[Code of Federal Regulations]
[Title 22, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 22CFR10.735-205]

[Page 53-54]
 
                       TITLE 22--FOREIGN RELATIONS
 
                     CHAPTER I--DEPARTMENT OF STATE
 
PART 10--EMPLOYEE RESPONSIBILITIES AND CONDUCT--Table of Contents
 
 Subpart B--Ethical and Other Conduct and Responsibilities of Employees
 
Sec. 10.735-205  Financial interests.

    (a) An employee shall not: (1) Have a direct or indirect financial 
interest that conflicts substantially, or appears to conflict 
substantially with the employee's Government duties and 
responsibilities; or
    (2) Engage in, directly or indirectly, a financial transaction as a 
result of, or primarily relying on, information obtained through 
Government employment.
    (b) This section does not preclude an employee from having a 
financial interest or engaging in financial transactions to the same 
extent as a private citizen not employed by the Government so long as it 
is not prohibited by law or the regulations in this part.
    (c) Pursuant to the provision of 18 U.S.C. 208(b) the following 
described financial interests of an employee are hereby exempted from 
the requirements of 18 U.S.C. 208(a) and 208(b)(1) as being too remote 
or too inconsequential to affect the integrity of the services of an 
employee. The exemption applies to the financial interests held directly 
by an employee, by the employee's spouse or minor child whether 
individually or jointly with the employee, or by an employee and any 
partner or partners as joint assets of the partnership:
    (1) Investments in State and local government bonds; and stocks, 
bonds, or policies in a mutual fund, investment company, bank or 
insurance company, provided that in the case of a mutual fund, 
investment company, or bank, the fair value of such stock or bond 
holding does not exceed one percent of the value of the reported assets 
of the mutual fund, investment company, or bank. In the case of a mutual 
fund or investment company, this exemption applies only where the assets 
of the fund or company are diversified;

[[Page 54]]

it does not apply where the fund or company specializes in a particular 
industry or commodity.
    (2) Interest in an investment club or other group organized for the 
purpose of investing in equity or debt securities: Provided, That the 
fair value of the interest involved does not exceed $10,000 and that the 
interest does not exceed one-fourth of the total assets of the 
investment club or group. Where an employee covered by this exemption is 
a member of a group organized for the purpose of investing in equity or 
debt securities, the interest of the employee in any enterprise in which 
the group holds securities shall be based upon the employee's equity 
share of the holdings of the group in that enterprise.
    (3) If an employee, or the employee's spouse or minor child has a 
present beneficial interest or a vested remainder interest under a 
trust, the ownership of stocks, bonds, or other corporate securities 
under the trust will be exempt to the same extent as provided in 
paragraphs (c)(1) and (2) of this section for the direct ownership of 
such securities. The ownership of bonds other than corporate bonds, or 
of shares in a mutual fund or regulated investment company, under the 
trust will be equally exempt and to the same extent as under paragraphs 
(c) (1) and (2) of this section.
    (4) If an employee is an officer, director, trustee, or employee of 
an educational institution, or if the employee is negotiating for, or 
has an arrangement concerning prospective employment with such an 
institution, a direct financial interest which the institution has in 
any matter will not itself be exempt, but any financial interest that 
the institution may have in the matter through its holdings of 
securities issued by business entities will be exempt: Provided, The 
employee is not serving as a member of the investment committee of the 
institution or is not otherwise advising it on its investment portfolio.
    (5) An employee may continue to participate in a bona fide pension, 
retirement, group life, health or accident insurance plan, or other 
employee welfare or benefit plan that is maintained by a business or 
nonprofit organization by which the employee was formerly employed. Such 
financial interest in that organization will be exempt, except to the 
extent that the welfare or benefit plan is a profit-sharing or stock-
bonus plan and the employee's financial interest thereunder exceeds 
$10,000. This exemption extends also to any financial interests that the 
organization may have in other business activities.
    (d) Nothing in this part shall be deemed to prohibit an employee 
from acting, with or without compensation, as agent or attorney for the 
employee's parents, spouse, child, or any person for whom, or for any 
estate for which, the employee is serving as guardian, executor, 
administrator, trustee, or other personal fiduciary, except in those 
matters in which the employee has participated personally and 
substantially as a Government employee, through decision, approval, 
disapproval, recommendation, the rendering of advice, investigation, or 
otherwise, or which are the subject of the employee's official 
responsibility, as defined in 18 U.S.C. 202(b): Provided, The head of 
the employee's division approves in writing.