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Electronic Code of Federal Regulations

e-CFR Data is current as of April 21, 2014

Title 31: Money and Finance: Treasury


PART 539—WEAPONS OF MASS DESTRUCTION TRADE CONTROL REGULATIONS


Contents

Subpart A—Relation of This Part to Other Laws and Regulations

§539.101   Relation of this part to other laws and regulations.

Subpart B—Prohibitions

§539.201   Prohibited importation of goods, technology, or services.
§539.202   Prohibition on import-related transactions.
§539.203   Evasions; attempts; conspiracies.
§539.204   Exempt transactions.

Subpart C—General Definitions

§539.301   Designated foreign person.
§539.302   Effective date.
§539.303   Entity.
§539.304   Entity owned or controlled by a person listed in appendix I to this part.
§539.305   General license.
§539.306   Goods, technology, or services produced or provided by a designated foreign person.
§539.307   Importation into the United States.
§539.308   Information or informational materials.
§539.309   License.
§539.310   Person.
§539.311   Specific license.
§539.312   United States.
§539.313   United States person; U.S. person.

Subpart D—Interpretations

§539.401   Reference to amended sections.
§539.402   Effect of amendment.
§539.403   Transactions incidental to a licensed transaction.
§539.404   Transshipments through the United States prohibited.
§539.405   Importation of goods or technology from third countries.
§539.406   Importation into and release from a bonded warehouse or foreign trade zone.

Subpart E—Licenses, Authorizations and Statements of Licensing Policy

§539.501   General and specific licensing procedures.
§539.502   Effect of license.
§539.503   Exclusion from licenses.
§539.504   Departments and agencies of the United States Government.

Subpart F—Reports

§539.601   Records and reports.

Subpart G—Penalties

§539.701   Penalties.
§539.702   Prepenalty notice.
§539.703   Response to prepenalty notice; informal settlement.
§539.704   Penalty imposition or withdrawal.
§539.705   Administrative collection; referral to United States Department of Justice.

Subpart H—Procedures

§539.801   Procedures.
§539.802   Delegation by the Secretary of the Treasury.

Subpart I—Paperwork Reduction Act

§539.901   Paperwork Reduction Act notice.
Appendix I to Part 539—Designated Foreign Persons

Authority: 3 U.S.C. 301; 22 U.S.C. 2751-2799aa-2; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 110-96, 121 Stat. 1011; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13094, 63 FR 40803, 3 CFR, 1998 Comp., p. 200.

Source: 64 FR 8716, Feb. 23, 1999, unless otherwise noted.

Subpart A—Relation of This Part to Other Laws and Regulations

§539.101   Relation of this part to other laws and regulations.

(a) This part is separate from, and independent of, the other parts of this chapter, with the exception of part 501 of this chapter, the provisions of which apply to this part. Actions taken pursuant to part 501 of this chapter with respect to the prohibitions contained in this part are considered actions taken pursuant to this part. Differing foreign policy and national security contexts may result in differing interpretations of similar language among the parts of this chapter. No license or authorization contained in or issued pursuant to those other parts authorizes any transaction prohibited by this part. No license or authorization contained in or issued pursuant to any other provision of law or regulation authorizes any transaction prohibited by this part.

(b) No license contained in or issued pursuant to this part relieves the involved parties from complying with any other applicable laws or regulations.

Subpart B—Prohibitions

§539.201   Prohibited importation of goods, technology, or services.

Except as otherwise authorized, the importation into the United States, on or after the effective date, directly or indirectly, of any goods, technology, or services produced or provided by a designated foreign person, other than information or informational materials, is prohibited.

§539.202   Prohibition on import-related transactions.

Except as otherwise authorized, no United States person may finance, act as broker for, transfer, transport, or otherwise participate in the importation into the United States on or after the effective date of any goods, technology, or services produced or provided by a designated foreign person, other than information or informational materials.

§539.203   Evasions; attempts; conspiracies.

Any transaction by any United States person or within the United States on or after the effective date that evades or avoids, has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in this part is prohibited. Any conspiracy formed for the purpose of engaging in a transaction prohibited by this part is prohibited.

§539.204   Exempt transactions.

(a) Personal communications. The prohibitions contained in this part do not apply to any postal, telegraphic, telephonic, or other personal communication, which does not involve the transfer of anything of value.

(b) Information or informational materials. (1) The prohibitions contained in this part do not apply to the importation from any country, or to the exportation to any country, whether commercial or otherwise, regardless of format or medium of transmission, of any information or informational materials as defined in §539.308, or any transaction directly incident to such importation or exportation.

(2) Paragraph (b)(1) of this section does not exempt from regulation or authorize transactions related to information or informational materials not fully created and in existence at the date of the transaction, or to the substantive or artistic alteration or enhancement of information or informational materials, or to the provision of marketing and business consulting services. Examples of prohibited transactions include, but are not limited to, payment of advances for information or informational materials not yet created and completed (with the exception of prepaid subscriptions for mass-market magazines and other periodical publications that are widely-circulated); importation into the United States of services to market, produce or co-produce, create, or assist in the creation of information or informational materials; and payment of royalties to a designated foreign person with respect to income received for enhancements or alterations made by U.S. persons to informational or informational materials imported from a designated foreign person.

(3) Paragraph (b)(1) of this section does not exempt from regulation or authorize the importation into the United States of or transactions incident to the importation into the United States or leasing of telecommunications transmission facilities (such as satellite links or dedicated lines) for use in the transmission of any data.

(c) Travel. The prohibitions contained in this part do not apply to transactions ordinarily incident to travel to or from any country, including importation of accompanied baggage for personal use, maintenance within any country including payment of living expenses and acquisition of goods or services for personal use, and arrangement or facilitation of such travel including nonscheduled air, sea, or land voyages.

Subpart C—General Definitions

§539.301   Designated foreign person.

The term designated foreign person means any person determined by the Secretary of State pursuant to section 4(a) of Executive Order 12938 of November 14, 1994 (59 FR 59099, 3 CFR, 1994 Comp., p. 950), as amended by section 1(a) of Executive Order 13094 of July 28, 1998 (63 FR 40803, July 30, 1998), to be subject to import measures. Designated foreign persons are any persons listed in appendix I to this part and any entities owned or controlled by any person listed in appendix I to this part unless otherwise indicated in appendix I to this part.

§539.302   Effective date.

The term effective date means the “effective date” specified in the relevant Federal Register notice issued by the Department of State identifying a designated foreign person. This date is listed after the name of each designated foreign person in appendix I to this part.

§539.303   Entity.

The term entity means a partnership, association, trust, joint venture, corporation, or other organization.

§539.304   Entity owned or controlled by a person listed in appendix I to this part.

The term entity owned or controlled by a person listed in appendix I to this part includes any subsidiaries and branches, wherever located, of entities listed in appendix I to this part, any successors to such entities, and any persons acting or purporting to act for or on behalf of any of the foregoing.

§539.305   General license.

The term general license means any license the terms of which are set forth in this part.

§539.306   Goods, technology, or services produced or provided by a designated foreign person.

With respect to the prohibitions in §§539.201 and 539.202, the term goods, technology, or services produced or provided by a designated foreign person includes but is not limited to the following:

(a) Goods grown, manufactured, extracted, or processed by a designated foreign person;

(b) Technology developed, owned, licensed, or otherwise controlled by a designated foreign person;

(c) Services performed by or on behalf of a designated foreign person, or by a third party under contract, directly or indirectly, to a designated foreign person, regardless of location.

§539.307   Importation into the United States.

The term importation into the United States means:

(a) With respect to goods or technology, the bringing of any goods or technology into the United States, except that in the case of goods or technology being transported by vessel, importation into the United States means the bringing of any goods or technology into the United States with the intent to unlade. See also §539.404.

(b) With respect to services, the receipt in the United States of services or of the benefit of services wherever such services may be performed. The benefit of services is received in the United States if the services are:

(1) Performed on behalf of or for the benefit of a person located in the United States;

(2) Received by a person located in the United States;

(3) Received by a person located outside the United States on behalf of or for the benefit of an entity organized in the United States; or

(4) Received by an individual temporarily located outside the United States for the purpose of obtaining such services for use in the United States.

(c) The following example illustrates the provisions of paragraph (b) of this section:

Example: An employee of an entity organized in the United States may not, without specific authorization from the Office of Foreign Assets Control, receive from a designated foreign person consulting services for use in the United States.

§539.308   Information or informational materials.

(a) For purposes of this part, the term information or informational materials includes, but is not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds.

(b) To be considered information or informational materials, artworks must be classified under chapter heading 9701, 9702, or 9703 of the Harmonized Tariff Schedule of the United States.

§539.309   License.

Except as otherwise specified, the term license means any license or authorization contained in or issued pursuant to this part.

§539.310   Person.

The term person means an individual or entity.

§539.311   Specific license.

The term specific license means any license not set forth in this part but issued pursuant to this part.

§539.312   United States.

The term United States means the United States, its territories and possessions, and all areas under the jurisdiction or authority thereof.

§539.313   United States person; U.S. person.

The term United States person or U.S. person means any United States citizen, permanent resident alien, entity organized under the laws of the United States (including foreign branches), or any person in the United States.

Subpart D—Interpretations

§539.401   Reference to amended sections.

Except as otherwise specified, reference to any provision in or appendix to this part or chapter or to any regulation, ruling, order, instruction, direction, or license issued pursuant to this part refers to the same as currently amended.

§539.402   Effect of amendment.

Unless otherwise specifically provided, any amendment, modification, or revocation of any provision in or appendix to this part or chapter 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 affect any act done or omitted, 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.

§539.403   Transactions incidental to a licensed transaction.

Any transaction ordinarily incident to a licensed transaction and necessary to give effect to the licensed transaction is also authorized by the license. Except as specifically authorized by the terms of the license, prohibited transactions involving designated foreign persons not named in the license are not considered incidental to a licensed transaction and therefore remain prohibited.

§539.404   Transshipments through the United States prohibited.

(a) The prohibitions in §§539.201 and 539.202 apply to the importation into the United States, for transshipment or transit, of goods, technology, or services produced or provided by a designated foreign person that are intended or destined for third countries.

(b) In the case of goods or technology transported by vessel, the prohibitions in §§539.201 and 539.202 apply to the unlading in the United States and the intent to unlade in the United States of goods or technology produced or provided by a designated foreign person that is intended or destined for third countries.

§539.405   Importation of goods or technology from third countries.

Importation into the United States from third countries of goods or technology is prohibited if undertaken with knowledge or reason to know that those goods contain raw materials or components produced or provided by a designated foreign person or technology produced or provided by a designated foreign person.

§539.406   Importation into and release from a bonded warehouse or foreign trade zone.

The prohibitions in §§539.201 and 539.202 apply to importation into a bonded warehouse or a foreign trade zone of the United States.

Subpart E—Licenses, Authorizations and Statements of Licensing Policy

§539.501   General and specific licensing procedures.

For provisions relating to licensing procedures, see part 501, subpart E, of this chapter. Licensing actions taken pursuant to part 501 of this chapter with respect to the prohibitions contained in this part are considered actions taken pursuant to this part.

[64 FR 8716, Feb. 23, 1999, as amended at 68 FR 53658, Sept. 11, 2003]

§539.502   Effect of license.

(a) No license contained in this part, or otherwise issued by or under the direction of the Director of the Office of Foreign Assets Control pursuant to this part, authorizes or validates any transaction effected prior to the issuance of the license, unless the prior transaction is specifically authorized in such license.

(b) No regulation, ruling, instruction, or license authorizes any transaction prohibited by this part unless the regulation, ruling, instruction, or license is issued by the Office of Foreign Assets Control and specifically refers to this part. No regulation, ruling, instruction, or license referring to this part authorizes any transaction prohibited by any provision of this chapter unless the regulation, ruling, instruction, or license specifically refers to such provision.

(c) Any regulation, ruling, instruction, or license authorizing any transaction otherwise prohibited by this part has the effect of removing from the transaction a prohibition or prohibitions contained in this part, but only to the extent specifically stated by its terms. Unless the regulation, ruling, instruction, or license otherwise specifies, such an authorization does not create any right, duty, obligation, claim, or interest that would not otherwise exist under ordinary principles of law in or with respect to any property.

§539.503   Exclusion from licenses.

The Director of the Office of Foreign Assets Control reserves the right to exclude any person, property, or transaction from the operation of any license or from the privileges conferred by any license. The Director of the Office of Foreign Assets Control also reserves the right to restrict the applicability of any license to particular persons, property, transactions, or classes thereof. Such actions are binding upon all persons receiving actual or constructive notice of the exclusions or restrictions.

§539.504   Departments and agencies of the United States Government.

(a) Departments and agencies of the United States Government may by written authorization signed by the head of the Department or Agency or his designee provide for:

(1) Procurement contracts necessary to meet U.S. operational military requirements or requirements under defense production agreements; intelligence requirements; sole source suppliers, spare parts, components, routine servicing and maintenance of products for the United States Government; and medical and humanitarian items; and

(2) Performance pursuant to contracts in force as of 12:01 a.m. EDT, July 29, 1998, under appropriate circumstances.

(b) Such written authorization shall:

(1) Include details about the goods, technology, and services which have been approved for importation; the rationale for such approval; and 24-hour-a-day contact information for the approving official or designee for use by the U.S. Customs Service should questions arise about an approved import;

(2) Be in the form of license, regulation, order, directive, or exception;

(3) Include information about the results of prior written consultation with the Under Secretary of State for Arms Control and International Security Affairs (through the Office of Chemical, Biological and Missile Nonproliferation and the Office of the Assistant Legal Adviser for Political-Military Affairs); and

(4) Be provided to U.S. Customs Service officials upon the importation of any goods or technology covered by an authorization described in paragraph (a) of this section in a form which clearly establishes that the imported goods or technology is covered by the authorization.

Subpart F—Reports

§539.601   Records and reports.

For provisions relating to required records and reports, see part 501, subpart C, of this chapter. Recordkeeping and reporting requirements imposed by part 501 of this chapter with respect to the prohibitions contained in this part are considered requirements arising pursuant to this part.

Subpart G—Penalties

§539.701   Penalties.

(a) Attention is directed to section 206 of the International Emergency Economic Powers Act (the “Act”) (50 U.S.C. 1705), which is applicable to violations of the provisions of any license, ruling, regulation, order, direction, or instruction issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to this part or otherwise under the Act.

(1) A civil penalty not to exceed the amount set forth in Section 206 of the Act may be imposed on any person who violates, attempts to violate, conspires to violate, or causes a violation of any license, order, regulation, or prohibition issued under the Act.

Note to paragraph (a)(1) of §539.701: As of June 10, 2008, the Act provides for a maximum civil penalty not to exceed the greater of $250,000 or an amount that is twice the amount of the transaction that is the basis of the violation with respect to which the penalty is imposed.

(2) A person who willfully commits, willfully attempts to commit, or willfully conspires to commit, or aids or abets in the commission of a violation of any license, order, regulation, or prohibition shall, upon conviction, be fined not more than $1,000,000, or if a natural person, may be imprisoned for not more than 20 years, or both.

(b) Adjustments to penalty amounts. (1) The civil penalties provided in the Act are subject to adjustment pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 note).

(2) The criminal penalties provided in the Act are subject to adjustment pursuant to 18 U.S.C. 3571.

(c) Attention is also directed to 18 U.S.C. 1001, which provides that whoever, in any matter within the jurisdiction of any department or agency of the United States, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious, or fraudulent statement or representation or makes or uses any false writing or document knowing the same to contain any false, fictitious, or fraudulent statement or entry shall be fined under title 18, United States Code, or imprisoned not more than five years, or both.

(d) Violations of this part may also be subject to relevant provisions of other applicable laws.

[64 FR 8716, Feb. 23, 1999, as amended at 71 FR 29253, May 22, 2006; 73 FR 32653, June 10, 2008]

§539.702   Prepenalty notice.

(a) When required. If the Director of the Office of Foreign Assets Control has reasonable cause to believe that there has occurred a violation of any provision of this part or a violation of the provisions of any license, ruling, regulation, order, direction, or instruction issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to this part or otherwise under the International Emergency Economic Powers Act, and the Director determines that further proceedings are warranted, the Director shall issue to the person concerned a notice of intent to impose a monetary penalty. This prepenalty notice shall be issued whether or not another agency has taken any action with respect to this matter.

(b) Contents—(1) Facts of violation. The prepenalty notice shall describe the violation, specify the laws and regulations allegedly violated, and state the amount of the proposed monetary penalty.

(2) Right to respond. The prepenalty notice also shall inform the respondent of respondent's right to make a written presentation within 30 days of the date of mailing of the notice as to why a monetary penalty should not be imposed or why, if imposed, the monetary penalty should be in a lesser amount than proposed.

§539.703   Response to prepenalty notice; informal settlement.

(a) Deadline for response. The respondent shall have 30 days from the date of mailing of the prepenalty notice to make a written response to the Director of the Office of Foreign Assets Control.

(b) Form and contents of response. The written response need not be in any particular form, but must contain information sufficient to indicate that it is in response to the prepenalty notice. It should contain responses to the allegations in the prepenalty notice and set forth the reasons why the respondent believes the penalty should not be imposed or why, if imposed, it should be in a lesser amount than proposed.

(c) Informal settlement. In addition or as an alternative to a written response to a prepenalty notice issued pursuant to this section, the respondent or respondent's representative may contact the Office of Foreign Assets Control as advised in the prepenalty notice to propose the settlement of allegations contained in the prepenalty notice and related matters. In the event of settlement at the prepenalty stage, the claim proposed in the prepenalty notice will be withdrawn, the respondent is not required to take a written position on allegations contained in the prepenalty notice, and the Office of Foreign Assets Control will make no final determination as to whether a violation occurred. The amount accepted in settlement of allegations in a prepenalty notice may vary from the civil penalty that might finally be imposed in the event of a formal determination of violation. In the event no settlement is reached, the 30-day period specified in paragraph (a) of this section for written response to the prepenalty notice remains in effect unless additional time is granted by the Office of Foreign Assets Control.

§539.704   Penalty imposition or withdrawal.

(a) No violation. If, after considering any response to a prepenalty notice and any relevant facts, the Director of the Office of Foreign Assets Control determines that there was no violation by the respondent named in the prepenalty notice, the Director promptly shall notify the respondent in writing of that determination and that no monetary penalty will be imposed.

(b) Violation. If, after considering any response to a prepenalty notice and any relevant facts, the Director of the Office of Foreign Assets Control determines that there was a violation by the respondent named in the prepenalty notice, the Director promptly shall issue a written notice of the imposition of the monetary penalty to the respondent.

(1) The penalty notice shall inform the respondent that payment of the assessed penalty must be made within 30 days of the date of mailing of the penalty notice.

(2) The penalty notice shall inform the respondent of the requirement to furnish the respondent's taxpayer identification number pursuant to 31 U.S.C. 7701 and that such number will be used for purposes of collecting and reporting on any delinquent penalty amount.

§539.705   Administrative collection; referral to United States Department of Justice.

In the event that the respondent does not pay the penalty imposed pursuant to this part or make payment arrangements acceptable to the Director of the Office of Foreign Assets Control within 30 days of the date of mailing of the penalty notice, the matter may be referred for administrative collection measures by the Department of the Treasury or to the United States Department of Justice for appropriate action to recover the penalty in a civil suit in a Federal district court.

Subpart H—Procedures

§539.801   Procedures.

For license application procedures and procedures relating to amendments, modifications, or revocations of licenses; administrative decisions; rulemaking; and requests for documents pursuant to the Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see part 501, subpart E, of this chapter.

[64 FR 8716, Feb. 23, 1999, as amended at 68 FR 53658, Sept. 11, 2003]

§539.802   Delegation by the Secretary of the Treasury.

Any action that the Secretary of the Treasury is authorized to take pursuant to Executive Order 12938 of November 14, 1994 (59 FR 59099, 3 CFR, 1994 Comp., p. 950), as amended by Executive Order 13094 of July 28, 1998 (63 FR 40803, July 30, 1998), and any further Executive orders relating to the national emergency declared in Executive Order 12938 may be taken by the Director of the Office of Foreign Assets Control or by any other person to whom the Secretary of the Treasury has delegated authority so to act.

Subpart I—Paperwork Reduction Act

§539.901   Paperwork Reduction Act notice.

For approval by the Office of Management and Budget (“OMB”) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information collections relating to recordkeeping and reporting requirements, licensing procedures (including those pursuant to statements of licensing policy), and other procedures, see §501.901 of this chapter. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.

Appendix I to Part 539—Designated Foreign Persons

The following foreign persons have been determined by the Secretary of State to have materially contributed or attempted to contribute materially to the efforts of a foreign country, project, or entity of proliferation concern to use, acquire, design, develop, produce, or stockpile weapons of mass destruction or missiles capable of delivering such weapons, for purposes of section 4(a) of Executive Order 12938, as amended by section 1(a) of Executive Order 13094, and to be subject to import measures authorized in Executive Orders 12938 and 13094. They, and any entities owned or controlled by them, unless indicated otherwise, are designated foreign persons for purposes of this part. The applicable effective date and citation to the Federal Register for each such person is given in brackets after that person's name and identifying information:

1. Baltic State Technical University, including at 1/21, 1-ya Krasnoarmeiskaya Ul., 198005 St. Petersburg, Russia [July 30, 1998; 63 FR 42089, August 6, 1998].

2. Europalace 2000, including at Moscow, Russia [July 30, 1998; 63 FR 42089, August 6, 1998].

3. Glavkosmos, including at 9 Krasnoproletarskaya St., 103030 Moscow, Russia [July 30, 1998; 63 FR 42089, August 6, 1998].

4. Grafit, also known as (“aka”) State Scientific Research Institute of Graphite or NIIGRAFIT, including at 2 Ulitsa Elektrodnaya, 111524 Moscow, Russia [July 30, 1998; 63 FR 42089, August 6, 1998].

5. MOSO Company, including at Moscow, Russia [July 30, 1998; 63 FR 42089, August 6, 1998].

6. D. Mendeleyev University of Chemical Technology of Russia, including at 9 Miusskaya Sq., Moscow 125047, Russia [January 8, 1999; 64 FR 2935, January 19, 1999].

7. Moscow Aviation Institute (MAI), including at 4 Volokolamskoye Shosse, Moscow 125871, Russia [January 8, 1999; 64 FR 2935, January 19, 1999].

8. The Scientific Research and Design Institute of Power Technology, aka NIKIET, Research and Development Institute of Power Engineering [RDIPE], and ENTEK, including at 101000, P.O. Box 788, Moscow, Russia.

[64 FR 8716, Feb. 23, 1999, as amended at 66 FR 57381, Nov. 15, 2001]



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