wheat 1001.90 Other Wheat and Meslin, including seed, Red Spring Wheat,
White Winter Wheat, "Canadian" Western Red Winter Wheat, Soft White Spring
Wheat, and Wheat not elsewhere specified 1101.00 Wheat or Meslin Flour 1006.10 Rice in the
husk (paddy or rough) 1006.20 Husked (brown) Rice 1006.30 Semi-milled or wholly milled
Rice, whether or not polished or glazed 1006.40 Broken Rice 1102.30 Rice Flour 1103.14
Rice Groats, Meal and Pellets 1002.00 Rye 1003.00 Barley 1004.00 Oats 1007.00 Grain
Sorghum 1005.00 Corn (Maize) 0713.31 Dried Beans including Vigna mungo (L.), Hepper, and
Vigna radiata (L.) Wilczek 0713.32 Small red (adzuki) beans 0713.33 Kidney beans,
including white pea beans 0713.39 Beans, other 0713.50 Broad beans and horse beans 0713.10
Dried Peas (Pisum sativum) 0713.20 Chickpeas (garbanzos) 0713.40 Lentils 0713.90 Dried
leguminous vegetables, shelled, not elsewhere specified 1201.00 Soybeans, whether or not
broken 2304.00 Soybean cake, meal and pellets 1507.10 Soybean oil, crude 1507.90 Soybean
oil, other 1514.10 Rapeseed, colza and mustard oil, crude 1514.90 Rapeseed, colza and
mustard oil, other 1515.21 Corn (Maize) oil, crude 1515.29 Corn (Maize) oil, other 1512.21
Cottonseed oil, crude 1512.29 Cottonseed oil, other 1517.90 Cottonseed oil, hydrogenated
1508.10 Peanut (ground-nut) oil, crude 1508.90 Peanut (ground-nut) oil, other 1515.50
Sesame oil 1512.11 Sunflower-seed oil, crude 1512.19 Sunflower-seed oil, other 1212.91
Sugar Beets, fresh, chilled, frozen or dried 1212.92 Sugar Cane, fresh, chilled, frozen or
dried 1701.11 Cane Sugar, raw, solid form 1701.12 Beet Sugar, raw, solid form 1701.91 Cane
or Beet Sugar, solid form, containing added coloring or flavoring 1701.99 Cane or Beet
Sugar, other, not elsewhere specified PART 560--IRANIAN TRANSACTIONS REGULATIONS 1. The
authority citation for part 560 continues to read as follows: Authority:3 U.S.C. 301; 18
U.S.C. 2332d; 22 U.S.C. 2349aa-9; 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); E.O. 12613, 52 FR 41940, 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.</p>
<p>Subpart D--Interpretations 2. Section 560.405 is added to subpart D to read as follows:
 560.405 Transactions incidental to a licensed transaction authorized. Any
transaction ordinarily incident to a licensed transaction and necessary to give effect
thereto is also authorized, except: (a) A transaction by an unlicensed Iranian
governmental entity or involving a debit or credit to an Iranian account not explicitly
authorized within the terms of the license; (b) Provision of any transportation services
to or from Iran not explicitly authorized in or pursuant to this part other than
discharging licensed or exempt cargo there; (c) Distribution or leasing in Iran of any
containers or similar goods owned or controlled by United States persons after the
performance of transportation services to Iran; and (d) Financing of licensed sales for
exportation or reexportation of agricultural commodities or products, medicine or medical
equipment to Iran or the Government of Iran. See  560.532. Subpart E--Licenses,
Authorizations, and Statements of Licensing Policy 3. Section 560.530 is added to subpart
E to read as follows:  560.530 Commercial sales of agricultural commodities and
products, medicine, and medical equipment. (a) General license for executory contracts.
Entry into executory contracts is authorized for the following transactions with
nongovernmental entities in Iran or procurement bodies of the Government of Iran not
affiliated with the coercive organs of the state, provided that performance of the
executory contracts (including any preparatory activities, payments or deposits related to
such executory contracts) is contingent upon the prior authorization of the Office of
Foreign Assets Control in or pursuant to this part: (1) The sale of agricultural
commodities and products, if those commodities and products are intended for ultimate
consumption in Iran as: (i) Food by humans (including live animals, raw, processed and
packaged foods) or animals (including animal feeds); (ii) Seeds for food crops; and (iii)
Reproductive materials (such as live animals, fertilized eggs, embryos and semen) for the
production of food animals; and (2) The sale of medicines (including those administered by
injection) and medical equipment for use in Iran, if those medicines and medical equipment
are not listed on the Commerce Control List in the Export Administration Regulations, 15
CFR part 774, supplement no. 1 (excluding items classified EAR99), as of the date of
exportation or reexportation. (EAR99 items may in certain instances require a license from
the Department of Commerce, Bureau of Export Administration. See, e.g., 15 CFR
736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10.) Note to paragraph (a) of 
560.530. See  560.531 with respect to the availability of specific licenses for entry
into and performance of contracts for sales of certain bulk agricultural commodities. (b)
Required terms of executory contracts. </p>
<p>The authorization contained in paragraph (a) of this section applies only to executory
contracts that: (1) Disclose all parties with an interest in the sales transaction. If the
goods are being sold to a purchasing agent in Iran, the executory contract must identify
the agent's principals at the wholesale level for whom the purchase is being made; (2)
Provide only for sales at prevailing market prices; (3) Set forth all terms of sale (e.g.,
purchase price, quantity, date of shipment, financing), except that dates for contract
performance may be made dependent upon the date a specific license pursuant to paragraph
(d) of this section is obtained from the Office of Foreign Assets Control; (4) Make any
performance involving the exportation or reexportation of any goods, technology (including
technical data, software, or other information) or services that are subject to license
application requirements of another Federal agency contingent upon the prior authorization
of that agency. (For example, items classified EAR99 under the Export Administration
Regulations, 15 CFR parts 730 through 774, may in certain instances require a license from
the Department of Commerce, Bureau of Export Administration. See, e.g., 15 CFR
736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10; see also 22 CFR 123.9); and (5)
Provide for payment terms consistent with the provisions of  560.532. (c) Ineligible
purchasers. Nothing in this section permits entry into or performance of a sales contract
with a person specifically named in appendix A to this chapter V or in appendix A to this
part 560, other than a procurement body of the Government of Iran identified by the Office
of Foreign Assets Control as not being affiliated with the coercive organs of the state.
Note to paragraph (c) of  560.530. </p>
<p>Information on ineligible purchasers and eligible procurement bodies will be published
in the Federal Register and may be found on the Office of Foreign Assets Control's
Internet site: http://www.treas.gov/ofac, or on its fax- on-demand system: 202/622-0077.
(d) Specific licenses for performance under executory contracts. Specific licenses may be
issued on a case-by-case basis to permit the performance of executory contracts meeting
the requirements of paragraphs (a) and (b) of this section. See  501.801(b) of this
chapter with respect to specific licensing procedures. (e) Recordkeeping and reporting
requirements. Attention is drawn to the recordkeeping, retention, and reporting
requirements of  501.601 and 501.602. 4. Section 560.531 is added to subpart E
to read as follows:  560.531 Commercial sales of certain bulk agricultural
commodities. (a) Sales of bulk agricultural commodities by licensed sellers. Specific
licenses may be issued on a case-by-case basis to permit the sale and exportation or
reexportation to persons in Iran or the Government of Iran of bulk agricultural
commodities intended for ultimate consumption in Iran as food by humans or animals
(including animal feeds) and seeds for food crops, for sales meeting all requirements of
paragraph (b) of this section. (b) Required contract terms for commercial sales of bulk
agricultural commodities. Specific licenses issued pursuant to this section will authorize
entry into and performance only of contracts that: (1) Provide for the sale and
exportation or reexportation only of bulk agricultural commodities listed in appendix B to
this part 560; (2) Fully identify the purchasers of the bulk agricultural commodities,
including (for sales through persons in third countries) those to whom the commodities are
to be resold, and do not include as a purchaser any person in Iran or any person within
the definition of the term Government of Iran other than: (i) A private individual in Iran
acting for his or her own account; (ii) A nongovernmental entity in Iran; or (iii) A
procurement body of the Government of Iran identified by the Office of Foreign Assets
Control as not being affiliated with the coercive organs of the state; (3) Provide only
for sales at prevailing market prices; (4) Make any performance involving the exportation
or reexportation of any goods, technology (including technical data, software, or other
information) or services that are subject to license application requirements of another
Federal agency contingent upon the prior authorization of that agency. (For example, EAR99
items may in certain instances require a license from the Department of Commerce, Bureau
of Export Administration. See, e.g., 15 CFR 736.2(b)(5), 744.2 through 744.4, 744.7, and
744.10; see also 22 CFR 123.9); and (5) Provide for payment terms consistent with the
provisions of  560.532. (c) Recordkeeping and reporting requirements. Attention is
drawn to the recordkeeping, retention, and reporting requirements of  501.601
and 501.602. (d) Other commodities and products. Requests may be made to the Office of
Foreign Assets Control for specific licenses analogous to those available pursuant to
paragraph (a) of this section where the applicant demonstrates to the satisfaction of the
Office of Foreign Assets Control that, in light of industry practices, sales of the
particular agricultural commodity or product, medicine, or medical equipment are
impracticable under the executory contract licensing procedures contained in 
560.530. (e) Ineligible purchasers. Nothing in this section permits entry into or
performance of a sales contract with a person specifically named in appendix A to this
chapter V or in appendix A to this part 560, other than a procurement body of the
Government of Iran identified by the Office of Foreign Assets Control as not being
affiliated with the coercive organs of the state. Note to paragraph (e) of  560.531. </p>
<p>Information on ineligible purchasers and eligible procurement bodies will be published
in the Federal Register and may be found on the Office of Foreign Assets Control's
Internet site: http://www.treas.gov/ofac, or on its fax- on-demand system: 202/622-0077.
5. Section 560.532 is added to subpart E to read as follows:  560.532 Payment for and
financing of commercial sales of agricultural commodities and products, medicine, and
medical equipment. (a) General license for payment terms. The following payment terms for
sales of agricultural commodities and products, medicine, and medical equipment pursuant
to  560.530 and 560.531 are authorized: (1) Payment of cash in advance; (2)
Sales on open account, provided that the account receivable may not be transferred by the
person extending the credit; or (3) Financing by third-country financial institutions that
are neither United States persons nor Government of Libya entities. Such financing may be
confirmed or advised by U.S. financial institutions. (b) Specific licenses for alternate
payment terms. Specific licenses may be issued on a case-by-case basis for payment terms
and trade financing not authorized by the general license in paragraph (a) of this section
for sales pursuant to  560.530 and 560.531, except that such financing may not
be provided by the Government of Iran. See  501.801(b) of this chapter for specific
licensing procedures. (c) No use of Iranian accounts. Nothing in this section authorizes
payment terms or trade financing involving a debit or credit to an Iranian account. (d)
Transfers through the U.S. financial system. Any payment relating to a transaction
authorized in or pursuant to  538.523, 538.524, or 538.526 that is routed through the
U.S. financial system must reference the relevant Office of Foreign Assets Control license
authorizing the payment to avoid the rejection of the transfer. See  560.516(b). 6.
Section 560.533 is added to subpart E to read as follows:  560.533 Brokering sales of
bulk agricultural commodities. (a) General license for brokering sales by U.S. persons.
United States persons are authorized to broker the sale by United States persons of the
bulk agricultural commodities listed in appendix A to this part 560 to individuals in Iran
acting for their own account, nongovernmental entities in Iran, procurement bodies of the
Government of Iran identified by the Office of Foreign Assets Control as not being
affiliated with the coercive organs of the state, or persons in third countries purchasing
specifically for resale to any of the foregoing, provided that the brokered sales meet all
conditions of  560.531. (b) Specific licensing for brokering sales by non-U.S.
persons. Specific licenses may be issued on a case-by-case basis to permit United States
persons to broker the sale and exportation or reexportation of bulk agricultural
commodities by non-United States persons to persons in Iran or the Government of Iran. </p>
<p>Specific licenses issued pursuant to this section will authorize the brokerage only of
sales that: (1) Are limited to the bulk agricultural commodities listed in appendix A to
this part 560; (2) Are to purchasers permitted pursuant to paragraphs (b)(2) and (e) of
 560.531; (3) Require that any performance that is subject to license application
requirements of another Federal agency be contingent upon the prior authorization of that
agency. (For example, items classified EAR99 under the Export Administration Regulations,
15 CFR parts 730 through 774, may in certain instances require a license from the
Department of Commerce, Bureau of Export Administration. See, e.g., 15 CFR 736.2(b)(5),
744.2 through 744.4, 744.7, and 744.10; see also 22 CFR 123.9.) (c) No debit to an Iranian
account. Payment for any brokerage fee pursuant to this section may not involve a debit or
credit to an Iranian account. (d) Recordkeeping and reporting requirements. Attention is
drawn to the recordkeeping, retention, and reporting requirements of  501.601
and 501.602. Appendix A to Part 560 [Redesignated] 7. The appendix to part 560 is
redesignated as Appendix A to Part 560. 8. Appendix B to part 560 is added to read as
follows: Appendix B to Part 560--Bulk Agricultural Commodities Notes: 1. Appendix B sets
forth those agricultural commodities eligible for the bulk agricultural commodity sales
licensing procedures in  560.531. 2. Commodities are identified by their
classification numbers in the Harmonized Tariff Schedule of the United States (see 19
U.S.C. 1202) ("HTS"). HTS Number Commodity 1001.10 Durum Wheat 1001.90 Other
Wheat and Meslin, including seed, Red Spring Wheat, White Winter Wheat,
"Canadian" Western Red Winter Wheat, Soft White Spring Wheat, and Wheat not
elsewhere specified 1101.00 Wheat or Meslin Flour 1006.10 Rice in the husk (paddy or
rough) 1006.20 Husked (brown) Rice 1006.30 Semi-milled or wholly milled Rice, whether or
not polished or glazed 1006.40 Broken Rice 1102.30 Rice Flour 1103.14 Rice Groats, Meal
and Pellets 1002.00 Rye 1003.00 Barley 1004.00 Oats 1007.00 Grain Sorghum 1005.00 Corn
(Maize) 0713.31 Dried Beans including Vigna mungo (L.), Hepper, and Vigna radiata (L.)
Wilczek 0713.32 Small red (adzuki) beans 0713.33 Kidney beans, including white pea beans
0713.39 Beans, other 0713.50 Broad beans and horse beans 0713.10 Dried Peas (Pisum
sativum) 0713.20 Chickpeas (garbanzos) 0713.40 Lentils 0713.90 Dried leguminous
vegetables, shelled, not elsewhere specified 1201.00 Soybeans, whether or not broken
2304.00 Soybean cake, meal and pellets 1507.10 Soybean oil, crude 1507.90 Soybean oil,
other 1514.10 Rapeseed, colza and mustard oil, crude 1514.90 Rapeseed, colza and mustard
oil, other 1515.21 Corn (Maize) oil, crude 1515.29 Corn (Maize) oil, other 1512.21
Cottonseed oil, crude 1512.29 Cottonseed oil, other 1517.90 Cottonseed oil, hydrogenated
1508.10 Peanut (ground-nut) oil, crude 1508.90 Peanut (ground-nut) oil, other 1515.50
Sesame oil 1512.11 Sunflower-seed oil, crude 1512.19 Sunflower-seed oil, other 1212.91
Sugar Beets, fresh, chilled, frozen or dried 1212.92 Sugar Cane, fresh, chilled, frozen or
dried 1701.11 Cane Sugar, raw, solid form 1701.12 Beet Sugar, raw, solid form 1701.91 Cane
or Beet Sugar, solid form, containing added coloring or flavoring 1701.99 Cane or Beet
Sugar, other, not elsewhere specified Dated: July 26, 1999. R. Richard Newcomb, Director,
Office of Foreign Assets Control. [FR Doc. Filed 7-27-99]]]>
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