[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR500.203]

[Page 524-525]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
 CHAPTER V--OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY
 
PART 500_FOREIGN ASSETS CONTROL REGULATIONS--Table of Contents
 
                         Subpart B_Prohibitions
 
Sec. 500.203  Effect of transfers violating the provisions of this chapter.

    (a) Any transfer after the ``effective date'' which is in violation 
of any provision of this chapter or of any regulation, ruling, 
instruction, license, or other direction or authorization thereunder and 
involves any property in which a designated national has or has had an 
interest since such ``effective date'' 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.
    (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 interest in, any property in which a designated 
national has or has had an interest since the ``effective date'' unless 
the person with whom such property is held or maintained had written 
notice of the transfer or by any written evidence had recognized such 
transfer prior to such ``effective date.''
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by or pursuant to the direction or authorization of 
the Secretary of the Treasury before, during or after a transfer shall 
validate such transfer or render it enforceable to the same extent as it 
would be valid or enforceable but for the provisions of section 5(b) of 
the Trading With the Enemy Act, as amended, and this chapter and any 
ruling, order, regulation, direction or instruction issued thereunder.
    (d) Transfers of property which 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 pursuant to such 
provisions, as to any person with whom such property was held or 
maintained (and as to such person, only) in cases in which such person 
is able to establish each of the following:
    (1) Such transfer did not represent a willful violation of the 
provisions of this chapter by the person with whom such property was 
held or maintained;
    (2) The person with whom such property 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 by or pursuant to the provisions of 
this chapter 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 or the withholding 
of material facts or was otherwise fraudulently obtained; and
    (3) Promptly upon discovery that:

[[Page 525]]

    (i) Such transfer was in violation of the provisions of this chapter 
or any regulation, ruling, instruction, license or other direction or 
authorization thereunder, or
    (ii) Such transfer was not licensed or authorized by the Secretary 
of the Treasury, or
    (iii) If a license did purport to cover the transfer, such license 
had been obtained by misrepresentation or the withholding of material 
facts or was otherwise fraudulently obtained;

the person with whom such property was held or maintained filed with the 
Treasury Department, Washington, DC 20220, a report in triplicate 
setting forth in full the circumstances relating to such transfer. The 
filing of a report in accordance with the provisions of this paragraph 
shall not be deemed to be compliance or evidence of compliance with 
paragraphs (d) (1) and (2) of this section.
    (e) Unless licensed or authorized by Sec. 500.504 or otherwise 
licensed or authorized pursuant to this chapter 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 the interest of a designated 
foreign country or national thereof.
    (f) For the purpose of this section the term ``property'' includes 
gold, silver, bullion, currency, coin, credit, securities (as that term 
is defined in section 2(1) of the Securities Act of 1933, as amended) 
(48 Stat. 74; 15 U.S.C. 77(b)), bills of exchange, notes, drafts, 
acceptances, checks, letters of credit, book credits, debts, claims, 
contracts, negotiable documents of title, mortgages, liens, annuities, 
insurance policies, options and futures in commodities, and evidences of 
any of the foregoing. The term ``property'' shall not, except to the 
extent indicated, be deemed to include chattels or real property.

[15 FR 9040, Dec. 19, 1950, as amended at 41 FR 16553, Apr. 20, 1976]