[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: 31CFR597.202]



[Page 482-483]

 

                  TITLE 31--MONEY AND FINANCE: TREASURY

 

 CHAPTER V--OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY

 

PART 597_FOREIGN TERRORIST ORGANIZATIONS SANCTIONS REGULATIONS--Table 

of Contents

 

                         Subpart B_Prohibitions

 

Sec. 597.202  Effect of transfers violating the provisions of this part.



    (a) Any transfer after the effective date which is in violation of 

Sec. 597.201 or any other provision of this part or of any regulation, 

order, directive, ruling, instruction, license, or other authorization 

hereunder and involves any funds or assets held in the name of a foreign 

terrorist organization or its agent or in which a foreign terrorist 

organization or its agent has or has had an interest since such 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 funds or assets.

    (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 funds or assets held in the name of a 

foreign terrorist organization or its agent or in which a foreign 

terrorist organization or its agent has an interest, or has had an 

interest since such date, unless the financial institution with whom 

such funds or assets are held or maintained, prior to such date, had 

written notice of the transfer or by any written evidence had recognized 

such transfer.

    (c) Unless otherwise provided, an appropriate license or other 

authorization issued by or pursuant to the direction or authorization of 

the Director of the Office of Foreign Assets Control before, during, or 

after a transfer shall validate such transfer or render it enforceable 

to the same extent that it would be valid or enforceable but for the 

provisions of this part, and any regulation, order, directive, ruling, 

instruction, or license issued hereunder.

    (d) Transfers of funds or assets 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 as to any financial 

institution with whom such funds or assets were held or maintained (and 

as to such financial institution only) in cases in which such financial 

institution is able to establish to the satisfaction of the Director of 

the Office of Foreign Assets Control each of the following:

    (1) Such transfer did not represent a willful violation of the 

provisions of this part by the financial institution with whom such 

funds or assets were held or maintained;

    (2) The financial institution with which such funds or assets were 

held or maintained did not have reasonable cause to know or suspect, in 

view of all



[[Page 483]]



the facts and circumstances known or available to such institution, that 

such transfer required a license or authorization by or pursuant to this 

part 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 of a third party or 

the withholding of material facts or was otherwise fraudulently 

obtained; and

    (3) The financial institution with which such funds or assets were 

held or maintained filed with the Office of Foreign Assets Control a 

report setting forth in full the circumstances relating to such transfer 

promptly upon discovery that:

    (i) Such transfer was in violation of the provisions of this part or 

any regulation, ruling, instruction, license, or other direction or 

authorization hereunder; or

    (ii) Such transfer was not licensed or authorized by the Director of 

the Office of Foreign Assets Control; or

    (iii) If a license did purport to cover the transfer, such license 

had been obtained by misrepresentation of a third party or the 

withholding of material facts or was otherwise fraudulently obtained.



    Note to paragraph (d): The filing of a report in accordance with the 

provisions of paragraph (d)(3) of this section shall not be deemed 

evidence that the terms of paragraphs (d)(1) and (2) of this section 

have been satisfied.



    (e) Except for exercises of judicial authority pursuant to 8 U.S.C. 

1189(b), unless licensed or authorized pursuant to this part, any 

attachment, judgment, decree, lien, execution, garnishment, or other 

judicial process is null and void with respect to any funds or assets 

which, on or since the effective date, were in the possession or control 

of a U.S. financial institution and were held in the name of a foreign 

terrorist organization or its agent or in which there existed an 

interest of a foreign terrorist organization or its agent.