Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Rules and Regulations 28855 

regulations were last published under 

section 415. 

DATES: This correction is effective May 

23, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Vernon S. Carter at (202) 622–6060 or 

Linda S. F. Marshall at (202) 622–6090 

(not toll-free numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

The correction notice that is the 

subject of this document is under 

sections 401(a), 401(a)(4), 401(a)(9), 

401(k), 402, 414(s), 415, 416, 457, and 

924 of the Internal Revenue Code. 

Need for Correction 

As published, final regulations (TD 

9319) contain an error that may prove to 

be misleading and is in need of 

clarification. 

Correction of Publication 

Accordingly, the publication of the 

final regulations (TD 9319), which was 

the subject of FR Doc. E7–5750, is 

corrected as follows: 

On page 16883, column 2, in the 

preamble, under the paragraph heading 

‘‘C. Determination of High-3 Average 

Compensation’’, first line from the 

bottom of the last paragraph of that 

heading, the language ‘‘participant in 

rehired.’’ is corrected to read 

‘‘participant is rehired.’’. 

LaNita Van Dyke, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel (Procedure and Administration). 

[FR Doc. E7–9878 Filed 5–22–07; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Office of Foreign Assets Control 

31 CFR Part 593 

Former Liberian Regime of Charles 

Taylor Sanctions Regulations 

AGENCY: Office of Foreign Assets 

Control, Treasury. 

ACTION: Final rule. 

SUMMARY: The Office of Foreign Assets 

Control of the U.S. Department of the 

Treasury is adding new part 593 to 

chapter V of 31 CFR to carry out the 

purposes of Executive Order 13348 of 

July 22, 2004, ‘‘Blocking Property of 

Certain Persons and Prohibiting the 

Importation of Certain Goods from 

Liberia.’’ These regulations implement 

targeted sanctions directed at the regime 

of former President Charles Taylor. The 

sanctions are not directed against the 

country of Liberia, the Government of 

Liberia, or the Central Bank of Liberia. 

DATES: Effective Date: May 23, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Assistant Director for Compliance, 

Outreach & Implementation, tel.: 202/ 

622–2490, Assistant Director for 

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 the Office of 

Foreign Assets Control (‘‘OFAC’’) are 

available from OFAC’s Web site (http:// 

www.treas.gov/ofac) or via facsimile 

through a 24-hour fax-on demand 

service, tel.: (202) 622–0077. 

Background 

On July 22, 2004, the President, 

invoking the authority of, inter alia, the 

International Emergency Economic 

Powers Act (50 U.S.C. 1701–1706) 

(‘‘IEEPA’’) and section 5 of the United 

Nations Participation Act (22 U.S.C. 

287c), issued Executive Order 13348 (69 

FR 44885, July 27, 2004) (’’the Order’’), 

effective at 12:01 a.m. eastern daylight 

time on July 23, 2004. The Order also 

noted United Nations Security Council 

Resolutions 1521 of December 22, 2003, 

and 1532 of March 12, 2004, which, 

inter alia, called on member states to 

impose an asset freeze on certain senior 

members of former Liberian President 

Charles Taylor’s government and certain 

other persons and to prevent the 

importation into their territories of all 

round logs and timber products 

originating in Liberia. 

Section 1(a) of the Order blocks, with 

certain exceptions, all property and 

interests in property that are in the 

United States, that hereafter come 

within the United States, or that are or 

hereafter come within the possession or 

control of United States persons, of: (1) 

The persons listed in an Annex to the 

Order; and (2) any person determined 

by the Secretary of the Treasury, in 

consultation with the Secretary of State: 

• To be or have been an immediate 

family member of Charles Taylor; 

• To have been a senior official of the 

former Liberian regime headed by 

Charles Taylor or otherwise to have 

been or be a close ally or associate of 

Charles Taylor or the former Liberian 

regime; 

• To have materially assisted, 

sponsored, or provided financial, 

material, or technological support for, or 

goods or services in support of, the 

unlawful depletion of Liberian 

resources, the removal of Liberian 

resources from that country, and the 

secreting of Liberian funds and property 

by any person whose property and 

interests in property are blocked 

pursuant to the Order; or 

• To be owned or controlled by, or 

acting or purporting to act for or on 

behalf of, directly or indirectly, any 

person whose property and interests in 

property are blocked pursuant to the 

Order. 

In Section 1(b) of the Order, the 

President determined that the 

exemption from IEEPA regulation 

provided in section 203(b)(2) of IEEPA 

(50 U.S.C. 1702(b)(2)) for the making of 

donations of the types of articles 

specified in such section (i.e., articles, 

such as food, clothing, and medicine, 

intended to be used to relieve human 

suffering) by, to, or for the benefit of, 

any person whose property and interests 

in property are blocked pursuant to the 

Order would seriously impair his ability 

to deal with the national emergency 

declared in the Order, and prohibited 

such donations. Accordingly, the 

donation of such items is not exempted 

from the scope of these regulations and 

is prohibited, unless authorized by 

OFAC. 

Section 1(c) of the Order provides that 

the blocking of property and interests in 

property includes, but is not limited to, 

the making or receiving of any 

contribution or provision of funds, 

goods or services by, to, or for the 

benefit of, any person listed in or 

designated pursuant to the Order, and 

the receipt of any contribution or 

provision of funds, goods, or services 

from any such person. 

Section 2 of the Order prohibits, with 

certain exceptions, the direct or indirect 

importation into the United States of 

any round log or timber product 

originating in Liberia. 

Section 3 of the Order prohibits any 

transaction by a United States person 

that evades or avoids, or has the 

purpose of evading or avoiding, or 

attempts to violate, any of the 

prohibitions set forth in the Order, as 

well as any conspiracy formed to violate 

such prohibitions. 

Section 6 of the Order authorizes the 

Secretary of the Treasury, in 

consultation with the Secretary of State, 

to take such actions, including the 

promulgation of rules and regulations, 

as may be necessary to carry out the 

purposes of the Order. Acting under 

authority delegated by the Secretary of 


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28856 Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Rules and Regulations 

the Treasury, the Department of the 

Treasury’s Office of Foreign Assets 

Control (‘‘OFAC’’) is promulgating these 

Former Liberian Regime of Charles 

Taylor Sanctions Regulations, 31 CFR 

part 593 (the ‘‘Regulations’’). 

These regulations are promulgated in 

furtherance of the sanctions set forth in 

Executive Order 13348, which are 

targeted sanctions directed at the regime 

of former President Charles Taylor. The 

sanctions are not directed against the 

country of Liberia, the Government of 

Liberia, or the Central Bank of Liberia. 

They do not generally prohibit the 

provision of banking services to the 

country of Liberia, including the 

maintenance of correspondent banking 

relationships with Liberian banks, 

unless the bank in question, or any 

other person engaged in the transaction, 

is a person whose property and interests 

in property are blocked pursuant to 

§ 593.201(a). In addition, the 

importation into the United States of 

rough diamonds from Liberia is 

governed by the Rough Diamonds 

Control Regulations, 31 CFR part 592. 

Subpart B of the Regulations 

implements the prohibitions contained 

in Sections 1, 2, and 3 of the Order. See 

§§ 593.201, 593.205, and 593.206. 

Appendix A to 31 CFR chapter V has 

previously been amended to incorporate 

the names of persons set forth in the 

Annex to the Order. Persons identified 

in the Annex to the Order or designated 

by or under the authority of the 

Secretary of the Treasury pursuant to 

the Order are referred to throughout the 

Regulations as ‘‘persons whose property 

and interests in property are blocked 

pursuant to § 593.201(a).’’ Their names 

are or will be published on OFAC’s 

Specially Designated Nationals and 

Blocked Persons List, which is 

accessible via OFAC’s Web site, 

announced in the Federal Register, and 

incorporated on an ongoing basis into 

appendix A to 31 CFR chapter V, which 

lists persons who are the targets of 

various sanctions programs 

administered by OFAC. 

Sections 593.202 and 593.203 of 

subpart B detail the effect of transfers of 

blocked property in violation of the 

Regulations and set forth the 

requirement to hold blocked funds, such 

as currency, bank deposits, or liquidated 

financial obligations, in interest-bearing 

blocked accounts. Section 593.204 of 

subpart B provides that all expenses 

incident to the maintenance of blocked 

physical property shall be the 

responsibility of the owners and 

operators of such property, and that 

such expenses shall not be met from 

blocked funds. The section further 

provides that blocked property may, in 

the discretion of the Director of OFAC, 

be sold or liquidated and the net 

proceeds placed in a blocked interestbearing account in the name of the 

owner of the property. 

Section 593.205 sets forth the 

prohibition contained in Section 2 of 

the Order with respect to the 

importation into the United States of 

round logs or timber products from 

Liberia. However, in Resolution 1689 of 

June 20, 2006, the United Nations 

Security Council decided to lift the 

multilateral prohibition on importation 

of round logs and timber products set 

forth in paragraph 10 of Resolution 

1521. In accordance with the decision of 

the Security Council in Resolution 1689, 

OFAC is issuing § 593.510, a general 

license authorizing the importation into 

the United States of round logs and 

timber products originating in Liberia. 

Subpart C of part 593 defines key 

terms used throughout the Regulations, 

and subpart D sets forth interpretive 

sections regarding the general 

prohibitions contained in subpart B. 

Transactions otherwise prohibited 

under part 593 but found to be 

consistent with U.S. policy may be 

authorized by one of the general 

licenses contained in subpart E or by a 

specific license issued pursuant to the 

procedures described in subpart E of 31 

CFR part 501. 

Subpart F of part 593 refers to subpart 

C of part 501 for applicable 

recordkeeping and reporting 

requirements. Subpart G describes the 

civil and criminal penalties applicable 

to violations of the Regulations, as well 

as the procedures governing the 

potential imposition of a civil monetary 

penalty. 

Subpart H of part 593 refers to subpart 

D of part 501 for applicable provisions 

relating to administrative procedures. 

Subpart I of the Regulations sets forth a 

Paperwork Reduction Act notice. 

Public Participation 

Because the Regulations involve a 

foreign affairs function, the provisions 

of Executive Order 12866 and 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 the Regulations 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 in 31 CFR Part 593 

Administrative practice and 

procedure, Banks, Banking, Blocking of 

assets, Credit, Foreign trade, Imports, 

Liberia, Penalties, Reporting and 

recordkeeping requirements, Securities. 

■ For the reasons set forth in the 

preamble, the Office of Foreign Assets 

Control adds part 593 to 31 CFR Chapter 

V to read as follows: 

PART 593—FORMER LIBERIAN 

REGIME OF CHARLES TAYLOR 

SANCTIONS REGULATIONS 

Subpart A—Relation of This Part to Other 

Laws and Regulations 

Sec. 

593.101 Relation of this part to other laws 

and regulations. 

Subpart B—Prohibitions 

593.201 Prohibited transactions involving 

blocked property. 

593.202 Effect of transfers violating the 

provisions of this part. 

593.203 Holding of blocked physical funds 

in interest-bearing accounts; investment 

and reinvestment. 

593.204 Expenses of maintaining blocked 

physical property; liquidation of blocked 

account. 

593.205 Prohibition on the importation of 

any round log or timber product 

originating in Liberia. 

593.206 Evasions; attempts; conspiracies. 

Subpart C—General Definitions 

593.301 Blocked account; blocked property. 

593.302 Effective date. 

593.303 Entity. 

593.304 Interest. 

593.305 Licenses; general and specific. 

593.306 Originating in Liberia. 

593.307 Person. 

593.308 Property; property interest. 

593.309 Round log or timber product. 

593.310 Transfer. 

593.311 United States. 

593.312 U.S. financial institution. 

593.313 United States person; U.S. person. 

Subpart D—Interpretations 

593.401 Reference to amended sections. 

593.402 Effect of amendment. 

593.403 Termination and acquisition of an 

interest in blocked property. 

593.404 Transactions ordinarily incident to 

a licensed transaction. 

593.405 Provision of services. 

593.406 Offshore transactions. 

593.407 Payments from blocked accounts to 

satisfy obligations prohibited. 


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593.408 Charitable Contributions. 

593.409 Credit extended and cards issued 

by U.S. financial institutions. 

593.410 Setoffs prohibited. 

593.411 Importation into the United States. 

593.412 Release of any round log or timber 

product originating in Liberia from a 

bonded warehouse or foreign trade zone. 

593.413 Transshipments or transit through 

the United States prohibited. 

Subpart E—Licenses, Authorizations and 

Statements of Licensing Policy 

593.501 General and specific licensing 

procedures. 

593.502 Effect of license or authorization. 

593.503 Exclusion from licenses. 

593.504 Payments and transfers to blocked 

accounts in U.S. financial institutions. 

593.505 Entries in certain accounts for 

normal service charges authorized. 

593.506 Investment and reinvestment of 

certain funds. 

593.507 Provision of certain legal services 

authorized. 

593.508 Authorization of emergency 

medical services. 

593.509 Transactions related to mail 

authorized. 

593.510 Transactions related to the 

importation of any round log and timber 

product originating in Liberia 

authorized. 

Subpart F—Reports 

593.601 Records and reports. 

Subpart G—Penalties 

593.701 Penalties. 

593.702 Prepenalty notice. 

593.703 Response to prepenalty notice; 

informal settlement. 

593.704 Penalty imposition or withdrawal. 

593.705 Administrative collection; referral 

to United States Department of Justice. 

Subpart H—Procedures 

593.801 Procedures. 

593.802 Delegation by the Secretary of the 

Treasury. 

Subpart I—Paperwork Reduction Act 

593.901 Paperwork Reduction Act notice. 

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

50 U.S.C. 1601–1651, 1701–1706; 22 U.S.C. 

287c; Pub. L. 109–177, 120 Stat. 192; E.O. 

13348, 69 FR 44885, 3 CFR, 2004 Comp., p. 

189. 

Subpart A—Relation of This Part to 

Other Laws and Regulations 

§ 593.101 Relation of this part to other 

laws and regulations. 

This part is separate from, and 

independent of, the other parts of this 

chapter, with the exception of part 501 

of this chapter, the recordkeeping and 

reporting requirements and license 

application and other procedures of 

which apply to this part. Actions taken 

pursuant to part 501 of this chapter with 

respect to the prohibitions contained in 

this part are considered actions taken 

pursuant to this part. Differing foreign 

policy and national security 

circumstances may result in differing 

interpretations of similar language 

among the parts of this chapter. No 

license or authorization contained in or 

issued pursuant to any other provision 

of law or regulation authorizes any 

transaction prohibited by this part. No 

license contained in or issued pursuant 

to this part relieves the involved parties 

from complying with any other 

applicable laws or regulations. 

Subpart B—Prohibitions 

§ 593.201 Prohibited transactions 

involving blocked property. 

(a) Except as authorized by 

regulations, orders, directives, rulings, 

instructions, licenses or otherwise, and 

notwithstanding any contracts entered 

into or any license or permit granted 

prior to the effective date, property and 

interests in property that are in the 

United States, that hereafter come 

within the United States, or that are or 

hereafter come within the possession or 

control of U.S. persons, including their 

overseas branches, of the following 

persons are blocked and may not be 

transferred, paid, exported, withdrawn, 

or otherwise dealt in: 

(1) Any person listed in the Annex to 

Executive Order 13348 of July 22, 2004 

(69 FR 44885, July 27, 2004); and 

(2) Any person determined by the 

Secretary of the Treasury, in 

consultation with the Secretary of State: 

(i) To be or have been an immediate 

family member of Charles Taylor; 

(ii) To have been a senior official of 

the former Liberian regime headed by 

Charles Taylor or otherwise to have 

been or be a close ally or associate of 

Charles Taylor or the former Liberian 

regime; 

(iii) To have materially assisted, 

sponsored, or provided financial, 

material, or technological support for, or 

goods or services in support of, the 

unlawful depletion of Liberian 

resources, the removal of Liberian 

resources from that country, and the 

secreting of Liberian funds and property 

by any person whose property and 

interests in property are blocked 

pursuant to this paragraph (a); or 

(iv) To be owned or controlled by, or 

acting or purporting to act for or on 

behalf of, directly or indirectly, any 

person whose property and interests in 

property are blocked pursuant to this 

paragraph (a). 

Note to paragraph (a) of § 593.201. The 

names of persons whose property and 

interests in property are blocked pursuant to 

paragraph (a) of this section are published on 

the Office of Foreign Assets Control’s 

Specially Designated Nationals and Blocked 

Persons List (the ‘‘SDN List’’), which is 

accessible via the Office of Foreign Assets 

Control’s Web site, announced in the Federal 

Register, and incorporated on an ongoing 

basis with the identifier [LIBERIA] into 

Appendix A to 31 CFR chapter V. In 

addition, section 203 of the International 

Emergency Economic Powers Act (50 U.S.C. 

1701–1706) (‘‘IEEPA’’) explicitly authorizes 

the blocking of property and interests in 

property of a person or entity during the 

pendency of an investigation. The names of 

such persons also are published on the SDN 

List, announced in the Federal Register, and 

incorporated on an ongoing basis with the 

identifier [BPI–LIBERIA] into Appendix A to 

31 CFR chapter V. Sections 501.806 and 

501.807 of this chapter V describe the 

procedures to be followed by persons 

seeking, respectively, the unblocking of 

funds that they believe were blocked due to 

mistaken identity, or administrative 

reconsideration of their listing or designation 

pursuant to § 593.201(a). 

(b) The blocking of property and 

interests in property pursuant to 

§ 593.201(a) includes, but is not limited 

to, the prohibition of the making or 

receiving by a United States person of 

any contribution or provision of funds, 

goods, or services by, to, or for the 

benefit of a person whose property and 

interests in property are blocked 

pursuant to § 593.201(a). 

(c) Unless otherwise authorized by 

this part or by a specific license 

expressly referring to this section, any 

dealing in any security (or evidence 

thereof) held within the possession or 

control of a U.S. person and either 

registered or inscribed in the name of, 

or known to be held for the benefit of, 

or issued by, any person whose property 

and interests in property are blocked 

pursuant to § 593.201(a) is prohibited. 

This prohibition includes but is not 

limited to the transfer (including the 

transfer on the books of any issuer or 

agent thereof), disposition, 

transportation, importation, exportation, 

or withdrawal of, or the endorsement or 

guaranty of signatures on, any such 

security on or after the effective date. 

This prohibition applies irrespective of 

the fact that at any time (whether prior 

to, on, or subsequent to the effective 

date) the registered or inscribed owner 

of any such security may have or might 

appear to have assigned, transferred, or 

otherwise disposed of the security. 

§ 593.202 Effect of transfers violating the 

provisions of this part. 

(a) Any transfer after the effective date 

that is in violation of any provision of 

this part or of any regulation, order, 

directive, ruling, instruction, or license 

issued pursuant to this part, and that 

involves any property or interest in 

property blocked pursuant to 

§ 593.201(a), is null and void and shall 


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not be the basis for the assertion or 

recognition of any interest in or right, 

remedy, power, or privilege with respect 

to such property or property interests. 

(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 

any interest in, any property or interest 

in property blocked pursuant to 

§ 593.201(a), unless the person with 

whom such property is held or 

maintained, prior to that 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 make it 

enforceable to the same extent that it 

would be valid or enforceable but for 

the provisions of IEEPA, Executive 

Order 13348, this part, and any 

regulation, order, directive, ruling, 

instruction, or license issued pursuant 

to this part. 

(d) Transfers of property that 

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 person with 

whom such property is or was held or 

maintained (and as to such person only) 

in cases in which such person 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 person with whom such 

property is or was held or maintained; 

(2) The person with whom such 

property is or was held or maintained 

did not have reasonable cause to know 

or suspect, in view of all the facts and 

circumstances known or available to 

such person, that such transfer required 

a license or authorization issued 

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 

withholding of material facts or was 

otherwise fraudulently obtained; and 

(3) The person with whom such 

property is or was 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 

issued pursuant to this part; 

(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 withholding of material facts or 

was otherwise fraudulently obtained. 

Note to paragraph (d) of § 593.202. 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 (d)(2) of this section 

have been satisfied. 

(e) Except to the extent otherwise 

provided by law, unless licensed 

pursuant to this part, any attachment, 

judgment, decree, lien, execution, 

garnishment, or other judicial process is 

null and void with respect to any 

property in which, on or since the 

effective date, there existed an interest 

of a person whose property and interests 

in property are blocked pursuant to 

§ 593.201(a). 

§ 593.203 Holding of blocked funds in 

interest-bearing accounts; investment and 

reinvestment. 

(a) Except as provided in paragraph 

(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 § 593.201(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 that are commercially 

reasonable; or 

(ii) With a broker or dealer registered 

with the Securities and Exchange 

Commission under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.), 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 subaccount, 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 

§ 593.201(a) 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 

§ 593.201(a) may continue to be held in 

the same type of accounts or 

instruments, provided the funds earn 

interest at rates that 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 § 593.201(a). 

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 that provides immediate 

financial or economic benefit or access 

to any person whose property and 

interests in property are blocked 

pursuant to § 593.201(a), nor may their 

holder cooperate in or facilitate the 

pledging or other attempted use as 

collateral of blocked funds or other 

assets. 

§ 593.204 Expenses of maintaining 

blocked physical property; liquidation of 

blocked account. 

(a) Except as otherwise authorized, 

and notwithstanding the existence of 

any rights or obligations conferred or 

imposed by any international agreement 

or contract entered into or any license 

or permit granted prior to the effective 

date, all expenses incident to the 

maintenance of physical property 

blocked pursuant to § 593.201(a) shall 

be the responsibility of the owners or 

operators of such property, which 

expenses shall not be met from blocked 

funds. 

(b) Property blocked pursuant to 

§ 593.201(a) may, in the discretion of 

the Director of the Office of Foreign 

Assets Control, be sold or liquidated 

and the net proceeds placed in a 

blocked interest-bearing account in the 

name of the owner of the property. 


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Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Rules and Regulations 28859 

§ 593.205 Prohibition on the importation of 

any round log or timber product originating 

in Liberia. 

Except as otherwise authorized by 

regulations, orders, directives, rulings, 

instructions, licenses, or otherwise, and 

notwithstanding any contract entered 

into or any license or permit granted 

prior to the effective date of this section, 

the importation into the United States, 

directly or indirectly, of any round log 

or timber product originating in Liberia 

is prohibited. 

Note to § 593.205. See section 593.510, 

which authorizes transactions related to the 

importation of any round log or timber 

product originating in Liberia. This general 

license has been issued in accordance with 

United Nations Security Council Resolution 

1689 of June 20, 2006. 

§ 593.206 Evasions; attempts; 

conspiracies. 

(a) Except as otherwise authorized, 

and notwithstanding any contract 

entered into or any license or permit 

granted prior to the effective date, any 

transaction by any U.S. person or within 

the United States on or after the 

effective date that evades or avoids, has 

the purpose of evading or avoiding, or 

attempts to violate any of the 

prohibitions set forth in this part is 

prohibited. 

(b) Except as otherwise authorized, 

and notwithstanding any contract 

entered into or any license or permit 

granted prior to the effective date, any 

conspiracy formed to violate the 

prohibitions set forth in this part is 

prohibited. 

Subpart C—General Definitions 

§ 593.301 Blocked account; blocked 

property. 

The terms blocked account and 

blocked property shall mean any 

account or property subject to the 

prohibitions in § 593.201 held in the 

name of a person whose property and 

interests in property are blocked 

pursuant to § 593.201(a), or in which 

such person has an interest, and with 

respect to which payments, transfers, 

exportations, withdrawals, or other 

dealings may not be made or effected 

except pursuant to an authorization or 

license from the Office of Foreign Assets 

Control expressly authorizing such 

action. 

§ 593.302 Effective date. 

The term effective date refers to the 

effective date of the applicable 

prohibitions and directives contained in 

this part as follows: 

(a) With respect to a person whose 

property and interests in property are 

blocked pursuant to § 593.201(a)(1), or 

with respect to the prohibitions set forth 

at § 593.205, 12:01 a.m. eastern daylight 

time, July 23, 2004; 

(b) With respect to a person whose 

property and interests in property are 

blocked pursuant to § 593.201(a)(2), the 

earlier of the date of actual or 

constructive notice of such person’s 

designation. 

§ 593.303 Entity. 

The term entity means a partnership, 

association, trust, joint venture, 

corporation, group, subgroup, or other 

organization. 

§ 593.304 Interest. 

Except as otherwise provided in this 

part, the term interest, when used with 

respect to property (e.g., ‘‘an interest in 

property’’), means an interest of any 

nature whatsoever, direct or indirect. 

§ 593.305 Licenses; general and specific. 

(a) Except as otherwise specified, the 

term license means any license or 

authorization contained in or issued 

pursuant to this part. 

(b) The term general license means 

any license or authorization the terms of 

which are set forth in subpart E of this 

part. 

(c) The term specific license means 

any license or authorization not set forth 

in subpart E of this part but issued 

pursuant to this part. 

Note to § 593.305. See § 501.801 of this 

chapter on licensing procedures. 

§ 593.306 Originating in Liberia. 

The term originating in Liberia means: 

(a) Any product determined to be a 

good of Liberian origin pursuant to the 

rules of origin of U.S. Customs and 

Border Protection; or 

(b) Any product that has entered into 

Liberian commerce. 

§ 593.307 Person. 

The term person means an individual 

or entity. 

§ 593.308 Property; property interest. 

The terms property and property 

interest include, but are not limited to, 

money, checks, drafts, bullion, bank 

deposits, savings accounts, debts, 

indebtedness, obligations, notes, 

guarantees, debentures, stocks, bonds, 

coupons, any other financial 

instruments, bankers acceptances, 

mortgages, pledges, liens or other rights 

in the nature of security, warehouse 

receipts, bills of lading, trust receipts, 

bills of sale, any other evidences of title, 

ownership or indebtedness, letters of 

credit and any documents relating to 

any rights or obligations there under, 

powers of attorney, goods, wares, 

merchandise, chattels, stocks on hand, 

ships, goods on ships, real estate 

mortgages, deeds of trust, vendors’ sales 

agreements, land contracts, leaseholds, 

ground rents, real estate and any other 

interest therein, options, negotiable 

instruments, trade acceptances, 

royalties, book accounts, accounts 

payable, judgments, patents, trademarks 

or copyrights, insurance policies, safe 

deposit boxes and their contents, 

annuities, pooling agreements, services 

of any nature whatsoever, contracts of 

any nature whatsoever, and any other 

property, real, personal, or mixed, 

tangible or intangible, or interest or 

interests therein, present, future or 

contingent. 

§ 593.309 Round log or timber product. 

The term round log or timber product 

means any product classifiable in 

Chapter 44 of the Harmonized Tariff 

Schedule of the United States. 

§ 593.310 Transfer. 

The term transfer means any actual or 

purported act or transaction, whether or 

not evidenced by writing, and whether 

or not done or performed within the 

United States, the purpose, intent, or 

effect of which is to create, surrender, 

release, convey, transfer, or alter, 

directly or indirectly, any right, remedy, 

power, privilege, or interest with respect 

to any property and, without limitation 

upon the foregoing, shall include the 

making, execution, or delivery of any 

assignment, power, conveyance, check, 

declaration, deed, deed of trust, power 

of attorney, power of appointment, bill 

of sale, mortgage, receipt, agreement, 

contract, certificate, gift, sale, affidavit, 

or statement; the making of any 

payment; the setting off of any 

obligation or credit; the appointment of 

any agent, trustee, or fiduciary; the 

creation or transfer of any lien; the 

issuance, docketing, filing, or levy of or 

under any judgment, decree, 

attachment, injunction, execution, or 

other judicial or administrative process 

or order, or the service of any 

garnishment; the acquisition of any 

interest of any nature whatsoever by 

reason of a judgment or decree of any 

foreign country; the fulfillment of any 

condition; the exercise of any power of 

appointment, power of attorney, or 

other power; or the acquisition, 

disposition, transportation, importation, 

exportation, or withdrawal of any 

security. 

§ 593.311 United States. 

The term United States means the 

United States, its territories and 

possessions, and all areas under the 

jurisdiction or authority thereof. 


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§ 593.312 U.S. financial institution. 

The term U.S. financial institution 

means any U.S. entity (including its 

foreign branches) that is engaged in the 

business of accepting deposits, making, 

granting, transferring, holding, or 

brokering loans or credits, or purchasing 

or selling foreign exchange, securities, 

commodity futures or options, or 

procuring purchasers and sellers 

thereof, as principal or agent; including 

but not limited to, depository 

institutions, banks, savings banks, trust 

companies, securities brokers and 

dealers, commodity futures and options 

brokers and dealers, forward contract 

and foreign exchange merchants, 

securities and commodities exchanges, 

clearing corporations, investment 

companies, employee benefit plans, and 

U.S. holding companies, U.S. affiliates, 

or U.S. subsidiaries of any of the 

foregoing. This term includes those 

branches, offices and agencies of foreign 

financial institutions that are located in 

the United States, but not such 

institutions’ foreign branches, offices, or 

agencies. 

§ 593.313 United States person; U.S. 

person. 

The term United States person or U.S. 

person means any United States citizen, 

permanent resident alien, entity 

organized under the laws of the United 

States or any jurisdiction within the 

United States (including foreign 

branches), or any person in the United 

States. 

Subpart D—Interpretations 

§ 593.401 Reference to amended sections. 

Except as otherwise specified, 

reference to any provision in or 

appendix to this part or chapter or to 

any regulation, ruling, order, 

instruction, direction, or license issued 

pursuant to this part refers to the same 

as currently amended. 

§ 593.402 Effect of amendment. 

Unless otherwise specifically 

provided, any amendment, 

modification, or revocation of any 

provision in or appendix to this part or 

chapter or of any order, regulation, 

ruling, instruction, or license issued by 

or under the direction of the Director of 

the Office of Foreign Assets Control 

does not affect any act done or omitted, 

or any civil or criminal suit or 

proceeding commenced or pending 

prior to such amendment, modification, 

or revocation. All penalties, forfeitures, 

and liabilities under any such order, 

regulation, ruling, instruction, or license 

continue and may be enforced as if such 

amendment, modification, or revocation 

had not been made. 

§ 593.403 Termination and acquisition of 

an interest in blocked property. 

(a) Whenever a transaction licensed or 

authorized by or pursuant to this part 

results in the transfer of blocked 

property (including any property 

interest) away from a person, such 

property shall no longer be deemed to 

be property blocked pursuant to 

§ 593.201(a), unless there exists in the 

property another interest that is blocked 

pursuant to § 593.201(a) or any other 

part of this chapter, the transfer of 

which has not been effected pursuant to 

license or other authorization. 

(b) Unless otherwise specifically 

provided in a license or authorization 

issued pursuant to this part, if property 

(including any property interest) is 

transferred or attempted to be 

transferred to a person whose property 

and interests in property are blocked 

pursuant to § 593.201(a), such property 

shall be deemed to be property in which 

that person has an interest and therefore 

blocked. 

§ 593.404 Transactions ordinarily incident 

to a licensed transaction. 

Any transaction ordinarily incident to 

a licensed transaction and necessary to 

give effect thereto is also authorized, 

except: 

(a) An ordinarily incident transaction, 

not explicitly authorized within the 

terms of the license, by or with a person 

whose property and interests in 

property are blocked pursuant to 

§ 593.201(a); or 

(b) An ordinarily incident transaction, 

not explicitly authorized within the 

terms of the license, involving a debit to 

a blocked account or a transfer of 

blocked property. 

§ 593.405 Provision of services. 

(a) The prohibitions on transactions 

involving blocked property contained in 

§ 593.201 apply to services performed in 

the United States or by U.S. persons, 

wherever located, including by an 

overseas branch of an entity located in 

the United States: 

(1) On behalf of or for the benefit of 

a person whose property and interests 

in property are blocked pursuant to 

§ 593.201(a); or 

(2) With respect to property interests 

subject to § 593.201. 

(b) Example. U.S. persons may not, 

except as authorized by or pursuant to 

this part, provide legal, accounting, 

financial, brokering, freight forwarding, 

transportation, public relations, or other 

services to a person whose property and 

interests in property are blocked 

pursuant to § 593.201(a). 

Note to § 593.405. See §§ 593.507 and 

593.508, respectively, on licensing policy 

with regard to the provision of certain legal 

or medical services. 

§ 593.406 Offshore transactions. 

The prohibitions in § 593.201 on 

transactions involving blocked property 

apply to transactions by any U.S. person 

in a location outside the United States 

with respect to property held in the 

name of a person whose property and 

interests in property are blocked 

pursuant to § 593.201(a), or property in 

which a person whose property and 

interests in property are blocked 

pursuant to § 593.201(a) has or has had 

an interest since the effective date. 

§ 593.407 Payments from blocked 

accounts to satisfy obligations prohibited. 

Pursuant to § 593.201, no debits may 

be made to a blocked account to pay 

obligations to U.S. persons or other 

persons, except as authorized by or 

pursuant to this part. 

§ 593.408 Charitable contributions. 

Unless otherwise specifically 

authorized by the Office of Foreign 

Assets Control by or pursuant to this 

part, no charitable contribution or 

donation of funds, goods, services, or 

technology, including those to relieve 

human suffering, such as food, clothing 

or medicine, may be made by, to, or for 

the benefit of a person whose property 

or interests in property are blocked 

pursuant to Sec. 593.201(a). For 

purposes of this part, a contribution or 

donation is made by, to, or for the 

benefit of a person whose property or 

interests in property are blocked 

pursuant to Sec. 593.201(a) if made by, 

to, or in the name of such a person; if 

made by, to, or in the name of an entity 

or individual acting for or on behalf of, 

or owned or controlled by, such a 

person; or if made in an attempt to 

violate, to evade, or to avoid the bar on 

the provision of contributions or 

donations by, to, or for such a person. 

§ 593.409 Credit extended and cards 

issued by U.S. financial institutions. 

The prohibition in § 593.201 on 

dealing in property subject to that 

section prohibits U.S. financial 

institutions from performing under any 

existing credit agreements, including, 

but not limited to, charge cards, debit 

cards, or other credit facilities issued by 

a U.S. financial institution to a person 

whose property and interests in 

property are blocked pursuant to 

§ 593.201(a). 

§ 593.410 Setoffs prohibited. 

A setoff against blocked property 

(including a blocked account), whether 


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by a U.S. bank or other U.S. person, is 

a prohibited transfer under § 593.201 if 

effected after the effective date. 

§ 593.411 Importation into the United 

States. 

With respect to the prohibitions set 

forth in § 593.205, the term importation 

into the United States generally means 

the bringing of any such products into 

the United States. In the case of round 

logs or timber products originating in 

Liberia being transported by vessel, 

importation into the United States 

means the bringing of any such products 

into the United States with the intent to 

unlade. See also § 593.413 and 

§ 593.510. 

§ 593.412 Release of any round log or 

timber product originating in Liberia from a 

bonded warehouse or foreign trade zone. 

(a) The prohibitions in § 593.205 

apply to importation into a bonded 

warehouse or a foreign trade zone in the 

United States. 

(b) Section 593.205 does not prohibit 

the release from a bonded warehouse or 

foreign trade zone of any round log or 

timber product originating in Liberia 

imported into a bonded warehouse or 

foreign trade zone either prior to the 

effective date or in a transaction 

authorized pursuant to this part on or 

after the effective date. 

(c) Notwithstanding paragraph (b) of 

this section, any round log or timber 

product originating in Liberia in which 

persons whose property and interests in 

property are blocked pursuant to 

§ 593.201(a) have an interest may not be 

released unless authorized by the Office 

of Foreign Assets Control. 

Note to § 593.412. See § 593.510. 

§ 593.413 Transshipment or transit 

through the United States prohibited. 

Except as otherwise specified: 

(a) The prohibitions in § 593.205 

apply to the importation into the United 

States, for transshipment or transit to 

third countries, of any round log or 

timber product originating in Liberia. 

(b) In the case of any round log or 

timber product originating in Liberia, 

the prohibitions in § 593.205 apply to 

the unlading in the United States and 

the intent to unlade in the United States 

of such products intended or destined 

for third countries. 

Note to § 593.413. See § 593.510. 

Subpart E—Licenses, Authorizations 

and Statements of Licensing Policy 

§ 593.501 General and specific licensing 

procedures. 

For provisions relating to licensing 

procedures, see part 501, subpart E of 

this chapter. Licensing actions taken 

pursuant to part 501 of this chapter with 

respect to the prohibitions contained in 

this part are considered actions taken 

pursuant to this part. 

§ 593.502 Effect of license or 

authorization. 

(a) No license or other authorization 

contained in this part, or otherwise 

issued by or under the direction of the 

Director of the Office of Foreign Assets 

Control, authorizes or validates any 

transaction effected prior to the issuance 

of such license or other authorization, 

unless specifically provided in such 

license or authorization. 

(b) No regulation, ruling, instruction, 

or license authorizes any transaction 

prohibited under this part unless the 

regulation, ruling, instruction, or license 

is issued by the Office of Foreign Assets 

Control and specifically refers to this 

part. No regulation, ruling, instruction, 

or license referring to this part shall be 

deemed to authorize any transaction 

prohibited by any provision of this 

chapter unless the regulation, ruling, 

instruction, or license specifically refers 

to such provision. 

(c) Any regulation, ruling, instruction, 

or license authorizing any transaction 

otherwise prohibited under this part has 

the effect of removing a prohibition 

contained in this part from the 

transaction, but only to the extent 

specifically stated by its terms. Unless 

the regulation, ruling, instruction, or 

license otherwise specifies, such an 

authorization does not create any right, 

duty, obligation, claim, or interest in, or 

with respect to, any property which 

would not otherwise exist under 

ordinary principles of law. 

§ 593.503 Exclusion from licenses. 

The Director of the Office of Foreign 

Assets Control reserves the right to 

exclude any person, property, or 

transaction from the operation of any 

license or from the privileges conferred 

by any license. The Director of the 

Office of Foreign Assets Control also 

reserves the right to restrict the 

applicability of any license to particular 

persons, property, transactions, or 

classes thereof. Such actions are binding 

upon all persons receiving actual or 

constructive notice of the exclusions or 

restrictions. 

§ 593.504 Payments and transfers to 

blocked accounts in U.S. financial 

institutions. 

Any payment of funds or transfer of 

credit in which a person whose property 

and interests in property are blocked 

pursuant to § 593.201(a) has any interest 

that comes within the possession or 

control of a U.S. financial institution 

must be blocked in an account on the 

books of that financial institution. A 

transfer of funds or credit by a U.S. 

financial institution between blocked 

accounts in its branches or offices is 

authorized, provided that no transfer is 

made from an account within the 

United States to an account held outside 

the United States, and further provided 

that a transfer from a blocked account 

may be made only to another blocked 

account held in the same name. 

Note to § 593.504. Please refer to § 501.603 

of this chapter for mandatory reporting 

requirements regarding financial transfers. 

See also § 593.203 concerning the obligation 

to hold blocked funds in interest-bearing 

accounts. 

§ 593.505 Entries in certain accounts for 

normal service charges authorized. 

(a) A U.S. financial institution is 

authorized to debit any blocked account 

held at that financial institution in 

payment or reimbursement for normal 

service charges owed it by the owner of 

that blocked account. 

(b) As used in this section, the term 

normal service charges shall include 

charges in payment or reimbursement 

for interest due; cable, telegraph, 

internet, or telephone charges; postage 

costs; custody fees; small adjustment 

charges to correct bookkeeping errors; 

and, but not by way of limitation, 

minimum balance charges, notary and 

protest fees, and charges for reference 

books, photocopies, credit reports, 

transcripts of statements, registered 

mail, insurance, stationery and supplies, 

and other similar items. 

§ 593.506 Investment and reinvestment of 

certain funds. 

Subject to the requirements of 

§ 593.203, U.S. financial institutions are 

authorized to invest and reinvest assets 

blocked pursuant to § 593.201, subject 

to the following conditions: 

(a) The assets representing such 

investments and reinvestments are 

credited to a blocked account or 

subaccount which is held in the same 

name at the same U.S. financial 

institution, or within the possession or 

control of a U.S. person, but funds shall 

not be transferred outside the United 

States for this purpose; 

(b) The proceeds of such investments 

and reinvestments shall not be credited 

to a blocked account or subaccount 

under any name or designation that 

differs from the name or designation of 

the specific blocked account or 

subaccount in which such funds or 

securities were held; and 

(c) No immediate financial or 

economic benefit accrues (e.g., through 

pledging or other use) to a person whose 


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property and interests in property are 

blocked pursuant to § 593.201(a). 

§ 593.507 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 

§ 593.201(a) is authorized, provided that 

all receipts of payment of professional 

fees and reimbursement of incurred 

expenses must be specifically licensed: 

(1) Provision of legal advice and 

counseling on the requirements of and 

compliance with the laws of any 

jurisdiction within the United States, 

provided that such advice and 

counseling are not provided to facilitate 

transactions in violation of this part; 

(2) Representation of persons when 

named as defendants in or otherwise 

made parties to domestic U.S. legal, 

arbitration, or administrative 

proceedings; 

(3) Initiation and conduct of domestic 

U.S. legal, arbitration, or administrative 

proceedings in defense of property 

interests subject to U.S. jurisdiction; 

(4) Representation of persons before 

any Federal or State agency with respect 

to the imposition, administration, or 

enforcement of U.S. sanctions against 

such persons; and 

(5) Provision of legal services in any 

other context in which prevailing U.S. 

law requires access to legal counsel at 

public expense. 

(b) The provision of any other legal 

services to persons whose property and 

interests in property are blocked 

pursuant to § 593.201(a), not otherwise 

authorized in this part, requires the 

issuance of a specific license. 

(c) Entry into a settlement agreement 

affecting property and interests in 

property or the enforcement of any lien, 

judgment, arbitral award, decree, or 

other order through execution, 

garnishment, or other judicial process 

purporting to transfer or otherwise alter 

or affect property and interests in 

property blocked pursuant to 

§ 593.201(a) is prohibited unless 

specifically licensed in accordance with 

§ 593.202(e). 

§ 593.508 Authorization of emergency 

medical services. 

The provision of nonscheduled 

emergency medical services in the 

United States to persons whose property 

and interests in property are blocked 

pursuant to § 593.201(a) is authorized, 

provided that all receipt of payment for 

such services must be specifically 

licensed. 

§ 593.509 Transactions related to mail 

authorized. 

All transactions by U.S. persons, 

including payment and transfers to 

common carriers, incident to the receipt 

or transmission of mail between a U.S. 

person and a person whose property 

and interests in property are blocked 

pursuant to § 593.201(a) are authorized, 

provided the mail is limited to personal 

communications not involving a transfer 

of anything of value and not exceeding 

12 ounces in weight. 

§ 593.510 Transactions related to the 

importation of any round log or timber 

product originating in Liberia authorized. 

Except as otherwise prohibited by 

§ 593.201, all transactions that are 

prohibited by § 593.205 with respect to 

the importation into the United States of 

any round log or timber product 

originating in Liberia are authorized. 

Subpart F—Reports 

§ 593.601 Records and reports. 

For provisions relating to required 

records and reports, see part 501, 

subpart C, of this chapter. 

Recordkeeping and reporting 

requirements imposed by part 501 of 

this chapter with respect to the 

prohibitions contained in this part are 

considered requirements arising 

pursuant to this part. 

Subpart G—Penalties 

§ 593.701 Penalties. 

(a) Attention is directed to section 206 

of the International Emergency 

Economic Powers Act (IEEPA) (50 

U.S.C. 1705), which is applicable to 

violations of the provisions of any 

license, ruling, regulation, order, 

direction, or instruction issued by or 

pursuant to the direction or 

authorization of the Secretary of the 

Treasury pursuant to this part or 

otherwise under IEEPA. 

(1) A civil penalty not to exceed the 

amount set forth in Section 206 of 

IEEPA, as amended, may be imposed on 

any person who violates or attempts to 

violate any license, order, or regulation 

issued under IEEPA; 

Note to paragraph (a)(1) of § 593.701. As 

of May 23, 2007, the maximum civil penalty 

for a violation of IEEPA is $50,000. 

(2) Whoever willfully violates or 

willfully attempts to violate any license, 

order, or regulation issued under IEEPA, 

upon conviction, shall be fined not 

more than $50,000, and if a natural 

person, may also be imprisoned for not 

more than 20 years; and any officer, 

director, or agent of any corporation 

who knowingly participates in such 

violation may be punished by a like 

fine, imprisonment, or both. 

(b) Attention is directed to section 5 

of the United Nations Participation Act, 

as amended (22 U.S.C. 287c(b)) 

(‘‘UNPA’’), which provides that any 

person who willfully violates or evades 

or attempts to violate or evade any 

order, rule, or regulation issued by the 

President pursuant to the authority 

granted in that section, upon conviction, 

shall be fined not more than $10,000 

and, if a natural person, may also be 

imprisoned for not more than 10 years; 

and the officer, director, or agent of any 

corporation who knowingly participates 

in such violation or evasion shall be 

punished by a like fine, imprisonment, 

or both and any property, funds, 

securities, papers, or other articles or 

documents, or any vessel, together with 

her tackle, apparel, furniture, and 

equipment, or vehicle, or aircraft, 

concerned in such violation shall be 

forfeited to the United States. 

(c) Violations involving transactions 

described at section 203(b)(1), (3–4) of 

IEEPA (50 U.S.C. 1702(b)(1), (3–4)) shall 

be subject only to the penalties set forth 

in paragraph (b) of this section. 

(d)(1) The civil penalties provided in 

IEEPA are subject to adjustment 

pursuant to the Federal Civil Penalties 

Inflation Adjustment Act of 1990 (Pub. 

L. 101–410, as amended, 28 U.S.C. 2461 

note). 

(2) The criminal penalties provided in 

IEEPA and UNPA are subject to increase 

pursuant to 18 U.S.C. 3571. 

(e) Attention is also directed to 18 

U.S.C. 1001, which provides that 

whoever, in any matter within the 

jurisdiction of the executive, legislative, 

or judicial branch of the United States, 

knowingly and willfully falsifies, 

conceals or covers up by any trick, 

scheme, or device a material fact, or 

makes any materially false, fictitious or 

fraudulent statement or representation 

or makes or uses any false writing or 

document knowing the same to contain 

any materially false, fictitious or 

fraudulent statement or entry, shall be 

fined under title 18, United States Code, 

or imprisoned not more than five years, 

or both. 

(f) Violations of this part may also be 

subject to relevant provisions of other 

applicable laws. 

§ 593.702 Prepenalty notice. 

(a) When required. If the Director of 

the Office of Foreign Assets Control has 

reason to believe that there has occurred 

a violation of any provision of this part 

or a violation of the provisions of any 

license, ruling, regulation, order, 

direction, or instruction issued by or 

pursuant to the direction or 


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authorization of the Secretary of the 

Treasury pursuant to this part or 

otherwise under IEEPA, and the 

Director determines that further 

proceedings are warranted, the Director 

shall notify the alleged violator of the 

agency’s intent to impose a monetary 

penalty by issuing a prepenalty notice. 

The prepenalty notice shall be in 

writing. The prepenalty notice may be 

issued whether or not another agency 

has taken any action with respect to the 

matter. 

(b) Contents of notice.—(1) Facts of 

violation. The prepenalty notice shall 

describe the violation, specify the laws 

and regulations allegedly violated, and 

state the amount of the proposed 

monetary penalty. 

(2) Right to respond. The prepenalty 

notice also shall inform the respondent 

of the respondent’s right to make a 

written presentation within the 

applicable 30-day period set forth in 

§ 593.703 as to why a monetary penalty 

should not be imposed or why, if 

imposed, the monetary penalty should 

be in a lesser amount than proposed. 

(c) Informal settlement prior to 

issuance of prepenalty notice. At any 

time prior to the issuance of a 

prepenalty notice, an alleged violator 

may request in writing that, for a period 

not to exceed 60 days, the agency 

withhold issuance of the prepenalty 

notice for the exclusive purpose of 

effecting settlement of the agency’s 

potential civil monetary penalty claims. 

In the event the Director grants the 

request, under terms and conditions 

within the Director’s discretion, the 

Office of Foreign Assets Control will 

agree to withhold issuance of the 

prepenalty notice for a period not to 

exceed 60 days and will enter into 

settlement negotiations of the potential 

civil monetary penalty claim. 

§ 593.703 Response to prepenalty notice; 

informal settlement. 

(a) Deadline for response. The 

respondent may submit a response to 

the prepenalty notice within the 

applicable 30-day period set forth in 

this paragraph. The Director may grant, 

at the Director’s discretion, an extension 

of time in which to submit a response 

to the prepenalty notice. The failure to 

submit a response within the applicable 

time period set forth in this paragraph 

shall be deemed to be a waiver of the 

right to respond. 

(1) Computation of time for response. 

A response to the prepenalty notice 

must be postmarked or date-stamped by 

the U.S. Postal Service (or foreign postal 

service, if mailed abroad) or courier 

service provider (if transmitted to the 

Office of Foreign Assets Control by 

courier) on or before the 30th day after 

the postmark date on the envelope in 

which the prepenalty notice was 

mailed. If the prepenalty notice was 

personally delivered to the respondent 

by a non-U.S. Postal Service agent 

authorized by the Director, a response 

must be postmarked or date-stamped on 

or before the 30th day after the date of 

delivery. 

(2) Extensions of time for response. If 

a due date falls on a Federal holiday or 

weekend, that due date is extended to 

include the following business day. Any 

other extensions of time will be granted, 

at the Director’s discretion, only upon 

the respondent’s specific request to the 

Office of Foreign Assets Control. 

(b) Form and method of response. The 

response need not be in any particular 

form, but it must be typewritten and 

signed by the respondent or a 

representative thereof. A copy of the 

written response may be sent by 

facsimile, but the original also must be 

sent to the Office of Foreign Assets 

Control Civil Penalties Division by mail 

or courier and must be postmarked or 

date-stamped, in accordance with 

paragraph (a) of this section. 

(c) Contents of response. A written 

response must contain information 

sufficient to indicate that it is in 

response to the prepenalty notice and 

must identify the Office of Foreign 

Assets Control identification number 

listed on the prepenalty notice. 

(1) A written response must include 

the respondent’s full name, address, 

telephone number, and facsimile 

number, if available, or those of the 

representative of the respondent. 

(2) A written response should either 

admit or deny each specific violation 

alleged in the prepenalty notice and also 

state if the respondent has no 

knowledge of a particular violation. If 

the written response fails to address any 

specific violation alleged in the 

prepenalty notice, that alleged violation 

shall be deemed to be admitted. 

(3) A written response should include 

any information in defense, evidence in 

support of an asserted defense, or other 

factors that the respondent requests the 

Office of Foreign Assets Control to 

consider. Any defense or explanation 

previously made to the Office of Foreign 

Assets Control or any other agency must 

be repeated in the written response. Any 

defense not raised in the written 

response will be considered waived. 

The written response also should set 

forth the reasons why the respondent 

believes the penalty should not be 

imposed or why, if imposed, it should 

be in a lesser amount than proposed. 

(d) Failure to Respond. If the Office of 

Foreign Assets Control receives no 

response to a prepenalty notice within 

the applicable time period set forth in 

paragraph (a) of this section, a penalty 

notice generally will be issued, taking 

into account the mitigating and/or 

aggravating factors present in the record. 

If there are no mitigating factors present 

in the record, or the record contains a 

preponderance of aggravating factors, 

the proposed prepenalty amount 

generally will be assessed as the final 

penalty. 

(e) Informal settlement. In addition to 

or as an alternative to a written response 

to a prepenalty notice, the respondent or 

respondent’s representative may contact 

the Office of Foreign Assets Control’s 

Civil Penalties Division as advised in 

the prepenalty notice to propose the 

settlement of allegations contained in 

the prepenalty notice and related 

matters. However, the requirements set 

forth in paragraph (g) of this section as 

to oral communication by the 

representative must first be fulfilled. In 

the event of settlement at the prepenalty 

stage, the claim proposed in the 

prepenalty notice will be withdrawn, 

the respondent will not be required to 

take a written position on allegations 

contained in the prepenalty notice, and 

the Office of Foreign Assets Control will 

make no final determination as to 

whether a violation occurred. The 

amount accepted in settlement of 

allegations in a prepenalty notice may 

vary from the civil penalty that might 

finally be imposed in the event of a 

formal determination of violation. In the 

event no settlement is reached, the time 

limit specified in paragraph (a) of this 

section for written response to the 

prepenalty notice will remain in effect 

unless additional time is granted by the 

Office of Foreign Assets Control. 

(f) Guidelines. Guidelines for the 

imposition or settlement of civil 

penalties by the Office of Foreign Assets 

Control are available on OFAC’s Web 

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

(g) Representation. A representative of 

the respondent may act on behalf of the 

respondent, but any oral 

communication with the Office of 

Foreign Assets Control prior to a written 

submission regarding the specific 

allegations contained in the prepenalty 

notice must be preceded by a written 

letter of representation, unless the 

prepenalty notice was served upon the 

respondent in care of the representative. 

§ 593.704 Penalty imposition or 

withdrawal. 

(a) No violation. If, after considering 

any response to the prepenalty notice 

and any relevant facts, the Director of 

the Office of Foreign Assets Control 

determines that there was no violation 


cprice-sewell on PROD1PC71 with RULES
28864 Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Rules and Regulations 

by the respondent named in the 

prepenalty notice, the Director shall 

notify the respondent in writing of that 

determination and of the cancellation of 

the proposed monetary penalty. 

(b) Violation. (1) If, after considering 

any written response to the prepenalty 

notice, or default in the submission of 

a written response, and any relevant 

facts, the Director of the Office of 

Foreign Assets Control determines that 

there was a violation by the respondent 

named in the prepenalty notice, the 

Director is authorized to issue a written 

penalty notice to the respondent of the 

determination of the violation and the 

imposition of the monetary penalty. 

(2) The penalty notice shall inform 

the respondent that payment or 

arrangement for installment payment of 

the assessed penalty must be made 

within 30 days of the date of mailing of 

the penalty notice by the Office of 

Foreign Assets Control. 

(3) The penalty notice shall inform 

the respondent of the requirement to 

furnish the respondent’s taxpayer 

identification number pursuant to 31 

U.S.C. 7701 and that such number will 

be used for purposes of collecting and 

reporting on any delinquent penalty 

amount. 

(4) The issuance of the penalty notice 

finding a violation and imposing a 

monetary penalty shall constitute final 

agency action. The respondent has the 

right to seek judicial review of that final 

agency action in Federal district court. 

§ 593.705 Administrative collection; 

referral to United States Department of 

Justice. 

In the event that the respondent does 

not pay the penalty imposed pursuant to 

this part or make payment arrangements 

acceptable to the Director of the Office 

of Foreign Assets Control within 30 

days of the date of mailing of the 

penalty notice, the matter may be 

referred for administrative collection 

measures by the Department of the 

Treasury or to the United States 

Department of Justice for appropriate 

action to recover the penalty in a civil 

suit in a Federal district court. 

Subpart H—Procedures 

§ 593.801 Procedures. 

For license application procedures 

and procedures relating to amendments, 

modifications, or revocations of 

licenses; administrative decisions; 

rulemaking; and requests for documents 

pursuant to the Freedom of Information 

and Privacy Acts (5 U.S.C. 552 and 

552a), see part 501, subpart E, of this 

chapter. 

§ 593.802 Delegation by the Secretary of 

the Treasury. 

Any action that the Secretary of the 

Treasury is authorized to take pursuant 

to Executive Order 13348 of July 22, 

2004 (69 FR 44885, July 27, 2004), and 

any further Executive orders relating to 

the national emergency declared 

therein, may be taken by the Director of 

the Office of Foreign Assets Control or 

by any other person to whom the 

Secretary of the Treasury has delegated 

authority so to act. 

Subpart I—Paperwork Reduction Act 

§ 593.901 Paperwork Reduction Act notice. 

For approval by the Office of 

Management and Budget (‘‘OMB’’) 

under the Paperwork Reduction Act of 

1995 (44 U.S.C. 3507) of information 

collections relating to record keeping 

and reporting requirements, licensing 

procedures (including those pursuant to 

statements of licensing policy), and 

other procedures, see § 501.901 of this 

chapter. An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a valid control 

number assigned by OMB. 

Dated: March 20, 2007. 

Adam J. Szubin, 

Director, Office of Foreign Assets Control. 

[FR Doc. E7–9822 Filed 5–22–07; 8:45 am] 

BILLING CODE 4811–42–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[CGD01–07–049] 

RIN 1625–AA87 

Security Zone: Coast Guard Academy 

Commencement, New London, CT 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary final rule. 

SUMMARY: The Coast Guard is 

establishing a temporary security zone 

for the 2007 Coast Guard Academy 

Commencement Ceremony on 

Wednesday May 23, 2007. This zone 

will provide security in the waters of 

the Thames River adjacent to the Coast 

Guard Academy, New London, 

Connecticut during the 2007 

Commencement Exercises. This 

temporary security zone is necessary to 

protect senior government officials, 

dignitaries, participants and guests 

attending the Commencement, members 

of the general public, and the 

surrounding area from sabotage or other 

subversive acts, accidents, or other 

hazards of a similar nature. Entry into 

this security zone is prohibited unless 

authorized by the Captain of the Port, 

Long Island Sound, New Haven, 

Connecticut. 

DATES: This rule is effective from 10 

a.m. until 3 p.m. on May 23, 2007. 

ADDRESSES: Documents indicated in this 

preamble as being available in the 

docket are part of docket CGD01–07–

049 and are available for inspection or 

copying at Sector Long Island Sound 

between 9 a.m. and 3 p.m., Monday 

through Friday, except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Lieutenant Douglas Miller, Waterways 

Management Division, Sector Long 

Island Sound at (203) 468–4596. 

SUPPLEMENTARY INFORMATION: 

Regulatory Information 

We did not publish a notice of 

proposed rulemaking (NPRM) for this 

regulation. Under 5 U.S.C. 553(b)(B), the 

Coast Guard finds that good cause exists 

for not publishing an NPRM. The 

security zone was requested by the U.S. 

Secret Service for the Commencement 

Exercises as the attendance of several 

senior level government officials and 

other dignitaries, combined with the 

nature of and location of the 

Ceremonies, presents a target for 

terrorist activity. The sensitive and 

unpredictable schedules of several of 

the Commencement Ceremony 

attendees precluded sufficient notice to 

the Coast Guard that a security zone 

would be necessary. 

Under 5 U.S.C. 553(d)(3), the Coast 

Guard finds that good cause exists for 

making this rule effective less than 30 

days after publication in the Federal 

Register. The delay in notification of the 

need for the security zone left 

insufficient time to publish a notice of 

proposed rulemaking in advance of the 

effective date of this security zone. The 

delay in notification also does not allow 

30 days between publication of the rule 

and its effective date. Making this rule 

effective less than 30 days after 

publication is necessary as this 

immediate action is needed to protect 

the senior government officials and 

dignitaries attending Commencement 

exercises, other participants and guests 

to the Coast Guard Academy 

Commencement, and the surrounding 

community from sabotage or other 

subversive acts, accidents, or other 

hazards of a similar nature. 

Background and Purpose 

Several senior United States 

government officials and other 


cprice-sewell on PROD1PC71 with RULES