[Code of Federal Regulations]

[Title 31, Volume 3]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 31CFR500.203]



[Page 10-11]

 

                  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 11]]



    (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]