Rule2022-01072
Transnational Criminal Organizations 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
January 21, 2022
Effective
January 21, 2022
Issuing agencies
Treasury DepartmentForeign Assets Control Office
Abstract
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is amending the Transnational Criminal Organizations Sanctions Regulations and reissuing them in their entirety to further implement a July 24, 2011 Executive order and a March 15, 2019 Executive order related to transnational criminal organizations. This final rule replaces the regulations that were published in abbreviated form on January 12, 2012 and amended on July 23, 2019, and includes additional interpretive guidance, definitions, general licenses, and other regulatory provisions that will provide further guidance to the public. Due to the number of regulatory sections being updated or added, OFAC is amending and reissuing the Transnational Criminal Organizations Sanctions Regulations in their entirety.
Full Text
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<title>Federal Register, Volume 87 Issue 14 (Friday, January 21, 2022)</title>
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[Federal Register Volume 87, Number 14 (Friday, January 21, 2022)]
[Rules and Regulations]
[Pages 3207-3217]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-01072]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 590
Transnational Criminal Organizations 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 amending the Transnational Criminal Organizations
Sanctions Regulations and reissuing them in their entirety to further
implement a July 24, 2011 Executive order and a March 15, 2019
Executive order related to transnational criminal organizations. This
final rule replaces the regulations that were published in abbreviated
form on January 12, 2012 and amended on July 23, 2019, and includes
additional interpretive guidance, definitions, general licenses, and
other regulatory provisions that will provide further guidance to the
public. Due to the number of regulatory sections being updated or
added, OFAC is amending and reissuing the Transnational Criminal
Organizations Sanctions Regulations in their entirety.
DATES: This rule is effective January 21, 2022.
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="http://www.treas.gov/ofac">www.treas.gov/ofac</a>.
Background
On January 12, 2012, OFAC issued the Transnational Criminal
Organizations Sanctions Regulations, 31 CFR part 590 (77 FR 1864,
January 12, 2012) (the ``Regulations''), to implement Executive Order
(E.O.) 13581 of July 24, 2011, ``Blocking Property of Transnational
Criminal Organizations'' (76 FR 44757, July 27, 2011), pursuant to
authorities delegated to the Secretary of the Treasury in E.O. 13581.
The Regulations were initially issued in abbreviated form for the
purpose of providing immediate guidance to the public. OFAC amended the
Regulations on July 23, 2019 (84 FR 35307, July 23, 2019) to implement
E.O. 13863 of March 15, 2019, ``Taking Additional Steps to Address the
National Emergency With Respect to Significant Transnational Criminal
Organizations'' (84 FR 10255, March 19, 2019), which amended E.O.
13581. OFAC is amending and reissuing the Regulations as a more
comprehensive set of regulations that includes additional interpretive
guidance and definitions, general licenses, and other regulatory
provisions that will provide further guidance to the public. Due to the
number of regulatory sections being updated or added, OFAC is reissuing
the Regulations in their entirety.
E.O. 13581
On July 24, 2011, the President, invoking the authority of, inter
alia, the International Emergency Economic Powers Act (50 U.S.C. 1701
et seq.) (IEEPA), issued E.O. 13581. In E.O. 13581, the President found
that the activities of significant transnational criminal
organizations, such as those listed in the Annex to E.O. 13581, have
reached such scope and gravity that they threaten the stability of
international political and economic systems. The President further
found that such organizations are becoming increasingly sophisticated
and dangerous to the United States; they are increasingly entrenched in
the operations of foreign governments and the international financial
system, thereby weakening democratic institutions, degrading the rule
of law, and undermining economic markets. The President stated these
organizations facilitate and aggravate violent civil conflicts and
increasingly facilitate the activities of other dangerous persons. The
President determined that the activities of significant transnational
criminal organizations constitute an unusual and extraordinary threat
to the national security, foreign policy, and economy of the United
States and declared a national emergency to deal with that threat.
Section 1(a) of E.O. 13581 blocks, with certain exceptions, all
property and interests in property that are in the United States, that
come within the United States, or that are or come within the
possession or control of any United States person of: (i) The persons
listed in the Annex to E.O. 13581; and (ii) any person determined by
the Secretary of the Treasury, in consultation with the Attorney
General and the Secretary of State: (A) To be a foreign person that
constitutes a significant transnational criminal organization; (B) to
have materially assisted, sponsored, or provided financial, material,
or technological support for, or goods or services to or in support of
any person whose property and interests in property are blocked
pursuant to E.O. 13581; or (C) to be owned or controlled by, or to have
acted or purported to act for or on behalf of, directly or indirectly,
any person whose property and interests in property are blocked
pursuant to E.O. 13581. The property and interests in property of the
persons described above may not be transferred, paid, exported,
withdrawn, or otherwise dealt in.
In Section 1(b) of E.O. 13581, the President determined that the
making of donations of certain articles, such as food, clothing, and
medicine, intended to be used to relieve human suffering, as specified
in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)), by, to, or for
the benefit of any person whose property and interests in property are
blocked pursuant to E.O. 13581 would seriously impair the President's
ability to deal with the national emergency declared in E.O. 13581. The
President therefore prohibited the donation of such items except to the
extent provided by statutes, or in regulations, orders, directives, or
licenses that may be issued pursuant to E.O. 13581.
Section 1(c) of E.O. 13581 provides that the prohibition on any
transaction or dealing in blocked property or interests in property
includes the making of any contribution or provision of funds, goods,
or services by, to, or for the benefit of any person whose property and
interests in property are blocked pursuant to E.O. 13581, and the
receipt of any contribution or provision of funds, goods, or services
from any such person.
Section 2 of E.O. 13581 prohibits any transaction by a United
States person or within the United States that evades or avoids, has
the purpose of evading or avoiding, causes a violation of, or attempts
to violate any of the prohibitions set forth in E.O. 13581, as
[[Page 3208]]
well as any conspiracy formed to violate such prohibitions.
Section 3 of E.O. 13581 provides definitions for certain terms used
in the order. As discussed further below, section 3 of E.O. 13581 was
amended by E.O. 13863.
Section 5 of E.O. 13581 authorizes the Secretary of the Treasury,
in consultation with the Attorney General and the Secretary of State,
to take such actions, including the promulgation of rules and
regulations, and to employ all powers granted to the President by
IEEPA, as may be necessary to carry out the purposes of E.O. 13581.
Section 5 of E.O. 13581 also provides that the Secretary of the
Treasury may redelegate any of these functions to other officers and
agencies of the U.S. Government.
E.O. 13863
On March 15, 2019, pursuant to, inter alia, IEEPA, the President
issued E.O. 13863. In E.O. 13863, the President took additional steps
to deal with the national emergency with respect to significant
transnational criminal organizations declared in E.O. 13581, in view of
the evolution of these organizations as well as the increasing
sophistication of their activities, which threaten international
political and economic systems and pose a direct threat to the safety
and welfare of the United States and its citizens, and given the
ability of these organizations to derive revenue through widespread
illegal conduct, including acts of violence and abuse that exhibit a
wanton disregard for human life as well as many other crimes enriching
and empowering these organizations. E.O. 13863 amended E.O. 13581 by
replacing subsection (3)(e) of E.O. 13581 in its entirety with a new
definition of the term ``significant transnational criminal
organization.'' OFAC incorporated this definition into the Regulations
on July 23, 2019 (84 FR 35307, July 27, 2019). E.O. 13863 did not amend
the Annex to E.O. 13581.
Current Regulatory Action
In furtherance of the purpose of E.O. 13581, as amended by E.O.
13863 (``amended E.O. 13581''), OFAC is reissuing the Regulations. The
Regulations implement targeted sanctions that are directed at persons
determined to meet the criteria set forth in Sec. 590.201 of the
Regulations, as well as sanctions that may be set forth in any future
Executive orders issued pursuant to the national emergency declared in
E.O. 13581.
Subpart A of the Regulations clarifies the relation of this part to
other laws and regulations. Subpart B of the Regulations implements the
prohibitions contained in sections 1 and 2 of amended E.O. 13581, as
well as the prohibitions contained in any further Executive orders
issued pursuant to the national emergency declared in E.O. 13581. See,
e.g., Sec. Sec. 590.201 and 590.205. Persons subject to the blocking
provisions of amended E.O. 13581, or any further Executive order issued
pursuant to the national emergency declared in E.O. 13581, are referred
to throughout the Regulations as ``persons whose property and interests
in property are blocked pursuant to Sec. 590.201'' and their names are
published on OFAC's Specially Designated Nationals and Blocked Persons
List (SDN List), which is accessible via OFAC's website. Those names
also are published in the Federal Register as they are added to the SDN
List.
Sections 590.202 and 590.203 of subpart B detail the effect of
transfers of blocked property in violation of the Regulations and set
forth the requirement to hold blocked funds, such as currency, bank
deposits, or liquidated financial obligations, in interest-bearing
blocked accounts. Section 590.204 of subpart B provides that all
expenses incident to the maintenance of blocked tangible property shall
be the responsibility of the owners and operators of such property, and
that such expenses shall not be met from blocked funds, unless
otherwise authorized. The section further provides that blocked
property may, in OFAC's discretion, be sold or liquidated and the net
proceeds placed in a blocked interest-bearing account in the name of
the owner of the property.
Section 590.205 of subpart B prohibits any transaction by a U.S.
person or within the United States that evades or avoids, has the
purpose of evading or avoiding, causes a violation of, or attempts to
violate any of the prohibitions set forth in Sec. 590.201 of the
Regulations, and any conspiracy formed to violate such prohibitions.
Section 590.206 of subpart B details transactions that are exempt
from the prohibitions of the Regulations pursuant to section 203(b)(1)
of IEEPA (50 U.S.C. 1702(b)(1)), which relates to personal
communications.
In subpart C of the Regulations, new definitions are being added to
other key terms used throughout the Regulations. Because these new
definitions were inserted in alphabetical order, the definitions that
were in the prior abbreviated set of regulations have been renumbered.
The definition previously in Sec. 590.316, as incorporated into the
Regulations on July 23, 2019 (84 FR 35307, July 23, 2019), is being
removed because the term is not used in the Regulations.
Similarly, in subpart D, which contains interpretive sections
regarding the Regulations, certain provisions have been renumbered and
others added to those in the prior abbreviated set of regulations.
Section 590.411 of subpart D explains that the property and interests
in property of an entity are blocked if the entity is directly or
indirectly owned, whether individually or in the aggregate, 50 percent
or more by one or more persons whose property and interests in property
are blocked, whether or not the entity itself is incorporated into
OFAC's SDN List.
Transactions otherwise prohibited by the Regulations but found to
be consistent with U.S. policy may be authorized by one of the general
licenses contained in subpart E of the Regulations or by a specific
license issued pursuant to the procedures described in subpart E of 31
CFR part 501. General licenses and statements of licensing policy
relating to this part also may be available through the Transnational
Criminal Organizations sanctions page on OFAC's website: <a href="http://www.treas.gov/ofac">www.treas.gov/ofac</a>.
OFAC is also incorporating several new general licenses into the
Regulations, renumbering existing general licenses, and making
technical edits to certain existing general licenses. Sections 590.506,
590.508, 590.510, and 590.11 authorize, respectively, certain
transactions relating to the investment of certain funds, payments for
legal services from funds originating outside the United States,
official business of the United States Government, and official
activities of certain international organizations and other
international entities. Section 590.506 was renumbered as Sec. 590.507
and Sec. 590.507 was renumbered as Sec. 590.509. In Sec. 590.509,
OFAC has removed the requirement that the receipt of payment for
emergency medical services be specifically licensed.
Subpart F of the Regulations refers to subpart C of part 501 for
recordkeeping and reporting requirements. Subpart G of the Regulations
describes the civil and criminal penalties applicable to violations of
the Regulations, as well as the procedures governing the potential
imposition of a civil monetary penalty or issuance of a Finding of
Violation. Subpart G also refers to appendix A of part 501 for a more
complete description of these procedures.
Subpart H of the Regulations refers to subpart E of part 501 for
applicable provisions relating to administrative procedures and
contains a delegation of
[[Page 3209]]
certain authorities of the Secretary of the Treasury. Subpart I of the
Regulations sets forth a Paperwork Reduction Act notice. Additionally,
OFAC is removing from the authority citation the Hizballah
International Financing Prevention Amendments Act of 2018, Public Law
115-272, 132 Stat. 4144 (50 U.S.C. 1701 note) (HIFPAA), as it is
implemented in other parts of 31 CFR Chapter V.
Public Participation
Because the Regulations involve a foreign affairs function, the
provisions of E.O. 12866 of September 30, 1993, ``Regulatory Planning
and Review'' (58 FR 51735, October 4, 1993), 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 590
Administrative practice and procedure, Banks, banking, Blocking of
assets, Credit, Foreign trade, Penalties, Reporting and recordkeeping
requirements, Transnational Criminal Organizations, Sanctions,
Securities, Services.
0
For the reasons set forth in the preamble, OFAC revises 31 CFR part 590
to read as follows:
PART 590--TRANSNATIONAL CRIMINAL ORGANIZATIONS SANCTIONS
REGULATIONS
Subpart A--Relation of This Part to Other Laws and Regulations
Sec.
590.101 Relation of this part to other laws and regulations.
Subpart B--Prohibitions
590.201 Prohibited transactions.
590.202 Effect of transfers violating the provisions of this part.
590.203 Holding of funds in interest-bearing accounts; investment
and reinvestment.
590.204 Expenses of maintaining blocked tangible property;
liquidation of blocked property.
590.205 Evasions; attempts; causing violations; conspiracies.
590.206 Exempt transactions.
Subpart C--General Definitions
590.300 Applicability of definitions.
590.301 Blocked account; blocked property.
590.302 Effective date.
590.303 Entity.
590.304 Financial, material, or technological support.
590.305 Foreign person.
590.306 [Reserved]
590.307 Interest.
590.308 Licenses; general and specific.
590.309 OFAC.
590.310 Person.
590.311 Property; property interest.
590.312 Significant transnational criminal organization.
590.313 Transfer.
590.314 United States.
590.315 United States person; U.S. person.
590.316 U.S. financial institution.
Subpart D--Interpretations
590.401 Reference to amended sections.
590.402 Effect of amendment.
590.403 Termination and acquisition of an interest in blocked
property.
590.404 Transactions ordinarily incident to a licensed transaction.
590.405 Provision and receipt of services.
590.406 Offshore transactions involving blocked property.
590.407 Payments from blocked accounts to satisfy obligations
prohibited.
590.408 Charitable contributions.
590.409 Credit extended and cards issued by financial institutions
to a person whose property and interests in property are blocked.
590.410 Setoffs prohibited.
590.411 Entities owned by one or more persons whose property and
interests in property are blocked.
Subpart E--Licenses, Authorizations, and Statements of Licensing Policy
590.501 General and specific licensing procedures.
590.502 Effect of license or other authorization.
590.503 Exclusion from licenses.
590.504 Payments and transfers to blocked accounts in U.S. financial
institutions.
590.505 Entries in certain accounts for normal service charges.
590.506 Investment and reinvestment of certain funds.
590.507 Provision of certain legal services.
590.508 Payments for legal services from funds originating outside
the United States.
590.509 Emergency medical services.
590.510 Official business of the United States Government.
590.511 Official business of certain international organizations and
entities.
Subpart F--Reports
590.601 Records and reports.
Subpart G--Penalties and Findings of Violation
590.701 Penalties.
590.702 Pre-Penalty Notice; settlement.
590.703 Penalty imposition.
590.704 Administrative collection; referral to United States
Department of Justice.
590.705 Findings of Violation.
Subpart H--Procedures
590.801 Procedures.
590.802 Delegation of certain authorities of the Secretary of the
Treasury.
Subpart I--Paperwork Reduction Act
590.901 Paperwork Reduction Act notice.
Authority: 3 U.S.C. 301; 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. 13581, 76 FR 44757, 3 CFR, 2011 Comp., p. 260; E.O.
13863, 84 FR 10255, 3 CFR, 2019 Comp., p. 267.
Subpart A--Relation of This Part to Other Laws and Regulations
Sec. 590.101 Relation of this part to other laws and regulations.
This part is separate from, and independent of, the other parts of
this chapter, with the exception of part 501 of this chapter, the
recordkeeping and reporting requirements and license application and
other procedures 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 circumstances 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. No license or authorization contained in or
issued pursuant to this part relieves the involved parties from
complying with any other applicable laws or regulations.
Subpart B--Prohibitions
Sec. 590.201 Prohibited transactions.
(a) All property and interests in property that are in the United
States, that come within the United States, or that are or come within
the possession or control of any U.S. person of the following persons
are blocked and may not be transferred, paid, exported, withdrawn, or
otherwise dealt in:
(1) The persons listed in the Annex to E.O. 13581 of July 24, 2011;
[[Page 3210]]
(2) Any person determined by the Secretary of the Treasury, in
consultation with the Attorney General and the Secretary of State:
(i) To be a foreign person that constitutes a significant
transnational criminal organization;
(ii) To have materially assisted, sponsored, or provided financial,
material, or technological support for, or goods or services to or in
support of, any person whose property and interests in property are
blocked pursuant to paragraph (a) of this section; or
(iii) To be owned or controlled by, or to have acted or purported
to act for or on behalf of, directly or indirectly, any person whose
property and interests in property are blocked pursuant to paragraph
(a) of this section.
(b) The prohibitions in paragraph (a) of this section include
prohibitions on the following transactions:
(1) The making of any contribution or provision of funds, goods, or
services by, to, or for the benefit of any person whose property and
interests in property are blocked pursuant to paragraph (a) of this
section; and
(2) The receipt of any contribution or provision of funds, goods,
or services from any person whose property and interests in property
are blocked pursuant to paragraph (a) of this section.
(c) Unless authorized by this part or by a specific license
expressly referring to this part, any dealing in securities (or
evidence thereof) held within the possession or control of a U.S.
person and either registered or inscribed in the name of, or known to
be held for the benefit of, or issued by, any person whose property and
interests in property are blocked pursuant to paragraph (a) of this
section is prohibited. This prohibition includes the transfer
(including the transfer on the books of any issuer or agent thereof),
disposition, transportation, importation, exportation, or withdrawal
of, or the endorsement or guaranty of signatures on, any securities on
or after the effective date. This prohibition applies irrespective of
the fact that at any time (whether prior to, on, or subsequent to the
effective date) the registered or inscribed owner of any such
securities may have or might appear to have assigned, transferred, or
otherwise disposed of the securities.
(d) The prohibitions in paragraph (a) of this section apply except
to the extent provided by statutes, or in regulations, orders,
directives, or licenses that may be issued pursuant to this part, and
notwithstanding any contract entered into or any license or permit
granted prior to the effective date.
(e) All transactions prohibited pursuant to any Executive order
issued after March 15, 2019 pursuant to the national emergency declared
in E.O. 13581 of July 24, 2011, are prohibited pursuant to this part.
Note 1 to Sec. 590.201. The names of persons listed in, or
designated or identified pursuant to, E.O. 13581; E.O. 13581, as
amended by E.O. 13863 of March 15, 2019 (``amended E.O. 13581''); or
any further Executive orders issued pursuant to the national
emergency declared in E.O. 13581, whose property and interests in
property therefore are blocked pursuant to this section, are
published in the Federal Register and incorporated into OFAC's
Specially Designated Nationals and Blocked Persons List (SDN List)
using the following identifiers: For E.O. 13581 or amended E.O.
13581: ``[TCO]''; and for any further Executive orders issued
pursuant to the national emergency declared in E.O. 13581: Using the
identifier formulation ``[TCO-E.O.[E.O. number pursuant to which the
person's property and interests in property are blocked]].'' The SDN
List is accessible through the following page on OFAC's website:
<a href="http://www.treas.gov/sdn">www.treas.gov/sdn</a>. Additional information pertaining to the SDN List
can be found in appendix A to this chapter. See Sec. 590.411
concerning entities that may not be listed on the SDN List but whose
property and interests in property are nevertheless blocked pursuant
to this section.
Note 2 to Sec. 590.201. The International Emergency Economic
Powers Act (50 U.S.C. 1701-1706), in Section 203 (50 U.S.C. 1702),
authorizes the blocking of property and interests in property of a
person during the pendency of an investigation. The names of persons
whose property and interests in property are blocked pending
investigation pursuant to this section also are published in the
Federal Register and incorporated into the SDN List using the
following identifiers: For E.O. 13581 or amended E.O. 13581: ``[BPI-
TCO]''; and for any further Executive orders issued pursuant to the
national emergency declared in E.O. 13581: Using the identifier
formulation ``[BPI-TCO-[E.O. number pursuant to which the person's
property and interests in property are blocked pending
investigation]].''
Note 3 to Sec. 590.201. Sections 501.806 and 501.807 of this
chapter describe the procedures to be followed by persons seeking,
respectively, the unblocking of funds that they believe were blocked
due to mistaken identity, or administrative reconsideration of their
status as persons whose property and interests in property are
blocked pursuant to this section.
Sec. 590.202 Effect of transfers violating the provisions of this
part.
(a) Any transfer after the effective date that is in violation of
any provision of this part or of any regulation, order, directive,
ruling, instruction, or license issued pursuant to this part, and that
involves any property or interest in property blocked pursuant to Sec.
590.201, is null and void and shall not be the basis for the assertion
or recognition of any interest in or right, remedy, power, or privilege
with respect to such property or interest in property.
(b) No transfer before the effective date shall be the basis for
the assertion or recognition of any right, remedy, power, or privilege
with respect to, or any interest in, any property or interest in
property blocked pursuant to Sec. 590.201, unless the person who holds
or maintains such property, prior to that date, had written notice of
the transfer or by any written evidence had recognized such transfer.
(c) Unless otherwise provided, a license or other authorization
issued by OFAC before, during, or after a transfer shall validate such
transfer or make it enforceable to the same extent that it would be
valid or enforceable but for the provisions of this part and any
regulation, order, directive, ruling, instruction, or license issued
pursuant to this part.
(d) Transfers of property that otherwise would be null and void or
unenforceable by virtue of the provisions of this section shall not be
deemed to be null and void or unenforceable as to any person with whom
such property is or was held or maintained (and as to such person only)
in cases in which such person is able to establish to the satisfaction
of OFAC each of the following:
(1) Such transfer did not represent a willful violation of the
provisions of this part by the person with whom such property is or was
held or maintained (and as to such person only);
(2) The person with whom such property is or was held or maintained
did not have reasonable cause to know or suspect, in view of all the
facts and circumstances known or available to such person, that such
transfer required a license or authorization issued pursuant to this
part and was not so licensed or authorized, or, if a license or
authorization did purport to cover the transfer, that such license or
authorization had been obtained by misrepresentation of a third party
or withholding of material facts or was otherwise fraudulently
obtained; and
(3) The person with whom such property is or was held or maintained
filed with OFAC a report setting forth in full the circumstances
relating to such transfer promptly upon discovery that:
(i) Such transfer was in violation of the provisions of this part
or any regulation, ruling, instruction, license, or other directive or
authorization issued pursuant to this part;
(ii) Such transfer was not licensed or authorized by OFAC; or
[[Page 3211]]
(iii) If a license did purport to cover the transfer, such license
had been obtained by misrepresentation of a third party or withholding
of material facts or was otherwise fraudulently obtained.
(e) The filing of a report in accordance with the provisions of
paragraph (d)(3) of this section shall not be deemed evidence that the
terms of paragraphs (d)(1) and (2) of this section have been satisfied.
(f) Unless licensed pursuant to this part, any attachment,
judgment, decree, lien, execution, garnishment, or other judicial
process is null and void with respect to any property or interest in
property blocked pursuant to Sec. 590.201.
Sec. 590.203 Holding of funds in interest-bearing accounts;
investment and reinvestment.
(a) Except as provided in paragraph (e) or (f) of this section, or
as otherwise directed or authorized by OFAC, any U.S. person holding
funds, such as currency, bank deposits, or liquidated financial
obligations, subject to Sec. 590.201 shall hold or place such funds in
a blocked interest-bearing account located in the United States.
(b)(1) For the purposes of this section, the term blocked interest-
bearing account means a blocked account:
(i) In a federally insured U.S. bank, thrift institution, or credit
union, provided the funds are earning interest at rates that are
commercially reasonable; or
(ii) With a broker or dealer registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.), provided the funds are invested in a money market
fund or in U.S. Treasury bills.
(2) Funds held or placed in a blocked account pursuant to paragraph
(a) of this section may not be invested in instruments the maturity of
which exceeds 180 days.
(c) For the purposes of this section, a rate is commercially
reasonable if it is the rate currently offered to other depositors on
deposits or instruments of comparable size and maturity.
(d) For the purposes of this section, if interest is credited to a
separate blocked account or subaccount, the name of the account party
on each account must be the same.
(e) Blocked funds held in instruments the maturity of which exceeds
180 days at the time the funds become subject to Sec. 590.201 may
continue to be held until maturity in the original instrument, provided
any interest, earnings, or other proceeds derived therefrom are paid
into a blocked interest-bearing account in accordance with paragraph
(a) or (f) of this section.
(f) Blocked funds held in accounts or instruments outside the
United States at the time the funds become subject to Sec. 590.201 may
continue to be held in the same type of accounts or instruments,
provided the funds earn interest at rates that are commercially
reasonable.
(g) This section does not create an affirmative obligation for the
holder of blocked tangible property, such as real or personal property,
or of other blocked property, such as debt or equity securities, to
sell or liquidate such property. However, OFAC may issue licenses
permitting or directing such sales or liquidation in appropriate cases.
(h) Funds blocked pursuant to Sec. 590.201 may not be held,
invested, or reinvested in a manner that provides financial or economic
benefit or access to any person whose property and interests in
property are blocked pursuant to Sec. 590.201, nor may their holder
cooperate in or facilitate the pledging or other attempted use as
collateral of blocked funds or other assets.
Sec. 590.204 Expenses of maintaining blocked tangible property;
liquidation of blocked property.
(a) Except as otherwise authorized, and notwithstanding the
existence of any rights or obligations conferred or imposed by any
international agreement or contract entered into or any license or
permit granted prior to the effective date, all expenses incident to
the maintenance of tangible property blocked pursuant to Sec. 590.201
shall be the responsibility of the owners or operators of such
property, which expenses shall not be met from blocked funds.
(b) Property blocked pursuant to Sec. 590.201 may, in the
discretion of OFAC, be sold or liquidated and the net proceeds placed
in a blocked interest-bearing account in the name of the owner of the
property.
Sec. 590.205 Evasions; attempts; causing violations; conspiracies.
(a) Any transaction on or after the effective date that evades or
avoids, has the purpose of evading or avoiding, causes a violation of,
or attempts to violate any of the prohibitions set forth in this part
is prohibited.
(b) Any conspiracy formed to violate the prohibitions set forth in
this part is prohibited.
Sec. 590.206 Exempt transactions.
The prohibitions contained in this part do not apply to any postal,
telegraphic, telephonic, or other personal communication that does not
involve the transfer of anything of value.
Subpart C--General Definitions
Sec. 590.300 Applicability of definitions.
The definitions in this subpart apply throughout the entire part.
Sec. 590.301 Blocked account; blocked property.
The terms blocked account and blocked property mean any account or
property subject to the prohibitions in Sec. 590.201 held in the name
of a person whose property and interests in property are blocked
pursuant to Sec. 590.201, or in which such person has an interest, and
with respect to which payments, transfers, exportations, withdrawals,
or other dealings may not be made or effected except pursuant to a
license or other authorization from OFAC expressly authorizing such
action.
Note 1 to Sec. 590.301. See Sec. 590.411 concerning the
blocked status of property and interests in property of an entity
that is directly or indirectly owned, whether individually or in the
aggregate, 50 percent or more by one or more persons whose property
and interests in property are blocked pursuant to Sec. 590.201.
Sec. 590.302 Effective date.
(a) The term effective date refers to the effective date of the
applicable prohibitions and directives contained in this part as
follows:
(1) With respect to a person whose property and interests in
property are blocked pursuant to Sec. 590.201(a)(1), 12:01 a.m.
eastern daylight time July 25, 2011; and
(2) With respect to a person whose property and interests in
property are otherwise blocked pursuant to Sec. 590.201, the earlier
of the date of actual or constructive notice that such person's
property and interests in property are blocked.
(b) For the purposes of this section, constructive notice is the
date that a notice of the blocking of the relevant person's property
and interests in property is published in the Federal Register.
Sec. 590.303 Entity.
The term entity means a partnership, association, trust, joint
venture, corporation, group, subgroup, or other organization.
Sec. 590.304 Financial, material, or technological support.
The term financial, material, or technological support, as used in
this part, means any property, tangible or intangible, including
currency, financial
[[Page 3212]]
instruments, securities, or any other transmission of value; weapons or
related materiel; chemical or biological agents; explosives; false
documentation or identification; communications equipment; computers;
electronic or other devices or equipment; technologies; lodging; safe
houses; facilities; vehicles or other means of transportation; or
goods. ``Technologies'' as used in this section means specific
information necessary for the development, production, or use of a
product, including related technical data such as blueprints, plans,
diagrams, models, formulae, tables, engineering designs and
specifications, manuals, or other recorded instructions.
Sec. 590.305 Foreign person.
The term foreign person means any citizen or national of a foreign
state, or any entity organized under the laws of a foreign state or
existing in a foreign state, including any such individual or entity
who is also a United States person.
Sec. 590.306 [Reserved]
Sec. 590.307 Interest.
Except as otherwise provided in this part, the term interest, when
used with respect to property (e.g., ``an interest in property''),
means an interest of any nature whatsoever, direct or indirect.
Sec. 590.308 Licenses; general and specific.
(a) Except as otherwise provided in this part, the term license
means any license or authorization contained in or issued pursuant to
this part.
(b) The term general license means any license or authorization the
terms of which are set forth in subpart E of this part or made
available on OFAC's website: <a href="http://www.treas.gov/ofac">www.treas.gov/ofac</a>.
(c) The term specific license means any license or authorization
issued pursuant to this part but not set forth in subpart E of this
part or made available on OFAC's website: <a href="http://www.treas.gov/ofac">www.treas.gov/ofac</a>.
Note 1 to Sec. 590.306. See Sec. 501.801 of this chapter on
licensing procedures.
Sec. 590.309 OFAC.
The term OFAC means the Department of the Treasury's Office of
Foreign Assets Control.
Sec. 590.310 Person.
The term person means an individual or entity.
Sec. 590.311 Property; property interest.
The terms property and property interest include money, checks,
drafts, bullion, bank deposits, savings accounts, debts, indebtedness,
obligations, notes, guarantees, debentures, stocks, bonds, coupons, any
other financial instruments, bankers acceptances, mortgages, pledges,
liens or other rights in the nature of security, warehouse receipts,
bills of lading, trust receipts, bills of sale, any other evidences of
title, ownership, or indebtedness, letters of credit and any documents
relating to any rights or obligations thereunder, powers of attorney,
goods, wares, merchandise, chattels, stocks on hand, ships, goods on
ships, real estate mortgages, deeds of trust, vendors' sales
agreements, land contracts, leaseholds, ground rents, real estate and
any other interest therein, options, negotiable instruments, trade
acceptances, royalties, book accounts, accounts payable, judgments,
patents, trademarks or copyrights, insurance policies, safe deposit
boxes and their contents, annuities, pooling agreements, services of
any nature whatsoever, contracts of any nature whatsoever, and any
other property, real, personal, or mixed, tangible or intangible, or
interest or interests therein, present, future, or contingent.
Sec. 590.312 Significant transnational criminal organization.
The term significant transnational criminal organization means a
group of persons that includes one or more foreign persons; that
engages in or facilitates an ongoing pattern of serious criminal
activity involving the jurisdictions of at least two foreign states, or
one foreign state and the United States; and that threatens the
national security, foreign policy, or economy of the United States.
Sec. 590.313 Transfer.
The term transfer means any actual or purported act or transaction,
whether or not evidenced by writing, and whether or not done or
performed within the United States, the purpose, intent, or effect of
which is to create, surrender, release, convey, transfer, or alter,
directly or indirectly, any right, remedy, power, privilege, or
interest with respect to any property. Without limitation on the
foregoing, it shall include the making, execution, or delivery of any
assignment, power, conveyance, check, declaration, deed, deed of trust,
power of attorney, power of appointment, bill of sale, mortgage,
receipt, agreement, contract, certificate, gift, sale, affidavit, or
statement; the making of any payment; the setting off of any obligation
or credit; the appointment of any agent, trustee, or fiduciary; the
creation or transfer of any lien; the issuance, docketing, filing, or
levy of or under any judgment, decree, attachment, injunction,
execution, or other judicial or administrative process or order, or the
service of any garnishment; the acquisition of any interest of any
nature whatsoever by reason of a judgment or decree of any foreign
country; the fulfillment of any condition; the exercise of any power of
appointment, power of attorney, or other power; or the acquisition,
disposition, transportation, importation, exportation, or withdrawal of
any security.
Sec. 590.314 United States.
The term United States means the United States, its territories and
possessions, and all areas under the jurisdiction or authority thereof.
Sec. 590.315 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 or any jurisdiction within the United States
(including foreign branches), or any person in the United States.
Sec. 590.316 U.S. financial institution.
The term U.S. financial institution means any U.S. entity
(including its foreign branches) that is engaged in the business of
accepting deposits, making, granting, transferring, holding, or
brokering loans or other extensions of credit, or purchasing or selling
foreign exchange, securities, commodity futures or options, or
procuring purchasers and sellers thereof, as principal or agent. It
includes depository institutions, banks, savings banks, trust
companies, securities brokers and dealers, futures and options brokers
and dealers, forward contract and foreign exchange merchants,
securities and commodities exchanges, clearing corporations, investment
companies, employee benefit plans, and U.S. holding companies, U.S.
affiliates, or U.S. subsidiaries of any of the foregoing. This term
includes those branches, offices, and agencies of foreign financial
institutions that are located in the United States, but not such
institutions' foreign branches, offices, or agencies.
Subpart D--Interpretations
Sec. 590.401 Reference to amended sections.
(a) Reference to any section in this part is a reference to the
same as currently amended, unless the reference includes a specific
date. See 44 U.S.C. 1510.
(b) Reference to any ruling, order, instruction, direction, or
license issued pursuant to this part is a reference to the
[[Page 3213]]
same as currently amended unless otherwise so specified.
Sec. 590.402 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 OFAC 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.
Sec. 590.403 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 a person whose property and interests in property
are blocked pursuant to Sec. 590.201, such property shall no longer be
deemed to be property blocked pursuant to Sec. 590.201, unless there
exists in the property another interest that is blocked pursuant to
Sec. 590.201, 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 a
person whose property and interests in property are blocked pursuant to
Sec. 590.201, such property shall be deemed to be property in which
such person has an interest and therefore blocked.
Sec. 590.404 Transactions ordinarily incident to a licensed
transaction.
(a) Any transaction ordinarily incident to a licensed transaction
and necessary to give effect thereto is also authorized, except:
(1) An ordinarily incident transaction, not explicitly authorized
within the terms of the license, by or with a person whose property and
interests in property are blocked pursuant to Sec. 590.201; or
(2) 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) For example, a license authorizing a person to complete a
securities sale involving Company A, whose property and interests in
property are blocked pursuant to Sec. 590.201, also authorizes other
persons to engage in activities that are ordinarily incident and
necessary to complete the sale, including transactions by the buyer,
broker, transfer agents, and banks, provided that such other persons
are not themselves persons whose property and interests in property are
blocked pursuant to Sec. 590.201.
Sec. 590.405 Provision and receipt of services.
(a) The prohibitions contained in Sec. 590.201 apply to services
performed in the United States or by U.S. persons, wherever located:
(1) On behalf of or for the benefit of any person whose property
and interests in property are blocked pursuant to Sec. 590.201; or
(2) With respect to property interests of any person whose property
and interests in property are blocked pursuant to Sec. 590.201.
(b) The prohibitions on transactions contained in Sec. 590.201
apply to services received in the United States or by U.S. persons,
wherever located, where the service is performed by or at the direction
of, any person whose property and interests in property are blocked
pursuant to Sec. 590.201.
(c) For example, U.S. persons may not, except as authorized by or
pursuant to this part, provide legal, accounting, financial, brokering,
freight forwarding, transportation, public relations, or other services
to a person whose property and interests in property are blocked
pursuant to Sec. 590.201, or negotiate with or enter into contracts
signed by a person whose property and interests in property are blocked
pursuant to Sec. 590.201.
Note 1 to Sec. 590.405. See Sec. Sec. 590.507 and 590.509 for
general licenses authorizing the provision of certain legal and
emergency medical services.
Sec. 590.406 Offshore transactions involving blocked property.
The prohibitions in Sec. 590.201 on transactions or dealings
involving blocked property, as defined in Sec. 590.301, apply to
transactions by any U.S. person in a location outside the United
States.
Sec. 590.407 Payments from blocked accounts to satisfy obligations
prohibited.
Pursuant to Sec. 590.201, 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 1 to Sec. 590.407. See also Sec. 590.502(e), 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.
Sec. 590.408 Charitable contributions.
Unless specifically authorized by OFAC 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, a person whose property and interests in property are
blocked pursuant to Sec. 590.201. For the purposes of this part, a
contribution is made by, to, or for the benefit of, or received from, a
person whose property and interests in property are blocked pursuant to
Sec. 590.201 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 such a person.
Sec. 590.409 Credit extended and cards issued by financial
institutions to a person whose property and interests in property are
blocked.
The prohibition in Sec. 590.201 on dealing in property subject to
that section prohibits U.S. financial institutions from performing
under any existing credit agreements, including charge cards, debit
cards, or other credit facilities issued by a financial institution to
a person whose property and interests in property are blocked pursuant
to Sec. 590.201.
Sec. 590.410 Setoffs prohibited.
A setoff against blocked property (including a blocked account),
whether by a U.S. financial institution or other U.S. person, is a
prohibited transfer under Sec. 590.201 if effected after the effective
date.
Sec. 590.411 Entities owned by one or more persons whose property and
interests in property are blocked.
Persons whose property and interests in property are blocked
pursuant to Sec. 590.201 have an interest in all property and
interests in property of an entity in which such persons directly or
indirectly own, whether individually or in the aggregate, a 50 percent
or greater
[[Page 3214]]
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 Sec. 590.201,
regardless of whether the name of the entity is incorporated into
OFAC's Specially Designated Nationals and Blocked Persons List (SDN
List).
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
Sec. 590.501 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. General
licenses and statements of licensing policy relating to this part also
may be available through the Transnational Criminal Organizations
sanctions page on OFAC's website: <a href="http://www.treas.gov/ofac">www.treas.gov/ofac</a>.
Sec. 590.502 Effect of license or other authorization.
(a) No license or other authorization contained in this part, or
otherwise issued by OFAC, authorizes or validates any transaction
effected prior to the issuance of such license or other authorization,
unless specifically provided in such license or authorization.
(b) No regulation, ruling, instruction, or license authorizes any
transaction prohibited under this part unless the regulation, ruling,
instruction, or license is issued by OFAC and specifically refers to
this part. No regulation, ruling, instruction, or license referring to
this part shall be deemed to authorize any transaction prohibited by
any other part of this chapter unless the regulation, ruling,
instruction, or license specifically refers to such part.
(c) Any regulation, ruling, instruction, or license authorizing any
transaction prohibited under this part has the effect of removing a
prohibition contained in this part from the transaction, 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 in, or with respect to, any property that would not otherwise
exist under ordinary principles of law.
(d) Nothing contained in this part shall be construed to supersede
the requirements established under any other provision of law or to
relieve a person from any requirement to obtain a license or other
authorization from another department or agency of the U.S. Government
in compliance with applicable laws and regulations subject to the
jurisdiction of that department or agency. For example, exports of
goods, services, or technical data that are not prohibited by this part
or that do not require a license by OFAC nevertheless may require
authorization by the U.S. Department of Commerce, the U.S. Department
of State, or other agencies of the U.S. Government.
(e) 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.
(f) Any payment relating to a transaction authorized in or pursuant
to this part that is routed through the U.S. financial system should
reference the relevant OFAC general or specific license authorizing the
payment to avoid the blocking or rejection of the transfer.
Sec. 590.503 Exclusion from licenses.
OFAC reserves the right to exclude any person, property,
transaction, or class thereof from the operation of any license or from
the privileges conferred by any license. OFAC also reserves the right
to restrict the applicability of any license to particular persons,
property, transactions, or classes thereof. Such actions are binding
upon actual or constructive notice of the exclusions or restrictions.
Sec. 590.504 Payments and transfers to blocked accounts in U.S.
financial institutions.
Any payment of funds or transfer of credit in which a person whose
property and interests in property are blocked pursuant to Sec.
590.201 has any interest that comes within the possession or control of
a U.S. financial institution must be blocked in an account on the books
of that financial institution. A transfer of funds or credit by a U.S.
financial institution between blocked accounts in its branches or
offices is authorized, provided that no transfer is made from an
account within the United States to an account held outside the United
States, and further provided that a transfer from a blocked account may
be made only to another blocked account held in the same name.
Note 1 to Sec. 590.504. See Sec. 501.603 of this chapter for
mandatory reporting requirements regarding financial transfers. See
also Sec. 590.203 concerning the obligation to hold blocked funds
in interest-bearing accounts.
Sec. 590.505 Entries in certain accounts for normal service charges.
(a) A U.S. financial institution is authorized to debit any blocked
account held at that financial institution in payment or reimbursement
for normal service charges owed it by the owner of that blocked
account.
(b) As used in this section, the term normal service charges shall
include charges in payment or reimbursement for interest due; cable,
telegraph, internet, or telephone charges; postage costs; custody fees;
small adjustment charges to correct bookkeeping errors; and, but not by
way of limitation, minimum balance charges, notary and protest fees,
and charges for reference books, photocopies, credit reports,
transcripts of statements, registered mail, insurance, stationery and
supplies, and other similar items.
Sec. 590.506 Investment and reinvestment of certain funds.
Subject to the requirements of Sec. 590.203, U.S. financial
institutions are authorized to invest and reinvest assets blocked
pursuant to Sec. 590.201, subject to the following conditions:
(a) The assets representing such investments and reinvestments are
credited to a blocked account or subaccount that is held in the same
name at the same U.S. financial institution, or within the possession
or control of a U.S. person, but funds shall not be transferred outside
the United States for this purpose;
(b) The proceeds of such investments and reinvestments shall not be
credited to a blocked account or subaccount under any name or
designation that differs from the name or designation of the specific
blocked account or subaccount in which such funds or securities were
held; and
(c) No immediate financial or economic benefit accrues (e.g.,
through pledging or other use) to a person whose property and interests
in property are blocked pursuant to Sec. 590.201.
Sec. 590.507 Provision of certain legal services.
(a) The provision of the following legal services to or on behalf
of persons whose property and interests in property are blocked
pursuant to Sec. 590.201 is authorized, provided that any receipt of
payment of professional fees and reimbursement of incurred expenses
must be authorized pursuant to Sec. 590.508, which authorizes certain
payments for legal services from funds originating outside the United
States; via specific license; or otherwise pursuant to this part:
(1) Provision of legal advice and counseling on the requirements of
and
[[Page 3215]]
compliance with the laws of the United States or any jurisdiction
within the United States, provided that such advice and counseling are
not provided to facilitate transactions in violation of this part;
(2) Representation of persons named as defendants in or otherwise
made parties to legal, arbitration, or administrative proceedings
before any U.S. federal, state, or local court or agency;
(3) Initiation and conduct of legal, arbitration, or administrative
proceedings before any U.S. federal, state, or local court or agency;
(4) Representation of persons before any U.S. federal, state, or
local court or agency with respect to the imposition, administration,
or enforcement of U.S. sanctions against such persons; and
(5) Provision of legal services in any other context in which
prevailing U.S. law requires access to legal counsel at public expense.
(b) The provision of any other legal services to or on behalf of
persons whose property and interests in property are blocked pursuant
to Sec. 590.201, not otherwise authorized in this part, requires the
issuance of a specific license.
(c) U.S. persons do not need to obtain specific authorization to
provide related services, such as making filings and providing other
administrative services, that are ordinarily incident to the provision
of services authorized by paragraph (a) of this section. Additionally,
U.S. persons who provide services authorized by paragraph (a) of this
section do not need to obtain specific authorization to contract for
related services that are ordinarily incident to the provision of those
legal services, such as those provided by private investigators or
expert witnesses, or to pay for such services. See Sec. 590.404.
(d) Entry into a settlement agreement or the enforcement of any
lien, judgment, arbitral award, decree, or other order through
execution, garnishment, or other judicial process purporting to
transfer or otherwise alter or affect property or interests in property
blocked pursuant to Sec. 590.201 is prohibited unless licensed
pursuant to this part.
Note 1 to Sec. 590.507. Pursuant to part 501, subpart E, of
this chapter, U.S. persons seeking administrative reconsideration or
judicial review of their designation or the blocking of their
property and interests in property may apply for a specific license
from OFAC to authorize the release of certain blocked funds for the
payment of professional fees and reimbursement of incurred expenses
for the provision of such legal services where alternative funding
sources are not available.
Sec. 590.508 Payments for legal services from funds originating
outside the United States.
(a) Professional fees and incurred expenses. (1) Receipt of payment
of professional fees and reimbursement of incurred expenses for the
provision of legal services authorized pursuant to Sec. 590.507(a) to
or on behalf of any person whose property and interests in property are
blocked pursuant to Sec. 590.201, is authorized from funds originating
outside the United States, provided that the funds do not originate
from:
(i) A source within the United States;
(ii) Any source, wherever located, within the possession or control
of a U.S. person; or
(iii) Any individual or entity, other than the person on whose
behalf the legal services authorized pursuant to Sec. 590.507(a) are
to be provided, whose property and interests in property are blocked
pursuant to any part of this chapter or any Executive order or statute.
(2) Nothing in paragraph (a) of this section authorizes payments
for legal services using funds in which any other person whose property
and interests in property are blocked pursuant to Sec. 590.201, any
other part of this chapter, or any Executive order or statute has an
interest.
(b) Reports. (1) U.S. persons who receive payments pursuant to
paragraph (a) of this section must submit annual reports no later than
30 days following the end of the calendar year during which the
payments were received providing information on the funds received.
Such reports shall specify:
(i) The individual or entity from whom the funds originated and the
amount of funds received; and
(ii) If applicable:
(A) The names of any individuals or entities providing related
services to the U.S. person receiving payment in connection with
authorized legal services, such as private investigators or expert
witnesses;
(B) A general description of the services provided; and
(C) The amount of funds paid in connection with such services.
(2) The reports, which must reference this section, are to be
submitted to OFAC using one of the following methods:
(i) Email (preferred method): <a href="/cdn-cgi/l/email-protection#4b040d0a08192e3b24393f0b3f392e2a383e3932652c243d"><span class="__cf_email__" data-cfemail="85cac3c4c6d7e0f5eaf7f1c5f1f7e0e4f6f0f7fcabe2eaf3">[email protected]</span></a>; or
(ii) U.S. mail: OFAC Regulations Reports, Office of Foreign Assets
Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW,
Freedman's Bank Building, Washington, DC 20220.
Sec. 590.509 Emergency medical services.
The provision and receipt of nonscheduled emergency medical
services that are prohibited by this part are authorized.
Sec. 590.510 Official business of the United States Government.
All transactions prohibited by this part that are for the conduct
of the official business of the United States Government by employees,
grantees, or contractors thereof are authorized.
Sec. 590.511 Official business of certain international organizations
and entities.
All transactions prohibited by this part that are for the conduct
of the official business of the following entities by employees,
grantees, or contractors thereof are authorized:
(a) The United Nations, including its Programmes, Funds, and Other
Entities and Bodies, as well as its Specialized Agencies and Related
Organizations;
(b) The International Centre for Settlement of Investment Disputes
(ICSID) and the Multilateral Investment Guarantee Agency (MIGA);
(c) The African Development Bank Group, the Asian Development Bank,
the European Bank for Reconstruction and Development, and the Inter-
American Development Bank Group (IDB Group), including any fund entity
administered or established by any of the foregoing; and
(d) The International Committee of the Red Cross and the
International Federation of Red Cross and Red Crescent Societies.
Subpart F--Reports
Sec. 590.601 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 and Findings of Violation
Sec. 590.701 Penalties.
(a) Section 206 of the International Emergency Economic Powers Act
(50 U.S.C. 1705) (IEEPA) is applicable to violations of the provisions
of any license, ruling, regulation, order, directive, or instruction
issued by or pursuant to the direction or authorization of the
Secretary of the
[[Page 3216]]
Treasury pursuant to this part or otherwise under IEEPA.
(1) A civil penalty not to exceed the amount set forth in section
206 of IEEPA 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 IEEPA.
(2) IEEPA provides for a maximum civil penalty not to exceed the
greater of $311,562 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.
(3) A person who willfully commits, willfully attempts to commit,
willfully conspires to commit, or aids or abets in the commission of a
violation of any license, order, regulation, or prohibition may, upon
conviction, be fined not more than $1,000,000, or if a natural person,
be imprisoned for not more than 20 years, or both.
(b)(1) The civil penalties provided in IEEPA 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 IEEPA are subject to
adjustment pursuant to 18 U.S.C. 3571.
(c) Pursuant to 18 U.S.C. 1001, whoever, in any matter within the
jurisdiction of the executive, legislative, or judicial branch of the
Government of the United States, knowingly and willfully falsifies,
conceals, or covers up by any trick, scheme, or device a material fact;
or makes any materially false, fictitious, or fraudulent statement or
representation; or makes or uses any false writing or document knowing
the same to contain any materially false, fictitious, or fraudulent
statement or entry shall be fined under title 18, United States Code,
imprisoned, or both.
(d) Violations of this part may also be subject to other applicable
laws.
Sec. 590.702 Pre-Penalty Notice; settlement.
(a) When required. If OFAC has reason 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, directive, 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 (50 U.S.C. 1701 et
seq.) and determines that a civil monetary penalty is warranted, OFAC
will issue a Pre-Penalty Notice informing the alleged violator of the
agency's intent to impose a monetary penalty. A Pre-Penalty Notice
shall be in writing. The Pre-Penalty Notice may be issued whether or
not another agency has taken any action with respect to the matter. For
a description of the contents of a Pre-Penalty Notice, see appendix A
to part 501 of this chapter.
(b) Response--(1) Right to respond. An alleged violator has the
right to respond to a Pre-Penalty Notice by making a written
presentation to OFAC. For a description of the information that should
be included in such a response, see appendix A to part 501 of this
chapter.
(2) Deadline for response. A response to a Pre-Penalty Notice must
be made within 30 days as set forth in paragraphs (b)(2)(i) and (ii) of
this section. The failure to submit a response within 30 days shall be
deemed to be a waiver of the right to respond.
(i) Computation of time for response. A response to a Pre-Penalty
Notice must be postmarked or date-stamped by the U.S. Postal Service
(or foreign postal service, if mailed abroad) or courier service
provider (if transmitted to OFAC by courier), or dated if sent by
email, on or before the 30th day after the postmark date on the
envelope in which the Pre-Penalty Notice was mailed or date the Pre-
Penalty Notice was emailed. If the Pre-Penalty Notice was personally
delivered by a non-U.S. Postal Service agent authorized by OFAC, a
response must be postmarked or date-stamped on or before the 30th day
after the date of delivery.
(ii) Extensions of time for response. If a due date falls on a
federal holiday or weekend, that due date is extended to include the
following business day. Any other extensions of time will be granted,
at the discretion of OFAC, only upon specific request to OFAC.
(3) Form and method of response. A response to a Pre-Penalty Notice
need not be in any particular form, but it must be typewritten and
signed by the alleged violator or a representative thereof (electronic
signature is acceptable), contain information sufficient to indicate
that it is in response to the Pre-Penalty Notice, and include the OFAC
identification number listed on the Pre-Penalty Notice. The response
must be sent to OFAC's Office of Compliance and Enforcement by mail or
courier or email and must be postmarked or date-stamped in accordance
with paragraph (b)(2) of this section.
(c) Settlement. Settlement discussion may be initiated by OFAC, the
alleged violator, or the alleged violator's authorized representative.
For a description of practices with respect to settlement, see appendix
A to part 501 of this chapter.
(d) Guidelines. Guidelines for the imposition or settlement of
civil penalties by OFAC are contained in appendix A to part 501 of this
chapter.
(e) Representation. A representative of the alleged violator may
act on behalf of the alleged violator, but any oral communication with
OFAC prior to a written submission regarding the specific allegations
contained in the Pre-Penalty Notice must be preceded by a written
letter of representation, unless the Pre-Penalty Notice was served upon
the alleged violator in care of the representative.
Sec. 590.703 Penalty imposition.
If, after considering any written response to the Pre-Penalty
Notice and any relevant facts, OFAC determines that there was a
violation by the alleged violator named in the Pre-Penalty Notice and
that a civil monetary penalty is appropriate, OFAC may issue a Penalty
Notice to the violator containing a determination of the violation and
the imposition of the monetary penalty. For additional details
concerning issuance of a Penalty Notice, see appendix A to part 501 of
this chapter. The issuance of the Penalty Notice shall constitute final
agency action. The violator has the right to seek judicial review of
that final agency action in federal district court.
Sec. 590.704 Administrative collection; referral to United States
Department of Justice.
In the event that the violator does not pay the penalty imposed
pursuant to this part or make payment arrangements acceptable to OFAC,
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.
Sec. 590.705 Findings of Violation.
(a) When issued. (1) OFAC may issue an initial Finding of Violation
that identifies a violation if OFAC:
(i) Determines that there has occurred a violation of any provision
of this part, or a violation of the provisions of any license, ruling,
regulation, order, directive, 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 (50 U.S.C. 1701 et seq.);
(ii) Considers it important to document the occurrence of a
violation; and
[[Page 3217]]
(iii) Based on the Guidelines contained in appendix A to part 501
of this chapter, concludes that an administrative response is warranted
but that a civil monetary penalty is not the most appropriate response.
(2) An initial Finding of Violation shall be in writing and may be
issued whether or not another agency has taken any action with respect
to the matter. For additional details concerning issuance of a Finding
of Violation, see appendix A to part 501 of this chapter.
(b) Response--(1) Right to respond. An alleged violator has the
right to contest an initial Finding of Violation by providing a written
response to OFAC.
(2) Deadline for response; Default determination. A response to an
initial Finding of Violation must be made within 30 days as set forth
in paragraphs (b)(2)(i) and (ii) of this section. The failure to submit
a response within 30 days shall be deemed to be a waiver of the right
to respond, and the initial Finding of Violation will become final and
will constitute final agency action. The violator has the right to seek
judicial review of that final agency action in federal district court.
(i) Computation of time for response. A response to an initial
Finding of Violation must be postmarked or date-stamped by the U.S.
Postal Service (or foreign postal service, if mailed abroad) or courier
service provider (if transmitted to OFAC by courier), or dated if sent
by email, on or before the 30th day after the postmark date on the
envelope in which the initial Finding of Violation was served or date
the Finding of Violation was sent by email. If the initial Finding of
Violation was personally delivered by a non-U.S. Postal Service agent
authorized by OFAC, a response must be postmarked or date-stamped on or
before the 30th day after the date of delivery.
(ii) Extensions of time for response. If a due date falls on a
federal holiday or weekend, that due date is extended to include the
following business day. Any other extensions of time will be granted,
at the discretion of OFAC, only upon specific request to OFAC.
(3) Form and method of response. A response to an initial Finding
of Violation need not be in any particular form, but it must be
typewritten and signed by the alleged violator or a representative
thereof (electronic signature is acceptable), contain information
sufficient to indicate that it is in response to the initial Finding of
Violation, and include the OFAC identification number listed on the
initial Finding of Violation. The response must be sent to OFAC's
Office of Compliance and Enforcement by mail or courier or email and
must be postmarked or date-stamped in accordance with paragraph (b)(2)
of this section.
(4) Information that should be included in response. Any response
should set forth in detail why the alleged violator either believes
that a violation of the regulations did not occur and/or why a Finding
of Violation is otherwise unwarranted under the circumstances, with
reference to the General Factors Affecting Administrative Action set
forth in the Guidelines contained in appendix A to part 501 of this
chapter. The response should include all documentary or other evidence
available to the alleged violator that supports the arguments set forth
in the response. OFAC will consider all relevant materials submitted in
the response.
(c) Determination--(1) Determination that a Finding of Violation is
warranted. If, after considering the response, OFAC determines that a
final Finding of Violation should be issued, OFAC will issue a final
Finding of Violation that will inform the violator of its decision. A
final Finding of Violation shall constitute final agency action. The
violator has the right to seek judicial review of that final agency
action in federal district court.
(2) Determination that a Finding of Violation is not warranted. If,
after considering the response, OFAC determines a Finding of Violation
is not warranted, then OFAC will inform the alleged violator of its
decision not to issue a final Finding of Violation.
Note 1 to paragraph (c)(2). A determination by OFAC that a
final Finding of Violation is not warranted does not preclude OFAC
from pursuing other enforcement actions consistent with the
Guidelines contained in appendix A to part 501 of this chapter.
(d) Representation. A representative of the alleged violator may
act on behalf of the alleged violator, but any oral communication with
OFAC prior to a written submission regarding the specific alleged
violations contained in the initial Finding of Violation must be
preceded by a written letter of representation, unless the initial
Finding of Violation was served upon the alleged violator in care of
the representative.
Subpart H--Procedures
Sec. 590.801 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.
Sec. 590.802 Delegation of certain authorities of the Secretary of
the Treasury.
Any action that the Secretary of the Treasury is authorized to take
pursuant to E.O. 13581 of July 24, 2011, as amended by E.O. 13863 of
March 15, 2019, and any further Executive orders relating to the
national emergency declared in E.O. 13581, may be taken by the Director
of OFAC or by any other person to whom the Secretary of the Treasury
has delegated authority so to act.
Subpart I--Paperwork Reduction Act
Sec. 590.901 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, and other procedures, see Sec. 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.
Andrea M. Gacki,
Director, Office of Foreign Assets Control.
[FR Doc. 2022-01072 Filed 1-20-22; 8:45 am]
BILLING CODE 4810-AL-P
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</html>Indexed from Federal Register on January 21, 2022.
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