Source: https://www.federalregister.gov/documents/2012/01/12/2012-156/reporting-procedures-and-penalties-regulations-transnational-criminal-organizations-sanctions
Timestamp: 2017-10-17 06:05:44
Document Index: 297501648

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Federal Register :: Reporting, Procedures and Penalties Regulations; Transnational Criminal Organizations Sanctions Regulations
A Rule by the Foreign Assets Control Office on 01/12/2012
77 FR 1864
1864-1869 (6 pages)
31 CFR 590
31 CFR Part 501
31 CFR Part 590
Subpart E—Procedures
PART 590—TRANSNATIONAL CRIMINAL ORGANIZATIONS SANCTIONS REGULATIONS
https://www.federalregister.gov/d/2012-156 https://www.federalregister.gov/d/2012-156
The Department of the Treasury's Office of Foreign Assets Control (“OFAC”) is issuing regulations to implement Executive Order 13581 of July 24, 2011 (“Blocking Property of Transnational Criminal Organizations”). OFAC intends to supplement this part 590 with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance and additional general licenses and statements of licensing policy. OFAC also is amending other regulations to clarify the availability of general licenses on OFAC's Web site.
Assistant Director for Sanctions, Compliance & Evaluations, 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).
This document and additional information concerning OFAC are available from OFAC's Web site (www.treasury.gov/ofac). Certain general information pertaining to OFAC's sanctions programs also is available via facsimile through a 24-hour fax-on-demand service, tel.: (202) 622-0077.
On July 24, 2011, the President issued Executive Order 13581 (76 FR 44757, July 27, 2011) (“E.O. 13581”), invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) and the National Emergencies Act (50 U.S.C. 1601 et seq.).
The Department of the Treasury's Office of Foreign Assets Control (“OFAC”) is issuing the Transnational Criminal Organizations Sanctions Regulations, 31 CFR part 590 (the “Regulations”), to implement E.O. 13581, pursuant to authorities delegated to the Secretary of the Treasury in E.O. 13581. A copy of E.O. 13581 appears in appendix A 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 590 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 appendix to the Regulations will be removed when OFAC supplements this part with a more comprehensive set of regulations.
The Reporting, Procedures and Penalties Regulations, 31 CFR part 501, set forth standard reporting and recordkeeping requirements and license application and other procedures relevant to the economic sanctions programs administered by OFAC. OFAC is updating the regulation that describes general licenses to account for the availability of such licenses on OFAC's Web site.
Because the Regulations involve a foreign affairs function, the provisions of Executive Order 12866 of September 30, 1993, 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.
The collections of information related to the Regulations are contained in 31 CFR part 501. 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.
For the reasons set forth in the preamble, the Department of the Treasury's Office of Foreign Assets Control amends 31 CFR Chapter V as follows:
Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, 2339B; 19 U.S.C. 3901-3913; 21 U.S.C. 1901-1908; 22 U.S.C. 287c; 22 U.S.C. 2370(a), 6009, 6032, 7205; 28 U.S.C. 2461 note; 31 U.S.C. 321(b); 50 U.S.C. 1701-1706; 50 U.S.C. App. 1-44.
2. Revise the second sentence of paragraph (a) of § 501.801 to read as follows:
§ 501.801
(a) General Licenses. * * * General licenses are set forth in subpart E of each part contained in this chapter, and they also may be available through the following page on OFAC's Web site: http://www.treasury.gov/resource-center/sanctions/programs/Pages/Programs.aspx. * * *
3. Add part 590 to read as follows:
590.201
590.202
590.203
590.301
590.303
590.304
590.308
590.310
590.312
590.314
590.401
590.402
590.403
590.405
590.406
590.501
590.502
590.503
590.504
590.505
590.506
590.801
590.802
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; 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. 13581, 76 FR 44757, July 27, 2011.
§ 590.101
Note to § 590.101:
§ 590.201
All transactions prohibited pursuant to Executive Order 13581 of July 24, 2011 (76 FR 44757, July 27, 2011) are also prohibited pursuant to this part.
Note 1 to § 590.201:
The names of persons listed in or designated pursuant to Executive Order 13581, whose property and interests in property therefore are blocked pursuant to this section, are published in the Federal Register and incorporated into the Office of Foreign Assets Control's Specially Designated Nationals and Blocked Persons List (“SDN List”) with the identifier “[TCO].” The SDN List is accessible through the following page on the Office of Foreign Assets Control's Web site: www.treasury.gov/sdn. Additional information pertaining to the SDN List can be found in Appendix A to this chapter. See § 590.406 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 § 590.201:
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-TCO].”
Note 3 to § 590.201:
§ 590.202
(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 § 590.201, 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 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 § 590.201, 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.
Note to paragraph (d) of § 590.202:
(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 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 § 590.201.
§ 590.203
(a) Except as provided in paragraphs (e) or (f) 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 § 590.201 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 § 590.201 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 (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 § 590.201 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 immediate financial or economic benefit or access to any person whose property and interests in property are blocked pursuant to § 590.201, nor may their holder cooperate in or facilitate the pledging or other attempted use as collateral of blocked funds or other assets.
§ 590.301
The terms blocked account and blocked property shall mean any account or property subject to the prohibitions in § 590.201 held in the name of a person whose property and interests in property are blocked pursuant to § 590.201, 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 an authorization or license from the Office of Foreign Assets Control expressly authorizing such action.
Note to § 590.301:
See § 590.406 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 § 590.201.
§ 590.302
§ 590.303
§ 590.304
§ 590.305
§ 590.306
§ 590.307
Note to § 590.307:
§ 590.308
§ 590.309
§ 590.310
§ 590.311
§ 590.312
§ 590.313
§ 590.314
§ 590.401
§ 590.402
§ 590.403
(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, such property shall no longer be deemed to be property blocked pursuant to § 590.201, unless there exists in the property another interest that is blocked pursuant to § 590.201, 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 § 590.201, such property shall be deemed to be property in which that person has an interest and therefore blocked.
§ 590.404
(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 § 590.201; or
§ 590.405
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 § 590.201 if effected after the effective date.
§ 590.406
A person whose property and interests in property are blocked pursuant to § 590.201 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 § 590.201, regardless of whether the entity itself is listed in the Annex or designated pursuant to Executive Order 13581.
§ 590.501
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 following page on OFAC's Web site: http://www.treasury.gov/resource-center/sanctions/programs/pages/tco.aspx.
§ 590.502
§ 590.503
§ 590.504
Any payment of funds or transfer of credit in which a person whose property and interests in property are blocked pursuant to § 590.201 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 to § 590.504:
See § 501.603 of this chapter for mandatory reporting requirements regarding financial transfers. See also § 590.203 concerning the obligation to hold blocked funds in interest-bearing accounts.
§ 590.505
§ 590.506
(a) The provision of the following legal services to or on behalf of persons whose property and interests in property are blocked pursuant to § 590.201 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 § 590.201, 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 § 590.201 is prohibited unless licensed pursuant to this part.
§ 590.507
The provision of nonscheduled emergency medical services in the United States to persons whose property and interests in property are blocked pursuant to § 590.201 is authorized, provided that all receipt of payment for such services must be specifically licensed.
§ 590.801
§ 590.802
Any action that the Secretary of the Treasury is authorized to take pursuant to Executive Order 13581 of July 24, 2011 (76 FR 44757, July 27, 2011), and any further Executive orders relating to the national emergency declared therein, may be taken by the Director of the Office of Foreign Assets Control or by any other person to whom the Secretary of the Treasury has delegated authority so to act.
§ 590.901
Approved: January 3, 2012.
[FR Doc. 2012-156 Filed 1-11-12; 8:45 am]