[Federal Register Volume 62, Number 43 (Wednesday, March 5, 1997)]
[Rules and Regulations]
[Pages 9959-9968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5299]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 536


Narcotics Trafficking 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 issuing the Narcotics Trafficking Sanctions Regulations 
to implement the President's declaration of a national emergency and 
imposition of sanctions against significant foreign narcotics 
traffickers centered in Colombia.

EFFECTIVE DATE: February 28, 1997.

FOR FURTHER INFORMATION CONTACT: Office of Foreign Assets Control, 
Department of the Treasury, Washington, DC 20220; tel.: 202/622-2520.

SUPPLEMENTARY INFORMATION:

Electronic and Facsimile Availability

    This document is available as an electronic file on The Federal 
Bulletin Board the day of publication in the Federal Register. By 
modem, dial 202/512-1387 and type ``/GO FAC,'' or call 202/512-1530 for 
disk or paper copies. This file is available for downloading without 
charge in WordPerfect 5.1, ASCII, and Adobe Acrobat<SUP>TM readable 
(*.PDF) formats. For Internet access, the address for use with the 
World Wide Web (Home Page), Telnet, or FTP protocol is: 
fedbbs.access.gpo.gov. The document is also accessible for downloading 
in ASCII format without charge from Treasury's Electronic Library 
(``TEL'') in the ``Business, Trade and Labor Mall'' of the FedWorld 
bulletin board. By modem, dial 703/321-3339, and select the appropriate 
self-expanding file in TEL. For Internet access, use one of the 
following protocols: Telnet = fedworld.gov (192.239.93.3); World Wide 
Web (Home Page) = http://www.fedworld.gov; FTP = ftp.fedworld.gov 
(192.239.92.205). Additional information concerning the programs of the 
Office of Foreign Assets Control is available for downloading from the 
Office's Internet Home Page: <a href="http://www.ustreas.gov/treasury/services/
fac/fac.html">http://www.ustreas.gov/treasury/services/
fac/fac.html</a>, or in fax form through the Office's 24-hour fax-on-demand 
service: call 202/622-0077 using a fax machine, fax modem, or (within 
the United States) a touch-tone telephone.

Background

    On October 21, 1995, the President issued Executive Order 12978, 
declaring a national emergency with respect to ``the actions of 
significant foreign narcotics traffickers centered in Colombia, and the 
unparalleled violence, corruption, and harm that they cause in the 
United States and abroad,''

[[Page 9960]]

and invoking the authority, inter alia, of the International Emergency 
Economic Powers Act (50 U.S.C. 1701-1706). The order blocks all 
property and interests in property of four persons listed in an Annex 
to the order, as well as the property and interests in property of 
other persons who are designated by the Secretary of the Treasury, in 
consultation with the Attorney General and the Secretary of State. The 
order also authorizes the Secretary of the Treasury, in consultation 
with the Attorney General and 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. In implementation of 
the order, the Treasury Department is issuing the Narcotics Trafficking 
Sanctions Regulations (the ``Regulations'').
    The Regulations block all property and interests in property of (1) 
foreign persons designated in Executive Order 12978; (2) foreign 
persons designated by the Secretary of the Treasury, in consultation 
with the Attorney General and the Secretary of State, because they are 
found:
    (a) to play a significant role in international narcotics 
trafficking centered in Colombia; or
    (b) materially to assist in, or provide financial or technological 
support for or goods or services in support of, the narcotics 
trafficking activities of persons designated in or pursuant to the 
order.
    The Regulations also block all property and interests in property 
of persons determined by the Secretary of the Treasury, in consultation 
with the Attorney General and the Secretary of State, to be owned or 
controlled by, or to act for or on behalf of, any other designated 
person. Persons coming within any of these categories are called 
specially designated narcotics traffickers (``SDNTs''). Executive Order 
12978 blocks all property or interests in property of SDNTs that are in 
the United States, that hereinafter come within the United States, or 
that are or hereafter come within the possession or control of U.S. 
persons, including their overseas branches. Section 2 of Executive 
Order 12978 also prohibits any transaction or dealing by U.S. persons 
or in the United States in property or interests in property of SDNTs, 
including any transaction that evades or avoids, or that has the 
purpose of evading or avoiding, or attempts to violate, any of the 
prohibitions set forth in the order.
    Transactions otherwise prohibited under this part but found to be 
consistent with U.S. policy may be authorized by a general license 
contained in subpart E or by a specific license issued pursuant to the 
procedures described in Sec. 536.801 of subpart H. Civil and criminal 
penalties for violations of the Regulations are described in subpart G.
    Since 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. Wherever possible, however, it is the practice of the Office of 
Foreign Assets Control to receive written submissions or hold informal 
consultations with interested parties concerning any rule or other 
public document.

Paperwork Reduction Act

    The Regulations are being issued without prior notice and public 
comment procedure pursuant to the Administrative Procedure Act (5 
U.S.C. 553). Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507), the collections of information contained in the Regulations have 
been submitted to and approved by the Office of Management and Budget 
(``OMB'') pending public comment, and have been assigned control number 
1505-0163. 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.
    The collections of information in the Regulations are contained in 
Secs. 536.503, 536.504, subpart F, and Sec. 536.801. This information 
is required by the Office of Foreign Assets Control for licensing, 
compliance, civil penalty, and enforcement purposes. This information 
will be used to determine the eligibility of applicants for the 
benefits provided through specific licenses, to determine whether 
persons subject to the Regulations are in compliance with applicable 
requirements, and to determine whether and to what extent civil penalty 
or other enforcement action is appropriate. The likely respondents and 
record keepers are individuals and business organizations.
    The estimated total annual reporting and/or recordkeeping burden: 
500 hours.
    The estimated annual burden per respondent/record keeper varies 
from 30 minutes to 2 hours, depending on individual circumstances, with 
an estimated average of 1 hour.
     Estimated number of respondents and/or record keepers: 500.
    Estimated annual frequency of responses: 1-12.
    Comments are invited on: (a) whether these collections of 
information are necessary for the proper performance of the functions 
of the agency, including whether the information has practical utility; 
(b) the accuracy of the agency's estimate of the burden of the 
collections of information; (c) ways to enhance the quality, utility, 
and clarity of the information to be collected; (d) ways to minimize 
the burden of the collection of information on respondents, including 
through the use of automated collection techniques or other forms of 
information technology; and (e) estimates of capital or start-up costs 
and costs of operation, maintenance, and purchase of services to 
provide information.
    Comments concerning the above information, the accuracy of 
estimated average annual burden, and suggestions for reducing this 
burden should be directed to OMB, Paperwork Reduction Project, control 
number 1505-0163, Washington, DC 20503, with a copy to the Office of 
Foreign Assets Control, Department of the Treasury, 1500 Pennsylvania 
Ave., NW--Annex, Washington, DC 20220. Any such comments should be 
submitted not later than May 5, 1997. Comments on aspects of the 
Regulations other than those involving collections of information 
should not be sent to OMB.

List of Subjects in 31 CFR Part 536

    Administrative practice and procedure, Banks, banking, Blocking of 
assets, Drug traffic control, Narcotics trafficking, Penalties, 
Reporting and recordkeeping requirements, Specially designated 
narcotics traffickers, Transfer of assets.
    For the reasons set forth in the preamble, 31 CFR part 536 is added 
to read as follows:

PART 536--NARCOTICS TRAFFICKING SANCTIONS REGULATIONS

Subpart A--Relation of This Part to Other Laws and Regulations

Sec.
536.101 Relation of this part to other laws and regulations.

Subpart B--Prohibitions

536.201 Prohibited transactions involving blocked property.
536.202 Effect of transfers violating the provisions of this part.
536.203 Holding of certain types of blocked property in interest-
bearing accounts.
536.204 Evasions; attempts; conspiracies.
536.205 Exempt transactions.

[[Page 9961]]

Subpart C--General Definitions

536.301 Blocked account; blocked property.
536.302 Effective date.
536.303 Entity.
536.304 Foreign person.
536.305 General license.
536.306 Information and informational materials.
536.307 Interest.
536.308 License.
536.309 Person.
536.310 Property; property interest.
536.311 Narcotics trafficking.
536.312 Specially designated narcotics trafficker.
536.313 Specific license.
536.314 Transfer.
536.315 United States.
536.316 United States person; U.S. person.
536.317 U.S. financial institution.

Subpart D--Interpretations

536.401 Reference to amended sections.
536.402 Effect of amendment.
536.403 Termination and acquisition of an interest in blocked 
property.
536.404 Setoffs prohibited.
536.405 Transactions incidental to a licensed transaction.
536.406 Provision of services.
536.407 Offshore transactions.
536.408 Alleged change in ownership or control of an entity 
designated as a specially designated narcotics trafficker.
536.409 Credit extended and cards issued by U.S. financial 
institutions.

Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

536.501 Effect of license or authorization.
536.502 Exclusion from licenses and authorizations.
536.503 Payments and transfers to blocked accounts in U.S. financial 
institutions.
536.504 Investment and reinvestment of certain funds.
536.505 Entries in certain accounts for normal service charges 
authorized.
536.506 Provision of certain legal services authorized.
536.507 Authorization of emergency medical services.

Subpart F--Reports

536.601 Required records.
536.602 Reports to be furnished on demand.
536.603 Registration of persons holding blocked property subject to 
Sec. 536.201.

Subpart G--Penalties

536.701 Penalties.
536.702 Prepenalty notice.
536.703 Response to prepenalty notice.
536.704 Penalty notice.
536.705 Administrative collection; referral to United States 
Department of Justice.

Subpart H--Procedures

536.801 Licensing.
536.802 Decisions.
536.803 Amendment, modification, or revocation.
536.804 Rulemaking.
536.805 Delegation by the Secretary of the Treasury.
536.806 Rules governing availability of information.

Subpart I--Paperwork Reduction Act

536.901 Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 50 U.S.C. 1601-1641, 1701-1706; Pub. L. 
101-410, 104 Stat. 890 (28 U.S.C. 2461 note); E.O. 12978, 60 FR 
54579 (October 24, 1995), 3 CFR, 1995 Comp., p. 415.

Subpart A--Relation of This Part to Other Laws and Regulations


Sec. 536.101  Relation of this part to other laws and regulations.

    (a) This part is separate from, and independent of, the other parts 
of this chapter. Differing foreign policy and national security 
contexts may result in differing interpretations of similar language 
among the parts of this chapter. No license or authorization contained 
in or issued pursuant to those other parts authorizes any transaction 
prohibited by this part. No license or authorization contained in or 
issued pursuant to any other provision of law or regulation authorizes 
any transaction prohibited by this part.
    (b) No license or authorization contained in or issued pursuant to 
this part relieves the involved parties from complying with any other 
applicable laws or regulations.

Subpart B--Prohibitions


Sec. 536.201  Prohibited transactions involving blocked property.

    Except as 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, no property or interests in property of a specially designated 
narcotics trafficker 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, may be transferred, paid, exported, withdrawn or otherwise 
dealt in.


Sec. 536.202  Effect of transfers violating the provisions of this 
part.

    (a) Any transfer after the effective date, which is in violation of 
any provision of this part or of any regulation, order, directive, 
ruling, instruction, license, or other authorization hereunder and 
involves any property held in the name of a specially designated 
narcotics trafficker or in which a specially designated narcotics 
trafficker has or has had an interest since such date, is null and void 
and shall not be the basis for the assertion or recognition of any 
interest in or right, remedy, power or privilege with respect to such 
property.
    (b) No transfer before the effective date shall be the basis for 
the assertion or recognition of any right, remedy, power, or privilege 
with respect to, or interest in, any property held in the name of a 
specially designated narcotics trafficker or in which a specially 
designated narcotics trafficker has an interest, or has had an interest 
since such date, unless the person with whom such property is held or 
maintained, prior to such date, had written notice of the transfer or 
by any written evidence had recognized such transfer.
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by or pursuant to the direction or authorization 
of the Director of the Office of Foreign Assets Control before, during, 
or after a transfer shall validate such transfer or render it 
enforceable to the same extent that it would be valid or enforceable 
but for the provisions of the International Emergency Economic Powers 
Act, this part, and any regulation, order, directive, ruling, 
instruction, or license issued hereunder.
    (d) Transfers of property which otherwise would be null and void or 
unenforceable by virtue of the provisions of this section shall not be 
deemed to be null and void or unenforceable as to any person with whom 
such property 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 was held 
or maintained;
    (2) The person with whom such property 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 by or pursuant to this part and was 
not so licensed or authorized, or if a license or authorization did 
purport to cover the transfer, that such license or authorization had 
been obtained by misrepresentation of a third party or the withholding 
of material facts or was otherwise fraudulently obtained; and
    (3) The person with whom such property 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

[[Page 9962]]

regulation, ruling, instruction, license, or other direction or 
authorization hereunder; or
    (ii) Such transfer was not licensed or authorized by the Director 
of the Office of Foreign Assets Control; or
    (iii) If a license did purport to cover the transfer, such license 
had been obtained by misrepresentation of a third party or the 
withholding of material facts or was otherwise fraudulently obtained.
    Note to paragraph (d)(3): The filing of a report in accordance with 
the provisions of this paragraph (d)(3) shall not be deemed evidence 
that the terms of paragraphs (d)(l) and (2) of this section have been 
satisfied.
    (e) Unless licensed or authorized pursuant to this part, any 
attachment, judgment, decree, lien, execution, garnishment, or other 
judicial process is null and void with respect to any property which, 
on or since the effective date, was held in the name of a specially 
designated narcotics trafficker or in which there existed an interest 
of a specially designated narcotics trafficker.


536.203  Holding of certain types of blocked property in interest-
bearing accounts.

    (a)(1) Any person, including a U.S. financial institution, 
currently holding property subject to Sec. 536.201 which, as of the 
effective date or the date of receipt if subsequent to the effective 
date, is not being held in an interest-bearing account, or otherwise 
invested in a manner authorized by the Office of Foreign Assets Control 
(e.g., Sec. 536.504), shall transfer such property to, or hold such 
property or cause such property to be held in, an interest-bearing 
account or interest-bearing status in a U.S. financial institution as 
of the effective date or the date of receipt if subsequent to the 
effective date of this section, unless otherwise authorized or directed 
by the Office of Foreign Assets Control.
    (2) The requirement set forth in paragraph (a)(1) of this section 
shall apply to currency, bank deposits, accounts, obligations, and any 
other financial or economic resources or assets, and any proceeds 
resulting from the sale of tangible or intangible property. If interest 
is credited to an account separate from that in which the interest-
bearing asset is held, the name of the account party on both accounts 
must be the same and must clearly indicate the specially designated 
narcotics trafficker having an interest in the accounts. If the account 
is held in the name of a specially designated narcotics trafficker, the 
name of the account to which interest is credited must be the same.
    (b) For purposes of this section, the term interest-bearing account 
means a blocked account in a U.S. financial institution earning 
interest at rates that are commercially reasonable for the amount of 
funds in the account. Except as otherwise authorized, the funds may not 
be invested or held in instruments the maturity of which exceeds 90 
days.
    (c) This section does not apply to blocked tangible property, such 
as chattels, nor does it create an affirmative obligation on the part 
of the holder of such blocked tangible property to sell or liquidate 
the property and put the proceeds in a blocked account. However, the 
Office of Foreign Assets Control may issue licenses permitting or 
directing sales of tangible property in appropriate cases.


536.204  Evasions; attempts; conspiracies.

    Any transaction for the purpose of, or which has the effect of, 
evading or avoiding, or which facilitates the evasion or avoidance of, 
any of the prohibitions set forth in this part, is hereby prohibited. 
Any attempt to violate the prohibitions set forth in this part is 
hereby prohibited. Any conspiracy formed for the purpose of engaging in 
a transaction prohibited by this part is hereby prohibited.


536.205  Exempt transactions.

    (a) Personal communications. The prohibitions contained in this 
part do not apply to any postal, telegraphic, telephonic, or other 
personal communication, which does not involve the transfer of anything 
of value.
    (b) Information and informational materials. (1) The importation 
from any country and the exportation to any country of information or 
informational materials as defined in Sec. 536.306, whether commercial 
or otherwise, regardless of format or medium of transmission, are 
exempt from the prohibitions and regulations of this part.
    (2) This section does not authorize transactions related to 
information and informational materials not fully created and in 
existence at the date of the transactions, or to the substantive or 
artistic alteration or enhancement of informational materials, or to 
the provision of marketing and business consulting services by a U.S. 
person. Such prohibited transactions include, without limitation, 
payment of advances for informational materials not yet created and 
completed, provision of services to market, produce or co-produce, 
create or assist in the creation of information and informational 
materials, and payment of royalties to a specially designated narcotics 
trafficker with respect to income received for enhancements or 
alterations made by U.S. persons to information or informational 
materials imported from a specially designated narcotics trafficker.
    (3) This section does not authorize transactions incident to the 
exportation of technology that is not informational material as defined 
in Sec. 536.306(b)(1) or incident to the exportation of goods for use 
in the transmission of any information.
    (c) Travel. The prohibitions contained in this part do not apply to 
transactions ordinarily incident to travel to or from any country, 
including importation of accompanied baggage for personal use, 
maintenance within any country including payment of living expenses and 
acquisition of goods or services for personal use, and arrangement or 
facilitation of such travel including non-scheduled air, sea, or land 
voyages. Any transactions entered into by a specially designated 
narcotics trafficker while traveling in the United States that are 
outside the scope of those set forth in this paragraph are in violation 
of Sec. 536.201.

Subpart C--General Definitions


Sec. 536.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibition in Sec. 536.201 held in 
the name of a specially designated narcotics trafficker or in which a 
specially designated narcotics trafficker 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 
authorizing such action.


Sec. 536.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this part which is 
12:01 a.m. EDT, October 22, 1995, or, in the case of specially 
designated narcotics traffickers designated after that date, the 
earlier of the date on which a person receives actual or constructive 
notice of such designation.


Sec. 536.303  Entity.

    The term entity means a partnership, association, corporation, or 
other organization, group or subgroup.


Sec. 536.304  Foreign person.

    The term foreign person means any citizen or national of a foreign 
state (including any such individual who is also a citizen or national 
of the United

[[Page 9963]]

States), or any entity not organized solely under the laws of the 
United States or existing solely in the United States, but does not 
include a foreign state.


Sec. 536.305  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.


Sec. 536.306  Information and informational materials.

    (a) For purposes of this part, the term information and 
informational materials means:
    (1) Publications, films, posters, phonograph records, photographs, 
microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and 
news wire feeds, and other information and informational articles.
    (2) To be considered informational materials, artworks must be 
classified under chapter subheading 9701, 9702, or 9703 of the 
Harmonized Tariff Schedule of the United States.
    (b) The terms information and informational materials with respect 
to U.S. exports do not include items:
    (1) That were, as of April 30, 1994, or that thereafter become, 
controlled for export pursuant to section 5 of the Export 
Administration Act of 1979, 50 U.S.C. App. 2401-2420 (the ``EAA''), or 
section 6 of the EAA to the extent that such controls promote 
nonproliferation or antiterrorism policies of the United States, 
including software as defined in 15 CFR part 772 that is not publicly 
available (see 15 CFR parts 734 and 772); or
    (2) With respect to which acts are prohibited by 18 U.S.C. chapter 
37.


Sec. 536.307  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.


Sec. 536.308  License.

    Except as otherwise specified, the term license means any license 
or authorization contained in or issued pursuant to this part.


Sec. 536.309  Person.

    The term person means an individual or entity.


Sec. 536.310  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 thereunder, 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.


Sec. 536.311  Narcotics trafficking.

    The term narcotics trafficking means any activity undertaken 
illicitly to cultivate, produce, manufacture, distribute, sell, finance 
or transport, or otherwise assist, abet, conspire, or collude with 
others in illicit activities relating to narcotic drugs, including, but 
not limited to, cocaine.


Sec. 536.312  Specially designated narcotics trafficker.

    The term specially designated narcotics trafficker means:
    (a) Persons listed in the annex to Executive Order 12978 (3 CFR, 
1995 Comp., p.415);
    (b) Foreign persons designated by the Secretary of Treasury, in 
consultation with the Attorney General and the Secretary of State, 
because they are found:
    (1) To play a significant role in international narcotics 
trafficking centered in Colombia; or
    (2) Materially to assist in, or provide financial or technological 
support for or goods or services in support of, the narcotics 
trafficking activities of specially designated narcotics traffickers; 
and
    (c) Persons determined by the Secretary of the Treasury, in 
consultation with the Attorney General and the Secretary of State, to 
be owned or controlled by, or to act for or on behalf of, any other 
specially designated narcotics trafficker.


Sec. 536.313  Specific license.

    The term specific license means any license or authorization not 
set forth in this part but issued pursuant to this part.


Sec. 536.314  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.


Sec. 536.315  United States.

    The term United States means the United States, its territories and 
possessions, and all areas under the jurisdiction or authority thereof.


Sec. 536.316  United States person; U.S. person.

    The term United States person or U.S. person means any United 
States citizen or national; 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.


Sec. 536.317  U.S. financial institution.

    The term U.S. financial institution means any U.S. person 
(including 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,

[[Page 9964]]

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 which are located in the United States, 
but not such institutions' foreign branches, offices, or agencies.

Subpart D--Interpretations


Sec. 536.401  Reference to amended sections.

    Except as otherwise specified, reference to any section of this 
part or to any regulation, ruling, order, instruction, direction, or 
license issued pursuant to this part shall be deemed to refer to the 
same as currently amended.


Sec. 536.402  Effect of amendment.

    Any amendment, modification, or revocation of any section of this 
part 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 shall not, unless otherwise specifically 
provided, be deemed to affect any act done or omitted to be done, 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 shall continue and may be enforced as if such 
amendment, modification, or revocation had not been made.


Sec. 536.403  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 property (including any property 
interest) away from a specially designated narcotics trafficker, such 
property shall no longer be deemed to be property in which a specially 
designated narcotics trafficker has or has had an interest, or which is 
held in the name of a specially designated narcotics trafficker, unless 
there exists in the property another interest of a specially designated 
narcotics trafficker, 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 
specially designated narcotics trafficker, such property shall be 
deemed to be property in which there exists an interest of the 
specially designated narcotics trafficker.


Sec. 536.404  Setoffs prohibited.

    A setoff against blocked property (including a blocked account), 
whether by a U.S. bank or other U.S. person, is a prohibited transfer 
under Sec. 536.201 if effected after the effective date.


Sec. 536.405  Transactions incidental to a licensed transaction.

    Any transaction ordinarily incident to a licensed transaction and 
necessary to give effect thereto is also authorized, except a 
transaction by an unlicensed, specially designated narcotics trafficker 
or involving a debit to a blocked account or a transfer of blocked 
property not explicitly authorized within the terms of the license.


Sec. 536.406  Provision of services.

    (a) Except as provided in Sec. 536.205, the prohibitions contained 
in Sec. 536.201 apply to services performed by U.S. persons, wherever 
located:
    (1) On behalf of, or for the benefit of, a specially designated 
narcotics trafficker; or
    (2) With respect to property interests of a specially designated 
narcotics trafficker.
    (b) Example: U.S. persons may not, except as authorized by the 
Office of Foreign Assets Control by or pursuant to this part, provide 
legal, accounting, financial, brokering, freight forwarding, 
transportation, public relations, educational, or other services to a 
specially designated narcotics trafficker. See Sec. 536.506, with 
respect to certain authorized legal services.


Sec. 536.407  Offshore transactions.

    The prohibitions contained in Sec. 536.201 apply to transactions by 
U.S. persons in locations outside the United States with respect to 
property which the U.S. person knows, or has reason to know, is held in 
the name of a specially designated narcotics trafficker, or in which 
the U.S. person knows, or has reason to know, a specially designated 
narcotics trafficker has or has had an interest since the effective 
date.


Sec. 536.408  Alleged change in ownership or control of an entity 
designated as a specially designated narcotics trafficker.

    (a) A change or alleged change in ownership or control of an entity 
designated as a specially designated narcotics trafficker shall not be 
the basis for removal of that entity from the list of specially 
designated narcotics traffickers unless, upon investigation by the 
Office of Foreign Assets Control and submission of evidence by the 
entity, it is demonstrated to the satisfaction of the Director of the 
Office of Foreign Assets Control that the transfer to a bona fide 
purchaser at arm's length is legitimate and that the entity no longer 
meets the criteria for designation under Sec. 536.312. Evidence 
submitted must conclusively demonstrate that all ties with other 
specially designated narcotics traffickers have been completely 
severed, and may include, but is not limited to, articles of 
incorporation; identification of new directors, officers, shareholders, 
and sources of capital; and contracts evidencing the sale of the entity 
to its new owners.
    (b) Any continuing substantial financial obligations on the part of 
the new owners to any specially designated narcotics traffickers, 
including long-term payment plans, leases, or rents, will be considered 
as evidence of continuing control of the entity by the specially 
designated narcotics trafficker. Purchase of a designated entity 
without ongoing substantial financial obligations to a specially 
designated narcotics trafficker may nonetheless be a basis for 
subsequent designation of the purchaser, if the transaction is 
determined materially to assist in or provide financial support for the 
narcotics trafficking activities of specially designated narcotics 
traffickers for purposes of Sec. 536.312(b)(2). For example, any 
acquisition transaction resulting in a direct cash transfer to or other 
enrichment of a specially designated narcotics trafficker could lead to 
designation of the purchaser. Mere change in name of an entity will not 
be considered as constituting a change of the entity's status.


Sec. 536.409  Credit extended and cards issued by U.S. financial 
institutions.

    The prohibition in Sec. 536.201 on dealing in property in which a 
specially designated narcotics trafficker has an interest 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 designated under this part.

Subpart E--Licenses, Authorizations, and Statements of Licensing 
Policy


Sec. 536.501  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

[[Page 9965]]

Control, shall be deemed to authorize or validate any transaction 
effected prior to the issuance of the license, 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 or prohibitions 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.


Sec. 536.502  Exclusion from licenses and authorizations.

    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 therein conferred, or 
to restrict the applicability thereof with respect to particular 
persons, property, transactions, or classes thereof. Such action shall 
be binding upon all persons receiving actual or constructive notice of 
such exclusion or restriction.


Sec. 536.503  Payments and transfers to blocked accounts in U.S. 
financial institutions.

    (a) Any payment of funds or transfer of credit or other financial 
or economic resources or assets into a blocked account in a U.S. 
financial institution is authorized, provided that a transfer from a 
blocked account pursuant to this authorization may only be made to 
another blocked account held in the same name on the books of the same 
U.S. financial institution. This authorization is subject to the 
condition that written notification from the U.S. financial institution 
receiving an authorized payment or transfer is furnished to the 
Compliance Programs Division, Office of Foreign Assets Control, U.S. 
Treasury Department, 1500 Pennsylvania Avenue, NW--Annex, Washington, 
DC 20220, within 10 days from the value date of the payment or 
transfer. This notification shall confirm that the payment or transfer 
has been deposited into a blocked account pursuant to this section and 
Sec. 536.203 and shall provide the account number, the name and address 
of the person in whose name the account is held and, if the account 
party is not a specially designated narcotics trafficker, the name of 
the specially designated narcotics trafficker having an interest in the 
account, the name and address of the transferee U.S. financial 
institution, the name and address of the transferor financial 
institution, the amount of the payment or transfer, the name and 
telephone number of a contact person at the transferee financial 
institution from whom compliance information may be obtained, and the 
name and telephone number of the person, registered with the Office of 
Foreign Assets Control pursuant to Sec. 536.603, responsible for the 
administration of blocked assets at the transferee financial 
institution from whom records on blocked assets may be obtained.
    (b) This section does not authorize any transfer from a blocked 
account within the United States to an account held outside the United 
States.


Sec. 536.504  Investment and reinvestment of certain funds.

    (a) U.S. financial institutions are hereby authorized and directed 
to invest and reinvest assets held in blocked accounts in the name of a 
specially designated narcotics trafficker, subject to the following 
conditions:
    (1) The assets representing such investments and reinvestments are 
credited to a blocked account or sub-account which is in the name of 
the specially designated narcotics trafficker and which is located in 
the United States or within the possession or control of a U.S. person; 
and
    (2) The proceeds of such investments and reinvestments are not 
credited to a blocked account or sub-account under any name or 
designation which differs from the name or designation of the specific 
blocked account or sub-account in which such funds or securities were 
held; and
    (3) No immediate financial or economic benefit or access accrues 
(e.g., through pledging or other use) to the specially designated 
narcotics trafficker.
    (b)(1) U.S. persons seeking to avail themselves of this 
authorization must register with the Office of Foreign Assets Control, 
Blocked Assets Division, before undertaking transactions authorized 
under this section.
    (2) Transactions conducted pursuant to this section must be 
reported to the Office of Foreign Assets Control, Blocked Assets 
Division, in a report filed no later than 10 business days following 
the last business day of the month in which the transactions occurred.


Sec. 536.505  Entries in certain accounts for normal service charges 
authorized.

    (a) U.S. financial institutions are hereby authorized to debit any 
blocked account with such U.S. financial institution in payment or 
reimbursement for normal service charges owed to such U.S. financial 
institution by the owner of such blocked account.
    (b) As used in this section, the term normal service charge shall 
include charges in payment or reimbursement for interest due; cable, 
telegraph, 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, photostats, credit reports, transcripts of 
statements, registered mail, insurance, stationery and supplies, check 
books, and other similar items.


Sec. 536.506  Provision of certain legal services authorized.

    (a) The provision to or on behalf of a specially designated 
narcotics trafficker of the legal services set forth in paragraph (b) 
of this section is authorized, provided that all receipt of payment 
therefor must be specifically licensed.
    (b) Specific licenses may be issued, on a case-by-case basis, 
authorizing receipt of payment of professional fees and reimbursement 
of incurred expenses for the following legal services by U.S. persons 
to a specially designated narcotics trafficker:
    (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 is not provided to 
facilitate transactions that would violate any of the prohibitions 
contained in this part;
    (2) Representation of a specially designated narcotics trafficker 
when named as a defendant in or otherwise made a party to domestic 
United States legal, arbitration, or administrative proceedings;
    (3) Initiation of domestic United States legal, arbitration, or 
administrative proceedings in defense of property interests subject to 
U.S.

[[Page 9966]]

jurisdiction of a specially designated narcotics trafficker;
    (4) Representation before any federal or state agency with respect 
to the imposition, administration, or enforcement of United States 
sanctions against significant narcotics traffickers centered in 
Colombia or specially designated narcotics traffickers; and
    (5) Provision of legal services in any other context in which 
prevailing United States law requires access to legal counsel at public 
expense.
    (c) The provision of any other legal services to a specially 
designated narcotics trafficker, not otherwise authorized in or 
exempted by this part, requires the issuance of a specific license.
    (d) Entry into a settlement agreement affecting property or 
interests in property of a specially designated narcotics trafficker 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 a property interest 
of a specially designated narcotics trafficker is prohibited unless 
specifically licensed in accordance with Sec. 536.202(e).


Sec. 536.507  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services to a 
specially designated narcotics trafficker located in the United States 
is authorized, provided that any payment for such services requires 
prior authorization by specific license.

Subpart F--Reports


Sec. 536.601 Required records.

    (a) Except as otherwise provided, every person engaging in any 
transaction subject to the provisions of this part shall keep a full 
and accurate record of each transaction engaged in, regardless of 
whether such transaction is effected pursuant to license or otherwise, 
and such record shall be available for examination for at least 5 years 
after the date of such transaction. Except as otherwise provided, every 
person holding property subject to Sec. 536.201 shall keep a full and 
accurate record of such property, and such record shall be available 
for examination for the period of time that such property is blocked 
and for at least 5 years after the date such property is unblocked.
    (b) Any person, other than an individual, required to maintain 
records pursuant to this section, must designate an individual to be 
responsible for providing information concerning such records to the 
Office of Foreign Assets Control when so requested.


Sec. 536.602  Reports to be furnished on demand.

    Every person is required to furnish under oath, in the form of 
reports or otherwise, from time to time and at any time as may be 
required, complete information relative to any transaction, regardless 
of whether such transaction is effected pursuant to license or 
otherwise, subject to the provisions of this part. Such reports may be 
required to include the production of any books of account, contracts, 
letters or other papers, connected with any such transaction or 
property, in the custody or control of the person required to make such 
reports. Reports with respect to transactions may be required either 
before or after such transactions are completed. The Director of 
Foreign Assets Control may, through any person or agency, conduct 
investigations, hold hearings, administer oaths, examine witnesses, 
receive evidence, take depositions, and require by subpoena the 
attendance and testimony of witnesses and the production of all books, 
papers, and documents relating to any matter under investigation, 
regardless of whether any report has been required or filed in 
connection therewith.


Sec. 536.603  Registration of persons holding blocked property subject 
to Sec. 536.201.

    (a) Any individual holding property subject to Sec. 536.201 must 
register with the Office of Foreign Assets Control, Blocked Assets 
Division, by the later of March 17, 1997, or within 10 days after the 
date such property is received or becomes subject to Sec. 536.201.
    (b) Any person, other than an individual, holding property subject 
to Sec. 536.201 must register the name, title, address, and telephone 
number of the individual designated under Sec. 536.601(b) to be 
responsible for the administration of blocked assets, from whom the 
Office of Foreign Assets Control can obtain information and records. 
The registration shall be sent to the Blocked Assets Division, Office 
of Foreign Assets Control, U.S. Treasury Department, 1500 Pennsylvania 
Avenue, NW--Annex, Washington, DC 20220, by the later of March 17, 
1997, or, unless notification is given pursuant to Sec. 536.503, 10 
days after the date such property is received or becomes subject to 
Sec. 536.201.

Subpart G--Penalties


Sec. 536.701  Penalties.

    (a) Attention is directed to section 206 of the International 
Emergency Economic Powers Act (50 U.S.C. 1705 -- the ``Act''), 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 the Act. Section 206 of the 
Act, as adjusted pursuant to the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 
note), provides that:
    (1) A civil penalty of not to exceed $11,000 per violation may be 
imposed on any person who violates any license, order, or regulation 
issued under the Act;
    (2) Whoever willfully violates any license, order, or regulation 
issued under the Act shall, upon conviction, be fined not more than 
$50,000, or, if a natural person, may be imprisoned for not more than 
ten years, or both; 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) The criminal penalties provided in the Act are subject to 
increase pursuant to 18 U.S.C. 3571.
    (c) Attention is also directed to 18 U.S.C. 1001, which provides 
that whoever, in any matter within the jurisdiction of any department 
or agency of the United States, knowingly and willfully falsifies, 
conceals or covers up by any trick, scheme, or device a material fact, 
or makes any false, fictitious or fraudulent statements or 
representations or makes or uses any false writing or document knowing 
the same to contain any 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.
    (d) Violations of this part may also be subject to relevant 
provisions of other applicable laws.


Sec. 536.702  Prepenalty notice.

    (a) When required. If the Director of the Office of Foreign Assets 
Control has reasonable cause 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 authorization of 
the Secretary of the Treasury pursuant to this part or otherwise under 
the

[[Page 9967]]

International Emergency Economic Powers Act, and the Director 
determines that further proceedings are warranted, he shall issue to 
the person concerned a notice of his intent to impose a monetary 
penalty. The prepenalty notice may be issued whether or not another 
agency has taken any action with respect to this matter.
    (b) Contents--(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 respondent's right to respond to the notice within 30 
days of its mailing as to why a monetary penalty should not be imposed, 
or, if imposed, why it should be in a lesser amount than proposed.


Sec. 536.703  Response to prepenalty notice.

    (a) Time within which to respond. The respondent shall have 30 days 
from the date of mailing of the prepenalty notice to respond in writing 
to the Director of the Office of Foreign Assets Control.
    (b) Form and contents of written response. The written response 
need not be in any particular form, but shall contain information 
sufficient to indicate that it is in response to the prepenalty notice. 
It should respond to the allegations in the prepenalty notice and set 
forth the reasons why the person believes the penalty should not be 
imposed or, if imposed, why it should be in a lesser amount than 
proposed.
    (c) Informal settlement. In addition or as an alternative to a 
written response to a prepenalty notice pursuant to this section, the 
respondent or respondent's representative may contact the Office of 
Foreign Assets Control as advised in the prepenalty notice to propose 
the settlement of allegations contained in the prepenalty notice and 
related matters. In the event of settlement at the prepenalty stage, 
the prepenalty notice will be withdrawn, the respondent is not 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 
30-day period specified in paragraph (a) of this section for written 
response to the prepenalty notice remains in effect unless additional 
time is granted by the Office of Foreign Assets Control.


Sec. 536.704  Penalty notice.

    (a) No violation. If, after considering any written response to the 
prepenalty notice and any relevant facts, the Director of the Office of 
Foreign Assets Control determines that there was no violation by the 
respondent named in the prepenalty notice, the Director promptly shall 
notify the respondent in writing of that determination and that no 
monetary penalty will be imposed.
    (b) Violation. If, after considering any written response to the 
prepenalty notice 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 promptly shall 
issue a written notice of the imposition of the monetary penalty or 
other available disposition on the respondent.


Sec. 536.705  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 
mailing of the written notice of the imposition of the penalty, the 
matter may be referred for administrative collection measures 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


Sec. 536.801  Licensing.

    (a) General licenses. General licenses have been issued authorizing 
under appropriate terms and conditions certain types of transactions 
which are subject to the prohibitions contained in this part. All such 
licenses in effect on the date of publication are set forth in subpart 
E of this part. It is the policy of the Office of Foreign Assets 
Control not to grant applications for specific licenses authorizing 
transactions to which the provisions of an outstanding general license 
are applicable. Persons availing themselves of certain general licenses 
may be required to file reports and statements in accordance with the 
instructions specified in those licenses. Failure to file such reports 
or statements will nullify the authority of the general license.
    (b) Specific licenses--(1) General course of procedure. 
Transactions subject to the prohibitions contained in this part which 
are not authorized by general license may be effected only under 
specific licenses.
    (2) Applications for specific licenses. Applications for specific 
licenses to engage in any transactions prohibited by or pursuant to 
this part may be filed by letter with the Office of Foreign Assets 
Control. Any person having an interest in a transaction or proposed 
transaction may file an application for a license authorizing such 
transaction, but the applicant for a specific license is required to 
make full disclosure of all parties in interest to the transaction so 
that a decision on the application may be made with full knowledge of 
all relevant facts and so that the identity and location of the persons 
who know about the transaction may be easily ascertained in the event 
of inquiry.
    (3) Information to be supplied. The applicant must supply all 
information specified by relevant instructions and/or forms, and must 
fully disclose the names of all the parties who are concerned with or 
interested in the proposed transaction. If the application is filed by 
an agent, the agent must disclose the name of his principal(s). Such 
documents as may be relevant shall be attached to each application as a 
part of such application except that documents previously filed with 
the Office of Foreign Assets Control may, where appropriate, be 
incorporated by reference. Applicants may be required to furnish such 
further information as is deemed necessary to a proper determination by 
the Office of Foreign Assets Control. Any applicant or other party in 
interest desiring to present additional information or discuss or argue 
the application may do so at any time before or after decision. 
Arrangements for oral presentation should be made with the Office of 
Foreign Assets Control.
    (4) Effect of denial. The denial of a license does not preclude the 
reopening of an application or the filing of a further application. The 
applicant or any other party in interest may at any time request 
explanation of the reasons for a denial by correspondence or personal 
interview.
    (5) Reports under specific licenses. As a condition for the 
issuance of any license, the licensee may be required to file reports 
with respect to the transaction covered by the license, in such form 
and at such times and places as may be prescribed in the license or 
otherwise.
    (6) Issuance of license. Licenses will be issued by the Office of 
Foreign Assets Control acting on behalf of the Secretary of the 
Treasury or licenses may be issued by the Secretary of the Treasury 
acting directly or through any

[[Page 9968]]

specifically designated person, agency, or instrumentality.
    (7) Address. License applications, reports, and inquiries should be 
addressed to the appropriate section or individual within the Office of 
Foreign Assets Control, or to its Director, at the following address: 
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Avenue, NW--Annex, Washington, DC 20220.


Sec. 536.802  Decisions.

    The Office of Foreign Assets Control will advise each applicant of 
the decision respecting filed applications. The decision of the Office 
of Foreign Assets Control acting on behalf of the Secretary of the 
Treasury with respect to an application shall constitute final agency 
action.


Sec. 536.803  Amendment, modification, or revocation.

    The provisions of this part and any rulings, licenses, whether 
general or specific, authorizations, instructions, orders, or forms 
issued hereunder may be amended, modified, or revoked at any time.


Sec. 536.804  Rulemaking.

    (a) All rules and other public documents are issued by the 
Secretary of the Treasury upon recommendation of the Director of the 
Office of Foreign Assets Control. In general, rulemaking by the Office 
of Foreign Assets Control involves foreign affairs functions of the 
United States, and for that reason is exempt from the requirements 
under the Administrative Procedure Act (5 U.S.C. 553) for notice of 
proposed rulemaking, opportunity for public comment, and delay in 
effective date. Wherever possible, however, it is the practice of the 
Office of Foreign Assets Control to receive written submissions or hold 
informal consultations with interested parties before the issuance of 
any rule or other public document.
    (b) Any interested person may petition the Director of the Office 
of Foreign Assets Control in writing for the issuance, amendment, or 
repeal of any rule.


Sec. 536.805  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to 
take pursuant to Executive Order 12978 or any further executive orders 
relating to the national emergency declared in Executive Order 12978 
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.


Sec. 536.806  Rules governing availability of information.

    (a) The records of the Office of Foreign Assets Control required by 
the Freedom of Information Act (5 U.S.C. 552) to be made available to 
the public shall be made available in accordance with the definitions, 
procedures, requirements for payment of fees, and other provisions of 
the regulations on the Disclosure of Records of the Departmental 
Offices and of other bureaus and offices of the Department of the 
Treasury issued under 5 U.S.C. 552 and published at 31 CFR part 1.
    (b) The records of the Office of Foreign Assets Control required by 
the Privacy Act (5 U.S.C. 552a) to be made available to an individual 
shall be made available in accordance with the definitions, procedures, 
requirements for payment of fees, and other provisions of the 
regulations on the Disclosure of Records of the Departmental Offices 
and of other bureaus and offices of the Department of the Treasury 
issued under 5 U.S.C. 552a and published at 31 CFR part 1.
    (c) Any form issued for use in connection with the Narcotics 
Trafficking Sanctions Regulations may be obtained in person or by 
writing to the Office of Foreign Assets Control, U.S. Department of the 
Treasury, 1500 Pennsylvania Avenue, NW--Annex, Washington, D.C. 20220, 
or by calling 202/622-2520.

Subpart I--Paperwork Reduction Act


Sec. 536.901  Paperwork Reduction Act notice.

    The information collection requirements in Secs. 536.503, 536.504, 
subpart F, and Sec. 536.801 have been approved by the Office of 
Management and Budget under the Paperwork Reduction Act and assigned 
control number 1505-0163.

    Dated: February 7, 1997.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: February 18, 1997.
James E. Johnson,
Assistant Secretary (Enforcement).
[FR Doc. 97-5299 Filed 2-28-97; 12:34 pm]
BILLING CODE 4810-25-F