Source: https://www.federalregister.gov/documents/2009/04/13/E9-8338/persons-contributing-to-the-conflict-in-cte-divoire-sanctions-regulations
Timestamp: 2017-10-18 09:35:33
Document Index: 733908961

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16763-16771 (9 pages)
PART 543—PERSONS CONTRIBUTING TO THE CONFLICT IN CÔTE D'IVOIRE SANCTIONS REGULATIONS
https://www.federalregister.gov/d/E9-8338 https://www.federalregister.gov/d/E9-8338
The Department of the Treasury's Office of Foreign Assets Control (“OFAC”) is adding a new part to the Code of Federal Regulations to implement Executive Order 13396 of February 7, 2006, “Blocking Property of Certain Persons Contributing to the Conflict in Côte d'Ivoire.”
On February 7, 2006, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (“IEEPA”) and section 5 of the United Nations Participation Act (22 U.S.C. 287c), issued Executive Order 13396 (71 FR 7389, February 10, 2006) (“E.O. 13396”), effective at 12:01 a.m. eastern standard time on February 8, 2006. In E.O. 13396, the President determined that the situation in Côte d'Ivoire, which has resulted in the massacre of large numbers of civilians, widespread human rights abuses, significant political violence and unrest, and attacks against international peacekeeping forces leading to fatalities, constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States, and declared a national emergency to deal with that threat. E.O. 13396 also noted United Nations Security Council Resolution 1572 of November 15, 2004, which, inter alia, called on member states to impose an asset freeze on certain persons contributing to the conflict in Côte d'Ivoire.
Section 1(a) of E.O. 13396 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 the Annex to E.O. 13396; and (2) any person determined by the Secretary of the Treasury, after consultation with the Secretary of State:
To have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, the activities described above or any person listed in or designated pursuant to E.O. 13396; or
To be owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, any person listed in or designated pursuant to E.O. 13396.
In Section 1(b) of E.O. 13396, the President determined that the making of donations of certain articles, such as food, clothing, and medicine intended to be used 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. 13396 would seriously impair his ability to deal with the national emergency declared in E.O. 13396, and the President therefore prohibited such donations. Accordingly, the donation of such items is prohibited, unless authorized by OFAC.
Section 1(c) of E.O. 13396 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. 13396, and the receipt of any contribution or provision of funds, goods, or services from any such person.
Section 2 of E.O. 13396 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. 13396, as well as any conspiracy formed to violate such prohibitions.
Section 5 of E.O. 13396 authorizes the Secretary of the Treasury, after 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. 13396. In furtherance of these purposes, OFAC is promulgating these Persons Contributing to the Conflict in Côte d'Ivoire Sanctions Regulations, 31 CFR Part 543 (the “Regulations”). As Start Printed Page 16764described above, these sanctions are targeted sanctions directed at certain persons who contribute to the conflict in Côte d'Ivoire. The sanctions are not directed against the country of Côte d'Ivoire or the Government of Côte d'Ivoire. They do not generally prohibit trade or the provision of banking or other financial services to the country of Côte d'Ivoire, unless the transaction or service in question involves a person whose property and interests in property are blocked pursuant to § 543.201(a).
Subpart B of the Regulations implements the prohibitions contained in sections 1 and 2 of E.O. 13396. See, e.g., §§ 543.201 and 543.205. Persons identified in the Annex to E.O. 13396, designated by or under the authority of the Secretary of the Treasury pursuant to E.O. 13396, or otherwise subject to the blocking provisions of E.O. 13396 are referred to throughout the Regulations as “persons whose property and interests in property are blocked pursuant to § 543.201(a).” The names of persons listed in or designated pursuant to E.O. 13396 are or will be published on OFAC's Specially Designated Nationals and Blocked Persons List, which is accessible via OFAC's Web site and can be found at Appendix A to 31 CFR chapter V. Those names also have been or will be published in the Federal Register.
Sections 543.202 and 543.203 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, or liquidated financial obligations, in interest-bearing blocked accounts. Section 543.204 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.
Section 543.205 implements the prohibitions of E.O. 13396 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. 13396, and on any conspiracy formed to violate such prohibitions.
Subpart C of part 543 defines key terms used throughout the Regulations, and subpart D sets forth interpretive sections regarding the general prohibitions contained in subpart B. Section 543.411 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 listed in or designated pursuant to E.O. 13396.
Transactions otherwise prohibited under part 543 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. Subpart E of part 543 also contains certain statements of licensing policy in addition to the general licenses.
Subpart F of part 543 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 543 refers to subpart E of part 501 for applicable provisions relating to administrative procedures and contains a delegation of authority by the Secretary of the Treasury. Subpart I of the Regulations sets forth a Paperwork Reduction Act notice.
For the reasons set forth in the preamble, the Department of the Treasury's Office of Foreign Assets Control adds part 543 to 31 CFR Chapter V to read as follows:
543.303
543.309
543.408
543.501
543.502
Effect of license or authorization.Start Printed Page 16765
543.508
543.901
§ 543.101
Note to paragraph (a) of § 543.201:
1. The names of persons listed in or designated pursuant to Executive Order 13396, 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 “[COTED].” See § 543.411 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-COTED].”
3. Sections 501.806 and 501.807 of this chapter V 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.
(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 of any such security may have or might Start Printed Page 16766appear to have assigned, transferred, or otherwise disposed of the security.
§ 543.202
(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 § 543.201(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 § 543.201(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 13396, this part, and any regulation, order, directive, ruling, instruction, or license issued pursuant to this part.
Note to paragraph (d) of § 543.202:
(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 § 543.201(a).
§ 543.203
(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 § 543.201(a) 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 § 543.201(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 § 543.201(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.
(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 § 543.201(a), nor may their holder cooperate in or facilitate the pledging or other attempted use as collateral of blocked funds or other assets.
§ 543.204
(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 physical property blocked pursuant to § 543.201(a) shall be the responsibility of the owners or operators of such property, which expenses shall not be met from blocked funds.Start Printed Page 16767
(b) Property blocked pursuant to § 543.201(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.
§ 543.205
§ 543.301
(a) Supplies and technical assistance intended solely for the support of or use by the United Nations Operation in Côte d'Ivoire and forces of France who support them;
(b) Supplies of non-lethal military equipment intended solely for humanitarian or protective use, and related technical assistance and training;
(c) Supplies of protective clothing, including flak jackets and military helmets, temporarily exported to Côte d'Ivoire for use by United Nations personnel, representatives of the media, and humanitarian and development workers and associated personnel, for their personal use only;
(d) Supplies temporarily exported to Côte d'Ivoire to the forces of a country that is taking action solely and directly to facilitate the evacuation of its nationals and those for whom it has consular responsibility in Côte d'Ivoire; and
(e) Supplies of arms and related materiel and technical training and assistance intended solely for support of or use in the process of restructuring defense and security forces pursuant to paragraph 3, subparagraph (f) of the Linas-Marcoussis Agreement.
§ 543.302
The terms blocked account and blocked property shall mean any account or property subject to the prohibitions in § 543.201 held in the name of a person whose property and interests in property are blocked pursuant to § 543.201(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 § 543.302:
See § 543.411 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 § 543.201(a).
§ 543.303
(a) With respect to a person whose property and interests in property are blocked pursuant to § 543.201(a)(1), 12:01 a.m. eastern standard time, February 8, 2006;
(b) With respect to a person whose property and interests in property are blocked pursuant to § 543.201(a)(2), the earlier of the date of actual or constructive notice of such person's designation.
§ 543.304
§ 543.305
§ 543.306
Note to § 543.306:
§ 543.307
§ 543.308
§ 543.309
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 Start Printed Page 16768interest 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.
§ 543.310
§ 543.311
§ 543.312
§ 543.401
§ 543.402
§ 543.403
(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 § 543.201(a), unless there exists in the property another interest that is blocked pursuant to § 543.201(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 § 543.201(a), such property shall be deemed to be property in which that person has an interest and therefore blocked.
§ 543.404
(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 § 543.201(a); or
(c) Example. A license authorizing Company A, whose property and interests in property are blocked pursuant to § 543.201(a), to complete a securities sale also authorizes all 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 § 543.201(a).
§ 543.405
(a) The prohibitions on transactions involving blocked property contained in § 543.201 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 § 543.201(a); or
(2) With respect to property interests subject to § 543.201.
(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 § 543.201(a).
Note to § 543.405:
See §§ 543.507 and 543.508 on licensing policy with regard to the provision of certain legal and medical services.
§ 543.406
The prohibitions in § 543.201 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 § 543.201(a), or property in which a person whose property and interests in property are blocked pursuant to § 543.201(a) has or has had an interest since the effective date.
§ 543.407
Pursuant to § 543.201, 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.
§ 543.408
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 § 543.201(a). For the purposes of this part, a contribution is made by, to, or for the benefit of a Start Printed Page 16769person whose property and interests in property are blocked pursuant to § 543.201(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.
§ 543.409
The prohibition in § 543.201 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 § 543.201(a).
§ 543.410
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 § 543.201 if effected after the effective date.
§ 543.411
A person whose property and interests in property are blocked pursuant to § 543.201(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 § 543.201(a), regardless of whether the entity itself is listed in the Annex to Executive Order 13396 or designated pursuant to § 543.201(a).
§ 543.501
§ 543.502
§ 543.503
§ 543.504
Any payment of funds or transfer of credit in which a person whose property and interests in property are blocked pursuant to § 543.201(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 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 § 543.504:
See § 501.603 of this chapter for mandatory reporting requirements regarding financial transfers. See also § 543.203 concerning the obligation to hold blocked funds in interest-bearing accounts.
§ 543.505
§ 543.506
Subject to the requirements of § 543.203, U.S. financial institutions are authorized to invest and reinvest assets blocked pursuant to § 543.201, subject to the following conditions:
(c) No immediate financial or economic benefit accrues (e.g., through pledging or other use) to a person whose property and interests in property are blocked pursuant to § 543.201(a).
§ 543.507
(a) The provision of the following legal services to or on behalf of persons whose property and interests in property are blocked pursuant to § 543.201(a) is authorized, provided that Start Printed Page 16770all 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 § 543.201(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 § 543.201(a) is prohibited unless specifically licensed in accordance with § 543.202(e).
§ 543.508
The provision of nonscheduled emergency medical services in the United States to persons whose property and interests in property are blocked pursuant to § 543.201(a) is authorized, provided that all receipt of payment for such services must be specifically licensed.
§ 543.601
Note to paragraph (a)(1) of § 543.701:
§ 543.702
(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.Start Printed Page 16771
§ 543.703
§ 543.704
§ 543.801
§ 543.802
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.
§ 543.901
[FR Doc. E9-8338 Filed 4-10-09; 8:45 am]