Source: https://www.federalregister.gov/documents/2019/04/29/2019-08587/foreign-interference-in-us-elections-sanctions-regulations
Timestamp: 2020-08-15 14:44:13
Document Index: 170557093

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Federal Register :: Foreign Interference in U.S. Elections Sanctions Regulations
A Rule by the Foreign Assets Control Office on 04/29/2019
Effective Date: April 29, 2019.
84 FR 17950
17950-17958 (9 pages)
31 CFR 579
List of Subjects in 31 CFR Part 579
https://www.federalregister.gov/d/2019-08587
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is adding regulations to implement Executive Order of September 12, 2018 (“Imposing Certain Sanctions in the Event of Foreign Interference in a United States Election”). OFAC intends to supplement these regulations with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance, general licenses, and statements of licensing policy.
On September 12, 2018, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (IEEPA), issued Executive Order 13848 (83 FR 46843, September 14, 2018) (E.O. 13848).
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 579 with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance, general licenses, and statements of licensing policy. The appendix to the Regulations will be removed when OFAC supplements this part with a more comprehensive set of regulations.
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 Start Printed Page 17951rulemaking, opportunity for public participation, and delay in effective date, as well as the provisions of Executive Order 13771, 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.
For the reasons set forth in the preamble, the Department of the Treasury's Office of Foreign Assets Control adds part 579 to 31 CFR chapter V to read as follows:
579.101B
579.309
579.313
579.508
Penalties and Findings of Violation. Subpart H—Procedures
§ 579.101
Note 1 to § 579.101: This part has been published in abbreviated form for the purpose of providing immediate guidance to the public. OFAC intends to supplement this part with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance, general licenses, and statements of licensing policy.
§ 579.201
Note 1 to § 579.201: The names of persons designated pursuant to Executive Order 13848, whose property and interests in property therefore are blocked pursuant to this section, are published in the Federal Register and incorporated into OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) with the identifier [“ELECTION-EO13848”]. The SDN List is accessible through the following page on OFAC's website: www.treasury.gov/​sdn. Additional information pertaining to the SDN List can be found in appendix A to this chapter. See § 579.406 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 § 579.201: The International Emergency Economic Powers Act (50 U.S.C. 1701-1706), in Section 203 (50 U.S.C. 1702), 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 section also are published in the Federal Register and incorporated into the SDN List with the identifier “[BPI-ELECTION-EO13848]”.
Note 3 to § 579.201: Sections 501.806 and 501.807 of this chapter describe the procedures to be followed by persons Start Printed Page 17952seeking, respectively, the unblocking of funds that they believe were blocked due to mistaken identity, and administrative reconsideration of their status as persons whose property and interests in property are blocked pursuant to this section.
§ 579.202
(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 § 579.201, 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 interest in property.
(b) No transfer before the effective date shall be the basis for the assertion or recognition of any right, remedy, power, or privilege with respect to, or any interest in, any property or interest in property blocked pursuant to § 579.201, 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.
(f) 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 § 579.201.
§ 579.203
(a) Except as provided in paragraph (e) or (f) of this section, or as otherwise directed or authorized by OFAC, any U.S. person holding funds, such as currency, bank deposits, or liquidated financial obligations, subject to § 579.201 shall hold or place such funds in a blocked interest-bearing account located in the United States.
(e) Blocked funds held in instruments the maturity of which exceeds 180 days at the time the funds become subject to § 579.201 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 paragraph (a) or (f) of this section.
(f) Blocked funds held in accounts or instruments outside the United States at the time the funds become subject to § 579.201 may continue to be held in the same type of accounts or instruments, provided the funds earn interest at rates that are commercially reasonable.
(h) Funds subject to this section may not be held, invested, or reinvested in a manner that provides financial or economic benefit or access to any person whose property and interests in property are blocked pursuant to § 579.201, nor may their holder cooperate in or facilitate the pledging or other attempted use as collateral of blocked funds or other assets.
§ 579.204
(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 tangible property blocked pursuant to § 579.201 shall be the responsibility of the owners or operators of such property, which expenses shall not be met from blocked funds.
(b) Property blocked pursuant to § 579.201 may, in the discretion of OFAC, be sold or liquidated and the net proceeds placed in a blocked interest-bearing account in the name of the owner of the property.
§ 579.205
(b) Information or informational materials. (1) The prohibitions contained in this part do not apply to the importation from any country and the exportation to any country of any information or informational materials, as defined in § 579.305, whether commercial or otherwise, regardless of format or medium of transmission.
(3) This section does not exempt transactions incident to the exportation of software subject to the Export Administration Regulations, 15 CFR parts 730 through 774, or to the exportation of goods (including software) or technology 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 § 579.201 are prohibited.
§ 579.300
§ 579.301
The terms blocked account and blocked property shall mean any account or property subject to the prohibitions in § 579.201 held in the name of a person whose property and interests in property are blocked pursuant to § 579.201, 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 a license or other authorization from OFAC expressly authorizing such action.
Note 1 to § 579.301: See § 579.406 concerning the blocked status of property and interests in property of an entity that is directly or indirectly owned, whether individually or in the aggregate, 50 percent or more by one or more persons whose property and interests in property are blocked pursuant to § 579.201.
§ 579.302
(a) The term effective date refers to the effective date of the applicable prohibitions and directives contained in this part, and, with respect to a person whose property and interests in property are otherwise blocked pursuant to § 579.201, the earlier of the date of actual or constructive notice that such person's property and interests in property are blocked.
§ 579.303
§ 579.304
§ 579.305
§ 579.306
§ 579.307
(c) The term specific license means any license or authorization issued Start Printed Page 17954pursuant to this part but not set forth in subpart E of this part or made available on OFAC's website: www.treasury.gov/​ofac.
Note 1 to § 579.307: See § 501.801 of this chapter on licensing procedures.
§ 579.308
§ 579.309
§ 579.310
§ 579.311
§ 579.312
§ 579.313
§ 579.314
§ 579.401
§ 579.402
§ 579.403
(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 whose property and interests in property are blocked pursuant to § 579.201, such property shall no longer be deemed to be property blocked pursuant to § 579.201, unless there exists in the property another interest that is blocked pursuant to § 579.201, 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 § 579.201, such property shall be deemed to be property in which such person has an interest and therefore blocked.
§ 579.404
(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 § 579.201; or
§ 579.405
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 § 579.201 if effected after the effective date.
§ 579.406
Persons whose property and interests in property are blocked pursuant to § 579.201 have an interest in all property and interests in property of an entity in which such persons directly or indirectly own, whether individually or in the aggregate, 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 § 579.201, regardless of whether the name of the entity is incorporated into OFAC's Specially Designated Nationals and Blocked Persons List (SDN List).
§ 579.501
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. General licenses and statements of licensing policy relating to this part also may be available through the Foreign Interference in a United States Election Sanctions page on OFAC's website: www.treasury.gov/​ofac.
§ 579.502
§ 579.503
§ 579.504
Any payment of funds or transfer of credit in which a person whose property and interests in property are blocked pursuant to § 579.201 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 1 to § 579.504: See § 501.603 of this chapter for mandatory reporting requirements regarding financial transfers. See also § 579.203 concerning the obligation to hold blocked funds in interest-bearing accounts.
§ 579.505
§ 579.506
(a) The provision of the following legal services to or on behalf of persons whose property and interests in property are blocked pursuant to § 579.201 or any further Executive orders relating to the national emergency declared in Executive Order 13848 of September 12, 2018 is authorized, provided that any receipt of payment of professional fees and reimbursement of incurred expenses is authorized pursuant to § 579.507, which authorizes certain payments for legal services from funds originating outside the United States; via specific license; or otherwise pursuant to this part:
(b) The provision of any other legal services to or on behalf of persons whose property and interests in property are blocked pursuant to § 579.201 or any further Executive orders relating to the national emergency declared in Executive Order 13848 of September 12, 2018, not otherwise authorized in this part, requires the issuance of a specific license.
(c) U.S. persons do not need to obtain specific authorization to provide related services, such as making filings and providing other administrative services, that are ordinarily incident to the provision of services authorized by this section. Additionally, U.S. persons who provide services authorized by this section do not need to obtain specific authorization to contract for related services that are ordinarily incident to the provision of those legal services, such as those provided by private investigators or expert witnesses, or to pay for such services. See § 579.404.
(d) 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 § 579.201 or any further Executive orders relating to the national emergency declared in Executive Order 13848 of September 12, 2018, is prohibited unless licensed pursuant to this part.
Note 1 to § 579.506: Pursuant to part 501, subpart E, of this chapter, U.S. persons seeking administrative reconsideration or judicial review of their designation or the blocking of their property and interests in property may apply for a specific license from OFAC to authorize the release of certain blocked funds for the payment of professional fees and reimbursement of incurred expenses for the provision of Start Printed Page 17956such legal services where alternative funding sources are not available. For more information, see OFAC's Guidance on the Release of Limited Amounts of Blocked Funds for Payment of Legal Fees and Costs Incurred in Challenging the Blocking of U.S. Persons in Administrative or Civil Proceedings, which is available on OFAC's website at: www.treasury.gov/​ofac.
§ 579.507
(a) Professional fees and incurred expenses. (1) Receipt of payment of professional fees and reimbursement of incurred expenses for the provision of legal services authorized pursuant to § 579.506(a) to or on behalf of any person whose property and interests in property are blocked pursuant to § 579.201 or any further Executive orders relating to the national emergency declared in Executive Order 13848 of September 12, 2018, is authorized from funds originating outside the United States, provided that the funds do not originate from:
(iii) Any individual or entity, other than the person on whose behalf the legal services authorized pursuant to § 579.506(a) are to be provided, whose property and interests in property are blocked pursuant to any part of this chapter or any Executive order or statute.
(2) Nothing in this paragraph (a) authorizes payments for legal services using funds in which any other person whose property and interests in property are blocked pursuant to § 579.201, any other part of this chapter, or any Executive order has an interest.
§ 579.508
§ 579.601
§ 579.701
§ 579.801
§ 579.802
§ 579.901
I, DONALD J. TRUMP, President of the United States of America, find that the ability of persons located, in whole or in substantial Start Printed Page 17957part, outside the United States to interfere in or undermine public confidence in United States elections, including through the unauthorized accessing of election and campaign infrastructure or the covert distribution of propaganda and disinformation, constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States. Although there has been no evidence of a foreign power altering the outcome or vote tabulation in any United States election, foreign powers have historically sought to exploit America's free and open political system. In recent years, the proliferation of digital devices and internet-based communications has created significant vulnerabilities and magnified the scope and intensity of the threat of foreign interference, as illustrated in the 2017 Intelligence Community Assessment. I hereby declare a national emergency to deal with this threat. Accordingly, I hereby order:
(b) the Secretary of State and the Secretary of the Treasury, in consultation with the heads of other appropriate agencies, shall jointly prepare a recommendation for the President as to whether additional sanctions against foreign persons may be appropriate in response to the identified foreign interference and in light of the evaluation in the report mandated by section 1(b) of this order, including, as appropriate and consistent with applicable law, proposed sanctions with respect to the largest business entities licensed or domiciled in a country whose government authorized, directed, sponsored, or supported election interference, including at least one entity from each of the following sectors: financial services, defense, energy, technology, and transportation (or, if inapplicable to that country's largest business entities, sectors of comparable strategic significance to that foreign government). The recommendation shall include an assessment of the effect of the recommended sanctions on the economic and national security interests of the United States and its allies. Any recommended sanctions shall be appropriately calibrated to the scope of the Start Printed Page 17958foreign interference identified, and may include one or more of the following with respect to each targeted foreign person:
[FR Doc. 2019-08587 Filed 4-26-19; 8:45 am]