[Federal Register Volume 78, Number 124 (Thursday, June 27, 2013)]
[Rules and Regulations]
[Pages 38574-38577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15424]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Parts 594, 595, and 597
Technical Amendments to Counter-Terrorism Sanctions Regulations
Implemented by OFAC
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule.
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SUMMARY: The Office of Foreign Assets Control (``OFAC'') of the U.S.
Department of the Treasury is amending the Global Terrorism Sanctions
Regulations and the Terrorism Sanctions Regulations (the ``TSR'') to
clarify the scope of prohibitions on the making of donations contained
in the underlying Executive orders and that a person whose property and
interests in property are blocked pursuant to those programs 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. In addition, OFAC is amending the TSR to add a definition of
the term ``financial, material, or technological support'' and to set
at 180 days the maximum term of maturity for instruments in which funds
may be invested or held within a blocked interest-bearing account.
Finally, OFAC is correcting a clerical error within the Foreign
Terrorist Organizations Sanctions Regulations.
DATES: Effective: June 27, 2013.
FOR FURTHER INFORMATION CONTACT: Assistant Director for Sanctions
Compliance & Evaluation, tel.: 202-622-2490, Assistant Director for
Licensing, tel.: 202-622-2480, Assistant Director for Policy, tel.:
202-622-2746, Assistant Director for Regulatory Affairs, 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, Washington, DC 20220 (not toll free
numbers).
SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability
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.
Background
The Office of Foreign Assets Control (``OFAC'') administers three
sanctions programs with respect to terrorists and terrorist
organizations. The Terrorism Sanctions Regulations, 31 CFR part 595
(the ``TSR''), implement Executive Order 12947 of January 23, 1995, in
which the President declared a national emergency with respect to
``grave acts of violence committed by foreign terrorists that disrupt
the Middle East peace process.'' The Global Terrorism Sanctions
Regulations, 31 CFR part 594 (the ``GTSR''), implement Executive Order
13224 of September 23, 2001, in which the President declared a national
emergency more generally with respect to ``grave acts of terrorism and
threats of terrorism committed by foreign terrorists.'' The Foreign
Terrorist Organizations Sanctions Regulations, 31 CFR part 597 (the
``FTOSR''), implement provisions of the Antiterrorism and Effective
Death Penalty Act of 1996.
Executive Order 13372 of February 16, 2005, amended section 3 of
Executive Order 12947 and section 4 of Executive Order 13224 to clarify
that the prohibitions contained in those sections on the making of
donations of the types of articles specified in section 203(b)(2) of
the International Emergency Economic Powers Act (50 U.S.C. 1702(b)(2))
apply to donations ``by, to, or for the benefit of'' and not just
``to'' persons whose property and interests in property are blocked
pursuant to those orders. OFAC is amending sections 594.204 and 594.409
of the GTSR and sections 595.204 and 595.408 of the TSR to incorporate
this clarification into its regulations.
OFAC also is adding new interpretive sections 594.412 and 595.410
to the GTSR and TSR, respectively, to clarify that a person whose
property and interests in property are blocked pursuant to those
programs 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 the relevant
sanctions
[[Page 38575]]
program, regardless of whether the entity itself is listed in an annex
to an Executive order or designated pursuant to statutory or regulatory
authorities. Further, OFAC is adding references to these new
interpretive sections to note 2 to paragraph (a) of section 594.201 of
the GTSR and new note 1 to section 595.311 of the TSR.
OFAC is amending the TSR to define the term ``financial, material,
or technological support,'' as used in those regulations. Paragraph
(a)(2)(ii) of section 595.311 of the TSR implements section 1(a)(ii)(B)
of Executive Order 12947 by including within the definition of
``specially designated terrorist'' foreign persons designated by the
Secretary of State, in coordination with the Secretary of the Treasury
and the Attorney General, because they are found to have assisted in,
sponsored, or provided financial, material, or technological support
for, or services in support of, acts of violence that have the purpose
or effect of disrupting the Middle East peace process.
New section 595.317 in subpart C of the TSR defines the term
``financial, material, or technological support'' to mean any property,
tangible or intangible, and includes a list of specific examples. The
corresponding definition already appears in the GTSR, in existing
section 594.317. The term is not used in the FTOSR.
In addition, OFAC is revising paragraph (b) of section 595.203 of
the TSR to set at 180 days the maximum term of maturity for instruments
in which funds within an interest-bearing account, as defined within
that paragraph, may be invested or held. Previously, the maximum term
of maturity for such instruments was set at 90 days, which is not
consistent with the maximum term of maturity set out in analogous
provisions under the regulations for other OFAC-administered sanctions
programs contained in the various parts of 31 CFR chapter V.
Finally, OFAC is making certain technical edits to definitions
contained in the GTSR and TSR and revising the note to section 597.301
of the FTOSR to correct a clerical error.
Public Participation
Because these amendments to 31 CFR parts 594, 595, and 597 involve
a foreign affairs function, Executive Order 12866 and the provisions of
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.
List of Subjects 31 CFR Parts 594, 595, and 597
Administrative practice and procedure, Banks, Banking, Blocking of
assets, Terrorism.
For the reasons set forth in the preamble, the Department of the
Treasury's Office of Foreign Assets Control amends 31 CFR parts 594,
595, and 597 as follows:
PART 594--GLOBAL TERRORISM SANCTIONS REGULATIONS
0
1. The authority citation for part 594 is revised to read as follows:
Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 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; E.O. 13224, 66 FR
49079, 3 CFR, 2001 Comp., p. 786; E.O. 13268, 67 FR 44751, 3 CFR,
2002 Comp., p. 240; E.O. 13284, 68 FR 4075, 3 CFR, 2003 Comp., p.
161; E.O. 13372, 70 FR 8499, 3 CFR, 2006 Comp., p. 159.
Subpart B--Prohibitions
0
2. In Sec. 594.201, revise Note 2 to paragraph (a) to read as follows:
Sec. 594.201 Prohibited transactions involving blocked property.
* * * * *
Note 2 to paragraph (a) of Sec. 594.201: The names of persons
whose property and interests in property are blocked pursuant to
Sec. 594.201(a) 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 ``[SDGT].'' The SDN List is accessible through the
following page on the Office of Foreign Assets Control's Web site:
http://www.treasury.gov/sdn. Additional information pertaining to
the SDN List can be found in appendix A to this chapter. See Sec.
594.412 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.
* * * * *
0
3. Revise Sec. 594.204 to read as follows:
Sec. 594.204 Prohibited transaction or dealing in property;
contributions of funds, goods, or services.
Except as otherwise authorized, no U.S. person may engage in any
transaction or dealing in property or interests in property of persons
whose property and interests in property are blocked pursuant to Sec.
594.201(a), including but not limited to the following transactions:
(a) 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 Sec. 594.201(a); and
(b) The receipt of any contribution or provision of funds, goods,
or services from any person whose property and interests in property
are blocked pursuant to Sec. 594.201(a).
Subpart C--General Definitions
0
4. Revise Sec. 594.310 to read as follows:
Sec. 594.310 Specially designated global terrorist; SDGT.
The term specially designated global terrorist or SDGT means any
person whose property and interests in property are blocked pursuant to
Sec. 594.201(a).
Subpart D--Interpretations
0
5. Revise Sec. 594.409 to read as follows:
Sec. 594.409 Charitable contributions.
Unless specifically authorized by the Office of Foreign Assets
Control pursuant to this part, no charitable contribution or donation
of funds, goods, services, or technology, including contributions or
donations to relieve human suffering, such as food, clothing, or
medicine, may be made by, to, or for the benefit of, or received from,
any person whose property and interests in property are blocked
pursuant to Sec. 594.201(a). For the purposes of this part, a
contribution or donation is made by, to, or for the benefit of, or
received from, any person whose property and interests in property are
blocked pursuant to Sec. 594.201(a) if made by, to, or in the name of,
or received from or in the name of, such a person; if made by, to, or
in the name of, or received from 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 or donations by, to, or for
the benefit of such a person, or the receipt of contributions or
donations from any such person.
0
6. Add Sec. 594.412 to subpart D to read as follows:
Sec. 594.412 Entities owned by a person whose property and interests
in property are blocked.
A person whose property and interests in property are blocked
pursuant to Sec. 594.201(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
[[Page 38576]]
blocked, and such an entity is a person whose property and interests in
property are blocked pursuant to Sec. 594.201(a), regardless of
whether the entity itself is listed in the Annex to Executive Order
13224, as amended, or designated pursuant to Sec. 594.201(a).
PART 595--TERRORISM SANCTIONS REGULATIONS
0
7. The authority citation for part 595 is revised to read as follows:
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; E.O. 12947, 60 FR 5079, 3 CFR, 1995
Comp., p. 319; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208;
E.O. 13372, 70 FR 8499, 3 CFR, 2006 Comp., p. 159.
Subpart B--Prohibitions
0
8. In Sec. 595.203, revise paragraph (b) to read as follows:
Sec. 595.203 Holding of certain types of blocked property in
interest-bearing accounts.
* * * * *
(b) For purposes of this section, the term interest-bearing account
means a blocked account in a U.S. financial institution earning
interest at rates that are commercially reasonable for the amount of
funds in the account. Except as otherwise authorized, the funds may not
be invested or held in instruments the maturity of which exceeds 180
days.
* * * * *
0
9. Revise Sec. 595.204 to read as follows:
Sec. 595.204 Prohibited transaction or dealing in property;
contributions of funds, goods, or services.
Except as otherwise authorized, no U.S. person may deal in property
or interests in property of a specially designated terrorist, including
but not limited to the following transactions:
(a) The making of any contribution or provision of funds, goods, or
services by, to, or for the benefit of a specially designated
terrorist; and
(b) The receipt of any contribution or provision of funds, goods,
or services from a specially designated terrorist.
Subpart C--General Definitions
0
10. In Sec. 595.311, revise paragraph (a)(1), remove the Note to Sec.
595.311, and add Notes 1, 2, and 3 to read as follows:
Sec. 595.311 Specially designated terrorist.
(a) * * *
(1) Persons listed in the Annex to Executive Order 12947 of January
23, 1995, as amended;
* * * * *
Note 1 to Sec. 595.311: The names of persons determined to fall
within this definition, whose property and interests in property
therefore are blocked pursuant to this part, 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 ``[SDT].'' The SDN List is
accessible through the following page on the Office of Foreign
Assets Control's Web site: http://www.treasury.gov/sdn. Additional
information pertaining to the SDN List can be found in appendix A to
this chapter. See Sec. 595.410 concerning entities that may not be
listed on the SDN List but whose property and interests in property
are nevertheless blocked pursuant to this part.
Note 2 to Sec. 595.311: 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 part also are published in the
Federal Register and incorporated into the SDN List with the
identifier ``[BPI-SDT].''
Note 3 to Sec. 595.311: Section 501.807 of this chapter sets
forth the procedures to be followed by persons seeking
administrative reconsideration of their designation, or who wish to
assert that the circumstances resulting in the designation are no
longer applicable.
0
11. Add Sec. 595.317 to subpart C to read as follows:
Sec. 595.317 Financial, material, or technological support.
The term financial, material, or technological support, as used in
Sec. 595.311(a)(2)(ii) of this part, means any property, tangible or
intangible, including but not limited to currency, financial
instruments, securities, or any other transmission of value; weapons or
related materiel; chemical or biological agents; explosives; false
documentation or identification; communications equipment; computers;
electronic or other devices or equipment; technologies; lodging; safe
houses; facilities; vehicles or other means of transportation; or
goods. ``Technologies'' as used in this definition means specific
information necessary for the development, production, or use of a
product, including related technical data such as blueprints, plans,
diagrams, models, formulae, tables, engineering designs and
specifications, manuals, or other recorded instructions.
Subpart D--Interpretations
0
12. Revise Sec. 595.408 to read as follows:
Sec. 595.408 Charitable contributions.
(a) Unless specifically authorized by the Office of Foreign Assets
Control pursuant to this part, no charitable contribution or donation
of funds, goods, services, or technology, including contributions or
donations to relieve human suffering, such as food, clothing, or
medicine, may be made by, to, or for the benefit of, or received from,
any specially designated terrorist. For the purposes of this part, a
contribution or donation is made by, to, or for the benefit of, or
received from, a specially designated terrorist if made by, to, or in
the name of, or received from or in the name of, a specially designated
terrorist; if made by, to, or in the name of, or received from or in
the name of, an entity or individual acting for or on behalf of, or
owned or controlled by, a specially designated terrorist; or if made in
an attempt to violate, to evade, or to avoid the bar on the provision
of contributions or donations by, to, or for the benefit of a specially
designated terrorist, or the receipt of contributions or donations from
a specially designated terrorist.
(b) Individuals and organizations who donate or contribute funds,
goods, services, or technology without knowledge or reason to know that
the donation or contribution is destined to or for the benefit of a
specially designated terrorist shall not be subject to penalties for
such donation or contribution.
0
13. Add Sec. 595.410 to subpart D to read as follows:
Sec. 595.410 Entities owned by a person whose property and interests
in property are blocked.
A person who is determined to fall within the definition of
specially designated terrorist as set forth in Sec. 595.311, whose
property and interests in property therefore are blocked pursuant to
this part, 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 this part,
regardless of whether the entity itself is listed in the Annex to
Executive Order 12947, as amended, or designated pursuant to this part.
PART 597--FOREIGN TERRORIST ORGANIZATIONS SANCTIONS REGULATIONS
0
14. The authority citation for part 597 continues to read as follows:
[[Page 38577]]
Authority: 31 U.S.C. 321(b); Pub. L. 101-410, 104 Stat. 890 (28
U.S.C. 2461 note); Pub. L. 104-132, 110 Stat. 1214, 1248-53 (8
U.S.C. 1189, 18 U.S.C. 2339B).
Subpart C--General Definitions
0
15. In Sec. 597.301, revise the Note to read as follows:
Sec. 597.301 Agent.
* * * * *
Note to Sec. 597.301: The names of persons designated as
foreign terrorist organizations or determined to fall within this
definition 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 ``[FTO].'' The SDN List is accessible through the
following page on the Office of Foreign Assets Control's Web site:
http://www.treasury.gov/sdn. Additional information pertaining to
the SDN List can be found in appendix A to this chapter. Section
501.807 of this chapter sets forth the procedures to be followed by
a person seeking administrative reconsideration of a determination
that the person falls within this definition, or who wishes to
assert that the circumstances resulting in such a determination are
no longer applicable.
Dated: June 21, 2013.
Adam J. Szubin,
Director, Office of Foreign Assets Control.
[FR Doc. 2013-15424 Filed 6-26-13; 8:45 am]
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