Rule2024-10721
Iranian Transactions and Sanctions Regulations
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 17, 2024
Effective
May 17, 2024
Issuing agencies
Treasury DepartmentForeign Assets Control Office
Abstract
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is adopting a final rule amending the Iranian Transactions and Sanctions Regulations (ITSR) to incorporate a general license that was previously published on OFAC's website. In particular, the rule incorporates, with amendments, a general license relating to the export, reexport, and provision of certain services, software, and hardware incident to communications over the internet. This amendment also makes additional conforming changes.
Full Text
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<title>Federal Register, Volume 89 Issue 97 (Friday, May 17, 2024)</title>
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[Federal Register Volume 89, Number 97 (Friday, May 17, 2024)]
[Rules and Regulations]
[Pages 43311-43314]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-10721]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 560
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 adopting a final rule amending the Iranian
Transactions and Sanctions Regulations (ITSR) to incorporate a general
license that was previously published on OFAC's website. In particular,
the rule incorporates, with amendments, a general license relating to
the export, reexport, and provision of certain services, software, and
hardware incident to communications over the internet. This amendment
also makes additional conforming changes.
DATES: This rule is effective May 17, 2024.
FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for
Licensing, 202-622-2480; Assistant Director for Regulatory Affairs,
202-622-4855; or Assistant Director for Sanctions Compliance &
Evaluation, 202-622-2490.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document and additional information concerning OFAC are
available on OFAC's website <a href="https://ofac.treasury.gov">https://ofac.treasury.gov</a>.
Background
On October 22, 2012, OFAC issued a final rule that amended the
former Iranian Transactions Regulations, 31 CFR part 560 (ITR), and
reissued them in their entirety as the Iranian Transactions and
Sanctions Regulations (ITSR or ``the Regulations'') (77 FR 64664,
October 22, 2012). Since then, OFAC has amended the Regulations on
several occasions. As set forth in more detail below, OFAC is now
amending the Regulations to incorporate, with certain amendments, a
general license that previously was published on OFAC's website and to
make additional conforming changes.
Services, Software, and Hardware Incident to Personal
Communications. On March 10, 2010, in order to foster and support the
free flow of information to individual Iranian citizens, OFAC issued a
final rule amending the ITR to add a general license in Sec. 560.540
authorizing the exportation of certain services and software incident
to the exchange of personal communications over the internet, provided
that, among other things, such services and software were publicly
available at no cost to the user (75 FR 10997, March 10, 2010). The
authorization under Sec. 560.540 was preserved in the ITSR, as
reissued in October 2012 (77 FR 64664).
On May 30, 2013, OFAC, in consultation with the Departments of
State and Commerce, issued General License (GL) D under the
Regulations. GL D was made available on OFAC's website and the Federal
Register (78 FR 43278, July 19, 2013). GL D authorized the exportation
or reexportation, directly or indirectly, from the United States or by
U.S. persons, wherever located, to persons in Iran of additional
services, software, and hardware incident to personal communications,
including fee-based versions of the software and services authorized in
Sec. 560.540, subject to certain conditions. GL D also contained an
Annex that listed items authorized for export or reexport to Iran that
had been determined to be incident to personal communications.
On February 7, 2014, OFAC issued GL D-1, which replaced and
superseded GL D in its entirety. GL D-1 was made available on OFAC's
website and the Federal Register (79 FR 13736, March 11, 2014). GL D-1
clarified certain aspects of GL D and added new authorizations relating
to the provision to Iran and importation from Iran of certain hardware,
software, and services incident to personal communications. GL D-1 also
updated the Annex from GL D with minor technical amendments. On
September 23, 2022, OFAC issued GL D-2, which replaced and superseded
GL D-1 in its entirety. GL D-2 was made available on OFAC's website and
in the Federal Register (87 FR 62003, October 13, 2022). GL D-2 updated
and clarified GL D-1 by, among other things: removing the ``personal''
qualifier from the authorization for software and services incident to
``personal communication''; providing additional examples of modern
types of software and services that are incident to the exchange of
communications, including social media platforms, collaboration
platforms, video conferencing, e-gaming, e-learning platforms,
automated translation, web maps, and user authentication services;
explicitly authorizing cloud-based services and software in support of
the foregoing software or services or of any other transaction that is
authorized pursuant to the Regulations; clarifying the restrictions on
the exportation of web-hosting services or domain name registration
services; and expanding the specific licensing policy set forth in GL
D-1. GL D-2 maintained the Annex as updated by GL D-1.
OFAC, in consultation with the Departments of State and Commerce,
is now amending the Regulations to incorporate the provisions of GL D-2
and certain additional amendments into the existing authorization at
Sec. 560.540. First, OFAC is amending Sec. 560.540(a) to incorporate
paragraphs (a)(1) and (2) of GL D-2, which authorize the exportation or
reexportation to Iran of certain no-cost or fee-based services and
software that are incident to, and software that enables services
incident to, the exchange of communications over the internet, as well
as cloud-based services in support of the foregoing services or of any
other transactions authorized or exempt under the Regulations, subject
to certain conditions. New Sec. 560.540(a)(3) incorporates paragraph
(a)(3) of GL D-2, which authorizes the exportation, reexportation, or
provision of certain software, hardware, and related services not
authorized by Sec. 560.540(a)(1) or (2). OFAC is also publishing in
the Federal Register a list of the services, software, and hardware
authorized by new Sec. 560.540(a)(3) (the ``List of Services,
Software, and Hardware Incident to Communications under 31 CFR
560.540''), which includes the items previously listed in the Annex to
GL D-2. However, concurrent with this rule, OFAC is publishing an
update, effective 30 days after publication of this rule, that would
amend the ``List of Services, Software, and Hardware Incident to
Communications under 31 CFR 560.540'' to limit the computing power of
laptops, tablets, and personal computing devices that are authorized
for exportation or reexportation to Iran under category (5) of ``List
of Services, Software, and Hardware Incident to Communications under 31
CFR 560.540'', in order to address concerns about the use of multiple,
connected computing devices with increased computing powers to create
high-powered computers. The updated ``List of Services, Software, and
Hardware Incident to Communications under 31 CFR 560.540'' is being
published separately in the Federal Register. New Sec. 560.540(a)(4)
through (6) incorporate
[[Page 43312]]
paragraphs (a)(4) through (6) of GL D-2, which authorize: the
exportation or reexportation of certain internet connectivity services
and the provision, sale, or lease of telecommunications facilities
incident to communications; the importation into the United States or a
third country of hardware and software previously exported to Iran; and
the exportation and reexportation of certain publicly available, no-
cost services and software to the Government of Iran, respectively.
OFAC is also expanding Sec. 560.540 in two ways to address repair
and replacement issues with respect to items exported pursuant to the
ITSR. First, OFAC is revising the authorization at paragraph (a)(5) of
GL D-2 and incorporating the revised text into Sec. 560.540(a)(5), to
authorize transactions for the importation of hardware or software into
third countries, in addition to the United States, provided that the
items were previously exported to Iran pursuant to an authorization
issued pursuant to the ITSR. Second, OFAC is adding a new Sec.
560.540(a)(7) to authorize the exportation or reexportation, of certain
services conducted outside Iran to install, repair, or replace hardware
or software authorized for exportation, reexportation, or provision to
Iran by paragraph (a)(2) or (3) of that section. The new Sec.
560.540(a)(7) authorizes such services only when the service provider
is located outside Iran and does not authorize the service providers to
engage in such services while in Iran.
This final rule also revises Sec. 560.540(b) to incorporate
paragraph (b) of GL D-2, which includes restrictions on transactions
authorized by Sec. 560.540(a), with slight revisions. Section
560.540(b)(3) refines and clarifies the restrictions of paragraph
(b)(4) of GL D-2 related to the provision of web-hosting services or of
domain name registration services in Iran. Specifically, newly revised
Sec. 560.540(b)(3) excludes from authorization the exportation or
reexportation of web-hosting services for websites of commercial
entities located in Iran or of domain name registration services for or
on behalf of the Government of Iran or another person whose property
and interests in property are blocked pursuant to Sec. 560.211.
OFAC is revising Sec. 560.540(c) to incorporate paragraph (c) of
GL D-2 into Sec. 560.540(c)(1), which provides that U.S. depository
institutions and U.S. registered brokers or dealers in securities may
process transfers of funds in furtherance of an underlying transaction
authorized by Sec. 560.540(a), provided the transfer does not involve
debiting or crediting an Iranian account. U.S. depository institutions
and U.S. registered brokers or dealers in securities may also continue
to process transfers of funds that are ordinarily incident and
necessary to authorized transactions pursuant to Sec. 560.516.
OFAC is also adding a new Sec. 560.540(d) to incorporate the
specific licensing policy set forth in paragraph (d) of GL D-2, which
expands upon the specific licensing policy previously set forth in
Sec. 560.540(c). The new Sec. 560.540(d) sets forth a case-by-case
licensing policy for additional activities that support internet
freedom in Iran. OFAC is not incorporating certain notes and a
provision in GL D-2 that are duplicative of prohibitions that continue
to apply independently from the Regulations and therefore are
unnecessary to include. Finally, OFAC is adding an explanatory note
referring to this general license in Sec. Sec. 560.418, 560.508, and
560.519. Upon publication of this final rule, OFAC will archive GL D-2
on its website. GLs D, D-1, and D-2 will continue to be available in
the Federal Register: GL D was published in the Federal Register on
July 19, 2013 (78 FR 43278, July 19, 2013); GL D-1 was published in the
Federal Register on March 11, 2014 (79 FR 13736, March 11, 2014); and
GL D-2 was published in the Federal Register on October 13, 2022 (87 FR
62003, October 13, 2022).
Public Participation
Because the Regulations involve a foreign affairs function, the
provisions of Executive Order (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 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 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.
List of Subjects in 31 CFR Part 560
Administrative practice and procedure, Banks, banking, Blocking of
assets, Communications, Credit, Foreign trade, Iran, Nonprofit
organizations, Penalties, Reporting and recordkeeping requirements,
Sanctions, Securities, Services.
For the reasons set forth in the preamble, OFAC amends 31 CFR part
560 as follows:
PART 560--IRANIAN TRANSACTIONS AND SANCTIONS REGULATIONS
0
1. The authority citation for part 560 continues to read as follows:
Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C.
2349aa-9, 7201-7211, 8501-8551, 8701-8795; 31 U.S.C. 321(b); 50
U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890, as
amended (28 U.S.C. 2461 note); 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, 3 CFR, 2018 Comp., p.
854.
Subpart D--Interpretations
0
2. Amend Sec. 560.418 by adding note 3 to the section to read as
follows:
Sec. 560.418 Release of technology or software in the United States
or a third country.
* * * * *
Note 3 to Sec. 560.418: See Sec. 560.540 for a general license
authorizing the exportation, reexportation, or provision to Iran of
certain services, software, and hardware incident to the exchange of
communications.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
0
3. Amend Sec. 560.508 by adding note 1 to paragraph (a) to read as
follows:
Sec. 560.508 Telecommunications and mail transactions authorized.
(a) * * *
Note 1 to paragraph (a): See Sec. 560.540 for a general license
authorizing the exportation, reexportation, or provision to Iran of
certain services, software, and hardware incident to the exchange of
communications.
* * * * *
0
4. Amend Sec. 560.519 by revising the headings of the note to
paragraph (c)(1) and the note to the section and adding note 3 to the
section to read as follows:
Sec. 560.519 Journalistic activities and establishment of news
bureaus in Iran.
* * * * *
[[Page 43313]]
Note 1 to paragraph (c)(1): * * *
* * * * *
Note 2 to Sec. 560.519: * * *
Note 3 to Sec. 560.519: See Sec. 560.540 for a general license
authorizing the exportation, reexportation, or provision to Iran of
certain services, software, and hardware incident to the exchange of
communications.
0
5. Revise Sec. 560.540 to read as follows:
Sec. 560.540 Certain services, software, and hardware incident to
communications.
(a) To the extent that such transactions are not exempt from the
prohibitions of this part, and subject to the restrictions set forth in
paragraph (b) of this section, the following transactions are
authorized:
(1) Services. The exportation or reexportation, directly or
indirectly, from the United States or by a U.S. person, wherever
located, to Iran of services incident to the exchange of communications
over the internet, such as instant messaging, chat and email, social
networking, sharing of photos and movies, web browsing, blogging,
social media platforms, collaboration platforms, video conferencing, e-
gaming, e-learning platforms, automated translation, web maps, and user
authentication services, as well as cloud-based services in support of
the foregoing or of any other transaction authorized or exempt under
this part.
(2) Software--(i) Software subject to or excluded from the EAR. The
exportation, reexportation, or provision, directly or indirectly, to
Iran of software subject to the Export Administration Regulations, 15
CFR parts 730 through 774 (EAR), pursuant to 15 CFR 734.3(a), that is
incident to, or enables services incident to, the exchange of
communications over the internet, such as instant messaging, chat and
email, social networking, sharing of photos and movies, web browsing,
blogging, social media platforms, collaboration platforms, video
conferencing, e-gaming, e-learning platforms, automated translation,
web maps, and user authentication services, as well as cloud-based
services in support of the foregoing or of any other transaction
authorized or exempt under this part, provided that such software is
designated EAR99, excluded from the EAR because it is described under
15 CFR 734.3(b)(3), or classified by the U.S. Department of Commerce on
the Commerce Control List, 15 CFR part 774, supplement No. 1 (CCL),
under export control classification number (ECCN) 5D992.c.
(ii) Software that is not subject to the EAR because it is of
foreign origin and is located outside the United States. The
exportation, reexportation, or provision, directly or indirectly, by a
U.S. person, wherever located, to Iran of software that is not subject
to the EAR because it is of foreign origin and is located outside the
United States, that is incident to, or enables services incident to,
the exchange of communications over the internet, such as instant
messaging, chat and email, social networking, sharing of photos and
movies, web browsing, blogging, social media platforms, collaboration
platforms, video conferencing, e-gaming, e-learning platforms,
automated translation, web maps, and user authentication services, as
well as cloud-based services in support of the foregoing or of any
other transaction authorized or exempt under this part, provided that
such software would be designated EAR99 if it were located in the
United States or would meet the criteria for classification under ECCN
5D992.c if it were subject to the EAR.
(3) Additional software, hardware, and related services. To the
extent not authorized by paragraph (a)(1) or (2) of this section, the
exportation, reexportation, or provision, directly or indirectly, to
Iran of certain software and hardware incident to communications, as
well as related services, as follows:
(i) In the case of hardware and software subject to the EAR, the
items specified in the ``List of Services, Software, and Hardware
Incident to Communications under 31 CFR 560.540'', which is maintained
on OFAC's website (<a href="https://ofac.treasury.gov">https://ofac.treasury.gov</a>) on the Iran Sanctions
page;
(ii) In the case of hardware and software that is not subject to
the EAR because it is of foreign origin and is located outside the
United States that is exported, reexported, or provided, directly or
indirectly, by a U.S. person, wherever located, hardware and software
that is of a type described in the ``List of Services, Software, and
Hardware Incident to Communications under 31 CFR 560.540'', provided
that the item would be designated EAR99 if it were located in the
United States or would meet the criteria for classification under the
relevant ECCN specified in the ``List of Services, Software, and
Hardware Incident to Communications under 31 CFR 560.540'' if it were
subject to the EAR; and
(iii) In the case of software not subject to the EAR because it is
described in 15 CFR 734.3(b)(3) that is exported, reexported, or
provided, directly or indirectly, from the United States or by a U.S.
person, wherever located, software that is of a type described in the
``List of Services, Software, and Hardware Incident to Communications
under 31 CFR 560.540''.
Note 1 to paragraphs (a)(2) and (3): The authorizations in
paragraphs (a)(2) and (3) of this section include the exportation,
reexportation, or provision, directly or indirectly, to Iran of
authorized hardware and software by an individual leaving the United
States for Iran.
(4) Internet connectivity services and telecommunications capacity.
The exportation or reexportation, directly or indirectly, from the
United States or by a U.S. person, wherever located, to Iran of non-
commercial-grade internet connectivity services, to include cloud-based
services, and the provision, sale, or leasing of capacity on
telecommunications transmission facilities (such as satellite or
terrestrial network connectivity) incident to communications.
Note 2 to paragraph (a)(4): See Sec. 560.508 for authorizations
relating to transactions with respect to the receipt and
transmission of telecommunications involving Iran.
(5) Importation into the United States or a third country of
hardware and software previously exported to Iran. The importation into
the United States or a third country of hardware and software
authorized for exportation, reexportation, or provision to Iran under
paragraph (a)(2) or (3) of this section, provided that the hardware or
software was previously exported, reexported, or provided to Iran under
an authorization issued pursuant to this part.
Note 3 to paragraph (a)(5): See Sec. 560.306 for definitions of
the terms goods of Iranian origin and Iranian-origin goods, which do
not include goods that have been previously exported or reexported
to Iran under an authorization issued pursuant to this part and
which have subsequently been exported from and are located outside
of Iran.
(6) Publicly available, no cost services and software to the
Government of Iran--(i) Services. The exportation or reexportation,
directly or indirectly, from the United States or by a U.S. person,
wherever located, to the Government of Iran, as defined in Sec.
560.304, of services described in paragraph (a)(1) of this section or
categories (6) through (11) of the ``List of Services, Software, and
Hardware Incident to Communications under 31 CFR 560.540'', provided
that such services are publicly available at no cost to the user.
(ii) Software. The exportation, reexportation, or provision,
directly or indirectly, to the Government of Iran of software described
in paragraph (a)(2) or (3) of this section or categories (6) through
(11) of the ``List of Services,
[[Page 43314]]
Software, and Hardware Incident to Communications under 31 CFR
560.540'', provided that such software is publicly available at no cost
to the user.
(7) Services conducted outside Iran to install, repair, or replace.
The exportation or reexportation, directly or indirectly, from the
United States or by a U.S. person, wherever located, to Iran of
services conducted outside Iran to install, repair, or replace hardware
or software authorized for exportation, reexportation, or provision to
Iran pursuant to paragraph (a)(2) or (3) of this section.
Note 4 to paragraph (a): In paragraph (a)(6) of this section,
the term ``publicly available'' refers generally to software that is
widely available to the public. Paragraph (a)(3)(iii) of this
section refers to software that is described in 15 CFR 734.3(b)(3),
which defines ``publicly available'' software for purposes of the
EAR. The scope of the term ``publicly available'' in paragraph
(a)(6) of this section thus differs from the scope of the Department
of Commerce's regulation at 15 CFR 734.3(b)(3) as referenced in
paragraph (a)(3)(iii) of this section.
(b) This section does not authorize:
(1) The exportation, reexportation, or provision, directly or
indirectly, of the services, software, or hardware specified in
paragraph (a) of this section with knowledge or reason to know that
such services, software, or hardware are intended for the Government of
Iran, except for services or software specified in paragraph (a)(6) of
this section, or for any person blocked pursuant to this part other
than the Government of Iran.
(2) The exportation or reexportation, directly or indirectly, of
commercial-grade internet connectivity services or telecommunications
transmission facilities (such as dedicated satellite links or dedicated
lines that include quality of service guarantees).
(3) The exportation or reexportation, directly or indirectly, of
web-hosting services that are for websites of commercial entities
located in Iran or of domain name registration services for or on
behalf of the Government of Iran, as defined in Sec. 560.304, or any
other person whose property and interests in property are blocked
pursuant to Sec. 560.211.
(4) Any transaction by a U.S.-owned or -controlled foreign entity
otherwise prohibited by Sec. 560.215 if the transaction would be
prohibited by any other part of chapter V if engaged in by a U.S.
person or in the United States.
(5) Any action or activity involving any item (including
information) subject to the EAR that is prohibited by, or otherwise
requires a license under, part 744 of the EAR or participation in any
transaction involving a person whose export privileges have been denied
pursuant to part 764 or 766 of the EAR, without authorization from the
Department of Commerce.
(c) Transfers of funds from Iran or for or on behalf of a person in
Iran in furtherance of an underlying transaction authorized by
paragraph (a) of this section may be processed by U.S. depository
institutions and U.S. registered brokers or dealers in securities
provided they are consistent with Sec. 560.516.
(d) Specific licenses may be issued on a case-by-case basis for the
exportation, reexportation, or provision of services, software, or
hardware incident to communications not specified in paragraph (a) of
this section, including in the ``List of Services, Software, and
Hardware Incident to Communications under 31 CFR 560.540'', or other
activities to support internet freedom in Iran, including development
and hosting of anti-surveillance software by Iranian developers.
Bradley T. Smith,
Director, Office of Foreign Assets Control.
[FR Doc. 2024-10721 Filed 5-16-24; 8:45 am]
BILLING CODE 4810-AL-P
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