[Federal Register: April 13, 2009 (Volume 74, Number 69)]
[Rules and Regulations]
[Page 16771-16781]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ap09-6]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 544
Weapons of Mass Destruction Proliferators 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 adding a new part to the Code of Federal
Regulations to carry out the purposes of Executive Order 13382 of June
28, 2005, ``Blocking Property of Weapons of Mass Destruction
Proliferators and Their Supporters.''
DATES: Effective Date: April 13, 2009.
FOR FURTHER INFORMATION CONTACT: Assistant Director for Compliance,
Outreach & Implementation, tel.: 202/622-2490, Assistant Director for
Licensing, tel.: 202/622-2480, Assistant Director for Policy, tel.:
202/622-4855, Office of Foreign Assets Control, or Chief Counsel
(Foreign Assets Control), tel.: 202/622-2410, Office of the General
Counsel, Department of the Treasury (not toll free numbers).
SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability
This document and additional information concerning OFAC are
available from OFAC's Web site (http://www.treas.gov/ofac) or via
facsimile through a 24-hour fax-on demand service, tel.: 202/622-0077.
[[Page 16772]]
Background
On June 28, 2005, the President, invoking the authority of, inter
alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-
1706) (``IEEPA''), issued Executive Order 13382 (70 FR 38567, July 1,
2005) (``E.O. 13382''), effective at 12:01 a.m. eastern daylight time
on June 29, 2005. In E.O. 13382, the President took additional steps
with respect to the national emergency described and declared in
Executive Order 12938 of November 14, 1994, regarding the proliferation
of weapons of mass destruction and the means of delivering them.
Section 1 of E.O. 13382 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 United States persons, of: (1) The persons
listed in an Annex to E.O. 13382; (2) any foreign person determined by
the Secretary of State, in consultation with the Secretary of the
Treasury, the Attorney General, and other relevant agencies, to have
engaged, or attempted to engage, in activities or transactions that
have materially contributed to, or pose a risk of materially
contributing to, the proliferation of weapons of mass destruction or
their means of delivery (including missiles capable of delivering such
weapons), including any efforts to manufacture, acquire, possess,
develop, transport, transfer or use such items, by any person or
foreign country of proliferation concern; (3) any person determined by
the Secretary of the Treasury, in consultation with the Secretary of
State, the Attorney General, and other relevant agencies, to have
provided, or attempted to provide, financial, material, technological
or other support for, or goods or services in support of, any activity
or transaction described in clause (2) above, or any person whose
property and interests in property are blocked pursuant to E.O. 13382;
and (4) any person determined by the Secretary of the Treasury, in
consultation with the Secretary of State, the Attorney General, and
other relevant agencies, to be owned or controlled by, or acting or
purporting to act for or on behalf of, directly or indirectly, any
person whose property and interests in property are blocked pursuant to
E.O. 13382.
Section 1 of E.O. 13382 further provides that the prohibition on
any transaction or dealing by a United States person or within the
United States in blocked property or interests in property includes,
but is not limited to, 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.
13382, and the receipt of any contribution or provision of funds,
goods, or services from any such person. Section 1 of E.O. 13382
further prohibits any transaction by a United States person or within
the United States that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate any of the prohibitions set forth
in E.O. 13382, as well as any conspiracy formed to violate such
prohibitions.
In Section 3 of E.O. 13382, the President determined that the
making of donations of certain articles, such as food, clothing, and
medicine intended 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. 13382 would seriously impair his ability to deal with
the national emergency declared in Executive Order 12938, and the
President therefore prohibited such donations. Accordingly, the
donation of such items is prohibited unless authorized by OFAC.
Section 6 of E.O. 13382 authorizes the Secretary of the Treasury,
in consultation with the Secretary of State, to take such actions,
including the promulgation of rules and regulations, as may be
necessary to carry out the purposes of E.O. 13382. In furtherance of
those purposes, OFAC is promulgating the Weapons of Mass Destruction
Proliferators Sanctions Regulations, 31 CFR part 544 (the
``Regulations'').
Subpart A of the Regulations, which discusses the relation of the
Regulations to other economic sanctions programs, includes a Note to
Sec. 544.101 clarifying that the sanctions implemented pursuant to the
Weapons of Mass Destruction Trade Control Regulations set forth in 31
CFR part 539 are separate and distinct from the sanctions implemented
pursuant to these Regulations, even though both programs are based on
the same declaration of national emergency in Executive Order 12938 of
November 14, 1994. Accordingly, a ``designated foreign person'' whose
goods, technology, or services are prohibited from being imported into
the United States under the Weapons of Mass Destruction Trade Control
Regulations is not necessarily a person whose property and interests in
property are blocked pursuant to these Regulations. Consequently, the
property and interests in property of a ``designated foreign person''
under the Weapons of Mass Destruction Trade Control Regulations are not
necessarily blocked by these Regulations, unless the ``designated
foreign person'' has separately become a person whose property and
interests in property are blocked pursuant to these Regulations.
However, the importation into the United States of goods, technology,
or services (other than information or informational materials)
produced or provided by a ``designated foreign person'' under the
Weapons of Mass Destruction Trade Control Regulations remains
prohibited. To help the public distinguish between these two programs,
persons designated by the Secretary of State under the Weapons of Mass
Destruction Trade Control Regulations are listed in a separate appendix
to part 539 and are not listed on OFAC's Specially Designated Nationals
and Blocked Persons List (``SDN list''), which is accessible via OFAC's
Web site and can be found at Appendix A to 31 CFR chapter V. Persons
whose property and interests in property are blocked under these
Regulations are listed on OFAC's SDN list with the identifier
``[NPWMD].''
Subpart B of the Regulations implements the prohibitions contained
in Section 1 of E.O. 13382. See, e.g., Sec. Sec. 544.201 and 544.205.
Persons identified in the Annex to E.O. 13382, designated by the
Secretary of State or the Secretary of the Treasury pursuant to E.O.
13382, or otherwise subject to the blocking provisions of E.O. 13382
are referred to throughout the Regulations as ``persons whose property
and interests in property are blocked pursuant to Sec. 544.201(a).''
The names of persons listed in or designated pursuant to E.O. 13382 are
or will be published on OFAC's SDN list. Those names also have been or
will be published in the Federal Register.
Sections 544.202 and 544.203 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, and liquidated financial obligations, in interest-bearing
blocked accounts. Section 544.204 of subpart B provides that all
expenses incident to the maintenance of blocked physical property shall
be the responsibility of the owners or 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.
[[Page 16773]]
Section 544.205 implements the prohibitions of E.O. 13382 on any
transaction by a United States person or within the United States that
evades or avoids, has the purpose of evading or avoiding, or attempts
to violate any of the prohibitions set forth in E.O. 13382, and on any
conspiracy formed to violate such prohibitions.
Section 544.206 of subpart B details transactions that are exempt
from the prohibitions of part 544 pursuant to sections 203(b)(1), (3),
and (4) of IEEPA (50 U.S.C. 1702(b)(1), (3), and (4)). These exemptions
relate to personal communications, the importation and exportation of
information or informational materials, and transactions ordinarily
incident to travel. The President determined in Section 3 of E.O. 13382
that donations of the type of articles specified in Sec. 203(b)(2) of
IEEPA (50 U.S.C. 1702(b)(2)), i.e., articles such as food, clothing,
and medicine intended to relieve human suffering, by, to, or for the
benefit of any person whose property and interests in property are
blocked would seriously impair the President's ability to deal with the
declared national emergency. Accordingly, such donations are not
exempted from these Regulations and are prohibited, unless authorized
by OFAC.
Subpart C of part 544 defines key terms used throughout the
Regulations, and subpart D sets forth interpretive sections regarding
the general prohibitions contained in subpart B. Section 544.411 sets
out the rule that the property and interests in property of an entity
are blocked if the entity is 50 percent or more owned by a person whose
property and interests in property are blocked, whether or not the
entity itself is named in the Annex to E.O. 13382 or designated by the
Secretary of State or OFAC.
Transactions otherwise prohibited under part 544 but found to be
consistent with U.S. policy may be authorized by one of the general
licenses contained in subpart E or by a specific license issued
pursuant to the procedures described in subpart E of part 501 of 31 CFR
chapter V. In addition to the general licenses, subpart E of part 544
also contains certain statements of licensing policy.
Subpart F of part 544 refers to subpart C of part 501 for
applicable recordkeeping and reporting requirements. Subpart G
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. Subpart G also refers to
Appendix A of part 501 for a more complete description of these
procedures.
Subpart H of part 544 refers to subpart E of part 501 for
applicable provisions relating to administrative procedures and
memorializes a delegation of authority by the Secretary of the
Treasury. Subpart I of the Regulations sets forth a Paperwork Reduction
Act notice.
Public Participation
Because the Regulations involve a foreign affairs function, the
provisions of Executive Order 12866 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 544
Administrative practice and procedure, Banks, Banking, Blocking of
assets, Credit, Foreign trade, Penalties, Proliferation, Reporting and
recordkeeping requirements, Securities, Services, Weapons of mass
destruction.
0
For the reasons set forth in the preamble, the Department of the
Treasury's Office of Foreign Assets Control adds part 544 to 31 CFR
chapter V to read as follows:
PART 544--WEAPONS OF MASS DESTRUCTION PROLIFERATORS SANCTIONS
REGULATIONS
Subpart A--Relation of This Part to Other Laws and Regulations
Sec.
544.101 Relation of this part to other laws and regulations.
Subpart B--Prohibitions
544.201 Prohibited transactions involving blocked property.
544.202 Effect of transfers violating the provisions of this part.
544.203 Holding of funds in interest-bearing accounts; investment
and reinvestment.
544.204 Expenses of maintaining blocked physical property;
liquidation of blocked property.
544.205 Evasions; attempts; conspiracies.
544.206 Exempt transactions.
Subpart C--General Definitions
544.301 Blocked account; blocked property.
544.302 Effective date.
544.303 Entity.
544.304 Information or informational materials.
544.305 Interest.
544.306 Licenses; general and specific.
544.307 Person.
544.308 Property; property interest.
544.309 Transfer.
544.310 United States.
544.311 U.S. financial institution.
544.312 United States person; U.S. person.
Subpart D--Interpretations
544.401 Reference to amended sections.
544.402 Effect of amendment.
544.403 Termination and acquisition of an interest in blocked
property.
544.404 Transactions ordinarily incident to a licensed transaction.
544.405 Provision of services.
544.406 Offshore transactions.
544.407 Payments from blocked accounts to satisfy obligations
prohibited.
544.408 Charitable contributions.
544.409 Credit extended and cards issued by U.S. financial
institutions.
544.410 Setoffs prohibited.
544.411 Entities owned by a person whose property and interests in
property are blocked.
Subpart E--Licenses, Authorizations and Statements of Licensing Policy
544.501 General and specific licensing procedures.
544.502 Effect of license or authorization.
544.503 Exclusion from licenses.
544.504 Payments and transfers to blocked accounts in U.S. financial
institutions.
544.505 Entries in certain accounts for normal service charges
authorized.
544.506 Investment and reinvestment of certain funds.
544.507 Provision of certain legal services authorized.
544.508 Authorization of emergency medical services.
Subpart F--Reports
544.601 Records and reports.
Subpart G--Penalties
544.701 Penalties.
544.702 Pre-Penalty Notice; settlement.
544.703 Penalty imposition.
544.704 Administrative collection; referral to United States
Department of Justice.
Subpart H--Procedures
544.801 Procedures.
544.802 Delegation by the Secretary of the Treasury.
Subpart I--Paperwork Reduction Act
544.901 Paperwork Reduction Act notice.
[[Page 16774]]
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651,
1701-1706; Public Law 101-410, 104 Stat. 890 (28 U.S.C. 2461 note);
Public Law 110-96, 121 Stat. 1011; E.O. 12938, 59 FR 59099, 3 CFR,
1994 Comp., p. 950; E.O. 13094, 63 FR 40803, 3 CFR, 1998 Comp., p.
200; E.O. 13382, 70 FR 38567, 3 CFR, 2005 Comp., p. 170.
Subpart A--Relation of This Part to Other Laws and Regulations
Sec. 544.101 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.
Note to Sec. 544.101: The sanctions implemented pursuant to
the Weapons of Mass Destruction Trade Control Regulations set forth
in part 539 of this chapter are separate and distinct from the
sanctions implemented pursuant to this part, even though both
programs have been imposed pursuant to the same declaration of
national emergency in Executive Order 12938 of November 14, 1994.
Accordingly, a ``designated foreign person'' whose goods,
technology, or services are prohibited from being imported into the
United States under part 539 is not necessarily a person whose
property and interests in property are blocked pursuant to Sec.
544.201(a). Consequently, the property and interests in property of
a ``designated foreign person'' under part 539 are not blocked,
unless the ``designated foreign person'' has separately become a
person whose property and interests in property are blocked pursuant
to Sec. 544.201(a) or any other part of 31 CFR chapter V. Note,
however, that the importation into the United States of goods,
technology, or services (other than information or informational
materials) produced or provided by a ``designated foreign person''
under part 539 is prohibited by that part.
Subpart B--Prohibitions
Sec. 544.201 Prohibited transactions involving blocked property.
(a) Except as authorized by regulations, orders, directives,
rulings, instructions, licenses or otherwise, and notwithstanding any
contracts entered into or any license or permit granted prior to the
effective date, all property and interests in property that are in the
United States, that hereafter come within the United States, or that
are or hereafter come within the possession or control of U.S. persons,
including their overseas branches, of the following persons are blocked
and may not be transferred, paid, exported, withdrawn, or otherwise
dealt in:
(1) Any person listed in the Annex to Executive Order 13382 of June
28, 2005 (70 FR 38567, July 1, 2005);
(2) Any foreign person determined by the Secretary of State, in
consultation with the Secretary of the Treasury, the Attorney General,
and other relevant agencies, to have engaged, or attempted to engage,
in activities or transactions that have materially contributed to, or
pose a risk of materially contributing to, the proliferation of weapons
of mass destruction or their means of delivery (including missiles
capable of delivering such weapons), including any efforts to
manufacture, acquire, possess, develop, transport, transfer or use such
items, by any person or foreign country of proliferation concern;
(3) Any person determined by the Secretary of the Treasury, in
consultation with the Secretary of State, the Attorney General, and
other relevant agencies, to have provided, or attempted to provide,
financial, material, technological or other support for, or goods or
services in support of, any activity or transaction described in
paragraph (a)(2) of this section, or any person whose property and
interests in property are blocked pursuant to this section; and
(4) Any person determined by the Secretary of the Treasury, in
consultation with the Secretary of State, the Attorney General, and
other relevant agencies, to be owned or controlled by, or acting or
purporting to act for or on behalf of, directly or indirectly, any
person whose property and interests in property are blocked pursuant to
this section.
Note to paragraph (a) of Sec. 544.201: 1. The names of persons
listed in or designated pursuant to Executive Order 13382, whose
property and interests in property are blocked pursuant to paragraph
(a) of this section, are published on the Office of Foreign Assets
Control's Specially Designated Nationals and Blocked Persons List
(``SDN'' list) (which is accessible via the Office of Foreign Assets
Control's Web site), published in the Federal Register, and
incorporated into Appendix A to this chapter with the identifier
``[NPWMD].'' See Sec. 544.411 concerning entities that may not be
listed on the SDN list but whose property and interests in property
are nevertheless blocked pursuant to paragraph (a) of this section.
2. Section 203 of the International Emergency Economic Powers
Act (50 U.S.C. 1701-1706) (``IEEPA'') explicitly 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 part also are published on the SDN list, published
in the Federal Register, and incorporated into Appendix A to this
chapter with the identifier ``[BPI-NPWMD].''
3. 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 paragraph (a) of this section.
(b) The prohibitions in paragraph (a) of this section include, but
are not limited to, prohibitions on the following transactions when
engaged in by a United States person or within the United States:
(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 otherwise authorized by this part or by a specific
license expressly referring to this section, any dealing in any
security (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 but is not
limited to 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 such security 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
[[Page 16775]]
of any such security may have or might appear to have assigned,
transferred, or otherwise disposed of the security.
Sec. 544.202 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.
544.201(a), 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 property interests.
(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. 544.201(a), 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, an appropriate license or other
authorization issued by or pursuant to the direction or authorization
of the Director of the Office of Foreign Assets Control 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 IEEPA, Executive Order 13382, 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 the Director of the Office of Foreign Assets Control 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 the Office of Foreign Assets Control 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 the Director
of the Office of Foreign Assets Control; or
(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.
Note to paragraph (d) of Sec. 544.202: 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 (d)(2) of this section have been satisfied.
(e) 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 in which, on or
since the effective date, there existed an interest of a person whose
property and interests in property are blocked pursuant to Sec.
544.201(a).
Sec. 544.203 Holding of funds in interest-bearing accounts;
investment and reinvestment.
(a) Except as provided in paragraphs (c) or (d) of this section, or
as otherwise directed by the Office of Foreign Assets Control, any U.S.
person holding funds, such as currency, bank deposits, or liquidated
financial obligations, subject to Sec. 544.201(a) shall hold or place
such funds in a blocked interest-bearing account located in the United
States.
(b)(1) For 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) For 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.
(3) Funds held or placed in a blocked account pursuant to this
paragraph (b) may not be invested in instruments the maturity of which
exceeds 180 days. If interest is credited to a separate blocked account
or subaccount, the name of the account party on each account must be
the same.
(c) Blocked funds held in instruments the maturity of which exceeds
180 days at the time the funds become subject to Sec. 544.201(a) 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 paragraphs
(b) or (d) of this section.
(d) Blocked funds held in accounts or instruments outside the
United States at the time the funds become subject to Sec. 544.201(a)
may continue to be held in the same type of accounts or instruments,
provided the funds earn interest at rates that are commercially
reasonable.
(e) This section does not create an affirmative obligation for the
holder of blocked tangible property, such as chattels or real estate,
or of other blocked property, such as debt or equity securities, to
sell or liquidate such property. However, the Office of Foreign Assets
Control may issue licenses permitting or directing such sales or
liquidation in appropriate cases.
(f) Funds subject to this section may not be held, invested, or
reinvested in a manner that provides immediate financial or economic
benefit or access to any person whose property and interests in
property are blocked pursuant to Sec. 544.201(a), nor may their holder
cooperate in or facilitate the pledging or other attempted use as
collateral of blocked funds or other assets.
Sec. 544.204 Expenses of maintaining blocked physical 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 physical property blocked pursuant to Sec.
544.201(a) shall be the responsibility of the owners or operators of
such property, which
[[Page 16776]]
expenses shall not be met from blocked funds.
(b) Property blocked pursuant to Sec. 544.201(a) may, in the
discretion of the Office of Foreign Assets Control, 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. 544.205 Evasions; attempts; conspiracies.
(a) Except as otherwise authorized, and notwithstanding any
contract entered into or any license or permit granted prior to the
effective date, any transaction by a U.S. person or within the United
States on or after the effective date that evades or avoids, has the
purpose of evading or avoiding, or attempts to violate any of the
prohibitions set forth in this part is prohibited.
(b) Except as otherwise authorized, and notwithstanding any
contract entered into or any license or permit granted prior to the
effective date, any conspiracy formed to violate the prohibitions set
forth in this part is prohibited.
Sec. 544.206 Exempt transactions.
(a) Personal communications. 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.
(b) Information or informational materials. (1) The importation
from any country and the exportation to any country of any information
or informational materials, as defined in Sec. 544.304, whether
commercial or otherwise, regardless of format or medium of
transmission, are exempt from the prohibitions of this part.
(2) This section does not exempt from regulation or authorize
transactions related to information or informational materials not
fully created and in existence at the date of the transactions, or to
the substantive or artistic alteration or enhancement of informational
materials, or to the provision of marketing and business consulting
services. Such prohibited transactions include, but are not limited to,
payment of advances for information or informational materials not yet
created and completed (with the exception of prepaid subscriptions for
widely circulated magazines and other periodical publications);
provision of services to market, produce or co-produce, create, or
assist in the creation of information or informational materials; and,
with respect to information or informational materials imported from
persons whose property and interests in property are blocked pursuant
to Sec. 544.201(a), payment of royalties with respect to income
received for enhancements or alterations made by U.S. persons to such
information or informational materials.
(3) This section does not exempt or authorize transactions incident
to the exportation of software subject to the Export Administration
Regulations, 15 CFR parts 730-774, or to the exportation of goods,
technology, or software for use in the transmission of any data, or to
the provision, sale, or leasing of capacity on telecommunications
transmission facilities (such as satellite or terrestrial network
connectivity) for use in the transmission of any data. The exportation
of such items or services and the provision, sale, or leasing of such
capacity or facilities to a person whose property and interests in
property are blocked pursuant to Sec. 544.201(a) are prohibited.
(c) Travel. The prohibitions contained in this part do not apply to
any transactions ordinarily incident to travel to or from any country,
including importation of accompanied baggage for personal use,
maintenance within any country including payment of living expenses and
acquisition of goods or services for personal use, and arrangement or
facilitation of such travel including nonscheduled air, sea, or land
voyages.
Subpart C--General Definitions
Sec. 544.301 Blocked account; blocked property.
The terms blocked account and blocked property shall mean any
account or property subject to the prohibitions in Sec. 544.201 held
in the name of a person whose property and interests in property are
blocked pursuant to Sec. 544.201(a), 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 an authorization or license from the Office of Foreign
Assets Control expressly authorizing such action.
Note to Sec. 544.301: See Sec. 544.411 concerning the blocked
status of property and interests in property of an entity that is 50
percent or more owned by a person whose property and interests in
property are blocked pursuant to Sec. 544.201(a).
Sec. 544.302 Effective date.
The term effective date refers to the effective date of the
applicable prohibitions and directives contained in this part as
follows:
(a) With respect to a person whose property and interests in
property are blocked pursuant to Sec. 544.201(a)(1), 12:01 a.m.
eastern daylight time, June 29, 2005; and
(b) With respect to a person whose property and interests in
property are blocked pursuant to Sec. 544.201(a)(2), (a)(3), or
(a)(4), the earlier of the date of actual or constructive notice of
such person's designation.
Sec. 544.303 Entity.
The term entity means a partnership, association, trust, joint
venture, corporation, group, subgroup, or other organization.
Sec. 544.304 Information or informational materials.
(a) For purposes of this part, the term information or
informational materials includes, but is not limited to, publications,
films, posters, phonograph records, photographs, microfilms,
microfiche, tapes, compact disks, CD-ROMs, artworks, and news wire
feeds.
Note to paragraph (a) of Sec. 544.304: To be considered
information or informational materials, artworks must be classified
under chapter heading 9701, 9702, or 9703 of the Harmonized Tariff
Schedule of the United States.
(b) The term information or informational materials, with respect
to United States exports, does not include items:
(1) That were, as of April 30, 1994, or that thereafter become,
controlled for export pursuant to section 5 of the Export
Administration Act of 1979, 50 U.S.C. App. 2401-2420 (1979) (the
``EAA''), or section 6 of the EAA to the extent that such controls
promote the nonproliferation or antiterrorism policies of the United
States; or
(2) With respect to which acts are prohibited by 18 U.S.C. chapter
37.
Sec. 544.305 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. 544.306 Licenses; general and specific.
(a) Except as otherwise specified, 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.
(c) The term specific license means any license or authorization
not set forth in subpart E of this part but issued pursuant to this
part.
[[Page 16777]]
Note to Sec. 544.306: See Sec. 501.801 of this chapter on
licensing procedures.
Sec. 544.307 Person.
The term person means an individual or entity.
Sec. 544.308 Property; property interest.
The terms property and property interest include, but are not
limited to, 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. 544.309 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 and, without limitation upon the
foregoing, 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. 544.310 United States.
The term United States means the United States, its territories and
possessions, and all areas under the jurisdiction or authority thereof.
Sec. 544.311 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 credits, or purchasing or selling foreign exchange,
securities, commodity futures or options, or procuring purchasers and
sellers thereof, as principal or agent; including but not limited to
depository institutions, banks, savings banks, trust companies,
securities brokers and dealers, commodity 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.
Sec. 544.312 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.
Subpart D--Interpretations
Sec. 544.401 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.
Sec. 544.402 Effect of amendment.
Unless otherwise specifically provided, any amendment,
modification, or revocation of any provision in or appendix to this
part or chapter or of any order, regulation, ruling, instruction, or
license issued by or under the direction of the Director of the Office
of Foreign Assets Control does not affect any act done or omitted, or
any civil or criminal suit or proceeding commenced or pending prior to
such amendment, modification, or revocation. All penalties,
forfeitures, and liabilities under any such order, regulation, ruling,
instruction, or license continue and may be enforced as if such
amendment, modification, or revocation had not been made.
Sec. 544.403 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, such property shall no longer be deemed
to be property blocked pursuant to Sec. 544.201(a), unless there
exists in the property another interest that is blocked pursuant to
Sec. 544.201(a) or any other part of this chapter, 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. 544.201(a), such property shall be deemed to be property in which
that person has an interest and therefore blocked.
Sec. 544.404 Transactions ordinarily incident to a licensed
transaction.
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, by or with a person whose property and
interests in property are blocked pursuant to Sec. 544.201(a); or
(b) 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.
(c) Example. A license authorizing Company A, whose property and
interests in property are blocked pursuant to Sec. 544.201(a), to
complete a securities sale also authorizes all
[[Page 16778]]
activities by other parties required to complete the sale, including
transactions by the buyer, broker, transfer agents, banks, etc.,
provided that such other parties are not themselves persons whose
property and interests in property are blocked pursuant to Sec.
544.201(a).
Sec. 544.405 Provision of services.
(a) Except as provided in Sec. 544.206, the prohibitions on
transactions involving blocked property contained in Sec. 544.201
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 a person whose property and
interests in property are blocked pursuant to Sec. 544.201(a); or
(2) With respect to property interests subject to Sec. 544.201.
(b) 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. 544.201(a).
Note to Sec. 544.405: See Sec. Sec. 544.507 and 544.508 on
licensing policy with regard to the provision of certain legal and
medical services.
Sec. 544.406 Offshore transactions.
The prohibitions in Sec. 544.201 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 a person whose property and interests in property are
blocked pursuant to Sec. 544.201(a), or property in which a person
whose property and interests in property are blocked pursuant to Sec.
544.201(a) has or has had an interest since the effective date.
Sec. 544.407 Payments from blocked accounts to satisfy obligations
prohibited.
Pursuant to Sec. 544.201, 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.
Sec. 544.408 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 a person whose property and interests in
property are blocked pursuant to Sec. 544.201(a). For the purposes of
this part, a contribution is made by, to, or for the benefit of a
person whose property and interests in property are blocked pursuant to
Sec. 544.201(a) if made by, to, or in the name of such a person; if
made by, to, 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.
Sec. 544.409 Credit extended and cards issued by U.S. financial
institutions.
The prohibition in Sec. 544.201 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 a person whose property and interests in
property are blocked pursuant to Sec. 544.201(a).
Sec. 544.410 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 Sec. 544.201 if effected after the effective date.
Sec. 544.411 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 Sec. 544.201(a) 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 Sec. 544.201(a), regardless of whether the entity
itself is listed in the Annex to Executive Order 13382 or designated
pursuant to Sec. 544.201(a).
Subpart E--Licenses, Authorizations and Statements of Licensing
Policy
Sec. 544.501 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.
Sec. 544.502 Effect of license or authorization.
(a) No license or other authorization contained in this part, or
otherwise issued by or under the direction of the Director of the
Office of Foreign Assets Control, 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 the Office of Foreign Assets
Control 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 provision of this
chapter unless the regulation, ruling, instruction, or license
specifically refers to such provision.
(c) Any regulation, ruling, instruction, or license authorizing any
transaction otherwise prohibited 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.
Sec. 544.503 Exclusion from licenses.
The Director of the Office of Foreign Assets Control reserves the
right to exclude any person, property, or transaction from the
operation of any license or from the privileges conferred by any
license. The Director of the Office of Foreign Assets Control also
reserves the right to restrict the applicability of any license to
particular persons, property, transactions, or classes thereof. Such
actions are binding upon actual or constructive notice of the
exclusions or restrictions.
Sec. 544.504 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.
544.201(a) 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
[[Page 16779]]
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 to Sec. 544.504: See Sec. 501.603 of this chapter for
mandatory reporting requirements regarding financial transfers. See
also Sec. 544.203 concerning the obligation to hold blocked funds
in interest-bearing accounts.
Sec. 544.505 Entries in certain accounts for normal service charges
authorized.
(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. 544.506 Investment and reinvestment of certain funds.
Subject to the requirements of Sec. 544.203, U.S. financial
institutions are authorized to invest and reinvest assets blocked
pursuant to Sec. 544.201, 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 persons whose property and interests
in property are blocked pursuant to Sec. 544.201(a).
Sec. 544.507 Provision of certain legal services authorized.
(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. 544.201(a) is authorized, provided that all receipts
of payment of professional fees and reimbursement of incurred expenses
must be specifically licensed:
(1) Provision of legal advice and counseling on the requirements of
and 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 domestic U.S. legal, arbitration, or administrative
proceedings;
(3) Initiation and conduct of domestic U.S. legal, arbitration, or
administrative proceedings in defense of property interests subject to
U.S. jurisdiction;
(4) Representation of persons before any federal or state 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 persons whose
property and interests in property are blocked pursuant to Sec.
544.201(a), not otherwise authorized in this part, requires the
issuance of a specific license.
(c) 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. 544.201(a) is prohibited unless specifically
licensed in accordance with Sec. 544.202(e).
Sec. 544.508 Authorization of emergency medical services.
The provision of nonscheduled emergency medical services in the
United States to persons whose property and interests in property are
blocked pursuant to Sec. 544.201(a) is authorized, provided that all
receipt of payment for such services must be specifically licensed.
Subpart F--Reports
Sec. 544.601 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
Sec. 544.701 Penalties.
(a) Attention is directed to section 206 of the International
Emergency Economic Powers Act (50 U.S.C. 1705) (``IEEPA''), which 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 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.
Note to paragraph (a)(1) of Sec. 544.701: As of the date of
publication in the Federal Register of the final rule adding this
part to 31 CFR chapter V (April 13, 2009), IEEPA provides for a
maximum civil penalty not to exceed the greater of $250,000 or an
amount that is twice the amount of the transaction that is the basis
of the violation with respect to which the penalty is imposed.
(2) A person who willfully commits, willfully attempts to commit,
or willfully conspires to commit, or aids or abets in the commission of
a violation of any license, order, regulation, or prohibition 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) Adjustments to penalty amounts. (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) Attention is also directed to 18 U.S.C. 1001, which provides
that 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; 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,
[[Page 16780]]
United States Code, imprisoned not more than five years, or both.
(d) Violations of this part may also be subject to relevant
provisions of other applicable laws.
Sec. 544.702 Pre-Penalty Notice; settlement.
(a) When required. If the Office of Foreign Assets Control 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, direction, or instruction issued by or pursuant to
the direction or authorization of the Secretary of the Treasury
pursuant to this part or otherwise under IEEPA and determines that a
civil monetary penalty is warranted, the Office of Foreign Assets
Control 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)(1) Right to respond. An alleged violator has the right to
respond to a Pre-Penalty Notice by making a written presentation to the
Office of Foreign Assets Control. 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 the applicable 30-day period set forth in this
paragraph. The failure to submit a response within the applicable time
period set forth in this paragraph 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 the Office of Foreign Assets Control by
courier) on or before the 30th day after the postmark date on the
envelope in which the Pre-Penalty Notice was mailed. If the Pre-Penalty
Notice was personally delivered by a non-U.S. Postal Service agent
authorized by the Office of Foreign Assets Control, 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 the Office of Foreign Assets Control, only upon
specific request to the Office of Foreign Assets Control.
(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, must
contain information sufficient to indicate that it is in response to
the Pre-Penalty Notice, and must include the Office of Foreign Assets
Control identification number listed on the Pre-Penalty Notice. A copy
of the written response may be sent by facsimile, but the original also
must be sent to the Office of Foreign Assets Control Civil Penalties
Division by mail or courier and must be postmarked or date-stamped in
accordance with paragraph (b)(2) of this section.
(c) Settlement. Settlement discussion may be initiated by the
Office of Foreign Assets Control, 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 the Office of Foreign Assets Control 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
the Office of Foreign Assets Control 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. 544.703 Penalty imposition.
If, after considering any written response to the Pre-Penalty
Notice and any relevant facts, the Office of Foreign Assets Control
determines that there was a violation by the alleged violator named in
the Pre-Penalty Notice and that a civil monetary penalty is
appropriate, the Office of Foreign Assets Control 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. 544.704 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 the
Director of the Office of Foreign Assets Control, the matter may be
referred for administrative collection measures by the Department of
the Treasury or to the United States Department of Justice for
appropriate action to recover the penalty in a civil suit in a federal
district court.
Subpart H--Procedures
Sec. 544.801 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. 544.802 Delegation by the Secretary of the Treasury.
Any action that the Secretary of the Treasury is authorized to take
pursuant to Executive Order 13382 of June 28, 2005 (70 FR 38567, July
1, 2005), and any further Executive Orders relating to the national
emergency declared in Executive Order 12938 of November 14, 1994, as
expanded by Executive Order 13094 of July 28, 1998, and with respect to
which additional steps were taken in Executive Order 13382 of June 28,
2005, may be taken by the Director of the Office of Foreign Assets
Control or by any other person to whom the Secretary of the Treasury
has delegated authority so to act.
Subpart I--Paperwork Reduction Act
Sec. 544.901 Paperwork Reduction Act notice.
For approval by the Office of Management and Budget (``OMB'') under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information
collections relating to recordkeeping and reporting requirements,
licensing procedures (including those pursuant to statements of
licensing policy), and other procedures, see 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.
[[Page 16781]]
Dated: March 31, 2009.
Adam J. Szubin,
Director, Office of Foreign Assets Control.
Approved: April 3, 2009.
Stuart A. Levey,
Under Secretary, Office of Terrorism and Financial Intelligence,
Department of the Treasury.
[FR Doc. E9-8336 Filed 4-10-09; 8:45 am]
BILLING CODE 4811-45-P