[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: 31CFR597.203]



[Page 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. 597.203  Holding of funds in interest-bearing accounts; investment 

and reinvestment.



    (a) Except as provided in paragraph (c) of this section, or as 

otherwise directed by the Office of Foreign Assets Control, any U.S. 

financial institution holding funds subject to Sec. 597.201(b) shall 

hold or place such funds in a blocked interest-bearing account which is 

in the name of the foreign terrorist organization or its agent and which 

is located in the United States.

    (b)(1) For purposes of this section, the term 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 for the amount of funds in the account or 

certificate of deposit; 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) Funds held or placed in a blocked interest-bearing account 

pursuant to this paragraph 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 and must clearly indicate the foreign 

terrorist organization or agent having an interest in the accounts.

    (c) Blocked funds held as of the effective date in the form of 

stocks, bonds, debentures, letters of credit, or instruments which 

cannot be negotiated for the purpose of placing the funds in a blocked 

interest-bearing account pursuant to paragraph (a) may continue to be 

held in the form of the existing security or instrument until 

liquidation or maturity, provided that any dividends, interest income, 

or other proceeds derived therefrom are paid into a blocked interest-

bearing account in accordance with the requirements of this section.

    (d) Funds subject to this section may not be held, invested, or 

reinvested in a manner in which an immediate financial or economic 

benefit or access accrues to the foreign terrorist organization or its 

agent.



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