Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 16771 

(i) Computation of time for response. 

A response to a Pre-Penalty 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 Pre-Penalty Notice was 

mailed. If the Pre-Penalty Notice was 

personally delivered by a non-U.S. 

Postal Service agent authorized by the 

Office of Foreign Assets Control, a 

response must be postmarked or datestamped on or before the 30th day after 

the date of delivery. 

(ii) 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 discretion of the Office of Foreign 

Assets Control, only upon specific 

request to the Office of Foreign Assets 

Control. 

(3) Form and method of response. A 

response to a Pre-Penalty Notice need 

not be in any particular form, but it 

must be typewritten and signed by the 

alleged violator or a representative 

thereof, must contain information 

sufficient to indicate that it is in 

response to the Pre-Penalty Notice, and 

must include the Office of Foreign 

Assets Control identification number 

listed on the Pre-Penalty Notice. 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 (b)(2) of this section. 

(c) Settlement. Settlement discussion 

may be initiated by the Office of Foreign 

Assets Control, the alleged violator, or 

the alleged violator’s authorized 

representative. For a description of 

practices with respect to settlement, see 

Appendix A to part 501 of this chapter. 

(d) Guidelines. Guidelines for the 

imposition or settlement of civil 

penalties by the Office of Foreign Assets 

Control are contained in Appendix A to 

part 501 of this chapter. 

(e) Representation. A representative of 

the alleged violator may act on behalf of 

the alleged violator, but any oral 

communication with the Office of 

Foreign Assets Control prior to a written 

submission regarding the specific 

allegations contained in the Pre-Penalty 

Notice must be preceded by a written 

letter of representation, unless the PrePenalty Notice was served upon the 

alleged violator in care of the 

representative. 

§ 543.703 Penalty imposition. 

If, after considering any written 

response to the Pre-Penalty Notice and 

any relevant facts, the Office of Foreign 

Assets Control determines that there 

was a violation by the alleged violator 

named in the Pre-Penalty Notice and 

that a civil monetary penalty is 

appropriate, the Office of Foreign Assets 

Control may issue a written Penalty 

Notice to the violator containing a 

determination of the violation and the 

imposition of the monetary penalty. For 

additional details concerning issuance 

of a Penalty Notice, see Appendix A to 

part 501 of this chapter. 

The issuance of the Penalty Notice 

shall constitute final agency action. The 

violator has the right to seek judicial 

review of that final agency action in 

federal district court. 

§ 543.704 Administrative collection; 

referral to United States Department of 

Justice. 

In the event that the violator 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, 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 

§ 543.801 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. 

§ 543.802 Delegation by the Secretary of 

the Treasury. 

Any action that the Secretary of the 

Treasury is authorized to take pursuant 

to Executive Order 13396 of February 7, 

2006 (71 FR 7389, February 10, 2006), 

and any further Executive orders 

relating to the national emergency 

declared in Executive Order 13396, 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 

§ 543.901 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 recordkeeping 

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 31, 2009. 

Adam J. Szubin, 

Director, Office of Foreign Assets Control. 

Approved: April 3, 2009. 

Stuart A. Levey 

Under Secretary, Office of Terrorism and 

Financial Intelligence, Department of the 

Treasury. 

[FR Doc. E9–8338 Filed 4–10–09; 8:45 am] 

BILLING CODE 4811–45–P 

DEPARTMENT OF THE TREASURY 

Office of Foreign Assets Control 

31 CFR Part 544 

Weapons of Mass Destruction 

Proliferators Sanctions Regulations 

AGENCY: Office of Foreign Assets 

Control, Treasury. 

ACTION: Final rule. 

SUMMARY: The Department of the 

Treasury’s Office of Foreign Assets 

Control (‘‘OFAC’’) is adding a new part 

to the Code of Federal Regulations to 

carry out the purposes of Executive 

Order 13382 of June 28, 2005, ‘‘Blocking 

Property of Weapons of Mass 

Destruction Proliferators and Their 

Supporters.’’ 

DATES: Effective Date: April 13, 2009. 

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 

(not toll free numbers). 

SUPPLEMENTARY INFORMATION: 

Electronic and Facsimile Availability 

This document and additional 

information concerning OFAC are 

available from OFAC’s Web site 

(http://www.treas.gov/ofac) or via 

facsimile through a 24-hour fax-on 

demand service, tel.: 202/622–0077. 

16772 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 

Background 

On June 28, 2005, the President, 

invoking the authority of, inter alia, the 

International Emergency Economic 

Powers Act (50 U.S.C. 1701–1706) 

(‘‘IEEPA’’), issued Executive Order 

13382 (70 FR 38567, July 1, 2005) (‘‘E.O. 

13382’’), effective at 12:01 a.m. eastern 

daylight time on June 29, 2005. In E.O. 

13382, the President took additional 

steps with respect to the national 

emergency described and declared in 

Executive Order 12938 of November 14, 

1994, regarding the proliferation of 

weapons of mass destruction and the 

means of delivering them. 

Section 1 of E.O. 13382 blocks, with 

certain exceptions, all property and 

interests in property that are in the 

United States, that come within the 

United States, or that are or come within 

the possession or control of United 

States persons, of: (1) The persons listed 

in an Annex to E.O. 13382; (2) any 

foreign person determined by the 

Secretary of State, in consultation with 

the Secretary of the Treasury, the 

Attorney General, and other relevant 

agencies, to have engaged, or attempted 

to engage, in activities or transactions 

that have materially contributed to, or 

pose a risk of materially contributing to, 

the proliferation of weapons of mass 

destruction or their means of delivery 

(including missiles capable of delivering 

such weapons), including any efforts to 

manufacture, acquire, possess, develop, 

transport, transfer or use such items, by 

any person or foreign country of 

proliferation concern; (3) any person 

determined by the Secretary of the 

Treasury, in consultation with the 

Secretary of State, the Attorney General, 

and other relevant agencies, to have 

provided, or attempted to provide, 

financial, material, technological or 

other support for, or goods or services 

in support of, any activity or transaction 

described in clause (2) above, or any 

person whose property and interests in 

property are blocked pursuant to E.O. 

13382; and (4) any person determined 

by the Secretary of the Treasury, in 

consultation with the Secretary of State, 

the Attorney General, and other relevant 

agencies, 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 E.O. 

13382. 

Section 1 of E.O. 13382 further 

provides that the prohibition on any 

transaction or dealing by a United States 

person or within the United States in 

blocked property or interests in property 

includes, but is not limited to, the 

making of any contribution or provision 

of funds, goods, or services by, to, or for 

the benefit of, any person whose 

property and interests in property are 

blocked pursuant to E.O. 13382, and the 

receipt of any contribution or provision 

of funds, goods, or services from any 

such person. Section 1 of E.O. 13382 

further prohibits any transaction by a 

United States person or within the 

United States that evades or avoids, or 

has the purpose of evading or avoiding, 

or attempts to violate any of the 

prohibitions set forth in E.O. 13382, as 

well as any conspiracy formed to violate 

such prohibitions. 

In Section 3 of E.O. 13382, the 

President determined that the making of 

donations of certain articles, such as 

food, clothing, and medicine intended 

to relieve human suffering, as specified 

in section 203(b)(2) of IEEPA (50 U.S.C. 

1702(b)(2)), by, to, or for the benefit of 

any person whose property and interests 

in property are blocked pursuant to E.O. 

13382 would seriously impair his ability 

to deal with the national emergency 

declared in Executive Order 12938, and 

the President therefore prohibited such 

donations. Accordingly, the donation of 

such items is prohibited unless 

authorized by OFAC. 

Section 6 of E.O. 13382 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 E.O. 13382. In furtherance 

of those purposes, OFAC is 

promulgating the Weapons of Mass 

Destruction Proliferators Sanctions 

Regulations, 31 CFR part 544 (the 

‘‘Regulations’’). 

Subpart A of the Regulations, which 

discusses the relation of the Regulations 

to other economic sanctions programs, 

includes a Note to § 544.101 clarifying 

that the sanctions implemented 

pursuant to the Weapons of Mass 

Destruction Trade Control Regulations 

set forth in 31 CFR part 539 are separate 

and distinct from the sanctions 

implemented pursuant to these 

Regulations, even though both programs 

are based on the same declaration of 

national emergency in Executive Order 

12938 of November 14, 1994. 

Accordingly, a ‘‘designated foreign 

person’’ whose goods, technology, or 

services are prohibited from being 

imported into the United States under 

the Weapons of Mass Destruction Trade 

Control Regulations is not necessarily a 

person whose property and interests in 

property are blocked pursuant to these 

Regulations. Consequently, the property 

and interests in property of a 

‘‘designated foreign person’’ under the 

Weapons of Mass Destruction Trade 

Control Regulations are not necessarily 

blocked by these Regulations, unless the 

‘‘designated foreign person’’ has 

separately become a person whose 

property and interests in property are 

blocked pursuant to these Regulations. 

However, the importation into the 

United States of goods, technology, or 

services (other than information or 

informational materials) produced or 

provided by a ‘‘designated foreign 

person’’ under the Weapons of Mass 

Destruction Trade Control Regulations 

remains prohibited. To help the public 

distinguish between these two 

programs, persons designated by the 

Secretary of State under the Weapons of 

Mass Destruction Trade Control 

Regulations are listed in a separate 

appendix to part 539 and are not listed 

on OFAC’s Specially Designated 

Nationals and Blocked Persons List 

(‘‘SDN list’’), which is accessible via 

OFAC’s Web site and can be found at 

Appendix A to 31 CFR chapter V. 

Persons whose property and interests in 

property are blocked under these 

Regulations are listed on OFAC’s SDN 

list with the identifier ‘‘[NPWMD].’’ 

Subpart B of the Regulations 

implements the prohibitions contained 

in Section 1 of E.O. 13382. See, e.g., 

§§ 544.201 and 544.205. Persons 

identified in the Annex to E.O. 13382, 

designated by the Secretary of State or 

the Secretary of the Treasury pursuant 

to E.O. 13382, or otherwise subject to 

the blocking provisions of E.O. 13382 

are referred to throughout the 

Regulations as ‘‘persons whose property 

and interests in property are blocked 

pursuant to § 544.201(a).’’ The names of 

persons listed in or designated pursuant 

to E.O. 13382 are or will be published 

on OFAC’s SDN list. Those names also 

have been or will be published in the 

Federal Register. 

Sections 544.202 and 544.203 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, and 

liquidated financial obligations, in 

interest-bearing blocked accounts. 

Section 544.204 of subpart B provides 

that all expenses incident to the 

maintenance of blocked physical 

property shall be the responsibility of 

the owners or operators of such property 

and that such expenses shall not be met 

from blocked funds, unless otherwise 

authorized. The section further provides 

that blocked property may, in OFAC’s 

discretion, be sold or liquidated and the 

net proceeds placed in a blocked 

interest-bearing account in the name of 

the owner of the property. 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 16773 

Section 544.205 implements the 

prohibitions of E.O. 13382 on any 

transaction by a United States person or 

within the United States that evades or 

avoids, has the purpose of evading or 

avoiding, or attempts to violate any of 

the prohibitions set forth in E.O. 13382, 

and on any conspiracy formed to violate 

such prohibitions. 

Section 544.206 of subpart B details 

transactions that are exempt from the 

prohibitions of part 544 pursuant to 

sections 203(b)(1), (3), and (4) of IEEPA 

(50 U.S.C. 1702(b)(1), (3), and (4)). 

These exemptions relate to personal 

communications, the importation and 

exportation of information or 

informational materials, and 

transactions ordinarily incident to 

travel. The President determined in 

Section 3 of E.O. 13382 that donations 

of the type of articles specified in Sec. 

203(b)(2) of IEEPA (50 U.S.C. 

1702(b)(2)), i.e., articles such as food, 

clothing, and medicine intended to 

relieve human suffering, by, to, or for 

the benefit of any person whose 

property and interests in property are 

blocked would seriously impair the 

President’s ability to deal with the 

declared national emergency. 

Accordingly, such donations are not 

exempted from these Regulations and 

are prohibited, unless authorized by 

OFAC. 

Subpart C of part 544 defines key 

terms used throughout the Regulations, 

and subpart D sets forth interpretive 

sections regarding the general 

prohibitions contained in subpart B. 

Section 544.411 sets out the rule that 

the property and interests in property of 

an entity are blocked if the entity is 50 

percent or more owned by a person 

whose property and interests in 

property are blocked, whether or not the 

entity itself is named in the Annex to 

E.O. 13382 or designated by the 

Secretary of State or OFAC. 

Transactions otherwise prohibited 

under part 544 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 

part 501 of 31 CFR chapter V. In 

addition to the general licenses, subpart 

E of part 544 also contains certain 

statements of licensing policy. 

Subpart F of part 544 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 G also refers to 

Appendix A of part 501 for a more 

complete description of these 

procedures. 

Subpart H of part 544 refers to subpart 

E of part 501 for applicable provisions 

relating to administrative procedures 

and memorializes a delegation of 

authority by the Secretary of the 

Treasury. 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 544 

Administrative practice and 

procedure, Banks, Banking, Blocking of 

assets, Credit, Foreign trade, Penalties, 

Proliferation, Reporting and 

recordkeeping requirements, Securities, 

Services, Weapons of mass destruction. 

■ For the reasons set forth in the 

preamble, the Department of the 

Treasury’s Office of Foreign Assets 

Control adds part 544 to 31 CFR chapter 

V to read as follows: 

PART 544—WEAPONS OF MASS 

DESTRUCTION PROLIFERATORS 

SANCTIONS REGULATIONS 

Subpart A—Relation of This Part to Other 

Laws and Regulations 

Sec. 

544.101 Relation of this part to other laws 

and regulations. 

Subpart B—Prohibitions 

544.201 Prohibited transactions involving 

blocked property. 

544.202 Effect of transfers violating the 

provisions of this part. 

544.203 Holding of funds in interestbearing accounts; investment and 

reinvestment. 

544.204 Expenses of maintaining blocked 

physical property; liquidation of blocked 

property. 

544.205 Evasions; attempts; conspiracies. 

544.206 Exempt transactions. 

Subpart C—General Definitions 

544.301 Blocked account; blocked property. 

544.302 Effective date. 

544.303 Entity. 

544.304 Information or informational 

materials. 

544.305 Interest. 

544.306 Licenses; general and specific. 

544.307 Person. 

544.308 Property; property interest. 

544.309 Transfer. 

544.310 United States. 

544.311 U.S. financial institution. 

544.312 United States person; U.S. person. 

Subpart D—Interpretations 

544.401 Reference to amended sections. 

544.402 Effect of amendment. 

544.403 Termination and acquisition of an 

interest in blocked property. 

544.404 Transactions ordinarily incident to 

a licensed transaction. 

544.405 Provision of services. 

544.406 Offshore transactions. 

544.407 Payments from blocked accounts to 

satisfy obligations prohibited. 

544.408 Charitable contributions. 

544.409 Credit extended and cards issued 

by U.S. financial institutions. 

544.410 Setoffs prohibited. 

544.411 Entities owned by a person whose 

property and interests in property are 

blocked. 

Subpart E—Licenses, Authorizations and 

Statements of Licensing Policy 

544.501 General and specific licensing 

procedures. 

544.502 Effect of license or authorization. 

544.503 Exclusion from licenses. 

544.504 Payments and transfers to blocked 

accounts in U.S. financial institutions. 

544.505 Entries in certain accounts for 

normal service charges authorized. 

544.506 Investment and reinvestment of 

certain funds. 

544.507 Provision of certain legal services 

authorized. 

544.508 Authorization of emergency 

medical services. 

Subpart F—Reports 

544.601 Records and reports. 

Subpart G—Penalties 

544.701 Penalties. 

544.702 Pre-Penalty Notice; settlement. 

544.703 Penalty imposition. 

544.704 Administrative collection; referral 

to United States Department of Justice. 

Subpart H—Procedures 

544.801 Procedures. 

544.802 Delegation by the Secretary of the 

Treasury. 

Subpart I—Paperwork Reduction Act 

544.901 Paperwork Reduction Act notice. 

16774 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 

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

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

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

Public Law 110–96, 121 Stat. 1011; E.O. 

12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 

950; E.O. 13094, 63 FR 40803, 3 CFR, 1998 

Comp., p. 200; E.O. 13382, 70 FR 38567, 3 

CFR, 2005 Comp., p. 170. 

Subpart A—Relation of This Part to 

Other Laws and Regulations 

§ 544.101 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 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. 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. 

Note to § 544.101: The sanctions 

implemented pursuant to the Weapons of 

Mass Destruction Trade Control Regulations 

set forth in part 539 of this chapter are 

separate and distinct from the sanctions 

implemented pursuant to this part, even 

though both programs have been imposed 

pursuant to the same declaration of national 

emergency in Executive Order 12938 of 

November 14, 1994. Accordingly, a 

‘‘designated foreign person’’ whose goods, 

technology, or services are prohibited from 

being imported into the United States under 

part 539 is not necessarily a person whose 

property and interests in property are 

blocked pursuant to § 544.201(a). 

Consequently, the property and interests in 

property of a ‘‘designated foreign person’’ 

under part 539 are not blocked, unless the 

‘‘designated foreign person’’ has separately 

become a person whose property and 

interests in property are blocked pursuant to 

§ 544.201(a) or any other part of 31 CFR 

chapter V. Note, however, that the 

importation into the United States of goods, 

technology, or services (other than 

information or informational materials) 

produced or provided by a ‘‘designated 

foreign person’’ under part 539 is prohibited 

by that part. 

Subpart B—Prohibitions 

§ 544.201 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, 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 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 13382 of June 28, 2005 

(70 FR 38567, July 1, 2005); 

(2) Any foreign person determined by 

the Secretary of State, in consultation 

with the Secretary of the Treasury, the 

Attorney General, and other relevant 

agencies, to have engaged, or attempted 

to engage, in activities or transactions 

that have materially contributed to, or 

pose a risk of materially contributing to, 

the proliferation of weapons of mass 

destruction or their means of delivery 

(including missiles capable of delivering 

such weapons), including any efforts to 

manufacture, acquire, possess, develop, 

transport, transfer or use such items, by 

any person or foreign country of 

proliferation concern; 

(3) Any person determined by the 

Secretary of the Treasury, in 

consultation with the Secretary of State, 

the Attorney General, and other relevant 

agencies, to have provided, or attempted 

to provide, financial, material, 

technological or other support for, or 

goods or services in support of, any 

activity or transaction described in 

paragraph (a)(2) of this section, or any 

person whose property and interests in 

property are blocked pursuant to this 

section; and 

(4) Any person determined by the 

Secretary of the Treasury, in 

consultation with the Secretary of State, 

the Attorney General, and other relevant 

agencies, 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 

section. 

Note to paragraph (a) of § 544.201: 1. The 

names of persons listed in or designated 

pursuant to Executive Order 13382, 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 (‘‘SDN’’ list) (which is accessible via the 

Office of Foreign Assets Control’s Web site), 

published in the Federal Register, and 

incorporated into Appendix A to this chapter 

with the identifier ‘‘[NPWMD].’’ See 

§ 544.411 concerning entities that may not be 

listed on the SDN list but whose property 

and interests in property are nevertheless 

blocked pursuant to paragraph (a) of this 

section. 

2. 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 during the pendency of 

an investigation. The names of persons 

whose property and interests in property are 

blocked pending investigation pursuant to 

this part also are published on the SDN list, 

published in the Federal Register, and 

incorporated into Appendix A to this chapter 

with the identifier ‘‘[BPI–NPWMD].’’ 

3. Sections 501.806 and 501.807 of this 

chapter 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 status 

as persons whose property and interests in 

Property are blocked pursuant to paragraph 

(a) of this section. 

(b) The prohibitions in paragraph (a) 

of this section include, but are not 

limited to, prohibitions on the following 

transactions when engaged in by a 

United States person or within the 

United States: 

(1) The making of any contribution or 

provision of funds, goods, or services 

by, to, or for the benefit of any person 

whose property and interests in 

property are blocked pursuant to 

paragraph (a) of this section; and 

(2) The receipt of any contribution or 

provision of funds, goods, or services 

from any person whose property and 

interests in property are blocked 

pursuant to paragraph (a) of this section. 

(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 paragraph (a) of this section 

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 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 16775 

of any such security may have or might 

appear to have assigned, transferred, or 

otherwise disposed of the security. 

§ 544.202 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 

§ 544.201(a), 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 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 

§ 544.201(a), unless the person who 

holds or maintains such property, 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 13382, 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 

(and as to such person only); 

(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 directive 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 § 544.202: 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) 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 § 544.201(a). 

§ 544.203 Holding of funds in interestbearing accounts; investment and 

reinvestment. 

(a) Except as provided in paragraphs 

(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 § 544.201(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 

§ 544.201(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 paragraphs (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 

§ 544.201(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. However, the Office of Foreign 

Assets Control may issue licenses 

permitting or directing such sales or 

liquidation 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 § 544.201(a), nor may their 

holder cooperate in or facilitate the 

pledging or other attempted use as 

collateral of blocked funds or other 

assets. 

§ 544.204 Expenses of maintaining 

blocked physical property; liquidation of 

blocked property. 

(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 § 544.201(a) shall 

be the responsibility of the owners or 

operators of such property, which 

16776 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 

expenses shall not be met from blocked 

funds. 

(b) Property blocked pursuant to 

§ 544.201(a) may, in the discretion 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. 

§ 544.205 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 a 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. 

§ 544.206 Exempt transactions. 

(a) Personal communications. The 

prohibitions contained in this part do 

not apply to any postal, telegraphic, 

telephonic, or other personal 

communication that does not involve 

the transfer of anything of value. 

(b) Information or informational 

materials. (1) The importation from any 

country and the exportation to any 

country of any information or 

informational materials, as defined in 

§ 544.304, whether commercial or 

otherwise, regardless of format or 

medium of transmission, are exempt 

from the prohibitions of this part. 

(2) This section does not exempt from 

regulation or authorize transactions 

related to information or 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. Such prohibited transactions 

include, but are not limited to, payment 

of advances for information or 

informational materials not yet created 

and completed (with the exception of 

prepaid subscriptions for widely 

circulated magazines and other 

periodical publications); provision of 

services to market, produce or coproduce, create, or assist in the creation 

of information or informational 

materials; and, with respect to 

information or informational materials 

imported from persons whose property 

and interests in property are blocked 

pursuant to § 544.201(a), payment of 

royalties with respect to income 

received for enhancements or alterations 

made by U.S. persons to such 

information or informational materials. 

(3) This section does not exempt or 

authorize transactions incident to the 

exportation of software subject to the 

Export Administration Regulations, 15 

CFR parts 730–774, or to the exportation 

of goods, technology, or software for use 

in the transmission of any data, or to the 

provision, sale, or leasing of capacity on 

telecommunications transmission 

facilities (such as satellite or terrestrial 

network connectivity) for use in the 

transmission of any data. The 

exportation of such items or services 

and the provision, sale, or leasing of 

such capacity or facilities to a person 

whose property and interests in 

property are blocked pursuant to 

§ 544.201(a) are prohibited. 

(c) Travel. The prohibitions contained 

in this part do not apply to any 

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 nonscheduled air, sea, 

or land voyages. 

Subpart C—General Definitions 

§ 544.301 Blocked account; blocked 

property. 

The terms blocked account and 

blocked property shall mean any 

account or property subject to the 

prohibitions in § 544.201 held in the 

name of a person whose property and 

interests in property are blocked 

pursuant to § 544.201(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. 

Note to § 544.301: See § 544.411 

concerning the blocked status of property 

and interests in property of an entity that is 

50 percent or more owned by a person whose 

property and interests in property are 

blocked pursuant to § 544.201(a). 

§ 544.302 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 § 544.201(a)(1), 

12:01 a.m. eastern daylight time, June 

29, 2005; and 

(b) With respect to a person whose 

property and interests in property are 

blocked pursuant to § 544.201(a)(2), 

(a)(3), or (a)(4), the earlier of the date of 

actual or constructive notice of such 

person’s designation. 

§ 544.303 Entity. 

The term entity means a partnership, 

association, trust, joint venture, 

corporation, group, subgroup, or other 

organization. 

§ 544.304 Information or informational 

materials. 

(a) For purposes of this part, the term 

information or informational materials 

includes, but is not limited to, 

publications, films, posters, phonograph 

records, photographs, microfilms, 

microfiche, tapes, compact disks, CD– 

ROMs, artworks, and news wire feeds. 

Note to paragraph (a) of § 544.304: To be 

considered information or informational 

materials, artworks must be classified under 

chapter heading 9701, 9702, or 9703 of the 

Harmonized Tariff Schedule of the United 

States. 

(b) The term information or 

informational materials, with respect to 

United States exports, does 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 (1979) (the 

‘‘EAA’’), or section 6 of the EAA to the 

extent that such controls promote the 

nonproliferation or antiterrorism 

policies of the United States; or 

(2) With respect to which acts are 

prohibited by 18 U.S.C. chapter 37. 

§ 544.305 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. 

§ 544.306 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. 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 16777 

Note to § 544.306: See § 501.801 of this 

chapter on licensing procedures. 

§ 544.307 Person. 

The term person means an individual 

or entity. 

§ 544.308 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 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. 

§ 544.309 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. 

§ 544.310 United States. 

The term United States means the 

United States, its territories and 

possessions, and all areas under the 

jurisdiction or authority thereof. 

§ 544.311 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. 

§ 544.312 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 

§ 544.401 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, directive, or license issued 

pursuant to this part refers to the same 

as currently amended. 

§ 544.402 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. 

§ 544.403 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 person, such property shall no 

longer be deemed to be property 

blocked pursuant to § 544.201(a), unless 

there exists in the property another 

interest that is blocked pursuant to 

§ 544.201(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 § 544.201(a), such property 

shall be deemed to be property in which 

that person has an interest and therefore 

blocked. 

§ 544.404 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 

§ 544.201(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. 

(c) Example. A license authorizing 

Company A, whose property and 

interests in property are blocked 

pursuant to § 544.201(a), to complete a 

securities sale also authorizes all 

16778 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 

activities by other parties required to 

complete the sale, including 

transactions by the buyer, broker, 

transfer agents, banks, etc., provided 

that such other parties are not 

themselves persons whose property and 

interests in property are blocked 

pursuant to § 544.201(a). 

§ 544.405 Provision of services. 

(a) Except as provided in § 544.206, 

the prohibitions on transactions 

involving blocked property contained in 

§ 544.201 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 

§ 544.201(a); or 

(2) With respect to property interests 

subject to § 544.201. 

(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 § 544.201(a). 

Note to § 544.405: See §§ 544.507 and 

544.508 on licensing policy with regard to 

the provision of certain legal and medical 

services. 

§ 544.406 Offshore transactions. 

The prohibitions in § 544.201 on 

transactions or dealings 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 

§ 544.201(a), or property in which a 

person whose property and interests in 

property are blocked pursuant to 

§ 544.201(a) has or has had an interest 

since the effective date. 

§ 544.407 Payments from blocked 

accounts to satisfy obligations prohibited. 

Pursuant to § 544.201, 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. 

§ 544.408 Charitable contributions. 

Unless specifically authorized by the 

Office of Foreign Assets Control 

pursuant to this part, no charitable 

contribution of funds, goods, services, 

or technology, including contributions 

to relieve human suffering, such as food, 

clothing, or medicine, may be made by, 

to, or for the benefit of a person whose 

property and interests in property are 

blocked pursuant to § 544.201(a). For 

the purposes of this part, a contribution 

is made by, to, or for the benefit of a 

person whose property and interests in 

property are blocked pursuant to 

§ 544.201(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 by, to, or for the benefit of 

such a person. 

§ 544.409 Credit extended and cards 

issued by U.S. financial institutions. 

The prohibition in § 544.201 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 

§ 544.201(a). 

§ 544.410 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 § 544.201 if 

effected after the effective date. 

§ 544.411 Entities owned by a person 

whose property and interests in property 

are blocked. 

A person whose property and 

interests in property are blocked 

pursuant to § 544.201(a) has an interest 

in all property and interests in property 

of an entity in which it owns, directly 

or indirectly, a 50 percent or greater 

interest. The property and interests in 

property of such an entity, therefore, are 

blocked, and such an entity is a person 

whose property and interests in 

property are blocked pursuant to 

§ 544.201(a), regardless of whether the 

entity itself is listed in the Annex to 

Executive Order 13382 or designated 

pursuant to § 544.201(a). 

Subpart E—Licenses, Authorizations 

and Statements of Licensing Policy 

§ 544.501 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. 

§ 544.502 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 other 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 that would 

not otherwise exist under ordinary 

principles of law. 

§ 544.503 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 actual or constructive notice of the 

exclusions or restrictions. 

§ 544.504 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 § 544.201(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 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 16779 

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 § 544.504: See § 501.603 of this 

chapter for mandatory reporting 

requirements regarding financial transfers. 

See also § 544.203 concerning the obligation 

to hold blocked funds in interest-bearing 

accounts. 

§ 544.505 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. 

§ 544.506 Investment and reinvestment of 

certain funds. 

Subject to the requirements of 

§ 544.203, U.S. financial institutions are 

authorized to invest and reinvest assets 

blocked pursuant to § 544.201, subject 

to the following conditions: 

(a) The assets representing such 

investments and reinvestments are 

credited to a blocked account or 

subaccount that 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 persons whose 

property and interests in property are 

blocked pursuant to § 544.201(a). 

§ 544.507 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 

§ 544.201(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 the United 

States or 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 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 § 544.201(a), not otherwise 

authorized in this part, requires the 

issuance of a specific license. 

(c) Entry into a settlement agreement 

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 or interests in 

property blocked pursuant to 

§ 544.201(a) is prohibited unless 

specifically licensed in accordance with 

§ 544.202(e). 

§ 544.508 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 § 544.201(a) is authorized, 

provided that all receipt of payment for 

such services must be specifically 

licensed. 

Subpart F—Reports 

§ 544.601 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 

§ 544.701 Penalties. 

(a) Attention is directed to section 206 

of the International Emergency 

Economic Powers Act (50 U.S.C. 1705) 

(‘‘IEEPA’’), which is applicable to 

violations of the provisions of any 

license, ruling, regulation, order, 

directive, 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 

may be imposed on any person who 

violates, attempts to violate, conspires 

to violate, or causes a violation of any 

license, order, regulation, or prohibition 

issued under IEEPA. 

Note to paragraph (a)(1) of § 544.701: As 

of the date of publication in the Federal 

Register of the final rule adding this part to 

31 CFR chapter V (April 13, 2009), IEEPA 

provides for a maximum civil penalty not to 

exceed the greater of $250,000 or an amount 

that is twice the amount of the transaction 

that is the basis of the violation with respect 

to which the penalty is imposed. 

(2) A person who willfully commits, 

willfully attempts to commit, or 

willfully conspires to commit, or aids or 

abets in the commission of a violation 

of any license, order, regulation, or 

prohibition may, upon conviction, be 

fined not more than $1,000,000, or if a 

natural person, be imprisoned for not 

more than 20 years, or both. 

(b) Adjustments to penalty amounts. 

(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 are subject to adjustment 

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 the executive, legislative, 

or judicial branch of the Government of 

the United States, knowingly and 

willfully falsifies, conceals, or covers up 

by any trick, scheme, or device a 

material fact; 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, 

16780 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 

United States Code, imprisoned not 

more than five years, or both. 

(d) Violations of this part may also be 

subject to relevant provisions of other 

applicable laws. 

§ 544.702 Pre-Penalty Notice; settlement. 

(a) When required. If 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 

authorization of the Secretary of the 

Treasury pursuant to this part or 

otherwise under IEEPA and determines 

that a civil monetary penalty is 

warranted, the Office of Foreign Assets 

Control will issue a Pre-Penalty Notice 

informing the alleged violator of the 

agency’s intent to impose a monetary 

penalty. A Pre-Penalty Notice shall be in 

writing. The Pre-Penalty Notice may be 

issued whether or not another agency 

has taken any action with respect to the 

matter. For a description of the contents 

of a Pre-Penalty Notice, see Appendix A 

to part 501 of this chapter. 

(b)(1) Right to respond. An alleged 

violator has the right to respond to a 

Pre-Penalty Notice by making a written 

presentation to the Office of Foreign 

Assets Control. For a description of the 

information that should be included in 

such a response, see Appendix A to part 

501 of this chapter. 

(2) Deadline for response. A response 

to a Pre-Penalty Notice must be made 

within the applicable 30-day period set 

forth in this paragraph. 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. 

(i) Computation of time for response. 

A response to a Pre-Penalty 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 Pre-Penalty Notice was 

mailed. If the Pre-Penalty Notice was 

personally delivered by a non-U.S. 

Postal Service agent authorized by the 

Office of Foreign Assets Control, a 

response must be postmarked or datestamped on or before the 30th day after 

the date of delivery. 

(ii) 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 discretion of the Office of Foreign 

Assets Control, only upon specific 

request to the Office of Foreign Assets 

Control. 

(3) Form and method of response. A 

response to a Pre-Penalty Notice need 

not be in any particular form, but it 

must be typewritten and signed by the 

alleged violator or a representative 

thereof, must contain information 

sufficient to indicate that it is in 

response to the Pre-Penalty Notice, and 

must include the Office of Foreign 

Assets Control identification number 

listed on the Pre-Penalty Notice. 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 (b)(2) of this section. 

(c) Settlement. Settlement discussion 

may be initiated by the Office of Foreign 

Assets Control, the alleged violator, or 

the alleged violator’s authorized 

representative. For a description of 

practices with respect to settlement, see 

Appendix A to part 501 of this chapter. 

(d) Guidelines. Guidelines for the 

imposition or settlement of civil 

penalties by the Office of Foreign Assets 

Control are contained in Appendix A to 

part 501 of this chapter. 

(e) Representation. A representative of 

the alleged violator may act on behalf of 

the alleged violator, but any oral 

communication with the Office of 

Foreign Assets Control prior to a written 

submission regarding the specific 

allegations contained in the Pre-Penalty 

Notice must be preceded by a written 

letter of representation, unless the PrePenalty Notice was served upon the 

alleged violator in care of the 

representative. 

§ 544.703 Penalty imposition. 

If, after considering any written 

response to the Pre-Penalty Notice and 

any relevant facts, the Office of Foreign 

Assets Control determines that there 

was a violation by the alleged violator 

named in the Pre-Penalty Notice and 

that a civil monetary penalty is 

appropriate, the Office of Foreign Assets 

Control may issue a Penalty Notice to 

the violator containing a determination 

of the violation and the imposition of 

the monetary penalty. For additional 

details concerning issuance of a Penalty 

Notice, see Appendix A to part 501 of 

this chapter. The issuance of the Penalty 

Notice shall constitute final agency 

action. The violator has the right to seek 

judicial review of that final agency 

action in federal district court. 

§ 544.704 Administrative collection; 

referral to United States Department of 

Justice. 

In the event that the violator 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, 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 

§ 544.801 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. 

§ 544.802 Delegation by the Secretary of 

the Treasury. 

Any action that the Secretary of the 

Treasury is authorized to take pursuant 

to Executive Order 13382 of June 28, 

2005 (70 FR 38567, July 1, 2005), and 

any further Executive Orders relating to 

the national emergency declared in 

Executive Order 12938 of November 14, 

1994, as expanded by Executive Order 

13094 of July 28, 1998, and with respect 

to which additional steps were taken in 

Executive Order 13382 of June 28, 2005, 

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 

§ 544.901 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 recordkeeping 

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. 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Rules and Regulations 16781 

Dated: March 31, 2009. 

Adam J. Szubin, 

Director, Office of Foreign Assets Control. 

Approved: April 3, 2009. 

Stuart A. Levey, 

Under Secretary, Office of Terrorism and 

Financial Intelligence, Department of the 

Treasury. 

[FR Doc. E9–8336 Filed 4–10–09; 8:45 am] 

BILLING CODE 4811–45–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[USCG–2009–0228] 

Drawbridge Operating Regulations; 

Back Bay of Biloxi, Biloxi, MS 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of temporary deviation 

from regulations. 

SUMMARY: The Commander, Eighth 

Coast Guard District, has issued a 

temporary deviation from the regulation 

governing the operation of the I–110 

bascule span bridge across the Back Bay 

of Biloxi, mile 3.0, in Biloxi, Harrison 

County, Mississippi. This deviation 

provides for the bridge to remain closed 

to navigation for two (2) two-hour 

periods daily to facilitate the movement 

of vehicular traffic. 

DATES: This deviation is effective from 

6:30 a.m. on Friday, March 27, 2009 

until 6 p.m. on Monday, September 21, 

2009. 

ADDRESSES: Documents indicated in this 

preamble as being available in the 

docket are part of docket USCG–2009– 

0228 and are available online at http: 

//www.regulations.gov. They are also 

available for inspection or copying at 

two locations: The Docket Management 

Facility (M–30), U.S. Department of 

Transportation, West Building Ground 

Floor, Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590, 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays, 

and the office of the Eighth Coast Guard 

District, Bridge Administration Branch, 

Hale Boggs Federal Building, Room 

1313, 500 Poydras Street, New Orleans, 

Louisiana 70130–3310 between 7 a.m. 

and 3 p.m., Monday through Friday, 

except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

David Frank, Bridge Administration 

Branch, telephone (504) 671–2128. 

SUPPLEMENTARY INFORMATION: The 

Mississippi Department of 

Transportation (MDOT) has requested a 

temporary deviation in order to improve 

the traffic flow of vehicles over the I– 

110 bascule bridge across the Back Bay 

of Biloxi, mile 3.0, in Biloxi, Harrison 

County, Mississippi. On Friday, March 

20, 2009, the Popps Ferry Bridge across 

the Back Bay of Biloxi, mile 8.0 was 

damaged by a vessel allision, rendering 

the drawbridge inoperable for an 

estimated period of six months. 

Vehicular traffic that would normally 

transit across the Popps Ferry Bridge 

was required to find alternate routes to 

cross the Back Bay of Biloxi. A 

significant amount of these vehicles are 

now required to use the I–110 Bridge 

until the Popps Ferry Bridge is returned 

to service. MDOT, at the request of the 

local government, has requested that the 

draw of the I–110 bridge remain closed 

to navigation from 6:30 a.m. until 8:30 

a.m. and from 4 p.m. until 6 p.m. daily 

for a period of 180 days or until the 

Popps Ferry Bridge is returned to 

service, whichever occurs first. 

Presently, as per 33 CFR 117.675(a), 

the draw of the I–110 bridge, mile 3.0 

at Biloxi shall open on signal if at least 

six hours notice is given. The vertical 

clearance of the drawbridge in the 

closed-to-navigation position is 60 feet 

above mean high water. 

Navigation on the waterway consists 

of tugs with tows, commercial fishing 

vessels and recreational powerboats and 

sailboats. Due to the amount of vertical 

clearance of the drawbridge in the 

closed-to-navigation position, this 

deviation should have a minimal effect 

on vessels transiting the waterway. No 

alternate route is available. 

In accordance with 33 CFR 117.35(e), 

the drawbridge must return to its regular 

operating schedule immediately at the 

end of the designated time period. This 

deviation from the operating regulations 

is authorized under 33 CFR 117.35. 

Dated: March 27, 2009. 

David M. Frank, 

Bridge Administrator. 

[FR Doc. E9–8267 Filed 4–10–09; 8:45 am] 

BILLING CODE 4910–15–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[USCG–2009–0231] 

Drawbridge Operating Regulations; 

Black Warrior River, Eutaw, AL 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of temporary deviation 

from regulations. 

SUMMARY: The Commander, Eighth 

Coast Guard District, has issued a 

temporary deviation from the regulation 

governing the operation of the Norfolk 

Southern Railroad vertical lift span 

bridge across the Black Warrior River, 

mile 267.8, at Eutaw, Greene County, 

Alabama. This deviation provides for 

the bridge to remain closed to 

navigation for twelve hours in order to 

perform scheduled maintenance. 

DATES: This deviation is effective from 

8 a.m. until 8 p.m. on Friday, May 1, 

2009. 

ADDRESSES: Documents indicated in this 

preamble as being available in the 

docket are part of docket USCG–2009– 

0231 and are available online at 

www.regulations.gov. They are also 

available for inspection or copying at 

two locations: The Docket Management 

Facility (M–30), U.S. Department of 

Transportation, West Building Ground 

Floor, Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590, 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays; 

and the office of the Eighth Coast Guard 

District, Bridge Administration Branch, 

Hale Boggs Federal Building, Room 

1313, 500 Poydras Street, New Orleans, 

Louisiana 70130–3310 between 7 a.m. 

and 3 p.m., Monday through Friday, 

except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

David Frank, Bridge Administration 

Branch, telephone (504) 671–2128. 

SUPPLEMENTARY INFORMATION: The 

Norfolk Southern Corporation has 

requested a temporary deviation in 

order to perform maintenance on the 

Norfolk Southern Railroad vertical lift 

span bridge across the Black Warrior 

River, mile 267.8, at Eutaw, Greene 

County, Alabama. This maintenance is 

necessary to make mechanical repairs to 

the lift towers of the bridge. This 

temporary deviation will allow the 

bridge to remain closed to navigation 

from 8 a.m. until 8 p.m. on Friday, May 

1, 2009. During the closure the draw 

will not be able to open for emergencies. 

Currently, the draw opens on signal for 

the passage of vessels. 

The Norfolk Southern Railroad 

vertical lift span drawbridge has a 

vertical clearance of 18.3 feet above 

BRENC, elevation 99.2 feet, in the 

closed-to-navigation position and 72 

feet above BRENC in the open-tonavigation position. Navigation on the 

waterway consists primarily of tugs 

with tows and occasional recreational 

craft. The Coast Guard has coordinated 

this closure with the Warrior-Tombigbee 

Waterway Association (WTWA). The 

WTWA representative indicated that the 

vessel operators will be able to schedule