[Federal Register Volume 74, Number 173 (Wednesday, September 9, 2009)]
[Rules and Regulations]
[Pages 46361-46364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-21553]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 538
Sudanese Sanctions Regulations
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule.
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SUMMARY: The Department of the Treasury's Office of Foreign Assets
Control (``OFAC'') is amending the Sudanese Sanctions Regulations by
issuing a general license that authorizes the exportation and
reexportation of agricultural commodities, medicine, and medical
devices to the Specified Areas of Sudan, as well as the conduct of
related transactions. The Specified Areas of Sudan are defined as
Southern Sudan, Southern Kordofan/Nuba Mountains State, Blue Nile
State, Abyei, Darfur, and marginalized areas in and around Khartoum.
OFAC also is making conforming changes to the Sudanese Sanctions
Regulations to reflect this authorization.
DATES: Effective Date: September 9, 2009.
FOR FURTHER INFORMATION CONTACT: Assistant Director for Compliance,
Outreach and Implementation, tel.: 202/622-2490, Assistant Director for
Licensing, tel.: 202/622-2480, Assistant Director for Policy, tel.:
202/622-4855, Office of Foreign Assets Control, or Chief Counsel
(Foreign Assets Control), tel.: 202/622-2410, Office of the General
Counsel, Department of the Treasury (not toll free numbers).
SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability
This document and additional information concerning OFAC are
available from OFAC's Web site (http://www.treas.gov/ofac) or via
facsimile through a 24-hour fax-on-demand service, tel.: 202/622-0077.
Background
The Sudanese Sanctions Regulations, 31 CFR part 538 (the ``SSR''),
were promulgated to implement Executive Order 13067 of November 3, 1997
(62 FR 59989, November 5, 1997) (``E.O. 13067''), in which the
President declared a national emergency with respect to the policies
and actions of the Government of Sudan.
To deal with that emergency, E.O. 13067 imposed comprehensive trade
sanctions with respect to Sudan and blocked all property and interests
in property of the Government of Sudan in the United States or within
the possession or control of United States persons.
Subsequently, on October 13, 2006, the President signed the Darfur
Peace and Accountability Act of 2006 (Pub. L. 109-344, 120 Stat. 1869)
(``DPAA'') and issued Executive Order 13412 of October 13, 2006 (71 FR
61369, October 17, 2006) (``E.O. 13412''). The DPAA and E.O. 13412,
inter alia, exempt the Specified Areas of Sudan from certain
prohibitions set forth in E.O. 13067, and define the term Specified
Areas of Sudan to include Southern Sudan, Southern Kordofan/Nuba
Mountains State, Blue Nile State, Abyei, Darfur, and marginalized areas
in and around Khartoum. While E.O. 13412 exempted the Specified Areas
of Sudan from certain prohibitions in E.O. 13067, it continued the
country-wide blocking of the Government of Sudan's property and
interests in property and imposed a new country-wide prohibition on
[[Page 46362]]
transactions relating to Sudan's petroleum or petrochemical industries.
E.O. 13412 also removed the regional Government of Southern Sudan from
the definition of the term Government of Sudan set forth in E.O. 13067.
OFAC issued amendments to the SSR implementing E.O. 13412 on October
31, 2007 (72 FR 61513, October 31, 2007).
OFAC today is further amending the SSR to resolve a tension between
E.O. 13412 and the DPAA on the one hand, and the Trade Sanctions Reform
and Export Enhancement Act of 2000 (22 U.S.C. 7201-7211) (``TSRA'') on
the other. Pursuant to E.O. 13412 and the DPAA, most trade and related
activities--other than trade with the Government of Sudan or relating
to Sudan's petroleum or petrochemical industries--are allowed with the
Specified Areas of Sudan. These Specified Areas, however, remained
subject to regulations promulgated pursuant to section 906(a)(1) of
TSRA, which provides that the export of agricultural commodities,
medicine, and medical devices to the government of a country that has
been determined by the Secretary of State, under section 6(j) of the
Export Administration Act of 1979, 50 U.S.C. App. 2405(j) (the
``EAA''), to have repeatedly provided support for acts of international
terrorism, or to any entity in such a country, shall be made pursuant
to one-year licenses issued by the United States government.
Because Sudan has been determined by the Secretary of State to be a
country that has repeatedly provided support for acts of international
terrorism pursuant to section 6(j) of the EAA, the entire country
remained subject to TSRA's licensing requirements under the SSR. The
overlap of TSRA with E.O. 13412 and the DPAA--as previously implemented
in the SSR--resulted in the requirement that OFAC authorize the export
of agricultural and medical items to the Specified Areas of Sudan, even
though no OFAC authorization was required to export most other items to
those areas.
Therefore, in view of the underlying policy objectives and findings
concerning the Specified Areas of Sudan that resulted in the
elimination of most of the previous economic sanctions against these
areas within Sudan, including export sanctions analogous to those
covered by TSRA, OFAC has determined that specific licenses for TSRA-
related transactions with respect to the Specified Areas of Sudan
should no longer be required. Instead, OFAC is authorizing such
transactions through a general license, set forth at SSR Sec.
538.523(a)(2), provided that such transactions do not involve any
property or interests in property of the Government of Sudan or relate
to the petroleum or petrochemical industries in Sudan. In accordance
with the requirements set forth in section 906(a)(1) of TSRA, this
general license covers exports shipped within the twelve-month period
beginning on the date of the signing of the export contract. In
addition, each year by the anniversary of its effective date on
September 9, 2009, OFAC will determine whether to revoke the general
license. Unless revoked, the general license will remain in effect.
However, specific licenses for TSRA-related transactions with respect
to the Government of Sudan, to any individual or entity in an area of
Sudan other than the Specified Areas of Sudan, or to persons in third
countries purchasing specifically for resale to the foregoing are still
required.
Existing prohibitions and safeguards satisfy TSRA's requirement
that procedures be in place to deny the general license for exports to
entities within Sudan promoting international terrorism. For instance,
the requirement that no U.S. person engage in any transaction with
anyone on OFAC's List of Specially Designated Nationals and Blocked
Persons, including persons designated under the terrorism programs
administered by OFAC, provides a mechanism for denying TSRA-related
exports to certain entities within the Specified Areas of Sudan. In
addition, if it deems necessary, OFAC may amend, modify, or revoke the
new general license pursuant to Sec. 501.803 of the Reporting,
Procedures and Penalties Regulations, 31 CFR part 501 (the ``RPPR''),
which set forth standard reporting and recordkeeping requirements and
license application and other procedures governing transactions
regulated pursuant to other parts of 31 CFR chapter V. Section 538.502
of the SSR similarly provides OFAC with the authority to exclude any
person, property, or transaction from the operation of the general
license or to restrict the applicability of the general license with
respect to any persons, property, or transactions. Finally, the
requirement that all U.S. persons maintain records of any transaction
subject to OFAC-administered sanctions for a period of not less than
five years pursuant to RPPR Sec. 501.601, and OFAC's authority to
obtain these records pursuant to RPPR Sec. 501.602, allow OFAC to
monitor activities under the general license in order to determine
whether it should exercise these authorities.
Those transactions now authorized by the general license set forth
at Sec. 538.523(a)(2) of the SSR include the sale, exportation, and
reexportation of agricultural commodities, medicine, and medical
devices, the financing of and payment for such sales, and the brokering
of TSRA sales. However, the transshipment or transit of TSRA-related
exports through areas of Sudan other than the Specified Areas of Sudan,
and any related financial transactions that are routed through
depository institutions located in an area of Sudan other than the
Specified Areas, remain prohibited under Sec. Sec. 538.417 and 538.418
of the SSR.
Public Participation
Because the amendment of 31 CFR part 538 involves a foreign affairs
function, the provisions of Executive Order 12866 and the
Administrative Procedure Act (5 U.S.C. 553), 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.
Paperwork Reduction Act
The collections of information related to 31 CFR part 538 are
contained in 31 CFR part 501 (the ``Reporting, Procedures and Penalties
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 under control number 1505-0164. 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.
List of Subjects in 31 CFR Part 538
Administrative practice and procedure, Banks, Banking, Blocking of
assets, Exports, Foreign trade, Humanitarian aid, Imports, Penalties,
Reporting and recordkeeping requirements, Specially designated
nationals, Sudan, Terrorism, Transportation.
0
For the reasons set forth in the preamble, the Department of the
Treasury's Office of Foreign Assets Control amends 31 CFR part 538 as
follows:
PART 538--SUDANESE SANCTIONS REGULATIONS
0
1. Revise the authority citation for part 538 to read as follows:
[[Page 46363]]
Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 31 U.S.C.
321(b); 50 U.S.C. 1601-1651, 1701-1706; Public Law 101-410, 104
Stat. 890 (28 U.S.C. 2461 note); 22 U.S.C. 7201-7211; Public Law
109-344, 120 Stat. 1869; Public Law 110-96, 121 Stat. 1011; E.O.
13067, 62 FR 59989, 3 CFR, 1997 Comp., p. 230; E.O. 13412, 71 FR
61369, 3 CFR, 2006 Comp., p. 244.
Subpart B--Prohibitions
0
2. Revise the note to Sec. 538.212(g)(2) to read as follows:
Sec. 538.212 Exempt transactions.
* * * * *
(g) * * *
(2) * * *
Note to Sec. 538.212(g)(2): See Sec. 538.523(a)(2) for a
general license authorizing the exportation and reexportation of
agricultural commodities, medicine, and medical devices to the
Specified Areas of Sudan, and the conduct of related transactions.
Subpart D--Interpretations
0
3. Amend Sec. 538.405 by revising paragraph (d) to read as follows:
Sec. 538.405 Transactions incidental to a licensed transaction
authorized.
* * * * *
(d) Financing of licensed sales for exportation or reexportation of
agricultural commodities or products, medicine, or medical equipment to
the Government of Sudan, to any individual or entity in an area of
Sudan other than the Specified Areas of Sudan, or to persons in third
countries purchasing specifically for resale to the foregoing. See
Sec. 538.525.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
0
4. Amend Sec. 538.523 by redesignating paragraph (a), paragraph (b),
and the introductory text to paragraph (c) to read as follows:
Sec. 538.523 Commercial sales, exportation, and reexportation of
agricultural commodities, medicine, and medical devices.
(a)(1) One-year specific license requirement. The exportation or
reexportation of agricultural commodities (including bulk agricultural
commodities listed in appendix A to this part 538), medicine, or
medical devices to the Government of Sudan, to any individual or entity
in an area of Sudan other than the Specified Areas of Sudan, or to
persons in third countries purchasing specifically for resale to the
foregoing, shall only be made pursuant to a one-year specific license
issued by the U.S. Department of the Treasury, Office of Foreign Assets
Control, for contracts entered into during the one-year period of the
license and shipped within the 12-month period beginning on the date of
the signing of the contract. No specific license will be granted for
the exportation or reexportation of agricultural commodities, medicine,
or medical equipment to any entity or individual in Sudan promoting
international terrorism, to any narcotics trafficking entity designated
pursuant to Executive Order 12978 of October 21, 1995 (60 FR 54579,
October 24, 1995) or the Foreign Narcotics Kingpin Designation Act (21
U.S.C. 1901-1908), or to any foreign organization, group, or persons
subject to any restriction for its involvement in weapons of mass
destruction or missile proliferation. Executory contracts entered into
pursuant to paragraph (b)(2) of this section prior to the issuance of
the one-year specific license described in this paragraph shall be
deemed to have been signed on the date of issuance of that one-year
specific license (and, therefore, the exporter is authorized to make
shipments under that contract within the 12-month period beginning on
the date of issuance of the one-year specific license).
(2) General license for the Specified Areas of Sudan. The
exportation or reexportation of agricultural commodities (including
bulk agricultural commodities listed in appendix A to this part 538),
medicine, and medical devices to the Specified Areas of Sudan and the
conduct of related transactions, including, but not limited to, the
making of shipping and cargo inspection arrangements, the obtaining of
insurance, the arrangement of financing and payment, the entry into
executory contracts, and the provision of brokerage services for such
sales and exports or reexports, are hereby authorized, provided that
such activities or transactions do not involve any property or
interests in property of the Government of Sudan and do not relate to
the petroleum or petrochemical industries in Sudan, and also provided
that all such exports or reexports are shipped within the 12-month
period beginning on the date of the signing of the contract for export
or reexport.
Note 1 to Sec. 538.523(a)(2): Consistent with section
906(a)(1) of the Trade Sanctions Reform and Export Enhancement Act
of 2000 (22 U.S.C. 7205), each year by the anniversary of its
effective date of September 9, 2009, the Office of Foreign Assets
Control will determine whether to revoke this general license.
Unless revoked, the general license will remain in effect.
Note 2 to Sec. 538.523(a)(2): See Sec. Sec. 538.417 and
538.418 for additional requirements with respect to transshipments
through, and financial transactions in, Sudan.
(b) General license for arrangement of exportation or reexportation
of covered products. (1) With respect to sales pursuant to Sec.
538.523(a)(1), the making of shipping arrangements, cargo inspection,
obtaining of insurance, and arrangement of financing (consistent with
Sec. 538.525) for the exportation or reexportation of agricultural
commodities, medicine, or medical devices to the Government of Sudan,
to any individual or entity in an area of Sudan other than the
Specified Areas of Sudan, or to persons in third countries purchasing
specifically for resale to the foregoing, are authorized.
(2) If desired, entry into executory contracts (including executory
pro forma invoices, agreements in principle, or executory offers
capable of acceptance such as bids in response to public tenders) for
the exportation or reexportation of agricultural commodities, medicine,
and medical devices to the Government of Sudan, to any individual or
entity in an area of Sudan other than the Specified Areas of Sudan, or
to persons in third countries purchasing specifically for resale to the
foregoing, is authorized, provided that performance of an executory
contract is expressly made contingent upon the prior issuance of the
one-year specific license described in paragraph (a)(1) of this
section.
(c) Instructions for obtaining one-year specific licenses. In order
to obtain the one-year specific license described in paragraph (a)(1)
of this section, the exporter must provide to the Office of Foreign
Assets Control:
* * * * *
0
5. Amend Sec. 538.525 by revising paragraphs (a) introductory text and
(b) to read as follows:
Sec. 538.525 Payment for and financing of commercial sales of
agricultural commodities, medicine, and medical equipment.
(a) General license for payment terms. The following payment terms
for sales, pursuant to Sec. 538.523(a)(1), of agricultural commodities
and products, medicine, and medical equipment to the Government of
Sudan, to any individual or entity in an area of Sudan other than the
Specified Areas, or to persons in third countries purchasing
specifically for resale to the foregoing are authorized:
* * * * *
(b) Specific licenses for alternate payment terms. Specific
licenses may be issued on a case-by-case basis for
[[Page 46364]]
payment terms and trade financing not authorized by the general license
in paragraph (a) of this section for sales pursuant to Sec.
538.523(a)(1). See Sec. 501.801(b) of this chapter for specific
licensing procedures.
* * * * *
0
6. Amend Sec. 538.526 by revising paragraph (a), the introductory text
of paragraph (b), and paragraph (b)(2) to read as follows:
Sec. 538.526 Brokering sales of agricultural commodities, medicine,
and medical devices.
(a) General license for brokering sales by U.S. persons. United
States persons are authorized to provide brokerage services on behalf
of U.S. persons for the sale and exportation or reexportation by United
States persons of agricultural commodities, medicine, and medical
devices to the Government of Sudan, to any individual or entity in an
area of Sudan other than the Specified Areas of Sudan, or to persons in
third countries purchasing specifically for resale to the foregoing,
provided that the sale and exportation or reexportation is authorized
by a one-year specific license issued pursuant to Sec. 538.523(a)(1).
(b) Specific licensing for brokering sales by non-U.S. persons of
bulk agricultural commodities. Specific licenses may be issued on a
case-by-case basis to permit United States persons to provide brokerage
services on behalf of non-United States, non-Sudanese persons for the
sale and exportation or reexportation of bulk agricultural commodities
to the Government of Sudan, to any individual or entity in an area of
Sudan other than the Specified Areas of Sudan, or to persons in third
countries purchasing specifically for resale to the foregoing. Specific
licenses issued pursuant to this section will authorize the brokering
only of sales that:
* * * * *
(2) Are to purchasers permitted pursuant to Sec. 538.523(a)(1);
and
* * * * *
Dated: September 1, 2009.
Adam J. Szubin,
Director, Office of Foreign Assets Control.
[FR Doc. E9-21553 Filed 9-8-09; 8:45 am]
BILLING CODE 4811-45-P