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Background

On October 22, 2012, OFAC issued a final rule that amended the former Iranian Transactions Regulations, 31 CFR part 560, and reissued them in their entirety as the Iranian Transactions and ( printed page 61760) Sanctions Regulations (77 FR 64664, October 22, 2012) (the “Regulations”). With this rule, OFAC is amending the Regulations to implement Executive Order (E.O.) 13902 of January 10, 2020, “Imposing Sanctions With Respect to Additional Sectors of Iran” (85 FR 2003, January 14, 2020).

On January 10, 2020, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701 et. seq.) (IEEPA), issued E.O. 13902 to take further steps with respect to the national emergency declared in E.O. 12957 of March 15, 1995. In E.O. 13902, the President found that Iran continues to be the world's leading sponsor of terrorism and has threatened United States military assets and civilians through the use of military force and support to Iranian-backed militia groups, and stated that it remains the policy of the United States to deny Iran all paths to a nuclear weapon and intercontinental ballistic missiles, and to counter the totality of Iran's malign influence in the region. In furtherance of these objectives, the President stated that it is the policy of the United States to deny the Iranian government revenues, including revenues derived from the export of products from key sectors of Iran's economy, that may be used to fund and support its nuclear program, missile development program, terrorism and terrorist proxy networks, and malign regional influence.

Section 1(a) of E.O. 13902 blocks, with certain exceptions, 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 of any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: (i) to operate in the construction, mining, manufacturing, or textiles sectors of the Iranian economy, or any other sector of the Iranian economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State; (ii) to have knowingly engaged, on or after January 10, 2020, in a significant transaction for the sale, supply, or transfer to or from Iran of significant goods or services used in connection with a sector of the Iranian economy specified in, or determined by the Secretary of the Treasury, in consultation with the Secretary of State, pursuant to section 1(a)(i) of E.O. 13902; (iii) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to E.O. 13902; or (iv) 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 E.O. 13902. The blocked property and interests in property of the persons described above may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

In section 4 of E.O. 13902, the President determined that the making of donations of the type of articles specified in section 203(b)(2) of IEEPA by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to E.O. 13902 would seriously impair the President's ability to deal with the national emergency declared in E.O. 12957. The President therefore prohibited the donation of such items.

Section 5 of E.O. 13902 provides that the prohibition on any transaction or dealing in blocked property or interests in property includes the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to E.O. 13902, and the receipt of any contribution or provision of funds, goods, or services from any such person.

Section 6 of E.O. 13902 prohibits any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in E.O. 13902, as well as any conspiracy formed to violate such prohibitions.

Section 7(d) of E.O. 13902 defines the term “Iran,” for purposes of the order, to mean the Government of Iran and the territory of Iran and any other territory or marine area, including the exclusive economic zone and continental shelf, over which the Government of Iran claims sovereignty, sovereign rights, or jurisdiction, provided that the Government of Iran exercises partial or total de facto control over the area or derives a benefit from economic activity in the area pursuant to international arrangements.

Section 9 of E.O. 13902 authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA as may be necessary to carry out the purposes of E.O. 13902. Section 9 of E.O. 13902 also provides that the Secretary of the Treasury may redelegate any of these functions within the Department of the Treasury.

Section 11 of E.O. 13902 states that E.O. 13902 shall not apply with respect to any person for conducting or facilitating a transaction for the provision (including any sale) of agricultural commodities, food, medicine, or medical devices to Iran.

Section 12 of E.O. 13902 states that nothing in E.O. 13902 shall prohibit transactions for the conduct of the official business of the United Nations (including its specialized agencies, programmes, funds, and related organizations) by employees, grantees, or contractors thereof.

Current Regulatory Action

In subpart B of the Regulations, OFAC is revising § 560.210 to amend an exemption and incorporate exemptions from sections 11 and 12 of E.O. 13902 as § 560.210 (g) and (h), respectively. OFAC is also revising § 560.211 to implement section 1(a) of E.O. 13902. OFAC is also making conforming amendments to notes 1 and 2 to paragraphs (a) through (c) of § 560.211.

In subpart C of the Regulations, OFAC is revising § 560.303 to incorporate the definition of “Iran” in section 7(d) of E.O. 13902 solely for the purposes of the newly added §§ 560.210(g) and 560.211(c)(1)(iii). For those provisions, the definition of “Iran” includes the Government of Iran.

Public Participation

Because the Regulations involve a foreign affairs function, the provisions of E.O. 12866 of September 30, 1993, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), as amended, 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 E.O. 14192 of January 31, 2025, “Unleashing Prosperity Through Deregulation” (90 FR 6065, February 6, 2025) and E.O. 14219 of February 19, 2025, “Ensuring Lawful Governance and Implementing the President's `Department of Government Efficiency' Deregulatory Initiative” (90 FR 10583, February 25, 2025) 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.

Executive Order 14294

Section 5 of E.O. 14294 of May 9, 2025, “Fighting Overcriminalization in Federal Regulations” (90 FR 20367, May 14, 2025) directs that all future notices of proposed rulemaking (NPRMs) and final rules published in the Federal Register , the violation of which may constitute criminal regulatory offenses, should include a statement identifying ( printed page 61761) that the rule or proposed rule is a criminal regulatory offense and the authorizing statute. E.O. 14294 directs agencies to draft this statement in consultation with the Department of Justice.

E.O. 14294 further directs that the regulatory text of all NPRMs and final rules with criminal consequences published in the Federal Register after May 9, 2025 should explicitly state a mens rea requirement for each element of a criminal regulatory offense, accompanied by citations to the relevant provisions of the authorizing statute.

Willful violations of the regulations set forth in this final rule may be subject to criminal penalties pursuant to 50 U.S.C. 1705 and regulations promulgated thereunder. The statutory authority for criminal liability requires a mens rea of willfulness as an element pursuant to 50 U.S.C. 1705(c). In drafting this statement, OFAC has consulted with the Department of Justice.

Paperwork Reduction Act

The collections of information related to the Regulations 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.

For the reasons set forth in the preamble, OFAC amends 31 CFR part 560 as follows:

91 FR 61759