[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: 31CFR538.203]



[Page 184-185]

 

                  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 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



[[Page 185]]



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.