[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR586.408]

[Page 864-865]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
 CHAPTER V--OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY
 
PART 586--FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA & MONTENEGRO) KOSOVO SANCTIONS REGULATIONS--Table of Contents
 
                       Subpart D--Interpretations
 
Sec. 586.408  Exempt financial transactions within the territory of the FRY (S&M); prohibition on establishment of new offices in Serbia.

    (a) Section 586.201(c) exempts financial transactions, including 
trade financing, from the prohibitions contained in Sec. 586.201 by U.S. 
persons physically located within the territory of the FRY (S&M), where 
those transactions are conducted exclusively through the domestic 
banking system within the FRY (S&M) in local currency (dinars), or using 
bank notes or barter. A U.S. entity must have a permanent establishment, 
such as a branch or representative office, within the territory of the 
FRY (S&M) to be considered physically located there for purposes of this 
paragraph (a).
    (b) The prohibition on new investment within Serbia contained in 
Sec. 586.204, as defined in Sec. 586.312, precludes the establishment 
after the effective date of a new representative or branch office or 
joint venture or other entity within the territory of the Republic of 
Serbia, because such activity

[[Page 865]]

would necessarily involve a commitment or contribution of funds or other 
assets to a public or private undertaking, entity, or project within 
Serbia. See Sec. 586.513 concerning the authorization of certain trade-
related transactions conducted using bank notes or barter by U.S. 
persons located outside of the territory of the FRY (S&M).

    Note to Sec. 586.408: All transactions with respect to property in 
which the Government of the Republic of Montenegro has an interest are 
authorized pursuant to Sec. 586.516. Therefore, all financial 
transactions by U.S. persons within the territory of the Republic of 
Montenegro are authorized, unless the transaction involves property in 
which another interest exists that is blocked pursuant to Sec. 586.201 
or any other part of this chapter. See Sec. 586.403.