83 FR 55269 - Iranian Transactions and Sanctions Regulations

DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control

Federal Register Volume 83, Issue 214 (November 5, 2018)

The Department of the Treasury's Office of Foreign Assets Control (OFAC) is amending the Iranian Transactions and Sanctions Regulations (ITSR) to implement further the President's May 8, 2018 decision to cease the United States' participation in the Joint Comprehensive Plan of Action (JCPOA) by making changes to reflect the re-imposition of sanctions pursuant to certain sections of Executive Order 13846 and changes to certain sanctions lists maintained by OFAC. OFAC is also amending an existing general license in the ITSR to authorize U.S. persons to sell personal property in Iran and transfer the proceeds to the United States.

[Federal Register Volume 83, Number 214 (Monday, November 5, 2018)]
[Rules and Regulations]
[Pages 55269-55271]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-24058]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 560 and Appendix A to Chapter V


Iranian Transactions and 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 Iranian Transactions and Sanctions 
Regulations (ITSR) to implement further the President's May 8, 2018 
decision to cease the United States' participation in the Joint 
Comprehensive Plan of Action (JCPOA) by making changes to reflect the 
re-imposition of sanctions pursuant to certain sections of Executive 
Order 13846 and changes to certain sanctions lists maintained by OFAC. 
OFAC is also amending an existing general license in the ITSR to 
authorize U.S. persons to sell personal property in Iran and transfer 
the proceeds to the United States.

DATES: Effective: November 5, 2018.

FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for 
Licensing, tel.: 202-622-2480; Assistant Director for Regulatory 
Affairs, tel.: 202-622-4855; Assistant Director for Sanctions 
Compliance & Evaluation, tel.: 202-622-2490; or the Department of the 
Treasury's Office of the Chief Counsel (Foreign Assets Control), Office 
of the General Counsel, tel.: 202-622-2410.

SUPPLEMENTARY INFORMATION:

Electronic Availability

    This document and additional information concerning OFAC are 
available on OFAC's website (www.treasury.gov/ofac).

Background

Implementing the President's May 8, 2018 Decision by Reinstating 
Certain Authorities in the ITSR and Making Certain Technical and 
Conforming Changes

    On May 8, 2018, the President issued National Security Presidential 
Memorandum-11 (NSPM-11), which set forth his decision to cease the 
United States' participation in the JCPOA. In NSPM-11, the President 
directed the Secretary of State and the Secretary of the Treasury to 
immediately begin taking steps to reimpose all U.S. sanctions lifted or 
waived in connection with the JCPOA as expeditiously as possible, and 
in no case later than 180 days from the date of NSPM-11. In accordance 
with his decision, on August 6, 2018, the President issued Executive 
Order 13846 (83 FR 38939, August 7, 2018) (E.O. 13846) to, among other 
things, re-impose relevant authorities from certain Executive Orders 
that had been revoked previously. Today, OFAC is amending the ITSR, 31 
CFR part 560, and appendix A to 31 CFR chapter V to take additional 
regulatory steps to implement the President's May 8, 2018 decision.
    Previously revoked authorities. On January 16, 2016, the President 
issued Executive Order 13716 (81 FR 3693, January 21, 2016) (E.O. 
13716), which, among other things, revoked Executive Order 13622 of 
July 30, 2012 (77 FR 45897, August 2, 2012) (E.O. 13622) in connection 
with the JCPOA. In light of this revocation, on January 21, 2016, OFAC 
amended the ITSR to, among other things, remove regulatory provisions 
that implemented sections 5 and 6 of E.O. 13622. (See 81 FR 3330). In 
that rule, OFAC also made certain technical and conforming changes to 
the ITSR and appendix A to 31 CFR chapter V related to (1) the removal 
of certain individuals and entities from OFAC's Specially Designated 
Nationals and Blocked Persons List (SDN List), the Foreign Sanctions 
Evaders List, and the Non-SDN Iran Sanctions Act List on January 16, 
2016, and (2) the concurrent transfer of certain individuals and 
entities that OFAC had previously identified as blocked pursuant to 
E.O. 13599 of February 5, 2012, to a ``List of Persons Identified as 
Blocked Solely Pursuant to Executive Order 13599'' (E.O. 13599 List), 
which OFAC made available on its website on January 16, 2016.
    Reinstating certain authorities and removing E.O. 13599 List 
references. In furtherance of the President's May 8, 2018 decision and 
in light of the issuance of E.O. 13846, OFAC is now amending the ITSR 
and appendix A to 31 CFR chapter V by: (1) Reinstating the regulatory 
provisions implementing the authorities that were previously in 
sections 5 and 6 of E.O. 13622 and now are in sections 1 and 10 of E.O. 
13846 by revising paragraph (c) of Sec.  560.211 of the ITSR; and (2) 
removing references to the E.O. 13599 List by revising notes in 
Sec. Sec.  560.211 and 560.304 of the ITSR, revising note 1 to Sec.  
560.324 of the ITSR, and revising a note to appendix A to 31 CFR 
chapter V.
    Sections 1(a)(i) and 1(a)(ii) of E.O. 13846 authorize the Secretary 
of the Treasury to block all property and interests in property that 
are in the United States, that come within the United States, or that 
are or come within the possession or control of any U.S. person, 
including any foreign branch, of a person upon determining that: (i) On 
or after August 7, 2018, the person has materially assisted, sponsored, 
or provided financial, material, or technological support for, or goods 
or services in support of, the purchase or acquisition of U.S. bank 
notes or precious metals by the Government of Iran, or (ii) on or after 
November 5, 2018, the person has materially assisted, sponsored, or 
provided financial, material, or technological support for, or goods or 
services in support of, the National Iranian Oil Company (NIOC), the 
Naftiran Intertrade Company (NICO), or the Central Bank of Iran. 
Section 16 of E.O. 13846 defines the terms ``NIOC'' and ``NICO'' as 
including any entity owned or controlled by, or operating for or on 
behalf of, respectively, NIOC or NICO. Section 10 of E.O. 13846 
provides that section 1(a) of the order, among other specified 
provisions, shall not apply to any person for conducting or 
facilitating a transaction involving a project described in subsection 
(a) of section 603 of the Iran Threat Reduction and Syria Human Rights 
Act of 2012 to which the exception under that section applies. Although 
it is not named in the section, section 10 of E.O. 13846 refers to the 
Shah Deniz natural gas field in Azerbaijan's sector of the Caspian Sea 
and related pipeline projects to bring the gas from Azerbaijan to 
Europe and Turkey.
    By separate action, effective November 5, 2018, OFAC is removing 
the E.O. 13599 List from its website and relisting on the SDN List, as

[[Page 55270]]

appropriate, individuals and entities that were previously listed on 
the E.O. 13599 List.

Sale of Certain Personal Property and Transfer of Proceeds to the 
United States

    Separately, OFAC is amending an existing general license in the 
ITSR to authorize U.S. persons to sell certain personal property in 
Iran and transfer the proceeds to the United States. Section 560.543 of 
the ITSR authorizes U.S. persons to engage in transactions necessary 
and ordinarily incident to the sale of real property in Iran, and to 
transfer the proceeds to the United States, provided that such real 
property was either acquired before the individual became a U.S. person 
or inherited from persons in Iran. OFAC routinely receives and approves 
specific license applications related to the sale of personal property 
in Iran which, prior to today's rule, were outside the scope of Sec.  
560.543. OFAC is therefore amending this general license to authorize 
U.S. persons to engage in transactions necessary and ordinarily 
incident to the sale of personal property in Iran, and to transfer the 
proceeds to the United States, provided that such personal property was 
either (1) acquired before the individual became a U.S. person or (2) 
inherited from persons in Iran. This authorization will complement 
Sec.  560.518, which authorizes certain transactions in Iranian-origin 
household and personal effects, as referenced in a new note OFAC is 
adding to Sec.  560.518.

Public Participation

    Because the amendment of the ITSR 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, as well as the provisions of Executive Order 13771, 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 the ITSR 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 560

    Administrative practice and procedure, Banks, banking, Iran.

    For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control amends 31 CFR chapter V as 
follows:

PART 560--IRANIAN TRANSACTIONS AND SANCTIONS REGULATIONS

0
1. The authority citation for part 560 is revised 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); Pub. L. 112-81, 125 
Stat. 1298 (22 U.S.C. 8513a); Pub. L. 112-158, 126 Stat. 1214 (22 
U.S.C. 8701-8795); 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; E.O. 13599, 77 FR 6659, 3 CFR, 2012 Comp., 
p. 215; E.O. 13846, 83 FR 38939.

Subpart B--Prohibitions

0
2. Amend Sec.  560.211 by revising paragraph (c), adding a note to 
paragraph (c)(2), and revising notes 1 and 2 to paragraphs (a) through 
(c) to read as follows:


Sec.  560.211  Prohibited transactions involving blocked property.

* * * * *
    (c)(1) All property and interests in property that are in the 
United States, that hereafter come within the United States, or that 
are or hereafter come within the possession or control of any United 
States person, including any foreign branch, of the following persons 
are blocked and may not be transferred, paid, exported, withdrawn, or 
otherwise dealt in:
    (i) Any person determined by the Secretary of the Treasury, in 
consultation with the Secretary of State, to be owned or controlled by, 
or to have acted or purported to act for or on behalf of, directly or 
indirectly, any person whose property and interests in property are 
blocked pursuant to paragraphs (a) through (c)(1)(i) of this section; 
or
    (ii) Any person determined by the Secretary of the Treasury, in 
consultation with the Secretary of State:
    (A) To have, on or after August 7, 2018, materially assisted, 
sponsored, or provided financial, material, or technological support 
for, or goods or services in support of, the purchase or acquisition of 
U.S. bank notes or precious metals by the Government of Iran; or
    (B) To have, on or after November 5, 2018, materially assisted, 
sponsored, or provided financial, material, or technological support 
for, or goods or services in support of, the National Iranian Oil 
Company (NIOC); the Naftiran Intertrade Company (NICO); any entity 
owned or controlled by, or operating for or on behalf of, NIOC or NICO; 
or the Central Bank of Iran.
    (2) Paragraph (c)(1)(ii) of this section shall not apply with 
respect to any person for conducting or facilitating a transaction 
involving a project--
    (i) For the development of natural gas and the construction and 
operation of a pipeline to transport natural gas from Azerbaijan to 
Turkey and Europe;
    (ii) That provides to Turkey and countries in Europe energy 
security and energy independence from the Government of the Russian 
Federation and the Government of Iran; and
    (iii) That was initiated before August 10, 2012 pursuant to a 
production-sharing agreement, or an ancillary agreement necessary to 
further a production-sharing agreement, entered into with, or a license 
granted by, the government of a country other than Iran before August 
10, 2012.

    Note to paragraph (c)(2) of Sec.  560.211: The natural gas 
development and pipeline project referred to in this paragraph is 
the project to develop the Shah Deniz natural gas field in 
Azerbaijan's sector of the Caspian Sea and related pipeline projects 
to bring the gas from Azerbaijan to Europe and Turkey.


    Note 1 to paragraphs (a) through (c) of Sec.  560.211: The names 
of persons that the Office of Foreign Assets Control (OFAC) has 
designated or identified pursuant to Executive Order 13599 (E.O. 
13599) or sections 1(a)(i) or 1(a)(ii) of Executive Order 13846, 
whose property and interests in property therefore are blocked 
pursuant to this section, are published in the Federal Register and 
incorporated into OFAC's Specially Designated Nationals and Blocked 
Persons List (SDN List) with the identifier ``[IRAN].'' The SDN List 
is accessible through the following page on OFAC's website: 
www.treasury.gov/sdn. Additional information pertaining to the SDN 
List can be found in appendix A to this chapter. See Sec.  560.425 
concerning entities that may not be listed on the SDN List but whose 
property and interests in property are nevertheless blocked pursuant 
to this section. E.O. 13599 blocks the property and interests in 
property of the Government of Iran and Iranian financial 
institutions, as defined in Sec.  560.304 and Sec.  560.324, 
respectively. The property and

[[Page 55271]]

interests in property of persons who meet the definitions of the 
terms Government of Iran or Iranian financial institution are 
blocked pursuant to this section regardless of whether the names of 
such persons are published in the Federal Register or incorporated 
into the SDN List.


    Note 2 to paragraphs (a) through (c) of Sec.  560.211: The 
International Emergency Economic Powers Act (50 U.S.C. 1701-1706), 
in section 203 (50 U.S.C. 1702), authorizes the blocking of property 
and interests in property of a person during the pendency of an 
investigation. The names of persons whose property and interests in 
property are blocked pending investigation pursuant to this section 
also are published in the Federal Register and incorporated into the 
SDN List with the identifier ``[BPI-IRAN].''

* * * * *

Subpart C--General Definitions

0
3. Revise Note 1 to Sec.  560.304 to read as follows:


Sec.  560.304  Government of Iran.

* * * * *

    Note 1 to Sec.  560.304: The names of persons that the Office of 
Foreign Assets Control (OFAC) has identified as meeting this 
definition are published in the Federal Register and incorporated 
into OFAC's Specially Designated Nationals and Blocked Persons List 
(SDN List) with the identifier ``[IRAN].'' The SDN List is 
accessible through the following page on OFAC's website: 
www.treasury.gov/sdn. However, the property and interests in 
property of any persons meeting the definition of the term 
Government of Iran are blocked pursuant to Sec.  560.211 regardless 
of whether the names of such persons are published in the Federal 
Register or incorporated into the SDN List.

* * * * *

0
4. Revise Note 1 to Sec.  560.324 to read as follows:


Sec.  560.324  Iranian financial institution.

* * * * *

    Note 1 to Sec.  560.324: The names of persons that the Office of 
Foreign Assets Control (OFAC) has identified as meeting this 
definition are published in the Federal Register and incorporated 
into OFAC's Specially Designated Nationals and Blocked Persons List 
(SDN List) with the identifier ``[IRAN].'' The SDN List is 
accessible through the following page on OFAC's website: 
www.treasury.gov/sdn. However, the property and interests in 
property of any persons meeting the definition of the term Iranian 
financial institution are blocked pursuant to Sec.  560.211 
regardless of whether the names of such persons are published in the 
Federal Register or incorporated into the SDN List.

* * * * *

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

0
5. Add a Note to Sec.  560.518 to read as follows:


Sec.  560.518  Transactions in Iranian-origin and Iranian government 
property.

* * * * *

    Note to Sec.  560.518: See Sec.  560.543 for an authorization to 
engage in all transactions necessary and ordinarily incident to the 
sale of certain real and personal property located in Iran.


0
6. Amend Sec.  560.543 by revising the section heading, paragraph (a), 
and paragraph (b)(2) to read as follows:


Sec.  560.543  Sale of certain real and personal property in Iran and 
transfer of related funds to the United States.

    (a) Individuals who are U.S. persons are authorized to engage in 
transactions necessary and ordinarily incident to the sale of real and 
personal property in Iran and to transfer the proceeds to the United 
States, provided that such real and personal property was acquired 
before the individual became a U.S. person or inherited from persons in 
Iran. Authorized transactions include engaging the services of any 
persons in Iran necessary for the sale, such as an attorney, funds 
agent, or broker.
    (b) * * *
    (1) * * *
    (2) The re-investment in Iran of the proceeds from the real or 
personal property sales authorized in paragraph (a) of this section; or
* * * * *

Appendix A to Chapter V--[Amended]

0
7. Revise the authority citation for appendix A to chapter V to read as 
follows:

    Authority: 3 U.S.C. 301; 8 U.S.C. 1182, 1189; 18 U.S.C. 2339B; 
21 U.S.C. 1901-1908; 22 U.S.C. 287c; 31 U.S.C. 321(b); 50 U.S.C. 
App. 1-44; Public Law 110-286, 122 Stat. 2632 (50 U.S.C. 1701 note); 
Public Law 111-195, 124 Stat. 1312 (22 U.S.C. 8501-8551); Public Law 
112-81, 125 Stat. 1298 (22 U.S.C. 8513a); Public Law 112-158, 126 
Stat. 1214 (22 U.S.C. 8701-8795); Public Law 112-208, 126 Stat. 
1502; Public Law 113-278, 128 Stat. 3011 (50 U.S.C. 1701 note); 
Public Law 114-102, 129 Stat. 2205; Public Law 114-122, 130 Stat. 
93; Public Law 114-194, 130 Stat. 674 (50 U.S.C. 1701 note); Public 
Law 114-328, 130 Stat. 2000 (22 U.S.C. 2656 note); Public Law 115-
44, 131 Stat. 886.


0
8. Revise note 8 to appendix A to chapter V to read as follows:

Appendix A to Chapter V--Information Pertaining to the Specially 
Designated Nationals and Blocked Persons List

* * * * *

    Notes: * * *

* * * * *
    8. The SDN List includes the names of persons identified as the 
Government of Iran or an Iranian financial institution and other 
persons whose property and interests in property are blocked 
pursuant to Sec.  560.211 of the Iranian Transactions and Sanctions 
Regulations, 31 CFR part 560 (ITSR). The SDN List entries for such 
persons include the identifier ``[IRAN].'' U.S. persons are advised 
to review 31 CFR part 560 prior to engaging in transactions 
involving the persons included on the SDN List with the identifier 
``[IRAN].'' U.S. persons are further cautioned that persons 
identified as the Government of Iran or an Iranian financial 
institution and any other person whose property and interests in 
property are blocked pursuant to 31 CFR 560.211 also may be 
designated or blocked pursuant to other sanctions programs 
administered by OFAC. The SDN List entry for such a person may 
include--in addition to the identifier ``[IRAN]''--identifier(s) for 
the other sanctions program(s) pursuant to which the person is 
listed on the SDN List. Moreover, the prohibitions set forth in the 
ITSR, and the compliance obligations, with respect to persons who 
meet the definition of the Government of Iran in Sec.  560.304 of 
the ITSR or the definition of Iranian financial institution in Sec.  
560.324 of the ITSR apply regardless of whether such persons are 
identified on the SDN List.

    Dated: October 30, 2018.
Andrea Gacki,
Director, Office of Foreign Assets Control.
[FR Doc. 2018-24058 Filed 11-2-18; 8:45 am]
BILLING CODE 4810-AL-P