[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: 31CFR535.440]



[Page 151]

 

                  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 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]