31 C.F.R. Subpart D—Interpretations
Title 31 - Money and Finance: Treasury
Except as otherwise specified, reference to any section of this part or to any regulation, ruling, order, instruction, direction, or license issued pursuant to this part refers to the same as currently amended. Any amendment, modification, or revocation of any section of this part or of any order, regulation, ruling, instruction, or license issued by or under the direction of the Director of the Office of Foreign Assets Control does not, unless otherwise specifically provided, affect any act done or omitted to be done, or any civil or criminal suit or proceeding commenced or pending prior to such amendment, modification, or revocation. All penalties, forfeitures, and liabilities under any such order, regulation, ruling, instruction, or license continue and may be enforced as if such amendment, modification, or revocation had not been made. The prohibitions in §§560.204, 560.206 and 560.208 apply to export, reexport or supply transactions which require a transshipment or transit of goods or technology through Iran to third countries. [64 FR 20172, Apr. 26, 1999]
Title 31: Money and Finance: Treasury
PART 560—IRANIAN TRANSACTIONS REGULATIONS
Subpart D—Interpretations
§ 560.401 Reference to amended sections.
§ 560.402 Effect of amendment.
§ 560.403 Transshipment through Iran.
§ 560.404 [Reserved]
§ 560.405 Transactions incidental to a licensed transaction authorized.
Any transaction ordinarily incident to a licensed transaction and necessary to give effect thereto is also authorized, except:
(a) A transaction by an unlicensed Iranian governmental entity or involving a debit or credit to an Iranian account not explicitly authorized within the terms of the license;
(b) Provision of any transportation services to or from Iran not explicitly authorized in or pursuant to this part other than loading, transporting, and discharging licensed or exempt cargo there.
(c) Distribution or leasing in Iran of any containers or similar goods owned or controlled by United States persons after the performance of transportation services to Iran;
(d) Financing of licensed sales for exportation or reexportation of agricultural commodities or products, medicine or medical equipment to Iran or the Government of Iran (see §560.532); and
(e) Letter of credit services relating to transactions authorized in §560.534. See §560.535(a).
[64 FR 41791, Aug. 2, 1999, as amended at 65 FR 25643, May 3, 2000; 66 FR 36692, July 12, 2001]
§ 560.406 Transshipment or transit through United States prohibited.
(a) The prohibitions in §560.201 apply to the importation into the United States, for transshipment or transit, of Iranian-origin goods or goods owned or controlled by the Government of Iran which are intended or destined for third countries.
(b) The prohibitions in §560.204 apply to the transshipment or transit of foreign goods through the United States which are intended or destined for Iran or the Government of Iran, including entities owned or controlled by the Government of Iran.
[64 FR 20172, Apr. 26, 1999]
§ 560.407 Transactions related to Iranian-origin goods.
(a) Importation into the United States from third countries of goods containing Iranian-origin raw materials or components is not prohibited if those raw materials or components have been incorporated into manufactured products or substantially transformed in a third country by a person other than a United States person.
(b) Transactions relating to Iranian-origin goods that have not been incorporated into manufactured products or substantially transformed in a third country are prohibited.
(c) Transactions relating to goods containing Iranian-origin raw materials or components are not prohibited if those raw materials or components have been incorporated into manufactured products or substantially transformed in a third country by a person other than a United States person.
§ 560.408 Importation into and release from a bonded warehouse or foreign trade zone.
The prohibitions in §560.201 apply to importation into a bonded warehouse or a foreign trade zone of the United States. However, §560.201 does not prohibit the release from a bonded warehouse or a foreign trade zone of Iranian-origin goods imported into a bonded warehouse or a foreign trade zone prior to October 29, 1987.
§ 560.409 [Reserved]
§ 560.410 Exportation, reexportation, sale or supply of services.
(a) The prohibition on the exportation, reexportation, sale or supply of services contained in §560.204 applies to services performed on behalf of a person in Iran or the Government of Iran or where the benefit of such services is otherwise received in Iran, if such services are performed:
(1) In the United States, or
(2) Outside the United States by a United States person, including by an overseas branch of an entity located in the United States.
(b) The benefit of services performed anywhere in the world on behalf of the Government of Iran is presumed to be received in Iran.
(c) Example. A United States person is engaged in a prohibited exportation of services to Iran when it extends credit to a third-country firm specifically to enable that firm to manufacture goods for sale to Iran or for an entity of the Government of Iran. See also §560.416.
[64 FR 20172, Apr. 26, 1999]
§ 560.411 [Reserved]
§ 560.412 Extensions of credit or loans to Iran.
(a) The prohibitions contained in §§560.204 and 560.207 apply to but are not limited to the unauthorized renewal or rescheduling of credits or loans in existence as of May 6, 1995, such as the extension of a standby letter of credit.
(b) The prohibitions contained in §560.209 apply, among other things, to the unauthorized renewal or rescheduling of credits or loans in existence as of March 15, 1995.
(c) The prohibitions contained in §§560.204, 560.207 and 560.209 apply to, among other things, credits or loans in any currency.
[64 FR 20172, Apr. 26, 1999]
§ 560.413 Letter of credit payments by Iranian banks in the United States.
(a) For purposes of the exemption in §560.210(e), payment of letters of credit and other financing agreements according to their terms includes, in the case of payments made by an Iranian bank's branch or agency located in the United States, payments that such branch or agency is:
(1) Legally obligated to make pursuant to the terms of letters of credit and other financing agreements relating to pre-May 7, 1995 trade contracts; or
(2) Licensed to make by the Office of Foreign Assets Control with respect to pre-May 7, 1995 trade contracts.
(b) Payments that are not binding legal obligations of an Iranian bank's branch or agency pursuant to the terms of the letter of credit or other financing agreement are not covered by this exemption.
§ 560.414 Reexportation of certain U.S.-origin goods exported prior to May 7, 1995.
The prohibitions on reexportation in §560.205 do not apply to United States-origin goods or technology that were exported from the United States prior to 12:01 a.m., Eastern Daylight Time, May 7, 1995, if:
(a) Such goods or technology were not the property of a United States person as of 12:01 a.m. Eastern Daylight Time, May 7, 1995; and
(b) The reexportation of the U.S.-origin goods or technology to Iran or the Government of Iran was not subject to reexport (as opposed to export) license application requirements under U.S. regulations in effect prior to May 6, 1995.
Notes to §560.414. 1. The exclusion in this section applies, among other things, to goods that were as of May 6, 1995, classified under the U.S. Department of Commerce's Export Administration Regulations (15 CFR parts 730–774) as ECCNs 2A994; 3A993; 5A992; 5A995; 6A990; 6A994; 7A994; 8A992; 8A994; 9A990; 9A992; and 9A994, that were exported from the United States prior to 12:01 a.m. Eastern Daylight Time, May 7, 1995, and were not the property of a United States person as of 12:01 a.m. Eastern Daylight Time, May 7, 1995. As of April 26, 1999, items covered by this note are classified under ECCNs 2A994; 3A992.a; 5A991.f; 5A992; 6A991; 6A998; 7A994; 8A992.d, .e, .f and .g; 9A990.a and .b; and 9A991.d and .e.
2. A reexportation of U.S.-origin goods or technology which meets the conditions of paragraph (a) of this section, or which is not within the scope of §560.205, nevertheless may require specific authorization by other agencies of the U.S. Government for reexportation to Iran or the Government of Iran. For example, items which meet the conditions of paragraph (a) may nevertheless require an export license under the Enhanced Proliferation Control Initiative provisions of the Export Administration Regulations (15 CFR part 744).
[64 FR 20172, Apr. 26, 1999]
§ 560.416 Brokering services.
(a) For purposes of the prohibitions in §§560.201, 560.204, 560.205, 560.206 and 560.208, the term services includes performing a brokering function.
(b) Examples. A person within the United States, or a United States person, wherever located, may not:
(1) Act as broker for the provision of goods, services or technology, from whatever source, to or from Iran or the Government of Iran;
(2) Act as broker for the purchase or swap of crude oil of Iranian origin or owned or controlled by the Government of Iran;
(3) Act as broker for the provision of financing, a financial guarantee or an extension of credit by any person to Iran or the Government of Iran;
(4) Act as a broker for the provision of financing, a financial guarantee or an extension of credit to any person specifically to enable that person to construct or operate a facility in Iran or owned or controlled by the Government of Iran; or
(5) Act as a broker for the provision of financing, a financial guarantee, or an extension of credit to any person specifically to enable that person to provide goods, services, or technology intended for Iran or the Government of Iran.
[64 FR 20172, Apr. 26, 1999]
§ 560.417 Facilitation; change of policies and procedures; referral of business opportunities offshore.
With respect to §560.208, a prohibited facilitation or approval of a transaction by a foreign person occurs, among other instances, when a United States person:
(a) Alters its operating policies or procedures, or those of a foreign affiliate, to permit a foreign affiliate to accept or perform a specific contract, engagement or transaction involving Iran or the Government of Iran without the approval of the United States person, where such transaction previously required approval by the United States person and such transaction by the foreign affiliate would be prohibited by this part if performed directly by a United States person or from the United States;
(b) Refers to a foreign person purchase orders, requests for bids, or similar business opportunities involving Iran or the Government of Iran to which the United States person could not directly respond as a result of the prohibitions contained in this part; or
(c) Changes the operating policies and procedures of a particular affiliate with the specific purpose of facilitating transactions that would be prohibited by this part if performed by a United States person or from the United States.
[64 FR 20172, Apr. 26, 1999]
§ 560.418 Release of technology or software in the United States or a third country.
The release of technology or software in the United States, or by a United States person wherever located, to any person violates the prohibitions of this part if made with knowledge or reason to know the technology is intended for Iran or the Government of Iran, unless that technology or software meets the definition of information and informational materials in §560.315. See §560.511.
Notes to §560.418. 1. The U.S. Department of Commerce's Bureau of Export Administration requires a license for the release in the United States (or in a third country) to a foreign national of technology if both of the following conditions are met:
(a) That technology would require a license for exportation (or reexportation) to the home country of the foreign national; and
(b) The foreign national is not a citizen or permanent resident of the United States (or of the third country) or is not a protected individual under the Immigration and Naturalization Act (8 U.S.C. §1324(b)(a)(3)). See 15 CFR 734.2(b)(2)(ii) and 734.2(b)(5).
2. The transfer to a foreign national of technology subject to regulations administered by the U.S. Department of State or other agencies of the U.S. Government may require authorization by those agencies.
[64 FR 20173, Apr. 26, 1999]
§ 560.419 U.S. employment of persons normally located in Iran.
The prohibitions in §560.201 make it unlawful to hire an Iranian national normally located in Iran to come to the United States solely or for the principal purpose of engaging in employment on behalf of an entity in Iran or as the employee of a U.S. person, unless that employment is authorized pursuant to a visa issued by the U.S. State Department or by §560.505. See also §560.418 with respect to the release of technology and software.
[64 FR 20173, Apr. 26, 1999]
§ 560.420 Reexportation by non-U.S. persons of certain foreign-made products containing U.S.-origin goods or technology.
For purposes of satisfying the de minimis content rule in §560.205(b)(2):
(a) U.S.-origin goods (excluding software) falling within the definition in §560.205 must comprise less than 10 percent of the foreign-made good (excluding software);
(b) U.S.-origin software falling within the definition in §560.205 must comprise less than 10 percent of the foreign-made software;
(c) U.S.-origin technology falling within the definition in §560.205 must comprise less than 10 percent of the foreign-made technology; and,
(d) In cases involving a complex product made of a combination of U.S.-origin goods (including software) and technology falling within the definition in §560.205, the aggregate value of all such U.S.-origin goods (including software) and such technology contained in the foreign-made product must be less than 10 percent of the total value of the foreign-made product.
Notes to §560.420. 1. Notwithstanding the exceptions contained in §560.205(b)(1) and (b)(2) and this section, a reexportation to Iran or the Government of Iran of U.S.-origin items falling within the definition in §560.205 is prohibited if those U.S.-origin goods (including software) or that technology have been substantially transformed or incorporated into a foreign-made end product which is destined to end uses or end users prohibited under regulations administered by other U.S. Government agencies. See, e.g., the Export Administration Regulations (31 CFR 736.2(b)(5), 744.2, 744.3, 744.4, 744.7, and 744.10); International Traffic in Arms Regulations (22 CFR 123.9).
2. A reexportation not prohibited by §560.205 may nevertheless require authorization by the U.S. Department of Commerce, the U.S. Department of State or other agencies of the U.S. Government.
3. The provisions of §560.205 and this section apply only to persons other than United States persons.
[64 FR 20173, Apr. 26, 1999]
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