U.S. Government Implements Changes to Iraq Export, Reexport, Licensing Policies, Etc

This is Part I of a multipart series of summaries of the order and rules, and briefly covers their provisions. See future issues of ITT for additional summaries of the interim rule and final rule.

EO 13350 Terminates National Emergency, Blocks Certain Property, Etc.

The following are highlights of the provisions contained in EO 13350, which became effective at 12:01 a.m. EDT on July 30, 2004 (partial list):

Termination of national emergency. On July 29, 2004, the President issued EO 13350 which terminates the national emergency with respect to Iraq declared in EO 12722 (August 1990). In addition, EO 13350 revokes EO 12722 and five subsequent EOs that are based on the national emergency declared in EO 12722.

Confiscation and blocking of certain property, etc. EO 13350 also amends EO 13290 (March 2003), which concerns the confiscating and vesting of certain Iraqi property, so that the authorities therein remain in effect based on the national emergency declared in EO 13303 (May 2003) and expanded on in EO 13315 (August 2003). EO 13303 protects from litigation the Development Fund for Iraq, Iraqi petroleum, and proceeds from its sales, while EO 13315 blocks property of the former Iraqi Regime, its senior officials, and their family members, etc. In addition, EO 13350 contains an Annex listing senior Iraqi officials and other previously designated persons that replaces and supercedes the Annex in EO 13315.

EO 13350 states that pursuant to section 202(a) of the National Emergencies Act (50 USC 1622(a)), termination of the national emergency declared in EO 12722 shall not affect any action taken or proceeding pending but not finally concluded or determined as of the effective date of EO 13350, any action or proceeding based on any act committed prior to such date, or any rights or duties that matured or penalties that were incurred prior to such date.

In EO 13350 the President also determined that the continuation of prohibitions with regard to transactions involving property blocked pursuant to EO 12722 or 12724 that continues to be blocked as of EO 13350's effective date is necessary on account of claims involving Iraq.

Iraqi cultural property. EO 13350 states that unless licensed or otherwise authorized pursuant to this order or otherwise consistent with U.S. law, the trade in or transfer of ownership or possession of Iraqi cultural property or other items of archeological, historical, cultural, rare scientific, and religious importance that were illegally removed, or for which a reasonable suspicion exists that they were illegally removed, from certain locations in Iraq since August 6, 1990 is prohibited.

BIS Interim Rule Transfers EAR Licensing Responsibility from OFAC to BIS

The following are highlights of the provisions contained in BIS' interim rule, which is effective July 30, 2004 (partial list):

EAR licensing responsibility reverts to BIS. This interim rule amends the Export Administration Regulations (EAR) to implement the reversion to BIS from OFAC of the licensing responsibility for exports and reexports to Iraq of items subject to the EAR.

Foreign policy goals addressed by interim rule. BIS explains that this interim rule is designed to address the following significant foreign policy goals with respect to Iraq: (1) this interim rule furthers the goal of ensuring that exports and reexports of controlled items destined to civil infrastructure rebuilding do not suffer undue licensing delays, and (2) in furtherance of applicable U.N. Security Council Resolutions and U.S. foreign policy interests, the interim rule revises 15 CFR Parts 730-799 and retains substantial restrictions on exports to Iraq destined for inappropriate end-users or end-uses.

Licensing requirement for transactions within Iraq. According to BIS, this interim rule also addresses a licensing requirement for certain transactions involving the transfer of items subject to the EAR within Iraq.

OFAC Final Rule Implements Revisions Due to President's Actions, BIS Rule, Etc.

The following are highlights of the provision's of OFAC's final rule, which became effective July 30, 2004 (partial list):

Revisions due to President's actions and BIS' interim rule. OFAC's final rule revises 31 CFR 575.533 (Certain New Transactions) in light of the President's actions terminating the national emergency declared in EO 12722. This final rule clarifies the impact of this action and also clarifies the impact of the above-described BIS interim rule on certain specific licenses issued by OFAC pursuant to EO 12722 and 31 CFR Part 575 (Iraqi Sanctions Regulations).

This final rule also recognizes the transfer to BIS of licensing jurisdiction over exports from the U.S. to Iraq and states that effective July 30, 2004, all applications for exportation or reexportation to Iraq of any items controlled by BIS under the EAR for export to Iraq are to be submitted to BIS.

General License No. 1 under EO 13315. OFAC's final rule promulgates General License No. 1 under EO 13315, which became effective August 29, 2003. According to OFAC, this license permits all transactions with state bodies, corporations, or agencies of the former Iraqi regime that are prohibited by section 1 of EO 13315. It should be noted however, that there are four exceptions to this provision listed in paragraph (b) of General License No. 1. General License No. 1 also does not authorize certain transactions with respect to Iraqi cultural property.

-written comments on BIS' interim rule are due by August 30, 2004

EO 13350 (FR Pub 07/30/04) available at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-17615.pdf

BIS Interim Rule (D/N 040302078-4078-01, FR Pub 07/30/04) available at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-17532.pdf

OFAC Final Rule (FR Pub 07/30/04) available athttp://a257.g.akamaitech.net/7/257/2422/30jul20040900/edocket.access.gpo.gov/2004/pdf/04-17636.pdf