Full text of District Notices (Federal Reserve Bank of Dallas) : Department of the Treasury Iranian Assets Control Regulations, Circular No. 79-185

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f e d e r a l

R

e s e r v e

B

a n k

DALLAS. T E X A S

o f

D

a lla s

75222

C i r c u l a r No. 79-185
N o v e m b er 19, 1979

DEPARTMENT OF THE TREASURY IRANIAN ASSETS CONTROL REGULATIONS
TO ALL BANKS
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
Enclosed is a T r e a s u r y Department announcem ent providing the
text of amendments to the regulations p ertain in g to Iranian a s se ts control.
T h e effective date for the amendments is November 14, 1979.
fu rth e r information, contact:

For

Mr. Dennis M. O'Connell
Acting Chief Counsel
Office of Foreign A ssets Control
Department of the T r e a s u ry
Washington, D. C. 20220
Sincerely y o u r s ,
Robert H . Boykin
F irs t Vice P resident
Enclosure

B a n k s a n d o th e rs are e n c o u ra g e d to use th e fo llo w in g in c o m in g W A TS n u m b e rs in c o n ta c tin g th is Bank:
1-800-442-7140 (in tra s ta te ) and 1-800-527-9200 (in te rs ta te ). F or c a lls p la c e d lo c a lly , p le a s e use 651 p lu s th e
e x te n s io n re fe rre d to above.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

Title

31 - M O N E Y A N D FINANCE:

Chapter

V

- Foreign

Department
Part

535

AGENCY:

Office

ACTION:

Final

SUMMARY:

The

of

Iranian

new

sections

The

purpose

the
any

person

Assets

of

to

the

Department

other

amendments

is
of

provided

United States.

of

by
The

solely

are

of

the amendments

is

for

funds

to

by

bank,

to

Iran

effective

where

date

by.

certain

types

clothing,

medical

supplies,

in
to

transit,

and

a blocked

funds

of

without

a

licensed

is

banks

payment

to p e r s o n s

amendments

of

within
that

license.
by

personal

account,

U. S.

to

purposes

entities

exports

of

535.y 0 4 ,

of

debit

the

of

licenses

a domestic

goods

for

addition

general

transfer

the

amending

and

shipments

prohibited
that

the

is

535.903

add

non-blocked

need

blocked assets

in

food,

no

Iranian

in

to
the

(3)

as

is

by

exportations

certain

there

persons

is

after

Commerce,

transfer

obligations owed

to

such

Control

535.533,

(1)

licensed

materials,

Assets

account

incident

property,

U. S.

Regulations

Control

Regulations

535.508,

a blocked

exportation

and (4) the

Treasury
Control

Assets

authorizing

the

educational

Assets

Foreign

Control

the

transactions

or

of

535.320,

(2)

baggage,

Foreign

the

Control

Rule

Regulations

blocked

Iranian

Office

the

of

-

of

Assets

Treasury

the

the

transactions
The

effect

Department

- 2 of

Commerce

types

of

assets

blocked

into

transfers
other
owed

for

Iranian

domestic

effective

property,

by,

purposes

include

in

of

or

or

to

payment

are

U.S.

of

certain

of

banks,

blocked

and

banks

and

obligations

authorized.

a definition

of

transfer

domestic

through

nationals,

also

date,exports

payment

accounts

payments

persons
by

the

blocked

of

regulations

for

The

the

term

bank.

EFFECTIVE
FOR

after

DATE:

FURTHER

November

INFORMATION

1 4,

1979

CONTACT:

D e n n i s M. O ' C o n n e l l
Acting Chief Counsel
O f f i c e of F o r e i g n A s s e t s Control
D e p a r t m e n t of the T r e a s u r y
W a s h i n g t o n , D.C.
20220

( 202)

376- 0236

SUPPLEMENTARY
a

foreign

trative

affairs

a

delay

Iranian

by t he a d d i t i o n
535, 904.

in

the

the

the

Control

§ 5535. 320,

regulations

provisions

553,

opportunity

effective

Assets
of

Since

5 U.S.C.

Act,

rulemaking,

and

The

and

function,

Procedure

proposed
pation

INFORMATION:

date

of

the

requiring

involve
Adminis­

notice

for

public

are

of

inapplicable.

Regulations

535. 508,

are

535. 533,

partici­

amended

535. 903,

S53S.320
The
within
a

the

national

company
or

of

under

to

of

a

States

the

or

or

of

any

under

banker
laws

the
or

the

to

may

authorize

for

a

"domestic
the

purpose

branch

following

laws
of

any
of
the

supervision

United

States
States.

any

bank"
of

any

country:

United

of

as

the

district

district
also

the

mean

banking

subject
of

of

foreign

territory,

banking

treated

definition

or

b a n k ” shall

designated

state,

Treasury
be

"domestic

United

bank

territory
the

term

incorporated

any

private

Domestic b a n k .

other
for

any

or

which
bank

the

any

all

or

not
trust
States

States,

or

any

state,

Secretary

banking

the

is

examination

of

The

office

United

United
and

or

or

purpose

of

institution
of

sections

this
of

this

part.

5535.508

Payments

(a)
any

Any

payment
firm

bank

the

in

be

made

or

from

Iran

branch
of

or

any

an

h ny p a y m e n t

entity

a name

who

transfer;

of

an

of

payment

other

hereby

shall

transfer

to

of

any

Iran

beneficiary

exchange

limitation,

This
of

any

expressed

of

(d)

section

credit

which

issuance

or

of

country

blocked
or

not
transfer

the
or

interest
person.

account

Iranian

such

of

the

payment

transaction
transfer

in

such

a

be

further

This

or

does

terms

of

not

comorisinq

cannot
a

proceeds

account

is

or

of

of

including,
credit,

the

or

but
payment

currency

of

payment

any

or

country.

transfer
action

a domestic

in

authorize:

that

ultimate

controlled

transfer

a

any

transfer

than

foreign

obligation,

(c)

from

the

Any

way

foreign

the

is

not

or

entity

such

indirectly,

or

other

if

to

including

account

or

banks

or

(2)
by

account

does

domestic

credit,

Iranian

payment

section

in

U.S.-owned

any

entity

This

in

or

Iranian

(1)

not

or

any

of

a blocked

to

blocked

(b)

held

by

such

directly

accounts

transfer

Iran

provided

represents,
of

or

transfer

name

authorized,

blocked

payment

or

foreign

to

any

integral
without

part

the

of

a

trans­

subsequent

license.
does

sale

sub-account

securities

an

effected

section
the

authorize

to

of

not

authorize

securities

thereof,
a blocked

or

the

held

the

account

crediting

in

income
or

a blocked
derived

sub-account

of

§535.533

Transactions

(a)

All

incident

to

from

United

are

the

hereby

license
tive
Act
App.

1979,

by

or

the

the

as

wares

or

person

any

the

Iran
ordinarily

and

merchandise

within

following

Iran

terms

and

with:
is

authorized

Department

of

(sec.

of
4,

pursuant

Commerce

the
93

after

Export

Stat.

to

a validated
the

effec­

Administration

503,

50

U.S.C.

and

issuing,

accepting

or

paying

payments

making

any

other
with

engaging

in

satisfy

institutions

confirming

for

shall

to

transactions

goods,

provided

amended

selves

or

of

provisions

Banking

connection

exportations

all

Iran

exportation

(2)
to

to

complied

under

2 4 01);

prior

States

issued

of

and

exportation

are
The

date

exports

authorized,

conditions
(1)

the

involving

drafts

made,

payment
any

any

or

other

bo:ia

fide

exportation
of

exportation

sums

of

of

reimbursing
of

of

pursuant

transaction

such

and

transfers

United

credit,

and

is
is

business,

thertior

credit,

in

to

section,

herein

this

authorized,

reasonably

involved

in

incident

to

a

customary

in

the

and

that

the value

corresponds

financing

States,

credit,

that:

such

action;

letters

the

letters

or

transaction

Each

money

drawn,

exportation

themselves

course

advising

under

(i)

normal

or

within

such

with

of
the

trans­

under
or

any

name

or

designation

designation

of

the

account

in w h i c h

(e)

This

transfer

from

differs

from

blocked

account
is

(f)
the

by

and

a

were

account

authorize
in

from

any

or

name

sub­

p a y m e n t or

a domestic

name

the

held.

or

designation

sub-account

an

that

a

bank

to

designation
of

the

from which

that

providing

to

the

a

which

specified

the

in w h o s e

paragraph

name

the

or

transfer

Office

of

Foreign

payment
under

name

from

(*)

payment

the

account
the

in

notification

authorized

blocked

entity

or

any

authorization

transferer

confirming
in

or

not

account

under

name

blocked

securities
does

differs

payment

or

made.

condition

the

held

the

The

receiving

such

a blocked

account

transfer

specific

section

blocked

which

and

the

or
the

transfer

has

regulations

address

account

is

of

Iran

held.

is

subject

domestic
is

to

bank

furnished

Assets

Control

been

deposited

in

this

or

the

part
Iranian

5535.903
blocked

Authorization
property

All
to

to

of

the

Medicines,

b.

Agricultural

c.

ordinarily

following

a.

seeds,

types

medical

netting,

textile

d.

Educational

e.

Foreign-oriqin

f.

Crew

may

be

made

of

funds

U.

S.

of

payments

banking

authorized.
transferred

debit
the

U.

Funds
or

blocked

to

the

of

export

property:

medical

pesticides;

than

equipment;
and

equipment;

fish;

military),

blankets,

mosquito

products;

ship

stores,

provided

that

no

to

any

blocked

effective

S.

transiting

aircraft,

institution

of

of

commodities

authorized,

after

types

materials;

baggage,

by

certain

incident

supplies,

fertilizer,
(other

hereby

of

c o m m o d i t i e s , products,

Clothing

are

exports

Iran

transactions

Iran

of

or

persons

are

received

not

date
other
for

such

blocked

pursuant

U.

to

by

through
S.

or

this

stores;

transfer
to

for

exportation
of

S.;

therefor

The

person

virtue

U.

plane

payment

account.

by,

the

any
purposes

is

being

section.

(ii)
the
(b)
any

such
terms

exportation
and

This

conditions

section

transaction

is

from

does
any

made
of
not

pursuant

this

all

section.

authorize

blocked

to

account.

the

financing

S535.904

Payment by Iranian Entities of Obligations

to persons within the United States
The transfer of funds after the effective date
by, through or to any U. S. banking institution or other
perso n within the United States solely for purposes of payment
of obligations by Iranian entities owed to persons within
the United States is authorized, provided that there is
no debit to a blocked account.

Property is not blocked

by virtue of being transferred or received pursuant to
this section.

Dated:

Richard J."Davis
Assistant Secretary

Title 31 - MONEY AND FINANCE:

Treasury

Chapter V - Foreign Assets Control
Department of the Treasury
Part 535 - Iranian Assets Control Regulations
AGENCY:

Office of Foreign Assets Control

ACTION:

Final Rule

SUMMARY:

The Office of Foreign Assets Control is amending the Iranian

Assets Control Regulations by the addition of new section 535.902.

The

purpose of the amendment is to license U. S.-owned or controlled foreign
firms such as overseas branches or subsidiaries of domestic banks, to
set-off their claims against blocked accounts held by them for Iran or
Iranian entities.

The need for the amendment is that section 535.201

of the Regulations prohibits any debit to a blocked account, including
set-offs.

The effect of the amendment is that U. S .-owned or controlled

firms abroad are licensed to set-off their claims against Iran or Iranian
entities b y debiting blocked accounts held by them for Iran or Iranian
entities.
SUPPLEMENTARY INFORMATION:

Since the regulations involve a foreign

affairs function, the provisions of the Administrative Procedure Act,
5 U.S.C. 553, requiring notice of proposed rulemaking, the opportunity
for public participation and a delay in effective date are inapplicable.
EFFECTIVE DATE:

November 14, 1979

-2-

FOR FURTHER INFORMATION CONTACT:

l

Dennis M. O'Connell
Acting Chief Counsel
Office of Foreign Assets Control
Department of the Treasury
Washington, D. C. 20220
(202) 376-0236

The Iranian Assets Control Regulations are amended by the addition
of §535.902 as follows:
§535.902

Sets-Offs by U. S. Owned or Controlled Firms Abroad

Branches and subsidiaries in foreign countries of persons subject
to the jurisdiction of the United States are licensed to set-off their
claims against Iran or Iranian entities by debit to blocked accounts
held by them for Iran or Iranian entities.

Dated:

November 14, 1979

fs/ Stanley L. Sommerfield
Stanley Sommerfield
Director

Approved:

/s/ Richard J. Davis
Richard J. Davis
Assistant Secretary

t