[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: 31CFR538.203]

[Page 696-697]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
 CHAPTER V--OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY
 
PART 538_SUDANESE SANCTIONS REGULATIONS--Table of Contents
 
                         Subpart B_Prohibitions
 
Sec. 538.203  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

[[Page 697]]

Assets Control, any U.S. person holding funds, such as currency, bank 
deposits, or liquidated financial obligations, subject to Sec. 
538.201(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 which are 
commercially reasonable; or
    (ii) With a broker or dealer registered with the Securities and 
Exchange Commission under the Securities Exchange Act of 1934, 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 sub-account, 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. 538.201 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 paragraph (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. 538.201 may 
continue to be held in the same type of accounts or instruments, 
provided the funds earn interest at rates which 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 at the time the property becomes subject to 
Sec. 538.201. However, the Office of Foreign Assets Control may issue 
licenses permitting or directing such sales in appropriate cases.
    (f) Funds subject to this section may not be held, invested, or 
reinvested in a manner which provides immediate financial or economic 
benefit or access to the Government of Sudan or its entities, nor may 
their holder cooperate in or facilitate the pledging or other attempted 
use as collateral of blocked funds or other assets.