e-CFR banner

Home
gpo.gov
govinfo.gov

e-CFR Navigation Aids

Browse

Simple Search

Advanced Search

 — Boolean

 — Proximity

 

Search History

Search Tips

Corrections

Latest Updates

User Info

FAQs

Agency List

Incorporation By Reference

eCFR logo

Related Resources

 

Electronic Code of Federal Regulations

e-CFR data is current as of December 4, 2019

Title 31Subtitle BChapter VPart 560 → Subpart D


Title 31: Money and Finance: Treasury
PART 560—IRANIAN TRANSACTIONS AND SANCTIONS REGULATIONS


Subpart D—Interpretations


Contents
§560.401   Reference to amended sections.
§560.402   Effect of amendment.
§560.403   Transshipment or transit through Iran.
§560.404   [Reserved]
§560.405   Transactions ordinarily incident to a licensed transaction authorized.
§560.406   Transshipment or transit through the United States.
§560.407   Transactions related to Iranian-origin goods.
§560.408   Importation into and release from a bonded warehouse or foreign trade zone.
§560.409   [Reserved]
§560.410   Provision of services.
§560.411   [Reserved]
§560.412   Extensions of credit or loans to Iran.
§560.413   [Reserved]
§560.414   Reexportation of certain U.S.-origin goods exported prior to May 7, 1995.
§560.415   [Reserved]
§560.416   Brokering services.
§560.417   Facilitation; change of policies and procedures; referral of business opportunities offshore.
§560.418   Release of technology or software in the United States or a third country.
§560.419   U.S. employment of persons ordinarily resident in Iran.
§560.420   Reexportation by non-U.S. persons of certain foreign-made products containing U.S.-origin goods or technology.
§560.421   Setoffs prohibited.
§560.422   Termination and acquisition of an interest in blocked property.
§560.423   Offshore transactions involving blocked property.
§560.424   Payments from blocked accounts to satisfy obligations prohibited.
§560.425   Entities owned by a person whose property and interests in property are blocked.
§560.426   Charitable contributions.
§560.427   Exportation, reexportation, sale or supply of financial services to Iran or the Government of Iran.
§560.428   Credit extended and cards issued by U.S. financial institutions.

§560.401   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, directive, or license issued pursuant to this part refers to the same as currently amended.

§560.402   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 the Office of Foreign Assets Control does not affect any act done or omitted, or any civil or criminal 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.

§560.403   Transshipment or transit through Iran.

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.

§560.404   [Reserved]

§560.405   Transactions ordinarily incident to a licensed transaction authorized.

Any transaction ordinarily incident to a licensed transaction and necessary to give effect thereto is also authorized, except:

(a) An ordinarily incident transaction, not explicitly authorized within the terms of the license, involving a debit to a blocked account or a transfer of blocked property;

(b) Payments or transfers of funds;

Note to paragraph (b) of §560.405: See §560.516 for a general license authorizing United States depository institutions or United States registered brokers or dealers in securities to process transfers of funds if the transfer arises from, and is ordinarily incident and necessary to give effect to, an underlying transaction authorized by a specific or general license issued pursuant to, or set forth in, this part.

(c) 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;

(d) 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;

(e) Financing of sales for the exportation or reexportation of agricultural commodities, medicine, and medical devices that is authorized by general or specific license pursuant to §560.530; and

Note to paragraph (e) of §560.405: See §560.530(a)(2) through (4) for general licenses authorizing, with certain exceptions, the exportation or reexportation of agricultural commodities, medicine, medical supplies, and replacement parts for certain medical devices to the Government of Iran, individuals or entities in Iran, or persons in third countries purchasing specifically for resale to any of the foregoing. These general licenses also authorize the conduct of related transactions, including, but not limited to, financing and payment, provided that payment terms and financing are limited to, and consistent with, §560.532, which sets forth payment terms for sales authorized by one of the general licenses set forth in paragraphs (a)(2) through (4) of §560.530 or by a specific license issued pursuant to paragraph (a)(1) of the same section.

(f) Letter of credit services relating to transactions authorized in §560.534. See §560.535(a).

[77 FR 64666, Oct. 22, 2012, as amended at 79 FR 18993, Apr. 7, 2014; 81 FR 3332, Jan. 21, 2016]

§560.406   Transshipment or transit through the United States.

(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.

(c) Goods in which the Government of Iran, any Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to §560.211 has an interest which are imported into or transshipped through the United States are subject to the prohibitions in §560.211.

§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 and transactions relating to such goods are not prohibited by §560.201 or §560.206 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.

§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.

§560.409   [Reserved]

§560.410   Provision 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) The prohibitions on transactions involving blocked property contained in §560.211 apply to services performed in the United States or by U.S. persons, wherever located, including by an overseas branch of an entity located in the United States:

(1) On behalf of or for the benefit of the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to §560.211; or

(2) With respect to property interests of the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to §560.211.

(d) 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.

§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.

§560.413   [Reserved]

§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.

Note 1 to §560.414: 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 through 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.a and .c; 6A991; 6A998.a; 7A994; 8A992.d, .e, .f and .g; 9A990.a and .b; and 9A991.d and .e.

Note 2 to §560.414: 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 End User and End Use Control Policies found in provisions of the Export Administration Regulations (15 CFR part 744).

§560.415   [Reserved]

§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.

§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.

§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.

Note 1 to §560.418: The release of technology or software in the United States, or the release of U.S. origin technology or software in a third country, to a foreign national may require a license from the U.S. Department of Commerce's Bureau of Industry and Security under the Export Administration Regulations, 15 CFR parts 730 through 774 (the “EAR”). The EAR require a license for such release if both of the following conditions are met:

(a) That technology or software 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. Sec. 1324(b)(a)(3)). See 15 CFR 734.2(b)(2)(ii) and 734.2(b)(5).

Note 2 to §560.418: 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.

§560.419   U.S. employment of persons ordinarily resident in Iran.

The prohibitions in §560.201 make it unlawful to hire an Iranian national ordinarily resident 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 authorized pursuant to §560.505. See also §560.418 with respect to the release of technology and software.

§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 total value 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 total value 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 total value 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.

Note 1 to §560.420: 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).

Note 2 to §560.420: 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.

Note 3 to §560.420: The provisions of §560.205 and this section apply only to persons other than United States persons.

§560.421   Setoffs prohibited.

A setoff against blocked property (including a blocked account), whether by a U.S. bank or other U.S. person, is a prohibited transfer under §560.211 if effected after the effective date.

§560.422   Termination and acquisition of an interest in blocked property.

(a) Whenever a transaction licensed or authorized by or pursuant to this part results in the transfer of property (including any property interest) away from the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to §560.211, such property shall no longer be deemed to be property blocked pursuant to §560.211, unless there exists in the property another interest that is blocked pursuant to §560.211, the transfer of which has not been effected pursuant to license or other authorization.

(b) Unless otherwise specifically provided in a license or authorization issued pursuant to this part, if property (including any property interest) is transferred or attempted to be transferred to the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to §560.211, such property shall be deemed to be property in which the Government of Iran, an Iranian financial institution, or that person has an interest and therefore blocked.

§560.423   Offshore transactions involving blocked property.

The prohibitions in §560.211 on transactions or dealings involving blocked property apply to transactions by any U.S. person in a location outside the United States with respect to property held in the name of the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to §560.211, or property in which the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to §560.211 has or has had an interest since the effective date.

§560.424   Payments from blocked accounts to satisfy obligations prohibited.

Pursuant to §560.211, no debits may be made to a blocked account to pay obligations to U.S. persons or other persons, except as authorized by or pursuant to this part.

Note to §560.424: See also §560.502(f), which provides that no license or other authorization contained in or issued pursuant to this part authorizes transfers of or payments from blocked property or debits to blocked accounts unless the license or other authorization explicitly authorizes the transfer of or payment from blocked property or the debit to a blocked account.

§560.425   Entities owned by a person whose property and interests in property are blocked.

A person whose property and interests in property are blocked pursuant to §560.211 has an interest in all property and interests in property of an entity in which it owns, directly or indirectly, a 50 percent or greater interest. The property and interests in property of such an entity, therefore, are blocked, and such an entity is a person whose property and interests in property are blocked pursuant to §560.211, regardless of whether the entity itself is designated pursuant to §560.211.

Note to §560.425: This section, which deals with the consequences of ownership of entities, in no way limits the definition of the Government of Iran in §560.304.

§560.426   Charitable contributions.

Unless specifically authorized by the Office of Foreign Assets Control pursuant to this part, no charitable contribution of funds, goods, services, or technology, including contributions to relieve human suffering, such as food, clothing or medicine, may be made by, to, or for the benefit of, or received from, the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to §560.211. For the purposes of this part, a contribution is made by, to, or for the benefit of, or received from, the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to §560.211 if made by, to, or in the name of, or received from or in the name of, such a person; if made by, to, or in the name of, or received from or in the name of, an entity or individual acting for or on behalf of, or owned or controlled by, such a person; or if made in an attempt to violate, to evade, or to avoid the bar on the provision of contributions by, to, or for the benefit of such a person, or the receipt of contributions from any such person.

§560.427   Exportation, reexportation, sale or supply of financial services to Iran or the Government of Iran.

(a) The prohibition on the exportation, reexportation, sale or supply of financial services to Iran or the Government of Iran contained in §560.204 applies to:

(1) The transfer of funds, directly or indirectly, from the United States or by a U.S. person, wherever located, to Iran or the Government of Iran; and

(2) The provision, directly or indirectly, to Iran or the Government of Iran of insurance services, investment or brokerage services (including but not limited to brokering or trading services regarding securities, debt, commodities, options, or foreign exchange), banking services, money remittance services; loans, guarantees, letters of credit, or other extensions of credit; or the service of selling or redeeming traveler's checks, money orders, and prepaid access products.

Note to paragraph (a) of §560.427: See §560.516 of this part, which authorizes only United States depository institutions and United States registered brokers or dealers in securities to process certain transfers of funds to or from Iran.

(b) Pursuant to the prohibition in §560.204 on the exportation, reexportation, sale or supply of financial services to Iran or the Government of Iran, United States depository institutions and United States registered brokers or dealers in securities are prohibited from performing services with respect to Iranian accounts, as defined in §560.320.

Note to paragraph (b) of §560.427: See §560.517 of this part for general licenses authorizing United States depository institutions and United States registered brokers or dealers in securities to operate Iranian accounts in certain limited circumstances.

§560.428   Credit extended and cards issued by U.S. financial institutions.

The prohibition in §560.211 on dealing in property subject to that section prohibits U.S. financial institutions from performing under any existing credit agreements, including, but not limited to, charge cards, debit cards, or other credit facilities issued by a U.S. financial institution to the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to §560.211.

Need assistance?