[Title 31 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2017 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          

          Title 31

Money and Finance:Treasury


________________________

Parts 500 to End

                         Revised as of July 1, 2017

          Containing a codification of documents of general 
          applicability and future effect

          As of July 1, 2017
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 31:
    SUBTITLE B--Regulations Relating to Money and Finance 
      (Continued)
          Chapter V--Office of Foreign Assets Control, 
          Department of the Treasury                                 5
          Chapter VI--Bureau of Engraving and Printing, 
          Department of the Treasury                               629
          Chapter VII--Federal Law Enforcement Training 
          Center, Department of the Treasury                       635
          Chapter VIII--Office of Investment Security, 
          Department of the Treasury                               639
          Chapter IX--Federal Claims Collection Standards 
          (Department of the Treasury--Department of Justice)      665
          Chapter X--Financial Crimes Enforcement Network, 
          Department of the Treasury                               685
  Finding Aids:
      Table of CFR Titles and Chapters........................     841
      Alphabetical List of Agencies Appearing in the CFR......     861
      List of CFR Sections Affected...........................     871

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                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 31 CFR 500.101 
                       refers to title 31, part 
                       500, section 101.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
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    To determine whether a Code volume has been amended since its 
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Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
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OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
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PAST PROVISIONS OF THE CODE

    Provisions of the Code that are no longer in force and effect as of 
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``[RESERVED]'' TERMINOLOGY

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editorially to indicate that a portion of the CFR was left vacant and 
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INCORPORATION BY REFERENCE

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This material, like any other properly issued regulation, has the force 
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this volume.

[[Page vii]]

    An index to the text of ``Title 3--The President'' is carried within 
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INQUIRIES

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available at www.ecfr.gov.

    Oliver A. Potts,
    Director,
    Office of the Federal Register.
    July 1, 2017.

                                
                                      
                            

  

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                               THIS TITLE

    Title 31--Money and Finance: Treasury is composed of three volumes. 
The parts in these volumes are arranged in the following order: Parts 0-
199, parts 200-499, and part 500 to end. The contents of these volumes 
represent all current regulations codified under this title of the CFR 
as of July 1, 2017.

    For this volume, Robert J. Sheehan, III was Chief Editor. The Code 
of Federal Regulations publication program is under the direction of 
John Hyrum Martinez, assisted by Stephen J. Frattini.

[[Page 1]]



                  TITLE 31--MONEY AND FINANCE: TREASURY




                  (This book contains part 500 to end)

  --------------------------------------------------------------------

    SUBTITLE B--Regulations Relating to Money and Finance (Continued)

                                                                    Part

chapter v--Office of Foreign Assets Control, Department of 
  the Treasury..............................................         500

chapter vi--Bureau of Engraving and Printing, Department of 
  the Treasury..............................................         601

chapter vii--Federal Law Enforcement Training Center, 
  Department of the Treasury................................         700

chapter viii--Office of Investment Security, Department of 
  the Treasury..............................................         800

chapter ix--Federal Claims Collection Standards (Department 
  of the Treasury--Department of Justice)...................         900

chapter x--Financial Crimes Enforcement Network, Department 
  of the Treasury...........................................        1010

[[Page 3]]

    Subtitle B--Regulations Relating to Money and Finance (Continued)

[[Page 5]]



 CHAPTER V--OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY




  --------------------------------------------------------------------
Part                                                                Page
500             [Reserved]

501             Reporting, procedures and penalties 
                    regulations.............................           7
510             North Korea sanctions regulations...........          52
515             Cuban assets control regulations............          63
535             Iranian assets control regulations..........         123
536             Narcotics trafficking sanctions regulations.         148
538             Sudanese sanctions regulations..............         160
539             Weapons of mass destruction trade control 
                    regulations.............................         196
541             Zimbabwe sanctions regulations..............         204
542             Syrian sanctions regulations................         220
543             Cote D'Ivoire sanctions regulations.........         249
544             Weapons of mass destruction proliferators 
                    sanctions regulations...................         262
546             Darfur sanctions regulations................         275
547             Democratic Republic of the Congo sanctions 
                    regulations.............................         288
548             Belarus sanctions regulations...............         301
549             Lebanon sanctions regulations...............         314
551             Somalia sanctions regulations...............         327
552             Yemen sanctions regulations.................         336
553             Central African Republic sanctions 
                    regulations.............................         344
554             Burundi sanctions regulations...............         355
558             South Sudan Sanctions Regulations...........         365
560             Iranian transactions and sanctions 
                    regulations.............................         375
561             Iranian financial sanctions regulations.....         426
562             Iranian human rights abuses sanctions 
                    regulations.............................         448
566             Hizballah financial sanctions regulations...         457
570             Libyan sanctions regulations................         467
576             Iraq stabilization and insurgency sanctions 
                    regulations.............................         476
578             Cyber-related sanctions regulations.........         492
588             Western Balkans stabilization regulations...         502
589             Ukraine related sanctions regulations.......         515
590             Transnational criminal organizations 
                    sanctions regulations...................         528

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591             Venezuela sanctions regulations.............         537
592             Rough diamonds control regulations..........         548
594             Global terrorism sanctions regulations......         556
595             Terrorism sanctions regulations.............         576
596             Terrorism List Governments sanctions 
                    regulations.............................         593
597             Foreign terrorist organizations sanctions 
                    regulations.............................         597
598             Foreign narcotics kingpin sanctions 
                    regulations.............................         613
599             [Reserved]

Appendix A to Chapter V--Information Pertaining to the 
  Specially Designated Nationals and Blocked Persons List...         625

[[Page 7]]

                           PART 500 [RESERVED]



PART 501_REPORTING, PROCEDURES AND PENALTIES REGULATIONS--
Table of Contents



     Subpart A_Relation of This Part to Other Parts in This Chapter

Sec.
501.101  Relation of this part to other parts in this chapter.

                          Subpart B_Definitions

501.301  Definitions.

                            Subpart C_Reports

501.601  Records and recordkeeping requirements.
501.602  Reports to be furnished on demand.
501.603  Reports on blocked property.
501.604  Reports by U.S. financial institutions on rejected funds 
          transfers.
501.605  Reports on litigation, arbitration, and dispute resolution 
          proceedings.
501.606  Reporting and recordkeeping requirements applicable to economic 
          sanctions programs.

          Subpart D_Trading With the Enemy Act (TWEA) Penalties

501.700  Applicability.
501.701  Penalties.
501.702  Definitions.
501.703  Overview of civil penalty process and construction of rules.
501.704  Appearance and practice.
501.705  Service and filing.
501.706  Prepenalty Notice; issuance by Director.
501.707  Response to Prepenalty Notice.
501.708  Director's finding of no penalty warranted.
501.709  Penalty Notice.
501.710  Settlement.
501.711  Hearing request.
501.712  Acknowledgment of hearing request.
501.713  Order Instituting Proceedings.
501.714  Answer to Order Instituting Proceedings.
501.715  Notice of hearing.
501.716  Default.
501.717  Consolidation of proceedings.
501.718  Conduct and order of hearings.
501.719  Ex parte communications.
501.720  Separation of functions.
501.721  Hearings to be public.
501.722  Prehearing conferences.
501.723  Prehearing disclosures; methods to discover additional matter.
501.724  Documents that may be withheld.
501.725  Confidential treatment of information in certain filings.
501.726  Motions.
501.727  Motion for summary disposition.
501.728  Subpoenas.
501.729  Sanctions.
501.730  Depositions upon oral examination.
501.731  Depositions upon written questions.
501.732  Evidence.
501.733  Evidence: confidential information; protective orders.
501.734  Introducing prior sworn statements of witnesses into the 
          record.
501.735  Proposed findings, conclusions and supporting briefs.
501.736  Authority of Administrative Law Judge.
501.737  Adjustments of time, postponements and adjournments.
501.738  Disqualification and withdrawal of Administrative Law Judge.
501.739  Record in proceedings before Administrative Law Judge; 
          retention of documents; copies.
501.740  Decision of Administrative Law Judge.
501.741  Review of decision or ruling.
501.742  Secretary's designee's consideration of decisions by 
          Administrative Law Judge.
501.743  Briefs filed with the Secretary's designee.
501.744  Record before the Secretary's designee.
501.745  Orders and decisions: signature, date and public availability.
501.746  Referral to United States Department of Justice; administrative 
          collection measures.
501.747  Procedures on remand of decisions.

                          Subpart E_Procedures

501.801  Licensing.
501.802  Decisions.
501.803  Amendment, modification, or revocation.
501.804  Rulemaking.
501.805  Rules governing availability of information.
501.806  Procedures for unblocking funds believed to have been blocked 
          due to mistaken identity.
501.807  Procedures governing delisting from the Specially Designated 
          Nationals and Blocked Persons List.
501.808  License application and other procedures applicable to economic 
          sanctions programs.

                    Subpart F_Paperwork Reduction Act

501.901  Paperwork Reduction Act notice.

Appendix A to Part 501--Economic Sanctions Enforcement Guidelines

    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,

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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.

    Source: 62 FR 45101, Aug. 25, 1997, unless otherwise noted.



     Subpart A_Relation of This Part to Other Parts in This Chapter



Sec. 501.101  Relation of this part to other parts in this chapter.

    This part sets forth standard reporting and recordkeeping 
requirements and license application and other procedures governing 
transactions regulated pursuant to other parts codified in this chapter, 
as well as to economic sanctions programs for which implementation and 
administration are delegated to the Office of Foreign Assets Control. 
Substantive prohibitions and policies particular to each economic 
sanctions program are not contained in this part but are set forth in 
the particular part of this chapter dedicated to that program, or, in 
the case of economic sanctions programs not yet implemented in 
regulations, in the applicable executive order or other authority. 
License application procedures and reporting requirements set forth in 
this part govern transactions undertaken pursuant to general or specific 
licenses. The criteria for general and specific licenses pertaining to a 
particular economic sanctions program are set forth in subpart E of the 
individual parts in this chapter. Statements of licensing policy 
contained in subpart E of the individual parts in this chapter, however, 
may contain additional information collection provisions that require 
production of specified documentation unique to a given general license 
or statement of licensing policy.

[62 FR 52494, Oct. 8, 1997]



                          Subpart B_Definitions



Sec. 501.301  Definitions.

    Definitions of terms used in this part are found in subpart C of the 
part within this chapter applicable to the relevant application, record, 
report, procedure or transaction. In the case of economic sanctions 
programs for which implementation and administration are delegated to 
the Office of Foreign Assets Control but for which regulations have not 
yet been issued, the definitions of terms in this part are governed by 
definitions contained in the implementing statute or Executive order.



                            Subpart C_Reports



Sec. 501.601  Records and recordkeeping requirements.

    Except as otherwise provided, every person engaging in any 
transaction subject to the provisions of this chapter shall keep a full 
and accurate record of each such transaction engaged in, regardless of 
whether such transaction is effected pursuant to license or otherwise, 
and such record shall be available for examination for at least 5 years 
after the date of such transaction. Except as otherwise provided, every 
person holding property blocked pursuant to the provisions of this 
chapter or funds transfers retained pursuant to Sec. 596.504(b) of this 
chapter shall keep a full and accurate record of such property, and such 
record shall be available for examination for the period of time that 
such property is blocked and for at least 5 years after the date such 
property is unblocked.

    Note: See subpart F of part 597 for the relationship between this 
section and part 597.

[62 FR 45101, Aug. 25, 1997, as amended at 62 FR 52494, Oct. 8, 1997]



Sec. 501.602  Reports to be furnished on demand.

    Every person is required to furnish under oath, in the form of 
reports or otherwise, from time to time and at any time as may be 
required by the Director, Office of Foreign Assets Control, complete 
information relative to any transaction, regardless of whether such 
transaction is effected pursuant to license or otherwise, subject to the 
provisions of this chapter or relative to any property in which any 
foreign country or any national thereof has any interest of any nature 
whatsoever, direct or indirect. The Director may require that such 
reports include the production of any books of account, contracts, 
letters or other papers connected with any such transaction or property, 
in the custody or control of

[[Page 9]]

the persons required to make such reports. Reports with respect to 
transactions may be required either before or after such transactions 
are completed. Except as provided in parts 596 and 597, the Director 
may, through any person or agency, conduct investigations, hold 
hearings, administer oaths, examine witnesses, receive evidence, take 
depositions, and require by subpoena the attendance and testimony of 
witnesses and the production of all books, papers, and documents 
relating to any matter under investigation, regardless of whether any 
report has been required or filed in connection therewith.

    Note: See subpart F of part 597 for the relationship between this 
section and part 597.

[62 FR 45101, Aug. 25, 1997, as amended at 62 FR 52494, Oct. 8, 1997]



Sec. 501.603  Reports on blocked property.

    (a) Who must report--(1) Holders of blocked property. Any person, 
including a financial institution, holding property blocked pursuant to 
this chapter must report. The requirement includes financial 
institutions that receive and block payments or transfers. This 
requirement is mandatory and applies to all U.S. persons (or persons 
subject to U.S. jurisdiction in the case of parts 500 and 515 of this 
chapter) who have in their possession or control any property or 
interests in property blocked pursuant to this chapter.
    (2) Primary responsibility to report. A report may be filed on 
behalf of a holder of blocked property by an attorney, agent, or other 
person. Primary responsibility for reporting blocked property, however, 
rests with the actual holder of the property, or the person exercising 
control over property located outside the United States, with the 
following exceptions: primary responsibility for reporting any trust 
assets rest with the trustee; and primary responsibility for reporting 
real property rests with any U.S. co-owner, legal representative, agent, 
or property manager in the United States. No person is excused from 
filing a report by reason of the fact that another person has submitted 
a report with regard to the same property, except upon actual knowledge 
of the report filed by such other person. Reports filed are regarded as 
privileged and confidential.
    (3) Financial institutions. For purposes of this section, the term 
``financial institution'' shall include a banking institution, domestic 
bank, United States depository institution, financial institution, or 
U.S. financial institution, as those terms are defined in the applicable 
part of this chapter.
    (b) What must be reported--(1) Initial reports--(i) When reports are 
due. Reports are required to be filed within 10 business days from the 
date that property becomes blocked. This reporting requirement includes 
payments or transfers that are received and blocked by financial 
institutions.
    (ii) Contents of reports. Initial reports on blocked property shall 
describe the owner or account party, the property, its location, any 
existing or new account number or similar reference necessary to 
identify the property, actual or estimated value and the date it was 
blocked, and shall include the name and address of the holder, along 
with the name and telephone number of a contact person from whom 
compliance information can be obtained. If the report is filed by a 
financial institution and involves the receipt of a payment or transfer 
of funds which are blocked by the financial institution, the report 
shall also include a photocopy of the payment or transfer instructions 
received and shall confirm that the payment has been deposited into a 
new or existing blocked account which is labeled as such and is 
established in the name of, or contains a means of clearly identifying 
the interest of, the individual or entity subject to blocking pursuant 
to the requirements of this chapter.
    (2) Annual reports--(i) When reports are due. A comprehensive report 
on all blocked property held as of June 30 of the current year shall be 
filed annually by September 30. The first annual report is due September 
30, 1997.
    (ii) Contents of reports. Annual reports shall be filed using Form 
TDF 90-22.50, Annual Report of Blocked Property. Copies of Form TDF 90-
22.50 may be obtained directly from the Office of Foreign Assets Control 
by downloading the form from the OFAC Reporting and License Application 
Forms page on

[[Page 10]]

OFAC's Web site (https://www.treasury.gov/resource-center/sanctions/
Pages/forms-index.aspx). A copy of reports filed using form TDF 90-22.50 
or in alternative formats must be retained for the reporter's records.
    (c) Reports on retained funds pursuant to Sec. 596.504(b) of this 
chapter. The reporting requirements set forth in this section are 
applicable to any financial institution retaining funds pursuant to 
Sec. 596.504(b) of this chapter, except that the account name shall 
reflect the name of the person whose interest required retention of the 
funds.
    (d) Where to report. All reports must be filed with the Office of 
Foreign Assets Control, Compliance Programs Division, U.S. Treasury 
Department, 1500 Pennsylvania Avenue NW.--Annex, Washington, DC 20220.

    Note: See subpart F of part 597 for the relationship between this 
section and part 597.

[62 FR 45101, Aug. 25, 1997, as amended at 62 FR 52495, Oct. 8, 1997; 81 
FR 76863, Nov. 4, 2016]



Sec. 501.604  Reports by U.S. financial institutions on rejected funds
transfers.

    (a) Who must report. Any financial institution that rejects a funds 
transfer where the funds are not blocked under the provisions of this 
chapter, but where processing the transfer would nonetheless violate, or 
facilitate an underlying transaction that is prohibited under, other 
provisions contained in this chapter, must report. For purposes of this 
section, the term ``financial institution'' shall include a banking 
institution, depository institution or United States depository 
institution, domestic bank, financial institution or U.S. financial 
institution, as those terms are defined in the applicable part of this 
chapter.
    (b) Rejected transfers. Examples of transactions involving rejected 
funds transfers include funds transfer instructions:
    (1) Referencing a blocked vessel but where none of the parties or 
financial institutions involved in the transaction is a blocked person;
    (2) Transferring unlicensed gifts or charitable donations from the 
Government of Syria to a U.S. person;
    (3) Crediting Iranian accounts on the books of a U.S. financial 
institution; and
    (4) Making unauthorized transfers from U.S. persons to Iran or the 
Government of Iran.
    (c) When reports are due. Reports are required to be filed within 10 
business days by any financial institution rejecting instructions to 
execute payments or transfers involving underlying transactions 
prohibited by the provisions of this chapter.
    (d) What must be reported. The report shall include the name and 
address of the transferee financial institution, the date of the 
transfer, the amount of the payment transfer, and a photocopy of the 
payment or transfer instructions received, and shall state the basis for 
the rejection of the transfer instructions. The report shall also 
provide the name and telephone number of a contact person at the 
transferee financial institution from whom compliance information may be 
obtained.
    (e) Where to report. Reports must be filed with the Office of 
Foreign Assets Control, Compliance Programs Division, U.S. Treasury 
Department, 1500 Pennsylvania Avenue NW.--Annex, Washington, DC 20220.

[62 FR 45101, Aug. 25, 1997, as amended 70 FR 34061, June 13, 2005; 81 
FR 43073, July 1, 2016]



Sec. 501.605  Reports on litigation, arbitration, and dispute
resolution proceedings.

    (a) U.S. persons (or persons subject to the jurisdiction of the 
United States in the case of parts 500 and 515 of this chapter) 
participating in litigation, arbitration, or other binding alternative 
dispute resolution proceedings in the United States on behalf of or 
against persons whose property or interests in property are blocked or 
whose funds have been retained pursuant to Sec. 596.504(b) of this 
chapter, or when the outcome of any proceeding may affect blocked 
property or retained funds, must:
    (1) Provide notice of such proceedings upon their commencement or 
upon submission or receipt of documents bringing the proceedings within 
the terms of the introductory text to this paragraph (a);

[[Page 11]]

    (2) Submit copies of all pleadings, motions, memoranda, exhibits, 
stipulations, correspondence, and proposed orders or judgments 
(including any proposed final judgment or default judgment) submitted to 
the court or other adjudicatory body, and all orders, decisions, 
opinions, or memoranda issued by the court, to the Chief Counsel, Office 
of Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Avenue, NW.--Annex, Washington, DC 20220, within 10 days of 
filing, submission or issuance. This paragraph (a)(2) shall not apply to 
discovery requests or responses, documents filed under seal, or requests 
for procedural action not seeking action dispositive of the proceedings 
(such as requests for extension of time to file); and
    (3) Report by immediate facsimile transmission to the Chief Counsel, 
Office of Foreign Assets Control, at facsimile number 202/622-1911, the 
scheduling of any hearing or status conference in the proceedings 
whenever it appears that the court or other adjudicatory body may issue 
an order or judgment in the proceedings (including a final judgment or 
default judgment) or is considering or may decide any pending request 
dispositive of the merits of the proceedings or of any claim raised in 
the proceedings.
    (b) The reporting requirements of paragraph (a) of this section do 
not apply to proceedings to which the Office of Foreign Assets Control 
is a party.
    (c) Persons initiating proceedings subject to the reporting 
requirements of this section must notify the court or other adjudicatory 
body of the restrictions set forth under the applicable part in this 
chapter governing the transfer of blocked property or funds retained 
pursuant to Sec. 596.504(b) of this chapter, including the prohibition 
on any unlicensed attachment, judgment, decree, lien, execution, 
garnishment or other judicial process with respect to any property in 
which, on or after the applicable effective date, there existed an 
interest of any person whose property and property interests were 
subject to blocking pursuant to this chapter or were subject to 
retention pursuant to Sec. 596.504(b) of this chapter.



Sec. 501.606  Reporting and recordkeeping requirements applicable
to economic sanctions programs.

    The reporting and recordkeeping requirements set forth in this 
subpart are applicable to economic sanctions programs for which 
implementation and administration have been delegated to the Office of 
Foreign Assets Control.



          Subpart D_Trading With the Enemy Act (TWEA) Penalties

    Source: 68 FR 53642, Sept. 11, 2003, unless otherwise noted.



Sec. 501.700  Applicability.

    This subpart is applicable only to those parts of chapter V 
promulgated pursuant to the TWEA, which include parts 500, 505, and 515.



Sec. 501.701  Penalties.

    (a) Attention is directed to section 16 of the TWEA, as adjusted 
pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), which provides that:
    (1) Persons who willfully violate any provision of TWEA or any 
license, rule, or regulation issued thereunder, and persons who 
willfully violate, neglect, or refuse to comply with any order of the 
President issued in compliance with the provisions of TWEA shall, upon 
conviction, be fined not more than $1,000,000 or, if an individual, be 
fined not more than $100,000 or imprisoned for not more than 10 years, 
or both; and an officer, director, or agent of any corporation who 
knowingly participates in such violation shall, upon conviction, be 
fined not more than $100,000 or imprisoned for not more than 10 years, 
or both.

    Note to paragraph (a)(1): As of January 15, 2017, TWEA provides for 
a maximum civil penalty not to exceed $85,236.

    (2) Any property, funds, securities, papers, or other articles or 
documents, or any vessel, together with its tackle, apparel, furniture, 
and equipment, concerned in a violation of TWEA may upon conviction be 
forfeited to the United States Government.

[[Page 12]]

    (3) The Secretary of the Treasury may impose a civil penalty of not 
more than $85,236 per violation on any person who violates any license, 
order, or regulation issued under TWEA.

    Note to paragraph (a)(3): The current civil penalty cap may be 
adjusted for inflation pursuant to the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 
note).

    (4) Any property, funds, securities, papers, or other articles or 
documents, or any vessel, together with its tackle, apparel, furniture, 
and equipment, that is the subject of a violation subject to a civil 
penalty issued pursuant to TWEA shall, at the discretion of the 
Secretary of the Treasury, be forfeited to the United States Government.
    (b) The criminal penalties provided in TWEA are subject to increase 
pursuant to 18 U.S.C. 3571 which, when read in conjunction with section 
16 of TWEA, provides that persons convicted of violating TWEA may be 
fined up to the greater of either $250,000 for individuals and 
$1,000,000 for organizations or twice the pecuniary gain or loss from 
the violation.
    (c) Attention is directed to 18 U.S.C. 1001, which provides that 
whoever, in any matter within the jurisdiction of any department or 
agency of the United States, knowingly and willfully falsifies, conceals 
or covers up by any trick, scheme, or device a material fact, or makes 
any false, fictitious or fraudulent statements or representations, or 
makes or uses any false writing or document knowing the same to contain 
any false, fictitious or fraudulent statement or entry, shall be fined 
under title 18, United States Code, or imprisoned not more than 5 years, 
or both.

[68 FR 53642, Sept. 11, 2003, as amended at 68 FR 61361, Oct. 28, 2003; 
81 FR 43073, July 1, 2016; 82 FR 10435, Feb. 10, 2017]



Sec. 501.702  Definitions.

    (a) Chief Counsel means the Chief Counsel (Foreign Assets Control), 
Office of the General Counsel, Department of the Treasury.
    (b) Day means calendar day. In computing any period of time 
prescribed in or allowed by this subpart, the day of the act, event, or 
default from which the designated period of time begins to run shall not 
be included. The last day of the period so computed shall be included 
unless it is a Saturday, Sunday, or Federal legal holiday, in which 
event the period runs until the end of the next day that is not a 
Saturday, Sunday, or Federal legal holiday. Intermediate Saturdays, 
Sundays, and Federal legal holidays shall be excluded from the 
computation when the period of time prescribed or allowed is seven days 
or less, not including any additional time allowed for service by mail. 
If on the day a filing is to be made, weather or other conditions have 
caused the designated filing location to close, the filing deadline 
shall be extended to the end of the next day that the filing location is 
not closed and that is not a Saturday, a Sunday, or a Federal legal 
holiday. If service is made by mail, three days shall be added to the 
prescribed period for response.
    (c) Department means the Department of the Treasury.
    (d) Director means the Director of the Office of Foreign Assets 
Control, Department of the Treasury.
    (e) Ex Parte Communication means any material oral or written 
communication not on the public record concerning the merits of a 
proceeding with respect to which reasonable prior notice to all parties 
is not given, on any material matter or proceeding covered by these 
rules, that takes place between: A party to the proceeding, a party's 
counsel, or any other interested individual; and the Administrative Law 
Judge or Secretary's designee handling that proceeding. A request to 
learn the status of a proceeding does not constitute an ex parte 
communication; and settlement inquiries and discussions do not 
constitute ex parte communications.
    (f) General Counsel means the General Counsel of the U.S. Department 
of the Treasury.
    (g) Order of Settlement means a written order issued by the Director 
terminating a civil penalty action. An Order of Settlement does not 
constitute an agency decision that any violation took place.

[[Page 13]]

    (h) Order Instituting Proceedings means a written order issued by 
the Director to initiate a civil penalty hearing.
    (i) Prepenalty Notice means a written notification from the Director 
informing a respondent of the alleged violation(s) and the respondent's 
right to respond.
    (j) Penalty Notice means a written notification from the Director 
informing a respondent that the Director has made a finding of violation 
and, absent a request for a hearing, will impose a civil monetary 
penalty.
    (k) Proceeding means any agency process initiated by an ``Order 
Instituting Proceedings,'' or by the filing of a petition for review of 
an Administrative Law Judge's decision or ruling.
    (l) Respondent means any individual alleged by the Director to have 
violated a TWEA-based sanctions regulation.
    (m) Secretary's designee means a U.S. Treasury Department official 
delegated responsibility by the Secretary of the Treasury to consider 
petitions for review of Administrative Law Judge decisions made in civil 
penalty hearings conducted pursuant to this subpart.
    (n) Secretary means the Secretary of the Treasury.



Sec. 501.703  Overview of civil penalty process and construction 
of rules.

    (a) The administrative process for enforcing TWEA sanctions programs 
proceeds as follows:
    (1) The Director of the Office of Foreign Assets Control will notify 
a suspected violator (hereinafter ``respondent'') of an alleged 
violation by issuing a ``Prepenalty Notice.'' The Prepenalty Notice 
shall describe the alleged violation(s) and include a proposed civil 
penalty amount.
    (2) The respondent will have 60 days from the date the Prepenalty 
Notice is served to make a written presentation either defending against 
the alleged violation or admitting the violation. A respondent who 
admits a violation may offer information 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.
    (3) Absent a settlement agreement or a finding that no violation 
occurred, the Director of the Office of Foreign Assets Control will 
issue a ``Penalty Notice.'' The respondent will have 30 days from the 
date of service to either pay the penalty or request a hearing.
    (4) If the respondent requests a hearing, the Director of the Office 
of Foreign Assets Control will have two options:
    (i) The Director may issue an ``Order Instituting Proceedings'' and 
refer the matter to an Administrative Law Judge for a hearing and 
decision; or
    (ii) The Director may determine to discontinue the penalty action 
based on information presented by the respondent.
    (5) Absent review by a Secretary's designee, the decision of the 
Administrative Law Judge will become the final decision of the 
Department without further proceedings.
    (6) If review is taken by a Secretary's designee, the Secretary's 
designee reaches the final decision of the Department.
    (7) A respondent may seek judicial review of the final decision of 
the Department.
    (b) Construction of rules. The rules contained in this subpart shall 
be construed and administered to promote the just, speedy, and 
inexpensive determination of every action. To the extent there is a 
conflict between the rules contained in this subpart and a procedural 
requirement contained in any statute, the requirement in the statute 
shall control.



Sec. 501.704  Appearance and practice.

    No person shall be represented before the Director in any civil 
penalty matter, or an Administrative Law Judge or the Secretary's 
designee in a civil penalty hearing, under this subpart except as 
provided in this section.
    (a) Representing oneself. In any proceeding, an individual may 
appear on his or her own behalf.
    (b) Representative. Upon written notice to the Director,
    (1) A respondent may be represented by a personal representative. If 
a respondent wishes to be represented by counsel, such counsel must be 
an attorney at law admitted to practice before

[[Page 14]]

the Supreme Court of the United States, the highest court of any State, 
commonwealth, possession, or territory of the United States, or the 
District of Columbia;
    (2) A duly authorized member of a partnership may represent the 
partnership; and
    (3) A bona fide officer, director, or employee of a corporation, 
trust or association may represent the corporation, trust or 
association.
    (c) Director representation. The Director shall be represented by 
members of the Office of Chief Counsel or any other counsel specifically 
assigned by the General Counsel.
    (d) Conflicts of interest--(1) Conflict of interest in 
representation. No individual shall appear as representative for a 
respondent in a proceeding conducted pursuant to this subpart if it 
reasonably appears that such representation may be materially limited by 
that representative's responsibilities to a third person, or by that 
representative's own interests.
    (2) Corrective measures. An Administrative Law Judge may take 
corrective measures at any stage of a proceeding to cure a conflict of 
interest in representation, including the issuance of an order limiting 
the scope of representation or disqualifying an individual from 
appearing in a representative capacity for the duration of the 
proceeding.



Sec. 501.705  Service and filing.

    (a) Service of Prepenalty Notice, Penalty Notice, Acknowledgment of 
Hearing Request and Order Instituting Proceedings. The Director shall 
cause any Prepenalty Notice, Penalty Notice, Acknowledgment of Hearing 
Request, Order Instituting Proceedings, and other related orders and 
decisions, or any amendments or supplements thereto, to be served upon 
the respondent.
    (1) Service on individuals. Service shall be complete:
    (i) Upon the date of mailing by first class (regular) mail to the 
respondent at the respondent's last known address, or to a 
representative authorized to receive service, including qualified 
representatives noticed to the Director pursuant to Sec. 501.704. Absent 
satisfactory evidence in the administrative record to the contrary, the 
Director may presume that the date of mailing is the date stamped on the 
first page of the notice or order. The respondent may rebut the 
presumption that a notice or order was mailed on the stamped mailing 
date only by presenting evidence of the postmark date on the envelope in 
which the notice or order was mailed;
    (ii) Upon personal service on the respondent; or leaving a copy at 
the respondent's place of business with a clerk or other person in 
charge thereof; or leaving a copy at the respondent's dwelling house or 
usual place of abode with a person at least 18 years of age then 
residing therein; or with any other representative authorized by 
appointment or by law to accept or receive service for the respondent, 
including representatives noticed to the Director pursuant to 
Sec. 501.704; and evidenced by a certificate of service signed and dated 
by the individual making such service, stating the method of service and 
the identity of the individual with whom the notice or order was left; 
or
    (iii) Upon proof of service on a respondent who is not resident in 
the United States by any method of service permitted by the law of the 
jurisdiction in which the respondent resides or is located, provided the 
requirements of such foreign law satisfy due process requirements under 
United States law with respect to notice of administrative proceedings, 
and where applicable laws or intergovernmental agreements or 
understandings make the methods of service set forth in paragraphs 
(a)(1)(i) and (ii) of this section inappropriate or ineffective for 
service upon the nonresident respondent.
    (2) Service on corporations and other entities. Service is complete 
upon delivering a copy of the notice or order to a partner, bona fide 
officer, director, managing or general agent, or any other agent 
authorized by appointment or by law to receive such notice, by any 
method specified in paragraph (a)(1) of this section.
    (b) Service of responses to Prepenalty Notice, Penalty Notice, and 
requests for a hearing. A respondent shall serve a response to a 
Prepenalty Notice and any request for a hearing on the Director

[[Page 15]]

through the Chief of Civil Penalties, Office of Foreign Assets Control, 
U.S. Treasury Department, 1500 Pennsylvania Avenue, NW., Washington DC 
20220, with the envelope prominently marked ``Urgent: Part 501 Action.'' 
Service shall be complete upon the date of mailing, as evidenced by the 
post-mark date on the envelope, by first class (regular) mail.
    (c) Service or filing of papers in connection with any hearing by an 
Administrative Law Judge or review by the Secretary's designee--(1) 
Service on the Director and/or each respondent. (i) Each paper, 
including each notice of appearance, written motion, brief, petition for 
review, statement in opposition to petition for review, or other written 
communication, shall be served upon the Director and/or each respondent 
in the proceeding in accordance with paragraph (a) of this section; 
provided, however, that no service shall be required in the case of 
documents that are the subject of a motion seeking a protective order to 
limit or prevent disclosure to another party.
    (ii) Service upon the Director shall be made through the Chief 
Counsel (Foreign Assets Control), U.S. Treasury Department, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220, with the envelope 
prominently marked ``Urgent: Part 501 Proceeding.''
    (iii) Service may be made:
    (A) As provided in paragraph (a) of this section;
    (B) By mailing the papers through the U.S. Postal Service by Express 
Mail; or
    (C) By transmitting the papers by facsimile machine where the 
following conditions are met:
    (1) The persons serving each other by facsimile transmission have 
agreed to do so in a writing, signed by each party, which specifies such 
terms as they deem necessary with respect to facsimile machine telephone 
numbers to be used, hours of facsimile machine operation, the provision 
of non-facsimile original or copy, and any other such matters; and
    (2) Receipt of each document served by facsimile is confirmed by a 
manually signed receipt delivered by facsimile machine or other means 
agreed to by the parties.
    (iv) Service by U.S. Postal Service Express Mail is complete upon 
delivery as evidenced by the sender's receipt. Service by facsimile is 
complete upon confirmation of transmission by delivery of a manually 
signed receipt.
    (2) Filing with the Administrative Law Judge. Unless otherwise 
provided, all briefs, motions, objections, applications or other filings 
made during a proceeding before an Administrative Law Judge, and all 
requests for review by the Secretary's designee, shall be filed with the 
Administrative Law Judge.
    (3) Filing with the Secretary's designee. And all briefs, motions, 
objections, applications or other filings made during a proceeding 
before the Secretary's designee shall be filed with the Secretary's 
designee.
    (4) Certificate of service. Papers filed with an Administrative Law 
Judge or Secretary's designee shall be accompanied by a certificate 
stating the name of each person served, the date of service, the method 
of service and the mailing address or facsimile telephone number to 
which service was made, if not made in person. If the method of service 
to any person is different from the method of service to any other 
person, the certificate shall state why a different means of service was 
used.
    (5) Form of briefs. All briefs containing more than 10 pages shall, 
to the extent applicable, include a table of contents, an alphabetized 
table of cases, a table of statutes, and a table of other authorities 
cited, with references to the pages of the brief wherein they are cited.
    (6) Specifications. All original documents shall be filed with the 
Administrative Law Judge or Secretary's designee, as appropriate. Papers 
filed in connection with any proceeding shall:
    (i) Be on one grade of unglazed white paper measuring 8.5  x  11 
inches, except that, to the extent that the reduction of larger 
documents would render them illegible, such documents may be filed on 
larger paper;
    (ii) Be typewritten or printed in either 10- or 12-point typeface or 
otherwise reproduced by a process that produces permanent and plainly 
legible copies;

[[Page 16]]

    (iii) Include at the head of the paper, or on a title page, the 
title of the proceeding, the name(s) of each respondent, the subject of 
the particular paper or pleading, and the file number assigned to the 
proceeding;
    (iv) Be formatted with all margins at least 1 inch wide;
    (v) Be double-spaced, with single-spaced footnotes and single-spaced 
indented quotations; and
    (vi) Be stapled, clipped or otherwise fastened in the upper left 
corner.
    (7) Signature requirement and effect. All papers must be dated and 
signed by a member of the Office of Chief Counsel, or other counsel 
assigned by the General Counsel to represent the Director, or a 
respondent or respondent's representative, as appropriate. If a filing 
is signed by a respondent's representative it shall state that 
representative's mailing address and telephone number. A respondent who 
represents himself or herself shall sign his or her individual name and 
state his or her address and telephone number on every filing. A witness 
deposition shall be signed by the witness.
    (i) Effect of signature. The signature shall constitute a 
certification that:
    (A) The person signing the filing has read the filing;
    (B) To the best of his or her knowledge, information, and belief, 
formed after reasonable inquiry, the filing is well grounded in fact and 
is warranted by existing law or a good faith argument for the extension, 
modification, or reversal of existing law; and
    (C) The filing is not made for any improper purpose, such as to 
harass or to cause unnecessary delay or needless increase in the cost of 
adjudication.
    (ii) If a filing is not signed, the Administrative Law Judge (or the 
Secretary's designee) shall strike the filing, unless it is signed 
promptly after the omission is called to the attention of the person 
making the filing.
    (d) Service of written orders or decisions issued by the 
Administrative Law Judge or Secretary's designee. Written orders or 
decisions issued by the Administrative Law Judge or the Secretary's 
designee shall be served promptly on each respondent and the Director 
pursuant to any method of service authorized under paragraph (a) of this 
section. Service of such orders or decisions shall be made by the 
Administrative Law Judge or the Secretary's designee, as appropriate.



Sec. 501.706  Prepenalty Notice; issuance by Director.

    (a) When required. If the Director has reason to believe there has 
occurred a violation of any provision of parts 500 or 515 of this 
chapter 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 pursuant to parts 500 or 515 
of this chapter or otherwise under the Trading With the Enemy Act, and 
the Director determines that further civil proceedings are warranted, 
the Director shall issue a Prepenalty Notice. The Prepenalty Notice may 
be issued whether or not another agency has taken any action with 
respect to the matter.
    (b) Contents of notice--(1) Facts of violation. The Prepenalty 
Notice shall describe the alleged violation, specify the laws and 
regulations allegedly violated, and state the amount of the proposed 
monetary penalty.
    (2) Right to respond. The Prepenalty Notice shall inform the 
respondent of respondent's right to make a written presentation within 
the time prescribed in Sec. 501.707 as to why the respondent believes 
there should be no finding of a violation or why, if the respondent 
admits the violation, a monetary penalty should not be imposed or why, 
if imposed, the monetary penalty should be in a lesser amount than 
proposed. The Prepenalty Notice shall also inform the respondent that:
    (i) The act of submitting a written response by the respondent is a 
factor that may result in a lower penalty absent any aggravating 
factors; and
    (ii) If the respondent fails to respond to the Prepenalty Notice 
within the applicable 60-day period set forth in Sec. 501.707, the 
Director may proceed with the issuance of a Penalty Notice.
    (3) Right to request a hearing. The Prepenalty Notice shall inform 
the respondent of respondent's right, if a subsequent Penalty Notice is 
issued, to request an administrative hearing. The Director will not 
consider any request

[[Page 17]]

for an administrative hearing until a Penalty Notice has been issued.



Sec. 501.707  Response to Prepenalty Notice.

    (a) Deadline for response. (1) The respondent shall have 60 days 
after the date of service of the Prepenalty Notice pursuant to 
Sec. 501.705(a) to respond thereto. The response, signed and dated, 
shall be served as provided in Sec. 501.705(b).
    (2) In response to a written request by the respondent, the Director 
may, at his or her discretion for the purpose of conducting settlement 
negotiations or for other valid reasons, grant additional time for a 
respondent to submit a response to the Prepenalty Notice.
    (3) The failure to submit a response within the time period set 
forth in this paragraph (a), including any additional time granted by 
the Director, shall be deemed to be a waiver of the right to respond to 
the Prepenalty Notice.
    (b) Form and contents of response--(1) In general. The response need 
not be in any particular form, but must be typewritten and contain the 
heading ``Response to Prepenalty Notice'' and the Office of Foreign 
Assets Control identification number shown near the top of the 
Prepenalty Notice. It should be responsive to the allegations contained 
therein and set forth the nature of the respondent's admission of the 
violation, or defenses and claims for mitigation, if any.
    (i) The response must admit or deny specifically each separate 
allegation of violation made in the Prepenalty Notice. If the respondent 
is without knowledge as to an allegation, the response shall so state, 
and such statement shall constitute a denial. Any allegation not 
specifically addressed in the response shall be deemed admitted.
    (ii) The response must set forth any additional or new matter or 
arguments the respondent seeks, or shall seek, to use in support of all 
defenses or claims for mitigation. Any defense the respondent wishes to 
assert must be included in the response.
    (iii) The response must accurately state (for each respondent, if 
applicable) the respondent's full name and address for future service, 
together with a current telephone and, if applicable, facsimile machine 
number. If respondent is represented, the representative's full name and 
address, together with telephone and facsimile numbers, may be provided 
instead of service information for the respondent. The respondent or 
respondent's representative of record is responsible for providing 
timely written notice to the Director of any subsequent changes in the 
information provided.
    (iv) Financial disclosure statement requirement. Any respondent who 
asserts financial hardship or an inability to pay a penalty shall 
include with the response a financial disclosure statement setting forth 
in detail the basis for asserting the financial hardship or inability to 
pay a penalty, subject to 18 U.S.C. 1001.
    (2) Settlement. In addition, or as an alternative, to a written 
response to a Prepenalty Notice, the respondent or respondent's 
representative may seek settlement of the alleged violation(s). See 
Sec. 501.710. In the event of settlement prior to the issuance of a 
Penalty Notice, the claim proposed in the Prepenalty Notice will be 
withdrawn and the respondent will not be required to make a written 
response to the Prepenalty Notice. In the event no settlement is 
reached, a written response to the Prepenalty Notice is required 
pursuant to paragraph (c) of this section.



Sec. 501.708  Director's finding of no penalty warranted.

    If after considering any written response to the Prepenalty Notice 
submitted pursuant to Sec. 501.707 and any other relevant facts, the 
Director determines that there was no violation or that the violation 
does not warrant the imposition of a civil monetary penalty, the 
Director promptly shall notify the respondent in writing of that 
determination and that no civil monetary penalty pursuant to this 
subpart will be imposed.



Sec. 501.709  Penalty notice.

    (a) If, after considering any written response to the Prepenalty 
Notice, and any other relevant facts, the Director determines that there 
was a violation by the respondent and that a monetary penalty is 
warranted, the Director

[[Page 18]]

promptly shall issue a Penalty Notice informing the respondent that, 
absent a timely request for an administrative hearing, the Director will 
impose the civil monetary penalty described in the Penalty Notice. The 
Penalty Notice shall inform the respondent:
    (1) Of the respondent's right to submit a written request for an 
administrative hearing not later than 30 days after the date of service 
of the Penalty Notice;
    (2) That in the absence of a timely request for a hearing, the 
issuance of the Penalty Notice constitutes final agency action;
    (3) That, absent a timely request for a hearing, payment (or 
arrangement with the Financial Management Service of the Department for 
installment payment) of the assessed penalty must be made not later than 
30 days after the date of service of the Penalty Notice; and
    (4) That absent a timely request for a hearing, the respondent must 
furnish respondent's taxpayer identification number pursuant to 31 
U.S.C. 7701 and that the Director intends to use such information for 
the purposes of collecting and reporting on any delinquent penalty 
amount in the event of a failure to pay the penalty imposed.



Sec. 501.710  Settlement.

    (a) Availability. Either the Director or any respondent may, at any 
time during the administrative civil penalty process described in this 
subpart, propose an offer of settlement. The amount accepted in 
settlement may be less than the civil penalty that might be imposed in 
the event of a formal determination of violation. Upon mutual agreement 
by the Director and a respondent on the terms of a settlement, the 
Director shall issue an Order of Settlement.
    (b) Procedure--(1) Prior to issuance of Penalty Notice. Any offer of 
settlement made by a respondent prior to the issuance of a Penalty 
Notice shall be submitted, in writing, to the Chief of Civil Penalties, 
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220.
    (2) After issuance of Penalty Notice. Any offer of settlement made 
by a respondent after issuance of a Penalty Notice shall state that it 
is made pursuant to this section; shall recite or incorporate as a part 
of the offer the provisions of paragraphs (b)(5)(ii) and (b)(6) of this 
section; shall be signed by the respondent making the offer, and not 
only by his or her representative; and shall be submitted to the Chief 
Counsel.
    (3) Extensions of time. The submission of any settlement offer does 
not provide a basis for adjourning or otherwise delaying all or any 
portion of the administrative civil penalty process.
    (i) Prior to issuance of Order Instituting Proceedings. Any 
respondent (or potential respondent in the case of a pending Prepenalty 
Notice) may request, in writing, that the Director withhold issuance of 
any such notice, or grant an extension of time to respond to any such 
Notice, for a period not to exceed 60 days for the exclusive purpose of 
effecting settlement. The Director may grant any such request, in 
writing, under terms and conditions within his or her discretion.
    (ii) After issuance of Order Instituting Proceedings. Upon mutual 
agreement of the Director and a respondent, the Administrative Law Judge 
may grant an extension of time, for a period not to exceed 60 days, for 
the exclusive purpose of effecting settlement.
    (4) Views of Administrative Law Judge. Where an Administrative Law 
Judge is assigned to a proceeding, the Director or the respondent may 
request that the Administrative Law Judge express his or her views 
regarding the appropriateness of the offer of settlement. A request for 
the Administrative Law Judge to express his or her views on an offer of 
settlement or otherwise to participate in a settlement conference 
constitutes a waiver by the party making the request of any right to 
claim bias or prejudgment by the Administrative Law Judge based on the 
views expressed.
    (5) Waivers. (i) By submitting an offer of settlement, a respondent 
making the offer waives, subject to acceptance of the offer:
    (A) All hearings pursuant to section 16 of the Trading with the 
Enemy Act (50 U.S.C. App. 16);

[[Page 19]]

    (B) The filing of proposed findings of fact and conclusions of law;
    (C) Proceedings before, and a decision by, an Administrative Law 
Judge;
    (D) All post-hearing procedures; and
    (E) Judicial review by any court.
    (ii) By submitting an offer of settlement the respondent further 
waives:
    (A) Such provisions of this subpart or other requirements of law as 
may be construed to prevent any member of the Director's staff, or 
members of the Office of Chief Counsel or other counsel assigned by the 
General Counsel, from participating in or advising the Director as to 
any order, opinion, finding of fact, or conclusion of law to be entered 
pursuant to the offer; and
    (B) Any right to claim bias or prejudgment by the Director based on 
the consideration of or discussions concerning settlement of all or any 
part of the proceeding.
    (6) If the Director rejects the offer of settlement, the respondent 
shall be so notified in writing and the offer of settlement shall be 
deemed withdrawn. The rejected offer shall not constitute a part of the 
record in any proceeding against the respondent making the offer, 
provided, however, that rejection of an offer of settlement does not 
affect the continued validity of waivers pursuant to paragraph (b)(5) of 
this section with respect to any discussions concerning the rejected 
offer of settlement.
    (7) No settlement offer or proposal, or any subsequent negotiation 
or resolution, is admissible as evidence in any administrative 
proceeding initiated by the Director.



Sec. 501.711  Hearing request.

    (a) Deadline for request. A request for an agency hearing shall be 
served on the Director not later than 30 days after the date of service 
of the Penalty Notice. See Sec. 501.705(b). A respondent may not reserve 
the right to request a hearing after expiration of the 30 calendar day 
period. A request for a hearing that is not made as required by this 
paragraph shall constitute a waiver of the respondent's right to a 
hearing.
    (b) Form and contents of request. The request need not be in any 
particular form, but must be typewritten and contain the heading 
``Request for Agency Hearing''. The request must include the Office of 
Foreign Assets Control identification number shown near the top of the 
Penalty Notice. It should be responsive to the determination contained 
in the Penalty Notice and set forth the nature of the respondent's 
defenses or claims for mitigation, if any.
    (1) The request must admit or deny specifically each separate 
determination of violation made in the Penalty Notice. If the respondent 
is without knowledge as to a determination, the request shall so state, 
and such statement shall constitute a denial. Any determination not 
specifically addressed in the response shall be deemed admitted.
    (2) The request must set forth any additional or new matter or 
arguments the respondent seeks, or shall seek, to use in support of all 
defenses or claims for mitigation. Any defense the respondent wishes to 
assert must be included in the request.
    (3) The request must accurately state, for each respondent (if 
applicable), the respondent's full name and address for future service, 
together with current telephone and, if applicable, a facsimile machine 
number. If respondent is represented, the representative's full name and 
address, together with telephone and facsimile numbers, may be provided 
in lieu of service information for the respondent. The respondent or 
respondent's representative is responsible for providing timely written 
notice to the Director of any subsequent changes in the information 
provided.
    (c) Signature requirement. The respondent or, if represented, the 
respondent's representative, must sign the hearing request.



Sec. 501.712  Acknowledgment of hearing request.

    No later than 60 days after service of any hearing request, the 
Director shall acknowledge receipt and inform a respondent, in writing, 
whether an Order Instituting Proceedings shall be issued.



Sec. 501.713  Order Instituting Proceedings.

    If a respondent makes a timely request for a hearing, the Director 
shall

[[Page 20]]

determine, at his or her option, whether to dismiss the violation(s) set 
forth in the Penalty Notice or to issue an Order Instituting Proceedings 
to initiate the hearing process. The Order shall be served on the 
respondent(s) as provided in Sec. 501.705(c)(1). The Director may, in 
his or her discretion, withdraw an Order Instituting Proceedings at any 
time prior to the issuance of a decision by the Administrative Law 
Judge.
    (a) Content of Order. The Order Instituting Proceedings shall:
    (1) Be prepared by the Office of the Chief Counsel or other counsel 
assigned by the General Counsel and based on information provided by the 
Director;
    (2) State the legal authority under which the hearing is to be held;
    (3) Contain a short and plain statement of the alleged violation(s) 
to be considered and determined (including the matters of fact and law 
asserted) in such detail as will permit a specific response thereto;
    (4) State the amount of the penalty sought in the proceeding; and
    (5) Be signed by the Director.
    (b) Combining penalty actions. The Director may combine claims 
contained in two or more Penalty Notices involving the same respondent, 
and for which hearings have been requested, into a single Order 
Instituting Proceedings.
    (c) Amendment to Order Instituting Proceedings. Upon motion by the 
Director, the Administrative Law Judge may, at any time prior to 
issuance of a decision, permit the Director to amend an Order 
Instituting Proceedings to include new matters of fact or law that are 
within the scope of the original Order Instituting Proceedings.



Sec. 501.714  Answer to Order Instituting Proceedings.

    (a) When required. Not later than 45 days after service of the Order 
Instituting Proceedings, the respondent shall file, with the 
Administrative Law Judge and the Office of Chief Counsel, an answer to 
each of the allegations contained therein. If the Order Instituting 
Proceedings is amended, the Administrative Law Judge may require that an 
amended answer be filed and, if such an answer is required, shall 
specify a date for the filing thereof.
    (b) Contents; effect of failure to deny. Unless otherwise directed 
by the Administrative Law Judge, an answer shall specifically admit, 
deny, or state that the respondent does not have, and is unable to 
obtain, sufficient information to admit or deny each allegation in the 
Order Instituting Proceedings. When a respondent intends to deny only a 
part of an allegation, the respondent shall specify so much of it as is 
true and shall deny only the remainder. A statement of lack of 
information shall have the effect of a denial. A defense of res 
judicata, statute of limitations or any other matter constituting an 
affirmative defense shall be asserted in the answer. Any allegation not 
specifically addressed in the answer shall be deemed admitted.
    (c) Motion for more definite statement. A respondent may file with 
an answer a motion for a more definite statement of specified matters of 
fact or law to be considered or determined. Such motion shall state the 
respects in which, and the reasons why, each such matter of fact or law 
should be required to be made more definite. If the motion is granted, 
the order granting such motion shall set the periods for filing such a 
statement and any answer thereto.
    (d) Amendments. A respondent may amend its answer at any time by 
written consent of the Director or with permission of the Administrative 
Law Judge. Permission shall be freely granted when justice so requires.
    (e) Failure to file answer: default. If a respondent fails to file 
an answer required by this subpart within the time prescribed, such 
respondent may be deemed in default pursuant to Sec. 501.716(a). A party 
may make a motion to set aside a default pursuant to Sec. 501.726(e).



Sec. 501.715  Notice of Hearing.

    (a) If the Director issues an Order Instituting Proceedings, the 
respondent shall receive not less than 45 days notice of the time and 
place of the hearing.
    (b) Time and place of hearing. All hearings shall be held in the 
Washington, DC metropolitan area unless, based on extraordinary reasons, 
otherwise mutually agreed by the respondent and the Director. The time 
for any

[[Page 21]]

hearing shall be fixed with due regard for the public interest and the 
convenience and necessity of the parties or their representatives. 
Requests to change the time of a hearing may be submitted to the 
Administrative Law Judge, who may modify the hearing date(s) and/or 
time(s) and place. All requests for a change in the date and time and/or 
place of a hearing must be received by the Administrative Law Judge and 
served upon the parties no later than 15 days before the scheduled 
hearing date.
    (c) Failure to appear at hearings: default. Any respondent named in 
an order instituting proceedings as a person against whom findings may 
be made or penalties imposed who fails to appear (in person or through a 
representative) at a hearing of which he or she has been duly notified 
may be deemed to be in default pursuant to Sec. 501.716(a). Without 
further proceedings or notice to the respondent, the Administrative Law 
Judge may enter a finding that the right to a hearing was waived, and 
the Penalty Notice shall constitute final agency action as provided in 
Sec. 501.709(a)(2). A respondent may make a motion to set aside a 
default pursuant to Sec. 501.726(e).



Sec. 501.716  Default.

    (a) A party to a proceeding may be deemed to be in default and the 
Administrative Law Judge (or the Secretary's designee during review 
proceedings) may determine the proceeding against that party upon 
consideration of the record if that party fails:
    (1) To appear, in person or through a representative, at any hearing 
or conference of which the party has been notified;
    (2) To answer, to respond to a dispositive motion within the time 
provided, or otherwise to prosecute or defend the proceeding; or
    (3) To cure a deficient filing within the time specified by the 
Administrative Law Judge (or the Secretary's designee) pursuant to 
Sec. 501.729(b).
    (b) In deciding whether to determine the proceedings against a party 
deemed to be in default, the Administrative Law Judge shall consider the 
record of the proceedings (including the Order Instituting Proceedings) 
and shall construe contested matters of fact and law against the party 
deemed to be in default.
    (c) For information and procedures pertaining to a motion to set 
aside a default, see Sec. 501.726(e).



Sec. 501.717  Consolidation of proceedings.

    By order of the Administrative Law Judge, proceedings involving 
common questions of law and fact may be consolidated for hearing of any 
or all the matters at issue in such proceedings. The Administrative Law 
Judge may make such orders concerning the conduct of such proceedings as 
he or she deems appropriate to avoid unnecessary cost or delay. 
Consolidation shall not prejudice any rights under this subpart and 
shall not affect the right of any party to raise issues that could have 
been raised if consolidation had not occurred.



Sec. 501.718  Conduct and order of hearings.

    All hearings shall be conducted in a fair, impartial, expeditious 
and orderly manner. Each party has the right to present its case or 
defense by oral and documentary evidence and to conduct such cross 
examination as may be required for full disclosure of the relevant 
facts. The Director shall present his or her case-in-chief first. The 
Director shall be the first party to present an opening statement and a 
closing statement and may make a rebuttal statement after the 
respondent's closing statement.



Sec. 501.719  Ex parte communications.

    (a) Prohibition. (1) From the time the Director issues an Order 
Instituting Proceedings until the date of final decision, no party, 
interested person, or representative thereof shall knowingly make or 
cause to be made an ex parte communication.
    (2) Except to the extent required for the disposition of ex parte 
communication matters as authorized by law, the Secretary's designee and 
the Administrative Law Judge presiding over any proceeding may not:
    (i) Consult a person or party on an issue, unless on notice and 
opportunity for all parties to participate; or

[[Page 22]]

    (ii) Be responsible to or subject to the supervision, direction of, 
or evaluation by, an employee engaged in the performance of 
investigative or prosecutorial functions for the Department.
    (b) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the Administrative Law Judge or the 
Secretary's designee, the Administrative Law Judge or the Secretary's 
designee, as appropriate, shall cause all of such written communication 
(or, if the communication is oral, a memorandum stating the substance of 
the communication) to be placed on the record of the proceeding and 
served on all parties. A party may, not later than 10 days after the 
date of service, file a response thereto and may recommend that the 
person making the prohibited communication be sanctioned pursuant to 
paragraph (c) of this section.
    (c) Sanctions. Any party to the proceeding, a party's 
representative, or any other interested individual, who makes a 
prohibited ex parte communication, or who encourages or solicits another 
to make any such communication, may be subject to any appropriate 
sanction or sanctions imposed by the Administrative Law Judge or the 
Secretary's designee, as appropriate, for good cause shown, including, 
but not limited to, exclusion from the hearing and an adverse ruling on 
the issue that is the subject of the prohibited communication.



Sec. 501.720  Separation of functions.

    Any officer or employee engaged in the performance of investigative 
or prosecutorial functions for the Department in a proceeding as defined 
in Sec. 501.702 may not, in that proceeding or one that is factually 
related, participate or advise in the decision pursuant to Section 557 
of the Administrative Procedure Act, 5 U.S.C. 557, except as a witness 
or counsel in the proceeding.



Sec. 501.721  Hearings to be public.

    All hearings, except hearings on applications for confidential 
treatment filed pursuant to Sec. 501.725(b), shall be public unless 
otherwise ordered by the Administrative Law Judge or the Secretary's 
designee, as appropriate, on his or her own motion or the motion of a 
party.



Sec. 501.722  Prehearing conferences.

    (a) Purposes of conferences. The purposes of prehearing conferences 
include, but are not limited to:
    (1) Expediting the disposition of the proceeding;
    (2) Establishing early and continuing control of the proceeding by 
the Administrative Law Judge; and
    (3) Improving the quality of the hearing through more thorough 
preparation.
    (b) Procedure. On his or her own motion or at the request of a 
party, the Administrative Law Judge may direct a representative or any 
party to attend one or more prehearing conferences. Such conferences may 
be held with or without the Administrative Law Judge present as the 
Administrative Law Judge deems appropriate. Where such a conference is 
held outside the presence of the Administrative Law Judge, the 
Administrative Law Judge shall be advised promptly by the parties of any 
agreements reached. Such conferences also may be held with one or more 
persons participating by telephone or other remote means.
    (c) Subjects to be discussed. At a prehearing conference 
consideration may be given and action taken with respect to the 
following:
    (1) Simplification and clarification of the issues;
    (2) Exchange of witness and exhibit lists and copies of exhibits;
    (3) Admissions of fact and stipulations concerning the contents, 
authenticity, or admissibility into evidence of documents;
    (4) Matters of which official notice may be taken;
    (5) The schedule for exchanging prehearing motions or briefs, if 
any;
    (6) The method of service for papers;
    (7) Summary disposition of any or all issues;
    (8) Settlement of any or all issues;
    (9) Determination of hearing dates (when the Administrative Law 
Judge is present);
    (10) Amendments to the Order Instituting Proceedings or answers 
thereto;

[[Page 23]]

    (11) Production of documents as set forth in Sec. 501.723, and 
prehearing production of documents in response to subpoenas duces tecum 
as set forth in Sec. 501.728; and
    (12) Such other matters as may aid in the orderly and expeditious 
disposition of the proceeding.
    (d) Timing of conferences. Unless the Administrative Law Judge 
orders otherwise, an initial prehearing conference shall be held not 
later than 14 days after service of an answer. A final conference, if 
any, should be held as close to the start of the hearing as reasonable 
under the circumstances.
    (e) Prehearing orders. At or following the conclusion of any 
conference held pursuant to this rule, the Administrative Law Judge 
shall enter written rulings or orders that recite the agreement(s) 
reached and any procedural determinations made by the Administrative Law 
Judge.
    (f) Failure to appear: default. A respondent who fails to appear, in 
person or through a representative, at a prehearing conference of which 
he or she has been duly notified may be deemed in default pursuant to 
Sec. 501.716(a). A respondent may make a motion to set aside a default 
pursuant to Sec. 501.726(e).



Sec. 501.723  Prehearing disclosures; methods to discover additional
matter.

    (a) Initial disclosures. (1) Except to the extent otherwise 
stipulated or directed by order of the Administrative Law Judge, a party 
shall, without awaiting a discovery request, provide to the opposing 
party:
    (i) The name and, if known, the address and telephone number of each 
individual likely to have discoverable information that the disclosing 
party may use to support its claims or defenses, unless solely for 
impeachment of a witness appearing in person or by deposition, 
identifying the subjects of the information; and
    (ii) A copy, or a description by category and location, of all 
documents, data compilations, and tangible things that are in the 
possession, custody, or control of the party and that the disclosing 
party may use to support its claims or defenses, unless solely for 
impeachment of a witness appearing in person or by deposition;
    (2) The disclosures described in paragraph (a)(1)(i) of this section 
shall be made not later than 30 days after the issuance of an Order 
Instituting Proceedings, unless a different time is set by stipulation 
or by order of the Administrative Law Judge.
    (b) Prehearing disclosures. (1) In addition to the disclosures 
required by paragraph (a) of this section, a party must provide to the 
opposing party, and promptly file with the Administrative Law Judge, the 
following information regarding the evidence that it may present at 
hearing for any purpose other than solely for impeachment of a witness 
appearing in person or by deposition:
    (i) An outline or narrative summary of its case or defense (the 
Order Instituting Proceedings will usually satisfy this requirement for 
the Director and the answer thereto will usually satisfy this 
requirement for the respondent);
    (ii) The legal theories upon which it will rely;
    (iii) Copies and a list of documents or exhibits that it intends to 
introduce at the hearing; and
    (iv) A list identifying each witness who will testify on its behalf, 
including the witness's name, occupation, address, phone number, and a 
brief summary of the expected testimony.
    (2) Unless otherwise directed by the Administrative Law Judge, the 
disclosures required by paragraph (b)(1) of this section shall be made 
not later than 30 days before the date of the hearing.
    (c) Disclosure of expert testimony. A party who intends to call an 
expert witness shall submit, in addition to the information required by 
paragraph (b)(1)(iv) of this section, a statement of the expert's 
qualifications, a list of other proceedings in which the expert has 
given expert testimony, and a list of publications authored or co-
authored by the expert.
    (d) Form of disclosures. Unless the Administrative Law Judge orders 
otherwise, all disclosures under paragraphs (a) through (c) of this 
section shall be made in writing, signed, and served as provided in 
Sec. 501.705.

[[Page 24]]

    (e) Methods to discover additional matter. Parties may obtain 
discovery by one or more of the following methods: Depositions of 
witnesses upon oral examination or written questions; written 
interrogatories to another party; production of documents or other 
evidence for inspection; and requests for admission. All depositions of 
Federal employees must take place in Washington, DC, at the Department 
of the Treasury or at the location where the Federal employee to be 
deposed performs his or her duties, whichever the Federal employee's 
supervisor or the Office of Chief Counsel shall deem appropriate. All 
depositions shall be held at a date and time agreed by the Office of 
Chief Counsel and the respondent or respondent's representative, and for 
an agreed length of time.
    (f) Discovery scope and limits. Unless otherwise limited by order of 
the Administrative Law Judge in accordance with paragraph (f)(2) of this 
section, the scope of discovery is as follows:
    (1) In general. The availability of information and documents 
through discovery is subject to the assertion of privileges available to 
the parties and witnesses. Privileges available to the Director and the 
Department include exemptions afforded pursuant to the Freedom of 
Information Act (5 U.S.C. 552(b)(1) through (9)) and the Privacy Act (5 
U.S.C. 552a). Parties may obtain discovery regarding any matter, not 
privileged, that is relevant to the merits of the pending action, 
including the existence, description, nature, custody, condition, and 
location of any books, documents, or other tangible things and the 
identity and location of any persons having knowledge of any 
discoverable matter. For good cause, the Administrative Law Judge may 
order discovery of any matter relevant to the subject matter involved in 
the proceeding. Relevant information need not be admissible at the 
hearing if the discovery appears reasonably calculated to lead to the 
discovery of admissible evidence.
    (2) Limitations. The Administrative Law Judge may issue any order 
that justice requires to ensure that discovery requests are not 
unreasonable, oppressive, excessive in scope or unduly burdensome, 
including an order to show cause why a particular discovery request is 
justified upon motion of the objecting party. The frequency or extent of 
use of the discovery methods otherwise permitted under this section may 
be limited by the Administrative Law Judge if he or she determines that:
    (i) The discovery sought is unreasonably cumulative or duplicative, 
or is obtainable from some other source that is more convenient, less 
burdensome, or less expensive;
    (ii) The party seeking discovery has had ample opportunity by 
discovery in the action to obtain the information sought; or
    (iii) The burden or expense of the proposed discovery outweighs its 
likely benefit, taking into account the needs of the hearing, the 
importance of the issues at stake, and the importance of the proposed 
discovery in resolving the issues.
    (3) Interrogatories. Respondent's interrogatories shall be served 
upon the Office of the Chief Counsel not later than 30 days after 
issuance of the Order Instituting Proceedings. The Director's 
interrogatories shall be served by the later of 30 days after the 
receipt of service of respondent's interrogatories or 40 days after 
issuance of the Order Instituting Proceedings if no interrogatories are 
filed by respondent. Parties shall respond to interrogatories not later 
than 30 days after the date interrogatories are received. 
Interrogatories shall be limited to 20 questions only. Each subpart, 
section, or other designation of a part of a question shall be counted 
as one complete question in computing the permitted 20 question total. 
Where more than 20 questions are served upon a party, the receiving 
party may determine which of the 20 questions the receiving party shall 
answer. The limitation on the number of questions in an interrogatory 
may be waived by the Administrative Law Judge.
    (4) Privileged matter. Privileged documents are not discoverable. 
Privileges include, but are not limited to, the attorney-client 
privilege, attorney work-product privilege, any government's or 
government agency's deliberative-process or classified information 
privilege, including materials classified pursuant

[[Page 25]]

to Executive Order 12958 (3 CFR, 1995 Comp., p. 333) and any future 
Executive orders that may be issued relating to the treatment of 
national security information, and all materials and information 
exempted from release to the public pursuant to the Privacy Act (5 
U.S.C. 552a) or the Freedom of Information Act (5 U.S.C. 552(b)(1) 
through (9)).
    (g) Updating discovery. A party who has made an initial disclosure 
under paragraph (a) of this section or responded to a request for 
discovery with a disclosure or response is under a duty to supplement or 
correct the disclosure or response to include information thereafter 
acquired whenever:
    (1) The party learns that in some material respect the information 
disclosed is incomplete or incorrect, if the additional or corrective 
information has not otherwise been made known to the other party during 
the discovery process or in writing; or
    (2) Ordered by the Administrative Law Judge. The Administrative Law 
Judge may impose sanctions for failure to supplement or correct 
discovery.
    (h) Time limits. All discovery, including all responses to discovery 
requests, shall be completed not later than 20 days prior to the date 
scheduled for the commencement of the hearing, unless the Administrative 
Law Judge finds on the record that good cause exists to grant additional 
time to complete discovery.
    (i) Effect of failure to comply. No witness may testify and no 
document or exhibit may be introduced at the hearing if such witness, 
document, or exhibit is not listed in the prehearing submissions 
pursuant to paragraphs (b) and (c) of this section, except for good 
cause shown.



Sec. 501.724  Documents that may be withheld.

    (a) Notwithstanding Sec. 501.723(f), the Director or respondent may 
withhold a document if:
    (1) The document is privileged;
    (2) The document would disclose the identity of a confidential 
source; or
    (3) The Administrative Law Judge grants leave to withhold a document 
or category of documents as not relevant to the subject matter of the 
proceeding or otherwise, for good cause shown.
    (b) Nothing in paragraph (a) of this section authorizes the Director 
to withhold documents that contain material exculpatory evidence.
    (c) Withheld document list. The Director and respondent shall 
provide the Administrative Law Judge, for review, a list of documents 
withheld pursuant to paragraphs (a)(1)-(3) of this section. The 
Administrative Law Judge shall determine whether any such document 
should be made available for inspection and copying.



Sec. 501.725  Confidential treatment of information in certain filings.

    (a) Filing document under seal. (1) The Director may file any 
document or any part of a document under seal and/or seek a protective 
order concerning any document if disclosure of the document would be 
inconsistent with the protection of the public interest or if justice 
requires protection of any person, including a source or a party, from 
annoyance, threat, oppression, or undue burden or expense, or the 
disclosure of the information would be, or might reasonably lead to a 
disclosure, contrary to Executive Order 12958, as amended by Executive 
Order 13292, or other Executive orders concerning disclosure of 
information, Department regulations, or the Privacy Act, or information 
exempt from release under the Freedom of Information Act. The 
Administrative Law Judge shall allow placement of any such document 
under seal and/or grant a protective order upon a showing that the 
disclosure would be inconsistent with any such statute or Executive 
order, or that the harm resulting from disclosure would outweigh the 
benefits of disclosure.
    (2) A respondent may file any document or any part of a document 
under seal and/or seek a protective order to limit such document from 
disclosure to other parties or to the public. The Administrative Law 
Judge shall allow placement of any document under seal and/or grant a 
protective order upon a showing that the harm resulting from disclosure 
would outweigh the benefits of disclosure.
    (3) The Administrative Law Judge shall safeguard the security and 
integrity of any documents under seal or

[[Page 26]]

protective order and shall take all appropriate steps to preserve the 
confidentiality of such documents or any parts thereof, including 
closing a hearing or portions of a hearing to the public. Release of any 
information under seal or to the extent inconsistent with a protective 
order, in any form or manner, is subject to the sanctions and the 
exercise of the authorities as are provided with respect to ex parte 
communications under Sec. 501.719.
    (4) If the Administrative Law Judge denies placement of any document 
under seal or under protective order, any party, and any person whose 
document or material is at issue, may obtain interlocutory review by the 
Secretary's designee. In such cases the Administrative Law Judge shall 
not release or expose any of the records or documents in question to the 
public or to any person for a period of 20 days from the date of the 
Administrative Law Judge's ruling, in order to permit a party the 
opportunity either to withdraw the records and documents or obtain 
interlocutory review by the Secretary's designee and an order that the 
records be placed under seal or a protective order.
    (5) Upon settlement, final decision, or motion to the Administrative 
Law Judge for good cause shown, all materials (including all copies) 
under seal or protective order shall be returned to the submitting 
parties, except when it may be necessary to retain a record until any 
judicial process is completed.
    (6)(i) Written notice of each request for release of documents or 
materials under seal or subject to a protective order shall be given to 
the parties at least 20 days prior to any permitted release or prior to 
any access not specifically authorized under a protective order. A copy 
of each request for information, including the name, address, and 
telephone number of the requester, shall be provided to the parties.
    (ii) Each request for access to protected material shall include the 
names, addresses, and telephone numbers of all persons on whose behalf 
the requester seeks access to protected information. The Administrative 
Law Judge may impose sanctions as provided under Sec. 501.729 for 
failure to provide this information.
    (b) Application. An application for a protective order or to place 
under seal shall be filed with the Administrative Law Judge. The 
application shall be accompanied by a sealed copy of the materials as to 
which confidential treatment is sought.
    (1) Procedure for supplying additional information. The person 
making the application may be required to furnish in writing additional 
information with respect to the grounds for objection to public 
disclosure. Failure to supply the information so requested within 14 
days from the date of receipt of a notice of the information required 
shall be deemed a waiver of the objection to public disclosure of that 
portion of the information to which the additional information relates, 
unless the Administrative Law Judge shall otherwise order for good cause 
shown at or before the expiration of such 14-day period.
    (2) Confidentiality of materials pending final decision. Pending the 
determination of the application for confidential treatment, 
transcripts, non-final orders including an initial decision, if any, and 
other materials in connection with the application shall be placed under 
seal; shall be for the confidential use only of the Administrative Law 
Judge, the Secretary's designee, the applicant, the Director, and any 
other respondent and representative; and shall be made available to the 
public only in accordance with orders of the Administrative Law Judge or 
the Secretary's designee.
    (3) Public availability of orders. Any final order of the 
Administrative Law Judge or the Secretary's designee denying or 
sustaining an application for confidential treatment shall be made 
public. Any prior findings or opinions relating to an application for 
confidential treatment under this section shall be made public at such 
time as the material as to which confidentiality was requested is made 
public.



Sec. 501.726  Motions.

    (a) Generally. Unless made during a hearing or conference, a motion 
shall be in writing, shall state with particularity the grounds 
therefor, shall set forth the relief or order sought, and shall be 
accompanied by a written brief of the points and authorities relied

[[Page 27]]

upon. Motions by a respondent must be filed with the Administrative Law 
Judge and served upon the Director through the Office of Chief Counsel 
and with any other party respondent or respondent's representative, 
unless otherwise directed by the Administrative Law Judge. Motions by 
the Director must be filed with the Administrative Law Judge and served 
upon each party respondent or respondent's representative. All written 
motions must be served in accordance with, and otherwise meet the 
requirements of, Sec. 501.705. The Administrative Law Judge may order 
that an oral motion be submitted in writing. No oral argument shall be 
heard on any motion unless the Administrative Law Judge otherwise 
directs.
    (b) Opposing and reply briefs. Except as provided in 
Sec. 501.741(e), briefs in opposition to a motion shall be filed not 
later than 15 days after service of the motion. Reply briefs shall be 
filed not later than 3 days after service of the opposition. The failure 
of a party to oppose a written motion or an oral motion made on the 
record shall be deemed a waiver of objection by that party to the entry 
of an order substantially in the form of any proposed order accompanying 
the motion.
    (c) Dilatory motions. Frivolous, dilatory, or repetitive motions are 
prohibited. The filing of such motions may form the basis for sanctions.
    (d) Length limitation. Except as otherwise ordered by the 
Administrative Law Judge, a brief in support of, or in opposition to, a 
motion shall not exceed 15 pages, exclusive of pages containing any 
table of contents, table of authorities, or addendum.
    (e) A motion to set aside a default shall be made within a 
reasonable time as determined by the Administrative Law Judge, state the 
reasons for the failure to appear or defend, and, if applicable, specify 
the nature of the proposed defense in the proceeding. In order to 
prevent injustice and on such conditions as may be appropriate, the 
Administrative Law Judge, at any time prior to the filing of his or her 
decision, or the Secretary's designee, at any time during the review 
process, may for good cause shown set aside a default.



Sec. 501.727  Motion for summary disposition.

    (a) At any time after a respondent's answer has been filed, the 
respondent or the Director may make a motion for summary disposition of 
any or all allegations contained in the Order Instituting Proceedings. 
If the Director has not completed presentation of his or her case-in-
chief, a motion for summary disposition shall be made only with 
permission of the Administrative Law Judge. The facts of the pleadings 
of the party against whom the motion is made shall be taken as true, 
except as modified by stipulations or admissions made by that party, by 
uncontested affidavits, or by facts officially noticed pursuant to 
Sec. 501.732(b).
    (b) Decision on motion. The Administrative Law Judge may promptly 
decide the motion for summary disposition or may defer decision on the 
motion. The Administrative Law Judge shall issue an order granting a 
motion for summary disposition if the record shows there is no genuine 
issue with regard to any material fact and the party making the motion 
is entitled to a summary disposition as a matter of law.
    (c) A motion for summary disposition must be accompanied by a 
statement of the material facts as to which the moving party contends 
there is no genuine issue. Such motion must be supported by documentary 
evidence, which may take the form of admissions in pleadings, 
stipulations, depositions, transcripts, affidavits, and any other 
evidentiary materials that the moving party contends support its 
position. The motion must also be accompanied by a brief containing the 
points and authorities in support of the moving party's arguments. Any 
party opposing a motion for summary disposition must file a statement 
setting forth those material facts as to which such party contends a 
genuine dispute exists. The opposition must be supported by evidence of 
the same type as that submitted with the motion for summary disposition 
and a brief containing the points and authorities in support of the 
contention that summary disposition would be inappropriate.

[[Page 28]]



Sec. 501.728  Subpoenas.

    (a) Availability; procedure. In connection with any hearing before 
an Administrative Law Judge, either the respondent or the Director may 
request the issuance of subpoenas requiring the attendance and testimony 
of witnesses at the designated time and place of hearing, and subpoenas 
requiring the production of documentary or other tangible evidence 
returnable at a designated time and place. Unless made on the record at 
a hearing, requests for issuance of a subpoena shall be made in writing 
and served on each party pursuant to Sec. 501.705.
    (b) Standards for issuance. If it appears to the Administrative Law 
Judge that a subpoena sought may be unreasonable, oppressive, excessive 
in scope, or unduly burdensome, he or she may, in his or her discretion, 
as a condition precedent to the issuance of the subpoena, require the 
person seeking the subpoena to show the general relevance and reasonable 
scope of the testimony or other evidence sought. If after consideration 
of all the circumstances, the Administrative Law Judge determines that 
the subpoena or any of its terms is unreasonable, oppressive, excessive 
in scope, or unduly burdensome, he or she may refuse to issue the 
subpoena, or issue a modified subpoena as fairness requires. In making 
the foregoing determination, the Administrative Law Judge may inquire of 
the other participants whether they will stipulate to the facts sought 
to be proved.
    (c) Service. Service of a subpoena shall be made pursuant to the 
provisions of Sec. 501.705.
    (d) Application to quash or modify--(1) Procedure. Any person to 
whom a subpoena is directed or who is an owner, creator or the subject 
of the documents or materials that are to be produced pursuant to a 
subpoena may, prior to the time specified therein for compliance, but 
not later than 15 days after the date of service of such subpoena, 
request that the subpoena be quashed or modified. Such request shall be 
made by application filed with the Administrative Law Judge and served 
on all parties pursuant to Sec. 501.705. The party on whose behalf the 
subpoena was issued may, not later than 5 days after service of the 
application, file an opposition to the application.
    (2) Standards governing application to quash or modify. If the 
Administrative Law Judge determines that compliance with the subpoena 
would be unreasonable, oppressive or unduly burdensome, the 
Administrative Law Judge may quash or modify the subpoena, or may order 
return of the subpoena only upon specified conditions. These conditions 
may include, but are not limited to, a requirement that the party on 
whose behalf the subpoena was issued shall make reasonable compensation 
to the person to whom the subpoena was addressed for the cost of copying 
or transporting evidence to the place for return of the subpoena.
    (e) Witness fees and mileage. Witnesses summoned to appear at a 
proceeding shall be paid the same fees and mileage that are paid to 
witnesses in the courts of the United States, and witnesses whose 
depositions are taken and the persons taking the same shall severally be 
entitled to the same fees as are paid for like services in the courts of 
the United States. Witness fees and mileage shall be paid by the party 
at whose instance the witnesses appear.



Sec. 501.729  Sanctions.

    (a) Contemptuous conduct--(1) Subject to exclusion or suspension. 
Contemptuous conduct by any person before an Administrative Law Judge or 
the Secretary's designee during any proceeding, including any 
conference, shall be grounds for the Administrative Law Judge or the 
Secretary's designee to:
    (i) Exclude that person from such hearing or conference, or any 
portion thereof; and/or
    (ii) If a representative, summarily suspend that person from 
representing others in the proceeding in which such conduct occurred for 
the duration, or any portion, of the proceeding.
    (2) Adjournment. Upon motion by a party represented by a 
representative subject to an order of exclusion or suspension, an 
adjournment shall be granted to allow the retention of a new 
representative. In determining the length of an adjournment, the 
Administrative Law Judge or the Secretary's designee shall consider, in 
addition to

[[Page 29]]

the factors set forth in Sec. 501.737, the availability of another 
representative for the party or, if the representative was a counsel, of 
other members of a suspended counsel's firm.
    (b) Deficient filings; leave to cure deficiencies. The 
Administrative Law Judge, or the Secretary's designee in the case of a 
request for review, may in his or her discretion, reject, in whole or in 
part, any filing that fails to comply with any requirements of this 
subpart or of any order issued in the proceeding in which the filing was 
made. Any such filings shall not be part of the record. The 
Administrative Law Judge or the Secretary's designee may direct a party 
to cure any deficiencies and to resubmit the filing within a fixed time 
period.
    (c) Failure to make required filing or to cure deficient filing. The 
Administrative Law Judge (or the Secretary's designee during review 
proceedings) may enter a default pursuant to Sec. 501.716, dismiss the 
case, decide the particular matter at issue against that person, or 
prohibit the introduction of evidence or exclude testimony concerning 
that matter if a person fails:
    (1) To make a filing required under this subpart; or
    (2) To cure a deficient filing within the time specified by the 
Administrative Law Judge or the Secretary's designee pursuant to 
paragraph (b) of this section.
    (d) Failure to make required filing or to cure deficient filing in 
the case of a request for review. The Secretary's designee, in any case 
of a request for review, may decide the issue against that person, or 
prohibit the introduction of evidence or exclude testimony concerning 
that matter if a person fails:
    (1) To make a filing required under this subpart; or
    (2) To cure a deficient filing within the time specified by the 
Secretary's designee pursuant to paragraph (b) of this section.



Sec. 501.730  Depositions upon oral examination.

    (a) Procedure. Any party desiring to take the testimony of a witness 
by deposition shall make a written motion setting forth the reasons why 
such deposition should be taken including the specific reasons why the 
party believes the witness may be unable to attend or testify at the 
hearing; the name and address of the prospective witness; the matters 
concerning which the prospective witness is expected to be questioned; 
and the proposed time and place for the taking of the deposition.
    (b) Required finding when ordering a deposition. In the discretion 
of the Administrative Law Judge, an order for deposition may be issued 
upon a finding that the prospective witness will likely give testimony 
material to the proceeding, that it is likely the prospective witness 
will be unable to attend or testify at the hearing because of age, 
sickness, infirmity, imprisonment or other disability, and that the 
taking of a deposition will serve the interests of justice.
    (c) Contents of order. An order for deposition shall designate by 
name a deposition officer. The designated officer may be the 
Administrative Law Judge or any other person authorized to administer 
oaths by the laws of the United States or of the place where the 
deposition is to be held. An order for deposition also shall state:
    (1) The name of the witness whose deposition is to be taken;
    (2) The scope of the testimony to be taken;
    (3) The time and place of the deposition;
    (4) The manner of recording, preserving and filing the deposition; 
and
    (5) The number of copies, if any, of the deposition and exhibits to 
be filed upon completion of the deposition.
    (d) Procedure at depositions. A witness whose testimony is taken by 
deposition shall swear or affirm before any questions are put to him or 
her. Examination and cross-examination of witnesses may proceed as 
permitted at a hearing. A witness being deposed may have counsel or a 
representative present during the deposition.
    (e) Objections to questions or evidence. Objections to questions or 
evidence shall be in short form, stating the grounds of objection relied 
upon. Objections to questions or evidence shall be noted by the 
deposition officer upon the deposition, but a deposition officer (other 
than an Administrative Law

[[Page 30]]

Judge) shall not have the power to decide on the competency, materiality 
or relevance of evidence. Failure to object to questions or evidence 
before the deposition officer shall not be deemed a waiver unless the 
ground of the objection is one that might have been obviated or removed 
if presented at that time.
    (f) Filing of depositions. The questions asked and all answers or 
objections shall be recorded or transcribed verbatim, and a transcript 
shall be prepared by the deposition officer, or under his or her 
direction. The transcript shall be subscribed by the witness and 
certified by the deposition officer. The original deposition transcript 
and exhibits shall be filed with the Administrative Law Judge. A copy of 
the deposition transcript and exhibits shall be served on the opposing 
party or parties. The cost of the transcript (including copies) shall be 
paid by the party requesting the deposition.



Sec. 501.731  Depositions upon written questions.

    (a) Availability. Depositions may be taken and submitted on written 
questions upon motion of any party. The motion shall include the 
information specified in Sec. 501.730(a). A decision on the motion shall 
be governed by Sec. 501.730(b).
    (b) Procedure. Written questions shall be filed with the motion. Not 
later than 10 days after service of the motion and written questions, 
any party may file objections to such written questions and any party 
may file cross-questions. When a deposition is taken pursuant to this 
section no persons other than the witness, representative or counsel to 
the witness, the deposition officer, and, if the deposition officer does 
not act as reporter, a reporter, shall be present at the examination of 
the witness. No party shall be present or represented unless otherwise 
permitted by order. The deposition officer shall propound the questions 
and cross-questions to the witness in the order submitted.
    (c) Additional requirements. The order for deposition, filing of the 
deposition, form of the deposition and use of the deposition in the 
record shall be governed by paragraphs (b) through (g) of Sec. 501.730, 
except that no cross-examination shall be made.



Sec. 501.732  Evidence.

    The applicable evidentiary standard for proceedings under this 
subpart is proof by a preponderance of reliable, probative, and 
substantial evidence. The Administrative Law Judge shall admit any 
relevant and material oral, documentary, or demonstrative evidence. The 
Federal Rules of Evidence do not apply, by their own force, to 
proceedings under this subpart, but shall be employed as general 
guidelines. The fact that evidence submitted by a party is hearsay goes 
only to the weight of the evidence and does not affect its 
admissibility.
    (a) Objections and offers of proof--(1) Objections. Objections to 
the admission or exclusion of evidence must be made on the record and 
shall be in short form, stating the grounds relied upon. Exceptions to 
any ruling thereon by the Administrative Law Judge need not be noted at 
the time of the ruling. Such exceptions will be deemed waived on review 
by the Secretary's designee, however, unless raised:
    (i) Pursuant to interlocutory review in accordance with 
Sec. 501.741;
    (ii) In a proposed finding or conclusion filed pursuant to 
Sec. 501.738; or
    (iii) In a petition for the Secretary's designee's review of an 
Administrative Law Judge's decision filed in accordance with 
Sec. 501.741.
    (2) Offers of proof. Whenever evidence is excluded from the record, 
the party offering such evidence may make an offer of proof, which shall 
be included in the record. Excluded material shall be retained pursuant 
to Sec. 501.739(b).
    (b) Official notice. An Administrative Law Judge or Secretary's 
designee may take official notice of any material fact that might be 
judicially noticed by a district court of the United States, any matter 
in the public official records of the Secretary, or any matter that is 
particularly within the knowledge of the Department as an expert body. 
If official notice is requested or taken of a material fact not 
appearing in the evidence in the record, a party, upon timely request to 
the Administrative Law Judge, shall be afforded an opportunity to 
establish the contrary.

[[Page 31]]

    (c) Stipulations. The parties may, by stipulation, at any stage of 
the proceeding agree upon any pertinent fact in the proceeding. A 
stipulation may be received in evidence and, when accepted by the 
Administrative Law Judge, shall be binding on the parties to the 
stipulation.
    (d) Presentation under oath or affirmation. A witness at a hearing 
for the purpose of taking evidence shall testify under oath or 
affirmation.
    (e) Presentation, rebuttal and cross-examination. A party is 
entitled to present its case or defense by oral or documentary evidence, 
to submit rebuttal evidence, and to conduct such cross-examination as, 
in the discretion of the Administrative Law Judge, may be required for a 
full and true disclosure of the facts.



Sec. 501.733  Evidence: confidential information, protective orders.

    (a) Procedure. In any proceeding as defined in Sec. 501.702, a 
respondent; the Director; any person who is the owner, subject or 
creator of a document subject to subpoena or which may be introduced as 
evidence; or any witness who testifies at a hearing may file a motion 
requesting a protective order to limit from disclosure to other parties 
or to the public documents or testimony containing confidential 
information. The motion should include a general summary or extract of 
the documents without revealing confidential details. If a person seeks 
a protective order against disclosure to other parties as well as the 
public, copies of the documents shall not be served on other parties. 
Unless the documents are unavailable, the person shall file for 
inspection by the Administrative Law Judge a sealed copy of the 
documents as to which the order is sought.
    (b) Basis for issuance. Documents and testimony introduced in a 
public hearing are presumed to be public. A motion for a protective 
order shall be granted only upon a finding that the harm resulting from 
disclosure would outweigh the benefits of disclosure.
    (c) Requests for additional information supporting confidentiality. 
A person seeking a protective order under paragraph (a) of this section 
may be required to furnish in writing additional information with 
respect to the grounds for confidentiality. Failure to supply the 
information so requested not later than 5 days from the date of receipt 
by the person of a notice of the information required shall be deemed a 
waiver of the objection to public disclosure of that portion of the 
documents to which the additional information relates, unless the 
Administrative Law Judge shall otherwise order for good cause shown at 
or before the expiration of such 5-day period.
    (d) Confidentiality of documents pending decision. Pending a 
determination of a motion under this section, the documents as to which 
confidential treatment is sought and any other documents that would 
reveal the confidential information in those documents shall be 
maintained under seal and shall be disclosed only in accordance with 
orders of the Administrative Law Judge. Any order issued in connection 
with a motion under this section shall be made public unless the order 
would disclose information as to which a protective order has been 
granted, in which case that portion of the order that would reveal the 
protected information shall not be made public.



Sec. 501.734  Introducing prior sworn statements of witnesses into
the record.

    (a) At a hearing, any person wishing to introduce a prior, sworn 
statement of a witness who is not a party to the proceeding, that is 
otherwise admissible in the proceeding, may make a motion setting forth 
the reasons therefor. If only part of a statement is offered in 
evidence, the Administrative Law Judge may require that all relevant 
portions of the statement be introduced. If all of a statement is 
offered in evidence, the Administrative Law Judge may require that 
portions not relevant to the proceeding be excluded. A motion to 
introduce a prior sworn statement may be granted if:
    (1) The witness is dead;
    (2) The witness is out of the United States, unless it appears that 
the absence of the witness was procured by the party offering the prior 
sworn statement;

[[Page 32]]

    (3) The witness is unable to attend or testify because of age, 
sickness, infirmity, imprisonment or other disability;
    (4) The party offering the prior sworn statement has been unable to 
procure the attendance of the witness by subpoena; or,
    (5) In the discretion of the Administrative Law Judge, it would be 
desirable, in the interests of justice, to allow the prior sworn 
statement to be used. In making this determination, due regard shall be 
given to the presumption that witnesses will testify orally in an open 
hearing. If the parties have stipulated to accept a prior sworn 
statement in lieu of live testimony, consideration shall also be given 
to the convenience of the parties in avoiding unnecessary expense.



Sec. 501.735  Proposed findings, conclusions and supporting briefs.

    (a) Opportunity to file. Before a decision is issued by the 
Administrative Law Judge, each party shall have an opportunity, 
reasonable in light of all the circumstances, to file in writing 
proposed findings and conclusions.
    (b) Procedure. Proposed findings of fact must be supported by 
citations to specific portions of the record. If successive filings are 
directed, the proposed findings and conclusions of the party assigned to 
file first shall be set forth in serially numbered paragraphs, and any 
counter statement of proposed findings and conclusions shall, in 
addition to any other matter presented, indicate those paragraphs of the 
proposals already filed as to which there is no dispute. A reply brief 
may be filed by the party assigned to file first, or, where simultaneous 
filings are directed, reply briefs may be filed by each party, within 
the period prescribed therefor by the Administrative Law Judge. No 
further briefs may be filed except with permission of the Administrative 
Law Judge.
    (c) Time for filing. In any proceeding in which a decision is to be 
issued:
    (1) At the close of each hearing, the Administrative Law Judge 
shall, by order, after consultation with the parties, prescribe the 
period within which proposed findings and conclusions and supporting 
briefs are to be filed. The party directed to file first shall make its 
initial filing not later than 30 days after the end of the hearing 
unless the Administrative Law Judge, for good cause shown, permits a 
different period and sets forth in the order the reasons why the 
different period is necessary.
    (2) The total period within which all such proposed findings and 
conclusions and supporting briefs and any counter statements of proposed 
findings and conclusions and reply briefs are to be filed shall be no 
longer than 90 days after the close of the hearing unless the 
Administrative Law Judge, for good cause shown, permits a different 
period and sets forth in an order the reasons why the different period 
is necessary.



Sec. 501.736  Authority of Administrative Law Judge.

    The Administrative Law Judge shall have authority to do all things 
necessary and appropriate to discharge his or her duties. No provision 
of these rules shall be construed to limit the powers of the 
Administrative Law Judge provided by the Administrative Procedure Act, 5 
U.S.C. 556, 557. The powers of the Administrative Law Judge include, but 
are not limited to:
    (a) Administering oaths and affirmations;
    (b) Issuing subpoenas authorized by law and revoking, quashing, or 
modifying any such subpoena;
    (c) Receiving relevant evidence and ruling upon the admission of 
evidence and offers of proof;
    (d) Regulating the course of a proceeding and the conduct of the 
parties and their representatives;
    (e) Holding prehearing and other conferences as set forth in 
Sec. 501.726 and requiring the attendance at any such conference of at 
least one representative of each party who has authority to negotiate 
concerning the resolution of issues in controversy;
    (f) Subject to any limitations set forth elsewhere in this subpart, 
considering and ruling on all procedural and other motions;
    (g) Upon notice to all parties, reopening any hearing prior to the 
issuance of a decision;
    (h) Requiring production of records or any information relevant to 
any act

[[Page 33]]

or transaction subject to a hearing under this subpart, and imposing 
sanctions available under Federal Rule of Civil Procedure 37(b)(2) (Fed. 
R. Civ. P. 37(b)(2), 28 U.S.C.) for a party's failure to comply with 
discovery requests;
    (i) Establishing time, place, and manner limitations on the 
attendance of the public and the media for any hearing; and
    (j) Setting fees and expenses for witnesses, including expert 
witnesses.



Sec. 501.737  Adjustments of time, postponements and adjournments.

    (a) Availability. Except as otherwise provided by law, the 
Administrative Law Judge or the Secretary's designee, as appropriate, at 
any time prior to the filing of his or her decision, may, for good cause 
and in the interest of justice, modify any time limit prescribed by this 
subpart and may, consistent with paragraph (b) of this section, postpone 
or adjourn any hearing.
    (b) Limitations on postponements, adjournments and adjustments. A 
hearing shall begin at the time and place ordered, provided that, within 
the limits provided, the Administrative Law Judge or the Secretary's 
designee, as appropriate, may for good cause shown postpone the 
commencement of the hearing or adjourn a convened hearing for a 
reasonable period of time.
    (1) Additional considerations. In considering a motion for 
postponement of the start of a hearing, adjournment once a hearing has 
begun, or extensions of time for filing papers, the Administrative Law 
Judge or the Secretary's designee, as appropriate, shall consider, in 
addition to any other factors:
    (i) The length of the proceeding to date;
    (ii) The number of postponements, adjournments or extensions already 
granted;
    (iii) The stage of the proceedings at the time of the request; and
    (iv) Any other matter as justice may require.
    (2) Time limit. Postponements, adjournments or extensions of time 
for filing papers shall not exceed 21 days unless the Administrative Law 
Judge or the Secretary's designee, as appropriate, states on the record 
or sets forth in a written order the reasons why a longer period of time 
is necessary.



Sec. 501.738  Disqualification and withdrawal of Administrative Law
Judge.

    (a) Notice of disqualification. If at any time an Administrative Law 
Judge or Secretary's designee believes himself or herself to be 
disqualified from considering a matter, the Administrative Law Judge or 
Secretary's designee, as appropriate, shall issue a notice stating that 
he or she is withdrawing from the matter and setting forth the reasons 
therefor.
    (b) Motion for Withdrawal. Any party who has a reasonable, good 
faith basis to believe an Administrative Law Judge or Secretary's 
designee has a personal bias, or is otherwise disqualified from hearing 
a case, may make a motion to the Administrative Law Judge or Secretary's 
designee, as appropriate, that the Administrative Law Judge or 
Secretary's designee withdraw. The motion shall be accompanied by a 
statement subject to 18 U.S.C. 1001 setting forth in detail the facts 
alleged to constitute grounds for disqualification. If the 
Administrative Law Judge or Secretary's designee finds himself or 
herself qualified, he or she shall so rule and shall continue to preside 
over the proceeding.



Sec. 501.739  Record in proceedings before Administrative Law Judge;
retention of documents; copies.

    (a) Recordation. Unless otherwise ordered by the Administrative Law 
Judge, all hearings shall be recorded and a written transcript thereof 
shall be prepared.
    (1) Availability of a transcript. Transcripts of hearings shall be 
available for purchase.
    (2) Transcript correction. Prior to the filing of post-hearing 
briefs or proposed findings and conclusions, or within such earlier time 
as directed by the Administrative Law Judge, a party or witness may make 
a motion to correct the transcript. Proposed corrections of the 
transcript may be submitted to the Administrative Law Judge by 
stipulation pursuant to Sec. 501.732(c), or by motion. Upon notice to 
all parties to the proceeding, the Administrative Law

[[Page 34]]

Judge may, by order, specify corrections to the transcript.
    (b) Contents of the record. The record of each hearing shall consist 
of:
    (1) The Order Instituting Proceedings, Answer to Order Instituting 
Proceedings, Notice of Hearing and any amendments thereto;
    (2) Each application, motion, submission or other paper, and any 
amendments, motions, objections, and exceptions to or regarding them;
    (3) Each stipulation, transcript of testimony, interrogatory, 
deposition, and document or other item admitted into evidence;
    (4) With respect to a request to disqualify an Administrative Law 
Judge or to allow the Administrative Law Judge's withdrawal under 
Sec. 501.738, each affidavit or transcript of testimony taken and the 
decision made in connection with the request;
    (5) All proposed findings and conclusions;
    (6) Each written order issued by the Administrative Law Judge; and
    (7) Any other document or item accepted into the record by the 
Administrative Law Judge.
    (c) Retention of documents not admitted. Any document offered as 
evidence but excluded, and any document marked for identification but 
not offered as an exhibit, shall not be part of the record. The 
Administrative Law Judge shall retain any such document until the later 
of the date the proceeding becomes final, or the date any judicial 
review of the final proceeding is no longer available.
    (d) Substitution of copies. A true copy of a document may be 
substituted for any document in the record or any document retained 
pursuant to paragraph (c) of this section.



Sec. 501.740  Decision of Administrative Law Judge.

    The Administrative Law Judge shall prepare a decision that 
constitutes his or her final disposition of the proceedings.
    (a) Content. (1) The Administrative Law Judge shall determine 
whether or not the respondent has violated any provision of parts 500 
and 515 of this chapter or the provisions of any license, ruling, 
regulation, order, direction or instruction issued by or under the 
authority of the Secretary pursuant to part 500 or 515 of this chapter 
or otherwise under the Trading with the Enemy Act.
    (2) The Administrative Law Judge's decision shall include findings 
and conclusions, and the reasons or basis therefor, as to all the 
material issues of fact, law or discretion presented on the record.
    (3) (i) Upon a finding of violation, the Administrative Law Judge 
shall award an appropriate monetary civil penalty in an amount 
consistent with the Penalty Guidelines published by the Director.
    (ii) Notwithstanding paragraph (a)(3)(i) of this section, the 
Administrative Law Judge:
    (A) Shall provide an opportunity for a respondent to assert his or 
her inability to pay a penalty, or financial hardship, by filing with 
the Administrative Law Judge a financial disclosure statement subject to 
18 U.S.C. 1001 that sets forth in detail the basis for the financial 
hardship or the inability to pay; and
    (B) Shall consider any such filing in determining the appropriate 
monetary civil penalty.
    (b) Administrative Law Judge's decision--(1) Service. The 
Administrative Law Judge shall serve his or her decision on the 
respondent and on the Director through the Office of Chief Counsel, and 
shall file a copy of the decision with the Secretary's designee.
    (2) Filing of report with the Secretary's designee. If the 
respondent or Director files a petition for review pursuant to 
Sec. 501.741, or upon a request from the Secretary's designee, the 
Administrative Law Judge shall file his or her report with the 
Secretary's designee not later than 20 days after service of his or her 
decision on the parties. The report shall consist of the record, 
including the Administrative Law Judge's decision, and any petition from 
the respondent or the Director seeking review.
    (3) Correction of errors. Until the Administrative Law Judge's 
report has been directed for review by the Secretary's designee or, in 
the absence of a direction for review, until the decision

[[Page 35]]

has become a final order, the Administrative Law Judge may correct 
clerical errors and errors arising through oversight or inadvertence in 
decisions, orders, or other parts of the record.
    (c) Administrative Law Judge's decision final unless review 
directed. Unless the Secretary's designee determines to review a 
decision in accordance with Sec. 501.741(a)(1), the decision of the 
Administrative Law Judge shall become the final decision of the 
Department.
    (d) Penalty awarded. The Director is charged with implementing all 
final decisions of the Department and, upon a finding of violation and/
or award of a civil monetary penalty, shall carry out the necessary 
steps to close the action.



Sec. 501.741  Review of decision or ruling.

    (a) Availability. (1)(i) Review of the decision of the 
Administrative Law Judge by the Secretary's designee is not a right. The 
Secretary's designee may, in his or her discretion, review the decision 
of the Administrative Law Judge on the petition of either the respondent 
or the Director, or upon his or her own motion. The Secretary's designee 
shall determine whether to review a decision:
    (A) If a petition for review has been filed by the respondent or the 
Director, not later than 30 days after that date the Administrative Law 
Judge filed his or her report with the Secretary's designee pursuant to 
paragraph (b)(2) of this section; or
    (B) If no petition for review has been filed by the respondent or 
the Director, not later than 40 days after the date the Administrative 
Law Judge filed his or her decision with the Secretary's designee 
pursuant to paragraph (b)(1) of this section.
    (ii) In determining whether to review a decision upon petition of 
the respondent or the Director, the Secretary's designee shall consider 
whether the petition for review makes a reasonable showing that:
    (A) A prejudicial error was committed in the conduct of the 
proceeding; or
    (B) The decision embodies:
    (1) A finding or conclusion of material fact that is clearly 
erroneous;
    (2) A conclusion of law that is erroneous; or
    (3) An exercise of discretion or decision of law or policy that is 
important and that the Secretary's designee should review.
    (2) Interlocutory review of ruling. The Secretary's designee shall 
review any ruling of an Administrative Law Judge involving privileged or 
confidential material that is the subject of a petition for review. See 
Sec. 501.725.
    (b) Filing. Either the respondent or the Director, when adversely 
affected or aggrieved by the decision or ruling of the Administrative 
Law Judge, may seek review by the Secretary's designee by filing a 
petition for review. Any petition for review shall be filed with the 
Administrative Law Judge within 10 days after service of the 
Administrative Law Judge's decision or the issuance of a ruling 
involving privileged or confidential material.
    (c) Contents. The petition shall state why the Secretary's designee 
should review the Administrative Law Judge's decision or ruling, 
including: Whether the Administrative Law Judge's decision or ruling 
raises an important question of law, policy or discretion; whether 
review by the Secretary's designee will resolve a question about which 
the Department's Administrative Law Judges have rendered differing 
opinions; whether the Administrative Law Judge's decision or ruling is 
contrary to law or Department precedent; whether a finding of material 
fact is not supported by a preponderance of the evidence; or whether a 
prejudicial error of procedure or an abuse of discretion was committed. 
A petition should concisely state the portions of the decision or ruling 
for which review is sought. A petition shall not incorporate by 
reference a brief or legal memorandum.
    (d) When filing effective. A petition for review is filed when 
received by the Administrative Law Judge.
    (e) Statements in opposition to petition. Not later than 8 days 
after the filing of a petition for review, either the respondent or the 
Director may file a statement in opposition to a petition. A statement 
in opposition to a petition for review shall be filed in the manner

[[Page 36]]

specified in this section for filing of petitions for review. Statements 
in opposition shall concisely state why the Administrative Law Judge's 
decision or ruling should not be reviewed with respect to each portion 
of the petition to which it is addressed.
    (f) Number of copies. An original and three copies of a petition or 
a statement in opposition to a petition shall be filed with the 
Administrative Law Judge.
    (g) Prerequisite to judicial review. Pursuant to section 704 of the 
Administrative Procedure Act, 5 U.S.C. 704, a petition for review by the 
Secretary's designee of an Administrative Law Judge decision or ruling 
is a prerequisite to the seeking of judicial review of a final order 
entered pursuant to such decision or ruling.



Sec. 501.742  Secretary's designee's consideration of decisions
by Administrative Law Judges.

    (a) Scope of review. The Secretary's designee may affirm, reverse, 
modify, set aside or remand for further proceedings, in whole or in 
part, a decision or ruling by an Administrative Law Judge and may make 
any findings or conclusions that in his or her judgment are proper and 
on the basis of the record and such additional evidence as the 
Secretary's designee may receive in his or her discretion.
    (b) Summary affirmance. The Secretary's designee may summarily 
affirm an Administrative Law Judge's decision or ruling based upon the 
petition for review and any response thereto, without further briefing, 
if he or she finds that no issue raised in the petition for review 
warrants further consideration.



Sec. 501.743  Briefs filed with the Secretary's designee.

    (a) Briefing schedule order. If review of a determination is 
mandated by judicial order or whenever the Secretary's designee reviews 
a decision or ruling, the Secretary's designee shall, unless such review 
results in summary affirmance pursuant to Sec. 501.742(b), issue a 
briefing schedule order directing the parties to file opening briefs and 
specifying particular issues, if any, as to which briefing should be 
limited or directed. Unless otherwise provided, opening briefs shall be 
filed not later than 40 days after the date of the briefing schedule 
order. Opposition briefs shall be filed not later than 30 days after the 
date opening briefs are due. Reply briefs shall be filed not later than 
14 days after the date opposition briefs are due. No briefs in addition 
to those specified in the briefing schedule order may be filed without 
permission of the Secretary's designee. The briefing schedule order 
shall be issued not later than 21 days after the later of:
    (1) The last day permitted for filing a brief in opposition to a 
petition for review pursuant to Sec. 501.741(e); or
    (2) Receipt by the Secretary's designee of the mandate of a court 
with respect to a judicial remand.
    (b) Contents of briefs. Briefs shall be confined to the particular 
matters at issue. Each exception to the findings or conclusions being 
reviewed shall be stated succinctly. Exceptions shall be supported by 
citation to the relevant portions of the record, including references to 
the specific pages relied upon, and by concise argument including 
citation of such statutes, decisions and other authorities as may be 
relevant. If the exception relates to the admission or exclusion of 
evidence, the substance of the evidence admitted or excluded shall be 
set forth in the brief, in an appendix thereto, or by citation to the 
record. If the exception relates to interlocutory review, there is no 
requirement to reference pages of the transcript. Reply briefs shall be 
confined to matters in opposition briefs of other parties.
    (c) Length limitation. Opening and opposition briefs shall not 
exceed 30 pages and reply briefs shall not exceed 20 pages, exclusive of 
pages containing the table of contents, table of authorities, and any 
addendum, except with permission of the Secretary's designee.



Sec. 501.744  Record before the Secretary's designee.

    The Secretary's designee shall determine each matter on the basis of 
the record and such additional evidence as the Secretary's designee may 
receive in his or her discretion. In any case of interlocutory review, 
the Administrative Law Judge shall direct that a

[[Page 37]]

transcript of the relevant proceedings be prepared and forwarded to the 
Secretary's designee.
    (a) Contents of the record. In proceedings for final decision before 
the Secretary's designee the record shall consist of:
    (1) All items that are part of the record in accordance with 
Sec. 501.739;
    (2) Any petitions for review, cross-petitions or oppositions;
    (3) All briefs, motions, submissions and other papers filed on 
appeal or review; and
    (4) Any other material of which the Secretary's designee may take 
administrative notice.
    (b) Review of documents not admitted. Any document offered in 
evidence but excluded by the Administrative Law Judge and any document 
marked for identification but not offered as an exhibit shall not be 
considered a part of the record before the Secretary's designee on 
review but shall be transmitted to the Secretary's designee if he or she 
so requests. In the event that the Secretary's designee does not request 
the document, the Administrative Law Judge shall retain the document not 
admitted into the record until the later of:
    (1) The date upon which the Secretary's designee's order becomes 
final; or
    (2) The conclusion of any judicial review of that order.



Sec. 501.745  Orders and decisions: signature, date and public
availability.

    (a) Signature required. All orders and decisions of the 
Administrative Law Judge or Secretary's designee shall be signed.
    (b) Date of entry of orders. The date of entry of an order by the 
Administrative Law Judge or Secretary's designee shall be the date the 
order is signed. Such date shall be reflected in the caption of the 
order, or if there is no caption, in the order itself.
    (c) Public availability of orders. (1) In general, any final order 
of the Department shall be made public. Any supporting findings or 
opinions relating to a final order shall be made public at such time as 
the final order is made public.
    (2) Exception. Any final order of the Administrative Law Judge or 
Secretary's designee pertaining to an application for confidential 
treatment shall only be available to the public in accordance with 
Sec. 501.725(b)(3).



Sec. 501.746  Referral to United States Department of Justice; 
administrative collection measures.

    In the event that the respondent does not pay any penalty imposed 
pursuant to this part within 30 calendar days of the mailing of the 
written notice of the imposition of the penalty, the matter may be 
referred for administrative collection measures or to the United States 
Department of Justice for appropriate action to recover the penalty in a 
civil suit in a Federal district court.



Sec. 501.747  Procedures on remand of decisions.

    Either an Administrative Law Judge or a Secretary's designee, as 
appropriate, shall reconsider any Department decision on judicial remand 
to the Department. The rules of practice contained in this subpart shall 
apply to all proceedings held on judicial remand.



                          Subpart E_Procedures

    Source: 62 FR 45101, Aug. 25, 1997, unless otherwise noted. 
Redesignated at 68 FR 53642, Sept. 11, 2003.



Sec. 501.801  Licensing.

    (a) General licenses. General licenses have been issued authorizing 
under appropriate terms and conditions certain types of transactions 
which are subject to the prohibitions contained in this chapter. 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. General licenses may also be issued 
authorizing under appropriate terms and conditions certain types of 
transactions which are subject to prohibitions contained in economic 
sanctions programs the implementation and administration of which have 
been delegated to

[[Page 38]]

the Director of the Office of Foreign Assets Control but which are not 
yet codified in this chapter. It is the policy of the Office of Foreign 
Assets Control not to grant applications for specific licenses 
authorizing transactions to which the provisions of an outstanding 
general license are applicable. Persons availing themselves of certain 
general licenses may be required to file reports and statements in 
accordance with the instructions specified in those licenses. Failure to 
file such reports or statements will nullify the authority of the 
general license.
    (b) Specific licenses--(1) General course of procedure. Transactions 
subject to the prohibitions contained in this chapter, or to 
prohibitions the implementation and administration of which have been 
delegated to the Director of the Office of Foreign Assets Control, which 
are not authorized by general license may be effected only under 
specific licenses.
    (2) Applications for specific licenses. Original signed applications 
for specific licenses to engage in any transactions prohibited by or 
pursuant to this chapter or sanctions programs that have been delegated 
to the Director of the Office of Foreign Assets Control for 
implementation and administration must be filed by mail or courier. 
Applications will not be accepted by fax or electronically, unless 
otherwise authorized. Applications may be submitted in letter form with 
the exception of license applications for the unblocking of funds 
transfers. Applications for the unblocking of funds transfers must be 
submitted using TD-F 90-22.54, ``Application for the Release of Blocked 
Funds,'' accompanied by two complete copies of the entire submission. 
The form, which requires information regarding the date of the blocking, 
the financial institutions involved in the transfer, and the beneficiary 
and amount of the transfer, may be obtained from the OFAC Reporting and 
License Application Forms page on OFAC's Web site (https://
www.treasury.gov/resource-center/sanctions/Pages/forms-index.aspx) or 
the Office of Foreign Assets Control, Licensing Division, U.S. 
Department of the Treasury, 1500 Pennsylvania Avenue NW., Freedman's 
Bank Building, Washington, DC 20220. Any person having an interest in a 
transaction or proposed transaction may file an application for a 
license authorizing such transaction.
    (3) Information to be supplied. The applicant must supply all 
information specified by relevant instructions and/or forms, and must 
fully disclose the names of all parties who are concerned with or 
interested in the proposed transaction. If the application is filed by 
an agent, the agent must disclose the name of his principal(s). Such 
documents as may be relevant shall be attached to each application as a 
part of such application, except that documents previously filed with 
the Office of Foreign Assets Control may, where appropriate, be 
incorporated by reference in such application. Applicants are required 
to supply their taxpayer identifying number pursuant to 31 U.S.C. 7701, 
which number may be used for purposes of collecting and reporting on any 
delinquent amounts arising out of the applicant's relationship with the 
United States Government. Applicants may be required to furnish such 
further information as is deemed necessary to a proper determination by 
the Office of Foreign Assets Control. Any applicant or other party in 
interest desiring to present additional information may do so at any 
time before or after decision. Arrangements for oral presentation should 
be made with the Office of Foreign Assets Control.
    (4) Effect of denial. The denial of a license does not preclude the 
reopening of an application or the filing of a further application. The 
applicant or any other party in interest may at any time request 
explanation of the reasons for a denial by correspondence or personal 
interview.
    (5) Reports under specific licenses. As a condition for the issuance 
of any license, the licensee may be required to file reports with 
respect to the transaction covered by the license, in such form and at 
such times and places as may be prescribed in the license or otherwise.
    (6) Issuance of license. Licenses will be issued by the Office of 
Foreign Assets Control acting on behalf of the Secretary of the Treasury 
or licenses may be issued by the Secretary of the Treasury acting 
directly or through

[[Page 39]]

any specifically designated person, agency, or instrumentality.
    (7) Address. License applications, reports, and inquiries should be 
addressed to the appropriate division or individual within the Office of 
Foreign Assets Control, or to its Director, at the following address: 
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Avenue, NW.--Annex, Washington, DC 20220.
    (c) Registration of nongovernmental organizations--(1) Purpose of 
registration. For those parts of this chapter specifically authorizing 
the registration of nongovernmental organizations (``NGOs''), 
registration numbers may be issued on a case-by-case basis to NGOs 
involved in humanitarian or religious activities in countries or 
geographic areas subject to economic sanctions pursuant to this chapter 
V. A registration number authorizes certain transactions by or on behalf 
of the registered NGO otherwise prohibited by the specific part with 
respect to which the registration number is issued, including the 
exportation of goods, services, and funds to the country or geographic 
area subject to such part for the purpose of relieving human suffering. 
The transactions authorized for registered NGOs either will be specified 
by the statement of licensing policy in the part under which the 
registration number is issued or by the Office of Foreign Assets Control 
letter issuing the registration number.
    (2) Application information to be supplied. Applications for 
registration numbers should be submitted to the Compliance Programs 
Division, Office of Foreign Assets Control, U.S. Department of the 
Treasury, 1500 Pennsylvania Avenue, NW., Annex, Washington, DC 20220, or 
by facsimile to (202) 622-2426, and must include:
    (i) The organization's name in English, in the language of origin, 
and any acronym or other names used to identify the organization;
    (ii) Address and phone number of the organization's headquarters 
location;
    (iii) Full name in English, in the language of origin, and any 
acronym or other names used, as well as nationality, citizenship, 
current country of residence, place and date of birth for key staff at 
the organization's headquarters, such as the chairman and board members, 
president, director, etc.;
    (iv) Identification of field offices or partner offices elsewhere, 
including addresses, phone numbers, and organizational names used, as 
well as the identification of the senior officer(s) at these locations, 
including the person's name, position, nationality, citizenship, and 
date of birth (names of individuals and organizations shall be provided 
in English, in the language of origin, and shall include any acronym or 
other names used to identify the individuals or organizations);
    (v) Identification of subcontracting organizations, if any, to the 
extent known or contemplated at the time of the application;
    (vi) Existing sources of income, such as official grants, private 
endowments, commercial activities;
    (vii) Financial institutions that hold deposits on behalf of or 
extend lines of credit to the organization (names of individuals and 
organizations shall be provided in English, in the language of origin, 
and shall include any acronym or other names used to identify the 
individuals or organizations);
    (viii) Independent accounting firms, if employed in the production 
of the organization's financial statements (names of individuals and 
organizations shall be provided in English, in the language of origin, 
and shall include any acronym or other names used to identify the 
individuals or organizations);
    (ix) A detailed description of the organization's humanitarian or 
religious activities and projects in countries or geographic areas 
subject to economic sanctions pursuant to this chapter V;
    (x) Most recent official registry documents, annual reports, and 
annual filings with the pertinent government, as applicable; and
    (xi) Names and addresses of organizations to which the applicant 
currently provides or proposes to provide funding, services or material 
support, to the extent known at the time of the vetting, as applicable.
    (3) Use of registration number. Registered NGOs conducting 
transactions authorized by their registrations to

[[Page 40]]

support their humanitarian or religious activities pursuant to any part 
of this chapter should reference the registration number on all payments 
and funds transfers and on all related documentation, including all 
purchasing, shipping, and financing documents.
    (4) Limitations. Registered NGOs are not authorized to make 
remittances from blocked accounts. Registration numbers are not 
transferable and may be revoked or modified at any time at the 
discretion of the Director, Office of Foreign Assets Control. 
Registration numbers do not excuse compliance with any law or regulation 
administered by the Office of Foreign Assets Control or any other agency 
(including reporting requirements) applicable to the transaction(s) 
herein authorized, nor does it release the Registrant or third parties 
from civil or criminal liability for violation of any law or regulation.
    (5) Prior numbers. Registration numbers already issued remain in 
effect.

[62 FR 45101, Aug. 25, 1997, as amended at 65 FR 10708, Feb. 29, 2000; 
66 FR 2728, Jan. 11, 2001; 77 FR 1864, Jan. 12, 2012; 81 FR 76863, Nov. 
4, 2016]



Sec. 501.802  Decisions.

    The Office of Foreign Assets Control will advise each applicant of 
the decision respecting filed applications. The decision of the Office 
of Foreign Assets Control acting on behalf of the Secretary of the 
Treasury with respect to an application shall constitute final agency 
action.



Sec. 501.803  Amendment, modification, or revocation.

    Except as otherwise provided by law, the provisions of each part of 
this chapter and any rulings, licenses (whether general or specific), 
authorizations, instructions, orders, or forms issued thereunder may be 
amended, modified or revoked at any time.

[63 FR 35809, July 1, 1998]



Sec. 501.804  Rulemaking.

    (a) All rules and other public documents are issued by the Director 
of the Office of Foreign Assets Control. In general, rulemaking by the 
Office of Foreign Assets Control involves foreign affairs functions of 
the United States, and for that reason is exempt from the requirements 
under the Administrative Procedure Act (5 U.S.C. 553) for notice of 
proposed rulemaking, opportunity for public comment, and delay in 
effective date.
    (b) Any interested person may petition the Director of the Office of 
Foreign Assets Control in writing for the issuance, amendment, or repeal 
of any rule.



Sec. 501.805  Rules governing availability of information.

    (a) The records of the Office of Foreign Assets Control which are 
required by the Freedom of Information Act (5 U.S.C. 552) to be made 
available to the public shall be made available in accordance with the 
definitions, procedures, payment of fees, and other provisions of the 
regulations on the Disclosure of Records of the Departmental Offices and 
of other bureaus and offices of the Department of the Treasury issued 
under 5 U.S.C. 552 and published at 31 CFR part 1.

    Note to paragraph Sec. 501.805(a): Records or information obtained 
or created in the implementation of part 598 of this chapter are not 
subject to disclosure under section 552(a)(3) of the Freedom of 
Information Act. See Sec. 598.802 of this chapter.

    (b) The records of the Office of Foreign Assets Control which are 
required by the Privacy Act (5 U.S.C. 552a) to be made available to an 
individual shall be made available in accordance with the definitions, 
procedures, requirements for payment of fees, and other provisions of 
the Regulations on the Disclosure of Records of the Departmental Offices 
and of other bureaus and offices of the Department of the Treasury 
issued under 5 U.S.C. 552a and published at 31 CFR part 1.
    (c) Any form issued for use in connection with this chapter may be 
obtained in person or by writing to the Office of Foreign Assets 
Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue, 
NW.--Annex, Washington, DC 20220, or by calling 202/622-2480.
    (d) Certain Civil Penalties Information. (1) After the conclusion of 
a civil penalties proceeding that results in either

[[Page 41]]

the imposition of a civil monetary penalty or an informal settlement, 
OFAC shall make available to the public certain information on a routine 
basis, not less frequently than monthly, as follows:
    (i) In each such proceeding against an entity, OFAC shall make 
available to the public
    (A) The name and address of the entity involved,
    (B) The sanctions program involved,
    (C) A brief description of the violation or alleged violation,
    (D) A clear indication whether the proceeding resulted in an 
informal settlement or in the imposition of a penalty,
    (E) An indication whether the entity voluntarily disclosed the 
violation or alleged violation to OFAC, and
    (F) The amount of the penalty imposed or the amount of the agreed 
settlement.
    (ii) In such proceedings against individuals, OFAC shall release on 
an aggregate basis
    (A) The number of penalties imposed and informal settlements 
reached,
    (B) The sanctions programs involved,
    (C) A brief description of the violations or alleged violations,
    (D) A clear indication whether the proceedings resulted in informal 
settlements, in the imposition of penalties, or in administrative 
hearing requests pursuant to the Trading With the Enemy Act (TWEA), 50 
U.S.C. 5(b), and
    (E) The amounts of the penalties imposed and the amounts of the 
agreed settlements.
    (2) The medium through which information will be released is OFAC's 
website at http://www.treas.gov/ofac.
    (3) The information made available pursuant to paragraph (d)(1) of 
this section shall not include the following:
    (i) The name of any violator or alleged violator who is an 
individual.
    (ii) Records or information obtained or created in the 
implementation of part 598 of this chapter.
    (4) On a case-by-case basis, OFAC may release additional information 
concerning a particular civil penalties proceeding.

[62 FR 45101, Aug. 25, 1997, as amended at 65 FR 41335, July 5, 2000; 68 
FR 6822, Feb. 11, 2003]



Sec. 501.806  Procedures for unblocking funds believed to have been
blocked due to mistaken identity.

    When a transaction results in the blocking of funds at a financial 
institution pursuant to the applicable regulations of this chapter and a 
party to the transaction believes the funds have been blocked due to 
mistaken identity, that party may seek to have such funds unblocked 
pursuant to the following administrative procedures:
    (a) Any person who is a party to the transaction may request the 
release of funds which the party believes to have been blocked due to 
mistaken identity.
    (b) Requests to release funds which a party believes to have been 
blocked due to mistaken identity must be made in writing and addressed 
to the Office of Foreign Assets Control, Compliance Programs Division, 
1500 Pennsylvania Avenue, NW.--Annex, Washington, DC 20220, or sent by 
facsimile transmission to the Compliance Programs Division at 202/622-
1657.
    (c) The written request to release funds must include the name, 
address, telephone number, and (where available) fax number of the party 
seeking the release of the funds. For individuals, the inclusion of a 
social security number is voluntary but will facilitate resolution of 
the request. For corporations or other entities, the application should 
include its principal place of business, the state of incorporation or 
organization, and the name and telephone number of the appropriate 
person to contact regarding the application.
    (d) A request to release funds should include the following 
information, where known, concerning the transaction:
    (1) The name of the financial institution in which the funds are 
blocked;
    (2) The amount blocked;
    (3) The date of the blocking;
    (4) The identity of the original remitter of the funds and any 
intermediary financial institutions;
    (5) The intended beneficiary of the blocked transfer;
    (6) A description of the underlying transaction including copies of 
related documents (e.g., invoices, bills of lading, promissory notes, 
etc.);

[[Page 42]]

    (7) The nature of the applicant's interest in the funds; and
    (8) A statement of the reasons why the applicant believes the funds 
were blocked due to mistaken identity.
    (e) Upon receipt of the materials required by paragraph (d) of this 
section, OFAC may request additional material from the applicant 
concerning the transaction pursuant to Sec. 501.602.
    (f) Following review of all applicable submissions, the Director of 
the Office of Foreign Assets Control will determine whether to release 
the funds. In the event the Director determines that the funds should be 
released, the Office of Foreign Assets Control will direct the financial 
institution to return the funds to the appropriate party.
    (g) For purposes of this section, the term ``financial institution'' 
shall include a banking institution, depository institution or United 
States depository institution, domestic bank, financial institution or 
U.S. financial institution, as those terms are defined in the applicable 
part of this chapter.

[62 FR 45101, Aug. 25, 1997, as amended at 62 FR 52495, Oct. 8, 1997]



Sec. 501.807  Procedures governing delisting from the Specially 
Designated Nationals and Blocked Persons List.

    A person may seek administrative reconsideration of his, her or its 
designation or that of a vessel as blocked, or assert that the 
circumstances resulting in the designation no longer apply, and thus 
seek to have the designation rescinded pursuant to the following 
administrative procedures:
    (a) A person blocked under the provisions of any part of this 
chapter, including a specially designated national, specially designated 
terrorist, or specially designated narcotics trafficker 
(collectively,``a blocked person''), or a person owning a majority 
interest in a blocked vessel may submit arguments or evidence that the 
person believes establishes that insufficient basis exists for the 
designation. The blocked person also may propose remedial steps on the 
person's part, such as corporate reorganization, resignation of persons 
from positions in a blocked entity, or similar steps, which the person 
believes would negate the basis for designation. A person owning a 
majority interest in a blocked vessel may propose the sale of the 
vessel, with the proceeds to be placed into a blocked interest-bearing 
account after deducting the costs incurred while the vessel was blocked 
and the costs of the sale. This submission must be made in writing and 
addressed to the Director, Office of Foreign Assets Control, U.S. 
Department of the Treasury, 1500 Pennsylvania Avenue, NW.--Annex, 
Washington, DC 20220.
    (b) The information submitted by the blocked person seeking 
unblocking or by a person seeking the unblocking of a vessel will be 
reviewed by the Office of Foreign Assets Control, which may request 
clarifying, corroborating, or other additional information.
    (c) A blocked person seeking unblocking or a person seeking the 
unblocking of a vessel may request a meeting with the Office of Foreign 
Assets Control; however, such meetings are not required, and the office 
may, at its discretion, decline to conduct such meetings prior to 
completing a review pursuant to this section.
    (d) After the Office of Foreign Assets Control has conducted a 
review of the request for reconsideration, it will provide a written 
decision to the blocked person or person seeking the unblocking of a 
vessel.

[64 FR 5614, Feb. 4, 1999]



Sec. 501.808  License application and other procedures applicable
to economic sanctions programs.

    Upon submission to the Office of Management and Budget of an 
amendment to the overall burden hours for the information collections 
imposed under this part, the license application and other procedures 
set forth in this subpart are applicable to economic sanctions programs 
for which implementation and administration have been delegated to the 
Office of Foreign Assets Control.



                    Subpart F_Paperwork Reduction Act

    Source: 62 FR 45101, Aug. 25, 1997, unless otherwise noted. 
Redesignated at 68 FR 53642, Sept. 11, 2003.

[[Page 43]]



Sec. 501.901  Paperwork Reduction Act notice.

    The information collection requirements in subparts C and D have 
been approved by the Office of Management and Budget (``OMB'') under the 
Paperwork Reduction Act (44 U.S.C. 3507(j)) and assigned 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 it displays a 
valid control number assigned by OMB.



 Sec. Appendix A to Part 501--Economic Sanctions Enforcement Guidelines.

    Note: This appendix provides a general framework for the enforcement 
of all economic sanctions programs administered by the Office of Foreign 
Assets Control (OFAC).

                             I. Definitions

    A. Apparent violation means conduct that constitutes an actual or 
possible violation of U.S. economic sanctions laws, including the 
International Emergency Economic Powers Act (IEEPA), the Trading With 
the Enemy Act (TWEA), the Foreign Narcotics Kingpin Designation Act, and 
other statutes administered or enforced by OFAC, as well as Executive 
orders, regulations, orders, directives, or licenses issued pursuant 
thereto.
    B. Applicable schedule amount means:
    1. $1,000 with respect to a transaction valued at less than $1,000;
    2. $10,000 with respect to a transaction valued at $1,000 or more 
but less than $10,000;
    3. $25,000 with respect to a transaction valued at $10,000 or more 
but less than $25,000;
    4. $50,000 with respect to a transaction valued at $25,000 or more 
but less than $50,000;
    5. $100,000 with respect to a transaction valued at $50,000 or more 
but less than $100,000;
    6. $170,000 with respect to a transaction valued at $100,000 or more 
but less than $170,000;
    7. $250,000 with respect to a transaction valued at $170,000 or 
more, except that where the applicable schedule amount as defined above 
exceeds the statutory maximum civil penalty amount applicable to an 
apparent violation, the applicable schedule amount shall equal such 
applicable statutory maximum civil penalty amount.
    C. OFAC means the Department of the Treasury's Office of Foreign 
Assets Control.
    D. Penalty is the final civil penalty amount imposed in a Penalty 
Notice.
    E. Proposed penalty is the civil penalty amount set forth in a Pre-
Penalty Notice.
    F. Regulator means any Federal, State, local or foreign official or 
agency that has authority to license or examine an entity for compliance 
with federal, state, or foreign law.
    G. Subject Person means an individual or entity subject to any of 
the sanctions programs administered or enforced by OFAC.
    H. Transaction value means the dollar value of a subject 
transaction. In export and import cases, the transaction value generally 
will be the domestic value in the United States of the goods, 
technology, or services sought to be exported from or imported into the 
United States, as demonstrated by commercial invoices, bills of lading, 
signed Customs declarations, or similar documents. In cases involving 
seizures by U.S. Customs and Border Protection (CBP), the transaction 
value generally will be the domestic value as determined by CBP. If the 
apparent violation at issue is a prohibited dealing in blocked property 
by a Subject Person, the transaction value generally will be the dollar 
value of the underlying transaction involved, such as the value of the 
property dealt in or the amount of the funds transfer that a financial 
institution failed to block or reject. Where the transaction value is 
not otherwise ascertainable, OFAC may consider the market value of the 
goods or services that were the subject of the transaction, the economic 
benefit conferred on the sanctioned party, and/or the economic benefit 
derived by the Subject Person from the transaction, in determining 
transaction value. For purposes of these Guidelines, ``transaction 
value'' will not necessarily have the same meaning, nor be applied in 
the same manner, as that term is used for import valuation purposes at 
19 CFR 152.103.
    I. Voluntary self-disclosure means self-initiated notification to 
OFAC of an apparent violation by a Subject Person that has committed, or 
otherwise participated in, an apparent violation of a statute, Executive 
order, or regulation administered or enforced by OFAC, prior to or at 
the same time that OFAC, or any other federal, state, or local 
government agency or official, discovers the apparent violation or 
another substantially similar apparent violation. For these purposes, 
``substantially similar apparent violation'' means an apparent violation 
that is part of a series of similar apparent violations or is related to 
the same pattern or practice of conduct. Notification of an apparent 
violation to another government agency (but not to OFAC) by a Subject 
Person, which is considered a voluntary self-disclosure by that agency, 
may be considered a voluntary self-disclosure by OFAC, based on a case-
by-case assessment. Notification to OFAC of an apparent violation is not 
a voluntary self-disclosure if: a third party is required to and does 
notify OFAC of the apparent violation or a substantially similar 
apparent violation because a transaction was blocked or rejected by that 
third party (regardless of when OFAC receives such notice from the

[[Page 44]]

third party and regardless of whether the Subject Person was aware of 
the third party's disclosure); the disclosure includes false or 
misleading information; the disclosure (when considered along with 
supplemental information provided by the Subject Person) is materially 
incomplete; the disclosure is not self-initiated (including when the 
disclosure results from a suggestion or order of a federal or state 
agency or official); or, when the Subject Person is an entity, the 
disclosure is made by an individual in a Subject Person entity without 
the authorization of the entity's senior management. Responding to an 
administrative subpoena or other inquiry from, or filing a license 
application with, OFAC is not a voluntary self-disclosure. In addition 
to notification, a voluntary self-disclosure must include, or be 
followed within a reasonable period of time by, a report of sufficient 
detail to afford a complete understanding of an apparent violation's 
circumstances, and should also be followed by responsiveness to any 
follow-up inquiries by OFAC. (As discussed further below, a Subject 
Person's level of cooperation with OFAC is an important factor in 
determining the appropriate enforcement response to an apparent 
violation even in the absence of a voluntary self-disclosure as defined 
herein; disclosure by a Subject Person generally will result in 
mitigation insofar as it represents cooperation with OFAC's 
investigation.)

              II. Types of Responses to Apparent Violations

    Depending on the facts and circumstances of a particular case, an 
OFAC investigation may lead to one or more of the following actions:
    A. No Action. If OFAC determines that there is insufficient evidence 
to conclude that a violation has occurred and/or, based on an analysis 
of the General Factors outlined in Section III of these Guidelines, 
concludes that the conduct does not rise to a level warranting an 
administrative response, then no action will be taken. In those cases in 
which OFAC is aware that the Subject Person has knowledge of OFAC's 
investigation, OFAC generally will issue a letter to the Subject Person 
indicating that the investigation is being closed with no administrative 
action being taken. A no-action determination represents a final 
determination as to the apparent violation, unless OFAC later learns of 
additional related violations or other relevant facts.
    B. Request Additional Information. If OFAC determines that 
additional information regarding the apparent violation is needed, it 
may request further information from the Subject Person or third 
parties, including through an administrative subpoena issued pursuant to 
31 CFR 501.602. In the case of an institution subject to regulation 
where OFAC has entered into a Memorandum of Understanding (MOU) with the 
Subject Person's regulator, OFAC will follow the procedures set forth in 
such MOU regarding consultation with the regulator. Even in the absence 
of an MOU, OFAC may seek relevant information about a regulated 
institution and/or the conduct constituting the apparent violation from 
the institution's federal, state, or foreign regulator. Upon receipt of 
information determined to be sufficient to assess the apparent 
violation, OFAC will decide, based on an analysis of the General Factors 
outlined in Section III of these Guidelines, whether to pursue further 
enforcement action or whether some other response to the apparent 
violation is appropriate.
    C. Cautionary Letter: If OFAC determines that there is insufficient 
evidence to conclude that a violation has occurred or that a Finding of 
Violation or a civil monetary penalty is not warranted under the 
circumstances, but believes that the underlying conduct could lead to a 
violation in other circumstances and/or that a Subject Person does not 
appear to be exercising due diligence in assuring compliance with the 
statutes, Executive orders, and regulations that OFAC enforces, OFAC may 
issue a cautionary letter, which may convey OFAC's concerns about the 
underlying conduct and/or the Subject Person's OFAC compliance policies, 
practices and/or procedures. A cautionary letter represents a final 
enforcement response to the apparent violation, unless OFAC later learns 
of additional related violations or other relevant facts, but does not 
constitute a final agency determination as to whether a violation has 
occurred.
    D. Finding of Violation: If OFAC determines that a violation has 
occurred and considers it important to document the occurrence of a 
violation and, based on an analysis of the General Factors outlined in 
Section III of these Guidelines, concludes that the Subject Person's 
conduct warrants an administrative response but that a civil monetary 
penalty is not the most appropriate response, OFAC may issue a Finding 
of Violation that identifies the violation. A Finding of Violation may 
also convey OFAC's concerns about the violation and/or the Subject 
Person's OFAC compliance policies, practices and/or procedures, and/or 
identify the need for further compliance steps to be taken. A Finding of 
Violation represents a final enforcement response to the violation, 
unless OFAC later learns of additional related violations or other 
relevant facts, and constitutes a final agency determination that a 
violation has occurred. A Finding of Violation will afford the Subject 
Person an opportunity to respond to OFAC's determination that a 
violation has occurred before that determination becomes final. In the 
event a Subject Person so responds, the initial Finding of Violation

[[Page 45]]

will not constitute a final agency determination that a violation has 
occurred. In such cases, after considering the response received, OFAC 
will inform the Subject Person of its final enforcement response to the 
apparent violation.
    E. Civil Monetary Penalty. If OFAC determines that a violation has 
occurred and, based on an analysis of the General Factors outlined in 
Section III of these Guidelines, concludes that the Subject Person's 
conduct warrants the imposition of a monetary penalty, OFAC may impose a 
civil monetary penalty. Civil monetary penalty amounts will be 
determined as discussed in Section V of these Guidelines. The imposition 
of a civil monetary penalty constitutes a final agency determination 
that a violation has occurred and represents a final civil enforcement 
response to the violation. OFAC will afford the Subject Person an 
opportunity to respond to OFAC's determination that a violation has 
occurred before a final penalty is imposed.
    F. Criminal Referral. In appropriate circumstances, OFAC may refer 
the matter to appropriate law enforcement agencies for criminal 
investigation and/or prosecution. Apparent sanctions violations that 
OFAC has referred for criminal investigation and/or prosecution also may 
be subject to OFAC civil penalty or other administrative action.
    G. Other Administrative Actions. In addition to or in lieu of other 
administrative actions, OFAC may also take the following administrative 
actions in response to an apparent violation:
    1. License Denial, Suspension, Modification, or Revocation. OFAC 
authorizations to engage in a transaction (including the release of 
blocked funds) pursuant to a general or specific license may be 
withheld, denied, suspended, modified, or revoked in response to an 
apparent violation.
    2. Cease and Desist Order. OFAC may order the Subject Person to 
cease and desist from conduct that is prohibited by any of the sanctions 
programs enforced by OFAC when OFAC has reason to believe that a Subject 
Person has engaged in such conduct and/or that such conduct is ongoing 
or may recur.

          III. General Factors Affecting Administrative Action

    As a general matter, OFAC will consider some or all of the following 
General Factors in determining the appropriate administrative action in 
response to an apparent violation of U.S. sanctions by a Subject Person, 
and, where a civil monetary penalty is imposed, in determining the 
appropriate amount of any such penalty:
    A. Willful or Reckless Violation of Law: a Subject Person's 
willfulness or recklessness in violating, attempting to violate, 
conspiring to violate, or causing a violation of the law. Generally, to 
the extent the conduct at issue is the result of willful conduct or a 
deliberate intent to violate, attempt to violate, conspire to violate, 
or cause a violation of the law, the OFAC enforcement response will be 
stronger. Among the factors OFAC may consider in evaluating willfulness 
or recklessness are:
    1. Willfulness. Was the conduct at issue the result of a decision to 
take action with the knowledge that such action would constitute a 
violation of U.S. law? Did the Subject Person know that the underlying 
conduct constituted, or likely constituted, a violation of U.S. law at 
the time of the conduct?
    2. Recklessness. Did the Subject Person demonstrate reckless 
disregard for U.S. sanctions requirements or otherwise fail to exercise 
a minimal degree of caution or care in avoiding conduct that led to the 
apparent violation? Were there warning signs that should have alerted 
the Subject Person that an action or failure to act would lead to an 
apparent violation?
    3. Concealment. Was there an effort by the Subject Person to hide or 
purposely obfuscate its conduct in order to mislead OFAC, Federal, 
State, or foreign regulators, or other parties involved in the conduct 
about an apparent violation?
    4. Pattern of Conduct. Did the apparent violation constitute or 
result from a pattern or practice of conduct or was it relatively 
isolated and atypical in nature?
    5. Prior Notice. Was the Subject Person on notice, or should it 
reasonably have been on notice, that the conduct at issue, or similar 
conduct, constituted a violation of U.S. law?
    6. Management Involvement. In cases of entities, at what level 
within the organization did the willful or reckless conduct occur? Were 
supervisory or managerial level staff aware, or should they reasonably 
have been aware, of the willful or reckless conduct?
    B. Awareness of Conduct at Issue: the Subject Person's awareness of 
the conduct giving rise to the apparent violation. Generally, the 
greater a Subject Person's actual knowledge of, or reason to know about, 
the conduct constituting an apparent violation, the stronger the OFAC 
enforcement response will be. In the case of a corporation, awareness 
will focus on supervisory or managerial level staff in the business unit 
at issue, as well as other senior officers and managers. Among the 
factors OFAC may consider in evaluating the Subject Person's awareness 
of the conduct at issue are:
    1. Actual Knowledge. Did the Subject Person have actual knowledge 
that the conduct giving rise to an apparent violation took place? Was 
the conduct part of a business process, structure or arrangement that 
was designed or implemented with the intent to prevent or shield the 
Subject Person from having such actual knowledge, or was the conduct 
part of a business process, structure or arrangement implemented for 
other legitimate reasons that made it difficult or

[[Page 46]]

impossible for the Subject Person to have actual knowledge?
    2. Reason to Know. If the Subject Person did not have actual 
knowledge that the conduct took place, did the Subject Person have 
reason to know, or should the Subject Person reasonably have known, 
based on all readily available information and with the exercise of 
reasonable due diligence, that the conduct would or might take place?
    3. Management Involvement. In the case of an entity, was the conduct 
undertaken with the explicit or implicit knowledge of senior management, 
or was the conduct undertaken by personnel outside the knowledge of 
senior management? If the apparent violation was undertaken without the 
knowledge of senior management, was there oversight intended to detect 
and prevent violations, or did the lack of knowledge by senior 
management result from disregard for its responsibility to comply with 
applicable sanctions laws?
    C. Harm to Sanctions Program Objectives: the actual or potential 
harm to sanctions program objectives caused by the conduct giving rise 
to the apparent violation. Among the factors OFAC may consider in 
evaluating the harm to sanctions program objectives are:
    1. Economic or Other Benefit to the Sanctioned Individual, Entity, 
or Country: the economic or other benefit conferred or attempted to be 
conferred to sanctioned individuals, entities, or countries as a result 
of an apparent violation, including the number, size, and impact of the 
transactions constituting an apparent violation(s), the length of time 
over which they occurred, and the nature of the economic or other 
benefit conferred. OFAC may also consider the causal link between the 
Subject Person's conduct and the economic benefit conferred or attempted 
to be conferred.
    2. Implications for U.S. Policy: the effect that the circumstances 
of the apparent violation had on the integrity of the U.S. sanctions 
program and the related policy objectives involved.
    3. License Eligibility: whether the conduct constituting the 
apparent violation likely would have been licensed by OFAC under 
existing licensing policy.
    4. Humanitarian activity: whether the conduct at issue was in 
support of a humanitarian activity.
    D. Individual Characteristics: the particular circumstances and 
characteristics of a Subject Person. Among the factors OFAC may consider 
in evaluating individual characteristics are:
    1. Commercial Sophistication: the commercial sophistication and 
experience of the Subject Person. Is the Subject Person an individual or 
an entity? If an individual, was the conduct constituting the apparent 
violation for personal or business reasons?
    2. Size of Operations and Financial Condition: the size of a Subject 
Person's business operations and overall financial condition, where such 
information is available and relevant. Qualification of the Subject 
Person as a small business or organization for the purposes of the Small 
Business Regulatory Enforcement Fairness Act, as determined by reference 
to the applicable regulations of the Small Business Administration, may 
also be considered.
    3. Volume of Transactions: the total volume of transactions 
undertaken by the Subject Person on an annual basis, with attention 
given to the apparent violations as compared with the total volume.
    4. Sanctions History: the Subject Person's sanctions history, 
including OFAC's issuance of prior penalties, findings of violations or 
cautionary, warning or evaluative letters, or other administrative 
actions (including settlements). As a general matter, OFAC will only 
consider a Subject Person's sanctions history for the five years 
preceding the date of the transaction giving rise to the apparent 
violation.
    E. Compliance Program: the existence, nature and adequacy of a 
Subject Person's risk-based OFAC compliance program at the time of the 
apparent violation, where relevant. In the case of an institution 
subject to regulation where OFAC has entered into a Memorandum of 
Understanding (MOU) with the Subject Person's regulator, OFAC will 
follow the procedures set forth in such MOU regarding consultation with 
the regulator with regard to the quality and effectiveness of the 
Subject Person's compliance program. Even in the absence of an MOU, OFAC 
may take into consideration the views of federal, state, or foreign 
regulators, where relevant. Further information about risk-based 
compliance programs for financial institutions is set forth in the annex 
hereto.
    F. Remedial Response: the Subject Person's corrective action taken 
in response to the apparent violation. Among the factors OFAC may 
consider in evaluating the remedial response are:
    1. The steps taken by the Subject Person upon learning of the 
apparent violation. Did the Subject Person immediately stop the conduct 
at issue?
    2. In the case of an entity, the processes followed to resolve 
issues related to the apparent violation. Did the Subject Person 
discover necessary information to ascertain the causes and extent of the 
apparent violation, fully and expeditiously? Was senior management fully 
informed? If so, when?
    3. In the case of an entity, whether the Subject Person adopted new 
and more effective internal controls and procedures to prevent a 
recurrence of the apparent violation. If the Subject Person did not have 
an OFAC compliance program in place at the time of the apparent 
violation, did it implement one

[[Page 47]]

upon discovery of the apparent violations? If it did have an OFAC 
compliance program, did it take appropriate steps to enhance the program 
to prevent the recurrence of similar violations? Did the entity provide 
the individual(s) responsible for the apparent violation with additional 
training, and/or take other appropriate action, to ensure that similar 
violations do not occur in the future?
    4. Where applicable, whether the Subject Person undertook a thorough 
review to identify other possible violations.
    G. Cooperation with OFAC: the nature and extent of the Subject 
Person's cooperation with OFAC. Among the factors OFAC may consider in 
evaluating cooperation with OFAC are:
    1. Did the Subject Person voluntarily self-disclose the apparent 
violation to OFAC?
    2. Did the Subject Person provide OFAC with all relevant information 
regarding an apparent violation (whether or not voluntarily self-
disclosed)?
    3. Did the Subject Person research and disclose to OFAC relevant 
information regarding any other apparent violations caused by the same 
course of conduct?
    4. Was information provided voluntarily or in response to an 
administrative subpoena?
    5. Did the Subject Person cooperate with, and promptly respond to, 
all requests for information?
    6. Did the Subject Person enter into a statute of limitations 
tolling agreement, if requested by OFAC (particularly in situations 
where the apparent violations were not immediately notified to or 
discovered by OFAC, in particularly complex cases, and in cases in which 
the Subject Person has requested and received additional time to respond 
to a request for information from OFAC)? If so, the Subject Person's 
entering into a tolling agreement will be deemed a mitigating factor.

    Note: A Subject Person's refusal to enter into a tolling agreement 
will not be considered by OFAC as an aggravating factor in assessing a 
Subject Person's cooperation or otherwise under the Guidelines.
    Where appropriate, OFAC will publicly note substantial cooperation 
provided by a Subject Person.

    H. Timing of apparent violation in relation to imposition of 
sanctions: the timing of the apparent violation in relation to the 
adoption of the applicable prohibitions, particularly if the apparent 
violation took place immediately after relevant changes in the sanctions 
program regulations or the addition of a new name to OFAC's List of 
Specially Designated Nationals and Blocked Persons (SDN List).
    I. Other enforcement action: other enforcement actions taken by 
federal, state, or local agencies against the Subject Person for the 
apparent violation or similar apparent violations, including whether the 
settlement of alleged violations of OFAC regulations is part of a 
comprehensive settlement with other federal, state, or local agencies.
    J. Future Compliance/Deterrence Effect: the impact administrative 
action may have on promoting future compliance with U.S. economic 
sanctions by the Subject Person and similar Subject Persons, 
particularly those in the same industry sector.
    K. Other relevant factors on a case-by-case basis: such other 
factors that OFAC deems relevant on a case-by-case basis in determining 
the appropriate enforcement response and/or the amount of any civil 
monetary penalty. OFAC will consider the totality of the circumstances 
to ensure that its enforcement response is proportionate to the nature 
of the violation.

IV. Civil Penalties for Failure To Comply With a Requirement To Furnish 
                       Information or Keep Records

    As a general matter, the following civil penalty amounts shall apply 
to a Subject Person's failure to comply with a requirement to furnish 
information or maintain records:
    A. The failure to comply with a requirement to furnish information 
pursuant to 31 CFR 501.602 may result in a penalty in an amount up to 
$20,000, irrespective of whether any other violation is alleged. Where 
OFAC has reason to believe that the apparent violation(s) that is the 
subject of the requirement to furnish information involves a 
transaction(s) valued at greater than $500,000, a failure to comply with 
a requirement to furnish information may result in a penalty in an 
amount up to $50,000, irrespective of whether any other violation is 
alleged. A failure to comply with a requirement to furnish information 
may be considered a continuing violation, and the penalties described 
above may be imposed each month that a party has continued to fail to 
comply with the requirement to furnish information. OFAC may also seek 
to have a requirement to furnish information judicially enforced. 
Imposition of a civil monetary penalty for failure to comply with a 
requirement to furnish information does not preclude OFAC from seeking 
such judicial enforcement of the requirement to furnish information.
    B. The late filing of a required report, whether set forth in 
regulations or in a specific license, may result in a civil monetary 
penalty in an amount up to $2,500, if filed within the first 30 days 
after the report is due, and a penalty in an amount up to $5,000 if 
filed more than 30 days after the report is due. If the report relates 
to blocked assets, the penalty may include an additional $1,000 for 
every 30 days that the report is overdue, up to five years.

[[Page 48]]

    C. The failure to maintain records in conformance with the 
requirements of OFAC's regulations or of a specific license may result 
in a penalty in an amount up to $50,000.

                           V. Civil Penalties

    OFAC will review the facts and circumstances surrounding an apparent 
violation and apply the General Factors for Taking Administrative Action 
in Section III above in determining whether to initiate a civil penalty 
proceeding and in determining the amount of any civil monetary penalty. 
OFAC will give careful consideration to the appropriateness of issuing a 
cautionary letter or Finding of Violation in lieu of the imposition of a 
civil monetary penalty.

                        A. Civil Penalty Process

    1. Pre-Penalty Notice. If OFAC has reason to believe that a 
sanctions violation has occurred and believes that a civil monetary 
penalty is appropriate, it will issue a Pre-Penalty Notice in accordance 
with the procedures set forth in the particular regulations governing 
the conduct giving rise to the apparent violation. The amount of the 
proposed penalty set forth in the Pre-Penalty Notice will reflect OFAC's 
preliminary assessment of the appropriate penalty amount, based on 
information then in OFAC's possession. The amount of the final penalty 
may change as OFAC learns additional relevant information. If, after 
issuance of a Pre-Penalty Notice, OFAC determines that a penalty in an 
amount that represents an increase of more than 10 percent from the 
proposed penalty set forth in the Pre-Penalty Notice is appropriate, or 
if OFAC intends to allege additional violations, it will issue a revised 
Pre-Penalty Notice setting forth the new proposed penalty amount and/or 
alleged violations.
    a. In general, the Pre-Penalty Notice will set forth the following 
with respect to the specific violations alleged and the proposed 
penalties:
    i. Description of the alleged violations, including the number of 
violations and their value, for which a penalty is being proposed;
    ii. Identification of the regulatory or other provisions alleged to 
have been violated;
    iii. Identification of the base category (defined below) according 
to which the proposed penalty amount was calculated and the General 
Factors that were most relevant to the determination of the proposed 
penalty amount;
    iv. The maximum amount of the penalty to which the Subject Person 
could be subject under applicable law; and
    v. The proposed penalty amount, determined in accordance with the 
provisions set forth in these Guidelines.
    b. The Pre-Penalty Notice will also include information regarding 
how to respond to the Pre-Penalty Notice including:
    i. A statement that the Subject Person may submit a written response 
to the Pre-Penalty Notice by a date certain addressing the alleged 
violation(s), the General Factors Affecting Administrative Action set 
forth in Section III of these Guidelines, and any other information or 
evidence that the Subject Person deems relevant to OFAC's consideration.
    ii. A statement that a failure to respond to the Pre-Penalty Notice 
may result in the imposition of a civil monetary penalty.
    2. Response to Pre-Penalty Notice. A Subject Person may submit a 
written response to the Pre-Penalty Notice in accordance with the 
procedures set forth in the particular regulations governing the conduct 
giving rise to the apparent violation. Generally, the response should 
either agree to the proposed penalty set forth in the Pre-Penalty Notice 
or set forth reasons why a penalty should not be imposed or, if imposed, 
why it should be a lesser amount than proposed, with particular 
attention paid to the General Factors Affecting Administrative Action 
set forth in Section III of these Guidelines. The response should 
include all documentary or other evidence available to the Subject 
Person that supports the arguments set forth in the response. OFAC will 
consider all relevant materials submitted.
    3. Penalty Notice. If OFAC receives no response to a Pre-Penalty 
Notice within the time prescribed in the Pre-Penalty Notice, or if 
following the receipt of a response to a Pre-Penalty Notice and a review 
of the information and evidence contained therein OFAC concludes that a 
civil monetary penalty is warranted, a Penalty Notice generally will be 
issued in accordance with the procedures set forth in the particular 
regulations governing the conduct giving rise to the violation. A 
Penalty Notice constitutes a final agency determination that a violation 
has occurred. The penalty amount set forth in the Penalty Notice will 
take into account relevant additional information provided in response 
to a Pre-Penalty Notice. In the absence of a response to a Pre-Penalty 
Notice, the penalty amount set forth in the Penalty Notice will 
generally be the same as the proposed penalty set forth in the Pre-
Penalty Notice.
    4. Referral to Financial Management Division. The imposition of a 
civil monetary penalty pursuant to a Penalty Notice creates a debt due 
the U.S. Government. OFAC will advise Treasury's Financial Management 
Division upon the imposition of a penalty. The Financial Management 
Division may take follow-up action to collect the penalty assessed if it 
is not paid within the prescribed time period set forth in the Penalty 
Notice.

[[Page 49]]

In addition or instead, the matter may be referred to the U.S. 
Department of Justice for appropriate action to recover the penalty.
    5. Final Agency Action. The issuance of a Penalty Notice constitutes 
final agency action with respect to the violation(s) for which the 
penalty is assessed.

                       B. Amount of Civil Penalty

    1. Egregious case. In those cases in which a civil monetary penalty 
is deemed appropriate, OFAC will make a determination as to whether a 
case is deemed ``egregious'' for purposes of the base penalty 
calculation. This determination will be based on an analysis of the 
applicable General Factors. In making the egregiousness determination, 
OFAC generally will give substantial weight to General Factors A 
(``willful or reckless violation of law''), B (``awareness of conduct at 
issue''), C (``harm to sanctions program objectives'') and D 
(``individual characteristics''), with particular emphasis on General 
Factors A and B. A case will be considered an ``egregious case'' where 
the analysis of the applicable General Factors, with a focus on those 
General Factors identified above, indicates that the case represents a 
particularly serious violation of the law calling for a strong 
enforcement response. A determination that a case is ``egregious'' will 
be made by the Director or Deputy Director.
    2. Pre-Penalty Notice. The penalty amount proposed in a Pre-Penalty 
Notice shall generally be calculated as follows, except that neither the 
base amount nor the proposed penalty will exceed the applicable 
statutory maximum amount: \6\
---------------------------------------------------------------------------

    \6\ For apparent violations identified in the Cuba Penalty Schedule, 
68 Fed. Reg. 4429 (Jan. 29, 2003), for which a civil monetary penalty 
has been deemed appropriate, the base penalty amount shall equal the 
amount set forth in the Schedule for such violation, except that the 
base penalty amount shall be reduced by 50% in cases of voluntary self-
disclosure.
---------------------------------------------------------------------------

                      a. Base Category Calculation

    i. In a non-egregious case, if the apparent violation is disclosed 
through a voluntary self-disclosure by the Subject Person, the base 
amount of the proposed civil penalty in the Pre-Penalty Notice shall be 
one-half of the transaction value, capped at a maximum base amount of 
$144,619 per violation, except where the statutory maximum penalty 
applicable to the apparent violation is less than $289,238, in which 
case the base amount of the proposed civil penalty in the Pre-Penalty 
Notice shall be capped at one-half the statutory maximum penalty 
applicable to the apparent violation.
    ii. In a non-egregious case, if the apparent violation comes to 
OFAC's attention by means other than a voluntary self-disclosure, the 
base amount of the proposed civil penalty in the Pre-Penalty Notice 
shall be the ``applicable schedule amount,'' as defined above. For 
apparent violations where the statutory maximum penalty applicable to 
the apparent violation is $289,238 or greater, the maximum base amount 
shall be capped at $289,238. For apparent violations where the statutory 
maximum penalty applicable to the apparent violation is less than 
$289,238, the maximum base amount shall be capped at the statutory 
maximum penalty amount applicable to the apparent violation.
    iii. In an egregious case, if the apparent violation is disclosed 
through a voluntary self-disclosure by a Subject Person, the base amount 
of the proposed civil penalty in the Pre-Penalty Notice shall be one-
half of the applicable statutory maximum penalty applicable to the 
violation.
    iv. In an egregious case, if the apparent violation comes to OFAC's 
attention by means other than a voluntary self-disclosure, the base 
amount of the proposed civil penalty in the Pre-Penalty Notice shall be 
the applicable statutory maximum penalty amount applicable to the 
violation.

    Note to paragraph (a): As of January 15, 2017, the applicable 
statutory maximum civil penalty per violation for each statute enforced 
by OFAC is as follows: International Emergency Economic Powers Act 
(IEEPA)--greater of $289,238 or twice the amount of the underlying 
transaction; Trading with the Enemy Act (TWEA)--$85,236; Foreign 
Narcotics Kingpin Designation Act (FNKDA)--$1,437,153; Antiterrorism and 
Effective Death Penalty Act of 1996 (AEDPA)--greater of $76,351 or twice 
the amount of which a financial institution was required to retain 
possession or control; and Clean Diamond Trade Act (CDTA)--$13,066. The 
civil penalty amounts authorized under these statutes are subject to 
adjustment pursuant to the Federal Civil Penalties Inflation Adjustment 
Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 note).

    The following matrix represents the base amount of the proposed 
civil penalty for each category of violation:

[[Page 50]]

[GRAPHIC] [TIFF OMITTED] TR10FE17.002

          b. Adjustment for Applicable Relevant General Factors

    The base amount of the proposed civil penalty may be adjusted to 
reflect applicable General Factors for Administrative Action set forth 
in Section III of these Guidelines. Each factor may be considered 
mitigating or aggravating, resulting in a lower or higher proposed 
penalty amount. As a general matter, in those cases where the following 
General Factors are present, OFAC will adjust the base proposed penalty 
amount in the following manner:
    i. In cases involving substantial cooperation with OFAC but no 
voluntary self-disclosure as defined herein, including cases in which an 
apparent violation is reported to OFAC by a third party but the Subject 
Person provides substantial additional information regarding the 
apparent violation and/or other related violations, the base penalty 
amount generally will be reduced between 25 and 40 percent. Substantial 
cooperation in cases involving voluntary self-disclosure may also be 
considered as a further mitigating factor.
    ii. In cases involving a Subject Person's first violation, the base 
penalty amount generally will be reduced up to 25 percent. An apparent 
violation generally will be considered a ``first violation'' if the 
Subject Person has not received a penalty notice or Finding of Violation 
from OFAC in the five years preceding the date of the transaction giving 
rise to the apparent violation. A group of substantially similar 
apparent violations addressed in a single Pre-Penalty Notice shall be 
considered as a single violation for purposes of this subsection. In 
those cases where a prior penalty notice or Finding of Violation within 
the preceding five years involved conduct of a substantially different 
nature from the apparent violation at issue, OFAC may consider the 
apparent violation at issue a ``first violation.'' In determining the 
extent of any mitigation for a first violation, OFAC may consider any 
prior OFAC enforcement action taken with respect to the Subject Person, 
including any cautionary, warning or evaluative letters issued, or any 
civil monetary settlements entered into with OFAC.
    In all cases, the proposed penalty amount will not exceed the 
applicable statutory maximum.
    In cases involving a large number of apparent violations, where the 
transaction value of all apparent violations is either unknown or would 
require a disproportionate allocation of resources to determine, OFAC 
may estimate or extrapolate the transaction value of the total universe 
of apparent violations in determining the amount of any proposed civil 
monetary penalty.

[[Page 51]]

    3. Penalty Notice. The amount of the proposed civil penalty in the 
Pre-Penalty Notice will be the presumptive starting point for 
calculation of the civil penalty amount in the Penalty Notice. OFAC may 
adjust the penalty amount in the Penalty Notice based on:
    a. Evidence presented by the Subject Person in response to the Pre-
Penalty Notice, or otherwise received by OFAC with respect to the 
underlying violation(s); and/or
    b. Any modification resulting from further review and 
reconsideration by OFAC of the proposed civil monetary penalty in light 
of the General Factors for Administrative Action set forth in Section 
III above.
    In no event will the amount of the civil monetary penalty in the 
Penalty Notice exceed the proposed penalty set forth in the Pre-Penalty 
Notice by more than 10 percent, or include additional alleged 
violations, unless a revised Pre-Penalty Notice has first been sent to 
the Subject Person as set forth above. In the event that OFAC determines 
upon further review that no penalty is appropriate, it will so inform 
the Subject Person in a no-action letter, a cautionary letter, or a 
Finding of Violation.

                             C. Settlements

    A settlement does not constitute a final agency determination that a 
violation has occurred.
    1. Settlement Process. Settlement discussions may be initiated by 
OFAC, the Subject Person or the Subject Person's authorized 
representative. Settlements generally will be negotiated in accordance 
with the principles set forth in these Guidelines with respect to 
appropriate penalty amounts. OFAC may condition the entry into or 
continuation of settlement negotiations on the execution of a tolling 
agreement with respect to the statute of limitations.
    2. Settlement Prior to Issuance of Pre-Penalty Notice. Where 
settlement discussions occur prior to the issuance of a Pre-Penalty 
Notice, the Subject Person may request in writing that OFAC withhold 
issuance of a Pre-Penalty Notice pending the conclusion of settlement 
discussions. OFAC will generally agree to such a request as long as 
settlement discussions are continuing in good faith and the statute of 
limitations is not at risk of expiring.
    3. Settlement Following Issuance of Pre-Penalty Notice. If a matter 
is settled after a Pre-Penalty Notice has been issued, but before a 
final Penalty Notice is issued, OFAC will not make a final determination 
as to whether a sanctions violation has occurred. In the event no 
settlement is reached, the period specified for written response to the 
Pre-Penalty Notice remains in effect unless additional time is granted 
by OFAC.
    4. Settlements of Multiple Apparent Violations. A settlement 
initiated for one apparent violation may also involve a comprehensive or 
global settlement of multiple apparent violations covered by other Pre-
Penalty Notices, apparent violations for which a Pre-Penalty Notice has 
not yet been issued by OFAC, or previously unknown apparent violations 
reported to OFAC during the pendency of an investigation of an apparent 
violation.

                                  Annex

    The following matrix can be used by financial institutions to 
evaluate their compliance programs:

                            OFAC Risk Matrix
------------------------------------------------------------------------
               Low                     Moderate              High
------------------------------------------------------------------------
Stable, well-known customer base  Customer base       A large,
 in a localized environment.       changing due to     fluctuating
                                   branching,          client base in an
                                   merger, or          international
                                   acquisition in      environment.
                                   the domestic
                                   market.
Few high-risk customers; these    A moderate number   A large number of
 may include nonresident aliens,   of high-risk        high-risk
 foreign customers (including      customers.          customers.
 accounts with U.S. powers of
 attorney), and foreign
 commercial customers.
No overseas branches and no       Overseas branches   Overseas branches
 correspondent accounts with       or correspondent    or multiple
 foreign banks.                    accounts with       correspondent
                                   foreign banks.      accounts with
                                                       foreign banks.
No electronic services (e.g., e-  The institution     The institution
 banking) offered, or products     offers limited      offers a wide
 available are purely              electronic (e.g.,   array of
 informational or non-             e-banking)          electronic (e.g.,
 transactional.                    products and        e-banking)
                                   services.           products and
                                                       services (i.e.,
                                                       account
                                                       transfers, e-bill
                                                       payment, or
                                                       accounts opened
                                                       via the
                                                       Internet).
Limited number of funds           A moderate number   A high number of
 transfers for customers and non-  of funds            customer and non-
 customers, limited third-party    transfers, mostly   customer funds
 transactions, and no              for customers.      transfers,
 international funds transfers.    Possibly, a few     including
                                   international       international
                                   funds transfers     funds transfers.
                                   from personal or
                                   business accounts.
No other types of international   Limited other       A high number of
 transactions, such as trade       types of            other types of
 finance, cross-border ACH, and    international       international
 management of sovereign debt.     transactions.       transactions.

[[Page 52]]

 
No history of OFAC actions. No    A small number of   Multiple recent
 evidence of apparent violation    recent actions      actions by OFAC,
 or circumstances that might       (i.e., actions      where the
 lead to a violation.              within the last     institution has
                                   five years) by      not addressed the
                                   OFAC, including     issues, thus
                                   notice letters,     leading to an
                                   or civil money      increased risk of
                                   penalties, with     the institution
                                   evidence that the   undertaking
                                   institution         similar
                                   addressed the       violations in the
                                   issues and is not   future.
                                   at risk of
                                   similar
                                   violations in the
                                   future.
Management has fully assessed     Management          Management does
 the institution's level of risk   exhibits a          not understand,
 based on its customer base and    reasonable          or has chosen to
 product lines. This               understanding of    ignore, key
 understanding of risk and         the key aspects     aspects of OFAC
 strong commitment to OFAC         of OFAC             compliance risk.
 compliance is satisfactorily      compliance and      The importance of
 communicated throughout the       its commitment is   compliance is not
 organization.                     generally clear     emphasized or
                                   and                 communicated
                                   satisfactorily      throughout the
                                   communicated        organization.
                                   throughout the
                                   organization, but
                                   it may lack a
                                   program
                                   appropriately
                                   tailored to risk.
The board of directors, or board  The board has       The board has not
 committee, has approved an OFAC   approved an OFAC    approved an OFAC
 compliance program that           compliance          compliance
 includes policies, procedures,    program that        program, or
 controls, and information         includes most of    policies,
 systems that are adequate, and    the appropriate     procedures,
 consistent with the               policies,           controls, and
 institution's OFAC risk profile.  procedures,         information
                                   controls, and       systems are
                                   information         significantly
                                   systems necessary   deficient.
                                   to ensure
                                   compliance, but
                                   some weaknesses
                                   are noted.
Staffing levels appear adequate   Staffing levels     Management has
 to properly execute the OFAC      appear generally    failed to provide
 compliance program.               adequate, but       appropriate
                                   some deficiencies   staffing levels
                                   are noted.          to handle
                                                       workload.
Authority and accountability for  Authority and       Authority and
 OFAC compliance are clearly       accountability      accountability
 defined and enforced, including   are defined, but    for compliance
 the designation of a qualified    some refinements    have not been
 OFAC officer.                     are needed. A       clearly
                                   qualified OFAC      established. No
                                   officer has been    OFAC compliance
                                   designated.         officer, or an
                                                       unqualified one,
                                                       has been
                                                       appointed. The
                                                       role of the OFAC
                                                       officer is
                                                       unclear.
Training is appropriate and       Training is         Training is
 effective based on the            conducted and       sporadic and does
 institution's risk profile,       management          not cover
 covers applicable personnel,      provides adequate   important
 and provides necessary up-to-     resources given     regulatory and
 date information and resources    the risk profile    risk areas or is
 to ensure compliance.             of the              nonexistent.
                                   organization;
                                   however, some
                                   areas are not
                                   covered within
                                   the training
                                   program.
The institution employs strong    The institution     The institution
 quality control methods.          employs limited     does not employ
                                   quality control     quality control
                                   methods.            methods.
------------------------------------------------------------------------


[74 FR 57601, Nov. 9, 2009, as amended at 81 FR 43073, July 1, 2016; 82 
FR 10435, Feb. 10, 2017]



PART 510_NORTH KOREA SANCTIONS REGULATIONS--Table of Contents



      Subpart A_Relation of This Part to Other Laws and Regulations

Sec.
510.101  Relation of this part to other laws and regulations.

                         Subpart B_Prohibitions

510.201  Prohibited transactions.
510.202  Effect of transfers violating the provisions of this part.
510.203  Holding of funds in interest-bearing accounts; investment and 
          reinvestment.

                      Subpart C_General Definitions

510.301  Blocked account; blocked property.
510.302  Effective date.
510.303  Entity.
510.304  Interest.
510.305  Licenses; general and specific.
510.306  Person.
510.307  Property; property interest.
510.308  Transfer.
510.309  United States.
510.310  U.S. financial institution.
510.311  United States person; U.S. person.

                        Subpart D_Interpretations

510.401  [Reserved]
510.402  Effect of amendment.
510.403  Termination and acquisition of an interest in blocked property.
510.404  Transactions ordinarily incident to a licensed transaction 
          authorized.
510.405  Setoffs prohibited.
510.406  Entities owned by a person whose property and interests in 
          property are blocked.

 Subpart E_Licenses, Authorizations, and Statements of Licensing Policy

510.501  General and specific licensing procedures.
510.502  [Reserved]

[[Page 53]]

510.503  Exclusion from licenses.
510.504  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
510.505  Entries in certain accounts for normal service charges 
          authorized.
510.506  Provision of certain legal services authorized.
510.507  Authorization of emergency medical services.

Subparts F-G [Reserved]

                          Subpart H_Procedures

510.801  Procedures.
510.802  Delegation by the Secretary of the Treasury.

                    Subpart I_Paperwork Reduction Act

510.901  Paperwork Reduction Act notice.

Appendix A to Part 510--Executive Order 13466
Appendix B to Part 510--Executive Order 13551
Appendix C to Part 510--Executive Order 13570

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; 22 U.S.C. 287c; 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. 
13466, 73 FR 36787, June 27, 2008, 3 CFR, 2008 Comp., p. 195; E.O. 
13551, 75 FR 53837, September 1, 2010; E.O. 13570, 76 FR 22291, April 
20, 2011.

    Source: 75 FR 67913, Nov. 4, 2010, unless otherwise noted.



      Subpart A_Relation of This Part to Other Laws and Regulations



Sec. 510.101  Relation of this part to other laws and regulations.

    This part is separate from, and independent of, the other parts of 
this chapter, with the exception of part 501 of this chapter, the 
recordkeeping and reporting requirements and license application and 
other procedures of which apply to this part. 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. Differing 
foreign policy and national security circumstances may result in 
differing interpretations of similar language among the parts of this 
chapter. No license or authorization contained in or issued pursuant to 
those other parts authorizes any transaction prohibited by this part. No 
license or authorization contained in or issued pursuant to any other 
provision of law or regulation authorizes any transaction prohibited by 
this part. No license or authorization contained in or issued pursuant 
to this part relieves the involved parties from complying with any other 
applicable laws or regulations.

    Note to Sec. 510.101: 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 and additional general licenses and statements of licensing 
policy.



                         Subpart B_Prohibitions



Sec. 510.201  Prohibited transactions.

    (a) All transactions prohibited pursuant to Executive Order 13466 
are also prohibited pursuant to this part.

    Note to Sec. 510.201(a): The property and interests in property of 
North Korea or a North Korean national blocked pursuant to this 
paragraph are referred to throughout this part as ``property and 
interests in property blocked pursuant to Sec. 510.201(a).''

    (b) All transactions prohibited pursuant to Executive Order 13551 
are also prohibited pursuant to this part.

    Note 1 to Sec. 510.201(b): The names of persons listed in or 
designated pursuant to Executive Order 13551, whose property and 
interests in property therefore are blocked pursuant to paragraph (b) of 
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 
``[DPRK].'' 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. 510.406 concerning entities that 
may not be listed on the SDN List but whose property and interests in 
property are nevertheless blocked pursuant to paragraph (b) of this 
section.
    Note 2 to Sec. 510.201(b): 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 paragraph (b) of this section also are 
published in the Federal Register and

[[Page 54]]

incorporated into the SDN List with the identifier ``[BPI-DPRK].''

    (c) All transactions prohibited pursuant to Executive Order 13570 
are also prohibited pursuant to this part.

    Note to Sec. 510.201: Sections 501.806 and 501.807 of this chapter 
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 the status of their 
property and interests in property as blocked pursuant to 
Sec. 501.201(a) or of their status as persons whose property and 
interests in property are blocked pursuant to Sec. 510.201(b).

[75 FR 67913, Nov. 4, 2010, as amended at 76 FR 35741, June 20, 2011; 76 
FR 38535, June 30, 2011]



Sec. 510.202  Effect of transfers violating the provisions of this
part.

    (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 
Sec. 510.201 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 interest.
    (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 Sec. 510.201, 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.
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by 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 13466, Executive Order 
13551, this part, and any regulation, order, directive, ruling, 
instruction, or license issued pursuant to this part.
    (d) Transfers of property that otherwise would be null and void or 
unenforceable by virtue of the provisions of this section shall not be 
deemed to be null and void or unenforceable as to any person with whom 
such property is or was held or maintained (and as to such person only) 
in cases in which such person is able to establish to the satisfaction 
of the Office of Foreign Assets Control each of the following:
    (1) Such transfer did not represent a willful violation of the 
provisions of this part by the person with whom such property is or was 
held or maintained (and as to such person only);
    (2) The person with whom such property is or was held or maintained 
did not have reasonable cause to know or suspect, in view of all the 
facts and circumstances known or available to such person, that such 
transfer required a license or authorization issued pursuant to this 
part and was not so licensed or authorized, or, if a license or 
authorization did purport to cover the transfer, that such license or 
authorization had been obtained by misrepresentation of a third party or 
withholding of material facts or was otherwise fraudulently obtained; 
and
    (3) The person with whom such property is or was held or maintained 
filed with the Office of Foreign Assets Control a report setting forth 
in full the circumstances relating to such transfer promptly upon 
discovery that:
    (i) Such transfer was in violation of the provisions of this part or 
any regulation, ruling, instruction, license, or other directive or 
authorization issued pursuant to this part;
    (ii) Such transfer was not licensed or authorized by the Office of 
Foreign Assets Control; or
    (iii) If a license did purport to cover the transfer, such license 
had been obtained by misrepresentation of a third party or withholding 
of material facts or was otherwise fraudulently obtained.

    Note to paragraph (d) of Sec. 510.202: The filing of a report in 
accordance with the provisions of paragraph (d)(3) of this section shall 
not be deemed evidence that the terms of paragraphs (d)(1) and (d)(2) of 
this section have been satisfied.

    (e) Unless licensed pursuant to this part, any attachment, judgment, 
decree, lien, execution, garnishment, or other judicial process is null 
and void

[[Page 55]]

with respect to any property or interest in property blocked pursuant to 
Sec. 510.201.



Sec. 510.203  Holding of funds in interest-bearing accounts;
investment and reinvestment.

    (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 Sec. 510.201 shall hold or place such 
funds in a blocked interest-bearing account located in the United 
States.
    (b)(1) For purposes of this section, the term blocked interest-
bearing account means a blocked account:
    (i) In a federally insured U.S. bank, thrift institution, or credit 
union, provided the funds are earning interest at rates that are 
commercially reasonable; or
    (ii) With a broker or dealer registered with the Securities and 
Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.), provided the funds are invested in a money market fund or 
in U.S. Treasury bills.
    (2) For purposes of this section, a rate is commercially reasonable 
if it is the rate currently offered to other depositors on deposits or 
instruments of comparable size and maturity.
    (3) Funds held or placed in a blocked account pursuant to this 
paragraph (b) may not be invested in instruments the maturity of which 
exceeds 180 days. If interest is credited to a separate blocked account 
or subaccount, the name of the account party on each account must be the 
same.
    (c) Blocked funds held in instruments the maturity of which exceeds 
180 days at the time the funds become subject to Sec. 510.201 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 
(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 Sec. 510.201 may continue 
to be held in the same type of accounts or instruments, provided the 
funds earn interest at rates that are commercially reasonable.
    (e) This section does not create an affirmative obligation for the 
holder of blocked tangible property, such as chattels or real estate, or 
of other blocked property, such as debt or equity securities, to sell or 
liquidate such property. However, the Office of Foreign Assets Control 
may issue licenses permitting or directing such sales or liquidation in 
appropriate cases.
    (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 North Korea or any North Korean national who has 
property or interests in property blocked pursuant to Sec. 510.201(a) or 
any person whose property and interests in property are blocked pursuant 
to Sec. 510.201(b), nor may their holder cooperate in or facilitate the 
pledging or other attempted use as collateral of blocked funds or other 
assets.



                      Subpart C_General Definitions



Sec. 510.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibitions in Sec. 510.201, and 
either blocked pursuant to Sec. 510.201(a) or held in the name of a 
person whose property and interests in property are blocked pursuant to 
Sec. 510.201(b), 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 Sec. 510.301: See Sec. 510.406 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 Sec. 510.201.



Sec. 510.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this part as 
follows:

[[Page 56]]

    (a) With respect to property and interests in property blocked 
pursuant to E.O. 13466, June 26, 2008;

    Note to paragraph (a): Prior to June 26, 2008, all property and 
interests in property currently blocked pursuant to E.O. 13466 were 
blocked pursuant to 31 CFR part 500.

    (b) With respect to a person listed in the Annex to E.O. 13551, 
12:01 p.m. eastern daylight time, August 30, 2010;
    (c) With respect to a person whose property and interests in 
property are otherwise blocked pursuant to E.O. 13551, the earlier of 
the date of actual or constructive notice that such person's property 
and interests in property are blocked; or
    (d) With respect to E.O. 13570, 12:01 a.m. eastern daylight time, 
April 19, 2011.

[75 FR 67913, Nov. 4, 2010, as amended at 76 FR 35741, June 20, 2011]



Sec. 510.303  Entity.

    The term entity means a partnership, association, trust, joint 
venture, corporation, group, subgroup, or other organization.



Sec. 510.304  Interest.

    Except as otherwise provided in this part, the term interest, when 
used with respect to property (e.g., ``an interest in property''), means 
an interest of any nature whatsoever, direct or indirect.



Sec. 510.305  Licenses; general and specific.

    (a) Except as otherwise specified, the term license means any 
license or authorization contained in or issued pursuant to this part.
    (b) The term general license means any license or authorization the 
terms of which are set forth in subpart E of this part.
    (c) The term specific license means any license or authorization not 
set forth in subpart E of this part but issued pursuant to this part.

    Note to Sec. 510.305: See Sec. 501.801 of this chapter on licensing 
procedures.



Sec. 510.306  Person.

    The term person means an individual or entity.



Sec. 510.307  Property; property interest.

    The terms property and property interest include, but are not 
limited to, money, checks, drafts, bullion, bank deposits, savings 
accounts, debts, indebtedness, obligations, notes, guarantees, 
debentures, stocks, bonds, coupons, any other financial instruments, 
bankers acceptances, mortgages, pledges, liens or other rights in the 
nature of security, warehouse receipts, bills of lading, trust receipts, 
bills of sale, any other evidences of title, ownership or indebtedness, 
letters of credit and any documents relating to any rights or 
obligations thereunder, powers of attorney, goods, wares, merchandise, 
chattels, stocks on hand, ships, goods on ships, real estate mortgages, 
deeds of trust, vendors' sales agreements, land contracts, leaseholds, 
ground rents, real estate and any other interest therein, options, 
negotiable instruments, trade acceptances, royalties, book accounts, 
accounts payable, judgments, patents, trademarks or copyrights, 
insurance policies, safe deposit boxes and their contents, annuities, 
pooling agreements, services of any nature whatsoever, contracts of any 
nature whatsoever, and any other property, real, personal, or mixed, 
tangible or intangible, or interest or interests therein, present, 
future, or contingent.



Sec. 510.308  Transfer.

    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. Without limitation on the foregoing, it 
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

[[Page 57]]

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 interest 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.



Sec. 510.309  United States.

    The term United States means the United States, its territories and 
possessions, and all areas under the jurisdiction or authority thereof.



Sec. 510.310  U.S. financial institution.

    The term U.S. financial institution means any U.S. entity (including 
its foreign branches) that is engaged in the business of accepting 
deposits, making, granting, transferring, holding, or brokering loans or 
credits, or purchasing or selling foreign exchange, securities, 
commodity futures or options, or procuring purchasers and sellers 
thereof, as principal or agent. It includes but is not limited to 
depository institutions, banks, savings banks, trust companies, 
securities brokers and dealers, commodity futures and options brokers 
and dealers, forward contract and foreign exchange merchants, securities 
and commodities exchanges, clearing corporations, investment companies, 
employee benefit plans, and U.S. holding companies, U.S. affiliates, or 
U.S. subsidiaries of any of the foregoing. This term includes those 
branches, offices and agencies of foreign financial institutions that 
are located in the United States, but not such institutions' foreign 
branches, offices, or agencies.



Sec. 510.311  United States person; U.S. person.

    The term United States person or U.S. person means any United States 
citizen, permanent resident alien, entity organized under the laws of 
the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States.



                        Subpart D_Interpretations



Sec. 510.401  [Reserved]



Sec. 510.402  Effect of amendment.

    Unless otherwise specifically provided, any amendment, modification, 
or revocation of any provision in this part, any provision in or 
appendix to this chapter, or any order, regulation, ruling, instruction, 
or license issued by the Office of Foreign Assets Control does not 
affect any act done or omitted, or any civil or criminal proceeding 
commenced or pending, prior to such amendment, modification, or 
revocation. All penalties, forfeitures, and liabilities under any such 
order, regulation, ruling, instruction, or license continue and may be 
enforced as if such amendment, modification, or revocation had not been 
made.



Sec. 510.403  Termination and acquisition of an interest in blocked 
property.

    (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 Sec. 510.201, unless there exists in the 
property another interest that is blocked pursuant to Sec. 510.201 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 
Sec. 510.201(b), such property shall be deemed to be property in which 
that person has an interest and therefore blocked.



Sec. 510.404  Transactions ordinarily incident to a licensed 
transaction authorized.

    Any transaction ordinarily incident to a licensed transaction and 
necessary

[[Page 58]]

to give effect thereto is also authorized, except:
    (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 Sec. 510.201(b); or
    (b) An ordinarily incident transaction, not explicitly authorized 
within the terms of the license, involving a debit to a blocked account 
or a transfer of blocked property.



Sec. 510.405  Setoffs prohibited.

    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 Sec. 510.201 if effected after the effective date.



Sec. 510.406  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. 510.201(b) 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 Sec. 510.201(b), regardless of whether the entity itself is 
listed in the Annex or designated pursuant to Executive Order 13551.



 Subpart E_Licenses, Authorizations, and Statements of Licensing Policy



Sec. 510.501  General and specific licensing procedures.

    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.

[76 FR 35741, June 20, 2011]



Sec. 510.502  [Reserved]



Sec. 510.503  Exclusion from licenses.

    The Office of Foreign Assets Control reserves the right to exclude 
any person, property, or transaction from the operation of any license 
or from the privileges conferred by any license. The Office of Foreign 
Assets Control also reserves the right to restrict the applicability of 
any license to particular persons, property, transactions, or classes 
thereof. Such actions are binding upon actual or constructive notice of 
the exclusions or restrictions.



Sec. 510.504  Payments and transfers to blocked accounts in U.S. 
financial institutions.

    Any payment of funds or transfer of credit in which a person whose 
property and interests in property are blocked pursuant to 
Sec. 510.201(b) 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 Sec. 510.504: See Sec. 501.603 of this chapter for mandatory 
reporting requirements regarding financial transfers. See also 
Sec. 510.203 concerning the obligation to hold blocked funds in 
interest-bearing accounts.



Sec. 510.505  Entries in certain accounts for normal service charges 
authorized.

    (a) A U.S. financial institution is authorized to debit any blocked 
account held at that financial institution in payment or reimbursement 
for normal service charges owed it by the owner of that blocked account.
    (b) As used in this section, the term normal service charges shall 
include charges in payment or reimbursement for interest due; cable, 
telegraph, Internet, or telephone charges; postage costs; custody fees; 
small adjustment

[[Page 59]]

charges to correct bookkeeping errors; and, but not by way of 
limitation, minimum balance charges, notary and protest fees, and 
charges for reference books, photocopies, credit reports, transcripts of 
statements, registered mail, insurance, stationery and supplies, and 
other similar items.



Sec. 510.506  Provision of certain legal services authorized.

    (a) The provision of the following legal services to or on behalf of 
persons whose property and interests in property are blocked pursuant to 
Sec. 510.201(b) is authorized, provided that all receipts of payment of 
professional fees and reimbursement of incurred expenses must be 
specifically licensed:
    (1) Provision of legal advice and counseling on the requirements of 
and compliance with the laws of the United States or any jurisdiction 
within the United States, provided that such advice and counseling are 
not provided to facilitate transactions in violation of this part;
    (2) Representation of persons named as defendants in or otherwise 
made parties to domestic U.S. legal, arbitration, or administrative 
proceedings;
    (3) Initiation and conduct of domestic U.S. legal, arbitration, or 
administrative proceedings in defense of property interests subject to 
U.S. jurisdiction;
    (4) Representation of persons before any federal or state agency 
with respect to the imposition, administration, or enforcement of U.S. 
sanctions against such persons; and
    (5) Provision of legal services in any other context in which 
prevailing U.S. law requires access to legal counsel at public expense.
    (b) The provision of any other legal services to persons whose 
property and interests in property are blocked pursuant to 
Sec. 510.201(b), 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 Sec. 510.201 is prohibited unless licensed pursuant to this 
part.



Sec. 510.507  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services in the 
United States to persons whose property and interests in property are 
blocked pursuant to Sec. 510.201(b) is authorized, provided that all 
receipt of payment for such services must be specifically licensed.

Subparts F-G [Reserved]



                          Subpart H_Procedures



Sec. 510.801  Procedures.

    For license application procedures and procedures relating to 
amendments, modifications, or revocations of licenses; administrative 
decisions; rulemaking; and requests for documents pursuant to the 
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see 
part 501, subpart E, of this chapter.

[76 FR 35741, June 20, 2011]



Sec. 510.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13466 of June 26, 2008 (73 FR 36787, June 
27, 2008), Executive Order 13551 of August 30, 2010 (75 FR 53837, 
September 1, 2010), Executive Order 13570 of April 18, 2011 (76 FR 
22291, April 20, 2011), and any further Executive orders relating to the 
national emergency declared in Executive Order 13466 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.

[76 FR 35741, June 20, 2011]



                    Subpart I_Paperwork Reduction Act



Sec. 510.901  Paperwork Reduction Act notice.

    For approval by the Office of Management and Budget (``OMB'') under 
the Paperwork Reduction Act of 1995

[[Page 60]]

(44 U.S.C. 3507) of information collections relating to recordkeeping 
and reporting requirements, licensing procedures (including those 
pursuant to statements of licensing policy), and other procedures, see 
Sec. 501.901 of this chapter. An agency may not conduct or sponsor, and 
a person is not required to respond to, a collection of information 
unless it displays a valid control number assigned by OMB.



           Sec. Appendix A to Part 510--Executive Order 13466

                 Executive Order 13466 of June 26, 2008

 Continuing Certain Restrictions With Respect to North Korea and North 
                            Korean Nationals

    By the authority vested in me as President by the Constitution and 
the laws of the United States of America, including the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the 
National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), and section 301 
of title 3, United States Code, I, GEORGE W. BUSH, President of the 
United States of America, find that the current existence and risk of 
the proliferation of weapons-usable fissile material on the Korean 
Peninsula constitute an unusual and extraordinary threat to the national 
security and foreign policy of the United States, and I hereby declare a 
national emergency to deal with that threat. I further find that, as we 
deal with that threat through multilateral diplomacy, it is necessary to 
continue certain restrictions with respect to North Korea that would 
otherwise be lifted pursuant to a forthcoming proclamation that will 
terminate the exercise of authorities under the Trading With the Enemy 
Act (50 U.S.C. App. 1 et seq.) (TWEA) with respect to North Korea.
    Accordingly, I hereby order:
    Section 1. Except to the extent provided in statutes or in 
regulations, orders, directives, or licenses that may be issued pursuant 
to this order, and notwithstanding any contract entered into or any 
license or permit granted prior to the date of this order, the following 
are blocked and may not be transferred, paid, exported, withdrawn, or 
otherwise dealt in:
    All property and interests in property of North Korea or a North 
Korean national that, pursuant to the President's authorities under the 
TWEA, the exercise of which has been continued in accordance with 
section 101(b) of Public Law 95-223 (91 Stat. 1625; 50 U.S.C. App. 5(b) 
note), were blocked as of June 16, 2000, and remained blocked 
immediately prior to the date of this order.
    Sec. 2. Except to the extent provided in statutes or in regulations, 
orders, directives, or licenses that may be issued pursuant to this 
order, and notwithstanding any contract entered into or any license or 
permit granted prior to the date of this order, United States persons 
may not register a vessel in North Korea, obtain authorization for a 
vessel to fly the North Korean flag, or own, lease, operate, or insure 
any vessel flagged by North Korea.
    Sec. 3. (a) 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 
this order is prohibited.
    (b) Any conspiracy formed to violate any of the prohibitions set 
forth in this order is prohibited.
    Sec. 4. For the purposes of this order:
    (a) The term ``person'' means an individual or entity;
    (b) The term ``entity'' means a partnership, association, trust, 
joint venture, corporation, group, subgroup, or other organization; and
    (c) The term ``United States person'' means any United States 
citizen, permanent resident alien, entity organized under the laws of 
the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States.
    Sec. 5. The Secretary of the Treasury, after consultation with the 
Secretary of State, is hereby authorized to take such actions, including 
the promulgation of rules and regulations, and to employ all powers 
granted to the President by IEEPA as may be necessary to carry out the 
purposes of this order. The Secretary of the Treasury may redelegate any 
of these functions to other officers and agencies of the United States 
Government consistent with applicable law. All agencies of the United 
States Government are hereby directed to take all appropriate measures 
within their authority to carry out the provisions of this order.
    Sec. 6. The Secretary of the Treasury, after consultation with the 
Secretary of State, is hereby authorized to submit the recurring and 
final reports to the Congress on the national emergency declared in this 
order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and 
section 204(c) of IEEPA (50 U.S.C. 1703(c)).
    Sec. 7. This order is not intended to, and does not, create any 
right or benefit, substantive or procedural, enforceable at law or in 
equity by any party against the United States, its departments, 
agencies, instrumentalities, or entities, its officers or employees, or 
any other person.

George W. Bush,
THE WHITE HOUSE,
June 26, 2008.

[[Page 61]]



           Sec. Appendix B to Part 510--Executive Order 13551

                Executive Order 13551 of August 30, 2010

    Blocking Property of Certain Persons With Respect to North Korea

    By the authority vested in me as President by the Constitution and 
the laws of the United States of America, including the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the 
National Emergencies Act (50 U.S.C. 1601 et seq.), section 5 of the 
United Nations Participation Act of 1945 (22 U.S.C. 287c) (UNPA), and 
section 301 of title 3, United States Code; in view of United Nations 
Security Council Resolution (UNSCR) 1718 of October 14, 2006, and UNSCR 
1874 of June 12, 2009; and to take additional steps with respect to the 
situation in North Korea.
    I, BARACK OBAMA, President of the United States of America, hereby 
expand the scope of the national emergency declared in Executive Order 
13466 of June 26, 2008, finding that the continued actions and policies 
of the Government of North Korea, manifested most recently by its 
unprovoked attack that resulted in the sinking of the Republic of Korea 
Navy ship Cheonan and the deaths of 46 sailors in March 2010; its 
announced test of a nuclear device and its missile launches in 2009; its 
actions in violation of UNSCRs 1718 and 1874, including the procurement 
of luxury goods; and its illicit and deceptive activities in 
international markets through which it obtains financial and other 
support, including money laundering, the counterfeiting of goods and 
currency, bulk cash smuggling, and narcotics trafficking, destabilize 
the Korean peninsula and imperil U.S. Armed Forces, allies, and trading 
partners in the region, and thereby constitute an unusual and 
extraordinary threat to the national security, foreign policy, and 
economy of the United States.
    I hereby order:
    Section 1. (a) All property and interests in property that are in 
the United States, that hereafter come within the United States, or that 
are or hereafter come within the possession or control of any United 
States person, including any overseas branch, of the following persons 
are blocked and may not be transferred, paid, exported, withdrawn, or 
otherwise dealt in:
    (i) The persons listed in the Annex to this order; and
    (ii) Any person determined by the Secretary of the Treasury, in 
consultation with the Secretary of State:
    (A) To have, directly or indirectly, imported, exported, or 
reexported to, into, or from North Korea any arms or related materiel;
    (B) To have, directly or indirectly, provided training, advice, or 
other services or assistance, or engaged in financial transactions, 
related to the manufacture, maintenance, or use of any arms or related 
materiel to be imported, exported, or reexported to, into, or from North 
Korea, or following their importation, exportation, or reexportation to, 
into, or from North Korea;
    (C) To have, directly or indirectly, imported, exported, or 
reexported luxury goods to or into North Korea;
    (D) To have, directly or indirectly, engaged in money laundering, 
the counterfeiting of goods or currency, bulk cash smuggling, narcotics 
trafficking, or other illicit economic activity that involves or 
supports the Government of North Korea or any senior official thereof;
    (E) To have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services to or in 
support of, the activities described in subsections (a)(ii)(A)-(D) of 
this section or any person whose property and interests in property are 
blocked pursuant to this order;
    (F) To be owned or controlled by, or to have acted or purported to 
act for or on behalf of, directly or indirectly, any person whose 
property and interests in property are blocked pursuant to this order; 
or (G) to have attempted to engage in any of the activities described in 
subsections (a)(ii)(A)-(F) of this section.
    (b) I hereby determine that, to the extent section 203(b)(2) of 
IEEPA (50 U.S.C. 1702(b)(2)) may apply, the making of donations of the 
types of articles specified in such section by, to, or for the benefit 
of any person whose property and interests in property are blocked 
pursuant to this order would seriously impair my ability to deal with 
the national emergency declared in Executive Order 13466 and expanded in 
scope in this order, and I hereby prohibit such donations as provided by 
subsection (a) of this section.
    (c) The prohibitions in subsection (a) of this section include, but 
are not limited to:
    (i) 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 this order; and
    (ii) The receipt of any contribution or provision of funds, goods, 
or services from any such person.
    (d) The prohibitions in subsection (a) of this section apply except 
to the extent provided by statutes, or in regulations, orders, 
directives, or licenses that may be issued pursuant to this order, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date of this order.
    Sec. 2. (a) Any transaction by a United States person or within the 
United States that evades or avoids, has the purpose of evading or 
avoiding, causes a violation of, or

[[Page 62]]

attempts to violate any of the prohibitions set forth in this order is 
prohibited.
    (b) Any conspiracy formed to violate any of the prohibitions set 
forth in this order is prohibited.
    Sec. 3. The provisions of Executive Order 13466 remain in effect, 
and this order does not affect any action taken pursuant to that order.
    Sec. 4. For the purposes of this order:
    (a) The term ``person'' means an individual or entity;
    (b) The term ``entity'' means a partnership, association, trust, 
joint venture, corporation, group, subgroup, or other organization;
    (c) The term ``United States person'' means any United States 
citizen, permanent resident alien, entity organized under the laws of 
the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States;
    (d) The term ``North Korea'' includes the territory of the 
Democratic People's Republic of Korea and the Government of North Korea;
    (e) The term ``Government of North Korea'' means the Government of 
the Democratic People's Republic of Korea, its agencies, 
instrumentalities, and controlled entities; and
    (f) The term ``luxury goods'' includes those items listed in 15 CFR 
746.4(b)(l) and Supplement No. 1 to part 746 and similar items.
    Sec. 5. For those persons whose property and interests in property 
are blocked pursuant to this order who might have a constitutional 
presence in the United States, I find that because of the ability to 
transfer funds or other assets instantaneously, prior notice to such 
persons of measures to be taken pursuant to this order would render 
these measures ineffectual. I therefore determine that for these 
measures to be effective in addressing the national emergency declared 
in Executive Order 13466 and expanded in scope in this order, there need 
be no prior notice of a listing or determination made pursuant to 
section 1(a) of this order.
    Sec. 6. The Secretary of the Treasury, in consultation with the 
Secretary of State, is hereby authorized to take such actions, including 
the promulgation of rules and regulations, and to employ all powers 
granted to the President by IEEPA and the UNPA, as may be necessary to 
carry out the purposes of this order. The Secretary of the Treasury may 
redelegate any of these functions to other officers and agencies of the 
United States Government consistent with applicable law. All agencies of 
the United States Government are hereby directed to take all appropriate 
measures within their authority to carry out the provisions of this 
order.
    Sec. 7. The Secretary of the Treasury, in consultation with the 
Secretary of State, is hereby authorized to determine that circumstances 
no longer warrant the blocking of the property and interests in property 
of a person listed in the Annex to this order, and to take necessary 
action to give effect to that determination.
    Sec. 8. This order is not intended to, and does not, create any 
right or benefit, substantive or procedural, enforceable at law or in 
equity by any party against the United States, its departments, 
agencies, or entities, its officers, employees, agents, or any other 
person.
    Sec. 9. This order is effective at 12:01 p.m., eastern daylight time 
on August 30, 2010.

Barack Obama,
THE WHITE HOUSE,
August 30, 2010.

                                  ANNEX

                               Individual

1. KIM Yong Chol [born 1946 or 1947]

                                Entities

1. Green Pine Associated Corporation
2. Reconnaissance General Bureau
3. Office 39



           Sec. Appendix C to Part 510--Executive Order 13570

                 Executive Order 13570 of April 18, 2011

      Prohibiting Certain Transactions With Respect to North Korea

    By the authority vested in me as President by the Constitution and 
the laws of the United States of America, including the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the 
National Emergencies Act (50 U.S.C. 1601 et seq.), section 5 of the 
United Nations Participation Act of 1945 (22 U.S.C. 287c) (UNPA), and 
section 301 of title 3, United States Code, and in view of United 
Nations Security Council Resolution (UNSCR) 1718 of October 14, 2006, 
and UNSCR 1874 of June 12, 2009,
    I, BARACK OBAMA, President of the United States of America, in order 
to take additional steps to address the national emergency declared in 
Executive Order 13466 of June 26, 2008, and expanded in Executive Order 
13551 of August 30, 2010, that will ensure implementation of the import 
restrictions contained in UNSCRs 1718 and 1874 and complement the import 
restrictions provided for in the Arms Export Control Act (22 U.S.C. 2751 
et seq.), hereby order:
    Section 1. Except to the extent provided in statutes or in licenses, 
regulations, orders, or directives that may be issued pursuant to this 
order, and notwithstanding any contract entered into or any license or 
permit granted

[[Page 63]]

prior to the date of this order, the importation into the United States, 
directly or indirectly, of any goods, services, or technology from North 
Korea is prohibited.
    Sec. 2. (a) Any transaction by a United States person or within the 
United States that evades or avoids, has the purpose of evading or 
avoiding, causes a violation of, or attempts to violate any of the 
prohibitions set forth in this order is prohibited.
    (b) Any conspiracy formed to violate any of the prohibitions set 
forth in this order is prohibited.
    Sec. 3. The provisions of Executive Orders 13466 and 13551 remain in 
effect, and this order does not affect any action taken pursuant to 
those orders.
    Sec. 4. For the purposes of this order:
    (a) The term ``person'' means an individual or entity;
    (b) The term ``entity'' means a partnership, association, trust, 
joint venture, corporation, group, subgroup, or other organization;
    (c) The term ``United States person'' means any United States 
citizen, permanent resident alien, entity organized under the laws of 
the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States;
    (d) The term ``North Korea'' includes the territory of the 
Democratic People's Republic of Korea and the Government of North Korea; 
and
    (e) The term ``Government of North Korea'' means the Government of 
the Democratic People's Republic of Korea, its agencies, 
instrumentalities, and controlled entities.
    Sec. 5. The Secretary of the Treasury, in consultation with the 
Secretary of State, is hereby authorized to take such actions, including 
the promulgation of rules and regulations, and to employ all powers 
granted to the President by IEEPA and the UNPA as may be necessary to 
carry out the purposes of this order. The Secretary of the Treasury may 
redelegate any of these functions to other officers and agencies of the 
United States Government consistent with applicable law. All agencies of 
the United States Government are hereby directed to take all appropriate 
measures within their authority to carry out the provisions of this 
order.
    Sec. 6. This order is not intended to, and does not, create any 
right or benefit, substantive or procedural, enforceable at law or in 
equity by any party against the United States, its departments, 
agencies, or entities, its officers, employees, or agents, or any other 
person.
    Sec. 7. This order is effective at 12:01 a.m. eastern daylight time 
on April 19, 2011.

Barack Obama,

THE WHITE HOUSE,

April 18, 2011.

[76 FR 35741, June 20, 2011]



PART 515_CUBAN ASSETS CONTROL REGULATIONS--Table of Contents



      Subpart A_Relation of This Part to Other Laws and Regulations

Sec.
515.101  Relation of this part to other laws and regulations.

                         Subpart B_Prohibitions

515.201  Transactions involving designated foreign countries or their 
          nationals; effective date.
515.202  Transactions with respect to securities registered or inscribed 
          in the name of a designated national.
515.203  Effect of transfers violating the provisions of this part.
515.204  Importation of and dealings in certain merchandise.
515.205  Holding of certain types of blocked property in interest-
          bearing accounts.
515.206  Exempt transactions.
515.207  Entry of vessels engaged in trade with Cuba.
515.208  Restrictions on loans, credits and other financing.

                      Subpart C_General Definitions

515.301  Foreign country.
515.302  National.
515.303  Nationals of more than one foreign country.
515.305  Designated national.
515.306  Specially designated national.
515.307  Unblocked national.
515.308  Person.
515.309  Transactions.
515.310  Transfer.
515.311  Property; property interests.
515.312  Interest.
515.313  Property subject to the jurisdiction of the United States.
515.314  Banking institution.
515.316  License.
515.317  General license.
515.318  Specific license.
515.319  Blocked account.
515.320  Domestic bank.
515.321  United States; continental United States.
515.322  Authorized trade territory; member of the authorized trade 
          territory.
515.323  Occupied area.
515.325  National securities exchange.
515.326  Custody of safe deposit boxes.
515.327  Blocked estate of a decedent.
515.329  Person subject to the jurisdiction of the United States; person 
          subject to U.S. jurisdiction.

[[Page 64]]

515.330  Person within the United States.
515.331  Merchandise.
515.332  Information and informational materials.
515.333  Depository institution.
515.334  United States national.
515.335  Permanent resident alien.
515.336  Confiscated.
515.337  Prohibited officials of the Government of Cuba.
515.338  Prohibited members of the Cuban Communist Party.
515.339  Close relative.

                        Subpart D_Interpretations

515.401  Reference to amended sections.
515.402  Effect of amendment of sections of this part or of other 
          orders, etc.
515.403  Termination and acquisition of the interest of a designated 
          national.
515.404  Transactions between principal and agent.
515.405  Exportation of securities, currency, checks, drafts and 
          promissory notes.
515.406  Drafts under irrevocable letters of credit; documentary drafts.
515.407  Administration of blocked estates of decedents.
515.408  Access to certain safe deposit boxes prohibited.
515.409  Certain payments to a designated foreign country and nationals 
          through third countries.
515.410  Dealing abroad in Cuban-origin commodities.
515.411-515.413  [Reserved]
515.415  Travel to Cuba; transportation of certain Cuban nationals.
515.416-515.419  [Reserved]
515.420  Travel to Cuba.
515.421  Transactions ordinarily incident to a licensed transaction.

 Subpart E_Licenses, Authorizations, and Statements of Licensing Policy

515.501  General and specific licensing procedures.
515.502  Effect of subsequent license or authorization.
515.503  Exclusion from licenses and authorizations.
515.504  Certain judicial proceedings with respect to property of 
          designated nationals.
515.505  Certain Cuban nationals unblocked.
515.506-515.507  [Reserved]
515.508  Payments to blocked accounts in domestic banks.
515.509  Entries in certain accounts for normal service charges.
515.510  Payments to the United States, States and political 
          subdivisions.
515.511  Transactions by certain business enterprises.
515.512  Provision of certain legal services authorized.
515.513  Purchase and sale of certain securities.
515.514  Payment of dividends and interest on and redemption and 
          collection of securities.
515.515  Transfers of securities to blocked accounts in domestic banks.
515.516  Voting and soliciting of proxies on securities.
515.517  Access to safe deposit boxes under certain conditions.
515.518  [Reserved]
515.519  Limited payments from accounts of United States citizens 
          abroad.
515.520  Payments from accounts of United States citizens in employ of 
          United States in foreign countries and certain other persons.
515.521  U.S. assets of certain Cuban corporations.
515.522  [Reserved]
515.523  Transactions incident to the administration of decedents' 
          estates.
515.524  Payment from, and transactions in the administration of certain 
          trusts and estates.
515.525  Certain transfers as a consequence of the existence or change 
          of marital status authorized.
515.526  Transactions involving blocked life insurance policies.
515.527  Certain transactions with respect to United States intellectual 
          property.
515.528  Certain transactions with respect to blocked foreign 
          intellectual property.
515.529  Powers of attorney.
515.530  Exportation of powers of attorney or instructions relating to 
          certain types of transactions.
515.532  Completion of certain securities transactions.
515.533  Exportations from the United States to Cuba; reexportations to 
          Cuba; importation and servicing or repair of certain items 
          previously exported or reexported to Cuba.
515.534  Negotiation of, and entry into, contingent contracts relating 
          to transactions prohibited by this part.
515.535  Exchange of certain securities.
515.536  Certain transactions with respect to merchandise affected by 
          Sec. 515.204.
515.540  [Reserved]
515.542  Mail and telecommunications-related transactions.
515.543  Proof of origin.
515.544  Certain gifts sent to the United States.
515.545  Transactions related to information and informational 
          materials.
515.546  Accounts of Cuban sole proprietorships.
515.547  Certain transactions related to medical research and Cuban-
          origin pharmaceuticals; research samples.

[[Page 65]]

515.548  Overflight payments, emergency landings, and air ambulance 
          services authorized.
515.549  Bank accounts and other property of non-Cuban citizens who were 
          in Cuba on or after July 8, 1963.
515.550  Certain vessel transactions authorized.
515.551  Joint bank accounts.
515.552  Proceeds of insurance policies.
515.553  Bank accounts of official representatives in Cuba of foreign 
          governments.
515.554  Transfers of abandoned property under State laws.
515.555  Assets of Cuban firms wholly or substantially owned by U.S. 
          citizens.
515.556  [Reserved]
515.557  Accounts of Cuban partnerships.
515.558  Bunkering of Cuban vessels and fueling of Cuban aircraft by 
          American-owned or controlled foreign firms.
515.559  Certain export and import transactions by U.S.-owned or -
          controlled foreign firms.
515.560  Travel-related transactions to, from, and within Cuba by 
          persons subject to U.S. jurisdiction.
515.561  Family visits.
515.562  Official business of the U.S. government, foreign governments, 
          and certain intergovernmental organizations.
515.563  Journalistic activities in Cuba.
515.564  Professional research and professional meetings in Cuba.
515.565  Educational activities.
515.566  Religious activities in Cuba.
515.567  Public performances, clinics, workshops, athletic and other 
          competitions, and exhibitions.
515.568  [Reserved]
515.569  Foreign passengers' baggage.
515.570  Remittances.
515.571  Certain transactions incident to travel to, from, and within 
          the United States by Cuban nationals.
515.572  Provision of travel, carrier, other transportation-related, and 
          remittance forwarding services.
515.573  Physical presence and business presence in Cuba authorized; 
          Cuban news bureaus.
515.574  Support for the Cuban people.
515.575  Humanitarian projects.
515.576  Activities of private foundations or research or educational 
          institutes.
515.577  Authorized transactions necessary and ordinarily incident to 
          publishing.
515.578  Exportation, reexportation, and importation of certain 
          internet-based services; importation of software.
515.579  Funds transfers for third-country official missions and certain 
          intergovernmental organizations.
515.580  Global insurance policies covering individuals traveling to 
          Cuba.
515.581  Transactions related to conferences in third countries.
515.582  Importation of certain goods and services produced by 
          independent Cuban entrepreneurs.
515.583  Provision of certain goods and services to Cuban nationals 
          sequestered aboard vessels in U.S. ports.
515.584  Certain financial transactions involving Cuba.
515.585  Certain transactions in third countries.
515.586  Cuban official missions in the United States.
515.587  Remittances from Cuban nationals to persons subject to U.S. 
          jurisdiction.
515.588  Certain Cuban legal services authorized.
515.589  Authorization of emergency medical services.
515.590  Certain grants, scholarships, and awards.
515.591  Services related to infrastructure.

                            Subpart F_Reports

515.601  Records and reports.

                           Subpart G_Penalties

515.701  Penalties.

                          Subpart H_Procedures

515.801  Procedures.
515.802  Delegation by the Secretary of the Treasury.

                   Subpart I_Miscellaneous Provisions

515.901  Paperwork Reduction Act notice.

    Authority: 22 U.S.C. 2370(a), 6001-6010, 7201-7211; 31 U.S.C. 
321(b); 50 U.S.C. 4301- 4341; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 
2461 note); Pub. L. 104-114, 110 Stat. 785 (22 U.S.C. 6021-6091); Pub. 
L. 105-277, 112 Stat. 2681; Pub. L. 111-8, 123 Stat. 524; Pub. L. 111-
117, 123 Stat. 3034; E.O. 9193, 7 FR 5205, 3 CFR, 1938-1943 Comp., p. 
1174; E.O. 9989, 13 FR 4891, 3 CFR, 1943-1948 Comp., p. 748; Proc. 3447, 
27 FR 1085, 3 CFR, 1959-1963 Comp., p. 157; E.O. 12854, 58 FR 36587, 3 
CFR, 1993 Comp., p. 614.

    Source: 28 FR 6974, July 9, 1963, unless otherwise noted.



      Subpart A_Relation of This Part to Other Laws and Regulations



Sec. 515.101  Relation of this part to other laws and regulations.

    (a) This part is separate from, and independent of, the other parts 
of this chapter with the exception of part 501 of this chapter, the 
recordkeeping and reporting requirements and license application and 
other procedures of which

[[Page 66]]

apply to this part. No license or authorization contained in or issued 
pursuant to one of those parts, or any other provision of law, 
authorizes any transaction prohibited by this part.
    (b) No license or authorization contained in or issued pursuant to 
this part shall be deemed to authorize any transaction prohibited by any 
law other than the Trading With the Enemy Act, 50 U.S.C. App. 5(b), as 
amended, the Foreign Assistance Act of 1961, 22 U.S.C. 2370, or any 
proclamation, order, regulation or license issued pursuant thereto.

[50 FR 27437, July 3, 1985, as amended at 62 FR 45106, Aug. 25, 1997]



                         Subpart B_Prohibitions



Sec. 515.201  Transactions involving designated foreign countries
or their nationals; effective date.

    (a) All of the following transactions are prohibited, except as 
specifically authorized by the Secretary of the Treasury (or any person, 
agency, or instrumentality designated by him) by means of regulations, 
rulings, instructions, licenses, or otherwise, if either such 
transactions are by, or on behalf of, or pursuant to the direction of a 
foreign country designated under this part, or any national thereof, or 
such transactions involve property in which a foreign country designated 
under this part, or any national thereof, has at any time on or since 
the effective date of this section had any interest of any nature 
whatsoever, direct or indirect:
    (1) All transfers of credit and all payments between, by, through, 
or to any banking institution or banking institutions wheresoever 
located, with respect to any property subject to the jurisdiction of the 
United States or by any person (including a banking institution) subject 
to the jurisdiction of the United States;
    (2) All transactions in foreign exchange by any person within the 
United States; and
    (3) The exportation or withdrawal from the United States of gold or 
silver coin or bullion, currency or securities, or the earmarking of any 
such property, by any person within the United States.
    (b) All of the following transactions are prohibited, except as 
specifically authorized by the Secretary of the Treasury (or any person, 
agency, or instrumentality designated by him) by means of regulations, 
rulings, instructions, licenses, or otherwise, if such transactions 
involve property in which any foreign country designated under this 
part, or any national thereof, has at any time on or since the effective 
date of this section had any interest of any nature whatsoever, direct 
or indirect:
    (1) All dealings in, including, without limitation, transfers, 
withdrawals, or exportations of, any property or evidences of 
indebtedness or evidences of ownership of property by any person subject 
to the jurisdiction of the United States; and
    (2) All transfers outside the United States with regard to any 
property or property interest subject to the jurisdiction of the United 
States.
    (c) Any transaction for the purpose or which has the effect of 
evading or avoiding any of the prohibitions set forth in paragraph (a) 
or (b) of this section is hereby prohibited.
    (d) For the purposes of this part, the term foreign country 
designated under this part and the term designated foreign country mean 
Cuba and the term effective date and the term effective date of this 
section mean with respect to Cuba, or any national thereof, 12:01 a.m., 
e.s.t., July 8, 1963.
    (e) When a transaction results in the blocking of funds at a banking 
institution pursuant to this section and a party to the transaction 
believes the funds have been blocked due to mistaken identity, that 
party may seek to have such funds unblocked pursuant to the 
administrative procedures set forth in Sec. 501.806 of this chapter.

[28 FR 6974, July 9, 1963, as amended at 62 FR 45106, Aug. 25, 1997]



Sec. 515.202  Transactions with respect to securities registered
or inscribed in the name of a designated national.

    Unless authorized by a license expressly referring to this section, 
the acquisition, transfer (including the transfer on the books of any 
issuer or agent thereof), disposition, transportation, importation, 
exportation, or

[[Page 67]]

withdrawal of, or the endorsement or guaranty of signatures on or 
otherwise dealing in any security (or evidence thereof) registered or 
inscribed in the name of any designated national is prohibited 
irrespective of the fact that at any time (either prior to, on, or 
subsequent to the ``effective date'') the registered or inscribed owner 
thereof may have, or appears to have, assigned, transferred or otherwise 
disposed of any such security.



Sec. 515.203  Effect of transfers violating the provisions of this part.

    (a) Any transfer after the ``effective date'' which is in violation 
of any provision of this part or of any regulation, ruling, instruction, 
license, or other direction or authorization thereunder and involves any 
property in which a designated national has or has had an interest since 
such ``effective date'' 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.
    (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 interest in, any property in which a designated 
national has or has had an interest since the ``effective date'' unless 
the person with whom such property is held or maintained had written 
notice of the transfer or by any written evidence had recognized such 
transfer prior to such ``effective date.''
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by or pursuant to the direction or authorization of 
the Secretary of the Treasury before, during or after a transfer shall 
validate such transfer or render it enforceable to the same extent as it 
would be valid or enforceable but for the provisions of section 5(b) of 
the Trading With the Enemy Act, as amended, and this part and any 
ruling, order, regulation, direction or instruction issued hereunder.
    (d) Transfers of property which otherwise would be null and void, or 
unenforceable by virtue of the provisions of this section shall not be 
deemed to be null and void, or unenforceable pursuant to such 
provisions, as to any person with whom such property was held or 
maintained (and as to such person only) in cases in which such person is 
able to establish each of the following:
    (1) Such transfer did not represent a willful violation of the 
provisions of this part by the person with whom such property was held 
or maintained;
    (2) The person with whom such property was held or maintained did 
not have reasonable cause to know or suspect, in view of all the facts 
and circumstances known or available to such person, that such transfer 
required a license or authorization by or pursuant to the provisions of 
this part and was not so licensed or authorized or if a license or 
authorization did purport to cover the transfer, that such license or 
authorization had been obtained by misrepresentation or the withholding 
of material facts or was otherwise fraudulently obtained; and
    (3) Promptly upon discovery that:
    (i) Such transfer was in violation of the provisions of this part or 
any regulation, ruling, instruction, license or other direction or 
authorization thereunder, or
    (ii) Such transfer was not licensed or authorized by the Secretary 
of the Treasury, or
    (iii) If a license did purport to cover the transfer, such license 
had been obtained by misrepresentation or the withholding of material 
facts or was otherwise fraudulently obtained;

the person with whom such property was held or maintained filed with the 
Treasury Department, Washington, D.C., a report in triplicate setting 
forth in full the circumstances relating to such transfer. The filing of 
a report in accordance with the provisions of this paragraph shall not 
be deemed to be compliance or evidence of compliance with paragraphs (d) 
(1) and (2) of this section.
    (e) Unless licensed or authorized by Sec. 515.504 or otherwise 
licensed or authorized pursuant to this chapter 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 the interest of a designated 
foreign country or national thereof.

[[Page 68]]

    (f) For the purpose of this section the term property includes gold, 
silver, bullion, currency, coin, credit, securities (as that term is 
defined in section 2(1) of the Securities Act of 1933, as amended), 
bills of exchange, notes, drafts, acceptances, checks, letters of 
credit, book credits, debts, claims, contracts, negotiable documents of 
title, mortgages, liens, annuities, insurance policies, options and 
futures in commodities, and evidences of any of the foregoing. The term 
property shall not, except to the extent indicated, be deemed to include 
chattels or real property.

[28 FR 6974, July 9, 1963, as amended at 28 FR 7941, Aug. 3, 1963]



Sec. 515.204  Importation of and dealings in certain merchandise.

    (a) Except as specifically authorized by the Secretary of the 
Treasury (or any person, agency, or instrumentality designated by him) 
by means of regulations, rulings, instructions, licenses, or otherwise, 
no person subject to the jurisdiction of the United States may purchase, 
transport, import, or otherwise deal in or engage in any transaction 
with respect to any merchandise outside the United States if such 
merchandise:
    (1) Is of Cuban origin; or
    (2) Is or has been located in or transported from or through Cuba; 
or
    (3) Is made or derived in whole or in part of any article which is 
the growth, produce or manufacture of Cuba.
    (b) [Reserved]



Sec. 515.205  Holding of certain types of blocked property in interest
-bearing accounts.

    (a) Except as provided by paragraphs (d), (e) and (f) of this 
section, or as authorized by the Secretary of the Treasury or his 
delegate by specific license, any person holding any property included 
in paragraph (h) of this section is prohibited from holding, 
withholding, using, transferring, engaging in any transactions 
involving, or exercising any right, power, or privilege with respect to 
any such property, unless it is held in an interest-bearing account in a 
domestic bank.
    (b) Any person presently holding property subject to the provisions 
of paragraph (a) of this section which, as of the effective date of this 
section, is not being held in accordance with the provisions of that 
paragraph shall transfer such property to or hold such property or cause 
such property to be held in an interest-bearing account in any domestic 
bank within 30 days of the effective date of this section.
    (c) Any person holding any checks or drafts subject to the 
provisions of Sec. 515.201 is authorized and directed, wherever possible 
consistent with state law (except as otherwise specifically provided in 
paragraph (c)(3) of this section), to negotiate or present for 
collection or payment such instruments and credit the proceeds to 
interest-bearing accounts. Any transaction by any person incident to the 
negotiation, processing. presentment, collection or payment of such 
instruments and deposit of the proceeds into an interest-bearing account 
is hereby authorized: Provided that:
    (1) The transaction does not represent, directly or indirectly, a 
transfer of the interest of a designated national to any other country 
or person;
    (2) The proceeds are held in a blocked account indicating the 
designated national who is the payee or owner of the instrument; and,
    (3) In the case of a blocked check or draft which has been purchased 
by the maker/drawer from the drawee bank (e.g., cashier's check, money 
order, or traveler's check) or which is drawn against a presently 
existing account, such bank, on presentment of the instrument in 
accordance with the provisions of this section, shall either:
    (i) Pay the instrument (subject to paragraphs (c)(1) and (2) of this 
section) or
    (ii) Credit a blocked account on its books with the amount payable 
on the instrument.

In either event, the blocked account shall be identified as resulting 
from the proceeds of a blocked check or draft, and the identification 
shall include a reference to the names of both the maker and payee of 
the instrument.
    (d) Property subject to the provisions of paragraph (a) or (b) of 
this section, held by a person claiming a set-off against such property, 
is exempt from the provisions of paragraphs (a), (b)

[[Page 69]]

and (c) of this section to the extent of the set-off: Provided however, 
That interest shall be due from 30 days after the effective date of this 
section if it should ultimately be determined that the claim to a set-
off is without merit.
    (e) Property subject to the provisions of paragraphs (a) and (b) of 
this section, held in a customer's account by a registered broker/dealer 
in securities, may continue to be held for the customer by the broker/
dealer provided interest is credited to the account on any balance not 
invested in securities in accordance with Sec. 515.513. The interest 
paid on such accounts by a broker/dealer who does not elect to hold such 
property for a customer's account in a domestic bank shall not be less 
than the maximum rate payable on the shortest time deposit available in 
any domestic bank in the jurisdiction in which the broker/dealer holds 
the account.
    (f) Property subject to the provisions of paragraphs (a) and (b) of 
this section, held by a state agency charged with the custody of 
abandoned or unclaimed property under Sec. 515.554 may continue to be 
held by the agency provided interest is credited to the blocked account 
in which the property is held by the agency, or the property is held by 
the agency in a blocked account in a domestic bank. The interest 
credited to such accounts by an agency which does not elect to hold such 
property in a domestic bank shall not be less than the maximum rate 
payable on the shortest time deposit available in any domestic bank in 
the state.
    (g) For purposes of this section, the term interest-bearing account 
means a blocked account earning interest at no less than the maximum 
rate payable on the shortest time deposit in the domestic bank where the 
account is held: Provided however, That such an account may include six-
month Treasury bills or insured certificates, with a maturity not 
exceeding six-months, appropriate to the amounts involved.
    (h) The following types of property are subject to paragraphs (a) 
and (b) of this section:
    (1) Any currency, bank deposit and bank accounts subject to the 
provisions of Sec. 515.201;
    (2) Any property subject to the provisions of Sec. 515.201 which 
consists, in whole or in part, of undisputed and either liquidated or 
matured debts, claims, obligations or other evidence of indebtedness, to 
the extent of any amount that is undisputed and liquidated or matured; 
and
    (3) Any proceeds resulting from the payment of an obligation under 
paragraph (c) of this section.
    (i) For purposes of this section, the term domestic bank includes 
any FSLIC-insured institution (as defined in 12 CFR 561.1).
    (j) For the purposes of this section the term person includes the 
United States Government or any agency or instrumentality thereof, 
except where the agency or instrumentality submits to the Office of 
Foreign Assets Control an opinion of its General Counsel that either:
    (1) It lacks statutory authority to comply with this section, or
    (2) The requirements of paragraphs (a) and (b) of this section are 
inconsistent with the statutory program under which it operates.

[44 FR 11770, Mar. 2, 1979]



Sec. 515.206  Exempt transactions.

    (a) Information and informational materials. (1) The importation 
from any country and the exportation to any country of information or 
informational materials as defined in Sec. 515.332, whether commercial 
or otherwise, regardless of format or medium of transmission, are exempt 
from the prohibitions and regulations of this part except for payments 
owed to Cuba for telecommunications services between Cuba and the United 
States, which are subject to the provisions of Sec. 515.542.
    (2) This section does not authorize transactions related to 
information or informational materials not fully created and in 
existence at the date of the transaction, or to the substantive or 
artistic alteration or enhancement of information or informational 
materials, or to the provision of marketing and business consulting 
services by a person subject to the jurisdiction of the United States. 
Such prohibited transactions include, without limitation, payment of 
advances for information or informational materials not yet

[[Page 70]]

created and completed, provision of services to market, produce or co-
produce, create or assist in the creation of information or 
informational materials, and payment of royalties to a designated 
national with respect to income received for enhancements or alterations 
made by persons subject to the jurisdiction of the United States to 
information or informational materials imported from a designated 
national.
    (3) This section does not authorize transactions incident to the 
transmission of restricted technical data as defined in the Export 
Administration Regulations, 15 CFR parts 730-774, or to the exportation 
of goods for use in the transmission of any data. The exportation of 
such goods to designated foreign countries is prohibited, as provided in 
Sec. 515.201 of this part and Sec. 785.1 of the Export Administration 
Regulations.
    (4) This section does not authorize transactions related to travel 
to Cuba when such travel is not otherwise authorized under Sec. 515.545.

    Note to paragraph (a): See Sec. 515.545 for general licenses 
authorizing certain travel-related and other transactions that are 
directly incident to the export, import, or transmission of 
informational materials and certain transactions related to the 
creation, dissemination, or artistic or other substantive alteration or 
enhancement of informational materials.

    (b) Donation of food. The prohibitions contained in this part do not 
apply to transactions incident to the donation of food to 
nongovernmental organizations or individuals in Cuba.

[54 FR 5233, Feb. 2, 1989, as amended at 60 FR 39256, Aug. 2, 1995; 64 
FR 25812, May 13, 1999; 81 FR 4584, Jan. 27, 2016]



Sec. 515.207  Entry of vessels engaged in trade with Cuba.

    Except as specifically authorized by the Secretary of the Treasury 
(or any person, agency or instrumentality designated by him), by means 
of regulations, rulings, instructions, licenses or otherwise,
    (a) No vessel that enters a port or place in Cuba to engage in the 
trade of goods or the purchase or provision of services, may enter a 
U.S. port for the purpose of loading or unloading freight for a period 
of 180 days from the date the vessel departed from a port or place in 
Cuba; and
    (b) No vessel carrying goods or passengers to or from Cuba or 
carrying goods in which Cuba or a Cuban national has an interest may 
enter a U.S. port with such goods or passengers on board.

    Note to Sec. 515.207: For the waiver of the prohibitions contained 
in this section for vessels engaged in certain trade and travel with 
Cuba, see Sec. 515.550.

[58 FR 34710, June 29, 1993, as amended at 66 FR 36687, July 12, 2001; 
80 FR 2292, Jan. 16, 2015; 80 FR 56918, Sept. 21, 2015]



Sec. 515.208  Restrictions on loans, credits and other financing.

    No United States national, permanent resident alien, or United 
States agency may knowingly make a loan, extend credit or provide other 
financing for the purpose of financing transactions involving 
confiscated property the claim to which is owned by a United States 
national, except for financing by a United States national owning such a 
claim for a transaction permitted under United States law.

[61 FR 37386, July 18, 1996]



                      Subpart C_General Definitions



Sec. 515.301  Foreign country.

    The term foreign country also includes, but not by way of 
limitation:
    (a) The state and the government of any such territory on or after 
the ``effective date'' as well as any political subdivision, agency, or 
instrumentality thereof or any territory, dependency, colony, 
protectorate, mandate, dominion, possession or place subject to the 
jurisdiction thereof,
    (b) Any other government (including any political subdivision, 
agency, or instrumentality thereof) to the extent and only to the extent 
that such government exercises or claims to exercise control, authority, 
jurisdiction or sovereignty over territory which on the ``effective 
date'' constituted such foreign country,
    (c) Any person to the extent that such person is, or has been, or to 
the extent that there is reasonable cause to believe that such person 
is, or has been, since the ``effective date,'' acting

[[Page 71]]

or purporting to act directly or indirectly for the benefit or on behalf 
of any of the foregoing, and
    (d) Any territory which on or since the ``effective date'' is 
controlled or occupied by the military, naval or police forces or other 
authority of such foreign country.



Sec. 515.302  National.

    (a) The term national when used with respect to a country shall 
include:
    (1) A subject or citizen of that country or any person who has been 
domiciled in or a permanent resident of that country at any time on or 
since the ``effective date,'' except persons who were permanent 
residents of or domiciled in that country in the service of the U.S. 
Government and persons whose transactions in that country were 
authorized by the Office of Foreign Assets Control.
    (2) Any partnership, association, corporation, or other organization 
that, on or since the effective date:
    (i) Was or has been organized under the laws of that country;
    (ii) Had or has had its principal place of business in that country; 
or
    (iii) Was or has been controlled by, or a substantial part of the 
stocks, share, bonds, debentures, notes, drafts, or other securities or 
obligations of which was or has been controlled by, directly or 
indirectly, that country and/or one or more nationals thereof.
    (3) Any organization's office or other sub-unit that is located 
within that country.
    (4) Any person to the extent that such person, on or since the 
``effective date'' was or has been acting or purporting to act directly 
or indirectly for the benefit or on behalf of any national of that 
country.
    (5) Any other person who there is reasonable cause to believe is a 
``national'' as defined in this section.
    (b) Persons who travel in Cuba do not become nationals of Cuba 
solely because of such travel.
    (c) The Secretary of the Treasury retains full power to determine 
that any person is or shall be deemed to be a ``national'' within the 
meaning of this section, and to specify the foreign country of which 
such person is or shall be deemed to be a national.

[28 FR 6974, July 9, 1963, as amended at 50 FR 27437, July 3, 1985; 64 
FR 25812, May 13, 1999; 68 FR 14144, Mar. 24, 2003]



Sec. 515.303  Nationals of more than one foreign country.

    (a) Any person who by virtue of any provision in this chapter is a 
national of more than one foreign country shall be deemed to be a 
national of each of such foreign countries.
    (b) In any case in which a person is a national of two or more 
designated foreign countries, as defined in this chapter, a license or 
authorization with respect to nationals of one of such designated 
foreign countries shall not be deemed to apply to such person unless a 
license or authorization of equal or greater scope is outstanding with 
respect to nationals of each other designated foreign country of which 
such person is a national.
    (c) In any case in which the combined interests of two or more 
designated foreign countries, as defined in this chapter, and/or 
nationals thereof are sufficient in the aggregate to constitute control 
or ownership of 25 per centum or more of the stock, shares, bonds, 
debentures, notes, drafts, or other securities or obligations of a 
partnership, association, corporation or other organization, but such 
control or a substantial part of such stock, shares, bonds, debentures, 
notes, drafts, or other securities or obligations is not held by any one 
such foreign country and/or national thereof, such partnership, 
association, corporation or other organization shall be deemed to be a 
national of each of such foreign countries.



Sec. 515.305  Designated national.

    For the purposes of this part, the term designated national shall 
mean Cuba and any national thereof including any person who is a 
specially designated national.



Sec. 515.306  Specially designated national.

    (a) The term specially designated national shall mean:
    (1) Any person who is determined by the Secretary of the Treasury to 
be a specially designated national,

[[Page 72]]

    (2) Any person who on or since the ``effective date'' has acted for 
or on behalf of the Government or authorities exercising control over a 
designated foreign country, or
    (3) Any partnership, association, corporation or other organization 
which on or since the ``effective date'' has been owned or controlled 
directly or indirectly by the Government or authorities exercising 
control over a designated foreign country or by any specially designated 
national.
    (b) [Reserved]

    Note to Sec. 515.306: Please refer to the Office of Foreign Assets 
Control's Specially Designated Nationals and Blocked Persons List (``SDN 
List'') for a non-exhaustive listing of persons determined to fall 
within this definition, whose property and interests in property 
therefore are blocked pursuant to this part. The SDN List entries for 
such persons include the identifier ``[CUBA].'' 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 persons seeking administrative reconsideration of their designation 
or that of a vessel as blocked, or who wish to assert that the 
circumstances resulting in the designation are no longer applicable.

[28 FR 6974, July 9, 1963, as amended at 61 FR 32938, June 26, 1996; 62 
FR 45106, Aug. 25, 1997; 76 FR 38585, June 30, 2011]



Sec. 515.307  Unblocked national.

    Any person licensed pursuant to Sec. 515.505 as an unblocked 
national shall, while so licensed, be regarded as a person who is not a 
national of any designated foreign country.

[80 FR 2292, Jan. 16, 2015]



Sec. 515.308  Person.

    The term person means an individual, partnership, association, 
corporation, or other organization.



Sec. 515.309  Transactions.

    The phrase transactions which involve property in which a designated 
foreign country, or any national thereof, has any interest of any nature 
whatsoever, direct or indirect, includes, but not by way of limitation:
    (a) Any payment or transfer to such designated foreign country or 
national thereof,
    (b) Any export or withdrawal from the United States to such 
designated foreign country, and
    (c) Any transfer of credit, or payment of an obligation, expressed 
in terms of the currency of such designated foreign country.



Sec. 515.310  Transfer.

    The term transfer shall mean any actual or purported act or 
transaction, whether or not evidenced by writing, and whether or not 
done or preformed within the United States, the purpose, intent, or 
effect of which is to create, surrender, release, 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 appointment of any agent, trustee, or other fiduciary; the creation 
or transfer of any lien; the issuance, docketing, filing, or the levy of 
or under any judgment, decree, attachment, execution, or other judicial 
or administrative process or order, or the service of any garnishment; 
the acquisition of any interest of any nature whatsoever by reason of a 
judgment or decree of any foreign country; the fulfillment of any 
condition, or the exercise of any power of appointment, power of 
attorney, or other power.



Sec. 515.311  Property; property interests.

    (a) Except as defined in Sec. 515.203(f) for the purposes of that 
section the terms property and property interest or property interests 
shall include, but not by way of limitation, money, checks, drafts, 
bullion, bank deposits, savings accounts, debts, indebtedness 
obligations, notes, debentures, stocks, bonds, coupons, and other 
financial securities, bankers' acceptances, mortgages, pledges, liens or 
other rights in the nature of security, warehouse receipts, bills of 
lading, trust receipts, bills of

[[Page 73]]

sale, any other evidences of title, ownership or indebtedness, powers of 
attorney, goods, wares, merchandise, chattels, stocks on hand, ships, 
goods on ships, real estate mortgages, deeds of trust, vendors' sales 
agreements, land contracts, real estate and any interest therein, 
leaseholds, ground rents, options, negotiable instruments, trade 
acceptances, royalties, book accounts, accounts payable, judgments, 
patents, trademarks, copyrights, contracts or licenses affecting or 
involving patents, trademarks or copyrights, insurance policies, safe 
deposit boxes and their contents, annuities, pooling agreements, 
contracts of any nature whatsoever, services, and any other property, 
real, personal, or mixed, tangible or intangible, or interest or 
interests therein, present, future or contingent.
    (b) As used in Sec. 515.208, the term property means any property 
(including patents, copyrights, trademarks, and any other form of 
intellectual property), whether real, personal, or mixed, and any 
present, future, or contingent right, security, or other interest 
therein, including any leasehold interest.

[28 FR 6974, July 9, 1963, as amended at 50 FR 27437, July 3, 1985; 56 
FR 49847, Oct. 2, 1991; 61 FR 37386, July 18, 1996]



Sec. 515.312  Interest.

    The term interest when used with respect to property shall mean an 
interest of any nature whatsoever, direct or indirect.



Sec. 515.313  Property subject to the jurisdiction of the United States.

    (a) The phrase property subject to the jurisdiction of the United 
States includes, without limitation, securities, whether registered or 
bearer, issued by:
    (1) The United States or any State, district, territory, possession, 
county, municipality, or any other subdivision or agency or 
instrumentality of any thereof; or
    (2) Any person with the United States whether the certificate which 
evidences such property or interest is physically located within or 
outside the United States.
    (b) The phrase property subject to the jurisdiction of the United 
States also includes, without limitation, securities, whether registered 
or bearer, by whomsoever issued, if the instrument evidencing such 
property or interest is physically located within the United States.



Sec. 515.314  Banking institution.

    The term banking institution shall include any person engaged 
primarily or incidentally in the business of banking, of granting or 
transferring credits, or of purchasing or selling foreign exchange or 
procuring purchases and sellers thereof, as principal or agent, or any 
person holding credits for others as a direct or incidental part of his 
business, or any broker; and, each principal, agent, home office, branch 
or correspondent of any person so engaged shall be regarded as a 
separate ``banking institution.''



Sec. 515.316  License.

    Except as otherwise specified, the term license shall mean any 
license or authorization contained in or issued pursuant to this part.



Sec. 515.317  General license.

    A general license is any license or authorization the terms of which 
are set forth in this part.



Sec. 515.318  Specific license.

    A specific license is any license or authorization issued pursuant 
to this part but not set forth in this part.

[28 FR 6974, July 9, 1963; 28 FR 7427, July 20, 1963]



Sec. 515.319  Blocked account.

    The term blocked account shall mean an account in which any 
designated national has an interest, with respect to which account 
payments, transfers or withdrawals or other dealings may not be made or 
effected except pursuant to an authorization or license authorizing such 
action. The term blocked account shall not be deemed to include accounts 
of unblocked nationals.

[28 FR 6974, July 9, 1963; 28 FR 7427, July 20, 1963]



Sec. 515.320  Domestic bank.

    The term domestic bank shall mean any branch or office within the 
United States of any of the following which is not a national of a 
designated foreign

[[Page 74]]

country; any bank or trust company incorporated under the banking laws 
of the United States or any State, territory, or district of the United 
States, or any private bank or banker subject to supervision and 
examination under the banking laws of the United States or of any State, 
territory or district of the United States. The Secretary of the 
Treasury may also authorize any other banking institution to be treated 
as a ``domestic bank'' for the purpose of this definition or for the 
purpose of any or all sections of this part.



Sec. 515.321  United States; continental United States.

    The term United States means the United States and all areas under 
the jurisdiction or authority thereof, including the Trust Territory of 
the Pacific Islands. The term continental United States means the States 
of the United States and the District of Columbia.

[49 FR 27144, July 2, 1984]



Sec. 515.322  Authorized trade territory; member of the authorized 
trade territory.

    (a) The term authorized trade territory includes all countries, 
including any colony, territory, possession, or protectorate, except 
those countries subject to sanctions pursuant to this chapter. The term 
does not include the United States.
    (b) The term member of the authorized trade territory shall mean any 
of the foreign countries or political subdivisions comprising the 
authorized trade territory.

[43 FR 51762, Nov. 7, 1978, as amended at 60 FR 54195, Oct. 20, 1995]



Sec. 515.323  Occupied area.

    The term occupied area shall mean any territory occupied by a 
designated foreign country which was not occupied by such country prior 
to the ``effective date'' of this part.



Sec. 515.325  National securities exchange.

    The term national securities exchange shall mean an exchange 
registered as a national securities exchange under section 6 of the 
Securities Exchange Act of 1934 (48 Stat. 885, 15 U.S.C. 78f).



Sec. 515.326  Custody of safe deposit boxes.

    Safe deposit boxes shall be deemed to be in the custody not only of 
all persons having access thereto but also of the lessors of such boxes 
whether or not such lessors have access to such boxes. The foregoing 
shall not in any way be regarded as a limitation upon the meaning of the 
term custody.



Sec. 515.327  Blocked estate of a decedent.

    The term blocked estate of a decedent shall mean any decedent's 
estate in which a designated national has an interest. A person shall be 
deemed to have an interest in a decedent's estate if he:
    (a) Was the decedent;
    (b) Is a personal representative; or
    (c) Is a creditor, heir, legatee, devisee, distributee, or 
beneficiary.



Sec. 515.329  Person subject to the jurisdiction of the United States;
person subject to U.S. jurisdiction.

    The terms person subject to the jurisdiction of the United States 
and person subject to U.S. jurisdiction include:
    (a) Any individual, wherever located, who is a citizen or resident 
of the United States;
    (b) Any person within the United States as defined in Sec. 515.330;
    (c) Any corporation, partnership, association, or other organization 
organized under the laws of the United States or of any State, 
territory, possession, or district of the United States; and
    (d) Any corporation, partnership, association, or other 
organization, wherever organized or doing business, that is owned or 
controlled by persons specified in paragraphs (a) or (c) of this 
section.

[50 FR 27437, July 3, 1985, as amended at 68 FR 14145, Mar. 24, 2003; 80 
FR 2292, Jan. 16, 2015; 81 FR 13991, Mar. 16, 2016]



Sec. 515.330  Person within the United States.

    (a) The term person within the United States, includes:
    (1) Any person, wheresoever located, who is a resident of the United 
States;
    (2) Any person actually within the United States;

[[Page 75]]

    (3) Any corporation, partnership, association, or other organization 
organized under the laws of the United States or of any State, 
territory, possession, or district of the United States; and
    (4) Any corporation, partnership, association, or other 
organization, wherever organized or doing business, which is owned or 
controlled by any person or persons specified in paragraphs (a)(1) or 
(a)(3) of this section.
    (b) [Reserved]

[28 FR 6974, July 9, 1963, as amended at 68 FR 14145, Mar. 24, 2003]



Sec. 515.331  Merchandise.

    The term merchandise means all goods, wares and chattels of every 
description without limitation of any kind.



Sec. 515.332  Information and informational materials.

    (a) For purposes of this part, the term information and 
informational materials means:
    (1) Publications, films, posters, phonograph records, photographs, 
microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, news 
wire feeds, and other information and informational articles.
    (2) To be considered informational materials, artworks must be 
classified under Chapter subheading 9701, 9702, or 9703 of the 
Harmonized Tariff Schedule of the United States.
    (b) The term information and informational materials does not 
include items:
    (1) That would be controlled for export pursuant to section 5 of the 
Export Administration Act of 1979, 50 U.S.C. App. 2401-2420 (1993) (the 
``EAA''), or section 6 of the EAA to the extent that such controls 
promote nonproliferation of antiterrorism policies of the United States, 
including ``software'' that is not ``publicly available'' as these terms 
are defined in 15 CFR parts 779 and 799.1 (1994); or
    (2) With respect to which acts are prohibited by 18 U.S.C. chapter 
37.

[60 FR 39256, Aug. 2, 1995]



Sec. 515.333  Depository institution.

    The term depository institution means any of the following:
    (a) An insured bank as defined in section 3 of the Federal Deposit 
Insurance Act;
    (b) An insured institution as defined in section 408(a) of the 
National Housing Act;
    (c) An insured credit union as defined in section 101 of the Federal 
Credit Union Act; or
    (d) Any other institution that is carrying on banking activities 
pursuant to a charter from a Federal or state banking authority.

[57 FR 53997, Nov. 16, 1992]



Sec. 515.334  United States national.

    As used in Sec. 515.208, the term United States national means:
    (a) Any United States citizen; or
    (b) Any other legal entity which is organized under the laws of the 
United States, or of any State, the District of Columbia, or any 
commonwealth, territory, or possession of the United States, and which 
has its principal place of business in the United States.

[61 FR 37386, July 18, 1996]



Sec. 515.335  Permanent resident alien.

    As used in Sec. 515.208, the term permanent resident alien means an 
alien lawfully admitted for permanent residence into the United States.

[61 FR 37386, July 18, 1996]



Sec. 515.336  Confiscated.

    As used in Sec. 515.208, the term confiscated refers to:
    (a) The nationalization, expropriation, or other seizure by the 
Cuban Government of ownership or control of property, on or after 
January 1, 1959:
    (1) Without the property having been returned or adequate and 
effective compensation provided; or
    (2) Without the claim to the property having been settled pursuant 
to an international claims settlement agreement or other mutually 
accepted settlement procedure; and
    (b) The repudiation by the Cuban Government of, the default by the 
Cuban Government on, or the failure of the Cuban Government to pay, on 
or after January 1, 1959:

[[Page 76]]

    (1) A debt of any enterprise which has been nationalized, 
expropriated, or otherwise taken by the Cuban Government;
    (2) A debt which is a charge on property nationalized, expropriated, 
or otherwise taken by the Cuban Government; or
    (3) A debt which was incurred by the Cuban Government in 
satisfaction or settlement of a confiscated property claim.

[61 FR 37386, July 18, 1996]



Sec. 515.337  Prohibited officials of the Government of Cuba.

    For purposes of this part, the term prohibited officials of the 
Government of Cuba means members of the Council of Ministers and flag 
officers of the Revolutionary Armed Forces.

[81 FR 71374, Oct. 17, 2016]



Sec. 515.338  Prohibited members of the Cuban Communist Party.

    For purposes of this part, the term prohibited members of the Cuban 
Communist Party means members of the Politburo.

[81 FR 71374, Oct. 17, 2016]



Sec. 515.339  Close relative.

    (a) For purposes of this part, the term close relative used with 
respect to any person means any individual related to that person by 
blood, marriage, or adoption who is no more than three generations 
removed from that person or from a common ancestor with that person.
    (b) Example. Your mother's first cousin is your close relative for 
purposes of this part, because you are both no more than three 
generations removed from your great-grandparents, who are the ancestors 
you have in common. Similarly, your husband's great-grandson is your 
close relative for purposes of this part, because he is no more than 
three generations removed from your husband. Your daughter's father-in-
law is not your close relative for purposes of this part, because you 
have no common ancestor.

[74 FR 46003, Sept. 8, 2009]



                        Subpart D_Interpretations



Sec. 515.401  Reference to amended sections.

    Reference to any section of this part or to any regulation, ruling, 
order, instruction, direction or license issued pursuant to this part 
shall be deemed to refer to the same as currently amended unless 
otherwise so specified.



Sec. 515.402  Effect of amendment of sections of this part or of 
other orders, etc.

    Any amendment, modification, or revocation of any section of this 
part or of any order, regulation, ruling, instruction, or license issued 
by or under the direction of the Secretary of the Treasury pursuant to 
section 3(a) or 5(b) of the Trading With the Enemy Act, as amended, or 
pursuant to Proclamation 3447, shall not unless otherwise specifically 
provided be deemed to affect any act done or omitted to be done, or any 
suit or proceeding had or commenced in any civil or criminal case, prior 
to such amendment, modification, or revocation, and all penalties, 
forfeitures, and liabilities under any such section, order, regulation, 
ruling, instruction or license shall continue and may be enforced as if 
such amendment, modification, or revocation had not been made.



Sec. 515.403  Termination and acquisition of the interest of 
a designated national.

    (a) Except as provided in Sec. 515.525, 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 
designated national, such property shall no longer be deemed to be 
property in which a designated national has or has had an interest 
unless there exists in such property an interest of a designated 
national, the transfer of which has not been effected pursuant to 
license or other authorization.
    (b) Unless otherwise specifically provided in a license or 
authorization contained in or issued pursuant to this part, if property 
(including any property interest) is transferred to a designated 
national such property shall be deemed to be property in which there

[[Page 77]]

exists the interest of a designated national.



Sec. 515.404  Transactions between principal and agent.

    A transaction between any person within the United States and any 
principal, agent, home office, branch, or correspondent, outside the 
United States of such person is a transaction prohibited by Sec. 515.201 
to the same extent as if the parties to the transaction were in no way 
affiliated or associated with each other.



Sec. 515.405  Exportation of securities, currency, checks, drafts
and promissory notes.

    Section 515.201 prohibits the exportation of securities, currency, 
checks, drafts and promissory notes to a designated foreign country.



Sec. 515.406  Drafts under irrevocable letters of credit; documentary
drafts.

    Section 515.201 prohibits the presentation, acceptance or payment 
of:
    (a) Drafts or other orders for payment drawn under irrevocable 
letters of credit issued in favor or on behalf of any designated 
national;
    (b) Drafts or other orders for payment, in which any designated 
national has on or since the ``effective date'' had any interest, drawn 
under any irrevocable letter of credit; and
    (c) Documentary drafts in which any designated national has on or 
since the ``effective date'' had any interest.



Sec. 515.407  Administration of blocked estates of decedents.

    With respect to transactions incident to the administration of the 
blocked estate of a decedent, including the appointment and 
qualification of personal representatives, the collection and 
liquidation of assets, the payment of claims, and distribution to 
beneficiaries, attention is directed to Sec. 515.523, which authorizes 
all transactions incident to the administration and distribution of the 
assets of blocked estates of decedents.

[80 FR 56919, Sept. 21, 2015]



Sec. 515.408  Access to certain safe deposit boxes prohibited.

    Section 515.201 prohibits access to any safe deposit box within the 
United States in the custody of any designated national or containing 
any property in which any designated national has any interest or which 
there is reasonable cause to believe contains property in which any such 
designated national has any interest. Attention is directed to 
Sec. 515.517 which authorizes access to such safe deposit boxes under 
certain conditions.



Sec. 515.409  Certain payments to a designated foreign country and
nationals through third countries.

    Section 515.201 prohibits any request or authorization made by or on 
behalf of a bank or other person within the United States to a bank or 
other person outside of the United States as a result of which request 
or authorization such latter bank or person makes a payment or transfer 
of credit either directly or indirectly to a designated national.



Sec. 515.410  Dealing abroad in Cuban-origin commodities.

    Section 515.204 prohibits, unless licensed, the importation of 
commodities of Cuban origin. It also prohibits, unless licensed, persons 
subject to the jurisdiction of the United States from purchasing, 
transporting or otherwise dealing in commodities of Cuban origin which 
are outside the United States. Attention is directed to Sec. 515.585, 
which authorizes certain dealings in commodities of Cuban origin outside 
the United States.

[81 FR 13991, Mar. 16, 2016]



Secs. 515.411-515.413  [Reserved]



Sec. 515.415  Travel to Cuba; transportation of certain Cuban nationals.

    (a) The following transactions are prohibited by Sec. 515.201 when 
in connection with the transportation of any Cuban national, except a 
Cuban national holding an unexpired immigrant or non-immigrant visa or a 
returning resident of the United States, from Cuba to the United States, 
unless otherwise licensed:

[[Page 78]]

    (1) Transactions incident to travel to, from, or within Cuba;
    (2) The transportation to Cuba of a vessel or aircraft;
    (3) The transportation into the United States of any vessel or 
aircraft which has been in Cuba since the effective date, regardless of 
registry;
    (4) The provision of any services to a Cuban national, regardless of 
whether any consideration for such services is furnished by the Cuban 
national;
    (5) The transportation or importation of baggage or other property 
of a Cuban national;
    (6) The transfer of funds or other property to any person where such 
transfer involves the provision of services to a Cuban national or the 
transportation or importation of, or any transactions involving, 
property in which Cuba or any Cuban national has any interest, including 
baggage or other such property;
    (7) Any other transaction such as payment of port fees and charges 
in Cuba and payment for fuel, meals, lodging; and
    (8) The receipt or acceptance of any gratuity, grant, or support in 
the form of meals, lodging, fuel, payments of travel or maintenance 
expenses, or otherwise, in connection with travel to or from Cuba or 
travel or maintenance within Cuba.
    (b) Transactions incident to the travel to the United States of 
Cuban nationals who are traveling other than in a non-immigrant status 
or pursuant to other non-immigrant travel authorization issued by the 
U.S. government are not authorized under the provisions of Sec. 515.571.
    (c) Transactions described in paragraph (a) of this section are not 
``transactions ordinarily incident to travel to and from Cuba'' as set 
forth in Sec. 515.560(c).

[45 FR 32671, May 19, 1980, as amended at 64 FR 25812, May 13, 1999; 80 
FR 56919, Sept. 21, 2015]



Secs. 515.416-515.419  [Reserved]



Sec. 515.420  Travel to Cuba.

    The prohibition on dealing in property in which Cuba or a Cuban 
national has an interest set forth in Sec. 515.201(b)(1) includes a 
prohibition on the receipt of goods or services in Cuba, even if 
provided free-of-charge by the Government of Cuba or a national of Cuba 
or paid for by a third-country national who is not subject to U.S. 
jurisdiction. The prohibition set forth in Sec. 515.201(b)(1) also 
prohibits payment for air travel by a person subject to U.S. 
jurisdiction to Cuba on a third-country carrier unless the travel is 
pursuant to an OFAC general or specific license.

[69 FR 33771, June 16, 2004, as amended at 81 FR 71374, Oct. 17, 2016]



Sec. 515.421  Transactions ordinarily incident to a licensed transaction.

    (a) Any transaction ordinarily incident to a licensed transaction 
and necessary to give effect thereto is also authorized, except:
    (1) A transaction by or with a prohibited official of the Government 
of Cuba, as defined in Sec. 515.337, or a prohibited member of the Cuban 
Communist Party, as defined in Sec. 515.338, where the terms of the 
applicable general or specific license expressly exclude transactions 
with such persons;
    (2) A transaction involving a debit to a blocked account or a 
transfer of blocked property that is not explicitly authorized within 
the terms of the license;
    (3) A transaction prohibited by Sec. 515.208; or
    (4) In the case of export or reexport-related transactions 
authorized by Sec. 515.533(a), payment or financing that is not 
authorized by Sec. 515.533 or Sec. 515.584(f).

    Note to paragraph (a)(4): See Sec. 515.533(a)(4) for payment and 
financing terms for exportations or reexportations authorized pursuant 
to Sec. 515.533.

    (b) Examples. (1) A specific license authorizing a person to 
complete a securities sale involving Cuban Company A, whose property and 
interests in property are blocked pursuant to this part, also authorizes 
other persons to engage in activities that are ordinarily incident and 
necessary to complete the sale, including transactions by the buyer, 
broker, transfer agents, and banks.
    (2) A general license authorizing a person to import certain goods 
from

[[Page 79]]

independent Cuban entrepreneurs also authorizes funds transfers or 
payments that are ordinarily incident to the importation, including 
payments made using online payment platforms.

[80 FR 56919, Sept. 21, 2015, as amended at 81 FR 4584, Jan. 27, 2016; 
81 FR 71374, Oct. 17, 2016]



 Subpart E_Licenses, Authorizations, and Statements of Licensing Policy



Sec. 515.501  General and specific licensing procedures.

    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.

[68 FR 53657, Sept. 11, 2003]



Sec. 515.502  Effect of subsequent license or authorization.

    (a) No license or other authorization contained in this part or 
otherwise issued by or under the direction of the Secretary of the 
Treasury pursuant to section 3(a) or 5(b) of the Trading With the Enemy 
Act, as amended, or section 620(a), Pub. L. 87-195, or Proclamation 
3447, shall be deemed to authorize or validate any transaction effected 
prior to the issuance thereof, unless such license or other 
authorization specifically so provides.
    (b) No regulation, ruling, instruction, or license authorizes a 
transaction prohibited under this part unless the regulation, ruling, 
instruction, or license is issued by the Treasury Department and 
specifically refers to this part.

[28 FR 6974, July 9, 1963, as amended at 80 FR 56919, Sept. 21, 2015]



Sec. 515.503  Exclusion from licenses and authorizations.

    The Secretary of the Treasury reserves the right to exclude from the 
operation of any license or from the privileges therein conferred or to 
restrict the applicability thereof with respect to particular persons, 
transactions or property or classes thereof. Such action shall be 
binding upon all persons receiving actual notice or constructive notice 
thereof.



Sec. 515.504  Certain judicial proceedings with respect to property
of designated nationals.

    (a) Subject to the limitations of paragraphs (b), (c) and (d) of 
this section judicial proceedings are authorized with respect to 
property in which on or since the ``effective date'' there has existed 
the interest of a designated national.
    (b) A judicial proceeding is authorized by this section only if it 
is based upon a cause of action which accrued prior to the ``effective 
date''.
    (c) This section does not authorize or license:
    (1) The entry of any judgment or of any decree or order of similar 
or analogous effect upon any judgment book, minute book, journal or 
otherwise, or the docketing of any judgment in any docket book, or the 
filing of any judgment roll or the taking of any other similar or 
analogous action.
    (2) Any payment or delivery out of a blocked account based upon a 
judicial proceeding nor does it authorize the enforcement or carrying 
out of any judgment or decree or order of similar or analogous effect 
with regard to any property in which a designated national has an 
interest.
    (d) If a judicial proceeding relates to property in which there 
exists the interest of any designated national other than a person who 
would not have been a designated national except for his relationship to 
an occupied area, such proceeding is authorized only if it is based upon 
a claim in which no person other than any of the following has had an 
interest since the ``effective date'':
    (1) A citizen of the United States;
    (2) A corporation organized under the laws of the United States or 
any State, territory or possession thereof, or the District of Columbia;
    (3) A natural person who is and has been since the ``effective 
date'' a resident of the United States and who has not been a specially 
designated national;
    (4) A legal representative (whether or not appointed by a court of 
the United States) or successor in interest by inheritance, device, 
bequest, or operation

[[Page 80]]

of law, who falls within any of the categories specified in paragraphs 
(a) (1), (2), and (3) of this section but only to the same extent that 
their principals or predecessors would be qualified by such paragraphs.



Sec. 515.505  Certain Cuban nationals unblocked.

    (a) General license unblocking certain persons. The following 
persons are licensed as unblocked nationals, as that term is defined in 
Sec. 515.307 of this part:
    (1) Any individual national of Cuba who:
    (i) Has taken up residence in the United States; and
    (ii) Is a United States citizen; is a lawful permanent resident 
alien of the United States; has applied to become a lawful permanent 
resident alien of the United States and has an adjustment of status 
application pending; or is lawfully present and intending to lawfully 
remain in the United States on a permanent basis; and
    (iii) Is not a prohibited official of the Government of Cuba, as 
defined in Sec. 515.337 of this part, or a prohibited member of the 
Cuban Communist Party, as defined in Sec. 515.338 of this part.
    (2) Any individual national of Cuba who has taken up permanent 
residence outside of Cuba, provided that the required documentation 
specified in paragraph (c) of this section is obtained and the 
individual is not a prohibited official of the Government of Cuba, as 
defined in Sec. 515.337, or a prohibited member of the Cuban Communist 
Party, as defined in Sec. 515.338;
    (3) Any entity that otherwise would be a national of Cuba solely 
because of the interest therein of one or more persons licensed in this 
paragraph (a) as an unblocked national;
    (4) Any entity, office, or other sub-unit authorized pursuant to 
Sec. 515.573; and
    (5) Any individual authorized to establish domicile in Cuba pursuant 
to Sec. 515.573(a)(4).

    Note to Sec. 515.505(a): An individual unblocked pursuant to this 
paragraph does not become blocked again merely by leaving the United 
States or the country in which he or she has taken up permanent 
residence. An individual unblocked national remains unblocked unless and 
until the individual thereafter becomes domiciled in or a permanent 
resident of Cuba.

    (b) General license unblocking blocked accounts. Banking 
institutions, as defined in Sec. 515.314, including U.S. registered 
brokers or dealers in securities and U.S. registered money transmitters, 
are authorized to unblock any blocked account, as defined in 
Sec. 515.319, that had been previously blocked solely because of the 
interest therein of one or more persons licensed in paragraph (a) of 
this section as unblocked nationals.
    (c) Required documentation. In determining whether an individual 
national of Cuba qualifies as an unblocked national under paragraph 
(a)(2) of this section, persons subject to U.S. jurisdiction must obtain 
evidence demonstrating that the individual satisfies the requirements of 
that paragraph. Such evidence may include copies of documents issued by 
government authorities demonstrating citizenship or lawful permanent 
residence in a third country. These could include, depending on the 
information provided in the document in question, a passport, voter 
registration card, permanent resident alien card, national identity 
card, or other similar documents. Where such documents are unavailable, 
persons subject to U.S. jurisdiction may also rely on evidence that the 
individual has been resident for the past two years without interruption 
in a single country outside of Cuba, or a sworn statement or other 
evidence that the individual does not intend to, or would not be welcome 
to, return to Cuba.
    (d) For the purposes of paragraph (a)(1) of this section, the term 
``lawfully present and intending to lawfully remain in the United States 
on a permanent basis'' includes an individual with a pending application 
for asylum or who has been paroled into the United States under Cuban 
Parole or Cuban Medical designations. It does not include anyone present 
in the United States in a non-immigrant status.

    Note to Sec. 515.505: See Sec. 515.571 for the authorization of 
certain limited transactions incident to travel to, from, and within the 
United States by Cuban nationals who are

[[Page 81]]

present in the United States in a non-immigrant status or pursuant to 
other non-immigrant travel authorization issued by the U.S. government.

[80 FR 2292, Jan. 16, 2015, as amended at 80 FR 56919, Sept. 21, 2015; 
81 FR 13991, Mar. 16, 2016]



Secs. 515.506-515.507  [Reserved]



Sec. 515.508  Payments to blocked accounts in domestic banks.

    (a) Any payment or transfer of credit to a blocked account in a 
domestic bank in the name of any designated national is hereby 
authorized providing such payment or transfer shall not be made from any 
blocked account if such payment or transfer represents, directly or 
indirectly, a transfer of the interest of a designated national to any 
other country or person.
    (b) This section does not authorize:
    (1) Any payment or transfer to any blocked account held in a name 
other than that of the designated national who is the ultimate 
beneficiary of such payment or transfer; or
    (2) Any foreign exchange transaction including, but not by way of 
limitation, any transfer of credit, or payment of an obligation, 
expressed in terms of the currency of any foreign country.
    (c) This section does not authorize any payment or transfer of 
credit comprising an integral part of a transaction which cannot be 
effected without the subsequent issuance of a further license.
    (d) This section does not authorize the crediting of the proceeds of 
the sale of securities held in a blocked account or a subaccount 
thereof, or the income derived from such securities to a blocked account 
or subaccount under any name or designation which differs from the name 
or designation of the specific blocked account or subaccount in which 
such securities were held.
    (e) This section does not authorize any payment or transfer from a 
blocked account in a domestic bank to a blocked account held under any 
name or designation which differs from the name or designation of the 
blocked account from which the payment or transfer is made.

    Note to Sec. 515.508: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers.

[32 FR 10846, July 25, 1967, as amended at 58 FR 47645, Sept. 10, 1993; 
62 FR 45106, Aug. 25, 1997]



Sec. 515.509  Entries in certain accounts for normal service charges.

    (a) Any banking institution within the United States is hereby 
authorized to:
    (1) Debit any blocked account with such banking institution (or with 
another office within the United States of such banking institution) in 
payment or reimbursement for normal service charges owed to such banking 
institution by the owner of such blocked account.
    (2) Make book entries against any foreign currency account 
maintained by it with a banking institution in a designated foreign 
country for the purpose of responding to debits to such account for 
normal service charges in connection therewith.
    (b) As used in this section, the term normal service charge shall 
include charges in payment or reimbursement for interest due; cable, 
telegraph, or telephone charges; postage costs; custody fees; small 
adjustment charges to correct bookkeeping errors; and, but not by way of 
limitation, minimum balance charges, account carrying charges, notary 
and protest fees, and charges for reference books, photostats, credit 
reports, transcripts of statements, registered mail insurance, 
stationery and supplies, check books, and other similar items.



Sec. 515.510  Payments to the United States, States and political
subdivisions.

    (a) The payment from any blocked account to the United States or any 
agency or instrumentality thereof or to any State, territory, district, 
county, municipality or other political subdivision in the United 
States, of customs duties, taxes, and fees payable thereto by the owner 
of such blocked account is hereby authorized.
    (b) This section also authorizes transactions incident to the 
payment of customs duties, taxes, and fees from blocked accounts, such 
as the levying

[[Page 82]]

of assessments, the creation and enforcement of liens, and the sale of 
blocked property in satisfaction of liens for customs duties, taxes, and 
fees.



Sec. 515.511  Transactions by certain business enterprises.

    (a) Except as provided in paragraphs (b), (c) and (d) of this 
section any partnership, association, corporation or other organization 
which on the ``effective date'' was actually engaged in a commercial, 
banking or financial business within the United States and which is a 
national of a designated foreign country, is hereby authorized to engage 
in all transactions ordinarily incidental to the normal conduct of its 
business activities within the United States.
    (b) This section does not authorize any transaction which would 
require a license if such organization were not a national of a 
designated foreign country.
    (c) This section does not authorize any transaction by a specially 
designated national.
    (d) Any organization engaging in business pursuant to this section 
shall not engage in any transaction, pursuant to this section or any 
other license or authorization contained in this part, which, directly 
or indirectly, substantially diminishes or imperils the assets of such 
organization or otherwise prejudicially affects the financial position 
of such organization.
    (e) No dealings with regard to any account shall be evidence that 
any person having an interest therein is actually engaged in commercial, 
banking or financial business within the United States.



Sec. 515.512  Provision of certain legal services authorized.

    (a) The provision of the following legal services to or on behalf of 
Cuba or a Cuban national is authorized, provided that receipt of payment 
of professional fees and reimbursement of incurred expenses must be 
authorized by or pursuant to paragraph (d) or (e) of this section, or 
otherwise authorized pursuant to this part:
    (1) Provision of legal advice and counseling on the requirements of 
and compliance with the laws of the United States or any jurisdiction 
within the United States, provided that such advice and counseling are 
not provided to facilitate transactions in violation of this part;
    (2) Representation of persons named as defendants in or otherwise 
made parties to legal, arbitration, or administrative proceedings before 
any U.S. federal, state, or local court or agency;
    (3) Initiation and conduct of legal, arbitration, or administrative 
proceedings before any U.S. federal, state, or local court or agency;
    (4) Representation of persons before any U.S. federal, state, or 
local court or agency with respect to the imposition, administration, or 
enforcement of U.S. sanctions against such persons; and
    (5) Provision of legal services in any other context in which 
prevailing U.S. law requires access to legal counsel at public expense.
    (b) The provision of any other legal services to Cuba or a Cuban 
national, 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 in which Cuba or a Cuban national 
has had an interest at any time on or since 12:01 a.m., Eastern Standard 
Time, July 8, 1963, is prohibited unless licensed pursuant to this part.
    (d) Receipts of payment--(1) Legal services to or on behalf of 
certain blocked persons. All receipts of payment of professional fees 
and reimbursement of incurred expenses for the provision of legal 
services authorized pursuant to paragraph (a) of this section to or on 
behalf of a prohibited official of the Government of Cuba, as defined in 
Sec. 515.337, or a prohibited member of the Cuban Communist Party, as 
defined in Sec. 515.338, must be specifically licensed or otherwise 
authorized pursuant to Sec. 515.512(e), which authorizes certain 
payments from funds originating outside the United States.

[[Page 83]]

    (2) Legal services to or on behalf of all others. All receipts of 
payment of professional fees and reimbursement of incurred expenses for 
the provision of legal services authorized pursuant to paragraph (a) of 
this section to or on behalf of Cuba or a Cuban national, other than 
those described in paragraph (d)(1) of this section, are authorized, 
except that nothing in this section authorizes the debiting of any 
blocked account or the transfer of any blocked property.
    (e) Payments for legal services from funds originating outside the 
United States authorized. Receipts of payment of professional fees and 
reimbursement of incurred expenses for the provision of legal services 
authorized pursuant to Sec. 515.512(a) to or on behalf of a prohibited 
official of the Government of Cuba, as defined in Sec. 515.337, or a 
prohibited member of the Cuban Communist Party, as defined in 
Sec. 515.338, are authorized from funds originating outside the United 
States, provided that:
    (1) The funds received by persons subject to U.S. jurisdiction as 
payment of professional fees and reimbursement of incurred expenses for 
the provision of legal services authorized pursuant to paragraph (a) of 
this section do not originate from:
    (i) A source within the United States;
    (ii) Any source, wherever located, within the possession or control 
of a person subject to U.S. jurisdiction; or
    (iii) Any person, other than the person on whose behalf the legal 
services authorized pursuant to paragraph (a) of this section are to be 
provided, whose property and interests in property are blocked pursuant 
to any part of this chapter other than part 515.
    (2) Reports. (i) Persons subject to U.S. jurisdiction who receive 
payments in connection with legal services authorized pursuant to 
paragraph (a) of this section must submit annual reports no later than 
30 days following the end of the calendar year during which the payments 
were received providing information on the funds received. Such reports 
shall specify:
    (A) The individual or entity from whom the funds originated and the 
amount of funds received; and
    (B) If applicable:
    (1) The names of any individuals or entities providing related 
services to the person subject to U.S. jurisdiction receiving payment in 
connection with authorized legal services, such as private investigators 
or expert witnesses;
    (2) A general description of the services provided; and
    (3) The amount of funds paid in connection with such services.
    (ii) The reports, which must reference this section, are to be 
mailed to: Department of the Treasury, Office of Foreign Assets Control, 
Attn: Licensing Division, 1500 Pennsylvania Avenue NW., Annex, 
Washington, DC 20220.

    Note 1 to Sec. 515.512: Persons subject to U.S. jurisdiction who 
receive payments in connection with legal services authorized pursuant 
to Sec. 515.512(a) 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. This 
does not authorize the hiring of Cuban nationals. Additionally, persons 
subject to U.S. jurisdiction do not need to obtain specific 
authorization to provide related services that are ordinarily incident 
to the provision of legal services authorized pursuant to 
Sec. 515.512(a).
    Note 2 to Sec. 515.512: See Secs. 515.527 and 515.528 for general 
licenses authorizing fees due to attorneys in connection with certain 
intellectual property-related transactions. See Sec. 515.588 for a 
general license authorizing the receipt of, and payment for, certain 
legal services from Cuba or a Cuban national.

[80 FR 56919, Sept. 21, 2015]



Sec. 515.513  Purchase and sale of certain securities.

    (a) The bona fide purchase and sale of securities on a national 
securities exchange by banking institutions within the United States for 
the account, and pursuant to the authorization, of nationals of a 
designated foreign country and the making and receipt of payments, 
transfers of credit, and transfers of such securities which are 
necessary incidents of any such purchase or sale are hereby authorized 
provided the following terms and conditions are complied with:
    (1) In the case of the purchase of securities, the securities 
purchased shall be held in an account in a banking institution within 
the United States in

[[Page 84]]

the name of the national whose account was debited to purchase such 
securities; and
    (2) In the case of the sale of securities, the proceeds of the sale 
shall be credited to an account in the name of the national for whose 
account the sale was made and in the banking institution within the 
United States which held the securities for such national.
    (b) This section does not authorize the crediting of the proceeds of 
the sale of securities held in a blocked account or a subaccount 
thereof, to a blocked account or subaccount under any name or 
designation which differs from the name or designation of the specific 
blocked account or subaccount in which such securities were held.
    (c) Securities issued or guaranteed by the Government of the United 
States or any State, territory, district, county, municipality, or other 
political subdivision thereof (including agencies and instrumentalities 
of the foregoing) need not be purchased or sold on a national securities 
exchange, but purchases or sales of such securities shall be made at 
market value and pursuant to all other terms and conditions prescribed 
in this section.



Sec. 515.514  Payment of dividends and interest on and redemption
and collection of securities.

    (a) The payment to, and receipt by, a banking institution within the 
United States of funds or other property representing dividends or 
interest on securities held by such banking institution in a blocked 
account is hereby authorized provided the funds or other property are 
credited to or deposited in a blocked account in such banking 
institution in the name of the national for whose account the securities 
were held. Notwithstanding Sec. 515.202, this paragraph authorizes the 
foregoing transactions although such securities are registered or 
inscribed in the name of any designated national and although the 
national in whose name the securities are registered or inscribed may 
not be the owner of such blocked account.
    (b) The payment to, and receipt by, a banking institution within the 
United States of funds payable in respect of securities (including 
coupons) presented by such banking institution to the proper paying 
agents within the United States for redemption or collection for the 
account and pursuant to the authorization of nationals of a designated 
country is hereby authorized provided the proceeds of the redemption or 
collection are credited to a blocked account in such banking institution 
in the name of the national for whose account the redemption or 
collection was made.
    (c) The performance of such other acts, and the effecting of such 
other transactions, as may be necessarily incident to any of the 
foregoing, are also hereby authorized.
    (d) This section does not authorize the crediting of the proceeds of 
the redemption or collection of securities (including coupons) held in a 
blocked account or a subaccount thereof, or the income derived from such 
securities to a blocked account or subaccount under any name or 
designation which differs from the name or designation of the specific 
blocked account or subaccount in which such securities were held.
    (e) This section does not authorize any issuer or other obligor, 
with respect to a security, who is a designated national, to make any 
payment, transfer or withdrawal.



Sec. 515.515  Transfers of securities to blocked accounts in domestic
banks.

    (a) Transactions ordinarily incident to the transfer of securities 
from a blocked account in the name of any person to a blocked account in 
the same name in a domestic bank are hereby authorized provided such 
securities shall not be transferred from any blocked account if such 
transfer represents, directly or indirectly, a transfer of the interest 
of a designated national to any other country or person.
    (b) This section does not authorize the transfer of securities held 
in a blocked account or subaccount thereof to a blocked account or 
subaccount under any name or designation which differs from the name or 
designation of the specific blocked account or subaccount in which such 
securities were held.

[32 FR 10847, July 25, 1967]

[[Page 85]]



Sec. 515.516  Voting and soliciting of proxies on securities.

    Notwithstanding Sec. 515.202, the voting and the soliciting of 
proxies or other authorizations is authorized with respect to the voting 
of securities issued by a corporation organized under the laws of the 
United States or of any State, territory, or district thereof, in which 
a designated national has any interest.



Sec. 515.517  Access to safe deposit boxes under certain conditions.

    (a) Access to any safe deposit box leased to a designated national 
or containing property in which any designated national has an interest, 
and the deposit therein or removal therefrom of any property is hereby 
authorized, provided the following terms and conditions are complied 
with:
    (1) Access shall be permitted only in the presence of an authorized 
representative of the lessor of such box; and
    (2) In the event that any property in which any designated national 
has any interest is to be removed from such box, access shall be 
permitted only in the presence of an authorized representative of a 
banking institution within the United States, which may be the lessor of 
such box, which shall receive such property into its custody immediately 
upon removal from such box and which shall hold the same in a blocked 
account under an appropriate designation indicating the interest therein 
of designated nationals.
    (b) The terms and conditions set forth in paragraph (a) of this 
section shall not apply to access granted to a representative of the 
Office of Alien Property pursuant to any rule, regulation or order of 
such Office.



Sec. 515.518  [Reserved]



Sec. 515.519  Limited payments from accounts of United States
citizens abroad.

    (a) Payments and transfers of credit from blocked accounts for 
expenditures within the United States or the authorized trade territory 
of any citizens of the United States who are within any foreign country 
are hereby authorized provided the following terms and conditions are 
complied with:
    (1) Such payments and transfers shall be made only from blocked 
accounts in the name, or in which the beneficial interest is held by, 
such citizen or his family; and
    (2) The total of all such payments and transfers made under this 
section shall not exceed $1,000 in any one calendar month for any such 
citizen or his family.
    (b) This section does not authorize any remittance to a designated 
foreign country or, any payment, transfer, or withdrawal which could not 
be effected without a license by a person within the United States who 
is not a national of a designated foreign country.

[28 FR 6974, July 9, 1963, as amended at 49 FR 27144, July 2, 1984]



Sec. 515.520  Payments from accounts of United States citizens 
in employ of United States in foreign countries and certain other
persons.

    (a) Banking institutions within the United States are hereby 
authorized to make all payments, transfers and withdrawals from accounts 
in the name of citizens of the United States while such citizens are 
within any foreign country in the course of their employment by the 
Government of the United States.
    (b) Banking institutions within the United States are also hereby 
authorized to make all payments, transfers and withdrawals from accounts 
in the name of members of the armed forces of the United States and of 
citizens of the United States accompanying such armed forces in the 
course of their employment by any organization acting on behalf of the 
Government of the United States while such persons are within any 
foreign country.
    (c) This section is deemed to apply to the accounts of members of 
the armed forces of the United States and of citizens of the United 
States accompanying such armed forces in the course of their employment 
by the Government of the United States or by any organization acting on 
its behalf even though they are captured or reported missing.

[[Page 86]]



Sec. 515.521  U.S. assets of certain Cuban corporations.

    (a) Specific licenses may be issued unblocking the net pro rata 
shares of individuals who are permanent residents of the United States 
or the authorized trade territory, and who are not specially designated 
nationals, in U.S.-located assets of corporations formed under the laws 
of Cuba, after deducting the total debt due creditors for claims that 
accrued prior to the effective date, in cases where all of the following 
conditions are met:
    (1) The assets were owned by, or accrued to, the corporation before 
the effective date of the regulations;
    (2) The corporation did not carry on substantial business in Cuba 
under the management or control of the applicant(s) after the effective 
date;
    (3) In cases where the blocked assets purportedly have been 
nationalized by Cuba, compensation has not been paid to the 
applicant(s).
    (b) Applications for specific licenses under this section must 
include all of the following information:
    (1) A detailed description of the corporation, its by-laws, 
activities, distribution of shares, and its current status;
    (2) Proof of the permanent residence of the applicant(s) in the 
United States or the authorized trade territory;
    (3) A list of all officers, directors and shareholders of the 
corporation, giving the citizenship and the residence of each person as 
of the date of the application;
    (4) A detailed description of all of the assets of the corporation, 
wherever located, including a statement of all known encumbrances or 
claims against them; and
    (5) Detailed information regarding the status of all debts and other 
obligations of the corporation, specifying the citizenship and residence 
of each creditor on the effective date and on the date of the 
application.

[50 FR 33720, Aug. 21, 1985. Redesignated at 64 FR 25813, May 13, 1999]



Sec. 515.522  [Reserved]



Sec. 515.523  Transactions incident to the administration of decedents'
estates.

    All transactions incident to the administration and distribution of 
the assets of a blocked estate of a decedent are authorized. Such 
transactions include the appointment and qualification of a personal 
representative in the United States or Cuba, collection and preservation 
of assets by a personal representative and associated fees, payment of 
funeral expenses and expenses of the last illness, transfer of title, 
and distribution of assets pursuant to a valid testamentary disposition 
or intestate succession. All property distributed pursuant to this 
section is unblocked, provided that neither Cuba nor a Cuban national 
(other than the decedent or a person unblocked pursuant to Sec. 515.505) 
has an interest in the property.

    Note to Sec. 515.523: See Sec. 515.570(f)(1) for a general license 
authorizing funds deposited in a blocked bank account in a banking 
institution, as defined in Sec. 515.314, as a result of certain 
administration of decedents' estates to be remitted to a national of 
Cuba.

[80 FR 56920, Sept. 21, 2015]



Sec. 515.524  Payment from, and transactions in the administration
of certain trusts and estates.

    (a) Any bank or trust company incorporated under the laws of the 
United States, or of any State, territory, possession, or district of 
the United States, or any private bank subject to supervision and 
examination under the banking laws of any State of the United States, 
acting as trustee of a trust created by gift, donation, or bequest and 
administered in the United States, in which one or more persons who are 
designated nationals have an interest, beneficial or otherwise, or are 
co-trustees, is hereby authorized to engage in the following 
transactions:
    (1) Payments of distributive shares of principal or income to all 
persons legally entitled thereto.
    (2) Other transactions arising in the administration of such trust 
which might be engaged in if no Cuban national were a beneficiary or co-
trustee of such trust.

[[Page 87]]

    (b) This section does not authorize a trustee to engage in any other 
transaction at the request, or upon the instructions, of any beneficiary 
or co-trustee of such trust or other person who is a Cuban national.

    Note to paragraph (b): See Sec. 515.523 for a general license 
authorizing transactions incident to the administration of decedents' 
estates. See Sec. 515.570(f)(1) for a general license authorizing funds 
deposited in a blocked bank account in a banking institution as a result 
of certain administration of decedents' estates to be remitted to a 
national of Cuba.

    (c) The application of this section to trusts is limited to trusts 
established by gift, donation, or bequest from individuals or entities 
to benefit specific heirs, charitable causes, and similar beneficiaries. 
This section does not apply to trusts established for business or 
commercial purposes, such as sinking funds established by an issuer of 
securities in order to secure payment of interest or principal due on 
such securities.

[28 FR 6974, July 9, 1963, as amended at 49 FR 27144, July 2, 1984; 54 
FR 5234, Feb. 2, 1989; 80 FR 56920, Sept. 21, 2015]



Sec. 515.525  Certain transfers as a consequence of the existence 
or change of marital status authorized.

    Any transfer of any dower, curtesy, community property, or other 
interest of any nature whatsoever, provided that such transfer arises 
solely as a consequence of the existence or change of marital status, is 
authorized.

[80 FR 56920, Sept. 21, 2015]



Sec. 515.526  Transactions involving blocked life insurance policies.

    (a) The following transactions are hereby authorized:
    (1) The payment of premiums and interest on policy loans with 
respect to any blocked life insurance policy;
    (2) The issuance, servicing or transfer of any blocked life 
insurance policy in which the only blocked interest is that of one or 
more of the following:
    (i) A member of the armed forces of the United States or a person 
accompanying such forces (including personnel of the American Red Cross, 
and similar organizations);
    (ii) An officer or employee of the United States; or
    (iii) A citizen of the United States resident in a designated 
foreign country; and
    (3) The issuance, servicing or transfer of any blocked life 
insurance policy in which the only blocked interest (other than that of 
a person specified in paragraph (a)(2) of this section) is that of a 
beneficiary.
    (b) Paragraph (a) of this section does not authorize:
    (1) Any payment to the insurer from any blocked account except a 
blocked account of the insured or beneficiary, or
    (2) Any payment by the insurer to a national of a designated foreign 
country unless payment is made by deposit in a blocked account in a 
domestic bank in the name of the national who is the ultimate 
beneficiary thereof.
    (c) The application, in accordance with the provisions of the policy 
or the established practice of the insurer of the dividends, cash 
surrender value, or loan value, of any blocked life insurance policy is 
also hereby authorized for the purpose of:
    (1) Paying premiums;
    (2) Paying policy loans and interest thereon;
    (3) Establishing paid-up insurance; or
    (4) Accumulating such dividends or values to the credit of the 
policy on the books of the insurer.
    (d) As used in this section:
    (1) The term blocked life insurance policy shall mean any life 
insurance policy or annuity contract, or contract supplementary thereto, 
in which there is a blocked interest.
    (2) Any interest of a national of a designated foreign country shall 
be deemed to be a ``blocked interest.''
    (3) The term servicing shall mean the following transactions with 
respect to any blocked life insurance policy:
    (i) The payment of premiums, the payment of loan interest, and the 
repayment of policy loans;
    (ii) The effecting by a life insurance company or other insurer of 
loans to an insured;
    (iii) The effecting on behalf of an insured or surrenders, 
conversions, modifications, and reinstatements; and

[[Page 88]]

    (iv) The exercise or election by an insured of nonforfeiture 
options, optional modes of settlement, optional disposition of 
dividends, and other policy options and privileges not involving payment 
by the insurer.
    (4) The term transfer shall mean the change of beneficiary, or the 
assignment or pledge of the interest of an insured in any blocked life 
insurance policy subsequent to the issuance thereof.
    (e) This section does not authorize any transaction with respect to 
any blocked life insurance policy issued by a life insurance company or 
other insurer which is a national of a designated foreign country or 
which is not doing business or effecting insurance in the United States.



Sec. 515.527  Certain transactions with respect to United States 
intellectual property.

    (a)(1) Transactions related to the registration and renewal in the 
United States Patent and Trademark Office or the United States Copyright 
Office of patents, trademarks, and copyrights in which the Government of 
Cuba or a Cuban national has an interest are authorized.
    (2) No transaction or payment is authorized or approved pursuant to 
paragraph (a)(1) of this section with respect to a mark, trade name, or 
commercial name that is the same as or substantially similar to a mark, 
trade name, or commercial name that was used in connection with a 
business or assets that were confiscated, as that term is defined in 
Sec. 515.336, unless the original owner of the mark, trade name, or 
commercial name, or the bona fide successor-in-interest has expressly 
consented.
    (b) This section authorizes the payment from blocked accounts or 
otherwise of fees currently due to the United States Government in 
connection with any transaction authorized in paragraph (a) of this 
section.
    (c) This section further authorizes the payment from blocked 
accounts or otherwise of the reasonable and customary fees and charges 
currently due to attorneys or representatives within the United States 
in connection with the transactions authorized in paragraph (a) of this 
section.

[60 FR 54196, Oct. 20, 1995, as amended at 64 FR 25813, May 13, 1999]



Sec. 515.528  Certain transactions with respect to blocked foreign 
intellectual property.

    (a) The following transactions by any person who is not a designated 
national are hereby authorized:
    (1) The filing and prosecution of any application for a blocked 
foreign patent, trademark or copyright, or for the renewal thereof;
    (2) The receipt of any blocked foreign patent, trademark or 
copyright;
    (3) The filing and prosecution of opposition or infringement 
proceedings with respect to any blocked foreign patent, trademark, or 
copyright, and the prosecution of a defense to any such proceedings;
    (4) The payment of fees currently due to the government of any 
foreign country, either directly or through an attorney or 
representative, in connection with any of the transactions authorized by 
paragraphs (a) (1), (2), and (3) of this section or for the maintenance 
of any blocked foreign patent, trademark or copyright; and
    (5) The payment of reasonable and customary fees currently due to 
attorneys or representatives in any foreign country incurred in 
connection with any of the transactions authorized by paragraphs (a) 
(1), (2), (3), or (4) of this section.
    (b) Payments effected pursuant to the terms of paragraphs (a) (4) 
and (5) of this section may not be made from any blocked account.
    (c) As used in this section the term blocked foreign patent, 
trademark, or copyright shall mean any patent, petty patent, design 
patent, trademark or copyright issued by any foreign country in which a 
designated foreign country or national thereof has an interest, 
including any patent, petty patent, design patent, trademark, or 
copyright issued by a designated foreign country.

[28 FR 6974, July 9, 1963, as amended at 60 FR 54196, Oct. 20, 1995]



Sec. 515.529  Powers of attorney.

    (a) No power of attorney, whether granted before or after the 
``effective

[[Page 89]]

date'' shall be invalid by reason of any of the provisions of this part 
with respect to any transaction licensed by or pursuant to the 
provisions of this part.
    (b) This section does not authorize any transaction pursuant to a 
power of attorney if such transaction is prohibited by Sec. 515.201 and 
is not otherwise licensed or authorized by or pursuant to this part.
    (c) This section does not authorize the creation of any power of 
attorney in favor of any person outside of the United States or the 
exportation from the United States of any power of attorney.



Sec. 515.530  Exportation of powers of attorney or instructions
relating to certain types of transactions.

    (a) The exportation to any foreign country of powers of attorney or 
other instruments executed or issued by any person within the United 
States who is not a national of a designated foreign country, which are 
limited to authorizations or instructions to effect transactions 
incident to the following, are hereby authorized upon the condition 
prescribed in paragraph (b) of this section:
    (1) The representation of the interest of such person in a 
decedent's estate which is being administered in a designated foreign 
country and the collection of the distributive share of such person in 
such estate;
    (2) The maintenance, preservation, supervision or management of any 
property located in a designated foreign country in which such person 
has an interest; and
    (3) The conveyance, transfer, release, sale or other disposition of 
any property specified in paragraph (a)(1) of this section or any real 
estate or tangible personal property if the value thereof does not 
exceed the sum of $5,000 or its equivalent in foreign currency.
    (b) No instrument which authorizes the conveyance, transfer, 
release, sale or other disposition of any property may be exported under 
this section unless it contains an express stipulation that such 
authority may not be exercised if the value of such property exceeds the 
sum of $5,000 or the equivalent thereof in foreign currency.
    (c) As used in this section, the term tangible personal property 
shall not include cash, bullion, deposits, credits, securities, patents, 
trademarks, or copyrights.



Sec. 515.532  Completion of certain securities transactions.

    (a) Banking institutions within the United States are hereby 
authorized to complete, on or before July 12, 1963 purchases and sales 
made prior to the ``effective date'' of securities purchased or sold for 
the account of a designated foreign country or any designated national 
thereof provided the following terms and conditions are complied with, 
respectively:
    (1) The proceeds of such sale are credited to a blocked account in a 
banking institution in the name of the person for whose account the sale 
was made; and
    (2) The securities so purchased are held in a blocked account in a 
banking institution in the name of the person for whose account the 
purchase was made.
    (b) This section does not authorize the crediting of the proceeds of 
the sale of securities held in a blocked account or a subaccount 
thereof, to a blocked account or subaccount under any name or 
designation which differs from the name or designation of the specific 
blocked account or subaccount in which such securities were held.



Sec. 515.533  Exportations from the United States to Cuba; reexportations to Cuba; importation and servicing or repair of certain items previously exported or 
          reexported to Cuba.

    (a) All transactions ordinarily incident to the exportation of items 
from the United States, or the reexportation of items from a third 
country, to any person within Cuba are authorized, provided that:
    (1) The exportation or reexportation is licensed or otherwise 
authorized by the Department of Commerce under the provisions of the 
Export Administration Act of 1979, as amended (50 U.S.C. 4601-4623) (see 
the Export Administration Regulations, 15 CFR parts 730 through 774);
    (2) The transaction is not a transaction between a U.S.-owned or -
controlled firm in a third country and

[[Page 90]]

Cuba for the exportation to Cuba of commodities produced in a country 
other than the United States or Cuba;
    (3) The transaction is not financed from any blocked account; and
    (4) In the case of agricultural commodities, as that term is defined 
in 15 CFR part 772, only the following payment and financing terms are 
used:
    (i) Payment of cash in advance. For the purposes of this section, 
the term ``payment of cash in advance'' shall mean payment before the 
transfer of title to, and control of, the exported items to the Cuban 
purchaser; or
    (ii) Financing by a banking institution located in a third country 
provided the banking institution is not a designated national, a U.S. 
citizen, a U.S. permanent resident alien, or an entity organized under 
the laws of the United States or any jurisdiction within the United 
States (including any foreign branch of such an entity). Such financing 
may be confirmed or advised by a U.S. banking institution.

    Note 1 to paragraph (a): The transactions authorized by this 
paragraph include all transactions that are directly incident to the 
shipping of specific exports or reexports (e.g., insurance and 
transportation of the exports to Cuba). Transactions that are not tied 
to specific exports or reexports, such as transactions involving future 
(non-specific) shipments, must be separately licensed by OFAC. For the 
waiver of the prohibitions on entry into U.S. ports contained in 
Sec. 515.207 for vessels transporting shipments of items between the 
United States and Cuba pursuant to this section, see Sec. 515.550.
    Note 2 to paragraph (a): The limitation in paragraph (a)(4) applies 
only to payment and financing terms for exports or reexports of 
agricultural commodities and is required by the Trade Sanctions Reform 
and Export Enhancement Act of 2000, 22 U.S.C. 7207(b)(1). For other 
authorized exports and reexports, paragraph (a) does not restrict 
payment and financing terms. See Sec. 515.584 for an authorization for 
banking institutions to provide financing for authorized exports and 
reexports of items other than agricultural commodities.
    Note 3 to paragraph (a): Transactions ordinarily incident to 
exportation from the United States authorized by this paragraph include 
the importation into the United States of items from a third country for 
exportation to Cuba pursuant to a license or other authorization by the 
Department of Commerce.
    Note 4 to paragraph (a): See Sec. 515.534 for a general license 
authorizing certain contingent contracts, including contingent contracts 
for the sale of items that may be exported from the United States to 
Cuba or reexported from a third country to Cuba consistent with the 
export licensing policy of the Department of Commerce, where performance 
of such contingent contracts is expressly made contingent on prior 
authorization by the Department of Commerce.

    (b) Importation of certain items previously exported to Cuba; 
servicing and repair of such items. (1) All transactions ordinarily 
incident to the importation into the United States or a third country of 
items previously exported from the United States to Cuba or exported or 
reexported from a third country to Cuba, and the servicing and repair of 
such items, are authorized, provided that:
    (i) The items previously were exported or reexported to Cuba 
pursuant to paragraph (a) of this section or Sec. 515.559; and
    (ii) The items are being imported into the United States or a third 
country either:
    (A) In order to service or repair the items before they are exported 
or reexported back to Cuba, or
    (B) To return them to the United States or a third country.

    Note to paragraph (b): This paragraph does not authorize the 
exportation or reexportation of any item to Cuba. The exportation or 
reexportation of serviced, repaired, or replacement items to Cuba must 
be separately authorized pursuant to paragraph (a) of this section or 
Sec. 515.559, in addition to any Department of Commerce authorization 
that may be required.

    (c) General license for travel-related transactions incident to 
exportation or reexportation of certain items. (1) The travel-related 
transactions set forth in Sec. 515.560(c) and such additional 
transactions as are directly incident to the conduct of market research, 
commercial marketing, sales or contract negotiation, accompanied 
delivery, installation, leasing, servicing, or repair in Cuba of items 
consistent with the export or reexport licensing policy of the 
Department of Commerce are authorized, provided that the traveler's 
schedule of activities does not include free time or recreation in 
excess of that consistent with a full-time schedule.

[[Page 91]]

    (2) The travel-related transactions set forth in Sec. 515.560(c) and 
such additional transactions as are directly incident to the 
facilitation of the temporary sojourn of aircraft and vessels as 
authorized by 15 CFR 740.15 (License Exception Aircraft, Vessels and 
Spacecraft) or pursuant to other authorization by the Department of 
Commerce for authorized travel between the United States and Cuba, 
including travel-related transactions by persons subject to U.S. 
jurisdiction who are required for normal operation and service aboard a 
vessel or aircraft, as well as persons subject to U.S. jurisdiction who 
are required to provide services to a vessel in port or aircraft on the 
ground, are authorized, provided that:
    (i) Such travel-related transactions are limited to the duration and 
scope of their duties in relation to the particular authorized temporary 
sojourn; and
    (ii) The aircraft or vessel must be transporting individuals whose 
travel between the United States and Cuba is authorized pursuant to any 
section of this part other than paragraph (c)(2) of this section.
    (d) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to the 
exportation and reexportation of items to Cuba when such transactions do 
not qualify for the general license under paragraph (c) of this section.

[81 FR 71374, Oct. 17, 2016]



Sec. 515.534  Negotiation of, and entry into, contingent contracts
relating to transactions prohibited by this part.

    (a) Persons subject to the jurisdiction of the United States are 
authorized to enter into, and to engage in all transactions ordinarily 
incident to the negotiation of and entry into, contingent contracts for 
transactions that are prohibited by this part, provided that:
    (1) The performance of any such contingent contract is made 
expressly contingent on the prior authorization of the Office of Foreign 
Assets Control pursuant to this part or authorization no longer being 
required; and
    (2) The performance of any such contingent contract that is subject 
to licensing requirements of another Federal agency is expressly made 
contingent upon the prior authorization of that agency or the removal of 
those licensing requirements.
    (b) For purposes of this section, the term ``contingent contracts'' 
includes executory contracts, executory pro forma invoices, agreements 
in principle, executory offers capable of acceptance such as bids or 
proposals in response to public tenders, binding memoranda of 
understanding, or any other similar agreement.

    Note to Sec. 515.534: This section does not authorize transactions 
related to travel to, from, or within Cuba. See Sec. 515.533(c) for a 
general license authorizing travel-related and other transactions 
incident to the negotiation of contracts for the exportation or 
reexportation of certain items to Cuba, and Sec. 515.564(a)(2) for a 
general license authorizing travel-related and other transactions 
incident to attending or organizing professional meetings in Cuba, which 
include professional meetings relating to the negotiation of contingent 
contracts authorized by this section.

[81 FR 71375, Oct. 17, 2016]



Sec. 515.535  Exchange of certain securities.

    (a) Subject to the limitations and conditions of paragraph (b) of 
this section and notwithstanding Sec. 515.202, any banking institution 
within the United States is authorized to engage in the following 
transactions with respect to securities listed on a national securities 
exchange, including the withdrawal of such securities from blocked 
accounts:
    (1) Exchange of certificates necessitated by reason of changes in 
corporate name, par value or capitalization,
    (2) Exchanges of temporary for permanent certificates,
    (3) Exchanges or deposits under plans of reorganization,
    (4) Exchanges under refunding plans, or
    (5) Exchanges pursuant to conversion privileges accruing to 
securities held.
    (b) This section does not authorize the following transactions:
    (1) Any exchange of securities unless the new securities and other 
proceeds,

[[Page 92]]

if any, received are deposited in the blocked account in which the 
original securities were held immediately prior to the exchange.
    (2) Any exchange of securities registered in the name of any 
designated national, unless the new securities received are registered 
in the same name in which the securities exchanged were registered prior 
to the exchange.
    (3) Any exchange of securities issued by a person engaged in the 
business of offering, buying, selling, or otherwise dealing, or trading 
in securities, or evidences thereof, issued by another person.
    (4) Any transaction with respect to any security by an issuer or 
other obligor who is a designated national.



Sec. 515.536  Certain transactions with respect to merchandise affected
by Sec. 515.204.

    (a) The purchase outside the United States for importation into the 
United States of nickel-bearing materials presumptively subject to 
Sec. 515.204 and the importation of such merchandise into the United 
States are authorized if there is presented to the collector of customs 
in connection with such importation the original of an appropriate 
certificate of origin as defined in paragraph (b) of this section and 
provided that the merchandise was shipped to the United States directly, 
or on a through bill of lading, from the country issuing the appropriate 
certificate of origin.
    (b) A certificate of origin is appropriate for the purposes of this 
section only if
    (1) It is a certificate of origin the availability of which for 
Cuban Assets Control purposes has been announced in the Federal Register 
by the Office of Foreign Assets Control; and
    (2) It bears a statement by the issuing agency referring to the 
Cuban Assets Control Regulations or stating that the certificate has 
been issued under procedures agreed upon with the U.S. Government.

[30 FR 15371, Dec. 14, 1965, as amended at 47 FR 4254, Jan. 29, 1982; 50 
FR 5753, Feb. 12, 1985; 54 FR 5234, Feb. 2, 1989; 81 FR 71375, Oct. 17, 
2016]



Sec. 515.540  [Reserved]



Sec. 515.542  Mail and telecommunications-related transactions.

    (a) All transactions, including payments, incident to the receipt or 
transmission of mail and parcels between the United States and Cuba are 
authorized, provided that the importation or exportation of such mail 
and parcels is exempt from or authorized pursuant to this part.
    (b) All transactions, including payments, incident to the provision 
of telecommunications services related to the transmission or the 
receipt of telecommunications involving Cuba, including the entry into 
and performance under roaming service agreements with telecommunications 
services providers in Cuba, by persons subject to U.S. jurisdiction are 
authorized. This paragraph does not authorize any transactions addressed 
in paragraphs (c) or (d) of this section, nor does it authorize the 
entry into or performance of a contract with or for the benefit of any 
particular individual in Cuba.
    (c) All persons subject to U.S. jurisdiction are authorized to enter 
into, and make payments under, contracts with telecommunications service 
providers, or particular individuals in Cuba, for telecommunications 
services provided to particular individuals in Cuba, provided that such 
individuals in Cuba are not prohibited officials of the Government of 
Cuba, as defined in Sec. 515.337 of this part, or prohibited members of 
the Cuban Communist Party, as defined in Sec. 515.338 of this part. The 
authorization in this paragraph includes payment for activation, 
installation, usage (monthly, pre-paid, intermittent, or other), 
roaming, maintenance, and termination fees.
    (d) General license for telecommunications facilities. Transactions, 
including payments, incident to the establishment of facilities, 
including fiber-optic cable and satellite facilities, to provide 
telecommunications services linking the United States or third countries 
and Cuba, including facilities to provide telecommunications services in 
Cuba, are authorized.
    (e) Persons subject to U.S. jurisdiction are authorized to enter 
into licensing agreements related to services

[[Page 93]]

authorized by paragraphs (b) through (d) of this section, and to market 
such services.
    (f) [Reserved]
    (g) Any entity subject to U.S. jurisdiction relying on paragraph 
(b), (c), or (d) of this section shall notify OFAC in writing within 30 
days after commencing or ceasing to offer such services, as applicable, 
and shall furnish by January 15 and July 15 of each year semiannual 
reports providing the total amount of all payments made to Cuba or a 
third country related to any of the services authorized by this section 
during the prior six months. These notifications and reports must be 
captioned ``Section 515.542 Notification'' or ``Section 515.542 Report'' 
and faxed to 202/622-6931 or mailed to the Office of Foreign Assets 
Control, Attn: Regulatory Affairs Division, 1500 Pennsylvania Avenue 
NW., Annex, Washington, DC 20220.
    (h) For purposes of this section, the term ``telecommunications 
services'' includes data, telephone, telegraph, internet connectivity, 
radio, television, news wire feeds, and similar services, regardless of 
the medium of transmission, including transmissions by satellite.
    (i) Nothing in this section authorizes the exportation or 
reexportation of any items to Cuba. For the rules related to 
authorization of exports and reexports to Cuba, see Secs. 515.533 and 
515.559.
    (j) Nothing in this section authorizes transactions related to 
travel to, from, or within Cuba.

    Note 1 to Sec. 515.542: For an authorization of travel-related 
transactions that are directly incident to the conduct of market 
research, commercial marketing, sales or contract negotiation, 
accompanied delivery, installation, leasing, servicing, or repair in 
Cuba of items consistent with the export or reexport policy of the 
Department of Commerce, see Sec. 515.533(c). For an authorization of 
travel-related transactions that are directly incident to participation 
in professional meetings, including where such meetings relate to 
telecommunications services or other activities authorized by paragraphs 
(b) through (e) of this section, see Sec. 515.564(a).
    Note 2 to Sec. 515.542: For general licenses authorizing physical 
and business presence in Cuba for certain persons, see Sec. 515.573. An 
authorization related to business presence was previously included in 
this section. For an authorization of certain internet-related services, 
see Sec. 515.578.

[80 FR 2293, Jan. 16, 2015, as amended at 80 FR 56921, Sept. 21, 2015; 
81 FR 13991, Mar. 16, 2016; 81 FR 71376, Oct. 17, 2016]



Sec. 515.543  Proof of origin.

    Specific licenses for importation of goods of Cuban origin are 
generally not issued unless the applicant submits satisfactory 
documentary proof of the location of the goods outside Cuba prior to 
July 8, 1963 and of the absence of any Cuban interest in the goods at 
all times on or since that date. Since the type of document which would 
constitute satisfactory proof varies depending upon the facts of the 
particular case, it is not possible to state in advance the type of 
documents required. However, it has been found that affidavits, 
statements, invoices, and other documents prepared by manufacturers, 
processors, sellers or shippers cannot be relied on and are therefore 
not by themselves accepted by the Office of Foreign Assets Control as 
satisfactory proof of origin. Independent corroborating documentary 
evidence, such as insurance documents, bills of lading, etc., may be 
accepted as satisfactory proof.

[39 FR 25317, July 10, 1974]



Sec. 515.544  Certain gifts sent to the United States.

    The importation into the United States of merchandise from Cuba or 
Cuban-origin merchandise from a third country intended as gifts is 
authorized, provided that the value of the merchandise is not more than 
$100; the merchandise is of a type and in quantities normally given as 
gifts between individuals; the merchandise is sent and not carried by a 
traveler (including as accompanied or unaccompanied baggage); and the 
merchandise is not alcohol or tobacco products.

    Note to Sec. 515.544: See Sec. 515.533 for a general license 
authorizing transactions ordinarily incident to exports of items from 
the United States that are licensed or otherwise authorized by the 
Department of Commerce, which may include gifts sent to Cuba.

[80 FR 56921, Sept. 21, 2015]

[[Page 94]]



Sec. 515.545  Transactions related to information and informational
materials.

    (a) Transactions relating to the creation, dissemination, artistic 
or other substantive alteration, or enhancement of informational 
materials are authorized, including employment of Cuban nationals and 
remittance of royalties or other payments in connection with such 
transactions. This section authorizes marketing related to the 
dissemination of such informational materials but does not authorize 
other marketing or business consulting services.
    (b) General license. (1) The travel-related transactions set forth 
in Sec. 515.560(c) and such additional transactions as are directly 
incident to the exportation, importation, or transmission of information 
or informational materials as defined in Sec. 515.332 are authorized, 
provided that the traveler's schedule of activities does not include 
free time or recreation in excess of that consistent with a full-time 
schedule.
    (2) The travel-related transactions set forth in Sec. 515.560(c) and 
such additional transactions as are directly incident to professional 
media or artistic productions of information or informational materials 
for exportation, importation, or transmission, including the filming or 
production of media programs (such as movies and television programs), 
the recording of music, and the creation of artworks in Cuba, are 
authorized, provided that the traveler is regularly employed in or has 
demonstrated professional experience in a field relevant to such 
professional media or artistic productions, and that the traveler's 
schedule of activities does not include free time or recreation in 
excess of that consistent with a full-time schedule.
    (c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to 
information and informational materials that do not qualify for the 
general license under paragraph (b) of this section.

    Note 1 to Sec. 515.545. With respect to transactions necessary and 
ordinarily incident to the publishing and marketing of manuscripts, 
books, journals and newspapers, see Sec. 515.577.
    Note 2 to Sec. 515.545: See Sec. 515.332(a)(2) for clarification as 
to the types of artworks that are considered to be informational 
materials.

[54 FR 5234, Feb. 2, 1989, as amended at 60 FR 39257, Aug. 2, 1995; 64 
FR 25813, May 13, 1999; 69 FR 75469, Dec. 17, 2004; 74 FR 46006, Sept. 
8, 2009; 80 FR 2294, Jan. 16, 2015; 81 FR 4585, Jan. 27, 2016]



Sec. 515.546  Accounts of Cuban sole proprietorships.

    Specific licenses are issued unblocking sole proprietorships 
established under the laws of Cuba if the proprietor has emigrated from 
Cuba and established residence in the United States or a country in the 
authorized trade territory.

[39 FR 25319, July 10, 1974. Redesignated at 64 FR 25813, May 13, 1999]



Sec. 515.547  Certain transactions related to medical research and 
Cuban-origin pharmaceuticals; research samples.

    (a) Persons subject to U.S. jurisdiction are authorized to engage in 
all transactions incident to joint medical research projects with Cuban 
nationals.

    Note 1 to paragraph (a): The export or reexport to Cuba of goods 
(including software) or technology subject to the Export Administration 
Regulations (15 CFR parts 730 through 774) may require separate 
authorization from the Department of Commerce.
    Note 2 to paragraph (a): This paragraph does not authorize 
transactions related to travel to, from, or within Cuba, nor does it 
authorize transactions related to travel to, from, or within the United 
States by Cuban nationals. See Sec. 515.564(a) for a general license 
authorizing travel-related and other transactions incident to 
professional research and professional meetings in Cuba. See 
Sec. 515.571 for a general license authorizing transactions incident to 
travel to, from, and within the United States by certain Cuban 
nationals.
    Note 3 to paragraph (a): This paragraph also does not authorize 
persons subject to U.S. jurisdiction to establish a business or physical 
presence in Cuba, to hire Cuban nationals, or to engage in any 
transactions prohibited by Sec. 515.208.

    (b) Persons subject to U.S. jurisdiction are authorized to engage in 
all transactions incident to obtaining approval from the U.S. Food and 
Drug

[[Page 95]]

Administration (FDA) of Cuban-origin pharmaceuticals, including 
discovery and development, pre-clinical research, clinical research, 
regulatory review, regulatory approval and licensing, regulatory post-
market activities, and the importation into the United States of Cuban-
origin pharmaceuticals.
    (c) Persons subject to U.S. jurisdiction are authorized to engage in 
all transactions incident to the marketing, sale, or other distribution 
in the United States of FDA-approved Cuban-origin pharmaceuticals, 
including the importation into the United States of Cuban-origin 
pharmaceuticals.
    (d)(1) Opening and maintaining bank accounts at Cuban financial 
institutions to engage in authorized transactions. The opening and 
maintenance of accounts, including the deposit of funds in such accounts 
by wire transfer, at a financial institution in Cuba, is authorized 
provided that such accounts are used only for transactions authorized 
pursuant to this section.
    (2) Closing bank accounts. The closing of an account opened pursuant 
to the authorization in paragraph (d)(1) of this section is authorized, 
provided that any transfer of funds may only be effected by wire 
transfer to an account maintained at a depository institution, as 
defined in Sec. 515.333, that is a person subject to U.S. jurisdiction.
    (e) Specific licenses. (1) To the extent not authorized by paragraph 
(b) of this section, specific licenses may be issued for the importation 
of Cuban-origin commodities for bona-fide research purposes in sample 
quantities only.
    (2) Specific licenses may be issued for transactions related to 
medical research or pharmaceutical products not authorized by paragraphs 
(a) through (c) of this section.

    Note to Sec. 515.547: Transactions authorized by this section may 
require separate authorizations or approvals by the FDA or other Federal 
agencies.

[81 FR 71376, Oct. 17, 2016]



Sec. 515.548  Overflight payments, emergency landings, and air 
ambulance services authorized.

    (a) The receipt of, and payment of charges for, services rendered by 
Cuba or a Cuban national in connection with overflights of Cuba or 
emergency landings in Cuba by aircraft registered in the United States 
or owned or controlled by, or chartered to, persons subject to U.S. 
jurisdiction are authorized.
    (b) Persons subject to U.S. jurisdiction are authorized to engage in 
all transactions necessary to provide air ambulance and related medical 
services, including medical evacuation from Cuba, for individual 
travelers in Cuba, regardless of nationality or the purpose of the 
individual's travel to Cuba.

    Note to paragraph (b): Persons providing air ambulance services 
authorized by paragraph (b) are authorized to carry persons who are 
close relatives, as defined in Sec. 515.539, of the subject of the 
evacuation.

[80 FR 56921, Sept. 21, 2015]



Sec. 515.549  Bank accounts and other property of non-Cuban decedents
in Cuba on or after July 8, 1963.

    Specific licenses may be issued authorizing the administration of 
the estates of non-Cuban decedents who died in Cuba on or after July 8, 
1963, provided that any distribution to a blocked national of Cuba is 
made by deposit in a blocked account in a domestic bank in the name of 
the blocked national.

[80 FR 2294, Jan. 16, 2015]



Sec. 515.550  Certain vessel transactions authorized.

    (a) Unless a vessel is otherwise engaging or has otherwise engaged 
in transactions that would prohibit entry pursuant to Sec. 515.207, 
Sec. 515.207 shall not apply to a vessel that is:
    (1) Engaging or has engaged in trade with Cuba authorized pursuant 
to this part;

    Note to paragraph (a)(1): The authorization in this paragraph 
includes, for example, trade with Cuba authorized pursuant to 
Sec. 515.533, Sec. 515.559, or Sec. 515.582, or by specific license.

    (2) Engaging or has engaged in trade with Cuba that is exempt from 
the prohibitions of this part (see Sec. 515.206);
    (3) Engaging or has engaged in the exportation or reexportation to 
Cuba from a third country of agricultural

[[Page 96]]

commodities, medicine, or medical devices that, were they subject to the 
Export Administration Regulations (15 CFR parts 730 through 774) (EAR), 
would be designated as EAR99;
    (4) A foreign vessel that has entered a port or place in Cuba while 
carrying students, faculty, and staff that are authorized to travel to 
Cuba pursuant to Sec. 515.565(a); or
    (5) Carrying or has carried persons between the United States and 
Cuba or within Cuba pursuant to the authorization in Sec. 515.572(a)(2) 
or, in the case of a vessel used solely for personal travel (and not 
transporting passengers), pursuant to a license or other authorization 
issued by the Department of Commerce for the exportation or 
reexportation of the vessel to Cuba.
    (b) Unless a vessel is otherwise engaging or has otherwise engaged 
in transactions that would prohibit entry pursuant to Sec. 515.207, 
Sec. 515.207(a) shall not apply to a foreign vessel that has engaged in 
the exportation to Cuba from a third country only of items that, were 
they subject to the EAR, would be designated as EAR99 or would be 
controlled on the Commerce Control List only for anti-terrorism reasons.

[81 FR 71376, Oct. 17, 2016]



Sec. 515.551  Joint bank accounts.

    (a) Specific licenses are issued unblocking a portion of or all of a 
joint bank account blocked by reason of the fact that one or more of the 
persons in whose names the account is held is a blocked national, where 
a non-blocked applicant claims beneficial ownership, as follows:
    (1) Joint bank account, without survivorship provisions. Specific 
licenses are issued unblocking only that amount with respect to which 
the applicant is able to prove beneficial ownership by documentary 
evidence independent of his assertions of interest.
    (2) Joint bank account, with survivorship provisions. Specific 
licenses are issued unblocking an amount equivalent to that portion of 
the total amount to which the applicant would be entitled if the total 
were divided evenly among the persons in whose names the account is held 
(e.g. 50 percent where there are two names; 33\1/3\ percent where there 
are three names). Such licenses generally are issued on the basis of 
applicant's assertions of beneficial ownership interest without the 
requirement of independent evidence.
    (3) Joint bank account in the names of a husband and wife, with 
survivorship provision. Specific licenses are issued unblocking portions 
of such accounts blocked by reason of the residence of one spouse in 
Cuba in favor of the non-blocked spouse under the policy stated in 
paragraph (a)(2) of this section. However, if 50 percent of the account 
has been unblocked under that policy, and the spouse who is the blocked 
Cuban national subsequently dies, the surviving spouse may be entitled 
to a license unblocking the remainder of the assets under Sec. 515.522.
    (b) [Reserved]

[39 FR 25318, July 10, 1974, as amended at 49 FR 27145, July 2, 1984; 54 
FR 5234, Feb. 2, 1989; 64 FR 25813, May 13, 1999]



Sec. 515.552  Proceeds of insurance policies.

    (a) Specific licenses are issued authorizing payment of the proceeds 
of blocked life insurance policies issued on the life of a Cuban 
national who died in Cuba after July 8, 1963, to certain beneficiaries 
licensed as unblocked nationals pursuant to Sec. 515.505, as follows:
    (1) The applicant is a permanent resident of the United States or 
the authorized trade territory and is not a specially designated 
national; and
    (2) No interest on the part of a designated national not licensed as 
an unblocked national exists in that portion of the funds to which the 
applicant is entitled.
    (b) Applications for specific licenses under this section must 
include all of the following information:
    (1) Proof of permanent residence in the United States or the 
authorized trade territory, to be established by the submission of 
documentation issued by relevant government authorities that must 
include at least two of the following documents:
    (i) Passport;
    (ii) Voter registration card;
    (iii) Permanent resident alien card; or
    (iv) National identity card.

[[Page 97]]


Other documents tending to show residency, such as income tax returns, 
may also be submitted in support of government documentation, but will 
not suffice in and of themselves;
    (2) Proof of entitlement under the insurance policy to be 
established by a copy of the policy and an affidavit from an appropriate 
officer of a recognized insurance company acknowledging the legitimacy 
of the beneficiary's claim and the amount of the payment; and
    (c) Any document provided pursuant to this section that is not 
written in the English language must be accompanied by a translation 
into English, as well as a certification by the translator that he is 
not an interested party to the proceeding, is qualified to make the 
translation, and has made an accurate translation of the document in 
question.

[54 FR 5234, Feb. 2, 1989]



Sec. 515.553  Bank accounts of official representatives in Cuba 
of foreign governments.

    Specific licenses are issued authorizing payments from accounts of 
official representatives in Cuba of foreign governments for transactions 
which are not inconsistent with the purposes of any of the regulations 
in this chapter.

[39 FR 25319, July 10, 1974]



Sec. 515.554  Transfers of abandoned property under State laws.

    (a) Except as stated in paragraphs (b) and (c) of this section, 
specific licenses are not issued authorizing the transfer of blocked 
property to State agencies under State laws governing abandoned 
property.
    (b) Specific licenses are issued authorizing the transfer of blocked 
property, pursuant to the laws of the State governing abandoned 
property, to the appropriate State agency: Provided, That the State's 
laws are custodial in nature, i.e., there is no permanent transfer of 
beneficial interest to the State. Licenses require the property to be 
held by the State in accounts which are identified as blocked under the 
regulations. A separate index of these blocked assets is required to be 
maintained by the State agency. The requirements of this section for 
identification and separate indexing of blocked assets apply to all 
blocked assets held by State agencies and any licenses issued prior to 
the effective date of this section hereby are amended by the 
incorporation of such requirements.
    (c) To be eligible for a specific license under this section, the 
state agency must demonstrate that it has the statutory authority under 
appropriate state law to comply with the requirements of Sec. 515.205. 
Such a showing shall include an opinion of the State Attorney General 
that such statutory authority exists.

[44 FR 11771, Mar. 2, 1979]



Sec. 515.555  Assets of Cuban firms wholly or substantially owned
by U.S. citizens.

    (a) Specific licenses are issued to applicants requesting the 
unblocking of their stock in Cuban corporations if:
    (1) The corporation was wholly or substantially owned by United 
States citizens on July 8, 1963;
    (2) The assets are in the United States and either;
    (3) The applicant is a stockholder who was a United States citizen 
on July 8, 1963 and owned the stock interests on that date; or,
    (4) The applicant is a non-blocked person who acquired such stock 
interest after July 8, 1963 from a person specified in paragraph (a)(3) 
of this section.
    (b) The issuance of licenses is conditioned on the applicant's 
furnishing the following information:
    (1) Detailed information as to the status of all debts and other 
obligations of the Cuban corporation, specifying the citizenship and 
residence of each creditor as of July 8, 1963, and as of the date of 
filing of the application;
    (2) Current status of the Cuban corporation, e.g., liquidated, 
nationalized, inoperative, etc.;
    (3) A detailed description of all the corporation's assets, wherever 
located;
    (4) A list of all officers, directors, and stockholders giving the 
citizenship and the residence of each such person as of July 8, 1963; 
and,
    (5) Satisfactory proof that such stock was owned by U.S. citizens as 
of July 8,

[[Page 98]]

1963. Such proof may consist of sworn statements by the persons in 
question attesting to their citizenship. The Office of Foreign Assets 
Control reserves the right to require additional proof of citizenship.

[39 FR 25319, July 10, 1974]



Sec. 515.556  [Reserved]



Sec. 515.557  Accounts of Cuban partnerships.

    Specific licenses are issued unblocking partnerships established 
under the laws of Cuba as follows:
    (a) Where all of the general partners and limited partners, if any, 
have emigrated from Cuba and have established residence in the United 
States or in a country in the authorized trade territory, specific 
licenses are issued unblocking the assets of the partnership after 
deducting the total debt due creditors wherever located.
    (b) Where one or more partners, whether general or limited, is still 
in Cuba (or elsewhere but still blocked), specific licenses are issued 
unblocking only the net pro-rata shares of those partners who are 
resident in the United States or in a country in the authorized trade 
territory after deducting the total debt due creditors wherever located.
    (c) The issuance of licenses is conditioned on the applicant's 
furnishing the following information:
    (1) Detailed information as to the status of all debts and other 
obligations of the blocked partnership, specifying the citizenship and 
residence of each creditor as of July 8, 1963, and as of the date of the 
application;
    (2) Current status of the Cuban partnership, e.g., liquidated, 
nationalized, inoperative, etc.;
    (3) A detailed description of all the partnership's assets, wherever 
located; and,
    (4) A list of all partners, indicating whether they are general, 
limited, etc. and giving their citizenship and residence as of July 8, 
1963, and as of the date of filing of the application.

[39 FR 25319, July 10, 1974]



Sec. 515.558  Bunkering of Cuban vessels and fueling of Cuban aircraft
by American-owned or controlled foreign firms.

    Foreign firms owned or controlled by United States persons are 
authorized to engage in transactions ordinarily incident to the 
bunkering of vessels and to the fueling of aircraft owned or controlled 
by, or chartered to, Cuba or nationals thereof.

(50 U.S.C. App. 5(b); 22 U.S.C. 2370(a); E. O. 9193, 3 CFR 1943 Cum. 
Supp.; Treas. Dept. Order No. 128, 32 FR 3472)

[42 FR 58518, Nov. 10, 1977; 43 FR 19852, May 9, 1978. Redesignated at 
64 FR 25813, May 13, 1999]



Sec. 515.559  Certain export and import transactions by U.S.-owned
or -controlled foreign firms.

    (a) Effective October 23, 1992, no specific licenses will be issued 
pursuant to paragraph (b) of this section for transactions between U.S.-
owned or controlled firms in third countries and Cuba for the 
exportation to Cuba of commodities produced in the authorized trade zone 
or for the importation of goods of Cuban origin into countries in the 
authorized trade zone, unless, in addition to meeting all requirements 
of paragraph (b), one or more of the following conditions are satisfied:
    (1) The contract underlying the proposed transaction was entered 
into prior to October 23, 1992;
    (2) The transaction is for the exportation of medicine or medical 
supplies from a third country to Cuba, which shall not be restricted:
    (i) Except to the extent such restrictions would be permitted under 
section 5(m) of the Export Administration Act of 1979 or section 
203(b)(2) of the International Emergency Economic Powers Act if the 
exportation were subject to these provisions;
    (ii) Except in a case in which there is a reasonable likelihood that 
the item to be exported will be used for purposes of torture or other 
human rights abuses;
    (iii) Except in a case in which there is a reasonable likelihood 
that the item to be exported will be reexported; or
    (iv) Except in a case in which the item to be exported could be used 
in

[[Page 99]]

the production of any biotechnological product; and
    (v) Except in a case where it is determined that the United States 
Government is unable to verify, by on-site inspection or other means, 
that the item to be exported will be used for the purpose for which it 
was intended and only for the use and benefit of the Cuban people, but 
this exception shall not apply to donations for humanitarian purposes to 
a nongovernmental organization in Cuba.
    (3) The transaction is for the exportation of telecommunications 
equipment from a third country, when the equipment is determined to be 
necessary for efficient and adequate telecommunications service between 
the United States and Cuba.
    (b) Specific licenses will be issued in appropriate cases for 
certain categories of transactions between U.S.-owned or controlled 
firms in third countries and Cuba, where local law requires, or policy 
in the third country favors, trade with Cuba. The categories include:
    (1) Exportation to Cuba of commodities produced in the authorized 
trade territory, provided:
    (i) The commodities to be exported are non-strategic;
    (ii) United States-origin technical data (other than maintenance, 
repair and operations data) will not be transferred;
    (iii) If any U.S.-origin parts and components are included therein, 
such inclusion has been authorized by the Department of Commerce;
    (iv) If any U.S.-origin spares are to be reexported to Cuba in 
connection with a licensed transaction, such reexport has been 
authorized by the Department of Commerce;
    (v) No U.S. dollar accounts are involved; and
    (vi) Any financing or other extension of credit by a U.S.-owned or 
controlled firm is granted on normal short-term conditions which are 
appropriate for the commodity to be exported.
    (2) [Reserved]
    (3) Importation of goods of Cuban origin into countries in the 
authorized trade territory.

    Note to paragraph (b): On October 23, 1992, sections 1705 and 1706 
of the Cuban Democracy Act of 1992, Pub. L. 102-484 (Oct. 23, 1992) 
(codified at 22 U.S.C. 6004 and 6005, respectively), prohibited OFAC 
from issuing licenses for any transaction described in this paragraph 
other than those transactions currently set forth in paragraph (a).

    (c) The term strategic goods means any item, regardless of origin, 
of a type included in the Commodity Control List of the U.S. Department 
of Commerce (15 CFR part 399) and identified by the code letter ``A'' 
following the Export Control Commodity Numbers, or of a type the 
unauthorized exportation of which from the United States is prohibited 
by regulations issued under the Arms Export Control Act of 1976, 22 
U.S.C. 2778, or under the Atomic Energy Act of 1954, 42 U.S.C. 2011, et 
seq., or successor acts restricting the export of strategic goods.
    (d) General license. Travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are directly incident to 
market research, commercial marketing, sales or contract negotiation, 
accompanied delivery, installation, leasing, servicing, or repair in 
Cuba of exports that are consistent with the licensing policy under 
paragraph (a) of this section are authorized, provided that the 
traveler's schedule of activities does not include free time or 
recreation in excess of that consistent with a full-time schedule.
    (e) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to certain 
transactions by U.S.-owned or -controlled foreign firms with Cuba that 
do not qualify for the general license under paragraph (d) of this 
section.

    Note 1 to Sec. 515.559: For authorization of the reexportation of 
U.S.-origin items, see Sec. 515.533. Transactions by U.S.-owned or -
controlled foreign firms directly incident to the exportation of 
information or informational materials or the donation of food to 
nongovernmental entities or individuals in Cuba are exempt from the 
prohibitions of this part. See Sec. 515.206. For the waiver of the 
prohibitions contained in Sec. 515.207 with respect to vessels 
transporting shipments of items pursuant to this section, see 
Sec. 515.550.

[[Page 100]]

    Note 2 to Sec. 515.559: See Sec. 515.585 for provisions related to 
certain transactions by persons subject to U.S. jurisdiction with 
certain Cuban nationals in third countries.

[40 FR 47108, Oct. 8, 1975, as amended at 42 FR 1472, Jan. 7, 1977; 42 
FR 16621, Mar. 29, 1977; 50 FR 27438, July 3, 1985; 53 FR 47527, Nov. 
23, 1988; 58 FR 34710, June 29, 1993; 64 FR 25814, May 13, 1999; 66 FR 
36687, July 12, 2001; 68 FR 14146, Mar. 24, 2003; 80 FR 2294, Jan. 16, 
2015; 80 FR 56921, Sept. 21, 2015; 81 FR 13991, Mar. 16, 2016; 81 FR 
71376, Oct. 17, 2016]



Sec. 515.560  Travel-related transactions to, from, and within Cuba
by persons subject to U.S. jurisdiction.

    (a) The travel-related transactions listed in paragraph (c) of this 
section may be authorized either by a general license or on a case-by-
case basis by a specific license for travel related to the following 
activities (see the referenced sections for the applicable general and 
specific licensing criteria):
    (1) Family visits (see Sec. 515.561);
    (2) Official business of the U.S. government, foreign governments, 
and certain intergovernmental organizations (see Sec. 515.562);
    (3) Journalistic activity (see Sec. 515.563);
    (4) Professional research and professional meetings (see 
Sec. 515.564);
    (5) Educational activities (see Sec. 515.565);
    (6) Religious activities (see Sec. 515.566);
    (7) Public performances, clinics, workshops, athletic and other 
competitions, and exhibitions (see Sec. 515.567);
    (8) Support for the Cuban people (see Sec. 515.574);
    (9) Humanitarian projects (see Sec. 515.575);
    (10) Activities of private foundations or research or educational 
institutes (see Sec. 515.576);
    (11) Exportation, importation, or transmission of information or 
informational materials (see Sec. 515.545); and
    (12) Certain export transactions that may be considered for 
authorization under existing Department of Commerce regulations and 
guidelines with respect to Cuba or engaged in by U.S.-owned or -
controlled foreign firms (see Secs. 515.533 and 515.559).
    (b) Effective October 28, 2000, no specific licenses will be issued 
authorizing the travel-related transactions in paragraph (c) of this 
section in connection with activities other than those referenced in 
paragraph (a) of this section.
    (c) Persons generally or specifically licensed under this part to 
engage in transactions in connection with travel to, from, and within 
Cuba may engage in the following transactions:
    (1) Transportation to and from Cuba. All transportation-related 
transactions ordinarily incident to travel to and from (not within) Cuba 
are authorized.
    (2) Living expenses in Cuba. All transactions ordinarily incident to 
travel within Cuba, including payment of living expenses and the 
acquisition in Cuba of goods for personal consumption there, are 
authorized.
    (3) Importation of Cuban merchandise. The purchase or other 
acquisition in Cuba and importation as accompanied baggage into the 
United States of merchandise is authorized, provided that the 
merchandise is imported for personal use only. The importation of Cuban-
origin information and informational materials is exempt from the 
prohibitions of this part, as described in Sec. 515.206. The importation 
of certain other specified goods and services is authorized in 
Secs. 515.544, 515.547, 515.569, 515.578, 515.582, and 515.585.
    (4) Carrying remittances to Cuba. The carrying to Cuba of any 
remittances that the licensed traveler is authorized to remit pursuant 
to Sec. 515.570 is authorized, provided that no emigration-related 
remittances authorized by Sec. 515.570(e) are carried to Cuba unless a 
U.S. immigration visa has been issued for each payee and the licensed 
traveler can produce the visa recipients' full names, dates of birth, 
visa numbers, and visa dates of issuance.
    (5) Processing certain financial instruments. All transactions 
incident to the processing and payment of credit cards, debit cards, 
stored value cards, checks, drafts, travelers' checks, and similar 
instruments used or negotiated in Cuba by any person authorized pursuant 
to this part to engage in financial transactions in Cuba are authorized. 
Persons subject to U.S. jurisdiction may rely on the traveler with 
regard to compliance with this paragraph, provided that such persons do 
not know or have reason to know that a transaction is not authorized by 
this section.


[[Page 101]]


    Note to Sec. 515.560(c)(5): Please see Sec. 515.584 for additional 
provisions related to the processing and payment of credit and debit 
card transactions.

    (6)(i) Opening and maintaining bank accounts. All transactions 
incident to the opening and maintenance of accounts, including the 
deposit of funds in such accounts by wire transfer, at a financial 
institution in Cuba are authorized, provided that such accounts are used 
only while the traveler is located in Cuba and for the purpose of 
accessing funds in Cuba for transactions authorized pursuant to, or 
exempt from, this part.
    (ii) Closing bank accounts. All transactions incident to the closing 
of accounts opened pursuant to the authorization in paragraph (c)(6)(i) 
of this section are authorized, provided that any transfer of funds may 
only be effected by wire transfer to an account maintained at a 
depository institution, as defined in Sec. 515.333, that is a person 
subject to U.S. jurisdiction.

    Note to paragraph (c)(6): Account(s) authorized by this general 
license may only be accessed while the account holder is located in Cuba 
for travel authorized pursuant to this part. The account(s) may not be 
accessed or utilized by the account holder unless the account holder is 
located in Cuba and is engaging in authorized transactions. The 
account(s) may be maintained but not accessed while the account holder 
is located outside of Cuba other than for the purpose of funding or 
closing the bank account as authorized in paragraph (c)(6).

    (d) A blocked Cuban national permanently resident in Cuba who is 
departing the United States may carry currency as follows:
    (1) The amount of any currency brought into the United States by the 
Cuban national and registered with U.S. Customs and Border Protection 
upon entry;
    (2) Funds received as remittances pursuant to Sec. 515.570 by the 
Cuban national during his or her stay in the United States; and
    (3) Salaries or other compensation earned by the Cuban national up 
to any amount that can be substantiated through payment receipts as 
authorized in Sec. 515.571(a)(5).
    (e) [Reserved]
    (f) Nothing in this section authorizes transactions in connection 
with tourist travel to Cuba.

    Note 1 to Sec. 515.560: Each person relying on the general 
authorization in this section must retain specific records related to 
the authorized travel transactions. See Secs. 501.601 and 501.602 of 
this chapter for applicable recordkeeping and reporting requirements.
    Note 2 to Sec. 515.560: This section authorizes the provision of 
health insurance-, life insurance-, and travel insurance-related 
services to authorized travelers, as well as the receipt of emergency 
medical services and the making of payments related thereto.
    Note 3 to Sec. 515.560: The export or reexport to Cuba of goods 
(including software) or technology subject to the Export Administration 
Regulations (15 CFR parts 730 through 774) may require separate 
authorization from the Department of Commerce.

[64 FR 25814, May 13, 1999, as amended at 66 FR 36688, July 12, 2001; 68 
FR 14146, Mar. 24, 2003; 69 FR 33771, 33773, June 16, 2004; 74 FR 46006, 
Sept. 8, 2009; 76 FR 5074, Jan. 28, 2011; 80 FR 2295, Jan. 16, 2015; 80 
FR 56922, Sept. 21, 2015; 81 FR 13992, Mar. 16, 2016; 81 FR 71376, Oct. 
17, 2016]



Sec. 515.561  Family visits.

    (a) General license. Persons subject to the jurisdiction of the 
United States and persons traveling with them who share a common 
dwelling as a family with them are authorized to engage in the travel-
related transactions set forth in Sec. 515.560(c) and such additional 
transactions as are directly incident to: visiting a close relative, as 
defined in Sec. 515.339, who is a national of Cuba or a person 
ordinarily resident in Cuba; or visiting a close relative located in 
Cuba or accompanying a close relative traveling to Cuba pursuant to the 
authorizations in Sec. 515.562 (official government business), 
Sec. 515.563 (journalistic activity), Sec. 515.564(a) (professional 
research), Sec. 515.565(a)(1) through (4) and (6) (educational 
activities), Sec. 515.566 (religious activities), Sec. 515.575 
(humanitarian projects), or Sec. 515.576 (activities of private 
foundations or research or educational institutes).

    Note to paragraph (a): Each person relying on the general 
authorization in this paragraph must retain specific records related to 
the authorized travel transactions. See Secs. 501.601 and 501.602 of 
this chapter for applicable recordkeeping and reporting requirements.


[[Page 102]]


    (b) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to family 
visits that do not qualify for the general license under paragraph (a) 
of this section.
    (c) An entire group does not qualify for the general license in 
paragraph (a) of this section merely because some members of the group 
qualify individually.

[80 FR 2295, Jan. 16, 2015, as amended at 80 FR 56922, Sept. 21, 2015]



Sec. 515.562  Official business of the U.S. government, foreign 
governments, and certain intergovernmental organizations.

    (a) The travel-related transactions set forth in Sec. 515.560(c) and 
such additional transactions as are directly incident to activities in 
their official capacities by persons who are employees, contractors, or 
grantees of the United States Government, any foreign government, or any 
intergovernmental organization of which the United States is a member or 
holds observer status, and who are traveling on the official business of 
their government or intergovernmental organization, are authorized.
    (b) All transactions otherwise prohibited by this part that are for 
the conduct of the official business of the United States Government or 
of any intergovernmental organization of which the United States is a 
member, or holds observer status, by employees, grantees, or contractors 
thereof, are authorized.

    Note to Sec. 515.562(a) and (b): Each person relying on the general 
authorization in this paragraph must retain specific records related to 
the authorized travel transactions. For example, grantees or contractors 
relying on the authorization in this section must retain a copy of their 
grant or contract with the United States Government, foreign government, 
or intergovernmental organization. See Secs. 501.601 and 501.602 of this 
chapter for applicable recordkeeping and reporting requirements.

    (c) An entire group does not qualify for the general license in 
paragraph (a) of this section merely because some members of the group 
qualify individually.
    (d) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to official 
government business that do not qualify for the general licenses under 
paragraph (a) or (b) of this section.

[80 FR 2295, Jan. 16, 2015]



Sec. 515.563  Journalistic activities in Cuba.

    (a) General license. The travel-related transactions set forth in 
Sec. 515.560(c) and such additional transactions as are directly 
incident to journalistic activities in Cuba are authorized, provided 
that:
    (1) The traveler is at least one of the following:
    (i) Regularly employed as a journalist by a news reporting 
organization;
    (ii) Regularly employed as supporting broadcast or technical 
personnel;
    (iii) A freelance journalist with a record of previous journalistic 
experience working on a freelance journalistic project; or
    (iv) Broadcast or technical personnel with a record of previous 
broadcast or technical experience, who are supporting a freelance 
journalist working on a freelance journalistic project; and
    (2) The traveler's schedule of activities does not include free time 
or recreation in excess of that consistent with a full-time schedule.

    Note to Sec. 515.563(a): Each person relying on the general 
authorization in this paragraph must retain specific records related to 
the authorized travel transactions. See Secs. 501.601 and 501.602 of 
this chapter for applicable recordkeeping and reporting requirements.

    (b) An entire group does not qualify for the general license in 
paragraph (a) of this section merely because some members of the group 
qualify individually.
    (c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to 
journalistic activity in Cuba that do

[[Page 103]]

not qualify for the general license under paragraph (a) of this section.

[80 FR 2296, Jan. 16, 2015]



Sec. 515.564  Professional research and professional meetings in Cuba.

    (a) General license--(1) Professional research. The travel-related 
transactions set forth in Sec. 515.560(c) and such additional 
transactions as are directly incident to professional research are 
authorized, provided that:
    (i) The purpose of the research directly relates to the traveler's 
profession, professional background, or area of expertise, including 
area of graduate-level full-time study;
    (ii) The traveler's schedule of activities does not include free 
time or recreation in excess of that consistent with a full-time 
schedule of professional research.
    Example to Sec. 515.564(a)(1): The making of a documentary film in 
Cuba would qualify for the general license in this section if it is a 
vehicle for presentation of the research conducted pursuant to this 
section.

    Note to Sec. 515.564(a)(1): A person does not qualify as engaging in 
professional research merely because that person is a professional who 
plans to travel to Cuba.

    (2) Professional meetings. The travel-related transactions set forth 
in Sec. 515.560(c) and such additional transactions as are directly 
incident to attendance at, or organization of, professional meetings or 
conferences in Cuba are authorized, provided that:
    (i) For a traveler attending a professional meeting or conference, 
the purpose of the meeting or conference directly relates to the 
traveler's profession, professional background, or area of expertise, 
including area of graduate-level full-time study;
    (ii) For a traveler organizing a professional meeting or conference 
on behalf of an entity, either the traveler's profession must be related 
to the organization of professional meetings or conferences or the 
traveler must be an employee or contractor of an entity that is 
organizing the professional meeting or conference; and
    (iii) The traveler's schedule of activities does not include free 
time or recreation in excess of that consistent with a full-time 
schedule of attendance at, or organization of, professional meetings or 
conferences.

    Note to Sec. 515.564(a)(2): Transactions incident to the 
organization of professional meetings or conferences include marketing 
related to such meetings or conferences in Cuba.
    Note to Sec. 515.564(a): Each person relying on the general 
authorization in this paragraph must retain specific records related to 
the authorized travel transactions. See Secs. 501.601 and 501.602 of 
this chapter for applicable recordkeeping and reporting requirements.

    (b) An entire group does not qualify for the general license in 
paragraph (a) of this section of this section merely because some 
members of the group qualify individually.

    Example to Sec. 515.564(b): A musicologist travels to Cuba to 
research Cuban music pursuant to the general license for professional 
research set forth in paragraph (a) of this section. Others who are 
simply interested in music may not engage in travel-related transactions 
with the musicologist in reliance on this general license. For example, 
an art historian who plays in the same band with the musicologist would 
not qualify for the general license.

    (c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to 
professional research or professional meetings in Cuba that do not 
qualify for the general license under paragraph (a) of this section.

[80 FR 2296, Jan. 16, 2015, as amended at 81 FR 4585, Jan. 27, 2016; 81 
FR 71377, Oct. 17, 2016]



Sec. 515.565  Educational activities.

    (a) General license for educational activities. Persons subject to 
U.S. jurisdiction, including U.S. academic institutions and their 
faculty, staff, and students, are authorized to engage in transactions, 
including the travel-related transactions set forth in Sec. 515.560(c), 
that are related to the following activities:
    (1) Participation in a structured educational program in Cuba as 
part of a course offered for credit by a U.S. graduate or undergraduate 
degree-granting academic institution that is sponsoring the program;

[[Page 104]]

    (2) Noncommercial academic research in Cuba specifically related to 
Cuba and for the purpose of obtaining an undergraduate or graduate 
degree;
    (3) Participation in a formal course of study at a Cuban academic 
institution, provided the formal course of study in Cuba will be 
accepted for credit toward the student's graduate or undergraduate 
degree;
    (4) Teaching at a Cuban academic institution related to an academic 
program at the Cuban institution, provided that the individual is 
regularly employed by a U.S. or other non-Cuban academic institution;
    (5) Sponsorship of a Cuban scholar to teach or engage in other 
scholarly activity at the sponsoring U.S. academic institution (in 
addition to those transactions authorized by the general license 
contained in Sec. 515.571).

    Note to paragraph (a)(5): See Sec. 515.571(a) for authorizations 
related to certain banking transactions and receipt of salary or other 
compensation by Cuban nationals present in the United States in a non-
immigrant status or pursuant to other non-immigrant travel authorization 
issued by the U.S. government.

    (6) Educational exchanges sponsored by Cuban or U.S. secondary 
schools involving secondary school students' participation in a formal 
course of study or in a structured educational program offered by a 
secondary school or other academic institution and led by a teacher or 
other secondary school official. This includes participation by a 
reasonable number of adult chaperones to accompany the secondary school 
students to Cuba.
    (7) Sponsorship or co-sponsorship of non commercial academic 
seminars, conferences, symposia, and workshops related to Cuba or global 
issues involving Cuba and attendance at such events by faculty, staff, 
and students of a participating U.S. academic institution;
    (8) Establishment of academic exchanges and joint non-commercial 
academic research projects with universities or academic institutions in 
Cuba;
    (9) Provision of standardized testing services, including 
professional certificate examinations, university entrance examinations, 
and language examinations, and related preparatory services for such 
exams, to Cuban nationals, wherever located;
    (10) Provision of internet-based courses, including distance 
learning and Massive Open Online Courses, to Cuban nationals, wherever 
located, provided that the course content is at the undergraduate level 
or below; or
    (11) The organization of, and preparation for, activities described 
in paragraphs (a)(1) through (a)(10) of this section by employees or 
contractors of the sponsoring organization that is a person subject to 
U.S. jurisdiction;
    (12) Facilitation by an organization that is a person subject to 
U.S. jurisdiction, or a member of the staff of such an organization, of 
licensed educational activities in Cuba on behalf of U.S. academic 
institutions or secondary schools, provided that:
    (i) The organization is directly affiliated with one or more U.S. 
academic institutions or secondary schools; and
    (ii) The organization facilitates educational activities that meet 
the requirements of one or more of the general licenses set forth in 
Sec. 515.565(a)(1), (2), (3), and (6).

    Note 1 to paragraph (a): See Sec. 515.560(c)(6) for an authorization 
for individuals to open and maintain accounts at Cuban financial 
institutions; see Sec. 515.573 for an authorization for entities 
conducting educational activities authorized by Sec. 515.565(a) to 
establish a physical presence in Cuba, including an authorization to 
open and maintain accounts at Cuban financial institutions.
    Note 2 to paragraph (a): The authorization in this paragraph extends 
to adjunct faculty and part-time staff of U.S. academic institutions. A 
student enrolled in a U.S. academic institution is authorized pursuant 
to Sec. 515.565(a)(1) to participate in the academic activities in Cuba 
described above through any sponsoring U.S. academic institution.
    Note 3 to paragraph (a): The export or reexport to Cuba of goods 
(including software) or technology subject to the Export Administration 
Regulations (15 CFR parts 730 through 774) may require separate 
authorization from the Department of Commerce.
    Note 4 to paragraph (a): See Sec. 515.590(a) for an authorization 
for the provision of educational grants, scholarships, or awards to a 
Cuban national or in which Cuba or a Cuban national otherwise has an 
interest.

    (b) General license for people-to-people travel. The travel-related 
transactions

[[Page 105]]

set forth in Sec. 515.560(c) and such additional transactions as are 
directly incident to educational exchanges not involving academic study 
pursuant to a degree program are authorized, provided that:
    (1) Travel-related transactions pursuant to this authorization must 
be for the purpose of engaging, while in Cuba, in a full-time schedule 
of activities intended to enhance contact with the Cuban people, support 
civil society in Cuba, or promote the Cuban people's independence from 
Cuban authorities;
    (2) Each traveler has a full-time schedule of educational exchange 
activities that will result in meaningful interaction between the 
traveler and individuals in Cuba;
    (3) The predominant portion of the activities engaged in by 
individual travelers is not with a prohibited official of the Government 
of Cuba, as defined in Sec. 515.337 of this part, or a prohibited member 
of the Cuban Communist Party, as defined in Sec. 515.338 of this part;
    (4) For travel conducted under the auspices of an organization that 
is a person subject to U.S. jurisdiction that sponsors such exchanges to 
promote people-to-people contact, an employee, paid consultant, or agent 
of the sponsoring organization must accompany each group traveling to 
Cuba to ensure that each traveler has a full-time schedule of 
educational exchange activities; and

    Note to Sec. 515.565(b)(4): An organization that sponsors and 
organizes trips to Cuba in which travelers engage in individually 
selected and/or self-directed activities would not qualify for the 
general license. Authorized trips are expected to be led by the 
organization and to have a full-time schedule of activities in which the 
travelers will participate.

    (5) In addition to all other information required by Sec. 501.601 of 
this chapter, persons relying on the authorization in paragraph (b) of 
this section must retain records sufficient to demonstrate that each 
individual traveler has engaged in a full-time schedule of activities 
that satisfy the requirements of paragraphs (b)(1) through (3) of this 
section. In the case of an individual traveling under the auspices of an 
organization that is a person subject to U.S. jurisdiction and that 
sponsors such exchanges to promote people-to-people contact, the 
individual may rely on the entity sponsoring the travel to satisfy his 
or her recordkeeping requirements with respect to the requirements of 
paragraphs (b)(1) through (3) of this section. These records must be 
furnished to the Office of Foreign Assets Control on demand pursuant to 
Sec. 501.602 of this chapter.

    Example 1 to Sec. 515.565(b): An organization wishes to sponsor and 
organize educational exchanges not involving academic study pursuant to 
a degree program for individuals to learn side-by-side with Cuban 
individuals in areas such as environmental protection or the arts. The 
travelers will have a full-time schedule of educational exchange 
activities that will result in meaningful interaction between the 
travelers and individuals in Cuba. The organization's activities qualify 
for the general license, and the individual may rely on the entity 
sponsoring the travel to satisfy his or her recordkeeping requirement.
    Example 2 to Sec. 515.565(b): An individual plans to travel to Cuba 
to participate in discussions with Cuban artists on community projects, 
exchanges with the founders of a youth arts program, and to have 
extended dialogue with local city planners and architects to learn about 
historical restoration projects in Old Havana. The traveler will have a 
full-time schedule of such educational exchange activities that will 
result in meaningful interaction between the traveler and individuals in 
Cuba. The individual's activities qualify for the general license, 
provided that the individual satisfies the recordkeeping requirement.
    Example 3 to Sec. 515.565(b): An individual plans to travel to Cuba 
to participate in discussions with Cuban farmers and produce sellers 
about cooperative farming and agricultural practices and have extended 
dialogue with religious leaders about the influence of African 
traditions and religion on society and culture. The traveler fails to 
keep any records of the travel. Although the traveler will have a full-
time schedule of educational exchange activities that will result in 
meaningful interaction between the traveler and individuals in Cuba, the 
traveler's failure to keep records means that the individual's 
activities do not qualify for the general license.
    Example 4 to Sec. 515.565(b): An individual plans to travel to Cuba 
to rent a bicycle to explore the streets of Havana, engage in brief 
exchanges with shopkeepers while making purchases, and have casual 
conversations with waiters at restaurants and hotel staff. None of these 
activities are educational exchange activities that will result in 
meaningful

[[Page 106]]

interaction between the traveler and individuals in Cuba, and the 
traveler's trip does not qualify for the general license.
    Example 5 to Sec. 515.565(b): An individual plans to travel to Cuba 
to participate in discussions with Cuban farmers and produce sellers 
about cooperative farming and agricultural practices and have extended 
dialogue with religious leaders about the influence of African 
traditions and religion on society and culture. The individual also 
plans to spend a few days engaging in brief exchanges with Cuban food 
vendors while spending time at the beach. Only some of these activities 
are educational exchange activities that will result in meaningful 
interaction between the traveler and individuals in Cuba, and the 
traveler therefore does not have a full-time schedule of such activities 
on each day of the trip. The trip does not qualify for the general 
license.
    Note to Sec. 515.565(a) and (b): Except as provided in 
Sec. 515.565(b)(5), each person relying on the general authorizations in 
these paragraphs, including entities sponsoring travel pursuant to the 
authorization in Sec. 515.565(b), must retain specific records related 
to the authorized travel transactions. See Secs. 501.601 and 501.602 of 
this chapter for applicable recordkeeping and reporting requirements.

    (c) Transactions related to activities that are primarily tourist-
oriented are not authorized pursuant to this section.
    (d) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to 
educational activities that do not qualify for the general licenses 
under paragraph (a) or (b) of this section.

[80 FR 2296, Jan. 16, 2015, as amended at 80 FR 56922, Sept. 21, 2015; 
81 FR 13992, Mar. 16, 2016; 81 FR 71377, Oct. 17, 2016]



Sec. 515.566  Religious activities in Cuba.

    (a) General license. Persons subject to U.S. jurisdiction, including 
religious organizations located in the United States and members and 
staff of such organizations, are authorized to engage in the travel-
related transactions set forth in Sec. 515.560(c) and such additional 
transactions as are directly incident to engaging in religious 
activities in Cuba, provided that the travel-related transactions 
pursuant to this authorization must be for the purpose of engaging, 
while in Cuba, in a full-time schedule of religious activities.

    Note to Sec. 515.566(a): Each person relying on the general 
authorization in this paragraph must retain specific records related to 
the authorized travel transactions. See Secs. 501.601 and 501.602 of 
this chapter for applicable recordkeeping and reporting requirements.

    (b) Financial and material donations to Cuba or Cuban nationals are 
not authorized by this section.

    Note to Sec. 515.566(b): See Sec. 515.570 regarding authorized 
remittances to religious organizations in Cuba and for other purposes. 
See Sec. 515.533 regarding the exportation of items from the United 
States to Cuba.

    (c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to religious 
activities that do not qualify for the general license under paragraph 
(a) of this section.

    Note to Sec. 515.566: See Sec. 515.573 for an authorization 
permitting religious organizations engaging in activities authorized 
pursuant to this section to establish a physical presence in Cuba, 
including an authorization to open and maintain accounts at Cuban 
financial institutions.

[80 FR 2297, Jan. 16, 2015, as amended at 80 FR 56923, Sept. 21, 2015]



Sec. 515.567  Public performances, clinics, workshops, athletic and 
other competitions, and exhibitions.

    (a) General license for amateur and semi-professional international 
sports federation competitions. The travel-related transactions set 
forth in Sec. 515.560(c) and such other transactions as are directly 
incident to participation in athletic competitions in Cuba by amateur or 
semi-professional athletes or athletic teams, or organization of such 
competitions, are authorized, provided that:
    (1) The athletic competition in Cuba is held under the auspices of 
the international sports federation for the relevant sport;
    (2) The U.S. participants in the athletic competition are selected 
by the U.S. federation for the relevant sport; and
    (3) The competition is open for attendance, and in relevant 
situations, participation, by the Cuban public.
    (b) General license for public performances, clinics, workshops, 
other athletic

[[Page 107]]

or non-athletic competitions, and exhibitions. The travel-related 
transactions set forth in Sec. 515.560(c) and such other transactions as 
are directly incident to participation in or organization of a public 
performance, clinic, workshop, athletic competition not covered by 
paragraph (a) of this section, non-athletic competition, or exhibition 
in Cuba by participants in or organizers of such activities are 
authorized, provided that the event is open for attendance, and in 
relevant situations participation, by the Cuban public.

    Example 1 to Sec. 515.567(a) and (b): An amateur baseball team 
wishes to travel to Cuba to compete against a Cuban team in a baseball 
game in Cuba. The game will not be held under the auspices of the 
international sports federation for baseball. The baseball team's 
activities therefore would not qualify for the general license in 
paragraph (a). The game will, however, be open to the Cuban public. The 
baseball team's activities would qualify for the general license in 
paragraph (b).
    Example 2 to Sec. 515.567(a) and (b): A U.S. concert promoter wishes 
to organize a musical event in Cuba that would be open to the public and 
feature U.S. musical groups. The organizing of the musical event in Cuba 
by the U.S. concert promoter and the participation by U.S. musical 
groups in the event would qualify for the general license in paragraph 
(b).
    Note 1 to Sec. 515.567(a) and (b): Each person relying on the 
general authorizations in these paragraphs must retain specific records 
related to the authorized travel transactions. See Secs. 501.601 and 
501.602 of this chapter for applicable recordkeeping and reporting 
requirements.
    Note 2 to Sec. 515.567(a) and (b): Transactions incident to the 
organization of amateur and semi-professional international sports 
federation competitions and public performances, clinics, workshops, 
other athletic or non-athletic competitions, and exhibitions include 
marketing related to such events in Cuba.

    (c) An entire group does not qualify for the general license in 
paragraph (a) or (b) of this section merely because some members of the 
group qualify individually.
    (d) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to public 
performances, clinics, workshops, athletic and other competitions, and 
exhibitions that do not qualify for the general licenses under 
paragraphs (a) or (b) of this section.

[80 FR 2298, Jan. 16, 2015, as amended at 81 FR 4585, Jan. 27, 2016]



Sec. 515.568  [Reserved]



Sec. 515.569  Foreign passengers' baggage.

    The importation of merchandise subject to the prohibitions in 
Sec. 515.204, including Cuban-origin goods, brought into the United 
States as accompanied baggage by any person arriving in the United 
States other than a citizen or resident of the United States is hereby 
authorized, provided that such goods are not in commercial quantities 
and are not imported for resale.

[81 FR 71377, Oct. 17, 2016]



Sec. 515.570  Remittances.

    (a) Family remittances authorized. Persons subject to the 
jurisdiction of the United States who are 18 years of age or older are 
authorized to make remittances to nationals of Cuba who are close 
relatives, as defined in Sec. 515.339 of this part, of the remitter, 
provided that:
    (1) The remittances are not made from a blocked source. Certain 
remittances from blocked accounts are authorized pursuant to paragraph 
(f) of this section;
    (2) The recipient is not a prohibited official of the Government of 
Cuba, as defined in Sec. 515.337 of this part, or a prohibited member of 
the Cuban Communist Party, as defined in Sec. 515.338 of this part; and
    (3) The remittances are not made for emigration-related purposes. 
Remittances for emigration-related purposes are addressed by paragraph 
(e) of this section.
    (b) Donative remittances to Cuban nationals authorized. Persons 
subject to the jurisdiction of the United States are authorized to make 
donative remittances to Cuban nationals, provided that:
    (1) The remittances are not made from a blocked source;
    (2) The recipient is not a prohibited official of the Government of 
Cuba, as defined in Sec. 515.337, or a prohibited

[[Page 108]]

member of the Cuban Communist Party, as defined in Sec. 515.338;
    (3) The remittances are not made for emigration-related purposes. 
Remittances for emigration-related purposes are addressed by paragraph 
(e) of this section; and
    (4) The remitter, if an individual, is 18 years of age or older.
    (c) Remittances to religious organizations in Cuba authorized. 
Persons subject to the jurisdiction of the United States are authorized 
to make remittances to religious organizations in Cuba in support of 
religious activities, provided that the remittances are not made from a 
blocked source and that the remitter, if an individual, is 18 years of 
age or older.
    (d) Remittances to students in Cuba pursuant to an educational 
license authorized. Persons subject to the jurisdiction of the United 
States who are 18 years of age or older are authorized to make 
remittances to close relatives, as defined in Sec. 515.339 of this part, 
who are students in Cuba pursuant to the general license authorizing 
certain educational activities in Sec. 515.565(a) or a specific license 
issued pursuant to Sec. 515.565(d), provided that the remittances are 
not made from a blocked source and are for the purpose of funding 
transactions authorized by the general licenses in Sec. 515.565(a) or 
the specific license issued pursuant to Sec. 515.565(d) under which the 
student is traveling.
    (e) Two one-time $1,000 emigration-related remittances authorized. 
Persons subject to the jurisdiction of the United States are authorized 
to remit the following amounts:
    (1) Up to $1,000 per payee on a one-time basis to Cuban nationals 
for the purpose of covering the payees' preliminary expenses associated 
with emigrating from Cuba to the United States. These remittances may be 
sent before the payees have received valid visas issued by the State 
Department or other approved U.S. immigration documents, but may not be 
carried by a licensed traveler to Cuba until the payees have received 
valid visas issued by the State Department or other approved U.S. 
immigration documents. See Sec. 515.560(c)(4) of this part for the rules 
regarding the carrying of authorized remittances to Cuba. These 
remittances may not be made from a blocked source unless authorized 
pursuant to paragraph (f) of this section.
    (2) Up to an additional $1,000 per payee on a one-time basis to 
Cuban nationals for the purpose of enabling the payees to emigrate from 
Cuba to the United States, including for the purchase of airline tickets 
and payment of exit or third-country visa fees or other travel-related 
fees. These remittances may be sent only once the payees have received 
valid visas issued by the State Department or other approved U.S. 
immigration documents. A remitter must be able to provide the visa 
recipients' full names, dates of birth, visa numbers, and visa dates of 
issuance. See Sec. 515.560(c)(4) of this part for the rules regarding 
the carrying of authorized remittances to Cuba. These remittances may 
not be made from a blocked source unless authorized pursuant to 
paragraph (f) of this section.
    (f) Certain remittances from blocked sources authorized. Provided 
the recipient is not a prohibited official of the Government of Cuba, as 
defined in Sec. 515.337 of this part, or a prohibited member of the 
Cuban Communist Party, as defined in Sec. 515.338 of this part, certain 
remittances from blocked sources are authorized as follows:
    (1) Funds deposited in a blocked account in a banking institution, 
as defined in Sec. 515.314, in the United States held in the name of, or 
in which the beneficial interest is held by, a national of Cuba as a 
result of a valid testamentary disposition, intestate succession or 
payment from a life insurance policy or annuity contract triggered by 
the death of the policy or contract holder may be remitted to that 
national of Cuba, provided that the remittances are not made for 
emigration-related purposes. Remittances for emigration-related purposes 
are addressed by paragraph (e) of this section .
    (2) Up to $300 in any consecutive three-month period may be remitted 
from any blocked account in a banking institution in the United States 
to a Cuban national in a third country who is an individual in whose 
name, or for whose beneficial interest, the account is held.

[[Page 109]]

    (g) Remittances to certain individuals and independent non-
governmental organizations in Cuba. Remittances by persons subject to 
U.S. jurisdiction to individuals and independent non-governmental 
entities in Cuba, including pro-democracy groups and civil society 
groups, and to members of such groups or organizations, are authorized 
for the following purposes, provided that the remittances are not made 
from a blocked source:
    (1) To support humanitarian projects in or related to Cuba that are 
designed to directly benefit the Cuban people, as set forth in 
Sec. 515.575(b);
    (2) To support the Cuban people through activities of recognized 
human rights organizations, independent organizations designed to 
promote a rapid, peaceful transition to democracy, and activities of 
individuals and non-governmental organizations that promote independent 
activity intended to strengthen civil society in Cuba; and
    (3) To support the development of private businesses, including 
small farms.
    (h) Unblocking of certain previously blocked remittances authorized. 
Banking institutions, as defined in Sec. 515.314, are authorized to 
engage in all transactions necessary to unblock and return remittances 
if they would have qualified as authorized had they been sent under 
current paragraph (b) of this section, provided that persons subject to 
U.S. jurisdiction unblocking remittances originally blocked on or after 
August 25, 1997 pursuant to this section must submit a report to the 
Department of the Treasury, Office of Foreign Assets Control, Attn: 
Sanctions Compliance & Evaluation Division, 1500 Pennsylvania Avenue 
NW., Annex, Washington, DC 20220 within 10 business days from the date 
such remittances are released. Such reports shall include the following:
    (1) Where available, a copy of the original blocking report filed 
with OFAC pursuant to Sec. 501.603(b)(1) of this chapter.
    (2) The date the unblocked remittance was released;
    (3) The amount of funds unblocked;
    (4) The name of the party to whom the remittance was released; and
    (5) A reference to this section as the legal authority under which 
the remittance was unblocked and returned.
    (i) Remittances to third-country nationals for certain travel. 
Persons subject to the jurisdiction of the United States are authorized 
to make remittances to third-country nationals for travel by third-
country nationals to, from, or within Cuba, provided that such travel 
would be authorized by a general license issued pursuant to this part if 
the traveler were a person subject to U.S. jurisdiction.
    (j) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the following:
    (1) Remittances by persons subject to U.S. jurisdiction to a person 
in Cuba, directly or indirectly, for transactions to facilitate non-
immigrant travel by an individual in Cuba to the United States under 
circumstances where humanitarian need is demonstrated, including illness 
or other medical emergency.
    (2) Remittances from a blocked account to a Cuban national in excess 
of the amount specified in paragraph (f)(2) of this section.

    Note 1 to Sec. 515.570: This section does not authorize investment 
with respect to Cuba.
    Note 2 to Sec. 515.570: For the rules relating to the carrying of 
remittances to Cuba, see Sec. 515.560(c)(4). See Sec. 515.572 for an 
authorization related to the collection, forwarding, or receipt of 
certain remittances to or from Cuba.

[76 FR 5076, Jan. 28, 2011, as amended at 80 FR 2298, Jan. 16, 2015; 80 
FR 56923, Sept. 21, 2015; 81 FR 71377, Oct. 17, 2016]



Sec. 515.571  Certain transactions incident to travel to, from, 
and within the United States by Cuban nationals.

    (a) Except as provided in paragraph (c) of this section, the 
following transactions by or on behalf of a Cuban national who is 
present in the United States in a non-immigrant status or pursuant to 
other non-immigrant travel authorization issued by the U.S. government 
are authorized:
    (1) All transactions ordinarily incident to travel between the 
United States and Cuba, including the importation into the United States 
of accompanied baggage for personal use;
    (2) All transactions ordinarily incident to travel and maintenance 
within

[[Page 110]]

the United States, including the payment of living expenses and the 
acquisition of goods for personal consumption in the United States;
    (3) All transactions on behalf of aircraft or vessels incident to 
flights or voyages between the United States and Cuba, provided that the 
carrier services are authorized pursuant to Sec. 515.572. This paragraph 
does not authorize the carriage of any merchandise into the United 
States except accompanied baggage; and
    (4) Normal banking transactions involving foreign currency drafts, 
travelers' checks, or other instruments negotiated incident to travel in 
the United States by any person under the authority of this section.
    (5) All transactions ordinarily incident to the Cuban national's 
presence in the United States in a non-immigrant status or pursuant to 
other non-immigrant travel authorization issued by the U.S. government.
    (i) This paragraph (a)(5) authorizes the receipt of salary or other 
compensation by a national of Cuba consistent with the individual's non-
immigrant status or non-immigrant travel authorization, provided that 
national of Cuba is not subject to any special tax assessments by the 
Cuban government in connection with the receipt of the salary or other 
compensation.
    (ii) Examples of other transactions authorized by this paragraph 
(a)(5) include: the payment of tuition to a U.S. educational institution 
by a national of Cuba issued a student (F-1) visa, and the rental of a 
stage by a group of Cubans issued performance (P-2) visas.
    Note to paragraph (a)(5): This paragraph authorizes banking 
institutions, as defined in Sec. 515.314, to open and maintain accounts 
solely in the name of a Cuban national who is present in the United 
States in a non-immigrant status or pursuant to other non-immigrant 
travel authorization for use while the Cuban national is located in the 
United States in such status, and to close such accounts prior to 
departure. See paragraph (b) of this section for an authorization for 
banking institutions to maintain accounts opened pursuant to this 
paragraph while the Cuban national is located outside the United States.
    Note to Sec. 515.571(a): This paragraph authorizes the provision or 
receipt of emergency medical services and making or receipt of payment 
related thereto.

    (b) Maintenance of accounts opened pursuant to paragraph (a)(5) of 
this section while the Cuban-national account holder is located outside 
the United States is authorized, provided that the Cuban-national 
account holder may only access the account pursuant to paragraph (a)(5) 
of this section when the Cuban-national account holder is lawfully 
present in the United States in a non-immigrant status or pursuant to 
other non-immigrant travel authorization issued by the U.S. government.
    (c) Payments and transfers of credit in the United States from 
blocked accounts in domestic banking institutions held in the name of a 
Cuban national who is present in the United States in a non-immigrant 
status or pursuant to other non-immigrant travel authorization issued by 
the U.S. government to or upon the order of such Cuban national are 
authorized, provided that such payments and transfers of credit are made 
only for the living, traveling, and similar personal expenses in the 
United States of such Cuban national or his or her family, or other 
transactions ordinarily incident to the Cuban national's presence in the 
United States in a non-immigrant status or pursuant to other non-
immigrant travel authorization issued by the U.S. government.
    (d) This section does not authorize any transfer of property to 
Cuba, or, except as otherwise authorized in paragraph (b) of this 
section, any debit to a blocked account.

    Note to Sec. 515.571: For the authorization of certain transactions 
by Cuban nationals who become U.S. citizens; are lawful permanent 
resident aliens of the United States; have applied to become a lawful 
permanent resident alien of the United States and have an adjustment of 
status application pending; or are lawfully present and intending to 
lawfully remain in the United States on a permanent basis, see 
Sec. 515.505 of this part.
    (e) The following transactions by or on behalf of a Cuban national 
are authorized:
    (1) All transactions related to the sponsorship or hiring of a Cuban 
national to work in the United States in a non-immigrant status or 
pursuant to other non-immigrant travel authorization issued by the U.S. 
government, except that an employer may not make payments to the Cuban 
government in

[[Page 111]]

connection with the sponsorship or hiring of a Cuban national; and
    (2) All transactions in connection with the filing of an application 
for non-immigrant travel authorization issued by the U.S. government.

[64 FR 25819, May 13, 1999, as amended at 68 FR 14148, Mar. 24, 2003; 69 
FR 33773, June 16, 2004; 76 FR 5077, Jan. 28, 2011; 80 FR 2299, Jan. 16, 
2015; 80 FR 56923, Sept. 21, 2015; 81 FR 13993, Mar. 16, 2016]



Sec. 515.572  Provision of travel, carrier, other transportation-
related, and remittance forwarding services.

    (a) General licenses--(1) Authorization to provide travel services. 
Persons subject to U.S. jurisdiction are authorized to provide travel 
services in connection with travel-related transactions involving Cuba 
authorized pursuant to this part.
    (2) Authorization to provide carrier services. (i) Persons subject 
to U.S. jurisdiction are authorized to provide carrier services to, 
from, or within Cuba in connection with travel or transportation, 
directly or indirectly, between the United States and Cuba of persons, 
baggage, or cargo authorized pursuant to this part.
    (ii) The entry into blocked space, code-sharing, or leasing 
arrangements to facilitate the provision of carrier services by air 
authorized pursuant to section 515.572(a)(2) is authorized, including 
the entry into such arrangements with a national of Cuba.
    (3) Authorization to provide remittance forwarding services. Banking 
institutions, as defined in Sec. 515.314, including U.S.-registered 
brokers or dealers in securities and U.S.-registered money transmitters, 
are authorized to provide services in connection with the collection, 
forwarding, or receipt of remittances authorized pursuant to this part.
    (4) Authorization to provide lodging services. Persons subject to 
U.S. jurisdiction who are providing carrier services by vessel 
authorized pursuant to paragraph (a)(2) of this section are authorized 
to provide lodging services onboard such vessels to persons authorized 
to travel to or from Cuba pursuant to this part during the period of 
time the vessel is traveling to, from, or within Cuba, including when 
docked at a port in Cuba.
    (5) Authorization to provide civil aviation safety-related services. 
Persons subject to U.S. jurisdiction are authorized to provide civil 
aviation safety-related services to Cuba and Cuban nationals, wherever 
located, to ensure the safety of civil aviation and the safe operation 
of commercial aircraft.

    Note to paragraph (a)(5): For provisions related to transactions 
ordinarily incident to the exportation or reexportation of items to 
Cuba, see Secs. 515.533 and 515.559.

    Note to Sec. 515.572(a): Section 515.564 authorizes employees, 
officials, consultants, or agents of persons subject to U.S. 
jurisdiction providing travel or carrier services or remittance 
forwarding services authorized pursuant to this part to engage in the 
travel-related transactions set forth in Sec. 515.560(c) and such 
additional transactions as are directly incident to travel to Cuba for 
professional meetings in Cuba, such as those related to safety and 
security of flights to and from Cuba, or necessary to arrange for travel 
or carrier services or remittance forwarding to Cuba.

    (b) Required reports and recordkeeping. (1) Persons subject to U.S. 
jurisdiction providing services authorized pursuant to paragraphs (a)(1) 
through (a)(4) of this section must retain for at least five years from 
the date of the transaction a certification from each customer 
indicating the section of this part that authorizes the person to travel 
or send remittances to Cuba. In the case of a customer traveling under a 
specific license, the specific license number or a copy of the license 
must be maintained on file with the person subject to U.S. jurisdiction 
providing services authorized pursuant to this section.
    (2) The names and addresses of individual travelers or remitters, 
the number and amount of each remittance, and the name and address of 
each recipient, as applicable, must be retained on file with all other 
information required by Sec. 501.601 of this chapter. These records must 
be furnished to the Office of Foreign Assets Control on demand pursuant 
to Sec. 501.602 of this chapter.
    (c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the provision of travel,

[[Page 112]]

carrier, or remittance-forwarding services other than those authorized 
by paragraph (a) of this section.

    Note to Sec. 515.572: The following persons may be transported, 
directly or indirectly, between the United States and Cuba by a person 
authorized to provide carrier services:
    (1) Persons subject to U.S. jurisdiction who are traveling to or 
from Cuba pursuant to a general license under one of the 12 categories 
of travel listed in Sec. 515.560 or under a specific license from the 
Office of Foreign Assets Control may be transported between the United 
States and Cuba;
    (2) Cuban nationals applying for admission to the United States, as 
well as third-country nationals, with a valid visa or other travel 
authorization issued by the U.S. government may be transported to the 
United States from Cuba;
    (3) Cuban nationals present in the United States in a non-immigrant 
status or pursuant to other non-immigrant travel authorization issued by 
the U.S. government may be transported from the United States to Cuba;
    (4) Cuban nationals who have taken up residence in the United States 
and are licensed as unblocked nationals pursuant to Sec. 515.505(a)(1) 
are persons subject to U.S. jurisdiction and may be transported between 
the United States and Cuba if they meet the criteria set out in (1) 
above; and
    (5) An individual, including a foreign national, who is traveling on 
official business of the U.S. government, a foreign government, or an 
intergovernmental organization of which the United States is a member or 
in which the United States holds observer status--including an employee, 
contractor, or grantee of such government or intergovernmental 
organization and any individual traveling on a diplomatic passport, as 
well as any close relative, as defined in Sec. 515.339, accompanying the 
traveler--may be transported between the United States and Cuba.

[80 FR 2299, Jan. 16, 2015, as amended at 80 FR 56923, Sept. 21, 2015; 
81 FR 4586, Jan. 27, 2016; 81 FR 71377, Oct. 17, 2016]



Sec. 515.573  Physical presence and business presence in Cuba 
authorized; Cuban news bureaus.

    (a) Physical presence: The persons listed in paragraphs (c) and (d) 
of this section are authorized to engage in all transactions necessary 
to establish and maintain a physical presence in Cuba to engage in 
transactions authorized pursuant to or exempt from the prohibitions of 
this part, including the following:
    (1) Leasing physical premises, including office, warehouse, 
classroom, or retail outlet space, and securing related goods and 
services, including for use in and to pay fees related to the operation 
of the physical premises;
    (2) Marketing related to the physical presence;
    (3) Employment of Cuban nationals in Cuba; and
    (4) Employment of individuals who are persons subject to U.S. 
jurisdiction.

    Note to paragraph (a)(4): Individuals who are employed pursuant to 
Sec. 515.573(a)(4) are authorized to engage in all transactions 
necessary to establish domicile in Cuba, including accessing U.S. 
assets, for the duration of their employment.

    (5)(i) Opening and maintaining bank accounts at Cuban financial 
institutions to engage in authorized transactions. The opening and 
maintenance of accounts, including the deposit of funds in such accounts 
by wire transfer, at a financial institution in Cuba, provided that such 
accounts are used only for transactions authorized pursuant to, or 
exempt from, this part.
    (ii) Closing bank accounts. The closing of an account opened 
pursuant to the authorization in paragraph (a)(5)(i) of this section, 
provided that any transfer of funds may only be effected by wire 
transfer to an account maintained at a depository institution, as 
defined in Sec. 515.333, that is a person subject to U.S. jurisdiction.

    Note to paragraph (a): Physical presence includes through a local 
representative, including an employee or contractor.

    (b) Business presence. Except for transactions prohibited by 
Sec. 515.208, the persons listed in paragraph (c) of this section are 
authorized to engage in all transactions necessary to establish and 
maintain a business presence in Cuba to engage in transactions 
authorized pursuant to or exempt from the prohibitions of this part, 
including the following: establishing and maintaining subsidiaries, 
branches, offices, joint ventures, franchises, and agency or other 
business relationships with any Cuban national, and entering into all 
necessary agreements or arrangements with such entity or individual.
    (c) Persons authorized to establish physical and business presence. 
The following persons subject to U.S. jurisdiction may engage in the 
transactions

[[Page 113]]

authorized pursuant to paragraphs (a) and (b) of this section, provided 
that such transactions may only be engaged in to support transactions 
authorized by or exempt from the prohibitions of this part:
    (1) Providers of telecommunications services authorized by 
Sec. 515.542(b) through (d) or persons engaged in activities authorized 
by Sec. 515.542(e);
    (2) Providers of internet-based services authorized by 
Sec. 515.578(a) or persons engaged in activities authorized by 
Sec. 515.578(c) or (e);
    (3) Exporters of goods authorized for export or reexport to Cuba by 
Sec. 515.533 or Sec. 515.559 or that are otherwise exempt;
    Note to paragraph (c)(3): This section authorizes the assembly in 
Cuba of items exported or reexported pursuant to authorization by the 
Department of Commerce or OFAC or that are otherwise exempt but does not 
authorize the incorporation of Cuban-origin goods into items assembled 
pursuant to this section or the processing of raw materials into 
finished goods in Cuba.
    (4) Entities providing mail or parcel transmission services 
authorized by Sec. 515.542(a) or providing cargo transportation services 
in connection with trade involving Cuba authorized by or exempt from the 
prohibitions of this part; and
    (5) Providers of travel and carrier services authorized by 
Sec. 515.572.
    Note to paragraph (c)(5): This authorization does not allow persons 
subject to U.S. jurisdiction to establish a physical or business 
presence in Cuba for the purpose of providing lodging services in Cuba.
    (d) Persons authorized to establish physical presence. The following 
persons subject to U.S. jurisdiction may engage in the transactions 
authorized pursuant to paragraph (a) of this section, provided that such 
transactions may only be engaged in to support transactions authorized 
by or exempt from the prohibitions of this part:
    (1) News bureaus whose primary purpose is the gathering and 
dissemination of news to the general public authorized by paragraph (e) 
of this section;
    (2) Entities organizing or conducting educational activities 
authorized by Sec. 515.565(a);
    (3) Religious organizations engaging in religious activities in Cuba 
authorized by Sec. 515.566;
    (4) Entities engaging in non-commercial activities authorized by 
Sec. 515.574 (Support for the Cuban People);
    (5) Entities engaging in humanitarian projects set forth in 
Sec. 515.575(b) (Humanitarian projects); and
    (6) Private foundations or research or educational institutes 
engaging in transactions authorized by Sec. 515.576.
    (e) News bureaus. (1) All transactions in Cuba related to the 
gathering and dissemination of news to the general public are 
authorized.
    (2) Specific licenses may be issued authorizing transactions 
necessary for the establishment and operation of news bureaus in the 
United States by Cuban organizations whose primary purpose is the 
gathering and dissemination of news to the general public.


    Note to Sec. 515.573: The export or reexport to Cuba of items 
subject to the Export Administration Regulations (15 CFR parts 730 
through 774) may require separate authorization from the Department of 
Commerce.

[80 FR 56924, Sept. 21, 2015, as amended at 81 FR 13993, Mar. 16, 2016]



Sec. 515.574  Support for the Cuban People.

    (a) General license. The travel-related transactions set forth in 
Sec. 515.560(c) and other transactions that are intended to provide 
support for the Cuban people are authorized, provided that:
    (1) The activities are of:
    (i) Recognized human rights organizations;
    (ii) Independent organizations designed to promote a rapid, peaceful 
transition to democracy; or
    (iii) Individuals and non-governmental organizations that promote 
independent activity intended to strengthen civil society in Cuba; and
    (2) The traveler's schedule of activities does not include free time 
or recreation in excess of that consistent with a full-time schedule.

    Note to Sec. 515.574(a): Each person relying on the general 
authorization in this paragraph must retain specific records related to 
the authorized travel transactions. See Secs. 501.601 and 501.602 of 
this chapter for applicable recordkeeping and reporting requirements.

    (b) An entire group does not qualify for the general license in 
paragraph (a) of this section merely because some

[[Page 114]]

members of the group qualify individually.
    (c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to support 
for the Cuban people that do not qualify for the general license under 
paragraph (a) of this section.

[80 FR 2299, Jan. 16, 2015]



Sec. 515.575  Humanitarian projects.

    (a) General license. Transactions, including the travel-related 
transactions set forth in Sec. 515.560(c), that are related to the 
humanitarian projects in or related to Cuba that are designed to 
directly benefit the Cuban people as set forth in paragraph (b) are 
authorized, provided that the traveler's schedule of activities does not 
include free time or recreation in excess of that consistent with a 
full-time schedule.

    Note 1 to paragraph (a): Each person relying on the general 
authorization in this paragraph must retain specific records related to 
the authorized travel transactions. See Secs. 501.601 and 501.602 of 
this chapter for applicable recordkeeping and reporting requirements.
    Note 2 to paragraph (a): See Sec. 515.590(b) for an authorization 
for the provision of grants, scholarships, or awards related to 
humanitarian projects in or related to Cuba that are designed to 
directly benefit the Cuban people as set forth in paragraph (b).

    (b) Authorized humanitarian projects. The following projects are 
authorized by paragraph (a) of this section: Medical and health-related 
projects; construction projects intended to benefit legitimately 
independent civil society groups; disaster preparedness, relief, and 
response; historical preservation; environmental projects; projects 
involving formal or non-formal educational training, within Cuba or off-
island, on the following topics: Entrepreneurship and business, civil 
education, journalism, advocacy and organizing, adult literacy, or 
vocational skills; community-based grassroots projects; projects 
suitable to the development of small-scale private enterprise; projects 
that are related to agricultural and rural development that promote 
independent activity; microfinancing projects, except for loans, 
extensions of credit, or other financing prohibited by Sec. 515.208; and 
projects to meet basic human needs.

    Example to Sec. 515.575(b): A U.S. group of medical professionals 
that specializes in disease treatment wishes to support a community in 
Cuba by providing the latest techniques and literature in disease 
education and prevention directly to the Cuban people. Provided that the 
medical professionals in the group maintain a full-time schedule related 
to disease education and prevention, these activities qualify for the 
general license.

    (c) An entire group does not qualify for the general license in 
paragraph (a) of this section merely because some members of the group 
qualify individually.
    (d) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to 
humanitarian projects that do not qualify for the general license under 
paragraph (a) of this section.

[80 FR 2300, Jan. 16, 2015, as amended at 80 FR 56924, Sept. 21, 2015; 
81 FR 4586, Jan. 27, 2016; 81 FR 13994, Mar. 16, 2016; 81 FR 71377, Oct. 
17, 2016]



Sec. 515.576  Activities of private foundations or research 
or educational institutes.

    (a) General license. The travel-related transactions set forth in 
Sec. 515.560(c) and such additional transactions as are directly 
incident to activities by private foundations or research or educational 
institutes with an established interest in international relations to 
collect information related to Cuba for noncommercial purposes are 
authorized, provided that the traveler's schedule of activities does not 
include free time or recreation in excess of that consistent with a 
full-time schedule.

    Example to Sec. 515.576(a): A private research foundation that 
produces essays on international relations issues wishes to send a team 
made up of its employees and consultants to Cuba to collect information 
for a current study of the relationship that countries in the Western 
Hemisphere have with European countries. Provided that all of the 
employees and consultants on the team maintain a full-time schedule of 
activities relating to the collection of information for the study, 
these activities qualify for the general license.

[[Page 115]]

    Note to Sec. 515.576(a): Each person relying on the general 
authorization in this paragraph must retain specific records related to 
the authorized travel transactions. See Secs. 501.601 and 501.602 of 
this chapter for applicable recordkeeping and reporting requirements.

    (b) An entire group does not qualify for the general license in 
paragraph (a) of this section merely because some members of the group 
qualify individually.
    (c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and such other transactions as are related to activities 
of private foundations or research or educational institutes that do not 
qualify for the general license under paragraph (a) of this section.

[80 FR 2300, Jan. 16, 2015]



Sec. 515.577  Authorized transactions necessary and ordinarily
incident to publishing.

    (a) To the extent that such activities are not exempt from this 
part, and subject to the restrictions set forth in paragraphs (b) 
through (d) of this section, persons subject to the jurisdiction of the 
United States are authorized to engage in all transactions necessary and 
ordinarily incident to the publishing and marketing of manuscripts, 
books, journals, and newspapers in paper or electronic format 
(collectively, ``written publications''). This section does not apply if 
the parties to the transactions described in this paragraph include the 
Government of Cuba. For the purposes of this section, the term 
``Government of Cuba'' includes the state and the Government of Cuba, as 
well as any political subdivision, agency, or instrumentality thereof, 
including the Central Bank of Cuba; prohibited officials of the 
Government of Cuba, as defined in Sec. 515.337 of this part; prohibited 
members of the Cuban Communist Party, as defined in Sec. 515.338 of this 
part; employees of the Ministry of Justice; and any person acting or 
purporting to act directly or indirectly on behalf of any of the 
foregoing with respect to the transactions described in this paragraph. 
For the purposes of this section, the term ``Government of Cuba'' does 
not include any academic and research institutions and their personnel. 
Pursuant to this section, the following activities are authorized, 
provided that persons subject to the jurisdiction of the United States 
ensure that they are not engaging, without separate authorization, in 
the activities identified in paragraphs (b) through (d) of this section:
    (1) Commissioning and making advance payments for identifiable 
written publications not yet in existence, to the extent consistent with 
industry practice;
    (2) Collaborating on the creation and enhancement of written 
publications;
    (3)(i) Augmenting written publications through the addition of items 
such as photographs, artwork, translation, explanatory text, and, for a 
written publication in electronic format, the addition of embedded 
software necessary for reading, browsing, navigating, or searching the 
written publication;
    (ii) Exporting embedded software necessary for reading, browsing, 
navigating, or searching a written publication in electronic format, 
provided that, to the extent a license is required under the Export 
Administration Regulations, 15 CFR parts 730 through 774 (the ``EAR''), 
the exportation is licensed or otherwise authorized by the Department of 
Commerce under the provisions of the EAR;
    (4) Substantive editing of written publications;
    (5) Payment of royalties for written publications;
    (6) Creating or undertaking a marketing campaign to promote a 
written publication; and
    (7) Other transactions necessary and ordinarily incident to the 
publishing and marketing of written publications as described in this 
paragraph (a).
    (b) This section does not authorize transactions involving the 
provision of goods or services not necessary and ordinarily incident to 
the publishing and marketing of written publications as described in 
paragraph (a) of this section. For example, this section does not 
authorize persons subject to the jurisdiction of the United States:
    (1) To provide or receive individualized or customized services 
(including, but not limited to, accounting, legal, design, or consulting 
services), other

[[Page 116]]

than those necessary and ordinarily incident to the publishing and 
marketing of written publications, even though such individualized or 
customized services are delivered through the use of information and 
informational materials;
    (2) To create or undertake for any person a marketing campaign with 
respect to any service or product other than a written publication, or 
to create or undertake a marketing campaign of any kind for the benefit 
of the Government of Cuba;
    (3) To engage in the exportation or importation of goods to or from 
Cuba other than the exportation of embedded software described in 
paragraph (a)(3)(ii) of this section;
    (4) To operate a publishing house, sales outlet, or other office in 
Cuba; or
    (5) To engage in transactions related to travel to, from, or within 
Cuba.

    Note to paragraph (b): The importation from Cuba and the exportation 
to Cuba of information or informational materials, as defined in 
Sec. 515.332, whether commercial or otherwise, regardless of format or 
medium of transmission, are exempt from the prohibitions and regulations 
of this part. See Sec. 515.206(a).

    (c) This section does not authorize persons subject to the 
jurisdiction of the United States to engage the services of publishing 
houses or translators in Cuba unless such activity is primarily for the 
dissemination of written publications in Cuba.
    (d) This section does not authorize:
    (1) Transactions for the development, production, or design of 
software;
    (2) Transactions for the development, production, design, or 
marketing of technology specifically controlled by the International 
Traffic in Arms Regulations, 22 CFR parts 120 through 130 (the 
``ITAR''), the EAR, or the Department of Energy Regulations set forth at 
10 CFR part 810.
    (3) The exportation of information or technology subject to the 
authorization requirements of 10 CFR part 810, or Restricted Data as 
defined in section 11 y. of the Atomic Energy Act of 1954, as amended, 
or of other information, data, or technology the release of which is 
controlled under the Atomic Energy Act and regulations therein;
    (4) The exportation of any item (including information) subject to 
the EAR where a U.S. person knows or has reason to know that the item 
will be used, directly or indirectly, with respect to certain nuclear, 
missile, chemical, or biological weapons or nuclear-maritime end-uses as 
set forth in part 744 of the EAR. In addition, U.S. persons are 
precluded from exporting any item subject to the EAR to certain 
restricted end-users, as set forth in part 744 of the EAR, as well as 
certain persons whose export privileges have been denied pursuant to 
parts 764 or 766 of the EAR, without authorization from the Department 
of Commerce; or
    (5) The exportation of information subject to licensing requirements 
under the ITAR, or exchanges of information that are subject to 
regulation by other government agencies.
    (e) Section 515.564(a)(2) authorizes the travel-related transactions 
set forth in Sec. 515.560(c) and such additional transactions that are 
directly incident to attendance at or organization of professional 
meetings that are necessary and ordinarily incident to the publishing 
and marketing of written publications.

[72 FR 50048, Aug. 30, 2007, as amended at 76 FR 5077, Jan. 28, 2011; 81 
FR 13994, Mar. 16, 2016]



Sec. 515.578  Exportation, reexportation, and importation of certain
internet-based services; importation of software.

    (a) Except as provided in paragraph (b) of this section, the 
following transactions are authorized:
    (1) Certain internet-based services. The exportation or 
reexportation, directly or indirectly, from the United States or by a 
person subject to U.S. jurisdiction to Cuba of services incident to the 
exchange of communications over the internet, such as instant messaging, 
chat and email, social networking, sharing of photos and movies, web 
browsing, blogging, web hosting provided that it is not for the 
promotion of tourism, and domain name registration services.
    (2) Services related to certain exportations and reexportations. To 
the extent not authorized by paragraph (a)(1) of

[[Page 117]]

this section or by Sec. 515.533, the exportation or reexportation of 
services, including software design, business consulting, and 
information technology management services (including cloud storage), 
that are related to the following items, or of services to install, 
repair, or replace such items, and training related to installation, 
repair, or replacement of such items:
    (i) Items subject to the Export Administration Regulations (15 CFR 
part 730 through 774) (EAR). Items exported or reexported to Cuba 
pursuant to 15 CFR 740.19 (License Exception Consumer Communication 
Devices (License Exception CCD)), pursuant to 15 CFR 740.21(d)(4) 
(paragraph (d)(4) of License Exception Support for the Cuban People 
(License Exception SCP)), or pursuant to an individual license issued by 
the Department of Commerce for the export of other consumer 
communication devices that fall outside License Exception CCD or 
commodities or software used to develop software that fall outside 
paragraph (d)(4) of License Exception SCP;
    (ii) Items not subject to the EAR because they are of foreign origin 
and are located outside the United States. Items that are of a type 
described in License Exception CCD provided that the items would be 
designated EAR99 if they were located in the United States or would meet 
the criteria for classification under the relevant ECCN specified in 
License Exception CCD if they were subject to the EAR or items of a type 
described in paragraph (d)(4) of License Exception SCP, provided that 
the items would be designated EAR99 or controlled on the Commerce 
Control List for anti-terrorism reasons only if they were located in the 
United States; and
    (iii) Software not subject to the EAR because it is described in 15 
CFR 734.3(b)(3). Software not subject to the EAR because it is described 
in 15 CFR 734.3(b)(3) that is exported, reexported, or provided, 
directly or indirectly, by a person subject to U.S. jurisdiction to Cuba 
and that is of a type described in License Exception CCD or paragraph 
(d)(4) of License Exception SCP.
    (3) Importation into the United States of certain items previously 
exported to Cuba. The importation into the United States of items 
described in paragraph (2)(i)-(iii) of this section by an individual 
entering the United States, directly or indirectly, from Cuba.
    (4) Exportation, reexportation, or provision of certain internet-
based services to certain end-users. (i) The exportation or 
reexportation, directly or indirectly, from the United States or by 
persons subject to U.S. jurisdiction, to a prohibited official of the 
Government of Cuba, as defined in Sec. 515.337, or a prohibited member 
of the Cuban Communist Party, as defined in Sec. 515.338, of services 
described in paragraphs (a)(1) or (2) of this section provided that such 
services are widely available to the public at no cost to the user.
    (ii) The exportation or reexportation, directly or indirectly, from 
the United States or by persons subject to U.S. jurisdiction, to 
organizations administered or controlled by the Government of Cuba or 
the Cuban Communist Party of the following services:
    (A) Services described in paragraph (a)(1) of this section, and
    (B) Services described in paragraph (a)(2) of this section provided 
that such services are widely available to the public at no cost to the 
user.

    Note 1 to Sec. 515.578(a): The export or reexport to Cuba of items 
subject to the Export Administration Regulations (15 CFR parts 730 
through 774) may require separate authorization from the Department of 
Commerce.
    Note 2 to Sec. 515.578(a): For an authorization of transactions 
related to the provision of telecommunications services, see 
Sec. 515.542.

    (b) This section does not authorize:
    (1) The direct or indirect exportation or reexportation of services 
with knowledge or reason to know that such services are intended for a 
prohibited official of the Government of Cuba, as defined in 
Sec. 515.337, or a prohibited member of the Cuban Communist Party, as 
defined in Sec. 515.338, or to organizations administered or controlled 
by the Government of Cuba or the Cuban Communist Party, except as 
specified in paragraph (a)(4) of this section.
    (2) The direct or indirect exportation of any items to Cuba.

    Note to Sec. 515.578(b)(2): For provisions related to transactions 
ordinarily incident to the exportation or reexportation of items,

[[Page 118]]

including software, to Cuba, see Secs. 515.533 and 515.559.

    (c) Licensing and marketing. Persons subject to U.S. jurisdiction 
are authorized to enter into licensing agreements related to services 
authorized by paragraph (a) of this section, and to market such 
services.
    (d) Software. The importation into the United States of Cuban-origin 
software is authorized.
    (e) Mobile applications. (1) The importation into the United States 
of Cuban-origin mobile applications is authorized.

    Note to paragraph (e)(1): This paragraph does not authorize U.S.-
owned or -controlled firms in third countries to import goods of Cuban 
origin into the authorized trade zone. See Sec. 515.559.

    (2) The employment of Cuban nationals to develop mobile applications 
is authorized.
    (f) Specific licenses. Specific licenses may be issued on a case-by-
case basis for the exportation of other internet-based services.

    Note to Sec. 515.578: For general licenses authorizing physical and 
business presence in Cuba for certain persons, see Sec. 515.573. An 
authorization related to business presence was previously included in 
this section. For an authorization of certain telecommunications-related 
services, see Sec. 515.542.

[80 FR 2300, Jan. 16, 2015, as amended at 80 FR 56925, Sept. 21, 2015; 
81 FR 13994, Mar. 16, 2016; 81 FR 71377, Oct. 17, 2016]



Sec. 515.579  Funds transfers for third-country official missions
and certain intergovernmental organizations.

    (a) Depository institutions, as defined in Sec. 515.333, are 
authorized to process funds transfers for the operating expenses or 
other official business in Cuba of third-country official missions or 
any intergovernmental organization in which the United States is a 
member or holds observer status.
    (b) Depository institutions, as defined in Sec. 515.333, are 
authorized to process funds transfers and maintain accounts for the 
personal expenditures of the employees, grantees, and contractors, or 
persons who share a common dwelling as a family member of such 
employees, grantees, and contractors, of third-country official missions 
or any intergovernmental organization in which the United States is a 
member or holds observer status in Cuba.

[80 FR 2301, Jan. 16, 2015]



Sec. 515.580  Global insurance policies covering individuals
traveling to Cuba.

    Persons subject to U.S. jurisdiction are authorized to issue or 
provide coverage for global health, life, or travel insurance policies 
for individuals ordinarily resident in a country outside of Cuba who 
travel to or within Cuba. Persons subject to U.S. jurisdiction are 
authorized to service those policies and pay claims arising from events 
that occurred while the individual was traveling in, or to or from, 
Cuba.

    Note to Sec. 515.580: Certain insurance-related services for persons 
subject to U.S. jurisdiction traveling to, from, or within Cuba are 
authorized pursuant to Sec. 515.560. See Note 2 to Sec. 515.560.

[80 FR 2301, Jan. 16, 2015]



Sec. 515.581  Transactions related to conferences in third countries.

    Persons subject to U.S. jurisdiction are authorized to sponsor, 
organize, or provide services in connection with, as well as participate 
in, conferences or other similar events in a third country that are 
attended by Cuban nationals.
    Note to Sec. 515.581: The export or reexport to Cuba of technology 
subject to the Export Administration Regulations (15 CFR parts 730 
through 774) may require separate authorization from the Department of 
Commerce.

[81 FR 71378, Oct. 17, 2016]



Sec. 515.582  Importation of certain goods and services produced 
by independent Cuban entrepreneurs.

    Persons subject to U.S. jurisdiction are authorized to engage in all 
transactions, including payments, necessary to import certain goods and 
services produced by independent Cuban entrepreneurs as determined by 
the State Department as set forth on the State Department's Section 
515.582 List, located at http://www.state.gov/e/eb/tfs/spi/.

    Note 1 to Sec. 515.582: Imports authorized by this section are not 
subject to the limitations set forth in Sec. 515.560(c).

[80 FR 2301, Jan. 16, 2015, as amended at 80 FR 56925, Sept. 21, 2015]

[[Page 119]]



Sec. 515.583  Provision of certain goods and services to Cuban 
nationals sequestered aboard vessels in U.S. ports.

    The provision of goods and services ordinarily incident and 
necessary to the personal maintenance of Cuban nationals who are 
prohibited from disembarking from vessels in U.S. ports is authorized.

[80 FR 2301, Jan. 16, 2015]



Sec. 515.584  Certain financial transactions involving Cuba.

    (a) Correspondent accounts. Depository institutions, as defined in 
Sec. 515.333, are authorized to engage in all transactions necessary to 
establish and maintain correspondent accounts at a financial institution 
that is a national of Cuba, provided that such accounts are used only 
for transactions authorized pursuant to, or exempt from, this part.

    Note to Sec. 515.584(a): This section does not authorize the 
establishment and maintenance of accounts in the United States or with a 
person subject to U.S. jurisdiction by, on behalf of, or for the benefit 
of, Cuba or a Cuban national.

    (b) Testing arrangements. Depository institutions are authorized to 
set up testing arrangements and exchange authenticator keys with any 
financial institution that is a national of Cuba for transactions 
authorized pursuant to, or exempt from, this part.
    (c) Credit and debit cards. All transactions incident to the 
processing and payment of credit and debit cards involving travel-
related and other transactions consistent with Sec. 515.560 are 
authorized.
    (d) Funds transfers. Any banking institution, as defined in 
Sec. 515.314, that is a person subject to U.S. jurisdiction is 
authorized to process funds transfers originating and terminating 
outside the United States, provided that neither the originator nor the 
beneficiary is a person subject to U.S. jurisdiction.
    (e) Unblocking of certain previously blocked funds transfers 
authorized. Any banking institution, as defined in Sec. 515.314, that is 
a person subject to U.S. jurisdiction is authorized to unblock and 
return to the originator or originating financial institution or their 
successor-in-interest previously blocked funds transfers that could have 
been processed pursuant to paragraph (d) of this section, 
Sec. 515.562(b), or Sec. 515.579(b) if the processing of those transfers 
would have been authorized had they been sent under the current text of 
those provisions. Persons subject to U.S. jurisdiction unblocking funds 
transfers that were originally blocked on or after August 25, 1997, 
pursuant to this section must submit a report to the Department of the 
Treasury, Office of Foreign Assets Control, Attn: Sanctions Compliance & 
Evaluation Division, 1500 Pennsylvania Avenue NW., Freedman's Bank 
Building, Washington, DC 20220 within 10 business days from the date 
such funds transfers are released. Such reports shall include the 
following:
    (1) Where available, a copy of the original blocking report filed 
with OFAC pursuant to Sec. 501.603(b)(1) of this chapter.
    (2) The date the unblocked funds transfer was released;
    (3) The amount of funds unblocked;
    (4) The name of the party to whom the funds were released; and
    (5) A reference to this section as the legal authority under which 
the funds transfer was unblocked and returned.
    (f) Any banking institution, as defined in Sec. 515.314, that is a 
person subject to U.S. jurisdiction is authorized to provide financing 
for exports or reexports of items, other than agricultural commodities, 
authorized pursuant to Sec. 515.533, including issuing, advising, 
negotiating, paying, or confirming letters of credit (including letters 
of credit issued by a financial institution that is a national of Cuba), 
accepting collateral for issuing or confirming letters of credit, and 
processing documentary collections.
    (g) Any banking institution, as defined in Sec. 515.314, that is a 
person subject to U.S. jurisdiction is authorized to accept, process, 
and give value to U.S. dollar monetary instruments presented for 
processing and payment by a banking institution located in a third 
country that is not a person subject to U.S. jurisdiction or a Cuban 
national and that has received the U.S. dollar monetary instruments from 
a financial institution that is a national of Cuba

[[Page 120]]

for which it maintains a correspondent account and which received the 
U.S. dollar monetary instruments in connection with an underlying 
transaction that is authorized, exempt, or otherwise not prohibited by 
this part, such as dollars spent in Cuba by authorized travelers or a 
third-country transaction that is not prohibited by this part.

    Note to paragraph (g): Correspondent accounts used for transactions 
authorized pursuant to Sec. 515.584(g) may be denominated in U.S. 
dollars.

    (h) Any banking institution, as defined in Sec. 515.314, that is a 
person subject to U.S. jurisdiction is authorized to open and maintain 
accounts solely in the name of a Cuban national located in Cuba for the 
purposes only of receiving payments in the United States in connection 
with transactions authorized pursuant to, or exempt from the 
prohibitions of, this part and remitting such payments to Cuba.

[80 FR 2301, Jan. 16, 2015, as amended at 80 FR 56925, Sept. 21, 2015; 
81 FR 4586, Jan. 27, 2016; 81 FR 13994, Mar. 16, 2016; 81 FR 71378, Oct. 
17, 2016]



Sec. 515.585  Certain transactions in third countries.

    (a) Persons subject to U.S. jurisdiction are authorized to provide 
goods and services to a Cuban national located in a third country who is 
an individual, provided that the transaction does not involve a 
commercial exportation, directly or indirectly, of goods or services to 
or from Cuba.
    (b)(1) Opening and maintaining bank accounts. Banking institutions, 
as defined in Sec. 515.314, are authorized to open and maintain 
accounts, including the deposit of funds in such accounts by wire 
transfer, for a Cuban national located in a third country who is an 
individual, provided that such accounts are used only while the Cuban 
national is located outside of Cuba and may not be used for transactions 
that involve a commercial exportation of goods or services to or from 
Cuba.
    (2) Closing bank accounts. Banking institutions, as defined in 
Sec. 515.314, are authorized to close an account opened pursuant to the 
authorization in paragraph (b)(1) of this section.
    (c) Individuals who are persons subject to U.S. jurisdiction who are 
present in a third country are authorized to purchase or acquire 
merchandise subject to the prohibitions in Sec. 515.204, including 
Cuban-origin goods, and to receive or obtain services in which Cuba or a 
Cuban national has an interest that are ordinarily incident to travel 
and maintenance within that country.
    (d) Individuals who are persons subject to U.S. jurisdiction are 
authorized to import into the United States as accompanied baggage 
merchandise subject to the prohibitions in Sec. 515.204, including 
Cuban-origin goods, that is purchased or acquired in a third country, 
provided that the merchandise is imported for personal use only.

    Note 1 to Sec. 515.585: This section does not authorize U.S.-owned 
or -controlled firms in third countries to export to Cuba commodities 
produced in the authorized trade territory. See Sec. 515.559.
    Note 2 to Sec. 515.585: This section does not authorize U.S.-owned 
or -controlled firms in third countries to reexport to Cuba U.S.-origin 
items. See Sec. 515.533.
    Note 3 to Sec. 515.585: Except as provided in paragraphs (c) and (d) 
of this section, this section does not authorize any transactions 
prohibited by Sec. 515.204.
    Note 4 to Sec. 515.585: The export or reexport to Cuba of goods 
(including software) or technology subject to the Export Administration 
Regulations (15 CFR parts 730 through 774) may require separate 
authorization from the Department of Commerce.

[80 FR 2302, Jan. 16, 2015, as amended at 80 FR 56926, Sept. 21, 2015; 
81 FR 13994, Mar. 16, 2016; 81 FR 71378, Oct. 17, 2016]



Sec. 515.586  Cuban official missions in the United States.

    (a) The provision of goods or services in the United States to the 
official missions of the Government of Cuba to the United States and to 
international organizations in the United States and payment for such 
goods or services are authorized, provided that:
    (1) The goods or services are for the conduct of the official 
business of the missions, or for personal use of the employees, or 
persons who share a common dwelling as a family member of such an 
employee, of the missions, and are not for resale;

[[Page 121]]

    (2) The transaction does not involve the purchase, sale, financing, 
or refinancing of real property; and
    (3) The transaction is not otherwise prohibited by law.
    (b) The provision of goods or services in the United States to the 
employees, or persons who share a common dwelling as a family member of 
such an employee, of the official missions of the Government of Cuba to 
the United States and to international organizations in the United 
States and payment for such goods or services are authorized, provided 
that:
    (1) The goods or services are for personal use of the employees, or 
persons who share a common dwelling as a family member of such an 
employee, of the missions, and are not for resale; and
    (2) The transaction is not otherwise prohibited by law.
    (c) Depository institutions, as defined in Sec. 515.333, are 
authorized to operate accounts for, extend credit to, and process funds 
transfers on behalf of the official missions of the Government of Cuba 
to the United States, and the official missions of the Government of 
Cuba to international organizations in the United States, and employees 
thereof, subject to the limitations in paragraphs (a) and (b) of this 
section and provided that any depository institution making use of the 
authorization in this section must submit a report to the Department of 
the Treasury, Office of Foreign Assets Control, Attn: Sanctions 
Compliance & Evaluation Division, 1500 Pennsylvania Ave NW., Annex, 
Washington, DC 20220, no later than 30 days following the establishment 
of the account. Such report shall include the name and address of the 
depository institution, the name of the account holder, and the account 
number.

[80 FR 2302, Jan. 16, 2015, as amended at 80 FR 56926, Sept. 21, 2015]



Sec. 515.587  Remittances from Cuban nationals to persons subject
to U.S. jurisdiction.

    Persons subject to U.S. jurisdiction are authorized to receive 
remittances in the United States from Cuban nationals, wherever located, 
provided that the remitter is not a prohibited official of the 
Government of Cuba, as defined in Sec. 515.337, or a prohibited member 
of the Cuban Communist Party, as defined in Sec. 515.338.

    Note to Sec. 515.587: See Sec. 515.572 for an authorization to 
provide services related to the receipt of remittances authorized by 
this section.

[80 FR 56926, Sept. 21, 2015]



Sec. 515.588  Certain Cuban legal services authorized.

    (a) All transactions, including payments, ordinarily incident to 
receipt of the following legal services from Cuba or from a Cuban 
national are authorized: legal advice and counseling on the requirements 
of and compliance with the laws of Cuba or any jurisdiction within Cuba, 
provided that such advice and counseling relate to transactions 
authorized by or exempt from the prohibitions of this part.
    (b) The receipt of any other legal services from Cuba or a Cuban 
national, not otherwise authorized in this part, requires the issuance 
of a specific license.

[80 FR 56926, Sept. 21, 2015]



Sec. 515.589  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services in the 
United States to Cuban nationals is authorized.

[80 FR 56926, Sept. 21, 2015]



Sec. 515.590  Certain grants, scholarships, and awards.

    The provision of grants, scholarships, or awards relating to the 
following activities to a Cuban national or in which Cuba or a Cuban 
national otherwise has an interest is authorized:
    (a) Educational activities;
    (b) Humanitarian projects, as set forth in Sec. 515.575(b);
    (c) Scientific research; and
    (d) Religious activities.

[81 FR 71378, Oct. 17, 2016]



Sec. 515.591  Services related to infrastructure.

    Persons subject to the jurisdiction of the United States are 
authorized to provide to Cuba or Cuban nationals services related to 
developing, repairing, maintaining, and enhancing Cuban

[[Page 122]]

infrastructure that directly benefit the Cuban people, provided that 
those services are consistent with the export or reexport licensing 
policy of the Department of Commerce. For the purposes of this section, 
infrastructure means systems and assets used to provide the Cuban people 
with goods and services produced or provided by the public 
transportation, water management, waste management, non-nuclear 
electricity generation, and electricity distribution sectors, as well as 
hospitals, public housing, and primary and secondary schools. This 
authorization includes projects related to the environmental protection 
of U.S., Cuban, and international air quality, waters, and coastlines.
    Note 1 to Sec. 515.591: For provisions related to transactions 
ordinarily incident to the exportation or reexportation of items to 
Cuba, see Secs. 515.533 and 515.559. See Sec. 746.2(b) of the Export 
Administration Regulations (15 CFR parts 730 through 774) for the 
Department of Commerce's Cuba licensing policy.
    Note 2 to Sec. 515.591: See Sec. 515.564 for a general license 
authorizing travel-related and other transactions incident to 
professional research and professional meetings in Cuba, Sec. 515.533(c) 
for a general license authorizing travel-related and other transactions 
relating to certain exports and reexports to Cuba, and Sec. 515.575(a) 
for a general license authorizing transactions, including travel-related 
transactions, related to certain humanitarian projects.

[81 FR 71378, Oct. 17, 2016]



                            Subpart F_Reports



Sec. 515.601  Records and reports.

    For provisions relating to records and reports, see subpart C of 
part 501 of this chapter.

[62 FR 45106, Aug. 25, 1997]



                           Subpart G_Penalties

    Source: 63 FR 10331, Mar. 3, 1998, unless otherwise noted.



Sec. 515.701  Penalties.

    For provisions relating to penalties, see part 501, subpart D, of 
this chapter.

[68 FR 53657, Sept. 11, 2003]



                          Subpart H_Procedures



Sec. 515.801  Procedures.

    For license application procedures and procedures relating to 
amendments, modifications, or revocations of licenses; administrative 
decisions; rulemaking; and requests for documents pursuant to the 
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see 
part 501, subpart E, of this chapter.

[62 FR 45106, Aug. 25, 1997, as amended at 68 FR 53657, Sept. 11, 2003]



Sec. 515.802  Delegation by the Secretary of the Treasury.

    Any action under Sec. 515.201 which the Secretary of the Treasury is 
authorized to take pursuant to Proclamation 3447 or the Trading With the 
Enemy Act may be taken by the Director, Office of Foreign Assets 
Control, or by any other person to whom the Secretary of the Treasury 
has delegated authority so to act.

[28 FR 6974, July 9, 1963. Redesignated at 62 FR 45106, Aug. 25, 1997]



                   Subpart I_Miscellaneous Provisions



Sec. 515.901  Paperwork Reduction Act notice.

    Collection of information on TDF 90-22.39, ``Declaration, Travel to 
Cuba,'' has been approved by the Office of Management and Budget 
(``OMB'') under the Paperwork Reduction Act (44 U.S.C. 3507(j)) and 
assigned control number 1505-0118. For approval by OMB under the 
Paperwork Reduction Act of information collections relating to 
recordkeeping and reporting requirements, to licensing procedures 
(including those pursuant to statements of licensing policy), and to 
other procedures, see Sec. 501.901 of this chapter. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a valid control number 
assigned by OMB.

[62 FR 45106, Aug. 25, 1997]

[[Page 123]]



PART 535_IRANIAN ASSETS CONTROL REGULATIONS--Table of Contents



      Subpart A_Relation of This Part to Other Laws and Regulations

Sec.
535.101  Relation of this part to other laws and regulations.

                         Subpart B_Prohibitions

535.201  Transactions involving property in which Iran or Iranian 
          entities have an interest.
535.202  Transactions with respect to securities registered or inscribed 
          in the name of Iran.
535.203  Effect of transfers violating the provisions of this part.
535.208  Evasions; effective date.
535.210  Direction for establishing an escrow agreement.
535.211  Direction involving transfers by the Federal Reserve Bank 
          concerning certain Iranian property.
535.212  Direction to transfer property in which Iran or an Iranian 
          entity has an interest by branches and offices of United 
          States banks located outside the United States.
535.213  Direction involving property held by offices of banks in the 
          United States in which Iran or an Iranian entity has an 
          interest.
535.214  Direction involving other financial assets in which Iran or an 
          Iranian entity has an interest held by any person subject to 
          the jurisdiction of the United States.
535.215  Direction involving other properties in which Iran or an 
          Iranian entity has an interest held by any person subject to 
          the jurisdiction of the United States.
535.216  Prohibition against prosecution of certain claims.
535.217  Blocking of property of the former Shah of Iran and of certain 
          other Iranian nationals.
535.218  Prohibitions and nullifications with respect to property 
          described in Secs. 535.211, 535.212, 535.213, 535.214 and 
          535.215 and standby letters of credit.
535.219  Discharge of obligation by compliance with this part.
535.220  Timing of transfers required by Sec. 535.212.
535.221  Compliance with directive provisions.
535.222  Suspension of claims eligible for Claims Tribunal.

                      Subpart C_General Definitions

535.301  Iran; Iranian Entity.
535.308  Person.
535.310  Transfer.
535.311  Property; property interests.
535.312  Interest.
535.316  License.
535.317  General license.
535.318  Specific license.
535.320  Domestic bank.
535.321  United States; continental United States.
535.329  Person subject to the jurisdiction of the United States.
535.333  Properties.
535.334  Act of the Government of Iran.
535.335  Claim arising out of events in Iran.
535.337  Funds.

                        Subpart D_Interpretations

535.401  Reference to amended sections.
535.402  Effect of amendment of sections of this part or of other 
          orders, etc.
535.403  Termination and acquisition of an interest of Iran or an 
          Iranian entity.
535.413  Transfers between dollar accounts held for foreign banks.
535.414  Payments to blocked accounts under Sec. 535.508.
535.415  Payment by Iranian entities of obligations to persons within 
          the United States.
535.416  Letters of credit.
535.420  Transfers of accounts under Sec. 535.508 from demand to 
          interest-bearing status.
535.421  Prior contractual commitments not a basis for licensing.
535.433  Central Bank of Iran.
535.437  Effect on other authorities.
535.438  Standby letters of credit, performance or payment bonds and 
          similar obligations.
535.440  Commercially reasonable interest rates.
535.441  Settlement Agreement regarding small claims.

  Subpart E_Licenses, Authorizations and Statements of Licensing Policy

535.501  General and specific licensing procedures.
535.502  Effect of license or authorization.
535.503  Exclusion from licenses and authorizations.
535.504  Certain judicial proceedings with respect to property of Iran 
          or Iranian entities.
535.508  Payments to blocked accounts in domestic banks.
535.528  Certain transactions with respect to Iranian patents, 
          trademarks and copyrights authorized.
535.531  Payment of certain checks and drafts.
535.532  Completion of certain securities transactions.
535.540  Disposition of certain tangible property.

[[Page 124]]

535.566  Unblocking of foreign currency deposits held by U.S.-owned or 
          controlled foreign firms.
535.567  Payment under advised letters of credit.
535.568  Certain standby letters of credit and performance bonds.
535.569  Licensed letter of credit transactions; forwarding of 
          documents.
535.576  Payment of non-dollar letters of credit to Iran.
535.579  Authorization of new transactions concerning certain Iranian 
          property.
535.580  Necessary living expenses of relatives of the former Shah of 
          Iran.

                            Subpart F_Reports

535.601  Records and reports.

                           Subpart G_Penalties

535.701  Penalties.
535.702  Prepenalty notice.
535.703  Presentation responding to prepenalty notice.
535.704  Penalty notice.
535.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H_Procedures

535.801  Procedures.

                   Subpart I_Miscellaneous Provisions

535.901  Dollar accounts at banks abroad.
535.902  Set-offs by U.S. owned or controlled firms abroad.
535.904  Payment by Iranian entities of obligations to persons within 
          the United States.
535.905  Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 18 U.S.C. 2332d; 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. 12170, 44 FR 65729, 3 
CFR, 1979 Comp., p. 457; E.O. 12205, 45 FR 24099, 3 CFR, 1980 Comp., p. 
248; E.O. 12211, 45 FR 26685, 3 CFR, 1980 Comp., p. 253; E.O. 12276, 46 
FR 7913, 3 CFR, 1981 Comp., p. 104; E.O. 12279, 46 FR 7919, 3 CFR, 1981 
Comp., p. 109; E.O. 12280, 46 FR 7921, 3 CFR, 1981 Comp., p. 110; E.O. 
12281, 46 FR 7923, 3 CFR, 1981 Comp., p. 110; E.O. 12282, 46 FR 7925, 3 
CFR, 1981 Comp., p. 113; E.O. 12283, 46 FR 7927, 3 CFR, 1981 Comp., p. 
114; and E.O. 12294, 46 FR 14111, 3 CFR, 1981 Comp., p. 139.

    Source: 44 FR 65956, Nov. 15, 1979, unless otherwise noted.



      Subpart A_Relation of This Part to Other Laws and Regulations



Sec. 535.101  Relation of this part to other laws and regulations.

    (a) This part is separate from, and independent of, the other parts 
of this chapter with the exception of part 501 of this chapter, the 
recordkeeping and reporting requirements and license application and 
other procedures of which apply to this part. No license or 
authorization contained in or issued pursuant to such parts shall be 
deemed to authorize any transaction prohibited by this part, nor shall 
any license or authorization issued pursuant to any other provision of 
law (except this part) be deemed to authorize any transaction so 
prohibited.
    (b) No license or authorization contained in or issued pursuant to 
this part shall be deemed to authorize any transaction to the extent 
that it is prohibited by reason of the provisions of any law or any 
statute other than the International Emergency Economic Powers Act, as 
amended, or any proclamation order or regulation other than those 
contained in or issued pursuant to this part.

[44 FR 65956, Nov. 15, 1979, as amended at 62 FR 45107, Aug. 25, 1997]



                         Subpart B_Prohibitions



Sec. 535.201  Transactions involving property in which Iran or
Iranian entities have an interest.

    No property subject to the jurisdiction of the United States or 
which is in the possession of or control of persons subject to the 
jurisdiction of the United States in which on or after the effective 
date Iran has any interest of any nature whatsoever may be transferred, 
paid, exported, withdrawn or otherwise dealt in except as authorized.

[45 FR 24432, Apr. 9, 1980]



Sec. 535.202  Transactions with respect to securities registered 
or inscribed in the name of Iran.

    Unless authorized by a license expressly referring to this section, 
the acquisition, transfer (including the transfer on the books of any 
issuer or

[[Page 125]]

agent thereof), disposition, transportation, importation, exportation, 
or withdrawal of, or the endorsement or guaranty of signatures on or 
otherwise dealing in any security (or evidence thereof) registered or 
inscribed in the name of any Iranian entity is prohibited irrespective 
of the fact that at any time (either prior to, on, or subsequent to the 
effective date) the registered or inscribed owner thereof may have, or 
appears to have, assigned, transferred or otherwise disposed of any such 
security.



Sec. 535.203  Effect of transfers violating the provisions of this 
part.

    (a) Any transfer after the effective date which is in violation of 
any provision of this part or of any regulation, ruling, instruction, 
license, or other direction or authorization thereunder and involves any 
property in which Iran has or has had an interest since such effective 
date 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.
    (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 interest in, any property in which Iran has or has had an 
interest since the effective date unless the person with whom such 
property is held or maintained had written notice of the transfer or by 
any written evidence had recognized such transfer prior to such 
effective date.
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by or pursuant to the direction or authorization of 
the Secretary of the Treasury before, during or after a transfer shall 
validate such transfer or render it enforceable to the same extent as it 
would be valid or enforceable but for the provisions of the 
International Emergency Economic Powers Act and this part and any 
ruling, order, regulation, direction or instruction issued hereunder.
    (d) Transfers of property which otherwise would be null and void, or 
unenforceable by virtue of the provisions of this section shall not be 
deemed to be null and void, or unenforceable pursuant to such 
provisions, as to any person with whom such property was held or 
maintained (and as to such person only) in cases in which such person is 
able to establish each of the following:
    (1) Such transfer did not represent a willful violation of the 
provisions of this part by the person with whom such property was held 
or maintained;
    (2) The person with whom such property was held or maintained did 
not have reasonable cause to know or suspect, in view of all the facts 
and circumstances known or available to such person, that such transfer 
required a license or authorization by or pursuant to the provision of 
this part and was not so licensed or authorized or if a license or 
authorization did purport to cover the transfer, that such license or 
authorization had been obtained by misrepresentation or the withholding 
of material facts or was otherwise fraudulently obtained; and
    (3) Promptly upon discovery that:
    (i) Such transfer was in violation of the provisions of this part or 
any regulation, ruling, instruction, license or other direction or 
authorization thereunder, or
    (ii) Such transfer was not licensed or authorized by the Secretary 
of the Treasury, or
    (iii) If a license did purport to cover the transfer, such license 
had been obtained by misrepresentation or the withholding of material 
facts or was otherwise fraudulently obtained; the person with whom such 
property was held or maintained filed with the Treasury Department, 
Washington, D.C., a report in triplicate setting forth in full the 
circumstances relating to such transfer. The filing of a report in 
accordance with the provisions of this paragraph shall not be deemed to 
be compliance or evidence of compliance with paragraphs (d) (1) and (2) 
of this section.
    (e) Unless licensed or authorized 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 Iran.
    (f) For the purpose of this section the term property includes gold, 
silver, bullion, currency, coin, credit, securities

[[Page 126]]

(as that term is defined in section 2(l) of the Securities Act of 1933, 
as amended), bills of exchange, notes, drafts, acceptances, checks, 
letters of credit, book credits, debts, claims, contracts, negotiable 
documents of title, mortgages, liens, annuities, insurance policies, 
options and futures in commodities, and evidences of any of the 
foregoing. The term property shall not, except to the extent indicated, 
be deemed to include chattels or real property.

[44 FR 65956, Nov. 15, 1979, as amended at 45 FR 24432, Apr. 9, 1980]



Sec. 535.208  Evasions; effective date.

    (a) Any transaction for the purpose of, or which has the effect of, 
evading or avoiding any of the prohibitions set forth in this subpart is 
hereby prohibited.
    (b) The term effective date means, with respect to transactions 
prohibited in Sec. 535.201, 8:10 a.m. eastern standard time, November 
14, 1979, and with respect to the transactions prohibited in 
Secs. 535.206 and 535.207, 4:19 p.m. eastern standard time, April 7, 
1980.
    (c) With respect to any amendments of the foregoing sections or any 
other amendments to this part the term ``effective date'' shall mean the 
date of filing with the Federal Register.

[45 FR 24433, Apr. 9, 1980, as amended at 45 FR 26940, Apr. 21, 1980]



Sec. 535.210  Direction for establishing an escrow agreement.

    (a) The Federal Reserve Bank of New York, as fiscal agent of the 
United States, is licensed, authorized, directed and compelled to enter 
into escrow and related agreements under which certain money and other 
assets shall be credited to escrow accounts by the Bank of England or 
the N.V. Settlement Bank of the Netherlands.
    (b) The Federal Reserve Bank of New York is licensed, authorized, 
directed and compelled, as fiscal agent of the United States, to receive 
certain money and other assets in which Iran or its agencies, 
instrumentalities or controlled entities have an interest and to hold or 
transfer such money and other assets, and any earnings or interest 
payable thereon, in such manner and at such times as the Secretary of 
the Treasury deems necessary to fulfill the rights and obligations of 
the United States under the Declaration of the government of the 
Democratic and Popular Republic of Algeria dated January 19, 1981, and 
the Undertakings of the Government of the United States of America and 
the Government of Islamic Republic of Iran with respect to the 
Declaration of the Government of the Democratic and Popular Republic of 
Algeria, and the escrow and related agreements described in paragraph 
(a) of this section. Such money and other assets may be invested, or 
not, at the discretion of the Federal Reserve Bank of New York, as 
fiscal agent of the United States.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14333, Feb. 26, 1981, as amended at 46 FR 42063, Aug. 19, 1981]



Sec. 535.211  Direction involving transfers by the Federal Reserve
Bank concerning certain Iranian property.

    The Federal Reserve Bank of New York is licensed, authorized, 
directed and compelled to transfer to its account at the Bank of 
England, and subsequently to transfer to accounts in the name of the 
Central Bank of Algeria as Escrow Agent at the Bank of England that are 
established pursuant to an escrow and related agreements approved by the 
Secretary of the Treasury, all gold bullion, together with all other 
assets in its custody (or the cash equivalent thereof), of Iran or its 
agencies, instrumentalities or controlled entities. Such transfers, and 
whatever further related transactions are deemed appropriate by the 
Secretary of the Treasury, shall be executed when and in the manner 
directed by the Secretary of the Treasury.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14333, Feb. 26, 1981]

[[Page 127]]



Sec. 535.212  Direction to transfer property in which Iran or an 
Iranian entity has an interest by branches and offices of 
United States banks located outside the United States.

    (a) Any branch or office of a United States bank or subsidiary 
thereof, which branch, office or subsidiary is located outside the 
territory of the United States, and which, on or after 8:10 a.m., 
e.s.t., on November 14, 1979:
    (1) Has been or is in possession of funds or securities legally or 
beneficially owned by the Government of Iran or its agencies, 
instrumentalities, or controlled entities, or
    (2) Has carried or is carrying on its books deposits standing to the 
credit of or beneficially owned by such government, its agencies, 
instrumentalities or controlled entities, is licensed, authorized, 
directed and compelled to transfer such funds, securities and deposits, 
held on January 19, 1981, including interest from November 14, 1979, at 
commercially reasonable rates, to the account of the Federal Reserve 
Bank of New York, as fiscal agent of the U.S., at the Bank of England, 
to be held or transferred as directed by the Secretary of the Treasury. 
The funds, securities and deposits described in this section shall be 
further transferred as provided for in the Declarations of the 
Government of the Democratic and Popular Republic of Algeria and the 
Undertakings of the Government of the United States of America and the 
Government of the Islamic Republic of Iran with respect to the 
Declaration.
    (b) Any banking institution subject to the jurisdiction of the 
United States that has executed a set-off on or after 8:10 a.m., e.s.t., 
November 14, 1979, against Iranian funds, securities or deposits 
referred to in paragraph (a) of this section is hereby licensed, 
authorized, directed and compelled to cancel such set-off and to 
transfer all funds, securities and deposits which have been subject to 
such set-off, including interest from November 14, 1979, at commercially 
reasonable rates, pursuant to the provisions of paragraph (a) of this 
section.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14333, Feb. 26, 1981]



Sec. 535.213  Direction involving property held by offices of banks 
in the United States in which Iran or an Iranian entity has an 
interest.

    (a) Any branch or office of a bank, which branch or office is 
located within the United States and is, on the effective date of this 
section, either:
    (1) In possession of funds or securities legally or beneficially 
owned by the Government of Iran or its agencies, instrumentalities or 
controlled entities, or
    (2) Carrying on its books deposits standing to the credit of or 
beneficially owned by such government or its agencies, instrumentalities 
or controlled entities, is licensed, authorized, directed and compelled 
to transfer such funds, securities and deposits, held on January 19, 
1981, including interest from November 14, 1979, at commercially 
reasonable rates, to the Federal Reserve Bank of New York, as fiscal 
agent of the U.S., to be held or transferred as directed by the 
Secretary of the Treasury.
    (b) Transfer of funds, securities or deposits under paragraph (a) of 
this section shall be in accordance with the provisions of Sec. 535.221 
of this part, and such funds, securities or deposits, plus interest at 
commercially reasonable rates from November 14, 1979, to the transfer 
date, shall be received by the Federal Reserve Bank of New York by 11 
a.m., E.D.T., July 10, 1981. For periods for which rates are to be 
determined in the future, whether by agreement between Iran and the bank 
or otherwise (see Sec. 535.440), interest for such periods shall be 
transferred to the Federal Reserve Bank of New York promptly upon such 
determination. Such interest shall include interest at commercially 
reasonable rates from July 19, 1981, on the interest which would have 
accrued by July 19, 1981.

[[Page 128]]

    (c) Any funds, securities or deposits subject to a valid attachment, 
injunction or other like proceeding or process not affected by 
Sec. 535.218 need not be transferred as otherwise required by this 
section.
    (d) The transfers of securities required by this section shall be 
made notwithstanding Sec. 535.202.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 26477, May 13, 1981, as amended at 46 FR 30341, June 8, 1981; 46 
FR 35106, July 7, 1981; 48 FR 253, Jan. 4, 1983]



Sec. 535.214  Direction involving other financial assets in which 
Iran or an Iranian entity has an interest held by any person subject
to the jurisdiction of the United States.

    (a) Any person subject to the jurisdiction of the United States 
which is not a banking institution and is on January 19, 1981, in 
possession or control of funds or securities of Iran or its agencies, 
instrumentalities or controlled entities is licensed, authorized, 
directed and compelled to transfer such funds or securities to the 
Federal Reserve Bank of New York, as fiscal agent of the U.S. to be held 
or transferred as directed by the Secretary of the Treasury. However, 
such funds and securities need not be transferred until any disputes 
(not relating to any attachment, injunction or similar order) as to the 
entitlement of Iran and its entities to them are resolved.
    (b) Transfers of funds and securities under paragraph (a) of this 
section shall be in accordance with the provisions of Sec. 535.221 of 
this part, and such funds and securities shall be received by the 
Federal Reserve Bank of New York by 11 a.m., E.D.T., July 10, 1981.
    (c) Any funds, securities or deposits subject to a valid attachment, 
injunction or other like proceeding or process not affected by 
Sec. 535.218 need not be transferred as otherwise required by this 
section.
    (d) The transfers of securities required by this section shall be 
made notwithstanding Sec. 535.202.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 26447, May 13, 1981, as amended at 46 FR 30341, June 8, 1981; 46 
FR 35107, July 7, 1981]



Sec. 535.215  Direction involving other properties in which Iran\
or an Iranian entity has an interest held by any person subject 
to the jurisdiction of the United States.

    (a) Except as provided in paragraphs (b) and (c) of this section, 
all persons subject to the jurisdiction of the United States in 
possession or control of properties, as defined in Sec. 535.333 of this 
part, not including funds and securities owned by Iran or its agencies, 
instrumentalities or controlled entities, are licensed, authorized, 
directed and compelled to transfer such properties held on January 18, 
1981 as directed after that day by the Government of Iran, acting 
through its authorized agent. Such directions shall include arrangements 
for payment of the costs of transporting the properties, unless the 
possessors of the properties were required to pay such costs by contract 
or applicable law on January 19, 1981. Except where specifically stated, 
this license, authorization and direction does not relieve persons 
subject to the jurisdiction of the United States from existing legal 
requirements other than those based upon the International Emergency 
Economic Powers Act.
    (b) Any properties subject to a valid attachment, injunction or 
other like proceeding or process not affected by Sec. 535.218 need not 
be transferred as otherwise required by this section.
    (c) Notwithstanding paragraph (a) of this section, persons subject 
to the jurisdiction of the United States, including agencies, 
instrumentalities and entities controlled by the Government of Iran, who 
have possession, custody or control of blocked tangible property covered 
by Sec. 535.201, shall not transfer

[[Page 129]]

such property without a specific Treasury license, if the export of such 
property requires a specific license or authorization pursuant to the 
provisions of any of the following acts, as amended, or regulations in 
force with respect to them: the Export Administration Act, 50 U.S.C. 
App. 2403, et seq., the Aims Export Control Act, 22 U.S.C. 2751, et 
seq., the Atomic Energy Act, 42 U.S.C. 2011, et seq., or any other act 
prohibiting the export of such property, except as licensed.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14334, Feb. 26, 1981, as amended at 46 FR 26477, May 13, 1981; 49 
FR 21322, May 21, 1984; 66 FR 38554, July 25, 2001]



Sec. 535.216  Prohibition against prosecution of certain claims.

    (a) Persons subject to the jurisdiction of the United States are 
prohibited from prosecuting in any court within the United States or 
elsewhere, whether or not litigation was commenced before or after 
January 19, 1981, any claim against the Government of Iran arising out 
of events occurring before January 19, 1981 relating to:
    (1) The seizure of the hostages on November 4, 1979;
    (2) The subsequent detention of such hostages;
    (3) Injury to United States property or property of United States 
nationals within the United States Embassy compound in Tehran after 
November 3, 1979; or
    (4) Injury to United States nationals or their property as a result 
of popular movements in the course of the Islamic Revolution in Iran 
which were not an act of the Government of Iran.
    (b) Any persons who are not United States nationals are prohibited 
from prosecuting any claim described in paragraph (a) of this section in 
any court within the United States.
    (c) No further action, measure or process shall be taken after the 
effective date of this section in any judicial proceeding instituted 
before the effective date of this section which is based upon any claim 
described in paragraph (a) of this section, and all such proceedings 
shall be terminated.
    (d) No judicial order issued in the course of the proceedings 
described in paragraph (c) of this section shall be enforced in any way.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14334, Feb. 26, 1981]



Sec. 535.217  Blocking of property of the former Shah of Iran and of
certain other Iranian nationals.

    (a) For the purpose of protecting the rights of litigants in courts 
within the United States, all property and assets located in the United 
States in the control of the estate of Mohammad Reza Pahlavi, the former 
Shah of Iran, or any close relative of the former Shah served as a 
defendant in litigation in such courts brought by Iran seeking the 
return of property alleged to belong to Iran, is blocked as to each such 
estate or person, until all such litigation against such estate or 
person is finally terminated. This provision shall apply only to such 
estate or persons as to which Iran has furnished proof of service to the 
Office of Foreign Assets Control and which the Office has identified in 
paragraph (b) of this section.
    (b) [No persons presently listed].
    (c) The effective date of this section is January 19, 1981, except 
as otherwise specified after the name of a person identified in 
paragraph (b) of this section.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 26478, May 13, 1981, as amended at 61 FR 8216, Mar. 4, 1996; 61 
FR 15382, Apr. 8, 1996]

[[Page 130]]



Sec. 535.218  Prohibitions and nullifications with respect to property
described in Secs. 535.211, 535.212, 535.213, 535.214 and 535.215 
and standby letters of credit.

    (a) All licenses and authorizations for acquiring or exercising any 
right, power or privilege, by court order, attachment, or otherwise, 
including the license contained in Sec. 535.504, with respect to the 
property described in Secs. 535.211, 535.212, 535.213, 535.214 and 
535.215 are revoked and withdrawn.
    (b) All rights, powers and privileges relating to the property 
described in Secs. 535.211, 535.212, 535.213, 535.214 and 535.215 and 
which derive from any attachment, injunction, other like proceedings or 
process, or other action in any litigation after November 14, 1979, at 
8:10 a.m., e.s.t., including those derived from Sec. 535.504, other than 
rights, powers and privileges of the Government of Iran and its 
agencies, instrumentalities and controlled entities, whether acquired by 
court order or otherwise, are nullified, and all persons claiming any 
such right, power or privilege are hereafter barred from exercising the 
same.
    (c) All persons subject to the jurisdiction of the United States are 
prohibited from acquiring or exercising any right, power or privilege, 
whether by court order or otherwise, with respect to property (and any 
income earned thereon) referred to in Secs. 535.211, 535.212, 535.213, 
535.214 and 535.215.
    (d) The prohibitions contained in paragraph (c) of this section 
shall not apply to Iran, its agencies, instrumentalities or controlled 
entities.
    (e) Paragraph (a) of this section does not revoke or withdraw 
specific licenses authorizing the operation of blocked accounts which 
were issued prior to January 19, 1981, and which do not relate to 
litigation. Such licenses shall be deemed to be revoked as of May 31, 
1981, unless extended by general or specific license issued subsequent 
to February 26, 1981.
    (f) The provisions of paragraphs (a), (b) and (c) of this section 
shall apply to contested and contingent liabilities and property 
interests of the Government of Iran, its agencies, instrumentalities or 
controlled entities, including debts.
    (g) All existing attachments on standby letters of credit, 
performance bonds and similar obligations and on substitute blocked 
accounts established under Sec. 535.568 relating to standby letters of 
credit, performance bonds and similar obligations are nullified and all 
future attachments on them are hereafter prohibited. All rights, powers 
and privileges relating to such attachments are nullified and all 
persons hereafter are barred from asserting or exercising any rights, 
powers or privileges derived therefrom.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14334, Feb. 26, 1981, as amended at 46 FR 26477, May 13, 1981]



Sec. 535.219  Discharge of obligation by compliance with this part.

    Compliance with Secs. 535.210, 535.211, 535.212, 535.213, 535.214 
and 535.215, or any other orders, regulations, instructions or 
directions issued pursuant to this part licensing, authorizing, 
directing or compelling the transfer of the assets described in those 
sections, shall, to the extent thereof, be a full acquittance and 
discharge for all purposes of the obligation of the person making the 
same. No person shall be held liable in any court for or with respect to 
anything done or omitted in good faith in connection with the 
administration of, or pursuant to and in reliance on, such orders, 
regulations, instructions or directions.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14334, Feb. 26, 1981]



Sec. 535.220  Timing of transfers required by Sec. 535.212.

    Transfers required by Sec. 535.212 to the account of the Federal 
Reserve Bank of New York, as fiscal agent of the U.S.,

[[Page 131]]

at the Bank of England shall be executed no later than 6 a.m., e.s.t., 
January 20, 1981, when the banking institution had knowledge of the 
terms of Executive Order 12278 of January 19, 1981.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14335, Feb. 26, 1981]



Sec. 535.221  Compliance with directive provisions.

    (a) Transfers of deposits or funds required by Secs. 535.213 and 
535.214 of this part shall be effected by means of wire transfer to the 
Federal Reserve Bank of New York for credit to the following accounts: 
with respect to transfers required by Sec. 535.213, to the Federal 
Reserve Bank of New York, as fiscal agent of the United States, Special 
Deposit Account A, and with respect to transfers required by 
Sec. 535.214, to the Federal Reserve Bank of New York, as fiscal agent 
of the United States, Special Deposit Account B.
    (b) Securities to be transferred as required by Secs. 535.213 and 
535.214 of this part that are not presently registered in the name of 
Iran or an Iranian entity shall be delivered to the Federal Reserve Bank 
of New York in fully transferable form (bearer or endorsed in blank), 
accompanied by all necessary transfer documentation, e.g., stock or bond 
powers or powers of attorney. All securities transferred, including 
those presently registered in the name of Iran or an Iranian entity, 
shall be accompanied by instructions to deposit such securities to the 
following accounts: with respect to transfers required by Sec. 535.213, 
to the Federal Reserve Bank of New York, as fiscal agent of the United 
States, Special Custody Account A, and with respect to transfers 
required by Sec. 535.214, to the Federal Reserve Bank of New York, as 
fiscal agent of the United States, Special Custody Account B.
    (1) Securities which are in book-entry form shall be transferred by 
wire transfer to the Federal Reserve Bank of New York to the appropriate 
account named in this paragraph.
    (2) Definitive securities which are in bearer or registered form 
shall be hand delivered or forwarded by registered mail, insured, to the 
Federal Reserve Bank of New York, Safekeeping Department, to the 
appropriate account named in this paragraph.
    (c) If a security in which Iran or an Iranian entity has an interest 
is evidenced by a depositary receipt or other evidence of a security, 
the legal owner of such security shall arrange to have the security 
placed in fully transferable form (bearer or endorsed in blank) as 
provided in paragraph (b) of this section, and transferred pursuant to 
paragraph (b)(2) of this section.
    (d) Any person delivering a security or securities to the Federal 
Reserve Bank of New York under paragraph (b) of this section, shall 
provide the Bank at least 2 business days prior written notice of such 
delivery, specifically identifying the sending person, the face or par 
amount and type of security, and whether the security is in bearer, 
registered or book-entry form.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 30341, June 8, 1981]



Sec. 535.222  Suspension of claims eligible for Claims Tribunal.

    (a) All claims which may be presented to the Iran-United States 
Claims Tribunal under the terms of Article II of the Declaration of the 
Government of the Democratic and Popular Republic of Algeria Concerning 
the Settlement of Claims by the Government of the United States of 
America and the Government of the Islamic Republic of Iran, dated 
January 19, 1981, and all claims for equitable or other judicial relief 
in connection with such claims, are hereby suspended, except as they may 
be presented to the Tribunal. During the period of this suspension, all 
such claims shall have no legal effect in any action now pending in any 
court in the United States, including the courts of any state and any 
locality thereof, the District of Columbia and Puerto Rico, or in any 
action

[[Page 132]]

commenced in any such court after the effective date of this section.
    (b) Nothing in paragraph (a) of this section shall prohibit the 
assertion of a defense, set-off or counterclaim in any pending or 
subsequent judicial proceeding commenced by the Government of Iran, any 
political subdivision of Iran, or any agency, instrumentality or entity 
controlled by the Government of Iran or any political subdivision 
thereof.
    (c) Nothing in this section precludes the commencement of an action 
after the effective date of this section for the purpose of tolling the 
period of limitations for commencement of such action.
    (d) Nothing in this section shall require dismissal of any action 
for want of prosecution.
    (e) Suspension under this section of a claim or a portion thereof 
submitted to the Iran-United States Claims Tribunal for adjudication 
shall terminate upon a determination by the Tribunal that it does not 
have jurisdiction over such claim or portion thereof.
    (f) A determination by the Iran-United States Claims Tribunal on the 
merits that a claimant is not entitled to recover on a claim or part 
thereof shall operate as a final resolution and discharge of such claim 
or part thereof for all purposes. A determination by the Tribunal that a 
claimant shall have recovery on a claim or part thereof in a specified 
amount shall operate as a final resolution and discharge of such claim 
or part thereof for all purposes upon payment to the claimant of the 
full amount of the award including any interest awarded by the Tribunal.
    (g) Nothing in this section shall apply to any claim concerning the 
validity or payment of a standby letter of credit, performance or 
payment bond, or other similar instrument that is not the subject of a 
determination by the Iran-United States Claims Tribunal on the merits 
thereof. However, assertion of such a claim through judicial proceedings 
is governed by the general license in Sec. 535.504. A determination by 
the Iran-United States Claims Tribunal on the merits that a standby 
letter of credit, performance bond or similar obligation is invalid, has 
been paid or otherwise discharged, or has no further purpose, or any 
similar determination shall operate as a final resolution and discharge 
or Iran's interest therein and, notwithstanding the provisions of 
Sec. 535.504, may be enforced by a judicial proceeding to obtain a final 
judicial judgment or order permanently disposing of that interest.
    (h) The effective date of this section is February 24, 1981.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14335, Feb. 26, 1981, as amended at 47 FR 29529, July 7, 1982; 56 
FR 6546, Feb. 15, 1991]



                      Subpart C_General Definitions



Sec. 535.301  Iran; Iranian Entity.

    (a) The term Iran and Iranian Entity includes:
    (1) The state and the Government of Iran as well as any political 
subdivision, agency, or instrumentality thereof or any territory, 
dependency, colony, protectorate, mandate, dominion, possession or place 
subject to the jurisdiction thereof;
    (2) Any partnership, association, corporation, or other organization 
substantially owned or controlled by any of the foregoing;
    (3) Any person to the extent that such person is, or has been, or to 
the extent that there is reasonable cause to believe that such person 
is, or has been, since the effective date acting or purporting to act 
directly or indirectly on behalf of any of the foregoing;
    (4) Any territory which on or since the effective date is controlled 
or occupied by the military, naval or police forces or other authority 
of Iran; and
    (5) Any other person or organization determined by the Secretary of 
the Treasury to be included within paragraph (a) of this section.
    (b) A person specified in paragraph (a)(2) of this section shall not 
be deemed to fall within the definition of Iran solely by reason of 
being located in, organized under the laws of, or having its principal 
place of business in, Iran.

[[Page 133]]



Sec. 535.308  Person.

    The term person means an individual, partnership, association, 
corporation or other organization.

[45 FR 24433, Apr. 9, 1980]



Sec. 535.310  Transfer.

    The term transfer shall mean 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, 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 appointment of any agent, trustee, or fiduciary; the creation or 
transfer of any lien; the issuance, docketing, filing, or the levy of or 
under any judgement, decree, attachment, execution, or other judicial or 
administrative process or order, or the service of any garnishment; the 
acquisition of any interest of any nature whatsoever by reason of a 
judgment or decree of any foreign country; the fulfillment of any 
condition, or the exercise of any power of appointment, power of 
attorney, or other power.

[44 FR 75352, Dec. 19, 1979]



Sec. 535.311  Property; property interests.

    Except as defined in Sec. 535.203(f) for the purposes of that 
section, the terms property and property interest or property interests 
shall include, but not by way of limitation, money, checks, drafts, 
bullion, bank deposits, savings accounts, debts, indebtedness, 
obligations, notes, debentures, stocks, bonds, coupons, any other 
financial securities, bankers' acceptances, mortgages, pledges, liens or 
other rights in the nature of security, warehouse receipts, bills of 
lading, trust receipts, bills of sale, any other evidences of title, 
ownership or indebtedness, powers of attorney, goods, wares, 
merchandise, chattels, stocks on hand, ships, goods on ships, real 
estate mortgages, deeds of trust, vendors' sales agreements, land 
contracts, real estate and any interest therein, leaseholds, grounds 
rents, options, negotiable instruments, trade acceptances, royalties, 
book accounts, accounts payable, judgments, patents, trademarks or 
copyrights, insurance policies, safe deposit boxes and their contents, 
annuities, pooling agreements, contracts of any nature whatsoever, and 
any other property, real, personal, or mixed, tangible or intangible, or 
interest or interests therein, present, future or contingent.



Sec. 535.312  Interest.

    Except as otherwise provided in this part, the term interest when 
used with respect to property shall mean an interest of any nature 
whatsoever, direct or indirect.

[44 FR 75352, Dec. 19, 1979]



Sec. 535.316  License.

    Except as otherwise specified, the term license shall mean any 
license or authorization contained in or issued pursuant to this part.

[44 FR 66832, Nov. 21, 1979]



Sec. 535.317  General license.

    A general license is any license or authorization the terms of which 
are set forth in this part.

[44 FR 66832, Nov. 21, 1979]



Sec. 535.318  Specific license.

    A specific license is any license or authorization issued pursuant 
to this part but not set forth in this part.

[44 FR 66832, Nov. 21, 1979]



Sec. 535.320  Domestic bank.

    (a) The term domestic bank shall mean any branch or office within 
the United States of any of the following which is not Iran or an 
Iranian entity: any bank or trust company incorporated under the banking 
laws of the United States or of any state, territory, or district of the 
United States, or any private bank or banker subject to supervision and 
examination under the banking laws of the United States or of any state, 
territory or district of

[[Page 134]]

the United States. The Secretary of the Treasury may also authorize any 
other banking institution to be treated as a ``domestic bank'' for the 
purpose of this definition or for the purpose of any or all sections of 
this part.
    (b) For purposes of Secs. 535.413, 535.508, 535.531 and 535.901, the 
term domestic bank includes any branch or office within the United 
States of a non-Iranian foreign bank.

[44 FR 66832, Nov. 21, 1979]



Sec. 535.321  United States; continental United States.

    The term United States means the United States and all areas under 
the jurisdiction or authority thereof including the Trust Territory of 
the Pacific Islands. The term continental United States means the states 
of the United States and the District of Columbia.

[44 FR 66833, Nov. 21, 1979]



Sec. 535.329  Person subject to the jurisdiction of the United States.

    The term person subject to the jurisdiction of the United States 
includes:
    (a) Any person wheresoever located who is a citizen or resident of 
the United States;
    (b) Any person actually within the United States;
    (c) Any corporation organized under the laws of the United States or 
of any state, territory, possession, or district of the United States; 
and
    (d) Any partnership, association, corporation, or other organization 
wheresoever organized or doing business which is owned or controlled by 
persons specified in paragraph (a), (b), or (c) of this section.



Sec. 535.333  Properties.

    (a) The term properties as used in Sec. 535.215 means all 
uncontested and non-contingent liabilities and property interests of the 
Government of Iran, its agencies, instrumentalities, or controlled 
entities, including debts. It does not include bank deposits or funds 
and securities. It also does not include obligations under standby 
letters of credit or similar instruments in the nature of performance 
bonds, including accounts established pursuant to Sec. 535.568.
    (b) Properties do not cease to fall within the definition in 
paragraph (a), above, merely due to the existence of unpaid obligations, 
charges or fees relating to such properties, or undischarged liens 
against such properties.
    (c) Liabilities and property interests of the Government of Iran, 
its agencies, instrumentalities, or controlled entities may be 
considered contested only if the holder thereof reasonably believes that 
Iran does not have title or has only partial title to the asset. After 
October 23, 2001, such a belief may be considered reasonable only if it 
is based upon a bona fide opinion, in writing, of an attorney licensed 
to practice within the United States stating that Iran does not have 
title or has only partial title to the asset. For purposes of this 
paragraph, the term holder shall include any person who possesses the 
property, or who, although not in physical possession of the property, 
has, by contract or otherwise, control over a third party who does in 
fact have physical possession of the property. A person is not a holder 
by virtue of being the beneficiary of an attachment, injunction or 
similar order.
    (d) Liabilities and property interests shall not be deemed to be 
contested solely because they are subject to an attachment, injunction, 
or other similar order.

[66 FR 38554, July 25, 2001]



Sec. 535.334  Act of the Government of Iran.

    For purposes of Sec. 535.216, an act of the Government of Iran, 
includes any acts ordered, authorized, allowed, approved, or ratified by 
the Government of Iran, its agencies, instrumentalities or controlled 
entities.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14336, Feb. 26, 1981]



Sec. 535.335  Claim arising out of events in Iran.

    For purposes of Sec. 535.216, a claim is one ``arising out of 
events'' of the type

[[Page 135]]

specified only if such event is the specific act that is the basis of 
the claim.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14336, Feb. 26, 1981]



Sec. 535.337  Funds.

    For purposes of this part, the term funds shall mean monies in 
trust, escrow and similar special funds held by non-banking 
institutions, currency and coins. It does not include accounts created 
under Sec. 535.568.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 30341, June 8, 1981]



                        Subpart D_Interpretations



Sec. 535.401  Reference to amended sections.

    Reference to any section of this part or to any regulation, ruling, 
order, instruction, direction or license issued pursuant to this part 
shall be deemed to refer to the same as currently amended unless 
otherwise so specified.

[45 FR 24433, Apr. 9, 1980]



Sec. 535.402  Effect of amendment of sections of this part or of 
other orders, etc.

    Any amendment, modification, or revocation of any section of this 
part or of any order, regulation, ruling, instruction, or license issued 
by or under the direction of the Secretary of the Treasury pursuant to 
section 203 of the International Emergency Economic Powers Act shall 
not, unless otherwise specifically provided, be deemed to affect any act 
done or omitted to be done, or any suit or proceeding had or commenced 
in any civil or criminal case, prior to such amendment, modification, or 
revocation and all penalties, forfeitures, and liabilities under any 
such order, regulation, ruling, instruction or license shall continue 
and may be enforced as if such amendment, modification, or revocation 
had not been made.

[45 FR 24433, Apr. 9, 1980]



Sec. 535.403  Termination and acquisition of an interest of Iran
or an Iranian entity.

    (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 Iran or an Iranian entity, such property shall no 
longer be deemed to be property in which Iran or an Iranian entity has 
or has had an interest, unless there exists in the property another such 
interest the transfer of which has not been effected pursuant to license 
or other authorization.
    (b) Unless otherwise specifically provided in a license or 
authorization contained in or issued pursuant to this part, if property 
(including any property interest) is transferred to Iran or an Iranian 
interest, such property shall be deemed to be property in which there 
exists an interest of Iran or an Iranian entity.

[45 FR 24433, Apr. 9, 1980]



Sec. 535.413  Transfers between dollar accounts held for foreign banks.

    Transfers authorized by Sec. 535.901 include transfers by order of a 
non-Iranian foreign bank from its account in a domestic bank (directly 
or through a foreign branch or subsidiary of a domestic bank) to an 
account held by a domestic bank (directly or through a foreign branch or 
subsidiary) for a second non-Iranian foreign bank which in turn credits 
an account held by it abroad for Iran. For the purposes of this section, 
a non-Iranian foreign bank means a bank which is not a person subject to 
the jurisdiction of the United States.

[44 FR 66833, Nov. 21, 1979]



Sec. 535.414  Payments to blocked accounts under Sec. 535.508.

    (a) Section 535.508 does not authorize any transfer from a blocked 
account within the United States to an account held by any bank outside 
the United States or any other payment into a

[[Page 136]]

blocked account outside the United States.
    (b) Section 535.508 only authorizes payment into a blocked account 
held by a domestic bank as defined by Sec. 535.320.

[44 FR 67617, Nov. 26, 1979]



Sec. 535.415  Payment by Iranian entities of obligations to persons
within the United States.

    A person receiving payment under Sec. 535.904 may distribute all or 
part of that payment to anyone: Provided, That any such payment to Iran 
or an Iranian entity must be to a blocked account in a domestic bank.

[44 FR 67617, Nov. 26, 1979]



Sec. 535.416  Letters of credit.

    (a) Question. Prior to the effective date, a bank subject to the 
jurisdiction of the United States has issued or confirmed a documentary 
letter of credit for a non-Iranian account party in favor of an Iranian 
entity. Can payment be made upon presentation of documentary drafts?
    Answer. Yes, provided payment is made into a blocked account in a 
domestic bank.
    (b) Question. Prior to the effective date, a domestic branch of a 
bank organized or incorporated under the laws of the United States has 
issued or confirmed a documentary letter of credit for a non-Iranian 
account party in favor of an Iranian entity. Payment is to be made 
through a foreign branch of the bank. Can payment be made upon 
presentation of documentary drafts?
    Answer. Yes, provided payment is made into a blocked account in a 
domestic bank.
    (c) Question. Prior to the effective date, a foreign bank confirms a 
documentary letter of credit issued by its U.S. agency or branch for a 
non-Iranian account party in favor of an Iranian entity. Can the U.S. 
agency or branch of the foreign bank transfer funds to the foreign bank 
in connection with that foreign bank's payment under the letter of 
credit?
    Answer. No, the U.S. agency's payment is blocked, unless the foreign 
bank made payment to the Iranian entity prior to the effective date.
    (d) Question. Prior to the effective date, a bank subject to the 
jurisdiction of the United States has issued or confirmed a documentary 
letter of credit for a non-Iranian account party in favor of an Iranian 
entity. The Iranian entity presents documentry drafts which are 
deficient in some detail. May the non-Iranian account party waive the 
documentary deficiency and authorize the bank to make payment?
    Answer. Yes, provided payment is made into a blocked account in a 
domestic bank. However, the non-Iranian account party is not obligated 
by these Regulations to exercise a waiver of documentary deficiencies. 
In cases where such a waiver is not exercised, the bank's payment 
obligation, if any, under the letter of credit remains blocked, as does 
any obligation, contingent or otherwise, of the account party. The 
documents are also blocked.
    (e) Question. Prior to the effective date, a bank subject to the 
jurisdiction of the United States has issued or confirmed a documentary 
letter of credit for a non-Iranian account party in favor of an Iranian 
entity. The Iranian entity does not make timely, complete, or proper 
presentation of documents, and the letter of credit expires. Does there 
remain a blocked payment obligation held by the bank?
    Answer. No, but any documents held by the bank continue to be 
blocked. It is also possible that the account party still has a related 
obligation to the Iranian entity and any such obligation would be 
blocked.
    (f) Question. A bank subject to the jurisdiction of the United 
States has issued a letter of credit for a U.S. account party in favor 
of an Iranian entity. The letter of credit is confirmed by a foreign 
bank. Prior to or after the effective date, the Iranian entity presents 
documents to the U.S. issuing bank. Payment is deferred. After the 
effective date, the Iranian entity requests that the issuing bank either 
return the documents to the Iranian entity or transfer them to the 
confirming bank. Can the issuing bank do so?
    Answer. No. The U.S. issuing bank can neither return nor transfer 
the documents without a license. The documents constitute blocked 
property under the Regulations.

[[Page 137]]

    (g) Question. Prior to the effective date, a bank subject to the 
jurisdiction of the United States has issued or confirmed a documentary 
letter of credit for a non-Iranian account party in favor of an Iranian 
entity. The Iranian entity presents documentary drafts which are 
deficient in some detail. May the non-Iranian account party waive the 
documentary deficiency and make payment?
    Answer. Yes, provided payment is made into a blocked account in a 
domestic bank. However, the non-Iranian account party is not obligated 
by these Regulations to exercise a waiver of documentary deficiencies. 
In cases where such a waiver is not exercised, the amount of the payment 
held by the account party is blocked.

[44 FR 69287, Dec. 3, 1979, as amended at 44 FR 75353, Dec. 19, 1979]



Sec. 535.420  Transfers of accounts under Sec. 535.508 from demand 
to interest-bearing status.

    Section 535.508 authorizes transfer of a blocked demand deposit 
account to interest-bearing status at the instruction of the Iranian 
depositor at any time.

[44 FR 76784, Dec. 28, 1979]



Sec. 535.421  Prior contractual commitments not a basis for licensing.

    Specific licenses are not issued on the basis that an unlicensed 
firm commitment or payment has been made in connection with a 
transaction prohibited by this part. Contractual commitments to engage 
in transactions subject to the prohibitions of this part should not be 
made, unless the contract specifically states that the transaction is 
authorized by general license or that it is subject to the issuance of a 
specific license.

[45 FR 24433, Apr. 9, 1980]



Sec. 535.433  Central Bank of Iran.

    The Central Bank of Iran (Bank Markazi Iran) is an agency, 
instrumentality and controlled entity of the Government of Iran for all 
purposes under this part.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14336, Feb. 26, 1981]



Sec. 535.437  Effect on other authorities.

    Nothing in this part in any way relieves any persons subject to the 
jurisdiction of the United States from securing licenses or other 
authorizations as required from the Secretary of State, the Secretary of 
Commerce or other relevant agency prior to executing the transactions 
authorized or directed by this part. This includes licenses for 
transactions involving military equipment.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14336, Feb. 26, 1981]



Sec. 535.438  Standby letters of credit, performance or payment bonds 
and similar obligations.

    (a) Nothing contained in Secs. 535.212, 535.213 and 535.214 or in 
any other provision or revocation or amendment of any provision in this 
part affects the prohibition in Sec. 535.201 and the licensing procedure 
in Sec. 535.568 relating to certain standby letters of credit, 
performance bonds and similar obligations. The term funds and securities 
as used in this part does not include substitute blocked accounts 
established under section 535.568 relating to standby letters of credit, 
performance or payment bonds and similar obligations.
    (b) No transfer requirement under Sec. 535.213 or Sec. 535.214 shall 
be deemed to authorize or compel any payment or transfer of any 
obligation under a standby letter of credit, performance bond or similar 
obligation as to which a blocked account has been established

[[Page 138]]

pursuant to Sec. 535.568 or as to which payment is prohibited under an 
injunction obtained by the account party.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14336, Feb. 26, 1981, as amended at 46 FR 30341, June 8, 1981]



Sec. 535.440  Commercially reasonable interest rates.

    (a) For purposes of Secs. 535.212 and 535.213, what is meant by 
``commercially reasonable rates'' depends on the particular 
circumstances. In the case of time or savings deposits, the 
``commercially reasonable rate'' is that rate provided for by the 
deposit agreement or applicable law. With respect to other obligations 
where the rate remains to be determined, it is presently expected that 
the ``commercially reasonable rate'' will be the rate agreed upon by the 
bank and Iran. However, where a deposit has in fact operated as a demand 
account under Treasury license, it would be appropriate to treat the 
deposit for purposes of Secs. 535.212 and 535.213 as a non-interest 
bearing account. Furthermore, in the event that the Iran-U.S Claims 
Tribunal (the ``Tribunal'') determines that interest additional to that 
agreed upon between the bank and Iran, or compensation or damages in 
lieu of interest, is due Iran, then that amount determined by the 
Tribunal to be owing to Iran shall be transferred as, or as part of, the 
interest at ``commercially reasonable rates'' required to be transferred 
pursuant to Secs. 535.212 and 535.213, regardless of any settlement 
between the bank and Iran or any release or discharge that Iran may have 
given the bank.
    (b) The contingent interest of Iran in any liability for further or 
additional interest, or compensation or damages in lieu of interest, 
that may be claimed in, and determined by the Tribunal, constitutes an 
interest of Iran in property for purposes of this part, and no agreement 
between Iran and any person subject to the jurisdiction of the United 
States is effective to extinguish such Iranian interest in property 
unless so specifically licensed by the Treasury Department.
    (c) For deposits held as time deposits, no penalty shall be imposed 
for early withdrawal. (In this connection, the Board of Governors of the 
Federal Reserve System has determined that application of the penalty 
for early withdrawal of time deposits transferred before maturity, 
pursuant to Sec. 535.213 is not required.)

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205; 45 FR 24099; E.O. 12211, 45 FR 26605; E.O. 12276, 46 
FR 7913; E.O. 12277, 46 FR 7915; E.O. 12278, 46 FR 7917; E.O. 12279, 46 
FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 FR 7923; E.O. 12282, 46 
FR 7925; and E.O. 12294, 46 FR 14111)

[48 FR 253, Jan. 4, 1983]



Sec. 535.441  Settlement Agreement regarding small claims.

    (a) Award No. 483 of June 22, 1990 of the Iran-United States Claims 
Tribunal, approving and giving effect to the Settlement Agreement in 
Claims of Less Than $250,000, Case No. 86 and Case No. B38, dated May 
13, 1990 (the ``Settlement Agreement''), constitutes a determination by 
the Iran-United States Claims Tribunal of all claims encompassed therein 
within the meaning of Sec. 535.222(f) of this part. In accordance with 
Sec. 535.222(f), upon payment from the Security Account to the United 
States, the Settlement Agreement shall operate as a final resolution and 
discharge of all claims encompassed by the Settlement Agreement for all 
purposes. All such claims shall be subject to the exclusive jurisdiction 
of the Foreign Claims Settlement Commission on the terms established in 
the Settlement Agreement and by the provisions of Public Law 99-93, 
Title V, Aug. 16, 1985, 99 Stat. 437, applicable to en bloc settlements 
of claims of U.S. nationals against Iran.
    (b) Pursuant to the Settlement Agreement, the private claims subject 
to that agreement and this part are ``* * * claims of less than $250,000 
each, which have been filed with the Tribunal by the United States on 
behalf of U.S. nationals, which claims are included in Cases Nos. 10001 
through 12785, and which are still pending, * * * ,'' and ``* * * claims 
of U.S. nationals for less than $250,000 which have been

[[Page 139]]

submitted to the United States Department of State but were not timely 
filed with the Tribunal, as well as claims of U.S. nationals for less 
than $250,000 which have been either withdrawn by the Claimants or 
dismissed by the Tribunal for lack of jurisdiction, * * * .'' Settlement 
Agreement, Art. I(A).

[55 FR 40831, Oct. 5, 1990]



  Subpart E_Licenses, Authorizations and Statements of Licensing Policy



Sec. 535.501  General and specific licensing procedures.

    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.

[68 FR 53657, Sept. 11, 2003]



Sec. 535.502  Effect of license or authorization.

    (a) No license or other authorization contained in this part or 
otherwise issued by or under the direction of the Secretary of the 
Treasury pursuant to section 203 of the International Emergency Economic 
Powers Act, shall be deemed to authorize or validate any transaction 
effected prior to the issuance thereof, unless such license or other 
authorization specifically so provides.
    (b) No regulation, ruling, instruction, or license authorizes a 
transaction prohibited under this part unless the regulation, ruling, 
instruction, or license is issued by the Treasury Department and 
specifically refers to this part. No regulation, ruling, instruction or 
license referring to this part shall be deemed to authorize any 
transaction prohibited by any provision of parts 500, 505, 515, 520 or 
530 of this chapter unless the regulation, ruling, instruction or 
license specifically refers to such provision.
    (c) Any regulation, ruling, instruction or license authorizing a 
transaction otherwise prohibited under this part has the effect of 
removing a prohibition or prohibitions in subpart B from the 
transaction, but only to the extent specifically stated by its terms. 
Unless the regulation, ruling, instruction or license otherwise 
specifies, such an authorization does not create any right, duty, 
obligation, claim, or interest in, or with respect to, any property 
which would not otherwise exist under ordinary principles of law.

[44 FR 66833, Nov. 21, 1979, as amended at 44 FR 75353, Dec. 19, 1979]



Sec. 535.503  Exclusion from licenses and authorizations.

    The Secretary of the Treasury reserves the right to exclude any 
person from the operation of any license or from the privileges therein 
conferred or to restrict the applicability thereof with respect to 
particular persons, transactions or property or classes thereof. Such 
action shall be binding upon all persons receiving actual notice or 
constructive notice thereof.

[44 FR 66833, Nov. 21, 1979]



Sec. 535.504  Certain judicial proceedings with respect to property 
of Iran or Iranian entities.

    (a) Subject to the limitations of paragraphs (b) and (c) of this 
section and Sec. 535.222, judicial proceedings are authorized with 
respect to property in which on or after 8:10 a.m., e.s.t., November 14, 
1979, there has existed an interest of Iran or an Iranian entity.
    (b) This section does not authorize:
    (1) Any pre-judgment attachment or any other proceeding of similar 
or analogous effect pertaining to any property (and any income earned 
thereon) subject to the provisions of Secs. 535.211, 535.212, 535.213, 
535.214 or 535.215 on January 19, 1981, including, but not limited to, a 
temporary restraining order or preliminary injunction, which operates as 
a restraint on property, for purposes of holding it within the 
jurisdiction of a court, or otherwise;
    (2) Any payment or delivery out of a blocked account based upon a 
judicial proceeding, pertaining to any property subject to the 
provisions of Sec. 535.211, Sec. 535.212, Sec. 535.213, Sec. 535.214 or 
Sec. 535.215 on January 19, 1981;
    (3)(i) Any final judicial judgment or order (A) permanently 
enjoining, (B) terminating or nullifying, or (C) otherwise permanently 
disposing of any interest of Iran in any standby letter of

[[Page 140]]

credit, performance bond or similar obligation. Any license authorizing 
such action is hereby revoked and withdrawn. This revocation and 
withdrawal of prior licenses prohibits judgments or orders that are 
within the terms of this paragraph (b)(3)(i), including any such 
judgments or orders which may have been previously entered but which had 
not become final by July 2, 1982, through the conclusion of appellate 
proceedings or the expiration of the time for appeal.
    (ii) Nothing in this paragraph (b)(3) shall prohibit the assertion 
of any defense, set-off or counterclaim in any pending or subsequent 
judicial proceeding commenced by the Government of Iran, any political 
subdivision of Iran, or any agency, instrumentality or entity owned or 
controlled by the Government of Iran or any political subdivision 
thereof.
    (iii) Nothing in this paragraph (b)(3) shall preclude the 
commencement of an action for the purpose of tolling the period of 
limitations for commencement of such action.
    (iv) Nothing in this paragraph (b)(3) shall require dismissal of any 
action for want of prosecution.
    (c) For purposes of this section, contested and contingent 
liabilities and property interests of the Government of Iran, its 
agencies, instrumentalities, or controlled entities, including debts, 
shall be deemed to be subject to Sec. 535.215.
    (d) A judicial proceeding is not authorized by this section if it is 
based on transactions which violated the prohibitions of this part.
    (e) Judicial proceedings to obtain attachments on standby letters of 
credit, performance bonds or similar obligations and on substitute 
blocked accounts established under Sec. 535.568 relating to standby 
letters of credit, performance bonds and similar obligations are not 
authorized or licensed.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14336, Feb. 26, 1981, as amended at 46 FR 26477, May 13, 1981; 47 
FR 29529, July 7, 1982; 47 FR 55482, Dec. 10, 1982; 48 FR 57129, Dec. 
28, 1983]



Sec. 535.508  Payments to blocked accounts in domestic banks.

    (a) Any payment or transfer of credit, including any payment or 
transfer by any U.S.-owned or controlled foreign firm or branch to a 
blocked account in a domestic bank in the name of Iran or any Iranian 
entity is hereby authorized: Provided, Such payment or transfer shall 
not be made from any blocked account if such payment or transfer 
represents, directly or indirectly, a transfer of the interest of Iran 
or an Iranian entity to any other country or person.
    (b) This section does not authorize:
    (1) Any payment or transfer to any blocked account held in a name 
other than that of Iran or the Iranian entity who is the ultimate 
beneficiary of such payment or transfer; or
    (2) Any foreign exchange transaction including, but not by way of 
limitation, any transfer of credit, or payment of an obligation, 
expressed in terms of the currency of any foreign country.
    (c) This section does not authorize any payment or transfer of 
credit comprising an integral part of a transaction which cannot be 
effected without the subsequent issuance of a further license.
    (d) This section does not authorize the crediting of the proceeds of 
the sale of securities held in a blocked account or a sub-account 
thereof, or the income derived from such securities to a blocked account 
or sub-account under any name or designation which differs from the name 
or designation of the specific blocked account or sub-account in which 
such securities were held.
    (e) This section does not authorize any payment or transfer from a

[[Page 141]]

blocked account in a domestic bank to a blocked account held under any 
name or designation which differs from the name or designation of the 
specified blocked account or sub-account from which the payment or 
transfer is made.

    Note to Sec. 535.508: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers.

[44 FR 66590, Nov. 20, 1979, as amended at 62 FR 45107, Aug. 25, 1997]



Sec. 535.528  Certain transactions with respect to Iranian patents,
trademarks and copyrights authorized.

    (a) The following transactions by any person subject to the 
jurisdiction of the United States are authorized:
    (1) The filing and prosecution of any application for an Iranian 
patent, trademark or copyright, or for the renewal thereof;
    (2) The receipt of any Iranian patent, trademark or copyright;
    (3) The filing and prosecution of opposition or infringement 
proceedings with respect to any Iranian patent, trademark, or copyright, 
and the prosecution of a defense to any such proceedings;
    (4) The payment of fees currently due to the government of Iran, 
either directly or through an attorney or representative, in connection 
with any of the transactions authorized by paragraphs (a)(1), (2), and 
(3) of this section or for the maintenance of any Iranian patent, 
trademark or copyright; and
    (5) The payment of reasonable and customary fees currently due to 
attorneys or representatives in Iran incurred in connection with any of 
the transactions authorized by paragraphs (a)(1), (2), (3) or (4) of 
this section.
    (b) Payments effected pursuant to the terms of paragraphs (a)(4) and 
(5) of this section may not be made from any blocked account.
    (c) As used in this section the term Iranian patent, trademark, or 
copyright shall mean any patent, petty patent, design patent, trademark 
or copyright issued by Iran.

[45 FR 29288, May 2, 1980]



Sec. 535.531  Payment of certain checks and drafts.

    (a) A bank subject to the jurisdiction of the United States is 
hereby authorized to make payments from blocked accounts with such 
banking institution of checks and drafts drawn or issued prior to the 
effective date, Provided, That:
    (1) The amount involved in any one payment, acceptance, or debit 
does not exceed $3000; or
    (2) The check or draft was within the United States in process of 
collection by a domestic bank on or prior to the effective date and does 
not exceed $50,000.
    (3) The authorization contained in this paragraph shall expire at 
the close of business on January 14, 1980.
    (b) A bank subject to the jurisdiction of the United States as its 
own obligation may make payment to a person subject to the jurisdiction 
of the United States who is the beneficiary of any letter of credit 
issued or confirmed by it, or on a draft accepted by it, prior to the 
effective date, where the letter of credit was issued or confirmed on 
behalf of Iran or an Iranian entity, Provided, That:
    (1) Notwithstanding the provisions of Sec. 535.902, no blocked 
account may at any time be debited in connection with such a payment.
    (2) Such a payment shall give the bank making payment no special 
priority or other right to blocked accounts it holds in the event that 
such blocked accounts are vested or otherwise lawfully used in 
connection with a settlement of claims.
    (3) Nothing in this paragraph prevents payment being made to the 
beneficiary of any draft or letter of credit or to any banking 
institution pursuant to Sec. 535.904.
    (c) The office will consider on a case-by-case basis, without any 
commitment on its part to authorize any transaction or class of 
transactions, applications for specific licenses to make payments from 
blocked accounts of documentary drafts drawn under irrevocable letters 
of credit issued or confirmed by a domestic bank prior to the effective 
date, in favor of any person subject to the jurisdiction of the United 
States. Any bank or payee submitting such an application should include 
data on all such letters of credit in which it is involved. Applications

[[Page 142]]

should be submitted not later than January 10, 1980.
    (d) Paragraphs (a) and (b) of this section do not authorize any 
payment to Iran or an Iranian entity except payments into a blocked 
account in a domestic bank unless Iran or the Iranian entity is 
otherwise licensed to receive such payment.

[44 FR 75352, Dec. 19, 1979]



Sec. 535.532  Completion of certain securities transactions.

    (a) Banking institutions within the United States are hereby 
authorized to complete, on or before November 21, 1979, purchases and 
sales made prior to the effective date of securities purchased or sold 
for the account of Iran or an Iranian entity provided the following 
terms and conditions are complied with, respectively.
    (1) The proceeds of such sale are credited to a blocked account in a 
banking institution in the name of the person for whose account the sale 
was made; and
    (2) The securities so purchased are held in a blocked account in a 
banking institution in the name of the person for whose account the 
purchase was made.
    (b) This section does not authorize the crediting of the proceeds of 
the sale of securities held in a blocked account or a sub-account 
thereof, to a blocked account or sub-account under any name or 
designation which differs from the name or designation of the specific 
blocked account or sub-account in which such securities were held.



Sec. 535.540  Disposition of certain tangible property.

    (a) Specific licenses may be issued in appropriate cases at the 
discretion of the Secretary of the Treasury for the public sale and 
transfer of certain tangible property that is encumbered or contested 
within the meaning of Sec. 535.333 (b) and (c) and that, because it is 
blocked by Sec. 535.201, may not be sold or transferred without a 
specific license, provided that each of the following conditions is met:
    (1) The holder or supplier of the property has made a good faith 
effort over a reasonable period of time to obtain payment of any amounts 
owed by Iran or the Iranian entity, or adequate assurance of such 
payment;
    (2) Neither payment nor adequate assurance of payment has been 
received;
    (3) The license applicant has, under provisions of law applicable 
prior to November 14, 1979, a right to sell, or reclaim and sell, such 
property by methods not requiring judicial proceedings, and would be 
able to exercise such right under applicable law, but for the 
prohibitions in this part, and
    (4) The license applicant shall enter into an indemnification 
agreement acceptable to the United States providing for the applicant to 
indemnify the United States, in an amount up to 150 percent of the 
proceeds of sale, for any monetary loss which may accrue to the United 
States from a decision by the Iran-U.S. Claims Tribunal that the United 
States is liable to Iran for damages that are in any way attributable to 
the issuance of such license. In the event the applicant and those 
acting for or on its behalf are the only bidders on the property, the 
United States shall have the right to establish a reasonable 
indemnification amount.
    (b) An applicant for a license under this section shall provide the 
Office of Foreign Assets Control with documentation on the points 
enumerated in paragraph (a) of this section. The applicant normally will 
be required to submit an opinion of legal counsel regarding the legal 
right claimed under paragraph (a)(3) of this section.
    (c) Any sale of property licensed under this section shall be at 
public auction and shall be made in good faith in a commercially 
reasonable manner. Notwithstanding any provision of State law, the 
license applicant shall give detailed notice to the appropriate Iranian 
entity of the proposed sale or transfer at least 30 days prior to the 
sale or other transfer. In addition, if the license applicant has filed 
a claim with the Iran-U.S. Claims Tribunal, the license applicant shall 
give at least 30 days' advance notice of the sale to the Tribunal.
    (d) The disposition of the proceeds of any sale licensed under this 
section, minus such reasonable costs of sale as are authorized by 
applicable law (which will be licensed to be deducted), shall

[[Page 143]]

be in accordance with either of the following methods:
    (1) Deposit into a separate blocked, interest-bearing account at a 
domestic bank in the name of the licensed applicant; or
    (2) Any reasonable disposition in accordance with provisions of law 
applicable prior to November 14, 1979, which may include unrestricted 
use of all or a portion of the proceeds, provided that the applicant 
shall post a bond or establish a standby letter of credit, subject to 
the prior approval of the Secretary of the Treasury, in favor of the 
United States in the amount of the proceeds of sale, prior to any such 
disposition.
    (e) For purposes of this section, the term proceeds means any gross 
amount of money or other value realized from the sale. The proceeds 
shall include any amount equal to any debt owed by Iran which may have 
constituted all or part of a successful bid at the licensed sale.
    (f) The proceeds of any such sale shall be deemed to be property 
governed by Sec. 535.215 of this part. Any part of the proceeds that 
constitutes Iranian property which under Sec. 535.215 is to be 
transferred to Iran shall be so transferred in accordance with that 
section.
    (g) Any license pursuant to this section may be granted subject to 
conditions deemed appropriate by the Secretary of the Treasury.
    (h) Any person licensed pursuant to this section is required to 
submit a report to the Chief of Licensing, Office of Foreign Assets 
Control, within ten business days of the licensed sale or other 
transfer, providing a full accounting of the transaction, including the 
costs, any payment to lienholders or others, including payments to Iran 
or Iranian entities, and documentation concerning any blocked account 
established or payments made.

(Sec. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26605; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; and E.O. 12294, 46 FR 14111)

[47 FR 31683, July 22, 1982]



Sec. 535.566  Unblocking of foreign currency deposits held by 
U.S.-owned or controlled foreign firms.

    Deposits held abroad in currencies other than U.S. dollars by 
branches and subsidiaries of persons subject to the jurisdiction of the 
United States are unblocked, provided however that conversions of 
blocked dollar deposits into foreign currencies are not authorized.

[44 FR 66833, Nov. 21, 1979]



Sec. 535.567  Payment under advised letters of credit.

    (a) Specific licenses may be issued for presentation, acceptance, or 
payment of documentary drafts under a letter of credit opened by an 
Iranian entity and advised by a domestic bank or an Iranian bank subject 
to the jurisdiction of the United States, provided, That:
    (1) The letter of credit was advised prior to the effective date;
    (2) The property which is the subject of the payment under the 
letter of credit was not in the possession or control of the exporter on 
or after the effective date;
    (3) The Beneficiary is a person subject to the jurisdiction of the 
United States.
    (b) As a general matter, licenses will not be issued if the amount 
to be paid to a single payee exceeds $500,000, or if hardship cannot be 
shown.

[44 FR 75354, Dec. 19, 1979]



Sec. 535.568  Certain standby letters of credit and performance bonds.

    (a) Notwithstanding any other provision of law, payment into a 
blocked account in a domestic bank by an issuing or confirming bank 
under a standby letter of credit in favor of an Iranian entity is 
prohibited by Sec. 535.201 and not authorized, notwithstanding the 
provisions of Sec. 535.508, if either:
    (1) A specific license has been issued pursuant to the provisions of 
paragraph (b) of this section, or
    (2) Eight business days have not expired after notice to the account 
party pursuant to paragraph (b) of this section.
    (b) Whenever an issuing or confirming bank shall receive such demand 
for payment under a standby letter of credit, it shall promptly notify

[[Page 144]]

the person for whose account the credit was opened. Such person may then 
apply within five business days for a specific license authorizing the 
account party to establish a blocked account on its books in the name of 
the Iranian entity in the amount payable under the credit, in lieu of 
payment by the issuing or confirming bank into a blocked account and 
reimbursement therefor by the account party.
    (c) Where there is outstanding a demand for payment under a standby 
letter of credit, and the issuing or confirming bank has been enjoined 
from making payment, upon removal of the injunction, the person for 
whose account the credit was opened may apply for a specific license for 
the same purpose and in the same manner as that set forth in paragraph 
(b) of this section. The issuing or confirming bank shall not make 
payment under the standby letter of credit unless:
    (1) Eight business days have expired since the bank has received 
notice of the removal of the injunction and;
    (2) A specific license issued to the account party pursuant to the 
provisions of this paragraph has not been presented to the bank.
    (d) If necessary to assure the availability of the funds blocked, 
the Secretary may at any time require the payment of the amounts due 
under any letter of credit described in paragraph (a) of this section 
into a blocked account in a domestic bank or the supplying of any form 
of security deemed necessary.
    (e) Nothing in this section precludes any person for whose account a 
standby letter of credit was opened or any other person from at any time 
contesting the legality of the demand from the Iranian entity or from 
raising any other legal defense to payment under the standby letter of 
credit.
    (f) This section does not affect the obligation of the various 
parties of the instruments covered by this section if the instruments 
and payment thereunder are subsequently unblocked.
    (g) For the purposes of this section, the term standby letter of 
credit shall mean a letter of credit securing performance of, or 
repayment of, any advance payments of deposits, under a contract with 
Iran or an Iranian entity, or any similar obligation in the nature of a 
performance bond.
    (h) The regulations do not authorize any person subject to the 
jurisdiction of the United States to reimburse a non-U.S. bank for 
payment to Iran or an Iranian entity under a standby letter of credit, 
except by payment into a blocked account in accordance with Sec. 535.508 
or paragraph (b) or (c) of this section.
    (i) A person receiving a specific license under paragraph (b) or (c) 
of this section shall certify to the Office of Foreign Assets Control 
within five business days after receipt of that license that it has 
established the blocked account on its books as provided for in those 
paragraphs. However, in appropriate cases, this time may be extended 
upon application to the Office of Foreign Assets Control when the 
account party has filed a petition with an appropriate court seeking a 
judicial order barring payment by the issuing or confirming bank.
    (j) The extension or renewal of a standby letter of credit is 
authorized.
    (k) All specific licenses previously issued under this section to 
account parties to standby letters of credit are revoked, effective 
February 28, 1991, unless the license holder submits documentation to 
the Office of Foreign Assets Control establishing that the specific 
license pertains to a standby letter of credit obligation that (1) is at 
issue in any claim brought before the Iran-United States Claims Tribunal 
(``Tribunal''), (2) is or was at issue in any claim that the Tribunal 
resolves, or has resolved, on the merits in favor of the account party, 
or (3) was at issue in a matter that was settled by the parties. The 
documentation required for such a showing may include such items as a 
copy of a Tribunal Award, a copy of a signed settlement agreement, or 
copies of cover pages of recent filings in pending Tribunal cases.

[47 FR 12339, Mar. 23, 1982, as amended at 56 FR 6546, Feb. 15, 1991]



Sec. 535.569  Licensed letter of credit transactions; forwarding
of documents.

    When payment of a letter of credit issued, advised, or confirmed by 
a bank subject to the jurisdiction of the

[[Page 145]]

United States is authorized by either general or specific license, the 
forwarding of the letter of credit documents to the account party is 
authorized.

[45 FR 1877, Jan. 9, 1980]



Sec. 535.576  Payment of non-dollar letters of credit to Iran.

    Notwithstanding the prohibitions of Secs. 535.201 and 535.206(a)(4), 
payment of existing non-dollar letters of credit in favor of Iranian 
entities or any person in Iran by any foreign branch or subsidiary of a 
U.S. firm is authorized, provided that the credit was opened prior to 
the respective effective date.

[45 FR 29288, May 2, 1980]



Sec. 535.579  Authorization of new transactions concerning certain 
Iranian property.

    (a) Transactions involving property in which Iran or an Iranian 
entity has an interest are authorized where:
    (1) The property comes within the jurisdiction of the United States 
or into the control or possession of any person subject to the 
jurisdiction of the United States after January 19, 1981, or
    (2) The interest in the property of Iran or an Iranian entity (e.g. 
exports consigned to Iran or an Iranian entity) arises after January 19, 
1981.
    (b) Transactions involving standby letters of credit, performance or 
payment bonds and similar obligations, entered into prior to January 20, 
1981, described in Sec. 535.568 remain subject to the prohibitions and 
procedures contained in Secs. 535.201 and 535.568.
    (c) Property not blocked under Sec. 535.201 as of January 19, 1981, 
in which the Government of Iran or an Iranian entity has an interest, 
which after that date is or becomes subject to the jurisdiction of the 
United States or comes within the control or possession of a person 
subject to the jurisdiction of the United States for the express purpose 
of settling claims against Iran or Iranian entities, is excluded from 
any authorization in this part for any attachment, injunction or other 
order of similar or analogous effect and any such attachment, injunction 
or order is prohibited by Secs. 535.201 and 535.203.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14336, Feb. 26, 1981]



Sec. 535.580  Necessary living expenses of relatives of the former
Shah of Iran.

    The transfer, payment or withdrawal of property described in 
Sec. 535.217 is authorized to the extent necessary to pay living 
expenses of any individual listed in that section. Living expenses for 
this purpose shall include food, housing, transportation, security and 
other personal expenses.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12211, 45 FR 26685; E.O. 12284, 46 FR 7929)

[46 FR 14330, Feb. 26, 1981]



                            Subpart F_Reports



Sec. 535.601  Records and reports.

    For provisions relating to records and reports, see subpart C of 
part 501 of this chapter.

[62 FR 45107, Aug. 25, 1997]



                           Subpart G_Penalties



Sec. 535.701  Penalties.

    (a) Attention is directed to section 206 of the International 
Emergency Economic Powers Act (the ``Act'') (50 U.S.C. 1705), which is 
applicable to violations 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 Act.
    (1) A civil penalty not to exceed the amount set forth in Section 
206 of the Act may be imposed on any person who violates, attempts to 
violate, conspires to violate, or causes a violation of any license, 
order, regulation, or prohibition issued under the Act.

    Note to paragraph (a)(1): As of January 15, 2017, the applicable 
maximum civil penalty per violation of the Act is the greater of

[[Page 146]]

$289,238 or an amount that is twice the amount of the transaction that 
is the basis of the violation with respect to which the penalty is 
imposed.

    (2) A person who willfully commits, willfully attempts to commit, or 
willfully conspires to commit, or aids or abets in the commission of a 
violation of any license, order, regulation, or prohibition shall, upon 
conviction, be fined not more than $1,000,000, or if a natural person, 
may be imprisoned for not more than 20 years, or both.
    (b) Adjustments to penalty amounts. (1) The civil penalties provided 
in the Act are subject to adjustment pursuant to the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, as amended, 
28 U.S.C. 2461 note).
    (2) The criminal penalties provided in the Act are subject to 
adjustment pursuant to 18 U.S.C. 3571.
    (c) Attention is also directed to 18 U.S.C. 1001, which provides 
that whoever, in any matter within the jurisdiction of any department or 
agency of the United States, knowingly and willfully falsifies, conceals 
or covers up by any trick, scheme, or device a material fact, or makes 
any false, fictitious or fraudulent statement or representation or makes 
or uses any false writing or document knowing the same to contain any 
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.
    (d) Attention is directed to 18 U.S.C. 2332d, as added by Public Law 
104-132, section 321, which provides that, except as provided in 
regulations issued by the Secretary of the Treasury, in consultation 
with the Secretary of State, a U.S. person, knowing or having reasonable 
cause to know that a country is designated under section 6(j) of the 
Export Administration Act, 50 U.S.C. App. 2405, as a country supporting 
international terrorism, engages in a financial transaction with the 
government of that country, shall be fined under title 18, United States 
Code, or imprisoned for not more than 10 years, or both.

[44 FR 65956, Nov. 15, 1979, as amended at 61 FR 43461, Aug. 23, 1996; 
61 FR 54938, Oct. 23, 1996; 62 FR 45107, Aug. 25, 1997; 71 FR 29252, May 
22, 2006; 73 FR 32651, June 10, 2008; 81 FR 43074, July 1, 2016; 82 FR 
10436, Feb. 10, 2017]



Sec. 535.702  Prepenalty notice.

    (a) When required. If the Director of the Office of Foreign Assets 
Control (hereinafter ``Director'') has reasonable cause 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, he shall 
issue to the person concerned a notice of his intent to impose a 
monetary penalty. The prepenalty notice shall be issued whether or not 
another agency has taken any action with respect to this matter.
    (b) Contents--(1) Facts of violation. The prepenalty notice shall:
    (i) Describe the violation.
    (ii) Specify the laws and regulations allegedly violated.
    (iii) State the amount of the proposed monetary penalty.
    (2) Right to make presentations. The prepenalty notice also shall 
inform the person of his right to make a written presentation within 
thirty (30) days of mailing of the notice as to why a monetary penalty 
should not be imposed, or, if imposed, why it should be in a lesser 
amount than proposed.

[53 FR 7356, Mar. 8, 1988]



Sec. 535.703  Presentation responding to prepenalty notice.

    (a) Time within which to respond. The named person shall have 30 
days from the date of mailing of the prepenalty notice to make a written 
presentation to the Director.
    (b) Form and contents of written presentation. The written 
presentation need not be in any particular form, but shall contain 
information sufficient to indicate that it is in response to the

[[Page 147]]

prepenalty notice. It should contain responses to the allegations in the 
prepenalty notice and set forth the reasons why the person believes the 
penalty should not be imposed or, if imposed, why it should be in a 
lesser amount than proposed.

[53 FR 7356, Mar. 8, 1988]



Sec. 535.704  Penalty notice.

    (a) No violation. If, after considering any presentations made in 
response to the prepenalty notice, the Director determines that there 
was no violation by the person named in the prepenalty notice, he 
promptly shall notify the person in writing of that determination and 
that no monetary penalty will be imposed.
    (b) Violation. If, after considering any presentations made in 
response to the prepenalty notice, the Director determines that there 
was a violation by the person named in the prepenalty notice, he 
promptly shall issue a written notice of the imposition of the monetary 
penalty to that person.

[53 FR 7356, Mar. 8, 1988]



Sec. 535.705  Administrative collection; referral to United States 
Department of Justice.

    In the event that the person named does not pay the penalty imposed 
pursuant to this part or make payment arrangements acceptable to the 
Director of the Office of Foreign Assets Control within 30 days of the 
date of mailing of the penalty notice, the matter may be referred for 
administrative collection measures by the Department of the Treasury or 
to the United States Department of Justice for appropriate action to 
recover the penalty in a civil suit in a Federal district court.

[70 FR 15762, Mar. 29, 2005]



                          Subpart H_Procedures



Sec. 535.801  Procedures.

    For license application procedures and procedures relating to 
amendments, modifications, or revocations of licenses; administrative 
decisions; rulemaking; and requests for documents pursuant to the 
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see 
part 501, subpart E, of this chapter.

[62 FR 45107, Aug. 25, 1997, as amended at 68 FR 53657, Sept. 11, 2003]



                   Subpart I_Miscellaneous Provisions



Sec. 535.901  Dollar accounts at banks abroad.

    Any domestic bank is hereby authorized to effect withdrawals or 
other transfers from any account held in the name of a non-Iranian bank 
located in a foreign country, provided such non-Iranian foreign bank is 
not a person subject to the jurisdiction of the United States.



Sec. 535.902  Set-offs by U.S. owned or controlled firms abroad.

    (a) Branches and subsidiaries in foreign countries of persons 
subject to the jurisdiction of the United States are licensed to set-off 
their claims against Iran or Iranian entities by debit to blocked 
accounts held by them for Iran or Iranian entities.
    (b) The general license in paragraph (a) of this section is revoked 
as of January 19, 1981.
    (c) For purposes of this section, set-offs include combinations of 
accounts and any similar actions.

(Secs. 201-207, 91 Stat. 1626, 50 U.S.C. 1701-1706; E.O. 12170, 44 FR 
65729; E.O. 12205, 45 FR 24099; E.O. 12211, 45 FR 26685; E.O. 12276, 46 
FR 7913; E.O. 12279, 46 FR 7919; E.O. 12280, 46 FR 7921; E.O. 12281, 46 
FR 7923; E.O. 12282, 46 FR 7925; E.O. 12283, 46 FR 7927, and E.O. 12294, 
46 FR 14111)

[46 FR 14337, Feb. 26, 1981]



Sec. 535.904  Payment by Iranian entities of obligations to persons
within the United States.

    The transfer of funds after the effective date by, through or to any 
U.S. banking institution or other person within the United States solely 
for purposes of payment of obligations by Iranian entities owed to 
persons within the United States is authorized: Provided, That there is 
no debit to a blocked account. Property is not blocked by virtue of 
being transferred or received pursuant to this section.

[44 FR 66591, Nov. 20, 1979]

[[Page 148]]



Sec. 535.905  Paperwork Reduction Act notice.

    For approval by the Office of Management and Budget (``OMB'') under 
the Paperwork Reduction Act of information collections relating to 
recordkeeping and reporting requirements, to licensing procedures 
(including those pursuant to statements of licensing policy), and to 
other procedures, see Sec. 501.901 of this chapter. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a valid control number 
assigned by OMB.

[62 FR 45107, Aug. 25, 1997]



PART 536_NARCOTICS TRAFFICKING SANCTIONS REGULATIONS--Table of Contents



      Subpart A_Relation of This Part to Other Laws and Regulations

Sec.
536.100  Licensing procedures.
536.101  Relation of this part to other laws and regulations.

                         Subpart B_Prohibitions

536.201  Prohibited transactions involving blocked property.
536.202  Effect of transfers violating the provisions of this part.
536.203  Holding of certain types of blocked property in interest-
          bearing accounts.
536.204  Evasions; attempts; conspiracies.
536.205  Exempt transactions.

                      Subpart C_General Definitions

536.301  Blocked account; blocked property.
536.302  Effective date.
536.303  Entity.
536.304  Foreign person.
536.305  General license.
536.306  Information and informational materials.
536.307  Interest.
536.308  License.
536.309  Person.
536.310  Property; property interest.
536.311  Narcotics trafficking.
536.312  Specially designated narcotics trafficker.
536.313  Specific license.
536.314  Transfer.
536.315  United States.
536.316  United States person; U.S. person.
536.317  U.S. financial institution.

                        Subpart D_Interpretations

536.401  Reference to amended sections.
536.402  Effect of amendment.
536.403  Termination and acquisition of an interest in blocked property.
536.404  Setoffs prohibited.
536.405  Transactions incidental to a licensed transaction.
536.406  Provision of services.
536.407  Offshore transactions.
536.408  Alleged change in ownership or control of an entity designated 
          as a specially designated narcotics trafficker.
536.409  Credit extended and cards issued by U.S. financial 
          institutions.

 Subpart E_Licenses, Authorizations, and Statements of Licensing Policy

536.501  Effect of license or authorization.
536.502  Exclusion from licenses and authorizations.
536.503  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
536.504  Investment and reinvestment of certain funds.
536.505  Entries in certain accounts for normal service charges 
          authorized.
536.506  Provision of certain legal services authorized.
536.507  Authorization of emergency medical services.

                            Subpart F_Reports

536.601  Records and reports.

                           Subpart G_Penalties

536.701  Penalties.
536.702  Prepenalty notice.
536.703  Response to prepenalty notice.
536.704  Penalty notice.
536.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H_Procedures

536.801  Procedures.
536.802  Delegation by the Secretary of the Treasury.

                    Subpart I_Paperwork Reduction Act

536.901  Paperwork Reduction Act notice.

    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. 12978, 60 FR 54579, 3 CFR, 1995 Comp., p. 
415; E.O. 13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 166.

    Source: 62 FR 9960, Mar. 5, 1997, unless otherwise noted.

[[Page 149]]



      Subpart A_Relation of This Part to Other Laws and Regulations



Sec. 536.100  Licensing procedures.

    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.

[68 FR 53657, Sept. 11, 2003]



Sec. 536.101  Relation of this part to other laws and regulations.

    (a) This part is separate from, and independent of, the other parts 
of this chapter with the exception of part 501 of this chapter, the 
recordkeeping and reporting requirements and license application and 
other procedures of which apply to this part. Differing foreign policy 
and national security contexts may result in differing interpretations 
of similar language among the parts of this chapter. No license or 
authorization contained in or issued pursuant to those other parts 
authorizes any transaction prohibited by this part. No license or 
authorization contained in or issued pursuant to any other provision of 
law or regulation authorizes any transaction prohibited by this part.
    (b) No license or authorization contained in or issued pursuant to 
this part relieves the involved parties from complying with any other 
applicable laws or regulations.

[62 FR 9960, Mar. 5, 1997, as amended at 62 FR 45107, Aug. 25, 1997]



                         Subpart B_Prohibitions



Sec. 536.201  Prohibited transactions involving blocked property.

    (a) Except as authorized by regulations, orders, directives, 
rulings, instructions, licenses, or otherwise, and notwithstanding any 
contract entered into or any license or permit granted prior to the 
effective date, no property or interests in property of a specially 
designated narcotics trafficker that are in the United States, that 
hereafter come within the United States, or that are or hereafter come 
within the possession or control of U.S. persons, including their 
overseas branches, may be transferred, paid, exported, withdrawn or 
otherwise dealt in.
    (b) When a transaction results in the blocking of funds at a 
financial institution pursuant to this section and a party to the 
transaction believes the funds have been blocked due to mistaken 
identity, that party may seek to have such funds unblocked pursuant to 
the administrative procedures set forth in Sec. 501.806 of this chapter.

[62 FR 9960, Mar. 5, 1997, as amended at 62 FR 45107, Aug. 25, 1997]



Sec. 536.202  Effect of transfers violating the provisions of this part.

    (a) Any transfer after the effective date, which is in violation of 
any provision of this part or of any regulation, order, directive, 
ruling, instruction, license, or other authorization hereunder and 
involves any property held in the name of a specially designated 
narcotics trafficker or in which a specially designated narcotics 
trafficker has or has had an interest since such date, 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.
    (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 interest in, any property held in the name of a specially 
designated narcotics trafficker or in which a specially designated 
narcotics trafficker has an interest, or has had an interest since such 
date, unless the person with whom such property is held or maintained, 
prior to such 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 render it enforceable 
to the same extent that it would be valid or enforceable but for the 
provisions of the International Emergency Economic Powers Act, this 
part, and any regulation, order, directive, ruling, instruction, or 
license issued hereunder.

[[Page 150]]

    (d) Transfers of property which otherwise would be null and void or 
unenforceable by virtue of the provisions of this section shall not be 
deemed to be null and void or unenforceable as to any person with whom 
such property was held or maintained (and as to such person only) in 
cases in which such person is able to establish to the satisfaction of 
the Director of the Office of Foreign Assets Control each of the 
following:
    (1) Such transfer did not represent a willful violation of the 
provisions of this part by the person with whom such property was held 
or maintained;
    (2) The person with whom such property was held or maintained did 
not have reasonable cause to know or suspect, in view of all the facts 
and circumstances known or available to such person, that such transfer 
required a license or authorization by or pursuant to this part and was 
not so licensed or authorized, or if a license or authorization did 
purport to cover the transfer, that such license or authorization had 
been obtained by misrepresentation of a third party or the withholding 
of material facts or was otherwise fraudulently obtained; and
    (3) The person with whom such property was held or maintained filed 
with the Office of Foreign Assets Control a report setting forth in full 
the circumstances relating to such transfer promptly upon discovery 
that:
    (i) Such transfer was in violation of the provisions of this part or 
any regulation, ruling, instruction, license, or other direction or 
authorization hereunder; or
    (ii) Such transfer was not licensed or authorized by the Director of 
the Office of Foreign Assets Control; or
    (iii) If a license did purport to cover the transfer, such license 
had been obtained by misrepresentation of a third party or the 
withholding of material facts or was otherwise fraudulently obtained.

    Note to paragraph (d)(3): The filing of a report in accordance with 
the provisions of this paragraph (d)(3) shall not be deemed evidence 
that the terms of paragraphs (d)(l) and (2) of this section have been 
satisfied.

    (e) Unless licensed or authorized pursuant to this part, any 
attachment, judgment, decree, lien, execution, garnishment, or other 
judicial process is null and void with respect to any property which, on 
or since the effective date, was held in the name of a specially 
designated narcotics trafficker or in which there existed an interest of 
a specially designated narcotics trafficker.



Sec. 536.203  Holding of certain types of blocked property in interest
-bearing accounts.

    (a)(1) Any person, including a U.S. financial institution, currently 
holding property subject to Sec. 536.201 which, as of the effective date 
or the date of receipt if subsequent to the effective date, is not being 
held in an interest-bearing account, or otherwise invested in a manner 
authorized by the Office of Foreign Assets Control (e.g., Sec. 536.504), 
shall transfer such property to, or hold such property or cause such 
property to be held in, an interest-bearing account or interest-bearing 
status in a U.S. financial institution as of the effective date or the 
date of receipt if subsequent to the effective date of this section, 
unless otherwise authorized or directed by the Office of Foreign Assets 
Control.
    (2) The requirement set forth in paragraph (a)(1) of this section 
shall apply to currency, bank deposits, accounts, obligations, and any 
other financial or economic resources or assets, and any proceeds 
resulting from the sale of tangible or intangible property. If interest 
is credited to an account separate from that in which the interest-
bearing asset is held, the name of the account party on both accounts 
must be the same and must clearly indicate the specially designated 
narcotics trafficker having an interest in the accounts. If the account 
is held in the name of a specially designated narcotics trafficker, the 
name of the account to which interest is credited must be the same.
    (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 90 days.

[[Page 151]]

    (c) This section does not apply to blocked tangible property, such 
as chattels, nor does it create an affirmative obligation on the part of 
the holder of such blocked tangible property to sell or liquidate the 
property and put the proceeds in a blocked account. However, the Office 
of Foreign Assets Control may issue licenses permitting or directing 
sales of tangible property in appropriate cases.



Sec. 536.204  Evasions; attempts; conspiracies.

    Any transaction for the purpose of, or which has the effect of, 
evading or avoiding, or which facilitates the evasion or avoidance of, 
any of the prohibitions set forth in this part, is hereby prohibited. 
Any attempt to violate the prohibitions set forth in this part is hereby 
prohibited. Any conspiracy formed for the purpose of engaging in a 
transaction prohibited by this part is hereby prohibited.



Sec. 536.205  Exempt transactions.

    (a) Personal communications. The prohibitions contained in this part 
do not apply to any postal, telegraphic, telephonic, or other personal 
communication, which does not involve the transfer of anything of value.
    (b) Information and informational materials. (1) The importation 
from any country and the exportation to any country of information or 
informational materials as defined in Sec. 536.306, whether commercial 
or otherwise, regardless of format or medium of transmission, are exempt 
from the prohibitions and regulations of this part.
    (2) This section does not authorize transactions related to 
information and informational materials not fully created and in 
existence at the date of the transactions, or to the substantive or 
artistic alteration or enhancement of informational materials, or to the 
provision of marketing and business consulting services by a U.S. 
person. Such prohibited transactions include, without limitation, 
payment of advances for informational materials not yet created and 
completed, provision of services to market, produce or co-produce, 
create or assist in the creation of information and informational 
materials, and payment of royalties to a specially designated narcotics 
trafficker with respect to income received for enhancements or 
alterations made by U.S. persons to information or informational 
materials imported from a specially designated narcotics trafficker.
    (3) This section does not authorize transactions incident to the 
exportation of technology that is not informational material as defined 
in Sec. 536.306(b)(1) or incident to the exportation of goods for use in 
the transmission of any information.
    (c) Travel. The prohibitions contained in this part do not apply to 
transactions ordinarily incident to travel to or from any country, 
including importation of accompanied baggage for personal use, 
maintenance within any country including payment of living expenses and 
acquisition of goods or services for personal use, and arrangement or 
facilitation of such travel including non-scheduled air, sea, or land 
voyages. Any transactions entered into by a specially designated 
narcotics trafficker while traveling in the United States that are 
outside the scope of those set forth in this paragraph are in violation 
of Sec. 536.201.



                      Subpart C_General Definitions



Sec. 536.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibition in Sec. 536.201 held in 
the name of a specially designated narcotics trafficker or in which a 
specially designated narcotics trafficker 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 
authorizing such action.



Sec. 536.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this part which is 
12:01 a.m. EDT, October 22, 1995, or, in the case of specially 
designated narcotics traffickers designated after that date, the earlier 
of

[[Page 152]]

the date on which a person receives actual or constructive notice of 
such designation.



Sec. 536.303  Entity.

    The term entity means a partnership, association, corporation, or 
other organization, group or subgroup.



Sec. 536.304  Foreign person.

    The term foreign person means any citizen or national of a foreign 
state (including any such individual who is also a citizen or national 
of the United States), or any entity not organized solely under the laws 
of the United States or existing solely in the United States, but does 
not include a foreign state.



Sec. 536.305  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.



Sec. 536.306  Information and informational materials.

    (a) For purposes of this part, the term information and 
informational materials means:
    (1) Publications, films, posters, phonograph records, photographs, 
microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and 
news wire feeds, and other information and informational articles.
    (2) To be considered informational materials, artworks must be 
classified under chapter subheading 9701, 9702, or 9703 of the 
Harmonized Tariff Schedule of the United States.
    (b) The terms information and informational materials with respect 
to U.S. exports do not include items:
    (1) That were, as of April 30, 1994, or that thereafter become, 
controlled for export pursuant to section 5 of the Export Administration 
Act of 1979, 50 U.S.C. App. 2401-2420 (the ``EAA''), or section 6 of the 
EAA to the extent that such controls promote nonproliferation or 
antiterrorism policies of the United States, including software as 
defined in 15 CFR part 772 that is not publicly available (see 15 CFR 
parts 734 and 772); or
    (2) With respect to which acts are prohibited by 18 U.S.C. chapter 
37.



Sec. 536.307  Interest.

    Except as otherwise provided in this part, the term interest when 
used with respect to property (e.g., ``an interest in property'') means 
an interest of any nature whatsoever, direct or indirect.



Sec. 536.308  License.

    Except as otherwise specified, the term license means any license or 
authorization contained in or issued pursuant to this part.



Sec. 536.309  Person.

    The term person means an individual or entity.



Sec. 536.310  Property; property interest.

    The terms property and property interest include, but are not 
limited to, money, checks, drafts, bullion, bank deposits, savings 
accounts, debts, indebtedness, obligations, notes, guarantees, 
debentures, stocks, bonds, coupons, any other financial instruments, 
bankers acceptances, mortgages, pledges, liens or other rights in the 
nature of security, warehouse receipts, bills of lading, trust receipts, 
bills of sale, any other evidences of title, ownership or indebtedness, 
letters of credit and any documents relating to any rights or 
obligations thereunder, powers of attorney, goods, wares, merchandise, 
chattels, stocks on hand, ships, goods on ships, real estate mortgages, 
deeds of trust, vendors sales agreements, land contracts, leaseholds, 
ground rents, real estate and any other interest therein, options, 
negotiable instruments, trade acceptances, royalties, book accounts, 
accounts payable, judgments, patents, trademarks or copyrights, 
insurance policies, safe deposit boxes and their contents, annuities, 
pooling agreements, services of any nature whatsoever, contracts of any 
nature whatsoever, and any other property, real, personal, or mixed, 
tangible or intangible, or interest or interests therein, present, 
future or contingent.



Sec. 536.311  Narcotics trafficking.

    The term narcotics trafficking means any activity undertaken 
illicitly to cultivate, produce, manufacture, distribute, sell, finance 
or transport, or

[[Page 153]]

otherwise assist, abet, conspire, or collude with others in illicit 
activities relating to narcotic drugs, including, but not limited to, 
cocaine.



Sec. 536.312  Specially designated narcotics trafficker.

    The term specially designated narcotics trafficker means:
    (a) Persons listed in the annex to Executive Order 12978 (3 CFR, 
1995 Comp., p.415);
    (b) Foreign persons designated by the Secretary of Treasury, in 
consultation with the Attorney General and the Secretary of State, 
because they are found:
    (1) To play a significant role in international narcotics 
trafficking centered in Colombia; or
    (2) Materially to assist in, or provide financial or technological 
support for or goods or services in support of, the narcotics 
trafficking activities of specially designated narcotics traffickers; 
and
    (c) Persons determined by the Secretary of the Treasury, in 
consultation with the Attorney General and the Secretary of State, to be 
owned or controlled by, or to act for or on behalf of, any other 
specially designated narcotics trafficker.

    Note to Sec. 536.312: 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 ``[SDNT].'' 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. Sections 501.806 and 501.807 
of this chapter 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 this part.

[62 FR 9960, Mar. 5, 1997, as amended at 62 FR 45107, Aug. 25, 1997; 76 
FR 38536, June 30, 2011]



Sec. 536.313  Specific license.

    The term specific license means any license or authorization not set 
forth in this part but issued pursuant to this part.



Sec. 536.314  Transfer.

    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 interest 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.



Sec. 536.315  United States.

    The term United States means the United States, its territories and 
possessions, and all areas under the jurisdiction or authority thereof.



Sec. 536.316  United States person; U.S. person.

    The term United States person or U.S. person means any United States 
citizen or national; permanent resident alien; entity organized under 
the laws of the United States or any jurisdiction within the United 
States (including foreign branches); or any person in the United States.

[[Page 154]]



Sec. 536.317  U.S. financial institution.

    The term U.S. financial institution means any U.S. person (including 
foreign branches) that is engaged in the business of accepting deposits, 
making, granting, transferring, holding, or brokering loans or credits, 
or purchasing or selling foreign exchange, securities, commodity futures 
or options, or procuring purchasers and sellers thereof, as principal or 
agent; including, but not limited to, depository institutions, banks, 
savings banks, trust companies, securities brokers and dealers, 
commodity futures and options brokers and dealers, forward contract and 
foreign exchange merchants, securities and commodities exchanges, 
clearing corporations, investment companies, employee benefit plans, and 
U.S. holding companies, U.S. affiliates, or U.S. subsidiaries of any of 
the foregoing. This term includes those branches, offices and agencies 
of foreign financial institutions which are located in the United 
States, but not such institutions' foreign branches, offices, or 
agencies.



                        Subpart D_Interpretations



Sec. 536.401  Reference to amended sections.

    Except as otherwise specified, reference to any section of this part 
or to any regulation, ruling, order, instruction, direction, or license 
issued pursuant to this part shall be deemed to refer to the same as 
currently amended.



Sec. 536.402  Effect of amendment.

    Any amendment, modification, or revocation of any section of this 
part or of any order, regulation, ruling, instruction, or license issued 
by or under the direction of the Director of the Office of Foreign 
Assets Control shall not, unless otherwise specifically provided, be 
deemed to affect any act done or omitted to be done, or any civil or 
criminal suit or proceeding commenced or pending prior to such 
amendment, modification, or revocation. All penalties, forfeitures, and 
liabilities under any such order, regulation, ruling, instruction, or 
license shall continue and may be enforced as if such amendment, 
modification, or revocation had not been made.



Sec. 536.403  Termination and acquisition of an interest in blocked 
property.

    (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 specially designated narcotics trafficker, such 
property shall no longer be deemed to be property in which a specially 
designated narcotics trafficker has or has had an interest, or which is 
held in the name of a specially designated narcotics trafficker, unless 
there exists in the property another interest of a specially designated 
narcotics trafficker, 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 
specially designated narcotics trafficker, such property shall be deemed 
to be property in which there exists an interest of the specially 
designated narcotics trafficker.



Sec. 536.404  Setoffs prohibited.

    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 Sec. 536.201 if effected after the effective date.



Sec. 536.405  Transactions incidental to a licensed transaction.

    Any transaction ordinarily incident to a licensed transaction and 
necessary to give effect thereto is also authorized, except a 
transaction by an unlicensed, specially designated narcotics trafficker 
or involving a debit to a blocked account or a transfer of blocked 
property not explicitly authorized within the terms of the license.



Sec. 536.406  Provision of services.

    (a) Except as provided in Sec. 536.205, the prohibitions contained 
in Sec. 536.201 apply to services performed by U.S. persons, wherever 
located:
    (1) On behalf of, or for the benefit of, a specially designated 
narcotics trafficker; or

[[Page 155]]

    (2) With respect to property interests of a specially designated 
narcotics trafficker.
    (b) Example: U.S. persons may not, except as authorized by the 
Office of Foreign Assets Control by or pursuant to this part, provide 
legal, accounting, financial, brokering, freight forwarding, 
transportation, public relations, educational, or other services to a 
specially designated narcotics trafficker. See Sec. 536.506, with 
respect to certain authorized legal services.



Sec. 536.407  Offshore transactions.

    The prohibitions contained in Sec. 536.201 apply to transactions by 
U.S. persons in locations outside the United States with respect to 
property which the U.S. person knows, or has reason to know, is held in 
the name of a specially designated narcotics trafficker, or in which the 
U.S. person knows, or has reason to know, a specially designated 
narcotics trafficker has or has had an interest since the effective 
date.



Sec. 536.408  Alleged change in ownership or control of an entity
designated as a specially designated narcotics trafficker.

    (a) A change or alleged change in ownership or control of an entity 
designated as a specially designated narcotics trafficker shall not be 
the basis for removal of that entity from the Office of Foreign Assets 
Control's Specially Designated Nationals and Blocked Persons List 
unless, upon investigation by the Office of Foreign Assets Control and 
submission of evidence by the entity, it is demonstrated to the 
satisfaction of the Director of the Office of Foreign Assets Control 
that the transfer to a bona fide purchaser at arm's length is legitimate 
and that the entity no longer meets the criteria for designation under 
Sec. 536.312. Evidence submitted must conclusively demonstrate that all 
ties with other specially designated narcotics traffickers have been 
completely severed, and may include, but is not limited to, articles of 
incorporation; identification of new directors, officers, shareholders, 
and sources of capital; and contracts evidencing the sale of the entity 
to its new owners.
    (b) Any continuing substantial financial obligations on the part of 
the new owners to any specially designated narcotics traffickers, 
including long-term payment plans, leases, or rents, will be considered 
as evidence of continuing control of the entity by the specially 
designated narcotics trafficker. Purchase of a designated entity without 
ongoing substantial financial obligations to a specially designated 
narcotics trafficker may nonetheless be a basis for subsequent 
designation of the purchaser, if the transaction is determined 
materially to assist in or provide financial support for the narcotics 
trafficking activities of specially designated narcotics traffickers for 
purposes of Sec. 536.312(b)(2). For example, any acquisition transaction 
resulting in a direct cash transfer to or other enrichment of a 
specially designated narcotics trafficker could lead to designation of 
the purchaser. Mere change in name of an entity will not be considered 
as constituting a change of the entity's status.

[62 FR 9960, Mar. 5, 1997, as amended at 76 FR 38536, June 30, 2011]



Sec. 536.409  Credit extended and cards issued by U.S. financial 
institutions.

    The prohibition in Sec. 536.201 on dealing in property in which a 
specially designated narcotics trafficker has an interest 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 designated under this part.



 Subpart E_Licenses, Authorizations, and Statements of Licensing Policy



Sec. 536.501  Effect of license or authorization.

    (a) No license or other authorization contained in this part, or 
otherwise issued by or under the direction of the Director of the Office 
of Foreign Assets Control, shall be deemed to authorize or validate any 
transaction effected prior to the issuance of the license, unless 
specifically provided in such license or authorization.

[[Page 156]]

    (b) No regulation, ruling, instruction, or license authorizes any 
transaction prohibited under this part unless the regulation, ruling, 
instruction, or license is issued by the Office of Foreign Assets 
Control and specifically refers to this part. No regulation, ruling, 
instruction, or license referring to this part shall be deemed to 
authorize any transaction prohibited by any provision of this chapter 
unless the regulation, ruling, instruction or license specifically 
refers to such provision.
    (c) Any regulation, ruling, instruction, or license authorizing any 
transaction otherwise prohibited under this part has the effect of 
removing a prohibition or prohibitions contained in this part from the 
transaction, but only to the extent specifically stated by its terms. 
Unless the regulation, ruling, instruction, or license otherwise 
specifies, such an authorization does not create any right, duty, 
obligation, claim, or interest in, or with respect to, any property 
which would not otherwise exist under ordinary principles of law.



Sec. 536.502  Exclusion from licenses and authorizations.

    The Director of the Office of Foreign Assets Control reserves the 
right to exclude any person, property, or transaction from the operation 
of any license, or from the privileges therein conferred, or to restrict 
the applicability thereof with respect to particular persons, property, 
transactions, or classes thereof. Such action shall be binding upon all 
persons receiving actual or constructive notice of such exclusion or 
restriction.



Sec. 536.503  Payments and transfers to blocked accounts in 
U.S. financial institutions.

    (a) Any payment of funds or transfer of credit or other financial or 
economic resources or assets into a blocked account in a U.S. financial 
institution is authorized, provided that a transfer from a blocked 
account pursuant to this authorization may only be made to another 
blocked account held in the same name on the books of the same U.S. 
financial institution.
    (b) This section does not authorize any transfer from a blocked 
account within the United States to an account held outside the United 
States.

    Note to Sec. 536.503: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers.

[62 FR 9960, Mar. 5, 1997, as amended at 62 FR 45107, Aug. 25, 1997]



Sec. 536.504  Investment and reinvestment of certain funds.

    (a) U.S. financial institutions are hereby authorized and directed 
to invest and reinvest assets held in blocked accounts in the name of a 
specially designated narcotics trafficker, subject to the following 
conditions:
    (1) The assets representing such investments and reinvestments are 
credited to a blocked account or sub-account which is in the name of the 
specially designated narcotics trafficker and which is located in the 
United States or within the possession or control of a U.S. person; and
    (2) The proceeds of such investments and reinvestments are not 
credited to a blocked account or sub-account under any name or 
designation which differs from the name or designation of the specific 
blocked account or sub-account in which such funds or securities were 
held; and
    (3) No immediate financial or economic benefit or access accrues 
(e.g., through pledging or other use) to the specially designated 
narcotics trafficker.
    (b)(1) U.S. persons seeking to avail themselves of this 
authorization must register with the Office of Foreign Assets Control, 
Blocked Assets Division, before undertaking transactions authorized 
under this section.
    (2) Transactions conducted pursuant to this section must be reported 
to the Office of Foreign Assets Control, Blocked Assets Division, in a 
report filed no later than 10 business days following the last business 
day of the month in which the transactions occurred.



Sec. 536.505  Entries in certain accounts for normal service
charges authorized.

    (a) U.S. financial institutions are hereby authorized to debit any 
blocked account with such U.S. financial institution in payment or 
reimbursement

[[Page 157]]

for normal service charges owed to such U.S. financial institution by 
the owner of such blocked account.
    (b) As used in this section, the term normal service charge shall 
include charges in payment or reimbursement for interest due; cable, 
telegraph, or telephone charges; postage costs; custody fees; small 
adjustment charges to correct bookkeeping errors; and, but not by way of 
limitation, minimum balance charges, notary and protest fees, and 
charges for reference books, photostats, credit reports, transcripts of 
statements, registered mail, insurance, stationery and supplies, check 
books, and other similar items.



Sec. 536.506  Provision of certain legal services authorized.

    (a) The provision to or on behalf of a specially designated 
narcotics trafficker of the legal services set forth in paragraph (b) of 
this section is authorized, provided that all receipt of payment 
therefor must be specifically licensed.
    (b) Specific licenses may be issued, on a case-by-case basis, 
authorizing receipt of payment of professional fees and reimbursement of 
incurred expenses for the following legal services by U.S. persons to a 
specially designated narcotics trafficker:
    (1) Provision of legal advice and counseling on the requirements of 
and compliance with the laws of any jurisdiction within the United 
States, provided that such advice and counseling is not provided to 
facilitate transactions that would violate any of the prohibitions 
contained in this part;
    (2) Representation of a specially designated narcotics trafficker 
when named as a defendant in or otherwise made a party to domestic 
United States legal, arbitration, or administrative proceedings;
    (3) Initiation of domestic United States legal, arbitration, or 
administrative proceedings in defense of property interests subject to 
U.S. jurisdiction of a specially designated narcotics trafficker;
    (4) Representation before any federal or state agency with respect 
to the imposition, administration, or enforcement of United States 
sanctions against significant narcotics traffickers centered in Colombia 
or specially designated narcotics traffickers; and
    (5) Provision of legal services in any other context in which 
prevailing United States law requires access to legal counsel at public 
expense.
    (c) The provision of any other legal services to a specially 
designated narcotics trafficker, not otherwise authorized in or exempted 
by this part, requires the issuance of a specific license.
    (d) Entry into a settlement agreement affecting property or 
interests in property of a specially designated narcotics trafficker 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 a property interest 
of a specially designated narcotics trafficker is prohibited unless 
specifically licensed in accordance with Sec. 536.202(e).



Sec. 536.507  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services to a 
specially designated narcotics trafficker located in the United States 
is authorized, provided that any payment for such services requires 
prior authorization by specific license.



                            Subpart F_Reports



Sec. 536.601  Records and reports.

    For provisions relating to records and reports, see subpart C of 
part 501 of this chapter.

[62 FR 45107, Aug. 25, 1997]



                           Subpart G_Penalties



Sec. 536.701  Penalties.

    (a) Attention is directed to section 206 of the International 
Emergency Economic Powers Act (50 U.S.C. 1705--the ``Act''), which is 
applicable to violations 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 Act.

[[Page 158]]

    (1) A civil penalty not to exceed the amount set forth in Section 
206 of the Act may be imposed on any person who violates, attempts to 
violate, conspires to violate, or causes a violation of any license, 
order, regulation, or prohibition issued under the Act.

    Note to paragraph (a)(1): As of January 15, 2017, the applicable 
maximum civil penalty per violation of the Act is the greater of 
$289,238 or an amount that is twice the amount of the transaction that 
is the basis of the violation with respect to which the penalty is 
imposed.

    (2) A person who willfully commits, willfully attempts to commit, or 
willfully conspires to commit, or aids or abets in the commission of a 
violation of any license, order, regulation, or prohibition shall, upon 
conviction, be fined not more than $1,000,000, or if a natural person, 
may be imprisoned for not more than 20 years, or both.
    (b) Adjustments to penalty amounts. (1) The civil penalties provided 
in the Act are subject to adjustment pursuant to the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, as amended, 
28 U.S.C. 2461 note).
    (2) The criminal penalties provided in the Act are subject to 
adjustment pursuant to 18 U.S.C. 3571.
    (c) Attention is also directed to 18 U.S.C. 1001, which provides 
that whoever, in any matter within the jurisdiction of any department or 
agency of the United States, knowingly and willfully falsifies, conceals 
or covers up by any trick, scheme, or device a material fact, or makes 
any false, fictitious or fraudulent statements or representations or 
makes or uses any false writing or document knowing the same to contain 
any 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.
    (d) Violations of this part may also be subject to relevant 
provisions of other applicable laws.

[62 FR 9960, Mar. 5, 1997, as amended at 71 FR 29252, May 22, 2006; 73 
FR 32652, June 10, 2008; 81 FR 43074, July 1, 2016; 82 FR 10436, Feb. 
10, 2017]



Sec. 536.702  Prepenalty notice.

    (a) When required. If the Director of the Office of Foreign Assets 
Control has reasonable cause 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, he shall issue to the person 
concerned a notice of his intent to impose a monetary penalty. The 
prepenalty notice may be issued whether or not another agency has taken 
any action with respect to this matter.
    (b) Contents--(1) Facts of violation. The prepenalty notice shall 
describe the violation, specify the laws and regulations allegedly 
violated, and state the amount of the proposed monetary penalty.
    (2) Right to respond. The prepenalty notice also shall inform the 
respondent of respondent's right to respond to the notice within 30 days 
of its mailing as to why a monetary penalty should not be imposed, or, 
if imposed, why it should be in a lesser amount than proposed.



Sec. 536.703  Response to prepenalty notice.

    (a) Time within which to respond. The respondent shall have 30 days 
from the date of mailing of the prepenalty notice to respond in writing 
to the Director of the Office of Foreign Assets Control.
    (b) Form and contents of written response. The written response need 
not be in any particular form, but shall contain information sufficient 
to indicate that it is in response to the prepenalty notice. It should 
respond to the allegations in the prepenalty notice and set forth the 
reasons why the person believes the penalty should not be imposed or, if 
imposed, why it should be in a lesser amount than proposed.
    (c) Informal settlement. In addition or as an alternative to a 
written response to a prepenalty notice pursuant to this section, the 
respondent or respondent's representative may contact the Office of 
Foreign Assets Control as advised in

[[Page 159]]

the prepenalty notice to propose the settlement of allegations contained 
in the prepenalty notice and related matters. In the event of settlement 
at the prepenalty stage, the prepenalty notice will be withdrawn, the 
respondent is not 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 30-day period specified in paragraph 
(a) of this section for written response to the prepenalty notice 
remains in effect unless additional time is granted by the Office of 
Foreign Assets Control.



Sec. 536.704  Penalty notice.

    (a) No violation. If, after considering any written response to the 
prepenalty notice and any relevant facts, the Director of the Office of 
Foreign Assets Control determines that there was no violation by the 
respondent named in the prepenalty notice, the Director promptly shall 
notify the respondent in writing of that determination and that no 
monetary penalty will be imposed.
    (b) Violation. If, after considering any written response to the 
prepenalty notice and any relevant facts, the Director of the Office of 
Foreign Assets Control determines that there was a violation by the 
respondent named in the prepenalty notice, the Director promptly shall 
issue a written notice of the imposition of the monetary penalty or 
other available disposition on the respondent.



Sec. 536.705  Administrative collection; referral to United States
Department of Justice.

    In the event that the respondent does not pay the penalty imposed 
pursuant to this part or make payment arrangements acceptable to the 
Director of the Office of Foreign Assets Control within 30 days of the 
mailing of the written notice of the imposition of the penalty, the 
matter may be referred for administrative collection measures or to the 
United States Department of Justice for appropriate action to recover 
the penalty in a civil suit in a Federal district court.



                          Subpart H_Procedures



Sec. 536.801  Procedures.

    For license application procedures and procedures relating to 
amendments, modifications, or revocations of licenses; administrative 
decisions; rulemaking; and requests for documents pursuant to the 
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see 
part 501, subpart E, of this chapter.

[62 FR 45107, Aug. 25, 1997, as amended at 68 FR 53657, Sept. 11, 2003]



Sec. 536.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 12978 or any further executive orders 
relating to the national emergency declared in Executive Order 12978 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.

[62 FR 9960, Mar. 5, 1997. Redesignated at 62 FR 45108, Aug. 25, 1997]



                    Subpart I_Paperwork Reduction Act



Sec. 536.901  Paperwork Reduction Act notice.

    For approval by the Office of Management and Budget (``OMB'') under 
the Paperwork Reduction Act of information collections relating to 
recordkeeping and reporting requirements, to licensing procedures 
(including those pursuant to statements of licensing policy), and to 
other procedures, see Sec. 501.901 of this chapter. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a valid control number 
assigned by OMB.

[62 FR 45108, Aug. 25, 1997]

[[Page 160]]



PART 538_SUDANESE SANCTIONS REGULATIONS--Table of Contents



      Subpart A_Relation of This Part to Other Laws and Regulations

Sec.
538.101  Relation of this part to other laws and regulations.

                         Subpart B_Prohibitions

538.201  Prohibited transactions involving blocked property.
538.202  Effect of transfers violating the provisions of this part.
538.203  Holding of funds in interest-bearing accounts; investment and 
          reinvestment.
538.204  Prohibited importation of goods or services from Sudan.
538.205  Prohibited exportation and reexportation of goods, technology, 
          or services to Sudan.
538.206  Prohibited facilitation.
538.207  Prohibited performance of contracts.
538.208  Prohibited grant or extension of credits or loans to the 
          Government of Sudan.
538.209  Prohibited transportation-related transactions involving Sudan.
538.210  Prohibited transactions relating to petroleum and petrochemical 
          industries.
538.211  Evasions; attempts; conspiracies.
538.212  Exempt transactions.

                      Subpart C_General Definitions

538.301  Blocked account; blocked property.
538.302  Effective date.
538.303  Entity.
538.304  General license.
538.305  Government of Sudan.
538.306  Information and informational materials.
538.307  Interest.
538.308  License.
538.309  Person.
538.310  Property; property interest.
538.311  Specific license.
538.312  Sudanese origin.
538.313  Transfer.
538.314  United States.
538.315  United States person; U.S. person.
538.316  U.S. financial institution.
538.317  U.S. depository institution.
538.318  U.S. registered broker or dealer in securities.
538.319  U.S. registered money transmitter.
538.320  Specified Areas of Sudan.

                        Subpart D_Interpretations

538.401  Reference to amended sections.
538.402  Effect of amendment.
538.403  Termination and acquisition of an interest in blocked property.
538.404  Setoffs prohibited.
538.405  Transactions incidental to a licensed transaction authorized.
538.406  Exportation of services; performance of service contracts; 
          legal services.
538.407  Facilitation by a United States person.
538.408  Offshore transactions.
538.409  Transshipments through the United States prohibited.
538.410  Imports of Sudanese goods from third countries; transshipments.
538.411  Exports to third countries; transshipments.
538.414  Loans or extensions of credit.
538.415  Payments involving Sudan.
538.416  Payments from blocked accounts to U.S. exporters and for other 
          obligations prohibited.
538.417  Transshipments through Sudan.
538.418  Financial transactions in Sudan.

 Subpart E_Licenses, Authorizations, and Statements of Licensing Policy

538.500  Licensing procedures.
538.501  Effect of license or authorization.
538.502  Exclusion from licenses and authorizations.
538.503  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
538.504  Entries in certain accounts for normal service charges 
          authorized.
538.505  Provision of certain legal services to the Government of Sudan, 
          persons in Sudan, or benefitting Sudan.
538.506  30-day delayed effective date for pre-November 4, 1997 trade 
          contracts involving Sudan.
538.507  Reexports by non-U.S. persons.
538.508  Certain payments by the Government of Sudan of obligations to 
          persons within the United States authorized.
538.509  Importation of certain Sudanese-origin services authorized; 
          activities related to travel to the United States by Sudanese 
          persons authorized.
538.510  Importation and exportation of certain gifts authorized.
538.511  Accompanied baggage authorized.
538.512  Transactions related to telecommunications and mail authorized.
538.513  [Reserved]
538.514  Certain transactions related to patents, trademarks and 
          copyrights authorized.
538.515  Sudanese diplomatic missions in the United States.
538.516  Diplomatic pouches.
538.517  Allowable payments for overflights of Sudanese airspace.
538.518  Household goods and personal effects.
538.519  Aircraft and maritime safety.
538.520  Extensions or renewals of loans and credits.

[[Page 161]]

538.521  Registration of nongovernmental organizations for humanitarian 
          or religious activities.
538.522  Transactions related to U.S. citizens residing in Sudan.
538.523  Commercial sales, exportation, and reexportation of 
          agricultural commodities, medicine, and medical devices.
538.524  [Reserved]
538.525  Payment for and financing of commercial sales of certain 
          agricultural commodities, medicine, and medical devices.
538.526  Brokering commercial sales of agricultural commodities, 
          medicine, and medical devices.
538.527  Operation of accounts.
538.528  Noncommercial, personal remittances.
538.529  Authorized transactions necessary and ordinarily incident to 
          publishing.
538.530  Licenses and registrations issued pursuant to Executive Order 
          13067 or this part authorized pursuant to Executive Order 
          13412.
538.531  Official activities of the United States Government and 
          international organizations.
538.532  Humanitarian transshipments to or from the Specified Areas of 
          Sudan.
538.533  Exportation, reexportation, or provision of certain services, 
          software, and hardware incident to personal communications.
538.534  Third-country diplomatic and consular funds transfers.
538.535  Importation and exportation of human remains for burial, 
          cremation, or interment authorized.
538.536  Activities relating to the petroleum and petrochemical 
          industries in the Republic of South Sudan.
538.537  Transshipment of goods, technology, and services to or from the 
          Republic of South Sudan.
538.540  All transactions authorized; Government of Sudan property 
          unblocked.

                            Subpart F_Reports

538.601  Records and reports.

                           Subpart G_Penalties

538.701  Penalties.
538.702  Prepenalty notice.
538.703  Response to prepenalty notice; informal settlement.
538.704  Penalty imposition or withdrawal.
538.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H_Procedures

538.801  Procedures.
538.802  Delegation by the Secretary of the Treasury.

                    Subpart I_Paperwork Reduction Act

538.901  Paperwork Reduction Act notice.

Appendix A to Part 538--Bulk Agricultural Commodities
Appendix B to Part 538--Services, Software, and Hardware Incident to 
          Personal Communications Authorized for Exportation, 
          Reexportation, or Provision to Sudan by Paragraph (a)(3) of 
          Sec. 538.533

    Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 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); 22 U.S.C. 7201-7211; Pub. L. 109-344, 120 Stat. 1869; 
Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); E.O. 13067, 62 FR 
59989, 3 CFR, 1997 Comp., p. 230; E.O. 13412, 71 FR 61369, 3 CFR, 2006 
Comp., p. 244.

    Source: 63 FR 35810, July 1, 1998, unless otherwise noted.



      Subpart A_Relation of This Part to Other Laws and Regulations



Sec. 538.101  Relation of this part to other laws and regulations.

    (a) This part is separate from, and independent of, the other parts 
of this chapter with the exception of part 501 of this chapter, the 
recordkeeping and reporting requirements and license application and 
other procedures of which apply to this part. Differing foreign policy 
and national security contexts may result in differing interpretations 
of similar language among the parts of this chapter. No license or 
authorization contained in or issued pursuant to those other parts 
authorizes any transaction prohibited by this part. No license or 
authorization contained in or issued pursuant to any other provision of 
law or regulation authorizes any transaction prohibited by this part.
    (b) No license or authorization contained in or issued pursuant to 
this part relieves the involved parties from complying with any other 
applicable laws or regulations.



                         Subpart B_Prohibitions



Sec. 538.201  Prohibited transactions involving blocked property.

    (a) Except as authorized by regulations, orders, directives, 
rulings, instructions, licenses, or otherwise, no property or interests 
in property of the Government of Sudan, that are in the

[[Page 162]]

United States, that hereafter come within the United States, or that are 
or hereafter come within the possession or control of U.S. persons, 
including their overseas branches, may be transferred, paid, exported, 
withdrawn or otherwise dealt in.
    (b) Unless otherwise authorized by this part or by a specific 
license expressly referring to this section, 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, or otherwise dealing in any 
security (or evidence thereof) registered or inscribed in the name of 
the Government of Sudan, and held within the possession or control of a 
U.S. person is prohibited, irrespective of the fact that at any time 
(either prior to, on, or subsequent to the effective date) the 
registered or inscribed owner thereof may have, or appears to have, 
assigned, transferred, or otherwise disposed of any such security.
    (c) When a transaction results in the blocking of funds at a 
financial institution pursuant to this section and a party to the 
transaction believes the funds have been blocked due to mistaken 
identity, that party may seek to have such funds unblocked pursuant to 
the administrative procedures set forth in Sec. 501.806 of this chapter.



Sec. 538.202  Effect of transfers violating the provisions of this part.

    (a) Any transfer after the effective date, which is in violation of 
any provision of this part or of any regulation, order, directive, 
ruling, instruction, license, or other authorization hereunder and 
involves any property or interest in property blocked pursuant to 
Sec. 538.201 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 interest in, any property or interest in property blocked 
pursuant to Sec. 538.201, unless the person with whom such property is 
held or maintained, prior to such 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 render it enforceable 
to the same extent that it would be valid or enforceable but for the 
provisions of the International Emergency Economic Powers Act, this 
part, and any regulation, order, directive, ruling, instruction, or 
license issued hereunder.
    (d) Transfers of property which otherwise would be null and void or 
unenforceable by virtue of the provisions of this section shall not be 
deemed to be null and void or unenforceable as to any person with whom 
such property was held or maintained (and as to such person only) in 
cases in which such person is able to establish to the satisfaction of 
the Director of the Office of Foreign Assets Control each of the 
following:
    (1) Such transfer did not represent a willful violation of the 
provisions of this part by the person with whom such property was held 
or maintained;
    (2) The person with whom such property was held or maintained did 
not have reasonable cause to know or suspect, in view of all the facts 
and circumstances known or available to such person, that such transfer 
required a license or authorization by or pursuant to this part and was 
not so licensed or authorized, or if a license or authorization did 
purport to cover the transfer, that such license or authorization had 
been obtained by misrepresentation of a third party or the withholding 
of material facts or was otherwise fraudulently obtained; and
    (3) The person with whom such property was held or maintained filed 
with the Office of Foreign Assets Control a report setting forth in full 
the circumstances relating to such transfer promptly upon discovery 
that:
    (i) Such transfer was in violation of the provisions of this part or 
any regulation, ruling, instruction, license, or other direction or 
authorization hereunder; or

[[Page 163]]

    (ii) Such transfer was not licensed or authorized by the Director of 
the Office of Foreign Assets Control; or
    (iii) If a license did purport to cover the transfer, such license 
had been obtained by misrepresentation of a third party or the 
withholding of material facts or was otherwise fraudulently obtained.

    Note to paragraph (d): The filing of a report in accordance with the 
provisions of paragraph (d)(3) of this section shall not be deemed 
evidence that the terms of paragraphs (d)(1) and (2) of this section 
have been satisfied.

    (e) Unless licensed or authorized 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 Sec. 538.201.



Sec. 538.203  Holding of funds in interest-bearing accounts;
investment and reinvestment.

    (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 Sec. 538.201(a) shall hold or place 
such funds in a blocked interest-bearing account located in the United 
States.
    (b)(1) For purposes of this section, the term blocked interest-
bearing account means a blocked account:
    (i) In a federally-insured U.S. bank, thrift institution, or credit 
union, provided the funds are earning interest at rates which are 
commercially reasonable; or
    (ii) With a broker or dealer registered with the Securities and 
Exchange Commission under the Securities Exchange Act of 1934, provided 
the funds are invested in a money market fund or in U.S. Treasury Bills.
    (2) For purposes of this section, a rate is commercially reasonable 
if it is the rate currently offered to other depositors on deposits or 
instruments of comparable size and maturity.
    (3) Funds held or placed in a blocked account pursuant to this 
paragraph (b) may not be invested in instruments the maturity of which 
exceeds 180 days. If interest is credited to a separate blocked account 
or sub-account, the name of the account party on each account must be 
the same.
    (c) Blocked funds held in instruments the maturity of which exceeds 
180 days at the time the funds become subject to Sec. 538.201 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 (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 Sec. 538.201 may continue 
to be held in the same type of accounts or instruments, provided the 
funds earn interest at rates which are commercially reasonable.
    (e) This section does not create an affirmative obligation for the 
holder of blocked tangible property, such as chattels or real estate, or 
of other blocked property, such as debt or equity securities, to sell or 
liquidate such property at the time the property becomes subject to 
Sec. 538.201. However, the Office of Foreign Assets Control may issue 
licenses permitting or directing such sales in appropriate cases.
    (f) Funds subject to this section may not be held, invested, or 
reinvested in a manner which provides immediate financial or economic 
benefit or access to the Government of Sudan or its entities, nor may 
their holder cooperate in or facilitate the pledging or other attempted 
use as collateral of blocked funds or other assets.



Sec. 538.204  Prohibited importation of goods or services from Sudan.

    Except as otherwise authorized, the importation into the United 
States, directly or indirectly, of any goods or services of Sudanese 
origin, other than information or informational materials, is 
prohibited.



Sec. 538.205  Prohibited exportation and reexportation of goods,
technology, or services to Sudan.

    Except as otherwise authorized, the exportation or reexportation, 
directly or indirectly, to Sudan of any goods, technology (including 
technical data,

[[Page 164]]

software, or other information) or services from the United States or by 
a United States person, wherever located, or requiring the issuance of a 
license by a Federal agency, is prohibited.

[66 FR 36688, July 12, 2001]



Sec. 538.206  Prohibited facilitation.

    Except as otherwise authorized, the facilitation by a United States 
person, including but not limited to brokering activities, of the 
exportation or reexportation of goods, technology, or services from 
Sudan to any destination, or to Sudan from any location, is prohibited.



Sec. 538.207  Prohibited performance of contracts.

    Except as otherwise authorized, the performance by any United States 
person of any contract, including a financing contract, in support of an 
industrial, commercial, public utility, or governmental project in Sudan 
is prohibited.



Sec. 538.208  Prohibited grant or extension of credits or loans to
the Government of Sudan.

    Except as otherwise authorized, the grant or extension of credits or 
loans by any United States person to the Government of Sudan is 
prohibited.



Sec. 538.209  Prohibited transportation-related transactions 
involving Sudan.

    Except as otherwise authorized, the following are prohibited:
    (a) Any transaction by a U.S. person relating to transportation of 
cargo to or from Sudan;
    (b) The provision of transportation of cargo to or from the United 
States by any Sudanese person or any vessel or aircraft of Sudanese 
registration; or
    (c) The sale in the United States by any person holding authority 
under 49 U.S.C. subtitle VII of any transportation of cargo by air that 
includes any stop in Sudan.



Sec. 538.210  Prohibited transactions relating to petroleum and
petrochemical industries.

    (a) Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to October 13, 2006, 
all transactions by United States persons relating to the petroleum or 
petrochemical industries in Sudan, including, but not limited to, 
oilfield services and oil or gas pipelines, are prohibited.
    (b) Except as otherwise authorized, the facilitation by a United 
States person, including but not limited to brokering activities, of any 
transaction relating to the petroleum or petrochemical industries in 
Sudan is prohibited.

[72 FR 61515, Oct. 31, 2007]



Sec. 538.211  Evasions; attempts; conspiracies.

    Any transaction by any 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 this part 
is prohibited. Any conspiracy formed for the purpose of engaging in a 
transaction prohibited by this part is prohibited.

[63 FR 35810, July 1, 1998. Redesignated at 72 FR 61515, Oct. 31, 2007]



Sec. 538.212  Exempt transactions.

    (a) Personal communications. The prohibitions contained in this part 
do not apply to any postal, telegraphic, telephonic, or other personal 
communication, which does not involve the transfer of anything of value.
    (b) Humanitarian donations. The prohibitions of this part do not 
apply to donations by United States persons of articles, such as food, 
clothing, and medicine, intended to be used to relieve human suffering.
    (c) Information and informational materials. (1) The importation 
from any country and the exportation to any country of information or 
informational materials as defined in Sec. 538.306, whether commercial 
or otherwise, regardless of format or medium of transmission, are exempt 
from the prohibitions and regulations of this part.
    (2) This section does not authorize transactions related to 
information and informational materials not fully created and in 
existence at the date of the transactions, or to the substantive or 
artistic alteration or enhancement of informational materials, or to the

[[Page 165]]

provision of marketing and business consulting services. Such prohibited 
transactions include, without limitation, payment of advances for 
informational materials not yet created and completed, provision of 
services to market, produce or co-produce, create or assist in the 
creation of information and informational materials, and payment of 
royalties to the Government of Sudan or a person in Sudan with respect 
to income received for enhancements or alterations made by U.S. persons 
to information or informational materials imported from the Government 
of Sudan or a person in Sudan.
    (3) This section does not exempt or authorize 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 Sudan are prohibited.
    Note to paragraph (c)(3): See Sec. 538.533 for a general license 
authorizing the exportation to Sudan of certain services, software, and 
hardware incident to the exchange of personal communications.
    (d) Travel. The prohibitions contained in this part do not apply to 
transactions ordinarily incident to travel to or from any country, 
including exportation or importation of accompanied baggage for personal 
use, maintenance within any country including payment of living expenses 
and acquisition of goods or services for personal use, and arrangement 
or facilitation of such travel including non-scheduled air, sea, or land 
voyages.
    (e) Official business. The prohibitions contained in this part do 
not apply to transactions for the conduct of the official business of 
the Federal Government or the United Nations by employees thereof.
    (f) Journalistic activity. The prohibitions contained in this part 
do not apply to transactions in Sudan for journalistic activity by 
persons regularly employed in such capacity by a news-gathering 
organization.
    (g)(1) Specified Areas of Sudan. Except for the provisions of 
Secs. 538.201 through 538.203, 538.210, and 538.211, and except as 
provided in paragraph (g)(2) of this section, the prohibitions contained 
in this part do not apply to activities or related transactions with 
respect to the Specified Areas of Sudan.
    (2) The exemption in paragraph (g)(1) of this section does not apply 
to the exportation or reexportation of agricultural commodities 
(including bulk agricultural commodities listed in appendix A to this 
part 538), medicine, and medical devices.

    Note to Sec. 538.212(g)(2): See Sec. 538.523(a)(2) for a general 
license authorizing the exportation and reexportation of agricultural 
commodities, medicine, and medical devices to the Specified Areas of 
Sudan, and the conduct of related transactions.

[63 FR 35810, July 1, 1998, as amended at 66 FR 36688, July 12, 2001. 
Redesignated and amended at 72 FR 61515, Oct. 31, 2007; 74 FR 46363, 
Sept. 9, 2009; 80 FR 8533, Feb. 18, 2015]



                      Subpart C_General Definitions



Sec. 538.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibition in Sec. 538.201 held in 
the name of the Government of Sudan or in which the Government of Sudan 
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 authorizing such action.



Sec. 538.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this part which is 
12:01 a.m. EST, November 4, 1997.



Sec. 538.303  Entity.

    The term entity means a partnership, association, trust, joint 
venture, corporation, or other organization.

[[Page 166]]



Sec. 538.304  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.



Sec. 538.305  Government of Sudan.

    The term Government of Sudan includes:
    (a) The state and the Government of Sudan, as well as any political 
subdivision, agency, or instrumentality thereof, including the Central 
Bank of Sudan;
    (b) Any entity owned or controlled by the foregoing;
    (c) Any person to the extent that such person is, or has been, or to 
the extent that there is reasonable cause to believe that such person 
is, or has been, since the effective date, acting or purporting to act 
directly or indirectly on behalf of any of the foregoing; and
    (d) Any other person determined by the Director of the Office of 
Foreign Assets Control to be included within paragraphs (a)(1) through 
(a)(3) of this section.

    Note 1 to Sec. 538.305: The term Government of Sudan does not 
include the Government of the Republic of South Sudan or the central 
bank of the Republic of South Sudan.
    Note 2 to Sec. 538.305: Please refer to the Office of Foreign Assets 
Control's Specially Designated Nationals and Blocked Persons List (``SDN 
List'') for a non-exhaustive listing of persons determined to fall 
within this definition, whose property and interests in property 
therefore are blocked pursuant to this part. The SDN List entries for 
such persons include the identifier ``[SUDAN].'' 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. 
Sections 501.806 and 501.807 of this chapter 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 this part.

[63 FR 35810, July 1, 1998, as amended at 72 FR 61516, Oct. 31, 2007; 76 
FR 38536, June 30, 2011; 76 FR 76618, Dec. 8, 2011]



Sec. 538.306  Information and informational materials.

    (a)(1) For purposes of this part, the term information and 
informational materials means publications, films, posters, phonograph 
records, photographs, microfilms, microfiche, tapes, compact disks, CD 
ROMs, artworks, and news wire feeds, and other information and 
informational materials.
    (2) To be considered informational materials, artworks must be 
classified under chapter subheading 9701, 9702, or 9703 of the 
Harmonized Tariff Schedule of the United States.
    (b) The term information and informational materials with respect to 
U.S. exports does not include items:
    (1) That were, as of April 30, 1994, or that thereafter become, 
controlled for export pursuant to section 5 of the Export Administration 
Act of 1979, 50 U.S.C. App. 2401-2420 (the ``EAA''), or section 6 of the 
EAA to the extent that such controls promote nonproliferation or 
antiterrorism policies of the United States.
    (2) With respect to which acts are prohibited by 18 U.S.C. chapter 
37.



Sec. 538.307  Interest.

    Except as otherwise provided in this part, the term interest when 
used with respect to property (e.g., `` an interest in property'') means 
an interest of any nature whatsoever, direct or indirect.



Sec. 538.308  License.

    Except as otherwise specified, the term license means any license or 
authorization contained in or issued pursuant to this part.



Sec. 538.309  Person.

    The term person means an individual or entity.



Sec. 538.310  Property; property interest.

    The terms property and property interest include, but are not 
limited to, money, checks, drafts, bullion, bank deposits, savings 
accounts, debts, indebtedness, obligations, notes, guarantees, 
debentures, stocks, bonds, coupons, any other financial instruments, 
bankers acceptances, mortgages, pledges, liens or other rights in the 
nature of security, warehouse receipts, bills of lading, trust receipts, 
bills of sale, any other evidences of title, ownership or indebtedness, 
letters of credit and any documents relating to any

[[Page 167]]

rights or obligations thereunder, powers of attorney, goods, wares, 
merchandise, chattels, stocks on hand, ships, goods on ships, real 
estate mortgages, deeds of trust, vendors' sales agreements, land 
contracts, leaseholds, ground rents, real estate and any other interest 
therein, options, negotiable instruments, trade acceptances, royalties, 
book accounts, accounts payable, judgments, patents, trademarks or 
copyrights, insurance policies, safe deposit boxes and their contents, 
annuities, pooling agreements, services of any nature whatsoever, 
contracts of any nature whatsoever, and any other property, real, 
personal, or mixed, tangible or intangible, or interest or interests 
therein, present, future or contingent.



Sec. 538.311  Specific license.

    The term specific license means any license or authorization not set 
forth in this part but issued pursuant to this part.



Sec. 538.312  Sudanese origin.

    The term goods or services of Sudanese origin includes:
    (a) Goods produced, manufactured, grown, extracted, or processed 
within Sudan;
    (b) Goods which have entered into Sudanese commerce;
    (c) Services performed in Sudan or by a person ordinarily resident 
in Sudan who is acting as an agent, employee, or contractor of the 
Government of Sudan or of a business entity located in Sudan. Services 
of Sudanese origin are not imported into the United States when such 
services are provided in the United States by a Sudanese national 
employed or resident in the United States.
    (d) The term services of Sudanese origin does not include:
    (1) Diplomatic and consular services performed by or on behalf of 
the Government of Sudan;
    (2) Diplomatic and consular services performed by or on behalf of 
the Government of the United States.
    (e) The term goods or services of Sudanese origin does not include 
goods or services that have transshipped through Sudan to or from the 
Republic of South Sudan pursuant to the authorization in Sec. 538.537 of 
this part.

[63 FR 35810, July 1, 1998, as amended at 76 FR 76618, Dec. 8, 2011]



Sec. 538.313  Transfer.

    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 interest 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.



Sec. 538.314  United States.

    The term United States means the United States, its territories and 
possessions, and all areas under the jurisdiction or authority thereof.



Sec. 538.315  United States person; U.S. person.

    The term United States person or U.S. person means any United States 
citizen, permanent resident alien, entity organized under the laws of 
the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States.

[[Page 168]]



Sec. 538.316  U.S. financial institution.

    The term U.S. financial institution means any U.S. entity (including 
foreign branches) that is engaged in the business of accepting deposits, 
making, granting, transferring, holding, or brokering loans or credits, 
or purchasing or selling foreign exchange, securities, commodity futures 
or options, or procuring purchasers and sellers thereof, as principal or 
agent; including, but not limited to, depository institutions, banks, 
savings banks, trust companies, securities brokers and dealers, 
commodity futures and options brokers and dealers, forward contract and 
foreign exchange merchants, securities and commodities exchanges, 
clearing corporations, investment companies, employee benefit plans, and 
U.S. holding companies, U.S. affiliates, or U.S. subsidiaries of any of 
the foregoing. This term includes those branches, offices and agencies 
of foreign financial institutions which are located in the United 
States, but not such institutions' foreign branches, offices, or 
agencies.



Sec. 538.317  U.S. depository institution.

    The term U.S. depository institution means any entity (including its 
foreign branches) organized under the laws of the United States or of 
any jurisdiction within the United States, or any agency, office or 
branch located in the United States of a foreign entity, that is engaged 
primarily in the business of banking (for example, banks, savings banks, 
savings associations, credit unions, trust companies and United States 
bank holding companies) and is subject to regulation by federal or state 
banking authorities.

[70 FR 34062, June 13, 2005]



Sec. 538.318  U.S. registered broker or dealer in securities.

    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:
    (a) Is a ``broker'' or ``dealer'' in securities within the meanings 
set forth in the Securities Exchange Act of 1934;
    (b) Holds or clears customer accounts; and
    (c) Is registered with the Securities and Exchange Commission under 
the Securities Exchange Act of 1934.

[70 FR 34062, June 13, 2005]



Sec. 538.319  U.S. registered money transmitter.

    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.

[70 FR 34062, June 13, 2005]



Sec. 538.320  Specified Areas of Sudan.

    (a) The term Specified Areas of Sudan means Southern Kordofan/Nuba 
Mountains State, Blue Nile State, Abyei, Darfur, and marginalized areas 
in and around Khartoum.
    (b) The term marginalized areas in and around Khartoum means the 
following official camps for internally displaced persons: Mayo, El 
Salaam, Wad El Bashir, and Soba.

[72 FR 61516, Oct. 31, 2007, as amended at 76 FR 76618, Dec. 8, 2011]



                        Subpart D_Interpretations



Sec. 538.401  Reference to amended sections.

    Except as otherwise specified, reference to any section of this part 
or to any regulation, ruling, order, instruction, direction, or license 
issued pursuant to this part shall be deemed to refer to the same as 
currently amended.



Sec. 538.402  Effect of amendment.

    Any amendment, modification, or revocation of any section of this 
part or of any order, regulation, ruling, instruction, or license issued 
by or under the direction of the Director of the Office of Foreign 
Assets Control shall

[[Page 169]]

not, unless otherwise specifically provided, affect any act done or 
omitted to be done, or any civil or criminal suit or proceeding 
commenced or pending prior to such amendment, modification, or 
revocation. All penalties, forfeitures, and liabilities under any such 
order, regulation, ruling, instruction, or license continue and may be 
enforced as if such amendment, modification, or revocation had not been 
made.



Sec. 538.403  Termination and acquisition of an interest in blocked 
property.

    (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 the Government of Sudan, such property shall no 
longer be deemed to be property in which the Government of Sudan has or 
has had an interest unless there exists in the property another interest 
of the Government of Sudan, 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 the 
Government of Sudan, such property shall be deemed to be property in 
which there exists an interest of the Government of Sudan.



Sec. 538.404  Setoffs prohibited.

    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 Sec. 538.201 if effected after the effective date.



Sec. 538.405  Transactions incidental to a licensed transaction 
authorized.

    Any transaction ordinarily incident to a licensed transaction and 
necessary to give effect thereto is also authorized, except:
    (a) A transaction by an unlicensed Sudanese governmental entity or 
involving a debit to a blocked account or a transfer of blocked property 
not explicitly authorized within the terms of the license;
    (b) Provision of any transportation services to or from Sudan not 
explicitly authorized in or pursuant to this part other than loading, 
transporting, and discharging licensed or exempt cargo there;
    (c) Distribution or leasing in Sudan of any containers or similar 
goods owned or controlled by United States persons after the performance 
of transportation services to Sudan;
    (d) Financing of licensed sales for exportation or reexportation of 
the excluded food items specified in Sec. 538.523(a)(3)(iii), other 
agricultural commodities not included in the definition of food set 
forth in Sec. 538.523(a)(3)(ii), food (as defined in 
Sec. 538.523(a)(3)(ii)) intended for military or law enforcement 
purchasers or importers, medicine, and medical devices to the Government 
of Sudan, to an area of Sudan other than the Specified Areas of Sudan, 
or to persons in third countries purchasing specifically for resale to 
any of the foregoing. See Sec. 538.525; and
    (e) All financial transactions ordinarily incident to the activities 
authorized by Secs. 538.536 and 538.537 of this part.

[64 FR 41786, Aug. 2, 1999, as amended at 66 FR 36688, July 12, 2001; 74 
FR 46363, Sept. 9, 2009; 76 FR 76618, Dec. 8, 2011]



Sec. 538.406  Exportation of services; performance of service
contracts; legal services.

    (a) The prohibition on the exportation of services contained in 
Sec. 538.205 applies to services performed on behalf of the Government 
of Sudan, or where the benefit of such services is otherwise received in 
Sudan, when such services are performed:
    (1) In the United States;
    (2) By a U.S. person, wherever located;
    (3) By an entity located in the United States, including its 
overseas branches; or
    (4) Outside the United States by an individual U.S. person 
ordinarily resident in the United States.
    (b) The benefit of services performed anywhere in the world on 
behalf of the Government of Sudan, including services performed for a 
controlled entity or agent of the Government of Sudan, is presumed to be 
received in Sudan.
    (c) The prohibitions contained in Secs. 538.201 and 538.207 apply to 
services

[[Page 170]]

performed by U.S. persons, wherever located:
    (1) On behalf of the Government of Sudan;
    (2) With respect to property interests of the Government of Sudan; 
or
    (3) In support of an industrial, commercial, public utility or 
governmental project in Sudan.
    (d) Example: U.S. persons may not, without specific authorization 
from the Office of Foreign Assets Control, represent an individual or 
entity with respect to contract negotiations, contract performance, 
commercial arbitration, or other business dealings with the Government 
of Sudan. See Sec. 538.505 on licensing policy with regard to the 
provision of certain legal services.



Sec. 538.407  Facilitation by a United States person.

    (a) The prohibition contained in Sec. 538.206 against facilitation 
by a United States person of the exportation or reexportation of goods, 
technology, or services between Sudan and any destination (including the 
United States) bars any unlicensed action by a U.S. person that assists 
or supports trading activity with Sudan by any person. Facilitation of a 
trade or financial transaction that could be engaged in directly by a 
U.S. person or from the United States consistent with the prohibitions, 
general licenses and exemptions contained in this part is not 
prohibited. Activity of a purely clerical or reporting nature that does 
not further trade or financial transactions with Sudan or the Government 
of Sudan is not considered prohibited facilitation. For example, 
reporting on the results of a subsidiary's trade with Sudan is not 
prohibited, while financing or insuring that trade or warranting the 
quality of goods sold by a subsidiary to the Government of Sudan 
constitutes prohibited facilitation.
    (b) To avoid potential liability for U.S. persons under this part, a 
U.S. parent corporation must ensure that its foreign subsidiaries act 
independently of any U.S. person with respect to all transactions and 
activities relating to the exportation or reexportation of goods, 
technology, or services between Sudan and any other location including 
but not limited to business and legal planning; decision making; 
designing, ordering or transporting goods; and financial, insurance, and 
other risks. See Sec. 538.505 with respect to exports of, inter alia, 
certain legal services benefitting Sudan.
    (c) No U.S. person may change its policies or operating procedures, 
or those of a foreign affiliate or subsidiary, in order to enable a 
foreign entity owned or controlled by U.S. persons to enter into a 
transaction that could not be entered into directly by a U.S. person or 
from the United States pursuant to this part.
    (d) No U.S. person may refer to a foreign person purchase orders, 
requests for bids, or similar business opportunities involving Sudan or 
the Government of Sudan to which the United States person could not 
directly respond as a result of the prohibitions contained in this part.



Sec. 538.408  Offshore transactions.

    (a) The prohibitions contained in Secs. 538.201 and 538.206 apply to 
transactions by any U.S. person in a location outside the United States 
with respect to property in which the U.S. person knows, or has reason 
to know, the Government of Sudan has or has had an interest since the 
effective date, or with respect to goods, technology or services which 
the U.S. person knows, or has reason to know, are of Sudanese origin or 
owned or controlled by the Government of Sudan.
    (b) Prohibited transactions include, but are not limited to, 
importation into or exportation from locations outside the United States 
of, or purchasing, selling, financing, swapping, insuring, transporting, 
lifting, storing, incorporating, transforming, brokering, or otherwise 
dealing in, within such locations, goods, technology or services of 
Sudanese origin.
    (c) Examples. (1) A U.S. person may not, within the United States or 
abroad, purchase, sell, finance, insure, transport, act as a broker for 
the sale or transport of, or otherwise deal in, Sudanese crude oil or 
sugar refined in Sudan.
    (2) A U.S. person may not, within the United States or abroad, 
conduct transactions of any nature whatsoever with an entity that the 
U.S. person

[[Page 171]]

knows or has reason to know is the Government of Sudan, including a 
controlled entity or agent of that Government, or which benefits or 
supports the business of an entity located in Sudan, unless the entity 
is licensed by the Office of Foreign Assets Control to conduct such 
transactions with U.S. persons or the transaction is generally licensed 
in, or exempted from the prohibitions of, this part.



Sec. 538.409  Transshipments through the United States prohibited.

    (a) The prohibitions in Sec. 538.205 apply to the importation into 
the United States, for transshipment or transit, of goods which are 
intended or destined for Sudan, or an entity operated from Sudan.
    (b) The prohibitions in Sec. 538.204 apply to the importation into 
the United States, for transshipment or transit, of goods of Sudanese 
origin which are intended or destined for third countries.
    (c) Goods in which the Government of Sudan has an interest which are 
imported into or transshipped through the United States are blocked 
pursuant to Sec. 538.201.



Sec. 538.410  Imports of Sudanese goods from third countries; 
transshipments.

    (a) Importation into the United States from third countries of goods 
containing raw materials or components of Sudanese origin is not 
prohibited if those raw materials or components have been incorporated 
into manufactured products or otherwise substantially transformed in a 
third country.
    (b) Importation into the United States of goods of Sudanese origin 
that have been transshipped through a third country without being 
incorporated into manufactured products or otherwise substantially 
transformed in a third country are prohibited.



Sec. 538.411  Exports to third countries; transshipments.

    Exportation of goods or technology (including technical data, 
software, information not exempted from the prohibition of this part 
pursuant to Sec. 538.211, or technical assistance) from the United 
States to third countries is prohibited if the exporter knows, or has 
reason to know, that the goods or technology are intended for 
transshipment to Sudan (including passage through, or storage in, 
intermediate destinations). The exportation of goods or technology 
intended specifically for incorporation or substantial transformation 
into a third-country product is also prohibited if the particular 
product is to be used in Sudan, is being specifically manufactured to 
fill a Sudanese order, or if the manufacturer's sales of the particular 
product are predominantly to Sudan.
    Note to Sec. 538.411: See Sec. 538.533 for a general license 
authorizing the exportation to persons of certain services, software, 
and hardware incident to the exchange of personal communications.

[80 FR 8533, Feb. 18, 2015]



Sec. 538.414  Loans or extensions of credit.

    (a) The prohibition in Sec. 538.205 applies to loans or extensions 
of credit to a person in Sudan, including overdraft protection on 
checking accounts, and the unlicensed renewal or rescheduling of credits 
or loans in existence as of the effective date, whether by affirmative 
action or operation of law.
    (b) The prohibition in Sec. 538.205 applies to financial services 
including loans or credits extended in any currency.



Sec. 538.415  Payments involving Sudan.

    Before a United States financial institution initiates a payment 
subject to the prohibitions contained in this part on behalf of any 
customer, or credits a transfer subject to such prohibitions to the 
account on its books of the ultimate beneficiary, the U.S. financial 
institution must determine that the transfer is not prohibited by this 
part.



Sec. 538.416  Payments from blocked accounts to U.S. exporters and
for other obligations prohibited.

    No debits may be made to a blocked account to pay obligations to 
U.S. persons or other persons, including payment for goods, technology 
or services exported prior to the effective date, except as authorized 
pursuant to this part.

[[Page 172]]



Sec. 538.417  Transshipments through Sudan.

    (a) The exportation or reexportation of goods, technology, or 
services to the Specified Areas of Sudan is exempt under Sec. 538.212(g) 
only if such goods, technology, or services do not transit or transship 
through any area of Sudan other than the Specified Areas of Sudan.
    (b) The importation into the United States of goods or services 
from, or originating in, the Specified Areas of Sudan is exempt under 
Sec. 538.212(g) only if such goods or services do not transit or 
transship through any area of Sudan other than the Specified Areas of 
Sudan.

    Note 1 to Sec. 538.417: See Sec. 538.537 for a general license 
authorizing the transshipment of goods, technology, and services through 
Sudan to or from the Republic of South Sudan, and related transactions.
    Note 2 to Sec. 538.417: See Sec. 538.532 for a general license 
authorizing humanitarian transshipments through areas of Sudan other 
than the Specified Areas of Sudan to or from the Specified Areas of 
Sudan.

[72 FR 61516, Oct. 31, 2007, as amended at 76 FR 76618, Dec. 8, 2011]



Sec. 538.418  Financial transactions in Sudan.

    (a) Any financial transaction with a depository institution located 
in an area of Sudan other than the Specified Areas of Sudan, e.g., 
Khartoum, remains prohibited.
    (b) Financial transactions are no longer prohibited by this part if:
    (1) The underlying activity is not prohibited by this part;
    (2) The financial transaction involves a third-country depository 
institution, or a Sudanese depository institution not owned or 
controlled by the Government of Sudan, that is located in the Specified 
Areas of Sudan; and
    (3) The financial transaction is not routed through a depository 
institution that is located in an area of Sudan other than the Specified 
Areas of Sudan or that is owned or controlled by the Government of 
Sudan, wherever located.
    (c) Example. A U.S. bank is instructed to transfer funds to the 
Abyei branch of a Sudanese bank that is not owned or controlled by the 
Government of Sudan. In order for the transfer to take place, the U.S. 
bank is required to route the funds through the Sudanese bank's 
headquarters, which is located in Khartoum. Due to the routing of the 
financial transaction through Khartoum, this transaction is prohibited 
and requires authorization from the Office of Foreign Assets Control. 
However, if the U.S. bank is able to bypass the Khartoum headquarters 
and transfer the funds directly to the Abyei branch of the Sudanese 
bank, then the transaction would not be prohibited.

[72 FR 61516, Oct. 31, 2007]



 Subpart E_Licenses, Authorizations, and Statements of Licensing Policy



Sec. 538.500  Licensing procedures.

    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.

[68 FR 53658, Sept. 11, 2003]



Sec. 538.501  Effect of license or authorization.

    (a) No license or other authorization contained in this part, or 
otherwise issued by the Office of Foreign Assets Control (OFAC), 
authorizes or validates any transaction effected prior to the issuance 
of such license or other authorization, unless specifically provided in 
such license or authorization.
    (b) No regulation, ruling, instruction, or license authorizes any 
transaction prohibited under this part unless the regulation, ruling, 
instruction, or license is issued by OFAC and specifically refers to 
this part. No regulation, ruling, instruction, or license referring to 
this part shall be deemed to authorize any transaction prohibited by any 
other part of this chapter unless the regulation, ruling, instruction, 
or license specifically refers to such part.
    (c) Any regulation, ruling, instruction, or license authorizing any 
transaction otherwise prohibited under this part has the effect of 
removing a prohibition contained in this part from the

[[Page 173]]

transaction, but only to the extent specifically stated by its terms. 
Unless the regulation, ruling, instruction, or license otherwise 
specifies, such an authorization does not create any right, duty, 
obligation, claim, or interest in, or with respect to, any property 
which would not otherwise exist under ordinary principles of law.
    (d) Nothing contained in this part shall be construed to supersede 
the requirements established under any other provision of law or to 
relieve a person from any requirement to obtain a license or other 
authorization from another department or agency of the U.S. Government 
in compliance with applicable laws and regulations subject to the 
jurisdiction of that department or agency. For example, exports of 
goods, services, or technical data that are not prohibited by this part 
or that do not require a license by OFAC nevertheless may require 
authorization by the U.S. Department of Commerce, the U.S. Department of 
State, or other agencies of the U.S. Government.
    (e) No license or other authorization contained in or issued 
pursuant to this part authorizes transfers of or payments from blocked 
property or debits to blocked accounts unless the license or other 
authorization explicitly authorizes the transfer of or payment from 
blocked property or the debit to a blocked account.
    (f) Any payment relating to a transaction authorized in or pursuant 
to this part that is routed through the U.S. financial system should 
reference the relevant OFAC general or specific license authorizing the 
payment to avoid the blocking or rejection of the transfer.

[80 FR 8533, Feb. 18, 2015]



Sec. 538.502  Exclusion from licenses and authorizations.

    The Director of the Office of Foreign Assets Control reserves the 
right to exclude any person, property, or transaction from the operation 
of any license, or from the privileges therein conferred, or to restrict 
the applicability thereof with respect to particular persons, property, 
transactions, or classes thereof. Such action shall be binding upon all 
persons receiving actual or constructive notice of such exclusion or 
restriction.



Sec. 538.503  Payments and transfers to blocked accounts in U.S. 
financial institutions.

    Any payment of funds or transfer of credit in which the Government 
of Sudan 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 only be 
made to another blocked account held in the same name.

    Note to Sec. 538.503: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers. See 
also Sec. 538.203 concerning the obligation to hold blocked funds in 
interest-bearing accounts.



Sec. 538.504  Entries in certain accounts for normal service charges
authorized.

    (a) U.S. financial institutions are hereby authorized to debit any 
blocked account with such U.S. financial institution in payment or 
reimbursement for normal service charges owed to such U.S. financial 
institution by the owner of such blocked account.
    (b) As used in this section, the term normal service charge shall 
include charges in payment or reimbursement for interest due; cable, 
telegraph, or telephone charges; postage costs; custody fees; small 
adjustment charges to correct bookkeeping errors; and, but not by way of 
limitation, minimum balance charges, notary and protest fees, and 
charges for reference books, photocopies, credit reports, transcripts of 
statements, registered mail, insurance, stationery and supplies, and 
other similar items.

[[Page 174]]



Sec. 538.505  Provision of certain legal services to the Government 
of Sudan, persons in Sudan, or benefitting Sudan.

    (a) The provision to the Government of Sudan, to a person in Sudan, 
or in circumstances in which the benefit is otherwise received in Sudan, 
of the legal services set forth in paragraph (b) of this section is 
authorized, provided that all receipts of payment therefor must be 
specifically licensed. The provision of any other legal services as 
interpreted in Sec. 538.406 requires the issuance of a specific license.
    (b) Specific licenses may be issued, on a case-by-case basis, 
authorizing receipt, from unblocked sources, of payment of professional 
fees and reimbursement of incurred expenses for the following legal 
services by U.S. persons to the Government of Sudan or to a person in 
Sudan:
    (1) Provision of legal advice and counseling to the Government of 
Sudan, to a person in Sudan, or in circumstances in which the benefit is 
otherwise received in Sudan, on the requirements of and compliance with 
the laws of any jurisdiction within the United States, provided that 
such advice and counseling is not provided to facilitate transactions in 
violation of this part;
    (2) Representation of the Government of Sudan or a person in Sudan 
when named as a defendant in or otherwise made a party to domestic U.S. 
legal, arbitration, or administrative proceedings;
    (3) Initiation of domestic U.S. legal, arbitration, or 
administrative proceedings in defense of property interests subject to 
U.S. jurisdiction of the Government of Sudan, or of a person in Sudan;
    (4) Representation of the Government of Sudan or a person in Sudan 
before any federal agency with respect to the imposition, 
administration, or enforcement of U.S. sanctions against Sudan; and
    (5) Provision of legal services in any other context in which 
prevailing U.S. law requires access to legal counsel at public expense.
    (c) 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 a property interest 
of the Government of Sudan is prohibited unless specifically licensed in 
accordance with Sec. 538.202(e).



Sec. 538.506  30-day delayed effective date for pre-November 4, 1997
trade contracts involving Sudan.

    (a) Pre-existing trade contracts. Trade transactions required under 
a contract entered into prior to November 4, 1997 (a ``pre-existing 
trade contract''), otherwise prohibited by this part, including the 
importation of goods or services of Sudanese origin or the exportation 
of goods, services, or technology that was authorized under applicable 
Federal regulations in force immediately prior to November 4, 1997, are 
authorized without specific licensing by the Office of Foreign Assets 
Control as follows:
    (1) Exports or reexports are authorized until 12:01 a.m. EST, 
December 4, 1997, and non-financing activity by U.S. persons incidental 
to the performance of the pre-existing trade contract (such as the 
provision of transportation or insurance) is authorized through 12:01 
a.m. EST, February 2, 1998, if the pre-existing trade contract is for:
    (i) The exportation of goods, services, or technology from the 
United States or a third country that was authorized under applicable 
Federal regulations in force immediately prior to November 4, 1997; or
    (ii) The reexportation of goods or technology that was authorized 
under applicable Federal regulations in force immediately prior to 
November 4, 1997.
    (2) If the pre-existing trade contract is for the importation of 
goods or services of Sudanese origin or other trade transactions 
relating to goods or services of Sudanese origin or owned or controlled 
by the Government of Sudan, importations under the pre-existing trade 
contract are authorized until 12:01 a.m. EST, December 4, 1997.
    (3) For purposes of this section, goods are considered to be 
exported upon final loading aboard the exporting conveyance in the 
country of export. Goods are considered to be imported upon arrival in 
the jurisdiction of the country of importation.

[[Page 175]]

    (b)(1) Financing for pre-existing trade contracts. In general, no 
financing services prohibited by this part may be performed after 12:01 
a.m. EST, November 4, 1997. However, letters of credit and other 
financing agreements with respect to the trade transactions authorized 
in paragraph (a) of this section may be performed according to their 
terms, and may be extended or renewed, except that:
    (i) Any payment required to be made to the Government of Sudan or 
any person blocked pursuant to this part or otherwise, including 
payments authorized with respect to trade transactions described in 
paragraph (a) of this section, must be made into a blocked account in 
the United States; and
    (ii) No payment may be made from a blocked account unless authorized 
by a specific license issued by the Office of Foreign Assets Controls.
    (2) Specific licenses may be issued by the Office of Foreign Asset 
Controls on a case-by-case basis to permit a U.S. bank to debit a 
blocked account of the Government of Sudan for funds held as collateral 
under an irrevocable letter of credit issued or confirmed by it, or a 
letter of credit reimbursement confirmed by it, for goods, services or 
technology exported, or goods or technology reexported, prior to 12:01 
a.m. EST, December 4, 1997, directly or indirectly to Sudan, or to third 
countries for an entity operated from Sudan, or for the benefit of the 
Government of Sudan. The application for a license must:
    (i) Present evidence satisfactory to the Office of Foreign Asset 
Controls that the exportation or reexportation occurred prior to 12:01 
a.m. EST, December 4, 1997; and
    (ii) Include an explanation of the facts and circumstances 
surrounding the entry and execution of the export or reexport 
transaction, including the names and addresses of all Sudanese 
participants in the transaction and all Sudanese persons having an 
ownership interest in the beneficiary of the letter of credit.
    (c) Blocked Government of Sudan accounts. Nothing in this section 
permits debits to a blocked account of the Government of Sudan absent 
the issuance of a specific license by Office of Foreign Asset Controls 
authorizing such a debit. The operation of an account of the Government 
of Sudan in a financial institution does not constitute a trade 
transaction for purposes of this section.
    (d) Existence of contract. The existence of a contract will be 
determined with reference to the principles contained in Article 2 of 
the Uniform Commercial Code.
    (e) Reporting requirement. Although a specific license from Office 
of Foreign Asset Controls is not required for any transaction authorized 
in paragraph (a) of this section, any U.S. person engaging in a 
transaction described in paragraph (a) of this section is required to 
report such transaction immediately to the Office of Foreign Asset 
Controls and provide a description of the underlying trade contract. 
Such reports should be directed to the Office of Foreign Assets Control, 
Attn: Compliance Programs Division/Sudan Contracts, 1500 Pennsylvania 
Avenue, NW., Annex-2nd Floor, Washington, DC 20220. Such reports may be 
made by facsimile transmission to 202/622-1657.
    (f) Licensing and reporting provisions. For provisions relating to 
applications to the Office of Foreign Asset Controls for specific 
licenses and reporting requirements, see Secs. 501.606 and 501.808 of 
this chapter.



Sec. 538.507  Reexports by non-U.S. persons.

    (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:
    (1) Have been incorporated into another product outside the United 
States and constitute 10 percent or less by value of that product 
exported from a third country; or
    (2) Have been substantially transformed outside the United States.

    Note to paragraph (a) of Sec. 538.507: Notwithstanding the 
authorization set forth in

[[Page 176]]

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.

    (b) Goods and technology not 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 of U.S. origin, the exportation of which to Sudan is not 
subject to any export license application requirements under any other 
United States regulations, is authorized under this section.

    Note to paragraph (b) of Sec. 538.507: However, the reexportation by 
non-U.S. persons of U.S.-origin goods, technology or software classified 
as EAR99 under the Export Administration Regulations (15 CFR parts 730 
through 774) may require specific authorization from the Department of 
Commerce, Bureau of Industry and Security. See, for example, the end-use 
and end-user restrictions set forth in 15 CFR part 744.

[70 FR 34062, June 13, 2005]



Sec. 538.508  Certain payments by the Government of Sudan of 
obligations to persons within the United States authorized.

    Specific licenses may be issued on a case-by-case basis to permit 
the transfer of funds after the effective date by, through, or to any 
U.S. financial institution or other U.S. person not blocked pursuant to 
this chapter, from a non-blocked account outside of the United States, 
solely for the purpose of payment of obligations of the Government of 
Sudan to persons or accounts within the United States, provided that the 
obligation arose prior to the effective date, and the payment requires 
no debit to a blocked account.



Sec. 538.509  Importation of certain Sudanese-origin services 
authorized; activities related to travel to the United States
by Sudanese persons authorized.

    (a) The importation of Sudanese-origin services into the United 
States or other dealing in such services is authorized where such 
services are performed in the United States by a Sudanese citizen or 
national and either are for the purpose of or directly relate to 
participating in a public conference, performance, exhibition or similar 
event.
    (b) Persons otherwise qualified for a non-immigrant visa under 
categories A-3 and G-5 (attendants, servants, and personal employees of 
aliens in the United States on diplomatic status), D (crewmen), F 
(students), I (information media representatives), J (exchange 
visitors), M (non-academic students), O and P (aliens with extraordinary 
ability, athletes, artists and entertainers), Q (international cultural 
exchange visitors), R (religious workers), or S (witnesses) are 
authorized to carry out in the United States those activities for which 
such a visa has been granted by the U.S. State Department.
    (c) Persons otherwise qualified for a visa under categories E-2 
(treaty investor), H (temporary worker), or L (intra-company transferee) 
and all immigrant visa categories are authorized to carry out in the 
United States those activities for which such a visa has been granted by 
the U.S. State Department, provided that the persons are not coming to 
the United States to work as an agent, employee or contractor of the 
Government of Sudan or a business entity or other organization in Sudan.
    (d) U.S. persons are authorized to provide services to persons in 
Sudan in connection with the filing of visa applications with the U.S. 
Department of State or the Department of Homeland Security's U.S. 
Citizenship and Immigration Services for the visa categories listed in 
paragraphs (b) and (c) of this section.

[76 FR 76619, Dec. 8, 2011]



Sec. 538.510  Importation and exportation of certain gifts authorized.

    The importation into the United States of Sudanese-origin goods, and 
the exportation from the United States of goods, is authorized for goods 
sent as gifts to persons provided that the value of the gift is not more 
than $100; the goods are of a type and in quantities normally given as 
gifts between individuals; and the goods are not controlled for chemical 
and biological weapons (CB), missile technology (MT), national security 
(NS), or nuclear proliferation (NP)(see Commerce Control

[[Page 177]]

List, 15 CFR part 774 of the Export Administration Regulations).



Sec. 538.511  Accompanied baggage authorized.

    (a) Persons entering the United States directly or indirectly from 
Sudan are authorized to import into the United States Sudanese-origin 
accompanied baggage normally incident to travel.
    (b) Persons leaving the United States for Sudan are authorized to 
export from the United States accompanied baggage normally incident to 
travel.
    (c) For purposes of this section, the term accompanied baggage 
normally incident to travel includes only baggage that:
    (1) Accompanies the traveler on the same aircraft, train, or 
vehicle;
    (2) Includes only articles that are necessary for personal use 
incident to travel, are not intended for any other person or for sale, 
and are not otherwise prohibited from importation or exportation under 
applicable United States laws.



Sec. 538.512  Transactions related to telecommunications and mail 
authorized.

    (a)(1) Except as provided in paragraph (a)(2) of this section, all 
transactions with respect to the receipt and transmission of 
telecommunications involving Sudan are authorized, provided that no 
payment pursuant to this section may involve any debit to a blocked 
account of the Government of Sudan on the books of a U.S. financial 
institution.
    (2) This section does not authorize:
    (i) The provision, sale, or lease of telecommunications equipment or 
technology; or
    (ii) The provision, sale, or lease of capacity on telecommunications 
transmission facilities (such as satellite or terrestrial network 
connectivity).
    (b) All transactions of common carriers incident to the receipt or 
transmission of mail and packages between the United States and Sudan 
are authorized, provided that the importation or exportation of such 
mail and packages is exempt from or authorized pursuant to this part.

    Note to Sec. 538.512: See Sec. 538.533 for a general license 
authorizing the exportation to Sudan of certain services, software, and 
hardware incident to the exchange of personal communications.

[80 FR 8533, Feb. 18, 2015]



Sec. 538.513  [Reserved]



Sec. 538.514  Certain transactions related to patents, trademarks
and copyrights authorized.

    (a) All of the following transactions in connection with patent, 
trademark, copyright or other intellectual property protection in the 
United States or Sudan are authorized:
    (1) The filing and prosecution of any application to obtain a 
patent, trademark, copyright or other form of intellectual property 
protection;
    (2) The receipt of a patent, trademark, copyright or other form of 
intellectual property protection;
    (3) The renewal or maintenance of a patent, trademark, copyright or 
other form of intellectual property protection; and
    (4) The filing and prosecution of opposition or infringement 
proceedings with respect to a patent, trademark, copyright or other form 
of intellectual property protection, or the entrance of a defense to any 
such proceedings.
    (b) This section authorizes the payment of fees currently due to the 
United States Government, or of the reasonable and customary fees and 
charges currently due to attorneys or representatives within the United 
States, in connection with the transactions authorized in paragraph (a) 
of this section. Payment effected pursuant to the terms of this 
paragraph may not be made from a blocked account.
    (c) This section authorizes the payment of fees currently due to the 
Government of Sudan, or of the reasonable and customary fees and charges 
currently due to attorneys or representatives within Sudan, in 
connection with the transactions authorized in paragraph (a) of this 
section.
    (d) Nothing in this section affects obligations under any other 
provision of law.

[[Page 178]]



Sec. 538.515  Sudanese diplomatic missions in the United States.

    (a) The importation of goods or services into the United States by, 
and the provision of goods or services in the United States to, the 
diplomatic missions of the Government of Sudan to the United States and 
the United Nations are authorized, provided that:
    (1) The goods or services are for the conduct of the official 
business of the missions, or for personal use of the employees of the 
missions, and are not for resale;
    (2) The transaction does not involve the purchase, sale, financing, 
or refinancing of real property;
    (3) The transaction is not otherwise prohibited by law; and
    (4) The transaction is conducted through an account at a U.S. 
financial institution specifically licensed by OFAC.

    Note to paragraph (a)(4) of Sec. 538.515: U.S. financial 
institutions are required to obtain specific licenses to operate 
accounts for, or extend credit to, the diplomatic missions of the 
Government of Sudan to the United States and the United Nations.

    (b) The importation of goods or services into the United States by, 
and the provision of goods or services in the United States to, the 
employees of the diplomatic missions of the Government of Sudan to the 
United States and the United Nations are authorized, provided that:
    (1) The goods or services are for personal use of the employees of 
the missions, and are not for resale; and
    (2) The transaction is not otherwise prohibited by law.

    Note to Sec. 538.515: The importation of goods and services into the 
United States by the Government of the Republic of South Sudan not 
involving transit or transshipment through Sudan is not prohibited and 
therefore requires no authorization. Similarly, the provision of goods, 
technology, and services in the United States to the Government of the 
Republic of South Sudan and its employees is not prohibited and also 
requires no authorization. See Sec. 538.537 for a general license 
authorizing the transshipment of goods, technology, and services through 
Sudan to or from the Republic of South Sudan, and related transactions.

[74 FR 27434, June 10, 2009, as amended at 76 FR 76619, Dec. 8, 2011]



Sec. 538.516  Diplomatic pouches.

    The following transactions are authorized:
    (a) The importation into the United States from Sudan, or the 
exportation from the United States to Sudan, of diplomatic pouches and 
their contents; and
    (b) The exportation or reexportation, directly or indirectly, from 
the United States or by a U.S. person, wherever located, of any goods or 
technology to a third-country government, or to its contractors or 
agents, for shipment to Sudan via a diplomatic pouch. To the extent 
necessary, this section also authorizes the shipment of such goods or 
technology by the third-country government to Sudan via a diplomatic 
pouch.

    Note to paragraph (b) of Sec. 538.516: The exportation or 
reexportation of certain U.S.-origin goods or technology to a third-
country government, or to its contractors or agents, may require 
authorization by the U.S. Department of Commerce under the Export 
Administration Regulations (15 CFR parts 730 et seq.).

[72 FR 15832, Apr. 3, 2007]



Sec. 538.517  Allowable payments for overflights of Sudanese airspace.

    Payments to Sudan of charges for services rendered by the Government 
of Sudan in connection with the overflight of Sudan or emergency landing 
in Sudan of aircraft owned by a United States person or registered in 
the United States are authorized.



Sec. 538.518  Household goods and personal effects.

    (a) The exportation from the United States to Sudan of household and 
personal effects, including baggage and articles for family use, of 
persons departing the United States to relocate in Sudan is authorized 
provided the articles included in such effects have been actually used 
by such persons or by family members accompanying them, are not intended 
for any other person or for sale, and are not otherwise prohibited from 
exportation.
    (b) The importation of Sudanese-origin household and personal 
effects, including baggage and articles for family use, of persons 
arriving in the United

[[Page 179]]

States is authorized; to qualify, articles included in such effects must 
have been actually used abroad by such persons or by other family 
members arriving from the same foreign household, must not be intended 
for any other person or for sale, and must not be otherwise prohibited 
from importation.



Sec. 538.519  Aircraft and maritime safety.

    Specific licenses may be issued on a case-by-case basis for the 
exportation and reexportation of goods, services, and technology to 
insure the safety of civil aviation and safe operation of U.S.-origin 
commercial passenger aircraft, and to ensure the safety of ocean-going 
maritime traffic in international waters.



Sec. 538.520  Extensions or renewals of loans and credits.

    (a) Specific licenses may be issued on a case-by-case basis for 
rescheduling loans or otherwise extending the maturities of existing 
loans, and for charging fees or interest at commercially reasonable 
rates in connection therewith, provided that no new funds or credits are 
thereby transferred or extended to Sudan or the Government of Sudan.
    (b) Specific licenses may be issued on a case-by-case basis, at the 
request of the account party, for the extension or renewal of a letter 
of credit or a standby letter of credit issued or confirmed by a U.S. 
financial institution.



Sec. 538.521  Registration of nongovernmental organizations for 
humanitarian or religious activities.

    (a) Registration numbers may be issued on a case-by-case basis for 
the registration of nongovernmental organizations involved in 
humanitarian or religious activities in Sudan, authorizing transactions 
by such organizations otherwise prohibited by this part, including the 
exportation of services, goods, software, or technology to Sudan and the 
transfer of funds to and from Sudan for the purpose of relieving human 
suffering. Applicants for registration numbers must comply with the 
requirements of Sec. 501.801(c), 31 CFR chapter V.
    (b) This section does not authorize transfers from blocked accounts.

    Note to Sec. 538.521: Registration does not excuse a U.S. person 
from compliance with other applicable U.S. laws governing the 
exportation or reexportation of U.S.-origin goods, software, or 
technology (including technical data). See, e.g., the Export 
Administration Regulations administered by the U.S. Department of 
Commerce (15 CFR parts 730-774).

[66 FR 2728, Jan. 11, 2001]



Sec. 538.522  Transactions related to U.S. citizens residing in Sudan.

    U.S. persons are authorized to engage in transactions in Sudan 
ordinarily incident to the routine and necessary maintenance and other 
personal living expenses of U.S. citizens who reside on a permanent 
basis in Sudan.



Sec. 538.523  Commercial sales, exportation, and reexportation of
agricultural commodities, medicine, and medical devices.

    (a)(1) One-year specific license requirement. The exportation or 
reexportation of the excluded food items specified in paragraph 
(a)(3)(iii) of this section, agricultural commodities that do not fall 
within the definition of food set forth in paragraph (a)(3)(ii) of this 
section, food (as defined in paragraph (a)(3)(ii) of this section) 
intended for military or law enforcement purchasers or importers, 
medicine or medical devices to the Government of Sudan, to any 
individual or entity in an area of Sudan other than the Specified Areas 
of Sudan, or to persons in third countries purchasing specifically for 
resale to any of the foregoing, shall only be made pursuant to a one-
year specific license issued by the Office of Foreign Assets Control for 
contracts entered into during the one-year period of the license and 
shipped within the 12-month period beginning on the date of the signing 
of the contract. No specific license will be granted for the exportation 
or reexportation of agricultural commodities, medicine, or medical 
devices to any entity or individual in Sudan promoting international 
terrorism, to any narcotics trafficking entity designated pursuant to 
Executive Order 12978 of October 21, 1995 (60 FR 54579, October 24, 
1995) or the Foreign Narcotics Kingpin Designation Act (21 U.S.C. 1901-
1908), or to any foreign organization, group, or persons subject to

[[Page 180]]

any restriction for its or their involvement in weapons of mass 
destruction or missile proliferation. Executory contracts entered into 
pursuant to paragraph (b)(2) of this section prior to the issuance of 
the one-year specific license described in this paragraph shall be 
deemed to have been signed on the date of issuance of that one-year 
specific license (and, therefore, the exporter is authorized to make 
shipments under that contract within the 12-month period beginning on 
the date of issuance of the one-year specific license).
    (2) General license for the Specified Areas of Sudan. The 
exportation or reexportation of agricultural commodities (including bulk 
agricultural commodities listed in appendix A to this part), medicine, 
and medical devices to any individual or entity in the Specified Areas 
of Sudan, or to persons in third countries purchasing specifically for 
resale to any of the foregoing, and the conduct of related transactions, 
including, but not limited to, the making of shipping and cargo 
inspection arrangements, the obtaining of insurance, the arrangement of 
financing and payment, shipping of the goods, receipt of payment, and 
the entry into contracts (including executory contracts), are hereby 
authorized, provided that all such exports or reexports are shipped 
within the 12-month period beginning on the date of the signing of the 
contract for export or reexport, and provided that such activities or 
transactions relating to the exportation or reexportation of the 
excluded food items specified in paragraph (a)(3)(iii) of this section, 
agricultural commodities that do not fall within the definition of food 
set forth in paragraph (a)(3)(ii) of this section, food (as defined in 
paragraph (a)(3)(ii) of this section) intended for military or law 
enforcement purchasers or importers, medicine, and medical devices do 
not involve any property or interests in property of the Government of 
Sudan and do not relate to the petroleum or petrochemical industries in 
Sudan. The transshipment of agricultural commodities that fall within 
the definition of food set forth in paragraph (a)(3)(ii) of this 
section, other than the excluded food items specified in paragraph 
(a)(3)(iii) of this section and other than food intended for military or 
law enforcement purchasers or importers, through an area of Sudan other 
than the Specified Areas of Sudan destined for the Specified Areas of 
Sudan also is authorized by this general license. Nothing in this 
general license authorizes the transshipment of the excluded food items 
specified in paragraph (a)(3)(iii) of this section, agricultural 
commodities that do not fall within the definition of food set forth in 
paragraph (a)(3)(ii) of this section, food (as defined in paragraph 
(a)(3)(ii) of this section) intended for military or law enforcement 
purchasers or importers, medicine, and medical devices through an area 
of Sudan other than the Specified Areas of Sudan destined for the 
Specified Areas of Sudan. See Sec. 538.417.

    Note 1 to Sec. 538.523(a)(2): Consistent with section 906(a)(1) of 
the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 
7205), each year by the anniversary of its effective date of September 
9, 2009, the Office of Foreign Assets Control will determine whether to 
revoke this general license. Unless revoked, the general license will 
remain in effect.
    Note 2 to Sec. 538.523(a)(2): See Secs. 538.417 and 538.418 for 
additional requirements with respect to transshipments through, and 
financial transactions in, Sudan.

    (3)(i) General license for the exportation or reexportation of food. 
Except as provided in paragraphs (a)(3)(iii) and (a)(3)(iv) of this 
section, the exportation or reexportation of food (including bulk 
agricultural commodities listed in appendix A to this part) to the 
Government of Sudan, to any individual or entity in an area of Sudan 
other than the Specified Areas of Sudan, or to persons in third 
countries purchasing specifically for resale to any of the foregoing, 
and the conduct of related transactions, including, but not limited to, 
the making of shipping and cargo inspection arrangements, the obtaining 
of insurance, the arrangement of financing and payment, shipping of the 
goods, receipt of payment, and the entry into contracts (including 
executory contracts), are hereby authorized, provided that all such 
exports or reexports are shipped within the 12-month period beginning on 
the date of the signing of the contract for export or reexport.

[[Page 181]]

    (ii) Definition of food. For purposes of this general license, the 
term food means items that are intended to be consumed by and provide 
nutrition to humans or animals in Sudan, including vitamins and 
minerals, food additives and supplements, and bottled drinking water, 
and seeds that germinate into items that are intended to be consumed by 
and provide nutrition to humans or animals in Sudan. For purposes of 
this general license, the term food does not include alcoholic 
beverages, cigarettes, gum, or fertilizer.
    (iii) Excluded food items. Paragraph (a)(3)(i) of this section does 
not authorize the exportation or reexportation of the following food 
items: castor beans, castor bean seeds, raw eggs, fertilized eggs (other 
than fish and shrimp roe), dried egg albumin, live animals, Rosary/
Jequirity peas, non-food-grade gelatin powder, and peptones and their 
derivatives.
    (iv) Excluded persons. Paragraph (a)(3)(i) of this section does not 
authorize the exportation or reexportation of food to military or law 
enforcement purchasers or importers.

    Note 1 to Sec. 538.523(a)(3): Consistent with section 906(a)(1) of 
the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 
7205), each year by the anniversary of its effective date on October 12, 
2011, the Office of Foreign Assets Control will determine whether to 
revoke this general license. Unless revoked, the general license will 
remain in effect.
    Note 2 to Sec. 538.523(a)(3): See Sec. 538.418 for additional 
requirements with respect to financial transactions in Sudan.

    (b) General license for arrangement of exportation or reexportation 
of covered products. (1) With respect to sales pursuant to paragraph 
(a)(1) of this section, the making of shipping arrangements, cargo 
inspection, obtaining of insurance, and arrangement of financing 
(consistent with Sec. 538.525) for the exportation or reexportation of 
the excluded food items specified in paragraph (a)(3)(iii) of this 
section, agricultural commodities that do not fall within the definition 
of food set forth in paragraph (a)(3)(ii) of this section, food (as 
defined in paragraph (a)(3)(ii) of this section) intended for military 
or law enforcement purchasers or importers, medicine, or medical devices 
to the Government of Sudan, to any individual or entity in an area of 
Sudan other than the Specified Areas of Sudan, or to persons in third 
countries purchasing specifically for resale to any of the foregoing, 
are authorized.
    (2) Entry into executory contracts (including executory pro forma 
invoices, agreements in principle, or executory offers capable of 
acceptance such as bids in response to public tenders) for the 
exportation or reexportation of the excluded food items specified in 
paragraph (a)(3)(iii) of this section, agricultural commodities that do 
not fall within the definition of food set forth in paragraph (a)(3)(ii) 
of this section, food (as defined in paragraph (a)(3)(ii) of this 
section) intended for military or law enforcement purchasers or 
importers, medicine, or medical devices to the Government of Sudan, to 
any individual or entity in an area of Sudan other than the Specified 
Areas of Sudan, or to persons in third countries purchasing specifically 
for resale to any of the foregoing, is authorized, provided that the 
performance of an executory contract is expressly made contingent upon 
the prior issuance of the one-year specific license described in 
paragraph (a)(1) of this section.
    (c) Instructions for obtaining one-year specific licenses. In order 
to obtain the one-year specific license described in paragraph (a)(1) of 
this section, the exporter must provide to the Office of Foreign Assets 
Control:
    (1) The applicant's full legal name (if the applicant is a business 
entity, the state or jurisdiction of incorporation and principal place 
of business).
    (2) The applicant's mailing and street address (so that OFAC may 
reach a responsible point of contact, the applicant should also include 
the name of the individual(s) responsible for the application and 
related commercial transactions along with their telephone and fax 
numbers and, if available, e-mail addresses).
    (3) The names, mailing addresses, and if available, fax and 
telephone numbers of all parties with an interest in the transaction. If 
the goods are being exported or reexported to a purchasing agent in 
Sudan, the exporter must identify the agent's principals at the 
wholesale level for whom the purchase

[[Page 182]]

is being made. If the goods are being exported or reexported to an 
individual, the exporter must identify any organizations or entities 
with which the individual is affiliated that have an interest in the 
transaction.
    (4) A description of all items to be exported or reexported pursuant 
to the requested one-year license, including a statement that the item 
is classified as EAR 99, and, if necessary, documentation sufficient to 
verify that the items to be exported or reexported are classified as EAR 
99 and do not fall within any of the limitations contained in paragraph 
(d) of this section.
    (5) An Official Commodity Classification of EAR 99 issued by the 
Department of Commerce, Bureau of Industry and Security (``BIS''), 
certifying that the product is EAR 99, is required to be submitted to 
OFAC with the request for a license authorizing the exportation or 
reexportation of all fertilizers, live horses, western red cedar, and 
medical devices other than basic medical supplies, such as syringes, 
bandages, gauze and similar items, that are specifically listed on BIS's 
Web site, http://www.bis.doc.gov/policiesand

regulations/tradesanctionsreformexport

enhancementact.html. Medical supplies that are specifically listed on 
BIS's Web site may not require an Official Commodity Classification of 
EAR 99 from BIS. BIS will also provide a list on its Web site of 
medicines that are ineligible for a one-year license under these 
procedures. Exporters should seek an Official Commodity Classification 
of EAR 99 from BIS for medicines and submit a copy to OFAC. See 15 CFR 
745.3 for instructions for obtaining Official Commodity Classification 
of EAR 99 from BIS.
    (d) Limitations. (1) Nothing in this section or in any license 
issued pursuant to paragraph (a) of this section relieves the exporter 
from compliance with the export license application requirements of 
another Federal agency.
    (2) Nothing in this section or in any license issued pursuant to 
paragraph (a) of this section authorizes the exportation or 
reexportation of any agricultural commodity, medicine, or medical device 
controlled on the United States Munitions List established under section 
38 of the Arms Export Control Act (22 U.S.C. 2778); controlled on any 
control list established under the Export Administration Act of 1979 or 
any successor statute (50 U.S.C. App. 2401 et seq.); or used to 
facilitate the development or production of a chemical or biological 
weapon or weapon of mass destruction.
    (3) Nothing in this section or in any license issued pursuant to 
paragraph (a) of this section affects prohibitions on the sale or supply 
of U.S. technology or software used to manufacture agricultural 
commodities, medicine, or medical devices, such as technology to design 
or produce biotechnological items or medical devices.
    (4) Nothing in this section or in any license issued pursuant to 
paragraph (a) of this section affects U.S. nonproliferation export 
controls, including end-user and end-use controls maintained under the 
Enhanced Proliferation Control Initiative.
    (5) Nothing in this section authorizes any transaction or dealing 
with a person whose property and interests in property are blocked 
under, or who is designated or otherwise subject to any sanction under, 
the terrorism, proliferation of weapons of mass destruction, or 
narcotics trafficking programs administered by OFAC, 31 CFR parts 536, 
544, 594, 595, 597, and 598, or with any foreign organization, group, or 
person subject to any restriction for its involvement in weapons of mass 
destruction or missile proliferation, or involving property blocked 
pursuant to this chapter or any other activity prohibited by this 
chapter not otherwise authorized in or pursuant to this part.
    (e) Covered items. For the purposes of this part, agricultural 
commodities, medicine, and medical devices are defined below.
    (1) Agricultural commodities. For the purposes of this part, 
agricultural commodities are:
    (i) Products that are not listed on the Commerce Control List in the 
Export Administration Regulations, 15 CFR part 774, supplement no. 1, 
and that fall within the term ``agricultural commodity'' as defined in 
section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602); and

[[Page 183]]

    (ii) Products not listed on the Commerce Control List in the Export 
Administration Regulations, 15 CFR part 774, supplement no. 1, that are 
intended for ultimate use in Sudan as:
    (A) Food for humans (including raw, processed, and packaged foods; 
live animals; vitamins and minerals; food additives or supplements; and 
bottled drinking water) or animals (including animal feeds);
    (B) Seeds for food crops;
    (C) Fertilizers or organic fertilizers; or
    (D) Reproductive materials (such as live animals, fertilized eggs, 
embryos, and semen) for the production of food animals.
    (2) Medicine. For the purposes of this part, the term medicine has 
the same meaning given the term ``drug'' in section 201 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not include any 
item listed on the Commerce Control List in the Export Administration 
Regulations, 15 CFR part 774, supplement no. 1 (excluding items 
classified as EAR 99).
    (3) Medical device. For the purposes of this part, the term medical 
device has the meaning given the term ``device'' in section 201 of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not 
include any item listed on the Commerce Control List in the Export 
Administration Regulations, 15 CFR part 774, supplement no. 1 (excluding 
items classified as EAR 99).
    (f) Excluded items. For the purposes of this part, agricultural 
commodities do not include furniture made from wood; clothing 
manufactured from plant or animal materials; agricultural equipment 
(whether hand tools or motorized equipment); pesticides, insecticides, 
or herbicides; or cosmetics (unless derived entirely from plant 
materials).

[74 FR 61032, Nov. 23, 2009, as amended at 76 FR 63194, Oct. 12, 2011]



Sec. 538.524  [Reserved]



Sec. 538.525  Payment for and financing of commercial sales of certain
agricultural commodities, medicine, and medical devices.

    (a) General license for payment terms. The following payment terms 
for sales, pursuant to Sec. 538.523(a)(1), of the excluded food items 
specified in Sec. 538.523(a)(3)(iii), agricultural commodities that do 
not fall within the definition of food set forth in 
Sec. 538.523(a)(3)(ii), food (as defined in Sec. 538.523(a)(3)(ii)) 
intended for military or law enforcement purchasers or importers, 
medicine, or medical devices to the Government of Sudan, to any 
individual or entity in an area of Sudan other than the Specified Areas, 
or to persons in third countries purchasing specifically for resale to 
any of the foregoing are authorized:
    (1) Payment of cash in advance;
    (2) Sales on open account, provided that the account receivable may 
not be transferred by the person extending the credit; or
    (3) Financing by third-country financial institutions that are 
neither United States persons nor Government of Sudan entities. Such 
financing may be confirmed or advised by U.S. financial institutions.
    (b) Specific licenses for alternate payment terms. Specific licenses 
may be issued on a case-by-case basis for payment terms and trade 
financing not authorized by the general license in paragraph (a) of this 
section for sales pursuant to Sec. 538.523(a)(1). See Sec. 501.801(b) of 
this chapter for specific licensing procedures.
    (c) No debits to blocked accounts. Nothing in this section 
authorizes payment terms or trade financing involving a debit to an 
account of the Government of Sudan blocked pursuant to this part.
    (d) Transfers through the U.S. financial system. Before a United 
States financial institution initiates a payment on behalf of any 
customer, or credits a transfer to the account on its books of the 
ultimate beneficiary, the United States financial institution must 
determine that the underlying transaction is not prohibited by this 
part. Any payment relating to a transaction authorized in or pursuant to 
Sec. 538.523 or Sec. 538.526 that is routed through the U.S. financial 
system must reference the relevant Office of Foreign Assets Control 
license authorizing the payment to avoid the blocking or rejection of 
the transfer.
    (e) Notwithstanding any other provision of this part, no commercial 
exportation to Sudan may be made with

[[Page 184]]

United States Government assistance, including United States foreign 
assistance, United States export assistance, and any United States 
credit or guarantees absent a Presidential waiver.

[74 FR 61033, Nov. 23, 2009, as amended at 76 FR 63195, Oct. 12, 2011]



Sec. 538.526  Brokering commercial sales of agricultural commodities,
medicine, and medical devices.

    (a) General license for brokering sales by U.S. persons. United 
States persons are authorized to provide brokerage services on behalf of 
U.S. persons for the sales and exportations or reexportations by United 
States persons that are described in paragraphs (a)(1), (a)(2), and 
(a)(3) of Sec. 538.523, provided that the sale and exportation or 
reexportation is authorized, as applicable, by a one-year specific 
license issued pursuant to paragraph (a)(1) of Sec. 538.523 or by one of 
the general licenses set forth in paragraphs (a)(2) and (3) of 
Sec. 538.523.
    (b) Specific licensing for brokering sales by non-U.S. persons of 
bulk agricultural commodities. Specific licenses may be issued on a 
case-by-case basis to permit United States persons to provide brokerage 
services on behalf of non-United States, non-Sudanese persons for the 
sale and exportation or reexportation of bulk agricultural commodities 
to the Government of Sudan, to any individual or entity in an area of 
Sudan other than the Specified Areas of Sudan, or to persons in third 
countries purchasing specifically for resale to the foregoing. Specific 
licenses issued pursuant to this section will authorize the brokering 
only of sales that:
    (1) Are limited to the bulk agricultural commodities listed in 
appendix A to this part 538;
    (2) Are to purchasers permitted pursuant to Sec. 538.523(a)(1); and

    Note to paragraph (b)(2) of Sec. 538.526: Requests for specific 
licenses to provide brokerage services under this paragraph must include 
all of the information described in Sec. 538.523(c).

    (3) Make any performance involving the exportation or reexportation 
of any goods, technology or services (including technical data, 
software, or information) that are subject to license application 
requirements of another Federal agency contingent upon the prior 
authorization of that agency. (For example, items classified EAR 99 
under the Export Administration Regulations, 15 CFR parts 730 through 
774, may in certain instances require a license from the Department of 
Commerce, Bureau of Industry and Security. See, e.g., 15 CFR 
736.2(b)(5), 744.2 through 744.4, 744.7, and 744.10; see also 22 CFR 
123.9.)
    (c) No debit to blocked accounts. Payment for any brokerage fee 
earned pursuant to this section may not involve a debit to an account 
blocked pursuant to this part.
    (d) Recordkeeping and reporting requirements. Attention is drawn to 
the recordkeeping, retention, and reporting requirements of 
Secs. 501.601 and 501.602.

[74 FR 61033, Nov. 23, 2009, as amended at 76 FR 63195, Oct. 12, 2011]



Sec. 538.527  Operation of accounts.

    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 Sec. 538.305, is authorized, 
provided that transactions processed through the account:
    (a) Are of a personal nature and not for use in supporting or 
operating a business;
    (b) Do not involve transfers directly or indirectly to Sudan or for 
the benefit of individuals ordinarily resident in Sudan unless 
authorized by Sec. 538.528; and
    (c) Are not otherwise prohibited by this part.

[70 FR 34062, June 13, 2005]



Sec. 538.528  Noncommercial, personal remittances.

    (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 Sec. 538.305, in cases in 
which the transfer involves a noncommercial, personal remittance, 
provided the transfer is not by, to, or

[[Page 185]]

through a person who is included within the term ``Government of 
Sudan,'' as defined in Sec. 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 Sec. 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 
Sec. 538.521, provided that the transfer is made pursuant to 
Sec. 538.521 and the terms of the registration.

    (b) The transferring institutions identified in paragraph (a) of 
this section may rely on the originator of a funds transfer with regard 
to compliance with paragraph (a), provided that the transferring 
institution does not know or have reason to know that the funds transfer 
is not in compliance with paragraph (a).
    (c) This section does not authorize transactions with respect to 
property blocked pursuant to Sec. 538.201.

[70 FR 34062, June 13, 2005]



Sec. 538.529  Authorized transactions necessary and ordinarily
incident to publishing.

    (a) To the extent that such activities are not exempt from this 
part, and subject to the restrictions set forth in paragraphs (b) 
through (d) of this section, U.S. persons are authorized to engage in 
all transactions necessary and ordinarily incident to the publishing and 
marketing of manuscripts, books, journals, and newspapers in paper or 
electronic format (collectively, ``written publications''). This section 
does not apply if the parties to the transactions described in this 
paragraph include the Government of Sudan. For the purposes of this 
section, the term ``Government of Sudan'' includes the state and the 
Government of Sudan, as well as any political subdivision, agency, or 
instrumentality thereof, including the Central Bank of Sudan, and any 
person acting or purporting to act directly or indirectly on behalf of 
any of the foregoing with respect to the transactions described in this 
paragraph. For the purposes of this section, the term ``Government of 
Sudan'' does not include any academic and research institutions and 
their personnel. Pursuant to this section, the following activities are 
authorized, provided that U.S. persons ensure that they are not 
engaging, without separate authorization, in the activities identified 
in paragraphs (b) through (d) of this section:
    (1) Commissioning and making advance payments for identifiable 
written publications not yet in existence, to the extent consistent with 
industry practice;
    (2) Collaborating on the creation and enhancement of written 
publications;
    (3)(i) Augmenting written publications through the addition of items 
such as photographs, artwork, translation, explanatory text, and, for a 
written publication in electronic format, the addition of embedded 
software necessary for reading, browsing, navigating, or searching the 
written publication;
    (ii) Exporting embedded software necessary for reading, browsing, 
navigating, or searching a written publication in electronic format, 
provided that the software is classified as ``EAR 99'' under the Export 
Administration Regulations, 15 CFR parts 730-774 (the ``EAR''), or is 
not subject to the EAR;
    (4) Substantive editing of written publications;
    (5) Payment of royalties for written publications;
    (6) Creating or undertaking a marketing campaign to promote a 
written publication; and
    (7) Other transactions necessary and ordinarily incident to the 
publishing and marketing of written publications as described in this 
paragraph (a).
    (b) This section does not authorize transactions involving the 
provision of goods or services not necessary and ordinarily incident to 
the publishing and marketing of written publications as described in 
paragraph (a) of this section. For example, this section does not 
authorize U.S. persons:
    (1) To provide or receive individualized or customized services 
(including, but not limited to, accounting, legal, design, or consulting 
services), other than those necessary and ordinarily incident to the 
publishing and marketing of written publications, even though

[[Page 186]]

such individualized or customized services are delivered through the use 
of information and informational materials;
    (2) To create or undertake for any person a marketing campaign with 
respect to any service or product other than a written publication, or 
to create or undertake a marketing campaign of any kind for the benefit 
of the Government of Sudan;
    (3) To engage in the exportation or importation of goods to or from 
Sudan other than the exportation of embedded software described in 
paragraph (a)(3)(ii) of this section; or
    (4) To operate a publishing house, sales outlet, or other office in 
Sudan.

    Note to paragraph (b): The importation from Sudan and the 
exportation to Sudan of information or informational materials, as 
defined in Sec. 538.306, whether commercial or otherwise, regardless of 
format or medium of transmission, are exempt from the prohibitions and 
regulations of this part. See Sec. 538.211(c).

    (c) This section does not authorize U.S. persons to engage the 
services of publishing houses or translators in Sudan unless such 
activity is primarily for the dissemination of written publications in 
Sudan.
    (d) This section does not authorize:
    (1) The exportation from or importation into the United States of 
services for the development, production, or design of software;
    (2) Transactions for the development, production, design, or 
marketing of technology specifically controlled by the International 
Traffic in Arms Regulations, 22 CFR parts 120 through 130 (the 
``ITAR''), the EAR, or the Department of Energy Regulations set forth at 
10 CFR part 810.
    (3) The exportation of information or technology subject to the 
authorization requirements of 10 CFR part 810, or Restricted Data as 
defined in section 11 y. of the Atomic Energy Act of 1954, as amended, 
or of other information, data, or technology the release of which is 
controlled under the Atomic Energy Act and regulations therein;
    (4) The exportation of any item (including information) subject to 
the EAR where a U.S. person knows or has reason to know that the item 
will be used, directly or indirectly, with respect to certain nuclear, 
missile, chemical, or biological weapons or nuclear-maritime end-uses as 
set forth in part 744 of the EAR. In addition, U.S. persons are 
precluded from exporting any item subject to the EAR to certain 
restricted end-users, as set forth in part 744 of the EAR, as well as 
certain persons whose export privileges have been denied pursuant to 
parts 764 or 766 of the EAR, without authorization from the Department 
of Commerce; or
    (5) The exportation of information subject to licensing requirements 
under the ITAR or exchanges of information that are subject to 
regulation by other government agencies.

[72 FR 50050, Aug. 30, 2007]



Sec. 538.530  Licenses and registrations issued pursuant to Executive
Order 13067 or this part authorized pursuant to Executive Order 13412.

    (a) All general licenses issued pursuant to Executive Order 13067 
are authorized pursuant to Executive Order 13412 and remain in effect.
    (b) All specific licenses and all nongovernmental organization 
registrations issued pursuant to Executive Order 13067 or this part 
prior to October 13, 2006, are authorized pursuant to Executive Order 
13412 and remain in effect until the expiration date specified in the 
license or registration or, if no expiration date is specified, June 30, 
2008.

[72 FR 61516, Oct. 31, 2007]



Sec. 538.531  Official activities of the United States Government
and international organizations.

    (a) Subject to the conditions of paragraphs (b), (c), and (d) of 
this section, the following transactions are authorized:
    (1) All transactions and activities otherwise prohibited by this 
part that are for the conduct of the official business of the United 
States Government or the United Nations by contractors or grantees 
thereof; and
    (2) All transactions and activities otherwise prohibited by this 
part that are for the conduct of the official business of the United 
Nations specialized agencies, programmes, and funds by employees, 
contractors, or grantees thereof.

[[Page 187]]

    (b) Contractors or grantees conducting transactions authorized 
pursuant to paragraph (a) of this section must provide a copy of their 
contract or grant with the United States Government or the United 
Nations, or its specialized agencies, programmes, and funds, to any U.S. 
person before the U.S. person engages in or facilitates any transaction 
or activity prohibited by this part. If the contract or grant contains 
any sensitive or proprietary information, such information may be 
redacted or removed from the copy given to the U.S. person, provided 
that the information is not necessary to demonstrate that the 
transaction is authorized pursuant to paragraph (a) of this section.
    (c) Any U.S. person engaging in or facilitating transactions 
authorized pursuant to this section shall keep a full and accurate 
record of each such transaction, including a copy of the contract or 
grant, and such record shall be available for examination for at least 
five (5) years after the date of the transaction.
    (d) No payment pursuant to this section may involve a debit to an 
account blocked pursuant to this part.

    Note 1 to Sec. 538.531. This license does not relieve any persons 
participating in transactions authorized hereunder from compliance with 
any other U.S. legal requirements applicable to the transactions 
authorized pursuant to paragraph (a) of this section. See, e.g., the 
Export Administration Regulations (15 CFR parts 730 et seq.).
    Note 2 to Sec. 538.531. Paragraph (e) of Sec. 538.212 exempts 
transactions for the conduct of the official business of the Federal 
Government or the United Nations by employees thereof from the 
prohibitions contained in this part.

[72 FR 61516, Oct. 31, 2007]



Sec. 538.532  Humanitarian transshipments to or from the Specified 
Areas of Sudan.

    The transit or transshipment to or from the Specified Areas of Sudan 
of goods, technology, or services intended for humanitarian purposes, 
through areas of Sudan other than the Specified Areas of Sudan, is 
authorized.

[76 FR 76619, Dec. 8, 2011]



Sec. 538.533  Exportation, reexportation, or provision of certain 
services, software, and hardware incident to personal communications.

    (a) Subject to the restrictions set forth in paragraph (b) of this 
section, the following transactions are authorized:
    (1) Services. The exportation or reexportation, directly or 
indirectly, from the United States or by a U.S. person, wherever 
located, to Sudan of services incident to the exchange of personal 
communications over the Internet, such as instant messaging, chat and 
email, social networking, sharing of photos and movies, web browsing, 
and blogging.
    (2) Software--(i) Software subject to the EAR. The exportation, 
reexportation, or provision, directly or indirectly, to Sudan of 
software subject to the Export Administration Regulations, 15 CFR parts 
730 through 774 (the ``EAR''), that is necessary to enable services 
incident to the exchange of personal communications over the Internet, 
such as instant messaging, chat and email, social networking, sharing of 
photos and movies, web browsing, and blogging, provided that such 
software is designated EAR99 or classified by the U.S. Department of 
Commerce on the Commerce Control List, 15 CFR part 774, supplement No. 1 
(CCL), under export control classification number (ECCN) 5D992.c.
    (ii) Software that is not subject to the EAR because it is of 
foreign origin and is located outside the United States. The 
exportation, reexportation, or provision, directly or indirectly, by a 
U.S. person, wherever located, to Sudan of software that is not subject 
to the EAR because it is of foreign origin and is located outside the 
United States that is necessary to enable services incident to the 
exchange of personal communications over the Internet, such as instant 
messaging, chat and email, social networking, sharing of photos and 
movies, web browsing, and blogging, provided that such software would be 
designated EAR99 if it were located in the United States or would meet 
the criteria for classification under ECCN 5D992.c if it were subject to 
the EAR.
    (iii) Software that is not subject to the EAR because it is 
described in 15 CFR

[[Page 188]]

734.3(b)(3). The exportation, reexportation, or provision, directly or 
indirectly, by a U.S. person, wherever located, to Sudan of software 
that is not subject to the EAR because it is described in 15 CFR 
734.3(b)(3) that is necessary to enable services incident to the 
exchange of personal communications over the Internet, such as instant 
messaging, chat and email, social networking, sharing of photos and 
movies, web browsing, and blogging.
    (3) Additional software, hardware, and related services. To the 
extent not authorized by paragraph (a)(1) or (a)(2) of this section, the 
exportation, reexportation, or provision, directly or indirectly, to 
Sudan of certain software and hardware incident to personal 
communications, as well as related services, as follows:
    (i) In the case of hardware and software subject to the EAR, the 
items specified in appendix B to this part;
    (ii) In the case of hardware and software that is not subject to the 
EAR because it is of foreign origin and is located outside the United 
States that is exported, reexported, or provided, directly or 
indirectly, by a U.S. person, wherever located, to Sudan, hardware and 
software that is of a type described in appendix B to this part provided 
that it would be designated EAR99 if it were located in the United 
States or would meet the criteria for classification under the relevant 
ECCN specified in appendix B to this part if it were subject to the EAR; 
and
    (iii) in the case of software not subject to the EAR because it is 
described in 15 CFR 734.3(b)(3) that is exported, reexported, or 
provided, directly or indirectly, from the United States or by a U.S. 
person, wherever located, to Sudan, software that is of a type described 
in the appendix B to this part.
    Note to paragraphs (a)(2) and (a)(3): The authorizations in 
paragraphs (a)(2) and (a)(3) of this section include the exportation, 
reexportation, or provision, directly or indirectly, to Sudan of 
authorized hardware and software by an individual leaving the United 
States for Sudan.
    (4) Internet connectivity services and telecommunications capacity. 
The exportation or reexportation, directly or indirectly, from the 
United States or by a U.S. person, wherever located, to Sudan of 
consumer-grade Internet connectivity services and the provision, sale, 
or leasing of capacity on telecommunications transmission facilities 
(such as satellite or terrestrial network connectivity) incident to 
personal communications.
    Note to paragraph (a)(4): See Sec. 538.512 for authorizations 
relating to transactions with respect to the receipt and transmission of 
telecommunications involving Sudan.
    (5) Importation into the United States of hardware and software 
previously exported to Sudan. The importation into the United States of 
hardware and software authorized for exportation, reexportation, or 
provision to Sudan under paragraphs (a)(2) and (a)(3) of this section by 
an individual entering the United States, directly or indirectly, from 
Sudan, provided that the items previously were exported, reexported, or 
provided by the individual to Sudan pursuant to paragraphs (a)(2) and 
(a)(3) of this section.
    (6) Exportation, reexportation, or provision of no cost services and 
software that are widely available to the public to the Government of 
Sudan.--(i) Services. The exportation or reexportation, directly or 
indirectly, from the United States or by a U.S. person, wherever 
located, to the Government of Sudan of services described in paragraph 
(a)(1) of this section or categories (6) through (11) of appendix B to 
this part, provided that such services are widely available to the 
public at no cost to the user.
    (ii) Software. The exportation, reexportation, or provision, 
directly or indirectly, to the Government of Sudan of software described 
in paragraph (a)(2) of this section or categories (6) through (11) of 
appendix B to this part, read in conjunction with paragraph (a)(3) of 
this section, provided that such software is widely available to the 
public at no cost to the user.
    Note to paragraph (a): Nothing in this section relieves the exporter 
from compliance with the export license application requirements of 
another Federal agency.
    (b) This section does not authorize:
    (1) The exportation, reexportation, or provision, directly or 
indirectly, of the services, software, or hardware specified in 
paragraph (a) of this section with knowledge or reason to know that such 
services, software, or hardware are intended for the Government of 
Sudan, except for services or software

[[Page 189]]

specified in paragraph (a)(6) of this section.
    (2) The exportation, reexportation, or provision, directly or 
indirectly, of the services, software, or hardware specified in 
paragraph (a) of this section to any person whose property and interests 
in property are blocked pursuant to any part of 31 CFR chapter V, other 
than persons whose property and interests in property are blocked solely 
pursuant to Executive Order 13067 and Executive Order 13412 as the 
Government of Sudan.
    (3) The exportation or reexportation, directly or indirectly, of 
commercial-grade Internet connectivity services or telecommunications 
transmission facilities (such as dedicated satellite links or dedicated 
lines that include quality of service guarantees).
    (4) The exportation or reexportation, directly or indirectly, of 
web-hosting services that are for commercial endeavors or of domain name 
registration services.
    (5) Any action or activity involving any item (including 
information) subject to the EAR that is prohibited by, or otherwise 
requires a license under, part 744 of the EAR or participation in any 
transaction involving a person whose export privileges have been denied 
pursuant to part 764 or 766 of the EAR, without authorization from the 
Department of Commerce.
    (c) Effective February 18, 2015, transfers of funds from Sudan or 
for or on behalf of a person in Sudan in furtherance of an underlying 
transaction authorized by paragraph (a) of this section may be processed 
by U.S. depository institutions and U.S. registered brokers or dealers 
in securities so long as they are consistent with Secs. 538.405 and 
538.418.
    (d) Specific licenses may be issued on a case-by-case basis for the 
exportation, reexportation, or provision of services, software, or 
hardware incident to personal communications not specified in paragraph 
(a) of this section or appendix B to this part.
    Note 1 to Sec. 538.533: This section does not authorize any 
transaction prohibited by any part of chapter V of 31 CFR other than 
part 538. Accordingly, the transfer of funds may not be by, to, or 
through a person whose property and interests in property are blocked 
pursuant to any other part of 31 CFR chapter V, or any Executive order, 
except a Sudanese financial institution whose property and interests in 
property are blocked solely pursuant to 31 CFR part 538.
    Note 2 to Sec. 538.533: See Sec. 538.212(g)(1) for an exemption 
related to the exportation of certain goods and services to the 
Specified Areas of Sudan, and Sec. 538.537 for a general license 
authorizing the transshipment of goods, technology, and services to or 
from the Republic of South Sudan.

[80 FR 8534, Feb. 18, 2015]



Sec. 538.534  Third-country diplomatic and consular funds transfers.

    U.S. depository institutions, U.S. registered brokers or dealers in 
securities, and U.S. registered money transmitters are authorized to 
process funds transfers for the operating expenses or other official 
business of third-country diplomatic or consular missions in Sudan, 
provided such transfers are not by, to, or through a person who is 
included within the term Government of Sudan, as defined in 
Sec. 538.305.

[76 FR 63198, Oct. 12, 2011]



Sec. 538.535  Importation and exportation of human remains for 
burial, cremation, or interment authorized.

    (a) The importation into the United States of human remains for 
burial, cremation, or interment, as well as of coffins or other 
receptacles containing such human remains, from Sudan is authorized.
    (b) The importation into the United States for non-commercial 
purposes of finished tombstones or grave markers of Sudanese origin is 
authorized.
    (c) The direct or indirect exportation from the United States, or by 
a United States person, wherever located, of human remains for burial, 
cremation, or interment, as well as of coffins or other receptacles 
containing such human remains, to Sudan is authorized.
    (d) This section does not authorize the importation into the United 
States of Sudanese-origin cultural property or other items of 
archaeological, historical, or rare scientific importance.

    Note 1 to Sec. 538.535: See Sec. 538.418 for additional restrictions 
on financial transactions involving Sudan, including the Specified Areas 
of Sudan.

[76 FR 63198, Oct. 12, 2011]

[[Page 190]]



Sec. 538.536  Activities relating to the petroleum and petrochemical
industries in the Republic of South Sudan.

    (a) To the extent they are not exempt from the prohibitions of this 
part, all activities and transactions relating to the petroleum and 
petrochemical industries in the Republic of South Sudan are authorized, 
including but not limited to the transshipment of goods, technology, and 
services to or from the Republic of South Sudan through Sudan; 
exploration; development; production; field auditing services; oilfield 
services; activities related to oil and gas pipelines; investment; 
payment to the Government of Sudan or to entities owned or controlled by 
the Government of Sudan of pipeline, port, and other fees; and 
downstream activities such as refining, sale, and transport of petroleum 
from the Republic of South Sudan, except for the refining in Sudan of 
petroleum from the Republic of South Sudan.
    (b) All financial transactions ordinarily incident to the activities 
authorized by paragraph (a) of this section also are authorized, 
including but not limited to financial transactions with a depository 
institution owned or controlled by the Government of Sudan or located in 
Sudan, provided that any transaction between a U.S. depository 
institution and a depository institution owned or controlled by the 
Government of Sudan must first transit through a depository institution 
not owned or controlled by the Government of Sudan.
    (c) This section does not authorize exports of goods, services, or 
technology that are not used in connection with the Republic of South 
Sudan's petroleum or petrochemical industries.

[76 FR 76619, Dec. 8, 2011]



Sec. 538.537  Transshipment of goods, technology, and services to or
from the Republic of South Sudan.

    (a) To the extent they are not exempt from the prohibitions of this 
part, the transit or transshipment of goods, technology, and services 
through Sudan to or from the Republic of South Sudan are authorized.
    (b) All financial transactions ordinarily incident to the activities 
authorized by paragraph (a) of this section also are authorized, 
including but not limited to financial transactions with a depository 
institution owned or controlled by the Government of Sudan or located in 
Sudan, provided that any transaction between a U.S. depository 
institution and a depository institution owned or controlled by the 
Government of Sudan must first transit through a depository institution 
not owned or controlled by the Government of Sudan.

[76 FR 76619, Dec. 8, 2011]



Sec. 538.540  All transactions authorized; Government of Sudan 
property unblocked.

    (a) All transactions prohibited by this part and Executive Orders 
13067 and 13412, including all transactions that involve property in 
which the Government of Sudan has an interest, are authorized.
    (b) Pursuant to section 906(a)(1) of the Trade Sanctions Reform and 
Export Enhancement Act of 2000 (22 U.S.C. 7205), any exports or 
reexports of agricultural commodities, medicine, or medical devices to 
the Government of Sudan, to any individual or entity in Sudan, or to any 
person in a third country purchasing specifically for resale to any of 
the foregoing must be shipped within the 12-month period beginning on 
the date of the signing of the contract for export or reexport.

    Note 1 to Sec. 538.540: Section 538.540 authorizes all transactions 
necessary to unblock any property or interests in property that were 
blocked pursuant to 31 CFR 538.201 prior to January 17, 2017, including 
the return or processing of funds.
    Note 2 to Sec. 538.540: This authorization is effective on January 
17, 2017 and does not eliminate the need to comply with other provisions 
of 31 CFR chapter V or other applicable provisions of law, including any 
requirements of agencies other than the Department of the Treasury's 
Office of Foreign Assets Control. Such requirements include the Export 
Administration Regulations (15 CFR parts 730 through 774) administered 
by the Bureau of Industry and Security of the Department of Commerce and 
the International Traffic in Arms Regulations (22 CFR parts 120 through 
130) administered by the Department of State.
    Note 3 to Sec. 538.540: Consistent with section 906(a)(1) of the 
Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C.

[[Page 191]]

7205), each year OFAC will determine whether to revoke this general 
license. Unless revoked, the general license will remain in effect.

[82 FR 4794, Jan. 17, 2017]



                            Subpart F_Reports



Sec. 538.601  Records and reports.

    For additional provisions relating to records and reports, see 
subpart C of part 501 of this chapter.



                           Subpart G_Penalties



Sec. 538.701  Penalties.

    (a) Attention is directed to section 206 of the International 
Emergency Economic Powers Act (the ``Act'')(50 U.S.C. 1705), which is 
applicable to violations 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 Act.
    (1) A civil penalty not to exceed the amount set forth in Section 
206 of the Act may be imposed on any person who violates, attempts to 
violate, conspires to violate, or causes a violation of any license, 
order, regulation, or prohibition issued under the Act.

    Note to paragraph (a)(1): As of January 15, 2017, the applicable 
maximum civil penalty per violation of the Act is the greater of 
$289,238 or an amount that is twice the amount of the transaction that 
is the basis of the violation with respect to which the penalty is 
imposed.

    (2) A person who willfully commits, willfully attempts to commit, or 
willfully conspires to commit, or aids or abets in the commission of a 
violation of any license, order, regulation, or prohibition shall, upon 
conviction, be fined not more than $1,000,000, or if a natural person, 
may be imprisoned for not more than 20 years, or both.
    (b) Adjustments to penalty amounts. (1) The civil penalties provided 
in the Act are subject to adjustment pursuant to the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, as amended, 
28 U.S.C. 2461 note).
    (2) The criminal penalties provided in the Act are subject to 
adjustment pursuant to 18 U.S.C. 3571.
    (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.
    (d) Violations of this part may also be subject to relevant 
provisions of other applicable laws.

[63 FR 35810, July 1, 1998, as amended at 70 FR 34063, June 13, 2005; 71 
FR 29253, May 22, 2006; 73 FR 32652, June 10, 2008; 81 FR 43074, July 1, 
2016; 82 FR 10436, Feb. 10, 2017]



Sec. 538.702  Prepenalty notice.

    (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.
    (b) Contents of notice--(1) Facts of violation. The prepenalty 
notice shall describe the violation, specify the laws and regulations 
allegedly violated, and state the amount of the proposed monetary 
penalty.
    (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 Sec. 538.703

[[Page 192]]

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.

[70 FR 34063, June 13, 2005]



Sec. 538.703  Response to prepenalty notice; informal settlement.

    (a) Deadline for response. The respondent may submit a response to 
the prepenalty notice within the applicable 30-day period set forth in 
this paragraph. The Director may grant, at the Director's discretion, an 
extension of time in which to submit a response to the prepenalty 
notice. 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.
    (1) Computation of time for response. A response to the prepenalty 
notice must be postmarked or date-stamped by the U.S. Postal Service (or 
foreign postal service, if mailed abroad) or courier service provider 
(if transmitted to OFAC by courier) on or before the 30th day after the 
postmark date on the envelope in which the prepenalty notice was mailed. 
If the respondent refused delivery or otherwise avoided receipt of the 
prepenalty notice, a response must be postmarked or date-stamped on or 
before the 30th day after the date on the stamped postal receipt 
maintained at the Office of Foreign Assets Control. If the prepenalty 
notice was personally delivered to the respondent by a non-U.S. Postal 
Service agent authorized by the Director, a response must be postmarked 
or date-stamped on or before the 30th day after the date of delivery.
    (2) Extensions of time for response. If a due date falls on a 
federal holiday or weekend, that due date is extended to include the 
following business day. Any other extensions of time will be granted, at 
the Director's discretion, only upon the respondent's specific request 
to the Office of Foreign Assets Control.
    (b) Form and method of response. The response must be submitted in 
typewritten form and signed by the respondent or a representative 
thereof. The response need not be in any particular form. A copy of the 
written response may be sent by facsimile, but the original also must be 
sent to the Office of Foreign Assets Control Civil Penalties Division by 
mail or courier and must be postmarked or date-stamped, in accordance 
with paragraph (a) of this section.
    (c) Contents of response. A written response must contain 
information sufficient to indicate that it is in response to the 
prepenalty notice and must identify the Office of Foreign Assets Control 
identification number listed on the prepenalty notice.
    (1) A written response must include the respondent's full name, 
address, telephone number, and facsimile number, if available, or those 
of the representative of the respondent.
    (2) A written response should either admit or deny each specific 
violation alleged in the prepenalty notice and also state if the 
respondent has no knowledge of a particular violation. If the written 
response fails to address any specific violation alleged in the 
prepenalty notice, that alleged violation shall be deemed to be 
admitted.
    (3) A written response should include any information in defense, 
evidence in support of an asserted defense, or other factors that the 
respondent requests the Office of Foreign Assets Control to consider. 
Any defense or explanation previously made to the Office of Foreign 
Assets Control or any other agency must be repeated in the written 
response. Any defense not raised in the written response will be 
considered waived. The written response also should set forth the 
reasons why the respondent believes the penalty should

[[Page 193]]

not be imposed or why, if imposed, it should be in a lesser amount than 
proposed.
    (d) Failure to respond. Where OFAC receives no response to a 
prepenalty notice within the applicable time period set forth in 
paragraph (a) of this section, a penalty notice generally will be 
issued, taking into account the mitigating and/or aggravating factors 
present in the record. If there are no mitigating factors present in the 
record, or the record contains a preponderance of aggravating factors, 
the proposed prepenalty amount generally will be assessed as the final 
penalty.
    (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 to 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.
    (g) Representation. A representative of the respondent may act on 
behalf of the respondent, but any oral communication with the Office of 
Foreign Assets Control prior to a written submission regarding the 
specific allegations contained in the prepenalty notice must be preceded 
by a written letter of representation, unless the prepenalty notice was 
served upon the respondent in care of the representative.

[70 FR 34063, June 13, 2005]



Sec. 538.704  Penalty imposition or withdrawal.

    (a) No violation. If, after considering any response to the 
prepenalty notice and any relevant facts, the Director of the Office of 
Foreign Assets Control determines that there was no violation by the 
respondent named in the prepenalty notice, the Director shall notify the 
respondent in writing of that determination and of the cancellation of 
the proposed monetary penalty.
    (b) Violation. (1) If, after considering any written response to the 
prepenalty notice, or default in the submission of a written response, 
and any relevant facts, the Director of the Office of Foreign Assets 
Control determines that there was a violation by the respondent named in 
the prepenalty notice, the Director is authorized to issue a written 
penalty notice to the respondent of the determination of the violation 
and the imposition of the monetary penalty.
    (2) The penalty notice shall inform the respondent that payment or 
arrangement for installment payment of the assessed penalty must be made 
within 30 days of the date of mailing of the penalty notice by the 
Office of Foreign Assets Control.
    (3) The penalty notice shall inform the respondent of the 
requirement to furnish the respondent's taxpayer identification number 
pursuant to 31 U.S.C. 7701 and that such number will be used for 
purposes of collecting and reporting on any delinquent penalty amount.
    (4) The issuance of the penalty notice finding a violation and 
imposing a monetary penalty shall constitute final agency action. The 
respondent has the right to seek judicial review of that agency action 
in federal district court.

[70 FR 34064, June 13, 2005]

[[Page 194]]



Sec. 538.705  Administrative collection; referral to United States 
Department of Justice.

    In the event that the respondent does not pay the penalty imposed 
pursuant to this part or make payment arrangements acceptable to the 
Director of the Office of Foreign Assets Control within 30 days of the 
mailing of the written notice of the imposition of the penalty, the 
matter may be referred for administrative collection measures by the 
Department of the Treasury or to the United States Department of Justice 
for appropriate action to recover the penalty in a civil suit in a 
Federal district court.



                          Subpart H_Procedures



Sec. 538.801  Procedures.

    For license application procedures and procedures relating to 
amendments, modifications, or revocations of licenses; administrative 
decisions; rulemaking; and requests for documents pursuant to the 
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see 
part 501, subpart E, of this chapter.

[63 FR 35810, July 1, 1998, as amended at 68 FR 53658, Sept. 11, 2003]



Sec. 538.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13067 (3 CFR, 1997 Comp., p. 230), and any 
further Executive orders relating to the national emergency declared 
with respect to Sudan in Executive Order 13067, 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.



                    Subpart I_Paperwork Reduction Act



Sec. 538.901  Paperwork Reduction Act notice.

    The information collection requirements in Secs. 538.506 and 538.521 
have been approved by the Office of Management and Budget (``OMB'') and 
assigned control number 1505-0169. For approval by OMB under the 
Paperwork Reduction Act of other information collections relating to 
recordkeeping and reporting requirements, to licensing procedures 
(including those pursuant to statements of licensing policy), and to 
other procedures, see Sec. 501.901 of this chapter. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a valid control number 
assigned by OMB.



       Sec. Appendix A to Part 538--Bulk Agricultural Commodities

    Notes:
    1. Appendix A sets forth bulk agricultural commodities eligible for 
sale pursuant to the licensing procedures and general licenses in 
Sec. 538.523.
    2. Commodities are identified by their classification numbers in the 
Harmonized Tariff Schedule of the United States (see 19 U.S.C. 1202) 
(``HTS'').

------------------------------------------------------------------------
     HTS Number                            Commodity
------------------------------------------------------------------------
1001.10               Durum Wheat
1001.90               Other Wheat and Meslin, including seed, Red Spring
                       Wheat, White Winter Wheat, ``Canadian'' Western
                       Red Winter Wheat, Soft White Spring Wheat, and
                       Wheat not elsewhere specified
1101.00               Wheat or Meslin Flour
1006.10               Rice in the husk (paddy or rough)
1006.20               Husked (brown) Rice
1006.30               Semi-milled or wholly milled Rice, whether or not
                       polished or glazed
1006.40               Broken Rice
1102.30               Rice Flour
1103.14               Rice Groats, Meal and Pellets
1002.00               Rye
1003.00               Barley
1004.00               Oats
1007.00               Grain Sorghum
1005.00               Corn (Maize)
0713.31               Dried Beans including Vigna mungo (L.), Hepper,
                       and Vigna radiata (L.) Wilczek
0713.32               Small red (adzuki) beans
0713.33               Kidney beans, including white pea beans
0713.39               Beans, other
0713.50               Broad beans and horse beans
0713.10               Dried Peas (Pisum sativum)
0713.20               Chickpeas (garbanzos)
0713.40               Lentils
0713.90               Dried leguminous vegetables, shelled, not
                       elsewhere specified
1201.00               Soybeans, whether or not broken
2304.00               Soybean cake, meal and pellets
1507.10               Soybean oil, crude
1507.90               Soybean oil, other
1514.10               Rapeseed, colza and mustard oil, crude
1514.90               Rapeseed, colza and mustard oil, other
1515.21               Corn (Maize) oil, crude
1515.29               Corn (Maize) oil, other
1512.21               Cottonseed oil, crude
1512.29               Cottonseed oil, other
1517.90               Cottonseed oil, hydrogenated
1508.10               Peanut (ground-nut) oil, crude

[[Page 195]]

 
1508.90               Peanut (ground-nut) oil, other
1515.50               Sesame oil
1512.11               Sunflower-seed oil, crude
1512.19               Sunflower-seed oil, other
1212.91               Sugar Beets, fresh, chilled, frozen or dried
1212.92               Sugar Cane, fresh, chilled, frozen or dried
1701.11               Cane Sugar, raw, solid form
1701.12               Beet Sugar, raw, solid form
1701.91               Cane or Beet Sugar, solid form, containing added
                       coloring or flavoring
1701.99               Cane or Beet Sugar, other, not elsewhere specified
------------------------------------------------------------------------


[65 FR 41789, Aug. 2, 1999, as amended at 76 FR 63195, Oct. 12, 2011]



 Sec. Appendix B to Part 538--Services, Software, and Hardware Incident 
to Personal Communications Authorized for Exportation, Reexportation, or 
         Provision to Sudan by Paragraph (a)(3) of Sec. 538.533

    Note: See paragraphs (a)(3)(ii)-(iii) of Sec. 538.533 for 
authorizations related to certain hardware and software that is of a 
type described below but that is not subject to the EAR.

1. Mobile phones (including smartphones), Personal Digital Assistants
 (PDAs), Subscriber Identity Module/Subscriber Information Module (SIM)
 cards, and accessories for such devices designated EAR99 or classified
 on the CCL under ECCN 5A992.c; drivers and connectivity software for
 such hardware designated EAR99 or classified under ECCN 5D992.c; and
 services necessary for the operation of such hardware and software.
2. Satellite phones and Broadband Global Area Network (BGAN) hardware
 designated EAR99 or classified under ECCN 5A992.c; demand drivers and
 connectivity software for such hardware designated EAR99 or classified
 under ECCN 5D992.c; and services necessary for the operation of such
 hardware and software.
3. Consumer\*\ modems, network interface cards, radio equipment
 (including antennae), routers, switches, and WiFi access points,
 designed for 50 or fewer concurrent users, designated EAR99 or
 classified under ECCNs 5A992.c, 5A991.b.2, or 5A991.b.4; drivers,
 communications, and connectivity software for such hardware designated
 EAR99 or classified under ECCN 5D992.c; and services necessary for the
 operation of such hardware and software.
4. Residential consumer* satellite terminals, transceiver equipment
 (including to antennae, receivers, set-top boxes and video decoders)
 designated EAR99 or classified under ECCNs 5A992.c, 5A991.b.2, or
 5A991.b.4; drivers, communications, and connectivity software for such
 hardware designated EAR99 or classified under ECCN 5D992.c; and
 services necessary for the operation of such hardware and software.
5. Laptops, tablets, and personal computing devices, and peripherals for
 such devices (including consumer* disk drives and other data storage
 devices) and accessories for such devices (including keyboards and
 mice) designated EAR99 or classified on the CCL under ECCNs 5A992.c,
 5A991.b.2, 5A991.b.4, or 4A994.b; computer operating systems and
 software required for effective consumer use of such hardware,
 including software updates and patches, designated EAR99 or classified
 under ECCN 5D992.c; and services necessary for the operation of such
 hardware and software.
6. Anti-virus and anti-malware software designated EAR99 or classified
 under ECCN 5D992.c; and services necessary for the operation of such
 software.
7. Anti-tracking software designated EAR99 or classified under ECCN
 5D992.c; and services necessary for the operation of such software.
8. Mobile operating systems, online application for mobile operating
 systems (app) stores, and related software, including apps designed to
 run on mobile operating systems, designated EAR99 or classified under
 ECCN 5D992.c; and services necessary for the operation of such
 software.
9. Anti-censorship tools and related software designated EAR99 or
 classified under ECCN 5D992.c; and services necessary for the operation
 of such software.
10. Virtual Private Network (VPN) client software, proxy tools, and fee-
 based client personal communications tools including voice, text,
 video, voice-over-IP telephony, video chat, and successor technologies,
 and communications and connectivity software required for effective
 consumer use designated EAR99 or classified under ECCN 5D992.c; and
 services necessary for the operation of such software.

[[Page 196]]

 
11. Provisioning and verification software for Secure Sockets Layers
 (SSL) certificates designated EAR99 or classified under ECCN 5D992.c;
 and services necessary for the operation of such software.
 
\*\ For purposes of this appendix, the term ``consumer'' refers to items
  that are: (1) generally available to the public by being sold, without
  restriction, from stock at retail selling points by means of any of
  the following: (a) over-the-counter transactions; (b) mail order
  transactions; (c) electronic transactions; or (d) telephone call
  transactions; and (2) designed for installation by the user without
  further substantial support by the supplier.


[80 FR 8535, Feb. 18, 2015]



PART 539_WEAPONS OF MASS DESTRUCTION TRADE CONTROL REGULATIONS--
Table of Contents



      Subpart A_Relation of This Part to Other Laws and Regulations

Sec.
539.101  Relation of this part to other laws and regulations.

                         Subpart B_Prohibitions

539.201  Prohibited importation of goods, technology, or services.
539.202  Prohibition on import-related transactions.
539.203  Evasions; attempts; conspiracies.
539.204  Exempt transactions.

                      Subpart C_General Definitions

539.301  Designated foreign person.
539.302  Effective date.
539.303  Entity.
539.304  Entity owned or controlled by a person listed in appendix I to 
          this part.
539.305  General license.
539.306  Goods, technology, or services produced or provided by a 
          designated foreign person.
539.307  Importation into the United States.
539.308  Information or informational materials.
539.309  License.
539.310  Person.
539.311  Specific license.
539.312  United States.
539.313  United States person; U.S. person.

                        Subpart D_Interpretations

539.401  Reference to amended sections.
539.402  Effect of amendment.
539.403  Transactions incidental to a licensed transaction.
539.404  Transshipments through the United States prohibited.
539.405  Importation of goods or technology from third countries.
539.406  Importation into and release from a bonded warehouse or foreign 
          trade zone.

  Subpart E_Licenses, Authorizations and Statements of Licensing Policy

539.501  General and specific licensing procedures.
539.502  Effect of license.
539.503  Exclusion from licenses.
539.504  Departments and agencies of the United States Government.

                            Subpart F_Reports

539.601  Records and reports.

                           Subpart G_Penalties

539.701  Penalties.
539.702  Prepenalty notice.
539.703  Response to prepenalty notice; informal settlement.
539.704  Penalty imposition or withdrawal.
539.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H_Procedures

539.801  Procedures.
539.802  Delegation by the Secretary of the Treasury.

                    Subpart I_Paperwork Reduction Act

539.901  Paperwork Reduction Act notice.

Appendix I to Part 539--Designated Foreign Persons

    Authority: 3 U.S.C. 301; 22 U.S.C. 2751-2799aa-2; 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. 12938, 59 FR 
59099, 3 CFR, 1994 Comp., p. 950; E.O. 13094, 63 FR 40803, 3 CFR, 1998 
Comp., p. 200.

    Source: 64 FR 8716, Feb. 23, 1999, unless otherwise noted.



      Subpart A_Relation of This Part to Other Laws and Regulations



Sec. 539.101  Relation of this part to other laws and regulations.

    (a) This part is separate from, and independent of, the other parts 
of this chapter, with the exception of part 501 of this chapter, the 
provisions of which apply to this part. 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. Differing 
foreign policy and national security

[[Page 197]]

contexts may result in differing interpretations of similar language 
among the parts of this chapter. No license or authorization contained 
in or issued pursuant to those other parts authorizes any transaction 
prohibited by this part. No license or authorization contained in or 
issued pursuant to any other provision of law or regulation authorizes 
any transaction prohibited by this part.
    (b) No license contained in or issued pursuant to this part relieves 
the involved parties from complying with any other applicable laws or 
regulations.



                         Subpart B_Prohibitions



Sec. 539.201  Prohibited importation of goods, technology, or services.

    Except as otherwise authorized, the importation into the United 
States, on or after the effective date, directly or indirectly, of any 
goods, technology, or services produced or provided by a designated 
foreign person, other than information or informational materials, is 
prohibited.



Sec. 539.202  Prohibition on import-related transactions.

    Except as otherwise authorized, no United States person may finance, 
act as broker for, transfer, transport, or otherwise participate in the 
importation into the United States on or after the effective date of any 
goods, technology, or services produced or provided by a designated 
foreign person, other than information or informational materials.



Sec. 539.203  Evasions; attempts; conspiracies.

    Any transaction by any United States person or within the United 
States on or after the effective date that evades or avoids, has the 
purpose of evading or avoiding, or attempts to violate any of the 
prohibitions set forth in this part is prohibited. Any conspiracy formed 
for the purpose of engaging in a transaction prohibited by this part is 
prohibited.



Sec. 539.204  Exempt transactions.

    (a) Personal communications. The prohibitions contained in this part 
do not apply to any postal, telegraphic, telephonic, or other personal 
communication, which does not involve the transfer of anything of value.
    (b) Information or informational materials. (1) The prohibitions 
contained in this part do not apply to the importation from any country, 
or to the exportation to any country, whether commercial or otherwise, 
regardless of format or medium of transmission, of any information or 
informational materials as defined in Sec. 539.308, or any transaction 
directly incident to such importation or exportation.
    (2) Paragraph (b)(1) of this section does not exempt from regulation 
or authorize transactions related to information or informational 
materials not fully created and in existence at the date of the 
transaction, or to the substantive or artistic alteration or enhancement 
of information or informational materials, or to the provision of 
marketing and business consulting services. Examples of prohibited 
transactions include, but are not limited to, payment of advances for 
information or informational materials not yet created and completed 
(with the exception of prepaid subscriptions for mass-market magazines 
and other periodical publications that are widely-circulated); 
importation into the United States of services to market, produce or co-
produce, create, or assist in the creation of information or 
informational materials; and payment of royalties to a designated 
foreign person with respect to income received for enhancements or 
alterations made by U.S. persons to informational or informational 
materials imported from a designated foreign person.
    (3) Paragraph (b)(1) of this section does not exempt from regulation 
or authorize the importation into the United States of or transactions 
incident to the importation into the United States or leasing of 
telecommunications transmission facilities (such as satellite links or 
dedicated lines) for use in the transmission of any data.
    (c) Travel. The prohibitions contained in this part do not apply to 
transactions ordinarily incident to travel to

[[Page 198]]

or from any country, including importation of accompanied baggage for 
personal use, maintenance within any country including payment of living 
expenses and acquisition of goods or services for personal use, and 
arrangement or facilitation of such travel including nonscheduled air, 
sea, or land voyages.



                      Subpart C_General Definitions



Sec. 539.301  Designated foreign person.

    The term designated foreign person means any person determined by 
the Secretary of State pursuant to section 4(a) of Executive Order 12938 
of November 14, 1994 (59 FR 59099, 3 CFR, 1994 Comp., p. 950), as 
amended by section 1(a) of Executive Order 13094 of July 28, 1998 (63 FR 
40803, July 30, 1998), to be subject to import measures. Designated 
foreign persons are any persons listed in appendix I to this part and 
any entities owned or controlled by any person listed in appendix I to 
this part unless otherwise indicated in appendix I to this part.



Sec. 539.302  Effective date.

    The term effective date means the ``effective date'' specified in 
the relevant Federal Register notice issued by the Department of State 
identifying a designated foreign person. This date is listed after the 
name of each designated foreign person in appendix I to this part.



Sec. 539.303  Entity.

    The term entity means a partnership, association, trust, joint 
venture, corporation, or other organization.



Sec. 539.304  Entity owned or controlled by a person listed in
appendix I to this part.

    The term entity owned or controlled by a person listed in appendix I 
to this part includes any subsidiaries and branches, wherever located, 
of entities listed in appendix I to this part, any successors to such 
entities, and any persons acting or purporting to act for or on behalf 
of any of the foregoing.



Sec. 539.305  General license.

    The term general license means any license the terms of which are 
set forth in this part.



Sec. 539.306  Goods, technology, or services produced or provided
by a designated foreign person.

    With respect to the prohibitions in Secs. 539.201 and 539.202, the 
term goods, technology, or services produced or provided by a designated 
foreign person includes but is not limited to the following:
    (a) Goods grown, manufactured, extracted, or processed by a 
designated foreign person;
    (b) Technology developed, owned, licensed, or otherwise controlled 
by a designated foreign person;
    (c) Services performed by or on behalf of a designated foreign 
person, or by a third party under contract, directly or indirectly, to a 
designated foreign person, regardless of location.



Sec. 539.307  Importation into the United States.

    The term importation into the United States means:
    (a) With respect to goods or technology, the bringing of any goods 
or technology into the United States, except that in the case of goods 
or technology being transported by vessel, importation into the United 
States means the bringing of any goods or technology into the United 
States with the intent to unlade. See also Sec. 539.404.
    (b) With respect to services, the receipt in the United States of 
services or of the benefit of services wherever such services may be 
performed. The benefit of services is received in the United States if 
the services are:
    (1) Performed on behalf of or for the benefit of a person located in 
the United States;
    (2) Received by a person located in the United States;
    (3) Received by a person located outside the United States on behalf 
of or for the benefit of an entity organized in the United States; or
    (4) Received by an individual temporarily located outside the United 
States for the purpose of obtaining such services for use in the United 
States.

[[Page 199]]

    (c) The following example illustrates the provisions of paragraph 
(b) of this section:

    Example: An employee of an entity organized in the United States may 
not, without specific authorization from the Office of Foreign Assets 
Control, receive from a designated foreign person consulting services 
for use in the United States.



Sec. 539.308  Information or informational materials.

    (a) For purposes of this part, the term information or informational 
materials includes, but is not limited to, publications, films, posters, 
phonograph records, photographs, microfilms, microfiche, tapes, compact 
disks, CD ROMs, artworks, and news wire feeds.
    (b) To be considered information or informational materials, 
artworks must be classified under chapter heading 9701, 9702, or 9703 of 
the Harmonized Tariff Schedule of the United States.



Sec. 539.309  License.

    Except as otherwise specified, the term license means any license or 
authorization contained in or issued pursuant to this part.



Sec. 539.310  Person.

    The term person means an individual or entity.



Sec. 539.311  Specific license.

    The term specific license means any license not set forth in this 
part but issued pursuant to this part.



Sec. 539.312  United States.

    The term United States means the United States, its territories and 
possessions, and all areas under the jurisdiction or authority thereof.



Sec. 539.313  United States person; U.S. person.

    The term United States person or U.S. person means any United States 
citizen, permanent resident alien, entity organized under the laws of 
the United States (including foreign branches), or any person in the 
United States.



                        Subpart D_Interpretations



Sec. 539.401  Reference to amended sections.

    Except as otherwise specified, reference to any provision in or 
appendix to this part or chapter or to any regulation, ruling, order, 
instruction, direction, or license issued pursuant to this part refers 
to the same as currently amended.



Sec. 539.402  Effect of amendment.

    Unless otherwise specifically provided, any amendment, modification, 
or revocation of any provision in or appendix to this part or chapter or 
of any order, regulation, ruling, instruction, or license issued by or 
under the direction of the Director of the Office of Foreign Assets 
Control does not affect any act done or omitted, or any civil or 
criminal suit or proceeding commenced or pending prior to such 
amendment, modification, or revocation. All penalties, forfeitures, and 
liabilities under any such order, regulation, ruling, instruction, or 
license continue and may be enforced as if such amendment, modification, 
or revocation had not been made.



Sec. 539.403  Transactions incidental to a licensed transaction.

    Any transaction ordinarily incident to a licensed transaction and 
necessary to give effect to the licensed transaction is also authorized 
by the license. Except as specifically authorized by the terms of the 
license, prohibited transactions involving designated foreign persons 
not named in the license are not considered incidental to a licensed 
transaction and therefore remain prohibited.



Sec. 539.404  Transshipments through the United States prohibited.

    (a) The prohibitions in Secs. 539.201 and 539.202 apply to the 
importation into the United States, for transshipment or transit, of 
goods, technology, or services produced or provided by a designated 
foreign person that are intended or destined for third countries.
    (b) In the case of goods or technology transported by vessel, the 
prohibitions

[[Page 200]]

in Secs. 539.201 and 539.202 apply to the unlading in the United States 
and the intent to unlade in the United States of goods or technology 
produced or provided by a designated foreign person that is intended or 
destined for third countries.



Sec. 539.405  Importation of goods or technology from third countries.

    Importation into the United States from third countries of goods or 
technology is prohibited if undertaken with knowledge or reason to know 
that those goods contain raw materials or components produced or 
provided by a designated foreign person or technology produced or 
provided by a designated foreign person.



Sec. 539.406  Importation into and release from a bonded warehouse
or foreign trade zone.

    The prohibitions in Secs. 539.201 and 539.202 apply to importation 
into a bonded warehouse or a foreign trade zone of the United States.



  Subpart E_Licenses, Authorizations and Statements of Licensing Policy



Sec. 539.501  General and specific licensing procedures.

    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.

[64 FR 8716, Feb. 23, 1999, as amended at 68 FR 53658, Sept. 11, 2003]



Sec. 539.502  Effect of license.

    (a) No license contained in this part, or otherwise issued by or 
under the direction of the Director of the Office of Foreign Assets 
Control pursuant to this part, authorizes or validates any transaction 
effected prior to the issuance of the license, unless the prior 
transaction is specifically authorized in such license.
    (b) No regulation, ruling, instruction, or license authorizes any 
transaction prohibited by this part unless the regulation, ruling, 
instruction, or license is issued by the Office of Foreign Assets 
Control and specifically refers to this part. No regulation, ruling, 
instruction, or license referring to this part authorizes any 
transaction prohibited by any provision of this chapter unless the 
regulation, ruling, instruction, or license specifically refers to such 
provision.
    (c) Any regulation, ruling, instruction, or license authorizing any 
transaction otherwise prohibited by this part has the effect of removing 
from the transaction a prohibition or prohibitions contained in this 
part, but only to the extent specifically stated by its terms. Unless 
the regulation, ruling, instruction, or license otherwise specifies, 
such an authorization does not create any right, duty, obligation, 
claim, or interest that would not otherwise exist under ordinary 
principles of law in or with respect to any property.



Sec. 539.503  Exclusion from licenses.

    The Director of the Office of Foreign Assets Control reserves the 
right to exclude any person, property, or transaction from the operation 
of any license or from the privileges conferred by any license. The 
Director of the Office of Foreign Assets Control also reserves the right 
to restrict the applicability of any license to particular persons, 
property, transactions, or classes thereof. Such actions are binding 
upon all persons receiving actual or constructive notice of the 
exclusions or restrictions.



Sec. 539.504  Departments and agencies of the United States Government.

    (a) Departments and agencies of the United States Government may by 
written authorization signed by the head of the Department or Agency or 
his designee provide for:
    (1) Procurement contracts necessary to meet U.S. operational 
military requirements or requirements under defense production 
agreements; intelligence requirements; sole source suppliers, spare 
parts, components, routine servicing and maintenance of products for the 
United States Government; and medical and humanitarian items; and

[[Page 201]]

    (2) Performance pursuant to contracts in force as of 12:01 a.m. EDT, 
July 29, 1998, under appropriate circumstances.
    (b) Such written authorization shall:
    (1) Include details about the goods, technology, and services which 
have been approved for importation; the rationale for such approval; and 
24-hour-a-day contact information for the approving official or designee 
for use by the U.S. Customs Service should questions arise about an 
approved import;
    (2) Be in the form of license, regulation, order, directive, or 
exception;
    (3) Include information about the results of prior written 
consultation with the Under Secretary of State for Arms Control and 
International Security Affairs (through the Office of Chemical, 
Biological and Missile Nonproliferation and the Office of the Assistant 
Legal Adviser for Political-Military Affairs); and
    (4) Be provided to U.S. Customs Service officials upon the 
importation of any goods or technology covered by an authorization 
described in paragraph (a) of this section in a form which clearly 
establishes that the imported goods or technology is covered by the 
authorization.



                            Subpart F_Reports



Sec. 539.601  Records and reports.

    For provisions relating to required records and reports, see part 
501, subpart C, of this chapter. Recordkeeping and reporting 
requirements imposed by part 501 of this chapter with respect to the 
prohibitions contained in this part are considered requirements arising 
pursuant to this part.



                           Subpart G_Penalties



Sec. 539.701  Penalties.

    (a) Attention is directed to section 206 of the International 
Emergency Economic Powers Act (the ``Act'') (50 U.S.C. 1705), which is 
applicable to violations 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 Act.
    (1) A civil penalty not to exceed the amount set forth in Section 
206 of the Act may be imposed on any person who violates, attempts to 
violate, conspires to violate, or causes a violation of any license, 
order, regulation, or prohibition issued under the Act.

    Note to paragraph (a)(1): As of January 15, 2017, the applicable 
maximum civil penalty per violation of the Act is the greater of 
$289,238 or an amount that is twice the amount of the transaction that 
is the basis of the violation with respect to which the penalty is 
imposed.

    (2) A person who willfully commits, willfully attempts to commit, or 
willfully conspires to commit, or aids or abets in the commission of a 
violation of any license, order, regulation, or prohibition shall, upon 
conviction, be fined not more than $1,000,000, or if a natural person, 
may be imprisoned for not more than 20 years, or both.
    (b) Adjustments to penalty amounts. (1) The civil penalties provided 
in the Act are subject to adjustment pursuant to the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, as amended, 
28 U.S.C. 2461 note).
    (2) The criminal penalties provided in the Act are subject to 
adjustment pursuant to 18 U.S.C. 3571.
    (c) Attention is also directed to 18 U.S.C. 1001, which provides 
that whoever, in any matter within the jurisdiction of any department or 
agency of the United States, knowingly and willfully falsifies, 
conceals, or covers up by any trick, scheme, or device a material fact, 
or makes any false, fictitious, or fraudulent statement or 
representation or makes or uses any false writing or document knowing 
the same to contain any 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.
    (d) Violations of this part may also be subject to relevant 
provisions of other applicable laws.

[64 FR 8716, Feb. 23, 1999, as amended at 71 FR 29253, May 22, 2006; 73 
FR 32653, June 10, 2008; 81 FR 43074, July 1, 2016; 82 FR 10437, Feb. 
10, 2017]



Sec. 539.702  Prepenalty notice.

    (a) When required. If the Director of the Office of Foreign Assets 
Control has reasonable cause to believe that

[[Page 202]]

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 issue to the person concerned a notice of intent to impose a 
monetary penalty. This prepenalty notice shall be issued whether or not 
another agency has taken any action with respect to this matter.
    (b) Contents--(1) Facts of violation. The prepenalty notice shall 
describe the violation, specify the laws and regulations allegedly 
violated, and state the amount of the proposed monetary penalty.
    (2) Right to respond. The prepenalty notice also shall inform the 
respondent of respondent's right to make a written presentation within 
30 days of the date of mailing of the notice 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.



Sec. 539.703  Response to prepenalty notice; informal settlement.

    (a) Deadline for response. The respondent shall have 30 days from 
the date of mailing of the prepenalty notice to make a written response 
to the Director of the Office of Foreign Assets Control.
    (b) Form and contents of response. The written response need not be 
in any particular form, but must contain information sufficient to 
indicate that it is in response to the prepenalty notice. It should 
contain responses to the allegations in the prepenalty notice and set 
forth the reasons why the respondent believes the penalty should not be 
imposed or why, if imposed, it should be in a lesser amount than 
proposed.
    (c) Informal settlement. In addition or as an alternative to a 
written response to a prepenalty notice issued pursuant to this section, 
the respondent or respondent's representative may contact the Office of 
Foreign Assets Control as advised in the prepenalty notice to propose 
the settlement of allegations contained in the prepenalty notice and 
related matters. In the event of settlement at the prepenalty stage, the 
claim proposed in the prepenalty notice will be withdrawn, the 
respondent is not 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 30-day period specified in paragraph 
(a) of this section for written response to the prepenalty notice 
remains in effect unless additional time is granted by the Office of 
Foreign Assets Control.



Sec. 539.704  Penalty imposition or withdrawal.

    (a) No violation. If, after considering any response to a prepenalty 
notice and any relevant facts, the Director of the Office of Foreign 
Assets Control determines that there was no violation by the respondent 
named in the prepenalty notice, the Director promptly shall notify the 
respondent in writing of that determination and that no monetary penalty 
will be imposed.
    (b) Violation. If, after considering any response to a prepenalty 
notice and any relevant facts, the Director of the Office of Foreign 
Assets Control determines that there was a violation by the respondent 
named in the prepenalty notice, the Director promptly shall issue a 
written notice of the imposition of the monetary penalty to the 
respondent.
    (1) The penalty notice shall inform the respondent that payment of 
the assessed penalty must be made within 30 days of the date of mailing 
of the penalty notice.
    (2) The penalty notice shall inform the respondent of the 
requirement to furnish the respondent's taxpayer identification number 
pursuant to 31 U.S.C. 7701 and that such number will be used for 
purposes of collecting and reporting on any delinquent penalty amount.

[[Page 203]]



Sec. 539.705  Administrative collection; referral to United States 
Department of Justice.

    In the event that the respondent does not pay the penalty imposed 
pursuant to this part or make payment arrangements acceptable to the 
Director of the Office of Foreign Assets Control within 30 days of the 
date of mailing of the penalty notice, the matter may be referred for 
administrative collection measures by the Department of the Treasury or 
to the United States Department of Justice for appropriate action to 
recover the penalty in a civil suit in a Federal district court.



                          Subpart H_Procedures



Sec. 539.801  Procedures.

    For license application procedures and procedures relating to 
amendments, modifications, or revocations of licenses; administrative 
decisions; rulemaking; and requests for documents pursuant to the 
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see 
part 501, subpart E, of this chapter.

[64 FR 8716, Feb. 23, 1999, as amended at 68 FR 53658, Sept. 11, 2003]



Sec. 539.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 12938 of November 14, 1994 (59 FR 59099, 3 
CFR, 1994 Comp., p. 950), as amended by Executive Order 13094 of July 
28, 1998 (63 FR 40803, July 30, 1998), and any further Executive orders 
relating to the national emergency declared in Executive Order 12938 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.



                    Subpart I_Paperwork Reduction Act



Sec. 539.901  Paperwork Reduction Act notice.

    For approval by the Office of Management and Budget (``OMB'') under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information 
collections relating to recordkeeping and reporting requirements, 
licensing procedures (including those pursuant to statements of 
licensing policy), and other procedures, see Sec. 501.901 of this 
chapter. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays a 
valid control number assigned by OMB.



         Sec. Appendix I to Part 539--Designated Foreign Persons

    The following foreign persons have been determined by the Secretary 
of State to have materially contributed or attempted to contribute 
materially to the efforts of a foreign country, project, or entity of 
proliferation concern to use, acquire, design, develop, produce, or 
stockpile weapons of mass destruction or missiles capable of delivering 
such weapons, for purposes of section 4(a) of Executive Order 12938, as 
amended by section 1(a) of Executive Order 13094, and to be subject to 
import measures authorized in Executive Orders 12938 and 13094. They, 
and any entities owned or controlled by them, unless indicated 
otherwise, are designated foreign persons for purposes of this part. The 
applicable effective date and citation to the Federal Register for each 
such person is given in brackets after that person's name and 
identifying information:
1. Baltic State Technical University, including at 1/21, 1-ya 
Krasnoarmeiskaya Ul., 198005 St. Petersburg, Russia [July 30, 1998; 63 
FR 42089, August 6, 1998].
2. Europalace 2000, including at Moscow, Russia [July 30, 1998; 63 FR 
42089, August 6, 1998].
3. Glavkosmos, including at 9 Krasnoproletarskaya St., 103030 Moscow, 
Russia [July 30, 1998; 63 FR 42089, August 6, 1998].
4. Grafit, also known as (``aka'') State Scientific Research Institute 
of Graphite or NIIGRAFIT, including at 2 Ulitsa Elektrodnaya, 111524 
Moscow, Russia [July 30, 1998; 63 FR 42089, August 6, 1998].
5. MOSO Company, including at Moscow, Russia [July 30, 1998; 63 FR 
42089, August 6, 1998].
6. D. Mendeleyev University of Chemical Technology of Russia, including 
at 9 Miusskaya Sq., Moscow 125047, Russia [January 8, 1999; 64 FR 2935, 
January 19, 1999].
7. Moscow Aviation Institute (MAI), including at 4 Volokolamskoye 
Shosse, Moscow 125871, Russia [January 8, 1999; 64 FR 2935, January 19, 
1999].
8. The Scientific Research and Design Institute of Power Technology, aka 
NIKIET, Research and Development Institute of Power Engineering [RDIPE], 
and ENTEK,

[[Page 204]]

including at 101000, P.O. Box 788, Moscow, Russia.

[64 FR 8716, Feb. 23, 1999, as amended at 66 FR 57381, Nov. 15, 2001]



PART 541_ZIMBABWE SANCTIONS REGULATIONS--Table of Contents



      Subpart A_Relation of This Part to Other Laws and Regulations

Sec.
541.101  Relation of this part to other laws and regulations.

                         Subpart B_Prohibitions

541.201  Prohibited transactions involving blocked property.
541.202  Effect of transfers violating the provisions of this part.
541.203  Holding of funds in interest-bearing accounts; investment and 
          reinvestment.
541.204  Evasions; attempts; causing violations; conspiracies.
541.205  Expenses of maintaining blocked physical property; liquidation 
          of blocked property.
541.206  Exempt transactions.

                      Subpart C_General Definitions

541.300  Applicability of definitions.
541.301  Blocked account; blocked property.
541.302  Effective date.
541.303  Entity.
541.304  Information or informational materials.
541.305  Interest.
541.306  Licenses; general and specific.
541.307  Person.
541.308  Property; property interest.
541.309  Transfer.
541.310  United States.
541.311  U.S. financial institution.
541.312  United States person; U.S. person.
541.313  Financial, material, or technological support; financial, 
          material, logistical, or technical support.
541.314  Government of Zimbabwe
541.315  OFAC.

                        Subpart D_Interpretations

541.401  Reference to amended sections.
541.402  Effect of amendment.
541.403  Termination and acquisition of an interest in blocked property.
541.404  Transactions ordinarily incident to a licensed transaction.
541.405  Provision of services.
541.406  Offshore transactions involving blocked property.
541.407  Payments from blocked accounts to satisfy obligations 
          prohibited.
541.408  Charitable contributions.
541.409  Credit extended and cards issued by U.S. financial institutions 
          to a person whose property and interests in property are 
          blocked.
541.410  Setoffs prohibited.
541.411  Entities owned by a person whose property and interests in 
          property are blocked.

  Subpart E_Licenses, Authorizations and Statements of Licensing Policy

541.501  General and specific licensing procedures.
541.502  Effect of license or authorization.
541.503  Exclusion from licenses.
541.504  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
541.505  Entries in certain accounts for normal service charges 
          authorized.
541.506  Investment and reinvestment of certain funds.
541.507  Provision of certain legal services authorized.
541.508  Payments for legal services from funds outside the United 
          States authorized.
541.509  Authorization of emergency medical services.
541.510  Transactions related to Agricultural Development Bank of 
          Zimbabwe and Infrastructure Development Bank of Zimbabwe 
          authorized.

                            Subpart F_Reports

541.601  Records and reports.

                           Subpart G_Penalties

541.701  Penalties.
541.702  Pre-Penalty Notice; settlement.
541.703  Penalty imposition.
541.704  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H_Procedures

541.801  Procedures.
541.802  Delegation by the Secretary of the Treasury.

                    Subpart I_Paperwork Reduction Act

541.901  Paperwork Reduction Act notice.
    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. 13288, 68 FR 11457, 3 CFR, 2003 
Comp., p. 186; E.O. 13391, 70 FR 71201, 3 CFR, 2005 Comp., p. 206; E.O. 
13469, 73 FR 43841, 3 CFR, 2008 Comp., p. 1025.

    Source: 69 FR 45248, July 29, 2004, unless otherwise noted.

[[Page 205]]



      Subpart A_Relation of This Part to Other Laws and Regulations



Sec. 541.101  Relation of this part to other laws and regulations.

    This part is separate from, and independent of, the other parts of 
this chapter, with the exception of part 501 of this chapter, the record 
keeping and reporting requirements and license application and other 
procedures of which apply to this part. 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. Differing 
foreign policy and national security circumstances may result in 
differing interpretations of similar language among the parts of this 
chapter. No license or authorization contained in or issued pursuant to 
those other parts authorizes any transaction prohibited by this part. No 
license or authorization contained in or issued pursuant to any other 
provision of law or regulation authorizes any transaction prohibited by 
this part. No license or authorization contained in or issued pursuant 
to this part relieves the involved parties from complying with any other 
applicable laws or regulations.



                         Subpart B_Prohibitions

    Source: 79 FR 39314, July 10, 2014, unless otherwise noted.



Sec. 541.201  Prohibited transactions involving blocked property.

    (a) 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 any United States person, including any 
foreign branch, of the following persons are blocked and may not be 
transferred, paid, exported, withdrawn, or otherwise dealt in:
    (1) The persons listed in the Annex to Executive Order 13288 of 
March 6, 2003, as amended by Executive Order 13391 of November 22, 2005;
    (2) Any person determined by the Secretary of the Treasury, in 
consultation with the Secretary of State:
    (i) To have engaged in actions or policies to undermine Zimbabwe's 
democratic processes or institutions;
    (ii) To have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services in support 
of, actions or policies described in paragraph (a)(2)(i) of this section 
or any person whose property and interests in property are blocked 
pursuant to paragraphs (a)(1) or (a)(2) of this section;
    (iii) To be or have been an immediate family member of any person 
whose property and interest in property are blocked pursuant to 
paragraphs (a)(1) or (a)(2) of this section; or
    (iv) To be owned or controlled by, or acting or purporting to act 
for or on behalf of, directly or indirectly, any person whose property 
and interests in property are blocked pursuant to paragraphs (a)(1) or 
(a)(2) of this section; and
    (3) Any person determined by the Secretary of the Treasury, after 
consultation with the Secretary of State:
    (i) To be a senior official of the Government of Zimbabwe;
    (ii) To be owned or controlled by, directly or indirectly, the 
Government of Zimbabwe or an official or officials of the Government of 
Zimbabwe;
    (iii) To have engaged in actions or policies to undermine Zimbabwe's 
democratic processes or institutions;
    (iv) To be responsible for, or to have participated in, human rights 
abuses related to political repression in Zimbabwe;
    (v) To be engaged in, or to have engaged in, activities facilitating 
public corruption by senior officials of the Government of Zimbabwe;
    (vi) To be a spouse or dependent child of any person whose property 
and interests in property are blocked pursuant to paragraph (a) of this 
section;
    (vii) To have materially assisted, sponsored, or provided financial, 
material, logistical, or technical support for, or goods or services in 
support of, the Government of Zimbabwe, any senior official thereof, or 
any person whose property and interests in property are blocked pursuant 
to paragraph (a) of this section; or
    (viii) To be owned or controlled by, or to have acted or purported 
to act for or on behalf of, directly or indirectly,

[[Page 206]]

any person whose property and interests in property are blocked pursuant 
to paragraph (a) of this section.

    Note 1 to paragraph (a) of Sec. 541.201: The names of persons listed 
in or designated pursuant to Executive Order 13288 of March 6, 2003, 
Executive Order 13391 of November 22, 2005, or Executive Order 13469 of 
July 25, 2008, whose property and interests in property are blocked 
pursuant to paragraph (a) of 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 ``[ZIMBABWE].'' The 
SDN List is accessible through the following page on OFAC's Web site: 
www.treasury.gov/sdn. Additional information pertaining to the SDN List 
can be found in Appendix A to this chapter. (See Sec. 541.411 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.)
    Note 2 to paragraph (a) of Sec. 541.201: 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 paragraph (a) of this section also are 
published in the Federal Register and incorporated into the SDN List 
with the identifier ``[BPI-ZIMBABWE].''
    Note 3 to paragraph (a) of Sec. 541.201: Sections 501.806 and 
501.807 of this chapter 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.

    (b) The prohibitions in paragraph (a) of this section include, but 
are not limited to, prohibitions on the following transactions:
    (1) 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 paragraph (a) of this 
section; and
    (2) 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 paragraph (a) of this section.
    (c) Unless 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 appear to have assigned, 
transferred, or otherwise disposed of the security.
    (d) The prohibitions in paragraph (a) of this section apply except 
to the extent transactions are authorized by regulations, orders, 
directives, rulings, instructions, licenses, or otherwise, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date.



Sec. 541.202  Effect of transfers violating the provisions of this 
part.

    (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 
Sec. 541.201(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 interest.
    (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 Sec. 541.201(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.

[[Page 207]]

    (c) Unless otherwise provided, a license or other authorization 
issued by OFAC 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 this part and any 
regulation, order, directive, ruling, instruction, or license issued 
pursuant to this part.
    (d) Transfers of property that otherwise would be null and void or 
unenforceable by virtue of the provisions of this section shall not be 
deemed to be null and void or unenforceable as to any person with whom 
such property is or was held or maintained (and as to such person only) 
in cases in which such person is able to establish to the satisfaction 
of OFAC each of the following:
    (1) Such transfer did not represent a willful violation of the 
provisions of this part by the person with whom such property is or was 
held or maintained (and as to such person only);
    (2) The person with whom such property is or was held or maintained 
did not have reasonable cause to know or suspect, in view of all the 
facts and circumstances known or available to such person, that such 
transfer required a license or authorization issued pursuant to this 
part and was not so licensed or authorized, or, if a license or 
authorization did purport to cover the transfer, that such license or 
authorization had been obtained by misrepresentation of a third party or 
withholding of material facts or was otherwise fraudulently obtained; 
and
    (3) The person with whom such property is or was held or maintained 
filed with OFAC a report setting forth in full the circumstances 
relating to such transfer promptly upon discovery that:
    (i) Such transfer was in violation of the provisions of this part or 
any regulation, ruling, instruction, license, or other directive or 
authorization issued pursuant to this part;
    (ii) Such transfer was not licensed or authorized by OFAC; or
    (iii) If a license did purport to cover the transfer, such license 
had been obtained by misrepresentation of a third party or withholding 
of material facts or was otherwise fraudulently obtained.

    Note to paragraph (d) of Sec. 541.202: The filing of a report in 
accordance with the provisions of paragraph (d)(3) of this section shall 
not be deemed evidence that the terms of paragraphs (d)(1) and (d)(2) of 
this section have been satisfied.

    (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 and interests in property blocked 
pursuant to Sec. 541.201(a).



Sec. 541.203  Holding of funds in interest-bearing accounts;
investment and reinvestment.

    (a) Except as provided in paragraphs (e) or (f) of this section, or 
as otherwise directed by OFAC, any U.S. person holding funds, such as 
currency, bank deposits, or liquidated financial obligations, subject to 
Sec. 541.201(a) shall hold or place such funds in a blocked interest-
bearing account located in the United States.
    (b)(1) For purposes of this section, the term blocked interest-
bearing account means a blocked account:
    (i) In a federally-insured U.S. bank, thrift institution, or credit 
union, provided the funds are earning interest at rates that are 
commercially reasonable; or
    (ii) With a broker or dealer registered with the Securities and 
Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.), provided the funds are invested in a money market fund or 
in U.S. Treasury bills.
    (2) Funds held or placed in a blocked account pursuant to paragraph 
(a) of this section may not be invested in instruments the maturity of 
which exceeds 180 days.
    (c) For purposes of this section, a rate is commercially reasonable 
if it is the rate currently offered to other depositors on deposits or 
instruments of comparable size and maturity.
    (d) For purposes of this section, if interest is credited to a 
separate blocked account or subaccount, the name of the account party on 
each account must be the same.
    (e) Blocked funds held in instruments the maturity of which exceeds 
180 days at the time the funds become subject to Sec. 541.201(a) may 
continue to be held

[[Page 208]]

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 Sec. 541.201(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.
    (g) This section does not create an affirmative obligation for the 
holder of blocked tangible property, such as chattels or real estate, or 
of other blocked property, such as debt or equity securities, to sell or 
liquidate such property. However, OFAC may issue licenses permitting or 
directing such sales or liquidation in appropriate cases.
    (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 Sec. 541.201(a), nor may their holder cooperate 
in or facilitate the pledging or other attempted use as collateral of 
blocked funds or other assets.



Sec. 541.204  Evasions; attempts; causing violations; conspiracies.

    (a) Any transaction by a U.S. person or within the United States on 
or after the effective date that evades or avoids, has the purpose of 
evading or avoiding, causes a violation of, or attempts to violate any 
of the prohibitions set forth in this part is prohibited.
    (b) Any conspiracy formed to violate any of the prohibitions set 
forth in this part is prohibited.



Sec. 541.205  Expenses of maintaining blocked physical property;
liquidation of blocked property.

    (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 Sec. 541.201(a) 
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 Sec. 541.201(a) 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.



Sec. 541.206  Exempt transactions.

    (a) Personal communications. The prohibitions contained in this part 
do not apply to any postal, telegraphic, telephonic, or other personal 
communication that does not involve the transfer of anything of value.
    (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 Sec. 541.304, whether commercial or otherwise, 
regardless of format or medium of transmission.
    (2) This section does not exempt from regulation or authorize 
transactions related to information or informational materials not fully 
created and in existence at the date of the transactions, or to the 
substantive or artistic alteration or enhancement of informational 
materials, or to the provision of marketing and business consulting 
services. Such prohibited transactions include, but are not limited to, 
payment of advances for information or informational materials not yet 
created and completed (with the exception of prepaid subscriptions for 
widely circulated magazines and other periodical publications); 
provision of services to market, produce or co-produce, create, or 
assist in the creation of information or informational materials; and 
payment of royalties with respect to income received for enhancements or 
alterations made by U.S. persons to such information or informational 
materials.
    (3) This section does not exempt or authorize transactions incident 
to the exportation of software subject to the Export Administration 
Regulations, 15

[[Page 209]]

CFR parts 730-774, 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 Sec. 541.201(a) are prohibited.
    (c) Travel. The prohibitions contained in this part do not apply to 
transactions ordinarily incident to travel to or from any country, 
including importation or exportation of accompanied baggage for personal 
use, maintenance within any country including payment of living expenses 
and acquisition of goods or services for personal use, and arrangement 
or facilitation of such travel, including nonscheduled air, sea, or land 
voyages.



                      Subpart C_General Definitions



Sec. 541.300  Applicability of definitions.

    The definitions in this subpart apply throughout the entire part.

[79 FR 39316, July 10, 2014]



Sec. 541.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibitions in Sec. 541.201 held in 
the name of a person whose property and interests in property are 
blocked pursuant to Sec. 541.201(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 a license or other authorization from OFAC expressly 
authorizing such action.

    Note to Sec. 541.301: See Sec. 541.411 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 Sec. 541.201(a).

[79 FR 39316, July 10, 2014]



Sec. 541.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this part as 
follows:
    (a) Except as set forth in paragraph (c) of this section, with 
respect to a person whose property and interests in property are blocked 
pursuant to Sec. 541.201(a)(1):
    (1) As a result of being listed in the Annex to Executive Order 
13391 of November 22, 2005, and except as provided in paragraph (a)(3) 
of this section, 12:01 a.m. eastern standard time on November 23, 2005;
    (2) As a result of initially being listed in the Annex to Executive 
Order 13288 of March 6, 2003, and subsequently being listed in the Annex 
to Executive Order 13391 of November 22, 2005, 12:01 a.m. eastern 
standard time on March 7, 2003; or
    (3) As a result of a determination pursuant to section 1(b) of 
Executive Order 13288 of March 6, 2003, as originally issued, regardless 
of whether the person was subsequently listed in the Annex to Executive 
Order 13391 of November 22, 2005, the earlier of the date of actual or 
constructive notice that such person's property and interests in 
property are blocked;
    (b) Except as set forth in paragraphs (a) and (c) of this section, 
with respect to a person whose property and interests in property are 
otherwise blocked pursuant to Sec. 541.201(a), the earlier of the date 
of actual or constructive notice that such person's property and 
interests in property are blocked; and
    (c) With respect to the prohibition in Sec. 541.201, as further 
explained in Sec. 541.408, on the making of donations of articles, such 
as food, clothing, and medicine, intended to be used to relieve human 
suffering by, to, or for the benefit of persons whose property and 
interests in property are blocked pursuant to Sec. 541.201(a), the later 
of the effective date as set forth in paragraphs (a) and (b) of this 
section and 12:01 a.m. eastern standard time on November 23, 2005.

[79 FR 39316, July 10, 2014]

[[Page 210]]



Sec. 541.303  Entity.

    The term entity means a partnership, association, trust, joint 
venture, corporation, group, subgroup, or other organization.



Sec. 541.304  Information or informational materials.

    (a) For purposes of this part, the term information or informational 
materials includes, but is not limited to, publications, films, posters, 
phonograph records, photographs, microfilms, microfiche, tapes, compact 
disks, CD ROMs, artworks, and news wire feeds.

    Note to paragraph (a) of Sec. 541.304: To be considered information 
or informational materials, artworks must be classified under chapter 
heading 9701, 9702, or 9703 of the Harmonized Tariff Schedule of the 
United States.

    (b) The term information or informational materials, with respect to 
United States exports, does not include items:
    (1) That were, as of April 30, 1994, or that thereafter become, 
controlled for export pursuant to section 5 of the Export Administration 
Act of 1979, 50 U.S.C. App. 2401-2420 (1979) (the ``EAA''), or section 6 
of the EAA to the extent that such controls promote the nonproliferation 
or antiterrorism policies of the United States; or
    (2) With respect to which acts are prohibited by 18 U.S.C. chapter 
37.



Sec. 541.305  Interest.

    Except as otherwise provided in this part, the term interest when 
used with respect to property (e.g., ``an interest in property'') means 
an interest of any nature whatsoever, direct or indirect.



Sec. 541.306  Licenses; general and specific.

    (a) Except as otherwise provided in this part, the term license 
means any license or authorization contained in or issued pursuant to 
this part.
    (b) The term general license means any license or authorization the 
terms of which are set forth in subpart E of this part or made available 
on OFAC's Web site: www.treasury.gov/ofac.
    (c) The term specific license means any license or authorization 
issued pursuant to this part, but not set forth in subpart E of this 
part or made available on OFAC's Web site: www.treasury.gov/ofac.

    Note to Sec. 541.306: See Sec. 501.801 of this chapter on licensing 
procedures.

[79 FR 39316, July 10, 2014]



Sec. 541.307  Person.

    The term person means an individual or entity.



Sec. 541.308  Property; property interest.

    The terms property and property interest include, but are not 
limited to, money, checks, drafts, bullion, bank deposits, savings 
accounts, debts, indebtedness, obligations, notes, guarantees, 
debentures, stocks, bonds, coupons, any other financial instruments, 
bankers acceptances, mortgages, pledges, liens or other rights in the 
nature of security, warehouse receipts, bills of lading, trust receipts, 
bills of sale, any other evidences of title, ownership or indebtedness, 
letters of credit and any documents relating to any rights or 
obligations thereunder, powers of attorney, goods, wares, merchandise, 
chattels, stocks on hand, ships, goods on ships, real estate mortgages, 
deeds of trust, vendors' sales agreements, land contracts, leaseholds, 
ground rents, real estate and any other interest therein, options, 
negotiable instruments, trade acceptances, royalties, book accounts, 
accounts payable, judgments, patents, trademarks or copyrights, 
insurance policies, safe deposit boxes and their contents, annuities, 
pooling agreements, services of any nature whatsoever, contracts of any 
nature whatsoever, and any other property, real, personal, or mixed, 
tangible or intangible, or interest or interests therein, present, 
future or contingent.



Sec. 541.309  Transfer.

    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. Without

[[Page 211]]

limitation on the foregoing, it 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 
interest 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

[79 FR 39317, July 10, 2014]



Sec. 541.310  United States.

    The term United States means the United States, its territories and 
possessions, and all areas under the jurisdiction or authority thereof.



Sec. 541.311  U.S. financial institution.

    The term U.S. financial institution means any U.S. entity (including 
its foreign branches) that is engaged in the business of accepting 
deposits, making, granting, transferring, holding, or brokering a loan 
or other extension of credit, or purchasing or selling foreign exchange, 
securities, commodity futures or options, or procuring purchasers and 
sellers thereof, as principal or agent. It includes but is not limited 
to depository institutions, banks, savings banks, trust companies, 
securities brokers and dealers, commodity futures and options brokers 
and dealers, forward contract and foreign exchange merchants, securities 
and commodities exchanges, clearing corporations, investment companies, 
employee benefit plans, and U.S. holding companies, U.S. affiliates, or 
U.S. subsidiaries of any of the foregoing. This term includes those 
branches, offices, and agencies of foreign financial institutions that 
are located in the United States, but not such institutions' foreign 
branches, offices, or agencies.

[79 FR 39317, July 10, 2014]



Sec. 541.312  United States person; U.S. person.

    The term United States person or U.S. person means any United States 
citizen, permanent resident alien, entity organized under the laws of 
the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States.



Sec. 541.313  Financial, material, or technological support;
financial, material, logistical, or technical support.

    The terms financial, material, or technological support, and 
financial, material, logistical, or technical support as used in, 
respectively, Secs. 541.201(a)(2)(ii) and 541.201(a)(3)(vii), mean 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.

[79 FR 39317, July 10, 2014]



Sec. 541.314  Government of Zimbabwe

    The term Government of Zimbabwe means the Government of Zimbabwe, 
its agencies, instrumentalities, and controlled entities.

[79 FR 39317, July 10, 2014]

[[Page 212]]



Sec. 541.315  OFAC.

    The term OFAC means the Department of the Treasury's Office of 
Foreign Assets Control.

[79 FR 39317, July 10, 2014]



                        Subpart D_Interpretations

    Source: 79 FR 39317, July 10, 2014, unless otherwise noted.



Sec. 541.401  Reference to amended sections.

    Except as otherwise specified, reference to any provision in or 
appendix to this part or chapter or to any regulation, ruling, order, 
instruction, directive, or license issued pursuant to this part refers 
to the same as currently amended.



Sec. 541.402  Effect of amendment.

    Unless otherwise specifically provided, any amendment, modification, 
or revocation of any provision in or appendix to this part or chapter or 
of any order, regulation, ruling, instruction, or license issued by OFAC 
does not affect any act done or omitted, or any civil or criminal 
proceeding commenced or pending, prior to such amendment, modification, 
or revocation. All penalties, forfeitures, and liabilities under any 
such order, regulation, ruling, instruction, or license continue and may 
be enforced as if such amendment, modification, or revocation had not 
been made.



Sec. 541.403  Termination and acquisition of an interest in blocked
property.

    (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 Sec. 541.201(a), such property shall no longer 
be deemed to be property blocked pursuant to Sec. 541.201(a), unless 
there exists in the property another interest that is blocked pursuant 
to Sec. 541.201(a), 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 
Sec. 541.201(a), such property shall be deemed to be property in which 
such a person has an interest and therefore blocked.



Sec. 541.404  Transactions ordinarily incident to a licensed transaction.

    (a) Any transaction ordinarily incident to a licensed transaction 
and necessary to give effect thereto is also authorized, except:
    (1) 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 Sec. 541.201(a); or
    (2) An ordinarily incident transaction, not explicitly authorized 
within the terms of the license, involving a debit to a blocked account 
or a transfer of blocked property.
    (b) Example. A license authorizing a person to complete a securities 
sale involving Company A, whose property and interests in property are 
blocked pursuant to Sec. 541.201(a), also authorizes other persons to 
engage in activities that are ordinarily incident and necessary to 
complete the sale, including transactions by the buyer, broker, transfer 
agents, and banks, provided that such other persons are not themselves 
persons whose property and interests in property are blocked pursuant to 
Sec. 541.201(a).



Sec. 541.405  Provision of services.

    (a) The prohibitions on transactions contained in Sec. 541.201 apply 
to services performed in the United States or by U.S. persons, wherever 
located, including by a foreign 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 Sec. 541.201(a); or
    (2) With respect to property interests of any person whose property 
and interests in property are blocked pursuant to Sec. 541.201(a).
    (b) Example. U.S. persons may not, except as authorized by or 
pursuant to

[[Page 213]]

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 
Sec. 541.201(a).

    Note to Sec. 541.405: See Secs. 541.507 and 541.509 on licensing 
policy with regard to the provision of certain legal and emergency 
medical services.



Sec. 541.406  Offshore transactions involving blocked property.

    The prohibitions in Sec. 541.201 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 Sec. 541.201(a).



Sec. 541.407  Payments from blocked accounts to satisfy obligations
prohibited.

    Pursuant to Sec. 541.201, 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.

    Note to Sec. 541.407: See also Sec. 541.502(e), which provides that 
no license or other authorization contained in or issued pursuant to 
this part authorizes transfers of or payments from blocked property or 
debits to blocked accounts unless the license or other authorization 
explicitly authorizes the transfer of or payment from blocked property 
or the debit to a blocked account.



Sec. 541.408  Charitable contributions.

    Unless specifically authorized by OFAC 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, or 
received from, a person whose property and interests in property are 
blocked pursuant to Sec. 541.201(a). For the purposes of this part, a 
contribution is made by, to, or for the benefit of, or received from, a 
person whose property and interests in property are blocked pursuant to 
Sec. 541.201(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 by, to, or for the benefit of such a person, or the 
receipt of contributions from such a person.



Sec. 541.409  Credit extended and cards issued by U.S. financial
institutions to a person whose property and interests in property
are blocked.

    The prohibition in Sec. 541.201 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 Sec. 541.201(a).



Sec. 541.410  Setoffs prohibited.

    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 Sec. 541.201 if effected after the effective date.



Sec. 541.411  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. 541.201(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 Sec. 541.201(a), regardless of whether the name of the 
entity is incorporated into OFAC's Specially Designated Nationals and 
Blocked Persons List (SDN List).



  Subpart E_Licenses, Authorizations and Statements of Licensing Policy



Sec. 541.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501, 
subpart E of this chapter. Licensing actions taken pursuant to part 501 
of this chapter

[[Page 214]]

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 
Zimbabwe sanctions page on OFAC's Web site: www.treasury.gov/ofac.

[79 FR 39318, July 10, 2014]



Sec. 541.502  Effect of license or authorization.

    (a) No license or other authorization contained in this part, or 
otherwise issued by OFAC, authorizes or validates any transaction 
effected prior to the issuance of such license or other authorization, 
unless specifically provided in such license or authorization.
    (b) No regulation, ruling, instruction, or license authorizes any 
transaction prohibited under this part unless the regulation, ruling, 
instruction, or license is issued by OFAC and specifically refers to 
this part. No regulation, ruling, instruction, or license referring to 
this part shall be deemed to authorize any transaction prohibited by any 
other part of this chapter unless the regulation, ruling, instruction, 
or license specifically refers to such part.
    (c) Any regulation, ruling, instruction, or license authorizing any 
transaction otherwise prohibited under this part has the effect of 
removing a prohibition contained in this part from the transaction, but 
only to the extent specifically stated by its terms. Unless the 
regulation, ruling, instruction, or license otherwise specifies, such an 
authorization does not create any right, duty, obligation, claim, or 
interest in, or with respect to, any property which would not otherwise 
exist under ordinary principles of law.
    (d) Nothing contained in this part shall be construed to supersede 
the requirements established under any other provision of law or to 
relieve a person from any requirement to obtain a license or other 
authorization from another department or agency of the U.S. Government 
in compliance with applicable laws and regulations subject to the 
jurisdiction of that department or agency. For example, exports of 
goods, services, or technical data which are not prohibited by this part 
or which do not require a license by OFAC, nevertheless may require 
authorization by the U.S. Department of Commerce, the U.S. Department of 
State, or other agencies of the U.S. Government.
    (e) No license or other authorization contained in or issued 
pursuant to this part authorizes transfers of or payments from blocked 
property or debits to blocked accounts unless the license or other 
authorization explicitly authorizes the transfer of or payment from 
blocked property or the debit to a blocked account.
    (f) Any payment relating to a transaction authorized in or pursuant 
to this part that is routed through the U.S. financial system should 
reference the relevant OFAC general or specific license authorizing the 
payment to avoid the blocking or rejection of the transfer.

[69 FR 45248, July 29, 2004, as amended at 79 FR 39318, July 10, 2014]



Sec. 541.503  Exclusion from licenses.

    OFAC reserves the right to exclude any person, property, 
transaction, or class thereof from the operation of any license or from 
the privileges conferred by any license. OFAC also reserves the right to 
restrict the applicability of any license to particular persons, 
property, transactions, or classes thereof. Such actions are binding 
upon actual or constructive notice of the exclusions or restrictions.

[79 FR 39319, July 10, 2014]



Sec. 541.504  Payments and transfers to blocked accounts in U.S.
financial institutions.

    Any payment of funds or transfer of credit in which a person whose 
property and interests in property are blocked pursuant to 
Sec. 541.201(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

[[Page 215]]

account may be made only to another blocked account held in the same 
name.

    Note to Sec. 541.504: See Sec. 501.603 of this chapter for mandatory 
reporting requirements regarding financial transfers. See also 
Sec. 541.203 concerning the obligation to hold blocked funds in 
interest-bearing accounts.

[79 FR 39319, July 10, 2014]



Sec. 541.505  Entries in certain accounts for normal service charges 
authorized.

    (a) A U.S. financial institution is authorized to debit any blocked 
account held at that financial institution in payment or reimbursement 
for normal service charges owed it by the owner of that blocked account.
    (b) As used in this section, the term normal service charges shall 
include charges in payment or reimbursement for interest due; cable, 
telegraph, internet, or telephone charges; postage costs; custody fees; 
small adjustment charges to correct bookkeeping errors; and, but not by 
way of limitation, minimum balance charges, notary and protest fees, and 
charges for reference books, photocopies, credit reports, transcripts of 
statements, registered mail, insurance, stationery and supplies, and 
other similar items.

[69 FR 45248, July 29, 2004, as amended at 79 FR 39319, July 10, 2014]



Sec. 541.506  Investment and reinvestment of certain funds.

    Subject to the requirements of Sec. 541.203, U.S. financial 
institutions are authorized to invest and reinvest assets blocked 
pursuant to Sec. 541.201, subject to the following conditions:
    (a) The assets representing such investments and reinvestments are 
credited to a blocked account or subaccount which is held in the same 
name at the same U.S. financial institution, or within the possession or 
control of a U.S. person, but funds shall not be transferred outside the 
United States for this purpose;
    (b) The proceeds of such investments and reinvestments shall not be 
credited to a blocked account or subaccount under any name or 
designation that differs from the name or designation of the specific 
blocked account or subaccount in which such funds or securities were 
held; and
    (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 Sec. 541.201(a).

[69 FR 45248, July 29, 2004, as amended at 79 FR 39319, July 10, 2014]



Sec. 541.507  Provision of certain legal services authorized.

    (a) The provision of the following legal services to or on behalf of 
persons whose property and interests in property are blocked pursuant to 
Sec. 541.201(a) or any further Executive orders relating to the national 
emergency declared in E.O. 13288 of March 6, 2003, is authorized, 
provided that receipt of payment of professional fees and reimbursement 
of incurred expenses must be specifically licensed or otherwise 
authorized pursuant to Sec. 541.508:
    (1) Provision of legal advice and counseling on the requirements of 
and compliance with the laws of the United States or any jurisdiction 
within the United States, provided that such advice and counseling are 
not provided to facilitate transactions in violation of this part;
    (2) Representation of persons named as defendants in or otherwise 
made parties to legal, arbitration, or administrative proceedings before 
any U.S. federal, state, or local court or agency;
    (3) Initiation and conduct of legal, arbitration, or administrative 
proceedings before any U.S. federal, state, or local court or agency;
    (4) Representation of persons before any U.S. federal, state, or 
local court or agency with respect to the imposition, administration, or 
enforcement of U.S. sanctions against such persons; and
    (5) Provision of legal services in any other context in which 
prevailing U.S. law requires access to legal counsel at public expense.
    (b) The provision of any other legal services to persons whose 
property and interests in property are blocked pursuant to 
Sec. 541.201(a) or any further Executive orders relating to the national 
emergency declared in E.O. 13288 of March 6, 2003, not otherwise 
authorized

[[Page 216]]

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 Sec. 541.201(a) or any further Executive orders relating to 
the national emergency declared in E.O. 13288 of March 6, 2003, is 
prohibited unless licensed pursuant to this part.

    Note to Sec. 541.507: 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 a limited amount of 
blocked funds for the payment of legal fees 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 Web 
site: www.treasury.gov/ofac.

[79 FR 39319, July 10, 2014]



Sec. 541.508  Payments for legal services from funds outside the
United States authorized.

    Receipts of payment of professional fees and reimbursement of 
incurred expenses for the provision of legal services authorized 
pursuant to Sec. 541.507(a) to or on behalf of any person whose property 
and interests in property are blocked pursuant to Sec. 541.201(a) or any 
further Executive orders relating to the national emergency declared in 
E.O. 13288 of March 6, 2003, are authorized from funds originating 
outside the United States, provided that:
    (a) Prior to receiving payment for legal services authorized 
pursuant to Sec. 541.507(a) rendered to persons whose property and 
interests in property are blocked pursuant to Sec. 541.201(a) or any 
further Executive orders relating to the national emergency declared in 
E.O. 13288 of March 6, 2003, the U.S. person that is an attorney, law 
firm, or legal services organization provides to OFAC a copy of a letter 
of engagement or a letter of intent to engage specifying the services to 
be performed and signed by the individual to whom such services are to 
be provided or, where services are to be provided to an entity, by a 
legal representative of the entity. The copy of a letter of engagement 
or a letter of intent to engage, accompanied by correspondence 
referencing this paragraph (a), is to be mailed to: Licensing Division, 
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Avenue NW., Annex, Washington, DC 20220.
    (b) The funds received by U.S. persons as payment of professional 
fees and reimbursement of incurred expenses for the provision of legal 
services authorized pursuant to Sec. 541.507(a) must not originate from:
    (1) A source within the United States;
    (2) Any source, wherever located, within the possession or control 
of a U.S. person; or
    (3) Any individual or entity, other than the person on whose behalf 
the legal services authorized pursuant to Sec. 541.507(a) are to be 
provided, whose property and interests in property are blocked pursuant 
to any part of this chapter or any Executive order.

    Note to paragraph (b) of Sec. 541.508: This paragraph authorizes the 
blocked person on whose behalf the legal services authorized pursuant to 
Sec. 541.507(a) are to be provided to make payments for authorized legal 
services using funds originating outside the United States that were not 
previously blocked. Nothing in this paragraph authorizes payments for 
legal services using funds in which any other person whose property and 
interests in property are blocked pursuant to Sec. 541.201(a), any other 
part of this chapter, or any Executive order holds an interest.

    (c) Reports. (1) U.S. persons who receive payments in connection 
with legal services authorized pursuant to Sec. 541.507(a) must submit 
quarterly reports no later than 30 days following the end of the 
calendar quarter during which the payments were received providing 
information on the funds received. Such reports shall specify:
    (i) The individual or entity from whom the funds originated and the 
amount of funds received; and
    (ii) If applicable:
    (A) The names of any individuals or entities providing related 
services to the U.S. person receiving payment in

[[Page 217]]

connection with authorized legal services, such as private investigators 
or expert witnesses;
    (B) A general description of the services provided; and
    (C) The amount of funds paid in connection with such services.
    (2) In the event that no transactions occur or no funds are received 
during the reporting period, a statement is to be filed to that effect; 
and
    (3) The reports, which must reference this section, are to be mailed 
to: Licensing Division, Office of Foreign Assets Control, U.S. 
Department of the Treasury, 1500 Pennsylvania Avenue NW., Annex, 
Washington, DC 20220.

    Note 1 to Sec. 541.508: U.S. persons who receive payments in 
connection with legal services authorized pursuant to Sec. 541.507(a) 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. Additionally, U.S. persons do 
not need to obtain specific authorization to provide related services 
that are ordinarily incident to the provision of legal services 
authorized pursuant to Sec. 541.507(a).

[79 FR 39319, July 10, 2014]



Sec. 541.509  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services in the 
United States to persons whose property or interests in property are 
blocked pursuant to Sec. 541.201(a) or any further Executive orders 
relating to the national emergency declared in E.O. 13288 of March 6, 
2003, is authorized, provided that all receipt of payment for such 
services must be specifically licensed.

[79 FR 39320, July 10, 2014]



Sec. 541.510  Transactions related to Agricultural Development Bank
of Zimbabwe and Infrastructure Development Bank of Zimbabwe authorized.

    (a) Except as provided in paragraphs (b) and (c) of this section, 
all transactions involving Agricultural Development Bank of Zimbabwe and 
Infrastructure Development Bank of Zimbabwe are authorized.
    (b) This section does not authorize transactions involving any 
person whose property and interests in property are blocked pursuant to 
Sec. 541.201(a), other than Agricultural Development Bank of Zimbabwe 
and Infrastructure Development Bank of Zimbabwe.
    (c) This section does not authorize the unblocking of any property 
and interests in property that were blocked as of April 24, 2013, 
pursuant to 31 CFR 541.201(a), Executive Order 13288 of March 6, 2003, 
Executive Order 13391 of November 22, 2005, or Executive Order 13469 of 
July 25, 2008.



                            Subpart F_Reports



Sec. 541.601  Records and reports.

    For provisions relating to required records and reports, see part 
501, subpart C, of this chapter. Recordkeeping and reporting 
requirements imposed by part 501 of this chapter with respect to the 
prohibitions contained in this part are considered requirements arising 
pursuant to this part.



                           Subpart G_Penalties

    Source: 79 FR 39320, July 10, 2014, unless otherwise noted.



Sec. 541.701  Penalties.

    (a) Attention is directed to section 206 of the International 
Emergency Economic Powers Act (50 U.S.C. 1705) (IEEPA), which is 
applicable to violations of the provisions of any license, ruling, 
regulation, order, directive, or instruction issued by or pursuant to 
the direction or authorization of the Secretary of the Treasury pursuant 
to this part or otherwise under IEEPA.
    (1) A civil penalty not to exceed the amount set forth in section 
206 of IEEPA may be imposed on any person who violates, attempts to 
violate, conspires to violate, or causes a violation of any license, 
order, regulation, or prohibition issued under IEEPA.

    Note to paragraph (a)(1): As of January 15, 2017, the applicable 
maximum civil penalty per violation of IEEPA is the greater of $289,238 
or an amount that is twice the amount of the transaction that is the 
basis of the violation with respect to which the penalty is imposed.


[[Page 218]]


    (2) A person who willfully commits, willfully attempts to commit, or 
willfully conspires to commit, or aids or abets in the commission of a 
violation of any license, order, regulation, or prohibition may, upon 
conviction, be fined not more than $1,000,000, or if a natural person, 
be imprisoned for not more than 20 years, or both.
    (b) Adjustments to penalty amounts. (1) The civil penalties provided 
in IEEPA are subject to adjustment pursuant to the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (Pub.L. 101-410, as amended, 
28 U.S.C. 2461 note).
    (2) The criminal penalties provided in IEEPA are subject to 
adjustment pursuant to 18 U.S.C. 3571.
    (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 Government 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, or both.
    (d) Violations of this part may also be subject to other applicable 
laws.

[69 FR 45248, July 29, 2004, as amended at 81 FR 43074, July 1, 2016; 82 
FR 10437, Feb. 10, 2017]



Sec. 541.702  Pre-Penalty Notice; settlement.

    (a) When required. If OFAC 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, directive, 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 (IEEPA) and determines 
that a civil monetary penalty is warranted, OFAC will issue a Pre-
Penalty Notice informing the alleged violator of the agency's intent to 
impose a monetary penalty. A Pre-Penalty Notice shall be in writing. The 
Pre-Penalty Notice may be issued whether or not another agency has taken 
any action with respect to the matter. For a description of the contents 
of a Pre-Penalty Notice, see Appendix A to part 501 of this chapter.
    (b)(1) Right to respond. An alleged violator has the right to 
respond to a Pre-Penalty Notice by making a written presentation to 
OFAC. For a description of the information that should be included in 
such a response, see Appendix A to part 501 of this chapter.
    (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.
    (i) Computation of time for response. A response to a Pre-Penalty 
Notice must be postmarked or date-stamped by the U.S. Postal Service (or 
foreign postal service, if mailed abroad) or courier service provider 
(if transmitted to OFAC by courier) on or before the 30th day after the 
postmark date on the envelope in which the Pre-Penalty Notice was 
mailed. If the Pre-Penalty Notice was personally delivered by a non-U.S. 
Postal Service agent authorized by OFAC, a response must be postmarked 
or date-stamped on or before the 30th day after the date of delivery.
    (ii) Extensions of time for response. If a due date falls on a 
federal holiday or weekend, that due date is extended to include the 
following business day. Any other extensions of time will be granted, at 
the discretion of OFAC, only upon specific request to OFAC.
    (3) Form and method of response. A response to a Pre-Penalty Notice 
need not be in any particular form, but it must be typewritten and 
signed by the alleged violator or a representative thereof, must contain 
information sufficient to indicate that it is in response to the Pre-
Penalty Notice, and must include the OFAC identification number listed 
on the Pre-Penalty Notice. A copy of the written response may be sent by 
facsimile, but the original also must be sent to OFAC's Enforcement 
Division by mail or courier and must

[[Page 219]]

be postmarked or date-stamped in accordance with paragraph (b)(2) of 
this section.
    (c) Settlement. Settlement discussion may be initiated by OFAC, the 
alleged violator, or the alleged violator's authorized representative. 
For a description of practices with respect to settlement, see Appendix 
A to part 501 of this chapter.
    (d) Guidelines. Guidelines for the imposition or settlement of civil 
penalties by OFAC are contained in Appendix A to part 501 of this 
chapter.
    (e) Representation. A representative of the alleged violator may act 
on behalf of the alleged violator, but any oral communication with OFAC 
prior to a written submission regarding the specific allegations 
contained in the Pre-Penalty Notice must be preceded by a written letter 
of representation, unless the Pre-Penalty Notice was served upon the 
alleged violator in care of the representative.



Sec. 541.703  Penalty imposition.

    If, after considering any written response to the Pre-Penalty Notice 
and any relevant facts, OFAC determines that there was a violation by 
the alleged violator named in the Pre-Penalty Notice and that a civil 
monetary penalty is appropriate, OFAC may issue a Penalty Notice to the 
violator containing a determination of the violation and the imposition 
of the monetary penalty. For additional details concerning issuance of a 
Penalty Notice, see Appendix A to part 501 of this chapter. The issuance 
of the Penalty Notice shall constitute final agency action. The violator 
has the right to seek judicial review of that final agency action in 
federal district court.



Sec. 541.704  Administrative collection; referral to United States
Department of Justice.

    In the event that the violator does not pay the penalty imposed 
pursuant to this part or make payment arrangements acceptable to OFAC, 
the matter may be referred for administrative collection measures by the 
Department of the Treasury or to the United States Department of Justice 
for appropriate action to recover the penalty in a civil suit in a 
federal district court.



                          Subpart H_Procedures

    Source: 79 FR 39321, July 10, 2014, unless otherwise noted.



Sec. 541.801  Procedures.

    For license application procedures and procedures relating to 
amendments, modifications, or revocations of licenses; administrative 
decisions; rulemaking; and requests for documents pursuant to the 
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see 
part 501, subpart E, of this chapter.



Sec. 541.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13288 of March 6, 2003 (E.O. 13288), 
Executive Order 13391 of November 22, 2005, Executive Order 13469 of 
July 25, 2008, and any further Executive orders relating to the national 
emergency declared in E.O. 13288, may be taken by the Director of OFAC 
or by any other person to whom the Secretary of the Treasury has 
delegated authority so to act.



                    Subpart I_Paperwork Reduction Act



Sec. 541.901  Paperwork Reduction Act notice.

    For approval by the Office of Management and Budget (``OMB'') under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information 
collections relating to record keeping and reporting requirements, 
licensing procedures (including those pursuant to statements of 
licensing policy), and other procedures, see Sec. 501.901 of this 
chapter. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays a 
valid control number assigned by OMB.

[[Page 220]]



PART 542_SYRIAN SANCTIONS REGULATIONS--Table of Contents



      Subpart A_Relation of This Part to Other Laws and Regulations

Sec.
542.101  Relation of this part to other laws and regulations.

                         Subpart B_Prohibitions

542.201  Prohibited transactions involving blocked property.
542.202  Effect of transfers violating the provisions of this part.
542.203  Holding of funds in interest-bearing accounts; investment and 
          reinvestment.
542.204  Expenses of maintaining blocked physical property; liquidation 
          of blocked property.
542.205  Evasions; attempts; causing violations; conspiracies.
542.206  Prohibited new investment in Syria.
542.207  Prohibited exportation, reexportation, sale, or supply of 
          services to Syria.
542.208  Prohibited importation of petroleum or petroleum products of 
          Syrian origin.
542.209  Prohibited transactions or dealings in or related to petroleum 
          or petroleum products of Syrian origin.
542.210  Prohibited facilitation.
542.211  Exempt transactions.

                      Subpart C_General Definitions

542.300  Applicability of definitions.
542.301  Blocked account; blocked property.
542.302  Effective date.
542.303  Entity.
542.304  Financial, material, or technological support.
542.305  Government of Syria.
542.306  Information and communications technology.
542.307  Information or informational materials.
542.308  Interest.
542.309  Licenses; general and specific.
542.310  Loans or other extensions of credit.
542.311  New investment.
542.312  OFAC.
542.313  Person.
542.314  Petroleum or petroleum products of Syrian origin.
542.315  Property; property interest.
542.316  Syria; Syrian.
542.317  Transfer.
542.318  United States.
542.319  United States person; U.S. person.
542.320  U.S. depository institution.
542.321  U.S. financial institution.
542.322  U.S. registered broker or dealer in securities.
542.323  U.S. registered money transmitter.

                        Subpart D_Interpretations

542.401  Reference to amended sections.
542.402  Effect of amendment.
542.403  Termination and acquisition of an interest in blocked property.
542.404  Transactions ordinarily incident to a licensed transaction.
542.405  Exportation, reexportation, sale, or supply of services; 
          provision of services.
542.406  Offshore transactions involving blocked property.
542.407  Payments from blocked accounts to satisfy obligations 
          prohibited.
542.408  Charitable contributions.
542.409  Credit extended and cards issued by U.S. financial 
          institutions.
542.410  Setoffs prohibited.
542.411  Entities owned by a person whose property and interests in 
          property are blocked.
542.412  Transactions relating to Syrian petroleum or petroleum products 
          from third countries; transshipments.
542.413  Facilitation; change of policies and procedures; referral of 
          business opportunities offshore.

 Subpart E_Licenses, Authorizations, and Statements of Licensing Policy

542.501  General and specific licensing procedures.
542.502  Effect of license or authorization.
542.503  Exclusion from licenses.
542.504  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
542.505  Entries in certain accounts for normal service charges 
          authorized.
542.506  Investment and reinvestment of certain funds authorized.
542.507  Provision of certain legal services authorized.
542.508  Payments from funds originating outside the United States 
          authorized.
542.509  Syrian diplomatic missions in the United States.
542.510  Exports or reexports to Syria of items licensed or otherwise 
          authorized by the Department of Commerce authorized; exports 
          or reexports of certain services authorized.
542.511  Exportation of certain services incident to Internet-based 
          communications authorized.
542.512  Noncommercial, personal remittances authorized.
542.513  Official activities of certain international organizations 
          authorized.
542.514  Transactions related to U.S. persons residing in Syria 
          authorized.
542.515  Operation of accounts authorized.
542.516  Certain services in support of nongovernmental organizations' 
          activities authorized.
542.517  Third-country diplomatic and consular funds transfers 
          authorized.

[[Page 221]]

542.518  Payments for overflights of Syrian airspace or emergency 
          landings in Syria authorized.
542.519  Transactions related to telecommunications and mail authorized.
542.520  Certain transactions related to patents, trademarks, 
          copyrights, and other intellectual property authorized.
542.521  Activities and services related to certain nonimmigrant and 
          immigrant categories authorized.
542.522  Official business of the Federal Government authorized.
542.523  Certain services to the National Coalition of Syrian 
          Revolutionary and Opposition Forces authorized.
542.524  Bunkering and emergency repairs.
542.525  Exportation or reexportation of services to Syria related to 
          the exportation or reexportation of certain non-U.S. origin 
          goods authorized.
542.526  Exportation of services related to conferences in the United 
          States or third countries authorized.
542.527  Policy on activities related to the telecommunications sector 
          of Syria.
542.528  Policy on activities related to the agricultural sector of 
          Syria.
542.529  Policy on activities related to petroleum and petroleum 
          products of Syrian origin for the benefit of the National 
          Coalition of Syrian Revolutionary and Opposition Forces.
542.530  Transactions incident to importations from Syria authorized.
542.531  Authorization of emergency medical services.
542.532  Authorized transactions necessary and ordinarily incident to 
          publishing.

                            Subpart F_Reports

542.601  Records and reports.

                           Subpart G_Penalties

542.701  Penalties.
542.702  Pre-Penalty Notice; settlement.
542.703  Penalty imposition.
542.704  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H_Procedures

542.801  Procedures.
542.802  Delegation by the Secretary of the Treasury.

                    Subpart I_Paperwork Reduction Act

542.901  Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 18 U.S.C. 2332d; 22 
U.S.C. 287c; 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. 
1701 note); E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., p. 168; E.O. 
13399, 71 FR 25059, 3 CFR, 2006 Comp., p. 218; E.O. 13460, 73 FR 8991, 3 
CFR 2008 Comp., p. 181; E.O. 13572, 76 FR 24787, 3 CFR 2011 Comp., p. 
236; E.O. 13573, 76 FR 29143, 3 CFR 2011 Comp., p. 241; E.O. 13582, 76 
FR 52209, 3 CFR 2011 Comp., p. 264; E.O. 13606, 77 FR 24571, 3 CFR 2012 
Comp., p. 243.

    Source: 79 FR 25416, May 2, 2014, unless otherwise noted.



      Subpart A_Relation of This Part to Other Laws and Regulations



Sec. 542.101  Relation of this part to other laws and regulations.

    This part is separate from, and independent of, the other parts of 
this chapter, with the exception of part 501 of this chapter, the 
recordkeeping and reporting requirements and license application and 
other procedures of which apply to this part. 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. Differing 
foreign policy and national security circumstances may result in 
differing interpretations of similar language among the parts of this 
chapter. No license or authorization contained in or issued pursuant to 
those other parts authorizes any transaction prohibited by this part. No 
license or authorization contained in or issued pursuant to any other 
provision of law or regulation authorizes any transaction prohibited by 
this part. No license or authorization contained in or issued pursuant 
to this part relieves the involved parties from complying with any other 
applicable laws or regulations.



                         Subpart B_Prohibitions



Sec. 542.201  Prohibited transactions involving blocked property.

    (a)(1) 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 any United States person, including any 
foreign branch, of the Government of Syria and of the following persons 
are blocked and may not be transferred, paid, exported, withdrawn, or 
otherwise dealt in: Any person determined by the Secretary of

[[Page 222]]

the Treasury, in consultation with the Secretary of State:
    (i) To have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services in support 
of, the Government of Syria or any other person whose property and 
interests in property are blocked pursuant to paragraph (a)(1) of this 
section; or
    (ii) To be owned or controlled by, or to have acted or purported to 
act for or on behalf of, directly or indirectly, the Government of Syria 
or any other person whose property and interests in property are blocked 
pursuant to paragraph (a)(1) of this section.
    (2) 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 any United States person, including any 
foreign branch, of the following persons are blocked and may not be 
transferred, paid, exported, withdrawn, or otherwise dealt in:
    (i) The persons listed in the Annex to Executive Order 13572 of 
April 29, 2011, and the Annex to Executive Order 13573 of May 18, 2011; 
and
    (ii) Any person determined by the Secretary of the Treasury, in 
consultation with the Secretary of State:
    (A) To be or to have been directing or otherwise significantly 
contributing to the Government of Syria's provision of safe haven to or 
other support for any person whose property and interests in property 
are blocked under United States law for terrorism-related reasons, 
including, but not limited to, Hamas, Hizballah, Palestinian Islamic 
Jihad, the Popular Front for the Liberation of Palestine, the Popular 
Front for the Liberation of Palestine-General Command, and any persons 
designated pursuant to Executive Order 13224 of September 23, 2001;
    (B) To be or to have been directing or otherwise significantly 
contributing to the Government of Syria's military or security presence 
in Lebanon;
    (C) To be or to have been directing or otherwise significantly 
contributing to the Government of Syria's pursuit of the development and 
production of chemical, biological, or nuclear weapons and medium- and 
long-range surface-to-surface missiles;
    (D) To be or to have been responsible for or otherwise significantly 
contributing to actions taken or decisions made by the Government of 
Syria that have the purpose or effect of undermining efforts to 
stabilize Iraq or of allowing the use of Syrian territory or facilities 
to undermine efforts to stabilize Iraq;
    (E) To be or to have been involved in the planning, sponsoring, 
organizing, or perpetrating of:
    (1) The terrorist act in Beirut, Lebanon, that resulted in the 
assassination of former Lebanese Prime Minister Rafiq Hariri and the 
deaths of 22 others; or
    (2) Any other bombing, assassination, or assassination attempt in 
Lebanon since October 1, 2004, that is related to Hariri's assassination 
or that implicates the Government of Syria or its officers or agents;
    (F) To have obstructed or otherwise impeded the work of the 
Commission established pursuant to United Nations Security Council 
Resolution 1595 of April 7, 2005;
    (G) To be responsible for, to have engaged in, to have facilitated, 
or to have secured improper advantage as a result of, public corruption 
by senior officials within the Government of Syria;
    (H) To be responsible for or complicit in, or responsible for 
ordering, controlling, or otherwise directing, or to have participated 
in, the commission of human rights abuses in Syria, including those 
related to repression;
    (I) To be a senior official of an entity whose property and 
interests in property are blocked pursuant to paragraph (a)(2)(ii)(H) of 
this section or any other entity whose property and interests in 
property are blocked pursuant to E.O. 13572;
    (J) To be a senior official of the Government of Syria;
    (K) To be an agency or instrumentality of the Government of Syria, 
or owned or controlled, directly or indirectly, by the Government of 
Syria or by an official or officials of the Government of Syria;
    (L) To have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services in support 
of, the activities described in paragraph

[[Page 223]]

(a)(2)(ii)(E) or (H) of this section, or any person whose property and 
interests in property are blocked pursuant to paragraph (a)(2) of this 
section; or
    (M) To be owned or controlled by, or to have acted or purported to 
act for or on behalf of, directly or indirectly, any person whose 
property and interests in property are blocked pursuant to paragraph 
(a)(2) of this section.
    (3) 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 any United States person, including any 
foreign branch, of the following persons are blocked and may not be 
transferred, paid, exported, withdrawn, or otherwise dealt in:
    (i) The persons listed in the Annex to Executive Order 13606 of 
April 22, 2012; and
    (ii) Any person determined by the Secretary of the Treasury, in 
consultation with or at the recommendation of the Secretary of State:
    (A) To have operated, or to have directed the operation of, 
information and communications technology that facilitates computer or 
network disruption, monitoring, or tracking that could assist in or 
enable serious human rights abuses by or on behalf of the Government of 
Syria;
    (B) To have sold, leased, or otherwise provided, directly or 
indirectly, goods, services, or technology to Syria likely to be used to 
facilitate computer or network disruption, monitoring, or tracking that 
could assist in or enable serious human rights abuses by or on behalf of 
the Government of Syria;
    (C) To have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services in support 
of, the activities described in paragraph (a)(3)(ii)(A) or (B) of this 
section, or any person whose property and interests in property are 
blocked pursuant to paragraph (a)(3) of this section; or
    (D) To be owned or controlled by, or to have acted or purported to 
act for or on behalf of, directly or indirectly, any person whose 
property and interests in property are blocked pursuant to paragraph 
(a)(3) of this section.

    Note 1 to paragraph (a) of Sec. 542.201: The names of persons listed 
in or designated pursuant to Executive Order 13338 of May 11, 2004, 
Executive Order 13399 of April 25, 2006, Executive Order 13460 of 
February 13, 2008, Executive Order 13572 of April 29, 2011, Executive 
Order 13573 of May 18, 2011, Executive Order 13582 of August 17, 2011, 
or identified pursuant to E.O. 13582, whose property and interests in 
property are blocked pursuant to paragraph (a)(1) or (2) of 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 ``[SYRIA].'' The names of persons listed in 
or designated pursuant to Executive Order 13606 of April 22, 2012, whose 
property and interests in property therefore are blocked pursuant to 
paragraph (a)(3) of this section, are published in the Federal Register 
and incorporated into the SDN List with the identifier ``[HRIT-SY].'' 
The SDN List is accessible through the following page on OFAC's Web 
site: www.treasury.gov/sdn. Additional information pertaining to the SDN 
List can be found in appendix A to this chapter. See Sec. 542.411 
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. Executive Order 13582 blocks the property 
and interests in property of the Government of Syria, as defined in 
Sec. 542.305. The property and interests in property of persons falling 
within the definition of the term Government of Syria are blocked 
pursuant to paragraph (a) of this section regardless of whether the 
names of such persons are published in the Federal Register or 
incorporated into the SDN List.
    Note 2 to paragraph (a) of Sec. 542.201: 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 paragraph (a) of this section also are 
published in the Federal Register and incorporated into the SDN List 
with the identifier ``[BPI-SYRIA]'' or ``[BPI-HRIT-SY],'' as applicable.
    Note 3 to paragraph (a) of Sec. 542.201: Sections 501.806 and 
501.807 of this chapter 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 the Government of Syria or any other person whose 
property and interests in property are blocked pursuant to paragraph (a) 
of this section.

    (b) The prohibitions in paragraph (a) of this section include, but 
are not limited to, prohibitions on the following transactions:

[[Page 224]]

    (1) 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 paragraph (a) of this 
section; and
    (2) 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 paragraph (a) of this section.
    (c) Unless 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, the Government of Syria or any other 
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 
appear to have assigned, transferred, or otherwise disposed of the 
security.
    (d) The prohibitions in paragraph (a) of this section apply except 
to the extent transactions are authorized by regulations, orders, 
directives, rulings, instructions, licenses, or otherwise, and 
notwithstanding any contracts entered into or any license or permit 
granted prior to the effective date.



Sec. 542.202  Effect of transfers violating the provisions of this
part.

    (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 
Sec. 542.201(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 interest.
    (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 Sec. 542.201(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, a license or other authorization 
issued by OFAC 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 this part and any 
regulation, order, directive, ruling, instruction, or license issued 
pursuant to this part.
    (d) Transfers of property that otherwise would be null and void or 
unenforceable by virtue of the provisions of this section shall not be 
deemed to be null and void or unenforceable as to any person with whom 
such property is or was held or maintained (and as to such person only) 
in cases in which such person is able to establish to the satisfaction 
of OFAC each of the following:
    (1) Such transfer did not represent a willful violation of the 
provisions of this part by the person with whom such property is or was 
held or maintained (and as to such person only);
    (2) The person with whom such property is or was held or maintained 
did not have reasonable cause to know or suspect, in view of all the 
facts and circumstances known or available to such person, that such 
transfer required a license or authorization issued pursuant to this 
part and was not so licensed or authorized, or, if a license or 
authorization did purport to cover the transfer, that such license or 
authorization had been obtained by misrepresentation of a third party or 
withholding of material facts or was otherwise fraudulently obtained; 
and
    (3) The person with whom such property is or was held or maintained 
filed with OFAC a report setting forth in

[[Page 225]]

full the circumstances relating to such transfer promptly upon discovery 
that:
    (i) Such transfer was in violation of the provisions of this part or 
any regulation, ruling, instruction, license, or other directive or 
authorization issued pursuant to this part;
    (ii) Such transfer was not licensed or authorized by OFAC; or
    (iii) If a license did purport to cover the transfer, such license 
had been obtained by misrepresentation of a third party or withholding 
of material facts or was otherwise fraudulently obtained.

    Note to paragraph (d) of Sec. 542.202: The filing of a report in 
accordance with the provisions of paragraph (d)(3) of this section shall 
not be deemed evidence that the terms of paragraphs (d)(1) and (2) of 
this section have been satisfied.

    (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 and interests in property blocked 
pursuant to Sec. 542.201(a).



Sec. 542.203  Holding of funds in interest-bearing accounts;
investment and reinvestment.

    (a) Except as provided in paragraphs (e) or (f) of this section, or 
as otherwise directed by OFAC, any U.S. person holding funds, such as 
currency, bank deposits, or liquidated financial obligations, subject to 
Sec. 542.201(a) shall hold or place such funds in a blocked interest-
bearing account located in the United States.
    (b)(1) For purposes of this section, the term blocked interest-
bearing account means a blocked account:
    (i) In a federally-insured U.S. bank, thrift institution, or credit 
union, provided the funds are earning interest at rates that are 
commercially reasonable; or
    (ii) With a broker or dealer registered with the Securities and 
Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.), provided the funds are invested in a money market fund or 
in U.S. Treasury bills.
    (2) Funds held or placed in a blocked account pursuant to paragraph 
(a) of this section may not be invested in instruments the maturity of 
which exceeds 180 days.
    (c) For purposes of this section, a rate is commercially reasonable 
if it is the rate currently offered to other depositors on deposits or 
instruments of comparable size and maturity.
    (d) For purposes of this section, if interest is credited to a 
separate blocked account or subaccount, the name of the account party on 
each account must be the same.
    (e) Blocked funds held in instruments the maturity of which exceeds 
180 days at the time the funds become subject to Sec. 542.201(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 
(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 Sec. 542.201(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.
    (g) This section does not create an affirmative obligation for the 
holder of blocked tangible property, such as chattels or real estate, or 
of other blocked property, such as debt or equity securities, to sell or 
liquidate such property. However, OFAC may issue licenses permitting or 
directing such sales or liquidation in appropriate cases.
    (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 Sec. 542.201(a), nor may their holder cooperate 
in or facilitate the pledging or other attempted use as collateral of 
blocked funds or other assets.



Sec. 542.204  Expenses of maintaining blocked physical property; 
liquidation of blocked property.

    (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

[[Page 226]]

license or permit granted prior to the effective date, all expenses 
incident to the maintenance of physical property blocked pursuant to 
Sec. 542.201(a) 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 Sec. 542.201(a) 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.



Sec. 542.205  Evasions; attempts; causing violations; conspiracies.

    (a) Any transaction by a U.S. person or within the United States 
that evades or avoids, has the purpose of evading or avoiding, causes a 
violation of, or attempts to violate any of the prohibitions set forth 
in this part is prohibited.
    (b) Any conspiracy formed to violate any of the prohibitions set 
forth in this part is prohibited.



Sec. 542.206  Prohibited new investment in Syria.

    Except as otherwise authorized, new investment, as defined in 
Sec. 542.311, in Syria by a United States person, wherever located, is 
prohibited.



Sec. 542.207  Prohibited exportation, reexportation, sale, or supply
of services to Syria.

    Except as otherwise authorized, the exportation, reexportation, 
sale, or supply, directly or indirectly, from the United States, or by a 
United States person, wherever located, of any services to Syria is 
prohibited.



Sec. 542.208  Prohibited importation of petroleum or petroleum products
of Syrian origin.

    Except as otherwise authorized, the importation into the United 
States of petroleum or petroleum products of Syrian origin is 
prohibited.



Sec. 542.209  Prohibited transactions or dealings in or related to 
petroleum or petroleum products of Syrian origin.

    Except as otherwise authorized, any transaction or dealing by a 
United States person, wherever located, including purchasing, selling, 
transporting, swapping, brokering, approving, financing, facilitating, 
or guaranteeing, in or related to petroleum or petroleum products of 
Syrian origin is prohibited.



Sec. 542.210  Prohibited facilitation.

    Except as otherwise authorized, United States persons, wherever 
located, are prohibited from approving, financing, facilitating, or 
guaranteeing a transaction by a foreign person where the transaction by 
that foreign person would be prohibited by Secs. 542.206, 542.207, 
542.208, or 542.209 of this part if performed by a United States person 
or within the United States.



Sec. 542.211  Exempt transactions.

    (a) Personal communications. Except as set forth in paragraph (e) of 
this section, the prohibitions contained in this part do not apply to 
any postal, telegraphic, telephonic, or other personal communication 
that does not involve the transfer of anything of value.
    (b) Information or informational materials. (1) Except as set forth 
in paragraph (e) of this section, 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 Sec. 542.307, whether commercial or otherwise, 
regardless of format or medium of transmission.
    (2) This section does not exempt from regulation or authorize 
transactions related to information or informational materials not fully 
created and in existence at the date of the transactions, or to the 
substantive or artistic alteration or enhancement of informational 
materials, or to the provision of marketing and business consulting 
services. Such prohibited transactions include, but are not limited to, 
payment of advances for information or informational materials not yet 
created and completed (with the exception of prepaid subscriptions for 
widely circulated magazines and other periodical publications); 
provision of services to market, produce or co-produce, create, or 
assist in the creation of information

[[Page 227]]

or informational materials; and payment of royalties with respect to 
income received for enhancements or alterations made by U.S. persons to 
such information or informational materials.
    (3) This section does not exempt or authorize 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 Syria or to the Government 
of Syria or any other person whose property and interests in property 
are blocked pursuant to Sec. 542.201(a) are prohibited.

    Note 1 to paragraph (b)(3) of Sec. 542.211: See Sec. 542.510 for a 
general license authorizing the exportation or reexportation of certain 
items and services to Syria.
    Note 2 to paragraph (b)(3) of Sec. 542.211: See Sec. 542.511 for a 
general license authorizing the exportation to persons in Syria of 
certain services incident to the exchange of personal communications 
over the Internet.

    (c) Travel. Except as set forth in paragraph (e) of this section, 
the prohibitions contained in this part do not apply to transactions 
ordinarily incident to travel to or from any country, including 
importation or exportation of accompanied baggage for personal use, 
maintenance within any country including payment of living expenses and 
acquisition of goods or services for personal use, and arrangement or 
facilitation of such travel including nonscheduled air, sea, or land 
voyages.
    (d) Official business. The prohibitions contained in this part, 
other than those in Sec. 542.201(a)(2), do not apply to transactions for 
the conduct of the official business of the Federal Government by 
employees, grantees, or contractors thereof.

    Note to paragraph (d) of Sec. 542.211: See Sec. 542.522 for a 
general license authorizing transactions for the conduct of the official 
business of the Federal Government prohibited by Sec. 542.201(a)(2).

    (e) The exemptions described in this section do not apply to any 
transactions involving property or interests in property of certain 
persons whose property and interests in property are blocked pursuant to 
E.O. 13399.

    Note to paragraph (e) of Sec. 542.211: As of the date of publication 
in the Federal Register, no persons have been designated by OFAC 
pursuant to E.O. 13399.



                      Subpart C_General Definitions



Sec. 542.300  Applicability of definitions.

    The definitions in this subpart apply throughout the entire part.



Sec. 542.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibitions in Sec. 542.201 held in 
the name of the Government of Syria or any other person whose property 
and interests in property are blocked pursuant to Sec. 542.201(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 OFAC 
expressly authorizing such action.

    Note to Sec. 542.301: See Sec. 542.411 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 Sec. 542.201(a).



Sec. 542.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this part as 
follows:
    (a) With respect to prohibited transfers or other dealings in 
blocked property and interests in property of the Government of Syria, 
as defined in Sec. 542.305, 12:01 a.m. eastern daylight time, August 18, 
2011;
    (b) With respect to a person whose property and interests in 
property are blocked pursuant to Sec. 542.201(a)(2)(i), 1:00 p.m. 
eastern daylight time, April 29, 2011, for persons listed in the Annex 
to Executive Order 13572 of April 29,

[[Page 228]]

2011, and 1:00 p.m. eastern daylight time, May 18, 2011, for persons 
listed in the Annex to Executive Order 13573 of May 18, 2011;
    (c) With respect to a person whose property and interests in 
property are blocked pursuant to Sec. 542.201(a)(3)(i), 12:01 a.m. 
eastern daylight time, April 23, 2012;
    (d) With respect to a person whose property and interests in 
property are otherwise blocked pursuant to Sec. 542.201(a), the earlier 
of the date of actual or constructive notice that such person's property 
and interests in property are blocked; and
    (e) With respect to the prohibitions set forth in Secs. 542.206 
through 542.210, 12:01 a.m. eastern daylight time, August 18, 2011.



Sec. 542.303  Entity.

    The term entity means a partnership, association, trust, joint 
venture, corporation, group, subgroup, or other organization.



Sec. 542.304  Financial, material, or technological support.

    The term financial, material, or technological support, as used in 
Sec. 542.201(a)(1)(i), (a)(2)(ii)(L), and (a)(3)(ii)(C), 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.



Sec. 542.305  Government of Syria.

    The term Government of Syria includes:
    (a) The state and the Government of the Syrian Arab Republic, as 
well as any political subdivision, agency, or instrumentality thereof, 
including the Central Bank of Syria;
    (b) Any entity owned or controlled, directly or indirectly, by the 
foregoing, including any corporation, partnership, association, or other 
entity in which the Government of Syria owns a 50 percent or greater 
interest or a controlling interest, and any entity which is otherwise 
controlled by that government;
    (c) Any person that is, or has been, acting or purporting to act, 
directly or indirectly, for or on behalf of any of the foregoing; and
    (d) Any other person determined by OFAC to be included within 
paragraphs (a) through (c) of this section.

    Note 1 to Sec. 542.305: The names of persons that OFAC has 
determined fall within this definition are published in the Federal 
Register and incorporated into OFAC's Specially Designated Nationals and 
Blocked Persons List (``SDN List'') with the identifier ``[SYRIA].'' The 
SDN List is accessible through the following page on OFAC's Web site: 
www.treasury.gov/sdn. However, the property and interests in property of 
persons falling within the definition of the term Government of Syria 
are blocked pursuant to Sec. 542.201(a) regardless of whether the names 
of such persons are published in the Federal Register or incorporated 
into the SDN List.
    Note 2 to Sec. 542.305: Section 501.807 of this chapter describes 
the procedures to be followed by persons seeking administrative 
reconsideration of OFAC's determination that they fall within the 
definition of the term Government of Syria.



Sec. 542.306  Information and communications technology.

    The term information and communications technology means any 
hardware, software, or other product or service primarily intended to 
fulfill or enable the function of information processing and 
communication by electronic means, including transmission and display, 
including via the Internet.



Sec. 542.307  Information or informational materials.

    (a) The term information or informational materials includes, but is 
not limited to, publications, films, posters, phonograph records, 
photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, 
artworks, and news wire feeds.


[[Page 229]]


    Note to paragraph (a) of Sec. 542.307: To be considered information 
or informational materials, artworks must be classified under chapter 
subheading 9701, 9702, or 9703 of the Harmonized Tariff Schedule of the 
United States.

    (b) The term information or informational materials, with respect to 
exports, does not include items:
    (1) That were, as of April 30, 1994, or that thereafter become, 
controlled for export pursuant to section 5 of the Export Administration 
Act of 1979, 50 U.S.C. App. 2401-2420 (1979) (the ``EAA''), or section 6 
of the EAA to the extent that such controls promote the nonproliferation 
or antiterrorism policies of the United States; or
    (2) With respect to which acts are prohibited by 18 U.S.C. chapter 
37.



Sec. 542.308  Interest.

    Except as otherwise provided in this part, the term interest, when 
used with respect to property (e.g., ``an interest in property''), means 
an interest of any nature whatsoever, direct or indirect.



Sec. 542.309  Licenses; general and specific.

    (a) Except as otherwise provided in this part, the term license 
means any license or authorization contained in or issued pursuant to 
this part.
    (b) The term general license means any license or authorization the 
terms of which are set forth in subpart E of this part or made available 
on OFAC's Web site: www.treasury.gov/ofac.
    (c) The term specific license means any license or authorization 
issued pursuant to this part, but not set forth in subpart E of this 
part or made available on OFAC's Web site: www.treasury.gov/ofac.

    Note to Sec. 542.309: See Sec. 501.801 of this chapter on licensing 
procedures.



Sec. 542.310  Loans or other extensions of credit.

    The term loans or other extensions of credit means any transfer or 
extension of funds or credit on the basis of an obligation to repay, or 
any assumption or guarantee of the obligation of another to repay an 
extension of funds or credit, including but not limited to: Overdrafts; 
currency swaps; purchases of debt securities issued by the Government of 
Syria; purchases of a loan made by another person; sales of financial 
assets subject to an agreement to repurchase; renewals or refinancings 
whereby funds or credits are transferred to or extended to a prohibited 
borrower or prohibited recipient; the issuance of standby letters of 
credit; and drawdowns on existing lines of credit.



Sec. 542.311  New investment.

    The term new investment means a transaction after 12:01 a.m. eastern 
daylight time, August 18, 2011, that constitutes:
    (a) A commitment or contribution of funds or other assets; or
    (b) A loan or other extension of credit as defined in Sec. 542.310.



Sec. 542.312  OFAC.

    The term OFAC means the Department of the Treasury's Office of 
Foreign Assets Control.



Sec. 542.313  Person.

    The term person means an individual or entity.



Sec. 542.314  Petroleum or petroleum products of Syrian origin.

    The term petroleum or petroleum products of Syrian origin means 
petroleum or petroleum products of Syrian origin pursuant to Country of 
Origin definitions of U.S. Customs and Border Protection.



Sec. 542.315  Property; property interest.

    The terms property and property interest include, but are not 
limited to, money, checks, drafts, bullion, bank deposits, savings 
accounts, debts, indebtedness, obligations, notes, guarantees, 
debentures, stocks, bonds, coupons, any other financial instruments, 
bankers acceptances, mortgages, pledges, liens or other rights in the 
nature of security, warehouse receipts, bills of lading, trust receipts, 
bills of sale, any other evidences of title, ownership or indebtedness, 
letters of credit and any documents relating to any rights or 
obligations thereunder, powers of attorney, goods, wares, merchandise, 
chattels, stocks on hand, ships, goods on ships, real estate mortgages,

[[Page 230]]

deeds of trust, vendors' sales agreements, land contracts, leaseholds, 
ground rents, real estate and any other interest therein, options, 
negotiable instruments, trade acceptances, royalties, book accounts, 
accounts payable, judgments, patents, trademarks or copyrights, 
insurance policies, safe deposit boxes and their contents, annuities, 
pooling agreements, services of any nature whatsoever, contracts of any 
nature whatsoever, and any other property, real, personal, or mixed, 
tangible or intangible, or interest or interests therein, present, 
future, or contingent.



Sec. 542.316  Syria; Syrian.

    The term Syria means the territory of Syria and any other territory 
or marine area, including the exclusive economic zone and continental 
shelf, over which the Government of Syria claims sovereignty, sovereign 
rights, or jurisdiction, provided that the Government of Syria exercises 
partial or total de facto control over the area or derives a benefit 
from economic activity in the area pursuant to an international 
agreement. The term Syrian means pertaining to Syria, as defined in this 
section.



Sec. 542.317  Transfer.

    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. Without limitation on the foregoing, it 
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 interest 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.



Sec. 542.318  United States.

    The term United States means the United States, its territories and 
possessions, and all areas under the jurisdiction or authority thereof.



Sec. 542.319  United States person; U.S. person.

    The term United States person or U.S. person means any United States 
citizen, permanent resident alien, entity organized under the laws of 
the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States.



Sec. 542.320  U.S. depository institution.

    The term U.S. depository institution means any entity (including its 
foreign branches) organized under the laws of the United States or any 
jurisdiction within the United States, or any agency, office, or branch 
located in the United States of a foreign entity, that is engaged 
primarily in the business of banking (for example, banks, savings banks, 
savings associations, credit unions, trust companies, and United States 
bank holding companies) and is subject to regulation by federal or state 
banking authorities.



Sec. 542.321  U.S. financial institution.

    The term U.S. financial institution means any U.S. entity (including 
its foreign branches) that is engaged in the business of accepting 
deposits, making, granting, transferring, holding, or brokering a loan 
or other extension of credit, or purchasing or selling foreign exchange, 
securities, commodity futures or options, or procuring purchasers and 
sellers thereof, as principal or agent. It includes but is not limited 
to depository institutions, banks, savings banks, trust companies,

[[Page 231]]

securities brokers and dealers, commodity futures and options brokers 
and dealers, forward contract and foreign exchange merchants, securities 
and commodities exchanges, clearing corporations, investment companies, 
employee benefit plans, and U.S. holding companies, U.S. affiliates, or 
U.S. subsidiaries of any of the foregoing. This term includes those 
branches, offices, and agencies of foreign financial institutions that 
are located in the United States, but not such institutions' foreign 
branches, offices, or agencies.



Sec. 542.322  U.S. registered broker or dealer in securities.

    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:
    (a) Is a ``broker'' or ``dealer'' in securities within the meanings 
set forth in the Securities Exchange Act of 1934;
    (b) Holds or clears customer accounts; and
    (c) Is registered with the Securities and Exchange Commission under 
the Securities Exchange Act of 1934.



Sec. 542.323  U.S. registered money transmitter.

    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 1010.100(ff)(5), and that is registered pursuant to 31 
CFR 1022.380.



                        Subpart D_Interpretations



Sec. 542.401  Reference to amended sections.

    Except as otherwise specified, reference to any provision in or 
appendix to this part or chapter or to any regulation, ruling, order, 
instruction, directive, or license issued pursuant to this part refers 
to the same as currently amended.



Sec. 542.402  Effect of amendment.

    Unless otherwise specifically provided, any amendment, modification, 
or revocation of any provision in or appendix to this part or chapter or 
of any order, regulation, ruling, instruction, or license issued by OFAC 
does not affect any act done or omitted, or any civil or criminal 
proceeding commenced or pending, prior to such amendment, modification, 
or revocation. All penalties, forfeitures, and liabilities under any 
such order, regulation, ruling, instruction, or license continue and may 
be enforced as if such amendment, modification, or revocation had not 
been made.



Sec. 542.403  Termination and acquisition of an interest in blocked 
property.

    (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 the Government of Syria or any other person whose 
property and interests in property are blocked pursuant to 
Sec. 542.201(a), such property shall no longer be deemed to be property 
blocked pursuant to Sec. 542.201(a), unless there exists in the property 
another interest that is blocked pursuant to Sec. 542.201(a), 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 the 
Government of Syria or any other person whose property and interests in 
property are blocked pursuant to Sec. 542.201(a), such property shall be 
deemed to be property in which such a person has an interest and 
therefore blocked.



Sec. 542.404  Transactions ordinarily incident to a licensed 
transaction.

    (a) Any transaction ordinarily incident to a licensed transaction 
and necessary to give effect thereto is also authorized, except:
    (1) An ordinarily incident transaction, not explicitly authorized 
within

[[Page 232]]

the terms of the license, by or with the Government of Syria or any 
other person whose property and interests in property are blocked 
pursuant to Sec. 542.201(a); or
    (2) An ordinarily incident transaction, not explicitly authorized 
within the terms of the license, involving a debit to a blocked account 
or a transfer of blocked property.
    (b) Example. A license authorizing a person to complete a securities 
sale involving Company A, whose property and interests in property are 
blocked pursuant to Sec. 542.201(a), also authorizes other persons to 
engage in activities that are ordinarily incident and necessary to 
complete the sale, including transactions by the buyer, broker, transfer 
agents, and banks, provided that such other persons are not themselves 
persons whose property and interests in property are blocked pursuant to 
Sec. 542.201(a).



Sec. 542.405  Exportation, reexportation, sale, or supply of services;
provision of services.

    (a) The prohibition on the exportation, reexportation, sale, or 
supply of services contained in Sec. 542.207 applies to services 
performed on behalf of a person in Syria or the Government of Syria or 
where the benefit of such services is otherwise received in Syria, if 
such services are performed:
    (1) In the United States, or
    (2) Outside the United States by a United States person, including 
by a foreign branch of an entity located in the United States.
    (b) The benefit of services performed anywhere in the world on 
behalf of the Government of Syria is presumed to be received in Syria.
    (c) The prohibitions contained in Sec. 542.201 apply to services 
performed in the United States or by U.S. persons, wherever located, 
including by a foreign branch of an entity located in the United States:
    (1) On behalf of or for the benefit of the Government of Syria or 
any other person whose property and interests in property are blocked 
pursuant to Sec. 542.201(a);
    (2) With respect to property interests of the Government of Syria or 
any other person whose property and interests in property are blocked 
pursuant to Sec. 542.201(a).
    (d) Examples. (1) 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 any person in Syria or to the Government of Syria or any other person 
whose property and interests in property are blocked pursuant to 
Sec. 542.201(a).
    (2) A U.S. person is engaged in a prohibited exportation of services 
to Syria when it extends credit to a third-country firm specifically to 
enable that firm to manufacture goods for sale to Syria or the 
Government of Syria.

    Note to Sec. 542.405: See Secs. 542.507 and 542.531 on licensing 
policy with regard to the provision of certain legal and medical 
services.



Sec. 542.406  Offshore transactions involving blocked property.

    The prohibitions in Sec. 542.201 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 the Government of Syria or any other person whose property and 
interests in property are blocked pursuant to Sec. 542.201(a).



Sec. 542.407  Payments from blocked accounts to satisfy obligations
prohibited.

    Pursuant to Sec. 542.201, 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.

    Note to Sec. 542.407: See also Sec. 542.502(e), which provides that 
no license or other authorization contained in or issued pursuant to 
this part authorizes transfers of or payments from blocked property or 
debits to blocked accounts unless the license or other authorization 
explicitly authorizes the transfer of or payment from blocked property 
or the debit to a blocked account.



Sec. 542.408  Charitable contributions.

    Unless specifically authorized by OFAC 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,

[[Page 233]]

may be made by, to, or for the benefit of, or received from, the 
Government of Syria or any other person whose property and interests in 
property are blocked pursuant to Sec. 542.201(a). For the purposes of 
this part, a contribution is made by, to, or for the benefit of, or 
received from, the Government of Syria or any other person whose 
property and interests in property are blocked pursuant to 
Sec. 542.201(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 by, to, or for the benefit of such a person, or the 
receipt of contributions from such a person.



Sec. 542.409  Credit extended and cards issued by U.S. financial 
institutions.

    The prohibition in Sec. 542.201 on dealing in property subject to 
that section and the prohibition in Sec. 542.207 on exporting services 
to Syria prohibit 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 the Government of Syria or any other person whose 
property and interests in property are blocked pursuant to 
Sec. 542.201(a).



Sec. 542.410  Setoffs prohibited.

    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 Sec. 542.201 if effected after the effective date.



Sec. 542.411  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. 542.201(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 Sec. 542.201(a), regardless of whether the entity itself is 
listed in the Annex to Executive Order 13572, the Annex to Executive 
Order 13573, or the Annex to Executive Order 13606, or designated 
pursuant to Sec. 542.201(a).

    Note to Sec. 542.411: This section, which deals with the 
consequences of ownership of entities, in no way limits the definition 
of the Government of Syria in Sec. 542.305, which includes within its 
definition other persons whose property and interests in property are 
blocked but who are not on the SDN list.



Sec. 542.412  Transactions relating to Syrian petroleum or petroleum 
products from third countries; transshipments.

    (a) Transactions relating to goods containing petroleum or petroleum 
products of Syrian origin are not prohibited by Sec. 542.208 or 
Sec. 542.209 if the petroleum or petroleum products have been 
incorporated into manufactured products or substantially transformed in 
a third country by a person other than a United States person.
    (b) Transactions relating to petroleum or petroleum products of 
Syrian origin that have not been incorporated into manufactured products 
or substantially transformed in a third country, including those that 
have been transshipped through a third country, are prohibited.



Sec. 542.413  Facilitation; change of policies and procedures;
referral of business opportunities offshore.

    With respect to Sec. 542.210, a prohibited facilitation or approval 
of a transaction by a foreign person occurs, among other instances, when 
a United States person:
    (a) Alters its operating policies or procedures, or those of a 
foreign affiliate, to permit a foreign affiliate to accept or perform a 
specific contract, engagement or transaction involving Syria or the 
Government of Syria without the approval of the United States person, 
where such transaction previously required approval by the United States 
person and such transaction by the foreign affiliate would be prohibited 
by this part if performed directly by a United States person or from the 
United States;

[[Page 234]]

    (b) Refers to a foreign person purchase orders, requests for bids, 
or similar business opportunities involving Syria or the Government of 
Syria to which the United States person could not directly respond as a 
result of the prohibitions contained in this part; or
    (c) Changes the operating policies and procedures of a particular 
affiliate with the specific purpose of facilitating transactions that 
would be prohibited by this part if performed by a United States person 
or from the United States.



 Subpart E_Licenses, Authorizations, and Statements of Licensing Policy



Sec. 542.501  General and specific licensing procedures.

    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 Syria sanctions page on OFAC's Web site 
www.treasury.gov/ofac.



Sec. 542.502  Effect of license or authorization.

    (a) No license or other authorization contained in this part, or 
otherwise issued by OFAC, authorizes or validates any transaction 
effected prior to the issuance of such license or other authorization, 
unless specifically provided in such license or authorization.
    (b) No regulation, ruling, instruction, or license authorizes any 
transaction prohibited under this part unless the regulation, ruling, 
instruction, or license is issued by OFAC and specifically refers to 
this part. No regulation, ruling, instruction, or license referring to 
this part shall be deemed to authorize any transaction prohibited by any 
other part of this chapter unless the regulation, ruling, instruction, 
or license specifically refers to such part.
    (c) Any regulation, ruling, instruction, or license authorizing any 
transaction otherwise prohibited under this part has the effect of 
removing a prohibition contained in this part from the transaction, but 
only to the extent specifically stated by its terms. Unless the 
regulation, ruling, instruction, or license otherwise specifies, such an 
authorization does not create any right, duty, obligation, claim, or 
interest in, or with respect to, any property which would not otherwise 
exist under ordinary principles of law.
    (d) Nothing contained in this part shall be construed to supersede 
the requirements established under any other provision of law or to 
relieve a person from any requirement to obtain a license or other 
authorization from another department or agency of the U.S. Government 
in compliance with applicable laws and regulations subject to the 
jurisdiction of that department or agency. For example, exports of 
goods, services, or technical data which are not prohibited by this part 
or which do not require a license by OFAC, nevertheless may require 
authorization by the U.S. Department of Commerce, the U.S. Department of 
State, or other agencies of the U.S. Government. See also 
Sec. 542.701(f).
    (e) No license or other authorization contained in or issued 
pursuant to this part authorizes transfers of or payments from blocked 
property or debits to blocked accounts unless the license or other 
authorization explicitly authorizes the transfer of or payment from 
blocked property or the debit to a blocked account.
    (f) Any payment relating to a transaction authorized in or pursuant 
to this part that is routed through the U.S. financial system should 
reference the relevant OFAC general or specific license authorizing the 
payment to avoid the blocking or rejection of the transfer.



Sec. 542.503  Exclusion from licenses.

    OFAC reserves the right to exclude any person, property, 
transaction, or class thereof from the operation of any license or from 
the privileges conferred by any license. OFAC also reserves the right to 
restrict the applicability of any license to particular persons, 
property, transactions, or classes thereof. Such actions are binding 
upon actual or constructive notice of the exclusions or restrictions.

[[Page 235]]



Sec. 542.504  Payments and transfers to blocked accounts in U.S.
financial institutions.

    Any payment of funds or transfer of credit in which the Government 
of Syria or any other person whose property and interests in property 
are blocked pursuant to Sec. 542.201(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 Sec. 542.504: See Sec. 501.603 of this chapter for mandatory 
reporting requirements regarding financial transfers. See also 
Sec. 542.203 concerning the obligation to hold blocked funds in 
interest-bearing accounts.



Sec. 542.505  Entries in certain accounts for normal service charges
authorized.

    (a) A U.S. financial institution is authorized to debit any blocked 
account held at that financial institution in payment or reimbursement 
for normal service charges owed it by the owner of that blocked account.
    (b) As used in this section, the term normal service charges shall 
include charges in payment or reimbursement for interest due; cable, 
telegraph, Internet, or telephone charges; postage costs; custody fees; 
small adjustment charges to correct bookkeeping errors; and, but not by 
way of limitation, minimum balance charges, notary and protest fees, and 
charges for reference books, photocopies, credit reports, transcripts of 
statements, registered mail, insurance, stationery and supplies, and 
other similar items.

    Note to Sec. 542.505: See Sec. 542.515 which authorizes, subject to 
certain restrictions, the operation of an account in a U.S. financial 
institution for an individual in Syria other than an individual whose 
property and interests in property are blocked pursuant to 
Sec. 542.201(a).



Sec. 542.506  Investment and reinvestment of certain funds authorized.

    Subject to the requirements of Sec. 542.203, U.S. financial 
institutions are authorized to invest and reinvest assets blocked 
pursuant to Sec. 542.201(a), subject to the following conditions:
    (a) The assets representing such investments and reinvestments are 
credited to a blocked account or subaccount that is held in the same 
name at the same U.S. financial institution, or within the possession or 
control of a U.S. person, but funds shall not be transferred outside the 
United States for this purpose;
    (b) The proceeds of such investments and reinvestments shall not be 
credited to a blocked account or subaccount under any name or 
designation that differs from the name or designation of the specific 
blocked account or subaccount in which such funds or securities were 
held; and
    (c) No immediate financial or economic benefit accrues (e.g., 
through pledging or other use) to the Government of Syria or any other 
person whose property and interests in property are blocked pursuant to 
Sec. 542.201(a).



Sec. 542.507  Provision of certain legal services authorized.

    (a) The provision of the following legal services to or on behalf of 
the Government of Syria or any other person whose property and interests 
in property are blocked pursuant to Sec. 542.201(a), or to or on behalf 
of a person in Syria, or in circumstances in which the benefit is 
otherwise received in Syria is authorized, provided that receipt of 
payment of professional fees and reimbursement of incurred expenses are 
authorized by or pursuant to paragraph (d) of this section or otherwise 
authorized pursuant to this part:
    (1) Provision of legal advice and counseling on the requirements of 
and compliance with the laws of the United States or any jurisdiction 
within the United States, provided that such advice and counseling are 
not provided to facilitate transactions in violation of this part;
    (2) Representation of persons named as defendants in or otherwise 
made

[[Page 236]]

parties to legal, arbitration, or administrative proceedings before any 
United States federal, state, or local court or agency;
    (3) Initiation and conduct of legal, arbitration, or administrative 
proceedings before any United States federal, state, or local court or 
agency;
    (4) Representation of persons before any U.S. federal, state, or 
local court or agency with respect to the imposition, administration, or 
enforcement of U.S. sanctions against such persons or Syria; and
    (5) Provision of legal services in any other context in which 
prevailing U.S. law requires access to legal counsel at public expense.
    (b) The provision of any other legal services to the Government of 
Syria or any other person whose property and interests in property are 
blocked pursuant to Sec. 542.201(a), or to or on behalf of a person in 
Syria, or in circumstances in which the benefit is otherwise received in 
Syria, 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 Sec. 542.201(a) is prohibited unless licensed pursuant to 
this part.
    (d) Receipts of payment. (1) Legal services to or on behalf of 
blocked persons. All receipts of payment of professional fees and 
reimbursement of incurred expenses for the provision of legal services 
authorized pursuant to paragraph (a) of this section to or on behalf of 
the Government of Syria or any other person whose property and interests 
in property are blocked pursuant to Sec. 542.201(a) must be specifically 
licensed or otherwise authorized pursuant to Sec. 542.508, which 
authorizes certain payments from funds originating outside the United 
States.
    (2) Legal services to or on behalf of all others. All receipts of 
payment of professional fees and reimbursement of incurred expenses for 
the provision of legal services authorized pursuant to paragraph (a) of 
this section to or on behalf of a person in Syria, or in circumstances 
in which the benefit is otherwise received in Syria, other than those 
described in paragraph (d)(1) of this section, are authorized, except 
that nothing in this section authorizes the debiting of any blocked 
account or the transfer of any blocked property.

    Note to Sec. 542.507: 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 a limited amount of 
blocked funds for the payment of legal fees 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 Web 
site at: www.treasury.gov/ofac.



Sec. 542.508  Payments from funds originating outside the 
United States authorized.

    Receipts of payment of professional fees and reimbursement of 
incurred expenses for the provision of legal services authorized 
pursuant to Sec. 542.507(a) to or on behalf of the Government of Syria 
or any other person whose property and interests in property are blocked 
pursuant to Sec. 542.201(a) are authorized from funds originating 
outside the United States, provided that:
    (a) Prior to receiving payment for legal services authorized 
pursuant to Sec. 542.507(a) rendered to the Government of Syria or any 
other person whose property and interests in property are blocked 
pursuant to Sec. 542.201(a), the U.S. person that is an attorney, law 
firm, or legal services organization provides to OFAC a copy of a letter 
of engagement or a letter of intent to engage specifying the services to 
be performed and signed by the individual to whom such services are to 
be provided or, where services are to be provided to an entity, by a 
legal representative of the entity. The copy of a letter of engagement 
or a letter of intent to engage, accompanied by correspondence 
referencing this paragraph (a), is to be mailed to: Licensing Division, 
Office of

[[Page 237]]

Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Avenue NW., Annex, Washington, DC 20220;
    (b) The funds received by U.S. persons as payment of professional 
fees and reimbursement of incurred expenses for the provision of legal 
services authorized pursuant to Sec. 542.507(a) must not originate from:
    (1) A source within the United States;
    (2) Any source, wherever located, within the possession or control 
of a U.S. person; or
    (3) Any individual or entity, other than the person on whose behalf 
the legal services authorized pursuant to Sec. 542.507(a) are to be 
provided, whose property and interests in property are blocked pursuant 
to any part of this chapter or any Executive order.

    Note to paragraph (b) of Sec. 542.508: This paragraph authorizes the 
blocked person on whose behalf the legal services authorized pursuant to 
Sec. 542.507(a) are to be provided to make payments for authorized legal 
services using funds originating outside the United States that were not 
previously blocked. Nothing in this paragraph authorizes payments for 
legal services using funds in which any other person whose property and 
interests in property are blocked pursuant to Sec. 542.201(a), any other 
part of this chapter, or any Executive order holds an interest.

    (c) Reports. (1) U.S. persons who receive payments in connection 
with legal services authorized pursuant to Sec. 542.507(a) must submit 
quarterly reports no later than 30 days following the end of the 
calendar quarter during which the payments were received providing 
information on the funds received. Such reports shall specify:
    (i) The individual or entity from whom the funds originated and the 
amount of funds received; and
    (ii) If applicable:
    (A) The names of any individuals or entities providing related 
services to the U.S. person receiving payment in connection with 
authorized legal services, such as private investigators or expert 
witnesses;
    (B) A general description of the services provided; and
    (C) The amount of funds paid in connection with such services.
    (2) In the event that no transactions occur or no funds are received 
during the reporting period, a statement is to be filed to that effect; 
and
    (3) The reports, which must reference this section, are to be mailed 
to: Licensing Division, Office of Foreign Assets Control, U.S. 
Department of the Treasury, 1500 Pennsylvania Avenue NW., Annex, 
Washington, DC 20220.

    Note 1 to Sec. 542.508: U.S. persons who receive payments in 
connection with legal services authorized pursuant to Sec. 542.507(a) 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. Additionally, U.S. persons do 
not need to obtain specific authorization to provide related services 
that are ordinarily incident to the provision of legal services 
authorized pursuant to Sec. 542.507(a).
    Note 2 to Sec. 542.508: Any payment authorized in or pursuant to 
this paragraph that is routed through the U.S. financial system should 
reference this Sec. 542.508 to avoid the blocking of the transfer.
    Note 3 to Sec. 542.508: Nothing in this section authorizes the 
transfer of any blocked property, the debiting of any blocked account, 
the entry of any judgment or order that effects a transfer of blocked 
property, or the execution of any judgment against property blocked 
pursuant to any part of this chapter or any Executive order.



Sec. 542.509  Syrian diplomatic missions in the United States.

    (a) The provision of goods or services in the United States to the 
diplomatic missions of the Government of Syria to the United States and 
to international organizations in the United States and payment for such 
goods or services are authorized, provided that:
    (1) The goods or services are for the conduct of the official 
business of the missions, or for personal use of the employees of the 
missions, and are not for resale;
    (2) The transaction does not involve the purchase, sale, financing, 
or refinancing of real property; and
    (3) The transaction is not otherwise prohibited by law.

    Note 1 to paragraph (a) of Sec. 542.509: U.S. financial institutions 
are reminded of their obligation to comply with 31 CFR 501.603.
    Note 2 to paragraph (a) of Sec. 542.509: U.S. financial institutions 
are required to obtain specific licenses to operate accounts for, or 
extend credit to, the diplomatic missions of the Government of Syria to 
the United

[[Page 238]]

States and to international organizations in the United States.

    (b) The provision of goods or services in the United States to the 
employees of the diplomatic missions of the Government of Syria to the 
United States and to international organizations in the United States 
and payment for such goods or services are authorized, provided that:
    (1) The goods or services are for personal use of the employees of 
the missions, and are not for resale; and
    (2) The transaction is not otherwise prohibited by law.

    Note to Sec. 542.509: Nothing in this section authorizes the 
transfer of any property to the Government of Syria, or any other person 
whose property and interests in property are blocked pursuant to 
Sec. 542.201(a), other than the diplomatic missions of the Government of 
Syria to the United States and to international organizations in the 
United States.



Sec. 542.510  Exports or reexports to Syria of items licensed 
or otherwise authorized by the Department of Commerce authorized;
exports or reexports of certain services authorized.

    (a) The exportation or reexportation of items to Syria from the 
United States or by a U.S. person, wherever located, to the Government 
of Syria or any other person whose property and interests in property 
are blocked pursuant to Sec. 542.201(a), and all transactions ordinarily 
incident thereto, are authorized, provided that the exportation or 
reexportation of such items to Syria is licensed or otherwise authorized 
by the Department of Commerce.
    (b) The exportation, reexportation, sale, or supply, directly or 
indirectly, from the United States or by a U.S. person, wherever 
located, to Syria, including to the Government of Syria or any other 
person whose property and interests in property are blocked pursuant to 
Sec. 542.201(a), of services that are ordinarily incident to the 
exportation or reexportation of items to Syria, or of services to 
install, repair, or replace such items, is authorized, provided that the 
exportation or reexportation of such items to Syria is licensed or 
otherwise authorized by the Department of Commerce.
    (c) This section does not authorize any debit to a blocked account.

    Note to Sec. 542.510: This section does not authorize the 
exportation or reexportation of any item not subject to the Export 
Administration Regulations, 15 CFR parts 730-774 (the ``EAR''), or the 
exportation or reexportation of services related thereto. See 15 CFR 
734.3 for a definition of ``items subject to the EAR.'' See 31 CFR 
542.525 for a general license authorizing the exportation or 
reexportation of services to Syria related to the exportation or 
reexportation of certain non-U.S.-origin goods.



Sec. 542.511  Exportation of certain services incident to Internet
-based communications authorized.

    (a) To the extent that such transactions are not exempt from the 
prohibitions of this part, and except as provided in paragraph (b) of 
this section, the exportation from the United States or by U.S. persons, 
wherever located, to persons in Syria of services incident to the 
exchange of personal communications over the Internet, such as instant 
messaging, chat and email, social networking, sharing of photos and 
movies, web browsing, and blogging, is authorized, provided that such 
services are publicly available at no cost to the user.
    (b) This section does not authorize:
    (1) The direct or indirect exportation of services with knowledge or 
reason to know that such services are intended for the Government of 
Syria or any other person whose property and interests in property are 
blocked pursuant to Sec. 542.201(a);
    (2) The direct or indirect exportation of Internet connectivity 
services or telecommunications transmission facilities (such as 
satellite or terrestrial network connectivity);
    (3) The direct or indirect exportation of web-hosting services that 
are for purposes other than personal communications (e.g., web-hosting 
services for commercial endeavors) or of domain name registration 
services; or
    (4) The direct or indirect exportation of any items to Syria.

    Note to paragraph (b)(4) of Sec. 542.511: See Sec. 542.510 for a 
general license authorizing the exportation or reexportation of certain 
items and services to Syria.

    (c) Specific licenses may be issued on a case-by-case basis for the 
exportation

[[Page 239]]

of other, including fee-based, services incident to the sharing of 
information over the Internet.



Sec. 542.512  Noncommercial, personal remittances authorized.

    (a)(1) U.S. persons are authorized to send and receive, and 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 Syria or for or on behalf of an 
individual ordinarily resident in Syria in cases in which the transfer 
involves a noncommercial, personal remittance, provided the transfer is 
not by, to, or through the Government of Syria or any other person whose 
property and interests in property are blocked pursuant to 
Sec. 542.201(a).
    (2) Noncommercial, personal remittances do not include charitable 
donations of funds to or for the benefit of an entity or funds transfers 
for use in supporting or operating a business, including a family-owned 
business.
    (b) The transferring institutions identified in paragraph (a) of 
this section may rely on the originator of a funds transfer with regard 
to compliance with paragraph (a) of this section, provided that the 
transferring institution does not know or have reason to know that the 
funds transfer is not in compliance with paragraph (a) of this section.
    (c) An individual who is a U.S. person is authorized to carry funds 
as a noncommercial, personal remittance, as described in paragraph (a) 
of this section, to an individual in Syria or ordinarily resident in 
Syria, other than an individual whose property and interests in property 
are blocked pursuant to Sec. 542.201(a), provided that the individual 
who is a U.S. person is carrying the funds on his or her behalf, but not 
on behalf of another person.



Sec. 542.513  Official activities of certain international 
organizations authorized.

    (a) Except as provided in paragraphs (b) and (c) of this section, 
all transactions and activities otherwise prohibited by this part that 
are for the conduct of the official business of the United Nations, its 
Specialized Agencies, Programmes, Funds, and Related Organizations by 
employees, contractors, or grantees thereof are authorized.

    Note 1 to paragraph (a) of Sec. 542.513: See the United Nations 
System Organizational Chart at http://www.un.org/en/aboutun/structure/
pdfs/un-system-chart-color-sm.pdf for a listing of Specialized Agencies, 
Programmes, Funds, and Related Organizations of the United Nations.

    (b) Contractors or grantees conducting transactions authorized 
pursuant to paragraph (a) of this section must provide a copy of their 
contract or grant with the United Nations, or its Specialized Agencies, 
Programmes, Funds, and Related Organizations to any U.S. person before 
the U.S. person engages in or facilitates any transaction or activity 
prohibited by this part. If the contract or grant contains any sensitive 
or proprietary information, such information may be redacted or removed 
from the copy given to the U.S. person, provided that the information is 
not necessary to demonstrate that the transaction is authorized pursuant 
to paragraph (a) of this section.
    (c) This section does not authorize any transactions or activities 
with or involving persons whose property and interests in property are 
blocked pursuant to Sec. 542.201(a), other than the Government of Syria.

    Note to Sec. 542.513: See Sec. 542.510 for a general license 
authorizing the exportation or reexportation of certain items and 
services to Syria.



Sec. 542.514  Transactions related to U.S. persons residing in Syria
authorized.

    (a) Except as provided in paragraph (b) of this section, individuals 
who are U.S. persons residing in Syria are authorized to pay their 
personal living expenses in Syria and to engage in other transactions, 
including with the Government of Syria, otherwise prohibited by this 
part that are ordinarily incident and necessary to their personal 
maintenance within Syria, including, but not limited to, payment of 
housing expenses, acquisition of goods or services for personal use, 
payment of taxes or fees to the Government of

[[Page 240]]

Syria, and purchase or receipt of permits, licenses, or public utility 
services from the Government of Syria.
    (b) This section does not authorize:
    (1) Any debit to a blocked account of the Government of Syria on the 
books of a U.S. financial institution or to any other account blocked 
pursuant to Sec. 542.201(a);
    (2) Any transaction with a person whose property and interests in 
property are blocked pursuant to Sec. 542.201(a) other than the 
Government of Syria; or
    (3) Transactions or services ordinarily incident to operating or 
supporting a business in Syria, employment in Syria, or any new 
investment in Syria prohibited by Sec. 542.206.



Sec. 542.515  Operation of accounts authorized.

    The operation of an account in a U.S. financial institution for an 
individual in Syria other than an individual whose property and 
interests in property are blocked pursuant to Sec. 542.201(a), is 
authorized, provided that transactions processed through the account:
    (a) Are of a personal nature and not for use in supporting or 
operating a business;
    (b) Do not involve transfers directly or indirectly to Syria or for 
the benefit of individuals ordinarily resident in Syria unless 
authorized by Sec. 542.512; and
    (c) Are not otherwise prohibited by this part.



Sec. 542.516  Certain services in support of nongovernmental 
organizations' activities authorized.

    (a) Nongovernmental organizations are authorized to export or 
reexport services to Syria that would otherwise be prohibited by 
Sec. 542.207 in support of the following not-for-profit activities:
    (1) Activities to support humanitarian projects to meet basic human 
needs in Syria, including, but not limited to, drought relief, 
assistance to refugees, internally displaced persons, and conflict 
victims, food and medicine distribution, and the provision of health 
services;
    (2) Activities to support democracy building in Syria, including, 
but not limited to, rule of law, citizen participation, government 
accountability, and civil society development projects;
    (3) Activities to support education in Syria, including, but not 
limited to, combating illiteracy, increasing access to education, and 
assisting education reform projects;
    (4) Activities to support non-commercial development projects 
directly benefiting the Syrian people, including, but not limited to, 
preventing infectious disease and promoting maternal/child health, 
sustainable agriculture, and clean water assistance; and
    (5) Activities to support the preservation and protection of 
cultural heritage sites in Syria, including, but not limited to, 
museums, historic buildings, and archaeological sites.
    (b) 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 on behalf of U.S. or third-country non-
governmental organizations to or from Syria in support of the activities 
authorized by paragraph (a), provided that, except as authorized by 
paragraph (d) of this section, the transfer is not by, to, or through 
the Government of Syria or any other person whose property and interests 
in property are blocked pursuant to Sec. 542.201(a).
    (c) U.S. persons engaging in transactions pursuant to paragraph 
(a)(5) or processing transfers of funds to or from Syria in support of 
activities authorized by paragraph (a)(5) of this section are required 
to file quarterly reports no later than 30 days following the end of the 
calendar quarter with OFAC. The reports should include complete 
information on all activities and transactions undertaken pursuant to 
paragraph (a)(5) and paragraph (b) in support of the activities 
authorized by paragraph (a)(5) of this section that took place during 
the reporting period, including the parties involved, the value of the 
transactions, the services provided, and the dates of the transactions. 
The reports should be addressed to the Office of Foreign Assets Control, 
Licensing Division, U.S. Treasury Department, 1500 Pennsylvania Avenue 
NW.-Annex, Washington, DC 20220.

[[Page 241]]

    (d) Nongovernmental organizations are authorized to engage in 
transactions with the Government of Syria that are necessary for the 
activities authorized by paragraph (a) of this section, including, but 
not limited to, payment of taxes, fees, and import duties to, and 
purchase or receipt of permits, licenses, or public utility services 
from, the Government of Syria.
    (e) Except as authorized in paragraph (d), this section does not 
authorize the exportation or reexportation of services to, charitable 
donations to or for the benefit of, or any other transactions involving, 
the Government of Syria or any other person whose property and interests 
in property are blocked pursuant to Sec. 542.201(a). Specific licenses 
may be issued on a case-by-case basis for these purposes.

    Note to Sec. 542.516: See Sec. 542.510 for a general license 
authorizing the exportation or reexportation of certain items and 
services to Syria.



Sec. 542.517  Third-country diplomatic and consular funds transfers
authorized.

    U.S. depository institutions, U.S. registered brokers or dealers in 
securities, and U.S. registered money transmitters are authorized to 
process funds transfers for the operating expenses or other official 
business of third-country diplomatic or consular missions in Syria, 
provided that the transfer is not by, to, or through the Government of 
Syria or any other person whose property and interests in property are 
blocked pursuant to Sec. 542.201(a).



Sec. 542.518  Payments for overflights of Syrian airspace or emergency 
landings in Syria authorized.

    Payments to Syria of charges for services rendered by the Government 
of Syria in connection with the overflight of Syria or emergency landing 
in Syria of aircraft owned or operated by a United States person or 
registered in the United States are authorized, provided that no payment 
may be made by, to, or through any person whose property and interests 
in property are blocked pursuant to Sec. 542.201(a) other than the 
Government of Syria.



Sec. 542.519  Transactions related to telecommunications and mail 
authorized.

    (a)(1) Except as provided in paragraph (a)(2) of this section, all 
transactions with respect to the receipt and transmission of 
telecommunications involving Syria are authorized, provided that no 
payment pursuant to this section may involve any debit to a blocked 
account of the Government of Syria on the books of a U.S. financial 
institution, or any transaction with a person whose property and 
interests in property are blocked pursuant to Sec. 542.201(a) other than 
the Government of Syria.
    (2) This section does not authorize:
    (i) The provision, sale, or lease of telecommunications equipment or 
technology; or
    (ii) The provision, sale, or lease of capacity on telecommunications 
transmission facilities (such as satellite or terrestrial network 
connectivity).
    (b) All transactions of common carriers incident to the receipt or 
transmission of mail and packages between the United States and Syria 
are authorized, provided that the importation or exportation of such 
mail and packages is exempt from or authorized pursuant to this part.



Sec. 542.520  Certain transactions related to patents, trademarks,
copyrights, and other intellectual property authorized.

    (a) All of the following transactions in connection with patent, 
trademark, copyright or other intellectual property protection in the 
United States or Syria are authorized, including exportation of services 
to Syria, payment for such services, and payment to persons in Syria 
directly connected to such intellectual property protection:
    (1) The filing and prosecution of any application to obtain a 
patent, trademark, copyright or other form of intellectual property 
protection;
    (2) The receipt of a patent, trademark, copyright, or other form of 
intellectual property protection;
    (3) The renewal or maintenance of a patent, trademark, copyright or 
other form of intellectual property protection;

[[Page 242]]

    (4) The filing and prosecution of opposition or infringement 
proceedings with respect to a patent, trademark, copyright or other form 
of intellectual property protection, or the entrance of a defense to any 
such proceedings; and
    (5) The assignment or transfer of a patent, trademark, copyright, or 
other form of intellectual property protection.
    (b) This section authorizes the payment of fees currently due to the 
United States Government or the Government of Syria, or of the 
reasonable and customary fees and charges currently due to attorneys or 
representatives within the United States or Syria, in connection with 
the transactions authorized in paragraph (a) of this section, except 
that payment effected pursuant to the terms of this paragraph may not be 
made from a blocked account.



Sec. 542.521  Activities and services related to certain nonimmigrant 
and immigrant categories authorized.

    (a) U.S. persons are authorized to engage in all transactions in the 
United States with persons otherwise eligible for non-immigrant 
classification under categories A-3 and G-5 (attendants, servants and 
personal employees of aliens in the United States on diplomatic status), 
D (crewmen), F (students), I (information media representatives), J 
(exchange visitors), M (non-academic students), O (aliens with 
extraordinary ability), P (athletes, artists, and entertainers), Q 
(international cultural exchange visitors), R (religious workers), or S 
(witnesses), to the extent such a visa has been granted by the U.S. 
Department of State or such non-immigrant status, or related benefit, 
has been granted by the U.S. Department of Homeland Security.
    (b) U.S. persons are authorized to engage in all transactions in the 
United States with persons otherwise eligible for non-immigrant 
classification under categories E-2 (treaty investor), H (temporary 
worker), or L (intra-company transferee) and all immigrant 
classifications, to the extent such a visa has been granted by the U.S. 
Department of State or such non-immigrant or immigrant status, or 
related benefit, has been granted by the U.S. Department of Homeland 
Security, and provided that the persons are not coming to the United 
States to work as an agent, employee, or contractor of the Government of 
Syria or an entity in Syria.
    (c) U.S. persons are authorized to export services to persons in 
Syria in connection with the filing of an individual's application for 
the visa categories listed in paragraphs (a) and (b) of this section.
    (d)(1) Accredited U.S. graduate and undergraduate degree-granting 
academic institutions are authorized to export services to Syria for the 
filing and processing of applications to enroll, and the acceptance of 
payments for submitted applications to enroll and tuition from persons 
ordinarily resident in Syria, provided that any transfer of funds is not 
by, to, or through the Government of Syria or any other person whose 
property and interests in property are blocked pursuant to 
Sec. 542.201(a).
    (2) In the event services are exported under paragraph (d)(1) of 
this section in connection with an application to enroll that is denied 
or withdrawn, U.S. persons are authorized to transfer, in a lump sum 
back to Syria or to a third country, any funds paid by the applicant in 
connection with such an application, provided that any transfer of funds 
is not by, to, or through the Government of Syria or any other person 
whose property and interests in property are blocked pursuant to 
Sec. 542.201(a).
    (e)(1) U.S. persons are authorized to engage in all transactions 
necessary to export financial services to Syria in connection with an 
individual's application for a non-immigrant visa under category E-2 
(treaty investor) or an immigrant visa under category EB-5 (immigrant 
investor), provided that any transfer of funds is not by, to, or through 
the Government of Syria or any other person whose property and interests 
in property are blocked pursuant to Sec. 542.201(a).
    (2) In the event services are exported under paragraph (e)(1) of 
this section in connection with an application for an E-2 or EB-5 visa 
that is denied, withdrawn, or otherwise does not result in the issuance 
of such visa, U.S. persons

[[Page 243]]

are authorized to transfer, in a lump sum back to Syria or to a third 
country, any funds belonging to the applicant that are held in an escrow 
account during the pendency of, and in connection with such a visa 
application, provided that any transfer of funds is not by, to, or 
through the Government of Syria or any other person whose property and 
interests in property are blocked pursuant to Sec. 542.201(a).
    (3) Paragraph (d)(1) of this section does not authorize:
    (i) The exportation of financial services by U.S. persons other than 
in connection with funds used in pursuit of an E-2 or EB-5 visa;
    (ii) Any investment in Syria by a U.S. person; or
    (iii) The provision of services to any persons coming to the United 
States to work as an agent, employee, or contractor of the Government of 
Syria or an entity in Syria.



Sec. 542.522  Official business of the Federal Government authorized.

    (a) All transactions otherwise prohibited by Sec. 542.201(a)(2) that 
are for the conduct of the official business of the Federal Government 
by employees, grantees, or contractors thereof, are authorized.
    (b) Grantees or contractors conducting transactions authorized 
pursuant to paragraph (a) of this section must provide a copy of their 
grant or contract with the United States Government to any U.S. person 
before the U.S. person engages in or facilitates any transaction 
prohibited by this part. If the grant or contract contains any sensitive 
or proprietary information, such information may be redacted or removed 
from the copy given to the U.S. person, provided that the information is 
not necessary to demonstrate that the transaction is authorized pursuant 
to paragraph (a) of this section.

    Note to Sec. 542.522: Section 542.211(d) exempts transactions for 
the conduct of the official business of the Federal Government by 
employees, grantees, or contractors thereof to the extent such 
transactions are subject to the prohibitions contained in this part 
other than those in Sec. 542.201(a)(2).



Sec. 542.523  Certain services to the National Coalition of Syrian 
Revolutionary and Opposition Forces authorized.

    (a) Except as provided in paragraphs (b) and (c) of this section, 
U.S. persons are authorized to export, reexport, sell, or supply, 
directly or indirectly, to the National Coalition of Syrian 
Revolutionary and Opposition Forces (``the Coalition'') services 
otherwise prohibited by Sec. 542.207.

    Note to paragraph (a): See Sec. 542.510 for a general license 
authorizing the exportation and reexportation of certain items and 
services to Syria.

    (b) This section does not authorize:
    (1) Any transaction with a person whose property and interests in 
property are blocked pursuant to Sec. 542.201(a); or
    (2) The exportation, reexportation, sale, or supply, directly or 
indirectly, of any services in support of the exportation or 
reexportation to Syria of any item listed on the United States Munitions 
List (22 CFR part 121).
    (c) Any transfer of funds to or from the Coalition under this 
section must be conducted through the Coalition's U.S. office through an 
account of the Coalition at a U.S. financial institution specifically 
licensed for that purpose by OFAC.

    Note to paragraph (c): For additional information on the bank 
account that is specifically licensed for receipt of funds transfers, 
please contact the U.S. office of the Coalition at 1101 Pennsylvania 
Avenue NW., Ste # 6620, Washington, DC 20004, ATTN: OFAC-authorized bank 
account, or by phone at (202) 800-1130.
    Note 1 to Sec. 542.523: Financial institutions transferring funds to 
or from the Coalition pursuant to this section may rely on the 
originator of a funds transfer with regard to compliance with paragraph 
(b), provided that the transferring institution does not know or have 
reason to know that the funds transfer is not in compliance with 
paragraph (b) of this section.
    Note 2 to Sec. 542.523: Consistent with sections Sec. 542.101 and 
Sec. 542.502, this section does not authorize any transaction prohibited 
by any part of 31 CFR Chapter V other than Sec. 542.207. For example, 
this section does not authorize any transaction with a person whose 
property and interests in property are blocked pursuant to Sec. 594.201 
of this chapter, such as al-Nusrah.

[[Page 244]]



Sec. 542.524  Bunkering and emergency repairs.

    (a) Except as provided in paragraph (b) of this section, services 
provided in the United States to a non-Syrian carrier transporting 
passengers or goods to or from Syria are permissible if they are:
    (1) Bunkers or bunkering services;
    (2) Supplied or performed in the course of emergency repairs; or
    (3) Supplied or performed under circumstances which could not be 
anticipated prior to the carrier's departure for the United States.
    (b) This section does not authorize the provision of services in 
connection with the transport of any goods to or from the Government of 
Syria or any other person whose property and interests in property are 
blocked pursuant to Sec. 542.201(a).



Sec. 542.525  Exportation or reexportation of services to Syria
related to the exportation or reexportation of certain non-U.S.
-origin goods authorized.

    The exportation, reexportation, sale, or supply, directly or 
indirectly, from the United States or by a U.S. person, wherever 
located, to Syria, including to the Government of Syria, of services 
that are ordinarily incident to the exportation or reexportation to 
Syria, including to the Government of Syria, of non-U.S.-origin food, 
medicine, and medical devices that would be designated as EAR 99 under 
the Export Administration Regulations, 15 CFR parts 730-774 (the 
``EAR''), if it were subject to the EAR, are authorized.

    Note to Sec. 542.525: See Sec. 542.510 for a general license 
authorizing the exportation or reexportation of certain items and 
services to Syria from the United States or by a U.S. person.



Sec. 542.526  Exportation of services related to conferences in the
United States or third countries authorized.

    (a) The exportation, reexportation, sale, or supply of services from 
the United States or by a U.S. person are authorized where such services 
are performed or provided in the United States by or for a person who is 
ordinarily resident in Syria, other than the Government of Syria or any 
other person whose property and interests in property are blocked 
pursuant to Sec. 542.201(a), is authorized, for the purpose of, or which 
directly relate to, participating in a conference, performance, 
exhibition or similar event, and such services are consistent with that 
purpose.
    (b) To the extent not otherwise exempt from the prohibitions of this 
part, the exportation, reexportation, sale, or supply of services 
directly related to the sponsorship by a U.S. person of a conference or 
other similar event in a third country that is attended by persons who 
are ordinarily resident in Syria, other than the Government of Syria or 
any other person whose property and interests in property are blocked 
pursuant to Sec. 542.201(a), is authorized, provided that the conference 
or other similar event is not tailored in whole or in part to or for 
Syria or persons who are ordinarily resident in Syria.



Sec. 542.527  Policy on activities related to the telecommunications
sector of Syria.

    (a) Specific licenses may be issued on a case-by-case basis to 
authorize U.S. persons to engage in transactions involving Syria's 
telecommunications sector that are otherwise prohibited by Sec. 542.206, 
Sec. 542.207, or Sec. 542.210, and that are not otherwise authorized by 
this part. The purpose of this policy is to enable private persons in 
Syria to better and more securely access the Internet.
    (b) Specific licenses issued pursuant to this policy will not 
authorize any transaction or activity, directly or indirectly, with the 
Government of Syria or any other person whose property and interests in 
property are blocked pursuant to Sec. 542.201(a).



Sec. 542.528  Policy on activities related to the agricultural
sector of Syria.

    (a) Specific licenses may be issued on a case-by-case basis to 
authorize U.S. persons to engage in transactions involving Syria's 
agricultural sector that are otherwise prohibited by Sec. 542.206, 
Sec. 542.207, or Sec. 542.210. The purpose of this policy is to enable 
projects to benefit

[[Page 245]]

and support the people of Syria by enhancing and strengthening the 
agricultural sector in a food insecure country.
    (b) Specific licenses issued pursuant to this policy will not 
authorize any transaction or activity, directly or indirectly, with the 
Government of Syria or any other person whose property and interests in 
property are blocked pursuant to Sec. 542.201(a).



Sec. 542.529  Policy on activities related to petroleum and petroleum
products of Syrian origin for the benefit of the National Coalition
of Syrian Revolutionary and Opposition Forces.

    (a) Specific licenses may be issued on a case-by-case basis to 
authorize U.S. persons to engage in any transaction otherwise prohibited 
by Sec. 542.206, Sec. 542.207, Sec. 542.208, Sec. 542.209, or 
Sec. 542.210, including but not limited to new investment, involving the 
purchase, trade, export, import, or production of petroleum or petroleum 
products of Syrian origin for the benefit of the National Coalition of 
Syrian Revolutionary and Opposition Forces.
    (b) Specific licenses issued pursuant to this policy will not 
authorize any transaction or activity, directly or indirectly, with the 
Government of Syria or any other person whose property and interests in 
property are blocked pursuant to Sec. 542.201(a).



Sec. 542.530  Transactions incident to importations from Syria
authorized.

    All transactions otherwise prohibited by Sec. 542.207 that are 
ordinarily incident to an importation into the United States from Syria, 
directly or indirectly, of goods technology, or services, are 
authorized, provided the importation is not from or on behalf of, 
directly or indirectly, a person whose property and interests in 
property are blocked pursuant to Sec. 542.201(a).

    Note to Sec. 542.530: This section does not authorize transactions 
that are ordinarily incident to an importation that is prohibited 
pursuant to 542.208 or any transaction prohibited pursuant to 542.209.



Sec. 542.531  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services in the 
United States to persons whose property and interests in property are 
blocked pursuant to Sec. 542.201(a) is authorized, provided that all 
receipt of payment for such services must be specifically licensed.



Sec. 542.532  Authorized transactions necessary and ordinarily 
incident to publishing.

    (a) Subject to the restrictions set forth in paragraphs (b) through 
(d) of this section, U.S. persons are authorized to engage in all 
transactions necessary and ordinarily incident to the publishing and 
marketing of manuscripts, books, journals, and newspapers in paper or 
electronic format (collectively, ``written publications''). This section 
does not apply if the parties to the transactions described in this 
paragraph include the Government of Syria or any other person whose 
property and interests in property are blocked pursuant to Sec. 542.201. 
For the purposes of this section, the term ``Government of Syria'' 
includes the state and the Government of the Syrian Arab Republic, as 
well as any political subdivision, agency, or instrumentality thereof, 
which includes the Central Bank of Syria, and any person acting or 
purporting to act directly or indirectly on behalf of any of the 
foregoing with respect to the transactions described in th