Source: https://www.federalregister.gov/documents/2010/11/04/2010-27829/north-korea-sanctions-regulations
Timestamp: 2018-04-21 04:37:05
Document Index: 89851666

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67912-67918 (7 pages)
https://www.federalregister.gov/d/2010-27829 https://www.federalregister.gov/d/2010-27829
The Department of the Treasury's Office of Foreign Assets Control (“OFAC”) is issuing regulations with respect to North Korea to implement Executive Order 13466 of June 26, 2008, and Executive Order 13551 of August 30, 2010. OFAC intends to supplement this part 510 with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance and additional general licenses and statements of licensing policy.
On June 26, 2008, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (“IEEPA”) and the National Emergencies Act (50 U.S.C. 1601 et seq.) (“NEA”), issued Executive Order 13466 (73 FR 36787, June 27, 2008) (“E.O. 13466”). On August 30, 2010, the President, invoking the authority of, inter alia, IEEPA, the NEA, and section 5 of the United Nations Participation Act (22 U.S.C. 287c), issued Executive Order 13551 (75 FR 53837, September 1, 2010) (“E.O. 13551”), effective at 12:01 p.m. eastern daylight time on August 30, 2010.
The Department of the Treasury's Office of Foreign Assets Control is issuing the North Korea Sanctions Regulations, 31 CFR part 510 (the “Regulations”), to implement E.O. 13466 and E.O. 13551, pursuant to authorities delegated to the Secretary of the Treasury in those orders. A copy of E.O. 13466 appears in appendix A to this part. A copy of E.O. 13551 appears in appendix B to this part.
The Regulations are being published in abbreviated form at this time for the purpose of providing immediate guidance to the public. OFAC intends to supplement this part 510 with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance and additional general licenses and statements of licensing policy. (The appendices to the Regulations will be removed when OFAC supplements this part with a more comprehensive set of regulations.)
End List of Subjects Start Printed Page 67913 Start Amendment Part
For the reasons set forth in the preamble, the Department of the Treasury's Office of Foreign Assets Control adds part 510 to 31 CFR Chapter V to read as follows:
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; 22 U.S.C. 287c; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); E.O. 13466, 73 FR 36787, June 27, 2008, 3 CFR, 2008 Comp., p. 195; E.O. 13551, 75 FR 53837, September 1, 2010.
Note to § 510.101:
(a) All transactions prohibited pursuant to Executive Order 13466 are also prohibited pursuant to this part.
Note 1 to § 510.201(a):
The property and interests in property of North Korea or a North Korean national blocked pursuant to this paragraph are referred to throughout this part as “property and interests in property blocked pursuant to § 510.201(a).”
(b) All transactions prohibited pursuant to Executive Order 13551 are also prohibited pursuant to this part.
Note 1 to § 510.201:
The names of persons listed in or designated pursuant to Executive Order 13551, whose property and interests in property are blocked pursuant to 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 “[DPRK].” See § 510.406 concerning entities that may not be listed on the SDN list but whose property and interests in property are nevertheless blocked pursuant to this section.
Note 2 to § 510.201:
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-DPRK].”
Note 3 to § 510.201:
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 the status of their property and interests in property as blocked pursuant to § 501.201(a) or of their status as persons whose property and interests in property are blocked pursuant to § 510.201(b).
(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 § 510.201 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 interest.
(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 § 510.201, 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 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 13466, Start Printed Page 67914Executive Order 13551, this part, and any regulation, order, directive, ruling, instruction, or license issued pursuant to this part.
Note to paragraph (d) of § 510.202:
(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 or interest in property blocked pursuant to § 510.201.
(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 § 510.201 shall hold or place such funds in a blocked interest-bearing account located in the United States.
(c) Blocked funds held in instruments the maturity of which exceeds 180 days at the time the funds become subject to § 510.201 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 § 510.201 may continue to be held in the same type of accounts or instruments, provided the funds earn interest at rates that are commercially reasonable.
(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 North Korea or any North Korean national who has property or interests in property blocked pursuant to § 510.201(a) or any person whose property and interests in property are blocked pursuant to § 510.201(b), nor may their holder cooperate in or facilitate the pledging or other attempted use as collateral of blocked funds or other assets.
The terms blocked account and blocked property shall mean any account or property subject to the prohibitions in § 510.201, and either blocked pursuant to § 510.201(a) or held in the name of a person whose property and interests in property are blocked pursuant to § 510.201(b), 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 § 510.301:
See § 510.406 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 § 510.201.
(b) With respect to a person listed in the Annex to E.O. 13551, 12:01 p.m. eastern daylight time, August 30, 2010; or
(c) With respect to a person whose property and interests in property are otherwise blocked pursuant to E.O. 13551, the earlier of the date of actual or constructive notice that such person's property and interests in property are blocked.
Note to § 510.305:
(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 § 510.201, unless there exists in the property another interest that is blocked pursuant to § 510.201 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 § 510.201(b), such property shall be deemed to be property in which that person has an interest and therefore blocked.
(a) An ordinarily incident transaction, not explicitly authorized within the terms of the license, by or with a person Start Printed Page 67916whose property and interests in property are blocked pursuant to § 510.201(b); or
A person whose property and interests in property are blocked pursuant to § 510.201(b) 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 § 510.201(b), regardless of whether the entity itself is listed in the Annex or designated pursuant to Executive Order 13551.
Any payment of funds or transfer of credit in which a person whose property and interests in property are blocked pursuant to § 510.201(b) has any interest that comes within the possession or control of a U.S. financial institution must be blocked in an account on the books of that financial institution. A transfer of funds or credit by a U.S. financial institution between blocked accounts in its branches or offices is authorized, provided that no transfer is made from an account within the United States to an account held outside the United States, and further provided that a transfer from a blocked account may be made only to another blocked account held in the same name.
Note to § 510.504:
(a) The provision of the following legal services to or on behalf of persons whose property and interests in property are blocked pursuant to § 510.201(b) is authorized, provided that all receipts of payment of professional fees and reimbursement of incurred expenses must be specifically licensed:
(b) The provision of any other legal services to persons whose property and interests in property are blocked pursuant to § 510.201(b), 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 § 510.201 is prohibited unless licensed pursuant to this part.
The provision of nonscheduled emergency medical services in the United States to persons whose property and interests in property are blocked pursuant to § 510.201(b) is authorized, provided that all receipt of payment for such services must be specifically licensed.
Any action that the Secretary of the Treasury is authorized to take pursuant to Executive Order 13466 of June 26, 2008 (73 FR 36787, June 27, 2008), or Executive Order 13551 of August 30, 2010 (75 FR 53837, September 1, 2010), and any further Executive orders relating to the national emergency declared in Executive Order 13466, 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.
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 Start Printed Page 67917sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), and section 301 of title 3, United States Code, I, GEORGE W. BUSH, President of the United States of America, find that the current existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula constitute an unusual and extraordinary threat to the national security and foreign policy of the United States, and I hereby declare a national emergency to deal with that threat. I further find that, as we deal with that threat through multilateral diplomacy, it is necessary to continue certain restrictions with respect to North Korea that would otherwise be lifted pursuant to a forthcoming proclamation that will terminate the exercise of authorities under the Trading With the Enemy Act (50 U.S.C. App. 1 et seq.) (TWEA) with respect to North Korea.
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), section 5 of the United Nations Participation Act of 1945 (22 U.S.C. 287c) (UNPA), and section 301 of title 3, United States Code; in view of United Nations Security Council Resolution (UNSCR) 1718 of October 14, 2006, and UNSCR 1874 of June 12, 2009; and to take additional steps with respect to the situation in North Korea.
(b) I hereby determine that, to the extent section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) may apply, the making of donations of the types of articles specified in such section by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order would seriously impair my ability to deal with the national emergency declared in Start Printed Page 67918Executive Order 13466 and expanded in scope in this order, and I hereby prohibit such donations as provided by subsection (a) of this section.
[FR Doc. 2010-27829 Filed 11-3-10; 8:45 am]