75904 Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Rules and Regulations 

§ 40.6302(c)–1T Deposits (temporary). 

* * * * * 

§ 40.6302(c)–2 [Amended] 

■ Par. 19. Section 40.6302(c)–2, 

paragraph (c), is amended by removing 

the language ‘‘2001’’ and adding ‘‘2001, 

except that paragraph (b) of this section 

does not apply after December 31, 2010’’ 

in its place. 

■ Par. 20. Section 40.6302(c)–3 is 

amended as follows: 

■ 1. The heading is revised. 

■ 2. Paragraph (c) is revised. 

■ 3. In paragraph (g), the language 

‘‘2004’’ is removed and ‘‘2004, and 

except that paragraph (f)(5) of this 

section does not apply after December 

31, 2010’’ is added in its place. 

The revisions read as follows: 

§ 40.6302(c)–3 Deposits under chapter 33. 

* * * * * 

(c) Time to deposit. Under the 

alternative method, the deposit of tax 

for any semimonthly period must be 

made by the third business day after the 

seventh day of that semimonthly period. 

For purposes of this paragraph (c), a 

‘‘business day’’ is any calendar day other 

than a Saturday, Sunday, or legal 

holiday. The term ‘‘legal holiday’’ means 

a legal holiday in the District of 

Columbia as defined in section 7503. 

Thus, for example, the deposit for the 

semimonthly period beginning on 

January 1, 2011 (relating to amounts 

billed between December 1st and 

December 15, 2010) is due by January 

12, 2011, three business days after 

January 7, the seventh day of the 

semimonthly period. The deposit for the 

semimonthly period beginning on 

October 1, 2011 (relating to amounts 

billed between September 1st and 

September 15, 2011), is due by October 

13, 2011, due to the October 10, 2011, 

Columbus Day holiday. 

* * * * * 

PART 301—PROCEDURE AND 

ADMINISTRATION 

■ Par. 21. The authority citation for part 

301 is amended to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

■ Par. 22. Section 301.6302–1 is revised 

to read as follows: 

§ 301.6302–1 Manner or time of collection 

of taxes. 

(a) Employment and excise taxes. For 

provisions relating to the manner or 

time of collection of certain 

employment and excise taxes and 

deposits in connection with the 

payment thereof, see the regulations 

relating to the particular tax. 

(b) Income taxes. (1) For provisions 

relating to the deposits of income and 

estimated income taxes of certain 

corporations, see § 1.6302–1 of this 

chapter (Income Tax Regulations). 

(2) For provisions relating to the 

deposits of tax required to be withheld 

under chapter 3 of the Code on 

nonresident aliens and foreign 

corporations and tax-free covenant 

bonds, see § 1.6302–2 of this chapter. 

(c) Effective/applicability date. This 

section applies to deposits and 

payments made after December 31, 

2010. 

■ Par. 23. Section 301.6656–1 is 

amended by: 

■ 1. Revising paragraph (b). 

■ 2. Revising paragraph (c). 

The revisions read as follows: 

§ 301.6656–1 Abatement of penalty. 

* * * * * 

(b) Deposit sent to Secretary. The 

Secretary may abate the penalty 

imposed by section 6656(a) if the first 

time a taxpayer is required to make a 

deposit, the amount required to be 

deposited is inadvertently sent to the 

Secretary rather than deposited by 

electronic funds transfer. 

(c) Effective/applicability date. This 

section applies to deposits and 

payments made after December 31, 

2010. 

§ 301.7502–2 [Removed] 

■ Par. 24. Section 301.7502–2 is 

removed. 

Steven T. Miller, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: November 30, 2010. 

Michael Mundaca, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. 2010–30526 Filed 12–2–10; 11:15 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF LABOR 

Office of Labor-Management 

Standards 

29 CFR Part 403 

RIN 1215—AB75; 1245—AA02 

Rescission of Form T–1, Trust Annual 

Report; Requiring Subsidiary 

Organization Reporting on the Form 

LM–2, Labor Organization Annual 

Report; Modifying Subsidiary 

Organization Reporting on the Form 

LM–3, Labor Organization Annual 

Report; LMRDA Coverage of 

Intermediate Labor Organizations; 

Final Rule 

Correction 

In rule document 2010—29226 

beginning on page 74936 in the issue of 

Wednesday, December 1, 2010 make the 

following correction: 

On page 74936, in the second column, 

under the DATES section, in the second 

line, ‘‘January 3, 2011’’ should read 

‘‘January 1, 2011’’. 

[FR Doc. C1–2010–29226 Filed 12–6–10; 8:45 am] 

BILLING CODE 1505–01–D 

DEPARTMENT OF THE TREASURY 

Office of Foreign Assets Control 

31 CFR Parts 594, 595, and 597 

Global Terrorism Sanctions 

Regulations; Terrorism Sanctions 

Regulations; Foreign Terrorist 

Organizations Sanctions Regulations 

AGENCY: Office of Foreign Assets 

Control, Treasury. 

ACTION: Final rule. 

SUMMARY: The Office of Foreign Assets 

Control (‘‘OFAC’’) of the U.S. 

Department of the Treasury is amending 

the Global Terrorism Sanctions 

Regulations (‘‘GTSR’’) and the Terrorism 

Sanctions Regulations (‘‘TSR’’) to 

expand the scope of authorizations in 

each of those programs for the provision 

of certain legal services. In addition, 

OFAC is adding new general licenses 

under the GTSR, the TSR, and the 

Foreign Terrorist Organizations 

Sanctions Regulations to authorize U.S. 

persons to receive specified types of 

payment for certain authorized legal 

services. 

DATES: Effective Date: December 7, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Assistant Director for Compliance, 

Outreach & Implementation, tel.: 202/ 

622–2490, Assistant Director for 


srobinson on DSKHWCL6B1PROD with RULES
Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Rules and Regulations 75905 

Licensing, tel.: 202/622–2480, Assistant 

Director for Policy, tel.: 202/622–4855, 

Office of Foreign Assets Control, or 

Chief Counsel (Foreign Assets Control), 

tel.: 202/622–2410, Office of the General 

Counsel, Department of the Treasury, 

Washington, DC 20220 (not toll free 

numbers). 

SUPPLEMENTARY INFORMATION: 

Electronic and Facsimile Availability 

This document and additional 

information concerning OFAC are 

available from OFAC’s Web site 

(http://www.treas.gov/ofac). Certain 

general information pertaining to 

OFAC’s sanctions programs also is 

available via facsimile through a 24- 

hour fax-on-demand service, tel.: 202/ 

622–0077. 

Background 

OFAC administers three sanctions 

programs with respect to terrorists and 

terrorist organizations. The Terrorism 

Sanctions Regulations, 31 CFR part 595 

(‘‘TSR’’), implement Executive Order 

12947 of January 23, 1995, in which the 

President declared a national emergency 

with respect to ‘‘grave acts of violence 

committed by foreign terrorists that 

disrupt the Middle East peace process.’’ 

The Global Terrorism Sanctions 

Regulations, 31 CFR part 594 (‘‘GTSR’’), 

implement Executive Order 13224 of 

September 23, 2001, in which the 

President declared an emergency more 

generally with respect to ‘‘grave acts of 

terrorism and threats of terrorism 

committed by foreign terrorists.’’ The 

Foreign Terrorist Organizations 

Sanctions Regulations, 31 CFR part 597 

(‘‘FTOSR’’), implement provisions of the 

Antiterrorism and Effective Death 

Penalty Act of 1996. 

OFAC is revising sections in the 

GTSR and the TSR that authorize the 

provision of certain legal services to 

expand the scope of authorized services. 

In addition, OFAC is adding a new 

section to the GTSR, TSR, and FTOSR 

authorizing U.S. persons to receive 

specified types of payment for certain 

authorized legal services. Section 

594.506 of the GTSR and section 

595.506 of the TSR authorize U.S. 

persons to provide certain authorized 

legal services to or on behalf of persons 

whose property and interests in 

property are blocked under those 

regulations, provided that any payment 

of professional fees and reimbursement 

of incurred expenses must be 

specifically licensed. OFAC is 

expanding the scope of these general 

licenses by adding to the authorized 

legal services the initiation and conduct 

of legal, arbitration, or administrative 

proceedings before any U.S. federal, 

state, or local court or agency for or on 

behalf of persons whose property and 

interests in property are blocked under 

the GTSR or TSR. 

The FTOSR prohibit financial 

transactions involving assets, within the 

possession or control of U.S. financial 

institutions, in which a designated 

foreign terrorist organization or its agent 

has an interest. While the FTOSR, 

therefore, do not prohibit U.S. persons 

from providing legal services to 

designated foreign terrorist 

organizations or agents thereof, any 

payment for such services through a 

U.S. financial institution is prohibited. 

Section 597.505 of the FTOSR provides 

that OFAC may issue specific licenses, 

on a case-by-case basis, authorizing the 

receipt of payment of professional fees 

and reimbursement of incurred 

expenses through a U.S. financial 

institution for certain legal services 

provided by U.S. persons to designated 

foreign terrorist organizations or agents 

thereof. 

In specific licenses it has issued for 

payment of U.S. persons for professional 

services rendered and reimbursement of 

expenses incurred in connection with 

authorized legal services provided on 

behalf of blocked persons, OFAC has 

authorized several payment 

mechanisms. First, OFAC has issued 

specific licenses authorizing payment of 

fees and reimbursement of expenses 

where the funds used for such payment 

or reimbursement originate outside the 

United States and do not come from a 

U.S. person or any person, other than 

the person on whose behalf the 

authorized legal services are provided, 

whose property and interests in 

property are blocked. Second, OFAC has 

issued specific licenses authorizing the 

establishment of legal defense funds 

that collect donations from persons who 

are neither designated nor blocked to 

pay legal fees and reimburse expenses 

incurred in connection with authorized 

legal services rendered on behalf of 

blocked persons. With this rule, OFAC 

incorporates these mechanisms for 

payment into general licenses by adding 

new section 594.517 to the GTSR, new 

section 595.515 to the TSR, and new 

section 597.513 to the FTOSR. These 

new sections authorize payments from 

funds originating outside the United 

States in connection with certain 

authorized legal services rendered to or 

on behalf of designated persons, as well 

as the formation of legal defense funds 

to gather donations and dispense funds 

in connection with payments for such 

legal services. 

In addition to the payment 

mechanisms discussed above, OFAC 

may issue specific licenses authorizing 

the release of a limited amount of 

blocked funds for the payment of legal 

fees and expenses incurred in seeking 

administrative reconsideration or 

judicial review of the designation of a 

U.S. person or the blocking of the 

property and interests in property of a 

U.S. person where alternative funding 

sources are not available. For more 

information on this third mechanism for 

payment, see OFAC’s Guidance on the 

Release of Limited Amounts of Blocked 

Funds for Payment of Legal Fees and 

Costs Incurred in Challenging the 

Blocking of U.S. Persons in 

Administrative or Civil Proceedings, 

which is available at: http:// 

www.treas.gov/resource-center/ 

sanctions/Documents/ 

legal_fee_guide.pdf. 

Public Participation 

Because these amendments to 31 CFR 

parts 594, 595, and 597 involve a foreign 

affairs function, Executive Order 12866 

and the provisions of the Administrative 

Procedure Act (5 U.S.C. 553) requiring 

notice of proposed rulemaking, 

opportunity for public participation, 

and delay in effective date are 

inapplicable. Because no notice of 

proposed rulemaking is required for this 

rule, the Regulatory Flexibility Act 

(5 U.S.C. 601–612) does not apply. 

Paperwork Reduction Act 

The collections of information related 

to 31 CFR parts 594, 595, and 597 are 

contained in 31 CFR part 501 (the 

‘‘Reporting, Procedures and Penalties 

Regulations’’). Pursuant to the 

Paperwork Reduction Act of 1995 

(44 U.S.C. 3507), those collections of 

information have been approved by the 

Office of Management and Budget under 

control number 1505–0164. An agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless the 

collection of information displays a 

valid control number. 

List of Subjects 

31 CFR Part 594 

Administrative practice and 

procedure, Banks, Banking, Currency, 

Foreign investments in United States, 

Penalties, Reporting and recordkeeping 

requirements, Securities, Terrorism. 

31 CFR Part 595 

Administrative practice and 

procedure, Banks, Banking, Currency, 

Foreign investments in United States, 

Penalties, Reporting and recordkeeping 

requirements, Securities, Terrorism. 


srobinson on DSKHWCL6B1PROD with RULES
75906 Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Rules and Regulations 

31 CFR Part 597 

Administrative practice and 

procedure, Banks, Banking, Currency, 

Foreign investments in United States, 

Penalties, Reporting and recordkeeping 

requirements, Securities, Terrorism. 

■ For the reasons set forth in the 

preamble, the Office of Foreign Assets 

Control amends 31 CFR parts 594, 595, 

and 597 as follows: 

PART 594—GLOBAL TERRORISM 

SANCTIONS REGULATIONS 

■ 1. The authority citation for part 594 

continues to read as follows: 

Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 

31 U.S.C. 321(b); 50 U.S.C. 1601–1651, 1701– 

1706; Pub. L. 101–410, 104 Stat. 890 (28 

U.S.C. 2461 note); Pub. L. 110–96, 121 Stat. 

1011; E.O. 13224, 66 FR 49079, 3 CFR, 2001 

Comp., p. 786; E.O. 13268, 67 FR 44751, 

3 CFR, 2002 Comp., p. 240; E.O. 13284, 68 

FR 4075, 3 CFR, 2003 Comp., p. 161. 

Subpart E—Licenses, Authorizations, 

and Statements of Licensing Policy 

■ 2. Amend § 594.506 by revising the 

introductory text of paragraph (a), 

redesignating existing paragraphs (b) 

and (c) as paragraphs (c) and (d), 

respectively, and adding new paragraph 

(b) to read as follows: 

§ 594.506 Provision of certain legal 

services authorized. 

(a) The provision of the following 

legal services to or on behalf of persons 

whose property and interests in 

property are blocked pursuant to 

§ 594.201(a) is authorized, provided that 

all receipts of payment of professional 

fees and reimbursement of incurred 

expenses must be specifically licensed 

or otherwise authorized pursuant to this 

part: 

* * * * * 

(b) The provision of legal services not 

otherwise authorized by paragraph (a) of 

this section to or on behalf of persons 

whose property and interests in 

property are blocked pursuant to 

§ 594.201(a) in connection with the 

initiation and conduct of legal, 

arbitration, or administrative 

proceedings before any U.S. federal, 

state, or local court or agency is 

authorized, provided that all receipts of 

payment of professional fees and 

reimbursement of incurred expenses 

must be specifically licensed. 

* * * * * 

■ 3. Add new § 594.517 to subpart E to 

read as follows: 

§ 594.517 Payments from funds originating 

outside the United States and the formation 

of legal defense funds authorized. 

(a) Payments from funds originating 

outside the United States. Effective 

December 7, 2010, receipts of payment 

of professional fees and reimbursement 

of incurred expenses for the provision of 

legal services authorized pursuant to 

§ 594.506(a) are authorized from funds 

originating outside the United States, 

provided that: 

(1) Prior to receiving payment for 

legal services authorized pursuant to 

§ 594.506(a) rendered to persons whose 

property and interests in property are 

blocked pursuant to § 594.201(a), the 

U.S. person that is an attorney, law firm, 

or legal services organization provides 

to the Office of Foreign Assets Control 

a copy of a letter of engagement or a 

letter of intent to engage specifying the 

services to be performed and signed by 

the individual to whom such services 

are to be provided or, where services are 

to be provided to an entity, by a legal 

representative of the entity. The copy of 

a letter of engagement or a letter of 

intent to engage, accompanied by 

correspondence referencing this 

paragraph (a), is to be mailed to: 

Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

(2) The funds received by U.S. 

persons as payment of professional fees 

and reimbursement of incurred 

expenses for the provision of legal 

services authorized pursuant to 

§ 594.506(a) must not originate from: 

(i) A source within the United States; 

(ii) Any source, wherever located, 

within the possession or control of a 

U.S. person; or 

(iii) Any individual or entity, other 

than the person on whose behalf the 

legal services authorized pursuant to 

§ 594.506(a) are to be provided, whose 

property and interests in property are 

blocked pursuant to any part of this 

chapter or any Executive order; 

Note to paragraph (a)(2) of § 594.517: This 

paragraph authorizes the blocked person on 

whose behalf the legal services authorized 

pursuant to § 594.506(a) are to be provided to 

make payments for authorized legal services 

using funds originating outside the United 

States that were not previously blocked. 

Nothing in this paragraph authorizes 

payments for legal services using funds in 

which any other person whose property and 

interests in property are blocked pursuant to 

§ 594.201(a) or any other part of this chapter 

holds an interest. 

(3) Reports. (i) U.S. persons who 

receive payments in connection with 

legal services authorized pursuant to 

§ 594.506(a) must submit quarterly 

reports no later than 30 days following 

the end of the calendar quarter during 

which the payments were received 

providing information on the funds 

received. Such reports shall specify: 

(A) The individual or entity from 

whom the funds originated and the 

amount of funds received; and 

(B) If applicable: 

(1) The names of any individuals or 

entities providing related services to the 

U.S. person receiving payment in 

connection with authorized legal 

services, such as private investigators or 

expert witnesses; 

(2) A general description of the 

services provided; and 

(3) The amount of funds paid in 

connection with such services. 

(ii) In the event that no transactions 

occur or no funds are received during 

the reporting period, a statement is to be 

filed to that effect. 

(iii) Reports, which must reference 

this paragraph (a), are to be mailed to: 

Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

and 

Note to paragraph (a)(3) of § 594.517: U.S. 

persons who receive payments in connection 

with legal services authorized pursuant to 

§ 594.506(a) do not need to obtain specific 

authorization to contract for related services 

that are ordinarily incident to the provision 

of those legal services, such as those 

provided by private investigators or expert 

witnesses, or to pay for such services. 

Additionally, U.S. persons do not need to 

obtain specific authorization to provide 

related services that are ordinarily incident to 

the provision of legal services authorized 

pursuant to § 594.506(a). 

(4) Nothing in this paragraph (a) 

authorizes the receipt of payment of 

professional fees or reimbursement of 

incurred expenses for the provision of 

legal services authorized pursuant to 

§ 594.506(b). 

Note 1 to paragraph (a) of § 594.517: Any 

payment authorized in or pursuant to this 

paragraph that is routed through the U.S. 

financial system should reference this 

paragraph (a) to avoid the blocking of the 

transfer. 

Note 2 to paragraph (a) of § 594.517: 

Nothing in this paragraph authorizes the 

transfer of any blocked property, the debiting 

of any blocked account, the entry of any 

judgment or order that effects a transfer of 

blocked property, or the execution of any 

judgment against property blocked pursuant 

to any Executive order or this Chapter. U.S. 

persons seeking administrative 

reconsideration or judicial review of their 

designation or the blocking of their property 

and interests in property may apply for a 

specific license from the Office of Foreign 

Assets Control to authorize the release of a 


srobinson on DSKHWCL6B1PROD with RULES
Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Rules and Regulations 75907 

limited amount of blocked funds for the 

payment of legal fees where alternative 

funding sources are not available. For more 

information, see OFAC’s Guidance on the 

Release of Limited Amounts of Blocked 

Funds for Payment of Legal Fees and Costs 

Incurred in Challenging the Blocking of U.S. 

Persons in Administrative or Civil 

Proceedings, which is available at: http:// 

www.treas.gov/resource-center/sanctions/ 

Documents/legal_fee_guide.pdf. 

(b) Legal defense funds. Effective 

December 7, 2010, U.S. persons that are 

attorneys, law firms, or legal services 

organizations are authorized to form 

legal defense funds from which 

payments of professional fees and 

reimbursement for expenses incurred in 

connection with the provision of legal 

services authorized pursuant to 

§ 594.506(a) may be debited provided 

that: 

(1) The legal defense fund must be 

held in a savings or checking account at 

a financial institution located in the 

United States; 

(2) Prior to debiting the legal defense 

fund, the U.S. person responsible for 

establishing the legal defense fund must 

submit the following information to the 

Office of Foreign Assets Control: A copy 

of a letter of engagement or a letter of 

intent to engage specifying the services 

to be performed and signed by the 

individual to whom such services are to 

be provided or, where services are to be 

provided to an entity, by a legal 

representative of the entity; the name of 

the individual or entity responsible for 

establishing the legal defense fund; the 

name of the financial institution at 

which the account for the legal defense 

fund will be held; a point of contact at 

the financial institution holding the 

account for the legal defense fund; and 

the account name and account number 

for the legal defense fund. The foregoing 

information must be accompanied by 

correspondence referencing this 

paragraph (b) and is to be mailed to: 

Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

(3) The legal defense fund may not 

receive funds from a person whose 

property and interests in property are 

blocked pursuant to § 594.201(a) or any 

other part of this chapter; 

(4) The U.S. person responsible for 

establishing the legal defense fund must 

notify the financial institution at which 

the account for the legal defense fund is 

held that the account may only be 

debited to make payments of 

professional fees and reimburse 

expenses incurred in connection with 

the provision of legal services 

authorized pursuant to § 594.506(a); 

(5) Reports. (i) U.S. persons 

responsible for establishing legal 

defense funds from which payments of 

professional fees and reimbursement for 

expenses incurred in connection with 

the provision of legal services 

authorized pursuant to § 594.506(a) may 

be debited must submit quarterly 

reports no later than 30 days following 

the end of the calendar quarter during 

which the funds were deposited with or 

debited from the account of the legal 

defense fund providing information on 

the funds received by the legal defense 

fund and debits made to the legal 

defense fund during the reporting 

period. Such reports shall specify: 

(A) The individual or entity from 

whom the funds originated and the 

amount of funds received; and 

(B) Any individual or entity to whom 

any payments were made, including, if 

applicable: 

(1) The names of any individuals or 

entities providing related services to the 

U.S. person receiving payment in 

connection with authorized legal 

services, such as private investigators or 

expert witnesses; 

(2) A general description of the 

services provided; and 

(3) The amount of funds paid in 

connection with such services. 

(ii) In the event that no transactions 

occur or no funds are received during 

the reporting period, a statement is to be 

filed to that effect. 

(iii) Reports, which must reference 

this paragraph (b), are to be mailed to: 

Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

and 

Note to paragraph (b)(5) of § 594.517: U.S. 

persons who receive payments in connection 

with legal services authorized pursuant to 

§ 594.506(a) do not need to obtain specific 

authorization to contract for related services 

that are ordinarily incident to the provision 

of those legal services, such as those 

provided by private investigators or expert 

witnesses, or to pay for such services. 

Additionally, U.S. persons do not need to 

obtain specific authorization to provide 

related services that are ordinarily incident to 

the provision of legal services authorized 

pursuant to § 594.506(a). 

(6) Nothing in this paragraph (b) 

authorizes the formation or debiting of 

legal defense funds in connection with 

the provision of legal services 

authorized pursuant to § 594.506(b). 

Note 1 to paragraph (b) of § 594.517: Any 

payment authorized in or pursuant to this 

paragraph that is routed through the U.S. 

financial system should reference this 

paragraph (b) to avoid the blocking of the 

transfer. 

Note 2 to paragraph (b) of § 594.517: Any 

funds remaining in a legal defense fund 

account after all payments of professional 

fees and reimbursement of incurred expenses 

authorized pursuant to this paragraph have 

been made or upon termination of the legal 

services for which payment is authorized 

pursuant to this paragraph are property in 

which the person to or on whose behalf the 

legal services were rendered has an interest 

and is subject to the prohibitions of this part. 

Persons in the possession or control of such 

remaining funds may apply for the 

unblocking of the funds by following the 

procedures set forth at § 501.801 of this 

chapter. 

PART 595—TERRORISM SANCTIONS 

REGULATIONS 

■ 4. The authority citation for part 595 

continues to read as follows: 

Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 

50 U.S.C. 1601–1651, 1701–1706; Pub. L. 

101–410, 104 Stat. 890 (28 U.S.C. 2461 note); 

Pub. L. 110–96, 121 Stat. 1011; E.O. 12947, 

60 FR 5079, 3 CFR, 1995 Comp., p. 319; E.O. 

13099, 63 FR 45167, 3 CFR, 1998 Comp., 

p. 208. 

Subpart E—Licenses, Authorizations, 

and Statements of Licensing Policy 

■ 5. Amend § 595.506 by revising the 

introductory text of paragraph (a), 

redesignating existing paragraphs (b) 

and (c) as paragraphs (c) and (d), 

respectively, and adding new paragraph 

(b) to read as follows: 

§ 595.506 Provision of certain legal 

services authorized. 

(a) The provision of the following 

legal services to or on behalf of persons 

whose property and interests in 

property are blocked pursuant to 

§ 595.201(a) is authorized, provided that 

all receipts of payment of professional 

fees and reimbursement of incurred 

expenses must be specifically licensed 

or otherwise authorized pursuant to this 

part: 

* * * * * 

(b) The provision of legal services not 

otherwise authorized by paragraph (a) of 

this section to or on behalf of persons 

whose property and interests in 

property are blocked pursuant to 

§ 595.201(a) in connection with the 

initiation and conduct of legal, 

arbitration, or administrative 

proceedings before any U.S. federal, 

state, or local court or agency is 

authorized, provided that all receipts of 

payment of professional fees and 

reimbursement of incurred expenses 

must be specifically licensed. 

■ 6. Add new § 595.515 to subpart E to 

read as follows: 


srobinson on DSKHWCL6B1PROD with RULES
75908 Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Rules and Regulations 

§ 595.515 Payments from funds originating 

outside the United States and the formation 

of legal defense funds authorized. 

(a) Payments from funds originating 

outside the United States. Effective 

December 7, 2010, receipts of payment 

of professional fees and reimbursement 

of incurred expenses for the provision of 

legal services authorized pursuant to 

§ 595.506(a) are authorized from funds 

originating outside the United States, 

provided that: 

(1) Prior to receiving payment for 

legal services authorized pursuant to 

§ 595.506(a) rendered to persons whose 

property and interests in property are 

blocked pursuant to § 595.201(a), the 

U.S. person that is an attorney, law firm, 

or legal services organization provides 

to the Office of Foreign Assets Control 

a copy of a letter of engagement or a 

letter of intent to engage specifying the 

services to be performed and signed by 

the individual to whom such services 

are to be provided or, where services are 

to be provided to an entity, by a legal 

representative of the entity. The copy of 

a letter of engagement or a letter of 

intent to engage, accompanied by 

correspondence referencing this 

paragraph (a), is to be mailed to: 

Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

(2) The funds received by U.S. 

persons as payment of professional fees 

and reimbursement of incurred 

expenses for the provision of legal 

services authorized pursuant to 

§ 595.506(a) must not originate from: 

(i) A source within the United States; 

(ii) Any source, wherever located, 

within the possession or control of a 

U.S. person; or 

(iii) Any individual or entity, other 

than the person on whose behalf the 

legal services authorized pursuant to 

§ 595.506(a) are to be provided, whose 

property and interests in property are 

blocked pursuant to any part of this 

chapter or any Executive order; 

Note to paragraph (a)(2) of § 595.515: This 

paragraph authorizes the blocked person on 

whose behalf the legal services authorized 

pursuant to § 595.506(a) are to be provided to 

make payments for authorized legal services 

using funds originating outside the United 

States that were not previously blocked. 

Nothing in this paragraph authorizes 

payments for legal services using funds in 

which any other person whose property and 

interests in property are blocked pursuant to 

§ 595.201(a) or any other part of this chapter 

holds an interest. 

(3) Reports. (i) U.S. persons who 

receive payments in connection with 

legal services authorized pursuant to 

§ 595.506(a) must submit quarterly 

reports no later than 30 days following 

the end of the calendar quarter during 

which the payments were received 

providing information on the funds 

received. Such reports shall specify: 

(A) The individual or entity from 

whom the funds originated and the 

amount of funds received; and 

(B) If applicable: 

(1) The names of any individuals or 

entities providing related services to the 

U.S. person receiving payment in 

connection with authorized legal 

services, such as private investigators or 

expert witnesses; 

(2) A general description of the 

services provided; and 

(3) The amount of funds paid in 

connection with such services. 

(ii) In the event that no transactions 

occur or no funds are received during 

the reporting period, a statement is to be 

filed to that effect. 

(iii) Reports, which must reference 

this paragraph (a), are to be mailed to: 

Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

and 

Note to paragraph (a)(3) of § 595.515: U.S. 

persons who receive payments in connection 

with legal services authorized pursuant to 

§ 595.506(a) do not need to obtain specific 

authorization to contract for related services 

that are ordinarily incident to the provision 

of those legal services, such as those 

provided by private investigators or expert 

witnesses, or to pay for such services. 

Additionally, U.S. persons do not need to 

obtain specific authorization to provide 

related services that are ordinarily incident to 

the provision of legal services authorized 

pursuant to § 595.506(a). 

(4) Nothing in this paragraph (a) 

authorizes the receipt of payment of 

professional fees or reimbursement of 

incurred expenses for the provision of 

legal services authorized pursuant to 

§ 595.506(b). 

Note 1 to paragraph (a) of § 595.515: Any 

payment authorized in or pursuant to this 

paragraph that is routed through the U.S. 

financial system should reference this 

paragraph § 595.515(a) to avoid the blocking 

of the transfer. 

Note 2 to paragraph (a) of § 595.515: 

Nothing in this paragraph authorizes the 

transfer of any blocked property, the debiting 

of any blocked account, the entry of any 

judgment or order that effects a transfer of 

blocked property, or the execution of any 

judgment against property blocked pursuant 

to any Executive order or this Chapter. U.S. 

persons seeking administrative 

reconsideration or judicial review of their 

designation or the blocking of their property 

and interests in property may apply for a 

specific license from the Office of Foreign 

Assets Control to authorize the release of a 

limited amount of blocked funds for the 

payment of legal fees where alternative 

funding sources are not available. For more 

information, see OFAC’s Guidance on the 

Release of Limited Amounts of Blocked 

Funds for Payment of Legal Fees and Costs 

Incurred in Challenging the Blocking of U.S. 

Persons in Administrative or Civil 

Proceedings, which is available at: http:// 

www.treas.gov/resource-center/sanctions/ 

Documents/legal_fee_guide.pdf. 

(b) Legal defense funds. Effective 

December 7, 2010, U.S. persons that are 

attorneys, law firms, or legal services 

organizations are authorized to form 

legal defense funds from which 

payments of professional fees and 

reimbursement for expenses incurred in 

connection with the provision of legal 

services authorized pursuant to 

§ 595.506(a) may be debited provided 

that: 

(1) The legal defense fund must be 

held in a savings or checking account at 

a financial institution located in the 

United States; 

(2) Prior to debiting the legal defense 

fund, the U.S. person responsible for 

establishing the legal defense fund must 

submit the following information to the 

Office of Foreign Assets Control: a copy 

of a letter of engagement or a letter of 

intent to engage specifying the services 

to be performed and signed by the 

individual to whom such services are to 

be provided or, where services are to be 

provided to an entity, by a legal 

representative of the entity; the name of 

the individual or entity responsible for 

establishing the legal defense fund; the 

name of the financial institution at 

which the account for the legal defense 

fund will be held; a point of contact at 

the financial institution holding the 

account for the legal defense fund; and 

the account name and account number 

for the legal defense fund. The foregoing 

information must be accompanied by 

correspondence referencing this 

paragraph § 595.515(b) and is to be 

mailed to: Licensing Division, Office of 

Foreign Assets Control, U.S. Department 

of the Treasury, 1500 Pennsylvania 

Avenue, NW., Annex, Washington, DC 

20220; 

(3) The legal defense fund may not 

receive funds from a person whose 

property and interests in property are 

blocked pursuant to § 595.201(a) or any 

other part of this chapter; 

(4) The U.S. person responsible for 

establishing the legal defense fund must 

notify the financial institution at which 

the account for the legal defense fund is 

held that the account may only be 

debited to make payments of 

professional fees and reimburse 

expenses incurred in connection with 

the provision of legal services 

authorized pursuant to § 595.506(a); 


srobinson on DSKHWCL6B1PROD with RULES
Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Rules and Regulations 75909 

(5) Reports. (i) U.S. persons 

responsible for establishing legal 

defense funds from which payments of 

professional fees and reimbursement for 

expenses incurred in connection with 

the provision of legal services 

authorized pursuant to § 595.506(a) may 

be debited must submit quarterly 

reports no later than 30 days following 

the end of the calendar quarter during 

which the funds were deposited with or 

debited from the account of the legal 

defense fund providing information on 

the funds received by the legal defense 

fund and debits made to the legal 

defense fund during the reporting 

period. Such reports shall specify: 

(A) The individual or entity from 

whom the funds originated and the 

amount of funds received; and 

(B) Any individual or entity to whom 

any payments were made, including, if 

applicable: 

(1) The names of any individuals or 

entities providing related services to the 

U.S. person receiving payment in 

connection with authorized legal 

services, such as private investigators or 

expert witnesses; 

(2) A general description of the 

services provided; and 

(3) The amount of funds paid in 

connection with such services. 

(ii) In the event that no transactions 

occur or no funds are received during 

the reporting period, a statement is to be 

filed to that effect. 

(iii) Reports, which must reference 

this paragraph (b), are to be mailed to: 

Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

and 

Note to paragraph (b)(5) of § 595.515: U.S. 

persons who receive payments in connection 

with legal services authorized pursuant to 

§ 595.506(a) do not need to obtain specific 

authorization to contract for related services 

that are ordinarily incident to the provision 

of those legal services, such as those 

provided by private investigators or expert 

witnesses, or to pay for such services. 

Additionally, U.S. persons do not need to 

obtain specific authorization to provide 

related services that are ordinarily incident to 

the provision of legal services authorized 

pursuant to § 595.506(a). 

(6) Nothing in this paragraph (b) 

authorizes the formation or debiting of 

legal defense funds in connection with 

the provision of legal services 

authorized pursuant to § 595.506(b). 

Note 1 to paragraph (b) of § 595.515: Any 

payment authorized in or pursuant to this 

paragraph that is routed through the U.S. 

financial system should reference this 

paragraph § 595.515(b) to avoid the blocking 

of the transfer. 

Note 2 to paragraph (b) of § 595.515: Any 

funds remaining in a legal defense fund 

account after all payments of professional 

fees and reimbursement of incurred expenses 

authorized pursuant to this paragraph have 

been made or upon termination of the legal 

services for which payment is authorized 

pursuant to this paragraph are property in 

which the person to or on whose behalf the 

legal services were rendered has an interest 

and is subject to the prohibitions of this part. 

Persons in the possession or control of such 

remaining funds may apply for the 

unblocking of the funds by following the 

procedures set forth at § 501.801 of this 

chapter. 

PART 597—FOREIGN TERRORIST 

ORGANIZATIONS SANCTIONS 

REGULATIONS 

■ 7. The authority citation for part 597 

continues to read as follows: 

Authority: 31 U.S.C. 321(b); Pub. L. 101– 

410, 104 Stat. 890 (28 U.S.C. 2461 note); 

Pub. L. 104–132, 110 Stat. 1214, 1248–53 

(8 U.S.C. 1189, 18 U.S.C. 2339B). 

Subpart E—Licenses, Authorizations, 

and Statements of Licensing Policy 

■ 8. Amend § 597.505 by revising the 

introductory text and adding a new note 

to the section to read as follows: 

§ 597.505 Payment for certain legal 

services. 

Except as otherwise authorized, 

specific licenses may be issued, on a 

case-by-case basis, authorizing receipt of 

payment of professional fees and 

reimbursement of incurred expenses 

through a U.S. financial institution for 

the following legal services by U.S. 

persons: 

* * * * * 

Note to § 597.505: See § 597.513 of this part 

for authorized mechanisms for payment 

through a U.S. financial institution of 

professional fees and reimbursement of 

incurred expenses for legal services specified 

in this section provided by a U.S. person to 

or on behalf of a foreign terrorist organization 

or an agent thereof. 

■ 9. Add new § 597.513 to subpart E to 

read as follows: 

§ 597.513 Payments from funds originating 

outside the United States and the formation 

of legal defense funds authorized. 

(a) Payments from funds originating 

outside the United States. Effective 

December 7, 2010, receipts of payment 

through a U.S. financial institution of 

professional fees and reimbursement of 

incurred expenses for the provision of 

legal services specified in § 597.505 are 

authorized from funds originating 

outside the United States, provided that: 

(1) Prior to receiving payment through 

a U.S. financial institution for legal 

services specified in § 597.505 rendered 

to a foreign terrorist organization or 

agent thereof, the U.S. person that is an 

attorney, law firm, or legal services 

organization provides to the Office of 

Foreign Assets Control a copy of a letter 

of engagement or a letter of intent to 

engage specifying the services to be 

performed and signed by the individual 

to whom such services are to be 

provided or, where services are to be 

provided to an entity, by a legal 

representative of the entity. The copy of 

a letter of engagement or a letter of 

intent to engage, accompanied by 

correspondence referencing this 

paragraph § 597.513(a), is to be mailed 

to: Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

(2) The funds received by U.S. 

persons through a U.S. financial 

institution as payment of professional 

fees and reimbursement of incurred 

expenses for the provision of legal 

services specified in § 597.505 must not 

originate from: 

(i) A source within the United States; 

(ii) Any source, wherever located, 

within the possession or control of a 

U.S. person; or 

(iii) Any individual or entity, other 

than the person on whose behalf the 

legal services specified in § 597.505 are 

to be provided, whose property and 

interests in property are blocked 

pursuant to any part of this chapter or 

any Executive order; 

Note to paragraph (a)(2) of § 597.513: This 

paragraph authorizes the person on whose 

behalf the legal services specified in 

§ 597.505 are to be provided to make 

payments for specified legal services using 

funds originating outside the United States 

that were not previously blocked. Nothing in 

this paragraph authorizes payments for legal 

services using funds in which any other 

person whose assets and funds are subject to 

the prohibitions in § 597.201(a) or whose 

property and interests in property are 

blocked pursuant to any other part of this 

chapter holds an interest. 

(3) Reports. (i) U.S. persons who 

receive payments in connection with 

legal services specified in § 597.505 

must submit quarterly reports no later 

than 30 days following the end of the 

calendar quarter during which the 

payments were received providing 

information on the funds received. Such 

reports shall specify: 

(A) The individual or entity from 

whom the funds originated and the 

amount of funds received; and 

(B) If applicable: 

(1) The names of any individuals or 

entities providing related services to the 

U.S. person receiving payment in 


srobinson on DSKHWCL6B1PROD with RULES
75910 Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Rules and Regulations 

connection with specified legal services, 

such as private investigators or expert 

witnesses; 

(2) A general description of the 

services provided; and 

(3) The amount of funds paid in 

connection with such services. 

(ii) In the event that no transactions 

occur or no funds are received during 

the reporting period, a statement is to be 

filed to that effect. 

(iii) Reports, which must reference 

this paragraph (a), are to be mailed to: 

Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

and 

Note to paragraph (a)(3) of § 597.513: U.S. 

persons who receive payments in connection 

with legal services specified in § 597.505 do 

not need to obtain specific authorization to 

make payments through a U.S. financial 

institution for related services that are 

ordinarily incident to the provision of those 

legal services, such as those provided by 

private investigators or expert witnesses. 

(4) Nothing in this paragraph (a) 

authorizes the receipt of payment 

through a U.S. financial institution of 

professional fees or reimbursement of 

incurred expenses for the provision of 

legal services not specified in § 597.505. 

Note 1 to paragraph (a) of § 597.513: Any 

payment authorized in or pursuant to this 

paragraph that is routed through the U.S. 

financial system should reference this 

paragraph (a) to avoid the blocking of the 

transfer. 

Note 2 to paragraph (a) of § 597.513: 

Nothing in this paragraph authorizes the 

transfer of any blocked property, the debiting 

of any blocked account, the entry of any 

judgment or order that effects a transfer of 

blocked property, or the execution of any 

judgment against property blocked pursuant 

to any Executive order or this chapter. U.S. 

persons seeking administrative 

reconsideration or judicial review of their 

designation or the blocking of their property 

and interests in property may apply for a 

specific license from the Office of Foreign 

Assets Control to authorize the release of a 

limited amount of blocked funds for the 

payment of legal fees where alternative 

funding sources are not available. For more 

information, see OFAC’s Guidance on the 

Release of Limited Amounts of Blocked 

Funds for Payment of Legal Fees and Costs 

Incurred in Challenging the Blocking of U.S. 

Persons in Administrative or Civil 

Proceedings, which is available at: http:// 

www.treas.gov/resource-center/sanctions/ 

Documents/legal_fee_guide.pdf. 

(b) Legal defense funds. Effective 

December 7, 2010, U.S. persons that are 

attorneys, law firms, or legal services 

organizations are authorized to form 

legal defense funds from which 

payments of professional fees and 

reimbursement for expenses incurred in 

connection with the provision of legal 

services specified in § 597.505 may be 

debited provided that: 

(1) The legal defense fund must be 

held in a savings or checking account at 

a financial institution located in the 

United States; 

(2) Prior to debiting the legal defense 

fund, the U.S. person responsible for 

establishing the legal defense fund must 

submit the following information to the 

Office of Foreign Assets Control: A copy 

of a letter of engagement or a letter of 

intent to engage specifying the services 

to be performed and signed by the 

individual to whom such services are to 

be provided or, where services are to be 

provided to an entity, by a legal 

representative of the entity; the name of 

the individual or entity responsible for 

establishing the legal defense fund; the 

name of the financial institution at 

which the account for the legal defense 

fund will be held; a point of contact at 

the financial institution holding the 

account for the legal defense fund; and 

the account name and account number 

for the legal defense fund. The foregoing 

information must be accompanied by 

correspondence referencing this 

paragraph (b) and is to be mailed to: 

Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

(3) The legal defense fund may not 

receive funds from a person whose 

assets and funds are subject to the 

prohibitions in § 597.201(a) or whose 

property and interests in property are 

blocked pursuant to any other part of 

this chapter; 

(4) The U.S. person responsible for 

establishing the legal defense fund must 

notify the financial institution at which 

the account for the legal defense fund is 

held that the account may only be 

debited to make payments of 

professional fees and reimburse 

expenses incurred in connection with 

the provision of legal services specified 

in § 597.505; 

(5) Reports. (i) U.S. persons 

responsible for establishing legal 

defense funds from which payments of 

professional fees and reimbursement for 

expenses incurred in connection with 

the provision of legal services specified 

in § 597.505 may be debited must 

submit quarterly reports no later than 30 

days following the end of the calendar 

quarter during which the funds were 

deposited with or debited from the 

account of the legal defense fund 

providing information on the funds 

received by the legal defense fund and 

debits made to the legal defense fund 

during the reporting period. Such 

reports shall specify: 

(A) The individual or entity from 

whom the funds originated and the 

amount of funds received; and 

(B) Any individual or entity to whom 

any payments were made, including, if 

applicable: 

(1) The names of any individuals or 

entities providing related services to the 

U.S. person receiving payment in 

connection with specified legal services, 

such as private investigators or expert 

witnesses; 

(2) A general description of the 

services provided; and 

(3) The amount of funds paid in 

connection with such services. 

(ii) In the event that no transactions 

occur or no funds are received during 

the reporting period, a statement is to be 

filed to that effect. 

(iii) Reports, which must reference 

this paragraph (b), are to be mailed to: 

Licensing Division, Office of Foreign 

Assets Control, U.S. Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Annex, Washington, DC 20220; 

and 

Note to paragraph (b)(5) of § 597.513: U.S. 

persons who receive payments in connection 

with legal services specified in § 597.505 do 

not need to obtain specific authorization to 

make payments through a U.S. financial 

institution for related services that are 

ordinarily incident to the provision of those 

legal services, such as those provided by 

private investigators or expert witnesses. 

(6) Nothing in this paragraph (b) 

authorizes the formation or debiting of 

legal defense funds in connection with 

the provision of legal services not 

specified in § 597.505. 

Note 1 to paragraph (b) of § 597.513: Any 

payment authorized in or pursuant to this 

paragraph that is routed through the U.S. 

financial system should reference this 

paragraph (b) to avoid the blocking of the 

transfer. 

Note 2 to paragraph (b) of § 597.513: Any 

funds remaining in a legal defense fund 

account after all payments of professional 

fees and reimbursement of incurred expenses 

authorized pursuant to this paragraph have 

been made or upon termination of the legal 

services for which payment is authorized 

pursuant to this paragraph are deemed to be 

funds of the foreign terrorist organization or 

agent thereof to or on whose behalf the legal 

services were rendered and subject to the 

prohibitions of this part. U.S. financial 

institutions in the possession or control of 

such remaining funds may apply for the 

unblocking of the funds by following the 

procedures set forth at § 501.801 of this 

chapter. 


srobinson on DSKHWCL6B1PROD with RULES
Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Rules and Regulations 75911 

Dated: December 1, 2010. 

Adam J. Szubin, 

Director, Office of Foreign Assets Control. 

[FR Doc. 2010–30520 Filed 12–6–10; 8:45 am] 

BILLING CODE 4810–AL–P 

DEPARTMENT OF TRANSPORTATION 

Federal Railroad Administration 

49 CFR Part 225 

[FRA–2008–0136, Notice No. 3] 

RIN 2130–ZA04 

Adjustment of Monetary Threshold for 

Reporting Rail Equipment Accidents/ 

Incidents for Calendar Year 2011 

AGENCY: Federal Railroad 

Administration (FRA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: This rule increases the rail 

equipment accident/incident reporting 

threshold from $9,200 to $9,400 for 

certain railroad accidents/incidents 

involving property damage that occur 

during calendar year 2011. This action 

is needed to ensure that FRA’s reporting 

requirements reflect cost increases that 

have occurred since the reporting 

threshold was last computed in 

December of 2009. 

DATES: This regulation is effective 

January 1, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Arnel B. Rivera, Staff Director, U.S. 

Department of Transportation, Federal 

Railroad Administration, Office of 

Safety Analysis, RRS–22, Mail Stop 25, 

West Building 3rd Floor, Room W33– 

306, 1200 New Jersey Ave., SE., 

Washington, DC 20590 (telephone 202– 

493–1331); or Gahan Christenson, Trial 

Attorney, U.S. Department of 

Transportation, Federal Railroad 

Administration, Office of Chief Counsel, 

RCC–10, Mail Stop 10, West Building 

3rd Floor, Room W31–204, 1200 New 

Jersey Ave., SE., Washington, DC 20590 

(telephone 202–493–1381). 

SUPPLEMENTARY INFORMATION: 

Background 

A ‘‘rail equipment accident/incident’’ 

is a collision, derailment, fire, 

explosion, act of God, or other event 

involving the operation of railroad ontrack equipment (standing or moving) 

that results in damages to railroad ontrack equipment, signals, tracks, track 

structures, or roadbed, including labor 

costs and the costs for acquiring new 

equipment and material, greater than 

the reporting threshold for the year in 

which the event occurs. 49 CFR 

225.19(c). Each rail equipment accident/ 

incident must be reported to FRA using 

the Rail Equipment Accident/Incident 

Report (Form FRA F 6180.54). 49 CFR 

225.19(b) and (c). As revised, effective 

in 1997, paragraphs (c) and (e) of 49 

CFR 225.19 provide that the dollar 

figure that constitutes the reporting 

threshold for rail equipment accidents/ 

incidents will be adjusted, if necessary, 

every year in accordance with the 

procedures outlined in appendix B to 

part 225 to reflect any cost increases or 

decreases. 

New Reporting Threshold 

Approximately one year has passed 

since the rail equipment accident/ 

incident reporting threshold was 

revised. 74 FR 65458 (December 10, 

2009). Consequently, FRA has 

recalculated the threshold, as required 

by § 225.19(c), based on increased costs 

for labor and increased costs for 

equipment. FRA has determined that 

the current reporting threshold of 

$9,200, which applies to rail equipment 

accidents/incidents that occur during 

calendar year 2010, should increase by 

$200 to $9,400 for equipment accidents/ 

incidents occurring during calendar 

year 2011, effective January 1, 2011. The 

specific inputs to the equation set forth 

in appendix B (i.e., Tnew = Tprior * [1 

+ 0.4(Wnew¥Wprior)/Wprior + 

0.6(Enew¥Eprior)/100]) to part 225 are: 

Tprior Wnew Wprior Enew Eprior 

$9,200 $24.73606 $24.04379 184.56666 182.03333 

Where: Tnew = New threshold; Tprior 

= Prior threshold (with reference to the 

threshold, ‘‘prior’’ refers to the previous 

threshold rounded to the nearest $100, 

as reported in the Federal Register); 

Wnew = New average hourly wage rate, 

in dollars; Wprior = Prior average hourly 

wage rate, in dollars; Enew = New 

equipment average PPI value; Eprior = 

Prior equipment average PPI value. 

Using the above figures, the calculated 

new threshold, (Tnew) is $9,445.80, 

which is rounded to the nearest $100 for 

a final new reporting threshold of 

$9,400. 

Notice and Comment Procedures and 

Effective Date 

In this rule, FRA has recalculated the 

monetary reporting threshold based on 

the formula discussed in detail and 

adopted, after notice and comment, in 

the final rule published December 20, 

2005, 70 FR 75414. FRA has found that 

both the current cost data inserted into 

this pre-existing formula and the 

original cost data that they replace were 

obtained from reliable Federal 

government sources. FRA has found that 

this rule imposes no additional burden 

on any person, but rather provides a 

benefit by permitting the valid 

comparison of accident data over time. 

Accordingly, finding that notice and 

comment procedures are either 

impracticable, unnecessary, or contrary 

to the public interest, FRA is proceeding 

directly to the final rule. 

FRA regularly recalculates the 

monetary reporting threshold using a 

pre-existing formula near the end of 

each calendar year. Therefore, any 

person affected by this rule anticipates 

the on-going adjustment of the threshold 

and has reasonable time to make any 

minor changes necessary to come into 

compliance with the regulations. FRA 

attempts to use the most recent data 

available to calculate the updated 

reporting threshold prior to the next 

calendar year. FRA has found that 

issuing the rule in December of each 

calendar year and making the rule 

effective on January 1, of the next year, 

allows FRA to use the most up-to-date 

data when calculating the reporting 

threshold and to compile data that 

accurately reflects rising wages and 

equipment costs. As such, FRA has 

found that it has good cause to make the 

effective date January 1, 2011. 

Regulatory Impact 

Executive Order 12866 and DOT 

Regulatory Policies and Procedures 

This rule has been evaluated in 

accordance with existing policies and 

procedures, and determined to be nonsignificant under both Executive Order 

12866 and DOT policies and procedures 

(44 FR 11034 (Feb. 26, 1979)). 

Regulatory Flexibility Act 

The Regulatory Flexibility Act of 1980 

(5 U.S.C. 601–612) requires a review of 

proposed and final rules to assess their 

impact on small entities, unless the 

Secretary certifies that the rule will not 

have a significant economic impact on 

a substantial number of small entities. 

Pursuant to Section 312 of the Small 


srobinson on DSKHWCL6B1PROD with RULES