Sudanese Sanctions Regulations; Iranian Transactions Regulations, 63191-63197 [2011-26175]

Agencies

• DEPARTMENT OF THE TREASURY
• Office of Foreign Assets Control

[Federal Register Volume 76, Number 197 (Wednesday, October 12, 2011)]
[Rules and Regulations]
[Pages 63191-63197]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-26175]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 538 and 560


Sudanese Sanctions Regulations; Iranian Transactions 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 adopting as final, with changes, a previously 
issued interim final rule. These changes primarily amend the Sudanese 
Sanctions Regulations and the Iranian Transactions Regulations by 
issuing general licenses that authorize the exportation or 
reexportation of food to individuals and entities in an area of Sudan 
other than the Specified Areas of Sudan and in Iran. Certain specified 
food items, as well as exports to certain persons, requiring a greater 
level of scrutiny are excluded from the general licenses.

DATES: Effective Date: October 12, 2011.

FOR FURTHER INFORMATION CONTACT: Assistant Director for Sanctions 
Compliance and Evaluation, 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).

[[Page 63192]]


SUPPLEMENTARY INFORMATION:

Electronic and Facsimile Availability

    This document and additional information concerning OFAC are 
available from OFAC's Web site (https://www.treasury.gov/ofac). Certain 
general information pertaining to OFAC's sanctions programs is also 
available via facsimile through a 24-hour fax-on-demand service, tel.: 
202/622-0077.

Background

    OFAC today is adopting as final, with changes, a previously issued 
interim final rule. See 74 FR 61030 (November 23, 2009) (the ``2009 
interim final rule''). These changes primarily amend the Sudanese 
Sanctions Regulations, 31 CFR part 538 (the ``SSR''), and the Iranian 
Transactions Regulations, 31 CFR part 560 (the ``ITR''), by issuing 
general licenses that authorize the exportation or reexportation of 
food (as defined in the general licenses) to Sudan and Iran, 
respectively. Certain specified food items, as well as exports to 
certain persons, requiring a greater level of scrutiny are excluded 
from the general licenses.
    The 2009 interim final rule made technical changes to certain 
sections of the SSR and the ITR relating to the Trade Sanctions Reform 
and Export Enhancement Act of 2000, as amended (22 U.S.C. 7201 et seq.) 
(``TSRA''). The 2009 interim final rule and accompanying preamble 
clarified OFAC's policy with respect to the process for issuing one-
year licenses to export agricultural commodities, medicine, and medical 
devices to Sudan and Iran, and the considerations relevant to such 
licensing decisions. Although a prior notice of proposed rulemaking was 
not required with respect to the 2009 interim final rule, OFAC 
solicited comments on the 2009 interim final rule in order to consider 
how it might make improvements to these sections of the SSR and ITR. 
OFAC received no comments in response to this solicitation.
    TSRA provides that, with certain exceptions, the President may not 
impose a unilateral agricultural sanction or unilateral medical 
sanction against a foreign country or foreign entity unless, at least 
60 days before imposing such a sanction, the President submits a report 
to Congress describing the proposed sanction and the reasons for it and 
Congress enacts a joint resolution approving the report. See 22 U.S.C. 
7202. Section 906 of TSRA, however, requires in pertinent part that the 
export of agricultural commodities, medicine, and medical devices to 
Cuba, or to the government of a country that has been determined by the 
Secretary of State, pursuant to, inter alia, section 6(j) of the Export 
Administration Act of 1979 (50 U.S.C. App. 2405(j)), 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, except that the requirements of such 
one-year licenses shall be no more restrictive than general licenses 
administered by the Department of the Treasury. See 22 U.S.C. 
7205(a)(1). Section 906 also specifies that procedures be in place to 
deny licenses for exports of agricultural commodities, medicine, and 
medical devices to any entity within such country promoting 
international terrorism.
    Moreover, as provided in section 221 of the USA PATRIOT Act (Pub. 
L. 107-56) (codified at 22 U.S.C. 7210), nothing in TSRA shall limit 
the application or scope of any law, including any Executive order or 
regulation promulgated pursuant to such law, establishing criminal or 
civil penalties for the unlawful export of any agricultural commodity, 
medicine, or medical device to a Foreign Terrorist Organization; a 
foreign organization, group, or person designated pursuant to Executive 
orders 12947 or 13224 (sanctioning terrorists); weapons of mass 
destruction or missile proliferators; or designated narcotics 
trafficking entities. In addition, TSRA itself provides in section 
904(2) that the restrictions on the imposition of unilateral 
agricultural sanctions or unilateral medical sanctions shall not affect 
any authority or requirement to impose a sanction to the extent such 
sanction applies to any agricultural commodity, medicine, or medical 
device that is (A) Controlled on the United States Munitions List (the 
``USML''), (B) controlled on any control list established under the 
Export Administration Act of 1979 or any successor statute, or (C) used 
to facilitate the design, development, or production of chemical or 
biological weapons, missiles, or weapons of mass destruction. See 22 
U.S.C. 7203(2).
    Since the issuance of the 2009 interim final rule, OFAC has 
continued to review its TSRA licensing procedures, particularly the 
procedures for licensing exports of agricultural commodities. As a 
result of this review, OFAC has determined to authorize, by general 
license, the exportation or reexportation to Sudan and Iran of those 
agricultural commodities that constitute food, subject to certain 
limited exceptions. For purposes of these general licenses, OFAC has 
defined food as items that are intended to be consumed by and provide 
nutrition to humans or animals in Sudan or Iran--including vitamins and 
minerals, food additives and supplements, and bottled drinking water--
and seeds that germinate into items that are intended to be consumed by 
and provide nutrition to humans or animals in Sudan or Iran. The 
definitions also specify that food does not include alcoholic 
beverages, cigarettes, gum, or fertilizer.
    OFAC has further determined that the exportation or reexportation 
of a small number of food items (which are set forth in SSR section 
538.523(a)(3)(C) and ITR section 560.530(a)(2)(C)) to the Governments 
of Sudan or Iran, any individual or entity in an area of Sudan other 
than the Specified Areas of Sudan or in Iran, and persons in third 
countries purchasing specifically for resale to any of the foregoing, 
as well as the exportation or reexportation of food to military or law 
enforcement purchasers or importers (see SSR section 538.523(a)(3)(D) 
and ITR section 560.530(a)(2)(D)), continue to require the level of 
review afforded by specific licensing. Specific licenses are still 
required also for the exportation or reexportation of agricultural 
commodities that do not fall within the definition of food in the 
general licenses, medicine, and medical devices.
    Accordingly, through a new general license set forth at SSR section 
538.523(a)(3), OFAC is authorizing the exportation or reexportation of 
food (other than those food items excluded by SSR section 
538.523(a)(3)(C) and other than exports or reexports of food to persons 
excluded by SSR section 538.523(a)(3)(D)) to the Government of Sudan, 
individuals or entities in an area of Sudan other than the Specified 
Areas of Sudan, or persons in third countries purchasing specifically 
for resale to any of the foregoing, and the conduct of related 
transactions, 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. OFAC also is authorizing the 
exportation or reexportation of food (other than those food items 
excluded by ITR section 560.530(a)(2)(C) and other than exports or 
reexports of food to persons excluded by ITR section 560.530(a)(2)(D)) 
to the Government of Iran, individuals or entities in Iran, or persons 
in third countries purchasing specifically for resale to any of the 
foregoing, and the conduct of related transactions, through a new 
general license set forth at ITR

[[Page 63193]]

section 560.530(a)(2), 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. Each year, by the anniversary 
of the effective date of this final rule on October 12, 2011, OFAC will 
determine whether to revoke these general licenses. Unless revoked, 
these general licenses will remain in effect.
    As with the general license authorizing the exportation or 
reexportation of TSRA-eligible items to the Specified Areas of Sudan 
(see 31 CFR 538.523; 74 FR 46361 (September 9, 2009)), existing 
prohibitions and safeguards satisfy TSRA's requirement that procedures 
be in place to deny authorization for exports to entities within Iran 
or Sudan that are determined to be promoting international terrorism. 
For instance, the provisions in the terrorism programs set forth in 31 
CFR chapter V that generally prohibit U.S. persons from engaging in 
transactions with persons whose property and interests in property are 
blocked under those programs render these general licenses inapplicable 
to exports of food to such entities. In addition, pursuant to section 
538.502 of the SSR and section 560.502 of the ITR, OFAC may exclude any 
person, property, or transaction from the operation of these general 
licenses or restrict the applicability of these general licenses with 
respect to particular persons, property, transactions, or classes 
thereof, including persons determined not to meet the TSRA eligibility 
standard. Section 501.803 of the Reporting, Procedures and Penalties 
Regulations, 31 CFR part 501 (the ``RPPR'') similarly provides that 
OFAC may amend, modify, or revoke these general licenses at any time. 
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 section 501.601 of the RPPR, and 
OFAC's authority to obtain these records, pursuant to section 501.602 
of the RPPR, allow OFAC to monitor activities under these general 
licenses in order to determine whether it should exercise these 
authorities.
    The general licenses set forth at SSR section 538.523(a)(3) and ITR 
section 560.530(a)(2) do not authorize the exportation or reexportation 
to Sudan or Iran, respectively, of castor beans, castor bean seeds, raw 
eggs, fertilized eggs (other than fish and shrimp roe), dried egg 
albumin, live animals, Rosary/Jequirity peas, non-food-grade gelatin 
powder, and peptones and their derivatives. (See SSR section 
538.523(a)(3)(C) and ITR section 560.530(a)(2)(C) for the exclusion of 
these food items.) Additionally, the general licenses do not authorize 
the exportation or reexportation of food to military or law enforcement 
purchasers or importers. (See SSR section 538.523(a)(3)(D) and ITR 
section 560.530(a)(2)(D) for the exclusion of these persons.) The 
general licenses also do not apply to any transaction or dealing with a 
person whose property and interests in property are blocked under, or 
who is designated or otherwise subject to any sanction under, inter 
alia, the terrorism, proliferation of weapons of mass destruction, or 
narcotics trafficking programs administered by OFAC. (See SSR section 
538.523(d)(5) and ITR section 560.530(d)(5) for these exclusions.)
    Specific licenses are still required for the exportation or 
reexportation of the following to the Government of Sudan (wherever 
located), 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 any of the foregoing, and for the 
conduct of related transactions:

--Agricultural commodities that do not fall within the definition of 
food set forth in SSR section 538.523(a)(3)(B),
--The excluded food items specified in SSR section 538.523(a)(3)(C),
--Food intended for military or law enforcement purchasers or 
importers,
--Medicine, and
--Medical devices.
    Similarly, specific licenses are still required for the exportation 
or reexportation of the following to the Government of Iran (wherever 
located), to any individual or entity in Iran, or to persons in third 
countries purchasing specifically for resale to any of the foregoing, 
and for the conduct of related transactions:

--Agricultural commodities that do not fall within the definition of 
food set forth in ITR section 560.530(a)(2)(B),
--The excluded food items specified in ITR section 560.530(a)(2)(C),
--Food intended for military or law enforcement purchasers or 
importers,
--Medicine, and
--Medical devices.

Public Participation

    Because the amendment of 31 CFR parts 538 and 560 involves a 
foreign affairs function, the provisions of Executive Order 12866 of 
September 30, 1993, 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 parts 538 and 560 
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

31 CFR Part 538

    Administrative practice and procedure, Agricultural commodities, 
Banks, Banking, Blocking of assets, Drugs, Exports, Food, Foreign 
trade, Humanitarian aid, Investments, Loans, Medical devices, Medicine, 
Penalties, Reporting and recordkeeping requirements, Services, 
Specially designated nationals, Sudan, Terrorism, Transportation, 
Weapons of mass destruction.

31 CFR Part 560

    Administrative practice and procedure, Agricultural commodities, 
Banks, Banking, Blocking of assets, Drugs, Exports, Food, Foreign 
trade, Humanitarian aid, Investments, Iran, Loans, Medical devices, 
Medicine, Penalties, Reporting and recordkeeping requirements, 
Services, Specially designated nationals, Terrorism, Transportation, 
Weapons of mass destruction.

    For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control is adopting the interim 
final rule of November 23, 2009 (see 74 FR 61030), as final, with the 
following changes:

PART 538--SUDANESE SANCTIONS REGULATIONS

0
1. The authority citation for part 538 continues to read as follows:

    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; Pub. L. 101-410, 104 Stat. 
890 (28 U.S.C. 2461 note); 22 U.S.C. 7201-7211; Pub. L. 109-344, 120 
Stat. 1869; Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); 
E.O. 13067, 62 FR 59989, 3 CFR, 1997

[[Page 63194]]

Comp., p. 230; E.O. 13412, 71 FR 61369, 3 CFR, 2006 Comp., p. 244.

Subpart D--Interpretations

0
2. Amend Sec.  538.405 by revising paragraph (d) and adding a new note 
to 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 
the excluded food items specified in Sec.  538.523(a)(3)(iii), other 
agricultural commodities not included in the definition of food set 
forth in Sec.  538.523(a)(3)(ii), food (as defined in Sec.  
538.523(a)(3)(ii)) intended for military or law enforcement purchasers 
or importers, medicine, and medical devices to the Government of Sudan, 
to an area of Sudan other than the Specified Areas of Sudan, or to 
persons in third countries purchasing specifically for resale to any of 
the foregoing. See Sec.  538.525.

    Note to Sec.  538.405(d): See Sec.  538.523(a)(3) for a general 
license authorizing the exportation or reexportation of food 
(including bulk agricultural commodities listed in appendix A to 
this part) to the Government of Sudan, individuals or entities in an 
area of Sudan other than the Specified Areas of Sudan, or persons in 
third countries purchasing specifically for resale to any of the 
foregoing, and the conduct of related transactions.

Subpart E--Licenses, Authorizations, and Statements of Licensing 
Policy

0
3. Amend Sec.  538.523 by revising the first two sentences of paragraph 
(a)(1) and revising paragraph (a)(2), adding new paragraph (a)(3), 
adding new notes 1 and 2 to new paragraph (a)(3), revising paragraphs 
(b)(1), (b)(2), (d)(5), (e)(1) introductory text, (e)(2), and (e)(3), 
and adding new paragraph (f) 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 the excluded food items specified in paragraph 
(a)(3)(iii) of this section, agricultural commodities that do not fall 
within the definition of food set forth in paragraph (a)(3)(ii) of this 
section, food (as defined in paragraph (a)(3)(ii) of this section) 
intended for military or law enforcement purchasers or importers, 
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 any of the foregoing, shall only be made pursuant to a one-
year specific license issued by the 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 devices 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 or their involvement in weapons of 
mass destruction or missile proliferation. * * *
    (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), 
medicine, and medical devices to any individual or entity in the 
Specified Areas of Sudan, or to persons in third countries purchasing 
specifically for resale to any of the foregoing, 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, shipping of the goods, 
receipt of payment, and the entry into contracts (including executory 
contracts), are hereby authorized, 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, and provided 
that such activities or transactions relating to the exportation or 
reexportation of the excluded food items specified in paragraph 
(a)(3)(iii) of this section, agricultural commodities that do not fall 
within the definition of food set forth in paragraph (a)(3)(ii) of this 
section, food (as defined in paragraph (a)(3)(ii) of this section) 
intended for military or law enforcement purchasers or importers, 
medicine, and medical devices 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. The transshipment of 
agricultural commodities that fall within the definition of food set 
forth in paragraph (a)(3)(ii) of this section, other than the excluded 
food items specified in paragraph (a)(3)(iii) of this section and other 
than food intended for military or law enforcement purchasers or 
importers, through an area of Sudan other than the Specified Areas of 
Sudan destined for the Specified Areas of Sudan also is authorized by 
this general license. Nothing in this general license authorizes the 
transshipment of the excluded food items specified in paragraph 
(a)(3)(iii) of this section, agricultural commodities that do not fall 
within the definition of food set forth in paragraph (a)(3)(ii) of this 
section, food (as defined in paragraph (a)(3)(ii) of this section) 
intended for military or law enforcement purchasers or importers, 
medicine, and medical devices through an area of Sudan other than the 
Specified Areas of Sudan destined for the Specified Areas of Sudan. See 
Sec.  538.417.
* * * * *
    (3)(i) General license for the exportation or reexportation of 
food. Except as provided in paragraphs (a)(3)(iii) and (a)(3)(iv) of 
this section, the exportation or reexportation of food (including bulk 
agricultural commodities listed in appendix A to this part) 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 any of the foregoing, 
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, shipping of the 
goods, receipt of payment, and the entry into contracts (including 
executory contracts), are hereby authorized, 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.
    (ii) Definition of Food. For purposes of this general license, the 
term food means items that are intended to be consumed by and provide 
nutrition to humans or animals in Sudan, including vitamins and 
minerals, food additives and supplements, and bottled drinking water, 
and seeds that germinate into items that are intended to be consumed by 
and provide nutrition to humans or animals in Sudan. For purposes of 
this general license, the term food does not include alcoholic 
beverages, cigarettes, gum, or fertilizer.
    (iii) Excluded food items. Paragraph (a)(3)(i) of this section does 
not authorize the exportation or reexportation of the following food

[[Page 63195]]

items: castor beans, castor bean seeds, raw eggs, fertilized eggs 
(other than fish and shrimp roe), dried egg albumin, live animals, 
Rosary/Jequirity peas, non-food-grade gelatin powder, and peptones and 
their derivatives.
    (iv) Excluded persons. Paragraph (a)(3)(i) of this section does not 
authorize the exportation or reexportation of food to military or law 
enforcement purchasers or importers.

    Note 1 to Sec.  538.523(a)(3): 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 on 
October 12, 2011, 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)(3): See Sec.  538.418 for additional 
requirements with respect to financial transactions in Sudan.

    (b) General license for arrangement of exportation or reexportation 
of covered products subject to the one year specific license 
requirement of paragraph (a)(1) of this section.
    (1) With respect to sales pursuant to paragraph (a)(1) of this 
section, 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 the excluded 
food items specified in paragraph (a)(3)(iii) of this section, 
agricultural commodities that do not fall within the definition of food 
set forth in paragraph (a)(3)(ii) of this section, food (as defined in 
paragraph (a)(3)(ii) of this section) intended for military or law 
enforcement purchasers or importers, 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 any of the foregoing, 
are authorized.
    (2) 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 the excluded food items specified in 
paragraph (a)(3)(iii) of this section, agricultural commodities that do 
not fall within the definition of food set forth in paragraph 
(a)(3)(ii) of this section, food (as defined in paragraph (a)(3)(ii) of 
this section) intended for military or law enforcement purchasers or 
importers, 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 any of the foregoing, is authorized, 
provided that the 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.
* * * * *
    (d) * * *
    (5) Nothing in this section authorizes any transaction or dealing 
with a person whose property and interests in property are blocked 
under, or who is designated or otherwise subject to any sanction under, 
the terrorism, proliferation of weapons of mass destruction, or 
narcotics trafficking programs administered by OFAC, 31 CFR parts 536, 
544, 594, 595, 597, and 598, or with any foreign organization, group, 
or person subject to any restriction for its involvement in weapons of 
mass destruction or missile proliferation, or involving property 
blocked pursuant to this chapter or any other activity prohibited by 
this chapter not otherwise authorized in or pursuant to this part.
    (e) * * *
    (1) Agricultural commodities. For the purposes of this part, 
agricultural commodities are:
* * * * *
    (2) Medicine. For the purposes of this part, the term medicine has 
the same meaning given the term ``drug'' in section 201 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not include any 
item listed on the Commerce Control List in the Export Administration 
Regulations, 15 CFR part 774, supplement no. 1 (excluding items 
classified as EAR 99).
    (3) Medical device. For the purposes of this part, the term medical 
device has the meaning given the term ``device'' in section 201 of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not 
include any item listed on the Commerce Control List in the Export 
Administration Regulations, 15 CFR part 774, supplement no. 1 
(excluding items classified as EAR 99).
    (f) Excluded items. For the purposes of this part, agricultural 
commodities do not include furniture made from wood; clothing 
manufactured from plant or animal materials; agricultural equipment 
(whether hand tools or motorized equipment); pesticides, insecticides, 
or herbicides; or cosmetics (unless derived entirely from plant 
materials).

0
4. Amend Sec.  538.525 by revising the section heading and the 
introductory text of paragraph (a) to read as follows:


Sec.  538.525  Payment for and financing of commercial sales of certain 
agricultural commodities, medicine, and medical devices.

    (a) General license for payment terms. The following payment terms 
for sales, pursuant to Sec.  538.523(a)(1), of the excluded food items 
specified in Sec.  538.523(a)(3)(iii), agricultural commodities that do 
not fall within the definition of food set forth in Sec.  
538.523(a)(3)(ii), food (as defined in Sec.  538.523(a)(3)(ii)) 
intended for military or law enforcement purchasers or importers, 
medicine, or medical devices 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 any of the foregoing are authorized:
* * * * *

0
5. Amend Sec.  538.526 by revising the section heading and paragraph 
(a) to read as follows:


Sec.  538.526  Brokering commercial 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 sales and exportations or reexportations by 
United States persons that are described in paragraphs (a)(1), (a)(2), 
and (a)(3) of Sec.  538.523, provided that the sale and exportation or 
reexportation is authorized, as applicable, by a one-year specific 
license issued pursuant to paragraph (a)(1) of Sec.  538.523 or by one 
of the general licenses set forth in paragraphs (a)(2) and (3) of Sec.  
538.523.
* * * * *

0
6. Amend Appendix A to part 538 by revising Note 1 to read as follows:

Appendix A to Part 538--Bulk Agricultural Commodities

    Notes: 1. Appendix A sets forth bulk agricultural commodities 
eligible for sale pursuant to the licensing procedures and general 
licenses in Sec.  538.523.

* * * * *

PART 560--IRANIAN TRANSACTIONS REGULATIONS

0
7. The authority citation for part 560 continues to read as follows:

    Authority:  3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C. 
2349aa-9; 22 U.S.C. 7201-7211; 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); Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); Pub. L. 
111-195, 124 Stat. 1312 (22 U.S.C. 8501-8551); E.O. 12613, 52 FR 
41940, 3 CFR, 1987 Comp.,

[[Page 63196]]

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.


0
8. Amend Sec.  560.405 by revising paragraph (d) and adding a new note 
to paragraph (d) to read as follows:


Sec.  560.405  Transactions incidental to a licensed transaction 
authorized.

* * * * *
    (d) Financing of licensed sales for exportation or reexportation of 
the excluded food items specified in Sec.  560.530(a)(2)(iii), other 
agricultural commodities not included in the definition of food set 
forth in Sec.  560.530(a)(2)(ii), food (as defined in Sec.  
560.530(a)(2)(ii)) intended for military or law enforcement purchasers 
or importers, medicine, or medical devices to Iran, to the Government 
of Iran, or to persons in third countries purchasing specifically for 
resale to any of the foregoing (see Sec.  560.532); and

    Note to Sec.  560.405(d):  See Sec.  560.530(a)(2) for a general 
license authorizing the exportation or reexportation of food 
(including bulk agricultural commodities listed in appendix B to 
this part) to the Government of Iran, individuals or entities in 
Iran, or persons in third countries purchasing specifically for 
resale to any of the foregoing, and the conduct of related 
transactions.

* * * * *

0
9. Amend Sec.  560.530 by revising paragraph (a), adding a note to new 
paragraph (a)(2), and revising paragraph (b), the introductory text to 
paragraph (c), paragraph (d)(5), and paragraphs (e)(1) introductory 
text, (e)(2), and (e)(3), and adding new paragraph (f) to read as 
follows:


Sec.  560.530  Commercial sales, exportation, and reexportation of 
agricultural commodities, medicine, and medical devices.

    (a)(1) One-year specific license requirement. The exportation or 
reexportation of the excluded food items specified in paragraph 
(a)(2)(iii) of this section, agricultural commodities that do not fall 
within the definition of food set forth in paragraph (a)(2)(ii) of this 
section, food (as defined in paragraph (a)(2)(ii) of this section) 
intended for military or law enforcement purchasers or importers, 
medicine, or medical devices to the Government of Iran, to any 
individual or entity in Iran, or to persons in third countries 
purchasing specifically for resale to any of the foregoing, shall only 
be made pursuant to a one-year specific license issued by the 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 devices to any entity or individual 
in Iran 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 or their 
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)(i) General license for the exportation or reexportation of 
food. Except as provided in paragraphs (a)(2)(iii) and (a)(2)(iv) of 
this section, the exportation or reexportation of food (including bulk 
agricultural commodities listed in appendix B to this part) to the 
Government of Iran, to any individual or entity in Iran, or to persons 
in third countries purchasing specifically for resale to any of the 
foregoing, 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, 
shipping of the goods, receipt of payment, and the entry into contracts 
(including executory contracts), are hereby authorized, 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.
    (ii) Definition of Food. For purposes of this general license, the 
term food means items that are intended to be consumed by and provide 
nutrition to humans or animals in Iran, including vitamins and 
minerals, food additives and supplements, and bottled drinking water, 
and seeds that germinate into items that are intended to be consumed by 
and provide nutrition to humans or animals in Iran. For purposes of 
this general license, the term food does not include alcoholic 
beverages, cigarettes, gum, or fertilizer.
    (iii) Excluded food items. Paragraph (a)(2)(i) of this section does 
not authorize the exportation or reexportation of the following food 
items: castor beans, castor bean seeds, raw eggs, fertilized eggs 
(other than fish and shrimp roe), dried egg albumin, live animals, 
Rosary/Jequirity peas, non-food-grade gelatin powder, and peptones and 
their derivatives.
    (iv) Excluded persons. Paragraph (a)(2)(i) of this section does not 
authorize the exportation or reexportation of food to military or law 
enforcement purchasers or importers.

    Note to Sec.  560.530(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 on 
October 12, 2011, the Office of Foreign Assets Control will 
determine whether to revoke this general license. Unless revoked, 
the general license will remain in effect.

    (b) General licensefor arrangement of exportation or reexportation 
of covered products subject to the one-year specific license 
requirement of paragraph (a)(1) of this section.
    (1) With respect to sales pursuant to paragraph (a)(1) of this 
section, the making of shipping arrangements, cargo inspections, 
obtaining of insurance, and arrangement of financing (consistent with 
Sec.  560.532) for the exportation or reexportation of the excluded 
food items specified in paragraph (a)(2)(iii) of this section, 
agricultural commodities that do not fall within the definition of food 
set forth in paragraph (a)(2)(ii) of this section, food (as defined in 
paragraph (a)(2)(ii) of this section) intended for military or law 
enforcement purchasers or importers, medicine, or medical devices to 
the Government of Iran, to any individual or entity in Iran, or to 
persons in third countries purchasing specifically for resale to any of 
the foregoing, are authorized.
    (2) 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 the excluded food items specified in 
paragraph (a)(2)(iii) of this section, agricultural commodities that do 
not fall within the definition of food set forth in paragraph 
(a)(2)(ii) of this section, food (as defined in paragraph (a)(2)(ii) of 
this section) intended for military or law enforcement purchasers or 
importers, medicine, or medical devices to the Government of Iran, to 
any individual or entity in Iran, or to persons in third countries 
purchasing specifically for resale to any of the foregoing, is 
authorized, provided that

[[Page 63197]]

the 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:
* * * * *
    (d) * * *
    (5) Nothing in this section authorizes any transaction or dealing 
with a person whose property and interests in property are blocked 
under, or who is designated or otherwise subject to any sanctions 
under, the terrorism, proliferation of weapons of mass destruction, or 
narcotics trafficking programs administered by OFAC, 31 CFR parts 536, 
544, 594, 595, 597, and 598, or with any foreign organization, group, 
or person subject to any restriction for its involvement in weapons of 
mass destruction or missile proliferation, or involving property 
blocked pursuant to this chapter or any other activity prohibited by 
this chapter not otherwise authorized in or pursuant to this part.
    (e) * * *
    (1) Agricultural commodities. For the purposes of this part, 
agricultural commodities are:
* * * * *
    (2) Medicine. For the purposes of this part, the term medicine has 
the same meaning given the term ``drug'' in section 201 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not include any 
item listed on the Commerce Control List in the Export Administration 
Regulations, 15 CFR part 774, supplement no. 1 (excluding items 
classified as EAR 99).
    (3) Medical device. For the purposes of this part, the term medical 
device has the meaning given the term ``device'' in section 201 of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not 
include any item listed on the Commerce Control List in the Export 
Administration Regulations, 15 CFR part 774, supplement no. 1 
(excluding items classified as EAR 99).
    (f) Excluded items. For the purposes of this part, agricultural 
commodities do not include furniture made from wood; clothing 
manufactured from plant or animal materials; agricultural equipment 
(whether hand tools or motorized equipment); pesticides, insecticides, 
or herbicides; or cosmetics (unless derived entirely from plant 
materials).

0
10. Amend Sec.  560.532 by revising the section heading, the 
introductory text of paragraph (a), and the first sentence of paragraph 
(b) to read as follows:


Sec.  560.532  Payment for and financing of commercial sales of certain 
agricultural commodities, medicine, and medical devices.

    (a) General license for payment terms. The following payment terms 
for sales, pursuant to Sec.  560.530(a)(1), of the excluded food items 
specified in Sec.  560.530(a)(2)(iii), agricultural commodities that do 
not fall within the definition of food set forth in Sec.  
560.530(a)(2)(ii), food (as defined in Sec.  560.530(a)(2)(ii)) 
intended for military or law enforcement purchasers or importers, 
medicine, or medical devices to the Government of Iran, to any 
individual or entity in Iran, or to persons in third countries 
purchasing specifically for resale to any of the foregoing are 
authorized:
* * * * *
    (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 Sec.  560.530(a)(1). * * *
* * * * *

0
11. Amend Sec.  560.533 by revising the section heading and paragraph 
(a) to read as follows:


Sec.  560.533  Brokering commercial 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 sales and exportations or reexportations by 
United States persons that are described in paragraphs (a)(1) and 
(a)(2) of Sec.  560.530, provided that the sale and exportation or 
reexportation is authorized, as applicable, by a one-year specific 
license issued pursuant to paragraph (a)(1) of Sec.  560.530 or by the 
general license set forth in paragraph (a)(2) of Sec.  560.530.
* * * * *

0
12. Amend Appendix B to part 560 by revising Note 1 to read as follows:

Appendix B to Part 560--Bulk Agricultural Commodities

    Notes: 1. Appendix B sets forth bulk agricultural commodities 
eligible for sale pursuant to the licensing procedures and the 
general license in Sec.  560.530.

* * * * *

    Dated: October 4, 2011.
Adam J. Szubin,
Director, Office of Foreign Assets Control.
[FR Doc. 2011-26175 Filed 10-11-11; 8:45 am]
BILLING CODE 4810-AL-P