[Federal Register Volume 60, Number 126 (Friday, June 30, 1995)]
[Rules and Regulations]
[Pages 34144-34147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16122]
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DEPARTMENT OF THE TREASURY
31 CFR Part 585
Federal Republic of Yugoslavia (Serbia and Montenegro) Sanctions
Regulations; Bosnian Serb Sanctions
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule; amendments.
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SUMMARY: This rule amends the Federal Republic of Yugoslavia (Serbia
and Montenegro) Sanctions Regulations to: Implement Executive Order
12934 of October 25, 1994, imposing sanctions on the Bosnian Serb
forces and authorities and the areas of the Republic of Bosnia and
Herzegovina that they control, in view of United Nations Security
Council Resolution No. 942; provide an agency interpretation of the new
prohibitions as preventing certain financial services to the areas of
the Republic of Bosnia and Herzegovina under the control of Bosnian
Serb forces and to entities worldwide owned or controlled from such
areas; make additional conforming amendments to reflect the
implementation of Executive Order 12846 of April 25, 1993; and make
certain clarifying and technical amendments.
EFFECTIVE DATE: June 30, 1995.
FOR FURTHER INFORMATION CONTACT: Steven I. Pinter, Chief of Licensing,
tel.: 202/622-2480, or William B. Hoffman, Chief Counsel, tel.: 202/
622-2410, Office of Foreign Assets Control, Department of the Treasury,
Washington, DC 20220.
SUPPLEMENTARY INFORMATION:
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(192.239.92.205).
Background
On October 25, 1994, the President issued Executive Order 12934, 59
FR 54117 (October 27, 1994), expanding the scope of the national
emergency declared in Executive Order 12808 to extend certain sanctions
to the Bosnian Serb forces and authorities and the areas of the
Republic of Bosnia and Herzegovina that they control, taking into
account the provisions of United Nations Security Council Resolution
No. 942 of September 23, 1994. Effective October 25, 1994, the
Executive order blocks all property and interests in property of the
Bosnian Serb military and paramilitary forces and the authorities in
those areas of the Republic of Bosnia and Herzegovina under the control
of Bosnian Serb forces; entities organized or located in those areas;
entities owned or controlled directly or indirectly by any person in,
or resident in, those areas; and any person acting for or on behalf of
any of the above. A partial listing of such persons was published on
April 18, 1995. 60 FR 19448. The part heading is revised to read: ``The
Federal Republic of Yugoslavia (Serbia and Montenegro) and the Bosnian
Serb-Controlled Areas of the Republic of Bosnia and Herzegovina
Sanctions Regulations, 31 CFR part 585 (the ``Regulations''),'' and
Sec. 585.201 of the Regulations is amended to implement this provision.
E.O. 12934, section 1.
Section 585.217 of the Regulations is amended to implement the
Executive order's prohibition in section 2(b) against the entry of
U.S.-flag vessels into the riverine ports of those areas of the
Republic of Bosnia and Herzegovina controlled by Bosnian Serb forces.
Section 585.218 of the Regulations, which already prohibits exportation
to, importation from, and transhipment through those areas of the
Republic of Bosnia and Herzegovina controlled by Bosnian Serb forces,
is amended to reflect the Executive order's prohibition in section 2(a)
against the provision or exportation of services to those areas or to
any person for the purpose of any business carried on in those areas,
either from the United States or by a U.S. person.
The prohibitions of Executive Order 12934 apply notwithstanding any
prior contracts, international agreements, licenses or authorizations,
but may be modified by regulation, order or license issued pursuant to
that Executive order.
In addition to implementing the provisions of Executive Order
12934, this final rule amends several provisions of the Regulations
pertaining to property interests blocked under Sec. 585.201 by
substituting a simple reference to ``property or interests in property
blocked pursuant to Sec. 585.201'' for a lengthy list of all persons
whose property interests are blocked pursuant to Executive Orders
12808, 12810, 12846, or 12934.
Section 585.420 is added interpreting new Secs. 585.201(c) and
585.218(b) of the Regulations to prohibit the transfer of funds by U.S.
financial institutions to or for the benefit of persons whose property
and interests in property are blocked pursuant to Sec. 585.201(c), on
the basis that such transfers are blocked by operation of law upon
their initiation, and that such transfers involve an illegal
exportation of financial services from
[[Page 34145]]
the United States or by a United States person.
Finally, paragraph (c) of Sec. 585.512 of the Regulations, which
states that charge cards may not be used by U.S. persons authorized to
engage in certain travel-related transactions under this section while
in the FRY (S&M), is amended to clarify (but not modify) the
authorizations contained in that section.
Because the Regulations involve a foreign affairs function,
Executive Order 12866 and the provisions of the Administrative
Procedure Act, 5 U.S.C. 553, requiring notice of proposed rulemaking,
opportunity for public participation, and delay in effective date, are
inapplicable. Because no notice of proposed rulemaking is required for
this rule, the Regulatory Flexibility Act, 5 U.S.C. 601-612 does not
apply.
List of Subjects in 31 CFR Part 585
Administrative practice and procedure, Banks, banking, Foreign
investments in United States, Foreign trade, Penalties, Reporting and
recordkeeping requirements, Securities, Transportation, Yugoslavia.
For the reasons set forth in the preamble, 31 CFR part 585 is
amended as set forth below:
1. The heading to part 585 is revised to read as follows:
PART 585--FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND MONTENEGRO)
AND BOSNIAN SERB-CONTROLLED AREAS OF THE REPUBLIC OF BOSNIA AND
HERZEGOVINA SANCTIONS REGULATIONS
2. The authority citation for part 585 is revised to read as
follows:
Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 49 U.S.C. 40106(b); 50
U.S.C. 1601-1651; 50 U.S.C. 1701-1706; E.O. 12808, 57 FR 23299, 3 CFR,
1992 Comp., p. 305; E.O. 12810, 57 FR 24347, 3 CFR, 1992 Comp., p. 307;
E.O. 12831, 58 FR 5253, 3 CFR, 1993 Comp., p. 576; E.O. 12846, 58 FR
25771, 3 CFR, 1993 Comp., p. 599; E.O. 12934, 59 FR 54117 (October 27,
1994).
Subpart B--Prohibitions
3. Section 585.201 is amended as follows: In paragraph (a) by
removing ``are'' wherever it appears and adding ``is''; by removing
``come'' wherever it appears and adding ``comes''; by redesignating
paragraph (c) as paragraph (d); and by adding new paragraph (c) to read
as follows:
Sec. 585.201 Prohibited transactions involving blocked property;
transactions with respect to securities.
* * * * *
(c) Except as otherwise authorized, and notwithstanding the
existence of any rights or obligations conferred or imposed by any
international agreement or any contract entered into or any license or
permit granted before 11:59 p.m. EDT, October 25, 1994, no property or
interest in property of the following persons that is in the United
States, that hereafter comes within the United States, or that is or
hereafter comes within the possession or control of United States
persons, including their overseas branches, may be transferred, paid,
exported, withdrawn, or otherwise dealt in:
(1) The Bosnian Serb military and paramilitary forces and the
authorities in those areas of the Republic of Bosnia and Herzegovina
under the control of those forces;
(2) Any entity, including any commercial, industrial, or public
utility undertaking, organized or located in those areas of the
Republic of Bosnia and Herzegovina under the control of Bosnian Serb
forces;
(3) Any entity, wherever organized or located, which is owned or
controlled directly or indirectly by any person in, or resident in,
those areas of the Republic of Bosnia and Herzegovina under the control
of Bosnian Serb forces; and
(4) Any person acting for or on behalf of any person included
within the scope of paragraphs (c)(1), (2) or (3) of this section.
4.Paragraphs (a), (b), and (e) of Sec. 585.202 are revised to read
as follows:
Sec. 585.202 Effect of transfers violating the provisions of this
part.
(a) Any transfer after the effective date specified in Sec. 585.301
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. 585.201 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. 585.201, 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.
* * * * *
(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. 585.201.
Sec. 585.203 [Amended]
5. Section 585.203 is amended as follows: In paragraph (a)(2) by
removing ``entity of the FRY (S&M)'' and adding ``person(s)'' in its
place, and in paragraph (c) by revising the first sentence to read as
follows: ``U.S. financial institutions receiving instructions to
execute a payment or transfer of funds they hold in which a person has
an interest whose property or interests in property are blocked
pursuant to Sec. 585.201, shall block the funds and provide written
notification to the Compliance Programs Division, Office of Foreign
Assets Control, U.S. Treasury Department, 1500 Pennsylvania Ave., NW--
2131 Annex, Washington, DC 20220, within 10 business days from the
value date of the payment or transfer.''.
6. Section 585.217 is revised to read as follows:
Sec. 585.217 Entry into the territorial waters of the FRY (S&M) or the
riverine ports of the Republic of Bosnia and Herzegovina prohibited.
Except as otherwise authorized by the Director of the Office of
Foreign Assets Control pursuant to this part, no vessel registered in
the United States or owned or controlled by U.S. persons, other than a
United States naval vessel, may enter:
(a) The territorial waters of the FRY (S&M); or
(b) The riverine ports of those areas of the Republic of Bosnia and
Herzegovina under the control of Bosnian Serb forces.
7. Section 585.218 is revised to read as follows:
Sec. 585.218 Trade in United Nations Protected Areas of Croatia and
those areas of the Republic of Bosnia and Herzegovina under the control
of Bosnian Serb forces.
The following are prohibited, except as otherwise authorized by the
Director of the Office of Foreign Assets Control pursuant to this part:
(a) Any dealing by a United States person relating to the
importation from, exportation to, or transshipment of goods through the
United Nations Protected Areas in the Republic of Croatia and those
areas of the Republic of Bosnia and Herzegovina under the control of
Bosnian Serb forces, or
[[Page 34146]]
activity of any kind that promotes or is intended to promote such
dealing (see Sec. 585.524); and
(b) The provision or exportation of services to those areas of the
Republic of Bosnia and Herzegovina under the control of Bosnian Serb
forces, or to any person for the purpose of any business carried on in
those areas, either from the United States or by a United States
person.
Subpart C--General Definitions
8. Section 585.301 is amended as follows: In paragraph (a) by
removing the reference ``Secs. 585.201 (a) & (c)'' and adding
``Secs. 585.201 (a) and (d)'' in its place; in paragraph (e) by adding
``(a)'' after the references to ``585.217'' and ``585.218''; and by
removing ``and'' from the end of paragraph (d) and the period from the
end of paragraph (e), by adding a semicolon and ``and'' to the end of
paragraph (e), and by adding a new paragraph (f) to read as follows:
Sec. 585.301 Effective date.
* * * * *
(f) With respect to Secs. 585.201(c), 585.217(b), and 585.218(b),
11:59 p.m. EDT, October 25, 1994.
9. Section 585.302 is revised to read as follows:
Sec. 585.302 Blocked account; blocked property.
The terms blocked account and blocked property shall mean any
account and any property or interest in property blocked pursuant to
Sec. 585.201 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.
Subpart D--Interpretations
10. Section 585.403 is revised to read as follows:
Sec. 585.403 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) from a person whose property or property interests are
blocked pursuant to Sec. 585.201, such property shall no longer be
deemed to be property blocked pursuant to Sec. 585.201, unless there
exists in the property another interest that is blocked pursuant to
Sec. 585.201 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 or property interests are blocked pursuant to
Sec. 585.201, such property shall be deemed to be property in which
that person has an interest and therefore blocked.
Sec. 585.405 [Amended]
11. Section 585.405 is amended by removing ``the Government of the
FRY (S&M) or the former Government of the Social Federal Republic of
Yugoslavia,'' and adding ``a person whose property or interests in
property are blocked pursuant to Sec. 585.201'', and by removing
``and'' between the references to ``Sec. 585.201'' and ``Secs. 585.204-
585.212'', adding a comma in its place, and adding ``and Secs. 585.217-
585.218'' to the end of the first sentence.
12. Paragraph (a) of Sec. 585.406 is revised to read as follows:
Sec. 585.406 Extensions of credits or loans.
(a) The prohibition in Sec. 585.210 applies to the unlicensed
renewal of credits or loans held in the name of a person whose property
or interests in property are blocked pursuant to Sec. 585.201 that were
in existence on the effective date, whether by affirmative action or
operation of law.
* * * * *
13. Paragraph (a) of Sec. 585.408 is revised to read as follows:
Sec. 585.408 Offshore transactions.
(a) The prohibitions contained in Secs. 585.201 and 585.206 apply
to transactions by U.S. persons in locations outside the United States
with respect to property in which the U.S. person knows, or has reason
to know, that a person whose property or interests in property are
blocked pursuant to Sec. 585.201 has or has had an interest since the
effective date specified in Sec. 585.301, or that such property is held
in the name of a person whose property or interests in property are
blocked pursuant to Sec. 585.201.
* * * * *
14. The note to Sec. 585.412 is revised to read as follows:
Sec. 585.412 Release of goods originating in the FRY (S&M) from a
bonded warehouse or foreign trade zone.
* * * * *
(Note: property blocked pursuant to Sec. 585.201 may not be
released unless authorized or licensed by the Office of Foreign
Assets Control.)
Sec. 585.413 [Amended]
15. Section 585.413 is amended by revising the second sentence to
read as follows: ``However, any payment in connection with such
importation is subject to the prohibitions contained in Secs. 585.201
and 585.210.''.
16. Section 585.420 is added to subpart D to read as follows:
Sec. 585.420 Prohibited transfer of funds involving those areas of the
Republic of Bosnia and Herzegovina under the control of Bosnian Serb
forces.
Sections 585.201(c) and 585.218(b) prohibit U.S. financial
institutions from committing or transferring, directly or indirectly,
funds or other financial or economic resources to or for the benefit of
any person whose property or interests in property are blocked pursuant
to Sec. 585.201(c).
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
17. The introductory text and paragraph (c) of Sec. 585.504 are
revised to read as follows:
Sec. 585.504 Investment and reinvestment of certain funds.
U.S. financial institutions are hereby authorized to invest and
reinvest assets blocked pursuant to Sec. 585.201, subject to the
following conditions:
* * * * *
(c) No immediate financial or economic benefit accrues (e.g.,
through pledging or other use) to any person whose property or
interests in property are blocked pursuant to Sec. 585.201.
18. Paragraphs (a) and (b) of Sec. 585.505 are revised to read as
follows:
Sec. 585.505 Completion of certain transactions related to bankers
acceptances authorized.
(a) Persons other than those whose property or interests in
property are blocked pursuant to Sec. 585.201 are authorized to buy,
sell, and satisfy obligations with respect to bankers acceptances, and
to pay under deferred payment undertakings, relating to a property
interest blocked pursuant to Sec. 585.201, as long as the bankers
acceptances were created or the deferred payment undertakings were
incurred prior to the effective date.
(b) Persons other than those whose property or interests in
property are blocked pursuant to Sec. 585.201 are authorized to buy,
sell, and satisfy obligations with respect to bankers acceptances, and
to pay under deferred payment undertakings, relating to the importation
or exportation of goods to or from the FRY (S&M) that do not involve a
property interest blocked
[[Page 34147]]
pursuant to Sec. 585.201, as long as the bankers acceptances or the
deferred payment undertakings were accepted prior to the effective
date.
* * * * *
19. The section heading and paragraphs (a) and (b) of Sec. 585.506
are revised to read as follows:
Sec. 585.506 Payments of obligations to persons within the United
States authorized.
(a) 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 solely for the purpose of payment of
obligations of a person whose property or interests in property are
blocked pursuant to Sec. 585.201 to persons or accounts within the
United States is authorized, provided that the obligation arose prior
to the effective date, and the payment requires no debit to a blocked
account. Property is not blocked by virtue of being transferred or
received pursuant to this section.
(b) A person receiving payment under this section may distribute
all or part of that payment to any person, provided that any such
payment to a person whose property or interests in property are blocked
pursuant to Sec. 585.201 must be to a blocked account in a U.S.
financial institution.
* * * * *
Sec. 585.512 [Amended]
20. Paragraph (c) of Sec. 585.512 is amended by removing ``, or to
engage in transactions, while traveling in the FRY (S&M).'' and by
adding ``in the FRY (S&M) in connection with any transactions
authorized by this section.'' in its place.
Sec. 585.524 [Amended]
21. The section heading of Sec. 585.524 is amended by removing
``Serb-controlled areas of Bosnia-Hercegovina'' and adding ``those
areas of the Republic of Bosnia and Herzegovina controlled by Bosnian
Serb forces'' in its place. Paragraphs (a) and (b) of Sec. 585.524 are
amended by removing ``Bosnia-Hercegovina'' wherever it appears and
adding ``Bosnia and Herzegovina'' in its place.
Dated: June 23, 1995.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
Approved: June 23, 1995.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 95-16122 Filed 6-28-95; 9:20 am]
BILLING CODE 4810-25-F