Date: 29 Jul 1999
Time: 11:55:33
Remote Name: 156.29.145.175
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. 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. 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. 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. 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 Iran 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. 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]