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F ederal reserve Ba n k DALLAS, TEXAS of Dallas 75222 Circular No. 80-93 May 12, 1980 IRANIAN ASSETS CONTROL REGULATIONS TO ALL BANKS AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: Enclosed are additional amendments effective April 30, 1980 to the Treasury D epartm ent's Iranian Assets Control Regulations. Sincerely yours, Robert H. Boykin First Vice President Enclosure This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) DEPARTMENT OF THE TREASURY Office of Foreign Assets Control 31 CFR Part 535 Iranian Assets Control Regulations AGENCY: Office of Foreign Assets Control, Department of the Treasury. ACTION: Final rule. SU M R : The Office of Foreign Assets Control is amending the Iranian Assets M AY Control Regulations. The purpose of the amendment is to add certain i n t e r pretativ e provisions, licenses and statements of licensing policy, and procedural provisions. The need for the amendment is to c l a r if y the e ffe c t and scope of additional prohibitions added to the Regulations by amendments published on April 9 and 21, 1980. The e ff e c t of the amendment is th a t these additional in te r p r e ta tiv e , policy and procedural provisions will now be available in published form. EFFECTIVE DATE: April 30, 1980. FO FURTHER INFORM R ATION CONTACT: Dennis M O'Connell, Chief Counsel, Office . of Foreign Assets Control, Department of the Treasury, Washington, D.C. 20220, (202) 376-0236. SUPPLEM ENTARY INFORM ATION: Since the Regulations involve a foreign a f f a ir s function, the provisions of the Administrative Procedure Act, 5 U.S.C. 553, requiring notice of proposed rule making, opportunity for public p a rtic ip a tion and delay in effective date are inapplicable. On April 9, 1980, the Office published §§535.206 and 535.207 imposing additional financial and trade sanctions on Iran (45 FR 24432). New §535.429 published today in te rp r e ts the trade prohibition in §535.207(a) (1) as including the exportation of technical data in any form. New §535.430 fu rth er in te rp re ts the prohibition as including the s a le , supply or other tra n s fe r of items, commodities or products for incorporation in foreignmanufactured goods where the U.S. exporter has reasonable cause to believe th at the foreign-manufactured goods are intended for export to Iran. New §535.575 is a general license for the exportation to Iran of newspapers, magazines, journals, new sletters, books, film s, phonograph records, photographs, microfilms, microfiche, tapes and sim ilar m aterial. The general license does not apply to materials which are principally devoted to the dissemination of technical data. New §535.577 is a general license for the exportation to Iran of household goods and personal e ffe c ts of Iranian individuals departing the United States. The general license does not apply to goods in comnercial q u a n titie s. -2 New §535.603 sets forth the procedure to be followed in giving notice to the Office pursuant to §§535.206(b) and 535.207(b) which require notice by the U.S. parent firm 10 days prio r to entry of i t s foreign a f f i l i ate into any transaction covered by S§535.206(a) and 535.207(a). On April 21, 1980, the Office published additional r e s tr ic tio n s with respect to Iran, including prohibitions on remittances to any person in Iran, travel r e s t r i c t i o n s , and a prohibition on imports from Iran and of Iranian-origin goods. (45 FR 26940.) New §535.426 c l a r i f i e s the prohibition on remittances. Remittances to th ird countries are not prohibited unless the rem itter knows or has reasonable cause to believe th a t the remitted funds are being transferred to the country of Iran. The new section also c l a r i f i e s the l i a b i l i t y of remitting banks under §535.206(a)(4). I t makes clear th a t U.S. banks are not responsible for policing the multitude of items processed ele c tro n ic a lly but must not complete transactions where current and actual knowledge pro vides information th a t gives reasonable cause to believe t h a t the remittance is prohibited. New §535.427 c l a r i f i e s th a t the prohibition in 1535.206(a)(4) includes payments of dividends, i n t e r e s t , and other periodic payments. New §535.428 explains th a t acceptance of free sponsorship or support for travel to or travel and maintenance in Iran is a "transaction" or "transfer" prohibited by the travel r e s tr i c ti o n s of §535.209(a). New §535.431 c l a r i f i e s th a t the prohibition on importation of Iranian-origin merchandise does not apply to such merchandise where the b ill of lading is dated on or before April 17, 1980, indicating th at the merchandise l e f t Iran on or before th a t date. New §535.528 authorizes certain transactions by persons subject to the ju r is d ic t io n of the United States in connection with the f i li n g or prosecution of an application fo r, or certain other proceedings involving, an Iranian patent, trademark, or copyright. New §535.550 sets forth the licensing policy on imports of publica tions and sim ilar items from Iran. New §§535.562(c) and 535.578 are general licenses authorizing the importation of passengers' baggage by U.S. c i ti z e n s , dual n atio n als, persons engaged in news gathering operations and certain other persons. The general license in §535.563 for family remittances is being amended by the addition of paragraph (d) placing a monthly lim it of $1000 on such remittances per payee or per household. New §535.576 contains a general license authorizing payment by persons subject to the ju r is d ic t io n of the United States of existing non d o lla r l e t t e r s of c re d it in favor of Iranian e n t i t i e s or persons in Iran where l e t t e r s of c re d it are denominated in foreign currencies. -3 1. §535.426 is added as follows: §535.426 Remittances involving persons in Iran . (a) Remittances to countries other than Iran are not prohibited by §535.206(a)(4) unless the rem itter knows or has reasonable cause to believe th at the funds are being transferred d ire c tly or in d ire c tly to Iran. (b) Subject to the requirement of paragraph (c) of th is section, l i a b i l i t y of a U.S. bank under §535.206(a)(4) in connection with a payment made on the order of a party other than the bank is limited to the following transactions: (1) Payment from an account held by the bank for a person located in Iran; (2) Payment from any other account where the bank has actual and current knowledge of facts th a t give reasonable cause to believe th at the payment is being made in violation of 1535.206(a)(4). (c) U.S. banks are required to disseminate information about the prohibitions contained in §535.206(a)(4) and the provisions of th is section to a l l offices and employees. 2. §535.427 is added as follows: §535.427 Dividends, i n t e r e s t , and other periodic payments to Iran . The prohibition of tra n sfe rs to persons in Iran contained in §535.206( a ) (4) applies to a ll payments and t r a n s f e r s , including payment or tr a n s f e r of dividend checks, i n te r e s t payments and other periodic payments. 3. §535.428 is added as follows: §535.428 Sponsored travel and maintenance of U.S. nationals in Iran . The receip t or acceptance by any person who is a U.S. c itiz e n or U.S. permanent resident alien of any g ra tu ity , grant, or support in the form of meals, lodging, payments of travel or maintenance expenses, or otherwise, in connection with travel to or travel and maintenance within Iran co n stitutes a transaction or tra n s fe r within the meaning of the prohibition se t forth in §535.209(a). 4. §535.429 is added as follows: §535.429 Exportation of technical data prohibited. (a) The prohibition in §535.207(a)(1) includes tra n sfe rs of informa tio n , in eye-readable or machine-readable form, intended for use, d ire c tly or in d ire c tly , in the design, production* manufacture, reconstruction, servicing, operation or use of any product. (b) The prohibition on the exportation of technical data extends not only to unpublished technical information that is not available to the public, but also to published technical data such as operating, rep air or service manuals for automotive or industrial equipment th a t are available through commercial sources such as book d is tr ib u to rs . 5. §535.430 is added as follows: §535.430 U.S. components of foreign-made goods. The prohibitions in §535.207(a)(1) apply to the sa le , supply or other tra n s fe r a f t e r the effective date of §535.207 of items, commodities or products for incorporation in foreign-manufactured goods where the person subject to the ju ris d ic tio n of the United States has reasonable cause to believe th a t those goods are intended for export to Iran. 6. §535.431 is added as follows: §535.431 Goods in t r a n s i t . Shipments of Iranian origin merchandise covered by a b ill of ading dated on or before April 17, 1980 are not within the prohibition in 535.204. 1. §535.528 is added as follows: §535.528 Certain transactions with respect to Iranian p atents, trademarks and copyrights authorized. (a) The following transactions by any person subject to the ju ris d ic tio n of the United States are authorized: (1) The f i li n g and prosecution of any application for an Iranian patent, trademark or copyright, or for the renewal thereof; (2) The receipt of any Iranian patent, trademark or copyright; (3) The f i l i n g and prosecution of opposition or infringement pro ceedings with respect to any Iranian patent, trademark, or copyright, and the prosecution of a defense to any such proceedings; (4) The payment of fees currently due to the government of Iran, eith er d irectly or through an attorney or representative, in connection with any of the transactions authorized by subparagraphs (a) (1), (2), and (3) of this paragraph or for the maintenance of any Iranian patent, trademark or copyright; and (5) The payment of reasonable and customary fees currently due to attorneys or representatives in Iran incurred in connection with any of the transactions authorized by subparagraphs (a) (1), (2), (3) or (4) of th is paragraph. -5 (b) Payments effected pursuant to the terms of paragraph (a)(4) and (5) of th is section may not be made from any blocked account. (c) As used in th is section the term "Iranian patent, trademark, or copyright" shall mean any patent, petty patent, design patent, trademark or copyright issued by Iran. 8. §535.550 is added as follows: §535.550 Publications, film s, e tc . from Ira n . (a) Specific licenses are issued as appropriate for importations of publications, film s, posters, phonograph records, photographs, microfilms, microfiche and tapes originating in Iran. All payments due the suppliers will be required to be made into accounts in domestic banks subject to the provisions of §535.201 or §535.206(a)(4). Such an account shall be estab lished in the name of the s e l l e r and the licensee shall report such informa tion concerning the importation and the account established in the name of the s e l l e r as the Office of Foreign Assets Control may require as a condi tion of the license. (b) Such importations of publications, film s, e tc . are also licensed as appropriate when the Office of Foreign Assets Control is s a t i s fied th a t they are bona fide g i f ts to the importer and th at there is not and has not been any d ire c t or in d ire c t financial or coiranercial benefit to an Iranian e n tity or any person in Iran from the importations. 9. §535.562 is amended by the addition of new paragraph (c) as follows: §535.562 News m a te ria l. * (c) * * * * * Accompanied baggage of j o u r n a lis ts and news correspondents. All transactions incident to the importation into the United States of accompanied baggage of a j o u r n a li s t or other person referred to in paragraph (b) of th is section are authorized provided th a t such baggage does not contain goods in commercial q u a n titie s. 10. §535.563 is amended by the addition of new paragraphs (d) and as follows: (3) §535.563 Family remittances to Iran. * * * * * * (d) Remittances authorized by th is section are limited to $1000 per month to any one payee or to any one household. (e) Any remittance exceeding the amount specified in paragraph (d) of th is section would require a sp ecific license. -6- 11. §535.575 1s added as follows: §535.575 Exports of newspapers, magazines, films, e tc . to Ira n . All transactions not inconsistent with §535.419 and o rdinarily incident to the export to Iran of newspapers, magazines, jo u rn als, new sletters, books, films, phonograph records, photographs, microfilms, microfiche, tapes or sim ilar materials are authorized, except such materials which are principally devoted to the dissemination of techincal data. 12. §535.576 is added as follows: 1535.576 Payment of non-dollar l e t t e r s of c re d it to Iran . Notwithstanding the prohibitions of §535.201 and 535.206(a)(4), payment of ex isting non-dollar l e t t e r s of c re d it in favor of Iranian e n t i t i e s or any person in Iran by any foreign branch or subsidiary of a U.S. firm is authorized, provided th a t the c re d it was opened prior to the respective e ffe c tiv e date. 13. §535.577 is added as follows: §535.577 Household goods and personal e f f e c t s . All transactions incident to the exportation to Iran of household goods and personal e ffe c ts of an Iranian individual departing the United States are authorized, provided th at no goods in commercial quantities may be exported under th is general license. 14. §535.578 is added as follows: §535.578 Passengers' baggage and personal e f f e c t s . (a) All transactions incident to the importation into the United States of baggage, household goods and personal e ffe c ts of the following persons are authorized, provided th a t such importation does not include goods in commercial q u a n titie s: (1) United States c itiz e n s and U.S. resident aliens who departed Iran on or before April 24, 1980; (2) Third country nationals; and (3) Dual nationals of the United States and Iran. (b) All transactions incident to the importation into the United States of baggage, household goods and personal e ffe c ts of an Iranian national who enters the United States on a visa issued by the Department of State are authorized, provided th a t such importation does not include goods in commercial q u a n titie s. -7 (c) All transactions incident to the importation into the United States of baggage and personal e ffe c ts of a crew member of vessels or a i r c r a f t in the United States on temporary sojourn are authorized, provided th a t such importation does not include goods in commercial q u antities and any such a r t i c l e s are intended for export from the United States with the crew member upon his departure. 15. §535.603 is added as follows: 8535.603 Report of Proposed Subsidiary Transaction with Ira n . (a) A U.S. company required by §535.206(b) or §535.207(b) to submit a report to the Office of Foreign Assets Control regarding a proposed transaction with Iran by a subsidiary shall submit a l e t t e r containing the following information. (1) Name of the foreign subsidiary involved (2) Location (3) Description of the merchandise (4) Value (5) Ultimate Iranian consignee (6) Identity of any intermediary firm(s) (7) End-use (8) Payment terms (b) The report shall be addressed as follows Ms. Susan Swinehart Chief of Licensing Office of Foreign Assets Control Treasury Department Washington, D.C. 20220 Att: Section 535.603 Report— EXPEDITE (c) The report must be submitted in s u f f ic ie n t time to reach the Office of Foreign Assets Control 10 days before any subsidiary enters into any transaction covered by §535.206 or §535.207. -8D a te d : A p r i l 3 0 , 1980 (Signed) Stanley L. Sommerfield Stanley L. Sommerfield Director Approved: (.Signed) Richard J . Davis Richard J . Davis Assistant Secretary [Authority: Sec. 201-207, 91 S ta t. 1626, 50 U.S.C. 1701-1706; E.0. 12170, 44 FR 65729, E.O. No. 12205, 45 FR 24099; E.O. No. 12211, 45 FR 26685) Filed: April 30, 1980 Publication date: M 2, 1980 ay