Source: https://www.federalregister.gov/documents/2005/06/13/05-11637/reporting-procedures-and-penalties-regulations-and-sudanese-sanctions-regulations
Timestamp: 2018-04-25 11:23:24
Document Index: 654412328

Matched Legal Cases: ['art 538', 'art 501', '§\u2009501', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', 'art 501', 'art 538', 'art 501', 'arts 501', 'art 538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', 'arts 730', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', '§\u2009538', 'art 501', '§\u2009538']

Federal Register :: Reporting, Procedures and Penalties Regulations and Sudanese Sanctions Regulations
A Rule by the Foreign Assets Control Office on 06/13/2005
34060-34064 (5 pages)
https://www.federalregister.gov/d/05-11637 https://www.federalregister.gov/d/05-11637
The Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury is revising the Reporting, Procedures and Penalties Regulations (the “RPPR”) to make a technical change in order to remove a reference to the Government of Sudan that was used prior to the promulgation of Executive Order 13067 and the Sudanese Sanctions Regulations.
OFAC is also amending the Sudanese Sanctions Regulations, (the “SSR”). The amendments to the SSR include the issuance of two general licenses, effective June 13, 2005. One general license authorizes the operation of accounts in U.S. financial institutions under certain circumstances for individuals ordinarily resident in Sudan. The other general license authorizes U.S. depository institutions, U.S. registered brokers and dealers in securities, and U.S. registered money transmitters to process transfers of funds constituting noncommercial, personal remittances to or from Sudan or for or on behalf of individuals ordinarily resident in Sudan. Other amendments to the SSR include the removal of two regulatory provisions and the revision of a provision regarding reexportation of U.S.-origin goods, technology or software by non-U.S. persons, and another revision of to reflect changes in OFAC's procedure for imposing civil penalties.
Effective Date: June 13, 2005.
Chief of Compliance Programs, tel.: 202/622-2490, Chief of Civil Penalties, tel.: 202/622-6140, Chief of Licensing, tel.: 202/622-2480, Chief of Policy Planning and Program Management, tel.: 202/622-4855, or Chief Counsel, tel.: 202/622-2410, Office of Foreign Assets Control, Department of the Treasury, Washington, DC 20220.
On November 3, 1997, President Clinton, invoking the authority, inter alia, of the International Emergency Economic Powers Act (50 U.S.C. 1701-1706), issued Executive Order 13067 (62 FR 59989, November 5, 1997). The order declared a national emergency with respect to the policies and actions of the Government of Sudan, “including continued support for international terrorism; ongoing efforts to destabilize neighboring governments; and the prevalence of human rights violations, including slavery and the denial of religious freedom.” To deal with this national emergency, Executive Order 13067 imposed trade sanctions with respect to Sudan and blocked all property and interests in property of the Government of Sudan in the United States or within the possession or control of U.S. persons. The Sudanese Sanctions Regulations, 31 CFR part 538 (the “SSR”), implement Executive Order 13067. Start Printed Page 34061
The Reporting, Procedures and Penalties Regulations, 31 CFR part 501 (the “RPPR”), set forth uniform reporting and procedural requirements applicable to all OFAC sanctions programs. OFAC is amending the RPPR to make a technical change to § 501.604 by removing a reference to the Government of Sudan from that section. Section 501.604(b) uses the Government of Sudan in an example of transactions involving funds transfers that are rejected, but not blocked. This example, however, was published before the issuance of Executive Order 13067 and OFAC's promulgation of the SSR. Executive Order 13067 and the SSR require U.S. financial institutions to block unlicensed funds transfers involving the Government of Sudan.
OFAC is also amending provisions of the SSR dealing with the transfer of funds to Sudan. First, the SSR are being amended by the removal of § 538.413, an interpretive provision stating that the transfer of funds to Sudan from the United States does not constitute an exportation of services pursuant to § 538.205. As a result of the removal of § 538.413, money transmittal services to Sudan are prohibited except as otherwise authorized.
Second, to authorize a means by which noncommercial, personal transmittals of money to Sudan may take place in a manner consistent with Executive Order 13067, OFAC is amending the SSR by issuing a general license, effective June 13, 2005. This general license, new § 538.528, authorizes U.S. depository institutions, U.S. registered brokers and dealers in securities, and U.S. registered money transmitters to process transfers of funds constituting noncommercial, personal remittances under certain circumstances to or from Sudan or for or on behalf of individuals ordinarily resident in Sudan. The general license does not authorize transfers if the underlying transaction is otherwise prohibited by subpart B of the SSR. Definitions of “U.S. depository institution,” “U.S. registered broker or dealer in securities,” and “U.S. registered money transmitter” are added to subpart C of the SSR to clarify the scope of the general license.
Third, § 538.412, an interpretive provision stating that the operation of accounts in financial institutions for private Sudanese persons does not constitute the exportation of a service to Sudan, is removed from subpart D of the SSR. The content of this section appears in revised form in subpart E as a new general license, § 538.527, effective June 13, 2005. Section 538.527 authorizes the operation of accounts in U.S. financial institutions for individuals ordinarily resident in Sudan, provided that transactions through the accounts are of a personal nature. The section does not authorize account transactions for use in supporting or operating a business; nor does it authorize transfers of funds to Sudan or to or for the benefit of individuals ordinarily resident in Sudan unless authorized by § 538.528. The section also does not authorize transactions that are otherwise prohibited by subpart B of the SSR.
In addition to the changes described above, § 538.507 of the SSR is also revised to clarify the circumstances under which the reexportation of goods, technology or software of U.S. origin to Sudan or the Government of Sudan by a non-U.S. person is authorized.
Finally, §§ 538.701-.704 of the SSR are amended to reflect changes in OFAC's procedure for imposing or settling civil penalties. Sections 538.701-.704 set forth the procedure by which civil penalties will be issued or settled, as well as guidelines for responding to a prepenalty notice. The amendments do not affect the maximum penalty amounts that the SSR authorize.
OFAC will not accept public comments in languages other than English or accompanied by a request that a part or all of the submission be treated confidentially because of its business proprietary nature or for any other reason. OFAC will return any such submission to the originator. All public comments on these Regulations will be a matter of public record. Copies of the public record concerning these Regulations will be made available not sooner than September 12, 2005 and will be obtainable from OFAC's Web site (http://www.treas.gov/​ofac). If that service is unavailable, written requests for copies may be sent to: Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Ave., NW., Washington, DC 20220, Attn: Chief, Records Division.
The collections of information related to 31 CFR part 501 and 31 CFR part 538 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.
For the reasons set forth in the Preamble, 31 CFR parts 501 and 538 are amended as follows:
2. Section 501.604 is amended by revising paragraph (b) (3) to read as follows:
Reports by U.S. financial institutions on rejected funds transfers.
(b) * * * Start Printed Page 34062
(3) Transferring unlicensed gifts or charitable donations from the Government of Syria to a U.S. person;
3. The authority citation for part 538 continues to read as follows:
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 18 U.S.C. 2339B, 2332d; 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 106-387, 114 Stat. 1549; E.O. 13067, 62 FR 59989, 3 CFR, 1997 Comp., p. 230.
4. Section 538.317 is added to subpart C as follows:
§ 538.317
5. Section 538.318 is added to subpart C as follows:
§ 538.318
The term U.S. registered broker or dealer in securities means any U.S. citizen, permanent resident alien, or entity organized under the laws of the United States or of any jurisdiction within the United States, including its foreign branches, or any agency, office or branch of a foreign entity located in the United States, that:
3. Section 538.319 is added to subpart C as follows:
§ 538.319
The term U.S. registered money transmitter means any U.S. citizen, permanent resident alien, or entity organized under the laws of the United States or of any jurisdiction within the United States, including its foreign branches, or any agency, office or branch of a foreign entity located in the United States, that is a money transmitter, as defined in 31 CFR 103.11(uu)(5), that is registered pursuant to 31 CFR 103.41.
§ 538.412
7. Section 538.412 is removed from subpart D.
§ 538.413
8. Section 538.413 is removed from subpart D.
9. Section 538.507 is revised to read as follows:
§ 538.507
(a) Goods and technology subject to export license application requirements under other United States regulations. The reexportation to Sudan or the Government of Sudan by a non-U.S. person of any goods or technology exported from the United States, the exportation of which to Sudan is subject to export or reexport license application requirements, is authorized under this section provided that the goods or technology:
Note to paragraph (a) of § 538.507:
Notwithstanding the authorization set forth in paragraph (a), a non-U.S. person's reexportation of goods, technology or software of U.S. origin that are subject to the Export Administration Regulations (15 CFR parts 730 through 774) may require specific authorization from the Department of Commerce, Bureau of Industry and Security.
Note to paragraph (b) of § 538.507:
10. Section 538.527 is added to subpart E to read as follows:
§ 538.527
The operation of an account in a U.S. financial institution for an individual ordinarily resident in Sudan who is not included within the term “Government of Sudan,” as defined in § 538.305, is authorized, provided that transactions processed through the account:
(b) Do not involve transfers directly or indirectly to Sudan or for the benefit of individuals ordinarily resident in Sudan unless authorized by § 538.528; and
11. Section 538.528 is added to subpart E to read as follows:
§ 538.528
(a) U.S. depository institutions, U.S. registered brokers or dealers in securities, and U.S. registered money transmitters are authorized to process transfers of funds to or from Sudan or for or on behalf of an individual ordinarily resident in Sudan who is not included within the term “Government of Sudan,” as defined in § 538.305, in cases in which the transfer involves a noncommercial, personal remittance, provided the transfer is not by, to, or through a person who is included within the term “Government of Sudan,” as defined in § 538.305. Noncommercial, personal remittances do not include charitable donations to or for the benefit of an entity or funds transfers for use in supporting or operating a business.
Note to paragraph (a) of § 538.528:
The institutions identified in paragraph (a) may transfer charitable donations made by U.S. persons to nongovernmental organizations in Sudan registered pursuant to § 538.521, provided that the transfer is made pursuant to § 538.521 and the terms of the registration.
(c) This section does not authorize transactions with respect to property blocked pursuant to § 538.201.
12. Section 538.701(c) is amended by revising paragraph (c) as follows:
(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 United States, knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or 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, United States Code, or imprisoned not more than five years, or both.
13. Section 538.702 is revised to read as follows:
§ 538.702
(a) When required. If the Director of 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 the International Emergency Economic Powers Act, and the Director determines that further proceedings are warranted, the Director shall notify the alleged violator of the agency's intent to impose a monetary penalty by issuing a prepenalty notice. The prepenalty notice shall be in writing. The prepenalty notice may be issued whether or not another agency has taken any action with respect to the matter.
(2) Right to respond. The prepenalty notice also shall inform the respondent of the respondent's right to make a written presentation within the applicable 30-day period set forth in § 538.703 as to why a monetary penalty should not be imposed or why, if imposed, the monetary penalty should be in a lesser amount than proposed.
(c) Informal settlement prior to issuance of prepenalty notice. At any time prior to the issuance of a prepenalty notice, an alleged violator may request in writing that, for a period not to exceed sixty (60) days, the agency withhold issuance of the prepenalty notice for the exclusive purpose of effecting settlement of the agency's potential civil monetary penalty claims. In the event the Director grants the request, under terms and conditions within the Director's discretion, the Office of Foreign Assets Control will agree to withhold issuance of the prepenalty notice for a period not to exceed 60 days and will enter into settlement negotiations with respect to the potential civil monetary penalty claim.
14. Section 538.703 is revised to read as follows:
§ 538.703
(e) Informal settlement. In addition to or as an alternative to a written response to a prepenalty notice, the respondent or respondent's representative may contact the Office of Foreign Assets Control's Civil Penalties Division as advised in the prepenalty notice to propose the settlement of allegations contained in the prepenalty notice and related matters. However, the requirements set forth in paragraph (g) of this section as Start Printed Page 34064to oral communication by the representative must first be fulfilled. In the event of settlement at the prepenalty stage, the claim proposed in the prepenalty notice will be withdrawn, the respondent will not be required to take a written position on allegations contained in the prepenalty notice, and the Office of Foreign Assets Control will make no final determination as to whether a violation occurred. The amount accepted in settlement of allegations in a prepenalty notice may vary from the civil penalty that might finally be imposed in the event of a formal determination of violation. In the event no settlement is reached, the time limit specified in paragraph (a) of this section for written response to the prepenalty notice will remain in effect, unless additional time is granted by the Office of Foreign Assets Control.
(f) Guidelines. Guidelines for the imposition or settlement of civil penalties by the Office of Foreign Assets Control have been codified in the Appendix to 31 CFR part 501, the Reporting, Procedures and Penalties Regulations.
15. Section 538.704 is revised to read as follows:
§ 538.704
Assistant Secretary (Terrorist Financing and Financial Crimes), Department of the Treasury.
[FR Doc. 05-11637 Filed 6-8-05; 3:22 pm]