[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: 31CFR535.440]

[Page 663-664]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
 CHAPTER V--OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY
 
PART 535_IRANIAN ASSETS CONTROL REGULATIONS--Table of Contents
 
                        Subpart D_Interpretations
 
Sec. 535.440  Commercially reasonable interest rates.

    (a) For purposes of Sec. Sec. 535.212 and 535.213, what is meant by 
``commercially reasonable rates'' depends on the particular 
circumstances. In the case of time or savings deposits, the 
``commercially reasonable rate'' is that rate provided for by the 
deposit agreement or applicable law. With respect to other obligations 
where the rate remains to be determined, it is presently expected that 
the ``commercially reasonable rate'' will be the rate agreed upon by the 
bank and Iran. However, where a deposit has in fact operated as a demand 
account under Treasury license, it would be appropriate to treat the 
deposit for purposes of Sec. Sec. 535.212 and 535.213 as a non-interest 
bearing account. Furthermore, in the event that the Iran-U.S Claims 
Tribunal (the ``Tribunal'') determines that interest additional to that 
agreed upon between the bank and Iran, or compensation or damages in 
lieu of interest, is due Iran, then that amount determined by the 
Tribunal to be owing to Iran shall be transferred as, or as part of, the 
interest at ``commercially reasonable rates'' required to be transferred 
pursuant to Sec. Sec. 535.212 and 535.213, regardless of any settlement 
between the bank and Iran or any release or discharge that Iran may have 
given the bank.
    (b) The contingent interest of Iran in any liability for further or 
additional interest, or compensation or damages in lieu of interest, 
that may be claimed in, and determined by the Tribunal, constitutes an 
interest of Iran in property for purposes of this part, and no agreement 
between Iran and any person subject to the jurisdiction of the United 
States is effective to extinguish

[[Page 664]]

such Iranian interest in property unless so specifically licensed by the 
Treasury Department.
    (c) For deposits held as time deposits, no penalty shall be imposed 
for early withdrawal. (In this connection, the Board of Governors of the 
Federal Reserve System has determined that application of the penalty 
for early withdrawal of time deposits transferred before maturity, 
pursuant to Sec. 535.213 is not required.)

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205; 45 FR 24099; E.O. 12211, 45 FR 26605; E.O. 12276, 46 
FR 7913; E.O. 12277, 46 FR 7915; E.O. 12278, 46 FR 7917; E.O. 12279, 46 
FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 FR 7923; E.O. 12282, 46 
FR 7925; and E.O. 12294, 46 FR 14111)

[48 FR 253, Jan. 4, 1983]