[Title 31 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2002 Edition]
[From the U.S. Government Printing Office]



[[Page i]]



                    31


          Part 200 to End

                         Revised as of July 1, 2002

Money and Finance: Treasury





          Containing a codification of documents of general 
          applicability and future effect
          As of July 1, 2002
          With Ancillaries
          Published by
          Office of the Federal Register
          National Archives and Records
          Administration

A Special Edition of the Federal Register



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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2002



  For sale by the Superintendent of Documents, U.S. Government Printing 
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                            Table of Contents



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

  Title 31:
    Subtitle B--Regulations Relating to Money and Finance 
      (Continued)
          Chapter II--Fiscal Service, Department of the 
          Treasury                                                   5
          Chapter IV--Secret Service, Department of the 
          Treasury                                                 475
          Chapter V--Office of Foreign Assets Control, 
          Department of the Treasury                               485
          Chapter VI--Bureau of Engraving and Printing, 
          Department of the Treasury                              1015
          Chapter VII--Federal Law Enforcement Training 
          Center, Department of the Treasury                      1021
          Chapter VIII--Office of International Investment, 
          Department of the Treasury                              1025
          Chapter IX--Federal Claims Collection Standards 
          (Department of the Treasury--Department of Justice)     1051
  Finding Aids:
      Material Approved for Incorporation by Reference........    1073
      Table of CFR Titles and Chapters........................    1075
      Alphabetical List of Agencies Appearing in the CFR......    1093
      List of CFR Sections Affected...........................    1103



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

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 31 CFR 202.1 refers 
                       to title 31, part 202, 
                       section 1.

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

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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 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, July 1, 2002), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

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 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    Properly approved incorporations by reference in this volume are 
listed in the Finding Aids at the end of this volume.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed in 
the Finding Aids of this volume as an approved incorporation by 
reference, please contact the agency that issued the regulation 
containing that incorporation. If, after contacting the agency, you find 
the material is not available, please notify the Director of the Federal 
Register, National Archives and Records Administration, Washington DC 
20408, or call (202) 523-4534.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

[[Page vii]]


REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-523-5227 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
[email protected].

SALES

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ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, The United States 
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    The Office of the Federal Register also offers a free service on the 
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site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

July 1, 2002.



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                               THIS TITLE

    Title 31--Money and Finance: Treasury is composed of two volumes. 
The parts in these volumes are arranged in the following order: parts 0 
to 199, and part 200 to end. The contents of these volumes represent all 
of the current regulations codified under this title of the CFR as of 
July 1, 2000.

    A redesignation table for subtitle A--Office of the Secretary of the 
Treasury appears in the Finding Aids section of the first volume.

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

[[Page 1]]



                  TITLE 31--MONEY AND FINANCE: TREASURY




                  (This book contains part 200 to end)

  --------------------------------------------------------------------
                                                                    Part

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

chapter ii--Fiscal Service, Department of the Treasury......         202

chapter iv--Secret Service, Department of the Treasury......         401

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 International Investment, Department 
  of the Treasury...........................................         800

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

Cross References: Other regulations issued by the Department of the 
  Treasury appear in title 12, chapter I; title 19, chapter I; title 26, 
  chapter I; title 27, chapter I; title 31, chapter I; and title 48, 
  chapter 10.

[[Page 3]]

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

[[Page 5]]



         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY




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

               SUBCHAPTER A--FINANCIAL MANAGEMENT SERVICE
Part                                                                Page
202             Depositaries and financial agents of the 
                    Federal Government......................           9
203             Payment of Federal taxes and the Treasury 
                    Tax and Loan Program....................          11
204             [Reserved]

205             Rules and procedures for efficient Federal-
                    State funds transfers...................          23
206             Management of Federal agency receipts, 
                    disbursements, and operation of the Cash 
                    Management Improvements Fund............          39
208             Management of Federal agency disbursements..          45
210             Federal Government participation in the 
                    Automated Clearing House................          50
211             Delivery of checks and warrants to addresses 
                    outside the United States, its 
                    territories and possessions.............          59
215             Withholding of District of Columbia, State, 
                    city and county income or employment 
                    taxes by Federal agencies...............          61
223             Surety companies doing business with the 
                    United States...........................          65
224             Federal process agents of surety companies..          72
225             Acceptance of bonds secured by Government 
                    obligations in lieu of bonds with 
                    sureties................................          74
226             Recognition of insurance covering Treasury 
                    tax and loan depositaries...............          78
235             Issuance of settlement checks for forged 
                    checks drawn on designated depositaries.          80
240             Indorsement and payment of checks drawn on 
                    the United States Treasury..............          81
245             Claims on account of Treasury checks........          89

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248             Issue of substitutes of lost, stolen, 
                    destroyed, mutilated and defaced checks 
                    of the United States drawn on accounts 
                    maintained in depositary banks in 
                    foreign countries or United States 
                    territories or possessions..............          91
250             Payment on account of awards of the Foreign 
                    Claims Settlement Commission of the 
                    United States...........................          93
256             Payments under judgments and private relief 
                    acts....................................          96
270             Availability of records.....................          96
281             Foreign exchange operations.................          97
285             Debt collection authorities under the Debt 
                    Collection Improvement Act of 1996......         100
                 SUBCHAPTER B--BUREAU OF THE PUBLIC DEBT
306             General regulations governing U.S. 
                    securities..............................         131
308             General regulations governing full-paid 
                    interim certificates....................         159
309             Issue and sale of Treasury bills............         159
312             Federal savings and loan associations and 
                    Federal credit unions as fiscal agents 
                    of the United States....................         163
315             Regulations governing U.S. Savings Bonds, 
                    Series A, B, C, D, E, F, G, H, J, and K, 
                    and U.S. Savings Notes..................         164
316             Offering of United States Savings Bonds, 
                    Series E................................         189
317             Regulations governing agencies for issue of 
                    United States Savings Bonds.............         197
321             Payments by banks and other financial 
                    institutions of United States Savings 
                    Bonds and United States Savings Notes 
                    (Freedom Shares)........................         201
323             Disclosure of records.......................         218
328             Restrictive endorsements of U.S. bearer 
                    securities..............................         220
330             Regulations governing payment under special 
                    endorsement of United States Savings 
                    Bonds and United States Savings Notes 
                    (Freedom Shares)........................         223
332             Offering of United States Savings Bonds, 
                    Series H................................         227
337             Supplemental regulations governing Federal 
                    Housing Administration debentures.......         230
339             Exchange offering of United States Savings 
                    Bonds, Series H.........................         234
340             Regulations governing the sale of Treasury 
                    bonds through competitive bidding.......         236
341             Regulations governing United States 
                    Retirement Plan Bonds...................         239
342             Offering of United States Savings Notes.....         249

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343             Regulations governing the offering of United 
                    States Mortgage Guaranty Insurance 
                    Company Tax and Loss Bonds..............         254
344             U.S. Treasury securities--State and Local 
                    Government Series.......................         256
345             Regulations governing 5 percent Treasury 
                    Certificates of Indebtedness-- R.E.A. 
                    Series..................................         282
346             Regulations governing United States 
                    Individual Retirement Bonds.............         283
351             Offering of United States Savings Bonds, 
                    Series EE...............................         293
352             Offering of United States Savings Bonds, 
                    Series HH...............................         312
353             Regulations governing United States Savings 
                    Bonds, Series EE and HH.................         317
354             Regulations governing book-entry securities 
                    of the Student Loan Marketing 
                    Association (Sallie Mae)................         343
355             Regulations governing fiscal agency checks..         349
356             Sale and issue of marketable book-entry 
                    Treasury bills, notes, and bonds 
                    (Department of the Treasury Circular, 
                    Public Debt Series No. 1-93)............         351
357             Regulations governing book-entry Treasury 
                    bonds, notes and bills (Department of 
                    the Treasury Circular, Public Debt 
                    Series No. 2-86)........................         391
358             Regulations governing book-entry conversion 
                    of bearer corpora and detached bearer 
                    couponsRegulations governing book-entry 
                    conversion of detached bearer coupons 
                    and bearer corpora......................         428
359             Offering of United States Savings Bonds, 
                    Series I................................         431
360             Regulations governing United States Savings 
                    Bonds, Series I.........................         440
361             Claims pursuant to the Government Losses in 
                    Shipment Act............................         458
362             Declaration of valuables under the 
                    Government Losses in Shipment Act.......         461
370             Electronic transactions and funds transfers 
                    relating to United States securities....         462
375             Marketable treasury securities redemption 
                    operations..............................         468
380             Collateral acceptability and valuation......         472
391             Waiver of interest, administrative costs, 
                    and penalties...........................         473

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               SUBCHAPTER A--FINANCIAL MANAGEMENT SERVICE





PART 202--DEPOSITARIES AND FINANCIAL AGENTS OF THE FEDERAL GOVERNMENT\1\ --Table of Contents



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

    \1\ The regulations, which previously appeared in this part, 
governing payment of checks drawn on the United States Treasury now 
appear in revised form in part 240 of this chapter (Department Circular 
21 (Second Revision)).
---------------------------------------------------------------------------

Sec.
202.1  Scope of regulations.
202.2  Designations.
202.3  Authorization.
202.4  Agreement of deposit.
202.5  Previously designated depositaries.
202.6  Collateral security.
202.7  Maintenance of balances within authorizations.

    Authority: 12 U.S.C. 90, 265-266, 391, 1452(d), 1464(k), 1789a, 
2013, 2122 and 3101-3102; 31 U.S.C. 3303 and 3336.



Sec. 202.1  Scope of regulations.

    The regulations in this part govern the designation of Depositaries 
and Financial Agents of the Federal Government (hereinafter referred to 
as depositaries), and their authorization to accept deposits of public 
money and to perform other services as may be required of them. Public 
money includes, but is not limited to, revenue and funds of the United 
States, and any funds the deposit of which is subject to the control or 
regulation of the United States or any of its officers, agents, or 
employees. The designation and authorization of Treasury Tax and Loan 
depositaries for the receipt of deposits representing Federal taxes are 
governed by the regulations in part 203 of this chapter.

[62 FR 45520, Aug. 27, 1997]



Sec. 202.2  Designations.

    (a) Financial institutions of the following classes are designated 
as Depositaries and Financial Agents of the Government if they meet the 
eligibility requirements stated in paragraph (b) of this section:
    (1) Financial institutions insured by the Federal Deposit Insurance 
Corporation.
    (2) Credit unions insured by the National Credit Union 
Administration.
    (3) Banks, savings banks, savings and loan, building and loan, and 
homestead associations, credit unions created under the laws of any 
State, the deposits or accounts of which are insured by a State or 
agency thereof or by a corporation chartered by a State for the sole 
purpose of insuring deposits or accounts of such financial institutions, 
United States branches of foreign banking corporations authorized by the 
State in which they are located to transact commercial banking business, 
and Federal branches of foreign banking corporations, the establishment 
of which has been approved by the Comptroller of the Currency.
    (b) In order to be eligible for designation, a financial institution 
is required to possess, under its charter and the regulations issued by 
its chartering authority, either general or specific authority to 
perform the services outlined in Sec. 202.3(b). A financial institution 
is required also to possess the authority to pledge collateral to secure 
public funds.

[44 FR 53066, Sept. 11, 1979, as amended at 46 FR 28152, May 26, 1981; 
62 FR 45521, Aug. 27, 1997]



Sec. 202.3  Authorization.

    (a) To accept deposits covered by the appropriate Federal or State 
insurer. Every depositary is authorized to accept a deposit of public 
money in an official account, other than an account in the name of the 
United States Treasury, in which the maximum balance does not exceed the 
``Recognized Insurance Coverage.'' ``Recognized Insurance Coverage'' 
means the insurance provided by the Federal Deposit Insurance 
Corporation, the National Credit Union Administration, and by insurance 
organizations specifically qualified by the Secretary of the Treasury.
    (b) To perform other services. (1) The Secretary of the Treasury may 
authorize a depositary to perform other services including, but not 
limited to:

[[Page 10]]

    (i) The maintenance of official accounts in which balances will be 
in excess of the applicable Federal or State insurance coverage;
    (ii) The maintenance of accounts in the name of the United States 
Treasury;
    (iii) The acceptance of deposits for credit of the United States 
Treasury;
    (iv) The furnishing of bank drafts in exchange for collections.
    (2) To obtain authorization to perform services, a depositary must:
    (i) File with the Secretary of the Treasury an appropriate agreement 
and resolution of its board of directors authorizing the agreement (both 
on forms prescribed by the Financial Management Service and available 
from Federal Reserve Banks), and
    (ii) Pledge collateral security as provided for in Sec. 202.6.

[32 FR 14215, Oct. 13, 1967, as amended at 44 FR 53066, Sept. 11, 1979; 
49 FR 47001, Nov. 30, 1984; 62 FR 45521, Aug. 27, 1997]



Sec. 202.4  Agreement of deposit.

    A depositary which accepts a deposit under this part enters into an 
agreement of deposit with the Treasury Department. The terms of this 
agreement include:
    (a) All of the provisions of this part.
    (b) Any instructions issued pursuant to this part by the Treasury or 
by Federal Reserve Banks as Fiscal Agents of the United States or by any 
other Government agency.
    (c) The provisions prescribed in Executive Order 11246, entitled 
``Equal Employment Opportunity,'' as amended by Executive Orders 11375 
and 12086, and regulations issued thereunder at 41 CFR chapter 60, as 
amended.
    (d) The requirements of section 503 of the Rehabilitation Act of 
1973, as amended, and the regulations issued thereunder at 41 CFR part 
60-741, requiring Federal contractors to take affirmative action to 
employ and advance in employment qualified individuals with 
disabilities.
    (e) The requirements of section 503 of the Vietnam Era Veterans' 
Readjustment Assistance Act of 1972, as amended, 38 U.S.C. 4212, 
Executive Order 11701, and the regulations issued thereunder at 41 CFR 
parts 60-250 and 61-250, requiring Federal contractors to take 
affirmative action to employ and advance in employment qualified special 
disabled and Vietnam Era veterans.

[44 FR 53067, Sept. 11, 1979, as amended at 62 FR 45521, Aug. 27, 1997]



Sec. 202.5  Previously designated depositaries.

    A depositary previously designated will, by the acceptance or 
retention of deposits, be presumed to have assented to all the terms and 
provisions of this part and to the retention of collateral security 
theretofore pledged.

[32 FR 14215, Oct. 13, 1967]



Sec. 202.6  Collateral security.

    (a) Requirement. Prior to receiving deposits of public money, a 
depositary authorized to perform services under Sec. 202.3(b) must 
pledge collateral security in the amount required by the Secretary of 
the Treasury.
    (b) Acceptable security. Types and valuations of acceptable 
collateral security are addressed in 31 CFR part 380. For a current list 
of acceptable classes of securities and instruments described in 31 CFR 
part 380 and their valuations, see the Bureau of the Public Debt's web 
site at www.publicdebt.treas.gov.
    (c) Deposits of securities. Unless the Secretary of the Treasury 
provides otherwise, collateral security under this part must be 
deposited with the Federal Reserve Bank or Branch of the district in 
which the depositary is located (depositaries located in Puerto Rico and 
the Virgin Islands will be considered as being located in the New York 
Federal Reserve district), or with a custodian or custodians within the 
United States designated by the Federal Reserve Bank, under terms and 
conditions prescribed by the Federal Reserve Bank. Securities deposited 
with a Federal Reserve Bank must be accompanied by a letter stating 
specifically the purpose for which the securities are being deposited.
    (d) Assignment. A depository that pledges securities which are not 
negotiable without its endorsement or assignment may, in lieu of placing 
its unqualified endorsement on each security, furnish an appropriate 
resolution and irrevocable power of attorney authorizing the Federal 
Reserve Bank to

[[Page 11]]

assign the securities. The resolution and power of attorney shall 
conform to such terms and conditions as the Federal Reserve Banks shall 
prescribe.
    (e) Disposition of principal and interest payments of the pledged 
securities after a depositary is declared insolvent--(1) General. In the 
event of the depositary's insolvency or closure, or in the event of the 
appointment of a receiver, conservator, liquidator, or other similar 
officer to terminate its business, the depositary agrees that all 
principal and interest payments on any security pledged to protect 
public money due as of the date of the insolvency or closure, or 
thereafter becoming due, shall be held separate and apart from any other 
assets and shall constitute a part of the pledged security available to 
satisfy any claim of the United States, including those not arising out 
of the depositary relationship.
    (2) Payment procedures. (i) Subject to the waiver in paragraph 
(e)(2)(iii) of this section, each depositary (including, with respect to 
such depositary, an assignee for the benefit of creditors, a trustee in 
bankruptcy, or a receiver in equity) shall immediately remit each 
payment of principal and/or interest received by it with respect to 
collateral pledged pursuant to this section to the Federal Reserve Bank 
of the district, as fiscal agent of the United States, and in any event 
shall so remit no later than ten days after receipt of such a payment.
    (ii) Subject to the waiver in paragraph (e)(2)(iii) of this section, 
each obligor on a security pledged by a depositary pursuant to this 
section shall make each payment of principal and/or interest with 
respect to such security directly to the Federal Reserve Bank of the 
district, as fiscal agent of the United States.
    (iii) The requirements of paragraphs (e)(2) (i) and (ii) of this 
section are hereby waived for only so long as a pledging depositary 
remains solvent. The foregoing waiver is terminated without further 
action immediately upon the involvency of a pledging depositary or, if 
earlier, upon notice by the Treasury of such termination. For purposes 
of this paragraph, a depositary is insolvent when, voluntarily or by 
action of competent authority, it is closed because of present or 
prospective inability to meet the demands of its depositors or 
shareholders.

[32 FR 14216, Oct. 13, 1967, as amended at 36 FR 6748, Apr. 8, 1971; 36 
FR 17995, Sept. 8, 1971; 39 FR 30832, Aug. 26, 1974; 44 FR 53067, Sept. 
11, 1979; 46 FR 28152, May 26, 1981; 62 FR 45521, Aug. 27, 1997; 65 FR 
55428, Sept. 13, 2000]



Sec. 202.7  Maintenance of balances within authorizations.

    (a) Federal Government agencies shall contact the Department of the 
Treasury, Financial Management Service, before making deposits with a 
financial institution insured by a State or agency thereof or by a 
corporation chartered by a State for the sole purpose of insuring 
deposits or accounts. The contact should be directed to the Cash 
Management Policy and Planning Division, Federal Finance, Financial 
Management Service, Department of the Treasury, Washington, DC 20227.
    (b) Government agencies having control or jurisdiction over public 
money on deposit in accounts with depositaries are responsible for the 
maintenance of balances in such accounts within the limits of the 
authorizations specified by the Secretary of the Treasury.

[44 FR 53067, Sept. 11, 1979, as amended at 49 FR 47001, Nov. 30, 1984; 
62 FR 45521, Aug. 27, 1997]



PART 203--PAYMENT OF FEDERAL TAXES AND THE TREASURY TAX AND LOAN PROGRAM--Table of Contents




                     Subpart A--General Information

Sec.
203.1  Scope.
203.2  Definitions.
203.3  Financial institution eligibility for designation as a Treasury 
          Tax and Loan depositary.
203.4  Designation of financial institutions as Treasury Tax and Loan 
          depositaries.
203.5  Obligations of the depositary.
203.6  Compensation for services.
203.7  Termination of agreement or change of election or option.
203.8  Application of part and procedural instructions.

               Subpart B--Electronic Federal Tax Payments

203.9  Scope of the subpart.

[[Page 12]]

203.10  Enrollment.
203.11  Electronic payment methods.
203.12  Future-day reporting and payment mechanisms.
203.13  Same-day reporting and payment mechanisms.
203.14  Electronic Federal Tax Payment System interest assessments.
203.15  Prohibited debits through the Automated Clearing House.
203.16  Appeal and dispute resolution.

                    Subpart C--Federal Tax Deposits.

203.17  Scope of the subpart.
203.18  Tax deposits using Federal Tax Deposit coupons.
203.19  Note option.
203.20  Remittance option.

 Subpart D--Investment Program and Collateral Security Requirements for 
                   Treasury Tax and Loan Depositaries

203.21  Scope of the subpart.
203.22  Sources of balances.
203.23  Note balance.
203.24  Collateral security requirements.

    Authority: 12 U.S.C. 90, 265-266, 332, 391, 1452(d), 1464(k), 1767, 
1789a, 2013, 2122, and 3102; 26 U.S.C. 6302; 31 U.S.C. 321, 323 and 
3301-3304.

    Source: 63 FR 5650, Feb. 3, 1998, unless otherwise noted.



                     Subpart A--General Information



Sec. 203.1  Scope.

    The regulations in this part govern the processing of Federal tax 
payments by financial institutions and the Federal Reserve Banks (FRB) 
using electronic payment or paper methods; the designation of Treasury 
Tax and Loan (TT&L) depositaries; and the operation of the Department of 
the Treasury's (Treasury) investment program.



Sec. 203.2  Definitions.

    As used in this part:
    (a) Advice of credit means the Treasury form used in the Federal Tax 
Deposit system that is supplied to depositaries to summarize and report 
Federal tax deposits. The current form is Treasury Form 2284. Advice of 
credit information also may be delivered electronically.
    (b) Automated Clearing House (ACH) credit entry means a transaction 
originated by a financial institution in accordance with applicable ACH 
formats and applicable laws, regulations, and procedural instructions.
    (c) Automated Clearing House (ACH) debit entry means a transaction 
originated by a Treasury Financial Agent (TFA), in accordance with 
applicable ACH formats and applicable laws, regulations, and 
instructions.
    (d) Business day means any day on which the FRB of the district is 
open.
    (e) Direct Access transaction means same-day Federal tax payment 
information transmitted by a financial institution directly to the 
Electronic Tax Application at an FRB using the Fedline Taxpayer Deposit 
Application.
    (f) Direct investment means placement of Treasury funds with a 
depositary and a corresponding increase in a depositary's note balance.
    (g) Direct investment means placement of Treasury funds with a 
depositary and a corresponding increase in a depositary's main note 
balance.
    (h) Electronic Tax Application (ETA) means a sub-system of EFTPS 
that receives, processes, and transmits same-day Federal tax payment 
information for taxpayers. ETA activity is comprised of Fedwire value 
transfers, Fedwire non-value transactions, and Direct Access 
transactions.
    (i) Electronic Tax Application (ETA) reference number means the 
unique number assigned to each ETA transaction by an FRB.
    (j) Federal funds rate means the Federal funds rate published weekly 
by the Board of Governors of the Federal Reserve System.
    (k) Federal Reserve account means an account with reserve or 
clearing balances held by a financial institution at an FRB.
    (l) Federal Reserve Bank of the district means the FRB that services 
the geographical area in which the financial institution is located, or 
such other FRB that may be designated in an FRB operating circular.
    (m) Federal Tax Deposit (FTD) means a tax deposit or payment made 
using an FTD coupon.
    (n) Federal Tax Deposit coupon (FTD coupon) means a paper form 
supplied to a taxpayer by the Treasury for use in the FTD system to 
accompany deposits of Federal taxes. The current paper form is Form 
8109.

[[Page 13]]

    (o) Federal Tax Deposit system (FTD system) means the paper-based 
system through which taxpayers remit Federal tax payments by presenting 
an FTD coupon and payment to a depositary or an FRB. The depositary 
prepares an advice of credit summarizing all FTDs.
    (p) Federal taxes means those Federal taxes or other payments 
specified by the Secretary of the Treasury as eligible for payment 
through the procedures prescribed in this part.
    (q) Fedwire means the funds transfer system owned and operated by 
the FRBs.
    (r) Fedwire non-value transaction means the same-day Federal tax 
payment information transmitted by a financial institution to an FRB 
using a Fedwire type 1090 message to authorize a payment.
    (s) Fedwire value transfer means a Federal tax payment made by a 
financial institution using a Fedwire type 1000 message.
    (t) Financial institution means any bank, savings bank, savings and 
loan association, credit union, or similar institution.
    (u) Fiscal Agent means the Federal Reserve acting as agent for the 
Treasury.
    (v) Input Message Accountability Data (IMAD) means a unique number 
assigned to each Fedwire transaction by the financial institution 
sending the transaction to an FRB.
    (w) Main note balance means an open-ended interest-bearing note 
balance maintained at the FRB of the district.
    (x) Note option means that program available to a TT&L depositary 
under which Treasury invests in obligations of the depositary. The 
amount of such investments will be evidenced by interest-bearing note 
balances maintained at the FRB of the district.
    (y) Procedural instructions means the procedures contained in the 
Treasury Financial Manual, Volume IV (IV TFM), other Treasury 
instructions issued through the TFAs, and FRB operating circulars issued 
consistent with this part.
    (z) Recognized insurance coverage means the insurance provided by 
the Federal Deposit Insurance Corporation, the National Credit Union 
Administration, and by insurance organizations specifically qualified by 
the Secretary.
    (aa) Remittance option means that program available to a depositary 
that processes FTD payments, under which the amount of deposits credited 
by the depositary to the TT&L account will be withdrawn by the FRB for 
deposit to the Treasury General Account on the day that the FRB receives 
the advices of credit supporting such deposits.
    (bb) Same-day payment means the following ETA payment options:
    (1) Direct Access transaction;
    (2) Fedwire non-value transaction; and
    (3) Fedwire value transfer.
    (cc) Secretary means the Secretary of the Treasury, or the 
Secretary's delegate.
    (dd) Special direct investment means the placement of Treasury funds 
with a depositary and a corresponding increase in a depositary's main 
note balance, where the investment specifically is identified as a 
``special direct investment'' and may be secured by collateral retained 
in the possession of the depositary pursuant to the terms of 
Sec. 203.24(c)(2)(i).
    (ee) Tax due date means the day on which a tax payment is due to 
Treasury, as determined by statute and Internal Revenue Service (IRS) 
regulations.
    (ff) Term investment option means the program available to financial 
institutions that offers the ability to borrow excess Treasury operating 
funds for a predetermined period of time.
    (gg) Term note balance means an interest-bearing note balance 
maintained at the FRB of the district for a predetermined period of 
time.
    (hh) Transaction trace number means an identifying number assigned 
by the taxpayer's financial institution to each ACH credit transaction.
    (ii) Treasury Financial Agent (TFA) means a financial institution 
designated as an agent of Treasury for processing EFTPS enrollments, 
receiving EFTPS tax payment information, and originating ACH debit 
entries on behalf of Treasury as authorized by the taxpayer.
    (jj) Treasury General Account (TGA) means an account maintained in 
the

[[Page 14]]

name of the United States Treasury at an FRB.
    (kk) Treasury Tax and Loan (TT&L) account means the Treasury account 
maintained by a depositary in which funds are credited by the depositary 
after receiving and collateralizing FTDs.
    (ll) Treasury Tax and Loan depositary (depositary) means a financial 
institution designated as a depositary by the FRB of the district for 
the purpose of maintaining a TT&L account and/or note balance.
    (mm) Treasury Tax and Loan (TT&L) Program means the program for 
collecting Federal taxes and investing the Government's excess operating 
funds.
    (nn) Treasury Tax and Loan (TT&L) rate of interest means the 
interest charged on the main note balance. The TT&L rate of interest is 
the rate prescribed by the Secretary taking into consideration 
prevailing market interest rates. The rate and any rate changes will be 
announced through a TT&L Special Notice to Depositaries and will be 
published in the Federal Register and on a web site maintained by 
Treasury's Financial Management Service at http://www.fms.treas.gov.

[63 FR 5650, Feb. 3, 1998, as amended at 67 FR 11575, Mar. 15, 2002]



Sec. 203.3  Financial institution eligibility for designation as a Treasury Tax and Loan depositary.

    (a) To be designated as a TT&L depositary, a financial institution 
shall be insured as a national banking association, state bank, savings 
bank, savings and loan, building and loan, homestead association, 
Federal home loan bank, credit union, trust company, or a U.S. branch of 
a foreign banking corporation, the establishment of which has been 
approved by the Comptroller of the Currency.
    (b) A financial institution shall possess the authority to pledge 
collateral to secure TT&L account balances and/or a note balance.
    (c) In order to be designated as a TT&L depositary for the purposes 
of processing tax deposits in the FTD system, a financial institution 
shall possess under its charter either general or specific authority 
permitting the maintenance of the TT&L account, the balance of which is 
payable on demand without previous notice of intended withdrawal. In 
addition, note option depositaries shall possess either general or 
specific authority permitting the maintenance of a note balance. In the 
case of note option depositaries maintaining main note balances, the 
authority shall permit the maintenance of a main note balance which is 
payable on demand without previous notice of intended withdrawal.

[63 FR 5650, Feb. 3, 1998, as amended at 67 FR 11576, Mar. 15, 2002]



Sec. 203.4  Designation of financial institutions as Treasury Tax and Loan depositaries.

    (a) Parties to the agreement. To be designated as a TT&L depositary, 
a financial institution shall enter into a depositary agreement with 
Treasury's fiscal agent, the FRB. By entering into this agreement, the 
financial institution agrees to be bound by this part, and procedural 
instructions issued pursuant to this part.
    (b)(1) Application procedures. An eligible financial institution 
seeking designation as a depositary and, thereby, the authority to 
maintain a TT&L account and/or a note balance shall file with the FRB, 
Financial Management Service Form 458, ``Financial Institution Agreement 
and Application for Designation as a TT&L Depositary,'' and Financial 
Management Service Form 459, ``Resolution Authorizing the Financial 
Institution Agreement and Application for Designation as a TT&L 
Depositary,'' certified by its board of directors. Financial Management 
Service Forms 458 and 459 are available upon request from the FRB of the 
district.
    (2) Depositaries processing tax payments in the FTD system are 
required to elect either the remittance or the note option.
    (c) Designation. Each financial institution satisfying the 
eligibility requirements and the application procedures will receive 
from the FRB notification of its specific designation as a TT&L 
depositary. A financial institution is not authorized to maintain a TT&L 
account or note balance until it has been designated as a TT&L 
depositary by the FRB.

[[Page 15]]



Sec. 203.5  Obligations of the depositary.

    A depositary shall:
    (a) Administer a note balance, if not participating in the FTD 
System.
    (b) Administer a TT&L account and, if applicable, a note balance, if 
participating in the FTD System.
    (c) Comply with the requirements of Section 202 of Executive Order 
11246, entitled ``Equal Employment Opportunity'' (3 CFR, 1964-1965 Comp. 
p. 339) as amended by Executive Orders 11375 and 12086 (3 CFR, 1966-1970 
Comp., p. 684; 3 CFR, 1978 Comp. p. 230), and the regulations issued 
thereunder at 41 CFR Chapter 60.
    (d) Comply with the requirements of Section 503 of the 
Rehabilitation Act of 1973, as amended, and the regulations issued 
thereunder at 41 CFR part 60-741, requiring Federal contractors to take 
affirmative action to employ and advance in employment qualified 
individuals with disabilities.
    (e) Comply with the requirements of Section 503 of the Vietnam Era 
Veterans' Readjustment Assistance Act of 1972, as amended, 38 U.S.C. 
4212, Executive Order 11701 (3 CFR 1971-1975 Comp. p. 752), and the 
regulations issued thereunder at 41 CFR parts 60-250 and 61-250, 
requiring Federal contractors to take affirmative action to employ and 
advance in employment qualified special disabled veterans and Vietnam-
era veterans.



Sec. 203.6  Compensation for services.

    Except as provided in the procedural instructions, Treasury will not 
compensate financial institutions for servicing and maintaining the TT&L 
account, or for processing tax payments through the EFTPS or the FTD 
system.



Sec. 203.7  Termination of agreement or change of election or option.

    (a) Termination by Treasury. The Secretary may terminate the 
agreement of a depositary at any time upon notice to that effect to that 
depositary, effective on the date set forth in the notice.
    (b) Termination or change of election or option by the depositary. A 
depositary may terminate its depositary agreement, or change its option 
or election, consistent with this part and the procedural instructions, 
by submitting notice to that effect in writing to the FRB effective at a 
prospective date set forth in the notice.



Sec. 203.8  Application of part and procedural instructions.

    The terms of this part and procedural instructions issued pursuant 
to this part shall be binding on financial institutions that process tax 
payments and/or maintain a note balance under this part. By accepting or 
originating Federal tax payments, the financial institution agrees to be 
bound by this part and by procedural instructions issued pursuant to 
this part.



               Subpart B--Electronic Federal Tax Payments



Sec. 203.9  Scope of the subpart.

    This subpart prescribes the rules by which financial institutions 
shall process Federal tax payment transactions electronically. A 
financial institution does not need to be designated as a TT&L 
depositary in order to process electronic Federal tax payments. In 
addition, a financial institution that does process electronic Federal 
tax payments under this subpart does not thereby become a Federal 
Government depositary and shall not advertise itself as one because of 
that fact.



Sec. 203.10  Enrollment.

    (a) General. Taxpayers shall complete an enrollment process with the 
TFA prior to making their first electronic Federal tax payment.
    (b) Enrollment forms. The TFA shall provide financial institutions 
and taxpayers with enrollment forms upon request. The taxpayer is 
responsible for completing the enrollment form, obtaining the 
verifications required on the form, and returning the enrollment form to 
the TFA.
    (c) Verification. If the taxpayer elects the ACH debit entry method 
of paying taxes, an authorized representative of the financial 
institution shall verify the accuracy of the financial institution 
routing number, taxpayer account number, and taxpayer account type at 
the request of the taxpayer.

[[Page 16]]



Sec. 203.11  Electronic payment methods.

    (a) General. Electronic payment methods for Federal tax payments 
available under this subpart include ACH debit entries, ACH credit 
entries, and same-day payments. Any financial institution that is 
capable of originating and/or receiving transactions for these payment 
methods, by itself or through a correspondent financial institution, may 
do so on behalf of a taxpayer.
    (b) Conditions to making an electronic payment. Nothing contained in 
this part shall affect the authority of financial institutions to enter 
into contracts with their customers regarding the terms and conditions 
for processing payments, provided that such terms and conditions are not 
inconsistent with this subpart and applicable law governing the 
particular transaction type.
    (c) Payment of interest for time value of funds held. Treasury will 
not pay interest on any payments erroneously paid to Treasury and 
subsequently refunded to the financial institution.



Sec. 203.12  Future-day reporting and payment mechanisms.

    (a) General. A financial institution may receive an ACH debit entry, 
originated by the TFA at the direction of the taxpayer; or, a financial 
institution may originate an ACH credit entry, at the direction of the 
taxpayer. Taxpayers will be credited for the actual amount received by 
Treasury.
    (b) ACH debit. A financial institution receiving an ACH debit entry 
originated by the TFA shall, as applicable:
    (1) Timely verify the account number and account type contained in 
an ACH prenotification entry;
    (2) Timely and properly return a prenotification entry that contains 
an invalid account number or account type, or otherwise is erroneous or 
unprocessable;
    (3) Timely and accurately notify the TFA of incorrect information on 
entries received, using a Notification of Change entry; and
    (4) Timely and accurately return an entry not posted, including but 
not limited to, a return or a contested dishonored return for acceptable 
return reasons, as set forth in the procedural instructions.
    (c) ACH credit. A financial institution originating an ACH credit 
entry at the direction of a taxpayer shall:
    (1) At the request of the taxpayer, originate either an ACH 
prenotification containing the taxpayer's identification number or a 
zero dollar ACH entry with the appropriate addenda record. Additional 
format information is contained in the procedural instructions;
    (2) Format the ACH credit entry in the ACH format approved by 
Treasury for Federal tax payments;
    (3) Originate an ACH credit entry by the appropriate deadline, as 
specified by the FRB or Treasury, whichever is earlier, in order to meet 
the tax due date specified by the taxpayer; and
    (4) Provide the taxpayer, upon request, a transaction trace number, 
or some other method to trace the tax payment.
    (d) ACH credit reversals. Reversals may be initiated for a duplicate 
or erroneous file or entry. No advance approval from, or notification 
to, the IRS is required when originating an ACH credit reversal. 
Documentation of reversals shall be made available as set forth in the 
procedural instructions.



Sec. 203.13  Same-day reporting and payment mechanisms.

    (a) General. A financial institution or its authorized correspondent 
may initiate same-day reporting and payment transactions on behalf of 
taxpayers. A same-day payment must be received by the FRB of the 
district by the deadline established by the Treasury in the procedural 
instructions. Taxpayers will be credited for the actual amount received 
by Treasury.
    (b) Fedwire value transfer. To initiate a Fedwire value tax payment, 
the financial institution shall be a Fedwire participant and shall 
comply with the FRB's Fedwire format for tax payments. The taxpayer's 
financial institution shall provide the taxpayer, upon request, the IMAD 
and the ETA reference numbers for a Fedwire value transfer. The 
financial institution may obtain the ETA reference number for Fedwire 
value transfers from its FRB

[[Page 17]]

by supplying the related IMAD number. Fedwire value transfers settle 
immediately to the TGA and thus are not credited to a depositary's main 
note balance.
    (c) Fedwire non-value transaction. By initiating a Fedwire non-value 
transaction, a financial institution authorizes the FRB of the district 
to debit its Federal Reserve account or, for a TT&L depositary, to debit 
the Federal Reserve account of the depositary or its designated 
correspondent financial institution, for the amount of the tax payment 
specified in the transaction. To initiate a Fedwire non-value 
transaction, the financial institution shall be a Fedwire participant 
and shall comply with the FRB's Fedwire format for tax payments. The 
taxpayer's financial institution shall provide the taxpayer, upon 
request, the IMAD and ETA reference numbers for the Fedwire non-value 
transaction. The financial institution may obtain the ETA reference 
number for Fedwire non-value transactions from its FRB by supplying the 
related IMAD number.
    (1) For a note option depositary using a Fedwire non-value 
transaction, the tax payment amount will be credited to the depositary's 
main note balance on the day of the transaction.
    (2) For a remittance option depositary using a Fedwire non-value 
transaction, the tax payment amount will be debited from the Federal 
Reserve account of the depositary or the depositary's designated 
correspondent and credited to the TGA on the day of the transaction.
    (3) For a non-TT&L depositary financial institution using a Fedwire 
non-value transaction, the tax payment amount will be debited from the 
financial institution's Federal Reserve account and credited to the TGA 
on the day of the transaction.
    (d) Direct Access transaction. By initiating a Direct Access 
transaction, a financial institution authorizes the FRB of the district 
to debit its Federal Reserve account or, for a TT&L depositary, to debit 
the Federal Reserve account of the depositary or its designated 
correspondent financial institution for the amount of the tax payment 
specified in the transaction. The taxpayer's financial institution shall 
provide the taxpayer, upon request, the ETA reference number for the 
Direct Access transaction.
    (1) For a note option depositary using a Direct Access transaction, 
the tax payment amount will be credited to the depositary's main note 
balance on the day of the transaction.
    (2) For a remittance option depositary or a non-TT&L depositary 
financial institution using a Direct Access transaction, the tax payment 
amount will be debited from the Federal Reserve account of the financial 
institution or its designated correspondent financial institution, and 
credited to the TGA on the day of the transaction.
    (e) Cancellations and reversals. In addition to cancellations due to 
insufficient funds in the financial institution's Federal Reserve 
account, the FRB may reverse a same-day transaction:
    (1) If the transaction:
    (i) Is originated by a financial institution after the deadline 
established by the Treasury in the procedural instructions;
    (ii) Has an unenrolled taxpayer identification number; or
    (iii) Does not meet the edit and format requirements set forth in 
the procedural instructions; or,
    (2) At the direction of the IRS, for the following reasons:
    (i) Incorrect taxpayer name;
    (ii) Overpayment; or
    (iii) Unidentified payment; or,
    (3) At the request of the financial institution that sent the same-
day transaction, if the request is made prior to the deadline 
established by Treasury in the procedural instructions on the day the 
payment was made.
    (f) Other than as stated in paragraph (e) of this section, Treasury 
is not obligated to reverse all or any part of a payment.

[63 FR 5650, Feb. 3, 1998, as amended at 67 FR 11576, Mar. 15, 2002]



Sec. 203.14  Electronic Federal Tax Payment System interest assessments.

    (a) Circumstances subject to interest assessments. Treasury may 
assess interest on a financial institution in instances where a taxpayer 
that failed to meet a tax due date proves to the IRS that the delivery 
of tax payment instructions to

[[Page 18]]

the financial institution was timely and that the taxpayer satisfied the 
conditions imposed by the financial institution pursuant to 
Sec. 203.11(b). Treasury also may assess interest where a financial 
institution failed to respond to an ACH prenotification entry on an ACH 
debit as required in Sec. 203.12(b) or failed to originate an ACH 
prenotification or zero dollar entry on an ACH credit as described in 
Sec. 203.12(c) which then resulted in a late payment.
    (b) Calculation of interest assessment. Any interest assessed under 
this section will be at the TT&L rate. The interest will be assessed 
from the day the taxpayer specified that its payment should settle to 
the Treasury until the receipt of the payment by Treasury, subject to 
the following limitations: For ACH debit transactions, interest will be 
limited to no more than seven calendar days; for ACH credit and same-day 
transactions, interest will be limited to no more than 45 calendar days. 
The limitation of liability in this paragraph does not apply to any 
interest assessment in which there is an indication of fraud, the 
presentation of a false claim, or misrepresentation or embezzlement on 
the part of the financial institution or any employee or agent of the 
financial institution.
    (c) Authorization to assess interest. A financial institution that 
processes Federal tax payments made by electronic payment methods under 
this subpart is deemed to authorize the FRB to debit its Federal Reserve 
account or the account of its designated correspondent financial 
institution for any interest assessed under this section. Upon the 
direction of Treasury, the FRB shall debit the Federal Reserve account 
of the financial institution or the account of its designated 
correspondent financial institution for the amount of the assessed 
interest.
    (d) Circumstances not subject to the assessment of interest. (1) 
Treasury will not assess interest on a taxpayer's financial institution 
if a taxpayer fails to meet a tax due date because the taxpayer has not 
satisfied conditions imposed by the financial institution pursuant to 
Sec. 203.11(b) and the financial institution has not contributed to the 
delay. The burden is on the financial institution to establish, pursuant 
to the procedures in Sec. 203.16, that the taxpayer has not satisfied 
the conditions and that the financial institution has not contributed to 
the delay.
    (2) Treasury will not assess interest on a financial institution if 
the delay causing the interest assessment is due to the FRB or the TFA 
and the financial institution did not contribute to the delay. The 
burden is on the financial institution to establish, pursuant to the 
procedures in Sec. 203.16, that it did not cause or contribute to the 
delay.



Sec. 203.15  Prohibited debits through the Automated Clearing House.

    (a) General. The Treasury has instituted operational safeguards to 
scrutinize all entries that remove funds from the TGA. In the event 
funds are removed from the TGA without authority, this section sets 
forth the liability of financial institutions originating such entries. 
Accordingly, a financial institution shall not originate an ACH 
transaction to debit the TGA without the prior written permission of 
Treasury. Unauthorized entries under this section do not include 
reversal entries of previously initiated ACH credits authorized in 
Sec. 203.12(d).
    (b) Liability. A financial institution that originates an 
unauthorized ACH entry that debits the TGA shall be liable to Treasury 
for the amount of the transaction and shall be liable for interest 
charges as specified in paragraph (d) of this section.
    (c) Authorization to recover principal and assess interest charge. 
By initiating unauthorized debits to the TGA through the ACH, a 
financial institution is deemed to authorize the FRB to debit its 
Federal Reserve account or the account of its designated correspondent 
financial institution for any principal and, if applicable, an interest 
charge assessed by Treasury under this section.
    (d) Interest charge calculation. The interest charge shall be at a 
rate equal to the Federal funds rate plus two percent. The interest 
charge shall be assessed for each calendar day from the day the TGA was 
debited to the day the TGA is recredited with the full amount of 
principal due.

[[Page 19]]



Sec. 203.16  Appeal and dispute resolution.

    (a) Contest. A financial institution may contest any interest 
assessed under Sec. 203.14, any principal or interest assessed under 
Sec. 203.15, or any late fees assessed under Sec. 203.20. The financial 
institution shall submit information supporting its position and the 
relief sought. The information must be received, in writing, by the 
Treasury officer or fiscal agent identified in the procedural 
instructions, no later than 90 calendar days after the date the FRB 
debits the reserve account of the financial institution under 
Secs. 203.14, 203.15, or 203.20. The Treasury officer or fiscal agent 
will: uphold the assessment, or reverse the assessment, or modify the 
assessment, or mandate other action.
    (b) Appeal. The financial institution may appeal the decision to 
Treasury as set forth in the procedural instructions. No further 
administrative review of the Treasury's decision is available under this 
Part.
    (c) Recoveries. In the event of an over or under recovery of either 
interest, principal, or late fees, Treasury will instruct the FRB to 
credit or debit the Federal Reserve account of the financial institution 
or its designated correspondent financial institution, as appropriate.



                     Subpart C--Federal Tax Deposits



Sec. 203.17  Scope of the subpart.

    This subpart applies to all depositaries that accept FTD coupons and 
governs the acceptance and processing of those coupons.



Sec. 203.18  Tax deposits using Federal Tax Deposit coupons.

    (a) FTD coupons. A depositary that accepts FTD coupons, through any 
of its offices that accept demand and/or savings deposits, shall:
    (1) Accept from a taxpayer, cash, a postal money order drawn to the 
order of the depositary, or a check or draft drawn on and to the order 
of the depositary, covering an amount to be deposited as Federal taxes 
when accompanied by an FTD coupon on which the amount of the deposit has 
been properly entered in the space provided. A depositary may accept, at 
its discretion, a check drawn on another financial institution, but it 
does so at its option and absorbs for its own account any float and 
other costs involved.
    (2) Issue a counter receipt when requested to do so by a taxpayer 
that makes an FTD deposit over the counter.
    (3) Place a stamp impression on the face of each FTD coupon in the 
space provided. The stamp shall reflect the date on which the tax 
deposit was received and the name and location of the depositary. The 
timeliness of the tax payment will be determined by reference to the 
date stamped by the depositary on the FTD coupon.
    (4) Credit, on the date of receipt, all FTD deposits to the TT&L 
account and administer that account pursuant to the provisions of this 
part.
    (5) Forward, each day, to the IRS Center servicing the geographical 
area in which the depositary is located, the FTD coupons for all FTD 
deposits received that day. The FTD coupons shall be accompanied by an 
advice of credit reflecting the total amount of all FTD coupons.
    (6) Establish an adequate record of all FTD deposits prior to 
transmittal to the IRS Center so that the depositary will be able to 
identify deposits in the event tax deposit coupons are lost in shipment. 
For tracking purposes, a record shall be made of each FTD deposit 
showing, at a minimum, the date of deposit, the taxpayer identification 
number, and the amount of the deposit. The depositary's copy of the 
advice of credit may be used to provide the necessary information if 
individual deposits are listed separately, showing date, taxpayer 
identification number, and amount.
    (7) Deliver its advices of credit to the FRB by the cutoff hour 
designated by the FRB for receipt of advices.
    (8) Not accept compensation from taxpayers for accepting FTDs and 
handling them as required by this section.
    (b) FTD deposits with Federal Reserve Banks. An FRB shall:
    (1) Accept an FTD directly from a taxpayer when such tax deposit is:
    (i) Mailed or delivered by a taxpayer; and

[[Page 20]]

    (ii) Provided in the form of cash or a check or postal money order 
payable to the order of that FRB; and,
    (iii) Accompanied by an FTD coupon on which the amount of the tax 
deposit has been properly entered in the space provided.
    (2) Issue a counter receipt, when requested to do so by a taxpayer 
that makes an FTD over the counter; and,
    (3) Place, in the space provided on the face of each FTD coupon 
accepted directly from a taxpayer, a stamp impression reflecting the 
name of the FRB and the date on which the tax deposit will be credited 
to the TGA. Timeliness of the Federal tax payment will be determined by 
this date. However, if a deposit is mailed to an FRB, it shall be 
subject to the ``Timely mailing treated as timely filing and paying'' 
clause of the Internal Revenue Code, 26 U.S.C. 7502; and,
    (4) Credit the TGA with the amount of the tax payment;
    (i) On the date the payment is received, if payment is made in cash; 
or,
    (ii) On the date the proceeds of the tax payment are collected, if 
payment is made by postal money order or check.



Sec. 203.19  Note option.

    (a) Late delivery of advices of credit. If an advice of credit does 
not arrive at the FRB before the designated cutoff hour for receipt of 
such advices, the FRB will post the funds to the main note balance as of 
the next business day after the date on the advice of credit. This is 
the date on which funds will begin to earn interest for Treasury.
    (b) Transfer of funds from TT&L account to the main note balance. 
For a depositary selecting the note option, funds equivalent to the 
amount of deposits credited by a depositary to the TT&L account shall be 
withdrawn by the depositary and credited to the main note balance on the 
business day following the receipt of the tax payment.

[67 FR 11576, Mar. 15, 2002]



Sec. 203.20  Remittance option.

    (a) FTD late fee. If an advice of credit does not arrive at the FRB 
before the designated cutoff hour for receipt of such advices, an FTD 
late fee in the form of interest at the TT&L rate will be assessed for 
each day's delay in receipt of such advice. Upon the direction of 
Treasury, the FRB shall debit the Federal Reserve account of the 
financial institution or the account of its designated correspondent 
financial institution for the amount of the late fee.
    (b) Withdrawals. For a depositary selecting the Remittance Option, 
the amount of deposits credited by a depositary to the TT&L account will 
be withdrawn upon receipt by the FRB of the advices of credit. The FRB 
will charge the depositary's Federal Reserve account or the account of 
the depositary's designated correspondent financial institution.



 Subpart D--Investment Program and Collateral Security Requirements for 
                   Treasury Tax and Loan Depositaries



Sec. 203.21  Scope of the subpart.

    This subpart provides rules for TT&L depositaries on crediting main 
note balances under the various payment methods; debiting main note 
balances; maintaining term note balances; and pledging collateral 
security.

[67 FR 11576, Mar. 15, 2002]



Sec. 203.22  Sources of balances.

    Depositaries electing to participate in the investment program can 
receive Treasury's investments in obligations of the depositary from the 
following sources:
    (a) FTDs that have been credited to the TT&L account pursuant to 
subpart C of this part;
    (b) EFTPS ACH credit and debit transactions, Fedwire non-value 
transactions, and Direct Access transactions pursuant to subpart B of 
this part;
    (c) Direct investments and special direct investments pursuant to 
subpart D of this part; and
    (d) Other excess Treasury operating funds.

[63 FR 5650, Feb. 3, 1998, as amended at 67 FR 11576, Mar. 15, 2002]

[[Page 21]]



Sec. 203.23  Note balance.

    (a) Additions. Treasury will invest funds in obligations of 
depositaries selecting the note option. Such obligations shall be in the 
form of open-ended, interest-bearing notes; and additions and reductions 
will be reflected on the books of the FRB of the district.
    (1) FTD system. A depositary processing tax deposits using the FTD 
system and electing the note option shall debit the TT&L account and 
credit its main note balance as stated in Sec. 203.19(b).
    (2) EFTPS--(i) ACH debit and ACH credit. A note option depositary 
processing EFTPS ACH debit entries and/or ACH credit entries shall 
credit its main note balance for the value of the transactions on the 
date that an exchange of funds is reflected on the books of the Federal 
Reserve Bank of the district. Financial institutions may refer to the 
procedural instructions for information on how to ascertain the amount 
of the credit to the main note balance.
    (ii) Fedwire non-value and Direct Access. A note option depositary 
processing Fedwire non-value and/or Direct Access transactions pursuant 
to subpart B of this part shall credit its main note balance and debit 
its customer's account for the value of the transactions on the date ETA 
receives and processes the transactions.
    (b) Other additions. Other funds from Treasury may be offered from 
time to time to certain note option depositaries through direct 
investments, special direct investments, or other investment programs.
    (c) Main note balance withdrawals. The amount of the main note 
balance shall be payable on demand without prior notice. Calls for 
payment on the note will be by direction of the Secretary through the 
FRBs. On behalf of Treasury, the FRB shall charge the reserve account of 
the depositary or the depositary's designated correspondent on the day 
specified in the call for payment.
    (d) Interest. A main note balance shall bear interest at the TT&L 
rate. Such interest is payable by a charge to the Federal Reserve 
account of the depositary or its designated correspondent in the manner 
prescribed in the procedural instructions.
    (e) Maximum balance--(1) Note option depositaries. A depositary 
selecting the note option shall establish a maximum for its main note 
balance by providing notice to that effect in writing to the FRB of the 
district. The maximum balance is the amount of funds for which a main 
note option depositary is willing to provide collateral in accordance 
with Sec. 203.24(c)(1). The depositary shall provide the advance notice 
required in the procedural instructions before reducing the established 
maximum balance unless it is a reduction resulting from a collateral re-
evaluation as determined by the depositary's FRB. That portion of any 
advice of credit or EFTPS tax payment, which, when posted at the FRB, 
would cause the main note balance to exceed the maximum balance amount 
specified by the depositary, will be withdrawn by the FRB that day.
    (2) Direct investment depositaries. A main note option depositary 
that participates in direct investment shall set a maximum for its main 
note balance for direct investment purposes which is higher than its 
peak balance normally generated by the depositary's advices of credit 
and EFTPS tax payment inflow. The direct investment note option 
depositary shall provide the advance notice required in the procedural 
instructions before reducing the established maximum balance.
    (3) Special direct investment depositaries. Special direct 
investments, when credited to the main note balance, shall not be 
considered in setting the amount of the maximum balance or in 
determining the amounts to be withdrawn where a depositary's maximum 
balance is exceeded.
    (f) Term investment option. Treasury may, from time to time, invest 
excess operating funds in obligations of depositaries selecting the term 
investment option. Such obligations shall be in the form of interest-
bearing notes payable upon a predetermined period of time not to exceed 
90 days. Such notes shall bear interest at a rate prescribed by the 
Secretary by auction or otherwise taking into consideration prevailing 
market interest rates.

[63 FR 5650, Feb. 3, 1998, as amended at 67 FR 11576, Mar. 15, 2002]

[[Page 22]]



Sec. 203.24  Collateral security requirements.

    Financial institutions that process EFTPS tax payments, but are not 
TT&L depositaries, have no collateral requirements under this part. 
Financial institutions that are note option depositaries or remittance 
option depositaries have collateral security requirements, as follows:
    (a) Note option--main note balance--(1) FTD deposits and EFTPS tax 
payments. A depositary shall pledge collateral security in accordance 
with the requirements of paragraphs (d)(1), (e), and (f) of this section 
in an amount that is sufficient to cover the pre-established maximum 
balance for the main note balance, and, if applicable, the closing 
balance in the TT&L account which exceeds recognized insurance coverage. 
Depositaries shall pledge collateral for the full amount of the maximum 
balance at the time the maximum balance is established. If the 
depositary maintains a TT&L account, the depositary shall pledge 
collateral security before crediting deposits to the TT&L account.
    (2) Direct investments. A note option depositary that participates 
in direct investment is not required to pledge collateral continuously 
in the amount of the pre-established maximum balance. However, each note 
option depositary participating in direct investment shall pledge, no 
later than the day the direct investment is placed, the additional 
collateral in accordance with paragraphs (d)(1), (e), and (f) of this 
section to cover the total main note balance including those funds 
received through direct investment. If a direct investment depositary 
has a history of frequent collateral deficiencies, it shall fully 
collateralize its maximum balance at all times.
    (3) Special direct investments. Before special direct investments 
are credited to a depositary's main note balance, the note option 
depositary shall pledge collateral security, in accordance with the 
requirements of paragraphs (d)(2) and (f) of this section, to cover 100 
percent of the amount of the special direct investments to be received.
    (b) Note option--term note balance. Each note option depositary 
participating in the term investment program shall pledge, prior to the 
time the term investment is placed, collateral in accordance with 
paragraphs (d) (1), (e), and (f) of this section sufficient to cover the 
total term note balance.
    (c) Remittance option. Prior to crediting FTD deposits to the TT&L 
account, a remittance option depositary shall pledge collateral security 
in accordance with the requirements of paragraph (c)(1), (d), and (e) of 
this section in an amount which is sufficient to cover the balance in 
the TT&L account at the close of business each day, less recognized 
insurance coverage.
    (d) Deposits of securities. (1) Collateral security required under 
paragraphs (a)(1), (2), (b), and (c) of this section shall be deposited 
with the FRB of the district, or, where appropriate, with a custodian or 
custodians within the United States designated by the FRB, under terms 
and conditions prescribed by the FRB.
    (2)(i) Collateral security required under paragraph (a)(3) of this 
section shall be pledged under a written security agreement on a form 
provided by the FRB of the district. The collateral security pledged to 
satisfy the requirements of paragraph (a)(3) of this section may remain 
in the pledging depositary's possession and the fact that it has been 
pledged shall be evidenced by advices of custody to be incorporated by 
reference in the written security agreement. The written security 
agreement and all advices of custody covering collateral security 
pledged under that agreement shall be provided by the depositary to the 
FRB of the district. Collateral security pledged under the agreement 
shall not be substituted for or released without the advance approval of 
the FRB of the district, and any collateral security subject to the 
security agreement shall remain so subject until an approved 
substitution is made. No substitution or release shall be approved until 
an advice of custody containing the description required by the written 
security agreement is received by the FRB of the district.
    (ii) Treasury's security interest in collateral security pledged by 
a depositary in accordance with paragraph (c)(2)(i) of this section to 
secure special direct investments is perfected without

[[Page 23]]

Treasury taking possession of the collateral security for a period not 
to exceed 21 calendar days from the day of the depositary's receipt of 
the special direct investment.
    (e) Acceptable securities. Types and valuations of acceptable 
collateral security are addressed in 31 CFR part 380. For a current list 
of acceptable classes of securities and instruments described in 31 CFR 
part 380 and their valuations, see the Bureau of the Public Debt's web 
site at www.publicdebt.treas.gov.
    (f) Assignment of securities. A TT&L depositary that pledges 
acceptable securities which are not negotiable without its endorsement 
or assignment may furnish, in lieu of placing its unqualified 
endorsement on each security, an appropriate resolution and irrevocable 
power of attorney authorizing the FRB to assign the securities. The 
resolution and power of attorney shall conform to such terms and 
conditions as the FRB shall prescribe.
    (g) Effecting payments of principal and interest on securities 
pledged as collateral--(1) General. If the depositary fails to pay, when 
due, the whole or any part of the funds received by it for credit to the 
TT&L account, and/or if applicable, its note balance; or otherwise 
violates or fails to perform any of the terms of this part, or fails to 
pay when due amounts owed to the United States or the United States 
Treasury; or if the depositary is closed for business by regulatory 
action or by proper corporate action, or in the event that a receiver, 
conservator, liquidator or any other officer is appointed; then the 
Treasury, without notice or demand, may sell, or otherwise collect the 
proceeds of all or part of the collateral, including additions and 
substitutions; and apply the proceeds, to satisfy any claims of the 
United States against the depositary. All principal and interest 
payments on any security pledged to protect the note balance (if 
applicable) and/or the TT&L account (if applicable), due as of the date 
of the insolvency or closure, or thereafter becoming due, shall be held 
separate and apart from any other assets and shall constitute a part of 
the pledged security available to satisfy any claim of the United 
States.
    (2) Payment procedures. (i) Subject to the waiver in paragraph 
(f)(2)(iii) of this section, each depositary (including, with respect to 
such depositary, an assignee for the benefit of creditors, a trustee in 
bankruptcy, or a receiver in equity) shall immediately remit each 
payment of principal and/or interest received by it with respect to 
collateral pledged pursuant to this section to the FRB of the district, 
as fiscal agent of the United States, and in any event shall so remit no 
later than 10 days after receipt of such a payment.
    (ii) Subject to the waiver in paragraph (f)(2)(iii) of this section, 
each obligor on a security pledged by a depositary pursuant to this 
section, upon notification that the Treasury is entitled to any payment 
associated with that pledged security, shall make each payment of 
principal and/or interest due with respect to such security directly to 
the FRB of the district, as fiscal agent of the United States.
    (iii) The requirements of paragraphs (f)(2)(i) and (ii) of this 
section are hereby waived for only so long as a pledging depositary 
avoids both termination from the program under Sec. 203.7; and also, 
those circumstances identified in paragraph (f)(1) which may lead to the 
collection of the proceeds of collateral or the waiver is otherwise 
terminated by Treasury.

[63 FR 5650, Feb. 3, 1998, as amended at 65 FR 55429, Sept. 13, 2000; 67 
FR 11577, Mar. 15, 2002]

                           PART 204 [RESERVED]



PART 205--RULES AND PROCEDURES FOR EFFICIENT FEDERAL-STATE FUNDS TRANSFERS--Table of Contents




Sec.
205.1  What Federal assistance programs are covered by this part?
205.2  What definitions apply to this part?

Subpart A--Rules Applicable to Federal Assistance Programs Included in a 
                        Treasury-State Agreement

205.3  What Federal assistance programs are subject to this subpart A?
205.4  Are there any circumstances where a Federal assistance program 
          that meets the criteria of Sec. 205.3 would not be subject to 
          this subpart A?
205.5  What are the thresholds for major Federal assistance programs?
205.6  What is a Treasury-State agreement?

[[Page 24]]

205.7  Can a Treasury-State agreement be amended?
205.8  What if there is no Treasury-State agreement in effect?
205.9  What is included in a Treasury-State agreement?
205.10  How do you document funding techniques?
205.11  What requirements apply to funding techniques?
205.12  What funding techniques may be used?
205.13  How do you determine when State or Federal interest liability 
          accrues?
205.14  When does Federal interest liability accrue?
205.15  When does State interest liability accrue?
205.16  What special rules apply to Federal assistance programs and 
          projects funded by the Federal Highway Trust Fund?
205.17  Are funds transfers delayed by automated payment systems 
          restrictions based on the size and timing of the drawdown 
          request subject to this part?
205.18  Are administrative costs subject to this part?
205.19  How is interest calculated?
205.20  What is a clearance pattern?
205.21  When may clearance patterns be used?
205.22  How are accurate clearance patterns maintained?
205.23  What requirements apply to estimates?
205.24  How are accurate estimates maintained?
205.25  How does this part apply to certain Federal assistance programs 
          or funds?
205.26  What are the requirements for preparing Annual Reports?
205.27  How are Interest Calculation Costs calculated?
205.28  How are interest payments exchanged?
205.29  What are the State oversight and compliance responsibilities?
205.30  What are the Federal oversight and compliance responsibilities?
205.31  How does a State or Federal Program Agency appeal a 
          determination made by us and resolve disputes?

Subpart B--Rules Applicable to Federal Assistance Programs Not Included 
                      in a Treasury-State Agreement

205.32  What Federal assistance programs are subject to this subpart B?
205.33  How are funds transfers processed?
205.34  What are the Federal oversight and compliance responsibilities?
205.35  What is the result of Federal Program Agency or State non-
          compliance?

                          Subpart C [Reserved]

      

    Authority: 5 U.S.C. 301; 31 U.S.C. 321, 3332, 3335, 6501, 6503.

    Source: 67 FR 31885, May 10, 2002, unless otherwise noted.



Sec. 205.1  What Federal assistance programs are covered by this part?

    (a) This part prescribes rules for transferring funds between the 
Federal government and States for Federal assistance programs. This part 
applies to:
    (1) All States as defined in Sec. 205.2; and
    (2) All Federal program agencies, except the Tennessee Valley 
Authority (TVA) and its Federal assistance programs.
    (b) Only programs listed in the Catalog of Federal Domestic 
Assistance, as established by Chapter 61 of Title 31, United States Code 
(U.S.C) are covered by this part.
    (c) This part does not apply to:
    (1) Payments made to States acting as vendors on Federal contracts, 
which are subject to the Prompt Payment Act of 1982, as amended, 31 
U.S.C. 3901 et seq., 5 CFR Part 1315, and 48 CFR Part 32; or
    (2) Direct loans from the Federal government to States.



Sec. 205.2  What definitions apply to this part?

    For purposes of this part:
    Administrative costs means expenses incurred by a State associated 
with managing a Federal assistance program. This term includes indirect 
costs.
    Auditable means records must be retained to allow for calculations 
outlined in the Treasury-State agreements to be reviewed and replicated 
for compliance purposes. States must maintain these records to be 
readily available, fully documented, and verifiable.
    Authorized State official means a person with the authority under 
the laws of a State to make commitments on behalf of the State for the 
purposes of this part, or that person's official designee as certified 
in writing.
    Business day means a day when Federal Reserve Banks are open.
    Catalog of Federal Domestic Assistance (CFDA) means the government-
wide

[[Page 25]]

list of Federal assistance programs, projects, services, and activities 
which provide assistance or benefits to the American public. The listing 
includes financial and non-financial Federal assistance programs 
administered by agencies of the Federal government.
    Clearance pattern means a projection showing the daily amount 
subtracted from a State's bank account each day after the State makes a 
disbursement. For example, a State mailing out benefit checks may 
project that the percentage of checks cashed each day will be 0% for the 
first day, 10% for the second day, 80% on the third day, and 10% on the 
fourth day following issuance. Clearance patterns are used to schedule 
the transfer of funds with various funding techniques and to support 
interest calculations.
    Compensating balance means funds maintained in State bank accounts 
and/or State Treasurer bank accounts to offset the costs of bank 
services.
    Current project cost means a cost for which the State has recorded a 
liability on or after the day that the State last requested funds for 
the project.
    Day means a calendar day unless otherwise specified.
    Default procedures means efficient cash management practices that we 
prescribe for Federal funds transfers to a State if a Treasury-State 
agreement is not in place.
    Disburse means to issue a check or initiate an electronic funds 
transfer payment, or to provide access to benefits through an electronic 
benefits transfer.
    Discretionary grant project means a project for which a Federal 
Program Agency is authorized by law to exercise judgment in awarding a 
grant and in selecting a grantee, generally through a competitive 
process.
    Dollar-weighted average day of clearance means the day when, on a 
cumulative basis, 50 percent of funds have been paid out. To calculate 
the dollar-weighted average day of clearance for a clearance pattern:
    (1) For each day, multiply the percentage of dollars paid out that 
day by the number of days that have elapsed since the payments were 
issued. For example, on the first day payments were issued, multiply the 
percentage of dollars paid out on that day by zero, since zero days have 
elapsed. On the day after payments were issued, multiply the percentage 
of dollars paid out on that day by one, since one day has elapsed; and 
so forth.
    (2) Total the results from paragraph (1) of this definition. Round 
to the nearest whole number. This is the dollar-weighted average day of 
clearance.
    Draw down (verb) means a process in which a State requests and 
receives Federal funds.
    Drawdown (noun) means Federal funds requested and received by a 
State.
    Electronic Funds Transfer (EFT) means any transfer of funds, other 
than a transaction originated by cash, check, or similar paper 
instrument, that is initiated through an electronic terminal, telephone, 
computer, or magnetic tape, for the purpose of ordering, instructing, or 
authorizing a financial institution to debit or credit an account.
    Estimate means a projection of the needs of a Federal Assistance 
Program.
    Federal assistance program means a program included in the Catalog 
of Federal Domestic Assistance where funds are transferred from the 
Federal government to a State. Federal assistance programs include 
cooperative agreements, but do not include vendor payments or direct 
loans.
    Federal Program Agency means an executive agency as defined by 31 
U.S.C. 102, except the Tennessee Valley Authority (TVA), that issues and 
administers Federal assistance programs to States or cooperative 
agreements with States.
    Federal-State agreement means an agreement between a State and a 
Federal Program Agency specifying terms and conditions for carrying out 
a Federal assistance program or group of programs. This is different 
than a Treasury-State agreement.
    Financial management service (we or us) means the Bureau of the U.S. 
Department of the Treasury responsible for implementation of this part.
    Fiscal year means the twelve-month period that a State designates as 
its budget year.
    Grant means, for purposes of this part, a funds transfer by the 
Federal

[[Page 26]]

government associated with a Federal assistance program listed in the 
Catalog of Federal Domestic Assistance.
    Indirect cost rate means a formula that identifies the amount of 
indirect costs based on the amount of accrued direct costs. The 
applicable indirect cost rate shall be described in the Treasury-State 
agreement.
    Indirect costs means costs a State incurs that are necessary to the 
operation and performance of its Federal assistance programs, but that 
are not readily identifiable with a particular project or Federal 
assistance program.
    Interest calculation costs means those costs a State incurs in 
performing the actual calculation of interest liabilities, including 
those costs a State incurs in developing and maintaining clearance 
patterns in support of interest calculations.
    Maintenance-of-effort means a requirement that a State spend at 
least a specified amount of State funds for Federal assistance program 
purposes.
    Major Federal assistance program means a Federal assistance program 
which receives Federal funding in excess of the dollar thresholds found 
in Table A to Sec. 205.5.
    Obligational authority means the existence of a definite commitment 
on the part of the Federal government to provide appropriated funds to a 
State to carry out specified programs, whether the commitment is 
executed before or after a State pays out funds for Federal assistance 
program purposes.
    Pay out means to debit the State's bank account.
    Pay out funds for Federal Assistance Program Purposes means, in the 
context of State payments, to debit a State account for the purpose of 
making a payment to:
    (1) A person or entity that is not considered part of the State 
pursuant to the definition of ``State'' in this section; or
    (2) A State entity that provides goods or services for the direct 
benefit or use of the payor State entity or the Federal government to 
further Federal assistance program goals.
    Rebate means funds returned to a State by third parties after a 
State has paid out those funds for Federal assistance program purposes.
    Refund means funds that a State recovers that it previously paid out 
for Federal assistance program purposes. Refunds include rebates 
received from third parties.
    Refund transaction means an entry to the record of a State bank 
account representing a single deposit of refunds. A refund transaction 
may consist of a single check or item, or a bundle of accumulated 
checks.
    Related banking costs means separately identified costs which are 
necessary and customary for maintaining an account in a financial 
institution, whether a commercial account or a State Treasurer account. 
Investment service fees and fees for credit-related services are not 
related banking costs.
    Request for funds means a State's request for funds that the State 
completes and submits in accordance with Federal Program Agency 
guidelines.
    Reverse flow program means a Federal assistance program, such as 
Supplemental Security Income (SSI), for which the Federal government 
makes payments to recipients on behalf of a State.
    Revolving loan fund means a pool of program funds managed by a 
State. States may loan funds from the pool to other entities in support 
of Federal assistance program goals. Investment income is earned on the 
funds that remain in the pool and on loans made from pool funds. A 
Federal Program Agency may require that all income derived from a 
revolving loan fund be used for Federal assistance program purposes.
    Secretary means the Secretary of the United States Department of the 
Treasury. We are the Secretary's representative in all matters 
concerning this part, unless otherwise specified.
    State means a State of the United States, the District of Columbia, 
the Commonwealth of Puerto Rico, the Commonwealth of the Northern 
Mariana Islands, American Samoa, Guam, and the Virgin Islands. It 
includes any agency, instrumentality, or fiscal agent of a State that is 
legally and fiscally dependent on the State Executive, State Treasurer, 
or State Comptroller.

[[Page 27]]

    (1) A State agency or instrumentality is any organization of the 
primary government of the State financial reporting entity, as defined 
by generally accepted accounting principles.
    (2) A fiscal agent of a State is an entity that pays, collects, or 
holds Federal funds on behalf of the State in furtherance of a Federal 
assistance program, excluding private nonprofit community organizations.
    (3) Local governments, Indian Tribal governments, institutions of 
higher education, hospitals, and nonprofit organizations are excluded 
from the definition of State.
    Treasury-State agreement means a document describing the accepted 
funding techniques and methods for calculating interest and identifying 
the Federal assistance programs governed by this subpart A.
    Trust fund for which the Secretary is the trustee means a trust fund 
administered by the Secretary.
    Vendor payment means a funds transfer by a Federal Program Agency to 
a State to compensate the State for acting as a vendor on a Federal 
contract.
    We and Us means Financial Management Service.



Subpart A--Rules Applicable to Federal Assistance Programs Included in a 
                        Treasury-State Agreement



Sec. 205.3  What Federal assistance programs are subject to this subpart A?

    (a) Generally, this subpart prescribes the rules that apply to 
Federal assistance programs which:
    (1) Are listed in the Catalog of Federal Domestic Assistance;
    (2) Meet the funding threshold for a major Federal assistance 
program; and
    (3) Are included in a Treasury-State agreement or default 
procedures.
    (b) Upon a State's request, we will make additional Federal 
assistance programs subject to subpart A by lowering the funding 
threshold in the Treasury-State agreement. All of a State's programs 
that meet this lower threshold would be subject to this subpart A.
    (c) We may make additional Federal assistance programs subject to 
subpart A if a State or Federal Program Agency fails to comply with 
subpart B of this part.



Sec. 205.4  Are there any circumstances where a Federal assistance program that meets the criteria of Sec. 205.3 would not be subject to this subpart A?

    (a) A Federal assistance program that meets or exceeds the threshold 
for major Federal assistance programs in a State is not subject to this 
subpart A until it is included in a Treasury-State agreement or in 
default procedures.
    (b) We and a State may agree to exclude components of a major 
Federal assistance program from interest calculations if the State 
administers the program through several State agencies and meets the 
following requirements:
    (1) The dollar amount of the exempted cash flow does not exceed 5% 
of the State's major Federal assistance program threshold and the total 
amount excluded under a single program by all State agencies 
administering the program does not exceed 10% of that Federal assistance 
program's total expenditures;
    (2) If less than the total amount of Federal assistance program 
funding is subject to interest calculation procedures, the interest 
liabilities should be pro-rated to 100% of the Federal assistance 
program funding;
    (3) A State may not use this exclusion if a Federal assistance 
program is administered by only one State agency; and
    (4) We may request Federal assistance program specific data on 
funding levels to determine exemptions.
    (c) We and a State may exclude a Federal assistance program from 
this subpart A if the Federal assistance program has been discontinued 
since the most recent Single Audit and the remaining funding is below 
the threshold, or if the Federal assistance program is funded by an 
award not limited to one fiscal year and the remaining Federal 
assistance program funding is below the State's threshold.



Sec. 205.5  What are the thresholds for major Federal assistance programs?

    (a) Table A of this section defines major Federal assistance 
programs

[[Page 28]]

based on the dollar amount of an individual Federal assistance program 
and the dollar amount of all Federal assistance being received by a 
State for all Federal assistance programs including non-cash programs. A 
State must locate the appropriate row in Column A based upon the total 
amount of Federal assistance received. In that same row, a State must 
apply the percentage from Column B to the dollar value of all its 
Federal assistance programs to determine the State's threshold for major 
Federal assistance programs. For example, if the total amount received 
by a State for all Federal assistance programs is $50 million, then that 
State's threshold for major Federal assistance programs is 6% of $50 
million or $3 million. A State which receives more than $10 billion 
under Federal assistance programs will have a minimum default threshold 
of $60 million.
    (b) To ensure adequate coverage of all State programs, a State must, 
on an annual basis, compare its program coverage using the percentage 
obtained from Table A to the program coverage which would result using a 
percentage which is half of the percentage obtained from Table A. For 
example, a State receiving $1 billion in Federal Assistance would use 
Table A to learn that its threshold level would be .60 percent of $1 
billion. A State would compare program coverage at .60 percent of $1 
billion to program coverage at .30 percent of $1 billion.
    (c) If the comparison conducted under paragraph (b) of this section 
results in a reduction of program coverage that is greater than 10%, a 
State must lower its threshold, or add programs, until the difference is 
less than or equal to 10%.
    (d) In accordance with Sec. 205.3(b), a State may lower its 
threshold to include additional programs. All of a State's programs that 
meet this lower threshold would be subject to this subpart A.
    (e) Unless specified otherwise, major Federal assistance programs 
must be determined from the most recent Single Audit data available.

                         Table A to Sec.  205.5
------------------------------------------------------------------------
                                             Column B  Major Federal
   Column A  Total amount of Federal       Assistance Program means any
 Assistance for all programs per State:  Federal assistance program that
                                               exceed these levels:
------------------------------------------------------------------------
Between zero and $100 million inclusive  6.00 percent of the total
                                          amount of Federal assistance.
Over $100 million but less than or       0.60 percent of the total
 equal to $10 billion.                    amount of Federal assistance.
Over $10 billion.......................  The greater of 0.30 percent of
                                          the total Federal assistance
                                          of $60 million.
------------------------------------------------------------------------



Sec. 205.6  What is a Treasury-State agreement?

    (a) A Treasury-State agreement documents the accepted funding 
techniques and methods for calculating interest agreed upon by us and a 
State and identifies the Federal assistance programs governed by this 
subpart A. If anything in a Treasury-State agreement is inconsistent 
with this subpart A, that part of the Treasury-State agreement will not 
have any effect and this subpart A will govern.
    (b) A Treasury-State agreement will be effective until terminated 
unless we and a State agree to a specific termination date. We or a 
State may terminate a Treasury-State agreement on 30 days written 
notice.



Sec. 205.7  Can a Treasury-State agreement be amended?

    (a) We or a State may amend a Treasury-State agreement at any time 
if both we and the State agree in writing.
    (b) The effective date of an amendment shall be the date both 
parties agree to the amendment in writing unless otherwise agreed to by 
both parties.
    (c) We and a State must amend a Treasury-State agreement as needed 
to change or clarify its language when the terms of the existing 
agreement are either no longer correct or no longer applicable. A State 
must notify us in writing within 30 days of the time the State becomes 
aware of a change, describing the Federal assistance program change. The 
notification must include a proposed amendment for our review and a 
current list of all programs

[[Page 29]]

included in the Treasury-State agreement. Amendments may address, but 
are not limited to:
    (1) Additions or deletions of Federal assistance programs subject to 
this subpart A;
    (2) Changes in funding techniques; and
    (3) Changes in clearance patterns.
    (d) Additions or deletions to the list of Federal assistance 
programs subject to this subpart A take effect when a Treasury-State 
agreement is amended, unless otherwise agreed to by the parties.
    (e) Federal assistance programs that are to be added to a Treasury-
State agreement are not subject to this subpart A until the Treasury-
State agreement is amended, except when a Federal assistance program 
subject to this subpart A is being replaced by a Federal assistance 
program governed by subpart B of this part, in which case the 
replacement program is immediately subject to this subpart A.
    (f) Notwithstanding any other provision of this section, if no 
changes to the Treasury-State agreement are required, States must notify 
us annually.



Sec. 205.8  What if there is no Treasury-State agreement in effect?

    When a State does not have a Treasury-State agreement in effect, we 
will prescribe default procedures to implement this subpart A. The 
default procedures will prescribe efficient funds transfer procedures 
consistent with State and Federal law and identify the covered Federal 
assistance programs and designated funding techniques. When we and a 
State reach agreement on some but not all Federal assistance programs 
administered by the State, we and the State may enter into a Treasury-
State agreement for all programs on which we are in agreement and we may 
prescribe default procedures governing those programs on which we are 
unable to reach agreement.



Sec. 205.9  What is included in a Treasury-State agreement?

    We will prescribe a uniform format for all Treasury-State 
agreements. A Treasury-State agreement must include, but is not limited 
to, the following:
    (a) State agencies, instrumentalities, and fiscal agents that 
administer the Federal assistance programs subject to this subpart A.
    (b) Federal assistance programs subject to this subpart A, 
consistent with Secs. 205.3 and 205.4. A State must use its most recent 
Single Audit report as a basis for determining the funding thresholds 
for major Federal assistance programs, unless otherwise specified in the 
Treasury-State agreement. A State may use budget or appropriations data 
for a more recent period instead of Single Audit data, if specified in 
the Treasury-State agreement.
    (c) Funding techniques to be applied to Federal assistance programs 
subject to this subpart A.
    (d) Methods the State will use to develop and maintain clearance 
patterns and estimates, consistent with Sec. 205.11. The method must 
include, at a minimum, a clear indication of:
    (1) The data used;
    (2) The sources of the data;
    (3) The development process;
    (4) For estimates, when and how the State will update the estimate 
to reflect the most recent data available;
    (5) For estimates, when and how the State will make adjustments, if 
any, to reconcile the difference between the estimate and the State's 
actual cash needs; and
    (6) Any assumptions, standards, or conventions used in converting 
the data into the clearance pattern or estimate.
    (e) Federal Program Agency provisions requiring reconciliation of 
estimates to actual outlays may be included in a Treasury-State 
agreement. The supporting documentation must be retained by the State 
for three years.
    (f) States must include the results of the clearance pattern process 
in the Treasury-State agreement for programs where the timing of 
drawdowns is based on clearance patterns. For programs where the timing 
of drawdowns is not based on clearance patterns, the results of the 
clearance pattern process may be provided with the annual report 
required under Sec. 205.26. The supporting documentation must be 
retained by the State for three years.

[[Page 30]]

    (g) Methods used by the State and Federal agencies to calculate 
interest liabilities pursuant to this subpart A. The method must 
include, but is not limited to, a clear indication of:
    (1) The data used;
    (2) The sources of the data;
    (3) The calculation process; and
    (4) Any assumptions, standards, or conventions used in converting 
the data into the interest liability amounts.
    (h) Treasury-State agreements must include language describing how a 
State and Federal Program Agency will address a State request for 
supplemental funding. This language must include, but is not limited to, 
the following provisions:
    (1) What constitutes a timely request for supplemental funds for 
Federal assistance program purposes by a State; and
    (2) What constitutes a timely transfer of supplemental funds for 
Federal assistance program purposes from a Federal Program Agency to a 
State.



Sec. 205.10  How do you document funding techniques?

    The Treasury-State agreement must include a concise description for 
each funding technique that a State will use. The description must 
include the following:
    (a) What constitutes a timely request for funds;
    (b) How the State determines the amount of funds to request;
    (c) What procedures are used to project or reconcile estimates with 
actual and immediate cash needs;
    (d) What constitutes the timely receipt of funds; and
    (e) Whether a State or Federal interest liability accrues when the 
funding technique, including any associated procedure for projection or 
reconciliation, is properly applied.



Sec. 205.11  What requirements apply to funding techniques?

    (a) A State and a Federal Program Agency must minimize the time 
elapsing between the transfer of funds from the United States Treasury 
and the State's payout of funds for Federal assistance program purposes, 
whether the transfer occurs before or after the payout of funds.
    (b) A State and a Federal Program Agency must limit the amount of 
funds transferred to the minimum required to meet a State's actual and 
immediate cash needs.
    (c) A State must not draw down funds from its account in the 
Unemployment Trust Fund (UTF) or from a Federal account in the UTF in 
advance of actual immediate cash needs for any purpose including 
maintaining a compensating balance.
    (d) A Federal Program Agency must allow a State to submit requests 
for funds daily. This requirement should not be construed as a change to 
Federal Program Agency guidelines defining a properly completed request 
for funds.
    (e) In accordance with the electronic funds transfer provisions of 
the Debt Collection Improvement Act of 1996 (31 U.S.C. 3332), a Federal 
Program Agency must use electronic funds transfer methods to transfer 
funds to States unless a waiver is available.



Sec. 205.12  What funding techniques may be used?

    (a) We and a State may negotiate the use of mutually agreed upon 
funding techniques. We may deny interest liability if a State does not 
use a mutually agreed upon funding technique. Funding techniques should 
be efficient and minimize the exchange of interest between States and 
Federal agencies.
    (b) We and a State may base our agreement on the sample funding 
techniques listed in paragraphs (b)(1) through (b)(5) of this section, 
or any other technique upon which both parties agree.
    (1) Zero balance accounting means that a Federal Program Agency 
transfers the actual amount of Federal funds to a State that are paid 
out by the State each day.
    (2) Projected clearance means that a Federal Program Agency 
transfers to a State the projected amount of funds that the State pays 
out each day. The projected amount paid out each day is determined by 
applying a clearance pattern to the total amount the State will 
disburse.

[[Page 31]]

    (3) Average clearance means that a Federal Program Agency, on the 
dollar-weighted average day of clearance of a disbursement, transfers to 
a State a lump sum equal to the actual amount of funds that the State is 
paying out. The dollar-weighted average day of clearance is the day 
when, on a cumulative basis, 50 percent of the funds have been paid out. 
The dollar-weighted average day of clearance is calculated from a 
clearance pattern, consistent with Sec. 205.20.
    (4) Cash advance (pre-issuance or post-issuance) funding means that 
a Federal Program Agency transfers the actual amount of Federal funds to 
a State that will be paid out by the State, in a lump sum, not more than 
three business days prior to the day the State issues checks or 
initiates EFT payments.
    (5) Reimbursable funding means that a Federal Program Agency 
transfers Federal funds to a State after that State has already paid out 
the funds for Federal assistance program purposes.



Sec. 205.13  How do you determine when State or Federal interest liability accrues?

    (a) State or Federal interest liability may or may not accrue when 
mutually agreed to funding techniques are applied, depending on the 
terms of the Treasury-State agreement.
    (b) We and a State may agree in a Treasury-State agreement that no 
State or Federal interest liability will accrue for indirect costs or 
indirect allocated costs based on an indirect cost rate. This indirect 
cost must be consistent with OMB Circular A-87 (For availability, see 5 
CFR 1310.3.) and be in accordance with this subpart A. The indirect cost 
rate may be a Statewide indirect cost rate or a public assistance cost 
rate, where appropriate.



Sec. 205.14  When does Federal interest liability accrue?

    (a) Federal interest liabilities may accrue in accordance with the 
following provisions:
    (1) The Federal Program Agency incurs interest liability if a State 
pays out its own funds for Federal assistance program purposes with 
valid obligational authority under Federal law, Federal regulation, or 
Federal-State agreement. A Federal interest liability will accrue from 
the day a State pays out its own funds for Federal assistance program 
purposes to the day Federal funds are credited to a State bank account.
    (2) If a State pays out its own funds for Federal assistance program 
purposes without obligational authority, the Federal Program Agency will 
incur an interest liability if obligational authority subsequently is 
established. However, if the lack of obligational authority is the 
result of the failure of the State to comply with a Federal Program 
Agency requirement established by statute, regulation, or agreement, 
interest liability may be denied. A Federal interest liability will 
accrue from the day a State pays out its own funds for Federal 
assistance program purposes to the day Federal funds are credited to a 
State bank account.
    (3) If a State pays out its own funds prior to the day a Federal 
Program Agency officially notifies the State in writing that a 
discretionary grant project is approved, the Federal Program Agency does 
not incur an interest liability, notwithstanding any other provision of 
this section.
    (4) If a State pays out its own funds prior to the availability of 
Federal funds authorized or appropriated for a future Federal fiscal 
year, the Federal Program Agency does not incur an interest liability, 
notwithstanding any other provision of this section.
    (5) If a State fails to request funds timely as set forth in 
Sec. 205.29, or otherwise fails to apply a funding technique properly, 
we may deny any resulting Federal interest liability, notwithstanding 
any other provision of this section.
    (b) Federal Program Agency programs that have specific payment dates 
set by the Federal Program Agency that create interest liabilities are 
subject to this part.
    (c) States must adhere to Federal Program Agency disbursement 
schedules when requesting funds. Notwithstanding any other provision of 
this section, we may deny a State's claim for Federal interest liability 
for the period prior to a late drawdown request.

[[Page 32]]

States must time their funds drawdown so that it does not create Federal 
interest liability. The drawdown request must allow the Federal Program 
Agency sufficient time to meet its disbursement schedule. If the Federal 
Program Agency does not make a timely payout in accordance with the 
terms of the Treasury-State agreement, a State may submit a claim for 
interest liability.



Sec. 205.15  When does State interest liability accrue?

    (a) General rule. State interest liability may accrue if Federal 
funds are received by a State prior to the day the State pays out the 
funds for Federal assistance program purposes. State interest liability 
accrues from the day Federal funds are credited to a State account to 
the day the State pays out the Federal funds for Federal assistance 
program purposes.
    (b) Refunds. (1) A State incurs interest liability on refunds of 
Federal funds from the day the refund is credited to a State account to 
the day the refund is either paid out for Federal assistance program 
purposes or credited to the Federal government.
    (2) We and a State may agree, in a Treasury-State agreement, that a 
State does not incur an interest liability on refunds in refund 
transactions under $50,000.
    (c) Exception to the general rule. A State does not incur an 
interest liability to the Federal government if a Federal statute 
requires the State to retain or use for Federal assistance program 
purposes the interest earned on Federal funds, notwithstanding any other 
provision in this section.
    (d) Mandatory matching of Federal funds. In programs utilizing 
mandatory matching of Federal funds with State funds, a State must not 
arbitrarily assign its earliest costs to the Federal government. A State 
incurs interest liabilities if it draws Federal funds in advance and/or 
in excess of the required proportion of agreed upon levels of State 
contributions in programs utilizing mandatory matching of Federal funds 
with State funds.



Sec. 205.16  What special rules apply to Federal assistance programs and projects funded by the Federal Highway Trust Fund?

    The following applies to Federal assistance programs and projects 
funded out of the Federal Highway Trust Fund, notwithstanding any other 
provision of this part:
    (a) A State must request funds at least weekly for current project 
costs, or Federal interest liability will not accrue prior to the day a 
State submits a request for funds.
    (b) If a State pays out its own funds in the absence of a project 
agreement or in excess of the Federal obligation in a project agreement, 
the Federal Program Agency will not incur an interest liability.



Sec. 205.17  Are funds transfers delayed by automated payment systems restrictions based on the size and timing of the drawdown request subject to this part?

    Funds transfers delayed due to payment processes that automatically 
reject drawdown requests that fall outside a pre-determined set of 
parameters are subject to this part.



Sec. 205.18  Are administrative costs subject to this part?

    (a) A State and FMS may agree, in a Treasury-State agreement, to the 
following funding conventions for indirect costs and administrative 
costs:
    (1) The State will draw down a prorated amount of administrative 
costs on the date of the State payday. For example, the State would draw 
one-third of its quarterly administrative costs if payroll is monthly, 
or one-sixth of its quarterly administrative costs if payroll is semi-
monthly.
    (2) If an indirect cost rate is applied to a program, the State will 
include a proportionate share of the indirect cost allowance on each 
drawdown by applying the indirect cost rate to the appropriate direct 
costs on each drawdown.
    (3) If costs must be allocated to various programs pursuant to a 
labor distribution or other system under an approved cost allocation 
plan, the State will draw down funds to meet cash outlay requirements 
based on the most recent, certified cost allocations, with

[[Page 33]]

subsequent adjustments made pursuant to the actual allocation of costs.
    (b) Notwithstanding any other provision of this part, no interest 
liabilities will be incurred or calculated for indirect costs and 
administrative costs, provided the funding conventions described in 
paragraph (a) of this section are properly applied.



Sec. 205.19  How is interest calculated?

    (a) A State must calculate Federal interest liabilities and State 
interest liabilities for each Federal assistance program subject to this 
subpart A.
    (b) The interest rate for all interest liabilities for each Federal 
assistance program subject to this subpart A is the annualized rate 
equal to the average equivalent yields of 13-week Treasury Bills 
auctioned during a State's fiscal year. We provide this rate to each 
State.
    (c) A State must calculate and report interest liabilities on the 
basis of its fiscal year. A State must ensure that its interest 
calculations are auditable and retain a record of the calculations.
    (d) As set forth in Sec. 205.9, a Treasury-State agreement must 
include the method a State uses to calculate and document interest 
liabilities.
    (e) A State may use actual data, a clearance pattern, or statistical 
sampling to calculate interest. A clearance pattern used to calculate 
interest must meet the standards of Sec. 205.20. If a State uses 
statistical sampling to calculate interest, the State must sample 
transactions separately for each Federal assistance program subject to 
this subpart A. Each sample must be representative of the pool of 
transactions and be of sufficient size to accurately represent the flow 
of Federal funds under the Federal assistance program, including 
seasonal or other periodic variations.
    (f) For the first year in which a Federal assistance program is 
covered in a Treasury-State agreement, funds transfers that occur prior 
to the first day of the State's fiscal year must not be included in 
interest calculations and are not subject to the interest liability 
provisions of this part.



Sec. 205.20  What is a clearance pattern?

    States use clearance patterns to project when funds are paid out, 
given a known dollar amount and a known date of disbursement. A State 
must ensure that clearance patterns meet the following standards:
    (a) A clearance pattern must be auditable.
    (b) A clearance pattern must accurately represent the flow of 
Federal funds under the Federal assistance programs to which it is 
applied.
    (c) A clearance pattern must include seasonal or other periodic 
variations in clearance activity.
    (d) A clearance pattern must be based on at least three consecutive 
months of disbursement data, unless additional data is required to 
accurately represent the flow of Federal funds.
    (e) If a State uses statistical sampling to develop a clearance 
pattern, the sample size must be sufficient to ensure a 96 percent 
confidence interval no more than plus or minus 0.25 weighted days above 
or below the estimated mean.
    (f) A clearance pattern must extend, at a minimum, until 99 percent 
of the dollars in a disbursement have been paid out for Federal 
assistance program purposes.
    (g) We and a State may agree to other procedures, such as estimates 
to project when funds are paid out when the dollar amount and/or the 
timing of disbursements are not known.



Sec. 205.21  When may clearance patterns be used?

    (a) A State may develop a clearance pattern for:
    (1) An individual Federal assistance program;
    (2) A logical group of Federal assistance programs that have the 
same disbursement method and type of payee;
    (3) A bank account;
    (4) A specific type of payment, such as payroll or vendor payments; 
or
    (5) Anything that is agreed upon by us and a State. If a clearance 
pattern is used for multiple Federal assistance programs, a State must 
apply the clearance pattern separately to each Federal assistance 
program when scheduling funds transfers or calculating interest.

[[Page 34]]

    (b) As set forth in Sec. 205.9, a Treasury-State agreement must 
include the method a State uses to develop and maintain clearance 
patterns.



Sec. 205.22  How are accurate clearance patterns maintained?

    (a) If a State has knowledge, at any time, that a clearance pattern 
no longer reflects a Federal assistance program's actual clearance 
activity, or if a Federal assistance program undergoes operational 
changes that may affect clearance activity, the State must notify us, 
develop a new clearance pattern, and certify that the new pattern 
corresponds to the Federal assistance program's clearance activity. 
Clearance patterns will remain in effect until a new clearance pattern 
is certified.
    (b) An authorized State official must certify that a clearance 
pattern corresponds to the clearance activity of the Federal assistance 
program to which it is applied. An authorized State official must re-
certify the accuracy of a clearance pattern at least every five years. 
If a State develops a clearance pattern for a bank account or a specific 
type of payment, or on another basis, as set forth in Sec. 205.21, we 
may prescribe other requirements for re-certifying the accuracy of the 
clearance pattern. A State can begin to use a new clearance pattern on 
the date the new clearance pattern is certified.



Sec. 205.23  What requirements apply to estimates?

    The following requirements apply when we and a State negotiate a 
mutually agreed upon funds transfer procedure based on an estimate of 
the State's immediate cash needs:
    (a) The State must ensure that the estimate reasonably represents 
the flow of Federal funds under the Federal assistance program or 
program component to which the estimate applies. The estimate must take 
into account seasonal or other periodic variations in activity 
throughout the period for which the Federal funds are available.
    (b) As set forth in Secs. 205.9 and 205.10, a Treasury-State 
agreement must include the method a State uses to develop, maintain, and 
document the estimate.



Sec. 205.24  How are accurate estimates maintained?

    (a) If a State has knowledge that an estimate does not reasonably 
correspond to the State's cash needs for a Federal assistance program or 
program component, or if a Federal assistance program undergoes 
operational changes that may affect cash needs, the State must 
immediately notify us in writing. We and the State will amend the 
funding technique provisions in the Treasury-State agreement or take 
other mutually agreed upon corrective action.
    (b) When estimates are properly updated and applied, a State or 
Federal interest liability may or may not accrue, depending on the terms 
of the Treasury-State agreement.
    (c) We may require a State to justify in writing that it is not 
feasible to use a more efficient basis for determining the amount of 
funds to be transferred under the Federal assistance program or program 
component to which an estimate is applied. We may prescribe requirements 
for certifying the reasonableness of an estimate.



Sec. 205.25  How does this part apply to certain Federal assistance programs or funds?

    (a) Special rules apply to certain Federal assistance programs or 
funds described in this section. To the extent the provisions of this 
section are inconsistent with other provisions of this part, this 
section applies.
    (b) A State's interest liability on funds withdrawn from its account 
in the UTF equals the actual interest earned on such funds less the 
related banking costs. Actual interest earned does not include non-cash 
bank earnings. If funds withdrawn from the State account in the UTF are 
commingled with other funds, a proportionate share of interest earnings 
and banking costs must be allocated to the funds withdrawn from the 
State account. Interest liabilities on funds withdrawn from a Federal 
account in the UTF, except the Federal Unemployment Account, are 
calculated in accordance with Sec. 205.19.
    (c) Supplemental Security Income. (1) Except as provided in 42 
U.S.C. 1382e(d), the Federal government incurs an interest liability 
from the day State

[[Page 35]]

funds are credited to the Federal government's account to the day a 
Federal Program Agency pays out the State funds for Federal assistance 
program purposes. A State incurs an interest liability from the day a 
Federal Program Agency pays out Federal funds for Federal assistance 
program purposes to the day State funds are credited to the Federal 
government's account.
    (2) Interest liability must be calculated on the difference between 
a State's monthly Supplemental Security Income payment and the State's 
actual liability for the month.
    (3) The Federal government will not incur interest liabilities on 
refunds of State funds under the Supplemental Security Income Program.
    (4) Administrative fees charged by the Social Security 
Administration to States under the Supplemental Security Income program 
are not subject to this part.
    (5) Supplemental State payments made in conjunction with 
Supplemental Security Income are not subject to this part.
    (d) Funds collected under the Child Support Enforcement Program. (1) 
Funds collected by States from absent parents pursuant to Title IV-D of 
the Social Security Act are not subject to this part.
    (2) Interest earned by States on undistributed collections must be 
treated as Federal assistance program income under 45 CFR 304.50(b) and 
is not subject to this part.
    (3) Late payment fees collected by States from absent parents are 
not subject to interest liabilities under this part and are not subject 
to this part. However, such fees must be treated as Federal assistance 
program income in accordance with 45 CFR 302.75(b)(6).
    (e) A State that earns interest on Special Supplemental Food Program 
for Women, Infants, and Children rebates is not subject to interest 
liability if the funds earned are used for Federal assistance program 
purposes.
    (f) Revolving Loan Funds. (1) This part applies to any transfer of 
funds from the Federal Program Agency to the State for the Revolving 
Loan Fund.
    (2) This part does not apply to interest a State earns on Revolving 
Loan Funds when Federal Program Agency regulations require that all 
interest earned on invested funds be used for Federal assistance program 
purposes.



Sec. 205.26  What are the requirements for preparing Annual Reports?

    (a) A State must submit to us an Annual Report accounting for State 
and Federal interest liabilities of the State's most recently completed 
fiscal year. Adjustments to the Annual Report must be limited to the two 
State fiscal years prior to the State fiscal year covered by the report. 
The authorized State official must certify the accuracy of a State's 
Annual Report. A signed original of the Annual Report must be received 
by December 31 of the year in which the State's fiscal year ends. We 
will provide copies of Annual Reports to Federal agencies. We will 
prescribe the format of the Annual Report, and may prescribe that the 
Annual Report be submitted by electronic means.
    (b) A State must submit a description and supporting documentation 
for liability claims greater than $5,000. This information must include 
the following:
    (1) The amount of funds requested;
    (2) The date the funds were requested;
    (3) The date the funds were paid out for Federal assistance program 
purposes;
    (4) The date the funds were received by the State; and
    (5) The date of award.
    (c) A State claiming reimbursement of Interest Calculation Costs 
must submit its claim with its Annual Report in accordance with 
Sec. 205.27. An authorized State official must certify the accuracy of a 
State's claim for Interest Calculation Costs.



Sec. 205.27  How are Interest Calculation Costs calculated?

    (a) We will compensate a State annually for the costs of calculating 
interest, including the cost of developing and maintaining clearance 
patterns in support of interest calculations, pursuant to this subpart 
A, subject to the conditions and limitations of this section.
    (b) We may deny an interest calculation cost claim if a State does 
not:

[[Page 36]]

    (1) Have a Treasury-State agreement with us, as set forth in 
Secs. 205.6 through 205.9;
    (2) Submit timely a Treasury-State agreement, as set forth in 
Secs. 205.6 through 205.9;
    (3) Submit timely an updated list of Federal assistance programs 
subject to this subpart A, as set forth in Secs. 205.6 through 205.9;
    (4) Submit timely a claim for Interest Calculation Costs with its 
Annual Report, as set forth in Sec. 205.26; or
    (5) Submit timely its Annual Report, as set forth in Sec. 205.26.
    (c) A State must maintain documentation to substantiate its claim 
for Interest Calculation Costs. We may require a State to provide 
documentation to support its interest calculation cost claims. We will 
review all interest calculation cost claims for reasonableness. If we 
determine that a cost claim is unreasonable, we will not reimburse a 
State for that cost, notwithstanding any other provision of this 
section.
    (d) Eligibility and treatment of Interest Calculation Costs. (1) 
Interest Calculation Costs do not include expenses for normal disbursing 
services, such as processing checks or maintaining records for 
accounting and reconciliation of cash accounts, or expenses for 
upgrading or modernizing accounting systems.
    (2) Interest Calculation Costs in excess of $50,000 in any year are 
not eligible for reimbursement, unless a State can justify to us that 
the State is unable to develop and maintain clearance patterns in 
support of interest calculations, or perform the actual calculation of 
interest, without incurring such costs. Supporting documentation must 
accompany State requests for reimbursement in excess of $50,000.
    (3) Interest Calculation Costs that a State incurs in fiscal years 
prior to its most recently completed Annual Report are not eligible for 
reimbursement.
    (4) A State must not include Interest Calculation Costs in its 
Statewide cost allocation plan, as defined and provided for in OMB 
Circular A-87. All costs incurred by a State to implement this subpart 
A, other than Interest Calculation Costs, are subject to the procedures 
and principles of OMB Circular A-87.
    (e) The payments from the Federal government to individual States to 
offset Interest Calculation Costs incurred are funded from the aggregate 
interest payments States make to the Federal government. The following 
limitations apply:
    (1) We will not reduce or adjust interest liabilities for Federal 
assistance programs funded out of trust funds for which the Secretary is 
trustee. These programs include, but are not limited to, Unemployment 
Insurance Trust Fund (CFDA 17.225); Highway & Planning Trust Fund (CFDA 
20.205); Airport Improvement Trust Fund (CFDA 20.106); Federal Transit 
Capital Improvement Trust Fund (CFDA 20.500); Federal Transit Capital & 
Operating Assistance Trust Fund (CFDA 20.507); and Social Security--
Disability Insurance Trust Fund (CFDA 96.001); and
    (2) The aggregate payments from the Federal government to States to 
offset Interest Calculation Costs will not be greater than the aggregate 
interest payments States make to the Federal government.



Sec. 205.28  How are interest payments exchanged?

    (a) We offset the adjusted total State interest liability and the 
adjusted total Federal interest liability for each State to determine 
the net interest payable to or from each specific State. The payment of 
net interest and any Interest Calculation Costs, as set forth in 
Sec. 205.27, for the most recently completed fiscal year must occur no 
later than March 31. We will notify a State of the final net interest 
liability. A State must submit a claim to receive payment.
    (b) A State may appeal a decision by us on interest liabilities and 
interest calculation cost claims in accordance with Sec. 205.31.
    (c) If a State appeals the amount of interest payable in accordance 
with the provisions of Sec. 205.31, payment must occur by March 31 for 
any portions not subject to the appeal.
    (d) The Federal government will not be liable for interest on any 
payment of interest to a State.

[[Page 37]]



Sec. 205.29  What are the State oversight and compliance responsibilities?

    (a) A State must designate an official representative with the 
statutory or administrative authority to coordinate all interaction with 
the Federal government concerning this subpart A, and must notify us in 
writing of the representative's name and title. A State must notify us 
immediately of any change in the official representative.
    (b) A State must maintain records supporting interest calculations, 
clearance patterns, Interest Calculation Costs, and other functions 
directly pertinent to the implementation and administration of this 
subpart A for audit purposes. A State must retain the records for each 
fiscal year for three years from the date the State submits its Annual 
Report, or until any pending dispute or action involving the records and 
documents is completed, whichever is later. We, the Comptroller General, 
and the Inspector General or other representative of a Federal Program 
Agency must have the right of access to, and may require submission of, 
all records for the purpose of verifying interest calculations, 
clearance patterns, interest calculation cost claims, and the State's 
accounting for Federal funds.
    (c) A State's implementation of this subpart A is subject to audit 
in accordance with 31 U.S.C. Chapter 75, ``Requirements for Single 
Audits.''
    (d) If a State repeatedly or deliberately fails to request funds in 
accordance with the procedures established for its funding techniques, 
as set forth in Sec. 205.11, Sec. 205.12, or a Treasury-State agreement, 
we may deny the State payment or credit for the resulting Federal 
interest liability, notwithstanding any other provision of this part.
    (e) If a State materially fails to comply with this subpart A, we 
may, in addition to the action described in paragraph (d) of this 
section, take one or more of the following actions, as appropriate under 
the circumstances:
    (1) Deny the reimbursement of all or a part of the State's interest 
calculation cost claim;
    (2) Send notification of the non-compliance to the affected Federal 
Program Agency for appropriate action, including, where appropriate, a 
determination regarding the impact of non-compliance on program funding;
    (3) Request a Federal Program Agency or the General Accounting 
Office to conduct an audit of the State to determine interest owed to 
the Federal government, and to implement procedures to recover such 
interest;
    (4) Initiate a debt collection process to recover claims owed to the 
United States; or
    (5) Take other remedies legally available.



Sec. 205.30  What are the Federal oversight and compliance responsibilities?

    (a) A Federal Program Agency must designate an official 
representative to coordinate all interaction with us and the States 
concerning this subpart A, and must notify us in writing of the 
representative's name and title. A Federal Program Agency must notify us 
immediately of any change in the official representative.
    (b) A Federal Program Agency's implementation of this subpart A is 
subject to review pursuant to procedural instructions that we issue.
    (c) We will consult with Federal agencies as necessary and 
appropriate before entering into or amending a Treasury-State agreement.
    (d) We will distribute Annual Reports to Federal agencies, as set 
forth in Sec. 205.26. Upon our request, a Federal Program Agency must 
review a State's Annual Report for reasonableness and must report its 
findings to us within 30 days.
    (e) A Federal Program Agency must notify us in writing if the 
program agency has knowledge, at any time, that:
    (1) A State's clearance pattern does not correspond to a Federal 
assistance program's clearance activity; or
    (2) Corrective action needs to be taken by a State, us, or another 
Federal Program Agency, with respect to the implementation of this 
subpart. We will notify the State or Federal Program Agency as 
appropriate in writing with a description of the Federal Program 
Agency's assertion.

[[Page 38]]

    (f) A Federal Program Agency must notify us in writing of new 
Federal assistance programs listed in the Catalog of Federal Domestic 
Assistance.
    (g) If a Federal Program Agency causes an interest liability by 
failing to comply with this subpart A, we may collect a charge from the 
Federal Program Agency. A Federal interest liability resulting from 
circumstances beyond the control of a Federal Program Agency does not 
constitute noncompliance. We will determine the charge using the 
following procedures:
    (1) We will issue a Notice of Assessment to the Federal Program 
Agency, indicating the nature of the noncompliance, the amount of the 
charge, the manner in which it was calculated, and the right to file an 
appeal.
    (2) To the maximum extent practicable, a Federal Program Agency must 
pay a charge for noncompliance out of appropriations available for the 
Federal Program Agency's operations and not from the Federal Program 
Agency's program funds.
    (3) If a Federal Program Agency does not pay a charge for 
noncompliance within 45 days after receiving a Notice of Assessment, we 
will debit the appropriate Federal Program Agency account.
    (4) In the event a Federal Program Agency appeals a charge imposed 
under the Notice of Assessment, we will defer the charge until we decide 
the appeal. If we deny the appeal, the effective date of the charge may 
be retroactive to the date indicated in the Notice of Assessment.



Sec. 205.31  How does a State or Federal Program Agency appeal a determination made by us and resolve disputes?

    (a) This section documents the procedures for:
    (1) A State to appeal the net interest charge that we have assessed;
    (2) A State to appeal a determination we have made regarding the 
State's claim for Interest Calculation Costs in accordance with 
Sec. 205.27;
    (3) A Federal Program Agency to appeal a charge for noncompliance 
that we have assessed in accordance with Sec. 205.30; or
    (4) A State or a Federal Program Agency to resolve other disputes 
with us or between or among each other concerning the implementation of 
this subpart A.
    (b) A State or Federal Program Agency must submit a written petition 
(Petition) to the Assistant Commissioner, Federal Finance, Financial 
Management Service, (Assistant Commissioner), within 90 days of the date 
of the notice of assessment or the event that initiated the appeal or 
dispute. The Petition must include a concise factual statement, not to 
exceed 15 pages, with supporting documentation in the appendices, of the 
conditions forming the basis of the Petition and the action requested of 
the Assistant Commissioner. In the case of a dispute, the party 
submitting the petition to us must concurrently provide a copy of the 
petition to the other concerned parties. The other concerned parties may 
submit to the Assistant Commissioner a rebuttal within 90 days of the 
date of the petition. The rebuttal must include a concise factual 
statement, not to exceed 15 pages, with supporting documentation in the 
appendices.
    (c) The Assistant Commissioner will review the Petition, any 
rebuttal, and all supporting documentation. As part of the review 
process, the Assistant Commissioner may request to meet with any or all 
parties and may request additional information.
    (d) The Assistant Commissioner will issue a written decision within 
the later of 120 days of the date of the Petition or the rebuttal, in 
case of a dispute, or 120 days from receipt of any additional 
information. The Assistant Commissioner's decision will be the final 
program agency action on our part for purposes of judicial review 
procedures under the Administrative Procedures Act, 5 U.S.C. 701-706 
(APA), unless either the State or Federal Program Agency invokes the 
provisions of the Administrative Dispute Resolution Act of 1990 (ADRA), 
5 U.S.C. 581-593.
    (e) Either a State or Federal Program Agency may seek to invoke the 
provisions of the ADRA within 45 days after the date of the Assistant 
Commissioner's written decision.

[[Page 39]]

    (1) The party invoking the ADRA must notify the Assistant 
Commissioner and any other concerned parties in writing. If all parties, 
including the Assistant Commissioner, agree in writing, a neutral party 
appointed under the provisions of the ADRA may assist in resolving the 
dispute through the use of alternate means of dispute resolution as 
defined in the ADRA.
    (2) If the party invoking the ADRA is unable to reach a satisfactory 
resolution, the Assistant Commissioner's decision will be the final 
agency action on our part for purposes of the judicial review procedures 
under the APA.
    (f) Any amount due as a result of an appeal or dispute must be paid 
within 30 days of the date of the decision of the Assistant Commissioner 
or the date of the resolution under the ADRA. If a State fails to pay, 
the State will be subject to collection techniques under 31 U.S.C. 3701 
et seq., including accrual of interest on outstanding balances and 
administrative offset.



Subpart B--Rules Applicable to Federal Assistance Programs Not Included 
                      in a Treasury-State Agreement



Sec. 205.32  What Federal assistance programs are subject to this subpart B?

    This subpart B applies to all Federal assistance programs listed in 
the Catalog of Federal Domestic Assistance that are not subject to 
subpart A of this part.



Sec. 205.33  How are funds transfers processed?

    (a) A State must minimize the time between the drawdown of Federal 
funds from the Federal government and their disbursement for Federal 
program purposes. A Federal Program Agency must limit a funds transfer 
to a State to the minimum amounts needed by the State and must time the 
disbursement to be in accord with the actual, immediate cash 
requirements of the State in carrying out a Federal assistance program 
or project. The timing and amount of funds transfers must be as close as 
is administratively feasible to a State's actual cash outlay for direct 
program costs and the proportionate share of any allowable indirect 
costs. States should exercise sound cash management in funds transfers 
to subgrantees in accordance with OMB Circular A-102 (For availability, 
see 5 CFR 1310.3.).
    (b) Neither a State nor the Federal government will incur an 
interest liability under this part on the transfer of funds for a 
Federal assistance program subject to this subpart B.



Sec. 205.34  What are the Federal oversight and compliance responsibilities?

    (a) A Federal Program Agency must review the practices of States as 
necessary to ensure compliance with this subpart B.
    (b) A Federal Program Agency must notify us if a State demonstrates 
an unwillingness or inability to comply with this subpart B.
    (c) A Federal Program Agency must formulate procedural instructions 
specifying the methods for carrying out the responsibilities of this 
section.



Sec. 205.35  What is the result of Federal Program Agency or State non-compliance?

    We may require a State and a Federal Program Agency to make the 
affected Federal assistance programs subject to subpart A of this part, 
consistent with Federal assistance program purposes and regulations, 
notwithstanding any other provision of this part, if:
    (a) A State demonstrates an unwillingness or inability to comply 
with this subpart B; or
    (b) A Federal Program Agency demonstrates an unwillingness or 
inability to make Federal funds available to a State as needed to carry 
out a Federal assistance program.



                          Subpart C [Reserved]



      



PART 206--MANAGEMENT OF FEDERAL AGENCY RECEIPTS, DISBURSEMENTS, AND OPERATION OF THE CASH MANAGEMENT IMPROVEMENTS FUND--Table of Contents




Sec.
206.1  Scope and application.
206.2  Definitions.

[[Page 40]]

206.3  Billing policy and procedures.
206.4  Collection and payment mechanisms.
206.5  Collection and deposit procedure exceptions.
206.6  Cash management planning and review.
206.7  Compliance.
206.8  Appeals.
206.9  Charges.
206.10  Operation of and payments from the Cash Management Improvements 
          Fund.

    Authority: 5 U.S.C. 301; 31 U.S.C. 321, 3301, 3302, 3321, 3327, 
3328, 3332, 3335, 3720, and 6503.

    Source: 59 FR 4538, Jan. 31, 1994, unless otherwise noted.



Sec. 206.1  Scope and application.

    (a) This subpart applies to all Government departments and agencies 
in the executive branch (except the Tennessee Valley Authority) and all 
monies collected and disbursed by these departments and agencies. This 
subpart does not apply to interagency transfers of funds, except that 
agencies are to use the Treasury's On-Line Payment and Collection (OPAC) 
system for interagency payments between executive agencies, when cost-
effective.
    (b) Policies and guidelines are prescribed for promoting efficient, 
effective cash management through improved billing, collection, deposit, 
and payment of funds. These objectives seek to improve funds 
availability and the efficiency and effectiveness with which funds are 
transferred.
    (c) Authority to implement this regulation has been delegated within 
the Department of the Treasury (hereinafter, ``Treasury'') to the 
Commissioner (hereinafter, ``the Commissioner'') of the Financial 
Management Service (hereinafter, ``the Service).'' The Service maintains 
the final authority as granted under the Deficit Reduction Act of 1984 
to specify use of a particular method or mechanism of collection and 
deposit and to recover costs that result from noncompliance. Authority 
is also granted to the Service, under the Cash Management Improvement 
Act of 1990, as amended by the Cash Management Improvement Act 
Amendments of 1992, to provide for the timely disbursement of funds. An 
agency will require the collection or disbursement of funds by the 
agency via EFT as a provision of new contractual agreements or renewal 
of existing contracts that impact agency collection or payment 
mechanisms.



Sec. 206.2  Definitions.

    For the purpose of this part, the following definitions apply:
    Agency means any department, instrumentality, office, commission, 
board, service, Government corporation, or other establishment in the 
executive branch, except the Tennessee Valley Authority.
    Billing means any of a variety of means by which the Government 
places a demand for payment against an entity that is indebted to the 
Government. The term encompasses invoices, notices, initial demand 
letters, and other forms of notification.
    Cash management means practices and techniques designed to 
accelerate and control collections, ensure prompt deposit of receipts, 
improve control over disbursement methods, and eliminate idle cash 
balances. ``Cash Management Review Process'' means periodic examinations 
of collection and disbursement cash flows to ensure that the most 
effective mechanisms are used to process the funds.
    Collection means the transfer of monies from a source outside the 
Federal Government to an agency or to a financial institution acting as 
an agent of the Government.
    Collection mechanism means any one of a number of tools or systems 
by which monies are transferred to the Government from a source outside 
the Government.
    Cutoff time means a time predesignated by a financial institution 
beyond which transactions presented or actions requested will be 
considered the next banking day's business.
    Day means a calendar day unless otherwise specified.
    Deposit means as a noun, money that is being or has been presented 
for credit to the Treasury. Deposits can be made by an agency or 
directly by the remitter. All such transfers are effected through a 
Federal Reserve Bank or other financial institution. As a verb, deposit 
means the act of presenting monies for credit to the Treasury by an 
official of an agency.

[[Page 41]]

    Depositary means a bank or other financial institution that has been 
authorized by the Treasury to receive monies for credit to the Treasury.
    Disburse means the initiation of an Electronic Funds Transfer (EFT) 
transaction or other methods of drawing funds from accounts maintained 
by the Government.
    Electronic funds transfer (EFT) means any transfer of funds, other 
than a transaction originated by cash, check or similar paper 
instrument, that is initiated through an electronic terminal, telephone, 
computer, or magnetic tape, for the purpose of ordering, instructing, or 
authorizing a financial institution to debit or credit an account. The 
term includes, but is not limited to, Fed Wire transfers, Automated 
Clearing House (ACH) transfers, transfers made at automatic teller 
machines (ATM) and Point-of-Sale (POS) terminals (to include use of the 
Government small purchase card), and other means of credit card 
transactions.
    Fund means the Cash Management Improvements Fund.
    Monies (or ``receipts'') means EFT transactions, currency, 
negotiable instruments, and/or demand deposits owed to or collected by 
an agency.
    Next-day deposit means a deposit made before the cutoff time on the 
day following the day on which the funds were received by an agency. For 
example, if an agency receives funds for deposit at 3 p.m. on Monday and 
transmits the deposits to the depositary by 2 p.m. on Tuesday (the 
depositary's next cutoff time), then next-day deposit requirements are 
met.
    Payment means a sum of money transferred to a recipient in 
satisfaction of an obligation. A payment includes any Federal Government 
benefit or nonbenefit payment.
    (1) A benefit payment is a disbursement for a Federal Government 
entitlement program or annuity. Benefit payments may be one-time or 
recurring payments including, but not limited to, payments for Social 
Security, Supplemental Security Income, Black Lung, Civil Service 
Retirement, Railroad Retirement Board Retirement/Annuity, Department of 
Veterans Affairs Compensation/Pension, Central Intelligence Agency 
Annuity, Military Retirement Annuity, Coast Guard Retirement, and 
Worker's Compensation.
    (2) A nonbenefit payment is a Federal Government disbursement other 
than a benefit payment. Nonbenefit payments may be one-time or recurring 
payments including, but not limited to, payments for vendors, Internal 
Revenue Service tax refunds, Federal salaries and allotments therefrom, 
grants, travel disbursements and reimbursements, loans, principal and/or 
interest related to U.S. savings bonds, notes, and other savings-type 
securities, and payments of service fees to organizations qualified to 
issue and/or redeem savings bonds.
    Point-of-sale (POS) terminal means an automated credit card or debit 
card transaction device.
    Presumed EFT means that agencies will presume that new payment 
recipients will elect EFT as the means of payment delivery. Enrollment 
forms for use in establishing routine payments will be designed with 
this approach in mind, to obtain the required written consent of the 
recipient.
    Recipient means a person, corporation, or other public or private 
entity receiving benefit or nonbenefit payments from the Government.
    Same-day deposit means a deposit made before the cutoff time on the 
day on which the funds were received by an agency. For example, if an 
agency receives funds for deposit at 10 a.m. on Monday and transmits the 
deposits by 2 p.m. on Monday (the depositary's cutoff time), then a 
same-day deposit has been achieved.
    Service means the Financial Management Service, Department of the 
Treasury.
    Treasury Financial Manual (TFM) means the manual issued by the 
Service containing procedures to be observed by all Government 
departments and agencies in relation to central accounting, financial 
reporting, and other Governmentwide fiscal responsibilities of the 
Department of the Treasury. Volume I, Chapter 6-8000 (I TFM 6-8000) 
contains agency cash management procedures to be followed pertaining to 
these regulations.

Copies of the TFM are available free to Government agencies. Others who 
are

[[Page 42]]

interested in ordering a copy may call (202) 208-1819 or write the 
Directives Management Branch, Financial Management Service, Department 
of the Treasury, Liberty Center (UCP-741), Washington, DC 20227 for 
further information.



Sec. 206.3  Billing policy and procedures.

    The billing process is considered an integral part of an effective 
cash management collection program. In those situations where bills are 
required and the failure to bill would affect the cash flow, bills will 
be prepared and transmitted within 5 business days after goods have been 
shipped or released, services have been rendered, or payment is 
otherwise due. An agency may prepare and transmit bills later than the 
5-day timeframe if it can demonstrate that it is cost-effective to do 
so. In addition, the bill must include the terms and dates of payments, 
and late payment provisions, if applicable. Terms and dates of payments 
will be consistent with industry practices. I TFM 6-8000 describes 
detailed billing policies, procedures, and industry standards for 
agencies.



Sec. 206.4  Collection and payment mechanisms.

    (a) All funds are to be collected and disbursed by EFT when cost-
effective, practicable, and consistent with current statutory authority.
    (b) Collections and payments will be made by EFT when cost- 
effective, practicable, and consistent with current statutory authority. 
When consistent with these criteria, specific cash flows will utilize 
EFT as follows:
    (1) Fees/fines. EFT will be adopted as the presumed method of 
collecting fees and fines, especially when these collection cash flows 
are recurring or of large dollar amounts.
    (2) Tax collections. EFT will be adopted as the primary method for 
collecting taxes. EFT mechanisms may include ACH credit or debit cards.
    (3) Salary payment. Presumed EFT will be adopted as the method for 
paying employees, and entrance enrollment forms for establishing regular 
payments will be designed to use this approach.
    (4) Vendor and miscellaneous payments. Each department and agency 
will exercise its authority under the Federal Acquisition Regulation to 
require that all contractors are paid by EFT, unless a determination is 
made that it is not in the best interest of the Federal Government to do 
so. EFT will be adopted as the standard method of payment for all 
Federal program payments originated by agencies or their agents.
    (5) Benefit payments. EFT will be presented to new beneficiaries as 
the presumed method for receiving benefits. EFT payment methods, such as 
Electronic Benefit Transfer, will be adopted and implemented to make EFT 
accessible to all benefit recipients.
    (c)(1) Selection of the best collection and payment mechanism is a 
joint responsibility of an agency and the Service. An agency has 
responsibility for conducting cash management reviews; gathering volume 
and dollar data relative to the operation of the systems; and funding 
any implementation and operational costs above those normally funded by 
Treasury. The Service is the required approval authority when an agency 
desires to convert from one collection mechanism to another. The 
Service's written approval is required prior to an agency entering into 
new contractual agreements or renewing existing contracts for agency 
collections or payments systems. Agencies will follow guidelines for the 
cost-effective usage of collection and payment mechanisms, published in 
the TFM, Volume I, Part 6-8000, in their selection and recommendation to 
the Service of an appropriate funds transfer mechanism. The agency will 
provide the Service with a recommended mechanism for any new or modified 
cash flows. The Service will review the recommendations, approve a 
mechanism, and assist with implementation.
    (2) If an agency proposes a collection or payment mechanism other 
than EFT, it may be required to provide a cost-benefit analysis to 
justify its use. Cost/benefit analyses must include, at a minimum, known 
or estimated agency personnel costs, costs of procurement, recurring 
operational costs, equipment and system implementation

[[Page 43]]

and maintenance costs, costs to payment recipients, and costs to 
remitters. Agencies should consult with Treasury to determine the need 
to include interest costs associated with float in their computations of 
benefits and costs.
    (d) An agency will require the collection of funds by the agency to 
be made via EFT and the disbursement of funds by the agency to be made 
via EFT as a provision of new contractual agreements or renewal of 
existing contracts that impact agency collection or payment mechanisms, 
when cost-effective, practicable, and consistent with current statutory 
authority.



Sec. 206.5  Collection and deposit procedure exceptions.

    (a) The following collection and deposit timeframe requirements are 
to be followed in exception cases where EFT mechanisms are not utilized:
    (1) An agency will achieve same-day deposit of monies. Where same 
day deposit is not cost-effective or is impracticable, next day deposit 
of monies must be achieved except in those cases covered by I TFM 6-
8000.
    (2) Deposits will be made at a time of the day prior to the 
depositary's specified cutoff time, but as late as possible in order to 
maximize daily deposit amounts.
    (3) When cost-beneficial to the Government, an agency may make 
multiple deposits.
    (b) Any additional exceptions to the above policies are listed in I 
TFM 6-8000.



Sec. 206.6  Cash management planning and review.

    (a) An agency shall periodically perform cash management reviews to 
identify areas needing improvement.
    (b) As part of its cash management review process, an agency is 
expected to document cash flows in order to provide an overview of its 
cash management activities and to identify areas that will yield savings 
after cash management initiatives are implemented. The Service will 
evaluate an agency's EFT policy and application, to include mitigating 
circumstances that may prevent the use of EFT, as part of the cash 
management reviews.
    (c) An agency's cash management reviews will provide the basis for 
identification of improvements and preparation of cash flow reports for 
submission to the Service as prescribed by I TFM 6-8000. That Chapter 
provides requirements for an agency in performing periodic cash 
management reviews, identifying improvements, and preparing cash flow 
reports. In addition, the Chapter describes the timing and content of 
periodic reports that must be submitted by an agency to the Service on 
progress made in implementing cash management initiatives and associated 
savings.
    (d) The Service will periodically review an agency's cash management 
program to ensure that adequate progress is being made to improve 
overall cash management at an agency. As part of its oversight 
authority, the Service may visit an agency and review all or specific 
cash management activities of an agency. An agency will be notified in 
advance of the Service's review and will be required to provide the 
Service with documentation of the agency cash management review within 
the timeframes required by I TFM 6-8000.



Sec. 206.7  Compliance.

    (a) The Service will monitor agency cash management performance. 
Part of the monitoring process will include establishing implementation 
end dates for conversion to, or expansion of, EFT mechanisms, as well as 
the identification of mitigating circumstances that may prevent the use 
of EFT.
    (b) In cases where an agency fails to meet a scheduled date within 
its control, or where an agency converts to a less cost-effective 
transfer mechanism without prior, written Service approval as determined 
in accordance with Sec. 206.4(c), the Service will send a formal Notice 
of Deficiency to an agency's designated cash management official. A 
separate Notice will be sent for each initiative.
    (1) Collections cash flows. For collections cash flows, the Notice 
of Deficiency will include the nature of the deficiency, the amount of 
the proposed charge, the method of calculation, the right to file an 
appeal, and the date the charge will be imposed in the absence

[[Page 44]]

of an appeal. The amount of the charge will be equal to the cost of such 
noncompliance to the Treasury's General Fund.
    (2) Payments cash flows. [Reserved]



Sec. 206.8  Appeals.

    (a) An agency that chooses to file an appeal must submit the appeal 
in writing to the Commissioner within 45 days of the date of the Notice 
of Deficiency. In the event of an appeal, the charge imposed under 
Notice of Deficiency will be deferred pending the results of the appeal. 
If an appeal is not submitted (i.e., received by the Commissioner) 
within 45 days, the amount indicated in the Notice of Deficiency will be 
charged per Sec. 206.9(a).
    (b) The appeal will contain the elements and follow the submission 
procedures specified in I TFM 6-8000. The appeal will include the 
background leading to the Notice of Deficiency, the basis of the appeal, 
and the action requested by an agency. An agency should state its 
disagreements with the Notice of Deficiency which may include cost-
benefit factors, the amount of the charge, and other items.
    (c) An agency must state what action it requests in its appeal. An 
agency may request that the Notice of Deficiency be completely 
overturned for cost-benefit or other considerations. Alternatively, an 
agency may request a reduced charge, deferral of the charge, an 
alternative solution to cash management improvement, or a combination of 
these actions.
    (d) Appeals Board. The Commissioner will refer the appeal to an 
Appeals Board. The Appeals Board will consist of three members--two 
permanent members and one temporary member. The permanent members will 
be the Deputy Chief Financial Officer, Department of the Treasury, and 
the Assistant Commissioner, Federal Finance, of the Service. The 
temporary board member will be a cash management official from an agency 
other than the agency appealing the Notice of Deficiency. The Board will 
be convened on an as-needed basis. The order of agency assignment to the 
Board will be published by Treasury in Volume I, Chapter 6-8000 of the 
TFM. The Deputy Chief Financial Officer, Department of the Treasury, the 
Assistant Commissioner, Federal Finance, and the designated agency cash 
management official may delegate their responsibility to a staff 
subordinate having sufficient experience in cash management matters. The 
Assistant Commissioner's designee may be from any area other than that 
which issued the Notice of Deficiency.
    (e) Appeal review process. The Appeals Board will review the Notice 
of Deficiency, any additional information submitted by the Service, and 
the written appeal from an agency. Based on this review, the Board may 
decide additional investigation is required. The Board may request an 
agency and/or the Service to meet with the Board as part of the review 
process.
    (f) Appeal finding. A written majority decision will be rendered by 
the Appeals Board within 30 days of receipt of the appeal. The Board may 
extend this period for an additional period, not to exceed 30 days, if 
required. The Appeals Board will notify the Commissioner and the agency 
of the decision. The decision of the Board whether to uphold the Notice 
of Deficiency, to overturn the Notice of Deficiency, or to mandate some 
other action will be stated in the finding. Other action mandated may 
include a reduced charge, a deferral of the charge, an alternate 
solution to cash management improvement, or a combination of these 
actions. The basis of the decision, the amount of the charge, and the 
effective date of the charge will be stated in the finding. The 
effective date of the charge may be retroactive to the date indicated in 
the Notice of Deficiency.
    (g) Any terms related to charge deferral shall be stated; the 
Service and an agency will be required to submit evidence of compliance 
to such terms at a future specified date. At this future time, the 
Appeals Board will review the evidence of compliance. Based on this 
evidence, the Board will decide whether to impose a charge.



Sec. 206.9  Charges.

    (a) Within 30 days of the effective date of the charge or the 
appeals decision, an agency must submit appropriate accounting 
information to the

[[Page 45]]

Service's Assistant Commissioner, Federal Finance. The charge will be 
calculated following procedures outlined in I TFM 6-8000, and will be 
assessed for each month that noncompliance continues.
    (b) Collection noncompliance. In the case of cash management 
collection noncompliance, an agency will absorb the charge from amounts 
appropriated or otherwise made available to carry out the program to 
which the collections relate. Charges collected from an executive agency 
in the case of cash management collection noncompliance will be 
deposited in the Cash Management Improvements Fund as outlined in 
Sec. 206.10.
    (c) Payment noncompliance. [Reserved]
    (d) If an agency does not voluntarily pay the charge assessed under 
Sec. 206.9(a), the Service will debit the appropriate account 
automatically. By failing to pay voluntarily the charges as required by 
the Deficit Reduction Act of 1984, an agency will be deemed to authorize 
the automatic debit to its account.
    (e) The Commissioner will formally terminate the charge when the 
Commissioner has determined that an agency has complied. In addition, on 
an annual basis, the Commissioner will review an agency's performance 
and calculation of the charge, and will notify an agency in writing of 
any changes to the amount being charged.



Sec. 206.10  Operation of and payments from the Cash Management Improvements Fund.

    (a) The Cash Management Improvements Fund (Fund) will be operated as 
a revolving fund by the Service. Charges assessed under Sec. 206.9(a) 
for cash management collection noncompliance will be deposited into the 
Fund according to the Deficit Reduction Act of 1984. The Service will 
also disburse any payments from the Fund based on projects selected by a 
project selection and approval committee.
    (b) Committee composition. The committee will consist of three 
members--two permanent members and one temporary member. The permanent 
members will be the Commissioner and the Assistant Commissioner, Federal 
Finance, of the Service. The temporary committee member will be a cash 
management official from an agency other than an agency being considered 
for funds. The order of agency assignment to the Committee will be 
published in a TFM Bulletin, when funds are first deposited to the Fund. 
Decisions of the project selection and approval committee cannot be 
appealed. Agencies will be notified of any available amounts in the Fund 
and requirements to apply for such monies through a TFM bulletin.
    (c) As provided by 31 U.S.C. 3720, sums in the Fund will be 
available without fiscal year limitation for the payment of expenses 
incurred in developing improved methods of collection and deposit and 
the expenses incurred in carrying out collections and deposits using 
such methods, including the costs of personal services and the costs of 
the lease or purchase of equipment and operating facilities.
    (d) In addition to all reports required by law and regulation, for 
each fiscal year during which there is a balance in Fund, the Service 
will prepare and publish, by the 60th day following the close of the 
fiscal year, a full report on payments, receipts, disbursements, 
balances of the Fund, and full disclosure on projects financed by the 
Fund.



PART 208--MANAGEMENT OF FEDERAL AGENCY DISBURSEMENTS--Table of Contents




Sec.
208.1  Scope and application.
208.2  Definitions.
208.3  Payment by electronic funds transfer.
208.4  Waivers.
208.5  Availability of the ETA\SM\.
208.6  General account requirements.
208.7  Agency responsibilities.
208.8  Recipient responsibilities.
208.9  Compliance.
208.10  Reservation of rights.

Appendix A to Part 208--Model Disclosure for Use Until ETA\SM\ Becomes 
          Available
Appendix B to Part 208--Model Disclosure for Use After ETA\SM\ Becomes 
          Available

    Authority: 5 U.S.C. 301; 12 U.S.C. 90, 265, 266, 1767, 1789a; 31 
U.S.C. 321, 3122, 3301, 3302, 3303, 3321, 3325, 3327, 3328, 3332, 3335, 
3336, 6503; Pub. L. 104-208, 110 Stat. 3009.

    Source: 63 FR 51502, Sept. 25, 1998, unless otherwise noted.

[[Page 46]]



Sec. 208.1  Scope and application.

    This part applies to all Federal payments made by an agency and, 
except as specified in Sec. 208.4, requires such payments to be made by 
electronic funds transfer. This part does not apply to payments under 
the Internal Revenue Code of 1986 (26 U.S.C.).



Sec. 208.2  Definitions.

    (a) Agency means any department, agency, or instrumentality of the 
United States Government, or a corporation owned or controlled by the 
Government of the United States.
    (b) Authorized payment agent means any individual or entity that is 
appointed or otherwise selected as a representative payee or fiduciary, 
under regulations of the Social Security Administration, the Department 
of Veterans Affairs, the Railroad Retirement Board, or other agency 
making Federal payments, to act on behalf of an individual entitled to a 
Federal payment.
    (c) Disbursement means, in the context of electronic benefits 
transfer, the performance of the following duties by a Financial Agent 
acting as agent of the United States:
    (1) The establishment of an account for the recipient that meets the 
requirements of the Federal Deposit Insurance Corporation or the 
National Credit Union Administration Board for deposit or share 
insurance;
    (2) The maintenance of such an account;
    (3) The receipt of Federal payments through the Automated Clearing 
House system or other electronic means and crediting of Federal payments 
to the account; and (4) The provision of access to funds in the account 
on the terms specified by Treasury.
    (d) Electronic benefits transfer (EBT) means the provision of 
Federal benefit, wage, salary, and retirement payments electronically, 
through disbursement by a financial institution acting as a Financial 
Agent. For purposes of this part, EBT includes disbursement through an 
ETA\SM\ and through a Federal/State EBT program.
    (e) Electronic funds transfer means any transfer of funds, other 
than a transaction originated by cash, check, or similar paper 
instrument, that is initiated through an electronic terminal, telephone, 
computer, or magnetic tape, for the purpose of ordering, instructing, or 
authorizing a financial institution to debit or credit an account. The 
term includes, but is not limited to, Automated Clearing House 
transfers, Fedwire transfers, and transfers made at automated teller 
machines and point-of-sale terminals. For purposes of this part only, 
the term electronic funds transfer includes a credit card transaction.
    (f) ETA\SM\ means the Treasury-designated electronic transfer 
account made available by a Federally-insured financial institution 
acting as a Financial Agent in accordance with Sec. 208.5 of this part.
    (g) Federal payment means any payment made by an agency.
    (1) The term includes, but is not limited to:
    (i) Federal wage, salary, and retirement payments;
    (ii) Vendor and expense reimbursement payments;
    (iii) Benefit payments; and
    (iv) Miscellaneous payments including, but not limited to: 
interagency payments; grants; loans; fees; principal, interest, and 
other payments related to U.S. marketable and nonmarketable securities; 
overpayment reimbursements; and payments under Federal insurance or 
guarantee programs for loans.
    (2) For purposes of this part only, the term ``Federal payment'' 
does not apply to payments under the Internal Revenue Code of 1986 (26 
U.S.C.).
    (h) Federal/State EBT program means any program that provides access 
to Federal benefit, wage, salary, and retirement payments and to State-
administered benefits through a single delivery system and in which 
Treasury designates a Financial Agent to disburse the Federal payments.
    (i) Federally-insured financial institution means any financial 
institution, the deposits of which are insured by the Federal Deposit 
Insurance Corporation under 12 U.S.C. Chapter 16 or, in the case of a 
credit union, the member accounts of which are insured by the National 
Credit Union Share Insurance Fund under 12 U.S.C. Chapter 14, Subchapter 
II.

[[Page 47]]

    (j) Financial Agent means a financial institution that has been 
designated by Treasury as a Financial Agent for the provision of EBT 
services under any provision of Federal law, including 12 U.S.C. 90, 
265, 266, 1767, and 1789a, and 31 U.S.C. 3122 and 3303, as amended by 
the Omnibus Consolidated Appropriations Act, 1997, Section 664, Public 
Law 104-208.
    (k) Financial institution means:
    (1) Any insured bank as defined in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813) or any bank which is eligible to make 
application to become an insured bank under section 5 of such Act (12 
U.S.C. 1815);
    (2) Any mutual savings bank as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813) or any bank which is eligible to 
make application to become an insured bank under section 5 of such Act 
(12 U.S.C. 1815);
    (3) Any savings bank as defined in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813) or any bank which is eligible to make 
application to become an insured bank under section 5 of such Act (12 
U.S.C. 1815);
    (4) Any insured credit union as defined in section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752) or any credit union which is 
eligible to make application to become an insured credit union under 
section 201 of such Act (12 U.S.C. 1781);
    (5) Any savings association as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813) which is an insured depository 
institution (as defined in such Act) (12 U.S.C. 1811 et seq.) or is 
eligible to apply to become an insured depository institution under the 
Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.); and
    (6) Any agency or branch of a foreign bank as defined in section 
1(b) of the International Banking Act, as amended (12 U.S.C. 3101).
    (l) Individual means a natural person.
    (m) Recipient means an individual, corporation, or other public or 
private entity that is authorized to receive a Federal payment from an 
agency.
    (n) Secretary means Secretary of the Treasury.
    (o) Treasury means the United States Department of the Treasury.



Sec. 208.3  Payment by electronic funds transfer.

    Subject to Sec. 208.4, and notwithstanding any other provision of 
law, effective January 2, 1999, all Federal payments made by an agency 
shall be made by electronic funds transfer.



Sec. 208.4  Waivers.

    Payment by electronic funds transfer is not required in the 
following cases:
    (a) Where an individual determines, in his or her sole discretion, 
that payment by electronic funds transfer would impose a hardship due to 
a physical or mental disability or a geographic, language, or literacy 
barrier, or would impose a financial hardship. In addition, the 
requirement to receive payment by electronic funds transfer is 
automatically waived for all individuals who do not have an account with 
a financial institution and who are eligible to open an ETA\SM\ under 
Sec. 208.5, until such date as the Secretary determines that the ETA\SM\ 
is available;
    (b) Where the political, financial, or communications infrastructure 
in a foreign country does not support payment by electronic funds 
transfer;
    (c) Where the payment is to a recipient within an area designated by 
the President or an authorized agency administrator as a disaster area. 
This waiver is limited to payments made within 120 days after the 
disaster is declared;
    (d) Where either:
    (1) A military operation is designated by the Secretary of Defense 
in which uniformed services undertake military actions against an enemy, 
or
    (2) A call or order to, or retention on, active duty of members of 
the uniformed services is made during a war or national emergency 
declared by the President or Congress;
    (e) Where a threat may be posed to national security, the life or 
physical safety of any individual may be endangered, or a law 
enforcement action may be compromised;
    (f) Where the agency does not expect to make more than one payment 
to the same recipient within a one-year period, i.e., the payment is 
non-recurring, and the cost of making the payment via electronic funds 
transfer exceeds

[[Page 48]]

the cost of making the payment by check; and
    (g) Where an agency's need for goods and services is of such unusual 
and compelling urgency that the Government would be seriously injured 
unless payment is made by a method other than electronic funds transfer; 
or, where there is only one source for goods or services and the 
Government would be seriously injured unless payment is made by a method 
other than electronic funds transfer.



Sec. 208.5  Availability of the ETA \SM\.

    An individual who receives a Federal benefit, wage, salary, or 
retirement payment shall be eligible to open an ETA \SM\ at any 
Federally-insured financial institution that offers ETAs \SM\. Any 
Federally-insured financial institution shall be eligible, but not 
required, to offer ETAs \SM\ as Treasury's Financial Agent. A Federally-
insured financial institution that elects to offer ETAs \SM\ shall, upon 
entering into an ETA \SM\ Financial Agency Agreement with the Treasury, 
be designated as Treasury's Financial Agent for the offering of the 
account pursuant to Public Law 104-208. Treasury shall make publicly 
available required attributes for ETAs \SM\ and any ETA \SM\ offered by 
a Federally-insured financial institution shall comply with such 
requirements. The offering of an ETA \SM\ shall constitute the provision 
of EBT services within the meaning of Public Law 104-208.



Sec. 208.6  General account requirements.

    (a) All Federal payments made by electronic funds transfer, 
including those made through an ETA \SM\, shall be deposited into an 
account at a financial institution. For all payments other than vendor 
payments, the account at the financial institution shall be in the name 
of the recipient, except as provided in paragraph (b) of this section.
    (b)(1) Where an authorized payment agent has been selected, the 
Federal payment shall be deposited into an account titled in accordance 
with the regulations governing the authorized payment agent.
    (2) Where a Federal payment is to be deposited into an investment 
account established through a securities broker or dealer registered 
with the Securities and Exchange Commission under the Securities 
Exchange Act of 1934, or an investment account established through an 
investment company registered under the Investment Company Act of 1940 
or its transfer agent, such payment may be deposited into an account 
designated by such broker or dealer, investment company, or transfer 
agent.



Sec. 208.7  Agency responsibilities.

    (a) An agency shall disclose to each individual who is eligible to 
receive a Federal benefit, wage, salary, or retirement payment and who 
is not already receiving payment by electronic funds transfer the 
individual's rights and obligations under Secs. 208.3, 208.4(a) and 
208.5 of this part, unless payment by electronic funds transfer is not 
required pursuant to any provision of subsections (b) through (g) of 
Sec. 208.4.
    (1) Prior to the date the ETA \SM\ becomes available, the disclosure 
shall be in a form substantially similar to the model disclosure set 
forth in appendix A of this part.
    (2) On and after the date the ETA \SM\ becomes available, the 
disclosure shall be in a form substantially similar to the model 
disclosure set forth in appendix B of this part.
    (b) An agency shall put into place procedures that allow recipients 
to indicate that the recipient elects to have payment deposited by 
electronic funds transfer to an account held by the recipient at a 
financial institution. In addition, an agency may put into place 
procedures to request that individuals who are invoking a hardship 
waiver under Sec. 208.4(a) indicate, in writing or orally, that a 
hardship waiver has been invoked. However, an agency may not delay or 
withhold payment if a recipient does not respond to such a request.



Sec. 208.8  Recipient responsibilities.

    Each recipient who is required to receive payment by electronic 
funds transfer and who has an account with a financial institution must, 
within the time frame specified by the agency making the payment, 
designate a financial institution through which the payment may be made 
and provide the

[[Page 49]]

agency with the information requested by the agency in order to effect 
payment by electronic funds transfer.



Sec. 208.9  Compliance.

    (a) Treasury will monitor agencies' compliance with this part. 
Treasury may require agencies to provide information about their 
progress in converting payments to electronic funds transfer.
    (b) If an agency fails to make payment by electronic funds transfer, 
as prescribed under this part, Treasury may assess a charge to the 
agency pursuant to 31 U.S.C. 3335.



Sec. 208.10  Reservation of rights.

    The Secretary reserves the right, in the Secretary's discretion, to 
waive any provision(s) of this regulation in any case or class of cases.

Appendix A to Part 208--Model Disclosure for Use Until ETA \SM\ Becomes 
                                Available

    The Debt Collection Improvement Act of 1996 requires that most 
Federal payments be made by electronic funds transfer after January 2, 
1999.
    If you are currently receiving your Federal payment by check or you 
have just become eligible to begin receiving a Federal payment, you have 
several choices:
    (1) Receive your payment by Direct Deposit through the financial 
institution of your choice.
    The Government makes payments electronically through a program 
called Direct Deposit. Direct Deposit is a safe, convenient, and 
reliable way to receive your Federal payment through a financial 
institution. (A financial institution can be a bank, credit union, 
savings bank, or thrift.) Many financial institutions offer basic, low-
cost accounts in addition to full-service checking or savings accounts.
    (2) Do nothing now and wait for a basic, low-cost account, called an 
ETA \SM\, to become available.
    If you do not have an account with a financial institution, you do 
not need to do anything now. In the future a low-cost account, called an 
ETA \SM\, will be available at many financial institutions. Like Direct 
Deposit, the ETA \SM\ (which stands for electronic transfer account) is 
a safe, convenient, and reliable way to receive your Federal payment 
through a financial institution. You are eligible to open this account, 
at a low monthly fee, if you receive a Federal benefit, wage, salary, or 
retirement payment. [Agency name] will contact you and let you know when 
the ETA \SM\ is available and which financial institutions in your area 
offer the account.
    (3) Continue to receive a check.
    If receiving your payment electronically would cause you a hardship 
because you have a physical or mental disability, or because of a 
geographic, language, or literacy barrier, you may receive your payment 
by check. In addition, if receiving your payment electronically would 
cause you a financial hardship because it would cost you more than 
receiving your payment by check, you may receive your payment by check.
    Please call [agency name] at [agency customer service number] if you 
would like more information on Direct Deposit, the ETA \SM\, or hardship 
waivers.

Appendix B to Part 208--Model Disclosure for Use After ETA \SM\ Becomes 
                                Available

    The Debt Collection Improvement Act of 1996 requires that most 
Federal payments be made by electronic funds transfer after January 2, 
1999.
    If you are currently receiving your Federal payment by check or you 
have just become eligible to begin receiving a Federal payment, you have 
several choices:
    (1) Receive your payment by Direct Deposit through the financial 
institution of your choice.
    The Government makes payments electronically through a program 
called Direct Deposit. Direct Deposit is a safe, convenient, and 
reliable way to receive your Federal payment through a financial 
institution. (A financial institution can be a bank, credit union, 
savings bank, or thrift.) Many financial institutions offer basic, low-
cost accounts in addition to full-service checking or savings accounts.
    (2) Receive your payment through a basic, low-cost account called an 
ETA \SM\.
    If you receive a Federal benefit, wage, salary, or retirement 
payment, you are eligible to open an ETA \SM\. This account is available 
for a low monthly fee at many financial institutions. Like Direct 
Deposit, the ETA \SM\ (which stands for electronic transfer account) is 
a safe, convenient, and reliable way to receive your Federal payment 
through a financial institution. Please call the customer service number 
listed below to find out which financial institutions in your area offer 
the ETA \SM\.
    (3) Continue to receive a check.
    If receiving your payment electronically would cause you a hardship 
because you have a physical or mental disability, or because of a 
geographic, language, or literacy barrier, you may receive your payment 
by check. In

[[Page 50]]

addition, if receiving your payment electronically would cause you a 
financial hardship because it would cost you more than receiving your 
payment by check, you may receive your payment by check.
    Please call [agency name] at [agency customer service number] if you 
would like more information on Direct Deposit, the ETA \SM\, or hardship 
waivers.



PART 210--FEDERAL GOVERNMENT PARTICIPATION IN THE AUTOMATED CLEARING HOUSE--Table of Contents




Sec.
210.1  Scope; relation to other regulations.
210.2  Definitions.
210.3  Governing law.

                           Subpart A--General

210.4  Authorizations and revocations of authorizations.
210.5  Account requirements for Federal payments.
210.6  Agencies.
210.7  Federal Reserve Banks.
210.8  Financial institutions.

               Subpart B--Reclamation of Benefit Payments

210.9  Parties to the reclamation.
210.10  RDFI liability.
210.11  Limited liability.
210.12  RDFI's rights of recovery.
210.13  Notice to account owners.
210.14  Erroneous death information.

Appendix A to Part 210--Standard Disclosure for Point-of-Purchase 
          Conversion--Posted Notice
Appendix B to Part 210--Standard Disclosure for Point-of-Purchase 
          Conversion--Brochure or Pamphlet
Appendix C to Part 210--Standard Disclosure for Lockbox Conversion--
          Notice

    Authority: 5 U.S.C. 5525; 12 U.S.C. 391; 31 U.S.C. 321, 3301, 3302, 
3321, 3332, 3335, and 3720.

    Source: 64 FR 17487, Apr. 9, 1999, unless otherwise noted.



Sec. 210.1  Scope; relation to other regulations.

    This part governs all entries and entry data originated or received 
by an agency through the Automated Clearing House (ACH) network, except 
as provided in paragraphs (a) and (b) of this section. This part also 
governs reclamations of benefit payments.
    (a) Federal tax payments received by the Federal Government through 
the ACH system that are governed by part 203 of this title shall not be 
subject to any provision of this part that is inconsistent with part 
203.
    (b) ACH credit or debit entries for the purchase of, or payment of 
principal and interest on, United States securities that are governed by 
part 370 of this title shall not be subject to any provision of this 
part that is inconsistent with part 370.



Sec. 210.2  Definitions.

    For purposes of this part, the following definitions apply. Any term 
that is not defined in this part shall have the meaning set forth in the 
ACH Rules.
    (a) ACH Rules means the Operating Rules and the Operating Guidelines 
published by NACHA--The Electronic Payments Association (NACHA), a 
national association of regional member clearing house associations, ACH 
Operators and participating financial institutions located in the United 
States.
    (b) Actual or constructive knowledge, when used in reference to an 
RDFI's knowledge of the death or legal incapacity of a recipient or 
death of a beneficiary, means that the RDFI received information, by 
whatever means, of the death or incapacity and has had a reasonable 
opportunity to act on such information or that the RDFI would have 
learned of the death or incapacity if it had followed commercially 
reasonable business practices.
    (c) Agency means any department, agency, or instrumentality of the 
United States Government, or a corporation owned or controlled by the 
Government of the United States. The term agency does not include a 
Federal Reserve Bank.
    (d) Applicable ACH Rules means the ACH Rules with an effective date 
on or before March 15, 2002, as published in Parts II, III, and IV of 
the ``2002 ACH Rules: A Complete Guide to Rules & Regulations Governing 
the ACH Network,'' except:
    (1) ACH Rule 1.1 (limiting the applicability of the ACH Rules to 
members of an ACH association);
    (2) ACH Rule 1.2.2 (governing claims for compensation);
    (3) ACH Rule 1.2.4; 2.2.1.10; Appendix Eight and Appendix Eleven 
(governing

[[Page 51]]

the enforcement of the ACH Rules, including self-audit requirements);
    (4) ACH Rules 2.2.1.8; 2.6; and 4.7 (governing the reclamation of 
benefit payments);
    (5) ACH Rule 8.3 and Appendix Two (requiring that a credit entry be 
originated no more than two banking days before the settlement date of 
the entry--see definition of ``Effective Entry Date'' in Appendix Two); 
and
    (6) ACH Rule 2.10.2.2 (requiring that originating depository 
financial institutions (ODFIs) establish exposure limits for Originators 
of Internet-initiated debit entries).
    (e) Authorized payment agent means any individual or entity that is 
appointed or otherwise selected as a representative payee or fiduciary, 
under regulations of the Social Security Administration, the Department 
of Veterans Affairs, the Railroad Retirement Board, or other agency 
making Federal payments, to act on behalf of an individual entitled to a 
Federal payment.
    (f) Automated Clearing House or ACH means a funds transfer system 
governed by the ACH Rules which provides for the interbank clearing of 
electronic entries for participating financial institutions.
    (g) Beneficiary means a natural person other than a recipient who is 
entitled to receive the benefit of all or part of a benefit payment.
    (h) Benefit payment is a payment for a Federal entitlement program 
or for an annuity, including, but not limited to, payments for Social 
Security, Supplemental Security Income, Black Lung, Civil Service 
Retirement, Railroad Retirement annuity and Railroad Unemployment and 
Sickness benefits, Department of Veterans Affairs Compensation and 
Pension, and Worker's Compensation.
    (i) Federal payment means any payment made by an agency. The term 
includes, but is not limited to:
    (1) Federal wage, salary, and retirement payments;
    (2) Vendor and expense reimbursement payments;
    (3) Benefit payments; and
    (4) Miscellaneous payments including, but not limited to, 
interagency payments; grants; loans; fees; principal, interest, and 
other payments related to United States marketable and nonmarketable 
securities; overpayment reimbursements; and payments under Federal 
insurance or guarantee programs for loans.
    (j)(1) Financial institution means:
    (i) Any insured bank as defined in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813) or any bank which is eligible to apply to 
become an insured bank under section 5 of such Act (12 U.S.C. 1815);
    (ii) Any mutual savings bank as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813) or any bank which is eligible to 
apply to become an insured bank under section 5 of such Act (12 U.S.C. 
1815);
    (iii) Any savings bank as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813) or any bank which is eligible to 
apply to become an insured bank under section 5 of such Act (12 U.S.C. 
1815);
    (iv) Any insured credit union as defined in section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752) or any credit union which is 
eligible to apply to become an insured credit union pursuant to section 
201 of such Act (12 U.S.C. 1781);
    (v) Any savings association as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813) which is an insured depository 
institution as defined in such Act (12 U.S.C. 1811 et seq.) or is 
eligible to apply to become an insured depository institution under the 
Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.); and
    (vi) Any agency or branch of a foreign bank as defined in section 
1(b) of the International Banking Act, as amended (12 U.S.C. 3101).
    (2) In this part, a financial institution may be referred to as an 
Originating Depository Financial Institution (ODFI) if it transmits 
entries to its ACH Operator for transmittal to a Receiving Depository 
Financial Institution (RDFI), or it may be referred to as an RDFI if it 
receives entries from its ACH Operator for debit or credit to the 
accounts of its customers.
    (k) Government entry means an ACH credit or debit entry or entry 
data originated or received by an agency.

[[Page 52]]

    (l) Green Book means the manual issued by the Service which provides 
financial institutions with procedures and guidelines for processing 
Government entries.
    (m) Notice of reclamation means notice sent by electronic, paper, or 
other means by the Federal Government to an RDFI which identifies the 
benefit payments that should have been returned by the RDFI because of 
the death or legal incapacity of a recipient or death of a beneficiary.
    (n) Outstanding total means the sum of all benefit payments received 
by an RDFI from an agency after the death or legal incapacity of a 
recipient or the death of a beneficiary, minus any amount returned to, 
or recovered by, the Federal Government.
    (o) Recipient means a natural person, corporation, or other public 
or private entity that is authorized to receive a Federal payment from 
an agency.
    (p) Service means the Financial Management Service, Department of 
the Treasury.
    (q) Treasury means the United States Department of the Treasury.
    (r) Treasury Financial Manual means the manual issued by the Service 
containing procedures to be observed by all agencies and Federal Reserve 
Banks with respect to central accounting, financial reporting, and other 
Federal Government-wide fiscal responsibilities of the Treasury.

[64 FR 17478, Apr. 9, 1999, as amended at 65 FR 18869, Apr. 7, 2000; 66 
FR 10580, Feb. 16, 2001; 67 FR 17902, Apr. 11, 2002]



Sec. 210.3  Governing law.

    (a) Federal law. The rights and obligations of the United States and 
the Federal Reserve Banks with respect to all Government entries, and 
the rights of any person or recipient against the United States and the 
Federal Reserve Banks in connection with any Government entry, are 
governed by this part, which has the force and effect of Federal law.
    (b) Incorporation by reference--applicable ACH Rules. (1) This part 
incorporates by reference the applicable ACH Rules, including rule 
changes with an effective date on or before March 15, 2002, as published 
in Parts II, III, and IV of the ``2002 ACH Rules: A Complete Guide to 
Rules & Regulations Governing the ACH Network.'' The Director of the 
Federal Register approves this incorporation by reference in accordance 
with 5 U.S.C. 552(a) and 1 CFR Part 51. Copies of the ``2002 ACH Rules'' 
are available from NACHA--The Electronic Payments Association, 13665 
Dulles Technology Drive, Suite 300, Herndon, Virginia 20171. Copies also 
are available for public inspection at the Office of the Federal 
Register, 800 North Capitol Street, N.W., Suite 700, Washington, D.C.
    (2) Any amendment to the applicable ACH Rules that takes effect 
after March 15, 2002, shall not apply to Government entries unless the 
Service expressly accepts such amendment by publishing notice of 
acceptance of the amendment to this part in the Federal Register. An 
amendment to the ACH Rules that is accepted by the Service shall apply 
to Government entries on the effective date of the rulemaking specified 
by the Service in the Federal Register notice expressly accepting such 
amendment.
    (c) Application of this part. Any person or entity that originates 
or receives a Government entry agrees to be bound by this part and to 
comply with all instructions and procedures issued by the Service under 
this part, including the Treasury Financial Manual and the Green Book. 
The Treasury Financial Manual is available for downloading at the 
Service's web site at http://www.fms.treas.gov/ or by calling (202) 874-
9940 or writing the Directives Management Branch, Financial Management 
Service, Department of the Treasury, 3700 East West Highway, Room 500C, 
Hyattsville, MD 20782. The Green Book is available for downloading at 
the Service's web site at http://www.fms.treas.gov/fmsnews.html or by 
calling (202) 874-6540 or writing the Product Promotion Division, 
Financial Management Service, Department of the Treasury, 401 14th 
Street, SW., Room 309, Washington, DC 20227.

[64 FR 17478, Apr. 9, 1999, as amended at 65 FR 18869, Apr. 7, 2000; 66 
FR 10580, Feb. 16, 2001; 67 FR 17903, Apr. 11, 2002]

[[Page 53]]



                           Subpart A--General



Sec. 210.4  Authorizations and revocations of authorizations.

    (a) Requirements for authorization. Each debit and credit entry 
subject to this part shall be authorized in accordance with the 
applicable ACH Rules and the following additional requirements:
    (1) The agency or the RDFI that accepts the recipient's 
authorization shall verify the identity of the recipient and, in the 
case of a written authorization requiring the recipient's signature, the 
validity of the recipient's signature.
    (2) Unless authorized in writing, or similarly authenticated, by an 
agency, no person or entity shall initiate or transmit a debit entry to 
that agency, other than a reversal of a credit entry previously sent to 
the agency.
    (b) Terms of authorizations. By executing an authorization for an 
agency to initiate entries, a recipient agrees:
    (1) To the provisions of this part;
    (2) To provide accurate information;
    (3) To verify the recipient's identity to the satisfaction of the 
RDFI or agency, whichever has accepted the authorization;
    (4) That any new authorization inconsistent with a previous 
authorization shall supersede the previous authorization; and
    (5) That the Federal Government may reverse any duplicate or 
erroneous entry or file as provided in Sec. 210.6(f) of this part.
    (c) Termination and revocation of authorizations. An authorization 
shall remain valid until it is terminated or revoked by:
    (1) With respect to a recipient of benefit payments, a change in the 
recipient's ownership of the deposit account as reflected in the deposit 
account records, including the removal of the name of the recipient, the 
addition of a power of attorney, or any action which alters the interest 
of the recipient;
    (2) The death or legal incapacity of a recipient of benefit payments 
or the death of a beneficiary;
    (3) The closing of the recipient's account at the RDFI by the 
recipient or by the RDFI. With respect to a recipient of benefit 
payments, if an RDFI closes an account to which benefit payments 
currently are being sent, it shall provide 30 calendar days written 
notice to the recipient prior to closing the account, except in cases of 
fraud; or
    (4) The RDFI's insolvency, closure by any state or Federal 
regulatory authority or by corporate action, or the appointment of a 
receiver, conservator, or liquidator for the RDFI. In any such event, 
the authorization shall remain valid if a successor is named. The 
Federal Government may temporarily transfer authorizations to a 
consenting RDFI. The transfer is valid until either a new authorization 
is executed by the recipient, or 120 calendar days have elapsed since 
the insolvency, closure, or appointment, whichever occurs first.



Sec. 210.5  Account requirements for Federal payments.

    (a) Notwithstanding ACH Rules 2.1.2, 4.1.3, and Appendix Two, 
section 2.2 (listing general ledger and loan accounts as permissible 
transaction codes), an ACH credit entry representing a Federal payment 
other than a vendor payment shall be deposited into a deposit account at 
a financial institution. For all payments other than vendor payments, 
the account at the financial institution shall be in the name of the 
recipient, except as provided in paragraph (b) of this section.
    (b)(1) Where an authorized payment agent has been selected, the 
Federal payment shall be deposited into an account titled in accordance 
with the regulations governing the authorized payment agent.
    (2) Where a Federal payment is to be deposited into an investment 
account established through a securities broker or dealer registered 
with the Securities and Exchange Commission under the Securities 
Exchange Act of 1934, or an investment account established through an 
investment company registered under the Investment Company Act of 1940 
or its transfer agent, such payment may be deposited into an account 
designated by such broker or dealer, investment company, or transfer 
agent.

[[Page 54]]

    (3) The Secretary of the Treasury may waive the requirements of 
paragraph (a) of this section in any case or class of cases.

[64 FR 17478, Apr. 9, 1999, as amended at 65 FR 18869, Apr. 7, 2000]



Sec. 210.6  Agencies.

    Notwithstanding ACH Rules 2.2.3, 2.4.5, 2.5.2, 4.2, and 7.7.2, 
agencies shall be subject to the obligations and liabilities set forth 
in this section in connection with Government entries.
    (a) Receiving entries. An agency may receive ACH debit or credit 
entries only with the prior written authorization of the Service.
    (b) Liability to a recipient. An agency will be liable to the 
recipient for any loss sustained by the recipient as a result of the 
agency's failure to originate a credit or debit entry in accordance with 
this part. The agency's liability shall be limited to the amount of the 
entry(ies).
    (c) Liability to an originator. An agency will be liable to an 
originator or an ODFI for any loss sustained by the originator or ODFI 
as a result of the agency's failure to credit an ACH entry to the 
agency's account in accordance with this part. The agency's liability 
shall be limited to the amount of the entry(ies).
    (d) Liability to an RDFI or ACH association. Except as otherwise 
provided in this part, an agency will be liable to an RDFI for losses 
sustained in processing duplicate or erroneous credit and debit entries 
originated by the agency. An agency's liability shall be limited to the 
amount of the entry(ies), and shall be reduced by the amount of the loss 
resulting from the failure of the RDFI to exercise due diligence and 
follow standard commercial practices in processing the entry(ies). This 
section does not apply to credits received by an RDFI after the death or 
legal incapacity of a recipient of benefit payments or the death of a 
beneficiary as governed by Subpart B of this part. An agency shall not 
be liable to any ACH association.
    (e) Acquittance of the agency. The final crediting of the amount of 
an entry to a recipient's account shall constitute full acquittance of 
the Federal Government.
    (f) Reversals. An agency may reverse any duplicate or erroneous 
entry, and the Federal Government may reverse any duplicate or erroneous 
file. In initiating a reversal, an agency shall certify to the Service 
that the reversal complies with applicable law related to the recovery 
of the underlying payment. An agency that reverses an entry shall 
indemnify the RDFI as provided in the applicable ACH Rules, but the 
agency's liability shall be limited to the amount of the entry. If the 
Federal Government reverses a file, the Federal Government shall 
indemnify the RDFI as provided in the applicable ACH Rules, but the 
extent of such liability shall be limited to the amount of the entries 
comprising the duplicate or erroneous file. Reversals under this section 
shall comply with the time limitations set forth in the applicable ACH 
Rules.
    (g) Point-of-purchase debit entries. An agency may convert to an ACH 
debit entry a check drawn on a consumer or business account and 
presented at a point-of-purchase. Agencies shall use the Point-of-
Purchase (POP) Standard Entry Class (SEC) code for entries to consumer 
accounts and the Cash Concentration or Disbursement (CCD) SEC code for 
entries to business accounts. The requirements of ACH Rules 2.1.2 and 
3.4 shall be met for such an entry if the Receiver presents the check at 
a location where the agency has posted a conspicuous notice at the 
point-of-purchase containing the disclosure set forth at appendix A to 
this part and makes available to the Receiver, in a form that the 
Receiver can retain, the disclosure set forth at appendix B to this 
part. For purposes of ACH Rules 3.10 and 4.1.1, authorization shall 
consist of a copy of the notice and a copy of the Receiver's source 
document.
    (h) Accounts receivable check conversion. (1) Conversion of consumer 
checks. The notice and authorization requirements of ACH Rules 2.1.4 and 
3.6.1 shall be met for an accounts receivable entry only if an agency 
has provided the Receiver with the disclosure set forth at appendix C to 
this part.
    (2) Conversion of business checks. An agency may convert to an ACH 
debit a check drawn on a business account

[[Page 55]]

that is received via mail or at a dropbox location if the agency has 
provided the Receiver with the disclosure set forth at appendix C. The 
agency shall use the CCD SEC code for such entries, which shall be 
deemed to meet the requirements of ACH Rule 2.1.2 if the agency has 
provided the disclosure set forth at appendix C. For purposes of ACH 
Rules 3.10 and 4.1.1, authorization shall consist of a copy of the 
notice and a copy of the Receiver's source document.
    (i) Returned item service fee. An agency may originate an ACH debit 
entry to collect a one-time service fee in connection with an ACH debit 
entry originated pursuant to paragraph (g) or (h) of this section that 
is returned due to insufficient funds. An entry originated pursuant to 
this paragraph shall meet the requirements of ACH Rules 2.1.2 and 3.4 if 
the agency has complied with the disclosure requirements of paragraph 
(g) or (h), as appropriate. For purposes of ACH Rule 3.10 and 4.1.1, 
authorization shall consist of a copy of the notice provided under 
paragraph (g) or (h), as applicable, and a copy of the Receiver's source 
document.

[64 FR 17487, Apr. 9, 1999, as amended at 67 FR 17903, Apr. 11, 2002]



Sec. 210.7  Federal Reserve Banks.

    (a) Fiscal Agents. Each Federal Reserve Bank serves as Fiscal Agent 
of the Treasury in carrying out its duties as the Federal Government's 
ACH Operator under this part. As Fiscal Agent, each Federal Reserve Bank 
shall be responsible only to the Treasury and not to any other party for 
any loss resulting from the Federal Reserve Bank's action, 
notwithstanding Section 11.5 and Article 8 of the ACH Rules. Each 
Federal Reserve Bank may issue operating circulars not inconsistent with 
this part which shall be binding on financial institutions.
    (b) Routing numbers. All routing numbers issued by a Federal Reserve 
Bank to an agency require the prior approval of the Service.



Sec. 210.8  Financial institutions.

    (a) Status as a Treasury depositary. The origination or receipt of 
an entry subject to this part does not render a financial institution a 
Treasury depositary. A financial institution shall not advertise itself 
as a Treasury depositary on such basis.
    (b) Liability. Notwithstanding ACH Rules 2.2.3, 2.4.5, 2.5.2, 4.2, 
and 7.7.2, if the Federal Government sustains a loss as a result of a 
financial institution's failure to handle an entry in accordance with 
this part, the financial institution shall be liable to the Federal 
Government for the loss, up to the amount of the entry, except as 
otherwise provided in this section. A financial institution shall not be 
liable to any third party for any loss or damage resulting directly or 
indirectly from an agency's error or omission in originating an entry. 
Nothing in this section shall affect any obligation or liability of a 
financial institution under Regulation E, 12 CFR part 205, or the 
Electronic Funds Transfer Act, 12 U.S.C. 1693 et seq.
    (1) An ODFI that transmits a debit entry to an agency without the 
prior written or similarly authenticated authorization of the agency, 
shall be liable to the Federal Government for the amount of the 
transaction, plus interest. The Service may collect such funds using 
procedures established in the applicable ACH Rules or by instructing a 
Federal Reserve Bank to debit the ODFI's account at the Federal Reserve 
Bank or the account of its designated correspondent. The interest charge 
shall be at a rate equal to the Federal funds rate plus two percent, and 
shall be assessed for each calendar day, from the day the Treasury 
General Account (TGA) was debited to the day the TGA is recredited with 
the full amount due.
    (2) An RDFI that accepts an authorization in violation of 
Sec. 210.4(a) shall be liable to the Federal Government for all credits 
or debits made in reliance on the authorization. An RDFI that transmits 
to an agency an authorization containing an incorrect account number 
shall be liable to the Federal Government for any resulting loss, up to 
the amount of the payment(s) made on the basis of the incorrect number. 
If an agency determines, after appropriate investigation, that a loss 
has occurred because an RDFI transmitted an authorization or 
notification of change

[[Page 56]]

containing an incorrect account number, the agency may instruct the 
Service to direct a Federal Reserve Bank to debit the RDFI's account for 
the amount of the payment(s) made on the basis of the incorrect number. 
The agency shall notify the RDFI of the results of its investigation and 
provide the RDFI with a reasonable opportunity to respond before 
initiating such a debit.
    (c) Acquittance of the financial institution. The final crediting of 
the correct amount of an entry received and processed by the Federal 
Reserve Bank and posted to the TGA shall constitute full acquittance of 
the ODFI and the originator for the amount of the entry. Full 
acquittance shall not occur if the entries do not balance, are 
incomplete, are incorrect, or are incapable of being processed. In the 
case of funds collected by an agency through origination of a debit 
entry, full acquittance shall not occur until the underlying payment 
becomes final.



               Subpart B--Reclamation of Benefit Payments



Sec. 210.9  Parties to the reclamation.

    (a) Agreement of RDFI. An RDFI's acceptance of a benefit payment 
pursuant to this part shall constitute its agreement to this subpart. By 
accepting a benefit payment subject to this part, the RDFI authorizes 
the debiting of the Federal Reserve Bank account utilized by the RDFI in 
accordance with the provisions of Sec. 210.10(e).
    (b) The Federal Government. In processing reclamations pursuant to 
this subpart, the Service shall act pursuant to the direction of the 
agency that certified the benefit payment(s) being reclaimed.



Sec. 210.10  RDFI liability.

    (a) Full liability. An RDFI shall be liable to the Federal 
Government for the total amount of all benefit payments received after 
the death or legal incapacity of a recipient or the death of a 
beneficiary unless the RDFI has the right to limit its liability under 
Sec. 210.11 of this part. An RDFI shall return any benefit payments 
received after the RDFI learns of the death or legal incapacity of a 
recipient or the death of a beneficiary, regardless of the manner in 
which the RDFI discovers such information. If the RDFI learns of the 
death or legal incapacity of a recipient or death of a beneficiary from 
a source other than notice from the agency, the RDFI shall immediately 
notify the agency of the death or incapacity.
    (b) Notice of reclamation. Upon receipt of a notice of reclamation, 
an RDFI shall provide the information required by the notice of 
reclamation and return the amount specified in the notice of reclamation 
in a timely manner.
    (c) Exception to liability rule. An RDFI shall not be liable for 
post-death benefit payments sent to a recipient acting as a 
representative payee or fiduciary on behalf of a beneficiary, if the 
beneficiary was deceased at the time the authorization was executed and 
the RDFI did not have actual or constructive knowledge of the death of 
the beneficiary.
    (d) Time limits. An agency that initiates a reclamation must do so 
within 120 calendar days after the date that the agency receives notice 
of the death or legal incapacity of a recipient or death of a 
beneficiary. An agency shall not reclaim any post-death or post-
incapacity payment(s) made more than six years prior to the most recent 
payment made by the agency to the recipient's account; provided, 
however, that if the account balance at the time the RDFI receives the 
notice of reclamation exceeds the total amount of all post-death or 
post-incapacity payments made by the agency during such six-year period, 
this limitation shall not apply and the RDFI shall be liable for the 
total amount of all payments made, up to the amount in the account at 
the time the RDFI receives the notice of reclamation and has had a 
reasonable opportunity (not to exceed one business day) to act on the 
notice.
    (e) Debit of RDFI's account. If an RDFI does not return the full 
amount of the outstanding total or any other amount for which the RDFI 
is liable under this subpart in a timely manner, the Federal Government 
will collect the amount outstanding by instructing the appropriate 
Federal Reserve Bank to debit the account utilized by the RDFI. The 
Federal Reserve Bank will

[[Page 57]]

provide advice of the debit to the RDFI.



Sec. 210.11  Limited liability.

    (a) Right to limit its liability. If an RDFI does not have actual or 
constructive knowledge of the death or legal incapacity of a recipient 
or the death of a beneficiary at the time it receives one or more 
benefit payments on behalf of the recipient, the RDFI's liability to the 
agency for those payments shall be limited to:
    (1) An amount equal to: (i) The amount in the account at the time 
the RDFI receives the notice of reclamation and has had a reasonable 
opportunity (not to exceed one business day) to act on the notice, plus 
any additional benefit payments made to the account by the agency before 
the RDFI responds in full to the notice of reclamation, or
    (ii) The outstanding total, whichever is less; plus
    (2) If the agency is unable to collect the entire outstanding total, 
an additional amount equal to:
    (i) The benefit payments received by the RDFI from the agency within 
45 days after the death or legal incapacity of the recipient or death of 
the beneficiary, or
    (ii) The balance of the outstanding total, whichever is less.
    (b) Qualification for limited liability. In order to limit its 
liability as provided in this section, an RDFI shall:
    (1) Certify that at the time the benefit payments were credited to 
or withdrawn from the account, the RDFI had no actual or constructive 
knowledge of the death or legal incapacity of the recipient or death of 
the beneficiary;
    (2) Certify the date the RDFI first had actual or constructive 
knowledge of the death or legal incapacity of the recipient or death of 
the beneficiary, regardless of how and where such information was 
obtained;
    (3)(i) Provide the name, address, and any other relevant information 
of the following person(s):
    (A) Co-owner(s) of the recipient's account;
    (B) Other person(s) authorized to withdraw funds from the 
recipient's account; and
    (C) Person(s) who withdrew funds from the recipient's account after 
the death or legal incapacity of the recipient or death of the 
beneficiary.
    (ii) If persons are not identified for any of these subcategories, 
the RDFI must certify that no such information is available and why no 
such information is available; and
    (4) Fully and accurately complete all certifications on the notice 
of reclamation and comply with the requirements of this part.
    (c) Payment of limited liability amount. If the RDFI qualifies for 
limited liability under this subpart, it shall immediately return to the 
Federal Government the amount specified in Sec. 210.11(a)(1). The agency 
will then attempt to collect the amount of the outstanding total not 
returned by the RDFI. If the agency is unable to collect that amount, 
the Federal Government will instruct the appropriate Federal Reserve 
Bank to debit the account utilized by the RDFI at that Federal Reserve 
Bank for the amount specified in Sec. 210.11(a)(2).
    (d) Violation of subpart B. An RDFI that fails to comply with any 
provision of this subpart in a timely and accurate manner, including but 
not limited to the certification requirements at Sec. 210.11(b) and the 
notice requirements at Sec. 210.13, shall be liable to the Federal 
Government for any loss resulting from its act or omission. Any such 
liability shall be in addition to the amount(s) for which the RDFI is 
liable under Sec. 210.10 or Sec. 210.11, as applicable.



Sec. 210.12  RDFI's rights of recovery.

    (a) Matters between the RDFI and its customer. This subpart does not 
authorize or direct an RDFI to debit or otherwise affect the account of 
a recipient. Nothing in this subpart shall be construed to affect the 
right an RDFI has under state law or the RDFI's contract with a 
recipient to recover any amount from the recipient's account.
    (b) Liability unaffected. The liability of the RDFI under this 
subpart is not affected by actions taken by the RDFI to recover any 
portion of the outstanding total from any party.

[[Page 58]]



Sec. 210.13  Notice to account owners.

    Provision of notice by RDFI. Upon receipt by an RDFI of a notice of 
reclamation, the RDFI immediately shall mail to the last known address 
of the account owner(s) or otherwise provide to the account owner(s) a 
copy of any notice required by the Service to be provided to account 
owners as specified in the Green Book. Proof that this notice was sent 
may be required by the Service.



Sec. 210.14  Erroneous death information.

    (a) Notification of error to the agency. If, after the RDFI responds 
fully to the notice of reclamation, the RDFI learns that the recipient 
or beneficiary is not dead or legally incapacitated or that the date of 
death is incorrect, the RDFI shall inform the agency that certified the 
underlying payment(s) and direct the Service to reclaim the funds in 
dispute.
    (b) Resolution of dispute. The agency that certified the underlying 
payment(s) and directed the Service to reclaim the funds will attempt to 
resolve the dispute with the RDFI in a timely manner. If the agency 
determines that the reclamation was improper, in whole or in part, the 
agency shall notify the RDFI and shall return the amount of the 
improperly reclaimed funds to the RDFI. Upon certification by the agency 
of an improper reclamation, the Service may instruct the appropriate 
Federal Reserve Bank to credit the account utilized by the RDFI at the 
Federal Reserve Bank in the amount of the improperly reclaimed funds.

   Appendix A to Part 210--Standard Disclosure for Point-of-Purchase 
                        Conversion--Posted Notice

                  Notice to Customers Presenting Checks

    Conversion of Checks--If you are presenting a check to the cashier, 
your check will be converted into an electronic fund transfer. When you 
hand your completed, signed check to the cashier, your check will be 
copied. The account information from your check will be used to make an 
electronic fund transfer from your account in the amount of the check. 
The cashier will void the check and return it to you.
    Insufficient Funds--The electronic fund transfer from your account 
will usually occur within 24 hours, which is faster than a check is 
normally processed. Do not present a check to the cashier unless there 
are sufficient funds available in your checking account. If the 
electronic fund transfer cannot be completed because of insufficient 
funds, we may try to make the transfer up to two more times [and we will 
charge you a one-time fee of $ ------, which we will also collect by 
electronic fund transfer].
    Authorization--By reading this notice and handing your check to the 
cashier, you authorize the conversion of your check into an electronic 
fund transfer. If the electronic fund transfer cannot be processed for 
technical reasons, you authorize us to process the copy of your original 
check.
    More Information--A pamphlet with more information about this 
process, including information about your rights under Federal law, is 
available from the cashier. [You may also call ------ or visit our 
Internet site at ------ for detailed information.]
    Note: This notice must be conspicuous. This means that the notice 
should be printed on a sign that is prominently posted at the location 
where checks are presented to a cashier, in such a way that it is 
clearly visible from several feet away to customers waiting to present 
checks.

[67 FR 17903, Apr. 11, 2002]

   Appendix B to Part 210--Standard Disclosure for Point-of-Purchase 
                    Conversion--Brochure or Pamphlet

    What is point-of-purchase check conversion? Point-of-purchase check 
conversion is the process of converting checks that customers present to 
cashiers into electronic fund transfers. ``Electronic fund transfer'' is 
the term used to refer to the process in which we electronically 
instruct your financial institution to transfer funds from your account 
to our account, rather than processing your check. When you hand a check 
to the cashier, your check is copied and the account information from 
your check is used to make an electronic fund transfer from your 
account. The cashier voids your check and returns it to you. By 
presenting your check at a location where a sign notifies you that your 
check will be converted, you authorize the conversion of your check into 
an electronic fund transfer in this manner.
    How quickly will funds be transferred from my account? The 
electronic fund transfer from your account will usually occur within 24 
hours, which is faster than a check is normally processed. Therefore, 
you should be sure that there are sufficient funds available in your 
checking account when you present your check. If the electronic fund 
transfer cannot be completed because there are insufficient funds in 
your account, we may try to

[[Page 59]]

make the transfer up to two more times [and we will impose a one-time 
fee of $------ against your account, which we will also collect by 
electronic fund transfer].
    Will the electronic fund transfer appear on my account statement? 
The electronic fund transfer from your account will be on the account 
statement that you receive from your financial institution. However, the 
transfer may be in a different place on your statement than the place 
where your checks normally appear. For example, it may appear under 
``other withdrawals'' or ``other transactions.'' The electronic fund 
transfer should be identified on your statement as ``[insert].''
    What if there is a problem with the electronic fund transfer? You 
should contact your financial institution immediately if you believe 
that the electronic fund transfer reported on your account statement was 
not properly authorized or is otherwise incorrect. Consumers have 
protections under a Federal law called the Electronic Fund Transfer Act 
for an unauthorized or incorrect electronic fund transfer.
    What if the electronic fund transfer cannot be processed? In rare 
instances, an electronic fund transfer cannot be processed for reasons 
other than insufficient funds. In these cases, we will process the copy 
of your original check. Different rights apply to the processing of the 
copy of the check than apply to an electronic fund transfer.
    [More detailed information about this process is available on our 
Internet site at ------ or by calling ------.]
    Note: This disclosure must be conspicuous. This means that it should 
be printed in reasonably large typeface. If this disclosure is combined 
with other information, it should be set off by contrasting color, by 
surrounding it with a box, or by using other means to ensure that it is 
prominently featured.

[67 FR 17903, Apr. 11, 2002]

  Appendix C to Part 210--Standard Disclosure for Lockbox Conversion--
                                 Notice

               Notice to Customers Making Payment by Check

    Authorization to Convert Your Check--If you send us a check to make 
your payment, your check will be converted into an electronic fund 
transfer. ``Electronic fund transfer'' is the term used to refer to the 
process in which we electronically instruct your financial institution 
to transfer funds from your account to our account, rather than 
processing your check. By sending your completed, signed check to us, 
you authorize us to copy your check and to use the account information 
from your check to make an electronic fund transfer from your account 
for the same amount as the check. If the electronic fund transfer cannot 
be processed for technical reasons, you authorize us to process the copy 
of your check.
    Insufficient Funds--The electronic fund transfer from your account 
will usually occur within 24 hours, which is faster than a check is 
normally processed. Therefore, make sure there are sufficient funds 
available in your checking account when you send us your check. If the 
electronic fund transfer cannot be completed because of insufficient 
funds, we may try to make the transfer up to two times [and we will 
charge you a one-time fee of $------, which we will also collect by 
electronic fund transfer].
    Transaction Information--The electronic fund transfer from your 
account will be on the account statement you receive from your financial 
institution. However, the transfer may be in a different place on your 
statement than the place where your checks normally appear. For example, 
it may appear under ``other withdrawals'' or ``other transactions.'' You 
will not receive your original check back from your financial 
institution. For security reasons, we will destroy your original check, 
but we will keep a copy of the check for recordkeeping purposes.
    Your Rights--You should contact your financial institution 
immediately if you believe that the electronic fund transfer reported on 
your account statement was not properly authorized or is otherwise 
incorrect. Consumers have protections under a Federal law called the 
Electronic Fund Transfer Act for an unauthorized or incorrect electronic 
fund transfer.
    Note: This disclosure must be conspicuous. This means that it should 
be printed in reasonably large typeface. If this disclosure is combined 
with other information, it should be set off by contrasting color, by 
surrounding it with a box, or by using other means to ensure that it is 
prominently featured.

[67 FR 17903, Apr. 11, 2002]



PART 211--DELIVERY OF CHECKS AND WARRANTS TO ADDRESSES OUTSIDE THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS--Table of Contents




Sec.
211.1  Withholding delivery of checks.
211.2  Claims for the release of withheld checks or for the proceeds 
          thereof.
211.3  Exceptions.
211.4  Implementing instructions.

    Authority: 5 U.S.C. 301; 31 U.S.C. 321 and 3329.

[[Page 60]]



Sec. 211.1  Withholding delivery of checks.

    (a) It is hereby determined that postal, transportation or banking 
facilities in general or local conditions in the Republic of Cuba and 
the Democratic People's Republic of Korea (North Korea) are such that 
there is not a reasonable assurance that a payee in those areas will 
actually receive checks or warrants drawn against funds of the United 
States, or agencies or instrumentalities thereof, and be able to 
negotiate the same for full value.
    (b) A check or warrant intended for delivery in any of the areas 
named in paragraph (a) of this section shall be withheld unless the 
check or warrant is specifically released by the Secretary of the 
Treasury.
    (c) Before a check or warrant drawn against funds blocked pursuant 
to the provisions of Executive Order No. 8389 (3 CFR, 1943 Cum. Supp.), 
as amended, and which remain blocked under the proviso clause of General 
License No. 101 of the Foreign Funds Control Regulations (31 CFR 
520.101) may be released, it will be necessary for a license authorizing 
the release to be issued by the Department of the Treasury, Office of 
Foreign Assets Control, pursuant to E.O. 8389, as amended. In this 
regard, attention is also directed to the following regulations issued 
by the Secretary of the Treasury:
    (1) The Foreign Assets Control Regulations issued on December 17, 
1950 (31 CFR part 500), pursuant to Executive Order 9193 (3 CFR, 1943 
Cum. Supp.), which prohibit transactions involving payments to nationals 
of the Democratic People's Republic of Korea (North Korea), the 
Socialist Republic of Vietnam, and Democratic Kampuchea, except to the 
extent that any such payments have been authorized by appropriate 
license,
    (2) The Cuban Assets Control Regulations issued on July 8, 1963 (31 
CFR part 515), pursuant to the same authority, which prohibit similar 
transactions with nationals of Cuba unless licensed, and
    (3) The Iranian Assets Control Regulations issued on November 14, 
1979 (31 CFR part 535), as amended on April 17, 1980, pursuant to 
Executive Orders 12170 and 12211, which prohibit transactions in 
property of the Iranian Government or its instrumentalities and 
transfers of funds to persons in Iran, except as authorized by 
appropriate license.
    (d) Powers of attorney for the receipt or collection of checks or 
warrants or for the proceeds of checks or warrants included within the 
determination of the Secretary of the Treasury set forth in paragraph 
(a) of this section will not be recognized.

[41 FR 15847, Apr. 15, 1976, as amended at 44 FR 51568, Sept. 4, 1979; 
45 FR 47678, July 16, 1980; 61 FR 41739, Aug. 12, 1996; 66 FR 63623, 
Dec. 10, 2001]



Sec. 211.2  Claims for the release of withheld checks or for the proceeds thereof.

    Claims for the release of checks or warrants withheld from delivery 
or for the proceeds thereof, shall be filed with the administrative 
agency which would have originally authorized such issuance, e.g., 
claims arising out of checks or warrants representing payments under 
laws administered by the Department of Veterans Affairs shall be filed 
with the Secretary of Veterans Affairs, Department of Veterans Affairs, 
Washington, DC 20420.

[61 FR 41739, Aug. 12, 1996]



Sec. 211.3  Exceptions.

    The regulations of this part do not apply to payments to foreign 
governments, nor to checks or warrants issued in payment of salaries or 
wages, or for goods or services purchased by the Government of the 
United States in foreign countries, unless such payments are subject to 
the Foreign Funds Control Regulations (31 CFR part 520), the Foreign 
Assets Control Regulations (31 CFR part 500), the Cuban Assets Control 
Regulations (31 CFR part 515), or the Iranian Assets Control Regulations 
(31 CFR part 535).

[45 FR 47678, July 16, 1980]



Sec. 211.4  Implementing instructions.

    Implementing instructions will be issued in Part IV, ``Disbursing,'' 
of the Treasury Fiscal Requirements Manual for Guidance of Departments 
and Agencies.

[41 FR 15847, Apr. 15, 1976]

[[Page 61]]



PART 215--WITHHOLDING OF DISTRICT OF COLUMBIA, STATE, CITY AND COUNTY INCOME OR EMPLOYMENT TAXES BY FEDERAL AGENCIES--Table of Contents




                     Subpart A--General Information

Sec.
215.1  Scope of part.
215.2  Definitions.

                          Subpart B--Procedures

215.3  Relationship of Standard Agreement to existing agreements.
215.4  Procedures for entering into a Standard Agreement.
215.5  Procedures for an agreement other than a Standard Agreement.

                      Subpart C--Standard Agreement

215.6  In general.
215.7  Parties.
215.8  Compliance by agencies.
215.9  Withholding certificates.
215.10  Change of legal residence by members of the Armed Forces.
215.11  Agency withholding procedures.
215.12  Miscellaneous provisions.
215.13  Supersession, amendment and termination provisions.

    Authority: 5 U.S.C. 5516, 5517, and 5520 and section 4 of Executive 
Order 11997, June 22, 1977 (42 FR 31759).

    Source: 42 FR 33731, July 1, 1977, unless otherwise noted.



                     Subpart A--General Information



Sec. 215.1  Scope of part.

    This part relates to agreements between the Secretary of the 
Treasury and States (including the District of Columbia), cities or 
counties for withholding of State, city or county income or employment 
taxes from the compensation of civilian Federal employees, and for the 
withholding of State income taxes from the compensation of members of 
the Armed Forces. Subpart A contains general information and 
definitions. Subpart B prescribes the procedures to be followed in 
entering into an agreement for the withholding of State, city or county 
income or employment taxes. Subpart C is the Standard Agreement which 
the Secretary will enter into with any State, city or county which 
qualifies to have tax withheld. Requests for deviations from this 
Standard Agreement will be agreed to by the Secretary only if the State, 
city or county's unique circumstances require it.



Sec. 215.2  Definitions.

    As used in this part:
    (a) Agency means each of the executive agencies and military 
departments (as defined in 5 U.S.C. 105 and 102, respectively) and the 
United States Postal Service; and in addition, for city or county 
withholding purposes only, all elements of the judicial branch.
    (b) City means any unit of general local government.
    (1) Which:
    (A) Is classified as a municipality by the United States Bureau of 
the Census, or
    (B) Is a town or township which, in the determination of the 
Secretary of the Treasury,
    (i) Possesses powers and performs functions comparable to those 
associated with municipalities,
    (ii) Is closely settled, and
    (iii) Contains within its boundaries no incorporated places as 
defined by the United States Bureau of the Census; and
    (2) Within the political boundaries of which five hundred or more 
persons are regularly employed by all agencies of the Federal 
Government.
    (c) City income or employment taxes means any form of tax for which, 
under a city ordinance:
    (1) Collection is provided by imposing on employers generally the 
duty of withholding sums from the pay of employees and making returns of 
the sums to a designated city officer, department, or instrumentality; 
and
    (2) The duty to withhold generally is imposed on the payment of 
compensation earned within the jurisdiction of the city in the case of 
employees whose regular place of employment is within such jurisdiction. 
Whether the tax is described as an income, wage, payroll, earnings, 
occupational license, or otherwise, is immaterial.
    (d) Compensation as applied to employees of an agency and members of 
the Armed Forces means wages as defined in 26 U.S.C. 3401(a) and 
regulations issued thereunder.

[[Page 62]]

    (e) County means any unit of local general Government which is 
classified as a county by the Bureau of the Census and within the 
political boundaries of which 500 or more persons are regularly employed 
by all agencies of the Federal Government.
    (f) County income or employment taxes means any form of tax for 
which, under a county ordinance:
    (1) Collection is provided by imposing on employers generally the 
duty of withholding sums from the pay of employees and making returns of 
the sums to a designated county officer, department, or instrumentality; 
and
    (2) The duty to withhold generally is imposed on the payment of 
compensation earned within the jurisdiction of the country in the case 
of employees whose regular place of employment is within such 
jurisdiction. Whether the tax is described as an income, wage, payroll, 
earnings, occupational license, or otherwise, is immaterial.
    (g) District of Columbia income tax means the income tax imposed 
under 47 District of Columbia Code, chapter 15, subchapter II.
    (h)(1) Employees for the purpose of State income tax withholding, 
means all employees of an agency, other than members of the armed 
forces. For city and county income or employment tax withholding, it 
means:
    (i) Employees of an agency;
    (ii) Members of the National Guard, participating in exercises or 
performing duty under 32 U.S.C. 502; or
    (iii) Members of the Ready Reserve, participating in scheduled 
drills or training periods, or serving on active duty for training under 
10 U.S.C. 270(a).


The term does not include retired personnel, pensioners, annuitants, or 
similar beneficiaries of the Federal Government, who are not performing 
active civilian service or persons receiving remuneration for services 
on a contract-fee basis.
    (2) Employees for purposes of District of Columbia income tax 
withholding, means employees as defined in 47 District of Columbia Code 
1551c(z).
    (i) Members of the Armed Forces means all individuals in active duty 
status (as defined in 10 U.S.C. 101(22)) in regular and reserve 
components of the Army, Navy, Air Force, Marine Corps, and Coast Guard, 
including members of the National Guard while participating in exercises 
or performing duty under 32 U.S.C. 502, and members of the Ready Reserve 
while participating in scheduled drills or training periods or serving 
on active duty for training under 10 U.S.C. 270(a).
    (j) Ordinance means an ordinance, order, resolution, or similar 
instrument which is duly adopted and approved by a city or county in 
accordance with the constitution and statutes of the state in which it 
is located and which has the force of law within such city or county.
    (k) Regular place of Federal employment means the official duty 
station, or other place, where an employee actually and normally (i.e., 
other than in a travel or temporary duty status) performs services, 
irrespective of residence.
    (l) Secretary means Secretary of the Treasury and Fiscal Assistant 
Secretary or his designee.
    (m) State means a State of the United States or the District of 
Columbia, unless otherwise specified.
    (n) State income tax means any form of tax for which, under a State 
status:
    (1) Collection is provided, either by imposing on employers 
generally the duty of withholding sums from the compensation of 
employees and making returns of such sums to the State or by granting to 
employers generally the authority to withhold sums from the compensation 
of employees, if any employee voluntarily elects to have such sums 
withheld; and
    (2) The duty to withhold generally is imposed, or the authority to 
withhold generally is granted, with respect to the compensation of 
employees who are residents of such State.

[42 FR 33731, July 1, 1977, as amended at 55 FR 3590, Feb. 2, 1990; 55 
FR 7494, Mar. 2, 1990]



                          Subpart B--Procedures



Sec. 215.3  Relationship of Standard Agreement to existing agreements.

    (a) Subpart C of this part is the Standard Agreement which the 
Secretary will enter into with a State, city or county. This Standard 
Agreement replaces all prior agreements between the Secretary and the 
State or

[[Page 63]]

city covering the withholding of income or employment taxes from the 
compensation of Federal employees. The Standard Agreement is essentially 
the same as the prior agreements. A State of city which currently is a 
party to an agreement with the Secretary covering the withholding of 
income or employment taxes from the compensation of Federal employees 
does not need to apply for a new agreement under this part. A State or 
city currently a party to an agreement will be presumed to have 
consented to be bound by the terms of the Standard Agreement (subpart 
C). If a State or city, which is currently a party, does not want to be 
bound by the Standard Agreement, it shall notify the Fiscal Assistant 
Secretary, Department of the Treasury, Washington, DC 20220, in writing 
over the signature of an officer authorized to bind contractually the 
State or city within 90 days of the effective date of this part. The 
procedures of Sec. 215.5 shall be followed by a State or city which 
proposes to be bound by an agreement other than the Standard Agreement.
    (b) The effective date for the replacement of existing State or city 
Standard Agreements by the Standard Agreement appearing as subpart C of 
this part is the effective date of this part. For current other-than-
Standard-Agreements, it is 120 days after the effective date of this 
part unless an earlier effective date is specifically agreed to or a new 
agreement which is other than the Standard Agreement of subpart C, is 
entered into as provided in this subpart.



Sec. 215.4  Procedures for entering into a Standard Agreement.

    (a) A State, city or county which does not have an existing 
agreement and wishes to enter into a Standard Agreement shall indicate 
in a letter its agreement to be bound by the provisions of subpart C. 
The letter shall be addressed to the Fiscal Assistant Secretary, 
Department of the Treasury, Washington, DC 20220, and be signed by an 
officer authorized to bind contractually the State, city or county. 
Copies of all applicable State laws, city or county ordinances and 
implementing regulations, instructions, and forms shall be enclosed. The 
letter shall also indicate the title and address of the official whom 
Federal agencies may contact to obtain forms and other information 
necessary to implement withholding.
    (b) Within 120 days of the receipt of the letter from the State, 
city or county official, the Fiscal Assistant Secretary will, by letter, 
notify the State, city or county:
    (1) That the Standard Agreement has been entered into as of the date 
of the Fiscal Assistant Secretary's letter, or
    (2) That an agreement cannot be entered into with the State, city or 
county and the reasons for that determination.

The withholding of the State, city or county income or employment tax 
shall commence within 90 days after the effective date of the agreement.



Sec. 215.5  Procedures for an agreement other than a Standard Agreement.

    (a) If a State, city or county proposes an agreement which varies 
from the Standard Agreement, the State, city or county shall follow the 
procedure in Sec. 215.4(a), except that its letter shall indicate which 
provisions of the Standard Agreement are not acceptable and the basis 
therefor, and propose substitute provisions.
    (b) Within 60 days of the receipt of the letter from the State, city 
or county official, the Fiscal Assistant Secretary will notify the 
State, city or county which substitute provisions may be included in the 
agreement. The State, city or county shall, by letter, notify the Fiscal 
Assistant Secretary if it accepts such an agreement. When accepted by 
the State, city or county the effective date of that agreement shall be 
the date such acceptance letter is received by the Fiscal Assistant 
Secretary. The withholding of the State, city or county income or 
employment tax shall commence within 90 days after the effective date of 
the agreement.



                      Subpart C--Standard Agreement



Sec. 215.6  In general.

    This subpart is the text of the Standard Agreement between the 
Secretary and the State, city or county. The

[[Page 64]]

terms used in this agreement are defined in Sec. 215.2 of this part.



Sec. 215.7  Parties.

    The parties to this agreement are the Secretary and the State, city 
or county which has entered into this agreement pursuant to 5 U.S.C. 
5516, 5517, or 5520 and Executive Order 11997 (June 22, 1977).



Sec. 215.8  Compliance by agencies.

    (a) In the case of an agreement with a State, the head of each 
agency is required to withhold State income taxes from the compensation 
of:
    (1) Employees of such agency who are subject to such taxes and whose 
regular place of Federal employment is within the State, and
    (2) Members of the Armed Forces who are subject to such taxes and 
who are legal residents of the State.

The foregoing is also applicable with respect to a State whose statutes 
permit but do not require withholding by employers, provided the 
employee voluntarily elects to have such tax withheld.
    (b) In the case of an agreement with a city or county, the head of 
each agency is required to withhold city or county income or employment 
taxes from the compensation of any employee of the agency who is subject 
to the tax, and
    (1) Whose regular place of Federal employment is within the city or 
county, or
    (2) Is a resident of the city or county.
    (c) In withholding taxes, the head of each agency, except as 
otherwise provided in this agreement, shall comply with the withholding 
provisions of the State, city or county income or employment tax 
statute, regulations, procedural instructions and reciprocal agreements 
related thereto.

(Pub. L. 95-365, 92 Stat. 599 (5 U.S.C. 5520))

[42 FR 33731, July 1, 1977, as amended at 44 FR 4670, Jan. 23, 1979]



Sec. 215.9  Withholding certificates.

    Each agency may require employees or members of the Armed Forces 
under its jurisdiction to complete a withholding certificate in order to 
calculate the amount to be withheld. The agency shall use the 
withholding certificate which the State, city or county has prescribed. 
Where the State, city or county has not prescribed a certificate, the 
agency may use a certificate approved by the Department of the Treasury. 
The agency may rely on the information in the certificate. Copies of 
completed certificates shall be provided to the taxing authority by 
agencies upon request.



Sec. 215.10  Change of legal residence by members of the Armed Forces.

    (a) In determining the legal residence of a member of the Armed 
Forces for tax withholding purposes, the head of an agency at all times 
may rely on the agency's current records, which may include a 
certificate of legal residence. The form of the certificate of legal 
residence shall be approved by the Department of the Treasury. A change 
of legal residence of a member of the Armed Forces shall become 
effective for tax withholding purposes only after a member of the Armed 
Forces completes a certificate indicating a new legal residence and 
delivers it to the agency.
    (b) Heads of agencies shall notify the State of prior legal 
residence of the member of the Armed Forces involved on a monthly basis 
concerning the change of the member's legal residence. The notification 
shall include the name, social security number, current mailing address 
and the new legal residence of such member of the Armed Forces. The 
effective date of the change in legal residence shall also be included 
in the notification.



Sec. 215.11  Agency withholding procedures.

    (a) State income tax shall be withheld only on the entire 
compensation of Federal employees and members of the Armed Forces. 
Nonresident employees, who under the State income tax law are required 
to allocate at least three-fourths of their compensation to the State, 
shall be subject to withholding on their entire compensation. 
Nonresident employees, who under the State income tax law are required 
to allocate less than three-fourths of their compensation to the State, 
may elect to:

[[Page 65]]

    (1) Have State income tax withheld on their entire compensation, or
    (2) Have no income tax withheld on their compensation.
    (b) In calculating the amount to be withheld from an employee's or a 
member's compensation, each agency shall use the method prescribed by 
the State income tax statute or city or county ordinance or a method 
which produces approximately the tax required to be withheld:
    (1) By the State income tax statute from the compensation of each 
employee or member of the Armed Forces subject to such income tax, or
    (2) By the city or county ordinance from the compensation of each 
employee subject to such income or employment tax.
    (c) Where it is the practice of a Federal agency under Federal tax 
withholding procedure to make returns and payment of the tax on an 
estimated basis, subject to later adjustment based on audited figures, 
this practice may be applied with respect to the State, city of county 
income or employment tax where the agency has made appropriate 
arrangements with the State, city or county income tax authorities.
    (d) Copies of Federal Form W-2, ``Wage and Tax Statement'', may be 
used for reporting withheld taxes to the State, city or county.
    (e) Withholding shall not be required on wages earned but unpaid at 
the date of an employee's or member's death.
    (f) Withholding of District of Columbia income tax shall not apply 
to pay of employees who are not residents of the District of Columbia as 
defined in 47 District of Columbia Code, chapter 15, subchapter II.



Sec. 215.12  Miscellaneous provisions.

    Nothing in this agreement shall be deemed:
    (a) To require collection by agencies of the United States of 
delinquent tax liabilities of Federal employees or members of the Armed 
Forces, or
    (b) To consent to the application of any provision of law of the 
State, city or county which has the effect of:
    (1) Imposing more burdensome requirements upon the United States 
than it imposes on other employers, or
    (2) Subjecting the United States or any of its officers or employees 
to any penalty or liability, or
    (c) To consent to procedures for withholding, filing of returns, and 
payment of the withheld taxes to a State, city or county that do not 
conform to the usual fiscal practices of agencies, or
    (d) To permit withholding of a city or county tax from the pay of a 
Federal employee who is not a resident of, or whose regular place of 
Federal employment is not within, the State in which the city or county 
is located, unless the employee consents to the withholding, or
    (e) To permit the withholding of city or county income or employment 
taxes from the pay of members of the Armed Forces of the United States, 
or
    (f) To allow agencies to accept compensation from a State, city or 
county for services performed in withholding of State or city or county 
income or employment taxes.

(Pub. L. 95-365, 92 Stat. 599 (5 U.S.C. 5520))

[42 FR 33731, July 1, 1977, as amended at 44 FR 4670, Jan. 23, 1979]



Sec. 215.13  Supersession, amendment and termination provisions.

    (a) This agreement supersedes any prior agreement between the 
Secretary of the Treasury and a State or city pursuant to 5 U.S.C. 5516, 
5517, or 5520.
    (b) This agreement shall be subject to any amendment of 5 U.S.C. 
5516, 5517, 5520 or Executive Order 11997, and any rules and regulations 
issued prusuant to them and amendments thereto.
    (c) This agreement may be terminated as to a specific State or city 
or county which is a party to this agreement by providing written notice 
to that effect to the Secretary at least 90 days prior to the proposed 
termination.



PART 223--SURETY COMPANIES DOING BUSINESS WITH THE UNITED STATES--Table of Contents




Sec.
223.1  Certificate of authority.
223.2  Application for certificate of authority.
223.3  Issuance of certificates of authority.
223.4  Deposits.
223.5  Business.

[[Page 66]]

223.6  Requirements applicable to surety companies.
223.7  Investment of capital and assets.
223.8  Financial reports.
223.9  Valuation of assets and liabilities.
223.10  Limitation of risk.
223.11  Limitation of risk: Protective methods.
223.12  Recognition as reinsurer.
223.13  Full penalty of the obligation regarded as the liability; 
          exceptions.
223.14  Schedules of single risks.
223.15  Paid up capital and surplus for Treasury rating purposes; how 
          determined.
223.16  List of certificate holding companies.
223.17  Revocation.
223.18  Performance of agency obligations.
223.19  Informal hearing on agency complaints.
223.20  Final decisions.
223.21  Reinstatement.
223.22  Fees for services of the Treasury Department.

    Authority: 80 Stat. 379; 5 U.S.C. 301; 6 U.S.C. 8.



Sec. 223.1  Certificate of authority.

    The regulations in this part will govern the issuance by the 
Secretary of the Treasury of certificates of authority to bonding 
companies to do business with the United States as sureties on, or 
reinsurers of, recognizances, stipulations, bonds, and undertakings, 
hereinafter sometimes called obligations, under the provisions of the 
Act of July 30, 1947 (61 Stat. 646, as amended; 6 U.S.C. 6-13), and the 
acceptance of such obligations from such companies so long as they 
continue to hold said certificates of authority.

[28 FR 1039, Feb. 2, 1963, as amended at 40 FR 6499, Feb. 12, 1975; 40 
FR 8335, Feb. 27, 1975]



Sec. 223.2  Application for certificate of authority.

    Every company wishing to apply for a certificate of authority shall 
address the Assistant Commissioner, Comptroller, Financial Management 
Service, U.S. Department of Treasury, Washington, DC 20226, who will 
notify the company of the data which the Secretary of the Treasury 
determines from time to time to be necessary to make application. In 
accord with 6 U.S.C. 8 the data will include a copy of the applicant's 
charter or articles of incorporation and a statement, signed and sworn 
to by its president and secretary, showing its assets and liabilities. A 
fee shall be transmitted with the application in accordance with the 
provisions of Sec. 223.22(a)(i).

[34 FR 20188, Dec. 24, 1969, as amended at 37 FR 1232, Jan. 27, 1972; 40 
FR 6499, Feb. 12, 1975; 43 FR 12678, Mar. 27, 1978; 49 FR 47002, Nov. 
30, 1984]



Sec. 223.3  Issuance of certificates of authority.

    (a) If, from the evidence submitted in the manner and form herein 
required, subject to the guidelines referred to in Sec. 223.9 the 
Secretary of the Treasury shall be satisfied that such company has 
authority under its charter or articles of incorporation to do the 
business provided for by the Act referred to in Sec. 223.1, and if the 
Secretary of the Treasury shall be satisfied from such company's 
financial statement and from any further evidence or information he may 
require, and from such examination of the company, at its own expense, 
as he may cause to be made, that such company has a capital fully paid 
up in cash of not less than $250,000, is solvent and financially and 
otherwise qualified to do the business provided for in said Act, and is 
able to keep and perform its contracts, he will, subject to the further 
conditions herein contained, issue a certificate of authority to such 
company, under the seal of the Treasury Department, to qualify as surety 
on obligations permitted or required by the laws of the United States to 
be given with one or more sureties, for a term expiring on the last day 
of June next following. The certificate of authority shall be renewed 
annually on the first day of July, so long as the company remains 
qualified under the law and the regulations in this part, and transmits 
to the Assistant Commissioner, Comptroller by March 1 each year the fee 
in accordance with the provisions of Sec. 223.22(a)(3).
    (b) If a company meets the requirements for a certificate of 
authority as an acceptable surety on Federal bonds in all respects 
except that it is a United States branch of a company not incorporated 
under the laws of the United States or of any State, or it is limited by 
its articles of incorporation or corporate charter to reinsure business 
only, it may be issued a certificate of authority as a reinsuring 
company

[[Page 67]]

on Federal bonds. The fees for initial application and renewal of a 
certificate as a reinsuring company shall be the same as the fees for a 
certificate of authority as an acceptable surety on Federal bonds.

[33 FR 8390, June 6, 1968, as amended at 34 FR 20188, Dec. 24, 1969; 37 
FR 1232, Jan. 27, 1972; 40 FR 6499 Feb. 12, 1975; 40 FR 8335, Feb. 27, 
1975; 42 FR 8637, Feb. 11, 1977; 43 FR 12678, Mar. 27, 1978; 43 FR 
39089, Sept. 1, 1978; 49 FR 47002, Nov. 30, 1984]



Sec. 223.4  Deposits.

    No such company will be granted authority to do business under the 
provisions of the act referred to in Sec. 223.1 unless it shall have and 
maintain on deposit with the Insurance Commissioner. or other proper 
financial officer, of the State in which it is incorporated, or of any 
other State of the United States, for the protection of claimants, 
including all its policyholders in the United States, legal investments 
having a current market value of not less than $100,000.

[36 FR 9630, May 27, 1971]



Sec. 223.5  Business.

    (a) The company must engage in the business of suretyship whether or 
not also making contracts in other classes of insurance, but shall not 
be engaged in any type or class of business not authorized by its 
charter or the laws of the State in which the company is incorporated. 
It must be the intention of the company to engage actively in the 
execution of surety bonds in favor of the United States.
    (b) No bond is acceptable if it has been executed (signed and/or 
otherwise validated) by a company or its agent in a State where it has 
not obtained that State's license to do surety business. Although a 
company must be licensed in the State or other area in which it executes 
a bond, it need not be licensed in the State or other area in which the 
principal resides or where the contract is to be performed. The term 
other area includes the Canal Zone, District of Columbia, Guam, Puerto 
Rico, and the Virgin Islands.

[40 FR 6499, Feb. 12, 1975]



Sec. 223.6  Requirements applicable to surety companies.

    Every company now or hereafter authorized to do business under the 
act of Congress referred to in Sec. 223.1 shall be subject to the 
regulations contained in this part.

[38 FR 22779, Aug. 24, 1973]



Sec. 223.7  Investment of capital and assets.

    The cash capital and other funds of every such company must be 
safely invested in accordance with the laws of the State in which it is 
incorporated and will be valued on the basis set forth in Sec. 223.9. 
The Secretary of the Treasury will periodically issue instructions for 
the guidance of companies with respect to investments and other matters. 
These guidelines may be updated from time to time to meet changing 
conditions in the industry.

[42 FR 8637, Feb. 11, 1977]



Sec. 223.8  Financial reports.

    (a) Every such company will be required to file with the Assistant 
Commissioner, Comptroller on or before the last day of January of each 
year, a statement of its financial condition made up as of the close of 
the preceding calendar year upon the annual statement blank adopted by 
the National Association of Insurance Commissioners, signed and sworn to 
by its president and secretary.

On or before the last days of April, July and October of each year, 
every such company shall file a financial statement with the Assistant 
Commissioner, Comptroller as of the last day of the preceding month. A 
form is prescribed by the Treasury for this purpose. The quarterly 
statement form of the National Association of Insurance Commissioners 
when modified to conform to the Treasury's requirements, may be 
substituted for the Treasury's form. The quarterly statement will be 
signed and sworn to by the company's president and secretary or their 
authorized designees.
    (b) Every such company shall furnish such other exhibits or 
information, and

[[Page 68]]

in such manner as the Secretary of the Treasury may at any time require.

[10 FR 2348, Mar. 1, 1945, as amended at 42 FR 8637, Feb. 11, 1977; 49 
FR 47002, Nov. 30, 1984]



Sec. 223.9  Valuation of assets and liabilities.

    In determining the financial condition of every such company, its 
assets and liabilities will be computed in accordance with the 
guidelines contained in the Treasury's current Annual Letter to 
Executive Heads of Surety Companies. However, the Secretary of the 
Treasury may value the assets and liabilities of such companies in his 
discretion. Credit will be allowed for reinsurance in all classes of 
risks if the reinsuring company holds a certificate of authority from 
the Secretary of the Treasury, or has been recognized as an admitted 
reinsurer in accord with Sec. 223.12.

[42 FR 8637, Feb. 11, 1977]



Sec. 223.10  Limitation of risk.

    Except as provided in Sec. 223.11, no company holding a certificate 
of authority shall underwrite any risk on any bond or policy on behalf 
of any individual, firm, association, or corporation, whether or not the 
United States is interested as a party thereto, the amount of which is 
greater than 10 percent of the paid-up capital and surplus of such 
company, as determined by the Secretary of the Treasury. That figure is 
hereinafter referred to as the underwriting limitation.

[34 FR 20188, Dec. 24, 1969]



Sec. 223.11  Limitation of risk: Protective methods.

    The limitation of risk prescribed in Sec. 223.10 may be complied 
with by the following methods:
    (a) Coinsurance. Two or more companies may underwrite a risk on any 
bond or policy, the amount of which does not exceed their aggregate 
underwriting limitations. Each company shall limit its liability upon 
the face of the bond or policy, to a definite specified amount which 
shall be within its underwriting limitation.
    (b) Reinsurance. (1) In respect to bonds running to the United 
States, liability in excess of the underwriting limitation shall be 
reinsured within 45 days from the date of execution and delivery of the 
bond with one or more companies holding a certificate of authority from 
the Secretary of the Treasury. Such reinsurance shall not be in excess 
of the underwriting limitation of the reinsuring company. Where 
reinsurance is contemplated, Federal agencies may accept a bond from the 
direct writing company in satisfaction of the total bond requirement 
even though it may exceed the direct writing company's underwriting 
limitation. Within the 45 day period, the direct writing company shall 
furnish to the Federal agency any necessary reinsurance agreements. 
However, a Federal agency may, at its discretion, require that 
reinsurance be obtained within a lesser period than 45 days, and may 
require completely executed reinsurance agreements in hand before making 
a final determination that any bond is acceptable. Reinsurance may 
protect bonds required to be furnished to the United States by the 
Miller Act (40 U.S.C. 270a through 270d) covering contracts for the 
construction, alteration, or repair of any public building or public 
work of the United States, as well as other types of Federal bonds. Use 
of reinsurance or coinsurance to protect such bonds is at the discretion 
of the direct writing company. Reinsurance shall be executed on 
reinsurance agreement forms (Standard Form 273 for Miller Act 
Performance bonds (formerly form No. TFS 6317), Standard Form 274 for 
Miller Act Payment bonds (formerly form No. TFS 6318), and Standard Form 
275 for other types of Federal bonds (formerly form No. TFS 6319)). 
Federal bond-approving officers may obtain the forms by submitting a 
requisition in FEDSTRIP/MILSTRIP format to the General Services 
Administration regional office providing support to the requesting 
Government organization. In addition, the forms are available to 
authorized sureties and reinsurers from the Superintendent of Documents, 
Government Printing Office, Stop: SSMC, Washington, DC 20402.
    (2) In respect to risks covered by bonds or policies not running to 
the United States, liability in excess of the

[[Page 69]]

underwriting limitation shall be reinsured within 45 days from the date 
of execution and delivery of the bond or policy with:
    (i) One or more companies holding a certificate of authority from 
the Secretary of the Treasury as an acceptable surety on Federal bonds 
or one or more companies holding a certificate of authority as an 
acceptable reinsuring company on such bonds, or
    (ii) One or more companies recognized as an admitted reinsurer in 
accord with Sec. 223.12, or
    (iii) A pool, association, etc., to the extent that it is composed 
of such companies, or
    (iv) An instrumentality or agency of the United States which is 
permitted by Federal law or regulation to execute reinsurance contracts.
    (3) No certificate-holding company may cede to a reinsuring company 
recognized under Sec. 223.12 any risk in excess of 10 percent of the 
latter company's paid-up capital and surplus.
    (c) Other methods. In respect to all risks other than Miller Act 
performance and payment bonds running to the United States, which must 
be coinsured or reinsured in accord with paragraph (a) or (b)(1) of this 
section respectively, the excess liability may otherwise be protected:
    (1) By the deposit with the company in pledge, or by conveyance to 
it in trust for its protection, of assets admitted by the Treasury the 
current market value of which is at least equal to the liability in 
excess of its underwriting limitation, or
    (2) If such obligation was incurred on behalf of or on account of a 
fiduciary holding property in a trust capacity, by a joint control 
agreement which provides that the whole or a sufficient portion of the 
property so held may not be disposed of or pledged in any way without 
the consent of the insuring company.

[34 FR 20188, Dec. 24, 1969, as amended at 40 FR 6499, Feb. 12, 1975; 41 
FR 10605, Mar. 12, 1976; 42 FR 8637, Feb. 11, 1977; 43 FR 39089, Sept. 
1, 1978]



Sec. 223.12  Recognition as reinsurer.

    (a) Application by U.S. company. Any company organized under the 
laws of the United States or of any State thereof, wishing to apply for 
recognition as an admitted reinsurer (except on excess risks running to 
the United States) of surety companies doing business with the United 
States, shall file the following data with the Assistant Comptroller for 
Auditing and shall transmit therewith the fee in accordance with the 
provisions of Sec. 223.22(a)(2):
    (1) A certified copy of its charter or articles of incorporation, 
and
    (2) A certified copy of a license from any State in which it has 
been authorized to do business, and
    (3) A copy of the latest available report of its examination by a 
State Insurance Department, and
    (4) A statement of its financial condition, as of the close of the 
preceding calendar year, on the annual statement form of the National 
Association of Insurance Commissioners, signed and sworn to by two 
qualified officers of the company, showing that it has a capital stock 
paid up in cash of not less than $250,000, in the case of a stock 
insurance company, or has net assets of not less than $500,000 over and 
above all liabilities, in the case of a mutual insurance company, and
    (5) Such other evidence as the Secretary of the Treasury may 
determine necessary to establish that it is solvent and able to keep and 
perform its contracts.
    (b) Application by a U.S. branch. A U.S. branch of an alien company 
applying for such recognition shall file the following data with the 
Assistant Commissioner, Comptroller and shall transmit therewith the fee 
in accordance with the provisions of Sec. 223.22(a)(2):
    (1) The submissions listed in paragraphs (a) (1) through (5) of this 
section, except that the financial statement of such branch shall show 
that it has net assets of not less than $250,000 over and above all 
liabilities, and
    (2) Evidence satisfactory to the Secretary of the Treasury to 
establish that it has on deposit in the United States not less than 
$250,000 available to its policyholders and creditors in the United 
States.
    (c) Financial reports. Each company recognized as an admitted 
reinsurer shall file with the Assistant Commissioner, Comptroller on or 
before the

[[Page 70]]

first day of March of each year its financial statement and such 
additional evidence as the Secretary of the Treasury determines 
necessary to establish that the requirements of this section are being 
met. A fee shall be transmitted with the foregoing data, in accordance 
with the provisions of Sec. 223.22(a)(4).

[34 FR 20189, Dec. 24, 1969, as amended at 37 FR 1232, Jan. 27, 1972; 40 
FR 6499, Feb. 12, 1975; 43 FR 12678, Mar. 27, 1978; 49 FR 47002, Nov. 
30, 1984]



Sec. 223.13  Full penalty of the obligation regarded as the liability; exceptions.

    In determining the limitation prescribed in this part, the full 
penalty of the obligation will be regarded as the liability, and no 
offset will be allowed on account of any estimate of risk which is less 
than such full penalty, except in the following cases:
    (a) Appeal bonds; in which case the liability will be regarded as 
the amount of the judgment appealed from, plus 10 percent of said amount 
to cover interest and costs.
    (b) Bonds of executors, administrators, trustees, guardians, and 
other fiduciaries, where the penalty of the bond or other obligation is 
fixed in excess of the estimated value of the estate; in which cases the 
estimated value of the estate, upon which the penalty of the bond was 
fixed, will be regarded as the liability.
    (c) Credit will also be allowed for indemnifying agreements executed 
by sole heirs or beneficiaries of an estate releasing the surety from 
liability.
    (d) Contract bonds given in excess of the amount of the contract; in 
which cases the amount of the contract will be regarded as the 
liability.
    (e) Bonds for banks or trust companies as principals, conditioned to 
repay moneys on deposit, whereby any law or decree of a court, the 
amount to be deposited shall be less than the penalty of the bond; in 
which cases the maximum amount on deposit at any one time will be 
regarded as the liability.

[Dept. Circ. 297, July 5, 1922]



Sec. 223.14  Schedules of single risks.

    During the months of January, April, July, and October of each year 
every company will be required to report to the Secretary of the 
Treasury every obligation which it has assumed during the 3 months 
immediately preceding, the penal sum of which is greater than 10 percent 
of its paid up capital and surplus, together with a full statement of 
the facts which tend to bring it within the provisions of this part, on 
a form suitable for the purpose.

[Dept. Circ. 297, July 5, 1922]



Sec. 223.15  Paid up capital and surplus for Treasury rating purposes; how determined.

    The amount of paid up capital and surplus of any such company shall 
be determined on an insurance accounting basis under the regulations in 
this part, from the company's financial statements and other 
information, or by such examination of the company at its own expense as 
the Secretary of the Treasury may deem necessary or proper.

[42 FR 8637, Feb. 11, 1977]



Sec. 223.16  List of certificate holding companies.

    A list of qualified companies is published annually as of July 1 in 
Department Circular No. 570, Companies Holding Certificates of Authority 
as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring 
Companies, with information as to underwriting limitations, areas in 
which licensed to transact surety business and other details. If the 
Secretary of the Treasury shall take any exceptions to the annual 
financial statement submitted by a company, he shall, before issuing 
Department Circular 570, give a company due notice of such exceptions. 
Copies of the Circular are available from the Assistant Commissioner, 
Comptroller upon request. Selection of a particular qualified company 
from among all companies holding certificates of authority is 
discretionary with the principal required to furnish bond.

[34 FR 20189, Dec. 24, 1969, as amended at 40 FR 6499, Feb. 12, 1975; 42 
FR 8637, Feb. 11, 1977; 49 FR 47002, Nov. 30, 1984]

[[Page 71]]



Sec. 223.17  Revocation.

    Whenever it appears that a company is not complying with the 
requirements of 6 U.S.C. 6-13 and of the regulations in this part, the 
Secretary of the Treasury will:
    (a) In all cases notify the company of the facts or conduct which 
indicate such failure, and provide opportunity to the company to 
respond, and
    (b) In those cases where the public interest in the constant 
financial stability of such a company allows, also provide opportunity 
to the company to demonstrate or achieve compliance with those 
requirements. The Secretary shall revoke a company's certificate of 
authority with advice to it if:
    (1) The company does not respond satisfactorily to his notification 
of noncompliance, or
    (2) The company, provided an opportunity to demonstrate or achieve 
compliance, fails to do so.

[34 FR 20189, Dec. 24, 1969. Redesignated at 38 FR 22779, Aug. 24, 1973, 
as amended at 42 FR 8637, Feb. 11, 1977]



Sec. 223.18  Performance of agency obligations.

    (a) Every company shall promptly honor its bonds naming the United 
States or one of its agencies or instrumentalities as obligee. If an 
agency's demand upon a company on behalf of the agency or laborers, 
materialmen, or suppliers (on payment bonds), for payment of a claim 
against it is not settled to the agency's satisfaction, and the agency's 
review of the situation thereafter establishes that the default is clear 
and the company's refusal to pay is not based on adequate grounds, the 
agency may make a report to the Secretary of the Treasury, including a 
copy of the subject bond, the basis for the claim against the company, a 
chronological resume of efforts to obtain payment, a statement of all 
reasons offered for non-payment, and a statement of the agency's views 
on the matter.
    (b) On receipt of such report from the Federal agency the Secretary 
will, if the circumstances warrant, notify the company concerned that 
the agency report may demonstrate that the company is not keeping and 
performing its contracts and that, in the absence of satisfactory 
explanation, the company's default may preclude the renewal of the 
company's certificate of authority, or warrant prompt revocation of the 
existing certificate. This notice will provide opportunity to the 
company to demonstrate its qualification for a continuance of the 
certificate of authority.

[34 FR 20189, Dec. 24, 1969. Redesignated at 38 FR 22779, Aug. 24, 1973, 
as amended at 42 FR 8638, Feb. 11, 1977]



Sec. 223.19  Informal hearing on agency complaints.

    (a) Request for informal hearing. If a company determines that the 
opportunity to make known its views, as provided for under 
Sec. 223.18(b), is inadequate, it may, within 20 business days of the 
date of the notice required by Sec. 223.18(b), request, in writing, that 
the Secretary of the Treasury convene an informal hearing.
    (b) Purpose. As soon as possible after a written request for an 
informal hearing is received, the Secretary of the Treasury shall 
convene an informal hearing, at such time and place as he deems 
appropriate, for the purpose of determining whether revocation of the 
company's certificate of authority is justified.
    (c) Notice. The company shall be advised, in writing, of the time 
and place of the informal hearing and shall be directed to bring all 
documents, records and other information as it may find necessary and 
relevant to substantiate its refusal to settle the claims made against 
it by the Federal agency making the report under Sec. 223.18(a).
    (d) Conduct of hearings. The hearing shall be conducted by a hearing 
officer appointed by the Secretary. The company may be represented by 
counsel and shall have a fair opportunity to present any relevant 
material and to examine the agency's evidence. Formal rules of evidence 
will not apply at the informal hearing.
    (e) Report. Within 30 days after the informal hearing, the hearing 
officer shall make a written report to the Secretary setting forth his 
findings, the

[[Page 72]]

basis for his findings, and his recommendations. A copy of the report 
shall be sent to the company.

[38 FR 22779, Aug. 24, 1973]



Sec. 223.20  Final decisions.

    If, after review of the case file, it is the judgment of the 
Secretary that the complaint was unfounded, the Secretary shall dismiss 
the complaint by the Federal agency concerned and shall so notify the 
company. If, however, it is the judgment of the Secretary that the 
company has not fulfilled its obligations to the complainant agency, he 
shall notify the company of the facts or conduct which indicate such 
failure and allow the company 20 business days from the date of such 
notification to demonstrate or achieve compliance. If no showing of 
compliance is made within the period allowed, the Secretary shall either 
preclude renewal of a company's certificate of authority or revoke it 
without further notice.

[38 FR 22779, Aug. 24, 1973, as amended at 42 FR 8638, Feb. 11, 1977]



Sec. 223.21  Reinstatement.

    If, after one year from the date of the expiration or the revocation 
of the certificate of authority, under Sec. 223.20 a company can show 
that the basis for the non-renewal or revocation has been eliminated and 
that it can comply with the requirements of 6 U.S.C. 6-13 and the 
regulations in this part, a new certificate of authority shall be issued 
without prejudice.

[38 FR 22779, Aug. 24, 1973, as amended at 42 FR 8638, Feb. 11, 1977]



Sec. 223.22  Fees for services of the Treasury Department.

    (a) Fees shall be imposed an collected, for the services listed in 
paragraphs (a) (1) through (4) of this section which are performed by 
the Treasury Department, regardless of whether the action requested is 
granted or denied. The payee of the check or other instrument shall be 
the Financial Management Service, Treasury Department. The amount of the 
fee will be based on which of the following categories of service is 
requested:
    (1) Examination of a company's application for a certificate of 
authority as an acceptable surety on Federal bonds or for a certificate 
of authority as an acceptable reinsuring company on such bonds (see 
Sec. 223.2);
    (2) Examination of a company's application for recognition as an 
admitted reinsurer (except on excess risks running to the United States) 
of surety companies doing business with the United States (see 
Sec. 223.12(a) and (b));
    (3) Determination of a company's continuing qualifications for 
annual renewal of its certificate of authority (see Sec. 223.3); or
    (4) Determination of a company's continuing qualifications for 
annual renewal of its authority as an admitted reinsurer (see 
Sec. 223.12(c)).
    (b) In a given year a uniform fee will be collected from every 
company requesting a particular category of service, e.g., determination 
of a company's continuing qualifications for annual renewal of its 
certificate of authority. However, the Treasury Department reserves the 
right to redetermine the amounts of fees annually. Fees are determined 
in accordance with Office of Management and Budget Circular A-25, as 
amended.
    (c) Specific fee information may be obtained from the Assistant 
Commissioner, Comptroller at the address shown in Sec. 223.2. In 
addition, a notice of the amount of a fee referred to in Sec. 223.22(a) 
(1) through (4) will be published in the Federal Register as each change 
in such fee is made.

[43 FR 12678, Mar. 27, 1978, as amended at 49 FR 47001 and 47002, Nov. 
30, 1984]



PART 224--FEDERAL PROCESS AGENTS OF SURETY COMPANIES--Table of Contents




Sec.
224.1  Statutory provision.
224.2  Appointment of process agents.
224.3  Powers of attorney appointing process agents; with whom filed.
224.4  Power of attorney; form.
224.5  Process agents; termination of authority.
224.6  United States district courts; location of divisional offices.

    Authority: 31 U.S.C. 9306.

[[Page 73]]



Sec. 224.1  Statutory provision.

    The rules and regulations in this part are prescribed for carrying 
into effect 31 U.S.C. 9306.

[61 FR 26840, May 29, 1996]



Sec. 224.2  Appointment of process agents.

    (a) Generally. Companies should especially note that the law 
prohibits the doing of business under the provisions of this act beyond 
the State under whose laws it was incorporated and in which its 
principal office is located until an agent is appointed to accept 
Federal process on behalf of the company. An agent for the service of 
Federal process should be appointed:
    (1) In the district where the principal resides;
    (2) In the district where the obligation is to be undertaken and 
performed; and
    (3) Also in the District of Columbia where the bond is returnable 
and filed.

The appointment of process agents pursuant to a local State statute is 
not compliance with the Federal law. Although one and the same agent may 
serve under both the State and Federal appointments, he must, 
nevertheless, be especially designated to accept Federal process. It 
should also be noted that the agent so designated must reside within the 
jurisdiction of the court for the judicial district wherein such 
suretyship is to be undertaken, and must be citizen of the State, 
Territory, or District of Columbia in which such court is held. 
Consequently an agent residing in the northern district of New York 
could not at the same time serve as the company's Federal process agent 
for the southern district of that State.
    (b) Agent required in District of Columbia. Every company must, 
immediately upon receipt of its initial authority from the Secretary of 
the Treasury, appoint a suitable person resident in the District of 
Columbia on whom may be served all lawful process issued by the Federal 
Courts in said district. This appointment is required whether or not the 
company contemplates the writing of bonds in favor of the United States 
to be undertaken within the District of Columbia.
    (c) Agent not required in State of incorporation where principal 
office is located. The law does not require the appointment of Federal 
process agents for the State under whose laws the company is 
incorporated, and in which its principal office is located.

[17 FR 2605, Mar. 26, 1952]



Sec. 224.3  Powers of attorney appointing process agents; with whom filed.

    The clerk of the United States district court at the main office in 
each judicial district must be furnished with a sufficient number of 
authenticated copies of the power of attorney appointing an agent for 
the service of process to enable him to file a copy in his office, and 
at each other place where a divisional office of the court is located 
within the judicial district for which the process agent has been 
appointed. Such copies may be authenticated at the home office of the 
company by its officers duly authorized, and sworn to before an officer 
legally authorized to administer oaths. Where the charter of bylaws of 
the corporation do not confer authority on its executive officers to 
give such powers of attorney the authenticated copy filed with the clerk 
of the court must be accompanied by a certified copy of the resolution 
duly adopted by its board of directors or other governing body showing 
that the officer making the appointment had authority to do so.

[17 FR 2606, Mar. 26, 1952]



Sec. 224.4  Power of attorney; form.

    In making such appointments a power of attorney should be used 
substantially in the following form:

    Know all men by these presents, that the ----------------a 
corporation existing under and by virtue of the laws of the State of --
-------------- and having its principal office at ------------, desiring 
to comply with section 9306 of Title 31, United States Code, hereby 
constitutes and appoints ----------, of ----------------, its true and 
lawful attorney and agent in and for the ---------- judicial district of 
--------------, upon whom all lawful process in any action or proceeding 
against the company in said district may be served in like manner and 
with the same effect as if the company existed therein, and who is 
authorized to enter an appearance in its behalf.

[[Page 74]]

    In witness whereof the said company, pursuant to proper authority of 
its board of directors or other governing body, has caused these 
presents to be subscribed by its ------------ president and its 
corporate seal to be affixed hereto this ------ day of ----------, ad. 
19--
    [Corporate Seal] --------------------------
                                                              President,
State of ------------------
    County of --------------------, ss:
    On this ------------ day of ------------, ad. 19--, before me 
appeared --------------------, president of the -------------------- 
Company, with whom I am personally acquainted, who being duly sworn, 
says that he is -------------------- president of the ------------------
-- Company; that he knows the corporate seal of the company; that the 
seal affixed to the foregoing instrument is such corporate seal; that it 
was affixed by order of the board of directors or other governing body 
of said company, and that he signed said instrument as -------------- 
president of said company by like authority.
    [Notarial Seal]

[Dept. Cir. Ltr. 4, Nov. 15, 1930, as amended at 49 FR 14340, Apr. 11, 
1984]



Sec. 224.5  Process agents; termination of authority.

    Whenever the authority of a process agent is terminated by reason of 
revocation, disability, removal from the district, or any other cause, 
it shall be the duty of the company to immediately make a new 
appointment.

[40 FR 51194, Nov. 4, 1975. Redesignated at 61 FR 26840, May 29, 1996]



Sec. 224.6  United States district courts; location of divisional offices.

    A list of the divisional offices of the court in each judicial 
district where powers of attorney should be filed may be obtained from 
the Surety Bond Branch, Financial Management Service, Department of the 
Treasury, 3700 East-West Highway, Room 6F04, Hyattsville, MD 20782.

[61 FR 26840, May 29, 1996]



PART 225--ACCEPTANCE OF BONDS SECURED BY GOVERNMENT OBLIGATIONS IN LIEU OF BONDS WITH SURETIES--Table of Contents




Sec.
225.1  Scope.
225.2  Definitions.
225.3  Pledge of Government obligations in lieu of a bond with surety or 
          sureties.
225.4  Pledge of book-entry Government obligations.
225.5  Pledge of definitive Government obligations.
225.6  Payment of interest.
225.7  Custodian duties and responsibilities.
225.8  Bond official duties and responsibilities.
225.9  Return of Government obligations to obligor.
225.10  Other agency practices and authorities.
225.11  Courts.

    Authority: 12 U.S.C. 391; 31 U.S.C. 321, 9301 and 9303.

    Source: 64 FR 4763, Jan. 29, 1999, unless otherwise noted.



Sec. 225.1  Scope.

    The regulation in this part applies to Government agencies accepting 
bonds secured by Government obligations in lieu of bonds with sureties. 
The Financial Management Service (FMS) is the representative of the 
Secretary of the Treasury (Secretary) in all matters concerning this 
part unless otherwise specified. The Commissioner of the FMS may issue 
procedural instructions implementing this regulation.



Sec. 225.2  Definitions.

    For purposes of this part:
    Agency means a department, agency, or instrumentality of the United 
States Government.
    Authenticate instructions means to verify that the instructions 
received are from a bond official.
    Bearer means that ownership of a Government obligation is not 
recorded. Title to such an obligation passes by delivery without 
endorsement and without notice. A bearer obligation is payable on its 
face to the holder at either maturity or call.
    Bond means an executed written instrument, which guarantees the 
fulfillment of an obligation to the United States and sets forth the 
terms, conditions, and stipulations of the obligation.
    Bond official means an agency official having authority under 
Federal law or regulation to approve a bond with surety or sureties and 
to approve a bond secured by Government obligations.

[[Page 75]]

    Book-entry means that the issuance and maintenance of a Government 
obligation is represented by an accounting entry or electronic record 
and not by a certificate.
    Custodian means a Federal Reserve Bank or an entity within the 
United States designated by such Federal Reserve Bank under terms and 
conditions prescribed by such Federal Reserve Bank, a depositary 
specifically designated by the Secretary of the Treasury for purposes of 
this part, or such other entities as the Secretary of the Treasury may 
designate for purposes of this part.
    Definitive means that a Government obligation is issued in engraved 
or printed form.
    Depositary includes, but is not limited to:
    (1) Any insured bank as defined in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813) or any bank which is eligible to make 
application to become an insured bank under section 5 of such Act (12 
U.S.C. 1815);
    (2) Any mutual savings bank as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813) or any bank which is eligible to 
make application to become an insured bank under section 5 of such Act 
(12 U.S.C. 1815);
    (3) Any savings bank as defined in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813) or any bank which is eligible to make 
application to become an insured bank under section 5 of such Act (12 
U.S.C. 1815);
    (4) Any insured credit union as defined in section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752) or any credit union which is 
eligible to make application to become an insured credit union under 
section 201 of such Act (12 U.S.C. 1781);
    (5) Any savings association as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813) which is an insured depository 
institution (as defined in such Act) (12 U.S.C. 1811 et seq.) or is 
eligible to apply to become an insured depository institution under the 
Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.); and
    (6) Any agency or branch of a foreign bank as defined in section 
1(b) of the International Banking Act, as amended (12 U.S.C. 3101).
    Federal Reserve means a Federal Reserve Bank and its branches.
    Government obligation means a public debt obligation of the United 
States Government and an obligation whose principal and interest is 
unconditionally guaranteed by the United States Government.
    Obligor includes, but is not limited to, an individual, a trust, an 
estate, a partnership, a corporation, and a sole proprietor.
    Officer authorized to certify assignment means the individual 
identified as a certifying individual at part 306, subpart F of this 
title.
    Person means an individual, a trust, an estate, a partnership, and a 
corporation.
    Pledge means a transfer of security interest in a Government 
obligation to a bond official's agency as collateral in lieu of a bond 
with a surety or sureties.
    Procedural instructions means the Treasury Financial Manual, as 
amended, published by the Financial Management Service.
    Registered means that ownership of a definitive Government 
obligation is listed in the issuer's records, and that the obligation is 
payable at maturity or call to the person in whose name the obligation 
is inscribed or to that person's assignee.
    Secretary means the Secretary of the Treasury.



Sec. 225.3  Pledge of Government obligations in lieu of a bond with surety or sureties.

    (a) General. An obligor required by Federal law or regulation to 
furnish a bond with surety or sureties may give in lieu thereof to a 
bond official any security acceptable under 31 U.S.C. 9301, as amended. 
The Secretary will designate classes of Government obligations 
acceptable under this part.
    (b) Bond. The bond, at a minimum, shall irrevocably authorize the 
bond official to collect, sell, assign, or transfer such Government 
obligations and any interest retained therefrom in the event of the 
obligor's default in performing any of the terms, conditions, or 
stipulations of such bond. Unless otherwise provided by law, the bond

[[Page 76]]

shall authorize the bond official to apply the proceeds from the sale, 
assignment, or transfer of such Government obligations, in whole or in 
part, to satisfy any costs incurred by the United States related to the 
default, and to apply any excess proceeds to satisfy any other claim of 
the United States against the obligor. The bond shall not include any 
obligations on custodians which are inconsistent with, or in addition 
to, the obligations in this part. The bond will provide that the bond 
official may retain any interest accruing upon any Government 
obligations, or direct that such interest be retained by the custodian.
    (c) Amount of Government obligations. The obligor shall pledge to 
the bond official Government obligations valued as required by 31 U.S.C. 
9303, as amended.
    (d) Avoiding frequent substitutions. To avoid the frequent 
substitution of Government obligations, the bond official may reject 
Government obligations which mature, or are redeemable, within one year 
from the date they are pledged to the bond official.
    (e) Acceptable Government obligations. Types and valuations of 
acceptable collateral security are addressed in 31 CFR part 380. For a 
current list of acceptable classes of securities and instruments 
described in 31 CFR part 380 and their valuations, see the Bureau of the 
Public Debt's web site at www.publicdebt.treas.gov.

[64 FR 4763, Jan. 29, 1999, as amended at 65 FR 55430, Sept. 13, 2000]



Sec. 225.4  Pledge of book-entry Government obligations.

    (a) General. Except as otherwise provided by the Secretary in 
procedural instructions, an obligor, or a depositary acting as agent or 
sub-agent for the obligor, or the bond official, shall arrange a pledge 
pursuant to the prior agreement and approval of the bond official, of 
book-entry Government obligations. The Government obligations must be 
transferred to an account for the benefit of the bond official. The 
custodian holding the Government obligations is not required to 
establish that the agreement and approval of the bond official has been 
obtained prior to such a transfer.
    (b) Receipt. Upon the transfer of Government obligations to an 
account for the benefit of the bond official, the custodian will 
promptly issue a receipt or an activity statement, or both, to the bond 
official and to the obligor or a depositary acting as agent or sub-agent 
for the obligor.
    (c) Effect of the transfer. Book-entry Government obligations 
credited to an account for the benefit of the bond official shall have 
the effect as provided in part 357 of this title, or in other applicable 
regulations.



Sec. 225.5  Pledge of definitive Government obligations.

    (a) Type and assignment. Definitive Government obligations may be in 
bearer or registered form, and shall be owned by the obligor.
    (1) Bearer Government obligations. The obligor shall pledge bearer 
Government obligations to the bond official with all unmatured interest 
coupons attached.
    (2) Registered Government obligations; assignment. The obligor shall 
pledge registered Government obligations in the obligor's name to the 
bond official by assignment in accordance with subpart F of part 306 of 
this title and other codified procedures for issuers that apply to 
assignment of the registered Government obligations, except that, when 
so authorized under such procedures, all assignments shall be made in 
blank.
    (b) Delivery to bond official; receipt. All deliveries of definitive 
Government obligations from the obligor to the bond official under this 
part shall be made at the risk and expense of the obligor. Upon receipt 
of definitive Government obligations, the bond official will issue the 
obligor a receipt.
    (c) Risk of loss; safekeeping. All definitive Government obligations 
held by the bond official will be held at the risk of the bond official. 
The bond official will keep safe all definitive Government obligations 
and may place them with a custodian.
    (d) Delivery to custodian; receipt. If the bond official is in 
receipt of definitive Government obligations, and then places those 
obligations with a custodian, the expense and risk of loss in delivery 
will rest with the bond official.

[[Page 77]]

Upon the placement of definitive Government obligations with a 
custodian, the custodian will issue the bond official a receipt. All 
definitive Government obligations held by the custodian will be held at 
the risk of the custodian.
    (e) Conversion to book-entry. (1) Treasury bonds, notes, 
certificates of indebtedness, or bills deposited with a Federal Reserve 
Bank under this part may be converted into book-entry Treasury 
obligations in accordance with part 306 of this title, and the pertinent 
provisions of that part shall apply to such Treasury obligations.
    (2) When converting definitive Government obligations to book-entry 
form, a Federal Reserve Bank will act pursuant to, and in accordance 
with, book-entry procedures for issuers that apply to the definitive 
Government obligations pledged to the bond official's agency, including 
those set forth in part 306 of this title.



Sec. 225.6  Payment of interest.

    (a) General. Except as otherwise provided in this section and 
Sec. 225.7(b), interest accruing upon Government obligations pledged to 
a bond official's agency in accordance with this part will be remitted 
to the obligor or a depositary acting as agent or sub-agent for the 
obligor.
    (b) Default. If the bond official determines that the obligor has 
defaulted, the bond official will retain any interest accruing upon 
Government obligations pledged to the bond official's agency or direct 
the custodian, in accordance with this part, to retain such interest. 
Unless otherwise provided by law, such interest will be available to 
satisfy any costs incurred by the United States related to the default, 
and any excess proceeds will be available to satisfy any other claim of 
the United States against the obligor.



Sec. 225.7  Custodian duties and responsibilities.

    (a) General. A custodian shall authenticate instructions received 
from a bond official and shall act in accordance with such authenticated 
instructions. The custodian assumes no liability and is without 
liability of any kind for acting in accordance with such authenticated 
instructions, except for the custodian's failure to exercise ordinary 
care. By providing a bond secured by Government obligations in lieu of a 
bond with surety or sureties, an obligor agrees not to hold either the 
custodian or the Secretary liable or responsible for the actions or 
inactions of a bond official or for carrying out a bond official's 
authenticated instructions.
    (b) Interest. Absent authenticated instructions from the bond 
official to retain interest, interest received by the custodian on 
Government obligations pledged to the bond official's agency in 
accordance with this part will be remitted in the regular course of 
business to the obligor or to a depositary acting as agent or sub-agent 
for the obligor.
    (c) Principal. Absent authenticated instructions from the bond 
official to retain the proceeds of matured Government obligations, a 
custodian will release to the obligor proceeds from matured Government 
obligations only if the obligor has deposited Government obligations 
acceptable under 31 U.S.C. 9301, as amended, in substitution for those 
which have matured.
    (d) Liquidation of Government obligations. A custodian will collect, 
sell, assign, or transfer Government obligations, including any interest 
therefrom, only in accordance with a bond official's authenticated 
instructions.
    (e) Application of proceeds of liquidated Government obligations. A 
custodian will apply the proceeds from the collection, sale, assignment, 
or transfer of Government obligations only in accordance with a bond 
official's authenticated instructions.



Sec. 225.8  Bond official duties and responsibilities.

    The bond official's duties and responsibilities are as follows:
    (a) Approving the bond secured by Government obligations after 
determining its sufficiency;
    (b) Verifying ownership of any registered definitive Government 
obligations given, and ensuring that those Government obligations are 
properly assigned;
    (c) Approving establishment of a book-entry account for the benefit 
of the bond official;

[[Page 78]]

    (d) Providing the custodian, when appropriate, with clear and 
concise instructions;
    (e) Taking all reasonable and appropriate steps to ensure that all 
procedures or transactions conform with the provisions of this part; and
    (f) Notifying the Secretary of the Treasury, or his designee, upon 
an obligor's default, and, unless otherwise provided by law, applying 
any part of the proceeds in excess of the amount required to assure 
payment of any costs incurred by the United States related to the 
default to satisfy any claim of the United States against the obligor.



Sec. 225.9  Return of Government obligations to obligor.

    (a) General. Except as provided in paragraph (b) of this section or 
as otherwise provided in this part, the bond official will return the 
Government obligations, and any interest retained therefrom, to the 
obligor, without written application from the obligor, when the bond 
official determines that the Government obligations are no longer 
required under the terms of the bond.
    (b) Miller Act payment bonds. The bond official will not return 
Government obligations to an obligor who has furnished to the bond 
official a payment bond if:
    (1) A person, who supplied the obligor with labor or materials and 
whom the obligor has not paid, files with the United States Government 
the application and affidavit provided for in the Miller Act (Act), as 
amended (40 U.S.C. 270a-270d), and the time provided in the Act for the 
person to commence suit against the obligor on the payment bond has not 
expired; or
    (2) A person commences a suit against the obligor within the time 
provided for in the Act, in which case the bond official will hold the 
Government obligations subject to the order of the court having 
jurisdiction of the suit; or
    (3) The bond official has actual knowledge of a claim against the 
obligor on the basis of the payment bond, in which case the bond 
official may return the Government obligations to the obligor when the 
bond official deems it appropriate.
    (c) Claim of the United States unaffected. Nothing in this section 
shall affect or impair the priority of any claim of the United States 
against Government obligations, or any right or remedy granted by the 
Miller Act or by this part to the United States in the event of an 
obligor's default on any term, condition, or stipulation of a bond.
    (d) Return of definitive Government obligations; risk of loss. 
Definitive Government obligations to be returned to the obligor will be 
forwarded at the obligor's risk and expense, either by the bond 
official, or by a custodian upon receipt of a bond official's 
authenticated instructions.



Sec. 225.10  Other agency practices and authorities.

    (a) Agency practices. Nothing in this part shall be construed as 
modifying the existing practices or duties of agencies in handling 
bonds, except to the extent made necessary under the terms of this part 
by reason of the acceptance of bonds secured by Government obligations.
    (b) Agency authorities. Nothing contained in this part shall affect 
the authority of agencies to receive Government obligations for security 
in cases authorized by other provisions of law.



Sec. 225.11  Courts.

    Nothing contained in this part shall affect the authority of a court 
over a Government obligation given as security in a civil action.



PART 226--RECOGNITION OF INSURANCE COVERING TREASURY TAX AND LOAN DEPOSITARIES--Table of Contents




Sec.
226.1  Scope.
226.2  General.
226.3  Application--termination.
226.4  Adequacy of security--how computed.
226.5  Examinations.
226.6  Financial reports.
226.7  Effective date.

    Authority: Secs. 2 and 3, Pub. L. 95-147. 91 Stat. 1227 (31 U.S.C. 
1038).

    Source: 43 FR 18972, May 2, 1978, unless otherwise noted.

[[Page 79]]



Sec. 226.1  Scope.

    The regulations in this part apply to insurance covering public 
money of the United States held by banks, savings banks, savings and 
loan associations, building and loan associations, homestead 
associations, or credit unions designated as Treasury tax and loan 
depositaries under 31 CFR part 203. Approval of the adequacy of the 
insurance coverage provided to Treasury tax and loan funds shall be 
governed by the regulations contained herein, which will be supplemented 
by guidelines issued by the Treasury and updated from time to time to 
meet changing conditions in the industry.



Sec. 226.2  General.

    (a) Deposit or account insurance provided by the Federal Deposit 
Insurance Corporation, the Federal Savings and Loan Insurance 
Corporation, and the National Credit Union Share Insurance Fund, is 
hereby recognized. Deposits or accounts which are insured by a State or 
agency thereof, or by a corporation chartered by a State for the sole 
purpose of insuring deposits or accounts of financial institutions 
eligible to be Treasury tax and loan depositaries (hereinafter referred 
to as Insurance Arrangement), shall be approved as provided herein. Such 
approval constitutes recognition for the purpose of reducing the amount 
of collateral required of a tax and loan depositary by the amount of 
recognized insurance coverage pursuant to 31 CFR 203.15.
    (b) Generally, these regulations and their associated guidelines 
require that an organization providing insurance maintain a corpus of 
sufficient value and liquidity, and/or that it have sufficient State 
borrowing authority, in relation to its liabilities and total insured 
savings (or deposits) to provide adequate security to the Government's 
deposits and that adequate monitoring of the financial condition of the 
insured institutions is conducted.



Sec. 226.3  Application--termination.

    (a) Every Insurance Organization applying for recognition as a 
qualified insurer of financial institutions designated as Treasury tax 
and loan depositaries shall address a written request to the Assistant 
Commissioner, Comptroller, Financial Management Service, Department of 
the Treasury, Washington, DC 20226, who will notify the applicant of the 
data which is necessary to make application. If the Secretary of the 
Treasury is satisfied that:
    (1) One or more institutions insured by the applicant otherwise meet 
the Secretary's requirements for designation as a Treasury tax and loan 
depositary or Federal tax depositary,
    (2) The insurance provided by the applicant covers public money of 
the United States, and
    (3) The insurance coverage provided affords adequate security to the 
Government's deposits, the Secretary shall recognize the applicant as a 
qualified insurer of financial institutions designated as Treasury tax 
and loan depositaries.
    (b) If and when the Secretary of the Treasury determines that a 
qualified insurance organization's financial condition is such that it 
no longer provides adequate security or that it is not complying with 
the regulations of this part, the Secretary will notify the Insurance 
Organization of the facts or conduct which cause him to make such 
determination, and in those cases where the safety of the Government's 
funds allows, provide the Insurance Organization with an opportunity to 
correct the deficiency. When any deficiency has not been corrected to 
his satisfaction or, where the safety of Government funds makes 
immediate revocation imperative, the Secretary will revoke the 
recognition previously granted.
    Note: For a delegation of authority to perform the functions 
described in Secs. 226.3 and 226.4, see 44 FR 19406 of the Federal 
Register of April 3, 1979.

[43 FR 18972, May 2, 1978, as amended at 44 FR 19406, Apr. 3, 1979; 49 
FR 47002, Nov. 30, 1984]



Sec. 226.4  Adequacy of security--how computed.

    (a) In qualifying Insurance Organizations, the Treasury will use a 
ratio (equity (net worth) of the insurance organization divided by 
insured accounts or deposits) to determine if the security is adequate. 
The ratio will be computed as determined by the Treasury, and is 
required to equal 0.0045 or greater for

[[Page 80]]

an Insurance Organization to be recognized (i.e., net worth is required 
to equal 0.45 of 1 percent of insured accounts or deposits).
    (b) If, in the judgment of the Secretary of the Treasury, any of the 
Insurance Organization's assets which cannot be liquidated promptly or 
are subject to restriction, encumbrance, or discredit, all or part of 
the value of such assets may be deducted from equity in making the 
computation. The Secretary of the Treasury may value the assets and 
liabilities in his discretion.
    (c) An Insurance Organization's unqualified borrowing authority from 
its sponsoring State will be added to its equity in making the 
computation because such authority is equivalent to additional 
capitalization. An Insurance Organization's commercial borrowing 
authority and its reinsurance will be disregarded in making the 
computation, because these are not adequate substitutes for 
undercapitalization.
    Note: For a delegation of authority to perform the functions 
described in Secs. 226.3 and 226.4, see 44 FR 19406 of the Federal 
Register of April 3, 1979.

[43 FR 18972, May 2, 1978, as amended at 44 FR 19406, Apr. 3, 1979]



Sec. 226.5  Examinations.

    (a) Examinations by State regulatory authorities or audits by CPA 
firms of Insurance Organizations shall be performed in accordance with, 
and at intervals prescribed by, State regulatory procedures. Copies of 
the reports shall be submitted to the Treasury.
    (b) Examinations by State regulatory authorities or audits by CPA 
firms of insured financial institutions shall be performed in accordance 
with, and at intervals prescribed by, State regulatory procedures. In 
addition, an adequate monitoring system shall be employed to detect 
those institutions with financial problems.



Sec. 226.6  Financial reports.

    Financial reports of Insurance Organizations shall be submitted to 
the Treasury at the same intervals they are submitted to State 
regulatory authorities. However, they need not be submitted more 
frequently than quarterly but, as a minimum, shall be submitted 
annually. The Treasury may prescribe the format of such reports.



Sec. 226.7  Effective date.

    The provisions of this part become effective November 2, 1978.

[43 FR 47506, Oct. 16, 1978]



PART 235--ISSUANCE OF SETTLEMENT CHECKS FOR FORGED CHECKS DRAWN ON DESIGNATED DEPOSITARIES--Table of Contents




Sec.
235.1  Scope of regulations.
235.2  Definition.
235.3  Settlement of claims.
235.4  Check Forgery Insurance Fund.
235.5  Reclamation amounts.
235.6  Implementing instructions.

    Authority: 31 U.S.C. 3343.

    Source: 40 FR 6785, Feb. 14, 1975, unless otherwise noted.



Sec. 235.1  Scope of regulations.

    This part governs the issuance of settlement checks for checks drawn 
on designated depositaries of the United States by accountable officers 
of the United States, that have been negotiated and paid on a forged or 
unauthorized indorsement.

[40 FR 6785, Feb. 14, 1975, as amended at 54 FR 35642, Aug. 29, 1989]



Sec. 235.2  Definition.

    Accountable Officers of the United States, as used in these 
regulations, means disbursing officers authorized by the Secretary of 
the Treasury to maintain official accounts of the United States in 
depositary banks located in the United States, its territories, and 
foreign countries, and to draw checks thereon in dollars or in foreign 
currencies.



Sec. 235.3  Settlement of claims.

    Upon receipt of a claim by a payee or special indorsee on a check 
determined to have been paid on a forged indorsement under conditions 
satisfying the provisions set forth in 31 U.S.C. 3343, accountable 
officers of the United States, with respect to a check drawn on 
designated depositaries of the United States, in dollars or in foreign

[[Page 81]]

currency, shall cause to be issued a settlement check in the appropriate 
currency to the payee or special indorsee.

[40 FR 6785, Feb. 14, 1975, as amended at 49 FR 47001, 47002, Nov. 30, 
1984; 54 FR 35642, Aug. 29, 1989]



Sec. 235.4  Check Forgery Insurance Fund.

    The Check Forgery Insurance Fund, established pursuant to 31 U.S.C. 
3343, shall be available for use by the Commissioner, Financial 
Management Service, and accountable officers of the United States for 
the purpose of providing funding for settlements made to a payee or 
special indorsee pursuant to these regulations.

[40 FR 6785, Feb. 14, 1975, as amended at 49 FR 47001, 47002, Nov. 30, 
1984]



Sec. 235.5  Reclamation amounts.

    Amounts received by way of reclamation on forged checks shall be 
deposited to the credit of the Check Forgery Insurance Fund or to the 
appropriate foreign currency fund or other account charged for the 
settlement payment.



Sec. 235.6  Implementing instructions.

    Procedural instructions implementing these regulations will be 
issued by the Commissioner of the Financial Management Service in volume 
I, part 4 of the Treasury Financial Manual.

[54 FR 35642, Aug. 29, 1989]



PART 240--INDORSEMENT AND PAYMENT OF CHECKS DRAWN ON THE UNITED STATES TREASURY--Table of Contents




                           General Provisions

Sec.
240.1  Scope of regulations.
240.2  Definitions.
240.3  Limitations on payment.
240.4  Cancellation and distribution of proceeds of checks.
240.5  Guaranty of indorsements.
240.6  Reclamation of amounts of paid checks.
240.7  Demand and protest.
240.8  Offset.
240.9  Treasury Check Offset.
240.10  Processing of checks.
240.11  Release of original checks.

                          Indorsement of Checks

240.12  Indorsement by payees.
240.13  Checks issued to incompetent payees.
240.14  Checks issued to deceased payees.
240.15  Checks issued to minor payees in certain cases.
240.16  Powers of attorney.

Appendix A to Part 240--Standard Forms for Power of Attorney and Their 
          Application

    Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3328, 3331, 3343, 
3711, 3712, 3716, 3717; 332 U.S. 234 (1947); 318 U.S. 363 (1943).

    Source: 54 FR 35642, Aug. 29, 1989, unless otherwise noted.

                           General Provisions



Sec. 240.1  Scope of regulations.

    The regulations in this part prescribe the requirements for 
indorsement and the conditions for payment of checks drawn on the United 
States Treasury. These regulations also establish procedures for 
collection of amounts due the United States Treasury because of payments 
on checks bearing forged or other unauthorized indorsements or other 
material defects or alterations.



Sec. 240.2  Definitions.

    (a) Certifying agency means an agency for whom a Treasury disbursing 
officer or a non-Treasury disbursing officer makes payment in accordance 
with 31 U.S.C. 3325. The responsibilities of a certifying official are 
set forth at 31 U.S.C. 3528.
    (b) Check or Checks means a check or checks drawn on the United 
States Treasury.
    (c) Check payment means the amount paid to a presenting bank in 
accordance with Sec. 240.9(a)(3) of this part.
    (d) Commissioner means the Commissioner of the Financial Management 
Service, Department of the Treasury, 401 14th Street SW., Washington, DC 
20227.
    (e) Days means calendar days.
    (f) Financial institution means any bank, savings bank, savings and 
loan association, Federal or State chartered credit union, or similar 
institution.
    (g) Item means a reference in a monthly interest billing statement 
to a check for the amount of which Treasury has demanded refund from a 
presenting bank.
    (h) Monthly interest billing statement means a statement prepared by 
Treasury and sent to a presenting bank

[[Page 82]]

which includes the following information regarding each outstanding 
demand for refund:
    (1) The reclamation date;
    (2) The reclamation number;
    (3) Check identifying information; and
    (4) The balance due, including interest.
    (i) Person or persons means an individual or individuals, or an 
institution or institutions including all forms of financial 
institutions.
    (j) Presenting bank means:
    (1) A financial institution which, either directly or through a 
correspondent banking relationship, presents checks to and receives 
provisional credit from a Federal Reserve Bank; or
    (2) A depositary which is authorized to charge checks directly to 
the General Account of the United States Treasury and present them to 
Treasury for payment through a designated Federal Reserve Bank.
    (k) Protest means a presenting bank's written statement and any 
supporting documentation tending to prove that it is not liable for 
refund of the reclamation balance.
    (l) Reclamation means a demand by Treasury for refund of the amount 
of a check payment.
    (m) Reclamation date means the date on which a demand for refund was 
prepared. Normally, demands are sent to presenting banks within two 
working days of the reclamation date.
    (n) Treasury means the United States Treasury.
    (o) U.S. securities means securities of the United States and 
securities of Federal agencies and wholly or partially government-owned 
corporations for which the Treasury acts as the transfer agent.
    (p) Unauthorized indorsement means:
    (1) An indorsement made by a person other than the payee, except as 
authorized by and in accordance with Sec. 204.5 and Secs. 240.11 through 
240.15;
    (2) An indorsement by a financial institution under circumstances in 
which the financial institution breaches the guaranty required of it by 
31 CFR 209.9(a) (See, 31 CFR 209.8); or
    (3) A missing indorsement where the depositary bank had no authority 
to supply the indorsement.



Sec. 240.3  Limitations on payment.

    (a) As a general rule,
    (1) The Commissioner shall not be required to pay a Treasury check 
issued on or after October 1, 1989 unless it is negotiated to a 
financial institution within 12 months after the date on which the check 
was issued; and
    (2) The Commissioner shall not be required to pay a Treasury check 
issued before October 1, 1989 unless it is negotiated to a financial 
institution no later than October 1, 1990.
    (b) All checks drawn on the United States Treasury and issued on or 
after October 1, 1989 shall bear a legend, stating ``Void After One 
Year.'' The legend is notice to payees and indorsers of a general 
limitation on the payment of Treasury checks. The legend, or the 
inadvertent lack thereof, does not limit, or otherwise affect, the 
rights of the Commissioner under the law.
    (c) The Treasury shall have the usual right of a drawee to examine 
checks presented for payment and refuse payment of any checks. The 
Treasury shall have a reasonable time to make such examination.
    (d) Checks shall be deemed to be paid by the United States Treasury 
only after first examination has been fully completed.
    (e) If the Treasury is on notice of a question of law or fact about 
whether a Treasury check is properly payable when the check is presented 
for payment, the Commissioner may defer payment until the Comptroller 
General settles the question.



Sec. 240.4  Cancellation and distribution of proceeds of checks.

    (a) Checks issued on or after October 1, 1989. (1) Any check issued 
on or after October 1, 1989 that has not been paid and remains 
outstanding for more than 12 months shall be cancelled by the 
Commissioner.
    (2) The proceeds from checks cancelled pursuant to paragraph (a) of 
this section shall be returned to the agency which authorized the 
issuance of the

[[Page 83]]

check and credited to the appropriation or fund account initially 
charged for the payment.
    (3) Beginning January 1, 1991, and monthly thereafter, the 
Commissioner shall provide to each agency that authorizes the issuance 
of Treasury checks a list of those checks issued for such agency which 
were cancelled during the preceding month pursuant to paragraph (a) of 
this section.
    (b) Checks issued before October 1, 1989. (1) Any check issued 
before October 1, 1989 that has not been paid and remains outstanding 
for more than 12 months shall be cancelled by the Commissioner no later 
than April 1, 1991.
    (2) The proceeds from checks cancelled pursuant to paragraph (b) of 
this section shall be applied as required by 31 U.S.C. 3334.



Sec. 240.5  Guaranty of indorsements.

    The presenting bank and the indorsers of a check presented to the 
Treasury for payment are deemed to guarantee to the Treasury that all 
prior indorsements are genuine, whether or not an express guaranty is 
placed on the check. When the first indorsement has been made by one 
other than the payee personally, the presenting bank and the indorsers 
are deemed to guarantee the Treasury, in addition to other warranties, 
that the person who so indorsed had unqualified capacity and authority 
to indorse the check on behalf of the payee.



Sec. 240.6  Reclamation of amounts of paid checks.

    (a) If, after a check has been paid by Treasury, it is found to:
    (1) Bear a forged or unauthorized indorsement; or
    (2) Contain any other material defect or alteration which was not 
discovered upon first examination, then, upon demand by the Treasury in 
accordance with the procedures specified in Sec. 240.7 of this part, the 
presenting bank or other indorser shall refund the amount of the check 
payment.
    (b) Interest on any unpaid item shall commence to accrue on the 
sixty-first day after the reclamation date. Interest shall be calculated 
at the rate set from time to time for purposes of 31 U.S.C. 323. 
Interest shall continue to accrue until the amount demanded is paid or 
the reclamation is abandoned by Treasury.
    (c) In addition to its right to recover interest, Treasury shall 
have the right to recover such other applicable charges (e.g., 
administrative collection costs, late payment penalties) as may be 
authorized or required by law.
    (d) If the Treasury determines that a check has been paid over a 
forged or unauthorized indorsement, the Commissioner may reclaim the 
amount of the check from the presenting bank or any other indorser that 
breached its guarantee of indorsement prior to:
    (1) The end of the one-year period beginning on the date of payment; 
or
    (2) The expiration of the 180-day period beginning on the close of 
the period described in paragraph (d)(1) of this section if a timely 
claim under 31 U.S.C. 3702 is presented to the agency which authorized 
the issuance of the check.



Sec. 240.7  Demand and protest.

    (a) For all reclamations an initial demand for refund of the amount 
of a check payment will be made by sending a ``Request for Refund 
(Reclamation),'' to the presenting bank or any other indorser. This 
Request shall advise the presenting bank of the amount demanded and the 
reason for the demand. Treasury will make follow-up demands by including 
each unpaid item on at least three monthly interest billing statements 
sent to the presenting bank. Monthly interest billing statements will 
identify any unpaid reclamation demands and will also show the amount of 
any accrued interest for each outstanding reclamation. Any discrepancies 
should be brought to Treasury's attention immediately at the address 
listed in paragraph (b) of this section. Monthly interest billing 
statements will contain or be accompanied by notice to the bank:
    (1) That Treasury intends to collect the debt through administrative 
offset in accordance with Sec. 240.8 if the reclamation is not paid 
within 120 days of the reclamation date, and if administrative offset is 
unsuccessful, that Treasury intends to collect the debt through Treasury 
Check Offset in accordance with Sec. 240.9;

[[Page 84]]

    (2) That the bank has an opportunity to inspect and copy Treasury's 
records with respect to the reclamation;
    (3) That the bank may, by filing a protest, request Treasury to 
review its decision that the bank is liable for the reclamation; and
    (4) That the bank has an opportunity to enter into a written 
agreement with Treasury for the repayment of the amount of the 
reclamation. A request for a payment agreement must be accompanied by 
proof that satisfies the Treasury that the requesting bank is unable to 
repay the entire amount owed at the time that it is due.
    (b) Requests for an appointment to inspect and copy Treasury's 
records with respect to a reclamation and requests to enter into 
repayment agreements should be sent in writing to: Department of the 
Treasury, Financial Management Service, Financial Processing Division, 
Reclamation Branch, Room 700-D, P.O. Box 1849, Hyattsville, MD 20788.
    (c)(1) If a presenting bank wishes to contest its liability for the 
principal amount demanded, it shall send a protest, i.e., a written 
statement and copies of all documentary evidence (e.g., affidavits, 
account agreements, signature cards) and other written information 
raising a question of law or fact which, if resolved in the presenting 
bank's favor, would show that the presenting bank is not liable, to: 
Department of the Treasury, Financial Management Service, Financial 
Processing Division, Reclamation Branch, Room 700-D, P.O. Box 1849, 
Hyattsville, MD 20788. The Director, Financial Processing Division, who 
has supervisory authority over the Reclamation Branch, or his/her 
authorized subordinate, shall consider and decide any protest properly 
submitted under this paragraph. Neither the Director, Financial 
Processing Division, nor any of his/her subordinates, shall have any 
involvement in the process of making findings or demands under 
Sec. 240.6(a). In order to be considered, and to be timely, a protest 
must be received not later than 90 days after the reclamation date. 
Treasury will refrain from collection in accordance with Sec. 240.8 or 
Sec. 240.9 while a timely protest is being considered. Unresolved 
protested items will be appropriately annotated on the monthly summary 
of debt statement.
    (2) If Treasury accepts the protest, the presenting bank shall be 
notified in writing that efforts to collect the item and any accrued 
interest have been abandoned.
    (3) If the evidence sent by the presenting bank does not satisfy 
Treasury that refund of the amount demanded is not required under 
Sec. 240.6(a), Treasury will notify the presenting bank in writing of 
its decision that the bank is liable for the amount demanded and the 
reasons for its decision. If the presenting bank fails to send the 
amount demanded within 30 days of the date of Treasury's decision, 
Treasury shall proceed to collect the amount owed in accordance with 
Sec. 240.8, provided that no offset shall be taken sooner than 120 days 
after the reclamation date.
    (4) If an item, and/or accrued interest relating to that item 
remains unpaid for 90 days after the reclamation date and if there is no 
unresolved protest associated with the item, the monthly interest 
billing statement will be annotated with a notice that the presenting 
bank has until the next billing date to make payment on the item or be 
subject to offset thereon.

[54 FR 35642, Aug. 29, 1989, as amended at 67 FR 36518, May 24, 2002]



Sec. 240.8  Offset.

    (a) If an item, and/or accrued interest relating to that item, 
remains unpaid for 120 days after the reclamation date and the 
presenting bank has been sent at least one monthly interest billing 
statement informing it that Treasury intends to collect that item by 
offset, Treasury may refer the matter to any Federal agency and request 
that agency to offset the indebtedness and other applicable charges 
against amounts otherwise owed by the Federal agency to the presenting 
bank. Monthly interest billing statements will be annotated to identify 
those specific items that are to be referred to an agency for offset.
    (b) If a bank wishes to make payment on an item referred to an 
agency for offset, it should contact Treasury at the address listed in 
Sec. 240.7(b) to reduce the possibility of a double collection. If an 
agency to which an indebtedness is

[[Page 85]]

referred in accordance with this paragraph is unable to effect offset in 
whole or in part, Treasury may then refer the debt to any other agency 
and request offset in accordance with this paragraph. Treasury 
designates each agency acting under this paragraph as its designee for 
the sole purpose of effecting offset. No such designee shall be liable 
to any party for any loss resulting from its action under this 
paragraph.
    (c) If Treasury is unable to collect an amount owed by use of the 
offset described in paragraph (a) of this section, Treasury shall take 
such action against the presenting bank as may be necessary to protect 
the interests of the United States, including Treasury Check Offset in 
accordance with Sec. 240.9 or referral to the Department of Justice.
    (d) If Treasury effects offset under this section and it is later 
determined that the presenting bank paid the amount of the reclamation 
and accrued interest thereon, or that a presenting bank which had timely 
filed a protest was not liable for the amount of the reclamation, 
Treasury shall promptly refund to the presenting bank the amount of its 
payment.

[54 FR 35642, Aug. 29, 1989, as amended at 67 FR 36518, May 24, 2002]



Sec. 240.9  Treasury Check Offset.

    (a) If Treasury is unable to effect collection pursuant to 
Sec. 240.7 or Sec. 240.8 of this part, it will collect the principal 
amount of the reclamation, accrued interest, penalty, and administrative 
costs through Treasury Check Offset. Treasury Check Offset occurs when, 
at the direction of Treasury, a Federal Reserve Bank withholds, that is, 
offsets, credit from a presenting bank (e.g., a financial institution 
presenting a Treasury check for ultimate charge to the account of the 
United States Treasury). The amount of credit offset is applied to the 
principal amount of the reclamation, accrued interest, penalties, and 
administrative costs owed by the presenting bank. As provided by the 
provisions of 31 U.S.C. 3712(e), by presenting Treasury checks for 
payment, the presenting bank is deemed to authorize Treasury Check 
Offset.
    (b) If Treasury effects offset under this section and it is later 
determined that the presenting bank paid the principal amount of the 
reclamation and accrued interest, penalties, and administrative costs 
thereon, or that a presenting bank was not liable for the amount of the 
reclamation, Treasury will promptly refund to the presenting bank the 
amount of its payment. Treasury may refund the amount either by applying 
the amount to another reclamation debt in accordance with this Part or 
other applicable law, or by returning the amount to the presenting bank.
    (c) Treasury Check Offset is used for the purpose of collecting debt 
owed by a presenting bank to the Federal Government. As a consequence, 
presenting banks shall not be able to use the fact that Treasury checks 
presented for payment have not been paid as the basis for a claim 
against Treasury, a Federal Reserve Bank, or other persons or entities, 
including payees or other indorsers of checks, for the amount of the 
credit offset pursuant to 31 U.S.C. 3712(e) and this section.
    (d) This section does not apply to a claim based upon a reclamation 
that has been outstanding for more than 10 years from the date of 
delinquency.

[67 FR 36518, May 24, 2002]



Sec. 240.10  Processing of checks.

    (a) Federal Reserve Banks. (1) Federal Reserve Banks shall cash 
checks for Government disbursing officers when such checks are drawn by 
the disbursing officers to their own order. Payment of such checks shall 
not be refused except for alteration or counterfeiting of the check, or 
forged signature of the drawer.
    (2) Federal Reserve Banks shall not be expected to cash Government 
checks presented directly to them by the general public.
    (3) As a depository of public funds, each Federal Reserve Bank 
shall:
    (i) Receive checks from its member banks, nonmember clearing banks, 
or other depositors, when indorsed by such banks or depositors who 
guarantee all prior indorsements thereon;
    (ii) Give immediate credit therefore in accordance with their 
current Time Schedules and charge the amount of

[[Page 86]]

the checks cashed or otherwise received to the account of the Treasury, 
subject to examination and payment by the United States Treasury;
    (iii) Forward payment records and copies of checks to Treasury; and
    (iv) Release the original checks to a designated Federal Records 
Center upon notification from Treasury. The Treasury shall return to the 
forwarding Federal Reserve Bank a photocopy of any check the payment of 
which is refused upon first examination. Federal Reserve Banks shall 
give immediate credit therefor in the United States Treasury's account, 
thereby reversing the previous charge to the account for such check. The 
Treasury authorizes each Federal Reserve Bank to release the original 
check to the endorser when payment is refused in accordance with 
Sec. 240.3(a).
    (b) Depositaries outside of the mainland of the United States. Banks 
outside of the mainland of the United States designated as depositaries 
of public money and permitted to charge checks to the General Account of 
the United States Treasury shall be governed by the operating 
instructions contained in the letter of authorization to them from 
Treasury and shall assume the obligations of presenting banks set forth 
in Secs. 240.5 and 240.6. Checks charged to the General Account of the 
United States Treasury along with the supporting credit voucher shall be 
shipped to the Federal Reserve Bank of Richmond. The Treasury shall 
return to the presenting depositary bank a photocopy of any check the 
payment of which is refused upon first examination. The depositary bank 
shall give immediate credit therefor in the General Account of the 
United States Treasury, thereby reversing the previous charge to the 
Account for such check. Treasury authorizes the Federal Reserve Bank of 
Richmond to return to the presenting depositary bank the original check 
when payment is refused in accordance with Sec. 240.3(a).

[54 FR 35642, Aug. 29, 1989. Redesignated at 67 FR 36518, May 24, 2002]



Sec. 240.11  Release of original checks.

    An original check may be released to a responsible indorser upon 
receipt of a properly authorized request showing the reason it is 
required and that the request is in conformity with all applicable law 
including the Privacy Act.

[54 FR 35642, Aug. 29, 1989. Redesignated at 67 FR 36518, May 24, 2002]

                          Indorsement of Checks



Sec. 240.12  Indorsement by payees.

    (a) General requirements. Checks shall be indorsed by the payee or 
payees named, or by another on behalf of such payees as set forth in 
this part.
    (b) Checks indorsed by the payee or payees named. When a check is 
indorsed by the payee or payees named, the forms of indorsement shall 
conform to those recognized by general principles of law and commercial 
usage for negotiation, transfer or collection of negotiable instruments.
    (c) Checks indorsed by another on behalf of the named payee or 
payees--(1) Acceptable indorsement. The only acceptable indorsement of a 
check by another on behalf of the named payee or payees (except when a 
check is indorsed by a financial institution under the payee's or 
payees' authorization) is one which indicates that the person indorsing 
is doing so on behalf of the named payee or payees. Such an acceptable 
indorsement shall include the signature of the indorser and sufficient 
wording to indicate that the indorser is indorsing on behalf of the 
named payee or payees, pursuant to authority expressly conferred by or 
under law or other regulation. An example would be: ``John Jones by Mary 
Jones.'' This example states the minimum indication acceptable. However, 
Secs. 240.12(a)(1), 240.13(a)(1), and 240.15(d) specify the addition of 
an indication in specified situations of the actual capacity in which 
the person other than the named payee is indorsing. Checks indorsed 
``for collection'' or ``for deposit only to the credit of the within 
named payee or payees,'' are acceptable without any signature. However, 
in the absence of a signature, the presenting bank will be deemed to 
guarantee its good title to such checks to all subsequent indorsers and 
to Treasury.
    (2) Unacceptable indorsement. The indorsement by another on behalf 
of the named payee or payees, which consists of the name(s) of the 
payee(s),

[[Page 87]]

whether as purported signature(s) or otherwise, and not the signature of 
the person other than named payee or payees indorsing the check, 
regardless of the relationship between the indorser and the named payee 
or payees, will be rebuttably presumed to be a forgery and is 
unacceptable. The indorsement by a person who purports to indorse for 
the named payee(s) with an indorsement consisting of the name(s) of the 
payee(s), whether as purported signature(s) or otherwise, and the 
indorsing person's signature and no indication of the indorsing person's 
representative capacity, will create a rebuttable presumption that the 
indorsing person was not authorized to indorse for the named payee(s). 
In these circumstances it is the responsibility of the individual or 
institution accepting a check from a person other than the named 
payee(s) to determine that such person is authorized and has the 
capacity to indorse and negotiate the check. Evidence of the basis for 
such a determination may be required by the Treasury in the event of a 
dispute.
    (d) Indorsement of checks by a financial institution under the 
payee's authorization. When a check is credited by a financial 
institution to the payee's account under the payee's or payees' 
authorization, the financial institution may use an indorsement 
substantially as follows: ``Credit to the account of the within-named 
payee in accordance with the payee's or payees' instructions. XYZ.'' A 
financial institution using this form of indorsement will be deemed to 
guarantee to all subsequent indorsers and to the Treasury that it is 
acting as an attorney-in-fact for the payee or payees, under the payee's 
or payees' authorization, and that this authority is currently in force 
and has neither lapsed nor been revoked either in fact or by the death 
or incapacity of the payee or payees.
    (e) Indorsement of checks drawn in favor of financial institutions. 
All checks drawn in favor of financial institutions, for credit to the 
accounts of persons designated payment so to be made, shall be indorsed 
in the name of the financial institutions as payee in the usual manner. 
Financial institutions receiving and indorsing such checks shall comply 
fully with part 209 of this chapter.
    (f) Social Security benefit checks issued jointly to individuals of 
the same family. A social security benefit check issued jointly to 2 or 
more individuals of the same family shall, upon the death of 1 of the 
joint payees prior to the negotiation of such check, be returned to the 
Social Security District Office or the Treasury Regional Financial 
Center. Payment of the check to the surviving payee or payees may be 
authorized by placing on the face of the check a stamped legend signed 
by an official of the Social Security Administration or the Treasury 
Regional Financial Center, redesignating such survivor or survivors as 
the payee or payees of the check. A check bearing such stamped legend, 
signed as herein prescribed, may be indorsed and negotiated by the 
person or persons named as if such check originally had been drawn 
payable to such person or persons.

[54 FR 35642, Aug. 29, 1989. Redesignated at 67 FR 36518, May 24, 2002]



Sec. 240.13  Checks issued to incompetent payees.

    (a) Classes of checks which may be indorsed by guardian or 
fiduciary. Where the payee of a check of any class listed in 
Sec. 240.13(a) has been declared incompetent:
    (1) If a check is indorsed by a legal guardian or other fiduciary, 
such legal guardian or fiduciary shall include, as a part of the 
indorsement, an indication of the capacity in which the legal guardian 
or fiduciary is indorsing. An example would be: ``John Jones by Mary 
Jones, guardian of John Jones.'' When a check indorsed in this fashion 
is presented for payment by a bank, it will be paid by the Treasury 
without submission to the Treasury of documentary proof of the authority 
of the guardian or other fiduciary, with the understanding that evidence 
of such claimed authority to indorse may be required by the Treasury in 
the event of a dispute.
    (2) If a guardian has not been or will not be appointed, and if the 
check:
    (i) Was issued in payment of goods and services, tax refunds or 
redemption of currency, it shall be forwarded for advice to the 
certifying agency; or

[[Page 88]]

    (ii) Was issued in payment of principal or interest on U.S. 
securities, it shall be forwarded to the Bureau of the Public Debt, 
Division of Customer Service, P.O. Box 426, Parkersburg, WV 26106.
    (b) Classes of checks which may not be indorsed by guardian or 
fiduciary. Where the payee of a check of any other class has been 
declared incompetent, the check shall not be indorsed by a guardian or 
other fiduciary. The check shall be returned to the Government agency 
which certified the payment, with information as to the incompetency of 
the payee and submission of documentary evidence showing the appointment 
of the guardian or other explanation in order that a replacement check, 
and others to be issued subsequently, may be drawn in favor of the 
guardian.

[54 FR 35642, Aug. 29, 1989, as amended at 54 FR 46728, Nov. 7, 1989. 
Redesignated and amended at 67 FR 36518, May 24, 2002]



Sec. 240.14  Checks issued to deceased payees.

    (a)(1) Classes of checks which may be indorsed by an executor or 
administrator. Checks issued for the classes of payments indicated 
below, the right to which under law does not terminate with the death of 
the payee, when indorsed by an executor or administrator, shall include, 
as part of the indorsement, an indication of the capacity in which the 
executor or administrator is indorsing. An example would be: ``John 
Jones by Mary Jones, executor of the estate of John Jones.'' Such 
checks, when presented for payment by a bank, will be paid by the 
Treasury without the submission of documentary proof of the authority of 
the executor or administrator, with the understanding that evidence of 
such claimed authority to indorse may be required by the Treasury in the 
event of a dispute. The classes of payments to which this subsection 
refers are:
    (i) Payments for the redemption of currencies or for principal or 
interest on U.S. securities;
    (ii) Payments for tax refunds; and
    (iii) Payments for goods and services.
    (2) If an executor has not been appointed, persons claiming as 
owners shall return the checks for appropriate handling to the 
Government agency that certified the payment. If there is doubt as to 
whether the proceeds of the check or checks pass to the estate of the 
deceased payee, the checks shall be handled in accordance with paragraph 
(b) of this section.
    (b) Classes of checks which may not be indorsed by an executor or 
administrator. Checks issued for classes of payment other than those 
specified in paragraph (a) of this section may not be negotiated after 
the death of the payee, but must be returned to the Government agency 
that certified the payment for determination whether, under applicable 
laws, payment is due and to whom it may be made.

[54 FR 35642, Aug. 29, 1989. Redesignated at 67 FR 36518, May 24, 2002]



Sec. 240.15  Checks issued to minor payees in certain cases.

    Checks issued to minors in payment of principal or interest on U.S. 
securities may be indorsed by either parent with whom the minor resides, 
or, if the minor does not reside with either parent, by the person who 
furnishes his chief support. The parent or other person indorsing in 
behalf of the minor shall present with the check his signed statement 
giving the minor's age, stating that the payee either resides with the 
parent or receives his chief support from the person indorsing in his 
behalf, and that the proceeds of the checks will be used for the minor's 
benefit.

[54 FR 35642, Aug. 29, 1989. Redesignated at 67 FR 36518, May 24, 2002]



Sec. 240.16  Powers of attorney.

    (a) Specific powers of attorney. Any check may be negotiated under a 
specific power of attorney executed after the issuance of the check and 
describing it in full.
    (b) General powers of attorney. Checks issued for the following 
classes of payments may be negotiated under a general power of attorney 
in favor of an individual, financial institution or other entity:
    (1) Payments for the redemption of currencies or for principal or 
interest on U.S. securities.
    (2) Payments for tax refunds, but subject to the limitations 
concerning

[[Page 89]]

the mailing of Internal Revenue refund checks contained in 26 CFR 
601.506(b).
    (3) Payments for goods and services.
    (c) Special powers of attorney. Under discussions of the Comptroller 
General of the United States, classes of checks other than those 
specified in paragraph (b) of this section may be negotiated under a 
special power of attorney which names a financial institution as 
attorney-in-fact, and recites that it is not given to carry into effect 
an assignment of the right to receive payment, either to the attorney-
in-fact or to any other person.
    (d) Proof of authority. Checks indorsed by an attorney-in-fact shall 
include, as part of the indorsement, an indication of the capacity in 
which the attorney-in-fact is indorsing. An example would be: ``John 
Jones by Paul Smith, attorney-in-fact for John Jones.'' Such checks when 
presented for payment by a bank, will be paid by the Treasury without 
the submission of documentary proof of the claimed authority, with the 
understanding that evidence of such claimed authority to indorse may be 
required by the Treasury in the event of a dispute.
    (e) Revocation of powers of attorney. Powers of attorney are revoked 
by the death of the grantor and may also be revoked by notice from the 
grantor to the parties known, or reasonably expected, to be acting on 
the power of attorney. Notice of revocation to the Treasury will not 
ordinarily serve to revoke the power.
    (f) Acknowledgment of powers of attorney. Where desirable or where 
required by foreign, state or local law, powers of attorney shall be 
acknowledged before a notary public or other officer authorized by law 
to administer oaths generally.
    (g) Seal or certificate of attesting officers. Where acknowledgment 
of powers of attorney is desirable or required pursuant to paragraph (f) 
of this section, seals of attesting officers shall be impressed or 
stamped upon the power of attorney form, or the power of attorney shall 
be accompanied by a certificate from an appropriate official showing 
that the officer was in commission on the date of acknowledgment.
    (h) Forms. Power of attorney forms issued under this part are listed 
in the appendix to this part. They may be obtained from the Financial 
Management Service, Property and Supply Section, Ardmore East Business 
Center, 3361-L 75th Avenue, Landover, MD 20785.

[54 FR 35642, Aug. 29, 1989. Redesignated at 67 FR 36518, May 24, 2002]

 Appendix A to Part 240--Standard Forms for Power of Attorney and Their 
                               Application

    Standard Form 231. A general power of attorney on this form may be 
executed by an individual, firm, or sole owner, for checks drawn on the 
United States Treasury, in payment: (1) For redemption of currencies or 
for principal or interest on U.S. securities, (2) for tax refunds, and 
(3) for goods and services.
    Standard Form 232. A specific power of attorney on this form, which 
must be executed after the issuance of the check, describing the check 
in full, may be used to authorize the indorsement of any class of check 
drawn on the United States Treasury.
    Standard Form 233. A special power of attorney on this form naming a 
financial organization as attorney-in-fact and reciting that it is not 
given to carry into effect an assignment of the right to receive 
payment, either to the attorney-in-fact or to any other person, may be 
used for classes of payments other than those shown under Standard Form 
231.
    Standard Form 234-5. A general power of attorney may be executed by 
a corporation for the classes of payment listed under Standard Form 231.
    Standard Form 236-7. A specific power of attorney may be executed on 
this form by a corporation to cover a specific check for any class of 
payment.



PART 245--CLAIMS ON ACCOUNT OF TREASURY CHECKS--Table of Contents




Sec.
245.1  Introductory.
245.2  Definitions.
245.3  Time limit for check claims.
245.4  Advice of nonreceipt or loss.
245.5  Recertification of payment.
245.6  Claim by an indorser.
245.7  Check status inquiry.
245.8  Receipt or recovery of original check.
245.9  Procedural instructions.
245.10  Performance of functions of the Commissioner.

    Authority: R.S. 3646, as amended; 31 U.S.C. 3328; 31 U.S.C. 3331.

    Source: 54 FR 35647, Aug. 29, 1989, unless otherwise noted.

[[Page 90]]



Sec. 245.1  Introductory.

    This part governs the issuance of replacement checks for checks 
drawn on the United States Treasury, when
    (a) The original check has been lost, stolen, destroyed or mutilated 
or defaced to such an extent that it is rendered non-negotiable;
    (b) The original check has been negotiated and paid on a forged or 
unauthorized indorsement, and
    (c) The original check has been cancelled pursuant to Sec. 204.4 of 
this chapter.



Sec. 245.2  Definitions.

    For purposes of this part:
    (a) Agency means each authority of the United States for which the 
Treasury of the United States issues checks or for which checks drawn on 
the Treasury of the United States are issued.
    (b) Check means a check drawn on the United States Treasury.
    (c) Certifying Agency means an agency for whom a Treasury disbursing 
officer or a non-Treasury disbursing officer makes payment in accordance 
with 31 U.S.C. 3325. The responsibilities of a certifying official are 
set forth at 31 U.S.C. 3528.
    (d) Commissioner means the Commissioner of the Financial Management 
Service, Department of the Treasury, 401 14th Street, SW., Washington, 
DC 20227.
    (e) Person means an individual, a partnership, a corporation, a 
labor organization, a government or a subdivision or instrumentality 
thereof, and any other entity to which a check may be issued.
    (f) Replacement check means a check issued pursuant to the 
recertification of payment by a certifying official.
    (g) Secretary means the Secretary of the Treasury.



Sec. 245.3  Time limit for check claims.

    (a) Any claim on account of a Treasury check must be presented to 
the agency that authorized the issuance of such check within one year 
after the date of issuance of the check or within one year after October 
1, 1989, whichever is later.
    (b) Any claim by an indorser under Sec. 245.6 will be considered 
timely if presented to the Commissioner within one year after the date 
of issuance of the check or within one year after October 1, 1989, 
whichever is later.
    (c) Nothing in this subsection affects the underlying obligation of 
the United States, or any agency thereof, for which a Treasury check was 
issued.



Sec. 245.4  Advice of nonreceipt or loss.

    (a) In the event of the nonreceipt, loss or destruction of a check 
drawn on the United States Treasury, or the mutilation or defacement of 
such a check to an exent which renders it nonnegotiable, the claimant 
should immediately notify the agency that authorized the issuance of 
such check, describing the check, stating the purpose for which it was 
issued and giving, if possible, its date, amount, Treasury symbol and 
number.
    (b) In cases involving mutiliated or defaced checks, the claimant 
should enclose the mutilated or defaced check with his communication to 
the agency.



Sec. 245.5  Recertification of payment.

    Upon receipt of a claim concerning the nonreceipt, loss, 
destruction, mutilation or defacement of a check, or the cancellation of 
a check pursuant to Sec. 240.4 of this chapter, the certifying agency 
may certify a new payment.



Sec. 245.6  Claim by an indorser.

    When one or more Treasury checks are lost, stolen or destroyed in a 
single incident while in the possession of a person to whom the checks 
have been negotiated by the payee, and if the checks have not been paid, 
the Commissioner may issue a replacement check to the person to whom the 
checks had been negotiated.



Sec. 245.7  Check status inquiry.

    The Commissioner will provide the status and a copy of the check if 
available, upon request, to the agency which authorized the issuance of 
the check.



Sec. 245.8  Receipt or recovery of original check.

    (a) If the original check is received or recovered by the claimant 
after he has requested the agency to issue a replacement check, but 
before a replacement check has been received, he

[[Page 91]]

should immediately advise the agency and hold such check until receipt 
of instructions with respect to the negotiability of such check.
    (b) If the original check is received or recovered by the claimant 
after a replacement check has been received by him, the original shall 
not be cashed, but shall be forwarded immediately to the agency that 
authorized the issuance of such check. Under no circumstances should 
both the original and replacement checks be cashed.



Sec. 245.9  Procedural instructions.

    The Commissioner of the Financial Management Service may issue 
procedural instructions, implementing these regulations, in Volume I, 
Part 4 of the Treasury Financial Manual.



Sec. 245.10  Performance of functions of the Commissioner.

    The Commissioner of the Financial Management Services may authorize 
any officer of the Treasury Department to perform any of his functions 
under this part and to redelegate such authority within such limits as 
the Commissioner may prescribe.

(Approved by the Office of Management and Budget under control number 
1510-0058)



PART 248--ISSUE OF SUBSTITUTES OF LOST, STOLEN, DESTROYED, MUTILATED AND DEFACED CHECKS OF THE UNITED STATES DRAWN ON ACCOUNTS MAINTAINED IN DEPOSITARY BANKS IN 
FOREIGN COUNTRIES OR UNITED STATES TERRITORIES OR POSSESSIONS--Table of Contents




Sec.
248.1  Introductory.

                         Delegation of Authority

248.2  Delegation of authority to issue substitute checks.

                     Action To Be Taken By Claimants

248.3  Advice of nonreceipt or loss.
248.4  Undertaking of indemnity.
248.5  Exception to requirement of undertaking of indemnity Form 2244.
248.6  Recovery of original check.
248.7  Claims requiring settlement action.
248.8  Inquiries.
248.9  Amendments and waivers.

    Authority: 31 U.S.C. 3331.

    Source: 25 FR 10869, Nov. 16, 1960, unless otherwise noted. 
Redesignated at 39 FR 20969, June 17, 1974.



Sec. 248.1  Introductory.

    This part governs the issuance of substitutes for checks of the 
United States drawn on United States dollar or foreign currency 
accounts, maintained with designated depositaries in foreign countries 
or territories or possessions of the United States. Checks of the United 
States drawn on such depositaries are hereafter referred to as 
``depositary checks.''

[54 FR 35647, Aug. 29, 1989]

                         Delegation of Authority



Sec. 248.2  Delegation of authority to issue substitute checks.

    Pursuant to authority contained in section 3646 of the Revised 
Statutes, as amended, and subject to such procedural requirements as may 
be prescribed by the Treasury Department, there is hereby delegated to 
heads of departments and agencies whose disbursing officers issue 
depositary checks, authority to authorize officers or employees of their 
respective departments or agencies to issue substitutes of such checks, 
prior to the close of the fiscal year next following the fiscal year in 
which the checks are issued, and to receive and approve undertakings to 
indemnify the United States in such cases. The Commissioner of the 
Financial Management Service, Treasury Department, is hereby delegated 
authority to issue substitutes of depositary checks drawn by the 
Director, Operations Group, Treasury Department, or by officers 
disbursing under delegation from the Director, Operations Group, and to 
receive and approve undertakings of indemnity in such cases. The 
authority delegated to the Commissioner of the Financial Management 
Service may be redelegated by him to such disbursing officers.

[39 FR 20969, June 17, 1974, as amended at 49 FR 47001, 47002, Nov. 30, 
1984]

[[Page 92]]

                     Action To Be Taken by Claimants



Sec. 248.3  Advice of nonreceipt or loss.

    The payee or owner of a depositary check which is not received, or 
which has been lost, stolen, destroyed or mutilated or defaced to such 
an extent that it is rendered non-negotiable, should immediately notify 
the disbursing officer who issued such check or the administrative 
agency exercising jurisdiction over such disbursing officer, over his 
signature and current address, giving information as to the 
circumstances of the loss, theft or destruction of the check and whether 
it was endorsed, and also requesting that payment of the check be 
stopped. A claimant who is one other than the payee of the check, should 
present a statement in support of his ownership of the check. If the 
check has been mutilated or defaced, it should be forwarded to the 
issuing disbursing officer with request for the issuance of a 
substitute.



Sec. 248.4  Undertaking of indemnity.

    (a) If the check is found to be outstanding and unpaid and it 
appears that the proceeds are due the claimant, the disbursing officer 
will request the claimant to execute an undertaking of indemnity, Form 
2244, in a penal sum equal to the amount of the check (or checks).
    (b) Except in the circumstances set forth below, a corporate surety 
authorized by the Secretary of the Treasury to act as an acceptable 
surety on bonds in favor of the United States or two responsible 
individual sureties will be required on the undertaking of indemnity. It 
will be the responsibility of the claimant in a foreign country to 
secure a certification as to the financial sufficiency of the individual 
sureties executed by one of the persons listed in, and in the manner 
prescribed by, the instruction appearing under the Certificate as to 
Sureties on the face of Form 2244.
    (c) Where the amount of the original check (or checks) is $200 or 
less, or the equivalent in foreign currency, one financially responsible 
individual surety may be accepted.
    (d) Unless it is determined that the requirement of sureties is 
essential in the public interest, sureties will not be required under 
the following circumstances:
    (1) If the officer authorized to issue a substitute check is 
satisfied that the loss, theft, destruction, mutilation or defacement of 
the original check occurred without fault of the owner or holder and 
while the check was in the custody or control of the United States or of 
a person duly authorized as an agent of the United States when 
performing services in connection with an official function of the 
United States;
    (2) If substantially the entire check is presented and surrendered 
by the owner or holder and the disbursing officer is satisfied as to the 
identity of the check presented and that any missing portions are not 
sufficient to form the basis of a valid claim against the United States;
    (3) If the owner or holder is the United States or an officer or 
employee thereof in his official capacity, a State, the District of 
Columbia, a territory or possession of the United States, a municipal 
corporation or political subdivision of any of the foregoing, a 
corporation the entire capital of which is owned by the United States, a 
foreign government or agency thereof, a foreign central bank, or a 
Federal Reserve Bank.



Sec. 248.5  Exception to requirement of undertaking of indemnity Form 2244.

    Notwithstanding the provisions of Sec. 248.4, if in any case 
involving a financially responsible claimant it is impracticable to 
obtain the execution of Standard Form 2244, with or without sureties, 
the officer or employee responsible for handling the claim, in his 
discretion, may accept an undertaking of indemnity in the form of a 
written statement or letter, substantially as follows:

In consideration of the issuance of a substitute check in lieu of_______
                                                     (Check description)

and the payment of the substitute check, the undersigned undertakes and 
agrees to save harmless and indemnify the United States of America, its 
officers and agents, of and from any and all liability, loss, expense, 
claim,

[[Page 93]]

and demand whatsoever, arising in any manner by reason of or on account 
of said original check (or checks) or the stoppage or payment thereof, 
or the issue or payment of the substitute check (or checks), to replace 
the same.


The undertaking of indemnity should be appropriately witnessed, and if 
it is executed on behalf of a corporation or other business 
organization, the individual executing the same should furnish proof of 
this authority to so act. In appropriate cases, a foreign language 
translation of the foregoing letter of indemnity may be accepted.

[25 FR 10869, Nov. 16, 1960. Redesignated at 39 FR 20969, June 17, 1974, 
as amended at 54 FR 35648, Aug. 29, 1989]



Sec. 248.6  Recovery of original check.

    (a) If the claimant recovers an original check after he has 
furnished advice of non-receipt but before receipt of a substitute 
check, he should immediately notify the disbursing officer or agency 
concerned and hold the check until receipt of advice from the disbursing 
officer or agency concerned regarding the negotiability of such original 
check.
    (b) In the event the substitute check has been received prior to the 
recovery of the original check, the original check should be returned 
immediately to the disbursing officer.
    (c) Under no circumstances should the claimant attempt to cash both 
the original and substitute check.



Sec. 248.7  Claims requiring settlement action.

    There are certain types of claims on which the disbursing officer 
will not be authorized to take final action. These include:
    (a) Claims on original checks which have been outstanding more than 
one full fiscal year following the fiscal year in which the checks were 
issued, and
    (b) Claims involving doubtful questions of law and fact.

In such cases the disbursing officer will obtain information and 
supporting papers, including an undertaking of indemnity, from the 
claimant and transmit such data to the Claims Division, General 
Accounting Office, for settlement action.



Sec. 248.8  Inquiries.

    Claimants should direct any inquiries regarding the application of 
these regulations to the department or agency or disbursing officer 
concerned.



Sec. 248.9  Amendments and waivers.

    The Treasury Department may waive, withdraw or amend at any time or 
from time to time any or all of the foregoing regulations.



PART 250--PAYMENT ON ACCOUNT OF AWARDS OF THE FOREIGN CLAIMS SETTLEMENT COMMISSION OF THE UNITED STATES--Table of Contents




Sec.
250.1  Scope of regulations.
250.2  Forms.
250.3  Voucher applications.
250.4  Payment on awards.
250.5  Manner of payment.
250.6  Powers of attorney.
250.7  Additional evidence.

    Authority: Sec. 7, 64 Stat. 16, sec. 310, 69 Stat. 573, sec. 413, 72 
Stat. 530, sec. 213, 76 Stat. 1111; 22 U.S.C. 1626, 1641i, 1642l, 50 
U.S.C. App. 2017l.



Sec. 250.1  Scope of regulations.

    The regulations in this part govern payment by the Department of the 
Treasury on awards made and certified to the Secretary of the Treasury 
by the Foreign Claims Settlement Commission under the International 
Claims Settlement Act of 1949, as amended (22 U.S.C. 1621 et seq.), and 
Title II of the War Claims Act of 1948 (50 U.S.C. App. 2017 et seq.).

[34 FR 1897, Feb. 8, 1969]



Sec. 250.2  Forms.

    The forms referred to in Secs. 250.3 and 250.4 shall be used in 
connection with the payment of awards hereunder. Voucher applications 
for all payments will be mailed to awardees by the Financial Management 
Service, Treasury Department, Hyattsville, MD 20782, without request 
therefor by awardees.

[31 FR 9418, July 9, 1966, as amended at 49 FR 47001, Nov. 30, 1984; 58 
FR 4578, Jan. 15, 1993]

[[Page 94]]



Sec. 250.3  Voucher applications.

    (a) Execution of voucher by person named. No payment of any part of 
the amount due on account of an award will be made unless a voucher 
application therefor properly executed (preferably in ink or indelible 
pencil) is received by the Treasury Department. A voucher application 
for each payment on account of an award must be signed by each person 
whose name appears on such voucher application as payee exactly as his 
name appears thereon, with the following two exceptions:
    (1) If only the name of the payee, and not his identity, has 
changed, the payee shall sign the voucher application with his changed 
name and return it to the Financial Management Service, Treasury 
Department, Hyattsville, MD 20782; the voucher application shall be 
accompanied by an explanatory affidavit and appropriate supporting 
documents, e.g., a copy of a marriage certificate or court order of 
change of name.
    (2) If the identity of the payee has changed, paragraph (b) of this 
section shall apply. A signature by mark (X) must be witnessed by two 
persons; the signature and address of each must appear on the voucher 
application. In the case of a corporation the voucher application must 
be signed by an appropriate officer thereof having authority to do so, 
whose authority to sign on behalf of the corporation must be duly 
certified to thereon over the seal of the corporation.
    (b) Execution of voucher by other person. If the person named in the 
voucher application as payee is no longer the proper person to receive 
the payment by reason of assignment, incompetency or death, or of 
termination of a partnership or corporation named, the voucher shall be 
executed by the person entitled to payment as provided in Sec. 250.4 and 
returned to the Credit Accounting Branch with the relevant information 
and the appropriate supporting documents required by that section.

[31 FR 9418, July 9, 1966, as amended at 49 FR 47001, Nov. 30, 1984; 58 
FR 4578, Jan. 15, 1993]



Sec. 250.4  Payment on awards.

    Payment will be made only to the person or persons on behalf of whom 
the award is made, except in the following circumstances:
    (a) If such person is incompetent, payment will be made to his 
guardian, committee, or other equivalent legal representative. The law 
of the residence of the incompetent will determine whether the legal 
representative must be court appointed. If court appointment is 
required, the legal representative shall submit a certificate of the 
clerk of the appointing court, under its seal, dated within 6 months of 
the date of the voucher application for payment, showing that his 
appointment is in full force and effect. If court appointment is not 
required, the legal representative shall submit a notarized statement 
showing:
    (1) His relationship to the incompetent;
    (2) The name and address of the person having care and custody of 
the incompetent;
    (3) That any money received will be applied to the use and benefit 
of the incompetent, and
    (4) That there was no appointment of a guardian or committee.
    (b) If such person is deceased, payment will be made to his legal 
representative.
    (1) If any payment to be made is not over $1,000 and there is no 
qualified executor or administrator, the legal representative will be 
the person found by the Comptroller General to be entitled thereto, 
without the necessity of compliance with the requirements of law with 
respect to the administration of estates, upon execution and submission 
of Standard Form No. 1055 to the Financial Management Service for 
transmittal to the Comptroller General. That form is available from the 
Credit Accounting Branch.
    (2) In all other cases, the term legal representative shall include 
court-appointed or statutory administrators or executors, and successors 
in interest of the decedent, e.g., his legatees or heirs as determined 
by an appropriate court or by the law of his residence. If 
administration of the decedent's estate is closed, the legal 
representative shall submit a copy of the appropriate

[[Page 95]]

court's final order of distribution or other pertinent order, 
identifying the distributees and their addresses. If administration 
continues and the legal representative is court-appointed, he shall 
submit a certificate of the clerk of the appointing court, under its 
seal, dated within 6 months of the date of the voucher application for 
payment, showing that such appointment is in full force and effect. If 
the legal representative is not court-appointed, he shall submit 
evidence sufficient to prove his interest and authority to apply for 
payment. If that evidence is a copy of the decedent's will, it shall 
show on its face or by attachments thereto that it has been offered for 
probate, and that the appropriate court has affixed its seal and 
attached its certification of authenticity that the will is in fact the 
decedent's last will and testament.
    (c)-(d) [Reserved]
    (e) In the case of a partnership or corporation, the existence of 
which has been terminated, if a receiver or trustee has been duly 
appointed by a court of competent jurisdiction in the United States and 
has not been discharged prior to the date of payment, payment will be 
made to such receiver or trustee in accordance with the order of the 
court. In the event a receiver or trustee duly appointed by a court of 
competent jurisdiction in the United States makes an assignment of the 
claim or any part thereof with respect to which an award is made, or 
makes an assignment of such award or any part thereof, payment will be 
made to the assignee as his interest may appear. In the latter 
circumstance, certified copies of the court orders showing the authority 
of the receiver or trustee to make the assignment shall be submitted 
with the assignment. No particular form of assignment is prescribed, but 
the original assignment must be submitted to, and will be retained by 
the Treasury Department.
    (f) In the case of a partnership or corporation, the existence of 
which has been terminated, if no receiver or trustee has been duly 
appointed by a court of competent jurisdiction in the United States, or 
if such a receiver or trustee has been discharged prior to the date of 
payment without having made an assignment, payment may be made to the 
person or persons found by the Comptroller General of the United States 
to be entitled thereto. In this circumstance, the person or persons 
claiming payment shall submit to the Financial Management Service, 
Treasury Department, Hyattsville, MD 20782, such documentary evidence as 
is appropriate to show his or their right to the payment.
    (g) In the case of an assignment of an award or any part thereof 
which is made in writing and duly acknowledged and filed after such 
award is certified to the Secretary of the Treasury, payment may in the 
discretion of the Secretary of the Treasury be made to the assignee as 
his interest may appear. No particular form of assignment is prescribed, 
but the original assignment must be submitted to, and will be retained 
by the Treasury Department.

[31 FR 9418, July 9, 1966, as amended at 34 FR 1897, Feb. 8, 1969; 49 FR 
47001, Nov. 30, 1984; 58 FR 4578, Jan. 15, 1993]



Sec. 250.5  Manner of payment.

    Payment will be made by check drawn on the United States Treasury. 
Checks will be mailed to the payee at the address indicated on the 
voucher application, unless subsequent to the issue of the voucher 
application the Treasury Department receives a written request from the 
payee to deliver the check to him at some other address. Where the award 
has been entered in favor of more than one person, only one check will 
be drawn in making payment unless the payees specify the share of each 
and request separate checks.

[31 FR 9418, July 9, 1966]



Sec. 250.6  Powers of attorney.

    No power of attorney to sign a voucher application will be 
recognized but a power of attorney executed subsequent to the 
certification of an award to the Secretary of the Treasury to receive, 
endorse and collect a check given in payment on an award may be 
recognized. An appropriate form for such a power of attorney may be 
obtained

[[Page 96]]

from the Financial Management Service, Treasury Department, Hyattsville, 
MD 20782.

[31 FR 9418, July 9, 1966, as amended at 49 FR 47001, Nov. 30, 1984; 58 
FR 4578, Jan. 15, 1993]



Sec. 250.7  Additional evidence.

    The Secretary of the Treasury or the Comptroller General of the 
United States may in any case require such additional information and 
evidence as may be deemed necessary.

[31 FR 9418, July 9, 1966]



PART 256--PAYMENTS UNDER JUDGMENTS AND PRIVATE RELIEF ACTS--Table of Contents




Sec.
256.1  Judgments against the United States.
256.2  Payment of sums appropriated in private relief acts.

    Authority: 5 U.S.C. 301, 552.



Sec. 256.1  Judgments against the United States.

    (a) Persons securing money judgments against the United States, in 
excess of $100,000 in any one case, in the Court of Claims are required, 
in order to secure payment, to file original transcripts of such 
judgments with the Secretary of the Treasury for certification to the 
Congress for appropriation. Following receipt of an application on the 
part of the claimant for payment of the amount appropriated by the 
Congress, the General Accounting Office transmits a certificate of 
settlement to the Treasury Department. Payment is then made to the 
claimant by check drawn in the Treasury Department by the Field 
Operations Group, Financial Management Service. A similar procedure 
applies with respect to such judgments obtained in the Federal district 
courts, except that papers pertaining to such judgments are filed with 
the Secretary of the Treasury by the Department of Justice instead of by 
the claimant.
    (b) A procedure similar to that outlined in paragraph (a) of this 
section is followed with respect to judgments not in excess of $100,000 
in any one case except that the necessary documents are filed with the 
General Accounting Office and no action is taken by the Treasury 
Department prior to the receipt of a certificate of settlement from the 
General Accounting Office. After receipt of a certificate of settlement 
a check payable from a permanent appropriation established for the 
payment of such judgments is drawn in the Treasury Department by the 
Field Operations Group, Financial Management Service and mailed to the 
claimant in accordance with the terms of the certificate of settlement.

[23 FR 10184, Dec. 24, 1958. Redesignated at 32 FR 9562, July 1, 1967, 
as amended at 49 FR 47002, Nov. 30, 1984]



Sec. 256.2  Payment of sums appropriated in private relief acts.

    Persons entitled to payment of sums appropriated in private relief 
acts should make application for payment to the Treasury Department, 
Financial Management Service, Washington, DC 20226. Upon receipt of an 
application, bearing the signature and mailing address of the 
beneficiary, the Treasury Department will effect payment.

[29 FR 13164, Sept. 23, 1964. Redesignated at 32 FR 9562, July 1, 1967, 
as amended at 49 FR 47001, Nov. 30, 1984]



PART 270--AVAILABILITY OF RECORDS--Table of Contents




Sec.
270.1  Rules governing availability of information.
270.2  Materials available for inspection and copying.
270.3  Requests for identifiable records.
270.4  Fees for services.

    Authority: 5 U.S.C. 552.

    Source: 58 FR 25943, Apr. 29, 1993, unless otherwise noted.



Sec. 270.1  Rules governing availability of information.

    The records of the Financial Management Service required by 5 U.S.C. 
552 to be made available to the public shall be made available in 
accordance with the definitions, procedures and other provisions of the 
regulations on the Disclosure of Records of the Office of the Secretary 
and of other bureaus and offices of the Department issued under 5 U.S.C. 
552 and published as part 1 of

[[Page 97]]

title 31 of the Code of Federal Regulations, except as provided in these 
regulations.



Sec. 270.2  Materials available for inspection and copying.

    (a) Materials available. The materials in the Financial Management 
Service which are required by 5 U.S.C. 552(a)(2) to be made available 
for public inspection and copying are the following:
    (1) Final opinions, as well as orders, made in the adjudication of 
cases. These will include final dispositions of claims on Government 
checks which are of a precedential nature. Generally, however, the 
Financial Management Service does not issue orders in the adjudication 
of cases.
    (2) Statements of policy and interpretations which have been adopted 
by the Service and are not published in the Federal Register.
    (3) Administrative staff manuals and instructions to staff that 
affect a member of the public. These materials include sections of the 
Treasury Financial Manual and such Department Circulars applicable to 
Financial Management Service operations, that have been determined by 
the agency to affect a member of the public, and have not been 
incorporated into that manual or published as parts of title 31 of the 
Code of Federal Regulations.
    (4) Current indices for the foregoing materials.
    (b) Location. The materials listed in paragraph (a) of this section 
issued on or after the effective date of these regulations are available 
for inspection and copying during office hours in the public reading 
room of the Treasury Department, 15th Street and Pennsylvania Avenue, 
NW., Washington, DC 20220. Materials issued prior thereto are available 
in the public reading room to the extent feasible. If not so available, 
they may be requested as identifiable records.



Sec. 270.3  Requests for identifiable records.

    (a) Procedure. A written request for an identifiable record shall be 
addressed to: Freedom of Information Disclosure Officer, Financial 
Management Service, 401 14th Street, SW., Washington, DC 20227.
    (b) Determination of request. Determination as to the disclosure of 
a record request shall be made, subject to appeal to the Commissioner of 
the Financial Management Service, by the head of the division in which 
the record belongs and by the Disclosure Officer of the agency. The 
decision of the Commissioner shall constitute final agency action, 
unless the Commissioner refers the appeal to the Fiscal Assistant 
Secretary, in which case the decision of the Fiscal Assistant Secretary 
shall constitute final agency action.



Sec. 270.4  Fees for services.

    Fees for services performed by the Financial Management Service will 
be imposed and collected as set forth in part 1 of title 31 of the Code 
of Federal Regulations.



PART 281--FOREIGN EXCHANGE OPERATIONS--Table of Contents




Sec.
281.1  Authority.
281.2  [Reserved]
281.3  Collections.
281.4  Guaranty funds.
281.5  Depositaries.
281.6  Withdrawals from Treasury accounts.
281.7  Limitations.
281.8  Reporting and accounting.
281.9  General provisions.

    Authority: Sec. 114, 64 Stat. 836, sec. 613, 75 Stat. 443; 31 U.S.C. 
66b, 22 U.S.C. 2363, E.O. 10488, 18 FR 5699, 3 CFR, 1949-1953 Comp., p. 
972, E.O. 10900, 26 FR 143, 3 CFR, 1959-1963 Comp., p. 429.

    Source: 26 FR 10054, Oct. 26, 1961, unless otherwise noted.



Sec. 281.1  Authority.

    By virtue of the authority vested in the Secretary of the Treasury 
by section 114 of the Budget and Accounting Procedures Act of 1950, 64 
Stat. 836, 31 U.S.C. 66b; section 613 of the Act of September 4, 1961, 
75 Stat. 443; Executive Order No. 10488, 18 FR 5699, 3 CFR 1949-1953 
Comp.; and Executive Order No. 10900, 26 FR 143, the following 
regulations are prescribed for administration of the purchase custody, 
deposit, transfer, sale and reporting of foreign exchange (including 
credits and currencies) by executive departments and agencies 
(hereinafter referred to as agencies).

[[Page 98]]



Sec. 281.2  [Reserved]



Sec. 281.3  Collections.

    Foreign exchange collected by agencies shall be delivered promptly 
into the custody of accountable officers for credit to accounts of the 
Secretary of the Treasury (hereinafter referred to as the Secretary) 
unless otherwise directed by the Secretary. The term ``collections,'' 
for the purpose of these regulations in this part, does not include 
foreign exchange acquired by the United States by purchase with dollars. 
The accountable officer shall maintain records, showing the collections, 
by source, and indicating the miscellaneous receipt accounts or other 
accounts in the Treasury to be credited with dollar proceeds from sale 
of the foreign exchange, and such further classifications as may be 
needed to indicate exchange which can be used only for restricted 
purposes. Accountable officers shall be advised by the collecting 
agencies of the source of collections and any restrictions on the use of 
the foreign exchange in order that the foregoing records may be 
maintained.



Sec. 281.4  Guaranty funds.

    The regulations in this part are applicable to all foreign exchange 
acquired by the United States under guaranty provisions of section 1011 
of the United States Information and Educational Exchange Act of 1948, 
as amended (22 U.S.C. 1442), except that receipts of such foreign 
exchange shall be deposited in the foreign exchange accounts of the 
United States Treasury referred to in Sec. 281.5(c).



Sec. 281.5  Depositaries.

    (a) Except as provided in paragraph (b) of this section, foreign 
exchange which is held by accountable officers for account of the 
Secretary and foreign exchange acquired by accountable officers by 
purchase or otherwise, which is not immediately disbursed but is held by 
such officers for their own account or for the account of any agency, 
shall be maintained only in depositaries designated by the Secretary. 
Unless otherwise directed by the Secretary, accountable officers are not 
required to have separate depositary accounts for foreign exchange held 
for the Secretary's account.
    (b) Accountable officers may carry foreign exchange as cash outside 
depositaries only pursuant to authority granted in accordance with 
Treasury Department Circular No. 1030 dated July 24, 1959, as amended.
    (c) Deposits in and withdrawals from foreign exchange accounts 
maintained with depositaries in the name of the United States Treasury 
will be made only as directed by the Secretary.



Sec. 281.6  Withdrawals from Treasury accounts.

    Foreign exchange shall be withdrawn from accounts of the Secretary 
on the books of accountable officers or from the foreign exchange 
accounts carried with depositaries in the name of the United States 
Treasury, only for the purpose of sale for dollars or transfer to 
agencies for authorized purposes, without reimbursement to the Treasury, 
as provided by or pursuant to law. Such transfers, as well as transfers 
between foreign exchange accounts of the Secretary and between foreign 
exchange accounts in the name of the United States Treasury, shall be 
made only by direction of the Secretary. An agency requiring foreign 
exchange from the Treasury Department shall make request of the 
Secretary, indicating the amount of exchange required, in units of 
foreign currency, and the name and location of the accountable officer 
to receive the exchange. To the extent practicable and desirable, 
standing authorizations will be given for withdrawals from accounts of 
the Secretary. The following conditions apply to the sale of foreign 
exchange and to the requisition of foreign exchange without dollar 
payment:
    (a) Sales. With respect to the sale of foreign exchange held in 
accounts of the Secretary, the payment in dollars shall be calculated at 
the rate of exchange that would otherwise be available to the United 
States for the acquisition of the foreign exchange for its official 
disbursements unless otherwise determined by the Treasury Department in 
consultation with the agencies concerned. When the rate that would 
otherwise be available to the United States is not readily 
ascertainable, the

[[Page 99]]

Treasury Department shall be consulted. The dollar proceeds realized 
from the sale of exchange shall be credited to the appropriate receipt, 
appropriation or refund account on the books of the Treasury. The dollar 
payment for foreign exchange purchased shall not be charged as an 
appropriation expenditure until the foreign exchange is disbursed.
    (b) Transfers without reimbursement. When foreign exchange is to be 
obtained from the Treasury Department without payment of dollars, the 
agency concerned shall furnish written certification that the exchange 
may be used without reimbursement to the Treasury, citing the relevant 
legal authority. In cases where international agreements or Bureau of 
the Budget allocations specify the programs for which foreign exchange 
may be used, the Secretary may transfer exchange to agencies without 
requiring a certification.

[26 FR 10054, Oct. 26, 1961, as amended at 29 FR 11497, Aug. 11, 1964]



Sec. 281.7  Limitations.

    The following limitations apply to the purchase and holding of 
foreign exchange:
    (a) Unless otherwise authorized by the Secretary, no agency or 
accountable officer shall purchase, or direct the purchase of, foreign 
exchange from any source outside the Government of the United States, 
except when exchange for the purpose intended is not available for 
purchase from within the Government.
    (b) All foreign exchange acquired by agencies by transfer from the 
Treasury Department, without payment of dollars, for the purpose of 
making authorized expenditures, shall be placed with accountable 
officers for account of the agencies concerned.
    (c) Unless otherwise authorized by the Secretary, no accountable 
officer shall purchase foreign exchange which, together with the balance 
on hand at the time of purchase, would exceed estimated requirements for 
a thirty-day period.
    (d) To the maximum extent possible, foreign exchange accounts which 
are earmarked for specific programs shall be maintained on an unfunded 
basis. Each agency responsible for administering international 
agreements pertaining to the use of foreign exchange held in funded 
accounts shall review the agreement and other considerations relevant to 
each such account at least annually to determine if the account can be 
placed on an unfunded basis, and shall initiate appropriate action to 
accomplish the objective of minimizing the number of funded program 
accounts and the amounts therein. The resulting determinations and the 
status of actions undertaken shall be furnished in writing to the 
Treasury Department within 60 days from the date of this regulation and 
each time thereafter that there is a change of status of a particular 
account, or as requested by the Treasury Department. Exchange which 
becomes eligible for removal from a funded status either as a result of 
the foregoing determinations, or because of the expiration of the period 
of availability for restricted use under the terms of international 
agreements, or for other reasons, shall be released promptly by the 
program agency for transfer to a nonrestricted Treasury sales account.

[26 FR 10054, Oct. 26, 1961, as amended at 29 FR 11497, Aug. 11, 1964]



Sec. 281.8  Reporting and accounting.

    The Treasury Department will maintain a system of central accounting 
and reporting for the purpose of providing information on foreign 
exchange operations to the President, the Congress, and the public. The 
Treasury Department will also prescribe rules to enhance consistency in 
reporting of foreign exchange operations by all agencies. Agencies shall 
furnish such reports and information as may be required for the 
administration of the provisions of this circular.



Sec. 281.9  General provisions.

    (a) Nothing contained in this part shall be construed as having the 
effect of superseding or amending the provisions of any regulations 
issued or approved by the Secretary pursuant to the Act of December 23, 
1944, as amended (67 Stat. 61).
    (b) The Secretary may waive, withdraw, or amend at any time or from 
time to time any or all of the provisions of the regulations of this 
part.

[[Page 100]]

    (c) Implementing regulations within the framework of this circular 
will be issued by the Fiscal Assistant Secretary of the Treasury. All 
communications pertaining to the administration of the provisions of 
this part shall be directed to the Fiscal Assistant Secretary.



PART 285--DEBT COLLECTION AUTHORITIES UNDER THE DEBT COLLECTION IMPROVEMENT ACT OF 1996--Table of Contents




                  Subpart A--Disbursing Official Offset

Sec.
285.1  Collection of past-due support by administrative offset.
285.2  Offset of tax refund payments to collect past-due, legally 
          enforceable nontax debt.
285.3  Offset of tax refund payments to collect past-due support.
285.4  Offset of Federal benefit payments to collect past-due, legally 
          enforceable nontax debt.
285.7  Salary offset.
285.8  Offset of tax refund payments to collect state income tax 
          obligations.

                Subpart B--Authorities Other Than Offset

285.11  Administrative wage garnishment.
285.12  Transfer of debts to Treasury for collection.
285.13  Barring delinquent debtors from obtaining Federal loans or loan 
          insurance or guarantees.

    Authority: 26 U.S.C. 6402; 31 U.S.C. 321, 3701, 3711, 3716, 3720A, 
3720B, 3720D; E.O. 13019; 3 CFR, 1996 Comp., p. 216.

    Source: 62 FR 34179, June 25, 1997, unless otherwise noted.



                  Subpart A--Disbursing Official Offset



Sec. 285.1  Collection of past-due support by administrative offset.

    (a) Definitions. For purposes of this section:
    Administrative offset means withholding funds payable by the United 
States (including funds payable by the United States on behalf of a 
State government) to, or held by the United States for, a person to 
satisfy a debt.
    Debt as used in this section is synonymous with the term past-due 
support.
    Disbursing official includes an official who has authority to 
disburse public money pursuant to 31 U.S.C. 3321 or another Federal law.
    FMS means the Financial Management Service, a bureau of the 
Department of the Treasury. FMS is the designee of the Secretary of the 
Treasury for all matters concerning this section, unless otherwise 
specified.
    HHS means the Department of Health and Human Services, Office of 
Child Support Enforcement.
    Past-due support means the amount of support determined under a 
court order, or an order of an administrative procedure established 
under State law, for support and maintenance of a child, or of a child 
and the parent with whom the child is living, which has not been paid. 
The term child as used in this definition is not limited to minor 
children.
    Past-due support being enforced by the State means there has been an 
assignment of the support rights to the State, or the State making the 
request for offset is providing services to individuals pursuant to 42 
U.S.C. 654(5) (section 454(5) of the Social Security Act), or the State 
is enforcing support pursuant to a cooperative agreement with or by an 
Indian tribal government.
    State means the several States of the United States. The term State 
also includes the District of Columbia, American Samoa, Guam, the United 
States Virgin Islands, the Commonwealth of the Northern Mariana Islands, 
and the Commonwealth of Puerto Rico.
    Secretary means the Secretary of the Treasury.
    (b) General rule. FMS may enter into a reciprocal agreement with a 
State for the collection of past-due support being enforced by the State 
by administrative offset from certain Federal payments. Upon 
notification of past-due support either directly from a State which has 
entered into such an agreement or from HHS, disbursing officials of FMS 
or any other disbursing official of the United States shall offset 
Federal payments which are subject to offset under this section, to 
collect past-due support. The amount offset, minus the offset fee, shall 
be forwarded to the

[[Page 101]]

State to be distributed in accordance with applicable laws and 
procedures.
    (c) Agreements. FMS may enter into reciprocal agreements with States 
for disbursing officials of FMS and any other Federal disbursing 
official to offset certain Federal payments to collect past-due support 
being enforced by the State. The agreement shall contain any 
requirements which FMS considers appropriate to facilitate the offset 
and prevent duplicative efforts and shall require States to prescribe 
procedures governing the collection of past-due support by Federal 
administrative offset. For purposes of this section, reciprocal means of 
mutual benefit. An agreement between FMS and a State to collect past-due 
support by offsetting Federal payments will be considered of mutual 
benefit and it is not required that States conduct administrative 
offsets to collect debts owed to the Federal Government. States which 
have entered into an agreement with FMS pursuant to this section may 
thereafter request, in the manner prescribed herein, that an offset be 
performed. Such requests shall be made by the appropriate State 
disbursing official which, for purposes of this section, means an 
appropriate official of the State agency which administers or supervises 
the administration of the State plan under Title IV-D of the Social 
Security Act.
    (d) Notification to FMS of past-due support. (1) States notifying 
FMS of past-due support must do so in the manner and format prescribed 
by FMS. States notifying HHS of past-due support must do so in the 
manner and format prescribed by HHS. HHS shall notify FMS of all past-
due support referred to HHS by States for collection by administrative 
offset provided that the requirements of paragraphs (d)(3) and (h) of 
this section have been met.
    (2) When a State has knowledge that past-due support is being 
enforced by more than one State, the State notifying FMS or HHS of the 
past-due support must inform any other State involved in enforcing the 
past-due support when it refers the debt for offset and when it receives 
the offset amount.
    (3) The notification of past-due support must be accompanied by a 
certification that the debt is past-due, legally enforceable, and that 
the State has complied with all the requirements as set forth in 
paragraph (h) of this section and with any requirements imposed by State 
law or procedure. For debts so certified, the Secretary may waive 
sections 552a (o) and (p) of Title 5, United States Code, where 
applicable, in accordance with the Secretary's authority under 31 U.S.C. 
3716(f).
    (4) FMS may reject a notification of past-due support which does not 
comply with the requirements of this section. The State will be notified 
of the rejection along with the reason for the rejection.
    (e) Minimum amount of past-due support. FMS will reject a 
notification of past-due support where the past-due support owed is less 
than $25.00. This amount may be adjusted from time to time by FMS to 
ensure that the cost of collection does not exceed the debt.
    (f) Limitations. Debts properly submitted to FMS for administrative 
offset will remain subject to collection by administrative offset until 
withdrawn by the State provided the debt remains past-due and legally 
enforceable.
    (g) Notification of changes in status of debt. The State notifying 
FMS or HHS of past-due support shall, in the manner and in the time 
frames provided by FMS or HHS, notify FMS or HHS of deletions or 
decreases in the amount of a debt referred for collection by 
administrative offset. The State may notify FMS or HHS of any increases 
in the amount of a debt referred for collection by administrative offset 
provided the State has complied with the requirements of paragraph (h) 
of this section with regard to those amounts.
    (h) Advance notification of intent to collect by administrative 
offset. (1) The State, or FMS or HHS on behalf of the State, if the 
State requests and FMS or HHS agrees, shall send a written notification, 
at least 30 days in advance of referral of the debt for offset, to the 
individual owing past-due support, informing the individual that the 
State intends to refer the debt for collection by administrative offset 
against Federal payments. The notice must also inform the individual of:
    (i) The nature and amount of the debt; and

[[Page 102]]

    (ii) The right to an administrative review by the State referring 
the debt or, upon the request of the individual, by the State with the 
order upon which the referral was based, of the determination of the 
State with respect to the debt and of the procedures and time frames 
established by the State for such reviews.
    (2) Prior to referring a debt to FMS for collection by 
administrative offset, States must provide individuals with a reasonable 
opportunity to exercise the rights enumerated in paragraph (h)(1) of 
this section in accordance with procedures prescribed by the State.
    (i) Payments subject to offset. Federal payments subject to offset 
under this section include all Federal payments except:
    (1) Payments due to an individual under
    (i) Title IV of the Higher Education Act of 1965;
    (ii) The Social Security Act;
    (iii) Part B of the Black Lung Benefits Act;
    (iv) Any law administered by the Railroad Retirement Board;
    (2) Payments which the Secretary determines are exempt from offset 
in accordance with paragraph (k) of this section;
    (3) Payments from which collection of past-due support by 
administrative offset is expressly prohibited by law;
    (4) Payments made under the Internal Revenue Code of 1986 (except 
that tax refund payments are subject to offset under separate 
authority); and
    (5) Payments made under the tariff laws of the United States.
    (j) Special provisions applicable to Federal salary payments. (1) 
Unless a lower maximum offset limitation is provided by applicable State 
law, the maximum part of a Federal salary payment per pay period subject 
to offset to collect past-due support shall not exceed those amounts set 
forth at section 1673(b)(2) (A) and (B) of Title 15, United States Code, 
as follows:
    (i) Fifty (50%) percent of the debtor's aggregate disposable 
earnings for any pay period, where the debtor asserts by affidavit, or 
by other acceptable evidence, that he/she is supporting a spouse and/or 
dependent child, other than the former spouse and/or child for whom 
support is being collected, except that an additional five (5%) percent 
will apply if it appears that such earnings are to enforce past-due 
support for a period which is twelve (12) weeks or more prior to the pay 
period to which the offset applies. A debtor shall be considered to be 
supporting a spouse and/or dependent child only if the debtor provides 
over half of the spouse's and/or dependent child's support.
    (ii) Sixty (60%) percent of the debtor's aggregate disposable 
earnings for any pay period where the debtor fails to assert by 
affidavit or establish by other acceptable evidence that he/she is 
supporting a spouse and/or dependent child, other than a former spouse 
and/or child for whom support is being collected, except that an 
additional five (5%) percent will apply if it appears that such earnings 
are to enforce past-due support for a period which is twelve (12) weeks 
or more prior to the pay period to which the offset applies.
    (2) The maximum allowable offset amount shall be reduced by the 
amount of any deductions in pay resulting from a garnishment order for 
support. Nothing in this rule is intended to alter rules applicable to 
processing garnishment orders for child support and/or alimony.
    (3) Federal salary payments subject to offset for the collection of 
past-due support include current basic pay, special pay, incentive pay, 
retainer pay, overtime, or in the case of an employee not entitled to 
basic pay, other authorized pay. Aggregate disposable earnings for 
purposes of determining the maximum amounts which may be offset under 
paragraph (j)(1) of this section is Federal salary pay remaining after 
the deduction of:
    (i) Any amount required by law to be withheld;
    (ii) Amounts properly withheld for Federal, State or local income 
tax purposes;
    (iii) Amounts deducted as health insurance premiums;
    (iv) Amounts deducted as normal retirement contributions, not 
including amounts deducted for supplementary coverage; and
    (v) Amounts deducted as normal life insurance premiums not including

[[Page 103]]

amounts deducted for supplementary coverage.
    (4) At least 30 days in advance of offset, the disbursing official 
shall send written notice to the debtor of the maximum offset 
limitations described in paragraph (j)(1) of this section. The notice 
shall include a request that the debtor submit supporting affidavits or 
other documentation necessary to determine the applicable offset 
percentage limitation. The notice shall also inform the debtor of the 
percentage that will be deducted if he/she fails to submit the requested 
documentation.
    (5) At the time the past-due support debt is submitted for offset, 
the State shall advise FMS or HHS if the maximum amount of a Federal 
salary payment that may be offset is less than the amount described 
under this paragraph.
    (k) Payments exempt from administrative offset to collect past-due 
support being enforced by a State. The Secretary will exempt from 
administrative offset under this part payments made under means-tested 
programs when requested by the head of the Federal agency which 
administers the program. For purposes of this section, means-tested 
programs are programs for which eligibility is based on a determination 
that income and/or assets of the beneficiary are inadequate to provide 
the beneficiary with an adequate standard of living without program 
assistance. The Secretary may exempt from administrative offset under 
this section any other class or type of payment upon the written request 
of the head of the agency which authorizes the payments. In determining 
whether or not to grant such exemptions, the Secretary shall give due 
consideration to whether administrative offset would tend to interfere 
substantially with or defeat the purposes of the payment agency's 
program.
    (l) Fees. A fee which FMS has determined to be sufficient to 
reimburse FMS for the full cost of the offset procedure, shall be 
deducted from each offset amount. FMS will notify the States, annually 
and in advance, of the amount of the fee to be charged for each offset.
    (m) Offsetting payments--(1) Conducting the offset. Disbursing 
officials of the Department of the Treasury, the Department of Defense, 
the United States Postal Service, or any other Government corporation, 
any disbursing official of the United States designated by the 
Secretary, or any disbursing official of an executive department or 
agency that disburses Federal payments shall offset payments subject to 
offset under this section to satisfy, in whole or part, a debt owed by 
the payee. Disbursing officials shall compare payment certification 
records with records of debts submitted to FMS for collection by 
administrative offset. A match will occur when the taxpayer identifying 
number and name control of a payment record are the same as the taxpayer 
identifying number and name control of a debt record. The taxpayer 
identifying number for an individual is the individual's social security 
number. When a match occurs and all other requirements for offset have 
been met, the disbursing official shall offset the payment to satisfy, 
in whole or part, the debt. Any amounts not offset shall be paid to the 
payee. The amount that can be offset from a single payment is the lesser 
of the amount of the debt (including interest, penalties, and 
administrative costs); the amount of the payment; or the amount of the 
payment available for offset if a statute or regulation prohibits offset 
of the entire amount. Debts remain subject to collection by offset until 
paid in full.
    (2) Disposition of amounts collected. FMS will transmit amounts 
collected for debts, less fees charged under paragraph (l) of this 
section, to HHS or to the appropriate State. If FMS learns that an 
erroneous offset payment has been made to HHS or any State, FMS will 
notify HHS or the appropriate State that an erroneous offset payment has 
been made. FMS may deduct the amount of the erroneous offset payment 
from amounts payable to HHS or the State, as the case may be. 
Alternatively, upon FMS' request, the State shall return promptly to the 
affected payee or FMS an amount equal to the amount of the erroneous 
payment (unless the State previously has paid such amounts, or any 
portion of such amounts, to the affected payee). HHS and States shall 
notify FMS any time

[[Page 104]]

HHS or a State returns an erroneous offset payment to an affected payee. 
FMS and HHS, or the appropriate State, will adjust their debtor records 
accordingly.
    (n) Administrative offset priorities. When a payee/debtor owes more 
than one debt which has been referred to FMS for collection by 
administrative offset, any offset by a disbursing official will be 
applied first to past-due support assigned to a State and will be 
applied to any other past-due support after any other reductions allowed 
by law.
    (o) Notification of offset. (1) Disbursing officials of FMS or any 
other disbursing official which conducts an offset will notify the payee 
in writing of the occurrence of the offset to satisfy past-due support. 
The notice shall inform the payee of the type and amount of the payment 
that was offset; the identity of the State which requested the offset; 
and a contact point within the State that will handle concerns regarding 
the offset. Disbursing officials shall not be liable for failure to 
provide this notice.
    (2) Disbursing officials of FMS or any other disbursing official 
which conducts an offset under this section will share with HHS, upon 
request by the Secretary of HHS, information contained in payment 
certification records of persons who are delinquent in child support 
obligations that would assist in the collection of such debts. When no 
offset is conducted, disbursing officials of FMS or any other disbursing 
official, will provide such information to HHS to the extent such 
information is available from offset activities conducted by FMS and 
other disbursing officials.
    (p) Liability of disbursing officials and payment agencies. Neither 
the disbursing official nor the agency authorizing the payment shall be 
liable for the amount of the administrative offset on the basis that the 
underlying obligation, represented by the payment before the 
administrative offset was taken, was not satisfied. Disbursing officials 
will notify the agency authorizing the payment that the offset has 
occurred so that the agency authorizing the payment may direct any 
inquiries concerning the offset to the appropriate State.

[62 FR 36210, July 7, 1997, as amended at 63 FR 46145, Aug. 28, 1998]



Sec. 285.2  Offset of tax refund payments to collect past-due, legally enforceable nontax debt.

    (a) Definitions. For purposes of this section:
    Creditor agency means a Federal agency owed a claim that seeks to 
collect that claim through tax refund offset.
    Debt or claim refers to an amount of money, funds, or property which 
has been determined by an agency official to be due the United States 
from any person, organization, or entity, except another Federal agency. 
For the purposes of this section, the terms ``claim'' and ``debt'' are 
synonymous and interchangeable and includes debt administered by a third 
party acting as an agent for the Federal Government.
    Debtor means a person who owes a debt or claim. The term ``person'' 
includes any individual, organization or entity, except another Federal 
agency.
    FMS means the Financial Management Service, a bureau of the 
Department of the Treasury.
    IRS means the Internal Revenue Service, a bureau of the Department 
of the Treasury.
    Tax refund offset means withholding or reducing a tax refund payment 
by an amount necessary to satisfy a debt owed by the payee(s) of a tax 
refund payment.
    Tax refund payment means any overpayment of Federal taxes to be 
refunded to the person making the overpayment after the IRS makes the 
appropriate credits as provided in 26 U.S.C. 6402(a) and 26 CFR 6402-
3(a)(6)(i) for any liabilities for any tax on the part of the person who 
made the overpayment.
    (b) General rule. (1) A Federal agency (as defined in 26 U.S.C. 
6402(g)) that is owed by a person a past-due, legally enforceable nontax 
debt shall notify FMS of the amount of such debt for collection by tax 
refund offset. However, any agency subject to section 9 of the Act of 
May 18, 1933 (16 U.S.C. 831h) owed such a debt may, but is not required 
to, notify FMS of the amount of such debt for collection by tax refund 
offset.

[[Page 105]]

    (2) FMS will compare tax refund payment records, as certified by the 
IRS, with records of debts submitted to FMS. A match will occur when the 
taxpayer identifying number (as that term is used in 26 U.S.C. 6109) and 
name (or derivation of the name, known as a ``name control'') of a 
payment certification record are the same as the taxpayer identifying 
number and name control of a debtor record. When a match occurs and all 
other requirements for tax refund offset have been met, FMS will reduce 
the amount of any tax refund payment payable to a debtor by the amount 
of any past-due, legally enforceable debt owed by the debtor. Any 
amounts not offset will be paid to the payee(s) listed in the payment 
certification record.
    (3) This section does not apply to any debt or claim arising under 
the Internal Revenue Code.
    (4)(i) This section applies to Federal Old Age, Survivors and 
Disability Insurance (OASDI) overpayments provided the requirements of 
31 U.S.C. 3720A(f)(1) and (2) are met with respect to such overpayments.
    (ii) For purposes of this section, OASDI overpayment means any 
overpayment of benefits made to an individual under title II of the 
Social Security Act (42 U.S.C. 401 et seq.).
    (5) A creditor agency is not precluded from using debt collection 
procedures, such as wage garnishment, to collect debts that have been 
submitted to FMS for purposes of offset under this part. Such debt 
collection procedures may be used separately or in conjunction with 
offset collection procedures.
    (c) Regulations. Prior to submitting debts to FMS for collection by 
tax refund offset, Federal agencies shall promulgate temporary or final 
regulations under 31 U.S.C. 3716 and 31 U.S.C. 3720A, governing the 
agencies' authority to collect debts by administrative offset, in 
general, and offset of tax refund payments, in particular.
    (d) Agency certification and referral of debt--(1) Past-due, legally 
enforceable debt eligible for tax refund offset. For purposes of this 
section, when a Federal agency refers a past-due, legally enforceable 
debt to FMS for tax refund offset, the agency will certify to FMS that:
    (i) The debt is past-due and legally enforceable in the amount 
submitted to FMS and that the agency will ensure that collections are 
properly credited to the debt;
    (ii) Except in the case of a judgment debt or as otherwise allowed 
by law, the debt is referred for offset within ten years after the 
agency's right of action accrues;
    (iii) The creditor agency has made reasonable efforts to obtain 
payment of the debt in that the agency has:
    (A) Submitted the debt to FMS for collection by administrative 
offset and complied with the provisions of 31 U.S.C. 3716(a) and related 
regulations, to the extent that collection of the debt by administrative 
offset is not prohibited by statute;
    (B) Notified, or has made a reasonable attempt to notify, the debtor 
that the debt is past-due, and unless repaid within 60 days after the 
date of the notice, will be referred to FMS for tax refund offset;
    (C) Given the debtor at least 60 days to present evidence that all 
or part of the debt is not past-due or legally enforceable, considered 
any evidence presented by the debtor, and determined that the debt is 
past-due and legally enforceable; and
    (D) Provided the debtor with an opportunity to make a written 
agreement to repay the amount of the debt;
    (iv) The debt is at least $25; and
    (v) In the case of an OASDI overpayment--
    (A) The individual is not currently entitled to monthly insurance 
benefits under title II of the Social Security Act (42 U.S.C. 401 et 
seq.);
    (B) The notice describes conditions under which the Commissioner of 
Social Security is required to waive recovery of the overpayment, as 
provided under 42 U.S.C. 404(b); and
    (C) If the debtor files a request for a waiver under 42 U.S.C. 
404(b) within the 60-day notice period, the agency has considered the 
debtor's request.
    (2) Pre-offset notice and consideration of evidence for past-due, 
legally enforceable debt. (i) For purposes of paragraph (d)(1)(iii)(B) 
of this section, a creditor agency has made a reasonable attempt to 
notify the debtor if the agency uses

[[Page 106]]

the current address information contained in the agency's records 
related to the debt. Agencies may, but are not required to, obtain 
address information from the IRS pursuant to 26 U.S.C. 6103(m)(2), (4), 
or (5).
    (ii) For purposes of paragraph (d)(1)(iii)(C) of this section, if 
the evidence presented by the debtor is considered by an agent of the 
creditor agency, or other entities or persons acting on the agency's 
behalf, the debtor must be accorded at least 30 days from the date the 
agent or other entity or person determines that all or part of the debt 
is past-due and legally enforceable to request review by an officer or 
employee of the agency of any unresolved dispute. The agency must then 
notify the debtor of its decision.
    (3) Referral of past-due, legally enforceable debt. A Federal agency 
will submit past-due, legally enforceable debt information for tax 
refund offset to FMS in the time and manner prescribed by FMS. For each 
debt, the creditor agency will include the following information:
    (i) The name and taxpayer identifying number (as defined in 26 
U.S.C. 6109) of the debtor who is responsible for the debt;
    (ii) The amount of such past-due and legally enforceable debt;
    (iii) The date on which the debt became past-due;
    (iv) The designation of the Federal agency or subagency referring 
the debt; and
    (v) In the case of an OASDI overpayment, a certification by the 
Commissioner of Social Security designating whether the amount payable 
to the agency is to be deposited in either the Federal Old-Age and 
Survivors Insurance Trust Fund or the Federal Disability Insurance Trust 
Fund, but not both.
    (4) Correcting and updating referral. If, after referring a past-
due, legally enforceable debt to FMS as provided in paragraph (d)(3) of 
this section, a creditor agency determines that an error has been made 
with respect to the information transmitted to FMS, or if an agency 
receives a payment or credits a payment to the account of a debtor 
referred to FMS for offset, or if the debt amount is otherwise 
incorrect, the agency shall promptly notify FMS and make the appropriate 
correction of the agency's records. Creditor agencies will provide 
certification as required under paragraph (d)(1) of this section for any 
increases to amounts owed.
    (5) FMS may reject a certification which does not comply with the 
requirements of paragraph (d)(1) of this section. Upon notification of 
the rejection and the reason for the rejection, a creditor agency may 
resubmit the debt with a corrected certification.
    (e) Priorities for offset. (1) A tax refund payment shall be reduced 
first by the amount of any past-due support assigned to a State under 
section 402(a)(26) or section 471(a)(17) of the Social Security Act (42 
U.S.C. 602(a)(26) or 42 U.S.C. 671(a)(17)) which is to be offset under 
26 U.S.C. 6402(c), 42 U.S.C. 664 and the regulations thereunder; second, 
by the amount of any past-due, legally enforceable debt owed to a 
Federal agency which is to be offset under 26 U.S.C. 6402(d), 31 U.S.C. 
3720A and this section; and third, by the amount of any qualifying past-
due support not assigned to a State which is to be offset under 26 
U.S.C. 6402(c), 42 U.S.C. 664 and the regulations thereunder.
    (2) If a debtor owes more than one past-due, legally enforceable 
debt to a Federal agency or agencies, the tax refund payment shall be 
credited against the debts in the order in which the debts accrued. A 
debt shall be considered to have accrued at the time at which the agency 
determines that the debt became past due.
    (3) Reduction of the tax refund payment pursuant to 26 U.S.C. 
6402(a), (c), and (d) shall occur prior to crediting the overpayment to 
any future liability for an internal revenue tax. Any amount remaining 
after tax refund offset under 26 U.S.C. 6402 (a), (c), and (d) shall be 
refunded to the taxpayer, or applied to estimated tax, if elected by the 
taxpayer pursuant to IRS regulations.
    (f) Post-offset notice to the debtor, the creditor agency, and the 
IRS. (1)(i) FMS will notify the payee(s) to whom the tax refund payment 
is due, in writing of:
    (A) The amount and date of the offset to satisfy a past-due, legally 
enforceable nontax debt;

[[Page 107]]

    (B) The creditor agency to which this amount has been paid or 
credited; and
    (C) A contact point within the creditor agency that will handle 
concerns or questions regarding the offset.
    (ii) The notice in paragraph (f)(1)(i) of this section will also 
advise any non-debtor spouse who may have filed a joint tax return with 
the debtor of the steps which a non-debtor spouse may take in order to 
secure his or her proper share of the tax refund. See paragraph (g) of 
this section.
    (2) FMS will advise each creditor agency of the names, mailing 
addresses, and identifying numbers of the debtors from whom amounts of 
past-due, legally enforceable debt were collected and of the amounts 
collected from each debtor for that agency. FMS will not advise the 
creditor agency of the source of payment from which such amounts were 
collected. If a payment from which an amount of past-due, legally 
enforceable debt is to be withheld is payable to two individual payees, 
FMS will notify the creditor agency and furnish the name and address of 
each payee to whom the payment was payable.
    (3) At least weekly, FMS will notify the IRS of the names and 
taxpayer identifying numbers of the debtors from whom amounts of past-
due, legally enforceable debt were collected and the amounts collected 
from each debtor.
    (g) Offset made with regard to a tax refund payment based upon joint 
return. If the person filing a joint return with a debtor owing the 
past-due, legally enforceable debt takes appropriate action to secure 
his or her proper share of a tax refund from which an offset was made, 
the IRS will pay the person his or her share of the refund and request 
that FMS deduct that amount from amounts payable to the creditor agency. 
FMS and the creditor agency will adjust their debtor records 
accordingly.
    (h) Disposition of amounts collected. FMS will transmit amounts 
collected for past-due, legally enforceable debts, less fees charged 
under paragraph (i) of this section, to the creditor agency's account. 
If an erroneous payment is made to any agency, FMS will notify the 
creditor agency that an erroneous payment has been made. The agency 
shall pay promptly to FMS an amount equal to the amount of the erroneous 
payment (without regard to whether any other amounts payable to such 
agency have been paid).
    (i) Fees. The creditor agency will reimburse FMS and the IRS for the 
full cost of administering the tax refund offset program. FMS will 
deduct the fees from amounts collected prior to disposition and transmit 
a portion of the fees deducted to reimburse the IRS for its share of the 
cost of administering the tax refund offset program. To the extent 
allowed by law, creditor agencies may add the offset fees to the debt.
    (j) Review of tax refund offsets. Any reduction of a taxpayer's 
refund made pursuant to 26 U.S.C. 6402(d) shall not be subject to review 
by any court of the United States or by the Secretary of the Treasury, 
FMS or IRS in an administrative proceeding. No action brought against 
the United States to recover the amount of this reduction shall be 
considered to be a suit for refund of tax. Any legal, equitable, or 
administrative action by any person seeking to recover the amount of the 
reduction of the overpayment must be taken against the Federal creditor 
agency to which the amount of the reduction was paid. Any action which 
is otherwise available with respect to recoveries of overpayments of 
benefits under 42 U.S.C. 404 must be taken against the Commissioner of 
Social Security.
    (k) Access to and use of confidential tax information. Access to and 
use of confidential tax information in connection with the tax refund 
offset program are restricted by 26 U.S.C. 6103. Generally, agencies 
will not receive confidential tax information from FMS. To the extent 
such information is received, agencies are subject to the safeguard, 
recordkeeping, and reporting requirements of 26 U.S.C. 6103(p)(4) and 
the regulations thereunder. The agency shall inform its officers and 
employees who access or use confidential tax information of the 
restrictions and penalties under the Internal Revenue Code for misuse of 
confidential tax information.

[[Page 108]]

    (l) Effective date. This section applies to tax refund payments 
payable under 26 U.S.C. 6402 after January 1, 1998.



Sec. 285.3  Offset of tax refund payments to collect past-due support.

    (a) Definitions. For purposes of this section:
    Debt as used in this section is synonymous with the term past-due 
support unless otherwise indicated.
    Debtor as used in this section means a person who owes past-due 
support.
    FMS means the Financial Management Service, a bureau of the 
Department of the Treasury.
    HHS means the Department of Health and Human Services, Office of 
Child Support Enforcement.
    IRS means the Internal Revenue Service, a bureau of the Department 
of the Treasury.
    Past-due support means the amount of support, determined under a 
court order, or an order of an administrative process established under 
State law, for support and maintenance of a child, or of a child and the 
parent with whom the child is living, which has not been paid, as 
defined in 42 U.S.C. 664(c).
    Qualified child means a child:
    (i) Who is a minor, or
    (ii) Who, while a minor, was determined to be disabled under 
subchapters II or XVI, Chapter 7, Title 42, United States Code, and for 
whom an order of support is in force.
    State means the several States of the United States. The term 
``State'' also includes the District of Columbia, American Samoa, Guam, 
the United States Virgin Islands, the Commonwealth of the Northern 
Mariana Islands, and the Commonwealth of Puerto Rico.
    Tax refund offset means withholding or reducing a tax refund payment 
by an amount necessary to satisfy a debt owed by the payee(s) of a tax 
refund payment.
    Tax refund payment means any overpayment of Federal taxes to be 
refunded to the person making the overpayment after the IRS makes the 
appropriate credits as provided in 26 U.S.C. 6402(a) and 26 CFR 6402-
3(a)(6)(i) for any liabilities for any Federal tax on the part of the 
person who made the overpayment.
    (b) General rule. (1) Past-due support will be collected by tax 
refund offset upon notification to FMS in accordance with 26 U.S.C. 
6402(c), 42 U.S.C. 664 and this section. Collection by offset under 26 
U.S.C. 6402(c) is a collection procedure separate from the collection 
procedures provided by 26 U.S.C. 6305 and 26 CFR 301.6305-1, relating to 
the assessment and collection of certain child and spousal support 
liabilities. Tax refund offset may be used separately or in conjunction 
with the collection procedures provided in 26 U.S.C. 6305, as well as 
other collection procedures.
    (2) FMS will compare tax refund payment records, as certified by the 
IRS, with records of debts submitted to FMS. A match will occur when the 
taxpayer identifying number (as that term is used in 26 U.S.C. 6109) and 
name of a payment certification record are the same as the taxpayer 
identifying number and name of a delinquent debtor record. When a match 
occurs and all other requirements for tax refund offset have been met, 
FMS will reduce the amount of any tax refund payment payable to a debtor 
by the amount of any past-due support debt owed by the debtor. Any 
amounts not offset will be paid to the payee(s) listed in the payment 
certification record.
    (c) Notification of past-due support--(1) Past-due support eligible 
for tax refund offset. Past-due support qualifies for tax refund offset 
if:
    (i)(A) There has been an assignment of the support obligation to a 
State and the amount of past-due support is not less than $25.00, or 
such higher amount as HHS rules may allow, whichever is greater; or
    (B) A State agency is providing support collection services under 42 
U.S.C. 654(4), the amount of past-due support is not less than $500.00, 
and the past-due support is owed to or on behalf of a qualified child 
(or a qualified child and the parent with whom the child is living if 
the same support order includes support for the child and the parent); 
and
    (ii) A notification of liability for past-due support has been 
received by FMS as prescribed by paragraphs (c)(2) or (c)(3) of this 
section.

[[Page 109]]

    (2) Notification of liability for past-due support and transmission 
of information to FMS by HHS. States notifying HHS of past-due support 
shall do so in the manner and format prescribed by HHS. The notification 
of liability shall be accompanied by a certification that the State has 
complied with the requirements contained in paragraph (c)(4) of this 
section and with any requirements applicable to the offset of Federal 
tax refunds to collect past-due support imposed by State law or 
procedures. HHS shall consolidate and transmit to FMS the information 
contained in the notifications of liability for past-due support 
submitted by the States provided that the State has certified that the 
requirements of paragraph (c)(4) of this section have been met.
    (3) Notification of liability for past-due support transmitted 
directly to FMS by States. States must notify HHS of past-due support in 
accordance with the provisions of paragraph (c)(2) of this section 
unless HHS rules authorize notification to FMS directly. If authorized 
by HHS rules, States may notify FMS directly of past-due support. States 
notifying FMS directly of past-due support shall do so in the manner and 
format prescribed by FMS. The notification of liability shall be 
accompanied by a certification that the State has complied with the 
requirements contained in paragraph (c)(4) of this section and with any 
requirements applicable to the offset of Federal tax refunds to collect 
past-due support imposed by State law or procedures. FMS may reject a 
notification of past-due support which does not comply with the 
requirements of this section. Upon notification of the rejection and the 
reason for rejection, the State may resubmit a corrected notification.
    (4) Advance notification to debtor of intent to collect by tax 
refund offset. The State, or HHS if the State requests and HHS agrees, 
is required to provide a written notification to the debtor, pursuant to 
the provisions of 42 U.S.C. 664(a)(3) and 45 CFR 303.72(e), informing 
the debtor that the State intends to refer the debt for collection by 
tax refund offset. The notice also shall:
    (i) Instruct the debtor of the steps which may be taken to contest 
the State's determination that past-due support is owed or the amount of 
the past-due support;
    (ii) Advise any non-debtor who may file a joint tax return with the 
debtor of the steps which a non-debtor spouse may take in order to 
secure his or her proper share of the tax refund; and
    (iii) In cases when a debt is being enforced by more than one State, 
advise the debtor of his or her opportunities to request a review with 
the State enforcing collection or the State issuing the support order as 
prescribed by the provisions of 45 CFR 303.72(g).
    (5) Correcting and updating notification. The State shall, in the 
manner and in the time frames provided by FMS or HHS, notify FMS or HHS 
of any deletion or net decrease in the amount of past-due support 
referred to FMS, or HHS as the case may be, for collection by tax refund 
offset. The State may notify FMS or HHS of any increases in the amount 
of the debt referred to FMS for collection by tax refund offset provided 
that the State has complied with the requirements of paragraph (c)(4) of 
this section with regard to those debts.
    (6) Collection of past-due support enforced by multiple States. When 
a State has knowledge that the debt is being enforced by more than one 
State, the State notifying FMS, or HHS as the case may be, of the debt 
shall inform any such other State involved in enforcing the debt when it 
receives the offset amount.
    (d) Priorities for offset. (1) As provided in 26 U.S.C. 6402 as 
amended, a tax refund payment shall be reduced in the following order of 
priority:
    (i) First by the amount of any past-due support assigned to a State 
(welfare cases) which is to be offset under 26 U.S.C. 6402(c), 42 U.S.C. 
664 and this section;
    (ii) Second, by the amount of any past-due, legally enforceable debt 
owed to a Federal agency which is to be offset under 26 U.S.C. 6402(d), 
31 U.S.C. 3720A and Sec. 285.2 of this part;
    (iii) Third, by the amount of any qualifying past-due support not 
assigned to a State (non-welfare cases) which is to be offset under 26 
U.S.C. 6402(c), 42 U.S.C. 664 and this section; and

[[Page 110]]

    (iv) Fourth, by the amount of any past-due, legally enforceable 
State income tax obligation which is to be offset under 26 U.S.C. 
6402(e).
    (2) Reduction of the tax refund payment pursuant to 26 U.S.C. 
6402(a), (c), (d), and (e) shall occur prior to crediting the 
overpayment to any future liability for an internal revenue tax. Any 
amount remaining after tax refund offset under 26 U.S.C. 6402(a), (c), 
(d), and (e) shall be refunded to the taxpayer, or applied to estimated 
tax, if elected by the taxpayer pursuant to IRS regulations.
    (e) Post-offset notice. (1)(i) FMS shall notify the debtor in 
writing of:
    (A) The amount and date of the offset to satisfy past-due support;
    (B) The State to which this amount has been paid or credited; and
    (C) A contact point within the State that will handle concerns or 
questions regarding the offset.
    (ii) The notice in paragraph (e)(1)(i) of this section also will 
advise any non-debtor who may have filed a joint tax return with the 
debtor of the steps which a non-debtor spouse may take in order to 
secure his or her proper share of the tax refund. See paragraph (f) of 
this section.
    (2) FMS will advise HHS of the names, mailing addresses, and 
identifying numbers of the debtors from whom amounts of past-due support 
were collected, of the amounts collected from each debtor through tax 
refund offset, the names of any non-debtor spouses who may have filed a 
joint return with the debtor, and of the State on whose behalf each 
collection was made. Alternatively, FMS will provide such information to 
each State that refers debts directly to FMS. FMS will inform HHS and 
each State that the payment source is a tax refund payment.
    (3) At least weekly, FMS will notify the IRS of the names and 
taxpayer identifying numbers of the debtors from whom amounts owed for 
past-due support were collected from tax refund offsets and the amounts 
collected from each debtor.
    (4) At such time and in such manner as FMS and HHS agree, but no 
less than annually, FMS will advise HHS of the States which have 
furnished notices of past-due support, the number of cases in each State 
with respect to which such notices have been furnished, the amount of 
past-due support sought to be collected by each State, and the amount of 
such tax refund offset collections actually made in the case of each 
State. As FMS and HHS may agree, FMS may provide additional offset-
related information about States which have furnished notices of past-
due support.
    (f) Offset made with regard to a tax refund payment based upon joint 
return. If the person filing a joint return with a debtor owing the 
past-due support takes appropriate action to secure his or her proper 
share of a tax refund from which an offset was made, the IRS will pay 
the person his or her share of the refund and request that FMS deduct 
that amount from amounts payable to HHS or the State, as the case may 
be. FMS and HHS, or the appropriate State, will adjust their debtor 
records accordingly.
    (g) Disposition of amounts collected. FMS will transmit amounts 
collected for debts, less fees charged under paragraph (h) of this 
section, to HHS or to the appropriate State. If FMS learns that an 
erroneous offset payment is made to HHS or any State, FMS will notify 
HHS or the appropriate State that an erroneous offset payment has been 
made. FMS may deduct the amount of the erroneous offset payment from 
amounts payable to HHS or the State, as the case may be. Alternatively, 
upon FMS' request, the State shall return promptly to the affected 
taxpayer or FMS an amount equal to the amount of the erroneous payment 
(unless the State previously has paid such amounts, or any portion of 
such amounts, to the affected taxpayer). HHS and States shall notify FMS 
any time HHS or a State returns an erroneous offset payment to an 
affected taxpayer. FMS and HHS, or the appropriate State, will adjust 
their debtor records accordingly.
    (h) Fees. The State will pay a fee to FMS for the full cost of 
administering the tax refund offset program. The fee (not to exceed $25 
per case submitted) will be established annually in such amount as FMS 
and HHS agree to be sufficient to reimburse FMS for the

[[Page 111]]

full cost of the offset procedure. FMS will deduct the fees from amounts 
collected prior to disposition and transmit a portion of the fees 
deducted to reimburse the IRS for its share of the cost of administering 
the tax refund offset program. Fees will be charged only for actual tax 
refund offsets completed.
    (i) Review of tax refund offsets. In accordance with 26 U.S.C. 
6402(f), any reduction of a taxpayer's refund made pursuant to 26 U.S.C. 
6402(c), (d), or (e) shall not be subject to review by any court of the 
United States or by the Secretary of the Treasury, FMS or IRS in an 
administrative proceeding. No action brought against the United States 
to recover the amount of this reduction shall be considered to be a suit 
for refund of tax.
    (j) Access to and use of confidential tax information. Access to and 
use of confidential tax information in connection with the tax refund 
offset program is permitted to the extent necessary in establishing 
appropriate agency records, locating any person with respect to whom a 
reduction under 26 U.S.C. 6402(c) is sought for purposes of collecting 
the debt, and in the defense of any litigation or administrative 
procedure ensuing from a reduction made under section 6402(c).
    (k) Effective date. This section applies to tax refund payments 
payable under 26 U.S.C. 6402 after January 1, 1999.

[63 FR 72094, Dec. 30, 1998]



Sec. 285.4  Offset of Federal benefit payments to collect past-due, legally enforceable nontax debt.

    (a) Scope. (1) This section sets forth special rules applicable to 
the offset of Federal benefit payments payable to an individual under 
the Social Security Act (other than Supplemental Security Income (SSI) 
payments), part B of the Black Lung Benefits Act, or any law 
administered by the Railroad Retirement Board (other than payments that 
such Board determines to be tier 2 benefits) to collect delinquent 
nontax debt owed to the United States.
    (2) As used in this section, benefit payments ``due to'' an 
individual, ``payable to'' an individual, and/or benefit payments 
``received by'' an individual, refer to those benefit payments expected 
to be paid to an individual before any amounts are offset to satisfy the 
payee's delinquent debt owed to the United States. Nothing in these 
phrases, similar phrases, or this section is intended to imply or confer 
any new or additional rights or benefits on an individual with respect 
to his or her entitlement to benefit payments. The Financial Management 
Service (FMS), the Social Security Administration, the Railroad 
Retirement Board, and other payment agencies are not liable for the 
amount offset from an individual's benefit payment on the basis that the 
underlying obligation, represented by the payment before the offset was 
taken, was not satisfied. See 31 U.S.C. 3716(c)(2)(A).
    (b) Definitions. As used in this section:
    Administrative offset or offset means withholding funds payable by 
the United States (including funds payable by the United States on 
behalf of a State government) to, or held by the United States for, a 
person to satisfy a debt.
    Agency or Federal agency means a department, agency, court, court 
administrative office, or instrumentality in the executive, judicial, or 
legislative branch of the Federal Government, including government 
corporations.
    Covered benefit payment means a Federal benefit payment payable to 
an individual under the Social Security Act (other than SSI payments), 
part B of the Black Lung Benefits Act, or any law administered by the 
Railroad Retirement Board (other than payments that such Board 
determines to be tier 2 benefits). The amount of the covered benefit 
payment payable to a debtor for purposes of this section will be the 
amount after reduction or deduction required under the laws authorizing 
the program. Reductions to recover benefit overpayments are excluded 
from the covered benefit payment when calculating amounts available for 
offset.
    Creditor agency means a Federal agency owed a debt that seeks to 
collect that debt through administrative offset.
    Debt or claim means an amount of money, funds, or property which has 
been determined by an agency official to be due the United States from 
any

[[Page 112]]

person, organization, or entity except another Federal agency. Debt or 
claim does not include a debt or claim arising under the Internal 
Revenue Code of 1986 or the tariff laws of the United States.
    Debtor means a person who owes a debt. The term ``person'' includes 
any individual, organization or entity, except another Federal agency.
    Disbursing official means an official who has authority to disburse 
public money pursuant to 31 U.S.C. 3321 or another law, including an 
official of the Department of the Treasury, the Department of Defense, 
the United States Postal Service, or any other government corporation, 
or any official of the United States designated by the Secretary of the 
Treasury to disburse public money.
    FMS means the Financial Management Service, a bureau of the 
Department of the Treasury.
    Monthly covered benefit payment means a covered benefit payment 
payable to a payee on a recurring basis at monthly intervals that is not 
expressly limited in duration, at the time the first payment is made, to 
a period of less than 12 months.
    Payee means a person who is due a payment from a disbursing 
official. For purposes of this section, a ``payee'' is a person who is 
entitled to the benefit of all or part of a payment from a disbursing 
official.
    Taxpayer identifying number means the identifying number described 
under section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 
6109). For an individual, the taxpayer identifying number generally is 
the individual's social security number.
    (c) Administrative offset, generally. Disbursing officials shall 
offset payments to satisfy, in whole or in part, debts owed by the 
payee. Disbursing officials shall compare payment records with records 
of debts submitted to FMS for collection by administrative offset. A 
match will occur when the taxpayer identifying number and name of the 
payee (as defined in paragraph (b) of this section) on a payment record 
are the same as the taxpayer identifying number and name of the debtor 
on a debt record. When a match occurs and all other requirements for 
offset have been met, the disbursing official shall offset the payment 
to satisfy, in whole or in part, the debt. Any amounts not offset shall 
be paid to the payee. Covered benefit payments, i.e., payments made to 
individuals under the Social Security Act (other than Supplemental 
Security Income (SSI) payments), part B of the Black Lung Benefits Act, 
or any law administered by the Railroad Retirement Board (RRB) (other 
than tier 2 benefit payments) are among the types of payments which may 
be offset to collect debts owed to the United States. Offset of covered 
benefit payments are subject to the limitations contained in this 
section. Offsets of covered benefit payments will occur only if the name 
and taxpayer identifying number of the person who is entitled to the 
benefit of all or a part of the payment matches the name and taxpayer 
identifying number of the debtor.
    (d) Submission of debts to FMS for collection by administrative 
offset. Creditor agencies must notify FMS of all past-due, legally 
enforceable debt delinquent for more than 180 days for purposes of 
collection by administrative offset. Creditor agencies may notify FMS of 
all debt delinquent for less than 180 days for purposes of collection by 
administrative offset. Prior to such notification, creditor agencies 
must certify to FMS that the debt is past-due, legally enforceable, and 
that the creditor agency has provided the debtor with notice and an 
opportunity for a review in accordance with the provisions of 31 U.S.C. 
3716(a) and other applicable law.
    (e) Offset amount. (1) The amount offset from a monthly covered 
benefit payment shall be the lesser of:
    (i) The amount of the debt, including any interest, penalties and 
administrative costs;
    (ii) An amount equal to 15% of the monthly covered benefit payment; 
or
    (iii) The amount, if any, by which the monthly covered benefit 
payment exceeds $750.
    (2) A debtor shall not receive a refund of any amounts offset if the 
debtor's monthly covered benefit payments are reduced, suspended, 
terminated, or otherwise not received for a period of 12 months.

[[Page 113]]

    (3) Examples. (i) A debtor receives monthly Social Security benefits 
of $850. The amount offset is the lesser of $127.50 (15% of $850) or 
$100 (the amount by which $850 exceeds $750). In this example, the 
amount offset is $100 (assuming the debt is $100 or more).
    (ii) A debtor receives monthly Social Security benefits of $1250. 
The amount offset is the lesser of $187.50 (15% of $1250) or $500 (the 
amount by which $1250 exceeds $750). In this example, the amount offset 
is $187.50 (assuming the debt is $187.50 or more).
    (iii) A debtor receives monthly Social Security payments of $650. No 
amount will be offset because $650 is less than $750.
    (f) Notification of offset. (1) Before offsetting a covered benefit 
payment, the disbursing official will notify the payee in writing of the 
date offset will commence. The notice shall inform the payee of the type 
of payment that will be offset; the identity of the creditor agency 
which requested the offset; and a contact point within the creditor 
agency that will handle concerns regarding the offset.
    (2) The disbursing official conducting the offset will notify the 
payee in writing of the occurrence of the offset to satisfy, in whole or 
in part, a delinquent debt owed to the United States. The notice shall 
inform the payee of the type and amount of the payment that was offset; 
the identity of the creditor agency which requested the offset; and a 
contact point within the creditor agency that will handle concerns 
regarding the offset.
    (3) Non-receipt by the debtor of the notices described in paragraphs 
(f)(1) and (f)(2) of this section shall not impair the legality of the 
administrative offset.
    (g) Fees. A fee which FMS has determined to be sufficient to cover 
the full cost of the offset procedure, shall be deducted from each 
offset amount. Creditor agencies may add this fee to the debt if not 
otherwise prohibited by law.
    (h) Disposition of amounts collected. The disbursing official 
conducting the offset will transmit amounts collected for debts, less 
fees charged under paragraph (g) of this section, to the appropriate 
creditor agency. If an erroneous offset payment is made to a creditor 
agency, the disbursing official will notify the creditor agency that an 
erroneous offset payment has been made. The disbursing official may 
deduct the amount of the erroneous offset payment from future amounts 
payable to the creditor agency. Alternatively, upon the disbursing 
official's request, the creditor agency shall return promptly to the 
disbursing official or the affected payee an amount equal to the amount 
of the erroneous payment. The disbursing official and the creditor 
agency shall adjust the debtor records appropriately.

[63 FR 44988, Aug. 21, 1998]



Sec. 285.7  Salary offset.

    (a) Purpose and scope. (1) This section establishes procedures for 
the offset of Federal salary payments, through FMS' administrative 
offset program, to collect delinquent debts owed to the Federal 
Government. This process is known as salary offset. Rules issued by the 
Office of Personnel Management contain the requirements Federal agencies 
must follow prior to conducting salary offset and the procedures for 
requesting offsets directly from a paying agency. See 5 CFR 550.1101 
through 550.1108.
    (2) This section implements the requirement under 5 U.S.C. 
5514(a)(1) that all Federal agencies, using a process known as 
centralized salary offset computer matching, identify Federal employees 
who owe delinquent nontax debt to the United States. Centralized salary 
offset computer matching is the computerized comparison of delinquent 
debt records with records of Federal employees. The purpose of 
centralized salary offset computer matching is to identify those debtors 
whose Federal salaries should be offset to collect delinquent debts owed 
to the Federal Government.
    (3) This section specifies the delinquent debt records and Federal 
employee records that must be included in the salary offset matching 
process. For purposes of this section, delinquent debt records consist 
of the debt information submitted to the Financial Management Service 
for purposes of administrative offset as required under

[[Page 114]]

31 U.S.C. 3716(c)(6). Agencies that submit their debt to FMS for 
purposes of administrative offset are not required to submit duplicate 
information for purposes of centralized salary offset computer matching 
under 5 U.S.C. 5514 and this section.
    (4) This section establishes an interagency consortium to implement 
centralized salary offset computer matching on a government-wide basis 
as required under 5 U.S.C. 5514(a)(1). Federal employee records consist 
of records of Federal salary payments disbursed by members of the 
consortium.
    (5) The receipt of collections from salary offsets does not preclude 
a creditor agency from pursuing other debt collection remedies, 
including the offset of other Federal payments to satisfy delinquent 
nontax debt owed to the United States. A creditor agency should pursue, 
when deemed appropriate by such agency, such debt collection remedies 
separately or in conjunction with salary offset.
    (b) Definitions. For purposes of this section:
    Administrative offset means withholding funds payable by the United 
States to, or held by the United States for, a person to satisfy a debt 
owed by the payee.
    Agency means a department, agency or subagency, court, court 
administrative office, or instrumentality in the executive, judicial, or 
legislative branch of the Federal government, including government 
corporations.
    Centralized salary offset computer matching means the computerized 
comparison of Federal employee records with delinquent debt records to 
identify Federal employees who owe such debts.
    Creditor agency means any agency that is owed a debt.
    Debt means any amount of money, funds, or property that has been 
determined by an appropriate official of the Federal government to be 
owed to the United States by a person, including debt administered by a 
third party acting as an agent for the Federal Government. For purposes 
of this section, the term ``debt'' does not include debts arising under 
the Internal Revenue Code of 1986 (26 U.S.C.).
    Delinquent debt record means information about a past-due, legally 
enforceable debt, submitted by a creditor agency to FMS for purposes of 
administrative offset (including salary offset) in accordance with the 
provisions of 31 U.S.C. 3716 and applicable regulations. Debt 
information includes the amount and type of debt and the debtor's name, 
address, and taxpayer identifying number.
    Disbursing official means an officer or employee designated to 
disburse Federal salary payments. This section applies to all disbursing 
officials of Federal salary payments, including but not limited to, 
disbursing officials of the Department of the Treasury, the Department 
of Defense, the United States Postal Service, any government 
corporation, and any disbursing official of the United States designated 
by the Secretary.
    Disposable pay has the same meaning as that term is defined in 5 CFR 
550.1103.
    Federal employee means a current employee of an agency, including a 
current member of the Armed Forces or a Reserve of the Armed Forces 
(Reserves), employees of the United States Postal Service, and seasonal 
and temporary employees.
    Federal employee records means records of Federal salary payments 
that a paying agency has certified to a disbursing official for 
disbursement.
    FMS means the Financial Management Service, a bureau of the 
Department of the Treasury.
    Paying agency means the agency that employs the Federal employee who 
owes the debt and authorizes the payment of his or her current pay. A 
paying agency also includes an agency that performs payroll services on 
behalf of the employing agency.
    Salary offset means administrative offset to collect a debt owed by 
a Federal employee from the current pay account of the employee.
    Secretary means the Secretary of the Treasury or his or her 
delegate.
    Taxpayer identifying number means the identifying number described 
under section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 
6109). For an individual, the taxpayer identifying

[[Page 115]]

number is the individual's social security number.
    (c) Establishment of the consortium. As required by the provisions 
of 5 U.S.C. 5514(a)(1), by issuance of this section, the Secretary 
establishes an interagency consortium to implement centralized salary 
offset computer matching. The consortium initially includes all agencies 
that disburse Federal salary payments, including but not limited to, 
FMS, the Department of Defense, the United States Postal Service, 
government corporations, and agencies with Treasury-designated 
disbursing officials. The membership of the consortium may be changed at 
the discretion of the Secretary, and the Secretary will be responsible 
for the ongoing coordination of the activities of the consortium.
    (d) Creditor agency participation. (1) As required under 5 U.S.C. 
5514(a)(1), creditor agencies shall participate at least annually in 
centralized salary offset computer matching. To meet this requirement, 
creditor agencies shall notify FMS of all past-due, legally enforceable 
debts delinquent for more than 180 days for purposes of administrative 
offset, as required under 31 U.S.C. 3716(c)(6). Additionally, creditor 
agencies may notify FMS of past-due, legally enforceable debts 
delinquent for less than 180 days for purposes of administrative offset.
    (2) Prior to submitting debts to FMS for purposes of administrative 
offset (including salary offset) and centralized salary offset computer 
matching, Federal agencies shall prescribe regulations in accordance 
with the requirements of 31 U.S.C. 3716 (administrative offset) and 5 
U.S.C. 5514 (salary offset).
    (3) Prior to submitting a debt to FMS for purposes of collection by 
administrative offset, including salary offset, creditor agencies shall 
provide written certification to FMS that:
    (i) The debt is past-due and legally enforceable in the amount 
submitted to FMS and that the creditor agency will ensure that 
collections (other than collections through offset) are properly 
credited to the debt;
    (ii) Except in the case of a judgment debt or as otherwise allowed 
by law, the debt is referred for offset within ten years after the 
agency's right of action accrues;
    (iii) The creditor agency has complied with the provisions of 31 
U.S.C. 3716 (administrative offset) and related regulations including, 
but not limited to, the provisions requiring that the creditor agency 
provide the debtor with applicable notices and opportunities for a 
review of the debt; and
    (iv) The creditor agency has complied with the provisions of 5 
U.S.C. 5514 (salary offset) and related regulations including, but not 
limited to, the provisions requiring that the creditor agency provide 
the debtor with applicable notices and opportunities for a hearing.
    (4) FMS may waive the certification requirement set forth in 
paragraph (d)(3)(iv) of this section as a prerequisite to submitting the 
debt to FMS. If FMS waives the certification requirement, before an 
offset occurs, the creditor agency shall provide the Federal employee 
with the notices and opportunities for a hearing as required by 5 U.S.C. 
5514 and applicable regulations, and shall certify to FMS that the 
requirements of 5 U.S.C. 5514 and applicable regulations have been met.
    (5) The creditor agency shall notify FMS immediately of any payments 
credited by the creditor agency to the debtor's account, other than 
credits for amounts collected by offset, after submission of the debt to 
FMS. The creditor agency also shall notify FMS immediately of any change 
in the status of the legal enforceability of the debt, for example, if 
the creditor agency receives notice that the debtor has filed for 
bankruptcy protection.
    (e) Centralized salary offset computer match. (1) Delinquent debt 
records will be compared with Federal employee records maintained by 
members of the consortium or paying agencies. The records will be 
compared to identify Federal employees who owe delinquent debts for 
purposes of collecting the debt by administrative offset. A match will 
occur when the taxpayer identifying number and name of a Federal 
employee are the same as the taxpayer identifying number and name of a 
debtor.
    (2) As authorized by the provisions of 31 U.S.C. 3716(f), FMS, under 
a delegation of authority from the Secretary,

[[Page 116]]

has waived certain requirements of the Computer Matching and Privacy 
Protection Act of 1988, 5 U.S.C. 552a, as amended, for administrative 
offset, including salary offset, upon written certification by the head 
of the creditor agency that the requirements of 31 U.S.C. 3716(a) have 
been met. Specifically, FMS has waived the requirements for a computer 
matching agreement contained in 5 U.S.C. 552a(o) and for post-match 
notice and verification contained in 5 U.S.C. 552a(p). The creditor 
agency will provide certification in accordance with the provisions of 
paragraph (d)(3)(iii) of this section.
    (f) Salary offset. When a match occurs and all other requirements 
for offset have been met, as required by the provisions of 31 U.S.C. 
3716(c) the disbursing official shall offset the Federal employee's 
salary payment to satisfy, in whole or part, the debt owed by the 
employee. Alternatively, the paying agency, on behalf of the disbursing 
official, may deduct the amount of the offset from an employee's 
disposable pay before the employee's salary payment is certified to a 
disbursing official for disbursement.
    (g) Offset amount. (1) The amount offset from a salary payment under 
this section shall be the lesser of:
    (i) The amount of the debt, including any interest, penalties and 
administrative costs; or
    (ii) An amount up to 15% of the debtor's disposable pay.
    (2) Alternatively, the amount offset may be an amount agreed upon, 
in writing, by the debtor and the creditor agency.
    (3) Offsets will continue until the debt, including any interest, 
penalties, and costs, is paid in full or otherwise resolved to the 
satisfaction of the creditor agency.
    (h) Priorities. (1) A levy pursuant to the Internal Revenue Code of 
1986 shall take precedence over other deductions under this section.
    (2) When a salary payment may be reduced to collect more than one 
debt, amounts offset under this section will be applied to a debt only 
after amounts offset have been applied to satisfy past due child support 
debts assigned to a State pursuant to 402(a)(26) or section 471(a)(17) 
of the Social Security Act.
    (i) Notice. (1) Before offsetting a salary payment, the disbursing 
official, or the paying agency on behalf of the disbursing official, 
shall notify the Federal employee in writing of the date deductions from 
salary will commence and of the amount of such deductions.
    (2)(i) When an offset occurs under this section, the disbursing 
official, or the paying agency on behalf of the disbursing official, 
shall notify the Federal employee in writing that an offset has occurred 
including:
    (A) A description of the payment and the amount of offset taken;
    (B) The identity of the creditor agency requesting the offset; and,
    (C) A contact point within the creditor agency that will handle 
concerns regarding the offset.
    (ii) The information described in paragraphs (i)(2)(i)(B) and 
(i)(2)(i)(C) of this section does not need to be provided to the Federal 
employee when the offset occurs if such information was included in a 
prior notice from the disbursing official or paying agency.
    (3) The disbursing official will advise each creditor agency of the 
names, mailing addresses, and taxpayer identifying numbers of the 
debtors from whom amounts of past-due, legally enforceable debt were 
collected and of the amounts collected from each debtor for that agency. 
The disbursing official will not advise the creditor agency of the 
source of payment from which such amounts were collected.
    (j) Fees. Agencies that perform centralized salary offset computer 
matching services may charge a fee sufficient to cover the full cost for 
such services. In addition, FMS, or a paying agency acting on behalf of 
FMS, may charge a fee sufficient to cover the full cost of implementing 
the administrative offset program. FMS may deduct the fees from amounts 
collected by offset or may bill the creditor agencies. Fees charged for 
offset shall be based on actual administrative offsets completed.
    (k) Disposition of amounts collected. The disbursing official 
conducting the offset will transmit amounts collected for debts, less 
fees charged under paragraph (j) of this section, to the appropriate 
creditor agency. If an erroneous offset payment is made to a creditor

[[Page 117]]

agency, the disbursing official will notify the creditor agency that an 
erroneous offset payment has been made. The disbursing official may 
deduct the amount of the erroneous offset payment from future amounts 
payable to the creditor agency. Alternatively, upon the disbursing 
official's request, the creditor agency shall return promptly to the 
disbursing official or the affected payee an amount equal to the amount 
of the erroneous payment (without regard to whether any other amounts 
payable to such agency have been paid). The disbursing official and the 
creditor agency shall adjust the debtor records appropriately.

[63 FR 23357, Apr. 28, 1998]



Sec. 285.8  Offset of tax refund payments to collect state income tax obligations.

    (a) Definitions. For purposes of this section:
    Debt as used in this section means past-due, legally enforceable 
State income tax obligation unless otherwise indicated.
    Debtor as used in this section means a person who owes a state 
income tax obligation.
    FMS means the Financial Management Service, a bureau of the 
Department of the Treasury.
    IRS means the Internal Revenue Service, a bureau of the Department 
of the Treasury.
    Past-due, legally enforceable State income tax obligation means a 
debt which resulted from:
    (1) A judgment rendered by a court of competent jurisdiction which 
has determined an amount of State income tax to be due,
    (2) A determination after an administrative hearing which has 
determined an amount of state income tax to be due and which is no 
longer subject to judicial review, or
    (3) A State income tax assessment (including self-assessments) which 
has become final in accordance with State law but not collected and 
which has not been delinquent for more than 10 years.
    State means the several States of the United States. The term 
``State'' also includes the District of Columbia, American Samoa, Guam, 
the United States Virgin Islands, the Commonwealth of the Northern 
Mariana Islands, and the Commonwealth of Puerto Rico.
    State income tax obligation means State income tax obligations as 
determined under State law. For purposes of this section, State income 
tax obligation includes any local income tax administered by the chief 
tax administration agency of the State.
    Tax refund offset means withholding or reducing a tax refund 
overpayment by an amount necessary to satisfy a debt owed by the 
payee(s).
    Tax refund payment means any overpayment of Federal taxes to be 
refunded to the person making the overpayment after the IRS makes the 
appropriate credits as provided in 26 U.S.C. 6402(a) and 26 CFR 6402-
3(a)(6)(i) for any liabilities for any Federal tax on the part of the 
person who made the overpayment.
    (b) General rule. (1) FMS will collect past-due, legally enforceable 
State income tax obligations by tax refund offset upon notification to 
FMS of a past-due, legally enforceable State income tax obligation in 
accordance with 26 U.S.C. 6402(e) and this section.
    (2) FMS will compare tax refund payment records, as certified by the 
IRS, with records of debts submitted to FMS. A match will occur when the 
taxpayer identifying number (as that term is used in 26 U.S.C. 6109) and 
name on a payment certification record are the same as the taxpayer 
identifying number and name on a delinquent debtor record. When a match 
occurs and all other requirements for tax refund offset have been met, 
FMS will reduce the amount of any tax refund payment payable to a debtor 
by the amount of any past-due, legally enforceable State income tax 
obligation owed by the debtor. Any amounts not offset will be paid to 
the payee(s) listed in the payment certification record.
    (3) FMS only will offset a tax refund payment if the address shown 
on the Federal tax return for the taxable year of the overpayment is an 
address within the State seeking the offset.
    (c) Notification of past-due, legally enforceable State income tax 
obligations. (1)

[[Page 118]]

Notification to FMS of past-due, legally enforceable State income tax 
obligations. States notifying FMS of state income tax obligations shall 
do so in the manner and format prescribed by FMS. The notification of 
liability must be accompanied by a certification that the debt is past-
due and legally enforceable and that the State has complied with the 
requirements contained in paragraph (c)(3) of this section and with any 
requirements applicable to the offset of Federal tax refunds to collect 
past-due, legally enforceable State income tax obligations imposed by 
State law or procedures. The certification must specifically state that 
none of the debts submitted for collection by offset are debts owed by 
an individual who has claimed immunity from state taxation by reason of 
being an enrolled member of an Indian tribe who lives on a reservation 
and derives all of his or her income from that reservation unless such 
claim has been adjudicated de novo on its merits in accordance with 
paragraph (c)(3). FMS may reject a notification of past-due, legally 
enforceable State income tax obligations which do not comply with the 
requirements of this section. Upon notification of the rejection and the 
reason for rejection, the State may resubmit a corrected notification.
    (2) Minimum amount of past-due, legally enforceable State income tax 
obligations that may be submitted. FMS only will accept notification of 
past-due, legally enforceable State income tax obligations of $25 or 
more or such higher amounts as determined by FMS. States will be 
notified annually of any changes in the minimum debt amount.
    (3)(i) Advance notification to the debtor of the State's intent to 
collect by Federal tax refund offset. The State is required to provide a 
written notification to the debtor by certified mail, return receipt 
requested, informing the debtor that the State intends to refer the debt 
for collection by tax refund offset. The notice must also give the 
debtor at least 60 days to present evidence, in accordance with 
procedures established by the State, that all or part of the debt is not 
past-due or not legally enforceable.
    (ii) Determination. The State must, in accordance with procedures 
established by the State, consider any evidence presented by a debtor in 
response to the notice described in paragraph (c)(3)(i) of this section 
and determine whether an amount of such debt is past-due and legally 
enforceable. In those cases where a debtor claims that he or she is 
immune from State taxation by reason of being an enrolled member of an 
Indian tribe who lives on a reservation and derives all of his or her 
income from that reservation, State procedures shall include 
consideration of such claims de novo on the merits unless such claims 
have been previously adjudicated by a court of competent jurisdiction. 
States shall, upon request from the Secretary of the Treasury, make such 
procedures available to the Secretary of the Treasury for review.
    (iii) Reasonable efforts. Prior to submitting a debt to FMS for 
collection by tax refund offset the State must make reasonable efforts 
to collect the debt. Reasonable efforts include making written demand on 
the debtor for payment and complying with any other prerequisites to 
offset established by the State.
    (4) Correcting and updating notification. The State shall, in the 
manner and in the time frames provided by FMS, notify FMS of any 
deletion or decrease in the amount of past-due, legally enforceable 
State income tax obligation referred to FMS for collection by tax refund 
offset. The State may notify FMS of any increases in the amount of the 
debt referred to FMS for collection by tax refund offset provided that 
the State has complied with the requirements of paragraph (c)(3) of this 
section with regard to those debts.
    (d) Priorities for offset. (1) As provided in 26 U.S.C. 6402, a tax 
refund payment shall be reduced first by the amount of any past-due 
support assigned to a State; second, by the amount of any past-due, 
legally enforceable debt owed to a Federal agency; third, by the amount 
of any qualifying past-due support not assigned to a State and fourth, 
by any past-due, legally enforceable State income tax obligation.
    (2) Reduction of the tax refund payment pursuant to 26 U.S.C. 
6402(a), (c), (d) and (e) shall occur prior to crediting

[[Page 119]]

the overpayment to any future liability for an internal revenue tax. Any 
amount remaining after tax refund offset under 26 U.S.C. 6402(a), (c), 
(d) and (e) shall be refunded to the taxpayer, or applied to estimated 
tax, if elected by the taxpayer pursuant to IRS regulations.
    (3) If FMS receives notice from a State of more than one debt 
subject to this section that is owed by a debtor to the State, any 
overpayment by the debtor shall be applied against such debts in the 
order in which such debts accrued.
    (e) Post-offset notice. (1) When an offset occurs, FMS shall notify 
the debtor in writing of:
    (i) The amount and date of the offset and that the purpose of the 
offset was to satisfy a past-due, legally enforceable State income tax 
obligation;
    (ii) The State to which this amount has been paid or credited; and
    (iii) A contact point within the State that will handle concerns or 
questions regarding the offset.
    (2) The notice in paragraph (e)(1) of this section also will advise 
any non-debtor spouse who may have filed a joint return with the debtor 
of the steps which the non-debtor spouse may take in order to secure his 
or her proper share of the tax refund. See paragraph (f) of this 
section.
    (3) FMS will advise States of the names, mailing addresses, and 
taxpayer identifying numbers of the debtors from whom amounts of state 
income tax obligations were collected, and of the amounts collected from 
each debtor through tax refund offset.
    (4) At least weekly, FMS will notify the IRS of the names and 
taxpayer identifying numbers of the debtors from whom amounts owed for 
past-due, legally enforceable State income tax obligations were 
collected from tax refund offsets and the amounts collected from each 
debtor.
    (f) Offset made with regard to a tax refund payment based upon joint 
return. If the person filing a joint return with a debtor owing the 
past-due, legally enforceable State income tax obligation takes 
appropriate action to secure his or her proper share of a tax refund 
from which an offset was made, the IRS will pay the person his or her 
share of the refund and request that FMS deduct that amount from future 
amounts payable to the State or that FMS otherwise obtain the funds back 
from the State. FMS, or the appropriate State, will adjust their debtor 
records accordingly.
    (g) Disposition of amounts collected. FMS will transmit amounts 
collected for debts, less fees charged under paragraph (h) of this 
section, to the appropriate State. If FMS learns that an erroneous 
offset payment is made to any State, FMS will notify the appropriate 
State that an erroneous offset payment has been made. FMS may deduct the 
amount of the erroneous offset payment from future amounts payable to 
the State. Alternatively, upon FMS' request, the State shall return 
promptly to the affected taxpayer or FMS an amount equal to the amount 
of the erroneous payment (unless the State previously has paid such 
amounts, or any portion of such amounts, to the affected taxpayer). 
States shall notify FMS any time a State returns an erroneous offset 
payment to an affected taxpayer. FMS, or the appropriate State, will 
adjust their debtor records accordingly.
    (h) Fees. The State will pay a fee to FMS to cover the full cost of 
offsets taken. The fee will be established annually in such amount as 
FMS determines to be sufficient to reimburse FMS for the full cost of 
the offset procedure. FMS will deduct the fees from amounts collected 
prior to disposition and transmit a portion of the fees deducted to 
reimburse the IRS for its share of the cost of administering the tax 
refund offset program for purposes of collecting past-due, legally 
enforceable State income tax obligations reported to FMS by the States. 
Fees will be charged only for actual tax refund offsets completed.
    (i) Review of tax refund offsets. In accordance with 26 U.S.C. 
6402(f), any reduction of a taxpayer's refund made pursuant to 26 U.S.C. 
6402(e) shall not be subject to review by any court of the United States 
or by the Secretary of the Treasury, FMS or IRS in an administrative 
proceeding. No action brought against the United States to recover the 
amount of this reduction

[[Page 120]]

shall be considered to be a suit for refund of tax. This subsection does 
not preclude any legal, equitable, or administrative action against the 
State to which the amount of such reduction was paid.
    (j) Access to and use of confidential tax information. Access to and 
use of confidential tax information in connection with the tax refund 
offset program is permitted to the extent necessary in establishing 
appropriate agency records, locating any person with respect to whom a 
reduction under 26 U.S.C. 6402(e) is sought for purposes of collecting 
the debt, and in the defense of any litigation or administrative 
procedure ensuing from a reduction made under section 6402(e).
    (k) Effective date. This section applies to tax refund payments 
payable under 26 U.S.C. 6402 beginning January 1, 2000.

[64 FR 71231, Dec. 20, 1999]



                Subpart B--Authorities Other Than Offset



Sec. 285.11  Administrative wage garnishment.

    (a) Purpose. This section provides procedures for Federal agencies 
to collect money from a debtor's disposable pay by means of 
administrative wage garnishment to satisfy delinquent nontax debt owed 
to the United States.
    (b) Scope. (1) This section applies to any Federal agency that 
administers a program that gives rise to a delinquent nontax debt owed 
to the United States and to any agency that pursues recovery of such 
debt.
    (2) This section shall apply notwithstanding any provision of State 
law.
    (3) Nothing in this section precludes the compromise of a debt or 
the suspension or termination of collection action in accordance with 
applicable law. See, for example, the Federal Claims Collection 
Standards (FCCS), 31 CFR parts 900-904.
    (4) The receipt of payments pursuant to this section does not 
preclude a Federal agency from pursuing other debt collection remedies, 
including the offset of Federal payments to satisfy delinquent nontax 
debt owed to the United States. A Federal agency may pursue such debt 
collection remedies separately or in conjunction with administrative 
wage garnishment.
    (5) This section does not apply to the collection of delinquent 
nontax debt owed to the United States from the wages of Federal 
employees from their Federal employment. Federal pay is subject to the 
Federal salary offset procedures set forth in 5 U.S.C. 5514 and other 
applicable laws.
    (6) Nothing in this section requires agencies to duplicate notices 
or administrative proceedings required by contract or other laws or 
regulations.
    (c) Definitions. As used in this section the following definitions 
shall apply:
    Agency means a department, agency, court, court administrative 
office, or instrumentality in the executive, judicial, or legislative 
branch of the Federal Government, including government corporations. For 
purposes of this section, agency means either the agency that 
administers the program that gave rise to the debt or the agency that 
pursues recovery of the debt.
    Business day means Monday through Friday. For purposes of 
computation, the last day of the period will be included unless it is a 
Federal legal holiday.
    Day means calendar day. For purposes of computation, the last day of 
the period will be included unless it is a Saturday, a Sunday, or a 
Federal legal holiday.
    Debt or claim means any amount of money, funds or property that has 
been determined by an appropriate official of the Federal Government to 
be owed to the United States by an individual, including debt 
administered by a third party as an agent for the Federal Government.
    Debtor means an individual who owes a delinquent nontax debt to the 
United States.
    Delinquent nontax debt means any nontax debt that has not been paid 
by the date specified in the agency's initial written demand for 
payment, or applicable agreement, unless other satisfactory payment 
arrangements have been made. For purposes of this section, the terms 
``debt'' and ``claim'' are synonymous and refer to delinquent nontax 
debt.

[[Page 121]]

    Disposable pay means that part of the debtor's compensation 
(including, but not limited to, salary, bonuses, commissions, and 
vacation pay) from an employer remaining after the deduction of health 
insurance premiums and any amounts required by law to be withheld. For 
purposes of this section, ``amounts required by law to be withheld'' 
include amounts for deductions such as social security taxes and 
withholding taxes, but do not include any amount withheld pursuant to a 
court order.
    Employer means a person or entity that employs the services of 
others and that pays their wages or salaries. The term employer 
includes, but is not limited to, State and local Governments, but does 
not include an agency of the Federal Government.
    Evidence of service means information retained by the agency 
indicating the nature of the document to which it pertains, the date of 
mailing of the document, and to whom the document is being sent. 
Evidence of service may be retained electronically so long as the manner 
of retention is sufficient for evidentiary purposes.
    Garnishment means the process of withholding amounts from an 
employee's disposable pay and the paying of those amounts to a creditor 
in satisfaction of a withholding order.
    Withholding order means any order for withholding or garnishment of 
pay issued by an agency, or judicial or administrative body. For 
purposes of this section, the terms ``wage garnishment order'' and 
``garnishment order'' have the same meaning as ``withholding order.''
    (d) General rule. Whenever an agency determines that a delinquent 
debt is owed by an individual, the agency may initiate proceedings 
administratively to garnish the wages of the delinquent debtor.
    (e) Notice requirements. (1) At least 30 days before the initiation 
of garnishment proceedings, the agency shall mail, by first class mail, 
to the debtor's last known address a written notice informing the debtor 
of:
    (i) The nature and amount of the debt;
    (ii) The intention of the agency to initiate proceedings to collect 
the debt through deductions from pay until the debt and all accumulated 
interest, penalties and administrative costs are paid in full; and
    (iii) An explanation of the debtor's rights, including those set 
forth in paragraph (e)(2) of this section, and the time frame within 
which the debtor may exercise his or her rights.
    (2) The debtor shall be afforded the opportunity:
    (i) To inspect and copy agency records related to the debt;
    (ii) To enter into a written repayment agreement with the agency 
under terms agreeable to the agency; and
    (iii) For a hearing in accordance with paragraph (f) of this section 
concerning the existence or the amount of the debt or the terms of the 
proposed repayment schedule under the garnishment order. However, the 
debtor is not entitled to a hearing concerning the terms of the proposed 
repayment schedule if these terms have been established by written 
agreement under paragraph (e)(2)(ii) of this section.
    (3) The agency will retain evidence of service indicating the date 
of mailing of the notice.
    (f) Hearing--(1) In general. Agencies shall prescribe regulations 
for the conduct of administrative wage garnishment hearings consistent 
with this section or shall adopt this section without change by 
reference.
    (2) Request for hearing. The agency shall provide a hearing, which 
at the agency's option may be oral or written, if the debtor submits a 
written request for a hearing concerning the existence or amount of the 
debt or the terms of the repayment schedule (for repayment schedules 
established other than by written agreement under paragraph (e)(2)(ii)) 
of this section.
    (3) Type of hearing or review. (i) For purposes of this section, 
whenever an agency is required to afford a debtor a hearing, the agency 
shall provide the debtor with a reasonable opportunity for an oral 
hearing when the agency determines that the issues in dispute cannot be 
resolved by review of the documentary evidence, for example, when the 
validity of the claim turns on the issue of credibility or veracity.
    (ii) If the agency determines that an oral hearing is appropriate, 
the time

[[Page 122]]

and location of the hearing shall be established by the agency. An oral 
hearing may, at the debtor's option, be conducted either in-person or by 
telephone conference. All travel expenses incurred by the debtor in 
connection with an in-person hearing will be borne by the debtor. All 
telephonic charges incurred during the hearing will be the 
responsibility of the agency.
    (iii) In those cases when an oral hearing is not required by this 
section, an agency shall nevertheless accord the debtor a ``paper 
hearing,'' that is, an agency will decide the issues in dispute based 
upon a review of the written record. The agency will establish a 
reasonable deadline for the submission of evidence.
    (4) Effect of timely request. Subject to paragraph (f)(13) of this 
section, if the debtor's written request is received by the agency on or 
before the 15th business day following the mailing of the notice 
described in paragraph (e)(1) of this section, the agency shall not 
issue a withholding order under paragraph (g) of this section until the 
debtor has been provided the requested hearing and a decision in 
accordance with paragraphs (f)(10) and (f)(11) of this section has been 
rendered.
    (5) Failure to timely request a hearing. If the debtor's written 
request is received by the agency after the 15th business day following 
the mailing of the notice described in paragraph (e)(1) of this section, 
the agency shall provide a hearing to the debtor. However, the agency 
will not delay issuance of a withholding order unless the agency 
determines that the delay in filing the request was caused by factors 
over which the debtor had no control, or the agency receives information 
that the agency believes justifies a delay or cancellation of the 
withholding order.
    (6) Hearing official. A hearing official may be any qualified 
individual, as determined by the head of the agency, including an 
administrative law judge.
    (7) Procedure. After the debtor requests a hearing, the hearing 
official shall notify the debtor of:
    (i) The date and time of a telephonic hearing;
    (ii) The date, time, and location of an in-person oral hearing; or
    (iii) The deadline for the submission of evidence for a written 
hearing.
    (8) Burden of proof. (i) The agency will have the burden of going 
forward to prove the existence or amount of the debt.
    (ii) Thereafter, if the debtor disputes the existence or amount of 
the debt, the debtor must present by a preponderance of the evidence 
that no debt exists or that the amount of the debt is incorrect. In 
addition, the debtor may present evidence that the terms of the 
repayment schedule are unlawful, would cause a financial hardship to the 
debtor, or that collection of the debt may not be pursued due to 
operation of law.
    (9) Record. The hearing official must maintain a summary record of 
any hearing provided under this section. A hearing is not required to be 
a formal evidentiary-type hearing, however, witnesses who testify in 
oral hearings will do so under oath or affirmation.
    (10) Date of decision. The hearing official shall issue a written 
opinion stating his or her decision, as soon as practicable, but not 
later than sixty (60) days after the date on which the request for such 
hearing was received by the agency. If an agency is unable to provide 
the debtor with a hearing and render a decision within 60 days after the 
receipt of the request for such hearing:
    (i) The agency may not issue a withholding order until the hearing 
is held and a decision rendered; or
    (ii) If the agency had previously issued a withholding order to the 
debtor's employer, the agency must suspend the withholding order 
beginning on the 61st day after the receipt of the hearing request and 
continuing until a hearing is held and a decision is rendered.
    (11) Content of decision. The written decision shall include:
    (i) A summary of the facts presented;
    (ii) The hearing official's findings, analysis and conclusions; and
    (iii) The terms of any repayment schedules, if applicable.
    (12) Final agency action. The hearing official's decision will be 
the final agency action for the purposes of judicial review under the 
Administrative Procedure Act (5 U.S.C. 701 et seq.).

[[Page 123]]

    (13) Failure to appear. In the absence of good cause shown, a debtor 
who fails to appear at a hearing scheduled pursuant to paragraph (f)(4) 
of this section will be deemed as not having timely filed a request for 
a hearing.
    (g) Wage garnishment order. (1) Unless the agency receives 
information that the agency believes justifies a delay or cancellation 
of the withholding order, the agency should send, by first class mail, a 
withholding order to the debtor's employer:
    (i) Within 30 days after the debtor fails to make a timely request 
for a hearing (i.e., within 15 business days after the mailing of the 
notice described in paragraph (e)(1) of this section), or,
    (ii) If a timely request for a hearing is made by the debtor, within 
30 days after a final decision is made by the agency to proceed with 
garnishment, or,
    (iii) As soon as reasonably possible thereafter.
    (2) The withholding order sent to the employer under paragraph 
(g)(1) of this section shall be in a form prescribed by the Secretary of 
the Treasury. The withholding order shall contain the signature of, or 
the image of the signature of, the head of the agency or his/her 
delegatee. The order shall contain only the information necessary for 
the employer to comply with the withholding order. Such information 
includes the debtor's name, address, and social security number, as well 
as instructions for withholding and information as to where payments 
should be sent.
    (3) The agency will retain evidence of service indicating the date 
of mailing of the order.
    (h) Certification by employer. Along with the withholding order, the 
agency shall send to the employer a certification in a form prescribed 
by the Secretary of the Treasury. The employer shall complete and return 
the certification to the agency within the time frame prescribed in the 
instructions to the form. The certification will address matters such as 
information about the debtor's employment status and disposable pay 
available for withholding.
    (i) Amounts withheld. (1) After receipt of the garnishment order 
issued under this section, the employer shall deduct from all disposable 
pay paid to the applicable debtor during each pay period the amount of 
garnishment described in paragraph (i)(2) of this section.
    (2)(i) Subject to the provisions of paragraphs (i)(3) and (i)(4) of 
this section, the amount of garnishment shall be the lesser of:
    (A) The amount indicated on the garnishment order up to 15% of the 
debtor's disposable pay; or
    (B) The amount set forth in 15 U.S.C. 1673(a)(2) (Restriction on 
Garnishment). The amount set forth at 15 U.S.C. 1673(a)(2) is the amount 
by which a debtor's disposable pay exceeds an amount equivalent to 
thirty times the minimum wage. See 29 CFR 870.10.
    (3) When a debtor's pay is subject to withholding orders with 
priority the following shall apply:
    (i) Unless otherwise provided by Federal law, withholding orders 
issued under this section shall be paid in the amounts set forth under 
paragraph (i)(2) of this section and shall have priority over other 
withholding orders which are served later in time. Notwithstanding the 
foregoing, withholding orders for family support shall have priority 
over withholding orders issued under this section.
    (ii) If amounts are being withheld from a debtor's pay pursuant to a 
withholding order served on an employer before a withholding order 
issued pursuant to this section, or if a withholding order for family 
support is served on an employer at any time, the amounts withheld 
pursuant to the withholding order issued under this section shall be the 
lesser of:
    (A) The amount calculated under paragraph (i)(2) of this section, or
    (B) An amount equal to 25% of the debtor's disposable pay less the 
amount(s) withheld under the withholding order(s) with priority.
    (iii) If a debtor owes more than one debt to an agency, the agency 
may issue multiple withholding orders provided that the total amount 
garnished from the debtor's pay for such orders does not exceed the 
amount set forth in paragraph (i)(2) of this section. For purposes of 
this paragraph (i)(3)(iii), the term agency refers to the agency that is 
owed the debt.

[[Page 124]]

    (4) An amount greater than that set forth in paragraphs (i)(2) and 
(i)(3) of this section may be withheld upon the written consent of 
debtor.
    (5) The employer shall promptly pay to the agency all amounts 
withheld in accordance with the withholding order issued pursuant to 
this section.
    (6) An employer shall not be required to vary its normal pay and 
disbursement cycles in order to comply with the withholding order.
    (7) Any assignment or allotment by an employee of his earnings shall 
be void to the extent it interferes with or prohibits execution of the 
withholding order issued under this section, except for any assignment 
or allotment made pursuant to a family support judgment or order.
    (8) The employer shall withhold the appropriate amount from the 
debtor's wages for each pay period until the employer receives 
notification from the agency to discontinue wage withholding. The 
garnishment order shall indicate a reasonable period of time within 
which the employer is required to commence wage withholding.
    (j) Exclusions from garnishment. The agency may not garnish the 
wages of a debtor who it knows has been involuntarily separated from 
employment until the debtor has been reemployed continuously for at 
least 12 months. The debtor has the burden of informing the agency of 
the circumstances surrounding an involuntary separation from employment.
    (k) Financial hardship. (1) A debtor whose wages are subject to a 
wage withholding order under this section, may, at any time, request a 
review by the agency of the amount garnished, based on materially 
changed circumstances such as disability, divorce, or catastrophic 
illness which result in financial hardship.
    (2) A debtor requesting a review under paragraph (k)(1) of this 
section shall submit the basis for claiming that the current amount of 
garnishment results in a financial hardship to the debtor, along with 
supporting documentation. Agencies shall consider any information 
submitted in accordance with procedures and standards established by the 
agency.
    (3) If a financial hardship is found, the agency shall downwardly 
adjust, by an amount and for a period of time agreeable to the agency, 
the amount garnished to reflect the debtor's financial condition. The 
agency will notify the employer of any adjustments to the amounts to be 
withheld.
    (l) Ending garnishment. (1) Once the agency has fully recovered the 
amounts owed by the debtor, including interest, penalties, and 
administrative costs consistent with the FCCS, the agency shall send the 
debtor's employer notification to discontinue wage withholding.
    (2) At least annually, an agency shall review its debtors' accounts 
to ensure that garnishment has been terminated for accounts that have 
been paid in full.
    (m) Actions prohibited by the employer. An employer may not 
discharge, refuse to employ, or take disciplinary action against the 
debtor due to the issuance of a withholding order under this section.
    (n) Refunds. (1) If a hearing official, at a hearing held pursuant 
to paragraph (f)(3) of this section, determines that a debt is not 
legally due and owing to the United States, the agency shall promptly 
refund any amount collected by means of administrative wage garnishment.
    (2) Unless required by Federal law or contract, refunds under this 
section shall not bear interest.
    (o) Right of action. The agency may sue any employer for any amount 
that the employer fails to withhold from wages owed and payable to an 
employee in accordance with paragraphs (g) and (i) of this section. 
However, a suit may not be filed before the termination of the 
collection action involving a particular debtor, unless earlier filing 
is necessary to avoid expiration of any applicable statute of 
limitations period. For purposes of this section, ``termination of the 
collection action'' occurs when the agency has terminated collection 
action in accordance with the FCCS or other applicable standards. In any 
event, termination of the collection action will have been deemed to 
occur if the agency has not received any payments to satisfy the debt 
from the particular debtor whose

[[Page 125]]

wages were subject to garnishment, in whole or in part, for a period of 
one (1) year.

[63 FR 25139, May 6, 1998, as amended at 64 FR 22908, Apr. 28, 1999; 66 
FR 51868, Oct. 11, 2001]



Sec. 285.12  Transfer of debts to Treasury for collection.

    (a) Definitions. For purposes of this section:
    Agency means a department, agency, court, court administrative 
office, or instrumentality in the executive, judicial, or legislative 
branch of the Federal Government, including government corporations.
    Creditor agency means any Federal agency that is owed a debt.
    Debt means any amount of money, funds or property that has been 
determined by an appropriate official of the Federal government to be 
owed to the United States by a person. As used in this section, the term 
``debt'' does not include debts arising under the Internal Revenue Code 
of 1986.
    Debt collection center means an agency or a unit or subagency within 
an agency that has been designated by the Secretary of the Treasury to 
collect debt owed to the United States. FMS is a debt collection center.
    FMS means the Financial Management Service, a bureau of the 
Department of the Treasury.
    Person means an individual, corporation, partnership, association, 
organization, State or local government, or any other type of entity 
other than a Federal agency.
    Secretary means the Secretary of the Treasury.
    (b) In general. Cross-servicing means that FMS or another debt 
collection center is taking appropriate debt collection action on behalf 
of one or more Federal agencies or a unit or subagency thereof.
    (c) Mandatory transfer of debts to FMS. (1) Except as set forth in 
paragraph (d) of this section, a creditor agency shall transfer any debt 
that is more than 180 days delinquent to FMS for debt collection 
services. For accounting and reporting purposes, the debt remains on the 
books and records of the agency which transferred the debt.
    (2) On behalf of the creditor agency, FMS will take appropriate 
action to collect or compromise the transferred debt, or to suspend or 
terminate collection action thereon, in accordance with the statutory 
and regulatory requirements and authorities applicable to the debt and 
the action. Appropriate action to collect a debt may include referral to 
another debt collection center, a private collection contractor, or the 
Department of Justice for litigation. The creditor agency shall advise 
FMS, in writing, of any specific statutory or regulatory requirements 
pertaining to their debt and will agree, in writing, to a collection 
strategy which includes parameters for entering into compromise and 
repayments agreements with debtors.
    (3)(i) A debt is considered 180 days delinquent for purposes of this 
section if it is 180 days past due and is legally enforceable. A debt is 
past-due if it has not been paid by the date specified in the agency's 
initial written demand for payment or applicable agreement or instrument 
(including a post-delinquency payment agreement) unless other 
satisfactory payment arrangements have been made. A debt is legally 
enforceable if there has been a final agency determination that the 
debt, in the amount stated, is due and there are no legal bars to 
collection action. Where, for example, a debt is the subject of a 
pending administrative review process required by statute or regulation 
and collection action during the review process is prohibited, the debt 
is not considered legally enforceable for purposes of mandatory transfer 
to FMS and is not to be transferred even if the debt is more than 180 
days past-due.
    (ii) When a final agency determination is made after an 
administrative appeal or review process, the creditor agency must 
transfer such debt to FMS, if more than 180 days delinquent, within 30 
days after the date of the final decision.
    (iii) Nothing in this section is intended to impact the date of 
delinquency of a debt for other purposes such as for purposes of 
accruing interest and penalties.
    (4) Agencies are not required to transfer to FMS debts which are 
less than $25 (including interest, penalties,

[[Page 126]]

and administrative costs), or such other amount as FMS may determine. 
Agencies may transfer debts less than $25 to FMS if the creditor agency, 
in consultation with FMS, determines that transfer is important to 
ensure compliance with the agency's policies or programs. Agencies may 
combine individual debts of less than $25 owed by the same debtor for 
purposes of meeting the $25 threshold.
    (d) Exceptions to mandatory transfer. (1) A creditor agency is not 
required to transfer a debt to FMS pursuant to paragraph (c)(1) of this 
section only during such period of time that the debt:
    (i) Is in litigation or foreclosure as described in paragraph (d)(2) 
of this section;
    (ii) Is scheduled for sale as described in paragraph (d)(3) of this 
section;
    (iii) Is at a private collection contractor if the debt has been 
referred to a private collection contractor in accordance with paragraph 
(e) of this section;
    (iv) Is at a debt collection center if the debt has been referred to 
a Treasury-designated debt collection center in accordance with 
paragraph (f) of this section;
    (v) Is being collected by internal offset as described in paragraph 
(d)(4) of this section; or
    (vi) Is covered by an exemption granted by the Secretary as 
described in paragraph (d)(5) of this section.
    (2)(i) A debt is in litigation if:
    (A) The debt has been referred to the Attorney General for 
litigation by the creditor agency; or
    (B) The debt is the subject of proceedings pending in a court of 
competent jurisdiction, including bankruptcy proceedings, whether 
initiated by the creditor agency, the debtor, or any other party.
    (ii) A debt is in foreclosure if:
    (A)(1) Collateral securing the debt is the subject of judicial 
foreclosure proceedings in a court of competent jurisdiction; or
    (2) Notice has been issued that collateral securing the debt will be 
foreclosed upon, liquidated, sold, or otherwise transferred pursuant to 
applicable law in a nonjudicial proceeding; and
    (B) The creditor agency anticipates that proceeds will be available 
from the liquidation of the collateral for application to the debt.
    (3) A debt is scheduled for sale if:
    (i) The debt will be disposed of under an asset sales program within 
one (1) year after becoming eligible for sale; or
    (ii) The debt will be disposed of under an asset sales program and a 
schedule established by the creditor agency and approved by the Director 
of the Office of Management and Budget.
    (4) A debt is being collected by internal offset if a creditor 
agency expects the debt to be collected in full within three (3) years 
from the date of delinquency through internal offset. A debt is being 
collected by internal offset if the creditor agency is withholding funds 
payable to the debtor by the creditor agency, or if the creditor agency 
has issued notice to the debtor of the creditor agency's intent to 
offset such funds.
    (5)(i) Upon the written request of the head of an agency, or as the 
Secretary may determine on his/her own initiative, the Secretary may 
exempt any class of debts from the application of the requirement 
described in paragraph (c)(1) of this section. In determining whether to 
exempt a class of debts, the Secretary will determine whether exemption 
is in the best interests of the Government after considering the 
following factors:
    (A) Whether an exemption is the best means to protect the 
government's financial interest, taking into consideration the number, 
dollar amount, age and collection rates of the debts for which exemption 
is requested;
    (B) Whether the nature of the program under which the delinquencies 
have arisen is such that the transfer of such debts would interfere with 
program goals; and
    (C) Whether an exemption would be consistent with the purposes of 
the Debt Collection Improvement Act of 1996 (DCIA), Pub. L. 104-134, 110 
Stat. 1321-358 (April 26, 1996).
    (ii) Requests for exemptions must clearly identify the class of 
debts for which an exemption is sought and must explain how application 
of the factors listed above to that class of debts warrants an 
exemption.

[[Page 127]]

    (iii) Requests for exemption must be made by the head of the agency 
requesting the exemption, the Chief Financial Officer of the agency, or 
the Deputy Chief Financial Officer of the agency. For purposes of this 
section, the head of an agency does not include the head of a 
subordinate organization within a department or agency.
    (6) In accordance with paragraph (d)(5)(i) of this section, debts 
being serviced and/or collected in accordance with applicable statutes 
and/or regulations by third parties, such as private lenders or guaranty 
agencies are exempt from the requirements in paragraph (c)(1) of this 
section.
    (e) Schedule of private collection contractors. FMS will maintain a 
schedule of private collection contractors eligible for referral of 
debts from FMS, other debt collection centers, and creditor agencies for 
collection action. An agency with debt which has not been transferred to 
FMS or referred to another debt collection center, for example, debt 
that is less than 180 days delinquent, may refer such debt to a private 
collection contractor listed on FMS' schedule of private collection 
contractors provided they do so in accordance with procedures 
established by FMS. Alternatively, an agency may refer debt that is less 
than 180 days delinquent to a private collection contractor pursuant to 
a contract between the creditor agency and the private collection 
contractor, as authorized by law.
    (f) Debt collection centers. A creditor agency may transfer debt 
that has not been transferred to FMS, such as debt less than 180 days 
delinquent, to a Treasury-designated debt collection center, with the 
consent of, and in accordance with procedures established by FMS. Debt 
collection centers will take action upon a debt in accordance with the 
statutory or regulatory requirements and other authorities that apply to 
the debt or to the particular action being taken. Debt collection 
centers may, on behalf of the creditor agency and subject to the terms 
under which the debt collection center has been designated as such by 
the Secretary, take any action to collect, compromise, suspend or 
terminate collection action on debts, in accordance with terms and 
conditions agreed upon in writing by the creditor agency and the debt 
collection center or FMS. Debt collection centers may charge fees for 
the debt collection services in accordance with the provisions of 
paragraph (j) of this section.
    (g) Administrative offset. As described in paragraph (c) of this 
section, under the DCIA, agencies are required to transfer all debts 
over 180 days delinquent to FMS for purposes of debt collection (i.e., 
cross-servicing). Agencies are also required, under the DCIA, to notify 
the Secretary of all debts over 180 days delinquent for purposes of 
administrative offset. Administrative offset is one type of collection 
tool used by FMS and Treasury-designated debt collection centers to 
collect debts transferred under this section. Thus, by transferring debt 
to FMS or to a Treasury-designated debt collection center under this 
section, Federal agencies will satisfy the requirement to notify the 
Secretary of debts for purposes of administrative offset and duplicate 
referrals are not required. A debt which is not transferred to FMS for 
purposes of debt collection, however, such as a debt which falls within 
one of the exempt categories listed in paragraph (d) of this section, 
nevertheless may be subject to the DCIA requirement of notification to 
the Secretary for purposes of administrative offset.
    (h) Voluntary referral of debts less than 180 days delinquent. A 
creditor agency may refer any debt that is less than 180 days delinquent 
to FMS or, with the consent of FMS, to a Treasury-designated debt 
collection center for debt collection services.
    (i) Certification. Before a debt may be transferred to FMS or 
another debt collection center, the head of the creditor agency or his 
or her delegatee must certify, in writing, that the debts being 
transferred are valid, legally enforceable, and that there are no legal 
bars to collection. Creditor agencies must also certify that they have 
complied with all prerequisites to a particular collection action under 
the laws, regulations or policies applicable to the agency unless the 
creditor agency has requested, and FMS has agreed,

[[Page 128]]

to do so on the creditor agency's behalf. The creditor agency shall 
notify FMS immediately of any change in the status of the legal 
enforceability of the debt, for example, if the creditor agency receives 
notice that the debtor has filed for bankruptcy protection.
    (j) Fees. FMS and other debt collection centers (as defined in 
paragraph (a) of this section) may charge fees sufficient to cover the 
full cost of providing debt collection services authorized by this 
section. Fees paid to recover amounts owed may not exceed amounts 
collected. Nothing in this rule precludes a creditor agency from 
agreeing to pay fees for debt collection services which are not based on 
amounts collected. FMS and debt collection centers are authorized to 
retain fees from amounts collected and may deposit and use such fees in 
accordance with 31 U.S.C. 3711(g). Fees charged by FMS and other debt 
collection centers may be added to the debt as an administrative cost if 
authorized under 31 U.S.C. 3717(e).

[63 FR 16356, Apr. 2, 1998, as amended at 64 FR 22908, Apr. 28, 1999]



Sec. 285.13  Barring delinquent debtors from obtaining Federal loans or loan insurance or guarantees.

    (a) Definitions. For purposes of this section:
    Agency means a department, agency, court, court administrative 
office, or instrumentality in the executive, judicial, or legislative 
branch of the Federal Government, including government corporations.
    Creditor agency means any Federal agency that is owed a debt.
    Debt means any amount of money, funds or property that has been 
determined by an appropriate official of the Federal Government to be 
owed to the United States or an agency thereof by a person, including 
debt administered by a third party as an agent for the Federal 
Government.
    Federal financial assistance or financial assistance means any 
Federal loan (other than a disaster loan), loan insurance, or loan 
guarantee.
    FMS means the Financial Management Service, a bureau of the 
Department of the Treasury.
    Nontax debt means any debt other than a debt under the Internal 
Revenue Code of 1986 (26 U.S.C. 1 et seq.).
    Person means an individual, corporation, partnership, association, 
organization, State or local government, or any other type of entity 
other than a Federal agency.
    Secretary means the Secretary of the Treasury.
    (b) Purpose and scope. (1) This section prescribes standards for 
determining whether an outstanding nontax debt owed to the Federal 
Government is in delinquent status and whether such delinquency is 
resolved for the purpose of denying Federal financial assistance to a 
debtor. In addition, this section prescribes the circumstances under 
which the Secretary may exempt a class of debts from affecting a 
debtor's loan eligibility. This section also outlines the factors an 
agency should consider when determining whether waiver of the general 
rule in paragraph (c) of this section is appropriate.
    (2) Additional guidance concerning debt collection and debt 
management is provided in ``Managing Federal Receivables'' and other FMS 
publications.
    (3) Nothing in this section requires an agency to grant Federal 
financial assistance if denial otherwise is authorized by statute, 
regulation, or agency policies and procedures. For example, if an agency 
requires borrowers to have a satisfactory credit history, the agency may 
deny financial assistance even if a delinquent debt has been resolved.
    (4) This section does not confer any new rights or benefits on 
persons seeking Federal financial assistance.
    (5) This section applies to any person owing delinquent nontax debt 
and to any agency that administers a program that grants Federal 
financial assistance.
    (c) General rule. (1) As required by the provisions of 31 U.S.C. 
3720B, a person owing an outstanding nontax debt that is in delinquent 
status shall not be eligible for Federal financial assistance. This 
eligibility requirement applies to all persons seeking Federal financial 
assistance and owing an outstanding nontax debt in delinquent status, 
including, but not limited to, guarantors. This eligibility requirement 
applies to

[[Page 129]]

all Federal financial assistance even if creditworthiness or credit 
history is not otherwise a factor for eligibility purposes, e.g., 
student loans. A person may be eligible for Federal financial assistance 
only after the delinquency is resolved in accordance with this section. 
An agency may waive this eligibility requirement in accordance with 
paragraph (g) of this section.
    (2) An agency from which a person seeks Federal financial assistance 
may determine, under standards issued by the agency, that a person is 
ineligible for Federal financial assistance under this section if:
    (i) The person is controlled by a person owing an outstanding nontax 
debt that is in delinquent status (e.g., a corporation is controlled by 
an officer, director, or shareholder who owes a debt); or
    (ii) The person controls a person owing an outstanding nontax debt 
that is in delinquent status (e.g., a corporation controls a wholly-
owned or partially-owned subsidiary which owes a debt).
    (3) A creditor agency may obtain information concerning whether or 
not a person seeking Federal financial assistance owes a delinquent debt 
from, among other sources, credit reports, information contained on 
credit applications, and the Department of Housing and Urban 
Development's Credit Alert Interactive Voice Response System (CAIVRS). 
For information about participating in the CAIVRS program, agencies 
should contact the Director of Information Resources Management, Policy 
and Management Division, Office of Information Technology, Department of 
Housing and Urban Development, 451 7th Street, S.W., Washington, DC 
20410.
    (d) Delinquent status. (1) Except as otherwise provided in paragraph 
(d)(2) of this section, a debt is in ``delinquent status'' for purposes 
of this section if the debt has not been paid within 90 days of the 
payment due date. The payment due date is the date specified in the 
creditor agency's initial written demand for payment or applicable 
agreement or instrument (including a post-delinquency repayment 
agreement).
    (2) For purposes of this section, a debt is not in delinquent status 
if:
    (i) The person seeking Federal financial assistance has been 
released by the creditor agency from any obligation to pay the debt, or 
there has been an adjudication or determination that such person does 
not owe or does not have to pay the debt;
    (ii) The debtor is the subject of, or has been discharged in, a 
bankruptcy proceeding, and if applicable, the person seeking Federal 
financial assistance is current on any court authorized repayment plan; 
or
    (iii) The existence of the debt or the agency's determination that 
the debt is delinquent is being challenged under an ongoing 
administrative appeal or contested judicial proceeding and the appeal 
was filed by the debtor in a timely manner. Unless otherwise prohibited, 
an agency may defer making a determination as to whether or not to 
extend credit until the appeal process is completed.
    (3) Unless the provisions of paragraph (d)(2) apply, a debt is in 
delinquent status even if the creditor agency has suspended or 
terminated collection activity with respect to such debt. For example, a 
delinquent nontax debt that has been written off the books of the 
creditor agency or reported to the Internal Revenue Service as 
discharged (i.e., canceled) is in delinquent status for purposes of this 
section.
    (4) Nothing in this section defines the terms ``delinquent'' or 
``delinquent status'' for any purposes other than those described in 
this section.
    (e) Delinquency resolution. (1) For purposes of this section, a 
person's delinquent debt is resolved only if the person:
    (i) Pays or otherwise satisfies the delinquent debt in full;
    (ii) Pays the delinquent debt in part if the creditor agency accepts 
such part payment as a compromise in lieu of payment in full;
    (iii) Cures the delinquency under terms acceptable to the creditor 
agency in that the person pays any overdue payments, plus all interest, 
penalties, late charges, and administrative charges assessed by the 
creditor agency as a result of the delinquency; or

[[Page 130]]

    (iv) Enters into a written repayment agreement with the creditor 
agency to pay the debt, in whole or in part, under terms and conditions 
acceptable to the creditor agency.
    (2) Unless the provisions of paragraph (e)(1) of this section apply, 
a delinquent debt is not resolved even if the creditor agency has 
suspended or terminated collection activity with respect to such debt. 
For example, a delinquent nontax debt that has been written off the 
books of the creditor agency or reported to the Internal Revenue Service 
as discharged (i.e., canceled) would not be ``resolved.'' If the 
provisions of paragraph (e)(1) of this section do apply, a delinquent 
debt is considered resolved. For example, if a portion of a debt has 
been written off after the person has paid the debt in part where the 
creditor agency accepts such part payment as a compromise in lieu of 
payment in full, the entire debt would be deemed ``resolved'' for 
purposes of this section in accordance with paragraph (e)(1)(ii) of this 
section.
    (f) Exemptions by the Secretary. (1) Upon the written request and 
recommendation of the head of the creditor agency to which a class of 
debts is owed, the Secretary may exempt any class of debts from 
affecting a debtor's eligibility for Federal financial assistance based 
on the provisions of 31 U.S.C. 3720B and this section.
    (2) The creditor agency recommending an exemption for a class of 
debts will provide the Secretary with information about:
    (i) The nature of the program under which the delinquencies have 
arisen;
    (ii) The number, dollar amount, and age of the debts in the program 
for which exemption is recommended;
    (iii) The reasons why an exemption is justified, including why the 
granting of financial assistance to persons owing the type of debt for 
which exemption is requested would not be contrary to the Government's 
goal to reduce losses by requiring proper screening of potential 
borrowers; and,
    (iv) Other information the Secretary deems necessary to consider the 
exemption request.
    (3) The Secretary may exempt a class of debts if exemption is in the 
best interests of the Federal Government.
    (g) Waivers by the agency. (1) The head of an agency from which a 
person seeks to obtain Federal financial assistance may waive the 
eligibility requirement described in paragraph (c) of this section. 
Waivers shall be granted only on a person by person basis. The head of 
the agency may delegate the waiver authority only to the Chief Financial 
Officer of the agency. The Chief Financial Officer may redelegate the 
authority only to the Deputy Chief Financial Officer of the agency.
    (2) The authorized agency official should balance the following 
factors when deciding whether to grant a waiver under paragraph (g)(1) 
of this section:
    (i) Whether the denial of the financial assistance to the person 
would tend to interfere substantially with or defeat the purposes of the 
financial assistance program or otherwise would not be in the best 
interests of the Federal Government; and
    (ii) Whether the agency's granting of the financial assistance to 
the person is contrary to the Government's goal to reduce losses from 
debt management activities by requiring proper screening of potential 
borrowers.
    (3) When balancing the factors described in paragraph (d)(2) of this 
section, the authorized agency official should consider:
    (i) The age, amount, and cause(s) of the delinquency and the 
likelihood that the person will resolve the delinquent debt; and
    (ii) The amount of total debt, delinquent or otherwise, owed by the 
person and the person's credit history with respect to repayment of 
debt.
    (4) Each agency shall retain a centralized record of the number and 
type of waivers granted under this section.
    (h) Effect of denial of Federal financial assistance. Nothing 
contained in this section precludes a person who has been denied Federal 
financial assistance from obtaining such assistance after that person's 
delinquent debt has been resolved in accordance with paragraph (e)(1) of 
this section.

[63 FR 67756, Dec. 8, 1998]

[[Page 131]]



                 SUBCHAPTER B--BUREAU OF THE PUBLIC DEBT





PART 306--GENERAL REGULATIONS GOVERNING U.S. SECURITIES--Table of Contents




                     Subpart A--General Information

Sec.
306.0  Applicability of regulations.
306.1  Official agencies.
306.2  Definitions of words and terms as used in these regulations.
306.3  Transportation charges and risks in the shipment of securities.

                         Subpart B--Registration

306.10  General.
306.11  Forms of registration for transferable securities.
306.12  Errors in registration.
306.13  Nontransferable securities.

              Subpart C--Transfers, Exchanges and Reissues

306.15  Transfers and exchanges of securities--closed periods.
306.16  Exchanges of registered securities.
306.17  Exchanges of registered securities for coupon securities.
306.18  Exchanges of coupon securities for registered securities.
306.19  Denominational exchanges of coupon securities.
306.20  Reissue of registered transferable securities.
306.21  Reissue of nontransferable securities.
306.22  Exchange of Treasury Bonds, Investment Series B-1975-80.
306.23  Securities eligible to be held in the TREASURY DIRECT Book-entry 
          Securities System.
306.24  Collection of fees on definitive securities.

                    Subpart D--Redemption or Payment

306.25  Presentation and surrender.
306.26  Redemption of registered securities at maturity, upon prior 
          call, or for prerefunding or advance refunding.
306.27  Redemption of bearer securities at maturity, upon prior call, or 
          for advance refunding or prerefunding.

                           Subpart E--Interest

306.35  Computation of interest.
306.36  Termination of interest.
306.37  Interest on registered securities.
306.38  Interest on bearer securities.

Appendix to Subpart E to Part 306--Interest--Computation of Interest on 
          Treasury Bonds, Treasury Notes, and Treasury Certificates of 
          Indebtedness, and Computation of Discount on Treasury Bills--
          Interest Tables

        Subpart F--Assignments of Registered Securities--General

306.40  Execution of assignments.
306.41  Form of assignment.
306.42  Alterations and erasures.
306.43  Voidance of assignments.
306.44  Discrepancies in names.
306.45  Certifying individuals.

          Subpart G--Assignments by or in Behalf of Individuals

306.55  Signatures, minor errors and change of name.
306.56  Assignment of securities registered in the names of or assigned 
          to two or more persons.
306.57  Minors and incompetents.
306.58  Nontransferable securities.

     Subpart H--Assignments in Behalf of Estates of Deceased Owners

306.65  Special provisions applicable to small amounts of securities, 
          interest checks or redemption checks.
306.66  Estates--administration.
306.67  Estates not administered.
306.68  Nontransferable securities.

     Subpart I--Assignments by or in Behalf of Trustees and Similar 
                               Fiduciaries

306.75  Individual fiduciaries.
306.76  Fiduciaries acting as a unit.
306.77  Corepresentatives and fiduciaries.
306.78  Nontransferable securities.

   Subpart J--Assignments in Behalf of Private or Public Organizations

306.85  Private corporations and unincorporated associations (including 
          nominees).
306.86  Change of name and succession of private organizations.
306.87  Partnerships (including nominee partnerships).
306.88  Political entities and public corporations.
306.89  Public officers.
306.90  Nontransferable securities.

                      Subpart K--Attorneys in Fact

306.95  Attorneys in fact.
306.96  Nontransferable securities.

[[Page 132]]

            Subpart L--Transfer Through Judicial Proceedings

306.100  Transferable securities.
306.101  Evidence required.
306.102  Nontransferable securities.

           Subpart M--Requests for Suspension of Transactions

306.105  Requests for suspension of transactions in registered 
          securities.
306.106  Requests for suspension of transactions in bearer securities.

     Subpart N--Relief for Loss, Theft, Destruction, Mutilation, or 
                        Defacement of Securities

306.110  Statutory authority and requirements.
306.111  Procedure for applying for relief.
396.112  Type of relief granted.
306.113  Cases not requiring bonds of indemnity.

                     Subpart O--Book-Entry Procedure

306.115  Definition of terms.
306.116  Scope and effect of book-entry procedure.
306.117  Withdrawal of eligible book-entry Treasury securities for 
          conversion to registered form.

                   Subpart P--Miscellaneous Provisions

306.125  Additional requirements.
306.126  Waiver of regulations.
306.127  Preservation of existing rights.
306.128  Supplements, amendments or revisions.

    Authority: 31 U.S.C. Chapter 31; 5 U.S.C. 301; 12 U.S.C. 391.

    Source: 38 FR 7078, Mar. 15, 1973, unless otherwise noted.



                     Subpart A--General Information



Sec. 306.0  Applicability of regulations.

    These regulations apply to all U.S. transferable and nontransferable 
securities,\1\ other than U.S. Savings Bonds and U.S. Savings Notes, to 
the extent specified in these regulations, the offering circulars or 
special regulations governing such securities.
---------------------------------------------------------------------------

    \1\ These regulations may also be applied to securities issued by 
certain agencies of the United States and certain Government and 
Government-sponsored corporations.
---------------------------------------------------------------------------



Sec. 306.1  Official agencies.

    The Bureau of the Public Debt of the Department of the Treasury is 
charged with matters relating to transactions in securities. 
Correspondence concerning transactions in securities and requests for 
appropriate forms may be addressed to the Division of Customer Service, 
Parkersburg, WV 26102.

[64 FR 38125, July 15, 1999]



Sec. 306.2  Definitions of words and terms as used in these regulations.

    (a) Advance refunding offer is an offer to a holder of a security, 
usually a year or more in advance of its call or maturity date, to 
exchange it for another security.
    (b) A bearer security is payable on its face at maturity or call for 
redemption before maturity in accordance with its terms to bearer. The 
ownership is not recorded. Title to such a security may pass by delivery 
without endorsement and without notice. A coupon security is a bearer 
security with interest coupons attached.
    (c) Bureau refers to the Bureau of the Public Debt, Division of 
Customer Service, Parkersburg, WV 26102.
    (d) Call date or date of call is the date fixed in the official 
notice of call published in the Federal Register as the date on which 
the obligor will make payment of the security before maturity in 
accordance with its terms.
    (e) Court means one which has jurisdiction over the parties and the 
subject matter.
    (f) Department refers to the Department of the Treasury.
    (g) Depository institution means an entity described in section 
19(b)(1)(A)(i)--(vi) of the Federal Reserve Act (12 U.S.C. 
461(b)(1)(A)(i)--(vi)). Under section 19(b) of the Federal Reserve Act, 
the term depository institution includes:
    (1) Any insured bank as defined in 12 U.S.C. 1813 or any bank which 
is eligible to make application to become an insured bank under 12 
U.S.C. 1815;
    (2) Any mutual savings bank as defined in 12 U.S.C. 1813 or any bank 
which is eligible to make application to become an insured bank under 12 
U.S.C. 1815;

[[Page 133]]

    (3) Any savings bank as defined in 12 U.S.C. 1813 or any bank which 
is eligible to make application to become an insured bank under 12 
U.S.C. 1815;
    (4) Any insured credit union as defined in 12 U.S.C. 1752 or any 
credit union which is eligible to make application to become an insured 
credit union under 12 U.S.C. 1781;
    (5) Any member as defined in 12 U.S.C. 1422; and
    (6) Any savings association (as defined in 12 U.S.C. 1813) which is 
an insured depository institution, as defined in the Federal Deposit 
Insurance Act, 12 U.S.C. 1811, et seq., or is eligible to apply to 
become an insured depository institution under such Act.
    (h) Face maturity date is the payment date specified in the text of 
a security.
    (i) Incompetent refers to a person under any legal disability except 
minority.
    (j) Joint owner and joint ownership refer to any permitted form of 
ownership by two or more persons.
    (k) Nontransferable securities are those issued only in registered 
form which according to their terms are payable only to the registered 
owners or recognized successors in title to the extent and in the manner 
provided in the offering circulars or special applicable regulations.
    (l) Payment and redemption, unless otherwise indicated by the 
context, are used interchangeably for payment at maturity or payment 
before maturity pursuant to a call for redemption in accordance with the 
terms of the securities.
    (m) Prerefunding offer is an offer to a holder of a security, 
usually within the year preceding its call or maturity date, to exchange 
it for another security.
    (n) Redemption-exchange is any authorized redemption of securities 
for the purpose of applying the proceeds in payment for other securities 
offered in exchange.
    (o) A registered security refers to a security the ownership of 
which is registered on the books of the Department. It is payable at 
maturity or call for redemption before maturity in accordance with its 
terms to the person in whose name it is inscribed, or his assignee.
    (p) Securities assigned in blank or securities so assigned as to 
become in effect payable to bearer refers to registered securities which 
are assigned by the owner or his authorized representative without 
designating the assignee. Registered securities assigned simply to The 
Secretary of the Treasury or in the case of Treasury Bonds, Investment 
Series B--1975-80, to The Secretary of the Treasury for exchange for the 
current Series EA or EO Treasury notes are considered to be so assigned 
as to become in effect payable to bearer.
    (q) Signature guarantee program means a signature guarantee program 
established in response to Rule 17 Ad-15 (17 CFR 240.17Ad-15), issued 
under authority of the Securities Exchange Act of 1934. For the purpose 
of the regulations, in this part, the Securities Transfer Agents 
Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP), 
and the New York Stock Exchange, Inc. Medallion Signature Program (MSP) 
are recognized by Treasury as such signature guarantee programs.
    (r) Taxpayer identifying number means the appropriate identifying 
number as required on tax returns and other documents submitted to the 
Internal Revenue Service, i.e., an individual's social security account 
number or an employer identification number. A social security account 
number is composed of nine digits separated by two hyphens, for example, 
123-45-6789; an employer identification number is composed of nine 
digits separated by one hyphen, for example, 12-3456789. The hyphens are 
an essential part of the numbers and must be included.
    (s) Transferable securities, which may be in either registered or 
bearer form, refers to securities which may be sold on the market and 
transfer of title accomplished by assignment and delivery if in 
registered form, or by delivery only if in bearer form.
    (t) Treasury securities, Treasury bonds, Treasury notes, Treasury 
certificates of indebtedness, and Treasury bills, or simply securities, 
bonds, notes, certificates, and bills, unless otherwise indicated by

[[Page 134]]

the context, refer only to transferable securities.

[38 FR 7078, Mar. 15, 1973, as amended at 59 FR 59036, Nov. 15, 1994; 64 
FR 38125, July 15, 1999]



Sec. 306.3  Transportation charges and risks in the shipment of securities.

    The following guidelines apply to the transportation of reissued 
securities or securities presented for authorized transactions:
    (a) The securities may be presented in person by the owner or the 
owner's agent.
    (b) If securities are not presented in person, shipment of the 
securities is at the owner's risk and expense.
    (c) Reissued securities will be delivered by certified mail or by 
other means, at the risk of the registered owner and at the expense of 
the Department.

[64 FR 38125, July 15, 1999]



                         Subpart B--Registration



Sec. 306.10  General.

    The registration used must express the actual ownership of a 
security and may not include any restriction on the authority of the 
owner to dispose of it in any manner, except as otherwise specifically 
provided in these regulations. The Treasury Department reserves the 
right to treat the registration as conclusive of ownership. Requests for 
registration should be clear, accurate, and complete, conform with one 
of the forms set forth in this subpart, and include appropriate taxpayer 
identifying numbers.\2\ The registration of all bonds owned by the same 
person, organization, or fiduciary should be uniform with respect to the 
name of the owner and, in the case of a fiduciary, the description of 
the fiduciary capacity. Individual owners should be designated by the 
names by which they are ordinarily known or under which they do 
business, preferably including at least one full given name. The name of 
an individual may be preceded by any applicable title, as, for example, 
Mrs., Miss, Ms., Dr., or Rev., or followed by a designation such as 
M.D., D.D., Sr., or Jr. Any other similar suffix should be included when 
ordinarily used or when necessary to distinguish the owner from a member 
of his family. A married woman's own given name, not that of her 
husband, must be used, for example, Mrs. Mary A. Jones, not Mrs. Frank 
B. Jones. The address should include, where appropriate, the number and 
street, route, or any other local feature and the Zip Code.
---------------------------------------------------------------------------

    \2\ Taxpayer identifying numbers are not required for foreign 
governments, nonresident aliens not engaged in trade or business within 
the United States, international organizations and foreign corporations 
not engaged in trade or business and not having an office or place of 
business or a financial or paying agent within the United States, and 
other persons or organizations as may be exempted from furnishing such 
numbers under regulations of the Internal Revenue Service.
---------------------------------------------------------------------------



Sec. 306.11  Forms of registration for transferable securities.

    The forms of registration described below are authorized for 
transferable securities:
    (a) Natural persons in their own right. In the names of natural 
persons who are not under any legal disability, in their own right, 
substantially as follows:
    (1) One person. In the name of one individual. Examples:

John A. Doe (123-45-6789).
Mrs. Mary C. Doe. (123-45-6789).
Miss Elizabeth Jane Doe (123-45-6789).


An individual who is sole proprietor of a business conducted under a 
trade name may include a reference to the trade name. Examples:

John A. Doe, doing business as Doe's Home Appliance Store (123-45-6789).

                                   or

John A. Doe (123-45-6789), doing business as Doe's Home Appliance Store.

    (2) Two or more persons--general. Securities will not be registered 
in the name of one person payable on death to another, or in any form 
which purports to authorize transfer by less than all the persons named 
in the registration (or all the survivors).\3\ Securities will

[[Page 135]]

not be registered in the forms John A. Doe and Mrs. Mary C. Doe, or 
either of them or William C. Doe or Henry J. Doe, or either of them and 
securities so assigned will be treated as though the words or either of 
them do not appear in the assignments. The taxpayer identifying number 
of any of the joint owners may be shown on securities registered in 
joint ownership form.
---------------------------------------------------------------------------

    \3\ Warning. Difference Between Transferable Treasury Securities 
Registered in the Names of Two or More Persons and United States Savings 
Bonds in Coownership Form. The effect of registering Treasury securities 
to which these regulations apply in the names of two or more persons 
differs decidedly from registration of savings bonds in coownership 
form. Savings bonds are virtually redeemable on demand at the option of 
either coowner on his signature alone. Transferable Treasury securities 
are redeemable only at maturity or upon prior call by the Secretary of 
the Treasury.
---------------------------------------------------------------------------

    (i) With right of survivorship. In the names of two or more 
individuals with right of survivorship. Examples:

John A. Doe (123-45-6789) or Mrs. Mary C. Doe or the survivor.
John A. Doe (123-45-6789) or Mrs. Mary C. Doe or Miss Mary Ann Doe or 
the survivors or survivor.
John A. Doe (123-45-6789) or Mrs. Mary C. Doe.
John A. Doe (123-45-6789) and Mrs. Mary C. Doe.
John A. Doe (123-45-6789) and Mrs. Mary C. Doe as joint tenants with 
right of survivorship and not as tenants in common.

Limited to husband and wife:
---------------------------------------------------------------------------

    \4-6\ [Reserved]

John A. Doe (123-45-6789) and Mrs. Mary C. Doe, as tenants by the 
---------------------------------------------------------------------------
entireties.

    (ii) Without right of survivorship. In the names of two or more 
individuals in such manner as to preclude the right of survivorship. 
Examples:

John A. Doe (123-45-6789) and William B. Doe as tenants in common.
John A. Jones as natural guardian of Henry B. Jones, a minor, and Robert 
C. Jones (123-45-6789), without right of survivorship.

Limited to husband and wife:

Charles H. Brown (123-45-6789) and Ann R. Brown, as partners in 
community.

    (b) Minors and incompetents--(1) Natural guardians of minors. A 
security may be registered in the name of a natural guardian of a minor 
for whose estate no legal guardian or similar representative has legally 
qualified. Example:

John R. Jones as natural guardian of Henry M. Jones, a minor (123-45-
6789).


Either parent with whom the minor resides, or if he does not reside with 
either parent, the person who furnishes his chief support, will be 
recognized as his natural guardian and will be considered a fiduciary. 
Registration in the name of a minor in his own right as owner or as 
joint owner is not authorized. Securities so registered, upon 
qualification of the natural guardian, will be treated as though 
registered in the name of the natural guardian in that capacity.
    (2) Custodian under statute authorizing gifts to minors. A security 
may be purchased as a gift to a minor under a gifts to minors statute in 
effect in the State in which either the donor or the minor resides. The 
security should be registered as provided in the statute, with an 
identifying reference to the statute if the registration does not 
clearly identify it. Examples:

William C. Jones, as custodian for John A. Smith, a minor (123-45-6789), 
under the California Uniform Gifts to Minors Act.
Robert C. Smith, as custodian for Henry L. Brown, a minor (123-45-6789), 
under the laws of Georgia; Chapter 48-3, Code of Ga. Anno.

    (3) Incompetents not under guardianship. Registration in the form 
John A. Brown, an incompetent (123-45-6789), under voluntary 
guardianship, is permitted only on reissue after a voluntary guardian 
has qualified for the purpose of collecting interest. (See 
Secs. 306.37(c)(2) and 306.57(c)(2)). Otherwise, registration in the 
name of an incompetent not under legal guardianship is not authorized.
    (c) Executors, administrators, guardians, and similar 
representatives or fiduciaries. A security may be registered in the 
names of legally qualified executors, administrators, guardians, 
conservators, or similar representatives or fiduciaries of a single 
estate. The names and capacities of all the representatives or 
fiduciaries, as shown in their letters of appointment, must be included 
in the registration and must be followed by an adequate identifying 
reference to the estate. Examples:


[[Page 136]]


John Smith, executor of will (or administrator of estate) of Henry J. 
Jones, deceased (12-3456789).
William C. Jones, guardian (or conservator, etc.) of estate of James D. 
Brown, a minor (or an incompetent) (123-45-6789).

    (d) Life tenant under will. A security may be registered in the name 
of a life tenant followed by an adequate identifying reference to the 
will. Example:

Anne B. Smith, life tenant under the will of Adam A. Smith, deceased 
(12-3456789).

The life tenant will be considered a fiduciary.
    (e) Private trust estates. A security may be registered in the name 
and title of the trustee or trustees of a single duly constituted 
private trust, followed by an adequate identifying reference to the 
authority governing the trust. Examples:

John Jones and Blank Trust Co., Albany, NY, trustees under will of Sarah 
Jones, deceased (12-3456789).
John Doe and Richard Roe, trustees under agreement with Henry Jones 
dated February 9, 1970 (12-3456789).


The names of all trustees, in the form used in the trust instrument, 
must be included in the registration, except as follows:
    (1) If there are several trustees designated as a board or 
authorized to act as a unit, their names should be omitted and the words 
Board of Trustees substituted for the word trustees. Example:

Board of Trustees of Blank Co. Retirement Fund, under collective 
bargaining agreement dated June 30, 1970 (12-3456789).

    (2) If the trustees do not constitute a board or otherwise act as a 
unit, and are either too numerous to be designated in the inscription by 
names and title, or serve for limited terms, some or all of the names 
may be omitted. Examples:

John Smith, Henry Jones, et al., trustees under will of Henry J. Smith, 
deceased (12-3456789).
Trustees under will of Henry J. Smith, deceased (12-3456789).
Trustees of Retirement Fund of Industrial Manufacturing Co., under 
directors' resolution of June 30, 1950 (12-3456789).

    (f) Private organizations (corporations, unincorporated associations 
and partnerships). A security may be registered in the name of any 
private corporation, unincorporated association, or partnership, 
including a nominee, which for purposes of these regulations is treated 
as the owner. The full legal name of the organization, as set forth in 
its charter, articles of incorporation, constitution, partnership 
agreement, or other authority from which its powers are derived, must be 
included in the registration and may be followed, if desired, by a 
reference to a particular account or fund, other than a trust fund, in 
accordance with the rules and examples given below:
    (1) A corporation. The name of a business, fraternal, religious, or 
other private corporation must be followed by descriptive words 
indicating the corporate status unless the term corporation or the 
abbreviation Inc. is part of the name or the name is that of a 
corporation or association organized under Federal law, such as a 
national bank or Federal savings and loan association. Examples:

Smith Manufacturing Co., a corporation (12-3456789).
The Standard Manufacturing Corp. (12-3456789).
Jones & Brown, Inc.--Depreciation Acct. (12-3456789).
First National Bank of Albemarle (12- 3456789).
Abco & Co., Inc., a nominee corporation (12-3456789).

    (2) An unincorporated association. The name of a lodge, club, labor 
union, veterans' organization, religious society, or similar self-
governing organization which is not incorporated (whether or not it is 
chartered by or affiliated with a parent organization which is 
incorporated) must be followed by the words an unincorporated 
association. Examples:

American Legion Post No. --, Department of the D.C., an unincorporated 
association (12-3456789).
Local Union No. 100, Brotherhood of Locomotive Engineers, an 
unincorporated association (12-3456789).

Securities should not be registered in the name of an unincorporated 
    association if the legal title to its property in general, or the 
    legal title to the funds with which the securities are to be 
    purchased, is held by trustees. In such a case the securities

[[Page 137]]

    should be registered in the title of the trustees in accordance with 
    paragraph (e) of this section. The term unincorporated association 
    should not be used to describe a trust fund, a partnership or a 
    business conducted under a trade name.
    (3) A partnership. The name of a partnership must be followed by the 
words a partnership. Example:

Smith & Brown, a partnership (12-3456789).
Acme Novelty Co., a limited partnership (12-3456789).
Abco & Co., a nominee partnership (12-3456789).

    (g) States, public bodies, and corporations and public officers. A 
security may be registered in the name of a State or county, city, town, 
village, school district, or other political entity, public body or 
corporation established by law (including a board, commission, 
administration, authority or agency) which is the owner or official 
custodian of public funds, other than trust funds, or in the full legal 
title of the public officer having custody. Examples:

State of Maine.
Town of Rye, NY.
Maryland State Highway Administration.
Treasurer, City of Springfield, IL.
Treasurer of Rhode Island--State Forestry Fund.

    (h) States, public officers, corporations or bodies as trustees. A 
security may be registered in the title of a public officer or in the 
name of a State or county or a public corporation or public body acting 
as trustee under express authority of law. An appropriate reference to 
the statute creating the trust may be included in the registration. 
Examples:

Insurance Commissioner of Pennsylvania, trustee for benefit of 
policyholders of Blank Insurance Co. (12-3456789), under Sec. --, Pa. 
Stats.
Rhode Island Investment Commission, trustee of General Sinking Fund 
under Ch. 35, Gen. Laws of RI.
State of Colorado in trust for Colorado Surplus Property Agency.

[38 FR 7078, Mar. 15, 1973; 38 FR 8153, Mar. 29, 1973]



Sec. 306.12  Errors in registration.

    If an erroneously inscribed security is received, it should not be 
altered in any respect, but the Bureau should be furnished full 
particulars concerning the error and asked to furnish instructions.

[38 FR 7078, Mar. 15, 1973, as amended at 64 FR 38125, July 15, 1999]



Sec. 306.13  Nontransferable securities.

    Upon authorized reissue, Treasury Bonds, Investment Series B--1975-
80, may be registered in the forms set forth in Sec. 306.11.



              Subpart C--Transfers, Exchanges and Reissues



Sec. 306.15  Transfers and exchanges of securities--closed periods.

    (a) General. The transfer of registered securities should be made by 
assignment in accordance with subpart F of this part. Transferable 
registered securities are eligible for denominational exchange. Specific 
instructions for issuance and delivery of the new securities, signed by 
the owner or his authorized representative, must accompany the 
securities presented. (Form PD 3905 or PD 1827, as appropriate, may be 
used.) Denominational exchanges may be made at any time. Securities 
presented for transfer must be received by the Bureau not less than 1 
full month before the date on which the securities mature or become 
redeemable pursuant to a call for redemption before maturity. Any 
security so presented which is received too late to comply with this 
provision will be accepted for payment only.
    (b) Closing of transfer books. The transfer books are closed for one 
full month preceding interest payment dates and call or maturity dates. 
If the date set for closing of the transfer books falls on Saturday, 
Sunday, or a legal holiday, the books will be closed as of the close of 
business on the last business day preceding that date. The books are 
reopened on the first business day following the date on which interest 
falls due. Registered securities which have not matured or been called, 
submitted for transfer, reissue, and coupon securities which have not 
matured or been called, submitted for exchange for registered 
securities, which are received during the period the books for that loan 
are closed, will be processed on or after the date such

[[Page 138]]

books are reopened. If registered securities are received for transfer, 
or coupon securities are received for exchange for registered 
securities, during the time the books are closed for payment of final 
interest at maturity or call, unless otherwise provided in the offering 
circular or notice of call, the following action will be taken:
    (1) Payment of final interest will be made to the registered owner 
of record on the date the books were closed.
    (2) Payment of principal will be made to the assignee under a proper 
assignment of the securities.

[38 FR 7078, Mar. 15, 1973, as amended at 64 FR 38125, July 15, 1999]



Sec. 306.16  Exchanges of registered securities.

    No assignments will be required for:
    (a) Authorized denominational exchanges of registered securities for 
like securities in the same names and forms of registration and
    (b) Redemption-exchanges, or prefundings, or advance refundings in 
the same names and forms as appear in the registration or assignments of 
the securities surrendered.



Sec. 306.17  Exchanges of registered securities for coupon securities.

    Exchanges of registered securities for bearer securities are not 
permitted.

[64 FR 38126, July 15, 1999]



Sec. 306.18  Exchanges of coupon securities for registered securities.

    Coupon securities presented for exchange for registered securities 
should have all matured interest coupons detached. All unmatured coupons 
should be attached, except that if presented when the transfer books are 
closed (in which case the exchange will be effected on or after the date 
on which the books are reopened), the next maturing coupons should be 
detached and held for collection in ordinary course when due. If any 
coupons which should be attached are missing, the securities must be 
accompanied by a remittance in an amount equal to the face amount of the 
missing coupons. The new registered securities will bear interest from 
the interest payment date next preceding the date on which the exchange 
is made.



Sec. 306.19  Denominational exchanges of coupon securities.

    Denominational exchanges of bearer securities are not permitted.

[64 FR 38126, July 15, 1999]



Sec. 306.20  Reissue of registered transferable securities.

    Assignments are not required for reissue of registered transferable 
securities in the name(s) of:
    (a) The surviving joint owner(s) of securities registered in the 
names of or assigned to two or more persons, unless the registration or 
assignment includes words which preclude the right of survivorship,
    (b) A succeeding fiduciary or other lawful successor,
    (c) A remainderman, upon termination of a life estate,
    (d) An individual, corporation or unincorporated association whose 
name has been legally changed,
    (e) A corporation or unincorporated association which is the lawful 
successor to another corporation or unincorporated association, and
    (f) A successor in title to a public officer or body.

Evidence of survivorship, succession, or change of name, as appropriate, 
must be furnished. The appropriate taxpayer identifying number also must 
be furnished if the registration of the securities submitted does not 
include such number for the person or organization to be named on the 
reissued securities.



Sec. 306.21  Reissue of nontransferable securities.

    Treasury Bonds, Investment Series B--1975-80, may be reissued only 
in the names of:
    (a) Lawful successors in title,
    (b) The legal representatives or distributees of a deceased owner's 
estate, or the distributees of a trust estate, and
    (c) State supervisory authorities in pursuance of any pledge 
required of the owner under State law, or upon termination of the pledge 
in the names of the pledgors or their successors.

[[Page 139]]


Bonds presented for reissue must be accompanied by evidence of 
entitlement.



Sec. 306.22  Exchange of Treasury Bonds, Investment Series B-1975-80.

    Bonds of this series presented for exchange for 1\1/2\ percent 5-
year Treasury notes must bear duly executed assignments to ``The 
Secretary of the Treasury for exchange for the current series of EA or 
EO Treasury notes to be delivered to (inserting the name and address of 
the person to whom the notes are to be delivered).'' The notes will bear 
the April 1 or October 1 date next preceding the date the bonds, duly 
assigned with supporting evidence, if necessary, are received by the 
Bureau or a Federal Reserve Bank or Branch. Interest accrued at the rate 
of 2\3/4\ percent on the bonds surrendered from the next preceding 
interest payment date to the date of exchange will be credited, and 
interest at the rate of 1\1/2\ percent on the notes for the same period 
will be charged and the difference will be paid to the owner.



Sec. 306.23  Securities eligible to be held in the TREASURY DIRECT Book-entry Securities System.

    (a) Eligible issues. The Secretary will, from time to time, cause to 
be published in the Federal Register a notice describing those series of 
Treasury issues of bonds and notes issued before August 1, 1986, that 
will be eligible for conversion to the TREASURY DIRECT Book-entry 
Securities System. The notice shall specify the period during which 
requests for conversion will be accepted.
    (b) Establishment of TREASURY DIRECT account. To convert a bearer or 
registered security to book-entry form to be held in TREASURY DIRECT, 
the owner(s) must establish at the time of conversion, or prior thereto, 
an account in TREASURY DIRECT in accordance with Sec. 357.20 of part 
357. Similarly, to transfer to TREASURY DIRECT a security held in book-
entry form under subpart O of this part, the owner(s) must establish at 
the time of transfer, or prior thereto, an account in TREASURY DIRECT in 
accordance with Sec. 357.20 of part 357.
    (c) Procedure for conversion of bearer security. To convert a bearer 
security to TREASURY DIRECT, the owner must present it to the Department 
of the Treasury, accompanied by a request for conversion, which must 
include the information needed for establishing a TREASURY DIRECT 
account, unless such account has been previously established, and is 
identified by its number in the request.
    (d) Procedures for conversion of registered security. To convert a 
registered security to TREASURY DIRECT, the owner(s) thereof must 
execute an assignment in accordance with subpart F of this part. The 
assignment must be in substantially the following form: ``To the 
Secretary of the Treasury for conversion to book-entry and deposit in 
TREASURY DIRECT,''. The security should be accompanied by the 
information needed for establishing the TREASURY DIRECT account, or 
where an account has been previously established, the above assignment 
should be reworded to include the account number.
    (e) Procedure for transfer of book-entry security held under subpart 
O. To transfer a book-entry security held under subpart O of this part, 
the owner(s) must arrange with the bank or other entity where the 
security is being held to transfer the same to TREASURY DIRECT. No such 
transfer will be accepted unless a TREASURY DIRECT account has 
previously been established and the number thereof is shown in the 
transfer request.
    (f) Terms and conditions of securities held in TREASURY DIRECT. An 
eligible security held in TREASURY DIRECT shall be subject to subpart C 
and other applicable portions of part 357, and the provisions of part 
306 shall not apply thereto.
    (g) Re-conversion from TREASURY DIRECT to registered form or to 
book-entry under subpart O. The owner(s) of a security converted or 
transferred to TREASURY DIRECT in the manner herein provided may, by 
executing an appropriate transaction request, transfer the book-entry 
security to a book-entry account held under the provisions of subpart O 
of this part. Thereafter, to the extent that the security was originally 
eligible for such conversion the book-entry security held under subpart 
O may be converted to

[[Page 140]]

one in registered form. Securities transferred from TREASURY DIRECT 
under this subsection shall be thereupon subject to the provisions of 
part 306, and part 357 shall no longer apply thereto.

[53 FR 15554, May 2, 1988, as amended at 64 FR 38126, July 15, 1999]



Sec. 306.24  Collection of fees on definitive securities.

    A fee shall be charged for each registered security, as defined in 
Sec. 306.115 (a), issued as a result of a transfer, exchange, reissue, 
withdrawal from book-entry, or the granting of relief on account of 
loss, theft, destruction, mutilation, or defacement. The applicable fee, 
and the basis for its determination, will be published by notice in the 
Federal Register.

[60 FR 4377, Jan. 23, 1995, as amended at 64 FR 38126, July 15, 1999]



                    Subpart D--Redemption or Payment



Sec. 306.25  Presentation and surrender.

    (a) General. Securities, whether in registered or bearer form, are 
payable in regular course of business at maturity unless called for 
redemption before maturity in accordance with their terms, in which case 
they will be payable in regular course of business on the date of call. 
The Secretary of the Treasury may provide for the exchange of maturing 
or called securities, or in advance of call or maturity, may afford 
owners the opportunity of exchanging a security for another security 
pursuant to a prerefunding or an advance refunding offer. Registered and 
bearer securities should be presented and surrendered for redemption to 
the Bureau. No assignments or evidence in support of assignments will be 
required by or on behalf of the registered owner or assignee for 
redemption for his or its account, or for redemption-exchange, or 
exchange pursuant to a prerefunding or an advance refunding offer, if 
the new securities are to be registered in exactly the same names and 
forms as appear in the registrations or assignments of the securities 
surrendered. To the extent appropriate, these rules also apply to 
securities registered in the title of public officers who are official 
custodians of public funds.
    (b) ``Overdue'' securities. If a bearer security or a registered 
security assigned in blank, or to bearer, or so assigned as to become in 
effect payable to bearer, is presented and surrendered for redemption 
after it has become overdue, the Secretary of the Treasury will 
ordinarily require satisfactory proof of ownership. (Form PD 1071 may be 
used.) A security shall be considered to be overdue after the lapse of 
the following periods of time from its face maturity:
    (1) One month for securities issued for a term of 1 year or less.
    (2) Three months for securities issued for a term of more than 1 
year but not in excess of 7 years.
    (3) Six months for securities issued for a term of more than 7 
years.

[38 FR 7078, Mar. 15, 1973; 38 FR 8432, Apr. 2, 1973, as amended by 64 
FR 38126, July 15, 1999]



Sec. 306.26  Redemption of registered securities at maturity, upon prior call, or for prerefunding or advance refunding.

    Registered securities presented and surrendered for redemption at 
maturity or pursuant to a call for redemption before maturity need not 
be assigned, unless the owner desires that payment be made to some other 
person, in which case assignments should be made to ``The Secretary of 
the Treasury for redemption for the account of (inserting name and 
address of person to whom payment is to be made). Specific instructions 
for the issuance and delivery of the redemption check, signed by the 
owner or his authorized representative, must accompany the securities, 
unless included in the assignment. (Form PD 3905 may be used.) Payment 
of the principal will be made by check drawn on the United States 
Treasury to the order of the persons entitled and mailed in accordance 
with the instructions received. Securities presented for prerefunding or 
advance refunding should be assigned as provided in the prerefunding or 
advance refunding offer.

[64 FR 38126, July 15, 1999]

[[Page 141]]



Sec. 306.27  Redemption of bearer securities at maturity, upon prior call, or for advance refunding or prerefunding.

    All interest coupons due and payable on or before the date of 
maturity or date fixed in the call for redemption before maturity should 
be detached from coupon securities presented for redemption and should 
be collected separately in regular course. All coupons bearing dates 
subsequent to the date fixed in a call for redemption, or offer of 
prerefunding or advance refunding, should be left attached to the 
securities. If any such coupons are missing, the full face amount 
thereof will be deducted from the payment to be made upon redemption or 
the prerefunding or advance refunding adjustment unless satisfactory 
evidence of their destruction is submitted. Any amounts so deducted will 
be held in the Department to provide for adjustments or refunds in the 
event it should be determined that the missing coupons were subsequently 
presented or their destruction is later satisfactorily established. In 
the absence of other instructions, payment or bearer securities will be 
made by check drawn to the order of the person presenting and 
surrendering the securities and mailed to him at his address, as given 
in the advice accompanying the securities. (Form PD 3905 may be used.) 
Under appropriate circumstances, payment to a financial institution for 
detached past due coupons may be made by crediting the amount of the 
proceeds to the account maintained by the financial institution at the 
Federal Reserve bank of its district.

[38 FR 7078, Mar. 15, 1973, as amended at 64 FR 38126, July 15, 1999]



                           Subpart E--Interest



Sec. 306.35  Computation of interest.

    The interest on Treasury securities accrues and is payable on a 
semiannual basis unless otherwise provided in the circular offering them 
for sale or exchange. If the period of accrual is an exact 6 months, the 
interest accrual is an exact one-half year's interest without regard to 
the number of days in the period. If the period of accrual is less than 
an exact 6 months, the accrued interest is computed by determining the 
daily rate of accrual on the basis of the exact number of days in the 
full interest period and multiplying the daily rate by the exact number 
of days in the fractional period for which interest has actually 
accrued. A full interest period does not include the day as of which 
securities were issued or the day on which the last preceding interest 
became due, but does include the day on which the next succeeding 
interest payment is due. A fractional part of an interest period does 
not include the day as of which the securities were issued or the day on 
which the last preceding interest payment became due, but does include 
the day as of which the transaction terminating the accrual of interest 
is effected. The 29th of February in a leap year is included whenever it 
falls within either a full interest period or a fractional part 
thereof.\7\
---------------------------------------------------------------------------

    \7\ The appendix to this subpart contains a complete explanation of 
the method of computing interest on a semiannual basis on Treasury 
bonds, notes, and certificates of indebtedness, and an outline of the 
method of computing the discount rates on Treasury bills. Also included 
are tables of computation of interest on semiannual and annual basis.
---------------------------------------------------------------------------



Sec. 306.36  Termination of interest.

    Securities will cease to bear interest on the date of their maturity 
unless they have been called for redemption before maturity in 
accordance with their terms, or are presented and surrendered for 
redemption-exchange or exchange pursuant to an advance refunding or 
prerefunding offer, in which case they will cease to bear interest on 
the date of call, or the exchange date, as the case may be.



Sec. 306.37  Interest on registered securities.

    (a) Method of payment. The interest on registered securities is 
payable by checks drawn on the United States Treasury to the order of 
the registered owners, except as otherwise provided herein. Interest 
checks are prepared by the Department in advance of the interest payment 
data and are ordinarily mailed in time to reach the addresses

[[Page 142]]

on that date. Interest on a registered security which has not matured or 
been called and which is presented for any transaction during the period 
the books for that loan are closed will be paid by check drawn to the 
order of the registered owner of record. Upon receipt of notice of the 
death or incompetency of an individual named as registered owner, a 
change in the name or in the status of a partnership, corporation, or 
unincorporated association, the removal, resignation, succession, or 
death of a fiduciary or trustee, delivery of interest checks will be 
withheld pending receipt and approval of evidence showing who is 
entitled to receive the interest checks. If the inscriptions on 
securities do not clearly identify the owners, delivery of interest 
checks will be withheld pending reissue of the securities in the correct 
registration. The final installment of interest, unless otherwise 
provided in the offering circular or notice of call, will be paid by 
check drawn to the order of the registered owner of record and mailed in 
advance of the interest payment date in time to reach the addressee on 
or about that date. Interest on securities presented for prerefunding or 
advance refunding will be adjusted as provided in the prerefunding or 
advance refunding offer.
    (b) Change of address. To assure timely delivery of interest checks, 
owners should promptly notify the Bureau of any change of address. (Form 
PD 345 may be used.) The notification must be signed by the registered 
owner or a joint owner or an authorized representative, and should show 
the owner's taxpayer identifying number, the old and new addresses, the 
serial number and denomination of each security, the titles of the 
securities (for example: 4\1/4\ percent Treasury Bonds of 1987-92, dated 
August 15, 1962), and the registration of each security. Notifications 
by attorneys in fact, trustees, or by the legal representatives of the 
estates of deceased, incompetent, or minor owners should be supported by 
proof of their authority, unless, in the case of trustees or legal 
representatives, they are named in the registration.
    (c) Collection of interest checks--(1) General. Interest checks may 
be collected in accordance with the regulations governing the 
endorsement and payment of Government warrants and checks, which are 
contained in the current revision of Department Circular No. 21 (part 
240 of this chapter).
    (2) By voluntary guardians of incompetents. Interest checks drawn to 
the order of a person who has become incompetent and for whose estate no 
legal guardian or similar representative has been appointed should be 
returned to the Bureau with a full explanation of the circumstances. For 
collection of interest, the Department will recognize the relative 
responsible for the incompetent's care and support or some other person 
as voluntary guardian for the incompetent. (Application may be made on 
Form PD 1461.)
    (d) Nonreceipt, loss, theft, or destruction of interest checks. If 
an interest check is not received within a reasonable period after an 
interest payment date, or if a check is lost, stolen, or destroyed after 
receipt, notification should be sent to the Bureau of the Public Debt, 
Division of Customer Service, Parkersburg, WV 26102. Notification should 
include the name and address of the owner, his taxpayer identifying 
number, and the serial number, denomination, and title of the security 
upon which the interest was payable. If the check is subsequently 
received or recovered, the Bureau should be notified.

[38 FR 7078, Mar. 15, 1973, as amended at 64 FR 38126, July 15, 1999]



Sec. 306.38  Interest on bearer securities.

    Unless the offering circular and notice of call provide otherwise, 
interest on coupon securities is payable in regular course of business 
upon presentation and surrender of the interest coupons as they mature. 
Such coupons are payable at participating Federal Reserve banks or by 
the Bureau.\8\ Interest on Treasury bills, and any other bearer 
securities which may be sold and issued on a discount basis and which 
are payable at par at maturity,

[[Page 143]]

is represented by the difference between the purchase price and the par 
value, and no coupons are attached.
---------------------------------------------------------------------------

    \8\ Banking institutions will usually cash the coupons without 
charge as an accommodation to their customers.

[38 FR 7078, Mar. 15, 1973, as amended at 64 FR 38126, July 15, 1999]

Appendix to Subpart E of Part 306--Interest--Computation of Interest on 
      Treasury Bonds, Treasury Notes, and Treasury Certificates of 
 Indebtedness, and Computation of Discount on Treasury Bills--Interest 
                                 Tables

                 computation of interest on annual basis

      One Day's Interest is \1/365\ or \1/366\ of 1-Year's Interest

    Computation of interest on Treasury bonds, notes, and certificates 
of indebtedness will be made on an annual basis in all cases where 
interest is payable in one amount for the full term of the security, 
unless such term is an exact half-year (6 months), and it is provided 
that interest shall be computed on a semi-annual basis.
    If the term of the securities is exactly 1 year, the interest is 
computed for the full period at the specified rate regardless of the 
number of days in such period.
    If the term of the securities is less than 1 full year, the annual 
interest period for purposes of computation is considered to be the full 
year from but not including the date of issue to and including the 
anniversary of such date.
    If the term of the securities is more than 1 full year, computation 
is made on the basis of one full annual interest period, ending with the 
maturity date, and a fractional part of the preceding full annual 
interest period.
    The computation of interest for any fractional part of an annual 
interest period is made on the basis of 365 actual days in such period, 
or 366 days if February 29 falls within such annual period.

               computation of interest on semiannual basis

  One Day's Interest is \1/181\, \1/182\, \1/183\ or \1/184\ or \1/2\ 
                             Year's Interest

    Computation of interest on Treasury bonds, notes, and certificates 
of indebtedness will be made on a semiannual basis in all cases where 
interest is payable for one or more full half-year (6 months) periods, 
or for one or more full half-year periods and a fractional part of a 
half-year period. A semiannual interest period is an exact half-year or 
6 months, for computation purposes, and may comprise 181, 182, 183 or 
184 actual days.
    An exact half-year's interest at the specified rate is computed for 
each full period of exactly 6 months, irrespective of the actual number 
of days in the half-year.
    If the initial interest covers a fractional part of a half-year, 
computation is made on the basis of the actual number of days in the 
half-year (exactly 6 months) ending on the day such initial interest 
becomes due. If the initial interest covers a period in excess of 6 
months, computation is made on the basis of one full half-year, ending 
with the interest due date, and a fractional part of the preceding full 
half-year period.
    Interest for any fractional part of a full half-year period is 
computed on the basis of the exact number of days in the full period, 
including February 29 whenever it falls within such a period.
    The number of days in any half-year period is shown in the following 
table:

                                                For the Half-Year
----------------------------------------------------------------------------------------------------------------
                                                                   Beginning and ending    Beginning and ending
                                                                   days are 1st or 15th    days are last days of
                                                                  of months listed under    months listed under
                                                                      interest period         interest period
                         Interest period                             (number of days)        (number of days)
                                                                 -----------------------------------------------
                                                                    Regular                 Regular
                                                                     year      Leap year     year      Leap year
----------------------------------------------------------------------------------------------------------------
January to July.................................................         181         182         181         182
February to August..............................................         181         182         184         184
March to September..............................................         184         184         183         183
April to October................................................         183         183         184         184
May to November.................................................         184         184         183         183
June to December................................................         183         183         184         184
July to January.................................................         184         184         184         184
August to February..............................................         184         184         181         182
September to March..............................................         181         182         182         183
October to April................................................         182         183         181         182
November to May.................................................         181         182         182         183
December to June................................................         182         183         181         182
                                                                 -----------------------------------------------
1 year (any 2 consecutive half-years)...........................         365         366         365         366
----------------------------------------------------------------------------------------------------------------


[[Page 144]]

    The following are dates for end-of-the-month interest computations.

------------------------------------------------------------------------
                                            Interest-computation period
      When interest period ends on--         will be from but will not
                                                     include--
------------------------------------------------------------------------
January 31...............................  July 31.
February 28 in 365-day year..............  August 31.
February 29..............................      Do.
March 30, 31.............................  September 30.
April 30.................................  October 31.
May 30, 31...............................  November 30.
June 30..................................  December 31.
July 31..................................  January 31.
August 29, 30, or 31.....................  February 28 in 365-day year.
                                           February 29 in leap year.
September 30.............................  March 31.
October 30, 31...........................  April 30.
November 30..............................  May 31.
December 30, 31..........................  June 30.
------------------------------------------------------------------------

                         use of interest tables

    In the appended tables decimals are set forth for use in computing 
interest for fractional parts of interest periods. The decimals cover 
interest on $1,000 for 1 day in each possible semiannual (Table I), and 
annual (Table II) interest period, at all rates of interest, in steps of 
\1/8\ percent, from \1/8\ to 9 percent. The amount of interest accruing 
on any date (for a fractional part of an interest period) on $1,000 face 
amount of any issue of Treasury bonds, Treasury notes, or Treasury 
certificates of indebtedness may be ascertained in the following way:
    (1) The date of issue, the dates for the payment of interest, the 
basis (semiannual or annual) upon which interest is computed, and the 
rate of interest (percent per annum) may be determined from the text of 
the security, or from the official circular governing the issue.
    (2) Determine the interest period of which the fraction is a part, 
and calculate the number of days in the full period to determine the 
proper column to be used in selecting the decimal for 1 day's interest.
    (3) Calculate the actual number of days in the fractional period 
from but not including the date of issue or the day on which the last 
preceding interest payment was made, to and including the day on which 
the next succeeding interest payment is due or the day as of which the 
transaction which terminates the accrual of additional interest is 
effected.
    (4) Multiply the appropriate decimal (1 day's interest on $1,000) by 
the number of days in the fractional part of the interest period. The 
appropriate decimal will be found in the appended table for interest 
payable semiannually or annually, as the case may be, opposite the rate 
borne by the security, and in the column showing the full interest 
period of which the fractional period is a part. (For interest on any 
other amount, multiply the amount of interest on $1,000 by the other 
amount expressed as a decimal of $1,000.)

                                treasury

    The methods of computing discount rates on U.S. Treasury bills are 
given below:
    Computation will be made on an annual basis in all cases. The annual 
period for bank discount is a year of 360 days, and all computations of 
such discount will be made on that basis. The annual period for true 
discount is 1 full year from but not including the date of issue to and 
including the anniversary of such date. Computation of true discount for 
a fractional part of a year will be made on the basis of 365 days in the 
year, or 366 days if February 29 falls within the year.

                              bank discount

    The bank discount rate on a Treasury bill may be ascertained by: (1) 
Subtracting the sale price of the bill from its face value to obtain the 
amount of discount; (2) dividing the amount of discount by the number of 
days the bill is to run to obtain the amount of discount per day; (3) 
multiplying the amount of discount per day by 360 (the number of days in 
a commercial year of 12 months of 30 days each) to obtain the amount of 
discount per year; and (4) dividing the amount of discount per year by 
the face value of the bill to obtain the bank discount rate.

For example:

91-day bill:
  Principal amount--maturity value..........................     $100.00
  Price at issue--amount received...........................       99.50
                                                             -----------
    Amount of discount......................................         .50
$0.50/91x360/$100=.01978 or 1.978 percent
 

                              true discount

    The true discount rate on a Treasury bill of not more than one-half 
year in length may be ascertained by (1 and 2) obtaining the amount of 
discount per day by following the first two steps described under ``Bank 
Discount''; (3) multiplying the amount of discount per day by the actual 
number of days in the year from date of issue (365 ordinarily, but 366 
if February 29 falls within the year from date of issue) to obtain the 
amount of discount per year; and (4) dividing the amount of discount per 
year by the sale price of the bill to obtain the true discount rate.

For example:

91-day bill:
  Principal amount--maturity value..........................     $100.00
  Price at issue--amount received...........................       99.50
                                                             -----------
    Amount of discount......................................         .50
$0.50/91x365/$99.50=.02016 or 2.016 percent
 


[[Page 145]]


   Table I--Decimal for 1 Day's Interest on $1,000 at Various Rates of Interest, Payable Semiannually or on a
 Semiannual Basis, in Regular Years of 365 Days and in Leap Years of 366 Days (to Determine Applicable Number of
                           Days, See ``Computation of Interest on Semiannual Basis'')
----------------------------------------------------------------------------------------------------------------
                                                Half-year of     Half-year of     Half-year of     Half-year of
          Rate per annum (percent)                184 days         183 days         182 days         181 days
----------------------------------------------------------------------------------------------------------------
\1/8\.......................................   $0.003 396 739   $0.003 415 301   $0.003 434 066   $0.003 453 039
\1/4\.......................................     .006 793 478     .006 830 601     .006 868 132     .006 906 077
\3/8\.......................................     .010 190 217     .010 245 902     .010 302 198     .010 359 116
\1/2\.......................................     .013 586 957     .013 661 202     .013 736 264     .013 812 155
\5/8\.......................................     .016 983 696     .017 076 503     .017 170 330     .017 265 193
\3/4\.......................................     .020 380 435     .020 491 803     .020 604 396     .020 718 232
\7/8\.......................................     .023 777 174     .023 907 104     .024 038 462     .024 171 271
1...........................................     .027 173 913     .027 322 404     .027 472 527     .027 624 309
1\1/8\......................................     .030 570 652     .030 737 705     .030 906 593     .031 077 348
1\1/4\......................................     .033 967 391     .034 153 005     .034 340 659     .034 530 387
1\3/8\......................................     .037 364 130     .037 568 306     .037 774 725     .037 983 425
1\1/2\......................................     .040 760 870     .040 983 607     .041 208 791     .041 436 464
1\5/8\......................................     .044 157 609     .044 398 907     .044 642 857     .044 889 503
1\3/4\......................................     .047 554 348     .047 814 208     .048 076 923     .048 342 541
1\7/8\......................................     .050 951 087     .051 229 508     .051 510 989     .051 795 580
2...........................................     .054 347 826     .054 644 809     .054 945 055     .055 248 619
2\1/8\......................................     .057 744 565     .058 060 109     .058 379 121     .058 701 657
2\1/4\......................................     .061 141 304     .061 475 410     .061 813 187     .062 154 696
2\3/8\......................................     .064 538 043     .064 890 710     .065 247 253     .065 607 735
2\1/2\......................................     .067 934 783     .068 306 011     .068 681 319     .069 060 773
2\5/8\......................................     .071 331 522     .071 721 311     .072 115 385     .072 513 812
2\3/4\......................................     .074 728 261     .075 136 612     .075 549 451     .075 966 851
2\7/8\......................................     .078 125 000     .078 551 913     .078 983 516     .079 419 890
3...........................................     .081 521 739     .081 967 213     .082 417 582     .082 872 928
3\1/8\......................................     .084 918 478     .085 382 514     .085 851 648     .086 325 967
3\1/4\......................................     .088 315 217     .088 797 814     .089 285 714     .089 779 006
3\3/8\......................................     .091 711 957     .092 213 115     .092 719 780     .093 232 044
3\1/2\......................................     .095 108 696     .095 628 415     .096 153 846     .096 685 083
3\5/8\......................................     .098 505 435     .099 043 716     .099 021 978     .100 138 122
3\3/4\......................................     .101 902 174     .102 459 016     .103 021 978     .103 591 160
3\7/8\......................................     .105 298 913     .105 874 317     .106 456 044     .107 044 190
4...........................................     .108 695 652     .109 289 617     .109 890 110     .110 497 238
4\1/8\......................................     .112 092 391     .112 704 918     .113 324 176     .113 950 236
4\1/4\......................................     .115 489 130     .116 120 219     .116 758 242     .117 403 375
4\3/8\......................................     .118 885 870     .119 535 519     .120 192 308     .120 856 317
4\1/2\......................................     .122 282 609     .122 950 820     .123 626 374     .124 309 394
4\5/8\......................................     .125 679 348     .126 366 120     .127 060 440     .127 762 432
4\3/4\......................................     .129 076 087     .129 781 421     .130 494 505     .131 215 471
4\7/8\......................................     .132 472 826     .133 196 721     .133 928 571     .134 668 500
5...........................................     .135 869 565     .136 612 022     .137 362 637     .138 121 548
5\1/8\......................................     .139 266 304     .140 027 322     .140 796 703     .141 574 586
5\1/4\......................................     .142 663 043     .143 442 623     .144 230 769     .145 027 624
5\3/8\......................................     .146 059 783     .146 857 923     .147 664 835     .148 480 663
5\1/2\......................................     .149 456 522     .150 273 224     .151 098 901     .151 933 702
5\5/8\......................................     .152 853 261     .153 688 525     .154 532 967     .155 386 748
5\3/4\......................................     .156 250 000     .157 103 825     .157 967 033     .158 839 706
5\7/8\......................................     .159 646 739     .160 519 126     .161 401 099     .162 292 876
6...........................................     .163 043 478     .163 934 426     .164 835 165     .165 745 856
6\1/8\......................................      166 440 217     .167 349 727     .168 269 231     .169 198 895
6\1/4\......................................     .169 836 957     .170 765 027     .171 703 297     .172 651 934
6\3/8\......................................     .173 233 696     .174 180 328     .175 137 363     .176 104 972
6\1/2\......................................     .176 630 435     .177 595 628     .178 571 429     .179 558 011
6\5/8\......................................     .180 027 174     .181 010 929     .182 005 495     .183 011 050
6\3/4\......................................     .183 423 913     .184 426 230     .185 439 560     .186 464 088
6\7/8\......................................     .186 820 652     .187 841 530     .188 873 626     .189 917 127
7...........................................     .190 217 391     .191 256 831     .192 307 692     .193 370 166
7\1/8\......................................     .193 614 130     .194 672 131     .195 741 758     .196 823 204
7\1/4\......................................     .197 010 870     .198 087 432     .199 175 824     .200 276 243
7\3/8\......................................     .200 407 609     .201 502 732     .202 609 890     .203 729 282
7\1/2\......................................     .203 804 348     .204 918 033     .206 043 956     .207 182 320
7\5/8\......................................     .207 201 087     .208 333 333     .209 478 022     .210 635 359
7\3/4\......................................     .210 597 826     .211 748 634     .212 912 088     .214 088 398
7\7/8\......................................     .213 994 565     .215 163 934     .216 346 154     .217 541 436
8...........................................     .217 391 304     .218 579 235     .219 780 220     .220 994 475
8\1/8\......................................     .220 788 043     .221 994 536     .223 214 286     .224 447 514
8\1/4\......................................     .224 184 783     .225 409 836     .226 648 352     .227 900 552
8\3/8\......................................     .227 581 522     .228 825 137     .230 082 418     .231 353 591

[[Page 146]]

 
8\1/2\......................................     .230 978 261     .232 240 437     .233 516 484     .234 806 630
8\5/8\......................................     .234 375 000     .235 655 738     .236 950 549     .238 259 669
8\3/4\......................................     .237 771 739     .239 071 038     .240 384 615     .241 712 707
8\7/8\......................................     .241 168 478     .242 486 339     .243 818 681     .245 165 746
9...........................................     .244 565 217     .245 901 639     .247 252 747     .248 618 785
9\1/8\......................................     .247 961 957     .249 316 940     .250 686 813     .252 071 823
9\1/4\......................................     .251 358 696     .252 732 240     .254 120 879     .255 524 862
9\3/8\......................................     .254 755 435     .256 147 541     .257 554 945     .258 977 901
9\1/2\......................................     .258 152 174     .259 562 842     .260 989 011     .262 430 939
9\5/8\......................................     .261 548 913     .262 978 142     .264 423 077     .265 883 978
9\3/4\......................................     .264 945 652     .266 393 443     .267 857 143     .269 337 017
9\7/8\......................................     .268 342 391     .269 808 743     .271 291 209     .272 790 055
10..........................................     .271 739 130     .273 224 044     .274 725 275     .276 243 094
10\1/8\.....................................     .275 135 870     .276 639 344     .278 159 341     .279 696 133
10\1/4\.....................................     .278 853 609     .280 054 645     .281 593 407     .283 149 171
10\3/8\.....................................     .281 929 348     .283 469 945     .285 027 473     .286 602 210
10\1/2\.....................................     .285 326 087     .286 885 246     .288 461 538     .290 055 249
10\5/8\.....................................     .288 722 826     .290 300 546     .291 895 604     .293 508 287
10\3/4\.....................................     .292 119 565     .293 715 847     .295 329 670     .296 961 326
10\7/8\.....................................     .295 516 304     .297 131 148     .298 763 736     .300 414 365
11..........................................     .298 913 043     .300 546 448     .302 197 802     .303 867 403
11\1/8\.....................................     .302 309 783     .303 961 749     .305 631 868     .307 320 442
11\1/4\.....................................     .305 706 522     .307 377 049     .309 065 934     .310 773 481
11\3/8\.....................................     .309 103 261     .310 792 350     .312 500 000     .314 226 519
11\1/2\.....................................     .312 500 000     .314 207 650     .315 934 066     .317 679 558
11\5/8\.....................................     .315 896 739     .317 622 951     .319 368 132     .321 132 597
11\3/4\.....................................     .319 293 478     .321 038 251     .322 802 198     .324 585 635
11\7/8\.....................................     .322 690 217     .324 453 552     .326 236 264     .328 038 674
12..........................................     .326 086 957     .327 868 852     .329 670 330     .331 491 713
----------------------------------------------------------------------------------------------------------------


  Table II--Decimal for 1 Day's Interest on $1,000 at Various Rates of
  Interest, Payable Annually or on an Annual Basis, in Regular Years of
                 365 Days and in Leap Years of 366 Days
------------------------------------------------------------------------
                                         Regular year,    Leap year, 366
       Rate per annum (percent)             365 days           days
------------------------------------------------------------------------
\1/8\.................................   $0.003 424 658   $0.003 415 301
\1/4\.................................     .006 849 315     .006 830 601
\3/8\.................................     .010 273 973     .010 245 902
\1/2\.................................     .013 698 630     .013 661 202
\5/8\.................................     .017 123 288     .017 076 503
\3/4\.................................     .020 547 945     .020 491 803
\7/8\.................................     .023 972 603     .023 907 104
1.....................................     .027 397 260     .027 322 404
1\1/8\................................     .030 821 918     .030 737 705
1\1/4\................................     .034 246 575     .034 153 005
1\3/8\................................     .037 671 233     .037 568 306
1\1/2\................................     .041 095 890     .040 983 607
1\5/8\................................     .044 520 548     .044 398 907
1\3/4\................................     .047 945 205     .047 814 208
1\7/8\................................     .051 369 863     .051 229 508
2.....................................     .054 794 521     .054 644 809
2\1/8\................................     .058 219 178     .058 060 109
2\1/4\................................     .061 643 836     .061 475 410
2\3/8\................................     .065 068 493     .064 890 710
2\1/2\................................     .068 493 151     .068 306 011
2\5/8\................................     .071 917 808     .071 721 311
2\3/4\................................     .075 342 466     .075 136 612
2\7/8\................................     .078 767 123     .078 551 913
3.....................................     .082 191 781     .081 967 213
3\1/8\................................     .085 616 438     .085 382 514
3\1/4\................................     .089 041 096     .088 797 814
3\3/8\................................     .092 465 753     .092 213 115
3\1/2\................................     .095 890 411     .095 628 415
3\5/8\................................     .099 315 068     .099 043 716
3\3/4\................................     .102 739 726     .102 459 016
3\7/8\................................     .106 164 384     .105 874 317
4.....................................     .109 589 041     .109 289 617
4\1/8\................................     .113 013 699     .112 704 918
4\1/4\................................     .116 438 356     .116 120 219
4\3/8\................................     .119 863 014     .119 535 519
4\1/2\................................     .123 287 671     .122 950 820
4\5/8\................................     .126 712 329     .126 366 120
4\3/4\................................     .130 136 986     .129 781 421
4\7/8\................................     .133 561 644     .133 196 721
5.....................................     .136 986 301     .136 612 022
5\1/8\................................     .140 410 959     .140 027 322
5\1/4\................................     .143 835 616     .143 442 623
5\3/8\................................     .147 260 274     .146 857 923
5\1/2\................................     .150 684 932     .150 273 224
5\5/8\................................     .154 109 589     .153 688 525
5\3/4\................................     .157 534 247     .157 103 825
5\7/8\................................     .160 958 904     .160 519 126
6.....................................     .164 383 562     .163 934 426
6\1/8\................................     .167 808 219     .167 349 727
6\1/4\................................     .171 232 877     .170 765 027
6\3/8\................................     .174 657 534     .174 180 328
6\1/2\................................     .178 082 192     .177 595 628
6\5/8\................................     .181 506 849     .181 010 929
6\3/4\................................     .184 931 507     .184 426 230

[[Page 147]]

 
6\7/8\................................     .188 356 164     .187 841 530
7.....................................     .191 780 822     .191 256 831
7\1/8\................................     .195 205 479     .194 672 131
7\1/4\................................     .198 630 137     .198 087 432
7\3/8\................................     .202 054 795     .201 502 732
7\1/2\................................     .205 479 452     .204 918 033
7\5/8\................................     .208 904 110     .208 333 333
7\3/4\................................     .212 328 767     .211 748 634
7\7/8\................................     .215 753 425     .215 163 934
8.....................................     .219 178 082     .218 579 235
8\1/8\................................     .222 602 740     .221 994 536
8\1/4\................................     .226 027 397     .225 409 836
8\3/8\................................     .229 452 055     .228 825 137
8\1/2\................................     .232 876 712     .232 240 437
8\5/8\................................     .236 301 370     .235 655 738
8\3/4\................................     .239 726 027     .239 071 038
8\7/8\................................     .243 150 685     .242 486 339
9.....................................     .246 575 342     .245 901 639
9\1/8\................................     .250 000 000     .249 316 940
9\1/4\................................     .253 424 658     .252 732 240
9\3/8\................................     .256 849 315     .256 147 541
9\1/2\................................     .260 273 973     .259 562 842
9\5/8\................................     .263 698 630     .262 978 142
9\3/4\................................     .267 123 288     .266 393 443
9\7/8\................................     .270 547 945     .269 808 743
10....................................     .273 972 603     .273 224 044
10\1/8\...............................     .277 397 260     .276 639 344
10\1/4\...............................     .280 821 918     .280 054 645
10\3/8\...............................     .284 246 575     .283 469 945
10\1/2\...............................     .287 671 233     .286 885 246
10\5/8\...............................     .291 095 890     .290 300 546
10\3/4\...............................     .294 520 548     .293 715 847
10\7/8\...............................     .297 945 205     .297 131 148
11....................................     .301 369 863     .300 546 448
11\1/8\...............................     .304 794 521     .303 961 749
11\1/4\...............................     .308 219 178     .307 377 049
11\3/8\...............................     .311 643 836     .310 792 350
11\1/2\...............................     .315 068 493     .314 207 650
11\5/8\...............................     .318 493 151     .317 622 951
11\3/4\...............................     .321 917 808     .321 038 251
11\7/8\...............................     .325 342 466     .324 453 552
12....................................     .328 767 123     .327 868 852
------------------------------------------------------------------------


[38 FR 7078, Mar. 15, 1973; 38 FR 8153, Mar. 29, 1973; 38 FR 10004, Apr. 
23, 1973, as amended at 44 FR 34125, June 14, 1979]



        Subpart F--Assignments of Registered Securities--General



Sec. 306.40  Execution of assignments.

    The assignment of a registered security should be executed by the 
owner, or his or her authorized representative, in the presence of an 
individual authorized to certify assignments. All assignments must be 
made on the backs of the securities, unless otherwise authorized by the 
Bureau. An assignment by mark (X) must be witnessed not only by a 
certifying individual, but also by at least one other person, who should 
add an endorsement substantially as follows: ``Witness to signature by 
mark,'' followed by the witness' signature and address.

[59 FR 59036, Nov. 15, 1994, as amended by 64 FR 38126, July 15, 1999]



Sec. 306.41  Form of assignment.

    Registered securities may be assigned in blank, to bearer, to a 
specified transferee, or to the Secretary of the Treasury for redemption 
or for exchange for other securities offered at maturity, upon call or 
pursuant to an advance refunding or prerefunding offer. Assignments to 
``The Secretary of the Treasury,'' ``The Secretary of the Treasury for 
transfer,'' or ``The Secretary of the Treasury for exchange'' will not 
be accepted unless supplemented by specific instructions by or in behalf 
of the owner.

[38 FR 7078, Mar. 15, 1973, as amended at 64 FR 38126, July 15, 1999]



Sec. 306.42  Alterations and erasures.

    If an alteration or erasure has been made in an assignment, the 
assignor should appear before an authorized certifying officer and 
execute a new assignment to the same assignee. If the new assignment is 
to other than the assignee whose name has been altered or erased, a 
disclaimer from the first-named assignee should be obtained. Otherwise, 
an affidavit of explanation by the person responsible for the alteration 
or erasure should be submitted for consideration.



Sec. 306.43  Voidance of assignments.

    An assignment of a security to or for the account of another person, 
not completed by delivery, may be voided by a disclaimer of interest 
from that person. This disclaimer should be executed in the presence of 
an officer authorized to certify assignments of securities. Unless 
otherwise authorized by the Bureau, the disclaimer must be written, 
typed, or stamped on the back of the security in substantially the 
following form:


[[Page 148]]


    The undersigned as assignee of this security hereby disclaims any 
interest herein.

                                                     (Signature)        

    I certify that the above-named person as described, whose identity 
is well known or proved to me, personally appeared before me the ------ 
day of ------------ (Month and year) at -------------------- (Place) and 
signed the above disclaimer of interest.
(seal)__________________________________________________________________
(Signature and official designation of   certifying officer)


In the absence of a disclaimer, an affidavit or affidavits should be 
submitted for consideration explaining why a disclaimer cannot be 
obtained, reciting all other material facts and circumstances relating 
to the transaction, including whether or not the security was delivered 
to the person named as assignee and whether or not the affiants know of 
any basis for the assignee claiming any right, title, or interest in the 
security. After an assignment has been voided, in order to dispose of 
the security, an assignment by or on behalf of the owner will be 
required.

[38 FR 7078, Mar. 15, 1973, as amended at 64 FR 38126, July 15, 1999]



Sec. 306.44  Discrepancies in names.

    The Department will ordinarily require an explanation of 
discrepancies in the names which appear in inscriptions, assignments, 
supporting evidence or in the signatures to any assignments. (Form PD 
385 may be used for this purpose.) However, where the variations in the 
name of the registered owner, as inscribed on securities of the same or 
different issues, are such that both may properly represent the same 
person, for example, ``J. T. Smith'' and ``John T. Smith,'' no proof of 
identity will be required if the assignments are signed exactly as the 
securities are inscribed and are duly certified by the same certifying 
officer.



Sec. 306.45  Certifying individuals.

    (a) General. The following individuals may certify assignments of, 
or forms with respect to, securities:
    (1) Officers and employees of depository institutions, corporate 
central credit unions, and institutions that are members of Treasury-
recognized signature guarantee programs who have been authorized:
    (i) Generally to bind their respective institutions by their acts;
    (ii) Unqualifiedly to guarantee signatures to assignments of 
securities; or
    (iii) To certify assignments of securities.
    (2) Officers and authorized employees of Federal Reserve Banks and 
branches.
    (3) Officers of Federal Land Banks, Federal Intermediate Credit 
Banks and Banks for Cooperatives, and Federal Home Loan Banks.
    (4) Commissioned officers and warrant officers of the Armed Forces 
of the United States but only with respect to signatures executed by 
Armed Forces personnel, civilian field employees, and members of their 
families.
    (5) U.S. Attorneys, Collectors of Customs, and Regional 
Commissioners, District Directors, and Service Center Directors, 
Internal Revenue Service.
    (6) Judges and Clerks of U.S. Courts.
    (7) Such other persons as the Commissioner of the Public Debt or his 
designee may authorize.
    (b) Foreign countries. The following individuals are authorized to 
certify assignments of, or forms with respect to, securities executed in 
a foreign country:
    (1) United States diplomatic or consular officials.
    (2) Managers and officers of foreign branches of depository 
institutions and institutions that are members of Treasury-recognized 
signature guarantee programs.
    (3) Notaries public and other officers authorized to administer 
oaths, provided their official position and authority are certified by a 
United States diplomatic or consular official under seal of the office.
    (c) Duties and liabilities of certifying individuals--(1) General. 
Except as specified in paragraph (c)(2) of this section, a certifying 
individual shall require that the security or related form be signed in 
the certifying individual's presence after he or she has established the 
identity of the person seeking the certification. An employee who is not

[[Page 149]]

an officer should insert the words ``Authorized signature'' in the space 
provided for the title. A certifying individual and the organization for 
which he or she is acting are jointly and severally liable for any loss 
the United States may incur as a result of the individual's negligence 
in making the certification.
    (2) Signature guaranteed. The assignment or related form need not be 
executed in the presence of a certifying individual if he or she 
unqualifiedly guarantees the signature, in which case the certifying 
individual shall, after the signature, add the following endorsement: 
``Signature guaranteed, First National Bank of Smithville, Smithville, 
NH, by A.B. Doe, President'', and add the date. In guaranteeing a 
signature, the certifying individual and the organization for which he 
or she is acting warrant to the Department that the signature is genuine 
and that the signer had the legal capacity to execute the assignment or 
related form.
    (3) Absence of signature guaranteed by depository institution. A 
security or related form need not be actually signed by the owner in any 
case where a certifying individual associated with a depository 
institution has placed an endorsement on the security or the form 
reading substantially as follows: ``Absence of signature by owner and 
validity of transaction guaranteed, Second State Bank of Jonesville, 
Jonesville, NC, by B.R. Butler, Vice President''. The endorsement should 
be dated, and the seal of the institution should be added. This form of 
endorsement is an unconditional guarantee to the Department that the 
institution is acting for the owner under proper authorization.
    (d) Evidence of certifying individual's authority. The authority of 
a certifying individual to act is evidenced by affixing to the 
certification the following:
    (1) Officers and employees of depository institutions. The 
institution's seal or signature guarantee stamp; if the institution is 
an authorized paying agent for U.S. Savings Bonds, a legible imprint of 
the paying agent's stamp; or, if the institution is a member of the 
Securities Transfer Agents Medallion Program (STAMP), a legible imprint 
of the STAMP signature guarantee stamp.
    (2) Officers and authorized employees of institutions that are 
members of Treasury-recognized signature guarantee programs. A legible 
imprint of the program's signature guarantee stamp, e.g., the STAMP, 
SEMP, or MSP stamp for members of the Securities Transfer Agents 
Medallion Program, the Stock Exchanges Medallion Program, or the New 
York Stock Exchange Incorporated Medallion Signature Program, 
respectively.
    (3) Officers and authorized employees of Federal Reserve Banks. 
Whatever is prescribed in procedures established by the Department.
    (4) Officers and employees of corporate central credit unions and 
other entities listed in paragraph (a)(3) of this section. The entity's 
seal.
    (5) Notaries public, diplomatic or consular officials. The official 
seal or stamp of the office. If the certifying individual has no seal or 
stamp, then the official's position must be certified by some other 
authorized individual, under seal or stamp, or otherwise proved to the 
satisfaction of the Department.
    (6) Commissioned or warrant officers of the United States Armed 
Forces. A statement which sets out the officer's rank and the fact that 
the person executing the assignment or form is one whose signature the 
officer is authorized to certify under the regulations in this part.
    (7) A judge or clerk of the court. The seal of the court.
    (8) Any other certifying individual. The official seal or stamp of 
the office. If the certifying individual has no seal or stamp, then the 
certifying individual's position and signature must be certified by some 
other authorized individual under official seal or stamp, or otherwise 
proved to the satisfaction of the Department.
    (e) Interested persons not to act as certifying individual. Neither 
the transferor, the transferee, nor any person having an interest in a 
security involved in the transaction may act as a certifying individual. 
However, an authorized officer or employee of a depository institution 
or of an institution that is a member of a Treasury-recognized signature

[[Page 150]]

guarantee program may act as a certifying individual on a security or 
related form for transfer of a security to the institution, or any 
security or related form executed by another individual on behalf of the 
institution.

[59 FR 59037, Nov. 15, 1994]



          Subpart G--Assignments by or in Behalf of Individuals



Sec. 306.55  Signatures, minor errors and change of name.

    The owner's signature to an assignment should be in the form in 
which the security is inscribed or assigned, unless such inscription or 
assignment is incorrect or the name has since been changed. In case of a 
change of name, the signature to the assignment should show both names 
and the manner in which the change was made, for example, ``John Young, 
changed by order of court from Hans Jung.'' Evidence of the change will 
be required. However, no evidence is required to support an assignment 
if the change resulted from marriage and the signature, which must be 
duly certified by an authorized officer, is written to show that fact, 
for example, ``Mrs. Mary J. Brown, changed by marriage from Miss Mary 
Jones.''



Sec. 306.56  Assignment of securities registered in the names of or assigned to two or more persons.

    (a) Transfer or exchange. Securities registered in the names of or 
assigned to two or more persons may be transferred during the lives of 
all the joint owners only upon assignments by all or on their behalf by 
authorized representatives. Upon proof of the death of one, the 
Department will accept an assignment by or in behalf of the survivor or 
survivors, unless the form of registration or assignment includes words 
which precludes the right of survivorship.\9\ In the latter case, in 
addition to assignment by or in behalf of the survivor or survivors, an 
assignment in behalf of the decedent's estate will be required.
---------------------------------------------------------------------------

    \9\ See Sec. 306.11(a) (2) for forms of registration expressing or 
precluding survivorship.
---------------------------------------------------------------------------

    (b) Advance refunding or prerefunding offers. No assignments are 
required for exchange of securities registered in the names of or 
assigned to two or more persons if the securities to be received in the 
exchange are to be registered in the same names and form. If securities 
in a different form are to be issued, all persons named must assign, 
except that in case of death paragraph (a) of this section shall apply.
    (c) Redemption or redemption-exchange--(1) Alternative registration 
or assignment. Securities registered in the names of or assigned to two 
or more persons in the alternative, for example, ``John B. Smith or Mrs. 
Mary J. Smith'' or ``John B. Smith or Mrs. Mary J. Smith or the 
survivor,'' may be assigned by one of them at maturity or upon call, for 
redemption or redemption-exchange, for his own account or otherwise, 
whether or not the other joint owner or owners are deceased.
    (2) Joint registration or assignment. Securities registered in the 
names of or assigned to two or more persons jointly, for example, ``John 
B. Smith and Mrs. Mary J. Smith,'' or ``John B. Smith and Mrs. Mary J. 
Smith as tenants in common,'' or ``John B. Smith and Mary J. Smith as 
partners in community,'' may be assigned by one of them during the lives 
of all only for redemption at maturity or upon call, and then only for 
redemption for the account of all. No assignments are required for 
redemption-exchange for securities to be registered in the same names 
and forms as appear in the registration or assignment of the securities 
surrendered. Upon proof of the death of a joint owner, the survivor or 
survivors may assign securities so registered or assigned for redemption 
or redemption-exchange for any account, except that, if words which 
preclude the right of survivorship \9\ appear in the registration or 
assignment, assignment in behalf of the decedent's estate also will be 
required.

[38 FR 7078, Mar. 15, 1973, as amended at 64 FR 38126, July 15, 1999]



Sec. 306.57  Minors and incompetents.

    (a) Assignments by natural guardian of securities registered in name 
of minor. Securities registered in the name of a minor for whose estate 
no legal guardian or similar representative has qualified may be 
assigned by the natural

[[Page 151]]

guardian upon qualification. (Form PD 2481 may be used for this 
purpose.)
    (b) Assignments of securities registered in name of natural guardian 
of minor. Securities registered in the name of a natural guardian of a 
minor may be assigned by the natural guardian for any authorized 
transaction except one for the apparent benefit of the natural guardian. 
If the natural guardian in whose name the securities are registered is 
deceased or is no longer qualified to act as natural guardian, the 
securities may be assigned by the person then acting as natural 
guardian. The assignment by the new natural guardian should be supported 
by proof of the death or disqualification of the former natural guardian 
and by evidence of his own status as natural guardian. (Form PD 2481 may 
be used for this purpose.) No assignment by a natural guardian will be 
accepted after receipt of notice of the minor's attainment of majority, 
removal of his disability of minority, disqualification of the natural 
guardian to act as such, qualification of a legal guardian or similar 
representative, or the death of the minor.
    (c) Assignments by voluntary guardian of incompetents. Registered 
securities belonging to an incompetent for whose estate no legal 
guardian or similar representative is legally qualified may be assigned 
by the relative responsible for his care and support or some other 
person as voluntary guardian:
    (1) For redemption, if the proceeds of the securities are needed to 
pay expenses already incurred, or to be incurred during any 90-day 
period, for the care and support of the incompetent or his legal 
dependents.
    (2) For redemption-exchange, if the securities are matured or have 
been called, or pursuant to an advance refunding or prerefunding offer, 
for reinvestment in other securities to be registered in the form ``A, 
an incompetent (123-45-6789) under voluntary guardianship.''

An application on Form PD 1461 by the person seeking authority to act as 
voluntary guardian will be required.
    (d) Assignments by legal guardians of minors or incompetents. 
Securities registered in the name and title of the legal guardian or 
similar representative of the estate of a minor or incompetent may be 
assigned by the representative for any authorized transaction without 
proof of his qualification. Assignments by a representative of any other 
securities belonging to a minor or incompetent must be supported by 
properly certified evidence of qualification. The evidence must be dated 
not more than 1 year before the date of the assignments and must contain 
a statement showing the appointment is in full force unless (1) it shows 
the appointment was made not more than 1 year before the date of the 
assignment, or (2) the representative or a corepresentative is a 
corporation. An assignment by the representative will not be accepted 
after receipt of notice of termination of the guardianship, except for 
transfer to the former ward.

[38 FR 7078, Mar. 15, 1973, as amended at 64 FR 38126, July 15, 1999]



Sec. 306.58  Nontransferable securities.

    The provisions of this subpart, so far as applicable, govern 
transactions in Treasury Bonds, Investment Series B- 1975-80.



     Subpart H--Assignments in Behalf of Estates of Deceased Owners



Sec. 306.65  Special provisions applicable to small amounts of securities, interest checks or redemption checks.

    Entitlement to, or the authority to dispose of, a small amount of 
securities and checks issued in payment thereof or in payment of 
interest thereon, belonging to the estate of a decedent, may be 
established through the use of certain short forms, according to the 
aggregate amount of securities and checks involved (excluding checks 
representing interest on the securities), as indicated by the following 
table:

------------------------------------------------------------------------
Amount      Circumstances             Form           To be executed by--
------------------------------------------------------------------------
  $100  No administration...  PD2216..............  Person who paid
                                                     burial expenses.
   500  Estate being          PD2488..............  Executor or
         administered.                               administrator.
   500  Estate settled......  PD2458-1............  Former executor or
                                                     administrator,
                                                     attorneys or other
                                                     qualified person.
------------------------------------------------------------------------


[[Page 152]]



Sec. 306.66  Estates--administration.

    (a) Temporary or special administrators. Temporary or special 
administrators may assign securities for any authorized transaction 
within the scope of their authority. The assignments must be supported 
by:
    (1) Temporary administrators. A certificate, under court seal, 
showing the appointment in full force within thirty days preceding the 
date of receipt of the securities.
    (2) Special administrators. A certificate, under court seal, showing 
the appointment in full force within 6 months preceding the date of 
receipt of the securities.

Authority for assignments for transactions not within the scope of 
appointment must be established by a duly certified copy of a special 
order of court.
    (b) In course of administration. A security belonging to the estate 
of a decedent which is being administered by a duly qualified executor 
or general administrator will be accepted for any authorized transaction 
upon assignment by such representative. (See Sec. 306.77.) Unless the 
security is registered in the name of and shows the capacity of the 
representative, the assignment must be supported by a certificate or a 
copy of the letters of appointment, certified under court seal. The 
certificate or certification, if required, must be dated not more than 6 
months before the date of the assignment and must contain a statement 
that the appointment is in full force, unless:
    (1) It shows the appointment was made not more than 1 year before 
the date of the assignment, or
    (2) The representative or a corepresentative is a corporation, or
    (3) Redemption is being made for application of the proceeds in 
payment of Federal estate taxes as provided by Sec. 306.28.
    (c) After settlement through court proceedings. Securities belonging 
to the estate of a decedent which has been settled in court will be 
accepted for any authorized transaction upon assignments by the person 
or persons entitled, as determined by the court. The assignments should 
be supported by a copy, certified under court seal, of the decree of 
distribution, the representative's final account as approved by the 
court, or other pertinent court records.



Sec. 306.67  Estates not administered.

    (a) Special provisions under State laws. If, under State law, a 
person has been recognized or appointed to receive or distribute the 
assets of a decedent's estate without regular administration, his 
assignment of securities belonging to the estate will be accepted 
provided he submits appropriate evidence of his authority.
    (b) Agreement of persons entitled. When it appears that no legal 
representative of a decedent's estate has been or is to be appointed, 
securities belonging to the estate may be duly disposed of pursuant to 
an agreement and assignment by all persons entitled to share in the 
decedent's personal estate. (Form PD 1646 may be used.) However, all 
debts of the decedent and his estate must be paid or provided for and 
the interests of any minors or incompetents must be protected.



Sec. 306.68  Nontransferable securities.

    The provisions of this subpart, so far as applicable, govern 
transactions in Treasury Bonds, Investment Series B- 1975-80.



     Subpart I--Assignments by or in Behalf of Trustees and Similar 
                               Fiduciaries



Sec. 306.75  Individual fiduciaries.

    (a) General. Securities registered in, or assigned to, the names and 
titles of individual fiduciaries will be accepted for any authorized 
transaction upon assignment by the designated fiduciaries without proof 
of their qualification. If the fiduciaries in whose names the securities 
are registered, or to whom they have been assigned, have been succeeded 
by other fiduciaries, evidence of successorship must be furnished. If 
the appointment of a successor is not required under the terms of the 
trust instrument or otherwise and is not contemplated, assignments by 
the surviving or remaining fiduciary or fiduciaries must be supported by 
appropriate proof. This requires:

[[Page 153]]

    (1) Proof of the death, resignation, removal or disqualification of 
the former fiduciary and
    (2) Evidence that the surviving or remaining fiduciary or 
fiduciaries are fully qualified to administer the fiduciary estate, 
which may be in the form of a certificate by them showing the 
appointment of a successor has not been applied for, is not contemplated 
and is not necessary under the terms of the trust instrument or 
otherwise.

Assignments of securities registered in the titles, without the names of 
the fiduciaries, for example, ``Trustees of the George E. White Memorial 
Scholarship Fund under deed of trust dated 11/10/40, executed by John W. 
White,'' must be supported by proof that the assignors are the qualified 
and acting trustees of the designated trust estate, unless they are 
empowered to act as a unit in which case the provisions of Sec. 306.76 
shall apply. (Form PD 2446 may be used to furnish proof of incumbency of 
fiduciaries.) Assignments by fiduciaries of securities not registered or 
assigned in such manner as to show that they belong to the estate for 
which the assignors are acting must also be supported by evidence that 
the estate is entitled to the securities.
    (b) Life tenants. Upon termination of a life estate by reason of the 
death of the life tenant in whose name a security is registered, or to 
whom it has been assigned, the security will be accepted for any 
authorized transaction upon assignment by the remainderman, supported by 
evidence of entitlement.



Sec. 306.76  Fiduciaries acting as a unit.

    Securities registered in the name of or assigned to a board, 
committee or other body authorized to act as a unit for any public or 
private trust estate may be assigned for any authorized transaction by 
anyone authorized to act in behalf of such body. Except as otherwise 
provided in this section, the assignments must be supported by a copy of 
a resolution adopted by the body, properly certified under its seal, or, 
if none, sworn to by a member of the body having access to its records. 
(Form PD 2495 may be used.) If the person assigning is designated in the 
resolution by title only, his incumbency must be duly certified by 
another member of the body. (Form PD 2446 may be used.) If the 
fiduciaries of any trust estate are empowered to act as a unit, although 
not designated as a board, committee or other body, securities 
registered in their names or assigned to them as such, or in their 
titles without their names, may be assigned by anyone authorized by the 
group to act in its behalf. Such assignments may be supported by a sworn 
copy of a resolution adopted by the group in accordance with the terms 
of the trust instrument, and proof of their authority to act as a unit 
may be required. As an alternative, assignments by all the fiduciaries, 
supported by proof of their incumbency, if not named on the securities, 
will be accepted.

[38 FR 7078, Mar. 15, 1973; 38 FR 10004, Apr. 23, 1973]



Sec. 306.77  Corepresentatives and fiduciaries.

    If there are two or more executors, administrators, guardians or 
similar representatives, or trustees of an estate, all must unite in the 
assignment of any securities belonging to the estate. However, when a 
statute, a decree of court, or the instrument under which the 
representatives or fiduciaries are acting provides otherwise, 
assignments in accordance with their authority will be accepted. If the 
securities have matured or been called and are submitted for redemption 
for the account of all, or for redemption-exchange or pursuant to an 
advance refunding or prerefunding offer, and the securities offered in 
exchange are to be registered in the names of all, no assignment is 
required.



Sec. 306.78  Nontransferable securities.

    The provisions of this subpart, so far as applicable, govern 
assignments of Treasury Bonds, Investment Series B- 1975-80.

[[Page 154]]



   Subpart J--Assignments in Behalf of Private or Public Organizations



Sec. 306.85  Private corporations and unincorporated associations (including nominees).

    Securities registered in the name of, or assigned to, an 
unincorporated association, or a private corporation in its own right or 
in a representative or fiduciary capacity, or as nominee, may be 
assigned in its behalf for any authorized transaction by any duly 
authorized officer or officers. Evidence, in the form of a resolution of 
the governing body, authorizing the assigning officer to assign, or to 
sell, or to otherwise dispose of the securities will ordinarily be 
required. Resolutions may relate to any or all registered securities 
owned by the organization or held by it in a representative or fiduciary 
capacity. (Form PD 1010, or any substantially similar form, may be used 
when the authority relates to specific securities; Form PD 1011, or any 
substantially similar form, may be used for securities generally.) If 
the officer derives his authority from a charter, constitution or 
bylaws, a copy, or a pertinent extract therefrom, properly certified, 
will be required in lieu of a resolution. If the resolution or other 
supporting document shows the title of an authorized officer, without 
his name, it must be supplemented by a certificate of incumbency. (Form 
PD 1014 may be used.)



Sec. 306.86  Change of name and succession of private organizations.

    If a private corporation or unincorporated association changes its 
name or is lawfully succeeded by another corporation or unincorporated 
association, its securities may be assigned in behalf of the 
organization in its new name or that of its successor by an authorized 
officer in accordance with Sec. 306.85. The assignment must be supported 
by evidence of the change of name or successorship.



Sec. 306.87  Partnerships (including nominee partnerships).

    An assignment of a security registered in the name of or assigned to 
a partnership must be executed by a general partner. Upon dissolution of 
a partnership, assignment by all living partners and by the persons 
entitled to assign in behalf of any deceased partner's estate will be 
required unless the laws of the jurisdiction authorize a general partner 
to bind the partnership by any act appropriate for winding up 
partnership affairs. In those cases where assignments by or in behalf of 
all partners are required this fact must be shown in the assignment; 
otherwise, an affidavit by a former general partner must be furnished 
identifying all the persons who had been partners immediately prior to 
dissolution. Upon voluntary dissolution, for any jurisdiction where a 
general partner may not act in winding up partnership affairs, an 
assignment by a liquidating partner, as such, must be supported by a 
duly executed agreement among the partners appointing the liquidating 
partner.



Sec. 306.88  Political entities and public corporations.

    Securities registered in the name of, or assigned to, a State, 
county, city, town, village, school district or other political entity, 
public body or corporation, may be assigned by a duly authorized 
officer, supported by evidence of his authority.



Sec. 306.89  Public officers.

    Securities registered in the name of, or assigned to, a public 
officer designated by title may be assigned by such officer, supported 
by evidence of incumbency. Assignments for the officer's own apparent 
individual benefit will not be recognized.



Sec. 306.90  Nontransferable securities.

    The provisions of this subpart apply to Treasury Bonds, Investment 
Series B-1975-80.



                      Subpart K--Attorneys in Fact



Sec. 306.95  Attorneys in fact.

    (a) General. Assignments by an attorney in fact will be recognized 
if supported by an adequate power of attorney. Every power must be 
executed in the presence of an authorized certifying officer under the 
conditions set

[[Page 155]]

out in Sec. 306.45 for certification of assignments. Powers need not be 
submitted to support redemption-exchanges or exchanges pursuant to 
advance refunding or prefunding offers where the securities to be issued 
are to be registered in the same names and forms as appear in the 
inscriptions or assignments of the securities surrendered. In all other 
cases, the original power, or a photocopy showing the grantor's 
autograph signature, properly certified, must be submitted, together 
with the security assigned on the owner's behalf by the attorney in 
fact. An assignment by a substitute attorney in fact must be supported 
by an authorizing power of attorney and power of substitution. An 
assignment by an attorney in fact or a substitute attorney in fact for 
the apparent benefit of either will not be accepted unless expressly 
authorized. (Form PD 1001 or 1003, as appropriate, may be used to 
appoint an attorney in fact. An attorney in fact may use Form PD 1006 or 
1008 to appoint a substitute. However, any form sufficient in substance 
may be used.) If there are two or more joint attorneys in fact or 
substitutes, all must unite in an assignment, unless the power 
authorizes less than all to act. A power of attorney or of substitution 
not coupled with an interest will be recognized until the Bureau 
receives proof of revocation or proof of the grantor's death or 
incompetency.
    (b) For legal representatives and fiduciaries. Assignments by an 
attorney in fact or substitute attorney in fact for a legal 
representative or fiduciary, in addition to the power of attorney and of 
substitution, must be supported by evidence, if any, as required by 
Secs. 306.57(d), 306.66(b), 306.75, and 306.76. Powers must specifically 
designate the securities to be assigned.
    (c) For corporations or unincorporated associations. Assignments by 
an attorney in fact or a substitute attorney in fact in behalf of a 
corporation or unincorporated association, in addition to the power of 
attorney and power of substitution, must be supported by one of the 
following documents certified under seal of the organization, or, if it 
has no seal, sworn to by an officer who has access to the records:
    (1) A copy of the resolution of the governing body authorizing an 
officer to appoint an attorney in fact, with power of substitution, if 
pertinent, to assign, or to sell, or to otherwise dispose of, the 
securities, or
    (2) A copy of the charter, constitution, or bylaws, or a pertinent 
extract therefrom, showing the authority of an officer to appoint an 
attorney in fact, or
    (3) A copy of the resolution of the governing body directly 
appointing an attorney in fact.

If the resolution or other supporting document shows only the title of 
the authorized officer, without his name, a certificate of incumbency 
must also be furnished. (Form PD 1014 may be used.) The power may not be 
broader than the resolution or other authority.
    (d) For public corporations. A general power of attorney in behalf 
of a public corporation will be recognized only if it is authorized by 
statute.



Sec. 306.96  Nontransferable securities.

    The provisions of this subpart shall apply to nontransferable 
securities, subject only to the limitations imposed by the terms of the 
particular issues.



            Subpart L--Transfer Through Judicial Proceedings



Sec. 306.100  Transferable securities.

    The Department will recognize valid judicial proceedings affecting 
the ownership of or interest in transferable securities, upon 
presentation of the securities together with evidence of the 
proceedings. In the case of securities registered in the names of two or 
more persons, the extent of their respective interests in the securities 
must be determined by the court in proceedings to which they are parties 
or must otherwise be validly established.\10\
---------------------------------------------------------------------------

    \10\ Title in a finder claiming ownership of a registered security 
will not be recognized. A finder claiming ownership of a bearer security 
or a registered security assigned in blank or so assigned as to become 
in effect payable to bearer must perfect his title in accordance with 
the provisions of State law. If there are no such provisions, the 
Department will not recognize his title to the security.

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

[[Page 156]]



Sec. 306.101  Evidence required.

    Copies of a final judgment, decree, or order of court and of any 
necessary supplementary proceedings must be submitted. Assignments by a 
trustee in bankruptcy or a receiver of an insolvent's estate must be 
supported by evidence of his qualification. Assignments by a receiver in 
equity or a similar court officer must be supported by a copy of an 
order authorizing him to assign, or to sell, or to otherwise dispose of, 
the securities. Where the documents are dated more than 6 months prior 
to presentation of the securities, there must also be submitted a 
certificate dated within 6 months of presentation of the securities, 
showing the judgment, decree, or order, or evidence of qualification, is 
in full force. Any such evidence must be certified under court seal.



Sec. 306.102  Nontransferable securities.

    The provisions of this subpart shall apply to Treasury Bonds, 
Investment Series B-1975-80, except that prior to maturity any reference 
to assignments shall be deemed to refer to assignments of the bonds for 
exchange for the current series of 1\1/2\ percent 5-year EA or EO 
Treasury notes.



           Subpart M--Requests for Suspension of Transactions



Sec. 306.105  Requests for suspension of transactions in registered securities.

    (a) Timely notice. If prior to the time a registered security 
bearing an apparently valid assignment has been functioned, a claim is 
received from the owner or his authorized representative showing that:
    (1) The security was lost, stolen, or destroyed and that it was 
unassigned, or not so assigned as to have become in effect payable to 
bearer, or
    (2) The assignment was affected by fraud, the transaction for which 
the security was received will be suspended.

The interested parties will be given a reasonable period of time in 
which to effect settlement of their interests by agreement, or to 
institute judicial proceedings.
    (b) Late notice. If, after a registered security has been 
transferred, exchanged, or redeemed in reliance on an apparently valid 
assignment, an owner notifies the Bureau that the assignment was 
affected by fraud or that the security had been lost or stolen, the 
Department will undertake only to furnish available information.
    (c) Forged assignments. A claim that an assignment of a registered 
security is a forgery will be investigated. If it is established that 
the assignment was in fact forged and that the owner did not authorize 
or ratify it, or receive any benefit therefrom, the Department will 
recognize his ownership and grant appropriate relief.



Sec. 306.106  Requests for suspension of transactions in bearer securities.

    (a) Securities not overdue. Neither the Department nor any of its 
agents will accept notice of any claim or of pending judicial 
proceedings by any person for the purpose of suspending transactions in 
bearer securities, or registered securities so assigned as to become in 
effect payable to bearer which are not overdue as defined in 
Sec. 306.25.\11\

[[Page 157]]

However, if the securities are received and retired, the department will 
undertake to notify persons who appear to be entitled to any available 
information concerning the source from which the securities were 
received.
---------------------------------------------------------------------------

    \11\ It has been the longstanding policy of the Department to assume 
no responsibility for the protection of bearer securities not in the 
possession of persons claiming rights therein and to give no effect to 
any notice of such claims. This policy was formalized on April 27, 1867, 
when the Secretary of the Treasury issued the following statement:
    ``In consequence of the increasing trouble, wholly without practical 
benefit, arising from notices which are constantly received at the 
Department respecting the loss of coupon bonds, which are payable to 
bearer, and of Treasury notes issued and remaining in blank at the time 
of loss, it becomes necessary to give this public notice, that the 
Government cannot protect and will not undertake to protect the owners 
of such bonds and notes against the consequences of their own fault or 
misfortune.''
    ``Hereafter all bonds, notes, and coupons, payable to bearer, and 
Treasury notes issued and remaining in blank, will be paid to the party 
presenting them in pursuance of the regulations of the Department, in 
the course of regular business; and no attention will be paid to caveats 
which may be filed for the purpose of preventing such payment.''
---------------------------------------------------------------------------

    (b) Overdue securities. Reports that bearer securities, or 
registered securities so assigned as to become in effect payable to 
bearer, were lost, stolen, or possibly destroyed after they became 
overdue as defined in Sec. 306.25 will be accepted by the Bureau for the 
purpose of suspending redemption of the securities if the claimant 
establishes his interest. If the securities are presented, their 
redemption will be suspended and the presenter and the claimant will 
each be given an opportunity to establish ownership.



     Subpart N--Relief for Loss, Theft, Destruction, Mutilation, or 
                        Defacement of Securities



Sec. 306.110  Statutory authority and requirements.

    Relief is authorized, under certain conditions, for the loss, theft, 
destruction, mutilation or defacement of U.S. securities, whether 
before, at, or after maturity. A bond of indemnity, in such form and 
with such surety, sureties or security as may be required to protect the 
interests of the United States, is required as a condition of relief on 
account of any bearer security or any registered security assigned in 
blank or so assigned as to become in effect payable to bearer, and is 
ordinarily required in the case of unassigned registered securities.



Sec. 306.111  Procedure for applying for relief.

    Prompt report of the loss, theft, destruction, mutilation or 
defacement of a security should be made to the Bureau. The report should 
include:
    (a) The name and present address of the owner and his address at the 
time the security was issued, and, if the report is made by some other 
person, the capacity in which he represents the owner.
    (b) The identity of the security by title of loan, issue date, 
interest rate, serial number and denomination, and in the case of a 
registered security, the exact form of inscription and a full 
description of any assignment, endorsement or other writing.
    (c) A full statement of the circumstances.

All available portions of a mutilated, defaced or partially destroyed 
security must also be submitted.



Sec. 306.112  Type of relief granted.

    (a) Prior to call or maturity. After a claim on account of the loss, 
theft, destruction, mutilation, or defacement of a security which has 
not matured or been called has been satisfactorily established and the 
conditions for granting relief have been met, a security of like 
description will be issued to replace the original security.
    (b) At or after call or maturity. Payment will be made on account of 
the loss, theft, destruction, mutilation, or defacement of a called or 
matured security after the claim has been satisfactorily established and 
the conditions for granting relief have been met.
    (c) Interest coupons. Where relief has been authorized on account of 
a destroyed, mutilated or defaced coupon security which has not matured 
or been called, the replacement security will have attached all 
unmatured interest coupons if it is established to the satisfaction of 
the Secretary of the Treasury that the coupons were attached to the 
original security at the time of its destruction, mutilation or 
defacement. In every other case only those unmatured interest coupons 
for which the Department has received payment will be attached. The 
price of the coupons will be their value as determined by the Department 
at the time relief is authorized using interest rate factors based on 
then current market yields on Treasury securities of comparable 
maturities.



Sec. 306.113  Cases not requiring bonds of indemnity.

    A bond of indemnity will not be required as a condition of relief 
for the loss, theft, destruction, mutilation, or defacement of 
registered securities in any of the following classes of cases unless 
the Secretary of the Treasury deems it essential in the public interest:

[[Page 158]]

    (a) If the loss, theft, destruction, mutilation, or defacement, as 
the case may be, occurred while the security was in the custody or 
control of the United States, or a duly authorized agent thereof (not 
including the Postal Service when acting solely in its capacity as 
public carrier of the mails), or while in the course of shipment 
effected under regulations issued pursuant to the Government Losses in 
Shipment Act (parts 260, 261, and 262 of this chapter).
    (b) If substantially the entire security is presented and 
surrendered and the Security of the Treasury is satisfied as to the 
identity of the security and that any missing portions are not 
sufficient to form the basis of a valid claim against the United States.
    (c) If the security is one which by the provisions of law or by the 
terms of its issue is nontransferable or is transferable only by 
operation of law.
    (d) If the owner or holder is the United States, a Federal Reserve 
bank, a Federal Government corporation, a State, the District of 
Columbia, a territory or possession of the United States, a municipal 
corporation, or, if applicable, a political subdivision of any of the 
foregoing, or a foreign government.



                     Subpart O--Book-Entry Procedure



Sec. 306.115  Definition of terms.

    For the purposes of this subpart, the definitions provided in 31 CFR 
357.3 are applicable, with the following additions:
    Definitive Treasury security means a Treasury bond, note, 
certificate of indebtedness, or bill issued under 31 U.S.C. chapter 31 
in engraved or printed form.
    Eligible book-entry Treasury security means a security maintained in 
TRADES that was originally issued prior to August 15, 1986, which by the 
terms of its offering circular is available in either definitive or 
book-entry form.

[61 FR 43637, Aug. 23, 1996]



Sec. 306.116  Scope and effect of book-entry procedure.

    (a) Except as provided in Sec. 306.117, the provisions of 31 CFR 
part 357, subparts A, B, and D apply.
    (b) This subpart is effective January 1, 1997.

[61 FR 43637, Aug. 23, 1996]



Sec. 306.117  Withdrawal of eligible book-entry Treasury securities for conversion to registered form.

    (a) Eligible book-entry Treasury securities may be withdrawn from 
TRADES by requesting delivery of like definitive Treasury securities.
    (b) Public Debt shall, upon receipt of appropriate instructions to 
withdraw eligible book-entry Treasury securities from book-entry form in 
TRADES, convert such securities into registered Treasury securities and 
deliver them in accordance with such instructions; no such conversion 
shall affect existing interests in such Treasury securities.
    (c) All requests for withdrawal of eligible book-entry Treasury 
securities must be made prior to the maturity or date of call of the 
securities.
    (d) Treasury securities which are to be delivered upon withdrawal 
may be issued in registered form, to the extent permitted by the 
applicable offering circular.

[61 FR 43637, Aug. 23, 1996; 64 FR 38126, July 15, 1999]



                   Subpart P--Miscellaneous Provisions



Sec. 306.125  Additional requirements.

    In any case or any class of cases arising under these regulations 
the Secretary of the Treasury may require such additional evidence and a 
bond of indemnity, with or without surety, as may in his judgment be 
necessary for the protection of the interests of the United States.



Sec. 306.126  Waiver of regulations.

    The Secretary of the Treasury reserves the right, in his discretion, 
to

[[Page 159]]

waive or modify any provision or provisions of these regulations in any 
particular case or class of cases for the convenience of the United 
States or in order to relieve any person or persons of unnecessary 
hardship, if such action is not inconsistent with law, does not impair 
any existing rights, and he is satisfied that such action would not 
subject the United States to any substantial expense or liability.



Sec. 306.127  Preservation of existing rights.

    Nothing contained in these regulations shall limit or restrict 
existing rights which holders of securities heretofore issued may have 
acquired under the circulars offering such securities for sale or under 
the regulations in force at the time of acquisition.



Sec. 306.128  Supplements, amendments or revisions.

    The Secretary of the Treasury may at any time, or from time to time, 
prescribe additional supplemental, amendatory or revised regulations 
with respect to U.S. securities. The Secretary also may lower the 
minimum and multiple requirements for stripping marketable Treasury 
notes and bonds issued prior to March 1, 1993, through an announcement 
as provided in Sec. 356.31 of this title.

[65 FR 66175, Nov. 3, 2000]



PART 308--GENERAL REGULATIONS GOVERNING FULL-PAID INTERIM CERTIFICATES--Table of Contents




Sec.
308.1  Issue.
308.2  Exchange for definitive securities.
308.3  Exchanges of denominations.
308.4  Applicable regulations.
308.5  Reservations.

    Authority: 80 Stat. 379; sec. 8. 50 Stat. 481, as amended; secs. 1, 
18, 5, 40 Stat. 288, as amended, 1309, as amended, 290, as amended; sec. 
32, 30 Stat. 466, as amended; 5 U.S.C. 301; 31 U.S.C. 738a, 752, 753, 
754, 756.

    Source: 6 FR 5289, Oct. 17, 1941, unless otherwise noted.



Sec. 308.1  Issue.

    Federal Reserve Banks, as Fiscal Agents of the United States, and 
the Treasury Department may issue full-paid interim certificates in lieu 
of definitive securities, against full-paid allotments of subscriptions, 
when specifically authorized by the Secretary of the Treasury in 
connection with the issue, hereafter, to the public, of United States 
securities. Interim certificates shall be in such form, and in such 
denominations, as the Secretary of the Treasury may determine when an 
issue is authorized.



Sec. 308.2  Exchange for definitive securities.

    Upon surrender of a full-paid interim certificate to a Federal 
Reserve Bank, or to the Treasury Department, Washington, DC 20226, the 
definitive securities described therein, when prepared, will be 
delivered. Exchanges shall be made on like par amount basis.



Sec. 308.3  Exchanges of denominations.

    Pending availability of definitive securities, exchanges of 
authorized denominations of interim certificates, from higher to lower 
will be permitted.



Sec. 308.4  Applicable regulations.

    Except as may otherwise be provided, and in so far as applicable, 
the general regulations of the Treasury Department, as contained in part 
306 of this subchapter, as amended or revised, shall apply to full-paid 
interim certificates.



Sec. 308.5  Reservations.

    The Secretary of the Treasury reserves the right to withdraw or 
amend at any time or from time to time any or all of the provisions of 
this part.



PART 309--ISSUE AND SALE OF TREASURY BILLS--Table of Contents




Sec.
309.1  Authority for issue and sale.
309.2  Description of Treasury bills (General).
309.3  Denominations and exchange.
309.4  Taxation.
309.5  Acceptance of Treasury bills for various purposes.
309.6  Public notice of offering.
309.7  Tenders; submission through Federal Reserve Banks and branches 
          and to the Bureau of the Public Debt.
309.8  Tenders; when cash deposit is required.

[[Page 160]]

309.9  Tenders; acceptance by the Secretary of the Treasury.
309.10  Tenders; reservation of right to reject.
309.11  Tenders; payment of accepted tenders.
309.12  Relief on account of loss, theft or destruction, etc.
309.13  Functions of Federal Reserve Banks.
309.14  Reservation as to terms of circular.

    Authority: 80 Stat. 379; sec. 8, 50 Stat. 481, as amended; sec. 5, 
40 Stat. 290, as amended; 5 U.S.C. 301; 31 U.S.C. 738a, 754.

    Source: 41 FR 44006, Oct. 5, 1976, unless otherwise noted.



Sec. 309.1  Authority for issue and sale.

    The Secretary of the Treasury is authorized by the Second Liberty 
Bond Act, as amended, to issue Treasury bills of the United States on an 
interest-bearing basis, on a discount basis, or on a combination 
interest-bearing and discount basis, at such price or prices and with 
interest computed in such manner and payable at such time or times as he 
may prescribe; and to fix the form, terms, and conditions thereof, and 
to offer them for sale on a competitive or other basis, under such 
regulations and upon such terms and conditions as he may prescribe. 
Pursuant to said authorization, the Secretary of the Treasury may, from 
time to time, by public notice, offer Treasury bills for sale, and 
invite tenders therefor, through the Federal Reserve Banks and branches 
and through the Department of the Treasury, Bureau of the Public Debt. 
The Treasury bills so offered, and the tenders made, will be subject to 
the terms and conditions and to the general rules and regulations herein 
set forth, except as they may be modified in the public notices issued 
by the Secretary of the Treasury in connection with particular 
offerings.\1\
---------------------------------------------------------------------------

    \1\ Accordingly, these regulations do not constitute a specific 
offering of Treasury bills.
---------------------------------------------------------------------------



Sec. 309.2  Description of Treasury bills (General).

    Treasury bills are bearer obligations of the United States promising 
to pay a specified amount on a specified date. They will be payable at 
maturity upon presentation to the Bureau of the Public Debt, Washington, 
DC 20226, or to any Federal Reserve Bank or branch. Treasury bills are 
issued only by Federal Reserve Banks and branches and the Bureau of the 
Public Debt pursuant to tenders accepted by the Secretary of the 
Treasury, and shall not be valid unless the issue date and the maturity 
date are entered thereon. Treasury bills bearing the same issue date and 
the same maturity date shall constitute a series.



Sec. 309.3  Denominations and exchange.

    Treasury bills will be issued in denominations (maturity value) of 
$10,000, $15,000, $50,000, $100,000, $500,000, and $1,000,000. Exchanges 
from higher to lower and lower to higher denominations of the same 
series (bearing the same issue and maturity dates) will be permitted at 
Federal Reserve Banks and branches and at the Bureau of the Public Debt, 
Washington, DC 20226. Insofar as applicable, the general regulations of 
the Treasury Department governing transactions in bonds and notes will 
govern transactions in Treasury bills.



Sec. 309.4  Taxation.

    The income derived from Treasury bills, whether interest or gain 
from the sale or other disposition of the bills, shall not have any 
exemption, as such, and loss from the sale or other disposition of 
Treasury bills shall not have any special treatment, as such, under the 
Internal Revenue Code, or laws amendatory or supplementary thereto. The 
bills shall be subject to estate, inheritance, gift or other excise 
taxes, whether Federal or State, but shall be exempt from all taxation 
now or hereafter imposed on the principal or interest thereof by any 
State, or any of the possessions of the United States, or by any local 
taxing authority. For purposes of taxation the amount of discount at 
which Treasury bills are originally sold by the United States shall be 
considered to be interest.



Sec. 309.5  Acceptance of Treasury bills for various purposes.

    (a) Acceptable as security for public deposits. Treasury bills will 
be acceptable at maturity value to secure deposits of public monies.

[[Page 161]]

    (b) Acceptable in payment of taxes. The Secretary of the Treasury, 
in his discretion, when inviting tenders for Treasury bills, may provide 
that Treasury bills of any series will be acceptable at maturity value, 
whether at or before maturity, under such rules and regulations as he 
shall prescribe or approve, in payment of income taxes payable under the 
provisions of the Internal Revenue Code. Treasury bills which by the 
terms of their issue are acceptable in payment of income taxes may be 
surrendered to any Federal Reserve Bank or Branch, acting as fiscal 
agent of the United States, or to the Bureau of the Public Debt, 
Washington, DC 20226, 15 days or less before the date on which the taxes 
become due.
    (1) In the case of payments of corporation income taxes (including 
payments of estimates) for taxable years ending on or after December 31, 
1967, the bills shall be accompanied by a preinscribed Form 503, Federal 
Tax Deposit, Corporation Income Taxes, on which the face amount of the 
bills being surrendered should be entered in the space provided for the 
amount of the tax deposit. The office receiving the bills and Form 503 
will acknowledge receipt of the bills to the owner corporation and 
effect the tax deposit on the date on which the taxes become due. 
Accordingly, in these cases, it will no longer be necessary to submit 
receipts for Treasury bills to the Internal Revenue Service with the 
corporation's declaration or tax return.
    (2) In the case of payments of all other income taxes the office 
receiving the bills will issue receipts (in duplicate) to the owners. 
The original of the receipt shall be submitted, by the owner, in lieu of 
the bills, together with the tax return, to the District Director, 
Internal Revenue Service.
    (c) Discounting by Federal Reserve Bank of notes secured by Treasury 
bills. Notes securied by Treasury bills are eligible for discount or 
rediscount at Federal Reserve Banks as provided under the provisions of 
section 13 of the Federal Reserve Act, as are notes securied by bonds 
and notes of the United States.
    (d) Acceptable in connection with foreign obligations held by United 
States. Treasury bills will be acceptable at maturity, but not before, 
in payment of interest or of principal on account of obligations of 
foreign governments held by the United States.



Sec. 309.6  Public notice of offering.

    When Treasury bills are to be offered, tenders therefor will be 
invited through public notice given by the Secretary of the Treasury. 
Such public notices may be issued by the Secretary of the Treasury in 
the name of ``the Treasury Department'' with the same force and effect 
as if issued in the name of the Secretary of the Treasury. In such 
notice there will be set forth the amount of Treasury bills for which 
tenders are then invited, the date of issue, the date or dates when such 
bills will become due and payable, the date and closing hour for the 
receipt of tenders at the Federal Reserve Banks and branches and at the 
Bureau of the Public Debt, Washington, DC 20226, and the date on which 
payment for accepted tenders must be made or completed.



Sec. 309.7  Tenders; submission through Federal Reserve Banks and branches and to the Bureau of the Public Debt.

    Tenders in response to any such public notice will be received at 
the Federal Reserve Banks, or Branches thereof and at the Bureau of the 
Public Debt, Washington, DC 20226, and unless received before the time 
fixed for closing will be disregarded. Each tender must be for a minimum 
amount of $10,000. Tenders over $10,000 must be in multiples of $5,000 
(maturity value). In the case of competitive tenders the price or prices 
offered by the bidder for the amount or amounts (at maturity value) 
applied for must be stated, and must be expressed on the basis of 100, 
with not more than three decimals, e.g., 99.925. Fractions may not be 
used.



Sec. 309.8  Tenders; when cash deposit is required.

    Tenders should be submitted on the printed forms and forwarded in 
the special envelopes which will be supplied on application to any 
Federal Reserve Bank, or Branch or to the Bureau of the Public Debt, 
Washington, DC 20226. If a special envelope is not available, the 
inscription ``Tender for Treasury

[[Page 162]]

Bills'' should be placed on the envelope used. The instructions set 
forth in the public notice announcing the offering should be observed 
with respect to the submission of tenders. Banking institutions 
generally may submit tenders for account of customers provided the names 
of the customers are set forth in such tenders. Others than banking 
institutions, will not be permitted to submit tenders except for their 
own account. Tenders from incorporated banks and trust companies, and 
from responsible and recognized dealers in investment securities will be 
received without deposit. Tenders from all others must be accompanied by 
a payment of such percent of the face amount of the Treasury bills 
applied for as the Secretary of the Treasury may from time to time 
prescribe: Provided, however, That such deposit will not be required if 
the tender is accompanied by an express guaranty of payment in full by 
an incorporated bank or trust company. Forfeiture of the prescribed 
payment may be declared by the Secretary of the Treasury, if payment is 
not completed, in the case of accepted tenders, on the prescribed date.



Sec. 309.9  Tenders; acceptance by the Secretary of the Treasury.

    At the time fixed for closing, as specified in the public notice, 
all tenders received by the Federal Reserve Banks and Branches and by 
the Bureau of the Public Debt will be opened. The Secretary of the 
Treasury will determine the acceptable prices offered and will make 
public announcement thereof those submitting tenders will be advised of 
the acceptance or rejection thereof, and payment on accepted tenders 
must be made or completed on the date specified in the public notice.



Sec. 309.10  Tenders; reservation of right to reject.

    In considering the acceptance of tenders, the highest prices offered 
will be accepted in full down to the amount required, and if the same 
price appears in two or more tenders and it is necessary to accept only 
a part of the amount offered at such price, the amount accepted at such 
price will be prorated in accordance with the respective amounts applied 
for. However, the Secretary of the Treasury expressly reserves the right 
on any occasion to accept non-competitive tenders entered in accordance 
with specific offerings, to reject any or all tenders or parts of 
tenders, and to award less than the amount applied for; and any action 
he may take in any such respect or respects shall be final.



Sec. 309.11  Tenders; payment of accepted tenders.

    Settlement for accepted tenders in accordance with the bids must be 
made or completed at the appropriate Federal Reserve Bank or branch or 
at the Bureau of the Public Debt in cash or other immediately available 
funds on or before the date specified, except that the Secretary of the 
Treasury, in his discretion, when inviting tenders for Treasury bills, 
may provide:
    (a) That any qualified depositary may make such settlement by 
credit, on behalf of itself and its customers, up to any amount for 
which it shall be qualified in excess of existing deposits, when so 
notified by the Federal Reserve Bank of its District or
    (b) That such settlement may be made in maturing Treasury bills 
accepted in exchange.

Whenever the Secretary provides for settlement in maturing Treasury 
bills, cash adjustments will be made for differences between the par 
value of the maturing bills and the issue price of the new bills.



Sec. 309.12  Relief on account of loss, theft or destruction, etc.

    (a) Relief on account of the loss, theft, destruction, mutilation or 
defacement of Treasury bills may be given only under the authority of, 
and subject to the conditions set forth in section 8 of the act of July 
8, 1937 (50 Stat. 481), as amended (31 U.S.C. 738a) and the regulations 
pursuant thereto in (Treasury Department Circular No. 300 insofar as 
applicable.
    (b) In case of the loss, theft, destruction, mutilation or 
defacement of Treasury bills, immediate advice, with a full description 
of the bill or bills involved, should be sent to the Bureau of the 
Public Debt, Division of Securities

[[Page 163]]

Operations, Department of the Treasury, Washington, DC 20226, either 
direct or though any Federal Reserve Bank or Branch, and, if relief 
under the statutes may be given, instructions and necessary blank forms 
will be furnished.



Sec. 309.13  Functions of Federal Reserve Banks.

    Federal Reserve Banks and Branches, as fiscal agents of the United 
States, are authorized to perform all such acts as may be necessary to 
carry out the provisions of this circular and of any public notice or 
notices issued in connection with any offering of Treasury bills.



Sec. 309.14  Reservation as to terms of circular.

    The Secretary of the Treasury reserves the right further to amend, 
supplement, revise or withdraw all or any of the provisions of this 
circular at any time, or from time to time.



PART 312--FEDERAL SAVINGS AND LOAN ASSOCIATIONS AND FEDERAL CREDIT UNIONS AS FISCAL AGENTS OF THE UNITED STATES--Table of Contents




    Note: Pursuant to the regulations in this part, the Acting Secretary 
of the Treasury on September 15, 1936, designated for employment as 
fiscal agents of the United States for the purpose of taking 
applications solely from their own members and forwarding remittances 
for, and making delivery of, United States Savings Bonds, all Federal 
savings and loan associations and Federal credit unions in good standing 
having five hundred or more members, and further designated all Federal 
savings and loan associations in good standing for employment as fiscal 
agents of the United States, for the purpose of collecting delinquent 
accounts arising out of insurance and loan transactions of the 
Administrator under Title I of the National Housing Act, and making 
investigations and rendering reports respecting the said delinquencies 
as may be directed from time to time by the Administrator.
    Pursuant to these same regulations, the Fiscal Assistant Secretary 
has now designated for employment, as fiscal agents of the United 
States, for the purpose of taking applications from nonmembers, as well 
as their own members, and forwarding remittances for, and making 
delivery of United States Savings Bonds, all Federal credit unions in 
good standing.
Sec.
312.1  Authority.
312.2  [Reserved]
312.3  Collections, investigations, and reports for the Federal Housing 
          Administration.
312.4  Bond of indemnity.
312.5  Fiscal agents to serve without compensation.
312.6  Applications other than to Federal Reserve Banks.

    Authority: Secs. 5(k), 17, 48 Stat. 646, 1222; 12 U.S.C. 1464(k), 
1767.

    Source: 1 FR 1587, Sept. 17, 1936, unless otherwise noted; 57 FR 
34684, Aug. 6, 1992.

    Cross References: For National Credit Union Administration, see 12 
CFR chapter VII. For Farm Credit Administration, see 12 CFR chapter VI. 
For Federal Home Loan Bank Board, see 12 CFR chapter V. For Federal 
Housing Commissioner, Office of Assistant Secretary for Housing, 
Department of Housing and Urban Development, see 24 CFR chapter II.



Sec. 312.1  Authority.

    (a) Home Owners' Loan Act. Section 5(k) of the Home Owners' Loan Act 
of 1933, as amended (48 Stat. 645; 12 U.S.C. 1464(k), is as follows:

    (k) When designated for that purpose by the Secretary of the 
Treasury, any Federal savings and loan association * * * may be employed 
as fiscal agent of the Government under such regulations as may be 
prescribed by said Secretary and shall perform all such reasonable 
duties as fiscal agent of the Government as may be required of it * * *.

    (b) Federal Credit Union Act. Section 17 of the Federal Credit Union 
Act (48 Stat. 1222; 12 U.S.C. 1767) is as follows:

    Each Federal credit union organized under this Act, when requested 
by the Secretary of the Treasury, shall act as fiscal agent of the 
United States and shall perform such services as the Secretary of the 
Treasury may require in connection with * * * the lending, borrowing, 
and repayment of money by the United States, including the issue, sale, 
redemption or repurchase of bonds, notes, Treasury certificates of 
indebtedness, or other obligations of the United States * * *.



Sec. 312.2  [Reserved]



Sec. 312.3  Collections, investigations, and reports for the Federal Housing Administration.

    Federal savings and loan associations, when designated for 
employment as fiscal agents of the United States for

[[Page 164]]

the purpose of collecting delinquent accounts arising out of insurance 
and loan transactions of the Administrator under Title I of the National 
Housing Act (48 Stat. 1246, 1247; 12 U.S.C. 1702-1706), and making 
investigations and rendering reports respecting the said delinquencies 
as may be directed from time to time by the Administrator, shall 
promptly forward remittances in the form collected to the Commissioner 
of the Federal Housing Administration, except, that remittances received 
in cash should be forwarded in the form of money order or check.



Sec. 312.4  Bond of indemnity.

    No Federal savings and loan association or Federal credit union 
which may have been designated for employment mentioned in this part 
shall perform, or make any effort to perform any of the acts included in 
such employment, or advertise in any manner that it is authorized to 
perform such acts until it has qualified by the execution of, delivery 
to, and approval of a bond of indemnity in favor of the United States 
with satisfactory surety, or with the pledge of collateral security as 
provided in part 225 of this chapter, conditioned upon the faithful 
performance of the obligor's duties as fiscal agent of the United States 
in the principal amount of $1,000 and until the Federal Home Loan Bank 
Board or the Bureau of Federal Credit Unions, Department of Health, 
Education, and Welfare, respectively, shall have certified to the 
Secretary of the Treasury that such association or credit union is in 
good standing and is eligible, under the terms and conditions prescribed 
by the Secretary, to qualify for the performance of the designated acts. 
The Federal Home Loan Bank Board and the Bureau of Credit Unions, 
respectively, shall keep the Secretary of the Treasury currently advised 
of the changes in the lists of associations and credit unions which are 
eligible, under the aforesaid terms and conditions, to qualify for the 
performance of the designated acts.

[32 FR 3447, Mar. 2, 1967]



Sec. 312.5  Fiscal agents to serve without compensation.

    All of the fiscal agency employment mentioned in this part shall be 
performed without compensation, reimbursement for expenses, or allowance 
of service charges.



Sec. 312.6  Applications other than to Federal Reserve Banks.

    Nothing contained in this part shall be construed as preventing such 
associations and credit unions, if they desire to assume such 
responsibility, from acting as agents of prospective purchasers in 
making applications to, and obtaining United States Savings Bonds from 
post offices or other designated places of issuance.



PART 315--REGULATIONS GOVERNING U.S. SAVINGS BONDS, SERIES A, B, C, D, E, F, G, H, J, AND K, AND U.S. SAVINGS NOTES--Table of Contents




                     Subpart A--General Information

Sec.
315.0  Applicability.
315.1  Official agencies.
315.2  Definitions.

                         Subpart B--Registration

315.5  General rules.
315.6  Restrictions on registration.
315.7  Authorized forms of registration.

               Subpart C--Limitations on Annual Purchases

315.10  Limitations.
315.11  Excess purchases.

              Subpart D--Limitations on Transfer or Pledge

315.15  Transfer.
315.16  Pledge.

 Subpart E--Limitations on Judicial Proceedings--No Stoppage or Caveats 
                                Permitted

315.20  General.
315.21  Payment to judgment creditors.
315.22  Payment or reissue pursuant to judgment.

[[Page 165]]

315.23  Evidence.

Subpart F--Relief for Loss, Theft, Destruction, Mutilation, Defacement, 
                         or Nonreceipt of Bonds

315.25  General.
315.26  Application for relief--after receipt of bond.
315.27  Application for relief--nonreceipt of bond.
315.28  Recovery or receipt of bond before or after relief is granted.
315.29  Adjudication of claims.

                           Subpart G--Interest

315.30  Series E bonds and savings notes.
315.31  Series H bonds.
315.32  Series A, B, C, D, F, G, J, and K bonds.

                Subpart H--General Provisions for Payment

315.35  Payment (redemption).
315.36  Payment during life of sole owner.
315.37  Payment during lives of both coowners.
315.38  Payment during lifetime of owner of beneficiary bond.
315.39  Surrender for payment.
315.40  Special provisions for payment.
315.41  Partial redemption.
315.42  Nonreceipt or loss of check issued in payment.
315.43  Effective date of request for payment.
315.44  Withdrawal of request for payment.

             Subpart I--Reissue and Denominational Exchange

315.45  General.
315.46  Effective date of request for reissue.
315.47  Authorized reissue--during lifetime.
315.48  Restrictions on reissue.
315.49  Correction of errors.
315.50  Change of name.
315.51  Requests for reissue.

                     Subpart J--Certifying Officers

315.55  Individuals authorized to certify.
315.56  General instructions and liability.
315.57  When a certifying officer may not certify.
315.58  Forms to be certified.

    Subpart K--Minors, Incompetents, Aged Persons, Absentees, et al.

315.60  Conditions for payment to representative of an estate.
315.61  Payment after death.
315.62  Payment to minors.
315.63  Payment to a parent or other person on behalf of a minor.
315.64  Payment, reinvestment, or exchange--voluntary guardian of an 
          incapacitated person.
315.65  Reissue.

            Subpart L--Deceased Owner, Coowner or Beneficiary

315.70  General rules governing entitlement.
315.71  Estate administered.
315.72  Estate not administered.

                         Subpart M--Fiduciaries

315.75  Payment or reissue during the existence of the fiduciary estate.
315.76  Payment or reissue after termination of the fiduciary estate.
315.77  Exchanges by fiduciaries.

     Subpart N--Private Organizations (Corporations, Associations, 
    Partnerships, etc.) and Governmental Agencies, Units and Officers

315.80  Payment to corporations or unincorporated associations.
315.81  Payment to partnerships.
315.82  Reissue or payment to successors of corporations, unincorporated 
          associations, or partnerships.
315.83  Reissue or payment on dissolution of corporation or partnership.
315.84  Payment to certain institutions.
315.85  Reissue in name of trustee or agent for reinvestment purposes.
315.86  Reissue upon termination of investment agency.
315.87  Payment to governmental agencies, units, or their officers.

                   Subpart O--Miscellaneous Provisions

315.90  Waiver of regulations.
315.91  Additional requirements; bond of indemnity.
315.92  Preservation of rights.
315.93  Supplements, amendments, or revisions.

    Authority: 31 U.S.C. 3105 and 5 U.S.C. 301.

    Source: 45 FR 64091, Sept. 26, 1980, unless otherwise noted.



                     Subpart A--General Information



Sec. 315.0  Applicability.

    The regulations in this circular, Department of the Treasury 
Circular No. 530, and the provisions of the respective offering 
circulars, govern--
    (a) United States Savings Bonds of Series E and Series H and United 
States Savings Notes, and

[[Page 166]]

    (b) United States Savings Bonds of Series A, B, C, D, F, G, J, and 
K, all of which have matured and are no longer earning interest.

The regulations in Department of the Treasury Circular, Public Debt 
Series No. 3-80 (31 CFR, part 353), govern United States Savings Bonds 
of Series EE and Series HH.



Sec. 315.1  Official agencies.

    (a) The Bureau of the Public Debt of the Department of the Treasury 
is responsible for administering the Savings Bonds Program. Authority to 
process most transactions has been delegated to Federal Reserve Banks 
and Branches in the list below, as fiscal agents of the United States.
    (b) Communications concerning transactions and requests for forms 
should be addressed to:
    (1) A Federal Reserve Bank or Branch in the list below; the Bureau 
of the Public Debt. 200 Third Street, Parkersburg, WV 26101; or the 
Bureau of the Public Debt, Washington, DC 20226.
    (2)(i) The following Federal Reserve Offices have been designated to 
provide savings bond services:

------------------------------------------------------------------------
                                     Reserve districts   Geographic area
          Servicing office                 served            served
------------------------------------------------------------------------
Federal Reserve Bank, Buffalo        New York, Boston.  CT, MA, ME, NH,
 Branch, P.O. Box 961, Buffalo, NY                       NJ (northern
 14240.                                                  half), NY (City
                                                         & State), RI,
                                                         Vt, Puerto Rico
                                                         and Virgin
                                                         Islands.
Federal Reserve Bank, Pittsburgh     Cleveland,         DE, KY (eastern
 Branch, P.O. Box 867, Pittsburgh,    Philadelphia.      half), NJ
 PA 15230.                                               (southern
                                                         half), OH, PA,
                                                         WV (northern
                                                         panhandle).
Federal Reserve Bank of Richmond,     Richmond,         AL, DC, FL, LA
 P.O. Box 27622, Richmond, VA 23261.  Atlanta.           (southern
                                                         half), MD, MS
                                                         (southern
                                                         half), NC, SC,
                                                         TN (eastern
                                                         half), VA, WV
                                                         (except
                                                         northern
                                                         panhandle).
Federal Reserve Bank of              Minneapolis,       IA, IL (northern
 Minneapolis, 250 Marquette Avenue,   Chicago.           half), IN
 Minneapolis, MN 55480.                                  (northern
                                                         half), MN, MT,
                                                         ND, SD, WI.
Federal Reserve Bank of Kansas       Dallas, San        AK, AR, AZ, CA,
 City, 925 Grand Avenue, Kansas       Francisco,         CO, HI, ID, IL
 City, MO 64198.                      Kansas City, St.   (southern
                                      Louis.             half), IN
                                                         (southern
                                                         half), KS, KY
                                                         (western half),
                                                         LA (northern
                                                         half), MO, MS
                                                         (northern
                                                         half), NE, NM,
                                                         NV, OK, OR, TN
                                                         (western half),
                                                         TX, WA, WY, UT
                                                         and GU.
------------------------------------------------------------------------

    (ii) Until March 1, 1996, other Federal Reserve Offices may continue 
to provide some savings bond services, but such services will be phased 
out over the period prior to that date.

[45 FR 64091, Sept. 26, 1980, as amended at 59 FR 10534, Mar. 4, 1994]



Sec. 315.2  Definitions.

    As used in these regulations--
    (a) Bond means a United States Savings Bond of any series except EE 
and HH, unless the context indicates otherwise. General references to 
bonds and direct references to Series E bonds also include United States 
Savings Notes, unless specifically excluded.
    (b) Extended maturity period means any period after the original 
maturity date during which the owner may retain a bond and continue to 
earn interest on the maturity value or extended maturity value under 
applicable provisions of the circular offering the bond for sale.
    (c) Extended maturity value is the value of a bond at the end of the 
applicable extended maturity period.
    (d) Final extended maturity date is the date on which a bond will 
mature and cease to bear interest at the end of the final extended 
maturity period.
    (e) Incompetent means an individual who is incapable of handling his 
or her business affairs because of a legal, mental or medically-
established physical disability, except that a minor is not an 
incompetent solely because of age.
    (f) Issuing agent means an organization that has been qualified 
under the provisions of Department of the Treasury Circular, Public Debt 
Series No. 4-67, current revision (31 CFR part 317), to issue savings 
bonds.
    (g) Original maturity date means the date on which the bond reaches 
the end of the term for which it was initially offered and, unless 
further extended, ceases to earn interest.

[[Page 167]]

    (h) Paying agent means a financial institution that has been 
qualified under the provisions of Department of the Treasury Circular 
No. 750, current revision (31 CFR part 321), to make payment of savings 
bonds.
    (i) Payment means redemption, unless otherwise indicated by context.
    (j) Person means any legal entity including, but without limitation, 
and individual, corporation (public or private), partnership, 
unincorporated association, or fiduciary estate.
    (k) Personal trust estates means trust estates established by 
natural persons in their own right for the benefit of themselves or 
other natural persons in whole or in part, and common trust funds 
comprised in whole or in part of such trust estates.
    (l) Reissue means the cancellation and retirement of a bond and the 
issuance of a new bond or bonds of the same series, same issue date, and 
same total face amount.
    (m) Representative of the estate of a minor, incompetent, aged 
person, absentee, et al. means the court-appointed or otherwise 
qualified person, regardless of title, who is legally authorized to act 
for the individual. The term does not include parents in their own 
right, voluntary or natural guardians, or the executors or 
administrators of decedents' estates.
    (n) Surrender means the actual receipt of a bond with an appropriate 
request for payment or reissue by either a Federal Reserve Bank or 
Branch, the Bureau of the Public Debt, or, if a paying agent is 
authorized to handle the transaction, the actual receipt of the bond and 
the request for payment by the paying agent.
    (o) Taxpayer identifying number means a social security account 
number or an employer identification number.
    (p) Voluntary guardian means an individual who is recognized as 
authorized to act for an incompetent, as provided by Sec. 315.64.



                         Subpart B--Registration



Sec. 315.5  General rules.

    (a) Registration is conclusive of ownership. Savings bonds are 
issued only in registered form. The registration must express the actual 
ownership of, and interest in, the bond. The registration is conclusive 
of ownership, except as provided in Sec. 315.49.
    (b) Requests for registration. Registrations requested must be 
clear, accurate and complete, conform substantially with one of the 
forms set forth in this subpart, and include the taxpayer identifying 
number of the owner or first-named coowner. The taxpayer identifying 
number of the second-named coowner or beneficiary is not required but 
its inclusion is desirable. The registration of all bonds owned by the 
same person, organization, or fiduciary should be uniform with respect 
to the name of the owner and any description of the fiduciary capacity. 
An individual should be designated by the name he or she is ordinarily 
known by or uses in business, including at least one full given name. 
The name may be preceded or followed by any applicable title, such as 
Miss, Mr., Mrs., Ms., Dr., Rev., M.D., or D.D.. A suffix, such as Sr. or 
Jr., must be included when ordinarily used or when necessary to 
distinguish the owner from another member of his family. A married 
woman's own given name, not that of her husband, must be used; for 
example, Mary A. Jones or Mrs. Mary A. Jones, NOT Mrs. Frank B. Jones. 
The address must include, where appropriate, the number and street, 
route, or any other local feature, city, State, and ZIP Code.



Sec. 315.6  Restrictions on registration.

    (a) Natural persons. Only an individual in his or her own right may 
be designated as coowner or beneficiary along with any other individual, 
whether on original issue or reissue, except as provided in 
Sec. 315.7(g).
    (b) Residence. The designation of an owner or first-named coowner is 
restricted, on original issue only, to persons (whether individuals or 
others) who are--
    (1) Residents of the United States, its territories and possessions, 
the Commonwealth of Puerto Rico, and the former Canal Zone;
    (2) Citizens of the United States residing abroad;
    (3) Civilian employees of the United States or members of its armed 
forces, regardless of their residence or citizenship; and

[[Page 168]]

    (4) Residents of Canada or Mexico who work in the United States but 
only if the bonds are purchased on a payroll deduction plan and the 
owner provides a taxpayer identifying number.

A nonresident alien may be designated coowner or beneficiary or, on 
authorized reissue, owner, unless the nonresident alien is a resident of 
an area with respect to which the Department of the Treasury restricts 
or regulates the delivery of checks drawn against funds of the United 
States or its agencies or instrumentalities. See Department of the 
Treasury Circular No. 655, current revision (31 CFR part 211). 
Registration is not permitted in any form which includes the name of any 
alien who is a resident of any restricted area.
    (c) Minors. (1) Minors may purchase with their wages, earnings, or 
other funds belonging to them and under their control bonds registered 
in their names alone or with a coowner or beneficiary.
    (2) Bonds purchased by another person with funds belonging to a 
minor not under legal guardianship or similar fiduciary estate must be 
registered, without a coowner or beneficiary, in the name of the minor 
or a natural guardian on behalf of a minor.
    (3) Bonds purchased with funds of another may be registered to name 
the minor as owner, coowner, or beneficiary. If the minor is under legal 
guardianship or similar fiduciary estate, the registration must include 
an appropriate reference to it.
    (4) Bonds purchased as a gift to a minor under a gifts-to-minors 
statute must be registered as prescribed by the statute and no coowner 
or beneficiary may be named.
    (5) Bonds purchased by a representative of a minor's estate must be 
registered in the name of the minor and must include in the registration 
an appropriate reference to the guardianship or similar fiduciary 
estate. Bonds purchased by a representative of the estates of two or 
more minors, even though appointed in a single proceeding, must be 
registered in the name of each minor separately with appropriate 
reference to the guardianship or similar fiduciary estate.
    (d) Incompetents. Bonds may be registered to a name as owner, 
coowner, or beneficiary an incompetent for whose estate a guardian or 
similar representative has been appointed, except that a coowner or 
beneficiary may not be named on bonds purchased with funds belonging to 
the incompetent. The registration must include appropriate reference to 
the guardianship or similar fiduciary estate. Bonds should not be 
registered in the name of an incompetent unless there is a 
representative for his or her estate, except as provided in Sec. 315.64.



Sec. 315.7  Authorized forms of registration.

    (a) General. Subject to any limitations or restrictions contained in 
these regulations on the right of any person to be named as owner, 
coowner, or beneficiary, bonds should be registered as indicated below. 
A savings bond inscribed in a form not substantially in agreement with 
one of the forms authorized by this subpart is not considered validly 
issued.
    (b) Natural persons. A bond may be registered in the names of 
individuals in their own right, but only in one of the forms authorized 
by this paragraph.
    (1) Single ownership form. A bond may be registered in the name of 
one individual. Example:

    John A. Jones 123-45-6789.

    (2) Coownership form. A bond may be registered in the names of two 
individuals in the alternative as coowners. The form of registration ``A 
and B'' is not authorized. Examples:

John A. Jones 123-45-6789 or Ella S. Jones 987-65-4321.
John A. Jones 123-45-6789 or (Miss, Ms. or Mrs.) Ella S. Jones.
Ella S. Jones 987-65-4321 or John A. Jones.

    (3) Beneficiary form. A bond may be registered in the name of one 
individual payable on death to another. ``Payable on death to'' may be 
abbreviated to ``P.O.D.'' Examples:

John A. Jones 123-45-6789 payable on death to Mrs. Ella S. Jones.
John A. Jones 123-45-6789 P.O.D. Ella S. Jones 987-65-4321.


[[Page 169]]


    (c) Fiduciaries (including legal guardians and similar 
representatives, certain custodians, natural guardians, executors, 
administrators, and trustees)--(1) General. A bond may be registered in 
the name of any person or persons or any organization acting as 
fiduciary of a single fiduciary estate, but not where the fiduciary will 
hold the bond merely or principally as security for the performance of a 
duty, obligation, or service. Registration should conform to a form 
authorized by this paragraph. A coowner or beneficiary may be named only 
in accordance with the applicable provisions of Sec. 315.6(c) and (d). A 
common trust fund established and maintained by a financial institution 
authorized to act as a fiduciary will be considered a single fiduciary 
estate within the meaning of these regulations.
    (2) Legal guardians, conservators, similar representives, certain 
custodians. A bond may be registered in the name and title or capacity 
of the legally appointed or authorized representative of the estate of a 
minor, incompetent, aged or infirm person, absentee, et al., or in the 
name of that individual followed by an appropriate reference to the 
estate. Examples:

Tenth National Bank, guardian (or conservator, trustee, etc.) of the 
estate of George N. Brown 123-45-6789, a minor (or an incompetent, aged 
person, infirm person, or absentee).
Henry C. Smith, conservator of the estate of John R. White 123-45-6789, 
an adult, pursuant to Sec. 633.572 of the Iowa Code.
John F. Green 123-45-6789, a minor (or an incompetent) under 
custodianship by designation of the Veterans Administration.
Frank M. Redd 123-45-6789, an incompetent for whom Eric A. Redd has been 
designated trustee by the Department of the Army pursuant to 37 U.S.C. 
602.
Arnold A. Ames, as custodian for Barry B. Bryan 123-45-6789, under the 
California Uniform Gifts to Minors Act.
Thomas J. Reed, as custodian for Lawrence W. Reed 123-45-6789, a minor, 
under the laws of Georgia.
Richard A. Rowe 123-45-6789, for whom Reba L. Rowe is representative 
payee for social security benefits (or black lung benefits, as the case 
may be). (If the beneficiary is a minor, the words ``a minor'' should 
appear immediately after the social security number.)
Henry L. Green 123-45-6789 or George M. Brown, a minor under legal 
guardianship of the Tenth National Bank.
Henry L. Green 123-45-6789 P.O.D. George M. Brown, a minor under legal 
guardianship of the Tenth National Bank.
Redd State Hospital and School, selected payee for John A. Jones 123-45-
6789, a Civil Service annuitant, pursuant to 5 U.S.C. 8345(e).

    (3) Natural guardians. A bond may be registered in the name of 
either parent of a minor, as natural guardian. The registration of a 
bond in this form is considered as establishing a fiduciary 
relationship. A coowner or beneficiary may be named but only if the 
funds used to purchase the bond do not belong to the minor. Examples:

John A. Jones, as natural guardian for Henry M. Jones 123-45-6789.
Melba Smith, as natural guardian for Thelma Smith 123-45-6789 P.O.D. 
Bartholomew Smith.

    (4) Executors and administrators. A bond may be registered in the 
name of the representative appointed by a court to act for an estate of 
a decedent, or in the name of an executor authorized to administer a 
trust under the terms of a will although not named trustee. The name and 
capacity of all the representatives as shown in the letters of 
appointment must be included in the registration and be followed by an 
adequate identifying reference to the estate. Examples:

John H. Smith and Calvin N. Jones, executors of the will (or 
administrators of the estate) of Robert J. Smith, deceased 12-3456789.
John H. Smith, executor of the will of Robert J. Smith, deceased, in 
trust for Mrs. Jane L. Smith, with remainder over 12-3456789.

    (5) Trustee or life tenants under wills, deeds of trust, agreements, 
or similar instruments. A bond may be registered in the name and title 
of the trustee of a trust estate, or in the name of a life tenant, 
followed by an adequate identifying reference to the authority governing 
the trust or life tenancy. Examples:

Thomas J. White and Tenth National Bank, trustees under the will of 
Robert J. Smith, deceased 12-3456789.
Jane N. Black 123-45-6789, life tenant under the will of Robert J. 
Black, deceased.

[[Page 170]]

Tenth National Bank, trustee under agreement with Paul E. White, dated 
2/1/76, 12-3456789.
Carl A. Black and Henry B. Green, trustees under agreement with Paul E. 
White, dated 2/1/76, 12-3456789.
Paul E. White, trustee under declaration of trust dated 2/1/76, 12-
3456789.

    (i) If the trust instrument designates by title only an officer of a 
board or an organization as trustee, only the title of the officer 
should be used. Example:

Chairman, Board of Trustees, First Church of Christ, Scientist, of 
Chicago, Illinois, in trust under the will of Robert J. Smith, deceased 
12-3456789.

    (ii) The names of all trustees, in the form used in the trust 
instrument, must be included in the registration, except as follows:
    (A) If there are several trustees designated as a board or they are 
required to act as a unit, their names may be omitted and the words 
``Board of Trustees'' substituted for the word ``trustee''. Example:

Board of Trustees of Immediate Relief Trust of Federal Aid Association, 
under trust indenture dated 2/1/76, 12-3456789.

    (B) If the trustees do not constitute a board or are not required to 
act as a unit, and are too numerous to be designated in the registration 
by names and title, some or all the names may be omitted. Examples:

John A. Smith, Henry B. Jones, et al., trustees under the will of Edwin 
O. Mann, deceased 12-3456789.
    Trustees under the will of Edwin O. Mann, deceased 12-3456789.

    (6) Employee thrift, savings, vacation and similar plans. A bond may 
be registered in the name and title, or title alone, of the trustee of 
an eligible employee thrift, savings, vacation or similar plan, as 
defined in Sec. 316.5, of Department of the Treasury Circular No. 653, 
current revision. If the instrument creating the trust provides that the 
trustees shall serve for a limited term, their names may be omitted. 
Examples:

Tenth National Bank, trustee of Pension Fund of Safety Manufacturing 
Company, U/A with the company, dated March 31, 1976, 12-3456789.
Trustees of Retirement Fund of Safety Manufacturing Company, under 
directors' resolution adopted March 31, 1976, 12-3456789.
County Trust Company, Trustee of the Employee Savings Plan of Jones 
Company, Inc., U/A dated January 17, 1976, 12-3456789.
Trustee of the Employee Savings Plan of Brown Brothers, Inc., U/A dated 
January 20, 1976, 12-3456789.

    (7) Funds of lodges, churches, societies, or similar organizations. 
A bond may be registered in the title of the trustees, or a board of 
trustees, holding funds in trust for a lodge, church, or society, or 
similar organization, whether or not incorporated. Examples:

Trustees of the First Baptist Church, Akron, Ohio, acting as a Board 
under section 15 of its bylaws 12-3456789.
Trustees of Jamestown Lodge No. 1000, Benevolent and Protective Order of 
Elks, under section 10 of its bylaws 12-3456789.
Board of Trustees of Lotus Club, Washington, Indiana, under Article 10 
of its constitution 12-3456789.

    (8) Investment agents for religious, educational, charitable and 
non-profit organizations. A bond may be registered in the name of a 
bank, trust company, or other financial institution, or an individual, 
as agent under an agreement with a religious, educational, charitable or 
non-profit organization, whether or not incorporated, if the agent holds 
funds for the sole purpose of investing them and paying the income to 
the organization. The name and designation of the agent must be followed 
by an adequate reference to the agreement. Examples:

Tenth National Bank, fiscal agent U/A with the Evangelical Lutheran 
Church of the Holy Trinity, dated 12/28/76, 12-3456789.
Sixth Trust Company, Investment Agent U/A dated September 16, 1976, with 
Central City Post, Department of Illinois, American Legion, 12-3456789.
John Jones, Investment Agent U/A dated September 16, 1976, with Central 
City Post, Department of Illinois, American Legion, 12-3456789.

    (9) Funds of school groups or activities. A bond may be registered 
in the title of the principal or other officer of a public, private, or 
parochial school holding funds in trust for a student body fund or for a 
class, group, or activity. If the amount purchased for any one fund does 
not exceed $2,500 (face amount), no reference need be made to a trust 
instrument. Examples:


[[Page 171]]


Principal, Western High School, in trust for the Class of 1976 Library 
Fund, 12-3456789.
Director of Athletics, Western High School, in trust for Student 
Activities Association, under resolution adopted 5/12/76, 12-3456789.

    (10) Public corporations, bodies, or officers as trustees. A bond 
may be registered in the name of a public corporation or a public body, 
or in the title of a public officer, acting as trustee under express 
authority of law, followed by an appropriate reference to the statute 
creating the trust. Examples:

Rhode Island Investment Commission, trustee of the General Sinking Fund 
under Title 35, Ch. 8, Gen. Laws of Rhode Island.
Superintendent of the Austin State Hospital Annex, in trust for the 
Benefit Fund under Article 3183C, Vernon's Civ. Stat. of Texas Ann.

    (d) Private organizations (corporations, associations, 
partnerships)--(1) General. A bond may be registered in the name of any 
private organization in its own right. The full legal name of the 
organization as set forth in its charter, articles of incorporation, 
constitution, partnership agreement, or other authority from which its 
powers are derived, must be included in the registration and may be 
followed by a parenthetical reference to a particular account other than 
a trust account.
    (2) Corporations. A bond may be registered in the name of a 
business, fraternal, religious, non-profit, or other private 
corporation. The words ``a corporation'' must be included in the 
registration unless the fact of incorporation is shown in the name. 
Examples:

Smith Manufacturing Company, a corporation 12-3456789.
Green and Redd, Inc. 12-3456789 (Depreciation Acct.).

    (3) Unincorporated associations. A bond may be registered in the 
name of a club, lodge, society, or a similar self-governing association 
which is unincorporated. The words ``an unincorporated association'' 
must be included in the registration. This form of registration must not 
be used for a trust fund, board of trustees, a partnership, or a sole 
proprietorship. If the association is chartered by or affiliated with a 
parent organization, the name or designation of the subordinate or local 
organization must be given first, followed by the name of the parent 
organization. The name of the parent organization may be placed in 
parentheses and, if well known, may be abbreviated. Examples:

The Lotus Club, an unincorporated association, 12-3456789.
Local 447, Brotherhood of Railroad Trainmen, an unincorporated 
association, 12-3456789.
Eureka Lodge 317 (A.F. and A.M.), an unincorporated association, 12-
3456789.

    (4) Partnerships. A bond may be registered in the name of a 
partnership. The words ``a partnership'' must be included in the 
registration. Examples:

Smith & Jones, a partnership, 12-3456789.
Acme Novelty Company, a partnership, 12-3456789.

    (5) Sole proprietorships. A bond may be registered in the name of an 
individual who is doing business as a sole proprietor. A reference may 
be made to the trade name under which the business is conducted. 
Example:
    John Jones d.b.a. Jones Roofing Company, 123-45-6789

    (e) Institutions (churches, hospitals, homes, schools, etc.). A bond 
may be registered in the name of a church, hospital, home, school, or 
similar institution conducted by a private organization or by private 
trustees, regardless of the manner in which it is organized or governed 
or title to its property is held. Descriptive words, such as ``a 
corporation'' or ``an unincorporated association'', must not be included 
in the registration. Examples:

Shriners' Hospital for Crippled Children, St. Louis, MO, 12-3456789.
St. Mary's Roman Catholic Church, Albany, NY, 12-3456789.
Rodeph Shalom Sunday School, Philadelphia, PA, 12-3456789.

    (f) States, public bodies and corporations, and public officers. A 
bond may be registered in the name of a State, county, city, town, 
village, school district, or other political entity, public body, or 
corporation established by law (including a board, commission, 
administration, authority, or agency) which is the owner or official 
custodian of public funds, other than trust funds, or in the full legal 
title of the public officer having custody of the funds. Examples:


[[Page 172]]


State of Maine.
Town of Rye, NY (Street Improvement Fund).
Maryland State Highway Administration.
Treasurer, City of Chicago.

    (g) The United States Treasury. A person who desires to have a bond 
become the property of the United States upon his or her death may 
designate the United States Treasury as coowner or beneficiary. 
Examples:

George T. Jones 123-45-6789 or the United States Treasury.
George T. Jones 123-45-6789 P.O.D. the United States Treasury.



               Subpart C--Limitations on Annual Purchases



Sec. 315.10  Limitations.

    Specific limitations have been placed on the amounts of bonds of 
each series and savings notes that might be purchased in any one year in 
the name of any one person or organization. The amounts applicable to 
each series of bonds and savings notes for each specific year, which has 
varied from time to time, can be found in the appropriate offering 
circulars, as revised and amended.



Sec. 315.11  Excess purchases.

    The Commissioner of the Public Debt may permit excess purchases to 
stand in any particular case or class of cases.



              Subpart D--Limitations on Transfer or Pledge



Sec. 315.15  Transfer.

    Savings bonds are not transferable and are payable only to the 
owners named on the bonds, except as specifically provided in these 
regulations and then only in the manner and to the extent so provided.



Sec. 315.16  Pledge.

    (a) General. A savings bond may not be hypothecated, pledged, or 
used as security for the performance of an obligation, except as 
provided in paragraph (b) of this section.
    (b) Pledge under Treasury Circular No. 154. A bond may be pledged by 
the registered owner in lieu of surety under the provisions of 
Department of the Treasury Circular No. 154, current revision (31 CFR 
part 225), if the bond approving officer is the Secretary of the 
Treasury. In this case, an irrevocable power of attorney shall be 
executed authorizing the Secretary of the Treasury to request payment.



 Subpart E--Limitations on Judicial Proceedings--No Stoppage or Caveats 
                                Permitted



Sec. 315.20  General.

    The following general rules apply to the recognition of a judicial 
determination on adverse claims affecting savings bonds:
    (a) The Department of the Treasury will not recognize a judicial 
determination that gives effect to an attempted voluntary transfer inter 
vivos of a bond, or a judicial determination that impairs the rights of 
survivorship conferred by these regulations upon a coowner or 
beneficiary. All provisions of this Subpart are subject to these 
restrictions.
    (b) The Department of the Treasury will recognize a claim against an 
owner of a savings bond and conflicting claims of ownership of, or 
interest in, a bond between coowners or between the registered owner and 
the beneficiary, if established by valid, judicial proceedings, but only 
as specifically provided in this subpart. Section 315.23 specifies the 
evidence required to establish the validity of the judicial proceedings.
    (c) The Department of the Treasury and the agencies that issue, 
reissue, or redeem savings bonds will not accept a notice of an adverse 
claim or notice of pending judicial proceedings, nor undertake to 
protect the interests of a litigant not in possession of a savings bond.



Sec. 315.21  Payment to judgment creditors.

    (a) Purchaser or officer under levy. The Department of the Treasury 
will pay (but not reissue) a savings bond to the purchaser at a sale 
under a levy or to the officer authorized under appropriate process to 
levy upon property of the registered owner or coowner to satisfy a money 
judgment. Payment will be made only to the extent necessary

[[Page 173]]

to satisfy the money judgment. The amount paid is limited to the 
redemption value 60 days after the termination of the judicial 
proceedings. Payment of a bond registered in coownership form pursuant 
to a judgment or a levy against only one coowner is limited to the 
extent of that coowner's interest in the bond. That interest must be 
established by an agreement between the coowners or by a judgment, 
decree, or order of a court in a proceeding to which both coowners are 
parties.
    (b) Trustee in bankruptcy, receiver, or similar court officer. The 
Department of the Treasury will pay, at current redemption value, a 
savings bond to a trustee in bankruptcy, a receiver of an insolvent's 
estate, a receiver in equity, or a similar court officer under the 
provisions of paragraph (a) of this section.



Sec. 315.22  Payment or reissue pursuant to judgment.

    (a) Divorce. The Department of the Treasury will recognize a divorce 
decree that ratifies or confirms a property settlement agreement 
disposing of bonds or that otherwise settles the interests of the 
parties in a bond. Reissue of a savings bond may be made to eliminate 
the name of one spouse as owner, coowner, or beneficiary, or to 
substitute the name of one spouse for that of the other spouse as owner, 
coowner, or beneficiary pursuant to the decree. However, if the bond is 
registered in the name of one spouse with another person as coowner, 
there must be submitted either:
    (1) A request for reissue by the other person or
    (2) A certified copy of a judgment, decree, or court order entered 
in proceedings to which the other person and the spouse named on the 
bond are parties, determining the extent of the interest of that spouse 
in the bond.

Reissue will be permitted only to the extent of that spouse's interest. 
The evidence required under Sec. 315.23 must be submitted in every case. 
When the divorce decree does not set out the terms of the property 
settlement agreement, a certified copy of the agreement must be 
submitted. Payment, rather than reissue, will be made if requested.
    (b) Gift causa mortis. A savings bond belonging solely to one 
individual will be paid or reissued at the request of the person found 
by a court to be entitled by reason of a gift causa mortis from the sole 
owner.
    (c) Date for determining rights. When payment or reissue under this 
section is to be made, the rights of the parties will be those existing 
under the regulations current at the time of the entry of the final 
judgment, decree, or court order.



Sec. 315.23  Evidence.

    (a) General. To establish the validity of judicial proceedings, 
certified copies of the final judgment, decree, or court order, and of 
any necessary supplementary proceedings, must be submitted. If the 
judgment, decree, or court order was rendered more than six months prior 
to the presentation of the bond, there must also be submitted a 
certificate from the clerk of the court, under court seal, dated within 
six months of the presentation of the bond, showing that the judgment, 
decree, or court order is in full force.
    (b) Trustee in bankruptcy or receiver of an insolvent's estate. A 
request for payment by a trustee in bankruptcy or a receiver of an 
insolvent's estate must be supported by appropriate evidence of 
appointment and qualification. The evidence must be certified by the 
clerk of the court, under court seal, as being in full force on a date 
that is not more than six months prior to the presentation of the bond.
    (c) Receiver in equity or similar court officer. A request for 
payment by the receiver in equity or a similar court officer, other than 
a receiver of an insolvent's estate, must be supported by a copy of an 
order that authorizes the presentation of the bond for redemption, 
certified by the clerk of the court, under court seal, as being in full 
force on a date that is not more than six months prior to the 
presentation of the bond.

[[Page 174]]



Subpart F--Relief for Loss, Theft, Destruction, Mutilation, Defacement, 
                         or Nonreceipt of Bonds



Sec. 315.25  General.

    Relief, by the issue of a substitute bond or by payment, is 
authorized for the loss, theft, destruction, mutilation, or defacement 
of a bond after receipt by the owner or his or her representative. As a 
condition for granting relief, the Commissioner of the Public Debt, as 
designee of the Secretary of the Treasury, may require a bond of 
indemnity, in the form, and with the surety, or security, he considers 
necessary to protect the interests of the United States. In all cases 
the savings bond must be identified by serial number and the applicant 
must submit satisfactory evidence of the loss, theft, or destruction, or 
a satisfactory explanation of the mutilation or defacement.



Sec. 315.26  Application for relief--after receipt of bond.

    (a) Serial number known. If the serial number of the lost, stolen, 
or destroyed bond is known, the claimant should execute an application 
for relief on the appropriate form and submit it to the Bureau of the 
Public Debt, Parkersburg, WV 26101.
    (b) Serial number not known. If the bond serial number is not known, 
the claimant must provide sufficient information to enable the Bureau of 
the Public Debt to identify the bond by serial number. See 
Sec. 315.29(c). The Bureau will furnish the proper application form and 
instructions.
    (c) Defaced or mutilated bond. A defaced bond and all available 
fragments of a mutilated bond should be submitted to the Bureau.
    (d) Execution of claims application. The application must be made by 
the person or persons (including both coowners, if living) authorized 
under these regulations to request payment of the bonds. In addition--
    (1) If the bond is in beneficiary form and the owner and beneficiary 
are both living, both will ordinarily be required to join in the 
application.
    (2) If a minor named on a bond as owner, coowner, or beneficiary is 
not of sufficient competency and understanding to request payment, both 
parents will ordinarily be required to join in the application.
    (e) If the application is approved, relief will be granted by the 
issuance of a bond bearing the same issue date as the bond for which the 
claim was filed or by the issuance of a check in payment.



Sec. 315.27  Application for relief--nonreceipt of bond.

    If a bond issued on any transaction is not received, the issuing 
agent must be notified as promptly as possible and given all information 
available about the nonreceipt. An appropriate form and instructions 
will be provided. If the application is approved, relief will be granted 
by the issuance of a bond bearing the same issue date as the bond that 
was not received.



Sec. 315.28  Recovery or receipt of bond before or after relief is granted.

    (a) Recovery prior to granting relief. If a bond reported lost, 
stolen, destroyed, or not received, is recovered or received before 
relief is granted, the Bureau of the Public Debt, Parkersburg, WV 26101, 
must be notified promptly.
    (b) Recovery subsequent to granting of relief. A bond for which 
relief has been granted is the property of the United States and, if 
recovered, must be promptly submitted to the Bureau of the Public Debt, 
Parkersburg, WV 26101, for cancellation.



Sec. 315.29  Adjudication of claims.

    (a) General. The Bureau of the Public Debt will adjudicate claims 
for lost, stolen or destroyed bonds on the basis of records created and 
regularly maintained in the ordinary course of business.
    (b) Claims filed ten years after payment. A bond for which no claim 
has been filed within ten years of the recorded date of redemption will 
be presumed to have been properly paid. If a claim is subsequently 
filed, a photographic copy of the bond will not be available to support 
the disallowance. This provision will be effective 60 days after the 
effective date of the Eleventh Revision of Department of the Treasury 
Circular No. 530 (31 CFR part 315).

[[Page 175]]

    (c) Claims filed six years after final maturity. No claim filed six 
years or more after the final maturity of a savings bond will be 
entertained, unless the claimant supplies the serial number of the bond.



                           Subpart G--Interest



Sec. 315.30  Series E bonds and savings notes.

    Series E bonds and savings notes are discount securities. The 
accrued interest is added to the issue price at stated intervals and is 
payable only at redemption as part of the redemption value. All Series E 
bonds and savings notes have been extended and continue to earn interest 
until their final maturity dates, unless redeemed earlier. Information 
regarding extended maturity periods, investment yields and redemption 
values is found in Department of the Treasury Circular No. 653, current 
revision (31 CFR part 316) for Series E bonds, and in Department of the 
Treasury Circular, Public Debt Series No. 3-67, current revision (31 CFR 
part 342) for savings notes.



Sec. 315.31  Series H bonds.

    (a) General. Series H bonds are current income bonds issued at par 
(face amount). Interest on a Series H bond is paid semiannually 
beginning six months from the issue date. Interest ceases at final 
maturity, or if the bond is redeemed prior to final maturity, as of the 
end of the interest period last preceding the date of redemption. For 
example, if a bond on which interest is payable on January 1 and July 1 
is redeemed on September 1, interest ceases as of the preceding July 1, 
and no interest will be paid for the period from July 1 to September 1. 
However, if the redemption date falls on an interest payment date, 
interest ceases on that date. Information regarding authorized extended 
maturity periods and investment yields is found in Department Circular 
No. 905, current revision (31 CFR part 332).
    (b) Payment of interest. Series H bond interest accounts are 
maintained by the Bureau of the Public Debt, Parkersburg, WV. Interest 
is paid on each payment date by check drawn to the order of the owner or 
both coowners or, upon request, by the Automated Clearing House (ACH) 
method to the owner or coowner's account at a financial institution. 
Checks will be mailed to the delivery address provided to the Bureau.
    (c) Delivery of interest--(1) Notices affecting the delivery of 
interest payments. To ensure appropriate action, notices affecting the 
delivery of interest payments on Series H bonds must be received by the 
Bureau of the Public Debt, Parkersburg, WV, 26102-1328, at least one 
month prior to the interest payment date. Each notice must include the 
owner or coowner's name and the taxpayer identifying number appearing on 
the account under which records of the bonds are maintained.

(Approved by the Office of Management and Budget under control number 
1535-0094)
    (2) Owner or coowner deceased--(i) Sole owner. Upon receipt of 
notice of the death of the owner of a bond, payment of interest will be 
suspended until satisfactory evidence is submitted as to who is 
authorized to receive and collect interest payments on behalf of the 
estate of the decedent, in accordance with the provisions of subpart L.
    (ii) Coowner. Upon receipt of notice of the death of the ooowner to 
whom interest payments have been directed, payment of interest will be 
suspended until delivery instructions are received from the other 
coowner, if living. If both coowners are deceased, payment of interest 
will be suspended until satisfactory evidence is submitted as to who is 
authorized to receive and collect interest payments on behalf of the 
estate of the last deceased coowner, in accordance with the provisions 
of subpart L.
    (iii) Owner with beneficiary. Interest on a bond registered in 
beneficiary form is paid to the owner during his or her lifetime. Upon 
receiving notice of the owner's death, the Bureau of the Public Debt 
will suspend payment of interest until the bond is presented for payment 
or reissue by the beneficiary, if surviving, or some other proper party. 
Interest so withheld will be paid to the person entitled to the bond.
    (d) Representative appointed for the estate of a minor, incompetent, 
absentee, et al. Interest on Series H bonds is paid in accordance with 
the provisions of

[[Page 176]]

Sec. 315.60 to the representative appointed for the estate of an owner 
who is a minor, incompetent, absentee, et al. If the registration of the 
bonds does not include reference to the owner's status, the bonds should 
be submitted for reissue to a designated Federal Reserve Bank so that 
interest payments may be properly delivered. They must be accompanied by 
proof of appointment as required by Sec. 315.60.
    (e) Adult incapacitated owner having no representative. If an adult 
owner of a Series H bond is incompetent to receive and collect interest 
payments, and no legal guardian or similar representative has been 
appointed to act for him or her, the relative, or other person, 
responsible for the owner's care and support may apply to the Bureau of 
the Public Debt for recognition as voluntary guardian for the purpose of 
receiving and collecting the payments.
    (f) Reissue during interest period. Physical reissue of a Series H 
bond may be made without regard to interest payment dates. The Series H 
accounts maintained by the Bureau of the Public Debt will be closed in 
the first week of the month preceding each interest payment date, and 
payments will be made pursuant to the information contained in the 
accounts as of the date they are closed.
    (g) Endorsement of checks. Interest checks must be endorsed in 
accordance with the regulations governing the payment of fiscal agency 
checks contained in 31 CFR part 355.
    (h) Deposit account information for ACH payments--(1) Payments on 
same account. Payments on all Series H bonds assigned to the same 
account maintained by the Bureau will be made to the same deposit 
account at a financial institution.
    (2) Deposit account held by individuals in their own right. Where 
the Series H bonds are registered in the name of individual(s) as sole 
owner, or as owner and beneficiary, and the deposit account at the 
financial institution is held in the name of individual(s) in their own 
right, the owner's name must appear on the deposit account. Where the 
bonds are registered in the names of two individuals as coowners and the 
deposit account is held in the name of individual(s) in their own right, 
the registration of the bonds and the title of the account must contain 
at least one name that is common to both. The deposit account to which 
the interest payments are directed should preferably be established in a 
form identical to the registration of the bonds to ensure that rights of 
ownership and survivorship can be more easily identified and preserved. 
Neither the United States nor any Federal Reserve Bank shall be liable 
for any loss sustained because the interest(s) of the holder(s) of a 
deposit account to which payments are directed are not the same as the 
owner(s) of the bonds.
    (3) Deposit account held by organization. Where the deposit account 
to which interest payments are to be directed is held in the name of the 
financial institution itself, acting as sole trustee or as co-trustee, 
or is in the name of a commercially-managed investment fund, the owner 
or coowner should inquire whether the financial institution is able to 
receive ACH payments; if not, the owner or coowner should make 
alternative arrangements.
    (4) Financial institution cannot accept ACH payments. If after 
submission of deposit account information, it is determined that ACH 
payments cannot be accepted by the designated financial institution, 
pending receipt of new deposit account information, payment will be made 
by check drawn to the registered owner or both coowners and mailed to 
the address of record.
    (5) Cancellation of ACH arrangement. An ACH arrangement shall remain 
in effect until it is terminated by a request from the owner or coowner 
submitted to the Bureau of the Public Debt, Parkersburg, WV 26102-1328.
    (6) Rules. Series H interest payments made by the ACH method are 
governed by the regulations at 31 CFR part 370.
    (7) Nonreceipt or loss of interest payment. The Bureau of the Public 
Debt, Parkersburg, WV 26102 should be notified if:
    (i) An interest check is not received or is lost after receipt or
    (ii) An ACH payment is not credited to the designated account and 
the financial institution has no record of receiving it. The notice 
should include

[[Page 177]]

the owner or coowner's name and taxpayer identifying number and the 
interest payment date.

[54 FR 40255, Sept. 29, 1989, as amended at 59 FR 10535, Mar. 4, 1994; 
64 FR 40486, July 26, 1999]



Sec. 315.32  Series A, B, C, D, F, G, J, and K bonds.

    All bonds of these series have matured and no longer earn interest.



                Subpart H--General Provisions for Payment



Sec. 315.35  Payment (redemption).

    (a) General. Payment of a savings bond will be made to the person or 
persons entitled under the provisions of these regulations, except that 
checks in payment will not be delivered to addresses in areas with 
respect to which the Department of the Treasury restricts or regulates 
the delivery of checks drawn against funds of the United States. See 
Department of the Treasury Circular No. 655, current revision (31 CFR 
part 211). Payment will be made without regard to any notice of adverse 
claims to a bond and no notification of stoppage or caveat against 
payment of a bond will be made.
    (b) Series A, B, C, D, F, and J. A bond of Series A, B, C, D, F, or 
J will be paid at face value.
    (c) Series E and Savings Notes. A Series E bond will be paid at any 
time after two months from issue date at the appropriate redemption 
value shown in Department of the Treasury Circular No. 653 (31 CFR part 
316), current revision. A savings note will be paid at anytime at the 
appropriate redemption value shown in Department of the Treasury 
Circular, Public Debt Series No. 3-67, current revision (31 CFR part 
342).
    (d) Series G and K. A bond of Series G or K will be paid at face 
value plus the final semiannual interest due. For Series G bonds, the 
final interest paid with principal is $1.25 per $100; for Series K 
bonds, the final interest is $6.90 per $500.
    (e) Series H. A Series H bond will be redeemed at face value at any 
time after six (6) months from issue date. In any case where Series H 
bonds are surrendered to a designated Federal Reserve Bank or Branch or 
the Department of the Treasury for redemption in the month prior to an 
interest payment date, redemption will not be deferred but will be made 
in regular course, unless the presenter specifically requests that the 
transaction be delayed until that date. A request to defer redemption 
made more than one month preceding the interest payment date will not be 
accepted.

[45 FR 64091, Sept. 26, 1980, as amended at 51 FR 23753, July 1, 1986; 
59 FR 10535, Mar. 4, 1994]



Sec. 315.36  Payment during life of sole owner.

    A savings bond registered in single ownership form (i.e., without a 
coowner or beneficiary) will be paid to the owner during his or her 
lifetime upon surrender with an appropriate request.



Sec. 315.37  Payment during lives of both coowners.

    A savings bond registered in coownership form will be paid to either 
coowner upon surrender with an appropriate request, and, upon payment 
(as determined in Sec. 315.43), the other coowner will cease to have any 
interest in the bond. If both coowners request payment and payment is to 
be made by check, the check will be drawn in the form, ``John A. Jones 
and Mary C. Jones''.



Sec. 315.38  Payment during lifetime of owner of beneficiary bond.

    A savings bond registered in beneficiary form will be paid to the 
registered owner during his or her lifetime upon surrender with an 
appropriate request. Upon payment (as determined in Sec. 315.43), the 
beneficiary will cease to have any interest in the bond.



Sec. 315.39  Surrender for payment.

    (a) Procedure for bonds of Series A to E, inclusive, in the names of 
individual owners or coowners only. An individual who is the owner or 
coowner of a bond of Series A, B, C, D, or E may present the bond to an 
authorized paying agent for redemption. The presenter must be prepared 
to establish his or her identity in accordance with Treasury 
instructions and identification guidelines. The

[[Page 178]]

owner or coowner must sign the request for payment on the bond or, if 
authorized, on a separate detached request, and add his or her address. 
In addition, in the case of a Series E bond or savings note, the 
presenter must record his or her social security number on the face of 
the security, provided it does not already appear in the inscription. 
Paying agents are authorized to refuse payment in any case where the 
presenter's number is not provided. If the request for payment has been 
signed, or signed and certified, before presentation of the bond, the 
paying agent must be satisfied that the person presenting the bond for 
payment is the owner or coowner and may require the person to sign the 
request for payment again. If the bond is in order for payment, the 
paying agent will make immediate payment at the current redemption value 
without charge to the presenter. Paying agents are not authorized to 
process any case involving partial redemption or any case in which 
supporting evidence is required.
    (b) Procedure for all other cases. In the case of a bond to which 
the procedure in paragraph (a) of this section does not apply, or if 
otherwise preferred, the owner or coowner, or other person entitled to 
payment, should appear before an officer authorized to certify requests 
for payment, establish his or her identity, sign the request for 
payment, and provide information as to the addresss to which the check 
in payment is to be mailed. In addition, in the case of a Series E bond 
or savings note, the presenter must record his or her social security 
number on the face of the security, provided it does not already appear 
in the inscription. The bond must be forwarded to a designated Federal 
Reserve Bank or Branch or the Bureau of the Public Debt. Usually, 
payment will be expedited by submission to a designated Federal Reserve 
Bank or Branch. In all cases, the cost and risk of presentation of a 
bond will be borne by the owner. Payment will be made by check drawn to 
the order of the registered owner or other person entitled and will be 
mailed to the address requested.
    (c) Date of request. Requests executed more than six months before 
the date of receipt of a bond for payment will not be accepted. Neither 
will a bond be accepted if payment is requested as of a date more than 
three months in the future.

[45 FR 64091, Sept. 26, 1980, as amended at 59 FR 10535, Mar. 4, 1994]



Sec. 315.40  Special provisions for payment.

    (a) Owner's signature not required. A bond may be paid by a paying 
agent or a designated Federal Reserve Bank without the owner's signature 
to the request for payment, if the bond bears the special endorsement of 
a financial institution specifically qualified to place such an 
endorsement on savings bonds under the provisions of Department of the 
Treasury Circular No. 888, current revision (31 CFR part 330).
    (b) Signature by mark. A signature by mark (X) must be witnessed by 
at least one disinterested person and a certifying officer. See subpart 
J. The witness must attest to the signature by mark substantially as 
follows: ``Witness to signature by mark,'' followed by his or her 
signature and address.
    (c) Name change. If the name of the owner, coowner, or other person 
entitled to payment, as it appears in the registration or in evidence on 
file in the Bureau of the Public Debt, has been changed in any legal 
manner, the signature to the request for payment must show both names 
and the manner in which the change was made; for example, ``Mary T. 
Jones Smith (Mary T. J. Smith or Mary T. Smith) changed by marriage from 
Mary T. Jones,'' or ``John R. Young, changed by order of court from Hans 
R. Jung.'' See Sec. 315.50.
    (d) Attorneys-in-fact. A request for payment, reinvestment, or 
exchange executed by an attorney-in-fact will be recognized if it is 
accompanied by a copy of the power of attorney that meets the following 
requirements:
    (1) The power of attorney must bear the grantor's signature, 
properly certified or notarized, in accordance with applicable State 
law;
    (2) The power of attorney must grant, by its terms, authority for 
the attorney-in-fact to sell or redeem the grantor's securities, sell 
his or her personal property, or, otherwise contain similar authority; 
and

[[Page 179]]

    (3) In the case of a grantor who has become incapacitated, the power 
of attorney must conform with pertinent provisions of State law 
concerning its durability. Generally, in such circumstances, the power 
of attorney should provide that the authority granted will not be 
affected by the subsequent incompetence or incapacity of the grantor. 
Medical evidence or other proof of the grantor's condition may be 
required in any case.

[45 FR 64091, Sept. 26, 1980, as amended at 57 FR 39602, Sept. 1, 1992; 
59 FR 10535, Mar. 4, 1994]



Sec. 315.41  Partial redemption.

    A bond of any series may be redeemed in part at current redemption 
value, but only in an amount corresponding to one or more authorized 
denominations, upon surrender of the bond to a designated Federal 
Reserve Bank or Branch or to the Bureau of the Public Debt in accordance 
with Sec. 315.39(b). In any case in which partial redemption is 
requested, the phrase ``to the extent of $---- (face amount) and reissue 
of the remainder'' should be added to the request. Upon partial 
redemption of the bond, the remainder will be reissued as of the 
original issue date, as provided in subpart I.

[45 FR 64091, Sept. 26, 1980, as amended at 59 FR 10535, Mar. 4, 1994]



Sec. 315.42  Nonreceipt or loss of check issued in payment.

    If a Treasury check in payment of a bond surrendered for redemption 
is not received within a reasonable time or is lost after receipt, 
notice should be given to the same agency to which the bond was 
surrendered for payment. The notice should give the date the bond was 
surrendered for payment, and describe the bond by series, denomination, 
serial number, and registration, including the taxpayer identifying 
number of the owner.



Sec. 315.43  Effective date of request for payment.

    The Department of the Treasury will treat the receipt of a bond with 
an appropiate request for payment by:
    (a) A Federal Reserve Bank or Branch,
    (b) The Bureau of the Public Debt, or
    (c) A paying agent authorized to pay that bond, as the date upon 
which the rights of the parties are fixed for the purpose of payment.



Sec. 315.44  Withdrawal of request for payment.

    (a) Withdrawal by owner or coowner. An owner or coowner, who has 
surrendered a bond to a Federal Reserve Bank or Branch or to the Bureau 
of the Public Debt or an authorized paying agent with an appropriate 
request for payment, may withdraw the request if notice of intent to 
withdraw is received by the same agency prior to payment either in cash 
or through the issuance of the redemption check.
    (b) Withdrawal on behalf of deceased owner or incompetent. A request 
for payment may be withdrawn under the same conditions as in paragraph 
(a) of this section by the executor or administrator of the estate of a 
deceased owner or by the person or persons who would have been entitled 
to the bond under subpart L, or by the legal representative of the 
estate of a person under legal disability, unless surrender of the bond 
for payment has eliminated the interest of a surviving coowner or 
beneficiary. See Sec. 315.70 (b) and (c).



             Subpart I--Reissue and Denominational Exchange



Sec. 315.45  General.

    Reissue of a bond may be made only under the conditions specified in 
these regulations, and only at:
    (a) A Federal Reserve Bank or Branch, or
    (b) The Bureau of the Public Debt.

Reissue will not be made if the request is received less than one full 
calendar month before the final maturity date of a bond. The request, 
however, will be effective to establish ownership as though the reissue 
had been made.



Sec. 315.46  Effective date of request for reissue.

    The Department of the Treasury will treat the receipt by:
    (a) A Federal Reserve Bank or Branch or
    (b) The Bureau of the Public Debt of a bond and an acceptable 
request for reissue as determining the date upon

[[Page 180]]

which the rights of the parties are fixed for the purpose of reissue.

For example, if the owner or either coowner of a bond dies after the 
bond has been surrendered for reissue, the bond will be regarded as 
having been reissued in the decedent's lifetime.



Sec. 315.47  Authorized reissue--during lifetime.

    A bond belonging to an individual may be reissued in any authorized 
form of registration upon an appropriate request for the purposes 
outlined below:
    (a) Single ownership. A bond registered in single ownership form may 
be reissued--
    (1) To add a coowner or beneficiary;
    (2) To name a new owner, with or without a coowner or beneficiary, 
but only if:
    (i) The new owner is related to the previous owner by blood 
(including legal adoption) or marriage,
    (ii) The previous owner and the new owner are parties to a divorce 
or annulment, or
    (iii) The new sole owner is the trustee of a personal trust estate 
which was created by the previous owner or which designates as 
beneficiary either the previous owner or a person related to him or her 
by blood (including legal adoption) or marriage.
    (b) Coownership--(1) Reissue--to name a related individual as owner 
or coowner. During the lifetime of both coowners, a coownership bond may 
be reissued in the name of another individual related by blood 
(including legal adoption) or marriage to either coowner--
    (i) As single owner,
    (ii) As owner with one of the original coowners as beneficiary, or
    (iii) As a new coowner with one of the original coowners.
    (2) Reissue--to name either coowner alone or with another individual 
as coowner or beneficiary. During the lifetime of both coowners, a 
coownership bond may be reissued in the name of either coowner alone or 
with another individual as coowner or beneficiary if--
    (i) After issue of the submitted bond, either coowner named thereon 
marries, or the coowners are divorced or legally separated from each 
other, or their marriage is annulled; or
    (ii) Both coowners on the submitted bond are related by blood 
(including legal adoption) or marriage to each other.
    (3) Reissue--to name the trustee of a personal trust estate. A bond 
registered in coownership form may be reissued to name a trustee of a 
personal trust estate created by either coowner or by some other person 
if:
    (i) Either coowner is a beneficiary of the trust, or
    (ii) A beneficiary of the trust is related by blood or marriage to 
either coowner.
    (c) Beneficiary. A bond registered in beneficiary form may be 
reissued--
    (1) To name the beneficiary as coowner;
    (2) To eliminate the name of the owner and to name as owner a 
custodian for the beneficiary, if a minor, under a statute authorizing 
gifts to minors;
    (3) To eliminate the beneficiary or to substitute another individual 
as beneficiary, but only if the request is supported by the certified 
consent of the beneficiary or by proof of his or her death; or
    (4) To eliminate the names of the owner and the beneficiary and to 
name as new owner the trustee of the personal trust estate which was 
created by the previous owner or which designates as beneficiary either 
the previous owner or a person related to him or her by blood (including 
legal adoption) or marriage, but only if the request is supported by the 
certified consent of the beneficiary or by proof of his or her death.



Sec. 315.48  Restrictions on reissue.

    (a) Denominational exchange. Reissue is not permitted solely to 
change denominations.
    (b) United States Treasury. Reissue may not be made to eliminate the 
United States Treasury as coowner or beneficiary.



Sec. 315.49  Correction of errors.

    A bond may be reissued to correct an error in registration upon 
appropriate request, supported by satisfactory proof of the error.

[[Page 181]]



Sec. 315.50  Change of name.

    An owner, coowner, or beneficiary whose name is changed by marriage, 
divorce, annulment, order of court, or in any other legal manner after 
the issue of bond should submit the bond with a request for reissue to 
substitute the new name for the name inscribed on the bond. Documentary 
evidence may be required in any appropriate case.



Sec. 315.51  Requests for reissue.

    A request for reissue of bonds in coownership form during the 
lifetime of the coowners must be signed by both coowners, except that a 
request solely to eliminate the name of one coowner may be signed by 
that coowner only. A bond registered in beneficiary form may be reissued 
upon the request of the owner, supported by the certified consent of the 
beneficiary or by proof of his or her death. Public Debt forms are 
available for requesting reissue.



                     Subpart J--Certifying Officers



Sec. 315.55  Individuals authorized to certify.

    The following individuals are authorized to act as certifying 
officers for the purpose of certifying a request for payment, reissue, 
or a signature to a Public Debt form:
    (a) Officers generally authorized--(1) At banks, trust companies, 
and member organizations of the Federal Home Loan Bank System. (i) Any 
officer of a bank incorporated in the United States, the territories or 
possessions of the United States, or the Commonwealth of Puerto Rico.
    (ii) Any officer of a trust company incorporated in the United 
States, the territories or possessions of the United States, or the 
Commonwealth of Puerto Rico.
    (iii) Any officer of an organization that is a member of the Federal 
Home Loan Bank System. This includes Federal savings and loan 
associations.
    (iv) Any officer of a foreign branch or a domestic branch of an 
institution described in paragraphs (a) (1)(i) through (iii) of this 
section.
    (v) Any officer of a Federal Reserve Bank, a Federal Land Bank, or a 
Federal Home Loan Bank.
    (vi) Any employee of an institution described in paragraphs 
(a)(1)(i) through (v) of this section, who is expressly authorized to 
certify by the institution.

Certification by these officers or designated employees must be 
authenticated by a legible imprint either of a corporate stamp of the 
institution or of the issuing or paying agent's stamp. An employee 
authorized to certify requests must sign his or her name over the title 
``Designated Employee''.
    (2) At issuing agents that are not banks or trust companies. Any 
officer of an organization, not a bank or a trust company, that is 
qualified as an issuing agent for savings bonds. The agent's stamp must 
be imprinted in the certification.
    (3) By United States officials. Any judge, clerk, or deputy clerk of 
a United States court, including United States courts for the 
territories and possessions of the United States, and the Commonwealth 
of Puerto Rico or any United States Commissioner or United States 
Attorney.
    (b) Officers with limited authority--(1) In the Armed Forces. Any 
commissioned officer or warrant officer of the Armed Forces of the 
United States, but only for members of the respective services, their 
families, and civilian employees at posts, bases, or stations. The 
certifying officer must indicate his or her rank and state that the 
individual signing the request is one of the class whose request the 
certifying officer is authorized to certify.
    (2) At Veterans Administration facilities, Federal penal 
institutions, and United States Public Health Service hospitals. Any 
officer in charge of a home, hospital, or other facility of the Veterans 
Administration, but only for the patients, or employees of the facility; 
any officer of a Federal penal institution or a United States Public 
Health Service hospital expressly authorized to certify by the Secretary 
of the Treasury or his designee, but only for the inmates, patients or 
employees of the institution involved. Officers of Veterans 
Administration facilities, Federal penal institutions, and Public

[[Page 182]]

Health Service hospitals must use the stamp of the particular 
institution or service.
    (c) Authorized officers in foreign countries. Any United States 
diplomatic or consular representative, or the officer of a foreign 
branch of a bank or trust company incorporated in the United States 
whose signature is attested by an imprint of the corporate stamp or is 
certified to the Department of the Treasury. If none of these 
individuals is available, a notary public or other officer authorized to 
administer oaths may certify, but his or her official character and 
jurisdiction must be certified by a United States diplomatic or consular 
officer under seal of his or her office.
    (d) Authorized officers in particular localities. The Governor and 
the Treasurer of Puerto Rico; the Governor and the Commissioner of 
Finance of the Virgin Islands; the Governor and the Director of Finance 
of Guam; and the Governor and the Director of Administrative Services of 
American Samoa; and designated officers of the Panama Canal Commission.
    (e) Special provisions. If no certifying officer is readily 
accessible, the Commissioner of the Public Debt, Deputy Commissioner, 
any Assistant Commissioner, or other designated official of the Bureau 
or of a Federal Reserve Bank or Branch is authorized to make special 
provision for any particular case.



Sec. 315.56  General instructions and liability.

    (a) Certification procedure. Certifying officers at financial 
institutions qualified as paying agents should observe the Treasury's 
payment instructions and identification guidelines in certifying savings 
bonds and savings notes being forwarded to a designated Federal Reserve 
Bank for any transaction. Other certifying officers should provide 
certification services for persons with whom they have substantial 
personal acquaintance, and for other persons whose identities have been 
unmistakably established. A notation showing exactly how identification 
was established should be placed on the back of the security or Public 
Debt form, or in a separate record. As part of the certification, the 
certifying officer must affix his or her official signature, title and 
address, the exact date of execution and, where one is available, a 
corporate stamp or issuing or paying agent's stamp.
    (b) Liability. The certifying officer and, if such person is an 
officer or an employee of an organization, the organization will be held 
fully responsible for the adequacy of the identification.

[45 FR 64091, Sept. 26, 1980, as amended at 59 FR 10535, Mar. 4, 1994]



Sec. 315.57  When a certifying officer may not certify.

    Certifying officers may not certify the requests for payment of 
bonds, or appropriate Public Debt forms if, in their own right or in a 
representative capacity, they
    (a) Have an interest in the bonds, or
    (b) Will, by virtue of the requests being certified, acquire an 
interest in the bonds.



Sec. 315.58  Forms to be certified.

    When required in the instructions on a Public Debt form, the form 
must be signed before an authorized certifying officer.



    Subpart K--Minors, Incompetents, Aged Persons, Absentees, et al.



Sec. 315.60  Conditions for payment to representative of an estate.

    (a) General. The representative of an estate of an owner who is a 
minor, an aged person, incompetent, absentee, et al., may receive upon 
request--
    (1) If the registration shows the name and capacity of the 
representative;
    (2) If the registration shows the capacity but not the name of the 
representative and the request is accompanied by appropriate evidence; 
or
    (3) If the registration includes neither the name of the 
representative nor his or her capacity but the request is accompanied by 
appropriate evidence.
    (b) Evidence. Appropriate evidence for paragraphs (a) (2) and (3) of 
this section includes a certified copy of the letters of appointment or, 
if the representative is not appointed by a court, other proof of 
qualification. Except in thee

[[Page 183]]

case of corporate fiduciaries, the evidence must show that the 
appointment is in full force and be dated not more than one year prior 
to the presentation of the bond for payment. The request for payment 
appearing on the back of a bond must be signed by the representative as 
such, for example, ``John S. Jones, guardian (committee) of the estate 
of Henry W. Smith, a minor (an incompetent).''



Sec. 315.61  Payment after death.

    After the death of the ward, and at any time prior to the 
representative's discharge, the representative of the estate will be 
entitled to obtain payment of a bond to which the ward was solely 
entitled.



Sec. 315.62  Payment to minors.

    If the owner of a savings bond is a minor and the form of 
registration does not indicate that there is a representative of the 
minor's estate, payment will be made to the minor upon his or her 
request, provided the minor is of sufficient competency to sign the 
request for payment and to understand the nature of the transaction. In 
general, the fact that the request for payment has been signed by a 
minor and certified will be accepted as sufficient proof of competency 
and understanding.



Sec. 315.63  Payment to a parent or other person on behalf of a minor.

    If the owner of a savings bond is a minor and the form of 
registration does not indicate that there is a representative of his or 
her estate, and if the minor is not of sufficient competency to sign the 
request for payment and to understand the nature of the transaction, 
payment will be made to either parent with whom the minor resides or to 
whom legal custody has been granted. If the minor does not reside with 
either parent, payment will be made to the person who furnishes the 
chief support for the minor. The request must appear on the back of the 
bond in one of the following forms:
    (a) Request by parent.

    I certify that I am the mother of John C. Jones (with whom he 
resides) (to whom legal custody has been granted). He is ---- years of 
age and is not of sufficient understanding to make this request.

Mary Jones on behalf of John C. Jones.

    (b) Request by other person.

    I certify that John C. Jones does not reside with either parent and 
that I furnish his chief support. He is ---- years of age and is not of 
sufficient understanding to make this request.

Alice Brown, grandmother, on behalf of John C. Jones.



Sec. 315.64  Payment, reinvestment, or exchange--voluntary guardian of an incapacitated person.

    (a) Payment of bonds. When an adult owner of bonds is incapable of 
requesting payment as a result of incapacity and there is no other 
person legally qualified to do so, the relative, or other person, 
responsible for the owner's care and support may submit an application 
for recognition as voluntary guardian for the purpose of redeeming the 
owner's bonds, if the total redemption value of all of the owner's bonds 
does not exceed $20,000. The redemption value of the bonds shall be 
determined as of the date the bonds are received, accompanied by an 
appropriate request for payment. If the total redemption value exceeds 
$20,000, a legal representative must be appointed, as set forth in 
Sec. 315.60.
    (b) Reinvestment of bonds. If the bonds have finally matured and it 
is desired to redeem them and reinvest the proceeds in other savings 
bonds, the new bonds must be registered in the name of the incapacitated 
person, followed by words showing that he or she is under voluntary 
guardianship; for example, ``John Jones 123-45-6789, under voluntary 
guardianship''. A living coowner or beneficiary named on the matured 
bonds must be designated on the new bonds, unless such person furnishes 
a certified statement consenting to omission of his or her name. If an 
amount insufficient to purchase an additional bond of any authorized 
denomination of either series remains after the reinvestment, the 
voluntary guardian may furnish additional funds sufficient to purchase 
another bond of either series of the lowest available denomination. If 
additional funds are not furnished, the remaining amount will be paid to 
the voluntary guardian for

[[Page 184]]

the use and benefit of the incapacitated person.
    (c) Exchange of bonds. The provisions for reinvestment of the 
proceeds of matured bonds are equally applicable to any authorized 
exchange of bonds of one series for those of another.

[57 FR 39602, Sept. 1, 1992]



Sec. 315.65  Reissue.

    A bond on which a minor or other person under legal disability is 
named as the owner or coowner, or in which he or she has an interest, 
may be reissued under the following conditions:
    (a) A minor for whose estate no representative has been appointed 
may request reissue if the minor is of sufficient competency to sign his 
or her name to the request and to understand the nature of the 
transaction.
    (b) A bond on which a minor is named as beneficiary or coowner may 
be reissued in the name of a custodian for the minor under a statute 
authorizing gifts to minors upon the request of the adult whose name 
appears on the bond as owner or coowner.
    (c) A minor coowner for whose estate no representative has been 
appointed, may be named sole owner upon the request of the competent 
coowner.
    (d) Reissue to eliminate the name of a minor or incompetent for 
whose estate a legal representative has been appointed is permitted only 
if supported by evidence that a court has authorized the representative 
of the minor's or incompetent's estate to request the reissue. See 
Sec. 315.23.

Except to the extent provided in paragraphs (a) through (d), of this 
section, reissue will be restricted to a form of registration which does 
not adversely affect the existing ownership or interest of a minor who 
is not of sufficient understanding to make a request, or other person 
under legal disability. Requests for reissue should be executed by the 
person authorized to request payment under Secs. 315.60 and 315.63, or 
the person who may request recognition as voluntary guardian under 
Sec. 315.64.

[45 FR 64091, Sept. 26, 1980. Redesignated at 57 FR 39602, Sept. 1, 
1992]



            Subpart L--Deceased Owner, Coowner or Beneficiary



Sec. 315.70  General rules governing entitlement.

    The following rules govern ownership or entitlement where one or 
both of the persons named on a bond have died without the bond having 
been surrendered for payment or reissue:
    (a) Single owner bond. If the owner of a bond registered in single 
ownership form has died, the bond becomes the property of that 
decedent's estate, and payment or reissue will be made as provided in 
this subpart.
    (b) Coowner bond--(1) One coowner deceased. If one of the coowners 
named on a bond has died, the surviving coowner will be recognized as 
its sole and absolute owner, and payment or reissue will be made as 
though the bond were registered in the name of the survivor alone. Any 
request for reissue by the surviving coowner must be supported by proof 
of death of the other coowner.
    (2) Both coowners deceased. If both coowners named on a bond have 
died, the bond becomes the property of the estate of the coowner who 
died last, and payment or reissue will be made as if the bond were 
registered in the name of the last deceased coowner alone. Proof of 
death of both coowners will be required to establish the order of death.
    (3) Simultaneous death of both coowners. If both coowners die under 
conditions where it cannot be established, either by presumption of law 
or otherwise, which coowner died first, the bond becomes the property of 
both equally, and payment or reissue will be made accordingly.
    (c) Beneficiary bond--(1) Owner deceased. If the owner of a bond 
registered in beneficiary form has died and is survived by the 
beneficiary, upon proof of death of the owner, the beneficiary will be 
recognized as the sole and absolute owner of the bond. Payment or 
reissue will be made as though the bond were registered in the 
survivor's name alone. A request for payment or reissue by the 
beneficiary must be supported by proof of death of the owner.
    (2) Beneficiary deceased. If the beneficiary's death occurs before, 
or simultaneous with, that of the registered

[[Page 185]]

owner, payment or reissue will be made as though the bond were 
registered in the owner's name alone. Proof of death of the owner and 
beneficiary is required to establish the order of death.
    (d) Nonresident aliens. If the person who becomes entitled to a bond 
because of the death of an owner is an alien who is a resident of an 
area with respect to which the Department of the Treasury restricts or 
regulates the delivery of checks drawn against funds of the United 
States or its agencies or instrumentalities, delivery of the redemption 
check will not be made so long as the restriction applies. See 
Department of the Treasury Circular No. 655, current revision (31 CFR 
part 211).



Sec. 315.71  Estate administered.

    (a) During administration. The legal representative of an estate may 
request payment of bonds, including interest or redemption checks, 
belonging to the estate or may have the bonds reissued in the names of 
the persons entitled to share in the estate under the following 
conditions:
    (1) When there is more than one legal representative, all must join 
in the request for payment or reissue, unless Sec. 315.75(a)(1) or (b) 
applies.
    (2) The request for payment or reissue must be signed in the form: 
``John A. Jones, administrator of the estate (or executor of the will) 
of Henry M. Jones, deceased''. The request must be supported by evidence 
of the legal representative's authority in the form of a court 
certificate or a certified copy of the legal representative's letters of 
appointment which must be dated within six months of the date of 
presentation of the bond, unless the evidence shows that the appointment 
was made within one year prior to the presentation of the bond.
    (3) For reissue, the legal representative must certify that each 
person in whose name reissue is requested is entitled to the extent 
specified and must certify that each person has consented to the 
reissue. If a person in whose name reissue is requested desires to name 
a coowner or beneficiary, the person must execute an additional request 
for reissue on the appropriate form.
    (b) After administration. If the estate of the decedent has been 
settled through judicial proceedings, the bond and interest and 
redemption checks will be paid, or the bond will be reissued, upon the 
request of the person shown to be entitled by the court order. The 
request must be supported by a certified copy of the legal 
representative's court-approved final account, the decree of 
distribution, or other pertinent court records. If two or more persons 
have an interest in the bond, they must enter into an agreement 
concerning the bond's disposition. If the person entitled desires to 
name a coowner or beneficiary, a separate request must be made on an 
appropriate form.
    (c) Special provisions for small amounts. Special procedures are 
available for establishing entitlement to, or effecting disposition of, 
savings bonds and interest and redemption checks if the aggregate face 
amount, excluding interest checks, does not exceed $1,000.



Sec. 315.72  Estate not administered.

    (a) Special State law provisions. A request for payment or reissue 
of a bond by the person who has qualified under State law to receive or 
distribute the assets of a decedent's estate will be accepted, provided 
evidence of the person's authority is submitted.
    (b) Agreement of persons entitled. If there is no legal 
representative for the estate of a decedent, the bonds will be paid to, 
or reissued in the name of, the persons entitled, pursuant to an 
agreement and request executed by all persons entitled to share in the 
decedent's personal estate. If the persons entitled to share in the 
decedent's personal estate include minors or incompetents, payment or 
reissue of the bonds must be made to them or in their names unless their 
interest in the bonds is otherwise protected.
    (c) Creditors. An institutional creditor of a deceased owner's 
estate is entitled to payment only to the extent of its claim.
    (d) Special provisions for payment of small amounts--survivors of 
the decedent. (1) If the face amount of the bond does not exceed $500 
and there is no legal representative of the deceased owner's estate, the 
bond will be paid upon the

[[Page 186]]

request of the person who paid the burial expenses and who has not been 
reimbursed.
    (2) If there is no legal representative of the estate of a decedent 
who died without a will, and the total face amount of bonds in the 
estate does not exceed $1,000 (face amount), the bonds may be paid to 
the decedent's survivors upon request in the following order of 
precedence:
    (i) Surviving spouse;
    (ii) If no surviving spouse, to the child or children of the 
decedent, and the descendants of deceased children by representation;
    (iii) If none of the above, to the parents of the decedent, or the 
survivor;
    (iv) If none of the above, to the brothers and sisters, and the 
descendants of deceased brothers or sisters by representation;
    (v) If none of the above, to other next-of-kin, as determined by the 
laws of the owner's domicile at death;
    (vi) If none of the above, to persons related to the decedent by 
marriage.

The payment pursuant to this subsection shall be made upon the request 
and agreement of the survivors to receive the redemption proceeds 
individually and for the account of any persons entitled. Interest 
checks held for the estate of a decedent will be distributed with the 
bonds.



                         Subpart M--Fiduciaries



Sec. 315.75  Payment or reissue during the existence of the fiduciary estate.

    (a) Payment or reissue before maturity--(1) Request from the 
fiduciary named in the registration. A request for reissue or payment 
prior to maturity must be signed by all of the fiduciaries unless by 
statute, decree of court, or the terms of the governing instrument, any 
lesser number may properly execute the request. If the fiduciaries named 
in the registration are still acting, no further evidence will be 
required. In other cases, evidence to support the request will be 
required, as specified:
    (i) Fiduciaries by title only. If the bond is registered only in the 
titles, without the names, of fiduciaries not acting as a board, 
satisfactory evidence of their incumbency must be furnished, except in 
the case of bonds registered in the title of public officers as 
trustees.
    (ii) Boards, committees, commissions, etc. If a bond is registered 
in the name of a governing body which is empowered to act as a unit, and 
which holds title to the property of a religious, educational, 
charitable or nonprofit organization or a public corporation, the 
request should be signed in the name of the body by an authorized 
person. Ordinarily, a signed and certified request will be accepted 
without further evidence.
    (iii) Corporate fiduciaries. If a bond is registered in the name of 
a public or private corporation or a governmental body as fiduciary, the 
request must be signed by an authorized officer in the name of the 
organization as fiduciary. Ordinarily, a signed and certified request 
will be accepted without further evidence.
    (2) Trustee of a common trust fund. A bond held by a financial 
institution in a fiduciary capacity may be reissued in the name of the 
institution as trustee of its common trust fund to the extent that 
participation in the common trust fund is authorized by law or 
regulation. The request for reissue should be executed by the 
institution and any cofiduciary.
    (3) Successor fiduciary. If the fiduciary in whose name the bond is 
registered has been replaced by another fiduciary, satisfactory evidence 
of successorship must be furnished.
    (b) Payment at or after final maturity. At or after final maturity, 
a request for payment signed by any one or more of the fiduciaries will 
be accepted. Payment will be made by check drawn as the bond is 
registered.



Sec. 315.76  Payment or reissue after termination of the fiduciary estate.

    A bond registered in the name or title of a fiduciary may be paid or 
reissued to the person who has become entitled by reason of the 
termination of a fiduciary estate. Requests for reissue made by a 
fiduciary pursuant to the termination of a fiduciary estate should be 
made on the appropriate form. Requests for payment or reissue by other 
than the fiduciary must be accompanied by evidence to show that

[[Page 187]]

the person has become entitled in accordance with applicable State law 
or otherwise. When two or more persons have become entitled, the request 
for payment or reissue must be signed by each of them.



Sec. 315.77  Exchanges by fiduciaries.

    Fiduciaries are authorized to request an exchange of bonds of one 
series for those of another, pursuant to any applicable Department of 
the Treasury offering. A living coowner or beneficiary named on the 
bonds submitted in exchange may be retained in the same capacity on the 
new bonds.



     Subpart N--Private Organizations (Corporations, Associations, 
    Partnerships, etc.) and Governmental Agencies, Units and Officers



Sec. 315.80  Payment to corporations or unincorporated associations.

    A bond registered in the name of a private corporation or an 
unincorporated association will be paid to the corporation or 
unincorporated association upon a request for payment on its behalf by 
an authorized officer. The signature to the request should be in the 
form, for example, ``The Jones Coal Company, a corporation, by John 
Jones, President'', or ``The Lotus Club, an unincorporated association, 
by William A. Smith, Treasurer''. A request for payment so signed and 
certified will ordinarily be accepted without further evidence of the 
officer's authority.



Sec. 315.81  Payment to partnerships.

    A bond registered in the name of an existing partnership will be 
paid upon a request for payment signed by a general partner. The 
signature to the request should be in the form, for example, ``Smith and 
Jones, a partnership, by John Jones, a general partner''. A request for 
payment so signed and certified will ordinarily be accepted as 
sufficient evidence that the partnership is still in existence and that 
the person signing the request is authorized.



Sec. 315.82  Reissue or payment to successors of corporations, unincorporated associations, or partnerships.

    A bond registered in the name of a private corporation, an 
unincorporated associations, or a partnership which has been succeeded 
by another corporation, unincorporated association, or partnership by 
operation of law or otherwise, in any manner whereby the business or 
activities of the original organization are continued without 
substantial change, will be paid to or reissued in the name of the 
succeeding organization upon appropriate request on its behalf, 
supported by satisfactory evidence of successorship. The appropriate 
form should be used.



Sec. 315.83  Reissue or payment on dissolution of corporation or partnership.

    (a) Corporations. A bond registered in the name of a private 
corporation which is in the process of dissolution will be paid to the 
authorized representative of the corporation upon a request for payment, 
supported by satisfactory evidence of the representative's authority. At 
the termination of dissolution proceedings, the bond may be reissued 
upon the request of the authorized representative in the names of those 
persons, other than creditors, entitled to the assets of the 
corporation, to the extent of their respective interests. Proof will be 
required that all statutory provisions governing the dissolution of the 
corporation have been complied with and that the persons in whose names 
reissue is requested are entitled and have agreed to the reissue. If the 
dissolution proceedings are under the direction of a court, a certified 
copy of an order of the court, showing the authority of the 
representative to make the distribution requested must be furnished.
    (b) Partnerships. A bond registered in the name of a partnership 
which has been dissolved by death or withdrawal of a partner, or in any 
other manner--
    (1) Will be paid upon a request for payment by any partner or 
partners authorized by law to act on behalf of the dissolved 
partnership, or

[[Page 188]]

    (2) Will be paid to or reissued in the names of the persons entitled 
as the result of such dissolution to the extent of their respective 
interests, except that reissue will not be made in the names of 
creditors.

The request must be supported by satisfactory evidence of entitlement, 
including proof that the debts of the partnership have been paid or 
properly provided for. The appropriate form should be used.



Sec. 315.84  Payment to certain institutions.

    A bond registered in the name of a church, hospital, home, school, 
or similar institution, without reference in the registration to the 
manner in which it is organized or governed or to the manner in which 
title to its property is held, will be paid upon a request for payment 
signed on behalf of such institution by an authorized representative. A 
request for payment signed by a pastor of a church, superintendent of a 
hospital, president of a college, or by any official generally 
recognized as having authority to conduct the financial affairs of the 
particular institution will ordinarily be accepted without further proof 
of authority. The signature to the request should be in the form, for 
example, ``Shriners' Hospital for Crippled Children, St. Louis, MO, by 
William A. Smith, Superintendent'', or ``St. Mary's Roman Catholic 
Church, Albany, NY, by the Rev. John Smyth, Pastor''.



Sec. 315.85  Reissue in name of trustee or agent for reinvestment purposes.

    A bond registered in the name of a religious, educational, 
charitable or nonprofit organization, whether or not incorporated, may 
be reissued in the name of a financial institution, or an individual, as 
trustee or agent. There must be an agreement between the organization 
and the trustee or agent holding funds of the organization, in whole or 
in part, for the purpose of investing and reinvesting the principal and 
paying the income to the organization. Reissue should be requested on 
behalf of the organization by an authorized officer using the 
appropriate form.



Sec. 315.86  Reissue upon termination of investment agency.

    A bond registered in the name of a financial institution, or 
individual, as agent for investment purposes only, under an agreement 
with a religious, an educational, a charitable, or a nonprofit 
organization, may be reissued in the name of the organization upon 
termination of the agency. The former agent should request such reissue 
and should certify that the organization is entitled by reason of the 
termination of the agency. If such request and certification are not 
obtainable, the bond will be reissued in the name of the organization 
upon its own request, supported by satisfactory evidence of the 
termination of the agency. The appropriate form should be used.



Sec. 315.87  Payment to governmental agencies, units, or their officers.

    (a) Agencies and units. A bond registered in the name of a State, 
county, city, town, village, or in the name of a Federal, State, or 
local governmental agency, such as a board, commission, or corporation, 
will be paid upon a request signed in the name of the governmental 
agency or unit by an authorized officer. A request for payment so signed 
and certified will ordinarily be accepted without further proof of the 
officer's authority.
    (b) Officers. A bond registered in the official title of an officer 
of a governmental agency or unit will be paid upon a request for payment 
signed by the officer. The request for payment so signed and certified 
will ordinarily be accepted as proof that the person signing is the 
incumbent of the office.



                   Subpart O--Miscellaneous Provisions



Sec. 315.90  Waiver of regulations.

    The Commissioner of the Public Debt, as designee of the Secretary of 
the Treasury, may waive or modify any provision or provisions of these 
regulations. He may do so in any particular case or class of cases for 
the convenience of the United States or in order to relieve any person 
or persons of unnecessary hardship:

[[Page 189]]

    (a) If such action would not be inconsistent with law or equity, (b) 
if it does not impair any existing rights, and (c) if he is satisfied 
that such action would not subject the United States to any substantial 
expense or liability.



Sec. 315.91  Additional requirements; bond of indemnity.

    The Commissioner of the Public Debt, as designee of the Secretary of 
the Treasury, may require
    (a) Such additional evidence as he may consider necessary or 
advisable, or
    (b) A bond of indemnity, with or without surety, in any case in 
which he may consider such a bond necessary for the protection of the 
interests of the United States.



Sec. 315.92  Preservation of rights.

    Nothing contained in these regulations shall be construed to limit 
or restrict existing rights which holders of savings bonds previously 
issued may have acquired under circulars offering the bonds for sale or 
under the regulations in force at the time of the purchase.



Sec. 315.93  Supplements, amendments, or revisions.

    The Secretary of the Treasury may at any time, or from time to time, 
prescribe additional, supplemental, amendatory, or revised rules and 
regulations governing the United States Savings Bonds and Savings Notes 
to which this circular applies.



PART 316--OFFERING OF UNITED STATES SAVINGS BONDS, SERIES E--Table of Contents




Sec.
316.1  Offering of bonds.
316.2  Description of bonds.
316.3  Governing regulations.
316.4  Registration.
316.5  Limitation on holdings.
316.6  Purchase of bonds.
316.7  Delivery of bonds.
316.8  Extended terms and yields for outstanding bonds.
316.9  Taxation.
316.10  Payment or redemption.
316.11  Reservation as to issue of bonds.
316.12  Fiscal agents.
316.13  Reservation as to terms of offer.

    Authority: 31 U.S.C. 3105 and 5 U.S.C. 301.

    Source: 57 FR 14276, Apr. 17, 1992, unless otherwise noted.



Sec. 316.1  Offering of bonds.

    The Secretary of the Treasury offered for sale to the people of the 
United States, United States Savings Bonds of Series E, hereinafter 
generally referred to as ``Series E bonds'' or ``bonds''.
    This offer was terminated as of December 31, 1979, except that, as 
to bonds purchased under payroll savings plans and employee plans, the 
offer was terminated as of June 30, 1980.



Sec. 316.2  Description of bonds.

    (a) General. Series E bonds bear a facsimile of the signature of the 
Secretary of the Treasury and of the Seal of the Department of the 
Treasury. They were issued only in registered form and are 
nontransferable.
    (b) Denominations and prices. Series E bonds were issued on a 
discount basis. The denominations and issue prices were:

 
                       Denomination                          Issue price
 
$25.......................................................        $18.75
50........................................................         37.50
75........................................................         56.25
100.......................................................         75.00
200.......................................................        150.00
500.......................................................        375.00
1,000.....................................................        750.00
10,000....................................................      7,500.00
100,000\1\................................................     75,000.00
 
\1\ The $100,000 denomination was available only for purchase by
  trustees of employee savings and savings and vacation plans (see
  paragraph (b) of Sec.  316.5).

    (c) Inscription and issue. At the time of issue, the issuing agent:
    (1) Inscribed on the face of each bond the name, social security 
number and address of the owner, and the name of the beneficiary, if 
any, or the name, social security number and address of the first-named 
coowner and the name of the other coowner (the inscription of the social 
security number was required for bonds issued on or after January 1, 
1974);
    (2) Entered the issue date in the upper right-hand portion of the 
bond; and
    (3) Imprinted the agent's validation indicia in the lower right-hand 
portion to show the date the bond was actually inscribed. A bond was 
valid only if an

[[Page 190]]

authorized issuing agent received payment therefor and duly inscribed, 
dated and imprinted validation indicia on the bond.
    (d) Term. A Series E bond was dated as of the first day of the month 
in which payment of the purchase price was received by an agent 
authorized to issue the bonds. This date is the issue date. The bonds 
mature as shown in Sec. 316.8. The bond may not be called for redemption 
by the Secretary of the Treasury prior to maturity or the end of any 
extended maturity period (see paragraph (a) of Sec. 316.8). The bond may 
be redeemed at the owner's option at any time at fixed redemption 
values.
---------------------------------------------------------------------------

    \1\ [Reserved]
---------------------------------------------------------------------------

    (e) Investment yield (interest). The investment yield (interest) on 
Series E bonds is defined in paragraphs (c) and (d) of Sec. 316.8. 
Beginning in the third month from its issue date, a bond increased in 
redemption value on the first day of each month, up to and including the 
thirtieth month from issue date, so as to provide for such period an 
investment yield of no less than 4 percent per annum, compounded 
semiannually. Thereafter, its redemption value increases at the 
beginning of each successive half-year period. The interest is paid as 
part of the redemption value.



Sec. 316.3  Governing regulations.

    Series E bonds are subject to the regulations of the Department of 
the Treasury, now or hereafter prescribed, governing United States 
Savings Bonds of Series A, B, C, D, E, F, G, H, J and K, contained in 31 
CFR part 315, also published as Department of the Treasury Circular No. 
530, current revision.\2\
---------------------------------------------------------------------------

    \2\ Copies may be obtained from any designated Federal Reserve Bank 
or Branch or the Bureau of the Public Debt, 200 Third Street, 
Parkersburg, WV 26106-1328.

[57 FR 14276, Apr. 17, 1992, as amended at 59 FR 10535, Mar. 4, 1994]



Sec. 316.4  Registration.

    Series E bonds were permitted to be registered as set forth in 
subpart B of 31 CFR part 315, also published as Department of the 
Treasury Circular No. 530, current revision.



Sec. 316.5  Limitation on holdings.

    (a) General limitation. The amount of Series E bonds, originally 
issued during any one calendar year, that could be held by any one 
person, computed in accordance with the governing regulations, ranged 
from $5,000 (face amount) to $20,000 (face amount), depending upon the 
issue date.
    (b) Special limitation for employee savings plans. A special 
limitation for employee savings plans was provided, which was $2,000 
(face amount) multiplied by the highest number of participants in any 
employee savings plan, as defined in paragraph (b)(1) of this section, 
at any time during the year in which the bonds were issued. The plan had 
to be established, as set forth below.
    (1) Definition of plan and conditions of eligibility. (i) The 
employee savings plan must have been established by the employer for the 
exclusive and irrevocable benefit of employees or their beneficiaries, 
afforded employees the means of making regular savings from their wages 
through payroll deduction, and provided for employer contributions to be 
added to such savings.
    (ii) The entire assets thereof must have been credited to the 
individual accounts of participating employees and the assets so 
credited could be distributed only to the employees or their 
beneficiaries, except as otherwise provided herein.
    (iii) Series E bonds were to be purchased only with assets credited 
to the accounts of participating employees and only if the amount taken 
from any account at any time for that purpose was equal to the purchase 
price of a bond or bonds in an authorized denomination or denominations, 
and shares therein were credited to the accounts of the individuals from 
whom the purchase price thereof was derived, in amounts corresponding 
with such shares. For example, if $37.50 credited to the account of John 
Jones was commingled with funds credited to the accounts of other 
employees to make a total of $7,500, with which a Series E bond in the 
denomination of $10,000 (face amount) was purchased in December 1978 and 
registered in the name and title of the trustee, the plan must have 
provided, in effect, that John Jones'

[[Page 191]]

account would be credited to show that he was the owner of a Series E 
bond in the denomination of $50 (face amount) bearing the issue date of 
December 1, 1978.
    (iv) Each participating employee has an irrevocable right at any 
time to demand and receive from the trustee all assets credited to his 
or her account or the value thereof, if he or she so prefers, without 
regard to any condition other than the loss or suspension of the 
privilege of participating further in the plan. However, a plan was not 
deemed to be inconsistent herewith if it limited or modified the 
exercise of any such right by providing that the employer's contribution 
did not vest absolutely until the employee had made contributions under 
the plan in each of not more than 60 calendar months succeeding the 
month for which the employer's contribution was made.
    (v) Upon the death of an employee, his or her beneficiary has the 
absolute and unconditional right to demand and receive from the trustee 
all assets credited to the account of the employee, or the value 
thereof, if he or she so prefers.
    (vi) When settlement is made with an employee, or his or her 
beneficiary, with respect to any bond registered in the name and title 
of the trustee in which the employee has a share (see paragraphs (b)(1) 
(ii) and (iii) of this section), the bond must be submitted for 
redemption or reissue to the extent of such share. If an employee or his 
or her beneficiary is to receive distribution in kind, bonds bearing the 
same issue dates as those credited to the employee's account will be 
reissued in the name of the distributee to the extent to which he or she 
is entitled, in any authorized form of registration, upon the request 
and certification of the trustee, in accordance with the governing 
reguations.
    (2) Definitions of terms used in paragraph (b)--related provisions. 
(i) The term savings plan includes any regulations issued under the plan 
with regard to Series E bonds. A trustee desiring to purchase bonds in 
excess of the general limitation in any calendar year should have 
submitted to the Federal Reserve Bank of the district a copy of the 
plan, any such regulations, and the trust agreement, all certified to be 
true copies, in order to establish eligibility.
    (ii) The term assets means all funds, including the employee 
contributions and employer contributions and assets purchased therewith, 
as well as accretions thereto, such as dividends on stock, the increment 
in value on bonds and all other income; but, notwithstanding any other 
provision of this paragraph, the right to demand and receive all assets 
credited to the account of an employee shall not be construed to require 
the distribution of assets in kind when it would not be possible or 
practicable to make such distribution; for example, Series E bonds may 
not be reissued in unauthorized denominations, and fractional shares of 
stock are not readily distributable in kind.
    (iii) The term beneficiary means the person or persons, if any, 
designated by the employee in accordance with the terms of the plan to 
receive the benefits of the trust upon his or her death, or the estate 
of the employee, and the term distributee means the employee, or his or 
her beneficiary.



Sec. 316.6  Purchase of bonds.

    Series E bonds were purchased, as follows:
    (a) Over-the-counter for cash--(1) Bonds registered in names of 
natural persons in their own right only. At such incorporated banks, 
trust companies, and other agencies as had been duly qualified as 
issuing agents.
    (2) Bonds registered in names of trustees of employee savings plans. 
At such incorporated bank, trust company, or other agency, duly 
qualified as an issuing agent, provided the agent was trustee of an 
approved employee savings plan eligible for the special limitation in 
paragraph (b) of Sec. 316.5 and prior approval to issue the bonds was 
obtained from the Federal Reserve Bank of the agent's district.
    (3) Bonds registered in all authorized forms. At Federal Reserve 
Banks and Branches and at the Department of the Treasury, Washington, DC 
20226.
    (b) On mail order. By mail upon application to any Federal Reserve 
Bank or Branch or to the Department of the Treasury, accompanied by a 
remittance to cover the issue price. Any form of exchange, including 
personal

[[Page 192]]

checks, was accepted, subject to collection. Checks or other forms of 
exchange were to be drawn to the order of the Federal Reserve Bank or 
the United States Treasury, as the case may be. Checks payable by 
endorsement were not acceptable. Any depositary qualified pursuant to 
the provisions of 31 CFR part 203, also published as Department of the 
Treasury Circular No. 92, current revision, was permitted to make 
payment by credit for bonds applied for on behalf of its customers up to 
any amount for which it was qualified in excess of existing deposits, 
when so notified by the Federal Reserve Bank of its district.
    (c) Savings stamps. The sale of United States Savings Stamps was 
terminated effective June 30, 1970. However, outstanding stamps affixed 
in fully or partially completed albums could be used to purchase Series 
E bonds at banks or other financial institutions authorized to issue 
such bonds. Stamps may be redeemed at banks and other financial 
institutions, through designated Federal Reserve Banks and the Bureau of 
the Public Debt, Parkersburg, West Virginia.

[57 FR 14276, Apr. 17, 1992, as amended at 59 FR 10535, Mar. 4, 1994]



Sec. 316.7  Delivery of bonds.

    Issuing agents were authorized to deliver Series E bonds either 
over-the-counter in person, or by mail at the risk and expense of the 
United States, to the address given by the purchaser, but only within 
the United States, its territories and possessions, and the Commonwealth 
of Puerto Rico. No mail deliveries elsewhere were made. If purchased by 
citizens of the United States temporarily residing abroad, the bonds 
were delivered to such address in the United States as the purchaser 
directed.



Sec. 316.8  Extended terms and yields for outstanding bonds.

    (a) General. The terms extended maturity period, second extended 
maturity period, third extended maturity period and fourth extended 
maturity period, when used herein, refer to periods of 10 years or less 
after the original maturity dates during which owners may retain their 
bonds and continue to earn interest. No special action is required to 
take advantage of any extensions heretofore or herein granted. Series E 
bonds cease to accrue interest upon reaching final maturity.
    (b) Extended maturity periods--(1) Bonds issued from May 1, 1941 
through April 1, 1952. Series E bonds with issue dates of May 1, 1941, 
through April 1, 1952, reached or will reach final maturity 40 years 
after their respective issue dates, as shown below.

------------------------------------------------------------------------
                                        Life of   Final maturity dates--
       Issue dates--1st day of        bonds yrs.        1st day of
------------------------------------------------------------------------
May 1941-Apr. 1952..................          40  May 1981-Apr. 1992.
------------------------------------------------------------------------

    (2) Bonds issued from May 1, 1952 through November 1, 1965. Bonds 
with issue dates of May 1, 1952, through November 1, 1965, will receive 
an additional extension of maturity ranging from 4 months to 2 years and 
3 months, as shown below, so that these bonds will reach final maturity 
40 years after their respective issue dates.

------------------------------------------------------------------------
                                       Previous
                                      maturities      Previous maturity
      Issue dates--lst day of      ----------------   dates--1st day of
                                     yrs.    mos.
------------------------------------------------------------------------
May 1952-Jan. 1957................      39       8  Jan. 1992-Sept.
                                                     1996.
Feb. 1957-May 1959................      38      11  Jan. 1996-Apr. 1998.
Jun. 1959-Nov. 1965...............      37       9  Mar. 1997-Aug. 2003.
------------------------------------------------------------------------


------------------------------------------------------------------------
                                                Additional
                                                 extended
                                                 maturity       Life of
           Issue dates--1st day of                period        bonds--
                                             ----------------    yrs.
                                               yrs.    mos.
------------------------------------------------------------------------
May 1952-Jan. 1957..........................  ......       4          40
Feb. 1957-May 1959..........................       1       1          40
Jun. 1959-Nov. 1965.........................       2       3         40.
------------------------------------------------------------------------


------------------------------------------------------------------------
                                              Final maturity dates--1st
          Issue dates--1st day of                      day of
------------------------------------------------------------------------
May 1952-Jan. 1957........................  May 1992-Jan. 1997.
Feb. 1957-May 1959........................  Feb. 1997-May 1999.
Jun. 1959-Nov. 1965.......................  June. 1999-Nov. 2005.
------------------------------------------------------------------------

    (3) Bonds issued from December 1, 1965 through June 1, 1980. Bonds 
with issue dates of December 1, 1965, through June 1, 1980, will receive 
an additional extension of maturity ranging from 3 years to 5 years, as 
shown below, so that these bonds will reach final maturity 30 years 
after their respective issue dates.

[[Page 193]]



------------------------------------------------------------------------
                                       Previous
                                      maturities      Previous maturity
      Issue dates--1st day of      ----------------   dates--1st day of
                                     yrs.    mos.
------------------------------------------------------------------------
Dec. 1965-May 1969................      27  ......  Dec. 1992-May 1996.
June. 1969-Nov. 1973..............      25      10  Apr. 1995-Sept.
                                                     1999.
Dec. 1973-Jun. 1980...............      25  ......  Dec. 1998-Jun. 2005.
------------------------------------------------------------------------


------------------------------------------------------------------------
                                                Additional
                                                 extended
                                                 maturity       Life of
           Issue dates--1st day of                period        bonds--
                                             ----------------    yrs.
                                               yrs.    mos.
------------------------------------------------------------------------
Dec. 1965-May 1969..........................       3  ......          30
Jun. 1969-Nov. 1973.........................       4       2          30
Dec. 1973-Jun. 1980.........................       5  ......          30
------------------------------------------------------------------------


------------------------------------------------------------------------
                                              Final maturity dates--1st
          Issue dates--1st day of                      day of
------------------------------------------------------------------------
Dec. 1965-May 1969........................  Dec. 1995-May 1999.
Jun. 1969-Nov. 1973.......................  Jun. 1999-Nov. 2003.
Dec. 1973-Jun. 1980.......................  Dec. 2003-Jun. 2010.
------------------------------------------------------------------------

    (c) Guaranteed minimum investment yield--(1) General. Except as 
provided in paragraph (c)(2) of this section, the guaranteed minimum 
investment yields for outstanding Series E bonds are as follows:
    (i) For Series E bonds that were in original or extended maturity 
periods prior to November 1, 1982, the guaranteed minimum investment 
yield was 8.5 percent per annum, compounded semiannually, effective for 
the period from the first semiannual interest accrual date on or after 
May 1, 1981, through the end of such periods, unless the bonds reached 
final maturity before November 1, 1981.\3\ For bonds that entered 
extensions, see paragraphs (c)(1)(ii) through (c)(1)(iv) of this 
section.
---------------------------------------------------------------------------

    \3\ Series E bonds issued from May 1, 1941, through October 1, 1941, 
had reached final maturity May 1, 1981, through October 1, 1981, before 
the 8.5 percent yield had become effective.
    \4-5\ [Reserved]
---------------------------------------------------------------------------

    (ii) For Series E bonds that entered extended maturity periods 
during the period of November 1, 1982, through October 1, 1986, the 
guaranteed minimum yield was or is 7.5 percent per annum, compounded 
semiannually, for such periods, including bonds that entered into an 
extended maturity period, as shown below:

------------------------------------------------------------------------
                                                      Entered on 1st day
    Issue dates--1st day of--          Extension             of--
------------------------------------------------------------------------
Mar. 1953-Nov. 1957..............  3rd.............  Nov. 1982-Oct.
                                                      1986.
Feb. 1965-Dec. 1970..............  2nd.............  Nov. 1982-Oct.
                                                      1986.
Nov. 1977-June 1980..............  1st.............  Nov. 1982-June
                                                      1985.
------------------------------------------------------------------------

    (iii) For Series E bonds that entered into extended maturity periods 
during the period of November 1, 1986, through February 1, 1993, the 
guaranteed minimum yield was or is 6 percent per annum, compounded 
semiannually, for such periods, including bonds that entered into an 
extended maturity period, as shown below:

------------------------------------------------------------------------
                                                      Entered on 1st day
    Issue dates--1st day of--       Extension \4\            of--
------------------------------------------------------------------------
May 1952-Aug. 1953..............  4th (final) \5\..  Jan. 1992-Apr.
                                                      1993.
Dec. 1957-May 1965..............  3rd..............  Nov. 1986-Feb.
                                                      1993.
Dec. 1965-Feb. 1966.............  3rd (final)......  Dec. 1992-Feb.
                                                      1993.
Jan. 1971-Feb. 1978.............  2nd..............  Nov. 1986-Feb.
                                                      1993.
------------------------------------------------------------------------
\4\ Interest for interest accrual periods of less than 6 months is
  prorated.
\5\ All Series E bonds issued between May 1, 1941 and April 1, 1953,
  have matured and are no longer earning interest.

    (iv) For Series E bonds entering extended maturity periods on or 
after March 1, 1993, the guaranteed minimum yield is 4 percent per 
annum, compounded semiannually, or the guaranteed minimum investment 
yield in effect at the beginning of the period, including bonds that 
enter extended maturity periods, as shown below: \6\
---------------------------------------------------------------------------

    \6\ Series E bonds with issue dates of July 1 and August 1, 1953, 
entered a final maturity period of 4 months on March 1, and April 1, 
1993, respectively, and received a minimum investment yield of 6 percent 
per annum, compounded semiannually, for that period.
    \7\ [Reserved]

------------------------------------------------------------------------
                                                      Entered on 1st day
    Issue dates--1st day of--        Extension \7\           of--
------------------------------------------------------------------------
Sep. 1953-May 1965..............  4th (final).......  May 1993-Feb.
                                                       2003.
Jun. 1965-Nov. 1965.............  3rd...............  Mar. 1993-Aug.
                                                       1993.
Jun. 1965-Nov. 1965.............  4th (final).......  Mar. 2003-Aug.
                                                       2003.
Mar. 1966-Feb. 1978.............  3rd (final).......  Mar. 1993-Feb.
                                                       2003.
Mar. 1978-Jun. 1980.............  2nd...............  Mar. 1993-Jun.
                                                       1995
Mar. 1978-Jun. 1980.............  3rd (final).......  Mar. 2003-Jun.
                                                       2005.
------------------------------------------------------------------------
\7\ See footnote 2 above.


[[Page 194]]

    (2) Eleven-year bonus. If a bond bearing an issue date of January 1, 
1951, or thereafter, was held for the 11-year period from the first 
semianual interest accrual period that began on or after January 1, 
1980, its guaranteed minimum investment yield for such period was 
increased by one-half of one percent per annum, compounded semiannually.
    (d) Market-based variable investment yield. In order to be eligible 
for the market-based variable investment yield, Series E savings bonds 
had to be held at least five years beginning with the first semiannual 
interest accrual date occurring on or after November 1, 1982. The 
market-based variable investment yield shall be determined by the 
Secretary of the Treasury as follows:
    (1) For each 6-month period, starting with the period beginning May 
1, 1982, the average market yield on outstanding marketable Treasury 
securities with a remaining term to maturity of approximately 5 years 
during such period is determined. Such determination by the Secretary of 
the Treasury or his or her delegate shall be final and conclusive.
    (2) For bonds which entered an extended maturity period prior to May 
1, 1989, the market-based variable investment yield from the first 
semiannual interest accrual date occurring on or after November 1, 1982 
to each semiannual interest accrual date occurring on or after November 
1, 1987, will be 85 percent, rounded to the nearest one-fourth of one 
percent, of the arithmetic average of the market yield averages, as 
determined in accordance with paragraph (d)(1) of this section, for the 
appropriate number of 6-month periods involved, starting with the period 
beginning May 1, 1982.
    (3) For bonds which entered an extended maturity period on or after 
May 1, 1989, the market-based variable investment yield from the first 
semiannual interest accrual date occurring on or after November 1, 1982 
to each semiannual interest accrual date occurring on or after November 
1, 1989, will be 85 pecent, rounded to the nearest one-hundredth of one 
percent, of the arithmetic average of the market yield averages, as 
determined in accordance with paragraph (d)(1) of this section, for the 
appropriate number of 6-month periods involved, starting with the period 
beginning May 1, 1982.
    (e) Determination of redemption values during any extended maturity 
period. The redemption value of a bond on a given interest accrual date 
during any extended maturity period will be the higher of the value 
produced by using the applicable guaranteed minimum investment yield or 
the value produced by using the appropriate market-based variable 
investment yield. The calculation of these values is described below:
    (1) Guaranteed minimum investment yield and resulting values during 
an extended maturity period. A bond has a guaranteed minimum investment 
yield for each of its extended maturity periods. The applicable 
guaranteed minimum investment yields for the current extended maturity 
period and any subsequent periods are specified in paragraph (c) of this 
section. In order to determine the value of a bond during an extended 
maturity period, the value of the bond either at the end of the next 
preceding maturity period or when the guaranteed minimum investment 
yield last increased,\8\ whichever occurs later, is determined using the 
applicable guaranteed minimum investment yield. This value is then used 
as the base upon which interest accrues during the extended maturity 
period at the guaranteed minimum investment yield in effect for savings 
bonds at the beginning of that period. The resulting semiannual values 
are then compared with the corresponding values determined by using the 
applicable market-based variable investment yields.
---------------------------------------------------------------------------

    \8\ The 11-year bonus was the last increase in the guaranteed 
minimum investment yield (see paragraph (b)(2)). Series E bonds which 
were eligible to receive this bonus received it on the first semiannual 
interest accrual date occuring on or after January 1, 1991.
---------------------------------------------------------------------------

    (2) Market-based variable investment yield and resulting values 
during an extended maturity period. The market-based variable investment 
yield from the first semiannual interest accrual date occuring on or 
after November 1, 1982 to each semiannual interest accrual date 
occurring on or after November 1, 1987, is determined as specified in 
paragraph (d) of this section. The value of a bond on its first

[[Page 195]]

seimannual interest accrual date occurring on or after November 1, 1982 
is used as the base upon which interest accrues during an extended 
maturity period at the applicable market-based variable investment 
yield. If redeemed, the bond will receive the higher of the two values 
produced by using the applicable guaranteed minimum investment yield and 
the applicable market-based variable investment yield.
    (f) Market-based variable investment yields and tables of redemption 
values. The market-based variable investment yields for bonds redeemed 
during each 6-month period, beginning on May 1 and November 1 of each 
year, are made available prior to each of those dates by the Bureau of 
the Public Debt, Parkersburg, West Virginia 26106-1328, accompanied by 
tables of the redemption values of bonds for the following 6 months, 
based on either the applicable market-based variable investment yields 
or guaranteed minimum investment yields.

[57 FR 14276, Apr. 17, 1992, as amended at 58 FR 60936, 60937, Nov. 18, 
1993]



Sec. 316.9  Taxation.

    (a) General. For the purpose of determining taxes and tax 
exemptions, the increment in value represented by the difference between 
the price paid for Series E bonds and the redemption value received 
therefor constitutes interest. Such interest is subject to all taxes 
imposed under the Internal Revenue Code of 1986, as amended. The bonds 
are subject to estate, inheritance, gift, or other excise taxes, whether 
Federal or State, but are exempt from all other taxation now or 
hereafter imposed on the principal or interest thereof by any State, or 
any of the possesions of the United States, or by any local taxing 
authority.
    (b) Federal income tax on bonds. An owner of Series E bonds who is a 
cash-basis taxpayer may use either of the following two methods of 
reporting the increase in the redemption value of the bonds for Federal 
income tax purposes:
    (1) Defer reporting the increase to the year of final maturity, 
actual redemption, or other disposition, whichever is earlier; or
    (2) Elect to report the increases each year as they accrue, in which 
case the election applies to all Series E bonds then owned and those 
subsequently acquired, as well as to any other similar obligations 
purchased on a discount basis. If the method in paragraph (b)(1) of this 
section is used, the taxpayer may change to the method in paragraph 
(b)(2) of this section without obtaining permission from the Internal 
Revenue Service. However, once the election to use the method in 
paragraph (b)(2) of this section is made, the taxpayer may not change 
the method of reporting without permission from the Internal Revenue 
Service. For further information on Federal income taxes, the Service 
Center Director, or District Director, Internal Revenue Service, of the 
taxpayer's district may be contacted.



Sec. 316.10  Payment or redemption.

    (a) General. A Series E bond may be redeemed in accordance with its 
terms at the appropriate redemption value shown in the applicable table 
described in paragraph (f) of Sec. 316.8. The redemption values of bonds 
in the denomination of $100,000 are not shown in the tables. However, 
the redemption value of a bond in that denomination will be equal to ten 
times the redemption value of a $10,000 bond of the same issue date. A 
bond in a denomination higher that $25 (face amount) may be redeemed in 
part but only in the amount of an authorized denomination or multiple 
thereof.
    (b) Federal Reserve Banks and Branches and United States Treasury. 
Owners of Series E bonds may obtain payment upon presentation and 
surrender of the bonds to a Federal Reserve Bank or Branch referred to 
in Sec. 316.12 or to the Department of the Treasury with the request for 
payment on the bonds duly executed and certified in accordance with the 
governing regulations.
    (c) Incorporated banks, savings and loan associations and other 
financial institutions. (1) A financial institution qualified as a 
paying agent under the provisions of 31 CFR part 321, also published as 
Department of the Treasury Circular, Public Debt Series No. 750, as 
revised, will pay the current redemption value of a Series E bond 
presented for payment by an individual whose

[[Page 196]]

name is inscribed on the bond as owner or coowner, provided:
    (i) The bond is in order for payment; and
    (ii) The presenter establishes his or her identity to the 
satisfaction of the agent, in accordance with Treasury instructions and 
identification guidelines, and signs and completes the requests for 
payment.
    (2) A paying agent may (but is not required to) pay a Series E bond, 
at current redemption value, upon the request of a legal representative 
designated in the bond's registration by name and capacity, a court-
appointed legal representative of the last-deceased registrant's estate, 
or a beneficiary, if he or she survives the owner, provided:
    (i) The bond is in order for payment; and
    (ii) The presenter establishes his or her identity to the 
satisfaction of the agent, in accordance with Treasury instructions, 
indentification guidelines, and otherwise complies with evidentiary 
requirements.

[57 FR 14276, Apr. 17, 1992, as amended at 59 FR 10535, Mar. 4, 1994]



Sec. 316.11  Reservation as to issue of bonds.

    The Secretary of the Treasury reserved the right to reject any 
application for purchase of Series E bonds, in whole or in part, and to 
refuse to issue, or permit to be issued hereunder, any such bonds in any 
case or any class or classes of cases if such action was deemed to be in 
the public interest. Any action in any such respect was final.



Sec. 316.12  Fiscal agents.

    (a) Federal Reserve Banks and Branches referred to below, as fiscal 
agents of the United States, are authorized to perform such services as 
may be requested of them by the Secretary of the Treasury in connection 
with the redemption and payment of Series E bonds.
    (b)(1) The following Federal Reserve Offices have been designated to 
provide savings bond services:

------------------------------------------------------------------------
                                     Reserve districts   Geographic area
          Servicing office                 served            served
------------------------------------------------------------------------
Federal Reserve Bank, Buffalo        New York, Boston.  CT, MA, ME, NH,
 Branch, P.O. Box 961, Buffalo, NY                       NJ (northern
 14240.                                                  half), NY (City
                                                         & State), RI,
                                                         VT, Puerto Rico
                                                         and Virgin
                                                         Islands.
Federal Reserve Bank, Pittsburgh     Cleveland,         DE, KY (eastern
 Branch, P.O. Box 867, Pittsburgh,    Philadelphia.      half), NJ
 PA 15230.                                               (southern
                                                         half), OH, PA,
                                                         WV (northern
                                                         panhandle).
Federal Reserve Bank of Richmond,    Richmond, Atlanta  AL, DC, FL, LA
 P.O. Box 27622, Richmond, VA 23261.                     (southern
                                                         half), MD, MS
                                                         (southern
                                                         half), NC, SC,
                                                         TN (eastern
                                                         half), VA, WV
                                                         (except
                                                         northern
                                                         panhandle).
Federal Reserve Bank of              Minneapolis,       IA, IL (northern
 Minneapolis, 250 Marquette Avenue,   Chicago.           half), IN
 Minneapolis, MN 55480.                                  (northern
                                                         half), MN, MT,
                                                         ND, SD, WI.
Federal Reserve Bank of Kansas       Dallas, San        AK, AR, AZ, CA,
 City, 925 Grand Avenue, Kansas       Francisco,         CO, HI, ID, IL
 City, MO 64198.                      Kansas City, St.   (southern
                                      Louis.             half), IN
                                                         (southern
                                                         half), KS, KY
                                                         (western half),
                                                         LA (northern
                                                         half), MO, MS
                                                         (northern
                                                         half), NE, NM,
                                                         NV, OK, OR, TN
                                                         (western half),
                                                         TX, WA, WY, UT
                                                         and GU.
------------------------------------------------------------------------

    (2) Until March 1, 1996, other Federal Reserve Offices may continue 
to provide some savings bond services, such services will be phased out 
over the period prior to that date.

[59 FR 10535, Mar. 4, 1994]



Sec. 316.13  Reservation as to terms of offer.

    The Secretary of the Treasury may at any time, or from time to time, 
supplement or amend the terms of this offering of bonds, or of any 
amendments or supplements thereto.

[[Page 197]]



PART 317--REGULATIONS GOVERNING AGENCIES FOR ISSUE OF UNITED STATES SAVINGS BONDS--Table of Contents




Sec.
317.0  Purpose and effective date.
317.1  Definitions.
317.2  Organizations authorized to act.
317.3  Procedure for qualifying and serving as issuing agent.
317.4  Issuing agents currently qualified.
317.5  Termination of qualification.
317.6  Issuance of bonds.
317.7  Obtaining and accounting for bond stock.
317.8  Remittance of sales proceeds and registration records.
317.9  Role of Federal Reserve Banks.
317.10  Reservation.

    Authority: 2 U.S.C. 901; 5 U.S.C. 301; 12 U.S.C. 391; 12 U.S.C. 
1767; 31 U.S.C. 3105.

    Source: 54 FR 40830, Oct. 3, 1989, unless otherwise noted.



Sec. 317.0  Purpose and effective date.

    The regulations in this part govern the manner in which an 
organization may qualify and act as an agent for the sale and issue of 
Series EE and Series I United States Savings Bonds.

[63 FR 38041, July 14, 1998]



Sec. 317.1  Definitions.

    (a) Bond(s) means Series EE United States Savings Bonds and Series I 
United States Savings Bonds.
    (b) Federal Reserve Bank refers to the Federal Reserve Bank or 
Branch providing savings bond services to the district in which the 
issuing agent or the applicant organization is located. See 
Sec. 317.9(a).
    (c) Issuing agent refers to an organization that has been qualified 
by a designated Federal Reserve Bank or the Commissioner of the Bureau 
of the Public Debt to sell savings bonds. An issuing agent acts as an 
agent of the purchaser in handling the remittance. The definition 
encompasses:
    (1) Each organization that accepts and processes purchase orders for 
bonds sold over-the-counter, but does not inscribe bonds, and
    (2) Each organization that is authorized to inscribe bonds sold 
over-the-counter or through payroll savings plans.
    (d) Offering circular refers to Department of the Treasury Circular, 
Public Debt Series No. 1-80, current revision, for Series EE savings 
bonds, and to Department of the Treasury Circular, Public Debt Series 
No. 1-98 for Series I savings bonds.
    (e) Organization means an entity, as described in Sec. 317.2, that 
may qualify as an issuing agent of bonds.

[63 FR 64550, Nov. 20, 1998]



Sec. 317.2  Organizations authorized to act.

    The following organizations are eligible to apply for qualification 
and to serve as savings bond issuing agents:
    (a) Banks, credit unions, trust companies and savings institutions, 
if they are chartered by or incorporated under the laws of the United 
States, any State or Territory of the United States, the District of 
Columbia, or the Commonwealth of Puerto Rico.
    (b) Agencies of the United States and State and local governments.
    (c) Employers operating payroll savings plans for the purchase of 
United States Savings Bonds, as well as organizations operating payroll 
savings plans on behalf of employers.
    (d) Other organizations specifically and individually qualified by 
the Commissioner of the Bureau of the Public Debt whenever the 
Commissioner deems such a qualification to be in the public interest. In 
selecting an issuing agent, the Commissioner may use such process that 
the Commissioner deems to be appropriate. The selected issuing agent 
will be subject to such conditions that the Commissioner deems to be 
appropriate.

[63 FR 64550, Nov. 20, 1998, as amended at 65 FR 2035, Jan. 13, 2000]



Sec. 317.3  Procedure for qualifying and serving as issuing agent.

    (a) Execution of application agreement. An organization seeking 
issuing agent qualification generally shall obtain from and file with a 
designated Federal Reserve Bank an application-agreement form. However, 
if an organization seeks qualification under Sec. 317.2(d) or because of 
its status as an organization operating a payroll savings plan on behalf 
of an employer under Sec. 317.2(c), it

[[Page 198]]

shall make application directly to the Bureau of the Public Debt for 
approval by the Commissioner of the Bureau of the Public Debt. An 
application-agreement sent directly to the Bureau of the Public Debt 
shall be supplemented by such other information as the Bureau of the 
Public Debt may request.
    (1) The terms of each application agreement shall include the 
provisions prescribed by section 202 of Executive Order No. 11246, 
entitled ``Equal Employment Opportunity'' (3 CFR, subchapter B, 42 
U.S.C. 2000e note).
    (2) The provisions of the Privacy Act of 1974, as amended (5 U.S.C. 
552a), and regulations issued pursuant thereto (31 CFR part 1, subpart 
C).
    (b) Certificate of qualification. Upon approval of an application-
agreement, the designated Federal Reserve Bank or the Bureau of the 
Public Debt will issue a certificate of qualification to the 
organization. Until the receipt of such a certificate, an organization 
shall not perform any act as an issuing agent, or advertise in any 
manner that it is authorized to so act or that it has applied for 
qualification as an issuing agent. After receipt of a certificate of 
qualification, an organization may perform the functions of an issuing 
agent. Under the terms of the application-agreement, the proceeds of the 
sale of bonds are at all times the property of the United States for 
which the organization shall be fully accountable.
    (c) Adverse action or change in qualification. An organization will 
be notified by the designated Federal Reserve Bank or the Bureau of the 
Public Debt if its application-agreement to act as issuing agent is not 
approved, or if, after issuance, its certificate of qualification is 
terminated.

[54 FR 40830, Oct. 3, 1989, as amended at 59 FR 10535, 10536, Mar. 4, 
1994; 63 FR 64550, Nov. 20, 1998]



Sec. 317.4  Issuing agents currently qualified.

    Each organization, qualified as an issuing agent under a trust 
agreement currently in effect, is authorized to continue to act in that 
capacity without requalification. By so acting, it shall be subject to 
the terms and conditions of the previously executed application-
agreement and these regulations in the same manner and to the same 
extent as though it had requalified hereunder.



Sec. 317.5  Termination of qualification.

    (a) By the United States. The Secretary of the Treasury or a 
delegate may terminate the qualification of an issuing agent at any 
time, upon due notice to the agent. If this action is taken, the agent 
will be required to make a final accounting for the balance of savings 
bond stock for which it is charged, based on the records of the 
designated Federal Reserve Bank. The agent must surrender all unissued 
bonds and remit the issue price of any remaining bonds included in its 
accountability.
    (b) At request of issuing agent. A designated Federal Reserve Bank 
will terminate the qualification of an issuing agent upon its request, 
provided the agent is in full compliance with the terms of its agreement 
and the applicable regulations and instructions, and renders a final 
accounting.

[54 FR 40830, Oct. 3, 1989, as amended at 59 FR 10536, Mar. 4, 1994]



Sec. 317.6  Issuance of bonds.

    (a) General. Each issuing agent shall comply with all regulations 
and instructions issued by the Department of the Treasury directly, or 
through the designated Federal Reserve Bank, concerning the sale, 
inscription, dating, and validation of bonds; the acceptance, 
processing, and transmittal of over-the-counter purchase orders; the 
remittance of sales proceeds; and the disposition of paper and 
electronic registration records. No issuing agent shall have authority 
to sell bonds other than as provided in the offering circular.
    (b) Fees. Each issuing agent, other than a Federal agency, will be 
paid fees. Only issuing agents are eligible to collect fees. With prior 
approval, agents that are authorized to inscribe bonds and receive fee 
payments will also be paid a bonus for presorting savings bond mailings. 
Schedules reflecting the amount of the fees and presort bonuses, and the 
basis on which they are computed and paid, will be published separately 
in the Federal Register.

[[Page 199]]

    (c) No charge to customers. Any issuing agent that accepts fees from 
the Department of the Treasury for selling savings bonds, and/or 
accepting over-the-counter purchase orders, shall not make any charge to 
customers for the same service.

[54 FR 40830, Oct. 3, 1989, as amended at 55 FR 39960, Oct. 1, 1990; 58 
FR 63529, Dec. 2, 1993; 59 FR 10536, Mar. 4, 1994; 63 FR 64550, Nov. 20, 
1998]



Sec. 317.7  Obtaining and accounting for bond stock.

    An issuing agent that is authorized to inscribe bonds sold over-the-
counter or through payroll savings plans may obtain bond stock from the 
designated Federal Reserve Bank. The bond stock is, at all times, the 
property of the United States. The organization shall be fully 
accountable for the bond stock consigned to it in accordance with all 
regulations and instructions issued by the Department of the Treasury.

[54 FR 40830, Oct. 3, 1989, as amended at 59 FR 10536, Mar. 4, 1994]



Sec. 317.8  Remittance of sales proceeds and registration records.

    An issuing agent shall account for and remit bond sales proceeds and 
registration records promptly in accordance with regulations and 
instructions issued by the Department of the Treasury, either directly 
or through the designated Federal Reserve Banks. Failure to comply with 
these instructions may subject an agent to penalties, including 
termination of its qualification as an issuing agent.

 Appendix to Sec. 317.8--Remittance of Sales Proceeds and Registration 
 Records, Department of the Treasury Circular, Public Debt Series No. 4-
  67, Third Revision (31 CFR Part 317), Fiscal Service, Bureau of the 
                               Public Debt

                     Subpart A--General Information

    1. Purpose. This appendix is issued for the guidance of 
organizations qualified as issuing agents of Series EE and I United 
States Savings Bonds under the provisions of Department of the Treasury 
Circular, Public Debt Series No. 4-67, current revision. Its purpose is 
to supplement the provisions of Sec. 317.8 of the Circular relating to 
the remittance of savings bond sales proceeds and registration records, 
including the interest charge to be collected for late remittances.
    2. Definition of terms. As used in this appendix:
    (a) Issue Date is the date as of which a bond begins to earn 
interest. It is the date entered by the issuing agent in the upper right 
corner of the bond.
    (b) Validation Date is the date as of which a bond is actually 
inscribed for issue. It is entered by the issuing agent immediately 
below the ``Issue Date'' in the area marked ``Issuing Agent's Dating 
Stamp''.
    (c) Over-the-counter sale means any sale of savings bonds other than 
payroll sales.
    (d) Payroll sale includes all issues of savings bonds paid for with 
deductions withheld from the pay of employees of organizations which 
maintain (i) payroll savings plans or (ii) thrift, savings, vacation, or 
similar plans.
    (e) Issuing agent, as provided in Sec. 317.1(c) of the Circular, 
refers to an organization that has been qualified by a designated 
Federal Reserve Bank or the Commissioner of the Bureau of the Public 
Debt to sell savings bonds.
    (f) Immediately available funds are remittances of funds which are 
available for the use by the Department of the Treasury immediately upon 
receipt by the Department or its fiscal agents, and include, but are not 
limited to:
    (1) A change to the remitter's (or a correspondent depository 
institution's) reserve account with a Federal Reserve Bank;
    (2) A Federal funds check;
    (3) A United States Government check; or
    (4) A postal money order.
    (g) Financial institutions refers to banks, trust companies, credit 
unions, and savings institutions chartered by or incorporated under the 
laws of the United States, or those of any State or Territory of the 
United States, the District of Columbia, or the Commonwealth of Puerto 
Rico.
    (h) Nonfinancial institutions refers to any issuing agent not 
described under paragraph (g) of this appendix.
    3. Determination of issue date. The obligation of the United States 
to pay interest on a savings bond is determined by its issue date. That 
date is the first day of the month in which a qualified issuing agent 
receives or accumulates the full purchase price of the bond. In the case 
of a bond purchased under a payroll savings plan operated by an 
organization which is not an issuing agent, the issue date should be 
fixed as of the month in which the organization accumulates the full 
purchase price of the bond. Such funds must, however, be remitted to the 
issuing agent in time to permit such dating.
    4. Forms of remittance. Issuing agents shall remit sales proceeds in 
timely fashion as follows:
    (a) Issuing agents which are financial institutions must remit in 
immediately available funds.

[[Page 200]]

    (b) Issuing agents which are nonfinancial institutions should remit 
in immediately available funds.
    (c) The Commissioner of the Public Debt, as designee of the 
Secretary of the Treasury, may waive or modify this provision. The 
Commissioner may do so in any particular case or class of cases for the 
convenience of the United States or in order to relieve any agent or 
agents of unusual hardship:
    (1) If such action would not be inconsistent with law or equity,
    (2) If it does not impair any existing rights, and
    (3) If the Commissioner is satisfied that such action would not 
subject the United States to any substantial expense or liability.
    5. Remittance date. Sales proceeds should be remitted on the date 
shown on the transmittal document, i.e., PD F 3252-OC or PD F 5255-RDS 
for over-the-counter sales or PD F 4848 for payroll sales. If there is a 
significant time difference between the date on the transmittal document 
and the date of receipt in the designated Federal Reserve Bank, the 
transmittal date may be determined, for purposes of this appendix, by 
the postmark, if the remittance is mailed, or the receipt date, if the 
remittance is forwarded by courier, messenger, or similar means.

                    Subpart B--Over-the-Counter Sales

    1. Regional Delivery (RDS) participants. An agent participating in 
the Regional Delivery System (RDS) is authorized to sell bonds over-the-
counter. It will accept and review customer purchase orders, but it will 
not inscribe the bonds. Purchase order information will be forwarded to 
a designated Federal Reserve Bank for inscription of the bonds. An 
authorized RDS participant shall remit sales proceeds and purchase 
orders (on paper or in an electronically processible format) to a 
designated Federal Reserve Bank within five (5) business days of receipt 
from the customer.
    2. Issues-on-Tape Program participants. An agent that has been 
authorized by the Bureau of the Public Debt to inscribe bonds sold over-
the-counter and report such sales on magnetic tape shall remit sales 
proceeds and electronic issue records no less often than once a week on 
a schedule established by the designated Federal Reserve Bank.

             Subpart C--Remittance of Payroll Sales Proceeds

    1. Application of requirements. The remittance requirements for 
payroll sales apply only to issuing agents. An employer that maintains a 
payroll savings plan but does not issue bonds shall be notified by the 
servicing issuing agent that it must remit sales proceeds to the issuing 
agent in sufficient time to permit compliance with the requirements.
    2. Remittance of payroll sales deductions. Issuing agents shall 
remit sales proceeds throughout the month shown in the issue date as 
soon as the full amount of the purchase price of the bonds has been 
received or accumulated. In no case should such proceeds be remitted 
later than the second business day of the month following the month 
shown in the issue date. The issuing agent shall ensure that its system 
properly accounts for and recognizes when the full purchase price has 
been received, or has been accumulated, so that timely remittance can be 
made. The issuing agent shall transmit registration records in an 
electronically processible format within thirty (30) days following the 
month shown on the issue date.

                 Subpart D--Interest on Late Remittances

    1. Rate of interest. Interest will be assessed for each day's delay 
in the remittance of sales proceeds, based on the actual date of 
remittance. The rate of interest to be used will be the current value of 
funds to the Department of the Treasury, as set forth each quarter in 
the Treasury Financial Manual. The rate applied will be that in effect 
during the entire period in which the remittance is late. The interest 
assessment will be collected by the designated Federal Reserve Bank.
    2. Waiver. Interest will be waived in the situations described below 
as well as in any specific case where, in the judgment of the 
Commissioner of the Public Debt, the circumstances warrant such action. 
The Commissioner's decision on any waiver action shall be final.
    (a) Bonds inscribed by issuing agent--(i) Payroll sales. If, during 
any three (3) month period, the interest assessed on an issuing agent's 
late remittance of proceeds from payroll savings plan sales or thrift, 
savings, vacation, or similar plan sales accumulates to less than $50 
for each type of sales, the interest assessed for the first month will 
be waived. The interest assessed for each type of sales for the 
remaining two (2) months will then be carried forward to the next period 
of three (3) consecutive months.
    (ii) Over-the-counter issues. The interest assessed on an agent's 
late remittance of over-the-counter sales proceeds transmitted during a 
given month will be waived if it is less than $50.
    (b) Bonds inscribed by the designated Federal Reserve Bank. The 
interest assessed on late remittance of all sales proceeds transmitted 
during a given month will be waived if it is less than $25.
    (c) Suspension of waiver. The Commissioner may suspend the 
application of the waiver in

[[Page 201]]

the case of any agent that consistently fails to meet the remittance 
requirements.

[54 FR 40830, Oct. 3, 1989, as amended at 59 FR 10536, Mar. 4, 1994; 63 
FR 38041, July 14, 1998; 63 FR 64550, Nov. 20, 1998]



Sec. 317.9  Role of Federal Reserve Banks.

    (a) Role as fiscal agents. In their capacity as fiscal agents of the 
United States, the Federal Reserve Banks referred to below are 
authorized to perform such duties, including the issuance of 
instructions and forms, as may be necessary to fulfill the purposes and 
requirements of these regulations.
    (b) The following Federal Reserve Offices have been designated to 
provide savings bond services:

------------------------------------------------------------------------
                                     Reserve districts   Geographic area
          Servicing office                 served            served
------------------------------------------------------------------------
Federal Reserve Bank, Buffalo        New York, Boston.  CT, MA, ME, NH,
 Branch, P.O. Box 961, Buffalo, NY                       NJ (northern
 14240.                                                  half), NY (City
                                                         & State), RI,
                                                         VT, Puerto Rico
                                                         and Virgin
                                                         Islands.
Federal Reserve Bank, Pittsburgh     Cleveland,         DE, KY (eastern
 Branch, P.O. Box 867, Pittsburgh,    Philadelphia.      half), NJ
 PA 15230.                                               (southern
                                                         half), OH, PA,
                                                         WV (northern
                                                         panhandle).
Federal Reserve Bank of Richmond,    Richmond, Atlanta  AL, DC, FL, LA
 P.O. Box 27622, Richmond, VA 23261.                     (southern
                                                         half), MD, MS
                                                         (southern
                                                         half), NC, SC,
                                                         TN (eastern
                                                         half), VA, WV,
                                                         (except
                                                         northern
                                                         panhandle).
Federal Reserve Bank of              Minneapolis,       IA, IL (northern
 Minneapolis, 90 Hennepin Avenue,     Chicago.           half), IN
 Minneapolis MN 55401.                                   (northern
                                                         half), MI, MN,
                                                         MT, ND, SD, WI.
Federal Reserve Bank of Kansas       Dallas, San        AK, AR, AZ, CA,
 City, 925 Grand Avenue, Kansas       Francisco,         CO, HI, ID, IL
 City, MO 64198.                      Kansas City, St.   (southern
                                      Louis.             half), IN
                                                         (southern
                                                         half), KS, KY
                                                         (western half),
                                                         LA (northern
                                                         half), MO, MS
                                                         (northern
                                                         half), NE, NM,
                                                         NV, OK, OR, TN
                                                         (western half),
                                                         TX, WA, WY, UT
                                                         and GU.
------------------------------------------------------------------------

    (c) Specific activities of designated Federal Reserve Banks. The 
specific activities of designated Federal Reserve Banks include:
    (1) Qualifying issuing agents;
    (2) Supplying agents with bond stock, maintaining records of agent 
accountability, and monitoring compliance with stock consignment rules;
    (3) Instructing agents regarding the sale and issue of bonds, the 
custody and control of bond stock, and the accounting for and remittance 
of sales proceeds; and
    (4) Providing guidelines covering the amount of bond stock agents 
may ordinarily requisition and maintain.

[54 FR 40830, Oct. 3, 1989, as amended at 59 FR 10536, Mar. 4, 1994; 63 
FR 38041, July 14, 1998]



Sec. 317.10  Reservation.

    The Secretary of the Treasury may at any time, or from time to time, 
supplement or amend the terms of these regulations.



PART 321--PAYMENTS BY BANKS AND OTHER FINANCIAL INSTITUTIONS OF UNITED STATES SAVINGS BONDS AND UNITED STATES SAVINGS NOTES (FREEDOM SHARES)--Table of Contents




                     Subpart A--General Information

Sec.
321.0  Purpose.
321.1  Definitions.

                 Subpart B--Procedures for Qualification

321.2  Eligible organizations.
321.3  Procedure for qualifying and serving as paying agent.
321.4  Paying agents previously qualified.
321.5  Termination of qualification.

                      Subpart C--Scope of Authority

321.6  General.
321.7  Authorized cash payments.
321.8  Redemption-exchange of Series E and EE savings bonds and savings 
          notes.
321.9  Specific limitations on payment authority.
321.10  Responsibilities of paying agents.

[[Page 202]]

            Subpart D--Payment and Transmittal of Securities

321.11  Payment.
321.12  Redemption value of securities.
321.13  Cancellation of redeemed securities.
321.14  Transmittal to and settlement by Federal Reserve Bank.

           Subpart E--Losses Resulting From Erroneous Payments

321.15  Liability for losses.
321.16  Report of erroneous payment.
321.17  Investigation of potential loss.
321.18  Determination of loss.
321.19  Certification of signatures.
321.20  Applicability of provisions.
321.21  Replacement and recovery of losses.

                       Subpart F--Forwarding Items

321.22  Forwarding securities not payable by an agent.

                   Subpart G--Miscellaneous Provisions

321.23  Paying agent fees and charges.
321.24  Claims on account of lost securities.
321.25  Role of Federal Reserve Banks.
321.26  Preservation of rights.
321.27  Supplements, amendments, or revisions.

Appendix to Part 321--Appendix to Department of the Treasury Circular 
          No. 750, Fourth Revision

    Authority: 2 U.S.C. 901; 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 
3105, 3126.

    Source: 53 FR 37511, Sept. 26, 1988, unless otherwise noted.



                     Subpart A--General Information



Sec. 321.0  Purpose.

    These regulations govern the manner in which financial institutions 
may qualify and act as paying agents for the redemption of:
    (a) United States Savings Bonds of Series A, B, C, D, E, EE, and I, 
and United States Savings Notes (Freedom Shares), presented for cash 
payment; and
    (b) Eligible Series E and EE savings bonds and savings notes 
presented for redemption in exchange for Series HH savings bonds under 
the provisions of Department of the Treasury Circular, Public Debt 
Series No. 2-80 (31 CFR part 352).

[53 FR 37511, Sept. 26, 1988, as amended at 63 FR 38042, July 14, 1998]



Sec. 321.1  Definitions.

    (a) ACH payment or ACH means an Automated Clearing House method of 
transferring funds under the provisions of 31 CFR part 210.
    (b) Beneficiary means an individual whose name is inscribed on a 
security as the person to whom it is payable in his or her right upon 
the prior death of the other individual designated thereon as owner, 
shown commonly in the form: ``A P.O.D. [payable on death to] B.''
    (c) Cash payment means payment in currency, by check or by credit to 
a checking, savings or share account.
    (d) Central Site refers to the Federal Reserve Bank of Cleveland, 
Pittsburgh Branch, EZ CLEAR Department.
    (e) EZ CLEAR refers to the system by which financial institutions 
present redeemed securities to a Federal Reserve Bank through the 
commercial check collection system in the same manner as other cash 
items.
    (f) Federal Reserve Bank or Branch refers to the Federal Reserve 
Bank to which the agent is instructed to transmit redeemed securities; 
or to which the agent is instructed to forward securities for payment or 
other transactions, and includes parent Banks, Branches and Regional 
Check Processing Centers, as appropriate.
    (g) Legal Representative or representative means the court-appointed 
(or otherwise qualified) person, regardless of title, who is legally 
authorized to act for the estate of a minor, incompetent, aged person, 
absentee, et al., the court-appointed executor or administrator, 
regardless of title, who is legally authorized to act for a decedent's 
estate; and the trustee of a personal trust estate.
    (h) Mixed cash letter refers to a bundle containing nonsegregated 
redeemed securities, cash items, and other items submitted to a Federal 
Reserve Bank via the commercial check collection system.
    (i) Paying agent or agent means:
    (1) A financial institution that is qualified under the provisions 
of this part as originally issued, or any subsequent revision, to make 
payment of securities, and includes branches located

[[Page 203]]

within the United States, its territories and possessions, and the 
Commonwealth of Puerto Rico; and
    (2) Any banking facilities of such institutions establishing at 
military installations overseas, provided the offering of such 
redemption services has been authorized by the Department of the 
Treasury.
    (j) Presenter means the individual requesting the redemption or 
redemption-exchange of securities.
    (k) Presenting institution means the organization from which the 
Federal Reserve Bank receives redeemed securities to be processed via EZ 
CLEAR. If a paying agent submits separately sorted or mixed cash letters 
directly to the Bank, using its own ABA code, it is the presenting 
institution. If a correspondent financial institution submits cash 
letters on behalf of another institution using the correspondent's ABA 
code, the correspondent is the presenting institution.
    (l) Redemption and payment are used interchangeably for payment of a 
security in accordance with the terms of its offering and governing 
regulations, including redemption-exchange.
    (m) Redemption-exchange means the authorized redemption of eligible 
securities for the purpose of applying the proceeds in payment for other 
securities offered in exchange by the Treasury.
    (n) Registrant means a person whose name is inscribed on a security 
as owner, coowner, or beneficiary.
    (o) Security means a United States Savings Bond of Series A, B, C, 
D, E, EE, or I and/or a United States Savings Note (Freedom Share).
    (p) Separately sorted cash letter refers to a bundle of redeemed 
securities that have been segregated from all other items prior to 
transmittal to a Federal Reserve Bank via EZ CLEAR.
    (q) Taxpayer identifying number means a social security account 
number or an employer identification number.

[53 FR 37511, Sept. 26, 1988; 53 FR 39581, Oct. 7, 1988, as amended at 
55 FR 35395, Aug. 29, 1990; 59 FR 10536, Mar. 4, 1994; 63 FR 38042, July 
14, 1998]



                 Subpart B--Procedures for Qualification



Sec. 321.2  Eligible organizations.

    (a) Organizations eligible to apply for qualification and to serve 
as paying agents are commercial banks, trust companies, savings banks, 
savings and loan associations, building and loan associations (including 
cooperative banks), credit unions, cash depositories, industrial banks, 
or similar financial institutions which:
    (1) Are incorporated under Federal law or the laws of a State, 
territory or possession of the United States, the District of Columbia, 
or the Commonwealth of Puerto Rico;
    (2) In the usual course of business accept, subject to withdrawal, 
funds for desposit or the purchase of shares;
    (3) Are under the supervision of the banking department or 
equivalent authority of the jurisdiction in which they are incorporated; 
and
    (4) Maintain regular offices for the transaction of business.
    (b)(1) An organization that desires to redeem securities must first 
qualify as a paying agent. An organization that has qualified and is 
serving as a paying agent must:
    (i) MICR-encode data on securities accepted for payment,
    (ii) Submit them directly to the Check Department of the appropriate 
Federal Reserve Bank or Branch or the Regional Check Processing Center, 
and
    (iii) Receive payment of fees by ACH, or arrange to obtain one or 
more of these services from another financial institution.
    (2) All presenting institutions, as defined in Sec. 321.1, must 
qualify as savings bond paying agents and enroll in EZ CLEAR.

[53 FR 37511, Sept. 26, 1988, as amended at 59 FR 10536, Mar. 4, 1994]



Sec. 321.3  Procedure for qualifying and serving as paying agent.

    (a) Execution of application-agreement. An eligible organization 
wishing to act as a paying agent shall obtain from, execute, and file an 
application-agreement with the appropriate Federal Reserve Office 
referred to in Sec. 321.25. The terms of each application-agreement

[[Page 204]]

shall include a reference to the following provisions to which paying 
agents are subject:
    (1) The provisions prescribed by section 202 of Executive Order 
11246, entitled ``Equal Employment Opportunity'', as amended (42 U.S.C. 
2000e note); and
    (2) The provisions of the Privacy Act of 1974, as amended (5 U.S.C. 
552a), and regulations issued pursuant thereto (31 CFR part 1, subpart 
C).

For the purpose of these regulations, eligible institutions in Puerto 
Rico and the Virgin Islands shall make application to the Federal 
Reserve Bank Branch in Buffalo, New York and eligible institutions in 
Guam shall make application to the Federal Reserve Bank of Kansas City.
    (b) Qualification. Each Federal Reserve Bank referred to in 
Sec. 321.25, as fiscal agent of the United States, is authorized to 
qualify any eligible organization, located in the Reserve Bank's 
geographical area, as shown in Sec. 321.25, which possesses adequate 
authority under its charter to act as paying agent. Upon approval of an 
application-agreement, the Bank will issue a certificate of 
qualification to the organization. Such a certificate automatically 
qualifies the branches of the organization to redeem securities as 
provided in this part.
    (c) Announcement of authority. Upon receipt of a certificate of 
qualification from a Federal Reserve Bank referred to in Sec. 321.25, a 
financial institution may announce or advertise its authority to redeem 
eligible securities for cash and to process eligible Series E and EE 
savings bonds and savings notes presented for redemption in exchange for 
Series HH savings bonds under the provisions of Department of the 
Treasury Circular, Public Debt Series No. 2-80 (31 CFR part 352).
    (d) Adverse action. An organization will be notified by the 
appropriate Federal Reserve Bank referred to in Sec. 321.25, in writing, 
if its application-agreement to act as paying agent is not approved.

[53 FR 37511, Sept. 26, 1988, as amended at 55 FR 35395, Aug. 29, 1990; 
59 FR 10537, Mar. 4, 1994; 63 FR 38042, July 14, 1998]



Sec. 321.4  Paying agents previously qualified.

    Institutions qualified as paying agents under previous revisions of 
this Part are authorized to continue to act in that capacity without 
requalification. By so acting, they shall be subject to the terms and 
conditions of their previously executed application-agreements and these 
regulations in the same manner and to the same extent as though they had 
requalified hereunder.



Sec. 321.5  Termination of qualification.

    (a) By the Treasury. The Secretary of the Treasury, or a designee, 
may authorize a Federal Reserve Bank referred to in Sec. 321.25 to 
terminate the qualification of any paying agent at any time, following 
prior written notice of such action to the agent.
    (b) At request of paying agent. A Federal Reserve Bank referred to 
in Sec. 321.25 will terminate the qualification of a paying agent upon 
its written request, provided the agent renders a final accounting for 
all redeemed securities and is found to have fully complied with the 
terms of its agreement and the applicable regulations and instructions.
    (c) Reservation. Termination of the qualification as paying agent of 
any institution shall not prejudice the right of the Treasury to recover 
the amounts of any erroneous payment(s) made by the institution.

[53 FR 37511, Sept. 26, 1988, as amended at 59 FR 10537, Mar. 4, 1994]



                      Subpart C--Scope of Authority



Sec. 321.6  General.

    Securities are issued only in registered form (subject to 31 CFR 
359.11), are not transferable, may not be hypothecated or used as 
collateral for a loan, and, except as otherwise specifically provided in 
the governing regulations and this part, are payable to the owner or 
coowner named on the security. The regulations governing Series EE and 
HH bonds are contained in Department of the Treasury Circular, Public 
Debt Series No. 3-80, current revision (31 CFR part 353); those 
governing Series I bonds are contained in

[[Page 205]]

Department of the Treasury Circular, Public Debt Series No. 2-98 (31 CFR 
part 360); and, those governing all other series of U.S. savings 
securities are contained in Department of the Treasury Circular No. 530, 
current revision (31 CFR part 315).

[63 FR 38042, July 14, 1998]



Sec. 321.7  Authorized cash payments.

    (a) General. Subject to the terms and conditions appearing on the 
securities, the governing regulations, and the provisions of this part, 
and any instructions issued in connection therewith, an agent may make 
payment of savings bonds of Series A, B, C, D, E, EE, and I, and savings 
notes, presented for cash redemption. Except as provided in paragraphs 
(b) through (d), and (f) of this section, the securities must be 
presented by an individual whose name is inscribed on the securities as 
owner or coowner, and who is known to the agent, or who can establish 
his or her identity in accordance with Treasury instructions and 
guidelines (See Sec. 321.11(b)).
    (b) Change of name by marriage. If the name of the presenter has 
been changed by marriage from that shown on the security, and the agent 
knows or establishes that the presenter and the person whose name 
appears on the security are one and the same individual, the agent may 
pay the security in accordance with paragraph (a) of this section. The 
signature to the request for payment should show both names, e.g., 
``Mary J. Smith, changed by marriage from Mary T. Jones.''
    (c) Parent of a minor. Payment of a security bearing the name of a 
minor child, who is not of sufficient competency and understanding to 
sign the request for payment and comprehend the nature of the act, may 
be made to either parent with whom the minor resides or to whom custody 
has been granted, provided the form of registration does not indicate 
that a guardian or similar representative of the estate of the minor has 
been appointed or is otherwise legally qualified. Payment under this 
subsection may not be made to any person other than a parent. The parent 
requesting payment must sign the request for payment in the form, e.g., 
``John A. Jones, on behalf of John C. Jones.'' The following endorsement 
must be typed or imprinted on the back of the security:

    I certify that I am the (father or mother) of John C. Jones and the 
person (with whom he resides) (to whom custody has been granted). He is 
---- years of age and is not of sufficient competency and understanding 
to sign the request.

    (d) Payment to beneficiary. An agent may redeem a security 
registered ``A P.O.D. [payable on death to] B'' for cash at the request 
of the surviving beneficiary following the owner's death. A copy of the 
owner's death certificate, certified under seal of the State or local 
registrar, must be furnished to support the request for payment.
    (e) Payment to a legal representative designated on a security by 
name and title. An agent may redeem a security registered in the name 
and title of a legal representative as defined in Sec. 321.1(f), if the 
legal representative is known to the agent, or can establish identity in 
accordance with Treasury instructions and guidelines. The request for 
payment on the back of each security must be signed by the legal 
representative designated by name and title in the registration on the 
front of the security, or by a person authorized or empowered to act for 
a corporate legal representative so designated. The full title of the 
legal representative should be shown adjacent to each signature and, in 
the case of a corporate legal representative, the full corporate name, 
as well as the title, i.e., vice president, trust officer, etc., should 
be shown. Examples:

    Henry C. Smith, conservator of the estate of John R. White, an 
adult, pursuant to Sec. 633.572 of the Iowa Code.
    Tenth National Bank by Arnold A. Ames, Vice President, guardian of 
the estate of Barry B. Bryan, a minor.

    (f) Payment to a legal representative of a decedent's estate not 
designated on a security. An agent may redeem a security bearing the 
names of deceased persons in the registration, if the legal 
representative of the estate of the last deceased registrant:
    (1) Presents the security;
    (2) Signs the request for payment on the back of the security, 
showing the

[[Page 206]]

representative's full title adjacent to the signature; and
    (3) Presents acceptable evidence of the legal representative's 
appointment and of the dates of death of all persons named in the 
security's registration, in accordance with this part and the appendix.

In the case of a corporate legal representative, the full corporate 
name, as well as the title, must be shown. Examples:

    John H. Smith and Charles N. Jones, co-executors of the will of 
Robert J. Smith, deceased.
    Tenth National Bank by John F. Green, Trust Officer, executor of the 
will of George N. Brown, deceased.

    (g) Interest reporting. A paying agent is required to report 
interest in the amount of $10 or more, paid as part of the redemption 
value of securities, to the payee and to the Internal Revenue Service, 
in accordance with 26 CFR 1.6049-4. (See Item 26 of the appendix to this 
part for information concerning the education feature of Series EE 
savings bonds issued on or after January 1, 1990, and of Series I 
savings bonds.)

[53 FR 37511, Sept. 26, 1988, as amended at 55 FR 35395, Aug. 29, 1990; 
63 FR 38042, July 14, 1998]



Sec. 321.8  Redemption-exchange of Series E and EE savings bonds and savings notes.

    (a) General. Subject to the provisions of Circular No. 2-80 (31 CFR 
part 352), the governing regulations, and the provisions of this part 
and its appendix, an agent may make payment of eligible securities 
presented for redemption in exchange for Series HH bonds. Securities 
eligible for exchange are:
    (1) Series EE bonds presented no earlier than six months from their 
issue dates; and
    (2) Series E bonds and savings notes presented no later than one 
year from the month in which they reached final maturity. The total 
redemption value of the securities presented for exchange must be at 
least $500.
    (b) Requirements for redemption-exchange. An agent shall not accept 
and redeem eligible securities on exchange unless:
    (1) The securities are accompanied by a completed exchange 
subscription signed by the presenter;
    (2) The presenter is the owner, the legal representative (excluding 
a representative of a decedent's estate), the surviving coowner or 
beneficiary, or the principal coowner (as defined in Sec. 352.7(e)(2) in 
31 CFR part 352 (Circular No. 2-80)) of the securities presented for 
exchange and is to be named as owner or first-named coowner on the 
Series HH bonds; and
    (3) The request for payment on each security is signed by the 
presenter. A presenter who is a legal representative should show the 
full title adjacent to each signature and, in the case of a corporate 
legal representative, should show the full corporate name, as well as 
the title. If the name of the presenter has been changed by marriage, or 
if the presenter is named as beneficiary or legal representative on the 
securities, the agent may process the transaction in accordance with the 
provisions of Sec. 321.7 (b), (d), or (e) of this part. If the agent is 
authorized and elects to use the special endorsement procedure, set out 
in 31 CFR part 330 (Circular No. 888, current revision), the requests 
for payment do not need to be signed; however, this special endorsement 
may not be used in lieu of the presenter's signature on the exchange 
subscription.
    (c) Interest reporting. To the extent that it represents interest of 
$10 or more, a paying agent is required to report cash, refunded in an 
exchange transaction, to the presenter and to the Internal Revenue 
Service under the provisions of 26 CFR 1.6049-4.
    (d) Completion of transaction. An agent shall transmit for 
settlement via EZ CLEAR securities redeemed on exchange and, at the same 
time, forward the exchange application (PD F 3253) and any additional 
cash needed to complete the transaction, to the Fiscal Agency Department 
of the servicing Federal Reserve Bank referred to in Sec. 321.25. 
Securities redeemed on exchange may be commingled with cash redemptions 
in mixed or separately sorted cash letters.''

[53 FR 37511, Sept. 26, 1988, as amended at 55 FR 35396, Aug. 29, 1990; 
59 FR 10537, Mar. 4, 1994]

[[Page 207]]



Sec. 321.9  Specific limitations on payment authority.

    An agent is not authorized to redeem a security for cash or on 
redemption-exchange:
    (a) If it is a Series EE bond or a Series I bond presented for 
payment prior to six months from its issue date.
    (b) If it is a savings bond of Series F, G, H, J, K, or HH.
    (c) If the presenter is acting under a power of attorney.
    (d) If the agent does not know or cannot establish the identity of 
the presenter as a person entitled to request payment as provided in 
Sec. 321.7.
    (e) If the presenter does not sign his or her name in ink as it is 
inscribed on the security (except as provided in Sec. 321.7 (b) or (c) 
of this part, or appears in evidence of appointment (see Sec. 321.7(f)), 
and show a home or business address.
    (f) If the taxpayer identifying number of the presenter, or the 
estate represented by the presenter, is not known to the agent and the 
presenter refuses to furnish the number.
    (g) If the security bears a material irregularity, such as an 
illegible, incomplete or unauthorized inscription, issue date, or 
issuing agent's validating data, or if any essential part of the 
security appears to have been altered or is mutilated or defaced in such 
a manner as to create doubt or arouse suspicion.
    (h) If the security is registered in the name of a corporation, 
association, partnership, or other organization in its own right.
    (i) If Treasury regulations require the submission of documentary 
evidence to support the redemption, except as provided in Sec. 321.7 (d) 
or (f) of this part, as in the case of incompetents, minors under legal 
guardianship, or the change of a registrant's name other than by 
marriage.
    (j) If the presenter is a minor who, in the opinion of the agent, is 
not of sufficient competency and understanding to sign the request for 
payment and comprehend the nature of the act.
    (k) If it is known to the agent that the presenter has been legally 
declared incompetent to manage his or her affairs.
    (l) If partial redemption is requested.

[53 FR 37511, Sept. 26, 1988, as amended at 55 FR 35396, Aug. 29, 1990; 
63 FR 38042, July 14, 1998]



Sec. 321.10  Responsibilities of paying agents.

    (a) Payment of securities. A paying agent is required to redeem 
eligible securities during its regular business hours for any presenter, 
whether or not a customer, who can establish his or her identity as the 
owner or co-owner named on the securities, in accordance with the 
provisions of this part, and the appendix to this part, and the Treasury 
Identification Guide for Cashing United States Savings Bonds. An agent 
is encouraged, but is not required, to redeem eligible securities during 
its regular business hours for a surviving beneficiary, a legal 
representative designated in the registration of securities presented, 
or a legal representative of the last deceased registrant's estate who 
can provide acceptable evidence (see Sec. 321.7 (d) or (f)) and 
establish identity in accordance with this part.
    (b) Restrictions. A paying agent shall not advance money, make loans 
on, or discount the redemption value of securities, nor in any manner 
assist others to do so. An agent shall not pay a presenter the current 
value of a security and then defer presentation to the Treasury for the 
purpose of obtaining for its own profit an increased value.

[53 FR 37511, Sept. 26, 1988, as amended at 55 FR 35396, Aug. 29, 1990]



            Subpart D--Payment and Transmittal of Securities



Sec. 321.11  Payment.

    (a) Examination. Before making a payment of a security, a paying 
agent shall examine the security to determine that it is eligible for 
redemption and is one the agent is authorized to pay under the 
provisions of this part.
    (b) Identification and evidence of entitlement. The agent shall 
determine that the presenter of the security is entitled to request 
payment, as provided in Sec. 321.7 of this part. Unless the presenter is 
a person whose identity is well-known to the agent or is an established

[[Page 208]]

customer, he or she should be asked to furnish satisfactory 
identification in accordance with the Treasury instructions and 
guidelines. At the time of payment, the agent should make a notation on 
the back of the security, or in its own records, specifying precisely 
what was relied on to establish the presenter's identity.
    (c) Evidence--Payment to a beneficiary. The agent shall determine 
that the presenter of the security as beneficiary is entitled to request 
payment, as provided in Sec. 321.7(d). In addition to establishing the 
presenter's identification, as required by paragraph (b) of this 
section, the agent shall require presentation of the owner's death 
certificate in accordance with this part and the appendix.
    (d) Evidence--Payment to a legal representative of the last deceased 
registrant's estate. The agent shall determine whether the legal 
representative is entitled to request payment, as provided in 
Sec. 321.7(f). In addition to establishing the presenter's 
identification, as required by paragraph (b) of this section, the agent 
shall require evidence of appointment as well as evidence of the dates 
of death of all persons named in the registrations of the securities 
presented. Evidence of the representative's appointment must be either a 
court certificate or a copy of the letters of appointment, certified to 
be true and correct under seal of the court or clerk of court. If the 
original appointment was made more than one year prior to the 
presentation of the securities it must also bear the court clerk's 
statement that the appointment is in full force and effect. This 
statement must be under seal of the court or clerk of court and dated 
within six months of the presentation. Such evidence of appointment must 
pertain to the estate of the last deceased registrant designated on the 
securities. A copy of a death certificate, certified under seal of the 
State or local registrar, is the only acceptable evidence of the date of 
death.
    (e) Execution of request. (1) The agent shall require:
    (i) That the request for payment on the back of each security be 
signed by the presenter in the presence of one of its officers or 
authorized employees; and
    (ii) That the presenter's address be furnished. Fiduciaries must 
sign as provided in Sec. 321.7 (e) and (f).
    (2) If the agent is qualified under 31 CFR part 330 (Circular No. 
888, current revision) and elects to use the special endorsement 
procedure, the request for payment need not be signed. If the request 
has already been signed when the security is presented, it should be 
signed again.
    (f) Certification of request. An agent is not required to complete 
the certification to the requests for payment on securities it redeems. 
When an agent transmits redeemed securities for settlement, as indicated 
in Sec. 321.14 of this part, such agent shall be understood by such 
submission to have represented and certified that the identity of the 
presenter, and his or her entitlement to request payment, have been 
established in accordance with this part and the appendix hereto.

[53 FR 37511, Sept. 26, 1988, as amended at 55 FR 35396, Aug. 29, 1990; 
59 FR 10537, Mar. 4, 1994]



Sec. 321.12  Redemption value of securities.

    The redemption value of each savings security is determined by the 
terms of its offering and the length of time it has been outstanding. 
The Bureau of the Public Debt determines redemption values for Series A-
E bonds, eligible Series EE and I bonds, and savings notes, that should 
be used in redeeming savings securities.

[63 FR 38042, July 14, 1998]



Sec. 321.13  Cancellation of redeemed securities.

    An agent shall cancel each redeemed security by imprinting the word 
``PAID'' on its face and entering the amount and date of the actual 
payment and the agent's name, location, and four-digit code number 
assigned by the appropriate Federal Reserve Bank. The recordation of 
this data shall constitute a certification by the agent that the 
security was redeemed in accordance with the provisions of this part, 
that the presenter's identity and entitlement to request payment were 
duly established, and that the proceeds

[[Page 209]]

were paid to the presenter or remitted to an appropriate Federal Reserve 
Bank in payment for Series HH bonds.

[53 FR 37511, Sept. 26, 1988, as amended at 59 FR 10537, Mar. 4, 1994]



Sec. 321.14  Transmittal to and settlement by Federal Reserve Bank.

    In accordance with Federal Reserve Bank instructions, a paying agent 
shall transmit with an EZ CLEAR cash letter securities redeemed for cash 
and on redemption-exchange, either directly or through a correspondent 
institution, to the Check Department of the appropriate Bank or Branch, 
or to a Regional Check Processing Center (RCPC). Upon receipt of the 
securities, the Bank, Branch, or RCPC will arrange for immediate 
settlement with the presenting institution. Such settlement shall be 
made by a credit to the presenting institution's Reserve or other 
clearing account in the total amount paid, as reflected on the cash 
letter, and shall be subject to adjustment via a charge or credit to 
that account if any discrepancy is subsequently discovered.

[59 FR 10537, Mar. 4, 1994]



           Subpart E--Losses Resulting From Erroneous Payments



Sec. 321.15  Liability for losses.

    Under the governing statute, as amended (31 U.S.C. 3126(a)), an 
agent cannot be relieved of liability for a loss resulting from an 
erroneous payment unless the Secretary of the Treasury can make a 
determination that the loss resulted from no fault or negligence on the 
agent's part.



Sec. 321.16  Report of erroneous payment.

    If an agent discovers an erroneous payment of securities, it should 
immediately advise the Bureau of the Public Debt, Parkersburg, WV 26106-
1328, (304) 420-6402. If the circumstances of the payment warrant such 
action, the agent should also notify the nearest office of the United 
States Secret Service.



Sec. 321.17  Investigation of potential loss.

    (a) Notice to an agent. When it determines that a loss has occurred, 
because of the erroneous payment of securities, the Bureau of the Public 
Debt will notify the agent in writing and identify the securities.
    (b) Investigative procedure. The Bureau of the Public Debt may 
request the United States Secret Service to investigate potential 
losses. Upon request, the agent shall make available to the Bureau of 
the Public Debt, or its investigative agent, all records and information 
pertaining to the transaction in question, including the disposition of 
the redemption proceeds. If the proceeds were deposited in an account 
maintained by the agent, the information made available shall include 
the ultimate disposition of the redemption proceeds from the account.



Sec. 321.18  Determination of loss.

    Upon completion of the investigation, and after consideration of the 
results, the Bureau of the Public Debt shall advise the agent through 
which the payment occurred:
    (a) That no final loss to the United States has occurred, and, 
accordingly, that the agent is relieved from liability for the payment, 
or that no claim for reimbursement shall be made unless and until a loss 
has been sustained; or
    (b) That while a final loss to the United States has occurred, the 
agent is not required to make reimbursement therefor, as the Secretary 
of the Treasury, or his designee, has determined that such loss resulted 
from no fault or negligence on the part of such agent; or
    (c) That a final loss to the United States has occurred, and that, 
the Secretary of the Treasury, or his designee, has been unable to make 
an affirmative finding that such loss resulted from no fault or 
negligence on the part of such agent, reimbursement must be made 
promptly, except where credit for the payment had not previously been 
extended.



Sec. 321.19  Certification of signatures.

    The regulations in this subpart shall, to the extent appropriate, 
apply to losses resulting from payments made in reliance on 
certifications of signatures by an officer or designated employee of any 
financial institution authorized to certify requests for payment.

[[Page 210]]



Sec. 321.20  Applicability of provisions.

    The provisions of this subpart shall apply to securities redeemed by 
any Federal Reserve Bank referred to in Sec. 321.25, as fiscal agent, or 
any Treasury office authorized to redeem securities, as well as to 
paying agents.

[53 FR 37511, Sept. 26, 1988, as amended at 59 FR 10537, Mar. 4, 1994]



Sec. 321.21  Replacement and recovery of losses.

    (a) If a final loss results from the redemption of a security, and 
the paying agent redeeming the security is not relieved of liability for 
such loss under 31 U.S.C. 3126(a), the Bureau of the Public Debt will 
demand that the paying agent promptly reimburse the United States in the 
amount of the final loss and will take such other action as may be 
necessary to collect such amount as set out in the procedure described 
in Paragraph 21 of the appendix to this part.
    (b) If a final loss has resulted from the redemption of a security, 
and no reimbursement has been or will be made, the loss shall be subject 
to replacement out of the fund established by the Government Losses in 
Shipment Act, as amended.

[61 FR 37197, July 16, 1996]



                       Subpart F--Forwarding Items



Sec. 321.22  Forwarding securities not payable by an agent.

    Any securities an agent is not authorized to pay under the 
provisions of this part should be forwarded for redemption to the Fiscal 
Agency Department of a Federal Reserve Bank referred to in Sec. 321.25. 
The requests for payment on the securities should be properly certified. 
Any documentary evidence required to support the redemption should 
accompany the securities. If the securities are presented for 
redemption-exchange, they must also be accompanied by a completed and 
signed exchange subscription and any additional cash needed to complete 
the transaction. Unpaid securities so forwarded must not be commingled 
with redeemed securities transmitted for settlement.

[53 FR 37511, Sept. 26, 1988, as amended at 59 FR 10537, Mar. 4, 1994]



                   Subpart G--Miscellaneous Provisions



Sec. 321.23  Paying agent fees and charges.

    (a) Fees. Fees shall be paid as outlined in this section. A schedule 
setting out the fees, and the basis on which they are computed and paid, 
is separately published in the Federal Register. Current information is 
available from a Federal Reserve Bank referred to in Sec. 321.25.
    (1) Securities transmitted via EZ CLEAR. A fee will be paid for each 
security redeemed during a calendar month and transmitted via EZ CLEAR 
to a Federal Reserve Bank in separately sorted cash letters. Payment 
will be made to the presenting institution by ACH. No fees will be paid 
for redeemed securities received by a Bank in mixed cash letters.
    (2) To comply with the provisions of the Balanced Budget and 
Emergency Deficit Control Act of 1985, as amended (2 U.S.C. 901, et 
seq.), or the legislative resolution resulting therefrom, the Secretary 
may authorize, upon notice in the Federal Register, the discontinuance, 
reduction or delay of fee payments. Fee payments so affected may 
subsequently be paid in accordance with the schedule of fees as 
hereafter published, subject to the availability of funds therefor, and 
to the extent permitted by law. Fee payments for servicing occurring 
after notice of the resumption of such payments has been published in 
the Federal Register will be made in accordance with the schedule of 
fees published in such notice.
    (b) Charges to presenters. A paying agent shall not make any charge 
whatever to persons entitled to request payment of securities, for 
redeeming them under the provisions of this part.

[53 FR 37511, Sept. 26, 1988; 53 FR 39581, Oct. 7, 1988, as amended at 
55 FR 39960, Oct. 1, 1990; 59 FR 10537, Mar. 4, 1994]

[[Page 211]]



Sec. 321.24  Claims on account of lost securities.

    If a security redeemed by an agent is lost, stolen or destroyed 
while in its custody or in transit prior to settlement, the agent's 
claim for reimbursement of the missing security's redemption value on 
the original payment date will be considered, provided the security can 
be identified by serial number.



Sec. 321.25  Role of Federal Reserve Banks.

    (a) The Federal Reserve Banks referred to below, as fiscal agents of 
theUnited States, shall perform such services in connection with this 
part as may be requested by the Secretary of the Treasury, or his 
designee. The Banks are authorized and directed to perform such duties, 
including the issuance of instructions and forms, as may be necessary to 
fulfill the purposes and requirements of these regulations.
    (b) The following Federal Reserve Offices have been designated to 
provide savings bond services:

------------------------------------------------------------------------
                                     Reserve districts   Geographic area
          Servicing office                 served            served
------------------------------------------------------------------------
Federal Reserve Bank, Buffalo        New York, Boston.  CT, MA, ME, NH,
 Branch, P.O. Box 961, Buffalo, NY                       NJ (northern
 14240.                                                  half), NY (City
                                                         & State), RI,
                                                         VT, Puerto Rico
                                                         and Virgin
                                                         Islands.
Federal Reserve Bank, Pittsburgh     Cleveland,         DE, KY (eastern
 Branch, P.O. Box 867, Pittsburgh,    Philadelphia.      half), NJ
 PA 15230.                                               (southern
                                                         half), OH, PA,
                                                         WV (northern
                                                         panhandle).
Federal Reserve Bank of Richmond,    Richmond, Atlanta  AL, DC, FL, LA
 P.O. Box 27622, Richmond, VA 23261.                     (southern
                                                         half), MD, MS
                                                         (southern
                                                         half), NC, SC,
                                                         TN (eastern
                                                         half), VA, WV
                                                         (except
                                                         northern
                                                         panhandle).
Federal Reserve Bank of              Minneapolis,       IA, IL (northern
 Minneapolis, 90 Hennepin Avenue,     Chicago.           half), IN
 Minneapolis MN 55401.                                   (northern
                                                         half), MI, MN,
                                                         MT, ND, SD, WI.
Federal Reserve Bank of Kansas       Dallas, San        AK, AR, AZ, CA,
 City, 925 Grand Avenue, Kansas       Francisco,         CO, HI, ID, IL
 City, MO 64198.                      Kansas City, St.   (southern
                                      Louis.             half), IN
                                                         (southern
                                                         half), KS, KY
                                                         (western half),
                                                         LA (northern
                                                         half), MO, MS
                                                         (northern
                                                         half), NE, NM,
                                                         NV, OK, OR, TN
                                                         (western half),
                                                         TX, WA, WY, UT
                                                         and GU.
------------------------------------------------------------------------


[59 FR 10537, Mar. 4, 1994, as amended at 63 FR 38042, July 14, 1998]



Sec. 321.26  Preservation of rights.

    Nothing contained in this part shall limit or restrict any existing 
rights which holders of securities may have acquired under the offering 
circulars and the applicable regulations.



Sec. 321.27  Supplements, amendments, or revisions.

    The Secretary of the Treasury may, at any time or from time to time, 
revise, supplement, amend or withdraw, in whole or in part, the 
provisions of this part.

 Appendix to Part 321--Appendix to Department of the Treasury Circular 
                        No. 750, Fourth Revision

                Fiscal Service, Bureau of the Public Debt

                     Subpart A--General Information

    1. Purpose. This appendix is issued for the guidance of banks and 
other financial institutions qualified as paying agents of United States 
Savings Bonds and United States Savings Notes (Freedom Shares) under the 
provisions of 31 CFR part 321 [Department of the Treasury Circular No. 
750, Fourth Revision]. Its purpose is to provide information to 
supplement the regulations contained in the part and specific 
instructions for processing redemption and redemption-exchange 
transactions. The information and instructions are indexed to the 
sections and subsections of part 321 which they explain or expand.
    2. Other pertinent publications. In addition to part 321, agents 
should be familiar with the provisions of the following publications:
    (a) Offering circulars. Department of the Treasury Circulars, Public 
Debt Series Nos. 1-80 (31 CFR part 351, Series EE bonds), 2-80 (31 CFR 
part 352, Series HH bonds), 1-98 (31

[[Page 212]]

CFR part 359, Series I bonds), and 3-67 (31 CFR part 342, savings 
notes), and Department of the Treasury Circulars Nos. 653 (31 CFR part 
316, Series E bonds) and 905 (31 CFR part 339, Series H bonds).
    (b) Regulations. Department of the Treasury Circular, Public Debt 
Series No. 3-80 (Series EE and HH bonds); Department of the Treasury 
Circular, Public Debt Series 2-98 (Series I bonds); Department of the 
Treasury Circulars Nos. 530 (all other series of savings securities) and 
888 (special endorsements); Federal Tax Regulations (26 CFR 1.6049); 
Federal Claims Collection Standards (4 CFR parts 101-105); Regulation J, 
Collection of Checks and Other Items and Wire Transfers of Funds (12 CFR 
part 210); and operating circulars issued by Federal Reserve Banks 
relating to the collection of cash items and Federal payments by ACH.

                 Subpart B--Procedures for Qualification

    3. Qualification of branches. [Sec. 321.3(b)] Qualification of an 
institution as a paying agent automatically qualifies only its domestic 
branches. A foreign branch of a qualified paying agent may redeem 
securities provided settlement is made through a qualified facility 
located in the Unied States.
    4. Paying agent code numbers. [Secs. 321.3(b) and 321.13] The 
appropriate Federal Reserve Bank will assign a four-digit code number to 
each agent it qualifies. A separate number will be assigned to each 
branch authorized to redeem and submit redeemed securities for its own 
account to a Federal Reserve Bank or Branch or to a Regional Check 
Processing Center. At the paying agent's request, only one four-digit 
code will be assigned for use by all of its branches. The presenting 
institution's ABA number will be used in the adjustment of discrepancies 
and in the computation and payment of fees for securities transmitted in 
separately sorted cash letters.
    5. Requalification. [Sec. 321.3(b)] If there has been a change in 
the corporate name of an agent, whether through merger, consolidation, 
sale of assets, or in any other manner, the agent may be asked by the 
appropriate Federal Reserve Bank referred to in Sec. 321.25 to requalify 
to reflect the change. Ordinarily, requalification is not required 
unless (a) the change results in a corporation that, under State law, 
cannot retain the rights of the corporation that ceased to exist, or (b) 
in the case of a purchase of assets and assumption of liability, the 
purchaser corporation is not a qualified paying agent.
    6. Announcement of authority. [Sec. 321.3(c)] On and after the 
effective date of its qualification, a paying agent may appropriately 
announce or advertise its authority to redeem eligible securities for 
cash and in exchange for Series HH bonds. Such statements and notices 
should not, directly or indirectly, encourage the encashment of the 
securities. Two examples of acceptable statements for use in 
advertisements or displays are:
    (a) ``We are an authorized agent for payment of U.S. Savings Bonds 
and U.S. Savings Notes (Freedom Shares).''
    (b) ``This (bank/savings and loan association/credit union, etc.) is 
authorized to pay U.S. Savings Bonds and U.S. Savings Notes (Freedom 
Shares) and process eligible Series E and EE bonds and savings notes in 
exchange for Series HH bonds.''

                      Subpart C--Scope of Authority

    7. Authorized cash payments. [Sec. 321.7]
    (a) General. [Sec. 321.7(a)] The general authority of paying agents 
to redeem savings securities for cash extends to Series A, B, C, D, E, 
EE, and I bonds and savings notes presented by the owner, coowner, 
surviving beneficiary, parent on behalf of a minor, legal representative 
designated in the registrations of savings securities presented, or 
legal representative of the last deceased registrant's estate. The 
presenter must sign the requests for payment and establish his or her 
identity and, in the case of a beneficiary, parent or legal 
representative of the last deceased registrant's estate, entitlement to 
request payment.
    (b) Securities submitted by mail. [Sec. 321.7(a)] An agent may 
accept eligible securities submitted, for redemption by mail, from known 
customers. The agent should be satisfied that the customer is entitled 
to request payment and that he or she has signed the requests for 
payment. The agent should obtain written instructions to credit the 
redemption proceeds to the customer's account or to make some other 
disposition. For its protection, the agent should retain such 
instructions for as long as ten years in the event the transaction is 
later questioned.
    (c) Interest reporting. [Sec. 321.7(e)] Pursuant to 26 CFR 1.6049-4, 
an agent is required to report interest income in the amount of $10 or 
more paid as part of the redemption value of securities. Reports to 
payees should be made on Form 1099-INT or an IRS-approved substitute; 
reports to the Internal Revenue Service should be made in accordance 
with that agency's instructions. A separate report may be made for each 
transaction in which interest in the amount of $10 or more is paid, or 
all interest payments, made during a calendar year, may be aggregated 
and reported annually should the total amount be $10 or more.
    8. Redemption-exchange of Series E and EE savings bonds and savings 
notes. [Sec. 321.8]
    (a) General. [Sec. 321.8 (a) and (b)] The general authority of 
paying agents to redeem securities in exchange for Series HH bonds 
extends only to eligible Series E and EE savings bonds and savings notes 
presented with a completed Form PD 3253, ``Exchange Subscription for 
United States Savings Bonds of

[[Page 213]]

Series HH.'' Securities eligible for exchange are: (1) Series EE bonds 
presented no earlier than six months from their issue dates; and (2) 
Series E bonds and savings notes presented no later than one year from 
the month in which they reached final maturity. The current redemption 
value of securities presented in one transaction must be at least $500. 
The presenter must establish his or her identity and entitlement to 
request the exchange and sign the exchange subcription and the requests 
for payment on the securities.
    (b) Securities in the name of a minor. [Sec. 321.8(b)] If an 
exchange subscription is submitted on behalf of a minor who is too young 
to comprehend the nature of the transaction, the form must be completed 
to request that the Series HH bonds be registered either in the minor's 
name alone or in exactly the same form as the securities presented for 
exchange. Agents are instructed to discourage exchange transactions 
involving minors who are too young to conduct them on their own.
    (c) Interest reporting. [Sec. 321.8(c)] Pursuant to 26 CFR 1.6049-4, 
an agent is required to report interest income in the amount of $10 or 
more included in any cash refunded in a redemption-exchange transaction. 
Reports to payees should be made on Form 1099-INT or an IRS-approved 
substitute; reports to the Internal Revenue Service should be made in 
accordance with that agency's instructions. A separate report may be 
made for each redemption-exchange transaction in which interest in the 
amount of $10 or more is refunded, or all interest paid in both cash 
transactions and redemption-exchanges during a calendar year may be 
aggregated and reported annually should the total amount be $10 or more.
    9. Specific limitations on payment authority. [Sec. 321.9]
    (a) Allowable exceptions. [Sec. 321.9] Securities which an agent may 
not redeem because of the limitations in Sec. 321.9 should be forwarded 
to the Fiscal Agency Department of a Federal Reserve Bank referred to in 
Sec. 321.25 for handling. However, if an agent is willing to assume full 
responsibility, it may make payment of an eligible security which bears 
a minor irregularity, such as a misspelled name, a transposition of 
letters, etc., because of its knowledge of the facts, or because it 
wishes to rely on the integrity of the presenter.
    (b) Taxpayer identifying number of presenter. [Sec. 321.9(f)] An 
agent shall refuse payment of any security if the taxpayer identifying 
number of the presenter, or the estate represented by the presenter, is 
not known to the agent and the presenter is unwilling to furnish the 
number. A parent who requests payment on behalf of a minor in accordance 
with Sec. 321.7(c) of this part must provide the minor's social security 
number.
    (c) Payments to minors. [Sec. 321.9(j)] A minor may not request 
payment of securities if he or she is not of sufficient competency and 
understanding to comprehend the nature of the act. Because of individual 
differences in comprehension, the Treasury has not established any rule 
as to the exact age at which a minor should be able to redeem 
securities. An agent may interview a minor to ascertain his or her 
ability to understand the transaction.
    10. Responsibilities of paying agents. [Sec. 321.10]
    (a) Requirements for redeeming securities. [Sec. 321.10(a)] A paying 
agent shall redeem eligible savings securities during its regular 
business hours for a presenter who establishes his or her identity as 
the owner or coowner of the securities, in accordance with this part and 
this appendix. While a paying agent is not required to redeem eligible 
Series E and EE savings bonds and savings notes in exchange for Series 
HH bonds for any presenter, or Series E, EE, or I bonds or savings notes 
for cash upon the request of a surviving beneficiary or legal 
representative, it is encouraged to do so, provided the presenter can 
establish his/her identity and provide acceptable evidence to accordance 
with this part and this appendix (See Sec. 321.7 (d) and (f)). An agent 
is not required to redeem savings securities during Saturday and evening 
hours if it is open during such periods primarily as a service for its 
depositors.
    (b) Restrictions. [Sec. 321.10(b)] Violation of the regulatory 
prohibitions on making charges for redeeming securities; on advancing 
money on, making loans on, or discounting the redemption value of 
securities; and on deferring presentation of redeemed securities to 
obtain a larger credit, will be cause for disqualification and recovery 
of the redemption proceeds and profits realized therefrom.

            Subpart D--Payment and Transmittal of Securities

    11. Identification of presenter. [Sec. 321.11(b)]
    (a) Identification guide. [Sec. 321.11(b)] The Treasury Department 
has issued an identification guide, Form PD 3900, to assist paying 
agents in redeeming securities. Careful compliance with the instructions 
contained therein will enable agents to accommodate reasonable 
redemption requests and protect themselves from losses. Reliance on 
newly opened customer accounts as identification, or paying more than 
$1,000 in a single transaction based on documentary evidence alone, 
should be particularly avoided.
    (b) Record of identification practice and evidence presented. [Sec. 
321.11 (b) through (d)] At the time of payment, the agent should make a 
notation on the back of the security or in its own records specifying 
precisely what was relied on to establish the presenter's identity. The 
identification

[[Page 214]]

should be adequate to identify the payee under the circumstances of the 
transaction. If an agent redeems a security upon the request of a 
surviving beneficiary or a legal representative of the last deceased 
registrant's estate, it should also make a notation of the evidence 
presented to establish the payee's entitlement; this might include the 
document or case number on the death certificate(s) and/or evidence of 
the legal representative's appointment, the date(s) of death, and the 
names and locations of the issuing authorities. The notations should be 
sufficient to permit a determination of the evidence of identity and 
entitlement at a later date. Otherwise, the agent runs the risk that no 
evidence can be developed to show that it acted without fault or 
negligence, in which case it could not be relieved of liability should a 
loss occur.
    12. Request for payment. [Sec. 321.11(d)]
    (a) Signature. [Sec. 321.11(e)] Except where an agent qualified 
under 31 CFR part 330 (Circular No. 888) elects to use the special 
endorsement procedure, each security redeemed by the agent must bear the 
signature of the presenter. The name must be signed exactly as it is 
inscribed on the security, unless the provisions of 31 CFR part 330 and 
this appendix provide for an exception, such as in cases involving a 
change of name by marriage, a request by a parent on behalf of a minor, 
or a legal representative of the last deceased registrant's estate. An 
agent may be held liable if the request for payment is not properly 
signed. Legal representatives must sign as provided in Sec. 321.7 (e) 
and (f).
    (b) Address. [Sec. 321.11(d)] The presenter must enter a current 
home or business address in the space provided on the back of the 
security. If a single transaction includes a group of securities, the 
address must be shown on at least one security of each of the following 
types: (1) Paper securities issued prior to October 1957; (2) punch card 
or machine readable paper securities issued prior to January 1989; and 
(3) machine readable paper securities issued subsequent to December 
1988.
    13. Redemption value of securities. [Sec. 321.12]
    (a) Redemption value tables. [Sec. 321.12] The Bureau of the Public 
Debt distributes redemption values in various formats and as part of 
programs for personal computers, for: (1) Series E bonds, (2) Series EE 
bonds, (3) Series I bonds, and (4) savings notes. Additional tables or 
information may be requested from the appropriate Federal Reserve Bank 
referred to in Sec. 321.25.
    (b) Use of tables. [Sec. 321.12] Care should be exercised to 
correctly determine the current redemption value of the security 
presented for the month in which it is redeemed. Incorrect payments can 
lead to costly and time-consuming adjustments for the agent, Department 
of the Treasury, and the appropriate Federal Reserve Bank referred to in 
Sec. 321.25.
    (c) Cash redemption. [Sec. 321.12] The correct redemption value of 
securities redeemed by an agent should be paid to the presenter in 
currency or, upon request, by check payable to the presenter or by 
credit to his or her account.
    (d) Redemption-exchange. [Sec. 321.12] The redemption values of 
eligible Series E and EE savings bonds and savings notes presented for 
exchange (Series I savings bonds are not eligible for exchange) for 
Series HH bonds shall be those payable in the month the agent accepts a 
correctly completed and signed exchange subscription, Public Debt Form 
3253. The total redemption value of securities presented for exchange in 
any one transaction must be at least $500. If the redemption value is 
$500 or an even multiple thereof, Series HH bonds must be requested in 
that exact amount. If the redemption value exceeds $500, but is not an 
even multiple of that amount, the presenter may add cash to increase the 
amount of the subscription to the next higher $500 multiple, or reduce 
the amount of the subscription to the next lower $500 multiple. The 
maximum amount which may be added to or refunded in an exchange 
transaction is $499.99. For example, if the total redemption value of 
the securities is $4,253.33, the presenter may request no less than 
$4,000 and no more than $4,500 in Series HH bonds. In the first 
instance, the agent will pay the presenter $253.33; in the second, it 
will collect $246.67 when it accepts the exchange subscription.
    14. Cancellation of redeemed securities. [Sec. 321.13]
    (a) Paying agent stamp. [Sec. 321.13] Each redeemed security must be 
cancelled by the imprint of a payment stamp. The stamp may not exceed 
1\1/8\ inches in any dimension and must include the following 
information in the arrangement shown:
Paid $------ (for recording amount paid).
Name, location, and four-digit paying agent code number assigned by the 
          appropriate Federal Reserve Bank referred to in Sec. 321.25 
          (subject to abbreviation and arrangement by the Bank).

Date ------ (for recording actual date of payment).
By ------ (for use by agent in recording initials, or signature, codes, 
          symbols, etc., of the officer or employee who approved or made 
          the payment).

    (b) Procurement of stamps. [Sec. 321.12] A paying agent may 
requisition stamps from the Fiscal Agency Department of the appropriate 
Federal Reserve Bank referred to in Sec. 321.25 or purchase its own 
stamps. Stamps not provided by the appropriate Federal Reserve Bank 
referred to in Sec. 321.25 must conform exactly in size and design to 
that prescribed or approved by the Bank. To insure

[[Page 215]]

legible impressions, stamps should be replaced when worn.
    (c) Imprinting payment stamp and recording payment date. [Sec. 
321.13] After determining that a security is eligible for payment, the 
agent should carefully imprint the payment stamp on its face in the open 
space immediately to the left of, and as close as possible to, the issue 
date and issuing agent validating data. It is important not to overprint 
any data on the security, particularly the serial number, since the 
security will subsequently be microfilmed. No other stamps shall be 
placed on the face of the security. Care should be taken to record 
legibly the correct amount, the exact date of redemption, and the 
signature, initials, or other identification of the agent's employee who 
approved or made the payment. A dark-colored ink must be used, and care 
should be taken not to smear the stamp impression or the writing.
    (d) Redemption-exchange. [Sec. 321.13] Eligible Series E and EE 
savings bonds and savings notes presented for redemption-exchange shall 
be stamped ``PAID'' in the same manner as securities redeemed for cash, 
but only when all elements of the transaction have been completed, 
including receipt of any additional cash. The exact date of redemption 
shall also be recorded on the exchange subscription to enable the 
appropriate Federal Reserve Bank referred to in Sec. 321.25 to establish 
the proper issue date for the Series HH bonds. An officer or other 
authorized employee of the agent shall also sign the exchange 
subscription, in his or her official capacity, and furnish other 
requested information that identifies the paying agent.
    (e) MICR-encoding of payment information. [Sec. 321.13] An agent 
shall MICR-encode the redemption value in the ``Amount'' field on the 
face of each security or arrange to have this service performed by 
another financial institution. If the agent transmits securities in 
mixed cash letters, it must also MICR-encode the routing/transit number 
assigned to the Bureau of the Public Debt's savings bond activity in the 
``R/T'' field on the face of all pre-October 1957 paper securities and 
those punch card securities on which it does not already appear. The 
Bureau's routing/transit number is 000090007. Care should be taken in 
repairing MICR-encoded items so as not to obliterate any data in 
surrounding MICR fields or elsewhere on the face of the security.
    15. Transmittal of securities to Federal Reserve Bank. [Sec. 321.14] 
An agent shall transmit and receive settlement for redeemed securities 
via EZ CLEAR, i.e., the Check Department of a Federal Reserve Bank or 
Branch or the Regional Check Processing Center. Redeemed securities may 
be transmitted in separately sorted or mixed cash letters to the Check 
Department of a Federal Reserve Bank or Branch, or to a Regional Check 
Processing Center, either directly, or via a parent office or 
correspondent institution. An agent shall transmit redeemed securities 
under cover of the appropriate transmittal document. Eligible Series E 
and EE savings bonds and savings notes redeemed in exchange for Series 
HH bonds must be transmitted for settlement via EZ CLEAR at the same 
time as the exchange application (Public Debt Form 3253) and any 
additional cash needed to complete the transaction are forwarded to the 
Fiscal Agency Department of the servicing Federal Reserve Bank referred 
to in Sec. 321.25. Eligible Series E and EE savings bonds and savings 
notes redeemed on exchange may be commingled with cash redemptions in 
mixed or separately sorted cash letters.
    16. Transmittal of securities to Federal Reserve Bank via fiscal 
agency system. [Sec. 321.14] The Fiscal Agency Department of a Federal 
Reserve Bank or Branch will not accept for settlement securities an 
agent has redeemed.
    17. Transmittal of securities to Federal Reserve Bank via EZ CLEAR. 
[Sec. 321.14]
    (a) Form to be used. [Sec. 321.14] The presenting institution shall 
transmit all redeemed securities to the Check Department of a Federal 
Reserve Bank or Branch or Regional Check Processing Center in accordance 
with the Bank's instructions. Except as otherwise provided in the Bank's 
instructions and operating circulars, cash letters may be comprised of 
one or more bundles of separately sorted redeemed securities (separately 
sorted cash letter) or one or more bundles of mixed items (mixed cash 
letter). The cash letter shall show the name, address, and ABA number of 
the presenting institution, the date of presentation, the total number 
of pieces transmitted, the value of each of the bundles in the cash 
letter, and the total value of the cash letter.
    (b) Composition of cash letters. [Sec. 321.14] Series A, B, C, D, E, 
EE, and I bonds and savings notes redeemed for cash or eligible Series E 
and EE bonds and savings notes redeemed on exchange may be commingled in 
mixed cash letters containing commercial checks and other items or 
separately sorted cash letters containing only redeemed securities. Each 
cash letter shall also contain a listing prepared in accordance with the 
Federal Reserve Bank's instructions.
    (c) Transmittal of securities. [Sec. 321.14] Cash letters containing 
redeemed securities shall be transmitted to a Federal Reserve Bank in 
accordance with the Bank's circulars and instructions.
    (d) Timing of transmittals. [Sec. 321.14] Cash letters containing 
redeemed securities should be transmitted according to the same schedule 
used for other commercial check collection system items.
    (e) Settlement for the audit of paid securities.
    (1) Settlement. [Sec. 321.14] The Federal Reserve Bank will make 
immediate settlement

[[Page 216]]

for the total value of redeemed securities as shown on each cash letter. 
Settlement will be made by a credit to the reserve or clearing account 
of the agent or designated correspondent institution. Data concerning 
redeemed security transmittals will be sent to the Bureau of the Public 
Debt for audit. The amount will be subject to adjustment if 
discrepancies are discovered after settlement has been made.
    (2) Audit and adjustment [Sec. 321.14] The Bureau of the Public Debt 
will audit all redemption data received from the Central Site as 
promptly as possible. Each presenting institution will, in due course, 
be notified by the Bank of any adjustments required. The Bank will 
adjust via a charge or credit to the presenting institution's Reserve or 
clearing account any amounts previously credited to that account.
    (3) Requests for Adjustments. Depositors who discover errors in 
their EZ CLEAR cash letters subsequent to deposit should allow sixty 
(60) calendar days from the date of their EZ CLEAR cash letter before 
requesting adjustments for the cash letter. This will allow sufficient 
time for the Treasury to classify the savings bonds, forward adjustments 
to the Central Site and for the Central Site to research and function 
adjustments to the depositor.
    (4) Separately Sorting Depositors should submit adjustment requests 
directly to the Central Site Adjustments Department in correspondence. 
However, all requests for adjustments due to incorrect cash letter 
crediting should be directed to the servicing Federal Reserve Bank.
    (5) Mixed Depositors should submit adjustment requests to their 
servicing Federal Reserve Bank.
    18. Record of securities paid. [Secs. 321.14 and 321.24] A record of 
the serial number and the amount paid for each redeemed security must be 
retained by the agent for one year so that settlement can be made if the 
security is lost in transit, and so that the agent can process any 
subsequent adjustment as described in paragraph 17(e)(2) above. For that 
purpose, agents are authorized to microfilm the face and back of each 
security they redeem. Such film records shall be kept confidential and 
prints therefrom may be made only with the permission of the Bureau of 
the Public Debt or an appropriate Federal Reserve Bank.

           Subpart E--Losses Resulting from Erroneous Payments

    19. Report of erroneous payment. [Sec. 321.16] Any erroneous payment 
that comes to the attention of an agent should be reported immediately 
to the Bureau of the Public Debt, Parkersburg, WV 26106-1328. The 
nearest office of the Secret Service should also be notified if the 
agent believes that a security presented for redemption may be 
counterfeit or stolen, or if the circumstances of the presentation are 
suspicious in any other respect.
    20. Notice to agent. [Sec 321.17(a)] The paying agent will be 
notified if an erroneous payment has occurred. The notice will generally 
be in writing from the Bureau of the Public Debt. If an investigation is 
to be made, the notice will enable the agent to notify its bonding 
company, assemble pertinent information concerning the transaction for 
presentation during the investigation, and take any other action it 
deems appropriate to protect its interest.
    21. Determination of liability. [Sec. 321.18 and Sec. 321.21]
    (a) Upon completing the investigation, the Bureau of the Public Debt 
will examine the available information and determine whether a paying 
agent may be relieved of liability for any loss that may have resulted. 
If the paying agent cannot be relieved of liability, demand will be made 
upon the paying agent to reimburse the Treasury promptly. Any amount not 
paid within 30 days following the mailing of the first demand letter is 
subject to the following charges.
    (1) Interest shall accrue from the date the first demand letter is 
mailed to the date reimbursement is made. The rate of interest to be 
used will be the current value of funds rate published annually or 
quarterly in the Federal Register and in effect during the entire period 
in which the remittance is late.
    (2) Administrative costs shall be assessed as set out in the first 
demand letter, if reimbursement is not made within 30 days of the date 
the first demand letter is mailed.
    (3) Penalty charges shall be assessed, in accordance with 31 U.S.C. 
3717(e), if reimbursement is not made within 120 days of the date the 
first demand letter is mailed. The penalty charge will accrue and be 
calculated from 30 days after the date the first demand letter is mailed 
to the date of reimbursement.
    (b) When a paying agent fails, within 120 days of the date the first 
demand letter is mailed, to make such reimbursement or to submit new 
evidence sufficient for Public Debt to change the determination of 
liability, by virtue of the paying agent's acceptance of settlement via 
credits to a Reserve, correspondent, or clearing account with a Federal 
Reserve Bank or Branch, the agent is deemed to have authorized the 
Federal Reserve Bank to debit the amount due from that account 
designated or utilized by the agent at the Federal Reserve Bank or 
Branch. An institution, designated by a paying agent to receive 
settlement on its behalf, in authorizing such paying agent to utilize 
its Reserve, correspondent, or clearing account on the books at the 
Federal Reserve Bank shall similarly be deemed to authorize such debits 
from that account.
    (c) Reconsideration of a determination of liability will be made in 
any case when a

[[Page 217]]

paying agent so requests and presents additional evidence and 
information regarding the transaction.
    22. Relief for lack of timely notice. [Sec 321.18] A paying agent 
will be relieved of liability to the United States for any loss 
resulting from the erroneous payment of securities where the Secretary 
of the Treasury, or his designee, determines that written notice of 
either liability or potential liability has not been given to the agent 
within ten years of the date of the erroneous payment.

                       Subpart F--Forwarding Items

    23. Securities forwarded to Federal Reserve Bank for payment. [Sec 
321.22]
    (a) General. [Sec 321.22] Securities presented for cash payment or 
redemption-exchange, that an agent is not authorized to redeem, shall be 
forwarded to the Fiscal Agency Department of the appropriate Federal 
Reserve Bank referred to in Sec. 321.25, with all required supporting 
documentation and any necessary payment instructions.
    (b) Signature to and certification of request for payment. [Sec 
321.22] An agent qualified under part 330 (Circular No. 888) may elect 
to specially endorse securities for presenters in lieu of requiring 
completion of the requests for payment. Unless this procedure is used, 
the presenter must sign the request on each security and the signature 
must be certified. Before completing the certification, the agent should 
establish the identity of the presenter. The Treasury's identification 
guidelines should be followed in view of the potential liability that 
attaches to such certification.
    (c) Address and Taxpayer identifying number. [Sec 321.22] In every 
case, a current address shall be furnished. The presenter's taxpayer 
identifying number (social security number or employer identification 
number) shall be provided if it is not included in the inscription.
    (d) Redemption-exchange. [Sec 321.22] For redemption-exchange 
transactions submitted as forwarding items, the issue date of the Series 
HH bonds will be the first day of the month in which a correctly 
completed and signed exchange subscription and full payment are received 
by the appropriate Federal Reserve Bank referred to in Sec. 321.25.
    (e) Partial redemption. [Secs. 321.9(l) and 321.22] Partial 
redemption of a security other than a $25 Series E bond or savings note, 
a $50 Series EE or I bond, or a $500 Series H or HH bond may be made by 
the appropriate Federal Reserve Bank referred to in Sec. 321.25. The 
amount paid must be equal to the redemption value of one or more 
authorized denominations on the date of the transaction. If a security 
is received by an agent for partial redemption, the words ``to the 
extent of $ (face amount) and reissue of the remainder'' should be added 
to the first sentence of the request for payment. The request should 
then be completed in the regular manner and the signature of the 
presenter certified or guaranteed. The security shall be forwarded to 
the Fiscal Agency Department of a Federal Reserve Bank.

                   Subpart G--Miscellaneous Provisions

    24. Fees and charges. [Sec 321.23] Service fees are not intended to 
compensate paying agents for the reporting of interest paid as part of 
the redemption value of securities as required by Federal Tax 
Regulations (26 CFR 1.0649-4).
    Fees will be paid to the presenting institution for securities 
redeemed during each calendar month that are submitted in separately 
sorted cash letters; such fee payments will be made only by ACH. No fees 
will be paid for securities received by the Federal Reserve Bank in 
mixed cash letters. The Bank will charge the presenting institution for 
processing redeemed securities received in mixed cash letters. Inquiries 
regarding separately sorted cash letters should be directed to the 
Pittsburgh Branch, Federal Reserve Bank of Cleveland, P.O. Box 867, 
Pittsburgh, PA 15230-0867. Inquiries regarding mixed cash letters should 
be directed to the Federal Reserve Bank or Branch or Regional Check 
Processing Center where the cash letters were directed.
    25. Claims on account of lost securities [Sec. 321.24] If a security 
redeemed by an agent is lost, stolen, or destroyed while in the custody 
of the agent, or in transit prior to settlement or audit, relief will be 
considered, provided the security can be identified by serial number. 
[See paragraph 18 of this appendix regarding the maintenance of records 
of redeemed securities]. The presenting institution should resubmit a 
photocopy of the security to obtain settlement in accordance with 
established procedures. Questions concerning the established procedures 
should be referred to the servicing Federal Reserve Bank.
    26. Education savings bond program. [Sec. 321.7(g)]
    (a) Section 6009 of the Technical Corrections and Miscellaneous 
Revenue Act of 1988, Public Law 100-647 (see 26 U.S.C. 135), permits 
taxpayers to exclude all, or a portion, of the interest earned on Series 
EE savings bonds bearing issue dates on or after January 1, 1990, and on 
Series I savings bonds from their income under certain conditions. This 
legislation did not create new savings bond redemption and interest 
reporting requirements for savings bond paying agents. However, if a 
bond owner indicates that he or she intends to seek the special tax 
treatment offered under this program, the paying agent is encouraged to 
provide assistance by:
    (1) Suggesting that he or she read IRS Form 8815 (particularly, the 
instructions on the form) as well as relevant portions of IRS 
Publication 17, ``Your Federal Income Tax ``,

[[Page 218]]

and Publication 550, ``Investment Income and Expenses,'' for detailed 
information; and
    (2) Suggesting that the presenter make a record of eligible bonds 
redeemed either by using IRS Optional Form 8818, or otherwise.
    (b) Bond owners seeking to benefit from the special tax exclusion, 
available through the savings bond education feature, should be aware of 
the following basic rules:
    (1) Only interest earned on Series EE bonds bearing issue dates on 
or after January 1, 1990, is eligible for the exclusion of interest 
income, where the proceeds from the redemption of the bonds are used to 
pay qualified post-secondary education expenses. Interest received on 
bonds bearing issue dates prior to January 1, 1990, is not eligible.
    (2)(i) The bonds must be registered in the name of a taxpayer as 
sole owner, or in the name of the taxpayer as co-owner, with the 
taxpayer's spouse as the other co-owner. Bonds registered in the name of 
the taxpayer's child, as owner or co-owner, will not qualify for the 
exclusion. A taxpayer may purchase bonds registered in beneficiary form, 
i.e., ``A payable on death to B'', naming any individual, including a 
child, as beneficary.
    (ii) The bonds must be registered in the name of a taxpayer who has 
attained the age of 24 years at the time of issue. Generally, a taxpayer 
must be 24 years of age on or before the first day of the month in which 
the taxpayer purchases the bond, because savings bonds bear the issue 
date of the first day of the month in which purchased.
    (3) The bond must be redeemed by the owner or co-owner. It may not 
be transferred to-the educational institution.
    (4) If the entire amount of the proceeds of the eligible bonds is 
less than, or equal to, the qualified post-secondary educational 
expenses incurred by the owner, his or her spouse, or his or her 
dependent, all interest received is excludable, subject to the 
limitations in paragraph (b)(7) of this section. If the amount of the 
proceeds exceeds such qualified expenses, the excludable portion of the 
interest will be reduced by a pro rata amount.
    (5) Qualified educational expenses are limited to tuition and fees 
required for the enrollment of, or attendance by, the taxpayer, or the 
taxpayer's spouse or dependent, at an eligible educational institution. 
These expenses are calculated net of scholarships, fellowships, 
employer-provided educational assistance, and other tuition reduction 
amounts, and must be incurred during the tax year of the redemption of 
the bonds for which the interest exclusion is claimed.
    (6) Eligible educational institutions include those defined in 
sections 1201(a) and 481(a)(1) (C) and (D) of the Higher Education Act 
of 1965, as in effect on October 21, 1988, excluding proprietary 
institutions. Such eligible institutions include post-secondary 
institutions, and vocational schools that meet the standards for 
participation in Federal financial aid programs, excluding proprietary 
institutions. Additional gudiance concerning eligible institutions 
should be obtained from the Department of Education.
    (7)(i) Interest exclusion benefits are based on the modified 
adjusted gross income of the taxpayer. For taxpayers filing a joint 
Federal income tax return, the exclusion is gradually decreased for 
modified adjusted gross income between $60,000 and $90,000. Married 
taxpayers filing jointly who have modified adjusted gross incomes above 
$90,000 are ineligible for the exclusion. For single taxpayers and heads 
of households, the exclusion is gradually decreased for such incomes 
between $40,000 and $55,000. Single taxpayers with such incomes above 
$55,000 are ineligible for the exclusion. After 1990, these income 
limits will be adjusted for inflation.
    (ii) Married taxpayers must file a joint return in order to qualify 
for the exclusion. Married taxpayers filing separate returns will not 
qualify for the exclusion, regardless of their modified adjusted gross 
incomes.
    (8) The taxpayer is responsible for maintaining adequate records of 
bond redemption transactions to support claims for the exclusion, in 
accordance with applicable rules and regulations of the Internal Revenue 
Service.
    (9) The Internal Revenue Service should be consulted for advice 
concerning the eligibility and tax treatment of bonds for the income 
exclusion under the educational savings bond program.
    27. Additional information. [Sec 321.25] Requests for additional 
advice, clarification of the payment regulations or this Appendix, and 
other matters relating to the actions of a financial institution as 
paying agent should generally be made to the appropriate Federal Reserve 
Bank referred to in Sec. 321.25.

[53 FR 37511, Sept. 26, 1988; 53 FR 39581, Oct. 7, 1988, as amended at 
55 FR 35397, Aug. 29, 1990; 59 FR 10538, Mar. 4, 1994; 61 FR 37197, July 
16, 1996; 63 FR 38042, 38043, July 14, 1998]



PART 323--DISCLOSURE OF RECORDS--Table of Contents




Sec.
323.1  Purpose of regulations.
323.2  Rules governing availability of information.
323.3  Materials available for inspection and copying.
323.4  Requests for identifiable records.
323.5  Fees.

    Authority: 80 Stat. 379; sec. 3, 60 Stat. 238, as amended; 5 U.S.C. 
301, 552.

    Source: 32 FR 9967, July 7, 1967, unless otherwise noted.

[[Page 219]]



Sec. 323.1  Purpose of regulations.

    The regulations of this part are issued to implement 5 U.S.C. 552(a) 
(2) and (3). The requirements of 5 U.S.C. 552(a)(1) are met through the 
publication in the Federal Register of the statement of the 
organization, functions and procedures available of the Fiscal Service, 
including the Bureau of the Public Debt, and revisions thereof, and 
through the publication therein of substantive and procedural 
regulations of the Bureau. A synopsis of the statements of Bureau 
organization, functions and procedures available will be published 
annually by the Office of the Federal Register in the U.S. Government 
Organization Manual.



Sec. 323.2  Rules governing availability of information.

    (a) General. The records of the Bureau of the Public Debt required 
by 5 U.S.C. 552 to be made available to the public shall be made 
available in accordance with the regulations on the Disclosure of 
Records of the Office of the Secretary issued under 5 U.S.C. 552 and 
published as part I of title 31 of the Code of Federal Regulations, 32 
FR 9562, July 1, 1967, except as specifically provided in this part.
    (b) Limitations on the availability of records relating to 
securities. Records relating to the purchase, ownership of, and 
transactions in Treasury securities or other securities handled by the 
Bureau of the Public Debt for government agencies or wholly or partially 
Government-owned corporations will ordinarily be disclosed only to the 
owners of such securities, their executors, administrators or other 
legal representatives or to their survivors or to investigative and 
certain other agencies of the Federal and State governments, to trustees 
in bankruptcy, receivers of insolvents' estates or where proper order 
has been entered requesting disclosure of information to Federal and 
State courts. These records are held confidential because they relate to 
private financial affairs of the owners.



Sec. 323.3  Materials available for inspection and copying.

    (a) Availability. The materials which are required under 5 U.S.C. 
552(a)(2) to be made available for inspection and copying are:
    (1) Final opinions or orders made in the adjudication of cases. Any 
issued by the Bureau of the Public Debt would be in the form of letters 
or memorandums setting out determinations made in disposing of any 
matter before the Bureau.
    (2) Statements of policy and interpretations which have been adopted 
by the Bureau but not published in the Federal Register.
    (3) Administrative staff manuals and instructions to the staff that 
affect any member of the public. Some Federal Reserve Bank memorandums 
and Public Debt memorandums will be made available under this provision.
    (b) Location. The materials listed in paragraph (a) of this section 
are available for inspection and copy during office hours in the Public 
Reading Room of the Treasury Department, 15th Street and Pennsylvania 
Avenue NW., Washington, DC 20220.



Sec. 323.4  Requests for identifiable records.

    (a) Procedure. (1) A written request for an identifiable record 
relating to a U.S. savings bond or note shall be addressed to the Deputy 
Commissioner, Bureau of the Public Debt, Chicago, IL 60605.
    (2) A request for an identifiable record relating to any Treasury 
Department security, other than a savings bond or note, or a security of 
a Government agency or a wholly or partially Government-owned 
corporation, the record of which is maintained by the Bureau of the 
Public Debt, shall be addressed to the Chief, Division of Loans and 
Currency, Bureau of the Public Debt, Washington, DC 20226.
    (3) A request for an identifiable record relating to any security of 
a Government agency or wholly or partially Government-owned corporation, 
the record for which is maintained by the Federal Reserve Bank of New 
York, shall be addressed to the Federal Reserve Bank of New York, New 
York, NY 10045.
    (4) A written request for any identifiable record that the Bureau of 
the Public Debt has other than those set out in paragraphs (a) (1), (2), 
and (3) of this

[[Page 220]]

section shall be addressed to the Commissioner of the Public Debt, 
Washington, DC 20220.
    (5) A request may be presented in person at the office to which a 
written request would be addressed.
    (b) Determination of availability. Determination as to whether or 
not a requested record shall be disclosed will be made by the Officer to 
whom the request should be directed under paragraph (a) of this section, 
and by the Bureau of Public Debt Information Officer for requests 
directed to the Office of the Commissioner, subject to an appeal to the 
Commissioner of the Public Debt. The decision of the Commissioner shall 
constitute final agency action unless he refers the appeal to the Fiscal 
Assistant Secretary, in which case the decision of the Fiscal Assistant 
Secretary shall constitute final agency action.



Sec. 323.5  Fees.

    The fees provided in part 1 of title 31 of the CFR (32 FR 9562, July 
1, 1967), shall apply to all requests for identifiable records under 
this part except as follows:
    (a) No charge will be made for verifying the record of a savings 
bond or note identified by series and denomination and either the 
registration and issue date or the serial number at the request of the 
owner, coowner, or surviving beneficiary or person entitled to the 
security under the applicable regulations.
    (b) No charge will be made for verifying the record of a registered 
Treasury security, other than a savings bond or note, or a registered 
security of a Government agency or a wholly or partially Government-
owned corporation, identified as to loan and registration for an owner, 
joint owner or person entitled to the security under the applicable 
regulations.
    (c) No charge will be made for advising a person who has submitted 
satisfactory evidence of ownership as to the status of a bearer Treasury 
security or a bearer security of a Government agency or a wholly or 
partially Government-owned corporation.
    (d) No charge will be made for furnishing an owner, coowner, joint 
owner, surviving beneficiary, or person who is entitled to the security 
under the applicable regulations a photocopy or similar reproduction of 
any Treasury security, with any necessary supporting documents, which it 
is alleged was improperly paid or was reissued, transferred or redeemed 
on a forged or defective request, endorsement, or assignment.
    (e) Fees may be waived for other classes of requested records upon a 
finding by the Commissioner of the Public Debt that the person 
requesting the information is entitled to the record requested without 
charge.



PART 328--RESTRICTIVE ENDORSEMENTS OF U.S. BEARER SECURITIES--Table of Contents




Sec.
328.1  Scope of regulations.
328.2  Definitions.
328.3  Authorization for restrictive endorsements.
328.4  Effect of restrictive endorsements.
328.5  Forms of endorsement.
328.6  Requirements for endorsement.
328.7  Shipment of securities.
328.8  Loss, theft, or destruction of securities bearing restrictive 
          endorsements.
328.9  Miscellaneous.

    Authority: R.S. 3706; 40 Stat. 288, 502, 1309; 46 Stat. 20; 48 Stat. 
343; 49 Stat. 20; 56 Stat. 189; 73 Stat. 622; 85 Stat. 5, 74 (31 U.S.C. 
738a, 739, 752, 752a, 753, 754, 754a and 754b); and 5 U.S.C. 301.

    Source: 38 FR 10682, Apr. 30, 1973, unless otherwise noted.



Sec. 328.1  Scope of regulations.

    The regulations in this part are applicable only to U.S. bearer 
securities\1\  presented:
---------------------------------------------------------------------------

    \1\ Certain agencies of the United States and certain Government and 
Government-sponsored corporations also authorize the restrictive 
endorsement of bearer securities.
---------------------------------------------------------------------------

    (a) By or through banks for payment at or after their maturity or 
call date, or in exchange for any securities under any exchange 
offering,
    (b) By banks for conversion to book-entry securities,
    (c) By or through banks at any time prior to their maturity or call 
date for redemption at par and application of

[[Page 221]]

the entire proceeds in payment of Federal estate taxes, provided said 
securities by the terms of their issue are eligible for such redemption, 
and
    (d) By Service Center Directors and District Directors, Internal 
Revenue Service, for redemption, with the proceeds to be applied in 
payment of taxes (other than securities presented under paragraph (c) of 
this section).

These regulations do not apply to bearer securities presented for any 
other transactions, or to registered securities assigned in blank, or to 
bearer, or so assigned as to become, in effect, payable to bearer.



Sec. 328.2  Definitions.

    Certain words and terms, as used in these regulations, are defined 
as follows:
    (a) Banks refer to, and include, incorporated banks (i.e., banks 
doing a general commercial banking business), incorporated trust 
companies (i.e., trust companies doing either a general banking business 
or a general trust business), and savings and loan associations, 
building and loan associations, and such other financial institutions as 
may be designated by the Federal Reserve banks. This definition is 
limited to institutions incorporated within the United States, its 
territories and possessions, the Commonwealth of Puerto Rico and the 
Canal Zone.
    (b) Bearer securities or securities are those which are payable on 
their face to bearer, the ownership of which is not recorded. They 
include Treasury bonds,Treasury notes, Treasury certificates of 
indebtedness, and Treasury bills.



Sec. 328.3  Authorization for restrictive endorsements.

    (a) By banks. Banks are authorized, under the conditions and in the 
form hereinafter provided, to place restrictive endorsements upon the 
face of bearer securities owned by themselves or their customers for the 
purpose of presentation to Federal Reserve banks or branches, or to the 
Bureau of the Public Debt, as follows:
    (1) For payment or redemption--at any time within 1 calendar month 
prior to their maturity date, or the date on which they become payable 
pursuant to a call for redemption, or at any time after their maturity 
or call date;
    (2) For exchange--during any period for their presentation pursuant 
to an exchange offering;
    (3) For redemption at par in payment of Federal estate taxes (only 
eligible securities)--at any time prior to their maturity or call 
redemption date; and
    (4) For conversion to book-entry securities under subpart O of part 
306 of this chapter--at any time prior to their maturity or call 
redemption date.
    (b) By Service Center Directors and District Directors, Internal 
Revenue Service. Service Center Directors and District Directors, 
Internal Revenue Service, are authorized, under the conditions and in 
the form hereinafter provided, to place restrictive endorsements upon 
the face of bearer securities for the purpose of presentation to Federal 
Reserve banks or branches, or to the Bureau of the Public Debt, for 
redemption and application of the proceeds in payment of taxes (other 
than securities presented for redemption at par and application of the 
proceeds in payment of Federal estate taxes).
    (c) Instructions from Federal Reserve banks. Federal Reserve banks 
will inform eligible banks and Service Center Directors and District 
Directors, Internal Revenue Service, in their respective districts as to 
the procedure to be followed under the authority granted by these 
regulations. Restrictive endorsements shall not be placed on securities 
until such information is received from the Federal Reserve banks.



Sec. 328.4  Effect of restrictive endorsements.

    Bearer securities bearing restrictive endorsements as herein 
provided will thereafter be nonnegotiable and payment, redemption, or 
exchange will be made only as provided in such endorsements.



Sec. 328.5  Forms of endorsement.

    (a) When presented by banks--(1) For payment or exchange. The 
endorsement placed on a bearer security presented for payment or 
exchange by a bank should be in the following form:

For presentation to the Federal Reserve Bank of --------------------, 
Fiscal Agent of

[[Page 222]]

the United States, for redemption or in exchange for securities of a new 
issue, in accordance with written instructions submitted by ------------
--------. (Insert name of presenting bank)

    (2) For redemption at par. The endorsement placed on a bearer 
security presented for redemption at par in payment of Federal estate 
taxes should be in the following form:

For presentation to the Federal Reserve Bank of ----------------, Fiscal 
Agent of the United States, for redemption at par in payment of Federal 
estate taxes, in accordance with written instructions submitted by ----
----------------------------. (Insert name of presenting bank)

    (b) For conversion to book-entry securities. The endorsement placed 
on a bearer security presented for conversion to a book-entry security 
shall be in the following form:

For presentation to the Federal Reserve Bank of ------------------, 
Fiscal Agent of the United States, for conversion to book-entry 
securities by ------------------. (Insert name of presenting bank)

    (c) When presented by Service Center Directors or District 
Directors, Internal Revenue Service. The endorsement placed on a bearer 
security by a Service Center Director or a District Director, Internal 
Revenue Service, should be in the following form:

For presentation to the Federal Reserve Bank of --------------;, Fiscal 
Agent of the United States, for redemption, the proceeds to be credited 
to the account of the Service Center Director, Internal Revenue Service, 
at ----------, for credit on the Federal ------------------ (Income, 
gifts, or other) taxes due from ------------------. (Name and address)



Sec. 328.6  Requirements for endorsement.

    (a) On bearer securities. The endorsement must be imprinted in the 
lefthand portion of the face of each security with the first line 
thereof parallel to the left edge of the security and in such manner as 
to be clearly legible and in such position that it will not obscure the 
serial number, series designation, or other identifying data, and cover 
the smallest possible portion of the text on the face of the security. 
The dimensions of the endorsement should be approximately 4 inches in 
width and 1\1/2\ inches in height, and must be imprinted by stamp or 
plate of such character as will render the endorsement substantially 
ineradicable. The name of the Federal Reserve bank of the district must 
appear on the plate or stamp used for the imprinting of the endorsement, 
and presentation to the appropriate branch of the Federal Reserve bank 
named will be considered as presentation to the bank. When securities 
are to be presented to the Bureau of the Public Debt, the words ``United 
States Treasury'' should be used in lieu of the words ``Federal Reserve 
Bank of --------------, Fiscal Agent of the United States.'' No 
subsequent endorsement will be recognized. If the form of endorsement on 
a security is different than that prescribed in Sec. 328.5, the 
provisions of Secs. 328.7 and 328.8 shall not apply to the security.
    (b) On coupons. Unmatured coupons attached to restrictively endorsed 
securities should be canceled by imprinting the prescribed endorsement 
in such manner that a substantial portion of the endorsement will appear 
on each such coupon. If any such coupons are missing, deduction of their 
face amount will be made in cases of redemption, and in cases of 
exchange, remittance equal to the face amount of the missing coupons 
must accompany the securities. All matured coupons, including coupons 
which will mature on or before the date of redemption or exchange 
(except as otherwise specifically provided in an announcement of an 
exchange offering), should be detached from securities upon which 
restrictive endorsements are to be imprinted.



Sec. 328.7  Shipment of securities.

    Securities bearing restrictive endorsements may be shipped, at the 
risk and expense of the shipper, by registered mail, messenger, armored 
car service, or express to the Federal Reserve bank of the district in 
which the presenting bank, the Service Center Director, or the District 
Director, Internal Revenue Service, is located, or to the appropriate 
branch of such Federal Reserve bank, shipments to the Bureau of the 
Public Debt, Washington, DC, should be made by messenger or armored car.

[[Page 223]]



Sec. 328.8  Loss, theft, or destruction of securities bearing restrictive endorsements.

    (a) General. Relief will be provided on account of securities 
bearing restrictive endorsements proved to have been lost, stolen or 
destroyed, upon the owner's application, in the same manner as 
registered securities which have not been assigned. (See subpart N of 
the current revision of Department Circular No. 300, the general 
regulations governing United States securities.) Except for bearer 
securities submitted for redemption at par in payment of Federal estate 
taxes, a bank will be considered the owner of securities handled on 
behalf of customers unless it otherwise requests. The application for 
relief (Form PD 2211) and instructions will be furnished by the Federal 
Reserve banks.
    (b) Bond of indemnity. Where securities bearing restrictive 
endorsements shipped by a bank have been lost, stolen, or destroyed, a 
bond of indemnity with surety satisfactory to the Secretary of the 
Treasury will be required from the owner. If such bond is executed by a 
bank or other corporation, the execution must be authorized by general 
or special resolution of the board of directors, or other body 
exercising similar functions under its bylaws. Ordinarily, no surety 
will be required on a bond executed by a presenting bank. The Secretary 
of the Treasury reserves the right, however, to require a surety in any 
case in which he considers such action necessary for the protection of 
the United States.



Sec. 328.9  Miscellaneous.

    The provisions of this circular are subject to the current revision 
of Department Circular No. 300. The Secretary of the Treasury reserves 
the right at any time to amend, supplement, or withdraw any or all of 
the provisions of these regulations.



PART 330--REGULATIONS GOVERNING PAYMENT UNDER SPECIAL ENDORSEMENT OF UNITED STATES SAVINGS BONDS AND UNITED STATES SAVINGS NOTES (FREEDOM SHARES)--Table of Contents




Sec.
330.0  Purpose.
330.1  Definition of terms.
330.2  Qualification for use of special endorsement.
330.3  Special endorsement of securities.
330.4  Guaranty given to the United States.
330.5  Evidence of owner's or beneficiary's authorization to affix 
          special endorsement.
330.6  Securities eligible for special endorsement.
330.7  Payment or redemption--exchange by agent.
330.8  Payment or redemption--exchange by Federal Reserve Bank.
330.9  Fiscal agents.
330.10  Modifications of other circulars.
330.11  Supplements, amendments, or revisions.

    Authority: 5 U.S.C. 301; 31 U.S.C. 3105.

    Source: 53 FR 37519, Sept. 26, 1988, unless otherwise noted.



Sec. 330.0  Purpose.

    The regulations in this part establish a procedure under which 
qualified paying agents may specially endorse United States Savings 
Bonds of certain series and United States Savings Notes (Freedom 
Shares), and either redeem the securities so endorsed, or forward them 
to a Federal Reserve Bank for redemption, with or without the owner's 
signature to the requests for payment.



Sec. 330.1  Definition of terms.

    As used in this part:
    (a) Federal Reserve Bank or Bank refers to the Federal Reserve Bank 
providing savings bond services to the district in which a paying agent 
is located. See Sec. 330.9.
    (b) Owner(s) means the person(s) named as registered owner or 
coowners on a bond or note, or as the designated beneficiary who has 
succeeded to ownership of the bond or note upon the

[[Page 224]]

death of the owner. For the purposes of special endorsement, but not 
payment, by a qualified agent, the term may also include fiduciaries, 
corporations, partnerships, associations, and other entities named on a 
security, where such registration is authorized.
    (c) Paying agent(s) or agent(s) refers to an eligible financial 
institution qualified under the provisions of this part to specially 
endorse securities and qualified, under the provisions of Department of 
the Treasury Circular No. 750, current revision (31 CFR part 321), to 
redeem eligible savings bonds and notes. The term includes the branches 
of a qualified agent that redeem bonds and notes and are themselves 
directly accountable for such redemptions.
    (d) Redemption and payment are used interchangeably for payment of a 
bond or note in accordance with the terms of its offering and the 
regulations governing it, and include redemption-exchange.
    (e) Redemption-exchange means any authorized redemption of eligible 
securities for the purpose of applying the proceeds in payment for other 
securities offered in exchange by the Treasury.
    (f) Savings bond(s) or bond(s) means a United States Savings Bond of 
Series A, B, C, D, E, EE, or I.
    (g) Savings notes(s) or notes(s) means a United States Savings Note 
(Freedom Share).
    (h) Security or securities means a savings bond or note, as defined 
in paragraphs (f) and (g) of this section.
    (i) Special endorsement means a procedure under which a security is 
redeemed by an agent, qualified under the provisions of this part, for 
cash or on redemption-exchange (or forwarded for redemption to a 
designated Federal Reserve Bank, where appropriate), utilizing a special 
stamp placed on the security in lieu of a request for payment signed by 
the owner.

[53 FR 37519, Sept. 26, 1988, as amended at 59 FR 10538, 10539, Mar. 4, 
1994; 63 FR 38044, July 14, 1998]



Sec. 330.2  Qualification for use of special endorsement.

    (a) Application for authority. Any financial institution qualified 
as a paying agent of savings bonds and notes under the provisions of 
Department of the Treasury Circular No. 750, current revision, may 
establish its eligibility to employ the special endorsement procedure by 
executing and submitting the appropriate application-agreement form to 
the designated Federal Reserve Bank. In executing the form, the agent 
certifies that, by duly executed resolution of its governing board or 
committee, it has been authorized to apply for the privilege of paying 
and processing securities in accordance with the provisions and 
conditions of this part (Circular No. 888, including all supplements, 
amendments, and revisions, and any related instructions). If the 
application is approved, the designated Federal Reserve Bank will issue 
a certificate of qualification.
    (b) Agents previously qualified. Paying agents qualified under 
previous revisions of this part are authorized to continue to act 
without requalification. They shall, however, be subject to the terms 
and conditions of the previously executed application and these 
regulations in the same manner and to the same extent as though they had 
requalified hereunder.
    (c) Termination of qualification. The Secretary of the Treasury 
reserves the right to withdraw the special endorsement authority from 
any paying agent at any time. Such authority will also be terminated at 
any time at the request of the paying agent. In either event, formal 
notice of the termination shall be given to the agent in writing by the 
designated Federal Reserve Bank.

[53 FR 37519, Sept. 26, 1988, as amended at 59 FR 10539, Mar. 4, 1994]



Sec. 330.3  Special endorsement of securities.

    (a) Form of endorsement. Each security processed under the 
provisions of this part shall bear the following endorsement:

    Request by owner and validity of transaction guaranteed in 
accordance with T.D. Circular No. 888, as revised. (Name, location, and 
paying agent code number assigned by designated Federal Reserve Bank.)


This endorsement must be legibly impressed in black or other dark-
colored ink on the back of the security in the

[[Page 225]]

space provided for the owner to request payment.
    (b) Endorsement stamps. Endorsement stamps may be obtained from the 
designated Federal Reserve Bank or, with its approval, purchased by the 
agent. Requests for stamps to be furnished or approved by the Bank must 
be made in writing by an officer of the paying agent. Stamps procured by 
an agent may not exceed a space bounded by 1\3/4\ inches vertically and 
3 inches horizontally. They must follow exactly the wording prescribed. 
They may also include space for the transaction date and the initials or 
signature of the officer or employee authorized to approve the 
transaction.
    (c) Securities registered in coownership or beneficiary form. In the 
case of securities registered in coownership or beneficiary form, the 
agent shall indicate which person, whose name is inscribed thereon, 
requested payment or exchange by encircling in black or other dark-
colored ink the name of that person (or both coowners, if the request is 
joint) in the inscription on the face of the securities.
    (d) Restrictions. Under no circumstances shall the special 
endorsement procedure be used to give effect to a transfer, 
hypothecation or pledge of a security, or to permit payment to any 
person other than the owner, coowner, or, where appropriate, 
beneficiary. Violation of these provisions will be cause for withdrawal 
of an agent's authority to process securities under the special 
endorsement procedure, and may involve additional penalties if the 
circumstances warrant such action.

[53 FR 37519, Sept. 26, 1988, as amended at 59 FR 10539, Mar. 4, 1994]



Sec. 330.4  Guaranty given to the United States.

    By the act of paying or presenting to a designated Federal Reserve 
Bank, for payment or exchange, a security on which it has affixed the 
special endorsement, a payment agent shall be deemed to have:
    (a) Unconditionally guaranteed to the United States the validity of 
the transaction, including the identification of the owner and the 
disposition of the proceeds or the new bonds, as the case may be, in 
accordance with the presenter's instruction;
    (b) Assumed complete and unconditional liability to the United 
States for any loss which may be incurred by the United States as a 
result of the transaction; and
    (c) Unconditionally agreed to make prompt reimbursement for the 
amount of any loss, upon request of the Department of the Treasury.

[53 FR 37519, Sept. 26, 1988, as amended at 59 FR 10539, Mar. 4, 1994]



Sec. 330.5  Evidence of owner's or beneficiary's authorization to affix special endorsement.

    (a) Form of authorization. The Treasury does not prescribe the form 
or type of instructions an agent must obtain from each owner, co-owner 
or beneficiary in order to use the special endorsement procedure. In the 
case of eligible Series E and EE savings bonds and savings notes 
presented for a redemption-exchange, the owner, coowner or beneficiary 
authorized to request the exchange (as specified in Circular No. 750, 
Sec. 321.8(b)), must sign the exchange subscription even though the 
eligible Series E and EE savings bonds and savings notes are specially 
endorsed.
    (b) Securities in coownership or beneficiary form. Securities 
registered in coownership or beneficiary form should be accepted for 
special endorsement only for immediate payment or exchange. Acceptance 
of bonds and notes for processing at some future date should be avoided 
as authority to utilize such endorsement generally expires upon the 
death of the owner or coowner on whose behalf securities were to be 
paid. Requests for payment of securities present by the surviving 
beneficiary must be supported by a certificate of death for the owner 
named thereon, as required by Circular No. 750, part 321 and the 
appendix to that part.
    (c) Record of authorization. Agents should maintain such records as 
may be necessary to establish the receipt of, and compliance with, 
instructions supporting the special endorsement. If the agent elects to 
make notations on the backs of the securities to serve as a record, the 
Bureau of the Public Debt

[[Page 226]]

will undertake to produce, on request, photocopies of such securities at 
any time up to ten years after the redemption date. However, the Bureau 
does not not assume responsibility for the adequacy of such notations, 
for the legibility of any photocopy, or for failure to produce a 
photocopy from its records.

[53 FR 37519, Sept. 26, 1988, as amended at 63 FR 38044, July 14, 1998]



Sec. 330.6  Securities eligible for special endorsement.

    (a) General authority. A qualified agent is authorized to affix the 
special endorsement to:
    (1) Savings bonds of Series A, B, C, D, E, EE, and I and savings 
notes to be redeemed for cash; and
    (2) Eligible savings bonds of Series E and EE and savings notes to 
be redeemed in exchange for Series HH bonds under the provisions of 
Circular No. 2-80 (31 CFR part 352).
    (b) Securities which may not be specially endorsed. The special 
endorsement procedure may not be used in any case in which payment or 
exchange:
    (1) Is requested by a parent on behalf of a minor child named on the 
security, or
    (2) Requires documentary evidence, under regulations contained in 
Circulars Nos. 530 and 3-80 (31 CFR parts 315 and 353, respectively), 
except as indicated in Sec. 330.5.
    (c) Securities owned by nonresident aliens. As securities owned by a 
nonresident alien individual, or a nonresident foreign corporation, 
partnership, or association, may be subject to the nonresident alien 
withholding tax, bonds and notes held or received by an agent for the 
account of such owners must be forwarded to the designated Federal 
Reserve Bank for redemption, even though the agent may specially endorse 
the securities.

[53 FR 37519, Sept. 26, 1988, as amended at 59 FR 10539, Mar. 4, 1994; 
63 FR 38044, July 14, 1998]



Sec. 330.7  Payment or redemption--exchange by agent.

    Specially endorsed securities may be paid in cash or, if they are 
eligible Series E and EE savings bonds or savings notes, redeemed in 
exchange for Series HH bonds pursuant to the authority and subject, in 
all other respects, to the provisions of Circular No. 750, current 
revision (31 CFR part 321), its appendix, and any other instructions 
issued under its authority. Each specially endorsed bond or note paid by 
an agent must have the agent's payment stamp imprinted on its face and 
show the date and amount paid. Securities so paid should be combined 
with other securities paid under that Circular and presented for 
settlement through EZ CLEAR. Securities redeemed by an agent in an 
exchange must be presented for settlement through EZ CLEAR separately 
from, but at the same times as, an exchange subscription and any 
remittance are forwarded to the Fiscal Agency Department of the 
appropriate Federal Reserve Bank.

[63 FR 38044, July 14, 1998]



Sec. 330.8  Payment or redemption--exchange by Federal Reserve Bank.

    Specially endorsed securities which an agent is not authorized to 
redeem for cash or on exchange should be forwarded to the Fiscal Agency 
Department of the designated Federal Reserve Bank. The transmittals must 
be accompanied by appropriate instructions governing the transaction and 
the disposition of the redemption proceeds or new bonds, as the case may 
be. The securities must be kept separate from others the agent has paid 
and must be submitted in accordance with instructions issued by the 
Bank.

[63 FR 38044, July 14, 1998]



Sec. 330.9  Fiscal agents.

    (a) The Federal Reserve Banks referred to below, as fiscal agents of 
the United States, are authorized to perform such services as may be 
requested by the Secretary of the Treasury, or his or her delegate, in 
connection with this part.
    (b) The following Federal Reserve Offices have been designated to 
provide savings bond services:

[[Page 227]]



------------------------------------------------------------------------
                                     Reserve districts   Geographic area
          Servicing office                 served            served
------------------------------------------------------------------------
Federal Reserve Bank, Buffalo        New York, Boston.  CT, MA, ME, NH,
 Branch, P.O. Box 961, Buffalo, NY                       NJ (northern
 14240.                                                  half), NY (City
                                                         & State), RI,
                                                         VT, Puerto Rico
                                                         and Virgin
                                                         Islands.
Federal Reserve Bank, Pittsburgh     Cleveland,         DE, KY (eastern
 Branch, P.O. Box 867, Pittsburgh,    Philadelphia.      half), NJ
 PA 15230.                                               (southern
                                                         half), OH, PA,
                                                         WV (northern
                                                         panhandle).
Federal Reserve Bank of Richmond,    Richmond, Atlanta  AL, DC, FL, LA
 P.O. Box 27622, Richmond, VA 23261.                     (southern
                                                         half), MD, MS
                                                         (southern
                                                         half), NC, SC,
                                                         TN (eastern
                                                         half), VA, WV
                                                         (except
                                                         northern
                                                         panhandle).
Federal Reserve Bank of              Minneapolis,       IA, IL (northern
 Minneapolis, 90 Hennepin Avenue,     Chicago.           half), IN
 Minneapolis MN 55401.                                   (northern
                                                         half), MI, MN,
                                                         MT, ND, SD, WI.
Federal Reserve Bank of Kansas       Dallas, San        AK, AR, AZ, CA,
 City, 925 Grand Avenue, Kansas       Francisco,         CO, HI, ID, IL
 City, MO 64198.                      Kansas City, St.   (southern
                                      Louis.             half), IN
                                                         (southern
                                                         half), KS, KY
                                                         (western half),
                                                         LA (northern
                                                         half), MO, MS
                                                         (northern
                                                         half), NE, NM,
                                                         NV, OK, OR, TN
                                                         (western half),
                                                         TX, WA, WY, UT
                                                         and GU.
------------------------------------------------------------------------

[59 FR 10539, Mar. 4, 1994, as amended at 63 FR 38044, July 14, 1998]



Sec. 330.10  Modifications of other circulars.

    The provisions of this part shall be considered as amending and 
supplementing: Department of the Treasury Circulars Nos. 530, 653, and 
750 (31 CFR parts 315, 316, and 321, respectively), and Department of 
the Treasury Circulars, Public Debt Series Nos. 1-80, 2-80, 3-80, 3-67, 
1-98, and 2-98 (31 CFR parts 351, 352, 353, 342, 359, and 360 
respectively), and any revisions thereof or amendments or supplements 
thereto, and those Circulars are hereby modified to the extent necessary 
to accord with the provisions of this part.

[63 FR 38044, July 14, 1998]



Sec. 330.11  Supplements, amendments, or revisions.

    The Secretary of the Treasury may, at any time, or from time to 
time, revise, supplement, amend or withdraw, in whole or in part, the 
provisions of this part.



PART 332--OFFERING OF UNITED STATES SAVINGS BONDS, SERIES H--Table of Contents




Sec.
332.1  Offering of bonds.
332.2  Description of bonds.
332.3  Governing regulations.
332.4  Registration.
332.5  Limitation on holdings.
332.6  Purchase of bonds.
332.7  Delivery of bonds.
332.8  Extended terms and yield for outstanding bonds.
332.9  Taxation.
332.10  Payment or redemption.
332.11  Reservation as to issue of bonds.
332.12  Fiscal agents.
332.13  Reservation as to terms of offering.

    Authority: 31 U.S.C. 3105 and 5 U.S.C. 301.

    Source: 57 FR 14281, Apr. 17, 1992, unless otherwise noted.



Sec. 332.1  Offering of bonds.

    The Secretary of the Treasury offered for sale to the people of the 
United States, Unites States Savings Bonds of Series H, hereinafter 
generally referred to as ``Series H bonds'' or ``bonds''. This offer was 
terminated on December 31, 1979.



Sec. 332.2  Description of bonds.

    (a) General. Series H bonds bear a facsimile of the signature of the 
Secretary of the Treasury and of the Seal of the Department of the 
Treasury. They were issued only in registered form and are 
nontransferable.
    (b) Denominations and prices. Series H bonds were issued at face 
(par) amount and were available in denominations of $500, $1,000, $5,000 
and $10,000.
    (c) Inscription and issue. A bond is valid only if an authorized 
issuing agent received payment therefore and duly inscribed, dated, and 
imprinted validated indicia on the bond. The face of each bond was to be 
inscribed as set forth below:
    (1) The name, social security account number and address of the 
owner, and the name of the beneficiary, if any, or

[[Page 228]]

the name, social security account number, and address of the first-named 
coowner and the name of the other coowner. The inscription of the social 
security number was required for bonds issued on or after January 29, 
1963.
    (2) The issue date in the upper right-hand portion of the bond; and
    (3) The imprint of the agent's validation indicia in the lower 
right-hand portion to show the date the bond was actually inscribed.



Sec. 332.3  Governing regulations.

    Series H bonds are subject to the regulations of the Department of 
the Treasury, now or hereafter prescribed, governing United States 
Savings bonds of Series A, B, C, D, E, F, G, H, J and K, contained in 31 
CFR part 315, also published as Department of the Treasury Circular No. 
530, current revisions, except as otherwise specifically provided 
herein.



Sec. 332.4  Registration.

    Series H bonds were permitted to be registered as set forth in 
subpart B of 31 CFR part 315, also published as Department of the 
Treasury Circular No. 530.



Sec. 332.5  Limitation on holdings.

    The amount of Series H bonds, originally issued during any one 
calendar year, that could be held by any one person, at any one time, 
computed in accordance with the governing regulations, was limited as 
follows:
    (a) General limitation. From $5,000 to $30,000 depending upon the 
issue date.
    (b) Special limitation for gifts to exempt organizations under 26 
CFR 1.501(c)(3)-1. $200,000 for bonds received as gifts by an 
organization which at the time of purchase was an exempt organization 
under the terms of 26 CFR 1.501(c)(3)-1.
    (c) Exchange pursuant to 31 CFR part 339. Series H bonds issued in 
an exchange pursuant to the provisions of 31 CFR part 339, also 
published as Department of the Treasury Circular No. 1036, were exempt 
from the annual limitation.



Sec. 332.6  Purchase of bonds.

    (a) Issuing agents. Only Federal Reserve Banks and Branches, as 
fiscal agents of the United States, and the Department of the Treasury 
were authorized to issue Series H bonds. However, financial institutions 
were permitted to forward applications for purchase of the bonds to the 
Federal Reserve Bank of their district. The date of receipt, by the 
Reserve Bank or the Department of the Treasury, of the application and 
payment governed the issue date of the bond purchased.
    (b) Application for purchase and remittance. (1) The applicant for 
purchase of Series H Bonds furnished.
    (i) Instructions for registration of the bonds to be issued, which 
must have been in an authorized form;
    (ii) The appropriate social security or employer identification 
number;
    (iii) The post office address of the owner or first-named coowner; 
and
    (iv) The address(es) for delivery of the bonds and for mailing 
checks in payment of interest, if other than that of the owner or first-
named coowner.
    (2) The application was to be forwarded to a Federal Reserve Bank or 
Branch, or the Department of the Treasury, accompanied by a remittance 
to cover the purchase price. Any form of exchange, including personal 
checks, was acceptable, subject to collection. Checks or other forms of 
exchange were to be drawn to the order of the Federal Reserve Bank or 
the United States Treasury. Checks payable by endorsement were not 
acceptable. Any depositary qualified pursuant to 31 CFR part 203, also 
published as Department of the Treasury Circular No. 92, current 
revision, was permitted to make payment by credit for bonds applied for 
on behalf of its customers, up to any amount for which it was qualified 
in excess of existing deposits, when so notified by the Federal Reserve 
Bank of its district.



Sec. 332.7  Delivery of bonds.

    Authorized issuing agents delivered Series H bonds, either over-the-
counter in person or by mail, at the risk and expense of the United 
States, to the address given by the purchaser, but only within the 
United States, its territories and possessions, and the Commonwealth of 
Puerto Rico. No mail deliveries elsewhere were made. If purchased by 
citizens of the United States temporarily residing abroad, the bonds

[[Page 229]]

were delivered at such address in the United States as the purchaser 
directed.



Sec. 332.8  Extended terms and yield for outstanding bonds.

    (a) Extended maturity period--(1) General. The terms extended 
maturity period, and second extended maturity period, when used herein, 
refer to 10-year intervals after the original maturity dates during 
which owners may retain their bonds and continue to earn interest 
thereon. No special action is required of owners desiring to take 
advantage of any extensions heretofore or herein granted.
    (2) Two extensions. All Series H bonds may be retained for two 
extended maturity periods of 10 years each. All Series H bonds cease to 
earn interest upon reaching final maturity. Final maturities are shown 
below:

------------------------------------------------------------------------
                                     Life of bonds
      Issue dates--1st day of      ---------------- Final maturity dates-
                                     yrs.    mos.        -1st day of
------------------------------------------------------------------------
Jun. 1952-Jan. 1957...............      29       8  Feb. 1982-Sep. 1986.
Feb. 1957-Dec. 1979...............      30  ......  Feb. 1987-Dec. 2009.
------------------------------------------------------------------------

    (b) Investment yields for outstanding bonds--General--interest 
rates. The investment yields on outstanding Series H bonds are as set 
out below:
    (1) For Series H bonds that were in original or extended maturity 
periods prior to November 1, 1982, the investment yield was 8.5 percent 
per annum, paid semiannually, effective for the period from the first 
semiannual interest payment date occurring on or after May 1, 1981, 
through the end of such periods. For bonds that entered extensions, see 
paragraphs (b)(2) through (b)(4) of this section.
    (2) For Series H bonds that entered extended maturity periods from 
November 1, 1982, through October 1, 1986, the investment yield was 7.5 
percent per annum, paid semiannually, for such periods, including bonds 
that entered into an extended maturity period, as shown below:

------------------------------------------------------------------------
                                                       Entered--1st day
    Issue dates--1st day of--          Extension              of
------------------------------------------------------------------------
Nov. 1962-Oct. 1966.............  2nd (final).......  Nov. 1982-Oct.
                                                       1986.
Nov. 1972-Oct. 1976.............  1st...............  Nov. 1982-Oct.
                                                       1986.
------------------------------------------------------------------------

    (3) For Series H bonds that entered extended maturity periods from 
November 1, 1986, through February 1, 1993, the investment yield was 6 
percent per annum, paid semiannually, for such periods, including bonds 
that entered into an extended maturity period, as shown below:

------------------------------------------------------------------------
                                                       Entered--1st day
    Issue dates--1st day of--          Extension              of
------------------------------------------------------------------------
Nov. 1966-Feb. 1973.............  2nd (final).......  Nov. 1986-Feb.
                                                       1993.
Nov. 1976-Dec. 1979.............  1st...............  Nov. 1986-Dec.
                                                       1989.
------------------------------------------------------------------------

    (4) For Series H bonds that entered or enter extended maturity 
periods on or after March 1, 1993, the guaranteed minimum investment 
yield is 4 percent per annum, paid semiannually, or the investment yield 
in effect at the beginning of such periods, including bonds that enter 
into an extended maturity period, as shown below:

------------------------------------------------------------------------
                                                       Entered--1st day
    Issue dates--1st day of--          Extension              of
------------------------------------------------------------------------
Mar. 1973-Dec. 1979.............  2nd (final).......  Mar. 1993-Dec.
                                                       1999.
------------------------------------------------------------------------

    (c) Tables of interest payments and investment yields. Tables of 
interest payments and investment yields are available from the Bureau of 
Public Debt and Federal Reserve Banks and Branches.

[57 FR 14281, Apr. 17, 1992, as amended at 58 FR 60937, Nov. 18, 1993]



Sec. 332.9  Taxation.

    The income derived from Series H bonds is subject to all taxes 
imposed under the Internal Revenue Code of 1986, as amended. The bonds 
are subject to estate, inheritance, gift, or other excise taxes, whether 
Federal or State, but are exempt from all other taxation now or 
hereafter imposed on the principal or interest thereof by any State, or 
any of the possessions of the United States, or by any local taxing 
authority.

[[Page 230]]



Sec. 332.10  Payment or redemption.

    A Series H bond became eligible for redemption at par at any time 
after six months from its issue date. To be redeemed, the bond must be 
presented and surrendered, with a duly executed request for payment, to 
a Federal Reserve Bank or Branch referred to in Sec. 332.12, or the 
Bureau of the Public Debt, Parkersburg, WV 26106-1328. In any case where 
bonds are surrendered for redemption in the month prior to an interest 
payment date, redemption will not be deferred but will be made in 
regular course, unless the presenter specifically requests that the 
transaction be delayed until that date. A request to defer redemption 
made more than one month preceding the interest payment date will not be 
accepted.

[57 FR 14281, Apr. 17, 1992, as amended at 59 FR 10539, Mar. 4, 1994]



Sec. 332.11  Reservation as to issue of bonds.

    The Secretary of the Treasury reserved the right to reject any 
application for Series H bonds, in whole or part, and to refuse to issue 
or permit to be issued hereunder any such bonds in any case or any class 
or classes of cases, if such action was deemed to be in the public 
interest. Any action in any such respect was final.



Sec. 332.12  Fiscal agents.

    (a) Federal Reserve Banks and Branches referred to below, as fiscal 
agents of the United States, are authorized to perform such services as 
may be requested of them by the Secretary of the Treasury, or his or her 
delegate, in connection with the reissue, redemption and payment of 
Series H bonds.
    (b)(1) The following Federal Reserve Offices have been designated to 
provide savings bond services:

------------------------------------------------------------------------
                                     Reserve districts   Geographic area
          Servicing office                 served            served
------------------------------------------------------------------------
Federal Reserve Bank, Buffalo        New York, Boston.  CT, MA, ME, NH,
 Branch, P.O. Box 961, Buffalo, NY                       NJ (northern
 14240.                                                  half), NY (City
                                                         & State), RI,
                                                         VT, Puerto Rico
                                                         and Virgin
                                                         Islands.
Federal Reserve Bank, Pittsburgh     Cleveland,         DE, KY, (eastern
 Branch, P.O. Box 867, Pittsburgh,    Philadelphia.      half), NJ
 PA 15230.                                               (southern
                                                         half), OH, PA,
                                                         WV (northern
                                                         panhandle).
Federal Reserve Bank of Richmond,    Richmond, Atlanta  AL, DC, FL, LA
 P.O. Box 27622, Richmond, VA 23261.                     (southern
                                                         half), MD, MS
                                                         (southern
                                                         half), NC, SC,
                                                         TN (eastern
                                                         half), VA, WV
                                                         (except
                                                         northern
                                                         panhandle).
Federal Reserve Bank of              Minneapolis,       IA, IL (northern
 Minneapolis, 250 Marquette Avenue,   Chicago.           half), IN
 Minneapolis, MN 55480.                                  (northern
                                                         half), MN, MT,
                                                         ND, SD, WI.
Federal Reserve Bank of Kansas       Dallas, San        AK, AR, AZ, CA,
 City, 925 Grand Avenue, Kansas       Francisco,         CO, HI, ID, IL
 City, MO 64198.                      Kansas City, St.   (southern
                                      Louis.             half), IN
                                                         (southern
                                                         half), KS, KY
                                                         (western half),
                                                         LA (northern
                                                         half), MO, MS
                                                         (northern
                                                         half), NE, NM,
                                                         NV, OK, OR, TN
                                                         (western half),
                                                         TX, WA, WY, UT
                                                         and GU.
------------------------------------------------------------------------

    (2) Until March 1, 1996, other Federal Reserve Offices may continue 
to provide some savings bond services, but such services will be phased 
out over the period prior to that date.

[59 FR 10539, Mar. 4, 1994]



Sec. 332.13  Reservation as to terms of offering.

    The Secretary of the Treasury may at any time, or from time to time, 
supplement or amend the terms of this offering of bonds, or of any 
amendments or supplements thereto.



PART 337--SUPPLEMENTAL REGULATIONS GOVERNING FEDERAL HOUSING ADMINISTRATION DEBENTURES--Table of Contents




Sec.
337.0  Scope of regulations.

                   Subpart A--Certificated Debentures

337.1  Applicability of Treasury regulations.
337.2  Transportation charges and risks.
337.3  Termination of transfers and denominational exchange 
          transactions.
337.4  Presentation and surrender.
337.5  Assignments.

[[Page 231]]

337.6  Conversions to book-entry.
337.7  Servicing transactions.
337.8  Payment of mortgage insurance premiums.
337.9  Payment of final interest.
337.10  Payments.

                    Subpart B--Book-Entry Debentures

337.11  Original issue and conversions.
337.12  Applicability of TREASURY DIRECT regulations.
337.13  Payment of mortgage insurance premiums.

                    Subpart C--Additional Information

337.14  Address for further information.
337.15  General provisions.

    Authority: 5 U.S.C. 301; 31 U.S.C. 321; Sec. 516, Pub. L. 102-550, 
106 Stat. 3790.

    Source: 59 FR 42162, Aug. 17, 1994, unless otherwise noted.



Sec. 337.0  Scope of regulations.

    The United States Department of the Treasury is the agent of the 
Federal Housing Administration for transactions in any debentures which 
have been or may be issued pursuant to the authority conferred by the 
National Housing Act, 12 U.S.C. 1701 et seq., as amended from time to 
time, including Mutual Mortgage Insurance Fund Debentures, Housing 
Insurance Fund Debentures, War Housing Insurance Fund Debentures, 
Military Housing Insurance Fund Debentures, and National Defense Housing 
Insurance Fund Debentures. In accordance with the regulations adopted by 
the Federal Housing Commissioner and approved by the Secretary of the 
Treasury, such transactions are governed by regulations of the 
Department of the Treasury, so far as applicable. The Bureau of the 
Public Debt, Office of Public Debt Accounting operates the FHA debenture 
computer system and performs the day-to-day operations and transactions 
relating to the debentures.

[66 FR 56432, Nov. 8, 2001]



                   Subpart A--Certificated Debentures



Sec. 337.1  Applicability of Treasury regulations.

    The general regulations governing United States securities, part 306 
of this chapter, apply, as the regulations for similar transactions and 
operations in certificated debentures. To the extent that the provisions 
in this part differ from the provisions in part 306, the provisions in 
this part shall prevail.



Sec. 337.2  Transportation charges and risks.

    Debentures presented for redemption at call or maturity, or for 
authorized prior purchase, or for conversion to book-entry form, must be 
delivered at the expense and risk of the holder. Debentures bearing 
restricted assignments may be forwarded by registered mail, but for the 
owner's protection debentures bearing unrestricted assignments should be 
forwarded by insured registered mail.

[66 FR 56432, Nov. 8, 2001]



Sec. 337.3  Termination of transfers and denominational exchange transactions.

    Debentures, which by their terms are subject to call, may be called 
for redemption, in whole or in part, at par and accrued interest, on any 
interest date on three months' notice. No transfers or denominational 
exchanges in certificated debentures covered by a given call will be 
made on the books of the Department of the Treasury on or after the 
announcement of such call. However, this does not affect the right of a 
holder of such debenture to sell and assign it on or after the 
announcement of the call date.



Sec. 337.4  Presentation and surrender.

    (a) For redemption. To facilitate the redemption of called or 
maturing debentures, they may be presented and surrendered in the manner 
prescribed in this section in advance of the call or maturity date, as 
the case may be. Early presentation by holders will insure prompt 
payment of principal and interest when due. The debentures must first be 
assigned by the registered payee or his assignee, or by his duly 
constituted representative, if required, in the form and manner 
indicated in Sec. 337.5, and must then be submitted to the Bureau of the 
Public Debt at the address given in Sec. 337.14, accompanied

[[Page 232]]

by appropriate written advice. A transmittal advice for this purpose 
will accompany the notice of call.
    (b) For purchase. Debentures, the purchase of which has been 
authorized prior to call or maturity, may be assigned as instructed in 
paragraph (a) of this section and immediately submitted in accordance 
with procedures prescribed by HUD for this purpose.

[59 FR 42162, Aug. 17, 1994, as amended at 66 FR 56432, Nov. 8, 2001]



Sec. 337.5  Assignments.

    (a) If the registered payee, or an assignee holding a certificated 
debenture under proper assignment from the registered payee, desires 
that payment be made to such payee or assignee, the debenture need not 
be assigned. If the owner desires for any reason that payment be made to 
another, without intermediate assignment, the debentures should be 
assigned to ``The Federal Housing Commissioner for redemption (or, 
purchase) for the account of --------,'' inserting the name and address 
of the person to whom payment is to be made. Proof of the authority of 
the individual assigning on behalf of an owner will be required in 
accordance with part 306 of this chapter.
    (b) An assignment in blank or other assignment having similar effect 
will be recognized, but in that event the debenture would be, in effect, 
payable to bearer, and payment will be made in accordance with the 
instructions received from the person surrendering the debenture for 
redemption or purchase. For the owner's protection, such assignments 
should be avoided unless the owner is willing to lose the protection 
afforded by registration.
    (c) Debentures submitted for conversion to book-entry form should be 
assigned to ``The Federal Housing Commissioner for conversion to book-
entry debentures for the account of --------.'' The registration on the 
book-entry account and/or the account number in which the debentures 
should be deposited should be indicated.
    (d) All assignments must be made on the debentures themselves unless 
otherwise authorized by the Department of Treasury.



Sec. 337.6  Conversions to book-entry.

    Upon implementation of the book-entry debenture system, to be 
announced in advance by separate public notice, all new debentures will 
be issued only in book-entry form, and may not thereafter be converted 
to certificated form.
    Certificated debentures may, upon the owner's request in accordance 
with Sec. 337.5(c), be converted to book-entry. If such action is taken, 
the owner shall be deemed to have irrevocably waived the right to hold 
such debenture in certificated form.



Sec. 337.7  Servicing transactions.

    Upon implementation of the book-entry debenture system, to be 
announced in advance by separate public notice, any transfer or 
denominational exchange of certificated debentures generally will be 
made in book-entry form. If certificated debentures are desired, the 
owner should so request in writing, before the book-entry debentures are 
issued.



Sec. 337.8  Payment of mortgage insurance premiums.

    When certificated debentures are tendered for purchase prior to 
maturity in order that the proceeds thereof be applied to pay for 
mortgage insurance premiums, any difference between the amount of the 
debentures purchased and the amount of the mortgage insurance premium 
will generally be issued to the owner in the form of a book-entry 
debenture in the exact amount of such difference, provided it is one 
dollar ($1.00) or more. However, if the owner so requests, such 
difference will be settled with certificated debenture(s), together with 
a cash adjustment, if any. Such request should be made in writing, 
before the book-entry debenture in the amount of the difference is 
issued.



Sec. 337.9  Payment of final interest.

    Final interest on any debenture, whether purchased prior to or 
redeemed on or after the call or the maturity date, will be paid with 
the principal. In all cases the payment of principal and final interest 
will be mailed or directed to the payment address

[[Page 233]]

given in the form of advice accompanying the debenture surrendered.



Sec. 337.10  Payments.

    Payments on certificated debentures will be made by fiscal agency 
check in accordance with part 355 of this chapter, or, upon request, by 
direct deposit (electronic funds transfer) in accordance with part 370 
of this chapter. Information as to the deposit account at the financial 
institution designated to receive a direct deposit payment shall be 
provided on the appropriate form(s) designated by the Department.



                    Subpart B--Book-Entry Debentures



Sec. 337.11  Original issue and conversions.

    Upon implementation of the book-entry debenture system, to be 
announced in advance by separate public notice, all new debentures will 
be issued only in book-entry form in the exact amount payable to the 
owner. Once issued in book-entry form, a debenture may not be converted 
to certificated form.



Sec. 337.12  Applicability of TREASURY DIRECT regulations.

    The regulations governing the TREASURY DIRECT Book-Entry Securities 
System (TREASURY DIRECT) (part 357 of this chapter) apply to govern 
transactions in FHA book-entry debentures, with the following 
exceptions:
    (a) Securities account. (See Sec. 357.20 of this chapter.) An 
account in the book-entry debenture system may be established by the 
Department of the Treasury upon receipt of the request that a new 
debenture be issued or that a certificated debenture be converted to 
book-entry form. The statement of account shall contain information 
regarding the account as of the date of such statement. It will include 
a unique account number, but will not include price information.
    (b) Transfers. (See Sec. 357.22 of this chapter.) A book-entry 
debenture may be transferred only between accounts established in the 
FHA book-entry debenture system.
    (c) Debentures announced for call. Debentures, which by their terms 
are subject to call, may be called for redemption, in whole or in part, 
at par and accrued interest, on any interest date on three months' 
notice. For purposes of a transaction request affecting ownership and/or 
payment instructions with respect to a debenture announced for call, a 
proper request must be received not less than twenty (20) calendar days 
preceding the next payment date. If the twentieth day preceding a 
payment date falls on a Saturday, Sunday, or a Federal holiday, the last 
day set for the receipt of a transaction request will be the last 
business day preceding that date. If a transaction request is received 
less than twenty (20) calendar days preceding a payment date, the 
Department may, in its discretion, act on such request if sufficient 
time remains for processing. If a transaction request is received too 
late for completion of the requested transaction, principal and final 
interest on the called debentures will be paid to the owner of record 
and sent to the payment address of record.
    (d) Payments. (See Sec. 357.26 of this chapter.) Direct deposit 
(electronic funds transfer) payments with respect to debentures, e.g., 
principal, interest and cash adjustments, will be made without 
prenotification messages.



Sec. 337.13  Payment of mortgage insurance premiums.

    When book-entry debentures are being purchased prior to maturity to 
pay for mortgage insurance premiums, the difference between the amount 
of the debentures purchased and the mortgage insurance premiums shall be 
issued to the owner in the form of a book-entry debenture in the exact 
amount of such difference, provided it is one dollar ($1.00) or more.



                    Subpart C--Additional Information



Sec. 337.14  Address for further information.

    Further information regarding the issuance of, transactions in, and 
redemption of, FHA debentures may be obtained from the Bureau of the 
Public Debt, Office of Public Debt Accounting, 200 Third Street, P.O. 
Box 396, Parkersburg, West Virginia 26102-0396.

[66 FR 56432, Nov. 8, 2001]

[[Page 234]]



Sec. 337.15  General provisions.

    As fiscal agents of the United States, Federal Reserve Banks are 
authorized to perform any necessary acts under this part. The Secretary 
of the Treasury may at any time or from time to time prescribe 
supplemental and amendatory regulations governing the matters covered by 
this part, notice of which shall be communicated promptly to the 
registered owners of the debentures.

[66 FR 56432, Nov. 8, 2001]



PART 339--EXCHANGE OFFERING OF UNITED STATES SAVINGS BONDS, SERIES H--Table of Contents




Sec.
339.0  Offering of Series H bonds in exchange for Series E bonds and 
          savings notes.
339.1  Definitions of words and terms as used in this circular.
339.2  Denominations.
339.3  Exchanges with privilege of deferring reporting of interest for 
          Federal income tax purposes.
339.4  Exchanges without tax deferral.
339.5  Governing regulations.
339.6  Fiscal agents.
339.7  Preservation of rights.
339.8  Reservation as to terms of offer.

    Authority: Secs. 18, 20, and 22 of the Second Liberty Bond Act, as 
amended (40 Stat. 1309, 48 Stat. 343, 49 Stat. 21, 73 Stat. 621, all as 
amended; 31 U.S.C. 753, 754b, 757c), and 5 U.S.C. 301.

    Source: 36 FR 23856, Dec. 15, 1971, unless otherwise noted.



Sec. 339.0  Offering of Series H bonds in exchange for Series E bonds and savings notes.

    The Secretary of the Treasury, pursuant to the authority of the 
Second Liberty Bond Act, as amended, hereby offers to the people of the 
United States, U.S. Savings Bonds of Series H in exchange for 
outstanding U.S. Savings Bonds of Series E and U.S. Savings Notes 
(freedom shares) without regard to the annual limitation on holdings for 
the Series H bonds. The Series H bonds offered hereunder are those 
described in Department Circular No. 905, current revision, except as 
otherwise specifically provided herein. This offering will continue 
until terminated by the Secretary of the Treasury.

    Editorial Note: The sale of U.S. Savings Bonds, Series H, was 
terminated at the close of business Dec. 31, 1979. See 44 FR 77158, Dec. 
31, 1979.



Sec. 339.1  Definitions of words and terms as used in this circular.

    Unless the context otherwise requires or indicates:
    (a) Securities mean outstanding U.S. Savings Bonds of Series E and 
U.S. Savings Notes (freedom shares).
    (b) Owner means an owner of securities, except a commercial bank in 
its own right (as distinguished from a representative or fiduciary 
capacity) and a nonresident alien who is a resident of an area with 
respect to which the Treasury Department restricts or regulates delivery 
of checks drawn against funds of the United States or any agency or 
instrumentality thereof. The term includes a registered owner, whether 
or not a natural person, either coowner (but only the principal coowner 
if Series H bonds are requested in a form of registration different from 
that on the securities submitted), a surviving beneficiary, or any other 
person who would be entitled to reissue under the regulation governing 
U.S. Savings Bonds,\1\ such as, but not limited to, any person entitled 
to succeed to the estate of a deceased owner.
---------------------------------------------------------------------------

    \1\ Department Circular No. 530, current revision (31 CFR part 315). 
Copies may be obtained from any Federal Reserve Bank or Branch or the 
Bureau of the Public Debt, Washington, DC 20220.
---------------------------------------------------------------------------

    (c) Commercial bank means a bank accepting demand deposits.
    (d) Interest means the increment in value on Series E savings bonds 
and on savings notes.
    (e) Principal coowner means a coowner who purchased the securities 
submitted for exchange with his own funds or received them as a gift, 
legacy or inheritance or as a result of judicial proceedings and had 
them reissued in coownership form, provided he has received no 
contribution in money or money's worth from the other coowner for 
designating him on the securities.



Sec. 339.2  Denominations.

    Series H bonds, available for use hereunder, are in denominations of 
$500, $1,000, $5,000 and $10,000.

[[Page 235]]



Sec. 339.3  Exchanges with privilege of deferring reporting of interest for Federal income tax purposes.

    (a) Tax-deferred exchanges. Pursuant to the provisions of section 
1037(a) of the Internal Revenue Code of 1954, the Secretary of the 
Treasury hereby grants to owners who have not been reporting the 
interest on their securities on an accrual basis for Federal income tax 
purposes the privilege of exchanging such securities for Series H bonds 
and of continuing to defer reporting of the interest on the securities 
exchanged (except interest referred to in paragraph (b)(5) of this 
section) for Federal income tax purposes to the taxable year in which 
the Series H bonds received in exchange are disposed of, are redeemed, 
or have reached final maturity, whichever is earlier.\2\
---------------------------------------------------------------------------

    \2\ The interest paid semiannually by check on all Series H bonds, 
whether issued in exchange under this or any other section, or 
otherwise, is subject to the Federal income tax for the taxable year in 
which it is received.
---------------------------------------------------------------------------

    (b) Rules governing the exchange. (1) Exchange subscription Form PD 
3253, completed and executed in accordance with the instructions 
thereon, the securities, any cash difference (see paragraph (b)(3) of 
this section), and any supporting evidence which may be required under 
the governing regulations\3\  may be presented or forwarded to any 
authorized agency.\4\
---------------------------------------------------------------------------

    \3\ For example, a beneficiary named on Series E bonds would have to 
submit proof of the death of the registered owner in order to exchange 
such bonds for Series H bonds.
    \4\ Agents authorized to pay Series E bonds and savings notes are 
authorized to accept and handle exchange subscriptions submitted by 
natural persons whose names are inscribed on the face of the bonds and 
notes as owners or coowners in their own right. However, as agents of 
subscribers they may forward any exchange subscription to a Federal 
Reserve Bank or Branch or the Bureau of the Public Debt, Washington, DC 
20226, for acceptance and handling.
---------------------------------------------------------------------------

    (2) A Series H bond issued upon exchange will be registered in the 
name of the owner of the securities submitted in any authorized form of 
registration. However, the principal coowner must be named as owner or 
coowner.
    (3) The total current redemption value of the securities submitted 
for exchange in any one transaction must amount to $500 or more. If the 
total current redemption value is in an even multiple of $500, Series H 
bonds must be requested in that exact amount. If the total current 
redemption value exceeds $500, but is not in an even multiple of $500, 
the owner has the option of furnishing cash necessary to obtain Series H 
bonds of the next higher $500 multiple, or of receiving payment of the 
difference between the total current redemption value and the next lower 
multiple of $500. For example, under the rules prescribed in this 
circular, if the securities submitted for exchange in one transaction 
total $4,253.33 current redemption value, the owner may elect to:
    (i) Receive $4,000 in Series H bonds and the amount of the 
difference, $253.33, or
    (ii) Pay the difference, $246.67, necessary to obtain $4,500 in 
Series H bonds.\5\
---------------------------------------------------------------------------

    \5\ If a paying agent accepts a subscription solely for the purpose 
of forwarding it, or if the owner forwards it direct, to a Federal 
Reserve Bank or Branch or to the Bureau of the Public Debt, the 
remittance for the difference, by check or other form of exchange (which 
will be accepted subject to collection), must be drawn to the order of 
the Federal Reserve Bank or the United States Treasury, as the case may 
be. The remittance must accompany the subscription and the securities to 
be exchanged.
---------------------------------------------------------------------------

    (4) Any amount paid to the owner as a cash adjustment (as in 
paragraph (3)(i) of this section) must be treated as income for Federal 
income tax purposes for the year in which it is received up to an amount 
not in excess of the total interest on the securities exchanged.\6\
---------------------------------------------------------------------------

    \6\ The amount, if any, paid to the owner in excess of the interest 
is a repayment on account of the purchase price of the securities 
exchanged, not income.
---------------------------------------------------------------------------

    (5) Each Series H bond issued under this section will be stamped 
``EX'' or ``EXCH'' to show that it was issued upon exchange. Each bond 
also will bear a legend showing how much of its issue price represents 
interest on the securities exchanged. This interest must be treated as 
income for Federal income tax purposes for the year in

[[Page 236]]

which the Series H bond is redeemed, is disposed of, or finally matures, 
whichever is earlier.
    (6) The Series H bonds will be dated as of the first day of the 
month in which the securities, the exchange subscription, any necessary 
cash difference and supporting evidence, if any, are accepted for 
exchange by an authorized agency.



Sec. 339.4  Exchanges without tax deferral.

    Exchanges by owners who:
    (a) Report the interest on all of their securities annually for 
Federal income tax purposes, or
    (b) Who elect to report all such interest in the year of the 
exchange, or
    (c) Who are tax-exempt under the provisions of the Internal Revenue 
Code of 1954 and the regulations issued thereunder,

Will be handled in the same manner and will be governed by the rules 
prescribed for exchanges under Sec. 339.3. However, the Series H bonds 
will not bear the legend referred to in Sec. 339.3(b)(5). Any part of 
the cash adjustment received which represents interest previously 
reported for Federal income tax purposes need not be accounted for. The 
Series H bonds may be registered in the name of the owner of the 
securities submitted in exchange in any authorized form of registration.



Sec. 339.5  Governing regulations.

    All Series H bonds issued under this circular are subject to the 
regulations, now or hereafter prescribed, contained in Department 
Circular No. 530, current revision (part 315 of this chapter).



Sec. 339.6  Fiscal agents.

    Federal Reserve Banks and Branches, as fiscal agents of the United 
States, are authorized to perform such services as may be requested of 
them in connection with exchanges under these regulations.



Sec. 339.7  Preservation of rights.

    The provisions of Treasury Department Circulars Nos. 530, 653, and 
905, as currently revised, are hereby modified and amended to the extent 
that they are not in accordance with this circular. However, nothing 
contained herein shall limit or restrict rights which owners of Series H 
bonds received in earlier exchanges have heretofore acquired.



Sec. 339.8  Reservation as to terms of offer.

    The Secretary of the Treasury reserves the right to reject any 
exchange subscription for Series H bonds, in whole or in part, and to 
refuse to issue or permit to be issued hereunder any such bonds in any 
case or any class or classes of cases if he deems such action to be in 
the public interest, and his action in any such respect shall be final.
    The foregoing revision and amendment is made for the purpose of 
granting to owners of savings notes the same privilege afforded owners 
of Series E savings bonds for exchanging their securities for Series H 
bonds with or without tax deferral. As good cause exists for making this 
change, which involves public property and contracts relating to the 
fiscal and monetary affairs of the United States, I find that notice and 
public procedures are unnecessary. This action is effected under the 
provisions of sections 18, 20, and 22 of the Second Liberty Bond Act, as 
amended (40 Stat. 1309, 48 Stat. 343, 49 Stat. 21, 73 Stat. 621, all as 
amended; 31 U.S.C. 753, 754b, 757c), and 5 U.S.C. 301.



PART 340--REGULATIONS GOVERNING THE SALE OF TREASURY BONDS THROUGH COMPETITIVE BIDDING--Table of Contents




Sec.
340.0  Authority for sale of Treasury bonds through competitive bidding.
340.1  Public notice--description of bonds--terms of offer.
340.2  Denominations and exchanges.
340.3  Taxation.
340.4  Acceptance as security for public deposits.
340.5  Notice of intent to bid.
340.6  Submission of bids.
340.7  Deposits--retention--return.
340.8  Acceptance of bids.
340.9  Bids--revocations--rejections--postponements--reoffers.
340.10  Payment for and delivery of bonds.
340.11  Failure to complete transaction.
340.12  Reservations as to terms of circular.

    Authority: Sec. 8, 50 Stat. 481, as amended; R.S. 3706; secs. 1, 4, 
18, 5, 40 Stat. 288, as amended, 290, as amended, 1309, as amended,

[[Page 237]]

290, as amended; secs. 19, 20, 48 Stat. 343, as amended; 31 U.S.C. 738a, 
739, 752, 752a, 753, 754, 754a, 754b.

    Source: 27 FR 12481, Dec. 18, 1962, unless otherwise noted.



Sec. 340.0  Authority for sale of Treasury bonds through competitive bidding.

    (a) The Secretary of the Treasury may, from time to time, by public 
notice, offer Treasury bonds for sale and invite bids therefor. The 
bonds so offered and the bids made will be subject to the terms and 
conditions and the rules and regulations herein set forth, except as 
they may be modified in the public notice or notices issued by the 
Secretary in connection with particular offerings.\1\ The bonds will be 
subject also to the general rules and regulations of the Treasury 
Department, now or hereafter prescribed, governing United States 
securities. They will be issued pursuant to the authority of the Second 
Liberty Bond Act, as amended.
---------------------------------------------------------------------------

    \1\ These regulations do not apply to Treasury bills, which are 
governed by Department Circular No. 418, Revised, and do not constitute 
a specific offering of bonds.
---------------------------------------------------------------------------

    (b) The terms public notice, notices, or announcement as used in 
this part mean the Public Notice of Invitation to Bid on Treasury bonds 
and any supplementary or amendatory notices or announcements with 
respect thereto, including, but not limited to any statement released to 
the press by the Secretary of the Treasury and notices sent to those who 
have filed notices of intent to bid or who have filed bids.



Sec. 340.1  Public notice--description of bonds--terms of offer.

    When bonds are offered for sale through competitive bidding, bids 
therefor will be invited through the form of a public notice or notices 
issued by the Secretary of the Treasury. The notice or notices will 
either fix the coupon rate of interest to be borne by the bonds or 
prescribe the conditions under which bidders may specify the rate and 
will set forth the terms and conditions of the bonds, including 
maturities, call features, if any, and the terms and conditions of the 
offer, including the amount of the issue for which bids are invited, the 
date and closing hour for receipt of bids, and the date on which the 
bonds will be delivered and payment for any accepted bid must be 
completed. When so specified in the public notice, it shall be a 
condition of each bid that, if accepted by the Secretary of the 
Treasury, the bidder will make a bona fide reoffering to the investing 
public.



Sec. 340.2  Denominations and exchanges.

    Bearer bonds with interest coupons attached, and bonds registered as 
to principal and interest, will be available in denominations of $500, 
$1,000, $5,000, $10,000, $100,000, and $1,000,000. Provisions will be 
made for the interchange of bonds of different denominations and of 
bearer and registered bonds, and for the transfer of registered bonds.



Sec. 340.3  Taxation.

    The income derived from the bonds will be subject to all taxes 
imposed under the Internal Revenue Code of 1954. The bonds will be 
subject to estate, inheritance, gift or other excise taxes, whether 
Federal or State, but will be exempt from all taxation now or hereafter 
imposed on the principal or interest thereof by any State, or any of the 
possessions of the United States, or by any local taxing authority.



Sec. 340.4  Acceptance as security for public deposits.

    The bonds will be acceptable to secure deposits of public moneys.



Sec. 340.5  Notice of intent to bid.

    Any individual, or organization, syndicate, or other group which 
intends to submit a bid, must, when required by the public notice, give 
written notice of such intent on Form PD 3555 at the place and within 
the time specified in the public notice. The filing of such notice will 
not constitute a commitment to bid.



Sec. 340.6  Submission of bids.

    (a) General. Bids will be received only at the place specified and 
not later than the time designated in the public notice. Each bid must 
be submitted on the official form referred to in the public notice and 
should be enclosed and sealed in the special envelope provided by the 
Treasury Department. Forms

[[Page 238]]

and envelopes may be obtained from any Federal Reserve Bank or Branch or 
the Bureau of the Public Debt, Treasury Department, Washington, DC 
20220. Bids shall be irrevocable.
    (b) Bidding. Bids, except noncompetitive bids when authorized, must 
be expressed as a percentage of the principal amount in not to exceed 
five decimals, e.g., 100.01038 percent. Provisions relating to the 
coupon rate of interest on the bonds, if not set forth in the public 
notice, will be made in a supplemental announcement. The public notice 
will indicate the timing of any such announcement. If the bidders are 
required to specify the coupon rate, each bidder shall specify a single 
coupon rate of interest, which shall be a multiple of \1/8\ of 1 percent 
but not in excess of 4\1/4\ percent. The Secretary of the Treasury may 
limit the premium above or the discount below par.
    (c) Group bids. A syndicate or other group submitting a bid must act 
through a representative who must be a member of the group. The 
representative must warrant to the Secretary of the Treasury that he has 
all necessary power and authority to act for each member and to bind the 
members jointly and severally. In addition to whatever other data may be 
required by the Secretary of the Treasury, in the case of a syndicate, 
the representative must file, within one hour after the time for opening 
of bids, at the place specified in the public notice for receipt of bids 
a final statement of the composition of the syndicate membership and the 
amount of each member's underwriting participation.



Sec. 340.7  Deposits--retention--return.

    Each bid must be accompanied by a deposit in the amount specified in 
the public notice. The deposit of any successful bidder will be retained 
as security for the performance of his obligation and will be applied 
toward payment of the bonds. All other deposits will be returned 
immediately. No interest will be allowed on account of any deposits.



Sec. 340.8  Acceptance of bids.

    (a) Opening of bids. Bids will be opened at the time and place 
specified in the public notice.
    (b) Method of determining accepted bids. The lowest basis cost of 
money\2\  computed from the date of the bonds to the date of maturity 
will be used in determining successful bids.
---------------------------------------------------------------------------

    \2\ In cases where bidders are required to specify the coupon rate, 
the lowest basis cost of money will be determined by reference to a 
specially prepared table of bond yields, a copy of which will be made 
available to all prospective bidders upon written request to the Federal 
Reserve Bank of New York, or the Bureau of the Public Debt, Treasury 
Department, Washington, DC 20220. Straightline interpolation will be 
applied if necessary.
---------------------------------------------------------------------------

    (c) Acceptance of successful bid. The Secretary of the Treasury, or 
his representative, will notify any successful bidder of acceptance in 
the manner and form specified in the public notice.



Sec. 340.9  Bids--revocations--rejections-- postponements--reoffers.

    The Secretary of the Treasury, in his discretion, may (a) revoke the 
public notice of invitation to bid at any time before opening bids, (b) 
return all bids unopened either at or prior to the time specified for 
their opening, (c) reject any or all bids, (d) postpone the time for 
presentation and opening of bids, and (e) waive any immaterial or 
obvious defect in any bid. Any action the Secretary of the Treasury may 
take in these respects shall be final. In the event of a postponement, 
known bidders will be advised thereof and their bids returned unopened.



Sec. 340.10  Payment for and delivery of bonds.

    Payment for the bonds, including accrued interest, if any, must be 
made in immediately available funds on the date and at the place 
specified in the invitation. Delivery of bonds under this section will 
be made at the risk and expense of the United States at such place or 
places in the United States as may be provided in the invitation. 
Interim receipts, if necessary, will be issued pending delivery of the 
definitive bonds.



Sec. 340.11  Failure to complete transaction.

    If any successful bidder shall fail to pay in full for the bonds on 
the date

[[Page 239]]

and at the place specified in the invitation, the money deposited by or 
in behalf of such bidder shall be forfeited to the Treasury Department.



Sec. 340.12  Reservations as to terms of circular.

    The Secretary of the Treasury reserves the right, at any time, or 
from time to time, to amend, repeal, supplement, revise or withdraw all 
or any of the provisions of this part.



PART 341--REGULATIONS GOVERNING UNITED STATES RETIREMENT PLAN BONDS--Table of Contents




Sec.
341.0  Offering of bonds.
341.1  Description of bonds.
341.2  Registration.
341.3  Purchase of bonds.
341.4  Proof of purchase.
341.5  Limitation on holdings.
341.6  Nontransferability.
341.7  Judicial proceedings.
341.8  Payment or redemption during lifetime of owner.
341.9  Payment or redemption after death of owner.
341.10  Reissue.
341.11  Use of power of attorney.
341.12  Lost, stolen, or destroyed bonds.
341.13  Taxation.
341.14  Certifying officers.
341.15  General provisions.

Appendix to Part 341--Tables of Redemption Values

    Authority: Sec. 8, 50 Stat. 481, as amended; R.S. 3706; secs. 1, 4, 
18, 40 Stat. 288, as amended, 290, as amended, 1309, as amended; secs. 
19, 20, 48 Stat. 343, as amended; 31 U.S.C. 738a, 739, 752, 752a, 753, 
754a, 754b.

    Source: 28 FR 405, Jan. 16, 1963, unless otherwise noted.



Sec. 341.0  Offering of bonds.

    The Secretary of the Treasury, under the authority of the Second 
Liberty Bond Act, as amended, and pursuant to the Self-Employed 
Individuals Tax Retirement Act of 1962, offers for sale, effective as of 
January 1, 1963, bonds of the United States, designated as United States 
Retirement Plan Bonds. The bonds will be available for investment only 
to:
    (a) Bond purchase plans and
    (b) Pension and profit-sharing plans, as described in sections 405 
and 401, respectively, of the Internal Revenue Code of 1954.

This offering of bonds will terminate on April 30, 1982.

[28 FR 405, Jan. 16, 1963, as amended at 47 FR 18596, Apr. 30, 1982]



Sec. 341.1  Description of bonds.

    (a) Investment yield (interest). United States Retirement Plan 
Bonds, hereinafter sometimes referred to as Retirement Plan Bonds, will 
be issued at par. The investment yields (interest) are as follows:
    (1) Bonds with issue dates of January 1, 1963, through May 1, 1966--
3.75 percent per annum, compounded semiannually (see Table of Redemption 
Values in the appendix).
    (2) Bonds with issue dates of June 1, 1966, through December 1, 
1969--4.15 percent per annum, compounded semiannually (see Table A in 
the appendix).
    (3) Bonds with issue dates of January 1, 1970, through January 1, 
1974--5 percent per annum, compounded semiannually (see Table B).
    (4) Bonds with issue dates of February 1, 1974, through July 1, 
1979--6 percent per annum, compounded semiannually (see Table C).
    (5) Bonds with issue dates of August 1, 1979, through October 1, 
1980--6.5 percent per annum, compounded semiannually (see Table D).
    (6) Bonds with issue dates of November 1, 1980, through September 1, 
1981--8 percent per annum, compounded semiannually (see Table E).
    (7) Bonds with issue dates of October 1, 1981, or thereafter--9 
percent per annum, compounded semiannually (see Table F).

Interest will be paid only upon redemption of the bonds. The accrual of 
interest will continue until the bonds are redeemed or have reached 
maturity, whichever is earlier, in accordance with these regulations.
    (b) Term. The maturity date of any bond issued under this circular 
shall be indeterminate, but unless sooner redeemed in accordance with 
the regulations in this part, its investment yield will cease on the 
interest accrual date coinciding with, or, where no such coincidence 
occurs, the interest accrual date next preceding, the first day of the 
sixtieth (60th) month following the

[[Page 240]]

date of death of the person in whose name it is registered.
    (c) Denominations--issue date. Retirement Plan Bonds will be 
available only in registered form and in denominations of $50, $100, 
$500, and $1,000. At the time of issue, the issuing agent will enter in 
the upper right-hand portion of the bond the issue date (which shall be 
the first day of the month and year in which payment of the purchase 
price is received by an authorized issuing agent), and will imprint the 
agent's validating stamp in the lower right-hand portion. The issue 
date, as distinguished from the date in the agent's validating stamp, 
will determine the date from which interest will begin to accrue on the 
bond. A Retirement Plan Bond shall be valid only if an authorized 
issuing agent receives payment therefor, duly inscribes, dates, stamps, 
and delivers it.

[28 FR 405, Jan. 16, 1963, as amended at 46 FR 60573, Dec. 11, 1981]



Sec. 341.2  Registration.

    (a) General. The registration of Retirement Plan Bonds is limited to 
the names of natural persons in their own right, whether adults or 
minors, in either single ownership or beneficiary form. A bond 
registered in beneficiary form will be inscribed substantially as 
follows (for example): ``John A. Doe payable on death to (or P.O.D.) 
Richard B. Roe,'' No more than one beneficiary may be designated on a 
bond.
    (b) Inscription. The inscription on the face of each bond will show 
the name, address, date of birth, and the social security account number 
of the registered owner, as well as information as to whether he is a 
self-employed individual or an employee, and the amount he contributed 
(if any) out of his own funds toward the purchase price of the bond. In 
the case of any self-employed individual (who is treated as an employee 
for the purpose of sections 405 and 401 of the Internal Revenue Code of 
1954), this amount would be that portion of the purchase price he 
contributed (if any) as an employee and which he will not take into 
account in determining the amount deductible for Federal income tax 
purposes. The name of the beneficiary, if one is to be designated, will 
also be shown in the inscription.



Sec. 341.3  Purchase of bonds.

    (a) Agencies. Retirement Plan Bonds may be purchased over-the-
counter or by mail from Federal Reserve Banks and Branches and the 
Bureau of the Public Debt, Washington, DC 20226. Customers of commercial 
banks and trust companies may be able to arrange for the purchase of the 
bonds through such institutions, but only the Federal Reserve Banks and 
Branches and the Bureau of the Public Debt are authorized to act as 
official agencies, and the date of receipt of the application and 
payment by an official agency will govern the dating of the bonds 
issued.
    (b) Application. Applications for the purchase of Retirement Plan 
Bonds should be made on Form PD 3550, accompanied by a remittance to 
cover the purchase price. Personal checks will be accepted, subject to 
collection. Checks or other forms of exchange, should be drawn to the 
Federal Reserve Bank or United States Treasury, as the case may be. 
Checks payable by endorsement are not acceptable.
    (c) Delivery. Delivery of bonds will be made in person, or by mail 
at the risk and expense of the United States, at the address given by 
the purchaser, but only within the United States, its territories and 
possessions, the Commonwealth of Puerto Rico, and the Canal Zone. No 
mail deliveries elsewhere will be made. If the registered owner 
temporarily resides abroad, the bonds will be delivered to such address 
in the United States as the purchaser directs.



Sec. 341.4  Proof of purchase.

    At the time a Retirement Plan Bond is issued, the issuing agent will 
furnish therewith to the purchaser, and in cases where the purchaser is 
different from the person in whose name the bond is inscribed, to the 
registered owner as well, proof of the purchase on Form PD 3550. The 
form will show the names and addresses of the purchaser and of the 
registered owner, the latter's date of birth, social security account 
number and his classification (i.e., self-employed individual or 
employee) the number of bonds issued, a

[[Page 241]]

description thereof by issue date, serial numbers, denominations, and 
registration, together with information as to the amount of his 
contributions (if any) toward the purchase price of the bonds.



Sec. 341.5  Limitation on holdings.

    The limit on the amount of any Retirement Plan Bonds issued during 
1974, or in any one calendar year thereafter, that may be purchased in 
the name of any one person as registered owner is $10,000 (face value).

[39 FR 36114, Oct. 8, 1974]



Sec. 341.6  Nontransferability.

    United States Retirement Plan Bonds are not transferable, and may 
not be sold, discounted or pledged as collateral for a loan or as 
security for the performance of an obligation, or for any other purpose.



Sec. 341.7  Judicial proceedings.

    No judicial determinations will be recognized which would give 
effect to an attempted voluntary transfer inter vivos of a Retirement 
Plan Bond. Otherwise, a claim against a registered owner will be 
recognized when established by valid judicial proceedings, but in no 
case will payment be made to the purchaser at a sale under a levy or to 
the officer authorized to levy upon the property of the owner under 
appropriate process to satisfy a money judgement unless or until the 
bond has become eligible for redemption pursuant to the regulations in 
this part. Neither the Treasury Department nor any of its agencies will 
accept notices of adverse claims or of pending judicial proceedings or 
undertake to protect the interests of litigants who do not have 
possession of the bond.



Sec. 341.8  Payment or redemption during lifetime of owner.

    (a) At age 59\1/2\ or thereafter. A Retirement Plan Bond will be 
redeemable at its current redemption value upon the request of the 
registered owner (or a person recognized as entitled to act on his 
behalf), provided he is 59\1/2\ years of age or older. The owner's age 
will be determined from the date of birth shown on the face of the bond, 
provided, however, that the Secretary of the Treasury reserves the right 
in any case or class of cases to require proof, in the form of a duly 
certified copy of his birth certificate, that the owner has attained the 
age of 59\1/2\ years. If such evidence is unavailable, one of the 
following documents may be furnished in lieu thereof:
    (1) Church records of birth or baptism.
    (2) Hospital birth record or certificate.
    (3) Physician's or midwife's birth record.
    (4) Certification of Bible or other family record.
    (5) Military, naturalization or immigration records.
    (6) Other evidence of probative value. Similar documentary evidence 
will also be required to support any claim made by an owner that the 
date of birth shown on his bond is incorrect.
    (b) Prior to age 59\1/2\ years. A Retirement Plan Bond will be paid 
at its then current redemption value upon a registered owner's request 
(or by a person recognized as entitled to act on his behalf) prior to 
his attainment of age 59\1/2\ years upon submission of a physician's 
statement or any similar evidence showing that the owner has become 
disabled to such an extent that he is unable to engage in any 
substantial, gainful activity by reason of any medically determinable 
physical or mental impairment which can be expected to result in death 
or to be of long-continued and indefinite duration. The following are 
examples of impairments which would ordinarily be considered as 
preventing substantial, gainful activity:
    (1) Loss of use of two limbs.
    (2) Certain progressive diseases which have resulted in the physical 
loss or atrophy of a limb, such as diabetes, multiple sclerosis, or 
Buerger's disease.
    (3) Diseases of the heart, lungs, or blood vessels which have 
resulted in major loss of heart or lung reserve as evidenced by X-ray, 
electrocardiogram, or other objective findings, so that despite medical 
treatment breathlessness, pain, or fatigue is produced on slight 
exertion, such as walking several blocks, using public transportation, 
or doing small chores.

[[Page 242]]

    (4) Cancer which is inoperable and progressive.
    (5) Damage to the brain or brain abnormality which has resulted in 
severe loss of judgment, intellect, orientation, or memory.
    (6) Mental diseases (e.g., psychosis or severe psychoneurosis) 
requiring continued institutionalization or constant supervision of the 
individual.
    (7) Loss or diminution of vision to the extent that the affected 
individual has a central visual acuity of no better than 20/200 in the 
better eye after best correction, or has a limitation in the fields of 
vision such that the widest diameter of the visual fields subtends an 
angle no greater than 20 degrees.
    (8) Permanent and total loss of speech.
    (9) Total deafness uncorrectible by a hearing aid.

In any case coming under the provisions of this paragraph, the evidence 
referred to above must be submitted to the Bureau of the Public Debt, 
Division of Transactions and Rulings, Parkersburg, WV 26101, for 
approval before any bonds may be paid. If, after review of the evidence, 
the Secretary of the Treasury is satisfied that the owner's disability 
has been established, a letter will be furnished authorizing payment of 
his Retirement Plan Bonds. This letter must be presented each time any 
of the owner's bonds are submitted for payment to a Federal Reserve Bank 
or Branch or to the Bureau of the Public Debt.
    (c) Requests for payment--(1) By owner. When redemption of any 
Retirement Plan Bond is desired by the registered owner under paragraph 
(a) of this section, it should be presented with the request for payment 
on the back of the bond signed and duly certified, to a Federal Reserve 
Bank or Branch or to the Bureau of the Public Debt, Securities 
Transactions Branch, Washington, DC 20226, or Bureau of the Public Debt, 
Division of Transactions and Rulings, Parkersburg, WV 26101. If payment 
is requested under paragraph (b) of this section, the letter described 
therein should accompany the bond.
    (2) By person other than owner. When redemption of any Retirement 
Plan Bond is desired by the legal guardian, committee conservator, or 
similar representative of the owner's estate under paragraph (a) of this 
section, it should be presented, with the request signed as described 
below, to a Federal Reserve Bank or Branch or to the Bureau of the 
Public Debt. If payment is requested under paragraph (b) of this 
section, the letter described therein should accompany the bond.\1\ The 
request for payment, in either case, should be signed by the 
representative in his fiduciary capacity before an authorized certifying 
officer, and must be supported by a certificate or a certified copy of 
the letters of the appointment from the court making the appointment, 
under seal, or other proof of qualification if the appointment was not 
made by a court. Except in the case of corporate fiduciaries, such 
evidence should state that the appointment is in full force and should 
be dated not more than one year prior to the presentation of the bond 
for payment.
---------------------------------------------------------------------------

    \1\ In any case in which a legal representative has not been 
appointed for the estate of a registered owner who has attained the age 
of 59\1/2\ years, or who has become disabled, a person seeking payment 
of a bond on the owner's behalf should furnish a complete statement of 
the circumstances to the Bureau of the Public Debt, Division of 
Transactions and Rulings, Parkersburg, WV 26101. Appropriate 
instructions will then be furnished.
---------------------------------------------------------------------------

    (d) Partial redemption. A Retirement Plan Bond in a denomination 
greater than $50 (face value) which is otherwise eligible for redemption 
may be redeemed in part, at current redemption value, upon the request 
of the registered owner (or a person recognized as entitled to act on 
his behalf), but only in amounts corresponding to authorized 
denominations. In any case in which partial redemption is desired, 
before the request for payment is signed, the phrase ``to the extent of 
$---- (face value) and reissue of the remainder'' should be appended to 
the request. Upon partial redemption of the bond, the remainder will be 
reissued as of the original issue date. No partial redemption of a bond 
will be made after the death of the owner in whose name it is 
registered.

[28 FR 405, Jan 16, 1963, as amended at 42 FR 21611, Apr. 28, 1977]

[[Page 243]]



Sec. 341.9  Payment or redemption after death of owner.

    (a) Order of precedence where owner not survived by beneficiary. If 
the registered owner of a Retirement Plan Bond dies before it has been 
presented and surrendered for payment, and there is no beneficiary shown 
thereon, or if the designated beneficiary predeceased the owner, the 
bond shall be paid in the following order of precedence:
    (1) To the duly appointed executor or administrator of the estate of 
the owner, who should sign the request for payment on the back of the 
bond in his representative capacity before an authorized certifying 
officer, such request to be supported by a court certificate or a 
certified copy of his letters of appointment, under seal of the court, 
which should show that the appointment is in full force and effect, and 
be dated within six months of its presentation;
    (2) If no legal representative of the deceased registered owner's 
estate has been or will be appointed, to the widow or widower of the 
owner;
    (3) If none of the above, to the child or children of the owner and 
the descendants of deceased children by representation;
    (4) If none of the above, to the parents of the owner, or the 
survivor of them;
    (5) In none of the above, to other next-of-kin of the owner, as 
determined by the laws of the domicile of such owner at the time of his 
death. In any case coming under the provisions of this paragraph, a duly 
certified copy of the registered owner's death certificate will 
ordinarily be required. Proof of death of the beneficiary, if any, will 
be required where he predeceased the owner. Payment of bonds under 
paragraph (a)(1) of this section will be made by a Federal Reserve Bank 
or Branch or by the Bureau of the Public Debt, Securities Transactions 
Branch, Washington, DC 20226, or Bureau of the Public Debt, Division of 
Transactions and Rulings, Parkersburg, WV 26101. Payment of bonds under 
paragraphs (a)(2) to (5) of this section will be made upon receipt of 
applications on Form PD 3565, together with the bonds and supporting 
evidence, by the Bureau of the Public Debt.
    (b) Order of precedence where beneficiary survived owner. If the 
registered owner of a Retirement Plan Bond dies before it has been 
presented and surrendered for payment, and the beneficiary shown thereon 
survived the owner, the bond shall be paid in the following order of 
precedence:
    (1) To the designated beneficiary upon his presentation and 
surrender of the bond with the request for payment signed and duly 
certified, such payment to be made to the exclusion of any other person 
who may have been named beneficiary by the registered owner in a bond 
purchase plan, or under a pension or profit-sharing plan;
    (2) If the designated beneficiary survived the registered owner but 
failed to present the bond for payment during his own lifetime, payment 
will be made in the order of precedence specified in paragraphs (a) (1) 
to (5) of this section to the legal representative, surviving spouse, 
children, parents, or next-of-kin of such beneficiary, and in the manner 
provided therein.

In any case coming under the provisions of this paragraph, a duly 
certified copy of the registered owner's death certificate will 
ordinarily be required. Proof of death of the beneficiary will also be 
required where he survived the owner but failed to present the bond for 
payment during his own lifetime. Payment of a bond to a designated 
beneficiary will be made by Federal Reserve Bank or Branch or by the 
Bureau of the Public Debt, Securities Transactions Branch, Washington, 
DC 20226, or Bureau of the Public Debt, Division of Transactions and 
Rulings, Parkersburg, WV 26101.
    (c) Ownership of redemption proceeds. The orders of precedence set 
forth in paragraphs (a) and (b) of this section, except in case where 
redemption is made for the account of a registered owner, are for the 
Department's convenience in discharging its obligation on a Retirement 
Plan Bond. The discharge of the obligation in accordance therewith shall 
be final so far as the Department is concerned, but those provisions do 
not otherwise purport to determine ownership of the redemption proceeds 
of a bond.

[28 FR 405, Jan 16, 1963, as amended at 42 FR 21611, Apr. 28, 1977]

[[Page 244]]



Sec. 341.10  Reissue.

    (a) Addition or change of beneficiary. A Retirement Plan Bond will 
be reissued to add a beneficiary in the case of a single ownership bond, 
or to eliminate or substitute a beneficiary in the case of a bond 
registered in beneficiary form upon the owner's request on Form PD 3564. 
No consent will be required to support any reissue transaction from a 
beneficiary whose name is to be removed from the registration of a 
Retirement Plan Bond. If the registered owner dies after the bond has 
been presented and surrendered for reissue, upon receipt of notice 
thereof by the agency to which the request for reissue was submitted, 
such request shall be treated as ineffective, provided the notice of 
death is received by the Federal Reserve Bank or Branch or the Bureau of 
the Public Debt, Securities Transactions Branch, Washington, DC, 20226, 
or Bureau of the Public Debt, Division of Transactions and Rulings, 
Parkersburg, WV 26101, to which the request was sent, in sufficient time 
to withhold delivery, by mail or otherwise, of the reissued bond.
    (b) Error in issue--change of name. Reissue of a Retirement Plan 
Bond will be made where an error in issue has occurred, as well as in 
cases where the owner's name has been changed by marriage, divorce, 
annulment, order of court, or in any other legal manner, upon 
appropriate request supported by satisfactory evidence. Information as 
to the procedure to be followed in securing such reissue may be obtained 
from a Federal Reserve Bank or the Bureau of the Public Debt, Securities 
Transactions Branch, Washington, DC 20226, or Bureau of the Public Debt, 
Division of Transactions and Rulings, Parkersburg, WV 26101.

[28 FR 405, Jan 16, 1963, as amended at 42 FR 21611, Apr. 28, 1977; 42 
FR 57123, Nov. 1, 1977]



Sec. 341.11  Use of power of attorney.

    No designation of an attorney, agent, or other representative to 
request payment or reissue on behalf of the owner, beneficiary, or other 
person entitled under Sec. 341.9, other than as provided in the 
regulations in this part, will be recognized.



Sec. 341.12  Lost, stolen, or destroyed bonds.

    If a Retirement Plan Bond is lost, stolen, or destroyed, a 
substitute may be issued upon identification of the bond and proof of 
its loss, theft, or destruction. A description of the bond by 
denomination, serial number, issue date and registration should be 
furnished at the time the report of loss, theft, or destruction is made. 
Such reports should be sent to the Bureau of the Public Debt, Division 
of Transactions and Rulings, Parkersburg, WV 26101. Full instructions 
for obtaining substitute bonds will then be given.

[28 FR 405, Jan 16, 1963, as amended at 42 FR 21611, Apr. 28, 1977]



Sec. 341.13  Taxation.

    The tax treatment provided under section 405 of the Internal Revenue 
Code of 1954 shall apply to all Retirement Plan Bonds. The bonds are 
subject to estate, inheritance, or other excise taxes whether Federal or 
State, but are exempt from all taxation now or hereafter imposed on the 
principal or interest thereof by any State, municipality, or any local 
taxing authority. Inquiries concerning the application of any Federal 
tax of these bonds should be directed to the District Director of 
Internal Revenue of the taxpayer's district or to the Internal Revenue 
Service, Washington, DC 20224.



Sec. 341.14  Certifying officers.

    Officers authorized to certify requests for payment or for any other 
transaction involving Retirement Plan Bonds include:
    (a) Post offices. Any postmaster, acting postmaster, or inspector-
in-charge, or other post office official or clerk designated for that 
purpose. A post office official or clerk, other than a postmaster, 
acting postmaster, or inspector-in-charge, should certify in the name of 
the postmaster or acting postmaster, followed by his own signature and 
official title. Signatures of these officers should be authenticated by 
a legible imprint of the post office dating stamp.
    (b) Banks and trust companies. Any officer of a Federal Reserve Bank 
or Branch, or of a bank or trust company

[[Page 245]]

chartered under the laws of the United States or those of any State, 
Commonwealth, or Territory of the United States, as well as any 
employees of such bank or trust company expressly authorized to act for 
that purpose, who should sign over the title ``Designated Employee.'' 
Certifications by any of these officers or designated employees should 
be authenticated by either a legible imprint of the corporate seal, or, 
where the institution is an authorized issuing agent for United States 
Savings Bonds, Series E, by a legible imprint of its dating stamp.
    (c) Issuing agents of Series E savings bonds. Any officer of a 
corporation or any other organization which is an authorized issuing 
agent for United States Savings Bonds, Series E. All certifications by 
such officers must be authenticated by a legible imprint of the issuing 
agent's dating stamp.
    (d) Foreign countries. In a foreign country requests may be signed 
in the presence of and be certified by any United States diplomatic or 
consular representative, or the manager or other officer of a foreign 
branch of a bank or trust company incorporated in the United States 
whose signature is attested by an imprint of the corporate seal or is 
certified to the Treasury Department. If such an officer is not 
available, requests may be signed in the presence of and be certified by 
a notary or other officer authorized to administer oaths, but his 
official character and jurisdiction should be certified by a United 
States diplomatic or consular officer under seal of his office.
    (e) Special provisions. The Commissioner of the Public Debt, the 
Chief of the Division of Securities Operations, or any Federal Reserve 
Bank or Branch is authorized to make special provision for certification 
in any particular case or class of cases where none of the officers 
authorized above is readily accessible.



Sec. 341.15  General provisions.

    (a) Regulations. All Retirement Plan Bonds shall be subject to the 
general regulations prescribed by the Secretary with respect to United 
States securities, which are set forth in Treasury Department Circular 
No. 300, current revision, to the extent applicable. Copies of the 
general regulations may be obtained upon request from any Federal 
Reserve Bank or Branch or the Bureau of the Public Debt.
    (b) Reservation as to issue of bonds. The Secretary of the Treasury 
reserves the right to reject any application for the purchase of 
Retirement Plan Bonds, in whole or in part, and to refuse to issue or 
permit to be issued any such bonds in any case or any class or classes 
of cases if he deems such action to be in the public interest, and his 
action in any such respect shall be final.
    (c) Additional requirements. In any case or any class of cases 
arising under this part the Secretary of the Treasury may require such 
additional evidence as may in his judgment be necessary, and may require 
a bond of indemnity, with or without surety, where he may consider such 
bond necessary for the protection of the United States.
    (d) Waiver of requirements. The Secretary of the Treasury reserves 
the right, in his discretion, to waive or modify any provision or 
provisions of this circular in any particular case or class of cases for 
the convenience of the United States, or in order to relieve any person 
or persons of unnecessary hardship, if such action is not inconsistent 
with law, does not impair any existing rights, and he is satisfied that 
such action would not subject the United States to any substantial 
expense or liability.
    (e) Fiscal agents. Federal Reserve Banks and Branches, as fiscal 
agents of the United States, are authorized to perform such services as 
may be requested of them by the Secretary of the Treasury in connection 
with the issue, delivery, redemption, reissue, and payment of Retirement 
Plan Bonds.
    (f) Reservation as to terms of circular. The Secretary of the 
Treasury may at any time, or from time to time, supplement or amend the 
terms of this part, or any amendments or supplements thereto.

[[Page 246]]

            Appendix to Part 341--Tables of Redemption Values

   Table of Redemption Values Providing an Investment Yield of 3\3/4\
  Percent per Annum for Bonds Bearing Issue Dates Beginning January 1,
                                  1963
 Table shows how the Retirement Plan Bonds bearing issue dates beginning
  January 1, 1963, by denomination, increase in redemption value during
successive half-year periods following issue. The redemption values have
 been determined to provide an investment yield of 3.75 percent \1\ per
annum, compounded semiannually, on the purchase price from issue date to
    the beginning of each half-year period. The period to maturity is
  indeterminate in accordance with the provisions of Sec.  341.1(b).\2\
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (Values increase on first day of
                                              period shown)
                                ----------------------------------------
                                  $50.00    $100.00   $500.00  $1,000.00
------------------------------------------------------------------------
First \1/2\....................    $50.00   $100.00   $500.00  $1,000.00
\1/2\ to 1.....................     50.94    101.88    509.38   1,018.75
1 to 1\1/2\....................     51.89    103.79    518.93   1,037.85
1\1/2\ to 2....................     52.87    105.73    528.66   1,057.31
2 to 2\1/2\....................     53.86    107.71    538.57   1,077.14
2\1/2\ to 3....................     54.87    109.73    548.67   1,097.33
3 to 3\1/2\....................     55.90    111.79    558.95   1,117.91
3\1/2\ to 4....................     56.94    113.89    569.43   1,138.87
4 to 4\1/2\....................     58.01    116.02    580.11   1,160.22
4\1/2\ to 5....................     59.10    118.20    590.99   1,181.98
5 to 5\1/2\....................     60.21    120.41    602.07   1,204.14
5\1/2\ to 6....................     61.34    122.67    613.36   1,226.72
6 to 6\1/2\....................     62.49    124.97    624.86   1,249.72
6\1/2\ to 7....................     63.66    127.31    636.57   1,273.15
7 to 7\1/2\....................     64.85    129.70    648.51   1,297.02
7\1/2\ to 8....................     66.07    132.13    660.67   1,321.34
8 to 8\1/2\....................     67.31    134.61    673.06   1,346.11
8\1/2\ to 9....................     68.57    137.14    685.68   1,371.35
9 to 9\1/2\....................     69.85    139.71    698.53   1,397.07
9\1/2\ to 10...................     71.16    142.33    711.63   1,423.26
10 to 10\1/2\..................     72.50    144.99    724.97   1,449.95
10\1/2\ to 11..................     73.86    147.71    738.57   1,477.13
11 to 11\1/2\..................     75.24    150.48    752.42   1,504.83
11\1/2\ to 12..................     76.65    153.30    766.52   1,533.05
12 to 12\1/2\..................     78.09    156.18    780.90   1,561.79
12\1/2\ to 13..................     79.55    159.11    795.54   1,591.07
13 to 13\1/2\..................     81.05    162.09    810.45   1,620.91
13\1/2\ to 14..................     82.56    165.13    825.65   1,651.30
14 to 14\1/2\..................     84.11    168.23    841.13   1,682.26
14\1/2\ to 15..................     85.69    171.38    856.90   1,713.80
15 to 15\1/2\..................     87.30    174.59    872.97   1,745.94
15\1/2\ to 16..................     88.93    177.87    889.34   1,778.67
16 to 16\1/2\..................     90.60    181.20    906.01   1,812.02
16\1/2\ to 17..................     92.30    184.60    923.00   1,846.00
17 to 17\1/2\..................     94.03    188.06    940.31   1,880.61
17\1/2\ to 18..................     95.79    191.59    957.94   1,915.87
18 to 18\1/2\..................     97.59    195.18    975.90   1,951.80
18\1/2\ to 19..................     99.42    198.84    994.20   1,988.39
19 to 19\1/2\..................    101.28    202.57  1,012.84   2,025.67
19\1/2\ to 20..................    103.18    206.37  1,031.83   2,063.66
20 to 20\1/2\..................    105.12    210.23  1,051.17   2,102.35
------------------------------------------------------------------------
\1\ Based on redemption values of $1,000 bond.
\2\ At a future date prior to January 1, 1983 (20 years after issue date
  of the first bonds) this table will be extended to show redemption
  values for periods of holding of 20\1/2\ years and beyond.


  Table A--Table of Redemption Values Providing an Investment Yield of
 4.15 Percent Per Annum for Bonds Bearing Issue Dates Beginning June 1,
                                  1966
 Table shows the increase in redemption value for each successive half-
   year term of holding following the date of issue on Retirement Plan
 Bonds bearing issue dates beginning June 1, 1966. The redemption values
  have been determined to provide an investment yield of approximately
  4.15 percent \1\ per annum, compounded semiannually, on the purchase
  price from issue date to the beginning of each half-year period. The
period to maturity is indeterminate in accordance with the provisions of
                   Sec.  341.1(b) of this circular.\2\
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (values increase on first day of
                                              period shown)
                                ----------------------------------------
                                    $50      $100      $500      $1,000
------------------------------------------------------------------------
First \1/2\....................     $0.00   $100.00   $500.00  $1,000.00
\1/2\ to 1.....................     51.04    102.08    510.38   1,020.75
1 to 1\1/2\....................     52.10    104.19    520.97   1,041.93
1\1/2\ to 2....................     53.18    106.36    531.78   1,063.55
2 to 2\1/2\....................     54.28    108.56    542.81   1,085.62
2\1/2\ to 3....................     55.41    110.81    554.07   1,108.15
3 to 3\1/2\....................     56.56    113.11    565.57   1,131.14
3\1/2\ to 4....................     57.73    115.46    577.31   1,154.61
4 to 4\1/2\....................     58.93    117.86    589.28   1,178.57
4\1/2\ to 5....................     60.15    120.30    601.51   1,203.02
5 to 5\1/2\....................     61.40    122.80    613.99   1,227.99
5\1/2\ to 6....................     62.67    125.35    626.73   1,253.47
6 to 6\1/2\....................     63.97    127.95    639.74   1,279.48
6\1/2\ to 7....................     65.30    130.60    653.01   1,306.03
7 to 7\1/2\....................     66.66    133.31    666.56   1,333.13
7\1/2\ to 8....................     68.04    136.08    680.39   1,360.73
8 to 8\1/2\....................     69.45    138.90    694.51   1,389.09
8\1/2\ to 9....................     70.89    141.78    708.92   1,417.85
9 to 9\1/2\....................     72.36    144.73    723.63   1,447.27
9\1/2\ to 10...................     73.86    147.73    738.65   1,477.30
10 to 10\1/2\..................     75.40    150.80    753.98   1,507.95
10\1/2\ to 11..................     76.96    153.92    769.62   1,539.24
11 to 11\1/2\..................     78.56    157.12    785.59   1,571.18
11\1/2\ to 12..................     80.19    160.38    801.89   1,603.78
12 to 12\1/2\..................     81.85    163.71    818.53   1,637.06
12\1/2\ to 13..................     83.55    167.10    835.52   1,671.03
13 to 13\1/2\..................     85.29    170.57    852.85   1,705.71
13\1/2\ to 14..................     87.05    174.11    870.55   1,741.10
14 to 14\1/2\..................     88.86    177.72    888.61   1,777.23
14\1/2\ to 15..................     90.71    181.41    907.05   1,814.10
15 to 15\1/2\..................     92.59    185.17    925.87   1,851.75
15\1/2\ to 16..................     94.51    189.02    945.09   1,890.17
16 to 16\1/2\..................     96.47    192.94    964.70   1,929.39
16\1/2\ to 17..................     98.47    196.94    984.71   1,969.43
17 to 17\1/2\..................    100.51    201.03  1,005.15   2,010.29
17\1/2\ to 18..................    102.60    205.20  1,026.00   2,052.01
18 to 18\1/2\..................    104.73    209.46  1,047.29   2,094.58
18\1/2\ to 19..................    106.90    213.80  1,069.02   2,138.05
19 to 19\1/2\..................    109.12    218.24  1,091.21   2,182.41
19\1/2\ to 20..................    111.38    222.77  1,113.85   2,227.70
20 to 20\1/2\ \2\..............    113.70    227.39  1,136.96   2,273.92
------------------------------------------------------------------------
\1\ Based on redemption values of $1,000 bond.
\2\ At a future date prior to June 1, 1986 (20 years after issue date of
  the first bonds), this table will be extended to show redemption
  values for periods of holding of 20\1/2\ years and beyond.


[[Page 247]]


  Table B--Table of Redemption Values Providing an Investment Yield of
 5.00 Percent Per Annum for Bonds Bearing Issue Dates Beginning January
                                 1, 1970
 Table shows the increase in redemption value for each successive half-
   year term of holding following the date of issue on Retirement Plan
   Bonds bearing issue dates beginning January 1, 1970. The redemption
      values have been determined to provide an investment yield of
  approximately 5.00 percent \1\ per annum, compounded semiannually, on
  the purchase price from issue date to the beginning of each half-year
 period. The period to maturity is indeterminate in accordance with the
            provisions of Sec.  341.1(b) of this circular.\2\
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (values increase on first day of
                                              period shown)
                                ----------------------------------------
                                    $50      $100      $500      $1,000
------------------------------------------------------------------------
First \1/2\....................    $50.00   $100.00   $500.00  $1,000.00
\1/2\ to 1.....................     51.25    102.50    512.50   1,025.00
1 to 1\1/2\....................     52.53    105.06    525.31   1,050.62
1\1/2\ to 2....................     53.84    107.69    538.45   1,076.89
2 to 2\1/2\....................     55.19    110.38    551.91   1,103.81
2\1/2\ to 3....................     56.57    113.14    565.70   1,131.41
3 to 3\1/2\....................     57.98    115.97    579.85   1,159.69
3\1/2\ to 4....................     59.43    118.87    594.34   1,188.69
4 to 4\1/2\....................     60.92    121.84    609.20   1,218.40
4\1/2\ to 5....................     62.44    124.89    624.43   1,248.86
5 to 5\1/2\....................     64.00    128.01    640.04   1,280.08
5\1/2\ to 6....................     65.60    131.21    656.04   1,312.09
6 to 6\1/2\....................     67.24    134.49    672.44   1,344.89
6\1/2\ to 7....................     68.93    137.85    689.26   1,378.51
7 to 7\1/2\....................     70.65    141.30    706.49   1,412.97
7\1/2\ to 8....................     72.42    144.83    724.15   1,448.30
8 to 8\1/2\....................     74.22    148.45    742.25   1,484.51
8\1/2\ to 9....................     76.08    152.16    760.81   1,521.62
9 to 9\1/2\....................     77.98    155.97    779.83   1,559.66
9\1/2\ to 10...................     79.93    159.86    799.33   1,598.65
10 to 10\1/2\..................     81.93    163.86    819.31   1,638.62
10\1/2\ to 11..................     83.98    167.96    839.79   1,679.58
11 to 11\1/2\..................     86.08    172.16    860.79   1,721.57
11\1/2\ to 12..................     88.23    176.46    882.31   1,764.61
12 to 12\1/2\..................     90.44    180.87    904.36   1,808.73
12\1/2\ to 13..................     92.70    185.39    926.97   1,853.94
13 to 13\1/2\..................     95.02    190.03    950.15   1,900.29
13\1/2\ to 14..................     97.39    194.78    973.90   1,947.80
14 to 14\1/2\..................     99.82    199.65    998.25   1,996.50
14\1/2\ to 15..................    102.32    204.64  1,023.20   2,046.41
15 to 15\1/2\..................    104.88    209.76  1,048.78   2,097.57
15\1/2\ to 16..................    107.50    215.00  1,075.00   2,150.01
16 to 16\1/2\..................    110.19    220.38  1,101.88   2,203.76
16\1/2\ to 17..................    112.94    225.88  1,129.43   2,258.85
17 to 17\1/2\..................    115.77    231.53  1,157.66   2,315.32
17\1/2\ to 18..................    118.66    237.32  1,186.60   2,373.21
18 to 18\1/2\..................    121.63    243.25  1,216.27   2,432.54
18\1/2\ to 19..................    124.67    249.34  1,246.67   2,493.35
19 to 19\1/2\..................    127.78    255.57  1,277.84   2,555.68
19\1/2\ to 20..................    130.98    261.96  1,309.79   2,619.57
20 to 20\1/2\..................    134.25    268.51  1,342.53   2,685.06
------------------------------------------------------------------------
\1\ Based on redemption values of $1,000 bond.
\2\ At a future date prior to January 1, 1990 (20 years after issue date
  of the first bonds) this table will be extended to show redemption
  values for periods of holding of 20\1/2\ years and beyond.


 Table C--Table of Redemption Values Providing an Investment Yield of 6
  Percent Per Annum for Bonds Bearing Issue Dates Beginning February 1,
                                  1974
 Table shows the increase in redemption value for each successive half-
   year term of holding following the date of issue on Retirement Plan
  Bonds bearing issue dates beginning February 1, 1974. The redemption
      values have been determined to provide an investment yield of
 approximately 6 percent \1\ per annum, compounded semiannually, on the
    purchase price from issue date to the beginning of each half-year
 period. The period to maturity is indeterminate in accordance with the
             provisions of Sec.  341.1(b) of this circular.
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (values increase on first day of
                                              period shown)
                                ----------------------------------------
                                  $50.00    $100.00   $500.00  $1,000.00
------------------------------------------------------------------------
First \1/2\....................    $50.00   $100.00   $500.00  $1,000.00
\1/2\ to 1.....................     51.50    103.00    51.500   1,030.00
1 to 1\1/2\....................     53.05    106.10    530.50   1,061.00
1\1/2\ to 2....................     54.64    109.28    546.40   1,092.80
2 to 2\1/2\....................     56.28    112.56    562.80   1,125.60
2\1/2\ to 3....................     57.96    115.92    579.60   1,159.20
3 to 3\1/2\....................     59.70    119.40    597.00   1,194.00
3\1/2\ to 4....................     61.49    122.98    614.90   1,229.80
4 to 4\1/2\....................     63.34    126.68    633.40   1,266.80
4\1/2\ to 5....................     65.24    130.48    652.40   1,304.80
5 to 5\1/2\....................     67.20    134.40    672.00   1,344.00
5\1/2\ to 6....................     69.21    138.42    692.10   1,384.20
6 to 6\1/2\....................     71.29    142.58    712.90   1,425.80
6\1/2\ to 7....................     73.43    146.86    734.30   1,468.60
7 to 7\1/2\....................     75.63    151.26    756.30   1,512.60
712 to 8.......................     77.90    155.80    779.00   1,558.00
8 to 8\1/2\....................     80.24    160.48    802.40   1,604.80
8\1/2\ to 9....................     82.64    165.28    826.40   1,652.80
9 to 9\1/2\....................     85.12    170.24    851.20   1,702.40
9\1/2\ to 10...................     87.68    175.36    876.80   1,753.60
10 to 10\1/2\..................     90.31    180.62    903.10   1,806.20
10\1/2\ to 11..................     93.01    186.02    930.10   1,860.20
11 to 11\1/2\..................     95.81    191.62    958.10   1,916.20
11\1/2\ to 12..................     98.68    197.36    986.80   1,973.60
12 to 12\1/2\..................    101.64    203.28  1,016.40   2,032.80
12\1/2\ to 13..................    104.69    209.38  1,046.90   2,093.80
13 to 13\1/2\..................    107.83    215.66  1,078.30   2,156.60
13\1/2\ to 14..................    111.06    222.12  1,110.60   2,221.20
14 to 14\1/2\..................    114.40    228.80  1,144.00   2,288.00
14\1/2\ to 15..................    117.83    235.66  1,178.30   2,356.60
15 to 15\1/2\..................    121.36    242.72  1,213.60   2,427.20
15\1/2\ to 16..................    125.00    250.00  1,250.00   2,500.00
16 to 16\1/2\..................    128.75    257.50  1,287.50   2,575.00
16\1/2\ to 17..................    132.62    265.24  1,326.20   2,652.40
17 to 17\1/2\..................    136.60    273.20  1,366.00   2,732.00
17\1/2\ to 18..................    140.69    281.38  1,406.90   2,813.80
18 to 18\1/2\..................    144.91    289.82  1,449.10   2,898.20
18\1/2\ to 19..................    149.26    298.52  1,492.60   2,985.20
19 to 19\1/2\..................    153.74    307.48  1,537.40   3,074.80
19\1/2\ to 20..................    158.35    316.70  1,583.50   3,167.00
20 to 20\1/2\..................    163.10    326.20  1,631.00   3,262.00
------------------------------------------------------------------------
\1\ Based on redemption values of $1,000 bond.


[[Page 248]]


  Table D--Table of Redemption Values Providing an Investment Yield of
 6.50 Percent Per Annum for Bonds Bearing Issue Dates Beginning Aug. 1,
                                  1979
 Table shows the increase in redemption value for each successive half-
   year term of holding following the date of issue on Retirement Plan
   Bonds bearing issue dates beginning August 1, 1979. The redemption
      values have been determined to provide an investment yield of
 approximately 6.50 percent \1\ per annum, compounded semi-annually, on
  the purchase price from issue date to the beginning of each half-year
 period. The period to maturity is indeterminate in accordance with the
            provisions of Sec.  341.1(b) of this circular.\2\
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (values increase on first day of
                                              period shown)
                                ----------------------------------------
                                    $50      $100      $500      $1,000
------------------------------------------------------------------------
First \1/2\....................    $50.00   $100.00   $500.00  $1,000.00
\1/2\ to 1.....................     51.62    103.24    516.20   1,032.40
1 to 1\1/2\....................     53.30    106.60    533.00   1,066.00
1\1/2\ to 2....................     55.04    110.08    550.40   1,100.80
2 to 2\1/2\....................     56.82    113.64    568.20   1,136.40
2\1/2\ to 3....................     58.68    117.36    586.80   1,173.60
3 to 3\1/2\....................     60.58    121.16    605.80   1,211.60
3\1/2\ to 4....................     62.54    125.08    625.40   1,250.80
4 to 4\1/2\....................     64.58    129.16    645.80   1,291.60
4\1/2\ to 5....................     66.68    133.36    666.80   1,333.60
5 to 5\1/2\....................     68.84    137.68    688.40   1,376.80
5\1/2\ to 6....................     71.08    142.16    710.80   1,421.60
6 to 6\1/2\....................     73.40    146.80    734.00   1,468.00
6\1/2\ to 7....................     75.78    151.56    757.80   1,515.60
7 to 7\1/2\....................     78.24    156.48    782.40   1,564.80
7\1/2\ to 8....................     80.78    161.56    807.80   1,615.60
8 to 8\1/2\....................     83.40    166.80    834.00   1,668.00
8\1/2\ to 9....................     86.12    172.24    861.20   1,722.40
9 to 9\1/2\....................     88.92    177.84    889.20   1,778.40
9\1/2\ to 10...................     91.80    183.60    918.00   1,836.00
10 to 10\1/2\..................     94.80    189.60    948.00   1,896.00
10\1/2\ to 11..................     97.88    195.76    978.80   1,957.60
11 to 11\1/2\..................    101.06    202.12  1,010.60   2,021.20
11\1/2\ to 12..................    104.34    208.68  1,043.40   2,086.80
12 to 12\1/2\..................    107.72    215.44  1,077.20   2,154.40
12\1/2\ to 13..................    111.22    222.44  1,112.20   2,224.40
13 to 13\1/2\..................    114.84    229.68  1,148.40   2,296.80
13\1/2\ to 14..................    118.58    237.16  1,185.80   2,371.60
14 to 14\1/2\..................    122.44    244.88  1,224.40   2,448.80
14\1/2\ to 15..................    126.42    252.84  1,264.20   2,528.40
15 to 15\1/2\..................    130.52    261.04  1,305.20   2,610.40
15\1/2\ to 16..................    134.76    269.52  1,347.60   2,695.20
16 to 16\1/2\..................    139.14    278.28  1,391.40   2,782.80
16\1/2\ to 17..................    143.66    287.32  1,436.60   2,873.20
17 to 17\1/2\..................    148.34    296.68  1,483.40   2,966.80
17\1/2\ to 18..................    153.16    306.32  1,531.60   3,063.20
18 to 18\1/2\..................    158.12    316.24  1,581.20   3,162.40
18\1/2\ to 19..................    163.26    326.52  1,632.60   3,265.20
19 to 19\1/2\..................    168.58    337.16  1,685.80   3,371.60
19\1/2\ to 20..................    174.06    348.12  1,740.60   3,481.20
20 to 20\1/2\..................    179.72    359.44  1,797.20   3,594.40
------------------------------------------------------------------------
\1\ Based on redemption values of $1,000 bond.
\2\ At a future date prior to Aug. 1, 1999 (20 years after issue date of
  the first bonds) this table will be extended to show redemption values
  for periods of holding of 20\1/2\ years and beyond.


  Table E--Table of Redemption Values Providing an Investment Yield of
 8.00 Percent Per Annum for Bonds Bearing Issue Dates Beginning November
                                 1, 1980
  Note: This table shows how Retirement Plan Bonds bearing issue dates
   beginning November 1, 1980, by denomination, increase in redemption
     value during successive half-year periods following issue. The
redemption values have been determined to provide an investment yield of
 8.00 percent per annum, compounded semiannually, on the purchase price
from issue date to the beginning of each half-year period. The period to
   maturity is indeterminate in accordance with the provisions of Sec.
                                341.1(b).
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (values increase on first day of
                                              period shown)
                                ----------------------------------------
                                  $50.00    $100.00   $500.00  $1,000.00
------------------------------------------------------------------------
First half year................    $50.00   $100.00   $500.00  $1,000.00
.5 to 1.0......................     52.00    104.00    520.00   1,040.00
1.0 to 1.5.....................     54.08    108.16    540.80   1,081.60
1.5 to 2.0.....................     56.24    112.48    562.40   1,124.80
2.0 to 2.5.....................     58.50    117.00    585.00   1,170.00
2.5 to 3.0.....................     60.84    121.68    608.40   1,216.80
3.0 to 3.5.....................     63.26    126.52    632.60   1,265.20
3.5 to 4.0.....................     65.80    131.60    658.00   1,316.00
4.0 to 4.5.....................     68.42    136.84    684.20   1,368.40
4.5 to 5.0.....................     71.16    141.32    711.60   1,423.20
5.0 to 5.5.....................     74.02    148.04    740.20   1,480.40
5.5 to 6.0.....................     76.98    153.96    769.80   1,539.60
6.0 to 6.5.....................     80.06    160.12    800.60   1,601.20
6.5 to 7.0.....................     83.26    166.52    832.60   1,665.20
7.0 to 7.5.....................     86.58    173.16    865.80   1,731.60
7.5 to 8.0.....................     90.04    180.08    900.40   1,800.80
8.0 to 8.5.....................     93.64    187.28    936.40   1,872.80
8.5 to 9.0.....................     97.40    194.80    974.00   1,948.00
9.0 to 9.5.....................    101.30    202.60  1,013.00   2,026.00
9.5 to 10.0....................    105.34    210.68  1,053.40   2,106.80
10.0 to 10.5...................    109.56    219.12  1,095.60   2,191.20
10.5 to 11.0...................    113.94    227.88  1,139.40   2,278.80
11.0 to 11.5...................    118.50    237.00  1,185.00   2,370.00
11.5 to 12.0...................    123.24    246.48  1,232.40   2,464.80
12.0 to 12.5...................    128.16    256.32  1,281.60   2,563.20
12.5 to 13.0...................    133.30    266.60  1,333.00   2,666.00
13.0 to 13.5...................    138.62    277.24  1,386.20   2,772.40
13.5 to 14.0...................    144.16    288.32  1,441.60   2,883.20
14.0 to 14.5...................    149.94    299.88  1,499.40   2,998.80
14.5 to 15.0...................    155.94    311.88  1,559.40   3,118.80
15.0 to 15.5...................    162.16    324.32  1,621.60   3,243.20
15.5 to 16.0...................    168.66    337.32  1,686.60   3,373.20
16.0 to 16.5...................    175.40    350.80  1,754.00   3,508.00
16.5 to 17.0...................    182.42    364.84  1,824.20   3,648.40
17.0 to 17.5...................    189.72    379.44  1,897.20   3,794.40
17.5 to 18.0...................    197.30    394.60  1,973.00   3,946.00
18.0 to 18.5...................    205.20    410.40  2,052.00   4,104.00
18.5 to 19.0...................    213.40    426.80  2,134.00   4,268.00
19.0 to 19.5...................    221.94    443.88  2,219.40   4,438.80
19.5 to 20.0...................    230.82    461.64  2,308.20   4,616.40
20.0 to 20.5...................    240.06    480.12  2,400.60   4,801.20
------------------------------------------------------------------------


[[Page 249]]


  Table F--Table of Redemption Values Providing an Investment Yield of
 9.00 Percent Per Annum for Bonds Bearing Issue Dates Beginning October
                                 1, 1981
  Note: This table shows how Retirement Plan Bonds bearing issue dates
beginning October 1, 1981, by denomination, increase in redemption value
   during successive half-year periods following issue. The redemption
   values have been determined to provide an investment yield of 9.00
 percent per annum, compounded semiannually, on the purchase price from
   issue date to the beginning of each half-year period. The period to
   maturity is indeterminate in accordance with the provisions of Sec.
                                341.1(b).
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (values increase on first day of
                                              period shown)
                                ----------------------------------------
                                  $50.00    $100.00   $500.00  $1,000.00
------------------------------------------------------------------------
First half year................    $50.00   $100.00   $500.00  $1,000.00
.5 to 1.0......................     52.24    104.48    522.40   1,044.80
1.0 to 1.5.....................     54.60    109.20    546.00   1,092.00
1.5 to 2.0.....................     57.06    114.12    570.60   1,141.20
2.0 to 2.5.....................     59.62    119.24    596.20   1,192.40
2.5 to 3.0.....................     62.30    124.60    623.00   1,246.00
3.0 to 3.5.....................     65.12    130.24    651.20   1,302.40
3.5 to 4.0.....................     68.04    136.08    680.40   1,360.80
4.0 to 4.5.....................     71.10    142.20    711.00   1,422.00
4.5 to 5.0.....................     74.30    148.60    743.00   1,486.00
5.0 to 5.5.....................     77.64    155.28    776.40   1,552.80
5.5 to 6.0.....................     81.14    162.28    811.40   1,622.80
6.0 to 6.5.....................     84.80    169.60    848.00   1,696.00
6.5 to 7.0.....................     88.60    177.20    886.00   1,772.00
7.0 to 7.5.....................     92.60    185.20    926.00   1,852.00
7.5 to 8.0.....................     96.76    193.52    967.60   1,935.20
8.0 to 8.5.....................    101.12    202.24  1,011.20   2,022.40
8.5 to 9.0.....................    105.66    211.32  1,056.60   2,113.20
9.0 to 9.5.....................    110.42    220.84  1,104.20   2,208.40
9.5 to 10.0....................    115.40    230.80  1,154.00   2,308.00
10.0 to 10.5...................    120.58    241.16  1,205.80   2,411.60
10.5 to 11.0...................    126.02    252.04  1,260.20   2,520.40
11.0 to 11.5...................    131.68    263.36  1,316.80   2,633.60
11.5 to 12.0...................    137.60    275.20  1,376.00   2,752.00
12.0 to 12.5...................    143.80    287.60  1,438.00   2,876.00
12.5 to 13.0...................    150.28    300.56  1,502.80   3,005.60
13.0 to 13.5...................    157.04    314.08  1,570.40   3,140.80
13.5 to 14.0...................    164.10    328.20  1,641.00   3,282.00
14.0 to 14.5...................    171.48    342.96  1,714.80   3,429.60
14.5 to 15.0...................    179.20    358.40  1,792.00   3,584.00
15.0 to 15.5...................    187.26    374.52  1,872.60   3,745.20
15.5 to 16.0...................    195.70    391.40  1,957.00   3,914.00
16.0 to 16.5...................    204.50    409.00  2,045.00   4,090.00
16.5 to 17.0...................    213.70    427.40  2,137.00   4,274.00
17.0 to 17.5...................    223.32    446.64  2,233.20   4,466.40
17.5 to 18.0...................    233.36    466.72  2,333.60   4,667.20
18.0 to 18.5...................    243.86    487.72  2,438.60   4,877.20
18.5 to 19.0...................    254.84    509.68  2,548.40   5,096.80
19.0 to 19.5...................    266.32    532.64  2,663.20   5,326.40
19.5 to 20.0...................    278.30    556.60  2,783.00   5,566.00
20.0 to 20.5...................    290.82    581.64  2,908.20   5,816.40
------------------------------------------------------------------------


[28 FR 405, Jan. 16, 1963, as amended at 31 FR 7625, May 27, 1966; 35 FR 
224, Jan. 7, 1970; 39 FR 4661, Feb. 6, 1974; 45 FR 53393, Aug. 11, 1980; 
46 FR 60573, Dec. 11, 1981]



PART 342--OFFERING OF UNITED STATES SAVINGS NOTES--Table of Contents




Sec.
342.0  Offering of notes.
342.1  Definition of words and terms used in this part.
342.2  Description of notes.
342.3  Extended terms and yields for outstanding notes.
342.4  Purchase--registration.
342.5  Limitations.
342.6  Taxation.
342.7  Payment or redemption.
342.8  Governing regulations.
342.9  Fiscal agents.
342.10  Reservations.

    Authority: 31 U.S.C. 3103, 5 U.S.C. 301.

    Source: 57 FR 14282, Apr. 17, 1992, unless otherwise noted.



Sec. 342.0  Offering of notes.

    The Secretary of the Treasury offered for sale to the people of the 
United States, United States Savings Notes (also known as ``Freedom 
Shares'', and generally referred to herein as ``savings notes'' or 
``notes''). The notes could be purchased only in combination with Series 
E savings bonds of the same or greater denomination. This offering was 
effective from May 1, 1967 until the close of business October 31, 1970 
when the sale of savings notes was terminated by the Secretary of the 
Treasury.



Sec. 342.1  Definition of words and terms used in this part.

    (a) Payroll savings plan refers to a voluntary program maintained by 
an employer whereby its participating officers and employees authorize 
regular withholdings from their salaries or wages for the purchase of 
savings bonds.
    (b) Quarter refers to a 3-month period of a year, as follows: 
January-February-March, April-May-June, July-August-September, or 
October-November-December.



Sec. 342.2  Description of notes.

    (a) General. Savings notes were issued only in registered form and 
are nontransferable.
    (b) Term. A savings note was dated as of the first day of the month 
in which payment of the purchase price was received by an issuing agent. 
A note had an original maturity period of 4 years and 6 months and has 
been granted two 10-year extensions of maturity and an additional 
extension of 5 years and 6 months with interest; it will reach

[[Page 250]]

final maturity 30 years from its issue date. A note cannot be called by 
the Secretary of the Treasury prior to maturity and was not redeemable 
during the first year from issue date. Thereafter, a note may be 
redeemed at the option and request of the owner.
    (c) Denominations and purchase prices. Savings notes were issued on 
a discount basis. The denominations and purchase prices were as follows:

------------------------------------------------------------------------
                                                              Purchase
                       Denomination                             price
------------------------------------------------------------------------
$25.......................................................        $20.25
50........................................................         40.50
75........................................................         60.75
100.......................................................         81.00
------------------------------------------------------------------------


Interest is paid as a part of the redemption value. A note increased in 
value one year after issue date and increases at the beginning of each 
half-year period thereafter until final maturity, at which time interest 
ceases to accrue. Interest on a note which is redeemed before maturity 
ceases to accrue at the end of the interest period next preceding the 
redemption date, except that if the note is redeemed on a date on which 
the redemption value increases, interest ceases to accrue on that date.
    (d) Inscription and issue. At the time of issue, the authorized 
issuing agent:
    (1) Inscribed on the face of each note the name and address of the 
owner and the name of the beneficiary, if any, or the names of the 
coowner;
    (2) Entered the issue date in the right-hand portion of the note in 
the space provided for that purpose; and
    (3) Imprinted thereunder, by use of the agent's validation indicia 
for the issue of Series E savings bonds, the date the note was actually 
inscribed. A note is valid only if an authorized issuing agent received 
payment therefor and duly inscribed, dated, imprinted validation indicia 
on the note and delivered it.



Sec. 342.3  Extended terms and yields for outstanding notes.

    (a) Extended maturity periods. The terms extended maturity period 
and second extended maturity period refer to the 10-year intervals after 
the original maturity dates during which owners may retain their savings 
notes and continue to earn interest thereon. The term third extended 
maturity period refers to the final interval of 5 years and 6 months 
during which owners may retain notes and continue to earn interest until 
final maturity, which occurs 30 years after issue date. No special 
action is required of owners to take advantage of any extension 
heretofore or herein granted. The following table describes the previous 
and final maturities of savings notes:

------------------------------------------------------------------------
                                       Previous
                                      maturities      Previous maturity
      Issue dates--1st day of      ----------------   dates--1st day of
                                     yrs.    mos.
------------------------------------------------------------------------
May 1967-Oct. 1970................      24       6  Nov. 1991-Apr. 1995.
------------------------------------------------------------------------


------------------------------------------------------------------------
                                                Additional
                                                 extended
                                                 maturity       Life of
           Issue dates--1st day of                period        notes--
                                             ----------------    yrs.
                                               yrs.    mos.
------------------------------------------------------------------------
May 1967-Oct. 1970..........................       5       6          30
------------------------------------------------------------------------


------------------------------------------------------------------------
                                              Final maturity dates--1st
          Issue dates--1st day of                      day of
------------------------------------------------------------------------
May 1967-Oct. 1970........................  May 1997-Oct. 2000
------------------------------------------------------------------------

    (b) Guaranteed minimum investment yield--(1) General. Except as 
provided in paragraph (b)(2) of this section, the guaranteed minimum 
investment yields for outstanding savings notes are as follows:
    (i) For savings notes in extended maturity periods prior to November 
1, 1982, the guaranteed minimum investment yield was 8.5 percent per 
annum, compounded semiannually, effective for the period from the first 
semiannual interest accrual date on or after May 1, 1981, through their 
next extended maturity dates on or after November 1, 1982.
    (ii) For savings notes that entered extended maturity periods during 
the period of November 1, 1982, through October 1, 1986, the guaranteed 
minimum investment yield was 7.5 percent per annum, compounded 
semiannually, for such periods, including notes that entered into an 
extended maturity period, as shown below:

------------------------------------------------------------------------
    Issue dates--1st day of--          Extension     Entered--1st day of
------------------------------------------------------------------------
May 1968-Oct. 1970...............  2nd.............  Nov. 1982-Apr.
                                                      1985.
------------------------------------------------------------------------


[[Page 251]]

    (iii) For savings notes that entered into extended maturity periods 
during the period of November 1, 1986, through February 1, 1993, the 
guaranteed minimum investment yield is 6 percent per annum, compounded 
semiannually, for such periods, including notes that entered into an 
extended maturity period, as shown below:

------------------------------------------------------------------------
                                                       Entered--1st day
    Issue dates--1st day of--          Extension              of
------------------------------------------------------------------------
May 1967-Aug. 1968..............  3rd (final).......  Nov. 1991-Feb.
                                                       1993.
------------------------------------------------------------------------

    (iv) For savings notes that entered or enter extended maturity 
periods on or after March 1, 1993, the guaranteed minimum investment 
yield is 4 percent per annum, compounded semiannually, for such periods, 
or the investment yield in effect at the beginning of such periods, 
including notes that enter into an extended maturity period, as shown 
below:

------------------------------------------------------------------------
                                                       Entered--1st day
    Issue dates--1st day of--          Extension              of
------------------------------------------------------------------------
Sep. 1968-Oct. 1970.............  3rd (final).......  Mar. 1993-Apr.
                                                       1995.
------------------------------------------------------------------------

    (2) Eleven-year bonus. If a savings note was held for the 11-year 
period beginning with the first semiannual interest accrual date that 
occurred on or after January 1, 1980, its guaranteed minimum investment 
yield for such period was increased by one-half of one percent per 
annum, compounded semiannually.
    (c) Market-based variable investment yield. In order to be eligible 
for the market-based variable investment yield, notes had to be held at 
least five years beginning with the first semiannual interest accrual 
date occurring on or after November 1, 1982. The market-based variable 
investment yield shall be determined by the Secretary of the Treasury as 
follows:
    (1) For each 6-month period, starting with the period beginning May 
1, 1982, the average market yield on outstanding marketable Treasury 
securities with a remaining term to maturity of approximately 5 years 
during such period as determined. Such determination by the Secretary of 
the Treasury or his or her delegate shall be final and conclusive.
    (2) For notes which entered an extended maturity period prior to May 
1, 1989, the market-based variable investment yield from the first 
semiannual interest accrual date occurring on or after November 1, 1982 
to each semiannual interest accrual date occuring on or after November 
1, 1987, will be 85 percent, rounded to the nearest one-fourth of one 
percent, of the arithmetic average of the market yield averages, as 
determined in accordance with paragraph (c)(1) of this section, for the 
appropriate number of 6-month periods involved, starting with the period 
beginning May 1, 1982.
    (3) For notes which entered an extended maturity period on or after 
May 1, 1989, the market-based variable investment yield from the first 
semiannual interest accrual date occurring on or after November 1, 1982 
to each semiannual interest accrual date occurring or or after November 
1, 1989, will be 85 percent, rounded to the nearest one-hundredth of one 
percent, of the arithmetic average of the market yield averages, as 
determined in accordance with paragraph (c)(1) of this section for the 
appropriate number of 6-month periods involved, starting with the period 
beginning May 1, 1982.
    (d) Determination of redemption values during any extended maturity 
period. The redemption value of a note on a given interest accrual date 
during any extended maturity period will be the higher of the value 
produced by using the applicable guaranteed minimum investment yield or 
the value produced by using the appropriate market-based variable 
investment yield. The calculation of these values is described below:
    (1) Guaranteed minimum investment yield and resulting values during 
an extended maturity period. A note has a guaranteed minimum investment 
yield for each of its extended maturity periods. The applicable 
guaranteed minimum investment yield for the current extended maturity 
period and any subsequent periods are specified in paragraph (b) of this 
section. In order to determine the value of a note during an extended 
maturity period, the value of the note either at the end of the next 
preceding maturity period or when the guaranteed minimum investment 
yield

[[Page 252]]

last increased,\1\ whichever occurs later, is determined using the 
applicable guaranteed minimum investment yield. This value is then used 
as the base upon which interest accrues during the extended maturity 
period at the guaranteed minimum investment yield in effect for savings 
bonds at the beginning of that period. The resulting semiannual values 
are then compared with the corresponding values determined by using the 
applicable market-based variable investment yields.
---------------------------------------------------------------------------

    \1\ The 11-year bonus was the last increase in the guaranteed 
minimum investment yield (see paragraph (b)(2)). Savings notes which 
were eligible to receive this bonus received it on the first semiannual 
interest accrual date which occurred on or after January 1, 1991.
---------------------------------------------------------------------------

    (2) Market-based variable investment yield an resulting values 
during and extended maturity period. The market-based variable 
investment yield from the first semiannual interest accrual date 
occurring on or after November 1, 1982 to each semiannual interest 
accrual date occurring on or after November 1, 1987, is determined as 
specified in paragraph (c) of this section. The value of a note on its 
first semiannual interest accrual date occurring on or after November 1, 
1982 is used as the base upon which interest accrues during an extended 
maturity period at the applicable market-based variable investment 
yield. If redeemed, the note will receive the higher of the two values 
produced by using the applicable guaranteed minimum investment yield and 
the applicable market-based variable investment yield.
    (e) Market-based variable investment yields and tables of redemption 
values. The market-based variable investment yields for notes redeemed 
during each 6-month period, beginning on May 1 and November 1 of each 
year, are made available prior to each of those dates by the Bureau of 
the Public Debt, Parkersburg, West Virginia 26106-1328, accompanied by 
tables of the redemption values of notes for the following 6 months, 
based on either the applicable market-based variable investment yields 
or guaranteed minimum investment yields.

[57 FR 14282, Apr. 17, 1992, as amended at 58 FR 60937, 60938, Nov. 18, 
1993]



Sec. 342.4  Purchase--registration.

    (a) Purchase. Savings notes, in combination with Series E bonds, 
could be purchased from any authorized issuing agent, a Federal Reserve 
Bank or Branch, or the Bureau of the Public Debt. Payment for the notes 
could be made in the same manner as payment for Series E savings bonds. 
Issuing agents delivered the notes at the time of purchase, or by mail 
at the risk and expense of the United States, but only within the United 
States, its territories and possessions and the Commonwealth of Puerto 
Rico. No mail deliveries elsewhere were made.
    (b) Registration. The following restrictions applied to original 
issues of savings notes:
    (1) They were limited to registration in the name of a natural 
person (whether adult or minor), alone, or with another natural person 
as coowner or beneficiary, and
    (2) They had to be identical in registration to the Series E bond 
purchased in combination therewith.



Sec. 342.5  Limitations.

    (a) Purchases--(1) Payroll savings plans. Under a payroll savings 
plan, withholdings for notes could not exceed the ratio of $1.08 for the 
notes to $1 for the Series E bonds and could not exceed $20.25 per 
weekly pay period, or $40.50 per biweekly or semi-monthly pay period, or 
$81 per monthly pay period.
    (2) Others. In combination purchases of notes and Series E bonds, 
other than under a payroll savings plan, purchases of notes could not 
exceed $350 (face amount) a quarter, and in no event could the annual 
limitation of $1,350 (face amount) be exceeded.
    (b) Holdings. The face amount of savings notes originally issued to 
any one person during any one calendar year, was limited to $1,350.



Sec. 342.6  Taxation.

    (a) General. For the purpose of determining taxes and tax 
exemptions, the increment in value represented by the difference between 
the purchase price and the redemption value received for a savings note 
is considered interest. The interest is subject to all taxes imposed 
under the Internal Revenue Code

[[Page 253]]

of 1986, as amended. The notes are subject to estate, inheritance, gift, 
or other excise taxes, whether Federal or State, but are exempt from all 
other taxation now or hereafter imposed on the principal or interest 
thereof by any State, or any of the possessions of the United States, or 
by any local taxing authority.
    (b) Federal income tax on notes. An owner of savings notes who is a 
cash-basis taxpayer may use either of two methods for reporting the 
increase in the redemption value of the notes for Federal income tax 
purposes, as follows:
    (1) Defer reporting of the increase to the year of final maturity, 
actual redemption, or other disposition, whichever is earlier; or
    (2) Elect to report the increase for the year in which it accrues, 
in which case the election applies to all savings notes then owned and 
those subsequently acquired, as well as to any other similar obligations 
purchased on a discount basis.

If the method in paragraph (b)(1) of this section is used, the taxpayer 
may change to the method in paragraph (b)(2) of this section without 
obtaining permission from the Internal Revenue Service. However, once 
the election to use the method in paragraph (b)(2) of this section is 
made, the taxpayer may not change the method of reporting without 
permission from the Internal Revenue Service. For further information on 
Federal income taxes, the Service Center Director or District Director, 
Internal Revenue Service, of the taxpayer's district should be 
contacted.



Sec. 342.7  Payment or redemption.

    (a) General. A savings note is redeemable any time one year or more 
after the issue date upon its presentation and surrender, with a duly 
executed request for payment, to any Federal Reserve Bank or Branch 
referred to in 342.9, the Bureau of the Public Debt, or to any financial 
institution designated as a paying agent of savings bonds.
    (b) Judgment creditors. Payment of a savings note to the purchaser 
at a sale under a levy, or to the officer authorized to levy upon the 
property of the owner under appropriate process to satisfy a money 
judgment, could not be made until one year after the issue date of the 
note.

[57 FR 14282, Apr. 17, 1992, as amended at 59 FR 10540, Mar. 4, 1994]



Sec. 342.8  Governing regulations.

    Savings notes are subject to the regulations of the Department of 
the Treasury, now or hereafter prescribed, governing United States 
Savings Bonds, contained in 31 CFR part 315, also published as 
Department of the Treasury Circular No. 530, current revision, except as 
otherwise specifically provided herein.



Sec. 342.9  Fiscal agents.

    (a) Federal Reserve Banks and Branches referred to below, as fiscal 
agents of the United States, are authorized to perform such services as 
may be requested of them by the Secretary of the Treasury, or his or her 
delegate, in connection with the issue, redemption and payment of 
savings notes.
    (b)(1) The following Federal Reserve Offices have been designated to 
provide savings bond services:

------------------------------------------------------------------------
                                     Reserve districts   Geographic area
          Servicing office                 served            served
------------------------------------------------------------------------
Federal Reserve Bank, Buffalo        New York, Boston.  CT, MA, ME, NH,
 Branch, P.O. Box 961, Buffalo, NY                       NJ (northern
 14240.                                                  half), NY (City
                                                         & State), RI,
                                                         VT, Puerto Rico
                                                         and Virgin
                                                         Islands.
Federal Reserve Bank, Pittsburgh     Cleveland,         DE, KY (eastern
 Branch, P.O. Box 867, Pittsburgh,    Philadelphia.      half), NJ
 PA 15230.                                               (southern
                                                         half), OH, PA,
                                                         WV (northern
                                                         panhandle).
Federal Reserve Bank of Richmond,    Richmond, Atlanta  AL, DC, FL, LA
 P.O. Box 27622, Richmond, VA 23261.                     (southern
                                                         half), MD, MS
                                                         (southern
                                                         half), NC, SC,
                                                         TN (eastern
                                                         half), VA, WV
                                                         (except
                                                         northern
                                                         panhandle).
Federal Reserve Bank of              Minneapolis,       IA, IL (northern
 Minneapolis, 250 Marquette Avenue,   Chicago.           half), IN
 Minneapolis, MN 55480.                                  (northern
                                                         half), MN, MT,
                                                         ND, SD, WI.

[[Page 254]]

 
Federal Reserve Bank of Kansas       Dallas, San        AK, AR, AZ, CA,
 City, 925 Grand Avenue, Kansas       Francisco,         CO, HI, ID, IL
 City, MO 64198.                      Kansas City, St.   (southern
                                      Louis.             half), IN
                                                         (southern
                                                         half), KS, KY
                                                         (western half),
                                                         LA (northern
                                                         half), MO, MS
                                                         (northern
                                                         half), NE, NM,
                                                         NV, OK, OR, TN
                                                         (western half),
                                                         TX, WA, WY, UT
                                                         and GU.
------------------------------------------------------------------------

    (2) Until March 1, 1996, other Federal Reserve Offices may continue 
to provide some savings bond services, but such services will be phased 
out over the period prior to that date.

[59 FR 10540, Mar. 4, 1994]



Sec. 342.10  Reservations.

    (a) Issue of notes. The Secretary of the Treasury reserved the right 
to reject any application for purchase of savings notes, in whole or in 
part, and to refuse to issue or permit to be issued hereunder any such 
notes in any case or any class or classes of cases if such action was 
deemed to be in the public interest. Any action in any such respect was 
final.
    (b) Terms. The Secretary of the Treasury may at any time, or from 
time to time, supplement or amend the terms of this part, or of any 
amendments or supplements thereto.



PART 343--REGULATIONS GOVERNING THE OFFERING OF UNITED STATES MORTGAGE GUARANTY INSURANCE COMPANY TAX AND LOSS BONDS--Table of Contents




                     Subpart A--General Information

Sec.
343.0  Offering of bonds.
343.1  General provisions.

                      Subpart B--Tax and Loss Bonds

343.2  Issue date and purchase.
343.3  Redemption.
343.4  Reissue.
344.5  Taxation.

    Authority: 5 U.S.C. 301; 26 U.S.C. 832; 31 U.S.C. 3102.

    Source: 62 FR 49914, Sept. 24, 1997, unless otherwise noted.



                     Subpart A--General Information



Sec. 343.0  Offering of bonds.

    The Secretary of the Treasury, under the authority of the Second 
Liberty Bond Act, as amended, and pursuant to paragraph 832(e) of the 
Internal Revenue Code of 1954, offers for sale only to companies 
organized and engaged in the business of writing mortgage guaranty 
insurance within the United States, bonds of the United States 
designated as Mortgage Guaranty Insurance Company Tax and Loss Bonds, 
hereinafter referred to as tax and loss bonds. The bonds are issued in a 
minimum amount of $1,000 or in any larger amount, in increments of not 
less than $1.00. This offering will continue until terminated by the 
Secretary of the Treasury.



Sec. 343.1  General provisions.

    (a) Regulations. Tax and loss bonds are subject to the general 
regulations with respect to United States securities, which are set 
forth in the Department of the Treasury Circular No. 300 (31 CFR part 
306), to the extent applicable. Copies of the circular may be obtained 
from the Bureau of the Public Debt, Division of Special Investments, 
Room 309, 200 Third St., P.O. Box 396, Parkersburg, WV 26106-0396 or 
downloaded from Public Debt's home page on the Internet at: http://
www.publicdebt.treas.gov/.
    (b) Issuance. Tax and loss bonds are issued in book-entry form on 
the books of the Treasury that are maintained by the Division of Special 
Investments. The bonds are issued with 10 or 20 year maturities as 
designated by the purchaser. These bonds are non-interest bearing. Any 
transfer by sale, exchange, assignment, pledge or otherwise, is 
prohibited. The bonds may be reissued as provided in Sec. 343.4.
    (c) Fiscal agents. Selected Federal Reserve Banks and Branches, as 
fiscal agents of the United States, may be

[[Page 255]]

designated to perform such services requested of them by the Secretary 
of the Treasury in connection with the purchase, redemption and other 
transactions involving these bonds.
    (d) Debt limit contingency. The Department of the Treasury reserves 
the right to change or suspend the terms and conditions of this 
offering, including provisions relating to the purchase of, and 
redemption of, the bonds as well as notices relating hereto, at any time 
the Secretary determines that the issuance of obligations sufficient to 
conduct the orderly financing operations of the United States cannot be 
made without exceeding the statutory debt limit. Announcement of such 
changes shall be provided by such means as the Secretary deems 
appropriate.
    (e) General redemption provisions. A bond may not be called for 
redemption by the Secretary of the Treasury prior to maturity. When the 
bond matures, payment will be made of the principal amount due to the 
owner. A bond scheduled for maturity on a non-business day will be 
redeemed on the next business day.
    (f) Reservations. The Secretary of the Treasury may at any time, or 
from time to time, supplement or amend the terms of this circular or any 
related amendments or supplements. Transaction requests, including 
purchases or redemptions of bonds, are not acceptable if unsigned, 
inappropriately completed, or not timely submitted. Any of these actions 
shall be final. The authority of the Secretary to waive regulations 
under 31 CFR 306.126 applies to part 343.
    (g) Forms and additional information. The application form for 
subscriptions, Fedwire instructions and other information will be 
furnished by the Division of Special Investments upon request by writing 
to the Division of Special Investments or by calling (304) 480-7752. 
Application forms may also be downloaded from the Internet at Public 
Debt's home page at: http://www.publicdebt.treas.gov/.



                      Subpart B--Tax and Loss Bonds



Sec. 343.2  Issue date and purchase.

    (a) Issue date. The issue date must be a business day. The bonds 
will be issued as of the date of receipt of Form PD F 3871 ``Application 
for Issue of United States Mortgage Guaranty Insurance Company Tax and 
Loss Bonds'' and receipt of the remittance of funds for the full amount 
of the bond(s). Applications under this offering must be submitted to 
the Division of Special Investments. An application may be submitted by 
fax at (304) 480-7786 or (304) 480-6818, by mail, or by other carrier. 
Applications submitted by mail should be sent by certified or registered 
mail.
    (b) Purchase. Tax and loss bonds may only be purchased from the 
Division of Special Investments. The purchaser will instruct their 
financial institution to submit the exact amount of funds on the 
requested issue date to the Division of Special Investments via the 
Fedwire funds transfer system, with credit directed to the Treasury's 
General Account, according to wire instructions obtained from the 
Division of Special Investments (see Sec. 343.1(g)). Full payment should 
be submitted by 3:00 P.M. Eastern time to ensure that settlement of the 
transaction occurs.

(Approved by the Office of Management and Budget under control number 
1535-0127.)



Sec. 343.3  Redemption.

    (a) General. Tax and loss bonds may not be called for redemption by 
the Secretary of the Treasury prior to maturity, but may be redeemed in 
whole or in part at the owner's option at any time after three months 
from issue date. The Director of the Internal Revenue Service District 
in which the owner's principal place of business is located will be 
given notice of all redemptions. Partial redemptions of bonds may be 
requested in any whole dollar amount; however, an account balance of 
less than $1,000 will be redeemed in total.
    (b) Method of payment. Payment will be made by the Automated 
Clearing House (ACH) method for the owner's

[[Page 256]]

account at a financial institution designated by the owner. To the 
extent applicable, provisions of Sec. 357.26, Payments, and provisions 
of 31 CFR part 370, shall govern ACH payments made under this offering. 
The Department of the Treasury may employ alternate payment procedures 
in lieu of ACH in any case or class of cases where operational 
considerations require such action.
    (c) Book-entry. Bonds will be redeemed automatically upon maturity. 
Payment will be made in accordance with the ACH payment instructions on 
file. Redemptions prior to maturity will be made upon receipt of a 
redemption request. Notice of redemption prior to maturity must be 
submitted in writing on company letterhead to the Division of Special 
Investments, or faxed to (304) 480-7786 or to (304) 480-6818. The notice 
must be received by the Division of Special Investments not less than 
three business days prior to the requested redemption date. It must 
contain the owner's name and Tax Identification Number, the requested 
redemption date, any changed payment routing instructions, the case 
number(s) to be redeemed, including original issue date(s), and the 
amount to be redeemed.
    (d) Registered. To obtain redemption, a bond with the assignment for 
redemption properly completed and executed must be presented to the 
Division of Special Investments. Payment routing instructions must also 
be included with the bond at redemption. Upon partial redemption of a 
registered bond, the remaining balance will be reissued in book-entry 
form with the original issue and maturity date.

(Approved by the Office of Management and Budget under control number 
1535-0127.)



Sec. 343.4  Reissue.

    (a) General. Reissue of a tax and loss bond may be made only under 
the conditions specified in this paragraph. A request for reissue must 
be made by an officer of the beneficial owner who is authorized to 
assign the bond for redemption. The request must be submitted to the 
Division of Special Investments. A bond will only be reissued in book-
entry form and will bear the same issue date and maturity as the 
original bond.
    (b) Correction of error. The reissue of a bond may be made to 
correct an error in the original issue upon an appropriate request, 
supported by satisfactory proof of the error.
    (c) Change of name. An owner whose name is changed in any legal 
manner after the issue of the bond should submit the bond with a request 
for reissue, substituting the new name for the name inscribed on the 
bond. The signature on the request for reissue should show the new name, 
the legal reason which caused the change to be made and the former name. 
It must be supported by satisfactory proof of the change of name.
    (d) Legal succession. A bond registered in the name of a company 
which has been succeeded by another company as the result of a merger, 
consolidation, incorporation, reincorporation, conversion, 
reorganization, or which has been lawfully succeeded in any manner 
whereby the business or activities of the original organization are 
continued without substantial change, will be paid to or reissued in the 
name of the successor upon an appropriate request on its behalf, 
supported by satisfactory evidence of successorship.
    (e) Conversion to book-entry. Although not required, any owner of 
tax and loss bonds held in registered form after the effective date of 
this regulation, may submit those bonds to the Division of Special 
Investments, for conversion to book-entry form.

(Approved by the Office of Management and Budget under control number 
1535-0127.)



Sec. 343.5  Taxation.

    Tax and loss bonds will be exempt from all taxation now or hereafter 
imposed on the principal by any state or any possession of the United 
States or of any local taxing authority.



PART 344--U.S. TREASURY SECURITIES--STATE AND LOCAL GOVERNMENT SERIES--Table of Contents




                     Subpart A--General Information

Sec.
344.0  What does this part cover?

[[Page 257]]

344.1  What special terms do I need to know to understand this part?
344.2  What general provisions apply to SLGS securities?

                               SLGSafe\SM\

344.3  What special provisions apply to SLGSafe\SM\ Internet 
          transactions?

                   Subpart B--Time Deposit Securities

344.4  What are Time Deposit securities?
344.5  How do I subscribe for Time Deposit securities?
344.6  How do I redeem a Time Deposit security before maturity?

                  Subpart C--Demand Deposit Securities

344.7  What are Demand Deposit securities?
344.8  How do I subscribe for Demand Deposit securities?
344.9  How do I redeem a Demand Deposit security?

               Subpart D--Special Zero Interest Securities

344.10  What are Special Zero Interest securities?
344.11  How do I redeem a Special Zero Interest security before 
          maturity?

Appendix A to Part 344--Early Redemption Market Charge Formulas and 
          Examples for Subscriptions From December 28, 1976, Through 
          October 27, 1996
Appendix B to Part 344--Formula for Determining Redemption Value for 
          Securities Subscribed for and Early-Redeemed On or After 
          October 28, 1996

    Authority: 26 U.S.C. 141 note; 31 U.S.C. 3102.

    Source: 65 FR 55405, Sept. 13, 2000, unless otherwise noted.



                     Subpart A--General Information



Sec. 344.0  What does this part cover?

    (a) What is the purpose of the SLGS securities offering? The 
Secretary of the Treasury (the Secretary) offers for sale State and 
Local Government Series (SLGS) securities to provide issuers of tax 
exempt securities with investments from any amounts that:
    (1) Constitute gross proceeds of an issue; or
    (2) Assist in complying with applicable provisions of the Internal 
Revenue Code relating to the tax exemption.
    (b) What types of SLGS securities are governed by this part? This 
part governs the following SLGS securities:

----------------------------------------------------------------------------------------------------------------
                                                                United States
                                                                   Treasury      United States    United States
                       SLGS securities                         certificates of   Treasury notes   Treasury bonds
                                                                 indebtedness
----------------------------------------------------------------------------------------------------------------
(1) Time Deposit.............................................               X                X                X
----------------------------------------------------------------------------------------------------------------
(2) Demand Deposit...........................................               X   ...............  ...............
----------------------------------------------------------------------------------------------------------------
(3) Special Zero Interest (Discontinued offering on October                 X                X   ...............
 28, 1996)...................................................
----------------------------------------------------------------------------------------------------------------

    (c) In what denominations are SLGS securities issued? SLGS 
securities are issued in the following denominations:
    (1) Time deposit securities--a minimum amount of $1,000, or in any 
larger whole dollar amount; and
    (2) Demand deposit securities--a minimum amount of $1,000, or in any 
larger amount, in any increment.
    (d) For how long is the offering in effect? The offering continues 
until terminated by the Secretary.



Sec. 344.1  What special terms do I need to know to understand this part?

    As appropriate, the definitions of terms used in this part are those 
found in the relevant portions of the Internal Revenue Code and the 
Income tax regulations.
    Business Day(s) means Federal business day(s).
    Current Treasury borrowing rate means the prevailing market rate, as 
determined by Treasury, for a Treasury security with the specified 
period to maturity.
    Day(s) means calendar day(s).
    Issuer refers to the Government body that issues State or local 
government bonds described in section 103 of the Internal Revenue Code.
    Public Debt's website refers to .
    SLGS rate means the current Treasury borrowing rate on the day we 
receive your subscription, less 5 basis

[[Page 258]]

points, as released daily by Treasury in a SLGS rate table.
    SLGS rate table means a compilation of SLGS rates available for a 
given day.
    ``We'', ``us'', or ``the Secretary'' refers to the Secretary and the 
Secretary's delegates at the Department of the Treasury (Treasury), 
Bureau of the Public Debt (Public Debt), and Division of Special 
Investments (DSI). The term also extends to any fiscal or financial 
agent acting on behalf of the United States when designated to act by 
the Secretary or the Secretary's delegates.



Sec. 344.2  What general provisions apply to SLGS securities?

    (a) What other regulations apply to SLGS securities? SLGS securities 
are subject to:
    (1) The electronic transactions and funds transfers provisions for 
United States securities, part 370 of this subchapter, ``Electronic 
Transactions and Funds Transfers Related to U.S. Securities'', and
    (2) The Appendix to subpart E to part 306 of this subchapter, for 
rules regarding computation of interest.
    (b) Where are SLGS securities held? SLGS securities are issued in 
book-entry form on the books of the Department of the Treasury, Bureau 
of the Public Debt, Division of Special Investments, Parkersburg, WV.
    (c) Besides DSI, do any other entities administer SLGS securities? 
The Secretary may designate selected Federal Reserve Banks and Branches, 
as fiscal agents of the United States, to perform services relating to 
SLGS securities.
    (d) Can SLGS securities be transferred? No. SLGS securities held in 
an account of any one type, i.e., time deposit, demand deposit, or 
special zero interest, cannot be transferred within that account, or to 
an account of any other type. Transfer of securities by sale, exchange, 
assignment, pledge, or otherwise is not permitted.
    (e) How does a bank or other agent certify its authority? When a 
commercial bank or other agent submits an initial or final subscription 
on behalf of the issuer, it certifies that it is acting under the 
issuer's specific authorization. Ordinarily, evidence of such authority 
is not required.
    (f) What transactions are not permitted? The following is a 
nonexclusive list of impermissible transactions:
    (1) It is impermissible to subscribe for SLGS securities for deposit 
in a defeasance escrow of fund if at any time between the close of 
business on the date of subscription and the close of business on the 
date of issue, the amount of SLGS securities subscribed for, plus the 
amount of any other securities already in such escrow or fund, plus the 
amount of other securities the issuer has acquired, or has the right to 
acquire for deposit in an escrow or fund, exceeds the total amount of 
securities needed to fund such escrow or fund.
    (2) For paragraph (f)(1) of this section, do not include in the 
computation any securities held in the escrow or fund that are not 
subject to an agreement conditioned on changes in the interest rate on 
open market Treasury securities on or before the issue date of the SLGS 
securities. An adjustment in the subscription amount under 
Sec. 344.5(b)(4)(ii) will not in and of itself make the transaction 
impermissible.
    (3) The following examples illustrate certain permissible and 
impermissible practices:
    (i) In order to fund an escrow for an advance refunding, the issuer 
simultaneously enters into a purchase contract for open market 
securities and subscribes for SLGS securities, such that either purchase 
is sufficient to pay the cash flows on the outstanding bonds to be 
refunded but together, the purchases are greatly in excess of the amount 
necessary to pay the cash flows. The issuer plans that, if interest 
rates decline during the period between the date of subscribing for SLGS 
securities and the requested date of issuance of SLGS securities, the 
issuer will enter into an offsetting agreement to sell the open market 
securities and use the bond proceeds to purchase SLGS securities to fund 
the escrow. If, however, interest rates do not decline in that period, 
the issuer plans to use the bond proceeds to purchase the open market 
securities to fund the escrow and cancel the SLGS securities 
subscription. This arrangement in effect allows the SLGS program to 
provide a

[[Page 259]]

cost-free option to the issuer. This transaction is prohibited.
    (ii) The existing escrow for an advance refunding contains open 
market securities which produce a negative arbitrage. In order to reduce 
or eliminate this negative arbitrage, the issuer subscribes for SLGS 
securities at a yield higher than the yield on the existing escrow, but 
less than the permitted yield. At the same time, the issuer agrees to 
sell the open market securities in the existing escrow to a third party 
and use the proceeds to purchase SLGS securities if interest rates 
decline between the date of subscribing for SLGS securities and the 
requested date of issuance of SLGS securities. The issuer and the third 
party further agree that if interest rates increase during this period, 
the issuer will cancel the SLGS securities subscription. This 
arrangement in effect allows the SLGS program to provide a cost-free 
option to the issuer. This transaction is prohibited.
    (iii) Under the same facts as in paragraph (f)(3)(ii) of this 
section, except that in this case, the agreement entered into by the 
issuer with a third party to sell the open market securities in order to 
obtain funds to purchase SLGS securities is not conditioned upon changes 
in interest rates on Treasury securities. No option is created. This 
transaction is permissible.
    (iv) The issuer subscribes for SLGS securities fifteen days before 
the settlement date of its bonds at the maximum rates on such day, but 
the resulting yield in the escrow is less than the permitted yield. The 
rates on the SLGS securities rise over the next few days, and, within 
the time periods permitted for cancellation of a subscription under 
Sec. 344.5(b)(1) and Sec. 344.8(b)(2), the issuer cancels the earlier 
subscription and resubscribes at the higher rates. This transaction is 
permissible.
    (v) The issuer holds a portfolio of open market securities in an 
account that produces negative arbitrage. In order to reduce or 
eliminate this negative arbitrage, the issuer subscribes for SLGS 
securities for purchase in sixty days. At the same time, the issuer 
sells an option to purchase the portfolio of open market securities. If 
interest rates increase, the holder of the option will not exercise its 
option and the issuer will cancel the SLGS securities subscription. On 
the other hand, if interest rates decline, the option holder will 
exercise the option and the issuer will use the proceeds to purchase 
SLGS securities. This arrangement uses the SLGS program to provide the 
issuer with a cost-free option. This transaction is prohibited.
    (g) When and how do I pay for SLGS securities? You must submit full 
payment for each subscription to DSI by 4:00 p.m., Eastern time, on the 
issue date. Submit payments by the Fedwire funds transfer system with 
credit directed to the Treasury's General Account. For these 
transactions, Public Debt's ABA Routing Number is 051036476.
    (h) What happens if I do not settle on a subscription? The penalty 
imposed for failure to make settlement on a subscription that you submit 
but do not timely cancel will be to render you ineligible to subscribe 
for SLGS securities for six months, beginning on the date the 
subscription is withdrawn or the proposed issue date, whichever occurs 
first.
    (1) Upon whom is the penalty imposed? If you are the issuer, the 
penalty is imposed on you unless you provide the Taxpayer Identification 
Number of the conduit borrower that is the actual party failing to make 
settlement of a subscription. If you provide the Taxpayer Identification 
Number for the conduit borrower, the six-month penalty will be imposed 
on the conduit borrower.
    (2) What occurs if Treasury exercises the option to waive the 
penalty? If you settle after the proposed issue date and we determine 
that settlement is acceptable on an exception basis, we will waive under 
Sec. 344.2(n) the six-month penalty under paragraph (h) of this section. 
You shall be charged a late payment assessment. The late payment 
assessment equals the amount of interest that would have accrued on the 
SLGS securities from the proposed issue date to the date of settlement 
plus an administrative fee of $100 per subscription. Late payment 
assessments are due on demand.

[[Page 260]]

    (i) What happens at redemption? Treasury cannot call a security for 
redemption before maturity. Upon the maturity of a security, we will pay 
the owner the principal amount and interest due. A security scheduled 
for maturity on a non-business day will be redeemed on the next business 
day.
    (j) How will I receive payment? We will make payment by the 
Automated Clearing House (ACH) method for the owner's account at a 
financial institution as designated by the owner. We may use substitute 
payment procedures, instead of ACH, if we consider it to be necessary. 
Any such action is final.
    (k) If I am not an Internet customer, how do I submit transactions 
to DSI? Non-Internet customers may submit transactions by fax at (304) 
480-6818, or by carrier service, U.S. Postal Service (certified or 
registered mail), or other means, to the Bureau of the Public Debt, 
Division of Special Investments, 200 3rd St., P.O. Box 396, Parkersburg, 
WV 26106-0396. Unless requested, DSI will not send a confirmation of 
receipt to non-Internet customers.
    (l) Will the offering be changed during a debt limit contingency? We 
reserve the right to change or suspend the terms and conditions of the 
offering, including provisions relating to subscriptions for, and 
issuance of, SLGS securities, interest payments, early redemptions, 
rollovers, and notices, at any time the Secretary determines that the 
issuance of obligations sufficient to conduct the orderly financing 
operations of the United States cannot be made without exceeding the 
statutory debt limit. We will announce such changes by any means the 
Secretary deems appropriate.
    (m) What transaction requests are unacceptable? A decision to reject 
an unacceptable transaction request is in our sole discretion and is 
final. Although we may waive the right to reject transactions under 
Sec. 344.2(n), Treasury reserves the right:
    (1) To reject any SLGSafe\SM\ Application for Internet Access;
    (2) To reject any electronic or paper transaction request (including 
requests for subscription and redemption, and changes to subscriptions) 
that is unsigned, inappropriately completed, or untimely submitted;
    (3) To refuse to issue any SLGS securities in any case or class of 
cases; and
    (4) To revoke the issuance of any SLGS securities and to declare the 
subscriber ineligible thereafter to subscribe for securities under the 
offering if the Secretary deems that such action is in the public 
interest and any security is issued on the basis of an improper 
certification or other misrepresentation (other than as the result of an 
inadvertent error) or there is an impermissible transaction under 
Sec. 344.2(f).
    (n) Are there any situations in which Treasury may waive these 
regulations? We reserve the right, at our discretion, to waive or modify 
any provision of these regulations in any case or class of cases. We may 
do so if such action is not inconsistent with law and will not subject 
the United States to substantial expense or liability.

                             SLGSafeSM



Sec. 344.3  What special provisions apply to SLGSafeSM Internet transactions?

    (a) What is SLGSafeSM? SLGSafe\SM\ is a secure Internet 
site on the World Wide Web through which you can submit SLGS securities 
transactions. SLGSafe\SM\ Internet transactions constitute electronic 
messages under 31 CFR part 370.
    (b) When can I subscribe using SLGSafeSM? You will be 
able to submit SLGSafe\SM\ transactions to DSI after we approve your 
SLGSafe\SM\ Application under Sec. 344.3(g).
    (c) What special terms and conditions apply to SLGSafeSM? 
The following terms and conditions, which may change from time to time, 
apply to SLGSafe\SM\ transactions and are downloadable from Public 
Debt's website:
    (1) SLGSafe\SM\ Application for Internet Access and SLGSafe\SM\ User 
Acknowledgment;
    (2) Public Debt's Certificate Practice Statement; and
    (3) SLGSafe\SM\ Internet User's Guide.
    (d) Who can apply for SLGSafeSM access? There are five 
roles in SLGSafe\SM\: owner, trustee, receiving depository financial 
institution, subscriber, and viewer. If you are an owner

[[Page 261]]

of SLGS securities or act as a trustee, receiving depository financial 
institution or subscriber, you can apply to DSI for authorization to 
send electronic messages through SLGSafe\SM\. If you are an owner or 
trustee, you can authorize your SLGS securities holdings to be accessed 
by any other viewer who applies for SLGSafe\SM\ access.
    (e) What SLGSafeSM functions can I perform in each role? 
The role that you play in SLGSafe\SM\ shall determine the functions that 
you will be allowed to perform. An explanation of the roles and 
functions is outlined in the SLGSafeSM Internet User's Guide.
    (f) How do I apply for access to SLGSafeSM? You must 
apply for SLGSafe\SM\ access before performing any Internet functions. 
To apply for SLGSafe\SM\ Internet access, you must:
    (1) Submit to DSI a completed Treasury form, PD F 4144-5, 
SLGSafe\SM\ Application for Internet Access;
    (2) Appoint a SLGSafe\SM\ Access Administrator and a backup 
administrator who certify that the information on the SLGSafe\SM\ 
Application is accurate;
    (3) Ensure only authorized users are reflected on the SLGSafe\SM\ 
Application; and
    (4) Await our written approval of your SLGSafe\SM\ Application 
before you, or anyone acting on your behalf, uses an electronic 
connection to access any of our services or to send any electronic 
messages.
    (g) How is my SLGSafeSM Application approved? The 
Secretary has the sole discretion to determine the priority of approval 
of SLGSafe\SM\ Applications. Upon receipt of your SLGSafe\SM\ 
Application, we will review your SLGSafe\SM\ Application and send to you 
either an approval or rejection notice. If we approve your SLGSafe\SM\ 
Application, we will:
    (1) Issue a digital certificate with an associated authorization 
code to each user you authorize on your approved application; and
    (2) Provide access to your existing portfolio of SLGS securities, if 
any, to enable you to access the SLGS securities through SLGSafe\SM\.
    (h) What are the conditions of SLGSafeSM use? If you are 
designated as an authorized user on a SLGSafe\SM\ Application that we've 
approved, you must:
    (1) Sign, and send to DSI, a User Acknowledgment regarding the use 
of the digital certificate and authorization code;
    (2) Have and maintain the compatibility of your computer(s) and 
associated equipment and software so that you can send electronic 
messages and permit us to send an automatic confirmation receipt of each 
transaction, and any other information, to you on a timely basis 
throughout the day;
    (3) Assume the sole responsibility and the entire risk of use and 
operation of your electronic connection;
    (4) Agree that we may act on any electronic message that we 
authenticate as yours under Public Debt's Certificate Practice 
Statement, and any other Certificate Policy that Treasury may issue, to 
the same extent as if we had received a written instruction bearing the 
signature of your duly authorized officer;
    (5) Submit electronic messages exclusively through SLGSafe\SM\ 
unless you:
    (i) Are unable to do so; and
    (ii) Notify us before submitting transactions by other means; and
    (6) Agree to submit transactions by other means if we notify you 
that problems with hardware, software or data transmission delays, or 
any other reason, prevent our sending or receiving electronic messages.
    (i) If I am an Internet customer, how do I submit transactions using 
SLGSafeSM to DSI? Internet customers must submit transactions 
to DSI through the SLGSafe\SM\ Internet site at Public Debt's website. 
If your electronic message is accepted, we will send automatically an 
electronic confirmation to you. You can use the confirmation notice to 
verify the date and time that Public Debt's Application server received 
the electronic message that you submitted.



                   Subpart B--Time Deposit Securities



Sec. 344.4  What are Time Deposit securities?

    Time deposit securities are issued as certificates of indebtedness, 
notes and bonds.

[[Page 262]]

    (a) What are the terms of maturity? The issuer must fix the maturity 
periods for time deposit securities, which are issued as follows:

------------------------------------------------------------------------
                                            Maturity range
   Time deposit securities   -------------------------------------------
                                      From           Up to and including
------------------------------------------------------------------------
Certificates of Indebtedness  15 days.............  1 year.
 that bear no.
interest....................
------------------------------------------------------------------------
Certificates of Indebtedness  30 days.............  1 year.
------------------------------------------------------------------------
Notes.......................  1 year and 1 day....  10 years.
------------------------------------------------------------------------
Bonds.......................  10 years and 1 day..  40 years; provided
                                                     that for any
                                                     subscription for a
                                                     bond exceeding 30
                                                     years, the maximum
                                                     available rate must
                                                     be the rate on a 30-
                                                     year bond.
------------------------------------------------------------------------

    (b) How are SLGS rates determined? For each security, the issuer 
shall designate an interest rate that does not exceed the maximum 
interest rate shown in the daily SLGS rate table as defined in 
Sec. 344.1.
    (1) When is the SLGS rate table released? We release the SLGS rate 
table to the public by 10:00 a.m., Eastern time, each business day. If 
we find that due to circumstances beyond our control the SLGS rate table 
is not available at that time on any given business day, the SLGS rate 
table for the preceding business day applies.
    (2) How do I lock in a SLGS rate? The applicable daily SLGS rate 
table for a non-Internet subscription is the one in effect on the date 
the initial subscription is faxed, postmarked, or carrier date stamped. 
The applicable daily SLGS rate table for a SLGSafeSM Internet initial 
subscription is the one in effect on the date shown on Public Debt's 
Application server.
    (3) Where can I find the SLGS rate table? The SLGS rate table can be 
obtained:
    (i) On the Internet at Public Debt's website; or
    (ii) By calling DSI at (304) 480-7752.
    (c) How are interest computation and payment dates determined? 
Interest on a certificate of indebtedness is computed on an annual basis 
and is paid at maturity with the principal. Interest on a note or bond 
is paid semi-annually. The issuer specifies the first interest payment 
date, which must be at least thirty days and less than or equal to one 
year, from the date of issue. The final interest payment date must 
coincide with the maturity date of the security. Interest for other than 
a full interest period is computed on the basis of a 365-day or 366-day 
year (for certificates of indebtedness) and on the basis of the exact 
number of days in the half-year (for notes and bonds). See the Appendix 
to subpart E of part 306 of this subchapter for rules regarding 
computation of interest.



Sec. 344.5  How do I subscribe for Time Deposit securities?

    (a) Where do I submit transactions? All subscriptions for purchase, 
cancellation requests, changes to initial or final subscriptions and 
notices of redemption must be sent to DSI.
    (b) What requirements apply to initial subscriptions?
    (1) When is my initial subscription or cancellation due in DSI? The 
subscriber must fix the issue date of each security in the initial 
subscription. The issue date must be a business day. The issue date 
cannot be more than sixty days after the date DSI receives the initial 
subscription. To determine when you must send an initial subscription or 
cancellation request, follow this table:

------------------------------------------------------------------------
                  If:                                 Then:
------------------------------------------------------------------------
(i) The subscription is for:...........  DSI must receive an initial
                                          subscription (or you can
                                          cancel it without penalty):
------------------------------------------------------------------------
(A) $10 million or less, or............  at least 5 days before the
                                          issue date of the
                                          subscription.
------------------------------------------------------------------------
(B) Over $10 million...................  at least 7 days before the
                                          issue date of the
                                          subscription.
------------------------------------------------------------------------

[[Page 263]]

 
(ii) The 5th or 7th day before the       DSI must receive the
 issue date is a non-business day.        cancellation request on the
                                          preceding business day.
------------------------------------------------------------------------
(iii) DSI receives an initial            DSI will not accept an initial
 subscription more than 60 days before    subscription.
 the issue date.
------------------------------------------------------------------------


    Example to paragraph (b)(1): If SLGS securities totaling $10 million 
or less will be issued on March 16th, DSI must receive the initial 
subscription no later than March 11th. If SLGS securities totaling more 
than $10 million will be issued on March 16th, DSI must receive the 
initial subscription no later than March 9th.

    (2) What form is used to submit an initial subscription? An initial 
subscription must be submitted on an electronic or paper Treasury form, 
PD F 4144, ``Subscription for Purchase and Issue of U.S. Treasury 
Securities State and Local Government Series Time Deposit.''
    (3) Can I submit a letter instead of an initial subscription form? 
Yes. If you do not have an initial subscription form under paragraph 
(b)(2) of this section, then submit a letter to DSI that contains the 
following information:
    (i) The total principal amount;
    (ii) The issue date;
    (iii) The name and the Taxpayer Identification Number of issuer 
eligible to purchase SLGS securities;
    (iv) The date; and
    (v) The signature and title of an official authorized to purchase 
SLGS securities.
    (4) How do I change an initial subscription? You can change an 
initial subscription on or before the issue date, but not later than 
3:00 p.m., Eastern time, on the issue date. Changes to an initial 
subscription are acceptable with the following exceptions:
    (i) You cannot change the issue date to require issuance earlier 
than the issue date originally specified. The issue date can be changed 
up to seven days after the original issue date. If you make such a 
change, you should notify DSI as soon as possible, but no later than 
3:00 p.m., Eastern time, one business day before the original issue 
date;
    (ii) You may change the aggregate principal amount specified in the 
initial subscription up to $10 million or ten percent, whichever is 
greater;
    (iii) You can change an interest rate provided it does not exceed 
the maximum interest rate in the SLGS rate table that was in effect for 
a security of comparable maturity on the date the initial subscription 
was submitted (unless the issuer obtains a higher rate by canceling and 
resubscribing in compliance with this section); and
    (iv) If you submit an untimely change, Treasury, in its sole 
discretion, can accept the change on an exception basis under 
Sec. 344.2(n). Whether we accept the change before or after the issue 
date, the amended information will be applied to the securities. The 
six-month penalty will be imposed under Sec. 344.2(h). If Treasury 
waives the six-month penalty, you will be charged a late payment 
assessment under Sec. 344.2(h)(2).
    (5) When is an initial subscription not required? No initial 
subscription is required when a final subscription is received at least 
five days before the issue date for subscriptions of $10 million or less 
and at least seven days before the issue date for subscriptions of over 
$10 million. Such final subscription is treated as the initial 
subscription for purposes of determining the applicable SLGS rate table 
under Sec. 344.4(b).
    (c) What requirements apply to final subscriptions?
    (1) What form is used to submit a final subscription? You must 
submit an electronic or paper Treasury form, PD F 4144 ``Subscription 
for Purchase and Issue of U.S. Treasury Securities State and Local 
Government Series Time Deposit,'' as a final subscription.
    (2) What information must be contained on the final subscription? 
The final subscription must:
    (i) be dated and signed by an official authorized to make the 
purchase;
    (ii) include the Taxpayer Identification Number of the issuer;
    (iii) be accompanied with a copy of the initial subscription (or if 
a SLGSafe\SM\ subscription, the Treasury case number) where applicable;
    (iv) separately itemize securities by the various maturities, 
interest rates,

[[Page 264]]

and first interest payment dates (in the case of notes and bonds);
    (v) not be more than $10 million or ten percent, whichever is 
greater, above or below the aggregate principal amount specified in the 
initial subscription; and
    (vi) not be paid with proceeds that are derived, directly or 
indirectly, from the redemption before maturity of SLGS securities 
subscribed for on or before December 27, 1976.
    (3) How do I change a final subscription? You can change a final 
subscription on or before the issue date in the same fashion as you 
change an initial subscription under Sec. 344.5(b)(4)(i)-(iv).
    (4) When must I send a final subscription? DSI must receive a final 
subscription on or before the issue date, but not later than 3:00 p.m., 
Eastern time, on the issue date.



Sec. 344.6  How do I redeem a Time Deposit security before maturity?

    (a) What is the minimum time a security must be held? To determine 
how long you must hold a security, follow this table:

------------------------------------------------------------------------
                                            then, at the owner's option,
         If the security is . . .           the security can be redeemed
                                                no earlier than . . .
------------------------------------------------------------------------
(1) A zero percent certificate of           15 days after the issue
 indebtedness of 16 to 29 days.              date.
------------------------------------------------------------------------
(2) A certificate of indebtedness of 30     25 days after the issue
 days or more.                               date.
------------------------------------------------------------------------
(3) A note or bond........................  30 days after the issue
                                             date.
------------------------------------------------------------------------

    (b) Can I request partial redemption of a security balance? You may 
request partial redemptions in any whole dollar amount; however, a 
security balance of less than $1,000 must be redeemed in total.
    (c) Do I have to submit a notice of early redemption? Yes. An 
official authorized to redeem the securities before maturity must submit 
an electronic or paper notice of redemption. The notice must show the 
Taxpayer Identification Number of the issuer, the Treasury case number, 
the security number and the dollar amount of the securities to be 
redeemed. DSI must receive the notice no less than 10 days and no more 
than 60 days before the requested redemption date. You cannot cancel the 
notice.
    (d) How do I calculate the amount of redemption proceeds for 
subscriptions on or after October 28, 1996? For securities subscribed 
for on or after October 28, 1996, the amount of the redemption proceeds 
is calculated as follows:
    (1) Interest. If a security is redeemed before maturity on a date 
other than a scheduled interest payment date, Treasury pays interest for 
the fractional interest period since the last interest payment date.
    (2) Redemption value. The remaining interest and principal payments 
are discounted by the current Treasury borrowing rate for the remaining 
term to maturity of the security redeemed. This may result in a premium 
or discount to the issuer depending on whether the current Treasury 
borrowing rate is unchanged, lower, or higher than the stated interest 
rate of the early-redeemed SLGS securities. There is no market charge 
for the redemption of zero interest time deposit SLGS securities 
subscribed for on or after October 28, 1996. Redemption proceeds in the 
case of a zero-interest security are a return of the principal invested. 
The formulas for calculating the redemption value under this paragraph, 
including examples of the determination of premiums and discounts, are 
set forth in Appendix B of this part.
    (e) How do I calculate the amount of redemption proceeds for 
subscriptions from September 1, 1989, through October 27, 1996? For 
securities subscribed for from September 1, 1989, through October 27, 
1996, the amount of the redemption proceeds is calculated as follows:
    (1) Interest. If a security is redeemed before maturity on a date 
other than a scheduled interest payment date, Treasury pays interest for 
the fractional interest period since the last interest payment date.
    (2) Market charge. An amount shall be deducted from the redemption 
proceeds if the current Treasury borrowing rate for the remaining period 
to original maturity exceeds the rate of interest originally fixed for 
such security. The amount shall be the present value of the future 
increased borrowing cost to the Treasury. The annual increased borrowing 
cost for each interest period is determined by multiplying the principal 
by the difference between the two

[[Page 265]]

rates. For notes and bonds, the increased borrowing cost for each 
remaining interest period to original maturity is determined by dividing 
the annual cost by two. Present value is determined by using the current 
Treasury borrowing rate as the discount factor. When you request a 
redemption date that is less than thirty days before the original 
maturity date, we will apply the rate of a one month security as listed 
on the SLGS rate table issued on the day you make a redemption request. 
The market charge under this paragraph can be computed by using the 
formulas in Appendix A of this part.
    (f) How do I calculate the amount of redemption proceeds for 
subscriptions from December 28, 1976, through August 31, 1989? For 
securities subscribed for from December 28, 1976, through August 31, 
1989, the amount of the redemption proceeds is calculated as follows:
    (1) Interest. Interest for the entire period the security was 
outstanding shall be recalculated if the original interest rate of the 
security is higher than the interest rate that would have been set at 
the time of the initial subscription had the term of the security been 
for the shorter period. If this results in an overpayment of interest, 
we will deduct from the redemption proceeds the aggregate amount of such 
overpayments, plus interest, compounded semi-annually thereon, from the 
date of each overpayment to the date of redemption. The rate used in 
calculating the interest on the overpayment will be one-eighth of one 
percent above the maximum rate that would have applied to the initial 
subscription had the term of the security been for the shorter period. 
If a note or bond is redeemed before maturity on a date other than a 
scheduled interest payment date, no interest is paid for the fractional 
interest period since the last interest payment date.
    (2) Market charge. An amount shall be deducted from the redemption 
proceeds in all cases where the current Treasury borrowing rate for the 
remaining period to original maturity of the security prematurely 
redeemed exceeds the rate of interest originally fixed for such 
security. You can compute the market charge under this paragraph by 
using the formulas in Appendix A of this part.
    (g) How do I calculate the amount of redemption proceeds for 
subscriptions on or before December 27, 1976? For bonds subscribed for 
on or before December 27, 1976, the amount of the redemption proceeds is 
calculated as follows.
    (1) Interest. The interest for the entire period the bond was 
outstanding shall be re-calculated if the original interest rate at 
which the bond was issued is higher than an adjusted interest rate 
reflecting both the shorter period during which the bond was actually 
outstanding and a penalty. The adjusted interest rate is the Treasury 
rate which would have been in effect on the date of issue for a 
marketable Treasury bond maturing on the semi-annual maturity period 
before redemption reduced by a penalty which must be the lesser of:
    (i) One-eighth of one percent times the number of months from the 
date of issuance to original maturity, divided by the number of full 
months elapsed from the date of issue to redemption; or
    (ii) One-fourth of one percent.
    (2) Deduction. We will deduct from the redemption proceeds, if 
necessary, any overpayment of interest resulting from previous payments 
made at a higher rate based on the original longer period to maturity.



                  Subpart C--Demand Deposit Securities



Sec. 344.7  What are Demand Deposit securities?

    Demand deposit securities are one-day certificates of indebtedness 
that are automatically rolled over each day until you request 
redemption.
    (a) How is a Demand Deposit account established? Each demand deposit 
subscription will establish a unique account.
    (b) How are interest rates determined? Each security shall bear a 
variable rate of interest based on an adjustment of the average yield 
for three-month Treasury bills at the most recent auction. A new rate is 
effective on the first business day following the regular auction of 
three-month Treasury bills and

[[Page 266]]

is shown in the SLGS rate table. Interest is accrued and added to the 
principal daily. Interest is computed on the balance of the principal, 
plus interest accrued through the preceding day.
    (1) How is the interest rate calculated?
    (i) First, you calculate the annualized effective demand deposit 
rate in decimals, designated ``I'' in Equation 1, as follows:
[GRAPHIC] [TIFF OMITTED] TR13SE00.000

    (ii) Then, you calculate the daily factor for the demand deposit 
rate as follows:
[GRAPHIC] [TIFF OMITTED] TR13SE00.001

    (2) Where can I find additional information? Information on the 
estimated average marginal tax rate and costs for administering demand 
deposit SLGS securities, both to be determined by Treasury from time to 
time, will be published in the Federal Register.
    (c) What happens to demand deposit securities during a Debt Limit 
Contingency? At any time the Secretary determines that issuance of 
obligations sufficient to conduct the orderly financing operations of 
the United States cannot be made without exceeding the statutory debt 
limit, we will invest any unredeemed demand deposit securities in 
special ninety-day certificates of indebtedness. Funds invested in the 
ninety-day certificates of indebtedness earn simple interest equal to 
the daily factor in effect at the time demand deposit security issuance 
is suspended, multiplied by the number of days outstanding. When regular 
Treasury borrowing operations resume, the ninety-day certificates of 
indebtedness, at the owner's option, are:
    (1) Payable at maturity;
    (2) Redeemable before maturity, provided funds are available for 
redemption; or
    (3) Reinvested in demand deposit securities.

[[Page 267]]



Sec. 344.8  How do I subscribe for Demand Deposit securities?

    (a) Where do I submit transactions? All subscriptions for purchase, 
cancellation requests, changes to subscriptions and notices of 
redemption must be sent to DSI.
    (b) What requirements apply to subscriptions?
    (1) What form is used to submit a subscription? You must submit an 
electronic or paper Treasury form, PD F 5237, ``Subscription for 
Purchase of U.S. Treasury Securities State and Local Government Series 
One-Day Certificate of Indebtedness Demand Deposit.''
    (2) When is my subscription or cancellation request due in DSI? To 
determine when you must send a subscription or cancellation request, 
follow this table:

------------------------------------------------------------------------
                If:                                 Then:
------------------------------------------------------------------------
(i) The subscription is for:.......  DSI must receive a subscription (or
                                      you can cancel it without
                                      penalty):
------------------------------------------------------------------------
(A) $10 million or less, or........  at least 5 days before the issue
                                      date of the subscription.
------------------------------------------------------------------------
(B) Over $10 million...............  at least 7 days before the issue
                                      date of the subscription.
------------------------------------------------------------------------
(ii) The 5th or 7th day before the   DSI must receive the cancellation
 issue date is a non-business day *   request on the preceding business
 * *.                                 day.
------------------------------------------------------------------------
(iii) DSI receives a subscription    DSI will not accept a subscription.
 more than 60 days before the issue
 date * * *.
------------------------------------------------------------------------

    (3) How do I change a subscription? You can change the principal 
amount to be invested without penalty on or before the issue date, but 
no later than 3:00 p.m., Eastern time, on the issue date. If you submit 
an untimely change, Sec. 344.5(b)(4)(iv) applies.
    (4) What information must be contained on the subscription? The 
subscription must:
    (i) Be dated and signed by an official authorized to make the 
purchase;
    (ii) Include the Taxpayer Identification Number of the issuer; and
    (iii) Specify the principal amount to be invested and the issue 
date.



Sec. 344.9  How do I redeem a Demand Deposit security?

    To redeem a demand deposit security, follow this section.
    (a) When must I notify DSI to redeem a security? To determine when 
you must notify us, follow this table:

------------------------------------------------------------------------
 
-----------------------------------------------------------------------
A security can be redeemed at the    for redemptions of * * *
 owner's option, if DSI receives a
 request for redemption not less
 than * * *.
------------------------------------------------------------------------
(1) 1 business day before the        $10 million or less.
 requested redemption date.
------------------------------------------------------------------------
(2) 3 business days before the       more than $10 million.
 requested redemption date.
------------------------------------------------------------------------


[[Page 268]]

    (b) Can I request partial redemption of a security balance? You may 
request partial redemptions in any amount. If your account balance is 
less than $1,000, it must be redeemed in total.
    (c) Do I have to submit a notice of redemption? Yes. An official 
authorized to redeem the securities must submit an electronic or paper 
Treasury form PD F 5238, ``Request for Redemption of U.S. Treasury 
Securities State and Local Government Series One-Day Certificate of 
Indebtedness Demand Deposit.'' The notice must show the Taxpayer 
Identification Number of the issuer, the Treasury case number, the 
security number and the dollar amount of the securities to be redeemed. 
DSI must receive the notice by 3:00 p.m., Eastern time on the required 
day. You cannot cancel the notice.



               Subpart D--Special Zero Interest Securities



Sec. 344.10  What are Special Zero Interest securities?

    Special zero interest securities were issued as certificates of 
indebtedness and notes. Provisions of subpart B of this part (Time 
Deposit Securities) apply except as specified in subpart D of this part. 
Special zero interest securities were discontinued on October 28, 1996. 
The only zero interest securities available after October 28, 1996, are 
zero interest time deposit securities that are subject to subpart B of 
this part.



Sec. 344.11  How do I redeem a Special Zero Interest Security before maturity?

    Follow the provisions of Sec. 344.6(a)-(g) except that no market 
charge or penalty will apply when you redeem a special zero interest 
security before maturity.

  Appendix A to Part 344--Early Redemption Market Charge Formulas and 
 Examples for Subscriptions From December 28, 1976, Through October 27, 
                                  1996

    (a) The amount of the market charge for bonds and notes subscribed 
for before October 28, 1996 can be determined by the following formula:

[[Page 269]]

[GRAPHIC] [TIFF OMITTED] TR13SE00.002

(b) The application of this formula can be illustrated by the following 
example:
(1) Assume that a $600,000 note is issued on July 1, 1985, to mature on 
July 1, 1995. Interest is payable at a rate of 8% on January 1 and July 
1.
(2) Assume that the note is redeemed on February 1, 1989, and that the 
current borrowing rate for Treasury at that time for the remaining 
period of 6 years and 150 days is 11%.
(3) The increased annual borrowing cost is $18,000. ($600,000)x(11%-8%)
(4) The market charge is computed as follows:

[[Page 270]]

[GRAPHIC] [TIFF OMITTED] TR13SE00.003

[GRAPHIC] [TIFF OMITTED] TR13SE00.004

(c) The amount of the market charge for certificates of indebtedness 
subscribed for before October 28, 1996 can be determined by the 
following formula:

[[Page 271]]

[GRAPHIC] [TIFF OMITTED] TR13SE00.005

    (d) The application of this formula can be illustrated by the 
following example:
    (1) Assume that a $50,000 certificate of indebtedness is issued on 
March 1, 1987, to mature on November 1, 1987. Interest is payable at a 
rate of 10%.
    (2) Assume that the certificate of indebtedness is redeemed on July 
1, 1987, and that the current borrowing cost to Treasury for the 123-day 
period from July 1, 1987, to November 1, 1987, is 11.8%.
    (3) The increased annual borrowing cost is $900. ($50,000) x (11.8%-
10%)
    (4) The market charge is computed as follows:
    [GRAPHIC] [TIFF OMITTED] TR13SE00.006
    
  Appendix B to Part 344--Formula for Determining Redemption Value for 
  Securities Subscribed for and Early-Redeemed On or After October 28, 
                                  1996

    (a) This formula results in a premium or discount to the issuer 
depending on whether the current Treasury borrowing rate at the time of 
early redemption is lower or higher

[[Page 272]]

than the stated interest rate of the early-redeemed SLGS security. The 
total redemption value for bonds and notes can be determined by the 
following two steps. First, calculate accrued interest payable in 
accordance with Sec. 344.6(d)(1) using the following formula:
[GRAPHIC] [TIFF OMITTED] TR13SE00.007

Second, calculate the redemption value per Sec. 344.6(d)(2) using the 
following formula:
[GRAPHIC] [TIFF OMITTED] TR13SE00.008

    (b) The application of this formula can be illustrated by the 
following examples:
    (1) The first example is for a redemption at a premium.
    (i) Assume that an $800,000 2-year note is issued on December 10, 
1996, to mature on December 10, 1998. Interest is payable at a rate of 
7% on June 10 and December 10.
    (ii) Assume that the note is redeemed on October 21, 1997, and that 
the current borrowing rate for Treasury at that time for the remaining 
period of 1 year and 50 days is 6.25%.
    (iii) The redemption value is computed as follows. First, the 
accrued interest payable is calculated as:

[[Page 273]]

[GRAPHIC] [TIFF OMITTED] TR13SE00.009

[GRAPHIC] [TIFF OMITTED] TR13SE00.010

Then, the redemption value is calculated as:

[[Page 274]]

[GRAPHIC] [TIFF OMITTED] TR13SE00.011

    (2) The second example is for a redemption at a discount and it uses 
the same assumptions as the first example, except the current Treasury 
borrowing cost is assumed to be 8.00%:
    (i) Assume that an $800,000 2-year note is issued on December 10, 
1996, to mature on December 10, 1998. Interest is payable at a rate of 
7% on June 10 and December 10.
    (ii) Assume that the note is redeemed on October 21, 1997, and that 
the current borrowing rate for Treasury at that time for the remaining 
period of 1 year and 50 days is 8.00%.

[[Page 275]]

    (iii) The redemption value is computed as follows.
    First, the accrued interest payable is calculated as:
    [GRAPHIC] [TIFF OMITTED] TR13SE00.012
    
Then, the redemption value is calculated as:
[GRAPHIC] [TIFF OMITTED] TR13SE00.013


[[Page 276]]


[GRAPHIC] [TIFF OMITTED] TR13SE00.014

(c) The total redemption value for certificates of indebtedness can be 
determined by the following two steps. First, calculate accrued interest 
payable in accordance with Sec. 344.6(d)(1) using the following formula:
[GRAPHIC] [TIFF OMITTED] TR13SE00.015


[[Page 277]]


Second, calculate the redemption value per Sec. 344.6(d)(2) using the 
following equation:
[GRAPHIC] [TIFF OMITTED] TR13SE00.016

(d) The application of this formula can be illustrated by the following 
examples.
(1) First, for a redemption at a premium:
(i) Assume that a $300,000 security is issued on December 5, 1996, to 
mature in 151 days on May 5, 1997. Interest at a rate of 5% is payable 
at maturity.
(ii) Assume that the security is redeemed on April 9, 1997, and that the 
current borrowing rate for Treasury at that time for the remaining 
period of 26 days is 4.00%.
(iii) The redemption value is computed as follows.
First, the accrued interest payable is calculated as:

[[Page 278]]

[GRAPHIC] [TIFF OMITTED] TR13SE00.017

Then, the redemption value is calculated as:

[[Page 279]]

[GRAPHIC] [TIFF OMITTED] TR13SE00.018

[GRAPHIC] [TIFF OMITTED] TR13SE00.019

(2) Secondly, for a redemption at a discount:
(i) Assume that a $300,000 security is issued on December 5, 1996, to 
mature in 151 days on May 5, 1997. Interest at a rate of 5% is payable 
at maturity.
(ii) Assume that the security is redeemed on April 9, 1997, and that the 
current borrowing rate for Treasury at that time for the remaining 
period of 26 days is 6.25%.
(iii) The redemption value is computed as follows.
First, the accrued interest payable is calculated as:

[[Page 280]]

[GRAPHIC] [TIFF OMITTED] TR13SE00.020

Then, the redemption value is calculated as:

[[Page 281]]

[GRAPHIC] [TIFF OMITTED] TR13SE00.021


[[Page 282]]





PART 345--REGULATIONS GOVERNING 5 PERCENT TREASURY CERTIFICATES OF INDEBTEDNESS--R.E.A. SERIES--Table of Contents




Sec.
345.0  Offering of certificates.
345.1  Description of certificates.
345.2  Subscription for purchase.
345.3  Issue date and payment.
345.4  Redemption/reinvestment.
345.5  Taxation.
345.6  General provisions.

    Authority: 31 U.S.C. 754 and 754b; 5 U.S.C. 301.

    Source: 38 FR 35306, Dec. 27, 1973, unless otherwise noted.



Sec. 345.0  Offering of certificates.

    The Secretary of the Treasury, under the authority of the Second 
Liberty Bond Act, as amended, offers to borrowers from the Rural 
Electrification Administration and Rural Telephone Bank, U.S. Department 
of Agriculture, 5 Percent Treasury Certificates of Indebtedness--R.E.A. 
Series. This offering will continue until terminated by the Secretary of 
the Treasury.



Sec. 345.1  Description of certificates.

    (a) General. The certificates of indebtedness will be issued in 
book-entry form on the books of the Department of the Treasury, Bureau 
of the Public Debt, Washington, DC 20226. They may not be transferred by 
sale, exchange, assignment or pledge, or otherwise.
    (b) Terms and rates of interest. The certificates, bearing interest 
at the rate of 5 percent per annum, will be issued in multiples of 
$1,000 and will mature one year from issue date. Interest on the 
certificates will be computed on an annual basis and, unless redeemed 
prior to maturity, will be payable six months from issue date and at 
maturity. Interest may be paid to an owner by having the amount thereof 
credited by a Federal Reserve Bank or Branch, acting as fiscal agent of 
the United States, to the reserve account of a member bank servicing 
such owner and for the latter's account. Such action will be taken at 
the owner's option. If not exercised, payment of interest will be made 
by Treasury check.

[38 FR 35306, Dec. 27, 1973, as amended at 40 FR 29846, July 16, 1975]



Sec. 345.2  Subscription for purchase.

    The recipient of a 5 percent loan from the Rural Electrification 
Administration or Rural Telephone Bank may subscribe for certificates 
under this offering, up to the amount of the unexpended portion of the 
loan, by submitting a subscription, together with the remittance, to the 
Federal Reserve Bank or Branch of the district in which the subscriber 
is located. The subscription form must show the amount of certificates 
desired, and give the title of the designated official of the subscriber 
authorized to redeem them.

[40 FR 29846, July 16, 1975]



Sec. 345.3  Issue date and payment.

    The issue date of a certificate shall be the date on which the 
subscription form, and funds in full payment therefor, are received by 
the office described in Sec. 345.2. A confirmation of the issuance, in 
the form of a written advice, which shall specify the amount and 
describe the certificates by title and maturity date, shall be issued to 
the subscriber.



Sec. 345.4  Redemption/reinvestment.

    (a) At maturity. A certificate may not be called for redemption by 
the Secretary of the Treasury prior to maturity except when the amount 
of the unexpended portion of the loan from the Rural Electrification 
Administration or Rural Telephone Bank is less than the face amount of 
the certificate. Unless the Treasury has received from the owner, at 
least one week prior to the maturity date of a certificate, a written 
request for payment at maturity, it shall automatically redeem the same 
at maturity, and reinvest in the owner's name the principal amount in a 
new certificate having the same description in all material respects as 
the one redeemed. No such automatic reinvestment shall be made, however, 
in excess of the amount of the unexpended portion of the loan from the 
Rural Electrification Administration or the Rural Telephone Bank.
    (b) Prior to maturity. A certificate may be redeemed prior to 
maturity at par and accrued interest at the owner's option on one week's 
notice in writing after one month from the issue date. A

[[Page 283]]

certificate issued upon reinvestment, as provided in paragraph (a) of 
this section, shall not be subject to the one-month holding period. A 
notice to redeem a certificate prior to its maturity date must be given 
by the official authorized to redeem it, as shown in the subscription 
for purchase, to the Bureau of the Public Debt, Division of Securities 
Operations, Washington, DC 20226, by letter or wire.



Sec. 345.5  Taxation.

    The income derived from the certificates is subject to all taxes 
imposed under the Internal Revenue Code of 1954. The certificates are 
subject to estate, inheritance, gift or other excise taxes, whether 
Federal or State, but are exempt from all taxation now or hereafter 
imposed on the principal or interest thereof by any State or any of the 
possessions of the United States, or by any local taxing authority.

[40 FR 29846, July 16, 1975]



Sec. 345.6  General provisions.

    (a) Regulations. Five Percent Treasury Certificates of Indebtedness-
-R.E.A. Series shall be subject to the general regulations with respect 
to United States securities, which are set forth in the Department of 
the Treasury Circular No. 300, current revision (31 CFR part 306), to 
the extent applicable. Copies of the circular may be obtained from the 
Bureau of the Public Debt, Department of the Treasury, Washington, DC 
20226, or a Federal Reserve Bank or Branch.
    (b) Reservations. The Secretary of the Treasury reserves the right 
to reject any application for the purchase of certificates hereunder, in 
whole or in part, and to refuse to issue or permit to be issued any such 
certificates in any case or any class or classes of cases if he deems 
such action to be in the public interest, and his action in any such 
respect shall be final. The Secretary of the Treasury may also at any 
time, or from time to time, supplement or amend the terms of these 
regulations, or of any amendments or supplements thereto.

[38 FR 35306, Dec. 27, 1973. Redesignated at 40 FR 29846, July 16, 1975]



PART 346--REGULATIONS GOVERNING UNITED STATES INDIVIDUAL RETIREMENT BONDS--Table of Contents




Sec.
346.0  Offering of bonds.
346.1  Description of bonds.
346.2  Registration.
346.3  Purchase of bonds.
346.4  Proof of purchase.
346.5  Limitation on holdings.
346.6  Nontransferability.
346.7  Judicial proceedings.
346.8  Payment or redemption during lifetime of owner.
346.9  Payment or redemption after death of owner.
346.10  Reissue.
346.11  Use of power of attorney.
346.12  Lost, stolen, or destroyed bonds.
346.13  Taxation.
346.14  Certifying officers.
346.15  General provisions.

Appendix to Part 346--Tables

    Authority: Sec. 2002, Pub. L. 93-406, 88 Stat. 958 (31 U.S.C. 738a, 
752, 754b); 5 U.S.C. 301.

    Source: 40 FR 4240, Jan. 28, 1975, unless otherwise noted.



Sec. 346.0  Offering of bonds.

    The Secretary of the Treasury, under the authority of the Second 
Liberty Bond Act, as amended, and pursuant to the Employee Retirement 
Income Security Act of 1974, offers for sale, beginning January 1, 1975, 
bonds of the United States, designated as United States Individual 
Retirement Bonds. The bonds will be available for investment only to 
individuals eligible to make deductions on their Federal income tax 
returns for retirement savings, as provided in section 2002 of the 
latter Act. This offering of bonds will terminate on April 30, 1982.

[40 FR 4240, Jan. 28, 1975, as amended at 47 FR 18596, Apr. 30, 1982]



Sec. 346.1  Description of bonds.

    (a) Investment yield (interest). United States Individual Retirement 
Bonds, hereinafter sometimes referred to as Individual Retirement Bonds, 
will be issued at par. The investment yields (interest) are as follows:
    (1) Bonds with issue dates of January 1, 1975, through July 1, 1979-
-6 percent per annum, compounded semiannually

[[Page 284]]

(see Table of Redemption Values in the appendix).
    (2) Bonds with issue dates of August 1, 1979, through October 1, 
1980--6.5. percent per annum, compounded semiannually (see Table A in 
the appendix).
    (3) Bonds with issue dates of November 1, 1980, through September 1, 
1981--8 percent per annum, compounded semiannually (see Table B).
    (4) Bonds with issue dates of October 1, 1981, or thereafter--9 
percent per annum, compounded semiannually (see Table C).

Interest will be paid only upon redemption of the bonds. The accrual of 
interest will continue until the bonds are redeemed or have reached 
maturity, whichever is earlier, in accordance with these regulations.
    (b) Term. The maturity date of any bond issued under this circular 
shall be the first day of the month in which the registered owner 
thereof has attained the age of 70\1/2\ years, or five years after the 
date of his death, but no later than the first day of the month in which 
he would have attained the age of 70\1/2\ years, if he had lived. Unless 
sooner redeemed in accordance with these regulations, the investment 
yield on a bond will cease on the interest accrual date coinciding with, 
or, where no such coincidence occurs, the interest accrual date next 
preceding:
    (1) The first day of the seventh (7th) month following the 70th 
anniversary of the birth of the person in whose name it is registered, 
or
    (2) The first day of the sixtieth (60th) month following the date of 
death of the person in whose name it is registered, except that such 
date shall be no later than the date on which he would have attained the 
age of 70\1/2\ years, had he lived.
    (c) Denominations--issue date. Individual Retirement Bonds will be 
available only in registered form and in denominations of $50, $75, $100 
and $500. At the time of issue, the issuing agent will enter in the 
upper right-hand portion of the bond the issue date (which shall be the 
first day of the month and year in which payment of the purchase price 
is received by an authorized issuing agent), and will imprint the 
agent's validating stamp in the lower right-hand portion. The issue 
date, as distinguished from the date in the agent's validating stamp, 
will determine the date from which interest will begin to accrue on the 
bond. An Individual Retirement Bond shall be valid only if an authorized 
issuing agent receives payment therefor, duly inscribes, dates, stamps, 
and delivers it.

[40 FR 4240, Jan. 28, 1975, as amended at 42 FR 37520, July 21, 1977; 46 
FR 60577, Dec. 11, 1981]



Sec. 346.2  Registration.

    (a) General. The registration of Individual Retirement Bonds is 
limited to the names of natural persons in their own right, whether 
adults or minors, in either single ownership or beneficiary form. A bond 
registered in the beneficiary form will be inscribed substantially as 
follows (for example): ``John A. Doe payable on death to (or P.O.D.) 
Richard B. Roe.'' No more than one beneficiary may be designated on a 
bond.
    (b) Inscription. The inscription on the face of each bond will show 
the name, address, date of birth, and the social security account number 
of the registered owner. The name of the beneficiary, if one is to be 
designated, together with his social security account number, where 
available, will also be shown in the inscription.



Sec. 346.3  Purchase of bonds.

    (a) Agencies. Individual Retirement Bonds may be purchased over-the-
counter or by mail from Federal Reserve Banks and Branches and the 
Bureau of the Public Debt, Securities Transactions Branch, Washington, 
DC 20226. Customers of commercial banks and trust companies may be able 
to arrange for the purchase of the bonds through such institutions, but 
only the Federal Reserve Banks and Branches, and the Department of the 
Treasury itself, are authorized to issue the securities. The date of 
receipt of the application and payment by such issuing agencies will 
govern the dating of the bonds issued.
    (b) Applications. Applications for the purchase of Individual 
Retirement Bonds should be made on Form PD 4345, accompanied by a 
remittance to cover the purchase price. Personal

[[Page 285]]

checks will be accepted, subject to collection. Checks, or other forms 
of exchange, should be drawn to the order of the Federal Reserve Bank or 
the U.S. Treasury, as the case may be. Checks payable by endorsement are 
not acceptable.
    (c) Delivery. Delivery of bonds will be made in person, or by mail 
at the risk and expense of the United States at the address given by the 
purchaser, but only within the United States, its territories and 
possessions, the Commonwealth of Puerto Rico, and the Canal Zone. No 
mail deliveries elsewhere will be made. If the registered owner 
temporarily resides abroad, the bonds will be delivered to such address 
in the United States as the purchaser directs.



Sec. 346.4  Proof of purchase.

    At the time an Individual Retirement Bond is issued, the issuing 
agent will furnish therewith to the purchaser a copy of Form PD 4345 for 
the purchaser's personal records. The form will show the name and 
address of the registered owner, his date of birth, social security 
account number, the number of bonds issued, a description thereof by 
issue date, serial numbers, denominations, and registration.



Sec. 346.5  Limitation on holdings.

    (a) Except as provided in paragraph (b) of this section, the amount 
of Individual Retirement Bonds which may be registered in any one 
individual's name is limited to the amount for which an annual deduction 
may be taken under either section 219 or 220 of the Internal Revenue 
Code.\1\ These limitations are as follows:
---------------------------------------------------------------------------

    \1\ Note: Under the Internal Revenue Code, bonds issued during any 
given year or within 45 days thereafter may be deducted in that year.
---------------------------------------------------------------------------

    (1) In the case of an individual electing to deduct his or her bond 
purchase under section 219, the face amount of bonds purchased for tax 
deduction in any given year may not exceed 15 percent of the 
individual's earned income for that year or $1,500, whichever is less.
    (2) In the case of an individual electing to deduct his or her bond 
purchases under section 220, the total face amount of bonds purchased 
for tax deduction in any given year in the name of the individual and in 
the name of his or her nonworking spouse, may not exceed 15 percent of 
the working spouse's earned income for that year or $1,750, whichever is 
less.\2\
---------------------------------------------------------------------------

    \2\ Note: Code section 220 requires, in effect, that the total IRA 
contributions in each spouse's name to be deducted in any one year be in 
equal amounts. While it is permissible for an eligible married couple to 
utilize several different forms of IRA investments within the same year, 
this means that couples investing solely in bonds must purchase equal 
amounts of bonds in each spouse's name.
---------------------------------------------------------------------------

    (b) The above limitations do not apply to rollover bond purchases, 
as described in sections 402(a)(5), 403(a)(4), or 408(d)(3) of the 
Internal Revenue Code.

(26 U.S.C. 220 and 31 U.S.C. 757)

[42 FR 37520, July 21, 1977]



Sec. 346.6  Nontransferability.

    United States Individual Retirement Bonds are not transferable, and 
may not be sold, discounted or pledged as collateral for a loan or as 
security for the performance of an obligation, or for any other purpose.



Sec. 346.7  Judicial proceedings.

    No judicial determination will be recognized which would give effect 
to an attempted voluntary transfer inter vivos of an Individual 
Retirement Bond. Otherwise, a claim against a registered owner will be 
recognized when established by valid judicial proceedings, but in no 
case will payment be made to the purchaser at a sale under a levy or to 
the officer authorized to levy upon the property of the owner under 
appropriate process to satisfy a money judgment unless or until the bond 
has become eligible for authorized redemption pursuant to these 
regulations. Neither the Department of the Treasury nor any of its 
agencies will accept notices of adverse claims or of pending judicial 
proceedings or undertake to protect the interests of litigants who do 
not have possession of the bond.

[[Page 286]]



Sec. 346.8  Payment or redemption during lifetime of owner.

    (a) During first 12 months of issue date. An Individual Retirement 
Bond is redeemable at any time during the first twelve (12) months of 
its issue date. No interest will be paid on any bond so redeemed.
    (b) Prior to age 59\1/2\--(1) With penalty. Unless redeemed within 
twelve months of its issue, or except as provided under paragraphs 
(b)(2) and (c)(2) of this section, if an Individual Retirement Bond is 
cashed by its owner before he attains age 59\1/2\, he must include on 
his Federal income tax return for the year of redemption the value of 
the bond. In addition, there is an additional income tax equal to 10 
percent of the value of the bond imposed by section 409(c) of the 
Internal Revenue Code of 1954.
    (2) In case of disability. An Individual Retirement Bond will be 
paid at its then current redemption value upon a registered owner's 
request (or by a person recognized as entitled to act on his behalf) 
prior to his attainment of age 59\1/2\ years upon submission of a 
physician's statement or any similar evidence showing that the owner has 
become disabled to such an extent that he is unable to engage in any 
substantial, gainful activity by reason of any medically determinable 
physical or mental impairment which can be expected to result in death 
or to be of long-continued and indefinite duration. The following are 
examples of impairments which would ordinarily be considered as 
preventing substantial, gainful activity:
    (i) Loss of use of two limbs.
    (ii) Certain progressive diseases which have resulted in the 
physical loss or atrophy of a limb, such as diabetes, multiple 
sclerosis, or Buerger's disease.
    (iii) Disease of the heart, lungs, or blood vessels which have 
resulted in major loss of heart or lung reserve as evidenced by X-ray, 
electrocardiogram, or other objective findings, so that despite medical 
treatment breathlessness, pain, or fatigue is produced on slight 
exertion, such as walking several blocks, using public transportation, 
or doing small chores.
    (iv) Cancer which is inoperable and progressive.
    (v) Damage to the brain or brain abnormality which has resulted in 
severe loss of judgment, intellect, orientation, or memory.
    (vi) Mental diseases (e.g., psychosis or severe psychoneurosis) 
requiring continued institutionalization or constant supervision of the 
individual.
    (vii) Loss or diminution of vision to the extent that the effected 
individual has a central visual acuity of not better than 20/200 in the 
better eye after best correction, or has a limitation in the fields of 
vision such that the widest diameter of the visual fields subtends an 
angle no greater than 20 degrees.
    (viii) Permanent and total loss of speech.
    (ix) Total deafness uncorrectible by a hearing aid.

In any case coming under the provisions hereof, the evidence referred to 
above must be submitted to the Bureau of the Public Debt, Division of 
Transactions and Rulings, Parkersburg, WV 26101, for approval before any 
bonds may be paid. If, after review of the evidence, the Secretary of 
the Treasury is satisfied that the owner's disability has been 
established a letter will be furnished authorizing payment of his 
Individual Retirement Bonds. This letter must be presented each time any 
of the owner's bonds are submitted for payment to a Federal Reserve Bank 
or Branch or to the Department of the Treasury.
    (c) Prior to age 70\1/2\--(1) General. An Individual Retirement Bond 
will be redeemable at its current redemption value upon the request of 
the registered owner (or a person recognized as entitled to act on his 
behalf), provided he is 59\1/2\ years of age or older. The owner's age 
will be determined from the date of birth shown on the face of the bond, 
provided, however, that the Secretary of the Treasury reserves the right 
in any case or class of cases to require proof, in the form of a duly 
certified copy of his birth certificate, that the owner has attained the 
age of 59\1/2\ years. If such evidence is unavailable, one of the 
following documents may be furnished in lieu thereof:
    (i) Church records of birth or baptism
    (ii) Hospital birth record or certificate

[[Page 287]]

    (iii) Physician's or midwife's birth record
    (iv) Certification of Bible or other family records
    (v) Military, naturalization or immigration records
    (vi) Other evidence of probative value.

Similar documentary evidence will also be required to support any claim 
made by an owner that the date of birth shown on his bond is incorrect.
    (2) For change of investment. Under section 409(b)(3)(c) of the 
Internal Revenue Code, if an Individual Retirement Plan Bond is cashed 
at any time before the end of the taxable year in which the owner 
attains age 70\1/2\, and the entire redemption proceeds are transferred 
to an individual retirement account, an individual annuity, an 
employees' trust, or annuity plan, as described in sections 408(a), 
408(b), 401(a) and 403(a), respectively, of the Internal Revenue Code, 
on or before the 60th day after receipt of such proceeds, they shall be 
excluded from gross income and the transfer shall be treated as a 
rollover contribution described in section 408(d)(3) of the Internal 
Revenue Code.
    (d) Requests for payment--(1) By owner. When redemption of any 
Individual Retirement Bond is desired by the registered owner, it should 
be presented, with the request for payment on the back of the bond 
signed and duly certified, to a Federal Reserve Bank or Branch or to the 
Bureau of the Public Debt, Securities Transactions Branch, Washington, 
DC 20226. If payment is requested on account of disability, the letter 
described in paragraph (b)(2) of this section should accompany the 
bond.\3\
---------------------------------------------------------------------------

    \3\ In any case in which a legal representative has not been 
appointed for the estate of a registered owner who has attained the age 
of 59\1/2\ years, or who has become disabled, a person seeking payment 
of a bond on the owner's behalf should furnish a complete statement of 
the circumstances to the Bureau of the Public Debt, Division of 
Securities Operations, Washington, DC 20226. Appropriate instructions 
will then be furnished.
---------------------------------------------------------------------------

    (2) By person other than owner. When redemption of any Individual 
Retirement Bond is desired by the legal guardian, committee, 
conservator, or similar representative of the owner's estate, it should 
be presented, with the request signed as described below, to a Federal 
Reserve Bank or Branch or to the Department of the Treasury. If payment 
is requested on account of disability, the letter described in paragraph 
(b) (2) of this section should accompany the bond.\3\ The request for 
payment, in either case, should be signed by the representative in his 
fiduciary capacity before an authorized certifying officer, and must be 
supported by a certificate or a certified copy of the letters of 
appointment from the court making the appointment, under seal, or other 
proof of qualification if the appointment was not made by a court. 
Except in the case of corporate fiduciaries, such evidence should state 
that the appointment is in full force and should be dated not more than 
one year prior to the presentation of the bond for payment.
    (e) Partial redemption. An Individual Retirement Bond in a 
denomination greater than $50 (face value), which is otherwise eligible 
for redemption, may be redeemed in part, at current redemption value, 
upon the request of the registered owner (or a person recognized as 
entitled to act on his behalf), but only in amounts corresponding to 
authorized denominations. In any case in which partial redemption is 
desired, before the request for payment is signed, the phrase ``to the 
extent of $---- (face value) and reissue of the remainder'' should be 
appended to the request. Upon partial redemption of the bond, the 
remainder will be reissued as of the original issue date. No partial 
redemption of a bond will be made after the death of the owner in whose 
name it is registered.

(26 U.S.C. 220 and 31 U.S.C. 757)

[40 FR 4240, Jan. 28, 1975, as amended at 42 FR 37520, July 21, 1977]



Sec. 346.9  Payment or redemption after death of owner.

    (a) Order of precedence where owner not survived by beneficiary. If 
the registered owner of an Individual Retirement Bond dies before it has 
been presented and surrendered for payment, and there is no beneficiary 
shown thereon, or if the designated beneficiary predeceased the owner, 
the bond

[[Page 288]]

shall be paid in the following order of precedence:
    (1) To the duly appointed executor or administrator of the estate of 
the owner, who should sign the request for payment on the back of the 
bond in his representative capacity before an authorized certifying 
officer, such request to be supported by a court certificate or a 
certified copy of his letters of appointment, under seal of the court, 
which should show that the appointment is in full force and effect, and 
be dated within six months of its presentation;
    (2) If no legal representative of the deceased registered owner's 
estate has been or will be appointed, to the widow or widower of the 
owner;
    (3) If none of the above, to the child or children of the owner and 
the descendants of deceased children by representation;
    (4) If none of the above, to the parents of the owner, or the 
survivor of them;
    (5) If none of the above, to other next-of-kin of the owner, as 
determined by the laws of the domicile of such owner at the time of his 
death.

In any case coming under the provisions of this paragraph, a duly 
certified copy of the registered owner's death certificate will 
ordinarily be required. Proof of death of the beneficiary, if any, will 
be required where he predeceased the owner. Payment of bonds under 
paragraph (a)(1) of this section will be made by a Federal Reserve Bank 
or by the Bureau of the Public Debt, Securities Transactions Branch, 
Washington, DC 20226. Payment of bonds under paragraphs (a) (2) through 
(5) of this section will be made upon receipt of applications on Form PD 
3565-1, together with the bonds and supporting evidence, by the Bureau 
of the Public Debt, Division Transactions and Rulings, Parkersburg, WV 
26101.
    (b) Order of precedence where beneficiary survived owner. If the 
registered owner of an Individual Retirement Bond dies before it has 
been presented and surrendered for payment, and the beneficiary shown 
thereon survived the owner, the bond shall be paid in the following 
order of precedence:
    (1) To the designated beneficiary upon his presentation and 
surrender of the bond with the request for payment signed and duly 
certified;
    (2) If the designated beneficiary survived the registered owner but 
failed to present the bond for payment during his own lifetime, payment 
will be made in the order of precedence specified in paragraphs (a) (1) 
through (5) of this section to the legal representative, surviving 
spouse, children, parents, or next-of-kin of such beneficiary, and in 
the manner provided therein.

In any case coming under the provisions of this subsection, a duly 
certified copy of the registered owner's death certificate will 
ordinarily be required. Proof of death of the beneficiary will also be 
required where he survived the owner but failed to present the bond for 
payment during his own lifetime. Payment of a bond to a designated 
beneficiary will be made by a Federal Reserve Bank or by the Bureau of 
the Public Debt, Securities Transactions Branch, Washington, DC 20226.
    (c) Ownership of redemption proceeds. The orders of precedence set 
forth in paragraphs (a) and (b) of this section, except in cases where 
redemption is made for the account of a registered owner, are for the 
Department's convenience in discharging its obligation on an Individual 
Retirement Bond. The discharge of the obligation in accordance therewith 
shall be final so far as the Department is concerned, but those 
provisions do not otherwise purport to determine ownership of the 
redemption proceeds of a bond.

(26 U.S.C. 220 and 31 U.S.C. 757)

[40 FR 4240, Jan. 28, 1975, as amended at 42 FR 37520, July 21, 1977]



Sec. 346.10  Reissue.

    (a) Addition or change of beneficiary. An Individual Retirement Bond 
will be reissued to add a beneficiary in the case of a single ownership 
bond, or to eliminate or substitute a beneficiary in the case of a bond 
registered in beneficiary form upon the owner's request on Form PD 3564. 
No consent will be required to support any reissue transaction from a 
beneficiary whose name is to be removed from the registration of an 
Individual Retirement Bond. If the registered owner dies after the

[[Page 289]]

bond has been presented and surrendered for reissue, upon receipt of 
notice thereof by the agency to which the request for reissue was 
submitted, such request shall be treated as ineffective, provided the 
notice of death is received by the Federal Reserve Bank or the Bureau of 
the Public Debt, Division of Transactions and Rulings, Parkersburg, WV 
26101, to which the request was sent, in sufficient time to withhold 
delivery, by mail or otherwise, of the reissued bond.
    (b) Error in issue--change of name. Reissue of an Individual 
Retirement Bond will be made where an error in issue has occurred, as 
well as in cases where the owner's name has been changed by marriage, 
divorce, annulment, order of court, or in any other legal manner upon an 
appropriate request. Information as to the procedure to be followed in 
securing such reissue may be obtained from a Federal Reserve Bank or the 
Bureau of the Public Debt, Division of Transactions and Rulings, 
Parkersburg, WV 26101.

(26 U.S.C. 220 and 31 U.S.C. 757)

[40 FR 4240, Jan. 28, 1975, as amended at 42 FR 37520, July 21, 1977]



Sec. 346.11  Use of power of attorney.

    No designation of an attorney, agent, or other representative to 
request payment or reissue on behalf of the owner, beneficiary, or other 
person entitled under Sec. 346.9, other than as provided in these 
regulations, will be recognized.



Sec. 346.12  Lost, stolen, or destroyed bonds.

    If an Individual Retirement Bond is lost, stolen, or destroyed, 
relief will be granted upon identification of the bond and proof of its 
loss, theft, or destruction. A description of the bond by denomination, 
serial number, issue date and registration should be furnished at the 
time the report of loss, theft, or destruction is made. Such reports 
should be sent to the Bureau of the Public Debt, Division of 
Transactions and Rulings, Parkersburg, WV 26101. Full instructions for 
obtaining substitute bonds, or payment, in appropriate cases, will then 
be given.

(26 U.S.C. 220 and 31 U.S.C. 757)

[40 FR 4240, Jan. 28, 1975, as amended at 42 FR 37520, July 21, 1977]



Sec. 346.13  Taxation.

    The tax treatment provided under section 409 of the Internal Revenue 
Code of 1954, as amended, shall apply to all Individual Retirement 
Bonds. The bonds are subject to estate, inheritance, or other excise 
taxes, whether Federal or State, but are exempt from all taxation now or 
hereafter imposed on the principal or interest thereof by any State, 
municipality, or any local taxing authority. Inquiry concerning the 
application of any Federal tax to these bonds should be directed to the 
District Director of Internal Revenue for the district in which the 
taxpayer resides.



Sec. 346.14  Certifying officers.

    Officers authorized to certify requests for payment or for any other 
transaction involving Individual Retirement Bonds include:
    (a) Post offices. Any postmaster, acting postmaster, or inspector-
in-charge, or other post office official or clerk designated for that 
purpose. A post office official or clerk, other than a postmaster, 
acting postmaster, or inspector-in-charge, should certify in the name of 
the postmaster or acting postmaster, followed by his own signature and 
official title. Signatures of these officers should be authenticated by 
a legible imprint of the post office dating stamp.
    (b) Banks and trust companies. Any officer of a Federal Reserve Bank 
or Branch, or of a bank or trust company chartered under the laws of the 
United States or those of any State, Commonwealth, or Territory of the 
United States, as well as any employees of such bank or trust company 
expressly authorized to act for that purpose, who should sign over the 
title ``Designated Employee.'' Certifications by any of these officers 
or designated employees should be authenticated by either a legible 
imprint of the corporate seal,

[[Page 290]]

or, where the institution is an authorized issuing agent for United 
States Savings Bonds, Series E, by a legible imprint of its dating 
stamp.
    (c) Issuing agents of Series E savings bonds. Any officer of a 
corporation or any other organization which is an authorized issuing 
agent for United States Savings Bonds, Series E. All certifications by 
such officers must be authenticated by a legible imprint of the issuing 
agent's dating stamp.
    (d) Foreign countries. In a foreign country requests may be signed 
in the presence of and be certified by any United States diplomatic or 
consular representative, or the manager or other officer of a foreign 
branch of a bank or trust company incorporated in the United States 
whose signature is attested by an imprint of the corporate seal or is 
certified to the Department of the Treasury. If such an officer is not 
available, requests may be signed in the presence of and be certified by 
a notary or other officer authorized to administer oaths, but his 
official character and jurisdiction should be certified by a United 
States diplomatic or consular officer under seal of his office.
    (e) Special provisions. The Commissioner of the Public Debt, or his 
delegate, or any Federal Reserve Bank or Branch is authorized to make 
special provision for certification in any particular case or class of 
cases where none of the officers authorized above is readily accessible.



Sec. 346.15  General provisions.

    (a) Regulations. All Individual Retirement Bonds shall be subject to 
the general regulations prescribed by the Secretary with respect to 
United States securities, which are set forth in Department of the 
Treasury Circular No. 300, current revision, to the extent applicable. 
Copies of the general regulations may be obtained upon request from any 
Federal Reserve Bank or the Department of the Treasury.
    (b) Reservation as to issue of bonds. The Secretary of the Treasury 
reserves the right to reject any application for the purchase of 
Individual Retirement Bonds, in whole or in part, and to refuse to issue 
or permit to be issued any such bonds in any case or any class or 
classes of cases if he deems such action to be in the public interest, 
and his action in any such respect shall be final.
    (c) Additional requirements. In any case or any class of cases 
arising under this circular, the Secretary of the Treasury may require 
such additional evidence as may in his judgment be necessary, and may 
require a bond of indemnity, with or without surety, where he may 
consider such bond necessary for the protection of the United States.
    (d) Waiver of requirements. The Secretary of the Treasury reserves 
the right, in his discretion, to waive or modify any provision or 
provisions of this circular in any particular case or class of cases for 
the convenience of the United States, or in order to relieve any person 
or persons of unnecessary hardship, if such action is not inconsistent 
with law, does not impair any existing rights, and he is satisfied that 
such action would not subject the United States to any substantial 
expense or liability.
    (e) Fiscal agents. Federal Reserve Banks and Branches, as fiscal 
agents of the United States, are authorized to perform such services as 
may be requested of them by the Secretary of the Treasury in connection 
with the issue, delivery, redemption, reissue, and payment of Individual 
Retirement Bonds.
    (f) Reservation as to terms of circular. The Secretary of the 
Treasury may at any time, or from time to time, supplement or amend the 
terms of this circular, or any amendments or supplements thereto.

[[Page 291]]

                      Appendix to Part 346--Tables

  Table of Redemption Values Providing an Investment Yield of 6 Percent
    per Annum for Bonds Bearing Issue Dates Beginning January 1, 1975
  Note: This table shows how Individual Retirement Bonds bearing issue
     dates on or after January 1, 1975, by denomination, increase in
   redemption value during the successive half-year periods following
       issue. The redemption values provide an investment yield of
   approximately 6 pct/annum, compounded semiannually, on the purchase
   price from issue date to the beginning of each half-year period. No
increase in redemption value is shown, however, until 1 year after issue
 date since no interest may be paid on bonds redeemed before that time.
  The period to maturity is fixed in accordance with the provisions of
                    Sec.  346.1(b) of this circular.
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (values increase on first day of
                                              period shown)
                                ----------------------------------------
                                  $50.00    $75.00    $100.00   $500.00
------------------------------------------------------------------------
1st............................    $50.00    $75.00   $100.00    $500.00
1 to 1\1/2\....................     53.05     79.57    106.10     530.50
1\1/2\ to 2....................     54.64     81.95    109.28     546.40
2 to 2\1/2\....................     56.28     84.41    112.56     562.80
2\1/2\ to 3....................     57.96     86.95    115.92     579.60
3 to 3\1/2\....................     59.70     89.55    119.40     597.00
3\1/2\ to 4....................     61.49     92.24    122.98     614.90
4 to 4\1/2\....................     63.34     95.01    126.68     633.40
4\1/2\ to 5....................     65.24     97.86    130.48     652.40
5 to 5\1/2\....................     67.20    100.79    134.40     672.00
5\1/2\ to 6....................     69.21    103.82    138.42     692.10
6 to 6\1/2\....................     71.29    106.93    142.58     712.90
6\1/2\ to 7....................     73.43    110.14    146.86     734.30
7 to 7\1/2\....................     75.63    113.44    151.26     756.30
7\1/2\ to 8....................     77.90    116.85    155.80     779.00
8 to 8\1/2\....................     80.24    120.35    160.48     802.40
8\1/2\ to 9....................     82.64    123.96    165.28     826.40
9 to 9\1/2\....................     85.12    127.68    170.24     851.20
9\1/2\ to 10...................     87.68    131.51    175.36     876.80
10 to 10\1/2\..................     90.31    135.46    180.62     903.10
10\1/2\ to 11..................     93.01    139.52    186.02     930.10
11 to 11\1/2\..................     95.81    143.71    191.62     958.10
11\1/2\ to 12..................     98.68    148.02    197.36     986.80
12 to 12\1/2\..................    101.64    152.46    203.28   1,016.40
12\1/2\ to 13..................    104.69    157.03    209.38   1,046.90
13 to 13\1/2\..................    107.83    161.74    215.66   1,078.30
13\1/2\ to 14..................    111.06    166.60    222.12   1,110.60
14 to 14\1/2\..................    114.40    171.59    228.80   1,144.00
14\1/2\ to 15..................    117.83    176.74    235.66   1,178.30
15 to 15\1/2\..................    121.36    182.04    242.72   1,213.60
15\1/2\ to 16..................    125.00    187.51    250.00   1,250.00
16 to 16\1/2\..................    128.75    193.13    257.50   1,287.50
16\1/2\ to 17..................    132.62    198.93    265.24   1,326.20
17 to 17\1/2\..................    136.60    204.89    273.20   1,366.00
17\1/2\ to 18..................    140.69    211.04    281.38   1,406.90
18 to 18\1/2\..................    144.91    217.37    289.82   1,449.10
18\1/2\ to 19..................    149.26    223.89    298.52   1,492.60
19 to 19\1/2\..................    153.74    230.61    307.48   1,537.40
19\1/2\ to 20..................    158.35    237.53    316.70   1,583.50
20 to 20\1/2\..................    163.10    244.65    326.20   1,631.00
------------------------------------------------------------------------


  Table A--Table of Redemption Values Providing an Investment Yield of
 6.50 Percent per Annum for Bonds Bearing Issue Dates Beginning Aug. 1,
                                  1979
  Note: This table shows how Individual Retirement Bonds bearing issue
     dates on or after August 1, 1979, by denomination, increase in
   redemption value during the successive half-year periods following
       issue. The redemption values provide an investment yield of
  approximately 6.50 percent per annum, compounded semiannually, on the
    purchase price from issue date to the beginning of each half-year
 period. No increase in redemption value is shown, however, until 1 year
 after issue date since no interest may be paid on bonds redeemed before
    that time. The period to maturity is fixed in accordance with the
             provisions of Sec.  346.1(b) of this circular.
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (values increase on first day of
                                              period shown)
                                ----------------------------------------
                                    $50       $75      $100       $500
------------------------------------------------------------------------
1st............................    $50.00    $75.00   $100.00    $500.00
1 to 1\1/2\....................     53.30     79.95    106.60     533.00
1\1/2\ to 2....................     55.04     82.56    110.08     550.40
2 to 2\1/2\....................     56.82     85.23    113.64     568.20
2\1/2\ to 3....................     58.68     88.02    117.36     586.80
3 to 3\1/2\....................     60.58     90.87    121.16     605.80
3\1/2\ to 4....................     62.54     93.81    125.08     625.40
4 to 4\1/2\....................     64.58     96.87    129.16     645.80
4\1/2\ to 5....................     66.68    100.02    133.36     666.80
5 to 5\1/2\....................     68.84    103.26    137.68     688.40
5\1/2\ to 6....................     71.08    106.62    142.16     710.80
6 to 6\1/2\....................     73.40    110.10    146.80     734.00
6\1/2\ to 7....................     75.78    113.67    151.56     757.80
7 to 7\1/2\....................     78.24    117.36    156.48     782.40
7\1/2\ to 8....................     80.78    121.17    161.56     807.80
8 to 8\1/2\....................     83.40    125.10    166.80     834.00
8\1/2\ to 9....................     86.12    129.18    172.24     861.20
9 to 9\1/2\....................     88.92    133.38    177.84     889.20
9\1/2\ to 10...................     91.80    137.70    183.60     918.00
10 to 10\1/2\..................     94.80    142.20    189.60     948.00
10\1/2\ to 11..................     97.88    146.82    195.76     978.80
11 to 11\1/2\..................    101.06    151.59    202.12   1,010.60
11\1/2\ to 12..................    104.34    156.51    208.68   1,043.40
12 to 12\1/2\..................    107.72    161.58    215.44   1,077.20
12\1/2\ to 13..................    111.22    166.83    222.44   1,112.20
13 to 13\1/2\..................    114.84    172.26    229.68   1,148.40
13\1/2\ to 14..................    118.58    177.87    237.16   1,185.80
14 to 14\1/2\..................    122.44    183.66    244.88   1,224.40
14\1/2\ to 15..................    126.42    189.63    252.84   1,264.20
15 to 15\1/2\..................    130.52    195.78    261.04   1,305.20
15\1/2\ to 16..................    134.76    202.14    269.52   1,347.60
16 to 16\1/2\..................    139.14    208.71    278.28   1,391.40
16\1/2\ to 17..................    143.66    215.49    287.32   1,436.60
17 to 17\1/2\..................    148.34    222.51    296.68   1,483.40
17\1/2\ to 18..................    153.16    229.74    306.32   1,531.60
18 to 18\1/2\..................    158.12    237.18    316.24   1,581.20
18\1/2\ to 19..................    163.26    244.89    326.52   1,632.60
19 to 19\1/2\..................    168.58    252.87    337.16   1,685.80
19\1/2\ to 20..................    174.06    261.09    348.12   1,740.60
20 to 20\1/2\..................    179.72    269.58    359.44   1,797.20
------------------------------------------------------------------------


[[Page 292]]


  Table B--Table of Redemption Values Providing an Investment Yield of
 8.00 Percent Per Annum for Bonds Bearing Issue Dates Beginning November
                                 1, 1980
  Note: This table shows how Individual Retirement Bonds bearing issue
    dates on or after November 1, 1980, by denomination, increase in
   redemption value during the successive half-year periods following
       issue. The redemption values provide an investment yield of
  approximately 8.00 percent per annum, compounded semiannually, on the
    purchase price from issue date to the beginning of each half-year
 period. No increase in redemption value is shown, however, until 1 year
 after issue date since no interest may be paid on bonds redeemed before
    that time. The period to maturity is fixed in accordance with the
             provisions of Sec.  346.1(b) of this circular.
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (values increase on first day of
                                              period shown)
                                ----------------------------------------
                                  $50.00    $75.00    $100.00   $500.00
------------------------------------------------------------------------
First half year................    $50.00    $75.00   $100.00    $500.00
1.0 to 1.5.....................     54.08     81.12    108.16     540.80
1.5 to 2.0.....................     56.24     84.36    112.48     562.40
2.0 to 2.5.....................     58.50     87.75    117.00     585.00
2.5 to 3.0.....................     60.84     91.26    121.68     608.40
3.0 to 3.5.....................     63.26     94.89    126.52     632.60
3.5 to 4.0.....................     65.80     98.70    131.60     658.00
4.0 to 4.5.....................     68.42    102.63    136.84     684.20
4.5 to 5.0.....................     71.16    106.74    142.32     711.60
5.0 to 5.5.....................     74.02    111.03    148.04     740.20
5.5 to 6.0.....................     76.98    115.47    153.96     769.80
6.0 to 6.5.....................     80.06    120.09    160.12     800.60
6.5 to 7.0.....................     83.26    124.89    166.52     832.60
7.0 to 7.5.....................     86.58    129.87    173.16     865.80
7.5 to 8.0.....................     90.04    135.06    180.08     900.40
8.0 to 8.5.....................     93.64    140.46    187.28     936.40
8.5 to 9.0.....................     97.40    146.10    194.80     974.00
9.0 to 9.5.....................    101.30    151.95    202.60   1,013.00
9.5 to 10.0....................    105.34    158.01    210.68   1,053.40
10.0 to 10.5...................    109.56    164.34    219.12   1,095.60
10.5 to 11.0...................    113.94    170.91    227.88   1,139.40
11.0 to 11.5...................    118.50    177.75    237.00   1,185.00
11.5 to 12.0...................    123.24    184.86    246.48   1,232.40
12.0 to 12.5...................    128.16    192.24    256.32   1,281.60
12.5 to 13.0...................    133.30    199.95    266.60   1,333.00
13.0 to 13.5...................    138.62    207.93    277.24   1,386.20
13.5 to 14.0...................    144.16    216.24    288.32   1,441.60
14.0 to 14.5...................    149.94    224.91    299.88   1,499.40
14.5 to 15.0...................    155.94    233.91    311.88   1,559.40
15.0 to 15.5...................    162.16    243.24    324.32   1,621.60
15.5 to 16.0...................    168.66    252.99    337.32   1,686.60
16.0 to 16.5...................    175.40    263.10    350.80   1,754.00
16.5 to 17.0...................    182.42    273.63    364.84   1,824.20
17.0 to 17.5...................    189.72    284.58    379.44   1,897.20
17.5 to 18.0...................    197.30    295.95    394.60   1,973.00
18.0 to 18.5...................    205.20    307.80    410.40   2,052.00
18.5 to 19.0...................    213.40    320.10    426.80   2,134.00
19.0 to 19.5...................    221.94    332.91    443.88   2,219.40
19.5 to 20.0...................    230.82    346.23    461.64   2,308.20
20.0 to 20.5...................    240.06    360.09    480.12   2,400.60
------------------------------------------------------------------------


  Table C--Table of Redemption Values Providing an Investment Yield of
 9.00 Percent Per Annum for Bonds Bearing Issue Dates Beginning October
                                 1, 1981
  Note: This table shows how Individual Retirement Bonds bearing issue
     dates on or after October 1, 1981, by denomination, increase in
   redemption value during the successive half-year periods following
       issue. The redemption values provide an investment yield of
  approximately 9.00 percent per annum, compounded semiannually, on the
    purchase price from issue date to the beginning of each half-year
 period. No increase in redemption value is shown, however, until 1 year
 after issue date since no interest may be paid on bonds redeemed before
    that time. The period to maturity is fixed in acordance with the
             provisions of Sec.  346.1(b) of this circular.
------------------------------------------------------------------------
                                               Issue price
                                ----------------------------------------
                                 Redemption values during each half-year
Period after issue date (years)  period (values increase on first day of
                                              period shown)
                                ----------------------------------------
                                  $50.00    $75.00    $100.00   $500.00
------------------------------------------------------------------------
First half.....................    $50.00    $75.00   $100.00    $500.00
1.0 to 1.5.....................     54.60     81.90    109.20     546.00
1.5 to 2.0.....................     57.06     85.59    114.12     570.60
2.0 to 2.5.....................     59.62     89.43    119.24     596.20
2.5 to 3.0.....................     62.30     93.45    124.60     623.00
3.0 to 3.5.....................     65.12     97.68    130.24     651.20
3.5 to 4.0.....................     68.04    102.06    136.08     680.40
4.0 to 4.5.....................     71.10    106.65    142.20     711.00
4.5 to 5.0.....................     74.30    111.45    148.60     743.00
5.0 to 5.5.....................     77.64    116.46    155.28     776.40
5.5 to 6.0.....................     81.14    121.71    162.28     811.40
6.0 to 6.5.....................     84.80    127.20    169.60     848.00
6.5 to 7.0.....................     88.60    132.90    177.20     886.00
7.0 to 7.5.....................     92.60    138.90    185.20     926.00
7.5 to 8.0.....................     96.76    145.14    193.52     967.60
8.0 to 8.5.....................    101.12    151.68    202.24   1,011.20
8.5 to 9.0.....................    105.66    158.49    211.32   1,056.60
9.0 to 9.5.....................    110.42    165.63    220.84   1,104.20
9.5 to 10.0....................    115.40    173.10    230.80   1,154.00
10.0 to 10.5...................    120.58    180.87    241.16   1,205.80
10.5 to 11.0...................    126.02    189.03    252.04   1,260.20
11.0 to 11.5...................    131.68    197.52    263.36   1,316.80
11.5 to 12.0...................    137.60    206.40    275.20   1,376.00
12.0 to 12.5...................    143.80    215.70    287.60   1,438.00
12.5 to 13.0...................    150.28    225.42    300.56   1,502.80
13.0 to 13.5...................    157.04    235.56    314.08   1,570.40
13.5 to 14.0...................    164.10    246.15    328.20   1,641.00
14.0 to 14.5...................    171.48    257.22    342.96   1,714.80
14.5 to 15.0...................    179.20    268.80    358.40   1,792.00
15.0 to 15.5...................    187.26    280.89    374.52   1,872.60
15.5 to 16.0...................    195.70    293.55    391.40   1,957.00
16.0 to 16.5...................    204.50    306.75    409.00   2,045.00
16.5 to 17.0...................    213.70    320.55    427.40   2,137.00
17.0 to 17.5...................    223.32    334.98    446.64   2,233.20
17.5 to 18.0...................    233.36    350.04    466.72   2,333.60
18.0 to 18.5...................    243.86    365.79    487.72   2,438.60
18.5 to 19.0...................    254.84    382.26    509.68   2,548.40
19.0 to 19.5...................    266.32    399.48    532.64   2,663.20
19.5 to 20.0...................    278.30    417.45    556.60   2,783.00
20.0 to 20.5...................    290.82    436.23    581.64   2,908.20
------------------------------------------------------------------------


(26 U.S.C. 220, and 31 U.S.C. 757; 40 Stat. 288, 48 Stat. 343, as 
amended; 31 U.S.C. 752, 7546; 5 U.S.C. 301)

[40 FR 4240, Jan. 28, 1975, as amended at 42 FR 37521, July 21, 1977; 45 
FR 53397, Aug. 11, 1980; 45 FR 55178, Aug. 19, 1980; 46 FR 60577, Dec. 
11, 1981]

[[Page 293]]



PART 351--OFFERING OF UNITED STATES SAVINGS BONDS, SERIES EE--Table of Contents




Sec.
351.0  Offering of bonds.
351.1  Governing regulations.
351.2  Description of bonds.
351.3  Registration and issue.
351.4  Limitation on purchases.
351.5  Purchase of bonds.
351.6  Delivery of bonds.
351.7  Payment or redemption.
351.8  Taxation.
351.9  Education savings bond program.
351.10  Reservation as to issue of bonds.
351.11  Waiver.
351.12  Fiscal agents.
351.13  Reservation as to terms of offer.

Appendix to Part 351--Table 1, EE Bonds Bearing Issue Dates From 
          November 1, 1982 Through October 1, 1986. Table 2, EE Bonds 
          Bearing Issue Dates Beginning November 1, 1986. Table 3, EE 
          Bonds Bearing Issue Dates March 1, 1993, Through April 1, 1995

    Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3105.

    Source: 55 FR 567, Jan. 5, 1990, unless otherwise noted.



Sec. 351.0  Offering of bonds.

    The Secretary of the Treasury offers for sale to the people of the 
United States, United States Savings Bonds of Series EE, hereinafter 
referred to as Series EE bonds or bonds. This offer, effective May 1, 
1997, will continue until terminated by the Secretary of the Treasury.

[55 FR 567, Jan. 5, 1990, as amended at 58 FR 60938, Nov. 18, 1993; 60 
FR 15431, Mar. 23, 1995; 62 FR 24281, May 2, 1997]



Sec. 351.1  Governing regulations.

    Series EE bonds are subject to the regulations of the Department of 
the Treasury, now or hereafter prescribed, governing United States 
Savings Bonds of Series EE and HH, contained in Department of the 
Treasury Circular, Public Debt Series No. 3-80 (part 353 of this 
chapter). Treasury expressly disclaims the effect of, and does not 
warranty the correctness of, any representations or warranties regarding 
Series EE bonds, wherever made, that in any way conflict with the terms 
and conditions of Series EE bonds, as set out in these and other 
regulations and other applicable law. The regulations in part 370 of 
this chapter apply to transactions for the purchase of United States 
Savings Bonds issued through the Bureau of the Public Debt. The 
regulations in part 370 do not apply to transactions for the purchase of 
bonds accomplished through issuing agents generally, unless and to the 
extent otherwise directed by the Commissioner of the Bureau of the 
Public Debt.

[63 FR 64551, Nov. 20, 1998]



Sec. 351.2  Description of bonds.

    (a) General. Series EE bonds are issued only in registered form and 
are nontransferable.
    (b) Denominations and prices. Series EE bonds are issued on a 
discount basis. The denominations and purchase prices are as follows:

 
                                                               Purchase
                        Denomination                             price
 
$50\1\......................................................      $25.00
75\1\.......................................................       37.50
100.........................................................       50.00
200.........................................................      100.00
500.........................................................      250.00
1,000.......................................................      500.00
5,000.......................................................    2,500.00
10,000......................................................    5,000.00
 
\1\ As of October 1, 1990, $50 & $75 denominations were no longer
  available through payroll savings plans or through employee thrift,
  savings, vacation or similar plans.

    (c) Term--original maturity periods for bonds issued prior to May 1, 
1995. The issue date of a Series EE bond is the first day of the month 
in which payment of the issue price is received by an authorized issuing 
agent. Series EE bonds issued prior to May 1, 1995, have ``original'' 
maturity periods, also referred to as ``initial'' maturity periods, as 
follows:

------------------------------------------------------------------------
                                    Original maturity
    Issue dates--1st day of:       dates--1st day of:     Original terms
------------------------------------------------------------------------
Jan. 1980-Oct. 1980............  Jan. 1991-Oct. 1991...  11 years.
Nov. 1980-Apr. 1981............  Nov. 1989-Apr. 1990...    9 years.
May. 1981-Oct. 1982............  May 1989-Oct. 1990....   8 years.
Nov. 1982-Oct. 1986............  Nov. 1992-Oct. 1996...  10 years.
Nov. 1986-Feb. 1993............  Nov. 1998-Feb. 2005...  12 years.
Mar. 1993-Apr. 1995............  Mar. 2011-Apr. 2013...  18 years.
------------------------------------------------------------------------


[[Page 294]]

    (d) Redemption. A Series EE bond may be redeemed after 6 months from 
its issue date. The Secretary of the Treasury may not call Series EE 
bonds for redemption prior to final maturity.
    (e) Investment yield (interest) during original maturity periods--
bonds bearing issue dates of November 1, 1982 through April 1, 1995. The 
investment yield of a Series EE bond bearing issue dates of November 1, 
1982, through April 1, 1995, from its issue date to each interest 
accrual date occurring less than 5 years after issue, will be as shown 
in Tables 1, 2, and 3 in the appendix to this part.
    (1) Guaranteed minimum investment yield. The guaranteed minimum 
investment yield of a bond from its issue date to each semiannual 
interest accrual date occurring on or after 5 years from issue up to 
original maturity will be 7.5 percent per annum, compounded 
semiannually, for a bond bearing an issue date of November 1, 1982, 
through October 1, 1986, and 6 percent per annum, compounded 
semiannually, for a bond bearing an issue date of November 1, 1986, 
through February 1, 1993; and, 4 percent per annum, compounded 
semiannually, for a bond bearing an issue date of March 1, 1993, through 
April 1, 1995. Interest that accrues on a Series EE bond becomes part of 
its redemption value and is paid, as set out in Sec. 351.2 (h).
    (2) Market-based variable investment yield. If a Series EE bond is 
not sooner redeemed, its yield 5 years after its issue date and on each 
successive semiannual interest accrual date will be determined as 
follows:
    (i) For each 6-month period, starting with the period beginning on 
May 1, 1982, the average market yield on outstanding marketable Treasury 
securities with a remaining term to maturity of approximately 5 years 
during such period will be determined.
    (ii) For bonds bearing issue dates of November 1, 1982, through 
April 1, 1989, the market-based variable investment yield from the issue 
date of a bond to its semiannual interest accrual date 5 years 
thereafter will be 85 percent, rounded to the nearest one-fourth of 1 
percent, of the arithmetic average of the market yield averages for the 
ten 6-month periods starting with the 6-month period that most recently 
ended before such issue date.
    (iii) For bonds bearing issue dates of May 1, 1989 through April 1, 
1995, the market-based variable investment yield from the issue date to 
the semiannual interest accrual date 5 years thereafter will be 85 
percent, rounded to the nearest one-hundredth of 1 percent, of the 
arithmetic average of the market yield averages for the ten 6-month 
periods starting with the 6-month period that most recently ended before 
such issue date.
    (iv) In determining the market-based variable investment yield for a 
bond from its issue date to each successive semiannual interest accrual 
date occurring after 5 years from issue up to original maturity, the 
average market yield for each additional 6-month period will be included 
in the computation.
    (v) The determination by the Secretary of the Treasury, or his 
delegate, of the average market yields shall be final and conclusive.

    Example. For bonds bearing issue dates of November 1, 1982, through 
April 1, 1983, the market-based variable investment yield from issue 
date to 5 years will be determined from the ten 6-month market yield 
averages for the period from May 1, 1982, through April 30, 1987. The 
market-based variable investment yield from issue to 5\1/2\ years will 
be determined for the period from May 1, 1982, through October 31, 1987. 
For bonds bearing issue dates of May 1, 1983, to October 1, 1983, the 5 
year market-based variable investment yield will be determined for the 
period from November 1, 1982, through October 31, 1987, and the 5\1/2\ 
year market-based variable investment yield will be determined from 
November 1, 1982, through April 30, 1988. ln each case where a bond is 
held for 5 years or longer during its original maturity period, its 
redemption value on the appropriate interest accrual date will be 
determined from such yield, unless the guaranteed minimum yield, 
compounded semiannually, as specified in Sec. 351.2(e)(1), from issue to 
that accrual date results in a higher redemption value.

    (f) Investment yields (interest) during original maturity periods--
bonds issued prior to November 1, 1982. For bonds bearing issue dates of 
January 1, 1980, through October 1, 1982, the investment yields shall be 
as follows:
    (1) Guaranteed minimum investment yield. The guaranteed minimum 
investment yields on bonds bearing issue

[[Page 295]]

dates prior to November 1, 1982, are made available, on request, by the 
Bureau of the Public Debt, Parkersburg, West Virginia 26106-1328.
    (2) Market-based variable investment yield. If a bond is held for a 
period of 5 years after its first semiannual interest accrual period, 
occurring on or after November 1, 1982, its yield for such period, and 
to each successive semiannual interest accrual date up to its original 
maturity, shall be either the guaranteed minimum investment yield 
specified above in paragraph (f)(1) of this section or the market-based 
variable investment yield computed as provided in paragraph (e)(2) of 
this section, whichever produces the greater value, using the 
appropriate number of 6-month periods. The first such period began on 
May 1, 1982.
    (g) Extended maturity periods for bonds bearing issue dates prior to 
May 1, 1995--(1) General. The terms extended maturity period, second 
extended maturity period, and extended maturity, as used herein, refer 
to periods after the original maturity dates of the bonds during which 
owners may retain them at interest. No special action is required of 
owners desiring to take advantage of any extensions herein granted.
    (2) Extensions granted for bonds bearing issue dates prior to May 1, 
1995. As described in the charts below, owners of Series EE bonds may 
retain their bonds for an extended maturity period of l0 years. Owners 
of Series EE bonds also may retain their bonds for a second extended 
maturity period having a period such that, if outstanding, interest 
shall accrue for a term totaling 30 years from the issue date. Each 
Series EE bond will reach its final maturity and cease to accrue 
interest 30 years after its issue date.

----------------------------------------------------------------------------------------------------------------
                                                           Original maturity     Final maturity dates-- 1st day
    Issues dates--1st day of:         Original terms         dates-day of:                    of:
----------------------------------------------------------------------------------------------------------------
Jan. 1980-Oct. 1980..............  11 years............  Jan. 1991-Oct. 1991.  Jan. 2010-Oct. 2010.
Nov. 1980-Apr. 1981..............  9 years.............  Nov. 1989-Apr. 1990.  Nov. 2010-Apr. 2011.
May 1981-Oct. 1982...............  8 years.............  May 1989-Oct. 1990..  May 2011-Oct. 2012.
Nov. 1982-Oct. 1986..............  10 years............  Nov. 1992-Oct. 1996.  Nov. 2012-Oct. 2016.
Nov. 1986-Feb. 1993..............  12 years............  Nov. 1998-Feb. 2005.  Nov. 2016-Feb. 2023.
Mar. 1993-Apr. 1995..............  18 years............  Mar. 2011-Apr. 2013.  Mar. 2023-Apr. 2025
 
----------------------------------------------------------------------------------------------------------------
Issues dates--1st day of:          1st extended          Years to final        Final maturity dates--
                                    maturity dates--.     maturity.            1st day of:
                                   1st day of:*........
 
----------------------------------------------------------------------------------------------------------------
Jan. 1980-Oct. 1980..............  Jan. 2001-Oct. 2001.  9 years.............  Jan. 2010-Oct. 2010.
Nov. 1980-Apr. 1981..............  Nov. 1999-Apr. 2000.  11 years............  Nov. 2010-Apr. 2011.
May 1981-Oct. 1982...............  May 1999-Oct. 2000..  12 years............  May 2011-Oct. 2012.
Nov. 1982-Oct. 1986..............  Nov. 2002-Oct. 2006.  10 years............  Nov. 2012-Oct. 2016.
Nov. 1986-Feb. 1993..............  Nov. 2008-Feb. 2015.  8 years.............  Nov. 2016-Feb. 2023.
Mar. 1993-Apr. 1995..............  Mar. 2021-Apr. 2023.  2 years.............  Mar. 2023-Apr. 2025
----------------------------------------------------------------------------------------------------------------
* At 10 years after original maturity.

    (3) Determination of redemption values during any extended maturity 
period for bonds bearing issue dates prior to May 1, 1995. The 
redemption value of a bond on a given interest accrual date during an 
extended maturity period or periods will be the higher of the value 
produced using the applicable guaranteed minimum investment yield or the 
value produced using the appropriate market-based variable investment 
yield. The calculation of these yields and the resulting redemption 
values are described below:
    (i) Guaranteed minimum investment yield and resulting values during 
an extended maturity period. A bond may be subject to one guaranteed 
minimum investment yield during its original maturity period and to 
another such yield during each of its extended maturity periods. Bonds 
that entered an extended maturity period from May 1, 1989, through 
February 1, 1993, have a guaranteed minimum investment yield of 6 
percent per annum, compounded semiannually, during that extended 
maturity period. Bonds that entered or enter an extended maturity period 
on or after March 1, 1993, have a guaranteed minimum investment yield of 
4

[[Page 296]]

percent per annum, compounded semiannually, during that extended 
maturity period, or the guaranteed minimum investment yield in effect at 
the beginning of that period. In order to determine values for a bond 
during its first extended maturity period, the value of the bond at the 
end of its original maturity period is determined using the guaranteed 
minimum investment yield applicable to that period. This value is then 
used as the base upon which interest accrues during the first extended 
maturity period at the applicable guaranteed minimum investment yield 
for that period. The value thus attained at first extended maturity (10 
years after original maturity) is then used as the base upon which 
interest accrues during the second extended maturity period at the 
applicable guaranteed minimum investment yield for that period. The 
resulting semiannual values are then compared with the corresponding 
values determined using the applicable market-based variable investment 
yields.
    (ii) Market-based variable investment yield and resulting values 
during an extended maturity period. For a bond beginning an extended 
maturity period, the market-based variable investment yield from its 
first semiannual interest accrual date occurring on or after November 1, 
1982, or its issue date, whichever is later, to each semiannual interest 
accrual date occurring on or after November 1, 1989, will be 85 percent, 
rounded to the nearest one-hundredth of one percent, of the arithmetic 
average of the market yield averages for the appropriate number of 6-
month periods involved, beginning with the period from May l, 1982, or 
the 6-month period that most recently ended before the issue date, 
whichever period occurs later. The value of a bond on its first 
semiannual interest accrual date occurring on or after November l, l982, 
or its issue date, whichever is later, is used as the base upon which 
interest accrues during the extended maturity period at the applicable 
market-based variable investment yield. As described above, the bond 
will receive the higher of the two values produced using the applicable 
market-based variable investment yield and guaranteed minimum investment 
yield.
    (h) Accrual and payment of interest for bonds issued prior to May 1, 
1995. Interest accrues on a Series EE bond and becomes a part of the 
redemption value which is paid when the bond is cashed. For bonds with 
issue dates from January 1, 1980, through October 1, 1980, the 
redemption value increases on the first day of each month from the third 
through the thirtieth month after issue, and thereafter on the first day 
of each successive 6-month period. For bonds with issue dates from 
November 1, 1980, through October 1, 1986, the redemption value 
increases on the first day of each month from the third through the 
eighteenth month after issue, and thereafter on the first day of each 
successive 6-month period. For bonds with issue dates from November 1, 
1986, through February 1, 1993, the redemption values increase on the 
first day of each month from the third through the thirtieth month after 
issue, and thereafter on the first day of each successive 6-month 
period. For bonds with issue dates of March 1, 1993 through April 1, 
1995, the redemption values increase on the first day of each month from 
the third through the sixtieth month after issue, and thereafter either 
on the first day of each month or on the first day of each successive 6-
month period, whichever accrual schedule ensures that the actual yield 
from issue date to redemption date is in no case less than 4 percent per 
annum, compounded semiannually. The interest on an outstanding bond 
ceases to accrue 30 years after its issue date.
    (i) Tables of redemption values for bonds issued prior to May 1, 
1995. For bonds with issue dates of November 1, 1982 through April 1, 
1995, Tables 1, 2, and 3, in the appendix to this part, show the 
established redemption values and investment yields for the first 4\1/2\ 
years after issue and redemption values produced by guaranteed minimum 
investment yields from 5 years after issue to original maturity. For 
bonds issued prior to November 1, 1982, tables showing the established 
redemption values and investment yields for interest accrual dates 
occurring less than 5 years from the first semiannual interest accrual 
period starting on or after

[[Page 297]]

November 1, 1982, and the guaranteed minimum investment yields and 
resulting redemption values for interest accrual dates occurring 
thereafter to original maturity, are made available by the Bureau of the 
Public Debt, Parkersburg, West Virginia 26106-1328. The market-based 
variable investment yields for bonds redeemed during each 6-month 
period, beginning on May 1 and November 1 of each year, are made 
available prior to each of those dates by the Bureau of the Public Debt, 
accompanied by tables of the redemption values of bonds for the 
following 6 months, as determined by applicable market-based variable 
investment yields or guaranteed minimum investment yields.
    (j) Market-based interest rate and redemption values--bonds bearing 
issue dates of May 1, 1995, through April 1, 1997. (1) The following 
definitions apply for determining the interest rates and redemption 
values for bonds bearing issue dates of May 1, 1995, through April 1, 
1997:
    (i) Market yields. Treasury uses market bid yields for bills, notes, 
and bonds to create a yield curve based on the most actively traded 
Treasury securities. This curve relates the yield on a security to its 
time to maturity. Yields at particular points on the curve are referred 
to as ``constant maturity yields'' and are determined by the Treasury 
from this daily yield curve. The 6-month and 5-year Treasury securities 
rates described below are derived from these yield curves.
    (ii) Short-term savings bond rate. No less frequently than on each 
May 1 and November 1, Treasury announces a short-term savings bond rate. 
To determine this rate, Treasury compiles 6-month Treasury securities 
rates as of the close of business for each day of the previous three 
months and calculates the monthly average for each month, rounding each 
monthly average to the nearest one-hundredth of one percent. The short-
term savings bond rate is then determined by taking 85 percent of the 
three-month average and rounding the result to the nearest one-hundredth 
of one percent. If the regularly scheduled date for the announcement 
(for example, May 1) is a day when the Treasury is not open for 
business, then the announcement is made on the next business day and is 
effective as of the first day of that month. For bonds entitled to 
interest accruals at the short-term savings bond rate, that rate applies 
to the bond's first full semiannual interest accrual period following 
each announcement of the rate.
    (iii) Long-term savings bond rate. No less frequently than on each 
May 1 and November 1, Treasury announces a long-term savings bond rate. 
To determine this rate, Treasury compiles 5-year Treasury securities 
rates as of the close of business for each day of the previous six 
months and calculates the monthly average for each month, rounding each 
monthly average to the nearest one-hundredth of one percent. The long-
term savings bond rate is then determined by taking 85 percent of the 6-
month average and rounding the result to the nearest one-hundredth of 
one percent. If the regularly scheduled date for the announcement (for 
example, May 1) is a day when the Treasury is not open for business, 
then the announcement is made on the next business day and is effective 
as of the first day of that month. For bonds entitled to interest 
accruals at the long- term savings bond rate, that rate applies to the 
bond's first full semiannual interest accrual period following each 
announcement of the rate.
    (iv) Base denomination. All redemption value calculations are 
performed on a hypothetical denomination of $25 having a value at the 
beginning of the first earning period equal to an issue price of $12.50. 
Redemption values for bonds of greater denominations are in direct 
proportion according to the ratio of denominations. For example, if the 
value of a hypothetical $25 denomination is $26.80--i.e., $12.50 issue 
price plus $14.30 accrued interest--on the same redemption date, the 
value of a $50 bond bearing the same issue date is $26.80 x (50 / 25) or 
$53.60.
    (v) Issue date. The issue date of a Series EE bond is the first day 
of the month in which payment of the issue price is received by an 
authorized issuing agent.
    (vi) Semiannual earning periods and accrual dates. Bonds bearing 
issue dates of May 1, 1995, through April 1, 1997, earn interest during 
each successive six

[[Page 298]]

month period from date of issue to final maturity. Interest accrues, 
immediately following each earning period, on each semiannual 
anniversary of the date of issue, including the date of final maturity.
    (vii) Original maturity. Bonds reach original maturity at 17 years 
after date of issue.
    (viii) Final maturity. Bonds reach final maturity at 30 years after 
date of issue. A bond ceases to earn interest at final maturity.
    (2) Interest rates and redemption values for bonds held 5 years or 
less. The interest rate for a Series EE bond bearing an issue date of 
May 1, 1995, through April 1, 1997, for semiannual earning periods 
during the first 5 years from date of issue, is the short-term savings 
bond rate determined as defined in paragraph (j)(1)(ii) of this section. 
Redemption values for semiannual accrual dates occurring on or before 5 
years from date of issue are calculated in accordance with paragraph 
(j)(5) of this section.
    (3) Interest rates and redemption values for bonds held 5 years and 
6 months and longer. The interest rate for a Series EE bond bearing an 
issue date of May 1, 1995, through April 1, 1997, for semiannual earning 
periods beginning 5 years from date of issue through original maturity, 
is the long-term savings bond rate determined as defined in paragraph 
(j)(1)(iii) of this section. Redemption values for semiannual accrual 
dates occurring after 5 years from date of issue, through original 
maturity, are calculated in accordance with paragraph (j)(5) of this 
section, except that the redemption value at the date of original 
maturity, as provided in paragraph (j)(1)(vii) of this section, shall 
not be less than the denomination (face amount or face value).
    (4) Interest rates and redemption values for bonds during an 
extended maturity period. From 17 years after date of issue to the final 
maturity date (the ``extended maturity period'') the bond will be 
subject to the terms and conditions in effect when it is issued, and 
will continue to earn interest as described in paragraph (j)(3) of this 
section, unless the terms and conditions applicable to an extended 
maturity period are expressly amended prior to the beginning of such 
period.
    (5) Redemption value calculations. Interest on a bond accrues and 
becomes part of the redemption value which is paid when the bond is 
cashed. The redemption value of a bond on the accrual date immediately 
following each semiannual earning period is determined as follows:
    (i) The applicable long-term or short-term savings bond rate for the 
semiannual earning period is converted to decimal form by dividing by 
100, and is adjusted to a semiannual rate by dividing by 2.
    (ii) Using redemption values for the base denomination, as defined 
in paragraph (j)(1)(iv) of this section, this rate is then multiplied by 
the redemption value of the bond at the beginning of the semiannual 
earning period.
    (iii) The resulting interest amount, rounded to the nearest cent, is 
added to the redemption value of the bond at the beginning of the 
earning period to produce the redemption value at the next semiannual 
accrual date. The redemption value of a bond remains constant between 
accrual dates.
    (6) The Secretary's determination. The determination by the 
Secretary of the Treasury, or his delegate, of the market yields, and 
the long-term and short-term savings bond rates, shall be final and 
conclusive.
    (7) Tables of redemption values. Tables of redemption value are made 
available by the Bureau of the Public Debt, Parkersburg, West Virginia 
26106-1328, prior to the periods during which the redemption values are 
payable.
    (k) Interest rate and redemption values--bonds bearing issue dates 
of May 1, 1997, or thereafter.
    (1) The following definitions apply for determining the interest 
rates and redemption values for bonds bearing issue dates of May 1, 
1997, or thereafter:
    (i) Market yields. Treasury uses market bid yields for bills, notes, 
and bonds to create a yield curve based on the most actively traded 
Treasury securities. This curve relates the yield on a security to its 
time to maturity. Yields at particular points on the curve are referred 
to as ``constant maturity yields'' and are determined by the

[[Page 299]]

Treasury from this daily yield curve. The 5-year Treasury securities 
yields described below are derived from these yield curves.
    (ii) Savings bonds rate. No less frequently than on each May 1 and 
November 1, Treasury announces a variable market-based savings bonds 
rate. To determine this rate, Treasury compiles 5-year Treasury 
securities yields as of the close of business for each day of the 
previous six months and calculates the monthly average to the nearest 
one-hundredth of one percent. The savings bonds rate is then determined 
by taking 90 percent of the 6-month average and rounding the result to 
the nearest one-hundredth of one percent. If the regularly scheduled 
date for the announcement (for example, May 1) is a day when the 
Treasury is not open for business, then the announcement is made on the 
next business day, however, the effective date of the rate remains the 
first day of the month of the announcement.
    (iii) Base denomination. All redemption value calculations are 
performed on a hypothetical denomination of $25 having a value at the 
beginning of the first semiannual rate period equal to an issue price of 
$12.50. Redemption values for bonds of greater denominations are in 
direct proportion according to the ratio of denominations.
    (iv) Issue date. The issue date of a Series EE savings bond is the 
first day of the month in which payment of the issue price is received 
by an authorized issuing agent.
    (v) Accrual date. Interest on a Series EE savings bond accrues on 
the first day of each month beginning with the fourth month from the 
date of issue. The redemption value of a bond does not change between 
these accrual dates.
    (vi) Semiannual Rate Periods. Semiannual rate periods are the 6-
month periods beginning on the date of issue and on each semiannual 
anniversary of the date of issue to original maturity.
    (vii) Original maturity. Bonds reach original maturity at 17 years 
after date of issue.
    (viii) Final maturity. Bonds reach final maturity at 30 years after 
the date of issue. Bonds cease to earn interest at final maturity.
    (2) Interest rates and monthly accruals for bonds with issue dates 
of May 1, 1997, or thereafter, through original maturity. Savings bonds 
rates defined in paragraph (k)(1)(ii) of this section apply to earnings 
during the first semiannual rate period beginning on or after the 
effective date of the rate. Interest is credited on the first day of 
each month and compounded semiannually. Interest accrues beginning with 
the fourth month from the date of issue. For example, a bond issued in 
January has interest first credited on May 1, which represents one month 
of interest because of the 3-month interest penalty. The following table 
shows, for any given month of issue with rates announced each May and 
November, the months making up the semiannual rate period during which 
interest is earned at the announced rate (disregarding the penalty for 
bonds redeemed prior to 5 years after the date of issue) and the months 
in which the bonds increase in value. This rate is an annual rate 
compounded semiannually.

----------------------------------------------------------------------------------------------------------------
                                                           Then, semiannual
                                         And rate           rate periods in
        If issue month is:             announcement/       which interest is     And bonds increase in value on
                                    effective date is:      earned include           1st day of months of:
                                                              months of:
----------------------------------------------------------------------------------------------------------------
JAN or JUL.......................  May 1...............  JUL through DEC.....  AUG through JAN.
FEB or AUG.......................  May 1...............  AUG through JAN.....  SEP through FEB.
MAR or SEP.......................  May 1...............  SEP through FEB.....  OCT through MAR.
APR or OCT.......................  May 1...............  OCT through MAR.....  NOV through APR.
MAY or NOV.......................  May 1...............  MAY through OCT.....  JUN through NOV.
JUN or DEC.......................  May 1...............  JUN through NOV.....  JUL through DEC.
JAN or JUL.......................  November 1..........  JAN through JUN.....  FEB through JUL.
FEB or AUG.......................  November 1..........  FEB through JUL.....  MAR through AUG.
MAR or SEP.......................  November 1..........  MAR through AUG.....  APR through SEP.
APR or OCT.......................  November 1..........  APR through SEP.....  MAY through OCT.
MAY or NOV.......................  November 1..........  NOV through APR.....  DEC through MAY.
JUN or DEC.......................  November 1..........  DEC through MAY.....  JAN through JUN.
----------------------------------------------------------------------------------------------------------------


[[Page 300]]

    (3) Interest penalty for Series EE bonds with issue dates of May 1, 
1997, or thereafter, redeemed less than 5 years following the issue 
dates. If a Series EE savings bond with an issue date of May 1, 1997, or 
thereafter, is redeemed less than five years following the date of 
issue, the overall earning period from the date of issue will be reduced 
by three months. For example, if a bond issued January 1, 1998, is 
redeemed 9 months later on October 1, 1998, the redemption value will be 
determined by applying the redemption value calculation formula 
described in paragraph (k)(4) of this section and the savings bonds rate 
for that bond at 6 months after the date of issue on July 1, 1998. The 
redemption value of a bond subject to the 3-month interest penalty shall 
not be reduced below the issue price. This penalty does not apply to 
bonds redeemed 5 years or more after the date of issue.
    (4) Redemption value calculations.
    (i) Interest on a bond accrues and becomes part of the redemption 
value which is paid when the bond is surrendered for payment. The 
redemption value of a bond at original maturity shall not be less than 
the face amount/denomination of the bond.
    (ii)(A) The redemption value of a bond for the accrual date (the 
first day of each month beginning with the fourth month from the date of 
issue) is determined in accordance with this section and the following 
formula:


FV = PV x {[1+(i / 2)](m/6)} where
FV (future value) = redemption value on redemption date rounded to the 
    nearest cent.
PV (present value) = redemption value at the beginning of the semiannual 
    rate period as defined in paragraph (k)(l)(vi) of this section.
i = savings bonds rate as defined in paragraph (k)(1)(ii) of this 
    section converted to decimal form by dividing by 100.
m = number of full calendar months outstanding during the semiannual 
    rate period.

    (B) The following hypothetical example illustrates how this formula 
is applied:

    Example, assume a hypothetical savings bonds rate of 5.00% effective 
May 1, 2002, for a bond denominated at $25, with an issue date of 
September 1, 1997 and a redemption value of $16.00 as of September 1, 
2002. The February 1, 2003, redemption value is calculated as follows: 
Bonds issue dated in September have semiannual rate periods beginning 
each March 1 and September 1. The first semiannual rate period to begin 
on or after the effective date of the May 1, 2002, rate would be the 
period beginning September 1, 2002. PV, the present value, would be the 
value of the bond at the beginning of the semiannual rate period, on 
September 1, 2002. The savings bonds rate of 5.00% converted to a 
decimal would be 0.05. The number of months, m, is 5 since 5 full 
calendar months (September through January) have lapsed since the 
beginning of the rate period. FV is then the result of the formula:

FV = $16.00 x{ [1 + (0.05 / 2)](5/6)} = $16.33 after rounding 
          to the nearest cent.

    Using the example, the FV of a savings bond with a $50 or larger 
denomination can be determined by applying the appropriate multiple, for 
example: $16.33 x ($50.00 / $25.00) for a bond with a $50.00 face 
amount; or $16.33 x ($100.00 / $25.00) for a bond with a $100.00 face 
amount.

    (5) Interest rates and redemption values for bonds during an 
extended maturity period. From 17 years after date of issue to the final 
maturity date (the ``extended maturity period'') the bond will be 
subject to the terms and conditions in effect when it is issued and will 
continue to earn interest as described in paragraph (k)(2) of this 
section, unless the terms and conditions applicable to an extended 
maturity period are expressly amended prior to the beginning of such 
period.
    (6) The Secretary's determination. The determination by the 
Secretary of the Treasury, or his delegate, of market yields, savings 
bonds rates, rates applicable during any extended maturity period, and 
savings bond redemption values shall be final and conclusive.
    (7) Tables of redemption values. Tables of redemption values are 
made available by the Bureau of the Public Debt, Parkersburg, West 
Virginia 26106-1328. Redemption values published in such tables reflect 
the 3-month interest penalty applied to bonds redeemed prior to 5 years 
from the date of issue.

[55 FR 567, Jan. 5, 1990, as amended at 57 FR 14285, Apr. 17, 1992; 58 
FR 60938, 60939, Nov. 18, 1993; 60 FR 15431, 15432, Mar. 23, 1995; 62 FR 
24281, May 2, 1997]

[[Page 301]]



Sec. 351.3  Registration and issue.

    (a) Registration. Bonds may be registered as set forth in subpart B 
of 31 CFR part 353, also published as Department of the Treasury 
Circular, Public Debt Series No. 3-80.
    (b) Validity of issue. A bond is validly issued when it (1) is 
registered as provided in Circular No. 3-80, and (2) bears an issue 
date, as well as the validation indicia of an authorized issuing agent.
    (c) Taxpayer identifying number. The inscription of a bond must 
include the taxpayer identifying number of the owner or first-named 
coowner. The taxpayer identifying number of the second-named coowner or 
beneficiary is not required but its inclusion is desirable. If the bond 
is being purchased as a gift or award and the owner's taxpayer 
identifying number is not known, the taxpayer identifying number of the 
purchaser must be included in the inscription on the bond.
    (d) Restrictions on chain letters. The issuance of bonds in the 
furtherance of a chain letter or pyramid scheme is considered to be 
against the public interest and is prohibited. An issuing agent is 
authorized to refuse to issue a bond if there is reason to believe that 
a purchase is in connection with a chain letter and the agent's decision 
is final.

[55 FR 567, Jan. 5, 1990, as amended at 57 FR 14285, Apr. 17, 1992]



Sec. 351.4  Limitation on purchases.

    The amount of Series EE bonds which may be purchased in the name of 
any one person, in any one calendar year, is limited to $30,000 (face 
amount). Subpart C of Circular No. 3-80 (31 CFR part 353) contains the 
rules governing the computation of amounts and the special limitation 
for employee plans.



Sec. 351.5  Purchase of bonds.

    (a) Payroll sales--(1) Payroll savings plans. Bonds in $100 and 
higher denominations may be purchased through deductions from the pay of 
employees of organizations that maintain payroll savings plans. The 
bonds must be issued by an authorized issuing agent.
    (2) Employee thrift, savings, vacation, and similar plans. Bonds 
registered in the names of trustees of employee plans may be purchased 
in book-entry form in $100 multiples through a designated Federal 
Reserve Bank after Bureau of the Public Debt approval of the plan as 
eligible for the special limitation under Sec. 353.13 of this chapter, 
also published as Sec. 353.13 of Department of the Treasury Circular, 
Public Debt Series No. 3-80.
    (b) Over-the-counter sales--(1) Eligible issuing agents. Bonds may 
be purchased through any issuing agent, except that an organization 
serving as an issuing agent because of its status as an employer or an 
organization operating an employer's payroll savings plan under 
Sec. 317.2(c) of this chapter may sell bonds only through payroll 
savings plans.
    (2) Manner of sale. An application for the purchase of a bond must 
be accompanied by a remittance to cover the issue price. The purchase 
application and remittance may be submitted to an issuing agent by any 
means acceptable to the issuing agent. An application may authorize 
purchases on a recurring basis. The issuing agent bears the burden of 
collection and the risk of loss for non-collection or return of the 
remittance.

[63 FR 64551, Nov. 20, 1998]



Sec. 351.6  Delivery of bonds.

    Issuing agents are authorized to arrange for the delivery of Series 
EE bonds. Mail deliveries are made at the risk and expense of the United 
States to the address given by the purchaser, if it is within the United 
States, its territories or possessions, or the Commonwealth of Puerto 
Rico. No mail deliveries elsewhere will be made, except to residents of 
Mexico and Canada, who participate in payroll saving plans, and to 
residents of what was formerly the Panama Canal Zone. Bonds purchased by 
a citizen of the United States residing abroad will be delivered only to 
such address in the United States as the purchaser directs.



Sec. 351.7  Payment or redemption.

    (a) Incorporated banks, savings and loan associations and other 
financial institutions--(1) Payment in general. A financial institution 
qualified as a paying agent under the provisions 31 CFR part 321, also 
published as Department

[[Page 302]]

of the Treasury Circular, Public Debt Series No. 750, will pay the 
current redemption value of a Series EE bond presented for payment by an 
individual whose name is inscribed on the bond as owner or coowner, 
provided:
    (i) The bond is in order for payment; and
    (ii) The presenter establishes his or her identity to the 
satisfaction of the agent, in accordance with Treasury instructions and 
identification guidelines, and signs and completes the request for 
payment.
    (2) Payment to beneficiary or legal representative. A paying agent 
may (but is not required to) pay the current redemption value of a 
Series EE bond upon the request of a beneficiary, if he or she survives 
the owner, or a legal representative designated in the bond registration 
by name and capacity, or a court-appointed legal representative of the 
last-deceased registrant's estate provided:
    (i) The bond is in order for payment; and
    (ii) The presenter establishes his or her identity to the 
satisfaction of the agent in accordance with Treasury instructions and 
identification guidelines, and otherwise complies with evidentiary 
requirements.
    (b) Federal Reserve Banks and Branches. A Federal Reserve Bank or 
Branch referred to in Sec. 351.12 will pay the current redemption value 
of a Series EE bond presented for payment, provided the bond is in order 
for payment and the request for payment on the bond is properly signed 
and certified in accordance with Circular No. 3-80.

[55 FR 567, Jan. 5, 1990, as amended at 57 FR 14285, Apr. 17, 1992; 59 
FR 10540, Mar. 4, 1994]



Sec. 351.8  Taxation.

    (a) General. The increment in value, represented by the difference 
between the issue price of a Series EE bond and the redemption value 
received for it, is interest. This interest is subject to all taxes 
imposed under the Internal Revenue Code of 1954, as amended. The bonds 
are subject to estate, inheritance, gift, or other excise taxes, whether 
Federal or State, but are exempt from all other taxation now or 
hereafter imposed on the principal or interest by any State, any 
possession of the United States or any local taxing authority.
    (b) Federal income tax on bonds. An owner of Series EE bonds may use 
either of the following two methods for reporting the increase in the 
redemption value of the bond for Federal income tax purposes:
    (1) Cash basis. Defer reporting the increase to the year of 
maturity, redemption, or other disposition, whichever is earlier; or
    (2) Accrua1 basis. Elect to report the increase each year as it 
accrues, in which case the election applies to all Series EE bonds then 
owned by the taxpayer and those subsequently acquired as well as to any 
other obligations purchased on a discount basis, such as savings bonds 
of Series E.
    (3) If the method in paragraph (b)(1) of this section is used, the 
taxpayer may change to the method in paragraph (b)(2) of this section 
without obtaining permission from the Internal Revenue Service. However, 
once the election to use the method in paragraph (b)(2) of this section 
is made, the taxpayer may not change the method of reporting unless he 
or she obtains permission from the Internal Revenue Service. For further 
information, the District Director of the taxpayer's district, or the 
Internal Revenue Service, Washington, DC 20224, should be consulted.
    (c) Tax-deferred exchanges. Department of the Treasury Circular, 
Public Debt Series No. 2-80 (31 CFR part 352), authorizes the exchange 
of Series EE bonds for Series HH bonds, with a continuation of the tax-
deferral privilege. The rules governing tax-deferred exchanges are 
contained in that circular.
    (d) Reissue. A reissue that affects the rights of any of the persons 
named on a Series EE bond may have a tax consequence.



Sec. 351.9  Education savings bond program.

    A bond owner or coowner may be able to exclude from income for 
Federal income tax purposes all or part of the interest received on the 
redemption of qualified U.S. Savings Bonds during the year if that owner 
or coowner paid qualified higher education expenses

[[Page 303]]

during the same year and certain other conditions are satisfied. This 
exclusion is known as the Education Savings Bond Program, and 
authoritative information about it can be found in Internal Revenue 
Service Publication 17, ``Your Federal Income Tax'', and Publication 
550, ``Investment Income and Expenses'', available from your District 
Director of the Internal Revenue Service.

[62 FR 24283, May 2, 1997]



Sec. 351.10  Reservation as to issue of bonds.

    The Commissioner of the Public Debt, as delegate of the Secretary of 
the Treasury, is authorized to reject any application for Series EE 
bonds, in whole or in part, and to refuse to issue or permit to be 
issued any bonds in any case or class of cases, if he deems the action 
to be in the public interest, and his action in any such respect is 
final.



Sec. 351.11  Waiver.

    The Commissioner of the Public Debt, as delegate of the Secretary of 
the Treasury, may waive or modify any provision of this Circular in any 
particular case or class of cases for the convenience of the United 
States or in order to relieve any person or persons of unnecessary 
hardship (a) if such action would not be inconsistent with law or 
equity, (b) if it does not impair any existing rights, and (c) if he is 
satisfied that such action would not subject the United States to any 
substantial expense or liability.



Sec. 351.12  Fiscal agents.

    (a) Federal Reserve Banks and Branches referred to below, as fiscal 
agents of the United States, are authorized to perform such services as 
may be requested of them by the Secretary of the Treasury, or his or her 
delegate, in connection with the issue, servicing and redemption of 
Series EE bonds.
    (b)(1) The following Federal Reserve Offices have been designated to 
provide savings bond services:

------------------------------------------------------------------------
                                     Reserve districts   Geographic area
          Servicing office                 served            served
------------------------------------------------------------------------
Federal Reserve Bank, Buffalo        New York, Boston.  CT, MA, ME, NH,
 Branch, P.O. Box 961, Buffalo, NY                       NJ (northern
 14240.                                                  half), NY (City
                                                         & State), RI,
                                                         VT, Puerto Rico
                                                         and Virgin
                                                         Islands.
Federal Reserve Bank, Pittsburgh     Cleveland,         DE, KY, (eastern
 Branch, P.O. Box 867, Pittsburgh,    Philadelphia.      half), NJ
 PA 15230.                                               (southern
                                                         half), OH, PA,
                                                         WV (northern
                                                         panhandle).
Federal Reserve Bank of Richmond,    Richmond, Atlanta  AL, DC, FL, LA
 P.O. Box 27622, Richmond, VA 23261.                     (southern
                                                         half), MD, MS
                                                         (southern
                                                         half), NC, SC,
                                                         TN (eastern
                                                         half), VA, WV
                                                         (except
                                                         northern
                                                         panhandle).
Federal Reserve Bank of              Minneapolis,       IA, IL (northern
 Minneapolis, 250 Marquette Avenue,   Chicago.           half), IN
 Minneapolis, MN 55480.                                  (northern
                                                         half), MN, MT,
                                                         ND, SD, WI.
Federal Reserve Bank of Kansas       Dallas, San        AK, AR, AZ, CA,
 City, 925 Grand Avenue, Kansas       Francisco,         CO, HI, ID, IL
 City, MO 64198.                      Kansas City, St.   (southern
                                      Louis.             half), IN
                                                         (southern
                                                         half), KS, KY
                                                         (western half),
                                                         LA (northern
                                                         half), MO, MS
                                                         (northern
                                                         half), NE, NM,
                                                         NV, OK, OR, TN
                                                         (western half),
                                                         TX, WA, WY, UT
                                                         and GU.
------------------------------------------------------------------------

    (2) Until March 1, 1996, other Federal Reserve Offices may continue 
to provide some savings bond services, but such services will be phased 
out over the period prior to that date.

[59 FR 10540, Mar. 4, 1994]



Sec. 351.13  Reservation as to terms of offer.

    The Secretary of the Treasury may at any time or from time to time 
supplement or amend the terms of this offering of bonds.

[[Page 304]]

      Appendix to Part 351--Table 1, EE Bonds Bearing Issue Dates 
      From November 1, 1982 Through October 1, 1986. Table 2, EE 
    Bonds Bearing Issue Dates Beginning November 1, 1986. Table 3, 
     EE Bonds Bearing Issue Dates March 1, 1993, Through April 1, 
                                 1995
    [GRAPHIC] [TIFF OMITTED] TC03NO91.000
    

[[Page 305]]


[GRAPHIC] [TIFF OMITTED] TC03NO91.001


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[[Page 307]]


[GRAPHIC] [TIFF OMITTED] TC03NO91.003


[[Page 308]]


[GRAPHIC] [TIFF OMITTED] TC03NO91.004


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[GRAPHIC] [TIFF OMITTED] TC03NO91.006


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[GRAPHIC] [TIFF OMITTED] TC03NO91.007

[55 FR 567, Jan. 5, 1990, as amended at 58 FR 60939, Nov. 18, 1993; 62 
FR 24283, May 2, 1997]

[[Page 312]]



PART 352--OFFERING OF UNITED STATES SAVINGS BONDS, SERIES HH--Table of Contents




Sec.
352.0  Offering of bonds.
352.1  Governing regulations.
352.2  Description of bonds.
352.3  Registration and issue.
352.4  Limitation on purchases.
352.5  Authorized issuing and paying agents.
352.6  [Reserved]
352.7  Issues on exchange.
352.8  Reinvestment of matured Series H bonds.
352.9  Delivery of bonds.
352.10  Taxation.
352.11  Reservation as to issue of bonds.
352.12  Waiver.
352.13  Fiscal agents.
352.14  Reservation as to terms of offer.
Table 1--HH Bonds Bearing Issue Dates Beginning March 1, 1993

    Authority: 31 U.S.C. 3105, 5 U.S.C. 301.

    Source: 54 FR 40249, Sept. 29, 1989, unless otherwise noted.



Sec. 352.0  Offering of bonds.

    The Secretary of the Treasury hereby offers to the people of the 
United States, United States Savings Bonds of Series HH in exchange for 
eligible United States Savings Bonds of Series E and EE and United 
States Savings Notes (Freedom Shares). This offering, effective as of 
March 1, 1993, will continue until terminated by the Secretary of the 
Treasury.

[54 FR 40249, Sept. 29, 1989, as amended at 58 FR 60947, Nov. 18, 1993]



Sec. 352.1  Governing regulations.

    Series HH bonds are subject to the regulations of the Department of 
the Treasury, now or hereafter prescribed, governing United States 
Savings Bonds of Series EE and HH contained in Department of the 
Treasury Circular, Public Debt Series No. 3-80, as amended (31 CFR part 
353), hereinafter referred to as Circular No. 3-80.



Sec. 352.2  Description of bonds.

    (a) General. Series HH bonds are issued only in registered form and 
are nontransferable. The bonds are distinguishable by the portraits, 
color, border design, tax-deferral legend, and text material.
    (b) Denominations and prices. Series HH bonds are issued at face 
amount and are in denominations of $500, $1,000, $5,000 and $10,000.
    (c) Term. Each bond bears an issue date which is the date from which 
interest is earned. The date is established as provided in 
Sec. 352.7(f). Series HH bonds have an original maturity period of 10 
years and have been granted an extended maturity period of 10 years; 
they will reach final maturity 20 years from their issue dates.
    (d) Redemption. A Series HH bond may be redeemed after six months 
from its issue date. The Secretary of the Treasury may not call Series 
HH bonds for redemption prior to maturity. In any case where Series HH 
bonds are surrendered to an authorized paying agent for redemption in 
the month prior to an interest payment date, redemption will not be 
deferred but will be made in regular course, unless the presenter 
specifically requests that the transaction be delayed until that date. A 
request to defer redemption made more than one month preceding the 
interest payment date will not be accepted.
    (e) Investment yield (interest). (1) During original maturity. 
Interest payments on Series HH bonds will produce the investment yields 
specified below during their original maturity period:
    (i) Current offering. Series HH bonds issued on or after March 1, 
1993, yield 4 percent per annum, paid semiannually, to original 
maturity. See Table 1 in the Appendix to this Circular.
    (ii) Bonds with issue dates of November 1, 1986, through February 1, 
1993. Series HH bonds with issue dates of November 1, 1986, through 
February 1, 1993, yield 6 percent per annum, paid semiannually, to 
original maturity.
    (iii) Bonds with issue dates of November 1, 1986, through September 
1, 1989. Series HH bonds with issue dates of November 1, 1986, through 
September 1, 1989, will yield 6 percent per annum, paid semiannually, to 
original maturity.
    (iv) Bonds with issue dates of November 1, 1982, through October 1, 
1986. Series HH bonds with issue dates of November 1, 1982, through 
October 1, 1986, will yield 7.5 percent per annum, paid semiannually, to 
original maturity.
    (v) Bonds with issue dates of May 1, 1981, through October 1, 1982. 
Series HH bonds with issue dates of May 1, 1981,

[[Page 313]]

through October 1, 1982, will yield 8.5 percent per annum, paid 
semiannually, to original maturity.
    (vi) Bonds with issue dates of November 1, 1980, through April 1, 
1981. Series HH bonds with issue dates of November 1, 1980, through 
April 1, 1981, were originally offered to yield 7.5 percent per annum, 
paid semiannually. The yield to original maturity was increased by 1 
percent, effective with the first full semiannual interest accrual 
period beginning on or after May 1, 1981.
    (vii) Bonds with issue dates of January 1, 1980, through October 1, 
1980. Series HH bonds with issue dates of January 1, 1980, through 
October 1, 1980, were originally offered to yield 6.5 percent per annum, 
paid semiannually. The yield to original maturity was increased by 1 
percent, effective with the first full semiannual interest accrual 
period beginning on or after November 1, 1980, and an additional 1 
percent, effective with the first full semiannual interest accrual 
period beginning on or after May 1, 1981.
    (2) During extended maturity. The investment yield during the 10-
year extended maturity period authorized for Series HH bonds is 4 
percent per annum, paid semiannually, unless changed prior to the 
beginning of such period, for any Series HH bond that entered or enter 
such period on or after March 1, 1993; and, 6 percent per annum, paid 
semiannually, for any Series HH bond that entered into such period from 
January 1, 1990, through February 1, 1993.
    (f) Payment of interest. The interest on a Series HH bond is paid 
semiannually beginning six months from the issue date. Interest ceases 
at final maturity or, if the bond is redeemed before final maturity, as 
of the end of the interest period preceding the date of redemption. If 
the redemption date falls on an interest payment date, interest ceases 
on that date.
    (1) Bonds issued on or after October 1, 1989. Interest on Series HH 
bonds issued on or after October 1, 1989, will be paid by the automated 
clearing house (ACH) method to the registered owner or coowner's account 
at a financial institution, unless the Bureau of the Public Debt 
determines that extraordinary circumstances warrant payment by check or 
other means.
    (2) Bonds issued prior to October 1, 1989. Interest on Series HH 
bonds issued prior to October 1, 1989, will be paid as follows:
    (i) By check drawn to the order of the registered owner or both 
coowners; or
    (ii) Upon request, by the ACH method to the owner or coowner's 
account at a financial institution.
    (g) Rules governing payment of interest by the ACH method. 
Provisions contained in Sec. 353.31 of Department of the Treasury 
Circular, Public Debt Series No. 3-80, as amended (31 CFR part 353), 
apply to the submission of deposit account information for Series HH 
interest payments made on and after October 1, 1989, for which ACH 
payment:
    (1) Is required under paragraph (f)(1) of this section;
    (2) Is requested by an owner or coowner on or after October 1, 1989, 
pursuant to paragraph (f)(2) of this section; or
    (3) Was requested by an owner or coowner prior to October 1, 1989.
    Interest payments made by the ACH method on and after October 1, 
1989, will be processed in accordance with 31 CFR part 370.

(Approved by the Office of Management and Budget under control number 
1535-0094)
    (h) Tables of interest payments and redemption values. Tables 
showing the interest payments and redemption values of bonds issued 
under previous revisions of this Circular will be available from the 
Bureau of the Public Debt and designated Federal Reserve Banks.

[54 FR 40249, Sept. 29, 1989, as amended at 58 FR 60947, Nov. 18, 1993; 
59 FR 10540, Mar. 4, 1994]



Sec. 352.3  Registration and issue.

    (a) Registration. Series HH bonds may be registered as set forth in 
subpart B of 31 CFR part 353, also published as Department of the 
Treasury Circular, Public Debt Series No. 3-80.
    (b) Validity of issue. A bond is validly issued when it is 
registered as provided 31 CFR part 353, also published as Department of 
the Treasury Circular, Public Debt Series No. 3-80, and bears an issue 
date and appropriate validation indicia.

[[Page 314]]

    (c) Taxpayer identifying number. The inscription of a bond must 
include the taxpayer identifying number of the owner or first-named 
coowner. The taxpayer identifying number of the second-named coowner or 
beneficiary is not required but its inclusion is desirable.

[54 FR 40249, Sept. 29, 1989, as amended at 57 FR 14286, Apr. 17, 1992]



Sec. 352.4  Limitation on purchases.

    Series HH bonds issued under the terms of this Circular are not 
subject to a purchase limitation.



Sec. 352.5  Authorized issuing and paying agents.

    Series HH bonds may be issued or redeemed only by Federal Reserve 
Banks (see Sec. 352.13) and the Bureau of the Public Debt.

[54 FR 40249, Sept. 29, 1989, as amended at 59 FR 10540, Mar. 4, 1994]



Sec. 352.6  [Reserved]



Sec. 352.7  Issues on exchange.

    (a) Securities eligible for exchange. Owners may exchange United 
States Savings Bonds of Series E and EE and United States Savings Notes 
(Freedom Shares) at their current redemption values for Series HH bonds. 
Series E bonds and savings notes remain eligible for exchange for a 
period of one year from the month in which they reached final maturity. 
Series EE bonds become eligible for exchange six months after their 
issue dates.
    (b) Basis for issue. Series HH bonds will be issued on exchange by 
an authorized issuing agent upon receipt of a properly executed exchange 
application with eligible securities, and additional cash, if any, and 
any supporting evidence that may be required under the regulations. If 
eligible securities are submitted directly to a Federal Reserve Bank 
referred to in Sec. 351.13, each must bear a properly signed and 
certified request for payment. Checks in payment of additional cash 
needed to complete a transaction (see paragraph (d) of this section) 
must be drawn to the order of the Federal Reserve Bank.
    (c) Role of financial institutions. Department of the Treasury 
Circular No. 750, current revision (31 CFR part 321), authorizes 
financial institutions qualified as paying agents for savings bonds and 
notes to redeem eligible securities presented for exchange and to 
forward an exchange application and full payment to a Federal Reserve 
Bank referred to in Sec. 351.13 for the issue of Series HH bonds. The 
securities redeemed on exchange by such an institution must be 
securities which it is authorized to redeem for cash.
    (d) Computation of issue price. The total current redemption value 
of the eligible securities submitted for exchange in any one transaction 
must be $500 or more. If the current redemption value is an even 
multiple of $500, Series HH bonds must be issued in that exact amount. 
If the current redemption value exceeds, but is not an even multiple of, 
$500, the owner has the option either:
    (1) To add the cash necessary to bring the amount of the application 
to the next higher multiple of $500, or
    (2) To receive a payment to reduce the amount of the application to 
the next lower multiple of $500.
    (e) Registration. A Series HH bond issued on exchange may be 
registered in any form authorized in subpart B of Circular No. 3-80, 
subject to the following restrictions:
    (1) If the securities submitted for exchange are in single ownership 
form, the owner must be named as owner or first-named coowner on the 
Series HH bonds. A coowner or beneficiary may be named.
    (2) If the securities submitted for exchange are in coownership 
form, and one coowner is the ``principal coowner'', that person must be 
named as owner or first-named coowner on the Series HH bonds. A coowner 
or beneficiary may also be named. The ``principal coowner'' is the 
coowner who purchased the securities presented for exchange with his or 
her own funds, or received them as a gift, inheritance or legacy, or as 
a result of judicial proceedings, and had them reissued in coownership 
form, provided he or she has received no contribution in money or 
money's worth for designating the other coowner on the securities.
    (3) If the securities presented for exchange are in coownership 
form, and both coowners shared in their purchase

[[Page 315]]

or received them jointly as a gift, inheritance, or legacy or as a 
result of judicial proceedings, both persons must be named as coowners 
on the Series HH bonds.
    (4) If the securities presented for exchange are in beneficiary 
form, the owner must be named on the Series HH bonds as owner or first-
named coowner. If the owner is deceased, a surviving beneficiary must be 
named as owner or first-named coowner. In either case, a coowner or 
beneficiary may also be named.
    (f) Issue date. Series HH bonds issued on exchange will be dated as 
of the first day of the month in which the eligible securities presented 
for exchange are redeemed by an authorized paying agent, as evidenced in 
the payment stamp on the securities and the exchange application.
    (g) Tax-deferred exchanges. (1) Continuation of tax deferral. 
Pursuant to the provisions of the Internal Revenue Code of 1954, as 
amended, an owner who has not been reporting the interest on his or her 
Series E or EE bonds and savings notes on an accrual basis for Federal 
income tax purposes, and who exchanges those securities for Series HH 
bonds, may continue to defer reporting the interest on the securities 
exchanged until the taxable year in which the Series HH bonds received 
in the exchange reach final maturity, are redeemed, or are otherwise 
disposed of, whichever is earlier. A reissue transaction that affects 
any of the persons required to be named on the Series HH bonds, as set 
forth in paragraph (e) of this section, may result in termination of the 
tax deferral privilege.
    (2) Tax deferral legend. Each bond issued in a tax-deferred exchange 
shall bear a legend showing how much of its issue price represents 
interest on the securities exchanged. This interest must be treated as 
income for Federal income tax purposes and reported in accordance with 
paragraph (g)(1) of this section.
    (3) Reporting of interest paid to owner. To the extent that it 
represents interest earned on the securities presented for exchange, an 
amount paid to an owner in accordance with paragraph (d) of this section 
is reportable as income for Federal income tax purposes for the year in 
which it is paid. Pursuant to 26 CFR 1.6049.4, a paying agent is 
required to report interest income of $10 or more included in any amount 
paid in an exchange transaction to the payee and to the Internal Revenue 
Service on Form 1099-INT or an approved substitute. A separate report 
may be made for each exchange transaction in which interest in the 
amount of $10 or more is paid, or all interest paid in both cash 
redemption and exchange transactions may be aggregated and reported 
annually should the total amount be $10 or more.
    (h) Exchanges without tax deferral. The rules prescribed for 
exchanges under paragraphs (a) through (f) of this section also apply to 
exchanges by owners who report the interest earned on their bonds of 
Series E and EE and savings notes annually for Federal income tax 
purposes, or elect to report all such interest that was not previously 
reported for the taxable year of the exchange. Series HH bonds issued in 
a nontax-deferred exchange shall show a ``0'' in the tax-deferral 
legend.

[54 FR 40249, Sept. 29, 1989, as amended at 59 FR 10540, Mar. 4, 1994]



Sec. 352.8  Reinvestment of matured Series H bonds.

    (a) General. The proceeds of matured Series H bonds, whether 
purchased for cash or issued in exchange for other securities, may be 
reinvested in Series HH bonds. Tax deferral granted to interest earned 
on securities exchanged for Series H bonds may not be continued when the 
Series H bonds reach final maturity and their proceeds are reinvested in 
Series HH bonds. The amount appearing in the legend on a matured Series 
H bond on which tax deferral was granted must be reported for Federal 
income tax purposes for the year of such final maturity.
    (b) Rules. The reinvestment transaction will be subject to the rules 
governing exchanges, as set forth in Sec. 352.7 of this Circular, and 
the Series HH bonds issued on reinvestment will be identical in all 
respects with those issued in a non-tax-deferred exchange.



Sec. 352.9  Delivery of bonds.

    Authorized issuing agents will deliver Series HH bonds by mail at 
the

[[Page 316]]

risk and expense of the United States to the address given by the 
applicant, if it is within the United States, one of its territories or 
possessions, or the Commonwealth of Puerto Rico. No mail deliveries 
elsewhere will be made. Bonds acquired by a citizen of the United States 
residing abroad will be delivered only to such address in the United 
States as the applicant directs.



Sec. 352.10  Taxation.

    The interest paid on Series HH bonds is subject to all taxes imposed 
under the Internal Revenue Code of 1954, as amended. The bonds are 
subject to estate, inheritance, gift, or other excise taxes, whether 
Federal or State, but are exempt from all taxation now or hereafter 
imposed on the principal or interest by any State or any local taxing 
authority.



Sec. 352.11  Reservation as to issue of bonds.

    The Commissioner of the Public Debt, as delegate of the Secretary of 
the Treasury, reserves the right to reject any application for Series HH 
bonds, in whole or in part, and to refuse to issue or permit to be 
issued any bonds in any case or class of cases, if the action is deemed 
to be in the public interest. The Commissioner's action in such respect 
is final.



Sec. 352.12  Waiver.

    The Commissioner of the Public Debt, as delegate of the Secretary of 
the Treasury, may waive or modify any provision of this Circular in any 
particular case or class of cases for the convenience of the United 
States or in order to relieve any person or persons of unnecessary 
hardship if:
    (a) Such action would not be inconsistent with law or equity;
    (b) It does not impair any existing rights; and
    (c) The Commissioner is satisfied that such action would not subject 
the United States to any substantial expense or liability.



Sec. 352.13  Fiscal agents.

    (a) Federal Reserve Banks and Branches, referred to below, as fiscal 
agents of the United States, are authorized to perform such services as 
may be requested of them by the Secretary of the Treasury, or his or her 
delegate, in connection with the issue, servicing, and redemption of 
Series HH bonds.
    (b)(1) The following Federal Reserve Offices have been designated to 
provide savings bond services:

------------------------------------------------------------------------
                                     Reserve districts   Geographic area
          Servicing office                 served            served
------------------------------------------------------------------------
Federal Reserve Bank, Buffalo        New York, Boston.  CT, MA, ME, NH,
 Branch, P.O. Box 961, Buffalo, NY                       NJ (northern
 14240.                                                  half), NY (City
                                                         & State), RI,
                                                         VT, Puerto Rico
                                                         and Virgin
                                                         Islands.
Federal Reserve Bank, Pittsburgh     Cleveland,         DE, KY (eastern
 Branch, P.O. Box 867, Pittsburgh,    Philadelphia.      half), NJ
 PA 15230.                                               (southern
                                                         half), OH, PA,
                                                         WV (northern
                                                         panhandle).
Federal Reserve Bank of Richmond,    Richmond, Atlanta  AL, DC, FL, LA
 P.O. Box 27622, Richmond, VA 23261.                     (southern
                                                         half), MD, MS
                                                         (southern
                                                         half), NC, SC,
                                                         TN (eastern
                                                         half), VA, WV
                                                         (except
                                                         northern
                                                         panhandle).
Federal Reserve Bank of              Minneapolis,       IA, IL (northern
 Minneapolis, 250 Marquette Avenue,   Chicago.           half), IN
 Minneapolis, MN 55480.                                  (northern
                                                         half), MN, MT,
                                                         ND, SD, WI.
Federal Reserve Bank of Kansas       Dallas, San        AK, AR, AZ, CA,
 City, 925 Grand Avenue, Kansas       Francisco,         CO, HI, ID, IL
 City, MO 64198.                      Kansas City, St.   (southern
                                      Louis.             half), IN
                                                         (southern
                                                         half), KS, KY
                                                         (western half),
                                                         LA (northern
                                                         half), MO, MS
                                                         (northern
                                                         half), NE, NM,
                                                         NV, OK, OR, TN
                                                         (western half),
                                                         TX, WA, WY, UT
                                                         and GU.
------------------------------------------------------------------------

    (2) Until March 1, 1996, other Federal Reserve Offices may continue 
to provide some savings bond services, but such services will be phased 
out over the period prior to that date.

[59 FR 10541, Mar. 4, 1994]



Sec. 352.14  Reservation as to terms of offer.

    The Secretary of the Treasury may at any time or from time to time 
supplement or amend the terms of this offering of bonds.

[[Page 317]]

[GRAPHIC] [TIFF OMITTED] TC03NO91.008


[58 FR 60948, Nov. 18, 1993]



PART 353--REGULATIONS GOVERNING UNITED STATES SAVINGS BONDS, SERIES EE AND HH--Table of Contents




                     Subpart A--General Information

Sec.
353.0  Applicability.
353.1  Official agencies.
353.2  Definitions.

                         Subpart B--Registration

353.5  General rules.
353.6  Restrictions on registration.
353.7  Authorized forms of registration.
353.8  Chain letters prohibited.

               Subpart C--Limitations on Annual Purchases

353.10  Amounts which may be purchased.
353.11  Computation of amount.
353.12  Disposition of excess.
353.13  Employee plans--Conditions of eligibility.

              Subpart D--Limitations on Transfer or Pledge

353.15  Transfer.
353.16  Pledge.

                     Subpart E--Judicial Proceedings

353.20  General.
353.21  Payment to judgment creditors.
353.22  Payment or reissue pursuant to judgment.
353.23  Evidence.
353.24  Payment pursuant to judicial or administrative forfeiture.

Subpart F--Relief for Loss, Theft, Destruction, Mutilation, Defacement, 
                         or Nonreceipt of Bonds

353.25  General.

[[Page 318]]

353.26  Application for relief--After receipt of bond.
353.27  Application for relief--Nonreceipt of bond.
353.28  Recovery or receipt of bond before or after relief is granted.
353.29  Adjudication of claims.

                           Subpart G--Interest

353.30  Series EE bonds.
353.31  Series HH bonds.

                Subpart H--General Provisions for Payment

353.35  Payment (redemption).
353.36  Payment during life of sole owner.
353.37  Payment during lives of both coowners.
353.38  Payment during lifetime of owner of beneficiary bond.
353.39  Surrender for payment.
353.40  Special provisions for payment.
353.41  Partial redemption.
353.42  Nonreceipt or loss of check issued in payment.
353.43  Effective date of request for payment.
353.44  Withdrawal of request for payment.

             Subpart I--Reissue and Denominational Exchange

353.45  General.
353.46  Effective date of request for reissue.
353.47  Authorized reissue--during lifetime.
353.48  Restrictions on reissue.
353.49  Correction of errors.
353.50  Change of name.
353.51  Requests for reissue.

                     Subpart J--Certifying Officers

353.55  Individuals authorized to certify.
353.56  General instructions and liability.
353.57  When a certifying officer may not certify.
353.58  Forms to be certified.

    Subpart K--Minors, Incompetents, Aged Persons, Absentees, et al.

353.60  Payment to representative of an estate.
353.61  Payment after death.
353.62  Payment to minors.
353.63  Payment to a parent or other person on behalf of a minor.
353.64  Payment, reinvestment, or exchange--voluntary guardian of an 
          incapacitated person.
353.65  Reissue.

            Subpart L--Deceased Owner, Coowner or Beneficiary

353.70  General rules governing entitlement.
353.71  Estate administered.
353.72  Estate not administered.

                         Subpart M--Fiduciaries

353.75  Payment or reissue during the existence of the fiduciary estate.
353.76  Payment or reissue after termination of the fiduciary estate.
353.77  Exchanges by fiduciaries.

     Subpart N--Private Organizations (Corporations, Associations, 
 Partnerships, et cetera) and Governmental Agencies, Units and Officers

353.80  Payment to corporations or unincorporated associations.
353.81  Payment to partnerships.
353.82  Reissue or payment to successors of corporations, unincorporated 
          associations, or partnerships.
353.83  Reissue or payment on dissolution of corporation or partnership.
353.84  Payment to certain institutions.
353.85  Reissue in name of trustee or agent for reinvestment purposes.
353.86  Reissue upon termination of investment agency.
353.87  Payment to governmental agencies, units, or their officers.

                   Subpart O--Miscellaneous Provisions

353.90  Waiver of regulations.
353.91  Additional requirements; bond of indemnity.
353.92  Supplements, amendments, or revisions.

    Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3105, 3125.

    Source: 44 FR 76441, Dec. 26, 1979, unless otherwise noted.



                     Subpart A--General Information



Sec. 353.0  Applicability.

    The regulations in this circular, Department of the Treasury 
Circular, Public Debt Series No. 3-80, govern United States Savings 
Bonds of Series EE and Series HH. These bonds bear issue dates of 
January 1, 1980, or thereafter. The regulations in Department of the 
Treasury Circular No. 530, current revision (31 CFR part 315), govern 
all other United States Savings Bonds and Savings Notes.



Sec. 353.1  Official agencies.

    (a) The Bureau of the Public Debt of the Department of the Treasury 
is responsible for administering the Savings Bonds Program. Authority to 
process transactions has been delegated to Federal Reserve Banks and 
Branches in

[[Page 319]]

the list in paragraph (b) of this section, as fiscal agents of the 
United States.
    (b) Communications concerning transactions and requests for forms 
should be addressed to:
    (1) A Federal Reserve Bank or Branch in the list below; the Bureau 
of the Public Debt, 200 Third Street, Parkersburg, WV 26101; or the 
Bureau of the Public Debt, Washington, DC 20226.
    (2)(i) The following Federal Reserve Offices have been designated to 
provide savings bond services:

------------------------------------------------------------------------
                                     Reserve districts   Geographic area
          Servicing office                 served            served
------------------------------------------------------------------------
Federal Reserve Bank, Buffalo        New York, Boston.  CT, MA, ME, NH,
 Branch, P.O. Box 961, Buffalo, NY                       NJ (northern
 14240.                                                  half), NY (City
                                                         & State), RI,
                                                         VT, Puerto Rico
                                                         and Virgin
                                                         Islands.
Federal Reserve Bank, Pittsburgh     Cleveland,         DE, KY (eastern
 Branch, P.O. Box 867, Pittsburgh,    Philadelphia.      half), NJ
 PA 15230.                                               (southern
                                                         half), OH, PA,
                                                         WV (northern
                                                         panhandle).
Federal Reserve Bank of Richmond,    Richmond, Atlanta  AL, DC, FL, LA
 P.O. Box 27622, Richmond, VA 23261.                     (southern
                                                         half), MD, MS
                                                         (southern
                                                         half), NC, SC,
                                                         TN (eastern
                                                         half), VA, WV
                                                         (except
                                                         northern
                                                         panhandle).
Federal Reserve Bank of              Minneapolis,       IA, IL (northern
 Minneapolis, 250 Marquette Avenue,   Chicago.           half), IN
 Minneapolis, MN 55480.                                  (northern
                                                         half), MN, MT,
                                                         ND, SD, WI.
Federal Reserve Bank of Kansas       Dallas, San        AK, AR, AZ, CA,
 City, 925 Grand Avenue, Kansas       Francisco,         CO, HI, ID, IL
 City, MO 64198.                      Kansas City, St.   (southern
                                      Louis.             half), IN
                                                         (southern
                                                         half), KS, KY
                                                         (western half),
                                                         LA (northern
                                                         half), MO, NE,
                                                         NM, NV, OK, OR,
                                                         TN (western
                                                         half), TX, WA,
                                                         WY, UT and GU.
------------------------------------------------------------------------

    (ii) Until March 1, 1996, other Federal Reserve Offices may continue 
to provide some savings bond services, but such services will be phased 
out over the period prior to that date.
    (c) Notices and documents must be filed with the agencies referred 
to above and as indicated in these regulations.

[44 FR 76441, Dec. 26, 1979, as amended at 59 FR 10541, Mar. 4, 1994]



Sec. 353.2  Definitions.

    (a) Bond means a United States Savings Bond of Series EE or HH, 
unless the context indicates otherwise.
    (b) Incompetent means an individual who is incapable of handling his 
or her business affairs because of a legal, mental or medical 
disability, except that a minor is not an incompetent solely because of 
age.
    (c) Issuing agent means an organization that has been qualified 
under the provisions of Department of the Treasury Circular, Public Debt 
Series No. 4-67, current revision (31 CFR part 317), to issue savings 
bonds.
    (d) Paying agent means a financial institution that has been 
qualified under the provisions of Department of the Treasury Circular 
No. 750, current revision (31 CFR part 321), to make payment of savings 
bonds.
    (e) Payment means redemption, unless otherwise indicated by context.
    (f) Person means any legal entity including, but without limitation, 
an individual, corporation (public or private), partnership, 
unincorporated association, or fiduciary estate.
    (g) Personal trust estates means trust estates established by 
natural persons in their own right for the benefit of themselves or 
other natural persons in whole or in part, and common trust funds 
comprised in whole or in part of such trust estates.
    (h) Reissue means the cancellation and retirement of a bond and the 
issuance of a new bond or bonds of the same series, same issue date, and 
same total face amount.
    (i) Representative of the estate of a minor, incompetent, aged 
person, absentee, et al. means the court-appointed or otherwise 
qualified person, regardless of title, who is legally authorized to act 
for the individual. The term does not include parents in their own 
right, voluntary or natural guardians, or the executors or 
administrators of decedents' estates.
    (j) Surrender means the actual receipt of a bond with an appropriate 
request for payment or reissue by either a Federal Reserve Bank or 
Branch, the Bureau of the Public Debt, or, if a paying agent is 
authorized to handle the

[[Page 320]]

transaction, the actual receipt of the bond and the request for payment 
by the paying agent.
    (k) Taxpayer identifying number means a social security account 
number or an employer identification number.
    (l) Voluntary guardian means an individual who is recognized as 
authorized to act for an incompetent, as provided by Sec. 353.64.



                         Subpart B--Registration



Sec. 353.5  General rules.

    (a) Registration is conclusive of ownership. Savings bonds are 
issued only in registered form. The registration must express the actual 
ownership of, and interest in, the bond. The registration is conclusive 
of ownership, except as provided in Sec. 353.49.
    (b) Requests for registration. Registrations requested must be 
clear, accurate and complete, conform substantially with one of the 
forms set forth in this subpart, and include the taxpayer identifying 
number of the owner or first-named coowner. The taxpayer identifying 
number of the second-named coowner or beneficiary is not required but 
its inclusion is desirable. The registration of all bonds owned by the 
same person, organization, or fiduciary should be uniform with respect 
to the name of the owner and any description of the fiduciary capacity. 
An individual should be designated by the name he or she is ordinarily 
known by or uses in business, including at least one full given name. 
The name may be preceded or followed by any applicable title, such as 
Miss, Mr., Mrs., Ms., Dr., Rev., M.D., or D.D.. A suffix, such as Sr. or 
Jr., must be included when ordinarily used or when necessary to 
distinguish the owner from another member of his family. A married 
woman's own given name, not that of her husband, must be used; for 
example, Mary A. Jones or Mrs. Mary A. Jones, NOT Mrs. Frank B. Jones. 
The address must include, where appropriate, the number and street, 
route, or any other local feature, city, State, and ZIP Code.
    (c) Inscription of bonds purchased as gifts. If the bonds are 
purchased as gifts, awards, prizes, etc., and the taxpayer identifying 
number of the intended owners is not known, the purchaser's number must 
be furnished. Bonds so inscribed will not be associated with the 
purchaser's own holdings. A bond registered in the name of a purchaser 
with another person as coowner or beneficiary is not considered a gift 
or an award. If the purchaser so requests, a bond may be inscribed to 
provide a ``Mail to'' instruction, followed by a delivery name and 
address. No rights of ownership are conferred on such designee.

[44 FR 76441, Dec. 26, 1979, as amended at 55 FR 575, Jan. 5, 1990]



Sec. 353.6  Restrictions on registration.

    (a) Natural persons. Only an individual in his or her own right may 
be designated as coowner or beneficiary along with any other individual, 
whether on original issue or reissue, except as provided in 
Sec. 353.7(f).
    (b) Residence. The designation of an owner or first-named coowner is 
restricted, on original issue only, to persons (whether individuals or 
others) who are:
    (1) Residents of the United States, its territories or possessions, 
or the Commonwealth of Puerto Rico;
    (2) Citizens of the United States residing abroad;
    (3) Civilian employees of the United States or members of its armed 
forces, regardless of their residence or citizenship; and
    (4) Residents of Canada or Mexico who work in the United States but 
only if the bonds are purchased on a payroll savings plan and the owner 
provides a taxpayer identifying number.

A nonresident alien may be designated coowner or beneficiary or, on 
authorized reissue, owner, unless the nonresident alien is a resident of 
an area with respect to which the Department of the Treasury restricts 
or regulates the delivery of checks drawn against funds of the United 
States or its agencies or instrumentalities. See Department of the 
Treasury Circular No. 655, current revision (31 CFR part 211). 
Registration is not permitted in any form which includes the name of any 
alien who is a resident of any restricted area.
    (c) Minors. (1) Minors may purchase with their wages, earnings, or 
other funds belonging to them and under

[[Page 321]]

their control bonds registered in their names alone or with a coowner or 
beneficiary.
    (2) Bonds purchased by another person with funds belonging to a 
minor not under legal guardianship or similar fiduciary estate must be 
registered, without a coowner or beneficiary, in the name of the minor 
or a natural guardian on behalf of a minor.
    (3) Bonds purchased with funds of another may be registered to name 
the minor as owner, coowner, or beneficiary. If the minor is under legal 
guardianship or similar fiduciary estate, the registration must include 
an appropriate reference to it.
    (4) Bonds purchased as a gift to a minor under a gift-to-minors 
statute must be registered as prescribed by the statute and no coowner 
or beneficiary may be named.
    (5) Bonds purchased by a representative of a minor's estate must be 
registered in the name of the minor and must include in the registration 
an appropriate reference to the guardianship or similar fiduciary 
estate. Bonds purchased by a representative of the estates of two or 
more minors, even though appointed in a single proceeding, must be 
registered in the name of each minor separately with appropriate 
reference to the guardianship or similar fiduciary estate.
    (d) Incompetents. Bonds may be registered to name as owner, coowner, 
or beneficiary an incompetent for whose estate a guardian or similar 
representative has been appointed, except that a coowner or beneficiary 
may not be named on bonds purchased with funds belonging to the 
incompetent. The registration must include appropriate reference to the 
guardianship or similar fiduciary estate. Bonds should not be registered 
in the name of an incompetent unless there is a representative for his 
or her estate, except as provided in Sec. 353.64.

[44 FR 76441, Dec. 26, 1979, as amended at 63 FR 64551, Nov. 20, 1998]



Sec. 353.7  Authorized forms of registration.

    Subject to any limitations or restrictions contained in these 
regulations on the right of any person to be named as owner, coowner, or 
beneficiary, bonds should be registered as indicated below. A savings 
bond inscribed in the form not substantially in agreement with one of 
the forms authorized by this subpart is not considered validly issued.
    (a) Natural persons. A bond may be registered in the names of 
individuals in their own right, but only in one of the forms authorized 
by this paragraph.
    (1) Single ownership form. A bond may be registered in the name of 
one individual. Example:

John A. Jones 123-45-6789.

    (2) Coownership form. A bond may be registered in the names of two 
individuals in the alternative as coowners. The form of registration ``A 
and B'' is not authorized. Examples:

John A. Jones 123-45-6789 or Ella S. Jones 987-65-4321.
John A. Jones 123-45-6789 or (Miss, Ms. or Mrs.) Ella S. Jones.
Ella S. Jones 987-65-4321 or John A. Jones.

    (3) Beneficiary form. A bond may be registered in the name of one 
individual payable on death to another. ``Payable on death to'' may be 
abbreviated to ``P.O.D.'' Examples:

John A. Jones 123-45-6789 payable on death to Mrs. Ella S. Jones.
John A. Jones 123-45-6789 P.O.D. Ella S. Jones 987-65-4321.

    (b) Fiduciaries (including legal guardians and similar 
representatives, certain custodians, natural guardians, executors, 
administrators, and trustees)--(1) General. A bond may be registered in 
the name of any person or persons or any organization acting as 
fiduciary of a single fiduciary estate, but not where the fiduciary will 
hold the bond merely or principally as security for the performance of a 
duty, obligation, or service. Registration should conform to a form 
authorized by this paragraph. A coowner or beneficiary may be named only 
in accordance with the applicable provisions of Sec. 353.6 (c) and (d). 
A common trust fund established and maintained by a financial 
institution authorized to act as a fiduciary will be considered a single 
fiduciary estate within the meaning of these regulations.

[[Page 322]]

    (2) Legal guardians, conservators, similar representatives, certain 
custodians. A bond may be registered in the name and title or capacity 
of the legally appointed or authorized representative of the estate of a 
minor, incompetent, aged or infirm person, absentee, et al., or in the 
name of that individual followed by an appropriate reference to the 
estate. Examples:

Tenth National Bank, guardian (or conservator, trustee, etc.) of the 
estate of George N. Brown 123-45-6789, a minor (or an incompetent, aged 
person, infirm person, or absentee).
Henry C. Smith, conservator of the estate of John R. White 123-45-6789, 
an adult, pursuant to Sec. 633.572 of the Iowa Code.
John F. Green 123-45-6789, a minor (or an incompetent) under 
custodianship by designation of the Veterans Administration.
Frank M. Redd 123-45-6789, an incompetent for whom Eric A. Redd has been 
designated trustee by the Department of the Army pursuant to 37 U.S.C. 
602.
Arnold A. Ames, as custodian for Barry B. Bryan 123-45-6789, under the 
California Uniform Gifts to Minors Act.
Thomas J. Reed, as custodian for Lawrence W. Reed 123-45-6789, a minor, 
under laws of Georgia.
Richard A. Rowe 123-45-6789, for whom Reba L. Rowe is representative 
payee for social security benefits (or black lung benefits, as the case 
may be). (If the beneficiary is a minor, the words ``a minor'' should 
appear immediately after the social security number.)
Henry L. Green 123-45-6789 or George M. Brown, a minor under legal 
guardianship of the Tenth National Bank.
Henry L. Green 123-45-6789 P.O.D. George M. Brown, a minor under legal 
guardianship of the Tenth National Bank.
Redd State Hospital and School, selected payee for John A. Jones 123-45-
6789, a Civil Service annuitant, pursuant to 5 U.S.C. 8345(e).

    (3) Natural guardians. A bond may be registered in the name of 
either parent (natural and adoptive) of a minor, as natural guardian. 
The registration of a bond in this form is considered as establishing a 
fiduciary relationship. A coowner or beneficiary may be named but only 
if the funds used to purchase the bonds do not belong to the minor. 
Examples:

John A. Jones, as natural guardian for Henry M. Jones 123-45-6789.
Melba Smith, as natural guardian for Thelma Smith 123-45-6789 P.O.D. 
Bartholomew Smith.

    (4) Executors and administrators. A bond may be registered in the 
name of the representative appointed by a court to act for an estate of 
a decedent, or in the name of an executor authorized to administer a 
trust under the terms of a will although not named trustee. The name and 
capacity of all the representatives as shown in the letters of 
appointment must be included in the registration and be followed by an 
adequate indentifying reference to the estate. Examples:

John H. Smith and Calvin N. Jones, executors of the will (or 
administrators of the estate) of Robert J. Smith, deceased, 12-3456789.
John H. Smith, executor of the will of Robert J. Smith, deceased, in 
trust for Mrs. Jane L. Smith, with remainder over, 12-3456789.

    (5) Trustees or life tenants under wills, deeds of trust, 
agreements, or similar instruments. A bond may be registered in the name 
and title of the trustee of a trust estate, or in the name of a life 
tenant, followed by an adequate identifying reference to the authority 
governing the trust or life tenancy. Examples:

Thomas J. White and Tenth National Bank, trustees under the will of 
Robert J. Smith, deceased, 12-3456789.
Jane N. Black 123-45-6789, life tenant under the will of Robert J. 
Black, deceased.
Tenth National Bank, trustee under agreement with Paul E. White, dated 
2/1/80, 12-3456789.
Carl A. Black and Henry B. Green, trustees under agreement with Paul E. 
White, dated 2/1/80, 12-3456789.
Paul E. White, trustee under declaration of trust dated 2/1/80, 12-
3456789.

    (i) If the trust instrument designates by title only an officer of a 
board or an organization as trustee, only the title of the officer 
should be used. Example:

Chairman, Board of Trustees, First Church of Christ, Scientist, of 
Chicago, Illinois, in trust under the will of Robert J. Smith, deceased, 
12-3456789.

    (ii) The names of all trustees, in the form used in the trust 
instrument, must be included in the registration, except as follows:
    (A) If there are several trustees designated as a board or they are 
required to act as a unit, their names may be omitted and the words 
``Board of

[[Page 323]]

Trustees'' substituted for the word ``trustee''. Example:

Board of Trustees of Immediate Relief Trust of Federal Aid Association, 
under trust indenture dated 2/1/80, 12-3456789.

    (B) If the trustees do not constitute a board or are not required to 
act as a unit, and are too numerous to be designated in the registration 
by names and title, some or all the names may be omitted. Examples:

John A. Smith, Henry B. Jones, et al., trustees under the will of Edwin 
O. Mann, deceased, 12-3456789.
Trustees under the will of Edwin O. Mann, deceased, 12-3456789.

    (6) Employee thrift, savings, vacation and similar plans. A bond may 
be registered in the name and title, or title alone, of the trustee of 
an eligible employee thrift, savings, vacation or similar plan, as 
defined in Sec. 353.13(a). If the instrument creating the trust provides 
that the trustees shall serve for a limited term, their names may be 
omitted. Examples:

Tenth National Bank, trustee of Pension Fund of Safety Manufacturing 
Company, U/A with the company, dated March 31, 1980, 12-3456789.
Trustees of Retirement Fund of Safety Manufacturing Company, under 
directors' resolution adopted March 31, 1980, 12-3456789.
County Trust company, trustee of the Employee Savings Plan of Jones 
Company, Inc., U/A dated January 17, 1980, 12-3456789.
Trustee of the Employee Savings Plan of Brown Brothers, Inc., U/A dated 
January 20, 1980, 12-3456789.

    (7) Funds of lodges, churches, societies, or similar organizations. 
A bond may be registered in the title of the trustees, or a board of 
trustees, holding funds in trust for a lodge, church, or society, or 
similar organization, whether or not incorporated. Examples:

Trustees of the First Baptist Church, Akron, OH, acting as a Board under 
section 15 of its bylaws, 12-3456789.
Trustees of Jamestown Lodge No. 1000, Benevolent and Protective Order of 
Elks, under section 10 of its bylaws, 12-3456789.
Board of Trustees of Lotus Club, Washington, IN, under Article 10 of its 
constitution, 12-3456789.

    (8) Investment agents for religious, educational, charitable and 
non-profit organizations. A bond may be registered in the name of a 
bank, trust company, or other financial institution, or an individual, 
as agent under an agreement with a religious, educational, charitable or 
non-profit organization, whether or not incorporated, if the agent holds 
funds for the sole purpose of investing them and paying the income to 
the organization. The name and designation of the agent must be followed 
by an adequate reference to the agreement. Examples:

Tenth National Bank, fiscal agent U/A with the Evangelical Lutheran 
Church of the Holy Trinity, dated 12/28/80, 12-3456789.
Sixth Trust Company, Investment Agent
U/A dated September 16, 1980, with Central City Post, Department of 
Illinois, American Legion, 12-3456789.
John Jones, Investment Agent U/A dated September 16, 1980, with Central 
City Post, Department of Illinois, American Legion, 12-3456789.

    (9) Funds of school groups or activities. A bond may be registered 
in the title of the principal or other officer of a public, private, or 
parochial school holding funds in trust for a student body fund or for a 
class, group, or activity. If the amount purchased for any one fund does 
not exceed $2,500 (face amount), no reference need be made to a trust 
instrument. Examples:

Principal, Western High School, in trust for the Class of 1980 Library 
Fund, 12-3456789.
Director of Athletics, Western High School, in trust for Student 
Activities Association, under resolution adopted 5/12/80, 12-3456789.

    (10) Public corporations, bodies, or officers as trustees. A bond 
may be registered in the name of a public corporation or a public body, 
or in the title of a public officer, acting as trustee under express 
authority of law, followed by an appropriate reference to the statute 
creating the trust. Examples:

Rhode Island Investment Commission, trustee of the General Sinking Fund 
under Title 35, Ch. 8, Gen. Laws of Rhode Island.
    Superintendent of the Austin State Hospital Annex, in trust for the 
Benefit Fund under Article 3183C, Vernon's Civ. Stat. of Texas Ann.

    (c) Private organizations (corporations, associations, 
partnerships)--(1) General. A bond may be registered in the name of any 
private organization in its own right. The full legal name of the 
organization as set forth in its charter, articles of incorporation, 
constitution,

[[Page 324]]

partnership agreement, or other authority from which its powers are 
derived, must be included in the registration and may be followed by a 
parenthetical reference to a particular account other than a trust 
account.
    (2) Corporations. A bond may be registered in the name of a 
business, fraternal, religious, non-profit, or other private 
corporation. The words ``a corporation'' must be included in he 
registration unless the fact of incorporation is shown in the name. 
Examples:

Smith Manufacturing Company, a corporation, 12-3456789.
    Green and Redd, Inc., 12-3456789 (Depreciation Acct.)

    (3) Unincorporated associations. A bond may be registered in the 
name of a club, lodge, society, or a similar self-governing association 
which is unincorporated. The words ``an unincorporated association'' 
must be included in the registration. This form of registration must not 
be used for a trust fund, board of trustees, a partnership, or a sole 
proprietorship. If the association is chartered by or affiliated with a 
parent organization, the name or designation of the subordinate or local 
organization must be given first, followed by the name of the parent 
organization. The name of the parent organization may be placed in 
parentheses and, if well known, may be abbreviated. Examples:

The Lotus Club, an unincorporated association, 12-3456789.
Local 447, Brotherhood of Railroad Trainmen, an unincorporated 
association, 12-3456789.
Eureka Lodge 317 (A.F. and A.M.), an unincorporated association, 12-
3456789.

    (4) Partnerships. A bond may be registered in the name of a 
partnership. The words ``a partnership'' must be included in the 
registration. Examples:

Smith & Jones, a partnership, 12-3456789.
Acme Novelty Company, a partnership, 12-3456789.

    (5) Sole Proprietorships. A bond may be registered in the name of an 
individual who is doing business as a sole proprietor. A reference may 
be made to the trade name under which the business is conducted. 
Example:

John Jones DBA Jones Roofing Company 123-45-6789.

    (d) Institutions (churches, hospitals, homes, schools, etc.). A bond 
may be registered in the name of a church, hospital, home, school, or 
similar institution conducted by a private organization or by private 
trustees, regardless of the manner in which it is organized or governed 
or title to its property is held. Descriptive words, such as ``a 
corporation'' or ``an unincorporated association'', must not be included 
in the registration. Examples:

Shriners' Hospital for Crippled Children, St. Louis, MO, 12-3456789.
St. Mary's Roman Catholic Church, Albany, NY, 12-3456789.
Rodeph Shalom Sunday School, Philadelphia, PA, 12-3456789.

    (e) States, public bodies and corporations, and public officers. A 
bond may be registered in the name of a State, county, city, town, 
village, school district, or other political entity, public body, or 
corporation established by law (including a board, commission, 
administration, authority, or agency) which is the owner or official 
custodian of public funds, other than trust funds, or in the full legal 
title of the public officer having custody of the funds. Examples:

State of Maine.
Town of Rye, NY (Street Improvement Fund).
Maryland State Highway Administration.
Treasurer, City of Chicago.

    (f) The United States Treasury. A person who desires to have a bond 
become the property of the United States upon his or her death may 
designate the United States Treasury as coowner or beneficiary. 
Examples:

George T. Jones 123-45-6789 or the United States Treasury.
George T. Jones 123-45-6789 P.O.D. the United States Treasury.



Sec. 353.8  Chain letters prohibited.

    The issuance of bonds in the furtherance of a chain letter or 
pyramid scheme is considered to be against the public interest and is 
prohibited.

[[Page 325]]



               Subpart C--Limitations on Annual Purchases



Sec. 353.10  Amounts which may be purchased.

    The amount of savings bonds of Series EE and HH which may be 
purchased and held, in the name of any one person in any one calendar 
year, is computed according to the provisions of Sec. 353.11 and is 
limited as follows:
    (a) Series EE--(1) General annual limitation. $30,000 (face amount).
    (2) Special limitation. $4,000 (face amount) multiplied by the 
highest number of employees participating in an eligible employee plan, 
as defined in Sec. 353.13, at any time during the calendar year in which 
the bonds are issued.
    (b) Series HH--(1) General annual limitation. $20,000 (face amount).
    (2) Special limitation. $200,000 (face amount) for bonds received in 
a calendar year as gifts by an organization which at the time of 
purchase was an exempt organization under the terms of 26 CFR 
1.501(c)(3)-1.



Sec. 353.11  Computation of amount.

    (a) General. The purchases of bonds in the name of any person in an 
individual capacity are computed separately from purchases in a 
fiduciary capacity. A pension or retirement fund, or an investment, 
insurance, annuity, or similar fund or trust is regarded as an entity, 
regardless of the number of beneficiaries or the manner in which their 
shares or interests are established, determined, or segregated.
    (b) Bonds included in computation. In computing the purchases for 
each person, the following outstanding bonds are included:
    (1) All bonds registered in the name of that person alone;
    (2) All bonds registered in the name of the representative of the 
estate of that person; and
    (3) All bonds registered in the name of that person as coowner. 
However, in computing the amount of bonds of each series held in 
coownership form, the limitation may be applied to the holdings of 
either of the coowners or apportioned between them.
    (c) Bonds excluded from computation. In computing the purchases for 
each person, the following are excluded:
    (1) Bonds on which that person is named beneficiary;
    (2) Bonds to which that person has become entitled--
    (i) Under Sec. 353.70 as surviving beneficiary upon the death of the 
registered owner;
    (ii) As an heir or a legatee of the deceased owner;
    (iii) By virtue of the termination of a trust or the happening of a 
similar event;
    (3) Bonds issued in an authorized exchange or reinvestment; and
    (4) Bonds that are purchased and redeemed within the same calendar 
year.



Sec. 353.12  Disposition of excess.

    If any person at any time has savings bonds issued during any one 
calendar year in excess of the prescribed amount, instructions should be 
obtained from the Bureau of the Public Debt, Parkersburg, WV 26101, for 
appropriate adjustment of the excess. Under the conditions specified in 
Sec. 353.90, the Commissioner of the Public Debt may permit excess 
purchases to stand in any particular case or class of cases.



Sec. 353.13  Employee plans--Conditions of eligibility.

    (a) Definition of plan. Employee thrift, savings, vacation and 
similar plans are contributory plans established by the employer for the 
exclusive and irrevocable benefit of its employees or their 
beneficiaries. Each plan must afford employees the means of making 
regular savings from their wages through payroll deductions and provide 
for employer contributions to be added to these savings.
    (b) Definition of terms used in this section. (1) The term assets 
means all the employees' contributions and assets purchased with them 
and the employer's contributions and assets purchased with them, as well 
as accretions, such as dividends on stock, the increment in value on 
bonds and all other income; but, notwithstanding any other provision of 
this section, the right to demand and receive all assets credited to the 
account of an employee shall not

[[Page 326]]

be construed to require the distribution of assets in kind when it would 
not be possible or practicable to make such a distribution; for example, 
Series EE bonds may not be reissued in unauthorized denominations.
    (2) The word beneficiary means: (i) The person or persons, if any, 
designated by the employee in accordance with the terms of the plan to 
receive the benefits of the plan upon the employee's death or (ii) the 
estate of the employee.
    (c) Conditions of eligibility. An employee plan must conform to the 
following rules in order to be eligible for the special limitation 
provided in Sec. 353.10.
    (1) Crediting of assets. All assets of a plan must be credited to 
the individual accounts of participating employees and may be 
distributed only to them or their beneficiaries, except as provided in 
paragraph (c)(3) of this section.
    (2) Purchase of bonds. Bonds may be purchased only with assets 
credited to the accounts of participating employees and only if the 
amount taken from any account at any time for that purpose is equal to 
the purchase price of a bond or bonds in an authorized denomination or 
denominations, and shares in the bonds are credited to the accounts of 
the individuals from which the purchase price was derived, in amounts 
corresponding with their shares. For example, if $50 credited to the 
account of John Jones is commingled with funds credited to the accounts 
of other employees to make a total of $5,000 with which a Series EE bond 
in the denomination of $10,000 (face amount) is purchased in December 
1980 and registered in the name and title of the trustee, the plan must 
provide, in effect, that John Jones' account be credited to show that he 
is the owner of a Series EE bond in the denomination of $100 (face 
amount) bearing an issue date of December 1, 1980.
    (3) Irrevocable right of withdrawal. Each participating employee has 
an irrevocable right to request and receive from the trustee all assets 
credited to the employee's account (or their value, if the employee 
prefers) without regard to any conditions other than the loss or 
suspension of the privilege of participating further in the plan. A plan 
may limit or modify such right in any manner required for qualification 
of the plan under section 401 of the Internal Revenue Code of 1954, as 
amended (26 U.S.C. section 401).
    (4) Rights of beneficiary. Upon the death of an employee, his or her 
beneficiary shall have the absolute and unconditional right to demand 
and receive from the trustee all assets credited to the account of the 
employee or their value, if he or she so prefers.
    (5) Reissue or payment upon distribution. When settlement is made 
with an employee or his or her beneficiary with respect to any bond 
registered in the name and title of the plan trustee in which the 
employee has a share, the bond must be paid or reissued to the extent of 
the share. If an employee or the beneficiary is to receive distribution 
in kind, bonds bearing the same issue dates as those credited to the 
employee's account will be reissued in the name of the employee or the 
employee's beneficiary to the extent entitled, in authorized 
denominations, in any authorized form of registration, upon the request 
and certification of the trustee.
    (d) Application for special limitation. A trustee of an employee 
plan who desires to purchase bonds under the special limitation should 
submit to the designated Federal Reserve Bank or Branch a copy of:
    (1) The plan, (2) any instructions issued under the plan that 
concern Series EE bonds, and (3) the trust agreement, in order to 
establish the plan's eligibility.
    (e) Vacation plans. Savings bonds may be purchased under certain 
vacation plans. Questions concerning the eligibility of these plans to 
purchase bonds in excess of the general limitation should be addressed 
to the Bureau of the Public Debt, Parkersburg, WV 26101.

(31 U.S.C. 3105 and 3121)

[44 FR 76441, Dec. 26, 1979, as amended at 48 FR 55458, Dec. 13, 1983; 
59 FR 10541, Mar. 4, 1994; 63 FR 64551, Nov. 20, 1998]

[[Page 327]]



              Subpart D--Limitations on Transfer or Pledge



Sec. 353.15  Transfer.

    Savings bonds are not transferable and are payable only to the 
owners named on the bonds, except as specifically provided in these 
regulations and then only in the manner and to the extent so provided.



Sec. 353.16  Pledge.

    A savings bond may not be hypothecated, pledged, or used as security 
for the performance of an obligation.



                     Subpart E--Judicial Proceedings



Sec. 353.20  General.

    (a) The Department of the Treasury will not recognize a judicial 
determination that gives effect to an attempted voluntary transfer inter 
vivos of a bond, or a judicial determination that impairs the rights of 
survivorship conferred by these regulations upon a coowner or 
beneficiary. All provisions of this subpart are subject to these 
restrictions.
    (b) The Department of the Treasury will recognize a claim against an 
owner of a savings bond and conflicting claims of ownership of, or 
interest in, a bond between coowners or between the registered owner and 
the beneficiary, if established by valid judicial proceedings, but only 
as specifically provided in this subpart. Section 353.23 specifies the 
evidence required to establish the validity of the judicial proceedings.
    (c) The Department of the Treasury and the agencies that issue, 
reissue, or redeem savings bonds will not accept a notice of an adverse 
claim or notice of pending judicial proceedings, nor undertake to 
protect the interests of a litigant not in possession of a savings bond.



Sec. 353.21  Payment to judgment creditors.

    (a) Purchaser or officer under levy. The Department of the Treasury 
will pay (but not reissue) a savings bond to the purchaser at a sale 
under a levy or to the officer authorized under appropriate process to 
levy upon property of the registered owner or coowner to satisfy a money 
judgment. Payment will be made only to the extent necessary to satisfy 
the money judgment. The amount paid is limited to the redemption value 
60 days after the termination of the judicial proceedings. Except in a 
case of a levy by the Internal Revenue Service, payment of a bond 
registered in coownership form pursuant to a judgment or a levy against 
only one coowner is limited to the extent of that coowner's interest in 
the bond. That interest must be established by an agreement between the 
coowners by judgment, decree, or order of a court in a proceeding to 
which both coowners are parties. Payment of a bond registered in 
coownership form pursuant to levy by the Internal Revenue Service will 
be made if the levy is against either coowner on the bond.
    (b) Trustee in bankruptcy, receiver, or similar court officer. The 
Department of the Treasury will pay, at current redemption value, a 
savings bond to a trustee in bankruptcy, a receiver of an insolvent's 
estate, a receiver in equity, or a similar court officer under the 
provisions of paragraph (a) of this section.

[44 FR 76441, Dec. 26, 1979, as amended at 63 FR 64551, Nov. 20, 1998]



Sec. 353.22  Payment or reissue pursuant to judgment.

    (a) Divorce. The Department of the Treasury will recognize a divorce 
decree that ratifies or confirms a property settlement agreement 
disposing of bonds or that otherwise settles the interests of the 
parties in a bond. Reissue of a savings bond may be made to eliminate 
the name of one spouse as owner, coowner, or beneficiary or to 
substitute the name of one spouse for that of the other spouse as owner, 
coowner, or beneficiary pursuant to the decree. However, if the bond is 
registered in the name of one spouse with another person as coowner, 
there must be submitted either:
    (1) A request for reissue by the other person or (2) a certified 
copy of a judgment, decree, or court order entered in proceedings to 
which the other person and the spouse named on the bond are parties, 
determining the extent of the

[[Page 328]]

interest of that spouse in the bond. Reissue will be permitted only to 
the extent of that spouse's interest. The evidence required under 
Sec. 353.23 must be submitted in every case. When the divorce decree 
does not set out the terms of the property settlement agreement, a 
certified copy of the agreement must be submitted. Payment, rather than 
reissue, will be made if requested.
    (b) Gift causa mortis. A savings bond belonging solely to one 
individual will be paid or reissued at the request of the person found 
by a court to be entitled by reason of a gift causa mortis from the sole 
owner.
    (c) Date for determining rights. When payment or reissue under this 
section is to be made, the rights of the parties will be those existing 
under the regulations current at the time of the entry of the final 
judgment, decree, or court order.



Sec. 353.23  Evidence.

    (a) General. To establish the validity of judicial proceedings, 
certified copies of the final judgment, decree, or court order, and of 
any necessary supplementary proceedings, must be submitted. If the 
judgment, decree, or court order was rendered more than six months prior 
to the presentation of the bond, there must also be submitted a 
certification from the clerk of the court, under court seal, dated 
within six months of the presentation of the bond, showing that the 
judgment, decree, or court order is in full force.
    (b) Trustee in bankruptcy or receiver of an insolvent's estate. A 
request for payment by a trustee in bankruptcy or a receiver of an 
insolvent's estate must be supported by appropriate evidence of 
appointment and qualification. The evidence must be certified by the 
clerk of the court, under court seal, as being in full force on a date 
that is not more than six months prior to the presentation of the bond.
    (c) Receiver in equity or similar court officer. A request for 
payment by a receiver in equity or a similar court officer, other than a 
receiver of an insolvent's estate, must be supported by a copy of an 
order that authorizes the presentation of the bond for redemption, 
certified by the clerk of the court, under court seal, as being in full 
force on a date that is not more than six months prior to the 
presentation of the bond.



Sec. 353.24  Payment pursuant to judicial or administrative forfeiture.

    (a) Definitions. As used in this part:
    (1) Contact point means the individual designated to receive 
referrals from the Bureau of the Public Debt, as provided for in this 
section, by the Federal investigative agency, United States Attorney's 
Office, or forfeiting agency specified in Public Debt Form 1522.
    (2) Forfeiting agency means the federal law enforcement agency 
responsible for the forfeiture.
    (3) Forfeiture--(i) Administrative forfeiture means the process by 
which property may be forfeited by a Federal agency rather than through 
judicial proceedings.
    (ii) Judicial forfeiture means either a civil or a criminal 
proceeding in a United States District Court that may result in a final 
judgment and order of forfeiture.
    (4) Public Debt Form 1522 means the written notification of the 
forfeiture provided by the forfeiting agency to the Bureau of the Public 
Debt on a Public Debt Form 1522 Special Form of Request for Payment of 
United States Savings and Retirement Securities Where Use of a Detached 
Request Is Authorized. Public Debt Form 1522 must specify: the contact 
point; the issue date of each bond; the serial number for each bond; the 
date of forfeiture; the forfeiture fund to which payment is to be made; 
and be signed by an individual authorized by the forfeiting agency. The 
forfeited bonds and the completed Public Debt Form 1522 are to be mailed 
to the Department of the Treasury, Bureau of the Public Debt, 
Parkersburg, WV 26106-1328.
    (b) Forfeiture of bond. (1) Upon receipt and review of the Public 
Debt Form 1522, as described in (a)(4) above, the Bureau of the Public 
Debt will make payment to the forfeiture fund specified on the form.
    (2) The Bureau of the Public Debt will record the forfeiture, the 
forfeiture fund into which the proceeds were paid, the contact point, 
and any related information.

[[Page 329]]

    (3) The Bureau of the Public Debt will rely exclusively upon the 
information provided by the Federal agency in the Public Debt Form 1522 
and will not make any independent evaluation of the validity of the 
forfeiture order, the request for payment, or the authority of the 
individual signing the request for payment.
    (4) The amount paid is limited to the redemption value of the 
savings bonds as of the date of forfeiture specified in the Public Debt 
Form 1522.
    (c) Inquiry from previous owner. (1) Upon payment made pursuant to 
(b), all inquiries from the previous owner, including requests for 
payment, reissue, or applications for relief, related to forfeited 
savings bonds will be referred by the Bureau of the Public Debt to the 
contact point named in the Public Debt Form 1522.
    (2) The Bureau of the Public Debt will notify the submitter of the 
inquiry of the referral to the contact point.
    (3) The Bureau of the Public Debt will not investigate the inquiry 
and will defer to the forfeiting agency's determination of the 
appropriate course of action, including settlement where appropriate. 
Any settlement will be paid from the forfeiture fund into which the 
proceeds were deposited.

[61 FR 53822, Oct. 15, 1996]



Subpart F--Relief for Loss, Theft, Destruction, Mutilation, Defacement, 
                         or Nonreceipt of Bonds



Sec. 353.25  General.

    Relief, by the issue of a substitute bond or by payment, is 
authorized for the loss, theft, destruction, mutilation, or defacement 
of a bond after receipt by the owner or his or her representative. As a 
condition for granting relief, the Commissioner of the Public Debt, as 
designee of the Secretary of the Treasury, may require a bond of 
indemnity, in the form, and with the surety, or security, he considers 
necessary to protect the interests of the United States. In all cases 
the savings bond must be identified by serial number and the applicant 
must submit satisfactory evidence of the loss, theft, or destruction, or 
a satisfactory explanation of the mutilation or defacement.



Sec. 353.26  Application for relief--After receipt of bond.

    (a) If the serial numbers of the lost, stolen, or destroyed bonds 
are known, the claimant should execute an application for relief on the 
appropriate form and submit it to the Bureau of the Public Debt, 
Parkersburg, WV 26101.
    (b) If the bond serial number is not known, the claimant must 
provide sufficient information to enable the Bureau of the Public Debt 
to identify the bond by serial number. See Sec. 353.29(c). The Bureau 
will furnish the proper application form and instructions.
    (c) If applicable, a defaced bond and all available fragments of a 
mutilated bond should be submitted to the Bureau.
    (d) The application must be made by the person or persons (including 
both coowners, if living) authorized under these regulations to request 
payment of the bond. In addition:
    (1) If the bond is in beneficiary form and the owner and beneficiary 
are both living, both will ordinarily be required to join in the 
application.
    (2) If a minor named on a bond as owner, coowner, or beneficiary is 
not of sufficient competency and understanding to request payment, both 
parents will ordinarily be required to join in the application.
    (e) If the application is approved, relief will be granted either by 
the issuance of a bond bearing the same issue date as the bond for which 
the claim was filed or by the issuance of a check in payment.



Sec. 353.27  Application for relief--Non-receipt of bond.

    If a bond issued on any transaction is not received, the issuing 
agent must be notified as promptly as possible and given all information 
about the non-receipt. An appropriate form and instructions will be 
provided. If the application is approved, relief will be granted by the 
issuance of a bond bearing the same issue date as the bond that was not 
received. Also, relief is authorized for the issuance of bonds for which 
the Secretary has not received payment, in

[[Page 330]]

order to preserve public confidence in dealing with issuing agents.

[63 FR 64551, Nov. 20, 1998]



Sec. 353.28  Recovery or receipt of bond before or after relief is granted.

    (a) If a bond reported lost, stolen, destroyed, or not received, is 
recovered or received before relief is granted, the Bureau of the Public 
Debt, Parkersburg, WV 26101, must be notified promptly.
    (b) A bond for which relief has been granted is the property of the 
United States and, if recovered, must be promptly submitted to the 
Bureau of the Public Debt, Parkersburg, WV 26101, for cancellation.



Sec. 353.29  Adjudication of claims.

    (a) General. The Bureau of the Public Debt will adjudicate claims 
for lost, stolen or destroyed bonds on the basis of records created and 
regularly maintained in the ordinary course of business.
    (b) Claims filed 10 years after payment. A bond for which no claim 
has been filed within 10 years of the recorded date of redemption will 
be presumed to have been properly paid. If a claim is subsequently 
filed, a photographic copy of the bond will not be available to support 
the disallowance.
    (c) Claims filed six years after final maturity. No claim filed six 
years or more after the final maturity of a savings bond will be 
entertained unless the claimant supplies the serial number of the bond.



                           Subpart G--Interest



Sec. 353.30  Series EE bonds.

    Series EE bonds are issued at a discount. The accrued interest is 
added to the issue price at stated intervals and is payable only at 
redemption as part of the redemption value. Information regarding 
interest rates and redemption values is found in Department of the 
Treasury Circular, Public Debt Series No. 1-80 (31 CFR part 351).



Sec. 353.31  Series HH bonds.

    (a) General. Series HH bonds are current income bonds issued at par 
(face amount). Interest on a Series HH bond is paid semiannually 
beginning six months from the issue date. Interest ceases at final 
maturity, or, if the bond is redeemed prior to final maturity, as of the 
end of the interest period last preceding the date of redemption. For 
example, if a bond on which interest is payable on January 1 and July 1 
is redeemed on September 1, interest ceases as of the preceding July 1, 
and no interest will be paid for the period from July 1 to September 1. 
However, if the redemption date falls on an interest payment date, 
interest ceases on that date. Information regarding interest rates is 
found in Department of the Treasury Circular, Public Debt Series No. 2-
80, current revision (31 CFR part 352).
    (b) Payment of interest. Series HH bond interest accounts are 
maintained by the Bureau of the Public Debt, Parkersburg, WV. Interest 
on bonds issued on or after October 1, 1989 will be paid on each 
interest due date by the Automated Clearing House (ACH) method to the 
owner or coowner's account at a financial institution, unless the Bureau 
determines that extraordinary circumstances warrant payment by check or 
other means. Interest on bonds issued prior to October 1, 1989, is 
payable by check drawn to the order of the owner or both coowners or, 
upon request, by the ACH method to the owner or coowner's account at a 
financial institution. Checks will be mailed to the delivery address 
provided to the Bureau. Deposit account information for ACH payments 
shall be provided on the form designated by the Bureau. Series H 
interest payments made by the ACH method are governed by the regulations 
at 31 CFR part 370.

(Approved by the Office of Management and Budget under control number 
1535-0094)
    (c) Delivery of interest. Notices affecting the delivery of interest 
payments. To ensure appropriate action, notices affecting the delivery 
of interest payments on Series HH bonds must be received by the Bureau 
of the Public Debt, Parkersburg, WV 26102-1328, at least one month prior 
to the interest payment date. Each notice must include the owner or 
coowner's name and the taxpayer identifying number appearing on the 
account under which records of the bonds are maintained.

[[Page 331]]

    (d) Reissue during interest period. Physical reissue of a Series HH 
bond may be made without regard to interest payment dates. The Series HH 
interest accounts maintained by the Bureau of the Public Debt will be 
closed in the first week of the month preceding each interest payment 
date, and payments will be made pursuant to the information contained in 
the accounts as of the date they are closed.
    (e) Endorsement of checks. Interest checks must be endorsed in 
accordance with the regulations governing the payment of fiscal agency 
checks, as contained in 31 CFR part 355.
    (f) Payment of interest by the ACH method--(1) Submission of deposit 
account information. Payments on all Series HH bonds assigned to the 
same account maintained by the Bureau must be made to the same deposit 
account at a financial institution.
    (2) Deposit account held by individuals in their own right. Where 
the Series HH bonds are registered in the name of individual(s) as sole 
owner, or as owner and beneficiary, and the deposit account at the 
financial institution is held in the name of individual(s) in their own 
right, the owner's name must appear on the deposit account. Where the 
bonds are registered in the names of two individuals as coowners and the 
deposit account is held in the name of individual(s) in their own right, 
the registration of the bonds and the title of the account must contain 
at least one name that is common to both. The deposit account to which 
the interest payments are directed should preferably be established in a 
form identical to the registration of the bonds to ensure that rights of 
ownership and survivorship can be more easily identified and preserved. 
Neither the United States nor any Federal Reserve Bank shall be liable 
for any loss sustained because the interest of the holder(s) of a 
deposit account to which payments are made are not the same as the 
owner(s) of the bonds.
    (3) Deposit account held by organization. Where the deposit account 
to which interest payments are to be directed is held in the name of the 
financial institution itself acting as sole trustee, or as co-trustee, 
or is the name of a commercially-managed investment fund, the owner or 
coowner should inquire whether the financial institution is able to 
receive ACH payments; if not, the owner or coowner should make 
alternative arrangements.
    (4) Financial institution cannot accept ACH payments. If after 
submission of deposit account information, it is determined that ACH 
payments cannot be accepted by the designated financial institution, 
pending receipt of new deposit account information, payment will be made 
by check drawn to the registered owner or both coowners and mailed to 
the address of record.
    (5) Cancellation of ACH arrangement. (i) Bonds issued on or after 
October 1, 1989. As set forth in paragraph (b) of this section and in 
the Series HH offering contained in Circular No. 2-80, interest on 
Series HH bonds issued on or after October 1, 1989, will be paid by the 
ACH method. In the absence of extraordinary circumstances, a request to 
discontinue payment by the ACH method in favor of payment by check will 
not be accepted.
    (ii) Bonds issued prior to October 1, 1989. An ACH arrangement 
established for Series HH bonds issued prior to October 1, 1989, shall 
remain in effect until it is terminated by a request from the owner or 
coowner submitted to the Bureau of the Public Debt, Parkersburg, WV 
26102-1328.
    (6) Rules. Series HH interest payments made by the ACH method are 
governed by the regulations at 31 CFR part 370.
    (7) Nonreceipt or loss of interest payment. The Bureau of the Public 
Debt, Parkersburg, WV 26102 should be notified if:
    (i) An interest check is not received or is lost after receipt or
    (ii) An ACH payment is not credited to the designated account and 
the financial institution has no record of receiving it. The notice 
should include the owner or coowner's name and taxpayer identifying 
number and the interest payment date.

[54 FR 40254, Sept. 29, 1989, as amended at 59 FR 10541, Mar. 4, 1994; 
64 FR 40487, July 26, 1999]

[[Page 332]]



                Subpart H--General Provisions for Payment



Sec. 353.35  Payment (redemption).

    (a) General. Payment of a savings bond will be made to the person or 
persons entitled under the provisions of these regulations, except that 
checks in payment will not be delivered to addresses in areas with 
respect to which the Department of the Treasury restricts or regulates 
the delivery of checks drawn against funds of the United States. See 
Department of the Treasury Circular No. 655, current revision (31 CFR 
part 211). Payment will be made without regard to any notice of adverse 
claims to a bond and no stoppage or caveat against payment of a bond 
will be entered.
    (b) Series EE. A Series EE bond will be paid at any time after six 
months from issue date at the current redemption value shown in 
Department of the Treasury Circular, Public Debt Series No. 1-80 (31 CFR 
part 351).
    (c) Series HH. A Series HH bond will be paid at any time after six 
months from issue date. A Series HH bond issued in an authorized 
exchange or reinvestment transaction will be paid at face value. A 
Series HH bond issued for cash will be paid at the current redemption 
value shown in Department of the Treasury Circular, Public Debt Series 
No. 2-80, Second Revision (31 CFR part 352). If the bond is redeemed at 
less than face value, the difference represents an adjustment of 
interest. In any case where Series HH bonds are surrendered to a 
designated Federal Reserve Bank or Branch or the Bureau of the Public 
Debt, Parkersburg, WV 26106-1328, for redemption in the month prior to 
an interest payment date, redemption will not be deferred but will be 
made in regular course, unless the presenter specifically requests that 
the transaction be delayed until that date. A request to defer 
redemption made more than one month preceding the interest payment date 
will not be accepted.

[44 FR 76441, Dec. 26, 1979, as amended at 51 FR 23754, July 1, 1986; 59 
FR 10541, Mar. 4, 1994]



Sec. 353.36  Payment during life of sole owner.

    A savings bond registered in single ownership form (i.e., without a 
coowner or beneficiary) will be paid to the owner during his or her 
lifetime upon surrender with an appropriate request.



Sec. 353.37  Payment during lives of both coowners.

    A savings bond registered in coownership form will be paid to either 
coowner upon surrender with an appropriate request, and upon payment (as 
determined in Sec. 353.43), the other coowner will cease to have any 
interest in the bond. If both coowners request payment, payment will be 
made by check drawn in the form, ``John A. Jones AND Mary C. Jones''.



Sec. 353.38  Payment during lifetime of owner of beneficiary bond.

    A savings bond registered in beneficiary form will be paid to the 
registered owner during his or her lifetime upon surrender with an 
appropriate request. Upon payment (as determined in Sec. 353.43) the 
beneficiary will cease to have any interest in the bond.



Sec. 353.39  Surrender for payment.

    (a) Procedure for bonds of Series EE, in the names of individual 
owners or coowners only. An individual who is the owner or coowner of a 
Series EE bond may present the bond to an authorized paying agent for 
redemption. The presenter must be prepared to establish his or her 
identity in accordance with Treasury instructions and identification 
guidelines. The owner or coowner must sign the request for payment on 
the bond or, if authorized, on a separate detached request, and add his 
or her address. If the request for payment has been signed, or signed 
and certified, before presentation of the bond, the paying agent must be 
satisfied that the person presenting the bond for payment is the owner 
or coowner and may require the person to sign the request for payment 
again. If the bond is in order for payment, the paying agent will make 
immediate payment at the current redemption value without charge to the 
presenter. Paying agents are not authorized to process any case

[[Page 333]]

involving partial redemption or any case in which supporting evidence is 
required.
    (b) Procedure for all other cases. In the case of bonds to which the 
procedure in paragraph (a) of this section, does not apply, or if 
otherwise preferred, the owner or coowner, or other person entitled to 
payment, should appear before an officer authorized to certify requests 
for payment, establish his or her identity, sign the request for 
payment, and provide information as to the address to which the check in 
payment is to be mailed. The bond must be forwarded to a designated 
Federal Reserve Bank or Branch or the Bureau of the Public Debt. 
Usually, payment will be expedited by submission to a designated Federal 
Reserve Bank or Branch. In all cases, the cost and risk of presentation 
of a bond will be borne by the owner. Payment will be made by check 
drawn to the order of the registered owner or other person entitled and 
will be mailed to the address requested.
    (c) Date of request. Requests executed more than six months before 
the date of receipt of a bond for payment will not be accepted. Neither 
will a bond be accepted if payment is requested as of a date more than 
three months in the future.

[44 FR 76441, Dec. 26, 1979, as amended at 59 FR 10541, Mar. 4, 1994]



Sec. 353.40  Special provisions for payment.

    (a) Owner's signature not required. A bond may be paid by a paying 
agent or a designated Federal Reserve Bank without the owner's signature 
to the request for payment, if the bond bears the special endorsement of 
a paying agent specifically qualified to place such an endorsement on 
savings bonds.
    (b) Signature by mark. A signature by mark (X) must be witnessed by 
at least one disinterested person and a certifying officer. See subpart 
J. The witness must attest to the signature by mark substantially as 
follows: ``Witness to signature by mark'', followed by his or her 
signature and address.
    (c) Name change. If the name of the owner, coowner, or other person 
entitled to payment, as it appears in the registration or in evidence on 
file in the Bureau of the Public Debt, has been changed in any legal 
manner, the signature to the request for payment must show both names 
and the manner in which the change was made; for example, ``Mary T. 
Jones Smith (Mary T. J. Smith or Mary T. Smith) changed by marriage from 
Mary T. Jones'', or ``John R. Young, changed by order of court from Hans 
R. Jung''. See Sec. 353.50.
    (d) Attorneys-in-fact. A request for payment, reinvestment, or 
exchange executed by an attorney-in-fact will be recognized if it is 
accompanied by a copy of the power of attorney which meets the following 
requirements:
    (1) The power of attorney must bear the grantor's signature, 
properly certified or notarized, in accordance with applicable State 
law;
    (2) The power of attorney must grant, by its terms, authority for 
the attorney-in-fact to sell or redeem the grantor's securities, sell 
his or her personal property, or, otherwise contain similar authority; 
and
    (3) In the case of a grantor who has become incapacitated, the power 
of attorney must conform with pertinent provisions of State law 
concerning its durability. Generally, in such circumstances, the power 
of attorney should provide that the authority granted will not be 
affected by the subsequent incompetence or incapacity of the grantor. 
Medical evidence or other proof of the grantor's condition may be 
required in any case.

[45 FR 64091, Sept. 26, 1980, as amended at 57 FR 39602, Sept. 1, 1992; 
59 FR 10541, Mar. 4, 1994]



Sec. 353.41  Partial redemption.

    A bond of Series EE or HH may be redeemed in part at current 
redemption value, but only in amounts corresponding to authorized 
denominations, upon surrender of the bond to a designated Federal 
Reserve Bank or Branch or to the Bureau of the Public Debt in accordance 
with Sec. 353.39(b). In any case in which partial redemption is 
requested, the phrase ``to the extent of $---- (face amount) and reissue 
of the remainder'' should be added to the request. Upon partial 
redemption of the bond, the remainder will be reissued as

[[Page 334]]

of the original issue date, as provided in subpart I.

[44 FR 76441, Dec. 26, 1979, as amended at 59 FR 10541, Mar. 4, 1994]



Sec. 353.42  Nonreceipt or loss of check issued in payment.

    If a check in payment of a bond surrendered for redemption is not 
received within a reasonable time or is lost after receipt, notice 
should be given to the same agency to which the bond was surrendered for 
payment. The notice should give the date the bond was surrendered for 
payment and describe the bond by series, denomination, serial number, 
and registration, including the taxpayer identifying number of the 
owner.



Sec. 353.43  Effective date of request for payment.

    The Department of the Treasury will treat the receipt of a bond with 
an appropriate request for payment by:
    (a) A Federal Reserve Bank or Branch, (b) the Bureau of the Public 
Debt, or (c) a paying agent authorized to pay that bond, as the date 
upon which the rights of the parties are fixed for the purpose of 
payment.



Sec. 353.44  Withdrawal of request for payment.

    (a) Withdrawal by owner or coowner. An owner or coowner, who has 
surrendered a bond to a Federal Reserve Bank or Branch or to the Bureau 
of the Public Debt or to an authorized paying agent with an appropriate 
request for payment, may withdraw the request if notice of intent to 
withdraw is received by the same agency prior to payment either in cash 
or through the issuance of the redemption check.
    (b) Withdrawal on behalf of deceased owner or incompetent. A request 
for payment may be withdrawn under the same conditions as in paragraph 
(a) of this section by the executor or administrator of the estate of a 
deceased owner or by the person or persons who could have been entitled 
to the bond under Subpart L, or by the legal representative of the 
estate of a person under legal disability, unless surrender of the bond 
for payment has eliminated the interest of a surviving coowner or 
beneficiary. See Sec. 353.70 (b) and (c).



             Subpart I--Reissue and Denominational Exchange



Sec. 353.45  General.

    Reissue of a bond may be made only under the conditions specified in 
these regulations, and only at:
    (a) A Federal Reserve Bank or Branch, or
    (b) The Bureau of the Public Debt.

Reissue will not be made if the request is received less than one full 
calendar month before the final maturity date of a bond. The request, 
however, will be effective to establish ownership as though the 
requested reissue had been made.



Sec. 353.46  Effective date of request for reissue.

    The Department of the Treasury will treat the receipt by: (a) A 
Federal Reserve Bank or Branch or (b) the Bureau of the Public Debt of a 
bond and an acceptable request for reissue as determining the date upon 
which the rights of the parties are fixed for the purpose of reissue. 
For example, if the owner or either coowner of a bond dies after the 
bond has been surrendered for reissue, the bond will be regarded as 
having been reissued in the decedent's lifetime.



Sec. 353.47  Authorized reissue--during lifetime.

    A bond belonging to an individual may be reissued in any authorized 
form of registration upon an appropriate request for the purposes 
outlined below.
    (a) Single ownership. A bond registered in single ownership form may 
be reissued--
    (1) To add a coowner or beneficiary; or
    (2) To name a new owner, with or without a coowner or beneficiary, 
but only if:
    (i) The new owner is related to the previous owner by blood 
(including legal adoption) or marriage; (ii) the previous owner and the 
new owner are parties to a divorce or annulment; or (iii) the new sole 
owner is the trustee of a personal trust estate which was created by the 
previous owner or which designates as beneficiary either the previous 
owner or a person related to

[[Page 335]]

him or her by blood (including legal adoption) or marriage.
    (b) Coownership--(1) Reissue--to name a related individual as owner 
or coowner. During the lifetime of both coowners, a coownership bond may 
be reissued in the name of another individual related by blood 
(including legal adoption) or marriage to either coowner:
    (i) As single owner,
    (ii) As owner with one of the original coowners as beneficiary, or
    (iii) As a new coowner with one of the original coowners.
    (2) Reissue--to name either coowner alone or with another individual 
as coowner or beneficiary. During the lifetime of both coowners, a 
coownership bond may be reissued in the name of either coowner alone or 
with another individual as coowner or beneficiary if:
    (i) After issue of the submitted bond, either coowner named thereon 
marries, or the coowners are divorced or legally separated from each 
other, or their marriage is annulled; or
    (ii) Both coowners on the submitted bond are related by blood 
(including legal adoption) or marriage to each other.
    (3) Reissue--to name the trustee of a personal trust estate. A bond 
registered in coownership form may be reissued to name a trustee of a 
personal trust estate created by either coowner or by some other person 
if:
    (i) Either coowner is a beneficiary of the trust, or (ii) a 
beneficiary of the trust is related by blood or marriage to either 
coowner.
    (c) Beneficiary. A bond registered in beneficiary form may be 
reissued:
    (1) To name the beneficiary as coowner;
    (2) To substitute another individual as beneficiary; or
    (3) To eliminate the beneficiary, and, if the beneficiary is 
eliminated, to effect any of the reissues authorized by paragraph (a) of 
this section.



Sec. 353.48  Restrictions on reissue.

    (a) Denominational exchange. Reissue is not permitted solely to 
change denominations.
    (b) United States Treasury. Reissue may not be made to eliminate the 
United States Treasury as coowner.



Sec. 353.49  Correction of errors.

    A bond may be reissued to correct an error in registration upon 
appropriate request supported by satisfactory proof of the error.



Sec. 353.50  Change of name.

    An owner, coowner, or beneficiary whose name is changed by marriage, 
divorce, annulment, order of court, or in any other legal manner after 
the issue of the bond should submit the bond with a request for reissue 
to substitute the new name for the name inscribed on the bond. 
Documentary evidence may be required in any appropriate case.



Sec. 353.51  Requests for reissue.

    A request for reissue of bonds in coownership form must be signed by 
both coowners, except that a request solely to eliminate the name of one 
coowner may be signed by that coowner only. A bond registered in 
beneficiary form may be reissued upon the request of the owner, without 
the consent of the beneficiary. Public Debt forms are available for 
requesting reissue.



                     Subpart J--Certifying Officers



Sec. 353.55  Individuals authorized to certify.

    The following individuals are authorized to act as certifying 
officers for the purpose of certifying a request for payment, reissue, 
or a signature to a Public Debt form:
    (a) Officers generally authorized--(1) At banks, trust companies, 
and member organizations of the Federal Home Loan Bank System.
    (i) Any officer of a bank incorporated in the United States, the 
territories or possessions of the United States, or the Commonwealth of 
Puerto Rico.
    (ii) Any officer of a trust company incorporated in the United 
States, the territories or possessions of the United States, or the 
Commonwealth of Puerto Rico.
    (iii) Any officer of an organization that is a member of the Federal 
Home Loan Bank System. This includes Federal savings and loan 
associations.

[[Page 336]]

    (iv) Any officer of a foreign branch or a domestic branch of an 
institution indicated in paragraphs (a)(1)(i) through (iii) of this 
section.
    (v) Any officer of a Federal Reserve Bank, a Federal Land Bank, or a 
Federal Home Loan Bank.
    (vi) Any employee of an institution in paragraphs (a)(1)(i) through 
(v) of this section, who is expressly authorized to certify by the 
institution.

Certification by these officers or designated employees must be 
authenticated by a legible imprint of either the corporate seal of the 
institution or of the issuing or paying agent's stamp. The employee 
expressly authorized to certify by an institution must sign his or her 
name over the title ``Designated Employee''.
    (2) At issuing agents that are not banks or trust companies. Any 
officer of an organization, not a bank or a trust company, that is 
qualified as an issuing agent for bonds of Series EE. The agent's stamp 
must be imprinted in the certification.
    (3) By United States officials. Any judge, clerk, or deputy clerk of 
a United States court, including United States courts for the 
territories and possessions of the United States and the Commonwealth of 
Puerto Rico; any United States Commissioner, United States Attorney, or 
United States Collector of Customs, including their deputies; in the 
Internal Revenue Service, any Regional Commissioner, District Director, 
Service Center Director, or Internal Revenue agent.
    (b) Officers with limited authority--(1) In the Armed Forces. Any 
commissioned officer or warrant officer of the Armed Forces of the 
United States, but only for members of the respective services, their 
families, and civilian employees at posts, bases, or stations. The 
certifying officer must indicate his or her rank and state that the 
individual signing the request is one of the class whose request the 
certifying officer is authorized to certify.
    (2) At the Veterans Administration, Federal penal institutions, and 
United States Public Health Service hospitals. Any officer in charge of 
a home, hospital, or other facility of the Veterans Administration, but 
only for the patients, or employees of the facility; any officer of a 
Federal penal institution or a United States Public Health Service 
hospital expressly authorized to certify by the Secretary of the 
Treasury or his designee, but only for the inmates, patients or 
employees of the institution involved. Officers of Veterans 
Administration facilities, Federal penal institutions, and Public Health 
Service hospitals must use the stamp or seal of the particular 
institution or service.
    (c) Authorized officers in foreign countries. Any United States 
diplomatic or consular representative, or the officer of a foreign 
branch of a bank or trust company incorporated in the United States 
whose signature is attested by an imprint of the corporate seal or is 
certified to the Department of the Treasury. If none of these 
individuals is available, a notary public or other officer authorized to 
administer oaths may certify, but his or her official character and 
jurisdiction must be certified by a United States diplomatic or consular 
officer under seal of his or her office.
    (d) Authorized officers in particular localities. The Governor and 
the Treasurer of Puerto Rico; the Governor and the Commissioner of 
Finance of the Virgin Islands; the Governor and the Director of Finance 
of Guam; the Governor and the Director of Administrative Services of 
American Samoa; or designated officers of the Panama Canal Commission.
    (e) Special provisions. If no certifying officer is readily 
accessible, the Commissioner of the Public Debt, Deputy Commissioner, 
any Assistant Commissioner, or other designated official of the Bureau 
or of a Federal Reserve Bank or Branch is authorized to make special 
provision for any particular case.



Sec. 353.56  General instructions and liability.

    (a) The certifying officer must: (1) Require the person presenting a 
bond, or an appropriate Public Debt transaction form, to establish his 
or her identity in accordance with Department of the Treasury 
instructions and identification guidelines;
    (2) Place a notation on the back of the bond or on the appropriate 
Public Debt transaction form, or in a separate

[[Page 337]]

record, showing exactly how identification was established; and
    (3) Affix, as part of the certification, his or her official 
signature, title, seal or issuing or paying agent's stamp, address, and 
the date of execution.
    (b) The certifying officer and, if such person is an officer or an 
employee of an organization, the organization will be held fully 
responsible for the adequacy of the identification.



Sec. 353.57  When a certifying officer may not certify.

    Certifying officers may not certify the requests for payment of 
bonds, or appropriate Public Debt transaction forms if, in their own 
right or in a representative capacity, they--
    (a) Have an interest in the bonds, or
    (b) Will, by virtue of the requests being certified, acquire an 
interest in the bonds.



Sec. 353.58  Forms to be certified.

    When required in the instructions on a Public Debt transaction form, 
the form must be signed before an authorized certifying officer.



    Subpart K--Minors, Incompetents, Aged Persons, Absentees, et al.



Sec. 353.60  Payment to representative of an estate.

    (a) The representative of an estate of an owner who is a minor, an 
aged person, incompetent, absentee, et al., may receive payment upon 
request:
    (1) If the registration shows the name and capacity of the 
representative;
    (2) If the registration shows the capacity but not the name of the 
representative and the request is accompanied by appropriate evidence; 
or
    (3) If the registration includes neither the name of the 
representative nor his or her capacity but the request is accompained by 
appropriate evidence.
    (b) Appropriate evidence for paragraphs (a) (2) and (3) of this 
section includes a certified copy of the letters of appointment or, if 
the representative is not appointed by a court, other proof of 
qualification. Except in the case of corporate fiduciaries, the evidence 
must show that the appointment is in full force and be dated not more 
than one year prior to the presentation of the bond for payment. The 
request for payment appearing on the back of a bond must be signed by 
the representative as such, for example, ``John S. Jones, guardian 
(committee) of the estate of Henry W. Smith, a minor (an incompetent)''.



Sec. 353.61  Payment after death.

    After the death of the ward, and at any time prior to the 
representative's discharge, the representative of the estate will be 
entitled to obtain payment of a bond to which the ward was solely 
entitled.



Sec. 353.62  Payment to minors.

    If the owner of a savings bond is a minor and the form of 
registration does not indicate that there is a representative of the 
minor's estate, payment will be made to the minor upon his or her 
request, provided the minor is of sufficient competency to sign the 
request for payment and to understand the nature of the transaction. In 
general, the fact that the request for payment has been signed by a 
minor and certified will be accepted as sufficient proof of competency 
and understanding.



Sec. 353.63  Payment to a parent or other person on behalf of a minor.

    If the owner of a savings bond is a minor and the form of 
registration does not indicate that there is a representative of his or 
her estate, and if the minor is not of sufficient competency to sign the 
request for payment and to understand the nature of the transaction, 
payment will be made to either parent with whom the minor resides or to 
whom legal custody has been granted. If the minor does not reside with 
either parent, payment will be made to the person who furnishes the 
chief support for the minor. The request must appear on the back of the 
bond in one of the following forms:
    (a) Request by parent.

I certify that I am the mother of John C. Jones (with whom he resides) 
(to whom legal custody has been granted). He is ------ years of age and 
is not of sufficient understanding to make this request.

Mary Jones on behalf of John C. Jones

    (b) Request by other person.


[[Page 338]]


    I certify that John C. Jones does not reside with either parent and 
that I furnish his chief support. He is ------ years of age and is not 
of sufficient understanding to make this request.

    Alice Brown, grandmother,

On behalf of John C. Jones



Sec. 353.64  Payment, reinvestment, or exchange--voluntary guardian of an incapacitated person.

    (a) Payment of bonds. When an adult owner of bonds is incapable of 
requesting payment as a result of incapacity and there is no other 
person legally qualified to do so, the relative, or other person, 
responsible for the owner's care and support may submit an application 
for recognition as voluntary guardian for the purpose of redeeming the 
owner's bonds, if the total redemption value of all of the owner's bonds 
does not exceed $20,000. The redemption value of the bonds shall be 
determined as of the date the bonds are received, accompanied by an 
appropriate request for payment. If the total redemption value exceeds 
$20,000, a legal representative must be appointed, as set forth in 
Sec. 315.60.
    (b) Reinvestment of bonds. If the bonds have finally matured and it 
is desired to redeem them and reinvest the proceeds in other savings 
bonds, the new bonds must be registered in the name of the incapacitated 
person, followed by words showing that he or she is under voluntary 
guardianship; for example, ``John Jones 123-45-6789, under voluntary 
guardianship''. A living coowner or beneficiary named on the matured 
bonds must be designated on the new bonds, unless such person furnishes 
a certified statement consenting to omission of his or her name. If an 
amount insufficient to purchase an additional bond of any authorized 
denomination of either series remains after the reinvestment, the 
voluntary guardian may furnish additional funds sufficient to purchase 
another bond of either series of the lowest available denomination. If 
additional funds are not furnished, the remaining amount will be paid to 
the voluntary guardian for the use and benefit of the incapacitated 
person.
    (c) Exchange of bonds. The provisions for reinvestment of the 
proceeds of matured bonds are equally applicable to any authorized 
exchange of bonds of one series for those of another.

[57 FR 39602, Sept. 1, 1992]



Sec. 353.65  Reissue.

    A bond on which a minor or other person under legal disability is 
named as the owner or coowner, or in which he or she has an interest, 
may be reissued under the following conditions:
    (a) A minor for whose estate no representative has been appointed 
may request reissue if the minor is of sufficient competency to sign his 
or her name to the request and to understand the nature of the 
transaction.
    (b) A bond on which a minor is named as beneficiary or coowner may 
be reissued in the name of a custodian for the minor under a statute 
authorizing gifts to minor upon the request of the adult whose name 
appears on the bond as owner or coowner.
    (c) A minor coowner for whose estate no representative has been 
appointed, may be named sole owner upon the request of the competent 
coowner.
    (d) Reissue to eliminate the name of a minor or incompetent for 
whose estate a legal representative has been appointed is permitted only 
if supported by evidence that a court has authorized the representative 
of the minor's or incompetent's estate to request the reissue. See 
Sec. 353.23.

Except to the extent provided in paragraphs (a) through (d) of this 
section, reissue will be restricted to a form of registration which does 
not adversely affect the existing ownership or interest of a minor who 
is not of sufficient understanding to make a request, or other person 
under legal disability. Requests for reissue should be executed by the 
person authorized to request payment under Secs. 353.60 and 353.63, or 
the person who may request recognization as voluntary guardian under 
Sec. 353.64.

[44 FR 76441, Dec. 26, 1979. Redesignated at 57 FR 39602, Sept. 1, 1992]

[[Page 339]]



            Subpart L--Deceased Owner, Coowner or Beneficiary



Sec. 353.70  General rules governing entitlement.

    The following rules govern ownership or entitlement where one or 
both of the persons named on a bond have died without the bond having 
been surrendered for payment or reissue:
    (a) Single owner bond. If the owner of a bond registered in single 
ownership form has died, the bond becomes the property of that 
decedent's estate, and payment or reissue will be made as provided in 
this subpart.
    (b) Coowner bond--(1) One coowner deceased. If one of the coowners 
named on a bond has died, the surviving coowner will be recognized as 
the sole and absolute owner, and payment or reissue will be made as 
though the bond were registered in the name of the survivor alone. Any 
request for reissue by the surviving coowner must be supported by proof 
of death of the other coowner.
    (2) Both coowners deceased. If both coowners named on a bond have 
died, the bond becomes the property of the estate of the coowner who 
died last, and payment or reissue will be made as if the bond were 
registered in the name of the last deceased coowner alone. Proof of 
death of both coowners will be required to establish the order of death.
    (3) Simultaneously death of both coowners. If both coowners die 
under conditions where it cannot be established, either by presumption 
of law or otherwise, which coowner died first, the bond becomes the 
property of both equally, and payment or reissue will be made 
accordingly.
    (c) Beneficiary bond--(1) Owner deceased. If the owner of a bond 
registered in beneficiary form has died and is survived by the 
beneficiary, upon proof of death of the owner, the beneficiary will be 
recognized as the sole and absolute owner of the bond. Payment or 
reissue will be made as though the bond were registered in the 
survivor's name alone. A request for payment or reissue by the 
beneficiary must be supported by proof of death of the owner.
    (2) Beneficiary deceased. If the beneficiary's death occurs before, 
or simultaneously with, that of the registered owner, payment or reissue 
will be made as though the bond were registered in the owner's name 
alone. Proof of death of the owner and beneficiary is required to 
establish the order of death.
    (d) Nonresident aliens. If the person who becomes entitled to a bond 
because of the death of an owner is an alien who is a resident of an 
area with respect to which the Department of the Treasury restricts or 
regulates the delivery of checks drawn against funds of the United 
States or its agencies or instrumentalities, delivery of the redemption 
check will not be made so long as the restriction applies. See 
Department of the Treasury Circular No. 655, current revision (31 CFR 
part 211).



Sec. 353.71  Estate administered.

    (a) During administration. The legal representative of an estate may 
request payment of bonds, including interest or redemption checks, 
belonging to the estate or may have the bonds reissued in the names of 
the persons entitled to share in the estate under the following 
conditions:
    (1) When there is more than one legal representative, all must join 
in the request for payment or reissue, unless Sec. 353.75(a)(1) or (b) 
applies.
    (2) The request for payment or reissue must be signed in the form: 
``John A. Jones, administrator of the estate (or executor of the will) 
of Henry M. Jones, deceased''. The request must be supported by evidence 
of the legal representative's authority in the form of a court 
certificate or a certified copy of the legal representative's letters of 
appointment which must be dated within six months of the date of 
presentation of the bond, unless the evidence shows that the appointment 
was made within one year prior to the presentation of the bond.
    (3) For reissue, the legal representative must certify that each 
person in whose name reissue is requested is entitled to the extent 
specified and must certify that each person has consented to the 
reissue. If a person in whose name reissue is requested desires to name 
a coowner or beneficiary, the person must execute an additional request 
for reissue on the appropriate form.
    (b) After administration. If the estate of the decedent has been 
settled

[[Page 340]]

through judicial proceedings, the bond and interest and redemption 
checks will be paid, or the bond will be reissued, upon the request of 
the person shown to be entitled by the court order. The request must be 
supported by a certified copy of the legal representative's court-
approved final account, the decree of distribution, or other pertinent 
court records. If two or more persons have an interest in the bond, they 
must enter into an agreement concerning the bond's disposition. If the 
person entitled desires to name a coowner or beneficiary, a separate 
request must be made on an appropriate form.
    (c) Special provisions for small amounts. Special procedures are 
available for establishing entitlement to, or effecting disposition of, 
savings bonds and interest and redemption checks if the aggregate face 
amount, excluding interest checks, does not exceed $1,000.



Sec. 353.72  Estate not administered.

    (a) Special State law provisions. A request for payment or reissue 
of a bond by the person who has qualified under State law to receive or 
distribute the assets of a decedent's estate will be accepted, provided 
evidence of the person's authority is submitted.
    (b) Agreement of persons entitled. If there is no legal 
representative for the estate of a decedent, the bonds will be paid to, 
or reissued in the name of, the persons entitled, pursuant to an 
agreement and request executed by all persons entitled to share in the 
decedent's personal estate. If the persons entitled to share in the 
decedent's personal estate include minors or incompetents, payment or 
reissue of the bonds must be made to them or in their names unless their 
interest in the bonds is otherwise protected.
    (c) Creditors. An institutional creditor of a deceased owner's 
estate is entitled to payment only to the extent of its claim.
    (d) Special provisions for payment of small amounts--survivors of 
the decedent. (1) If the face amount of the bond does not exceed $500 
and there is no legal representative of the deceased owner's estate, the 
bond will be paid upon the request of the person who paid the burial 
expenses and who has not been reimbursed.
    (2) If there is no legal representative of the estate of a decedent 
who died without a will, and the total face amount of bonds in the 
estate does not exceed $1,000 (face amount), the bonds may be paid to 
the decedent's survivors upon request in the following order of 
precedence:
    (i) Surviving spouse;
    (ii) If no surviving spouse, to the child or children of the 
decedent, and the descendants of deceased children by representation;
    (iii) If none of the above, to the parents of the decedent, or the 
survivor;
    (iv) If none of the above, to the brothers and sisters, and the 
decendants of deceased brothers or sisters by representation;
    (v) If none of the above, to other next-of-kin, as determined by the 
laws of the owner's domicile at death;
    (vi) If none of the above, to persons related to the decedent by 
marriage.

The payment pursuant to this section shall be made upon the request and 
agreement of the survivors to receive the redemption proceeds 
individually and for the account of any persons entitled. Interest 
checks held for the estate of a decedent will be distributed with the 
bonds.



                         Subpart M--Fiduciaries



Sec. 353.75  Payment or reissue during the existence of the fiduciary estate.

    (a) Payment or reissue before maturity--(1) Request from the 
fiduciary named in the registration. A request for reissue or payment 
prior to maturity must be signed by all of the fiduciaries unless by 
statute, decree of court, or the terms of the governing instrument, any 
lesser number may properly execute the request. If the fiduciaries named 
in the registration are still acting, no further evidence will be 
required. In other cases, evidence to support the request will be 
required, as specified:
    (i) Fiduciaries by title only. If the bond is registered only in the 
titles, without the names, of fiduciaries not acting as a board, 
satisfactory evidence of their incumbency must be furnished, except

[[Page 341]]

in the case of bonds registered in the title of public officers as 
trustees.
    (ii) Boards, committees, commission, etc. If a bond is registered in 
the name of a governing body which is empowered to act as a unit, and 
which holds title to the property of a religious, educational, 
charitable or nonprofit organization or a public corporation, the 
request should be signed in the name of the body by an authorized 
person. Ordinarily, a signed and certified request will be accepted 
without further evidence.
    (iii) Corporate fiduciaries. If a bond is registered in the name of 
a public or private corporation or a governmental body as fiduciary, the 
request must be signed by an authorized officer in the name of the 
organization as fiduciary. Ordinarily, a signed and certified request 
will be accepted without further evidence.
    (2) Trustee of a common trust fund. A bond held by a financial 
institution in a fiduciary capacity may be reissued in the name of the 
institution as trustee of its common trust fund to the extent that 
participation in the common trust fund is authorized by law or 
regulation. The request for reissue should be executed by the 
institution and any cofiduciary.
    (3) Successor fiduciary. If the fiduciary in whose name the bond is 
registered has been replaced by another fiduciary, satisfactory evidence 
of successorship must be furnished.
    (b) Payment at or after final maturity. At or after final maturity, 
a request for payment signed by any one or more of the fiduciaries will 
be accepted. Payment will be made by check drawn as the bond is 
registered.



Sec. 353.76  Payment or reissue after termination of the fiduciary estate.

    A bond registered in the name or title of a fiduciary may be paid or 
reissued to the person who has become entitled by reason of the 
termination of a fiduciary estate. Requests for reissue made by a 
fiduciary pursuant to the termination of a fiduciary estate should be 
made on the appropriate form. Requests for payment or reissue by other 
than the fiduciary must be accompanied by evidence to show that the 
person has become entitled in accordance with applicable State law or 
otherwise. When two or more persons have become entitled, the request 
for payment or reissue must be signed by each of them.



Sec. 353.77  Exchanges by fiduciaries.

    Fiduciaries are authorized to request an exchange of bonds of one 
series for those of another, pursuant to any applicable Department of 
the Treasury offering. A living coowner of beneficiary named on the 
bonds submitted in exchange may be retained in the same capacity on the 
new bonds.



     Subpart N--Private Organizations (Corporations, Associations, 
 Partnerships, et cetera) and Governmental Agencies, Units and Officers



Sec. 353.80  Payment to corporations or unincorporated associations.

    A bond registered in the name of a private corporation or an 
unincorporated association will be paid to the corporation or 
unincorporated association upon a request for payment on its behalf by 
an authorized officer. The signature to the request should be in the 
form, for example, ``The Jones Coal Company, a corporation, by John 
Jones, President'', or ``The Lotus Club, an unincorporated association, 
by William A. Smith, Treasurer''. A request for payment so signed and 
certified will ordinarily be accepted without further evidence of the 
officer's authority.



Sec. 353.81  Payment to partnerships.

    A bond registered in the name of an existing partnership will be 
paid upon a request for payment signed by a general partner. The 
signature to the request should be in the form, for example, ``Smith and 
Jones, a partnership, by John Jones, a general partner''. A request for 
payment so signed and certified will ordinarily be accepted as 
sufficient evidence that the partnership is still in existence and that 
the person signing the request is authorized.

[[Page 342]]



Sec. 353.82  Reissue or payment to successors of corporations, unincorporated associations, or partnerships.

    A bond registered in the name of a private corporation, an 
unincorporated association, or a partnership which has been succeeded by 
another corporation, unincorporated association, or partnership by 
operation of law or otherwise, in any manner whereby the business or 
activities of the original organization are continued without 
substantial change, will be paid to or reissued in the name of the 
succeeding organization upon appropriate request on its behalf, 
supported by satisfactory evidence of successorship. The appropriate 
form should be used.



Sec. 353.83  Reissue or payment on dissolution of corporation or partnership.

    (a) Corporations. A bond registered in the name of a private 
corporation which is in the process of dissolution will be paid to the 
authorized representative of the corporation upon a request for payment, 
supported by satisfactory evidence of the representative's authority. At 
the termination of dissolution proceedings, the bond may be reissued 
upon the request of the authorized representative in the names of those 
persons, other than creditors, entitled to the assets of the 
corporation, to the extent of their respective interests. Proof will be 
required that all statutory provisions governing the dissolution of the 
corporation have been complied with and that the persons in whose names 
reissue is requested are entitled and have agreed to the reissue. If the 
dissolution proceedings are under the direction of a court, a certified 
copy of an order of the court, showing the authority of the 
representative to make the distribution requested must be furnished.
    (b) Partnerships. A bond registered in the name of a partnership 
which has been dissolved by death or withdrawal of a partner, or in any 
other manner:
    (1) Will be paid upon a request for payment by any partner or 
partners authorized by law to act on behalf of the dissolved 
partnership, or
    (2) Will be paid to or reissued in the names of the persons entitled 
as the result of such dissolution to the extent of their respective 
interests, except that reissue will not be made in the names of 
creditors. The request must be supported by satisfactory evidence of 
entitlement, including proof that the debts of the partnership have been 
paid or properly provided for. The appropriate form should be used.



Sec. 353.84  Payment to certain institutions.

    A bond registered in the name of a church, hospital, home, school, 
or similar institution, without reference in the registration to the 
manner in which it is organized or governed or to the manner in which 
title to its property is held, will be paid upon a request for payment 
signed on behalf of such institution by an authorized representative. A 
request for payment signed by a pastor of a church, superintendent of a 
hospital, president of a college, or by any official generally 
recognized as having authority to conduct the financial affairs of the 
particular institution will ordinarily be accepted without further proof 
of authority. The signature to the request should be in the form, for 
example, ``Shriners' Hospital for Crippled Children, St. Louis, MO, by 
William A. Smith, Superintendent'', or ``St. Mary's Roman Catholic 
Church, Albany, NY, by the Rev. John Smyth, Pastor''.



Sec. 353.85  Reissue in name of trustee or agent for reinvestment purposes.

    A bond registered in the name of a religious, educational, 
charitable or nonprofit organization, whether or not incorporated, may 
be reissued in the name of a financial institution, or an individual, as 
trustee or agent. There must be an agreement between the organization 
and the trustee or agent holding funds of the organization, in whole or 
in part, for the purpose of investing and reinvesting the principal and 
paying the income to the organization. Reissue should be requested on 
behalf of the organization by an authorized officer using the 
appropriate form.

[[Page 343]]



Sec. 353.86  Reissue upon termination of investment agency.

    A bond registered in the name of a financial institution, or 
individual, as agent for investment purposes only, under an agreement 
with a religious, an educational, a charitable, or a nonprofit 
organization, may be reissued in the name of the organization upon 
termination of the agency. The former agent should request such reissue 
and should certify that the organization is entitled by reason of the 
termination of the agency. If such request and certification are not 
obtainable, the bond will be reissued in the name of the organization 
upon its own request, supported by satisfactory evidence of the 
termination of the agency. The appropriate form should be used.



Sec. 353.87  Payment to governmental agencies, units, or their officers.

    (a) Agencies and units. A bond registered in the name of a State, 
county, city, town, village, or in the name of a Federal, State, or 
local governmental agency, such as a board, commission, or corporation, 
will be paid upon a request signed in the name of the governmental 
agency or unit or by an authorized officer. A request for payment so 
signed and certified will ordinarily be accepted without further proof 
of the officer's authority.
    (b) Officers. A bond registered in the official title of an officer 
of a governmental agency or unit will be paid upon a request for payment 
signed by the officer. The request for payment so signed and certified 
will ordinarily be accepted as proof that the person signing is the 
incumbent of the office.



                   Subpart O--Miscellaneous Provisions



Sec. 353.90  Waiver of regulations.

    The Commissioner of the Public Debt, as designee of the Secretary of 
the Treasury, may waive or modify any provision or provisions of these 
regulations. He may do so in any particular case or class of cases for 
the convenience of the United States or in order to relieve any person 
or persons of unnecessary hardship:
    (a) If such action would not be inconsistent with law or equity, (b) 
if it does not impair any existing rights, and (c) if he is satisfied 
that such action would not subject the United States to any substantial 
expense or liability.



Sec. 353.91  Additional requirements; bond of indemnity.

    The Commissioner of the Public Debt, as designee of the Secretary of 
the Treasury, may require:
    (a) Such additional evidence as he may consider necessary or 
advisable, or (b) a bond of indemnity, with or without surety, in any 
case in which he may consider such a bond necessary for the protection 
of the interests of the United States.



Sec. 353.92  Supplements, amendments, or revisions.

    The Secretary of the Treasury may at any time, or from time to time, 
prescribe additional, supplemental, amendatory, or revised rules and 
regulations governing United States Savings Bonds of Series EE and HH.



PART 354--REGULATIONS GOVERNING BOOK-ENTRY SECURITIES OF THE STUDENT LOAN MARKETING ASSOCIATION (SALLIE MAE)--Table of Contents




Sec.
354.0  Applicability; maintenance of Sallie Mae Securities.
354.1  Definitions of terms.
354.2  Law governing rights and obligations of Federal Reserve Banks, 
          and Sallie Mae; rights of any Person against Federal Reserve 
          Bank, and Sallie Mae.
354.3  Law governing other interests.
354.4  Creation of Participant's Security Entitlement; security 
          interests.
354.5  Obligations of Sallie Mae; no adverse claims.
354.6  Authority of Federal Reserve Banks.
354.7  Withdrawal of eligible Book-entry Sallie Mae Securities for 
          conversion to definitive form.
354.8  Waiver of regulations.
354.9  Liability of Sallie Mae and Federal Reserve Banks.
354.10  Additional provisions.

    Authority: 12 U.S.C. 391; 20 U.S.C. 1087-2(m).

    Source: 62 FR 622, Jan. 6, 1997, unless otherwise noted.

[[Page 344]]



Sec. 354.0  Applicability; maintenance of Sallie Mae Securities.

    (a) A Sallie Mae Security may be maintained in the form of a 
Definitive Sallie Mae Security or a Book-entry Sallie Mae Security. A 
Book-entry Sallie Mae Security shall be maintained in the Book-entry 
System.
    (b) The Sallie Mae Securities to which the regulations in this part 
apply are obligations which, by the terms of their issue, are available 
exclusively as Book-entry Sallie Mae Securities or which, pursuant to 
the securities documentation, are convertible from Book-entry Sallie Mae 
Securities to Definitive Sallie Mae Securities or vice versa.



Sec. 354.1  Definitions of terms.

    (a) Adverse Claim means a claim that a claimant has a property 
interest in a Security and that it is a violation of the rights of the 
claimant for another Person to hold, transfer, or deal with the 
Security.
    (b) Book-entry Sallie Mae Security means a Sallie Mae Security 
issued or maintained in the Book-entry System.
    (c) Book-entry System means the automated book-entry system operated 
by the Federal Reserve Banks acting as the fiscal agent for Sallie Mae, 
on which Book-entry Sallie Mae Securities are issued, recorded, 
transferred and maintained in book-entry form.
    (d) Definitive Sallie Mae Security means a Sallie Mae Security in 
engraved or printed form, or that is otherwise represented by a 
certificate.
    (e) Eligible Book-entry Sallie Mae Security means a Book-entry 
Sallie Mae Security issued or maintained in the Book-entry System which 
by the terms of its Security Documentation is available in either 
definitive or book-entry form.
    (f) Entitlement Holder means a Person to whose account an interest 
in a Book-entry Sallie Mae Security is credited on the records of a 
Securities Intermediary.
    (g) Federal Reserve Bank means a Federal Reserve Bank or Branch.
    (h) Federal Reserve Bank Operating Circular means the publication 
issued by each Federal Reserve Bank that sets forth the terms and 
conditions under which the Federal Reserve Bank maintains book-entry 
Securities accounts (including Book-entry Sallie Mae Securities) and 
transfers book-entry Securities (including Book-entry Sallie Mae 
Securities).
    (i) Funds Account means a reserve and/or clearing account at a 
Federal Reserve Bank to which debits or credits are posted for transfers 
against payment, book-entry securities transaction fees, or principal 
and interest payments.
    (j) Participant means a Person that maintains a Participant's 
Securities Account with a Federal Reserve Bank.
    (k) Participant's Securities Account means an account in the name of 
a Participant at a Federal Reserve Bank to which Book-entry Sallie Mae 
Securities held for a Participant are or may be credited.
    (l) Person means and includes an individual, corporation, company, 
governmental entity, association, firm, partnership, trust, estate, 
representative, and any other similar organization, but does not mean or 
include the United States, Sallie Mae, or a Federal Reserve Bank.
    (m) Revised Article 8 means Uniform Commercial Code, Revised Article 
8, Investment Securities (with Conforming and Miscellaneous Amendments 
to Articles 1, 3, 4, 5, 9, and 10) 1994 Official Text. Revised Article 8 
of the Uniform Commercial Code is incorporated by reference in this part 
pursuant to 5 U.S.C. 552(a) and 1 CFR part 51. Article 8 was adopted by 
the American Law Institute and the National Conference of Commissioners 
on Uniform State laws and approved by the American Bar Association on 
February 14, 1995. Copies of this publication are available from the 
Executive Office of the American Law Institute, 4025 Chestnut Street, 
Philadelphia, PA 19104, and the National Conference of Commissioners on 
Uniform State Laws, 676 North St. Clair Street, Suite 1700, Chicago, IL 
60611. Copies are also available for public inspection at the Department 
of the Treasury Library, Room 5030, main Treasury Building, 1500 
Pennsylvania Avenue, N.W., Washington D.C. 20220, and in the Office of 
the Federal Register, 800 North Capitol St., N.W., Suite 700, Washington 
D.C.

[[Page 345]]

    (n) Sallie Mae means the Student Loan Marketing Association, a stock 
holder-owned corporation and government-sponsored enterprise established 
in 1972 by, and operating pursuant to, section 439 of the Higher 
Education Act of 1965, as amended, 20 U.S.C. 1087-2.
    (o) Sallie Mae Security means any security or obligation of Sallie 
Mae issued in the form of a Definitive Sallie Mae Security or a Book-
entry Sallie Mae Security.
    (p) Securities Documentation means the applicable statement of terms 
and conditions or other documents establishing the terms of a Book-entry 
Sallie Mae Security.
    (q) Securities Intermediary means:
    (1) A Person that is registered as a ``clearing agency'' under the 
federal securities laws; a Federal Reserve Bank; any other Person that 
provides clearance or settlement services with respect to a Book-entry 
Security that would require it to register as a clearing agency under 
the federal securities laws but for an exclusion or exemption from the 
registration requirement, if its activities as a clearing corporation, 
including promulgation of rules, are subject to regulation by a federal 
or state governmental authority; or
    (2) A Person (other than an individual, unless such individual is 
registered as a broker or dealer under the federal securities laws) 
including a bank or broker, that in the ordinary course of its business 
maintains securities accounts for others and is acting in that capacity.
    (r) Security means any note, bond, debenture, evidence of 
indebtedness, or, in general, any interest or instrument commonly known 
as a ``security.''
    (s) Security Entitlement means the rights and property interest of 
an Entitlement Holder with respect to a Book-entry Sallie Mae Security.
    (t) State means any state of the United States, the District of 
Columbia, Puerto Rico, the Virgin Islands, or any other territory or 
possession of the United States.
    (u) Transfer Message means an instruction of a Participant to a 
Federal Reserve Bank to effect a transfer of a Book-entry Security 
(including a Book-entry Sallie Mae Security) maintained in the Book-
entry System, as set forth in Federal Reserve Bank Operating Circulars.



Sec. 354.2  Law governing rights and obligations of Federal Reserve Banks, and Sallie Mae; rights of any Person against Federal Reserve Banks and Sallie Mae.

    (a) Except as provided in paragraph (b) of this section, the 
following are governed solely by the book-entry regulations contained in 
this part 354, the Securities Documentation (to the extent not 
inconsistent with these regulations) and Federal Reserve Bank Operating 
Circulars:
    (1) The rights and obligations of Sallie Mae and the Federal Reserve 
Banks with respect to:
    (i) A Book-entry Sallie Mae Security or Security Entitlement; and
    (ii) The operation of the Book-entry System as it applies to Sallie 
Mae Securities; and
    (2) The rights of any Person, including a Participant, against 
Sallie Mae and the Federal Reserve Banks with respect to:
    (i) A Book-entry Sallie Mae Security or Security Entitlement; and
    (ii) The operation of the Book-entry System as it applies to Sallie 
Mae Securities.
    (b) A security interest in a Security Entitlement that is in favor 
of a Federal Reserve Bank from a Participant and that is not recorded on 
the books of a Federal Reserve Bank pursuant to Sec. 354.4(c)(1), is 
governed by the law (not including the conflict-of-law rules) of the 
jurisdiction where the head office of the Federal Reserve Bank 
maintaining the Participant's Securities Account is located. A security 
interest in a Security Entitlement that is in favor of a Federal Reserve 
Bank from a Person that is not a Participant, and that is not recorded 
on the books of a Federal Reserve Bank pursuant to Sec. 354.14(c)(1), is 
governed by the law determined in the manner specified in Sec. 354.3.
    (c) If the jurisdiction specified in the first sentence of paragraph 
(b) of this section is a State that has not adopted Revised Article 8 
(incorporated by reference, see Sec. 354.1), then the law specified in 
paragraph (b) shall be the law of that State as though Revised Article 8 
had been adopted by that State.

[[Page 346]]



Sec. 354.3  Law governing other interests.

    (a) To the extent not inconsistent with the regulations in this 
part, the law (not including the conflict-of-law rules) of a Securities 
Intermediary's jurisdiction governs:
    (1) The acquisition of a Security Entitlement from the Securities 
Intermediary;
    (2) The rights and duties of the Securities Intermediary and 
Entitlement Holder arising out of a Security Entitlement;
    (3) Whether the Securities Intermediary owes any duties to an 
adverse claimant to a Security Entitlement;
    (4) Whether an Adverse Claim can be asserted against a Person who 
acquires a Security Entitlement from the Securities Intermediary or a 
Person who purchases a Security Entitlement or interest therein from an 
Entitlement Holder; and
    (5) Except as otherwise provided in paragraph (c) of this section, 
the perfection, effect of perfection or non-perfection and priority of a 
security interest in a Security Entitlement.
    (b) The following rules determine a ``Securities Intermediary's 
jurisdiction'' for purposes of this section:
    (1) If an agreement between the Securities Intermediary and its 
Entitlement Holder specifies that it is governed by the law of a 
particular jurisdiction, that jurisdiction is the Securities 
Intermediary's jurisdiction.
    (2) If an agreement between the Securities Intermediary and its 
Entitlement Holder does not specify the governing law as provided in 
paragraph (b)(1) of this section, but expressly specifies that the 
securities account is maintained at an office in a particular 
jurisdiction, that jurisdiction is the Securities Intermediary's 
jurisdiction.
    (3) If an agreement between the Securities Intermediary and its 
Entitlement Holder does not specify a jurisdiction as provided in 
paragraph (b)(1) or (b)(2) of this section, the Securities 
Intermediary's jurisdiction is the jurisdiction in which is located the 
office identified in an account statement as the office serving the 
Entitlement Holder's account.
    (4) If an agreement between the Securities Intermediary and its 
Entitlement Holder does not specify a jurisdiction as provided in 
paragraph (b)(1) or (b)(2) of this section and an account statement does 
not identify an office serving the Entitlement Holder's account as 
provided in paragraph (b)(3) of this section, the Securities 
Intermediary's jurisdiction is the jurisdiction in which is located the 
chief executive office of the Securities Intermediary.
    (c) Notwithstanding the general rule in paragraph (a)(5) of this 
section, the law (but not the conflict-of-law rules) of the jurisdiction 
in which the Person creating a security interest is located governs 
whether and how the security interest may be perfected automatically or 
by filing a financing statement.
    (d) If the jurisdiction specified in paragraph (b) of this section 
is a State that has not adopted Revised Article 8 (incorporated by 
reference, see Sec. 354.1), then the law for the matters specified in 
paragraph (a) of this section shall be the law of that State as though 
Revised Article 8 had been adopted by that State. For purposes of the 
application of the matters specified in paragraph (a) of this section, 
the Federal Reserve Bank maintaining the Participant's Securities 
Account is a clearing corporation, and the Participant's interest in a 
Book-entry Security is a Security Entitlement.



Sec. 354.4  Creation of Participant's Security Entitlement; security interests.

    (a) A Participant's Security Entitlement is created when a Federal 
Reserve Bank indicates by book-entry that a Book-entry Sallie Mae 
Security has been credited to a Participant's Securities Account.
    (b) A security interest in a Security Entitlement of a Participant 
in favor of the United States to secure deposits of public money, 
including without limitation deposits to the Treasury tax and loan 
accounts, or other security interest in favor of the United States that 
is required by Federal statute, regulation, or agreement, and that is 
marked on the books of a Federal Reserve Bank is thereby effected and 
perfected, and has priority over any other interest in the securities. 
Where a security interest in favor of the United States in a Security 
Entitlement of a

[[Page 347]]

Participant is marked on the books of a Federal Reserve Bank, such 
Federal Reserve Bank may rely, and is protected in relying, exclusively 
on the order of an authorized representative of the United States 
directing the transfer of the security. For purposes of this paragraph, 
an ``authorized representative of the United States'' is the official 
designated in the applicable regulations or agreement to which a Federal 
Reserve Bank is a party, governing the security interest.
    (c)(1) Sallie Mae and the Federal Reserve Banks have no obligation 
to agree to act on behalf of any Person or to recognize the interest of 
any transferee of a security interest or other limited interest in favor 
of any Person except to the extent of any specific requirement of 
Federal law or regulation or to the extent set forth in any specific 
agreement with the Federal Reserve Bank on whose books the interest of 
the Participant is recorded. To the extent required by such law or 
regulation or set forth in an agreement with a Federal Reserve Bank, or 
the Federal Reserve Bank Operating Circular, a security interest in a 
Security Entitlement that is in favor of a Federal Reserve Bank, Sallie 
Mae, or a Person may be created and perfected by a Federal Reserve Bank 
marking its books to record the security interest. Except as provided in 
paragraph (b) of this section, a security interest in a Security 
Entitlement marked on the books of a Federal Reserve Bank shall have 
priority over any other interest in the securities.
    (2) In addition to the method provided in paragraph (c)(1) of this 
section, a security interest, including a security interest in favor of 
a Federal Reserve Bank, may be perfected by any method by which a 
security interest may be perfected under applicable law as described in 
Sec. 354.2(b) or Sec. 354.3. The perfection, effect of perfection or 
non-perfection and priority of a security interest are governed by such 
applicable law. A security interest in favor of a Federal Reserve Bank 
shall be treated as a security interest in favor of a clearing 
corporation in all respects under such law, including with respect to 
the effect of perfection and priority of such security interest. A 
Federal Reserve Bank Operating Circular shall be treated as a rule 
adopted by a clearing corporation for such purposes.



Sec. 354.5  Obligations of Sallie Mae; no adverse claims.

    (a) Except in the case of a security interest in favor of the United 
States or a Federal Reserve Bank or otherwise as provided in 
Sec. 354.4(c)(1), for the purposes of this part 354, Sallie Mae and the 
Federal Reserve Banks shall treat the Participant to whose Securities 
Account an interest in a Book-entry Sallie Mae Security has been 
credited as the person exclusively entitled to issue a Transfer Message, 
to receive interest and other payments with respect thereof and 
otherwise to exercise all the rights and powers with respect to such 
Security, notwithstanding any information or notice to the contrary. 
Neither the Federal Reserve Banks nor Sallie Mae is liable to a Person 
asserting or having an Adverse Claim to a Security Entitlement or to a 
Book-entry Sallie Mae Security in a Participant's Securities Account, 
including any such claim arising as a result of the transfer or 
disposition of a Book-entry Sallie Mae Security by a Federal Reserve 
Bank pursuant to a Transfer Message that the Federal Reserve Bank 
reasonably believes to be genuine.
    (b) The obligation of Sallie Mae to make payments of interest and 
principal with respect to Book-entry Sallie Mae Securities is discharged 
at the time payment in the appropriate amount is made as follows:
    (1) Interest on Book-entry Sallie Mae Securities is either credited 
by a Federal Reserve Bank to a Funds Account maintained at such Bank or 
otherwise paid as directed by the Participant.
    (2) Book-entry Sallie Mae Securities are redeemed at maturity or 
pursuant to a call for redemption in accordance with their terms by a 
Federal Reserve Bank withdrawing the securities from the Participant's 
Securities Account in which they are maintained and by either crediting 
the amount of the redemption proceeds, including both principal and 
interest where applicable, to a Funds Account at such Bank or otherwise 
paying such principal and interest, as directed by the Participant.

[[Page 348]]



Sec. 354.6  Authority of Federal Reserve Banks.

    (a) Each Federal Reserve Bank is hereby authorized as fiscal agent 
of Sallie Mae to perform functions with respect to the issuance of Book-
entry Sallie Mae Securities offered and sold by Sallie Mae, in 
accordance with the Securities Documentation, and Federal Reserve Bank 
Operating Circulars; to service and maintain Book-entry Sallie Mae 
Securities in accounts established for such purposes; to make payments 
of principal and interest with respect to such Book-entry Sallie Mae 
Securities as directed by Sallie Mae; to effect transfer of Book-entry 
Sallie Mae Securities between Participants' Securities Account as 
directed by the Participants; to effect conversions between Book-entry 
Sallie Mae securities and Definitive Sallie Mae Securities with respect 
to those securities as to which conversion rights are available pursuant 
to the applicable Securities Documentation; and to perform such other 
duties as fiscal agent as may be requested by Sallie Mae.
    (b) Each Federal Reserve Bank may issue Operating Circulars not 
inconsistent with this part, governing the details of its handling of 
Book-entry Sallie Mae Securities, Security Entitlements, and the 
operation of the Book-entry System under this part.



Sec. 354.7  Withdrawal of eligible Book-entry Sallie Mae Securities for conversion to definitive form.

    (a) Eligible Book-entry Sallie Mae Securities may be withdrawn from 
the Book-entry System by requesting delivery of like Definitive Sallie 
Mae Securities.
    (b) A Federal Reserve Bank shall, upon receipt of appropriate 
instructions to withdraw Eligible Book-entry Sallie Mae Securities from 
book-entry in the Book-entry System, convert such securities into 
Definitive Sallie Mae Securities and deliver them in accordance with 
such instructions. No such conversion shall affect existing interests in 
such Sallie Mae Securities.
    (c) All requests for withdrawal of Eligible Book-entry Sallie Mae 
Securities must be made prior to the maturity or date of call of such 
securities.
    (d) Sallie Mae Securities which are to be delivered upon withdrawal 
may be issued in either registered or bearer form, to the extent 
permitted by the applicable Securities Documentation.



Sec. 354.8  Waiver of regulations.

    The Secretary reserves the right, in the Secretary's discretion, to 
waive any provision(s) of the regulations in this part in any case or 
class of cases for the convenience of Sallie Mae, or in order to relieve 
any person or entity of unnecessary hardship, if such action is not 
inconsistent with law, does not adversely affect substantial existing 
rights, and the Secretary is satisfied that such action will not subject 
Sallie Mae to any substantial expense or liability.



Sec. 354.9  Liability of Sallie Mae and Federal Reserve Banks.

    Sallie Mae and the Federal Reserve Banks may rely on the information 
provided in a Transfer Message, and are not required to verify the 
information. Sallie Mae and the Federal Reserve Banks shall not be 
liable for any action taken in accordance with the information set out 
in a Transfer Message or evidence submitted in support thereof.



Sec. 354.10  Additional provisions.

    (a) Additional requirements. In any case or any class of cases 
arising under these regulations, Sallie Mae may require such additional 
evidence and a bond of indemnity, with or without surety, as may in the 
judgment of Sallie Mae be necessary for the protection of the interests 
of Sallie Mae.
    (b) Notice of attachment for Sallie Mae Securities in Book-entry 
System. The interest of a debtor in a Security Entitlement may be 
reached by a creditor only by legal process upon the Securities 
Intermediary with whom the debtor's securities account is maintained, 
except where a Security Entitlement is maintained in the name of a 
secured party, in which case the debtor's interest may be reached by 
legal process upon the secured party. The regulations in this part do 
not purport to establish whether a Federal Reserve Bank is required to 
honor an order or other notice of attachment in any particular case or 
class of cases.

[[Page 349]]



PART 355--REGULATIONS GOVERNING FISCAL AGENCY CHECKS--Table of Contents




Sec.
355.0  What does this part cover?
355.1  Do any other regulations cover fiscal agency checks?
355.2  What special terms do I need to know to understand this part?
355.3  Where can I cash my fiscal agency check?
355.4  Is there a time limit on cashing a fiscal agency check?
355.5  What warranties does a presenting bank make?
355.6  What happens if the presenting bank breaches its warranty?
355.7  What notice should I give if I do not receive my check or if a 
          check is lost, stolen, or destroyed?
355.8  How can I get a replacement fiscal agency check?
355.9  What should I do if I recover a check reported as lost, stolen, 
          destroyed, or not received?
355.10  What happens if I present my check to the payor Reserve Bank 
          more than six months after the issue date of the check?
355.11  What should I do if the endorsement on my check is forged or 
          unauthorized?
355.12  What requirements apply if the check is payable to two or more 
          persons?
355.13  Are there any additional requirements related to fiscal agency 
          checks?
355.14  Can these regulations be waived?
355.15  Can these regulations be amended?

    Authority: 12 U.S.C. 391; 31 U.S.C. Ch. 31.

    Source: 65 FR 65700, Nov. 1, 2000, unless otherwise noted.



Sec. 355.0  What does this part cover?

    This part governs checks issued for payments in connection with 
United States securities. These checks, referred to as ``fiscal agency 
checks,'' are issued by a designated Federal Reserve Bank in its 
capacity as fiscal agent of the United States. The checks are drawn on 
the payor Federal Reserve Bank in its banking capacity. The drawer of a 
fiscal agency check is the United States, and the drawee is a Federal 
Reserve Bank. The rights and liabilities of the United States, the 
Federal Reserve Banks, and others are set out in this part.



Sec. 355.1  Do any other regulations cover fiscal agency checks?

    The regulations governing checks drawn on the United States and on 
designated depositories of the United States do not apply to fiscal 
agency checks, unless a statute specifically provides differently, or 
unless we state differently in this part. If a definition or matter 
pertaining to fiscal agency checks is not specifically covered in this 
part, we will apply the provisions of Regulations J of the Board of 
Governors of the Federal Reserve System, at 12 CFR part 210. To the 
extent not otherwise covered by this part or by Regulation J, we will 
apply the provisions of the Uniform Commercial Code (U.C.C.)



Sec. 355.2  What special terms do I need to know to understand this part?

    Depository institution means:
    (1) Any insured bank, mutual savings bank or savings bank as defined 
in 12 U.S.C. 1813, or any institution eligible to become an insured bank 
under 12 U.S.C. 1815;
    (2) Any insured credit union as defined in 12 U.S.C. 1752, or any 
credit union eligible to become an insured credit union under 12 U.S.C. 
1781;
    (3) Any member as defined in 12 U.S.C. 1422; and
    (4) Any savings association as defined in 12 U.S.C. that is an 
insured depository institution as defined in the Federal Deposit 
Insurance Act, 12 U.S.C. 1811 et seq., or is eligible to become an 
insured depository institution under that Act.
    Fiscal agency check means a check for a payment in connection with a 
United States security drawn upon a Reserve Bank and issued on our 
behalf by the Reserve Bank in its capacity as fiscal agent of the United 
States.
    Payee (or ``you'') means the person or persons to whom a fiscal 
agency check is made payable.
    Payor Reserve Bank means the Reserve Bank on which a fiscal agency 
check is drawn.
    Presenting bank means a depository institution that sends a fiscal 
agency check directly to a Reserve Bank for payment or collection.
    Reserve Bank or Federal Reserve Bank means any Federal Reserve Bank 
or any branch of a Federal Reserve Bank.
    Security, for the purpose of this part, means a direct obligation of 
the United

[[Page 350]]

States, including a Treasury bill, note, bond or savings bond/note.
    We (or ``us'') refers to the Secretary of the Treasury and the 
Secretary's delegates at the Treasury Department and the Bureau of the 
Public Debt. The term also extends to any fiscal or financial agency 
acting on behalf of the United States when designated to act by the 
Secretary or the Secretary's delegates. The term does not refer to a 
United States Savings Bond issuing or paying agent.



Sec. 355.3  Where can I cash my fiscal agency check?

    Presentment of a fiscal agency check must be made to the payor 
Reserve Bank. The payor Reserve Bank will only cash a fiscal agency 
check presented by the payee who can be identified to the satisfaction 
of the Reserve Bank. Otherwise, a fiscal agency check must be presented 
through banking channels. A refusal to accept or to pay fiscal agency 
check presented by a person other than the payee, or by a payee who is 
not reasonably identified, does not constitute dishonor.



Sec. 355.4  Is there a time limit on cashing a fiscal agency check?

    A payor Reserve Bank may refuse to pay a fiscal agency check 
presented more than six (6) months after the issue date of the check. If 
the check is not presented within this time, you must follow the 
procedures in Sec. 355.10.



Sec. 355.5  What warranties does a presenting bank make?

    (a) A presenting bank makes the warranties required of a sender 
under Subpart A of Regulation J (12 CFR part 210). This paragraph does 
not limit any warranty by a presenter or other party arising under State 
law.
    (b) We are not barred from recovering on a breach of warranty solely 
because:
    (1) Our negligence contributed to a fraudulent endorsement or 
material alteration;
    (2) We did not promptly discover an unauthorized signature or 
alteration;
    (3) An impostor fraudulently caused the issuance of a fiscal agency 
check in the name of any existing payee; or
    (4) Our employee fraudulently caused the issuance of a fiscal agency 
check in the name of any existing payee.



Sec. 355.6  What happens if the presenting bank breaches its warranty?

    If the presenting bank breaches its warranty, the payor Reserve Bank 
may either return the check to the presenting bank or send notice of the 
breach to the presenting bank. If the presenting bank does not make 
prompt restitution when it receives the returned check or notice of 
breach, we may begin appropriate collection procedures.



Sec. 355.7  What notice should I give if I do not receive my check or if a check is lost, stolen, or destroyed?

    If a fiscal agency check is not received within a reasonable time 
after a payment is due, or if a check is lost, stolen, or destroyed, you 
must provide prompt written notification. Your written notice may be 
sent to us or to the payor Reserve Bank. You may give notice by 
telephone, but we will not issue a replacement check until you confirm 
the notice in writing. The written notice must provide enough 
information for us to identify the account and the security to which the 
payment relates. We will stop payment on the fiscal agency check if we 
have a reasonable time to act before final payment.



Sec. 355.8  How can I get a replacement fiscal agency check?

    The payor Federal Reserve Bank will issue a replacement fiscal 
agency check if:
    (a) You submit written notice:
    (b) The check is unpaid;
    (c) We determine that recovery of the original check is unlikely; 
and
    (d) The payee and endorsee, if any, of the check execute the 
required indemnification agreement.



Sec. 355.9   What should I do if I recover a check reported as lost, stolen, destroyed, or not received?

    If you recover the original check you must notify us in writing. If 
we have not yet issued a replacement check, we will remove the stop 
payment order against the original check. If we have

[[Page 351]]

already issued a replacement check, you must return the original check 
to us.



Sec. 355.10   What happens if I present my check to the payor Reserve Bank more than six months after the issue date of the check?

    If the payor Reserve Bank refuses payment on a fiscal agency check 
solely because it is presented more than six (6) months after the issue 
date of the check, a replacement check will be issued if you:
    (a) Surrender the original check; and
    (b) Executive the required indemnification agreement.



Sec. 355.11   What should I do if the endorsement on my check is forged or unauthorized?

    If we verify the existence or a forged or unauthorized endorsement 
on a paid fiscal agency check, the payor Reserve Bank will issue a 
replacement check to the person entitled. The payee or endorsee must 
execute an affidavit that there has been a forged or unauthorized 
endorsement. We may also require an indemnification agreement.



Sec. 355.12   What requirements apply if the check is payable to two or more persons?

    If the fiscal agency check is payable to two or more persons, the 
requirements of this part apply to all designated payees.



Sec. 355.13   Are there any additional requirements related to fiscal agency checks?

    We may require an indemnification agreement, with or without surety. 
You must provide any additional evidence we consider necessary. We will 
require any information necessary for the protection of the interests of 
the United States.



Sec. 355.14   Can these regulations be waived?

    We reserve the right, in our discretion, to waive any provision of 
the regulations in this part in any case or class of cases for the 
convenience of the United States, or to relieve any person of 
unnecessary hardship, if the waiver is not inconsistent with law and 
will not subject the United States to substantial expense or liability.



Sec. 355.15   Can these regulations be amended?

    We may, at any time, supplement, amend, or revise the regulations in 
this part.



PART 356--SALE AND ISSUE OF MARKETABLE BOOK-ENTRY TREASURY BILLS, NOTES, AND BONDS (DEPARTMENT OF THE TREASURY CIRCULAR, PUBLIC DEBT SERIES NO. 1-93)--Table of Contents




                     Subpart A--General Information

Sec.
356.0  Authority for sale and issue.
356.1  Applicability.
356.2  Definitions.
356.3  Book-entry securities and systems.
356.4  Functions of Federal Reserve Banks.
356.5  Description of securities.

             Subpart B--Bidding, Certifications, and Payment

356.10  Offering announcement.
356.11  Submission of bids.
356.12  Noncompetitive and competitive bidding.
356.13  Net long position.
356.14  Submitting bids for customers.
356.15  Bidding through investment advisers.
356.16  Certifications.
356.17  Responsibility for payment.

         Subpart C--Determination of Auction Awards; Settlement

356.20  Determination of auction awards.
356.21  Proration of awards.
356.22  Limitation on auction awards.
356.23  Announcing auction results.
356.24  Notice of awards; confirmations.
356.25  Payment for awarded securities.

                   Subpart D--Miscellaneous Provisions

356.30  Payment of principal and interest on notes and bonds.
356.31  STRIPS.
356.32  Taxation.
356.33  Reservation of rights.
356.34  Remedies.
356.35  Reservations as to terms of offerings.
356.36  Paperwork Reduction Act approval.

Appendix A to Part 356--Bidder Definitions
Appendix B to Part 356--Formulas and Tables
Appendix C to Part 356--Investment Considerations

[[Page 352]]

Appendix D to Part 356--Description of the Consumer Price Index

Exhibit A to Part 356--Sample Announcements of Treasury Offerings to the 
          Public
Exhibit B to Part 356--Sample Autocharge Agreement to Deliver and Charge 
          for Securities Awarded in Department of the Treasury Auctions 
          (Submitter and Depository Institution)

    Authority: 5 U.S.C. 301; 31 U.S.C. 3102, et seq.; 12 U.S.C. 391.

    Source: 58 FR 414, Jan. 5, 1993, unless otherwise noted.



                     Subpart A--General Information



Sec. 356.0  Authority for sale and issue.

    The Secretary of the Treasury is authorized under chapter 31 of 
title 31, United States Code, to issue United States obligations and to 
offer them for sale under such terms and conditions as the Secretary may 
prescribe.



Sec. 356.1  Applicability.

    Unless otherwise specified in an offering announcement, the 
provisions in this part, including the appendices, govern the sale and 
issuance of all marketable Treasury securities and any other obligations 
issued by the Secretary that, by the terms of the offering announcement, 
are made subject to this part.



Sec. 356.2  Definitions.

    In this part, unless the context indicates otherwise:
    Accrued interest means an amount payable to the Department for such 
part of the next semiannual interest payment that represents interest 
income attributed to the period prior to the date of issue. (See 
appendix B, section I, paragraph C.)
    Adjusted value means, for an interest component stripped from an 
inflation-indexed security, an amount derived by multiplying the 
semiannual interest rate by the par amount and then multiplying this 
value by 100 divided by the Reference CPI of the original issue date (or 
dated date, when the dated date is different from the original issue 
date). (See Appendix B, Section IV to this part, for an example of how 
to calculate the adjusted value for interest components stripped from an 
inflation-indexed security.)
    Auction means a bidding process by which the Department sells 
marketable Treasury securities to the public.
    Autocharge agreement means a written agreement between a submitter 
and a depository institution or between a clearing corporation and a 
depository institution, acknowledged by a Federal Reserve Bank, which 
authorizes a Federal Reserve Bank to deliver securities awarded at 
auction to the book-entry account of the depository institution or, when 
authorized, to a TREASURY DIRECT account, and to charge a funds account 
of the depository institution for the settlement amount of the 
securities. (See exhibit B for a sample autocharge agreement between a 
submitter and a depository institution.)
    Bid means an offer to purchase a stated par amount of securities, 
either competitively or noncompetitively, in an auction. An offer to 
purchase a stated par amount of securities submitted by a depository 
institution or dealer to fulfill a guarantee to sell a specified amount 
of securities at an agreed-upon price or a price fixed in terms of an 
agreed-upon standard is a bid of the depository institution or dealer 
and not a bid of a customer.
    Bidder, as further defined in appendix A, means a person or an 
entity that bids either directly or through an entity authorized to 
submit bids for customers in an auction. In some cases, two or more 
persons or entities are considered to be one bidder based on their 
relationship or their actions in participating in an auction.
    Bid-to-cover ratio means the total par amount of securities bid for 
by the public divided by the total par amount of securities awarded to 
the public. The bid-to-cover ratio excludes any bids or awards for 
accounts of foreign and international monetary authorities at Federal 
Reserve Banks and for the account of the Federal Reserve Banks.
    Book-entry security means a security the issuance and maintenance of 
which are represented by an accounting entry or electronic record and 
not by a certificate. Treasury book-entry securities may generally be 
held in either TRADES or in TREASURY DIRECT. (See Sec. 356.3.)

[[Page 353]]

    Business day means any day other than a Saturday, Sunday, or other 
day on which the Federal Reserve Banks are not open for business.
    Call means the redemption, pursuant to the terms specified in its 
offering announcement, of a security, in whole or in part, prior to 
maturity, at the option of the Secretary.
    Clearing corporation means a clearing agency as defined in Section 3 
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(23)) that is 
registered with the Securities and Exchange Commission pursuant to 
Section 17A of the Securities Exchange Act of 1934 and the rules 
thereunder.
    Competitive bid means a bid to purchase a stated par amount of 
securities at a specified yield or discount rate.
    Consumer Price Index (CPI) means the monthly non-seasonally adjusted 
U.S. City Average All Items Consumer Price Index for All Urban 
Consumers, published by the Bureau of Labor Statistics of the Department 
of Labor. (See appendix D.)
    Corpus means the principal component of a stripped security and 
future callable semiannual interest payments, if any.
    CUSIP means Committee on Uniform Securities Identification 
Procedures.
    CUSIP number means the unique identifying number assigned to each 
separate security issue and each separate STRIPS component. CUSIP 
numbers are provided by the CUSIP Service Bureau of Standard & Poor's 
Corporation.
    Customer means a bidder on whose behalf a depository institution or 
dealer has been directed to submit or forward a competitive or 
noncompetitive bid for a specified amount of securities in a specific 
auction. Only depository institutions and dealers may submit or forward 
bids for customers, whether directly to a Federal Reserve Bank or the 
Bureau of the Public Debt, or through an intermediary depository 
institution or dealer.
    Daily interest decimal means, for a fixed-principal security, the 
interest factor attributable to one day of an interest payment period 
per $1,000 par amount.
    Dated date means the date from which interest accrues. The dated 
date and issue date are the same except when the date from which 
interest accrues is prior to the issue date.
    Dealer means an entity that is registered or has given notice of its 
status as a government securities broker or government securities 
dealer, pursuant to Section 15C(a)(1) of the Securities Exchange Act of 
1934.
    Delivery and payment agreement means a written agreement between a 
clearing corporation and a submitter, acknowledged by a Federal Reserve 
Bank, authorizing the Federal Reserve Bank, with respect to securities 
awarded to the submitter for its own account, to deliver such securities 
to, and accept payment from, a depository institution acting on behalf 
of the clearing corporation pursuant to an acknowledged autocharge 
agreement.
    Department means the United States Department of the Treasury.
    Depository institution means:
    (1) An entity described in section 19(b)(1)(A), excluding 
subparagraph (vii), of the Federal Reserve Act (12 U.S.C. 461(b)(1)(A)). 
Under section 19(b)(1)(A) of the Federal Reserve Act, the term 
depository institution includes:
    (i) Any insured bank as defined in 12 U.S.C. 1813 or any bank which 
is eligible to make application to become an insured bank under 12 
U.S.C. 1815;
    (ii) Any mutual savings bank as defined in 12 U.S.C. 1813 or any 
bank which is eligible to make application to become an insured bank 
under 12 U.S.C. 1815;
    (iii) Any savings bank as defined in 12 U.S.C. 1813 or any bank 
which is eligible to make application to become an insured bank under 12 
U.S.C. 1815;
    (iv) Any insured credit union as defined in 12 U.S.C. 1752 or any 
credit union which is eligible to make application to become an insured 
credit union under 12 U.S.C. 1781;
    (v) Any member as defined in 12 U.S.C. 1422; and
    (vi) Any savings association (as defined in 12 U.S.C. 1813) which is 
an insured depository institution (as defined in the Federal Deposit 
Insurance Act, 12 U.S.C. 1811, et seq.) or is eligible to apply to 
become an insured depository institution under such Act.
    (2) Any agency or branch of a foreign bank as defined by the 
International

[[Page 354]]

Banking Act of 1978, as amended (12 U.S.C. 3101).
    Discount means the difference between par and the price of the 
security, when the price is less than par.
    Discount amount means the discount divided by 100 and multiplied by 
the par amount.
    Discount rate, also referred to as ``bank discount rate,'' means an 
annualized rate of return to maturity on bills, expressed in percentage 
terms and based on a 360-day year. (See appendix B for formulas and 
examples.)
    Federal Reserve Bank means a Federal Reserve Bank or a branch of a 
Federal Reserve Bank.
    Funds account means a cash account maintained by a depository 
institution at a Federal Reserve Bank.
    Index means the Consumer Price Index, which is used as the basis for 
making adjustments to principal amounts of inflation-indexed securities. 
(See appendix D.)
    Index ratio means, for any particular date and any particular 
inflation-indexed security, the Reference CPI applicable to such date 
divided by the Reference CPI applicable to the original issue date (or 
dated date, when the dated date is different from the original issue 
date). (See appendix B, section I, paragraph B.)
    Inflation-adjusted principal means, for an inflation-indexed 
security, the value of the security derived by multiplying the par 
amount by the applicable index ratio as described in appendix B, section 
I, paragraph B.
    Interest rate means the annual percentage rate of interest paid on 
the par amount or the inflation-adjusted principal of a specific issue 
of notes or bonds. (See appendix B for methods and examples of interest 
calculations on notes and bonds.)
    Intermediary means a depository institution or dealer that forwards 
bids for customers to another depository institution or dealer and not 
directly to a Federal Reserve Bank or the Bureau of the Public Debt.
    Investment adviser means any person or entity that has investment 
discretion for the bids or positions of a person or entity not 
considered part of the investment adviser under the bidder definitions 
in Appendix A of this part. Investment discretion includes determining 
what, how many, and when securities shall be purchased or sold. A person 
or entity managing investments for itself is not considered an 
investment adviser for such investments. Where a person is employed or 
supervised by an entity in connection with his activities as an 
investment adviser, such person is considered to be part of that entity.
    Issue date means the date specified in the offering announcement on 
which a security is issued as an obligation of the United States, and 
from which interest normally begins to accrue.
    Marketable security means a security that is negotiable and 
transferable, i.e., may be bought and sold in the secondary market.
    Maturity date means the date specified in the offering announcement 
on which a security becomes due and payable, and ceases to earn 
interest.
    Minimum to hold means the smallest amount of a security that will be 
issued to a bidder and may be held in any book-entry account. Unless 
otherwise stated in the offering announcement, the minimum to hold is 
the same as the minimum bid amount given in the offering announcement.
    Multiple-price auction means an auction in which each successful 
competitive bidder pays the price equivalent to the yield or rate that 
it bid.
    Multiple to hold means the smallest additional amount of a security 
that will be issued to a bidder and may be held in any book-entry 
account above the minimum to hold. Unless otherwise stated in the 
offering announcement, the multiple to hold is the same as the multiple 
to bid amount given in the offering announcement.
    Noncompetitive bid means, for a single-price auction, a bid to 
purchase securities at the highest yield or discount rate of awards to 
competitive bidders. For a multiple-price auction, a noncompetitive bid 
means a bid to purchase securities at the weighted average yield or 
discount rate of awards to competitive bidders.
    Par means a price of 100. (See appendix B.)
    Par amount means the stated value of a security at original 
issuance.
    Person means a natural person.

[[Page 355]]

    Premium means the difference between par and the price of the 
security, when the price is greater than par.
    Premium amount means the premium divided by 100 and multiplied by 
the par amount.
    Price means the price of a security as calculated using the formulas 
in appendix B.
    Public offering means the par amount of securities offered to the 
public for purchase in an auction. For all bills except cash management 
bills, the public offering is the amount specified in the offering 
announcement, less securities awarded in the auction to the Federal 
Reserve Banks for the accounts of foreign and international monetary 
authorities (up to the amount of maturing securities held by such 
accounts). For notes, bonds, and cash management bills, the public 
offering is the same as the amount specified in the offering 
announcement.
    Real yield means, for an inflation-indexed security, the yield based 
on the payment stream in constant dollars, i.e., before adjustment by 
the index ratio.
    Reference CPI (Ref CPI) means, for an inflation-indexed security, 
the index number applicable to a given date. (See appendix B, section I, 
paragraph B.)
    Reopening means the auction of an additional amount of an 
outstanding security.
    Secretary means Secretary of the Treasury.
    Security means a Treasury bill, note, or bond, each as described in 
this part, and any other obligation issued by the Secretary that, by the 
terms of the applicable offering announcement, is made subject to this 
part. Security includes an interest or principal component under the 
STRIPS program (see below).
    Settlement means final and complete payment for securities awarded 
in an auction.
    Settlement amount means the par amount of securities awarded less 
any discount amount and plus any premium amount and/or any accrued 
interest. For inflation-indexed securities, the settlement amount also 
includes any inflation adjustment when such securities are reopened or 
when the dated date is different from the issue date.
    Single-price auction means an auction in which all successful 
bidders pay the same price regardless of the yields or rates they each 
bid.
    STRIPS (Separate Trading of Registered Interest and Principal of 
Securities) means the Department's program under which eligible 
securities are authorized to be separated into principal and interest 
components, and transferred separately. These components are maintained 
in book-entry accounts, and transferred, in TRADES.
    Submitter means the person or entity submitting bids directly to a 
Federal Reserve Bank or the Bureau of the Public Debt for its own 
account, for the account of others, or both. The only submitters that 
are permitted to submit bids for the account of others are depository 
institutions and dealers.
    Tender means the document or computer transmission submitted to a 
Federal Reserve Bank or the Bureau of the Public Debt by which a bidder 
bids for securities.
    TINT means an interest component from a stripped security.
    TRADES means the Treasury/Reserve Automated Debt Entry System.
    TREASURY DIRECT means the TREASURY DIRECT Book-Entry Securities 
System. (See 31 CFR part 357, subpart C.)
    Weighted average means the average of the yields or discount rates 
at which securities are awarded to competitive bidders weighted by the 
par amount of securities allotted at each yield or discount rate.
    Yield, also referred to as ``yield to maturity,'' means the 
annualized rate of return to maturity on a fixed-principal security 
expressed as a percentage. For an inflation-indexed security, yield 
means the real yield. (See appendix B.)

[58 FR 414, Jan. 5, 1993, as amended at 59 FR 28774, June 3, 1994; 60 FR 
13907, Mar. 15, 1995; 61 FR 37010, July 16, 1996; 61 FR 43637, Aug. 23, 
1996; 62 FR 850, Jan. 6, 1997; 62 FR 25114, May 8, 1997; 63 FR 35783, 
June 30, 1998; 64 FR 3634, Jan. 25, 1999]



Sec. 356.3  Book-entry securities and systems.

    Securities issued subject to this part shall be held and transferred 
in either

[[Page 356]]

of the two book-entry securities systems--TRADES or TREASURY DIRECT--
described in this section. Securities are maintained and transferred, to 
the extent authorized in 31 CFR part 357, in these two book-entry 
systems at their par amount, e.g., for inflation-indexed securities, 
adjustments for inflation will not be included in this amount. 
Securities may be transferred from one system to the other in accordance 
with Treasury regulations governing book-entry Treasury bills, notes, 
and bonds. See Department of the Treasury Circular, Public Debt Series 
No. 2-86, as amended (31 CFR part 357).
    (a) Treasury/Reserve Automated Debt Entry System (TRADES). TRADES is 
established, maintained and operated by the Federal Reserve Banks acting 
as fiscal agents of the United States, pursuant to 12 U.S.C. 391. The 
Federal Reserve Banks maintain book-entry accounts for themselves, 
depository institutions, and other authorized entities, such as 
government and international agencies and foreign central banks. In 
their accounts, depository institutions maintain securities held for 
their own account and for the accounts of others, including other 
depository institutions and dealers, which may, in turn, maintain 
accounts for others. For accounts maintained in TRADES, Treasury 
discharges its payment obligations when payment is credited to the 
applicable account maintained at a Federal Reserve Bank or payment is 
made in accordance with the instructions of the person or entity 
maintaining such account. Further, neither Treasury nor the Federal 
Reserve Banks have any obligations to, nor will they recognize any 
claims of, any person or entity that does not have an account at a 
Federal Reserve Bank. In addition, neither Treasury nor the Federal 
Reserve Banks will recognize the claims of any person or entity with 
respect to any accounts not maintained at a Federal Reserve Bank.
    (b) TREASURY DIRECT. TREASURY DIRECT is a system in which the book-
entry securities of account holders are identified and maintained 
directly on the records of the Bureau of the Public Debt, Department of 
the Treasury. In TREASURY DIRECT, Treasury discharges its payment 
obligations when payment is made to a depository institution for credit 
to the account specified by the owner of the security, or when payment 
is made in accordance with the instructions of the owner of the 
security.

[58 FR 414, Jan. 5, 1993, as amended at 61 FR 43637, Aug. 23, 1996; 62 
FR 850, Jan. 6, 1997]



Sec. 356.4  Functions of Federal Reserve Banks.

    Federal Reserve Banks, as fiscal agents of the United States, are 
authorized to perform all activities necessary to carry out the 
provisions of this part, any offering announcements, and applicable 
regulations.



Sec. 356.5  Description of securities.

    Securities offered pursuant to this part are offered exclusively in 
book-entry form and are direct obligations of the United States, issued 
under chapter 31 of title 31 of the United States Code. The securities 
are subject to the terms and conditions set forth in this part, 
including the appendices, as well as the regulations governing book-
entry Treasury bills, notes, and bonds (31 CFR part 357), and the 
offering announcements, all to the extent applicable. When the 
Department issues additional securities with the same CUSIP number as 
outstanding securities, all securities with the same CUSIP number are 
considered the same security.
    (a) Treasury bills. Treasury bills are issued at a discount, are 
redeemed at their par amount at maturity, and have maturities of not 
more than one year.
    (b) Treasury notes--(1) Treasury fixed-principal \1\ notes. Treasury 
fixed-principal notes are issued with a stated rate of interest to be 
applied to the par amount, have interest payable semiannually, and are 
redeemed at their par amount at maturity. They are sold

[[Page 357]]

at discount, par, or premium, depending upon the auction results. They 
have maturities of at least one year, but not more than ten years.
---------------------------------------------------------------------------

    \1\ The term ``fixed-principal'' is used in this part to distinguish 
such securities from ``inflation-indexed'' securities. Fixed-principal 
notes and fixed-principal bonds are referred to as ``notes'' and 
``bonds'' in official Treasury publications, such as offering 
announcements and auction results press releases, as well as in auction 
systems.
---------------------------------------------------------------------------

    (2) Treasury inflation-indexed notes. Treasury inflation-indexed 
notes are issued with a stated rate of interest to be applied to the 
inflation-adjusted principal on each interest payment date, have 
interest payable semiannually, and are redeemed at maturity at their 
inflation-adjusted principal, or at their par amount, whichever is 
greater. They are sold at discount, par, or premium, depending upon the 
auction results. They have maturities of at least one year, but not more 
than ten years. (See appendix B for price and interest payment 
calculations and appendix C for Investment Considerations.)
    (c) Treasury bonds--(1) Treasury fixed-principal bonds. Treasury 
fixed-principal bonds are issued with a stated rate of interest to be 
applied to the par amount, have interest payable semiannually, and are 
redeemed at their par amount at maturity. They are sold at discount, 
par, or premium, depending upon the auction results. They typically have 
maturities of more than ten years.
    (2) Treasury inflation-indexed bonds. Treasury inflation-indexed 
bonds are issued with a stated rate of interest to be applied to the 
inflation-adjusted principal on each interest payment date, have 
interest payable semiannually, and are redeemed at maturity at their 
inflation-adjusted principal, or at their par amount, whichever is 
greater. They are sold at discount, par, or premium, depending upon the 
auction results. They typically have maturities of more than ten years. 
(See appendix B for price and interest payment calculations and appendix 
C for Investment Considerations.)

[58 FR 414, Jan. 5, 1993, as amended at 62 FR 851, Jan. 6, 1997]



             Subpart B--Bidding, Certifications, and Payment



Sec. 356.10  Offering announcement.

    The Department provides public notice of the sale of bills, notes, 
and bonds by issuing an offering announcement. The offering announcement 
lists the specifics of each offering, e.g., offering amount, term and 
type of security, CUSIP number, and issue and maturity dates. The 
offering announcement and this part, including the Appendices, specify 
the terms and conditions of sale. To the extent that the provisions of 
an offering announcement are inconsistent with the provisions of this 
part, the provisions of the offering announcement will control. 
Accordingly, bidders should read the applicable offering announcement in 
conjunction with this part. (See Exhibit A for sample announcements.)

[58 FR 414, Jan. 5, 1993, as amended at 62 FR 851, Jan. 6, 1997]



Sec. 356.11  Submission of bids.

    (a) General. (1) Bids may be submitted directly to a Federal Reserve 
Bank that is authorized to accept tenders or to the Bureau of the Public 
Debt, Washington, DC, or through a depository institution or dealer that 
is authorized, pursuant to Sec. 356.14, to submit bids on behalf of 
customers. Except as otherwise provided, tenders must be submitted in an 
approved format, including the use of preassigned identification 
numbers, where applicable. Competitive and noncompetitive bids must be 
received prior to the respective closing times specified in the offering 
announcement, except as provided in paragraph (b)(2) of this section. 
Bids not received timely will not be recognized in the auction. Bids for 
securities are binding on the bidder after the closing time specified in 
the offering announcement.
    (2) If the awarded securities are to be issued in TRADES, a 
submitter must have on file at a Federal Reserve Bank a certificate 
listing those persons who are authorized to submit tenders on its 
behalf. The certificate must be duly executed by an authorized person on 
behalf of the submitter. A tender will not be recognized if the person 
submitting the tender is not listed on the certificate. The submitter is 
responsible for any tenders submitted for the submitter by persons who 
are designated on the certificate as authorized to submit tenders on its 
behalf.
    (b) Submission of paper tenders. (1) Paper tenders should be on 
preprinted forms provided by the Federal Reserve

[[Page 358]]

Bank to which the tender is submitted or preprinted forms of the Bureau 
of the Public Debt, and should provide the information requested on the 
form. Paper tenders in any other form or incomplete tenders may be 
accepted or rejected at the option of the Department.
    (2) For competitive bids, if securities are to be delivered to more 
than one account, a separate paper tender must be submitted for each 
delivery instruction specified.
    (3) The submitter is responsible for ensuring that the paper tender 
is received timely at the Federal Reserve Bank or the Bureau of the 
Public Debt, Washington, DC. A noncompetitive bid is considered timely 
if received prior to the deadline for the receipt of noncompetitive 
tenders. Further, a noncompetitive bid received after the deadline for 
the receipt of noncompetitive tenders is considered timely only if it 
was submitted by mail and only if the envelope containing the tender 
bears a U.S. Postal Service cancellation date prior to the auction date 
and the tender is received on or before the issue date.
    (4) Neither the Federal Reserve Bank nor the Department shall be, in 
any way, responsible for any unauthorized paper tender submissions or 
for any delays, errors, or omissions in the submission of paper tenders.
    (c) Submission of tenders by computer. Competitive and 
noncompetitive tenders may be submitted by computer transmission to a 
Federal Reserve Bank. Tenders may be submitted by computer only by those 
submitters that have previously arranged with a Federal Reserve Bank for 
such submission.
    (1) For computer tenders, the submitter must comply with computer 
communications and electronic access standards and requirements for 
Treasury auctions. Incomplete tenders or transmissions that do not 
comply with such standards and requirements may be accepted or rejected 
at the option of the Department.
    (2) All tenders submitted by computer are binding on the submitter 
to the same extent as if they had been paper tenders. No paper tender 
should be submitted that duplicates a tender submitted by computer.
    (3) Tenders submitted by computer must be received by the applicable 
closing time; the Federal Reserve Bank's computer time stamp will 
establish the time of receipt.
    (4) The submitter bears sole risk for any disruption or failure in 
the operation of its own computer, any electronic-based communications 
facilities, or any communications lines between the submitter and the 
Federal Reserve Bank.
    (5) The submitter is responsible for tenders submitted using 
computer equipment on its premises, whether or not such tenders are 
authorized.
    (6) Neither the Federal Reserve Bank nor the Department shall be, in 
any way, responsible for any delays, errors, or omissions in the 
submission of tenders.

[58 FR 414, Jan. 5, 1993, as amended at 59 FR 28774, June 3, 1994; 61 FR 
37010, July 16, 1996; 61 FR 43637, Aug. 23, 1996]



Sec. 356.12  Noncompetitive and competitive bidding.

    (a) General. All bids, including bids for reopenings, must state the 
par amount of securities bid for and must equal or exceed the minimum 
bid amount stated in the offering announcement. Bids that exceed the 
minimum bid amount must be in the multiple stated in the offering 
announcement.
    (b) Noncompetitive. A bidder bidding competitively for its own 
account may not bid noncompetitively for its own account in the same 
auction. A request for reinvestment of securities maturing in TREASURY 
DIRECT is a noncompetitive bid.
    (1) Maximum bid. A bidder may not bid noncompetitively for more than 
$1 million in a bill auction or more than $5 million in a note or bond 
auction. The maximum bid limitation does not apply to bidders who are 
bidding solely through TREASURY DIRECT reinvestment requests.
    (2) Additional restrictions. Between the date of the offering 
announcement and the time of the official announcement by the Department 
of the auction results, a noncompetitive bidder may not hold, at any 
time, a position for its

[[Page 359]]

own account in when-issued trading or in futures or forward contracts in 
the security being auctioned or enter into any agreement to purchase or 
sell or otherwise dispose of the securities it is acquiring in the 
auction. For purposes of this paragraph, futures contracts include 
those:
    (i) That require delivery of the specific security being auctioned;
    (ii) For which the security being auctioned is one of several 
securities that may be delivered; or
    (iii) That are cash-settled.
    (c) Competitive. A bidder bidding noncompetitively for its own 
account may not bid competitively for its own account in the same 
auction.
    (1) Bid format--(i) Treasury bills. For all bills except cash 
management bills, a competitive bid must show the discount rate bid, 
expressed with three decimals in .005 percent increments. The third 
decimal must be either a zero or a five, e.g., 5.320 or 5.325. Fractions 
may not be used. For cash management bills, a competitive bid must show 
the discount rate bid, expressed with two decimals in .01 percent 
increments, e.g., 5.14. Fractions may not be used.
    (ii) Treasury fixed-principal securities. A competitive bid must 
show the yield bid, expressed with three decimals, e.g., 4.170. 
Fractions may not be used.
    (iii) Treasury inflation-indexed securities. A competitive bid must 
show the real yield bid, expressed with three decimals, e.g., 3.070. 
Fractions may not be used.
    (2) Maximum recognized bid. There is no limitation on the maximum 
dollar amount that a bidder may bid for competitively, either at one 
yield or discount rate, or at different yields or discount rates. 
However, a competitive bid by a bidder at a single yield or discount 
rate that exceeds 35% of the public offering amount will be reduced to 
that amount. For example, if the public offering is $10 billion, the 
maximum bid amount that will be recognized at any one yield or discount 
rate from any bidder is $3.5 billion. (See Sec. 356.22 for award 
limitations.)

[58 FR 414, Jan. 5, 1993, as amended at 60 FR 13907, Mar. 15, 1995; 62 
FR 851, Jan. 6, 1997; 62 FR 32033, June 12, 1997; 62 FR 43093, Aug. 12, 
1997; 63 FR 4187, Jan. 28, 1998]



Sec. 356.13  Net long position.

    (a) Reporting net long positions. When bidding competitively, a 
bidder must report the amount of its net long position when the total of 
all of its bids in an auction plus the bidder's net long position in the 
security being auctioned equals or exceeds the net long position 
reporting threshold amount. The net long position reporting threshold 
amount for any particular security will be as stated in the offering 
announcement for that security. (See Sec. 356.10.) That amount will be 
$1 billion for bills, and $2 billion for notes and bonds, unless 
otherwise stated in the offering announcement. If the bidder either has 
no position or has a net short position and the total of all of its bids 
equals or exceeds the net long position reporting threshold amount, 
e.g., $1 billion for bills and $2 billion for notes and bonds, a net 
long position of zero must be reported. In cases where a bidder that is 
required to report the amount of its net long position has more than one 
bid, the bidder's total net long position should be reported in 
connection with only one bid. A bidder that is a customer must report 
its reportable net long position through only one depository institution 
or dealer. (See Sec. 356.14(c).)
    (b) Determination of net long position. (1) The net long position 
must be determined as of the designated reporting time, which is one-
half hour prior to the closing time for receipt of competitive bids. 
Except as modified in (b)(2) in the event of a reopening, a net long 
position includes the par amount of:
    (i) Holdings of outstanding securities with the same CUSIP number as 
the security being auctioned;
    (ii) Holdings of STRIPS principal components of the security being 
auctioned; and
    (iii) Positions, in the security being auctioned, in
    (A) When-issued trading, including when-issued trading positions of 
the STRIPS principal components;
    (B) Futures contracts that require delivery of the specific security 
being auctioned (but not futures contracts for which the security being 
auctioned is one of several securities that may be delivered, and not 
futures contracts that are cash-settled); and

[[Page 360]]

    (C) Forward contracts that require delivery of the specific security 
being auctioned or of the STRIPS principal component of that security.
    (2) In a reopening (i.e., additional issue) of an outstanding 
security, a bidder may subtract the published exclusion amount for that 
security from: its holdings of the outstanding securities (paragraph 
(b)(1)(i) of this section) combined with its holdings of STRIPS 
principal components of the security being auctioned (paragraph 
(b)(1)(ii) of this section). The amount of holdings that may be excluded 
from the net long position calculation will be specified in the Treasury 
offering announcement for that auction. A bidder may not take the 
exclusion if its combined holdings are zero or less than zero. The 
exclusion is optional for bidders. However, if a bidder takes the 
exclusion, it must include any holdings in excess of the exclusion 
amount in calculating its net long position. If the published exclusion 
amount is greater than the bidder's combined holdings (paragraphs 
(b)(1)(i) and (ii) of this section), the combined holdings may be 
calculated as zero, but cannot be included in the calculation as a 
negative number.

[58 FR 414, Jan. 5, 1993, as amended at 62 FR 25115, May 8, 1997; 62 FR 
43093, Aug. 12, 1997; 66 FR 56761, Nov. 13, 2001]



Sec. 356.14  Submitting bids for customers.

    Depository institutions and dealers may submit bids for their own 
account, for their customers, or for customers of intermediaries, 
subject to the requirements set out in paragraphs (a), (b), and (c) of 
this section. Others are permitted to submit bids only for their own 
account.
    (a) Payment. By submitting a bid on behalf of its customer or a 
customer of any intermediary, a submitter agrees to remit payment for 
securities awarded as a result of such bid.
    (b) Customer lists. A customer list must be submitted or be 
available, as provided in paragraphs (b) (1), (2) and (3), whenever bids 
for more than one customer are included on the same tender. The customer 
list must include direct customers of the submitter as well as customers 
of any intermediaries who are forwarding customer bids to the submitter.
    (1) For competitive bids submitted by paper tender, the submitter 
must provide a separate tender for each yield or discount rate at which 
a bid is submitted. As a part of such tender, the submitter must provide 
a list that includes the full name of each customer and the amount bid 
by each customer. For competitive bids submitted by computer, the 
submitter may submit bids at multiple yields or discount rates on the 
same tender. On each such tender, the submitter must submit the full 
name of each customer and the amount bid at each yield or discount rate 
by each customer.
    (2) For noncompetitive bids, a list must be provided that includes 
the full name of each customer and the amount bid by each customer. For 
mailed tenders, the customer list must be submitted with the tender. For 
other than mailed tenders, the customer list should accompany the 
tender. If the customer list is not submitted with the tender, 
information for the list must be complete and available for review by 
the deadline for submission of noncompetitive tenders, and must be 
received by the Federal Reserve Bank to which the tender was submitted 
by close of business on the auction day.
    (3) Bids submitted on behalf of trusts or other fiduciary estates 
must identify on the customer list the full name or title of the trustee 
or fiduciary; a reference to the document creating the trust or 
fiduciary estate with date of execution; and the employer identification 
number of the trust or fiduciary estate.
    (c) Net long position of customers. (1) A submitter or intermediary, 
when submitting or forwarding a competitive bid of $100 million or more 
for its customer, must inform that customer of the customer's net long 
position reporting obligation as described in Sec. 356.13.
    (2) A submitter or intermediary, when submitting or forwarding a 
competitive bid for a customer, must report the net long position amount 
if such amount is provided by the customer.
    (3) If personnel of a submitter or intermediary who are directly 
involved in receiving or forwarding a customer's bid know that the 
position information

[[Page 361]]

provided by a customer is incorrect, the customer's bid shall not be 
submitted or forwarded by the submitter or intermediary.
    (4) If the amount of a customer's net long position is to be 
reported by the submitter by paper tender, a separate tender must be 
submitted for that customer that includes the amount of the net long 
position.



Sec. 356.15  Bidding through investment advisers.

    (a) General. Where bids or positions of a person or entity are 
controlled by an investment adviser, such bids or positions are 
considered to be a controlled account, separate from the bids and 
positions of any person or entity with which they would otherwise be 
associated under the bidder definitions in appendix A of this part. The 
investment adviser may bid for controlled accounts by including, in a 
bid in the adviser's name, amounts that it is investing for the 
controlled accounts. The investment adviser may also bid for controlled 
accounts in the names of such accounts. Where bids are in an investment 
adviser's name, the investment adviser is considered the bidder for such 
bids and, where bids are in the name of a controlled account, the named 
controlled account is considered the bidder, for all purposes of this 
part 356, except as specified in this Sec. 356.15.
    (b) Noncompetitive and competitive bidding. Regardless of whether 
the bid for a controlled account is in the name of the investment 
adviser or in the name of the controlled account, such account may not 
be bid for both noncompetitively and competitively in the same auction. 
In addition, such account is subject to the noncompetitive bidding 
restrictions and award limitations contained in Secs. 356.12(b) and 
356.22(a).
    (c) Reporting net long positions. In calculating the amount of its 
bids and positions for purposes of the net long position reporting 
requirement found in Sec. 356.13(a), the investment adviser must 
include, in addition to what would otherwise be included for the 
investment adviser as a bidder under the bidder definitions, all other 
competitive bids and positions controlled by the investment adviser. The 
investment adviser may exclude any net long position less than $100 
million of any nonproprietary controlled account unless the adviser is 
placing a competitive bid for that account either in the name of the 
investment adviser or in the name of the account. However, if any net 
long position less than $100 million of any nonproprietary account not 
being bid for is excluded, then all net short positions less than $100 
million of nonproprietary accounts not being bid for must also be 
excluded. Regardless of whether the investment adviser bids in its own 
name or in the name of its controlled accounts, if the net long position 
is reportable, it must be reported as a total in connection with only 
one bid in accordance with Sec. 356.13(a).
    (d) Submitting bids for controlled accounts. Notwithstanding the 
definition of submitter found in Sec. 356.2, and the restriction against 
submitting bids for others found in Sec. 356.14, an investment adviser 
may submit bids, whether in the adviser's own name or in the names of 
its controlled accounts, directly to a Federal Reserve Bank or the 
Bureau of the Public Debt, in which case the investment adviser is 
considered a submitter. In the alternative, the investment adviser may 
forward such bids to a depository institution or dealer.
    (e) Certifications. By bidding for a controlled account, an 
investment adviser is deemed to have certified that it is in compliance 
with this part and the offering announcement governing the sale and 
issue of the security. Further, the investment adviser is deemed to have 
certified that the information provided on the tender or provided to a 
submitter or intermediary with regard to bids for controlled accounts is 
accurate and complete.
    (f) Proration of awards. In auctions where bids at the highest 
accepted yield or discount rate are prorated under Sec. 356.20(a)(2) of 
this part, investment advisers that submit bids for controlled accounts 
in the names of such accounts are responsible for prorating awards for 
their controlled accounts at the same percentage as that announced by 
the Department. The same prorating rules apply to controlled accounts as 
apply to submitters. See Sec. 356.21 of this part.

[61 FR 37010, July 16, 1996]

[[Page 362]]



Sec. 356.16  Certifications.

    (a) Submitters. By submitting a tender for a security, a submitter 
is deemed to have certified that it is in compliance with this part and 
the offering announcement governing the sale and issue of the security. 
Further, the submitter is deemed to have certified that the information 
provided on the tender with regard to bids for its own account is 
accurate and complete, and that the information provided on the tender 
with regard to bids for customers accurately and completely reflects 
information provided to it by its customers or intermediaries. Prior to 
submitting a computer tender, a submitter must have on file a written 
certification that the submitter is certifying, each time it submits a 
computer tender, that it is in compliance with this part and the 
applicable offering announcement. The certification must be signed and 
dated by an authorized person on behalf of the submitter, be filed with 
the Federal Reserve Bank to which the computer tender is submitted, and 
be renewed at least annually.
    (b) Intermediaries. By forwarding a bid, an intermediary is deemed 
to have certified that it is in compliance with this part and the 
offering announcement governing the sale and issue of the security. 
Further, the intermediary is deemed to have certified that the 
information provided to a submitter or other intermediary with regard to 
bids for its own account is accurate and complete, and that the 
information provided to a submitter or other intermediary with regard to 
bids for customers accurately and completely reflects information 
provided to it by its customers or intermediaries.
    (c) Customers. By bidding for a security, a customer is deemed to 
have certified that it is in compliance with this part and the offering 
announcement governing the sale and issue of the security and that the 
information it provided to the submitter or intermediary in connection 
with the bid is accurate and complete.

[58 FR 414, Jan. 5, 1993. Redesignated at 61 FR 37010, July 16, 1996]



Sec. 356.17  Responsibility for payment.

    A bidder agrees to pay the settlement amount for any securities 
awarded to it in the auction. (See Sec. 356.25.) In addition, certain 
payments or provisions for payment are required at the time a tender is 
submitted. The specific requirements, outlined in this section, depend 
on whether awarded securities will be delivered in TREASURY DIRECT or 
TRADES.
    (a) TREASURY DIRECT. For securities to be held in TREASURY DIRECT, 
payment of the par amount and announced accrued interest and/or 
inflation adjustment, if any, must be submitted with the tender unless 
other provisions have been made, such as payment by an authorized 
electronic means providing for immediately available funds or by charge 
to the funds account of a depository institution.
    (1) Payment with tender. For bills, payment must be by cash, 
depository institution (cashier's or teller's) check, certified check, 
currently dated Treasury or fiscal agency check made payable to the 
bidder, or definitive Treasury securities maturing on or before the 
issue date of the securities being auctioned, but which are not overdue 
as defined in the general regulations governing United States securities 
(31 CFR 306.25). Also, maturing securities held in TREASURY DIRECT may 
be used as payment for new securities that are being offered, provided 
that the appropriate transaction request is received timely. For notes 
or bonds, payment must be in one of the forms described above for bills, 
or by personal check. Checks submitted to a Federal Reserve Bank must be 
made payable to that Bank and checks submitted to the Bureau of the 
Public Debt must be made payable to the Bureau of the Public Debt.
    (2) Payment by authorized electronic means. Payment may be made by 
electronic means approved by the Department, provided the bidder, or the 
submitter on behalf of the bidder, has met the necessary conditions and 
has satisfactorily completed any required authorizations for such means 
of payment, in accordance with 31 CFR part 370.
    (3) Authorized charge to a funds account. If a depository 
institution or

[[Page 363]]

dealer submits a tender for a TREASURY DIRECT bidder and payment is not 
submitted with the tender or made by an authorized electronic means, an 
authorization from a depository institution to charge the institution's 
funds account at a Federal Reserve Bank must be on file with the Bank to 
which the tender was submitted.
    (b) TRADES. For securities to be held in TRADES, payment of the par 
amount and announced accrued interest and/or inflation adjustment, if 
any, must be submitted with the tender unless other provisions have been 
made, such as payment by an authorized electronic means providing for 
immediately available funds or by charge to the funds account of a 
depository institution.
    (1) Payment with tender. Where payment is submitted with the tender, 
payment must be by one of the means specified under paragraph (a)(1) of 
this section.
    (2) Payment by authorized electronic means. Payment may be made by 
electronic means approved by the Department, provided the bidder, or the 
submitter on behalf of the bidder, has met the necessary conditions, and 
has satisfactorily completed any required authorizations, for such means 
of payment.
    (3) Authorized charge to a funds account. Where payment is not 
submitted with the tender or made by an authorized electronic means, an 
authorization to charge the funds account of a depository institution 
must be provided as follows:
    (i) A depository institution with a funds account submitting tenders 
directly to a Federal Reserve Bank may authorize the Bank to charge its 
funds account upon delivery of the securities.
    (ii) A submitter that chooses not to pay by charge to its funds 
account or a submitter that does not have a funds account must, prior to 
the submission of a tender, have an acknowledged autocharge agreement on 
file at the Federal Reserve Bank to which the tender is submitted. By 
submitting a tender for securities to be paid for under such autocharge 
agreement, the submitter authorizes the Federal Reserve Bank to provide, 
to the depository institution whose funds account will be charged under 
the agreement, notice of the total par amount of, and price to be 
charged for, securities awarded as a result of the submitter's tender.
    (iii) In addition, a submitter that is a member of a clearing 
corporation may instruct that delivery and payment be made through the 
clearing corporation for securities awarded to the submitter for its own 
account, provided that the following requirements are met:
    (A) The submitter must, prior to the submission of a tender for such 
securities, have a delivery and payment agreement with the clearing 
corporation acknowledged by, and on file at, the Federal Reserve Bank to 
which the tender is submitted. By entering into such an agreement, the 
submitter authorizes the Federal Reserve Bank to provide to the clearing 
corporation notice of the par amounts of, prices to be charged for, and 
total payment amounts for, securities awarded to the submitter for its 
own account.
    (B) An autocharge agreement between the clearing corporation and the 
depository institution must, prior to the submission of a tender for 
such securities, be acknowledged by, and on file at, the Federal Reserve 
Bank servicing the depository institution. By entering into such an 
agreement, the clearing corporation authorizes the Federal Reserve Bank 
to which the tender is submitted to provide, to the depository 
institution whose funds account will be charged under the agreement, 
notice of the total aggregate par amount of, prices to be charged for, 
and total payment amounts for, securities to be delivered to the 
clearing corporation's designated account at the depository institution.

[58 FR 414, Jan. 5, 1993, as amended at 59 FR 28774, June 3, 1994. 
Redesignated at 61 FR 37010, July 16, 1996, as amended at 61 FR 54909, 
Oct. 22, 1996; 62 FR 852, Jan. 6, 1997; 62 FR 32032, June 12, 1997]



         Subpart C--Determination of Auction Awards; Settlement



Sec. 356.20  Determination of auction awards.

    (a) Determining the range and amount of accepted competitive bids--
(1) Accepting bids. Determinations of awards in

[[Page 364]]

auctions are made at the Bureau of the Public Debt after the closing 
time for receipt of bids. In determining auction awards, the Bureau of 
the Public Debt first accepts in full all noncompetitive bids received 
by the closing time specified in the offering announcement. Then 
competitive bids are accepted, starting with those at the lowest yields 
or discount rates through successively higher yields or discount rates, 
up to the amount required to meet the public offering. Bids at the 
highest accepted yield or discount rate will be prorated (as described 
in paragraph (a)(2) of this section), if necessary. If the amount of 
noncompetitive bids would absorb most or all of the public offering, 
competitive bids will be accepted in an amount determined by the 
Department to be sufficient to provide a fair determination of the yield 
or discount rate for the securities being auctioned.
    (2) Accepting bids at the high yield or discount rate. When the 
total amount of bids at the highest accepted yield or discount rate 
exceeds the amount of the public offering remaining after acceptance of 
noncompetitive bids and competitive bids at the lower yields or discount 
rates, a percentage of the bids received at the highest accepted yield 
or discount rate will be awarded. This proration is performed for the 
purpose of awarding a par amount of securities close to the public 
offering amount. The percentage is derived by dividing the remaining par 
amount needed to fill the public offering by the par amount of the bids 
recognized at the high yield or rate and rounding up to the next whole 
percentage point.
    (b) Determining the interest rate for new note and bond issues. The 
interest rate established as a result of the auction will be set at a 1/
8 of one percent increment. For single-price auctions, the interest rate 
established produces the price closest to, but not above, par when 
evaluated at the yield awarded to successful competitive bidders. For 
multiple-price auctions, the interest rate established produces the 
price closest to, but not above, par when evaluated at the weighted-
average yield of awards to successful competitive bidders.
    (c) Determining purchase prices for awarded securities. Price 
calculations will be rounded to three decimal places on the basis of 
price per hundred, e.g., 99.954. (See appendix B.)
    (1) Multiple-price auctions--(i) Competitive bids. The price of 
securities awarded to competitive bidders is the price equivalent to 
each yield or discount rate at which their bids were accepted.
    (ii) Noncompetitive bids. The price of securities awarded to 
noncompetitive bidders is the price equivalent to the weighted average 
yield or discount rate of accepted competitive bids.
    (2) Single-price auctions. The price of securities awarded to both 
competitive and noncompetitive bidders is the price equivalent to the 
highest yield or discount rate at which bids were accepted. For 
inflation-indexed securities, the price of such securities will be the 
price equivalent to the highest real yield at which bids were accepted.

[58 FR 414, Jan. 5, 1993, as amended at 62 FR 852, Jan. 6, 1997; 64 FR 
3634, Jan. 25, 1999]



Sec. 356.21  Proration of awards.

    (a) Awards to submitters. In auctions where bids at the highest 
accepted yield or discount rate are prorated under Sec. 356.20(a)(2) of 
this part, the Federal Reserve Banks are responsible for prorating 
awards for submitters at the percentage announced by the Department. For 
example, if 80% is the announced percentage at the highest yield or 
discount rate, then each bid at that rate or yield shall be awarded 80% 
of the amount bid. Hence, a bid for $100,000 at the highest accepted 
yield or discount rate would be awarded $80,000. In all cases, awards 
will be for, at least, the minimum to hold, and awards must be in an 
appropriate multiple to hold. Awards at the highest accepted yield or 
rate are adjusted upwards, if necessary, to an appropriate multiple to 
hold. For example, Treasury bills may be issued with a minimum to hold 
of $1,000 and multiples of $1,000. Where an $18,000 bid is accepted at 
the high discount rate, and the percent awarded at the high discount 
rate is 88%, the award to that bidder will be $16,000, representing an 
upward adjustment from $15,840 ($18,000 x .88) to an appropriate 
multiple to hold. If tenders at the highest accepted discount rate are 
prorated at, for example, a rate of 4%, the award for a $10,000 bid will 
be $1,000, instead of

[[Page 365]]

$400, in order to meet the minimum to hold for a bill issue.
    (b) Awards to customers. In auctions where bids at the highest 
accepted yield or discount rate are prorated under Sec. 356.20(a)(2), 
depository institutions and dealers, whether submitters or 
intermediaries, are responsible for prorating awards for their customers 
at the same percentage as that announced by the Department. For example, 
if 80% is the announced percentage at the highest yield or discount 
rate, then each customer bid at that rate or yield shall be awarded 80%. 
The same prorating rules apply to customers as apply to submitters.

[58 FR 414, Jan. 5, 1993, as amended at 61 FR 37011, July 16, 1996; 64 
FR 3634, Jan. 25, 1999]



Sec. 356.22  Limitation on auction awards.

    (a) Awards to noncompetitive bidders. The maximum award that will be 
made to any bidder is $1 million for bills and $5 million for notes and 
bonds. This does not apply to bidders bidding solely through TREASURY 
DIRECT reinvestment requests.
    (b) Awards to competitive bidders. The maximum award that will be 
made to any bidder is 35% of the public offering less the bidder's net 
long position as reportable under Sec. 356.13. For example, in a note 
auction with a $10 billion public offering, a bidder with a reported net 
long position of $1 billion could receive a maximum auction award of 
$2.5 billion. When the bids and net long positions of more than one 
person or entity must be combined as required by Sec. 356.15(c), such 
combined amount will be used for the purpose of this award limitation.

[58 FR 414, Jan. 5, 1993, as amended at 61 FR 37011, July 16, 1996]



Sec. 356.23  Announcing auction results.

    (a) After the conclusion of the auction, the Department will make an 
official announcement of the auction results through a press release.
    (b) The press release will include such information as:
    (1) The amounts of bids recognized and accepted;
    (2) The range of accepted yields or discount rates;
    (3) The proration percentage;
    (4) The interest rate for a note or bond;
    (5) A breakdown of the amounts of noncompetitive and competitive 
bids recognized and accepted from the public;
    (6) The amounts recognized and accepted from the Federal Reserve 
Banks for their own account and for foreign and international monetary 
authorities;
    (7) The minimum par amount required to strip a note or bond;
    (8) The bid-to-cover ratio; and
    (9) Other information that the Department may decide to include.

[64 FR 3634, Jan. 25, 1999]



Sec. 356.24  Notice of awards; confirmations.

    (a) Notice of awards--(1) Notice to submitters. Notice of awards 
will be provided by a Federal Reserve Bank or the Department to 
submitters of successful competitive bids. Submitters of noncompetitive 
bids will be notified only when the price to be paid by noncompetitive 
bidders is over par or if noncompetitive bids are not accepted in full.
    (2) Notice to clearing corporation. If awarded securities are to be 
delivered pursuant to a delivery and payment agreement, notice of the 
awards also will be provided by a Federal Reserve Bank or the Department 
to the clearing corporation that is a party to such agreement.
    (b) Confirmation of award to customer. A submitter submitting a bid 
for customers is responsible for notifying its customers and 
intermediaries that forwarded bids to it of the awards. Similarly, an 
intermediary is responsible for notifying its customers and any 
intermediaries that forwarded bids to it of the awards.
    (c) Confirmation of award and settlement amount to a depository 
institution having an autocharge agreement with a submitter or a 
clearing corporation. Not later than the day after each auction, the 
appropriate Federal Reserve Bank will notify each depository institution 
that has entered into an autocharge agreement with either a submitter or 
a clearing corporation as to the amount to be charged to the 
institution's funds

[[Page 366]]

account at the Federal Reserve Bank on the issue date.
    (d) Customer confirmation. Any customer awarded a par amount of $500 
million or more in an auction must furnish a confirmation including the 
information in paragraphs (d) (1) and (2) of this section to the Federal 
Reserve Bank to which the bid was submitted, no later than 10:00 a.m. on 
the day following the auction. The confirmation must be signed by the 
customer or authorized representative and must include the capacity in 
which such representative is acting. A submitter or intermediary 
submitting or forwarding a customer bid is responsible for notifying its 
customer of this requirement if the customer is awarded a par amount of 
$500 million or more as a result of bids submitted by the submitter or 
forwarded by the intermediary.
    (1) A written confirmation of its bid, and
    (2) A written statement indicating whether it had a reportable net 
long position as defined in Sec. 356.13, and, if a position had to be 
reported, the amount of any such position and the name of the depository 
institution or dealer through which the customer requested that the 
position be reported.

[58 FR 414, Jan. 5, 1993, as amended at 59 FR 28775, June 3, 1994]



Sec. 356.25  Payment for awarded securities.

    Payment for securities is to be accomplished by the issue date. 
Payment will be accomplished as follows:
    (a) Payment with tender. When payment is made with the tender as 
provided for in Sec. 356.17 (a)(1) and (b)(1), settlement is 
accomplished as follows:
    (1) When an amount is due the submitter. When the payment previously 
remitted by the submitter exceeds the settlement amount, the balance 
will be refunded to the submitter following the auction.
    (2) When the submitter must remit an additional amount. When the 
settlement amount exceeds the payment previously remitted by the 
submitter, the submitter will be notified of the additional amount due 
and is responsible for remitting it immediately. Such additional amount 
may be due if the auction calculations result in a premium or if accrued 
interest and/or inflation adjustment is due.
    (b) Payment by authorized electronic means. Where the method of 
payment is by an authorized electronic means as provided for in 
Sec. 356.17 (a)(2) or (b)(2), the settlement amount will be charged to 
the specified account on the issue date.
    (c) Payment by authorized charge to a funds account. Where the 
submitter's method of payment is an authorized charge to the funds 
account of a depository institution as provided for in Sec. 356.17 
(a)(3) or (b)(3), the settlement amount will be charged to the specified 
funds account on the issue date.
    (d) Amount of payment for awarded securities. The payment amount for 
awarded securities will be the settlement amount as defined in 
Sec. 356.2. (See formulas in appendix B.)

[58 FR 414, Jan. 5, 1993, as amended at 61 FR 54910, Oct. 22, 1996; 62 
FR 852, Jan. 6, 1997]



                   Subpart D--Miscellaneous Provisions



Sec. 356.30  Payment of principal and interest on notes and bonds.

    (a) General. Principal on notes and bonds will be paid on the 
maturity date as specified in the offering announcement unless the 
security is called pursuant to its terms and in accordance with 
appropriate public notice. Interest on notes and bonds accrues from the 
dated date. Interest is payable on a semiannual basis on the interest 
payment dates specified in the offering announcement through the date 
that the principal becomes payable. In the event any principal or 
interest payment date is not a business day, the amount is payable 
(without additional interest) on the next business day.
    (b) Treasury inflation-indexed securities. At maturity, the 
inflation-adjusted principal will be paid, unless the inflation-adjusted 
principal is less than the par amount of the security, in which case an 
additional amount will be paid at maturity so that the additional amount 
plus the inflation-adjusted principal equals the par amount. If a 
security has been stripped, any such additional amount will be paid at 
maturity to holders of principal components only. Regardless of whether 
or

[[Page 367]]

not an additional amount is paid, the final interest payment will be 
based on the inflation-adjusted principal at maturity.

[58 FR 414, Jan. 5, 1993, as amended at 62 FR 852, Jan. 6, 1997]



Sec. 356.31  STRIPS.

    (a) General. A note or bond may be designated in the offering 
announcement, or later by announcement by Treasury, as eligible for the 
STRIPS program. At the option of the holder, and generally at any time 
from its issue date until its call or maturity, any such security may be 
``stripped,'' i.e., divided into separate principal and interest 
components. A short or long first interest payment and all interest 
payments within a callable period are not eligible to be stripped from 
the principal component. The CUSIP numbers and payment dates for the 
principal and interest components are provided in the offering 
announcement if not previously announced.
    (b) Treasury fixed-principal securities--(1) Minimum par amounts 
required for STRIPS. The minimum par amount of a fixed-principal 
security that may be stripped into the components described in paragraph 
(a) of this section is $1,000. Any par amount to be stripped above 
$1,000 must be in a multiple of $1,000.
    (2) Principal components. Principal components stripped from fixed-
principal securities are maintained in accounts, and transferred, at 
their par amount. The principal components have a CUSIP number that is 
different from the CUSIP number of the fully-constituted (unstripped) 
security.
    (3) Interest components. Interest components stripped from fixed-
principal securities are maintained in accounts, and transferred, at 
their original payment value, which is derived by applying the 
semiannual interest rate to the par amount. When an interest component 
is created, the interest payment date becomes the maturity date for the 
component. All such components with the same maturity date have the same 
CUSIP number, regardless of the underlying security from which the 
interest payments were stripped. All interest components have CUSIP 
numbers that are different from the CUSIP number of any fully-
constituted security and any principal component.
    (c) Treasury inflation-indexed securities--(1) Minimum par amounts 
required for STRIPS. The minimum par amount of an inflation-indexed 
security that may be stripped into the components described in paragraph 
(a) of this section is $1,000. Any par amount to be stripped above 
$1,000 must be in a multiple of $1,000.
    (2) Principal components. Principal components stripped from 
inflation-indexed securities are maintained in accounts, and 
transferred, at their par amount. At maturity, the holder will receive 
the inflation-adjusted principal value or the par amount, whichever is 
greater. (See Sec. 356.30.) The principal components have a CUSIP number 
that is different from the CUSIP number of the fully-constituted 
(unstripped) security.
    (3) Interest components. Interest components stripped from 
inflation-indexed securities are maintained in accounts, and 
transferred, at their adjusted value, which is derived by multiplying 
the semiannual interest rate by the par amount and then multiplying this 
value by 100 divided by the Reference CPI of the original issue date (or 
dated date, when the dated date is different from the original issue 
date). See Appendix B, Section IV to this part, for an example of how to 
calculate an adjusted value. The payment value of any interest component 
created prior to March 31, 1999, will be converted to its adjusted 
value. When an interest component is created, the interest payment date 
becomes the maturity date for the component. All such components with 
the same maturity date have the same CUSIP number, regardless of the 
underlying security from which the interest payments were stripped. The 
CUSIP number of any interest component created prior to March 31, 1999, 
will be converted to the fungible CUSIP number for the same maturity 
date. All interest components have CUSIP numbers that are different from 
the CUSIP number of any fully-constituted security and any principal 
component. At maturity, the payment to the holder will be derived by 
multiplying the adjusted value of the interest component by the 
Reference CPI of

[[Page 368]]

the maturity date, divided by 100. See Appendix B, Section IV to this 
part, for an example of how to calculate an actual payment amount from 
an adjusted value.
    (4) Rebasing of the CPI. In the event that the CPI is rebased, the 
adjusted values of all outstanding inflation-indexed interest components 
will be converted to adjusted values based on the new base reference 
period. At such time, Treasury will publish information specifying the 
manner in which this conversion will be accomplished. Subsequent to 
rebasing, any TINTS created from a security that was issued during a 
prior base reference period will be issued with adjusted values 
calculated using reference CPIs under the most-recent base reference 
period.
    (d) Reconstituting a security. Stripped interest and principal 
components may be reconstituted, i.e., restored to their fully-
constituted form. A principal component and all related unmatured 
interest components, in the appropriate minimum or multiple amounts or 
adjusted values, must be submitted together for reconstitution. Interest 
components stripped from inflation-indexed securities are different from 
interest components stripped from fixed-principal securities and, 
accordingly, are not interchangeable for reconstitution purposes.
    (e) Applicable regulations. Unless otherwise provided in this part, 
notes and bonds stripped into their STRIPS components are governed by 
subparts A, B, and D of part 357 of this chapter.

[63 FR 35783, June 30, 1998, as amended at 65 FR 66175, Nov. 3, 2000; 65 
FR 66175, Nov. 3, 2000]



Sec. 356.32  Taxation.

    (a) General. Securities issued under this part are subject to all 
applicable taxes imposed under the Internal Revenue Code of 1986, or 
successor. Under section 3124 of title 31, United States Code, the 
securities are exempt from taxation by a State or political subdivision 
of a State, except for State estate or inheritance taxes and other 
exceptions as provided in that section.
    (b) Treasury inflation-indexed securities. Special federal income 
tax rules for inflation-indexed securities, and principal and interest 
components stripped from such securities, are set forth in Internal 
Revenue Service regulations.

[62 FR 853, Jan. 6, 1997]



Sec. 356.33  Reservation of rights.

    The Secretary reserves the right to accept or reject or refuse to 
recognize any or all bids or tenders submitted under this part. The 
Secretary also reserves the right to award more or less securities than 
the amount of securities specified in the offering announcement. The 
Secretary further reserves the right to waive any provision or 
provisions of this part for any or all bidders or submitters. Decisions 
of the Secretary under this section shall be final.



Sec. 356.34  Remedies.

    (a) General. When a person or an entity fails to comply with the 
requirements of this part, the Secretary will consider the circumstances 
of such failure and determine an appropriate remedy. Such remedy may 
include prohibiting the person or entity from participating in future 
auctions for its own account, for the account of others, or both. The 
Secretary may refer such occurrences to the appropriate regulatory 
agency for enforcement action.
    (b) Liquidated damages. A bidder agrees to pay liquidated damages of 
1% of the par amount of securities awarded the bidder in an auction if 
the bidder fails to pay for the awarded securities in a timely manner. 
The Secretary may waive, in whole or in part, the payment of liquidated 
damages. This liquidated damages provision shall not preclude the use of 
any other available remedy.



Sec. 356.35  Reservations as to terms of offerings.

    The Secretary reserves the right to supplement or amend provisions 
of this part. The Secretary further reserves the right to modify the 
terms and conditions of new securities and to depart from the customary 
pattern of securities offerings at any time. Public notice of any such 
changes will be provided.

[[Page 369]]



Sec. 356.36  Paperwork Reduction Act approval.

    The collections of information contained in Secs. 356.11, 356.12, 
356.13, 356.14, and 356.15 and in appendix A of this part have been 
approved by the Office of Management and Budget under control number 
1535-0112.

[61 FR 37011, July 16, 1996]

               Appendix A to Part 356--Bidder Definitions

    For the purpose of this part, the definitions set forth in this 
appendix describe all of the categories of bidders eligible to bid in 
Treasury auctions. These definitions are to be used by persons and 
entities in determining whether they are considered one bidder or more 
than one bidder for the purpose of bidding in auctions and for the 
purpose of complying with the requirements of this part. Notwithstanding 
these definitions, any persons or entities that intentionally act 
together with respect to bidding in a Treasury auction are considered, 
collectively, to be one bidder.
    The following definitions will be used by the Department in applying 
competitive and noncompetitive award limitations and related 
requirements, as described in this part.
    (a) Corporation--A corporation and all affiliates, whether persons, 
partnerships, or other entities, hereinafter referred to as a corporate 
structure, are considered, collectively, to be one bidder.
    An affiliate is any: entity that is more than 50% owned, directly or 
indirectly, by the corporation; entity that is more than 50% owned, 
directly or indirectly, by any other affiliate of the corporation; 
person or entity that owns, directly or indirectly, more than 50% of the 
corporation; person or entity that owns, directly or indirectly, more 
than 50% of any other affiliate of the corporation; or entity, a 
majority of whose board of directors or a majority of whose general 
partners are directors or officers of the corporation or of any 
affiliate of the corporation.
    For the purpose of this part, a business trust, such as a 
Massachusetts business trust or a Delaware business trust, is considered 
to be a corporation.
    Under certain circumstances, one or more major organizational 
components (e.g., the parent or a subsidiary) in a corporate structure, 
either separately or together with one or more other organizational 
components in the corporate structure, may be recognized as a bidder 
separate from the larger corporate structure. All of the following 
criteria must be met for such component or components to qualify for 
recognition as a separate bidder:
    (1) Such component or components must be prohibited by law or 
regulation from exchanging, or must have established written internal 
procedures (i.e., Chinese walls) designed to prevent the exchange of, 
information related to bidding in Treasury auctions with any other 
component in the corporate structure;
    (2) Such component or components must not be created for the purpose 
of circumventing the Department's bidding and award limitations;
    (3) Decisions related to purchasing Treasury securities at auction 
and participation in specific auctions must be made by employees of such 
component or components. Employees of such component or components that 
make decisions to purchase or dispose of Treasury securities must not 
perform the same function for other components within the corporate 
structure; and
    (4) The records of such component or components related to the 
bidding for, acquisition of, and disposition of Treasury securities must 
be maintained by such component or components. Those records must be 
identifiable--separate and apart from similar records for other 
components within the corporate structure.
    To obtain recognition as a separate bidder, each component or group 
of components must request such recognition from the Department, provide 
a description of the component or group and its position within the 
corporate structure, and provide the following certification:

    [Name of the bidder] hereby certifies that to the best of its 
knowledge and belief it meets the criteria for a separate bidder as 
described in appendix A to 31 CFR part 356. The above-named bidder also 
certifies that it has established written policies or procedures, 
including ongoing compliance monitoring processes, that are designed to 
prevent the component or group of components from:
    (1) Exchanging any of the following information with any other part 
of the corporate structure: (a) Yields or rates at which it plans to 
bid; (b) amounts of securities for which it plans to bid; (c) positions 
that it holds or plans to acquire in a security being auctioned; and (d) 
investment strategies that it plans to follow regarding the security 
being auctioned, or
    (2) In any way intentionally acting together with any other part of 
the corporate structure with respect to formulating or entering bids in 
a Treasury auction.
    The above-named bidder agrees that it will promptly notify the 
Department in writing when any of the information provided to obtain 
separate bidder status changes or when this certification is no longer 
valid.

    (b) Partnership--A partnership for which the Internal Revenue 
Service has assigned a

[[Page 370]]

tax-identification number; general partners acting on behalf of the 
partnership; and all affiliates, whether persons, corporations, or other 
entities; hereinafter referred to as a partnership structure, are 
considered, collectively, to be one bidder. A partnership structure that 
contains one or more corporations is considered one bidder under either 
this ``partnership'' category or the ``corporation'' category, but not 
both.
    An affiliate is any: Entity that is more than 50% owned, directly or 
indirectly, by the partnership; entity that is more than 50% owned, 
directly or indirectly, by any other affiliate of the partnership; 
person or entity that owns, directly or indirectly, more than 50% of the 
partnership; person or entity that owns, directly or indirectly, more 
than 50% of any other affiliate of the partnership; or entity, a 
majority of whose general partners or a majority of whose board of 
directors are general partners or directors of the partnership or of any 
affiliate of the partnership.
    Under certain circumstances, one or more major organizational 
components (e.g., the partnership or a subsidiary) in a partnership 
structure, either separately or together with one or more other 
organizational components in the partnership structure, may be 
recognized as a bidder separate from the larger partnership structure. 
All of the following criteria must be met for such component or 
components to qualify for recognition as a separate bidder:
    (1) Such component or components must be prohibited by law or 
regulation from exchanging, or must have established written internal 
procedures (i.e., Chinese walls) designed to prevent the exchange of, 
information related to bidding in Treasury auctions with any other 
component in the partnership structure;
    (2) Such component or components must not be created for the purpose 
of circumventing the Department's bidding and award limitations;
    (3) Decisions related to purchasing Treasury securities at auction 
and participation in specific auctions must be made by employees of such 
component or components. Employees of such component or components that 
make decisions to purchase or dispose of Treasury securities must not 
perform the same function for other components within the partnership 
structure; and
    (4) The records of such component or components related to the 
bidding for, acquisition of, and disposition of Treasury securities must 
be maintained by such component or components. Those records must be 
identifiable--separate and apart from similar records for other 
components within the partnership structure.
    To obtain recognition as a separate bidder, each component or group 
of components must request such recognition from the Department, provide 
a description of the component or group and its position within the 
partnership structure, and provide the following certification:

    [Name of the bidder] hereby certifies that to the best of its 
knowledge and belief it meets the criteria for a separate bidder as 
described in appendix A to 31 CFR part 356. The above-named bidder also 
certifies that it has established written policies or procedures, 
including ongoing compliance monitoring processes, that are designed to 
prevent the component or group of components from:
    (1) Exchanging any of the following information with any other part 
of the partnership structure: (a) Yields or rates at which it plans to 
bid; (b) amounts of securities for which it plans to bid; (c) positions 
that it holds or plans to acquire in a security being auctioned; and (d) 
investment strategies that it plans to follow regarding the security 
being auctioned, or
    (2) In any way intentionally acting together with any other part of 
the partnership structure with respect to formulating or entering bids 
in a Treasury auction.
    The above-named bidder agrees that it will promptly notify the 
Department in writing when any of the information provided to obtain 
separate bidder status changes or when this certification is no longer 
valid.

    (c) Government-related entity--(1) The government of each of the 50 
states and of the District of Columbia is considered to be one bidder.
    (2) A unit of local government, including any county, city, 
municipality, or township, or other unit of general government, as 
defined by the Bureau of the Census for statistical purposes, is 
considered to be one bidder.
    (3) The government of a commonwealth, territory, or possession of 
the United States is considered to be one bidder.
    (4) A governmental entity, body, or corporation established under 
Federal, State, or local law is considered to be one bidder.
    (5) A foreign central bank, the government of a foreign state, or an 
international organization in which the United States holds membership 
is considered to be one bidder.
    An investment, reserve, or other fund of one of the above 
government-related entities, not otherwise meeting the definition of the 
``trust or other fiduciary estate'' category, is considered part of that 
entity and not a separate bidder unless applicable law requires that the 
investments of such fund be made separately.
    (d) Trust or other fiduciary estate-- A legal entity created under a 
valid trust instrument, court order, or other legal authority that 
designates a trustee or fiduciary to act for the benefit of a named 
beneficiary may be considered a bidder. To be considered a bidder, such 
legal entity must be able to be

[[Page 371]]

identified by the name or title of the trustee or fiduciary; specific 
reference to the trust instrument, court order, or legal authority under 
which the trustee or fiduciary is acting; and the unique IRS-assigned 
employer identification number (not social security number) for the 
entity. Further, it must be the trustee or fiduciary who makes the 
decisions related to participation in auctions on behalf of the trust or 
fiduciary estate.
    (e) Individual-- A person, whether acting in his or her individual 
capacity, as a sole proprietor, for any entity not otherwise defined as 
a bidder, or in more than one such capacity, is considered to be one 
bidder. When a person meets the definition of an affiliate within a 
corporate or partnership structure as defined above, such person may 
only be considered a bidder in this ``individual'' category when the 
bidder of which they are a part is not bidding in the same auction. A 
person acting in an official capacity as an employee or other 
representative of a bidder defined in any other category is not 
considered an ``individual'' bidder when acting in such capacity. A 
person, his or her spouse, and any children under the age of 21 having a 
common household are considered, collectively, to be one ``individual'' 
bidder.
    (f) Other bidder-- A bidder defined by any of the above categories 
is not considered a bidder in this category. A bidder not defined by any 
of the above categories may possibly be considered a bidder in this 
category. For purposes of this definition, ``other bidder'' means an 
institution or organization with a unique IRS-assigned employer 
identification number. This definition of other bidder includes such 
entities as an association, church, university, union, or club. This 
category does not include any person or entity acting in a fiduciary or 
investment management capacity, a sole proprietorship, an investment 
account, an investment fund, a form of registration, or investment 
ownership designation.
    Notwithstanding the definitions in this appendix, it is the intent 
of the Department that no auction participant receive a larger auction 
award by acquiring securities through others than it could have received 
had it been considered a bidder under these definitions.

[58 FR 414, Jan. 5, 1993, as amended at 61 FR 37011, July 16, 1996]

               Appendix B to Part 356--Formulas and Tables

    I. Computation of Interest on Treasury Bonds and Notes.
    II. Formulas for Conversion of Fixed-Principal Security Yields to 
Equivalent Prices.
    III. Formulas for Conversion of Inflation-Indexed Security Yields to 
Equivalent Prices.
    IV. Computation of Adjusted Values and Payment Amounts for Stripped 
Inflation-Indexed Interest Components.
    V. Computation of Purchase Price, Discount Rate, and Investment Rate 
(Coupon-Equivalent Yield) for Treasury Bills.
    The numbers in this appendix are examples given for illustrative 
purposes only and are in no way a prediction of interest rates on any 
bills, notes, or bonds issued under this part.
    In some of the following examples, intermediate rounding is used to 
allow the reader to follow the calculations. In actual practice, the 
Department generally does not round prior to determining the final 
result.

         I. Computation of Interest on Treasury Bonds and Notes

                 A. Treasury Fixed-Principal Securities

                   1. Regular Half-Year Payment Period

    Interest on marketable fixed-principal securities is payable on a 
semiannual basis. The regular interest payment period is a full half-
year of six calendar months. Examples of half-year periods are: (1) 
February 15 to August 15, (2) May 31 to November 30, and (3) February 29 
to August 31 (in a leap year). Calculation of an interest payment for a 
fixed-principal security with a par amount of $1,000 and an interest 
rate of 8% is made in this manner:
    ($1,000 x .08)/2 = $40. Specifically, a semiannual interest payment 
represents one-half of one year's interest, and is computed on this 
basis regardless of the actual number of days in the half-year.

                        2. Daily Interest Decimal

    In cases where an interest payment period for a fixed-principal 
security is shorter or longer than six months or where accrued interest 
is payable by an investor, a daily interest decimal, based on the actual 
number of days in the half-year or half-years involved, must be 
computed. The number of days in any half-year period is shown in Table 
1.

[[Page 372]]



                                                     Table 1
----------------------------------------------------------------------------------------------------------------
                                      Beginning and ending days are 1st or    Beginning and ending days are the
                                         15th of the months listed under    last days of the months listed under
           Interest period              interest period (number of days)      interest period (number of days)
                                     ---------------------------------------------------------------------------
                                         Regular year        Leap year         Regular year        Leap year
----------------------------------------------------------------------------------------------------------------
January to July.....................                181                182                181                182
February to August..................                181                182                184                184
March to September..................                184                184                183                183
April to October....................                183                183                184                184
May to November.....................                184                184                183                183
June to December....................                183                183                184                184
July to January.....................                184                184                184                184
August to February..................                184                184                181                182
September to March..................                181                182                182                183
October to April....................                182                183                181                182
November to May.....................                181                182                182                183
December to June....................                182                183                181                182
----------------------------------------------------------------------------------------------------------------
Table 2 below sets forth the daily interest decimals covering interest from \1/8\% to 20% on $1,000 for one day
  in increments of \1/8\ of one percent. These decimals represent \1/181\, \1/182\, \1/183\, or \1/184\ of a
  full semiannual interest payment, depending on which half-year is applicable.


  Table 2--Decimal for One Day's Interest on $1,000 at Various Rates of Interest, Payable Semiannually or on a
Semiannual Basis, in Regular Years of 365 Days and in Years of 366 Days (To Determine Applicable Number of Days,
                                                  See Table 1)
----------------------------------------------------------------------------------------------------------------
                                                   Half-year of    Half-year of    Half-year of    Half-year of
            Rate per annum (percent)                 184 days        183 days        182 days        181 days
----------------------------------------------------------------------------------------------------------------
\1/8\...........................................     0.003396739     0.003415301     0.003434066     0.003453039
\1/4\...........................................     0.006793478     0.006830601     0.006868132     0.006906077
\3/8\...........................................     0.010190217     0.010245902     0.010302198     0.010359116
\1/2\...........................................     0.013586957     0.013661202     0.013736264     0.013812155
\5/8\...........................................     0.016983696     0.017076503     0.017170330     0.017265193
\3/4\...........................................     0.020380435     0.020491803     0.020604396     0.020718232
\7/8\...........................................     0.023777174     0.023907104     0.024038462     0.024171271
1...............................................     0.027173913     0.027322404     0.027472527     0.027624309
1\1/8\..........................................     0.030570652     0.030737705     0.030906593     0.031077348
1\1/4\..........................................     0.033967391     0.034153005     0.034340659     0.034530387
1\3/8\..........................................     0.037364130     0.037568306     0.037774725     0.037983425
1\1/2\..........................................     0.040760870     0.040983607     0.041208791     0.041436464
1\5/8\..........................................     0.044157609     0.044398907     0.044642857     0.044889503
1\3/4\..........................................     0.047554348     0.047814208     0.048076923     0.048342541
1\7/8\..........................................     0.050951087     0.051229508     0.051510989     0.051795580
2...............................................     0.054347826     0.054644809     0.054945055     0.055248619
2\1/8\..........................................     0.057744565     0.058060109     0.058379121     0.058701657
2\1/4\..........................................     0.061141304     0.061475410     0.061813187     0.062154696
2\3/8\..........................................     0.064538043     0.064890710     0.065247253     0.065607735
2\1/2\..........................................     0.067934783     0.068306011     0.068681319     0.069060773
2\5/8\..........................................     0.071331522     0.071721311     0.072115385     0.072513812
2\3/4\..........................................     0.074728261     0.075136612     0.075549451     0.075966851
2\7/8\..........................................     0.078125000     0.078551913     0.078983516     0.079419890
3...............................................     0.081521739     0.081967213     0.082417582     0.082872928
3\1/8\..........................................     0.084918478     0.085382514     0.085851648     0.086325967
3\1/4\..........................................     0.088315217     0.088797814     0.089285714     0.089779006
3\3/8\..........................................     0.091711957     0.092213115     0.092719780     0.093232044
3\1/2\..........................................     0.095108696     0.095628415     0.096153846     0.096685083
3\5/8\..........................................     0.098505435     0.099043716     0.099587912     0.100138122
3\3/4\..........................................     0.101902174     0.102459016     0.103021978     0.103591160
3\7/8\..........................................     0.105298913     0.105874317     0.106456044     0.107044199
4...............................................     0.108695652     0.109289617     0.109890110     0.110497238
4\1/8\..........................................     0.112092391     0.112704918     0.113324176     0.113950276
4\1/4\..........................................     0.115489130     0.116120219     0.116758242     0.117403315
4\3/8\..........................................     0.118885870     0.119535519     0.120192308     0.120856354
4\1/2\..........................................     0.122282609     0.122950820     0.123626374     0.124309392
4\5/8\..........................................     0.125679348     0.126366120     0.127060440     0.127762431
4\3/4\..........................................     0.129076087     0.129781421     0.130494505     0.131215470
4\7/8\..........................................     0.132472826     0.133196721     0.133928571     0.134668508
5...............................................     0.135869565     0.136612022     0.137362637     0.138121547
5\1/8\..........................................     0.139266304     0.140027322     0.140796703     0.141574586
5\1/4\..........................................     0.142663043     0.143442623     0.144230769     0.145027624
5\3/8\..........................................     0.146059783     0.146857923     0.147664835     0.148480663
5\1/2\..........................................     0.149456522     0.150273224     0.151098901     0.151933702
5\5/8\..........................................     0.152853261     0.153688525     0.154532967     0.155386740

[[Page 373]]

 
5\3/4\..........................................     0.156250000     0.157103825     0.157967033     0.158839779
5\7/8\..........................................     0.159646739     0.160519126     0.161401099     0.162292818
6...............................................     0.163043478     0.163934426     0.164835165     0.165745856
6\1/8\..........................................     0.166440217     0.167349727     0.168269231     0.169198895
6\1/4\..........................................     0.169836957     0.170765027     0.171703297     0.172651934
6\3/8\..........................................     0.173233696     0.174180328     0.175137363     0.176104972
6\1/2\..........................................     0.176630435     0.177595628     0.178571429     0.179558011
6\5/8\..........................................     0.180027174     0.181010929     0.182005495     0.183011050
6\3/4\..........................................     0.183423913     0.184426230     0.185439560     0.186464088
6\7/8\..........................................     0.186820652     0.187841530     0.188873626     0.189917127
7...............................................     0.190217391     0.191256831     0.192307692     0.193370166
7\1/8\..........................................     0.193614130     0.194672131     0.195741758     0.196823204
7\1/4\..........................................     0.197010870     0.198087432     0.199175824     0.200276243
7\3/8\..........................................     0.200407609     0.201502732     0.202609890     0.203729282
7\1/2\..........................................     0.203804348     0.204918033     0.206043956     0.207182320
7\5/8\..........................................     0.207201087     0.208333333     0.209478022     0.210635359
7\3/4\..........................................     0.210597826     0.211748634     0.212912088     0.214088398
7\7/8\..........................................     0.213994565     0.215163934     0.216346154     0.217541436
8...............................................     0.217391304     0.218579235     0.219780220     0.220994475
8\1/8\..........................................     0.220788043     0.221994536     0.223214286     0.224447514
8\1/4\..........................................     0.224184783     0.225409836     0.226648352     0.227900552
8\3/8\..........................................     0.227581522     0.228825137     0.230082418     0.231353591
8\1/2\..........................................     0.230978261     0.232240437     0.233516484     0.234806630
8\5/8\..........................................     0.234375000     0.235655738     0.236950549     0.238259669
8\3/4\..........................................     0.237771739     0.239071038     0.240384615     0.241712707
8\7/8\..........................................     0.241168478     0.242486339     0.243818681     0.245165746
9...............................................     0.244565217     0.245901639     0.247252747     0.248618785
9\1/8\..........................................     0.247961957     0.249316940     0.250686813     0.252071823
9\1/4\..........................................     0.251358696     0.252732240     0.254120879     0.255524862
9\3/8\..........................................     0.254755435     0.256147541     0.257554945     0.258977901
9\1/2\..........................................     0.258152174     0.259562842     0.260989011     0.262430939
9\5/8\..........................................     0.261548913     0.262978142     0.264423077     0.265883978
9\3/4\..........................................     0.264945652     0.266393443     0.267857143     0.269337017
9\7/8\..........................................     0.268342391     0.269808743     0.271291209     0.272790055
10..............................................     0.271739130     0.273224044     0.274725275     0.276243094
10\1/8\.........................................     0.275135870     0.276639344     0.278159341     0.279696133
10\1/4\.........................................     0.278532609     0.280054645     0.281593407     0.283149171
10\3/8\.........................................     0.281929348     0.283469945     0.285027473     0.286602210
10\1/2\.........................................     0.285326087     0.286885246     0.288461538     0.290055249
10\5/8\.........................................     0.288722826     0.290300546     0.291895604     0.293508287
10\3/4\.........................................     0.292119565     0.293715847     0.295329670     0.296961326
10\7/8\.........................................     0.295516304     0.297131148     0.298763736     0.300414365
11..............................................     0.298913043     0.300546448     0.302197802     0.303867403
11\1/8\.........................................     0.302309783     0.303961749     0.305631868     0.307320442
11\1/4\.........................................     0.305706522     0.307377049     0.309065934     0.310773481
11\3/8\.........................................     0.309103261     0.310792350     0.312500000     0.314226519
11\1/2\.........................................     0.312500000     0.314207650     0.315934066     0.317679558
11\5/8\.........................................     0.315896739     0.317622951     0.319368132     0.321132597
11\3/4\.........................................     0.319293478     0.321038251     0.322802198     0.324585635
11\7/8\.........................................     0.322690217     0.324453552     0.326236264     0.328038674
12..............................................     0.326086957     0.327868852     0.329670330     0.331491713
12\1/8\.........................................     0.329483696     0.331284153     0.333104396     0.334944751
12\1/4\.........................................     0.332880435     0.334699454     0.336538462     0.338397790
12\3/8\.........................................     0.336277174     0.338114754     0.339972527     0.341850829
12\1/2\.........................................     0.339673913     0.341530055     0.343406593     0.345303867
12\5/8\.........................................     0.343070652     0.344945355     0.346840659     0.348756906
12\3/4\.........................................     0.346467391     0.348360656     0.350274725     0.352209945
12\7/8\.........................................     0.349864130     0.351775956     0.353708791     0.355662983
13..............................................     0.353260870     0.355191257     0.357142857     0.359116022
13\1/8\.........................................     0.356657609     0.358606557     0.360576923     0.362569061
13\1/4\.........................................     0.360054348     0.362021858     0.364010989     0.366022099
13\3/8\.........................................     0.363451087     0.365437158     0.367445055     0.369475138
13\1/2\.........................................     0.366847826     0.368852459     0.370879121     0.372928177
13\5/8\.........................................     0.370244565     0.372267760     0.374313187     0.376381215
13\3/4\.........................................     0.373641304     0.375683060     0.377747253     0.379834254
13\7/8\.........................................     0.377038043     0.379098361     0.381181319     0.383287293
14..............................................     0.380434783     0.382513661     0.384615385     0.386740331
14\1/8\.........................................     0.383831522     0.385928962     0.388049451     0.390193370
14\1/4\.........................................     0.387228261     0.389344262     0.391483516     0.393646409

[[Page 374]]

 
14\3/8\.........................................     0.390625000     0.392759563     0.394917582     0.397099448
14\1/2\.........................................     0.394021739     0.396174863     0.398351648     0.400552486
14\5/8\.........................................     0.397418478     0.399590164     0.401785714     0.404005525
14\3/4\.........................................     0.400815217     0.403005464     0.405219780     0.407458564
14\7/8\.........................................     0.404211957     0.406420765     0.408653846     0.410911602
15..............................................     0.407608696     0.409836066     0.412087912     0.414364641
15\1/8\.........................................     0.411005435     0.413251366     0.415521978     0.417817680
15\1/4\.........................................     0.414402174     0.416666667     0.418956044     0.421270718
15\3/8\.........................................     0.417798913     0.420081967     0.422390110     0.424723757
15\1/2\.........................................     0.421195652     0.423497268     0.425824176     0.428176796
15\5/8\.........................................     0.424592391     0.426912568     0.429258242     0.431629834
15\3/4\.........................................     0.427989130     0.430327869     0.432692308     0.435082873
15\7/8\.........................................     0.431385870     0.433743169     0.436126374     0.438535912
16..............................................     0.434782609     0.437158470     0.439560440     0.441988950
16\1/8\.........................................     0.438179348     0.440573770     0.442994505     0.445441989
16\1/4\.........................................     0.441576087     0.443989071     0.446428571     0.448895028
16\3/8\.........................................     0.444972826     0.447404372     0.449862637     0.452348066
16\1/2\.........................................     0.448369565     0.450819672     0.453296703     0.455801105
16\5/8\.........................................     0.451766304     0.454234973     0.456730769     0.459254144
16\3/4\.........................................     0.455163043     0.457650273     0.460164835     0.462707182
16\7/8\.........................................     0.458559783     0.461065574     0.463598901     0.466160221
17..............................................     0.461956522     0.464480874     0.467032967     0.469613260
17\1/8\.........................................     0.465353261     0.467896175     0.470467033     0.473066298
17\1/4\.........................................     0.468750000     0.471311475     0.473901099     0.476519337
17\3/8\.........................................     0.472146739     0.474726776     0.477335165     0.479972376
17\1/2\.........................................     0.475543478     0.478142077     0.480769231     0.483425414
17\5/8\.........................................     0.478940217     0.481557377     0.484203297     0.486878453
17\3/4\.........................................     0.482336957     0.484972678     0.487637363     0.490331492
17\7/8\.........................................     0.485733696     0.488387978     0.491071429     0.493784530
18..............................................     0.489130435     0.491803279     0.494505495     0.497237569
18\1/8\.........................................     0.492527174     0.495218579     0.497939560     0.500690608
18\1/4\.........................................     0.495923913     0.498633880     0.501373626     0.504143646
18\3/8\.........................................     0.499320652     0.502049180     0.504807692     0.507596685
18\1/2\.........................................     0.502717391     0.505464481     0.508241758     0.511049724
18\5/8\.........................................     0.506114130     0.508879781     0.511675824     0.514502762
18\3/4\.........................................     0.509510870     0.512295082     0.515109890     0.517955801
18\7/8\.........................................     0.512907609     0.515710383     0.518543956     0.521408840
19..............................................     0.516304348     0.519125683     0.521978022     0.524861878
19\1/8\.........................................     0.519701087     0.522540984     0.525412088     0.528314917
19\1/4\.........................................     0.523097826     0.525956284     0.528846154     0.531767956
19\3/8\.........................................     0.526494565     0.529371585     0.532280220     0.535220994
19\1/2\.........................................     0.529891304     0.532786885     0.535714286     0.538674033
19\5/8\.........................................     0.533288043     0.536202186     0.539148352     0.542127072
19\3/4\.........................................     0.536684783     0.539617486     0.542582418     0.545580110
19\7/8\.........................................     0.540081522     0.543032787     0.546016484     0.549033149
20..............................................     0.543478261     0.546448087     0.549450549     0.552486188
----------------------------------------------------------------------------------------------------------------

                      3. Short First Payment Period

    In cases where the first interest payment period for a fixed-
principal security covers less than a full half-year period (a ``short 
coupon''), the daily interest decimal is multiplied by the number of 
days from, but not including, the issue date to, and including, the 
first interest payment date, resulting in the amount of the interest 
payable per $1,000 par amount. In cases where the par amount of 
securities is greater than $1,000, the appropriate multiple should be 
multiplied by the unrounded interest payment amount for $1,000 par 
amount.

    Example. A 2-year fixed-principal note paying 8\3/8\% interest was 
issued on July 2, 1990, with the first interest payment on December 31, 
1990. The number of days in the full half-year period of June 30 to 
December 31, 1990, was 184 (see Table 1). The number of days for which 
interest actually accrued was 182 (not including July 2, but including 
December 31). The daily interest decimal, $0.227581522 (see Table 2, 
line for 8\3/8\%, under the column for half-year of 184 days), was 
multiplied by 182, resulting in a payment of $41.419837004 per $1,000. 
Because the note was issued in a minimum denomination of $5,000, 
$41.419837004 was multiplied by 5, resulting in a payment of 
$207.099185020, or $207.10, for a $5,000 note.

[[Page 375]]

For $20,000 of these notes, $41.419837004 would be multiplied by 20, 
resulting in a payment of $828.39674008 ($828.40).

                      4. Long First Payment Period

    In cases where the first interest payment period for a fixed-
principal security covers more than a full half-year period (a ``long 
coupon''), the daily interest decimal is multiplied by the number of 
days from, but not including, the issue date to, and including, the last 
day of the fractional period that ends one full half-year before the 
interest payment date. That amount is added to the regular interest 
amount for the full half-year ending on the first interest payment date, 
resulting in the amount of interest payable for $1,000 par amount. In 
cases where the par amount of securities is greater than $1,000, the 
appropriate multiple should be applied to the unrounded interest payment 
amount for $1,000 par amount.

    Example. A 5-year 2-month fixed-principal note paying 7\7/8\% 
interest was issued on December 3, 1990, with the first interest payment 
due on August 15, 1991. Interest for the regular half-year portion of 
the payment was computed to be $39.375 per $1,000 par amount. The 
fractional portion of the payment, from December 3 to February 15, fell 
in a 184-day half-year (August 15, 1990, to February 15, 1991). 
Accordingly, the daily interest decimal for 7\7/8\% was $0.213994565. 
This decimal, multiplied by 74 (the number of days from but not 
including December 3, 1990, to and including February 15), resulted in 
interest for the fractional portion of $15.835597810. When added to 
$39.375 (the normal interest payment portion ending on August 15, 1991), 
this produced a first interest payment of $55.210597810, or $55.21 per 
$1,000 par amount. For $7,000 par amount of these notes, $55.210597810 
would be multiplied by 7, resulting in an interest payment of 
$386.474184670 ($386.47).

                B. Treasury Inflation-Indexed Securities

                           1. Indexing Process

    Interest on marketable Treasury inflation-indexed securities is 
payable on a semiannual basis. The inflation-indexed securities are 
issued with a stated rate of interest which remains constant for the 
term of the particular security. Interest payments are based on the 
security's inflation-adjusted principal at the time interest is paid. 
This adjustment is made by multiplying the par amount of the security by 
the applicable Index Ratio.

                             2. Index Ratio

    The numerator of the Index Ratio, the Ref CPIDate, is the 
index number applicable for a specific day, and the denominator of the 
Index Ratio is the Ref CPI applicable for the original issue date. 
However, when the dated date is different from the original issue date, 
the denominator is the Ref CPI applicable for the dated date. The 
formula for calculating the Index Ratio is:
[GRAPHIC] [TIFF OMITTED] TC06JA91.000

                            3. Reference CPI

    The Ref CPI for the first day of any calendar month is the CPI for 
the third preceding calendar month. For example, the Ref CPI applicable 
to April 1 in any year is the CPI for January, which is reported in 
February. The Ref CPI for any other day of a month is determined by a 
linear interpolation between the Ref CPI applicable to the first day of 
the month in which such day falls (in the example, January) and the Ref 
CPI applicable to the first day of the next month (in the example, 
February). For purposes of interpolation, calculations with regard to 
the Ref CPI and the Index Ratio for a specific date will be truncated to 
six decimal places and rounded to five decimal places such that the Ref 
CPI and the Index Ratio for that date will be expressed to five decimal 
places. The formula for the Ref CPI for a specific date is:
[GRAPHIC] [TIFF OMITTED] TC06JA91.001

Where Date = valuation date
D = the number of days in the month in which Date falls
t = the calendar day corresponding to Date
CPIM = CPI reported for the calendar month M by the Bureau of 
          Labor Statistics
Ref CPIM = Ref CPI for the first day of the calendar month in 
which Date falls, e.g., Ref CPIApril 1 is the 
CPIJanuary
Ref CPIM= 1 = Ref CPI for the first day of the calendar month 
          immediately following Date


[[Page 376]]


    For example, the Ref CPI for April 15, 1996 is calculated as 
follows:
[GRAPHIC] [TIFF OMITTED] TC06JA91.002

Where Date = 30, t = 15
Ref CPIApril 1, 1996 = 154.40, the non-seasonally adjusted 
          CPI-U for January 1996.
Ref CPIMay 1, 1996 = 154.90, the non-seasonally adjusted CPI-
          U for February 1996.
    Putting these values in the equation above:
    [GRAPHIC] [TIFF OMITTED] TC06JA91.003
    
    This value truncated to six decimals is 154.633333; rounded to five 
decimals it is 154.63333.
    To calculate the Index Ratio for April 16, 1996, for an inflation-
indexed security issued on April 15, 1996, the Ref 
CPIApril 16, 1996 must first be calculated. Using the same 
values in the equation above except that t=16, the Ref 
CPIApril 16,1996 is 154.65000.
    The Index Ratio for April 16, 1996 is:

Index RatioApril 16, 1996 = 154.65000/154.63333 = 
          1.000107803.
    This value truncated to six decimals is 1.000107; rounded to five 
decimals it is 1.00011.

                         4. Index Contingencies

    If a previously reported CPI is revised, Treasury will continue to 
use the previously reported CPI in calculating the principal value and 
interest payments.
    If the CPI is rebased to a different year, Treasury will continue to 
use the CPI based on the base reference period in effect when the 
security was first issued, as long as that CPI continues to be 
published.
    If, while an inflation-indexed security is outstanding, the 
applicable CPI is: (1) discontinued, (2) in the judgment of the 
Secretary, fundamentally altered in a manner materially adverse to the 
interests of an investor in the security, or (3) in the judgment of the 
Secretary, altered by legislation or Executive Order in a manner 
materially adverse to the interests of an investor in the security, 
Treasury, after consulting with the Bureau of Labor Statistics, or any 
successor agency, will substitute an appropriate alternative index. 
Treasury will then notify the public of the substitute index and how it 
will be applied. Determinations of the Secretary in this regard will be 
final.
    If the CPI for a particular month is not reported by the last day of 
the following month, the Treasury will announce an index number based on 
the last twelve-month change in the CPI available. Any calculations of 
the Treasury's payment obligations on the inflation-indexed security 
that rely on that month's CPI will be based on the index number that the 
Treasury has announced. For example, if the CPI for month M is not 
reported timely, the formula for calculating the index number to be used 
is:
[GRAPHIC] [TIFF OMITTED] TC06JA91.004

    Generalizing for the last reported CPI issued N months prior to 
month M:
[GRAPHIC] [TIFF OMITTED] TC06JA91.005

    If it is necessary to use these formulas to calculate an index 
number, it will be used for all subsequent calculations that rely on 
that month's index number and will not be replaced by the actual CPI 
when it is reported, except for use in the above formulas. When it 
becomes necessary to use the above formulas to derive an index number, 
the last CPI that has been reported will be used to calculate CPI 
numbers for months for which the CPI has not been reported timely.

    5. Computation of Interest for a Regular Half-Year Payment Period

    Interest on marketable Treasury inflation-indexed securities is 
payable on a semiannual basis. The regular interest payment period is a 
full half-year or six calendar months. Examples of half-year periods are 
January 15 to July 15, and April 15 to October 15. An interest payment 
will be a fixed

[[Page 377]]

percentage of the value of the inflation-adjusted principal, in current 
dollars, for the date on which it is paid. Interest payments will be 
calculated by multiplying one-half of the specified annual interest rate 
for the inflation-indexed securities by the inflation-adjusted principal 
for the interest payment date. Specifically, a semiannual interest 
payment is computed on the basis of one-half of one year's interest 
regardless of the actual number of days in the half-year.

    Example. A 10-year inflation-indexed note paying 3% interest was 
issued on July 15, 1996, with the first interest payment on January 15, 
1997. The Ref CPI on July 15, 1996 (Ref CPIIssue Date) was 
120, and the Ref CPI on January 15, 1997 (Ref CPIDate) was 
132. For a par amount of $100,000, the inflation-adjusted principal on 
January 15, 1997, was (132/120) x $100,000, or $110,000. This amount was 
then multiplied by .03/2, or .015, resulting in a payment of $1,650.00.

                           C. Accrued Interest

    Accrued interest will be payable by the purchaser of a Treasury bond 
or note when interest accrues prior to the issue date of the security. 
Because the purchaser receives a full interest payment despite having 
held the security for only a portion of the interest payment period, the 
Department is compensated through the payment of accrued interest at 
settlement.
    For a fixed-principal security, if accrued interest covers a 
fractional portion of a full half-year period, the number of days in the 
full half-year period and the stated interest rate will determine the 
daily interest decimal to be used in computing the accrued interest. The 
decimal is multiplied by the number of days for which interest has 
accrued. If a reopened fixed-principal security has a long first 
interest payment period (a ``long coupon''), and the dated date for the 
reopened issue is less than six full months before the first interest 
payment, the accrued interest will fall into two separate half-year 
periods, and a separate daily interest decimal must be multiplied by the 
respective number of days in each half-year period during which interest 
has accrued. All accrued interest computations are rounded to five 
decimal places for a $1,000 inflation-adjusted principal, using normal 
rounding procedures. Accrued interest for a par amount of securities 
greater than $1,000 is calculated by applying the appropriate multiple 
to accrued interest payable for $1,000 par amount, rounded to five 
decimal places.
    For an inflation-indexed security, accrued interest will be 
calculated as shown in section III, paragraphs A and B of this appendix.

    Examples. (1) Fixed-Principal Securities--(i) Involving One Half-
Year: A bond paying interest at a rate of 8\3/4\%, originally issued on 
August 15, 1990, as a 30-year bond with a first interest payment date of 
February 15, 1991, was reopened as a 29-year 9-month bond on November 
15, 1990. Interest had accrued for 92 days, from August 15 to November 
15. The regular interest period from August 15 to February 15, 1991, 
covered 184 days. Accordingly, the daily interest decimal, $0.237771739, 
multiplied by 92, resulted in accrued interest payable of $21.874999988, 
or $21.87500, for each $1,000 bond purchased. If the bonds have a par 
amount of $150,000, then 150 is multiplied by $21.87500, resulting in an 
amount payable of $3,281.25.
    (ii) Involving Two Half-Years: A 10\3/4\% bond, originally issued on 
July 2, 1985, as a 20-year 1-month bond, with a first interest payment 
date of February 15, 1986, was reopened as a 19-year 10-month bond on 
November 4, 1985. Interest had accrued for 44 days, from July 2 to 
August 15, 1985, during a 181-day half-year (February 15 to August 15); 
and for 81 days, from August 15 to November 4, during a 184-day half-
year (August 15, 1985, to February 15, 1986). Accordingly, $0.296961326 
was multiplied by 44, and $0.292119565 was multiplied by 81, resulting 
in products of $13.066298344 and $23.661684765 which, added together, 
resulted in accrued interest payable of $36.727983109, or $36.72798, for 
each $1,000 bond purchased. If the bonds have a par amount of $11,000, 
then 11 is multiplied by $36.72798, resulting in an amount payable of 
$404.00778 ($404.01).

   II. Formulas for Conversion of Fixed-Principal Security Yields to 
                            Equivalent Prices

                               Definitions

P=price per 100 (dollars), rounded to three places, using normal 
rounding procedures
C=the regular annual interest per $100, payable semiannually, e.g., 
10.125 (the dollar equivalent of a 10\1/8\% interest rate)
i=nominal annual rate of return or yield to maturity, based on 
semiannual interest payments and expressed in decimals, e.g., .0719
n=number of full semiannual periods from the issue date to maturity, 
except that, if the issue date is a coupon frequency date, n will be one 
less than the number of full semiannual periods remaining to maturity. 
Coupon frequency dates are the two semiannual dates based on the 
maturity date of each note or bond issue. For example, a security 
maturing on November 15, 1995, would have coupon frequency dates of May 
15 and November 15.
r=(1) number of days from the issue date to the first interest payment 
(regular or short first payment period), or (2) number of days in 
fractional portion (or ``initial short period'') of long first payment 
period
s=(1) number of days in the full semiannual period ending on the first 
interest payment date (regular or short first payment period), or (2) 
number of days in the full

[[Page 378]]

semiannual period in which the fractional portion of a long first 
payment period falls, ending at the onset of the regular portion of the 
first interest payment
vn=1/[1+(i/2)]n=present value of 1 due at the end 
of n periods
an=(1-vn)/(i/2)=v+v\2\+v\3\+ . . . 
+vn=present value of 1 per period for n periods
A=accrued interest
    A. For fixed-principal securities with a regular first interest 
payment period:

Formula:

P[1+(r/s)(i/2)]=(C/2)(r/s)+(C/2)an+100 vn

Example:

For an 8\3/4\% 30-year bond, issued May 15, 1990, due May 15, 2020, with 
interest payments on November 15 and May 15, solve for the price per 100 
(P) at a yield of 8.84%.

Definitions:

C=8.75
i=.0884
r=184 (May 15 to November 15, 1990)
s=184 (May 15 to November 15, 1990)
n=59 (There are 60 full semiannual periods, but n is reduced by 1 
because the issue date is a coupon frequency date.)
vn=1/[(1+.0884/2)]\59\, or .077940
an=(1-.077940)/.0442, or 20.861086

Resolution:

P[1+(r/s)(i/2)]=(C/2)(r/s)+(C/2)an+100 vn or
P[1+(184/184)(.0884/2)]=(8.75/2)(184/184)+(8.75/
2)(20.861086)+100(.077940)
(1) P[1+.0442]=4.375+91.267251+7.7940
(2) P[1.0442]=103.436251
(3) P=103.436251+1.0442
(4) P=99.057892
(5) P=99.058
    B. For fixed-principal securities with a short first interest 
payment period:

Formula:

P[1+(r/s)(i/2)]=(C/2)(r/s)+(C/2)an+100 vn

Example:

    For an 8\1/2\% 2-year note, issued April 2, 1990, due March 31, 
1992, with interest payments on September 30 and March 31, solve for the 
price per 100 (P) at a yield of 8.59%.

Definitions:

C=8.50
i=.0859
n=3
r=181 (April 2 to September 30, 1990)
s=183 (March 31 to September 30, 1990)
vn=1/[(1+.0859/2)] \3\, or .881474
an=(1-.881474)/.04295, or 2.759627

Resolution:

P[1+(r/s)(i/2)]=(C/2)(r/s)+(C/2)an+100 vn or
P[1+(181/183)(.0859/2)]=(8.50/2)(181/183)+(8.50/
2)(2.759627)+100(.881474)
(1) P[1+.042481]=4.203552+ 11.728415+88.1474
(2) P[1.042481]=104.079367
(3) P=104.079367/1.042481
(4) P=99.838143
(5) P=99.838
    C. For fixed-principal securities with a long first interest payment 
period:

Formula:

P[1+(r/s)(i/2)]=[(C/2)(r/s)]v+(C/2)an+100 vn

Example:

    For an 8\1/2\% 5-year 2-month note, issued March 1, 1990, due May 
15, 1995, with interest payments on November 15 and May 15 (first 
payment on November 15, 1990), solve for the price per 100 (P) at a 
yield of 8.53%.

Definitions:

C=8.50
i=.0853
n=10
r=75 (March 1 to May 15, 1990, which is the fractional portion of the 
first interest payment)
s=181 (November 15, 1989, to May 15, 1990)
v=1/(1+.0853/2), or .959095
vn=1/(1+.0853/2) \10\, or .658589
an=(1-.658589)/.04265, or 8.004947

Resolution:

P[1+(r/s)(i/2)]=[(C/2)(r/s)]v+(C/2)an+100 vn or
P[1+(75/181)(.0853/2)]=[(8.50/2)(75/181)] .959095+(8.50/
2)(8.004947)+100(.658589)
(1) P[1+.017673]=1.689014+ 34.021025+65.8589
(2) P[1.017673]=101.568939
(3) P=101.568939/1.017673
(4) P=99.805084
(5) P=99.805
    D. (1) For fixed-principal securities reopened during a regular 
interest period where the purchase price includes predetermined accrued 
interest.
    (2) For new fixed-principal securities accruing interest from the 
coupon frequency date immediately preceding the issue date, with the 
interest rate established in the auction being used to determine the 
accrued interest payable on the issue date.

Formula:

(P+A)[1+(r/s)(i/2)]=C/2+(C/2)an+100 vn

Where: A=[(s-r)/s](C/2)

Example:

    For a 9\1/2\% 10-year note, interest accruing from November 15, 
1985, issued November 29, 1985, due November 15, 1995, with interest 
payments on May 15 and November 15, solve for the price per 100 (P) at a 
yield of 9.54%. Accrued interest is from November 15 to November 29 (14 
days).

Definitions:

C=9.50
i=.0954
n=19
r=167 (November 29, 1985, to May 15, 1986)
s=181 (November 15, 1985, to May 15, 1986)
vn=1/[(1+.0954/2)]\19\, or .412570400
an=(1-.412570)/.0477, or 12.315094
A=[181-167)/181](9.50/2), or .367403

Resolution:

(P+A)[1+(r/s)(i/2)]=C/2+(C/2)an+100 vn or

[[Page 379]]

(P+.367403)[1+(167/181)(.0954/2)]=(9.50/2)+(9.50/
          2)(12.315094)+100(.412570)
(1) (P+.367403)[1+.044011]= 4.75+58.496697+41.2570
(2) (P+.367403)[1.044011]=104.503697
(3) (P+.367403)=104.503697/1.044011
(4) (P+.367403)=100.098272
(5) P=100.098272-.367403
(6) P=99.730869
(7) P=99.731
    E. For fixed-principal securities reopened during the regular 
portion of a long first payment period:

Formula:

(P+A)[1+(r/s)(i/2)]=(r'/s'')(C/2)+C/2+(C/2)an+100 
          vn
Where:

A=AI'+AI
AI'=(r'/s'')(C/2)
AI=[(s-r)/s](C/2)

and

r=number of days from the reopening date to the first interest payment 
          date
s=number of days in the semiannual period for the regular portion of the 
          first interest payment period
r'=number of days in the fractional portion (or ``initial short 
          period'') of the first interest payment period
s''=number of days in the semiannual period ending with the commencement 
          date of the regular portion of the first interest payment 
          period

Example:
    A 10\3/4\% 19-year 9-month bond due August 15, 2005, is issued on 
July 2, 1985, and reopened on November 4, 1985, with interest payments 
on February 15 and August 15 (first payment on February 15, 1986), solve 
for the price per 100 (P) at a yield of 10.47%. Accrued interest is 
calculated from July 2 to November 4.

Definitions:

C=10.75
i=.1047
n=39
r=103 (November 4, 1985, to February 15, 1986)
s=184 (August 15, 1985, to February 15, 1986)
r'=44 (July 2 to August 15, 1985)
s''=181 (February 15 to August 15, 1985)
vn=1/[(1+.1047/2)]\39\, or .136695
an=(1-.136695)/.05235, or 16.491022
AI'=(44/181)(10.75/2), or 1.306630
AI'=[(184-103)/184](10.75/2), or 2.366168

A=AI'+AI, or 3.672798
Resolution:

(P+A)[1+(r/s)(i/2)]=(r'/s'')(C/2)+C/2+(C/
          2)an+100vn or
(P+3.672798)[1+(103/184)(.1047/2)]=(44/181)(10.75/2)+10.75/2+(10.75 /
          2)(16.491022)+100(.136695)
(1) (P+3.672798)[1+.029305]=1.306630 + 5.375+88.639243+13.6695
(2) (P+3.672798)[1.029305]=108.990373
(3) (P+3.672798)=108.990373/1.029305
(4) (P+3.672798)=105.887344
(5) P=105.887344-3.672798
(6) P=102.214546
(7) P=102.215
    F. For fixed-principal securities reopened during a short first 
payment period:

Formula:

(P+A)[1+(r/s)(i/2)]=(r'/s)(C/2)+(C/2)an +100 vn

Where:

A=[(r'-r)/s](C/2)

and

r'=number of days from the original issue date to the first interest 
          payment date

Example:

    For a 10\1/2\% 8-year note due May 15, 1991, originally issued on 
May 16, 1983, and reopened on August 15, 1983, with interest payments on 
November 15 and May 15 (first payment on November 15, 1983), solve for 
the price per 100 (P) at a yield of 10.53%. Accrued interest is 
calculated from May 16 to August 15.

Definitions:
C=10.50
i=.1053
n=15
r=92 (August 15, 1983, to November 15, 1983)
s=184 (May 15, 1983, to November 15, 1983)
r'=183 (May 16, 1983, to November 15, 1983)
vn=1/[(1+.1053/2)]\15\, or .463170
an=(1-.463170) / .05265, or 10.196201
A=[(183-92) / 184](10.50/2), or 2.596467

Resolution:

(P + A)[1 + (r/s)(i/2)] = (r'/s)(C/2) + (C/2)an + 100 
          vn or
(P + 2.596467)[1 + (92/184)(.1053/2)] = (183/184)(10.50/2) + (10.50/
          2)(10.196201) + 100(.463170)
(1) (P + 2.596467)[1 + .026325] = 5.221467 + 53.530055 + 46.3170
(2) (P+2.596467)[1.026325]=105.068522
(3) (P+2.596467)+105.068522/1.026325
(4) (P+2.596467)=102.373539
(5) P=102.373539-2.596467
(6) P=99.777072
(7) P=99.777
    G. For fixed-principal securities reopened during the fractional 
portion (initial short period) of a long first payment period:

Formula:

(P+A)[1+(r/s)(i/2)]=[(r'/s)(C/2)]v+(C/2)an+100 vn

Where:

A=[(r'-r)/s](C/2)

and

r=number of days from the reopening date to the end of the short period
r'=number of days in the short period
s=number of days in the semiannual period ending with the end of the 
          short period

Example:

    For a 9\3/4\% 6-year 2-month note due December 15, 1994, originally 
issued on October 15,

[[Page 380]]

1988, and reopened on November 15, 1988, with interest payments on June 
15 and December 15 (first payment on June 15, 1989), solve for the price 
per 100 (P) at a yield of 9.79%. Accrued interest is calculated from 
October 15 to November 15.

Definitions:

C=9.75
i=.0979
n=12
r=30 (November 15, 1988, to December 15, 1988)
s=183 (June 15, 1988, to December 15, 1988)
r'=61 (October 15, 1988, to December 15, 1988)
v=1/(1+.0979/2), or .953334
vn=[1/(1+.0979/2)]\12\, or .563563
an=(1-.563563)/.04895, or 8.915975
A=[(61-30)/183](9.75/2), or .825820

Resolution:

(P+A)[1+(r/s)(i/2)]=[(r'/s)(C/2)]v+(C/2)an+100 vn 
          or
(P+.825820)[1+(30/183)(.0979/2)]=[(61/183)(9.75/2)](.953334)+(9.75/
          2)(8.915975)+100(.563563)
(1) (P+.825820)[1+.008025]= 1.549168+43.465378+56.3563
(2) (P+.825820)[1.008025]=101.370846
(3) (P+.825820)=101.370846/1.008025
(4) (P+.825820)=100.563821
(5) P=100.563821-.825820
(6) P=99.738001
(7) P=99.738

  III. Formulas For Conversion of Inflation-Indexed Security Yields To 
                            Equivalent Prices

                               Definitions

P = unadjusted or real price per 100 (dollars)
P adj = inflation adjusted price; P x Index Ratio 
          Date
A = unadjusted accrued interest per $100 original principal
A adj = inflation adjusted accrued interest; A x Index Ratio 
          Date
SA = settlement amount including accrued interest in current dollars per 
          $100 original principal; P adj + A adj
r = days from settlement date to next coupon date
s = days in current semiannual period
i = real yield, expressed in decimals (e.g., 0.0325)
C = real annual coupon, payable semiannually, in terms of real dollars 
          paid on $100 initial, or real, principal of the security
n = number of full semiannual periods from issue date to maturity date, 
          except that, if the issue date is a coupon frequency date, n 
          will be one less than the number of full semiannual periods 
          remaining until maturity. Coupon frequency dates are the two 
          semiannual dates based on the maturity date of each note or 
          bond issue. For example, a security maturing on July 15, 2026 
          would have coupon frequency dates of January 15 and July 15.
v n = 1/(1 + i/2) n = present value of 1 due at 
          the end of n periods
          [GRAPHIC] [TIFF OMITTED] TC06JA91.006
          
Date = valuation date
D = the number of days in the month in which Date falls
t = calendar day corresponding to Date
CPI = Consumer Price Index number
CPIM = CPI reported for the calendar month M by the Bureau of 
          Labor Statistics
Ref CPIM = reference CPI for the first day of the calendar 
          month in which Date falls, e.g., Ref CPIApril1 is 
          the CPIJanuary
Ref CPIM=1 = reference CPI for the first day of the calendar 
          month immediately following Date
Ref CPIDate = Ref CPIM + [(t - 1)/D][Ref 
          CPIM=1 -Ref CPIM]
Index RatioDate = Ref CPIDate/Ref 
          CPIIssueDate

    A. For inflation-indexed securities with a regular first interest 
payment period:

                                Formulas:
[GRAPHIC] [TIFF OMITTED] TC06JA91.007

Padj = P x Index RatioDate
A = [(s - r)/s] x (C/2)
Aadj = A x Index RatioDate
SA = Padj + Aadj
Index RatioDate = Ref CPIDate/Ref 
          CPIIssue Date

    Example. The Treasury issues a 10-year inflation-indexed note on 
July 15, 1996. The note is issued at a discount to yield 3.1% (real). 
The note bears a 3% real coupon, payable on January 15 and July 15 of 
each year. The base CPI index applicable to this note is 120.\1\ 
Calculate the settlement amount.
---------------------------------------------------------------------------

    \1\ This number is normally derived using the interpolative process 
described in appendix B, section I, paragraph B.
---------------------------------------------------------------------------

                              Definitions:

C = 3.00
i = 0.0310

[[Page 381]]

n = 19 (There are 20 full semiannual periods but n is reduced by 1 
          because the issue date is a coupon frequency date.)
r = 184 (July 15, 1996 to January 15, 1997)
s = 184 (July 15, 1996 to January 15, 1997)
Ref CPIDate = 120
Ref CPIIssueDate = 120

                               Resolution:

Index RatioDate = Ref CPIDate/Ref 
          CPIIssue Date = 120/120 = 1
A = [(184 - 184)/184] x 3/2 = 0
Aadj = 0 x 1 = 0
vn = 1/(1 + i/2) n = 1/(1 + .031/2) \19\ = 
          0.74658863
          [GRAPHIC] [TIFF OMITTED] TC06JA91.008
          
          [GRAPHIC] [TIFF OMITTED] TC06JA91.009
          
P = 99.145784
P = 99.146
Padj = P x Index RatioDate
Padj = 99.146 x 1 = 99.146
SA = Padj + Aadj ;
SA = 99.146 + 0 = 99.146
    Note: For the real price (P), Treasury has rounded to three places. 
These amounts are based on 100 par value.
    B. For inflation-indexed securities reopened during a regular 
interest period where the purchase price includes predetermined accrued 
interest:

                                Bidding:

    The dollar amount of each bid is in terms of the par amount. For 
example, if the Ref CPI applicable to the issue date of the note is 120, 
and the reference CPI applicable to the reopening issue date is 132, a 
bid of $10,000 will in effect be a bid of $10,000 x (132/120), or 
$11,000.

                                Formulas:
[GRAPHIC] [TIFF OMITTED] TC06JA91.010

Padj = P x Index RatioDate
A = [(s - r)/s] x (C/2)
Aadj = A x Index RatioDate
SA = Padj + Aadj
Index RatioDate = Ref CPIDate/Ref 
          CPIIssueDate

    Example. A 3% 10-year inflation-indexed note was issued July 15, 
1996, due July 15, 2006, with interest payments on January 15 and July 
15. For a reopening on April 15, 1997, with inflation compensation 
accruing from July 15, 1996 to April 15, 1997, and accrued interest 
accruing from January 15, 1997 to April 15, 1997 (90 days), solve for 
the price per 100 (P) at a real yield, as determined in the reopening 
auction, of 3.40%. The base index applicable to the issue date of this 
note is 120 and the reference CPI applicable to April 15, 1997, is 132.

                              Definitions:

C = 3.00
i = 0.0340
n = 18
r = 91 (April 15, 1997 to July 15, 1997)
s = 181 (January 15, 1997 to July 15, 1997)
Ref CPIDate = 132
Ref CPIIssue Date = 120

[[Page 382]]

                               Resolution:

Index RatioDate = Ref CPIDate/Ref 
          CPIIssue Date = 132/120 = 1.100
vn = 1/(1 + i/2) n = 1/(1 + .0340/2) \18\ = 
          0.73828296
          [GRAPHIC] [TIFF OMITTED] TC06JA91.011
          
          [GRAPHIC] [TIFF OMITTED] TC06JA91.012
          
P = 97.586905 - 0.745856
P = 96.841049
P = 96.841
Padj = P x Index RatioDate
Padj = 96.841 x 1.100 = 106.5251
Padj = 106.525
A = [(181 - 91)/181] x 3/2 = 0.745856
Aadj = A x Index RatioDate
Aadj = 0.745856 x 1.100 = 0.820442
SA = Padj + Aadj = 106.525 + 0.820442
SA = 107.345442
    Note: For the real price (P), and the inflation-adjusted price 
(Padj), Treasury has rounded to three places. For accrued 
interest (A) and adjusted accrued interest (Aadj), Treasury 
has rounded to six places. These amounts are based on 100 par value.

  IV. Computation of Adjusted Values and Payment Amounts for Stripped 
                  Inflation-Indexed Interest Components

    Note: Valuing an interest component stripped from an inflation-
indexed security at its adjusted value enables this interest component 
to be interchangeable (fungible) with other interest components that 
have the same maturity date, regardless of the underlying inflation-
indexed security from which the interest components were stripped. The 
adjusted value provides for fungibility of these various interest 
components when buying, selling, or transferring them, or when 
reconstituting an inflation-indexed security.

                               Definitions

C=the regular annual interest rate, payable semiannually, e.g., .03625 
          (the decimal equivalent of a 3-5/8% interest rate)
Par=par amount of the security to be stripped
Ref CPIIssue Date=reference CPI for the original issue date 
          (or dated date, when the dated date is different from the 
          original issue date) of the underlying (unstripped) security
Ref CPIDate=reference CPI for the maturity date of the 
          interest component
AV=adjusted value of the interest component
PA=payment amount at maturity by Treasury

                                Formulas

AV=Par (C/2)(100/Ref CPIIssue Date) (rounded to 2 decimals 
          with no intermediate rounding)
PA=AV (Ref CPIDate/100) (rounded to 2 decimals with no 
          intermediate rounding)
    Example. A 10-year inflation-indexed note paying 3\1/2\% interest is 
issued on January 15, 1999, with the second interest payment on January 
15, 2000. The Ref CPI on January 15, 1999 (Ref CPIIssue Date) 
is 174.62783, and the Ref CPI on January 15, 2000 (Ref 
CPIDate) is 179.86159. Calculate the adjusted value and the 
payment amount at maturity of the interest component.

                               Definitions

C=.035
Par=$1,000,000
Ref CPIIssue Date=174.62783
Ref CPIDate=179.86159

                               Resolution

    For a par amount of $1 million, the adjusted value of each stripped 
interest component is $1,000,000 (.035/2)(100/174.62783), or $10,021.31 
(no intermediate rounding).
    For an interest component maturing on January 15, 2000, the payment 
amount is

[[Page 383]]

$10,021.31 (179.86159/100), or $18,024.49 (no intermediate rounding).

  V. Computation of Purchase Price, Discount Rate, and Investment Rate 
              (Coupon-Equivalent Yield) for Treasury Bills

    A. Conversion of the discount rate to a purchase price for Treasury 
bills of all maturities:
Formula:
P=100 [(1-dr)/360]

Where:

d=discount rate, in decimals
r=number of days remaining to maturity
P=price per 100 (dollars)

Example:

    For a bill issued November 24, 1989, due February 22, 1990, at a 
discount rate of 7.61%, solve for price per 100 (P).

Definitions:

d=.0761
r=90 (November 24, 1989 to February 22, 1990)

Resolution:

P=100 [(1-dr)/360]
(1) P=100 [1-(.0761)(90)/360]
(2) P=100 (1-.019025)
(3) P=100 (.980975)
(4) P=98.0975
(5) P=98.098
    Note: Purchase prices per $100 are rounded to three decimal places, 
using normal rounding procedures.
    B. Computation of purchase prices and discount amounts based on 
price per $100, for Treasury bills of all maturities:
    1. To determine the purchase price of any bill, divide the par 
amount by 100 and multiply the resulting quotient by the price per $100.

    Example. To compute the purchase price of a $10,000 13-week bill 
sold at a price of $98.098 per $100, divide the par amount ($10,000) by 
100 to obtain the multiple (100). That multiple times 98.098 results in 
a purchase price of $9,809.80.

    2. To determine the discount amount for any bill, subtract the 
purchase price from the par amount of the bill.

    Example. For a $10,000 bill with a purchase price of $9,809.80, the 
discount amount would be $190.20, or $10,000-$9,809.80.
    C. Conversion of prices to discount rates for Treasury bills of all 
maturities:

Formula:
[GRAPHIC] [TIFF OMITTED] TC03NO91.009

Where:

P=price per 100 (dollars)
d=discount rate
r=number of days remaining to maturity

Example:

For a 26-week bill issued December 30, 1982, due June 30, 1983, with a 
price of $95.930, solve for the discount rate (d).

Definitions:

P=95.930
r=182 (December 30, 1982, to June 30, 1983)

Resolution:
[GRAPHIC] [TIFF OMITTED] TC03NO91.010

(2) d=[.0407x1.978022]
(3) d=.080506
(4) d=8.051%
    Note: Prior to April 18, 1983, all bills were sold in price-basis 
auctions, in which discount rates calculated from prices were rounded to 
three places, using normal rounding procedures. Since that time, all 
bills have been sold only on a discount rate basis. For regular Treasury 
bills--13-, 26-, and 52-week bills--discount rates bid were submitted 
with two decimals in increments of .01 percent, e.g., 5.32, until 1997, 
when Treasury instituted a change to three decimal bidding in increments 
of .005 percent, e.g., 5.320 or 5.325.
    D. Calculation of investment rate (coupon-equivalent yield) for 
Treasury bills:
    1. For bills of not more than one half-year to maturity:

Formula:
[GRAPHIC] [TIFF OMITTED] TC03NO91.011

Where:

i=investment rate, in decimals
P=price per 100 (dollars)
r=number of days remaining to maturity
y=number of days in year following the issue date; normally 365 but, if 
          the year following the issue date includes February 29, then y 
          is 366.

Example:

For a cash management bill issued June 1, 1990, due June 21, 1990, with 
a price of $99.559 (computed from a discount rate of 7.93%), solve for 
the investment rate (i).

Definitions:

P=99.559
r=20 (June 1, 1990, to June 21, 1990)
y=365

Resolution:

[[Page 384]]

[GRAPHIC] [TIFF OMITTED] TC03NO91.012

(2) i=[.004430x18.25]
(3) i=.080848
(4) i=8.08%

    2. For bills of more than one half-year to maturity:

Formula: P[1+(r-y/2)(i/y)](1+i/2) = 100

This formula must be solved by using the quadratic equation, which is:

ax\2\+bx+c=0

Therefore, rewriting the bill formula in the quadratic equation form 
gives:
[GRAPHIC] [TIFF OMITTED] TC03NO91.013

and solving for ``i'' produces:
[GRAPHIC] [TIFF OMITTED] TC03NO91.014

Where:

i=investment rate in decimals
b=r/y
a=(r/2y)-.25
c=(P-100)/P
P=price per 100 (dollars)
r=number of days remaining to maturity
y=number of days in year following the issue date; normally 365, but if 
          the year following the issue date includes February 29, then y 
          is 366.

Example:

For a 52-week bill issued June 7, 1990, due June 6, 1991, with a price 
of $92.265 (computed from a discount rate of 7.65%), solve for the 
investment rate (i).

Definitions:

r=364 (June 7, 1990, to June 6, 1991)
y=365
P=92.265
b=364/365, or .997260
a=(364/730)-.25, or .24863
c=(92.265-100)/92.265, or -.083835

Resolution:
[GRAPHIC] [TIFF OMITTED] TC03NO91.015

[GRAPHIC] [TIFF OMITTED] TC03NO91.016

(3)i=(-.997260 + 1.038222)/.497260
(4)i=.040962/.497260
(5)i=.082375 or
(6)i=8.24%

[58 FR 414, Jan. 5, 1993, as amended at 62 FR 854, 855, 864, 866, Jan. 
6, 1997; 62 FR 43094, Aug. 12, 1997; 63 FR 35784, June 30, 1998; 64 FR 
3634, Jan. 25, 1999]

            Appendix C to Part 356--Investment Considerations

                     I. Inflation-Indexed Securities

                  A. Principal and Interest Variability

    An investment in securities with principal or interest determined by 
reference to an inflation index involves factors not associated with an 
investment in a fixed-principal security. Such factors may include, 
without limitation, the possibility that the inflation index may be 
subject to significant changes, that changes in the index may or may not 
correlate to changes in interest rates generally or with changes in 
other indices, that the resulting interest may be greater or less than 
that payable on other securities of

[[Page 385]]

similar maturities, and that, in the event of sustained deflation, the 
amount of the semiannual interest payments, the inflation-adjusted 
principal of the security, and the value of stripped components, will 
decrease. However, if at maturity the inflation-adjusted principal is 
less than a security's par amount, an additional amount will be paid at 
maturity so that the additional amount plus the inflation-adjusted 
principal equals the par amount. Regardless of whether or not such an 
additional amount is paid, interest payments will always be based on the 
inflation-adjusted principal as of the interest payment date. If a 
security has been stripped, any such additional amount will be paid at 
maturity to holders of principal components only. (See Sec. 356.30.)

                   B. Trading in the Secondary Market

    The Treasury securities market is the largest and most liquid 
securities market in the world. While Treasury expects that there will 
be an active secondary market for inflation-indexed securities, that 
market initially may not be as active or liquid as the secondary market 
for Treasury fixed-principal securities. In addition, as a new product, 
inflation-indexed securities may not be as widely traded or as well 
understood as Treasury fixed-principal securities. Lesser liquidity and 
fewer market participants may result in larger spreads between bid and 
asked prices for inflation-indexed securities than the bid-asked spreads 
for fixed-principal securities with the same time to maturity. Larger 
bid-asked spreads normally result in higher transaction costs and/or 
lower overall returns. The liquidity of an inflation-indexed security 
may be enhanced over time as Treasury issues additional amounts or more 
entities participate in the market.

                          C. Tax Considerations

    Treasury inflation-indexed securities and the stripped interest and 
principal components of these securities are subject to specific tax 
rules provided by Treasury regulations issued under sections 1275(d) and 
1286 of the Internal Revenue Code of 1986, as amended.

                           D. Indexing Issues

    While the CPI measures changes in prices for goods and services, 
movements in the CPI that have occurred in the past are not necessarily 
indicative of changes that may occur in the future.
    The calculation of the index ratio incorporates an approximate 
three-month lag, which may have an impact on the trading price of the 
securities, particularly during periods of significant, rapid changes in 
the index.
    The CPI is reported by the Bureau of Labor Statistics, a bureau 
within the Department of Labor. The Bureau of Labor Statistics operates 
independently of the Treasury and, therefore, Treasury has no control 
over the determination, calculation, or publication of the index. For a 
discussion of how the CPI will be applied in various situations, see 
appendix B, section I, paragraph B. In addition, for a discussion of 
actions that Treasury would take in the event the CPI is: discontinued; 
in the judgment of the Secretary, fundamentally altered in a manner 
materially adverse to the interests of an investor in the security; or, 
in the judgment of the Secretary, altered by legislation or Executive 
Order in a manner materially adverse to the interests of an investor in 
the security, see appendix B, section I, paragraph B.4.

[62 FR 873, Jan. 6, 1997]

     Appendix D to Part 356--Description of the Consumer Price Index

    The Consumer Price Index (``CPI'') for purposes of inflation-indexed 
securities is the non-seasonally adjusted U.S. City Average All Items 
Consumer Price Index for All Urban Consumers, published monthly by the 
Bureau of Labor Statistics of the Department of Labor. The CPI is a 
measure of the average change in consumer prices over time in a fixed 
market basket of goods and services, including food, clothing, shelter, 
fuels, transportation, charges for doctors' and dentists' services, and 
drugs.
    In calculating the index, price changes for the various items are 
averaged together with weights that represent their importance in the 
spending of urban households in the United States. The contents of the 
market basket of goods and services and the weights assigned to the 
various items are updated periodically to take into account changes in 
consumer expenditure patterns.
    The CPI is expressed in relative terms in relation to a time base 
reference period for which the level is set at 100. For example, if the 
CPI for the 1982-84 reference period is 100.0, an increase of 16.5 
percent from that period would be shown as 116.5. The CPI for a 
particular month is released and published during the following month. 
From time to time, the CPI is rebased to a more recent base reference 
period. The base reference period for a particular inflation-indexed 
security will be provided on the offering announcement for that 
security.
    Further details about the CPI may be obtained by contacting the 
Bureau of Labor Statistics.

[62 FR 873, Jan. 6, 1997]

[[Page 386]]

Exhibit A to Part 356--Sample Announcements of Treasury Offerings to the 
                                 Public

I. Treasury Quarterly Financing Announcement.
II. Treasury Weekly Bill Announcement.
III. Treasury Cash Management Bill Announcement.
IV. Treasury Inflation-Indexed Note Announcement.

              I. Treasury Quarterly Financing Announcement

For release when authorized at press conference February 5, 20XX
Contact: Office of Financing, 202/XXX-XXXX

                  Treasury February Quarterly Financing

    The Treasury will auction $16,000 million of 5-year notes, $12,000 
million of 10-year notes, and $10,000 million of 30-year bonds to refund 
$26,996 million of publicly-held securities maturing February 15, 20XX, 
and to raise about $11,004 million of new cash.
    In addition to the public holdings, Government accounts and Federal 
Reserve Banks, for their own accounts, hold $1,795 million of the 
maturing securities, which may be refunded by issuing additional amounts 
of the new securities.
    The maturing securities held by the public include $1,654 million 
held by Federal Reserve Banks as agents for foreign and international 
monetary authorities. Amounts bid for these accounts by Federal Reserve 
Banks will be added to the offering.
    All of the auctions being announced today will be conducted in the 
single-price auction format. All competitive and noncompetitive awards 
will be at the highest yield of accepted competitive tenders.
    The 5-year and 10-year notes and the 30-year bond being offered 
today are eligible for the STRIPS program.
    Tenders will be received at Federal Reserve Banks and Branches and 
at the Bureau of the Public Debt, Washington, D.C. This offering of 
Treasury securities is governed by the terms and conditions set forth in 
the Uniform Offering Circular for the Sale and Issue of Marketable Book-
Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, as amended).
Details about the notes and bond are given in the attached offering 
highlights.

Attachment

                                 Highlights of Treasury Offerings to the Public
                                       [February 20XX Quarterly Financing]
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Offering Amount...............  $16,000 million.  $12,000 million.  $10,000 million.
Description of Offering:
    Term and type of security.  5-year notes....  10-year notes...  30 year bonds.
    Series....................  U-20XX..........  B-20XX..........  Bonds of February 20XX.
    CUSIP number..............  912827XX X......  912827XX X......  912810XX X.
    Auction date..............  February 11,      February 12,      February 13, 20XX.
                                 20XX.             20XX.
    Issue date................  February 18,      February 18,      February 18, 20XX.
                                 20XX.             20XX.
    Dated date................  February 15,      February 15,      February 15, 20XX.
                                 20XX.             20XX.
    Maturity date.............  February 15,      February 15,      February 15, 20XX.
                                 20XX.             20XX.
    Interest rate.............  Determined based  Determined based  Determined based on the highest accepted
                                 on the highest    on the highest    competitive bid.
                                 accepted          accepted
                                 competitive bid.  competitive bid.
      Yield...................  Determined at     Determined at     Determined at auction.
                                 auction.          auction.
    Interest payment dates....  August 15 and     August 15 and     August 15 and February 15.
                                 February 15.      February 15.
    Minimum bid amount and      $1,000..........  $1,000..........  $1,000.
     multiples.
    Accrued interest payable    Determined at     Determined at     Determined at auction.
     by investor.                auction.          auction.
    Premium or discount.......  Determined at     Determined at     Determined at auction.
                                 auction.          auction.
STRIPS Information:
    Minimum amount required...  Determined at     Determined at     Determined at auction.
                                 auction.          auction.
    Corpus CUSIP number.......  912820XX X......  912820XX X......  912803XX X.

[[Page 387]]

 
    Due dates and CUSIP         Not applicable..  Not applicable..  February 15, 20XX--912833 XX X.
     numbers for additional
     TINTs.
----------------------------------------------------------------------------------------------------------------


The following rules apply to
 all securities mentioned
 above:
 
Submission of Bids:
    Noncompetitive bids......  Accepted in full up to $5,000,000 at the
                                highest accepted yield.
    Competitive bids.........  (1) Must be expressed as a yield with
                                three decimals in increments of .001%,
                                e.g., 7.123%.
                               (2) Net long position for each bidder
                                must be reported when the sum of the
                                total bid amount, at all yields, and the
                                net long position is $2 billion or
                                greater.
                               (3) Net long position must be determined
                                as of one half-hour prior to the closing
                                time for receipt of competitive tenders.
Maximum Recognized Bid at a    35% of public offering.
 Single Yield.
Maximum Award................  35% of public offering.
Receipt of Tenders:
    Noncompetitive tenders...  Prior to 12:00 noon Eastern Standard time
                                on auction day.
    Competitive tenders......  Prior to 1:00 p.m. Eastern Standard time
                                on auction day.
Payment Terms................  By charge to a funds account at a Federal
                                Reserve Bank on issue date, or payment
                                of full par amount with tender. Treasury
                                Direct customers can use the Pay Direct
                                feature which authorizes a charge to
                                their account of record at their
                                financial institution on issue date.

                  II. Treasury Weekly Bill Announcement

Embargoed Until 2:30 p.m. April 15, 20XX
Contact: Office of Financing, 202/XXX-XXXX

                Treasury Offers 13-Week and 26-Week Bills

    The Treasury will auction two series of Treasury bills totaling 
approximately $16,000 million, to refund $13,469 million of publicly 
held securities maturing November 19, 1998 and to raise about $2,531 
million of new cash.
    In addition to the public holdings, Federal Reserve Banks for their 
own accounts hold $7,442 million of the maturing bills, which may be 
refunded at the highest discount rate of accepted competitive tenders. 
Amounts issued to these accounts will be in addition to the offering 
amount.
    The maturing bills held by the public include $1,991 million held by 
Federal Reserve Banks as agents for foreign and international monetary 
authorities, which may be refunded within the offering amount at the 
highest discount rate of accepted competitive tenders. Additional 
amounts may be issued for such accounts if the aggregate amount of new 
bids exceeds the aggregate amount of maturing bills.
    The 13- and 26-week bill auctions will be conducted in the single-
price auction format.
    Tenders for the bills will be received at Federal Reserve Banks and 
Branches and at the Bureau of the Public Debt, Washington, D.C. This 
offering of Treasury securities is governed by the terms and conditions 
set forth in the Uniform Offering Circular for the Sale and Issue of 
Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR Part 356, 
as amended).
    Details about each of the new securities are given in the attached 
offering highlights.

Attachment

                      Highlights of Treasury Offerings of Bills To be Issued April 24, 20XX
----------------------------------------------------------------------------------------------------------------
 
Offering Amount..................  $8,000 million...............................  $8,000 million.
Description of Offering:
    Term and type of security....  91-day bill..................................  182-day bill.
    CUSIP number.................  912795 XX X..................................  912795 XX X.
    Auction date.................  April 21, 20XX...............................  April 21, 20XX.
    Issue date...................  April 24, 20XX...............................  April 24, 20XX.
    Maturity date................  July 24, 20XX................................  October 23, 20XX.
    Original issue date..........  July 25, 20XX................................  April 24, 20XX.
    Currently outstanding........  $31,725 million..............................  ..............................

[[Page 388]]

 
    Minimum bid amount and         $1,000.......................................  $1,000
     multiples.
----------------------------------------------------------------------------------------------------------------


The following rules apply to all
 securities mentioned above:
 
Submission of Bids:
    Noncompetitive bids............  Accepted in full up to $1,000,000
                                      at the highest discount rate of
                                      accepted competitive bids.
    Competitive bids...............  (1) Must be expressed as a discount
                                      rate with three decimals in
                                      increments of .005%, e.g., 7.100%,
                                      7.105%.
                                      (2) Net long position for each
                                      bidder must be reported when the
                                      sum of the total bid amount, at
                                      all discount rates, and the net
                                      long position is $1 billion or
                                      greater.
                                      (3) Net long position must be
                                      determined as of one half-hour
                                      prior to the closing time for
                                      receipt of competitive tenders.
Maximum Recognized Bid at a Single   35% of public offering.
 Yield.
Maximum Award:                       35% of public offering.
Receipt of Tenders:
    Noncompetitive tenders.........  Prior to 12:00 noon Eastern
                                      Daylight Saving time on auction
                                      day
    Competitive tenders............  Prior to 1:00 p.m. Eastern Daylight
                                      Saving time on auction day
Payment Terms......................  By charge to a funds account at a
                                      Federal Reserve Bank on issue
                                      date, or payment of full par
                                      amount with tender. Treasury
                                      Direct customers can use the Pay
                                      Direct feature which authorizes a
                                      charge to their account of record
                                      at their financial institution on
                                      issue date.

             III. Treasury Cash Management Bill Announcement

Embargoed until 2:30 p.m. February 25, 20XX
Contact: Office of Financing 202/XXX-XXXX

                Treasury to Auction Cash Management Bills

    The Treasury will auction approximately $23,000 million of 45-day 
Treasury cash management bills to be issued March 3, 20XX.
    Competitive and noncompetitive tenders will be received at all 
Federal Reserve Banks and Branches. Tenders will not be accepted for 
bills to be maintained on the book-entry records of the Department of 
the Treasury (Treasury Direct). Tenders will not be received at the 
Bureau of the Public Debt, Washington, D.C.
    Additional amounts of the bills may be issued to Federal Reserve 
Banks as agents for foreign and international monetary authorities at 
the highest discount rate of accepted competitive tenders.
    The 45-day cash management bill will be conducted in the single-
price auction format. All competitive and noncompetitive awards will be 
at the highest discount rate of accepted competitive tenders.
    This offering of Treasury securities is governed by the terms and 
conditions set forth in the Uniform Offering Circular for the Sale and 
Issue of Marketable Book-Entry Treasury Bills, Notes, and Bonds (31 CFR 
Part 356, as amended).

    Note: Competitive bids in cash management bill auctions must be 
expressed as a discount rate with two decimals, e.g., 7.10%.

    Details about the new security are given in the attached offering 
highlights.

Attachment

     Highlights of Treasury Offering of 45-Day Cash Management Bill
------------------------------------------------------------------------
 
Offering Amount..............  $23,000 million.
Description of Offering:
    Term and type of security  45-day Cash Management Bill.
    CUSIP number.............  912795 XX X.
    Auction date.............  February 27, 20XX.
    Issue date...............  March 3, 20XX.
    Maturity date............  April 17, 20XX.

[[Page 389]]

 
    Original issue date......  October 17, 20XX.
    Currently outstanding....  $24,724 million.
    Minimum bid amount and     $1,000.
     multiples.
Submission of Bids:
    Noncompetitive bids......  Accepted in full up to $1,000,000 at the
                                highest accepted discount rate.
    Competitive bids.........  (1) Must be expressed as a discount rate
                                with two decimals in increments of .01%,
                                e.g., 7.12%.
                               (2) Net long position for each bidder
                                must be reported when the sum of the
                                total bid amount, at all discount rates,
                                and the net long position is $1 billion
                                or greater.
                               (3) Net long position must be determined
                                as of one half-hour prior to the closing
                                time for receipt of competitive tenders.
Maximum Recognized Bid at a    35% of public offering.
 Single Yield.
Maximum Award................  35% of public offering.
Receipt of Tenders:
    Noncompetitive tenders...  Prior to 11:00 a.m. Eastern Standard time
                                on auction day.
    Competitive tenders......  Prior to 11:30 a.m. Eastern Standard time
                                on auction day.
Payment Terms................  By charge to a funds account at a Federal
                                Reserve Bank on issue date, or payment
                                of full par amount with tender.
------------------------------------------------------------------------

            IV. Treasury Inflation-Indexed Note Announcement

Embargoed Until 2:30 P.M., October 2, 20XX
CONTACT: Office of Financing, 202/219-3350

  Treasury to Auction $5,500 Million of 10-Year Inflation-Indexed Notes

    The Treasury will auction $5,500 million of 10-year inflation-
indexed notes to raise cash. In addition, there is $7,906 million of 
publicly-held securities maturing October 15, 20XX.
    In addition to the public holdings, Federal Reserve Banks hold $327 
million of the maturing securities for their own accounts, which may be 
exchanged for additional amounts of the new securities.
    The maturing securities held by the public include $584 million held 
by Federal Reserve Banks as agents for foreign and international 
monetary authorities. Amounts bid for these accounts by Federal Reserve 
Banks will be added to the offering.
    The auction will be conducted in the single-price auction format. 
All competitive and noncompetitive awards will be at the highest yield 
of accepted competitive tenders.
    Tenders will be received at Federal Reserve Banks and Branches and 
at the Bureau of the Public Debt, Washington, D.C. This offering of 
Treasury securities is governed by the terms and conditions set forth in 
the Uniform Offering Circular (31 CFR part 356) for the sale and issue 
by the Treasury to the public of marketable Treasury bills, notes, and 
bonds.
    Details about the new security are given in the attached offering 
highlights.

   Highlights of Treasury Offering to the Public of 10-Year Inflation-
               Indexed Notes to be Issued October 15, 20XX

    October 2, 20XX
    Offering Amount: $5,500 million.
    Description of Offering:

Term and type of security: 10-year inflation-indexed notes
Series--D-20XX
CUSIP number--912XXX XX X
Auction date--October 9, 20XX
Issue date--October 15, 20XX
Dated date--October 15, 20XX
Maturity date--October 15, 20XX
Interest Rate--Determined based on the highest accepted bid
Real yield--Determined at auction
    Interest payment dates: April 15 and October 15.

Minimum bid amount--$1,000
Multiples--$1,000
    Accrued interest payable by investor: None.
    Premium or discount: Determined at auction.

    STRIPS Information:

Minimum amount required--Determined at auction
Corpus CUSIP number--912XXX XX X
    STRIPS Information:
    Due dates and CUSIP numbers for additional TINTs: 912XXX.
April 15, 20XX--XX X
October 15, 20XX--XX X
April 15, 20XX--XX X
October 15, 20XX--XX X
April 15, 20XX--XX X
October 15, 20XX--XX X
April 15, 20XX--XX X
October 15, 20XX--XX X

[[Page 390]]

April 15, 20XX--XX X
October 15, 20XX--XX X
April 15, 20XX--XX X
October 15, 20XX--XX X
April 15, 20XX--XX X
October 15, 20XX--XX X
April 15, 20XX--XX X
October 15, 20XX--XX X
April 15, 20XX--XX X
October 15, 20XX--XX X
April 15, 20XX--XX X
October 15, 20XX--XX X

    Submission of Bids:

Noncompetitive bids:--Will be accepted in full up to $5,000,000 at the 
          highest accepted yield.
Competitive bids:
(1) Must be expressed as a real yield with three decimals, e.g., 3.120%.
(2) Net long position for each bidder must be reported when the sum of 
          the total bid amount, at all yields, and the net long position 
          is $------ billion or greater.
(3) Net long position must be determined as of one half-hour prior to 
          the closing time for receipt of competitive tenders.
    Maximum Recognized Bid at a Single Yield--35% of public offering.
    Maximum Award--35% of public offering.
    Receipt of Tenders:

Noncompetitive tenders: Prior to 12:00 noon Eastern Daylight Saving time 
          on auction day.
Competitive tenders: Prior to 1:00 p.m. Eastern Daylight Saving time on 
          auction day.
    Payment Terms: Full payment with tender or by charge to a funds 
account at a Federal Reserve Bank on issue date.
    Indexing Information:
CPI Base Reference Period:--19XX-XX
Ref CPI 10/15/20XX:--XXX.XXXXX

[58 FR 414, Jan. 5, 1993, as amended at 62 FR 873, Jan. 6, 1997; 62 FR 
43094, Aug. 12, 1997; 64 FR 3634, Jan. 25, 1999]

Exhibit B to Part 356--Sample Autocharge Agreement To Deliver and Charge 
for Securities Awarded in Department of the Treasury Auctions (Submitter 
                       and Depository Institution)

Federal Reserve Bank of ----------------
Attention: (Name of Fiscal Officer)
(Address)
(Address)

    To Whom It May Concern:
    I. The depository institution (``DI'') and the submitting entity 
(``Submitter''), as identified below, agree that
    (a) The Submitter is authorized to submit tenders to the Federal 
Reserve Bank of ------------ (``Bank'');
    (b) The Bank is authorized to deliver, as provided herein, Treasury 
securities awarded to the Submitter through the auction process;
    (c) The Bank, or other Federal Reserve Bank identified in Section II 
below, is authorized to charge the DI's funds account for payment of 
awarded securities that are delivered by the Bank hereunder. Such charge 
is to be made at the same time the securities are delivered;
    (d) The Submitter [  ] is, [  ] is not authorized to submit TREASURY 
DIRECT tenders. Where such tenders are authorized, the Bank is 
instructed to deliver awarded securities to the TREASURY DIRECT Book-
Entry System and charge the DI's funds account for the securities 
delivered; and
    (e) The Bank [  ] is, [  ] is not authorized to deliver the awarded 
securities to the DI's securities account at a Federal Reserve Bank 
other than the Bank.

The above authorizations apply to:
    [  ] bills
    [  ] notes
    [  ] bonds
    II. For securities to be delivered to a Federal Reserve Bank other 
than the Bank receiving the tender, the Submitter must complete the 
following:
    Awarded securities are to be delivered hereunder by the Bank to the 
DI's securities account at the Federal Reserve Bank of ------------.
    III. The following wire instructions are to be used by the Bank to 
deliver securities to the DI:
    Wire Instructions: ----------------.
    IV. General Provisions.
    This agreement is effective on the date it is received by the Bank, 
although the Bank normally will not act under the agreement until it has 
acknowledged receipt of such.
    The Submitter hereunder is the entity submitting bids to a Bank for 
its own account or for the account of others. The Submitter is 
responsible to the Treasury for full payment of all securities awarded, 
including any securities awarded under customer bids submitted by the 
Submitter.
    Any Federal Reserve Bank identified herein is authorized to act on 
information in any tender in the name of the Submitter that reasonably 
appears to be valid and genuine. The DI, by executing this agreement, 
guarantees the authority and signature of the person signing this 
agreement on behalf of the Submitter.
    This agreement will remain in effect until written notice is 
received by the Bank from either the DI or the Submitter that the 
agreement has been terminated, provided that if securities are scheduled 
to be delivered hereunder, such notice must be received in accordance 
with the termination procedures hereafter described.

[[Page 391]]

    As to termination action by the DI, notice of termination will not 
be effective unless received in writing by a Fiscal/Securities 
Department officer by the later of (i) 5 p.m. (the Bank's time) on the 
business day prior to the issue date of the securities scheduled to be 
delivered hereunder or (ii) if the submitter has authorized the Bank to 
advise the DI of securities to be delivered, two hours after such advice 
is sent by the Bank. Such termination action by the DI shall not affect 
the Submitter's responsibility to make full payment for the securities 
awarded. A DI may, at any time, waive in writing its right to terminate 
hereunder.
    As to termination action by the Submitter after an auction but prior 
to delivery of awarded securities, the written notice of termination 
will not be effective, and this agreement shall remain in full force and 
effect, unless the Submitter has provided to the Bank, and the latter 
has acknowledged, a new autocharge agreement executed by a DI having a 
funds account at a Federal Reserve Bank.
    Written notices to be sent hereunder in connection with the 
termination of this autocharge agreement shall be sent by either the 
Submitter or the DI to the Bank authorized to receive tenders hereunder.
    In the event that this autocharge agreement is terminated, it is the 
sole responsibility of the party terminating the agreement to notify the 
other party hereto.

AGREED TO BY____________________________________________________________
(Full DI Name and ABA )
Signature:______________________________________________________________
Name:___________________________________________________________________
Title:__________________________________________________________________
Date:___________________________________________________________________

AGREED TO BY____________________________________________________________
(Full name of Submitter)
Signature:______________________________________________________________
Name:___________________________________________________________________
Title:__________________________________________________________________
Date:___________________________________________________________________

ACKNOWLEDGED BY: Federal Reserve Bank of________________________________
    (``Bank''):

Signature:______________________________________________________________
Name:___________________________________________________________________
Title:__________________________________________________________________
Date:___________________________________________________________________
    DI'S SIGNATURE AND WIRE INSTRUCTIONS VERIFIED BY:

(For use only by Federal Reserve Bank named in Section II above)

Signature:______________________________________________________________
Name:___________________________________________________________________
Title:__________________________________________________________________
Date:___________________________________________________________________
Federal Reserve Bank of_________________________________________________

          Instructions for Completing the Autocharge Agreement

    1. DEPOSITORY INSTITUTION: This is the DI whose funds account at a 
Federal Reserve Bank will be debited, under this autocharge agreement, 
for the price of Treasury securities awarded at auction to the 
Submitter. Also, this DI must have a book-entry securities account at 
the Federal Reserve Bank to which securities will be delivered against 
payment on settlement day pursuant to the autocharge agreement and the 
Submitter's tender submission.
    2. SUBMITTER: The Submitter must identify the full name of the 
entity that is submitting bids under this autocharge agreement. The name 
shown on the autocharge agreement should be the same as that appearing 
on related tender forms.
    3. BANK: This is the Federal Reserve Bank to which the Submitter 
will be submitting tenders in Treasury auctions.
    4. SIGNATURE FOR DI: This is the signature of an officer of the DI 
having authority to enter into or terminate this autocharge agreement, 
and whose signature is on file at the Federal Reserve Bank where the DI 
has a funds account.
    5. SIGNATURE FOR SUBMITTER: This is the signature of an officer of 
the Submitter having authority to enter into or terminate the autocharge 
agreement.
    6. SIGNATURE FOR BANK: This is the signature of an officer of the 
Bank having authority to acknowledge this autocharge agreement.



PART 357--REGULATIONS GOVERNING BOOK-ENTRY TREASURY BONDS, NOTES AND BILLS (DEPARTMENT OF THE TREASURY CIRCULAR, PUBLIC DEBT SERIES NO. 2-86)--Table of Contents




                     Subpart A--General Information

Sec.
357.0  Dual book-entry systems.
357.1  Effective date.
357.2  Definitions.

    Subpart B--Treasury/Reserve Automated Debt Entry System (TRADES)

357.10  Laws governing a Treasury book-entry security, TRADES, and 
          security interests or entitlements.
357.11  Laws governing other interests in Treasury securities.
357.12  A Participant's Security Entitlement.
357.13  Obligations of the United States and the Federal Reserve Banks 
          with respect to Book-entry Securities and security interests.

[[Page 392]]

357.14  What authority does a Federal Reserve Bank have?
357.15  How can a debtor's interest in a Security Entitlement be reached 
          by creditors?

   Subpart C--TREASURY DIRECT Book-Entry Securities System (TREASURY 
                                 DIRECT)

357.20  Securities account in TREASURY DIRECT.
357.21  Registration.
357.22  Transfers.
357.23  Judicial proceedings--sovereign immunity.
357.24  Availability and disclosure of TREASURY DIRECT records.
357.25  Security interests.
357.26  Direct Deposit.
357.27  Reinvestment.
357.28  Transaction requests.
357.29  Time required for processing transaction request.
357.30  Cases of delay or suspension of payment.
357.31  Certifying individuals.
357.32  Submission of transaction requests; further information.

                    Subpart D--Additional Provisions

357.40  Additional requirements.
357.41  Waiver of regulations.
357.42  Liability of Department and Federal Reserve Banks.
357.43  Liability for transfers to and from TREASURY DIRECT.
357.44  [Reserved]
357.45  Supplements, amendments, or revisions.

Appendix A to Part 357--Discussion of Final Rule
Appendix B to Part 357--TRADES Commentary

    Authority: 31 U.S.C. chapter 31; 5 U.S.C. 301; 12 U.S.C. 391.

    Source: 51 FR 18265, May 16, 1986, unless otherwise noted.



                     Subpart A--General Information



Sec. 357.0  Dual book-entry systems.

    (a) Treasury securities shall be maintained in either of the 
following two book-entry systems:
    (1) Treasury/Reserve Automated Debt Entry System (TRADES). A 
Treasury security is maintained in TRADES if it is credited by a Federal 
Reserve Bank to a Participant's Securities Account. See subpart B of 
this part for rules pertaining to TRADES.
    (2) TREASURY DIRECT Book-entry Securities System (TREASURY DIRECT). 
A Treasury security is maintained in TREASURY DIRECT if it is credited 
to a TREASURY DIRECT account as described in Sec. 357.20. Such accounts 
may be accessed by investors in accordance with subpart C of this part 
through any Federal Reserve Bank or the Bureau of the Public Debt. See 
subpart C of this part for rules pertaining to TREASURY DIRECT.
    (b) A Treasury security eligible to be maintained in TREASURY DIRECT 
under the terms of its offering circular or pursuant to notice published 
by the Secretary may be transferred to or from an account in TRADES from 
or to an account in TREASURY DIRECT in accordance with Sec. 357.22(a).

[61 FR 43628, Aug. 23, 1996]



Sec. 357.1  Effective date.

    Subpart B of this part, the definitions of Adverse Claim, Book-entry 
Security, Entitlement Holder, Federal Reserve Bank Operating Circular, 
Funds Account, Issue, Participant, Participant's Securities Account, 
Person, Revised Article 8, Securities Intermediary, Security 
Entitlement, State, and Transfer Message and revisions to the 
definitions of Security and TRADES, and Secs. 357.42 and 357.44 and the 
revisions to Sec. 357.41 are effective January 1, 1997. All other 
provisions in effect prior to January 1, 1997, remain in effect.

[61 FR 43628, Aug. 23, 1996]



Sec. 357.2  Definitions.

    In this part, unless the context indicates otherwise:
    Adverse Claim means a claim that a claimant has a property interest 
in a Security and that it is a violation of the rights of the claimant 
for another Person to hold, transfer, or deal with the Security.
    Bill means an obligation of the United States, with a term of not 
more than one year, issued at a discount, under chapter 31 of title 31 
of the United States Code, in book-entry form.
    Bond means an obligation of the United States, with a term of more 
than ten years, issued under chapter 31 of title 31 of the United States 
Code, in book-entry form.

[[Page 393]]

    Book-entry Security means, in subpart B of this part, a Treasury 
Security maintained in TRADES and, in subpart C of this part, a Treasury 
Security maintained in TREASURY DIRECT.
    Business day means any day other than a Saturday, Sunday, or other 
day on which the Federal Reserve Banks are not open for business.
    Department means the United States Department of the Treasury, and, 
where appropriate, the Federal Reserve Banks acting as fiscal agents of 
the United States.
    Depository institution means an entity described in section 
19(b)(1)(A)(i)-(vi) of the Federal Reserve Act (12 U.S.C. 
461(b)(1)(A)(i)-(vi). Under section 19(b) of the Federal Reserve Act, 
the term depository institution includes:
    (1) Any insured bank as defined in 12 U.S.C. 1813 or any bank which 
is eligible to make application to become an insured bank under 12 
U.S.C. 1815;
    (2) Any mutual savings bank as defined in 12 U.S.C. 1813 or any bank 
which is eligible to make application to become an insured bank under 12 
U.S.C. 1815;
    (3) Any savings bank as defined in 12 U.S.C. 1813 or any bank which 
is eligible to make application to become an insured bank under 12 
U.S.C. 1815;
    (4) Any insured credit union as defined in 12 U.S.C. 1752 or any 
credit union which is eligible to make application to become an insured 
credit union under 12 U.S.C. 1781;
    (5) Any member as defined in 12 U.S.C. 1422; and
    (6) Any savings association (as defined in 12 U.S.C. 1813) which is 
an insured depository institution, as defined in the Federal Deposit 
Insurance Act, 12 U.S.C. 1811, et seq., or is eligible to apply to 
become an insured depository institution under such Act.
    Entitlement Holder means a Person to whose account an interest in a 
Book-entry Security is credited on the records of a Securities 
Intermediary.
    Federal Reserve Bank or Reserve Bank means a Federal Reserve Bank or 
Branch.
    Federal Reserve Bank Operating Circular means the publication issued 
by each Federal Reserve Bank that sets forth the terms and conditions 
under which the Reserve Bank maintains Book-entry Securities accounts 
and transfers Book-entry Securities.
    Financial institution means, for purposes of direct deposit, an 
institution which has agreed to receive credit payments under 31 CFR 
part 210, as amended from time to time, and has not withdrawn its 
participation in a direct deposit program under part 210, or an 
institution which is willing to agree to receive credit payments under 
31 CFR part 210 and has enrolled with its Federal Reserve Bank.
    Funds Account means a reserve and/or clearing account at a Federal 
Reserve Bank to which debits or credits are posted for transfers against 
payment, book-entry securities transaction fees, or principal and 
interest payments.
    Incompetent means an individual who is legally, medically or 
mentally incapable of handling his or her business affairs, except that 
a minor is not an incompetent solely because of age.
    Issue means a group of securities, as defined in this section, that 
is identified by the same CUSIP (Committee on Uniform Securities 
Identification Practices) number.
    Maturity value is the amount that the Department is obligated to pay 
when a security matures.
    Minor means an individual who is under the age of majority, as 
determined by applicable state law.
    Note means an obligation of the United States, with a term of at 
least one year, but of not more than ten years, issued under chapter 31 
of title 31 of the United States Code, in book-entry form.
    Original issue means the offering by the Department of the Treasury 
of a marketable Treasury security to the public and its issuance in 
book-entry accounts maintained either directly by the Treasury or held 
through a Federal Reserve Bank.
    Owner, as used in subpart C, means the individual(s) or entity in 
whose name a security is registered. If a security is registered in more 
than one name, the term owner incudes all those whose names appear on 
the registration and are authorized by this Part to make a transaction 
request on a security held in TREASURY DIRECT.

[[Page 394]]

    Participant means a Person that maintains a Participant's Securities 
Account with a Federal Reserve Bank.
    Participant's Securities Account means an account in the name of a 
Participant at a Federal Reserve Bank to which Book-entry Securities 
held for a Participant are or may be credited.
    Person means and includes an individual, corporation, company, 
governmental entity, association, firm, partnership, trust, estate, 
representative and any other similar organization, but does not mean or 
include the United States or a Federal Reserve Bank.
    Redemption means payment of a security at maturity, or pursuant to a 
call for redumption in accordance with the terms of a security.
    Representative includes an executor, administrator, legal guardian, 
committee, conservator, and any similar person or entity appointed by a 
court to represent the estate of a decedent, minor, or incompetent, as 
well as a trustee, whether appointed by a court or otherwise.
    Revised Article 8 means Uniform Commercial Code, Revised Article 8, 
Investment Securities (with Conforming and Miscellaneous Amendments to 
Articles 1, 3, 4, 5, 9 and 10) 1994 Official Text. The Director of the 
Federal Register approves the incorporation by reference of Revised 
Article 8 of the Uniform Commercial Code in this part, pursuant to 5 
U.S.C. 552(a) and 1 CFR part 51. Revised Article 8 was adopted by the 
American Law Institute and the National Conference of Commissioners On 
Uniform State Laws and approved by the American Bar Association on 
February 14, 1995. Copies of Revised Article 8 are available from the 
Executive Office of the American Law Institute, 4025 Chestnut Street, 
Philadelphia, PA 19104, and the National Conference of Commissioners on 
Uniform State Laws, 211 East Ontario Street, Suite 1300, Chicago, IL 
60611. Copies are also available for public inspection at the Department 
of the Treasury Library, Room 1428, Main Treasury Building, 1500 
Pennsylvania Avenue, NW, Washington, DC 20220, and at the Office of the 
Federal Register, 800 North Capitol Street, NW, Suite 700, Washington, 
DC.
    Revised Article 9 means Uniform Commercial Code, Revised Article 9, 
Secured Transactions (with conforming amendments to Articles 1, 2, 2A, 
4, 5, 6, 7, and 8), 1999 official text. The Director of the Federal 
Register approves the incorporation by reference of Revised Article 9 of 
the Uniform Commercial Code in this part, pursuant to 5 U.S.C. 552(a) 
and 1 CFR part 51. Revised Article 9 was approved by the American Law 
Institute and the National Conference of Commissioners On Uniform State 
Laws in 1998. Copies of Revised Article 9 are available from the 
Executive Office of the American Law Institute, 4025 Chestnut Street, 
Philadelphia, PA 19104, and the National Conference of Commissioners on 
Uniform State Laws, 211 East Ontario Street, Suite 1300, Chicago, IL 
60611. Copies are also available for public inspection at the Department 
of the Treasury Library, Room 1428, Main Treasury Building, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220, and at the Office of the 
Federal Register, 800 North Capitol Street, NW., Suite 700, Washington, 
DC.
    Securities Intermediary means:
    (1) A Person that is registered as a ``clearing agency'' under the 
federal securities laws; a Federal Reserve Bank; any other person that 
provides clearance or settlement services with respect to a Book-entry 
Security that would require it to register as a clearing agency under 
the federal securities laws but for an exclusion or exemption from the 
registration requirement, if its activities as a clearing corporation, 
including promulgation of rules, are subject to regulation by a federal 
or state governmental authority; or
    (2) A Person (other than an individual, unless such individual is 
registered as a broker or dealer under the federal securities laws) 
including a bank or broker, that in the ordinary course of its business 
maintains securities accounts for others and is acting in that capacity.
    Security means a bill, note, or bond, each as defined in this 
section. It also means any other obligation issued by the Department 
that, by the terms of the applicable offering circular or announcement, 
is made subject to this part. Solely for purposes of this part, it also 
means:

[[Page 395]]

    (1) The interest and principal components of a security eligible for 
Separate Trading of Registered Interest and Principal of Securities 
(``STRIPS''), if such security has been divided into such components as 
authorized by the express terms of the offering circular under which the 
security was issued and the components are maintained separately on the 
books of one or more Federal Reserve Banks; and
    (2) The interest coupons that have been converted to book-entry form 
under the Treasury's Coupons Under Book-Entry Safekeeping Program 
(``CUBES''), pursuant to agreement and the regulations in 31 CFR part 
358.
    Security Entitlement means the rights and property interest of an 
Entitlement Holder with respect to a Book-entry Security.
    Signature guarantee program means a signature guarantee program 
established in response to Rule 17 Ad-15 (17 CFR 240.17Ad-15), issued 
under authority of the Securities Exchange Act of 1934. For the purpose 
of the regulations in this part, the Securities Transfer Agents 
Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP), 
and the New York Stock Exchange, Inc. Medallion Signature Program (MSP) 
are recognized by Treasury as such signature guarantee programs.
    State means any State of the United States, the District of 
Columbia, Puerto Rico, the Virgin Islands, or any other territory or 
possession of the United States.
    Taxpayer identifying number or TIN means a social security account 
number or an employer identification number, as appropriate.
    TRADES is the Treasury/Reserve Automated Debt Entry System, also 
referred to as the commercial book-entry system.
    Transaction request means a request to effect a change in an account 
master record or securities portfolio maintained in TREASURY DIRECT.
    Transaction request form means a form or series of forms prescribed 
for use by the Department to request a transaction in TREASURY DIRECT. 
(This term includes a document that the Department has determined 
contains all of the elements required by the transaction request form.)
    Transfer Message means an instruction of a Participant to a Federal 
Reserve Bank to effect a transfer of a Book-entry Security maintained in 
TRADES, as set forth in Federal Reserve Bank Operating Circulars.
    TREASURY DIRECT is the TREASURY DIRECT Book-Entry Securities System.

[51 FR 18265, May 16, 1986, as amended at 59 FR 59038, Nov. 15, 1994. 
Redesignated and amended at 61 FR 43628, Aug. 23, 1996; 62 FR 18694, 
Apr. 16, 1997; 62 FR 33548, June 20, 1997; 67 FR 7079, Feb. 15, 2002]



    Subpart B--Treasury/Reserve Automated Debt Entry System (TRADES)

    Source: 67 FR 7080, Feb. 15, 2002, unless otherwise noted.



Sec. 357.10  Laws governing a Treasury book-entry security, TRADES, and security interests or entitlements.

    (a) What law governs the rights and obligations of the United States 
and the Federal Reserve Banks; and the rights of any Person against the 
United States and the Federal Reserve Banks? Except as we provide in 
paragraph (b) of this section, the following are governed solely by 
Treasury regulations, including the regulations of this part, the 
applicable offering circular (which is 31 CFR part 356, in the case of 
securities issued on and after March 1, 1993), the announcement of the 
offering, and Federal Reserve Bank Operating Circulars:
    (1) The rights and obligations of the United States and the Federal 
Reserve Banks with respect to a Book-entry Security or Security 
Entitlement and the operation of TRADES, and
    (2) The rights of any Person, including a Participant, against the 
United States and the Federal Reserve Banks with respect to a Book-entry 
Security or Security Entitlement and the operation of TRADES.
    (b) What law governs security interests in Security Entitlements 
that are not recorded on a Federal Reserve Bank's books? See the 
following table:

[[Page 396]]



------------------------------------------------------------------------
 If a security interest in a                         Then it is governed
  security entitlement is--        And it is--              by--
------------------------------------------------------------------------
(1) in favor of a Federal     not recorded on the   the law (not
 Reserve Bank from a           books of a Federal    including the
 Participant.                  Reserve Bank          conflict-of-law
                               pursuant to Sec.      rules) of the
                               357.12(e)(2).         jurisdiction where
                                                     the head office of
                                                     the Federal Reserve
                                                     Bank maintaining
                                                     the Participant's
                                                     Securities Account
                                                     is located.
(2) in favor of a Federal     not recorded on the   the law determined
 Reserve Bank from a Person    books of a Federal    in the manner
 that is not a Participant.    Reserve Bank          specified in Sec.
                               pursuant to Sec.      357.11.
                               357.12(e)(2).
------------------------------------------------------------------------

    (c) What law governs if the jurisdiction in paragraph (b)(1) of this 
section did not adopt Revised Article 8, or Revised Article 8 as amended 
by Revised Article 9 (both incorporated by reference, see Sec. 357.2)? 
The law specified in paragraph (b)(1) of this section shall be the law 
of that State as though that State adopted Revised Article 8.



Sec. 357.11  Laws governing other interests in Treasury securities.

    (a) What does the law (not including the conflict-of-law rules) of a 
Securities Intermediary's jurisdiction govern? To the extent not 
inconsistent with these regulations, the law (not including the 
conflict-of-law rules) of a Security Intermediary's jurisdiction governs 
the following:
    (1) When a Person acquires a Security Entitlement from the 
Securities Intermediary;
    (2) The rights and duties of the Securities Intermediary and 
Entitlement Holder that arise out of a Security Entitlement;
    (3) Whether the Securities Intermediary owes any duties to an 
adverse claimant to a Security Entitlement;
    (4) Whether a Person may assert an Adverse Claim against a Person 
who acquires a Security Entitlement from the Securities Intermediary or 
against a Person who purchases a Security Entitlement or interest 
therein from an Entitlement Holder; and
    (5) The perfection, effect of perfection or non-perfection and 
priority of a security interest in a Security Entitlement (except as 
otherwise provided in paragraph (c) of this section).
    (b) What is the ``Securities Intermediary's jurisdiction'' for 
purposes of this section? See the following table:

------------------------------------------------------------------------
                                                    Then the securities
                     If . . .                         intermediary's
                                                   jurisdiction is . . .
------------------------------------------------------------------------
(1) An agreement between the Securities           the jurisdiction
 Intermediary and its Entitlement Holder           agreed upon.
 governing the securities account expressly
 provides that a particular jurisdiction is the
 Securities Intermediary's jurisdiction for
 purposes of Part 1 of Article 8 of the Uniform
 Commercial Code, Article 8 of the Uniform
 Commercial Code, or the Uniform Commercial Code.
(2) An agreement between the Securities           the jurisdiction
 Intermediary and its Entitlement Holder           agreed upon.
 governing the securities account expressly
 provides that it is governed by the law of a
 particular jurisdiction.
(3) The statements in paragraphs (b)(1) and (2)   the jurisdiction where
 of this table do not apply, but the agreement     the office is
 expressly specifies that the securities account   located.
 is maintained at an office in a particular
 jurisdiction.
(4) The statements in paragraphs (b)(1) through   the jurisdiction where
 (3) of this table do not apply and an account     the office is
 statement identifies the office serving the       located.
 Entitlement Holder's account.
(5) None of the statements in paragraphs (b)(1)   the jurisdiction in
 through (4) of this table apply.                  which the chief
                                                   executive office of
                                                   the Securities
                                                   Intermediary is
                                                   located.
------------------------------------------------------------------------

    (c) What law governs the perfection of a security interest 
automatically or by filing? The law (but not the conflict-of-law rules) 
of the jurisdiction in which the Person creating a security interest is 
located governs whether and how the security interest may be perfected 
automatically or by filing a financing statement. (This is despite the 
general rule in (a)(5) of this section).
    (d) Where is a Person located, for purposes of paragraph (c) of this 
section? A Person's location is determined under state law, including 
Revised Article 9

[[Page 397]]

(incorporated by reference, see Sec. 357.2), as it may be amended from 
time to time.
    (e) What law governs if the jurisdiction in table (b) of this 
section did not adopt Revised Article 8 or Revised Article 8 as amended 
by Revised Article 9 (both incorporated by reference, see Sec. 357.2)? 
The law for the matters specified in paragraph (a) of this section shall 
be the law of that State as though the State adopted Revised Article 8.
    (f) What other rules apply? For purposes of the matters specified in 
paragraph (a) of this section, the Federal Reserve Bank maintaining the 
Securities Account is a clearing corporation and the Participant's 
interest in a Book-entry Security is a Security Entitlement.



Sec. 357.12  A Participant's Security Entitlement.

    (a) How is a Participant's Security Entitlement created? A Federal 
Reserve Bank indicates by book entry that a Book-entry Security has been 
credited to a Participant's Securities Account.
    (b) What else do I need to know about a Participant's Security 
Entitlement? See the following table:

------------------------------------------------------------------------
If a security interest in a security entitlement
             of a participant . . .                     Then . . .
------------------------------------------------------------------------
(1) Meets all of the following criteria:
    (i) is in favor of the United States          it is created; it is
    (ii) is marked on the books of a Federal       perfected; and it has
     Reserve Bank.                                 priority over any
    (iii) is to secure deposits of public money    other interest in the
     (including without limitation deposits to     securities.
     the Treasury tax and loan accounts, or
     other security interested required by
     Federal statute, regulation, or agreement).
------------------------------------------------------------------------

    (c) What is the effect of the marking of a security interest in 
favor of the United States in a Security Entitlement of a Participant on 
the books of a Federal Reserve Bank? Where a security interest in favor 
of the United States in a Security Entitlement of a Participant is 
marked on the books of a Federal Reserve Bank, such Reserve Bank may 
rely, and is protected in relying, exclusively on the order of an 
authorized Representative of the United States directing the transfer of 
the Security.
    (d) Who is an authorized Representative of the United States, for 
purposes of paragraph (c) in this section? The official designated in 
the applicable regulations or in an agreement to which a Federal Reserve 
Bank is a party, governing the security interest.
    (e)(1) Must the United States and the Federal Reserve Banks agree to 
act on behalf of any Person or to recognize the interest of any 
transferee of a security interest or other limited interest in favor of 
any Person? No, they need not agree to act or recognize any party's 
interest, except:
    (i) To the extent of any specific requirement of Federal law or 
regulation, or
    (ii) To the extent set forth in any specific agreement with the 
Federal Reserve Bank on whose books the interest of the Participant is 
recorded.
    (2) May a security interest be created and perfected by a Federal 
Reserve Bank marking its books? Yes, a security interest in a Security 
Entitlement that is in favor of a Federal Reserve Bank or a Person may 
be created and perfected by a Federal Reserve Bank marking its books to 
record the security interest to the extent required by law, regulation, 
or an agreement with a Federal Reserve Bank or the Federal Reserve Bank 
Operating Circular.
    (3) Does this security interest have priority over other interests? 
A security interest in a Security Entitlement marked on the books of a 
Federal Reserve Bank has priority over any other interest in the 
securities, except a security in favor of the United States, as provided 
in table (b) of this section.
    (4) In addition to the method provided in paragraph (e)(2) of this 
section, may a security interest, including a security interest in favor 
of a Federal Reserve Bank, be perfected in another way? Yes, a security 
interest may be perfected by any method under applicable law as 
described in Sec. 357.10(b) or Sec. 357.11.
    (i) The applicable law governs the perfection, effect of perfection 
or non-perfection and priority of a security interest.

[[Page 398]]

    (ii) A security interest in favor of a Federal Reserve Bank shall be 
treated as a security interest in favor of a clearing corporation in all 
respects under that law.
    (iii) A Federal Reserve Bank Operating Circular shall be treated as 
a rule adopted by a clearing corporation for these purposes.



Sec. 357.13  Obligations of the United States and the Federal Reserve Banks with respect to Book-entry Securities and security interests.

    (a) Who is entitled to deal with an interest in a Book-entry 
Security that has been credited to a Participant's Security Account? 
Except in the case of a security interest in favor of the United States 
or a Federal Reserve Bank or otherwise as provided in Sec. 357.12 (e), 
for the purposes of this subpart B, the United States and the Federal 
Reserve Banks treat the Participant as exclusively entitled to perform 
the following functions, even if the Treasury or a Federal Reserve Bank 
has any information or notice to the contrary:
    (1) Issue a Transfer Message,
    (2) Receive interest and other payments with respect thereof, and
    (3) Exercise all the rights and powers with respect to the Security,
    (b) Are the Federal Reserve Banks and Treasury liable for Adverse 
Claims? The Federal Reserve Banks and Treasury are not liable to a 
Person asserting or having an Adverse Claim to a Security Entitlement or 
to a Book-entry Security in a Participant's Securities Account. This 
includes any such claim arising as a result of the transfer or 
disposition of a Book-entry Security by a Federal Reserve Bank, pursuant 
to a Transfer Message that the Federal Reserve Bank reasonably believes 
to be genuine.
    (c) When is the obligation of the United States to pay interest and 
principal with respect to Book-entry Securities discharged? The 
obligation is discharged once payment is made as follows:
    (1) A Federal Reserve Bank credits the appropriate amount of 
interest on Book-entry Securities to a Funds Account maintained at the 
Bank, or pays it as directed by the Participant.
    (2) Book-entry Securities are redeemed according to their terms, a 
Federal Reserve Bank withdraws the securities from the Participant's 
Securities Account in which they are maintained, and either:
    (i) Credits the amount of the Redemption proceeds, including both 
principal and interest, where applicable, to a Funds Account at the 
Bank, or
    (ii) Pays such principal and interest as directed by the 
Participant.
    (d) What does a Participant need to do in connection with the 
Redemption of a Book-entry Security? No action by the Participant is 
required.



Sec. 357.14  What authority does a Federal Reserve Bank have?

    (a) Each Federal Reserve Bank has the authority as fiscal agent of 
the United States to:
    (1) Perform functions with respect to the issuance of Book-entry 
Securities offered and sold by the Department to which this subpart 
applies, in accordance with the terms of the applicable offering 
circular and with procedures established by the Department;
    (2) Service and maintain Book-entry Securities in accounts 
established for such purposes;
    (3) Make payments of principal and interest, as directed by the 
Department;
    (4) Effect transfer of Book-entry Securities between Participants' 
Securities Accounts as directed by the Participants; and
    (5) Perform such other duties as fiscal agent that the Department 
may request.
    (b) Each Federal Reserve Bank may issue Operating Circulars that are 
consistent with this part, governing the details of its handling of 
Book-entry Securities, Security Entitlements, and the operation of the 
book-entry system under this part.



Sec. 357.15  How can a debtor's interest in a Security Entitlement be reached by creditors?

    (a) The interest of a debtor may be reached by creditors only by 
legal process upon the Securities Intermediary with whom the debtor's 
securities account is maintained. Exception: If a Security Entitlement 
is maintained in

[[Page 399]]

the name of a secured party, the debtor's interest may be reached by 
legal process upon the secured party.
    (b) These regulations do not state whether a Federal Reserve Bank is 
required to honor an order or other notice of attachment in any 
particular case or class of cases.



   Subpart C--Treasury Direct Book-Entry Securities System (TREASURY 
                                 DIRECT)



Sec. 357.20  Securities account in TREASURY DIRECT.

    (a) Account. A securities account consists of:
    (1) An account master record, and
    (2) A securities portfolio.
    (b) Security. A security in TREASURY DIRECT is evidenced by the 
account master record and a description of the security as set out in 
the securities portfolio associated with an account master record.
    (c) Account master record. An owner must establish an account master 
record before the owner may deposit a security in TREASURY DIRECT. If 
the security is being purchased on original issue, the request that an 
account master record be established may be made on the form used for 
purchase of the security. If the security is being acquired other than 
on original issue, the request that an account master record be 
established should be made on the appropriate form that is provided by 
the Department. The account master record includes, but is not limited 
to, the following data:
    (1) The exact form of registration in which the securities are held;
    (2) The TREASURY DIRECT account number;
    (3) The correspondence address for the account;
    (4) The TIN of the owner, or in the case of ownership by two 
individuals, of the first-named owner; and
    (5) Payment instructions. (See Sec. 357.26.)
    (d) Securities portfolio. The securities portfolio contains a 
description of each security and is the aggregate of all securities in 
the securities account.
    (e) Statement of account. The Department shall send a statement of 
account (statement):
    (1) Upon the establishment of an account master record;
    (2) Upon a change in the securities portfolio;
    (3) At an owner's request; or
    (4) Upon the determination on December 31 that an owner has not 
received a statement of account for that current calendar year.
    The statement shall contain information regarding the account as of 
the date of such statement. The price associated with each security in 
the securities portfolio will also appear on the statement.\1\ The 
statement may be sent

[[Page 400]]

to the correspondence address designated in the account master record, 
or may be sent by electronic means. When the statement is issued as a 
result of a change in ownership of a security, statements will be sent, 
where appropriate, to both the former and current owners. Other 
information regarding the account may be obtained in accordance with 
Sec. 357.24.
---------------------------------------------------------------------------

    \1\ IRS regulations require reporting of income information on a 
security.
    (1) If the security is a bill, the price information will be used to 
comply with this requirement. The earnings reported to IRS for the year 
of a bill's maturity will be the difference between the par value of the 
bill and its price.
    (a) If a bill is deposited in TREASURY DIRECT at original issue, the 
price shown will be the issue price.
    (b) If a bill is transferred to TREASURY DIRECT from TRADES, the 
price shown will be that included in the transfer wire or supplied 
subsequently by the bill owner. If a price is not furnished, the price 
shown will be the weighted average price of the bill of the longest 
maturity having the identical CUSIP number.
    (c) If a bill is transferred from one TREASURY DIRECT account to 
another, the price shown in the receiving (transferee's) account will be 
that shown on the transfer instructions or supplied subsequently by the 
transferee. If a price is not furnished, the price shown will be the 
weighted average price at original issue of the bill of the longest 
maturity having the identical CUSIP number, unless the term of the bill 
can be determined from the account record in which case the price shown 
will be the weighted average price at original issue of the bill with 
that term.
    (2) If the security is a note or bond, the earnings reported to IRS 
for a year will be the periodic interest payments made during that year. 
If a note or bond is transferred to a TREASURY DIRECT account between 
interest payment dates, the earnings reported to IRS for the transferee 
will show the interest for the entire interest payment period. The price 
for notes and bonds will be shown on the statement of account for the 
account owner's information. The price shown will be determined 
following the procedures described above for bills.
    (3) The security owner should report directly to the IRS (a) 
adjustments to annual earnings amounts arising from acquisition of notes 
and bonds between interest payment periods and (b) price corrections for 
bills reported after preparation of the reports to the IRS.
---------------------------------------------------------------------------

    (f) Confirmation notice. The Department shall send a confirmation 
notice (notice):
    (1) Upon a change in an account master record;
    (2) Upon scheduling or canceling a reinvestment; or
    (3) To confirm the interest earned on a Treasury Inflation Indexed 
Security. The notice shall contain information regarding the account as 
of the date of such confirmation. The notice may be sent to the 
correspondence address designated in the account master record, or may 
be sent by electronic means. All changes reflected in paragraph (f) (1) 
and (2) of this section will be included in the next regularly scheduled 
statement of account. See paragraph (e) of this section for the 
statement schedule.
    (g) Account maintenance fees. An annual maintenance fee shall be 
charged for each TREASURY DIRECT securities account holding securities 
that in the aggregate exceed a stipulated par amount. The amount of the 
fee will be published by notice in the Federal Register.

(Approved by the Office of Management and Budget under control number 
1535-0068)

[51 FR 18265, May 16, 1986, as amended at 60 FR 4377, Jan. 23, 1995; 62 
FR 18004, Apr. 11, 1997; 62 FR 32033, June 12, 1997]



Sec. 357.21  Registration.

    (a) General. (1) Registration of a security conclusively establishes 
ownership, except in the case of partnership nominees, in which case the 
Department reserves the right to treat the registration as conclusive of 
ownership. The registration may not, except as provided in this Subpart, 
include any restriction on the authority of an owner to change the data 
in the account master record, transfer the security, or effect any other 
change in the securities portfolio.
    (2) The registration of all securities held by an owner should be 
uniform with respect to the owner's name. An owner must be identified by 
the name by which the owner is ordinarily known, preferably including at 
least one full given name. A suffix, such as Sr. or Jr., must be 
included when ordinarily used, or when necessary to distinguish members 
of the same family.
    (3) If an additional security is deposited in an existing account, 
the security will be registered in the same name and form of 
registration that appears in the designated account master record. One 
who holds a security as John Allen Doe should use that name when 
depositing another security rather than J. Allen Doe, or John A. Doe'. 
Minor variations in names used in acquiring a security to be deposited 
in an established account may be resolved by the Department.
    (b) Natural persons. A security may be registered in the names of 
one or two individuals, but only in one of the following forms:
    (1) Single ownership. In the name of one individual.

    Example: Robert W. Woods


An individual who is sole proprietor of a business conducted under a 
trade name may include a reference to the trade name.

    Example: John A. Doe, doing business as Doe's Home Appliance Store.

    (2) Ownership by two individuals--(i) ``And'' form--Joint Ownership-
-(A) Without right of survivorship. In the names of two individuals, 
joined by the word ``and'', and followed by the words ``without right of 
survivorship''. A security so registered shall conclusively confer on 
each owner an undivided interest in the security.

    Example: Elizabeth Black and Jane Brown, without right of 
survivorship.


Any request for registration which purports, by its terms, to preclude 
the right of survivorship, or which requests

[[Page 401]]

registration in the names of two persons without indicating whether 
survivorship rights attach (other than a registration under paragraph 
(b)(2)(ii) of this section), will be presumed to be a request for 
registration without right of survivorship. If a security is registered 
in this form, a transaction request, other than a request by one owner 
to transfer the security to the other owner, and other than a request 
for reinvestment, must be executed by both owners.
    (B) With right of survivorship. In the names of two individuals, 
joined by the word ``and'', and followed by the words ``with right of 
survivorship''. A security so registered shall confer on each owner an 
undivided interest in the security and shall create a conclusive right 
of survivorship.

    Example: Mark A. Doe and Mary B. Doe, with right of survivorship.


If a security is registered in this form, a transaction request, other 
than a request by one owner to transfer the security to the other owner, 
and other than a request for reinvestment, must be executed by both 
owners.
    (ii) ``Or'' form--``Coownership''. In the names of two individuals, 
joined by the word ``or''. A security so registered shall confer on each 
owner an undivided interest in the security and shall create a 
conclusive right of survivorship.

    Example: Robert Woods or Laura Woods.


If a security is registered in this form, either coowner may make a 
transaction request, but if the Department receives conflicting requests 
at or about the same time, it may refuse to process them.
    (iii) Beneficiary. In the name of one individual followed by the 
words ``Payable on death to'' (or ``P.O.D.'') another individual.

    Example: Jack S. Jones, payable on death to Marie Jones.


If a minor or an incompetent is named as a beneficiary, the status of 
the beneficiary must be identified in the registration. A minor or an 
incompetent may not be designated as an owner. See paragraphs (b)(3) and 
(4) of this section.

    Example: John Perry, P.O.D. John Perry, Jr., a minor.


Registration in this form shall create ownership rights in the 
beneficiary only if the beneficiary survives the owner. During an 
owner's lifetime, a transaction request may be executed by the owner 
without the consent of the beneficiary. If the beneficiary dies before 
the owner, the security will be deemed to be registered in the owner's 
name alone.
    (3) Minors--(i) General. A security may not be registered in the 
name of a minor in his or her own right as an owner. If a security is so 
registered and the Department thereafter receives evidence or 
information of that fact, the Department may suspend processing of any 
transaction request with respect to the security until either a legal 
guardian has been appointed or a natural guardian, as provided in 
paragraph (b)(3)(ii) of this section, has been recognized. Where a legal 
guardian is appointed, the Department will require a certified copy of 
the court order making such appointment. See Sec. 357.28(c).
    (ii) Natural guardians of minors. A security may be registered in 
the name of a natural guardian of a minor for whose estate no legal 
representative has been appointed. The parent with whom the minor 
resides will be recognized as the natural guardian. If the minor resides 
with both parents, either or both may be recognized as natural 
guardian(s). If the minor does not reside with either parent, the 
Department may recognize the person who furnishes the minor's chief 
support as the natural guardian.

    Examples: Michael Jones, as natural guardian of Alice Jones, a 
minor.

    Michael Jones and Evelyn Jones, as natural guardians of Alice Jones, 
a minor.


The security may also be registered in one of the forms authorized under 
paragraph (b)(2) of this section.

    Examples: James Green, as natural guardian of William Green, a 
minor, and Anne Green, without right of survivorship.

    James Green, as natural guardian of William Green, a minor, POD 
Lynne Green.

    (iii) Custodian under statute authorizing gifts to minors. A 
security may be

[[Page 402]]

registered as provided under an applicable gift to minors statute.

    Example: Virginia McDonald, as custodian for Lynne Gorman, under the 
New York Uniform Gifts to Minors Act.


Any request to alter the rights of ownership of the security must be 
made as provided in the applicable statute.
    (4) Incompetents--(i) General. A security may not be registered in 
the name of an individual in his or her own right as an owner if that 
individual is incompetent. If a security is so registered, or if the 
owner subsequently becomes incompetent after the security is purchased, 
and the Department receives evidence or information of that fact, the 
Department may suspend any transaction with respect to the security 
until a legal guardian, conservator, or other representative of the 
incompetent's estate has been appointed, or a voluntary guardian, as 
provided in paragraph (b)(3)(ii) of this section, has been recognized. 
Where a legal guardian, conservator, or other representative is 
appointed, the Department will require a certified copy of the court 
order making such appointment. See Sec. 357.28(c).
    (ii) Voluntary guardian of incompetent. If a legal guardian has not 
been appointed, and the face amount of the securities held in one or 
more accounts in TREASURY DIRECT by an owner who had become incompetent 
does not exceed, in the aggregate, $20,000 (par amount), upon submission 
to, and approval by, the Department of an appropriate form, a relative 
or other person responsible for an incompetent's care and support will 
be recognized as voluntary guardian for purpose of making a transaction 
request under Sec. 357.28(b)(4). All persons known by the Department to 
have an interest in the incompetent's estate, as required by the 
application form, must agree to the designation of the voluntary 
guardian. The security may be re-registered in the name of the voluntary 
guardian.

    Example: Richard Melrose, as voluntary guardian for James W. 
Brundige.

    (c) Representatives. A security may be registered in the name of a 
representative of an estate. If there is more than one representative, 
the names of some representatives may be omitted if followed by language 
that indicates the existence of other representatives. In such cases, 
those named in the registration shall be conclusively presumed by the 
Department to have authority to make a transaction request on behalf of 
all the representatives. The form of registration must identify the 
specific capacity of the representative(s) and the estate represented.

    Examples: ABC National Bank of Chicago, Illinois and Harold Smith, 
co-executors of the will (or administrators of the estate) of Charles 
Johnson, deceased.

    William Brown, guardian of the estate of Henry Jones, a minor.
    Robert Smith, Richard Smith, et al., executors of the will of 
Lorraine Smith, deceased.


If the representative is a trustee, the form of registration must 
identify specifically the authority or document creating the trust.

    Examples: Sarah Jones and XYZ Trust Co., trustees under the will of 
Matthew Smith, deceased.

    Cynthia Doe and Margaret Jones, trustees under agreement with Martha 
Roe, dated April 13, 1979.

    Cynthia Doe, trustee under declaration of trust, dated April 13, 
1979.

    Richard Smith, James Jones, and Frank Brown, trustees under the will 
of Henry K. James, deceased.

    ABC Corporation, Myrna Banker, et al., trustees of Profit-Sharing 
Plan of Ace Manufacturing Co., under B/D resolution, dated May 18, 1975.


If there are several trustees designated as a board or authorized to act 
as a unit, their names should be omitted and the words, ``Board of 
Trustees'' substituted.

    Example: Board of Trustees of Super Co. Retirement Fund, under 
collective bargaining agreement, dated March 18, 1969.


An organization (other than a bank) or individual seeking to act as 
trustee or custodian of an Individual Retirement Account (``IRA''), must 
be authorized to so act by the Internal Revenue Service. As appropriate, 
registration of the security should be in the form shown below:

    Examples: ABC Bank, trustee for John Doe IRA, under agreement dated 
December 21, 1990.

[[Page 403]]

    EFG Broker, Inc., custodian for Mary Smith IRA, under agreement 
dated September 4, 1991.

    (d) Private organizations (corporations, unincorporated associations 
and partnerships). A security may be registered in the name of a private 
corporation, unincorporated association, or partnership. The full legal 
name of the organization, as set forth in its charter, articles of 
incorporation, constitution, partnership agreement, or other documents 
from which its powers are derived, must be included in the registration. 
The name may be followed by a reference to a particular account or fund, 
other than a trust fund, such as an escrow account.
    (1) A corporation. The legal name of a business, fraternal, 
religious, or other private corporation must be followed by descriptive 
words indicating the corporate status unless the term corporation or the 
abbreviation Inc. is part of the name or the name is that of a 
corporation or association organized under Federal law, such as a 
national bank or Federal savings and loan association.

    Examples: Brown Manufacturing Co., a corporation (Education Fund).

    The Apex Manufacturing Corporation.

    XYZ National Bank of El Paso, TX.

    Goodworks, Unlimited, a not-for-profit corporation.

    (2) An unincorporated association. Unless the name of a lodge, club, 
labor union, veterans or religious organization, or similar organization 
which is not incorporated (whether or not it is chartered by or 
affiliated with a parent organization which is incorporated) includes 
the words an unincorporated association, the registration must include 
descriptive words indicating the organization's unincorporated status. A 
security may not be registered in the name of an unincorporated 
association if the legal title to its property or the legal title to the 
funds with which the security is to be purchased is held by trustees. In 
such a case, the security should be registered in the name of the 
trustees in accordance with paragraph (c) of this section. The term 
unincorporated association should not be used to describe a trust fund, 
a partnership or a business conducted under a trade name.

    Examples: Local Union No. 13, Brotherhood of Operating Engineers, an 
unincorporated association.

    The Simpson Society, an unincorporated association.

    (3) Partnership. Unless the name of a partnership includes the word 
partnership, the registration must include descriptive words indicating 
partnership status.

    Examples: Red & Blue, a partnership.

    Abco and Co., a nominee partnership.

    (e) Governmental entities and officers. A security may be registered 
in the name of a State, county, city, town, village, school district, or 
other governmental entity, body, or corporation established by law. If a 
governmental officer is authorized to act as a trustee or custodian, a 
security may be registered in the title, or name and title, of the 
governmental officer. The form of registration should reflect the 
capacity in which the governmental entity or officer is authorized to 
hold property (e.g., it may be authorized to hold property in its own 
name or as trustee or custodian).

    Examples: Laura Woods, Treasurer, City of Twin Falls, Mo.

    State of Michigan.

    Village of Gaithersburg, Md.

    Pennsylvania State Highway Administration (Highway Road Repair 
Fund).

    Insurance Commissioner of Florida, trustee for benefit of policy 
holders of Sunshine Insurance Co. under F.S.A. Sec. 629.104.

    Commonwealth of Virginia, in trust for Virginia Surplus Property 
Agency.

    Gleason County Cemetery Commission, trustee under Md. Code Ann. Sec. 
310.29.

    (f) The United States Treasury. A security may be registered in the 
name of an individual, with the United States Treasury as beneficiary, 
provided a reference to the statute which authorizes gifts to be made to 
the United States to reduce the public debt, is included.


[[Page 404]]


    Example: John S. Green, payable on death [or P.O.D.] to U.S. 
Treasury to reduce the public debt (31 U.S.C. 3113).

(Approved by the Office of Management and Budget under control number 
1535-0068)

[51 FR 18265, May 16, 1986, as amended at 57 FR 38774, Aug. 27, 1992]



Sec. 357.22  Transfers.

    (a) General. A security may be transferred only as authorized by 
this part. A security may be transferred from an account in 
TreasuryDirect to an account in TRADES, or from an account in TRADES to 
an account in TreasuryDirect. A security may also be transferred between 
accounts in TreasuryDirect. The Department may delay transfer of a newly 
purchased security from a TreasuryDirect account to an account in TRADES 
for a period not to exceed (30) calendar days from the date of issue. 
This provides time for the investor to become aware of any unauthorized 
debits.
    (1) Identification of securities to be transferred. The owner must 
identify the securities to be transferred within TREASURY DIRECT, or 
from TREASURY DIRECT to TRADES, in the manner required by the 
transaction request form. If such identification is not provided, the 
request will not be processed and will be returned.
    (2) Denominational amounts. A security may be transferred from an 
account only in a denominational amount authorized by the offering under 
which the security was issued. Any security remaining in the securities 
portfolio after the transfer must also be in an authorized 
denominational amount.
    (3) When transfer effective. A transfer of a security within 
TREASURY DIRECT, or from TRADES to TREASURY DIRECT, is effective when an 
appropriate entry is made in the name of the transferee on the TREASURY 
DIRECT records. A transfer from TREASURY DIRECT to TRADES is effective 
as provided in Subpart B. If a transfer of a security from a transferor 
in TREASURY DIRECT to a transferee in TRADES cannot be completed, and 
the security is sent back to TREASURY DIRECT, the Department will 
redeposit the security in the transferor's account and treat the 
transferor as the owner.
    (b) Transfer to Federal Reserve Bank for sale of securities in the 
secondary market. (1) Upon authorization by the investor, an unmatured 
security may be transferred to a Federal Reserve Bank acting as the 
designated fiscal agent of the United States, to be sold on behalf of 
the investor.
    (2) Definitions. In this section, unless the context indicates 
otherwise:
    Dealer means an entity that is registered or has given notice of its 
status as a government securities broker or government securities 
dealer, pursuant to Section 15C(a)(1) of the Securities Exchange Act of 
1934.
    Par amount means the stated value of a security at original 
issuance.
    Price means the dollar amount to be paid for a security expressed as 
a percent of its current par amount.
    Security means any amount held in a TREASURY DIRECT account which is 
represented by a separate CUSIP number.
    Settlement amount, also referred to as net amount, is the amount 
deposited by the Federal Reserve Bank to the account of the investor at 
the financial institution designated by the investor to receive TREASURY 
DIRECT payments. This amount is equal to the par amount of the 
securities multiplied by the price, plus any accrued interest, and less 
the transaction fee. For inflation indexed securities, the settlement 
amount also includes any applicable inflation adjustment, as provided in 
31 CFR Part 356. The settlement amount may be less than the par amount 
of the security.
    Settlement date is the date the settlement amount is released to the 
account at the financial institution designated by the investor for 
receipt of TREASURY DIRECT payments.
    Trade date means the date on which the Federal Reserve Bank enters 
into an agreement with a dealer for the sale of the security.
    Yield, also referred to as yield to maturity, means the annualized 
rate of return to maturity on a fixed principal security expressed as a 
percentage. For an inflation-indexed security, yield means real yield, 
as defined in 31 CFR part 356.

[[Page 405]]

    (3) Procedure. On an approved Treasury form, the owner must 
authorize a transfer of the security from the investor's TREASURY DIRECT 
account to the designated Federal Reserve Bank, and authorize the 
Federal Reserve Bank to sell the security. Rules in subpart C of this 
part governing the transfer of securities will apply to the transfer of 
the security to the Federal Reserve Bank. Generally, on the day that the 
security is transferred to the Federal Reserve Bank, the Federal Reserve 
Bank will make reasonable efforts to obtain a price quote from at least 
three dealers, and will enter into an agreement to sell the security to 
the dealer with the highest price quote for next day settlement. What 
constitutes reasonable effort shall be determined solely by the Federal 
Reserve Bank. On the next full business day after the trade date, the 
settlement amount shall be released by direct deposit (electronic funds 
transfer), as provided in Sec. 357.26 of this part, to the account at 
the financial institution designated by the investor to accept TREASURY 
DIRECT payments, except when the Department determines that 
extraordinary circumstances exist that require payment by other means. 
In the event that the Federal Reserve Bank is unable to obtain at least 
one price quote for the security, the security will be returned to the 
TREASURY DIRECT account of the investor on the next full business day 
following the receipt of the securities by the Federal Reserve Bank, and 
the Federal Reserve Bank will notify the investor.
    (4) Confirmation. The Federal Reserve Bank will send a confirmation 
of the sale to the investor upon completion of the transaction. Such 
confirmation will include such information as price, trade date, 
settlement date, settlement amount, also referred to as net amount, 
transaction fee, and yield to maturity.
    (5) Price. By authorizing the transfer and sale of the securities, 
the investor agrees to accept the price received by the Federal Reserve 
Bank from the dealer selected as having the highest price quote.
    (6) Transaction fee. A transaction fee shall be charged for each 
security sold on behalf of the investor. If the Federal Reserve Bank is 
unable to complete the sale of the security, no fee will be charged. By 
authorizing the sale of the security, the investor authorizes the 
Federal Reserve Bank to withhold the transaction fee prior to the 
Federal Reserve Bank initiating the payment of the settlement amount to 
the account at the financial institution designated by the investor to 
receive TREASURY DIRECT payments. The amount of the transaction fee will 
be published by notice in the Federal Register.
    (7) Termination. This service may be terminated at anytime without 
prior notice at the discretion of the Department.
    (8) Rights. The provisions applicable to TREASURY DIRECT 
transactions in subpart C shall apply to this section. The provisions 
applicable to transactions in TRADES in subpart B shall not apply to 
this section.
    (9) Irrevocability. The authorization of the investor for the 
transfer and sale of the securities shall be irrevocable when the 
transfer from the TREASURY DIRECT account of the investor to the account 
at the Federal Reserve Bank is effected.
    (10) Liability. The Department and the designated Federal Reserve 
Bank shall not be liable for changes in market conditions affecting the 
price received for the security, or for any loss which the investor may 
incur as a result of the transaction or the inability of the Federal 
Reserve Bank to complete the transaction.
    (c) Transfer upon death of an owner--(1) Right of survivorship. If a 
security is registered in beneficiary form or a form which provides for 
a right of survivorship, upon the death of an owner, the beneficiary or 
survivor shall be the sole and absolute owner, notwithstanding any 
purported testamentary disposition by the decedent and notwithstanding 
any State or other law to the contrary. The Department will honor a 
transaction request by a beneficiary or a survivor (in the case of a 
security registered in the form described in Sec. 357.21(b)(2)(i)(B)) 
only upon proof of death of an owner.
    (2) Succession under law of domicile. If a security is registered in 
a form that does not provide for a right of survivorship, succession 
shall be determined in

[[Page 406]]

accordance with the applicable law of the deceased owner's domicile at 
the time of death.
    (d) Representative succession. If a security is registered in the 
name of a representative who has died, resigned, or been removed, 
succession shall be determined in accordance with applicable law and the 
terms of the document under which the representative was acting.
    (e) Organizational succession--(1) Corporation and unincorporated 
association. If a security is registered in the name of a corporation or 
an unincorporated association that has been dissolved, merged or 
consolidated into another organization, succession shall be determined 
in accordance with applicable law and the terms of the documents by 
which the dissolution, merger, or consolidation was effected.
    (2) Partnership. If a partnership is dissolved or terminated, 
succession shall be determined in accordance with applicable law and the 
terms of the partnership agreement.
    (f) Succession of governmental officer. If a security is registered 
in the name and title of a governmental officer who has died, resigned, 
or has been removed, succession shall be determined in accordance with 
applicable law.

(Approved by the Office of Management and Budget under control number 
1535-0068)

[51 FR 18265, May 16, 1986; 51 FR 18884, May 23, 1986, as amended at 53 
FR 10074, Mar. 29, 1988; 62 FR 46861, Sept. 4, 1997; 64 FR 6527, Feb. 
10, 1999]



Sec. 357.23  Judicial proceedings--sovereign immunity.

    (a) Department and Federal Reserve Banks not proper parties. The 
Department and the Federal Reserve Banks are not proper defendants in a 
judicial proceeding involving competing claims to a security held in 
TREASURY DIRECT nor are they subject to any injunction or restraining 
order issued with respect to a security. The Department will not 
recognize a notice of a pending or contemplated judicial or 
administrative proceeding affecting a security in TREASURY DIRECT.
    (b) Orders--(1) Ownership rights. The Department will recognize a 
final order entered by a court that affects ownership rights in a 
security in TREASURY DIRECT if:
    (i) The order is consistent with the provisions of this subpart and 
the terms and conditions of the security; and
    (ii) The Department has received evidence of the order, as provided 
in paragraph (c) of this section.
    (2) Transaction request. The Department will honor a transaction 
request submitted by a person appointed by a court and having authority 
under an order of a court to dispose of the security or payment with 
respect thereto if:
    (i) The ordered disposition of the security or payments with respect 
thereto is consistent with the provisions of this subpart and the terms 
and conditions of the security; and
    (ii) The Department has received evidence of the appointment and 
order, as provided in paragraph (c) of this section.
    (c) Evidence required. Before the Department will recognize an order 
or determination entered by a court, the Department must have received a 
certified copy of the judgment, decree, or order and any additional 
documents deemed necessary by the Department. A certificate from the 
clerk of the court, bearing the seal of the court, must also be 
submitted stating that the judgment, decree, or order is still in full 
force and has not been stayed or appealed, and that the time for filing 
an appeal has passed. Before the Department will honor a transaction 
request submitted by a person appointed by a court, the Department must 
receive a certified copy of the order making the appointment and 
describing specifically the person's authority, and any additional 
documents deemed necessary by the Department.

(Approved by the Office of Management and Budget under control number 
1535-0068)



Sec. 357.24  Availability and disclosure of TREASURY DIRECT records.

    (a) General. All records with respect to a TREASURY DIRECT account 
are held confidential. Consistent with the Privacy Act (5 U.S.C. 552a), 
information relating to those accounts will be released only to the 
owner except:
    (1) As provided in these regulations;

[[Page 407]]

    (2) As provided in Treasury regulations contained in 31 CFR Part 
323; or
    (3) As otherwise provided by law.
    (b) Inquiries by owners. Information requested will be disclosed to 
an owner provided that:
    (1) Sufficient information is provided to identify the owner; and
    (2) Sufficient information is provided to identify the TREASURY 
DIRECT account.
    (c) Conditions for release. A request for information will be 
honored only if, in the sole judgment of the Department or the Federal 
Reserve Bank to which the inquiry is made, the identity and right of the 
requester to the information have been established.

[51 FR 18265, May 16, 1986; 51 FR 18884, May 23, 1986]



Sec. 357.25  Security interests.

    (a) General. The Department will not recognize any notice or claim 
of a lien, encumbrance, or security interest of any kind, including a 
pledge, in a security in TREASURY DIRECT except as provided in 
Sec. 357.23 and in paragraph (b) of this section.
    (b) Security for the performance of duty or obligation under Federal 
law. The Department will accept and hold pursuant to the provisions of 
31 U.S.C. 9303, book-entry bonds, notes or bills submitted in lieu of a 
surety bond as security for the performance of a duty or obligation 
required by Federal law in accordance with said section.



Sec. 357.26  Direct Deposit.

    (a) General. A payment by the Department with respect to a security 
shall be by direct deposit unless it is deemed necessary by the 
Department to make payment by another means. Direct Deposit payments are 
governed by the regulations at 31 CFR part 370.
    (b) Names on account. Where the TREASURY DIRECT securities account 
is in the name of individual(s) in their own right, and the deposit 
account at the financial institution is in the name of individual(s) in 
their own right, the two accounts must contain at least one name that is 
common to both.
    (c) Inquiry to financial institution. Where the deposit account to 
which payments are to be directed is held in the name of the financial 
institution itself acting as sole trustee, or as co-trustee, or is in 
the name of a commercially-managed investment fund, particular inquiry 
should first be made of the financial institution to make certain that 
the direct deposit payments can be received, and alternate arrangements 
made if it cannot do so.
    (d) Payments to master account. All payments relating to a single 
account master record must be made to the same designated account at a 
financial institution.
    (e) Deposit account. The deposit account to which payments are 
directed should preferably be established in a form identical to the 
registration of the securities account, particularly where the 
securities are registered jointly or with right of survivorship, to 
assure that the rights of ownership and of survivorship can be more 
easily identified and preserved. Neither the United States nor any 
Federal Reserve Bank shall be liable for any loss sustained because the 
interests of the holder(s) of a deposit account to which payments are 
made are not the same as the interests of the owner(s) of the security.

(Approved by the Office of Management and Budget under control number 
1535-0068)

[51 FR 18265, May 16, 1986, as amended at 57 FR 38774, Aug. 27, 1992; 61 
FR 6113, Feb. 16, 1996; 64 FR 40487, July 26, 1999]



Sec. 357.27  Reinvestment.

    (a) General. Upon the request of an owner, the redemption proceeds 
of a security may be reinvested at maturity in a new security in the 
same form of registration, provided a new security is then being offered 
by the Department and provision for reinvestment is made in the 
offering. The new security must be in an authorized denominational 
amount and will be issued in accordance with the terms of the offering. 
If the new security is issued at a premium or with accrued interest, an 
additional payment will be required from the investor. If the new 
security is issued at a discount, the difference will be remitted to the 
owner.
    (b) Treasury bills. A request by an owner for a single or successive 
reinvestment of a Treasury bill must be

[[Page 408]]

made in accordance with the terms prescribed on the tender form 
submitted at the time of purchase of the original bill, or by a 
subsequent transaction request received not less than ten (10) business 
days prior to the maturity date of the bill. A request to revoke a 
direction to reinvest the proceeds of a bill must be received by the 
Department not less than ten (10) business days prior to the maturity 
date of the bill. If either a request for reinvestment or revocation of 
a reinvestment request is received less than ten (10) business days 
prior to maturity of the original bill, the Department may in its 
discretion act on such request if sufficient time remains for 
processing.
    (c) Issue date not coincidental with maturity date. If the date on 
which a security matures or is called does not coincide with the issue 
date of the security being purchased through reinvestment, the 
Department may, at its option, hold the redemption proceeds in the same 
form of registration as the maturing or called security, but no interest 
shall accrue or be paid on such funds.

(Approved by the Office of Management and Budget under control number 
1535-0068)

[51 FR 18265, May 16, 1986, as amended at 62 FR 18694, Apr. 16, 1997]



Sec. 357.28  Transaction requests.

    (a) General. Unless otherwise authorized by the Department, a 
transaction request must be submitted on a transaction request form. In 
the case of certain transactions specified by the Department, the 
owner's signature on the form must be certified or guaranteed, as 
provided in Sec. 357.31. If the transaction request form is received 
more than six (6) months after its execution, it will not be honored by 
the Department and will be returned to the sender for further 
instructions.
    (b) Individuals--(1) General. A transaction request must be signed 
by the owner of the security. In addition to any required certification, 
a transaction request form executed by a person by mark, e.g., ``(X)'', 
must be witnessed by a disinterested person. The following language 
should be added to the form and be signed by the witness:

    Witness to signature by mark
________________________________________________________________________
Signature of witness
________________________________________________________________________
Address of witness

    (2) Change of name. If an individual's name has been changed from 
that appearing in the registration, the individual should sign both 
names to the transaction request form and state the manner in which the 
change occurred.

    Example: Deborah L. Gains, changed by order of court from Deborah G. 
O'Brien.


The individual must provide evidence, such as a certified copy of a 
court order, which confirms the change, unless it is indicated that the 
change of name resulted from marriage.

    Example: Catherine M. Cole, changed by marriage from Catherine T. 
Murray.

    (3) Natural guardians. A transaction request involving a security 
registered in the name of a natural guardian of a minor may be executed 
by the natural guardian. If a security is registered in the names of 
both parents as natural guardians of a minor, both must execute a 
transaction request. However, the Department will not honor a 
transaction request by the natural guardian(s):
    (i) Which would transfer the security to a natural guardian in his 
or her own right; or
    (ii) After the Department receives notice of the minor's attainment 
of majority, the qualification of a legal guardian or similar 
representative, or the death of the minor.
    (4) Voluntary guardians. A transaction request involving a security 
belonging to an owner who has become incompetent may be executed by a 
voluntary guardian, but only after approval by the Department of the 
voluntary guardian's application for such designation. However, the 
Department will not honor a transaction request by the voluntary 
guardian:
    (i) Which would transfer the security to a voluntary guardian in his 
or her own right; or
    (ii) After the Department receives notice of the ward's restoration 
to competency, the qualification of a legal guardian or similar 
representative, or the death of the ward. See Sec. 357.21(b)(4).

[[Page 409]]

    (c) Representatives--(1) General. A representative of an owner's 
estate, other than a trustee, may execute a transaction request form if 
the representative submits to the Department properly authenticated 
evidence of the authority to act. The evidence will not be accepted if 
dated more than six (6) months prior to the date of execution of the 
transaction request.
    (2) Estates closed. If a security is registered in the name of an 
owner who is deceased and whose estate has been closed and the 
representative discharged, a transaction request must be made by the 
person(s) entitled to the security, as determined from the pertinent 
court records or the deceased owner's will, if any.
    (3) Estates not administered--(i) Special provisions under State 
laws. If, under applicable State law, a person is entitled to or has 
been recognized or appointed to administer the estate of a deceased 
owner without court-supervised administration, that person may execute a 
transaction request involving a security belonging to the deceased 
owner, provided appropriate evidence of authority is submitted to the 
Department.
    (ii) Agreement of persons entitled. If a representative of a 
deceased owner's estate has not been or is not to be appointed, the 
Department will honor an application for disposition of any securities 
belonging to the deceased owner pursuant to a written agreement provided 
that the Department is satisfied that:
    (A) All persons entitled to share in the decedent's personal estate 
are parties to the agreement;
    (B) Provision has been made for payment of all the decedent's debts; 
and
    (C) The interests of any minors or incompetents have been protected.
    (d) Private organizations--(1) Corporations and unincorporated 
associations. A transaction request involving a security registered in 
the name of a corporation or an unincorporated association (either in 
its own right or in a representative capacity), may be executed by an 
authorized person on its behalf. The request must be supported by 
evidence of the person's authority to act.
    (2) Partnerships. A transaction request involving a security 
registered in the name of a partnership must be executed by a general 
partner.
    (e) Government entities. A transaction request involving a security 
registered in the name of a State, county, city, school district, or 
other governmental entity, public body or corporation, must be executed 
by a authorized officer of the entity. The request must be supported by 
evidence of the officer's authority to act.
    (f) Public officers. A transaction request involving a security 
registered in the title of a public officer must be executed by the 
officer. The request must be supported by evidence of incumbency.
    (g) Attorneys-in-fact. A transaction request made by an attorney-in-
fact must be accompanied by the original power of attorney or a properly 
authenticated copy. A power of attorney must be executed in the presence 
of a notary public or a certifying individual. See Sec. 357.31. The 
power of attorney will not be accepted if it was executed more than two 
(2) years before the date the transaction request was executed, unless 
the power provides that the authority of the attorney-in-fact continues 
notwithstanding the incapacity of the principal. If two or more 
attorneys-in-fact are named, all must execute the transaction request 
unless the power authorizes fewer than all to act. A transaction request 
executed by an attorney-in-fact seeking transfer of a security to the 
attorney-in-fact will not be accepted unless expressly authorized by the 
document appointing the attorney-in-fact.

(Approved by the Office of Management and Budget under control number 
1535-0068)

[51 FR 18265, May 16, 1986; 51 FR 18884, May 23, 1986]



Sec. 357.29  Time required for processing transaction request.

    For purposes of a transaction request affecting payment instructions 
with respect to a security, a proper request must be received not less 
than ten (10) business days preceding the next payment date. If a 
transaction request is received less than ten (10) business days 
preceding a payment date, the Department may in its discretion act on 
such request if sufficient time remains for processing. If a transaction 
request

[[Page 410]]

is received too late for completion of the requested transaction, the 
transaction request will be acted upon with respect to future payments 
only.

(Approved by the Office of Management and Budget under control number 
1535-0068)

[51 FR 18265, May 16, 1986, as amended at 62 FR 18694, Apr. 16, 1997]



Sec. 357.30  Cases of delay or suspension of payment.

    If evidence required by the Department in support of a transaction 
request is not received by the Department at least ten (10) business 
days before the maturity date of the security, or if payment at maturity 
has been suspended pursuant to 31 CFR 370.10, in cases of reinvestment, 
the Department will redeem the security and hold the redemption proceeds 
in the same form of registration as the security redeemed, pending 
further disposition. No other interest shall accrue or be paid on such 
proceeds after the security is redeemed.

[64 FR 40487, July 26, 1999]



Sec. 357.31  Certifying individuals.

    (a) General. The following individuals may certify signatures on 
transaction request forms:
    (1) Officers and employees of depository institutions, corporate 
central credit unions, and institutions that are members of Treasury-
recognized signature guarantee programs who have been authorized:
    (i) Generally to bind their respective institutions by their acts;
    (ii) Unqualifiedly to guarantee signatures to assignments of 
securities; or
    (iii) To certify assignments of securities.
    (2) Officers and authorized employees of Federal Reserve Banks.
    (3) Officers of Federal Land Banks, Federal Intermediate Credit 
Banks and Banks for Cooperatives, the Central Bank for Cooperatives, and 
Federal Home Loan Banks.
    (4) Commissioned officers and warrant officers of the Armed Forces 
of the United States but only with respect to signatures executed by 
Armed Forces personnel, civilian field employees, and members of their 
families.
    (5) Such other persons as the Commissioner of the Public Debt or his 
designee may authorize.
    (b) Foreign countries. The following individuals are authorized to 
certify signatures on transaction request forms executed in a foreign 
country:
    (1) United States diplomatic or consular officials.
    (2) Managers and officers of foreign branches of depository 
institutions and institutions that are members of Treasury-recognized 
signature guarantee programs.
    (3) Notaries public and other officers authorized to administer 
oaths, provided their official position and authority are certified by a 
United States diplomatic or consular official under seal of the office.
    (c) Duties and liabilities of certifying individuals-- (1) General. 
Except as specified in paragraph (c)(2) of this section, a certifying 
individual shall require that the transaction request form be signed in 
the certifying individual's presence after he or she has established the 
identity of the person seeking the certification. An employee who is not 
an officer should insert the words ``Authorized signature'' in the space 
provided for the title. A certifying individual and the organization for 
which he or she is acting are jointly and severally liable for any loss 
the United States may incur as a result of the individual's negligence 
in making the certification.
    (2) Signature guaranteed. The transaction request form need not be 
executed in the presence of a certifying individual if he or she 
unqualifiedly guarantees the signature, in which case the certifying 
individual shall, after the signature, add the following endorsement: 
``Signature guaranteed, First National Bank of Smithville, Smithville, 
NH, by A.B. Doe, President'', and add the date. In guaranteeing a 
signature, the certifying individual and the organization for which he 
or she is acting warrant to the Department that the signature is genuine 
and that the signer had the legal capacity to execute the transaction 
request.
    (3) Absence of signature guaranteed by depository institution. A 
transaction request form need not be actually signed

[[Page 411]]

by the owner in any case where a certifying individual associated with a 
depository institution has placed an endorsement on the form reading 
substantially as follows: ``Absence of signature by owner and validity 
of transaction guaranteed, Second State Bank of Jonesville, Jonesville, 
NC, by B.R. Butler, Vice President''. The endorsement should be dated, 
and the seal of the institution should be added. This form of 
endorsement is an unconditional guarantee to the Department that the 
institution is acting for the owner under proper authorization.
    (d) Evidence of certifying individual's authority. The authority of 
a certifying individual to act is evidenced by affixing to the 
certification the following:
    (1) Officers and employees of depository institutions. The 
institution's seal or signature guarantee stamp; if the institution is 
an authorized paying agent for U.S. Savings Bonds, a legible imprint of 
the paying agent's stamp; or, if the institution is a member of the 
Security Transfer Agents Medallion Program (STAMP), a legible imprint of 
the STAMP signature guarantee stamp.
    (2) Officers and authorized employees of institutions that are 
members of Treasury-recognized signature guarantee programs. A legible 
imprint of the program's signature guarantee stamp, e.g., the STAMP, 
SEMP, MSP stamp for members of the Securities Transfer Agents Medallion 
Program, the Stock Exchanges Medallion Program, or the New York Stock 
Exchange Incorporated Medallion Signature Program, respectively.
    (3) Officers and authorized employees of Federal Reserve Banks. 
Whatever is prescribed in procedures established by the Department.
    (4) Officers and employees of corporate central credit unions and 
other entities listed in paragraph (a)(3) of this section. The entity's 
seal.
    (5) Notaries public, diplomatic or consular officials. The official 
seal or stamp of the office. If the certifying individual has no seal or 
stamp, then the official's position must be certified by some other 
authorized individual, under seal or stamp, or otherwise proved to the 
satisfaction of the Department.
    (6) Commissioned or warrant officers of the United States Armed 
Forces. A statement which sets out the officer's rank and the fact that 
the person executing the transaction request is one whose signature the 
officer is authorized to certify under the regulations in this part.
    (7) Such other persons as the Commissioner of the Public Debt or his 
designee may authorize. The evidence specified by the Commissioner or 
his designee.
    (e) Interested persons not to act as certifying individual. Neither 
the transferor, the transferee, nor any person having an interest in a 
security involved in the transaction may act as a certifying individual. 
However, an authorized officer or employee of a depository institution 
or of an institution that is a member of a Treasury-recognized signature 
guarantee program may act as a certifying individual on a transaction 
request for transfer of a security to the institution, or any request 
executed by another individual on behalf of the institution.

[59 FR 59038, Nov. 15, 1994]



Sec. 357.32  Submission of transaction requests; further information.

    Transaction requests and requests for forms and information may be 
submitted to any Federal Reserve Bank or to the Bureau of the Public 
Debt, TREASURY DIRECT, Washington, DC 20239-0001. A list of the 
addresses of Federal Reserve Banks will be available upon request to the 
Bureau. The Federal Reserve Banks, as fiscal agents of the United 
States, are authorized to perform such functions as may be delegated to 
them by the Department in order to carry out the provisions of this 
part.



                    Subpart D--Additional Provisions



Sec. 357.40  Additional requirements.

    In any case or any class of cases arising under these regulations, 
the Secretary of the Treasury (``Secretary'') may require such 
additional evidence and a bond of indemnity, with or without surety, as 
may in the judgment of the Secretary be necessary for the protection of 
the interests of the United States.

[[Page 412]]



Sec. 357.41  Waiver of regulations.

    The Secretary reserves the right, in the Secretary's discretion, to 
waive any provision(s) of these regulations in any case or class of 
cases for the convenience of the United States or in order to relieve 
any person(s) of unnecessary hardship, if such action is not 
inconsistent with law, does not adversely affect any substantial 
existing rights, and the Secretary is satisfied that such action will 
not subject the United States to any substantial expense or liability.

[61 FR 43630, Aug. 23, 1996]



Sec. 357.42  Liability of Department and Federal Reserve Banks.

    The Department and the Federal Reserve Banks may rely on the 
information provided in a tender, transaction request form, or Transfer 
Message, and are not required to verify the information. The Department 
and the Federal Reserve Banks shall not be liable for any action taken 
in accordance with the information set out in a tender, transaction 
request form, or Transfer Message, or evidence submitted in support 
thereof.

[61 FR 43630, Aug. 23, 1996]



Sec. 357.43  Liability for transfers to and from TREASURY DIRECT.

    A depository institution or other entity that transfers to, or 
receives, a security from TREASURY DIRECT is deemed to be acting as 
agent for its customer and agrees thereby to indemnify the United States 
and the Federal Reserve Banks for any claim, liability, or loss 
resulting from the transaction.



Sec. 357.44  [Reserved]



Sec. 357.45  Supplements, amendments, or revisions.

    The Secretary may, at any time, prescribe additional supplemental, 
amendatory or revised regulations with respect to securities, including 
charges and fees for the maintenance and servicing of securities in 
book-entry form.

            Appendix A to Part 357--Discussion of Final Rule

                               Background

    Twenty-four written comments were received to the notice of proposed 
rulemaking from various sources, including Federal agencies, trade 
associations, as well as financial and commercial investment 
institutions. With the exception of one bank, all commentators endorsed 
the concept of a certificateless security.
    The grouping and identification of the comments received have been 
made on a section-by-section basis, with an explanation of the action 
taken with respect thereto. As circumstances necessitated the 
publication of the rule in two segments, in order to make each part more 
understandable, certain definitions, such as those for ``Department'' 
and ``securities'', have appeared in the proposed rule for both TREASURY 
DIRECT and TRADES, and were slightly modified in the proposed rules on 
TRADES. Because these modifications represent non-substantive 
clarifications, and to avoid confusion as between the two portions of 
the rules, the definitions as used in TRADES have been adopted.

                       Section-By-Section Analysis

                      Section 357.21  Registration.

    The forms of registrations provided for securities to be held in 
TREASURY DIRECT have different legal effect from those currently 
provided for in the case of definitive Treasury securities and for the 
Treasury's book-entry Treasury bill system. A comment was received that, 
as a result, this could lead to some confusion, and that the Treasury 
bill forms of recordation currently offered should be changed, 
particularly since Treasury bills will be phased into TREASURY DIRECT 
gradually. The Bureau believes that the benefits of uniformity of rights 
and interests that TREASURY DIRECT investors will derive far outweigh 
any possible confusion. As for confusion with the current Treasury bill 
book-entry system, given the fact that Treasury bills have a term of not 
more than a year, it is believed that the problem, if any, will be 
short-lived.
    Given the importance of the change that TREASURY DIRECT provides as 
to registration, the discussion thereof that accompanied the Notice of 
Proposed Rulemaking is re-published below.
    ``Forms of Registration. The proposed rule provides the investor 
with a variety of registration options. They are essentially similar to 
those provided for registered, definitive marketable Treasury 
securities. Investors should be particularly aware that,

[[Page 413]]

where the security is held in the names of two individuals, the 
registration chosen may establish rights of survivorship.
    ``The reason for establishing the rights of ownership for securities 
held in TREASURY DIRECT is that it will give investors the assurance 
that the forms of registration they select will establish conclusively 
the rights to their book-entry securities. It will also serve to 
eliminate some of the uncertainties, as well as possible conflicts, 
between the varying laws of the several States.
    ``A Federal rule of ownership is being adopted by the Treasury for 
TREASURY DIRECT securities. This regulatory approach is consistent with 
the one previously taken in the case of United States Savings Bonds. It 
will have the effect of overriding inconsistent State laws. See, Free v. 
Bland, 369 U.S. 663 (1962).
    ``In the case of individuals (who are likely to be by far the 
majority of holders of securities in TREASURY DIRECT), the options 
offered will permit virtually all the preferred forms of ownership. At 
the investor's option, it will be possible to provide for the 
disposition of the securities upon death through rights of survivorship.
    ``Coownership registration. One option is the coownership form of 
registration, i.e., ``A or B.'' Unlike the current Treasury bill book-
entry system being administered by the Bureau of the Public Debt, a 
security held in TREASURY DIRECT registered in this form will be 
transferable upon the written request of either coowner. Other changes 
in the account may also be made upon the request of either party. While 
this form of registration will facilitate the receipt of payments and 
provide ease in conducting transactions, care should obviously be 
exercised in designating a coowner.
    ``Joint ownership. For those who would prefer to have the 
transferability of a security held in two names contingent upon the 
request of both, the joint form of registration will be appropriate. 
This form of registration, i.e., ``A and B, with [without] the right of 
survivorship,'' will require the agreement of both parties to conduct 
any authorized transaction.
    ``Beneficiary form. The beneficiary form, i.e., ``A payable on death 
to (POD) B,'' will permit the owner to have sole control of the account 
during his/her lifetime, but in the event of death, the account will 
pass by right of survivorship to the beneficiary.''
    One commentator questioned the ``natural guardian'' and ``voluntary 
guardian'' forms of registration provided in the regulations, pointing 
out that financial institutions are reluctant to establish an account in 
the name of a natural guardian of a minor because of the uncertainties 
as to who might be entitled to the funds on the death of the natural 
guardian or minor, or when the minor reached majority. It was mentioned 
that a bank would be reluctant to open an account in the name of a 
voluntary guardian, or to release funds from an existing account to a 
voluntary guardian because of the potential risk in the event of a claim 
from a court-appointed guardian. It seems apparent that the comment was 
prompted by the provision that appeared in the proposed rule that the 
account held in TREASURY DIRECT and the deposit account to which 
payments are to be directed should be in the same form. As hereafter 
pointed out in the discussion under the payment section, this is not a 
requirement.
    While parents are universally recognized as the natural guardians of 
the person of minors, they have generally not been recognized as 
entitled to control the estates of these minors, except perhaps in the 
case of small amounts. Traditionally, the guardian of the estate of a 
minor involves judicial appointment and supervision. In order to provide 
a means of dealing with the problem of disposing of securities 
inadvertently registered in the name of minors without requiring the 
appointment of a legal guardian and to provide a means for investing 
funds of a minor, which did not technically qualify for investment under 
the Uniform Gifts to Minors Act, the Department decided to provide 
recognition for natural guardians.
    The voluntary guardianship procedure is wholly a creature of the 
Department's regulations. It was established in recognition of the 
burden placed on an incompetent's estate and his/her family by requiring 
the appointment of a legal guardian to receive the interest on, or to 
redeem securities for, the account of an individual who has become 
incompetent, at least where the incompetent's estate is relatively 
modest. This form of registration is not available on original issue and 
is limited to an aggregate of $20,000 (par amount) of TREASURY DIRECT 
securities. The $20,000 limit in connection with the use of the 
voluntary guardianship procedure is in keeping with the limits used in 
connection with the summary administration of decedents' estates under 
the laws of many States.

                  Section 357.23  Judicial proceedings.

    No comments were received regarding the provisions on judicial 
proceedings. Given their importance, the discussion that accompanied the 
publication thereof in proposed form is included here.
    Judicial proceedings. Under the principle of sovereign immunity, 
neither the Department nor a Federal Reserve Bank, acting as fiscal 
agent of the United States, will recognize a court order that attempts 
to restrain or enjoin the Department or a Federal Reserve Bank from 
making payment on a security or from disposing of a security in 
accordance with instructions of the owner as shown on the Department's 
records.

[[Page 414]]

    ``The Department will recognize a final court order affecting 
ownership rights in TREASURY DIRECT securities provided that the order 
is consistent with the provisions of subpart C and the terms and 
conditions of the security, and the appropriate evidence, as described 
in Sec. 357.23(c), is supplied to the Department. For example, the 
Department may recognize final orders arising from divorce or 
dissolution of marriage, creditor or probate proceedings, or cases 
involving application of a State slayer's act. The Department will also 
recognize a transaction request submitted by a person appointed by a 
court and having authority under an order of a court to dispose of the 
security or payment with respect thereto, provided conditions similar to 
those above are met.''

                   Section 357.25  Security interests.

    TREASURY DIRECT is not designed to reflect or handle the various 
types of security interests that may arise in connection with a Treasury 
bond, note or bill. However, the Treasury has from time to time and to a 
limited extent held in safekeeping, for such agencies as the Customs 
Service and Immigration and Naturalization Service, Treasury securities 
submitted in lieu of surety bonds in accordance with 31 U.S.C. 9303. 
While the Federal Reserve Banks handle the majority of such pledges and 
will continue to do so, as this statute requires the Treasury to accept 
these Government obligations so pledged, a provision has been added for 
accepting and holding book-entry securities submitted for such purposes.

                        Section 357.26  Payments.

    (a) General. Most comments focused on the provisions on payments. A 
key feature of TREASURY DIRECT will be the making of payments by the 
direct deposit method (also known as the electronic funds transfer or 
ACH method). Checks will be issued only under extraordinary 
circumstances. A number of comments endorsed the concept of payment by 
direct deposit as an improvement given the difficulties associated with 
checks.
    One comment expressed concern as to who would have the burden of 
resolving errors in cases where a receiving financial institution fails 
to properly credit a payment. The Department has concluded that while 
the direct deposit payment method is not without risks, it is far 
superior to the use of checks, in terms of the risks, potential losses, 
and costs. In a case where a receiving institution fails to act in 
accordance with the instructions given it, the Bureau intends to use its 
best efforts to assist investors in rectifying the error.
    (b) Direct deposit. A number of comments expressed the view that the 
TREASURY DIRECT payment system should adopt either the rules governing 
the direct deposit of Government payments (31 CFR part 210), or the 
rules of the National Automated Clearing House Association (``NACHA 
Rules''), but not separate rules. The final rules have adopted some of 
the existing practices applicable to commercial ACH payments, but it is 
not possible for the Department of the Treasury to conform to all of 
these rules. For example, the Treasury has no authority to indemnify 
recipients of direct deposit payments, although such indemnification by 
a sender is contemplated in the NACHA rules and was advocated in several 
comments. It should also be noted that the rules applicable to TREASURY 
DIRECT payments are modeled, to some extent, on the rules for Government 
direct deposit payments in order to take advantage of the large number 
of entities that are a part of the Government direct deposit network. 
See the discussion under paragraph (b)(2). Where there are unique rules 
applicable to TREASURY DIRECT, however, they are explained here.
    Given the variance between the procedures set out in the proposed 
rules and existing practice, and the increased burdens resulting 
therefrom, several clearing house associations and financial 
institutions requested that the implementation of TREASURY DIRECT be 
delayed from July 1986 to July 1987. The Treasury is satisfied that the 
added burdens that would have been imposed on financial institutions to 
receive TREASURY DIRECT payments under the proposed rules have been 
effectively eliminated in the final rule. Thus, Treasury plans to 
implement the system on or about the original target date. The final 
rules are being published, however, in advance of actual implementation 
so as to give financial institutions an opportunity to make whatever 
remaining, minor procedural changes as may be necessary.
    (b)(1) Information on deposit account at financial institution. The 
proposed regulations provided that the owner of a security in TREASURY 
DIRECT, or in the case of ownership by two individuals, the first-named 
owner, must be an owner of, and so designated, on the account at the 
receiving financial institution. The regulations also provided that in 
any case in which a security is held jointly or with right of 
survivorship, the account at the financial institution should be 
established in a form that assures that the rights of each joint owner 
or survivor will be preserved.
    The rule requiring the naming of the first-named owner on the 
receiving financial institution account was based on tax reporting 
considerations. It has now been determined that the first-named security 
owner need not be named on the receiving deposit account.
    The rule relating to establishment of the receiving account in joint 
ownership cases in

[[Page 415]]

the same form as the registration of the security was intended to be a 
notice to investors of a potential problem, rather than a requirement. 
In cases where an investor intends a beneficiary, joint owner or coowner 
to receive securities after the investor's death, this intention may be 
defeated if the recipient is not also named on the receiving deposit 
account. It is up to the investor to examine his or her particular 
circumstances and determine whether the form in which the deposit 
account will be held is satisfactory. This matter has been clarified in 
paragraph (b)(1)(v) of the final rule. Except for the restriction 
described in paragraph (b)(1)(ii) (see below), the Treasury does not 
intend to establish any limitations on how the receiving deposit account 
is held.
    Several comments addressed the issue of the registration of the 
security versus the title of the deposit account. Two comments pointed 
out that if the deposit account must be in the same form as the 
registration of the security, then existing traditional forms of 
ownership for bank accounts, which do not include all the forms of 
registration for securities held in TREASURY DIRECT, would not suffice. 
Concerns were also expressed that with multiple forms of ownership, 
financial institutions could become involved in disputes with investors. 
As noted above, there is no requirement that the TREASURY DIRECT account 
and the deposit account be identical. The responsibility to choose the 
title of the deposit account rests with the investor.
    Another comment objected to the rule that the first-named security 
owner be named on the receiving deposit account because the rule would 
eliminate the possibility of payment to an account at a financial 
institution in the name of a mutual fund, security dealer, or insurance 
company. Although the change in the tax reporting rule described above 
permits payment to such accounts, as well as to trust accounts, since it 
appears that there is a question as to the capability of some receiving 
institutions to handle such payments, investors are strongly urged to 
consult their financial institution before requesting such payment 
arrangements. See paragraph (b)(1)(iii).
    It should be emphasized that any payments that must be made by check 
will be made in the form in which the TREASURY DIRECT account is held, 
which may be different than the form of the deposit account. Investors 
should be aware that this may result in checks being issued, and thus 
payment being made, in a form different than they intended the direct 
deposit payments to be made. For example, if Investor A purchases a 
security in his or her name alone with instructions that payments be 
directed to a financial institution for the account of a money market 
fund, any checks that must be issued will be drawn in the name of 
Investor A. This could happen if Investor A furnishes erroneous payment 
instructions and the problem cannot be resolved before a payment date, 
in which case a check would be issued.
    The one restriction on the form of the deposit account that appears 
in paragraph (b)(1)(ii) of the final regulations is a rule that where 
the TREASURY DIRECT account is in the name of individual(s), and the 
receiving deposit account is also in the name of individual(s), one of 
the individuals on the TREASURY DIRECT account must be named on the 
deposit account. This rule is intended to provide a means to determine 
the disposition of the payment, if necessary. The Treasury does not 
expect financial institutions to monitor this rule.
    Provision has been made in paragraph (b)(1)(vii) to permit financial 
institutions to request ``mass changes'' of deposit account numbers 
without the submission of individual requests from investors to TREASURY 
DIRECT. This procedure is intended for use where an institution changes 
all or an entire group of its account numbers, typically as a result of 
an organizational change. TREASURY DIRECT will honor requests from a 
financial institution to change deposit account numbers under such 
circumstances, with the understanding that the institution agrees to 
indemnify the Treasury and the security owners for any losses resulting 
from errors made by the institution. If the institutions does not wish 
to use the ``mass change'' procedure, then the change in account number 
must be requested by the investor, using the authorized transaction 
request form. See Sec. 357.28.
    Some institutions voiced concern in general about investor errors in 
furnishing the TREASURY DIRECT a deposit account number and the 
financial institution's routing number. Although the Treasury plans to 
provide as much assistance to investors as possible, the investor must 
bear the responsibility for securing accurate payment information. 
Investors are urged to consult with their receiving institution to 
verify the accuracy of the payment information, since neither the 
Treasury nor the receiving financial institution would be responsible 
for payment errors resulting from erroneous information provided by 
investors.
    The proposed rule provided in Sec. 357.26(b)(1)(iii) that the 
designation of a financial institution by a security owner to receive 
payments from TREASURY DIRECT would constitute the appointment of the 
financial institution as agent for the owner for the receipt of 
payments. The crediting of a payment to the financial institution for 
deposit to the owner's account, in accordance with the owner's 
instructions, would discharge the United States of any further 
responsibility for the payment. One comment noted that, in contrast, the 
rule in 31 CFR 210.13 for Federal recurring payments is that

[[Page 416]]

the United States is not acquitted until the payment is credited to the 
account of the recipient on the books of a financial institution.
    Although, in principle, the same rules should apply to all 
Government payments, the proposed TREASURY DIRECT rule has been retained 
in the final regulations on the basis of the major differences in the 
procedures to be used in TREASURY DIRECT. Most significantly, the 
Treasury will not be securing any written verification (i.e., an 
enrollment form) from a financial institution as to the accuracy of the 
deposit account number and other payment information, as is now the 
practice in the case of payments under 31 CFR part 210. Under these 
circumstances, the Treasury cannot, in effect, guarantee that a payment 
will be credited by a financial institution to the correct account. It 
should also be noted that this rule on acquittance of the United States 
is consistent with the provision in Sec. 357.10(c) of the proposed 
regulations on TRADES. In practice, however, the Treasury plans to 
participate actively in seeking to locate and recover any payments that 
have been misdirected.
    (b)(2) Agreement of financial institution. The proposed rule 
provided, in Sec. 357.26(b)(2), that a financial institution which has 
agreed to accept payments under 31 CFR part 210 shall be deemed to have 
agreed to accept payments from TREASURY DIRECT. The rule further 
provided that an institution could not be designated to receive TREASURY 
DIRECT payments unless it had agreed to accept direct deposit payments 
under 31 CFR part 210.
    One financial institution commented that a receiving institution 
that has already agreed to accept part 210 payments should have the 
choice as to whether to accept payments from TREASURY DIRECT. The basis 
for this comment was the perception that the receipt of TREASURY DIRECT 
payments would require the implementation of special procedures by the 
financial institution and expose it to additional risks. As explained 
earlier, the Treasury has significantly modified the procedures and 
reduced the requirements imposed upon a financial institution in order 
to receive TREASURY DIRECT payments, and decreased as well the risks an 
institution will incur in the receipt of such payments. Thus, the 
proposed rule on eligibility of receiving institutions has been retained 
in the final rule in essentially the same form.
    Two other comments were made to the effect that the category of 
institutions receiving payments should be broadened. In deciding to 
authorize payments to all institutions receiving part 210 payments, the 
Treasury considered the fact that many more institutions are designated 
endpoints for Government (direct deposit) payments than for commercial 
ACH payments. In order to afford investors the widest choice of 
recipient institutions, all institutions that had agreed to accept part 
210 payments were designated as authorized recipients. Treasury has now 
broadened the rule further to also authorize those financial 
institutions that are willing to agree to accept part 210 payments in 
the future. This rule will permit investors to designate institutions 
that are not now receiving Government direct deposit payments as the 
recipients of their TREASURY DIRECT payments if the institutions make 
appropriate arrangements with the Federal Reserve Bank of their 
District.
    (b)(3) Pre-notification. A significant feature of the TREASURY 
DIRECT payment procedure will be the use of a pre-notification message 
sent to the receiving financial institution in advance of the first 
payment. This procedure, already in use for commercial ACH payments, 
alerts the institution that a payment will be made and provides an 
opportunity for verification of the accuracy of the account information.
    The proposed regulations provided that the financial institution 
would be required to reject the pre-notification message within four 
calendar days after the date of receipt if the information contained in 
the message did not agree with the records of the institution or if for 
any other reason the institution would not be able to credit the 
payment. The rules also stated that a failure to reject the message 
within the specified time period would be deemed an acceptance of the 
pre-notification and a warranty that the information in the message was 
accurate.
    Because there was some confusion over when the pre-notification 
message woud be sent, the final rules clarify, in paragraph (b)(3)(i), 
that in most cases, this will occur shortly after establishment of a 
TREASURY DIRECT account. The Treasury has under consideration a system 
change that would permit a second pre-notification to be sent closer to 
the time of the payment if the first payment is to occur a substantial 
length of time after account establishment.
    One of the items of information contained in a pre-notification 
message is the name the investor has indicated appears on the deposit 
account. Comments were received that existing procedures and software do 
not permit automatic verification of the account name. Although there is 
apparently some variation in practice, and some institutions undertake 
to verify the account name information manually, the Treasury has 
decided to drop the account name verification requirement in the final 
rules. This means that under paragraph (b)(3)(ii), a financial 
institution need only verify the account number and type designations on 
the pre-notification message. However, the Treasury urges institutions 
which are able to verify account

[[Page 417]]

names to do so and encourages the development of software that would 
have this capability.
    A number of comments urged that the four-day period provided for an 
institution to reject a pre-notification message be lengthened. After 
consideration of the various alternatives proposed, the Treasury has 
concluded that an eight-day period will meet the needs of most 
institutions. See paragraph (b)(3)(ii) of the final rule. In responding 
to a pre-notification message, an institution may use the NACHA's 
``notification of change'' procedure, standardized automated rejection 
codes, or any other similar standard procedure. Upon receipt of such 
notification, the Treasury will either make the necessary changes in the 
TREASURY DIRECT account or contact the investor, depending on the 
circumstances.
    One commentator objected to the warranty by the receiving 
institution as to the accuracy of the pre-notification information, 
particularly in view of the manual verification or changes in procedures 
that would be required, and the resulting possibility of error. As 
previously noted, the requirement to verify an account name has been 
eliminated. In addition, language has been added to make it clear that 
the verification is limited to the time of pre-notification. The 
Treasury is of the view that the warranty is a useful concept in 
encouraging institutions to respond to pre-notification messages and 
will benefit all concerned by increasing the likelihood that payments 
will be made accurately and to the appropriate party.
    (b)(5) Responsibility of financial institution. The proposed 
regulations provided, in Sec. 357.26(b)(5)(ii), that a financial 
institution that receives a TREASURY DIRECT payment on behalf of a 
customer would be required to promptly notify the Treasury when it has 
made a change in the status or ownership of the customer's deposit 
account, such as the deletion of the first-named owner of the security 
from the title of the account, or when the institution is on notice of 
the death or incompetency of the owner of the deposit account.
    Several financial institutions objected to this requirement on the 
grounds that it would be burdensome and would require the development of 
new procedures to monitor the changes in deposit accounts. Specifically, 
several institutions indicated they would be unable to relate the 
receipt of TREASURY DIRECT payments, which would be handled in a 
centralized area of the institution, to the changes being made in a 
deposit account, which are handled in another operational area of the 
institution. These institutions said they would not necessarily be aware 
of who is the first-named owner of the security in TREASURY DIRECT, and 
that more responsibility should be placed on the security owner in 
reporting changes.
    In response to these comments, the Treasury has narrowed the 
notification rule, in paragraph (b)(5)(ii) of the final rule, to require 
a financial institution to notify TREASURY DIRECT only in cases where it 
is on notice of the death or legal incapacity of an individual named on 
the deposit account, or where it is on notice of the dissolution of a 
corporation named in the deposit account. Upon receipt of notice by the 
area of the institution that receives credit payments, the institution 
will be required to return any TREASURY DIRECT payments received 
thereafter.
    (b)(6) Payments in error/duplicate payments. The proposed 
regulations, in Sec. 357.26(b)(6), set out rules describing the 
procedure that would be followed in cases where the Treasury or a 
Federal Reserve Bank has made a duplicate payment or a payment in error. 
First, the financial institution to which the payment was directed would 
be provided with a notice asking for the return of the amount of the 
payment remaining in the deposit account. If the financial institution 
were unable to return any part of the payment, it would be required to 
notify the Treasury or its Federal Reserve Bank, and provide the names 
and addresses of the persons who withdrew funds from the deposit account 
after the date of the duplicate payment or the payment in error. If the 
financial institution did not respond to the notice within 30 days, the 
financial institution's account at its Federal Reserve Bank could be 
debited in the amount of the duplicate or improper payment.
    Several institutions raised objections about various aspects of the 
above procedures. One stated that 30 days was an insufficient time to 
respond and urged conformity with the rules in 31 CFR part 210 
permitting a 60-day response time. Some objected to furnishing 
information about the persons who withdrew money from an account. 
Several objected in principle to the provision authorizing the debiting 
of their accounts. Several comments indicated that if a payment is 
returned by a financial institution using an automated payment reversal 
procedure, then only the full amount of the payment (not a partial 
amount) can be reversed.
    In the final rule, the Treasury has clarified the procedures. The 
requirement to provide the names of persons who withdrew funds from an 
account has been changed. In paragraph (b)(6)(i), financial institutions 
are asked to provide only such information as they have about the 
matter. The debiting of an institution's account at a Federal Reserve 
Bank is intended to be simply a last resort if the institution fails 
totally to respond to the notice of a duplicate payment or payment made 
in error. See paragraph (b)(6)(iii). The time provided for response to 
this notice has been lengthened to 60 days.

[[Page 418]]

    The final rule has also been clarified in paragraph (b)(6)(i) to 
provide that the amount that should be returned is an amount equal to 
the payment. The Treasury reserves the right, however, to request the 
return by other than automated means of a partial amount of a payment 
made in error. It is anticipated that such a procedure would occur only 
if the notice of a payment made in error is not issued immediately after 
the payment was made.
    (d) Handling of payments by Federal Reserve Banks. Some of the 
comments raised a question about the liability of the Federal Reserve 
Banks in making payments. The proposed rule, in Sec. 357.26(d)(2), 
provided that each Federal Reserve Bank would be responsible only to the 
Department and would not be liable to any other party for any loss 
resulting from its handling of payments. This rule was taken from the 
existing regulations in 31 CFR part 210 (see Sec. 210.3(f)), and is 
simply a restatement of existing law.
    In making payments, the Federal Reserve Banks are acting in the 
capacity as fiscal agents of the United States, pursuant to 12 U.S.C. 
391. They are not acting in an individual (banking) capacity. If a 
Federal Reserve Bank misdirects a payment contrary to instructions 
provided by the investor, the United States, as principal, may remain 
liable to the investor for the payment. The United States could seek to 
recover any loss from its agent, the Fedeal Reserve Bank. However, 
because the proposed rule simply stated a legal conclusion and tended to 
create the impression that the rule was broader than intended, it has 
been omitted from the final regulations.

                 Section 357.31  Certifying individuals.

    For clarity, the warranties which accompany the use of a ``Signature 
guaranteed'' stamp have been set out.

            Section 357.42  Preservation of existing rights.

    This section has been deleted. The same subject-matter will be 
covered in Sec. 357.1, as finally adopted.

   Section 357.43  Liability of Department and Federal Reserve Banks.

    This section was published as Sec. 357.42 in the notice of proposed 
rulemaking for TRADES. The final version will be published after all the 
comments on the rulemaking for TRADES have been reviewed and considered.

         Section 357.46  Supplements, amendments, or revisions.

    Provision for ``charges and fees for services and maintenance of 
book-entry Treasury securities'' has been added in the event 
circumstances should dictate their imposition.

[51 FR 18260, May 16, 1986; 51 FR 18884, May 23, 1986]

                Appendix B to Part 357--TRADES Commentary

                              Introduction

    The adoption of regulations for the Treasury/Reserve Automated Debt 
Entry System (``TRADES'') is the culmination of a multi-year Treasury 
process of moving from issuing securities only in definitive (physical/
certificated/paper) form to issuing securities exclusively in book-entry 
form. The TRADES regulations provide the legal framework for all 
commercially-maintained Treasury book-entry securities. For a more 
detailed explanation of the procedural and legal development of book-
entry and the TRADES regulations, see the preamble to the rule proposed 
March 4, 1996 (61 FR 8420), as well as the earlier proposals cited 
therein 51 FR 8846 (March 14, 1986); 51 FR 43027 (November 28, 1986); 57 
FR 12244 (April 9, 1992).

                Comparison of TRADES and Treasury Direct

    A person may hold interests in Treasury book-entry securities either 
in TRADES \1\ or TREASURY DIRECT. The following summarizes the major 
differences between the two systems.
---------------------------------------------------------------------------

    \1\ In TRADES a Person's interest in a Treasury book-entry security 
is a Security Entitlement, as described in TRADES. A Participant's 
interest in a marketable Treasury book-entry security also is a Security 
Entitlement. A Participant's Security Entitlement is different than a 
Security Entitlement as described in Revised Article 8, with respect to 
the Participant's rights against the issuer. A non-Participant's 
Security Entitlement is described in Revised Article 8.
---------------------------------------------------------------------------

    Persons holding Treasury book-entry securities in TRADES hold their 
interests in such securities in a tiered system of ownership accounts. 
In TRADES, Treasury, through its fiscal agents, the Federal Reserve 
Banks, recognizes the identity only of Participants (persons with a 
direct account relationship with a Federal Reserve Bank). While 
Participants may be beneficial owners of interests in Treasury book-
entry securities, there are many beneficial owners of such interests 
that are not Participants. Such beneficial owners hold their interests 
through one or more Securities Intermediaries such as banks, brokerage 
firms or securities clearing organizations.
    In TRADES, the rights of non-Participant beneficial owners may be 
exercised only

[[Page 419]]

through their Securities Intermediaries. Neither Treasury nor the 
Federal Reserve Banks have any obligation to a non-Participant 
beneficial owner of an interest in a Treasury book-entry security. Two 
examples illustrate this principle. First, except where a pledge has 
been recorded directly on the books of a Federal Reserve Bank pursuant 
to Sec. 357.12(c)(1), Federal Reserve Banks, as Treasury's fiscal 
agents, will act only on instructions of the Participant in whose 
Securities Account the Treasury book-entry security is maintained in 
recording transfers of an interest in a Treasury book-entry security. A 
beneficial owner of the interest that is a non-Participant has no 
ability to direct a transfer on the books of a Federal Reserve Bank. 
Second, Treasury discharges its payment obligation with respect to a 
Treasury book-entry security when payment is credited to a Participant's 
account or paid in accordance with the Participant's instructions. 
Neither Treasury nor a Federal Reserve Bank has any payment obligation 
to a non-Participant beneficial owner of an interest in a Treasury book-
entry security. A non-Participant beneficial owner receives its payment 
when its Securities Intermediary credits the owner's account.
    Persons holding Treasury book-entry securities in TREASURY DIRECT, 
on the other hand, hold their securities accounts on records maintained 
by Treasury through its fiscal agents, the Federal Reserve Banks. The 
primary characteristic of TREASURY DIRECT is a direct account 
relationship between the beneficial owner of a Treasury book-entry 
security and Treasury. In TREASURY DIRECT, Treasury discharges its 
payment obligation when payment is credited to the depository 
institution specified by the beneficial owner of the Treasury book-entry 
security, paid directly to the beneficial owner by check, or paid in 
accordance with the beneficial owner's instructions. Unlike TRADES, 
TREASURY DIRECT does not provide a mechanism for the exchange of cash to 
settle a secondary market transaction, nor are pledges of Treasury book-
entry securities held in TREASURY DIRECT generally recognized. 
Accordingly, TREASURY DIRECT is suited for persons who plan to hold 
their Treasury securities until maturity, and provides an alternative 
for investors who are concerned about holding securities through 
intermediaries and who do not wish to hold their interests in Treasury 
securities indirectly in TRADES.

                           Scope of Regulation

    Just as the scope of Revised Article 8 is limited,\2\ the scope of 
this regulation is limited. It is not a comprehensive codification of 
the law governing securities, transactions in securities or the law of 
contracts for the purchase or sale of securities. Similarly, it is not a 
codification of all laws that could affect a person's interest in a 
Treasury book-entry security. For example, state laws regarding divorce 
or intestate succession could well affect which persons have rights in 
the interest in a Treasury book-entry security. Moreover, the 
regulations deal with certain aspects of transactions in Treasury 
securities, such as perfection of a security interest and its effects 
and not other aspects, such as the contractual relationship between a 
debtor and its secured party, which are left to applicable law \3\. See 
the discussion under Sec. 357.10 of the Section-by-Section Analysis.
---------------------------------------------------------------------------

    \2\ U.C.C. Revised Article 8, Prefatory Note at 12.
    \3\ The regulations in 31 CFR 306.118(b), which are being supplanted 
by TRADES, state that ``applicable law'' covers how a transfer or pledge 
is ``effected'' as well as perfected. Except with respect to security 
interests marked on the books of a Federal Reserve Bank, TRADES does not 
address how a security interest in a Treasury book-entry security is 
created or what law governs the creation of a security interest. Section 
357.11(a) of TRADES, which establishes the choice of law for interests 
other than those covered by Sec. 357.10, addresses the choice of law 
with respect to the perfection, effect of perfection or non-perfection, 
and priority of security interests, but does not address the law 
governing creation or attachment of a security interest. This is 
consistent with the scope and choice of law provisions of Revised 
Article 8.
---------------------------------------------------------------------------

                       Section-by-Section Analysis

                 Section 357.0  Dual book-entry systems.

    Section 357.0 sets forth that Treasury provides two systems for 
maintaining Treasury book-entry securities--TRADES and TREASURY DIRECT. 
Subpart A of part 357 of 31 CFR contains general information about 
TRADES and TREASURY DIRECT. Subpart B contains the TRADES regulations. 
Subpart C contains the TREASURY DIRECT regulations. Subpart D contains 
miscellaneous provisions. Thus, in its totality, part 357 sets forth in 
one place the complete set of governing rules for Treasury securities 
issued in book-entry form.

                     Section 357.1  Effective date.

    Section 357.1 establishes the effective date for TRADES. TRADES 
applies to outstanding securities formerly governed by 31 CFR part 306, 
subpart O. Conforming changes to parts 306, 356, and 358 are being made 
to coincide with the publication of TRADES in final form. Consistent 
with the approach set forth in Revised Article 8 (see Sec. 8-603 and the 
official comment thereto), on and after the

[[Page 420]]

effective date these regulations will apply to all transactions, 
including transactions commenced prior to the effective date. Revised 
Article 8, in Section 8-603, gave secured parties four months after the 
effective date to take action to continue the perfection of their 
security interests. TRADES, through its delayed effectiveness, provides 
a similar period. In TRADES, January 1, 1997, becomes the date by which 
such actions must be completed.
    The effective date for TRADES is January 1, 1997. While TRADES is 
based in large part on Revised Article 8 that has received widespread 
attention in the financial community and already has been adopted in 28 
states,\4\ Treasury has determined that TRADES will be effective on 
January 1, 1997, to ensure a smooth transition to TRADES. In making that 
determination, Treasury has taken into account the time required by 
other Government-Sponsored Enterprises (GSEs) to promulgate similar 
regulations for their securities. Such an effective date, when combined 
with TRADES having been published in proposed form with a 60-day comment 
period, should provide sufficient time for an orderly transition to the 
new TRADES rules.
---------------------------------------------------------------------------

    \4\ As of August 1, 1996, those states are: Alabama, Alaska, 
Arizona, Arkansas, Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, 
Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, 
Nebraska, New Mexico, Oklahoma, Oregon, Pennsylvania, Texas, Utah, 
Vermont, Virginia, Washington, West Virginia and Wyoming. See discussion 
accompanying footnote 11.
---------------------------------------------------------------------------

                       Section 357.2  Definitions.

    Section 357.2 contains definitions for use in subparts B and C. 
While most of the definitions are straightforward, four terms--
Participant, Entitlement Holder, Security Entitlement and Securities 
Intermediary--are critical to an understanding of the proposed TRADES 
regulations.
    (a) Participant. A Participant is a person that has a securities 
account relationship in its name with a Federal Reserve Bank. 
Accordingly, the Federal Reserve Bank and Treasury know both the 
identity of the persons maintaining these accounts and the Treasury 
book-entry securities held in these accounts.
    (b) Securities Intermediary. Securities Intermediaries are persons 
(other than individuals, except as described below) that are in the 
business of holding interests in Treasury book-entry securities for 
others. Participants can be, and usually are, Securities Intermediaries.
    In addition, entities such as clearing corporations, banks, brokers 
and dealers can be Securities Intermediaries in a single chain of 
ownership of a Treasury security. An individual, unless registered as a 
broker or dealer under the federal securities laws, cannot be a 
Securities Intermediary. As an illustration of a possible chain of 
ownership, in the following chart, the Federal Reserve Bank, Participant 
and Broker-Dealer are all Securities Intermediaries.

                                Treasury
 
                          Federal Reserve Bank
        <3-ln [><3-root>||||<3-ln ]>
                               Participant
        <3-ln [><3-root>||||<3-ln ]>
                              Broker-Dealer
        <3-ln [><3-root>||||<3-ln ]>
                            Individual Holder
 

    (c) Entitlement Holder. An Entitlement Holder is any person for whom 
a Securities Intermediary holds an interest in a Treasury book-entry 
security. In the above example Individual Holder, Broker-Dealer and 
Participant are all Entitlement Holders. Thus, a person can be both a 
Securities Intermediary and an Entitlement Holder. See also the 
commentary on ``Security Entitlement.''
    (d) Security Entitlement. A Security Entitlement is the interest 
that an Entitlement Holder has in a Treasury book-entry security. In the 
example, Participant, Broker-Dealer and Individual Holder all hold 
Security Entitlements. The rights and property interests associated with 
a Security Entitlement of a Participant held on the books of a Federal 
Reserve Bank (``Participant's Security Entitlement'') are, however, 
different from the rights and property interests associated with other 
Security Entitlements. As provided in Sec. 357.10(a), Federal law 
defines the scope and nature of a Participant's Security Entitlement. 
While TRADES is based in large part on Revised Article 8, the meaning of 
Security Entitlement under federal law is different than under Revised 
Article 8. For example, Participants have a direct claim against the 
United States for interest and principal even though, under state law, 
an Entitlement Holder would only have a claim against its Securities 
Intermediary for such payment. To the extent not inconsistent with this 
regulation, the scope and nature of a Security Entitlement of an 
Entitlement Holder below the level of a Participant, (Broker-dealer and 
Individual Holder in the example above), is defined by applicable state 
law, as determined pursuant to Sec. 357.11. It should also be noted that 
while a Participant's rights have Federal law components under 
Sec. 357.10(a), the nature of a Security Entitlement held by a lower 
tier intermediary on the books of a Participant is determined pursuant 
to applicable law as provided in Sec. 357.11.

[[Page 421]]

   Section 357.10  Law governing the United States and Reserve Banks.

    Section 357.10(a) provides that the rights and obligations of the 
United States and the Federal Reserve Banks (with one exception detailed 
below), with respect to both the TRADES system and Treasury book-entry 
securities maintained in TRADES are governed solely and exclusively by 
Federal law. Thus, claims against the United States and Federal Reserve 
Banks of both Participants and all other persons with an interest (or 
claiming an interest) in a Treasury book-entry security maintained in 
TRADES are governed by Federal law. Federal law is defined to include 
TRADES, the offering circulars pursuant to which the Treasury securities 
are sold, the offering announcements and Federal Reserve Bank Operating 
Circulars.\5\ Prior to March 1, 1993, the terms of each offering of 
Treasury securities, except for Treasury bills were set forth in an 
offering circular published in the Federal Register\6\ Since March 1, 
1993, all Treasury book-entry securities have been offered pursuant to a 
uniform offering circular set forth at 31 CFR part 356.
---------------------------------------------------------------------------

    \5\ A ``Federal Reserve Bank Operating Circular'' is defined in 
Sec. 357.2 as the publication issued by each Federal Reserve Bank that 
sets forth the terms and conditions under which the Reserve Bank 
maintains Book-entry Securities Accounts and transfers Book-entry 
Securities.
    \6\ Treasury bills were issued pursuant to one master offering 
circular (31 CFR part 349, removed, and replaced by 31 CFR part 356) 
effective March 1, 1993. (58 FR 412)
---------------------------------------------------------------------------

    While TRADES is based in large measure on Revised Article 8, a 
fundamental principle of these regulations (and a divergence from 
Revised Article 8) is that the obligations of the issuer (the United 
States) and the Federal Reserve Banks, as well as all claims with 
respect to TRADES or a Treasury book-entry security against Treasury or 
a Federal Reserve Bank, are governed solely by Federal law. Thus, for 
example, those parts of Revised Article 8 that detail obligations of 
issuers (or their agents) of securities are not applicable to either the 
United States or Federal Reserve Banks.\7\ In addition, neither the 
United States nor Federal Reserve Banks have any obligations to persons 
holding their interests in a Treasury book-entry security at levels 
below the level of a Participant or to any other person claiming an 
interest in a Treasury book-entry security (with the limited exception 
set out in Sec. 357.12(c)(1)). Thus, there are no derivative rights 
against either the United States or the Federal Reserve Banks.
---------------------------------------------------------------------------

    \7\ The regulations in subpart C of this part set out other 
obligations of the United States and the Federal Reserve Banks for 
securities held in TREASURY DIRECT. These regulations preempt applicable 
state law.
---------------------------------------------------------------------------

    In interpreting this section, it is important to note that the scope 
of TRADES, like that of Revised Article 8, is limited. Accordingly, the 
governing law set forth in Sec. 357.10(a) is applicable only to the 
matters set forth in Sec. 357.10(a). Other laws remain applicable and 
could affect the holders of book-entry securities.
    For example, the tax treatment of Securities Entitlements is outside 
the scope of TRADES and other law (the Federal income tax code) is 
applicable in determining such tax treatment. Similarly, nothing in 
Sec. 357.10(a) limits the applicability of other laws to matters such as 
whether the activities of Participants or Securities Intermediaries with 
respect to interests in Treasury book-entry securities are subject to 
banking or securities laws.
    While TRADES in Sec. 357.10(a) defines what law governs the contract 
between the United States, as issuer, and the holder of a Security 
Entitlement, it is not a complete statement of the contract law 
applicable to the United States or Federal Reserve Banks. For example, 
if a Participant obtains a discount window loan from a Federal Reserve 
Bank and agrees to pledge collateral, including Treasury book-entry 
securities, to the Federal Reserve Bank as security for the loan, 
Sec. 357.10(a) does not establish the law for determining the validity 
or enforceability of the contract or the law applicable to the creation 
and perfection of security interests in property that is not a Treasury 
book-entry security. Section 357.10(a) does provide the law applicable 
for how a security interest in Treasury book-entry securities is 
perfected, the priority of such interest and, if Sec. 357.12(c)(1) is 
applicable, how such security interest is created. Similarly, nothing in 
Sec. 357.10(a) affects the continuing applicability or enforceability of 
Federal Reserve Bank operating circulars such as the circular setting 
forth provisions regarding electronic access to services provided by 
Federal Reserve Banks and agreements executed in connection with such 
circulars.
    The law applicable with respect to interests granted to a Federal 
Reserve Bank depends on the manner in which the security interest is 
granted.
    Where a security interest in favor of a Federal Reserve Bank is 
marked on the books of the Federal Reserve Bank under Section 
357.12(c)(1), Sec. 357.10(a) establishes the applicable law. A security 
interest in favor of a Federal Reserve Bank would be recorded on the 
Federal Reserve Bank's books where, for example, the Federal Reserve 
Bank made a discount window loan to a depository institution and any 
Treasury book-entry securities provided by the depository institution as 
collateral have been deposited to a pledge account on the books of the 
Federal Reserve

[[Page 422]]

Bank. For a borrowing depository institution that is not a Participant, 
the book-entry securities used as collateral generally would be 
deposited to the Federal Reserve Bank pledge account by the borrowing 
institution's Securities Intermediary. See Hypothetical 5.
    Section 357.10(b) sets forth law applicable with respect to security 
interests in favor of a Federal Reserve Bank that have not been marked 
on the books of a Federal Reserve Bank. A security interest in the 
Securities Entitlement of a Participant in favor of a Federal Reserve 
Bank that is not marked on the books of the Federal Reserve Bank is 
governed by the law of the state in which the head office of the Federal 
Reserve Bank is located. Such a security interest could arise, for 
example, where the delivery of book-entry securities to the securities 
account of the Participant results in an overdraft in the Participant's 
Funds Account. The extent to which the Federal Reserve Bank has an 
interest in the Participant's book-entry securities to secure the 
overdraft therefore would be determined under the law of the state in 
which the Reserve Bank's head office is located. If the State in which 
the head office of the Federal Reserve Bank is located has not adopted 
Revised Article 8, under Sec. 357.10(c) that State is deemed to have 
adopted Revised Article 8.
    In certain very limited circumstances, a Federal Reserve Bank also 
may have a security interest in the book-entry securities of a non-
Participant that is not marked on the books of the Federal Reserve Bank. 
Section 357.10(b) provides a separate rule for such a security interest, 
which would be governed by the law of the non-Participant's Securities 
Intermediary, as determined under Sec. 357.11. Under Sec. 357.11, the 
perfection, effect of perfection, and priority of a security interest 
created under such an agreement would be governed by the law of the 
Securities Intermediary's jurisdiction, as determined under 
Sec. 357.11(b). Under Sec. 357.11(d), if the jurisdiction specified in 
Sec. 357.11(b) has not adopted Revised Article 8, jurisdiction would be 
deemed to have adopted Revised Article 8.\8\
---------------------------------------------------------------------------

    \8\ An interest in book-entry securities of a non-Participant that 
is not marked on the books of the Federal Reserve Bank, while uncommon, 
could arise where the Federal Reserve Bank lends to a non-Participant 
depository institution and enters into a triparty agreement with the 
depository institution and its Securities Intermediary rather than 
requiring the deposit of the book-entry securities in a pledge account 
on the books of the Federal Reserve Bank through an instruction given by 
the non-Participant depository institution to its Securities 
Intermediary.
---------------------------------------------------------------------------

    For purposes of applying the state law chosen under the rules of 
Sec. 357.10(b), Federal Reserve Banks are treated as clearing 
corporations. As a result, a security interest in a Securities 
Entitlement of a Participant in favor of a Federal Reserve Bank under 
Sec. 357.12(c)(2) has the same priority as security interests granted to 
other clearing corporations under state law. This is consistent with the 
treatment accorded to Federal Reserve Banks generally under Revised 
Article 8.

             Section 357.11  Law governing other interests.

 (a) Law governing the rights and obligation of Participants and third 
parties. Section 357.11 is a choice of law rule. The substantive matters 
subject to this choice of law rule are set forth in Sec. 357.11(a). The 
  matters set forth in Sec. 357.11(a) are meant to be coextensive with 
 those matters covered by Revised Article 8 with respect to a person's 
interest in a Treasury book-entry security (other than those related to 
a person's relationship to Treasury or a Federal Reserve Bank which are 
  governed solely by federal law). For purposes of these choice of law 
            rules Participants are Securities Intermediaries.

    Section 357.11(b) adopts Revised Article 8's general choice of law 
rule. Section 357.11(c) sets forth a special choice of law rule with 
respect to security interests perfected automatically or by filing, 
which also is included in Revised Article 8. Generally, the law 
applicable to the Securities Intermediary will govern matters involving 
an interest in a book-entry security held through that intermediary. 
This approach is not followed with respect to perfection of security 
interests automatically or by filing. In those cases, the law of the 
jurisdiction in which the debtor is located is the governing law. Since 
filing systems are based on the location of the debtor, this approach 
should reduce uncertainty and preserve the normal practice of searching 
records based on the debtor's location.\9\ The language ``person 
creating a security interest'' is used in lieu of the term ``debtor'' in 
this provision to avoid any confusion. The word ``debtor'' has two 
meanings in the Uniform Commercial Code and the expression ``person 
creating a security interest'' provides clarity with respect to who is 
covered by this section. The term does not refer to a creditor. The 
language ``is located'' is intended to conform to its meaning under 
applicable law, as it may be amended from

[[Page 423]]

time to time. See, e.g., U.C.C. section 9-103(3)(d). Section 357.11(d) 
provides for the application of Revised Article 8 if the choice of law 
analysis required by Sec. 357.11(b) results in the choice of the law of 
a State that has not yet adopted Revised Article 8. As noted elsewhere, 
in such a situation, the State's law is viewed as if it had adopted 
Revised Article 8. This section also provides that, for purposes of 
applying state law, the Federal Reserve Banks are clearing corporations 
and Participants' interests in book-entry securities are Security 
Entitlements.
---------------------------------------------------------------------------

    \9\ The substantive effect of filing is limited and applies only in 
states which have adopted Revised Article 8. Since the effect of filing 
is a unique state law matter, in this one area, Treasury has determined 
that possible lack of uniformity does not justify altering state law.
---------------------------------------------------------------------------

 (b) Limited scope of Federal preemption. In an earlier TRADES proposal 
Treasury contemplated adopting a comprehensive regulation governing the 
rights of all persons in Treasury book-entry securities held in TRADES. 
 Such an approach was proposed because Treasury believed that a uniform 
   rule was necessary to preserve the efficiency and liquidity of the 
market for Treasury securities--the most liquid and efficient market in 
 the world. Treasury believed then, and believes now, that the material 
  rights of a holder in the United States of an interest in a Treasury 
 security should not vary solely by virtue of such holder's geographic 
 location or the location of the financial institution through which it 
 holds its interest in Treasury securities. In light of Revised Article 
     8, Treasury has determined that it is possible to achieve this 
     uniformity without developing an independent system of Federal 
    commercial law.\10\ The questions inherent in a tiered system of 
 ownership have been analyzed, and, in Treasury's view, satisfactorily 
                     addressed by Revised Article 8.
---------------------------------------------------------------------------

    \10\ As noted previously, the substantive scope of this regulation 
is limited.
---------------------------------------------------------------------------

    As of August 1, 1996, 28 states have adopted Revised Article 8 and 
Treasury understands that it will soon be adopted in additional states. 
As with all uniform laws, the adoption process takes several years. In 
order to assure uniformity, in light of the unavoidable delays in the 
state-by-state adoption process of Revised Article 8, Treasury is 
promulgating regulations with a limited form of preemption. As provided 
in both Secs. 357.10(c) and 357.11(d), if the choice of law rules set 
forth in TRADES would lead to the application of the law of a State that 
has not yet adopted Revised Article 8, TRADES will apply Revised Article 
8 (with conforming and miscellaneous amendments to other Articles) in 
the form approved by the ALI and NCCUSL. Treasury expects that these 
provisions will be operative only during the state-by-state adoption 
process and would plan to amend TRADES to delete reference to these 
provisions once the adoption process has been completed.
    While Revised Article 8 is defined to mean the official text of 
Article 8 as approved by the ALI and NCCUSL, Treasury recognizes that 
states may make minor changes in that text when adopting Article 8. 
Treasury has concluded that minor changes should not prevent Revised 
Article 8, as adopted by a state, from being the appropriate law. In 
other words, if a state passes a version of Article 8 that is 
substantially identical to Revised Article 8, reference to Revised 
Article 8 (as defined) would no longer be required. Treasury has 
determined that the versions of Article 8 passed by 50\11\ states that 
have enacted Article 8 meet this standard. Accordingly, Secs. 357.10(c) 
and 357.11(d) would not be applicable if the choice of law provisions of 
TRADES directed a person to one of those states. As additional states 
adopt Revised Article 8, Treasury will provide notice in the Federal 
Register as to whether the enactments are ``substantially identical'' to 
the uniform version for purposes of these regulations and on an annual 
basis, the Commentary will be amended to reflect subsequent enactments. 
This approach represents a significantly reduced form of preemption of 
state law from former versions of TRADES and preserves Treasury's 
preeminent interest in a uniform system of rules applicable to all 
holders of interests in Treasury book-entry securities.
---------------------------------------------------------------------------

    \11\ Alabama, Alaska, Arizona, Arkansas, California, Colorado, 
Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, 
Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, 
Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, 
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New 
York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, 
Pennsylvania, Puerto Rico, South Dakota, Tennessee, Texas, Utah, 
Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

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

[[Page 424]]

     Section 357.12  Obtaining an interest in a book-entry security.

 (a) Creation of a Participant's Security Entitlement. A Participant's 
interest in a Treasury book-entry security is a Securities Entitlement. 
 Section 357.12(a) provides that a Participant's Securities Entitlement 
 is created when a Federal Reserve Bank indicates by book entry that a 
  Book-entry Security has been credited to a Participant's Securities 
  Account. Instead of the concept of initial credit and transfer of a 
Treasury book-entry security, as set forth in the existing regulations, 
  this proposal focuses on the creation of a Participant's Securities 
  Entitlement and, in this way, is similar to Section 8-501 of Revised 
                               Article 8.

    The regulation focuses on the creation of a Participant's Security 
Entitlement because Security Entitlement is the term used to describe 
the Participant's interest in a Treasury book-entry security. Once a 
Participant obtains that interest, the regulation sets forth what that 
interest is. Thus, as provided in Sec. 357.10, federal law describes a 
Participant's rights against the United States and the Federal Reserve 
Bank where it maintains its Securities Account. To the extent not 
inconsistent with Sec. 357.10, Sec. 357.11 describes the applicable law 
to determine Participants' rights and obligations with respect to all 
other persons. Under these regulations, Participants can still transfer 
their interests in a Treasury book-entry security as they did before--by 
issuing a Transfer Message to the Federal Reserve Bank where they hold 
such interest. Transfer of interests between Participants can occur by a 
Participant holding such interest issuing a Transfer Message. As a 
result of such message, the Federal Reserve Bank will make a book entry 
in favor of the receiving Participant (thereby creating a Security 
Entitlement in favor of such Participant) and also will make a book 
entry deleting the initiator Participant's interest in such Treasury 
book-entry security (thereby eliminating that Participant's Security 
Entitlement). In addition, if authorized under applicable state law, 
Participants may enter into agreements with other Participants that, as 
to the Participants, constitute a transfer. Such action is without 
effect to either the United States or a Federal Reserve Bank.

(b) Creation and priority of a Security Interest. (i) Security Interests 
    of the United States. Section 357.12(b) provides that a security 
 interest in favor of the United States has priority over the interests 
of any other person in a Treasury book-entry security. The United States 
   obtains security interests in Treasury securities as collateral to 
 secure funds in a variety of situations such as Treasury Tax and Loan 
  accounts; government agency funds or funds under the control of the 
Federal Courts held at financial institutions; and securities pledged in 
  lieu of surety by contractors and others. The priority provided the 
   United States in these situations is consistent with existing law.

    In addition, Federal Reserve Banks do recognize on their books and 
records security interests in favor of the United States. In that 
situation, the Federal Reserve Bank will not transfer the security 
without the permission of the United States. This section provides that 
a Federal Reserve Bank may rely exclusively on the directions of an 
authorized representative of the United States to transfer a security 
and is protected in so relying. Ordinarily, an authorized representative 
of the United States would take such action under circumstances such as 
the default or insolvency of the pledgor.
    (ii) Security Interests on the books of a Reserve Bank. Where 
required by Federal law or regulation or pursuant to a specific 
agreement with a Federal Reserve Bank, a security interest in favor of a 
Federal Reserve Bank or other person may be created or perfected by a 
Federal Reserve Bank marking its books to record the security interest 
under Sec. 357.12(c)(1). An example of a security interest that is 
marked on the books of a Federal Reserve Bank would be the pledge in 
favor of a Federal Reserve Bank of a Participant's book-entry securities 
as collateral for a discount window loan.\12\ For limited categories of 
pledges, Federal Reserve Banks may agree to record a security interest 
in favor of a third party on their books. For example, in some 
circumstances a Federal Reserve Bank may permit the establishment of

[[Page 425]]

a pledge account to hold book-entry securities pledged to governmental 
entities other than the United States government. It is important to 
note that there is no obligation for either Treasury or a Federal 
Reserve Bank to agree to record a security interest on the books of a 
Federal Reserve Bank, except as required by Federal law or regulation. 
If they do so, the security interest is perfected when the Federal 
Reserve Bank records a security interest on its books. In addition, the 
security interest has priority over all other interests in the Treasury 
book-entry security except an interest of the United States.
---------------------------------------------------------------------------

    \12\ Book-entry securities pledged by a non-Participant to a Federal 
Reserve Bank generally would be deposited by the non-Participant's 
Securities Intermediary to a pledge account at the Federal Reserve Bank, 
and therefore also would be marked on the books of the Federal Reserve 
Bank. See the discussion under D. (Sec. 357.10).
---------------------------------------------------------------------------

    (iii) Other Security Interests. As provided in Sec. 357.12(c)(2), a 
security interest in a book-entry security may be perfected by any 
method available under applicable state law, as determined under 
Sec. 357.10(b) or Sec. 357.11.\13\ The perfection and priority of such 
interests shall be governed by applicable law. Security interests under 
this section may include security interests in favor of a Federal 
Reserve Bank, such as a clearing lien or pledge by a non-participant of 
book-entry securities held through a Securities Intermediary where the 
securities have not been deposited to a Federal Reserve Bank pledge 
account. Consistent with Revised Article 8, a Federal Reserve Bank would 
be treated as a clearing corporation under the applicable state law.
---------------------------------------------------------------------------

    \13\ Under both of these sections, if the state has not yet adopted 
Revised Article 8, the applicable law would be that state's law as it 
would be amended by Revised Article 8.
---------------------------------------------------------------------------

    If a Person perfects a security interest pursuant to 
Sec. 357.12(c)(2), obligations of the Treasury and the Federal Reserve 
Banks with respect to that security interest are limited. Specifically, 
unless special arrangements are agreed to by the United States or a 
Federal Reserve Bank pursuant to Sec. 357.12(c)(1), neither the Federal 
Reserve Bank nor the United States will recognize the interests of any 
person other than the person in whose securities account the interest in 
a Treasury book-entry security is maintained. This does not mean that 
such a security interest is invalid. Rather, it means that the 
creditor's recourse will be solely against the debtor Participant or 
other third party.

   Section 357.13  Rights and obligations of Treasury and the Reserve 
                                 Banks.

    (a) Adverse claims. Section 357.13(a) sets forth the general rule 
that, with limited exceptions, Treasury and the Federal Reserve Banks 
will recognize only the interest of a Participant in a Treasury book-
entry security in whose Securities Account such interest is maintained.
    As noted previously, Treasury book-entry securities maintained in 
TRADES are held in a tiered system of ownership. The records of a 
Federal Reserve Bank reflect only the ownership at the top tier. 
Institutions maintaining a Securities Account with a Federal Reserve 
Bank frequently will hold interests in Treasury book-entry securities 
for their customers (which can include broker-dealers and other 
Securities Intermediaries) and in certain cases those customers will 
hold interests in securities for their customers. Accordingly, neither 
Treasury nor a Federal Reserve Bank will know the identity or recognize 
a claim of a Participant's customer if that customer were to present it 
to Treasury or a Federal Reserve Bank.
    In addition, except in the limited case where a security interest is 
marked on the books of a Federal Reserve Bank pursuant to 
Sec. 357.12(c)(1), neither the Treasury nor a Federal Reserve Bank will 
recognize the claims of any other person asserting a claim in a Treasury 
book-entry security. Persons at levels below the Participant level must 
present their claims to their Securities Intermediary.
    (b) Payment obligations. Section 357.13(b) contains a corollary to 
the rule set forth in Sec. 357.13(a). This section provides that 
Treasury discharges its payment responsibility with respect to a 
security that it has issued when a Federal Reserve Bank credits the 
funds account of a Participant with amounts due on that security or 
makes payment in some other manner specified by the Participant. This is 
consistent with existing law and the first TRADES 
proposal.\14\ In Revised Article 8, the issuer discharges its 
obligations when it makes payment to an owner registered on its books. 
Under common commercial practice, the registered owner in the indirect 
system may be a clearing corporation or the clearing corporation's 
nominee. Although the Federal Reserve Banks are treated as clearing 
corporations under both Revised Article 8 and TRADES, Treasury remains 
liable until payment is made to, or in accordance with the instructions 
of, a Participant. Section 357.13(b)(2) establishes the mechanism of how 
Treasury book-entry securities are paid at maturity. It is intended to 
cover a variety of procedures, including where the proceeds of pledged 
securities are credited to a suspense account pending substitution or 
release. This paragraph makes clear that the payment takes place 
automatically and that, unlike with physical certificates, there is no 
act of presentment required by the Participant.
---------------------------------------------------------------------------

    \14\ 51 FR 8846, 8848 (March 14, 1986).
---------------------------------------------------------------------------

               Section 357.14  Authority of Reserve Banks.

    Section 357.14 provides that Federal Reserve Banks are authorized, 
as fiscal agents of Treasury, to operate the commercial book-entry 
system for Treasury.

[[Page 426]]

                        Section 357.44  Notices.

    Section 357.44 contains a revised version of a provision that 
appeared in earlier TRADES proposals. Similar to the rule in Revised 
Article 8 (see section 8-112), it provides where certain legal process 
should be directed. While providing instructions on where notice should 
be directed, it makes clear that the regulations do not establish 
whether a Federal Reserve Bank is required to honor any such order or 
notice.

                            J.  Hypotheticals

HYPOTHETICAL 1
 
                                TREASURY
 
                          FEDERAL RESERVE BANK
        <3-ln [><3-root>||||<3-ln ]>
                               PARTICIPANT
        <3-ln [><3-root>||||<3-ln ]>
                                 DEALER
        <3-ln [><3-root>||||<3-ln ]>
                                INVESTOR
 

    The first hypothetical is designed to show what law applies at 
different levels of the tiered book-entry system. TRADES provides that 
federal law, and only federal law (defined in Sec. 357.10(a)), governs 
the rights and obligations of the United States and the Federal Reserve 
Banks (except for those matters involving Federal Reserve Banks set 
forth in Sec. 357.10(b)). Thus, for example, Treasury discharges its 
payment obligations with respect to a security it has issued in the 
manner described in Sec. 357.13(b). Federal law both defines the payment 
obligation and describes how Treasury fulfills that obligation. Those 
portions of Revised Article 8 dealing with issuer obligations are not 
applicable to Treasury or the Federal Reserve Banks.\15\ Similarly, with 
certain limited exceptions as set forth in Sec. 357.12(c)(1), Treasury 
and the Federal Reserve Banks will recognize only the interest of a 
Participant in a Treasury book-entry security in whose Security Account 
the interest is maintained. Accordingly, as a matter of federal law, 
neither Treasury nor a Federal Reserve Bank will recognize any claim by 
Dealer or Investor.\16\
---------------------------------------------------------------------------

    \15\ As provided in Sec. 357.14, Federal Reserve Banks, among other 
things, effect transfers of book-entry securities between Participants' 
Security Accounts.
    \16\ One comment questioned whether similar language in the March 4, 
1996 release implied that, under Revised Article 8, in the above example 
Investor could have a claim against Participant. No such implication was 
intended. The only point of the language is to make it clear that 
Federal, not state, law governs the rights and obligations of Treasury 
and the Federal Reserve Banks.
---------------------------------------------------------------------------

    In the hypothetical above, as between Participant and Dealer, 
Participant is the Securities Intermediary. With respect to the matters 
set forth in Sec. 357.11(a), the law of the Securities Intermediary's 
jurisdiction governs. Thus, with respect to the matters in 
Sec. 357.11(a), the law of Participant's jurisdiction applies as between 
Participant and Dealer.\17\ If Participant's jurisdiction, as determined 
under Sec. 357.11(b), has not adopted Revised Article 8, the law of 
Participant's jurisdiction, as it would be amended by Revised Article 8, 
applies. Similarly, as between Dealer and Investor, Dealer is a 
Securities Intermediary, with respect to the matters in Sec. 357.11(a), 
the law of Dealer's jurisdiction applies as between Dealer and Investor. 
If Dealer's jurisdiction has not adopted Revised Article 8, the law of 
Dealer's jurisdiction, as it would be amended by Article 8, applies.
---------------------------------------------------------------------------

    \17\ As described in the March 4 Release, the scope of TRADES is 
limited. As a general rule, if a matter is not covered in 
Sec. 357.11(a), TRADES is not applicable. One comment questioned whether 
TRADES covered the creation and attachment of a security interest. The 
omission of creation and attachment in Sec. 357.11(a) is intentional.
---------------------------------------------------------------------------

HYPOTHETICAL 2
    Assume that Dealer A sells its interest in a Treasury book-entry 
security to Dealer B. The transaction likely would take the following 
form. Dealer A will instruct Participant A to transfer its interest in a 
Treasury security to Participant B against cash payment. Dealer B will 
instruct Participant B to transfer cash to Participant A against 
delivery of an interest in the specified securities. Participant A will 
instruct the Federal Reserve Bank to transfer its interest in the 
Treasury security to Participant B against simultaneous credit of cash. 
The Federal Reserve Bank will debit Participant A's security account and 
credit Participant B's security account and simultaneously credit 
Participant A's cash account and debit Participant B's cash account. 
Participant A will mark its books to show that it has debited Dealer A's 
securities account and credited Dealer A's cash account. Participant B 
will mark its books to show the Security Entitlement in the Treasury 
security in favor of Dealer B and a debit against Dealer B's cash 
account. Federal law, set forth in Sec. 357.12(a) provides that 
Participant B acquires its interest in the Treasury book-entry security 
when the Federal Reserve Bank indicates by book-entry that the interest 
in the security has been credited to Participant B's Securities Account. 
Pursuant to Sec. 357.11(a), but subject to Sec. 357.11(d), Participant 
B's jurisdiction governs Dealer B's acquisition of a Securities 
Entitlement from Participant B.

HYPOTHETICAL 3

[[Page 427]]


 
                                TREASURY
 
                          FEDERAL RESERVE BANK
        <3-ln [><3-root>||||<3-ln ]>
                               PARTICIPANT
 

    Assume Participant wishes to obtain a loan from Federal Reserve Bank 
and, as part of the transaction, will grant Federal Reserve Bank a 
security interest in its Securities Entitlement with respect to Treasury 
book-entry securities. The transaction can be accomplished in one of two 
ways. Pursuant to Sec. 357.12(c)(1), the Federal Reserve Bank can mark 
its books to reflect the security interest. As a matter of federal law, 
that action creates and perfects the Federal Reserve Bank's security 
interest and grants the Federal Reserve Bank priority over all other 
claimants (other than the United States pursuant to Sec. 357.12(b)).\18\ 
A second method for completing the transaction, as set forth in 
Sec. 357.12(c)(2), would be to take whatever actions are authorized by 
applicable law. In that case, applicable law is the law of the 
jurisdiction of the head office of the Federal Reserve Bank. If that 
jurisdiction had adopted Revised Article 8, it would be the law of that 
jurisdiction. If that jurisdiction had not adopted Revised Article 8, it 
would be the law of that jurisdiction as if the jurisdiction had adopted 
Revised Article 8. Under Revised Article 8, the Federal Reserve Bank's 
interest would be that of a clearing corporation.
---------------------------------------------------------------------------

    \18\ In certain limited circumstances, a Federal Reserve Bank may 
enter into an agreement under which it agrees to record on its books an 
interest in Participant's book-entry securities in favor of a non-
Participant, such as a governmental entity. Under these circumstances, 
the non-Participant would have a perfected security interest with 
priority over other claimants (other than the United States under 
Sec. 357.12(b)). It should be noted that, as set forth in 
Sec. 357.12(c)(1), there is no requirement that either the United States 
or a Federal Reserve Bank agree to creation and perfection of a security 
interest in this way, except as provided in Sec. 357.12(c)(1).

HYPOTHETICAL 4

                                                    TREASURY
 
                                              FEDERAL RESERVE BANK
                                      <3-ln [><3-root><3-root>|       -||         S||<3-ln ]>
                                                PARTICIPANT A      PARTICIPANT B
 

    Assume that Participant A wishes to borrow from Participant B and 
grant Participant B a security interest in its Security Entitlement in 
Treasury book-entry securities. As provided in Sec. 357.12(c)(2), the 
transaction would be completed pursuant to applicable law determined in 
accordance with 357.11. Although such an interest could be recorded on 
the books of a Federal Reserve Bank under Sec. 357.12(c)(1), Federal 
Reserve Banks generally do not mark their books to record this type of 
security interest for Participants.

HYPOTHETICAL 5

 
                                TREASURY
 
                          FEDERAL RESERVE BANK
        <3-ln [><3-root>||||<3-ln ]>
                              PARTICIPANT A
        <3-ln [><3-root>||||<3-ln ]>
                                DEALER A
        <3-ln [><3-root>||||<3-ln ]>
                                 BANK A
 

    Assume that Bank A wishes to borrow from the Federal Reserve Bank 
and will pledge its interest in Treasury book-entry securities held at 
Dealer A to collateralize that loan. The transaction could be 
accomplished in two ways. Pursuant to Sec. 357.12(c)(1), the interest 
could be created and perfected on the books of a Federal Reserve Bank. 
Such a transaction would take place in the following fashion. Bank A 
could have Dealer A instruct Participant A to deposit securities to a 
pledge account specified by the Federal Reserve Bank. The Federal 
Reserve Bank likely would create an account on its books and specify 
that account to Bank A as the account to receive Bank A's interest in 
Treasury book-entry securities. Participant A, upon receiving Dealer A's 
instructions, would then instruct the Federal Reserve Bank to debit its 
account at the Federal Reserve Bank and credit the account created by 
the Federal Reserve Bank. The second way the transaction could take 
place is by any method permitted by the law of Dealer A's (Bank A's 
Securities Intermediary) jurisdiction. This could involve a tri-party 
agreement among the Federal Reserve Bank, Dealer A, and Bank A. As set 
forth in Sec. 357.11(b)(1), that agreement likely would specify which 
jurisdiction's law is to govern the transaction and could specify that 
such choice of law supersedes any other choice of law agreement 
previously entered into by Dealer A and Bank A. If Dealer A's 
jurisdiction has not adopted Revised Article 8, the applicable law would 
be the law of Dealer A's jurisdiction as it would be amended by Revised 
Article 8.

[61 FR 43631, Aug. 23, 1996, as amended at 62 FR 43284, Aug. 13, 1997; 
63 FR 69191, Dec. 16, 1998]

[[Page 428]]



PART 358--REGULATIONS GOVERNING BOOK-ENTRY CONVERSION OF BEARER CORPORA AND DETACHED BEARER COUPONS--Table of Contents




Sec.
358.0  What does this part cover?
358.1  What special terms apply to this part?
358.2  What regulations cover these securities?
358.3  Are there any bearer corpora or detached bearer coupons that are 
          not eligible for conversion?
358.4  Which bearer corpora or detached bearer coupons are eligible for 
          conversion to transferable BECCS or CUBES securities?
358.5  Which bearer corpora or detached bearer coupons are eligible for 
          conversion to non-transferable BECCS or CUBES securities?
358.6  What is the procedure for converting bearer corpora and detached 
          bearer coupons to book-entry?
358.7  Where do I send my bearer corpora and detached bearer coupons to 
          be converted?
358.8  Are there fees for the conversion of bearer corpora or detached 
          bearer coupons?
358.9  Who is responsible for the cost and risks associated with the 
          shipment of securities?
358.10  How are amounts of less than one dollar credited?
358.11  What is required to establish the authority of a depository 
          institution to request conversion?
358.12  What is Treasury's liability if the depository institution does 
          not have authority to convert securities?
358.13  What is Treasury's liability if the depository institution 
          incurs a loss because it does not follow required procedures?
358.14  What happens when securities are accepted for conversion?
358.15  What happens if securities are adjusted?
358.16  Are BECCS and CUBES accounts maintained separately from the 
          STRIPS program?
358.17  Can BECCS and CUBES securities be reconstituted to physical 
          form?
358.18  What limitations exist on liability?
358.19  Who is responsible for any loss resulting from the conversion of 
          a bearer corpus missing callable coupons?
358.20  Can these regulations be waived?
358.21  Can these regulations be amended?

    Authority: 12 U.S.C. 391, 31 U.S.C. Ch. 31.

    Source: 65 FR 65701, Nov. 1, 2000, unless otherwise noted.



Sec. 358.0  What does this part cover?

    (a) This part applies to the conversion to book-entry of United 
States Treasury bearer corpora and detached bearer coupons.
    (b) These instruments are accepted from depository institutions for 
conversion under the Bearer Corpora Conversion System (BECCS) and 
Coupons Under Book Entry Safekeeping (CUBES) programs.
    (1) For coupons converted after November 1, 2000, these regulations 
supersede the terms and conditions governing CUBES set forth in the 
written ``Agreements to the Terms and Conditions Governing CUBES'' 
signed by depository institutions that previously participated in the 
CUBES program.
    (2) Depository institutions that submit bearer corpora and detached 
bearer coupons are deemed to agree to the terms and conditions in this 
part and any other requirements we may prescribe.



Sec. 358.1  What special terms apply to this part?

    Bearer security means a definitive security payable to the bearer on 
its face at maturity or when called for redemption before maturity in 
accordance with its terms. Ownership of a bearer security is not 
recorded. Title to the security may pass by delivery without endorsement 
or notice. The only remaining unmatured bearer securities are bearer 
bonds.
    BECCS means the Treasury's Bearer Corpora Conversion System.
    BECCS security means a United States Treasury bearer security 
converted to book-entry form and held in BECCS.
    Callable means a United States Treasury security subject to call 
before maturity.
    Callable Coupons means the coupons associated with a callable 
security that are due after the date the security is subject to call.
    Conversion, as used in this part, means a change in the form of a 
security from definitive form to book-entry form.
    Corpus (plural corpora) means the principal portion of a United 
States Treasury bearer security.

[[Page 429]]

    Coupon means a definitive bearer interest instrument associated with 
a United States Treasury bearer security.
    CUBES means the Treasury's Coupon Under Book-Entry Safekeeping 
program.
    CUBES security means a definitive coupon detached from a United 
States Treasury security and held in CUBES.
    Definitive security means a security held in paper form.
    Depository institution means:
    (1) Any insured bank, mutual savings bank, or savings bank as 
defined in 12 U.S.C. 1813, or any institution eligible to become an 
insured bank under 12 U.S.C. 1815;
    (2) Any insured credit union as defined in 12 U.S.C. 1752, or any 
credit union eligible to become an insured credit union under 12 U.S.C. 
1781;
    (3) Any member as defined in 12 U.S.C. 1422; and
    (4) Any savings association as defined in 12 U.S.C. that is an 
insured depository institution as defined in the Federal Deposit 
Insurance Act, 12 U.S.C. 1811 et seq., or is eligible to become an 
insured depository institution under that Act.
    Non-callable means a United States Treasury bearer security not 
subject to call before maturity.
    Non-callable coupons means coupons associated with a non-callable 
bearer security or coupons associated with a callable bearer security 
that are due on or before the date on which the callable bearer security 
is subject to call.
    Non-transferable means the ownership of a security held in BECCS or 
CUBES may not be transferred. See Sec. 358.5.
    Transferable means the ownership of a security held in BECCS or 
CUBES may be transferred. See Sec. 358.4 of this part.
    We (or ``us'') refers to the Secretary of the Treasury and the 
Secretary's delegates at the Treasury Department and the Bureau of the 
Public Debt. The term also extends to any fiscal or financial agent we 
designate to act on behalf of the United States.



Sec. 358.2  What regulations cover these securities?

    BECCS and CUBES securities are deemed to be securities for the 
purposes of 31 CFR part 357, subparts A, B, and D, and are governed by 
that part. Notwithstanding the provisions of 31 CFR part 357, certain 
BECCS and CUBES securities are non-transferable. See Sec. 358.5.



Sec. 358.3  Are there any bearer corpora or detached bearer coupons that are not eligible for conversion?

    Bearer corpora and detached bearer coupons will not be accepted if 
they are submitted:
    (a) Within 30 days of their maturity date; or
    (b) If the call provision has been invoked, within 30 days of their 
call date.



Sec. 358.4  Which bearer corpora or detached bearer coupons are eligible for conversion to transferable BECCS or CUBES securities?

    (a) For a callable corpus to be eligible for conversion to a 
transferable BECCS security, all associated callable coupons must be 
submitted with the corpus. These callable coupons will be linked with 
the corpus within BECCS when converted. Once the coupons are linked to 
the corpus, they may not be transferred separately.
    (b) A corpus that is not subject to call will be converted to a 
transferable BECCS security.
    (c) Non-callable coupons will be converted to transferable CUBES 
securities.



Sec. 358.5  Which bearer corpora or detached bearer coupons are eligible for conversion to non-transferable BECCS or CUBES securities?

    If all of the callable coupons associated with the corpus are not 
submitted with the corpus, the corpus will be converted to a non-
transferable BECCS security. Any remaining callable coupons submitted 
with the corpus will be converted to individual non-transferable CUBES 
securities.



Sec. 358.6  What is the procedure for converting bearer corpora and detached bearer coupons to book-entry?

    Bearer corpora and detached bearer coupons must be submitted in 
accordance with our procedures. They must be accompanied by an approved 
form executed by an authorized officer of the submitting depository 
institution.

[[Page 430]]

Until we verify the submission, the bearer corpora and detached bearer 
coupons are subject to rejection or adjustment.



Sec. 358.7  Where do I send my bearer corpora and detached bearer coupons to be converted?

    Send bearer corpora and detached bearer coupons to be converted to: 
Bureau of the Public Debt, Division of Customer Service, P. O. Box 426, 
Parkersburg, WV 26106-0426.



Sec. 358.8  Are there fees for the conversion of bearer corpora or detached bearer coupons?

    We do not charge fees for the conversion of bearer corpora or 
detached bearer coupons to BECCS or CUBES securities.



Sec. 358.9  Who is responsible for the cost and risks associated with the shipment of securities?

    The following guidelines apply to the transportation of bearer 
corpora and detached bearer coupons:
    (a) Shipment from the depository institution is at the risk and 
expense of the depository institution;
    (b) Shipment between our designated agent and the Department, if 
required, is at our risk and expense; and
    (c) Shipment of securities that are returned to the depository 
institution is at the risk and expense of the depository institution.



Sec. 358.10  How are amounts of less than one dollar credited?

    Only full dollar amounts can be held in CUBES; principal amounts 
that include cents cannot be held in CUBES. Upon the conversion of 
coupons to CUBES, amounts of less than one dollar in aggregate per CUBES 
CUSIP will not be credited to the account of the depository institution.

    Example: A depository institution submits five coupons with face 
amount of $346.88 each, and a total dollar amount of $1,734.40. Upon 
conversion of these coupons to CUBES, only $1,734.00 will be credited to 
the depository institution's account.



Sec. 358.11  What is required to establish the authority of a depository institution to request conversion?

    By submitting bearer corpora and detached bearer coupons for 
conversion to BECCS and CUBES securities, a depository institution 
represents that it has the authority to request the conversion.



Sec. 358.12  What is Treasury's liability if the depository institution does not have authority to convert securities?

    We are not liable if the depository institution has no authority to 
convert the bearer corpora and detached bearer coupons to book-entry 
form or to take other actions in respect to book-entry accounts in BECCS 
and CUBES.



Sec. 358.13  What is Treasury's liability if the depository institution incurs a loss because it does not follow required procedures?

    We are not liable for any loss incurred by the depository 
institution as a result of its failure to properly follow our 
procedures.



Sec. 358.14  What happens when securities are accepted for conversion?

    (a) After processing and initial verification, we will transfer the 
securities accepted to the depository institution's book-entry account, 
establishing a securities entitlement in TRADES according to 31 CFR part 
357 subpart B.
    (b) We will do the final verification within twenty (20) business 
days of initial receipt of the bearer corpora and detached bearer 
coupons.
    (c) If at any time after this twenty (20) day period we determine 
that the security was improperly credited to the BECCS or CUBES account 
of the depository institution, such as in the case of a previously 
undetected, counterfeit security, we reserve the right to adjust the 
BECCS or CUBES account.



Sec. 358.15  What happens if securities are adjusted?

    (a) If we make an adjustment to all or part of the submitted 
securities, we will instruct the depository institution to transfer 
BECCS or CUBES securities of the same payment date and face

[[Page 431]]

amount from the depository institution's account to an account that we 
designate.
    (b) If no such BECCS or CUBES securities exist in the depository 
institution's account, we will instruct the depository institution as to 
how the adjustment will be made.
    (c) If the depository institution fails to comply with our 
instructions within five (5) business days of receipt of the 
instructions, we reserve the right to debit the master account of the 
depository institution for the face value of the adjusted bearer corpora 
and detached bearer coupons. By the submission of the bearer corpora and 
detached bearer coupons, the depository institution is deemed to agree 
to this debit.



Sec. 358.16  Are BECCS and CUBES accounts maintained separately from the STRIPS program?

    BECCS and CUBES accounts are maintained separately from accounts 
maintained in Treasury's STRIPS (Separate Trading of Registered Interest 
and Principal of Securities) program.



Sec. 358.17  Can BECCS and CUBES securities be reconstituted to physical form?

    After bearer corpora and detached bearer coupons have been converted 
to book-entry form, reconversion to physical form is prohibited. The 
reconstitution of a BECCS security with CUBES securities or any 
combination of Treasury obligations is prohibited.



Sec. 358.18  What limitations exist on liability?

    (a) Except as otherwise provided by regulation, circular, or written 
agreement, any fiscal agent designated to act on our behalf is liable 
for its action or omission only if it failed to exercise ordinary care.
    (b) We do not assume any responsibility to any party except the 
sending and receiving depository institutions involved in a BECCS or 
CUBES transaction.
    (c) We do not assume any responsibility in connection with a BECCS 
or CUBES transaction for the insolvency, neglect, misconduct, mistake, 
or default of another bank or person, including the immediate 
participants.



Sec. 358.19  Who is responsible for any loss resulting from the conversion of a bearer corpus missing callable coupons?

    The submitting depository institution shall indemnify the United 
States against any loss resulting from the conversion of a bearer corpus 
that is missing one or more associated callable coupons.



Sec. 358.20  Can these regulations be waived?

    We reserve the right to waive or modify any provision of the 
regulations in this part for the convenience of the United States or to 
relieve any person of unnecessary hardship, if such action is not 
inconsistent with law, does not impair existing rights, and does not 
subject the United States to any substantial expense or liability.



Sec. 358.21  Can these regulations be amended?

    We may at any time supplement, amend, or revise the regulations in 
this part.



PART 359--OFFERING OF UNITED STATES SAVINGSBONDS, SERIES I--Table of Contents




Sec.
359.0  Offering of bonds.
359.1  Governing regulations.
359.2  Description of bonds.
359.3  Investment considerations.
359.4  Registration and issue.
359.5  Limitation on purchases.
359.6  Purchase of bonds.
359.7  Delivery of bonds.
359.8  Payment or redemption.
359.9  Taxation.
359.10  Education savings bond program.
359.11  Reservation as to book-entry bonds.
359.12  Reservation as to issue of bonds.
359.13  Waiver.
359.14  Fiscal agents.
359.15  Reservation as to terms of offer.

    Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3105.

    Source: 63 FR 38044, July 14, 1998, unless otherwise noted.



Sec. 359.0  Offering of bonds.

    The Secretary of the Treasury offers for sale to the people of the 
United States, United States Savings Bonds of

[[Page 432]]

Series I, hereinafter referred to as Series I bonds or bonds. This 
offer, effective September 1, 1998, will continue until terminated by 
the Secretary of the Treasury.



Sec. 359.1  Governing regulations.

    Series I bonds are subject to the regulations of the Department of 
the Treasury, now or hereafter prescribed, governing United States 
Savings Bonds of Series I, contained in Department of the Treasury 
Circular, Public Debt Series No. 2-98 (31 CFR part 360), hereinafter 
referred to as Circular No. 2-98. Treasury expressly disclaims the 
effect of, and does not warranty the correctness of, any representations 
or warranties regarding Series I bonds, wherever made, that in any way 
conflict with the terms and conditions of Series I bonds, as set out in 
these regulations and other applicable law. The regulations in 31 CFR 
part 370 apply to transactions for the purchase of United States Savings 
Bonds issued through the Bureau of the Public Debt. The regulations in 
31 CFR part 370 do not apply to transactions for the purchase of bonds 
through issuing agents generally, unless and to the extent otherwise 
directed by the Commissioner of the Bureau of the Public Debt or the 
Commissioner's designee.



Sec. 359.2  Description of bonds.

    (a) General. Series I bonds are issued only in registered form 
(subject to Sec. 359.11) and are non-transferable. The bonds may be 
either in book-entry or definitive form.
    (b) Denominations and prices. Series I bonds are issued at par (face 
amount). The denominations and purchase prices are as follows:

------------------------------------------------------------------------
                                                               Purchase
                        Denomination                            price
------------------------------------------------------------------------
$ 50.......................................................       $50.00
75.........................................................        75.00
100........................................................       100.00
200........................................................       200.00
500........................................................       500.00
1,000......................................................     1,000.00
5,000......................................................     5,000.00
10,000.....................................................    10,000.00
------------------------------------------------------------------------

    (c) Term--maturity period. The issue date of a Series I bond is the 
first day of the month in which the issue price is received by an 
authorized issuing agent. Series I bonds have a maturity period of 30 
years, consisting of an original maturity period of 20 years and an 
automatic extension period of 10 years.
    (d) Redemption. A Series I bond may be redeemed beginning six months 
after its issue date or at any time thereafter. The Secretary of the 
Treasury may not call a Series I bond for redemption prior to an 
original maturity period of 20 years and an automatic extension period 
of 10 years, for a total period of 30 years from its issue date.
    (e) Composite rates and redemption values. (1) The following 
definitions apply for determining the composite rates and redemption 
values:
    (i) Rate announcements. Rates applicable to Series I bonds will be 
furnished in rate announcements published each May 1 and November 1, or 
at any other date determined by the Secretary or the Secretary's 
designee. If the regularly scheduled date for the announcement (for 
example, May 1) is a day when the Treasury is not open for business, 
then the announcement is made on the next business day; however, the 
effective date of the rates remains the first day of the month of the 
announcement.
    (ii) Fixed rate of return. Each May and November, or at any other 
date determined by the Secretary or the Secretary's designee, the 
Secretary shall establish the fixed rate of return for Series I bonds 
issue-dated during the six-month period, or any other period determined 
by the Secretary or the Secretary's designee, beginning on such date. 
Such fixed rate of return will be applicable for the life of the bond.
    (iii) Semiannual inflation rate. Each May and November, or at any 
other date determined by the Secretary or the Secretary's designee, 
Treasury will announce a variable semiannual inflation rate for Series I 
bonds. The index used to determine this rate will be the non-seasonally 
adjusted U.S. City Average All Items Consumer Price Index for All Urban 
Consumers (``CPI-U'') published by the Bureau of Labor Statistics 
(``BLS'') of the U.S. Department of Labor. The semiannual inflation

[[Page 433]]

rate to be effective with the May announcement, and the rate that is 
effective for Series I bonds offered from September 1, 1998, through 
October 31, 1998, will reflect the rate of change in the CPI-U for the 
six-month period ending with the immediately preceding March 31. The 
rate of change over the six-month period will be expressed as a 
percentage, rounded to the nearest one-hundredth of one percent. More 
specifically, the semiannual inflation rate will reflect the CPI-U value 
for the most recent March less the value for the preceding September, 
that difference will then be divided by the CPI-U value for the 
preceding September, and the result will be multiplied by 100 to convert 
the rate to a percentage. The resulting rate will be rounded to the 
nearest one-hundredth of one percent. The semiannual inflation rate to 
be effective with the November announcement, reflecting the change in 
the CPI-U for the six-month period ending with the immediately preceding 
September, will be similarly determined. In certain deflationary 
conditions, the semiannual inflation rate may be negative to such an 
extent that it will offset the fixed rate of return. However, the 
redemption value of a Series I bond for any particular month will not be 
less than the value for the preceding month. (See Sec. 359.3(b) for a 
discussion of the lag between when inflation is measured and when it is 
reflected in the value of a bond.)
    (iv) Index contingencies. If a previously reported CPI-U is revised, 
Treasury will continue to use the previously reported CPI-U in 
calculating redemption values. If the CPI-U is rebased to a different 
year, Treasury will continue to use the CPI-U based on the base 
reference period in effect when the security was first issued, as long 
as that CPI continues to be published. If, while an inflation-indexed 
savings bond is outstanding, the applicable CPI-U is: discontinued, in 
the judgment of the Secretary, fundamentally altered in a manner 
materially adverse to the interests of an investor in the security, or 
in the judgment of the Secretary, altered by legislation or Executive 
Order in a manner materially adverse to the interests of an investor in 
the security, Treasury, after consulting with the Bureau of Labor 
Statistics (``BLS''), or any successor agency, will substitute an 
appropriate alternative index. Treasury will then notify the public of 
the substitute index and how it will be applied. Determinations of the 
Secretary in this regard will be final.
    (v) Composite rate. (A) The fixed rate of return, FR, and the 
semiannual inflation rate, SIR, as determined in paragraphs (e)(1)(ii) 
and (iii) of this section are divided by 100 to remove the percentage 
format (i.e., to convert to decimal form) and are then combined into a 
composite annual rate, CR, in accordance with the following formula:

CR = {SIR + (FR / 2) + [SIR x (FR / 2)]} x 2

    (B) The resulting annual rate is converted to a percentage and is 
rounded to the nearest one-hundredth of one percent. The composite rates 
will be announced by Treasury each May and November, or at any other 
date determined by the Secretary or the Secretary's designee, and will 
be derived from the semiannual inflation rate announced on the same date 
and the fixed rates of return applicable to Series I savings bonds.
    (vi) Base denomination. All value calculations are performed on a 
hypothetical denomination of $25 having a value at the beginning of the 
first semiannual rate period equal to the issue price of $25. Redemption 
values for bonds of greater denominations are in direct proportion 
according to the ratio of denominations. For example, if the value of a 
hypothetical $25 denomination is $41.20--i.e., $25.00 issue price plus 
$16.20 accrued interest--on the same redemption date, the value of a $50 
bond bearing the same issue date is $41.20 x (50/25) or $82.40.
    (vii) Issue date. The issue date of a Series I bond is the first day 
of the month in which payment of the issue price is received by an 
authorized issuing agent.
    (viii) Redemption value. The redemption value of a bond is that 
amount that will be paid when the bond is redeemed.
    (ix) Accrual date. Earnings on a Series I bond, if any, accrue on 
the first day of each month. The redemption value

[[Page 434]]

of a bond does not change between these accrual dates.
    (x) Semiannual rate periods. Semiannual rate periods are the six-
month periods beginning on the date of issue and on each semiannual 
anniversary of the date of issue to maturity.
    (xi) Maturity. Series I bonds have a maturity period of 30 years, 
consisting of an original period of 20 years and an automatic extension 
period of 10 years. The bonds have an interest paying life of 30 years 
after the date of issue and cease to increase in value as of that date.
    (2) Interest rates and monthly accruals. Series I composite rates, 
defined in paragraph (e)(1)(v) of this section, apply to earnings during 
the first semiannual rate period beginning on or after the effective 
date of the rate. Interest, at the composite rate from the beginning of 
the semiannual rate period, accrues according to the formula specified 
in paragraph (e)(4)(ii) of this section. The following table shows, for 
any given month of issue with composite rates announced each May and 
November, the months making up the semiannual rate period during which 
interest is earned at the composite rate specified in the announcement:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Announcement date of                                     Announcement date of
                                         Semiannual rate period (1)       composite rate that       Semiannual rate period (2)      composite rate that
          Month of issuance                        begins                 applies during rate                 begins                applies during rate
                                                                               period (1)                                               period (2)
--------------------------------------------------------------------------------------------------------------------------------------------------------
January.............................  January 1.......................  November 1 (announced 2  July 1.........................  May 1 (announced 2
                                                                         months prior to                                           months prior to
                                                                         beginning of                                              beginning of
                                                                         semiannual rate                                           semiannual rate
                                                                         period).                                                  period).
February............................  February 1......................  November 1 (announced 3  August 1.......................  May 1 (announced 3
                                                                         months prior to                                           months prior to
                                                                         beginning of                                              beginning of
                                                                         semiannual rate                                           semiannual rate
                                                                         period).                                                  period).
March...............................  March 1.........................  November 1 (announced 4  September 1....................  May 1 (announced 4
                                                                         months prior to                                           months prior to
                                                                         beginning of                                              beginning of
                                                                         semiannual rate                                           semiannual rate
                                                                         period).                                                  period).
April...............................  April 1.........................  November 1 (announced 5  October 1......................  May 1 (announced 5
                                                                         months prior to                                           months prior to
                                                                         beginning of                                              beginning of
                                                                         semiannual rate                                           semiannual rate
                                                                         period).                                                  period).
May.................................  May 1...........................  May 1..................  November 1.....................  November 1.
June................................  June 1..........................  May 1 (announced 1       December 1.....................  November 1 (announced
                                                                         month prior to                                            1 month prior to
                                                                         beginning of                                              beginning of
                                                                         semiannual rate                                           semiannual rate
                                                                         period).                                                  period).
July................................  July 1..........................  May 1 (announced 2       January 1......................  November 1 (announced
                                                                         months prior to                                           2 months prior to
                                                                         beginning of                                              beginning of
                                                                         semiannual rate                                           semiannual rate
                                                                         period).                                                  period).
August..............................  August 1........................  May 1 (announced 3       February 1.....................  November 1 (announced
                                                                         months prior to                                           3 months prior to
                                                                         beginning of                                              beginning of
                                                                         semiannual rate                                           semiannual rate
                                                                         period).                                                  period).
September...........................  September 1.....................  May 1 (announced 4       March 1........................  November 1 (announced
                                                                         months prior to                                           4 months prior to
                                                                         beginning of                                              beginning of
                                                                         semiannual rate                                           semiannual rate
                                                                         period).                                                  period).
October.............................  October 1.......................  May 1 (announced 5       April 1........................  November 1 (announced
                                                                         months prior to                                           5 months prior to
                                                                         beginning of                                              beginning of
                                                                         semiannual rate                                           semiannual rate
                                                                         period).                                                  period).
November............................  November 1......................  November 1.............  May 1..........................  May 1.
December............................  December 1......................  November 1 (announced 1  June 1.........................  May 1 (announced 1
                                                                         month prior to                                            month prior to
                                                                         beginning of                                              beginning of
                                                                         semiannual rate                                           semiannual rate
                                                                         period).                                                  period).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: (1)Notwithstanding any consideration of the interest penalty for early redemption, interest earned during each month of a semiannual rate period
  accrues according to the formula specified in Sec.  359.2(e)(4)(ii).
(2) Also, if the regularly scheduled date for a composite rate announcement is a day that Treasury is not open for business, the announcement will be
  made on the next business day; however, the effective date of the rate will be the first day of the month of the announcement.


[[Page 435]]

    (3) Interest penalty for Series I bonds redeemed less than five 
years following the issue dates. If a Series I bond is redeemed less 
than five years following the date of issue, the overall earning period 
from the date of issue will be reduced by three months. For example, if 
a bond issued January 1, 1999, is redeemed nine months later on October 
1, 1999, the redemption value will be determined by applying the value 
calculation procedures described in paragraph (e)(4) of this section and 
the Series I bond composite rate for that bond as if the redemption date 
were three months earlier (July 1, 1999). The redemption value of a bond 
subject to the three-month interest penalty shall not be reduced below 
the issue price. This penalty does not apply to bonds redeemed five 
years or more after the date of issue.
    (4) Redemption value calculations. (i) Interest on a bond accrues 
and becomes part of the redemption value which is paid when the bond is 
redeemed.
    (ii) The redemption value of a bond for the accrual date (the first 
day of each month) is determined in accordance with this section and the 
following:
    (A) Determine the composite rate as defined in paragraph (e)(1)(v) 
of this section. If the result of the composite rate calculation is a 
negative value, zero will be the assumed composite rate in the 
redemption value calculation. Redemption values are calculated using the 
following formula:

FV = PV x {1 + (CR / 2)] (m/ 6)}

Where:

FV (future value) = redemption value on the accrual date rounded to the 
          nearest cent.
PV (present value) = value at the beginning of the semiannual rate 
          period calculated without consideration of penalty. For bonds 
          that are older than five years, PV will equal the redemption 
          value at the start of the semiannual rate period.
CR = composite rate as defined in paragraph(e)(1)(v) of this section 
          converted to decimal form by dividing by 100.
m = number of full calendar months elapsed during the semiannual rate 
          period.

    (B) The following hypothetical examples illustrate how this formula 
is applied:
    (1) For a bond five years or older:

    Example: i. Given a Series I bond composite rate of 5.02%, effective 
May 1, 2003, for a hypothetical bond denominated at $25, with an issue 
date of September 1, 1998, and a redemption value of $31.90 as of 
September 1, 2003, the February 1, 2004, redemption value is calculated 
as follows: bonds issue-dated in September have semiannual rate periods 
beginning each March 1 and September 1. The first semiannual rate period 
to begin on or after the date of the May 1, 2003, rate announcement 
composite rate would be the period beginning September 1, 2003. PV, the 
present value, $31.90, would be the redemption value of the bond at the 
beginning of the semiannual rate period (September 1, 2003). The 
composite rate, 5.02% converted to a decimal, would be 0.0502. The 
number of months, m, is five, since five full calendar months (September 
through January) have lapsed since the beginning of the semiannual rate 
period. FV, the redemption value (rounded to the nearest cent), is then 
the result of the formula:

FV = PV x {[1 + (CR / 2)] (m/ 6)} where
FV = 31.90 x {[1 + (0.0502 / 2)] (5/ 
          6)} = $32.57

    ii. The redemption value for the actual denomination of a Series I 
bond can be determined by applying the appropriate multiple, for 
example: $32.57 x ($100.00 / $25.00) for a bond with a $100.00 face 
amount; or $32.57 x ($1000.00 / $25.00) for a bond with a $1000.00 face 
amount.

    (2) For a bond less than five years old:

    Example: i. Assume a composite rate of 5.07% effective May 1, 2003, 
for a bond denominated at $25.00, with an issue date of December 1, 
2000, a redemption date of February 1, 2004, and a value on June 1, 
2003, of $28.45, without consideration of penalty. A three-month penalty 
is assessed since the redemption date is less than five years after the 
issue date. The penalty is accounted for by assuming that the redemption 
date is three months earlier (November 1, 2003). The February 1, 2004, 
redemption value is then calculated as follows: bonds issue-dated in 
December have semiannual rate periods that begin each June 1 and 
December 1. The first semiannual rate period to begin on or after the 
May 1, 2003, rate announcement composite rate would be the period 
beginning June 1, 2003. PV, the present value, $28.45, is the value of 
the bond at the beginning of the semiannual rate period (June 1, 2003), 
without consideration of penalty. The composite rate, 5.07%, converted 
to a decimal, would be 0.0507. The number of months, m, is five, since 
five full calendar months (June through October) have elapsed since the 
beginning of the semiannual rate period and the redemption date (as 
adjusted for penalty). FV, the redemption value (rounded to

[[Page 436]]

the nearest cent), is then the result of the formula:

FV = PV x {[1 + (CR / 2)] (m / 6)} where
FV = $28.45 x {[1 + (0.0507 / 2)] (5 / 6)} = $29.05

    ii. The redemption value for the actual denomination of a Series I 
bond can be determined by applying the appropriate multiple, for 
example: $29.05 x ($100.00 / $25.00) for a bond with a $100.00 face 
amount; or $29.05 x ($1000.00 / $25.00) for a bond with a $1000.00 face 
amount.

    (5) The Secretary's determination. The determination by the 
Secretary of the Treasury, or the Secretary's designee, of fixed rates 
of return, semiannual inflation rates, composite rates, and savings bond 
redemption values shall be final and conclusive.
    (6) Tables of redemption values. Tables of redemption values are 
made available in various formats and media, including on the Internet, 
by the Bureau of the Public Debt, Parkersburg, West Virginia 26106-1328. 
Treasury reserves the right to cease making the tables of redemption 
values available in any of these formats or media. Redemption values 
published in such tables reflect the three-month interest penalty 
applied to bonds redeemed prior to five years from the date of issue.

[63 FR 38044, July 14, 1998, as amended at 63 FR 45946, Aug. 28, 1998]



Sec. 359.3  Investment considerations.

    (a) Index contingencies. (1) If a previously reported CPI is 
revised, Treasury will continue to use the previously reported CPI in 
calculating redemption values.
    (2) If the CPI is rebased to a different year, Treasury will 
continue to use the CPI based on the base reference period in effect 
when the savings bond was first issued, as long as that CPI continues to 
be published.
    (3) If, while a Series I savings bond is outstanding, the applicable 
CPI is discontinued, in the judgment of the Secretary, fundamentally 
altered in a manner materially adverse to the interests of an investor 
in the savings bond, or in the judgment of the Secretary, altered by 
legislation or Executive Order in a manner materially adverse to the 
interests of an investor in the savings bond, Treasury, after consulting 
with the Bureau of Labor Statistics, or any successor agency, will 
substitute an appropriate alternative index. Treasury will then notify 
the public of the substitute index and how it will be applied. 
Determinations of the Secretary in this regard will be final.
    (4) If the CPI for a particular month is not reported by the last 
day of the following month, the Treasury will announce an index number 
based on the last 12-month change in the CPI available. Any calculations 
of the Treasury's payment obligations on the inflation-indexed savings 
bond that rely on that month's CPI will be based on the index number 
that Treasury has announced.
    (b) Inflation lag. (1) The inflation rate component of investor 
earnings will be determined twice each year. This rate will be the 
percentage change in the CPI-U for the six months ending each March and 
September. The rate will be included in the composite rate that is 
announced each May and November. For Series I bonds offered from 
September 1, 1998, through October 31, 1998, the inflation rate 
component of investor earnings will be the percentage change in the CPI-
U for the six months ending March 31, 1998. This rate will be included 
in the composite rate that is announced for Series I bonds offered 
effective from September 1, 1998, through October 31, 1998. In the event 
the Secretary, or the Secretary's designee, announces a composite rate 
at an effective date other than May 1 or November 1, the announcement 
will specify the period to be used to calculate the semiannual inflation 
rate. Each composite rate will be effective for the entirety of the 
applicable rate period that begins while the rate is in effect. Thus, an 
inflation rate may affect interest accruals from 3 to 13 months from the 
date that the CPI-U is measured.
    (2) For example, the inflation rate determined from the CPI-U for 
the six-month period from October 1, 2003, through March 31, 2004, will 
be included in the composite rate announced on May 1, 2004. For a bond 
purchased in May 1999, this rate will go into effect immediately, since 
a new semiannual rate period for this bond will begin on May 1, 2004. 
Series I bonds issued in May begin new semiannual rate periods in the 
months of May and November.

[[Page 437]]

In this example, the inflation rate will have its earliest impact in 
June 2004, when interest from May accrues, three months after the end of 
the six-month CPI-U period that ends March 31, 2004.
    (3) As another example, the May 1, 2004, rate will apply similarly 
to a bond purchased in October 1999. Series I bonds issued in October 
begin new semiannual rate periods in the months of April and October. 
Thus, for this bond, the May 1, 2004, composite rate (which includes the 
inflation rate) will not go into effect until a new semiannual rate 
period begins on October 1, 2004. This rate, therefore, will determine 
the inflation-indexed portion of each interest accrual from November 
2004 through April 2005. In this example, the inflation rate will have 
its latest impact in April 2005, 13 months following the six-month CPI-U 
period that ended March 31, 2004.
    (c) Liquidity. A Series I bond may be redeemed beginning six months 
after its issue date or at any time thereafter. However, a bond redeemed 
less than five years from its issue date will be subject to a three-
month interest penalty.
    (d) Early redemption penalty. If a Series I bond is redeemed less 
than five years following the date of issue, the overall earning period 
from the date of issue will be reduced by three months. For example, if 
a bond issued January 1, 1999, is redeemed nine months later on October 
1, 1999, the redemption value will be determined by applying the 
redemption value calculation procedures described in Sec. 359.2(e)(4) 
and the Series I composite rate for that bond as if the redemption date 
were three months earlier (July 1, 1999). The redemption value of a bond 
subject to the three-month interest penalty shall not be reduced below 
the issue price. This penalty does not apply to bonds redeemed five 
years or more after the date of issue.

[63 FR 38044, July 14, 1998, as amended at 63 FR 45947, Aug. 28, 1998]



Sec. 359.4  Registration and issue.

    (a) Registration. Bonds may be registered as set forth in 31 CFR 
part 360, subpart B, also published as Department of the Treasury 
Circular, Public Debt Series No. 2-98. Generally, bonds may be 
registered in the names of natural persons in single owner, coowner (for 
example: ``John Doe 123-45-6789 OR Mary Doe''), or beneficiary (``John 
Doe 123-45-6789 payable on death to (POD) Mary Doe'') forms of 
registration.
    (b) Validity of issue. A bond is validly issued when it is 
registered as provided in Circular No. 2-98, and when it bears an issue 
date, as well as the validation indicia of an authorized issuing agent.
    (c) Taxpayer Identifying Number (TIN). The inscription of a bond 
must include the TIN of the owner or first-named coowner. If the bond is 
being purchased as a gift or award and the owner's TIN is not known, the 
TIN of the purchaser must be included in the inscription on the bond.
    (d) Prohibition on chain letters. The issuance of bonds in the 
furtherance of a chain letter or pyramid scheme is against the public 
interest and is prohibited. An issuing agent is authorized to refuse to 
issue a bond or accept a purchase order if there is reason to believe 
that a purchase is in connection with a chain letter. The agent's 
decision is final.



Sec. 359.5  Limitation on purchases.

    The amount of Series I bonds which may be purchased in the name of 
any one person, in any one calendar year, is limited to $30,000 par 
value. Circular No. 2-98 (31 CFR part 360, subpart C) contains the rules 
governing the computation of amounts and the special limitation for 
employee plans.



Sec. 359.6  Purchase of bonds.

    (a) Payroll sales--(1) Payroll savings plans. Bonds may be purchased 
through deductions from the pay of employees of organizations that 
maintain payroll savings plans. The bonds must be issued by an 
authorized issuing agent.
    (2) Employee thrift, savings, vacation, and similar plans. Bonds 
registered in the names of employee plans may be purchased in book-entry 
form in authorized denominations through a designated Federal Reserve 
Bank after Bureau of the Public Debt approval of the plan as eligible 
for the special limitation under 31 CFR 360.13, also published as 
Sec. 360.13 of Department of the Treasury Circular, Public Debt Series 
No. 2-98.

[[Page 438]]

    (b) Over-the-counter sales--(1) Eligible issuing agents. Bonds may 
be purchased through any issuing agent, except that an organization 
serving as an issuing agent because of its status as an employer or an 
organization operating an employer's payroll savings plan under 31 CFR 
317.2(c) may sell bonds only through payroll savings plans.
    (2) Manner of sale. An application for the purchase of a bond must 
be accompanied by a remittance to cover the issue price. The purchase 
application and remittance may be submitted to an issuing agent by any 
means acceptable to the issuing agent. An application may authorize 
purchases on a recurring basis. The issuing agent bears the burden of 
collection and the risk of loss for non-collection or return of the 
remittance.



Sec. 359.7  Delivery of bonds.

    Issuing agents are authorized to arrange for the delivery of Series 
I bonds. Mail deliveries are made at the risk and expense of the United 
States to the address given by the purchaser, if it is within the United 
States, its territories or possessions, or the Commonwealth of Puerto 
Rico. No mail deliveries elsewhere will be made, except to residents of 
Mexico and Canada who participate in payroll saving plans. Bonds 
purchased by a citizen of the United States residing abroad will be 
delivered only to such address in the United States as the purchaser 
directs.



Sec. 359.8  Payment or redemption.

    (a) Incorporated banks, savings and loan associations and other 
financial institutions--(1) Payment in general. A financial institution 
qualified as a paying agent under the provisions of 31 CFR part 321, 
also published as Department of the Treasury Circular No. 750, will pay 
the current redemption value of a Series I bond presented for payment by 
an individual whose name is inscribed on the bond as owner or coowner, 
provided:
    (i) The bond is in order for payment; and
    (ii) The presenter establishes his or her identity to the 
satisfaction of the agent, in accordance with Treasury instructions and 
identification guidelines, and signs and completes the request for 
payment.
    (2) Payment to beneficiary or legal representative. A paying agent 
may (but is not required to) pay the current redemption value of a 
Series I bond upon the request of a beneficiary, if he or she survives 
the owner, or a legal representative designated in the bond registration 
by name and capacity, or a court-appointed representative of the last-
deceased registrant's estate provided:
    (i) The bond is in order for payment; and
    (ii) The presenter establishes his or her identity to the 
satisfaction of the agent in accordance with Treasury instructions and 
identification guidelines, and otherwise complies with evidentiary 
requirements.
    (b) Federal Reserve Banks and Branches. A Federal Reserve Bank or 
Branch referred to in Sec. 359.14 will pay the current redemption value 
of a Series I bond presented for payment, provided the bond is in order 
for payment and the request for payment on the bond is properly signed 
and certified in accordance with Circular No. 2-98.



Sec. 359.9  Taxation.

    (a) General. The increment in value, represented by the difference 
between the face (par amount) of a Series I bond and the redemption 
value received for it, is interest. This interest is subject to all 
taxes imposed under the Internal Revenue Code of 1986, as amended. The 
bonds are subject to estate, inheritance, gift, or other excise taxes, 
whether Federal or State, but are exempt from all other taxation now or 
hereafter imposed on the principal or interest by any State, any 
possession of the United States or any local taxing authority.
    (b) Federal income tax on bonds. (1) An owner of Series I bonds may 
use either of the following two methods for reporting the increase in 
the redemption value of the bond for Federal income tax purposes:
    (i) Cash basis. Defer reporting the increase to the year of final 
maturity, redemption, or other disposition, whichever is earlier; or
    (ii) Accrual basis. Elect to report the increase each year as it 
accrues, in

[[Page 439]]

which case the election applies to all Series I bonds then owned by the 
taxpayer and those subsequently acquired as well as to any other 
obligations purchased on a discount basis, such as savings bonds of 
Series E or EE.
    (2) If the method in paragraph (b)(1)(i) of this section is used, 
the taxpayer may change to the method in paragraph (b)(1)(ii) of this 
section without obtaining permission from the Internal Revenue Service. 
However, once the election to use the method in paragraph (b)(1)(ii) of 
this section is made, the taxpayer may change the method of reporting 
only by following the specific procedure prescribed by the Internal 
Revenue Service. For further information, the District Director of the 
taxpayer's district, or the Internal Revenue Service, Washington, DC 
20224, should be consulted.
    (c) Reissue. A reissue that affects the rights of any of the persons 
named on a Series I bond may have a tax consequence.



Sec. 359.10  Education savings bond program.

    A bond owner or coowner may be able to exclude from income for 
Federal income tax purposes all or part of the interest received on the 
redemption of qualified savings bonds during the year, if that owner or 
coowner paid qualified higher education expenses during the same year 
and certain other conditions are satisfied. This exclusion is known as 
the Education Savings Bond Program, and authoritative information about 
the program can be found in Internal Revenue Service Publication 17, 
``Your Federal Income Tax'', and Publication 550, ``Investment Income 
and Expenses.''



Sec. 359.11  Reservation as to book-entry bonds.

    The Commissioner of the Public Debt, as designee of the Secretary of 
the Treasury, reserves the right: To convert at any time, in whole or in 
part, any definitive Series I savings bonds to book-entry Series I 
savings bonds; and to issue Series I savings bonds only in book-entry 
form. The Commissioner's action in any such respect is final.



Sec. 359.12  Reservation as to issue of bonds.

    The Commissioner of the Public Debt, as designee of the Secretary of 
the Treasury, is authorized to reject any application for Series I 
bonds, in whole or in part, and to refuse to issue, or permit to be 
issued, any bonds in any case or class of cases, if the Commissioner 
deems the action to be in the public interest, and the Commissioner's 
action in any such respect is final.



Sec. 359.13  Waiver.

    The Commissioner of the Public Debt, as designee of the Secretary of 
the Treasury, may waive or modify any provision of this Circular in any 
particular case or class of cases for the convenience of the United 
States or in order to relieve any person or persons of unnecessary 
hardship:
    (a) If such action would not be inconsistent with law or equity;
    (b) If it does not impair any material existing rights; and
    (c) If he or she is satisfied that such action would not subject the 
United States to any substantial expense or liability.



Sec. 359.14  Fiscal agents.

    (a) Federal Reserve Banks and Branches referred to below, as fiscal 
agents of the United States, are authorized to perform such services as 
may be requested of them by the Secretary of the Treasury, or his or her 
designee, in connection with the issue, servicing and redemption of 
Series I bonds. The Federal Reserve Banks and Branches, as fiscal agents 
of the United States, are subject to change (for example, due to 
consolidation), as determined by the Secretary of the Treasury, or his 
or her designee.
    (b) The following Federal Reserve Offices have been designated to 
provide savings bond services:

[[Page 440]]



----------------------------------------------------------------------------------------------------------------
            Servicing office                Reserve district served              Geographic area served
----------------------------------------------------------------------------------------------------------------
Federal Reserve Bank, Buffalo Branch,     New York, Boston...........  Connecticut, Maine, Massachusetts, New
 160 Delaware Avenue, Buffalo, NY 14202.                                Hamsphire, New Jersey (northern half),
                                                                        New York, Rhode Island, Vermont, Puerto
                                                                        Rico, Virgin Islands.
Federal Reserve Bank, Pittsburgh Branch,  Cleveland, Philadephia.....  Delaware, Kentucky (eastern half), New
 717 Grant Street, Pittsburgh, PA 15219.                                Jersey (southern half), Ohio,
                                                                        Pennsylvania, West Virginia (northern
                                                                        panhandle).
Federal Reserve Bank of Richmond, 701     Richmond, Atlanta..........  Alabama, District of Columbia, Florida,
 East Byrd Street, Richmond, VA 23219.                                  Georgia, Louisiana (southern half),
                                                                        Maryland, Mississippi (southern half),
                                                                        North Carolina, South Carolina,
                                                                        Tennessee (eastern half), Virginia, West
                                                                        Virginia (except northern panhandle).
Federal Reserve Bank of Minneapolis, 90   Minneapolis, Chicago.......  Illinois (northern half), Indiana
 Hennepin Avenue, Minneapolis, MN 55401.                                (northern half), Iowa, Michigan,
                                                                        Minnesota, Montana, North Dakota, South
                                                                        Dakota, Wisconsin.
Federal Reserve Bank of Kansas City, 925  Dallas, Kansas City, St.     Alaska, Arizona, Arkansas, California,
 Grand Boulevard, Kansas City, MO 64106.   Louis, San Francisco.        Colorado, Hawaii, Idaho, Illinois
                                                                        (southern half), Indiana (southern
                                                                        half), Kansas, Kentucky (western half),
                                                                        Louisiana (northern half), Mississippi
                                                                        (northern half), Missouri, Nebraska,
                                                                        Nevada, New Mexico, Oklahoma, Oregon,
                                                                        Tennessee (western half), Texas, Utah,
                                                                        Washington, Wyoming, Guam.
----------------------------------------------------------------------------------------------------------------



Sec. 359.15  Reservation as to terms of offer.

    The Secretary of the Treasury may at any time or from time to time 
supplement or amend the terms of this offering of bonds.



PART 360--REGULATIONS GOVERNING UNITED STATES SAVINGS BONDS, SERIES I--Table of Contents




                     Subpart A--General Information

Sec.
360.0  Applicability.
360.1  Official agencies.
360.2  Definitions.

                         Subpart B--Registration

360.5  General rules.
360.6  Authorized forms of registration.
360.7  Chain letters prohibited.

               Subpart C--Limitations on Annual Purchases

360.10  Amounts which may be purchased.
360.11  Computation of amount.
360.12  Disposition of excess.
360.13  Employee plans--Conditions of eligibility.

              Subpart D--Limitations on Transfer or Pledge

360.15  Transfer.
360.16  Pledge.

                     Subpart E--Judicial Proceedings

360.20  General.
360.21  Payment to judgment creditors.
360.22  Payment or reissue pursuant to divorce.
360.23  Evidence.
360.24  Payment pursuant to judicial or administrative forfeiture.

Subpart F--Relief for Loss, Theft, Destruction, Mutilation, Defacement, 
                         or Nonreceipt of Bonds

360.25  General.
360.26  Application for relief; after receipt of bond.
360.27  Application for relief; nonreceipt of bond.
360.28  Recovery or receipt of bond before or after relief is granted.
360.29  Adjudication of claims.

                Subpart G--General Provisions for Payment

360.35  Payment (redemption).
360.36  Payment during life of sole owner.
360.37  Payment during lives of both coowners.
360.38  Payment during lifetime of owner of beneficiary bond.
360.39  Surrender for payment.
360.40  Special provisions for payment.
360.41  Partial redemption.
360.42  Nonreceipt or loss of remittance issued in payment.
360.43  Effective date of request for payment.
360.44  Withdrawal of request for payment.

             Subpart H--Reissue and Denominational Exchange

360.45  General.
360.46  Effective date of request for reissue.
360.47  Authorized reissue; during lifetime.

[[Page 441]]

360.48  Restrictions on reissue; denominational exchange.
360.49  Correction of errors.
360.50  Change of name.
360.51  Requests for reissue.

                     Subpart I--Certifying Officers

360.55  Individuals authorized to certify.
360.56  General instructions and liability.
360.57  When a certifying officer may not certify.
360.58  Forms to be certified.

    Subpart J--Minors, Incompetents, Aged Persons, Absentees, et al.

360.60  Payment to representative of an estate.
360.61  Payment after death.
360.62  Payment to minor.
360.63  Payment to a parent or other person on behalf of a minor.
360.64  Payment or reinvestment--voluntary guardian of an incapacitated 
          person.
360.65  Reissue.

            Subpart K--Deceased Owner, Coowner or Beneficiary

360.70  General rules governing entitlement.
360.71  Estate administered.
360.72  Procedures for the payment or reissue of bonds that are property 
          belonging to a decedent's estate.

                         Subpart L--Fiduciaries

360.75  Payment or reissue during the existence of the fiduciary estate.
360.76  Payment or reissue after termination of the fiduciary estate.

                   Subpart M--Miscellaneous Provisions

360.90  Waiver of regulations.
360.91  Additional requirements; bond of indemnity.
360.92  Supplements, amendments, or revisions.

    Authority: 5 U.S.C. 301; 31 U.S.C. 3105 and 3125.

    Source: 63 FR 38049, July 14, 1998, unless otherwise noted.



                     Subpart A--General Information



Sec. 360.0  Applicability.

    The regulations in this circular, Department of the Treasury 
Circular, Public Debt Series No. 2-98 (this part 360), govern 
transactions in United States Savings Bonds of Series I. These bonds 
bear issue dates of September 1, 1998, or thereafter.



Sec. 360.1  Official agencies.

    (a) The Bureau of the Public Debt of the Department of the Treasury 
is responsible for administering the Savings Bond Program. Authority to 
process transactions has been delegated to Federal Reserve Banks and 
Branches listed in paragraph (b) of this section, as fiscal agents of 
the United States. The Federal Reserve Banks and Branches, and their 
authority to process transactions, as fiscal agents of the United 
States, are subject to change, as determined by the Secretary of the 
Treasury, or his or her designee.
    (b) Communications concerning transactions and requests for forms 
should be addressed to:
    (1) A Federal Reserve Bank or Branch in the list below; or, the 
Bureau of the Public Debt, 200 Third Street, Parkersburg, WV 26106-1328.
    (2) The following Federal Reserve Offices have been designated to 
provide savings bond services:

----------------------------------------------------------------------------------------------------------------
            Servicing office                Reserve district served              Geographic area served
----------------------------------------------------------------------------------------------------------------
Federal Reserve Bank, Buffalo Branch,     New York, Boston...........  Connecticut, Maine, Massachusetts, New
 160 Delaware Avenue, Buffalo, NY 14202.                                Hampshire, New Jersey, (northern half),
                                                                        New York, Rhode Island, Vermont, Puerto
                                                                        Rico, Virgin Islands.
Federal Reserve Bank, Pittsburgh Branch,  Cleveland, Philadelphia....  Delaware, Kentucky (eastern half), New
 717 Grant Street, Pittsburgh, PA 15219.                                Jersey, (southern half), Ohio,
                                                                        Pennsylvania, West Virginia.
Federal Reserve Bank of Richmond, 701     Richmond, Atlanta..........  Alabama, District of Columbia, Florida,
 East Byrd Street, Richmond, VA 23219.                                  Georgia, Louisiana, (southern half),
                                                                        Maryland, Mississippi (southern half),
                                                                        North Carolina, South Carolina,
                                                                        Tennessee (eastern half), Virginia, West
                                                                        Virginia (except northern panhandle).
Federal Reserve Bank of Minneapolis, 90   Minneapolis, Chicago.......  Illinois (northern half), Indiana,
 Hennepin Avenue, Minneapolis, MN 55401.                                (northern half), Iowa, Michigan,
                                                                        Minnesota, Montana, North Dakota, South
                                                                        Dakota, Wisconsin.

[[Page 442]]

 
Federal Reserve Bank of Kansas City, 925  Dallas, San Francisco,       Alaska, Arizona, Arkansas, California,
 Grand Boulevard, Kansas City, MO 64106.   Kansas City, St. Louis.      Colorado, Hawaii, Idaho, Illinois
                                                                        (southern half), Indiana (southern
                                                                        half), Kansas, Kentucky, (western half),
                                                                        Louisiana (northern half), Mississippi
                                                                        (northern half), Missouri, Nebraska,
                                                                        Nevada, New Mexico, Oklahoma, Oregon,
                                                                        Tennessee (western half), Texas, Utah,
                                                                        Washington, Wyoming, Guam.
----------------------------------------------------------------------------------------------------------------

    (c) Notices and documents must be filed with the agencies referred 
to in paragraphs (a) and (b) of this section and as indicated in the 
regulations in this part.



Sec. 360.2  Definitions.

    (a) Bond means a United States Savings Bond of Series I, either in 
book-entry form, represented by an accounting entry or electronic record 
of a Federal Reserve Bank acting as fiscal agent of the United States, 
or the Department of the Treasury, or in definitive form, as a 
certificate.
    (b) Incompetent means an individual who is incapable of handling his 
or her business affairs because of a legal, mental or medical 
disability, except that a minor is not an incompetent solely because of 
age.
    (c) Issuing agent means an organization that has been qualified 
under the provisions of Department of the Treasury Circular, Public Debt 
Series No. 4-67, as revised and amended (31 CFR part 317), to issue 
savings bonds.
    (d) Paying agent means a financial institution that has been 
qualified under the provisions of Department of the Treasury Circular 
No. 750, as revised and amended (31 CFR part 321), to make payment of 
savings bonds.
    (e) Payment means redemption, unless otherwise indicated by the 
context.
    (f) Person means a legal entity including an individual or fiduciary 
estate.
    (g) Personal trust estates means trust estates established by 
natural persons in their own right for the benefit of themselves or 
other natural persons in whole or in part, and common trust funds 
comprised in whole or in part of such trust estates.
    (h) Reissue means the cancellation and retirement of a bond and the 
issuance of a new bond or bonds of the same series, same issue date, and 
same total face amount.
    (i) Representative of the estate of a minor, incompetent, aged 
person, absentee, et al. means the court-appointed or otherwise 
qualified person, regardless of title, who is legally authorized to act 
for the individual. The term does not include parents in their own 
right, voluntary or natural guardians, attorneys-in-fact, trustees of 
personal and similar trust estates, or the executors or administrators 
of decedents' estates.
    (j) Surrender means the actual receipt of a definitive bond with an 
appropriate request for payment or reissue by either a Federal Reserve 
Bank or Branch or the Bureau of the Public Debt, or, if a paying agent 
is authorized to handle the transaction, the actual receipt of the 
definitive bond and the request for payment by the paying agent.
    (k) Taxpayer Identifying Number means a social security account 
number or an employer identification number.
    (l) Voluntary guardian means an individual who is recognized as 
authorized to act for an incompetent, as provided by Sec. 360.64.



                         Subpart B--Registration



Sec. 360.5  General rules.

    (a) Registration is conclusive of ownership. Savings bonds of Series 
I are issued only in registered form. The registration must express the 
actual ownership of, and interest in, the bond. The registration is 
conclusive of ownership, except as provided in Sec. 360.49.
    (b) Requests for registration. (1) Registrations requested must be 
clear, accurate and complete, conform substantially with one of the 
forms set forth in this subpart, and include the taxpayer identifying 
number of the owner or first-named coowner. The registration of all 
bonds owned by the same individual or fiduciary estate should be uniform 
with respect to the name of

[[Page 443]]

the owner and any description of the fiduciary capacity.
    (2) An individual should be designated by the name he or she is 
ordinarily known by or uses in business, including at least one full 
given name. The name may be preceded or followed by any applicable 
title, such as Mr., Mrs., Ms., Miss, Dr., Rev., M.D., or D.D. A suffix, 
such as Sr. or Jr., must be included when ordinarily used or when 
necessary to distinguish the owner from another member of his family. A 
married woman's own first name, not that of her husband, must be used, 
for example, Mary A. Jones or Mrs. Mary A. Jones, NOT Mrs. Frank B. 
Jones. The address must include, where appropriate, the number and 
street, route, or any other local feature, city, State, and ZIP Code.
    (c) Inscription of bonds purchased as gifts. If the bonds are 
purchased as gifts, awards, prizes, etc., and the taxpayer identifying 
numbers of the intended owners are not known, the purchaser's number 
must be furnished. Bonds so inscribed will not be associated with the 
purchaser's own holdings. A bond registered in the name of a purchaser 
with another person as coowner or beneficiary is not considered a gift 
or an award. If the purchaser so requests, a bond may be inscribed to 
provide a ``Mail to'' instruction, followed by a delivery name and 
address. No rights of ownership are conferred on such designee.



Sec. 360.6  Authorized forms of registration.

    Subject to any limitations or restrictions contained in these 
regulations on the right of any person to be named as owner, coowner, or 
beneficiary, bonds should be registered as indicated in this section. A 
savings bond inscribed in a form not substantially in agreement with one 
of the forms authorized by this subpart is not considered validly 
issued.
    (a) Natural persons. A bond may be registered in the names of 
individuals in their own right, but only in one of the forms authorized 
by this paragraph (a).
    (1) Single ownership form. A bond may be registered in the name of 
one individual.

    Example: Julie B. Jones, 123-45-6789.

    (2) Coownership form. A bond may be registered in the names of two 
individuals in the alternative as coowners. The form of registration ``A 
and B'' is not authorized.

    Examples: David R. Johnson 123-45-6789 or Anna B. Johnson. Maria S. 
Gonzalez 987-65-4321 or Juan C. Gonzalez.

    (3) Beneficiary form. A bond may be registered in the name of one 
individual payable on death to another. ``Payable on death to'' may be 
abbreviated to ``P.O.D.''.

    Examples: Catherine B. Jordan 123-45-6789 payable on death to Daniel 
A. Jordan. Henry C. Rodriguez 123-45-6789 P.O.D. Maria S. Rodriguez.

    (b) Fiduciaries (including legal guardians, trustees, and similar 
representatives)--(1) General. A bond may be registered in the name of 
any person or persons or any organization acting as fiduciary of a 
single fiduciary estate, but not where the fiduciary will hold the bond 
merely or principally as security for the performance of a duty, 
obligation, or service. A bond's registration should conform to a form 
authorized by this paragraph. A common trust fund established and 
maintained by a financial institution authorized to act as a fiduciary 
will be considered a single fiduciary estate within the meaning of the 
regulations in this part.
    (2) Legal guardians, conservators, similar representatives, certain 
custodians, etc. A bond may be registered in the name and fiduciary 
capacity of the legally appointed or authorized representative of the 
estate of a minor, incompetent, aged or infirm person, absentee, et al., 
or of a personal or testamentary trust.

    Examples: Tenth National Bank, Guardian (or Conservator, Trustee, 
etc.) of the Estate of George N. Brown 123-45-6789, a minor (or an 
incompetent, aged person, infirm person, or absentee). Henry C. Smith, 
Conservator of the Estate of John R. White 123-45-6789, an adult, 
pursuant to Sec. 633.572 of the Iowa Code. Juan B. Gonzalez 123-45-6789, 
a minor (or an incompetent) under custodianship by designation of the 
Veterans Administration. Frank M. Redd 123-45-6789, an incompetent for 
whom Eric A. Redd has been designated trustee by the Department of the 
Army pursuant to 37 U.S.C. 602. Richard A. Rowe 123-

[[Page 444]]

45-6789, for whom Reba L. Rowe is representative payee for social 
security benefits (or black lung benefits, as the case may be). Henry L. 
Green 123-45-6789 or George M. Brown, a minor under legal guardianship 
of the Tenth National Bank. Henry L. Green 123-45-6789 P.O.D. George M. 
Brown, a minor under legal guardianship of the Tenth National Bank. 
Harbor State Hospital and School, selected payee for Beth R. Weber 123-
45-6789, a Civil Service annuitant, pursuant to 5 U.S.C. 8345(e). John 
F. Green or Mary B. Doe, Trustees of the Estate of Moe Green 123-45-
6789. Thomas J. White and Tenth National Bank, Trustees under the Will 
of Robert J. Benjamin, deceased 12-3456789. Tenth National Bank, Trustee 
under Agreement with Mark S. Dunston, dated 2/1/98, 12-3456789. Ruth B. 
Grace and Pat A. Banks, Trustees under Agreement with Susan L. Chambers, 
dated 7/30/97, 12-3456789. Dennis R. Adams, Trustee under Declaration of 
Trust, dated 5/1/98, 12-3456789.

    (3) Employee thrift, savings, vacation and similar plans. Bonds may 
be registered in the name and title, or title alone, of the trustee of 
an eligible employee thrift, savings, vacation, 401(k) or similar plan, 
as defined in Sec. 360.13. If the instrument creating the trust provides 
that the trustees shall serve for a limited term, their names may be 
omitted.

    Examples: Tenth National Bank, trustee of Pension Fund of Safety 
Manufacturing Company, U/A with the company, dated March 31, 1996, 12-
3456789.
    Trustees of Retirement Fund of Safety Manufacturing Company, under 
directors' resolution adopted March 31, 1996, 12-3456789.
    County Trust Company, trustee of the Employee Savings Plan of Jones 
Company, Inc., U/A dated January 17, 1996, 12-3456789.
    Trustees of the Employee Savings Plan of Brown Brothers, Inc., U/A 
dated January 20, 1996, 12-3456789.

    (c) The United States Treasury. A person who desires to have a bond 
become the property of the United States upon his or her death may 
designate the United States Treasury as beneficiary.

    Example: George T. Jones 123-45-6789 P.O.D. the United States 
Treasury.



Sec. 360.7  Chain letters prohibited.

    The issuance of bonds in the furtherance of a chain letter, pyramid, 
or similar scheme is against the public interest and is prohibited.



               Subpart C--Limitations on Annual Purchases



Sec. 360.10  Amounts which may be purchased.

    The amount of savings bonds of Series I which may be purchased and 
held, in the name of any one person in any one calendar year, is 
computed according to the provisions of Sec. 360.11 and is limited as 
follows:
    (a) General annual limitation, $30,000 (par value).
    (b) Special limitation, $4,000 (par value) multiplied by the highest 
number of employees participating in an eligible employee plan, as 
defined in Sec. 360.13, at any time during the calendar year in which 
the bonds are issued.



Sec. 360.11  Computation of amount.

    (a) General. The purchases of bonds in the name of any person in an 
individual capacity are computed separately from purchases in a 
fiduciary capacity, e.g., as representative for the estate of an 
individual.
    (b) Bonds included in computation. In computing the purchases for 
each person, the following outstanding bonds are included:
    (1) All bonds registered in the name and bearing the taxpayer 
identifying number of that person alone;
    (2) All bonds registered in the name of the representative of the 
estate of that person and bearing that person's taxpayer identifying 
number; and
    (3) All bonds registered in the name of that person as coowner that 
also bear that person's taxpayer identifying number.
    (c) Bonds excluded from computation. In computing the purchases for 
each person, the following are excluded:
    (1) Bonds on which that person is named beneficiary;
    (2) Bonds to which that person has become entitled--
    (i) Under Sec. 360.70 as surviving beneficiary upon the death of the 
registered owner;
    (ii) As an heir or a legatee of the deceased owner;
    (iii) By virtue of the termination of a trust or the happening of a 
similar event; and

[[Page 445]]

    (3) Bonds that are purchased and redeemed within the same calendar 
year.



Sec. 360.12  Disposition of excess.

    If any person at any time has savings bonds issued during any one 
calendar year in excess of the prescribed amount, instructions should be 
obtained from the Bureau of the Public Debt, Parkersburg, WV 26106-1328, 
for appropriate adjustment of the excess. Under the conditions specified 
in Sec. 360.90, the Commissioner of the Public Debt may permit excess 
purchases to stand in any particular case or class of cases.



Sec. 360.13  Employee plans--Conditions of eligibility.

    (a) Definition of plan. Employee thrift, savings, vacation, 401(k), 
and similar plans are contributory plans established by the employer for 
the exclusive and irrevocable benefit of its employees or their 
beneficiaries. Each plan must afford employees the means of making 
regular savings from their wages through payroll deductions and provide 
for employer contributions to be added to these savings.
    (b) Definition of terms used in this section. (1) The term assets 
means all the employees' contributions and assets purchased with them 
and the employer's contributions and assets purchased with them, as well 
as accretions, such as dividends on stock, the increment in value on 
bonds and all other income; but, notwithstanding any other provision of 
this section, the right to demand and receive all assets credited to the 
account of an employee shall not be construed to require the 
distribution of assets in kind when it would not be possible or 
practicable to make such a distribution; for example, Series I bonds may 
not be reissued in unauthorized denominations.
    (2) The word beneficiary means:
    (i) The person or persons, if any, designated by the employee in 
accordance with the terms of the plan to receive the benefits of the 
plan upon the employee's death; or
    (ii) The estate of the employee.
    (c) Conditions of eligibility. An employee plan must conform to the 
following rules in order to be eligible for the special limitation 
provided in Sec. 360.10.
    (1) Crediting of assets. All assets of a plan must be credited to 
the individual accounts of participating employees and may be 
distributed only to them or their beneficiaries, except as provided in 
paragraph (c)(3) of this section.
    (2) Purchase of bonds. Bonds may be purchased only with assets 
credited to the accounts of participating employees and only if the 
amount taken from any account at any time for that purpose is equal to 
the purchase price of a $50 bond or bonds in an authorized denomination 
or denominations, and shares in the bonds are credited to the accounts 
of the individuals from which the purchase price was derived, in amounts 
corresponding with their shares. For example, if $100 credited to the 
account of John Jones is commingled with funds credited to the accounts 
of other employees to make a total of $5,000 with which a Series I bond 
in the denomination of $5,000 (face amount) is purchased in December 
1998 and registered in the name and title of the trustee, the plan must 
provide, in effect, that John Jones' account be credited to show that he 
is the owner of a Series I bond in the denomination of $100 (face 
amount) bearing an issue date of December 1, 1998.
    (3) Irrevocable right of withdrawal. Each participating employee has 
an irrevocable right to request and receive from the trustee all assets 
credited to the employee's account (or their value, if the employee 
prefers) without regard to any conditions other than the loss or 
suspension of the privilege of participating further in the plan. A plan 
may limit or modify such right in any manner required for qualification 
of the plan under section 401 of the Internal Revenue Code of 1986, as 
amended (26 U.S.C. 401).
    (4) Rights of beneficiary. Upon the death of an employee, his or her 
beneficiary shall have the absolute and unconditional right to demand 
and receive from the trustee all assets credited to the account of the 
employee or their value, if he or she so prefers.
    (5) Reissue or payment upon distribution. (i) When settlement is 
made with an employee or his or her beneficiary with respect to any bond 
registered in

[[Page 446]]

the name and title of the plan trustee in which the employee has a 
share, the bond must be paid or reissued to the extent of the share.
    (ii) If an employee or the beneficiary is to receive distribution in 
kind, bonds bearing the same issue dates as those credited to the 
employee's account will be reissued in the name of the employee or the 
employee's beneficiary to the extent entitled, in authorized 
denominations, in any authorized form of registration, upon the request 
and certification of the trustee.
    (d) Application for special limitation. A trustee of an employee 
plan who desires to purchase bonds under the special limitation should 
submit to the designated Federal Reserve Bank or Branch a copy of:
    (1) The plan;
    (2) Any instructions issued under the plan that concern Series I 
bonds; and
    (3) The trust agreement, in order to establish the plan's 
eligibility.
    (e) Vacation plans. Savings bonds may be purchased under certain 
vacation plans. Questions concerning the eligibility of these plans to 
purchase bonds in excess of the general limitation should be addressed 
to the Bureau of the Public Debt, Parkersburg, WV 26106-1328.



              Subpart D--Limitations on Transfer or Pledge



Sec. 360.15  Transfer.

    Savings bonds are not transferable and are payable only to the 
owners named on the bonds, except as specifically provided in these 
regulations and then only in the manner and to the extent so provided.



Sec. 360.16  Pledge.

    A savings bond may not be hypothecated, pledged, or used as security 
for the performance of an obligation.



                     Subpart E--Judicial Proceedings



Sec. 360.20  General.

    (a) The Department of the Treasury will not recognize a judicial 
determination that gives effect to an attempted voluntary inter vivos 
transfer of a bond, or a judicial determination that impairs the rights 
of survivorship conferred by the regulations in this part upon a coowner 
or beneficiary. All provisions of this subpart are subject to these 
restrictions, except as provided in Sec. 360.24.
    (b) The Department of the Treasury will recognize a claim against an 
owner of a savings bond and conflicting claims of ownership of, or 
interest in, a bond between coowners or between the registered owner and 
the beneficiary, if established by valid judicial proceedings, but only 
as specifically provided in this subpart. Section 360.23 specifies the 
evidence required to establish the validity of the judicial proceedings.
    (c) The Department of the Treasury and the agencies that issue, 
reissue, or redeem savings bonds will not accept a notice of an adverse 
claim or notice of pending judicial proceedings, nor undertake to 
protect the interests of a litigant not in possession of a savings bond.



Sec. 360.21  Payment to judgment creditors.

    (a) Purchaser or officer under levy. The Department of the Treasury 
will pay (but not reissue) a savings bond to the purchaser at a sale 
under a levy or to the officer authorized under appropriate process to 
levy upon property of the registered owner or coowner to satisfy a money 
judgment. Payment will be made only to the extent necessary to satisfy 
the money judgment. The amount paid is limited to the redemption value 
60 days after the termination of the judicial proceedings. Except in the 
case of a levy by the Internal Revenue Service, payment of a bond 
registered in coownership form pursuant to a judgment or a levy against 
only one coowner is limited to the extent of that coowner's interest in 
the bond. That interest must be established by an agreement between the 
coowners or by a judgment, decree, or order of a court in a proceeding 
to which both coowners are parties. Payment of a bond registered in 
coownership form pursuant to a levy by the Internal Revenue Service will 
be made if the levy is against either coowner on the bond.

[[Page 447]]

    (b) Trustee in bankruptcy, receiver, or similar court officer. The 
Department of the Treasury will pay, at current redemption value, a 
savings bond to a trustee in bankruptcy, a receiver of an insolvent's 
estate, a receiver in equity, or a similar court officer under the 
provisions of paragraph (a) of this section.



Sec. 360.22  Payment or reissue pursuant to divorce.

    (a) Divorce. (1) The Department of the Treasury will recognize a 
divorce decree that ratifies or confirms a property settlement agreement 
disposing of bonds or that otherwise settles the interests of the 
parties in a bond. Reissue of a savings bond may be made to eliminate 
the name of one spouse as owner, coowner, or beneficiary or to 
substitute the name of one spouse for that of the other spouse as owner, 
coowner, or beneficiary pursuant to the decree. However, if the bond is 
registered in the name of one spouse with another person as coowner, 
there must be submitted either:
    (i) A request for reissue by the other person; or
    (ii) a certified copy of a judgment, decree, or court order entered 
in proceedings to which the other person and the spouse named on the 
bond are parties, determining the extent of the interest of that spouse 
in the bond. Reissue will be permitted only to the extent of that 
spouse's interest.
    (2) The evidence required under Sec. 360.23 must be submitted in 
every case. When the divorce decree does not set out the terms of the 
property settlement agreement, a certified copy of the agreement must be 
submitted. Payment, rather than reissue, will be made if requested.
    (b) Date for determining rights. When payment or reissue under this 
section is to be made, the rights of the parties will be those existing 
under the regulations current at the time of the entry of the final 
judgment, decree, or court order.



Sec. 360.23  Evidence.

    (a) General. To establish the validity of judicial proceedings, 
certified copies of the final judgment, decree, or court order, and of 
any necessary supplementary proceedings, must be submitted. If the 
judgment, decree, or court order was rendered more than six months prior 
to the presentation of the bond, there must also be submitted a 
certification from the clerk of the court, under court seal, dated 
within six months of the presentation of the bond, showing that the 
judgment, decree, or court order is in full force.
    (b) Trustee in bankruptcy or receiver of an insolvent's estate. A 
request for payment by a trustee in bankruptcy or a receiver of an 
insolvent's estate must be supported by appropriate evidence of 
appointment and qualification. The evidence must be certified by the 
clerk of the court, under court seal, as being in full force on a date 
that is not more than six months prior to the presentation of the bond.
    (c) Receiver in equity or similar court officer. A request for 
payment by a receiver in equity or a similar court officer, other than a 
receiver of an insolvent's estate, must be supported by a copy of an 
order that authorizes the presentation of the bond for redemption, 
certified by the clerk of the court, under court seal, as being in full 
force on a date that is not more than six months prior to the 
presentation of the bond.



Sec. 360.24  Payment pursuant to judicial or administrative forfeiture.

    (a) Definitions. As used in this part:
    (1) Contact point means the individual designated to receive 
referrals from the Bureau of the Public Debt, as provided for in this 
section, by the Federal investigative agency, United States Attorney's 
Office, or forfeiting agency specified in Public Debt Form 1522.
    (2) Forfeiting agency means the federal law enforcement agency 
responsible for the forfeiture.
    (3) Forfeiture. (i) Administrative forfeiture means the process by 
which property may be forfeited by a federal agency rather than through 
judicial proceedings.
    (ii) Judicial forfeiture means either a civil or a criminal 
proceeding in a United States District Court that may result in a final 
judgment and order of forfeiture.
    (4) Public Debt Form 1522 means the written notification of the 
forfeiture provided by the forfeiting agency to

[[Page 448]]

the Bureau of the Public Debt on a Public Debt Form 1522 SPECIAL FORM OF 
REQUEST FOR PAYMENT OF UNITED STATES SAVINGS AND RETIREMENT SECURITIES 
WHERE USE OF A DETACHED REQUEST IS AUTHORIZED. Public Debt Form 1522 
must specify: the contact point; the issue date of each bond; the serial 
number for each bond; the date of forfeiture; the forfeiture fund to 
which payment is to be made; and be signed by an individual authorized 
by the forfeiting agency. The forfeited bonds and the completed Public 
Debt Form 1522 are to be mailed to the Department of the Treasury, 
Bureau of the Public Debt, Parkersburg, WV 26106-1328.
    (b) Forfeiture of bond. (1) Upon receipt and review of the Public 
Debt Form 1522, as described in paragraph (a)(4) of this section, the 
Bureau of the Public Debt will make payment to the forfeiture fund 
specified on the form.
    (2) The Bureau of the Public Debt will record the forfeiture, the 
forfeiture fund into which the proceeds were paid, the contact point, 
and any related information.
    (3) The Bureau of the Public Debt will rely exclusively upon the 
information provided by the Federal agency in the Public Debt Form 1522 
and will not make any independent evaluation of the validity of the 
forfeiture order, the request for payment, or the authority of the 
individual signing the request for payment.
    (4) The amount paid is limited to the redemption value of the 
savings bonds as of the date of forfeiture specified in the Public Debt 
Form 1522.
    (c) Inquiry from previous owner. (1) Upon payment made pursuant to 
paragraph (b) of this section, all inquiries from the previous owner, 
including requests for payment, reissue, or applications for relief, 
related to forfeited savings bonds, will be referred by the Bureau of 
the Public Debt to the contact point named in the Public Debt Form 1522.
    (2) The Bureau of the Public Debt will notify the submitter of the 
inquiry of the referral to the contact point.
    (3) The Bureau of the Public Debt will not investigate the inquiry 
and will defer to the forfeiting agency's determination of the 
appropriate course of action, including settlement where appropriate. 
Any settlement will be paid from the forfeiture fund into which the 
proceeds were deposited.



Subpart F--Relief for Loss, Theft, Destruction, Mutilation, Defacement, 
                         or Nonreceipt of Bonds



Sec. 360.25  General.

    Relief, by the issue of a substitute bond or by payment, is 
authorized for the loss, theft, destruction, mutilation, or defacement 
of a bond after receipt by the owner or his or her representative. As a 
condition for granting relief, the Commissioner of the Public Debt, as 
designee of the Secretary of the Treasury, may require a bond of 
indemnity, in the form, and with the surety, or security, he or she 
considers necessary to protect the interests of the United States. In 
all cases, the claimant or claimants must identify the lost, stolen, 
destroyed, mutilated, or defaced savings bond or savings bonds by serial 
number or serial numbers and must submit satisfactory evidence of the 
loss, theft, or destruction, or a satisfactory explanation of the 
mutilation or defacement.



Sec. 360.26  Application for relief; after receipt of bond.

    (a) If the serial numbers of the lost, stolen, or destroyed bonds 
are known, the claimant should execute an application for relief on the 
appropriate form and submit it to the Bureau of the Public Debt, 
Parkersburg, WV 26106-1328.
    (b) If the bond serial numbers are not known, the claimant must 
provide sufficient information to enable the Bureau of the Public Debt 
to identify the bond by serial number. See Sec. 360.29(c). The Bureau 
will furnish the proper application form and instructions.
    (c) A defaced bond and all available fragments of a mutilated bond 
should be submitted to a Federal Reserve Office listed in 
Sec. 360.1(b)(2) or the Bureau of the Public Debt.
    (d) The application must be made by the person or persons (including 
both coowners, if living) authorized under the regulations in this part 
to request payment of the bond. In addition:

[[Page 449]]

    (1) If the bond is in beneficiary form and the owner and beneficiary 
are both living, the application must be made by the owner, and the 
beneficiary may also be required to join in the application to protect 
the interests of the United States.
    (2) If a minor named on a bond as owner, coowner, or beneficiary is 
not of sufficient competency and understanding to request payment, the 
parents or other person authorized to request payment under Sec. 360.63 
will ordinarily be required to join in the application.
    (e) If the application is approved, relief will be granted either by 
the issuance of a bond bearing the same issue date as the bond for which 
the claim was filed or by the issuance of a remittance in payment.



Sec. 360.27  Application for relief; nonreceipt of bond.

    If a bond issued on any transaction is not received, the issuing 
agent must be notified as promptly as possible and given all information 
available about the nonreceipt. An appropriate form and instructions 
will be provided. If the application is approved, relief will be granted 
by the issuance of a bond bearing the same issue date as the bond that 
was not received. Also, relief is authorized for the issuance of bonds 
for which the Secretary has not received payment, in order to preserve 
public confidence in dealing with issuing agents.



Sec. 360.28  Recovery or receipt of bond before or after relief is granted.

    (a) If a bond reported lost, stolen, destroyed, or not received, is 
recovered or received before relief is granted, the Bureau of the Public 
Debt, Parkersburg, WV 26106-1328, must be notified promptly.
    (b) A bond for which relief has been granted is the property of the 
United States and, if recovered, must be promptly submitted to the 
Bureau of the Public Debt, Parkersburg, 26106-1328, for cancellation.



Sec. 360.29  Adjudication of claims.

    (a) General. The Bureau of the Public Debt will adjudicate claims 
for lost, stolen or destroyed bonds on the basis of records created and 
regularly maintained in the ordinary course of business.
    (b) Claims filed 10 years after payment. Any claim filed 10 years or 
more after the recorded date of redemption or other retirement will be 
barred.
    (c) Claims filed 10 years after maturity. Any claim filed 10 years 
or more after the maturity of a savings bond will be barred.



                Subpart G--General Provisions for Payment



Sec. 360.35  Payment (redemption).

    (a) General. Payment of a Series I savings bond will be made to the 
person or persons entitled under the provisions of the regulations in 
this part, except that the redemption payment will not be delivered to 
addresses in areas with respect to which the Department of the Treasury 
restricts or regulates the delivery of remittances, including checks and 
electronic payments, drawn against funds of the United States. See 
Department of the Treasury Circular No. 655, current revision (31 CFR 
part 211). Payment will be made without regard to any notice of adverse 
claims to a bond and no stoppage or caveat against payment of a bond 
will be entered.
    (b) Mandatory initial holding period. A Series I bond will be paid 
at any time after six months from issue date at the current redemption 
value determined in the manner described in Department of the Treasury 
Circular, Public Debt Series No. 1-98 (31 CFR part 359).



Sec. 360.36  Payment during life of sole owner.

    A savings bond registered in single ownership form (i.e., without a 
coowner or beneficiary) will be paid to the owner during his or her 
lifetime upon surrender with an appropriate request.



Sec. 360.37  Payment during lives of both coowners.

    A savings bond registered in coownership form will be paid to either 
coowner upon surrender with an appropriate request, and upon payment (as 
determined in Sec. 360.43), the other coowner will cease to have any 
interest

[[Page 450]]

in the bond. If both coowners request payment, the payment will be made 
in the form, ``John A. Jones AND Mary C. Jones''.



Sec. 360.38  Payment during lifetime of owner of beneficiary bond.

    A savings bond registered in beneficiary form will be paid to the 
registered owner during his or her lifetime upon surrender with an 
appropriate request. Upon payment (as determined in Sec. 360.43) the 
beneficiary will cease to have any interest in the bond.



Sec. 360.39  Surrender for payment.

    (a) Procedure for definitive bonds of Series I presented at 
authorized paying agents. The owner, coowner, or other person entitled 
to payment of a definitive Series I bond may present the bond to an 
authorized paying agent for redemption. The presenter must establish his 
or her identity and entitlement to payment in accordance with Treasury 
instructions and identification guidelines. The presenter must sign the 
request for payment on the bond or, if authorized, on a separate 
detached request, and add his or her address. If the request for payment 
has been signed, or signed and certified, before presentation of the 
bond, the paying agent must be satisfied that the person presenting the 
bond for payment is the owner, coowner, or other person entitled to 
payment, and may require the person to sign the request for payment 
again. If the bond is in order for payment, the paying agent will make 
payment at the current redemption value without charge to the presenter. 
Paying agents are not authorized to process any case involving partial 
redemption.
    (b) Procedure for all other cases. In the case of definitive bonds 
to which the procedure in paragraph (a) of this section, does not apply, 
or if otherwise preferred, the owner or coowner, or other person 
entitled to payment should establish his or her identity to the 
satisfaction of an officer authorized by the regulations in this part to 
certify requests for payment, sign the requests for payment, and provide 
delivery information for the payment. The bonds must be forwarded to a 
designated Federal Reserve Bank or Branch or the Bureau of the Public 
Debt. Usually, payment will be expedited by submission to a designated 
Federal Reserve Bank or Branch. In all cases, the cost and risk of 
presentation of a bond will be borne by the owner. Payment will be made 
to the registered owner or other person entitled and will be delivered 
according to the instructions of the owner or the other person entitled 
and the regulations in this part.
    (c) Date of request. Requests executed more than six months before 
the date of receipt of a bond for payment will not be accepted. Neither 
will a bond be accepted if payment is requested as of a date more than 
three months in the future.



Sec. 360.40  Special provisions for payment.

    (a) Owner's signature not required. A bond may be paid by a paying 
agent or a designated Federal Reserve Bank or Branch without the owner's 
signature to the request for payment if the bond bears the special 
endorsement of a paying agent specifically qualified to place such an 
endorsement on savings bonds.
    (b) Signature by mark. A signature by mark (X) must be witnessed by 
at least one disinterested person and a certifying officer. See subpart 
I of this part. The witness must attest to the signature by mark 
substantially as follows: ``Witness to signature by mark'', followed by 
his or her signature and address.
    (c) Name change. If the name of the owner, coowner, or other person 
entitled to payment, as it appears in the registration or in any related 
evidence or documents has been changed in any legal manner, the 
signature to the request for payment must show both names and the manner 
in which the change was made; for example, ``Mary T. Jones Smith (Mary 
T. J. Smith or Mary T. Smith) changed by marriage from Mary T. Jones'', 
or ``John R. Young, changed by order of court from Hans R. Jung''. See 
Sec. 360.50.
    (d) Attorneys-in-fact. A request for payment executed by an 
attorney-in-fact on behalf of the bond owner or other person entitled to 
payment of the

[[Page 451]]

bond will be recognized if it is accompanied by a copy of the power of 
attorney which meets the following requirements:
    (1) The power of attorney must bear the grantor's signature, 
properly certified or notarized, in accordance with applicable State 
law;
    (2) The power of attorney must grant, by its terms, authority for 
the attorney-in-fact to sell or redeem the grantor's securities, sell 
his or her personal property, or otherwise contain similar authority; 
and
    (3) In the case of a grantor who has become incapacitated, the power 
of attorney must conform with pertinent provisions of State law 
concerning its durability. Generally, in such circumstances, the power 
of attorney should provide that the authority granted will not be 
affected by the subsequent incompetence or incapacity of the grantor. 
Medical evidence or other proof of the grantor's condition may be 
required in any case.



Sec. 360.41  Partial redemption.

    A bond may be redeemed in part at current redemption value, but only 
in amounts corresponding to authorized denominations, upon surrender of 
the bond to a designated Federal Reserve Bank or Branch or to the Bureau 
of the Public Debt in accordance with Sec. 360.39(b). In any case in 
which partial redemption is requested, the phrase ``to the extent of $ 
------ (face amount) and reissue of the remainder'' should be added to 
the request. Upon partial redemption of the bond, the remainder will be 
reissued as of the original issue date, as provided in subpart H of this 
part.



Sec. 360.42  Nonreceipt or loss of remittance issued in payment.

    If a remittance in payment of the redemption value of a bond 
surrendered for redemption is not received within a reasonable time or 
is lost after receipt, notice should be given to the same agency to 
which the bond was surrendered for payment. The notice should give the 
date the bond was surrendered for payment and describe the bond by 
series, denomination, serial number, and registration, including the 
taxpayer identifying number of the owner.



Sec. 360.43  Effective date of request for payment.

    The Department of the Treasury will treat the receipt of a bond with 
an appropriate request for payment by:
    (a) A Federal Reserve Bank or Branch;
    (b) The Bureau of the Public Debt; or
    (c) A paying agent authorized to pay that bond, as the date upon 
which the rights of the parties are fixed for the purpose of payment.



Sec. 360.44  Withdrawal of request for payment.

    (a) Withdrawal by owner or coowner. An owner or coowner, who has 
surrendered a bond to a Federal Reserve Bank or Branch or to the Bureau 
of the Public Debt or to an authorized paying agent with an appropriate 
request for payment, may withdraw the request if notice of intent to 
withdraw is received by the same agency prior to payment.
    (b) Withdrawal on behalf of deceased owner or incompetent. A request 
for payment may be withdrawn under the same conditions as in paragraph 
(a) of this section by the executor or administrator of the estate of a 
deceased owner or by the person or persons who could have been entitled 
to the bond under subpart K of this part, or by the legal representative 
of the estate of a person under legal disability, unless surrender of 
the bond for payment has eliminated the interest of a surviving coowner 
or beneficiary. See Sec. 360.70(b) and (c).



             Subpart H--Reissue and Denominational Exchange



Sec. 360.45  General

    Reissue of a bond may be made only under the conditions specified in 
these regulations, and only at: A designated Federal Reserve Bank or 
Branch, or the Bureau of the Public Debt. Reissue will not be made if 
the request is received less than one full calendar month before the 
maturity date of a bond. See 31 CFR part 359. The request, however, will 
be effective to establish ownership as though the requested reissue had 
been made.

[[Page 452]]



Sec. 360.46  Effective date of request for reissue.

    The Department of the Treasury will treat the receipt by: A Federal 
Reserve Bank or Branch, or the Bureau of the Public Debt of a bond and 
an acceptable request for reissue as determining the date upon which the 
rights of the parties are fixed for the purpose of reissue. For example, 
if the owner or either coowner of a bond dies after the bond has been 
surrendered for reissue, the bond will be regarded as having been 
reissued in the decedent's lifetime.



Sec. 360.47  Authorized reissue; during lifetime.

    A bond belonging to a living individual may be reissued in any form 
of registration authorized by the regulations in this part upon an 
appropriate request under the conditions and for the purposes outlined 
in this section.
    (a) Single ownership. A bond registered in single ownership form may 
be reissued:
    (1) To add a coowner or beneficiary; or
    (2) To name a new owner, with or without a coowner or beneficiary as 
requested by the new owner, but only if the previous owner and the new 
owner are parties to a divorce or annulment; or
    (3) To name as new sole owner the personal trust estate created by 
the previous owner or which designates as beneficiary the previous 
owner.
    (b) Coownership. During the lifetime of both coowners:
    (1) A coownership bond may be reissued to name a new owner, with or 
without a coowner or beneficiary as requested by the new owner, but only 
if at least one of the coowners and the new owner are parties to a 
divorce or annulment, but reissue is limited to the extent of that 
coowner's interest in the bond (See Sec. 360.22(a)); or
    (2) To name as new sole owner the personal trust estate created by 
at least one of the coowners or which designates as beneficiary at least 
one of the coowners.
    (c) Beneficiary. A bond registered in beneficiary form may be 
reissued:
    (1) To substitute another individual as beneficiary; or
    (2) To eliminate the beneficiary, and, if the beneficiary is 
eliminated, to effect any of the reissues authorized by paragraph (a) of 
this section.



Sec. 360.48  Restrictions on reissue; denominational exchange.

    Reissue is not permitted solely to change denominations.



Sec. 360.49  Correction of errors.

    A bond may be reissued to correct an error in registration upon 
appropriate request supported by satisfactory proof of the error.



Sec. 360.50  Change of name.

    An owner, coowner, or beneficiary whose name is changed by marriage, 
divorce, annulment, order of court, or in any other legal manner after 
the issue of the bond should submit the bond with a request for reissue 
to substitute the new name for the name inscribed on the bond. 
Documentary evidence may be required in any appropriate case.



Sec. 360.51  Requests for reissue.

    Subject to the conditions set out in this subpart, a request for 
reissue of bonds in coownership form must be signed by both coowners, 
except that a request solely to eliminate the name of one coowner may be 
signed by that coowner only. A bond registered in beneficiary form may 
be reissued upon the request of the owner, without the consent of the 
beneficiary. Public Debt forms are available for requesting reissue.



                     Subpart I--Certifying Officers



Sec. 360.55  Individuals authorized to certify.

    The following individuals are authorized to act as certifying 
officers for the purpose of certifying a request for payment, reissue, 
or a signature to a Public Debt form:
    (a) Officers generally authorized--(1) Banks, trust companies, and 
member organizations of the Federal Home Loan Bank System. (i) Any 
officer of a bank incorporated in the United States, the territories or 
possessions of the United States, or the Commonwealth of Puerto Rico.

[[Page 453]]

    (ii) Any officer of a trust company incorporated in the United 
States, the territories or possessions of the United States, or the 
Commonwealth of Puerto Rico.
    (iii) Any officer of an organization that is a member of the Federal 
Home Loan Bank System. This includes Federal savings and loan 
associations.
    (iv) Any officer of a foreign branch or domestic branch of an 
institution indicated in paragraphs (a)(1)(i) through (iii) of this 
section.
    (v) Any officer of a Federal Reserve Bank, a Federal Land Bank, or a 
Federal Home Loan Bank.
    (vi) Any employee of an institution in paragraphs (a)(1)(i) through 
(v) of this section, who is expressly authorized to certify by the 
institution.
    (2) Credit unions. Any officer or employee of a credit union, who is 
expressly authorized to certify by the institution. Certification by 
these officers or designated employees must be authenticated by a 
legible imprint of either the corporate seal of the institution or of 
the issuing or paying agent's stamp. The employee expressly authorized 
to certify by an institution must sign his or her name over the title 
``Designated Employee''.
    (3) Issuing and paying agents. Any officer or expressly authorized 
employee of an organization that is not included in paragraphs (a)(1)(i) 
through (v) of this section but is qualified as an issuing or paying 
agent for savings bonds of Series E, EE, or I. The agent's stamp must be 
imprinted in the certification.
    (4) By United States officials. Any judge, clerk, or deputy clerk of 
a United States court, including United States courts for the 
territories and possessions of the United States and the Commonwealth of 
Puerto Rico; any United States Commissioner, United States Attorney, or 
United States Collector of Customs, including their deputies; in the 
Internal Revenue Service, any Regional Commissioner, District Director, 
Service Center Director, or Internal Revenue agent.
    (b) Officers with limited authority--(1) In the Armed Forces. Any 
commissioned officer or warrant officer of the Armed Forces of the 
United States, but only for members of the respective services, their 
families, and civilian employees at posts, bases, or stations. The 
certifying officer must indicate his or her rank and state that the 
individual signing the request is one of the class whose request the 
certifying officer is authorized to certify.
    (2) Veterans Administration, Federal penal institutions, and United 
States Public Health Service hospitals. Any officer in charge of a home, 
hospital or other facility of the Veterans Administration, but only for 
the patients, or employees of the facility; any officer of a Federal 
penal institution or a United States Public Health Service hospital 
expressly authorized to certify by the Secretary of the Treasury or his 
designee, but only for the inmates, patients or employees of the 
institution involved. Officers of Veterans Administration facilities, 
Federal penal institutions, and Public Health Service hospitals must use 
the stamp or seal of the particular institution or service.
    (c) Authorized officers in foreign countries. Any United States 
diplomatic or consular representative, or the officer of a foreign 
branch of a bank or trust company incorporated in the United States 
whose signature is attested by an imprint of the corporate seal or is 
certified to the Department of the Treasury. If none of these 
individuals is available, a notary public or other officer authorized to 
administer oaths may certify, but, if not in a country that is a party 
to the Hague Convention, his or her official character and jurisdiction 
must be certified by a United States diplomatic or consular officer 
under seal of his or her office.
    (d) Authorized officers in particular localities. The Governor and 
the Treasurer of Puerto Rico; the Governor and the Commissioner of 
Finance of the Virgin Islands; the Governor and the Director of Finance 
of Guam; or the Governor and the Director of Administrative Services of 
American Samoa.
    (e) Special provisions. If no certifying officer is readily 
accessible, the Commissioner of the Public Debt, Deputy Commissioner, 
any Assistant Commissioner, or other designated official of the Bureau 
or of a Federal Reserve Bank or Branch is authorized to make special 
provision for any particular case.

[[Page 454]]



Sec. 360.56  General instructions and liability.

    (a) The certifying officer must:
    (1) Require the person presenting a bond, or an appropriate Public 
Debt transaction form, to establish his or her identity in accordance 
with Department of the Treasury instructions and identification 
guidelines;
    (2) Place a notation on the back of the bond or on the appropriate 
Public Debt transaction form, or in a separate record, showing exactly 
how identification was established; and
    (3) Affix, as part of the certification, his or her official 
signature, title, seal or issuing or paying agent's stamp, address, and 
the date of execution.
    (b) The certifying officer and, if such person is an officer or an 
employee of an organization, the organization will be held fully 
responsible for the adequacy of the identification.
    (c) A signature guaranteed stamp under the Securities Transfer 
Agents Medallion Program (STAMP) is an acceptable official seal.



Sec. 360.57  When a certifying officer may not certify.

    Certifying officers may not certify the requests for payment or 
reissue of bonds, or appropriate Public Debt transaction forms if, in 
their own right or in a representative capacity, they:
    (a) Have an interest in the bonds; or
    (b) Will, by virtue of the requests being certified, acquire an 
interest in the bonds.



Sec. 360.58  Forms to be certified.

    When required in the instructions on a Public Debt transaction form, 
the form must be signed before an authorized certifying officer.



    Subpart J--Minors, Incompetents, Aged Persons, Absentees, et al.



Sec. 360.60  Payment to representative of an estate.

    (a) The representative of an estate of an owner who is a minor, an 
aged person, incompetent, absentee, et al., may receive payment upon 
request:
    (1) If the registration shows the name and capacity of the 
representative;
    (2) If the registration shows the capacity but not the name of the 
representative and the request is accompanied by appropriate evidence; 
or
    (3) If the registration includes neither the name of the 
representative nor his or her capacity but the request is accompanied by 
appropriate evidence.
    (b)(1) Appropriate evidence for paragraphs (a) (2) and (3) of this 
section includes Public Debt Forms 5385 (redemption) and 5386 (reissue) 
completed and signed by the representative in accordance with the proper 
form's instructions, which are incorporated herein, or a certified copy 
of the letters of appointment or, if the representative is not appointed 
by a court, other proof of qualification.
    (2) Except in the case of corporate fiduciaries, the evidence must 
show that the appointment is in full force and be dated not more than 
one year prior to the presentation of the bond for payment. The request 
for payment appearing on the back of a bond must be signed by the 
representative as such, for example, ``John S. Jones, guardian 
(committee) of the estate of Henry W. Smith, a minor (an incompetent)''.



Sec. 360.61  Payment after death.

    After the death of the ward, and at any time prior to the 
representative's discharge, the representative of the estate will be 
entitled to obtain payment of a bond to which the ward was solely 
entitled.



Sec. 360.62  Payment to minor.

    If the owner of a savings bond is a minor and the form of 
registration does not indicate that there is a representative of the 
minor's estate, payment will be made to the minor upon his or her 
request, provided the minor is of sufficient competency to sign the 
request for payment and to understand the nature of the transaction. In 
general, the fact that the request for payment has been signed by a 
minor and certified will be accepted as sufficient proof of competency 
and understanding.



Sec. 360.63  Payment to a parent or other person on behalf of a minor.

    (a) If the owner of a savings bond is a minor and the form of 
registration does not indicate that there is a representative of his or 
her estate, and if

[[Page 455]]

the minor is not of sufficient competency to sign the request for 
payment and to understand the nature of the transaction, payment will be 
made to either parent with whom the minor resides or to whom legal 
custody has been granted. If the minor does not reside with either 
parent, payment will be made to the person who furnishes the chief 
support for the minor.
    (b) The request must appear on the back of the bond in one of the 
following forms:
    (1) Request by parent:

    I certify that I am the mother of John C. Jones (with whom he 
resides) (to whom legal custody has been granted). He is ---- years of 
age and is not of sufficient understanding to make this request.

Mary Jones on behalf of John C. Jones

    (2) Request by other person:

    I certify that John C. Jones does not reside with either parent and 
that I furnish his chief support. He is ---- years of age and is not of 
sufficient understanding to make this request.

Alice Brown, grandmother, on behalf of John C. Jones



Sec. 360.64  Payment or reinvestment--voluntary guardian of an incapacitated person.

    (a) Payment of bonds. (1) When an adult owner of bonds is incapable 
of requesting payment as a result of incapacity and there is no other 
person legally qualified to do so, the relative, or other person, 
responsible for the owner's care and support may submit an application 
for recognition as voluntary guardian for the purpose of redeeming the 
owner's bonds, if the total redemption value of all of the owner's bonds 
does not exceed $20,000. The bonds and application should be submitted 
to a designated Federal Reserve Bank or the Bureau of the Public Debt.
    (2) The redemption value of the bonds shall be determined as of the 
date the bonds are received, accompanied by an appropriate request for 
payment. If the total redemption value exceeds $20,000, a legal 
representative must be appointed, as set forth in Sec. 360.60.
    (b) Reinvestment of bonds. (1) If the bonds have matured and ceased 
earning interest, they may be redeemed and the proceeds reinvested in 
any other savings bonds available. The new bonds must be registered in 
the name of the incapacitated person, followed by words showing that he 
or she is under voluntary guardianship; for example, ``John Jones 123-
45-6789, under voluntary guardianship''. A living coowner or beneficiary 
named on the matured bonds must be designated on the new bonds, unless 
such person furnishes a certified statement consenting to omission of 
his or her name.
    (2) If an amount insufficient to purchase an additional bond of any 
authorized denomination of savings bond remains after the reinvestment, 
the voluntary guardian may furnish additional funds sufficient to 
purchase another savings bond of the lowest available denomination. If 
additional funds are not furnished, the remaining amount will be paid to 
the voluntary guardian for the use and benefit of the incapacitated 
person.



Sec. 360.65  Reissue.

    A bond on which a minor or other person under legal disability is 
named as the owner or coowner, or in which he or she has an interest, 
may be reissued under the following conditions, but only in accordance 
with subpart H of this part:
    (a) A minor for whose estate no representative has been appointed 
may request reissue if the minor is of sufficient competency to sign his 
or her name to the request and to understand the nature of the 
transaction.
    (b) Except to the extent provided in paragraph (a) of this section, 
reissue will be restricted to a form of registration which does not 
adversely affect the existing ownership or interest of a minor or other 
person under legal disability. Requests for reissue should be executed 
by the person authorized to request payment under Secs. 360.60 and 
360.63, or the person who may request recognition as voluntary guardian 
under Sec. 360.64.



            Subpart K--Deceased Owner, Coowner or Beneficiary



Sec. 360.70  General rules governing entitlement.

    The rules in this section govern ownership or entitlement where one 
or both of the persons named on a bond

[[Page 456]]

have died without the bond having been surrendered for payment or 
reissue. Proof of death may be in the form of a properly completed 
Public Debt Form or death certificate, or other evidence as required by 
the Bureau of the Public Debt.
    (a) Single owner bond. If the owner of a bond registered in single 
ownership form has died, the bond becomes the property of that 
decedent's estate, and payment or reissue will be made as provided in 
this subpart.
    (b) Coowner bond--(1) One coowner deceased. If one of the coowners 
named on a bond has died, the surviving coowner will be recognized as 
the sole and absolute owner, and payment or reissue will be made as 
though the bond were registered in the name of the survivor alone. Any 
request for reissue by the surviving coowner must be supported by proof 
of death of the other coowner.
    (2) Both coowners deceased. If both coowners named on a bond have 
died, the bond becomes the property of the estate of the coowner who 
died last, and payment or reissue will be made as if the bond were 
registered in the name of the last deceased coowner alone. Proof of 
death of both coowners will be required to establish the order of death.
    (3) Simultaneous death of both coowners. If both coowners die under 
conditions where it cannot be established, either by presumption of law 
or otherwise, which coowner died first, the bond becomes the property of 
the estates of both equally, and payment or reissue will be made 
accordingly.
    (c) Beneficiary bond--(1) Owner deceased. If the owner of a bond 
registered in beneficiary form has died and is survived by the 
beneficiary, upon proof of death of the owner, the beneficiary will be 
recognized as the sole and absolute owner of the bond. Payment or 
reissue will be made as though the bond were registered in the 
survivor's name alone. A request for payment or reissue by the 
beneficiary must be supported by proof of death of the owner.
    (2) Beneficiary deceased. If the beneficiary's death occurs before, 
or simultaneously with, that of the registered owner, payment or reissue 
will be made as though the bond were registered in the owner's name 
alone. Proof of death of the owner and beneficiary is required to 
establish the order of death.
    (d) Nonresident aliens. If the person who becomes entitled to a bond 
because of the death of an owner is an alien who is a resident of an 
area with respect to which the Department of the Treasury restricts or 
regulates the delivery of remittances, including checks and electronic 
payments, drawn against funds of the United States or its agencies or 
instrumentalities, delivery of the redemption payment will not be made 
so long as the restriction applies. See Department of the Treasury 
Circular No. 655, current revision (31 CFR part 211).



Sec. 360.71  Estate administered.

    (a) During administration. The court-appointed or otherwise legally 
qualified representative of an estate may request payment of bonds, 
including any bond redemption proceeds, that are the property of the 
estate or may have the bonds reissued in the names of persons entitled 
to share in the estate. The representative should use the procedure and 
Public Debt Form referred to in Sec. 360.72 to request payment or 
reissue. The representative's request may instead be supported by 
evidence of authority in the form of a court certificate or a certified 
copy of the representative's letters of appointment which must be dated 
within six months of the date of presentation of the bond, unless the 
evidence shows that the appointment was made within one year prior to 
presentation of the bond.
    (b) After administration. If the decedent's estate has been settled 
through judicial proceedings, bonds, including any bond redemption 
proceeds, that are the estate's property, will be paid, or the bonds 
will be reissued, upon the request of persons entitled. Persons entitled 
should use the procedure and the Public Debt Form referred to in 
Sec. 360.72 to request payment or reissue. A request by persons entitled 
may be supported by a certified copy of the court-approved final account 
for the estate, the court's decree of distribution, or other pertinent 
court records.

[[Page 457]]



Sec. 360.72  Procedures for the payment or reissue of bonds that are property belonging to a decedent's estate.

    (a) If bonds are the property of the estate of a decedent in 
accordance with Sec. 360.70, the bonds and any redemption proceeds shall 
be paid, or the bonds shall be reissued, in accordance with the rules in 
this part, pursuant to an appropriate request.
    (b) Bonds shall be reissued or proceeds distributed in the following 
order of precedence:
    (1) To the court-appointed or otherwise legally qualified 
representative of the last deceased bond registrant's estate;
    (2) To the persons entitled after the estate of the last deceased 
bond registrant has been settled, and the court has discharged the 
representative;
    (3) To the persons entitled to share in the estate of the last 
deceased bond registrant's estate in accordance with State law relating 
to summary settlement of decedents' estates or settlement of small 
estates of decedents when no representative has been appointed by the 
court and none is to be appointed;
    (4) To the surviving spouse if no representative has been appointed 
by the court, none is to be appointed, and there is no surviving child 
or descendant of a deceased child of the decedent;
    (5) To the surviving spouse to the extent of one-half and the child 
or children of the decedent, and the descendants of deceased children by 
representation, to the extent of one-half if there are both a surviving 
spouse and a child, children, or descendants of deceased children, no 
representative has been appointed by the court, and none is to be 
appointed, or by the agreement of all the persons entitled in this 
class;
    (6) To the child or children of the decedent, and the descendants of 
deceased children by representation, if there is no surviving spouse, no 
representative has been appointed by the court, and none is to be 
appointed;
    (7) To the parents if none of the above;
    (8) To the brothers and sisters and descendants of deceased brothers 
and sisters by representation if none of the above;
    (9) To other next-of-kin as determined by the laws of the domicile 
at the time of death if none of the above;
    (10) To persons related to the decedent by marriage, i.e., heirs of 
a spouse of the last deceased registrant where such spouse predeceased 
that registrant, if none of the above;
    (11) To the person who paid the burial and funeral expenses, or a 
creditor of the decedent's estate, but payment may be made only to the 
extent and to the proportion the person has not been reimbursed, and 
reissue will not be permitted, if none of the above;
    (12) Escheat.
    (c) Payments made pursuant to this section shall be made as set out 
in paragraph (b) of this section either to a person individually, or 
individually and for the account of other persons entitled of the same 
class. A person receiving payment of bond proceeds individually and for 
the account of other persons shall agree, and be obligated, to make fair 
and proper distribution of such proceeds to such other persons. The 
provisions of this section are for the convenience of the Department of 
the Treasury and do not purport to determine ownership of the bonds or 
of their proceeds. The Department of the Treasury, Bureau of the Public 
Debt, Federal Reserve Banks, and any authorized paying agents may rely 
on the information provided by the person who requests payment or 
reissue, and shall not be liable for any action taken as set out in this 
section, in accordance with the information so furnished.



                         Subpart L--Fiduciaries



Sec. 360.75  Payment or reissue during the existence of the fiduciary estate.

    (a) Request from the fiduciaries named in the registration. A 
request for reissue or payment signed by at least one, but less than 
all, of the fiduciaries named in the registration shall be deemed 
sufficient and acceptable proof that less than all of the fiduciaries 
may properly execute the request. If the fiduciaries named in the 
registration are still acting, no further evidence will be required. In 
other cases, i.e., cases in which the fiduciary is not designated by 
name and title in the bond registration or a fiduciary designated in the

[[Page 458]]

bond registration is no longer acting, the request must be made in 
accordance with subparts J and K of this part.
    (b) Corporate fiduciaries. If a bond is registered in the name of a 
public or private corporation, such as a financial institution, or a 
governmental body as fiduciary, the request must be signed by an 
authorized officer in the name of the organization as fiduciary. 
Ordinarily, a signed and certified request will be accepted without 
further evidence.
    (c) Trustee of a common trust fund. A bond held by a financial 
institution as a trustee may be reissued in the name of the institution 
as trustee of its common trust fund to the extent that participation in 
the common trust fund is authorized by law or regulation. The request 
for reissue should be executed by the institution and any co-trustee.
    (d) Successor fiduciary. If the fiduciary in whose name the bond is 
registered has been replaced by another fiduciary, a properly executed 
form or satisfactory evidence of successorship should be furnished.



Sec. 360.76  Payment or reissue after termination of the fiduciary estate.

    A bond registered in the name or title of a fiduciary may be paid or 
reissued to the person who has become entitled by reason of the 
termination of an estate, other than a decedent's estate (see subpart K 
of this part). Requests for reissue made by a fiduciary pursuant to the 
termination of a fiduciary estate should be made on the appropriate 
form. Requests for payment or reissue by other than the fiduciary must 
be accompanied by evidence to show that the person has become entitled 
in accordance with applicable State law or otherwise. When two or more 
persons have become entitled, the request for payment or reissue must be 
signed by each of them.



                   Subpart M--Miscellaneous Provisions



Sec. 360.90  Waiver of regulations.

    The Commissioner of the Public Debt, as designee of the Secretary of 
the Treasury, may waive or modify any provision or provisions of the 
regulations in this part. He or she may do so in any particular case or 
class of cases for the convenience of the United States or in order to 
relieve any person or persons of unnecessary hardship:
    (a) If such action would not be inconsistent with law or equity;
    (b) If it does not impair any material existing rights; and
    (c) If he or she is satisfied that such action would not subject the 
United States to any substantial expense or liability.



Sec. 360.91  Additional requirements; bond of indemnity.

    The Commissioner of the Public Debt, as designee of the Secretary of 
the Treasury, may require:
    (a) Such additional evidence as he or she may consider necessary or 
advisable; or
    (b) A bond of indemnity, with or without surety, in any case in 
which he or she may consider such a bond necessary for the protection of 
the interests of the United States.



Sec. 360.92  Supplements, amendments, or revisions.

    The Secretary of the Treasury may at any time, or from time to time, 
prescribe additional, supplemental, amendatory, or revised rules and 
regulations governing United States Savings Bonds.



PART 361--CLAIMS PURSUANT TO THE GOVERNMENT LOSSES IN SHIPMENT ACT--Table of Contents




Sec.
361.1  Scope of regulations.
361.2  Definitions.
361.3  Shipping procedure.
361.4  Preparation of shipment.
361.5  Record of shipment.
361.6  Advice of shipment.
361.7  Report of loss, destruction or damage.
361.8  Claim for replacement.
361.9  Proof of claim.
361.10  Recoveries.

    Authority: Sec. 6, 50 Stat. 480; 40 U.S.C. 728.

    Source: 41 FR 19302, May 12, 1976, unless otherwise noted. 
Redesignated at 49 FR 47002, Nov. 30, 1984. Further redesignated at 50 
FR 51394, Dec. 17, 1985.

[[Page 459]]



Sec. 361.1  Scope of regulations.

    This part governs the reporting of loss or destruction of, or damage 
to, valuables shipped pursuant to section 1 of the Government Losses in 
Shipment Act (hereafter the Act) (40 U.S.C. 721) and proof of claim for 
replacement under section 3 of the Act (40 U.S.C. 723) by executive 
departments, independent establishments, agencies, wholly owned 
corporations, officers and employees of the United States, and Federal 
Reserve banks when acting on behalf of the United States or agencies 
thereof (hereafter consignors). Failure by any consignor or agent or 
employee thereof to comply with these regulations may delay recoveries, 
preclude reimbursement from the fund for the payment of Government 
losses in shipment (hereafter the Fund) or other relief under the Act, 
and render the consignor responsible for any loss occurring through such 
failure.



Sec. 361.2  Definitions.

    (a) The term valuables means any articles or things or 
representatives of value in which the United States has any interest, or 
in connection with which it has any obligation or responsibility, direct 
or indirect, and which have been declared to be valuables by the 
Secretary of the Treasury (hereafter Secretary) pursuant to the Act, as 
listed in Sec. 362.1 of this title.
    (b) The term shipment means the transportation, or the effecting of 
transportation, of valuables, without limitation as to the means or 
facilities used or by which the transportation is effected or the person 
to whom it is made, and includes, but is not limited to, shipments made 
to any executive department, independent establishment, agency, wholly 
or partly owned corporation, officer, or employee of the United States, 
or any person acting on his or its behalf or at his or its direction.
    (c) The term replacement means payment, reimbursement, replacement, 
or duplication or the expenses incident thereto.
    (d) The term carrier means any person, corporation, or other entity 
which effectuates the shipment for consignors of valuables.



Sec. 361.3  Shipping procedure.

    Shipments of valuables shall be made so as to provide the greatest 
possible protection against risk of loss and destruction of, and damage 
to, valuables, in accordance with requirements prescribed by the 
consignors after notice to the Secretary.



Sec. 361.4  Preparation of shipment.

    Each shipment shall be inspected and verified by two responsible 
employees of a consignor before final preparation (i.e., before sealing, 
locking, etc.) for delivery to the carrier. The shipment shall be 
finally prepared for delivery in the presence of the two employees and 
before leaving their immediate control. If strict compliance herewith is 
impossible or impracticable, administrative officers of the consignor 
shall make adequate provision, through the establishment of accounting 
controls or otherwise, for the maintenance of basic records which will 
enable them to prove, to the satisfaction of the Secretary, the extent 
of loss, destruction, or damage in connection with a claim against the 
Fund. The requirements of this section shall apply irrespective of the 
carrier or method of transportation employed in making shipments.



Sec. 361.5  Record of shipment.

    (a) A record of each shipment shall be maintained by the consignor. 
The record shall include:
    (1) The name and address of the consignee designated to receive the 
shipment;
    (2) A complete description of the contents of the shipment (if the 
shipment is made up of securities, the record shall be maintained by 
issue, series, denomination and serial number, and a description of any 
coupons attached to such securities at the time of shipment);
    (3) The face or par value of the shipment in the case of securities, 
currency, etc., or the replacement value in the case of other valuables;
    (4) The registry number or the lock and rotary numbers, if any, 
under which shipped;
    (5) The number of the registry receipt, or other receipt of the 
carrier;
    (6) The date and hour of delivery to the carrier;

[[Page 460]]

    (7) A record of the signatures of the consignor's employees who 
verified the contents of the package and witnessed its sealing;
    (8) A record of the signature(s) of the consignor's employee(s) who 
thereafter had custody of the package until it was delivered at the post 
office for registration or deposited with the post office or other 
carrier for shipment; and
    (9) The name of the carrier.
    (b) The consignor shall also preserve, until assured that shipment 
has been completed and no claims action will be initiated, all registry 
receipts or other carriers' receipts, and other documents incidental to 
the shipments.



Sec. 361.6  Advice of shipment.

    (a) If the value of any one shipment to one consignee at one time by 
one consignor, except in the case of any intracity shipment or the 
shipment of registered securities by certified mail, or by another means 
providing the same protection as certified mail, equals or exceeds 
$10,000, immediate notice thereof shall be forwarded by the consignor to 
the consignee by separate mail. Such notice shall include:
    (1) A complete record of the contents of the shipment;
    (2) The method of transportation employed and the name of the 
carrier; and
    (3) The date of delivery to such carrier.
    (b) The consignee shall arrange that:
    (1) Shipment when received, be opened and inspected by one or more 
responsible employees;
    (2) Immediate advice of any difference between the amounts or 
quantity indicated in the notice by the consignor to the consignee and 
in the shipment when opened be forwarded to the consignor;
    (3) The consignor and the post office, or office of other carrier 
through which delivery would be made, be notified immediately in the 
event of the failure of the shipment to arrive in due course;
    (4) The consignor be advised immediately concerning any damage to 
the shipment; and
    (5) All findings of the consignee in such cases be made a matter of 
record subject to the inspection of the Secretary or other Government 
officer, in connection with any necessary investigation.

[41 FR 19302, May 12, 1976. Redesignated at 49 FR 47002, Nov. 30, 1984. 
Further redesignated at 50 FR 51394, Dec. 17, 1985, as amended at 51 FR 
19751, June 2, 1986]



Sec. 361.7  Report of loss, destruction or damage.

    (a) If a consignor receives notice that loss or destruction of, or 
damage to, valuables shipped in accordance with the Act has occurred, an 
immediate written report shall be forwarded by the consignor to the 
Secretary, to the attention of the Bureau of the Public Debt, Division 
of Financial Management, Room 201, P. O. Box 1328, Parkersburg, WV 
26106-1328. If the loss, destruction or damage represents a value equal 
to, or in excess of, $10,000 or if delay in reporting is likely to delay 
the Government in recovering such valuables, the report shall be 
transmitted by wire and promptly confirmed in writing.
    (b) The report shall state:
    (1) The date of shipment;
    (2) The amount and character of the valuables lost, destroyed, or 
damaged;
    (3) The name and address of the consignee;
    (4) The method of transportation, the name of the carrier, and the 
location of the office of the carrier from which shipment was made;
    (5) The registry or other receipt number; and
    (6) The cause of the loss, destruction or damage, if known.
    (c) The consignor shall immediately report the loss, destruction or 
damage to the agent in charge of the nearest United States Secret 
Service office, and to the local post office or local office of other 
carrier. The consignor shall also place a tracer on the shipment and 
take such other action as may be necessary to facilitate recovery.

[41 FR 19302, May 12, 1976. Redesignated and amended at 49 FR 47002, 
Nov. 30, 1984. Further redesignated and amended at 50 FR 51394, Dec. 17, 
1985; 61 FR 20437, May 7, 1996]



Sec. 361.8  Claim for replacement.

    Claim for replacement shall be made in writing to the Secretary, to 
the attention of the Bureau of the Public

[[Page 461]]

Debt, Division of Financial Management, Room 201, P. O. Box 1328, 
Parkersburg, WV 26106-1328. The claim, accompanied by a recommendation 
regarding the manner of replacement, shall be submitted through the head 
of the consignor concerned, or his designee. The manner of replacement 
shall be determined by the Secretary in accordance with section 3 of the 
Act, i.e., by replacement out of the Fund or by a credit in the accounts 
of the claimant.

[41 FR 19302, May 12, 1976. Redesignated and amended at 49 FR 47002, 
Nov. 30, 1984. Further redesignated and amended at 50 FR 51394, Dec. 17, 
1985; 61 FR 20437, May 7, 1996]



Sec. 361.9  Proof of claim.

    The Secretary will require proof of claim in such form, and in such 
manner, as he deems necessary. Proof of claim will include satisfactory 
proof of shipment and satisfactory proof of loss, destruction or damage. 
The claim shall be supported by the original ``record of shipment'' 
required pursuant to Sec. 361.5, which will be returned after adjustment 
of the claim. The consignor shall submit a statement concerning the loss 
or destruction of, or damage to, the shipment or any part thereof. If 
the shipment has been received by the consignee with contents not 
intact, such statement shall set forth all the circumstances relating to 
the condition in which the shipment was received and the manner of 
inspection and verification of its contents. Affidavits covering the 
loss, destruction or damage to the shipment shall be obtained from the 
consignee and the carrier. The consignor shall submit the statement and 
recommendations of the investigating officers.



Sec. 361.10  Recoveries.

    If relief is granted, the consignor shall take all necessary and 
reasonable steps to recover the lost, destroyed or damaged valuables, or 
their value. All recoveries and repayments, in connection with valuables 
for which replacement has been made out of the Fund, shall be forwarded 
to the Secretary for credit to the Fund.



PART 362--DECLARATION OF VALUABLES UNDER THE GOVERNMENT LOSSES IN SHIPMENT ACT--Table of Contents




Sec.
362.1  Declaration of ``valuables''.
362.2  Amendments.

    Authority: Secs. 6, 7, 50 Stat. 480; 40 U.S.C. 728, 729.



Sec. 362.1  Declaration of ``valuables''.

    It is determined that replacements, in accordance with the procedure 
established under section 3 of the Government Losses in Shipment Act (50 
Stat. 479, as amended; 5 U.S.C. 134b), of the articles or things or 
representatives of value enumerated and referred to in this section 
would be in the public interest; accordingly, they are hereby declared 
to be ``valuables'' within the meaning of the act.
    (a) Money of the United States and foreign countries. Currency, 
included mutilated currency and canceled currency, coins, including 
uncurrent coins, and specie.
    (b) Securities and other instruments or documents, private and 
public.

Abstracts of title.
Assignments.
Bills.
Bonds.
Certificates of deposit.
Certificates of indebtedness.
Checks, drafts and money orders.
Coupons.
Debentures.
Deeds.
Equipment trust certificates.
Mortgages.
Notes.
Stamps, including postage, revenue, license, food order and public debt.
Stamped envelopes and postal cards.
Stock certificates.
Trust receipts.
Voting trust receipts.
Warehouse receipts.
Warrants.


And other instruments or documents similar to the foregoing and whether 
complete, incomplete, mutilated, canceled, in definitive form or 
represented by interim documents.
    (c) Precious metals and stones. Diamonds and other precious stones. 
Gold, silver and any other precious or rare

[[Page 462]]

metal, including articles composed thereof.
    (d) All other. Works and collections of artistic, historical, 
scientific or educational value which are the property of the United 
States or which may be loaned to the United States at its request, or 
which may be shipped on authority of the United States for its 
examination or acceptance as a gift.

[4 FR 3796, Sept. 1, 1939, as amended at 5 FR 2653, July 25, 1940. 
Redesignated at 49 FR 47002, Nov. 30, 1984. Further redesignated at 50 
FR 51394, Dec. 17, 1985]



Sec. 362.2  Amendments.

    The Secretary of the Treasury may, at any time, or from time to 
time, make supplemental or amendatory declaration of valuables.

[4 FR 3796, Sept. 1, 1939, as amended at 5 FR 2653, July 25, 1940. 
Redesignated at 49 FR 47002, Nov. 30, 1984. Further redesignated at 50 
FR 51394, Dec. 17, 1985]



PART 370--ELECTRONIC TRANSACTIONS AND FUNDS TRANSFERS RELATING TO UNITED STATES SECURITIES--Table of Contents




                     Subpart A--General Information

Sec.
370.0  What does this part cover?
370.1  What special terms do I need to know to understand this part?

                      Subpart B--Credit ACH Entries

370.5  How can I appoint a financial institution to receive payments on 
          my behalf?
370.6  What requirements apply to a financial institution that handles a 
          credit entry?
370.7  How can my financial institution change my designated deposit 
          account?
370.8  Are there any requirements related to a prenotification entry?
370.9  How can my payment instructions be changed?
370.10  What can cause my payments to be suspended?
370.11  What must my financial institution do when it receives a 
          payment?
370.12  What happens if an error is made in a credit entry, or if a 
          duplicate credit entry is made?
370.13  Can time limits for taking an action on a credit entry be 
          extended?
370.14  Can substitute payment procedures be used?
370.15  What limitations exist on liability?

                        Subpart C--Debit Entries

370.20  What requirements apply if I want to authorize a debit entry to 
          my deposit account?
370.21  Are there any requirements related to a prenotification entry?
370.22  What requirements apply to a financial institution that debits a 
          deposit account?
370.23  What other requirements apply to a financial institution?
370.24  What right does the Bureau of the Public Debt have to terminate 
          or suspend debit entries?
370.25  What rights do I have to terminate or suspend debit entries?
370.26  What limitations exist on liability?

  Subpart D--Electronic Submission of Transaction Requests Through the 
                        Bureau of the Public Debt

370.35  Does the Bureau of the Public Debt accept all electronically 
          signed transaction requests?
370.36  When does a transaction request become effective?
370.37  Where is the point of transaction for an electronically 
          submitted transaction request?
370.38  What is the legal effect of an electronic signature?
370.39  To what extent is a digital signature admissible in any civil 
          litigation or dispute?
370.40  Can I be held accountable if my negligence contributes to a 
          forged signature?
370.41  What limitations exist on liability?

                    Subpart E--Additional Provisions

370.45  What is the status of a security if the remittance cannot be 
          collected?
370.46  Are there any situations in which the Bureau of the Public Debt 
          may waive these regulations?
370.47  To what extent may the Bureau of the Public Debt change these 
          regulations?

    Authority: 12 U.S.C. 391; 31 U.S.C. chapter 31.

    Source: 64 FR 40487, July 26, 1999, unless otherwise noted.



                     Subpart A--General Information



Sec. 370.0  What does this part cover?

    (a) Scope. This part applies to the transfer of funds by the 
Automated Clearing House method as used by us in connection with United 
States securities. This part also provides regulations for the 
electronic submission of

[[Page 463]]

transaction requests through us, except as varied by agreement or as 
otherwise provided. This part does not apply to transactions for the 
sale of United States Savings Bonds accomplished through savings bond 
issuing agents generally, except and to the extent we direct otherwise.
    (b) Operating Rules of the National Automated Clearing House 
Association and Regulations of the Financial Management Service. The 
Operating Rules of the National Automated Clearing House Association 
generally apply to these transactions. However, the Operating Rules do 
not apply to the extent that the Operating Rules are preempted entirely 
and excluded specifically by application of Financial Management Service 
regulations in part 210 of this chapter. In the event of any 
inconsistencies between this part 370 and either the Operating Rules or 
part 210, this part 370 applies.
    (c) Regulations of the Board of Governors of the Federal Reserve. To 
the extent that Regulation E (12 CFR part 205) and Regulation Z (12 CFR 
part 226) of the Board of Governors of the Federal Reserve System apply 
to transactions authorized by this part, those Federal laws are 
unaffected by this part 370.
    (d) Variance by agreement. The terms of this part may be varied by 
agreement.



Sec. 370.1  What special terms do I need to know to understand this part?

    Automated Clearing House (ACH) entry means a transaction in 
accordance with the Operating Rules of the National Automated Clearing 
House Association, as modified by these regulations and other law. The 
regulations in this part control in the event of any inconsistencies 
with the applicable Operating Rules.
    Credit entry means an ACH entry for the payment of money to a 
deposit account.
    Debit entry means an ACH entry for the collection of money from a 
deposit account.
    Deposit account means a demand deposit (checking), savings, or asset 
account (other than an occasional or incidental credit balance in a 
credit plan) held directly or indirectly by a financial institution.
    Digital signature means a type of electronic signature. A signer 
creates a digital signature by using public-key encryption to transform 
a message digest of an electronic message. If a recipient of the digital 
signature has an electronic message, message digest function, and the 
signer's public key, the recipient can verify:
    (1) Whether the transformation was accomplished with the private key 
that corresponds to the signer's public key; and
    (2) Whether the electronic message has been altered since the 
transformation was made.
    Electronic message means information that is stored in an electronic 
medium and is retrievable in perceivable form.
    Electronic signature means a signature of an electronic message 
that:
    (1) Identifies and authenticates a particular person as the source 
of the electronic message; and
    (2) Indicates such person's approval of the information contained in 
the electronic message.
    Financial institution means:
    (1) Any insured bank as defined in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813) or any bank that is eligible to make 
application to become an insured bank under section 5 of such Act (12 
U.S.C. 1815);
    (2) Any mutual savings bank as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813) or any bank that is eligible to 
make application to become an insured bank under section 5 of such Act 
(12 U.S.C. 1815);
    (3) Any savings bank as defined in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813) or any bank that is eligible to make 
application to become an insured bank under section 5 of such Act (12 
U.S.C. 1815);
    (4) Any insured credit union as defined in section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752) or any credit union that is 
eligible to make application to become an insured credit union pursuant 
to section 201 of such Act (12 U.S.C. 1781);
    (5) Any savings association as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813) that is an

[[Page 464]]

insured depository institution as defined in that act or is eligible to 
apply to become an insured depository institution under that act; and
    (6) Any Federal branch or agency of a foreign bank as defined in 
section 1(b) of the International Banking Act, as amended (12 U.S.C. 
3101).
    Investor account is our record of your TreasuryDirect holdings, 
including a list of your total security holdings, the exact form of 
registration of your account, your mailing address, your TreasuryDirect 
account number, your social security account number or employer 
identification number, and your deposit account instructions.
    Message digest function means an algorithm that transforms an 
electronic message into a seemingly unintelligible, generally smaller, 
result called the message digest. A message digest function has these 
qualities:
    (1) The same electronic message yields the same message digest every 
time the algorithm is executed;
    (2) It is computationally infeasible that an electronic message can 
be derived from the message digest result produced by the algorithm; and
    (3) it is computationally infeasible that two electronic messages 
can be found that produce the same message digest using the algorithm.
    Payment means, for the purpose of this part, funds paid by us to 
you.
    Person means any natural person or organization.
    Public-key encryption means a cryptographic process which generates 
and employs a key pair, consisting of a public key and a different but 
mathematically related private key. One use of the public key is to 
verify a digital signature created by the private key.
    Security means an obligation offered by the Secretary of the 
Treasury.
    Settlement date means the date an exchange of funds with respect to 
an ACH entry is reflected on the books of the Federal Reserve Bank(s).
    Signature means any symbol or method executed or adopted by a person 
with present intention to be bound.
    We (or ``us'') refers to the Secretary of the Treasury and the 
Secretary's delegates at the Treasury Department and Bureau of the 
Public Debt. The term also extends to any fiscal or financial agent 
acting on behalf of the United States when designated to act by the 
Secretary or the Secretary's delegates. The term does not extend to 
United States Savings Bond issuing and paying agents.
    You means a deposit account owner, in subparts B and C, unless 
stated otherwise. The word ``you'' means a person who electronically 
submits transaction requests through us, in subpart D.



                      Subpart B--Credit ACH Entries



Sec. 370.5  How can I appoint a financial institution to receive payments on my behalf?

    You must name a financial institution to receive payments through 
credit entries using the ACH method. You also must identify the deposit 
account to which payments are to be made. To do this, you must use a 
form approved by us.



Sec. 370.6  What requirements apply to a financial institution that handles a credit entry?

    A financial institution that accepts and handles a credit entry 
initiated by us agrees to the provisions of this subpart, and warrants 
that it will comply with all requirements imposed upon Receiving 
Depository Financial Institutions under the Operating Rules of the 
National Automated Clearing House Association, as modified by these 
regulations and other law.



Sec. 370.7  How can my financial institution change my designated deposit account?

    If your financial institution requests us to make a change in your 
deposit account number or type of your account, we will change the 
information without requiring any confirmation from you. The request 
from the financial institution must be made following the Operating 
Rules of the National Automated Clearing House Association. The 
financial institution's request will be deemed an agreement by the 
institution to indemnify us and you for any loss resulting from the 
requested change.

[[Page 465]]



Sec. 370.8  Are there any requirements related to a prenotification entry?

    (a) Use of prenotification in our discretion. In our discretion, we 
may initiate a prenotification entry to a financial institution before 
we send a credit entry. We may also send a prenotification message 
whenever there is a change in the payment instructions. If we send a 
prenotification message, we will follow the time frames as established 
by the Operating Rules of the National Automated Clearing House 
Association. A prenotification is a zero-dollar ACH entry that can help 
us determine whether there might be problems with sending a subsequent 
credit entry.
    (b) Requirements placed upon financial institution that receives a 
prenotification. A financial institution must respond to a 
prenotification within the time frame for such responses as established 
by the Operating Rules of the National Automated Clearing House 
Association. If the receiving financial institution does not respond to 
the prenotification message within the specified time period, we may 
interpret the nonresponsiveness as the financial institution's agreement 
to this subpart. Furthermore, a financial institution warrants by its 
nonresponsiveness that the deposit account number and the type of 
account contained in the prenotification entry message was accurate as 
of the moment the financial institution received it.



Sec. 370.9  How can my payment instructions be changed?

    Your payment instructions will continue to apply until either you or 
your financial institution requests us to make a change.



Sec. 370.10  What can cause my payments to be suspended?

    (a) Change in deposit account. We will suspend payments if we 
receive notice that your deposit account has been closed, that someone 
named on your deposit account is dead or has been declared legally 
incompetent, that there is a change in the title of your deposit account 
that alters your interests; or, if a corporation is the owner, that it 
has been dissolved.
    (b) Change in status of owner. We will suspend payments when we 
receive notice that an owner of a bond, security, or investor account is 
dead or has been declared legally incompetent, or in any case where we 
receive notice of a change in the name or status of an organization or 
representative named on a bond, security, or investor account.
    (c) Continuation of Suspension. Payments will continue to be 
suspended until we receive satisfactory evidence as to who is authorized 
or entitled to receive payments.



Sec. 370.11  What must my financial institution do when it receives a payment?

    An institution which receives a payment on behalf of its customer 
must:
    (a) Upon receipt, make the payment available to you on the payment 
date. If a scheduled payment date is not a business day for the Federal 
Reserve Bank of the district in which the institution is located, 
payment will be made on the next-succeeding business day. If the 
institution is unable to make a credit entry to the designated account, 
it must return the payment in accordance with the Operating Rules of the 
National Automated Clearing House Association.
    (b) Promptly notify us when your account has been closed, or when it 
is on notice of the death or legal incapacity of you or any other 
individual named on your account, or when it is on notice of the 
dissolution of a corporation in whose name the deposit account is held. 
The institution must return all payments received along with an 
explanation for the return.



Sec. 370.12  What happens if an error is made in a credit entry, or if a duplicate credit entry is made?

    If we make an erroneous credit entry under this part, we will make a 
corrected credit entry to your account. We will then take action to 
recover the erroneous credit entry, or any duplicate credit entry, as 
follows:
    (a) Return of amount of erroneous or duplicate credit entry by 
financial institution. We will send a notice to the financial 
institution to which the erroneous or duplicate credit entry was sent.

[[Page 466]]

When it receives this notice, the financial institution must immediately 
return to the appropriate Federal Reserve Bank an amount equal to the 
credit entry. If the institution is unable to do this, the institution 
must immediately notify us, and provide any information that it has 
about the matter. We reserve the right to request the return of a 
partial amount of an erroneous or duplicate credit entry.
    (b) Collection of amount of unreturned erroneous or duplicate credit 
entry. Where the erroneous or duplicate credit entry has not been 
returned, we will undertake any other actions that are appropriate. To 
the extent permitted by law, the collection action may include deducting 
the amount owed from future credit entries made to the deposit account 
to which the erroneous or duplicate credit entry was made.
    (c) Authorization of Debit to collect unreturned dulicate or 
erroneous credit entry. If a financial institution has not responded 
within 60 calendar days of the notice, its acceptance of the credit 
entry will be considered an authorization for a debit in the amount of 
the entry. The debit will be made from the account maintained or 
utilized by the financial institution at the Federal Reserve Bank to 
which the entry was made. An institution designated by a financial 
institution to receive payment on its behalf, in permitting the usage, 
is deemed to have authorized a debit. The debit will be made from its 
account maintained at the Federal Reserve Bank to which the entry was 
made. The institution to which the credit entry has been directed is 
deemed to have agreed to provide information and assistance to recover 
any erroneous or duplicate entry. You are also deemed to have agreed to 
provide information and assistance, and to take any action provided by 
law to recover an erroneous or duplicate credit entry.



Sec. 370.13  Can time limits for taking an action on a credit entry be extended?

    If we or your financial institution are delayed beyond applicable 
time limits in taking any action with respect to a credit entry because 
of circumstances beyond our control, then the time for taking that 
action will be extended as necessary until the cause of the delay ends.



Sec. 370.14  Can substitute payment procedures be used?

    We may use substitute payment procedures, instead of ACH, if we 
consider it to be necessary. Any such action is final.



Sec. 370.15  What limitations exist on liability?

    (a) We may rely on the information provided by you or anyone else 
authorized to provide information concerning your financial institution 
or deposit account to which payments are to be made. We do not need to 
verify this information. We are not liable for any action we may take in 
reliance on the information furnished.
    (b) Our liability does not extend beyond the amount of the payment 
due.
    (c) When you name a financial institution to receive payments on 
your behalf, you are appointing that institution as your agent for the 
receipt of payments. When a credit entry is made to your financial 
institution for deposit to your account following your instructions, we 
no longer have any further responsibility for that payment. Where your 
financial institution has arranged with the Federal Reserve Bank to have 
payments made through another financial institution, the crediting of 
your payment to that institution relieves us of any further 
responsibility for that payment.



                        Subpart C--Debit Entries



Sec. 370.20  What requirements apply if I want to authorize a debit entry to my deposit account?

    (a) General. You may pay for a security and related fees by 
authorizing us to initiate one or more debit entries to your deposit 
account. For a purchase of a book-entry security to be held in an 
investor account maintained by us, you must be named on the investor 
account. The authorization must be accomplished only through forms or 
means approved by us.
    (b) Single-entry and recurring debit entries. You only may authorize 
single-entry debits for purchases of book-

[[Page 467]]

entry securities held in TreasuryDirect. You only may authorize 
recurring debit entries for purchases of definitive savings bonds.
    (c) Credit entries to be made to same deposit account. To the extent 
that payments by us with respect to a security are to be made through 
credit entries, you must receive debit and credit entries in the same 
deposit account.
    (d) Signature. The authorization must have your signature and that 
of any other person whose signature is required to withdraw funds from 
the deposit account. We need not verify your identity or the 
authenticity of your signature.



Sec. 370.21  Are there any requirements related to a prenotification entry?

    (a) Use of prenotification in our discretion. In our discretion, we 
may initiate a prenotification entry to a financial institution prior to 
sending a debit entry. A prenotification is a zero-dollar ACH entry that 
can help us determine whether there might be problems with sending a 
subsequent debit entry.
    (b) Requirements placed upon financial institution that receives a 
prenotification. If sent, a financial institution must respond to a 
prenotification within the time frame for such responses as established 
by the National Automated Clearing House Association. If the receiving 
financial institution does not respond to the prenotification message 
within the specified time period, we may interpret the nonresponsiveness 
as the financial institution's agreement to this subpart. Furthermore, a 
financial institution warrants by its nonresponsiveness that the deposit 
account number and the type of account contained in the prenotification 
entry message was accurate as of the moment the financial institution 
received it.



Sec. 370.22  What requirements apply to a financial institution that debits a deposit account?

    A financial institution that debits a deposit account upon receiving 
a debit initiated by us agrees to the provisions of this subpart. A 
financial institution that does so also warrants that it has the 
authority to receive debit entries.



Sec. 370.23  What other requirements apply to a financial institution?

    The financial institution warrants that it will comply with all 
requirements imposed upon Receiving Depository Financial Institutions 
under the Operating Rules of the National Automated Clearing House 
Association, as modified by these regulations and other law.



Sec. 370.24  What right does the Bureau of the Public Debt have to terminate or suspend debit entries?

    We may terminate or suspend the availability of one or more debit 
entries in any case or class of cases, and may do so without notice at 
any time. A decision to terminate or suspend the availability of debit 
entries is in our sole discretion and is final.



Sec. 370.25  What rights do I have to terminate or suspend debit entries?

    (a) General. If you are an investor account owner or deposit account 
owner, you generally may terminate or suspend one or more debit entries 
by notifying us orally or in writing at least three business days before 
the scheduled date of a transfer. In response to an oral notice, we may 
require you to give written notice, to be received by us within fourteen 
days of an oral notice. An oral notice ceases to be binding after 
fourteen days if you fail to provide the required written confirmation. 
A suspension will remain in effect for the duration you specify, but for 
no more than six months. The termination and suspension methods need not 
be recited in the authorization. These termination or suspension rights 
are in addition to those that you may have through your financial 
institution under Regulation E of the Board of Governors of the Federal 
Reserve System (12 CFR part 205).
    (b) Exception. If you submit a debit entry authorization in 
conjunction with a Treasury auction tender for the purchase of a book-
entry security, you cannot terminate or suspend a debit entry after the 
auction closes.



Sec. 370.26  What limitations exist on liability?

    If we sustain a loss because a financial institution fails to handle 
an entry

[[Page 468]]

in accordance with this part, the financial institution is liable to us 
for the loss, but not beyond the amount of the debit entry. In no 
instance does our liability extend beyond the amount of the debit entry.



  Subpart D--Electronic Submission of Transaction Requests Through the 
                        Bureau of the Public Debt



Sec. 370.35  Does the Bureau of the Public Debt accept all electronically signed transaction requests?

    An electronic signature will not be accepted if it has not been 
accomplished through a method that has been approved for specific 
purposes by us.



Sec. 370.36  When does a transaction request become effective?

    Except for auction bids of U.S. securities or unless otherwise 
agreed, a transaction request becomes effective at the moment we send a 
confirmation message. In no instance does a transaction request become 
effective before we actually receive the request.



Sec. 370.37  Where is the point of transaction for an electronically submitted transaction request?

    For jurisdiction and venue purposes, the point of transaction for a 
transaction request handled pursuant to this subpart is Parkersburg, 
West Virginia, regardless of from where the transaction request is 
transmitted or where the transaction request is actually processed.



Sec. 370.38  What is the legal effect of an electronic signature?

    An electronic signature and any electronic message to which it is 
affixed or attached may not be denied legal effect, including legal 
effect as a signature, a writing, or an original, solely because the 
signature or record is in electronic form.



Sec. 370.39  To what extent is a digital signature admissible in any civil litigation or dispute?

    In asserting a digital signature against you in any civil litigation 
or dispute, extrinsic evidence of authenticity as a condition precedent 
of admissibility (such as testimony about the scientific validity of 
digital signatures) is not necessary to establish:
    (a) That a digital signature corresponds to a specific public key 
pair, and;
    (b) That an electronic message to which the digital signature is 
affixed has not been altered from its original form.



Sec. 370.40  Can I be held accountable if my negligence contributes to a forged signature?

    (a) General. If your failure to exercise ordinary care substantially 
contributes to the submission of a forged signature, then you cannot 
claim that the signature is a forgery. However, we cannot invoke this 
section against you if we cannot first establish that we were reasonable 
in relying upon the signature. If we can do so, you bear the burden of 
production and the burden of persuasion in establishing your exercise of 
ordinary care. If you cannot do so, then you cannot claim that the 
signature is a forgery.
    (b) Exception. This section has no application in any dispute 
involving a debit authorization or credit card transaction.



Sec. 370.41  What limitations exist on liability?

    In no instance does our liability extend beyond the amount of the 
transaction.



                    Subpart E--Additional Provisions



Sec. 370.45  What is the status of a security if the remittance cannot be collected?

    If we cannot promptly collect all of the remittance for a security, 
we may in our discretion cancel the security unless it has been legally 
transferred for value to a third person who had no knowledge of the 
improper debit entry at the time of the transfer.



Sec. 370.46  Are there any situations in which the Bureau of the Public Debt may waive these regulations?

    We reserve the right, in our discretion, to waive any provision of 
these regulations in any case or class of

[[Page 469]]

cases. We may do so if such action is not inconsistent with law and will 
not subject the United States to substantial expense or liability.



Sec. 370.47  To what extent may the Bureau of the Public Debt change these regulations?

    Any aspect of this part may be changed at any time and without 
notice. You assume the risk that a change may terminate a provision that 
was to your advantage. Nothing in this part creates vested rights in 
your favor.



PART 375--MARKETABLE TREASURY SECURITIES REDEMPTION OPERATIONS--Table of Contents




                     Subpart A--General Information

Sec.
375.0  What authority does the Treasury have to redeem its securities?
375.1  Where are the rules for the redemption operation located?
375.2  What special definitions apply to this rule?
375.3  What is the role of the Federal Reserve Bank of New York in this 
          process?

            Subpart B--Offering, Certifications, and Delivery

375.10  What is the purpose of the redemption operation announcement?
375.11  Who may participate in a redemption operation?
375.12  How do I submit an offer?
375.13  What requirements apply to offers?
375.14  Do I have to make any certifications?
375.15  Who is responsible for delivering securities?

  Subpart C--Determination of Redemption Operation Results; Settlement

375.20  When will the Treasury decide on which offers to accept?
375.21  When and how will the Treasury announce the redemption operation 
          results?
375.22  Will I receive confirmations and, if I am submitting offers for 
          others, do I have to provide confirmations?
375.23  How does the securities delivery process work?

                   Subpart D--Miscellaneous Provisions

375.30  Does the Treasury have any discretion in this process?
375.31  What could happen if someone does not fully comply with the 
          redemption operation rules or fails to deliver securities?

    Authority: 5 U.S.C. 301; 31 U.S.C. 3111; 12 U.S.C. 391.

    Source: 65 FR 3116, Jan. 19, 2000, unless otherwise noted.



                     Subpart A--General Information



Sec. 375.0  What authority does the Treasury have to redeem its securities?

    Section 3111 of Title 31 of the United States Code authorizes the 
Secretary of the Treasury to use money received from the sale of an 
obligation and other money in the general fund of the Treasury to buy, 
redeem, or refund, at or before maturity, outstanding bonds, notes, 
certificates of indebtedness, Treasury bills, or savings certificates of 
the United States Government. For the purposes of this part, we will 
refer to these outstanding obligations as ``securities''.



Sec. 375.1  Where are the rules for the redemption operation located?

    The provisions in this part and the redemption operation 
announcement govern the redemption of marketable Treasury securities 
under 31 U.S.C. 3111. (See Sec. 375.10.)



Sec. 375.2  What special definitions apply to this rule?

    The definitions in 31 CFR part 356 govern this part except as 
follows:
    Accrued interest means an amount payable by the Treasury as part of 
the settlement amount for the interest income earned between the last 
interest payment date up to and including the settlement date.
    Bank means the Federal Reserve Bank of New York.
    Customer means a person or entity on whose behalf a submitter has 
been directed to submit an offer of a specified amount of securities in 
a specific redemption operation.
    Minimum offer amount means the smallest par amount of a security 
that may be offered to the Treasury. We will state the minimum offer 
amount in the redemption operation announcement.
    Multiple means the smallest additional par amount of a security that 
may be offered to the Treasury. We will

[[Page 470]]

state the multiple in the redemption operation announcement.
    Offer means an offer to deliver for redemption a stated par amount 
of a specific security to the Treasury at a stated price.
    Price means the dollar amount to be paid for a security expressed as 
a percent of its current par amount.
    Privately held amount means the total amount outstanding of a 
security less holdings of the Federal Reserve System and Federal 
Government accounts.
    Redemption amount means the maximum par amount of securities that we 
are planning to redeem through a redemption operation. We will state the 
redemption amount in the redemption operation announcement.
    Redemption operation means a competitive process by which the 
Treasury accepts offers of marketable Treasury securities that by their 
terms are not immediately payable.
    Security means an outstanding unmatured obligation of the United 
States Government that the Secretary is authorized to buy, redeem or 
refund under section 3111 of Title 31 of the United States Code.
    Settlement means full and complete delivery of and payment for 
securities redeemed.
    Settlement amount means the par amount of each security that we 
redeem, multiplied by the price we accept in a redemption operation, 
plus any accrued interest.
    Settlement date means the date specified in the redemption operation 
announcement on which you must deliver a security to the Treasury for 
payment.
    Submitter means an entity submitting offers directly to the Treasury 
for its own account, for the account of others, or both. (See 
Sec. 375.11(a)).
    Tender means a computer transmission or document submitted in a 
redemption operation that contains one or more offers.
    We (``us'') means the Secretary of the Treasury and his or her 
delegates, including the Treasury Department, the Bureau of the Public 
Debt, and their representatives. The term also includes the Federal 
Reserve Bank of New York, acting as fiscal agent of the United States.
    You means a prospective submitter in a redemption operation.



Sec. 375.3  What is the role of the Federal Reserve Bank of New York in this process?

    As fiscal agent of the United States, the Federal Reserve Bank of 
New York performs various activities necessary to conduct a redemption 
operation under this part. These activities may include but are not 
limited to:
    (a) Accepting and reviewing tenders;
    (b) Calculating redemption operation results;
    (c) Issuing notices of redemptions;
    (d) Accepting deliveries of Treasury securities at settlement; and
    (e) Processing the Treasury payment for securities delivered at 
settlement.



            Subpart B--Offering, Certifications, and Delivery



Sec. 375.10  What is the purpose of the redemption operation announcement?

    We provide public notice that we are redeeming Treasury securities 
by issuing a redemption operation announcement. This announcement lists 
the details of each proposed redemption operation, including the maximum 
redemption amount, the range of maturities of eligible securities, 
descriptions of the securities that fall within that maturity range, and 
the redemption operation and settlement dates. The redemption operation 
announcement and this part specify the terms and conditions of a 
redemption operation. If anything in the redemption operation 
announcement differs from anything in this part, the redemption 
operation announcement will apply. Accordingly, you should read the 
applicable redemption operation announcement along with this part.



Sec. 375.11  Who may participate in a redemption operation?

    (a) Submitters. To be a submitter, you must be an institution that 
the Federal Reserve Bank of New York has approved to conduct open market 
transactions with the Bank.
    (b) Others. A person or entity other than a submitter may 
participate only if it arranges to have an offer or offers submitted on 
its behalf by a submitter.

[[Page 471]]



Sec. 375.12  How do I submit an offer?

    As a submitter, you must submit an offer in a tender to the Treasury 
via the Federal Reserve Bank of New York. You must submit any tenders in 
an approved format and the Bank must receive them prior to the closing 
time stated in the redemption operation announcement. If we do not 
receive your tenders timely, we will reject them. Your tenders are 
binding on you after the closing time specified in the redemption 
operation announcement. You are responsible for ensuring that we receive 
your tenders on time. We will not be responsible in any way for any 
unauthorized tender submissions or for any delays, errors, or omissions 
in submitting tenders.



Sec. 375.13  What requirements apply to offers?

    (a) General. You may only submit competitive offers (specifying a 
price). All offers must state the security description, par amount, and 
price of each security offered. All offers must equal or exceed the 
minimum offer amount, and be in the multiple, stated in the redemption 
operation announcement.
    (b) Price format. You must express offered prices in terms of price 
per $100 of par with three decimals, e.g., 102.172. The first two 
decimals represent fractional 32nds of a dollar. The third decimal 
represents eighths of a 32nd of a dollar, and must be a 0, 2, 4, or 6. 
For example, an offer of 102.172 means one hundred two and seventeen 
32nds and two eighths of a 32nd, or in decimals, 102.5390625.
    (c) Maximum number of offers. There is no limit on the number of 
offers you may make for each eligible security. There is also no limit 
on the number of eligible securities you may offer.



Sec. 375.14  Do I have to make any certifications?

    By submitting a tender offering a security or securities for sale, 
you certify that you are in compliance with this part and the redemption 
operation announcement.



Sec. 375.15  Who is responsible for delivering securities?

    As a submitter, you are responsible for delivering any securities we 
accept in the redemption operation, including any securities for which 
you submitted offers on behalf of others. (See Sec. 375.23.) All 
securities you deliver must be free and clear of all liens, charges, 
claims, and any other restrictions.



  Subpart C--Determination of Redemption Operation Results; Settlement



Sec. 375.20  When will the Treasury decide on which offers to accept?

    We will determine which offers or portions of offers to accept after 
the closing time for receipt of tenders. All such determinations will be 
final.



Sec. 375.21  When and how will the Treasury announce the redemption operation results?

    We will make an official announcement of the redemption operation 
results through a press release. For each security we redeem, the press 
release will include such information as the amounts offered and 
accepted, the highest price accepted, and the remaining privately held 
amount outstanding.



Sec. 375.22  Will I receive confirmations and, if I am submitting offers for others, do I have to provide confirmations?

    (a) Confirmations to submitters. We will provide a confirmation of 
acceptance or rejection in the form of a results message to submitters 
of offers by the close of the business day of the redemption operation.
    (b) Confirmation of customer offers. If you submit a successful 
offer for a customer, you are responsible for notifying that customer of 
the impending redemption.



Sec. 375.23  How does the securities delivery process work?

    If any of the offers you submitted are accepted, you must transfer 
the correct book-entry Treasury securities in the correct par amount 
against the correct settlement amount on the settlement date. You must 
deliver the securities

[[Page 472]]

to the account specified in the redemption operation announcement.



                   Subpart D--Miscellaneous Provisions



Sec. 375.30  Does the Treasury have any discretion in this process?

    (a) We have the discretion to:
    (1) Accept or reject any offers or tenders submitted in a redemption 
operation;
    (2) Redeem less than the amount of securities specified in the 
redemption operation announcement;
    (3) Add to, change, or waive any provision of this part; or
    (4) Change the terms and conditions of a redemption operation.
    (b) Our decisions under this part are final. We will provide a 
public notice if we change any redemption operation provision, term or 
condition.



Sec. 375.31  What could happen if someone does not fully comply with the redemption operation rules or fails to deliver securities?

    (a) General. If a person or entity fails to comply with any of the 
redemption operation rules in this part, we will consider the 
circumstances and take what we deem to be appropriate action. This could 
include barring the person or entity from participating in future 
redemption operations under this part and future auctions under 31 CFR 
part 356. We also may refer the matter to an appropriate regulatory 
agency.
    (b) Liquidated damages. If you fail to deliver securities on time, 
we may require you to pay liquidated damages of up to 1% of your 
projected settlement amount.



PART 380--COLLATERAL ACCEPTABILITY AND VALUATION--Table of Contents




                     Subpart A--General Information

Sec.
380.0   What do these regulations govern?
380.1   What special definitions apply to this part?

           Subpart B--Acceptable Collateral and its Valuation

380.2   What collateral may I pledge if I am a depositary or a financial 
          agent of the Government under 31 CFR part 202, and what value 
          will you assign to it?
380.3   What collateral may I pledge if I am a Treasury Tax and Loan 
          depositary under 31 CFR part 203, and what value will you 
          assign to it?
380.4   What collateral may I pledge instead of a surety bond under 31 
          CFR part 225, and what value will you assign to it?

                   Subpart C--Miscellaneous Provisions

380.5   Where can I find current information, and who can I contact for 
          additional guidance and interpretation?

    Authority: 12 U.S.C. 90, 265-266, 332, 391, 1452(d), 1464(k), 1767, 
1789a, 2013, 2122, 3101-3102; 26 U.S.C. 6302; 31 U.S.C. 321, 323, 3301-
3304, 3336, 9301, 9303.

    Source: 65 FR 55427, Sept. 13, 2000, unless otherwise noted.



                     Subpart A--General Information



Sec. 380.0  What do these regulations govern?

    The regulations in this part govern the types of acceptable 
collateral that you may pledge to secure deposits of public monies and 
other financial interests of the Federal Government, as well as the 
valuation of that collateral. Specifically, the regulations in this part 
apply to the programs governed by the Department of the Treasury's 
regulations at 31 CFR part 202 (Depositaries and Financial Agents of the 
Government), 31 CFR part 203 (Payment of Federal Taxes and the Treasury 
Tax and Loan Program), and 31 CFR part 225 (Acceptance of Bonds Secured 
by Government Obligations in Lieu of Bonds with Sureties). The 
regulations in this part apply only to the acceptability and valuation 
of collateral that may be pledged under these programs. 31 CFR parts 
202, 203, and 225 continue to govern the respective programs themselves.



Sec. 380.1  What special definitions apply to this part?

    Special definitions that may apply to this part are contained in 31 
CFR parts 202, 203 and 225.

[[Page 473]]



           Subpart B--Acceptable Collateral and its Valuation



Sec. 380.2  What collateral may I pledge if I am a depositary or a financial agent of the Government under 31 CFR part 202, and what value will you assign to 
          it?

    Unless we specify otherwise, we will list the types and valuation of 
acceptable collateral in Treasury procedural instructions. We will also 
post updated information and guidance on Treasury's Bureau of the Public 
Debt website at www.publicdebt.treas.gov.



Sec. 380.3  What collateral may I pledge if I am a Treasury Tax and Loan depositary under 31 CFR part 203, and what value will you assign to it?

    Unless we specify otherwise, we will list the types and valuation of 
acceptable collateral in Treasury procedural instructions. We will also 
post updated information and guidance on Treasury's Bureau of the Public 
Debt website at www.publicdebt.treas.gov.



Sec. 380.4  What collateral may I pledge instead of a surety bond under 31 CFR part 225, and what value will you assign to it?

    Unless we specify otherwise, we will list the types and valuation of 
acceptable collateral in Treasury procedural instructions. We will also 
post updated information and guidance on Treasury's Bureau of the Public 
Debt website at www.publicdebt.treas.gov.



                   Subpart C--Miscellaneous Provisions



Sec. 380.5  Where can I find current information, and who can I contact for additional guidance and interpretation?

    You can find a current list of acceptable classes of securities, 
instruments and respective valuations on Treasury's Bureau of the Public 
Debt website at www.publicdebt.treas.gov. You may also contact the 
Office of the Commissioner. We can be reached by postal mail at: 
Department of the Treasury, Bureau of the Public Debt, Office of the 
Commissioner, Government Securities Regulations Staff, 999 E Street, 
NW., Room 315, Washington, DC 20239-0001, or by e-mail at 
[email protected].



PART 391--WAIVER OF INTEREST, ADMINISTRATIVE COSTS, AND PENALTIES--Table of Contents




Sec.
391.0  Scope of regulations.
391.1  General.
391.2  Equitable considerations.
391.3  Resolution of disputes.
391.4  Documentary evidence.
391.5  Waiver approval.

    Authority: 31 U.S.C. 3701; 31 U.S.C. 3711; 31 U.S.C. 3717.

    Source: 50 FR 6344, Feb. 15, 1985, unless otherwise noted.



Sec. 391.0  Scope of regulations.

    These regulations apply to the waiver of late charges on claims due 
the Bureau of the Public Debt as authorized by 31 U.S.C. 3717(h). They 
are consistent with the Federal Claims Collection Standards on interest, 
administrative costs, and penalties prescribed jointly by the General 
Accounting Office and the Department of Justice and set forth in 4 CFR 
102.13. The term ``claim'' as used in this part refers to an amount of 
money or property that has been determined to be owed to the Bureau of 
the Public Debt from any person, organization, or entity, except another 
Federal agency. The term ``late charges'' as used in this part includes 
interest, administrative costs, and penalties. When applying the 
following regulations, a distinction shall be drawn between an 
adjustment and a waiver. An adjustment is an account correction under 
any circumstances where the Bureau records a claim or accrues late 
charges to which it is not legally entitled. An adjustment may be made 
without the promulgation of regulations. A waiver applies whenever the 
Bureau accrues late charges it is entitled to assess and later 
relinquishes that right. Two examples of an adjustment are: (a) Where 
the underlying claim is without merit, and (b) where the debtor is not 
notified of the claim as required by 31 U.S.C. 3717. The latter includes 
being misinformed as to the amount of the charges or the time of their 
commencement.

[[Page 474]]



Sec. 391.1  General.

    (a) Waiver of late charges. Late charges may be waived:
    (1) When the underlying claim is compromised in accordance with 4 
CFR part 103;
    (2) Where the underlying claim is not compromised but it is 
appropriate to waive late charges under the criteria of 4 CFR part 103 
relating to enforcement policy;
    (3) When collection of the underlying claim is terminated in 
accordance with 4 CFR part 104;
    (4) When a claim is suspended in accordance with 4 CFR part 104.
    (5) Where the cost of collecting the unpaid late charges would 
approach or exceed the amount of unpaid late charges to be collected and 
the amount of late charges does not qualify for referral to a collection 
agency or the Department of Justice;
    (6) Where the late charges pertain to claims involving savings bonds 
and notes arising under 31 U.S.C. 3105 and 3106 which are replaced 
pursuant to 31 U.S.C. 3126;
    (7) For reasons of equity or good conscience as provided in 
Sec. 391.2.
    (b) Partial waiver. Late charges may be waived in full or in part.



Sec. 391.2  Equitable considerations.

    For reasons of equity and good conscience, late charges may be 
waived under the circumstances identified in this section.
    (a) Where, without fault or bad faith, the debtor could not submit 
payment within 30 days of the interest accrual date, the mandatory 
waiver provision in 4 CFR 102.13(g) may be extended. Such waiver will be 
considered on a case-by-case basis. Examples include, but are not 
limited to:
    (1) Postal service delays in forwarding the notice of indebtedness 
to a new address; and
    (2) Late receipt of the notice of indebtedness where the debtor was 
away from home on an extended vacation or hospitalized.
    (b) Where an installment plan is contemplated and the amount of the 
late charges in relation to the amount of reasonably affordable 
installment payments is so large that the debt may never be paid, late 
charges may be waived.



Sec. 391.3  Resolution of disputes.

    (a) To avoid the accrual of additional late charges during the 
resolution of a dispute, a debtor has the option of paying the amount of 
the claim and filing a request for a refund together with a request for 
review of the claim.
    (b) Where the claim is a result of the Bureau's administrative 
error, late charges accruing during the review period may be waived 
unless the Bureau's actions would have placed a reasonable person on 
notice that the Bureau erred and that the person should inquire further.
    (c) Where the claim is a result of the debtor's error or negligence 
and the administrative review is unreasonably protracted, late charges 
accruing during the protracted portion of the review period may be 
waived.
    (d) The period for administrative review begins on the date the 
request for review is received and ends 10 days after the final 
determination is mailed to the debtor. This paragraph shall not apply if 
the request for review is made in bad faith or for purposes of delay.



Sec. 391.4  Documentary evidence.

    (a) When late charges are waived, the debtor's administrative file 
shall be properly documented with a memorandum. The memorandum shall 
contain a brief narrative statement describing the circumstances leading 
to the waiver and the reason(s) for granting the waiver.
    (b) A credit report or a financial statement sworn to by the debtor 
may be required before waiver of late charges is approved for a 
compromise, suspension, or termination, except where the cost of 
obtaining such a report or statement exceeds the late charges due.



Sec. 391.5  Waiver approval.

    Waivers of late charges shall be approved by the Commissioner of the 
Bureau of the Public Debt or designee, except that compromises and 
terminations of the underlying claim shall be upon the recommendation of 
the Chief Counsel in accordance with 31 CFR 5.3.

[[Page 475]]



         CHAPTER IV--SECRET SERVICE, DEPARTMENT OF THE TREASURY




  --------------------------------------------------------------------
Part                                                                Page
401             Seizure and forfeiture of vessels, vehicles 
                    and aircraft used to transport 
                    counterfeit coins, obligations, 
                    securities, and paraphernalia...........         477
402             Reproduction of canceled United States 
                    Internal Revenue Stamps.................         478
403             Authorization of all banks, U.S. Post 
                    Offices, and Disbursing Officers of the 
                    United States and their agents to 
                    deliver to the Treasury Department 
                    counterfeit obligations and other 
                    securities and coins of the United 
                    States or of any foreign government.....         478
405             Illustration of savings bonds...............         478
406             Seizure and forfeiture of gold for 
                    violations of Gold Reserve Act of 1934 
                    and gold regulations....................         479
407             Regulations governing conduct in the 
                    Treasury Building and the Treasury Annex         479
408             Designation of temporary residence of the 
                    President or other person protected by 
                    the Secret Service and temporary offices 
                    of the President and staff, or other 
                    person protected by the Secret Service--
                    rules governing access..................         481
409             Standard and procedures utilized in issuing 
                    a security clearance in connection with 
                    an application for a press pass to the 
                    White House.............................         482
411             Color illustrations of United States 
                    currency................................         484
413             Closure of streets near the White House.....         484

[[Page 477]]



PART 401--SEIZURE AND FORFEITURE OF VESSELS, VEHICLES AND AIRCRAFT USED TO TRANSPORT COUNTERFEIT COINS, OBLIGATIONS, SECURITIES, AND PARAPHERNALIA--Table of Contents




Sec.
401.1  Secret Service agents authorized to make seizures.
401.2  Custody.
401.3  Authority of District Directors of Customs to hold in custody.
401.4  Duties of Bureau of Customs.
401.5  Disposition.

    Authority: Sec. 8, 53 Stat. 1293; 49 U.S.C. 788.

    Source: 33 FR 4257, Mar. 7, 1968, unless otherwise noted.



Sec. 401.1  Secret Service agents authorized to make seizures.

    All officers of the U.S. Secret Service engaged in the enforcement 
of counterfeiting laws are hereby authorized and designated to seize 
such vessels, vehicles, and aircraft as may be subject to seizure 
because of violations of the said act of August 9, 1939, pertaining to 
contraband articles referred to in section 1(b) (3) of said act.



Sec. 401.2  Custody.

    Each vessel, vehicle, or aircraft seized pursuant to the said act of 
August 9, 1939, and the regulations in this part shall forthwith be 
placed by the seizing officer in the custody of the District Director of 
Customs for the customs district in which such seizure is made. Such 
placing in custody shall be effected by immediate notification of the 
appropriate District Director of Customs of the seizure, together with a 
statement of the facts including a description of the vessel, vehicle, 
or aircraft, and the holding by the seizing officer of such vessel, 
vehicle, or aircraft subject to the instructions of the said district 
director of customs.



Sec. 401.3  Authority of District Directors of Customs to hold in custody.

    District Directors of Customs are hereby authorized and designated 
to hold in custody awaiting appropriate disposition vessels, vehicles, 
and aircraft seized pursuant to the said act of August 9, 1939, and the 
regulations in this part.



Sec. 401.4  Duties of Bureau of Customs.

    With respect to every vessel, vehicle, and aircraft seized and 
placed in the custody of a district director of customs pursuant to the 
said act of August 9, 1939, and the regulations in this part, the 
appropriate officials of the Bureau of Customs are hereby authorized and 
designated as the officers who shall perform such administrative duties 
in connection with--
    (a) The summary and judicial forfeiture and condemnation of such 
vessel, vehicle, or aircraft;
    (b) The disposition of such vessel, vehicle, or aircraft or the 
proceeds from the sale thereof;
    (c) The remission or mitigation of the forfeiture of such vessel, 
vehicle, or aircraft; and
    (d) The compromise of claims and the award of compensation to 
informers in respect to such vessel, vehicle, or aircraft;

as may be necessary and proper by virtue of the provisions of said act 
of August 9, 1939, and by virtue of the provisions of the customs laws 
which the said act makes applicable in connection with seizures and 
forfeitures incurred or alleged to have been incurred under the said act 
and the regulations in this part. In the performance of said 
administrative duties the said appropriate officials of the Bureau of 
Customs shall be governed by the procedures established by the customs 
regulations, insofar as such procedures are applicable and not 
inconsistent with the provisions of the said act of August 9, 1939, and 
the regulations in this part. Powers of the character of those exercised 
by the Secretary of the Treasury and Commissioner of Customs is 
connection with the remission or mitigation of forfeitures under the 
customs laws and in connection with the compromise of claims and the 
award of compensation to informers under the customs laws shall be 
exercised by the Secretary of the Treasury in connection with the 
remission or mitigation of forfeitures under the said act of August 9, 
1939, and in connection with the compromise of claims and the award of

[[Page 478]]

compensation to informers under the said act.



Sec. 401.5  Disposition.

    With respect to each vessel, vehicle, and aircraft seized pursuant 
to the said act of August 9, 1939, and the regulations in this part, the 
Director of the Secret Service shall promptly notify the Administrator 
of the General Services Administration and the Commissioner of Customs 
whether the Secret Service desires to have such vessel, vehicle, or 
aircraft for its official use. When forfeiture of any vessel, vehicle, 
or aircraft has been perfected otherwise than by court decree, the 
district director holding in custody such vessel, vehicle, or aircraft 
shall:
    (a) Either return the same to the Secret Service if the Director of 
the Secret Service has requested it for the official use of the Secret 
Service
    (b) Or, if the Secret Service does not desire such vessel, vehicle, 
or aircraft for its official use, hold such vessel, vehicle, or aircraft 
subject to the instructions of the Administrator of the General Services 
Administration.

(Secs. 301-308, 49 Stat. 879-880; 40 U.S.C. 304f-304m)



PART 402--REPRODUCTION OF CANCELED UNITED STATES INTERNAL REVENUE STAMPS--Table of Contents




    Authority: Secs. 474, 492, 62 Stat. 706, 710; 18 U.S.C. 474, 492.



Sec. 402.1  Reproductions authorized.

    Authority is hereby given to make, hold, and dispose of black and 
white reproductions of canceled U.S. internal revenue stamps: Provided, 
That such reproductions are made, held and disposed of as part of and in 
connection with the making, holding, and disposition, for lawful 
purposes, of the reproductions of the documents to which such stamps are 
attached.

[33 FR 4257, Mar. 7, 1968]



  PART 403--AUTHORIZATION OF ALL BANKS, U.S. POST OFFICES, AND DISBURSING 

OFFICERS OF THE UNITED STATES AND THEIR AGENTS TO DELIVER TO THE TREASURY DEPARTMENT 
COUNTERFEIT OBLIGATIONS AND OTHER SECURITIES AND COINS OF THE UNITED STATES OR OF ANY FOREIGN GOVERNMENT--Table of Contents




    Authority: Sec. 492, 62 Stat. 710; 18 U.S.C. 492.



Sec. 403.1  Delivery of counterfeit obligations and other securities and coins authorized.

    Authority is hereby given to all banks and banking institutions of 
any nature whatsoever organized under general or special Federal or 
State statutes, to all U.S. Post Offices, and to all disbursing officers 
of the United States and their agents, to take possession of and deliver 
to the Treasury Department through the Secret Service all counterfeit 
obligations and other securities and coins of the United States or of 
any foreign government which shall be presented at their places of 
business.

[33 FR 4257, Mar. 7, 1968]



PART 405--ILLUSTRATION OF SAVINGS BONDS--Table of Contents




    Authority: Sec. 474, 62 Stat. 706; 18 U.S.C. 474.



Sec. 405.1  Illustrations authorized.

    (a) Authority is hereby given to make, hold, dispose of, and use 
illustrations of U.S. savings bonds for publicity purposes in connection 
with the campaign for the sale of such bonds.
    (b) The making of any reproduction of a U.S. savings bond in any 
manner or any form is not permitted other than as provided in this part 
or pursuant to title 18, United States Code, section 504 (18 U.S.C. 
504).

[36 FR 21338, Nov. 6, 1971]

[[Page 479]]



PART 406--SEIZURE AND FORFEITURE OF GOLD FOR VIOLATIONS OF GOLD RESERVE ACT OF 1934 AND GOLD REGULATIONS--Table of Contents




Sec.
406.1  Secret Service officers authorized to make seizures of gold.
406.2  Custody of seized gold valued not in excess of $2,500.
406.3  Forfeiture of gold valued not in excess of $2,500.
406.4  Duties of customs officers.
406.5  Forfeiture of gold valued in excess of $2,500.

    Authority: R.S. 161, as amended, sec. 4, 48 Stat. 340; 5 U.S.C. 301, 
31 U.S.C. 443.

    Source: 33 FR 4258, Mar. 7, 1968, unless otherwise noted.



Sec. 406.1  Secret Service officers authorized to make seizures of gold.

    All agents of the U.S. Secret Service, in addition to officers of 
the customs, are hereby authorized and designated to seize any gold 
which may be subject to forfeiture for violations of the Gold Reserve 
Act of 1934 (31 U.S.C. 440-445) and the Gold Regulations.



Sec. 406.2  Custody of seized gold valued not in excess of $2,500.

    Any gold, the value of which does not exceed $2,500, seized by 
officers of the Secret Service pursuant to the Gold Reserve Act of 1934 
and the Gold Regulations, if not needed as evidence or for further 
investigation by the Secret Service, shall be placed forthwith by the 
seizing officer in the custody of the district director of customs for 
the customs district in which such seizure is made. Such gold shall be 
accompanied by a report from the Secret Service showing the basis of the 
seizure and a citation to each of the statutes and sections of the Gold 
Regulations violated.



Sec. 406.3  Forfeiture of gold valued not in excess of $2,500.

    The district director of customs receiving custody of gold seized by 
the Secret Service, shall, if no petition is filed for the remission of 
mitigation of the forfeiture incurred, institute summary forfeiture 
proceedings in the judicial district in which such seizure is made under 
the appropriate provisions of the law and Customs Regulations applicable 
to the forfeiture of merchandise imported contrary to law.



Sec. 406.4  Duties of customs officers.

    The appropriate officials of the Bureau of Customs are hereby 
authorized and designated as the officers who shall perform such 
administrative duties in connection with the summary forfeiture of gold 
seized by the Secret Service, the sale or other disposition of such 
gold, and the remission or mitigation of the forfeiture of such gold, as 
may be necessary or proper by virtue of the provisions of the Gold 
Reserve Act of 1934 and the Gold Regulations, and by virtue of the 
provisions of the customs laws which the said Gold Reserve Act makes 
applicable in connection with the seizures and forfeitures incurred or 
alleged to have been incurred under the said act and regulations. In the 
performance of said administrative duties the appropriate officials of 
the Bureau of Customs shall be governed by the procedures established by 
the Customs Regulations insofar as such procedures are applicable and 
not inconsistent with the provisions of the Gold Reserve Act of 1934 and 
the Gold Regulations.



Sec. 406.5  Forfeiture of gold valued in excess of $2,500.

    When the value of the gold seized by the Secret Service exceeds 
$2,500, the seizing officer shall furnish a report, approved by the 
principal local officer, to the U.S. attorney, and shall include in such 
report a statement of all the facts and circumstances of the case, 
together with the names of the witnesses and a citation to each of the 
statutes and sections of the Gold Regulations believed to have been 
violated and on which reliance may be had for forfeiture.



PART 407--REGULATIONS GOVERNING CONDUCT IN THE TREASURY BUILDING AND THE TREASURY ANNEX--Table of Contents




Sec.
407.1  Authority.
407.2  Applicability.
407.3  Recording presence.
407.4  Preservation of property.

[[Page 480]]

407.5  Conformity with signs and directions.
407.6  Nuisances.
407.7  Gambling.
407.8  Intoxicating beverages and narcotics.
407.9  Soliciting, vending, debt collection,   and distribution of 
          handbills.
407.10  Photographs for news, advertising, or   commercial purposes.
407.11  Dogs and other animals.
407.12  Vehicular and pedestrian traffic.
407.13  Weapons and explosives.
407.14  Penalties and other law.

    Authority: 5 U.S.C. 301; FPMR Temp. Reg. D-40, 38 FR 20650; Treasury 
Dept. Order 177-25 (Revision 2), 38 FR 21947.

    Source: 33 FR 7149, May 15, 1968, unless otherwise noted.



Sec. 407.1  Authority.

    The regulations in this part governing conduct in and on the 
Treasury Building and grounds and the Treasury Annex Building and 
grounds are promulgated pursuant to the authority vested in the 
Secretary of the Treasury, including (5 U.S.C. 301), and that vested in 
him by delegation from the Administrator of General Services, 38 FR 
20650 (1973), and in accordance with the authority vested in the 
Director of the U.S. Secret Service by Treasury Department Order No. 
177-25 (Revision 2), 38 FR 21947 (1973).

[38 FR 31975, Nov. 20, 1973]



Sec. 407.2  Applicability.

    The regulations in this part apply to the building and grounds of 
the Main Treasury Building and the Treasury Annex Building located in 
Washington, DC, at 15th Street and Pennsylvania Avenue NW., and Madison 
Place and Pennsylvania Avenue NW., respectively, and to all persons 
entering in or on such property. The Main Treasury Building and grounds 
and the Treasury Annex Building and grounds shall hereafter be referred 
to in the regulations in this part as ``property''.



Sec. 407.3  Recording presence.

    Except as otherwise ordered, the property shall be closed to the 
public after normal working hours and at such other times as may be 
necessary for the orderly conduct of the business of the Treasury 
Department. The property shall also be closed to the public when, in the 
opinion of the Assistant Secretary for Administration, or his delegate, 
an emergency situation exists. Admission to the property during periods 
when the property is closed to the public will be limited to authorized 
individuals who may be required to sign the register and/or display 
identification documents when requested by Treasury guards or other 
authorized individuals.



Sec. 407.4  Preservation of property.

    No person shall, without proper authority, willfully destroy, 
damage, deface, or remove property or any part thereof, or any 
furnishings therein.



Sec. 407.5  Conformity with signs and directions.

    Persons in and on the property shall comply with the instructions of 
Treasury guards, with official signs of a prohibitory or directory 
nature, and with the directions of other authorized officials.



Sec. 407.6  Nuisances.

    The use of loud, abusive, or profane language, unwarranted 
loitering, unauthorized assembly, the creation of any hazard to persons 
or things, improper disposal of rubbish, spitting, prurient prying, the 
commission of any obscene or indecent act, or any other disorderly 
conduct on the property is prohibited. The throwing of any articles of 
any kind in, upon, or from the property and climbing upon any part 
thereof is prohibited.



Sec. 407.7  Gambling.

    Participating in games for money or other property, the operation of 
gambling devices, the conduct of a lottery or pool, the selling or 
purchasing of numbers tickets, or any other gambling, in or on the 
property is prohibited.



Sec. 407.8  Intoxicating beverages and narcotics.

    Entering or being on the property, or operating a motor vehicle 
thereon, by a person under the influence of intoxicating beverages or 
narcotic drugs is prohibited.

[[Page 481]]



Sec. 407.9  Soliciting, vending, debt collection, and distribution of handbills.

    The unauthorized soliciting of alms and contributions, the 
commercial soliciting and vending of all kinds, the display or 
distribution of commercial advertising, or the collecting of private 
debts, in or on the property is prohibited. This prohibition does not 
apply to Department of Treasury concessions or notices posted by 
authorized employees on the bulletin boards. Distribution of material 
such as pamphlets, handbills, and flyers is prohibited without prior 
approval from the Assistant Secretary for Administration, or his 
delegate.



Sec. 407.10  Photographs for news, advertising, or commercial purposes.

    Except where security regulations apply, or a Federal court order or 
rule prohibits it, photographs for news purposes may be taken in areas 
on the property to which the public customarily has access without prior 
permission. Photographs for advertising and commercial purposes may be 
taken in such areas only with the prior written permission of the 
Assistant Secretary for Administration, or his delegate.



Sec. 407.11  Dogs and other animals.

    Dogs and other animals, except seeing-eye dogs, shall not be brought 
upon the property for other than official purposes.



Sec. 407.12  Vehicular and pedestrian traffic.

    (a) Drivers of all vehicles in or on the property shall drive in a 
careful and safe manner at all times and shall comply with the signals 
and directions of Treasury guards and all posted traffic signs.
    (b) The blocking of entrances, driveways, walks, loading platforms, 
or fire hydrants in or on the property is prohibited.
    (c) Parking in or on the property is not allowed without a permit or 
specific authority. Parking without authority, parking in unauthorized 
locations, or in locations reserved for other persons, or contrary to 
the directions of Treasury guards or posted signs is prohibited.
    (d) This section may be supplemented from time to time with the 
approval of the Assistant Secretary for Administration, or his delegate, 
by the issuance and posting of specific traffic directives as may be 
required and when so issued and posted such directives shall have the 
same force and effect as if made a part hereof.



Sec. 407.13  Weapons and explosives.

    No person while on the property shall carry firearms, other 
dangerous or deadly weapons, or explosives, either openly or concealed, 
except for official purposes.



Sec. 407.14  Penalties and other law.

    Whoever shall be found guilty of violating the regulations in this 
part while on the property is subject to a fine of not more than $50 or 
imprisonment of not more than 30 days, or both (see 40 U.S.C. 318c). 
Nothing contained in these regulations shall be construed to abrogate 
any other Federal laws or regulations of the District of Columbia 
applicable to the property referred to in Sec. 407.2 and governed by the 
regulations.



PART 408--DESIGNATION OF TEMPORARY RESIDENCE OF THE PRESIDENT OR OTHER PERSON PROTECTED BY THE SECRET SERVICE AND TEMPORARY OFFICES OF THE PRESIDENT AND STAFF, 
OR OTHER PERSON PROTECTED BY THE SECRET SERVICE--RULES GOVERNING ACCESS--Table of Contents




Sec.
408.1  Authority.
408.2  Designation.
408.3  Rules governing access.

    Authority: 18 U.S.C. 1752 (84 Stat. 1891, 96 Stat. 1451).

    Source: 49 FR 28553, July 13, 1984, unless otherwise noted.



Sec. 408.1  Authority.

    The designation of the buildings and grounds in this part which 
constitute the temporary residence of the President or other person 
protected by the Secret Service and the temporary offices of the 
President and Presidential staff or of any other person protected

[[Page 482]]

by the Secret Service and the regulations governing access to such 
restricted areas where the President or any other person protected by 
the Secret Service is or will be temporarily visiting, are promulgated 
pursuant to the authority vested in the Secretary of the Treasury by 18 
U.S.C. 1752 (84 Stat. 1891, 96 Stat. 1451).



Sec. 408.2  Designation.

    (a) For the purpose of 18 U.S.C. 1752, the buildings and grounds 
which constitute temporary residence of the President are as follows:

    Santa Barbara County, California home. That certain tract land in 
the County of Santa Barbara, State of California, shown and designated 
as ``Parcel 1'' on Parcel Map No. 11697 filed January 2, 1973 in Book 
11, page 40 of Parcel Maps in the office of the County Recorder of said 
County.
    This property and the related conditions, restrictions, 
reservations, easements, rights and rights of way of record are more 
fully described in a Grant Deed recorded with the Santa Barbara County 
Recorder's Office (Book 2540, Pages 1381-1385).

    (b) For the purposes of 18 U.S.C. 1752, the buildings and grounds 
which constitute temporary residences of other persons protected by the 
Secret Service shall be that property which each designates for 
protection by the Secret Service in accord with the provisions of 
section 3 of Pub. L. 95-524 (90 Stat. 2475). To the extent that a 
further description of such property may be necessary, such description 
shall be provided by the Secret Service in the form of a verbal or 
written notice to prospective visitors at each protective site.
    (c) For purposes of 18 U.S.C. 1752, the buildings and grounds which 
constitute temporary offices of the President and Presidential staff or 
offices of other persons protected by the Secret Service shall be those 
offices outside of Washington, DC, which are either supplied to the 
individual protectee by the government by virtue of that individual's 
position/former position with the government or those offices in which 
the individual conducts/is conducting his or her business affairs. To 
the extent that a further description of such property may be necessary, 
such description shall be provided by the Secret Service in the form of 
a verbal or written notice to prospective visitors at each protective 
site.



Sec. 408.3  Rules governing access.

    (a) For the purposes of 18 U.S.C. 1752 (84 Stat. 1891, 96 Stat. 
1451), ingress or egress to or from the buildings or grounds designated 
in Sec. 408.2 and any posted, cordoned off, or otherwise restricted 
areas of a building or grounds where the President or other person 
protected by the United States Secret Service is or will be visiting is 
authorized only for the following persons:
    (1) Invitees: Persons invited by or having appointments with the 
protectee, the protectee's family, or members of the protectee's staff;
    (2) Members of the protectee's family and staff;
    (3) Military and Communications Personnel assigned to the Office of 
the President;
    (4) Federal, state, and local law enforcement personnel engaged in 
the performance of their official duties and other persons, whose 
presence is necessary to provide services or protection for the premises 
or persons therein;
    (5) Holders of grants of easement to the property, provided such 
persons or their authorized representatives show title to the grant of 
easement and obtain authorization from the United States Secret Service.
    (b) Authorized persons must possess and display identification 
documents issued by or satisfactory to the United States Secret Service.
    (c) Unauthorized entry is prohibited.
    (d) The term ``protectee'' as used in this rule includes the 
President and any other person receiving protection from the United 
States Secret Service as provided by law.



PART 409--STANDARD AND PROCEDURES UTILIZED IN ISSUING A SECURITY CLEARANCE IN CONNECTION WITH AN APPLICATION FOR A PRESS PASS TO THE WHITE HOUSE--Table of Contents




Sec.
409.1  Standard.
409.2  Procedures.

    Authority: 18 U.S.C. 3056 and 3 U.S.C. 202.

[[Page 483]]



Sec. 409.1  Standard.

    In granting or denying a request for a security clearance made in 
response to an application for a White House press pass, officials of 
the Secret Service will be guided solely by the principle of whether the 
applicant presents a potential source of physical danger to the 
President and/or the family of the President so serious as to justify 
his or her exclusion from White House press privileges.

[43 FR 26718, June 22, 1978]



Sec. 409.2  Procedures.

    (a) If the Special Agent in Charge of the Secret Service, Technical 
Security Division, in applying the standard set forth in Sec. 409.1, 
anticipates that a denial of the security clearance should be issued, 
the applicant will be notified in writing, by that official, of the 
basis for the proposed denial in as much detail as the security of any 
confidential source of information will permit. This notification will 
be sent by registered mail.
    (b) The notification of the proposed denial sent to the applicant 
will also contain a statement advising the applicant of his right to 
respond to the proposed denial and to rebut any factual basis supporting 
the proposed denial by contacting the Assistant Director--Protective 
Operations, United States Secret Service, 1800 ``G'' Street, NW., 
Washington, DC 20223.
    (c) The applicant shall be allowed thirty days from the date of the 
mailing of the proposed denial notification to respond in writing. The 
response shall consist of any explanation or rebuttal deemed appropriate 
by the applicant and will be signed by the applicant under oath or 
affirmation.
    (d) If the applicant is unable to prepare a response within thirty 
days, an extension for one additional thirty day period will be granted 
upon receipt of the applicant's written request for such an extension.
    (e) At the time of the filing of the applicant's written response to 
the notification of the proposed denial the applicant may request, and 
will be granted, the opportunity to make a personal appearance before 
the Assistant Director--Protective Operations of the Secret Service for 
the purpose of personally supporting his eligibility for a security 
clearance and to rebut or explain the factual basis for the proposed 
denial. This official shall exercise final review authority in the 
matter. The applicant may be represented by counsel during this 
appearance.
    (f)(1) On the basis of the applicant's written and personal response 
and the factual basis for the proposed denial, the Assistant Director--
Protective Operations of the Secret Service will determine whether or 
not further inquiry or investigation concerning the issues raised, is 
necessary.
    (2) If a decision is made that no such inquiry is necessary a final 
decision will be issued in conformity with paragraph (g) of this 
section.
    (3) If a decision is made that such further inquiry is necessary the 
Assistant Director--Protective Operations of the Secret Service, will 
conduct such further inquiry as that official deems appropriate. At the 
official's discretion, the inquiry may consist of:
    (i) The securing of documentary evidence;
    (ii) Personal interviews;
    (iii) An informal hearing;
    (iv) Any combination of paragraphs (f)(3)(i) through (iii) of this 
section.
    (g) On the basis of the applicant's written and personal response, 
the factual basis for the proposed denial and the additional inquiry 
provided for, if such inquiry is conducted, a final decision will be 
expeditiously made by the Assistant Director--Protective Operations of 
the United States Secret Service in accordance with the standard set 
forth in Sec. 409.1. If a final adverse decision is reached, the 
applicant will be notified of this final decision in writing. This 
notification will set forth, as precisely as possible and to the extent 
that security considerations permit, the factual basis for the denial in 
relation to the standard set forth in Sec. 409.1. This notification will 
be sent by registered mail and will be signed by the Assistant Director-
-Protective Operations of the Secret Service.

[43 FR 26718, June 22, 1978]

[[Page 484]]



PART 411--COLOR ILLUSTRATIONS OF UNITED STATES CURRENCY--Table of Contents




    Authority: 18 U.S.C. 504; Treasury Directive Number 15-56, 58 FR 
48539 (September 16, 1993)

    Source: 61 FR 27281, May 31, 1996, unless otherwise noted.



Sec. 411.1  Color illustrations authorized.

    (a) Notwithstanding any provision of chapter 25 of Title 18 of the 
U.S. Code, authority is hereby given for the printing, publishing or 
importation, or the making or importation of the necessary plates or 
items for such printing or publishing, of color illustrations of U.S. 
currency provided that:
    (1) The illustration be of a size less than three-fourths or more 
than one and one-half, in linear dimension, of each part of any matter 
so illustrated;
    (2) The illustration be one-sided; and
    (3) All negatives, plates, positives, digitized storage medium, 
graphic files, magnetic medium, optical storage devices, and any other 
thing used in the making of the illustration that contain an image of 
the illustration or any part thereof shall be destroyed and/or deleted 
or erased after their final use in accordance with this section.
    (b) [Reserved]



PART 413--CLOSURE OF STREETS NEAR THE WHITE HOUSE--Table of Contents




Sec.
413.1  Closure of streets.
413.2  Coordination with other authorities.

    Authority: 31 U.S.C. 321, 18 U.S.C. 3056, 3 U.S.C. 202, Treasury 
Order 170-09.

    Source: 60 FR 27885, May 26, 1995, unless otherwise noted.



Sec. 413.1  Closure of streets.

    (a) District of Columbia. The following streets in the District of 
Columbia are closed to public vehicular traffic:
    (1) The segment of Pennsylvania Avenue, Northwest, situated between 
Madison Place, Northwest, and Seventeenth Street, Northwest;
    (2) The 1600 block of State Place, Northwest, situated between 
Seventeenth Street, Northwest, and the White House Complex; and
    (3) The segment of South Executive Avenue that connects to the 1600 
block of State Place, Northwest.
    (b) Authorized access. The streets described in paragraph (a) shall 
remain open to public pedestrian use, official use of the United States, 
and authorized vehicular access for ingress and egress to the White 
House Complex and adjacent Federal Buildings.



Sec. 413.2  Coordination with other authorities.

    Nothing in Sec. 413.1 shall be in derogation of any authority 
conferred upon the Secretary of the Interior, the Secretary of the 
Treasury or the Director, United States Secret Service.

[[Page 485]]



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




  --------------------------------------------------------------------
Part                                                                Page
500             Foreign assets control regulations..........         487
501             Reporting and procedures regulations........         540
505             Regulations prohibiting transactions 
                    involving the shipment of certain 
                    merchandise between foreign countries...         548
515             Cuban assets control regulations............         550
535             Iranian assets control regulations..........         611
536             Narcotics trafficking sanctions regulations.         635
537             Burmese sanctions regulations...............         647
538             Sudanese sanctions regulations..............         656
539             Weapons of mass destruction trade control 
                    regulations.............................         678
540             Highly enriched uranium (HEU) agreement 
                    assets control regulations..............         686
545             Tabilan (Afghanistan) sanctions regulations.         696
550             Libyan sanctions regulations................         716
560             Iranian transactions regulations............         741
575             Iraqi sanctions regulations.................         772
585             Federal Republic of Yugoslavia (Serbia and 
                    Montenegro) and Bosnian Serb-controlled 
                    areas of the Republic of Bosnia and 
                    Herzegovina sanctions regulations.......         794
586             Federal Republic of Yugoslavia (Serbia & 
                    Montenegro) Kosovo sanctions regulations         820
587             Federal Republic of Yugoslavia (Serbia and 
                    Montenegro) Milosevic sanctions 
                    regulations.............................         838
588             Western Balkans stabilization regulations...         851
590             Angola (UNITA) sanctions regulations........         864
591             Rough diamonds (Sierra Leone & Liberia) 
                    sanctions regulations...................         881
595             Terrorism sanctions regulations.............         889
596             Terrorism List Governments sanctions 
                    regulations.............................         899
597             Foreign terrorist organizations sanctions 
                    regulations.............................         904
598             Foreign narcotics kingpin sanctions 
                    regulations.............................         914

[[Page 486]]

Appendix A to Chapter V--Alphabetical Listing of Blocked 
  Persons, Specially Designated Nationals, Specially 
  Designated Terrorists, Foreign Terrorist Organizations, 
  and Specially Designated Narcotics Traffickers............         927
Appendix B to Chapter V--Alphabetical Listing of Vessels 
  That Are the Property of Blocked Persons or Specially 
  Designated Nationals......................................        1008

[[Page 487]]



PART 500--FOREIGN ASSETS CONTROL REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

500.201  Transactions involving designated foreign countries or their 
          nationals; effective date.
500.202  Transactions with respect to securities registered or inscribed 
          in the name of a designated national.
500.203  Effect of transfers violating the provisions of this chapter.
500.204  Importation of and dealings in certain merchandise.
500.205  Holding of certain types of blocked property in interest-
          bearing accounts.
500.206  Exemption of information and informational materials.

                     Subpart C--General Definitions

500.301  Foreign country.
500.302  National.
500.303  Nationals of more than one foreign country.
500.305  Designated national.
500.306  Specially designated national.
500.307  Unblocked national.
500.308  Person.
500.309  Transactions.
500.310  Transfer.
500.311  Property; property interests.
500.312  Interest.
500.313  Property subject to the jurisdiction of the United States.
500.314  Banking institution.
500.316  License.
500.317  General license.
500.318  Specific license.
500.319  Blocked account.
500.320  Domestic bank.
500.321  United States; continental United States.
500.322  Authorized trade territory; member of the authorized trade 
          territory.
500.323  Occupied area.
500.325  National securities exchange.
500.326  Custody of safe deposit boxes.
500.327  Blocked estate of a decedent.
500.328  Status of those portions of Korea under control of the 
          government of the Republic of Korea; and of the diplomatic and 
          consular representatives of those countries.
500.329  Person subject to the jurisdiction of the United States.
500.330  Person within the United States.
500.331  Merchandise.
500.332  Information and informational materials.

                       Subpart D--Interpretations

500.401  Reference to amended sections.
500.402  Effect of amendment of sections of this chapter or of other 
          orders, etc.
500.403  Termination and acquisition of the interest of a designated 
          national.
500.404  Transactions between principal and agent.
500.405  Exportation of securities, etc. to designated foreign 
          countries.
500.406  Drafts under irrevocable letters of credit; documentary drafts.
500.407  Administration of blocked estates of decedents.
500.408  Access to certain safe deposit boxes prohibited.
500.409  Certain payments to designated foreign countries and nationals 
          through third countries.
500.410  Currency, coins, and postage and other stamps.
500.411  Dealings abroad in commodities subject to the Regulations.
500.412  Process vs. manufacture.
500.413  Participation in certain development projects in Vietnam.

 Subpart E--Licenses, Authorizations and Statements of Licensing Policy

500.502  Effect of subsequent license or authorization.
500.503  Exclusion from licenses and authorizations.
500.504  Certain judicial proceedings with respect to property of 
          designated nationals.
500.505  Certain persons unblocked.
500.506-500.507  [Reserved]
500.508  Payments to blocked accounts in domestic banks.
500.509  Entries in certain accounts for normal service charges.
500.510  Payments to the United States, States and political 
          subdivisions.
500.511  Transactions by certain business enterprises.
500.513  Purchase and sale of certain securities.
500.514  Payment of dividends and interest on and redemption and 
          collection of securities.
500.515  Transfers of securities to blocked accounts in domestic banks.
500.516  Voting and soliciting of proxies on securities.
500.517  Access to safe deposit boxes under certain conditions.
500.518  Payments for living, traveling, and similar personal expenses 
          in the United States.
500.519  Limited payments from accounts of United States citizens 
          abroad.

[[Page 488]]

500.520  Payments from accounts of United States citizens in employ of 
          United States in foreign countries and certain other persons.
500.521  Certain remittances for necessary living expenses.
500.522  Certain remittances to United States citizens in foreign 
          countries.
500.523  Transactions incident to the administration of decedents' 
          estates.
500.524  Payment from, and transactions in the administration of certain 
          trusts and estates.
500.525  Certain transfers by operation of law.
500.526  Transactions involving blocked life insurance policies.
500.527  Certain transactions with respect to United States patents, 
          trademarks, and copyrights.
500.528  Certain transactions with respect to blocked foreign patents, 
          trademarks and copyrights authorized.
500.529  Powers of attorney.
500.530  Exportation of powers of attorney or instructions relating to 
          certain types of transactions.
500.533  Exportations, reexportations, and incidental transactions.
500.535  Exchange of certain securities.
500.536  Certain transactions with respect to merchandise affected by 
          Sec. 500.204.
500.549  Proof of origin.
500.550  Transactions related to information and informational 
          materials.
500.551  Reimports.
500.552  Research samples.
500.553  Prior contractual commitments not a basis for licensing.
500.554  Gifts of North Korean, North Vietnamese, Cambodian, or South 
          Vietnamese origin.
500.556  Joint bank accounts.
500.557  Proceeds of insurance policies.
500.558  Accounts of blocked partnerships.
500.559  Accounts of North Korean, North Vietnamese, Cambodian or South 
          Vietnamese sole proprietorships.
500.560  Bank accounts of official representatives of foreign 
          governments in North Korea, North Viet-Nam, Cambodia, or South 
          Viet-Nam.
500.561  Transfers of abandoned property under State laws.
500.562  [Reserved]
500.563  Transactions incident to travel to and within North Korea.
500.564  [Reserved]
500.565  Family remittances to nationals of Vietnam and Cambodia.
500.566  Certain transactions authorized on behalf of North Korean 
          nationals incident to their travel and maintenance expenses.
500.567  U.S. assets of certain designated country corporations.
500.568  U.S. assets of blocked decedents.
500.569  [Reserved]
500.570  Cambodian property unblocked.
500.571  Transactions related to telecommunications authorized.
500.572  Humanitarian projects authorized.
500.573  Certain donations of funds and goods to meet basic human needs 
          authorized.
500.574  Executory contracts and related transactions authorized.
500.575  Certain services to Vietnamese nationals authorized.
500.576  Authorization of transactions concerning certain development 
          projects in Vietnam.
500.577  Authorization of bank transactions with respect to Vietnam by 
          certain international organizations.
500.578  Vietnamese property unblocked.
500.579  Authorization for release of certain blocked transfers by 
          banking institutions subject to U.S. jurisdiction.
500.580  Authorization of U.S. dollar clearing transactions involving 
          North Korea.
500.581  Financial transactions related to diplomatic missions 
          authorized.
500.582  Importation of North Korean-origin magnesite and magnesia.
500.583  News organization offices.
500.584  Energy sector projects in North Korea.
500.585  Payments for services rendered by North Korea to United States 
          aircraft authorized.
500.586  Authorization of new transactions concerning certain North 
          Korean property.

                           Subpart F--Reports

500.601  Records and reports.
500.602  Reporting of claims of U.S. nationals against North Korea.

                          Subpart G--Penalties

500.701  Penalties.
500.702  Prepenalty notice; contents; respondent's rights; service.
500.703  Response to prepenalty notice; requests for hearing and 
          prehearing discovery; waiver; informal settlement.
500.704  Penalty imposition or withdrawal absent a hearing request.
500.705  Time and opportunity to request a hearing.
500.706  Hearing.
500.707  Interlocutory appeal.
500.708  Settlement during hearing proceedings.
500.709  Motions.
500.710  Discovery.
500.711  Summary disposition.
500.712  Prehearing conferences and submissions.
500.713  Public hearings.
500.714  Conduct of hearings.
500.715  Evidence.

[[Page 489]]

500.716  Proposed decisions; recommended decision of Administrative Law 
          Judge; final decision.
500.717  Judicial review.
500.718  Referral to United States Department of Justice; administrative 
          collection measures.

                          Subpart H--Procedures

500.801  Procedures.
500.802  Delegation by the Secretary of the Treasury.
500.803  Customs procedures; merchandise specified in Sec. 500.204.

                   Subpart I--Miscellaneous Provisions

500.901  Paperwork Reduction Act notice.

Appendix A to Part 500--Qualifying International Institutions

    Authority: 18 U.S.C. 2332d; 31 U.S.C. 321(b); 50 U.S.C. App. 1-44; 
Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 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.

    Source: 15 FR 9040, Dec. 19, 1950, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 500.101  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 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 27436, July 3, 1985, as amended at 62 FR 45101, Aug. 25, 1997]



                         Subpart B--Prohibitions



Sec. 500.201  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 
any designated foreign country, or any national thereof, or such 
transactions involve property in which any designated foreign country, 
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 designated foreign country, 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

[[Page 490]]

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) The term ``designated foreign country'' means a foreign country 
in the following schedule, and the terms ``effective date'' and 
``effective date of this section'' mean with respect to any designated 
foreign country, or any national thereof, 12:01 a.m. eastern standard 
time of the date specified in the following schedule, except as 
specifically noted after the country or area.

                                Schedule

    (1) North Korea, i.e., Korea north of the 38th parallel of north 
latitude: December 17, 1950.
    (2) Cambodia: April 17, 1975.
    (3) North Vietnam; i.e., Vietnam north of the 17th parallel of north 
latitude: May 5, 1964.
    (4) South Vietnam, i.e., Vietnam south of the 17th parallel of north 
latitude: April 30, 1975, at 12:00 p.m. e.d.t.

    (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.

[15 FR 9040, Dec. 19, 1950, as amended at 18 FR 2079, Apr. 14, 1953; 50 
FR 27436, July 3, 1985; 62 FR 45101, Aug. 25, 1997]



Sec. 500.202  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 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. 500.203  Effect of transfers violating the provisions of this chapter.

    (a) Any transfer after the ``effective date'' which is in violation 
of any provision of this chapter 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 chapter and any 
ruling, order, regulation, direction or instruction issued thereunder.
    (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,

[[Page 491]]

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 chapter 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 chapter 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 chapter 
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, DC 20220, 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. 500.504 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.
    (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) 
(48 Stat. 74; 15 U.S.C. 77(b)), 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.

[15 FR 9040, Dec. 19, 1950, as amended at 41 FR 16553, Apr. 20, 1976]



Sec. 500.204  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, or rulings, instructions, licenses, or 
otherwise, persons subject to the jurisdiction of the United States may 
not purchase, transport, import, or otherwise deal in or engage in any 
transaction with respect to any merchandise outside the United States 
specified in following paragraph (a)(1) of this section.
    (1) Merchandise the country of origin of which is North Korea, North 
Viet-Nam, Cambodia, or South Viet-Nam. Articles which are the growth, 
produce or manufacture of these areas shall be deemed for the purposes 
of this chapter to be merchandise whose country of origin is North 
Korea, North Viet-Nam, Cambodia, or South Viet-Nam, notwithstanding that 
they may have been subjected to one or any combination of the following 
processes in another country:
    (i) Grading;
    (ii) Testing;
    (iii) Checking;
    (iv) Shredding;
    (v) Slicing;
    (vi) Peeling or splitting;
    (vii) Scraping;
    (viii) Cleaning;
    (ix) Washing;
    (x) Soaking;
    (xi) Drying;
    (xii) Cooling, chilling or refrigerating;
    (xiii) Roasting;
    (xiv) Steaming;

[[Page 492]]

    (xv) Cooking;
    (xvi) Curing;
    (xvii) Combining of fur skins into plates;
    (xviii) Blending;
    (xix) Flavoring;
    (xx) Preserving;
    (xxi) Pickling;
    (xxii) Smoking;
    (xxiii) Dressing;
    (xxiv) Salting;
    (xxv) Dyeing;
    (xxvi) Bleaching;
    (xxvii) Tanning;
    (xxviii) Packing;
    (xxix) Canning;
    (xxx) Labeling;
    (xxxi) Carding;
    (xxxii) Combing;
    (xxxiii) Pressing;
    (xxxiv) Any process similar to any of the foregoing.

Any article wheresoever manufactured shall be deemed for the purposes of 
this chapter to be merchandise whose country of origin is North Korea, 
North Viet-Nam, Cambodia, or South Viet-Nam, if there shall have been 
added to such articles any embroidery, needle point, petit point, lace 
or any other article of adornment which is the product of North Korea, 
North Viet-Nam, Cambodia, or South Viet-Nam, notwithstanding that such 
addition to the merchandise may have occurred in a country other than 
North Korea, North Viet-Nam, Cambodia, or South Viet-Nam.

[40 FR 19202, May 2, 1975, as amended at 41 FR 16553, Apr. 20, 1976; 45 
FR 7224, Jan. 31, 1980]



Sec. 500.205  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. 500.201 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,

[[Page 493]]

held by a person claiming a set-off against such property, is exempt 
from the provisions of paragraphs (a), (b) 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. 500.513. 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. 500.561 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. 500.201;
    (2) Any property subject to the provisions of Sec. 500.201 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 11766, Mar. 2, 1979]



Sec. 500.206  Exemption of information and informational materials.

    (a) The importation from any country and the exportation to any 
country of information or informational materials as defined in 
Sec. 500.332, whether commercial or otherwise, regardless of format or 
medium of transmission, are exempt from the prohibitions and regulations 
of this part.
    (b) All transactions of common carriers incident to the importation 
or exportation of information or informational materials, including 
mail, between the United States and any foreign country designated under 
Sec. 500.201, are exempt from the prohibitions and regulations of this 
part.
    (c) 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

[[Page 494]]

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 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 or 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.
    (d) This section does not authorize transactions incident to the 
exportation of restricted technical data as defined in section 799 of 
the Export Administration Regulations, 15 CFR parts 768-799, 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. 500.201 of this part and Sec. 785.1 of the Export 
Administration Regulations.

    Example #1: A U.S. publisher ships 500 copies of a book to Vietnam 
directly from San Francisco aboard a chartered aircraft, and receives 
payment by means of a letter of credit issued by a Vietnamese bank and 
confirmed by an American bank. These are permissible transactions under 
this section.
    Example #2: A Vietnamese party exports a single master copy of a 
Vietnamese motion picture to a U.S. party and licenses the U.S. party to 
duplicate, distribute, show and exploit in the United States the 
Vietnamese film in any medium, including home video distribution, for 
five years, with the Vietnamese party receiving 40% of the net income. 
All transactions relating to the activities described in this example 
are authorized under this section or Sec. 500.550.
    Example #3: A U.S. recording company proposes to contract with a 
Vietnamese musician to create certain musical compositions, and to 
advance royalties of $10,000 to the musician. The music written in 
Vietnam is to be recorded in a studio that the recording company owns in 
the Bahamas. These are all prohibited transactions. The U.S. party is 
prohibited under Sec. 500.201 from contracting for the Vietnamese 
musician's services, from transferring $10,000 to Vietnam to pay for 
those services, and from providing the Vietnamese with production 
services through the use of its studio in the Bahamas. No informational 
materials are in being at the time of these proposed transactions. 
However, the U.S. recording company may contract to purchase and import 
preexisting recordings by the Vietnamese musician, or to copy the 
recordings in the United States and pay negotiated royalties to Vietnam 
under this section or Sec. 500.550.
    Example #4: A Vietnamese party enters into a subpublication 
agreement licensing a U.S. party to print and publish copies of a 
musical composition and to sub-license rights of public performance, 
adaptation, and arrangement of the musical composition, with payment to 
be a percentage of income received. All transactions related to the 
activities described in this example are authorized under this section 
and Sec. 500.550, except for adaption and arrangement, which constitute 
artistic enhancement of the Vietnamese composition. Payment to the 
Vietnamese party may not reflect income received as a result of these 
enhancements.

[54 FR 5231, Feb. 2, 1989, as amended at 60 FR 8934, Feb. 16, 1995]



                     Subpart C--General Definitions



Sec. 500.301  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 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

[[Page 495]]

forces or other authority of such foreign country.



Sec. 500.302  National.

    (a) The term national shall include:
    (1) A subject or citizen of a 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 resident or 
domiciled there in the service of the U.S. Government.
    (2) Any partnership, association, corporation, or other 
organization, organized under the laws of, or which on or since the 
``effective date'' had or has had its principal place of business in a 
foreign country, or which on or since such effective date was or has 
been controlled by, or a substantial part of the stock, shares, bonds, 
debentures, notes, drafts, or other securities or obligations of which, 
was or has been owned or controlled by, directly or indirectly, a 
foreign country and/or one or more nationals thereof as defined in this 
section.
    (3) Any person to the extent that such person is, or has been, since 
the ``effective date'' acting or purporting to act directly or 
indirectly for the benefit or on behalf of any national of a foreign 
country.
    (4) Any other person who there is reasonable cause to believe is a 
``national'' as defined in this section.
    (b) 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.

[17 FR 5343, June 12, 1952, as amended at 50 FR 27436, July 3, 1985]



Sec. 500.303  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, 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 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. 500.305  Designated national.

    The term designated national shall mean any country designated in 
Sec. 500.201 and any national thereof including any person who is a 
specially designated national.



Sec. 500.306  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,
    (2) Any person who on or since the ``effective date'' has acted for 
or on behalf of the Government or authorities exercising control over 
any 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 any designated foreign country or by any specially 
designated national.
    (b) [Reserved]

    Note to Sec. 500.306: Please refer to the appendices at the end of 
this chapter for listings of persons designated pursuant to this part. 
Section 501.807 of this chapter sets forth the procedures to be followed 
by persons seeking

[[Page 496]]

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.

[15 FR 9040, Dec. 19, 1950, as amended at 41 FR 16554, Apr. 20, 1976; 61 
FR 32938, June 26, 1996; 62 FR 45101, Aug. 25, 1997]



Sec. 500.307  Unblocked national.

    Any person licensed pursuant to Sec. 500.505 as an unblocked 
national shall, while so licensed, be regarded as a person within the 
United States who is not a national of any designated foreign country: 
Provided, however, That the licensing of any person as an ``unblocked 
national'' shall not be deemed to suspend in any way the requirements of 
any section of this chapter relating to reports, and the production of 
books, documents, records, etc.

[15 FR 9040, Dec. 19, 1950, as amended at 54 FR 5231, Feb. 2, 1989]



Sec. 500.308  Person.

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



Sec. 500.309  Transactions.

    The phrase transactions which involve property in which any 
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 any 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. 500.310  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 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. 500.311  Property; property interests.

    Except as defined in Sec. 500.203(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, any debts, indebtedness 
obligations, notes, debentures, stocks, bonds, coupons, any other 
financial securities, bankers' acceptances, mortgages, pledges, liens or 
other right 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, 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,

[[Page 497]]

real, personal, or mixed, tangible or intangible, or interest or 
interests therein, present, future, or contingent.

[15 FR 9040, Dec. 19, 1950, as amended at 55 FR 31179, Aug. 1, 1990]



Sec. 500.312  Interest.

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



Sec. 500.313  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 within 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 certificate evidencing such 
property or interest is physically located within the United States.



Sec. 500.314  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 purchasers 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. 500.316  License.

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

[28 FR 6973, July 9, 1963]



Sec. 500.317  General license.

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



Sec. 500.318  Specific license.

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



Sec. 500.319  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 of 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.



Sec. 500.320  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 any 
designated foreign country: 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 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 chapter.



Sec. 500.321  United States; continental United States.

    The term United States means the United States and all areas under 
the jurisdiction or authority thereof, including U.S. trust territories 
and commonwealths. The term continental United States means the states 
of the

[[Page 498]]

United States and the District of Columbia.

[50 FR 27436, July 3, 1985]



Sec. 500.322  Authorized trade territory; member of the authorized trade territory.

    (a) The term authorized trade territory shall include:
    (1) North, South and Central America, including the Caribbean 
region, except Cuba;
    (2) Africa;
    (3) Australia and Oceania, including Indonesia, New Zealand, and the 
Philippines;
    (4) Andorra, Austria, Belgium, Cyprus, Denmark, Ireland, the Federal 
Republic of Germany and the Western Sector of Berlin, Finland, France 
(including Monaco), Greece, Iceland, Italy, Liechtenstein, Luxembourg, 
Malta, the Netherlands, Norway, Portugal, San Marino, Spain, Sweden, 
Switzerland, Turkey, the United Kingdom, Vatican City, and Yugoslavia.
    (5) Afghanistan, Bangladesh, Bhutan, Burma, Hong Kong, India, Iran, 
Iraq, Israel, Japan, Jordan, Kuwait, Laos, Lebanon, Macao, Malaysia, 
Nepal, Oman, Pakistan, Qatar, Saudi Arabia, Singapore, South Korea, Sri 
Lanka (Ceylon), Syrian Arab Republic, Taiwan, Thailand, United Arab 
Emirates, and Yemen.
    (6) Any colony, territory, possession, or protectorate of any 
country included within this paragraph; but the term shall 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.

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

[40 FR 19202, May 2, 1975, as amended at 41 FR 16554, Apr. 20, 1976; 42 
FR 27199, May 27, 1977; 54 FR 5231, Feb. 2, 1989]



Sec. 500.323  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 June 25, 1950.



Sec. 500.325  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. 500.326  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. 500.327  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. 500.328  Status of those portions of Korea under control of the government of the Republic of Korea; and of the diplomatic and consular representatives of 
          those countries.

    (a) Those portions of Korea which are under the control of the 
government of the Republic of Korea are not included within the term 
designated foreign country.
    (b) The diplomatic and consular representatives of the Republic of 
Korea are not deemed to be acting or purporting to act directly or 
indirectly for the benefit or on the behalf of any designated foreign 
country.

[41 FR 16554, Apr. 20, 1976, as amended at 45 FR 7224, Jan. 31, 1980]



Sec. 500.329  Person subject to the jurisdiction of the United States.

    The term, person subject to the jurisdiction of the United States, 
includes:
    (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. 500.330;

[[Page 499]]

    (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 corporation, partnership, or association, wherever organized 
or doing business, that is owned or controlled by persons specified in 
paragraph (a) or (c) of this section.

[50 FR 27436, July 3, 1985]



Sec. 500.330  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;
    (3) Any corporation organized under the laws of the United States or 
of any state, territory, possession, or district of the United States; 
and
    (4) Any partnership, association, corporation, or other 
organization, wheresoever organized or doing business, which is owned or 
controlled by any person or persons specified in paragraph (a) (1), (2), 
or (3) of this section.
    (b) [Reserved]

[20 FR 1379, Mar. 8, 1955]



Sec. 500.331  Merchandise.

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

[24 FR 1984, Mar. 18, 1959]



Sec. 500.332  Information and informational materials.

    (a) For purposes of this part, the term informational materials 
includes, without limitation:
    (1) Publications, films, posters, phonograph records, photographs, 
microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and 
news wire feeds.
    (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 would be 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, 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 8934, Feb. 16, 1995]



                       Subpart D--Interpretations



Sec. 500.401  Reference to amended sections.

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



Sec. 500.402  Effect of amendment of sections of this chapter or of other orders, etc.

    Any amendment, modification, or revocation of any section of this 
chapter 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, 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. 500.403  Termination and acquisition of the interest of a designated national.

    (a) Except as provided in Sec. 500.525, whenever a transaction 
licensed or authorized by or pursuant to this chapter results in the 
transfer of property (including any property interest) away

[[Page 500]]

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 chapter, if 
property (including any property interest) is transferred to a 
designated national such property shall be deemed to be property in 
which there exists the interest of a designated national.



Sec. 500.404  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. 500.201 
to the same extent as if the parties to the transaction were in no way 
affiliated or associated with each other.



Sec. 500.405  Exportation of securities, etc. to designated foreign countries.

    Section 500.201 prohibits the exportation of securities, currency, 
checks, drafts and promissory notes to designated foreign countries.



Sec. 500.406  Drafts under irrevocable letters of credit; documentary drafts.

    Section 500.201 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. 500.407  Administration of blocked estates of decedents.

    Section 500.201 prohibits all 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. 500.523 
which authorizes certain transactions in connection with the 
administration of blocked estates of decedents and Sec. 500.568 which 
authorizes the unblocking by specific license of estate assets to 
certain heirs under certain circumstances.

[15 FR 9040, Dec. 19, 1950, as amended at 54 FR 5231, Feb. 2, 1989]



Sec. 500.408  Access to certain safe deposit boxes prohibited.

    Section 500.201 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. 500.517 which authorizes access to such safe deposit boxes under 
certain conditions.



Sec. 500.409  Certain payments to designated foreign countries and nationals through third countries.

    Section 500.201 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.

[18 FR 2080, Apr. 14, 1953]



Sec. 500.410  Currency, coins, and postage and other stamps.

    Currency, coins, and postage and other stamps issued by North Korea, 
North Viet-Nam, Cambodia, or South Viet-Nam are merchandise of North 
Korean, North Vietnamese, Cambodian, or South Vietnamese origin subject 
to Sec. 500.204(a)(1).

[41 FR 16554, Apr. 20, 1976]

[[Page 501]]



Sec. 500.411  Dealings abroad in commodities subject to the Regulations.

    Section 500.204 prohibits the unlicensed importation into the United 
States of commodities of North Korean, North Vietnamese, Cambodian, or 
South Vietnamese origin. It also prohibits, unless licensed, persons 
subject to the jurisdiction of the United States from purchasing, 
transporting or otherwise dealing with such commodities which are 
outside the United States.

[41 FR 16554, Apr. 20, 1976]



Sec. 500.412  Process vs. manufacture.

    A commodity subject to Sec. 500.204 remains subject howsoever it has 
been processed. It should not be assumed that a commodity which has 
undergone operations other than those listed in Sec. 500.204(a)(1), has 
become a manufactured form of the commodity rather than a processed form 
thereof. In case of question, a ruling should be requested from the 
Office of Foreign Assets Control. Requests for rulings in the form of 
license applications or otherwise should include adequate technical 
detail. It should be noted that it is quite possible for merchandise to 
have North Korea, North Viet-Nam, Cambodia, or South Viet-Nam as its 
``country of origin'' for Foreign Assets Control purposes while having 
some other country as its ``country of origin'' for marking or 
statistical purposes.

[41 FR 16554, Apr. 20, 1976]



Sec. 500.413  Participation in certain development projects in Vietnam.

    The following examples illustrate the scope of the authorization in 
Sec. 500.576 for dealings in property in which Vietnam or a Vietnamese 
national has an interest with respect to development projects in Vietnam 
formally proposed or approved for execution, funding or sponsorship by a 
qualified international institution listed in appendix A to this part 
(``Qualified Projects'').

    Example # 1: The Government of Vietnam (``Vietnam'') approaches a 
U.S. financial consulting firm (the ``U.S. Consulting Firm'') for advice 
on building cement plants in Hanoi and Ho Chi Minh City. The project 
might be eligible for funding by the Asian Development Bank (the 
``ADB''), and Vietnam wants the U.S. Consulting Firm's assistance in 
conducting a feasibility study for submission to the ADB. Since the 
project has not yet been formally proposed or approved for funding by 
the ADB, no involvement of the U.S. Consulting Firm is authorized 
pursuant to Sec. 500.576. However, had the ADB formally proposed the 
project in its monthly ADB Business Opportunities as a project being 
considered for funding, or had it funded the feasibility study, 
Sec. 500.576 would authorize the U.S. Consulting Firm's transactions.
    Example # 2: Upon ADB approval of funding for the cement plant 
project, a U.S. company (the ``U.S. Company'') forms a joint venture 
with a Vietnamese company to bid on construction of the cement plants in 
Hanoi and Ho Chi Minh City. The joint venture's bid is successful, and 
it purchases construction equipment from the United States, financed by 
a U.S. bank and insured by a U.S. company. Several items are sourced 
from the United States during construction, including cement equipment, 
which is covered by a ten-year service and maintenance agreement. The 
joint venture agreement calls for the continued management and operation 
of the plants by the U.S. Company after completion, and for the 
insurance of the plants by a U.S. insurance company. Each of these 
transactions with respect to the Qualified Project is authorized by 
Sec. 500.576.
    Example # 3: The International Finance Corporation (``IFC'') offers 
equity investment in a Vietnamese company to finance environmental 
safeguards for drilling operations in offshore oil fields. Various U.S. 
investors, including venture capital companies, brokerage firms, and 
investment banks contribute capital and receive shares in the Vietnamese 
company. This equity investment in a Qualified Project is authorized by 
Sec. 500.576. The U.S. companies purchasing these shares as part of the 
IFC-sponsored development project may hold or resell them, including 
resale to other persons subject to U.S. jurisdiction. Shares acquired by 
entities not subject to U.S. jurisdiction may not then be purchased or 
repurchased by a person subject to U.S. jurisdiction.
    Example # 4: (a) An Indonesian company (the ``Contractor'') is a 
successful bidder on a Qualified Project, and hires a U.S. law firm to 
represent it in contract negotiations with Vietnam to build a fish 
processing and canning facility in Vietnam funded by the World Bank. The 
law firm may represent the Contractor throughout the course of the 
project pursuant to Sec. 500.576, once the project has been formally 
proposed or approved for funding by the World Bank.

    (b) Once the Qualified Project is underway, the Contractor purchases 
equipment manufactured in France by a French company. The long-term 
servicing of the equipment, however, will

[[Page 502]]

be provided by the French company's U.S. subsidiary. The service 
transactions are authorized pursuant to Sec. 500.576.
    (c) After the processing facility is completed, Vietnam hires a U.S. 
marketing firm to develop marketing strategies for the product 
worldwide. It further asks the marketing firm to execute the strategies 
it devises and to represent the product in South-East Asia, including 
the domestic market in Vietnam. The marketing firm in turn would hire 
the brokerage services of a U.S. citizen domiciled in Thailand for the 
sale of the product to that country. These transactions are outside the 
scope of Sec. 500.576, and violate Sec. 500.201, because they are not 
directly incident to the Qualified Project funded by the World Bank.

[58 FR 68530, Dec. 28, 1993]



 Subpart E--Licenses, Authorizations and Statements of Licensing Policy



Sec. 500.502  Effect of subsequent license or authorization.

    No license or other authorization contained in this chapter 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, shall be deemed to authorize or validate any 
transaction effected prior to the issuance thereof, unless such license 
or other authorization specifically so provides.



Sec. 500.503  Exclusion from licenses and authorizations.

    The Secretary of the Treasury reserves the right to exclude from the 
operation of any license or from the privilege 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. 500.504  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 503]]

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



Sec. 500.505  Certain persons unblocked.

    (a) The following persons are hereby licensed as unblocked 
nationals:
    (1) Any person resident in, or organized under the laws of a 
jurisdiction in, the United States or the authorized trade territory who 
or which has never been a designated national;
    (2) Any individual resident in the United States who is not a 
specially designated national; and
    (3) Any corporation, partnership or association that would be a 
designated national solely because of the interest therein of an 
individual licensed in paragraph (a) or (b) of this section as an 
unblocked national.
    (b) Individual nationals of a designated country who take up 
residence in the authorized trade territory may apply to the Office of 
Foreign Assets Control to be specifically licensed as unblocked 
nationals.
    (c) The licensing of any person as an unblocked national shall not 
suspend the requirements of any section of this chapter relating to the 
maintenance or production of records.

[50 FR 27436, July 3, 1985, as amended at 54 FR 5232, Feb. 2, 1989]



Secs. 500.506-500.507  [Reserved]



Sec. 500.508  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 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 are held.
    (e) This section does not authorize any payment or transfer from a 
blocked account in a domestic bank to a blocked account in another 
domestic bank held under any name or designation which differs from the 
name or designation of the specific blocked account or sub-account from 
which the payment or transfer is made.
    Note to Sec. 500.508: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers.

[40 FR 7649, Feb. 21, 1975, as amended at 58 FR 47644, Sept. 10, 1993; 
62 FR 45101, Aug. 25, 1997]



Sec. 500.509  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 any 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

[[Page 504]]

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



Sec. 500.511  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 any 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 any 
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 chapter, 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. 500.513  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 any 
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 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 of 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

[[Page 505]]

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. 500.514  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. Not withstanding Sec. 500.202, 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 any 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 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. 500.515  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 sub- account in which 
such securities were held.

[32 FR 10846, July 25, 1967]



Sec. 500.516  Voting and soliciting of proxies on securities.

    Notwithstanding Sec. 500.202, 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. 500.517  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:

[[Page 506]]

    (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.
    (c) The lessee or other person granted access to any safe deposit 
box pursuant to this section (except an agent or representative of the 
Office of Alien Property) shall furnish to the lessor a certificate in 
triplicate that he has filed or will promptly file a report with respect 
to such box, if leased to a designated national, and with respect to all 
property contained in the box to which access is had in which any 
designated national has an interest. The lessor shall transmit two 
copies of such certificate to the Treasury Department, Washington, D.C. 
The certificate is required only on the first access to the box. In case 
a report on Form TFR-603 was not made, a report is hereby required to be 
filed. All reports made pursuant to this section shall bear on their 
face or have securely attached to them a statement reading, ``this 
report is filed pursuant to 31 CFR 500.517''.

[15 FR 9040, Dec. 19, 1950, as amended at 35 FR 4045, Mar. 4, 1970]



Sec. 500.518  Payments for living, traveling, and similar personal expenses in the United States.

    (a) Payments and transfers of credit in the United States from 
blocked accounts in domestic banking institutions held in the name of an 
individual within the United States to or upon the order of such 
individual are hereby authorized provided the following terms and 
conditions are complied with:
    (1) Such payments and transfers of credit may be made only for the 
living, traveling, and similar personal expenses in the United States of 
such individual or his family; and
    (2) The total of all such payments and transfers of credit made 
under this section from the accounts of such individual may not exceed 
$250 in any one calendar month.
    (b) This section does not authorize any payment or transfer from an 
account in which a specially designated national has an interest.

[28 FR 6973, July 9, 1963]



Sec. 500.519  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 citizen of the United States who is 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 of, 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 any 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 any designated foreign country.



Sec. 500.520  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

[[Page 507]]

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.



Sec. 500.521  Certain remittances for necessary living expenses.

    (a) Remittances by any person to any individual who is a resident of 
a foreign country and is within that foreign country are hereby 
authorized on the following terms and conditions:
    (1) Such remittances are made only for the necessary living expenses 
of the payee and his household and do not exceed $100 in any one 
calendar month to any one household;
    (2) Such remittances are not made from a blocked account other than 
from an account in a banking institution within the United States in the 
name of, or in which the beneficial interest is held by, the payee or 
members of his household;
    (3) Such remittances are not made from a blocked account which is 
blocked pursuant to Executive order 8389, as amended;
    (4) If the payee is within any designated foreign country, such 
remittances must be made through a domestic bank and any domestic bank 
is authorized to effect such remittances which, however, may be effected 
only by the payment of the dollar amount of the remittance to a domestic 
bank for credit to a blocked account in the name of a banking 
institution within such country.
    (b) This section does not authorize any remittance to, or for the 
benefit of, a specially designated national who is not within a 
designated foreign country.
    (c) This section does not authorize any remittance to an individual 
for the purpose of defraying the expenses of a person not constituting 
part of his household.
    (d) As used in this section, the term household shall mean:
    (1) Those individuals sharing a common dwelling as a family; or
    (2) Any individual not sharing a common dwelling with others as a 
family.

[28 FR 6974, July 9, 1963]



Sec. 500.522  Certain remittances to United States citizens in foreign countries.

    (a) Remittances by any person through any domestic bank to any 
individual who is a citizen of the United States within any foreign 
country are hereby authorized and any domestic bank is authorized to 
effect such remittances, on the following terms and conditions:
    (1) Such remittances do not exceed $1,000 in any one calendar month 
to any payee and his household and are made only for the necessary 
living and traveling expenses of the payee and his household, except 
that an additional sum not exceeding $1,000 may be remitted once to such 
payee if such sum will be used for the purpose of enabling the payee or 
his household to return to the United States;
    (2) Such remittances are not made from a blocked account other than 
from an account in a banking institution within the United States in the 
name of, or in which the beneficial interest is held by, the payee or 
members of his household;
    (3) If the payee is within any designated foreign country, such 
remittances must be made through a domestic bank and must be effected by 
the payment of the dollar amount of remittance to a domestic bank for 
credit to a blocked account in the name of a banking institution within 
such country.

[[Page 508]]

    (b) This section does not authorize any remittance to an individual 
for the purpose of defraying the expenses of a person not constituting 
part of his household.
    (c) As used in this section, the term household shall mean:
    (1) Those individuals sharing a common dwelling as a family; or
    (2) Any individual not sharing a common dwelling with others as a 
family.



Sec. 500.523  Transactions incident to the administration of decedents' estates.

    (a) The following transactions are authorized in connection with the 
administration of the assets in the United States of any blocked estate 
of a decedent:
    (1) The appointment and qualification of a personal representative;
    (2) The collection and preservation of such assets by such personal 
representative and the payment of all costs, fees and charges in 
connection therewith; and
    (3) The payment by such personal representative of funeral expenses 
and expenses of the last illness.
    (4) Any transfer of title pursuant to a valid testamentary 
disposition.

This paragraph does not authorize any unblocking or distribution of 
estate assets to a designated national.
    (b) In addition to the authorization contained in paragraph (a) of 
this section, all other transactions incident to the administration of 
assets situated in the United States of any blocked estate of a decedent 
are authorized if:
    (1) The decedent was not a national of a designated foreign country 
at the time of his death;
    (2) The decedent was a citizen of the United States and a national 
of a designated foreign country at the time of his death solely by 
reason of his presence in a designated foreign country as a result of 
his employment by, or service with the United States Government; or
    (3) The assets are unblocked under a specific license issued 
pursuant to Sec. 500.568.
    (c) Any property or interest therein distributed pursuant to this 
section to a designated national shall be regarded for the purpose of 
this chapter as property in which such national has an interest and 
shall accordingly be subject to all the pertinent sections of this 
chapter. Any payment or distribution of any funds, securities or other 
choses in action to a designated national shall be made by deposit in a 
blocked account in a domestic bank or with a public officer, agency, or 
instrumentality designated by a court having jurisdiction of the estate. 
Any such deposit shall be made in one of the following ways:
    (1) In the name of the national who is the ultimate beneficiary 
thereof;
    (2) In the name of a person who is not a national of a designated 
foreign country in trust for the national who is the ultimate 
beneficiary; or
    (3) Under some other designation which clearly shows the interest 
therein of such national.
    (d) Any distribution of property authorized pursuant to this section 
may be made to a trustee of any testamentary trust or to the guardian of 
an estate of a minor or of an incompetent.
    (e) This section does not authorize:
    (1) Any designated national to act as personal representative or co-
representative of any estate;
    (2) Any designated national to represent, directly or indirectly, 
any person who has an interest in an estate;
    (3) Any designated national to take distribution of any property as 
the trustee of any testamentary trust or as the guardian of an estate of 
a minor or of an incompetent; or
    (4) Any transaction which could not be effected if no designated 
national had any interest in such estate.
    (f) Any payment or distribution authorized by this section may be 
deposited in a blocked account in a domestic bank or with a public 
officer, agency, or instrumentality designated by the court having 
jurisdiction of the estate in one of the ways prescribed in paragraphs 
(c) (1), (2) or (3) of this section, but this section does not authorize 
any other transaction directly or indirectly at the request, or upon the 
instructions of any designated national.

[15 FR 9040, Dec. 19, 1950, as amended at 54 FR 5232, Feb. 2, 1989]

[[Page 509]]



Sec. 500.524  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, or as legal representative of an 
estate of an infant or incompetent administered in the United States, in 
which trust or estate one or more persons who are designated nationals 
have an interest, beneficial or otherwise, or are co-trustees or co-
representatives, is hereby authorized to engage in the following 
transactions:
    (1) Payments of distributive shares of principal or income to all 
persons legally entitled thereto upon the condition prescribed in 
paragraph (b) of this section.
    (2) Other transactions arising in the administration of such trust 
or estate which might be engaged in if no national of a designated 
foreign country were a beneficiary, co-trustee or co-representative of 
such trust or estate upon the condition prescribed in paragraph (b) of 
this section.
    (b) Any payment or distribution of any funds, securities or other 
choses in action to a national of a designated foreign country under 
this section shall be made by deposit in a blocked account in a domestic 
bank in the name of the national who is the ultimate beneficiary 
thereof.
    (c) Any payment or distribution into a blocked account in a domestic 
bank in the name of any such national of a designated foreign country 
who is the ultimate beneficiary of and legally entitled to any such 
payment or distribution is authorized by this section, but this section 
does not authorize such trustee or legal representative to engage in any 
other transaction at the request, or upon the instructions, of any 
beneficiary, co-trustee or co-representative of such trust or estate or 
other person who is a national of any designated foreign country.
    (d) 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 insurer of 
securities in order to secure payment of interest or principal due on 
such securities.

[15 FR 9040, Dec. 19, 1950, as amended at 54 FR 5232, Feb. 2, 1989]



Sec. 500.525  Certain transfers by operation of law.

    (a) The following transfers by operation of law are hereby 
authorized:
    (1) 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;
    (2) Any transfer to any person by intestate succession.
    (3) Any transfer to any person as administrator, executor, or other 
fiduciary by reason of any testamentary disposition; and
    (4) Any transfer to any person as administrator, executor, or 
fiduciary by reason of judicial appointment or approval in connection 
with any testamentary disposition or intestate succession.
    (b) Except to the extent authorized by Sec. 500.523, Sec. 500.568 or 
by any other license or authorization contained in or issued pursuant to 
this chapter no transfer to any person by intestate succession and no 
transfer to any person as administrator, executor, or other fiduciary by 
reason of any testamentary disposition, and no transfer to any person as 
administrator, executor, or fiduciary by reason of judicial appointment 
or approval in connection with any testamentary disposition or intestate 
succession shall be deemed to terminate the interest of the decedent in 
the property transferred if the decedent was a designated national.
    (c) This section does not authorize any dealings in property by any 
person.

[25 FR 1910, Mar. 4, 1960, as amended at 54 FR 5232, Feb. 2, 1989]

[[Page 510]]



Sec. 500.526  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 purposes 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 of surrenders, 
conversions, modifications, and reinstatements; and
    (iv) The exercise or election by an insured of non-forfeiture 
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. 500.527  Certain transactions with respect to United States patents, trademarks, and copyrights.

    (a) There are hereby authorized:
    (1) The filing in the United States Patent Office of applications 
for letters patent and for trademarks registration;
    (2) The making and filing in the United States Copyright Office of 
applications for registration or renewal of copyrights;
    (3) The prosecution in the United States Patent Office of 
applications for letters patent and for trademarks registration;
    (4) The receipt of letters patent or trademark registration 
certificates or copyright registration or renewal certificates granted 
pursuant to any such applications in which any designated national has 
at any time on or since the ``effective date'' had any interest.

[[Page 511]]

    (b) This section further authorizes, subject to the terms and 
conditions prescribed in paragraphs (c) and (d) of this section, the 
execution and recording of any instrument recordable in the United 
States Patent Office or the United States Copyright Office which affects 
title to or grants any interest in, including licenses under, any United 
States letters patent, trademark registration, copyright or renewal 
thereof, or application therefor, in which a designated national, who is 
such a national solely by reason of his relationship to an occupied 
area, has at any time on or since the ``effective date'' had any 
interest, or which constitutes or evidences a transaction made by, or on 
behalf of, or pursuant to the direction of or with such a designated 
national, or if any of the parties to such instrument is such a 
designated national.
    (c) Any such instrument the recording or the execution and recording 
of which is authorized by paragraph (b) of this section shall be 
recorded in the United States Patent Office or in the United States 
Copyright Office within ninety days of the date of execution thereof or 
ninety days from the ``effective date'' whichever is the longer period, 
or within such further time as may be allowed by the Secretary of the 
Treasury. The person presenting such instrument for recording shall file 
therewith in the United States Patent Office or United States Copyright 
Office a statement that such instrument is being recorded in accordance 
with the provisions of this section.
    (d) Any such instrument the recording or the execution and recording 
of which is authorized by paragraph (b) of this section may be set aside 
by the Secretary of the Treasury at any time within a period of three 
years from the date of recording except that the Secretary of the 
Treasury may in his discretion reduce such period of time with respect 
to any such instrument after the recording thereof, and further, the 
patents, trademarks, interests, applications, or rights thereunder so 
transferred may be vested by the Secretary of the Treasury.
    (e) This section also authorizes the payment from blocked accounts 
or otherwise, of fees currently due to the United States Government in 
connection with any transactions authorized by this section.
    (f) 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 referred to in paragraphs (a), (b), 
and (e) of this section, provided that such payment shall not exceed (1) 
$100 for the preparation, filing, and prosecution of any letters patent; 
or (2) $50 for the preparation, filing and prosecution of any 
application for a trademark registration; or (3) $25 for the securing 
and registration of any copyright; or (4) $35 for the preparation and 
filing of any amendment to a pending application for letters patent or 
for a trademark registration.
    (g) This section also authorizes the payment of a nominal 
consideration not exceeding one dollar, to any party to an instrument 
executed or recorded hereunder with respect to the property affected by 
such instrument, as long as such instrument is subject to being set 
aside in accordance with paragraph (d) of this section.



Sec. 500.528  Certain transactions with respect to blocked foreign patents, trademarks and copyrights authorized.

    (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

[[Page 512]]

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.

[15 FR 9040, Dec. 19, 1950, as amended at 50 FR 27437, July 3, 1985]



Sec. 500.529  Powers of attorney.

    (a) No power of attorney, whether granted before or after the 
``effective date'' shall be invalid by reason of any of the provisions 
of this chapter with respect to any transaction licensed by or pursuant 
to the provisions of this chapter.
    (b) This section does not authorize any transaction pursuant to a 
power of attorney if such transaction is prohibited by Sec. 500.201 and 
is not otherwise licensed or authorized by or pursuant to this chapter.
    (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. 500.530  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 any 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 any 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. 500.533  Exportations, reexportations, and incidental transactions.

    (a) All transactions ordinarily incident to the exportation of 
goods, software, or technology (including technical data) from the 
United States or reexportation of U.S.-origin goods, software, or 
technology from a foreign country to any person in a designated foreign 
country or to the government of a designated foreign country, are hereby 
authorized, provided that the exportation or reexportation is licensed 
or otherwise authorized by the Department of Commerce under the Export 
Administration Regulations (15 CFR parts 730-799).
    (b) The general license does not authorize the financing of any 
transaction from a blocked account.
    Note to Sec.  500.533: See note to Sec.  500.586(b).

[65 FR 38165, June 19, 2000]

[[Page 513]]



Sec. 500.535  Exchange of certain securities.

    (a) Subject to the limitations and conditions of paragraph (b) of 
this section and notwithstanding Sec. 500.202 of this chapter, 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, 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.

[16 FR 767, Jan. 27, 1951]



Sec. 500.536  Certain transactions with respect to merchandise affected by Sec. 500.204.

    (a) With respect to merchandise the importation of which is 
prohibited by Sec. 500.204, all Customs transactions are authorized 
except the following:
    (1) Entry for consumption (including any appraisement entry, any 
entry of goods imported in the mails, regardless of value, and any other 
informal entries);
    (2) Entry for immediate exportation;
    (3) Entry for transportation and exportation;
    (4) Withdrawal from warehouse;
    (5) Transfer or withdrawal from a foreign-trade zone; or
    (6) Manipulation or manufacture in a warehouse or in a foreign-trade 
zone.
    (b) Paragraph (a) of this section is intended solely to allow 
certain restricted disposition of merchandise which is imported without 
proper authorization. Paragraph (a) does not authorize the purchase or 
importation of any merchandise.
    (c) The purchase outside the United States for importation into the 
United States of merchandise specified in Sec. 500.204 (other than 
merchandise to which Sec. 500.204(a)(1) is applicable) and the 
importation of such merchandise into the United States (including 
transactions listed in paragraph (a) of this section) 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 (d) 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.
    (d) 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 
Foreign 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 
Foreign Assets Control Regulations and stating that the certificate has 
been issued under procedures agreed upon with the United States 
Government.

[18 FR 2080, Apr. 14, 1953, as amended at 19 FR 5483, Aug. 27, 1954; 20 
FR 1379, Mar. 8, 1955; 40 FR 7649, Feb. 21, 1975; 50 FR 5753, Feb. 12, 
1985; 54 FR 5232, Feb. 2, 1989]



Sec. 500.549  Proof of origin.

    Specific licenses for importation of goods the origin of which is 
North Korea, North Viet-Nam, Cambodia, or

[[Page 514]]

South Viet-Nam are generally not issued unless the applicant submits 
satisfactory documentary proof of the location of the goods outside 
North Korea, North Viet-Nam, Cambodia, or South Viet-Nam prior to the 
applicable effective date and of the absence of any interest of North 
Korea, North Viet-Nam, Cambodia, or South Viet-Nam in the goods at all 
times on or since that date. Since the type of documents 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.

[41 FR 16555, Apr. 20, 1976]



Sec. 500.550  Transactions related to information and informational materials.

    (a) All financial and other transactions directly incident to the 
importation or exportation of information or informational materials as 
defined in Sec. 500.332 of this part are authorized.
    (b) Transactions relating to the dissemination of information or 
informational materials are authorized, including remittance of 
royalties paid for information or informational materials that are 
reproduced, translated, subtitled, or dubbed. This section does not 
authorize the remittance of royalties or other payments relating to 
works not yet in being, or for marketing and business consulting 
services, or artistic or other substantive alteration or enhancements to 
information or informational materials, as provided in Sec. 500.206(c).

[54 FR 5232, Feb. 2, 1989, as amended at 60 FR 8934, Feb. 16, 1995]



Sec. 500.551  Reimports.

    Specific licenses are issued for reimportation of merchandise 
subject to Sec. 500.204 on proof of the export of the identical 
merchandise from the United States. Persons planning to export any such 
merchandise for exhibition, repair, or for any other purpose should 
first ascertain that reimportation will be authorized. Generally, 
reimportation is authorized only if Customs Form 4455 was completed at 
the time of export.

[40 FR 7650, Feb. 21, 1975]



Sec. 500.552  Research samples.

    Specific licenses are issued for importation of commodities subject 
to Sec. 500.204 for bona fide research purposes in sample quantities 
only.

[40 FR 7650, Feb. 21, 1975]



Sec. 500.553  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 Sec. 500.204. Contractual commitments to 
engage in transactions subject to the prohibitions in Sec. 500.204 
should not be made, unless the contract specifies that the transaction 
is authorized by a general license or that it is subject to the issuance 
of a specific Foreign Assets Control license.

[40 FR 7650, Feb. 21, 1975]



Sec. 500.554  Gifts of North Korean, North Vietnamese, Cambodian, or South Vietnamese origin.

    (a) Except as stated in paragraph (b) of this section and in 
Sec. 500.550, specific licenses are not issued for the importation of 
North Korean, North Vietnamese, Cambodian, or South Vietnamese origin 
goods sent as gifts to persons in the United States or acquired abroad 
as gifts by persons entering the United States. However, licenses are 
issued, upon request, for the return of such goods to the donors in 
countries other than North Korea, North Viet-Nam, Cambodia, or South 
Viet-Nam.
    (b) Specific licenses are issued for the importation directly from 
North Korea, North Viet-Nam, Cambodia, or South Viet-Nam:

[[Page 515]]

    (1) Of goods which are claimed by the importer to have been sent as 
a bona fide gift and
    (2) Of goods which are claimed to have been acquired in North Korea, 
North Viet-Nam, Cambodia, or South Viet-Nam as a bona fide gift, subject 
to the conditions that:
    (i) The goods are of small value, and
    (ii) There is no reason to believe that there is, or has been since 
the applicable effective date, any direct or indirect financial or 
commercial benefit to North Korea, North Viet-Nam, Cambodia, or South 
Viet-Nam or nationals thereof from the importation.

[41 FR 16555, Apr. 20, 1976]



Sec. 500.556  Joint bank accounts.

    Specific licenses are issued unblocking a portion of or all of a 
blocked joint bank account where a non-blocked applicant claims 
beneficial ownership, as follows:
    (a) 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.
    (b) Joint bank account, with survivorship provision. 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 are issued on the basis of applicant's 
assertions of beneficial ownership interest without the requirement of 
independent evidence.

[40 FR 7650, Feb. 21, 1975]



Sec. 500.557  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 North Korean, 
North Vietnamese, Cambodian, or South Vietnamese national, who died in 
one of those countries after the applicable effective date to certain 
beneficiaries licensed as unblocked nationals pursuant to Sec. 500.505, 
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.

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; and
    (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.
    (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 5232, Feb. 2, 1989]



Sec. 500.558  Accounts of blocked partnerships.

    Specific licenses are issued unblocking partnerships established 
under the laws of North Korea, North Viet-Nam, Cambodia, or South Viet-
Nam, as follows:

[[Page 516]]

    (a) Where all of the general partners and limited partners, if any, 
have emigrated from North Korea, North Viet-Nam, Cambodia, or South 
Viet-Nam 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 in 
North Korea, North Viet-Nam, Cambodia, or South Viet-Nam (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 licensees is conditioned on the applicant 
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 the applicable effective date, and as 
of the date of the application;
    (2) The current status of the blocked 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 the 
applicable effective date and as of the date of filing of the 
application.

[40 FR 7651, Feb. 21, 1975, as amended at 41 FR 16555, Apr. 20, 1976; 45 
FR 7225, Jan. 31, 1980]



Sec. 500.559  Accounts of North Korean, North Vietnamese, Cambodian or South Vietnamese sole proprietorships.

    Specific licenses are issued unblocking sole proprietorships 
established under the laws of North Korea, North Viet-Nam, Cambodia, or 
South Viet-Nam if the proprietor has emigrated from those countries and 
established residence in the United States or a country in the 
authorized trade territory. Such licenses do not unblock any 
indebtedness of the proprietorship due to persons in North Korea, North 
Viet-Nam, Cambodia, or South Viet-Nam.

[41 FR 16556, Apr. 20, 1976, as amended at 45 FR 7225, Jan. 31, 1980]



Sec. 500.560  Bank accounts of official representatives of foreign governments in North Korea, North Viet-Nam, Cambodia, or South Viet-Nam.

    Specific licenses are issued authorizing payments from accounts of 
official representatives of foreign governments in North Korea, North 
Viet-Nam, Cambodia, or South Viet-Nam for transactions which are not 
inconsistent with the purposes of any of the regulations in this 
chapter.

[41 FR 16556, Apr. 20, 1976, as amended at 45 FR 7225, Jan. 31, 1980]



Sec. 500.561  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. 500.205. 
Such a showing shall

[[Page 517]]

include an opinion of the State Attorney General that such statutory 
authority exists.

[44 FR 11767, Mar. 2, 1979, as amended at 50 FR 27437, July 3, 1985]



Sec. 500.562  [Reserved]



Sec. 500.563  Transactions incident to travel to and within North Korea.

    (a) All transactions of persons subject to U.S. jurisdiction, 
including travel service providers, ordinarily incident to travel to, 
from, and within North Korea and to maintenance within North Korea are 
authorized. This authorization extends to transactions with North Korean 
carriers and those involving group tours, payment of living expenses, 
the acquisition of goods in North Korea for personal use, and normal 
banking transactions involving currency drafts, charge, debit or credit 
cards, traveler's checks, or other financial instruments negotiated 
incident to personal travel.
    (b) The purchase of merchandise in North Korea by persons subject to 
U.S. jurisdiction, and importation as accompanied baggage, is limited to 
goods with a foreign market value not to exceed $100 per person for 
personal use only. Such merchandise may not be resold. This 
authorization may be used only once in every six consecutive months. As 
provided in Sec. 500.206 of this part, information and informational 
materials are exempt from this restriction.
    (c) This section does not authorize any debit to a blocked account.

[60 FR 8935, Feb. 16, 1995]



Sec. 500.564  [Reserved]



Sec. 500.565  Family remittances to nationals of Vietnam and Cambodia.

    (a) The remittances specified in this section are authorized to be 
made to any close relative of the remitter or of the remitter's spouse, 
provided that the relative is a national of Vietnam or Cambodia, is a 
resident of Vietnam, Cambodia, or a country to which private remittances 
to nationals are not generally prohibited pursuant to this chapter, and 
is not a specially designated national.
    (b) Remittances made pursuant to this section may be made only as 
follows:
    (1) For the support of the payee, or for the support of the payee 
and members of his household, in amounts not exceeding $300 in any 
consecutive 3-month period to any one payee or to any household; and
    (2) For the purpose of enabling the payee to emigrate from Vietnam 
or Cambodia, in an amount not exceeding $750, to be made only once to 
any one payee, provided that the payee is a resident of and within 
Vietnam or Cambodia.
    (c) The term close relative used with respect to any person means 
spouse, child, grandchild, parent, grandparent, uncle, aunt, brother, 
sister, nephew, niece or spouse, widow, or widower of any of the 
foregoing.
    (d) The term member of a household used with respect to any person 
means a close relative sharing a common dwelling with such person.
    (e) This section does not authorize remittances from blocked 
accounts.
    (f) Specific licenses may be issued authorizing a U.S. financial 
institution to establish direct correspondent banking relations with a 
Vietnamese or Cambodian bank or banks for the sole purpose of 
facilitating the remittance of funds authorized by this section.

[56 FR 20349, May 3, 1991]



Sec. 500.566  Certain transactions authorized on behalf of North Korean nationals incident to their travel and maintenance expenses.

    (a) Except as provided in paragraph (b) of this section, the 
following transactions are authorized by or on behalf of a national of 
North Korea who enters the United States on a visa issued by the 
Department of State:
    (1) All transactions ordinarily incident to travel to, from, and 
within the United States are authorized, including the importation into 
the United States of accompanied baggage for personal use;
    (2) All transactions ordinarily incident to travel and maintenance 
within the United States, including payment of living expenses and the 
acquisition of goods in the United States for personal use; and

[[Page 518]]

    (3) Normal banking transactions involving foreign currency drafts, 
traveler's checks, or other instruments negotiated incident to personal 
travel in the United States,
    (b) This section does not authorize any debit to a blocked account.

(Sec. 5, 40 Stat. 415, as amended, 50 U.S.C. App. 5(b); 75 Stat. 445, 22 
U.S.C. 2370(a); Proc. 3447, 27 FR 1065, 3 CFR, 1959-1963 Comp.; E.O. 
9193, 7 FR 5205, 3 CFR, Cum. Supp., p. 1174; E.O. 9989, 13 FR 4891, 3 
CFR, 1943-1948 Comp., p. 748)

[49 FR 24994, June 19, 1984, as amended at 55 FR 31179, Aug. 1, 1990; 58 
FR 63084, Nov. 30, 1993; 60 FR 8935, Feb. 16, 1995]



Sec. 500.567  U.S. assets of certain designated country 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 countries designated in this part, after deducting the total debt due 
creditors for claims that accrued prior to the effectiveness 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 the 
designated country 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 the designated country, 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 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]



Sec. 500.568  U.S. assets of blocked decedents.

    (a) Specific licenses may be issued unblocking the net pro rata 
shares of certain heirs of designated nationals in U.S.-located estate 
assets, 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 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 pursuant to Sec. 500.505 exists in that portion of 
the assets 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. 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 death of the designated national to be established by a 
death certificate;
    (3) Proof of heirship, to be established by a copy of the decedent's 
duly executed will certified by a probate court, a court decree 
determining the

[[Page 519]]

heirs, or, failing the availability of such documents, copies of 
certificates establishing the relationship of the heir to the deceased, 
e.g., birth or marriage certificates; and
    (4) A description of the assets involved, including interest due on 
blocked funds since April 1, 1979, the name and address of the 
institution in which the assets are held, the account or safe deposit 
box number, the name in which the assets are held and a statement of all 
known encumbrances or claims against them.
    (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 5232, Feb. 2, 1989]



Sec. 500.569  [Reserved]



Sec. 500.570  Cambodian property unblocked.

    All transactions otherwise prohibited by this part which involve 
property in which Cambodia or a national thereof has an interest, other 
than property blocked in the name of the Exchange Support Fund for the 
Khmer Republic, are authorized.

[59 FR 60559, Nov. 25, 1994]



Sec. 500.571  Transactions related to telecommunications authorized.

    All transactions of U.S. common carriers incident to the receipt or 
transmission of telecommunications involving North Korea are authorized.
    Note: Exports or reexports to North Korea of goods and technical 
data, or of the direct products of technical data (regardless of U.S. 
content), not prohibited by this part may require authorization from the 
U.S. Department of Commerce pursuant to the Export Administration 
Regulations, 15 CFR parts 768-799.

[57 FR 58986, Dec. 14, 1992, as amended at 60 FR 8935, Feb. 16, 1995]



Sec. 500.572  Humanitarian projects authorized.

    (a) All transactions by non-governmental organizations incident to 
carrying out humanitarian projects in Vietnam are authorized. For 
purposes of this section, the term ``non-governmental organization'' 
shall mean any private voluntary organization accorded tax exempt status 
under Sec. 501(c)(3) of the Internal Revenue Code, as well as any other 
organization engaged in voluntary charitable assistance activities that 
receives funding from private sources, including but not limited to 
accredited degree-granting institutes of education, private foundations 
and research institutions.
    (b) The non-governmental organization carrying out humanitarian 
projects in Vietnam pursuant to this authorization shall file an initial 
report within 10 business days after the formal commencement of U.S. 
activities on the project with the Office of Foreign Assets Control, 
Compliance Division, U.S. Department of the Treasury, 1500 Pennsylvania 
Avenue NW.--Annex, Washington, DC 20220, stating:
    (1) The name, address, and telephone number of the non-governmental 
organization, and the officer charged with supervision of the project in 
Vietnam; and
    (2) The nature, scope, purpose, and location of the project in 
Vietnam.

[57 FR 20766, May 15, 1992]



Sec. 500.573  Certain donations of funds and goods to meet basic human needs authorized.

    (a) The donation of funds for the purpose of contributing to the 
provision of humanitarian assistance to victims of natural disasters in 
North Korea is authorized, provided that such donations may only be made 
through the United Nations, related UN programs and specialized 
agencies, the American Red Cross and the International Committee of the 
Red Cross.
    (b) With respect to transactions not within the scope of the general 
license contained in Sec. 500.533 of this part, all transactions 
incident to the donation to North Korea of goods to meet basic

[[Page 520]]

human needs are authorized. For purposes of this section, goods to meet 
basic human needs shall be defined by reference to the Humanitarian 
License Procedure set forth in 15 CFR 773.5 (c) and (d) and supplement 
no. 7 to part 773 of the Export Administration Regulations.
    Note: Exports from the United States to North Korea or reexports to 
North Korea of U.S.-origin goods, or foreign goods containing U.S.-
origin content or produced from U.S.-origin technical data, to meet 
basic human needs in North Korea may require authorization from the U.S. 
Department of Commerce.

[61 FR 9344, Mar. 8, 1996]



Sec. 500.574  Executory contracts and related transactions authorized.

    (a) Executory contracts. (1) Persons subject to U.S. jurisdiction 
are authorized to enter into executory contracts with Vietnam or 
Vietnamese nationals, or executory contracts in which Vietnam or a 
Vietnamese national has an interest, the performance of which is 
contingent upon the lifting or modification of the embargo on Vietnam to 
permit such performance.
    (2) Within 10 business days of signing an executory contract 
authorized pursuant to paragraph (a) of this section, the person subject 
to U.S. jurisdiction must file a copy of the contract with the Office of 
Foreign Assets Control, Compliance Programs Division, 1500 Pennsylvania 
Avenue, NW.--Annex 2131, Washington, DC 20220, referencing the fact that 
the contract was entered into pursuant to 31 CFR 500.574(a).
    (3) Specific licenses will be issued on a case-by-case basis to 
authorize financial transactions such as the payment of deposits, 
earnest money, signing bonuses, and administrative and registration fees 
incident to the signature of specific executory contracts authorized 
pursuant to paragraph (a)(1) of this section. The number of the 
pertinent license must be referenced in all funds transfers and other 
banking transactions through banks subject to U.S. jurisdiction made in 
connection with the contract.
    (b) Preparatory transactions. (1) Specific licenses will be issued 
authorizing commercial and financial transactions necessary to obtaining 
and preparing to perform executory contracts authorized pursuant to 
paragraph (a)(1) of this section. These commercial and financial 
transactions include:
    (i) Opening offices in Vietnam;
    (ii) Hiring staff;
    (iii) Writing and designing plans;
    (iv) Carrying out preliminary feasibility studies and engineering 
and technical surveys; and
    (v) Import, export, and service transactions incident to the 
foregoing.
    (2) Specific licenses issued pursuant to paragraph (b)(1) of this 
section will, to the extent feasible, encompass commercial and financial 
transactions incident to the licensed commercial purpose or activity.
    Note: Exports or reexports to Vietnam of goods and technical data, 
or of the direct products of technical data (regardless of U.S. 
content), in connection with activities licensed by FAC may require 
authorization from the U.S. Department of Commerce pursuant to the 
Export Administration Regulations, 15 CFR parts 768-799.
    (3) The number of the pertinent license must be referenced in all 
funds transfers and other banking transactions through banks subject to 
U.S. jurisdiction in connection with preparatory transactions under 
paragraphs (b) (1) and (2) of this section.

[57 FR 62230, Dec. 30, 1992]



Sec. 500.575  Certain services to Vietnamese nationals authorized.

    (a) Specific licenses may be issued on a case-by-case basis for the 
provision in the United States or a third country of business 
orientation or training services to Vietnamese nationals. The 
orientation or training program may pertain only to industrial or 
commercial processes, or to specific equipment and related technical 
data both of which are eligible for export under a general license to 
Country Group Y, as set forth in Supplement No. 1 to part 770 of the 
Export Administration Regulations, 15 CFR parts 768-799. Licenses issued 
pursuant to this section will not authorize Vietnamese participation in 
orientation and training programs with respect to specific equipment and 
related technical data that may not be exported under a general license 
to Country Group Y pursuant to the Export Administration Regulations.

[[Page 521]]

Training programs may involve instruction on the maintenance or 
operation of a particular product, but may not involve instruction in a 
product's design or manufacture.

    Note: The transfer of mass-market software and certain technical 
data eligible for export to most destinations under General License GTDU 
to Vietnamese nationals may require additional authorization from the 
U.S. Department of Commerce pursuant to the Export Administration 
Regulations.

    (b) Transactions directly incident to the travel and maintenance 
expenses of the Vietnamese nationals for purposes of orientation or 
training programs are authorized pursuant to Sec. 500.566. Payment of 
salaries or other fees to Vietnamese nationals participating in 
orientation or training programs is not authorized.
    (c) Applications for specific licenses should be submitted by the 
orientation or training program sponsor and should include a full 
description of the program to be offered, including the participants, 
the identity of their employers, and the capacities in which the 
participants are employed.

[58 FR 63084, Nov. 30, 1993]



Sec. 500.576  Authorization of transactions concerning certain development projects in Vietnam.

    (a) All transactions by persons subject to U.S. jurisdiction in 
connection with participation in development projects in Vietnam 
formally proposed or approved for execution, funding or sponsorship by 
the international institutions listed in appendix A to this part 
(``Qualified Projects'') are authorized. For purposes of this section, 
Qualified Projects include investment projects, structural adjustment 
lending, sector adjustment lending, International Monetary Fund balance-
of-payments support, and general development assistance including 
grants, technical assistance, and loans.
    (b) Persons subject to U.S. jurisdiction may provide both goods and 
services to any party contracting to participate in a Qualified Project 
pursuant to the authorization contained in this section.
    (1) Services may include financial, legal, consulting, insurance, 
shipping and other services.
    (2) Persons subject to U.S jurisdiction may participate in Qualified 
Projects as suppliers, contractors, or subcontractors, and through joint 
ventures with third-country nationals and Vietnamese nationals.
    (3) Persons subject to U.S. jurisdiction may finance, or guarantee 
the performance of, activities of U.S. participants in a Qualified 
Project; co-financing of or lending to the Qualified Project itself by a 
person subject to U.S. jurisdiction may be authorized by specific 
license pursuant to Sec. 500.801.

Illustrative examples of transactions covered by this section are set 
forth in Sec. 500.413.
    (c) Except as otherwise authorized, persons subject to U.S. 
jurisdiction may not participate in development projects in Vietnam that 
are bilaterally funded and administered, or in projects or feasibility 
studies prior to formal proposal or approval by a qualified 
international institution for its involvement in the project or study. 
If a qualified international institution formally proposes but 
thereafter rejects, terminates, or abandons a project, the project shall 
no longer constitute a Qualified Project for purposes of this section. 
Except as otherwise specifically authorized pursuant to this part, 
persons subject to U.S. jurisdiction may not enter into any new 
commitments with respect to the project after the date of such 
rejection, termination, or abandonment. In addition, this section does 
not authorize:
    (1) The importation of Vietnamese-origin goods into the United 
States, except as required to honor service or warranty contracts 
associated with Qualified Projects;
    (2) Offshore transactions of persons subject to U.S. jurisdiction 
involving the sale of Vietnamese-origin goods between Vietnam and third 
countries, or among third countries;
    (3) Flights into or out of Vietnam by aircraft owned or controlled 
by persons subject to U.S. jurisdiction, except when such persons 
transport, on aircraft they own, only passengers or cargo associated 
with a Qualified Project in which such persons are participating 
pursuant to this section;
    (4) The use in Vietnam of credit cards issued by a U.S. banking 
institution; or

[[Page 522]]

    (5) A debit to a blocked account.

    Example: A Vietnamese highway project feasibility study financed by 
a third-country development agency is not a Qualified Project for 
purposes of this section. However, the feasibility study would be a 
Qualified Project, notwithstanding the bilateral funding, if the 
International Development Association had formally proposed the highway 
project as one under consideration for funding in its Monthly 
Operational Summary of World Bank and IDA Proposed Projects

    (d) Within 10 business days after entering into an agreement for 
goods, services, financing, investment, or other participation in or 
related to a Qualified Project, the person(s) subject to U.S. 
jurisdiction entering into the agreement must register with the Office 
of Foreign Assets Control, Compliance Division, U.S. Department of the 
Treasury, 1500 Pennsylvania Avenue, NW.--Annex, Washington, DC 20220. 
The registration shall reference the fact that the agreement was entered 
into pursuant to 31 CFR 500.576(a), and shall provide:
    (1) The name, address, telephone and facsimile numbers, and 
nationality of the person(s) subject to U.S. jurisdiction;
    (2) If the reporting party is not an individual, the name, address, 
telephone and facsimile numbers of the individual to contact for further 
information,
    (3) The name of the international institution listed in appendix A 
formally proposing, approving, executing, funding, or sponsoring the 
project;
    (4) The name and a brief description of the project in Vietnam (with 
any contract, project, request for bid, or other identifying number);
    (5) A brief description of the activity covered by the agreement, 
and the contract value; and
    (6) If the reporting party is a subcontractor, the prime 
contractor's name, address, and nationality, and those of all 
intermediate subcontractors.

Registration is not required of agencies of the Federal Government 
participating in Qualified Projects.
    (e) Upon registration meeting the requirements of paragraph (d) of 
this section, the Office of Foreign Assets Control will assign a 
registration number to the contract involved. This number should be 
referenced in all funds transfers and other banking transactions that 
take place through banks subject to U.S. jurisdiction, and in all U.S. 
export documents, in connection with the Qualified Project in Vietnam in 
order to avoid the blocking of such funds and to facilitate export 
transactions.
    (f) Annual reports must be filed with the Office of Foreign Assets 
Control on the anniversary of the issuance of a contract registration 
number, briefly describing the status of the project and any material 
changes in the information originally provided.
    Note to Sec. 500.576: Exports or reexports to Vietnam of goods and 
technical data, or of the direct products of technical data (regardless 
of U.S. content), in connection with activities licensed by FAC may 
require authorization from the U.S. Department of Commerce pursuant to 
the Export Administration Regulations, 15 CFR parts 768-799.

[58 FR 68531, Dec. 28, 1993]



Sec. 500.577  Authorization of bank transactions with respect to Vietnam by certain international organizations.

    All transactions by banking institutions subject to U.S. 
jurisdiction incidental to the processing of transactions of the 
international institutions identified in appendix A with reference to 
Vietnam are authorized.

    Example: A transfer to Vietnam or a Vietnamese national of funds 
from the U.S. account of a qualified international institution listed in 
appendix A to this part, for a program, rent or salary payment, is not 
blocked under this part.

[58 FR 68532, Dec. 28, 1993]



Sec. 500.578  Vietnamese property unblocked.

    All transactions otherwise prohibited by this part which involve 
property in which a designated national of Vietnam has an interest are 
authorized.

[60 FR 12886, Mar. 9, 1995]



Sec. 500.579  Authorization for release of certain blocked transfers by banking institutions subject to U.S. jurisdiction.

    (a) Banking institutions subject to the jurisdiction of the United 
States are authorized to unblock and return to the remitting party funds 
that were blocked pursuant to this part because

[[Page 523]]

of an interest of Vietnam or a Vietnamese national and that came into 
their possession or control by wire transfer or check remittance 
received after December 31, 1989, provided that no funds are released to 
the Government of Vietnam or any person in Vietnam.
    (b) Specific licenses may be issued authorizing the return to the 
remitting party of funds that were blocked by banking institutions 
subject to the jurisdiction of the United States pursuant to this part 
because of an interest of North Korea or a national thereof and that 
came into the banking institution's possession or control by wire 
transfer or check remittance, provided that no funds are released to the 
Government of North Korea, any entity controlled by the Government of 
North Korea, or any person located in, controlled from, or organized 
under the laws of North Korea.

[59 FR 26602, May 23, 1994, as amended at 60 FR 8935, Feb. 16, 1995]



Sec. 500.580  Authorization of U.S. dollar clearing transactions involving North Korea.

    Banking institutions organized under the laws of or located in the 
United States are authorized to process the transfer of funds in which 
North Korea or a national thereof has an interest. Persons subject to 
U.S. jurisdiction who are originators or ultimate beneficiaries of funds 
transfers, however, including U.S. banking institutions that are 
themselves originators or beneficiaries, may not initiate or receive 
such transfers if the underlying transactions to which they relate are 
prohibited pursuant to this part.

[60 FR 8935, Feb. 16, 1995]



Sec. 500.581  Financial transactions related to diplomatic missions authorized.

    All financial transactions related to activities of North Korean 
diplomatic missions in the United States and U.S. diplomatic missions in 
North Korea are authorized, with the exception of transactions involving 
the North Korean mission to the United Nations in New York, which are 
subject to approval by specific license.

[60 FR 8935, Feb. 16, 1995]



Sec. 500.582  Importation of North Korean-origin magnesite and magnesia.

    Specific licenses may be issued authorizing the importation into the 
United States of North Korean-origin magnesite or magnesia.

[60 FR 8935, Feb. 16, 1995]



Sec. 500.583  News organization offices.

    (a) Specific licenses may be issued authorizing all transactions 
necessary for the establishment and operation of news bureaus in North 
Korea by U.S. organizations whose primary purpose is the gathering and 
dissemination of news to the general public.
    (b) Transactions that will be authorized include but are not limited 
to those incident to the following:
    (1) Leasing office space and securing related goods and services;
    (2) Hiring North Korean nationals to serve as support staff;
    (3) Purchasing North Korean-origin goods for use in the operation of 
the office; and
    (4) Paying fees related to the operation of the office in North 
Korea.
    (c) Specific licenses may be issued authorizing transactions 
necessary for the establishment and operation of news bureaus in the 
United States by North Korean organizations whose primary purpose is the 
gathering and dissemination of news to the general public.
    (d) The number assigned to a specific license issued pursuant to 
this section should be referenced in all import documents, and in all 
funds transfers and other banking transactions through banking 
institutions organized or located in the United States, in connection 
with the licensed transactions to avoid the blocking of goods imported 
from North Korea and the interruption of the financial transactions with 
North Korea.

[60 FR 8935, Feb. 16, 1995]

[[Page 524]]



Sec. 500.584  Energy sector projects in North Korea.

    Specific licenses may be issued to permit persons subject to U.S. 
jurisdiction to participate in certain energy sector projects in North 
Korea in connection with that country's transition to light-water 
reactor (``LWR'') power plants. Transactions that may be licensed 
include those related to LWR power plant design, site preparation, 
excavation, delivery of essential nonnuclear components including 
turbines and generators, building construction, the disposition of 
spentnuclear fuel, and the provision of heavy oil to North Korea for 
heating and electricity generation pending completion of the first LWR 
unit.

[60 FR 8935, Feb. 16, 1995]



Sec. 500.585  Payments for services rendered by North Korea to United States aircraft authorized.

    Payments to North Korea of charges for services rendered by the 
Government of North Korea in connection with the overflight of North 
Korea or emergency landing in North Korea by aircraft owned or 
controlled by a person subject to the jurisdiction of the United States 
or registered in the United States are authorized.

[62 FR 17548, Apr. 10, 1997]



Sec. 500.586  Authorization of new transactions concerning certain North Korean property.

    (a) Subject to the limitations in paragraph (b) of this section, 
transactions in which North Korea or a national thereof has an interest 
are authorized where:
    (1) The property comes within the jurisdiction of the United States 
or into the control or possession of a person subject to the 
jurisdiction of the United States on or after June 19, 2000; or
    (2) The interest in the property of North Korea or a North Korean 
national arises on or after June 19, 2000.
    (b)(1) Unless otherwise authorized by the Office of Foreign Assets 
Control, all property and interests in property of North Korea or its 
nationals that were blocked pursuant to subpart B of this part as of 
June 16, 2000, remain blocked and subject to the prohibitions and 
requirements of this part;
    (2)(i) The importation of products into the United States from North 
Korea requires approval from the Office of Foreign Assets Control. The 
person seeking to import products into the United States must provide 
information relevant to the determination whether the product was 
produced by
    (A) A foreign person whose actions triggered import sanctions under 
sections 73 and 74 of the Arms Export Control Act;
    (B) An activity of the government of North Korea relating to the 
development or production of any missile equipment or technology; or
    (C) An activity of the government of North Korea affecting the 
development or production of electronics, space systems or equipment, 
and military aircraft.
    (ii) Those seeking to import products from North Korea into the 
United States must submit all available information satisfying the 
requirements of paragraph (b)(2)(i) of this section; the name, address, 
telephone number, facsimile number, and e-mail address of the importer; 
a description of the product to be imported, including quantity and 
cost; the name and address of the producer of the product; the name of 
the location where the product was produced; and the name and address of 
the North Korean exporter. Requests for import review should be 
submitted by mail to North Korea Unit, Office of Foreign Assets Control, 
U.S. Department of the Treasury, 1500 Pennsylvania Avenue, NW, Annex, 
Washington, DC 20220. Upon review of the submitted information, the 
Office of Foreign Assets Control will issue a letter indicating the 
results of the review to the person seeking to import the product.
    (3) Except as authorized by Sec. 500.580 or unless otherwise 
authorized by the Office of Foreign Assets Control, persons subject to 
the jurisdiction of the United States are prohibited from engaging in 
any transfer from the government of North Korea:
    (i) Constituting a donation to a person subject to the jurisdiction 
of the United States; or
    (ii) With respect to which a person subject to the jurisdiction of 
the

[[Page 525]]

United States knows (including knowledge based on advice from an agent 
of the United States Government), or has reasonable cause to believe, 
that the transfer poses a risk of furthering terrorist acts in the 
United States.
    (4) This section does not affect any open enforcement action 
initiated by the U.S. government prior to June 19, 2000 or any seizure, 
forfeiture, penalty, or liquidated damages case that is considered 
closed in accordance with U.S. Customs or other agency regulations. This 
section also does not authorize the importation into the United States 
of goods that are under seizure or detention by U.S. Customs officials 
pursuant to Customs laws or other applicable provision of law, until any 
applicable penalties, charges, duties or other conditions are satisfied. 
This section does not authorize importation into the United States of 
goods for which forfeiture proceedings have been commenced or of goods 
that have been forfeited to the U.S. Government, other than though U.S. 
Customs disposition by selling at auction.
    Note to Sec. 500.586(b): The exportation and reexportation of items 
may be subject to license application requirements under regulations 
administered by other federal agencies (see e.g., the Export 
Administration Regulations administered by the Department of Commerce). 
Section 500.533 of this part continues to provide authority for 
transactions incident to the exportation and reexportation of items 
authorized by the Department of Commerce. It should also be noted that 
the shipment of strategic goods from a foreign country to North Korea by 
persons subject to the jurisdiction of the United States remains 
prohibited by 31 CFR part 505. The application requirements for a 
specific license relating to such goods are found in 31 CFR 501.801.

[65 FR 38165, June 19, 2000]



                           Subpart F--Reports



Sec. 500.601  Records and reports.

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

[62 FR 45101, Aug. 25, 1997]



Sec. 500.602  Reporting of claims of U.S. nationals against North Korea.

    (a) Requirement for reports. Reports are required to be filed on or 
before March 9, 1998, in the manner prescribed in this section, with 
respect to all outstanding claims held by United States nationals 
against the Government of North Korea or any North Korean government 
entity.
    (b) Who must report. A report must be submitted by each U.S. 
national having a claim outstanding against the Government of North 
Korea or any North Korean government entity. Reports should be submitted 
only by persons who were U.S. citizens or entities organized under the 
laws of a U.S. jurisdiction on the date of the loss.
    (c) How to register. U.S. nationals filing reports of claims must 
submit a letter containing the information required by paragraph (f) of 
this section. The letter must be sent to the Blocked Assets Division, 
Office of Foreign Assets Control, Department of the Treasury, 1500 
Pennsylvania Ave., NW.--Annex, Washington, DC 20220, to arrive by March 
9, 1998. A copy of the submission should be kept by the claimant.
    (d) Certification. Every report shall bear the signature of the 
claimant or a person authorized by the claimant to sign the report. The 
signature will certify that, to the best of the reporter's knowledge, 
the statements set forth in the report, including any papers attached to 
or filed with the report, are true and accurate, and that all material 
facts in connection with the report have been set forth.
    (e) Confidentiality of reports. Reports submitted pursuant to this 
section are regarded as privileged and confidential.
    (f) Contents of report. The report must contain the following 
information (with responses numbered to correspond with the numbers used 
below):
    (1) Identification of claimant.
    (i) Claimant's Legal Name.
    (ii) Claimant's Address.
    (iii) Telephone number of individual to contact regarding the 
report.
    (iv) If claimant is a naturalized citizen of the United States, 
state the place and date of naturalization.
    (v) If claimant is a corporation or business, state the place of 
incorporation and principal place of business.
    (2) Information concerning claim.
    (i) Amount of loss in U.S. dollars (indicate exchange or interest 
rates and

[[Page 526]]

relevant dates utilized for any currency translation or interest 
calculation).
    (ii) Describe the circumstances of the loss. Include the date of the 
loss and a description of the property, business, obligation, injury or 
other damage which is the subject of the claim.
    (g) Definition of United States national. For purposes of this 
section, the term United States national or U.S. national means:
    (1) An individual who is a citizen of the United States;
    (2) An individual who, though not a citizen of the United States, 
owes permanent allegiance to the United States, and is not an alien; or
    (3) A partnership, corporation, or other juridical entity organized 
under the laws of the United States or any jurisdiction within the 
United States.
    (h) Definition of the Government of North Korea; North Korean 
government entity. For purposes of this section:
    (1) The term Government of North Korea means the government of the 
territory of Korea north of the 38th parallel of north latitude, 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 as of the 
``effective date.''
    (2) The term North Korean government entity means any corporation, 
partnership, or association, or other organization, wherever organized 
or doing business, that is owned or controlled by the Government of 
North Korea.

[62 FR 64721, Dec. 9, 1997]



                          Subpart G--Penalties

    Source: 63 FR 10324, Mar. 3, 1998, unless otherwise noted.



Sec. 500.701  Penalties.

    (a) Attention is directed to section 16 of the Trading with the 
Enemy Act (50 U.S.C. App. 16--``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.
    (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.
    (3) The Secretary of the Treasury may impose a civil penalty of not 
more than $55,000 per violation on any person who violates any license, 
order, or regulation issued under TWEA.
    (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

[[Page 527]]

under title 18, United States Code, or imprisoned not more than 5 years, 
or both.



Sec. 500.702  Prepenalty notice; contents; respondent's rights; service.

    (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 Trading 
with the Enemy Act, and the Director determines that further proceedings 
are warranted, he or she shall issue to the person concerned a notice of 
his or her intent to impose a monetary penalty and/or forfeiture. 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 and/or 
forfeiture.
    (2) Respondent's rights--(i) Right to respond. The prepenalty notice 
shall also inform the respondent of respondent's right to respond in 
writing to the notice within 30 calendar days of the mailing or other 
service of the notice pursuant to paragraph (c) of this section, as to 
why a monetary penalty and/or forfeiture should not be imposed, or, if 
imposed, why it should be in a lesser amount than proposed.
    (ii) Right to request a hearing. The prepenalty notice shall also 
inform the respondent that, in the response provided for in paragraph 
(b)(2)(i) of this section, the respondent may also request a hearing 
conducted pursuant to 5 U.S.C. 554-557 to present the respondent's 
defenses to the imposition of a penalty and/or forfeiture and to offer 
any other information that the respondent believes should be included in 
the agency record prior to a final determination concerning the 
imposition of a penalty and/or forfeiture. A failure to request a 
hearing within 30 calendar days of service of the prepenalty notice 
constitutes a waiver of a hearing.
    (iii) Right to request discovery prior to hearing. The prepenalty 
notice shall also inform the respondent of the right to discovery prior 
to a requested hearing. Discovery must be requested in writing in the 
response provided for in paragraph (b)(2)(i) of this section, jointly 
with respondent's request for a hearing. A failure to file a request for 
discovery within 30 calendar days of service of the prepenalty notice 
constitutes a waiver of prehearing discovery.
    (c) Service. The prepenalty notice, or any amendment or supplement 
thereto, shall be served upon the respondent. Service shall be presumed 
completed:
    (1) Upon mailing a copy by registered or certified mail, return 
receipt requested, addressed to the respondent at the respondent's last 
known address; or
    (2) Upon the mailing date stated in a date-stamped postal receipt 
presented by the Office of Foreign Assets Control with respect to any 
respondent who has refused, avoided, or in any way attempted to decline 
delivery, tender, or acceptance of the registered or certified letter or 
has refused to recover a registered or certified letter served; or
    (3) Upon personal service by leaving a copy with the respondent or 
an officer, a managing or general agent, or any other agent authorized 
by appointment or by law to accept or receive service for the respondent 
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 prepenalty notice was left; or
    (4) 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 
(c)(1) through (3) of this section inappropriate or ineffective for 
service upon the nonresident respondent.

[[Page 528]]



Sec. 500.703  Response to prepenalty notice; requests for hearing and prehearing discovery; waiver; informal settlement.

    (a) Deadline for response. The respondent shall have 30 calendar 
days from the date of mailing or other service of the prepenalty notice 
pursuant to Sec. 500.702(c) to respond thereto. The response, signed and 
dated, may be sent by facsimile transmission to the Office of Foreign 
Assets Control, at 202/622-1657, or by courier or other expedited means 
at any time during the 30-day response period if an original copy is 
sent concurrently via the U.S. Postal Service, registered or certified 
mail, return receipt requested. The date shown on the date-stamped 
registered or certified mail postal receipt will constitute the filing 
date of the response.
    (b) Form and contents of response--(1) In general. 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 be responsive to the allegations contained 
therein and set forth the nature of the respondent's defenses.
    (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 operate as a denial. Failure to deny, 
controvert, or object to any allegation will be deemed an admission of 
that allegation.
    (ii) The response must also 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 or partial defense 
not specifically set forth in the response shall be deemed waived, and 
evidence thereon may be refused, except for good cause shown.
    (iii) The response must also accurately state, for each respondent, 
the respondent's full name and address for future service, together with 
current telephone and, if applicable, facsimile machine numbers and area 
code. If respondent is represented by counsel, counsel's full name and 
address, together with telephone and facsimile numbers and area code, 
may be provided in lieu of service information for the respondent. The 
respondent or respondent's counsel of record is responsible for 
providing timely written notice to the parties of any subsequent changes 
in the information provided.
    (2) Request for hearing and prehearing discovery; waiver. Any 
request for an administrative hearing and prehearing discovery must be 
made, if at all, in the written response made pursuant to this section 
and within the 30 calendar day period specified in Sec. 500.705(a). A 
failure to request a hearing and prehearing discovery in writing within 
30 calendar days of service of the prepenalty notice constitutes a 
waiver of a hearing and prehearing discovery. A response asserting that 
respondent reserves the right to request a hearing or prehearing 
discovery beyond the 30 calendar day period is ineffectual.
    (3) Informal settlement; response deadline. 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 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 calendar 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. A failure to request a hearing and prehearing 
discovery in writing within 30 calendar days of service of the 
prepenalty notice constitutes a waiver of a hearing and prehearing 
discovery.

[[Page 529]]



Sec. 500.704  Penalty imposition or withdrawal absent a hearing request.

    (a) No violation. If, in the absence of a timely hearing request, 
after considering any response to the prepenalty notice and any relevant 
facts, the Director 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 civil 
monetary penalty or civil forfeiture pursuant to this subpart will be 
imposed.
    (b) Violation. If, in the absence of a timely hearing request, after 
considering any response to the prepenalty notice and any relevant 
facts, the Director 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 by the Office of Foreign Assets 
Control of the civil monetary penalty and/or civil forfeiture and/or 
other available disposition with respect to that respondent.
    (1) The penalty/forfeiture notice shall inform the respondent that 
payment of the assessed penalty must be made within 30 calendar days of 
the mailing of the penalty notice.
    (2) The penalty/forfeiture notice shall inform the respondent of the 
requirement to furnish respondent's taxpayer identification number 
pursuant to 31 U.S.C. 7701 and that the Department intends to use such 
number for the purposes of collecting and reporting on any delinquent 
penalty amount in the event of a failure to pay the penalty imposed.



Sec. 500.705  Time and opportunity to request a hearing.

    (a) Deadline for hearing request. Within 30 calendar days of the 
date of mailing or other service of the prepenalty notice pursuant to 
Sec. 500.702(c), the respondent may file a written request for an agency 
hearing conducted pursuant to this section, to present the respondent's 
defenses to the imposition of a penalty and/or forfeiture and to offer 
any other information for inclusion, if found admissible pursuant to 
Sec. 500.715(a), into the agency record prior to a final determination 
concerning the imposition of a penalty and/or forfeiture.
    (b) Content of written response. If an agency hearing is requested 
by the respondent or by the respondent's counsel, the written hearing 
request must be accompanied by a written response to the prepenalty 
notice containing the information required by Sec. 500.703(b)(1)(i) 
through (iii). An untimely hearing request or written response to the 
prepenalty notice constitutes a waiver of a hearing.
    (c) Signature of filings. All hearing requests, motions, responses, 
interrogatories, requests for deposition transcripts, requests for 
protective orders, and all other filings relating to requests for and 
responses to discovery or pertaining to the hearing process, must be 
signed by each requesting party or, if represented, by each party's 
counsel.
    (d) Computation of time--(1) Final date on weekend or holiday. 
Whenever the final date for any requirement of this part falls on a 
Saturday, Sunday, Federal holiday, or other day on which the Office of 
Foreign Assets Control is not open for the transaction of business 
during normal working hours, the time for filing will be extended to the 
close of business on the next working day.
    (2) Closing time. The time for filing any document expires at 5:00 
p.m. local Washington, DC time on the last day when such filing may be 
made.



Sec. 500.706  Hearing.

    (a) Notice of hearing. (1) Any respondent requesting a hearing shall 
receive notice of the time and place of the hearing at the service 
address provided pursuant to Sec. 500.703(b)(1)(iii). Requests to change 
the time and place of a hearing may be submitted to the Administrative 
Law Judge, who may modify the original notice or subsequently set 
hearing dates. All requests for a change in the time or place of a 
hearing must be received in the Administrative Law Judge's chambers and 
served upon the parties no later than 15 working days before the 
scheduled hearing date.
    (2) The hearing shall be conducted in a manner consistent with 5 
U.S.C. 554-557, pursuant to section 1710(c) of the Cuban Democracy Act 
of 1992 (22 U.S.C.

[[Page 530]]

6001-6010) and section 16 of the Trading with the Enemy Act (50 U.S.C. 
App. 16).
    (b) Powers. The Administrative Law Judge shall have all powers 
necessary to conduct the hearing, consistent with 5 U.S.C. 554-557, 
including the following powers:
    (1) To administer oaths and affirmations;
    (2) To require production of records or any information relative to 
any act or transaction subject to this part, including the imposition of 
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;
    (3) To receive relevant and material evidence and to rule upon the 
admission of evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
part;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling or prehearing conferences as deemed 
necessary;
    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory proceeding, provided that only the 
Secretary or the Secretary's designee shall have the power to grant any 
motion to dismiss the proceeding or to decide any other motion that 
results in a final determination of the merits of the proceeding;
    (8) To prepare and present to the Secretary or to the Secretary's 
designee a recommended decision as provided in Secs. 500.711(d) and 
500.716(e);
    (9) To recuse himself on motion made by a party or on the 
Administrative Law Judge's own motion;
    (10) To establish time, place, and manner limitations on the 
attendance of the public and the media for any public hearing;
    (11) To perform all necessary or appropriate measures to discharge 
the duties of an Administrative Law Judge; and
    (12) To set fees and expenses for witnesses, including expert 
witnesses.
    (c) Appearance and practice in a civil penalty hearing--(1) 
Appearance before an Administrative Law Judge by counsel. Any member in 
good standing of the bar of the highest court of any state, 
commonwealth, possession, or territory of the United States, or the 
District of Columbia may represent respondents upon written notice to 
the Administrative Law Judge in a civil penalty hearing.
    (2) Appearance before an Administrative Law Judge by a nonlawyer. A 
respondent may appear on his own behalf; a duly authorized member of a 
partnership may represent the partnership; a duly authorized officer, 
director, or employee of any corporation may represent that corporation 
upon written notice to the Administrative Law Judge in a civil penalty 
hearing.
    (3) Office of Foreign Assets Control representation. The Office of 
Foreign Assets Control shall be represented by the Office of General 
Counsel of the United States Department of the Treasury.
    (d) Conflicts of interest--(1) Conflict of interest in 
representation. No individual shall appear as counsel for a party in a 
proceeding conducted pursuant to this subpart if it reasonably appears 
that such representation may be materially limited by that counsel's 
responsibilities to a third person, or by counsel's own interests.
    (2) Corrective measures. The 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.
    (e) Ex parte communications--(1) Definition. The term ex parte 
communication means any material oral or written communication not on 
the public record concerning the merits of an adjudicatory proceeding 
with respect to which reasonable prior notice to all parties is not 
given, on any material matter or proceeding covered by these regulations 
that takes place between:
    (i) A party to the proceeding, a party's counsel, or any other 
individual; and
    (ii) The Administrative Law Judge handling that proceeding, or the 
Secretary, or the Secretary's designee.
    (2) Exceptions. (i) A request to learn the status of the proceeding 
does not

[[Page 531]]

constitute an ex parte communication; and
    (ii) Settlement inquiries and discussions do not constitute ex parte 
communications.
    (3) Prohibition on ex parte communications. From the time a 
respondent requests a hearing until the date that the Secretary or the 
Secretary's designee issues a final decision, no party, interested 
person, or counsel therefor shall knowingly make or cause to be made an 
ex parte communication. The Administrative Law Judge, the Secretary, and 
the Secretary's designee shall not knowingly make or cause to be made to 
a party, or to any interested person or counsel therefor, any ex parte 
communication.
    (4) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the Administrative Law Judge, the 
Administrative Law Judge shall cause all 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. All parties to the proceeding shall have an opportunity, 
within 10 calendar days of the receipt of service of the notice or of 
receipt of a memorandum of the ex parte communication, to file responses 
thereto and to recommend any sanctions, in accordance with paragraph 
(e)(5) of this section, appropriate under the circumstances, or may file 
an interlocutory appeal with the Secretary or the Secretary's designee.
    (5) Sanctions. Any party to the proceeding, a party's counsel, or 
any other 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 for good cause shown, or that may be imposed 
upon interlocutory appeal taken to the Secretary or the Secretary's 
designee, including, but not limited to, exclusion from the hearing and 
an adverse ruling on the issue which is the subject of the prohibited 
communication.
    (f) Time limits. Except as provided elsewhere in this subpart, the 
Administrative Law Judge shall establish all time limits for filings 
with regard to hearings conducted pursuant to this subpart, except for 
decisions on interlocutory appeals filed with the Secretary or the 
Secretary's designee.
    (g) Failure to appear. The unexcused failure of a respondent to 
appear in person at a hearing or to have duly authorized counsel appear 
in respondent's place constitutes a waiver of the respondent's right to 
a hearing and is deemed an admission of the violation alleged. Without 
further proceedings or notice to the respondent, the Administrative Law 
Judge shall enter a finding that the right to a hearing was waived, and 
the case shall be determined pursuant to Sec. 500.704.



Sec. 500.707  Interlocutory appeal.

    (a) Interlocutory appeals. When exceptions, requests for extensions, 
or motions, including motions for summary disposition, are denied by the 
Administrative Law Judge, interlocutory appeals may be taken to the 
Secretary or to the Secretary's designee for a decision.
    (b) Filing deadline. Interlocutory appeals must be filed no later 
than 15 calendar days after the matter being appealed has been decided 
in writing by the Administrative Law Judge. Parties may request that the 
Administrative Law Judge transmit the written decision to the parties by 
facsimile transmission, courier, or other expedited means in addition to 
service of the decision via the U.S. Postal Service by registered or 
certified mail, return receipt requested. Such requests must be 
supported by a written statement of need for expedited delivery. Timely 
filing of the interlocutory appeal shall be determined by the date 
stated on the date-stamped registered or certified mail postal receipt.
    (c) Manner of filing. Interlocutory appeals to the Secretary or the 
Secretary's designee must be filed by facsimile transmission to 202/622-
1188, courier, or other expedited means, and sent concurrently by 
registered or certified mail, return receipt requested, to the 
Secretary's Office, U.S. Treasury Department, 1500 Pennsylvania Avenue, 
NW., Washington, DC 20220, with

[[Page 532]]

the envelope prominently marked ``Attention: OFAC Interlocutory 
Appeal.'' Expedited service must also be made upon the Administrative 
Law Judge and all parties or, if represented, their counsel, with 
certified copies sent concurrently by registered or certified mail, 
return receipt requested.



Sec. 500.708  Settlement during hearing proceedings.

    Any party may, at any time during the hearing, unilaterally submit 
written offers or proposals for settlement of a proceeding to the 
Secretary or the Secretary's designee, at the address listed in 
Sec. 500.707(c). Submission of a written settlement offer does not 
provide a basis for adjourning or otherwise delaying all or any portion 
of a hearing. No settlement offer or proposal, nor any subsequent 
negotiation or resolution, is admissible as evidence in any hearing 
before this tribunal.



Sec. 500.709  Motions.

    (a) Written motions. Except as otherwise specifically provided 
herein, an application or request for an order or ruling must be made by 
written motion, in typed format.
    (1) All written motions must state with particularity the relief 
sought and must be accompanied by a proposed order.
    (2) No oral argument may be held on written motions unless directed 
by the Administrative Law Judge. Written memoranda, briefs, affidavits, 
and other relevant material and documents may be filed in support of or 
in opposition to a motion.
    (b) Oral motions. A motion may be made orally on the record unless 
the Administrative Law Judge directs that such motion be made in 
writing.
    (c) Filing of motions--(1) In general. Motions by respondents must 
be filed with the Administrative Law Judge and served upon the Office of 
the Chief Counsel, Foreign Assets Control, U.S. Treasury Department, 
1500 Pennsylvania Avenue, NW., Washington, DC 20220, with the envelope 
prominently marked ``Urgent: Annex--Room 3133,'' unless otherwise 
directed by the Administrative Law Judge. Motions by the Office of 
Foreign Assets Control must be filed with the Administrative Law Judge 
and with each respondent or respondent's counsel. Motions may also be 
concurrently sent by facsimile transmission, courier, or other expedited 
means.
    (2) Interlocutory appeals. Motions related to interlocutory appeals 
to the Secretary or the Secretary's designee must be filed by facsimile 
transmission to 202/622-1188, by courier, or by other expedited means, 
and sent concurrently by registered or certified mail, return receipt 
requested, to the Secretary's Office, U.S. Treasury Department, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220, with the envelope 
prominently marked ``Attention: OFAC Interlocutory Appeal.'' Expedited 
service must also be made upon the Administrative Law Judge and all 
parties or, if represented, their counsel, with certified copies sent 
concurrently by registered or certified mail, return receipt requested.
    (d) Responses. (1) Any party may file a written response to a motion 
within 20 calendar days of the date of its mailing, by registered or 
certified mail pursuant to this subpart. If directed by the 
Administrative Law Judge, the time period in which to respond may be 
shortened or extended. The Administrative Law Judge may allow each party 
to file a response before finally ruling upon any oral or written 
motion. The Administrative Law Judge may allow a rejoinder to responses 
for good cause shown. If a rejoinder is permitted, it must be filed 
within 15 calendar days of the date the response was filed and served 
upon all parties.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed to be consent by that party to the 
entry of an order substantially in the form of any proposed order 
accompanying the motion.
    (e) Dilatory motions. Frivolous, dilatory, or repetitive motions are 
prohibited. The filing of such motions may form the basis for sanctions.



Sec. 500.710  Discovery.

    (a) In general. The availability of information and documents 
through discovery is subject to the agency's assertion of privileges 
available to OFAC and/or to the Treasury and to the application of all 
exemptions afforded the

[[Page 533]]

agency 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) to all facets of 
discovery, including interrogatories, depositions that seek the release 
of trade secrets, proprietary materials, third-party confidential and/or 
commercially sensitive materials, placement of information, documents 
and/or materials under seal and/or protective order, and interlocutory 
appeals to the Secretary or the Secretary's designee from any decision 
of the Administrative Law Judge.
    (b) Types of discovery. Parties may obtain discovery by one or more 
of the following methods: depositions upon oral examination or written 
questions; written interrogatories; 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 U.S. 
Treasury Department or at the location where the Federal employee to be 
deposed performs his duties, whichever the Federal employee's supervisor 
or the Office of the Chief Counsel, Foreign Assets Control shall deem 
appropriate. All depositions of Federal employees shall be held at a 
mutually agreed upon date and time, and for a mutually agreed upon 
length of time.
    (c) Interrogatories. Respondent's interrogatories must be served 
upon the Office of the Chief Counsel, Foreign Assets Control within 20 
calendar days of respondent's written request for a hearing. The Office 
of Foreign Assets Control's interrogatories must be served within 30 
calendar days of the receipt of service of respondent's interrogatories 
or within 30 calendar days of the receipt of respondent's written 
request for a hearing if no interrogatories are filed by respondent by 
that time. Parties have 30 calendar days to respond to interrogatories 
from 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.
    (d) Scope. Parties may obtain discovery regarding any matter not 
privileged which has material relevance to the merits of the pending 
action. It is not a ground for objection that the information sought 
will be inadmissible at the hearing if the information sought appears 
reasonably calculated to lead to discovery of admissible evidence. The 
Administrative Law Judge may make any order which justice requires to 
ensure that requests are not unreasonable, oppressive, excessive in 
scope or unduly burdensome, including the issuance of an order to show 
cause why a particular discovery request is justified upon the motion of 
the objecting party.
    (e) Privileged matter. Privileged documents are not discoverable. 
Privileges include, inter alia, 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 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) and the Freedom of Information Act (5 
U.S.C. 552(b)(1) through (9)).
    (f) Updating discovery. Whenever a party receives new or additional 
information or documentation, all information produced, and all 
information required to be provided pursuant to the discovery and 
hearing process, must automatically be updated. The Administrative Law 
Judge may impose sanctions for failure to update, including prohibiting 
opposition to claims or defenses raised, striking pleadings or staying 
proceedings, dismissing the action or any part thereof, rendering a 
judgment by default, and holding a party in contempt.
    (g) Time limits. All discovery, including all responses to discovery 
requests, shall be completed no later than 20 calendar days prior to the 
date scheduled for the commencement of the hearing. No exceptions to 
this time limit shall

[[Page 534]]

be permitted, unless the Administrative Law Judge finds on the record 
that good cause exists for waiving the requirements of this paragraph 
(g).



Sec. 500.711  Summary disposition.

    (a) In general. The Administrative Law Judge shall recommend that 
the Secretary or the Secretary's designee issue a final order granting a 
motion for summary disposition if the facts of the record show that:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party is entitled to a decision in its favor as a 
matter of law.
    (b) Filing of motions and responses. (1) Any party who believes that 
there is no genuine issue of material fact to be determined and that 
such party is entitled to a decision as a matter of law may move at any 
time for summary disposition in its favor of all or any part of the 
proceeding. Any party, within 20 calendar days after service of such a 
motion, or within such time period as allowed by the Administrative Law 
Judge, may file a response to such motion.
    (2) 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.
    (c) Hearing on motion. At the request of any party or on his or her 
own motion, the Administrative Law Judge may hear oral argument on the 
motion for summary disposition.
    (d) Decision on motion. Following receipt of a motion for summary 
disposition and all responses thereto, the Administrative Law Judge 
shall determine whether the moving party is entitled to summary 
disposition. If the Administrative Law Judge determines that summary 
disposition is warranted, he or she shall submit a recommended decision 
to that effect to the Secretary. If the Administrative Law Judge finds 
that no party is entitled to summary disposition, he or she shall make a 
ruling denying the motion.
    (e) Interlocutory appeal. Following receipt of the Administrative 
Law Judge's recommended decision relating to summary disposition, each 
party has the right to an interlocutory appeal to the Secretary or the 
Secretary's designee. The interlocutory appeal must be filed within 20 
calendar days immediately following the Administrative Law Judge's 
recommended decision.
    (f) Partial summary disposition. If the Administrative Law Judge 
determines that a party is entitled to summary disposition as to certain 
claims only, the Administrative Law Judge shall defer submission of a 
recommended decision as to those claims. A hearing on the remaining 
issues must be ordered and those claims for which the Administrative Law 
Judge has determined that summary disposition is warranted will be 
addressed in the recommended decision filed at the conclusion of the 
hearing.



Sec. 500.712  Prehearing conferences and submissions.

    (a) Prehearing conferences. The Administrative Law Judge may, on his 
or her own motion, or at the request of any party for good cause shown, 
direct counsel for the parties to meet with him or her (in person, by 
telephone, or by teleconference) at a prehearing conference to address 
any or all of the following:
    (1) Simplification and clarification of the issues;
    (2) Stipulations, admissions of fact, and the contents, authenticity 
and admissibility into evidence of documents;

[[Page 535]]

    (3) Matters of which official notice may be taken;
    (4) Limitation of the number of witnesses;
    (5) Summary disposition of any or all issues;
    (6) Resolution of discovery issues or disputes; and
    (7) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (b) Prehearing orders. At, or within a reasonable time following the 
conclusion of, any prehearing conference, the Administrative Law Judge 
shall serve on each party an order setting forth any agreements reached 
and any procedural determinations made.
    (c) Prehearing submissions. Within 40 calendar days of the receipt 
of respondent's request for a hearing or at a time set by the 
Administrative Law Judge, the Office of Foreign Assets Control shall 
serve on the respondent and upon the Administrative Law Judge, the 
following:
    (1) Stipulations of fact, if any;
    (2) A list of the exhibits to be introduced at the hearing along 
with a copy of each exhibit; and
    (3) A list of witnesses to be called to testify at the hearing, 
including the name and address of each witness and a short summary of 
the expected testimony of each witness.
    (d) Deadline for respondent's and the other parties' submissions. 
Unless for good cause shown the Administrative Law Judge permits an 
extension of time to file, the respondent and the other parties shall 
have 20 calendar days from the date of the submission by the Office of 
Foreign Assets Control of the items set forth in paragraph (c) of this 
section, and/or of any other party's service of items set forth in this 
paragraph (d), to serve upon the Administrative Law Judge and all 
parties, the following:
    (1) Its response to stipulations of fact, if any;
    (2) A list of the exhibits to be introduced at the hearing along 
with a copy of each exhibit; and
    (3) A list of witnesses to be called to testify at the hearing, 
including the name and address of each witness and a short summary of 
the expected testimony of each witness.
    (e) Effect of failure to comply. No witness may testify and no 
exhibits may be introduced at the hearing if such witness or exhibit is 
not listed in the prehearing submissions pursuant to paragraphs (c) and 
(d) of this section, except for good cause shown.



Sec. 500.713  Public hearings.

    (a) In general. All hearings shall be open to the public, unless the 
Administrative Law Judge, at his or her discretion, determines at any 
time prior to or during the hearing, that holding an open hearing would 
be contrary to the public interest. Within 20 calendar days of service 
of the notice of hearing from the Administrative Law Judge, any party 
may file with the Administrative Law Judge a request for a closed 
hearing, and any party may file a pleading in reply to such a request. 
Failure to file a request or a reply is deemed a waiver of any 
objections regarding whether the hearing will be public or closed.
    (b) Filing document under seal. (1) The Office of Foreign Assets 
Control may file any document or any part of a document under seal 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 or other Executive orders concerning disclosure of information, 
U.S. Treasury Department regulations, the Privacy Act, or the Freedom of 
Information Act.
    (2) The Administrative Law Judge shall also safeguard the security 
and integrity of any documents under seal and shall take all appropriate 
steps to preserve the confidentiality of such documents or any parts 
thereof, including closing portions of the hearing to the public. 
Release of any information under seal, in any form or manner, is subject 
to the same sanctions and the exercise of the same authorities as are 
provided with respect to ex parte communications under paragraph (e)(5) 
of this section.

[[Page 536]]

    (3) Should the Administrative Law Judge deny placement of any 
documents under seal or under protective order, any party, and any 
person whose documents or materials are at issue, may file an 
interlocutory appeal to the Secretary or the Secretary's designee. In 
such cases the Administrative Law Judge must not release or expose any 
of the records or documents in question to the public or to any other 
parties for a period of 20 calendar days from the date of the 
Administrative Law Judge's ruling, in order to permit a petitioner the 
opportunity either to withdraw the records and documents or to file an 
interlocutory appeal with the Secretary or the Secretary's designee 
requesting an order that the records be placed under seal.
    (4) 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 respective 
parties, except when it may be necessary to retain a record until the 
judicial process is completed.
    (5) Written notice of all requests for release of protected 
documents or materials shall be given to the parties registered with the 
Administrative Law Judge at least 20 calendar days prior to any 
permitted release and prior to any access not specifically authorized 
under the protective order. A copy of all requests for information, 
including the name, address, and telephone number of the requester, 
shall be provided to the petitioner. Each request for access to 
protected material must also provide the names, addresses, and telephone 
numbers of all persons represented by the requester, including those on 
whose behalf the requester seeks access to protected information. The 
Administrative Law Judge shall impose sanctions provided under 
Sec. 500.706(e)(4) and (e)(5) for failure to provide this information.



Sec. 500.714  Conduct of hearings.

    (a) In general--(1) Overview. Hearings shall be conducted to provide 
a fair and expeditious presentation of the relevant disputed issues and 
facts. 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.
    (2) Order of hearing. The Office of Foreign Assets Control shall 
present its case-in-chief first, unless otherwise ordered in advance by 
the Administrative Law Judge or otherwise expressly specified by law or 
regulation. The Office of Foreign Assets Control 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.
    (3) Stipulations. Unless the Administrative Law Judge directs 
otherwise, all stipulations of fact and law previously agreed upon by 
the parties, and all documents, the admissibility of which has been 
previously stipulated, will be admitted into evidence upon commencement 
of the hearing.
    (b) Transcript. A record of the hearing shall be made by manual or 
electronic means, including through the use of audio recorded diskettes 
or audio-visual cassettes, and transcribed unless the Administrative Law 
Judge rules otherwise. The transcript shall be made available to any 
party upon payment of the cost thereof. The Administrative Law Judge 
shall have authority to order the record corrected, either upon a motion 
to correct, upon a motion to stipulate by the parties for good cause 
shown, or following notice to the parties upon the Administrative Law 
Judge's own motion. The Administrative Law Judge shall serve notice upon 
all parties, at the addresses provided by the parties pursuant to 
Sec. 500.703(b)(1)(iii), that the certified transcript, together with 
all hearing exhibits and exhibits introduced but not admitted into 
evidence at the hearing, has been filed with the Administrative Law 
Judge.



Sec. 500.715  Evidence.

    (a) Admissibility. (1) Except as is otherwise set forth in this 
section, evidence that is relevant and material is admissible to the 
fullest extent authorized by the Administrative Procedure Act and other 
applicable law.
    (2) Evidence may be excluded if it is misleading or its probative 
value is substantially outweighed by the danger of unfair prejudice or 
confusion of the issues, or considerations of undue

[[Page 537]]

delay, waste of time, or needless presentation of cumulative evidence.
    (3) Evidence that would be inadmissible under the Federal Rules of 
Evidence need not be deemed or ruled to be inadmissible in a proceeding 
conducted pursuant to this subpart if such evidence is relevant and 
material, and not unduly repetitive.
    (b) Official notice. (1) Official notice may be taken of any 
material fact which may be judicially noticed by a United States 
district court.
    (2) All matters officially noticed by the Administrative Law Judge 
shall appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, shall be afforded an opportunity to 
object.
    (c) Duplicate copies. A duplicate copy of a document is admissible 
to the same extent as the original, unless a genuine issue is raised as 
to whether the copy is in some material respect not a true and legible 
copy of the original.
    (d) Objections to admissibility of evidence. Objections to the 
admissibility of evidence must be timely made and rulings on all 
objections must appear on the record. Failure to object to admission of 
evidence or to any ruling constitutes a waiver of the objection.
    (e) Rejected exhibits. The Administrative Law Judge shall retain 
rejected exhibits, adequately marked for identification, in the event of 
an interlocutory appeal.
    (f) Stipulations. The parties may stipulate as to any relevant 
matters of fact or to the authenticity of any relevant documents. Such 
stipulations may be received into evidence at a hearing and are binding 
on the parties with respect to the matters therein stipulated.
    (g) Depositions of unavailable witnesses. If a witness is 
unavailable to testify at a hearing, and that witness has testified in a 
deposition within the United States to which all parties to the 
proceeding have received timely notice and an opportunity to 
participate, a party may offer as evidence all or any part of the 
transcript of the deposition, including deposition exhibits. All costs 
of depositions shall be borne by the party requesting the deposition.



Sec. 500.716  Proposed decisions; recommended decision of Administrative Law Judge; final decision.

    (a) Proposed decisions. Any party may file with the Administrative 
Law Judge a proposed decision within 30 calendar days after the parties 
have received notice that the transcript has been filed with the 
Administrative Law Judge, unless otherwise ordered by the Administrative 
Law Judge.
    (b) Reliance on relevant authorities. The proposed decision must be 
supported by citation to relevant authorities and by transcript page 
references to any relevant portions of the record. At the same time the 
proposed decision is filed, a post-hearing brief may be filed in 
support. The post-hearing brief shall be filed either as part of the 
same document or in a separate document.
    (c) Reply briefs. Reply briefs may be filed within 15 calendar days 
after the date on which the parties' proposed decision is due. Reply 
briefs must be strictly limited to responding to new matters, issues, or 
arguments raised in another party's papers. A party who has not filed a 
proposed decision or a post-hearing brief may not file a reply brief.
    (d) Simultaneous filing required. Absent a showing of good cause for 
the use of another procedure, the Administrative Law Judge shall not 
order the filing by any party of any brief or reply brief in advance of 
the other party's filing of its brief.
    (e) Recommended decision and filing of record. Within 45 calendar 
days after expiration of the time allowed for filing reply briefs, the 
Administrative Law Judge shall file with and certify to the Secretary or 
the Secretary's designee the record of the proceeding and the decision. 
The record must include the Administrative Law Judge's recommended 
decision, including a determination either that there was no violation 
by the person named in the prepenalty notice, or that there was a 
violation by the person named in the prepenalty notice, and the 
recommended monetary penalty and/or civil forfeiture and/or other 
disposition available to the Office of Foreign Assets Control. In 
addition to the proposed decision, the record must include all 
prehearing and hearing transcripts,

[[Page 538]]

exhibits, and rulings, and the motions, briefs, memoranda, and other 
supporting papers filed in connection with the hearing. The 
Administrative Law Judge shall have the recommended decision served upon 
each party.
    (f) Exceptions to the recommended decision. When the Administrative 
Law Judge has issued his recommended decision, the Administrative Law 
Judge or his representative shall contact each party by telephone at the 
telephone number provided by each party pursuant to 
Sec. 500.703(b)(1)(iii). Within 3 calendar days of telephoning the 
parties, the recommended decision shall be mailed by the Administrative 
Law Judge to the parties. A party may file written exceptions to the 
recommended decision with the Secretary or the Secretary's designee 
within 30 calendar days of the date the telephone call is placed by the 
Administrative Law Judge or his representative. A supporting brief may 
be filed at the time the exceptions are filed.
    (g) Final decision. The final decision of the Secretary or the 
Secretary's designee shall be based on a review of the Administrative 
Law Judge's recommended decision and the entire record of the 
proceeding. The final written decision shall be provided to all parties.



Sec. 500.717  Judicial review.

    Any person may seek judicial review as provided under 5 U.S.C. 702 
for a penalty and/or forfeiture imposed pursuant to this part.



Sec. 500.718  Referral to United States Department of Justice; administrative collection measures.

    In the event that the respondent does not pay the 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.



                          Subpart H--Procedures



Sec. 500.801  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 
subpart D of part 501 of this chapter.

[62 FR 45101, Aug. 25, 1997]



Sec. 500.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to the Trading With the Enemy Act may be taken by any person to 
whom the Secretary of the Treasury has delegated authority so to act.

[15 FR 9040, Dec. 19, 1950. Redesignated at 62 FR 45101, Aug. 25, 1997]



Sec. 500.803  Customs procedures; merchandise specified in Sec. 500.204.

    (a) With respect to merchandise specified in Sec. 500.204, whether 
or not such merchandise has been imported into the United States, 
directors of customs shall not accept or allow any:
    (1) Entry for consumption (including any appraisement entry, any 
entry of goods imported in the mails, regardless of value, or any other 
informal entries);
    (2) Entry for immediate exportation;
    (3) Entry for transportation and exportation;
    (4) Withdrawal from warehouse;
    (5) Transfer or withdrawal from a foreign-trade zone; or
    (6) Manipulation or manufacture in a warehouse or in a foreign-trade 
zone, until either;
    (i) A specific license pursuant to this chapter is presented; or,
    (ii) Instructions from the Foreign Assets Control, authorizing the 
transaction are received.
    (b) Whenever a specific license is presented to a director of 
customs in accordance with this section, one additional legible copy of 
the entry, withdrawal or other appropriate document

[[Page 539]]

with respect to the merchandise involved shall be filed with the 
director of customs at the port where the transaction is to take place. 
Each copy of any such entry, withdrawal or other appropriate document, 
including the additional copy, shall bear plainly on its face the number 
of the license pursuant to which it is filed. The original copy of the 
specific license shall be presented to the director in respect to each 
such transaction and shall bear a notation in ink by the licensee or 
person presenting the license showing the description, quantity, and 
value of the merchandise to be entered, withdrawn or otherwise dealt 
with. This notation should be so placed and so written that there will 
exist no possibility of confusing it with anything placed on the license 
at the time of its issuance. If the license in fact authorizes the 
entry, withdrawal or other transaction with regard to the merchandise, 
the director, or other authorized customs employee, shall verify the 
notation by signing or initialing it after first assuring himself that 
it accurately describes the merchandise it purports to represent. The 
license shall thereafter be returned to the person presenting it and the 
additional copy of the entry, withdrawal or other appropriate document 
shall be forwarded by the director to the Office of Foreign Assets 
Control, Treasury Department, Washington, DC 20220.
    (c) Whenever a person shall present an entry, withdrawal or other 
appropriate document affected by this section and shall assert that no 
specific Foreign Assets Control license is required in connection 
therewith, the director of customs shall withhold action thereon and 
shall advise such person to communicate directly with the Office of 
Foreign Assets Control to request that instructions be issued to the 
director to authorize him to take action with regard thereto.

[40 FR 7651, Feb. 21, 1975, as amended at 57 FR 1387, Jan. 14, 1992. 
Redesignated at 62 FR 45101, Aug. 25, 1997]



                   Subpart I--Miscellaneous Provisions



Sec. 500.901  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. The information collection requirement in Sec. 500.602 
has been approved by the Office of Management and Budget and assigned 
control number 1505-0160.

[62 FR 45101, Aug. 25, 1997, as amended at 62 FR 64722, Dec. 9, 1997]

      Appendix A to Part 500--Qualifying International Institutions

Asian Development Bank (ADB)
Food and Agricultural Organization (FAO)
International Bank for Reconstruction and Development (IBRD, the ``World 
Bank'')
International Civil Aviation Organization (ICAO)
International Development Association (IDA)
International Finance Corporation (IFC)
International Fund for Agricultural Development (IFAD)
International Labor Organization (ILO)
International Maritime Organization (IMO)
International Monetary Fund (IMF)
Multilateral Investment Guarantee Association (MIGA)
UN Capital Development Fund (UNCDF)
UN Children's Fund (UNICEF)
UN Development Fund for Women (UNDFW)
UN Development Program (UNDP)
UN Economic & Social Commission for Asian and the Pacific (UNESCAP)
UN Education, Scientific and Cultural Organization (UNESCO)
UN Environment Program (UNEP)
UN Food Program (UNFP)
UN Industrial Development Organization (UNIDO)
UN International Drug Control Program (UNIDCP)
UN Population Fund (UNPF)

[[Page 540]]

World Health Organization (WHO)
World Meteorological Organization (WMO)

[58 FR 68532, Dec. 28, 1993]



PART 501--REPORTING AND PROCEDURES 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--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 removal of names from appendices A, B, and 
          C to this chapter.
501.808  License application and other procedures applicable to economic 
          sanctions programs.

                   Subpart E--Paperwork Reduction Act

501.901  Paperwork Reduction Act notice.

    Authority: 21 U.S.C. 1901-1908; 22 U.S.C. 287c; 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

[[Page 541]]

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 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

[[Page 542]]

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 calling the fax-on-demand service maintained by the Office 
of Foreign Assets Control at 202/622-0077, or by downloading the form 
from the ``OFAC Press Releases and Miscellaneous Documents'' file 
library (``FAC'72'--MISC'') located on the Government 
Printing Office's Federal Bulletin Board Online via GPO Access (Internet 
site: http://fedbbs.access.gpo.gov/libs/fac'72'--misc.htm). 
Photocopies of the report form may be used. Requests to submit the 
information required on Form TDF 90-22.50 in an alternative format 
developed by the reporter are invited and will be considered by the 
Office of Foreign Assets Control on a case-by-case basis. 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]



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

[[Page 543]]

institutions involved in the transaction is a blocked person;
    (2) Sending funds to a person in Iraq;
    (3) Transferring unlicensed gifts or charitable donations from the 
Government of Syria or Sudan to a U.S. person;
    (4) Crediting Iranian accounts on the books of a U.S. financial 
institution; and
    (5) 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.



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);
    (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

[[Page 544]]

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--Procedures



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. All 
such licenses are set forth in subpart E of each part contained in this 
chapter. 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 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 Internet Home 
Page: http://www.treas.gov/ofac, the OFAC fax-on-demand service: 202/
622-0077, or the Compliance Programs Division, Office of Foreign Assets 
Control, Department of the Treasury, 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

[[Page 545]]

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 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

[[Page 546]]

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 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]



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 (a) of Sec. 501.805:
    Records or information obtained or created in the implementation of 
part 598 of this chapter are not subject to disclosure under section

[[Page 547]]

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.

[62 FR 45101, Aug. 25, 1997, as amended at 65 FR 41335, July 5, 2000]



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.);
    (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]

[[Page 548]]



Sec. 501.807  Procedures governing removal of names from appendices A, B, and C to this chapter.

    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 E--Paperwork Reduction Act



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.



PART 505--REGULATIONS PROHIBITING TRANSACTIONS INVOLVING THE SHIPMENT OF CERTAIN MERCHANDISE BETWEEN FOREIGN COUNTRIES--Table of Contents




Sec.
505.01  Short title.
505.10  Prohibitions.
505.20  Definitions.
505.30  Licenses.
505.31  General license for offshore transactions from certain 
          countries.
505.40  Records and reports.
505.50  Penalties.
505.60  Procedures.

    Authority: 31 U.S.C. 321(b); 50 U.S.C. App. 1-44; Pub. L. 101-410, 
104 Stat. 890 (28 U.S.C. 2461 note); 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.

[[Page 549]]


    Source: 18 FR 4291, July 23, 1953, unless otherwise noted.



Sec. 505.01  Short title.

    The regulations in this part may be referred to as the Transaction 
Control Regulations.

[19 FR 5483, Aug. 27, 1954]



Sec. 505.10  Prohibitions.

    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 
within the United States, for his own account or that of another, may 
purchase or sell or arrange the purchase or sale of any merchandise in 
any foreign country or obtain from any banking institution a credit or 
payment in connection therewith, or attempt to do any of the foregoing, 
if:
    (a) The transaction involves the shipment from any foreign country 
of any merchandise directly or indirectly to any destination within a 
country on the attached schedule, and
    (b) The merchandise is 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 the Atomic 
Energy Act of 1954, 42 U.S.C. 2011-2297g-4, or successor acts 
restricting the esportation of strategic goods.

                                Schedule

Albania
Bulgaria
Cambodia
The Czech Republic
Estonia
Latvia
Lithuania
North Korea
Mongolia
People's Republic of China
Poland
Romania
The Slovak Republic
The geographic area formerly known as the Union of Soviet Socialist 
Republics
Vietnam

[30 FR 1284, Feb. 6, 1965, as amended at 50 FR 27437, July 3, 1985; 56 
FR 45895, Sept. 9, 1991; 58 FR 13198, Mar. 10, 1993; 60 FR 34144, June 
30, 1995]



Sec. 505.20  Definitions.

    The definitions contained in subpart C, part 500 of this chapter are 
applicable to any terms therein defined which are used in this part.

[19 FR 5483, Aug. 27, 1954]



Sec. 505.30  Licenses.

    No regulation, ruling, instruction or license authorizes a 
transaction prohibited by Sec. 505.10 unless the regulation, ruling, 
instruction or license is issued by the Treasury Department and 
specifically refers to that section.



Sec. 505.31  General license for offshore transactions from certain countries.

    (a) Except as provided in paragraph (b) of this section, all 
transactions prohibited by Sec. 505.10 are hereby authorized provided:
    (1) Shipment is to a country listed in the schedule to Sec. 505.10, 
other than North Korea; and
    (2) Shipment is made from and licensed by one of the following 
foreign countries: Australia, Austria, Belgium, Canada, Denmark, France, 
Finland, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Luxembourg, 
The Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, 
Switzerland, Turkey, or the United Kingdom.
    (b) This section does not authorize any transactions otherwise 
prohibited by this chapter.

[37 FR 3520, Feb. 17, 1972, as amended at 41 FR 16557, Apr. 20, 1976; 56 
FR 45895, Sept. 9, 1991; 58 FR 13198, Mar. 10, 1993]



Sec. 505.40  Records and reports.

    For provisions relating to records and reports, see Secs. 501.601 
and 501.602 of this chapter.

[18 FR 4291, July 23, 1953, as amended at 62 FR 45106, Aug. 25, 1997]



Sec. 505.50  Penalties.

    For provisions relating to penalties, see subpart G of part 500 of 
this chapter.

[63 FR 10331, Mar. 3, 1998]



Sec. 505.60  Procedures.

    For license application procedures and procedures relating to 
amendments, modifications, or revocations of

[[Page 550]]

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 Sec. 500.802 and subpart D of part 501 of this 
chapter.

[62 FR 45106, Aug. 25, 1997]



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.
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.

                       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  Exclusion from authorization in Sec. 515.518.
515.413  [Reserved]
515.415  Travel to Cuba; transportation of certain Cuban nationals.
515.416-515.417  [Reserved]
515.418  Transactions related to telecommunications.
515.419  [Reserved]
515.420  Fully-hosted travel to Cuba.

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

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 persons 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.

[[Page 551]]

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  U.S. assets of certain Cuban decedents.
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 by operation of law.
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.
515.531  Payment of certain checks and drafts.
515.532  Completion of certain securities transactions.
515.533   Transactions incident to exportations from the United States 
          and reexportations of U.S.-origin items to Cuba.
515.535  Exchange of certain securities.
515.536  Certain transactions with respect to merchandise affected by 
          Sec. 515.204.
515.540  [Reserved]
515.542  Telecommunications, information, and informational materials.
515.543  Proof of origin.
515.544  Gifts of Cuban origin goods.
515.545  Transactions related to information and informational 
          materials.
515.546  Accounts of Cuban sole proprietorships.
515.547  Research samples.
515.548  Services rendered by Cuba to United States aircraft.
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 transactions by U.S.-owned or controlled foreign firms 
          with Cuba.
515.560  Travel-related transactions to, from, and within Cuba by 
          persons subject to U.S. jurisdiction.
515.561  Persons visiting family members in Cuba.
515.562  Officials of the U.S. government, foreign governments, and 
          certain intergovernmental organizations traveling to, from, 
          and within Cuba on official business.
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 to nationals of Cuba.
515.571  Certain transactions incident to travel to, from, and within 
          the United States by Cuban nationals.
515.572  Authorization of transactions incident to the provision of 
          travel services, carrier services, and remittance forwarding 
          services.
515.573  Transactions by news organizations.
515.574  Support for the Cuban people.
515.575  Humanitarian projects.
515.576  Activities of private foundations or research or educational 
          institutes.

                           Subpart F--Reports

515.601  Records and reports.

                          Subpart G--Penalties

515.701  Penalties.
515.702  Prepenalty notice; contents; respondent's rights; service.
515.703  Response to prepenalty notice; requests for hearing and 
          prehearing discovery; waiver; informal settlement.
515.704  Penalty imposition or withdrawal absent a hearing request.
515.705  Time and opportunity to request a hearing.
515.706  Hearing.
515.707  Interlocutory appeal.

[[Page 552]]

515.708  Settlement during hearing proceedings.
515.709  Motions.
515.710  Discovery.
515.711  Summary disposition.
515.712  Prehearing conferences and submissions.
515.713  Public hearings.
515.714  Conduct of hearings.
515.715  Evidence.
515.716  Proposed decisions; recommended decision of Administrative Law 
          Judge; final decision.
515.717  Judicial review.
515.718  Referral to United States Department of Justice; administrative 
          collection measures.

                          Subpart H--Procedures

515.801  Procedures.
515.802  Delegation by the Secretary of the Treasury.
515.803  Customs procedures; merchandise specified in Sec. 515.204.

                   Subpart I--Miscellaneous Provisions

515.901  Paperwork Reduction Act notice.

    Authority: 18 U.S.C. 2332d; 22 U.S.C. 2370(a), 6001-6010; 31 U.S.C. 
321(b); 50 U.S.C. App. 1-44; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 
2461 note); Pub. L. 106-387, 114 Stat. 1549; E.O. 9193, 7 FR 5205, 3 
CFR, 1938-1943 Comp., p. 1147; 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 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

[[Page 553]]

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 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

[[Page 554]]

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.
    (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

[[Page 555]]

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) 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

[[Page 556]]

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 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.

    Example #1: A U.S. publisher ships 500 copies of a book to Cuba 
directly from Miami aboard a chartered aircraft, and receives payment by 
means of a letter of credit issued by a Cuban bank and confirmed by an 
American bank. These are permissible transactions under this section.
    Example #2: A Cuban party exports a single master copy of a Cuban 
motion picture to a U.S. party and licenses the U.S. party to duplicate, 
distribute, show and exploit in the United States the Cuban film in any 
medium, including home video distribution, for five years, with the 
Cuban party receiving 40% of the net income. All transactions relating 
to the activities described in this example are authorized under this 
section or Sec. 515.545.
    Example #3: A U.S. recording company proposes to contract with a 
Cuban musician to create certain musical compositions, and to advance 
royalties of $10,000 to the musician. The music written in Cuba is to be 
recorded in a studio that the recording company owns in the Bahamas. 
These are all prohibited transactions. The U.S. party is prohibited 
under Sec. 515.201 from contracting for the Cuban musician's services, 
from transferring $10,000 to Cuba to pay for those services, and from 
providing the Cuban with production services through the use of its 
studio in the Bahamas. No information or informational materials are in 
being at the time of these proposed transactions. However, the U.S. 
recording company may contract to purchase and import preexisting 
recordings by the Cuban musician, or to copy the recordings in the 
United States and pay negotiated royalties to Cuba under this section or 
Sec. 515.545.
    Example #4: A Cuban party enters into a subpublication agreement 
licensing a U.S. party to print and publish copies of a musicial 
composition and to sub-license rights of public performance, adaptation, 
and arrangement of the musical composition, with payment to be a 
percentage of income received. All transactions related to the 
activities described in this example are authorized under this section 
and Sec. 515.545, except

[[Page 557]]

for adaptation, and arrangement, which constitute artistic enhancement 
of the Cuban composition. Payment to the Cuban party may not reflect 
income received as a result of these enhancements.

    (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]



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 certain vessels engaged in licensed or exempt trade 
with Cuba, see Sec. 515.550.


[58 FR 34710, June 29, 1993, as amended at 66 FR 36687, July 12, 2001]



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 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 shall include:
    (1) A subject or citizen of a 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 resident or 
domiciled there in the service of the U.S. Government.
    (2) Any partnership, association, corporation, or other 
organization, organized under the laws of, or which on or since the 
``effective date'' had or has had its principal place of business in a 
foreign country, or which on or since such effective date was or has 
been controlled by, or a substantial part of the stock, shares, bonds, 
debentures, notes, drafts, or other securities or obligations of which, 
was or has been owned or controlled by, directly or indirectly, a 
foreign country and/or one

[[Page 558]]

or more nationals thereof as defined in this section.
    (3) Any person to the extent that such person is or has been, since 
the ``effective date'' acting or purporting to act directly or 
indirectly for the benefit or on behalf of any national of a foreign 
country.
    (4) 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]



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,
    (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 appendices at the end of 
this chapter for listings of persons designated pursuant to this part. 
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]



Sec. 515.307  Unblocked national.

    Any person licensed pursuant to Sec. 515.505 licensed as an 
unblocked national shall, while so licensed, be regarded as a person 
within the United States who is not a national of any designated foreign 
country: Provided, however, That the licensing of any person as an 
unblocked national shall not be

[[Page 559]]

deemed to suspend in any way the requirements of any section of this 
chapter relating to reports, or the production of books, documents, and 
records specified therein.

[28 FR 6974, July 9, 1963, as amended at 54 FR 5233, Feb. 2, 1989]



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 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.

[[Page 560]]



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 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

[[Page 561]]

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.

    The term person subject to the jurisdiction of the United States 
includes:
    (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 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, or association, wherever organized 
or doing business, that is owned or controlled by persons specified in 
paragraph (a) or (c) of this section.

[50 FR 27437, July 3, 1985]



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



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

[[Page 562]]

    (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:
    (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]



                       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.

[[Page 563]]



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 
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.

    Section 515.201 prohibits all 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 certain transactions in connection with the 
administration of blocked estates of decedents, and Sec. 515.522 which 
authorizes the unblocking by specific license of estate assets to 
certain heirs under certain circumstances.

[28 FR 6974, July 9, 1963, as amended at 54 FR 5234, Feb. 2, 1989; 64 FR 
25812, May 13, 1999]



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

[[Page 564]]

jurisdiction of the United States from purchasing, transporting or 
otherwise dealing in commodities of Cuban origin which are outside the 
United States.

[39 FR 25317, July 10, 1974]



Sec. 515.411  Exclusion from authorization in Sec. 515.518.

    Heirs, legatees, etc. who acquire an interest in blocked property 
after July 8, 1963 pursuant to Sec. 515.525 are excluded from the 
provisions of Sec. 515.518 authorizing debits to blocked accounts for 
certain personal expenditures.

[39 FR 25317, July 10, 1974]



Sec. 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:
    (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 traveling without a visa issued by the Department of 
State 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]



Secs. 515.416-515.417  [Reserved]



Sec. 515.418  Transactions related to telecommunications.

    (a) Section 515.542(c) provides that specific licenses may be issued 
for transactions incident to the receipt or transmission of 
communications between the United States and Cuba. Pursuant to 
Sec. 515.542(c), licenses may be issued for payment to Cuba for full or 
partial payment of amounts due Cuba as a result of the provision of 
telecommunications services provided such services and payments are 
approved by the Federal Communications Commission and are consistent 
with policy guidelines governing telecommunications between the United 
States and Cuba established to implement the Cuban Democracy Act of 
1992.
    (b) Section 515.545 provides, in part, that licenses will be issued 
in appropriate cases for transactions for travel related to the 
transmission of information. Pursuant to Sec. 515.545, licenses may be 
issued on a case-by-case basis for travel transactions related to travel 
for negotiation or performance of telecommunications agreements for 
service between the United States and Cuba.

[58 FR 45060, Aug. 26, 1993, as amended at 64 FR 25812, May 13, 1999]



Sec. 515.419  [Reserved]



Sec. 515.420  Fully-hosted travel to Cuba.

    (a) A person subject to the jurisdiction of the United States who is 
not

[[Page 565]]

authorized to engage in travel-related transactions in which Cuba has an 
interest will not be considered to violate the prohibitions of this part 
when a person not subject to the jurisdiction of the United States 
covers the cost of all transactions related to the travel of the person 
subject to the jurisdiction of the United States (the ``fully-hosted'' 
traveler), provided that:
    (1) No person subject to the jurisdiction of the United States has 
made any payments or transferred any property or provided any service to 
Cuba or a Cuban national in connection with such fully-hosted travel or 
has prepaid or reimbursed any person for travel expenses, except as 
authorized in paragraph (b) of this section; and
    (2) The travel is not aboard a direct flight between the United 
States and Cuba authorized pursuant to Sec. 515.572.
    (b) Travel will be considered fully hosted notwithstanding a payment 
by a person subject to the jurisdiction of the United States for 
transportation to and from Cuba, provided that the carrier furnishing 
the transportation is not a Cuban national. Persons authorized as travel 
service providers pursuant to Sec. 515.572 may book passage on behalf of 
fully-hosted travelers through to Cuba, provided that such travel is not 
on a direct flight from the United States and that the carrier 
furnishing the transportation is not a Cuban national.
    (c) Unless otherwise authorized pursuant to this part, any person 
subject to the jurisdiction of the United States who has traveled to 
Cuba shall be presumed to have engaged in travel-related transactions 
prohibited by Sec. 515.201. This presumption may be rebutted by a 
statement signed by the traveler providing specific supporting 
documentation showing that no transactions were engaged in by the 
traveler or on the traveler's behalf by other persons subject to U.S. 
jurisdiction or showing that the traveler was fully hosted by a third 
party not subject to the jurisdiction of the United States and that 
payments made on the traveler's behalf were not in exchange for services 
provided to Cuba or any national thereof. The statement should address 
the circumstances of the travel and explain how it was possible for the 
traveler to avoid entering into travel-related transactions such as 
payments for meals, lodging, transportation, bunkering of vessels, 
visas, entry or exit fees, and gratuities. If applicable, the statement 
should state what party hosted the travel and why. The statement must 
provide a day-to-day account of financial transactions waived or entered 
into on behalf of the traveler by the host, including but not limited to 
visa fees, room and board, local or international transportation costs, 
and Cuban airport departure taxes. In the case of pleasure craft calling 
at Cuban marinas, the statement must also address related refueling 
costs, mooring fees, club membership fees, provisions, cruising permits, 
local land transportation, and departure fees. Travelers fully hosted by 
a person or persons not subject to the jurisdiction of the United States 
must also provide an original signed statement from their sponsor or 
host, specific to that traveler, confirming that the travel was fully 
hosted and the reasons for the travel.

    Note to paragraph (c):
    Travelers should be aware that fully-hosted travelers are not 
travelers whose travel-related transactions are licensed pursuant to 
this part and therefore such fully-hosted travelers may not engage in 
the travel-related transactions set forth in Sec. 515.560(c), including 
the purchase and importation of up to $100 of Cuban merchandise for 
personal use. All documentation described in paragraph (c) of this 
section is subject to the recordkeeping requirements, including the 
record retention period, in Sec. 501.601 of this chapter.

    (d) Persons planning to travel to Cuba may access the Office of 
Foreign Assets Control's information resources over the Internet at 
http://www.treas.gov/ofac, through the office's fax-on-demand service at 
202/622-0077, or by calling the office's Compliance Programs Division at 
202/622-2490, prior to their departure to familiarize themselves with 
the requirements for fully-hosted travel. Other inquiries concerning 
travel-related transactions should be addressed to the Licensing 
Division, Office of Foreign Assets Control, U.S. Department of the 
Treasury, 1500 Pennsylvania Avenue, NW.--Annex, Washington, DC 20220.

[64 FR 25812, May 13, 1999]

[[Page 566]]



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



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. No regulation, ruling, instruction or 
license referring to this part shall be deemed to authorize any 
transaction prohibited by part 500 of this chapter unless the 
regulation, ruling, instruction or license specifically refers to part 
500.



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 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 persons unblocked.

    (a) The following persons are hereby licensed as unblocked 
nationals.
    (1) Any person resident in, or organized under the laws of a 
jurisdiction in, the United States or the authorized trade territory who 
or which has never been a designated national;

[[Page 567]]

    (2) Any individual resident in the United States who is not a 
specially designated national; and
    (3) Any corporation, partnership or association that would be a 
designated national solely because of the interest therein of an 
individual licensed in paragraph (a) or (b) of this section as an 
unblocked national.
    (b) Individual nationals of a designated country who have taken up 
residence in the authorized trade territory may apply to the Office of 
Foreign Assets Control to be specifically licensed as unblocked 
nationals.
    (c) The licensing of any person as an unblocked national shall not 
suspend the requirements of any section of this chapter relating to the 
maintenance or production of records.

[50 FR 27437, July 3, 1985, as amended at 54 FR 5234, Feb. 2, 1989]



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.

[[Page 568]]



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 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. 515.513  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 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

[[Page 569]]

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]



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

[[Page 570]]

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.



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;

[[Page 571]]

    (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  U.S. assets of certain Cuban decedents.

    (a) Specific licenses may be issued unblocking the net pro rata 
shares of certain heirs of designated nationals in U.S.-located estate 
assets, 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 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 pursuant to Sec. 515.505 exists in that portion of 
the assets 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. 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 death of the designated national to be established by a 
death certificate;
    (3) Proof of heirship, to be established by a copy of the decedent's 
duly executed will certified by a probate court, a court decree 
determining the heirs, or, failing the availability of such documents, 
copies of certificates establishing the relationship of the heir to the 
deceased, e.g., birth or marriage certificates;
    (4) A description of the assets involved, including interest due on 
blocked funds since April 1, 1979, the name and address of the 
institution in which the assets are held, the account or safe deposit 
box number, the name in which the assets are held and a statement of all 
known encumbrances or claims against them; 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 5235, Feb. 2, 1989. Redesignated at 64 FR 25813, May 13, 1999]



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

    (a) The following transactions are authorized in connection with the 
administration of the assets in the United States of any blocked estate 
of a decedent:
    (1) The appointment and qualification of a personal representative;
    (2) The collection and preservation of such assets by such personal 
representative and the payment of all costs, fees and charges in 
connection therewith; and
    (3) The payment by such personal representative of funeral expenses 
and expenses of the last illness.
    (4) Any transfer of title pursuant to a valid testamentary 
disposition.

This paragraph does not authorize any unblocking or distribution of 
estate assets to a designated national.

[[Page 572]]

    (b) In addition to the authorization contained in paragraph (a) of 
this section, all other transactions incident to the administration of 
assets situated in the United States of any blocked estate of a decedent 
are authorized if:
    (1) The decedent was not a national of a designated foreign country 
at the time of his death;
    (2) The decedent was a citizen of the United States and a national 
of a designated foreign country at the time of his death solely by 
reason of his presence in a designated foreign country as a result of 
his employment by, or service with the United States Government; or
    (3) The assets are unblocked under a specific license issued 
pursuant to Sec. 515.522.
    (c) Any property or interest therein distributed pursuant to this 
section to a designated national shall be regarded for the purpose of 
this chapter as property in which such national has an interest and 
shall accordingly be subject to all the pertinent sections of this 
chapter. Any payment or distribution of any funds, securities or other 
choses in action to a designated national shall be made by deposit in a 
blocked account in a domestic bank or with a public officer, agency, or 
instrumentality designated by a court having jurisdiction of the estate. 
Any such deposit shall be made in one of the following ways:
    (1) In the name of the national who is the ultimate beneficiary 
thereof;
    (2) In the name of a person who is not a national of a designated 
foreign country in trust for the national who is the ultimate 
beneficiary; or
    (3) Under some other designation which clearly shows the interest 
therein of such national.
    (d) Any distribution of property authorized pursuant to this section 
may be made to a trustee of any testamentary trust or to the guardian of 
an estate of a minor or of an incompetent.
    (e) This section does not authorize:
    (1) Any designated national to act as personal representative or co-
representative of any estate;
    (2) Any designated national to represent, directly or indirectly, 
any person who has an interest in an estate;
    (3) Any designated national to take distribution of any property as 
the trustee of any testamentary trust or as the guardian of an estate of 
a minor or of an incompetent; or
    (4) Any transaction which could not be effected if no designated 
national had any interest in such estate.
    (f) Any payment or distribution authorized by this section may be 
deposited in a blocked account in a domestic bank or with a public 
officer, agency, or instrumentality designated by the court having 
jurisdiction of the estate in one of the ways prescribed in paragraph 
(c) (1), (2) or (3) of this section, but this section does not authorize 
any other transaction directly or indirectly at the request, or upon the 
instructions of any designated national.

[28 FR 6974, July 9, 1963, as amended at 54 FR 5234, Feb. 2, 1989; 64 FR 
25813, May 13, 1999]



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, or as legal representative of an 
estate of an infant or incompetent administered in the United States, in 
which trust or estate one or more persons who are designated nationals 
have an interest, beneficial or otherwise, or are co-trustees or co-
representatives, is hereby authorized to engage in the following 
transactions:
    (1) Payments of distributive shares of principal or income to all 
persons legally entitled thereto upon the condition prescribed in 
paragraph (b) of this section.
    (2) Other transactions arising in the administration of such trust 
or estate which might be engaged in if no national of a designated 
foreign country were a beneficiary, co-trustee or co-representative of 
such trust or estate upon the condition prescribed in paragraph (b) of 
this section.

[[Page 573]]

    (b) Any payment or distribution of any funds, securities or other 
choses in action to a national of a designated foreign country under 
this section shall be made by deposit in a blocked account in a domestic 
bank in the name of the national who is the ultimate beneficiary 
thereof.
    (c) Any payment or distribution into a blocked account in a domestic 
bank in the name of any such national of a designated foreign country 
who is the ultimate beneficiary of and legally entitled to any such 
payment or distribution is authorized by this section, but this section 
does not authorize such trustee or legal representative to engage in any 
other transaction at the request, or upon the instructions, of any 
beneficiary, co-trustee or co-representative of such trust or estate or 
other person who is a national of any designated foreign country.
    (d) 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]



Sec. 515.525  Certain transfers by operation of law.

    (a) The following are hereby authorized:
    (1) 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;
    (2) Any transfer to any person by intestate succession;
    (3) Any transfer to any person as administrator, executor, or other 
fiduciary by reason of any testamentary disposition; and
    (4) Any transfer to any person as administrator, executor, or 
fiduciary by reason of judicial appointment or approval in connection 
with any testamentary disposition or intestate succession.
    (b) Except to the extent authorized by Sec. 515.522, Sec. 515.523 or 
by any other license or authorization contained in or issued pursuant to 
this part no transfer to any person by intestate succession and no 
transfer to any person as administrator, executor, or other fiduciary by 
reason of any testamentary disposition, and no transfer to any person as 
administrator, executor, or fiduciary by reason of judicial appointment 
or approval in connection with any testamentary disposition or intestate 
succession shall be deemed to terminate the interest of the decedent in 
the property transferred if the decedent was a designated national.

[28 FR 6974, July 9, 1963, as amended at 54 FR 5234, Feb. 2, 1989; 64 FR 
25813, May 13, 1999]



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

[[Page 574]]

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
    (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

[[Page 575]]

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 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. 515.531  Payment of certain checks and drafts.

    (a) Any banking institution within the United States is hereby 
authorized to make payments from blocked accounts with such banking 
institution:
    (1) Of checks and drafts drawn or issued prior to the ``effective 
date'' provided:

[[Page 576]]

    (i) The amount involved in any one payment, acceptance, or debit 
does not exceed $500; or
    (ii) The check or draft was within the United States in process of 
collection by a domestic bank on or prior to the ``effective date.''
    (2) [Reserved]
    (b) This section does not authorize any payment to a designated 
foreign country or any designated national thereof except payments into 
a blocked account in a domestic bank, unless such designated national is 
otherwise licensed to receive such payment.
    (c) The authorization contained in this section shall expire at the 
close of business on August 8, 1963.



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  Transactions incident to exportations from the United States and reexportations of U.S.-origin items to Cuba.

    (a) All transactions ordinarily incident to the exportation of 
goods, wares, and merchandise from the United States, or the 
reexportation of U.S.-origin goods, wares, and merchandise from a third 
country, to any person within Cuba are hereby authorized, provided the 
following terms and conditions are complied with:
    (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. app. 2401-2420) 
(see the Export Administration Regulations, 15 CFR 730-774); and
    (2) Only the following payment or financing terms may be used:
    (i) Payment of cash in advance;
    (ii) For authorized sales of agricultural items, financing by a 
banking institution located in a third country provided the banking 
institution is not a designated national, United States citizen, United 
States permanent resident alien, or an entity organized under the laws 
of the United States or any jurisdiction within the United States 
(including foreign branches). Such financing may be confirmed or advised 
by a United States banking institution; or
    (iii) For all other authorized sales, financing by a banking 
institution located in a third country provided the banking institution 
is not a designated national or a person subject to the jurisdiction of 
the United States. Such financing may be confirmed or advised by a 
United States banking institution.
    (b) This section does not authorize any exportation under General 
License SHIP STORES, 15 CFR 771.9, to any vessel carrying goods or 
passengers to or from Cuba or carrying goods in which Cuba or a Cuban 
national has an interest.
    (c) This section does not authorize:
    (1) The financing of any transaction from any blocked account;
    (2) Any transaction involving, directly or indirectly, property in 
which any designated national, other than a person located in the 
country to which the exportation is consigned, has an interest, or has 
had an interest since the ``effective date.''
    (d) This section does not authorize any exportation under License 
Exception GFT, 15 CFR 740.12, except gift

[[Page 577]]

parcels that contain only food, vitamins, seeds, medicines, medical 
supplies and devices, hospital supplies and equipment, equipment for the 
handicapped, clothing, personal hygiene items, veterinary medicines and 
supplies, fishing equipment and supplies, soap-making equipment, or 
certain radio equipment and batteries for such equipment, as 
specifically set forth in 15 CFR 740.12, and that otherwise comply with 
the requirements of that section.
    (e) Specific licenses may be issued on a case-by-case basis 
authorizing the travel-related transactions set forth in Sec. 515.560(c) 
and other transactions that are directly incident to the marketing, 
sales negotiation, accompanied delivery, or servicing of exports or 
reexports that are consistent with the export or reexport licensing 
policy of the Department of Commerce.

    Note to Sec. 515.533: For the waiver of the prohibition contained in 
Sec. 515.207 on certain vessel transactions for vessels transporting 
shipments of goods, wares, or merchandise between the United States and 
Cuba pursuant to this section, see Sec. 515.550.

[28 FR 6974, July 9, 1963, as amended at 57 FR 15216, Apr. 24, 1992; 59 
FR 44885, Aug. 30, 1994; 64 FR 25813, May 13, 1999; 66 FR 36687, July 
12, 2001]



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, 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) With respect to merchandise the importation of which is 
prohibited by Sec. 515.204, all Customs transactions are authorized 
except the following:
    (1) Entry for consumption (including any appraisement entry, any 
entry of goods imported in the mails, regardless of value, and any other 
informal entries);
    (2) Entry for immediate exportation;
    (3) Entry for transportation and exportation;
    (4) Withdrawal from warehouse;
    (5) Transfer or withdrawal from a foreign-trade zone; or
    (6) Manipulation or manufacture in a warehouse or in a foreign-trade 
zone.
    (b) Paragraph (a) of this section is intended solely to allow 
certain restricted disposition of merchandise which is imported without 
proper authorization. Paragraph (a) of this section does not authorize 
the purchase or importation of any merchandise.
    (c) 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 (including transactions listed in paragraph (a) of this section) 
are authorized if there is presented to the collector of customs in 
connection with such importation the

[[Page 578]]

original of an appropriate certificate of origin as defined in paragraph 
(d) 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.
    (d) 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]



Sec. 515.540  [Reserved]



Sec. 515.542  Telecommunications, information, and informational materials.

    (a) All transactions of common carriers incident to the receipt or 
transmission of mail between the United States and Cuba are hereby 
authorized.
    (b) Except as provided in paragraph (c) of this section, all 
transactions incident to the use of cables, satellite channels, radio 
signals, or other means of telecommunications for the provision of 
telecommunications services between Cuba and the United States, 
including telephone, telegraph and similar services, and the 
transmission of radio and television broadcasts and news wire feeds 
between Cuba and the United States, are authorized.
    (c) Full or partial payments owed to Cuba as a result of 
telecommunications services authorized in paragraph (b) of this section 
are prohibited unless authorized pursuant to specific licenses, which 
will be issued on a case-by-case basis provided such payments are 
determined to be consistent with the public interest and the foreign 
policy of the United States.

[45 FR 58843, Sept. 5, 1980, as amended at 60 FR 39256, Aug. 2, 1995]



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  Gifts of Cuban origin goods.

    (a) Except as stated in paragraph (b) of this section, specific 
licenses are not issued for the importation of Cuban-origin goods sent 
as gifts to persons in the United States or acquired abroad as gifts by 
persons entering the United States. However, licenses are issued upon 
request for the return of such goods to the donors in countries other 
than Cuba.
    (b) Specific licenses are issued for the importation directly from 
Cuba:
    (1) Of goods which are claimed by the importer to have been sent as 
a bona fide gift or
    (2) Of goods which are imported by a person entering the U.S., which 
are claimed to have been acquired in Cuba as a bona fide gift, subject 
to the conditions that:
    (i) The goods are of small value, and
    (ii) There is no reason to believe that there is, or has been since 
July 8, 1963, any direct or indirect financial or commercial benefit to 
Cuba or nationals thereof from the importation.

[39 FR 25317, July 10, 1974; 39 FR 28434, Aug. 7, 1974, as amended at 49 
FR 27144, July 2, 1984]

[[Page 579]]



Sec. 515.545  Transactions related to information and informational materials.

    (a) Except as provided in Sec. 515.542(c), all financial and other 
transactions directly incident to the importation or exportation of 
information or informational materials are authorized.
    (b) Transactions relating to the dissemination of informational 
materials are authorized, including remittance of royalties paid for 
informational materials that are reproduced, translated, subtitled, or 
dubbed. This section does not authorize the remittance of royalties or 
other payments relating to works not yet in being, or for marketing and 
business consulting services, or artistic or other substantive 
alteration or enhancements to informational materials, as provided in 
Sec. 515.206(a)(3).
    (c) Specific licenses may be issued on a case-by-case basis 
authorizing the travel-related transactions set forth in Sec. 515.560(c) 
for purposes related to the exportation, importation, or transmission of 
information or informational materials as defined in Sec. 515.332.

[54 FR 5234, Feb. 2, 1989, as amended at 60 FR 39257, Aug. 2, 1995; 64 
FR 25813, May 13, 1999]



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  Research samples.

    Specific licenses are issued for importation of Cuban-origin 
commodities for bona-fide research purposes in sample quantities only.

[39 FR 25318, July 10, 1974]



Sec. 515.548  Services rendered by Cuba to United States aircraft.

    Specific licenses are issued for payment to Cuba of charges for 
services rendered by Cuba in connection with overflights of Cuba or 
emergency landings in Cuba, of private, commercial or government-owned 
United States aircraft.

[39 FR 25318, July 10, 1974, as amended at 49 FR 27144, July 2, 1984]



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

    (a) Citizens of foreign countries. Specific licenses are issued 
unblocking the accounts and other property of non-Cuban citizens who 
have left Cuba, provided that they submit evidence satisfactorily 
demonstrating that they have established residence in a foreign country 
in the authorized trade territory.
    (b) Decedents who died in Cuba on or after July 8, 1963. Specific 
licenses are issued authorizing the administration of the estates of 
non-Cuban decedents who died in Cuba, 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.

[39 FR 25318, July 10, 1974]



Sec. 515.550  Certain vessel transactions authorized.

    Unless a vessel 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:
    (a) Engaging in trade with Cuba authorized by licenses issued 
pursuant to Sec. 515.533 or Sec. 515.559; or
    (b) Engaging in trade with Cuba that is exempt from the prohibitions 
of this part (see Sec. 515.206).

[64 FR 25813, May 13, 1999]



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

[[Page 580]]

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.

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.

[[Page 581]]

    (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, 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;

[[Page 582]]

    (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 transactions by U.S.-owned or controlled foreign firms with Cuba.

    (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 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;

[[Page 583]]

    (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) Travel-related transactions set forth in Sec. 515.560(c) and 
other transactions that are directly incident to marketing, sales 
negotiation, accompanied delivery, or servicing of exports that are 
consistent with the licensing policy under this section.
    (3) Importation of goods of Cuban origin into countries in the 
authorized trade territory.
    (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) Specific licenses issued pursuant to the policies set forth in 
this section do not authorize any person within the United States to 
engage in, participate in, or be involved in a licensed transactions 
with Cuba or Cuban nationals. Such involvement includes, but is not 
limited to, assistance or participation by a U.S. parent firm, or any 
officer or employee thereof, in the negotiation or performance of a 
transaction which is the subject of a license application. Such 
participation is a ground for denial of a license application, or for 
revocation of a license. To be eligible for a license under this 
section, the affiliate must be generally independent, in the conduct of 
transactions of the type for which the license is being sought, in such 
matters as decision-making, risk-taking, negotiation, financing or 
arranging of financing, and performance.

    Note to Sec. 515.559: For reexportation of U.S.-origin goods, wares, 
or merchandise by U.S.-owned or controlled foreign firms, 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 goods, 
wares, or merchandise pursuant to this section, see Sec. 515.550.


[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]



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 general and specific 
licensing criteria):
    (1) Family visits (general and specific licenses) (see 
Sec. 515.561);
    (2) Official business of the U.S. government, foreign governments, 
and certain intergovernmental organizations (general license) (see 
Sec. 515.562);
    (3) Journalistic activity (general and specific licenses) (see 
Sec. 515.563);
    (4) Professional research (general and specific licenses) (see 
Sec. 515.564);
    (5) Educational activities (specific licenses) (see Sec. 515.565);
    (6) Religious activities (specific licenses) (see Sec. 515.566);
    (7) Public performances, clinics, workshops, athletic and other 
competitions, and exhibitions (general and specific licenses) (see 
Sec. 515.567);
    (8) Support for the Cuban people (specific licenses) (see 
Sec. 515.574);
    (9) Humanitarian projects (specific licenses) (see Sec. 515.575);
    (10) Activities of private foundations or research or educational 
institutes (specific licenses) (see Sec. 515.576);
    (11) Exportation, importation, or transmission of information or 
informational materials (specific licenses) (see Sec. 515.545); and
    (12) Certain export transactions that may be considered for 
authorization under existing Department of Commerce regulations and 
guidelines with

[[Page 584]]

respect to Cuba or engaged in by U.S.-owned or controlled foreign firms 
(specific licenses) (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, provided no more than $500 may be remitted to Cuba directly or 
indirectly in any consecutive 12-month period for fees imposed by the 
Government of Cuba in conjunction with such travel unless otherwise 
authorized.
    (2) Living expenses in Cuba. All transactions ordinarily incident to 
travel anywhere within Cuba, including payment of living expenses and 
the acquisition in Cuba of goods for personal consumption there, 
provided that, unless otherwise authorized, the total for such expenses 
does not exceed the ``maximum per diem rate'' for Havana, Cuba in effect 
during the period that the travel takes place. The per diem rate is 
published in the State Department's ``Maximum Travel Per Diem Allowances 
for Foreign Areas,'' a supplement to section 925, Department of State 
Standardized Regulations (Government Civilians, Foreign Areas), 
available from the Government Printing Office, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954, or on the 
Internet at http://www.state.gov/www/perdiems/index.html.
    (3) Purchase in Cuba and importation into the United States of 
merchandise. The purchase in Cuba and importation as accompanied baggage 
into the United States of merchandise with a foreign market value not to 
exceed $100 per person, provided the merchandise is imported for 
personal use only. Such merchandise may not be resold. This 
authorization may be used only once every six consecutive months. As 
provided in Sec. 515.206(a), the purchase and importation of information 
or informational materials are exempt from all restrictions contained in 
this part.
    (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, provided that no more than $300 of remittances 
authorized by Sec. 515.570(a) or (b) is carried in any one trip, unless 
otherwise authorized. Those licensed travelers carrying either of the 
emigration remittances authorized pursuant to Sec. 515.570(c) must be 
able to produce the visa recipient's full name and date of birth and the 
number and date of issuance of the visa or other travel authorization 
issued. A licensed traveler to Cuba is only authorized to carry 
remittances that he or she is authorized to remit and may not carry 
remittances being made by other persons.
    (5) Processing certain financial instruments. All transactions 
incident to the processing and payment of checks, drafts, travelers' 
checks, and similar instruments negotiated in Cuba by any person 
authorized pursuant to this part to engage in financial transactions in 
Cuba. For purposes of this section, the authorized transactions may be 
conducted using currency, which is defined as money, cash, drafts, 
notes, travelers' checks, negotiable instruments, or scrip having a 
specified or readily determinable face value or worth, but which does 
not include gold or other precious metals in any form.

    Note to paragraph (c):
    The authorizations in paragraph (c) of this section do not apply to 
fully-hosted travelers because their travel-related transactions are not 
licensed or authorized pursuant to this part. See Sec. 515.420.

    (d) A Cuban national departing the United States may carry currency, 
as that term is defined in paragraph (c)(5) of this section, as follows:
    (1) The amount of any currency brought into the United States by the 
Cuban national and registered with the U.S. Customs Service upon entry;
    (2) Up to $300 in funds received as remittances by the Cuban 
national during his or her stay in the United States; and

[[Page 585]]

    (3) Compensation earned by a Cuban national from a U.S. academic 
institution up to any amount that can be substantiated through payment 
receipts from such institution as authorized pursuant to 
Sec. 515.565(a)(2)(v).
    (e) The following transactions by persons generally or specifically 
licensed to engage in travel-related transactions to, from, and within 
Cuba are prohibited by Sec. 515.201 unless specifically authorized:
    (1) All transactions by persons subject to U.S. jurisdiction related 
to the utilization of charge cards, including but not limited to debit 
or credit cards, for expenditures in Cuba.
    (2) All transactions related to the processing and payment by 
persons subject to U.S. jurisdiction, such as charge card issuers or 
intermediary banks, of charge card instruments (e.g., vouchers, drafts, 
or sales receipts) for expenditures in Cuba. The issuer of a charge 
card, or a foreign charge card firm owned or controlled by persons 
subject to U.S. jurisdiction, is not authorized to deal with a Cuban 
enterprise, a Cuban national, or a third-country person, such as a 
franchisee, in connection with the extension of charge card services to 
any person in Cuba.
    (f) Persons traveling to Cuba fully hosted as described in 
Sec. 515.420 may not carry currency to pay for living expenses or the 
purchase of goods in Cuba except as specifically licensed pursuant to or 
exempted from the application of this part.
    (g) Nothing in this section authorizes transactions in connection 
with tourist travel to Cuba, nor does it authorize transactions in 
relation to any business travel, including making or agreeing to make 
any investment in Cuba, establishing or agreeing to establish any branch 
or agency in Cuba, or transferring or agreeing to transfer any property 
to Cuba, except transfers by or on behalf of individual or group 
travelers authorized pursuant to this part.

[64 FR 25814, May 13, 1999, as amended at 66 FR 36688, July 12, 2001]



Sec. 515.561  Persons visiting family members in Cuba.

    (a) General license. The travel-related transactions set forth in 
Sec. 515.560(c) are authorized in connection with travel to Cuba by 
persons and persons traveling with them who share a common dwelling as a 
family with them who are traveling to visit close relatives in Cuba in 
circumstances that demonstrate humanitarian need, provided that the 
authorization contained in this paragraph may be used only once in any 
12-month period. See Secs. 501.601 and 501.602 of this chapter for 
applicable recordkeeping and reporting requirements. Any additional 
transactions must be specifically licensed pursuant to paragraph (b) of 
this section.
    (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) in connection with travel to Cuba by persons, and 
persons traveling with them who share a common dwelling as a family with 
them, who seek to travel to visit close relatives in Cuba more than once 
in any consecutive 12-month period in cases involving humanitarian need.
    (c) For purposes of this section, the term close relative used with 
respect to any person means such person's spouse, child, grandchild, 
parent, grandparent, great grandparent, uncle, aunt, brother, sister, 
nephew, niece, first cousin, mother-in-law, father-in-law, son-in-law, 
daughter-in-law, sister-in-law, brother-in-law, or spouse, widow, or 
widower of any of the foregoing.

[64 FR 25815, May 13, 1999]



Sec. 515.562  Officials of the U.S. government, foreign governments, and certain intergovernmental organizations traveling to, from, and within Cuba on official 
          business.

    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 officials of the United 
States Government, any foreign government, or any intergovernmental 
organization of which the United States is a member and who are 
traveling on

[[Page 586]]

the official business of their government or international organization 
are authorized.

[64 FR 25815, May 13, 1999]



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 by persons regularly 
employed as journalists by a news reporting organization or by persons 
regularly employed as supporting broadcast or technical personnel are 
authorized.

    Note to paragraph (a):
    See Secs. 501.601 and 501.602 of this chapter for applicable 
recordkeeping and reporting requirements. The exportation of equipment 
and other items to be used in journalistic activities may require 
separate licensing by the Department of Commerce.

    (b) Specific licenses. (1) Specific licenses may be issued on a 
case-by-case basis authorizing the travel-related transactions set forth 
in Sec. 515.560(c) and other transactions that are directly incident to 
doing research in Cuba for a free-lance article upon submission of an 
adequate written application including the following documentation:
    (i) A detailed itinerary and a detailed description of the proposed 
research; and
    (ii) A resume or similar document showing a record of publications.
    (2) To qualify for a specific license pursuant to this section, the 
itinerary for the proposed research in Cuba for a free-lance article 
must demonstrate that the research constitutes a full work schedule that 
could not be accomplished in a shorter period of time.
    (3) Specific licenses may be issued pursuant to this section 
authorizing transactions for multiple trips to Cuba over an extended 
period of time by applicants demonstrating a significant record of free-
lance journalism.

[64 FR 25815, May 13, 1999]



Sec. 515.564  Professional research and professional meetings in Cuba.

    (a) General license. (1) The travel-related transactions set forth 
in Sec. 515.560(c) and such additional transactions that are directly 
incident to professional research by full-time professionals who travel 
to Cuba to conduct professional research in their professional areas are 
authorized, provided that:
    (i) The research is of a noncommercial, academic nature;
    (ii) The research comprises a full work schedule in Cuba;
    (iii) The research has a substantial likelihood of public 
dissemination; and
    (iv) The research does not fall within the categories of activities 
described in paragraph (c), (d), or (e) of this section.
    (2) The travel-related transactions set forth in Sec. 515.560(c) and 
such additional transactions as are directly incident to travel to Cuba 
by full-time professionals to attend professional meetings or 
conferences in Cuba organized by an international professional 
organization, institution, or association that regularly sponsors 
meetings or conferences in other countries are authorized, provided 
that:
    (i) The international professional organization, institution, or 
association is not headquartered in the United States unless that 
organization, institution, or association has been specifically licensed 
to sponsor the meeting in Cuba;
    (ii) The purpose of the meeting or conference is not the promotion 
of tourism in Cuba or other commercial activities involving Cuba that 
are inconsistent with this part; and
    (iii) The meeting or conference is not intended primarily for the 
purpose of fostering production of any biotechnological products.

    Note to paragraph (a):
    See Secs. 501.601 and 501.602 of this chapter for applicable 
recordkeeping and reporting requirements. Exportation of equipment and 
other items, including the transfer of technology or software to foreign 
persons (``deemed exportation'') and items not eligible for Department 
of Commerce GFT or BAG License Exceptions, 15 CFR 740.12 and 740.14, may 
require separate authorization by the Department of Commerce.

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

[[Page 587]]

be issued pursuant to this section authorizing transactions for multiple 
trips to Cuba over an extended period of time by applicants 
demonstrating a significant record of research. Specific licenses will 
not be issued for travel-related transactions for purposes of attendance 
at meetings or conferences in Cuba organized by the Cuban government 
where such meetings or conferences could be intended primarily for the 
purpose of fostering the production of any biotechnological products.
    (c) Categories of activities that do not qualify for the general 
license in paragraph (a) of this section and for which the specific 
licenses described in paragraph (b) of this section will not be issued 
include recreational travel; tourist travel; travel in pursuit of a 
hobby; research for personal satisfaction only; and any travel for an 
authorized professional research purpose if the schedule of activities 
includes free time, travel, or recreation in excess of that consistent 
with a full work schedule of professional research or attendance at 
professional meetings or conferences.
    (d) An entire group does not qualify for the general license in 
paragraph (a) of this section and will not be issued a specific license 
under paragraph (b) of this section merely because some members of the 
group could qualify individually for such licenses.

    Example 1 to paragraph (d): A musicologist travels to Cuba to do 
research on Cuban music pursuant to the general license for professional 
researchers set forth in paragraph (a) of this section. Others who are 
simply interested in music but who do not research music as part of 
their careers 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 as a professional researcher of Cuban music for purposes of this 
general license.
    Example 2 to paragraph (d): A specific license issued pursuant to 
paragraph (b) of this section authorizing travel-related transactions by 
a fish biologist who travels to Cuba to engage in professional research 
does not authorize transactions by other persons who might travel with 
the fish biologist but whose principal purpose in travel is to engage in 
recreational or trophy fishing. The fact that such persons may engage in 
certain activities with or under the direction of the professional fish 
biologist, such as measuring or recording facts about their catch, does 
not bring these individuals' activities within the scope of professional 
research and similar activities.

    (e) A person will not qualify as engaging in professional research 
merely because that person is a professional who plans to travel to 
Cuba.

    Example 1 to paragraph (e): A professor of history interested in 
traveling to Cuba for the principal purpose of learning or practicing 
Spanish or attending general purpose lectures devoted to Cuban culture 
and contemporary life does not qualify for the general license in 
paragraph (a) of this section or for a specific license issued pursuant 
to paragraph (b) of this section.
    Example 2 to paragraph (e): A professional photographer who wishes 
to take photographs in Cuba that will become the basis for creating post 
cards, paintings, and other secondary products or that merely document 
the photographer's travel does not qualify for the general license in 
paragraph (a) of this section or for a specific license issued pursuant 
to paragraph (b) of this section.

[64 FR 25815, May 13, 1999]



Sec. 515.565  Educational activities.

    (a) Specific license for U.S. academic institutions--(1) Issuance; 
renewal. A specific license may be issued to an accredited U.S. academic 
institution authorizing the institution and its students and employees 
to engage, under the auspices of the institution, in educational 
activities involving transactions in which Cuba or a Cuban national has 
an interest. The application for the specific license must establish 
that the U.S. academic institution is accredited by an appropriate 
national or regional educational accrediting association. The specific 
license may be renewed after a period of two years to authorize the 
accredited U.S. academic institution and its students and employees to 
continue to engage in the transactions authorized under the 
institution's license.
    (2) Scope of transactions authorized under U.S. academic 
institution's specific license; documentation. Upon receipt of a 
specific license pursuant to paragraph (a)(1) of this section by the 
accredited U.S. academic institution, the institution and its students 
and employees are authorized to engage in the travel-related 
transactions set forth in

[[Page 588]]

Sec. 515.560(c) and such additional transactions as are directly 
incident to any of the categories of educational activities set forth in 
paragraphs (a)(2)(i) through (a)(2)(vii) of this section undertaken 
under the auspices of the specifically-licensed institution. Activities 
covered by this authorization are limited to the following:
    (i) Participation in a structured educational program by an 
undergraduate or graduate student or undergraduate or graduate student 
group as part of a course offered at an accredited U.S. college or 
university. A student planning to engage in such transactions in Cuba 
must carry a letter from the U.S. academic institution stating that the 
student is currently enrolled in an undergraduate or graduate degree 
program there and that the Cuba travel is part of a structured 
educational program of that institution and citing the number of the 
relevant U.S. academic institution's specific license.
    (ii) Noncommercial academic research in Cuba specifically related to 
Cuba by a person working to qualify academically as a professional (for 
example, research toward a graduate degree). A student planning to 
engage in such transactions in Cuba must carry a letter from the 
student's accredited U.S. academic institution stating that the 
individual is currently enrolled in a graduate degree program and that 
the Cuba research will be accepted for credit toward that degree and 
citing the number of the relevant U.S. academic institution's specific 
license.
    (iii) Participation in a formal course of study at a Cuban academic 
institution by an undergraduate or graduate student currently enrolled 
in a degree program at an accredited U.S. college or university, 
provided the formal course of study in Cuba will be accepted for credit 
toward the student's undergraduate or graduate degree at that U.S. 
college or university. A student planning to engage in such transactions 
in Cuba must carry with him or her a letter from the student's U.S. 
academic institution stating that the student is currently enrolled in 
an undergraduate or graduate degree program and that the Cuban study 
will be accepted for credit toward that degree and citing the number of 
the relevant U.S. academic institution's specific license.
    (iv) Teaching at a Cuban academic institution by an individual 
regularly employed in a teaching capacity at an accredited U.S. college 
or university, provided the teaching activities are related to an 
academic program at the Cuban institution. An individual planning to 
teach at a Cuban academic institution must obtain and carry a written 
letter from the individual's U.S. academic institution, citing the 
number of that institution's specific license and stating that the 
individual is regularly employed there in a teaching capacity.
    (v) Sponsorship, including the payment of a stipend or salary, of a 
Cuban scholar to teach or engage in other scholarly activity at a 
college or university in the United States (in addition to those 
transactions authorized by the general license contained in 
Sec. 515.571). Such earnings may be remitted to Cuba as provided in 
Sec. 515.570, or carried on the person of the Cuban scholar returning to 
Cuba as provided in Sec. 515.560(d)(3).
    (vi) 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 authorization includes 
participation by a reasonable number of adult chaperones to accompany 
the secondary school student(s) to Cuba. A secondary school group 
planning to engage in such transactions in Cuba must carry a letter from 
the secondary school sponsoring the trip, citing the number of the 
school's specific license and listing the names of all persons traveling 
with the group.
    (vii) The organization of and preparation for transactions and 
activities described in paragraphs (a)(2)(i) through (a)(2)(vi) of this 
section by a full-time employee of a U.S. academic institution. An 
individual engaging in such transactions must carry a written letter 
from the individual's U.S. academic institution, citing the number of 
that

[[Page 589]]

institution's specific license and stating that the individual is 
regularly employed there.

    Note to paragraph (a):
    See Secs. 501.601 and 501.602 of this chapter for applicable 
recordkeeping and reporting requirements. Exportation of equipment and 
other items, including the transfer of technology or software to foreign 
persons (``deemed exportation''), and items not eligible for Department 
of Commerce GFT or BAG License Exceptions, 15 CFR 740.12 and 740.14, may 
require separate licensing from the Department of Commerce.

    (b) Specific license. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and other transactions that are directly incident to:
    (1) Educational activities described in paragraphs (a)(2)(i) through 
(a)(2)(iii) of this section not covered by a specific license issued 
pursuant to paragraph (a) of this section to an accredited U.S. academic 
institution; or
    (2) Educational exchanges not involving academic study pursuant to a 
degree program when those exchanges take place under the auspices of an 
organization that sponsors and organizes such programs to promote 
people-to-people contact.
    (c) Transactions related to activities that are primarily tourist-
oriented, including self-directed educational activities that are 
intended only for personal enrichment, are not authorized by this 
section.

[64 FR 25816, May 13, 1999]



Sec. 515.566  Religious activities in Cuba.

    (a) Specific license for U.S. religious organizations--(1) Issuance; 
renewal. A specific license may be issued to a religious organization 
located in the United States authorizing the organization and 
individuals and groups affiliated with the organization to engage, under 
the auspices of the organization, in religious activities involving 
transactions (including travel-related transactions) in which Cuba or a 
Cuban national has an interest. The application for the specific license 
must set forth examples of religious activities to be undertaken in 
Cuba. The religious organization's specific license may be renewed after 
a period of two years to authorize the organization and individuals and 
groups affiliated with the organization to continue to engage in the 
transactions authorized under the organization's license.
    (2) Scope of transactions authorized under U.S. religious 
organization's specific license; documentation. Upon receipt by the 
religious organization located in the United States of a specific 
license pursuant to paragraph (a)(1) of this section, the organization 
and individuals or groups affiliated with the organization 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 religious activities in Cuba under the auspices of the 
organization. Travel-related transactions pursuant to this authorization 
must be for the purpose of engaging, while in Cuba, in a full-time 
program of religious activities. Financial and material donations to 
Cuba or Cuban nationals are not authorized by this paragraph (a)(2). All 
individuals who engage in transactions in which Cuba or Cuban nationals 
have an interest (including travel-related transactions) pursuant to 
this paragraph (a)(2) must carry with them a letter from the 
specifically-licensed U.S. religious organization, citing the number of 
the organization's specific license and confirming that they are 
affiliated with the organization and are traveling to Cuba to engage in 
religious activities under the auspices of the organization.

    Note to paragraph (a):
    See Secs. 501.601 and 501.602 of this chapter for applicable 
recordkeeping and reporting requirements. Exportation of items to be 
used in Cuba may require separate licensing by the Department of 
Commerce.

    (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 other transactions that are directly incident to 
religious activities not covered by a specific license issued pursuant 
to paragraph (a) of this section to a U.S. religious organization. 
Specific licenses may be issued pursuant to this section authorizing 
transactions for multiple trips over an extended period of time to 
engage in a full-time program of religious activities in Cuba.

[64 FR 25817, May 13, 1999]

[[Page 590]]



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

    (a) General license. The travel-related transactions set forth in 
Sec. 515.560(c) and such additional transactions as are directly 
incident to athletic competition by amateur or semi-professional 
athletes or amateur or semi-professional athletic teams traveling to 
participate in athletic competition held in Cuba 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 United States participants in the athletic competition are 
selected by the United States federation for the relevant sport; and
    (3) The competition is open for attendance, and in relevant 
situations participation, by the Cuban public.

    Note to paragraph (a):
    See Secs. 501.601 and 501.602 of this chapter for applicable 
recordkeeping and reporting requirements. Exportation of items to be 
used in Cuba may require separate licensing by the Department of 
Commerce.

    (b) Specific licenses. (1) Specific licenses, including for multiple 
trips to Cuba over an extended period of time, may be issued on a case-
by-case basis authorizing the travel-related transactions set forth in 
Sec. 515.560(c) and other transactions that are directly incident to 
participation in a public performance, clinic, workshop, athletic or 
other competition, or exhibition in Cuba by participants in such 
activities, provided that:
    (i) The event is open for attendance, and in relevant situations 
participation, by the Cuban public;
    (ii) All profits from the event after costs are donated to an 
independent nongovernmental organization in Cuba or a U.S.-based 
charity, with the objective, to the extent possible, of promoting 
people-to-people contacts or otherwise benefitting the Cuban people.
    (2) In addition to those transactions authorized by Sec. 515.571, 
specific licenses may be issued on a case-by-case basis authorizing 
transactions incident to participation in a public exhibition, 
performance, clinic, workshop, or competition in the United States by a 
Cuban national who enters the United States for the purpose of such 
participation on a visa or other travel authorization issued by the 
Department of State.
    (c) Specific licenses will not be issued pursuant to this section 
authorizing any:
    (1) Payment to Cuba or any national thereof for appearance fees or 
other such payments in connection with or resulting from any public 
exhibition, performance, clinic, workshop, or competition in the United 
States or in Cuba; or
    (2) Debit to a blocked account.

[64 FR 25817, May 13, 1999]



Sec. 515.568  [Reserved]



Sec. 515.569  Foreign passengers' baggage.

    The importation of Cuban-origin goods, otherwise prohibited by this 
part, brought into the United States as baggage by any person arriving 
in the United States other than a citizen or resident of the United 
States is hereby authorized, notwithstanding the provisions of 
Sec. 515.803, provided that such goods are not in commercial quantities 
and are not imported for resale. This authorization does not apply to 
the importation of Cuban-origin alcohol or tobacco products.

[64 FR 25818, May 13, 1999]



Sec. 515.570  Remittances to nationals of Cuba.

    (a) Family remittances authorized. (1) Persons subject to the 
jurisdiction of the United States who are 18 years of age or older are 
authorized to make remittances to a national of Cuba resident in Cuba or 
in the authorized trade territory (including any member of his or her 
household) who is a close relative of the remitter or of the remitter's 
spouse, for the support of the close relative provided that:
    (i) The remitter's total remittances pursuant to paragraphs (a) and 
(b) of this section to any one Cuban household, regardless of the number 
of close relatives comprising the household, do not exceed $300 in any 
consecutive 3-month period; and

[[Page 591]]

    (ii) The remittances are not made from a blocked source, except that 
remittances to Cuban households located in the authorized trade 
territory may come from a blocked account in a banking institution 
within the United States held in the name of, or in which the beneficial 
interest is held by, the payee or members of the payee's household.
    (2) A person authorized to make remittances under this paragraph (a) 
and who is authorized to engage in travel-related transactions relating 
to Cuba pursuant to a general license contained in or specific license 
issued pursuant to this part may carry no more than $300 in total 
remittances authorized in this paragraph (a), and only if the 
remittances will not exceed the maximum amount set forth in paragraph 
(a) of this section for any payee within the past 3 months. See 
Sec. 515.560(c)(4).
    (3) For purposes of this paragraph (a), the term close relative used 
with respect to any person means such person's spouse, child, 
grandchild, parent, grandparent, great grandparent, uncle, aunt, 
brother, sister, nephew, niece, first cousin, mother-in-law, father-in-
law, son-in-law, daughter-in-law, sister-in-law, brother-in-law, or the 
spouse, widow, or widower of any of the foregoing.

    Note to paragraph (a):
    The maximum amount set forth in paragraph (a) of this section does 
not apply to remittances to a Cuban individual who has been specifically 
licensed as an unblocked national pursuant to Sec. 515.505(b), as 
remittances to unblocked persons do not require separate authorization.

    (b) Individual-to-household remittances authorized. (1) Persons 
subject to the jurisdiction of the United States who are 18 years of age 
or older are authorized to make remittances to any Cuban household 
(including to any Cuban individual living alone) located in Cuba or in 
the authorized trade territory, provided that:
    (i) The remitter's total remittances pursuant to paragraphs (a) and 
(b) of this section to any one Cuban household do not exceed $300 in any 
consecutive 3-month period;
    (ii) No member of the payee's household is a senior-level Cuban 
government official or senior-level Cuban communist party official; and
    (iii) The remittances are not made from a blocked source, except 
that remittances to Cuban households located in the authorized trade 
territory may come from a blocked account in a banking institution 
within the United States held in the name of, or in which the beneficial 
interest is held by, the payee or members of the payee's household.
    (2) A person authorized to make remittances under this paragraph (b) 
and who is authorized to engage in travel-related transactions relating 
to Cuba pursuant to a general license contained in or specific license 
issued pursuant to this part may carry no more than $300 in total 
remittances authorized in paragraphs (a) and (b) of this section, and 
only if the remittances will not exceed the maximum amount set forth in 
paragraph (a) or (b) of this section for any payee within the past 3 
months. See Sec. 515.560(c)(4).

    Note to paragraph (b):
    The maximum amount set forth in paragraph (b) of this section does 
not apply to remittances to a Cuban individual who has been specifically 
licensed as an unblocked national pursuant to Sec. 515.505(b), as 
remittances to unblocked persons do not require separate authorization.

    (c) Emigration-related remittances authorized. Persons subject to 
the jurisdiction of the United States are authorized to remit the 
following amounts:
    (1) Up to $500 on a one-time basis to any Cuban national for the 
purpose of covering the payee's preliminary expenses associated with 
emigrating from Cuba to the United States. This remittance may be sent 
through a licensed remittance forwarding service before the payee has 
received a valid visa issued by the State Department or other approved 
U.S.-immigration document, but may not be carried to Cuba by the 
remitter during this period. A person who is authorized to engage in 
travel-related transactions relating to Cuba pursuant to a general 
license contained in or specific license issued pursuant to this part 
may carry remittances pursuant to this paragraph (c)(1), provided the 
traveler can demonstrate each visa recipient's full name and date of 
birth and the number and date of issuance of the U.S. visa or other 
travel authorization issued. See

[[Page 592]]

Sec. 515.560(c)(4). Any amount remitted or carried to Cuba directly or 
indirectly in conjunction with the processing of a letter of invitation 
or similar document must be applied against the $500 limit; and
    (2) Up to an additional $500 on a one-time basis to any Cuban 
national for the purpose of enabling the payee 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. 
Such remittances may be transferred only after the Cuban individual has 
received a valid visa issued by the State Department or other approved 
U.S. immigration documentation. Persons remitting amounts pursuant to 
this paragraph (c)(2) must provide to the remittance forwarder the visa 
recipient's full name and date of birth and the number and date of 
issuance of the U.S. visa or other travel authorization issued. A person 
who is authorized to engage in travel-related transactions relating to 
Cuba pursuant to a general license contained in or specific license 
issued pursuant to this part may carry remittances pursuant to this 
paragraph (c)(2), provided the traveler can demonstrate each visa 
recipient's full name and date of birth and the number and date of 
issuance of the U.S. visa or other travel authorization issued. See 
Sec. 515.560(c)(4).
    (d) 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 
independent nongovernmental entities in Cuba;
    (2) Repatriation of earnings by a Cuban scholar pursuant to 
Sec. 515.565(a)(2)(v) in excess of the amount specified in paragraph (a) 
of this section;
    (3) Remittances by persons subject to U.S. jurisdiction from blocked 
accounts to Cuban households in the authorized trade territory in excess 
of the amount specified in paragraphs (a) and (b) of this section; or
    (4) 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 medical emergency.

[64 FR 25818, May 13, 1999]



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 enters 
the United States from Cuba on a visa or other travel authorization 
issued by the State Department 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 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 
non-scheduled flights or voyages between the United States and Cuba, 
provided that the carrier used has a carrier service provider license 
issued 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.
    (b) 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 enters the United States on a visa or other travel 
authorization issued by the State Department to or upon the order of 
such Cuban national are authorized provided that:
    (1) 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;
    (2) The total of all such payments and transfers of credit made 
under this section from the accounts of such

[[Page 593]]

Cuban national do not exceed $250 in any one calendar month; and
    (3) No payment or transfer is made from a blocked account in which a 
specially designated national has an interest.
    (c) 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.

[64 FR 25819, May 13, 1999]



Sec. 515.572  Authorization of transactions incident to the provision of travel services, carrier services, and remittance forwarding services.

    (a)(1) Authorization of travel service provider. The following 
persons wishing to provide services in connection with travel to Cuba 
are ``travel service providers'' for purposes of this part: Travel 
agents, ticket agents, commercial and noncommercial organizations that 
arrange travel to Cuba; tour operators; persons arranging through 
transportation to Cuba; persons chartering an aircraft or vessel on 
behalf of others in Cuba; and persons arranging hotel accommodations, 
ground transportation, local tours, and similar travel activities on 
behalf of others in Cuba. Travel service providers must obtain 
authorization from the Office of Foreign Assets Control before providing 
services with respect to travel to Cuba. The list stated above should 
not be considered exhaustive, as other persons may be ``travel service 
providers'' within the meaning of this part. Opinions may be obtained 
from the Office of Foreign Assets Control concerning the applicability 
of this licensing requirement in individual cases.
    (2) Authorization of carrier service provider. Persons subject to 
U.S. jurisdiction wishing to provide carrier services by aircraft or 
vessels incidental to their non-scheduled flights or voyages to, from, 
or within Cuba are ``carrier service providers'' for purposes of this 
part. Carrier service providers must obtain authorization from the 
Office of Foreign Assets Control before providing services with respect 
to non-scheduled flights or voyages to, from, or within Cuba. Carriage 
to or from Cuba of any merchandise, cargo or gifts, other than those 
permitted to individual travelers as accompanied baggage, must also be 
authorized by licenses issued by the U.S. Department of Commerce.
    (3) Authorization of remittance forwarders. Persons subject to U.S. 
jurisdiction, including persons who provide payment forwarding services 
and noncommercial organizations acting on behalf of donors, who wish to 
provide services in connection with the collection or forwarding of 
remittances authorized pursuant to this part must obtain authorization 
from the Office of Foreign Assets Control. Depository institutions, as 
defined in Sec. 515.333, are exempt from this requirement.
    (b) Terms and conditions of authorization to engage in service 
transactions. Authorization to engage in service transactions will be 
issued only upon the applicant's written affirmation and subsequent 
demonstration that it does not participate in discriminatory practices 
of the Cuban government against certain residents and citizens of the 
United States. Examples of such practices include, but are not limited 
to, charging discriminatory rates for air travel or requiring payment 
for services, such as hotel accommodations and meals, not desired, 
planned to be utilized, or actually utilized, based on such 
characteristics as race, color, religion, sex, citizenship, place of 
birth, or national origin. Authorization, whether a grant of provisional 
authorization or a license issued pursuant to this part, does not permit 
a travel or carrier service provider to provide services in connection 
with any individual's transactions incident to travel which are 
prohibited by this part.
    (c) Initial applications for licenses. The initial application for a 
license shall contain:
    (1) The applicant organization's name, address, telephone number, 
and the name of an official of the applicant organization responsible 
for its licensed services;
    (2) The state of applicant's organization, if a juridical entity, 
the address of its principal place of business and all branch offices, 
the identity and ownership percentages of all shareholders or partners, 
and the identity and position of all principal officers and directors;

[[Page 594]]

    (3) Copies of any bylaws, articles of incorporation, partnership 
agreements, management agreements, or other documents pertaining to the 
organization, ownership, control, or management of the applicant; and
    (4)(i) In the case of applications for authorization to serve as 
travel or carrier service providers, a report on the forms and other 
procedures used to establish that each customer is in full compliance 
with U.S. law implementing the Cuban embargo and either qualifies for 
one of the general licenses contained in this part authorizing travel-
related transactions in connection with travel to Cuba, has received a 
specific license from the Office of Foreign Assets Control issued 
pursuant to this part, or is a fully-hosted traveler as described in 
Sec. 515.420. In the case of a customer traveling pursuant to a general 
license or claiming to be traveling fully hosted, the applicant must 
demonstrate that it requires each customer to attest, in a signed 
statement, to his or her qualification for the particular general 
license or fully-hosted status claimed. The statement must provide facts 
supporting the customer's belief that he or she qualifies for the 
general license or fully-hosted status claimed. In the case of a 
customer traveling under a specific license, the applicant must 
demonstrate that it requires the customer to furnish it with a copy of 
the license. The copy of the signed statement or the specific license 
must be maintained on file with the applicant.
    (ii) In the case of applications for authorization as remittance 
forwarders, a report on the forms, account books, and other 
recordkeeping procedures used to determine whether each customer has 
violated the terms of any authorization for remittances contained in or 
issued pursuant to this part, or sent remittances to persons ineligible 
to receive them under Sec. 515.570; and the method by which remittances 
are sent to Cuba and the procedures used by the applicant to ensure that 
the remittances are received by the persons intended.
    (d) Required reports and recordkeeping. (1) Each specific license or 
grant of provisional authority shall require that the service provider 
furnish quarterly reports to the Department of the Treasury, Office of 
Foreign Assets Control, Washington, DC 20220, during the term of the 
license. The required content of such reports and their due dates shall 
be provided to the service provider in a letter authorizing the provider 
to commence services. Each such report will cover only the three-month 
period immediately preceding the date of the report.
    (2) While 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, need not be submitted with 
quarterly reports, this information must be retained on file with all 
other information required by Sec. 515.601 of this chapter. These 
records must be furnished to the Office of Foreign Assets Control on 
demand pursuant to Sec. 515.602 of this chapter.
    (3) Presentation of passenger lists. Tour operators, persons 
operating an aircraft or vessel, or persons chartering an aircraft or 
vessel on behalf of others, for travel to, from, and within Cuba must 
furnish the U.S. Customs Service on demand a list of passengers on each 
flight or voyage to, from, and within Cuba.
    (e) Procedures governing the grant of provisional authority, denial, 
suspension, or revocation of authority to engage in service 
transactions--(1) Grant of provisional authority. Following submission 
of a complete application as described in paragraph (c) of this section, 
the submission of any additional relevant information, and a preliminary 
evaluation by the Office of Foreign Assets Control, the applicant will 
be notified in writing that provisional authority has been granted to 
provide the services contemplated in the application. This provisional 
authority to provide services will remain in effect pending a final 
decision to grant or deny the license.
    (2) Denial of license--(i) Notice of denial. If the Director, Office 
of Foreign Assets Control, determines that the application for a license 
to engage in service transactions related to travel to Cuba, carrier 
service transactions

[[Page 595]]

related to travel to Cuba, or transactions related to remittance 
forwarding should be denied for any reason, notice of denial shall be 
given to the applicant. The notice of denial shall state the reasons for 
the denial.
    (ii) Grounds for denial. The causes sufficient to justify denial of 
an application for a license may include, but need not be limited to:
    (A) Any cause which would justify suspension or revocation of the 
authority of a service provider pursuant to paragraph (e)(3) of this 
section;
    (B) Failure to file a full and complete application;
    (C) Any willful misstatement of pertinent facts in the application;
    (D) Evidence indicating that the applicant participates in 
discriminatory practices of the Cuban Government against certain 
residents and citizens of the United States as described in paragraph 
(b) of this section; or
    (E) A reputation imputing to the applicant criminal, dishonest, or 
unethical conduct, or a record of such conduct.
    (3) Suspension or revocation of a license or provisional 
authorization. A license or provisional authorization issued pursuant to 
this section may be suspended for a specific period of time, or revoked, 
for the following reasons:
    (i) The service provider has willfully made or caused to be made in 
any application for any license, request for a ruling or opinion, or 
report be filed with the Office of Foreign Assets Control, any statement 
that was, at the time and in light of the circumstances under which it 
was made, false or misleading with respect to any material fact, or has 
omitted to state in any application, request for ruling or opinion, or 
report any material fact that was required;
    (ii) The service provider has failed to file timely reports or 
comply with the recordkeeping requirements of his license or provisional 
authorization.
    (iii) The service provider has been convicted, at any time after 
filing an application for a license under this section, of any felony or 
misdemeanor that:
    (A) Involved the importation, exportation, or transfer of property 
in violation of any law or regulation administered by the Office of 
Foreign Assets Control;
    (B) Arose directly out of the conduct of the business covered by the 
license; or
    (C) Involved larceny, extortion, forgery, counterfeiting, fraudulent 
concealment, embezzlement, fraudulent conversion, misappropriation of 
funds, or a violation of the Customs laws, export or import control 
laws, or banking laws.
    (iv) The service provider has violated any provision of law enforced 
by the Office of Foreign Assets Control or the rules or regulations 
issued under any such provision;
    (v) The service provider has counseled, commanded, induced, 
procured, or knowingly aided or abetted the violation by any other 
person of any provision of any law or regulation referred to above;
    (vi) The service provider has, in the course of the business covered 
by the license, with felonious intent, in any manner willfully and 
knowingly deceived, defrauded, misled, threatened, or coerced any client 
or prospective client; or
    (vii) The service provider has committed any other act or omission 
that demonstrates unfitness to conduct the business covered by the 
license.

[57 FR 53999, Nov. 16, 1992, as amended at 59 FR 31142, June 17, 1994; 
59 FR 44886, Aug. 30, 1994; 63 FR 27349, May 18, 1998. Redesignated and 
amended at 64 FR 25813, 25819, May 13, 1999]



Sec. 515.573  Transactions by news organizations.

    (a) Specific licenses may be issued authorizing all transactions 
necessary for the establishment and operation of news bureaus in Cuba 
whose primary purpose is the gathering and dissemination of news to the 
general public. Transactions that may be authorized include, but are not 
limited to, those incident to the following:
    (1) Leasing office space and securing related goods and services;
    (2) Hiring Cuban nationals to serve as support staff;
    (3) Purchasing Cuban-origin goods for use in the operation of the 
office; and

[[Page 596]]

    (4) Paying fees related to the operation of the office in Cuba.
    (b) 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.
    (c) Specific licenses may be issued authorizing transactions related 
to hiring Cuban nationals to provide reporting services or other 
services related to the gathering and dissemination of news.
    (d) Note: The number assigned to a specific license issued pursuant 
to this section should be referenced in all import documents, and in all 
funds transfers and other banking transactions through banks organized 
or located in the United States, in connection with the licensed 
transaction to avoid the blocking of goods imported from Cuba and the 
interruption of the financial transactions with Cuba.

[60 FR 54197, Oct. 20, 1995. Redesignated at 64 FR 25813, May 13, 1999]



Sec. 515.574  Support for the Cuban people.

    (a) Specific licenses may be issued on a case-by-case basis 
authorizing the travel-related transactions set forth in Sec. 515.560(c) 
and other transactions that are intended to provide support for the 
Cuban people including, but not limited to, the following:
    (1) Activities of recognized human rights organizations; and
    (2) Activities of individuals and non-governmental organizations 
which promote independent activity intended to strengthen civil society 
in Cuba.
    (b) Licenses will only be issued pursuant to this section upon a 
clearly articulated showing that the proposed transactions are 
consistent with the purposes of this part and that no significant 
accumulation of funds or financial benefit will accrue to the Government 
of Cuba.

[60 FR 54197, Oct. 20, 1995, as amended at 64 FR 25819, May 13, 1999]



Sec. 515.575  Humanitarian projects.

    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 
additional transactions as are directly incident to certain humanitarian 
projects in or related to Cuba not otherwise covered by this part that 
are designed to directly benefit the Cuban people. Such projects may 
include, but are not limited to, medical and health-related projects, 
environmental projects, projects involving non-formal educational 
training including adult literacy and vocational skills, community-based 
grass roots projects, projects suitable to the development of small-
scale private enterprise, projects that are related to agricultural and 
rural development which promote independent activity, and projects 
involving the donation of goods to meet basic human needs as provided in 
15 CFR 740.12(b) of the Export Administration Regulations, 15 CFR parts 
730-774. Specific licenses may be issued authorizing transactions for 
multiple visits for the same project over an extended period of time by 
applicants demonstrating a significant record of overseas humanitarian 
projects.

[64 FR 25819, May 13, 1999]



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

    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 
additional transactions as are directly incident to activities by 
private foundations or research or educational institutes that have an 
established interest in international relations to collect information 
related to Cuba for noncommercial purposes, not otherwise covered by the 
general license for professional research contained in Sec. 515.564 or 
more properly issued under Sec. 515.575, relating to humanitarian 
projects. Specific licenses may be issued pursuant to this section 
authorizing transactions for multiple trips to Cuba for the same project 
over an extended period of time.

[64 FR 25820, May 13, 1999]

[[Page 597]]



                           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.

    (a) Attention is directed to section 16 of the Trading with the 
Enemy Act (50 U.S.C. App. 16--``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.
    (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.
    (3) The Secretary of the Treasury may impose a civil penalty of not 
more than $55,000 per violation on any person who violates any license, 
order, or regulation issued under TWEA.
    (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.



Sec. 515.702  Prepenalty notice; contents; respondent's rights; service.

    (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 Trading 
with the Enemy Act, and the Director determines that further proceedings 
are warranted, he or she shall issue to the person concerned a notice of 
his or her intent to impose a monetary penalty and/or forfeiture. 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 and/or 
forfeiture.
    (2) Respondent's rights--(i) Right to respond. The prepenalty notice 
shall also

[[Page 598]]

inform the respondent of respondent's right to respond in writing to the 
notice within 30 calendar days of the mailing or other service of the 
notice pursuant to paragraph (c) of this section, as to why a monetary 
penalty and/or forfeiture should not be imposed, or, if imposed, why it 
should be in a lesser amount than proposed.
    (ii) Right to request a hearing. The prepenalty notice shall also 
inform the respondent that, in the response provided for in paragraph 
(b)(2)(i) of this section, the respondent may also request a hearing 
conducted pursuant to 5 U.S.C. 554-557 to present the respondent's 
defenses to the imposition of a penalty and/or forfeiture and to offer 
any other information that the respondent believes should be included in 
the agency record prior to a final determination concerning the 
imposition of a penalty and/or forfeiture. A failure to request a 
hearing within 30 calendar days of service of the prepenalty notice 
constitutes a waiver of a hearing.
    (iii) Right to request discovery prior to hearing. The prepenalty 
notice shall also inform the respondent of the right to discovery prior 
to a requested hearing. Discovery must be requested in writing in the 
response provided for in paragraph (b)(2)(i) of this section, jointly 
with respondent's request for a hearing. A failure to file a request for 
discovery within 30 calendar days of service of the prepenalty notice 
constitutes a waiver of prehearing discovery.
    (c) Service. The prepenalty notice, or any amendment or supplement 
thereto, shall be served upon the respondent. Service shall be presumed 
completed:
    (1) Upon mailing a copy by registered or certified mail, return 
receipt requested, addressed to the respondent at the respondent's last 
known address; or
    (2) Upon the mailing date stated in a date-stamped postal receipt 
presented by the Office of Foreign Assets Control with respect to any 
respondent who has refused, avoided, or in any way attempted to decline 
delivery, tender, or acceptance of the registered or certified letter or 
has refused to recover a registered or certified letter served; or
    (3) Upon personal service by leaving a copy with the respondent or 
an officer, a managing or general agent, or any other agent authorized 
by appointment or by law to accept or receive service for the respondent 
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 prepenalty notice was left; or
    (4) 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 
(c)(1) through (3) of this section inappropriate or ineffective for 
service upon the nonresident respondent.



Sec. 515.703  Response to prepenalty notice; requests for hearing and prehearing discovery; waiver; informal settlement.

    (a) Deadline for response. The respondent shall have 30 calendar 
days from the date of mailing or other service of the prepenalty notice 
pursuant to Sec. 515.702(c) to respond thereto. The response, signed and 
dated, may be sent by facsimile transmission to the Office of Foreign 
Assets Control, at 202/622-1657, or by courier or other expedited means 
at any time during the 30-day response period if an original copy is 
sent concurrently via the U.S. Postal Service, registered or certified 
mail, return receipt requested. The date shown on the date-stamped 
registered or certified mail postal receipt will constitute the filing 
date of the response.
    (b) Form and contents of response--(1) In general. 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 be responsive to the allegations contained 
therein and set forth the nature of the respondent's defenses.
    (i) The response must admit or deny specifically each separate 
allegation of

[[Page 599]]

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 operate as a denial. Failure to deny, controvert, or 
object to any allegation will be deemed an admission of that allegation.
    (ii) The response must also 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 or partial defense 
not specifically set forth in the response shall be deemed waived, and 
evidence thereon may be refused, except for good cause shown.
    (iii) The response must also accurately state, for each respondent, 
the respondent's full name and address for future service, together with 
current telephone and, if applicable, facsimile machine numbers and area 
code. If respondent is represented by counsel, counsel's full name and 
address, together with telephone and facsimile numbers and area code, 
may be provided in lieu of service information for the respondent. The 
respondent or respondent's counsel of record is responsible for 
providing timely written notice to the parties of any subsequent changes 
in the information provided.
    (2) Request for hearing and prehearing discovery; waiver. Any 
request for an administrative hearing and prehearing discovery must be 
made, if at all, in the written response made pursuant to this section 
and within the 30 calendar day period specified in Sec. 515.705(a). A 
failure to request a hearing and prehearing discovery in writing within 
30 calendar days of service of the prepenalty notice constitutes a 
waiver of a hearing and prehearing discovery. A response asserting that 
respondent reserves the right to request a hearing or prehearing 
discovery beyond the 30 calendar day period is ineffectual.
    (3) Informal settlement; response deadline. 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 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 calendar 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. A failure to request a hearing and prehearing 
discovery in writing within 30 calendar days of service of the 
prepenalty notice constitutes a waiver of a hearing and prehearing 
discovery.



Sec. 515.704  Penalty imposition or withdrawal absent a hearing request.

    (a) No violation. If, in the absence of a timely hearing request, 
after considering any response to the prepenalty notice and any relevant 
facts, the Director 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 civil 
monetary penalty or civil forfeiture pursuant to this subpart will be 
imposed.
    (b) Violation. If, in the absence of a timely hearing request, after 
considering any response to the prepenalty notice and any relevant 
facts, the Director 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 by the Office of Foreign Assets 
Control of the civil monetary penalty and/or civil forfeiture and/or 
other available disposition with respect to that respondent.
    (1) The penalty/forfeiture notice shall inform the respondent that 
payment of the assessed penalty must be made within 30 calendar days of 
the mailing of the penalty notice.

[[Page 600]]

    (2) The penalty/forfeiture notice shall inform the respondent of the 
requirement to furnish respondent's taxpayer identification number 
pursuant to 31 U.S.C. 7701 and that the Department intends to use such 
number for the purposes of collecting and reporting on any delinquent 
penalty amount in the event of a failure to pay the penalty imposed.



Sec. 515.705  Time and opportunity to request a hearing.

    (a) Deadline for hearing request. Within 30 calendar days of the 
date of mailing or other service of the prepenalty notice pursuant to 
Sec. 515.702(c), the respondent may file a written request for an agency 
hearing conducted pursuant to this section, to present the respondent's 
defenses to the imposition of a penalty and/or forfeiture and to offer 
any other information for inclusion, if found admissible pursuant to 
Sec. 515.715(a), into the agency record prior to a final determination 
concerning the imposition of a penalty and/or forfeiture.
    (b) Content of written response. If an agency hearing is requested 
by the respondent or by the respondent's counsel, the written hearing 
request must be accompanied by a written response to the prepenalty 
notice containing the information required by Sec. 515.703(b)(1)(i) 
through (iii). An untimely hearing request or written response to the 
prepenalty notice constitutes a waiver of a hearing.
    (c) Signature of filings. All hearing requests, motions, responses, 
interrogatories, requests for deposition transcripts, requests for 
protective orders, and all other filings relating to requests for and 
responses to discovery or pertaining to the hearing process, must be 
signed by each requesting party or, if represented, by each party's 
counsel.
    (d) Computation of time--(1) Final date on weekend or holiday. 
Whenever the final date for any requirement of this part falls on a 
Saturday, Sunday, Federal holiday, or other day on which the Office of 
Foreign Assets Control is not open for the transaction of business 
during normal working hours, the time for filing will be extended to the 
close of business on the next working day.
    (2) Closing time. The time for filing any document expires at 5:00 
p.m. local Washington, DC time on the last day when such filing may be 
made.



Sec. 515.706  Hearing.

    (a) Notice of hearing. (1) Any respondent requesting a hearing shall 
receive notice of the time and place of the hearing at the service 
address provided pursuant to Sec. 515.703(b)(1)(iii). Requests to change 
the time and place of a hearing may be submitted to the Administrative 
Law Judge, who may modify the original notice or subsequently set 
hearing dates. All requests for a change in the time or place of a 
hearing must be received in the Administrative Law Judge's chambers and 
served upon the parties no later than 15 working days before the 
scheduled hearing date.
    (2) The hearing shall be conducted in a manner consistent with 5 
U.S.C. 554-557, pursuant to section 1710(c) of the Cuban Democracy Act 
of 1992 (22 U.S.C. 6001-6010) and section 16 of the Trading with the 
Enemy Act (50 U.S.C. App. 16).
    (b) Powers. The Administrative Law Judge shall have all powers 
necessary to conduct the hearing, consistent with 5 U.S.C. 554-557, 
including the following powers:
    (1) To administer oaths and affirmations;
    (2) To require production of records or any information relative to 
any act or transaction subject to this part, including the imposition of 
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;
    (3) To receive relevant and material evidence and to rule upon the 
admission of evidence and offers of proof;
    (4) To take or cause depositions to be taken as authorized by this 
part;
    (5) To regulate the course of the hearing and the conduct of the 
parties and their counsel;
    (6) To hold scheduling or prehearing conferences as deemed 
necessary;
    (7) To consider and rule upon all procedural and other motions 
appropriate in an adjudicatory proceeding, provided that only the 
Secretary or the Secretary's designee shall have the power to grant any 
motion to dismiss the proceeding or to decide any other

[[Page 601]]

motion that results in a final determination of the merits of the 
proceeding;
    (8) To prepare and present to the Secretary or to the Secretary's 
designee a recommended decision as provided in Secs. 515.711(d) and 
515.716(e);
    (9) To recuse himself on motion made by a party or on the 
Administrative Law Judge's own motion;
    (10) To establish time, place, and manner limitations on the 
attendance of the public and the media for any public hearing;
    (11) To perform all necessary or appropriate measures to discharge 
the duties of an Administrative Law Judge; and
    (12) To set fees and expenses for witnesses, including expert 
witnesses.
    (c) Appearance and practice in a civil penalty hearing--(1) 
Appearance before an Administrative Law Judge by counsel. Any member in 
good standing of the bar of the highest court of any state, 
commonwealth, possession, or territory of the United States, or the 
District of Columbia may represent respondents upon written notice to 
the Administrative Law Judge in a civil penalty hearing.
    (2) Appearance before an Administrative Law Judge by a nonlawyer. A 
respondent may appear on his own behalf; a duly authorized member of a 
partnership may represent the partnership; a duly authorized officer, 
director, or employee of any corporation may represent that corporation 
upon written notice to the Administrative Law Judge in a civil penalty 
hearing.
    (3) Office of Foreign Assets Control representation. The Office of 
Foreign Assets Control shall be represented by the Office of General 
Counsel of the United States Department of the Treasury.
    (d) Conflicts of interest--(1) Conflict of interest in 
representation. No individual shall appear as counsel for a party in a 
proceeding conducted pursuant to this subpart if it reasonably appears 
that such representation may be materially limited by that counsel's 
responsibilities to a third person, or by counsel's own interests.
    (2) Corrective measures. The 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.
    (e) Ex parte communications--(1) Definition. The term ex parte 
communication means any material oral or written communication not on 
the public record concerning the merits of an adjudicatory proceeding 
with respect to which reasonable prior notice to all parties is not 
given, on any material matter or proceeding covered by these regulations 
that takes place between:
    (i) A party to the proceeding, a party's counsel, or any other 
individual; and
    (ii) The Administrative Law Judge handling that proceeding, or the 
Secretary, or the Secretary's designee.
    (2) Exceptions. (i) A request to learn the status of the proceeding 
does not constitute an ex parte communication; and
    (ii) Settlement inquiries and discussions do not constitute ex parte 
communications.
    (3) Prohibition on ex parte communications. From the time a 
respondent requests a hearing until the date that the Secretary or the 
Secretary's designee issues a final decision, no party, interested 
person, or counsel therefor shall knowingly make or cause to be made an 
ex parte communication. The Administrative Law Judge, the Secretary, and 
the Secretary's designee shall not knowingly make or cause to be made to 
a party, or to any interested person or counsel therefor, any ex parte 
communication.
    (4) Procedure upon occurrence of ex parte communication. If an ex 
parte communication is received by the Administrative Law Judge, the 
Administrative Law Judge shall cause all 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. All parties to the proceeding shall have an opportunity, 
within 10 calendar days of the receipt of service of the notice or of 
receipt of a memorandum of the ex parte communication, to file responses 
thereto and to

[[Page 602]]

recommend any sanctions, in accordance with paragraph (e)(5) of this 
section, appropriate under the circumstances, or may file an 
interlocutory appeal with the Secretary or the Secretary's designee.
    (5) Sanctions. Any party to the proceeding, a party's counsel, or 
any other 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 for good cause shown, or that may be imposed 
upon interlocutory appeal taken to the Secretary or the Secretary's 
designee, including, but not limited to, exclusion from the hearing and 
an adverse ruling on the issue which is the subject of the prohibited 
communication.
    (f) Time limits. Except as provided elsewhere in this subpart, the 
Administrative Law Judge shall establish all time limits for filings 
with regard to hearings conducted pursuant to this subpart, except for 
decisions on interlocutory appeals filed with the Secretary or the 
Secretary's designee.
    (g) Failure to appear. The unexcused failure of a respondent to 
appear in person at a hearing or to have duly authorized counsel appear 
in respondent's place constitutes a waiver of the respondent's right to 
a hearing and is deemed an admission of the violation alleged. Without 
further proceedings or notice to the respondent, the Administrative Law 
Judge shall enter a finding that the right to a hearing was waived, and 
the case shall be determined pursuant to Sec. 515.704.



Sec. 515.707  Interlocutory appeal.

    (a) Interlocutory appeals. When exceptions, requests for extensions, 
or motions, including motions for summary disposition, are denied by the 
Administrative Law Judge, interlocutory appeals may be taken to the 
Secretary or to the Secretary's designee for a decision.
    (b) Filing deadline. Interlocutory appeals must be filed no later 
than 15 calendar days after the matter being appealed has been decided 
in writing by the Administrative Law Judge. Parties may request that the 
Administrative Law Judge transmit the written decision to the parties by 
facsimile transmission, courier, or other expedited means in addition to 
service of the decision via the U.S. Postal Service by registered or 
certified mail, return receipt requested. Such requests must be 
supported by a written statement of need for expedited delivery. Timely 
filing of the interlocutory appeal shall be determined by the date 
stated on the date-stamped registered or certified mail postal receipt.
    (c) Manner of filing. Interlocutory appeals to the Secretary or the 
Secretary's designee must be filed by facsimile transmission to 202/622-
1188, courier, or other expedited means, and sent concurrently by 
registered or certified mail, return receipt requested, to the 
Secretary's Office, U.S. Treasury Department, 1500 Pennsylvania Avenue, 
NW., Washington, DC 20220, with the envelope prominently marked 
``Attention: OFAC Interlocutory Appeal.'' Expedited service must also be 
made upon the Administrative Law Judge and all parties or, if 
represented, their counsel, with certified copies sent concurrently by 
registered or certified mail, return receipt requested.



Sec. 515.708  Settlement during hearing proceedings.

    Any party may, at any time during the hearing, unilaterally submit 
written offers or proposals for settlement of a proceeding to the 
Secretary or the Secretary's designee, at the address listed in 
Sec. 515.707(c). Submission of a written settlement offer does not 
provide a basis for adjourning or otherwise delaying all or any portion 
of a hearing. No settlement offer or proposal, nor any subsequent 
negotiation or resolution, is admissible as evidence in any hearing 
before this tribunal.



Sec. 515.709  Motions.

    (a) Written motions. Except as otherwise specifically provided 
herein, an application or request for an order or ruling must be made by 
written motion, in typed format.
    (1) All written motions must state with particularity the relief 
sought and must be accompanied by a proposed order.

[[Page 603]]

    (2) No oral argument may be held on written motions unless directed 
by the Administrative Law Judge. Written memoranda, briefs, affidavits, 
and other relevant material and documents may be filed in support of or 
in opposition to a motion.
    (b) Oral motions. A motion may be made orally on the record unless 
the Administrative Law Judge directs that such motion be made in 
writing.
    (c) Filing of motions--(1) In general. Motions by respondents must 
be filed with the Administrative Law Judge and served upon the Office of 
the Chief Counsel, Foreign Assets Control, U.S. Treasury Department, 
1500 Pennsylvania Avenue, NW., Washington, DC 20220, with the envelope 
prominently marked ``Urgent: Annex--Room 3133,'' unless otherwise 
directed by the Administrative Law Judge. Motions by the Office of 
Foreign Assets Control must be filed with the Administrative Law Judge 
and with each respondent or respondent's counsel. Motions may also be 
concurrently sent by facsimile transmission, courier, or other expedited 
means.
    (2) Interlocutory appeals. Motions related to interlocutory appeals 
to the Secretary or the Secretary's designee must be filed by facsimile 
transmission to 202/622-1188, by courier, or by other expedited means, 
and sent concurrently by registered or certified mail, return receipt 
requested, to the Secretary's Office, U.S. Treasury Department, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220, with the envelope 
prominently marked ``Attention: OFAC Interlocutory Appeal.'' Expedited 
service must also be made upon the Administrative Law Judge and all 
parties or, if represented, their counsel, with certified copies sent 
concurrently by registered or certified mail, return receipt requested.
    (d) Responses. (1) Any party may file a written response to a motion 
within 20 calendar days of the date of its mailing, by registered or 
certified mail pursuant to this subpart. If directed by the 
Administrative Law Judge, the time period in which to respond may be 
shortened or extended. The Administrative Law Judge may allow each party 
to file a response before finally ruling upon any oral or written 
motion. The Administrative Law Judge may allow a rejoinder to responses 
for good cause shown. If a rejoinder is permitted, it must be filed 
within 15 calendar days of the date the response was filed and served 
upon all parties.
    (2) The failure of a party to oppose a written motion or an oral 
motion made on the record is deemed to be consent by that party to the 
entry of an order substantially in the form of any proposed order 
accompanying the motion.
    (e) Dilatory motions. Frivolous, dilatory, or repetitive motions are 
prohibited. The filing of such motions may form the basis for sanctions.



Sec. 515.710  Discovery.

    (a) In general. The availability of information and documents 
through discovery is subject to the agency's assertion of privileges 
available to OFAC and/or to the Treasury and to the application of all 
exemptions afforded the agency 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) 
to all facets of discovery, including interrogatories, depositions that 
seek the release of trade secrets, proprietary materials, third-party 
confidential and/or commercially sensitive materials, placement of 
information, documents and/or materials under seal and/or protective 
order, and interlocutory appeals to the Secretary or the Secretary's 
designee from any decision of the Administrative Law Judge.
    (b) Types of discovery. Parties may obtain discovery by one or more 
of the following methods: depositions upon oral examination or written 
questions; written interrogatories; 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 U.S. 
Treasury Department or at the location where the Federal employee to be 
deposed performs his duties, whichever the Federal employee's supervisor 
or the Office of the Chief Counsel, Foreign Assets Control shall deem 
appropriate. All depositions of Federal employees shall be held at a 
mutually agreed upon date and time, and for a mutually agreed upon 
length of time.

[[Page 604]]

    (c) Interrogatories. Respondent's interrogatories must be served 
upon the Office of the Chief Counsel, Foreign Assets Control within 20 
calendar days of respondent's written request for a hearing. The Office 
of Foreign Assets Control's interrogatories must be served within 30 
calendar days of the receipt of service of respondent's interrogatories 
or within 30 calendar days of the receipt of respondent's written 
request for a hearing if no interrogatories are filed by respondent by 
that time. Parties have 30 calendar days to respond to interrogatories 
from 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.
    (d) Scope. Parties may obtain discovery regarding any matter not 
privileged which has material relevance to the merits of the pending 
action. It is not a ground for objection that the information sought 
will be inadmissible at the hearing if the information sought appears 
reasonably calculated to lead to discovery of admissible evidence. The 
Administrative Law Judge may make any order which justice requires to 
ensure that requests are not unreasonable, oppressive, excessive in 
scope or unduly burdensome, including the issuance of an order to show 
cause why a particular discovery request is justified upon the motion of 
the objecting party.
    (e) Privileged matter. Privileged documents are not discoverable. 
Privileges include, inter alia, 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 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) and the Freedom of Information Act (5 
U.S.C. 552(b)(1) through (9)).
    (f) Updating discovery. Whenever a party receives new or additional 
information or documentation, all information produced, and all 
information required to be provided pursuant to the discovery and 
hearing process, must automatically be updated. The Administrative Law 
Judge may impose sanctions for failure to update, including prohibiting 
opposition to claims or defenses raised, striking pleadings or staying 
proceedings, dismissing the action or any part thereof, rendering a 
judgment by default, and holding a party in contempt.
    (g) Time limits. All discovery, including all responses to discovery 
requests, shall be completed no later than 20 calendar days prior to the 
date scheduled for the commencement of the hearing. No exceptions to 
this time limit shall be permitted, unless the Administrative Law Judge 
finds on the record that good cause exists for waiving the requirements 
of this paragraph (g).



Sec. 515.711  Summary disposition.

    (a) In general. The Administrative Law Judge shall recommend that 
the Secretary or the Secretary's designee issue a final order granting a 
motion for summary disposition if the facts of the record show that:
    (1) There is no genuine issue as to any material fact; and
    (2) The moving party is entitled to a decision in its favor as a 
matter of law.
    (b) Filing of motions and responses. (1) Any party who believes that 
there is no genuine issue of material fact to be determined and that 
such party is entitled to a decision as a matter of law may move at any 
time for summary disposition in its favor of all or any part of the 
proceeding. Any party, within 20 calendar days after service of such a 
motion, or within such time period as allowed by the Administrative Law 
Judge, may file a response to such motion.
    (2) 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

[[Page 605]]

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.
    (c) Hearing on motion. At the request of any party or on his or her 
own motion, the Administrative Law Judge may hear oral argument on the 
motion for summary disposition.
    (d) Decision on motion. Following receipt of a motion for summary 
disposition and all responses thereto, the Administrative Law Judge 
shall determine whether the moving party is entitled to summary 
disposition. If the Administrative Law Judge determines that summary 
disposition is warranted, he or she shall submit a recommended decision 
to that effect to the Secretary. If the Administrative Law Judge finds 
that no party is entitled to summary disposition, he or she shall make a 
ruling denying the motion.
    (e) Interlocutory appeal. Following receipt of the Administrative 
Law Judge's recommended decision relating to summary disposition, each 
party has the right to an interlocutory appeal to the Secretary or the 
Secretary's designee. The interlocutory appeal must be filed within 20 
calendar days immediately following the Administrative Law Judge's 
recommended decision.
    (f) Partial summary disposition. If the Administrative Law Judge 
determines that a party is entitled to summary disposition as to certain 
claims only, the Administrative Law Judge shall defer submission of a 
recommended decision as to those claims. A hearing on the remaining 
issues must be ordered and those claims for which the Administrative Law 
Judge has determined that summary disposition is warranted will be 
addressed in the recommended decision filed at the conclusion of the 
hearing.



Sec. 515.712  Prehearing conferences and submissions.

    (a) Prehearing conferences. The Administrative Law Judge may, on his 
or her own motion, or at the request of any party for good cause shown, 
direct counsel for the parties to meet with him or her (in person, by 
telephone, or by teleconference) at a prehearing conference to address 
any or all of the following:
    (1) Simplification and clarification of the issues;
    (2) Stipulations, admissions of fact, and the contents, authenticity 
and admissibility into evidence of documents;
    (3) Matters of which official notice may be taken;
    (4) Limitation of the number of witnesses;
    (5) Summary disposition of any or all issues;
    (6) Resolution of discovery issues or disputes; and
    (7) Such other matters as may aid in the orderly disposition of the 
proceeding.
    (b) Prehearing orders. At, or within a reasonable time following the 
conclusion of, any prehearing conference, the Administrative Law Judge 
shall serve on each party an order setting forth any agreements reached 
and any procedural determinations made.
    (c) Prehearing submissions. Within 40 calendar days of the receipt 
of respondent's request for a hearing or at a time set by the 
Administrative Law Judge, the Office of Foreign Assets Control shall 
serve on the respondent and upon the Administrative Law Judge, the 
following:
    (1) Stipulations of fact, if any;
    (2) A list of the exhibits to be introduced at the hearing along 
with a copy of each exhibit; and
    (3) A list of witnesses to be called to testify at the hearing, 
including the name and address of each witness and a short summary of 
the expected testimony of each witness.
    (d) Deadline for respondent's and the other parties' submissions. 
Unless for

[[Page 606]]

good cause shown the Administrative Law Judge permits an extension of 
time to file, the respondent and the other parties shall have 20 
calendar days from the date of the submission by the Office of Foreign 
Assets Control of the items set forth in paragraph (c) of this section, 
and/or of any other party's service of items set forth in this paragraph 
(d), to serve upon the Administrative Law Judge and all parties, the 
following:
    (1) Its response to stipulations of fact, if any;
    (2) A list of the exhibits to be introduced at the hearing along 
with a copy of each exhibit; and
    (3) A list of witnesses to be called to testify at the hearing, 
including the name and address of each witness and a short summary of 
the expected testimony of each witness.
    (e) Effect of failure to comply. No witness may testify and no 
exhibits may be introduced at the hearing if such witness or exhibit is 
not listed in the prehearing submissions pursuant to paragraphs (c) and 
(d) of this section, except for good cause shown.



Sec. 515.713  Public hearings.

    (a) In general. All hearings shall be open to the public, unless the 
Administrative Law Judge, at his or her discretion, determines at any 
time prior to or during the hearing, that holding an open hearing would 
be contrary to the public interest. Within 20 calendar days of service 
of the notice of hearing from the Administrative Law Judge, any party 
may file with the Administrative Law Judge a request for a closed 
hearing, and any party may file a pleading in reply to such a request. 
Failure to file a request or a reply is deemed a waiver of any 
objections regarding whether the hearing will be public or closed.
    (b) Filing document under seal. (1) The Office of Foreign Assets 
Control may file any document or any part of a document under seal 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 or other Executive orders concerning disclosure of information, 
U.S. Treasury Department regulations, the Privacy Act, or the Freedom of 
Information Act.
    (2) The Administrative Law Judge shall also safeguard the security 
and integrity of any documents under seal and shall take all appropriate 
steps to preserve the confidentiality of such documents or any parts 
thereof, including closing portions of the hearing to the public. 
Release of any information under seal, in any form or manner, is subject 
to the same sanctions and the exercise of the same authorities as are 
provided with respect to ex parte communications under paragraph (e)(5) 
of this section.
    (3) Should the Administrative Law Judge deny placement of any 
documents under seal or under protective order, any party, and any 
person whose documents or materials are at issue, may file an 
interlocutory appeal to the Secretary or the Secretary's designee. In 
such cases the Administrative Law Judge must not release or expose any 
of the records or documents in question to the public or to any other 
parties for a period of 20 calendar days from the date of the 
Administrative Law Judge's ruling, in order to permit a petitioner the 
opportunity either to withdraw the records and documents or to file an 
interlocutory appeal with the Secretary or the Secretary's designee 
requesting an order that the records be placed under seal.
    (4) 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 respective 
parties, except when it may be necessary to retain a record until the 
judicial process is completed.
    (5) Written notice of all requests for release of protected 
documents or materials shall be given to the parties registered with the 
Administrative Law Judge at least 20 calendar days prior to any 
permitted release and prior to any access not specifically authorized 
under the protective order. A copy of all requests for information, 
including

[[Page 607]]

the name, address, and telephone number of the requester, shall be 
provided to the petitioner. Each request for access to protected 
material must also provide the names, addresses, and telephone numbers 
of all persons represented by the requester, including those on whose 
behalf the requester seeks access to protected information. The 
Administrative Law Judge shall impose sanctions provided under 
Sec. 515.706(e)(4) and (e)(5) for failure to provide this information.



Sec. 515.714  Conduct of hearings.

    (a) In general--(1) Overview. Hearings shall be conducted to provide 
a fair and expeditious presentation of the relevant disputed issues and 
facts. 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.
    (2) Order of hearing. The Office of Foreign Assets Control shall 
present its case-in-chief first, unless otherwise ordered in advance by 
the Administrative Law Judge or otherwise expressly specified by law or 
regulation. The Office of Foreign Assets Control 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.
    (3) Stipulations. Unless the Administrative Law Judge directs 
otherwise, all stipulations of fact and law previously agreed upon by 
the parties, and all documents, the admissibility of which has been 
previously stipulated, will be admitted into evidence upon commencement 
of the hearing.
    (b) Transcript. A record of the hearing shall be made by manual or 
electronic means, including through the use of audio recorded diskettes 
or audio-visual cassettes, and transcribed unless the Administrative Law 
Judge rules otherwise. The transcript shall be made available to any 
party upon payment of the cost thereof. The Administrative Law Judge 
shall have authority to order the record corrected, either upon a motion 
to correct, upon a motion to stipulate by the parties for good cause 
shown, or following notice to the parties upon the Administrative Law 
Judge's own motion. The Administrative Law Judge shall serve notice upon 
all parties, at the addresses provided by the parties pursuant to 
Sec. 515.703(b)(1)(iii), that the certified transcript, together with 
all hearing exhibits and exhibits introduced but not admitted into 
evidence at the hearing, has been filed with the Administrative Law 
Judge.



Sec. 515.715  Evidence.

    (a) Admissibility. (1) Except as is otherwise set forth in this 
section, evidence that is relevant and material is admissible to the 
fullest extent authorized by the Administrative Procedure Act and other 
applicable law.
    (2) Evidence may be excluded if it is misleading or its probative 
value is substantially outweighed by the danger of unfair prejudice or 
confusion of the issues, or considerations of undue delay, waste of 
time, or needless presentation of cumulative evidence.
    (3) Evidence that would be inadmissible under the Federal Rules of 
Evidence need not be deemed or ruled to be inadmissible in a proceeding 
conducted pursuant to this subpart if such evidence is relevant and 
material, and not unduly repetitive.
    (b) Official notice. (1) Official notice may be taken of any 
material fact which may be judicially noticed by a United States 
district court.
    (2) All matters officially noticed by the Administrative Law Judge 
shall appear on the record.
    (3) If official notice is requested or taken of any material fact, 
the parties, upon timely request, shall be afforded an opportunity to 
object.
    (c) Duplicate copies. A duplicate copy of a document is admissible 
to the same extent as the original, unless a genuine issue is raised as 
to whether the copy is in some material respect not a true and legible 
copy of the original.
    (d) Objections to admissibility of evidence. Objections to the 
admissibility of evidence must be timely made and rulings on all 
objections must appear on the record. Failure to object to admission of 
evidence or to any ruling constitutes a waiver of the objection.
    (e) Rejected exhibits. The Administrative Law Judge shall retain 
rejected

[[Page 608]]

exhibits, adequately marked for identification, in the event of an 
interlocutory appeal.
    (f) Stipulations. The parties may stipulate as to any relevant 
matters of fact or to the authenticity of any relevant documents. Such 
stipulations may be received into evidence at a hearing and are binding 
on the parties with respect to the matters therein stipulated.
    (g) Depositions of unavailable witnesses. If a witness is 
unavailable to testify at a hearing, and that witness has testified in a 
deposition within the United States to which all parties to the 
proceeding have received timely notice and an opportunity to 
participate, a party may offer as evidence all or any part of the 
transcript of the deposition, including deposition exhibits. All costs 
of depositions shall be borne by the party requesting the deposition.



Sec. 515.716  Proposed decisions; recommended decision of Administrative Law Judge; final decision.

    (a) Proposed decisions. Any party may file with the Administrative 
Law Judge a proposed decision within 30 calendar days after the parties 
have received notice that the transcript has been filed with the 
Administrative Law Judge, unless otherwise ordered by the Administrative 
Law Judge.
    (b) Reliance on relevant authorities. The proposed decision must be 
supported by citation to relevant authorities and by transcript page 
references to any relevant portions of the record. At the same time the 
proposed decision is filed, a post-hearing brief may be filed in 
support. The post-hearing brief shall be filed either as part of the 
same document or in a separate document.
    (c) Reply briefs. Reply briefs may be filed within 15 calendar days 
after the date on which the parties' proposed decision is due. Reply 
briefs must be strictly limited to responding to new matters, issues, or 
arguments raised in another party's papers. A party who has not filed a 
proposed decision or a post-hearing brief may not file a reply brief.
    (d) Simultaneous filing required. Absent a showing of good cause for 
the use of another procedure, the Administrative Law Judge shall not 
order the filing by any party of any brief or reply brief in advance of 
the other party's filing of its brief.
    (e) Recommended decision and filing of record. Within 45 calendar 
days after expiration of the time allowed for filing reply briefs, the 
Administrative Law Judge shall file with and certify to the Secretary or 
the Secretary's designee the record of the proceeding and the decision. 
The record must include the Administrative Law Judge's recommended 
decision, including a determination either that there was no violation 
by the person named in the prepenalty notice, or that there was a 
violation by the person named in the prepenalty notice, and the 
recommended monetary penalty and/or civil forfeiture and/or other 
disposition available to the Office of Foreign Assets Control. In 
addition to the proposed decision, the record must include all 
prehearing and hearing transcripts, exhibits, and rulings, and the 
motions, briefs, memoranda, and other supporting papers filed in 
connection with the hearing. The Administrative Law Judge shall have the 
recommended decision served upon each party.
    (f) Exceptions to the recommended decision. When the Administrative 
Law Judge has issued his recommended decision, the Administrative Law 
Judge or his representative shall contact each party by telephone at the 
telephone number provided by each party pursuant to 
Sec. 515.703(b)(1)(iii). Within 3 calendar days of telephoning the 
parties, the recommended decision shall be mailed by the Administrative 
Law Judge to the parties. A party may file written exceptions to the 
recommended decision with the Secretary or the Secretary's designee 
within 30 calendar days of the date the telephone call is placed by the 
Administrative Law Judge or his representative. A supporting brief may 
be filed at the time the exceptions are filed.
    (g) Final decision. The final decision of the Secretary or the 
Secretary's designee shall be based on a review of the Administrative 
Law Judge's recommended decision and the entire record of the 
proceeding. The final written decision shall be provided to all parties.

[[Page 609]]



Sec. 515.717  Judicial review.

    Any person may seek judicial review as provided under 5 U.S.C. 702 
for a penalty and/or forfeiture imposed pursuant to this part.



Sec. 515.718  Referral to United States Department of Justice; administrative collection measures.

    In the event that the respondent does not pay the 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.



                          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 
subpart D of part 501 of this chapter.

[62 FR 45106, Aug. 25, 1997]



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]



Sec. 515.803  Customs procedures; merchandise specified in Sec. 515.204.

    (a) With respect to merchandise specified in Sec. 515.204 (including 
nickel-bearing materials presumptively subject thereto) whether or not 
such merchandise has been imported into the United States, collectors of 
customs shall not accept or allow any:
    (1) Entry for consumption (including any appraisement entry, any 
entry of goods imported in the mails, regardless of value, and any other 
informal entries);
    (2) Entry for immediate exportation;
    (3) Entry for transportation and exportation;
    (4) Withdrawal from warehouse;
    (5) Transfer or withdrawal from a foreign-trade zone; or
    (6) Manipulation or manufacture in a warehouse or in a foreign-trade 
zone, unless either:
    (i) The merchandise was imported prior to 12:01 a.m., February 7, 
1962, or
    (ii) A specific license pursuant to this part is presented, or
    (iii) Instructions from the Office of Foreign Assets Control, 
authorizing the transaction are received, or
    (iv) The original of an appropriate certificate of origin as defined 
in Sec. 515.536(d) is presented.
    (b) Whenever a specific license is presented to a collector of 
customs in accordance with this section, one additional legible copy of 
the entry, withdrawal or other appropriate document with respect to the 
merchandise involved shall be filed with the collector of customs at the 
port where the transaction is to take place. Each copy of any such 
entry, withdrawal or other appropriate document, including the 
additional copy, shall bear plainly on its face the number of the 
license pursuant to which it is filed. The original copy of the specific 
license shall be presented to the collector in respect of each such 
transaction and shall bear a notation in ink by the licensee or person 
presenting the license showing the description, quantity and value of 
the merchandise to be entered, withdrawn or otherwise dealt with. This 
notation should be so placed and so written that there will exist no 
possibility of confusing it with anything placed on the license at the 
time of its issuance. If the license in fact authorizes the entry, 
withdrawal or other transaction with regard to the merchandise the 
collector, or other authorized customs employee, shall verify the 
notation by signing or initialing it after first assuring himself that 
it accurately describes the merchandise it purports to represent. The 
license shall thereafter be

[[Page 610]]

returned to the person presenting it and the additional copy of the 
entry, withdrawal or other appropriate document shall be forwarded by 
the collector to the Foreign Assets Control.
    (c)(1) Whenever the original of an appropriate certificate or origin 
as defined in Sec. 515.536(d) is presented to a collector of customs in 
accordance with this section, an additional legible copy of the entry, 
withdrawal or other appropriate document with respect to the merchandise 
involved shall be filed with the collector of customs at the port where 
the transaction is to take place. Each copy of the entry, withdrawal, or 
other appropriate document, including the additional copy, shall bear 
plainly on its face the following statement: ``This document is 
presented under the provisions of Sec. 515.536 (c) of the Cuban Assets 
Control Regulations.'' The original of the certificate of origin shall 
not be returned to the person presenting it. It shall be securely 
attached to the additional copy required by this subparagraph and shall 
be forwarded by the collector to the Office of Foreign Assets Control, 
Treasury Department, Washington, DC 20220. Collectors may forward such 
documents weekly or more often if the volume warrants.
    (2) If the original of an appropriate certificate of origin is 
properly presented to a collector of customs with respect to a 
transaction which is the first of a series of transactions which may be 
allowed in connection therewith under paragraph (a)(6)(iv) of this 
section (as, for example, where merchandise has been entered in a bonded 
warehouse and an appropriate certificate of origin is presented which 
relates to all of the merchandise entered therein but the importer 
desires to withdraw only part of the merchandise in the first 
transaction), the collector shall so note on the original of the 
appropriate certificate of origin and return it to the importer. In 
addition, the collector shall endorse his pertinent records so as to 
record what merchandise is covered by the appropriate certificate of 
origin presented. The collector may thereafter allow subsequent 
authorized transactions on presentation of the certificate of origin. 
The collector shall, with respect to each such transaction, demand an 
additional copy of each withdrawal or other appropriate document, which 
copy shall be promptly forwarded by the collector to the Office of 
Foreign Assets Control, Treasury Department, Washington, DC 20220, with 
an endorsement thereon reading:

    This document has been accepted pursuant to Sec. 515.808(c) (2) of 
the Cuban Assets Control Regulations. Appropriate certificate of origin 
No.--------------from (country).


When the final transaction has been effected under the certificate of 
origin, the original shall be taken up and attached to the entry and 
forwarded as in this paragraph.
    (d) Whenever a person shall present an entry, withdrawal or other 
appropriate document affected by this section and shall assert that no 
specific Foreign Assets Control license or appropriate certificate of 
origin as defined in Sec. 515.536 (d) is required in connection 
therewith, the collector of customs shall withhold action thereon and 
shall advise such person to communicate directly with the Office of 
Foreign Assets Control to request that instructions be issued to the 
collector to authorize him to take action with regard thereto.

[30 FR 15371, Dec. 14, 1965, as amended at 57 FR 1388, Jan. 14, 1992. 
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

[[Page 611]]

displays a valid control number assigned by OMB.

[62 FR 45106, Aug. 25, 1997]



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

535.502  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.

[[Page 612]]

535.540  Disposition of certain tangible property.
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  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: 18 U.S.C. 2332d; 31 U.S.C. 321(b); 50 U.S.C. 1701-1706; 
Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 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

[[Page 613]]

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 
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.

[[Page 614]]

    (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(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

[[Page 615]]

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]



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

[[Page 616]]

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.
    (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

[[Page 617]]

covered by Sec. 535.201, shall not transfer 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 618]]



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 619]]

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 620]]

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 621]]



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 622]]

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 623]]

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 624]]

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 625]]

    (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 626]]

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 627]]

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. 535.502  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 Secs. 535.211, 535.212, 535.213, 535.214 or 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 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,

[[Page 628]]

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 
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,

[[Page 629]]

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 
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

[[Page 630]]

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 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

[[Page 631]]

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 
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

[[Page 632]]

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 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]

[[Page 633]]



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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty of not to exceed $11,000 per violation may be 
imposed on any person who violates any license, order, or regulation 
issued under the Act;
    (2) Whoever willfully violates any license, order, or regulation 
issued under the Act shall, upon conviction, be fined not more than 
$50,000, or, if a natural person, may be imprisoned for not more than 
ten years, or both; and any officer, director, or agent of any 
corporation who knowingly participates in such violation may be punished 
by a like fine, imprisonment or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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

[[Page 634]]

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]



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 
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  Referral to United States Department of Justice.

    In the event that the person named does not pay the penalty imposed 
pursuant to this subpart or make payment arrangements acceptable to the 
Director within thirty days of the mailing of

[[Page 635]]

the written notice of the imposition of the penalty, the matter shall be 
referred to the United States Department of Justice for appropriate 
action to recover the penalty in a civil suit in a Federal district 
court.

[53 FR 7356, Mar. 8, 1988]



                          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 
subpart D of part 501 of this chapter.

[62 FR 45107, Aug. 25, 1997]



                   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]



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.
536.101  Relation of this part to other laws and regulations.

[[Page 636]]

                         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. 1601-1641, 
1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); E.O. 
12978, 60 FR 54579, 3 CFR, 1995 Comp., p. 415.

    Source: 62 FR 9960, Mar. 5, 1997, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



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]

[[Page 637]]



                         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.
    (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 638]]

    (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.
    (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.

[[Page 639]]

    (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 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.

[[Page 640]]

    (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 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: Please refer to the appendices at the end of 
this chapter for listings of persons determined to fall within this 
definition who have been designated pursuant to this part. Section 
501.807 of this chapter sets forth the procedures to be followed by 
persons seeking administrative reconsideration of their designation, or 
who wish to assert

[[Page 641]]

that the circumstances resulting in the designation are no longer 
applicable.

[62 FR 9960, Mar. 5, 1997, as amended at 62 FR 45107, Aug. 25, 1997]



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.



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

[[Page 642]]

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
    (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 list of specially 
designated narcotics traffickers 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,

[[Page 643]]

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.



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.
    (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.

[[Page 644]]

    (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 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;

[[Page 645]]

    (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. Section 206 of the Act, 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), provides 
that:
    (1) A civil penalty of not to exceed $11,000 per violation may be 
imposed on any person who violates any license, order, or regulation 
issued under the Act;
    (2) Whoever willfully violates any license, order, or regulation 
issued under the Act shall, upon conviction, be fined not more than 
$50,000, or, if a natural person, may be imprisoned for not more than 
ten years, or both; and any officer, director, or agent of any 
corporation who knowingly participates in such violation may be punished 
by a like fine, imprisonment or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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.



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

[[Page 646]]

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 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.

[[Page 647]]



                          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 
subpart D of part 501 of this chapter.

[62 FR 45107, Aug. 25, 1997]



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]



PART 537--BURMESE SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

537.201  Prohibited new investment by U.S. persons.
537.202  Prohibited approval or other facilitation by a U.S. person of a 
          foreign person's investment.
537.203  Evasions; attempts; conspiracies.
537.204  Exempt transactions.

                     Subpart C--General Definitions

537.301  Economic development of resources located in Burma.
537.302  Effective date.
537.303  Entity.
537.304  Foreign person.
537.305  General license.
537.306  Government of Burma.
537.307  License.
537.308  New investment.
537.309  Nongovernmental entity in Burma.
537.310  Person.
537.311  Resources located in Burma.
537.312  Specific license.
537.313  United States.
537.314  United States person; U.S. person.

                       Subpart D--Interpretations

537.401  Reference to amended sections.
537.402  Effect of amendment.
537.403  Economic development of resources located in Burma.
537.404  Purchase of shares in economic development projects in Burma.
537.405  Investments in entities involved in economic development 
          projects in Burma.
537.406  General supervision and guarantee.
537.407  Activities under pre-May 21, 1997 agreements.
537.408  Sale or purchase of goods, services or technology.
537.409  Approval or other facilitation of a foreign person's 
          investment.

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

537.501  General and specific licensing procedures.
537.502  Effect of license or authorization.
537.503  Exclusion from licenses and authorizations.
537.504  Divestiture of U.S. person's equity investment in Burma.

                           Subpart F--Reports

537.601  Recordkeeping and reporting requirements.

                          Subpart G--Penalties

537.701  Penalties.
537.702  Prepenalty notice.

[[Page 648]]

537.703  Response to prepenalty notice; informal settlement.
537.704  Penalty imposition or withdrawal.
537.705  Administrative collection action; referral to United States 
          Department of Justice.

                          Subpart H--Procedures

537.801  Procedures.
537.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

537.901  Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; sec 570, Pub. L. 104-208, 110 stat. 3009-166; E.O. 13047, 61 
FR 28301, 3 CFR, Comp., p. 202.

    Source: 63 FR 27847, May 21, 1998, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 537.101  Relation of this part to other laws and regulations.

    (a) This part is separate from, and independent of, the other parts 
of this chapter. 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.
    (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. 537.201  Prohibited new investment by U.S. persons.

    Except to the extent provided in regulations, orders, directives, or 
licenses that may by issued in conformity with section 570 of the 
Foreign Operations, Export Financing, and Related Programs 
Appropriations Act, 1997 (Public Law 104-208)(the ``Act''), new 
investment in Burma by United States persons is prohibited.
    Note to Sec. 537.201: Section 570 of the Act provides that the 
prohibition contained in this section may be waived, temporarily or 
permanently, by the President if he determines and certifies to Congress 
that the application of this sanction would be contrary to the national 
interests of the United States. Licenses are thus not available for 
purposes of authorizing transactions prohibited under this section in 
the absence of such a waiver determination and certification to 
Congress.



Sec. 537.202  Prohibited approval or other facilitation by a U.S. person of a foreign person's investment.

    Except to the extent provided in regulations, orders, directives, or 
licenses that may be issued pursuant to this part, any approval or other 
facilitation by a United States person, wherever located, of a 
transaction by a foreign person where the transaction would constitute 
prohibited new investment in Burma under this part if engaged in by a 
United States person or within the United States is prohibited.



Sec. 537.203  Evasions; attempts; conspiracies.

    Except to the extent provided in regulations, orders, directives, or 
licenses that may be issued pursuant to this part, any transaction by a 
United States person or within the United States that evades or avoids, 
or has the purpose of evading or avoiding, or attempts to violate, any 
of the prohibitions set forth in this part is prohibited.



Sec. 537.204  Exempt transactions.

    Nothing in this part shall be construed to prohibit the entry into, 
performance of, or financing of a contract to sell or purchase goods, 
services, or technology, except:
    (a) Where the entry into such a contract on or after the effective 
date is for the general supervision and guarantee of another person's 
performance of a contract for the economic development of resources 
located in Burma; or
    (b) Where such contract provides for payment, in whole or in part, 
in:
    (1) Shares of ownership, including an equity interest, in the 
economic development of resources located in Burma; or
    (2) Participation in royalties, earnings, or profits in the economic 
development of resources located in Burma.
    Note to Sec. 537.204: The term economic development of resources 
located in Burma is defined

[[Page 649]]

in Sec. 537.301 to exclude not-for-profit educational, health or other 
humanitarian programs or activities.



                     Subpart C--General Definitions



Sec. 537.301  Economic development of resources located in Burma.

    The term economic development of resources located in Burma shall 
not be construed to include not-for-profit educational, health, or other 
humanitarian programs or activities.



Sec. 537.302  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, May 21, 1997.



Sec. 537.303  Entity.

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



Sec. 537.304  Foreign person.

    The term foreign person means any citizen or national of a foreign 
state or any entity not organized under the laws of the United States.



Sec. 537.305  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.



Sec. 537.306  Government of Burma.

    The term Government of Burma includes:
    (a) The state and the Government of Burma, as well as any political 
subdivision, agency, or instrumentality thereof;
    (b) Any entity owned or controlled directly or indirectly by the 
foregoing.



Sec. 537.307  License.

    Except as otherwise specified, the term license means any license or 
authorization contained in this part, or issued pursuant to the 
authority of this part under procedures set forth in this part or in 
subpart C of part 501 of this chapter.



Sec. 537.308  New investment.

    The term new investment means any of the following activities, if 
such an activity is undertaken pursuant to an agreement, or pursuant to 
the exercise of rights under such an agreement, that is entered into 
with the Government of Burma or a nongovernmental entity in Burma on or 
after the effective date:
    (a) The entry into a contract that includes the economic development 
of resources located in Burma;
    (b) The entry into a contract providing for the general supervision 
and guarantee of another person's performance of a contract that 
includes the economic development of resources located in Burma;
    (c) The purchase of a share of ownership, including an equity 
interest, in the economic development of resources located in Burma; or
    (d) The entry into a contract providing for the participation in 
royalties, earnings, or profits in the economic development of resources 
located in Burma, without regard to the form of the participation.



Sec. 537.309  Nongovernmental entity in Burma.

    The term nongovernmental entity in Burma means a partnership, 
association, trust, joint venture, corporation, or other organization, 
wheresoever organized, that is located in Burma or exists for the 
exclusive or predominant purpose of engaging in the economic development 
of resources located in Burma or derives its income predominantly from 
such economic development, and is not the Government of Burma.



Sec. 537.310  Person.

    The term person means an individual or entity.



Sec. 537.311  Resources located in Burma.

    The term resources located in Burma means any resources, including 
natural, agricultural, commercial, financial, industrial and human 
resources, located within the territory of Burma, including the 
territorial sea, or located within the exclusive economic zone or 
continental shelf of Burma.



Sec. 537.312  Specific license.

    The term specific license means any license or authorization not set 
forth in

[[Page 650]]

this part but issued pursuant to the authority of this part.



Sec. 537.313  United States.

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



Sec. 537.314  United States person; U.S. person.

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



                       Subpart D--Interpretations



Sec. 537.401  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. 537.402  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. 537.403  Economic development of resources located in Burma.

    The term economic development of resources located in Burma refers 
to activities pursuant to a contract the subject of which includes 
responsibility for the development or exploitation of resources located 
in Burma, including making or attempting to make those resources 
accessible or available for exploitation or economic use. Examples 
include contracts conferring rights to explore for, develop, extract, or 
refine petroleum, natural gas, or minerals in the ground in Burma; 
contracts to take over a mining operation in Burma; acquire a forest or 
agricultural area and exploit the timber or other crops; or acquire land 
and construct and run a hotel or factory on it. The term economic 
development of resources located in Burma is defined in Sec. 537.301 
specifically to exclude contracts for not-for-profit educational, health 
or other humanitarian programs or activities. See also Sec. 537.204 for 
the exception that applies to the entry into, performance of, or 
financing of a contract to sell or purchase goods, services or 
technology.



Sec. 537.404  Purchase of shares in economic development projects in Burma.

    The purchase of shares, including an equity interest, in the 
economic development of resources located in Burma, is prohibited when 
those shares are purchased after the effective date directly or 
indirectly from the Government of Burma or a nongovernmental entity in 
Burma, unless purchased pursuant to an agreement entered into prior to 
May 21, 1997. U.S. persons may purchase debt instruments issued by the 
Government of Burma or a nongovernmental entity in Burma, directly or 
indirectly, provided that such instruments are not convertible into 
equity, and do not provide for participation, including as collateral or 
security, in royalties, earnings, or profits in the economic development 
of resources located in Burma.



Sec. 537.405  Investments in entities involved in economic development projects in Burma.

    (a) The purchase of shares in a third-country company that is 
engaged in the economic development of resources located in Burma is 
prohibited by Sec. 537.201 where the company's profits are predominantly 
derived from the company's economic development of resources located in 
Burma.

[[Page 651]]

    (b) If a U.S. person holds shares in an entity which subsequently 
engages exclusively or predominantly in the economic development of 
resources located in Burma or subsequently derives its income 
exclusively or predominantly from such economic development, the United 
States person is not required to relinquish its shares, but may not 
purchase additional shares. Divestment of the shares in such an entity 
to a foreign person -- constituting the facilitation of that foreign 
person's investment in Burma -- is authorized under general license 
pursuant to Sec. 537.504.



Sec. 537.406  General supervision and guarantee.

    Section 537.201 prohibits the entry by a U.S. person into a contract 
providing for the general supervision and guarantee of another person's 
performance of a contract that includes the economic development of 
resources located in Burma, if the U.S. person's contract is entered 
into on or after the effective date, unless undertaken pursuant to, or 
in exercise of rights under, a pre-effective date agreement. For the 
purposes of Sec. 537.201, only the entry into contracts for supervision 
and guarantee at the top level of project management, such as entry into 
a contract with a development project's sponsor or owner to become a 
prime contractor or general manager for a development project, will be 
considered new investment in Burma. By contrast, subcontracts to provide 
goods, services, or technology to a prime contractor or general manager 
of a development project are exempt from the prohibitions of this part 
pursuant to Sec. 537.204 unless:
    (a) The functional scope of the subcontractor's obligations is 
substantially similar to that of a prime contractor's or general 
manager's obligations; or
    (b) The consideration for such subcontracts includes a share of 
ownership in, or participation in the royalties, earnings or profits of, 
the economic development of resources located in Burma.



Sec. 537.407  Activities under pre-May 21, 1997 agreements.

    (a) Activities undertaken by a U.S. person pursuant to an agreement 
entered into prior to May 21, 1997, between the U.S. person and the 
Government of Burma or a nongovernmental entity in Burma are not 
prohibited new investments, as defined in Sec. 537.308.
    (b) A U.S. person who is a party to a pre-effective date agreement 
for the development of economic resources located in Burma may enter 
into subsequent agreements with foreign persons where such agreements 
are pursuant to, or in exercise of rights under, the pre-effective date 
agreement. The facilitation of foreign persons' investment in Burma 
under these circumstances is authorized pursuant to the general license 
contained in Sec. 537.504.
    (c) A U.S. person may not enter into a contract for the economic 
development of resources located in Burma after May 21, 1997, if 
pursuant to, or in exercise of rights under, a pre-effective date 
agreement, unless the contractual arrangement is specifically 
contemplated in the pre-effective date agreement.
    (d) The exercise of rights under pre-effective date agreements may 
include the exercise of options to extend the contract, depending on 
such factors as the degree of specificity with which the option to 
extend is described in the pre-effective date agreement, and the degree 
to which the party wishing to renew can enforce its decision to exercise 
the option.



Sec. 537.408  Sale or purchase of goods, services or technology.

    (a) Section 537.204 exempts from any prohibition under this part the 
entry into, performance of, or financing of a contract to sell or 
purchase goods, services, or technology, except:
    (1) Where the entry into a contract on or after the effective date 
is for the general supervision and guarantee of another person's 
performance of a contract for the economic development of resources 
located in Burma; or
    (2) Where such contract provides for payment, in whole or in part, 
in:

[[Page 652]]

    (i) Shares of ownership, including an equity interest, in the 
economic development of resources located in Burma; or
    (ii) Participation in royalties, earnings, or profits in the 
economic development of resources located in Burma.
    (b) Examples: The following examples are based upon the assumption 
that neither Sec. 537.204(a) nor Sec. 537.204(b) applies.
    (1) A U.S. person may market goods or services in Burma through a 
sales representative or sales agent, or through a U.S. person or 
subsidiary established and operating in Burma before May 21, 1997, or 
through any established foreign (including Burmese) distributorship. The 
U.S. person may not, however, establish and operate a new business, 
branch, office or showroom in Burma to market such goods or services or 
facilitate the establishment of a new foreign entity to do so. This 
would constitute the development of a commercial resource.
    (2) A U.S. person may rent, lease or purchase space in existing 
buildings in connection with the continued operation of a business in 
operation prior to the effective date. It may change locations, modify 
and renovate existing space and upgrade machinery or equipment. Unless 
pursuant to a pre-effective date agreement or the exercise of specific 
rights under such agreement, however, the U.S. person may not expand its 
business operations by opening additional stores, branches, offices or 
showrooms beyond the number that were in existence immediately prior to 
May 21, 1997. The U.S. person may not construct a new commercial 
building to house its business as this would constitute the economic 
development of land and commercial resources in Burma.
    (3) A U.S. person involved in exempt activities may hire and train 
Burmese employees to carry out such activities. The employment of 
personnel in Burma under these circumstances is considered the purchase 
of employment services which is exempt from prohibition under 
Sec. 537.204. Any training incidental to the performance of the 
employee's services is likewise exempt. For example, a U.S. person 
engaged in the sale of copy machines may hire and train a Burmese 
employee to carry out activities pursuant to such sales, including 
office support personnel, personnel to provide after-sale service and 
maintenance in accordance with the terms of a purchase or lease 
agreement, sales representatives and supervisory personnel. A U.S. 
person may not, however, open a business after the effective date, the 
purpose of which is the sale of vocational skills training in the 
maintenance of copy machines, as this would constitute the economic 
development of human resources in Burma.
    (4) Contracts for the purchase or sale of services incident to the 
registration and renewal of patents, trademarks and copyrights are not 
prohibited by this part.
    (5) A U.S. bank is allowed to provide trade financing as a service 
either to the Government of Burma or to nongovernmental entities in 
Burma, but cannot provide them loans earmarked for economic development 
of resources in Burma if loan repayment is secured by the project. A 
U.S. bank can provide development project financing as a service, so 
long as the financing instruments are not convertible into equity, and 
do not provide for participation, including as collateral or security, 
in royalties, earnings, or profits in the economic development of 
resources located in Burma.



Sec. 537.409  Approval or other facilitation of a foreign person's investment.

    (a) The prohibition contained in Sec. 537.202 against approval or 
other facilitation of a foreign person's investment in Burma bars any 
action by a U.S. person that assists or supports a foreign person's 
activity that would constitute prohibited new investment under 
Sec. 537.201 if engaged in by a U.S. person. This facilitation 
prohibition is subject to the exemption for trade in goods, services and 
technology set forth in Sec. 537.204.
    (b) Examples: (1) A U.S. corporation is prohibited from brokering, 
financing, guaranteeing, or approving the entry by any foreign person, 
including a foreign affiliate, into a contract for the development of, 
e.g., a natural gas field, a tourist hotel complex, or a rubber 
plantation in Burma, unless pursuant to the affiliate's exercise of 
rights

[[Page 653]]

under an agreement entered into prior to the effective date. An 
independent U.S. contractor, however, may perform brokerage, financing, 
or guarantee services if under a service contract meeting the conditions 
of Sec. 537.204.
    (2) The sale to a foreign person of a U.S. person's equity or income 
interest in a development project in Burma constitutes facilitation of 
that foreign person's investment in Burma, unless pursuant to a pre-
effective date agreement. Such a sale, however, is authorized by general 
license under Sec. 537.504.
    (3) A U.S. national or permanent resident alien employed in Burma or 
in a third country by a foreign person may participate in any decision-
making role in an activity by the foreign person that includes economic 
development of resources located in Burma as exempt employment services 
pursuant to Sec. 537.204, unless such services are undertaken pursuant 
to a post-effective date agreement between the foreign person and the 
Government of Burma or a nongovernmental entity in Burma and:
    (i) involve the general supervision and guarantee of the foreign 
person's performance of a contract for the economic development of 
resources located in Burma, or
    (ii) where the individual U.S. person's compensation is provided 
for, in whole or in part, from shares of ownership in the development 
project or participation in royalties, earnings, or profits in the 
development project.



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 537.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see subpart C of 
part 501 of this chapter.



Sec. 537.502  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 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.
    (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. 537.503  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. 537.504  Divestiture of U.S. person's equity investment in Burma.

    Notwithstanding the prohibition in Sec. 537.202 against the 
facilitation by a U.S. person of a foreign person's investment, all 
transactions related to the divestiture or transfer to a foreign person 
of a U.S. person's share of ownership including an equity interest in 
the economic development of resources located in Burma are authorized. 
U.S. persons participating in such transactions valued at more than 
$10,000 are

[[Page 654]]

required, within 10 business days after the agreement is signed, to file 
a report for statistical purposes with the Office of Foreign Assets 
Control, U.S. Treasury Department, 1500 Pennsylvania Avenue NW.--Annex, 
Washington, DC 20220.
    Note to Sec. 537.504: This authorization includes arrangements by 
U.S. persons with pre-effective date investments in Burma to ``farm in'' 
or sell a stake in the investment to a foreign person. For purposes of 
this section, the term farm-in arrangement is defined to mean the sale 
of an equity interest in an investment in the economic development of 
resources located in Burma.



                           Subpart F--Reports



Sec. 537.601  Recordkeeping and reporting requirements.

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



                          Subpart G--Penalties



Sec. 537.701  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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub.L. 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty of not to exceed $11,000 per violation may be 
imposed on any person who violates any license, order, or regulation 
issued under the Act;
    (2) Whoever willfully violates any license, order, or regulation 
issued under the Act shall, upon conviction, be fined not more than 
$50,000, or, if a natural person, may be imprisoned for not more than 10 
years, or both; and any officer, director, or agent of any corporation 
who knowingly participates in such violation may be punished by a like 
fine, imprisonment or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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 5 years, 
or both.
    (d) Violations of this part may also be subject to relevant 
provisions of other applicable laws.



Sec. 537.702  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 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 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.

[[Page 655]]



Sec. 537.703  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 shall 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, 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 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. 537.704  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 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 the prepenalty 
notice, 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 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 collection and reporting on any delinquent penalty amount in 
the event of a failure to pay the penalty imposed.



Sec. 537.705  Administrative collection action; 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. 537.801  Procedures.

    For provisions relating to procedures, see subpart C of part 501 of 
this chapter.



Sec. 537.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13047 or any further executive orders 
relating to the

[[Page 656]]

national emergency declared in Executive Order 13047 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. 537.901  Paperwork Reduction Act notice.

    For approval by the Office of Management and Budget under the 
Paperwork Reduction Act of information collections relating to 
recordkeeping and reporting requirements, to licensing procedures 
pursuant to statements of licensing policy, and to other procedures, see 
Sec. 501.901 of this chapter.



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  Evasions; attempts; conspiracies.
538.211  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.

                       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.
538.412  Operation of accounts.
538.413  Funds transfers.
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.

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

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  Certain services relating to participation in various events 
          authorized.
538.510  Importation and exportation of certain gifts authorized.
538.511  Accompanied baggage authorized.
538.512  Transactions related to telecommunications authorized.
538.513  Transactions related to mail authorized.

[[Page 657]]

538.514  Certain transactions related to patents, trademarks and 
          copyrights authorized.
538.515  Certain imports for diplomatic or official personnel 
          authorized.
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.
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 agricultural 
          commodities, medicine, and medical equipment.
538.526  Brokering sales of agricultural commodities, medicine, and 
          medical devices.

                           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

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 18 U.S.C. 2339B, 2332d; 
50 U.S.C. 1601-1651, 1701-1706; Pub. L. 106-387, 114 Stat. 1549; E.O. 
13067, 62 FR 59989; 3 CFR, 1997 Comp., p. 230.

    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 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

[[Page 658]]

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
    (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,

[[Page 659]]

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, 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.

[[Page 660]]



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  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.



Sec. 538.211  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 
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 authorize transactions incident to the 
exportation of software subject to the Export Administration 
Regulations, 15 CFR parts 730-774, or to the exportation of goods, 
technology or software for use in the transmission of any data. The 
exportation of such items to the Government of Sudan or to Sudan is 
prohibited, as provided in Secs. 538.201 and 538.205.
    (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

[[Page 661]]

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.

[63 FR 35810, July 1, 1998, as amended at 66 FR 36688, July 12, 2001]



                     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.



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) through (c) 
of this section.
    Note to Sec. 538.305: Please refer to the appendices at the end of 
this chapter for listings of persons determined to fall within this 
definition who have been designated pursuant to this part. Section 
501.807 of this chapter sets forth the procedures to be followed by 
persons seeking administrative reconsideration of their designation, or 
who wish to assert that the circumstances resulting in the designation 
are no longer applicable.



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.

[[Page 662]]



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 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.



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.

[[Page 663]]



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.



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.



                       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 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:

[[Page 664]]

    (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; and
    (d) Financing of licensed sales for exportation or reexportation of 
agricultural commodities or products, medicine, or medical equipment to 
Sudan or the Government of Sudan. See Sec. 538.525.

[64 FR 41786, Aug. 2, 1999, as amended at 66 FR 36688, July 12, 2001]



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 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.

[[Page 665]]

    (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 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

[[Page 666]]

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.



Sec. 538.412  Operation of accounts.

    The operation of an account in a financial institution for a private 
Sudanese person does not constitute the exportation of a service to 
Sudan; however, such operation may not include the execution of 
transactions in support of transactions or activities prohibited by 
subpart B of this part.



Sec. 538.413  Funds transfers.

    The transfer of funds to Sudan from the United States does not 
constitute an exportation of services pursuant to Sec. 538.205.



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.



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 538.501  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, authorizes or validates any transaction 
effected prior to the issuance of the license, 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 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. 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

[[Page 667]]

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.



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.

[[Page 668]]

    (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.
    (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

[[Page 669]]

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, technology and services 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, technology or services 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, for reexportation of goods, the goods:
    (1) Have been incorporated into another product outside the United 
States and constitute 10 per cent 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: Goods, technology and 
software of U.S. origin that are subject to the Export Administration 
Regulations (15 CFR parts 730-774) may require specific authorization 
from the Department of Commerce, Bureau of Export Administration, even 
though such goods have been substantially transformed abroad.
    (b) Goods, technology and services 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, technology or services 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. 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 730-774) may require 
specific authorization from the Department of Commerce, Bureau of Export 
Administration.



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  Certain services relating to participation in various events authorized.

    The importation of Sudanese-origin services into the United States 
is authorized where such services are performed in the United States by 
a Sudanese national who enters the United States on a visa issued by the 
State

[[Page 670]]

Department for the purpose of participating in a public conference, 
performance, exhibition or similar event, and such services are 
consistent with that purpose.



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 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 authorized.

    All transactions with respect to the receipt and transmission of 
telecommunications involving Sudan are authorized. This section does not 
authorize the provision to the Government of Sudan or a person in Sudan 
of telecommunications equipment or technology.



Sec. 538.513  Transactions related to mail authorized.

    All transactions by U.S. persons, including payment and transfers to 
common carriers, incident to the receipt or transmission of mail between 
the United States and Sudan are authorized, provided that mail is 
limited to personal communications not involving a transfer of anything 
of value.



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.

[[Page 671]]

    (d) Nothing in this section affects obligations under any other 
provision of law.



Sec. 538.515  Certain imports for diplomatic or official personnel authorized.

    All transactions ordinarily incident to the importation of any goods 
or services into the United States destined for official or personal use 
by the diplomatic missions of the Government of Sudan to the United 
States and to international organizations located in the United States 
are authorized, provided that such goods or services are not for resale, 
and unless such importation is otherwise prohibited by law.



Sec. 538.516  Diplomatic pouches.

    All transactions in connection with the importation into the United 
States from Sudan, or the exportation from the United States to Sudan, 
of diplomatic pouches and their contents are authorized.



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 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

[[Page 672]]

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) One-year license requirement. The exportation or reexportation 
of agricultural commodities (including bulk agricultural commodities 
listed in appendix A to this part 538), medicine, or medical devices to 
the Government of Sudan, any entity in Sudan, individuals in Sudan, or 
persons in third countries purchasing specifically for resale to any of 
the foregoing, shall only be made pursuant to a one-year license issued 
by the U.S. Department of the Treasury, 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 license will be granted for the 
exportation or reexportation of agricultural commodities, medicine, or 
medical equipment to any entity or individual in Sudan promoting 
international terrorism. Executory contracts entered into pursuant to 
paragraph (b)(2) of this section prior to the issuance of the one-year 
license described in this paragraph shall be deemed to have been signed 
on the date of issuance of that one-year 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 
license).
    (b) General license for arrangement of exportation or reexportation 
of covered products. (1) 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 
agricultural commodities, medicine, or medical devices to the Government 
of Sudan, entities in Sudan, individuals in Sudan, or persons in third 
countries purchasing specifically for resale to any of the foregoing, is 
authorized.
    (2) If desired, 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 agricultural commodities, medicine, and 
medical devices to the Government of Sudan, entities in Sudan, 
individuals in Sudan, or persons in third countries purchasing 
specifically for resale to any of the foregoing, is authorized, provided 
that performance of an executory contract is expressly made contingent 
upon the prior issuance of the one-year license described in paragraph 
(a) of this section.
    (c) Instructions for obtaining one-year licenses. In order to obtain 
the one-year license described in paragraph (a), 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, email 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 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

[[Page 673]]

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 Export Administration (``BXA''), 
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 BXA's 
website, www.bxa.doc.gov/ Regulations/Trade Sanctions ReformExport 
EnhancementAct.html. Medical supplies that are specifically listed on 
BXA's website do not require an Official Commodity Classification of EAR 
99 from BXA. BXA will also provide a list on its website of medicines 
that are ineligible for a one-year license under these procedures. If an 
exporter is uncertain whether the medicine to be exported is eligible, 
they should seek an Official Commodity Classification of EAR 99 from BXA 
and submit a copy to OFAC. See, 15 CFR 745.3 for instructions for 
obtaining Official Commodity Classification of EAR 99 from BXA.
    (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) This section does not apply to any transaction or dealing 
involving property blocked pursuant to this chapter or to any other 
activity prohibited by this chapter that is not otherwise authorized in 
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 section, 
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
    (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 section, the term medicine 
has the same meaning given the term ``drug'' in section 201 of the 
Federal Food,

[[Page 674]]

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 section, 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) Transition period. (1) Specific licenses issued prior to July 
26, 2001 authorizing the performance of executory contracts for the sale 
of agricultural commodities, medicine, or medical equipment shall remain 
in effect until the expiration date specified in the license or July 26, 
2002, whichever comes first. However, after July 26, 2001, new contracts 
for the exportation of agricultural commodities, medicine, or medical 
devices may be entered into only pursuant to the terms of, and as 
authorized by, this part.
    (2) Specific licenses issued prior to July 26, 2001 authorizing the 
sale and exportation or reexportation of bulk agricultural commodities 
listed in Appendix A to 31 CFR parts 538 and 550 and Appendix B to 31 
CFR part 560 shall remain in effect solely to permit completion of 
performance of contracts already entered into prior to July 26, 2001 
pursuant to the license. As of July 26, 2001, new contracts for the 
exportation of bulk agricultural commodities may be entered into only 
pursuant to the terms of, and as authorized by, this part.

[66 FR 36688, July 12, 2001]



Sec. 538.524  [Reserved]



Sec. 538.525  Payment for and financing of commercial sales of agricultural commodities, medicine, and medical equipment.

    (a) General license for payment terms. The following payment terms 
for sales of agricultural commodities and products, medicine, and 
medical equipment pursuant to Secs. 538.523 and 538.524 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 Secs. 538.523 and 538.524. 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 United States Government 
assistance, including United States foreign assistance, United States 
export assistance, and any United States credit or guarantees absent a 
Presidential waiver.

[64 FR 41788, Aug. 2, 1999, as amended at 64 FR 58790, Nov. 1, 1999; 66 
FR 36689, July 12, 2001]

[[Page 675]]



Sec. 538.526  Brokering 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 sale and exportation or reexportation by United 
States persons of agricultural commodities, medicine, and medical 
devices, provided that the sale and exportation or reexportation is 
authorized by a one-year license issued pursuant to 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, entities in Sudan or individuals in Sudan. 
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;

    Note to paragraph (b)(2): 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 EAR99 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 Export Administration. 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.

[64 FR 41788, Aug. 2, 1999, as amended at 64 FR 58790, Nov. 1, 1999; 66 
FR 36689, July 12, 2001]



                           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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty not to exceed $11,000 per violation may be 
imposed on any person who violates any license, order, or regulation 
issued under the Act;
    (2) Whoever willfully violates any license, order, or regulation 
issued under the Act shall, upon conviction be fined not more than 
$50,000, or, if a natural person, may be imprisoned for not more than 10 
years, or both; and any officer, director, or agent of any corporation 
who knowingly participates in such violation may be punished by a like 
fine, imprisonment, or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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

[[Page 676]]

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.



Sec. 538.702  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 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 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.



Sec. 538.703  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 shall 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, 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 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. 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 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 the prepenalty 
notice, 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

[[Page 677]]

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 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 collection and reporting on any delinquent penalty amount in 
the event of a failure to pay the penalty imposed.



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 
subpart D of part 501 of this chapter.



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.

          Appendix A to Part 538--Bulk Agricultural Commodities

    Notes:
    1. Appendix A sets forth those agricultural commodities eligible for 
the bulk agricultural commodity sales licensing procedures in 
Sec. 538.524.
    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

[[Page 678]]

 
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
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]



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; 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.

[[Page 679]]



     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 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

[[Page 680]]

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 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:

[[Page 681]]

    (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.
    (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.

[[Page 682]]



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 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 D, 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.



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:

[[Page 683]]

    (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
    (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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Public Law 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty not to exceed $11,000 per violation may be 
imposed on any person who violates or attempts to violate any license, 
order, or regulation issued under the Act;
    (2) Whoever willfully violates or willfully attempts to violate any 
license, order, or regulation issued under the Act, upon conviction, 
shall be fined not more than $50,000, and if a natural person, may also 
be imprisoned for not more than 10 years; and any officer, director, or 
agent of any corporation who knowingly participates in such violation 
may be punished by a like fine, imprisonment, or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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.

[[Page 684]]



Sec. 539.702  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, 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.

[[Page 685]]

7701 and that such number will be used for purposes of collecting and 
reporting on any delinquent penalty amount.



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 D, of this chapter.



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.

           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

[[Page 686]]

Power Engineering [RDIPE], and ENTEK, 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 540--HIGHLY ENRICHED URANIUM (HEU) AGREEMENT ASSETS CONTROL REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

540.201  Prohibited transactions involving blocked property.
540.202  Effect of transfers violating the provisions of this part.
540.203  Holding of funds in interest-bearing accounts; investment and 
          reinvestment.

                     Subpart C--General Definitions

540.301  Blocked account; blocked property.
540.302  Effective date.
540.303  Entity.
540.304  Government of the Russian Federation.
540.305  HEU Agreements.
540.306  Highly Enriched Uranium (HEU).
540.307  Licenses; general and specific.
540.308  Low Enriched Uranium (LEU).
540.309  Natural uranium.
540.310  Person.
540.311  Property; property interest.
540.312  Transfer.
540.313  United States.
540.314  United States person; U.S. person.
540.315  Uranium-235 (U235).
540.316  Uranium enrichment.
540.317  Uranium feed; natural uranium feed.
540.318  Uranium Hexafluoride (UF6).
540.319  U.S. financial institution.

                       Subpart D--Interpretations

540.401  Reference to amended sections.
540.402  Effect of amendment.
540.403  Termination and acquisition of an interest in blocked property.
540.404  Setoffs prohibited.
540.405  Transactions incidental to a licensed transaction.

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

540.501  Effect of license or authorization.
540.502  Exclusion from licenses.
540.503  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
540.504  Entries in certain accounts for normal service charges 
          authorized.

                           Subpart F--Reports

540.601  Records and reports.

                          Subpart G--Penalties

540.701  Penalties.
540.702  Prepenalty notice.
540.703  Response to prepenalty notice; informal settlement.
540.704  Penalty imposition or withdrawal.
540.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H--Procedures

540.801  Procedures.
540.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

540.901  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); E.O. 
13159, 65 FR 39279, 3 CFR Comp., p. 277.

    Source: 66 FR 38555, July 25, 2001, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 540.101  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. 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.
    (b) Nothing contained in these regulations shall relieve a person 
from any

[[Page 687]]

requirement to obtain a license or other authorization from any 
department or agency of the United States Government in compliance with 
applicable laws and regulations subject to the jurisdiction of that 
department or agency, and 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. 540.201  Prohibited transactions involving blocked property.

    (a) Except as otherwise authorized by regulations, orders, 
directives, rulings, instructions, licenses, or otherwise, the property 
or property interests of the Government of the Russian Federation that 
are directly related to the implementation of the Highly Enriched 
Uranium (HEU) Agreements, 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 are blocked and may not 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 part, any attachment, judgment, 
decree, lien, execution, garnishment, or other judicial process is null 
and void with respect to any blocked property or interest in blocked 
property covered by this part.



Sec. 540.202  Effect of transfers violating the provisions of this part.

    (a) Any transfer after the effective date (see Sec. 540.302) 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. 540.201(a) is null and void and shall not be the basis for the 
assertion or recognition of any interest in or right, remedy, power, or 
privilege with respect to such property or property interests.
    (b) No transfer before the effective date shall be the basis for the 
assertion or recognition of any right, remedy, power, or privilege with 
respect to, or any interest in, any property or interest in property 
blocked pursuant to Sec. 540.201, unless the person with whom such 
property is held or maintained, prior to that date, had written notice 
of the transfer or by any written evidence had recognized such transfer.
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by or pursuant to the direction or authorization of 
the Director of the Office of Foreign Assets Control before, during, or 
after a transfer shall validate such transfer or 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 pursuant to this part.
    (d) The Director of the Office of Foreign Assets Control may, in his 
discretion, retroactively license a transfer of property that is null 
and void or unenforceable by virtue of the provisions of this section so 
that such a transfer 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 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 was held or maintained filed 
with the Office of Foreign Assets Control a

[[Page 688]]

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 issued pursuant to this part;
    (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 withholding 
of material facts or was otherwise fraudulently obtained.
    Note to paragraph (d) of Sec. 540.202:
    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.



Sec. 540.203  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. 540.201 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 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 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. 540.201 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) or this section.
    (d) Blocked funds held in accounts or instruments outside the United 
States at the time the funds become subject to Sec. 540.201 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. 540.201. However, the Office of Foreign Assets Control may issue 
licenses permitting or directing such sales in appropriate cases.
    (f) Except as otherwise licensed, authorized or directed by OFAC, 
funds subject to this section may not be invested, used for collateral 
or reinvested in a manner which provides immediate financial or economic 
benefit or access to the Government of the Russian Federation 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.



                     Subpart C--General Definitions



Sec. 540.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibition in Sec. 540.201 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.

[[Page 689]]



Sec. 540.302  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., Eastern Daylight Time, June 22, 2000.



Sec. 540.303  Entity.

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



Sec. 540.304  Government of the Russian Federation.

    (a) The term Government of the Russian Federation means the 
Government of the Russian Federation, any political subdivision, agency, 
or instrumentality thereof, and any person owned or controlled by, or 
acting for or on behalf of, the Government of the Russian Federation.
    (b) Any person or entity to the extent such person or entity is or 
has been, or to the extent that there is reasonable cause to believe 
that such person or entity is, or has been, since the effective date 
(see Sec. 540.302), acting or purporting to act directly or indirectly 
for or on behalf of any of the foregoing.



Sec. 540.305  HEU Agreements.

    The term HEU Agreements means the Agreement Between the Government 
of the United States of America and the Government of the Russian 
Federation Concerning the Disposition of Highly Enriched Uranium 
Extracted from Nuclear Weapons, dated February 18, 1993; the Initial 
Implementing Contract, Contract Number DE-AC01-93NE50067, dated January 
14, 1994; and all current and future amendments thereto; as well as the 
related current and future implementing agreements, memoranda of 
understanding, protocols, and contracts, including all current and 
future amendments thereto, to include without limitation the following:
    (a) Memorandum of Agreement Between the United States, Acting By and 
Through the United States Department of State, and the United States 
Department of Energy and the United States Enrichment Corporation 
(USEC), for USEC to Serve as the United States Government's Executive 
Agent under the Agreement Between the United States and the Russian 
Federation Concerning the Disposition of Highly Enriched Uranium 
Extracted from Nuclear Weapons, dated April 18, 1997;
    (b) Agreement Between the United States Department of Energy and the 
Ministry of the Russian Federation for Atomic Energy Concerning the 
Transfer of Source Material to the Russian Federation signed at 
Washington on March 24, 1999, with Implementing Agreement and 
Administrative Arrangement, dated March 24, 1999, and related letter 
agreements; and
    (c) UF6 Feed Component Implementing Contract Among Cameco Europe 
S.A. and Compagnie G[eacute]n[eacute]ral des Mati[egrave]res 
Nucl[eacute]aires and Nukem, Inc. and Nukem Nuklear Gmbh and OAO 
Techsnabexport, and Tenex Contract  08843672/90100-02D, dated 
March 24, 1999.



Sec. 540.306  Highly Enriched Uranium (HEU).

    The term highly enriched uranium or HEU means uranium enriched to 
twenty (20) percent or greater in the isotope U235.



Sec. 540.307  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. 540.307. See Sec. 501.801 of this chapter on licensing 
procedures.



Sec. 540.308  Low Enriched Uranium (LEU).

    The term low enriched uranium or LEU means uranium enriched to less 
than twenty (20) percent in the isotope U235.



Sec. 540.309  Natural uranium.

    The term natural uranium means uranium found in nature, with an 
average concentration of 0.711 percent by weight of the isotope U235.

[[Page 690]]



Sec. 540.310  Person.

    The term person means an individual or entity.



Sec. 540.311  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, copyrights, insurance 
policies, safe deposit boxes and their contents, annuities, pooling 
agreements, services of any nature whatsoever, contracts of whatever 
nature whatsoever, and any other property, real, personal, or mixed, 
tangible or intangible, or interests therein, present, future, or 
contingent.



Sec. 540.312  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. 540.313  United States.

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



Sec. 540.314  United States person; U.S. person.

    The term United States person or U.S. person means any United States 
citizen, permanent resident alien, juridical person 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. 540.315  Uranium-235 (U235).

    The term uranium-235 or U235 means the fissile isotope found in 
natural uranium.



Sec. 540.316  Uranium enrichment.

    The term uranium enrichment means the process of increasing the 
concentration of the isotope U235 relative to that of the isotope U238.



Sec. 540.317  Uranium feed; natural uranium feed.

    The term uranium feed or natural uranium feed means natural uranium 
in the form of UF6 suitable for uranium enrichment.



Sec. 540.318  Uranium Hexafluoride (UF6).

    The term uranium hexafluoride or UF6 means a compound of uranium and 
fluorine.

[[Page 691]]



Sec. 540.319  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; 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 that are located in the 
United States, but not such institutions' foreign branches, offices, or 
agencies.



                       Subpart D--Interpretations



Sec. 540.401  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. 540.402  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, 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. 540.403  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 the Russian Federation, such 
property shall no longer be deemed to be property in which the 
Government of the Russian Federation has or has had an interest unless 
there exists in the property another interest of the Government of the 
Russian Federation, 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 the Russian Federation, such property shall be deemed to 
be property in which there exists an interest of the Government of the 
Russian Federation.



Sec. 540.404  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. 540.201 if effected after the effective date (see 
Sec. 540.302).



Sec. 540.405  Transactions incidental to a licensed transaction.

    Any transaction ordinarily incident to a licensed transaction and 
necessary to give effect thereto is also authorized, except for any 
attachment, judgment, decree, lien, execution, garnishment, or other 
judicial process which has the effect of encumbering the property or 
interest in property of the Government of the Russian Federation 
directly related to the implementation of the HEU agreements, or any 
transaction involving a debit to a blocked account or transfer of 
blocked property not explicitly authorized within the terms of a 
license.

[[Page 692]]



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 540.501  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, authorizes or validates any transaction 
effected prior to the issuance of the license, 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 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 licenses 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 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. 540.502  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. 540.503  Payments and transfers to blocked accounts in U.S. financial institutions.

    Except as otherwise authorized, licensed or directed by the Office 
of Foreign Assets Control, any payment of funds or transfer of credit in 
which the Government of the Russian Federation has any interest that is 
directly related to the implementation of the HEU Agreements and 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. U.S. financial 
institutions are authorized to engage in routine currency exchange 
transfers involving funds directly associated with the implementation of 
the HEU agreements that flow through correspondence accounts in U.S. 
financial institutions.
    Note to Sec. 540.503. Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers. See 
also Sec. 501.203 concerning the obligation to hold blocked funds in 
interest-bearing accounts.



Sec. 540.504  Entries in certain accounts for normal service charges authorized.

    (a) A U.S. financial institution is authorized to debit any blocked 
account held by that financial institution in payment or reimbursement 
for normal service charges owed to it by the owner of the 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, 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

[[Page 693]]

mail, insurance, stationery and supplies, and other similar items.



                           Subpart F--Reports



Sec. 540.601  Records and reports.

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



                          Subpart G--Penalties



Sec. 540.701  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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty not to exceed $11,000 per violation may be 
imposed on any person who violates or attempts to violate any license, 
order, or regulation issued under the Act;
    (2) Whoever willfully violates or willfully attempts to violate any 
license, order, or regulation issued under the Act, upon conviction, 
shall be fined not more than $50,000, and if a natural person, may also 
be imprisoned for not more than 10 years; and any officer, director, or 
agent of any corporation who knowingly participates in such violation 
may be punished by a like fine, imprisonment, or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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 not more than five years, or 
both.
    (d) Violations of this part may also be subject to relevant 
provisions of other applicable laws.



Sec. 540.702  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, 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 respondent's right to make a written presentation within 
the applicable 30 day period set forth in Sec. 540.703 as to why a 
monetary penalty should not be imposed or why, if imposed, the monetary 
penalty should be in a lesser amount than proposed.
    (c) Informal settlement prior to issuance of prepenalty notice. At 
any time prior to the issuance of a prepenalty notice, an alleged 
violator may request in writing that, for a period not to exceed sixty 
(60) days, the agency withhold issuance of the prepenalty notice for the 
exclusive purpose of effecting settlement of the agency's potential 
civil monetary penalty claims. In the event the Director grants the 
request, under terms and

[[Page 694]]

conditions within his 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 of the 
potential civil monetary penalty claim.



Sec. 540.703  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 his 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 
writing and may be handwritten or typed. The response need not be in any 
particular form. A copy of the written response may be sent by 
facsimile, but the original must also 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.
    (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 should also 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.
    (d) Default. If the respondent elects not to submit a written 
response within the time limit set forth in paragraph (a) of this 
section, the Office of Foreign Assets Control will conclude that the 
respondent has decided not to respond to the prepenalty notice. The 
agency generally will then issue a written penalty notice imposing the 
penalty proposed in the prepenalty notice.
    (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 as 
advised in the prepenalty notice to propose the settlement of 
allegations contained in the

[[Page 695]]

prepenalty notice and related matters. However, the requirements set 
forth in paragraph (f) 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 remains in effect unless additional time is granted by 
the Office of Foreign Assets Control.
    (f) 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.



Sec. 540.704  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 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 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 final agency 
action in a federal district court.



Sec. 540.705  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. 540.801  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 
subpart D of part 501 of this chapter.



Sec. 540.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13159 of June 21,

[[Page 696]]

2000 (65 FR 39279, June 26, 2000) and any further executive orders 
relating to the national emergency declared in Executive Order 13159 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. 540.901  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 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.



PART 545--TALIBAN (AFGHANISTAN) SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

545.201  Prohibited transactions involving blocked property.
545.202  Effect of transfers violating the provisions of this part.
545.203  Holding of funds in interest-bearing accounts; investment and 
          reinvestment.
545.204  Prohibited exportation, reexportation, sale, or supply of 
          goods, software, technology, or services.
545.205  Prohibited importation of goods, software, technology, or 
          services.
545.206  Evasions; attempts; conspiracies.
545.207  Expenses of maintaining blocked property; liquidation of 
          blocked accounts.
545.208  Exempt transactions.

                     Subpart C--General Definitions

545.301  Blocked account; blocked property.
545.302  Effective date.
545.303  Entity.
545.304  Importation into the United States.
545.305  Information or informational materials.
545.306  Interest.
545.307  Licenses; general and specific.
545.308  Person.
545.309  Property; property interest.
545.310  The Taliban.
545.311  Territory of Afghanistan controlled by the Taliban.
545.312  Transfer.
545.313  United States.
545.314  U.S. financial institution.
545.315  United States person; U.S. person.

                       Subpart D--Interpretations

545.401  Reference to amended sections.
545.402  Effect of amendment.
545.403  Transactions incidental to a licensed transaction authorized.
545.404  Transshipment or transit through the United States prohibited.
545.405  [Reserved]
545.406  Exportation of services; performance of service contracts; 
          legal services.
545.407  Services performed in the territory of Afghanistan controlled 
          by the Taliban.
545.408  Offshore transactions.
545.409  Payments from blocked accounts to U.S. exporters and for other 
          obligations prohibited.
545.410  Acquisition of instruments including bankers acceptances.
545.411  Exportation to third countries; transshipments.
545.412  Release of goods originating in the territory of Afghanistan 
          controlled by the Taliban from a bonded warehouse or foreign 
          trade zone.
545.413  Importation of goods from third countries; transshipments.
545.414  Loans or extensions of credit.
545.415  Payments from blocked accounts to U.S. exporters and for other 
          obligations prohibited.
545.416  Termination and acquisition of an interest in blocked property.
545.417  Setoffs prohibited.

 Subpart E--Licenses, Authorizations and Statements of Licensing Policy

545.501  Effect of license or authorization.
545.502  Exclusion from licenses.
545.503  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
545.504  Entries in certain accounts for normal service charges 
          authorized.
545.505  Importation of goods, software, or technology exported from the 
          territory of Afghanistan controlled by the Taliban prior to 
          July 6, 1999.
545.506  Importation of certain gifts authorized.
545.507  Accompanied baggage authorized.
545.508  Transactions related to telecommunications authorized.

[[Page 697]]

545.509  Transactions related to mail authorized.
545.510  Importation of household and personal effects authorized.
545.511  Registration of nongovernmental organizations for humanitarian 
          or religious activities.
545.512  Payment of obligations to U.S. persons authorized.
545.513  Provision of certain legal services authorized.
545.514  Payments for services rendered by the Taliban to aircraft.
545.515  Certain transactions related to patents, trademarks, and 
          copyrights authorized.
545.516  Certain payments to or from the territory of Afghanistan 
          controlled by the Taliban.
545.517  Authorization of emergency medical services.
545.518  Investment and reinvestment of certain funds.
545.519  Payments and transfers authorized for goods and services 
          exported to the territory of Afghanistan controlled by the 
          Taliban prior to the effective date.
545.520  Noncommercial personal remittances to and from the territory of 
          Afghanistan controlled by the Taliban.
545.521  Transactions related to U.S. citizens residing in the territory 
          of Afghanistan controlled by the Taliban.
545.522  Operation of accounts.
545.523  Extensions or renewals of letters of credit authorized.
545.524  Extensions or renewals of loans.
545.525  Certain services related to participation in various events and 
          activities authorized.
545.526  Certain imports for diplomatic or official personnel 
          authorized.
545.527  Diplomatic pouches.

                           Subpart F--Reports

545.601  Records and reports.

                          Subpart G--Penalties

545.701  Penalties.
545.702  Prepenalty notice.
545.703  Response to prepenalty notice; informal settlement.
545.704  Penalty imposition or withdrawal.
545.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H--Procedures

545.801  Procedures.
545.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

545.901  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); E.O. 
13129, 64 FR 36759, 3 CFR, 1999 Comp., p. 200.

    Source: 66 FR 2729, Jan. 11, 2001, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 545.101  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 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. 545.201  Prohibited transactions involving blocked property.

    (a) Except as otherwise 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, property or property interests of 
the following persons 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 are blocked, and may not be 
transferred, paid, exported, withdrawn, or otherwise dealt in:

[[Page 698]]

    (1) The Taliban; and
    (2) Persons determined by the Secretary of the Treasury, in 
consultation with the Secretary of State and the Attorney General:
    (i) To be owned or controlled by, or to act for or on behalf of, the 
Taliban; or
    (ii) To provide financial, material, or technological support for, 
or services in support of, any of the foregoing.
    Note to paragraph (a) of Sec. 545.201. Please refer to the 
appendices at the end of this chapter V for listings of persons 
designated pursuant to this section. Section 501.807 of this chapter V 
sets forth the procedures to be followed by persons seeking 
administrative reconsideration of their designation or who wish to 
assert that the circumstances resulting in designation no longer apply. 
Similarly, 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 to 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.
    (b) Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, any transaction or dealing by U.S. persons or within the United 
States in property or interests in property blocked pursuant to 
paragraph (a) of this section is prohibited, including the making or 
receiving of any contribution of funds, goods, or services to or for the 
benefit of the Taliban or persons designated pursuant to 
Sec. 545.201(a).
    (c) Unless otherwise authorized by this part or by a specific 
license expressly referring to this section, any dealing in any security 
(or evidence thereof) held within the possession or control of a U.S. 
person and either registered or inscribed in the name of or known to be 
held for the benefit of any person whose property or interests in 
property are blocked pursuant to 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 any such 
security or the endorsement or guaranty of signatures on any such 
security. This prohibition applies irrespective of the fact that at any 
time (whether prior to, on, or subsequent to January 11, 2001) the 
registered or inscribed owner of any such security may have or might 
appear to have assigned, transferred, or otherwise disposed of the 
security.



Sec. 545.202  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. 545.201(a), is null and void and shall not be the basis for the 
assertion or recognition of any interest in or right, remedy, power, or 
privilege with respect to such property or property interests.
    (b) No transfer before the effective date shall be the basis for the 
assertion or recognition of any right, remedy, power, or privilege with 
respect to, or any interest in, any property or interest in property 
blocked pursuant to Sec. 545.201(a), unless the person with whom such 
property is held or maintained, prior to that date, had written notice 
of the transfer or by any written evidence had recognized such transfer.
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by or pursuant to the direction or authorization of 
the Director of the Office of Foreign Assets Control before, during, or 
after a transfer shall validate such transfer or make it enforceable to 
the same extent that it would be valid or enforceable but for the 
provisions of the International Emergency Economic Powers Act, 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 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:

[[Page 699]]

    (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 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 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 issued pursuant to this part;
    (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 withholding 
of material facts or was otherwise fraudulently obtained.
    Note to paragraph (d) of Sec. 545.202: 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 in which on or since the effective 
date of Sec. 545.201 there existed an interest of a person whose 
property or interests in property are blocked pursuant to 
Sec. 545.201(a).



Sec. 545.203  Holding of funds in interest-bearing accounts; investment and reinvestment.

    (a) Except as provided in paragraph (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. 545.201(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, 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. 545.201(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 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. 545.201(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.
    (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

[[Page 700]]

property at the time the property becomes subject to Sec. 545.201(a). 
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 that provides immediate financial or economic 
benefit or access to persons whose property or interests in property are 
blocked pursuant to Sec. 545.201(a), nor may their holder cooperate in 
or facilitate the pledging or other attempted use as collateral of 
blocked funds or other assets.



Sec. 545.204  Prohibited exportation, reexportation, sale, or supply of goods, software, technology, or services.

    Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, the exportation, reexportation, sale, or supply, directly or 
indirectly, from the United States, or by a U.S. person, wherever 
located, of any goods, software, technology (including technical data), 
or services to the territory of Afghanistan controlled by the Taliban or 
to the Taliban or to persons whose property or interests in property are 
blocked pursuant to Sec. 545.201 is prohibited.



Sec. 545.205  Prohibited importation of goods, software, technology, or services.

    Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, the importation into the United States of any goods, software, 
technology, or services owned or controlled by the Taliban or persons 
whose property or interests in property are blocked pursuant to 
Sec. 545.201 or from the territory of Afghanistan controlled by the 
Taliban is prohibited.



Sec. 545.206  Evasions; attempts; conspiracies.

    (a) Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, any transaction by any 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, or attempts to violate any of the prohibitions set 
forth in this part is prohibited.
    (b) Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, any conspiracy formed for the purpose of engaging in a transaction 
prohibited by this part is prohibited.



Sec. 545.207  Expenses of maintaining blocked property; liquidation of blocked account.

    (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 before 12:01 a.m., Eastern Daylight Time, July 6, 1999, 
all expenses incident to the maintenance of physical property blocked 
pursuant to Sec. 545.201 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. 545.201 may, in the discretion 
of the Director, Office of Foreign Assets Control, be sold or liquidated 
and the net proceeds placed in a blocked interest-bearing account in the 
name of the owner of the property.



Sec. 545.208  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 importation from 
any country and the exportation to any country of information or 
informational materials as defined in Sec. 545.305, whether commercial 
or otherwise, regardless of format or medium of transmission, are exempt 
from the prohibitions of this part.
    (2) This section does not exempt from regulation or authorize 
transactions related to information and informational materials not 
fully created and

[[Page 701]]

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 and 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, with respect to information 
or informational materials imported from persons whose property and 
interests in property are blocked pursuant to Sec. 545.201 or from the 
territory of Afghanistan controlled by the Taliban, 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 730-774, or to the exportation of goods, 
technology or software, 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 or interests in property are blocked pursuant to 
Sec. 545.201 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 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 nonscheduled air, sea, or land 
voyages.
    (d) Official Business. The prohibitions contained in this part do 
not apply to transactions for the conduct of the official business of 
the United States Government or the United Nations by employees thereof.
    (e) Journalistic Activity. The prohibitions contained in this part 
do not apply to transactions in the territory of Afghanistan controlled 
by the Taliban for journalistic activity by persons regularly employed 
in such capacity by a news-gathering organization.
    (f) Humanitarian donations. The prohibitions contained in this part 
do not apply to donations by U.S. persons of articles, such as food, 
clothing, and medicine, intended to be used to relieve human suffering.



                     Subpart C--General Definitions



Sec. 545.301  Blocked account; blocked property.

    The terms blocked account and blocked property, shall mean any 
account or property subject to the prohibitions in Sec. 545.201 held in 
the name of the Taliban or persons whose property or interests in 
property are blocked pursuant to Sec. 545.201, or in which the Taliban 
or persons whose property or interests in property are blocked pursuant 
to Sec. 545.201 have 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.



Sec. 545.302  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., Eastern Daylight Time, on July 6, 1999.



Sec. 545.303  Entity.

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



Sec. 545.304  Importation into the United States.

    (a) With respect to goods, software, or technology, the term 
importation into the United States means the bringing of any goods, 
software, or technology into the United States. However, with respect to 
goods, software or technology

[[Page 702]]

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. 545.404.
    (b) With respect to services, the term importation into the United 
States means the receipt in the United States of services or receipt in 
the United States 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.



Sec. 545.305  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 Sec. 545.305(a). 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 and 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. 545.306  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. 545.307  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. 545.307: See Sec. 501.801 of this chapter on licensing 
procedures.



Sec. 545.308  Person.

    The term person means an individual or entity.



Sec. 545.309  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

[[Page 703]]

property, real, personal, or mixed, tangible or intangible, or interest 
or interests therein, present, future or contingent.



Sec. 545.310  The Taliban.

    (a) For purposes of this part, the term the Taliban includes:
    (1) The political/military entity headquartered in Kandahar, 
Afghanistan that as of July 4, 1999, exercised de facto control over the 
territory of Afghanistan, described in Sec. 545.310(a);
    (2) Its agencies and instrumentalities;
    (3) The Taliban leaders listed in the Annex to Executive Order 13129 
(see appendix A of this chapter) and such additional leaders as may be 
designated by the Secretary of State in consultation with the Secretary 
of the Treasury and the Attorney General in accordance with section 4(c) 
of Executive Order 13129; and
    (4) Persons designated pursuant to Sec. 545.201(a)(2).
    Note to Sec. 545.310. The Taliban is also known as the ``Taleban,'' 
``Islamic Movement of Taliban,'' ``the Taliban Islamic Movement,'' 
``Talibano Islami Tahrik,'' and ``Tahrike Islami'a Taliban.''



Sec. 545.311  Territory of Afghanistan controlled by the Taliban.

    The term territory of Afghanistan controlled by the Taliban means 
the territory referred to as the ``Islamic Emirate of Afghanistan,'' 
known in Pashtun as ``de Afghanistan Islami Emarat'' or in Dari as 
``Emarat Islami-e Afghanistan,'' including:
    (a) As of July 4, 1999, the following provinces of the country of 
Afghanistan: Kandahar, Farah, Helmund, Nimruz, Herat, Badghis, Ghowr, 
Oruzghon, Zabol, Paktiha, Ghazni, Nangarhar, Lowgar, Vardan, Faryab, 
Jowlan, Balkh, and Paktika; and
    (b) Thereafter, the description of the term territory of Afghanistan 
controlled by the Taliban may be modified by the Secretary of State in 
consultation with the Secretary of the Treasury and the Attorney 
General.
    Note to Sec. 545.311. The Secretary of State, in consultation with 
the Secretary of the Treasury and the Attorney General, has added the 
City of Kabul to the territory of Afghanistan controlled by the Taliban. 
(See Public Notice 3151 of October 21, 1999, 64 FR 58879, November 1, 
1999).



Sec. 545.312  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. 545.313  United States.

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



Sec. 545.314  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; including but not limited to, depository

[[Page 704]]

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 terms 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. 545.315  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 (including foreign branches), or any person in the 
United States.



                       Subpart D--Interpretations



Sec. 545.401  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. 545.402  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. 545.403  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 involving a person whose property or interests in 
property are blocked pursuant to Sec. 545.201, or involving a debit to a 
blocked account or a transfer of blocked property, not explicitly 
authorized within the terms of the license; and
    (b) Distribution or leasing in the territory of Afghanistan 
controlled by the Taliban of any containers or similar goods owned or 
controlled by U.S. persons after the performance of transportation 
services to the territory of Afghanistan controlled by the Taliban.



Sec. 545.404  Transshipment or transit through the United States prohibited.

    Except as otherwise specified:
    (a) The prohibitions in Secs. 545.201 and 545.204 apply to the 
importation into the United States, for transshipment or transit, of 
foreign goods which are intended or destined for the Taliban or the 
territory of Afghanistan controlled by the Taliban.
    (b) The prohibitions in Secs. 545.201 and 545.205 apply to the 
importation into the United States, for transshipment or transit to 
third countries, of goods owned or controlled by the Taliban or from the 
territory of Afghanistan controlled by the Taliban which are intended or 
destined for third countries.
    (c) Goods, software, or technology in which the Taliban have an 
interest that are imported into or transshipped through the United 
States are blocked pursuant to Sec. 545.201.
    Note to Sec. 545.404: See Sec. 545.304 for the definition of the 
term importation into the United States.



Sec. 545.405  [Reserved]



Sec. 545.406  Exportation of services; performance of service contracts; legal services.

    (a) The prohibition on transactions involving blocked property and 
the exportation of services contained in Secs. 545.201 and 545.204 
applies to services performed on behalf of the Taliban or persons whose 
property or interests in

[[Page 705]]

property are blocked pursuant to Sec. 545.201 or where the benefit of 
such services is otherwise received in the territory of Afghanistan 
controlled by the Taliban, when such services are performed:
    (1) In the United States;
    (2) Outside the United States by a U.S. person, including by an 
overseas branch of an entity located in the United States.
    (b) The benefit of services performed anywhere in the world on 
behalf of the Taliban, including persons whose property or interests in 
property are blocked pursuant to Sec. 545.201, is presumed to have been 
received in the territory of Afghanistan controlled by the Taliban.
    Note to Sec. 545.406. See Sec. 545.513 with regard to provision of 
certain legal services and Sec. 545.516 with regard to the provision of 
certain financial services.



Sec. 545.407  Services performed in the territory of Afghanistan controlled by the Taliban.

    The prohibitions on transactions involving blocked property and 
certain transactions or dealings in that property and the importation 
into the United States of services contained in Secs. 545.201 and 
545.205, respectively, apply to services performed in the territory of 
Afghanistan controlled by the Taliban or by the Taliban, wherever 
located, when the benefit of such services is received in the United 
States or by a U.S. person outside the United States. See Sec. 545.304 
for the definition of the term importation into the United States and a 
description of circumstances in which the benefit of services is 
considered to be received in the United States.



Sec. 545.408  Offshore transactions.

    (a) The prohibitions contained in Sec. 545.201 apply:
    (1) 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, that the Taliban or persons whose property or 
interests in property are blocked pursuant to Sec. 545.201 have or have 
had an interest since the effective date; and
    (2) With respect to goods, software, technology, or services which 
the U.S. person knows, or has reason to know, are from the territory of 
Afghanistan controlled by the Taliban.
    (b) Prohibited transactions include, but are not limited to:
    (1) Importation into or exportation from locations outside the 
United States of goods, software, technology or services owned or 
controlled by the Taliban or persons whose property or interests in 
property are blocked pursuant to Sec. 545.201; or
    (2) Purchasing, selling, financing, swapping, insuring, 
transporting, lifting, storing, incorporating, transforming, brokering 
or otherwise dealing in such blocked goods, software, technology, or 
services.
    (c) Example. 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 goods (such as carpets, 
fruits, or nuts), owned or controlled by the Taliban or by persons whose 
property or interests in property are blocked pursuant to Sec. 545.201 
or which comes from the territory of Afghanistan controlled by the 
Taliban.



Sec. 545.409  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, software, 
technology, or services exported prior to the effective date, except as 
authorized pursuant to this part.



Sec. 545.410  Acquisition of instruments including bankers acceptances.

    No U.S. persons may acquire or deal in any obligation, including 
bankers acceptances and debt of or guaranteed by a person whose property 
or interests in property are blocked pursuant to Sec. 545.201, in cases 
in which the documents evidencing the obligation indicate, or the U.S. 
person has actual knowledge, that the underlying transaction is in 
violation of Secs. 545.201 and 545.204 through 545.206. This 
interpretation does not apply to obligations arising from an underlying 
transaction licensed or otherwise authorized pursuant to this part.

[[Page 706]]



Sec. 545.411  Exportation to third countries; transshipments.

    Except as otherwise specified, exportation of goods, software, or 
technology from the United States to third countries is prohibited if 
the exporter knows, or has reason to know, that the goods, software, or 
technology are intended for reexportation or transshipment to the 
Taliban, to persons whose property or interests in property are blocked 
pursuant to Sec. 545.201, or to the territory of Afghanistan controlled 
by the Taliban, including passage through, or storage in, intermediate 
destinations.



Sec. 545.412  Release of goods originating in the territory of Afghanistan controlled by the Taliban from a bonded warehouse or foreign trade zone.

    Section 545.205 does not prohibit the release from a bonded 
warehouse or foreign trade zone of goods originating in the territory of 
Afghanistan controlled by the Taliban imported into a bonded warehouse 
or foreign trade zone either prior to the effective date or in a 
transaction authorized pursuant to this part after the effective date.
    Note to Sec. 545.412: Property in which the Taliban or persons whose 
property or interests in property are blocked pursuant to Sec. 545.201 
have an interest may not be released unless authorized or licensed by 
the Office of Foreign Assets Control.



Sec. 545.413  Importation of goods from third countries; transshipments.

    (a) Importation into the United States from third countries of goods 
containing raw materials or components originating in the territory of 
Afghanistan controlled by the Taliban 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 originating in the 
territory of Afghanistan controlled by the Taliban that have been 
transshipped through a third country without being incorporated into 
manufactured products or otherwise substantially transformed in a third 
country is prohibited.



Sec. 545.414  Loans or extensions of credit.

    (a) The prohibitions in Secs. 545.201 and 545.204 apply to loans or 
extensions of credit to a person in the territory of Afghanistan 
controlled by the Taliban, including overdraft protection on checking 
accounts, and the unauthorized renewal or rescheduling of credits or 
loans in existence as of 12:01 a.m., Eastern Daylight Time, July 6, 
1999, whether by affirmative action or operation of law.
    (b) The prohibitions in Secs. 545.201 and 545.204 apply to financial 
services including loans or credits extended in any currency.



Sec. 545.415  Payments from blocked accounts to U.S. exporters and for other obligations prohibited.

    Pursuant to Sec. 545.201, 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.



Sec. 545.416  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 or interests in property are 
blocked pursuant to Sec. 545.201, such property shall no longer be 
deemed to be property blocked pursuant to Sec. 545.201, unless there 
exists in the property another interest that is blocked pursuant to 
Sec. 545.201 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 interests in property are blocked pursuant to 
Sec. 545.201, such property shall be deemed to be property in which that 
person has an interest and therefore blocked.

[[Page 707]]



Sec. 545.417  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. 545.201 if effected after the effective date.



 Subpart E--Licenses, Authorizations and Statements of Licensing Policy



Sec. 545.501  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, authorizes or validates any transaction 
effected prior to the issuance of the license, unless specifically 
provided in such licenses 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 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 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. 545.502  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. 545.503  Payments and transfers to blocked accounts in U.S. financial institutions.

    Any payment of funds or transfer of credit in which the Taliban or a 
person whose property or interests in property are blocked pursuant to 
Sec. 545.201 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. 545.503. Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers. See 
also Sec. 545.203 concerning the obligation to hold blocked funds in 
interest bearing accounts.



Sec. 545.504  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 charge 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.

[[Page 708]]



Sec. 545.505  Importation of goods, software, or technology exported from the territory of Afghanistan controlled by the Taliban prior to July 6, 1999.

    (a) Except for the persons and property described in paragraph (c) 
below, importation of goods, software, or technology from the territory 
of Afghanistan controlled by the Taliban is authorized provided that:
    (1) The applicant submits proof satisfactory to the U.S. Customs 
Service that the goods, software, or technology were exported from the 
territory of Afghanistan controlled by the Taliban before the effective 
date; and
    (2) The importation is not otherwise prohibited by U.S. law.
    Note to Sec. 545.505(a). The general license in Sec. 545.505(a) does 
not extend to services.
    (b) The type of evidence that would constitute proof satisfactory to 
the U.S. Customs Service of the location of goods, software, or 
technology outside the territory of Afghanistan controlled by the 
Taliban before the effective date may vary depending on the facts of a 
particular case. However, independent corroborating documentary evidence 
issued and certified by a disinterested party normally will be required. 
This might include contracts, insurance documents, shipping documents, 
warehouse receipts, and appropriate customs documents, accompanied by a 
certification of an insurance agent, warehouse agent, or other 
appropriate person, identifying with particularity the goods sought to 
be imported and attesting that the goods concerned were located outside 
the territory of Afghanistan controlled by the Taliban at a time prior 
to the effective date. In general, affidavits, statements and other 
documents prepared by the applicant or other interested parties will 
not, by themselves, constitute satisfactory proof.
    (c) The authorization in paragraph (a) above, shall not apply to any 
goods, software, or technology in which the Taliban or persons whose 
property or interests in property are blocked pursuant to Sec. 545.201 
have any interest.



Sec. 545.506  Importation of certain gifts authorized.

    The importation into the United States of goods from the territory 
of Afghanistan controlled by the Taliban or from a person whose property 
or interests in property are blocked pursuant to Sec. 545.201 is 
authorized for goods sent as gifts to persons provided that:
    (a) The value of a gift is not more than $100 per recipient;
    (b) The goods are of a type and in quantities normally given as 
gifts between individuals; and
    (c) The goods are not controlled for chemical and biological weapons 
(CB), missile technology (MT), national security (NS), or nuclear 
proliferation (NP) (see Commerce Control List, 15 CFR part 774, 
supplement No. 1, of the Export Administration Regulations).



Sec. 545.507  Accompanied baggage authorized.

    (a) Persons entering the United States directly or indirectly from 
the territory of Afghanistan controlled by the Taliban are authorized to 
import into the United States accompanied baggage normally incident to 
travel.
    (b) Persons leaving the United States for the territory of 
Afghanistan controlled by the Taliban 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 accompanies the 
traveler on the same aircraft, train, or vehicle, and includes only 
articles that are necessary for personal use incident to travel, that 
are not intended for any other person or for sale, and that are not 
otherwise prohibited from importation or exportation under applicable 
United States laws.



Sec. 545.508  Transactions related to telecommunications authorized.

    All transactions ordinarily incident to the receipt or transmission 
of telecommunications involving the territory of Afghanistan controlled 
by the Taliban are authorized. This section does not authorize the 
provision, sale,

[[Page 709]]

or lease to the Taliban, or to persons whose property or interests in 
property are blocked pursuant to Sec. 545.201, or to the territory of 
Afghanistan controlled by the Taliban, of telecommunications equipment 
or technology; nor does it authorize the provision, sale, or leasing of 
capacity on telecommunications transmission facilities (such as 
satellite or terrestrial network connectivity).



Sec. 545.509  Transactions related to mail authorized.

    All transactions by U.S. persons, including payment and transfers to 
common carriers, incident to the receipt or transmission of mail between 
the United States and the territory of Afghanistan controlled by the 
Taliban are authorized, provided that mail is limited to personal 
communications not involving a transfer of anything of value.



Sec. 545.510  Importation of household and personal effects authorized.

    The importation of household and personal effects originating in the 
territory of Afghanistan controlled by the Taliban, including baggage 
and articles for family use, of persons arriving in the United States, 
directly or indirectly from the territory of Afghanistan controlled by 
the Taliban, is authorized; to qualify, articles included in such 
effects must actually have been 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. 545.511  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 the territory of Afghanistan 
controlled by the Taliban, authorizing transactions by such 
organizations otherwise prohibited by this part, including the 
exportation of goods, software, technology or services to the territory 
of Afghanistan controlled by the Taliban and the transfer of funds to 
and from the territory of Afghanistan controlled by the Taliban for the 
purpose of relieving human suffering. Applicants for registration 
numbers must comply with the requirements of Sec. 501.801(c).
    (b) This section does not authorize transfers from blocked accounts.
    Note to Sec. 545.511: 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).



Sec. 545.512  Payment of obligations to U.S. persons authorized.

    (a) The transfer of funds after the effective date by, through, or 
to any U.S. financial institution or other U.S. person solely for the 
purpose of payment of obligations owed to U.S. persons, including a 
payment of such obligations of persons whose property or interests in 
property are blocked pursuant to Sec. 545.201, is authorized, provided 
that (1) the obligation arose prior to the effective date or is 
otherwise authorized or not prohibited pursuant to statute or the 
provisions of this part; (2) the payment requires no debit to a blocked 
account; and (3) the U.S. person is not blocked pursuant to this chapter 
V.
    (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. 545.201 must be to a blocked account in a U.S. financial 
institution.
    Note to Sec. 545.512: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers. See 
also Sec. 545.203 concerning the obligation to hold blocked funds in 
interest-bearing accounts.



Sec. 545.513  Provision of certain legal services authorized.

    (a) The provision of the legal services set forth in paragraph (b) 
of this section to or on behalf of persons whose property or interests 
in property are blocked pursuant to Sec. 545.201, and the exportation of 
such legal services to persons located in the territory of Afghanistan 
controlled by the Taliban or

[[Page 710]]

in circumstances in which the benefit is otherwise received in the 
territory of Afghanistan controlled by the Taliban, are authorized, 
provided that all receipts of payment of professional fees and 
reimbursement of incurred expenses must be specifically licensed.
    (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 persons specified in paragraph (a) of this 
section:
    (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 in violation of this part;
    (2) Representation of persons when 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.
    (c) The provision or exportation of any other legal services to 
persons whose property or interests in property are blocked pursuant to 
Sec. 545.201 or who are located in the territory of Afghanistan 
controlled by the Taliban, not otherwise authorized in this part, 
requires the issuance of a specific license.
    (d) Entry into a settlement agreement affecting property or 
interests in property 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. 545.201 is 
prohibited unless specifically licensed in accordance with 
Sec. 545.202(e).



Sec. 545.514  Payments for services rendered by the Taliban to aircraft.

    (a) Specific licenses may be issued on a case-by-case basis for 
authorization of payments to the Taliban, to persons whose property or 
interests in property are blocked pursuant to Sec. 545.201, or to 
persons within the territory of Afghanistan controlled by the Taliban of 
charges for services rendered in connection with the overflight of the 
territory of Afghanistan controlled by the Taliban or emergency landing 
in the territory of Afghanistan controlled by the Taliban by aircraft. 
Any such payments shall be made consistent with United Nations Security 
Council Resolution 1267.
    (b) Specific licenses may be issued on a case-by-case basis for the 
exportation, reexportation, sale, or supply, directly or indirectly, of 
goods, software, technology, and services to ensure the safety of civil 
aviation and safe operation of U.S.-origin commercial passenger 
aircraft.



Sec. 545.515  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 Afghanistan are authorized:
    (1) The filing and prosecution of any application to obtain a 
patent, trademark, copyright or other form of intellectual property 
protection, including importation of or dealing in services or payment 
for services from the Taliban, persons whose property or interests in 
property are blocked pursuant to Sec. 545.201, or from persons within 
the territory of Afghanistan controlled by the Taliban connected to such 
intellectual property protection;
    (2) The receipt of 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

[[Page 711]]

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) Nothing in this section affects obligations under any other 
provision of law.



Sec. 545.516  Certain payments to or from the territory of Afghanistan controlled by the Taliban.

    (a) United States financial institutions, as defined in 
Sec. 545.314, are authorized to process transfers of funds to or from 
the territory of Afghanistan controlled by the Taliban if the transfer 
is covered in full by any of the following conditions and does not 
involve debiting a blocked account on the books of a U.S. financial 
institution:
    (1) The transfer arises from an underlying transaction that has been 
authorized by a specific license, general license, or nongovernmental 
organization's registration number issued pursuant to this part; or
    (2) The transfer arises from an underlying transaction that is not 
prohibited by or that is exempted from the prohibitions of this part, 
such as an exportation of information or informational materials to the 
territory of Afghanistan controlled by the Taliban, a travel-related 
remittance, or payment for the shipment of a donation of articles to 
relieve human suffering.
    (b) With respect to transactions meeting the conditions of paragraph 
(a) of this section, before a United States depository institution 
initiates a payment on behalf of any U.S. non-bank customer, or credits 
a transfer to the account on its books of the ultimate beneficiary, the 
United States depository institution must determine that the underlying 
transaction is not prohibited by this part. To meet this requirement, a 
United States depository institution must either obtain a copy of the 
applicable specific license or nongovernmental organization's 
registration number or obtain a certification from the customer or 
beneficiary confirming that the transaction is authorized by a general 
license or not prohibited by this part. Such a certification will not 
meet the requirements of this section if the United States depository 
institution knows or has reason to know that any part of the 
certification is false.



Sec. 545.517  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. 545.201 is authorized, provided that all 
receipt of payment for such services must be specifically licensed.



Sec. 545.518  Investment and reinvestment of certain funds.

    Subject to the requirements of Sec. 545.203, U.S. financial 
institutions are authorized to invest and reinvest assets blocked 
pursuant to Sec. 545.201, 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 persons whose property or interests in 
property are blocked pursuant to Sec. 545.201.



Sec. 545.519  Payments and transfers authorized for goods and services exported to the territory of Afghanistan controlled by the Taliban prior to the effective 
          date.

    (a) Specific licenses may be issued on a case-by-case basis to 
permit payment involving an irrevocable letter of credit issued or 
confirmed by a U.S. bank, or a letter of credit reimbursement confirmed 
by a U.S. bank, from a blocked account or otherwise, of amounts owed to 
or for the benefit of a person with respect to goods, software, 
technology, or services exported prior to the effective date, directly 
or indirectly to the territory of Afghanistan

[[Page 712]]

controlled by the Taliban, or to third countries for an entity operated 
from territory of Afghanistan controlled by the Taliban, or for the 
benefit of the Taliban, where the license application presents evidence 
satisfactory to the Office of Foreign Assets Control that the 
exportation occurred prior to the effective date (such evidence may 
include, for example, the bill of lading, the air waybill, the 
purchaser's written confirmation of completed services, customs 
documents, and insurance documents).
    (b) This section does not authorize the exportation of goods, 
software, technology, or services after the effective date pursuant to a 
contract entered into, or partially performed, prior to the effective 
date.



Sec. 545.520  Noncommercial personal remittances to or from the territory of Afghanistan controlled by the Taliban.

    United States financial institutions, as defined in Sec. 545.314, 
are authorized to process transfers of funds to or from the territory of 
Afghanistan controlled by the Taliban in cases in which the transfer 
involves a noncommercial, personal remittance, provided the beneficiary 
is not a person whose property or interests in property are blocked 
pursuant to Sec. 545.201 or any other part of this chapter and the 
transfer is not by, to, or through a person whose property or interests 
in property are blocked pursuant to Sec. 545.201 or any other part of 
this chapter V.



Sec. 545.521  Transactions related to U.S. citizens residing in the territory of Afghanistan controlled by the Taliban.

    U.S. citizens who reside on a permanent basis in the territory of 
Afghanistan controlled by the Taliban are authorized to engage in 
transactions within the territory of Afghanistan controlled by the 
Taliban ordinarily incident to their routine and necessary maintenance 
and other personal living expenses.
    Note to Sec. 545.521. This provision does not authorize U.S. 
financial institutions, as defined in Sec. 545.314, to transfer funds to 
persons whose property or interests in property are blocked pursuant to 
Sec. 545.201.



Sec. 545.522  Operation of accounts.

    The operation of an account in a U.S. financial institution, as 
defined in Sec. 545.314, for a natural person in the territory of 
Afghanistan controlled by the Taliban, other than a person whose 
property or interests in property are blocked pursuant to Sec. 545.201, 
is hereby authorized; however, such operation may not include the 
execution of transactions in support of transactions or activities 
prohibited by subpart B of this part.



Sec. 545.523  Extensions or renewals of letters of credit authorized.

    (a) The extension or renewal, at the request of the account party, 
of a letter of credit or a standby letter of credit issued or confirmed 
by a U.S. financial institution is authorized, provided the transfer of 
funds is not made to a blocked account.
    (b) Transactions conducted pursuant to this section must be reported 
to the Compliance Programs Division of the Office of Foreign Assets 
Control, U.S. Treasury Department, 1500 Pennsylvania Ave., NW., Annex, 
Washington, D.C. 20220, within 10 days after completion of the 
transaction.



Sec. 545.524  Extensions or renewals of loans.

    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 the Taliban, persons whose property 
or interests in property are blocked pursuant to Sec. 545.201, or 
persons in the territory of Afghanistan controlled by the Taliban.



Sec. 545.525  Certain services relating to participation in various events and activities authorized.

    (a) The importation into the United States or other dealing in 
services originating in the territory of Afghanistan controlled by the 
Taliban is authorized where such services are performed in the United 
States by a person from the territory of Afghanistan controlled by the 
Taliban who enters the United

[[Page 713]]

States on a visa issued by the State Department for the purpose of, or 
which services relate directly to, participation in a public conference, 
performance, exhibition or similar event, provided such services are 
consistent with that purpose.
    (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-1b (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 Taliban, or a person whose property or interests in property are 
blocked pursuant to Sec. 545.201, or a business entity or other 
organization territory of Afghanistan controlled by the Taliban.



Sec. 545.526  Certain importations for diplomatic or official personnel authorized.

    All transactions ordinarily incident to the importation into the 
United States of any goods, software, technology or services from the 
territory of Afghanistan controlled by the Taliban that are not for sale 
and are destined for official or personal use by personnel employed by 
the diplomatic missions of the Taliban to the United States and to 
international organizations located in the United States are authorized, 
unless the importation is otherwise prohibited by law.



Sec. 545.527  Diplomatic pouches.

    All transactions in connection with the importation into the United 
States from the territory of Afghanistan controlled by the Taliban, or 
the exportation from the United States to the territory of Afghanistan 
controlled by the Taliban, of diplomatic pouches and their contents are 
authorized.



                           Subpart F--Reports



Sec. 545.601  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. 545.701  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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Public Law 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty not to exceed $11,000 per violation may be 
imposed on any person who violates or attempts to violate any license, 
order, or regulation issued under the Act;
    (2) Whoever willfully violates or willfully attempts to violate any 
license, order, or regulation issued under the Act, upon conviction, 
shall be fined not more than $50,000, and if a natural person, may also 
be imprisoned for not more than 10 years; and any officer, director, or 
agent of any corporation who knowingly participates in such violation 
may be punished by a like fine, imprisonment, or both.

[[Page 714]]

    (b) The criminal penalties provided in the Act are subject to 
increase pursuant to 18 U.S.C. 3571.
    (c) Attention is also directed to 18 U.S.C. 1001(a), 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 materially 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.



Sec. 545.702  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, 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 respondent's right to make a written presentation within 
the applicable 30 day period set forth in section 545.703 as to why a 
monetary penalty should not be imposed or why, if imposed, the monetary 
penalty should be in a lesser amount than proposed.
    (c) Informal settlement prior to issuance of prepenalty notice. At 
any time prior to the issuance of a prepenalty notice, an alleged 
violator may request in writing that, for a period not to exceed sixty 
(60) days, the agency withhold issuance of the prepenalty notice for the 
exclusive purpose of effecting settlement of the agency's potential 
civil monetary penalty claims. In the event the Director grants the 
request, under terms and conditions within his 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 of the potential civil monetary penalty claim.



Sec. 545.703  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 his 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.

[[Page 715]]

    (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 
writing and may be handwritten or typed. 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.
    (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 not be imposed or 
why, if imposed, it should be in a lesser amount than proposed.
    (d) Default. If the respondent elects not to submit a written 
response within the time limit set forth in paragraph (a) of this 
section, the Office of Foreign Assets Control will conclude that the 
respondent has decided not to respond to the prepenalty notice. The 
agency generally will then issue a written penalty notice imposing the 
penalty proposed in the prepenalty notice.
    (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 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 (f) 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 remains in effect unless 
additional time is granted by the Office of Foreign Assets Control.
    (f) 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.



Sec. 545.704  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

[[Page 716]]

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 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 final agency 
action in federal district court.



Sec. 545.705  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. 545.801  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 D, of this chapter.



Sec. 545.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13129 of July 4, 1999 (64 FR 36759, July 7, 
1999) and any further Executive orders relating to the national 
emergency declared in Executive Order 13129 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. 545.901  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.



PART 550--LIBYAN SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

[[Page 717]]

                         Subpart B--Prohibitions

550.201  Prohibited imports of goods or services from Libya.
550.202  Prohibited exports of goods, technology or services to Libya.
550.203  Prohibited transportation-related transactions.
550.204  Prohibited purchases of goods from Libya.
550.205  Prohibited engagement in contracts.
550.206  Prohibited grants or extensions of credits or loans.
550.207  Prohibited transactions relating to travel to Libya or to 
          activities within Libya.
550.208  Evasions.
550.209  Prohibited transactions involving property in which the 
          Government of Libya has an interest; transactions with respect 
          to securities.
550.210  Effect of transfers violating the provisions of this part.
550.212  Holding of certain types of blocked property in interest-
          bearing accounts.

                         Subpart C--Definitions

550.301  Effective date.
550.302  Libya; Libyan.
550.303  Libyan origin.
550.304  Government of Libya.
550.305  Libyan person.
550.306  Person.
550.307  United States.
550.308  United States person.
550.309  License.
550.310  General license.
550.311  Specific license.
550.312  Credits or loans.
550.313  Transfer.
550.314  Property; property interests.
550.315  Interest.
550.316  Blocked account; blocked property.
550.317  Domestic bank.
550.318  Entity.
550.319  Entity of the Government of Libya; Libyan entity.
550.320  Banking institution.

                       Subpart D--Interpretations

550.401  Reference to amended sections.
550.402  Effect of amendment of sections of this part or of other 
          orders, etc.
550.403  Extensions of credits or loans to Libya.
550.404  Import and export of goods in transit before the effective 
          date.
550.405  Transactions incidental to a licensed transaction authorized.
550.406  Offshore transactions.
550.407  Transshipment through the United States prohibited.
550.408  Imports from third countries; transshipments.
550.409  Exports to third countries; transshipment.
550.410  Release from bonded warehouse or foreign trade zone.
550.411  Publications.
550.412  Termination and acquisition of an interest of the Government of 
          Libya.
550.413  Payments to Libya prohibited.
550.414  Exports of Libyan-titled goods.
550.415  Advance payments.
550.416  Imports of Libyan goods and purchases of goods from Libya.
550.417  Letters of credit.
550.418  Payments from blocked accounts for U.S. exporters and other 
          obligations prohibited.
550.419  Acquisition of instruments, including bankers' acceptances.
550.420  Indirect payments to the Government of Libya.
550.421  Setoffs prohibited.
550.422  Exportation of services; performance of service contracts; 
          legal services.

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

550.501  Effect of license or authorization.
550.502  Exclusion from licenses and authorizations.
550.503  Imports pursuant to Executive Order 12538.
550.504  Certain exports authorized.
550.505  Certain imports for diplomatic or official personnel 
          authorized.
550.506  Certain services relating to participation in various events 
          authorized.
550.507  Import of publications authorized.
550.508  Import of certain gifts authorized.
550.509  Import of accompanied baggage authorized.
550.510  Telecommunications and mail transactions authorized.
550.511  Payments and transfers to blocked accounts in domestic banks.
550.512  Payment of certain checks and drafts and documentary letters of 
          credit.
550.513  Completion of certain securities transactions.
550.515  [Reserved]
550.517  Exportation of certain legal services to the Government of, or 
          persons in, Libya.
550.520  Entries in certain accounts for normal service charges.
550.560  Transactions related to travel to, and residence within, Libya 
          by immediate family members of Libyan nationals.
550.568  Certain standby letters of credit and performance bonds.
550.569  Commercial sales and exportation of agricultural commodities, 
          medicine, and medical devices.
550.570  [Reserved]
550.571  Payment for and financing of exports of agricultural 
          commodities, medicine, and medical equipment.

[[Page 718]]

550.572   Brokering sales of agricultural commodities, medicine, and 
          medical devices.
550.573  Travel transactions in connection with the exportation of 
          agricultural commodities, medicine, and medical devices.

                           Subpart F--Reports

550.601  Records and reports.

                          Subpart G--Penalties

550.701  Penalties.
550.702  Detention of shipments.
550.703  Prepenalty notice.
550.704  Presentation responding to prepenalty notice.
550.705  Penalty notice.
550.706  Referral to United States Department of Justice.

                          Subpart H--Procedures

550.801  Procedures.
550.802  Delegation by the Secretary of the Treasury.
550.803  Customs procedures: Merchandise specified in Sec. 550.201.

                        Subpart I--Miscellaneous

550.901  Paperwork Reduction Act notice.

Appendix A to Part 550--Bulk Agricultural Commodities
Appendix B to Part 550--Eligible Procurement Bodies

    Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C. 287c, 
2349aa-8 and 2349aa-9; 31 U.S.C. 321(b); 49 U.S.C. 40106(b); 50 U.S.C. 
1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 
note); Pub. L. 106-387, 114 Stat. 1549; E.O. 12543, 51 FR 875; 3 CFR, 
1986 Comp., p. 181; E.O. 12544, 51 FR 1235, 3 CFR, 1986 Comp., p. 183; 
E.O. 12801, 57 FR 14319 3 CFR, 1992 Comp., p. 294.

    Source: 51 FR 1354, Jan. 10, 1986, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 550.101  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 those other parts 
authorizes any transaction prohibited by this part. In addition, 
licenses or authorizations contained in or issued pursuant to any other 
provision of law or regulations do not authorize 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. In particular, no license or 
authorization contained in or issued pursuant to this part authorizes 
the importation of petroleum products which would be banned by 
Presidential Proclamation 5141 of December 22, 1983 or Executive Order 
12538 of November 15, 1985.

[51 FR 1354, Jan. 10, 1986, as amended at 62 FR 45108, Aug. 25, 1997]



                         Subpart B--Prohibitions



Sec. 550.201  Prohibited imports of goods or services from Libya.

    Except as authorized, no goods or services of Libyan origin, other 
than publications and materials imported for news publication or news 
broadcast dissemination, may be imported into the United States.



Sec. 550.202  Prohibited exports of goods, technology or services to Libya.

    Except as authorized, no goods, technology (including technical data 
or other information) or services may be exported to Libya from the 
United States, except publications and donated articles intended to 
relieve human suffering, such as food, clothing, medicine and medical 
supplies intended strictly for medical purposes.



Sec. 550.203  Prohibited transportation-related transactions.

    Except as authorized, the following are prohibited:
    (a) Any transaction by a United States person relating to 
transportation to or from Libya;
    (b) The provision of transportation to or from the United States by 
any Libyan person or any vessel or aircraft of Libyan registration; or
    (c) The sale in the United States by any person holding authority 
under the Federal Aviation Act of any transportation by air which 
includes any stop in Libya.

[[Page 719]]



Sec. 550.204  Prohibited purchases of goods from Libya.

    Except as authorized, no U.S. person may purchase goods for export 
from Libya to any other country.



Sec. 550.205  Prohibited engagement in contracts.

    Except as authorized, no U.S. person may perform any contract in 
support of an industrial or other commercial or governmental project in 
Libya.



Sec. 550.206  Prohibited grants or extensions of credits or loans.

    Except as authorized, no U.S. person may grant or extend credits or 
loans to the Government of Libya.



Sec. 550.207  Prohibited transactions relating to travel to Libya or to activities within Libya.

    Except as authorized, no U.S. person may engage in any transaction 
relating to travel by any U.S. citizen or permanent resident alien to 
Libya, or to activities by any U.S. citizen or permanent resident alien 
within Libya, after the effective date, other than transactions:
    (a) Necessary to effect the departure of a U.S. citizen or permanent 
resident alien from Libya;
    (b) Relating to travel to, from, or within Libya prior to February 
1, 1986 to perform acts prohibited by Secs. 550.201, 550.202, 550.203, 
550.204, or 550.205 after that date; or
    (c) Relating to journalistic activity by persons regularly employed 
in such capacity by a newsgathering organization.

This section prohibits the unauthorized payment by a U.S. person of his 
own travel or living expenses to or within Libya.



Sec. 550.208  Evasions.

    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.



Sec. 550.209  Prohibited transactions involving property in which the Government of Libya has an interest; transactions with respect to securities.

    (a) Except as authorized by regulations, rulings, instructions, 
licenses, or otherwise, no property or interests in property of the 
Government of Libya that are in the United States that hereafter come 
within the United States or that are or hearafter 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 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 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 Libya is prohibited irrespective of the fact that at any time (either 
prior to, on, or subsequent to 4:10 p.m. e.s.t., January 8, 1986) 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.

[51 FR 2462, Jan. 16, 1986, as amended at 62 FR 45108, Aug. 25, 1997]



Sec. 550.210  Effect of transfers violating the provisions of this part.

    (a) Any transfer after 4:10 p.m. e.s.t., January 8, 1986, 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 the Government of Libya 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

[[Page 720]]

interest in or right, remedy, power or privilege with respect to such 
property.
    (b) No transfer before 4:10 p.m. e.s.t., January 8, 1986, 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 the 
Government of Libya has or has had an interest since such 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 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 willfull 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 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, DC, 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 4:10 p.m. e.s.t., January 8, 1986, there existed an interest 
of the Government of Libya.

[51 FR 2462, Jan. 16, 1986]



Sec. 550.212  Holding of certain types of blocked property in interest-bearing accounts.

    (a)(1) Any U.S. person, including a banking institution, currently 
holding property subject to Sec. 550.209 which, as of the later of 
September 11, 1992 or the date of receipt, is not being held in an 
interest-bearing account, or otherwise invested in a manner authorized 
by the Office of Foreign Assets Control, 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, as of such date, in 
a banking institution in the United States, or, for property held 
outside the United States, the foreign branch of a U.S. banking 
institution, unless otherwise authorized or directed by the Office of 
Foreign Assets Control.
    (2) The requirement in paragraph (a)(1) of this section shall apply 
to funds, currency, bank deposits, accounts, and any other financial 
assets, and any proceeds resulting from the sale of tangible or 
intangible property.

[[Page 721]]

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 blocked 
Government of Libya entity having an interest in the accounts.
    (b) For purposes of this section, the term interest-bearing account 
means a blocked account in a banking institution earning interest at 
rates that are commercially reasonable. Commercially reasonable means 
the rate currently offered other depositors on deposits of comparable 
size and maturity. Except as otherwise authorized, the funds may not be 
invested or held in instruments the maturity of which exceeds 90 days.
    (c) This section does not apply to blocked tangible property, such 
as chattels or real estate, 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.

[57 FR 41697, Sept. 11, 1992]



                         Subpart C--Definitions



Sec. 550.301  Effective date.

    The effective date means:
    (a) 12:01 a.m. Eastern Standard Time (e.s.t.), February 1, 1986, 
with respect to the transactions prohibited by Secs. 550.201, 550.202, 
550.203, 550.204, and 550.205;
    (b) 8:06 p.m. Eastern Standard Time (e.s.t.), January 7, 1986, with 
respect to transactions prohibited by Secs. 550.206 and 550.207; and
    (c) 4:10 p.m. Eastern Standard Time (e.s.t.), January 8, 1986, with 
respect to transactions prohibited by Sec. 550.209.

[51 FR 2463, Jan. 16, 1986]



Sec. 550.302  Libya; Libyan.

    The term Libya means the country of Libya and any Libyan territory, 
dependency, colony, protectorate, mandate, dominion, possession, or 
place subject to the jurisdiction thereof. The term Libyan means 
pertaining to Libya as defined in this section.



Sec. 550.303  Libyan origin.

    The term goods or services of Libyan origin includes:
    (a) Goods produced, manufactured, grown, or processed within Libya;
    (b) Goods which have entered into Libyan commerce;
    (c) Services performed in Libya or by a Libyan national who is 
acting as an agent, employee, or contractor of the Government of Libya, 
or of a business entity located in Libya. Services of Libyan origin are 
not imported into the United States when such services are provided in 
the United States by a Libyan national who, during indefinite residency 
in the United States, works as, for example, a teacher, athlete, 
restaurant or domestic worker, or a person employed in any other regular 
occupation.



Sec. 550.304  Government of Libya.

    The term Government of Libya includes:
    (a) The state and the Government of Libya, as well as any political 
subdivision, agency, or instrumentality thereof, including the Central 
Bank of Libya;
    (b) Any partnership, association, corporation, or other organization 
owned or controlled directly or indirectly 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;
    (d) Any other person or organization determined by the Secretary of 
the Treasury to be included within this section.
    Note to Sec. 550.304: Please refer to the appendices at the end of 
this chapter for listings of persons determined to fall within this 
definition who have been designated pursuant to this part. 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.

[59 FR 31143, June 17, 1994, as amended at 61 FR 32938, June 26, 1996; 
62 FR 45108, Aug. 25, 1997]

[[Page 722]]



Sec. 550.305  Libyan person.

    The term Libyan person means any Libyan citizen, any juridical 
person organized under the laws of Libya, or any juridical person owned 
or controlled, directly or indirectly, by a Libyan citizen or the 
Government of Libya.



Sec. 550.306  Person.

    The term person means an individual or entity.

[66 FR 36690, July 12, 2001]



Sec. 550.307  United States.

    The term United States means the United States and all areas under 
the jurisdiction or authority thereof.



Sec. 550.308  United States person.

    The term United States person, or as abbreviated, U.S. person, means 
any United States citizen, permanent resident alien, juridical person 
authorized under the laws of the United States (including foreign 
branches), or any person in the United States.

[66 FR 36690, July 12, 2001]



Sec. 550.309  License.

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



Sec. 550.310  General license.

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



Sec. 550.311  Specific license.

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



Sec. 550.312  Credits or loans.

    The term credits or loans 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. The term credits or loans includes, but is not limited to: 
overdrafts; currency swaps; purchases of debt securities issued by the 
Government of Libya after January 7, 1986; 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 the Government of Libya; and draw-downs on 
existing lines of credit.



Sec. 550.313  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 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, or the exercise of any power of appointment, power of 
attorney, or other power.

[51 FR 2463, Jan. 16, 1986]



Sec. 550.314  Property; property interests.

    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, letters of credit and any documents relating to any 
rights or obligations thereunder, powers of attorney, goods,

[[Page 723]]

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 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.

[51 FR 2463, Jan. 16, 1986]



Sec. 550.315  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.

[51 FR 2464, Jan. 16, 1986]



Sec. 550.316  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property in which the Government of Libya has an interest, 
with respect to which payments, transfers or withdrawals or other 
dealings may not be made or effected except pursuant to an authorization 
or license authorizing such action.

[51 FR 2464, Jan. 16, 1986]



Sec. 550.317  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 a Libyan 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 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) The term domestic bank includes any branch or office within the 
United States of a foreign bank that is not a Libyan entity.

[51 FR 2464, Jan. 16, 1986]



Sec. 550.318  Entity.

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

[66 FR 36690, July 12, 2001]



Sec. 550.319  Entity of the Government of Libya; Libyan entity.

    The terms entity of the Government of Libya and Libyan entity 
include:
    (a) Any corporation, partnership, association, or other entity in 
which the Government of Libya owns a majority or controlling interest, 
any entity substantially managed or funded by that government, and any 
entity which is otherwise controlled by that government;
    (b) Any agency or instrumentality of the Government of Libya, 
including the Central Bank of Libya.

[51 FR 2464, Jan. 16, 1986]



Sec. 550.320  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 purchasers and sellers thereof, as principal or agent, or any 
person holding credits for others as a direct or incidental part of its 
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.

[51 FR 2464, Jan. 16, 1986]



                       Subpart D--Interpretations



Sec. 550.401  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

[[Page 724]]

to refer to the same as currently amended unless otherwise so specified.



Sec. 550.402  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.



Sec. 550.403  Extensions of credits or loans to Libya.

    (a) The prohibition in Sec. 550.205 applies to the unlicensed 
renewal of credits or loans in existence on the effective date.
    (b) The prohibition in Sec. 550.205 applies to credits or loans 
extended in any currency.



Sec. 550.404  Import and export of goods in transit before the effective date.

    (a) Section 550.201 does not apply to goods:
    (1) If imported by vessel, where the vessel arrives within the 
limits of a port in the United States prior to the effective date with 
the intent to unlade such goods; or
    (2) If imported other than by vessel, where the goods arrive within 
the Customs territory of the United States before the effective date.
    (b) Section 550.202 does not apply to goods:
    (1) If exported by vessel or airline, where the goods are laden on 
board before the effective date; or
    (2) If exported other than by vessel or airplane, where the goods 
have left the United States before the effective date.

[51 FR 1354, Jan. 10, 1986, as amended at 51 FR 2464, Jan. 16, 1986]



Sec. 550.405  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 Libyan 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 Libya 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 Libya of any containers or similar 
goods owned or controlled by United States persons after the performance 
of transportation services to Libya; and
    (d) Financing of licensed sales for exportation or reexportation of 
agricultural commodities or products, medicine or medical equipment to 
Libya or the Government of Libya. See Sec. 550.571.

[64 FR 41789, Aug. 2, 1999, as amended at 66 FR 36690, July 12, 2001]



Sec. 550.406  Offshore transactions.

    (a) The provisions contained in Secs. 550.209 and 550.210 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 the Government of Libya has or has had any interest since 
4:10 p.m. EST, January 8, 1986, including:
    (1) Importation into such locations of, or
    (2) Dealings within such locations in, goods or services of Libyan 
origin.
    (b) Example. 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, Libyan crude oil or 
petroleum products refined in Libya.
    (c) Note. Exports or reexports of goods and technical data, or of 
the direct products of technical data (regardless of U.S. content), not 
prohibited by this part may require authorization

[[Page 725]]

from the U.S. Department of Commerce pursuant to the Export 
Administration Act of 1979, as amended, 50 U.S.C. App. 2401 et seq., and 
the Export Administration Regulations implementing that Act, 15 CFR 
parts 368-399.

[53 FR 5572, Feb. 25, 1988]



Sec. 550.407  Transshipment through the United States prohibited.

    (a) The prohibitions in Sec. 550.202 apply to the import into the 
United States, for transshipment or transit, of goods which are intended 
or destined for Libya.
    (b) The prohibitions in Sec. 550.201 apply to the import into the 
United States, for transshipment or transit, of goods of Libyan origin 
which are intended or destined for third countries.



Sec. 550.408  Imports from third countries; transshipments.

    (a) Imports into the United States from third countries of goods 
containing raw materials or components of Libyan origin are not 
prohibited if those raw materials or components have been incorporated 
into manufactured products or otherwise substantially transformed in a 
third country.
    (b) Imports into the United States of goods of Libyan origin which 
have been transshipped through a third country without being 
incorporated into manufactured products or otherwise substantially 
transformed in a third country are prohibited.



Sec. 550.409  Exports to third countries; transshipment.

    (a) Exports of goods or technology (including technical data and 
other information) from the United States to third countries are 
prohibited if the exporter knows, or has reason to know, that:
    (1) The goods or technology are intended for transshipment to Libya 
(including passage through, or storage in, intermediate destinations) 
without coming to rest in a third country and without being 
substantially transformed or incorporated into manufactured products in 
a third country, or
    (2) The exported goods are intended specifically for substantial 
transformation or incorporation in a third country into products to be 
used in Libya in the petroleum or petrochemical industry, or
    (3) The exported technology is intended specifically for use in a 
third country in the manufacture of, or for incorporation into, products 
to be used in Libya in the petroleum or petrochemical industry.
    (b) For the purposes of paragraph (a) of this section:
    (1) The scope of activities encompassed by the petroleum and 
petrochemical industries shall include, but not be limited to, the 
following activities: Oil, natural gas, natural gas liquids, or other 
hydrocarbon exploration (including geophysical and geological assessment 
activity), extraction, production, refining, distillation, cracking, 
coking, blending, manufacturing, and transportation; petrochemical 
production, processing, manufacturing, and transportation;
    (2) Exports subject to the prohibition in paragraph (a) of this 
section, include not only goods and technology for use in third-country 
products uniquely suited for use in the petroleum or petrochemical 
industry, such as oilfield services equipment, but also goods and 
technology for use in products, such as computers, office equipment, 
construction equipment, or building materials, which are suitable for 
use in other industries, but which are intended specifically for use in 
the petroleum or petrochemical industry; and
    (3) Goods and technology are intended specifically for a third-
country product to be used in Libya if the particular product is being 
specifically manufactured to fill a Libyan order or if the 
manufacturer's sales of the particular product are predominantly to 
Libya.
    (c) Specific licenses may be issued to authorize exports to third 
countries otherwise prohibited by paragraph (a)(2) of this section in 
appropriate cases, such as those involving extreme hardship or where the 
resulting third-country products will have insubstantial U.S. content.
    (d) Exports of goods or technology from the United States to third 
countries are not prohibited where the exporter has reasonable cause to 
believe that:

[[Page 726]]

    (1) Except as otherwise provided in paragraph (a) of this section, 
the goods will be substantially transformed or incorporated into 
manufactured products before export to Libya, or
    (2) The goods will come to rest in a third country for purposes 
other than reexport to Libya, e.g., for purposes of restocking the 
inventory of a distributor whose sales of the particular goods are not 
predominantly to Libya, or
    (3) The technology will come to rest in a third country for purposes 
other than reexport to Libya.
    (e) Note: Exports or reexports of goods and technical data, or of 
the direct products of technical data (regardless of U.S. content), not 
prohibited by this part may require authorization from the U.S. 
Department of Commerce pursuant to the Export Administration Act of 
1979, as amended, 50 U.S.C. App. 2401 et seq., and the Export 
Administration Regulations Implementing that Act, 15 CFR parts 368 
through 399.

[51 FR 22803, June 23, 1986; 51 FR 25635, July 15, 1986]



Sec. 550.410  Release from bonded warehouse or foreign trade zone.

    Section 550.201 does not prohibit the release from a bonded 
warehouse or a foreign trade zone of goods of Libyan origin imported 
into a bonded warehouse or a foreign trade zone prior to the effective 
date.



Sec. 550.411  Publications.

    For purposes of this part, publications include books, newspapers, 
magazines, films, phonograph records, tape recordings, photographs, 
microfilm, microfiche, and posters, including items described in the 
following:
    (a) 15 CFR 399.1, Control List, Group 5, CL No. 7599I: microfilm 
that reproduces the content of certain publications, and similar 
materials.
    (b) 15 CFR 399.1, Control List, Group 9, CL No. 7999I: certain 
publications and related materials.



Sec. 550.412  Termination and acquisition of an interest of the Government of Libya.

    (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 Libya, such property shall no 
longer be deemed to be property in which the Government of Libya 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 issued pursuant to this part, if property (including any 
property interest) is transferred to the Government of Libya, such 
property shall be deemed to be property in which there exists an 
interest of the Government of Libya.

[51 FR 2464, Jan. 16, 1986]



Sec. 550.413  Payments to Libya prohibited.

    The prohibition of transfers of property or interests in property to 
the Government of Libya in Sec. 550.209 applies to payments and 
transfers of any kind whatsoever, including payment of debt obligations, 
fees, taxes, and royalties owed to the Government of Libya, and also 
including payment or transfer of dividend checks, interest payments, and 
other periodic payments. Such payments may be made into blocked accounts 
as provided in Sec. 550.511.

[51 FR 2464, Jan. 16, 1986]



Sec. 550.414  Exports of Libyan-titled goods.

    (a) The prohibitions contained in Sec. 550.209 shall apply to any 
goods in the possession or control of a U.S. person if the Government of 
Libya had title to such property as of 4:10 p.m. e.s.t., on January 8, 
1986, or acquired title after such time.
    (b) Section 550.209 does not prohibit the export to Libya of the 
goods described in paragraph (a) of this section if such export is 
either not prohibited by Sec. 550.202 or permitted by an authorization 
or license issued pursuant to this part.
    (c) If the goods described in paragraph (a) of this section are not 
exported as described in paragraph (b) of this section, the property 
shall remain blocked and no change in title or other transaction 
regarding such property is

[[Page 727]]

permitted, except pursuant to an authorization or license issued 
pursuant to this part.

[51 FR 2464, Jan. 16, 1986]



Sec. 550.415  Advance payments.

    The prohibitions contained in Sec. 550.209 do not apply to goods 
manufactured, consigned, or destined for export to Libya, if the 
Government of Libya did not have title to such goods on or at any time 
after 4:10 p.m. e.s.t., January 8, 1986. However, if such goods are not 
exported to Libya prior to 12:01 p.m. e.s.t., February 1, 1986, then any 
advance payment received in connection with such property is subject to 
the prohibitions contained in Sec. 550.209.

[51 FR 2464, Jan. 16, 1986]



Sec. 550.416  Imports of Libyan goods and purchases of goods from Libya.

    The prohibitions contained in Sec. 550.209 shall not apply to the 
goods described in Secs. 550.201 and 550.204 if the importation or 
purchase of such goods is either not prohibited by Secs. 550.201 and 
550.204 or permitted by an authorization or license issued pursuant to 
this part. However, any payments in connection with such imports or 
purchases are subject to the prohibitions contained in Sec. 550.209.

[51 FR 2464, Jan. 16, 1986]



Sec. 550.417  Letters of credit.

    (a) Question. Prior to 4:10 p.m. e.s.t., January 8, 1986, a bank 
that is a U.S. person has issued or confirmed a documentary letter of 
credit for the Government of Libya as account party in favor of a U.S. 
person. The bank does not hold funds for the Government of Libya out of 
which it could reimburse itself for payment under the letter of credit. 
The U.S. person presents documentary drafts for exports to Libya made 
after 4:10 p.m. e.s.t., January 8, 1986. May the bank pay the U.S. 
exporter against the drafts?
    Answer. No. Such a payment is prohibited by Secs. 550.206 and 
550.209, as an extension of credit to the Government of Libya and a 
transfer of property in which there is an interest of the Government of 
Libya.
    (b) Question. On the same facts as in paragraph (a), the bank holds 
deposits for the Government of Libya. May it pay on the letter of credit 
and debit the blocked funds for reimbursement?
    Answer. No. A debit to a blocked account is prohibited by 
Sec. 550.209 except as licensed.
    (c) Question. On the same facts as in paragraph (a), the Government 
of Libya, after 4:10 p.m. e.s.t., January 8, 1986, transfers funds to 
the bank to collateralize the letter of credit for purposes of honoring 
the obligation to the U.S. exporter. Is the transfer authorized and may 
the bank pay against the draft?
    Answer. Yes. In accordance with Sec. 550.515, the transfer by the 
Government of Libya to the bank is licensed. The funds are not blocked 
and the bank is authorized to pay under the letter of credit and 
reimburse itself from the funds.
    (d) Question. Prior to 4:10 p.m. e.s.t., January 8, 1986, a foreign 
bank confirms a documentary letter of credit issued by its U.S. agency 
or branch for a non-Libyan account party in favor of a Libyan entity. 
Can the U.S. agency or branch of the foreign bank transfer funds to that 
foreign bank in connection with that foreign bank's payment under the 
letter of credit?
    Answer. No, the payment of the U.S. agency or branch is blocked, 
unless the foreign bank made payment to the Libyan entity prior to 4:10 
p.m. e.s.t., January 8, 1986.

[51 FR 2465, Jan. 16, 1986]



Sec. 550.418  Payments from blocked accounts for U.S. exporters and 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 12:01 a.m. e.s.t., February 1, 1986, 
except as authorized pursuant to this part.

[51 FR 2465, Jan. 16, 1986]



Sec. 550.419  Acquisition of instruments, including bankers' acceptances.

    Section 550.209 prohibits the acquisition by any U.S. person of any 
obligation, including bankers' acceptances, in which the documents 
evidencing the obligation indicate, or the U.S. person

[[Page 728]]

has actual knowledge, that the transaction being financed covers 
property in which, on or after 4:10 p.m. e.s.t., January 8, 1986, the 
Government of Libya has an interest of any nature whatsoever.

[51 FR 2465, Jan. 16, 1986]



Sec. 550.420  Indirect payments to the Government of Libya.

    The prohibition in Sec. 550.209 on payments or transfers to the 
Government of Libya applies to indirect payments (including 
reimbursement of a non-U.S. person for payment, as, for example, on a 
guarantee) made after 4:10 p.m. e.s.t., January 8, 1986.

[51 FR 2465, Jan. 16, 1986]



Sec. 550.421  Setoffs prohibited.

    A setoff against a blocked account, whether by a bank or other U.S. 
person, is a prohibited transfer under Sec. 550.209 if effected after 
4:10 p.m. e.s.t., January 8, 1986.

[51 FR 2465, Jan. 16, 1986]



Sec. 550.422  Exportation of services; performance of service contracts; legal services.

    (a) The prohibition on the exportation of services contained in 
Sec. 550.202 applies to services performed:
    (1) In the United States;
    (2) By an entity located in the United States, including its 
overseas branches; or
    (3) Outside the United States by an individual U.S. person 
ordinarily resident in the United States; on behalf of the Government of 
Libya, or where the benefit of such services is otherwise received in 
Libya. The benefit of services performed anywhere in the world on behalf 
of the Government of Libya, including services performed for a 
controlled entity or specially designated national of the Government of 
Libya, is presumed to be received in Libya.
    (b) The prohibitions contained in Secs. 550.205 and 550.209 apply to 
services performed by U.S. persons, wherever located:
    (1) On behalf of the Government of Libya;
    (2) With respect to property interests of the Government of Libya; 
or
    (3) In support of an industrial or other commercial or governmental 
project in Libya.
    (c) 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 Libya. See Sec. 550.517 on licensing policy with regard to the 
provision of certain legal services.

[58 FR 13199, Mar. 10, 1993]



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 550.501  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 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 of the license, 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 
transactions prohibited by any provision of parts 500, 505, 515, 520, 
535, 540, or 545 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

[[Page 729]]

property which would not otherwise exist under ordinary principles of 
law.



Sec. 550.502  Exclusion from licenses and authorizations.

    The Secretary of the Treasury reserves the right to exclude any 
person or property from the operation of any license or to restrict the 
applicability thereof to any person or property. Such action shall be 
binding upon all persons receiving actual or constructive notice 
thereof.



Sec. 550.503  Imports pursuant to Executive Order 12538.

    Petroleum products loaded aboard maritime vessels at any time prior 
to November 17, 1985 may be imported into the United States if such 
importation would be permitted pursuant to Executive Order 12538 of 
November 15, 1985 (50 FR 47527).



Sec. 550.504  Certain exports authorized.

    All transactions ordinarily incident to the exportation of any item, 
commodity, or product from the United States to or destined for Libya 
are authorized if such exports are authorized under one or more of the 
following regulations administered by the Department of Commerce:
    (a) 15 CFR 371.6, General license BAGGAGE: accompanied and 
unaccompanied baggage;
    (b) 15 CFR 371.13, General license GUS: shipments to personnel and 
agencies of the U.S. Government;
    (c) 15 CFR 371.18, General license GIFT: shipments of gift parcels;
    (d) 15 CFR 379.3, General license GTDA: technical data available to 
all destinations.



Sec. 550.505  Certain imports for diplomatic or official personnel authorized.

    All transactions ordinarily incident to the importation of any goods 
or services into the United States from Libya are authorized if such 
imports are destined for official or personal use by personnel employed 
by Libyan missions to international organizations located in the United 
States, and such imports are not for resale.



Sec. 550.506  Certain services relating to participation in various events authorized.

    The importation of services of Libyan origin into the United States 
is authorized where a Libyan national enters the United States on a visa 
issued by the State Department for the purpose of participating in a 
public conference, performance, exhibition or similar event.



Sec. 550.507  Import of publications authorized.

    The importation into the United States is authorized of all Libyan 
publications as defined in Sec. 550.411.



Sec. 550.508  Import of certain gifts authorized.

    The importation into the United States is authorized for goods of 
Libyan origin sent as gifts to persons in the United States where the 
value of the gift is not more than $100.



Sec. 550.509  Import of accompanied baggage authorized.

    Persons entering the United States directly or indirectly from Libya 
are authorized to import into the United States personal accompanied 
baggage normally incident to travel.



Sec. 550.510  Telecommunications and mail transactions authorized.

    All transactions of common carriers incident to the receipt or 
transmission of telecommunications and mail between the United States 
and Libya are authorized.



Sec. 550.511  Payments and transfers to blocked accounts in domestic banks.

    (a) Any payment or transfer of credit, including any payment or 
transfer by any U.S. person outside the United States, to a blocked 
account in a domestic bank in the name of the Government of Libya is 
hereby authorized, provided that such payment or transfer shall not be 
made from any blocked account in another banking institution within the 
United States, or if such payment or transfer represents, directly or 
indirectly, a transfer of any interest of the Government of Libya to any 
other country or person.

[[Page 730]]

    (b) This section does not authorize any transfer from a blocked 
account within the United States to an account held by any bank outside 
the United States. This section only authorizes payment into a blocked 
account held by a domestic bank as defined in Sec. 550.317.
    (c) This section does not authorize:
    (1) Any payment or transfer to any blocked account held in a name 
other than that of the Government of Libya where such government is the 
ultimate beneficiary of such payment or transfer; or
    (2) Any foreign exchange transaction in the United States 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.
    (d) 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.
    (e) 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.
    (f) 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 
specified blocked account or sub-account from which the payment or 
transfer is made.
    (g) This section authorizes transfer of a blocked demand deposit 
account to a blocked interest-bearing account in the name of the same 
person at the instruction of the depositor at any time. If such transfer 
is to a blocked account in a different domestic bank, such bank must 
furnish notification as described in the note to this section.
    Note to Sec. 550.511: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers.

[51 FR 2465, Jan. 16, 1986, as amended at 57 FR 41697, Sept. 11, 1992; 
58 FR 47645, Sept. 10, 1993; 62 FR 45108, Aug. 25, 1997]



Sec. 550.512  Payment of certain checks and drafts and documentary letters of credit.

    (a) A bank which is a U.S. person is hereby authorized to make 
payments from blocked accounts within such bank of checks and drafts 
drawn or issued prior to 4:10 p.m. e.s.t., January 8, 1986, provided 
that:
    (1) The amount involved in any one payment, acceptance, or debit 
does not exceed $5,000; or
    (2) The check or draft was in process of collection by a bank which 
is a U.S. person on or prior to such date and does not exceed $50,000; 
or
    (3) The check or draft is in payment for goods furnished or services 
rendered by a non-Libyan entity prior to 4:10 p.m. e.s.t., January 8, 
1986.
    (4) The authorization contained in paragraph (a) of this section, 
shall expire at 12:01 a.m., February 17, 1986.
    (b) Payments are authorized from blocked accounts of documentary 
drafts drawn under irrevocable letters of credit issued or confirmed in 
favor of a non-Libyan entity by a bank which is a U.S. person prior to 
4:10 p.m. e.s.t., January 8, 1986, provided that (1) the goods that are 
the subject of the payment under the letter of credit have been exported 
prior to 4:10 p.m. e.s.t., January 8, 1986; and (2) payment under the 
letter of credit is made by 12:01 a.m. e.s.t., February 17, 1986.
    (c) Paragraphs (a) and (b) of this section, do not authorize any 
payment to a Libyan entity except payments into a blocked account in a 
domestic bank in accordance with Sec. 550.511.

[51 FR 2465, Jan. 16, 1986]



Sec. 550.513  Completion of certain securities transactions.

    (a) Banking institutions within the United States are hereby 
authorized to complete, on or before January 21, 1986, purchases and 
sales made prior to 4:10 p.m. e.s.t., January 8, 1986, of securities 
purchased or sold for the account of

[[Page 731]]

the Government of Libya 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 within the United States 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 within the United States 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.

[51 FR 2466, Jan. 16, 1986]



Sec. 550.515  [Reserved]



Sec. 550.517  Exportation of certain legal services to the Government of, or persons in, Libya.

    (a) The provision to the Government of Libya, or to a person in 
Libya, 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. The provision of any other legal services as 
interpreted in Sec. 550.422 requires the issuance of a specific license.
    (b) Specific licenses are 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 Libya or to a person in 
Libya:
    (1) Provision of legal advice and counselling to the Government of 
Libya or to a person in Libya on the requirements of and compliance with 
the laws of any jurisdiction within the United States, provided that 
such advice and counselling is not provided to facilitate transactions 
in violation of subpart B of this part;
    (2) Representation of the Government of Libya or of a person in 
Libya 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 Libya that were in existence 
prior to January 8, 1986, or of a person in Libya;
    (4) Representation of the Government of Libya or a person in Libya 
before any federal agency with respect to the imposition, 
administration, or enforcement of U.S. sanctions against Libya; 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 Libya is prohibited unless specifically licensed in 
accordance with Sec. 550.210(e).

[58 FR 13199, Mar. 10, 1993]



Sec. 550.520  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 Libya 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 assessed according to the published fee schedule of the 
holder of such property and applicable to other depositors on deposits 
of comparable size and maturity.

[57 FR 41697, Sept. 11, 1992]

[[Page 732]]



Sec. 550.560  Transactions related to travel to, and residence within, Libya by immediate family members of Libyan nationals.

    (a) General License. Subject to compliance with the registration 
requirements set forth in paragraph (d) of this section, the following 
transactions are authorized in connection with travel to, from and 
within Libya and residence within Libya by U.S. citizens and permanent 
resident aliens who are immediate family members of Libyan nationals:
    (1) All transportation-related transactions ordinarily incident to 
travel to, from and within Libya.
    (2) All transactions ordinarily incident to residence within Libya, 
including payment of living expenses and the acquisition in Libya of 
goods for personal use or consumption there.
    (3) All transactions incident to the processing and payment of 
checks, drafts, traveler's checks, and similar instruments negotiated in 
Libya by any person licensed under this section.
    (4) The purchase within Libya and importation as accompanied baggage 
of items for noncommercial use, provided that the aggregate value of 
such purchases imported into the United States conforms to limitations 
established by the United States Customs Service.
    (b) Definition. For purposes of this section, the term immediate 
family member means a spouse, child, parent, mother-in-law, father-in-
law, son-in-law or daughter-in-law.
    (c) Specific Licenses. Specific licenses authorizing the 
transactions set forth in paragraph (a) of this section may be issued in 
appropriate cases to persons similarly situated to the persons described 
in paragraph (b) of this section where such specific licenses are 
necessary to preserve the integrity of established family units.
    (d) Registration. (1) The general license set forth in this section 
is available only to those U.S. citizens and permanent resident aliens 
who register their eligibility in writing with either of the following:

Embassy of Belgium, Ali Obeydah St., Ibn El Jarah No. 1, Immeuble 
Chirlando, Tripoli, Libya, Telephone: 37797

      or

Licensing Section, Office of Foreign Assets Control, Department of the 
Treasury, Washington, DC 20220, Telephone: (202) 376-0236.


Registration under this paragraph is deemed complete upon receipt at one 
of the above addresses of a letter, signed by or on behalf of each 
eligible U.S. citizen or permanent resident alien being registered, 
containing the following information:
    (i) The name and the date and place of birth of the U.S. citizen(s) 
or permanent resident alien(s) registering (the ``registrant''), 
including the name on which the registrant's most recent U.S. passport 
or Alien Registration Receipt Card was issued, if different;
    (ii) If applicable, the place and date of the registrant's 
naturalization as a U.S. citizen, and the number of the registrant's 
naturalization certificate, or, for permanent resident aliens, the Alien 
Registration Number of the registrant's Alien Registration Receipt Card;
    (iii) The name, relationship, and address of the Libyan national 
with whom the registrant resides as an immediate family member and whose 
relationship forms the basis for the registrants's eligibility under 
this general license; and
    (iv) The number and issue date of the registrant's current U.S. 
passport, and the most recent date on which the passport was validated 
by the U.S. Department of State for travel to Libya; or, if the 
registrant does not hold a current U.S. passport, the country, issue 
date, and number of the registrant's current passport or other travel 
document, if any.
    (2) The lack of validation of a registrant's U.S. passport for 
travel to Libya does not affect eligibility for the benefits of the 
general license set forth in this section for persons who otherwise 
qualify. Current information on travel document status as requested in 
paragraph (d)(1) of this section must, however, be furnished to register 
a registrant's eligibility for this license.
    (e) Other requirements. The general license set forth in this 
section shall not operate to relieve any person licensed hereunder from 
compliance with any

[[Page 733]]

other U.S. legal requirements applicable to the transactions authorized 
pursuant to paragraph (a) of this section.

[51 FR 19752, June 2, 1986]



Sec. 550.568  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 a Libyan entity is 
prohibited by Sec. 550.209 and not authorized, notwithstanding the 
provisions of Sec. 550.511, if either (1) a specific license has been 
issued pursuant to the provisions of paragraph (b) of this section or 
(2) ten 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 such a standby letter of credit, it shall promptly 
notify the account party. The account party 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 Libyan 
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. Nothing in this section relieves any such 
bank or such account party from giving any notice of defense against 
payment or reimbursement that is required by applicable law.
    (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 account party 
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) ten 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 the account party on any 
standby letter of credit or any other person from at any time contesting 
the legality of the demand from Libyan 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 payments thereunder are subsequently unblocked.
    (g) For the purposes of this section,
    (1) The term standby letter of credit shall mean a letter of credit 
securing performance of, or repayment of any advance payments or 
deposits under, a contract with the Government of Libya, or any similar 
obligation in the nature of a performance bond; and
    (2) The term account party shall mean the person for whose account 
the standby letter of credit is opened.
    (h) The regulations do not authorize any U.S. person to reimburse a 
non-U.S. bank for payment to the Government of Libya under a standby 
letter of credit, except by payments into a blocked account in 
accordance with Sec. 550.511 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 period 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.

[51 FR 2466, Jan. 16, 1986]

[[Page 734]]



Sec. 550.569  Commercial sales and exportation of agricultural commodities, medicine, and medical devices.

    (a) One-year license requirement. The exportation of agricultural 
commodities (including bulk agricultural commodities listed in appendix 
A to this part 550), medicine, or medical devices to the Government of 
Libya, any entity in Libya, individuals in Libya, or persons in third 
countries purchasing specifically for resale to any of the foregoing, 
shall only be made pursuant to a one-year license issued by the United 
States Department of the Treasury, 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 license will be granted for the exportation of 
agricultural commodities, medicine, or medical equipment to any entity 
or individual in Libya promoting international terrorism. Executory 
contracts entered into pursuant to paragraph (b)(2) of this section 
prior to the issuance of the one-year license described in this 
paragraph shall be deemed to have been signed on the date of issuance of 
that one-year 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 license).
    (b) General license for arrangement of exportation of covered 
products. (1) The making of shipping arrangements, cargo inspection, 
obtaining of insurance, and arrangement of financing (consistent with 
Sec. 550.571) for the exportation of agricultural commodities, medicine, 
and medical devices to the Government of Libya, entities in Libya, 
individuals in Libya, or persons in third countries purchasing 
specifically for resale to any of the foregoing, is authorized.
    (2) If desired, 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 of agricultural commodities, medicine, and medical devices 
to the Government of Libya, entities in Libya, individuals in Libya, or 
persons in third countries purchasing specifically for resale to any of 
the foregoing, is authorized, provided that performance of an executory 
contract is expressly made contingent upon the prior issuance of the 
one-year license described in paragraph (a) of this section.
    (c) Instructions for obtaining one-year licenses. In order to obtain 
the one-year license described in paragraph (a), 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, email addresses).
    (3) The names and addresses and, if available, fax and phone numbers 
of all parties with an interest in the transaction. If the goods are 
being exported to a purchasing agent in Libya, the exporter must 
identify the agent's principals at the wholesale level for whom the 
purchase is being made. If the goods are being exported 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 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 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 Export Administration (``BXA''), 
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

[[Page 735]]

medical supplies, such as syringes, bandages, gauze and similar items, 
that are specifically listed on BXA's website, www.bxa.doc.gov/ 
Regulations/TradeSanctionsReform ExportEnhancementAct.html. Medical 
supplies that are specifically listed on BXA's website do not require an 
Official Commodity Classification of EAR 99 from BXA. BXA will also 
provide a list on its website of medicines that are ineligible for a 
one-year license under these procedures. If an exporter is uncertain 
whether the medicine to be exported is eligible, they should seek an 
Official Commodity Classification of EAR 99 from BXA and submit a copy 
to OFAC. See, 15 CFR 745.3 for instructions for obtaining Official 
Commodity Classification of EAR 99 from BXA.
    (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) This section does not apply to any transaction or dealing 
involving property blocked pursuant to this chapter or any other 
activity prohibited by this chapter not otherwise authorized in 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 section, 
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
    (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 Libya 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 section, 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 section, 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).

[[Page 736]]

    (f) Transition period. (1) Specific licenses issued prior to July 
26, 2001 authorizing the performance of executory contracts for the sale 
of agricultural commodities, medicine, or medical equipment shall remain 
in effect until the expiration date specified in the license or July 26, 
2002, whichever comes first. However, after July 26, 2001, new contracts 
for the exportation of agricultural commodities, medicine, or medical 
devices may be entered into only pursuant to the terms of, and as 
authorized by, this part.
    (2) Specific licenses issued prior to July 26, 2001 authorizing the 
sale and exportation or reexportation of bulk agricultural commodities 
listed in Appendix A to 31 CFR parts 538 and 550 and Appendix B to 31 
CFR part 560 shall remain in effect solely to permit completion of 
performance of contracts already entered into prior to July 26, 2001 
pursuant to the license. As of July 26, 2001, new contracts for the 
exportation of bulk agricultural commodities may be entered into only 
pursuant to the terms of, and as authorized by, this part.

[66 FR 36690, July 12, 2001]



Sec. 550.570  [Reserved]



Sec. 550.571  Payment for and financing of exports of agricultural commodities, medicine, and medical equipment.

    (a) General license for payment terms. The following payment terms 
for sales of agricultural commodities and products, medicine, and 
medical equipment pursuant to Secs. 550.569 and 550.570 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 Libya 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 Secs. 550.569 and 550.570. 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 Libya 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. 550.569 or Sec. 550.572 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 Libya may be made with United States Government 
assistance, including United States foreign assistance, United States 
export assistance, and any United States credit or guarantees absent a 
Presidential waiver.

[64 FR 41790, Aug. 2, 1999, as amended at 64 FR 58791, Nov. 1, 1999; 66 
FR 36691, July 12, 2001]



Sec. 550.572  Brokering 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 sale and exportation or reexportation by United 
States persons of agricultural commodities, medicine, and medical 
devices, provided that the sale and exportation or reexportation is 
authorized by a one-year license issued pursuant to Sec. 550.569.
    (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-Libyan persons for the sale

[[Page 737]]

and exportation or reexportation of bulk agricultural commodities to the 
Government of Libya, entities in Libya or individuals in Libya. 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 550;
    (2) Are to purchasers permitted pursuant to Sec. 550.569;

    Note to paragraph (b)(2): Requests for specific licenses to provide 
brokerage services under this paragraph must include all of the 
information described in Sec. 550.569(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 EAR99 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 Export Administration. 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.

[64 FR 41790, Aug. 2, 1999, as amended at 64 FR 58791, Nov. 1, 1999; 66 
FR 36691, July 12, 2001]



Sec. 550.573  Travel transactions in connection with the exportation of agricultural commodities, medicine, and medical devices.

    Travel transactions to, from, and within Libya for the sole purpose 
of engaging in transactions authorized by Sec. 550.569 are authorized. 
Travel transactions related to installation or servicing of medical 
equipment sold pursuant to Sec. 550.569 must be authorized by specific 
license. See Sec. 501.801(b) of this chapter for specific licensing 
procedures.

    Note to Sec. 550.573: U.S. passports must be validated by the U.S. 
Department of State for travel to Libya.

[66 FR 36692, July 12, 2001]



                           Subpart F--Reports



Sec. 550.601  Records and reports.

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

[62 FR 45108, Aug. 25, 1997]



                          Subpart G--Penalties



Sec. 550.701  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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty of not to exceed $11,000 per violation may be 
imposed on any person who violates any license, order, or regulation 
issued under the Act;
    (2) Whoever willfully violates any license, order, or regulation 
issued under the Act shall, upon conviction be fined not more than 
$50,000, or, if a natural person, may be imprisoned for not more than 
ten years, or both; and any officer, director, or agent of any 
corporation who knowingly participates in such violation may be punished 
by a like fine, imprisonment or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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

[[Page 738]]

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.
    (e) Violations of this part may also be subject to relevant 
provisions of the Customs laws and other applicable laws.

[51 FR 1354, Jan. 10, 1986, as amended at 61 FR 43461, Aug. 23, 1996; 61 
FR 54939, Oct. 23, 1996; 62 FR 45108, Aug. 25, 1997]



Sec. 550.702  Detention of shipments.

    Import shipments into the United States of goods of Libyan origin in 
violation of Sec. 550.201 and export shipments from the United States of 
goods destined for Libya in violation of Sec. 550.202 shall be detained. 
No such import or export shall be permitted to proceed, except as 
specifically authorized by the Secretary of the Treasury. Such shipments 
shall be subject to licensing, penalties or forfeiture action, under the 
Customs laws or other applicable provision of law, depending on the 
circumstances.



Sec. 550.703  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 7357, Mar. 8, 1988]



Sec. 550.704  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 
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 7357, Mar. 8, 1988]



Sec. 550.705  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

[[Page 739]]

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 7358, Mar. 8, 1988]



Sec. 550.706  Referral to United States Department of Justice.

    In the event that the person named does not pay the penalty imposed 
pursuant to this subpart or make payment arrangements acceptable to the 
Director within thirty days of the mailing of the written notice of the 
imposition of the penalty, the matter shall be referred to the United 
States Department of Justice for appropriate action to recover the 
penalty in a civil suit in a Federal district court.

[53 FR 7358, Mar. 8, 1988]



                          Subpart H--Procedures



Sec. 550.801  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 
subpart D of part 501 of this chapter.

[62 FR 45108, Aug. 25, 1997]



Sec. 550.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 12543, Executive Order 12544, Executive 
Order 12801, and any further Executive orders relating to the national 
emergency declared with respect to Libya in Executive Order 12543 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.

[51 FR 1354, Jan. 10, 1986, as amended at 57 FR 41697, Sept. 11, 1992. 
Redesignated at 62 FR 45108, Aug. 25, 1997]



Sec. 550.803  Customs procedures: Merchandise specified in Sec. 550.201.

    (a) With respect to merchandise specified in Sec. 550.201, 
appropriate Customs officers shall not accept or allow any:
    (1) Entry for consumption or warehousing (including any appraisement 
entry, any entry of goods imported in the mails, regardless of value, 
and any informal entry);
    (2) Entry for immediate exportation;
    (3) Entry for transportation and exportation;
    (4) Entry for immediate transportation;
    (5) Withdrawal from warehouse;
    (6) Entry, transfer or withdrawal from a foreign trade zone; or
    (7) Manipulation or manufacture in a warehouse or in a foreign trade 
zone, unless:
    (i) The merchandise was imported prior to 12:01 a.m., Eastern 
Standard Time, February 1, 1986, or
    (ii) A specific license pursuant to this part is presented, or
    (iii) Instructions from the Office of Foreign Assets Control, 
authorizing the transactions are received.
    (b) Whenever a specific license is presented to an appropriate 
Customs officer in accordance with this section, one additional legible 
copy of the entry, withdrawal or other appropriate document with respect 
to the merchandise involved shall be filed with the appropriate Customs 
officers at the port where the transaction is to take place. Each copy 
of any such entry, withdrawal or other appropriate document, including 
the additional copy, shall bear plainly on its face the number of the 
license pursuant to which it is filed. The original copy of the specific 
license shall be presented to the appropriate Customs officers in 
respect of each such transactions and shall bear a notation in ink by 
the licensee or person presenting the license showing the description, 
quantity and value of the merchandise to be entered, withdrawn or 
otherwise dealt with. This notation shall be so placed and so written 
that

[[Page 740]]

there will exist no possibility of confusing it with anything placed on 
the license at the time of its issuance. If the license in fact 
authorizes the entry, withdrawal or other transactions with regard to 
the merchandise, the appropriate Customs officer, or other authorized 
Customs employee, shall verify the notation by signing or initialing it 
after first assuring himself that it accurately describes the 
merchandise it purports to represent. The license shall thereafter be 
returned to the person presenting it and the additional copy of the 
entry, withdrawal or other appropriate document shall be forwarded by 
the appropriate Customs officer to the Office of Foreign Assets Control.
    (c) If it is unclear whether an entry, withdrawal or other action 
affected by this section requires a specific Foreign Assets Control 
license, the appropriate Customs officer shall withhold action thereon 
and shall advise such person to communicate directly with the Office of 
Foreign Assets Control to request that instructions be sent to the 
Customs officer to authorize him to take action with regard thereto.

[51 FR 1354, Jan. 10, 1986, as amended at 57 FR 1390, Jan. 14, 1992. 
Redesignated at 62 FR 45108, Aug. 25, 1997]



                        Subpart I--Miscellaneous



Sec. 550.901  Paperwork Reduction Act notice.

    The information collection requirements in Sec. 550.560(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 
1505-0093. 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 45108, Aug. 25, 1997]

          Appendix A to Part 550--Bulk Agricultural Commodities

    Notes: 1. Appendix A sets forth those agricultural commodities 
eligible for the bulk agricultural commodity sales licensing procedures 
in Sec. 550.570.
    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
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
------------------------------------------------------------------------


[64 FR 41791, Aug. 2, 1999]

[[Page 741]]

           Appendix B to Part 550--Eligible Procurement Bodies

    This Appendix B sets forth eligible procurement bodies of the 
Government of Libya identified by the Office of Foreign Assets Control 
as not being affiliated with the coercive organs of the state. See 
Sec. 550.570(e).
    National Supply Corporation (a.k.a. National Supplies Corporation; 
a.k.a. NASCO).

[64 FR 58791, Nov. 1, 1999]



PART 560--IRANIAN TRANSACTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

560.201  Prohibited importation of goods or services from Iran.
560.202  [Reserved]
560.203  Evasions; attempts.
560.204  Prohibited exportation, reexportation, sale or supply of goods, 
          technology, or services to Iran.
560.205  Prohibited reexportation of goods, technology or services to 
          Iran or the Government of Iran by persons other than United 
          States persons; exceptions.
560.206  Prohibited trade-related transactions with Iran; goods, 
          technology, or services.
560.207  Prohibited investment.
560.208  Prohibited facilitation by United States persons of 
          transactions by foreign persons.
560.209  Prohibited transactions with respect to the development of 
          Iranian petroleum resources.
560.210  Exempt transactions.

                     Subpart C--General Definitions

560.301  Effective date.
560.302  [Reserved]
560.303  Iran; Iranian.
560.304  Government of Iran.
560.305  Person; entity.
560.306  Iranian-origin goods or services; goods or services owned or 
          controlled by the Government of Iran.
560.307  United States.
560.308  Importation of goods.
560.309  [Reserved]
560.310  License.
560.311  General license.
560.312  Specific license.
560.313  Entity owned or controlled by the Government of Iran.
560.314  United States person.
560.315  Information and informational materials.
560.316  New investment.
560.317  Credits or loans.
560.318  [Reserved]
560.319  United States depository institution.
560.320  Iranian accounts.

                       Subpart D--Interpretations

560.401  Reference to amended sections.
560.402  Effect of amendment.
560.403  Transshipment through Iran.
560.404  [Reserved]
560.405  Transactions incidental to a licensed transaction authorized.
560.406  Transshipment or transit through United States prohibited.
560.407  Transactions related to Iranian-origin goods.
560.408  Importation into and release from a bonded warehouse or foreign 
          trade zone.
560.409  [Reserved]
560.410  Exportation, reexportation, sale or supply of services.
560.411  [Reserved]
560.412  Extensions of credit or loans to Iran.
560.413  Letter of credit payments by Iranian banks in the United 
          States.
560.414  Reexportation of certain U.S.-origin goods exported prior to 
          May 7, 1995.
560.416  Brokering services.
560.417  Facilitation; change of policies and procedures; referral of 
          business opportunities offshore.
560.418  Release of technology or software in the United States or a 
          third country.
560.419  U.S. employment of persons normally located in Iran.
560.420  Reexportation by non-U.S. persons of certain foreign-made 
          products containing U.S.-origin goods or technology.

 Subpart E--Licenses, Authorizations and Statements of Licensing Policy

560.501  Effect of license or authorization.
560.502  Exclusion from licenses and authorizations.
560.503-560.504  [Reserved]
560.505  Importation of certain Iranian-origin services authorized; 
          activities related to certain visa categories authorized.
560.506  Importation and exportation of certain gifts authorized.
560.507  Accompanied baggage authorized.
560.508  Telecommunications and mail transactions authorized.
560.509  Certain transactions related to patents, trademarks and 
          copyrights authorized.
560.510  Transactions related to the resolution of disputes between the 
          United States or United States nationals and the Government of 
          Iran.

[[Page 742]]

560.511  Exportation or supply of insubstantial United States content 
          for use in foreign-made products or technology.
560.512  Iranian Government missions in the United States.
560.513  Importation of Iranian-origin oil.
560.514  [Reserved]
560.515  30-day delayed effective date for pre-May 7, 1995 trade 
          contracts involving Iran.
560.516  Payment and United States dollar clearing transactions 
          involving Iran.
560.517  Exportation of services: Iranian accounts at United States 
          depository institutions.
560.518  Transactions in Iranian-origin and Iranian Government property.
560.519  Policy governing news organization offices.
560.520   Exportation of agricultural commodities on contracts entered 
          into prior to May 7, 1995.
560.521  Diplomatic pouches.
560.522  Allowable payments for overflights of Iranian airspace.
560.523  Exportation of equipment and services relating to information 
          and informational materials.
560.524  Household goods and personal effects.
560.525  Exportation of certain legal services.
560.526  Commodities trading and related transactions.
560.527  Rescheduling existing loans.
560.528  Aircraft safety.
560.529  Bunkering and emergency repairs.
560.530  Commercial sales, exportation, and reexportation of 
          agricultural commodities, medicine, and medical equipment.
560.531  [Reserved]
560.532  Payment for and financing of exports and reexports of 
          commercial commodities, medicine, and medical devices.
560.533  Brokering sales of agricultural commodities, medicine, and 
          medical devices.
560.534  Importation to the United States of, and dealing in, certain 
          foodstuffs and carpets authorized.
560.535  Letters of credit and brokering services relating to certain 
          foodstuffs and carpets.

                           Subpart F--Reports

560.601  Records and reports.
560.602  [Reserved]
560.603  Reports on oil transactions engaged in by foreign affiliates.

                          Subpart G--Penalties

560.701  Penalties.
560.702  Detention of shipments.
560.703  Prepenalty notice.
560.704  Presentation responding to prepenalty notice.
560.705  Penalty notice.
560.706  Referral for administrative collection measures or to United 
          States Department of Justice.

                          Subpart H--Procedures

560.801  Procedures.
560.802  Delegation by the Secretary of the Treasury.
560.803  Customs procedures: Goods specified in Sec. 560.201.

                   Subpart I--Paperwork Reduction Act

560.901  Paperwork Reduction Act notice.

Appendix A to Part 560--Financial Institutions Determined To Be Owned or 
          Controlled by the Government of Iran
Appendix B to Part 560--Bulk Agricultural Commodities
Appendix C to Part 560--Eligible Procurement Bodies

    Authority: 3 U.S.C. 301; 18 U.S.C. 2339B, 2332d; 22 U.S.C. 2349aa-9; 
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. 106-387, 114 Stat. 1549; E.O. 
12613, 52 FR 41940, 3 CFR, 1987 Comp., p. 256; E.O. 12957, 60 FR 14615, 
3 CFR, 1995 Comp., p. 332; E.O. 12959, 60 FR 24757, 3 CFR, 1995 Comp., 
p. 356; E.O. 13059, 62 FR 44531, 3 CFR, 1997 Comp., p. 217.

    Source: 60 FR 47063, Sept. 11, 1995, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 560.101  Relation of this part to other laws and regulations.

    (a) This part is separate from, and independent of, the other parts 
of this chapter, including part 535 of this chapter, ``Iranian Assets 
Control Regulations,'' 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 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 regulations 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

[[Page 743]]

complying with any other applicable laws or regulations.

[60 FR 47063, Sept. 11, 1995, as amended at 62 FR 45109, Aug. 25, 1997]



                         Subpart B--Prohibitions



Sec. 560.201  Prohibited importation of goods or services from Iran.

    Except as otherwise authorized pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to May 7, 1995, the importation into the United States of 
any goods or services of Iranian origin or owned or controlled by the 
Government of Iran, other than information and informational materials 
within the meaning of section 203(b)(3) of the International Emergency 
Economic Powers Act (50 U.S.C. 1702(b)(3)), is prohibited.

[64 FR 20170, Apr. 26, 1999]



Sec. 560.202  [Reserved]



Sec. 560.203  Evasions; attempts.

    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 contained in this part 
is hereby prohibited.



Sec. 560.204  Prohibited exportation, reexportation, sale or supply of goods, technology, or services to Iran.

    Except as otherwise authorized pursuant to this part, including 
Sec. 560.511, and notwithstanding any contract entered into or any 
license or permit granted prior to May 7, 1995, the exportation, 
reexportation, sale, or supply, directly or indirectly, from the United 
States, or by a United States person, wherever located, of any goods, 
technology, or services to Iran or the Government of Iran is prohibited, 
including the exportation, reexportation, sale, or supply of any goods, 
technology, or services to a person in a third country undertaken with 
knowledge or reason to know that:
    (a) Such goods, technology, or services are intended specifically 
for supply, transshipment, or reexportation, directly or indirectly, to 
Iran or the Government of Iran; or
    (b) Such goods, technology, or services are intended specifically 
for use in the production of, for commingling with, or for incorporation 
into goods, technology, or services to be directly or indirectly 
supplied, transshipped, or reexported exclusively or predominantly to 
Iran or the Government of Iran.

[64 FR 20170, Apr. 26, 1999]



Sec. 560.205  Prohibited reexportation of goods, technology or services to Iran or the Government of Iran by persons other than United States persons; 
          exceptions.

    (a) Except as otherwise authorized pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to May 7, 1995, the reexportation from a third country, 
directly or indirectly, by a person other than a United States person, 
of any goods, technology or services that have been exported from the 
United States is prohibited, if:
    (1) Undertaken with knowledge or reason to know that the 
reexportation is intended specifically for Iran or the Government of 
Iran; and
    (2) The exportation of such goods, technology, or services from the 
United States to Iran was subject to export license application 
requirements under any United States regulations in effect on May 6, 
1995, or thereafter is made subject to such requirements imposed 
independently of this part (see Sec. 560.414).
    (b) The prohibitions of paragraph (a) of this section shall not 
apply to those goods or that technology subject to export license 
application requirements if such goods or technology have been:
    (1) Substantially transformed into a foreign-made product outside 
the United States; or
    (2) Incorporated into a foreign-made product outside the United 
States if the aggregate value of such goods and technology described in 
paragraph (a)(2) of this section constitutes less than 10 percent of the 
total value of the foreign-made product to be exported from a third 
country (see Sec. 560.420).

[[Page 744]]

    (c) Reexportation by United States persons or from the United States 
is governed by other sections in this part, including Secs. 560.204 and 
560.206.

    Note to Sec. 560.205. The reexportation of U.S.-origin goods or 
technology, including U.S.-origin goods or technology that have been 
incorporated or substantially transformed into a foreign-made product, 
not prohibited by this section, may require authorization by the U.S. 
Department of Commerce under the Export Administration Regulations (15 
CFR parts 740-774) or by the U.S. State Department under the 
International Traffic in Arms Regulations (22 CFR 123.9).

[64 FR 20170, Apr. 26, 1999]



Sec. 560.206  Prohibited trade-related transactions with Iran; goods, technology, or services.

    (a) Except as otherwise authorized pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to May 7, 1995, no United States person, wherever located, 
may engage in any transaction or dealing in or related to:
    (1) Goods or services of Iranian origin or owned or controlled by 
the Government of Iran; or
    (2) Goods, technology, or services for exportation, reexportation, 
sale or supply, directly or indirectly, to Iran or the Government of 
Iran.
    (b) For purposes of paragraph (a) of this section, the term 
transaction or dealing includes but is not limited to purchasing, 
selling, transporting, swapping, brokering, approving, financing, 
facilitating, or guaranteeing.

[64 FR 20170, Apr. 26, 1999]



Sec. 560.207  Prohibited investment.

    Except as otherwise authorized pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to May 7, 1995, any new investment by a United States 
person in Iran or in property (including entities) owned or controlled 
by the Government of Iran is prohibited.

[64 FR 20170, Apr. 26, 1999]



Sec. 560.208  Prohibited facilitation by United States persons of transactions by foreign persons.

    Except as otherwise authorized pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to May 7, 1995, no United States person, wherever located, 
may approve, finance, facilitate, or guarantee any transaction by a 
foreign person where the transaction by that foreign person would be 
prohibited by this part if performed by a United States person or within 
the United States.

[64 FR 20171, Apr. 26, 1999]



Sec. 560.209  Prohibited transactions with respect to the development of Iranian petroleum resources.

    Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to March 16, 1995, 
the following are prohibited:
    (a) The entry into or performance by a United States person, or the 
approval by a United States person of the entry into or performance by 
an entity owned or controlled by a United States person, of:
    (1) A contract that includes overall supervision and management 
responsibility for the development of petroleum resources located in 
Iran, or
    (2) A guaranty of another person's performance under such contract; 
or
    (b) The entry into or performance by a United States person, or the 
approval by a United States person of the entry into or performance by 
an entity owned or controlled by a United States person, of
    (1) A contract for the financing of the development of petroleum 
resources located in Iran, or
    (2) A guaranty of another person's performance under such a 
contract.



Sec. 560.210  Exempt transactions.

    (a) Personal communications. The prohibitions of Secs. 560.204 and 
560.206 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 Secs. 560.204 and 
560.206 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

[[Page 745]]

country and the exportation to any country of information and 
informational materials as defined in Sec. 560.315, 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 exempt from regulation or 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. Transactions that are prohibited notwithstanding this section 
include, but are not limited to, payment of advances for information and 
informational materials not yet created and completed (with the 
exception of prepaid subscriptions for widely circulated magazines and 
other periodical publications), and provision of services to market, 
produce or co-produce, create or assist in the creation of information 
and informational materials.
    (3) This section does not exempt from regulation or authorize 
transactions incident to the exportation of software subject to the 
Export Administration Regulations (15 CFR parts 730-774).
    (4) This section does not exempt from regulation or authorize the 
exportation of goods (including software) or technology or the sale or 
leasing of telecommunications transmission facilities (such as satellite 
links or dedicated lines) where such exportation, sale or leasing is for 
use in the transmission of any data.
    (d) 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 nonscheduled air, sea, or land 
voyages. This exemption extends to transactions with Iranian carriers 
and those involving group tours and payments in Iran made for 
transactions directly incident to travel.
    (e) Letters of Credit. Letters of credit and other financing 
agreements with respect to trade contracts in force as of May 6, 1995, 
may be performed pursuant to their terms with respect to underlying 
trade transactions occurring prior to 12:01 a.m. EDT, June 6, 1995. See 
Sec. 560.413.

[60 FR 47063, Sept. 11, 1995, as amended at 64 FR 20171, Apr. 26, 1999; 
64 FR 58791, Nov. 1, 1999]



                     Subpart C--General Definitions



Sec. 560.301  Effective date.

    The effective date of the prohibitions and directives contained in 
subpart B of this part is 12:01 a.m., Eastern Daylight Time, August 20, 
1997. For the effective date of pre-existing regulations and directives, 
see the Executive orders in the Authority citation for this part and 
implementing regulations.

[64 FR 20171, Apr. 26, 1999]



Sec. 560.302  [Reserved]



Sec. 560.303  Iran; Iranian.

    The term Iran means the territory of Iran, and any other territory 
or marine area, including the exclusive economic zone and continental 
shelf, over which the Government of Iran claims sovereignty, sovereign 
rights or jurisdiction, provided that the Government of Iran 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 Iranian means pertaining to Iran as defined in this 
section.



Sec. 560.304  Government of Iran.

    The term Government of Iran includes:
    (a) The state and the Government of Iran, as well as any political 
subdivision, agency, or instrumentality thereof;
    (b) Any entity owned or controlled directly or indirectly 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 applicable effective

[[Page 746]]

date, acting or purporting to act directly or indirectly on behalf of 
any of the foregoing; and
    (d) Any person or entity designated by the Secretary of the Treasury 
as included within paragraphs (a) through (c) of this section.



Sec. 560.305  Person; entity.

    (a) The term person means an individual or entity.
    (b) The term entity means a partnership, association, trust, joint 
venture, corporation or other organization.



Sec. 560.306  Iranian-origin goods or services; goods or services owned or controlled by the Government of Iran.

    (a) The terms goods of Iranian origin and Iranian-origin goods 
include:
    (1) Goods grown, produced, manufactured, extracted, or processed in 
Iran; and
    (2) Goods which have entered into Iranian commerce.
    (b) The terms services of Iranian origin and Iranian-origin services 
include:
    (1) Services performed in Iran or by an entity organized under the 
laws of Iran, or a person residing in Iran; and
    (2) Services performed outside Iran by a citizen, national or 
permanent resident of Iran who is ordinarily resident in Iran, or by an 
entity organized under the laws of Iran.
    (c) The term goods or services owned or controlled by the Government 
of Iran includes:
    (1) Goods grown, produced, manufactured, extracted or processed by 
the Government of Iran or goods in its possession or control; and
    (2) Services performed by the Government of Iran.
    (d) The terms services of Iranian-origin, Iranian-origin services, 
and services owned or controlled by the Government of Iran do not 
include:
    (1) Diplomatic and consular services performed by or on behalf of 
the Government of Iran;
    (2) Diplomatic and consular services performed by or on behalf of 
the Government of the United States; or
    (3) Services performed outside Iran by an Iranian citizen or 
national who is resident in the United States or a third country, 
provided such services are not performed by or on behalf of the 
Government of Iran (other than diplomatic and consular services), an 
entity organized under the laws of Iran, or a person located in Iran.

[64 FR 20171, Apr. 26, 1999]



Sec. 560.307  United States.

    The term United States means the United States, including its 
territories and possessions.



Sec. 560.308  Importation of goods.

    With respect to goods (including software), the term importation 
means the bringing of any goods into the United States, except that in 
the case of goods transported by vessel, importation means the bringing 
of any goods into the United States with the intent to unlade them.

[64 FR 20171, Apr. 26, 1999]



Sec. 560.309  [Reserved]



Sec. 560.310  License.

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



Sec. 560.311  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.



Sec. 560.312  Specific license.

    The term specific license means any license or authorization not set 
forth in this part but issued pursuant to this part.



Sec. 560.313  Entity owned or controlled by the Government of Iran.

    The term entity owned or controlled by the Government of Iran 
includes any corporation, partnership, association, or other entity in 
which the Government of Iran owns a majority or controlling interest, 
and any entity which is otherwise controlled by that government.



Sec. 560.314  United States person.

    The term United States person means any United States citizen, 
permanent resident alien, entity organized under

[[Page 747]]

the laws of the United States (including foreign branches), or any 
person in the United States.



Sec. 560.315  Information and informational materials.

    (a) The term information and informational materials includes:
    (1) Publications, films, posters, phonograph records, photographs, 
microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and 
news wire feeds.
    (2) 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 and 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, 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.

[60 FR 47063, Sept. 11, 1995, as amended at 64 FR 20171, Apr. 26, 1999]



Sec. 560.316  New investment.

    The term new investment means a transaction after 12:01 EDT, May 7, 
1995, 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. 560.317.



Sec. 560.317  Credits or loans.

    The term credits or loans 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 Iran; 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. 560.318  [Reserved]



Sec. 560.319  United States depository institution.

    The term United States depository institution means any entity 
(including its foreign branches) organized under the laws 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).

[64 FR 20171, Apr. 26, 1999]



Sec. 560.320  Iranian accounts.

    The term Iranian accounts means accounts of persons located in Iran 
or of the Government of Iran maintained on the books of a United States 
depository institution.



                       Subpart D--Interpretations



Sec. 560.401  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 refers to the same as currently amended.



Sec. 560.402  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 does 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.

[[Page 748]]



Sec. 560.403  Transshipment through Iran.

    The prohibitions in Secs. 560.204, 560.206 and 560.208 apply to 
export, reexport or supply transactions which require a transshipment or 
transit of goods or technology through Iran to third countries.

[64 FR 20172, Apr. 26, 1999]



Sec. 560.404  [Reserved]



Sec. 560.405  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 Iranian governmental entity or 
involving a debit or credit to an Iranian account not explicitly 
authorized within the terms of the license;
    (b) Provision of any transportation services to or from Iran 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 Iran of any containers or similar 
goods owned or controlled by United States persons after the performance 
of transportation services to Iran;
    (d) Financing of licensed sales for exportation or reexportation of 
agricultural commodities or products, medicine or medical equipment to 
Iran or the Government of Iran (see Sec. 560.532); and
    (e) Letter of credit services relating to transactions authorized in 
Sec. 560.534. See Sec. 560.535(a).

[64 FR 41791, Aug. 2, 1999, as amended at 65 FR 25643, May 3, 2000; 66 
FR 36692, July 12, 2001]



Sec. 560.406  Transshipment or transit through United States prohibited.

    (a) The prohibitions in Sec. 560.201 apply to the importation into 
the United States, for transshipment or transit, of Iranian-origin goods 
or goods owned or controlled by the Government of Iran which are 
intended or destined for third countries.
    (b) The prohibitions in Sec. 560.204 apply to the transshipment or 
transit of foreign goods through the United States which are intended or 
destined for Iran or the Government of Iran, including entities owned or 
controlled by the Government of Iran.

[64 FR 20172, Apr. 26, 1999]



Sec. 560.407  Transactions related to Iranian-origin goods.

    (a) Importation into the United States from third countries of goods 
containing Iranian-origin raw materials or components is not prohibited 
if those raw materials or components 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 Iranian-origin goods that have not been 
incorporated into manufactured products or substantially transformed in 
a third country are prohibited.
    (c) Transactions relating to goods containing Iranian-origin raw 
materials or components are not prohibited if those raw materials or 
components have been incorporated into manufactured products or 
substantially transformed in a third country by a person other than a 
United States person.



Sec. 560.408  Importation into and release from a bonded warehouse or foreign trade zone.

    The prohibitions in Sec. 560.201 apply to importation into a bonded 
warehouse or a foreign trade zone of the United States. However, 
Sec. 560.201 does not prohibit the release from a bonded warehouse or a 
foreign trade zone of Iranian-origin goods imported into a bonded 
warehouse or a foreign trade zone prior to October 29, 1987.



Sec. 560.409  [Reserved]



Sec. 560.410  Exportation, reexportation, sale or supply of services.

    (a) The prohibition on the exportation, reexportation, sale or 
supply of services contained in Sec. 560.204 applies to services 
performed on behalf of a person in Iran or the Government of Iran or 
where the benefit of such services is otherwise received in Iran, if 
such services are performed:
    (1) In the United States, or
    (2) Outside the United States by a United States person, including 
by an

[[Page 749]]

overseas 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 Iran is presumed to be received in Iran.
    (c) Example. A United States person is engaged in a prohibited 
exportation of services to Iran when it extends credit to a third-
country firm specifically to enable that firm to manufacture goods for 
sale to Iran or for an entity of the Government of Iran. See also 
Sec. 560.416.

[64 FR 20172, Apr. 26, 1999]



Sec. 560.411  [Reserved]



Sec. 560.412  Extensions of credit or loans to Iran.

    (a) The prohibitions contained in Secs. 560.204 and 560.207 apply to 
but are not limited to the unauthorized renewal or rescheduling of 
credits or loans in existence as of May 6, 1995, such as the extension 
of a standby letter of credit.
    (b) The prohibitions contained in Sec. 560.209 apply, among other 
things, to the unauthorized renewal or rescheduling of credits or loans 
in existence as of March 15, 1995.
    (c) The prohibitions contained in Secs. 560.204, 560.207 and 560.209 
apply to, among other things, credits or loans in any currency.

[64 FR 20172, Apr. 26, 1999]



Sec. 560.413  Letter of credit payments by Iranian banks in the United States.

    (a) For purposes of the exemption in Sec. 560.210(e), payment of 
letters of credit and other financing agreements according to their 
terms includes, in the case of payments made by an Iranian bank's branch 
or agency located in the United States, payments that such branch or 
agency is:
    (1) Legally obligated to make pursuant to the terms of letters of 
credit and other financing agreements relating to pre-May 7, 1995 trade 
contracts; or
    (2) Licensed to make by the Office of Foreign Assets Control with 
respect to pre-May 7, 1995 trade contracts.
    (b) Payments that are not binding legal obligations of an Iranian 
bank's branch or agency pursuant to the terms of the letter of credit or 
other financing agreement are not covered by this exemption.



Sec. 560.414  Reexportation of certain U.S.-origin goods exported prior to May 7, 1995.

    The prohibitions on reexportation in Sec. 560.205 do not apply to 
United States-origin goods or technology that were exported from the 
United States prior to 12:01 a.m., Eastern Daylight Time, May 7, 1995, 
if:
    (a) Such goods or technology were not the property of a United 
States person as of 12:01 a.m. Eastern Daylight Time, May 7, 1995; and
    (b) The reexportation of the U.S.-origin goods or technology to Iran 
or the Government of Iran was not subject to reexport (as opposed to 
export) license application requirements under U.S. regulations in 
effect prior to May 6, 1995.

    Notes to Sec. 560.414. 1. The exclusion in this section applies, 
among other things, to goods that were as of May 6, 1995, classified 
under the U.S. Department of Commerce's Export Administration 
Regulations (15 CFR parts 730-774) as ECCNs 2A994; 3A993; 5A992; 5A995; 
6A990; 6A994; 7A994; 8A992; 8A994; 9A990; 9A992; and 9A994, that were 
exported from the United States prior to 12:01 a.m. Eastern Daylight 
Time, May 7, 1995, and were not the property of a United States person 
as of 12:01 a.m. Eastern Daylight Time, May 7, 1995. As of April 26, 
1999, items covered by this note are classified under ECCNs 2A994; 
3A992.a; 5A991.f; 5A992; 6A991; 6A998; 7A994; 8A992.d, .e, .f and .g; 
9A990.a and .b; and 9A991.d and .e.
    2. A reexportation of U.S.-origin goods or technology which meets 
the conditions of paragraph (a) of this section, or which is not within 
the scope of Sec. 560.205, nevertheless may require specific 
authorization by other agencies of the U.S. Government for reexportation 
to Iran or the Government of Iran. For example, items which meet the 
conditions of paragraph (a) may nevertheless require an export license 
under the Enhanced Proliferation Control Initiative provisions of the 
Export Administration Regulations (15 CFR part 744).

[64 FR 20172, Apr. 26, 1999]



Sec. 560.416  Brokering services.

    (a) For purposes of the prohibitions in Secs. 560.201, 560.204, 
560.205, 560.206 and 560.208, the term services includes performing a 
brokering function.
    (b) Examples. A person within the United States, or a United States 
person, wherever located, may not:

[[Page 750]]

    (1) Act as broker for the provision of goods, services or 
technology, from whatever source, to or from Iran or the Government of 
Iran;
    (2) Act as broker for the purchase or swap of crude oil of Iranian 
origin or owned or controlled by the Government of Iran;
    (3) Act as broker for the provision of financing, a financial 
guarantee or an extension of credit by any person to Iran or the 
Government of Iran;
    (4) Act as a broker for the provision of financing, a financial 
guarantee or an extension of credit to any person specifically to enable 
that person to construct or operate a facility in Iran or owned or 
controlled by the Government of Iran; or
    (5) Act as a broker for the provision of financing, a financial 
guarantee, or an extension of credit to any person specifically to 
enable that person to provide goods, services, or technology intended 
for Iran or the Government of Iran.

[64 FR 20172, Apr. 26, 1999]



Sec. 560.417  Facilitation; change of policies and procedures; referral of business opportunities offshore.

    With respect to Sec. 560.208, 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 Iran or the 
Government of Iran 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;
    (b) Refers to a foreign person purchase orders, requests for bids, 
or similar business opportunities involving Iran or the Government of 
Iran 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.

[64 FR 20172, Apr. 26, 1999]



Sec. 560.418  Release of technology or software in the United States or a third country.

    The release of technology or software in the United States, or by a 
United States person wherever located, to any person violates the 
prohibitions of this part if made with knowledge or reason to know the 
technology is intended for Iran or the Government of Iran, unless that 
technology or software meets the definition of information and 
informational materials in Sec. 560.315. See Sec. 560.511.

    Notes to Sec. 560.418. 1. The U.S. Department of Commerce's Bureau 
of Export Administration requires a license for the release in the 
United States (or in a third country) to a foreign national of 
technology if both of the following conditions are met:
    (a) That technology would require a license for exportation (or 
reexportation) to the home country of the foreign national; and
    (b) The foreign national is not a citizen or permanent resident of 
the United States (or of the third country) or is not a protected 
individual under the Immigration and Naturalization Act (8 U.S.C. 
Sec. 1324(b)(a)(3)). See 15 CFR 734.2(b)(2)(ii) and 734.2(b)(5).
    2. The transfer to a foreign national of technology subject to 
regulations administered by the U.S. Department of State or other 
agencies of the U.S. Government may require authorization by those 
agencies.

[64 FR 20173, Apr. 26, 1999]



Sec. 560.419  U.S. employment of persons normally located in Iran.

    The prohibitions in Sec. 560.201 make it unlawful to hire an Iranian 
national normally located in Iran to come to the United States solely or 
for the principal purpose of engaging in employment on behalf of an 
entity in Iran or as the employee of a U.S. person, unless that 
employment is authorized pursuant to a visa issued by the U.S. State 
Department or by Sec. 560.505. See also Sec. 560.418 with respect to the 
release of technology and software.

[64 FR 20173, Apr. 26, 1999]

[[Page 751]]



Sec. 560.420  Reexportation by non-U.S. persons of certain foreign-made products containing U.S.-origin goods or technology.

    For purposes of satisfying the de minimis content rule in 
Sec. 560.205(b)(2):
    (a) U.S.-origin goods (excluding software) falling within the 
definition in Sec. 560.205 must comprise less than 10 percent of the 
foreign-made good (excluding software);
    (b) U.S.-origin software falling within the definition in 
Sec. 560.205 must comprise less than 10 percent of the foreign-made 
software;
    (c) U.S.-origin technology falling within the definition in 
Sec. 560.205 must comprise less than 10 percent of the foreign-made 
technology; and,
    (d) In cases involving a complex product made of a combination of 
U.S.-origin goods (including software) and technology falling within the 
definition in Sec. 560.205, the aggregate value of all such U.S.-origin 
goods (including software) and such technology contained in the foreign-
made product must be less than 10 percent of the total value of the 
foreign-made product.

    Notes to Sec. 560.420. 1. Notwithstanding the exceptions contained 
in Sec. 560.205(b)(1) and (b)(2) and this section, a reexportation to 
Iran or the Government of Iran of U.S.-origin items falling within the 
definition in Sec. 560.205 is prohibited if those U.S.-origin goods 
(including software) or that technology have been substantially 
transformed or incorporated into a foreign-made end product which is 
destined to end uses or end users prohibited under regulations 
administered by other U.S. Government agencies. See, e.g., the Export 
Administration Regulations (31 CFR 736.2(b)(5), 744.2, 744.3, 744.4, 
744.7, and 744.10); International Traffic in Arms Regulations (22 CFR 
123.9).
    2. A reexportation not prohibited by Sec. 560.205 may nevertheless 
require authorization by the U.S. Department of Commerce, the U.S. 
Department of State or other agencies of the U.S. Government.
    3. The provisions of Sec. 560.205 and this section apply only to 
persons other than United States persons.

[64 FR 20173, Apr. 26, 1999]



 Subpart E--Licenses, Authorizations and Statements of Licensing Policy



Sec. 560.501  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, authorizes or validates any transaction 
effected prior to the issuance of the license, unless specifically 
provided in such license or other authorization.
    (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 Office of Foreign Assets 
Control and specifically refers to this part. No regulation, ruling, 
instruction, or license referring to this part authorizes any 
transactions 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.
    (d) Specific licenses issued prior to 12:01 a.m., Eastern Daylight 
Time, August 20, 1997, continue in effect in accordance with their terms 
except to the extent specifically revoked, amended, or modified by the 
Office of Foreign Assets Control.
    (e) 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

[[Page 752]]

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 the Office of Foreign Assets Control, 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. 560.701(d).

[60 FR 47063, Sept. 11, 1995, as amended at 64 FR 20173, Apr. 26, 1999]



Sec. 560.502  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 is binding upon all 
persons receiving actual or constructive notice of such exclusion or 
restriction.



Secs. 560.503-560.504  [Reserved]



Sec. 560.505  Importation of certain Iranian-origin services authorized; activities related to certain visa categories authorized.

    (a) The importation of Iranian-origin services into the United 
States or other dealing in such services is authorized where such 
services are performed in the United States by an Iranian citizen or 
national for the purpose of, or which directly relate to, participating 
in a public conference, performance, exhibition or similar event, and 
such services are consistent with that purpose.
    (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 Iran or a business entity or other organization in Iran.

[64 FR 20173, Apr. 26, 1999, as amended at 64 FR 58791, Nov. 1, 1999]



Sec. 560.506  Importation and exportation of certain gifts authorized.

    The importation into the United States of Iranian-origin goods from 
Iran or a third country, and the exportation from the United States to 
Iran of goods, are 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 List, Export Administration 
Regulations (15 CFR part 774).

[64 FR 20174, Apr. 26, 1999]



Sec. 560.507  Accompanied baggage authorized.

    (a) Persons entering the United States directly or indirectly from 
Iran are authorized to import into the United States Iranian-origin 
accompanied baggage normally incident to travel.
    (b) Persons leaving the United States for Iran are authorized to 
export from the United States accompanied baggage normally incident to 
travel.
    (c) This authorization applies to accompanied baggage that includes 
only articles that are necessary for personal use incident to travel, 
not intended for

[[Page 753]]

any other person or for sale, and are not otherwise prohibited from 
importation or exportation under applicable United States laws.



Sec. 560.508  Telecommunications and mail transactions authorized.

    All transactions of common carriers incident to the receipt or 
transmission of telecommunications and mail between the United States 
and Iran are authorized. For purposes of this section, the term mail 
includes parcels only to the extent the parcels contain goods exempted 
from the prohibitions contained in this part or otherwise eligible for 
importation from or exportation to Iran under a general or specific 
license.



Sec. 560.509  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 Iran are authorized:
    (1) The filing and prosecution of any application to obtain a 
patent, trademark, copyright or other form of intellectual property 
protection, including importation of or dealing in Iranian-origin 
services, payment for such services, and payment to persons in Iran 
directly connected to such 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) Nothing in this section affects obligations under any other 
provision of law.

[60 FR 47063, Sept. 11, 1995, as amended at 64 FR 20174, Apr. 26, 1999]



Sec. 560.510  Transactions related to the resolution of disputes between the United States or United States nationals and the Government of Iran.

    (a) Except as otherwise authorized, specific licenses may be issued 
on a case-by-case basis to authorize transactions in connection with 
awards, decisions or orders of the Iran-United States Claims Tribunal in 
The Hague, the International Court of Justice, or other international 
tribunals (collectively, ``tribunals''); agreements settling claims 
brought before tribunals; and awards, orders, or decisions of an 
administrative, judicial or arbitral proceeding in the United States or 
abroad, where the proceeding involves the enforcement of awards, 
decisions or orders of tribunals, or is contemplated under an 
international agreement, or involves claims arising before 12:01 a.m. 
EDT, May 7, 1995, that resolve disputes between the Government of Iran 
and the United States or United States nationals, including the 
following transactions:
    (1) Importation into the United States of, or any transaction 
related to, goods and services of Iranian origin or owned or controlled 
by the Government of Iran;
    (2) Exportation or reexportation to Iran or the Government of Iran 
of any goods, technology, or services, except to the extent that such 
exportation or reexportation is also subject to export licensing 
application requirements of another agency of the United States 
Government and the granting of such a license by that agency would be 
prohibited by law;
    (3) Financial transactions related to the resolution of disputes at 
tribunals, including transactions related to the funding of proceedings 
or of accounts related to proceedings or to a tribunal; participation, 
representation, or testimony before a tribunal; and the payment of 
awards of a tribunal; and
    (4) Other transactions otherwise prohibited by this part which are 
necessary to permit implementation of the foregoing awards, decisions, 
orders, or agreements.
    (b) Specific licenses may be issued on a case-by-case basis to 
authorize payment of costs related to the storage or maintenance of 
goods in which the

[[Page 754]]

Government of Iran has title, and to authorize the transfer of title to 
such goods, provided that such goods are in the United States and that 
such goods are the subject of a proceeding pending before a tribunal.
    (c)(1) All transactions are authorized with respect to the 
importation of Iranian-origin goods and services necessary to the 
initiation and conduct of legal proceedings, in the United States or 
abroad, including administrative, judicial and arbitral proceedings and 
proceedings before tribunals.
    (2) Specific licenses may be issued on a case-by-case basis to 
authorize the exportation to Iran or the Government of Iran of goods, 
and of services not otherwise authorized by Sec. 560.525, necessary to 
the initiation and conduct of legal proceedings, in the United States or 
abroad, including administrative, judicial and arbitral proceedings and 
proceedings before tribunals, except to the extent that the exportation 
is also subject to export licensing application requirements of another 
agency of the United States Government and the granting of such a 
license by that agency would be prohibited by law.
    (3) Representation of United States persons or of third country 
persons in legal proceedings, in the United States or abroad, including 
administrative, judicial and arbitral proceedings and proceedings before 
tribunals, against Iran or the Government of Iran is not prohibited by 
this part. The exportation of certain legal services to a person in Iran 
or the Government of Iran is authorized in Sec. 560.525.
    (d) The following are authorized:
    (1) All transactions related to payment of awards of the Iran-United 
States Claims Tribunal in The Hague against Iran.
    (2) All transactions necessary to the payment and implementation of 
awards (other than exports or reexports subject to export license 
application requirements of other agencies of the United States 
Government) in a legal proceeding to which the United States Government 
is a party, or to payments pursuant to settlement agreements entered 
into by the United States Government in such a legal proceeding.

[60 FR 47063, Sept. 11, 1995, as amended at 62 FR 41852, Aug. 4, 1997]



Sec. 560.511  Exportation or supply of insubstantial United States content for use in foreign-made products or technology.

    (a) Except as provided in paragraph (b) of this section and 
notwithstanding the prohibitions in Sec. 560.204, the exportation or 
supply of goods or technology from the United States, or by a United 
States person wherever located, for substantial transformation or 
incorporation into a foreign-made end product in a country other than 
the United States or Iran, intended specifically or predominantly for 
Iran or the Government of Iran, is permitted under this part where the 
exporter has ascertained that all of the following are the case:
    (1) The U.S.-origin goods or technology being exported for 
substantial transformation or incorporation abroad were not subject to 
export license application requirements under any United States 
regulations in effect on May 6, 1995, or were not thereafter made 
subject to such regulations imposed independently of this part;
    (2) With respect to the foreign-made end product:
    (i) U.S.-origin goods (excluding software) comprise less than 10 
percent of the foreign-made good (excluding software);
    (ii) U.S.-origin software comprises less than 10 percent of the 
foreign-made software;
    (iii) U.S.-origin technology comprises less than 10 percent of the 
foreign-made technology; and
    (iv) In cases involving a complex product made of a combination of 
goods (including software) and technology, the aggregate value of all 
U.S.-origin goods (including software) and technology contained in the 
foreign-made end product is less than 10 percent of the total value of 
the foreign-made product;
    (3) The foreign-made end product is not destined to end uses or end 
users

[[Page 755]]

prohibited under regulations administered by other U.S. Government 
agencies. See, e.g., the Export Administration Regulations (31 CFR 
736.2(b)(5), 744.2, 744.3, 744.4, 744.7, and 744.10); International 
Traffic in Arms Regulations (22 CFR 123.9);
    (4) The foreign-made end product is not intended for use in the 
Iranian petroleum or petrochemical industry. For this purpose, products 
intended for use in the Iranian petroleum or petrochemical industry 
include not only products uniquely suited for use in those industries, 
such as oilfield services equipment, but also goods and technology for 
use in products, such as computers, office equipment, construction 
equipment, or building materials, which are suitable for use in other 
industries but which are intended specifically for use in the petroleum 
or petrochemical industries.
    (b) The authorization contained in this section is not available if 
the foreign-made end product is of a type which other U.S. Government 
agencies make ineligible for de minimis U.S.-origin content. See, e.g., 
the Export Administration Regulations (15 CFR 734.4(a) and (b)); 
International Traffic in Arms Regulations (22 CFR 123.9).

    Note to Sec. 560.511. An exportation authorized by this section may 
nevertheless require authorization by the U.S. Department of Commerce, 
the U.S. Department of State or other agencies of the U.S. Government.

[64 FR 20174, Apr. 26, 1999]



Sec. 560.512  Iranian Government missions in the United States.

    (a) All transactions ordinarily incident to the importation of goods 
or services into the United States by, the exportation of goods or 
services from the United States by, or the provision of goods or 
services in the United States to, the missions of the Government of Iran 
to international organizations in the United States, and Iranians 
admitted to the United States under section 101(a)(15)(G) of the 
Immigration and Nationality Act (``INA''), 8 U.S.C. 1101(a)(15)(G), are 
authorized, provided that:
    (1) The goods or services are for the conduct of the official 
business of the mission, or for personal use of personnel admitted to 
the United States under INA section 101(a)(15)(G), and are not for 
resale; and
    (2) The transaction is not otherwise prohibited by law.
    (b) All transactions ordinarily incident to the importation of goods 
or services into the United States by, the exportation of goods or 
services from the United States by, or the provision of goods or 
services in the United States to, the Iranian Interests Section of the 
Embassy of Pakistan (or any successor protecting power) in the United 
States, are authorized, provided that:
    (1) The goods or services are for the conduct of the official 
business of the Iranian Interests Section, and are not for resale; and
    (2) The transaction is not otherwise prohibited by law.
    (c) All transactions ordinarily incident to the provision of goods 
or services in the United States to the employees of Iranian missions to 
international organizations in the United States, and to employees of 
the Iranian Interests Section of the Embassy of Pakistan (or any 
successor protecting power) in the United States, are authorized, 
provided that the transaction is not otherwise prohibited by law.



Sec. 560.513  Importation of Iranian-origin oil.

    (a) Specific licenses will be issued on a case-by-case basis to 
permit the importation of Iranian-origin oil in connection with the 
resolution or settlement of cases before the Iran-United States Claims 
Tribunal in The Hague, established pursuant to 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 of January 
19, 1981, or where the proceeds are otherwise to be deposited in the 
Tribunal's Security Account.
    (b) License applications submitted pursuant to this section must 
contain the importer's certification that the oil is of Iranian origin 
with all relevant supporting documentation, including specification of 
the production site at which the oil was extracted, and that the sale or 
transfer of the oil is by or

[[Page 756]]

for the account of the Government of Iran. Licenses will not be issued 
for importations of Iranian-origin oil which is not sold or transferred 
by or for the account of the Government of Iran. In cases where the oil 
is being imported either in whole or in part in resolution or settlement 
of a case pending before the Tribunal, applicants are required to 
identify the case and submit a copy of the settlement agreement and the 
Award on Agreed Terms issued by the Tribunal. In cases where any 
proceeds are generated for the account of the Government of Iran from 
the importation of Iranian-origin oil, the importer must demonstrate 
that irrevocable arrangements are in place that will ensure that the 
proceeds will be deposited in the Tribunal's Security Account.



Sec. 560.514  [Reserved]



Sec. 560.515  30-day delayed effective date for pre-May 7, 1995 trade contracts involving Iran.

    (a) All transactions necessary to complete performance of a trade 
contract entered into prior to May 7, 1995, and involving Iran (a pre-
existing trade contract), including the exportation of goods, services 
(including financial services), or technology from the United States 
that was authorized pursuant to Federal regulations in force immediately 
prior to May 6, 1995, or performance under a pre-existing trade contract 
for transactions in Iranian-origin or Government of Iran-owned or 
controlled goods or services that do not involve importation into the 
United States, are authorized without specific licensing by the Office 
of Foreign Assets Control if the conditions in paragraph (a)(1) or 
(a)(2) of this section are met:
    (1) If the pre-existing trade contract is for an exportation of 
goods or technology from the United States that was authorized pursuant 
to Federal regulations in force immediately prior to May 6, 1995, the 
goods or technology must be exported from the United States prior to 
12:01 a.m. Eastern Daylight Time, June 6, 1995, and all other activity 
by U.S. persons that is necessary and incidental to the performance of 
the pre-existing trade contract (other than payment under a financing 
contract) must be completed prior to 12:01 a.m. Eastern Daylight Time, 
August 6, 1995; or
    (2) All obligations under a pre-existing trade contract (other than 
payment under a financing contract) must be fully completed prior to 
12:01 a.m. Eastern Daylight Time, June 6, 1995, if the pre-existing 
trade contract is for one of the following:
    (i) The exportation of services from the United States benefitting a 
person in Iran or the Government of Iran;
    (ii) The reexportation of goods or technology to Iran, the 
Government of Iran, or an entity owned or controlled by the Government 
of Iran that was authorized pursuant to Federal regulations in force 
immediately prior to May 6, 1995; or
    (iii) Transactions relating to goods or services of Iranian origin 
or owned or controlled by the Government of Iran other than transactions 
relating to importation into the United States of such goods or 
services.
    (b) In order to complete performance of a pre-existing trade 
contract, the arrangement or renegotiation of contracts for transactions 
necessary and incidental to performance of the pre-existing trade 
contract is authorized. Such incidental transactions may include, for 
example, financing, shipping and insurance arrangements. Amendments to a 
pre-existing trade contract for the purpose of accelerating a 
previously-specified delivery schedule under a contract for a fixed 
quantity or value of goods, technology or services, or curtailing or 
canceling required performance, are authorized without specific 
licensing. Any other alteration of the trade contract must be 
specifically licensed by the Office of Foreign Assets Control.
    (c) The existence of a contract will be determined with reference to 
the principles contained in Article 2 of the Uniform Commercial Code.

[60 FR 47063, Sept. 11, 1995, as amended at 64 FR 20174, Apr. 26, 1999]



Sec. 560.516  Payment and United States dollar clearing transactions involving Iran.

    (a) United States depository institutions are authorized to process 
transfers of funds to or from Iran, or for the direct or indirect 
benefit of persons in

[[Page 757]]

Iran or the Government of Iran, if the transfer is covered in full by 
any of the following conditions and does not involve debiting or 
crediting an Iranian account:
    (1) The transfer is by order of a foreign bank which is not an 
Iranian entity from its own 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 of a domestic bank) for a second foreign bank which is not an 
Iranian entity. For purposes of this section ``foreign bank'' includes a 
foreign subsidiary, but not a foreign branch of a domestic bank;
    (2) The transfer arises from an underlying transaction that has been 
authorized by a specific or general license issued pursuant to this 
part;
    (3) The transfer arises from an underlying transaction that is not 
prohibited by this part, such as a non-commercial remittance to or from 
Iran (e.g., a family remittance not related to a family-owned 
enterprise); a U.S.-related commercial transfer not prohibited by this 
part (see, e.g., Sec. 560.515(b)); or a third-country transaction not 
prohibited by this part; or
    (4) The transfer arises from an underlying transaction that is 
exempted from regulation pursuant to Sec. 203(b) of the International 
Emergency Economic Powers Act (50 U.S.C. 1702(b)), such as an 
exportation to Iran or importation from Iran of information and 
informational materials, a travel-related remittance, or payment for the 
shipment of a donation of articles to relieve human suffering.
    (b) Before a United States depository 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 depository 
institution must determine that the underlying transaction is not 
prohibited by this part.
    (c) Pursuant to the prohibitions contained in Sec. 560.208, a United 
States depository institution may not make transfers to or for the 
benefit of a foreign-organized entity owned or controlled by it if the 
underlying transaction would be prohibited if engaged in directly by the 
U.S. depository institution.
    (d) This section does not authorize transactions with respect to 
property blocked pursuant to part 535.

[60 FR 47063, Sept. 11, 1995, as amended at 64 FR 20174, Apr. 26, 1999]



Sec. 560.517  Exportation of services: Iranian accounts at United States depository institutions.

    (a) United States depository institutions are prohibited from 
performing services with respect to Iranian accounts, as defined in 
Sec. 560.320, at the instruction of the Government of Iran or persons 
located in Iran, except that United States depository institutions are 
authorized to provide and be compensated for services and incidental 
transactions with respect to:
    (1) The maintenance of Iranian accounts, including the payment of 
interest and the debiting of service charges;
    (2) The processing of transfers arising from underlying transactions 
that are exempted from regulation pursuant to section 203(b) of the 
International Emergency Economic Powers Act, 50 U.S.C. 1702(b), such as 
an exportation of information or informational materials to Iran, a 
travel-related remittance, or payment for the shipment of a donation of 
articles to relieve human suffering; and
    (3) At the request of the account party, the closing of Iranian 
accounts and the lump sum transfer only to the account party of all 
remaining funds and other assets in the account.
    (b) Specific licenses may be issued with respect to the operation of 
Iranian accounts that constitute accounts of:
    (1) Foreign government missions and their personnel in Iran; or
    (2) Missions of the Government of Iran in the United States.



Sec. 560.518  Transactions in Iranian-origin and Iranian Government property.

    (a) Except for transactions involving the Government of Iran, all 
domestic transactions with respect to Iranian-origin goods located in 
the United States are authorized, provided that this paragraph (a) does 
not affect the status of property blocked pursuant to

[[Page 758]]

part 535 or detained or seized, or subject to detention or seizure, 
pursuant to this part.
    (b) All transactions necessary and incidental to a United States 
person's sale or other disposition of goods or services of Iranian 
origin or owned or controlled by the Government of Iran that are located 
or to be performed outside the United States and were acquired by that 
United States person in transactions not prohibited by part 535 or this 
part are authorized, provided:
    (1) The sale or other disposition does not result in the importation 
of such goods or services into the United States, and
    (2) The sale or other disposition is completed no later than 12:01 
a.m. EDT, August 6, 1995.
    (c) Except as provided in paragraphs (a) and (b) of this section, 
United States persons may not deal in goods or services of Iranian 
origin or owned or controlled by the Government of Iran, except that the 
following transactions are authorized:
    (1) Transactions by a United States person with third-country 
nationals incidental to the storage and maintenance in third countries 
of Iranian-origin goods owned prior to May 7, 1995, by that United 
States person or acquired thereafter by that United States person 
consistent with the provisions of this part;
    (2) Exportation of Iranian-origin household and personal effects 
from the United States incident to the relocation of United States 
persons outside the United States; and
    (3) Purchase for personal use or consumption in Iran of Iranian-
origin goods or services.
    (d) In addition to transactions authorized by paragraph (c)(1) of 
this section, a United States person is authorized after 12:01 a.m. EDT, 
May 7, 1995, to use or dispose of Iranian-origin household and personal 
effects that are located outside the United States and that have been 
acquired by the United States person in transactions not prohibited by 
part 535 or this part.



Sec. 560.519  Policy governing news organization offices.

    (a) Specific licenses may be issued on a case-by-case basis 
authorizing transactions necessary for the establishment and operation 
of news bureaus in Iran by United States organizations whose primary 
purpose is the gathering and dissemination of news to the general 
public.
    (b) Transactions that may be authorized include but are not limited 
to those incident to the following:
    (1) Leasing office space and securing related goods and services;
    (2) Hiring support staff;
    (3) Purchasing Iranian-origin goods for use in the operation of the 
office; and
    (4) Paying fees related to the operation of the office in Iran.
    (c) Specific licenses may be issued on a case-by-case basis 
authorizing transactions necessary for the establishment and operation 
of news bureaus in the United States by Iranian organizations whose 
primary purpose is the gathering and dissemination of news to the 
general public.
    (d) The number assigned to such specific licenses should be 
referenced in all import and export documents and in all funds transfers 
and other banking transactions through banking institutions organized or 
located in the United States in connection with the licensed 
transactions to avoid disruption of the trade and financial 
transactions.



Sec. 560.520   Exportation of agricultural commodities on contracts entered into prior to May 7, 1995.

    (a) All transactions by United States persons in connection with the 
exportation from the United States to Iran of any agricultural commodity 
under an export sales contract are authorized, provided:
    (1) Such contract was entered into prior to 12:01 a.m. EDT, May 7, 
1995; and
    (2) The terms of such contract require delivery of the commodity 
prior to February 2, 1996.
    (b) The performance of letters of credit and other financing 
agreements with respect to exports authorized by this section is 
authorized pursuant to their terms.
    (c) For purposes of this section, the term agricultural commodity 
means feed

[[Page 759]]

grains, rice, wheat, cotton, peanuts, tobacco, dairy products, and 
oilseeds (including vegetable oil).
    (d) Specific licenses may be granted on a case-by-case basis for 
transactions by United States persons in connection with the exportation 
of other agricultural articles from the United States to Iran that do 
not fall within the definition of ``agricultural commodity'' contained 
in paragraph (c) of this section, provided such exportation is pursuant 
to an export sales contract and the conditions contained in paragraphs 
(a)(1) and (a)(2) of this section are met.



Sec. 560.521  Diplomatic pouches.

    All transactions in connection with the importation into the United 
States from Iran, or the exportation from the United States to Iran, of 
diplomatic pouches and their contents are authorized.



Sec. 560.522  Allowable payments for overflights of Iranian airspace.

    Payments to Iran of charges for services rendered by the Government 
of Iran in connection with the overflight of Iran or emergency landing 
in Iran of aircraft owned by a United States person or registered in the 
United States are authorized.



Sec. 560.523  Exportation of equipment and services relating to information and informational materials.

    Specific licenses may be issued on a case-by-case basis for the 
exportation of equipment and services necessary for the establishment of 
news wire feeds or other transmissions of information and informational 
materials.

[64 FR 20175, Apr. 26, 1999]



Sec. 560.524  Household goods and personal effects.

    (a) The exportation from the United States to Iran of household and 
personal effects, including baggage and articles for family use, of 
persons departing the United States to relocate in Iran 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. See also, Sec. 560.518(c)(2).
    (b) The importation of Iranian-origin household and personal 
effects, including baggage and articles for family use, of persons 
arriving in the United 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. For purposes of this 
paragraph, household and personal effects include all articles meeting 
the criteria stated in this paragraph regardless of the time elapsed 
since the importer's arrival in the United States from Iran.

[60 FR 47063, Sept. 11, 1995, as amended at 65 FR 25643, May 3, 2000]



Sec. 560.525  Exportation of certain legal services.

    (a) The provision of the following legal services to the Government 
of Iran or to a person in Iran, and receipt of payment of professional 
fees and reimbursement of incurred expenses, are authorized:
    (1) Provision of legal advice and counselling on the requirements of 
and compliance with the laws of any jurisdiction within the United 
States, provided that such advice and counselling is not provided to 
facilitate transactions that would violate any of the prohibitions 
contained in this part;
    (2) Representation when a person in Iran or the Government of Iran 
has been named as a defendant in or otherwise made a party to domestic 
United States legal, arbitration, or administrative proceedings;
    (3) Initiation and conduct of domestic United States legal, 
arbitration, or administrative proceedings on behalf of the Government 
of Iran or a person in Iran;
    (4) Representation before any federal or state agency with respect 
to the imposition, administration, or enforcement of United States 
sanctions against Iran;
    (5) Initiation and conduct of legal proceedings, in the United 
States or

[[Page 760]]

abroad, including administrative, judicial and arbitral proceedings and 
proceedings before international tribunals (including the Iran-United 
States Claims Tribunal in The Hague and the International Court of 
Justice):
    (i) To resolve disputes between the Government of Iran or an Iranian 
national and the United States or a United States national;
    (ii) Where the proceeding is contemplated under an international 
agreement; or
    (iii) Where the proceeding involves the enforcement of awards, 
decisions, or orders resulting from legal proceedings within the scope 
of paragraph (a)(5)(i) or (a)(5)(ii) of this section, provided that any 
transaction, unrelated to the provision of legal services or the payment 
therefor, that is necessary or related to the execution of an award, 
decision or order resulting from such legal proceeding, or otherwise 
necessary for the conduct of such proceeding, and which would otherwise 
be prohibited by this part requires a specific license in accordance 
with Secs. 560.510 and 560.801;
    (6) Provision of legal advice and counselling in connection with 
settlement or other resolution of matters described in paragraph (a)(5) 
of this section; and
    (7) Provision of legal services in any other context in which 
prevailing United States law requires access to legal counsel at public 
expense.
    (b) The provision of any other legal services to a person in Iran or 
the Government of Iran, not otherwise authorized in or exempted by this 
part, requires the issuance of a specific license.

[60 FR 47063, Sept. 11, 1995, as amended at 62 FR 41852, Aug. 4, 1997]



Sec. 560.526  Commodities trading and related transactions.

    (a) Trading in Iranian-origin commodities. With respect to 
Sec. 560.206, specific licenses may be issued on a case-by-case basis to 
authorize certain commodities trading by a United States person in 
Iranian-origin goods, or transactions incidental to such trading, where:
    (1) No party to the transaction with the United States person is a 
person in Iran or the Government of Iran, and
    (2) It was impossible for the United States person to determine at 
the time of entry into the transaction, given all circumstances of the 
transaction, that the goods would be of Iranian origin or would be owned 
or controlled by the Government of Iran.
    (b) Trading in commodities destined for Iran or the Government of 
Iran. With respect to Sec. 560.204, specific licenses may be issued on a 
case-by-case basis to authorize certain trading by United States persons 
in commodities of U.S. or third-country origin destined for Iran or the 
Government of Iran, or transactions incidental to such trading, where:
    (1) It was impossible for the United States person to determine at 
the time of entry into the transaction, given all circumstances of the 
transaction, that the goods would be for delivery to Iran or to the 
Government of Iran;
    (2) The United States person did not contract with a person in Iran 
or the Government of Iran; and
    (3) The United States person did not initiate the nomination of the 
commodity's destination as Iran or the Government of Iran.



Sec. 560.527  Rescheduling existing loans.

    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 Iran or the Government of Iran.



Sec. 560.528  Aircraft 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.



Sec. 560.529  Bunkering and emergency repairs.

    Goods or services provided in the United States to a non-Iranian 
carrier

[[Page 761]]

transporting passengers or goods to or from Iran are permissible if they 
are:
    (a) Bunkers or bunkering services;
    (b) Supplied or performed in the course of emergency repairs; or
    (c) Supplied or performed under circumstances which could not be 
anticipated prior to the carrier's departure for the United States.

[64 FR 20175, Apr. 26, 1999]



Sec. 560.530  Commercial sales, exportation, and reexportation of agricultural commodities, medicine, and medical devices.

    (a) One-year license requirement. The exportation or reexportation 
of agricultural commodities (including bulk agricultural commodities 
listed in appendix B to this part 560), medicine, or medical devices to 
the Government of Iran, any entity in Iran, individuals in Iran, or 
persons in third countries purchasing specifically for resale to any of 
the foregoing, shall only be made pursuant to a one-year license issued 
by the United States Department of the Treasury, 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 license will be granted for the 
exportation or reexportation of agricultural commodities, medicine, or 
medical equipment to any entity or individual in Iran promoting 
international terrorism. Executory contracts entered into pursuant to 
paragraph (b)(2) of this section prior to the issuance of the one-year 
license described in this paragraph shall be deemed to have been signed 
on the date of issuance of that one-year 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 
license).
    (b) General license for arrangement of exportation and reexportation 
of covered products. (1) The making of shipping arrangements, cargo 
inspections, obtaining of insurance, and arrangement of financing 
(consistent with Sec. 560.532) for the exportation or reexportation of 
agricultural commodities, medicine, and medical devices to the 
Government of Iran, entities in Iran, individuals in Iran, or persons in 
third countries purchasing specifically for resale to any of the 
foregoing, is authorized.
    (2) If desired, 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 agricultural commodities, medicine, and 
medical devices to the Government of Iran, entities in Iran, individuals 
in Iran, or persons in third countries purchasing specifically for 
resale to any of the foregoing, is authorized, provided that performance 
of an executory contract is expressly made contingent upon the prior 
issuance of the one-year license described in paragraph (a) of this 
section.
    (c) Instructions for obtaining one-year licenses. In order to obtain 
the one-year license described in paragraph (a), 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, email 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 
Iran, the exporter must identify the agent's principals at the wholesale 
level for whom the purchase 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

[[Page 762]]

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 Export Administration (``BXA''), 
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 BXA's 
website, www.bxa.doc.gov/Regulations/Trade Sanctions ReformExport 
EnhancementAct.html. Medical supplies that are specifically listed on 
BXA's website do not require an Official Commodity Classification of EAR 
99 from BXA. BXA will also provide a list on its website of medicines 
that are ineligible for a one-year license under these procedures. If an 
exporter is uncertain whether the medicine to be exported is eligible, 
they should seek an Official Commodity Classification of EAR 99 from BXA 
and submit a copy to OFAC. See, 15 CFR 745.3 for instructions for 
obtaining Official Commodity Classification of EAR 99 from BXA.
    (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) This section does not apply to any transaction or dealing 
involving property blocked pursuant to this chapter or any other 
activity prohibited by this chapter not otherwise authorized in 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 section, 
agricultural commodities are:
    (i) Products 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
    (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 Iran 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 section, 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

[[Page 763]]

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 section, 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) Transition period. (1) Specific licenses issued prior to July 
26, 2001 authorizing the performance of executory contracts for the sale 
of agricultural commodities, medicine, or medical equipment shall remain 
in effect until the expiration date specified in the license or July 26, 
2002, whichever comes first. However, after July 26, 2001, new contracts 
for the exportation of agricultural commodities, medicine, or medical 
devices may be entered into only pursuant to the terms of, and as 
authorized by, this new part.
    (2) Specific licenses issued prior to July 26, 2001 authorizing the 
sale and exportation or reexportation of bulk agricultural commodities 
listed in Appendix A to 31 CFR parts 538 and 550 and Appendix B to 31 
CFR part 560 shall remain in effect solely to permit completion of 
performance of contracts already entered into prior to July 26, 2001 
pursuant to the license. As of July 26, 2001, new contracts for the 
exportation of bulk agricultural commodities may be entered into only 
pursuant to the terms of, and as authorized by, this part.

[66 FR 36692, July 12, 2001]



Sec. 560.531  [Reserved]



Sec. 560.532  Payment for and financing of exports and reexports of commercial commodities, medicine, and medical devices.

    (a) General license for payment terms. The following payment terms 
for sales of agricultural commodities and products, medicine, and 
medical equipment pursuant to Secs. 560.530 and 560.531 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 Iran 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 Secs. 560.530 and 560.531. See 
Sec. 501.801(b) of this chapter for specific licensing procedures.
    (c) No debits or credits to Iranian accounts on the books of U.S. 
depository institutions. Nothing in this section authorizes payment 
terms or trade financing involving a debit or credit to an account of a 
person located in Iran or of the Government of Iran maintained on the 
books of a U.S. depository institution.
    (d) Transfers through the U.S. financial system. Any payment 
relating to a transaction authorized in or pursuant to Sec. 560.530 or 
Sec. 560.533 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 rejection of the transfer. See 
Sec. 560.516(b).
    (e) Notwithstanding any other provision of this part, no commercial 
exportation to Iran may be made with United States Government 
assistance, including United States foreign assistance, United States 
export assistance, and any United States credit or guarantees absent a 
Presidential waiver.

[64 FR 41793, Aug. 2, 1999, as amended at 64 FR 58791, Nov. 1, 1999; 66 
FR 36693, July 12, 2001]



Sec. 560.533  Brokering 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 sale and exportation or reexportation by United 
States persons of agricultural commodities, medicine, and

[[Page 764]]

medical devices, provided that the sale and exportation or reexportation 
is authorized by a one-year license issued pursuant to Sec. 560.530.
    (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-Iranian persons for the 
sale and exportation or reexportation of bulk agricultural commodities 
to the Government of Iran, entities in Iran or individuals in Iran. 
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 B to this part 560;
    (2) Are to purchasers permitted pursuant to Sec. 560.530;

    Note to Sec. 560.533 (b)(2): Requests for specific licenses to 
provide brokerage services under this paragraph must include all of the 
information described in Sec. 560.530(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 EAR99 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 Export Administration. 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 debits or credits to Iranian accounts on the books of U.S. 
depository institutions. Payment for any brokerage fee earned pursuant 
to this section may not involve a debit or credit to an account of a 
person located in Iran or of the Government of Iran maintained on the 
books of a U.S. depository institution.
    (d) Recordkeeping and reporting requirements. Attention is drawn to 
the recordkeeping, retention, and reporting requirements of 
Secs. 501.601 and 501.602.

[64 FR 41793, Aug. 2, 1999, as amended at 64 FR 58791, Nov. 1, 1999; 66 
FR 36693, July 12, 2001]



Sec. 560.534  Importation into the United States of, and dealings in, certain foodstuffs and carpets authorized.

    (a) The importation into the United States, from Iran or a third 
country, of the following goods of Iranian-origin is authorized:
    (1) Foodstuffs intended for human consumption that are classified 
under chapters 2-23 of the Harmonized Tariff Schedule of the United 
States;
    (2) Carpets and other textile floor coverings and carpets used as 
wall hangings that are classified under chapter 57 or heading 
9706.00.0060 of the Harmonized Tariff Schedule of the United States.
    (b) United States persons, wherever located, are authorized to 
engage in transactions or dealings in or related to the categories of 
Iranian-origin goods described in paragraph (a) of this section, 
provided that the transaction or dealing does not involve or relate to 
goods, technology, or services for exportation, reexportation, sale, or 
supply, directly or indirectly, to Iran or the Government of Iran, other 
than services described in Sec. 560.405 (``Transactions incidental to a 
licensed transaction authorized'').
    (c) This section does not affect any open enforcement action 
initiated by the U.S. Government prior to April 28, 2000, or any 
seizure, forfeiture, penalty, or liquidated damages case that is 
considered closed in accordance with Customs or other agency 
regulations. This section also does not authorize the importation into 
the United States of goods that are under seizure or detention by U.S. 
Customs officials pursuant to Customs laws or other applicable 
provisions of law, until any applicable penalties, charges, duties, or 
other conditions are satisfied. This section does not authorize 
importation into the United States of goods for which forfeiture 
proceedings have commenced or of goods that have been forfeited to the 
U.S. Government, other than through Customs disposition by selling at 
auction.

[[Page 765]]

    (d) Iranian accounts. Nothing in this section authorizes a debit or 
credit to an account of a person located in Iran or of the Government of 
Iran maintained on the books of a U.S. depository institution.
    (e) Examples. The following are examples of transactions permitted 
under this section:
    (1) A United States person living abroad is permitted to purchase or 
sell an Iranian-origin carpet, as long as the sale is not to Iran or the 
Government of Iran.
    (2) A United States person may process a documentary collection 
relating to the importation into the United States of Iranian-origin 
pistachios, but payment under the documentary collection may not involve 
the crediting of an account of a person located in Iran or of the 
Government of Iran maintained on the books of a U.S. depository 
institution.

[65 FR 25643, May 3, 2000]



Sec. 560.535  Letters of credit and brokering services relating to certain foodstuffs and carpets.

    (a) Purchases from Iran or the Government of Iran. United States 
depository institutions are authorized to issue letters of credit in 
favor of a beneficiary in Iran or the Government of Iran to pay for 
purchases from Iran or the Government of Iran of the categories of 
Iranian-origin goods described in Sec. 560.534(a), provided that such 
letters of credit are not advised, negotiated, paid, or confirmed by the 
Government of Iran.
    (b) Transactions or dealings in Iranian-origin goods other than 
purchases from Iran or the Government of Iran. United States depository 
institutions are authorized to issue, advise, negotiate, pay, or confirm 
letters of credit to pay for transactions in or related to the 
categories of Iranian-origin goods described in Sec. 560.534(a), other 
than purchases from Iran or the Government of Iran, provided that such 
letters of credit are not issued, advised, negotiated, paid, or 
confirmed by the Government of Iran.
    (c) Brokering. United States persons, wherever located, are 
authorized to act as brokers for the purchase or sale of the categories 
of Iranian-origin goods described in Sec. 560.534(a), provided that the 
goods are not for exportation, reexportation, sale, or supply, directly 
or indirectly, to Iran or the Government of Iran.
    (d) Iranian accounts. Nothing in this section authorizes a debit or 
credit to an account of a person located in Iran or of the Government of 
Iran maintained on the books of a U.S. depository institution.
    (e) Examples. The following are examples of transactions permitted 
under this section:
    (1) A United States depository institution may issue a letter of 
credit in favor of a person in Iran to finance the importation into the 
United States of Iranian-origin caviar; the letter of credit may be 
confirmed by a third-country bank that is not included within the 
definition of the term Government of Iran.
    (2) A United States depository institution may advise or confirm a 
letter of credit issued by a third-country bank that is not included 
within the definition of the term Government of Iran to finance the 
purchase from a third country of Iranian-origin carpets by a U.S. person 
or third-country national.
    (3) A United States person may broker the sale of Iranian-origin 
carpets from Iran to a third-country national located outside Iran.
    (4) A bank that is owned or controlled by the Government of Iran may 
forward letter of credit documents, strictly on a documentary collection 
basis, either directly to a United States depository institution or to a 
third country bank that is not included within the definition of the 
term Government of Iran and that is party to a letter of credit issued 
by a United States depository institution. The Iranian bank may not, 
however, send the documents on an ``approval'' basis, since it is not 
and cannot be party to the letter of credit.
    Note to Sec. 560.535: See Secs. 560.304 and 560.313 for information 
relating to individuals and entities that are included within the 
definition of the term Government of Iran. Some entities meeting this 
definition are listed in appendix A to this part. See also Sec. 560.516 
for information relating to authorized transfers

[[Page 766]]

to Iran by U.S. depository institutions relating to licensed 
transactions.

[65 FR 25643, May 3, 2000]



                           Subpart F--Reports



Sec. 560.601  Records and reports.

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

[62 FR 45109, Aug. 25, 1997]



Sec. 560.602  [Reserved]



Sec. 560.603  Reports on oil transactions engaged in by foreign affiliates.

    (a) Requirement for reports. A report must be filed with the Office 
of Foreign Assets Control with respect to each foreign affiliate of a 
United States person that engaged in a reportable transaction, as 
defined in paragraph (b) of this section, during the calendar quarter. 
Reports are due within 60 days after the end of each calendar quarter.
    (b) Definitions. For purposes of this section:
    (1) The term reportable transaction means any purchase, sale, or 
swap of Iranian-origin crude oil or natural gas. For purposes of this 
paragraph (b), a purchase, sale, or swap is deemed to have occurred as 
of the date of the bill of lading used in connection with such 
transaction.
    (2) The term foreign affiliate means a person or entity other than a 
United States person (see Sec. 560.314) which is organized or located 
outside the United States and which is owned or controlled by a United 
States person or persons.
    (c) Who must report. A United States person must file a report with 
respect to each foreign affiliate owned or controlled by it which 
engaged in a reportable transaction or transactions during the calendar 
quarter. For the calendar quarter beginning October 1, 1996, and all 
subsequent quarters, a United States person must file a report only as 
to each foreign affiliate owned or controlled by it which engaged in a 
reportable transaction or transactions totaling $1,000,000 or more 
during the calendar quarter. A single United States entity within a 
consolidated or affiliated group may be designated to report on each 
foreign affiliate of the United States members of the group. Such 
centralized reporting may be done by the United States person who owns 
or controls, or has been delegated authority to file on behalf of, the 
remaining United States persons in the group.
    (d) What must be reported. (1) Part I of the report must provide the 
name, address, and principal place of business of the United States 
person; its place of incorporation or organization if an entity; and the 
name, title, and telephone number of the individual to contact 
concerning the report.
    (2) Part II of the report must provide, with respect to the foreign 
affiliate, its name and address; the type of entity, e.g., corporation, 
partnership, limited liability company; the country of its incorporation 
or organization; and its principal place of business.
    (3) Part III of the report must include the following information 
with respect to each reportable transaction (a separate Part III must be 
submitted for each reportable transaction):
    (i) The nature of the transaction, e.g., purchase, sale, swap;
    (ii) A description of the product involved;
    (iii) The name of the Iranian or third country party or parties 
involved in the transaction;
    (iv) The currency and amount of the transaction, and corresponding 
United States dollar value of the transaction if not denominated in 
United States dollars.
    (e) Where to report. Reports must be filed with the Compliance 
Programs Division, Office of Foreign Assets Control, Department of the 
Treasury, 1500 Pennsylvania Avenue, NW--Annex, Washington, DC 20220. 
Reports may be submitted by facsimile transmission at 202/622-1657. A 
copy must be retained for the reporter's records.
    (f) Whom to contact. Blocked Assets Division, Office of Foreign 
Assets Control, Department of the Treasury, 1500 Pennsylvania Avenue, 
NW.--Annex, Washington, DC 20220; telephone: 202/622-2440.

[63 FR 62941, Nov. 10, 1998]

[[Page 767]]



                          Subpart G--Penalties



Sec. 560.701  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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty of not to exceed $11,000 per violation may be 
imposed on any person who violates any license, order, or regulation 
issued under the Act;
    (2) Whoever willfully violates any license, order, or regulation 
issued under the Act shall, upon conviction be fined not more than 
$50,000, or, if a natural person, may be imprisoned for not more than 
ten years, or both; and any officer, director, or agent of any 
corporation who knowingly participates in such violation may be punished 
by a like fine, imprisonment or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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.
    (e) Violations of this part may also be subject to relevant 
provisions of the Customs laws and other applicable laws.

[60 FR 47063, Sept. 11, 1995, as amended at 61 FR 43461, Aug. 23, 1996; 
61 FR 54939, Oct. 23, 1996; 62 FR 45109, Aug. 25, 1997]



Sec. 560.702  Detention of shipments.

    Import shipments into the United States of Iranian-origin goods in 
violation of Sec. 560.201 and export shipments from the United States of 
goods destined for Iran in violation of Sec. 560.202 or 560.204 shall be 
detained. No such import, export, or reexport will be permitted to 
proceed, except as specifically authorized by the Secretary of the 
Treasury. Unless licensed, such shipments are subject to penalty or 
seizure and forfeiture action, under the Customs laws or other 
applicable provisions of law, depending on the circumstances.



Sec. 560.703  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 may 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 will 
describe the

[[Page 768]]

violation, specify the laws and regulations allegedly violated, and 
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 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.



Sec. 560.704  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 the 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 
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.



Sec. 560.705  Penalty notice.

    (a) No violation. If, after considering any presentations made in 
response to the prepenalty notice and any relevant facts, the Director 
determines that there was no violation by the person named in the 
prepenalty notice, he shall promptly notify the person in writing of the 
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 may 
issue a written notice of the imposition of the monetary penalty to that 
person.



Sec. 560.706  Referral for administrative collection measures or 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 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. 560.801  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 
subpart D of part 501 of this chapter.

[62 FR 45109, Aug. 25, 1997]



Sec. 560.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 12613, Executive Order 12957, Executive 
Order 12959, and any further Executive orders relating to the national 
emergency declared in Executive Order 12957 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.

[60 FR 47063, Sept. 11, 1995. Redesignated at 62 FR 45109, Aug. 25, 
1997]



Sec. 560.803  Customs procedures: Goods specified in Sec. 560.201.

    (a) With respect to goods specified in Sec. 560.201, and not 
otherwise licensed or excepted from the scope of that section, 
appropriate Customs officers shall not accept or allow any:
    (1) Entry for consumption or warehouse (including any appraisement 
entry, any entry of goods imported in the mails, regardless of value, 
and any informal entries);
    (2) Entry for immediate exportation;
    (3) Entry for transportation and exportation;
    (4) Withdrawal from warehouse;
    (5) Admission, entry, transfer or withdrawal to or from a foreign 
trade zone; or

[[Page 769]]

    (6) Manipulation or manufacture in a warehouse or in a foreign trade 
zone.
    (b) Customs officers may accept or allow the importation of Iranian-
origin goods under the procedures listed in paragraph (a) if:
    (1) A specific license pursuant to this part is presented; or
    (2) Instructions authorizing the transaction are received from the 
Office of Foreign Assets Control.
    (c) Whenever a specific license is presented to an appropriate 
Customs officer in accordance with this section, one additional legible 
copy of the entry, withdrawal or other appropriate document with respect 
to the merchandise involved must be filed with the appropriate Customs 
officers at the port where the transaction is to take place. Each copy 
of any such entry, withdrawal or other appropriate document, including 
the additional copy, must bear plainly on its face the number of the 
license pursuant to which it is filed. The original copy of the specific 
license must be presented to the appropriate Customs officers in respect 
of each such transaction and must bear a notation in ink by the licensee 
or person presenting the license showing the description, quantity and 
value of the merchandise to be entered, withdrawn or otherwise dealt 
with. This notation must be so placed and so written that there will 
exist no possibility of confusing it with anything placed on the license 
at the time of its issuance. If the license in fact authorizes the 
entry, withdrawal, or other transaction with regard to the merchandise, 
the appropriate Customs officer, or other authorized Customs employee, 
shall verify the notation by signing or initialing it after first 
assuring himself that it accurately describes the merchandise it 
purports to represent. The license shall thereafter be returned to the 
person presenting it and the additional copy of the entry, withdrawal or 
other appropriate document shall be forwarded by the appropriate Customs 
officer to the Office of Foreign Assets Control.
    (d) If it is unclear whether an entry, withdrawal or other action 
affected by this section requires a specific license from the Office of 
Foreign Assets Control, the appropriate Customs officer may withhold any 
action thereon and shall advise such person to communicate directly with 
the Office of Foreign Assets Control to request that instructions be 
sent to the Customs officer to authorize him to take action with regard 
thereto.

[60 FR 47063, Sept. 11, 1995. Redesignated at 62 FR 45109, Aug. 25, 
1997]



                   Subpart I--Paperwork Reduction Act



Sec. 560.901  Paperwork Reduction Act notice.

    The specific information collection requirements in Sec. 560.603 
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 1505-0106. 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 45109, Aug. 25, 1997]

Appendix A to Part 560--Financial Institutions Determined To Be Owned or 
                  Controlled by the Government of Iran

    This appendix lists financial institutions determined by the Office 
of Foreign Assets Control to be entities owned or controlled by the 
Government of Iran within the meaning of Sec. 560.313. The names and 
addresses represent the most complete list available at this time. 
Unless otherwise indicated, the financial institutions listed below are 
considered to be entities owned or controlled by the Government of Iran 
when they operate, not only from the locations listed below, but also 
from any other location. The names and addresses are subject to change, 
and the Office of Foreign Assets Control will update the list as needed.

1. AGRICULTURAL COOPERATIVE BANK OF IRAN (a.k.a. BANK TAAVON KESHAVARZI 
          IRAN), No. 129 Patrice Lumumba Street, Jalal-Al-Ahmad 
          Expressway, P.O. Box 14155/6395, Tehran, Iran

[[Page 770]]

2. AGRICULTURAL DEVELOPMENT BANK OF IRAN (a.k.a. BANK JOSIAIYI 
          KESHAHVARZI), Farahzad Expressway, Tehran, Iran
3. BANK JOSIAIYI KESHAHVARZI (a.k.a. AGRICULTURAL DEVELOPMENT BANK OF 
          IRAN), Farahzad Expressway, Tehran, Iran
4. BANK MARKAZI JOMHOURI ISLAMI IRAN (a.k.a. THE CENTRAL BANK OF IRAN), 
          Ferdowsi Avenue, P.O. Box 11365-8551, Tehran, Iran
5. BANK MASKAN (a.k.a. HOUSING BANK (of Iran)), Ferdowsi St., Tehran, 
          Iran
6. BANK MELLAT, Park Shahr, Varzesh Avenue, P.O. Box 11365/5964, Tehran, 
          Iran, and all offices worldwide, including, but not limited 
          to:
a. BANK MELLAT (Branch), Ziya Gokalp Bulvari No. 12, Kizilay, Ankara, 
          Turkey
b. BANK MELLAT (Branch), Binbir Cicek Sokak, Buyukdere Caddesi, P.O. Box 
          67, Levant, Istanbul, Turkey
c. BANK MELLAT (Branch), 48 Gresham Street, London EC2V 7AX, England
7. BANK MELLI, P.O. Box 11365-171, Ferdowsi Avenue, Tehran, Iran, and 
          all offices worldwide, including, but not limited to:
a. BANK MELLI (Branch), 4 Moorgate, London EC2R 6AL, England
b. BANK MELLI (Branch), Schadowplatz 12, 4000 Dusseldorf 1, Germany
c. BANK MELLI (Branch), Friedenstrasse 4, P.O. Box 160 154, 6000 
          Frankfurt am Main, Germany
d. BANK MELLI (Branch), P.O. Box 112129, Holzbruecke 2, 2000 Hamburg 11, 
          Germany
e. BANK MELLI (Branch), Odeonsplatz 18, 8000 Munich 22, Germany
f. BANK MELLI (Branch), 43 Avenue Montaigne, 75008 Paris, France
g. BANK MELLI (Branch), 601 Gloucester Tower, The Landmark, 11 Pedder 
          Street, P.O. Box 720, Hong Kong
h. BANK MELLI (Representative Office), 333 New Tokyo Building, 3-1 
          Marunouchi, 3-chome, Chiyoda-ku, Tokyo, Japan
i. BANK MELLI (Representative Office), 818 Wilshire Boulevard, Los 
          Angeles, California 90017, U.S.A
j. BANK MELLI (Representative Office), 767 Fifth Avenue, 44th Floor, New 
          York, New York 10153, U.S.A
k. BANK MELLI (Representative Office), Smolensky Boulevard 22/14, Kv. 
          S., Moscow, Russia
l. BANK MELLI (Branch), Flat No. 1, First Floor, 8 Al Sad El-Aaly, 
          Dokki, P.O. Box 2654, Cairo, Egypt
m. BANK MELLI (Branch), Ben Yas Street, P.O. Box No. 1894, Riga Deira, 
          Dubai, U.A.E
n. BANK MELLI (Branch), P.O. Box 2656, Shaikha Maryam Building, Liwa 
          Street, Abu Dhabi, U.A.E
o. BANK MELLI (Branch), B.P.O. Box 1888, Clock Tower, Industrial Road, 
          Al-Ain Club Building in from Emertel Al Ain, Al Ain, Abu 
          Dhabi, U.A.E
p. BANK MELLI (Branch), P.O. Box 1894, Riqa, Ban Yas Street, Deira, 
          Dubai, U.A.E
q. BANK MELLI (Branch), Mohd-Habib Building, Al-Fahidi Street, P.O. Box 
          3093, Bur Dubai, Dubai, U.A.E
r. BANK MELLI (Branch), P.O. Box 248, Fujairah, U.A.E
s. BANK MELLI (Branch), Sami Sagar Building Oman Street Al-Nakheel, P.O. 
          Box 5270, Ras-Al Khaimah, U.A.E
t. BANK MELLI (Branch), P.O. Box 459, Al Bory Street, Sharjah, U.A.E.
u. BANK MELLI (Branch), P.O. Box 785, Government Road, Shaikh Mubarak 
          Building, Manama, Bahrain
v. BANK MELLI (Branch), P.O. Box 23309, Shaikh Salman Street, Road No. 
          1129, Muharraq 211, Bahrain
w. BANK MELLI (Branch), P.O. Box 5643, Mossa Abdul Rehman Hassan 
          Building, 238 Al Burj St., Ruwi, Muscat, Oman
8. BANK OF INDUSTRY AND MINE (of Iran) (a.k.a. BANK SANAT VA MADAN), 
          Hafez Avenue, P.O. Box 11365/4978, Tehran, Iran
9. BANK REFAH KARGARAN (a.k.a. WORKERS WELFARE BANK (of Iran)), 
          Moffettah No. 125, P.O. Box 15815 1866, Tehran, Iran
10. BANK SADERAT IRAN, Bank Saderat Tower, P.O. Box 15745-631, Somayeh 
          Street, Tehran, Iran, and all offices worldwide, including, 
          but not limited to:
a. BANK SADERAT IRAN (Branch), Hamdam Street, Airport Road Intersection, 
          P.O. Box 700, Abu Dhabi, U.A.E
b. BANK SADERAT IRAN (Branch), Al-Am Road, P.O. Box 1140, Al Ein, Abu 
          Dhabi, U.A.E
c. BANK SADERAT IRAN (Branch), Liwara Street, P.O. Box 16, Ajman, U.A.E
d. BANK SADERAT IRAN (Branch), 3rd Floor Dom Dasaf Building, Mejloka 
          Street 7A, Ashkhabad, Turkmenistan
e. BANK SADERAT IRAN (Branch), 25-29 Panepistimiou Street, P.O. Box 
          4308, GR-10210, Athens 10672, Greece
f. BANK SADERAT IRAN (Branch), Imam Ali Street, Sahat Yaghi, Ras Elain-
          Alektisad Building 2nd Floor, Baalbeck, Lebanon
g. BANK SADERAT IRAN (Branch and Offshore Banking Unit), 106 Government 
          Road, P.O. Box 825, Manama Town 316, Bahrain
h. BANK SADERAT IRAN (Branch), Hamra Pavillion Street, Savvagh and 
          Daaboul Building 1st Floor, P.O. Box 113-6717, Beirut, Lebanon
i. BANK SADERAT IRAN (Branch), Alghobairi Boulevard, Beirut, Lebanon
j. BANK SADERAT IRAN (Branch), 28 Sherif Street, P.O. Box 462, Cairo, 
          Egypt

[[Page 771]]

k. BANK SADERAT IRAN (Branch), Old Ben-Ghanem Street (next to God 
          Market), P.O. Box 2256, Doha, Qatar
l. BANK SADERAT IRAN (Branch), Almaktoum Road, P.O. Box 4182, Deira, 
          Dubai, U.A.E
m. BANK SADERAT IRAN (Branch), Bazar Murshid, P.O. Box 4182, Deira, 
          Dubai, U.A.E
n. BANK SADERAT IRAN (Branch), Alfahid Road, P.O. Box 4182, Bur Dubai, 
          Dubai, U.A.E
o. BANK SADERAT IRAN (Branch), Sherea Shekikh Zayad Street, P.O. Box 55, 
          Fujairah, U.A.E
p. BANK SADERAT IRAN (Branch), Wilhelm Leuschner Strasse 41, P.O. Box 
          160151, W-6000 Frankfurt am Main, Germany
q. BANK SADERAT IRAN (Branch), P.O. Box 112227, Hopfenhof Passage, 
          Kleiner Bustah 6-10, W-2000 Hamburg 11, Germany
r. BANK SADERAT IRAN (Branch), Lothbury, London EC2R 7HD, England
s. BANK SADERAT IRAN (Representative Office), 707 Wilshire Boulevard, 
          Suite 4880, Los Angeles, California 90017, U.S.A
t. BANK SADERAT IRAN (Representative Office), 55 East 59th Street, 16th 
          Floor, New York, New York 10022, U.S.A.
u. BANK SADERAT IRAN (Branch), P.O. Box 4269, Mutrah, Muscat, Oman
v. BANK SADERAT IRAN (Branch), 16 Rue de la Paix, Paris 2eme, 75002 
          Paris, France
w. BANK SADERAT IRAN (Branch), Alaroba Road, P.O. Box 316, Sharjah, 
          U.A.E
11. BANK SANAT VA MADAN (a.k.a. BANK OF INDUSTRY AND MINE (of Iran)), 
          Hafez Avenue, P.O. Box 11365/4978, Tehran, Iran
12. BANK SEPAH, Emam Khomeini Square, P.O. Box 11364, Tehran, Iran, and 
          all offices worldwide, including, but not limited to:
a. BANK SEPAH (Branch), Muenchener Strasse 49, P.O. Box 10 03 47, W-6000 
          Frankfurt am Main 1, Germany
b. BANK SEPAH (Branch), 5/7 Eastcheap, EC3M 1JT London, England
c. BANK SEPAH (Representative Office), 650 Fifth Avenue, New York, New 
          York 10019, U.S.A
d. BANK SEPAH (Branch), 17 Place Vendome, 75001 Paris, France.
e. BANK SEPAH (Branch), Via Barberini 50, 00187 Rome, Italy
f. BANK SEPAH (Representative Office), Ufficio di Rappresentan Za, Via 
          Ugo Foscolo 1, 20121 Milan, Italy
13. BANK TAAVON KESHAVARZI IRAN (a.k.a. AGRICULTURAL COOPERATIVE BANK OF 
          IRAN) No. 129 Patrice Lumumba Street, Jalal-Al-Ahmad 
          Expressway, P.O. Box 14155/6395, Tehran, Iran
14. BANK TEJARAT, 130 Taleghani Avenue, Nejatoullahie, P.O. Box 11365-
          5416, Tehran, Iran, and all offices worldwide, including, but 
          not limited to:
a. BANK TEJARAT (Branch), 6/8 Clements Lane, London EC4N 7AP, England
b. BANK TEJARAT (Branch), 44 Avenue des Champs Elysees, 75008 Paris, 
          France
15. DEUTSCH-IRANISCHE HANDELSBANK AG (n.k.a. EUROPAEISCH-IRANISCHE 
          HANDELSBANK AG) Depenau 2, W-2000 Hamburg 1, Germany, and all 
          offices worldwide, including, but not limited to:
a. DEUTSCH-IRANISCHE HANDELSBANK AG (n.k.a. EUROPAEISCH-IRANISCHE 
          HANDELSBANK AG) (Representative Office), 23 Argentine Square, 
          Beihaghi Bulvard, P.O. Box 15815/1787, Tehran 15148, Iran
16. EUROPAEISCH-IRANISCHE HANDELSBANK AG (f.k.a. DEUTSCH-IRANISCHE 
          HANDELSBANK AG) Depenau 2, W-2000 Hamburg 1, Germany, and all 
          offices worldwide, including, but not limited to:
a. EUROPAEISCH-IRANISCHE HANDELSBANK AG (f.k.a. DEUTSCH-IRANISCHE 
          HANDELSBANK AG) (Representative Office), 23 Argentine Square, 
          Beihaghi Bulvard, P.O. Box 15815/1787, Tehran 15148, Iran
17. HOUSING BANK (of Iran) (a.k.a. BANK MASKAN), Ferdowsi St., Tehran, 
          Iran
18. IRAN OVERSEAS INVESTMENT BANK LIMITED (f.k.a. IRAN OVERSEAS 
          INVESTMENT CORPORATION LIMITED), 120 Moorgate, London EC2M 
          6TS, England, and all offices worldwide, including, but not 
          limited to:
a. IRAN OVERSEAS INVESTMENT BANK LIMITED (Representative Office), 1137 
          Avenue Vali Asr off Park-e-SAll, P.O. Box 15115/531, Tehran, 
          Iran
b. IRAN OVERSEAS INVESTMENT BANK LIMITED (Agency), Suite 3c Olympia 
          House, 61/63 Dame Street, Dublin 2, Ireland
c. IRAN OVERSEAS INVESTMENT BANK LIMITED (Agency), Improgetti, Via 
          Germanico 24, 00192 Rome, Italy
d. IRAN OVERSEAS TRADING COMPANY LIMITED (Subsidiary), 120 Moorgate, 
          London EC2M 6TS, England
e. IRAN OVERSEAS INVESTMENT CORPORATION LIMITED (n.k.a. IRAN OVERSEAS 
          INVESTMENT BANK LIMITED), 120 Moorgate, London EC2M 6TS, 
          England
19. THE CENTRAL BANK OF IRAN (a.k.a. BANK MARKAZI JOMHOURI ISLAMI IRAN), 
          Ferdowsi Avenue, P.O. Box 11365-8551, Tehran, Iran
20. WORKERS WELFARE BANK (of Iran) (a.k.a. BANK REFAH KARGARAN),

[[Page 772]]

          Moffettah No. 125, P.O. Box 15815 1866, Tehran, Iran

[64 FR 20175, Apr. 26, 1999. Redesignated at 64 FR 41793, Aug. 2, 1999]

          Appendix B to Part 560--Bulk Agricultural Commodities

    Notes: 1. Appendix B sets forth those agricultural commodities 
eligible for the bulk agricultural commodity sales licensing procedures 
in Sec. 560.531.
    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
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
------------------------------------------------------------------------


[64 FR 41793, Aug. 2, 1999]

           Appendix C to Part 560--Eligible Procurement Bodies

    This Appendix C sets forth eligible procurement bodies of the 
Government of Iran identified by the Office of Foreign Assets Control as 
not being affiliated with the coercive organs of the state. See 
Sec. 560.531(e).
    Government Trading Corporation (a.k.a. GTC).
    State Livestock and Logistics Co. (a.k.a. State Livestock Affairs 
Logistics; a.k.a. SLAL).

[64 FR 58792, Nov. 1, 1999]



PART 575--IRAQI SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

575.201  Prohibited transactions involving property in which the 
          Government of Iraq has an interest; transactions with respect 
          to securities.
575.202  Effect of transfers violating the provisions of this part.
575.203  Holding of certain types of blocked property in interest-
          bearing accounts.
575.204  Prohibited importation of goods or services from Iraq.
575.205  Prohibited exportation and reexportation of goods, technology, 
          or services to Iraq.
575.206  Prohibited dealing in property.
575.207  Prohibited transactions relating to travel to Iraq or to 
          activities within Iraq.
575.208  Prohibited transportation-related transactions involving Iraq.
575.209  Prohibited performance of contracts.
575.210  Prohibited transfers of funds to the Government of Iraq or any 
          person in Iraq.
575.211  Evasions; attempts; conspiracies.
575.212  Effective dates.

                     Subpart C--General Definitions

575.301  Blocked account; blocked property.
575.302  Effective date.
575.303  Entity.
575.304  Entity of the Government of Iraq; Iraqi Government Entity.
575.305  General license.
575.306  Government of Iraq.
575.307  Government of Kuwait.
575.308  Interest.

[[Page 773]]

575.309  Iraq; Iraqi.
575.310  Kuwait; Kuwaiti.
575.311  Iraqi origin.
575.312  Iraqi person.
575.313  License.
575.314  Person.
575.315  Property; property interest.
575.316  Specific license.
575.317  Transfer.
575.318  UNSC Resolution 661.
575.319  United States.
575.320  U.S. financial institution.
575.321  United States person; U.S. person.
575.322  United States national; U.S. national.
575.323  661 Committee.
575.324  UNSC Resolution 986.
575.325  986 Escrow Account; United Nations Iraq Account.
575.326  Executory contract.
575.327  Memorandum of Understanding.
575.328  Guidelines.

                       Subpart D--Interpretations

575.401  Reference to amended sections.
575.402  Effect of amendment.
575.403  Termination and acquisition of an interest of the Government of 
          Iraq.
575.404  Payments from blocked accounts to U.S. exporters and for other 
          obligations prohibited.
575.405  Acquisition of instruments including bankers acceptances.
575.406  Extensions of credits or loans to Iraq.
575.407  Payments in connection with certain authorized transactions.
575.408  Offshore transactions.
575.409  Transshipments through the United States prohibited.
575.410  Imports of Iraqi goods from third countries; transshipments.
575.411  Exports to third countries; transshipments.
575.412  Release of Iraqi goods from bonded warehouse or foreign trade 
          zone.
575.413  Goods intended for export to Iraq.
575.414  Imports of Iraqi goods and purchases of goods from Iraq.
575.415  Setoffs prohibited.
575.416  Travel transactions for journalistic activity in Iraq.
575.417  [Reserved]
575.418  Transactions incidental to a licensed transaction.

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

575.501  Effect of license or authorization.
575.502  Exclusion from licenses and authorizations.
575.503  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
575.504  [Reserved]
575.505  Completion of certain transactions related to bankers 
          acceptances authorized.
575.506  Payment by the Government of Iraq of obligations to persons 
          within the United States authorized.
575.507  Certain exports to Iraq authorized.
575.508  Import of household and personal effects from Iraq authorized.
575.509  Payment and transfers authorized for shipments of oil under 
          contract and en route to the United States prior to the 
          effective date.
575.510  Payment and transfers authorized for goods and services 
          exported to Iraq prior to the effective date.
575.511  Extensions or renewals authorized.
575.512  [Reserved]
575.513  Transactions related to telecommunications authorized.
575.514  Transactions related to mail authorized.
575.515--75.516  [Reserved]
575.517  Procedures established for export transactions initiated prior 
          to the effective date.
575.518  Certain standby letters of credit and performance bonds.
575.519  Certain imports for diplomatic or official personnel 
          authorized.
575.520  Donations of food to relieve human suffering authorized.
575.521  Donations of medical supplies authorized.
575.522  Executory contracts with the Government of Iraq for trade in 
          petroleum, pipeline parts and equipment, humanitarian goods, 
          and oil field equipment authorized.
575.523  Certain transactions in Iraqi petroleum and petroleum products.
575.524  Exportation of pipeline parts and equipment.
575.525  Exportation of humanitarian aid.
575.526  Dealings in and importation of certain Iraqi-origin petroleum 
          and petroleum products authorized.

                           Subpart F--Reports

575.601  Records and reports.

                          Subpart G--Penalties

575.701  Penalties.
575.702  Prepenalty notice.
575.703  Presentation responding to prepenalty notice.
575.704  Penalty notice.
575.705  Referral to United States Department of Justice.

                          Subpart H--Procedures

575.801  Procedures.
575.802  Delegation by the Secretary of the Treasury.

[[Page 774]]

                   Subpart I--Paperwork Reduction Act

575.901  Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 18 U.S.C. 2332d; 22 U.S.C. 287c; Pub. L. 
101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 31 U.S.C. 321(b); 50 
U.S.C. 1601-1651, 1701-1706; Pub. L. 101-513, 104 Stat. 2047-2055 (50 
U.S.C. 1701 note); E.O. 12722, 55 FR 31803, 3 CFR, 1990 Comp., p. 294; 
E.O. 12724, 55 FR 33089, 3 CFR, 1990 Comp., p. 297; E.O. 12817, 57 FR 
48433, 3 CFR, 1992 Comp., p. 317.

    Source: 56 FR 2113, Jan. 18, 1991, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 575.101  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 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.

[56 FR 2113, Jan. 18, 1991, as amended at 62 FR 45109, Aug. 25, 1997]



                         Subpart B--Prohibitions



Sec. 575.201  Prohibited transactions involving property in which the Government of Iraq has an interest; transactions with respect to securities.

    (a) Except as authorized by regulations, rulings, instructions, 
licenses, or otherwise, no property or interests in property of the 
Government of Iraq 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) 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), the endorsement 
or guaranty of signatures on, or any other dealing in any security (or 
evidence thereof) registered or inscribed in the name of the Government 
of Iraq and held within the possession or control of a U.S. person is 
prohibited, irrespective of the fact that at any time either at 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.

[56 FR 2113, Jan. 18, 1991, as amended at 62 FR 45109, Aug. 25, 1997]



Sec. 575.202  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, ruling, instruction, 
license, or other direction or authorization hereunder and involves any 
property in which the Government of Iraq 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 in which the Government of Iraq 
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.

[[Page 775]]

    (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, the 
United Nations Participation Act, 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 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) 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;

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. The filing of a report in 
accordance with the provisions of this paragraph 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 in which, 
on or since the effective date, there existed an interest of the 
Government of Iraq.



Sec. 575.203  Holding of certain types of blocked property in interest-bearing accounts.

    (a) Any person, including a U.S. financial institution, currently 
holding property subject to Sec. 575.201 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, must 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. This 
requirement shall apply to currency, bank deposits, accounts, and any 
other financial 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 blocked Government of Iraq entity having an interest in the 
accounts.
    (b) For purposes of this section, the term interest-bearing account 
means a blocked account in a U.S. financial institution earning interest 
at rates that are commercially reasonable for the

[[Page 776]]

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.
    (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. 575.204  Prohibited importation of goods or services from Iraq.

    Except as otherwise authorized, no goods or services of Iraqi origin 
may be imported into the United States, nor may any U.S. person engage 
in any activity that promotes or is intended to promote such 
importation.



Sec. 575.205  Prohibited exportation and reexportation of goods, technology, or services to Iraq.

    Except as otherwise authorized, no goods, technology (including 
technical data or other information), or services may be exported from 
the United States, or, if subject to U.S. jurisdiction, exported or 
reexported from a third country to Iraq, to any entity owned or 
controlled by the Government of Iraq, or to any entity operated from 
Iraq, except donated foodstuffs in humanitarian circumstances, and 
donated supplies intended strictly for medical purposes, the exportation 
of which has been specifically licensed pursuant to Secs. 575.507, 
575.517 or 575.518.



Sec. 575.206  Prohibited dealing in property.

    Except as otherwise authorized, no U.S. person may deal in property 
of Iraqi origin exported from Iraq after August 6, 1990, property 
intended for exportation to Iraq, or property intended for exportation 
from Iraq to any other country, nor may any U.S. person engage in any 
activity that promotes or is intended to promote such dealing.



Sec. 575.207  Prohibited transactions relating to travel to Iraq or to activities within Iraq.

    Except as otherwise authorized, no U.S. person may engage in any 
transaction relating to travel by any U.S. citizen or permanent resident 
alien to Iraq, or to activities by any U.S. citizen or permanent 
resident alien within Iraq, after the effective date, other than 
transactions:
    (a) Necessary to effect the departure of a U.S. citizen or permanent 
resident alien from Kuwait or Iraq;
    (b) Relating to travel and activities for the conduct of the 
official business of the United States Government or the United Nations; 
or
    (c) Relating to journalistic activity by persons regularly employed 
in such capacity by a newsgathering organization.

This section prohibits the unauthorized payment by a U.S. person of his 
or her own travel or living expenses to or within Iraq.



Sec. 575.208  Prohibited transportation-related transactions involving Iraq.

    Except as otherwise authorized, the following are prohibited:
    (a) Any transaction by a U.S. person relating to transportation to 
or from Iraq;
    (b) The provision of transportation to or from the United States by 
any Iraqi person or any vessel or aircraft of Iraqi registration; or
    (c) The sale in the United States by any person holding authority 
under the Federal Aviation Act of any transportation by air which 
includes any stop in Iraq.
    (d) Example. Unless licensed or exempted, no U.S. person may insure, 
or provide ticketing, ground, port, refueling, bunkering, clearance, or 
freight forwarding services, with respect to any sea, ground, or air 
transportation the destination of which is Iraq, or which is intended to 
make a stop in Iraq.



Sec. 575.209  Prohibited performance of contracts.

    Except as otherwise authorized, no U.S. person may perform any 
contract,

[[Page 777]]

including a financing contract, in support of an industrial, commercial, 
public utility, or governmental project in Iraq.



Sec. 575.210  Prohibited transfer of funds to the Government of Iraq or any person in Iraq.

    Except as otherwise authorized, no U.S. person may commit or 
transfer, directly or indirectly, funds or other financial or economic 
resources to the Government of Iraq or any person in Iraq.



Sec. 575.211  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 subpart, 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. 575.212  Effective dates.

    The effective dates of the prohibitions and directives contained in 
this subpart B are as follow:
    (a) With respect to Secs. 575.201, 575.202, 575.204, 575.205, 
575.207, 575.208, 575.209, and 575.211, 5 a.m., Eastern Daylight Time 
(``e.d.t.''), August 2, 1990;
    (b) With respect to Secs. 575.206, and 575.210, 8:55 p.m. e.d.t., 
August 9, 1990; and
    (c) With respect to Sec. 575.203, January 18, 1991.



                     Subpart C--General Definitions



Sec. 575.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property in which the Government of Iraq 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 authorizing such action.



Sec. 575.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibition, as identified in Sec. 575.212.



Sec. 575.303  Entity.

    The term entity includes a corporation, partnership, association, or 
other organization.



Sec. 575.304  Entity of the Government of Iraq; Iraqi Government entity.

    The term entity of the Government of Iraq or Iraqi Government entity 
includes:
    (a) Any corporation, partnership, association, or other entity in 
which the Government of Iraq owns a majority or controlling interest, 
any entity managed or funded by that government, or any entity which is 
otherwise controlled by that government;
    (b) Any agency or instrumentality of the Government of Iraq, 
including the Central Bank of Iraq.



Sec. 575.305  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.



Sec. 575.306  Government of Iraq.

    The term Government of Iraq includes:
    (a) The state and the Government of Iraq, as well as any political 
subdivision, agency, or instrumentality thereof, including the Central 
Bank of Iraq;
    (b) Any partnership, association, corporation, or other organization 
substantially 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 or organization determined by the Director of 
the Office of Foreign Assets Control to be included within this section.
    Note to Sec. 575.306: Please refer to the appendices at the end of 
this chapter for listings of persons determined to fall within this 
definition that have been designated pursuant to this part. Section 
501.807 of this chapter sets forth the procedures to be followed

[[Page 778]]

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.

[56 FR 2113, Jan. 18, 1991, as amended at 61 FR 32938, June 26, 1996; 62 
FR 45109, Aug. 25, 1997]



Sec. 575.307  Government of Kuwait.

    The term Government of Kuwait includes:
    (a) The State and Government of Kuwait and any entity purporting to 
be the Government of Kuwait, as well as any political subdivision, 
agency, or instrumentality thereof, including the Central Bank of 
Kuwait;
    (b) Any partnership, association, corporation, or other organization 
substantially 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;
    (d) Any other person or organization determined by the Director or 
the Office of Foreign Assets Control to be included within this section.



Sec. 575.308  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. 575.309  Iraq; Iraqi.

    The term Iraq means the country of Iraq and any territory under the 
jurisdiction or authority thereof, legal or illegal. The term Iraqi 
means pertaining to Iraq as defined in this section.



Sec. 575.310  Kuwait; Kuwaiti.

    The term Kuwait means the country of Kuwait and any territory under 
the jurisdiction or authority thereof. The term Kuwaiti means pertaining 
to Kuwait as defined in this section.



Sec. 575.311  Iraqi origin.

    The term goods or services of Iraqi origin includes:
    (a) Goods produced, manufactured, grown, or processed within Iraq;
    (b) Goods which have entered into Iraqi commerce;
    (c) Services performed in Iraq or by a Iraqi national who is acting 
as an agent, employee, or contractor of the Government of Iraq, or of a 
business entity located in Iraq. Services of Iraqi origin are not 
imported into the United States when such services are provided in the 
United States by an Iraqi national employed in the United States.



Sec. 575.312  Iraqi person.

    The term Iraqi person means an Iraqi citizen, any person organized 
under the laws of Iraq, or any person owned or controlled, directly or 
indirectly, by a Iraqi national or the Government of Iraq.



Sec. 575.313  License.

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



Sec. 575.314  Person.

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



Sec. 575.315  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, 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,

[[Page 779]]

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. 575.316  Special license.

    The term specific license means any license or authorization not set 
forth in this part but issued pursuant to this part in response to an 
application.



Sec. 575.317  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 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 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 decrease 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. 575.318  UNSC Resolution 661.

    The term UNSC Resolution 661 means United Nations Security Council 
Resolution No. 661, adopted August 6, 1990, prohibiting certain 
transactions with respect to Iraq and Kuwait.



Sec. 575.319  United States.

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



Sec. 575.320  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.



Sec. 575.321  United States person; U.S. person.

    The term United States person or U.S. person means any United States 
citizen; permanent resident alien; juridical person 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. 575.322  United States national; U.S. national.

    The term United States national or U.S. national means any United 
States citizen; any person who, though not a citizen of the United 
States, owes permanent allegiance to the United States; and any 
juridical person organized under the laws of the United States or any 
jurisdiction within the

[[Page 780]]

United States. This term does not include U.S. branches of persons 
organized under foreign law, or aliens, regardless of whether they have 
permanent resident status in the United States.

[56 FR 5636, Feb. 11, 1991]



Sec. 575.323  661 Committee.

    The term 661 Committee means the Security Council Committee 
established by UNSC Resolution 661, and persons acting for or on behalf 
of the Committee under its specific delegation of authority for the 
relevant matter or category of activity, including the overseers 
appointed by the UN Secretary-General to examine and approve agreements 
for purchases of petroleum and petroleum products from the Government of 
Iraq pursuant to UNSC Resolution 986 (1995).

[61 FR 36628, July 12, 1996]



Sec. 575.324  UNSC Resolution 986.

    The term UNSC Resolution 986 means United Nations Security Council 
Resolution 986, adopted April 14, 1995.

[61 FR 36628, July 12, 1996]



Sec. 575.325  986 Escrow Account; United Nations Iraq Account.

    The term 986 Escrow Account or United Nations Iraq Account means the 
escrow account established by the Secretary-General of the United 
Nations pursuant to paragraph 7 of UNSC Resolution 986.

[61 FR 65313, Dec. 11, 1996]



Sec. 575.326  Executory contract.

    The term executory contract means a contract which cannot be 
performed according to its terms until a stated condition has been 
fulfilled, such as a contract which requires the approval of a 
regulatory body before the contracting parties may begin performance.

[61 FR 36628, July 12, 1996]



Sec. 575.327  Memorandum of Understanding.

    The term Memorandum of Understanding means the Memorandum of 
Understanding Between the Secretariat of the United Nations and the 
Government of Iraq on the Implementation of Security Council Resolution 
986 (1995).

[61 FR 65313, Dec. 11, 1996]



Sec. 575.328  Guidelines.

    The term Guidelines means the Procedures to be Employed by the 
Security Council Committee Established by Resolution 661 (1990) 
Concerning the Situation Between Iraq and Kuwait in the Discharge of its 
Responsibility as Required by Paragraph 12 of Security Council 
Resolution 986 (1995).

[61 FR 65313, Dec. 11, 1996]



                       Subpart D--Interpretations



Sec. 575.401  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. 575.402  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. 575.403  Termination and acquisition of an interest of the Government of Iraq.

    (a) Whenever a transaction licensed or authorized by or pursuant to 
this part results in the transfer of property (including any property 
interest) from the Government of Iraq, such property shall no longer be 
deemed to be property in which the Government of Iraq has or has had an 
interest unless there

[[Page 781]]

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 issued pursuant to this part, if property (including any 
property interest) is transferred or attempted to be transferred to the 
Government of Iraq, such property shall be deemed to be property in 
which there exists an interest of the Government of Iraq.



Sec. 575.404  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.



Sec. 575.405  Acquisition of instruments including bankers acceptances.

    No U.S. person may acquire or deal in any obligation, including 
bankers acceptances, where the documents evidencing the obligation 
indicate, or the U.S. person has actual knowledge, that the underlying 
transaction is in violation of Secs. 575.201, 575.204, or Sec. 575.205. 
This interpretation does not apply to obligations arising from an 
underlying transaction licensed or otherwise authorized pursuant to this 
part.



Sec. 575.406  Extensions of credits or loans to Iraq.

    (a) The prohibition in Sec. 575.210 applies to the unlicensed 
renewal of credits or loans in existence on the effective date, whether 
by affirmative action or operation of law.
    (b) The prohibition in Sec. 575.210 applies to credits to loans 
extended in any currency.



Sec. 575.407  Payments in connection with certain authorized transactions.

    Payments are authorized in connection with transactions authorized 
in or pursuant to subpart E.



Sec. 575.408  Offshore transactions.

    (a) The prohibitions contained in Secs. 575.201 and 575.206 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 the Government of Iraq has or has had an interest since the 
effective date.
    (b) Prohibited transactions include, but are not limited to, 
importation into locations outside the United States of, or dealings 
within such locations in, goods or services of Iraqi 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, Iraqi crude oil or 
petroleum products refined in Iraq.
    (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 knows or has reason to know is an Iraqi Government entity 
unless the entity is licensed by the Office of Foreign Assets Control to 
conduct such transactions with U.S. persons.



Sec. 575.409  Transshipments through the United States prohibited.

    (a) The prohibitions in Sec. 575.205 apply to the importation into 
the United States, for transshipment or transit, of goods which are 
intended or destined for Iraq, or an entity operated from Iraq.
    (b) The prohibitions in Sec. 575.204 apply to the importation into 
the United States, for transshipment or transit, of goods of Iraqi 
origin which are intended or destined for third countries.
    (c) Goods in which the Government of Iraq has an interest which are 
imported into or transshipped through the United States are blocked 
pursuant to Sec. 575.201.



Sec. 575.410  Imports of Iraqi goods from third countries; transshipments.

    Importation into the United States from third countries of goods, 
including refined petroleum products, containing raw materials or 
components of Iraqi origin is prohibited. In light of the universal 
prohibition in UNSC Resolution 661 on the importation of goods exported 
from Iraq or Kuwait after August 6, 1990, substantial transformation

[[Page 782]]

of Iraqi-origin goods in a third country does not exempt the third-
country products from the prohibitions contained in this part.



Sec. 575.411  Exports to third countries; transshipments.

    Exportation of goods or technology (including technical data and 
other information) 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 Iraq (including passage 
through, or storage in, intermediate destinations). The exportation of 
goods and 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 Iraq, is being 
specifically manufactured to fill a Iraqi order, or if the 
manufacturer's sales of the particular product are predominantly to 
Iraq.



Sec. 575.412  Release of Iraqi goods from bonded warehouse or foreign trade zone.

    Section 575.204 does not prohibit the release from a bonded 
warehouse or a foreign trade zone of goods of Iraqi origin imported into 
a bonded warehouse or a foreign trade zone either prior to the effective 
date or in a transaction authorized pursuant to this part after the 
effective date.
    Note: Pursuant to Sec. 575.201, property in which the Government of 
Iraq has an interest may not be released unless authorized or licensed 
by the Office of Foreign Assets Control.



Sec. 575.413  Goods intended for export to Iraq.

    The prohibitions contained in Sec. 575.201 do not apply to goods 
manufactured, consigned, or destined for export to Iraq and not subject 
to Sec. 575.517, if the Government of Iraq has never held or received 
title to such goods on or after the effective date, and if any payment 
received from the Government of Iraq with respect to such goods is 
placed in a blocked account in a U.S. financial institution pursuant to 
Sec. 575.503. The prohibitions of Sec. 575.205 apply to goods subject to 
this section.



Sec. 575.414  Imports of Iraqi goods and purchases of goods from Iraq.

    The prohibitions contained in Sec. 575.201 shall not apply to the 
importation of Iraqi-origin goods and services described in Sec. 575.204 
if the importation of such goods is permitted by an authorization or 
license issued pursuant to this part. However, any payments in 
connection with such importation are subject to the prohibitions 
contained in Secs. 575.201 and 575.210.



Sec. 575.415  Setoffs prohibited.

    A setoff against a blocked account, whether by a U.S. bank or other 
U.S. person, is a prohibited transfer under Sec. 575.201 if effected 
after the effective date.



Sec. 575.416  Travel transactions for journalistic activity in Iraq.

    (a) Section 575.207 does not prohibit travel transactions in Iraq by 
persons regularly employed in journalistic activity by recognized 
newsgathering organizations.
    (b) For purposes of this part:
    (1) A person is considered regularly employed as a journalist if he 
or she is employed in a constant or regular manner by a recognized 
newsgathering organization. Free-lance journalists should have an 
assignment from a recognized newsgathering organization requiring travel 
to Iraq, or be able to demonstrate that publication by a recognized 
newsgathering organization of a work requiring such travel is likely. 
The latter may be demonstrated by providing a resume listing previously-
published free-lance works or copies of previously-published works.
    (2) Recognized newsgathering organizations include those entities 
regularly and principally engaged in collecting news for publication in 
the public press, transmission by wire services, or broadcast by radio 
or television.
    (c) Authorized travel transactions are limited to those incident to 
travel for the purpose of collecting and disseminating information for a 
recognized newsgathering organization, and do not include travel 
transactions related to any other activity in Iraq.

[[Page 783]]



Sec. 575.417  [Reserved]



Sec. 575.418  Transactions incidental to a licensed transaction.

    (a) Any transaction ordinarily incident to a licensed transaction 
and necessary to give effect thereto is also authorized, except a 
transaction by an unlicensed, blocked person or involving an unlicensed 
debit to a blocked account.
    (b) Example. A license authorizing the Government of Iraq to 
complete a securities sale also authorizes all activities by other 
parties required to complete the sale, including transactions by the 
buyer, brokers, transfer agents, banks, etc.



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 575.501  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.
    (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 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.



Sec. 575.502  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. 575.503  Payments and transfers to blocked accounts in U.S. financial institutions.

    (a) Any payment of funds or transfer of credit or other assets, 
including any payment or transfer by any U.S. person outside the United 
States, to a blocked account in a U.S. financial institution located in 
the United States in the name of the Government of Iraq is hereby 
authorized, including incidental foreign exchange transactions, provided 
that such payment or transfer shall not be made from any blocked account 
if such payment or transfer represents, directly or indirectly, a 
transfer of any interest of the Government of Iraq to any other country 
or person.
    (b) This section authorizes transfer of the funds of a blocked 
demand deposit account to a blocked interest-bearing account under the 
same name or designation as was the demand deposit account, as required 
pursuant to Sec. 575.203 or at the instruction of the depositor, at any 
time. If such transfer is to a blocked account in a different U.S. 
financial institution such transfer must be made to a blocked account in 
a U.S. financial institution located in the United States, and the 
transferee financial institution must furnish within 10 business days of 
the date of transfer, the notification described in paragraph (h) of 
this section to the Office of Foreign Assets Control, Blocked Assets 
Section.
    (c) This section does not authorize any transfer from a blocked 
account

[[Page 784]]

within the United States to an account held outside the United States.
    (d) This section does not authorize any payment or transfer to any 
blocked account held in a name other than that of the Government of Iraq 
where such government is the ultimate beneficiary of such payment or 
transfer.
    (e) 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.
    (f) This section does not authorize the crediting of the proceeds of 
the sale of securities or other assets, held in a blocked account or a 
sub-account thereof, or the income derived from such securities or 
assets, 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 or assets were 
or are held.
    (g) This section does not authorize any payment or transfer from a 
blocked account in a U.S. financial institution 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. 575.503: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers.

[56 FR 2113, Jan. 18, 1991, as amended at 56 FR 5636, Feb. 11, 1991; 58 
FR 47646, Sept. 10, 1993; 62 FR 45109, Aug. 25, 1997]



Sec. 575.504  [Reserved]



Sec. 575.505  Completion of certain transactions related to bankers acceptances authorized.

    (a) Persons other than the Government of Iraq are authorized to buy, 
sell, and satisfy obligations with respect to bankers acceptances, and 
to pay under deferred payment undertakings, involving an interest of the 
Government of Iraq as long as the bankers acceptances were created or 
the deferred payment undertakings were incurred prior to the effective 
date.
    (b) Persons other than the Government of Iraq are authorized to buy, 
sell, and satisfy obligations with respect to bankers acceptances, and 
to pay under deferred payment undertakings, involving the importation or 
exportation of goods to or from Iraq that do not involve an interest of 
the Government of Iraq as long as the bankers acceptances or the 
deferred payment undertakings were accepted prior to the effective date.
    (c) Nothing in this section shall authorize or permit a debit to a 
blocked account. Specific licenses for the debiting of a blocked account 
may be issued on a case-by-case basis.



Sec. 575.506  Payment by the Government of Iraq 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 solely for the 
purpose of payment of obligations of the Government of Iraq 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 
the Government of Iraq must be to a blocked account in a U.S. financial 
institution.
    (c) The authorization in this section is subject to the condition 
that written notification from the U.S. financial institution or U.S. 
person transferring or receiving funds is furnished to the Office of 
Foreign Assets Control, Blocked Assets Section, within 10 business days 
from the date of transfer or receipt. The notification shall provide the 
account number, name and address of the transferor and/or transferee 
U.S. financial institution or person, and the account number, name and 
address of the person into whose account payment is made.

[[Page 785]]



Sec. 575.507  Certain exports to Iraq authorized.

    (a) All transactions ordinarily incident to the exportation of any 
item, commodity, or product from the United States to or destined for 
Iraq are authorized if:
    (1) Such exports would ordinarily be authorized under one of the 
following regulations administered by the Department of Commerce: 15 CFR 
771.6--General license BAGGAGE (accompanied and unaccompanied baggage); 
15 CFR 771.13--General license GUS (shipments to personnel and agencies 
of the U.S. Government); or,
    (2) Such exports are for the official use of the United Nations, its 
personnel and agencies (excluding its relief or developmental agencies).
    (b) All transactions related to exportation or reexportation not 
otherwise authorized in this part, are prohibited unless licensed 
pursuant to the procedures described in Sec. 575.801 by the Office of 
Foreign Assets Control.

[56 FR 2113, Jan. 18, 1991, as amended at 56 FR 5636, Feb. 11, 1991]



Sec. 575.508  Import of household and personal effects from Iraq authorized.

    The importation of household and personal effects of Iraqi origin, 
including baggage and articles for family use, of persons arriving in 
the United States directly or indirectly from Iraq is authorized. 
Articles included in such effects may be imported without limitation 
provided they were actually used by such persons or their family members 
abroad, are not intended for any other person or for sale, and are not 
otherwise prohibited from importation.



Sec. 575.509  Payments and transfers authorized for shipments of oil under contract and en route to the United States prior to the effective date.

    (a) Oil of Iraqi origin or oil in which the Government of Iraq has 
an interest may be imported into the United States only if:
    (1) Prior to the effective date, the oil was loaded for ultimate 
delivery to the United States on board a vessel in Iraq, Kuwait, or a 
third country;
    (2) The oil was imported into the United States before 11:59 p.m. 
Eastern Daylight Time, October 1, 1990; and
    (3) The bill of lading accompanying the oil was issued prior to the 
effective date.
    (b) Any payment owed or balance not paid to or for the benefit of 
the Government of Iraq prior to the effective date for oil imported 
pursuant to paragraph (a) must be paid into a blocked account in a U.S. 
financial institution.
    (c) Transactions conducted pursuant to this section must be reported 
in writing to the Office of Foreign Assets Control, Blocked Assets 
Section, no later than 10 days after the date of importation.
    Note: Transactions authorized by this provision have been completed 
prior to January 18, 1991. The text of this license is included for the 
convenience of the user.



Sec. 575.510  Payments and transfers authorized for goods and services exported to Iraq prior to the effective date.

    (a) Specific licenses may be issued on a case-by-case basis to 
permit payment involving an irrevocable letter of credit issued or 
confirmed by a U.S. bank, or a letter of credit reimbursement confirmed 
by a U.S. bank, from a blocked account or otherwise, of amounts owed to 
or for the benefit of a person with respect to goods or services 
exported prior to the effective date directly or indirectly to Iraq or 
Kuwait, or to third countries for an entity operated from Iraq or 
Kuwait, or for the benefit of the Government of Iraq, where the license 
application presents evidence satisfactory to the Office of Foreign 
Assets Control that:
    (1) The exportation occurred prior to the effective date (such 
evidence may include, e.g., the bill of lading, the air waybill, the 
purchaser's written confirmation of completed services, customs 
documents, and insurance documents); and
    (2) If delivery or performance occurred after the effective date, 
due diligence was exercised to divert delivery of the goods from Iraq 
and to effect final delivery of the goods to a non-prohibited 
destination, or to prevent performance of the services.
    (b) Specific license applications must also contain the following 
information:

[[Page 786]]

    (1) The name and address of any Iraqi broker, purchasing agent, or 
other participant in the sale of goods or services exported to Iraq; and 
an explanation of the facts and circumstances surrounding the entry into 
and execution of the transaction; and
    (2) A notarized statement by the applicant certifying that no 
ownership interest greater than five (5) percent is held by the 
Government of Iraq or an Iraqi person in the beneficiary of the letters 
of credit, or if such interest exists, the name, address and ownership 
interest of the Government of Iraq entity or Iraqi person holding such 
interest.
    (c) This section does not authorize exportation or the performance 
of services after the effective date pursuant to a contract entered into 
or partially performed prior to the effective date.
    (d) Transactions conducted under specific licenses granted pursuant 
to this section must be reported in writing to the Office of Foreign 
Assets Control, Blocked Assets Section, no later than 10 days after the 
date of payment.
    (e) Separate criteria may be applied to the issuance of licenses 
authorizing payment from an account of or held by a blocked U.S. bank 
owned or controlled by the Government of Iraq.



Sec. 575.511  Extensions or renewals authorized.

    (a) The extension or renewal, at the request of the account party, 
of a letter of credit or a standby letter of credit issued or confirmed 
by a U.S. financial institution is authorized.
    (b) Transactions conducted pursuant to this section must be reported 
to the Office of Foreign Assets Control, Blocked Assets Section, within 
10 days after completion of the transaction.



Sec. 575.512  [Reserved]



575.513  Transactions related to telecommunications authorized.

    All transactions of U.S. common carriers with respect to the receipt 
and transmission of telecommunications involving Iraq are authorized, 
provided that any payment owed to the Government of Iraq or persons in 
Iraq is paid into a blocked account in a U.S. financial institution.



Sec. 575.514  Transactions related to mail authorized.

    All transactions by U.S. persons, including payment and transfers to 
common carriers, incident to the receipt or transmission of mail between 
the United States and Iraq are authorized, provided that mail is limited 
to personal communications not involving a transfer of anything of value 
and not exceeding 12 ounces.



Secs. 575.515-575.516  [Reserved]



Sec. 575.517  Procedures established for export transactions initiated prior to effective date.

    Goods awaiting exportation to Iraq on the effective date and seized 
or detained by the U.S. Customs Service on the effective date or 
thereafter may be released to the exporter, provided the following 
documents are filed with Customs officials at the port where such goods 
are located:
    (a) A copy of the contract governing the exportation (sale or other 
transfer) of the goods to Iraq or, if no contract exists, a written 
explanation of the circumstances of exportation, including in either 
case a description of the manner and terms of payment received or to be 
received by the exporter (or other person) for, or by reason of, the 
exportation of the goods;
    (b) An invoice, bill of lading, or other documentation fully 
describing the goods; and
    (c) A statement by the exporter substantially in the following form:

    Any amount received from or on behalf of the Government of Iraq by 
reason of the attempted exportation of the goods released to [name of 
exporter] by the U.S. Customs Service on [date], and fully described in 
the attached documents, has been or will be placed into a blocked 
account in a U.S. bank and the Office of Foreign Assets Control, Blocked 
Assets Section, will be immediately notified. [Name of exporter] agrees 
to fully indemnify the U.S. Government for any amount ultimately 
determined by a court of competent jurisdiction to be due or payable to 
or for the benefit of any person by reason of the failure of [name of 
exporter] to properly pay into a blocked account any amount received for 
the goods from or on behalf of the Government of Iraq. [Name of 
exporter] also agrees to

[[Page 787]]

waive all claims (1) against any payments received and placed into a 
blocked account, except as may be later authorized by law, regulations, 
or license, and (2) against the U.S. Government with regard to the 
disposition of the amounts placed into a blocked account.


The statement should be dated and signed by the exporter or by a person 
authorized to sign on the exporter's behalf. The Customs Service may 
release the goods to the exporter upon receipt of the documentation and 
statement described above, provided it is satisfied that all customs 
laws and regulations have been complied with, including the execution of 
such hold harmless assurances as it shall determine to be appropriate. 
The documentation and statement received by Customs will be forwarded to 
the Office of Foreign Assets Control for review and appropriate action.



Sec. 575.518  Certain standby letters of credit and performance bonds.

    (a) Notwithstanding any other provision of law, payment into a 
blocked account in a U.S. financial institution by an issuing or 
confirming bank under a standby letter of credit in favor of a 
beneficiary that is the Government of Iraq or a person in Iraq is 
prohibited by Sec. 575.201 and not authorized, notwithstanding the 
provisions of Sec. 575.503, if:
    (1) The account party is a U.S. person; and
    (2)(i) A specific license has been issued pursuant to the provisions 
of paragraph (b) of this section, or
    (ii) 10 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 such a standby letter of credit, it shall promptly 
notify the account party. The account party 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 Iraqi 
beneficiary 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. Nothing in this section 
relieves any such bank or such account party from giving any notice of 
defense against payment or reimbursement that is required by applicable 
law.
    (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 account party 
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) 10 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 Director of the Office of Foreign Assets Control 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 
U.S. financial institution or the supplying of any form of security 
deemed necessary.
    (e) Nothing in this section precludes the account party on any 
standby letter of credit or any other person from at any time contesting 
the legality of the demand from an Iraqi beneficiary 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 to the instruments covered by this section if the instruments 
and payments thereunder are subsequently unblocked.
    (g) The section does not authorize any U.S. person to reimburse a 
non-U.S. bank for payment to a Iraqi beneficiary under a standby letter 
of credit, except by payments into a blocked account in accordance with 
Sec. 575.503 or paragraph (b) or (c) of this section.
    (h) A person receiving a specific license under paragraph (b) or (c) 
of this section shall certify to the Office of Foreign Assets Control 
within 5 business days after receipt of that license that it has 
established the blocked account on its books as provided in those 
paragraphs. However, in appropriate

[[Page 788]]

cases, this time period 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.
    (i) For the purposes of this section:
    (1) The term standby letter of credit shall mean a letter of credit 
securing performance of, or repayment of, any advance payments or 
deposits under a contract, or any similar obligation in the nature of a 
performance bond;
    (2) The term account party shall mean the person for whose account 
the standby letter of credit is opened; and
    (3) The term Iraqi beneficiary shall mean a beneficiary that is
    (i) A person in Iraq,
    (ii) An entity operated from Iraq, or
    (iii) The Government of Iraq.



Sec. 575.519  Certain imports for diplomatic or official personnel authorized.

    All transactions ordinarily incident to the importation of any goods 
or services into the United States destined for official or personal use 
by personnel employed by the diplomatic missions of the Government of 
Iraq to the United States and to international organizations located in 
the United States are authorized, not for resale, and unless the 
importation is otherwise prohibited by law.



Sec. 575.520  Donations of food to relieve human suffering authorized.

    (a) Specific licenses may be issued on a case-by-case basis to 
permit exportation to Iraq of donated food intended to relieve human 
suffering.
    (b) In general, specific licenses will only be granted for donations 
of food to be provided through the United Nations in accordance with 
United Nations Security Council Resolutions 661 and 666 and in 
cooperation with the International Committee of the Red Cross or other 
appropriate humanitarian agencies for distribution by them or under 
their supervision, or in such other manner as may be approved under 
United Nations Security Council Resolution 666 and any other applicable 
Security Council resolutions, in order to ensure that such donations 
reach the intended beneficiaries.
    (c) Applications for specific licenses pursuant to paragraph (a) of 
this section shall be made in advance of the proposed exportation, and 
provide the following information:
    (1) The nature, quantity, value, and intended use of the donated 
food; and
    (2) The terms and conditions of distribution, including the intended 
method of compliance with such terms and conditions of distribution as 
may have been adopted by the United Nations Security Council or a duly 
authorized body subordinate thereto to govern the shipment of foodstuffs 
under applicable United Nations Security Council resolutions, including 
Resolutions 661 and 666.



Sec. 575.521  Donations of medical supplies authorized.

    (a) Specific licenses may be issued on a case-by-case basis to 
permit exportation to Iraq of donated supplies intended strictly for 
medical purposes, in accordance with the provisions of United Nations 
Security Council Resolutions 661 and 666 and other applicable Security 
Council resolutions.
    (b) In general, specific licenses will only be granted for the 
exportation of medical supplies through the International Committee of 
the Red Cross or other appropriate humanitarian agencies for 
distribution by them or under their supervision, or in such other manner 
as may be approved under applicable Security Council resolutions, in 
order to ensure that such supplies reach the intended recipient.
    (c) Applications for specific licenses pursuant to paragraph (a) 
shall be made in advance of the proposed exportation, and provide the 
following information:
    (1) The nature, quantity, value, and intended use of the medical 
supplies;
    (2) The terms and conditions of distribution, including the intended 
method of compliance with such terms and conditions of distribution as 
may have been adopted by the United Nations Security Council or a duly 
authorized body subordinate thereto to govern the shipment of medical 
supplies under applicable Security Council resolutions.

[[Page 789]]



Sec. 575.522  Executory contracts with the Government of Iraq for trade in petroleum, pipeline parts and equipment, humanitarian goods, and oil field equipment 
          authorized.

    (a) United States persons are authorized to enter into executory 
contracts with the Government of Iraq for the following transactions, 
the performance of which (including any preparatory activities, payments 
or deposits related to such executory contracts) is contingent upon the 
prior authorization of the Office of Foreign Assets Control in or 
pursuant to this part:
    (1) The purchase and exportation from Iraq of Iraqi-origin petroleum 
and petroleum products;
    (2) The sale and exportation to Iraq of parts and equipment that are 
essential for the safe operation of the Kirkuk-Yumurtalik pipeline 
system in Iraq;
    (3) The sale and exportation to Iraq of medicines, health supplies, 
foodstuffs, and materials and supplies for essential civilian needs; and
    (4) The sale and exportation to Iraq of oilfield parts and equipment 
to the extent necessary to enable Iraq to export petroleum and petroleum 
products in accordance with United Nations Security Council Resolutions 
No. 1153 and 1175 and other relevant UNSC Resolutions.
    (b) United States persons are authorized to enter into executory 
contracts for the trading, importation, exportation, or other dealings 
in or related to Iraqi-origin petroleum and petroleum products outside 
Iraq, the performance of which is contingent upon the prior 
authorization of the Office of Foreign Assets Control in or pursuant to 
this part.
    (c) The authorization contained in paragraphs (a) and (b) of this 
section applies only to executory contracts meeting both of the 
following conditions:
    (1) The executory contracts, including all related financing, 
insurance, transportation, delivery, and other incidental contracts, are 
consistent with all requirements of UNSC Resolution 986, other 
applicable Security Council resolutions, the May 20, 1996 Memorandum of 
Understanding Between the Secretariat of the United Nations and the 
Government of Iraq on the Implementation of Security Council Resolution 
986 (1995), and applicable guidance issued by the 661 Committee; and
    (2) The executory contracts make any performance involving the 
exportation, reexportation, transfer or supply of any goods, technology 
or services that are subject to license application requirements of 
another Federal agency contingent upon the prior authorization of that 
agency. See Sec. 575.101(b).
    (d) Nothing in this section authorizes any transaction related to a 
United States person's travel to Iraq or activity within Iraq, or any 
debit to an account blocked pursuant to this part.
    (e) Note: U.S. passports must be validated by the U.S. Department of 
State for travel to Iraq.
    (f) Attention is drawn to the recordkeeping and retention 
requirements of Sec. 575.601.

[61 FR 36628, July 12, 1996, as amended at 61 FR 65313, Dec. 11, 1996; 
63 FR 62942, Nov. 10, 1998]



Sec. 575.523  Certain transactions in Iraqi petroleum and petroleum products.

    (a) Specific licenses may be issued on a case-by-case basis to 
permit United States persons to purchase Iraqi-origin petroleum or 
petroleum products from the Government of Iraq in accordance with the 
provisions of UNSC Resolution 986, other relevant Security Council 
resolutions, the Memorandum of Understanding, and other guidance issued 
by the 661 Committee. Licensees will be included on the U.S. oil 
purchaser list to be provided to the 661 Committee, authorizing such 
U.S. persons to seek approval from the 661 Committee or its designee for 
the purchase of Iraqi-origin petroleum or petroleum products. Licensees 
are authorized to perform a contract approved by the 661 Committee or 
its designee in accordance with its terms.
    (b) Applications for specific licenses pursuant to this section 
shall provide the following information:
    (1) The applicant's full legal name;
    (2) The applicant's mailing and street addresses;
    (3) The name of the individual(s) responsible for the license 
application and related commercial transactions

[[Page 790]]

and the individual's telephone and facsimile numbers;
    (4) If the applicant is a business entity, the state or jurisdiction 
of incorporation and principal place of business;
    (5) Written certification that the applicant has entered into an 
executory contract for the purchase of Iraqi-origin petroleum or 
petroleum products with the Government of Iraq, that the contract 
accords with normal arms-length commercial practice, and that the 
applicant is familiar with this part, particularly Secs. 575.601 and 
575.602, and will make the executory contract and other documents 
related to the purchase of Iraqi-origin petroleum or petroleum products 
available to the Office of Foreign Assets Control in accordance with the 
requirements of this part; and
    (6) Written certification that the applicant understands that 
issuance of a license pursuant to this section does not authorize a 
licensee to provide goods, services, or compensation of any kind to the 
Government of Iraq other than that specifically provided in contracts 
entered into by the applicant and the Government of Iraq and submitted 
to and approved by the 661 Committee or its designee.
    (c) Applications for specific licenses pursuant to this section 
shall be submitted to the Licensing Division, Office of Foreign Assets 
Control, U.S. Treasury Department, 1500 Pennsylvania Avenue, NW.--Annex, 
Washington, DC 20220.
    (d) Contracts may be performed only as specifically authorized 
pursuant to this section unless additional authorization is granted or 
obtained pursuant to this part for any amendment or modification.
    (e) This section does not authorize any transfer of funds or other 
financial or economic resources to or for the benefit of the Government 
of Iraq or a person in Iraq except transfers to the 986 Escrow Account.
    (f) Attention is drawn to Sec. 575.418 regarding authorization for 
transactions ordinarily incident to a licensed transaction.

[61 FR 65313, Dec. 11, 1996]



Sec. 575.524  Exportation of pipeline parts and equipment.

    (a) Specific licenses may be issued to U.S. persons on a case-by-
case basis to permit the sale and exportation to Iraq of pipeline parts 
and equipment essential for the safe operation of the Kirkuk-Yumurtalik 
pipeline system in Iraq, in accordance with the provisions of UNSC 
Resolution 986, other applicable Security Council resolutions, the 
Memorandum of Understanding, and applicable guidance issued by the 661 
Committee.
    (b) Applications for specific licenses pursuant to this section 
shall be made in advance of the proposed sale and exportation, and 
provide the following information:
    (1) Identification of the applicant, including:
    (i) Applicant's full legal name;
    (ii) Applicant's mailing and street addresses;
    (iii) The name of the individual(s) responsible for the application 
and related commercial transactions and the individual's telephone and 
facsimile numbers; and
    (iv) If the applicant is a business entity, the state or 
jurisdiction of incorporation and principal place of business;
    (2) The name and address of all parties involved in the transactions 
and their role, including financial institutions and any Iraqi broker, 
purchasing agent, or other participant in the purchase of the pipeline 
parts or equipment;
    (3) The nature, quantity, value and intended use of the pipeline 
parts and equipment;
    (4) The intended point(s) of entry into Iraq, proposed dates of 
entry and delivery, and the final destination in Iraq of the pipeline 
parts and equipment;
    (5) A copy of the concluded contract with the Government of Iraq and 
other relevant documentation, all of which must comply with the 
provisions of UNSC Resolution 986, other applicable Security Council 
resolutions, the Memorandum of Understanding, and applicable guidance 
issued by the 661 Committee; and
    (6) A statement that the applicant is familiar with the requirements 
of the

[[Page 791]]

above-referenced documents, particularly Memorandum of Understanding 
paragraph 24 and Guidelines paragraphs 35 and 45, and will conform the 
letter of credit and related financing documents to their terms.
    (c) Applications for specific licenses pursuant to this section 
shall be submitted to the Licensing Division, Office of Foreign Assets 
Control, U.S. Treasury Department, 1500 Pennsylvania Avenue, NW.--Annex, 
Washington, DC 20220.
    (d) Attention is drawn to Sec. 575.418 regarding authorization for 
transactions ordinarily incident to a transaction licensed by OFAC. 
Transactions of a U.S. person that are incidental to a third-country 
national's activities pursuant to UNSC Resolution 986 require specific 
OFAC licensing. Licensing requirements for the reexportation of goods 
subject to U.S. jurisdiction are addressed in Sec. 575.205.
    (e) Contracts may be performed only pursuant to the terms submitted 
to OFAC when specifically authorized pursuant to this section unless 
additional authorization is granted or obtained pursuant to this part 
for any amendment or modification of such contracts.
    (f) Payment for goods exported pursuant to this section may be 
obtained only from the 986 Escrow Account, and must conform to the 
requirements of UNSC Resolution 986, other applicable Security Council 
resolutions, the Memorandum of Understanding, and applicable guidance 
issued by the 661 Committee.
    (g) Attention is drawn to Sec. 575.101 regarding compliance with 
other applicable laws and regulations. No license or authorization 
contained in or issued pursuant to this part shall be deemed to 
authorize the exportation, reexportation or retransfer of goods, 
technology, or services that are subject to unmet export license 
application requirements of another agency of the United States 
Government.

[61 FR 65314, Dec. 11, 1996]



Sec. 575.525  Exportation of humanitarian aid.

    (a) Specific licenses may be issued to U.S. persons on a case-by-
case basis to permit the sale and exportation to Iraq of medicine, 
health supplies, foodstuffs, and materials and supplies for essential 
civilian needs of the Iraqi population (``Humanitarian Aid''), in 
accordance with the provisions of UNSC Resolution 986, other applicable 
Security Council resolutions, the Memorandum of Understanding, and 
applicable guidance issued by the 661 Committee.
    (b) Applications for specific licenses pursuant to this section 
shall be made in advance of the proposed sale and exportation, and 
provide the following information:
    (1) Identification of the applicant, including:
    (i) Applicant's full legal name;
    (ii) Applicant's mailing and street addresses;
    (iii) The name of the individual(s) responsible for the application 
and related commercial transactions and the individual's telephone and 
facsimile numbers; and
    (iv) If the applicant is a business entity, the state or 
jurisdiction of incorporation and principal place of business.
    (2) The name and address of all parties involved in the transactions 
and their role, including financial institutions and any Iraqi broker, 
purchasing agent, or other participant in the purchase of the 
Humanitarian Aid;
    (3) The nature, quantity, value and the intended use of the 
Humanitarian Aid;
    (4) The intended point(s) of entry into Iraq, proposed dates of 
entry and delivery, and the final destination in Iraq of the 
Humanitarian Aid;
    (5) A copy of the concluded contract with the Government of Iraq or 
the United Nations Inter-Agency Humanitarian Programme and other 
relevant documentation, all of which must comply with the provisions of 
UNSC Resolution 986, other applicable Security Council resolutions, the 
Memorandum of Understanding, and applicable guidance issued by the 661 
Committee; and
    (6) A statement that the applicant is familiar with the requirements 
of UNSC Resolution 986, other applicable Security Council resolutions, 
the Memorandum of Understanding, and applicable guidance issued by the 
661 Committee, particularly Memorandum of Understanding paragraph 24 and

[[Page 792]]

Guidelines paragraphs 35 and 45, and will conform the letter of credit 
and related financing documents to their terms.
    (c) Applications for specific licenses pursuant to this section 
shall be submitted to the Licensing Division, Office of Foreign Assets 
Control, U.S. Treasury Department, 1500 Pennsylvania Avenue, NW.--Annex, 
Washington, DC 20220.
    (d) Attention is drawn to Sec. 575.418 regarding authorization for 
transactions ordinarily incident to a transaction licensed by OFAC. 
Transactions of a U.S. person that are incidental to a third-country 
national's activities pursuant to UNSC Resolution 986 require specific 
OFAC licensing. Licensing requirements for the reexportation of goods 
subject to U.S. jurisdiction are addressed in Sec. 575.205.
    (e) Contracts may be performed only pursuant to the terms submitted 
to OFAC when specifically authorized pursuant to this section unless 
additional authorization is granted or obtained pursuant to this part 
for any amendment or modification of such contracts.
    (f) Payment for goods exported pursuant to this section may be 
obtained only from the 986 Escrow Account and must conform to the 
requirements of UNSC Resolution 986, other applicable Security Council 
resolutions, the Memorandum of Understanding, and applicable guidance 
issued by the 661 Committee.
    (g) Attention is drawn to Sec. 575.101 regarding compliance with 
other applicable laws and regulations. No license or authorization 
contained in or issued pursuant to this part shall be deemed to 
authorize the exportation, reexportation or retransfer of goods, 
technology, or services that are subject to unmet export license 
application requirements of another agency of the United States 
Government.

[61 FR 65314, Dec. 11, 1996]



Sec. 575.526  Dealings in and importation of certain Iraqi-origin petroleum and petroleum products authorized.

    (a) United States persons are authorized to deal in, and to import 
into the United States, Iraqi-origin petroleum and petroleum products, 
the purchase and exportation from Iraq of which have been authorized by 
the 661 Committee or its designee and, if otherwise required pursuant to 
this part, by the Office of Foreign Assets Control.
    (b) This section does not authorize any transfer of funds or other 
financial or economic resources to or for the benefit of the Government 
of Iraq or a person in Iraq except transfers to the 986 Escrow Account.
    (c) Attention is drawn to Sec. 575.418 regarding authorization for 
transactions ordinarily incident to a licensed transaction.

[61 FR 65315, Dec. 11, 1996]



                           Subpart F--Reports



Sec. 575.601  Records and reports.

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

[62 FR 45109, Aug. 25, 1997]



                          Subpart G--Penalties



Sec. 575.701  Penalties.

    (a) Section 580E of the Iraq Sanctions Act of 1990 (Public Law 101-
513, 104 Stat. 2049), as adjusted by the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 
2461 note), provides that, notwithstanding section 206 of the 
International Emergency Economic Powers Act (50 U.S.C. 1705) and section 
5(b) of the United Nations Participation Act of 1945 (22 U.S.C. 
287c(b)):
    (1) A civil penalty of not to exceed $275,000 per violation may be 
imposed on any person who, after the enactment of this Act, violates or 
evades or attempts to violate or evade Executive Order Number 12722, 
12723, 12724, or 12725, or any license, order, or regulation issued 
under any such Executive Order;
    (2) Whoever after the date of enactment of this Act willfully 
violates or evades or attempts to violate or evade Executive Order 
Number 12722, 12723, 12724, or 12725 or any license, order, or 
regulation issued under any such Executive Order--
    (i) Shall, upon conviction, be fined not more than $1,000,000 if a 
person other than a natural person; or

[[Page 793]]

    (ii) If a natural person, shall, upon conviction, be fined not more 
than $1,000,000, be imprisoned for not more than 12 years, or both.
    (3) Any officer, director, or agent of any corporation who knowingly 
participates in a violation, evasion, or attempt described in paragraph 
(a)(2) of this section may be punished by imposition of the fine, 
imprisonment (or both) specified in paragraph (a)(2)(ii) of this 
section.
    (b) The criminal penalties provided in the Iraq Sanctions Act are 
subject to increase pursuant to 18 U.S.C. 3571.
    (c) Attention is directed to the United Nations Participation Act, 
22 U.S.C. 287c(b), which provides that any person who willfully violates 
or evades or attempts to violate or evade any order, rule, or regulation 
issued by the President pursuant to the authority granted in that 
section shall, upon conviction, be fined not more than $10,000 or, if a 
natural person, be imprisoned for not more than ten years, or both; and 
the officer, director or agent of any corporation who knowingly 
participates in such violation or evasion shall be punished by a similar 
fine, imprisonment or both, and any property, funds, securities, papers, 
or other articles or documents, or any vessel, together with tackle, 
apparel, furniture, and equipment, or vehicle, or aircraft, concerned in 
such violation shall be forfeited to the United States. The criminal 
penalties provided in the United Nations Participation Act are subject 
to increase pursuant to 18 U.S.C. 3571.
    (d) 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.
    (e) 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.
    (f) Violations of this part may also be subject to relevant 
provisions of the Customs laws and other applicable laws.

[56 FR 2113, Jan. 18, 1991, as amended at 61 FR 43461, Aug. 23, 1996; 61 
FR 54939, Oct. 23, 1996; 62 FR 45109, Aug. 25, 1997]



Sec. 575.702  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 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 make presentations. The prepenalty notice also shall 
inform the person of his right to make a written presentation within 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.

[[Page 794]]



Sec. 575.703  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 
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.



Sec. 575.704  Penalty notice.

    (a) No violation. If, after considering and presentations made in 
response to the prepenalty notice and any relevant facts, 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 the 
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.



Sec. 575.705  Referral to United States Department of Justice.

    In the event that the person named does not pay the penalty imposed 
pursuant to this subpart or make payment arrangements acceptable to the 
Director within 30 days of the mailing of the written notice of the 
imposition of the penalty, the matter shall be referred 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. 575.801  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 
subpart D of part 501 of this chapter.

[62 FR 45109, Aug. 25, 1997]



Sec. 575.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to Executive Order No. 12723 and Executive Order No. 12725 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.

[56 FR 2113, Jan. 18, 1991. Redesignated at 62 FR 45109, Aug. 25, 1997]



                   Subpart I--Paperwork Reduction Act



Sec. 575.901  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 45110, Aug. 25, 1997]



     PART 585--FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND MONTENEGRO) AND BOSNIAN SERB-CONTROLLED AREAS OF THE REPUBLIC OF BOSNIA AND HERZEGOVINA SANCTIONS 
REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

[[Page 795]]

                         Subpart B--Prohibitions

585.201  Prohibited transactions involving blocked property; 
          transactions with respect to securities.
585.202  Effect of transfers violating the provisions of this part.
585.203  Holding of certain types of blocked property in interest-
          bearing accounts.
585.204  Prohibited importation of goods or services from the FRY (S&M).
585.205  Prohibited exportation and reexportation of goods, technology, 
          or services to the FRY (S&M).
585.206  Prohibited dealing in property.
585.207  Prohibited transportation-related transactions involving the 
          FRY (S&M).
585.208  Prohibited overflights, takeoffs and landings of aircraft en 
          route to or from the FRY (S&M).
585.209  Prohibited performance of contracts.
585.210  Prohibited transfers of funds to or for the benefit of the 
          Government of the FRY (S&M) or any person in the FRY (S&M).
585.211  Prohibited transactions related to participation in sporting 
          events.
585.212  Prohibited transactions related to scientific and technical 
          cooperation, cultural exchanges, and other official visits.
585.213  Exemption of activities related to certain international 
          organizations.
585.214  Evasions; attempts; conspiracies.
585.215  Conveyances and cargo suspected of being in violation of United 
          Nations sanctions; detention; blocking.
585.216  Expenses of maintaining blocked property; liquidation into 
          blocked account.
585.217  Entry into the territorial waters of the FRY (S&M) or the 
          riverine ports of the Republic of Bosnia and Herzegovina 
          prohibited.
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.

                     Subpart C--General Definitions

585.301  Effective date.
585.302  Blocked account; blocked property.
585.303  Interest.
585.304  Property; property interest.
585.305  Transfer.
585.306  License.
585.307  General license.
585.308  Specific license.
585.309  Person.
585.310  Entity.
585.311  Government of the FRY (S&M).
585.312  Govenment of the Socialist Federal Republic of Yugoslavia.
585.313  Federal Republic of Yugoslavia (Serbia and Montenegro); FRY 
          (S&M).
585.314  Goods and services originating in the FRY (S&M).
585.315  Person in the FRY (S&M).
585.316  United States.
585.317  United States person; U.S. person.
585.318  U.S. financial institution.
585.319  UNSC Resolution 757.

                       Subpart D--Interpretations

585.401  Reference to amended sections.
585.402  Effect of amendment.
585.403  Termination and acquisition of an interest in blocked property.
585.404  Payments from blocked accounts to U.S. exporters and for other 
          obligations prohibited.
585.405  Acquisition of instruments including bankers acceptances.
585.406  Extensions of credits or loans.
585.407  Payments in connection with certain authorized transactions.
585.408  Offshore transactions.
585.409  Transshipments through the United States prohibited.
585.410  Imports from third countries of goods originating in the FRY 
          (S&M); transshipments.
585.411  Exports to third countries; transshipments.
585.412  Release of goods originating in the FRY (S&M) from a bonded 
          warehouse or foreign trade zone.
585.413  Imports of goods orginating in the FRY (S&M), and purchases of 
          goods from the FRY (S&M).
585.414  Services performed in the Federal Republic of Yugoslavia 
          (Serbia and Montenegro) or by the Government of the FRY (S&M).
585.415  Setoffs prohibited.
585.416  Exportation of services; performance of service contracts; 
          legal services.
585.417  Transactions incidental to a licensed transaction.
585.418  Vessels of the Federal Republic of Yugoslavia (Serbia and 
          Montenegro).
585.419  Effect of E.O. 12846 on outstanding licenses and 
          authorizations.
585.420  Prohibited transfer of funds involving those areas of the 
          Republic of Bosnia and Herzegovina under the control of 
          Bosnian Serb forces.

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

585.501  Effect of license or authorization.
585.502  Exclusion from licenses and authorizations.
585.503  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
585.504  Investment and reinvestment of certain funds.
585.505  Completion of certain transactions related to bankers 
          acceptances authorized.
585.506  Payments of obligations to persons within the United States 
          authorized.

[[Page 796]]

585.507  Certain exportations to the FRY (S&M) authorized.
585.508  Importation of household and personal effects from the FRY 
          (S&M) authorized.
585.509  Trading in certain pre-sanctions obligations of debtors in the 
          Republics of Slovenia, Croatia, Bosnia-Hercegovina, and 
          Macedonia authorized.
585.510  Payments and transfers authorized for goods and services 
          exported to the FRY (S&M) prior to the effective date.
585.511  Extensions or renewals of letters of credit authorized.
585.512  Transactions relating to travel to or within the FRY (S&M).
585.513  Transactions related to telecommunications authorized.
585.514  Transactions related to mail authorized.
585.515  Certain transactions related to patents, trademarks and 
          copyrights authorized.
585.516  Procedures established for export transactions initiated prior 
          to the effective date.
585.517  Exportation of certain legal services to the Government of, or 
          persons in, the FRY (S&M).
585.518  Certain standby letters of credit and performance bonds.
585.519  Certain imports for diplomatic or official personnel 
          authorized.
585.520  Entries in certain accounts for normal service charges 
          authorized.
585.521  Donations of food to relieve human suffering authorized.
585.522  Donations of medical supplies authorized.
585.523  Certain transactions for the benefit of individuals in the FRY 
          (S&M) authorized.
585.524  Humanitarian aid and trade in United Nations Protected Areas of 
          Croatia and those areas of the Republic of Bosnia and 
          Herzegovina controlled by Bosnian Serb forces.
585.525  Authorization of certain new transactions with respect to the 
          FRY (S&M).
585.526  Authorization for release of certain blocked transfers by U.S. 
          financial institutions.
585.527  Authorization of certain new transactions with respect to the 
          Bosnian Serbs.
585.528  Unblocking of certain vessels and accounts.

                           Subpart F--Reports

585.601  Records and reports.

                          Subpart G--Penalties

585.701  Penalties.
585.702  Prepenalty notice.
585.703  Presentation responding to prepenalty notice.
585.704  Penalty notice.
585.705  Referral to United States Department of Justice.

                          Subpart H--Procedures

585.801  Procedures.
585.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

585.901  Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 31 U.S.C. 321(b); 49 U.S.C. 
40106; 50 U.S.C. 1601-1651, 1701-1706; Pub.L. 101-410, 104 Stat 890 (28 
U.S.C. 2461 note); 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, 3 CFR, 1994 Comp., p. 930.

    Source: 58 FR 13201, Mar. 10, 1993, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 585.101  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.

[58 FR 13201, Mar. 10, 1993, as amended at 62 FR 45110, Aug. 25, 1997]

[[Page 797]]



                         Subpart B--Prohibitions



Sec. 585.201  Prohibited transactions involving blocked property; transactions with respect to securities.

    (a) Except as authorized by regulations, orders, directives, 
rulings, instructions, licenses, or otherwise, 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. Eastern Daylight Time (``EDT''), May 
30, 1992, no property or interest in property of the Government of the 
FRY (S&M), or that is held in the name of the Federal Republic of 
Yugoslavia or the former Government of the Socialist Federal Republic of 
Yugoslavia, 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 U.S. persons, including their overseas branches, may be 
transferred, paid, exported, withdrawn or otherwise dealt in.
    (b) 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 12:01 a.m. EDT, April 26, 1993, no property or 
interest in property of any commercial, industrial, or public utility 
undertakings or entities organized or located in the Federal Republic of 
Yugoslavia (Serbia and Montenegro), including, without limitation, the 
property and all interests in property of entities (wherever organized 
or located) owned or controlled by such undertakings or entities, 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 United 
States persons, including their overseas branches, may be transferred, 
paid, exported, withdrawn or otherwise dealt in.
    (c) Except as otherwise authorized, and notwithstanding the 
existence of any rights or obligations conferred or imposed by any 
international agreementor any contract entered into or any licence 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 HErzegovona 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.
    Note to Sec. 585.201(c): Please refer to the appendices at the end 
of this chapter for listings of persons designated pursuant to this 
section. 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.
    (d) 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), the endorsement 
or guaranty of signatures on, or any other dealing in any security (or 
evidence thereof) registered or inscribed in the name of the Government 
of the Federal Republic of Yugoslavia or the former Government of the 
Socialist Federal Republic of Yugoslavia and held within the possession 
or control of a U.S. person is prohibited, irrespective of the fact that 
at any time either at or subsequent to the effective date the registered 
or inscribed owner thereof may have, or appears to have, assigned, 
transferred, or

[[Page 798]]

otherwise disposed of any such security.
    (e) 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.

[58 FR 13201, Mar. 10, 1993, as amended at 58 FR 35828, July 1, 1993; 60 
FR 34145, June 30, 1995; 61 FR 32938, June 26, 1996; 62 FR 45110, Aug. 
25, 1997]



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, licance, 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 privilige 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 
tranfer 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, the 
United Nations Participation 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) 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; 
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. The filing of a report in 
accordance with the provisions of this paragraph shall not be deemed 
evidence that the terms of paragraphs (d) (1) and (2) of this section 
have been satisfied.
    (e) Unless licenced or authorized pursuant to this part, any 
attachment, judgement, decree, lien, execution, garnishment, or other 
judicial process is

[[Page 799]]

null and void with respect to any property or interest in property 
blocked pursuant to Sec. 585.201.

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34145, June 30, 1995]



Sec. 585.203  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. 585.201, which, as of July 15, 1992, or 
the date of receipt if subsequent to July 15, 1992, is not being held in 
an interest-bearing account or otherwise invested in a manner authorized 
by the Office of Foreign Assets Control, 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 July 15, 1992, or the date of receipt if subsequent to 
July 15, 1992, 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 person(s) having an 
interest in the accounts. If the account is held in the name of the 
Government of the Federal Republic of Yugoslavia or the former 
Government of the Socialist Federal Republic of Yugoslavia, 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, i.e., a rate similar to that currently 
offered other depositors on deposits of comparable size and maturity. 
Overnight investment of blocked funds is authorized, provided that the 
funds remain within the possession and control of the U.S. person 
holding the funds and that the funds remain in a blocked status at all 
times. Except as otherwise authorized, the funds may not be re-invested 
or held in instruments the maturity of which exceeds 90 days.
    (c) 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. The notification shall include a photocopy of the payment or 
transfer instructions received, shall confirm that the payment or 
transfer has been deposited into an existing or newly-established 
blocked account, and shall provide the account number, the name of the 
account, the location of the account, the name and address of the 
transferor and transferee financial instructions, the date of the 
deposit and the amount of the payment or transfer.
    (d) 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.

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34145, June 30, 1995]



Sec. 585.204  Prohibited importation of goods or services from the FRY (S&M).

    Except as otherwise authorized, no goods originating in, or services 
performed in, the FRY (S&M), exported from the FRY (S&M) after May 30, 
1992, may be imported into the United States, nor may any U.S. person 
engage in any activity that promotes or is intended to promote such 
importation.

[[Page 800]]



Sec. 585.205  Prohibited exportation and reexportation of goods, technology, or services to the FRY (S&M).

    Except as otherwise authorized, no goods, technology (including 
technical data or other information controlled for export pursuant to 
the Export Administration Regulations, 15 CFR parts 768-799), or 
services, either (a) from the United States, (b) requiring the issuance 
of a license by a Federal agency, or (c) involving the use of U.S.-
registered vessels or aircraft, may be exported, directly or indirectly, 
to the FRY (S&M), or to any entity operated from the FRY (S&M), or owned 
or controlled by the Government of the FRY (S&M), nor may any U.S. 
person engage in any activity that promotes or is intended to promote 
such exportation.



Sec. 585.206  Prohibited dealing in property.

    Except as otherwise authorized, no U.S. person may deal in:
    (a) Property originating in the FRY (S&M) and exported from the FRY 
(S&M) after May 30, 1992, or
    (b) Property intended for exportation from the FRY (S&M) to any 
country, or for exportation to the FRY (S&M) from any country, or
    (c) Property being transshipped through the FRY (S&M), or in any 
activity of any kind that promotes or is intended to promote such 
dealing.



Sec. 585.207  Prohibited transportation-related transactions involving the FRY (S&M).

    Except as otherwise authorized, the following are prohibited:
    (a) Any transaction by a U.S. person, or involving the use of U.S. 
registered vessels and aircraft, relating to transportation to or from 
the FRY (S&M);
    (b) The provision of transportation to or from the United States by:
    (1) Any person in the FRY (S&M) or
    (2) Any vessel or aircraft registered in the FRY (S&M), or
    (3) Any vessel in which a majority or controlling interest is held 
by a person or entity in or operating from the FRY (S&M), regardless of 
registry; or
    (c) The sale in the United States by any person holding authority 
under the Federal Aviation Act of 1958, as amended (49 U.S.C. 1301 et 
seq.) of any transportation by air that includes any stop in the FRY 
(S&M).
    (d) Example. Unless licensed or exempted, no U.S. person may insure, 
or provide ticketing, ground, port, refueling, bunkering, clearance, or 
freight forwarding services with respect to,
    (i) Any sea or air transportation the destination of which is the 
FRY (S&M), or which is intended to make a stop in the FRY (S&M), or
    (ii) Any vessel in which a majority or controlling interest is held 
by a person or entity in or operating from the FRY (S&M).



Sec. 585.208  Prohibited overflights, takeoffs and landings of aircraft en route to or from the FRY (S&M).

    Except as otherwise authorized, no aircraft, regardless of registry, 
may take off from, land in, or overfly the United States, if the 
aircraft, as part of the same flight or as a continuation of that 
flight, is destined to land in or has taken off from the territory of 
the FRY (S&M). See also: Special Federal Aviation Regulation (SFAR) No. 
66, 14 CFR part 91.



Sec. 585.209  Prohibited performance of contracts.

    Except as otherwise authorized, no U.S. person may perform any 
contract, including a financing contract, in support of an industrial, 
commercial, public utility, or governmental project in the FRY (S&M).



Sec. 585.210  Prohibited transfer of funds to or for the benefit of the Government of the FRY (S&M) or any person in the FRY (S&M).

    Except as otherwise authorized, no U.S. person may commit or 
transfer, directly or indirectly, funds or other financial or economic 
resources to or for the benefit of the Government of the FRY (S&M) or 
any person in the FRY (S&M).



Sec. 585.211  Prohibited transactions related to participation in sporting events.

    Except as otherwise authorized, transactions in the United States or 
by a U.S. person related to participation in sporting events in the 
United States

[[Page 801]]

by persons or groups representing the FRY (S&M) are prohibited.



Sec. 585.212  Prohibited transactions related to scientific and technical cooperation, cultural exchanges, and other official visits.

    Except as otherwise authorized, transactions in the United States or 
by a U.S. person related to scientific and technical cooperation and 
cultural exchanges involving persons or groups officially sponsored by 
or representing the FRY (S&M), or related to visits to the United States 
by such persons or groups other than as authorized for the purpose of 
participation at the United Nations, are prohibited.



Sec. 585.213  Exemption of activities related to certain international organizations.

    Any activities related to the United Nations Protection Force 
(UNPROFOR), the Conference on Yugoslavia, or the European Community 
Monitor Mission are exempt from the prohibitions and regulations of this 
part.



Sec. 585.214  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 subpart, 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. 585.215  Conveyances and cargo suspected of being in violation of United Nations sanctions; detention; blocking.

    (a) 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 12:01 a.m. EDT, April 26, 1993, all vessels, 
freight vehicles, rolling stock, aircraft and cargo that are in or 
hereafter come within the United States and are not subject to blocking 
pursuant to Sec. 585.201, but which are suspected of a violation of 
United Nations Security Council Resolutions No. 713 (1991), 757 (1992), 
787 (1992) or 820 (1993):
    (1) Shall be detained, pending investigation; and,
    (2) Upon a determination by the Director, Office of Foreign Assets 
Control, that they have been in violation of any of these resolutions, 
may not be transferred, moved, exported, withdrawn, or otherwise dealt 
in.
    (b) Conveyances and cargoes blocked pursuant to paragraph (a) of 
this section may be liquidated as provided in Sec. 585.216.

[58 FR 35829, July 1, 1993]



Sec. 585.216  Expenses of maintaining blocked property; liquidation into blocked account.

    (a) 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 12:01 a.m. EDT, April 26, 1993, all expenses 
incident to the blocking and maintenance of property blocked pursuant to 
Sec. 585.201 or Sec. 585.215(a) shall be charged to the owners or 
operators of such property, which expenses shall not be met from blocked 
funds.
    (b) Property blocked pursuant to Sec. 585.201 or Sec. 585.215 may, 
in the discretion of the Director, Office of Foreign Assets Control, be 
sold or liquidated and the net proceeds shall be placed in a blocked 
interest-bearing account in the name of the owner of the property.

[58 FR 35829, July 1, 1993]



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

[[Page 802]]

Herzegovina under the control of Bosnian Serb forces.

[60 FR 34145, June 30, 1995]



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 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 oerson for the purpose of any business carried on in 
those areas, either from the United States or by a United States person.

[60 FR 34145, June 30, 1995]



                     Subpart C--General Definitions



Sec. 585.301  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in subpart B as 
follows:
    (a) With respect to Secs. 585.201 (a) and (d), 585.202, and 585.214, 
11:59 p.m. EDT, May 30, 1992;
    (b) With respect to Secs. 585.204, 585.205, 585.206, 585.207, 
585.208, 585.209, 585.210, 585.211, 585.212, and 585.213, 12:20 p.m. 
EDT, June 5, 1992, except as provided in paragraph (d) of this section;
    (c) With respect to Sec. 585.203, July 15, 1992;
    (d) With respect to Sec. 585.206(c) and Sec. 585.207(b)(3), January 
15, 1993;
    (e) With respect to Secs. 585.201(b), 585.215, 585.216, 585.217(a), 
and 585.218(a), 12:01 a.m. EDT, April 26, 1993; and
    (f) With respect to Secs. 585.201(c), 585.217(b), and 585.218(b), 
11:59 p.m. EDT, October 25, 1994.

[58 FR 13201, Mar. 10, 1993, as amended at 58 FR 35829, July 1, 1993; 60 
FR 34146, June 30, 1995]



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.

[60 FR 34146, June 30, 1995]



Sec. 585.303  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. 585.304  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

[[Page 803]]

any nature whatsoever, and any other property, real, personal, or mixed, 
tangible or intangible, or interest or interests therein, present, 
future or contingent.



Sec. 585.305  Transfer.

    The term transfer means any actual or purported act of 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, including funds, 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 
the 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. 585.306  License.

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



Sec. 585.307  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this subpart E.



Sec. 585.308  Specific license.

    The term specific license means any license or authorization not set 
forth in subpart E but issued pursuant to this part in response to an 
application.



Sec. 585.309  Person.

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



Sec. 585.310  Entity.

    The term entity includes a corporation, partnership, association, or 
other organization.



Sec. 585.311  Government of the FRY (S&M).

    The term Government of the FRY (S&M) includes:
    (a) The state and the Government of the FRY (S&M), the Government of 
Serbia, and the Government of Montenegro, including any subdivisions 
thereof or local governments therein, their respective agencies or 
instrumentalities, including the National Bank of Yugoslavia, the 
Yugoslav National Army, the Yugoslav Chamber of Economy, the National 
Bank of Serbia, the Serbian Chamber of Economy, the National Bank of 
Montenegro, and the Montenegrin Chamber of Economy;
    (b) Any entity owned or controlled by the foregoing. For purposes of 
the prohibitions of this part, all entities located in or organized 
under the laws of any jurisdiction within the FRY (S&M) are presumed to 
be controlled by the Government of the FRY (S&M), unless proven 
otherwise;
    (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 person or organization determined by the Director of the 
Office of Foreign Assets Control to be included within this section, or 
owned or controlled by such a person or organization.
    Note to Sec. 585.311: Please refer to the appendices at the end of 
this chapter for listings of persons designated pursuant to this part, 
and pursuant to Sec. 585.201(c) with respect to the Bosnian Serbs. 
Section 501.807 of this chapter sets forth the procedures to be followed 
by persons seeking administrative reconsideration of their designation, 
or who

[[Page 804]]

wish to assert that the circumstances resulting in the designation are 
no longer applicable.

[58 FR 13201, Mar. 10, 1993, as amended at 61 FR 32938, June 26, 1996; 
62 FR 45110, Aug. 25, 1997]



Sec. 585.312  Government of the Socialist Federal Republic of Yugoslavia.

    The term Government of the Socialist Federal Republic of Yugoslavia 
is used in this part only in reference to property held in the name of 
the former Government of the Socialist Federal Republic of Yugoslavia. 
Property and property interests held solely in the name of the 
Government of Slovenia, Croatia, Bosnia-Hercegovina or Macedonia, or in 
the name of any political subdivision, agency, or instrumentality 
thereof, do not constitute property held in the name of the former 
Government of the Socialist Federal Republic of Yugoslavia.



Sec. 585.313  Federal Republic of Yugoslavia (Serbia and Montenegro); FRY (S&M).

    The term Federal Republic of Yugoslavia (Serbia and Montenegro) or 
FRY (S&M) means the territory of Serbia and Montenegro.



Sec. 585.314  Goods and services originating in the FRY (S&M).

    The term goods or services originating in the FRY (S&M) includes:
    (a) Goods produced, manufactured, grown, or processed within the FRY 
(S&M);
    (b) Goods which have entered into the commerce of the FRY (S&M);
    (c) Services performed in the FRY (S&M), or by a national thereof, 
wherever located, who is acting as an agent, employee, or contractor of 
the Government of the FRY (S&M) or of a business entity located in the 
FRY (S&M). Such services are not considered imported into the United 
States when such services are provided in the United States by a 
national of the FRY (S&M) employed in the United States who is not 
acting on behalf of the Government of the FRY (S&M).



Sec. 585.315  Person in the FRY (S&M).

    The term person in the FRY (S&M) includes any individual, 
partnership, association, corporation, or other organization or entity 
located in or organized under the laws of any jurisdiction in the FRY 
(S&M).



Sec. 585.316  United States.

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



Sec. 585.317  United States person; U.S. person.

    The term United States person or U.S. person means any United States 
citizen; permanent resident alien; juridical person 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, and 
vessels and aircraft of U.S. registration.



Sec. 585.318  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.



Sec. 585.319  UNSC Resolution 757.

    The term UNSC Resolution 757 means United Nations Security Council 
Resolution No. 757, adopted May 30, 1992, prohibiting certain 
transactions with respect to the FRY (S&M).

[[Page 805]]



                       Subpart D--Interpretations



Sec. 585.401  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. 585.402  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. 585.403  Termination and acquisition of an interest in blocked property.

    (a) Whenever a transaction licenced 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.

[60 FR 34146, June 30, 1995]



Sec. 585.404  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.



Sec. 585.405  Acquisition of instruments including bankers acceptances.

    No U.S. person may acquire or deal in any obligation, including 
bankers acceptances and debt of or guaranteed by the a person whose 
property or interests in property are blocked pursuant to Sec. 585.201, 
where the documents evidencing the obligation indicate, or the U.S. 
person has actual knowledge, that the underlying transaction is in 
violation of Sec. 585.201, Secs. 585.204-585.212, and Secs. 585.217-
585.218. This interpretation does not apply to obligations arising from 
an underlying transaction licensed or otherwise authorized pursuant to 
this part.

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34146, June 30, 1995]



Sec. 585.406  Extensions of credits or loans.

    (a) The prohibition in Sec. 585.210 applies to the unlicenced 
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.
    (b) The prohibition in Sec. 585.210 applies to credits or loans 
extended in any currency.

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34146, June 30, 1995]



Sec. 585.407  Payments in connection with certain authorized transactions.

    Except as otherwise specified, payments are authorized in connection 
with transactions authorized in or pursuant to subpart E.

[[Page 806]]



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 s 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.
    (b) Prohibited transactions include, but are not limited to, 
importation into locations outside the United States of, or dealings 
within such locations in, goods or services originating in the FRY 
(S&M).
    (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, shoes made in the FRY 
(S&M).
    (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 knows or has reason to know is operated from the FRY (S&M) 
or owned or controlled by the Government of the FRY (S&M).

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34146, June 30, 1995]



Sec. 585.409  Transshipments through the United States prohibited.

    (a) The prohibitions in Sec. 585.205 apply to the importation into 
the United States, for transshipment or transit, of goods which are 
intended or destined for the FRY (S&M), or an entity operated from the 
FRY (S&M), or to the Government of the FRY (S&M) in any country.
    (b) The prohibitions in Sec. 585.204 apply to the importation into 
the United States, for transshipment or transit, of goods originating in 
the FRY (S&M) which are intended or destined for third countries.
    (c) Goods in which the Government of the FRY (S&M) has an interest 
that are imported into or transshipped through the United States are 
blocked pursuant to Sec. 585.201.



Sec. 585.410  Imports from third countries of goods originating in the FRY (S&M); transshipments.

    Importation into the United States from third countries of goods 
containing raw materials or components originating in the FRY (S&M) is 
prohibited. In light of the universal prohibition in UNSC Resolution 757 
on the importation of goods exported from the FRY (S&M) after May 30, 
1992, substantial transformation or incorporation of such goods in a 
third country does not exempt the third-country products from the 
prohibitions contained in this part.



Sec. 585.411  Exports to third countries; transshipments.

    Exportation of goods or technology (including technical data and 
other information) 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 reexportation or transshipment to the FRY 
(S&M), including passage through, or storage in, intermediate 
destinations. The exportation of goods and 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 the FRY (S&M), is being specifically manufactured to fill an 
order from the FRY (S&M), or if the manufacturer's sales of the 
particular product are predominantly to the FRY (S&M).



Sec. 585.412  Release of goods originating in the FRY (S&M) from a bonded warehouse or foreign trade zone.

    Section 585.204 does not prohibit the release from a bonded 
warehouse or foreign trade zone of goods originating in the FRY (S&M) 
imported into a bonded warehouse or a foreign trade zone either prior to 
the effective date or in a transaction authorized pursuant to this part 
after the effective date.
    (Note: property blocked pursuant to Sec. 585.201 may not be released 
unless authorized or licensed by the Office of Foreign Assets Control.)

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34146, June 30, 1995]

[[Page 807]]



Sec. 585.413  Imports of goods originating in the FRY (S&M), and purchases of goods from the FRY (S&M).

    Goods originating in the FRY (S&M) imported into the United States 
pursuant to an authorization or license are not blocked by the 
provisions of Sec. 585.201. However, any payment in connection with such 
importation is subject to the prohibitions contained in Secs. 585.201 
and 585.210.

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34146, June 30, 1995]



Sec. 585.414  Services performed in the Federal Republic of Yugoslavia (Serbia and Montenegro) or by the Government of the FRY (S&M).

    Services performed in the FRY (S&M), or by the Government of the FRY 
(S&M), as defined in Sec. 585.312, are imported into the United States 
when the benefit of such services is received in the United States. 
Services performed in the FRY (S&M) or by the Government of the FRY 
(S&M) for the benefit of a U.S. person outside the United States are 
prohibited pursuant to Secs. 585.201 and 585.206. Services provided in 
the United States by a national of the FRY (S&M) resident in the United 
States and not acting on behalf of the Government of the FRY (S&M) are 
not imported into the United States.



Sec. 585.415  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. 585.201 if effected after May 30, 1992.



Sec. 585.416  Exportation of services; performance of service contracts; legal services.

    (a) The prohibition on the exportation of services contained in 
Sec. 585.205 applies to services performed:
    (1) In the United States;
    (2) Outside the United States by an entity located in the United 
States, including its overseas branches; or
    (3) Outside the United States by an individual U.S. person 
ordinarily resident in the United States; on behalf of the Government of 
the FRY (S&M), or where the benefit of such services is otherwise 
received in the FRY (S&M). The benefit of services performed anywhere in 
the world on behalf of the Government of the FRY (S&M), including 
services performed for a controlled entity or specially designated 
national of the Government of the FRY (S&M), is presumed to be received 
in the FRY (S&M).
    (b) The prohibitions contained in Secs. 585.201 and 585.209 apply to 
services performed by U.S. persons, wherever located:
    (1) On behalf of the Government of the FRY (S&M);
    (2) With respect to property interests of the Government of the FRY 
(S&M); or
    (3) In support of an industrial or other commercial or governmental 
project in the FRY (S&M).
    (c) 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 the FRY (S&M). See Sec. 585.517 on licensing policy with regard to 
the provision of certain legal services.



Sec. 585.417  Transactions incidental to a licensed transaction.

    (a) Any transaction ordinarily incident to a licensed transaction 
and necessary to give effect thereto is also authorized, except a 
transaction by an unlicensed, blocked person or involving an unlicensed 
debit to a blocked account.
    (b) Example: A license authorizing an exportation of goods to the 
FRY (S&M) also authorizes all activities by other parties required to 
complete the sale, including transactions by the buyer, brokers, 
transfer agents, banks, etc.



Sec. 585.418  Vessels of the Federal Republic of Yugoslavia (Serbia and Montenegro).

    Any vessel in which a majority or controlling interest is held by a 
person or entity in, or operating from the FRY (S&M) shall be considered 
as a vessel of the FRY (S&M) regardless of the flag under which the 
vessel sails.

[58 FR 35829, July 1, 1993]

[[Page 808]]



Sec. 585.419  Effect of E.O. 12846 on outstanding licenses and authorizations.

    Executive Order 12846 does not affect the provisions of licenses and 
authorizations issued pursuant to Executive Order 12808, 12810 or 12831 
or this part by the Office of Foreign Assets Control and in force as of 
12:01 a.m. EDT, April 26, 1993, except as such licenses or 
authorizations are thereafter terminated, modified or suspended by the 
Director, Office of Foreign Assets Control.

[58 FR 35829, July 1, 1993]



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 transfering, 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).

[60 FR 34146, June 30, 1995]



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 585.501  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.
    (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 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.



Sec. 585.502  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. 585.503  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. 585.503: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers.

[58 FR 13201, Mar. 10, 1993, as amended at 58 FR 47647, Sept. 10, 1993; 
62 FR 45110, Aug. 25, 1997]

[[Page 809]]



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:
    (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 in no case may funds be transferred 
outside the United States for this purpose; and
    (b) The proceeds of such investments and reinvestments are not 
credited 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 funds or securities were 
held; and
    (c) No immediate financial or economic benefit accrues (e.g., 
through pladging or other use) to any person whose property or interests 
in property are blocked pursuant to Sec. 585.201.

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34146, June 30, 1995]



Sec. 585.505  Completion of certain transactions related to bankers acceptances authorized.

    (a) Persons other that those whose property or interests in property 
are blocked pursuant to Sec. 585.201 are authorized to buy, sell, amd 
satisfy obligations with respect to bankers acceptances, and to pay 
under deferred payment undertakings, ralating to a proprty 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 that those whose property or interests in property 
are blocked pursuant to Sec. 585.201 are authorized to buy, sell, amd 
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 pursiant to Sec. 585.201, as long as the 
bankers acceptances or the deferred payment undertakings were accepted 
prior to the effective date.
    (c) Nothing in this section shall authorize or permit a debit to a 
blocked account. Specific licenses for the debiting of a blocked account 
may be issued on a case-by-case basis.

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34146, June 30, 1995]



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 oaccounts 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 bein 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 U.S. financial institution.
    (c) The authorization in this section is subject to the condition 
that written notification from the U.S. financial institution or U.S. 
person transferring or receiving funds is furnished to the Blocked 
Assets Division, Office of Foreign Assets Control, U.S. Treasury 
Department, 1500 Pennsylvania Ave., NW.--Annex, Washington, DC 20220, 
within 10 business days from the date of transfer or receipt. The 
notification shall provide the account number, name and address of the 
transferor and/or transferee U.S. financial institution or person, and 
the account number, name and address of the person into whose account 
payment is made.

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34147, June 30, 1995]

[[Page 810]]



Sec. 585.507  Certain exportations to the FRY (S&M) authorized.

    (a) All transactions ordinarily incident to the exportation of any 
item, commodity, or product from the United States to or destined for 
the FRY (S&M) are authorized if:
    (1) Such exports would ordinarily be authorized under one of the 
following regulations administered by the Department of Commerce: 15 CFR 
771.6--General license BAGGAGE (accompanied and unaccompanied baggage); 
15 CFR 771.13--General license GUS (shipments to personnel and agencies 
of the U.S. Government); or,
    (2) Such exports are for the official use of the United Nations, its 
personnel and agencies (excluding its relief or development agencies).
    (b) All transactions related to exportation or reexportation not 
otherwise authorized in this part are prohibited unless licensed by the 
Office of Foreign Assets Control pursuant to the procedures described in 
Sec. 585.801.



Sec. 585.508  Importation of household and personal effects from the FRY (S&M) authorized.

    The importation of household and personal effects originating in the 
FRY (S&M), including baggage and articles for family use, of persons 
arriving in the United States directly or indirectly from the FRY (S&M) 
is authorized. Articles included in such effects may be imported without 
limitation provided they were actually used by such persons or their 
family members abroad, are not intended for any other person or for 
sale, and are not otherwise prohibited from importation.



Sec. 585.509  Trading in certain pre-sanctions obligations of debtors in the Republics of Slovenia, Croatia, Bosnia-Hercegovina, and Macedonia authorized.

    (a) All transactions by U.S. persons involving secondary market 
trading in debt obligations, or portions thereof, as well as ``Qualified 
Transactions'' that result in the cancellation of Refinancing Loans, or 
portions thereof, originally incurred or transferred to banks (``Pre-
sanctions Obligors'') organized and headquartered in the Republics of 
Slovenia, Croatia, Bosnia-Hercegovina, and Macedonia, prior to the 
effective date, and rescheduled pursuant to the ``New Financing 
Agreement'' of September 20, 1988 (the ``NFA''), are authorized, 
notwithstanding the joint and several liability undertaken by the 
National Bank of Yugoslavia and/or of banks located in the FRY (S&M), 
for repayment of such obligations.
    (b) Nothing in this section shall authorize trading in debt 
obligations, or portions thereof, subject to the NFA for which the Pre-
sanctions Obligor was the National Bank of Yugoslavia or an entity 
organized or headquartered in Serbia or Montenegro.
    (c) No transfer of debt obligations, or portions thereof, for which 
the National Bank of Yugoslavia or a bank located in the FRY (S&M) has 
joint or several liability may be completed unless the transferee 
undertakes in writing that the debt obligations will not be further 
transferred to or for the benefit of the Government of the FRY (S&M), 
including the National Bank of Yugoslavia, or any person in the FRY 
(S&M), until permitted by U.S. law.
    (d) A U.S. person involved in the transfer of any debt obligation 
for which the National Bank of Yugoslavia or an entity located in the 
FRY (S&M) has joint or several liability must file a report with the 
Blocked Assets Division, Office of Foreign Assets Control, U.S. Treasury 
Department, 1500 Pennsylvania Ave., NW.--Annex, Washington, DC 20220, 
within 10 days of the transfer, providing:
    (1) The names and addresses of the transferor, transferee and the 
U.S. person involved if neither of the foregoing;
    (2)(i) A copy of the ``Refinancing Loan Notice'' required pursuant 
to the NFA concerning the debt obligation transferred, and
    (ii) If a Pre-sanctions Obligor located or headquartered in Serbia 
or Montenegro, including the National Bank of Yugoslavia, is included in 
a consortium of obligors identified in a ``Refinancing Loan Notice'' for 
the debt obligation transferred, a copy of the transferor's 
confirmation(s) that each portion of the debt obligation transferred is 
that of a Pre-sanctions Obligor organized and headquartered in the 
Republic of

[[Page 811]]

Slovenia, Croatia, Bosnia-Hercegovina, or Macedonia; and
    (3) A certification that the transfer documents include the 
transferee's undertaking required in paragraph (c) of this section.

[58 FR 13201, Mar. 10, 1993, as amended at 58 FR 35829, July 1, 1993]



Sec. 585.510  Payments and transfers authorized for goods and services exported to the FRY (S&M) prior to the effective date.

    (a) Specific licenses may be issued on a case-by-case basis to 
permit payment involving an irrevocable letter of credit issued or 
confirmed by a U.S. bank, or a letter of credit reimbursement confirmed 
by a U.S. bank, from a blocked account or otherwise, of amounts owed to 
or for the benefit of a person with respect to goods or services 
exported prior to May 30, 1992, directly or indirectly to the FRY (S&M), 
or to third countries for an entity operated from the FRY (S&M), or for 
the benefit of the Government of the FRY (S&M), where the license 
application presents evidence satisfactory to the Office of Foreign 
Assets Control that the exportation occurred prior to the effective date 
(such evidence may include, for example, the bill of lading, the air 
waybill, the purchaser's written confirmation of completed services, 
customs documents, and insurance documents).
    (b) This section does not authorize exportation or the performance 
of services after the effective date pursuant to a contract entered into 
or partially performed prior to the effective date.
    (c) Separate criteria may be applied to the issuance of licenses 
authorizing payment from an account of or held by a blocked U.S. bank 
owned or controlled by the Government of the FRY (S&M).



Sec. 585.511  Extensions or renewals of letters of credit authorized.

    (a) The extension or renewal, at the request of the account party, 
of a letter of credit or a standby letter of credit issued or confirmed 
by a U.S. financial institution is authorized, provided no transfer of 
funds is made except to a blocked account.
    (b) Transactions conducted pursuant to this section must be reported 
to the Blocked Assets Division, Office of Foreign Assets Control, U.S. 
Treasury Department, 1500 Pennsylvania Ave., NW.--Annex, Washington, DC 
20220, within 10 days after completion of the transaction.



Sec. 585.512  Transactions relating to travel to or within the FRY (S&M).

    (a) All transactions by U.S. persons related to nonbusiness travel 
to, from, and within the FRY (S&M) are authorized, including the booking 
of travel arrangements, the payment of living expenses, and the 
acquisition of goods for personal consumption within the FRY (S&M), 
provided that no such transactions may involve transportation by air 
into or out of the FRY (S&M).
    (b) All transactions by U.S. persons related to travel to, from, and 
within, and to activities within, the FRY (S&M) for the conduct of the 
official business of the United States Government or the United Nations 
and journalistic activity by persons regularly employed in such capacity 
by a newsgathering organization, are authorized, provided that no such 
transactions may involve transportation by air into or out of the FRY 
(S&M).
    (c) This section does not authorize U.S. persons to utilize charge 
cards, including, but not limited to, debit cards, credit cards or other 
credit facilities in the FRY (S&M) in connection with any transaction 
authorized by this section. This section also does not authorize 
payments to be sent into the FRY (S&M) from the United States or by a 
U.S. person located outside the FRY (S&M).

[58 FR 13201, Mar. 10, 1993, as amended at 60 FR 34147, June 30, 1995]



Sec. 585.513  Transactions related to telecommunications authorized.

    (a) All transactions of U.S. common carriers with respect to the 
receipt and transmission of telecommunications involving the FRY (S&M) 
are authorized, provided any payment owed to the Government of the FRY 
(S&M) or to any other person in the FRY (S&M) is paid into a blocked 
account in a U.S. financial institution. This section does

[[Page 812]]

not authorize the exportation of equipment to upgrade telecommunications 
facilities.
    (b) The term ``telecommunications'' shall mean telephone, telex and 
telegraph transmissions, and transmissions for the gathering or 
broadcast of news.



Sec. 585.514  Transactions related to mail authorized.

    All transactions by U.S. persons, including payment and transfers to 
common carriers, incident to the receipt or transmission of mail between 
the United States and the FRY (S&M) are authorized. For purposes of this 
authorization, mail is limited to personal communications not involving 
a transfer of anything of value, and publications and other 
informational materials, subject to a maximum weight limitation of 12 
ounces.



Sec. 585.515  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 the FRY (S&M) are authorized.
    (1) The filing and prosecution of any application for a patent, 
trademark or copyright, or for the renewal thereof;
    (2) The receipt of any patent, trademark or copyright; and
    (3) The filing and prosecution of opposition or infringement 
proceedings with respect to any patent, trademark, or copyright, and the 
prosecution of a defense to any such proceeding.
    (b) The payment of reasonable and customary fees currently due to 
the United States Government or to attorneys or representatives within 
the United States in connection with any transaction authorized by 
paragraphs (a) (1)-(3) of this section may be made from a blocked 
account held in the name of the entity in the FRY (S&M) holding the 
patent, trademark or copyright.
    (c) The payment of fees currently due to the Government of the FRY 
(S&M) directly or through an attorney or representative, in connection 
with any of the transactions authorized by paragraphs (a) (1)-(3) of 
this section, or for the maintenance of any patent, trademark, or 
copyright, must be made into a blocked account in a domestic U.S. 
financial institution in the name of the appropriate governmental 
entity. In addition, fees currently due to individual attorneys or 
representatives in the FRY (S&M) in connection with any of the 
transactions authorized by paragraphs (a) (1)-(3) of this section may 
not be transferred to the FRY (S&M), but may otherwise be transferred as 
authorized in Sec. 585.523.
    (d) Payments of amounts due into a blocked account in the name of 
the Government of the FRY (S&M) must be reported to the Blocked Assets 
Division, Office of Foreign Assets Control, U.S. Treasury Department, 
1500 Pennsylvania Ave., NW.--Annex, Washington, DC 20220. The report 
shall include the date and amount deposited, the account title, the 
account number, and the name and address of the U.S. financial 
institution.



Sec. 585.516  Procedures established for export transactions initiated prior to the effective date.

    Goods awaiting exportation to the FRY (S&M) on the effective date 
and seized or detained by the U.S. Customs Service on the effective date 
or thereafter may be released to the exporter, provided the following 
documents are filed with Customs officials at the port where such goods 
are located:
    (a) A copy of the contract governing the exportation (sale or other 
transfer) of the goods to the FRY (S&M) or, if no contract exists, a 
written explanation of the circumstances of exportation, including in 
either case a description of the manner and terms of payment received or 
to be received by the exporter (or other person) for, or by reason of, 
the exportation of the goods;
    (b) An invoice, bill of lading, or other documentation fully 
describing the goods; and
    (c) A statement by the exporter substantially in the following form:

    Any amount received from or on behalf of the Government of the FRY 
(S&M) by reason of the attempted exportation of the goods released to 
[name of exporter] by the U.S. Customs Service on [date], and fully 
described in the attached documents, has been or will be placed into a 
blocked account in a U.S. bank and the Office of Foreign Assets Control, 
Blocked Assets Section, will be immediately

[[Page 813]]

notified. [Name of exporter] agrees to fully indemnify the U.. 
Government for any amount ultimately determined by a court of competent 
jurisdiction to be due or payable to or for the benefit of any person by 
reason of the failure of [name of exporter] to properly pay into a 
blocked account any amount received for the goods from or on behalf of 
the Government of the FRY (S&M). [Name of exporter] also agrees to waive 
all claims (1) against any payments received and placed into a blocked 
account, except as may be later authorized by law, regulations, or 
license, and (2) against the U.S. Government with regard to the 
disposition of the amounts placed into a blocked account.


The statement should be dated and signed by the exporter or by a person 
authorized to sign on the exporter's behalf. The Customs Service may 
release the goods to the exporter upon receipt of the documentation and 
statement described above, provided it is satisfied that all customs 
laws and regulations have been complied with, including the execution of 
such hold harmless assurances as it shall determine to be appropriate. 
The documentation and statement received by Customs will be forwarded to 
the Office of Foreign Assets Control for review and appropriate action.



Sec. 585.517  Exportation of certain legal services to the Government of, or persons in, the FRY (S&M).

    (a) The provision to the Government of the FRY (S&M), or to a person 
in the FRY (S&M), 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. The provision of any other legal 
services as interpreted in Sec. 585.416 requires the issuance of a 
specific license.
    (b) Specific licenses are 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 the FRY (S&M) or to a 
person in the FRY (S&M):
    (1) Provision of legal advice and counselling to the Government of 
the FRY (S&M) or to a person in the FRY (S&M) on the requirements of and 
compliance with the laws of any jurisdiction within the United States, 
provided that such advice and counselling is not provided to facilitate 
transactions in violation of subpart B of this part;
    (2) Representation of the Government of the FRY (S&M) or of a person 
in the FRY (S&M) 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 the FRY (S&M) that were in 
existence prior to May 30, 1992, or of a person in the FRY (S&M);
    (4) Representation of the Government of the FRY (S&M) or a person in 
the FRY (S&M) before any federal agency with respect to the imposition, 
administration, or enforcement of U.S. sanctions against the FRY (S&M); 
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 domestic 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 the FRY (S&M) is prohibited unless 
specially licensed in accordance with Sec. 585.202(e).



Sec. 585.518  Certain standby letters of credit and performance bonds.

    (a) Notwithstanding any other provision of law, payment into a 
blocked account in a U.S. financial institution by an issuing or 
confirming bank under a standby letter of credit in favor of a 
beneficiary that is the Government of the FRY (S&M) or a person in the 
FRY (S&M) is prohibited by Sec. 585.201 and not authorized, 
notwithstanding the provisions of Sec. 585.503, if
    (1) The account party is a U.S. person; and
    (2)(i) A specific license has been issued pursuant to the provisions 
of paragraph (b) of this section, or
    (ii) 10 business days have not expired after notice to the account 
party pursuant to paragraph (b) of this section.

[[Page 814]]

    (b) Whenever an issuing or confirming bank shall receive such demand 
for payment under such a standby letter of credit, it shall promptly 
notify the account party. The account party may then apply within 5 
business days for a specific license authorizing the account party to 
establish a blocked account on its books in the name of the FRY (S&M) 
beneficiary 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. Nothing in this section 
relieves any such bank or such account party from giving any notice of 
defense against payment or reimbursement that is required by applicable 
law.
    (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 account party 
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) 10 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 Director of the Office of Foreign Assets Control 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 
U.S. financial institution or the supplying of any form of security 
deemed necessary.
    (e) Nothing in this section precludes the account party on any 
standby letter or credit or any other person from at any time contesting 
the legality of the demand from a beneficiary in the FRY (S&M) 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 to the instruments covered by this section if the instruments 
and payments thereunder are subsequently unblocked.
    (g) This section does not authorize any U.S. person to reimburse a 
non-U.S. bank for payment to an FRY (S&M) beneficiary under a standby 
letter of credit, except by payments into a blocked account in 
accordance with Sec. 585.503 or paragraph (b) or (c) of this section.
    (h) A person receiving a specific license under paragraph (b) or (c) 
of this section shall certify to the Office of Foreign Assets Control 
within 5 business days after receipt of that license that it has 
established the blocked account on its books as provided in those 
paragraphs. However, in appropriate cases, this time period 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.
    (i) For the purposes of this section:
    (1) The term standby letter of credit shall mean a letter of credit 
securing performance of a contract, or repayment of any advance payments 
or deposits under a contract, or any similar obligation in the nature of 
a performance bond;
    (2) The term account party shall mean the person for whose account 
the standby letter of credit was opened; and
    (3) The term FRY (S&M) beneficiary shall mean a beneficiary that is 
(i) a person in the FRY (S&M), (ii) an entity operated from the FRY 
(S&M), or (iii) the Government of the FRY (S&M).



Sec. 585.519  Certain imports for diplomatic or official personnel authorized.

    All transactions ordinarily incident to the importation of any goods 
or services into the United States, which are not for resale, and which 
are destined for official or personal use by personnel employed by the 
diplomatic missions of the Government of the FRY (S&M) to the United 
States and to international organizations located in the United States 
are authorized, unless the importation is otherwise prohibited by law.

[[Page 815]]



Sec. 585.520  Entries in certain accounts for normal service charges authorized.

    (a) U.S. financial institutions are hereby authorized to:
    (1) Debit any blocked account on their books in payment or 
reimbursement for normal service charges owed to such U.S. financial 
institution by the owner of such blocked account; and
    (2) Make book entries against any foreign currency account 
maintained by it with a financial institution in the FRY (S&M) 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, notary and protest fees, and 
charges for reference books, photocopies, credit reports, transcripts of 
statements, registered mail insurance, stationery and supplies, check 
books, and other similar items.



Sec. 585.521  Donations of food to relieve human suffering authorized.

    (a) Specific licenses may be issued on a case-by-case basis to 
permit exportation to the FRY (S&M) of donated food intended to relieve 
human suffering.
    (b) In general, specific licenses will only be granted for donations 
of food to be provided through the United Nations in accordance with 
UNSC Resolution 757 and in cooperation with the International Committee 
of the Red Cross or other appropriate humanitarian agencies for 
distribution by them or under their supervision, or in such other manner 
as may be approved under UNSC Resolution 757 and any other applicable 
Security Council resolutions, in order to ensure that such donations 
reach the intended beneficiaries.
    (c) Applications for specific licenses pursuant to paragraph (a) of 
this section shall be made in advance of the proposed exportation, and 
provide the following information:
    (1) The nature, quantity, value, and intended use of the donated 
food; and
    (2) The terms and conditions of distribution, including the intended 
method of compliance with such terms and conditions of distribution as 
may have been adopted by the United Nations Security Council or a duly 
authorized body subordinate thereto to govern the shipment of foodstuffs 
under applicable United Nations Security Council resolutions, including 
UNSC Resolution 757.



Sec. 585.522  Donations of medical supplies authorized.

    (a) Specific licenses may be issued on a case-by-case basis to 
permit exportation to the FRY (S&M) of donated supplies intended 
strictly for medical purposes, in accordance with the provisions of UNSC 
Resolution 757 and other applicable Security Council resolutions.
    (b) In general, specific licenses will only be granted for the 
exportation of medical supplies through the International Committee of 
the Red Cross or other appropriate humanitarian agencies for 
distribution by them or under their supervision, or in such other manner 
as may be approved under applicable Security Council resolutions, in 
order to ensure that such supplies reach the intended recipient.
    (c) Applications for specific licenses pursuant to paragraph (a) of 
this section shall be made in advance of the proposed exportation, and 
provide the following information:
    (1) The nature, quantity, value, and intended use of the medical 
supplies;
    (2) The terms and conditions of distribution, including the intended 
method of compliance with such terms and conditions of distribution as 
may have been adopted by the United Nations Security Council or a duly 
authorized body subordinate thereto to govern the shipment of medical 
supplies under applicable Security Council resolutions.



Sec. 585.523  Certain transactions for the benefit of individuals in the FRY (S&M) authorized.

    All transactions are authorized by U.S. financial institutions that 
are not blocked, including their foreign branches, for the benefit of 
individuals

[[Page 816]]

located in the FRY (S&M) provided that such transactions do not result 
in the transfer of funds to or for the benefit of the Government of the 
FRY (S&M) or to persons in the FRY (S&M).



Sec. 585.524  Humanitarian aid and trade in United Nations Protected Areas of Croatia and those areas of the Republic of Bosnia and Herzegovina controlled by 
          Bosnian Serb forces.

    (a) Specific licenses may be issued on a case-by-case basis to 
permit exportation to, or transshipment 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 of essential humanitarian supplies, including medical supplies 
and foodstuffs, distributed by international humanitarian agencies. 
Applications for specific licenses shall be made in accordance with 
Sec. 585.522(c).
    (b) Specific licenses may be issued on a case-by-case basis to 
permit importation from, exportation to, or transshipment 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 of any other goods, only upon a determination by the 
Director of the Office of Foreign Assets Control that such activities 
have been properly authorized by the Government of the Republic of 
Croatia or the Government of the Republic of Bosnia and Herzegovina, 
respectively.

[58 FR 35829, July 1, 1993, as amended at 60 FR 34147, June 30, 1995]



Sec. 585.525  Authorization of certain new transactions with respect to the FRY (S&M).

    (a) Notwithstanding the provisions of subpart B of this part, 
transactions and activities otherwise prohibited by Secs. 585.201(a), 
(b) and (d) (blocked property), 585.204 (imports), 585.205 (exports), 
585.206 (dealing in exports and imports), 585.207 (transportation-
related transactions), 585.208 (aircraft), 585.209 (performance of 
contracts), 585.210 (transfer of funds), 585.211 (sporting events), 
585.212 (scientific and technical cooperation, cultural exchanges), 
585.215 (detention of conveyances and cargo), 585.217(a) (entry of U.S. 
vessels into territorial waters), 585.218(a) (insofar as that paragraph 
relates to trade in the United Nations Protected Areas of Croatia), and 
the restrictions on certain travel-related transactions (including those 
for commercial travel) delineated in Sec. 585.512, are hereby authorized 
on or after January 16, 1996, provided that no such transaction results 
in a debit to an account blocked prior to December 27, 1995, or a 
transfer of property blocked prior to December 27, 1995, unless such 
debit or transfer is independently authorized by or pursuant to this 
part.
    (b)(1) All provisions of Sec. 585.509 continue to apply to debt for 
which the National Bank of Yugoslavia or a bank located in the FRY (S&M) 
bears joint or several liability and which, immediately prior to January 
16, 1996, was held in the United States or was within the possession or 
control of a U.S. person, except that the certification and reporting 
requirements contained in Sec. 585.509(c) and (d)(3) no longer apply to 
transactions with or for the benefit of persons with respect to whom the 
blocking provisions of Sec. 585.201(a),(b) and (d) have been suspended 
pursuant to this section.
    (2) Transactions by U.S. persons involving debt for which the 
National Bank of Yugoslavia or a bank located in the FRY (S&M) bears 
joint or several liability but that was not held in the United States or 
within the possession or control of a U.S. person immediately prior to 
January 16, 1996 are authorized, provided that no debit or transfer to a 
blocked account is authorized.
    (c) Transactions and activities prohibited by Secs. 585.201(c) 
(blocked property), 585.217(b) (entry of U.S. vessels into riverine 
ports), 585.218(a) (insofar as that paragraph relates to trade in 
Bosnian Serb-controlled areas of Bosnia and Herzegovina), and 585.218(b) 
(services to Bosnian Serb-controlled areas), remain prohibited and are 
not authorized by this section.
    (d) The authorizations contained in this section do not eliminate 
the need to comply with regulatory requirements not administered by the 
Office of Foreign Assets Control, including

[[Page 817]]

aviation, financial and trade requirements administered by other federal 
agencies.

[61 FR 1284, Jan. 19, 1996]



Sec. 585.526  Authorization for release of certain blocked transfers by U.S. financial institutions.

    (a) U.S. financial institutions are authorized to unblock and return 
to the remitting party funds which came into their possession or control 
through wire transfer instructions or check remittances that were not 
destined for an account on the books of a U.S. financial institution, 
which account was established by a person whose property or interests in 
property were blocked immediately prior to January 16, 1996 pursuant to 
Sec. 585.201 (a ``blocked person''), provided that the funds may not be 
so unblocked and returned if they were remitted by or through a blocked 
person.
    (b)(1) Nothing in this section authorizes the unblocking and release 
of funds destined for credit:
    (i) To accounts established by blocked persons on the books of U.S. 
financial institutions; or
    (ii) To Beogradska Banka d.d. New York Agency or Jugobanka d.d. New 
York Agency for further credit to account holders. Both banks are 
blocked persons.
    (2) Funds described in paragraph (b)(1) of this section that are not 
already held in an account described in paragraph (b)(1)(i) must be 
transferred to such an account by January 29, 1996, where the funds must 
be maintained in blocked status pursuant to Sec. 585.201. Nothing in 
this section authorizes transfers involving property or property 
interests blocked pursuant to Sec. 585.201(c) (blocking property and 
interests in property of the Bosnian Serb forces and authorities in the 
areas of the Republic of Bosnia and Herzegovina such forces control; 
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 
foregoing persons).

[61 FR 1284, Jan. 19, 1996]



Sec. 585.527  Authorization of certain new transactions with respect to the Bosnian Serbs.

    (a) Notwithstanding the provisions of subpart B of this part, 
transactions and activities otherwise prohibited by Secs. 585.201(c) 
(blocked property), 585.217(b) (entry of U.S. vessels into riverine 
ports), 585.218(a) (insofar as that paragraph relates to trade in 
Bosnian Serb-controlled areas of Bosnia and Herzegovina), and 585.218(b) 
(services to Bosnian Serb-controlled areas), are hereby authorized on or 
after May 10, 1996, provided that no such transaction results in a debit 
to an account blocked prior to May 10, 1996, or a transfer of property 
blocked prior to May 10, 1996, unless such debit or transfer is 
independently authorized by or pursuant to this part.
    (b) The authorizations contained in this section do not eliminate 
the need to comply with regulatory requirements not administered by the 
Office of Foreign Assets Control, including aviation, financial and 
trade requirements administered by other federal agencies.

[61 FR 24697, May 16, 1996]



Sec. 585.528  Unblocking of certain vessels and accounts.

    (a) All transactions with respect to the following vessels are 
authorized as of May 19, 1997: the M/V MOSLAVINA, M/V ZETA, M/V LOVCEN, 
M/V DURMITOR, and M/V BAR (a.k.a. M/V INVIKEN).
    (b) All transactions by U.S. persons to seek and obtain judicial 
warrants of maritime arrest against the blocked vessels referenced in 
paragraph (a) of this section are authorized, but service of a warrant 
of maritime arrest on a blocked vessel referenced in paragraph (a) of 
this section may be effected not before 10:00 a.m. local time in the 
location of the vessel, May 8, 1997.
    (c) Nothing in this section authorizes a debit to an account blocked 
prior to December 27, 1995, unless such debit is independently 
authorized by or pursuant to this part.
    (d) All transactions with respect to blocked accounts held at 
Whitney National Bank, New Orleans, Louisiana, containing the proceeds 
of the sales of the M/V KAPETAN MARTINOVIC and

[[Page 818]]

the M/V BOR are authorized as of December 7, 1998. All transactions by 
U.S. persons to seek and obtain judicial writs of attachment against the 
blocked accounts as substitute property for these vessels are authorized 
as of 10:00 a.m. Eastern Standard Time, November 27, 1998.

[62 FR 19673, Apr. 23, 1997, as amended at 63 FR 59884, Nov. 6, 1998]



                           Subpart F--Reports



Sec. 585.601  Records and reports.

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

[62 FR 45110, Aug. 25, 1997]



                          Subpart G--Penalties



Sec. 585.701  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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty of not to exceed $11,000 per violation may be 
imposed on any person who violates any license, order, or regulation 
issued under the Act;
    (2) Whoever willfully violates any license, order, or regulation 
issued under the Act shall, upon conviction be fined not more than 
$50,000, or, if a natural person, may be imprisoned for not more than 
ten years, or both; and any officer, director, or agent of any 
corporation who knowingly participates in such violation may be punished 
by a like fine, imprisonment or both.
    (b) The criminal penalties provided in the Act are subject to 
increase pursuant to 18 U.S.C. 3571.
    (c) Attention is directed to the United Nations Participation Act 
(22 U.S.C. 287c(b)), which provides that any person who willfully 
violates or evades or attempts to violate or evade any order, rule, or 
regulation issued by the President pursuant to the authority granted in 
this section shall, upon conviction, be fined not more than $10,000 or, 
if a natural person, be imprisoned for not more than 10 years, or both; 
and the officer, director or agent of any corporation who knowingly 
participates in such violation or evasion shall be punished by a similar 
fine, imprisonment or both, and any property, funds, securities, papers, 
or other articles or documents, or any vessel, together with tackle, 
apparel, furniture, and equipment, or vehicle, or aircraft, concerned in 
such violation shall be forfeited to the United States. The criminal 
penalties provided in the United Nations Participation Act are subject 
to increase pursuant to 18 U.S.C. 3571.
    (d) 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.
    (e) Violations of this part may also be subject to relevant 
provisions of the Customs laws and other applicable laws.

[58 FR 13201, Mar. 10, 1993, as amended at 61 FR 54940, Oct. 23, 1996; 
62 FR 45110, Aug. 25, 1997]



Sec. 585.702  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

[[Page 819]]

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 
describe the violation, specify the laws and regulations allegedly 
violated, and 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 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.



Sec. 585.703  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 
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.



Sec. 585.704  Penalty notice.

    (a) No violation. If, after considering any presentations made in 
response to the prepenalty notice and any relevant facts, 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.



Sec. 585.705  Referral to United States Department of Justice.

    In the event that the person named does not pay the penalty imposed 
pursuant to this subpart or make payment arrangements acceptable to the 
Director within 30 days of the mailing of the written notice of the 
imposition of the penalty, the matter shall 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. 585.801  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 
subpart D of part 501 of this chapter.

[62 FR 45110, Aug. 25, 1997]



Sec. 585.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to Executive Orders 12808, 12810, 12831, and any further 
Executive orders relating to the national emergency declared in 
Executive Order 12808 may be taken by the Director, Office of Foreign 
Assets Control.

[58 FR 13201, Mar. 10, 1993. Redesignated at 62 FR 45110, Aug. 25, 1997]



                   Subpart I--Paperwork Reduction Act



Sec. 585.901  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

[[Page 820]]

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 45110, Aug. 25, 1997]



PART 586--FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA & MONTENEGRO) KOSOVO SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

586.201  Prohibited transactions involving blocked property.
586.202  Effect of transfers violating the provisions of this part.
586.203  Holding of funds in interest-bearing accounts; investment and 
          reinvestment.
586.204  Prohibited new investment within Serbia.
586.205  Evasions; attempts; conspiracies.
586.206  Exempt transactions.

                     Subpart C--General Definitions

586.301  Blocked account; blocked property.
586.302  Effective date.
586.303  Entity.
586.304  Federal Republic of Yugoslavia (Serbia & Montenegro); FRY 
          (S&M).
586.305  General license.
586.306  Government of the Federal Republic of Yugoslavia (Serbia and 
          Montenegro).
586.307  Government of the Republic of Montenegro.
586.308  Government of the Republic of Serbia.
586.309  Information and informational materials.
586.310  Interest.
586.311  License.
586.312  New investment.
586.313  Person.
586.314  Property; property interest.
586.315  Specific license.
586.316  Transfer.
586.317  U.S. financial institution.
586.318  United States.
586.319  United States person; U.S. person.

                       Subpart D--Interpretations

586.401  Reference to amended sections.
586.402  Effect of amendment.
586.403  Termination and acquisition of an interest in blocked property.
586.404  Setoffs prohibited.
586.405  Transactions incidental to a licensed transaction.
586.406  Provision of services.
586.407  Offshore transactions.
586.408  Exempt financial transactions within the territory of the FRY 
          (S&M); prohibition on establishment of new offices in Serbia.
586.409  Approval or other facilitation of other persons' investment in 
          the territory of the Republic of Serbia.
586.410  Transfer of funds to the benefit of certain persons in the 
          territory of the FRY (S&M).

 Subpart E--Licenses, Authorizations and Statements of Licensing Policy

586.501  General and specific licensing procedures.
586.502  Effect of license or authorization.
586.503  Exclusion from licenses and authorizations.
586.504  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
586.505  Payment of obligations to U.S. persons authorized.
586.506  Investment and reinvestment of certain funds.
586.507  Completion of certain transactions related to bankers 
          acceptances authorized.
586.508  Entries in certain accounts for normal service charges 
          authorized.
586.509  Provision of certain legal services authorized.
586.510  Transactions related to telecommunications authorized.
586.511  Transactions related to mail authorized.
586.512  Certain transactions related to patents, trademarks and 
          copyrights authorized.
586.513  Certain transactions with respect to trade with blocked persons 
          authorized.
586.514  Divestiture of U.S. person's equity investment in the territory 
          of the Republic of Serbia.
586.515  Payments for services rendered by the Government of the FRY 
          (S&M) to aircraft authorized; aircraft and maritime safety.
586.516  Transactions with respect to property in which the Government 
          of the Republic of Montenegro has an interest authorized.
586.517  Unblocking of certain debt.
586.518  Authorization of release of certain blocked transfers by U.S. 
          financial institutions.
586.519  Release of certain funds held at overseas branches of U.S. 
          financial institutions.

[[Page 821]]

                           Subpart F--Reports

586.601  Records and reports.

                          Subpart G--Penalties

586.701  Penalties.
586.702  Prepenalty notice.
586.703  Response to prepenalty notice; informal settlement.
586.704  Penalty imposition or withdrawal.
586.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H--Procedures

586.801  Procedures.
586.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

586.901  Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; E.O. 13088, 63 FR 32109, 3 CFR, 98 Comp., p. 191; E.O. 13121, 
64 FR 24021, 3 CFR, 99 Comp. p. 176; E.O. 13192, 66 FR 7379, January 23, 
2001.

    Source: 63 FR 54576, Oct. 13, 1998, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 586.101  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. Actions pursuant to part 
501 of this chapter with respect to the prohibitions of this part are 
considered actions pursuant 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. 586.201  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 Governments of the FRY (S&M), the Republic of Serbia, 
and the Republic of Montenegro, 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.

    Note to paragraph (a) of Sec. 586.201:
    See note at end of this section with regard to the lifting of 
certain sanctions effective January 19, 2001.

    (b) The blocking of property and property interests in paragraph (a) 
of this section includes the prohibition of financial transactions with, 
including trade financing for, the Governments of the FRY (S&M), the 
Republic of Serbia, and the Republic of Montenegro by United States 
persons.

    Note to paragraph (b) of Sec. 586.201:
    See note at end of this section with regard to the lifting of 
certain sanctions effective January 19, 2001.

    (c) Property or interests in property blocked pursuant to Executive 
Order 13088 of June 9, 1998, as amended by Executive Order 13121 of 
April 30, 1999, and this part prior to 12:01 a.m. eastern standard time, 
January 19, 2001, are blocked, and may not be transferred, paid, 
exported or otherwise dealt in except as otherwise authorized by the 
Secretary of the Treasury.

    Note to paragraph (c) of Sec. 586.201:
    See note at end of this section with regard to the lifting of 
certain sanctions effective January 19, 2001.

    (d) 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

[[Page 822]]

the endorsement or guaranty of signatures on, or otherwise dealing in 
any security (or evidence thereof) registered or inscribed in the name 
of the Governments of the FRY (S&M), the Republic of Serbia, and the 
Republic of Montenegro, 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.

    Note to paragraph (d) of Sec. 586.201:
    See note at end of this section with regard to the lifting of 
certain sanctions effective January 19, 2001.

    (e) 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.

    Note to Sec. 586.201: Section 1(a) of Executive Order 13192 of 
January 17, 2001 (66 FR 7379, January 23, 2001), amended Executive Order 
13088 of June 9, 1998 (63 FR 32109, June 12, 1998), to remove 
prospectively the prohibition on transactions that involve blocked 
property and interests in property of the Governments of the FRY(S&M), 
the Republic of Serbia, and the Republic of Montenegro. Consequently, 
with the exception of transactions involving property or interests in 
property of persons designated in or pursuant to 31 CFR Sec. 587.201(a), 
transactions or transfers by U.S. persons that involve the property or 
interests in property of the FRY(S&M) and that occur on or after January 
19, 2001, are not prohibited by Secs. 586.201(a), (b), or (d). Executive 
Order 13088, as amended by Executive Order 13192, however, also requires 
that all property or interests in property blocked pursuant to Executive 
Order 13088 prior to January 19, 2001, shall remain blocked, except as 
otherwise authorized by the Secretary of the Treasury. See 
Sec. 586.201(c). The continued blocking of previously blocked property 
is necessary until provision is made to address claims or encumbrances 
with respect to such property.

[63 FR 54576, Oct. 13, 1998, as amended at 66 FR 50509, Oct. 3, 2001]



Sec. 586.202  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 issued pursuant to 
this part and involves any property or interest in property blocked 
pursuant to Sec. 586.201 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. 586.201, 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 pursuant to this part.
    (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

[[Page 823]]

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 issued pursuant to this part; 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) of Sec. 586.202:
    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 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. 586.201.



Sec. 586.203  Holding of funds in interest-bearing accounts; investment and reinvestment.

    (a) Except as provided in paragraph (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. 586.201 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 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. 586.201 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. 586.201 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. 586.201. However, the Office of Foreign Assets Control may issue 
licenses permitting or directing such sales in appropriate cases.

[[Page 824]]

    (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 persons whose property or interests in property are 
blocked pursuant to Sec. 586.201, nor may their holder cooperate in or 
facilitate the pledging or other attempted use as collateral of blocked 
funds or other assets.



Sec. 586.204  Prohibited new investment within Serbia.

    Except as otherwise provided in regulations, orders, directives, or 
licenses that may hereafter be issued pursuant to this order, all new 
investment in the territory of the Republic of Serbia by United States 
persons, and the approval or other facilitation by United States persons 
of other persons' new investment in the territory of the Republic of 
Serbia, are prohibited.

    Note to Sec. 586.204: Section 1(b) of Executive Order 13192 of 
January 17, 2001 (66 FR 7379, January 23, 2001), revoked section 3 of 
Executive Order 13088 of June 9, 1998 (63 FR 32109, June 12, 1998), 
which prohibited all new investment by United States persons in the 
territory of the Republic of Serbia and the approval and other 
facilitation by United States persons of other persons' new investment 
in the territory of the Republic of Serbia. Consequently, with the 
exception of transactions involving property or interests in property of 
persons designated in or pursuant to 31 CFR Sec. 587.201(a), the new 
investment activities of United States persons in the territory of the 
Republic of Serbia on or after January 19, 2001, are not prohibited by 
Sec. 586.204.

[63 FR 54576, Oct. 13, 1998, as amended at 66 FR 50509, Oct. 3, 2001]



Sec. 586.205  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.



Sec. 586.206  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. 586.309, 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. Such prohibited 
transactions include, but are not limited to, payment of advances for 
information and 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 and informational materials, and payment of royalties to 
persons whose property or interests in property are blocked pursuant to 
Sec. 586.201 with respect to income received for enhancements or 
alterations made by U.S. persons to information or informational 
materials imported from persons whose property and property interests 
are blocked pursuant to Sec. 586.201.
    (3) This section does not exempt or authorize transactions incident 
to the exportation f software subject to the Export Administration 
Regulations, 15 CFR parts 730-774, or to the exportation of goods, 
technology or software, or to the sale or leasing of telecommunications 
transmission facilities (such as satellite links or dedicated lines) for 
use in the transmission of any data. The exportation of such items or 
services and the sale or leasing of such facilities to a person whose 
property and interests in property are blocked pursuant to Sec. 586.201 
is prohibited.
    (c) Travel. The prohibitions contained in this part do not apply to 
transactions ordinarily incident to travel to

[[Page 825]]

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.
    (d) Journalistic activity. The prohibitions contained in this part 
do not apply to transactions in the FRY (S&M) for journalistic activity 
by persons regularly employed in such capacity by a news-gathering 
organization.
    (e) Humanitarian donations. The prohibitions of this part do not 
apply to donations by U.S. persons of articles, such as food, clothing, 
and medicine, intended to be used to relieve human suffering.



                     Subpart C--General Definitions



Sec. 586.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibition in Sec. 586.201 held in 
the name of a person whose property is blocked pursuant to Sec. 586.201 
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.



Sec. 586.302  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. eastern daylight time, June 10, 1998, except, with respect to 
Sec. 586.201(c), 12:01 a.m. eastern standard time, January 19, 2001, 
shall apply.

[66 FR 50509, Oct. 3, 2001]



Sec. 586.303  Entity.

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



Sec. 586.304  Federal Republic of Yugoslavia (Serbia & Montenegro); FRY (S&M).

    The term Federal Republic of Yugoslavia (Serbia & Montenegro) or FRY 
(S&M) means the territory of the Republics of Serbia and Montenegro.



Sec. 586.305  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.



Sec. 586.306  Government of the Federal Republic of Yugoslavia (Serbia and Montenegro).

    The term Government of the Federal Republic of Yugoslavia (Serbia 
and Montenegro) means the government of the FRY (S&M), its agencies, 
instrumentalities, and controlled entities, including all financial 
institutions and state-owned and socially-owned entities organized or 
located in the FRY (S&M) as of June 9, 1998, any successors to such 
entities, and their respective subsidiaries and branches, wherever 
located, and any persons acting or purporting to act for or on behalf of 
any of the foregoing.

    Note to Sec. 586.306: Please refer to the appendices at the end of 
this chapter for listings of persons determined to fall within this 
definition who have been designated pursuant to this part. Section 
501.807 of this chapter sets forth the procedures to be followed by 
persons seeking administrative reconsideration of their designations, or 
who wish to assert that the circumstances resulting in designation are 
no longer applicable.



Sec. 586.307  Government of the Republic of Montenegro.

    The term Government of the Republic of Montenegro means the 
government of the Republic of Montenegro, including any subdivisions 
thereof or local governments therein, its agencies, instrumentalities 
and controlled entities, including all financial institutions and state-
owned and socially-owned entities organized or located in the Republic 
of Montenegro as of June 9, 1998, any successors to such entities, and 
their respective subsidiaries and branches, wherever located, and any 
persons acting or purporting to act for or on behalf of any of the 
foregoing.


[[Page 826]]


    Note to Sec. 586.307: Section 586.516 authorizes all transactions by 
U.S. persons involving property or interests in property of the 
Government of the Republic of Montenegro, unless such property remains 
blocked pursuant to the Federal Republic of Yugoslavia (Serbia and 
Montenegro) and Bosnian Serb-Controlled Areas of the Republic of Bosnia 
and Herzegovina Sanctions Regulations, 31 CFR part 585 (see 
Sec. 585.525).



Sec. 586.308  Government of the Republic of Serbia.

    The term Government of the Republic of Serbia means the government 
of the Republic of Serbia, including any subdivisions thereof or local 
governments therein, its agencies, instrumentalities, and controlled 
entities, including all financial institutions and state-owned and 
socially-owned entities organized or located in the Republic of Serbia 
as of June 9, 1998, any successors to such entities, and their 
respective subsidiaries and branches, wherever located, and any persons 
acting or purporting to act for or on behalf of any of the foregoing.

    Note to Sec. 586.308: Please refer to the appendices at the end of 
this chapter for listings of persons determined to fall within this 
definition who have been designated pursuant to this part. Section 
501.807 of this chapter sets forth the procedures to be followed by 
persons seeking administrative reconsideration of their designations, or 
who wish to assert that the circumstances resulting in designation are 
no longer applicable.



Sec. 586.309  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 heading 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. 586.310  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. 586.311  License.

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



Sec. 586.312  New investment.

    The term new investment means the acquisition of debt or equity 
interests in, a commitment or contribution of funds or other assets to, 
or a loan or other extension of credit to, a public or private 
undertaking, entity, or project, including the Government of the 
Republic of Serbia, other than donations of funds to charitable 
organizations for purely humanitarian purposes.



Sec. 586.313  Person.

    The term person means an individual or entity.



Sec. 586.314  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

[[Page 827]]

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. 586.315  Specific license.

    The term specific license means any license or authorization not set 
forth in this part but issued pursuant to this part.



Sec. 586.316  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. 586.317  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. 586.318  United States.

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



Sec. 586.319  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.

[66 FR 50509, Oct. 3, 2001]



                       Subpart D--Interpretations



Sec. 586.401  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 refers to the same as currently amended.

[[Page 828]]



Sec. 586.402  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 does 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. 586.403  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 or interests in property are 
blocked pursuant to Sec. 586.201, such property shall no longer be 
deemed to be property blocked pursuant to Sec. 586.201, unless there 
exists in the property another interest that is blocked pursuant to 
Sec. 586.201 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 interests in property are blocked pursuant to 
Sec. 586.201, such property shall be deemed to be property in which that 
person has an interest and therefore blocked.



Sec. 586.404  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. 586.201 if effected after the effective date.



Sec. 586.405  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) An incidental transaction, not explicitly authorized within the 
terms of the license, by or with a person whose property or interests in 
property are blocked pursuant to Sec. 586.201; or
    (b) An incidental transaction, not explicitly authorized within the 
terms of the license, involving a debit or credit to a blocked account 
or a transfer of blocked property.

[66 FR 50509, Oct. 3, 2001]



Sec. 586.406  Provision of services.

    (a) Except as otherwise authorized, the prohibitions contained in 
Sec. 586.201 apply to services performed by U.S. persons, wherever 
located:
    (1) On behalf of, or for the benefit of, a person whose property or 
interests in property are blocked pursuant to Sec. 586.201; or
    (2) With respect to property interests of a person whose property or 
interests in property are blocked pursuant to Sec. 586.201.
    (b) 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 persons whose 
property or interests in property are blocked pursuant to Sec. 586.201. 
See Sec. 586.509 on licensing policy with regard to the provision of 
certain legal services.

[63 FR 54576, Oct. 13, 1998, as amended at 66 FR 50509, Oct. 3, 2001]



Sec. 586.407  Offshore transactions.

    (a) The prohibitions contained in Sec. 586.201 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, that 
a person whose property and interests in property are blocked pursuant 
to Sec. 586.201 has or has had an interest since the effective date.
    (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,

[[Page 829]]

incorporating, transforming, brokering, or otherwise dealing in, within 
such locations, goods, technology or services in which the U.S. person 
knows, or has reason to know, that a person whose property and interests 
in property are blocked pursuant to Sec. 586.201 has or has had an 
interest since the effective date.
    (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, furniture, shoes or 
other goods manufactured by a state or socially-owned entity organized 
or located in the FRY (S&M).
    (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 knows or has reason to know is a state or socially-owned 
entity within the territory of the FRY (S&M), or which benefits or 
supports the business of such an entity, 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.

    Note to Sec. 586.407: See Sec. 586.513 with regard to the 
authorization of certain trade-related transactions.



Sec. 586.408  Exempt financial transactions within the territory of the FRY (S&M); prohibition on establishment of new offices in Serbia.

    (a) Section 586.201(c) exempts financial transactions, including 
trade financing, from the prohibitions contained in Sec. 586.201 by U.S. 
persons physically located within the territory of the FRY (S&M), where 
those transactions are conducted exclusively through the domestic 
banking system within the FRY (S&M) in local currency (dinars), or using 
bank notes or barter. A U.S. entity must have a permanent establishment, 
such as a branch or representative office, within the territory of the 
FRY (S&M) to be considered physically located there for purposes of this 
paragraph (a).
    (b) The prohibition on new investment within Serbia contained in 
Sec. 586.204, as defined in Sec. 586.312, precludes the establishment 
after the effective date of a new representative or branch office or 
joint venture or other entity within the territory of the Republic of 
Serbia, because such activity would necessarily involve a commitment or 
contribution of funds or other assets to a public or private 
undertaking, entity, or project within Serbia. See Sec. 586.513 
concerning the authorization of certain trade-related transactions 
conducted using bank notes or barter by U.S. persons located outside of 
the territory of the FRY (S&M).

    Note to Sec. 586.408: All transactions with respect to property in 
which the Government of the Republic of Montenegro has an interest are 
authorized pursuant to Sec. 586.516. Therefore, all financial 
transactions by U.S. persons within the territory of the Republic of 
Montenegro are authorized, unless the transaction involves property in 
which another interest exists that is blocked pursuant to Sec. 586.201 
or any other part of this chapter. See Sec. 586.403.



Sec. 586.409  Approval or other facilitation of other persons' investment in the territory of the Republic of Serbia.

    (a) The prohibition contained in Sec. 586.204 against approval or 
other facilitation by U.S. persons of other persons' investment in the 
territory of the Republic of Serbia bars any action by a U.S. person 
that assists or supports other persons' activity that would constitute 
prohibited new investment under that section if engaged in by a U.S. 
person. Such approval or other facilitation with respect to persons 
whose property or interests in property are blocked pursuant to 
Sec. 586.201 also constitutes a violation of that section. See the 
definition of the term new investment in Sec. 586.312.
    (b) Examples: (1) A U.S. person is prohibited from brokering, 
financing, guaranteeing, or approving the purchase by any other person, 
including a foreign affiliate, of shares, including an equity interest, 
in a publicly or privately held undertaking, entity or project located 
in the territory of the Republic of Serbia, except as provided in 
Sec. 586.514.
    (2) The sale to a non-U.S. person of a U.S. person's equity or 
income interest in an entity in the territory of the Republic of Serbia 
constitutes facilitation of that other person's investment

[[Page 830]]

in Serbia, and would otherwise be prohibited but for the authorization 
contained in Sec. 586.514.
    (3) A U.S. national or permanent resident alien employed by a 
foreign person may not participate in any decision-making role in an 
activity by the foreign person that includes investment in the territory 
of the Republic of Serbia.



Sec. 586.410  Transfer of funds to the benefit of certain persons in the territory of the FRY (S&M).

    Section 586.201 does not prohibit U.S. financial institutions that 
are not blocked, including their foreign branches, from transferring 
funds to accounts in financial institutions for the benefit of 
individuals, non-governmental organizations and other persons located in 
the territory of the FRY (S&M) whose property and interests in property 
are not blocked pursuant to that section, provided that such 
transactions do not result in the transfer of funds to or for the 
benefit of persons whose property or interests in property are blocked 
pursuant to Sec. 586.201.



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 586.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see subpart D of 
part 501 of this chapter. Licensing actions pursuant to part 501 of this 
chapter with respect to the prohibitions of this part are considered 
actions pursuant to this part.

[63 FR 54576, Oct. 13, 1998, as amended at 66 FR 50509, Oct. 3, 2001]



Sec. 586.502  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 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 
specifically so 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 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 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.

    Note to paragraph (c) of Sec. 586.502:
    The general license in Sec. 586.516 authorizing transactions with 
respect to property in which the Government of the Republic of 
Montenegro has an interest removes such property and interests in 
property from the phrase ``property and interests in property blocked 
pursuant to Sec. 586.201'' for purposes of this part.

    (d) Any general license or statement of licensing policy contained 
in this part authorizing transactions with respect to the Government of 
the FRY (S&M) shall, unless otherwise stated, also authorize analogous 
transactions with respect to the Governments or territories of the 
Republic of Serbia and the Republic of Montenegro.



Sec. 586.503  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 is binding upon all 
persons receiving actual or constructive notice of such exclusion or 
restriction.

[[Page 831]]



Sec. 586.504  Payments and transfers to blocked accounts in U.S. financial institutions.

    Any payment of funds or transfer of credit in which any person whose 
property and interests in property are blocked pursuant to Sec. 586.201 
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. 586.504: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers. See 
also Sec. 586.203 concerning the obligation to hold blocked funds in 
interest-bearing accounts.



Sec. 586.505  Payment of obligations to U.S. persons 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 to U.S. persons of persons whose property or interests in 
property are blocked pursuant to Sec. 586.201 is authorized, provided 
that the obligation arose prior to the effective date or is otherwise 
authorized pursuant to statute or the provisions of this part, 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. 586.201 must be to a blocked account in a U.S. financial 
institution.

    Note to Sec. 586.505: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers. See 
also Sec. 586.203 concerning the obligation to hold blocked funds in 
interest-bearing accounts.



Sec. 586.506  Investment and reinvestment of certain funds.

    U.S. financial institutions are authorized to invest and reinvest 
assets blocked pursuant to Sec. 586.201, 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 in no case may funds be transferred 
outside the United States for this purpose; and
    (b) The proceeds of such investments and reinvestments are not 
credited 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 funds or securities were 
held; and
    (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. 586.201.



Sec. 586.507  Completion of certain transactions related to bankers acceptances authorized.

    Persons other than those whose property or interests in property are 
blocked pursuant to Sec. 586.201 are authorized to buy, sell, and 
satisfy obligations with respect to bankers acceptances, and to pay 
under deferred payment undertakings, involving a property interest 
blocked pursuant to Sec. 586.201, as long as the bankers acceptances 
were created or the deferred payment undertakings were incurred prior to 
the effective date.



Sec. 586.508  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

[[Page 832]]

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.



Sec. 586.509  Provision of certain legal services authorized.

    (a) The provision to or on behalf of a person whose property or 
interests in property are blocked pursuant to Sec. 586.201 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, from unblocked sources, of payment of professional 
fees and reimbursement of incurred expenses for the following legal 
services by U.S. persons to a person whose property or interests in 
property are blocked pursuant to Sec. 586.201:
    (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 person whose property or interests in 
property are blocked pursuant to Sec. 586.201 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 a person whose property or interests in property 
are blocked pursuant to Sec. 586.201;
    (4) Representation of a person whose property and interests in 
property are blocked pursuant to Sec. 586.201 before any federal or 
state agency with respect to the imposition, administration, or 
enforcement of U.S. sanctions against such person; 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) The provision of any other legal services to a person whose 
property or interests in property are blocked pursuant to Sec. 586.201, 
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 person whose property or interests in 
property are blocked pursuant to Sec. 586.201 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 such person is 
prohibited unless specifically licensed in accordance with 
Sec. 586.202(e).



Sec. 586.510  Transactions related to telecommunications authorized.

    All transactions with respect to the receipt and transmission of 
telecommunications involving the FRY (S&M) are authorized. This section 
does not authorize the provision to any person whose property or 
interests in property are blocked pursuant to Sec. 586.201 of 
telecommunications equipment or technology, nor the sale or leasing of 
telecommunications transmission facilities (such as satellite links or 
dedicated lines).



Sec. 586.511  Transactions related to mail authorized.

    All transactions by U.S. persons, including payment and transfers to 
common carriers, incident to the receipt or transmission of mail between 
the United States and the FRY (S&M) are authorized, provided that mail 
is limited to personal communications not involving a transfer of 
anything of value.



Sec. 586.512  Certain transactions related to patents, trademarks and copyrights authorized.

    (a) All of the following transactions in connection with patent, 
trademark,

[[Page 833]]

copyright or other intellectual property protection in the United States 
or the FRY (S&M) 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 (b) may not be made from a blocked account.
    (c) This section authorizes the payment of fees currently due to the 
Government of the FRY (S&M), or of the reasonable and customary fees and 
charges currently due to attorneys or representatives within the 
territory of the FRY (S&M), 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.



Sec. 586.513  Certain transactions with respect to trade with blocked persons authorized.

    (a) U.S. persons may trade in goods in which a person whose property 
and interests in property are blocked pursuant to Sec. 586.201 has an 
interest, provided that the payment for the goods is made in bank notes 
and coins of any currency or by barter. Any open account credit terms 
may not exceed 30 days. Transactions relating to services incident to 
this trade in goods, including payment for shipping and insurance to 
non-blocked entities, are authorized.
    (b) Example: A U.S. company located outside of Serbia may ship goods 
to Serbia in exchange for bank notes and coins or under a barter 
arrangement in exchange for Serbian goods, exchanged directly with the 
U.S. company or assigned to a third company in satisfaction of an 
obligation owed that party by the U.S. company. Except as provided in 
Sec. 586.408 or otherwise specifically authorized, however, the U.S. 
company may not establish or use an account at a financial institution 
within the territory of the Republic of Serbia in connection with any 
trade transaction described in this section.



Sec. 586.514  Divestiture of U.S. person's equity investment in the territory of the Republic of Serbia.

    Notwithstanding the prohibition in Sec. 586.204 against the 
facilitation by a U.S. person of other persons' new investment in the 
territory of the Republic of Serbia, all transactions related to the 
divestiture or transfer to a non-U.S. person, other than a person whose 
property or property interests are blocked pursuant to Sec. 586.201 or 
this chapter, of a U.S. person's investment in the Republic of Serbia 
are authorized.



Sec. 586.515  Payments for services rendered by the Government of the FRY (S&M) to aircraft authorized; aircraft and maritime safety.

    (a) Payments to the Government of the FRY (S&M) of charges for 
services rendered by that Government in connection with the overflight 
of the territory of the FRY (S&M) or emergency landing in the FRY (S&M) 
by aircraft are authorized.
    (b) 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.

[[Page 834]]



Sec. 586.516  Transactions with respect to property in which the Government of the Republic of Montenegro has an interest authorized.

    All transactions by U.S. persons involving property or interests in 
property in which the Government of the Republic of Montenegro has an 
interest are authorized, except with respect to property blocked 
pursuant to the Federal Republic of Yugoslavia (Serbia and Montenegro) 
and Bosnian Serb-Controlled Areas of the Republic of Bosnia and 
Herzegovina Sanctions Regulations, 31 CFR part 585 (see Sec. 585.525). 
Property and interests in property of the Government of Montenegro shall 
not be considered ``property and interests in property blocked pursuant 
to Sec. 586.201'' for purposes of this part. This authorization does not 
apply, however, to property in which the Government of Montenegro has an 
interest but in which there also exists an interest of another person 
whose property or interests in property are blocked pursuant to 
Sec. 586.201 or any other part of this chapter.



Sec. 586.517  Unblocking of certain debt.

    (a) Subject to the limitations in paragraph (c) below, debt 
obligations in the possession or control of U.S. persons for which the 
National Bank of Yugoslavia has joint or several liability and that were 
rescheduled pursuant to the ``New Financing Agreement'' of September 20, 
1988, are unblocked.
    (b) Specific licenses may be issued on a case-by-case basis to 
permit the unblocking of debt obligations not otherwise authorized under 
either paragraph (a) of this section or 31 CFR 585.509.
    (c) Nothing in this section authorizes transactions with any person 
designated in or pursuant to 31 CFR 587.201(a).

[66 FR 50509, Oct. 3, 2001]



Sec. 586.518  Authorization of release of certain blocked transfers by U.S. financial institutions.

    (a) Subject to the limitation set forth in this paragraph, U.S. 
financial institutions are authorized to unblock and return to the 
remitting party funds blocked pursuant to this part that came into their 
possession or control through wire transfer instructions or check 
remittances, provided those funds were not destined for an account 
established on the books of a U.S. financial institution by a person 
whose property or interests in property were blocked immediately prior 
to January 19, 2001. Funds otherwise eligible for release under this 
general license, however, may not be unblocked and returned if they were 
remitted by or destined for a person designated in or pursuant to 31 CFR 
587.201(a).
    (b) Funds blocked pursuant to this part that were destined through 
wire transfer instructions or check remittances for an account 
established on the books of a U.S. financial institution by a person 
whose property or interests in property were blocked immediately prior 
to January 19, 2001, remain blocked. If such funds are not already held 
in the account for which they were destined, they must be transferred to 
such an account by October 15, 2001, and maintained in blocked status 
pursuant to Sec. 586.201(c).

[66 FR 50509, Oct. 3, 2001]



Sec. 586.519  Release of certain funds held at overseas branches of U.S. financial institutions.

    Specific licenses may be issued on a case-by-case basis to permit 
the overseas branches of U.S. financial institutions to unblock deposit 
accounts that were blocked pursuant to this part prior to January 19, 
2001, and that were established outside of the United States in 
situations in which such accounts are not owned or controlled, directly 
or indirectly, by any person designated in or pursuant to 31 CFR 
Sec. 587.201(a).

[66 FR 50510, Oct. 3, 2001]



                           Subpart F--Reports



Sec. 586.601  Records and reports.

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



                          Subpart G--Penalties



Sec. 586.701  Penalties.

    (a) Attention is directed to section 206 of the International 
Emergency

[[Page 835]]

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. Section 206 of the Act, as adjusted by the 
Federal Civil Penalties Inflation Adjustment Act of 1990 (Public Law 
101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty not to exceed $11,000 per violation may be 
imposed on any person who violates, or attempts to violate, any license, 
order, or regulation issued under the Act;
    (2) Whoever willfully violates, or willfully attempts to violate, 
any license, order, or regulation issued under the Act, upon conviction, 
shall be fined not more than $50,000, and, if a natural person, may also 
be imprisoned for not more than 10 years; and any officer, director, or 
agent of any corporation who knowingly participates in such violation 
may be punished by a like fine, imprisonment, or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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 not more than five years, or 
both.
    (d) Violations of this part may also be subject to relevant 
provisions of other applicable laws.

[66 FR 50510, Oct. 3, 2001]



Sec. 586.702  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, 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 respondent's right to make a written presentation within 
the applicable 30-day period set forth in Sec. 586.703 as to why a 
monetary penalty should not be imposed or why, if imposed, the monetary 
penalty should be in a lesser amount than proposed.
    (c) Informal settlement prior to issuance of prepenalty notice. At 
any time prior to the issuance of a prepenalty notice, an alleged 
violator may request in writing that, for a period not to exceed sixty 
(60) days, the agency withhold issuance of the prepenalty notice for the 
exclusive purpose of effecting settlement of the agency's potential 
civil monetary penalty claims. In the event the Director grants the 
request, under terms and conditions within his 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 of the potential civil monetary penalty claim.

[66 FR 50510, Oct. 3, 2001]



Sec. 586.703  Response to prepenalty notice; informal settlement.

    (a) Deadline for response. The respondent may submit a response to 
the prepenalty notice within the applicable

[[Page 836]]

30-day period set forth in this paragraph. The Director may grant, at 
his 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 
writing and may be handwritten or typed. The response need not be in any 
particular form. A copy of the written response may be sent by 
facsimile, but the original must also 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.
    (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 should also 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.
    (d) Default. If the respondent elects not to submit a written 
response within the time limit set forth in paragraph (a) of this 
section, the Office of Foreign Assets Control will conclude that the 
respondent has decided not to respond to the prepenalty notice. The 
agency generally will then issue a written penalty notice imposing the 
penalty proposed in the prepenalty notice.
    (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 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 (f) 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

[[Page 837]]

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) 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.

[66 FR 50510, Oct. 3, 2001]



Sec. 586.704  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 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 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 final agency 
action in federal district court.

[66 FR 50511, Oct. 3, 2001]



Sec. 586.705  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 federal district court.

[66 FR 50511, Oct. 3, 2001]



                          Subpart H--Procedures



Sec. 586.801  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 
subpart D of part 501 of this chapter.



Sec. 586.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13088 (63 FR 32109, June 12, 1998), and any 
further Executive orders relating to the national emergency declared in 
Executive Order 13088, 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.

[[Page 838]]



                   Subpart I--Paperwork Reduction Act



Sec. 586.901  Paperwork Reduction Act notice.

    For approval by OMB under the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507) 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.



PART 587--FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND MONTENEGRO) MILOSEVIC SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

587.201   Prohibited transactions involving blocked property.
587.202   Effect of transfers violating the provisions of this part.
587.203   Holding of funds in interest-bearing accounts; investment and 
          reinvestment.
587.204   Evasions; attempts; conspiracies.
587.205   Expenses of maintaining blocked property; liquidation of 
          blocked account.
587.206   Exempt transactions.

                     Subpart C--General Definitions

587.301   Blocked account; blocked property.
587.302   Effective date.
587.303   Entity.
587.304   Information or informational materials.
587.305   Interest.
587.306   Licenses; general and specific.
587.307   Person.
587.308   Property; property interest.
587.309   Transfer.
587.310   United States.
587.311   U.S. financial institution.
587.312   United States person; U.S. person.

                       Subpart D--Interpretations

587.401   Reference to amended sections.
587.402   Effect of amendment.
587.403   Termination and acquisition of an interest in blocked 
          property.
587.404   Transactions incidental to a licensed transaction.
587.405   Provision of services.
587.406   Offshore transactions.
587.407   Payments from blocked accounts to satisfy obligations 
          prohibited.
587.408   Credit extended and cards issued by U.S. financial 
          institutions.
587.409   Setoffs prohibited.

 Subpart E--Licenses, Authorizations and Statements of Licensing Policy

587.501   General and specific licensing procedures.
587.502   Effect of license or authorization.
587.503   Exclusion from licenses.
587.504   Payments and transfers to blocked accounts in U.S. financial 
          institutions.
587.505   Entries in certain accounts for normal service charges 
          authorized.
587.506   Investment and reinvestment of certain funds.
587.507   Provision of certain legal services authorized.
587.508   Authorization of emergency medical services.

                           Subpart F--Reports

587.601   Records and reports.

                          Subpart G--Penalties

587.701   Penalties.
587.702   Prepenalty notice.
587.703   Response to prepenalty notice; informal settlement.
587.704   Penalty imposition or withdrawal.
587.705   Administrative collection; referral to United States 
          Department of Justice.

                          Subpart H--Procedures

587.801   Procedures.
587.802   Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

587.901   Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c, 31 U.S.C. 321(b); 50 U.S.C. 
1601-1651, 1701-1706; E.O. 13088, 63 FR 32109, 3 CFR, 98 Comp, p. 191; 
E.O. 13121, 64 FR 24021, 3 CFR, 99 Comp. p. 176; E.O. 13192, 65 FR 7379, 
January 23, 2001.

    Source: 66 FR 50511, Oct. 3, 2001, unless otherwise noted.

[[Page 839]]



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 587.101  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 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. 587.201  Prohibited transactions involving blocked property.

    (a) Except as 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, property or interests in property of any person 
designated below 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, are blocked and may not be transferred, paid, exported, 
withdrawn or otherwise dealt in:
    (1) Any person listed in the Annex to Executive Order 13192 of 
January 17, 2001 (66 FR 7379, January 23, 2001); and
    (2) Any person determined by the Secretary of the Treasury, in 
consultation with the Secretary of State:
    (i) To be under open indictment by the International Criminal 
Tribunal for the former Yugoslavia, subject to applicable laws and 
procedures;
    (ii) To have sought, or to be seeking, through repressive measures 
or otherwise, to maintain or reestablish illegitimate control over the 
political processes or institutions or the economic resources or 
enterprises of the Federal Republic of Yugoslavia, the Republic of 
Serbia, the Republic of Montenegro or the territory of Kosovo;
    (iii) To have provided material support or resources to any person 
designated in the Annex to Executive Order 13192 or any person otherwise 
designated by the Secretary of the Treasury pursuant to this section; or
    (iv) To be owned or controlled by or acting or purporting to act 
directly or indirectly for or on behalf of any person designated in the 
Annex to Executive Order 13192 or any person otherwise designated by the 
Secretary of the Treasury pursuant to this section.
    Note to paragraph (a) of Sec. 587.201:
    Persons designated pursuant to Sec. 587.201(a)(1) or (2) are listed 
with the acronym [FRYM] in appendix A to 31 CFR chapter V. Section 
501.807 of this chapter V sets forth the procedures to be followed by 
persons seeking administrative reconsideration of their designation or 
who wish to assert that the circumstances resulting in designation no 
longer apply. Similarly, 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 to 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.
    (b) Except as 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, any transaction or dealing by U.S. persons, wherever 
located, or within the United States in property or interests in 
property of any person designated in or pursuant to Sec. 587.201(a) are 
prohibited.
    (c) Unless otherwise authorized by this part or by a specific 
license expressly referring to this section, any dealing in any security 
(or evidence thereof) held within the possession or control of a U.S. 
person and either registered or inscribed in the name of or

[[Page 840]]

known to be held for the benefit of any person designated in or pursuant 
to Sec. 587.201(a) 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 any such security or the endorsement or 
guaranty of signatures on any such security. 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.



Sec. 587.202  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. 587.201(a), is null and void and shall not be the basis for the 
assertion or recognition of any interest in or right, remedy, power, or 
privilege with respect to such property or property interests.
    (b) No transfer before the effective date shall be the basis for the 
assertion or recognition of any right, remedy, power, or privilege with 
respect to, or any interest in, any property or interest in property 
blocked pursuant to Sec. 587.201(a), unless the person with whom such 
property is held or maintained, prior to that date, had written notice 
of the transfer or by any written evidence had recognized such transfer.
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by or pursuant to the direction or authorization of 
the Director of the Office of Foreign Assets Control before, during, or 
after a transfer shall validate such transfer or make it enforceable to 
the same extent that it would be valid or enforceable but for the 
provisions of the International Emergency Economic Powers Act, 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 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 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 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 issued pursuant to this part;
    (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 withholding 
of material facts or was otherwise fraudulently obtained.
    Note to paragraph (d) of Sec. 587.202:
    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

[[Page 841]]

other judicial process is null and void with respect to any property in 
which on or since the effective date of Sec. 587.201 there existed an 
interest of a person designated in or pursuant to Sec. 587.201(a).



Sec. 587.203  Holding of funds in interest-bearing accounts; investment and reinvestment.

    (a) Except as provided in paragraph (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. 587.201(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, 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. 587.201(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 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. 587.201(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.
    (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. 587.201(a). 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 that provides immediate financial or economic 
benefit or access to any person designated in or pursuant to 
Sec. 587.201(a), nor may their holder cooperate in or facilitate the 
pledging or other attempted use as collateral of blocked funds or other 
assets.



Sec. 587.204  Evasions; attempts; conspiracies.

    (a) Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, any transaction by any 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, or attempts to violate any of the prohibitions set 
forth in this part is prohibited.
    (b) Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, any conspiracy formed for the purpose of engaging in a transaction 
prohibited by this part is prohibited.



Sec. 587.205  Expenses of maintaining blocked property; liquidation of blocked account.

    (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 before 12:01 a.m., eastern standard time, January 19, 
2001, all expenses incident to the

[[Page 842]]

maintenance of physical property blocked pursuant to Sec. 587.201(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. 587.201(a) may, in the 
discretion of the Director, Office of Foreign Assets Control, be sold or 
liquidated and the net proceeds placed in a blocked interest-bearing 
account in the name of the owner of the property.



Sec. 587.206  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) Humanitarian donations. The prohibitions contained in this part 
do not apply to donations by U.S. persons of articles, such as food, 
clothing, and medicine, intended to be used to relieve human suffering.
    (c) Information or informational materials. (1) The importation from 
any country and the exportation to any country of information or 
informational materials, as defined in Sec. 587.304, whether commercial 
or otherwise, regardless of format or medium of transmission, are exempt 
from the prohibitions of this part.
    (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, 
with respect to information or informational materials imported from 
persons designated in or pursuant to Sec. 587.201(a), 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, technology or software, 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 designated in or pursuant to Sec. 587.201(a) are prohibited.
    (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 nonscheduled air, sea, or land 
voyages.



                     Subpart C--General Definitions



Sec. 587.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibitions in Sec. 587.201 held in 
the name of a person designated in or pursuant to Sec. 587.201(a), or in 
which a person designated in or pursuant to Sec. 587.201(a) 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.



Sec. 587.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this

[[Page 843]]

part, which is 12:01 a.m. eastern standard time, January 19, 2001, or, 
in the case of any person designated pursuant to Sec. 587.201(a)(2), the 
earlier of the date on which a person receives actual or constructive 
notice of such designation.



Sec. 587.303  Entity.

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



Sec. 587.304  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. 587.304.
    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. 587.305  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. 587.306  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. 587.306: See Sec. 501.801 of this chapter on licensing 
procedures.



Sec. 587.307  Person.

    The term person means an individual or entity.



Sec. 587.308  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. 587.309  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

[[Page 844]]

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. 587.310  United States.

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



Sec. 587.311  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 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 terms 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. 587.312  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.



                       Subpart D--Interpretations



Sec. 587.401  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. 587.402  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. 587.403  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. 587.201(a), unless there exists in 
the property another interest that is blocked pursuant to 
Sec. 587.201(a) or any other part of this

[[Page 845]]

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 designated in or pursuant to Sec. 587.201(a), such property shall 
be deemed to be property in which that person has an interest and 
therefore blocked.



Sec. 587.404  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) An incidental transaction, not explicitly authorized within the 
terms of the license, by or with a person whose property or interests in 
property are blocked pursuant to Sec. 587.201(a); or
    (b) An incidental transaction, not explicitly authorized within the 
terms of the license, involving a debit or credit to a blocked account 
or a transfer of blocked property.



Sec. 587.405  Provision of services.

    (a) Except as provided in Sec. 587.206, the prohibitions contained 
in Sec. 587.201 apply to services performed by U.S. persons, wherever 
located:
    (1) On behalf of or for the benefit of a person designated in or 
pursuant to Sec. 587.201(a); or
    (2) With respect to property interests of a person designated in or 
pursuant to Sec. 587.201(a).
    (b) Example: U.S. persons may not, except as authorized by or 
pursuant to this part, provide legal, accounting, financial, brokering, 
freight forwarding, transportation, public relations, or other services 
to a person designated in or pursuant to Sec. 587.201(a). See 
Secs. 587.507 and 587.508, respectively, on licensing policy with regard 
to the provision of certain legal or medical services.



Sec. 587.406  Offshore transactions.

    The prohibitions in Sec. 587.201 apply to transactions by any U.S. 
person in a location outside the United States with respect to property 
that the U.S. person knows, or has reason to know, is held in the name 
of a person designated in or pursuant to Sec. 587.201(a) or in which the 
U.S. person knows, or has reason to know, a person designated in or 
pursuant to Sec. 587.201(a) has or has had an interest since the 
effective date.



Sec. 587.407  Payments from blocked accounts to satisfy obligations prohibited.

    Pursuant to Sec. 587.201, no debits may be made to a blocked account 
to pay obligations to U.S. persons or other persons, except as 
authorized pursuant to this part.



Sec. 587.408  Credit extended and cards issued by U.S. financial institutions.

    Section 587.201 on dealing in property in which a person designated 
in or pursuant to Sec. 587.201(a) 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 in or pursuant to Sec. 587.201(a).



Sec. 587.409  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. 587.201 if effected after the effective date.



 Subpart E--Licenses, Authorizations and Statements of Licensing Policy



Sec. 587.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501, 
subpart D 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.



Sec. 587.502  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 Director of the Office 
of Foreign Assets Control, authorizes or validates any transaction 
effected prior to the

[[Page 846]]

issuance of the license, unless specifically provided in such licenses 
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 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 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. 587.503  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. 587.504  Payments and transfers to blocked accounts in U.S. financial institutions.

    Any payment of funds or transfer of credit in which a person 
designated in or pursuant to Sec. 587.201(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 only be made to 
another blocked account held in the same name.
    Note to Sec. 587.504. Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers. See 
also Sec. 587.203 concerning the obligation to hold blocked funds in 
interest-bearing accounts.



Sec. 587.505  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 charge 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.



Sec. 587.506  Investment and reinvestment of certain funds.

    Subject to the requirements of Sec. 587.201, U.S. financial 
institutions are authorized to invest and reinvest assets blocked 
pursuant to Sec. 587.201, 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

[[Page 847]]

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 persons designated in or pursuant to 
Sec. 587.201(a).



Sec. 587.507  Provision of certain legal services authorized.

    (a) Provision of the legal services set forth in paragraph (b) of 
this section to or on behalf of persons designated in or pursuant to 
Sec. 587.201(a) is authorized, provided that all receipts of payment of 
professional fees and reimbursement of incurred expenses must be 
specifically licensed.
    (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 persons specified in paragraph (a) of this 
section:
    (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 in violation of this part;
    (2) Representation of persons when 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.
    (c) Provision of any other legal services to persons designated in 
or pursuant to Sec. 587.201(a), not otherwise authorized in this part, 
requires the issuance of a specific license.
    (d) Entry into a settlement agreement affecting property or 
interests in property 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. 587.201 is 
prohibited unless specifically licensed in accordance with 
Sec. 587.202(e).



Sec. 587.508  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services in the 
United States to persons designated in or pursuant to Sec. 587.201(a) is 
authorized, provided that all receipt of payment for such services must 
be specifically licensed.



                           Subpart F--Reports



Sec. 587.601  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. 587.701  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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Public Law 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty not to exceed $11,000 per violation may be 
imposed on any person who violates or attempts to violate any license, 
order, or regulation issued under the Act;
    (2) Whoever willfully violates or willfully attempts to violate any 
license, order, or regulation issued under the Act, upon conviction, 
shall be fined not

[[Page 848]]

more than $50,000 and, if a natural person, may also be imprisoned for 
not more than 10 years; and any officer, director, or agent of any 
corporation who knowingly participates in such violation may be punished 
by a like fine, imprisonment, or both.
    (b) The criminal penalties provided in the Act are subject to 
increase pursuant to 18 U.S.C. 3571.
    (c) Attention is directed to section 5 of the United Nations 
Participation Act (22 U.S.C. 287c(b)), which provides that any person 
who willfully violates or evades or attempts to violate or evade any 
order, rule, or regulation issued by the President pursuant to the 
authority granted in that section, upon conviction, shall be fined not 
more than $10,000 and, if a natural person, may also be imprisoned for 
not more than 10 years; and the officer, director, or agent of any 
corporation who knowingly participates in such violation or evasion 
shall be punished by a like fine, imprisonment, or both, and any 
property, funds, securities, papers, or other articles or documents, or 
any vessel, together with her tackles, apparel, furniture, and 
equipment, or vehicle, or aircraft, concerned in such violation shall be 
forfeited to the United States. The criminal penalties provided in the 
United Nations Participation Act are subject to increase pursuant to 18 
U.S.C. 3571.
    (d) 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 not more than five years, or 
both.
    (e) Violations of this part may also be subject to relevant 
provisions of other applicable laws.



Sec. 587.702  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, 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 respondent's right to make a written presentation within 
the applicable 30 day period set forth in Sec. 587.703 as to why a 
monetary penalty should not be imposed or why, if imposed, the monetary 
penalty should be in a lesser amount than proposed.
    (c) Informal settlement prior to issuance of prepenalty notice. At 
any time prior to the issuance of a prepenalty notice, an alleged 
violator may request in writing that, for a period not to exceed sixty 
(60) days, the agency withhold issuance of the prepenalty notice for the 
exclusive purpose of effecting settlement of the agency's potential 
civil monetary penalty claims. In the event the Director grants the 
request, under terms and conditions within his 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 of the potential civil monetary penalty claim.

[[Page 849]]



Sec. 587.703  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 his 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 
writing and may be handwritten or typed. 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.
    (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 not be imposed or 
why, if imposed, it should be in a lesser amount than proposed.
    (d) Default. If the respondent elects not to submit a written 
response within the time limit set forth in paragraph (a) of this 
section, the Office of Foreign Assets Control will conclude that the 
respondent has decided not to respond to the prepenalty notice. The 
agency generally will then issue a written penalty notice imposing the 
penalty proposed in the prepenalty notice.
    (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 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 (f) 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

[[Page 850]]

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) 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.



Sec. 587.704  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 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 final agency 
action in federal district court.



Sec. 587.705  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. 587.801  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. Secs. 552 and 552a), 
see part 501, subpart D, of this chapter.



Sec. 587.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13192 of January 17, 2001 (66 FR 7379, 
January 23, 2001) and any further Executive orders relating to the 
national emergency declared in Executive Order 13088 of June 9, 1988 (63 
FR 32109, June 12, 1998) may be taken by the Director of the Office of 
Foreign Assets Control or by any

[[Page 851]]

other person to whom the Secretary of the Treasury has delegated 
authority so to act.



                   Subpart I--Paperwork Reduction Act



Sec. 587.901  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.



 PART 588--WESTERN BALKANS STABILIZATION REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

588.201  Prohibited transactions involving blocked property.
588.202  Effect of transfers violating the provisions of this part.
588.203  Holding of funds in interest-bearing accounts; investment and 
          reinvestment.
588.204  Evasions; attempts; conspiracies.
588.205  Expenses of maintaining blocked property; liquidation of 
          blocked account.
588.206  Exempt transactions.

                     Subpart C--General Definitions

588.301  Blocked account; blocked property.
588.302  Effective date.
588.303  Entity.
588.304  Information or informational materials.
588.305  Interest.
588.306  Licenses; general and specific.
588.307  Person.
588.308  Property; property interest.
588.309  Transfer.
588.310  United States.
588.311  U.S. financial institution.
588.312  United States person; U.S. person.

                       Subpart D--Interpretations

588.401  Reference to amended sections.
588.402  Effect of amendment.
588.403  Termination and acquisition of an interest in blocked property.
588.404  Transactions incidental to a licensed transaction.
588.405  Provision of services.
588.406  Offshore transactions.
588.407  Payments from blocked accounts to satisfy obligations 
          prohibited.
588.408  Charitable contributions.
588.409  Credit extended and cards issued by U.S. financial 
          institutions.
588.410  Setoffs prohibited.

 Subpart E--Licenses, Authorizations and Statements of Licensing Policy

588.501  General and specific licensing procedures.
588.502  Effect of license or authorization.
588.503  Exclusion from licenses.
588.504  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
588.505  Entries in certain accounts for normal service charges 
          authorized.
588.506  Investment and reinvestment of certain funds.
588.507  Provision of certain legal services authorized.
588.508  Authorization of emergency medical services.

                           Subpart F--Reports

588.601  Records and reports.

                          Subpart G--Penalties

588.701  Penalties.
588.702  Prepenalty notice.
588.703  Response to prepenalty notice; informal settlement.
588.704  Penalty imposition or withdrawal.
588.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H--Procedures

588.801  Procedures.
588.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

588.901  Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; E.O. 13219, 66 FR 34777, June 29, 2001, 3 CFR, 2001 Comp., p. 
778.

    Source:  67 FR 37673, May 30, 2002, unless otherwise noted.

[[Page 852]]



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 588.101  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. 588.201  Prohibited transactions involving blocked property.

    (a) Except as 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, property or interests in property of the following 
persons 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, are blocked 
and may not be transferred, paid, exported, withdrawn or otherwise dealt 
in:
    (1) Any person listed in the Annex to Executive Order 13219 of June 
26, 2001 (3 CFR, 2001 Comp., p. 778); and
    (2) Any person designated by the Secretary of the Treasury, in 
consultation with the Secretary of State, because they are found:
    (i) To have committed, or to pose a significant risk of committing, 
acts of violence that have the purpose or effect of threatening the 
peace in or diminishing the stability or security of any area or state 
in the Western Balkans region, undermining the authority, efforts, or 
objectives of international organizations or entities present in the 
region, or endangering the safety of persons participating in or 
providing support to the activities of those international organizations 
or entities; or
    (ii) To have actively obstructed, or to pose a significant risk of 
actively obstructing, implementation of the Dayton Accords in Bosnia or 
United Nations Security Council Resolution 1244 of June 10, 1999, in 
Kosovo; or
    (iii) Materially to assist in, sponsor, or provide financial support 
for, or goods or services in support of, such acts of violence and 
obstructionism; or
    (iv) To be owned or controlled by, or acting or purporting to act 
directly or indirectly for or on behalf of, any person designated in the 
Annex to Executive Order 13219 or any person otherwise designated by the 
Secretary of the Treasury pursuant to this section.

    Note to paragraph (a) of Sec. 588.201:
    The names of persons whose property or interests in property are 
blocked pursuant to paragraph (a) of this section will be published on 
OFAC's website, announced in the Federal Register and incorporated on an 
ongoing basis with the identifier [BALKANS] into appendix A to 31 CFR 
chapter V. Section 501.807 of this chapter V sets forth the procedures 
to be followed by persons seeking administrative reconsideration of 
their designation pursuant to paragraph (a)(2) of this section or who 
wish to assert that the circumstances resulting in designation no longer 
apply. Similarly, 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 to 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.

    (b) The blocking of property and interests in property pursuant to 
paragraph (a) of this section includes, but is not limited to, the 
prohibition of the making or receiving by a United States person of any 
contribution or provision of funds, goods or services to or for the 
benefit of a person whose property or

[[Page 853]]

interests in property are blocked pursuant to paragraph (a) of this 
section.
    (c) Unless otherwise authorized by this part or by a specific 
license expressly referring to this section, any dealing in any security 
(or evidence thereof) held within the possession or control of a U.S. 
person and either registered or inscribed in the name of or known to be 
held for the benefit of any person whose property or 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 
any such security or the endorsement or guaranty of signatures on any 
such security. 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.



Sec. 588.202  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. 588.201(a), is null and void and shall not be the basis for the 
assertion or recognition of any interest in or right, remedy, power, or 
privilege with respect to such property or property interests.
    (b) No transfer before the effective date shall be the basis for the 
assertion or recognition of any right, remedy, power, or privilege with 
respect to, or any interest in, any property or interest in property 
blocked pursuant to Sec. 588.201(a), unless the person with whom such 
property is held or maintained, prior to that date, had written notice 
of the transfer or by any written evidence had recognized such transfer.
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by or pursuant to the direction or authorization of 
the Director of the Office of Foreign Assets Control before, during, or 
after a transfer shall validate such transfer or make it enforceable to 
the same extent that it would be valid or enforceable but for the 
provisions of the International Emergency Economic Powers Act (50 U.S.C. 
1701 et seq.), 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 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 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 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 issued pursuant to this part;
    (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

[[Page 854]]

party or withholding of material facts or was otherwise fraudulently 
obtained.

    Note to paragraph (d) of Sec. 588.202:
    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 in which on or since the effective 
date there existed an interest of a person whose property or interests 
in property are blocked pursuant to Sec. 588.201(a).



Sec. 588.203  Holding of funds in interest-bearing accounts; investment and reinvestment.

    (a) Except as provided in paragraph (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. 588.201(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) 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. 588.201(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 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. 588.201(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.
    (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. 588.201(a). 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 that provides immediate financial or economic 
benefit or access to any person whose property or interests in property 
are blocked pursuant to Sec. 588.201(a), nor may their holder cooperate 
in or facilitate the pledging or other attempted use as collateral of 
blocked funds or other assets.



Sec. 588.204  Evasions; attempts; conspiracies.

    (a) Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, any transaction by any 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, or attempts to violate any of the prohibitions set 
forth in this part is prohibited.
    (b) Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, any conspiracy formed for the purpose of

[[Page 855]]

engaging in a transaction prohibited by this part is prohibited.



Sec. 588.205  Expenses of maintaining blocked property; liquidation of blocked account.

    (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 before 12:01 a.m., eastern daylight time, June 27, 2001, 
all expenses incident to the maintenance of physical property blocked 
pursuant to Sec. 588.201(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. 588.201(a) may, in the 
discretion of the Director, Office of Foreign Assets Control, be sold or 
liquidated and the net proceeds placed in a blocked interest-bearing 
account in the name of the owner of the property.



Sec. 588.206  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 importation from 
any country and the exportation to any country of information or 
informational materials, as defined in Sec. 588.304, whether commercial 
or otherwise, regardless of format or medium of transmission, are exempt 
from the prohibitions of this part.
    (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, 
with respect to information or informational materials imported from 
persons whose property or interests in property are blocked pursuant to 
Sec. 588.201(a), 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 730-774, or to the exportation of goods, 
technology or software, 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 or interests in property are blocked pursuant to 
Sec. 588.201(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 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 nonscheduled air, sea, or land 
voyages.



                     Subpart C--General Definitions



Sec. 588.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibitions in Sec. 588.201 held in 
the name of a person whose property or interests in property are blocked 
pursuant to Sec. 588.201(a), or in which such person has an interest, 
and with respect to which payments, transfers, exportations, 
withdrawals, or other dealings may not be made or effected except 
pursuant to an authorization or license from the Office of

[[Page 856]]

Foreign Assets Control expressly authorizing such action.



Sec. 588.302  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 a person whose property or interests in property 
are blocked pursuant to Sec. 588.201(a)(1), 12:01 a.m. eastern daylight 
time, June 27, 2001;
    (b) With respect to a person whose property or interests in property 
are blocked pursuant to Sec. 588.201(a)(2), the earlier of the date on 
which is received actual or constructive notice of such person's 
designation by the Secretary of the Treasury.



Sec. 588.303  Entity.

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



Sec. 588.304  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. 588.304.
    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. 588.305  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. 588.306  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. 588.306: See Sec. 501.801 of this chapter on licensing 
procedures.



Sec. 588.307  Person.

    The term person means an individual or entity.



Sec. 588.308  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

[[Page 857]]

any nature whatsoever, and any other property, real, personal, or mixed, 
tangible or intangible, or interest or interests therein, present, 
future or contingent.



Sec. 588.309  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 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. 588.310  United States.

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



Sec. 588.311  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 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 that are located in the 
United States, but not such institutions' foreign branches, offices, or 
agencies.



Sec. 588.312  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.



                       Subpart D--Interpretations



Sec. 588.401  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. 588.402  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

[[Page 858]]

be enforced as if such amendment, modification, or revocation had not 
been made.



Sec. 588.403  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. 588.201(a), unless there exists in 
the property another interest that is blocked pursuant to 
Sec. 588.201(a) or any other part of this chapter, the transfer of which 
has not been effected pursuant to license or other authorization.
    (b) Unless otherwise specifically provided in a license or 
authorization issued pursuant to this part, if property (including any 
property interest) is transferred or attempted to be transferred to a 
person whose property or interests in property are blocked pursuant to 
Sec. 588.201(a), such property shall be deemed to be property in which 
that person has an interest and therefore blocked.



Sec. 588.404  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) An incidental transaction, not explicitly authorized within the 
terms of the license, by or with a person whose property or interests in 
property are blocked pursuant to Sec. 588.201(a); or
    (b) An incidental transaction, not explicitly authorized within the 
terms of the license, involving a debit to a blocked account or a 
transfer of blocked property.



Sec. 588.405  Provision of services.

    (a) Except as provided in Sec. 588.206, the prohibitions on 
transactions involving blocked property contained in Sec. 588.201 apply 
to services performed in the United States or by U.S. persons, wherever 
located, including by an overseas branch of an entity located in the 
United States:
    (1) On behalf of or for the benefit of a person whose property or 
interests in property are blocked pursuant to Sec. 588.201(a); or
    (2) With respect to property interests subject to Sec. 588.201.
    (b) Example: U.S. persons may not, except as authorized by or 
pursuant to this part, provide legal, accounting, financial, brokering, 
freight forwarding, transportation, public relations, or other services 
to a person whose property or interests in property are blocked pursuant 
to Sec. 588.201(a).

    Note to Sec. 588.405: See Secs. 588.507 and 588.508, respectively, 
on licensing policy with regard to the provision of certain legal or 
medical services.



Sec. 588.406  Offshore transactions.

    The prohibitions in Sec. 588.201 on transactions involving blocked 
property apply to transactions by any U.S. person in a location outside 
the United States with respect to property that the U.S. person knows, 
or has reason to know, is held in the name of a person whose property or 
interests in property are blocked pursuant to Sec. 588.201(a) or in 
which the U.S. person knows, or has reason to know, a person whose 
property or interests in property are blocked pursuant to 
Sec. 588.201(a) has or has had an interest since the effective date.



Sec. 588.407  Payments from blocked accounts to satisfy obligations prohibited.

    Pursuant to Sec. 588.201, no debits may be made to a blocked account 
to pay obligations to U.S. persons or other persons, except as 
authorized pursuant to this part.



Sec. 588.408  Charitable contributions.

    Unless otherwise specifically authorized by the Office of Foreign 
Assets Control by or pursuant to this part, no charitable contribution 
or donation of funds, goods, services, or technology may be made to or 
for the benefit of a person whose property or interests in property are 
blocked pursuant to Sec. 588.201(a). For purposes of this part, a 
contribution or donation is made to or for the benefit of a person whose 
property or interests in property are blocked pursuant to 
Sec. 588.201(a) if made to or in the name of such a person; if made to 
or in the name of an entity or

[[Page 859]]

individual acting for or on behalf of, or owned or controlled by, such a 
person; or if made in an attempt to violate, to evade or to avoid the 
bar on the provision of contributions or donations to such a person.



Sec. 588.409  Credit extended and cards issued by U.S. financial institutions.

    The prohibition in Sec. 588.201 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 or interests in 
property are blocked pursuant to Sec. 588.201(a).



Sec. 588.410  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. 588.201 if effected after the effective date.



 Subpart E--Licenses, Authorizations and Statements of Licensing Policy



Sec. 588.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501, 
subpart D, 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.



Sec. 588.502  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 Director of the Office 
of Foreign Assets Control, authorizes or validates any transaction 
effected prior to the issuance of the license, 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 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 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. 588.503  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. 588.504  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 or interests in property are blocked pursuant to 
Sec. 588.201(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 only be made to another blocked account held in the same 
name.


[[Page 860]]


    Note to Sec. 588.504. Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers. See 
also Sec. 588.203 concerning the obligation to hold blocked funds in 
interest-bearing accounts.



Sec. 588.505  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 charge 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.



Sec. 588.506  Investment and reinvestment of certain funds.

    Subject to the requirements of Sec. 588.203, U.S. financial 
institutions are authorized to invest and reinvest assets blocked 
pursuant to Sec. 588.201, 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 persons whose property or interests in 
property are blocked pursuant to Sec. 588.201(a).



Sec. 588.507  Provision of certain legal services authorized.

    (a) The provision of the following legal services to or on behalf of 
persons whose property or interests in property are blocked pursuant to 
Sec. 588.201(a) 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 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 when 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 or interests in property are blocked pursuant to 
Sec. 588.201(a), not otherwise authorized in this part, requires the 
issuance of a specific license.
    (c) Entry into a settlement agreement affecting property or 
interests in property 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. 588.201(a) is 
prohibited unless specifically licensed in accordance with 
Sec. 588.202(e).



Sec. 588.508  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services in the 
United

[[Page 861]]

States to persons whose property or interests in property are blocked 
pursuant to Sec. 588.201(a) is authorized, provided that all receipt of 
payment for such services must be specifically licensed.



                           Subpart F--Reports



Sec. 588.601  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. 588.701  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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Public Law 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty not to exceed $11,000 per violation may be 
imposed on any person who violates or attempts to violate any license, 
order, or regulation issued under the Act;
    (2) Whoever willfully violates or willfully attempts to violate any 
license, order, or regulation issued under the Act, upon conviction, 
shall be fined not more than $50,000, and if a natural person, may also 
be imprisoned for not more than 10 years; and any officer, director, or 
agent of any corporation who knowingly participates in such violation 
may be punished by a like fine, imprisonment, or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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 not more than five years, or 
both.
    (d) Violations of this part may also be subject to relevant 
provisions of other applicable laws.



Sec. 588.702  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, 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. 588.703 as to why 
a monetary penalty should not be imposed or why, if imposed, the 
monetary penalty should be in a lesser amount than proposed.
    (c) Informal settlement prior to issuance of prepenalty notice. At 
any time prior to the issuance of a prepenalty notice,

[[Page 862]]

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 his 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 of the potential civil monetary penalty 
claim.



Sec. 588.703  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 his 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 (a) 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 
writing and may be handwritten or typed. 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.
    (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 not be imposed or 
why, if imposed, it should be in a lesser amount than proposed.
    (d) Default. If the respondent elects not to submit a written 
response within the time limit set forth in paragraph (a) of this 
section, the Office of Foreign Assets Control will conclude that the 
respondent has decided not to respond to the prepenalty notice. The 
agency generally will then issue a written penalty notice imposing the 
penalty proposed in the prepenalty notice.

[[Page 863]]

    (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 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 (f) 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) 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.



Sec. 588.704  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 final agency 
action in federal district court.



Sec. 588.705  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. 588.801  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.

[[Page 864]]

552 and 552a), see part 501, subpart D, of this chapter.



Sec. 588.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13219 of June 26, 2001 (3 CFR, 2001 Comp., 
p. 778), and any further Executive orders relating to the national 
emergency declared therein, 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. 588.901  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.



PART 590--ANGOLA (UNITA) SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

590.201  Prohibited sale or supply of arms, arms materiel, petroleum, or 
          petroleum products.
590.202  Required closure of UNITA offices in the United States.
590.203  Prohibited aircraft-related transactions.
590.204  Prohibited sale or supply of equipment used in mining.
590.205  Prohibited sale or supply of motorized vehicles, watercraft, or 
          spare parts for motorized vehicles or watercraft.
590.206  Prohibited sale or supply of mining services or ground or 
          waterborne transportation services.
590.207  Prohibited transactions involving blocked property.
590.208  Prohibited importation of diamonds.
590.209  Effect of transfers violating the provisions of this part.
590.210  Holding of funds in interest-bearing accounts; investment and 
          reinvestment.
590.211  Evasions; attempts; conspiracies.

                     Subpart C--General Definitions

590.301  Aircraft or aircraft components.
590.302  Arms and related materiel.
590.303  Blocked account; blocked property.
590.304  Controlled through the Certificate of Origin Regime of the 
          Angolan Government of Unity and National Reconciliation.
590.305  Diamonds.
590.306  Effective date.
590.307  Entity.
590.308  Equipment used in mining.
590.309  General license.
590.310  Interest.
590.311  License.
590.312  Mining services or ground or waterborne transportation 
          services.
590.313  Motorized vehicles, watercraft, or spare parts for motorized 
          vehicles or watercraft.
590.314  National Union for the Total Independence of Angola; UNITA.
590.315  Person.
590.316  Petroleum and petroleum products.
590.317  Property; property interest.
590.318  Specific license.
590.319  Transfer.
590.320  United States.
590.321  United States person; U.S. person.
590.322  U.S. financial institution.

                       Subpart D--Interpretations

590.401  Reference to amended sections.
590.402  Effect of amendment.
590.403  Termination and acquisition of an interest in blocked property.
590.404  Setoffs prohibited.
590.405  Transactions incidental to a licensed transaction.
590.406  Offshore transactions.
590.407  Transshipments through the United States prohibited.
590.408  Exports to third countries; transshipments.
590.409  Payments from blocked accounts to U.S. exporters and for other 
          obligations prohibited.
590.410  Provision of services.
590.411  Importation of diamonds mined outside of Angola.
590.412  Importation into and release from a bonded warehouse or foreign 
          trade zone.

[[Page 865]]

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

590.501  General and specific licensing procedures.
590.502  Effect of license.
590.503  Exclusion from licenses.
590.504  Exemptions for medical and humanitarian purposes.
590.505  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
590.506  Entries in certain accounts for normal service charges 
          authorized.
590.507  Provision of certain legal services authorized.
590.508  Investment and reinvestment of certain funds.

                           Subpart F--Reports

590.601  Records and reports.

                          Subpart G--Penalties

590.701  Penalties.
590.702  Prepenalty notice.
590.703  Response to prepenalty notice; informal settlement.
590.704  Penalty imposition or withdrawal.
590.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H--Procedures

590.801  Procedures.
590.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

590.901  Paperwork Reduction Act notice.

Appendix A to Part 590--Arms and Related Materiel
Appendix B to Part 590--Designated Points of Entry in the Territory of 
          Angola
Appendix C to Part 590--Designated Aircraft of Angolan Registry 
          [Reserved]
Appendix D to Part 590--Designated Areas of Angola to Which State 
          Administration Has Not Been Extended
Appendix E to Part 590--Equipment Used in Mining (Harmonized Tariff 
          Schedule Subheadings)
Appendix F to Part 590--Motorized Vehicles, Watercraft, or Spare Parts 
          for Motorized Vehicles or Watercraft (Harmonized Tariff 
          Schedule Subheadings)

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 31 U.S.C. 321(b); 50 U.S.C. 
1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 
note); E.O. 12865, 58 FR 51005, 3 CFR, 1993 Comp., p.636; E.O. 13069, 62 
FR 65989, 3 CFR, 1997 Comp., p.232; E.O. 13098, 63 FR 44771, 3 CFR, 1998 
Comp., p.206

    Source: 64 FR 43926, Aug. 12, 1999, unless otherwise noted.



      Subpart A--Relation of This Part to Other Laws andRegulations



Sec. 590.101  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 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. 590.201  Prohibited sale or supply of arms, arms materiel, petroleum, or petroleum products.

    Except as otherwise authorized, the sale or supply by United States 
persons, or from the United States or using U.S.-registered vessels or 
aircraft, or any activity by United States persons or in the United 
States that promotes or is calculated to promote the sale or supply, of 
arms and related materiel of all types (as defined in Sec. 590.302) or 
petroleum and petroleum products (as defined in Sec. 590.316), 
regardless of origin, is prohibited if such sale or supply is to:
    (a) UNITA; or
    (b) The territory of Angola other than through a point of entry 
designated in appendix B to this part.
    Note to Sec. 590.201: The exportation of arms-related items to 
Angola may require separate authorization from the Bureau of Export 
Administration, U.S. Department of Commerce, under the

[[Page 866]]

Export Administration Regulations, 15 CFR subchapter C.



Sec. 590.202  Required closure of UNITA offices in the United States.

    Except as otherwise authorized, all UNITA offices operating in the 
United States shall immediately and completely close.



Sec. 590.203  Prohibited aircraft-related transactions.

    Except as otherwise authorized, the following are prohibited:
    (a) The sale, supply, or making available in any form by United 
States persons, or from the United States or using U.S.-registered 
vessels or aircraft, of any aircraft or aircraft components (as defined 
in Sec. 590.301), regardless of origin, to:
    (1) UNITA; or
    (2) The territory of Angola other than through a point of entry 
designated in appendix B to this part;

    Note to paragraph (a):
    The exportation of aircraft-related items to Angola may require 
separate authorization from the Bureau of Export Administration, U.S. 
Department of Commerce, under the Export Administration Regulations, 15 
CFR subchapter C.

    (b) The insurance, engineering, or servicing by United States 
persons or from the United States of any aircraft owned or controlled by 
UNITA;
    (c) The provision or making available of engineering and maintenance 
servicing, the payment of new claims against existing insurance 
contracts, or the provision, renewal, or making available of direct 
insurance by United States persons or from the United States with 
respect to any aircraft that:
    (1) Is registered in Angola other than aircraft designated in 
appendix C to this part; or
    (2) Has entered the territory of Angola other than through a point 
of entry designated in appendix B to this part.

    Note to Sec. 590.203: Additional prohibitions exist on (1) the 
granting of takeoff, landing, and overflight permission for aircraft 
that are en route to or from a point in the territory of Angola other 
than a point of entry designated in appendix B to this part, and (2) the 
certification of airworthiness with respect to any aircraft registered 
in Angola, other than aircraft designated in appendix C to this part, or 
with respect to any aircraft that has entered Angola other than through 
a point of entry designated in appendix B to this part. These 
prohibitions are not included in this part because they fall within the 
jurisdiction of the U.S. Department of Transportation and the Federal 
Aviation Administration. Persons involved in these transactions are 
directed to review the rules of the Department of Transportation and the 
Federal Aviation Administration or to contact those agencies for 
assistance.



Sec. 590.204  Prohibited sale or supply of equipment used in mining.

    Except as otherwise authorized, the sale or supply by United States 
persons, or from the United States or using U.S.-registered vessels or 
aircraft, of equipment used in mining (as defined in Sec. 590.308), 
regardless of origin, to the territory of Angola other than through a 
point of entry designated in appendix B to this part is prohibited.
    Note to Sec. 515.204: The export to Angola of equipment used in 
mining is also subject to the Export Administration Regulations, 15 CFR 
subchapter C, and may require separate authorization from the Bureau of 
Export Administration, U.S. Department of Commerce.



Sec. 590.205  Prohibited sale or supply of motorized vehicles, watercraft, or spare parts for motorized vehicles or watercraft.

    Except as otherwise authorized, the sale or supply by United States 
persons, or from the United States or using U.S.-registered vessels or 
aircraft, of motorized vehicles, watercraft, or spare parts for 
motorized vehicles or watercraft (as defined in Sec. 590.313), 
regardless of origin, to the territory of Angola other than through a 
point of entry designated in appendix B to this part is prohibited.
    Note to Sec. 515.204: The export to Angola of motorized vehicles, 
watercraft, or spare parts for motorized vehicles or watercraft is also 
subject to the Export Administration Regulations, 15 CFR subchapter C, 
and may require separate authorization from the Bureau of Export 
Administration, U.S. Department of Commerce.

[[Page 867]]



Sec. 590.206  Prohibited sale or supply of mining services or ground or waterborne transportation services.

    Except as otherwise authorized, the sale or supply by United States 
persons, or from the United States or using U.S.-registered vessels or 
aircraft, of mining services or ground or waterborne transportation 
services (as defined in Sec. 590.312), regardless of origin, to persons 
in areas of Angola to which State administration has not been extended, 
as designated in appendix D to this part, is prohibited.



Sec. 590.207  Prohibited transactions involving blocked property.

    (a) Except as otherwise authorized, no property or 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 United States persons, including their overseas branches, of 
UNITA or of those senior officials of UNITA or adult members of their 
immediate families who are designated by the Secretary of the Treasury 
or the Secretary's delegate may be transferred, paid, exported, 
withdrawn, or otherwise dealt in.
    Note to paragraph (a) of Sec. 590.207: Please refer to the 
appendices at the end of this chapter V for listings of senior officials 
of UNITA and adult members of their immediate families designated 
pursuant to this section. Section 501.807 of this chapter V sets forth 
the procedures to be followed by persons seeking administrative 
reconsideration of their designation or who wish to assert that the 
circumstances resulting in designation no longer apply.

    (b) Unless otherwise authorized by this part or by a specific 
license expressly referring to this section, any dealing in any security 
(or evidence thereof) held within the possession or control of a U.S. 
person and either registered or inscribed in the name of or known to be 
held for the benefit of any person whose property is blocked pursuant to 
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 any such security or the endorsement or guaranty of 
signatures on any such security. This prohibition applies irrespective 
of the fact that at any time (either prior to, on, or subsequent to the 
effective date) the registered or inscribed owner of any such security 
may have or appears to have assigned, transferred, or otherwise disposed 
of the 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. 590.208  Prohibited importation of diamonds.

    Except as otherwise authorized, the direct or indirect importation 
into the United States on or after 12:01 a.m. EDT on August, 19, 1998, 
of all diamonds (as defined in Sec. 590.305) exported from Angola that 
are not controlled through the Certificate of Origin regime of the 
Angolan Government of Unity and National Reconciliation (as defined in 
Sec. 590.304) is prohibited.



Sec. 590.209  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. 590.207(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. 590.207(a), unless the person with whom such 
property is held or maintained, prior to that date, had written

[[Page 868]]

notice of the transfer or by any written evidence had recognized such 
transfer.
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by or pursuant to the direction or authorization of 
the Director of the Office of Foreign Assets Control before, during, or 
after a transfer shall validate such transfer or make it enforceable to 
the same extent that it would be valid or enforceable but for the 
provisions of the International Emergency Economic Powers Act, the 
United Nations Participation Act, this part, and any regulation, order, 
directive, ruling, instruction, or license issued pursuant to this part.
    (d) Property transfers 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 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 issued pursuant to this part and was not so licensed, 
or if a license did purport to cover the transfer, that such license 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 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, direction, or license issued 
pursuant to this part;
    (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 withholding 
of material facts or was otherwise fraudulently obtained.
    Note to paragraph (d) of Sec. 590.209: 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 in which on or since the effective 
date of Sec. 590.207 there existed an interest of a person whose 
property is blocked pursuant to Sec. 590.207(a).



Sec. 590.210  Holding of funds in interest-bearing accounts; investment and reinvestment.

    (a) Except as provided in paragraph (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. 590.207(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, 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

[[Page 869]]

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. 590.207(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 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. 590.207(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.
    (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. 590.207(a). 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 that provides immediate financial or economic 
benefit or access to persons whose property is blocked pursuant to 
Sec. 590.207(a), nor may their holder cooperate in or facilitate the 
pledging or other attempted use as collateral of blocked funds or other 
assets.



Sec. 590.211  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.



                     Subpart C--General Definitions



Sec. 590.301  Aircraft or aircraft components.

    The term aircraft or aircraft components means all aircraft, 
spacecraft, and parts thereof described in chapter 88 of the Harmonized 
Tariff Schedule of the United States and any other items that the 
supplier knows or has reason to know are intended to be used as a part 
or spare part of an aircraft or spacecraft.



Sec. 590.302  Arms and related materiel.

    The term arms and related materiel means all items listed in 
appendix A to this part; all items described in chapter 93 of the 
Harmonized Tariff Schedule of the United States; any other items 
designed as or for use with a weapon; all items controlled under the 
International Traffic in Arms Regulations, 22 CFR parts 120 through 130; 
and any other items controlled for export as arms or related materiel by 
any office or agency of the United States.



Sec. 590.303  Blocked account; blocked property.

    The terms blocked account and blocked property mean any account or 
property subject to the prohibition in Sec. 590.207, held in the name of 
a person whose property is blocked pursuant to Sec. 590.207(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 from the Office of Foreign 
Assets Control authorizing such action.



Sec. 590.304  Controlled through the Certificate of Origin regime of the Angolan Government of Unity and National Reconciliation.

    The term controlled through the Certificate of Origin regime of the 
Angolan Government of Unity and National Reconciliation means 
accompanied by any documentation that demonstrates to the satisfaction 
of the United States Customs Service (or analogous officials of a United 
States territory or possession with its own customs administration) that 
the diamonds were legally

[[Page 870]]

exported from Angola with the approval of the Angolan Government of 
Unity and National Reconciliation.



Sec. 590.305  Diamonds.

    The term diamonds means all diamonds described in heading 7102 of 
the Harmonized Tariff Schedule of the United States; all diamond dust 
described in subheading 7105.10 of the Harmonized Tariff Schedule of the 
United States; all diamond jewelry described in subheadings 
7116.20.05-.15 of the Harmonized Tariff Schedule of the United States; 
and any items described elsewhere in the Harmonized Tariff Schedule of 
the United States containing diamonds or diamond dust.



Sec. 590.306  Effective date.

    The term effective date refers to each of the effective dates of the 
applicable prohibitions and directives of this part as follows:
    (a) With respect to Sec. 590.201 and any prohibitions under 
Sec. 590.211 related to Sec. 590.201, 4:35 p.m. EDT on September 26, 
1993.
    (b) With respect to Secs. 590.202 and 590.203 and any prohibitions 
under Sec. 590.211 related to Secs. 590.202 or 590.203, 12:01 a.m. EST 
on December 15, 1997.
    (c) With respect to Secs. 590.204, 590.205, 590.206, 590.207, 
590.208, 590.209, and 590.210 and any prohibitions under Sec. 590.211 
related to Secs. 590.204, 590.205, 590.206, 590.207, 590.208, 590.209, 
or 590.210, 12:01 a.m. EDT on August, 19, 1998, or in the case of senior 
officials of UNITA or adult members of their immediate families who are 
designated after that date, the earlier of the date on which a person 
receives actual or constructive notice of such designation.



Sec. 590.307  Entity.

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



Sec. 590.308  Equipment used in mining.

    The term equipment used in mining means all items described in any 
of the Harmonized Tariff Schedule subheadings listed in appendix E to 
this part and any other equipment that the supplier knows or has reason 
to know is intended for use in the activities of prospecting or mining.



Sec. 590.309  General license.

    The term general license means any license the terms of which are 
set forth in this part.



Sec. 590.310  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. 590.311  License.

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



Sec. 590.312  Mining services or ground or waterborne transportation services.

    The term mining services or ground or waterborne transportation 
services means any services that are part of prospecting, mining, or 
carrying persons or cargo by land or water.



Sec. 590.313  Motorized vehicles, watercraft, or spare parts for motorized vehicles or watercraft.

    The term motorized vehicles, watercraft, or spare parts for 
motorized vehicles or watercraft means all items described in any of the 
Harmonized Tariff Schedule subheadings listed in Appendix F to this part 
and any other items that the supplier knows or has reason to know are 
intended for use as motorized vehicles, watercraft, or spare parts for 
motorized vehicles or watercraft.



Sec. 590.314  National Union for the Total Independence of Angola; UNITA.

    The term National Union for the Total Independence of Angola, or 
UNITA, includes:
    (a) Any entity, political subdivision, agency, or instrumentality of 
UNITA, including without limitation:
    (1) The Unia[tilde]o Nacional para a Independencia Total de Angola 
(UNITA), known in English as the ``National Union for the Total 
Independence of Angola'';
    (2) The Forcas Armadas para a Libera[ccedil]A[tilde]o de Angola 
(FALA), known

[[Page 871]]

in English as the ``Armed Forces for the Liberation of Angola'';
    (3) The Free Angola Information Service, Inc.; and
    (4) The Center for Democracy in Angola (CEDA);
    (b) Any person or entity substantially owned or controlled by any of 
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 for or 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) through (c) 
of this section.



Sec. 590.315  Person.

    The term person means an individual or entity.



Sec. 590.316  Petroleum and petroleum products.

    The term petroleum and petroleum products means all items described 
in chapter 27 of the Harmonized Tariff Schedule of the United States and 
any synthetic or part-synthetic replacement therefore.



Sec. 590.317  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, whether present, future, or contingent.



Sec. 590.318  Specific license.

    The term specific license means any license not set forth in this 
part but issued pursuant to this part.



Sec. 590.319  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 upon the foregoing, the 
term transfer includes 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; 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.

[[Page 872]]



Sec. 590.320  United States.

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



Sec. 590.321  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.



Sec. 590.322  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, as principal or agent. This terms 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 which are located in the United States, but not such 
institutions' headquarters, branches, offices, or agencies.



                       Subpart D--Interpretations



Sec. 590.401  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. 590.402  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. 590.403  Termination and acquisition of an interest in blocked property.

    (a) Whenever a transaction licensed pursuant to this part results in 
the transfer of property (including any property interest) away from a 
person whose property is blocked pursuant to Sec. 590.207(a), the 
transferred property will no longer be considered property in which that 
person has or has had an interest. Provided no other person whose 
property is blocked pursuant to Sec. 590.207(a) has any interest in the 
transferred property following the transfer, the transferred property 
will no longer be considered property blocked pursuant to 
Sec. 590.207(a).
    (b) Unless otherwise specifically provided in a license issued 
pursuant to this part, if property (including any property interest) is 
transferred or attempted to be transferred to a person whose property is 
blocked pursuant to Sec. 590.207(a), such property shall be deemed to be 
property in which that person has an interest, and such property is 
therefore blocked pursuant to Sec. 590.207(a).



Sec. 590.404  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. 590.207(a) if effected after the effective date.



Sec. 590.405  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.

[[Page 873]]

Except as specifically authorized by the terms of a license, prohibited 
transactions by persons whose property is blocked pursuant to 
Sec. 590.207(a) and debits to accounts blocked pursuant to 
Sec. 590.207(a) are not considered incidental to a licensed transaction 
and therefore remain prohibited.



Sec. 590.406  Offshore transactions.

    (a) The prohibitions contained in Sec. 590.207 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, that 
a person whose property is blocked pursuant to Sec. 590.207(a) has or 
has had an interest since the effective date of Sec. 590.207.
    (b) Transactions by a U.S. person prohibited by Sec. 590.207 include 
but are not limited to:
    (1) Importation into or exportation from locations outside the 
United States of goods, technology, or services in which the U.S. person 
knows, or has reason to know, that a person whose property is blocked 
pursuant to Sec. 590.207(a) has or has had an interest since the 
effective date of Sec. 590.207.
    (2) Purchasing, selling, financing, swapping, insuring, 
transporting, lifting, storing, incorporating, transforming, brokering, 
or otherwise dealing in, within locations outside the United States, 
goods, technology, or services in which the U.S. person knows, or has 
reason to know, that a person whose property is blocked pursuant to 
Sec. 590.207(a) has or has had an interest since the effective date of 
Sec. 590.207.
    (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 the personal possessions 
of any person whose property is blocked pursuant to Sec. 590.207(a).
    (2) A U.S. person may not, within the United States or abroad, enter 
into any contract for any goods or services with UNITA or with any other 
person whose property is blocked pursuant to Sec. 590.207(a).



Sec. 590.407  Transshipments through the United States prohibited.

    (a) The prohibitions in Secs. 590.201, 590.203, 590.204, 590.205, 
and 590.206 apply to the importation into the United States, for 
transshipment or transit, of goods or services intended or destined to 
be sold, supplied, or provided in violation of Secs. 590.201, 590.203, 
590.204, 590.205, or 590.206.
    (b) The prohibition in Sec. 590.208 applies to the importation into 
the United States, for transshipment or transit, of diamonds intended or 
destined for third countries if the diamonds were exported from Angola 
on or after 12:01 a.m. EDT on August 19, 1998 and are not controlled 
through the Certificate of Origin regime of the Angolan Government of 
Unity and National Reconciliation. In the case of diamonds transported 
by vessel, the prohibition in Sec. 590.208 applies to the unlading in 
the United States and the intent to unlade in the United States of 
diamonds intended or destined for third countries if the diamonds were 
exported from Angola on or after 12:01 a.m. EDT on August 19, 1998 and 
are not controlled through the Certificate of Origin regime of the 
Angolan Government of Unity and National Reconciliation.
    (c) Goods imported into or transshipped through the United States 
are blocked pursuant to Sec. 590.207(a) if those goods constitute 
property in which a person whose property is blocked pursuant to 
Sec. 590.207(a) has or has had an interest since the effective date of 
Sec. 590.207.



Sec. 590.408  Exports to third countries; transshipments.

    (a) The prohibitions in Secs. 590.201 and 590.203 include the 
exportation of arms and related materiel, petroleum and petroleum 
products, and aircraft or aircraft components to third countries if the 
exporter knows or has reason to know that the goods are intended for 
reexportation or transshipment to the territory of Angola, other than 
through a point of entry designated in appendix B to this part, or to 
UNITA, including passage through or storage in intermediate 
destinations.
    (b) The prohibitions in Secs. 590.204 and 590.205 include the 
exportation of

[[Page 874]]

equipment used in mining, motorized vehicles, watercraft, or spare parts 
for motorized vehicles or watercraft to third countries if the exporter 
knows or has reason to know that the goods are intended for 
reexportation or transshipment to the territory of Angola other than 
through a point of entry designated in appendix B to this part, 
including passage through or storage in intermediate destinations.
    (c) The prohibitions in Sec. 590.206 include the exportation of 
mining services or ground or waterborne transportation services to third 
countries if the exporter knows or has reason to know that the services 
are intended for persons in areas of Angola to which State 
administration has not been extended, as designated in appendix D to 
this part.



Sec. 590.409  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 or services 
exported prior to the effective date of the blocking, except as 
authorized pursuant to this part.



Sec. 590.410  Provision of services.

    (a) The prohibitions contained in Sec. 590.207 apply to services 
performed by U.S. persons, wherever located:
    (1) On behalf of or for the benefit of a person whose property is 
blocked pursuant to Sec. 590.207(a); or
    (2) With respect to property interests of a person whose property is 
blocked pursuant to Sec. 590.207(a).
    (b) 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 persons whose 
property is blocked pursuant to Sec. 590.207(a). See Sec. 590.507 on 
licensing policy with regard to the provision of certain legal services.



Sec. 590.411  Importation of diamonds mined outside of Angola.

    The importation prohibition in Sec. 590.208 applies to diamonds 
exported from Angola whether or not those diamonds were mined in Angola.



Sec. 590.412  Importation into and release from a bonded warehouse or foreign trade zone.

    The prohibition in Sec. 590.208 applies to importation into and 
release from a bonded warehouse or a foreign trade zone of the United 
States. However, Sec. 590.208 does not prohibit the release from a 
bonded warehouse or a foreign trade zone of diamonds exported from 
Angola and imported into that bonded warehouse or foreign trade zone 
prior to the effective date of Sec. 590.208.



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 590.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501, 
subpart D 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.



Sec. 590.502  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

[[Page 875]]

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. 590.503  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. 590.504  Exemptions for medical and humanitarian purposes.

    Specific licenses may be issued in appropriate cases for 
transactions otherwise prohibited by Secs. 590.203, 590.204, 590.205, 
590.206, 590.207, or 590.208, including aircraft-related transactions 
and ground and waterborne transportation transactions, for medical and 
humanitarian purposes.



Sec. 590.505  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 is blocked pursuant to Sec. 590.207(a) has any interest and 
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. 590.505: Please refer to part 501, subpart C of this 
chapter for mandatory reporting requirements regarding financial 
transfers. See also Sec. 590.210 concerning the obligation to hold 
blocked funds in interest-bearing accounts.



Sec. 590.506  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 charges 
includes but is not limited to charges in payment or reimbursement for 
interest due; cable, telegraph, or telephone charges; postage costs; 
custody fees; small adjustment charges to correct bookkeeping errors; 
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. 590.507  Provision of certain legal services authorized.

    (a) The provision to or on behalf of a person whose property is 
blocked pursuant to Sec. 590.207(a) of the legal services set forth in 
paragraph (b) of this section is authorized, provided that all receipt 
of payment for such services must be specifically licensed.
    (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 a person whose property is blocked pursuant 
to Sec. 590.207(a):
    (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 prohibition contained in 
this chapter;

[[Page 876]]

    (2) Representation of a person whose property is blocked pursuant to 
Sec. 590.207(a) when named as a defendant in or otherwise made a party 
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 of a person whose property is blocked pursuant to 
Sec. 590.207(a);
    (4) Representation of a person whose property is blocked pursuant to 
Sec. 590.207(a) before any federal or state agency with respect to the 
imposition, administration, or enforcement of U.S. sanctions against 
such person; 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) The provision of any other legal services to a person whose 
property is blocked pursuant to Sec. 590.207(a), not otherwise 
authorized in this part, requires the issuance of a specific license.
    (d) Entry into a settlement agreement affecting property or 
interests in property of a person whose property is blocked pursuant to 
Sec. 590.207(a) 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 of a person whose property is blocked 
pursuant to Sec. 590.207(a) is prohibited unless specifically licensed 
in accordance with Sec. 590.209(e).



Sec. 590.508  Investment and reinvestment of certain funds.

    U.S. financial institutions are authorized to invest and reinvest 
assets blocked pursuant to Sec. 590.207(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 in no case may funds be transferred 
outside the United States for this purpose;
    (b) The proceeds of such investments and reinvestments are not 
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 any person whose property is blocked 
pursuant to Sec. 590.207(a).



                           Subpart F--Reports



Sec. 590.601  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. 590.701  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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty not to exceed $11,000 per violation may be 
imposed on any person who violates or attempts to violate any license, 
order, or regulation issued under the Act;
    (2) Whoever willfully violates or willfully attempts to violate any 
license, order, or regulation issued under the Act, upon conviction, 
shall be fined not more than $50,000, and if a natural person, may also 
be imprisoned for not more than 10 years; and any officer, director, or 
agent of any corporation who

[[Page 877]]

knowingly participates in such violation may be punished by a like fine, 
imprisonment, or both.
    (b) The criminal penalties provided in the Act are subject to 
increase pursuant to 18 U.S.C. 3571.
    (c) Attention is directed to section 5 of the United Nations 
Participation Act (22 U.S.C. 287c(b)), which provides that any person 
who willfully violates or evades or attempts to violate or evade any 
order, rule, or regulation issued by the President pursuant to the 
authority granted in that section, upon conviction, shall be fined not 
more than $10,000, or if a natural person, may also be imprisoned for 
not more than 10 years; and any officer, director, or agent of any 
corporation who knowingly participates in such a violation or evasion 
shall be punished by a similar fine, imprisonment, or both; and any 
property, funds, securities, papers, other articles or documents, 
vessels together with their tackle, apparel, furniture, equipment, 
vehicle, or aircraft concerned in such violation shall be forfeited to 
the United States. The penalties provided in the United Nations 
Participation Act are subject to increase pursuant to 18 U.S.C. 3571.
    (d) 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.
    (e) Violations of this part may also be subject to relevant 
provisions of other applicable laws.



Sec. 590.702  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, 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. 537.703  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

[[Page 878]]

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 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. 537.704  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.



Sec. 537.705  Administrative collection; referral to United States Department of Justice.

    In the event that the respondent does not pay a 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 a 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. 590.801  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 D of this chapter.



Sec. 590.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Orders 12865 (3 CFR, 1993 Comp., p. 636), 13069 (3 
CFR, 1997 Comp., p. 232), and 13098 (63 FR 44771, Aug. 20, 1998), and 
any further Executive orders relating to the national emergency declared 
with respect to UNITA in Executive Order 12865 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. 590.901  Paperwork Reduction Act notice.

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

[[Page 879]]

(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.

            Appendix A to Part 590--Arms and Related Materiel

    Note to Appendix A: Commerce Control List Export Control Commodity 
Numbers are provided in parenthesis at the end of each item as a 
convenience.

(a) Spindle assemblies, consisting of spindles and bearings as a minimal 
          assembly, except those assemblies with axial and radial axis 
          motion measured along the spindle axis in one revolution of 
          the spindle equal to or greater (coarser) than the following:
(1) 0.0008 mm TIR (peak-to-peak) for lathes and turning machines; or
(2) D x 2 x 10(-5) mm TIR (peak-to-peak) where D is the spindle diameter 
          in millimeters for milling machines, boring mills, jig 
          grinders, and machining centers (ECCNs 2B001 and 2B290);
(b) Equipment for the production of military explosives and solid 
          propellants, as follows:
(1) Complete installations; and
(2) Specialized components (for example, dehydration presses; extrusion 
          presses for the extrusion of small arms, cannon and rocket 
          propellants; cutting machines for the sizing of extruded 
          propellants; sweetie barrels (tumblers) 6 feet and over in 
          diameter and having over 500 pounds product capacity; and 
          continuous mixers for solid propellants) (ECCN 1B018);
(c) Specialized machinery, equipment, gear, and specially designed parts 
          and accessories therefor, specially designed for the 
          examination, manufacture, testing, and checking of the arms, 
          appliances, machines, and implements of war (ECCN 2B018), 
          ammunition hand-loading equipment for both cartridges and 
          shotgun shells, and equipment specially designed for 
          manufacturing shotgun shells (ECCN 0B986);
(d) Construction equipment built to military specifications, specially 
          signed for airborne transport (ECCN 0A018);
(e) Vehicles specially designed for military purposes, as follows:
(1) Specially designed military vehicles, excluding vehicles listed in 
          the United States Munitions List, 22 CFR Part 121 (ECCN 
          9A018);
(2) Pneumatic tire casings (excluding tractor and farm implement types), 
          of a kind specially constructed to be bulletproof or to run 
          when deflated (ECCN 9A018);
(3) Engines for the propulsion of the vehicles enumerated above, 
          specially designed or essentially modified for military use 
          (ECCN 9A018); and
(4) Specially designed components and parts to the foregoing (ECCN 
          9A018);
(f) Pressure refuellers, pressure refueling equipment, and equipment 
          specially designed to facilitate operations in confined areas 
          and ground equipment, not elsewhere specified, developed 
          specially for aircraft and helicopters, and specially designed 
          parts and accessories, n.e.s. (ECCN 9A018);
(g) Specifically designed components and parts for ammunition, except 
          cartridge cases, powder bags, bullets, jackets, cores, shells, 
          projectiles, boosters, fuses and components, primers, and 
          other detonating devices and ammunition belting and linking 
          machines (ECCN 0A018);
(h) Nonmilitary shotguns, barrel length 18 inches or over; and 
          nonmilitary arms, discharge type (for example, stun-guns, 
          shock batons, etc.), except arms designed solely for signal, 
          flare, or saluting use; and parts, n.e.s. (ECCNs 0A984 and 
          0A985);
(i) Shotgun shells, and parts (ECCN 0A986);
(j) Military parachutes (ECCN 9A018);
(k) Submarine and torpedo nets (ECCN 8A518);
(l) Bayonets and muzzle-loading (black powder) firearms (ECCN 0A018).

 Appendix B to Part 590--Designated Points of Entry in the Territory of 
                                 Angola

(a) Airports:
    (1) Luanda
    (2) Katumbela, Benguela Province
(b) Ports:
    (1) Luanda
    (2) Lobito, Benguela Province
    (3) Namibe, Namibe Province
(c) Entry Points:
    (1) Malongo, Cabinda Province
    (2) [Reserved]

    Appendix C to Part 590--Designated Aircraft of Angolan Registry 
                               [Reserved]

   Appendix D to Part 590--Designated Areas of Angola to Which State 
                  Administration Has Not Been Extended

(a) Bie Province:
(1) Municipalities:

[[Page 880]]

    (A) Andulo
    (B) Cuemba
    (C) Nharea
(2) Communities:
    (A) Cassumbe
    (B) Chivualo
    (C) Umpulo
    (D) Ringoma
    (E) Luando
    (F) Sachinemuna
    (G) Gamba
    (H) Dando
    (I) Calussinga
    (J) Munhango
    (K) Lubia
    (L) Caleie
    (M) Balo Horizonte
(b) Cunene Province:
(1) Municipalities:
    [Reserved]
(2) Communities:
    (A) Cubati-Cachueca
    (B) [Reserved]
(c) Huambo Province:
(1) Municipalities:
    (A) Bailundo
    (B) Mungo
(2) Communities:
    (A) Bimbe
    (B) Hungue-Calulo
    (C) Lungue
    (D) Luvemba
    (E) Cambuengo
    (F) Mundundo
    (G) Cacoma
(d) K. Kubango Province:
(1) Municipalities:
    [Reserved]
(2) Communities:
    (A) Longa
    (B) Lulana
    (C) Luengue
(e) Malange Province:
(1) Municipalities:
    (A) Luquembo
    (B) Quirima
    (C) Cambudi Catembo
    (D) Massango
(2) Communities:
    (A) Dumba-Kabango
    (B) Quitapa
    (C) Tala-Mungongo
    (D) Bembo
    (E) Caribo
    (F) Culamagia
    (G) Bange-Angola
    (H) Milando
    (I) Capunga
    (J) Cunga-Palanga
    (K) Dombo
    (L) Quibango
    (M) Rimba
    (N) Bangala
    (O) Moma
    (P) Sautar
    (Q) Cuale
    (R) Caxinga
    (S) Cateco-Cangola
    (T) Qulhuhu
    (U) Quinguengue
(f) Moxico Province:
(1) Municipalities:
    (A) Cangamba
    (B) Luau
    (C) Luacano
    (D) Cazombo
(2) Communities:
    (A) Lovua
    (B) Mussuma
    (C) Sessa
    (D) Cachipoque
    (E) Cangombe
    (F) Cassamba
    (G) Muie
    (H) Caianda
    (I) Ninda
    (J) Chiume
    (K) Lutembo
    (L) Giambe
    (M) Tempue
    (N) Luvuei
    (O) Candundo
    (P) Macondo
    (Q) Sandando
    (R) Muangai
    (S) Lago-Dilolo
(g) Uige Province:
(1) Municipalities:
    (A) Bembe
    (B) [Reserved]
(2) Communities:
    (A) Massau
    (B) Macola
    (C) Cuile-Camboso
    (D) Alto-Zaza
    (E) Cuango
    (F) Icoca
    (G) Lucunga
    (H) Mabaia
    (I) Beu
    (J) Cuilo Futa
    (K) Sacandica
(h) Benguela Province:
(1) Municipalities:
    [Reserved]
(2) Communities:
    (A) Chicuma
    (B) Casseque
(i) Lunda-Norte Province:
(1) Municipalities:
    (A) Cuilo
    (B) [Reserved]
(2) Communities:
    (A) Lovua
    (B) Bote ``Cassange-Calucala''
    (C) Capala
    (D) Caluango
(j) Kuanza-Norte Province:
(1) Municipalities:
    (A) Banga
    (B) [Reserved]
(2) Communities:
    (A) Samba-Lucala
    (B) Caculo-Cabaca

[[Page 881]]

    (C) Carlamba
    (D) Aldeia-Nova
(k) Lunda-Sul Province:
(1) Municipalities:
    (A) Mucondo
    (B) [Reserved]
(2) Communities:
    (A) Xassengue
    (B) Alto-Chicapa
    (C) Chiluage
    (D) Cazage
    (E) Luma-Cassai
    (F) Muriege
    (G) Cassai-Sul
(l) Bengo Province:
(1) Municipalities:
    [Reserved]
(2) Communities:
    (A) Quiaje
    (B) [Reserved]

  Appendix E to Part 590--Equipment Used in Mining (Harmonized Tariff 
                          Schedule Subheadings)

8429.11.00, 8429.19.00, 8429.20.00, 8429.30.00, 8429.40.00, 8429.51.10, 
8429.51.50, 8429.52.10, 8429.52.50, 8429.59.10, 8429.59.50
8430.10.00, 8430.31.00, 8430.39.00, 8430.41.00, 8430.49.80, 8430.61.00, 
8430.62.00, 8430.69.00
8431.41.00, 8431.42.00, 8431.43.80, 8431.49.90

 Appendix F to Part 590--Motorized Vehicles, Watercraft, or Spare Parts 
    for Motorized Vehicles or Watercraft (Harmonized Tariff Schedule 
                              Subheadings)

8407.10.00, 8407.21.00, 8427.29.00, 8407.31.00, 8407.32.10, 8407.32.20, 
8407.32.90, 8407.33.10, 8407.33.30, 8407.33.60, 8407.33.90, 8407.34.05, 
8407.34.14, 8407.34.18, 8407.34.25, 8407.34.35, 8407.34.44, 8407.34.48, 
8407.34.55, 8407.90.10, 8407.90.90
8408.10.00, 8408.20.10, 8408.20.20, 8408.20.90, 8408.90.10, 8408.90.90
8409.10.00, 8409.91.10, 8409.90.30, 8409.91.50, 8409.91.92, 8409.91.99, 
8409.99.10, 8409.99.91, 8409.99.92, 8409.99.99

8483.10.10, 8483.10.30, 8483.10.50

8601.10.00, 84601.20.00

8602.10.00, 8602.90.00

8603.10.00, 8603.90.00

8604.00.00

8605.00.00

8606.10.00, 8606.20.00, 8606.30.00, 8606.91.00, 8606.92.00, 8606.99.00

8607.11.00, 8607.12.00, 8607.19.03, 8607.19.06, 8607.19.12, 8607.19.15, 
8607.19.30, 8607.19.90, 8607.21.10, 8607.21.50, 8607.29.10, 8607.29.50, 
8607.30.10, 8607.30.50, 8607.91.00, 8607.99.10, 8607.99.50

8701.10.00, 8701.20.00, 8701.30.10, 8701.30.50, 8701.90.10, 8701.90.50

8702.10.30, 8702.10.60, 8702.90.30, 8702.90.60

8703.10.50, 8703.21.00, 8703.22.00, 8703.23.00, 8703.24.00, 8703.31.00, 
8703.32.00, 8703.33.00, 8703.90.00

8704.10.10, 8704.10.50, 8704.21.00, 8704.22.10, 8704.22.50, 8704.23.00, 
8704.31.00, 8704.32.00, 8704.90.00

8705.10.00, 8705.20.00, 8705.30.00, 8705.40.00, 8705.90.00

8706.00.03, 8706.00.05, 8706.00.15, 8706.00.25, 8706.00.30, 8706.00.50

8707.10.00, 8707.90.10, 8707.90.50

8708.10.30, 8708.10.60, 8708.21.00, 8708.29.10, 8708.29.15, 8708.29.20, 
8708.29.50, 8708.31.10, 8708.31.50, 8708.39.10, 8708.39.50, 8708.40.10, 
8708.40.20, 8708.40.30, 8708.40.50, 8708.50.10, 8708.50.30, 8708.50.50, 
8708.50.80, 8708.60.10, 8708.60.30, 8708.60.50, 8708.60.80, 8708.70.05, 
8708.70.15, 8708.70.25, 8708.70.35, 8708.70.45, 8708.70.60, 8708.80.15, 
8708.80.25, 8708.80.30, 8708.80.45, 8708.91.10, 8708.91.50, 8708.92.10, 
8708.92.50, 8708.93.15, 8708.93.30, 8708.93.60, 8708.93.75, 8708.94.10, 
8708.94.50, 8708.99.03, 8708.99.06, 8708.99.09, 8708.99.12, 8708.99.15, 
8708.99.18, 8708.99.21, 8708.99.24, 8708.99.27, 8708.99.31, 8708.99.34, 
8708.99.37, 8708.99.40, 8708.99.43, 8708.99.46, 8708.99.49, 8708.99.52, 
8708.99.55, 8708.99.58, 8708.99.61, 8708.99.64, 8708.99.67, 8708.99.70, 
8708.99.73, 8708.99.80

8709.11.00, 8709.19.00

8710.00.00

8711.10.00, 8711.20.00, 8711.30.00, 8711.40.30, 8711.40.60, 8711.50.00, 
8711.90.00

8714.11.00, 8714.19.00

8716.10.00, 8716.20.00, 8716.31.00, 8716.39.00, 8716.40.00, 8716.80.10, 
8716.80.50, 8716.90.10, 8716.90.30, 8716.90.50

8901.10.00, 8901.20.00, 8901.30.00, 8901.90.00

8902.00.00

8903.10.00, 8903.91.00, 8903.92.00, 8903.99.20, 8903.99.90

8904.00.00

8905.10.00, 8905.90.50

8906.00.10, 8906.00.90



PART 591--ROUGH DIAMONDS (SIERRA LEONE & LIBERIA) SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

591.201  Prohibited importation of rough diamonds.
591.202  Permitted importation of rough diamonds.

[[Page 882]]

591.203  Evasions; attempts; conspiracies.

                     Subpart C--General Definitions

591.301  Controlled through the Certificate of Origin regime of the 
          Government of Sierra Leone.
591.302  Effective date.
591.303  Entity.
591.304  Importation into the United States.
591.305  Licenses; general and specific.
591.306  Person.
591.307  Rough diamond.
591.308  Rough diamonds from Sierra Leone or Liberia.
591.309  United States.
591.310  United States person; U.S. person.

                       Subpart D--Interpretations

591.401  Reference to amended sections.
591.402  Effect of amendment.
591.403  Transactions incidental to a licensed transaction.
591.404  Transshipment or transit through the United States prohibited.
591.405  Direct or indirect importation of rough diamonds from Sierra 
          Leone or Liberia.
591.406  Importation into and release from a bonded warehouse or foreign 
          trade zone.

 Subpart E--Licenses, Authorizations and Statements of Licensing Policy

591.501  General and specific licensing procedures.
591.502  Effect of license or authorization.
591.503  Exclusion from licenses.

                           Subpart F--Reports

591.601  Records and reports.

                          Subpart G--Penalties

591.701  Penalties.
591.702  Prepenalty notice.
591.703  Response to prepenalty notice; informal settlement.
591.704  Penalty imposition or withdrawal.
591.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H--Procedures

591.801  Procedures.
591.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

591.901  Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 31 U.S.C. 321(b); 50 U.S.C. 
1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 
note); E.O. 13194, 66 FR 7389 (Jan. 23, 2001); E.O. 13213, 66 FR 28829 
(May 24, 2001).

    Source: 67 FR 5473, Feb. 6, 2002, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 591.101  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. 591.201  Prohibited importation of rough diamonds.

    Except to the extent provided in Sec. 591.202 or authorized by other 
regulations, orders, directives, rulings, instructions, licenses or 
otherwise, 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 prior to the 
effective date, the direct or indirect importation into the United 
States of all rough diamonds from Sierra Leone or Liberia is prohibited.



Sec. 591.202  Permitted importation of rough diamonds.

    The prohibition in Sec. 591.201 of the importation into the United 
States of rough diamonds from Sierra Leone

[[Page 883]]

does not apply if the importation is controlled through the Certificate 
of Origin regime of the Government of Sierra Leone and the rough 
diamonds have not physically entered the territory of Liberia.



Sec. 591.203  Evasions; attempts; conspiracies.

    (a) 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 prior to the effective date, 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.
    (b) 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 prior to the effective date, any conspiracy formed for 
the purpose of engaging in a transaction prohibited by this part is 
prohibited.



                     Subpart C--General Definitions



Sec. 591.301  Controlled through the Certificate of Origin regime of the Government of Sierra Leone.

    The term controlled through the Certificate of Origin regime of the 
Government of Sierra Leone means accompanied by a Certificate of Origin 
or other documentation that demonstrates to the satisfaction of the 
United States Customs Service (or analogous officials of a United States 
territory or possession with its own customs administration) that the 
rough diamonds were legally exported from Sierra Leone with the approval 
of the Government of Sierra Leone.



Sec. 591.302  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., eastern standard time, January 19, 2001, with respect to 
importations of rough diamonds from Sierra Leone and which is 12:01 
a.m., eastern daylight time, May 23, 2001, with respect to importations 
of rough diamonds from Liberia.



Sec. 591.303  Entity.

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



Sec. 591.304  Importation into the United States.

    The term importation into the United States means the bringing of 
goods into the United States.



Sec. 591.305  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. 591.305. See Sec. 501.801 of this chapter on licensing 
procedures.



Sec. 591.306  Person.

    The term person means an individual or entity.



Sec. 591.307  Rough diamond.

    The term rough diamond means all unworked diamonds classifiable in 
heading 7102 of the Harmonized Tariff Schedule of the United States.



Sec. 591.308  Rough diamonds from Sierra Leone or Liberia.

    The term rough diamonds from Sierra Leone or Liberia means rough 
diamonds extracted in Sierra Leone or Liberia and rough diamonds that 
have physically entered the territories of Sierra Leone or Liberia, 
regardless of where they have been extracted.

[[Page 884]]



Sec. 591.309  United States.

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



Sec. 591.310  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. 591.401  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 refers to the same as currently amended.



Sec. 591.402  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. 591.403  Transactions incidental to a licensed transaction.

    Any transaction ordinarily incident to a licensed transaction and 
necessary to give effect thereto is also authorized.



Sec. 591.404  Transshipment or transit through the United States prohibited.

    The prohibitions in Sec. 591.201 apply to the importation into the 
United States, for transshipment or transit, of rough diamonds from 
Sierra Leone or Liberia that are intended or destined for any country 
other than the United States.



Sec. 591.405  Direct or indirect importation of rough diamonds from Sierra Leone or Liberia.

    The prohibitions in Sec. 591.201 apply to the importation of rough 
diamonds from Sierra Leone or Liberia whether those rough diamonds are 
being imported directly into the United States from Sierra Leone or 
Liberia, or indirectly through any other country.



Sec. 591.406  Importation into and release from a bonded warehouse or foreign trade zone.

    The prohibitions in Sec. 591.201 apply to the importation into and 
release from a bonded warehouse or foreign trade zone of the United 
States. However, Sec. 591.201 does not prohibit the release from a 
bonded warehouse or a foreign trade zone of rough diamonds from Sierra 
Leone or Liberia that were imported into that bonded warehouse or 
foreign trade zone prior to the effective date.



 Subpart E--Licenses, Authorizations and Statements of Licensing Policy



Sec. 591.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501, 
subpart D, 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.



Sec. 591.502  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 Director of the Office 
of Foreign Assets

[[Page 885]]

Control, authorizes or validates any transaction effected prior to the 
issuance of the license, 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 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 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. 591.503  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.



                           Subpart F--Reports



Sec. 591.601  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. 591.701  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. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Public Law 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty not to exceed $11,000 per violation may be 
imposed on any person who violates or attempts to violate any license, 
order, or regulation issued under the Act;
    (2) Whoever willfully violates or willfully attempts to violate any 
license, order, or regulation issued under the Act, upon conviction, 
shall be fined not more than $50,000 and, if a natural person, may also 
be imprisoned for not more than 10 years; and any officer, director, or 
agent of any corporation who knowingly participates in such violation 
may be punished by a like fine, imprisonment, or both.
    (b) The criminal penalties provided in the Act are subject to 
increase pursuant to 18 U.S.C. 3571.
    (c) Attention is directed to section 5 of the United Nations 
Participation Act (22 U.S.C. 287c(b)), which provides that any person 
who willfully violates or evades or attempts to violate or evade any 
order, rule, or regulation issued by the President pursuant to the 
authority granted in that section, upon conviction, shall be fined not 
more than $10,000 and, if a natural person, may also be imprisoned for 
not more than 10 years; and the officer, director, or agent of any 
corporation who knowingly participates in such violation or evasion 
shall be punished by a like fine, imprisonment, or both and any 
property, funds, securities, papers, or other articles or documents, or 
any

[[Page 886]]

vessel, together with her tackle, apparel, furniture, and equipment, or 
vehicle, or aircraft, concerned in such violation shall be forfeited to 
the United States. The criminal penalties provided in the United Nations 
Participation Act are subject to increase pursuant to 18 U.S.C. 3571.
    (d) 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 not more than five years, or 
both.
    (e) Violations of this part may also be subject to relevant 
provisions of other applicable laws.



Sec. 591.702  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, 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 respondent's right to make a written presentation within 
the applicable 30-day period set forth in Sec. 591.703 as to why a 
monetary penalty should not be imposed or why, if imposed, the monetary 
penalty should be in a lesser amount than proposed.
    (c) Informal settlement prior to issuance of prepenalty notice. At 
any time prior to the issuance of a prepenalty notice, an alleged 
violator may request in writing that, for a period not to exceed sixty 
(60) days, the agency withhold issuance of the prepenalty notice for the 
exclusive purpose of effecting settlement of the agency's potential 
civil monetary penalty claims. In the event the Director grants the 
request, under terms and conditions within his 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 of the potential civil monetary penalty claim.



Sec. 591.703  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 his 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

[[Page 887]]

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 
writing and may be handwritten or typed. The response need not be in any 
particular form. A copy of the written response may be sent by 
facsimile, but the original must also 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.
    (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 not be imposed or 
why, if imposed, it should be in a lesser amount than proposed.
    (d) Default. If the respondent elects not to submit a written 
response within the time limit set forth in paragraph (a) of this 
section, the Office of Foreign Assets Control will conclude that the 
respondent has decided not to respond to the prepenalty notice. The 
agency generally will then issue a written penalty notice imposing the 
penalty proposed in the prepenalty notice.
    (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 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 (f) 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) 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.

[[Page 888]]



Sec. 591.704  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 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 final agency 
action in federal district court.



Sec. 591.705  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 federal district court.



                          Subpart H--Procedures



Sec. 591.801  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 D, of this chapter.



Sec. 591.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13194 of January 18, 2001 (66 FR 7389, 
January 23, 2001), Executive Order 13213 of May 22, 2001 (66 FR 28829, 
May 24, 2001), and any further Executive orders relating to the national 
emergency declared in Executive Order 13194 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. 591.901  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.

[[Page 889]]



PART 595--TERRORISM SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

595.201  Prohibited transactions involving blocked property.
595.202  Effect of transfers violating the provisions of this part.
595.203  Holding of certain types of blocked property in interest-
          bearing accounts.
595.204  Prohibited dealing in property; contributions of funds, goods, 
          or services.
595.205  Evasions; attempts; conspiracies.
595.206  Exempt transactions.

                     Subpart C--General Definitions

595.301  Blocked account; blocked property.
595.302  Effective date.
595.303  Entity.
595.304  Foreign person.
595.305  General license.
595.306  Information and informational materials.
595.307  Interest.
595.308  License.
595.309  Person.
595.310  Property; property interest.
595.311  Specially designated terrorist.
595.312  Specific license.
595.313  Transfer.
595.314  United States.
595.315  United States person; U.S. person.
595.316  U.S. financial institution.

                       Subpart D--Interpretations

595.401  Reference to amended sections.
595.402  Effect of amendment.
595.403  Termination and acquisition of an interest in blocked property.
595.404  Setoffs prohibited.
595.405  Transactions incidental to a licensed transaction.
595.406  Provision of services.
595.407  Offshore transactions.
595.408  Charitable contributions to specially designated terrorists.

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

595.501  Effect of license or authorization.
595.502  Exclusion from licenses and authorizations.
595.503  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
595.504  Investment and reinvestment of certain funds.
595.505  Entries in certain accounts for normal service charges 
          authorized.
595.506  Provision of certain legal services to a specially designated 
          terrorist.
595.507  Authorization of emergency medical services.

                           Subpart F--Reports

595.601  Records and reports.

                          Subpart G--Penalties

595.701  Penalties.
595.702  Prepenalty notice.
595.703  Presentation responding to prepenalty notice.
595.704  Penalty notice.
595.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H--Procedures

595.801  Procedures.
595.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

595.901  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); E.O. 
12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 319.

    Source: 61 FR 3806, Feb. 2, 1996, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 595.101  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

[[Page 890]]

complying with any other applicable laws or regulations.

[61 FR 3806, Feb. 2, 1996, as amended at 62 FR 45111, Aug. 25, 1997]



                         Subpart B--Prohibitions



Sec. 595.201  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 a specially designated terrorist, 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.

[61 FR 3806, Feb. 2, 1996, as amended at 62 FR 45111, Aug. 25, 1997]



Sec. 595.202  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 
terrorist or in which a specially designated terrorist 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 terrorist or in which a specially designated terrorist 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.
    (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

[[Page 891]]

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: 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 which, on 
or since the effective date, was held in the name of a specially 
designated terrorist or in which there existed an interest of a 
specially designated terrorist.



Sec. 595.203  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. 595.201 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, 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 
terrorist having an interest in the accounts. If the account is held in 
the name of a specially designated terrorist, 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.
    (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. 595.204  Prohibited dealing in property; contributions of funds, goods, or services.

    Except as otherwise authorized, no U.S. person may deal in property 
or interests in property of a specially designated terrorist, including 
the making or receiving of any contribution of funds, goods, or services 
to or for the benefit of a specially designated terrorist.



Sec. 595.205  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. 595.206  Exempt transactions.

    (a) Personal Communications. The prohibitions contained in this part 
do not

[[Page 892]]

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. 595.306, 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 terrorist 
with respect to income received for enhancements or alterations made by 
U.S. persons to information or informational materials imported from a 
specially designated terrorist.
    (3) This section does not authorize transactions incident to the 
exportation of technical data under restriction as defined in Sec. 779.4 
of the Export Administration Regulations, 15 CFR parts 768-799 (1994), 
or to the exportation of goods for use in the transmission of any data. 
The exportation of such goods to specially designated terrorists is 
prohibited, as provided in Sec. 595.201 of this part.
    (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.



                     Subpart C--General Definitions



Sec. 595.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibition in Sec. 595.201 held in 
the name of a specially designated terrorist or in which a specially 
designated terrorist 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. 595.302  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, January 24, 1995, or, in the case of specially 
designated terrorists designated after that date, the earlier of the 
date on which a person receives actual or constructive notice of such 
designation.



Sec. 595.303  Entity.

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



Sec. 595.304  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. 595.305  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.



Sec. 595.306  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

[[Page 893]]

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'' that 
is not ``publicly available'' as these terms are defined in 15 CFR Parts 
779 and 799.1; or
    (2) With respect to which acts are prohibited by 18 U.S.C. chapter 
37.



Sec. 595.307  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. 595.308  License.

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



Sec. 595.309  Person.

    The term person means an individual or entity.



Sec. 595.310  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. 595.311  Specially designated terrorist.

    (a) The term specially designated terrorist means:
    (1) Persons listed in the Annex to Executive Order 12947;
    (2) Foreign persons designated by the Secretary of State, in 
coordination with the Secretary of the Treasury and the Attorney 
General, because they are found:
    (i) To have committed, or to pose a significant risk of committing, 
acts of violence that have the purpose or effect of disrupting the 
Middle East peace process, or
    (ii) To assist in, sponsor, or provide financial, material, or 
technological support for, or services in support of, such acts of 
violence; and
    (3) Persons determined by the Secretary of the Treasury, in 
coordination with the Secretary of State and the Attorney General, to be 
owned or controlled by, or to act for or on behalf of, any other 
specially designated terrorist.
    (b) [Reserved]
    Note to Sec. 595.311: Please refer to the appendices at the end of 
this chapter for listings of persons designated pursuant to this part. 
Section 501.807 of this chapter sets forth the procedures to be followed 
by persons seeking administrative reconsideration of their designation, 
or who wish to assert that the circumstances resulting in the 
designation are no longer applicable.

[61 FR 3806, Feb. 2, 1996, as amended at 61 FR 32938, June 26, 1996; 62 
FR 45111, Aug. 25, 1997]

[[Page 894]]



Sec. 595.312  Specific license.

    The term specific license means any license or authorization not set 
forth in this part but issued pursuant to this part.



Sec. 595.313  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. 595.314  United States.

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



Sec. 595.315  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.



Sec. 595.316  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. 595.401  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. 595.402  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

[[Page 895]]

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. 595.403  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 terrorist, such property 
shall no longer be deemed to be property in which a specially designated 
terrorist has or has had an interest, or which is held in the name of a 
specially designated terrorist, unless there exists in the property 
another interest of a specially designated terrorist, 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 terrorist, including by the making of any 
contribution of funds, goods, or services to or for the benefit of a 
specially designated terrorist, such property shall be deemed to be 
property in which there exists an interest of the specially designated 
terrorist.



Sec. 595.404  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. 595.201 if effected after the effective date.



Sec. 595.405  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 terrorist or 
involving a debit to a blocked account or a transfer of blocked property 
not explicitly authorized within the terms of the license.



Sec. 595.406  Provision of services.

    (a) Except as provided in Sec. 595.206, the prohibitions contained 
in Secs. 595.201 and 595.204 apply to services performed by U.S. 
persons, wherever located:
    (1) On behalf of, or for the benefit of, a specially designated 
terrorist; or
    (2) With respect to property interests of a specially designated 
terrorist.
    (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, public relations, educational, or other services to a 
specially designated terrorist. See Sec. 595.506.



Sec. 595.407  Offshore transactions.

    The prohibitions contained in Sec. 595.201 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 terrorist, or in which the U.S. 
person knows, or has reason to know, a specially designated terrorist 
has or has had an interest since the effective date.



Sec. 595.408  Charitable contributions to specially designated terrorists.

    (a) Unless otherwise specifically authorized by the Office of 
Foreign Assets Control by or pursuant to this part, no charitable 
contribution or donation of funds, goods, services,or technology to 
relieve human suffering, such as food, clothing or medicine, may be made 
to or for the benefit of a specially designated terrorist. For purposes 
of this part, a contribution or donation is made to or for the benefit 
of a specially designated terrorist if made to or in the name of a 
specially designated terrorist; if made to or in the name of an entity 
or individual acting for or on behalf of, or owned or controlled by, a 
specially designated terrorist; or if made in an attempt to violate, to 
evade or to avoid the bar on the provision of contributions or donations 
to specially designated terrorists.
    (b) Individuals and organizations who donate or contribute funds, 
goods, services or technology without knowledge or reason to know that 
the donation or contribution is destined to or for the benefit of a 
specially designated terrorist shall not be subject to penalties for 
such donation or contribution.

[[Page 896]]



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 595.501  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.
    (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. 595.502  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. 595.503  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. 595.503: Please refer to Sec. 501.603 of this chapter 
for mandatory reporting requirements regarding financial transfers.

[61 FR 3806, Feb. 2, 1996, as amended at 62 FR 45111, Aug. 25, 1997]



Sec. 595.504  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 terrorist, 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 terrorist 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 
terrorist.
    (b)(1) U.S. persons seeking to avail themselves of this 
authorization must register with the Office of Foreign Assets Control, 
Blocked Assets Section, before undertaking transactions authorized under 
this section.
    (2) Transactions conducted pursuant to this section must be reported 
to the

[[Page 897]]

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. 595.505  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 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, stationary and supplies, check 
books, and other similar items.



Sec. 585.506  Provision of certain legal services to a specially designated terrorist.

    (a) The provision to or on behalf of a specially designated 
terrorist 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. 595.406 requires the issuance of a specific 
license.
    (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 terrorist:
    (1) Provision of legal advice and counselling to a specially 
designated terrorist on the requirements of and compliance with the laws 
of any jurisdiction within the United States, provided that such advice 
and counselling is not provided to facilitate transactions in violation 
of this part;
    (2) Representation of a specially designated terrorist 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 a specially designated terrorist;
    (4) Representation of a specially designated terrorist before any 
federal agency with respect to the imposition, administration, or 
enforcement of U.S. sanctions against a specially designated terrorist; 
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 a specially designated terrorist is prohibited unless specifically 
licensed in accordance with Sec. 595.202(e).



Sec. 595.507  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services to a 
specially designated terrorist located in the United States is 
authorized, provided that any payment for such services requires prior 
authorization by specific license.



                           Subpart F--Reports



Sec. 595.601  Records and reports.

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

[62 FR 45111, Aug. 25, 1997]



                          Subpart G--Penalties



Sec. 595.701  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

[[Page 898]]

the direction or authorization of the Secretary of the Treasury pursuant 
to this part or otherwise under the Act. Section 206 of the Act, as 
adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), provides that:
    (1) A civil penalty of not to exceed $11,000 per violation may be 
imposed on any person who violates any license, order, or regulation 
issued under the Act;
    (2) Whoever willfully violates any license, order, or regulation 
issued under the Act shall, upon conviction be fined not more than 
$50,000, or, if a natural person, may be imprisoned for not more than 
ten years, or both; and any officer, director, or agent of any 
corporation who knowingly participates in such violation may be punished 
by a like fine, imprisonment or both.
    (b) The criminal penalties provided in the Act are subject to 
increase 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.

[61 FR 3806, Feb. 2, 1996, as amended at 61 FR 54940, Oct. 23, 1996; 62 
FR 45111, Aug. 25, 1997]



Sec. 595.702  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 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 make presentation. The prepenalty notice also shall 
inform the person of his right to make a written presentation within 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.



Sec. 595.703  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 of the Office of Foreign Assets Control.
    (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 
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.



Sec. 595.704  Penalty notice.

    (a) No violation. If, after considering any presentations made in 
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 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

[[Page 899]]

prepenalty notice, the Director of the Office of Foreign Assets Control 
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.



Sec. 595.705  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 
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. 595.801  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 
subpart D of part 501 of this chapter.

[62 FR 45111, Aug. 25, 1997]



Sec. 595.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 12947 or any further Executive orders 
relating to the national emergency declared in Executive Order 12947 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.

[61 FR 3806, Feb. 2, 1996. Redesignated at 62 FR 45111, Aug. 25, 1997]



                   Subpart I--Paperwork Reduction Act



Sec. 595.901  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 45111, Aug. 25, 1997]



PART 596--TERRORISM LIST GOVERNMENTS SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

596.201  Prohibited financial transactions.
596.202  Evasions; attempts; conspiracies.

                     Subpart C--General Definitions

596.301  Donation.
596.302  Effective date.
596.303  Financial institution.
596.304  Financial transaction.
596.305  General license.
596.306  License.
596.307  Monetary instruments.
596.308  Person; entity.
596.309  Specific license.
596.310  Terrorism List Government.
596.311  Transaction.
596.312  United States.
596.313  United States person.

                       Subpart D--Interpretations

596.401  Reference to amended sections.
596.402  Effect of amendment.
596.403  Transactions incidental to a licensed transaction.
596.404  Financial transactions transferred through a bank of a 
          Terrorism List Government.

[[Page 900]]

 Subpart E--Licenses, Authorizations and Statements of Licensing Policy

596.501  Effect of license or authorization.
596.502  Exclusion from licenses and authorizations.
596.503  Financial transactions with a Terrorism List Government 
          otherwise subject to 31 CFR chapter V.
596.504  Certain financial transactions with Terrorism List Governments 
          authorized.
596.505  Certain transactions related to stipends and scholarships 
          authorized.

                           Subpart F--Reports

596.601  Records and reports.

                          Subpart G--Penalties

596.701  Penalties.

                          Subpart H--Procedures

596.801  Procedures.
596.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

596.901  Paperwork Reduction Act notice.

    Authority: 18 U.S.C. 2332d; 31 U.S.C. 321(b).

    Source: 61 FR 43463, Aug. 23, 1996, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 596.101  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. Except as otherwise 
authorized in this part, no license or authorization contained in or 
issued pursuant to those other parts authorizes any transaction 
prohibited by this part. Except as otherwise authorized in 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. See Sec. 596.503.
    (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.

[61 FR 43463, Aug. 23, 1996, as amended at 62 FR 45112, Aug. 25, 1997]



                         Subpart B--Prohibitions



Sec. 596.201  Prohibited financial transactions.

    Except as authorized by regulations, orders, directives, rulings, 
instructions, licenses, or otherwise, no United States 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, shall engage in a financial 
transaction with the government of that country. Countries designated 
under section 6(j) of the Export Administration Act as of the effective 
date of this part are listed in the following schedule.

                                Schedule:

    Cuba.
    Iran.
    Iraq.
    Libya.
    North Korea.
    Sudan.
    Syria.



Sec. 596.202  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.



                     Subpart C--General Definitions



Sec. 596.301  Donation.

    The term donation means a transfer made in the form of a gift or 
charitable contribution.

[[Page 901]]



Sec. 596.302  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, August 22, 1996.



Sec. 596.303  Financial institution.

    The term financial institution shall have the definition given that 
term in 31 U.S.C. 5312(a)(2) or the regulations promulgated thereunder, 
as from time to time amended.
    Note: The breadth of the definition precludes its reproduction in 
this section.



Sec. 596.304  Financial transaction.

    The term financial transaction shall have the meaning set forth in 
18 U.S.C. 1956(c)(4), as from time to time amended. As of the effective 
date, this term includes:
    (a) A transaction which in any way or degree affects interstate or 
foreign commerce;
    (1) Involving the movement of funds by wire or other means; or
    (2) Involving one or more monetary instruments; or
    (3) Involving the transfer of title to any real property, vehicle, 
vessel, or aircraft; or
    (b) A transaction involving the use of a financial institution which 
is engaged in, or the activities of which affect, interstate or foreign 
commerce in any way or degree.



Sec. 596.305  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.



Sec. 596.306  License.

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



Sec. 596.307  Monetary instruments.

    The term monetary instruments shall have the meaning set forth in 18 
U.S.C. 1956(c)(5), as from time to time amended. As of the effective 
date, this term includes coin or currency of the United States or of any 
other country, travelers' checks, personal checks, bank checks, and 
money orders, or investment securities or negotiable instruments, in 
bearer form or otherwise in such form that title thereto passes upon 
delivery.



Sec. 596.308  Person; entity.

    (a) The term person means an individual or entity.
    (b) The term entity means a partnership, association, corporation, 
or other organization.



Sec. 596.309  Specific license.

    The term specific license means any license or authorization not set 
forth in this part but issued pursuant to this part.



Sec. 596.310  Terrorism List Government.

    The term Terrorism List Government includes:
    (a) The government of a country designated under section 6(j) of the 
Export Administration Act, as well as any political subdivision, agency, 
or instrumentality thereof, including the central bank of such a 
country;
    (b) Any entity owned or controlled by such a government.



Sec. 596.311  Transaction.

    The term transaction shall have the meaning set forth in 18 U.S.C. 
1956(c)(3), as from time to time amended. As of the effective date, this 
term includes a purchase, sale, loan, pledge, gift, transfer, delivery, 
or other disposition, and with respect to a financial institution 
includes a deposit, withdrawal, transfer between accounts, exchange of 
currency, loan, extension of credit, purchase or sale of any stock, 
bond, certificate of deposit, or other monetary instrument, use of a 
safe deposit box, or any other payment, transfer, or delivery by, 
through, or to a financial institution, by whatever means effected.



596.312  United States.

    The term United States means the United States, including its 
territories and possessions.



Sec. 596.313  United States person.

    The term United States person means any United States citizen or 
national, permanent resident alien, juridical person organized under the 
laws of the

[[Page 902]]

United States, or any person in the United States.



                       Subpart D--Interpretations



Sec. 596.401  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 refers to the same as currently amended.



Sec. 596.402  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 does 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. 596.403  Transactions incidental to a licensed transaction.

    Any transaction ordinarily incident to a licensed transaction and 
necessary to give effect thereto is also authorized.



Sec. 596.404  Financial transactions transferred through a bank of a Terrorism List Government.

    For the purposes of this part only, a financial transaction not 
originated by a Terrorism List Government, but transferred to the United 
States through a bank owned or controlled by a Terrorism List 
Government, shall not be deemed a financial transaction with the 
government of a country supporting international terrorism pursuant to 
Sec. 596.201.



 Subpart E--Licenses, Authorizations and Statements of Licensing Policy



Sec. 596.501  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, authorizes or validates any transaction 
effected prior to the issuance of the license, unless specifically 
provided in such license or other authorization.
    (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 Office of Foreign Assets 
Control and specifically refers to a part in 31 CFR chapter V. No 
regulation, ruling, instruction, or license referring to this part 
authorizes any transactions 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. 596.502  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,

[[Page 903]]

or classes thereof. Such action is binding upon all persons receiving 
actual or constructive notice of such exclusion or restriction.



Sec. 596.503  Financial transactions with a Terrorism List Government otherwise subject to 31 CFR chapter V.

    United States persons are authorized to engage in financial 
transactions with a Terrorism List Government that is subject to 
regulations contained in parts of 31 CFR chapter V other than this part 
to the extent and subject to the conditions stated in such other parts, 
or in any regulations, orders, directives, rulings, instructions, or 
licenses issued pursuant thereto.



Sec. 596.504  Certain financial transactions with Terrorism List Governments authorized.

    (a) United States persons are authorized to engage in all financial 
transactions with a Terrorism List Government that is not otherwise 
subject to 31 CFR chapter V, except for a transfer from a Terrorism List 
Government:
    (1) Constituting a donation to a United States person; or
    (2) With respect to which the United States person knows (including 
knowledge based on advice from an agent of the United States 
Government), or has reasonable cause to believe, that the transfer poses 
a risk of furthering terrorist acts in the United States.
    (b) Nothing in this section authorizes the return of a transfer 
prohibited by paragraph (a)(2) of this section.



Sec. 596.505  Certain transactions related to stipends and scholarships authorized.

    (a) United States persons are authorized to engage in all financial 
transactions with respect to stipends and scholarships covering tuition 
and related educational, living and travel expenses provided by the 
Government of Syria to Syrian nationals or the Government of Sudan to 
Sudanese nationals who are enrolled as students in an accredited 
educational institution in the United States. Representations made by an 
accredited educational institution concerning the status of a student 
maybe relied upon in determining the applicability of this section.
    (b) Nothing in this section authorizes a transaction prohibited by 
Sec. 596.504(a)(2).

[61 FR 67944, Dec. 26, 1996]



                           Subpart F--Reports



Sec. 596.601  Records and reports.

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

[62 FR 45112, Aug. 25, 1997]



                          Subpart G--Penalties



Sec. 596.701  Penalties.

    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 United States 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.



                          Subpart H--Procedures



Sec. 596.801  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 
subpart D of part 501 of this chapter.

[62 FR 45112, Aug. 25, 1997]



Sec. 596.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to section 321 of the Antiterrorism and Effective Death Penalty 
Act of 1996, Pub. L. 104-132, 110 Stat. 1214, 1254 (18 U.S.C. 2332d), 
may be

[[Page 904]]

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.

[61 FR 43463, Aug. 23, 1996. Redesignated at 62 FR 45112, Aug. 25, 1997]



                   Subpart I--Paperwork Reduction Act



Sec. 596.901  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 45112, Aug. 25, 1997]



PART 597--FOREIGN TERRORIST ORGANIZATIONS SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of This Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

597.201  Prohibited transactions involving blocked assets or funds of 
          foreign terrorist organizations or their agents.
597.202  Effect of transfers violating the provisions of this part.
597.203  Holding of funds in interest-bearing accounts; investment and 
          reinvestment.
597.204  Evasions; attempts; conspiracies.

                     Subpart C--General Definitions

597.301  Agent.
597.302  Assets.
597.303  Blocked account; blocked funds.
597.304  Designation.
597.305  Effective date.
597.306  Entity.
597.307  Financial institution.
597.308  Financial transaction.
597.309  Foreign terrorist organization.
597.310  Funds.
597.311  General license.
597.312  Interest.
597.313  License.
597.314  Person.
597.315  Specific license.
597.316  Transaction.
597.317  Transfer.
597.318  United States.
597.319  U.S. financial institution.

                       Subpart D--Interpretations

597.401  Reference to amended sections.
597.402  Effect of amendment.
597.403  Termination and acquisition of an interest in blocked funds.
597.404  Setoffs prohibited.
597.405  Transactions incidental to a licensed transaction.
597.406  Offshore transactions.

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

597.501  Effect of license or authorization.
597.502  Exclusion from licenses and authorizations.
597.503  Payments and transfers to blocked accounts in U.S. financial 
          institutions.
597.504  Entries in certain accounts for normal service charges 
          authorized.
597.505  Payment for certain legal services.

                           Subpart F--Reports

597.601  Records and reports.

                          Subpart G--Penalties

597.701  Penalties.
597.702  Prepenalty notice.
597.703  Response to prepenalty notice.
597.704  Penalty notice.
597.705  Administrative collection; referral to United States Department 
          of Justice.

                          Subpart H--Procedures

597.801  Procedures.
597.802  Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

597.901  Paperwork Reduction Act notice.

    Authority: 31 U.S.C. 321(b); Pub. L. 104-132, 110 Stat. 1214, 1248-
53 (8 U.S.C. 1189, 18 U.S.C. 2339B).

    Source: 62 FR 52495, Oct. 8, 1997, unless otherwise noted.

[[Page 905]]



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 597.101  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 statutory 
authority and 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. This part does not implement, construe, 
or limit the scope of any other part of this chapter, including (but not 
limited to) the Terrorism Sanctions Regulations, part 595 of this 
chapter, and does not excuse any person from complying with any other 
part of this chapter, including (but not limited to) part 595 of this 
chapter.
    (c) This part does not implement, construe, or limit the scope of 
any criminal statute, including (but not limited to) 18 U.S.C. 
2339B(a)(1) and 2339A, and does not excuse any person from complying 
with any criminal statute, including (but not limited to) 18 U.S.C. 
2339B(a)(1) and 18 U.S.C. 2339A.



                         Subpart B--Prohibitions



Sec. 597.201  Prohibited transactions involving blocked assets or funds of foreign terrorist organizations or their agents.

    (a) Upon notification to Congress of the Secretary of State's intent 
to designate an organization as a foreign terrorist organization 
pursuant to 8 U.S.C. 1189(a), until the publication in the Federal 
Register as described in paragraph (c) of this section, any U.S. 
financial institution receiving notice from the Secretary of the 
Treasury by means of order, directive, instruction, regulation, ruling, 
license, or otherwise shall, except as otherwise provided in such 
notice, block all financial transactions involving any assets of such 
organization within the possession or control of such U.S. financial 
institution until further directive from the Secretary of the Treasury, 
Act of Congress, or order of court.
    (b) Except as otherwise authorized by order, directive, instruction, 
regulation, ruling, license, or otherwise, from and after the 
designation of an organization as a foreign terrorist organization 
pursuant to 8 U.S.C. 1189(a), any U.S. financial institution that 
becomes aware that it has possession of or control over any funds in 
which the designated foreign terrorist organization or its agent has an 
interest shall:
    (1) Retain possession of or maintain control over such funds; and
    (2) Report to the Secretary of the Treasury the existence of such 
funds in accordance with Sec. 501.603 of this chapter.
    (c) Publication in the Federal Register of the designation of an 
organization as a foreign terrorist organization pursuant to 8 U.S.C. 
1189(a) shall be deemed to constitute a further directive from the 
Secretary of the Treasury for purposes of paragraph (a) of this section, 
and shall require the actions contained in paragraph (b) of this 
section.
    (d) The requirements of paragraph (b) of this section shall remain 
in effect until the effective date of an administrative, judicial, or 
legislative revocation of the designation of an organization as a 
foreign terrorist organization, or until the designation lapses, 
pursuant to 8 U.S.C. 1189.
    (e) 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. 
Requests for the unblocking of funds pursuant to

[[Page 906]]

Sec. 501.806 must be submitted to the attention of the Compliance 
Programs Division.



Sec. 597.202  Effect of transfers violating the provisions of this part.

    (a) Any transfer after the effective date which is in violation of 
Sec. 597.201 or any other provision of this part or of any regulation, 
order, directive, ruling, instruction, license, or other authorization 
hereunder and involves any funds or assets held in the name of a foreign 
terrorist organization or its agent or in which a foreign terrorist 
organization or its agent 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 funds or assets.
    (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 funds or assets held in the name of a 
foreign terrorist organization or its agent or in which a foreign 
terrorist organization or its agent has an interest, or has had an 
interest since such date, unless the financial institution with whom 
such funds or assets are 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 this part, and any regulation, order, directive, ruling, 
instruction, or license issued hereunder.
    (d) Transfers of funds or assets 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 financial 
institution with whom such funds or assets were held or maintained (and 
as to such financial institution only) in cases in which such financial 
institution 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 financial institution with whom such 
funds or assets were held or maintained;
    (2) The financial institution with which such funds or assets were 
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 
institution, 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 financial institution with which such funds or assets were 
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): 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) Except for exercises of judicial authority pursuant to 8 U.S.C. 
1189(b), 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 funds or assets 
which, on or since the effective date, were in the possession or control 
of a

[[Page 907]]

U.S. financial institution and were held in the name of a foreign 
terrorist organization or its agent or in which there existed an 
interest of a foreign terrorist organization or its agent.



Sec. 597.203  Holding of funds in interest-bearing accounts; investment and reinvestment.

    (a) Except as provided in paragraph (c) of this section, or as 
otherwise directed by the Office of Foreign Assets Control, any U.S. 
financial institution holding funds subject to Sec. 597.201(b) shall 
hold or place such funds in a blocked interest-bearing account which is 
in the name of the foreign terrorist organization or its agent and which 
is located in the United States.
    (b)(1) For purposes of this section, the term 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 for the amount of funds in the account or 
certificate of deposit; 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) Funds held or placed in a blocked interest-bearing account 
pursuant to this paragraph 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 and must clearly indicate the foreign 
terrorist organization or agent having an interest in the accounts.
    (c) Blocked funds held as of the effective date in the form of 
stocks, bonds, debentures, letters of credit, or instruments which 
cannot be negotiated for the purpose of placing the funds in a blocked 
interest-bearing account pursuant to paragraph (a) may continue to be 
held in the form of the existing security or instrument until 
liquidation or maturity, provided that any dividends, interest income, 
or other proceeds derived therefrom are paid into a blocked interest-
bearing account in accordance with the requirements of this section.
    (d) Funds subject to this section may not be held, invested, or 
reinvested in a manner in which an immediate financial or economic 
benefit or access accrues to the foreign terrorist organization or its 
agent.



Sec. 597.204  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.



                     Subpart C--General Definitions



Sec. 597.301  Agent.

    (a) The term agent means:
    (1) Any person owned or controlled by a foreign terrorist 
organization; or
    (2) 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 a foreign terrorist organization.
    (b) The term agent includes, but is not limited to, any person 
determined by the Director of the Office of Foreign Assets Control to be 
an agent as defined in paragraph (a) of this section.
    Note to Sec. 597.301: Please refer to the appendices at the end of 
this chapter for listings of persons designated as foreign terrorist 
organizations or their agents. Section 501.807 of this chapter sets 
forth the procedures to be followed by a person seeking administrative 
reconsideration of a designation as an agent, or who wishes to assert 
that the circumstances resulting in the designation as an agent are no 
longer applicable.



Sec. 597.302  Assets.

    The term assets includes, but is not limited to, money, checks, 
drafts, bullion, bank deposits, savings accounts, debts, indebtedness, 
obligations, notes, guarantees, debentures, stocks, bonds,

[[Page 908]]

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. 597.303  Blocked account; blocked funds.

    The terms blocked account and blocked funds shall mean any account 
or funds subject to the prohibitions in Sec. 597.201 held in the name of 
a foreign terrorist organization or its agent or in which a foreign 
terrorist organization or its agent 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. 597.304  Designation.

    The term designation includes both the designation and redesignation 
of a foreign terrorist organization pursuant to 8 U.S.C. 1189.



Sec. 597.305  Effective date.

    Except as that term is used in Sec. 597.201(d), the term effective 
date refers to the effective date of the applicable prohibitions and 
directives contained in this part which is October 6, 1997, or, in the 
case of foreign terrorist organizations designated after that date and 
their agents, the earlier of the date on which a financial institution 
receives actual or constructive notice of such designation or of the 
Secretary of Treasury's exercise of his authority to block financial 
transactions pursuant to 8 U.S.C. 1189(a)(2)(C) and Sec. 597.201(a).



Sec. 597.306  Entity.

    The term entity includes a partnership, association, corporation, or 
other organization, group, or subgroup.



Sec. 597.307  Financial institution.

    The term financial institution shall have the definition given that 
term in 31 U.S.C. 5312(a)(2) as from time to time amended, 
notwithstanding the definition of that term in 31 CFR part 103.
    Note: The breadth of the statutory definition of financial 
institution precludes its reproduction in this section. Among the types 
of businesses covered are insured banks (as defined in 12 U.S.C. 
1813(h)), commercial banks or trust companies, private bankers, agencies 
or branches of a foreign bank in the United States, insured institutions 
(as defined in 12 U.S.C. 1724(a)), thrift institutions, brokers or 
dealers registered with the Securities and Exchange Commission under 15 
U.S.C. 78a et seq., securities or commodities brokers and dealers, 
investment bankers or investment companies, currency exchanges, issuers, 
redeemers, or cashiers of traveler's checks, checks, money orders, or 
similar instruments, credit card system operators, insurance companies, 
dealers in precious metals, stones or jewels, pawnbrokers, loan or 
finance companies, travel agencies, licensed senders of money, telegraph 
companies, businesses engaged in vehicle sales, including automobile, 
airplane or boat sales, persons involved in real estate closings and 
settlements, the United States Postal Service, a casino, gambling 
casino, or gaming establishment with an annual gaming revenue of more 
than $1,000,000 as further described in 31 U.S.C. 5312(a)(2), or 
agencies of the United States Government or of a State or local 
government carrying out a duty or power of any of the businesses 
described in 31 U.S.C. 5312(a)(2).



Sec. 597.308  Financial transaction.

    The term financial transaction means a transactioninvolving the 
transfer or movement of funds, whether by wire or other means.

[[Page 909]]



Sec. 597.309  Foreign terrorist organization.

    The term foreign terrorist organization means an organization 
designated or redesignated as a foreign terrorist organization, or with 
respect to which the Secretary of State has notified Congress of the 
intention to designate as a foreign terrorist organization, under 8 
U.S.C. 1189(a).



Sec. 597.310  Funds.

    The term funds includes coin or currency of the United States or any 
other country, traveler's checks, personal checks, bank checks, money 
orders, stocks, bonds, debentures, drafts, letters of credit, any other 
negotiable instrument, and any electronic representation of any of the 
foregoing. An electronic representation of any of the foregoing includes 
any form of digital or electronic cash, coin, or currency in use 
currently or placed in use in the future.



Sec. 597.311  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.



Sec. 597.312  Interest.

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



Sec. 597.313  License.

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



Sec. 597.314  Person.

    The term person means an individual or entity.



Sec. 597.315  Specific license.

    The term specific license means any license or authorization not set 
forth in this part but issued pursuant to this part.



Sec. 597.316  Transaction.

    The term transaction shall have the meaning set forth in 18 U.S.C. 
1956(c)(3), as from time to time amended. As of the effective date, this 
term includes a purchase, sale, loan, pledge, gift, transfer, delivery, 
or other disposition of any asset, and with respect to a financial 
institution includes a deposit, withdrawal, transfer between accounts, 
exchange of currency, loan, extension of credit, purchase or sale of any 
stock, bond, certificate of deposit, or other monetary instrument, use 
of a safe deposit box, or any other payment, transfer, or delivery by, 
through, or to a financial institution, by whatever means effected.



Sec. 597.317  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 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. 597.318  United States.

    The term United States means the United States, its territories, 
states,

[[Page 910]]

commonwealths, districts, and possessions, and all areas under the 
jurisdiction or authority thereof.



Sec. 597.319  U.S. financial institution.

    The term U.S. financial institution means:
    (a) Any financial institution organized under the laws of the United 
States, including such financial institution's foreign branches;
    (b) Any financial institution operating or doing business in the 
United States; or
    (c) Those branches, offices and agencies of foreign financial 
institutions which are located in the United States, but not such 
foreign financial institutions' other foreign branches, offices, or 
agencies.



                       Subpart D--Interpretations



Sec. 597.401  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. 597.402  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. 597.403  Termination and acquisition of an interest in blocked funds.

    (a) Whenever a transaction licensed or authorized by or pursuant to 
this part results in the transfer of funds (including any interest in 
funds) away from a foreign terrorist organization or its agent, such 
funds shall no longer be deemed to be funds in which the foreign 
terrorist organization or its agent has or has had an interest, or which 
are held in the name of a foreign terrorist organization or its agent, 
unless there exists in the funds another interest of a foreign terrorist 
organization or its agent, 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 funds (including any 
interest in funds) are or at any time since the effective date have been 
held by a foreign terrorist organization or its agent, or at any time 
thereafter are transferred or attempted to be transferred to a foreign 
terrorist organization or its agent, including by the making of any 
contribution to or for the benefit of a foreign terrorist organization 
or its agent, such funds shall be deemed to be funds in which there 
exists an interest of the foreign terrorist organization or its agent.



Sec. 597.404  Setoffs prohibited.

    A setoff against blocked funds (including a blocked account) by a 
U.S. financial institution is a prohibited transaction under 
Sec. 597.201 if effected after the effective date.



Sec. 597.405  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, foreign terrorist organization or its 
agent or involving a debit to a blocked account or a transfer of blocked 
funds not explicitly authorized within the terms of the license.



Sec. 597.406  Offshore transactions.

    The prohibitions contained in Sec. 597.201 apply to transactions by 
U.S. financial institutions in locations outside the United States with 
respect to funds or assets which the U.S. financial institution knows, 
or becomes aware, are held in the name of a foreign terrorist 
organization or its agent, or in which the U.S. financial institution

[[Page 911]]

knows, or becomes aware that, a foreign terrorist organization or its 
agent has or has had an interest since the effective date.



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 597.501  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.
    (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. 597.502  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. 597.503  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 by a financial institution 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. 597.503: Please refer to Secs. 501.603 and 597.601 of 
this chapter for mandatory reporting requirements regarding financial 
transfers.



Sec. 597.504  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, photostats, credit reports, transcripts of 
statements, registered mail insurance, stationery and supplies, check 
books, and other similar items.



Sec. 597.505  Payment for certain legal services.

    Specific licenses may be issued, on a case-by-case basis, 
authorizing receipt of payment of professional fees and reimbursement of 
incurred expenses through a U.S. financial institution for

[[Page 912]]

the following legal services by U.S. persons:
    (a) Provision of legal advice and counseling to a foreign terrorist 
organization or an agent thereof 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 any of the prohibitions of this part;
    (b) Representation of a foreign terrorist organization or an agent 
thereof when named as a defendant in or otherwise made a party to 
domestic U.S. legal, arbitration, or administrative proceedings;
    (c) Initiation and conduct of domestic U.S. legal, arbitration, or 
administrative proceedings on behalf of a foreign terrorist organization 
or an agent thereof;
    (d) Representation of a foreign terrorist organization or an agent 
thereof before any federal or state agency with respect to the 
imposition, administration, or enforcement of U.S. sanctions against a 
foreign terrorist organization or an agent thereof;
    (e) Provision of legal services to a foreign terrorist organization 
or an agent thereof in any other context in which prevailing U.S. law 
requires access to legal counsel at public expense; and
    (f) Representation of a foreign terrorist organization seeking 
judicial review of a designation before the United States Court of 
Appeals for the District of Columbia Circuit pursuant to 8 U.S.C. 
1189(b)(1).



                           Subpart F--Reports



Sec. 597.601  Records and reports.

    For provisions relating to records and reports, see subpart C of 
part 501 of this chapter; provided, however, that all of the powers 
afforded the Director pursuant to the first 3 sentences of Sec. 501.602 
of this chapter may also be exercised by the Attorney General in 
conducting administrative investigations pursuant to 18 U.S.C. 2339B(e); 
provided further, that the investigative authority of the Director 
pursuant to Sec. 501.602 of this chapter shall be exercised in 
accordance with 18 U.S.C. 2339B(e); and provided further, that for 
purposes of this part no person other than a U.S. financial institution 
and its directors, officers, employees, and agents shall be required to 
maintain records or to file any reports or furnish any information under 
Secs. 501.601, 501.602, or 501.603 of this chapter.



                          Subpart G--Penalties



Sec. 597.701  Penalties.

    (a) Attention is directed to 18 U.S.C. 2339B(a)(1), as added by 
Public Law 104-132, 110 Stat. 1250-1253, section 303, which provides 
that whoever, within the United States or subject to the jurisdiction of 
the United States, knowingly provides material support or resources to a 
foreign terrorist organization, or attempts or conspires to do so, shall 
be fined under title 18, United States Code, or imprisoned for not more 
than 10 years, or both.
    (b) Attention is directed to 18 U.S.C. 2339B(b), as added by Public 
Law 104-132, 110 Stat. 1250-1253, section 303, which provides that, 
except as authorized by the Secretary of the Treasury, any financial 
institution that knowingly fails to retain possession of or maintain 
control over funds in which a foreign terrorist organization or its 
agent has an interest, or to report the existence of such funds in 
accordance with these regulations, shall be subject to a civil penalty 
in an amount that is the greater of $50,000 per violation, or twice the 
amount of which the financial institution was required to retain 
possession or control.
    (c) Attention is 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 not more than 5 years, or 
both.

[[Page 913]]

    (d) Conduct covered by this part may also be subject to relevant 
provisions of other applicable laws.



Sec. 597.702  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, and the Director, acting in 
coordination with the Attorney General, determines that civil penalty 
proceedings are warranted, the Director shall issue to the person 
concerned a notice of 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 
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 within 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.



Sec. 597.703  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 respondent 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 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. 597.704  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, the Director promptly shall notify the respondent in writing 
of that determination and that no monetary penalty will be imposed.
    (b) Violation. (1) 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, the Director promptly shall issue a written notice of the 
imposition of the monetary penalty on the respondent. The issuance of a 
written notice of the imposition of a monetary penalty shall constitute 
final agency action.
    (2) The penalty notice shall inform the respondent that payment of 
the assessed penalty must be made within 30 days of the mailing of the 
penalty notice.

[[Page 914]]

    (3) The penalty notice shall inform the respondent of the 
requirement to furnish respondent's taxpayer identification number 
pursuant to 31 U.S.C. 7701 and that the Department intends to use such 
number for the purposes of collecting and reporting on any delinquent 
penalty amount in the event of a failure to pay the penalty imposed.



Sec. 597.705  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. 597.801  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 
subpart D of part 501 of this chapter.



Sec. 597.802  Delegation by the Secretary of the Treasury.

    Any action which the Secretary of the Treasury is authorized to take 
pursuant to 8 U.S.C. 1189 or 18 U.S.C. 2339B, as added by Public Law 
104-132, 110 Stat. 1248-1253, sections 302 and 303, 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. 597.901  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.



PART 598--FOREIGN NARCOTICS KINGPIN SANCTIONS REGULATIONS--Table of Contents




     Subpart A--Relation of this Part to Other Laws and Regulations

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

                         Subpart B--Prohibitions

598.201   Applicability of sanctions.
598.202   Blocking of assets.
598.203   Prohibited transactions involving blocked property.
598.204   Evasions; attempts; conspiracies.
598.205   Effect of transfers violating the provisions of this part.
598.206   Holding of funds in interest-bearing accounts; investment and 
          reinvestment.

                     Subpart C--General Definitions

598.301   Blocked account; blocked property.
598.302   Effective date.
598.303   Entity.
598.304   Foreign Narcotics Kingpin Designation Act.
598.305   Foreign person.
598.306   General license.
598.307   Interest.
598.308   License.
598.309   Narcotic drug; controlled substance; listed chemical.
598.310   Narcotics trafficking.
598.311   Person.
598.312   Property; property interest.
598.313   Significant foreign narcotics trafficker.

[[Page 915]]

598.314   Specially designated narcotics trafficker.
598.315   Specific license.
598.316   Transfer.
598.317   United States.
598.318   United States person; U.S. person.
598.319   U.S. financial institution.

                       Subpart D--Interpretations

598.401   Reference to amended sections.
598.402   Effect of amendment.
598.403   Termination and acquisition of an interest in blocked 
          property.
598.404   Setoffs prohibited.
598.405   Transactions incidental to a licensed transaction.
598.406   Provision of services.
598.407   Offshore transactions.
598.408   Alleged change in ownership or control of an entity designated 
          as a specially designated narcotics trafficker.
598.409   Credit extended and cards issued by U.S. financial 
          institutions.
598.410   Payments from blocked accounts to U.S. exporters and for other 
          obligations prohibited.

 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy

598.501   General and specific licensing procedures.
598.502   Effect of license.
598.503   Exclusion from licenses.
598.504   Payments and transfers to blocked accounts in U.S. financial 
          institutions.
598.505   Investment and reinvestment of certain funds.
598.506   Entries in certain accounts for normal service charges 
          authorized.
598.507   Provision of certain legal services authorized.

                           Subpart F--Reports

598.601   Records and reports.

                          Subpart G--Penalties

598.701   Penalties.
598.702   Prepenalty notice.
598.703   Response to prepenalty notice; informal settlement.
598.704   Penalty imposition or withdrawal.
598.705   Administrative collection; referral to United States 
          Department of Justice.
598.706   Judicial review of civil penalty.

                          Subpart H--Procedures

598.801   Procedures.
598.802   Availability of information pursuant to the Freedom of 
          Information Act.
598.803   Delegation by the Secretary of the Treasury.

                   Subpart I--Paperwork Reduction Act

598.901   Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 21 U.S.C. 1901-1908; 31 U.S.C. 321(b); Pub. 
L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note).

    Source: 65 FR 41336, July 5, 2000, unless otherwise noted.



     Subpart A--Relation of This Part to Other Laws and Regulations



Sec. 598.101  Relation of this part to other laws and regulations.

    (a) This part is separate from, and independent of, the other parts 
of this chapter, including part 536 of this chapter, ``Narcotics 
Trafficking Sanctions Regulations,'' 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 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. 598.201  Applicability of sanctions.

    A specially designated narcotics trafficker is subject to any and 
all sanctions authorized by the Foreign Narcotics Kingpin Designation 
Act and implemented in this part. The application of sanctions on any 
specially designated narcotics trafficker will remain in effect until 
revoked by the President pursuant to section 804(h)(2) of the Foreign 
Narcotics Kingpin Designation Act, waived by the President pursuant to 
section 804(g)(1) of that Act, or revoked by the Secretary of the

[[Page 916]]

Treasury pursuant to section 805(e)(1)(A) of that Act.



Sec. 598.202  Blocking of assets.

    Except to the extent provided in regulations, orders, instructions, 
licenses, or directives issued pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date, there are blocked as of the 
effective date, and any date thereafter, all such property and interests 
in property within the United States, or within the possession or 
control of any United States person, which are owned or controlled by a 
specially designated narcotics trafficker.



Sec. 598.203  Prohibited transactions involving blocked property.

    (a) Except to the extent provided in regulations, orders, 
instructions, licenses, or directives issued pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date, any transaction or dealing by a 
United States person, or within the United States, in property or 
interests in property of a specially designated narcotics trafficker is 
prohibited.
    (b) Unless otherwise authorized by this part or by a specific 
license expressly referring to this section, any dealing in any security 
(or evidence thereof) held within the possession or control of a U.S. 
person and either registered or inscribed in the name of or known to be 
held for the benefit of any specially designated narcotics trafficker 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 
any such security or the endorsement or guaranty of signatures on 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. 598.204  Evasions; attempts; conspiracies.

    Except to the extent provided in regulations, orders, instructions, 
licenses, or directives issued pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date, any transaction or dealing by any 
United States person, or within the United States, that evades or 
avoids, or has the effect of evading or avoiding, and any endeavor, 
attempt, or conspiracy to violate any of the prohibitions set forth in 
this part is prohibited.



Sec. 598.205  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 of a specially designated 
narcotics trafficker is null and void and shall not be the basis for the 
assertion or recognition of any interest in or right, remedy, power, or 
privilege with respect to such property or property interests.
    (b) No transfer before the effective date shall be the basis for the 
assertion or recognition of any right, remedy, power, or privilege with 
respect to, or any interest in, any property or interest in property of 
a specially designated narcotics trafficker, unless the person with whom 
such property is held or maintained, prior to that date, had written 
notice of the transfer or by any written evidence had recognized such 
transfer.
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by or pursuant to the direction or authorization of 
the Director of the Office of Foreign Assets Control before, during, or 
after a transfer shall validate such transfer or make it enforceable to 
the same extent that it would be valid or enforceable but for the 
provisions of the Foreign Narcotics Kingpin Designation Act, this part, 
and any regulation, order, directive, ruling, instruction, or license 
issued pursuant to this part.

[[Page 917]]

    (d) Property transfers 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 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 issued pursuant to this part and was not so licensed, 
or if a license did purport to cover the transfer, that such license 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 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, direction, or license issued 
pursuant to this part;
    (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 withholding 
of material facts or was otherwise fraudulently obtained.
    Note to paragraph (d) of Sec. 598.205:
    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 in which 
on or since the effective date there existed an interest of a specially 
designated narcotics trafficker.



Sec. 598.206  Holding of funds in interest-bearing accounts; investment and reinvestment.

    (a) Except as provided in paragraph (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. 598.202 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, 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. 598.202 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. 598.202 may continue 
to be held in the same type of accounts or instruments, provided the 
funds earn interest

[[Page 918]]

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 at the time the property becomes subject to 
Sec. 598.202. 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 that provides immediate financial or economic 
benefit or access to specially designated narcotics traffickers, nor may 
their holder cooperate in or facilitate the pledging or other attempted 
use as collateral of blocked funds or other assets.
    Note to Sec. 598.206: Please refer to Sec. 598.505 for authorized 
investment and reinvestment of certain funds held in blocked accounts.



                     Subpart C--General Definitions



Sec. 598.301  Blocked account; blocked property.

    The terms blocked account and blocked property mean any account or 
property subject to Sec. 598.202 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. 598.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives of this part, which is December 
3, 1999, or, in the case of specially designated narcotics traffickers 
designated after that date, the earlier of the date on which actual or 
constructive notice of such designation is received.



Sec. 598.303  Entity.

    The term entity means a partnership, joint venture, association, 
corporation, organization, network, group, or subgroup, or any form of 
business collaboration.



Sec. 598.304  Foreign Narcotics Kingpin Designation Act.

    The term Foreign Narcotics Kingpin Designation Act means the Foreign 
Narcotics Kingpin Designation Act, Pub. L. 106-120, title 8, 113 Stat. 
1606, 1626-1636 (codified at 21 U.S.C. 1901-1908, 8 U.S.C. 
1182(a)(2)(C)).



Sec. 598.305  Foreign person.

    The term foreign person means any citizen or national of a foreign 
state or any entity not organized under the laws of the United States, 
but does not include a foreign state.



Sec. 598.306  General license.

    The term general license means any license or authorization the 
terms of which are set forth in this part.



Sec. 598.307  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. 598.308  License.

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



Sec. 598.309  Narcotic drug; controlled substance; listed chemical.

    The terms narcotic drug, controlled substance, and listed chemical 
have the meanings given those terms in section 102 of the Controlled 
Substances Act (21 U.S.C. 802).



Sec. 598.310  Narcotics trafficking.

    The term narcotics trafficking means any illicit activity to 
cultivate, produce, manufacture, distribute, sell, finance, or transport 
narcotic drugs, controlled substances, or listed chemicals, or otherwise 
endeavor or attempt to do so, or to assist, abet, conspire, or collude 
with others to do so.



Sec. 598.311  Person.

    The term person means an individual or entity.

[[Page 919]]



Sec. 598.312  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, whether present, future, or contingent.



Sec. 598.313  Significant foreign narcotics trafficker.

    The term significant foreign narcotics trafficker means any foreign 
person that plays a significant role in international narcotics 
trafficking that the President has determined to be appropriate for 
sanctions and has publicly identified under section 804(b) or section 
804(h)(1) of the Foreign Narcotics Kingpin Designation Act.



Sec. 598.314  Specially designated narcotics trafficker.

    The term specially designated narcotics trafficker means:
    (a) Significant foreign narcotics traffickers; and
    (b) Foreign persons designated by the Secretary of the Treasury, in 
consultation with the Attorney General, the Director of Central 
Intelligence, the Director of the Federal Bureau of Investigation, the 
Administrator of the Drug Enforcement Administration, the Secretary of 
Defense, and the Secretary of State, because they are found to be:
    (1) Materially assisting in, or providing financial or technological 
support for or to, or providing goods or services in support of, the 
international narcotics trafficking activities of a specially designated 
narcotics trafficker;
    (2) Owned, controlled, or directed by, or acting for or on behalf 
of, a specially designated narcotics trafficker; or
    (3) Playing a significant role in international narcotics 
trafficking.

    Note to Sec. 598.314: Please refer to the appendices at the end of 
this chapter V for listings of persons determined to fall within this 
definition who have been designated pursuant to this part. Section 
501.807 of this chapter V sets forth the procedures to be followed by 
persons seeking administrative reconsideration of their designation or 
who wish to assert that the circumstances resulting in designation no 
longer apply.



Sec. 598.315  Specific license.

    The term specific license means any license not set forth in this 
part but issued pursuant to this part.



Sec. 598.316  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 upon the foregoing, the 
term transfer includes 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

[[Page 920]]

judicial or administrative process or order; 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. 598.317  United States.

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



Sec. 598.318  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, an entity organized under 
the laws of the United States (including its foreign branches), or any 
person within the United States.



Sec. 598.319  U.S. financial institution.

    The term U.S. financial institution means any U.S. entity (including 
a foreign branch) 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, as principal or agent. This terms 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 which are located in the United States, but not such 
institutions' foreign branches, offices, or agencies.



                       Subpart D--Interpretations



Sec. 598.401  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. 598.402  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. 598.403  Termination and acquisition of an interest in blocked property.

    (a) Whenever a transaction licensed pursuant to this part results in 
the transfer of property (including any property interest) away from a 
specially designated narcotics trafficker, the transferred property will 
no longer be considered property in which that person has or has had an 
interest. Provided no other specially designated narcotics trafficker 
has any interest in the transferred property following the transfer, the 
transferred property will no longer be considered property blocked 
pursuant to Sec. 598.202.
    (b) Unless otherwise specifically provided in a license 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 that person has an interest, and such property is therefore 
blocked pursuant to Sec. 598.202.

[[Page 921]]



Sec. 598.404  Setoffs prohibited.

    A setoff against blocked property (including a blocked account), 
whether by a U.S. financial institution or other U.S. person, is a 
prohibited transfer under Sec. 598.203 if effected after the effective 
date.



Sec. 598.405  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 a 
license, prohibited transactions by specially designated narcotics 
traffickers and debits to accounts blocked pursuant to Sec. 598.202 are 
not considered incidental to a licensed transaction and therefore remain 
prohibited.



Sec. 598.406  Provision of services.

    (a) The prohibitions contained in Sec. 598.203 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
    (2) With respect to property interests of a specially designated 
narcotics trafficker.
    (b) Example: U.S. persons may not, except as authorized by or 
pursuant to this part, provide legal, accounting, financial, brokering, 
freight forwarding, transportation, public relations, or other services 
to a specially designated narcotics trafficker. See Sec. 598.507 on 
licensing policy with regard to the provision of certain legal services.



Sec. 598.407  Offshore transactions.

    The prohibitions contained in Sec. 598.203 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, that a 
specially designated narcotics trafficker has or has had an interest 
since the effective date.



Sec. 598.408  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 list of specially 
designated narcotics traffickers unless, upon investigation by the 
Office of Foreign 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, or other means of changing ownership or control, is 
legitimate and that the entity no longer meets the criteria for 
designation under Sec. 598.314. 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 
international narcotics trafficking activities of specially designated 
narcotics traffickers for purposes of Sec. 598.314(b)(1). 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

[[Page 922]]

entity will not be considered as constituting a change of the entity's 
status.



Sec. 598.409  Credit extended and cards issued by U.S. financial institutions.

    The prohibition in Sec. 598.203 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 
specially designated narcotics trafficker.



Sec. 598.410  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 or services 
exported prior to the effective date of the blocking, except as 
authorized pursuant to this part.



 Subpart E--Licenses, Authorizations, and Statements of Licensing Policy



Sec. 598.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501, 
subpart D 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.



Sec. 598.502  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. 598.503  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. 598.504  Payments and transfers to blocked accounts in U.S. financial institutions.

    Any payment of funds or transfer of credit in which a specially 
designated narcotics trafficker 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.

[[Page 923]]

    Note to Sec. 598.504: Please refer to part 501, subpart C of this 
chapter for mandatory reporting requirements regarding financial 
transfers. See also Sec. 598.206 concerning the obligation to hold 
blocked funds in interest-bearing accounts.



Sec. 598.505  Investment and reinvestment of certain funds.

    Subject to the requirements of Sec. 598.206, U.S. financial 
institutions are authorized to invest and reinvest assets held in 
blocked accounts in the name of a specially designated narcotics 
trafficker, 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 in no case may funds be transferred 
outside the United States for this purpose;
    (b) The proceeds of such investments and reinvestments are not 
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 specially designated narcotics 
trafficker.



Sec. 598.506  Entries in certain accounts for normal service charges authorized.

    (a) U.S. financial institutions are 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 charges 
includes but is not limited to charges in payment or reimbursement for 
interest due; cable, telegraph, or telephone charges; postage costs; 
custody fees; small adjustment charges to correct bookkeeping errors; 
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. 598.507  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 for 
such services must be specifically licensed.
    (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 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 prohibition contained in 
this chapter;
    (2) Representation of a specially designated narcotics trafficker 
when named as a defendant in or otherwise made a party 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 of a specially designated narcotics trafficker;
    (4) Representation of a specially designated narcotics trafficker 
before any federal or state agency with respect to the imposition, 
administration, or enforcement of U.S. sanctions against such person; 
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) The provision of any other legal services to a specially 
designated narcotics trafficker, not otherwise authorized in 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

[[Page 924]]

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 of a 
specially designated narcotics trafficker is prohibited unless 
specifically licensed in accordance with Sec. 598.205(e).



                           Subpart F--Reports



Sec. 598.601  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. 598.701  Penalties.

    (a) Attention is directed to section 807 of the Foreign Narcotics 
Kingpin Designation Act, which is applicable to violations of the 
provisions of any license, rule, or regulation issued by or pursuant to 
the direction or authorization of the Secretary of the Treasury pursuant 
to this part or otherwise under that Act. Section 807 of Foreign 
Narcotics Kingpin Designation Act provides that:
    (1) Whoever willfully violates the provisions of the Foreign 
Narcotics Kingpin Designation Act, or any license, rule, or regulation 
issued pursuant to that Act, or willfully neglects or refuses to comply 
with any order of the President issued under that Act, shall be 
imprisoned for not more than 10 years, fined in the amount provided in 
title 18, United States Code, or both, or, in the case of an entity, 
fined not more than $10,000,000;
    (2) Any officer, director, or agent of any entity who knowingly 
participates in a violation of the provisions of the Foreign Narcotics 
Kingpin Designation Act, shall be imprisoned for not more than 30 years, 
fined not more than $5,000,000, or both;
    (3) A civil penalty not to exceed $1,000,000 per violation may be 
imposed by the Secretary of the Treasury on any person who violates any 
license, order, rule, or regulation issued in compliance with the 
provisions of the Foreign Narcotics Kingpin Designation Act.
    (b) The criminal penalties provided in this part are subject to 
increase pursuant to 18 U.S.C. 3571.
    (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 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.



Sec. 598.702  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 Foreign 
Narcotics Kingpin Designation 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

[[Page 925]]

monetary penalty should not be imposed or why, if imposed, the monetary 
penalty should be in a lesser amount than proposed.



Sec. 598.703  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 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 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. 598.704  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. The issuance of a written notice of the imposition of a 
monetary penalty shall constitute final agency action.
    (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.



Sec. 598.705  Administrative collection; referral to United States Department of Justice.

    In the event that the respondent does not pay a 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 a 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.



Sec. 598.706  Judicial review of civil penalty.

    A civil penalty imposed pursuant to this subpart G is subject to 
judicial review only to the extent provided in 5 U.S.C. 702.

[[Page 926]]



                          Subpart H--Procedures



Sec. 598.801  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 
Privacy Act (5 U.S.C. 552a), see part 501, subpart D of this chapter.



Sec. 598.802  Availability of information pursuant to the Freedom of Information Act.

    Any record or information obtained or created in the implementation 
of this part is not subject to disclosure under section 552(a)(3) of the 
Freedom of Information Act. Information required to be made available to 
the public under other provisions of the Freedom of Information Act (5 
U.S.C. 552) will be made available in accordance with Sec. 501.805(a) of 
this chapter.



Sec. 598.803  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to the Foreign Narcotics Kingpin Designation Act 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. 598.901  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.

                         Appendices to Chapter V

    Notes: The alphabetical lists below provide the following 
information (to the extent known) concerning blocked persons, specially 
designated nationals, specially designated terrorists, foreign terrorist 
organizations, specially designated narcotics traffickers and blocked 
vessels:
    1. For blocked individuals: name and title (known aliases), address, 
(other identifying information), (the notation ``individual''), 
[sanctions program under which the individual is blocked].
    2. For blocked entities: name (known former or alternate names), 
address, [sanctions program under which the entity is blocked].
    3. For blocked vessels: name, sanctions program under which the 
vessel is blocked, registration of vessel, type, size in dead weight 
and/or gross tons, call sign, vessel owner, and alternate names.
    4. Abbreviations: ``a.k.a.'' means ``also known as''; ``f.k.a.'' 
means ``formerly known as''; ``n.k.a.'' means ``now known as''; ``DOB'' 
means ``date of birth''; ``DWT'' means ``deadweight''; ``FRYM'' means 
``Federal Republic of Yugoslavia (Serbia and Montenegro)--Milosevic''; 
``GRT'' means ``Gross Registered Tonnage''; ``POB'' means ``place of 
birth''.
    5. U.S. financial institutions are cautioned to review the details 
of a transaction prior to blocking in which the abbreviation of a 
foreign terrorist organization (``FTO'') appears in appendix A to ensure 
that the transaction relates to the FTO.
    6. References to regulatory parts in chapter V or other authorities:
[BALKANS]: Executive Order 13219, 66 FR 34778, June 29, 2001;
[CUBA]: Cuban Assets Control Regulations, part 515;
[FRYM]: Executive Order 13192, 66 FR 7379, Jan. 23, 2001;
[FTO]: Foreign Terrorist Organizations Sanctions Regulations, part 597;
[IRAQ]: Iraqi Sanctions Regulations, part 575;
[LIBYA]: Libyan Sanctions Regulations, part 550;
[NKOREA]: Foreign Assets Control Regulations, part 500:
[SDGT]: Executive Order 13224, 66 FR 49079, September 25, 2001;
[SDNT]: Narcotics Trafficking Sanctions Regulations, part 536;
[SDNTK]: Foreign Narcotics Kingpin Sanctions Regulations, part 598;
[SDT]: Terrorism Sanctions Regulations, part 596;
[SUDAN]: Sudanese Sanctions Regulations, part 538;
[TALIBAN]: Taliban (Afghanistan) Sanctions Regulations, part 545;

[[Page 927]]

[UNITA]: UNITA (Angola) Sanctions Regulations, part 590.
    7. Changes to these appendices are made through amendments published 
in the Federal Register. Frequently updated information on Office of 
Foreign Assets Control (``OFAC'') designations is provided for 
examination or downloading on OFAC's Internet site (http://
www.treas.gov/ofac). Among other data, the Internet site posts changes 
in designations and identifying information, and provides country-by-
country lists of names. Information is also available by fax through 
OFAC's fax-on-demand system at 202/622-0077 and on various computer 
bulletin boards serviced by OFAC. Updated information on OFAC 
designations should be consulted before engaging in transactions subject 
to the economic sanctions programs in chapter V. (Please call OFAC 
Compliance Programs Division for current electronic sources of OFAC 
information: 202/622-2490.)

[62 FR 67729, Dec. 30, 1997, as amended at 63 FR 29609, June 1, 1998; 64 
FR 34985, June 30, 1999; 64 FR 60661, Nov. 8, 1999; 65 FR 39100, June 
23, 2000; 65 FR 75630, Dec. 4, 2000; 66 FR 57373, Nov. 15, 2001]

   Appendix A to Chapter V--Alphabetical Listing of Blocked Persons, 
Specially Designated Nationals, Specially Designated Terrorists, Foreign 
 Terrorist Organizations, and Specially Designated Narcotics Traffickers

7th APRIL CARD BOARD FACTORY, Tajoura, Libya [LIBYA]
17 NOVEMBER (see REVOLUTIONARY ORGANIZATION 17 NOVEMBER) [FTO]
32 COUNTY SOVEREIGNTY COMMITTEE (a.k.a. 32 COUNTY SOVEREIGNTY MOVEMENT; 
a.k.a. IRISH REPUBLICAN PRISONERS WELFARE ASSOCIATION; a.k.a. REAL IRA; 
a.k.a. REAL IRISH REPUBLICAN ARMY; a.k.a. REAL OGLAIGH NA HEIREANN; 
a.k.a. RIRA) [FTO]
32 COUNTY SOVEREIGNTY MOVEMENT (a.k.a. 32 COUNTY SOVEREIGNTY COMMITTEE; 
a.k.a. IRISH REPUBLICAN PRISONERS WELFARE ASSOCIATION; REAL IRA; a.k.a. 
REAL IRISH REPUBLICAN ARMY; a.k.a. REAL OGLAIGH NA HEIREANN; a.k.a. 
RIRA) [FTO]
A. BORTOLOTTI & CO. S.P.A. (a.k.a. BORTOLOTTI), Cremona, Italy [LIBYA]
A. BORTOLOTTI & CO. S.P.A. (a.k.a. BORTOLOTTI), Via Predore, 59, 24067 
Sarnico, Bergamo, Italy [LIBYA]
A.I.C. COMPREHENSIVE RESEARCH INSTITUTE (see AUM SHINRIKYO) [FTO]
A.I.C. SOGO KENKYUSHO (see AUM SHINRIKYO) [FTO]
A.T.E. INTERNATIONAL LTD. (f.k.a. RWR INTERNATIONAL COMMODITIES), 3 
Mandeville Place, London, England [IRAQ]
A.W.A. ENGINEERING LIMITED, 3 Mandeville Place, London, England [IRAQ]
ABASTECEDORA NAVAL Y INDUSTRIAL, S.A. (a.k.a. ANAINSA), Panama [CUBA]
ABBAS, Abdul Hussein, Italy (individual) [IRAQ]
ABBAS, Abu (a.k.a. ZAYDAN, Muhammad), Director of PALESTINE LIBERATION 
FRONT - ABU ABBAS FACTION (DOB 10 December 1948) (individual) [SDT]
ABBAS, Kassim, Italy (individual) [IRAQ]
ABBOTT, John G., 34 Grosvenor Street, London W1X 9FG, England 
(individual) [LIBYA]
ABD AL-GHAFUR, Humam Abd a-Khaliq (a.k.a. GHAFUR, Humam Abdel Khaleq 
Abdel), Minister of Higher Education and Scientific Research, Iraq (DOB 
1945) (individual) [IRAQ]
'ABD ALLAH, 'Issam 'Ali Muhammad (see MUSA, Rifa'i Ahmad Taha) [SDT]
'ABD-AL-'IZ (see MUSA, Rifa'i Ahmad Taha) [SDT]
ABD-AL-WAHAB, Abd-al-Hai Ahmad (see MUSA, Rifa'i Ahmad Taha) [SDT]
ABDALLA, Fazul (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
ABDALLAH, Ramadan (a.k.a. ABDULLAH, Dr. Ramadan; a.k.a. SHALLAH, Dr. 
Ramadan Abdullah; a.k.a. SHALLAH, Ramadan Abdalla Mohamed), Secretary 
General of the PALESTINIAN ISLAMIC JIHAD, Damascus, Syria (DOB 1 January 
1958; POB Gaza City, Gaza Strip; SSN 589-17-6824 (U.S.A.); Passport No. 
265 216 (Egypt).) (individual) [SDT]
ABDALLAH, Tarwat Salah (see SHIHATA, Thirwat Salah) (individual) [SDGT]
ABDEL RAHMAN (see ATWAH, Muhsin Musa Matwalli) (individual) [SDGT]
ABDELMULLA, Yousef Abd-El-Razegh (a.k.a. ABDULMOLA, Yousef Abd-El-
Razegh), P.O. Box 4538, Maidan Masif El Baladi, Tripoli, Libya 
(individual) [LIBYA]
ABDELNUR, Nury de Jesus, Panama (individual) [CUBA]
ABDUL JAWAD, Mohammed (a.k.a. ABDULJAWAD, Muhammed I.), Tripoli, Libya 
(individual) [LIBYA]
ABDUL RAHMAN (see ATWAH, Muhsin Musa Matwalli) (individual) [SDGT]
ABDULLAH, Abdullah Ahmed (a.k.a. ABU MARIAM; a.k.a. AL-MASRI, Abu 
Mohamed; a.k.a. SALEH), Afghanistan (DOB 1963; POB Egypt; Citizen Egypt) 
(individual) [SDGT]
ABDULLAH, Sheikh Taysir (see ATEF, Muhammad) [SDT]
ABDULLAH, Sheikh Taysir (see ATIF, Muhammad) (individual) [SDT] [SDGT]
ABDUREHMAN, Ahmed Mohammed (see ALI, Ahmed Mohammed Hamed) (individual) 
[SDGT]
ABRIL CORTEZ, Oliverio (f.k.a. CORTEZ, Oliverio Abril), Calle 18A No. 
8A-20, Jamundi, Colombia; c/o AGROPECUARIA BETANIA LTDA., Cali, 
Colombia; c/o

[[Page 928]]

CONSTRUCTORA DIMISA LTDA., Cali, Colombia; c/o INVERSIONES EL GRAN 
CRISOL LTDA., Cali, Colombia; c/o INVERSIONES EL PEN[tilde]ON S.A., 
Cali, Colombia; c/o INVERSIONES GEMINIS S.A., Cali, Colombia; c/o 
VALLADARES LTDA., Cali, Colombia; c/o W. HERRERA Y CIA. S. EN C., Cali, 
Colombia; Cedula No. 3002003 (Colombia) (individual) [SDNT]
ABU ABDALLAH (see AL-IRAQI, Abd al-Hadi) (individual) [SDGT]
ABU FATIMA (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
ABU GHUNAYM SQUAD OF THE HIZBALLAH BAYT AL-MAQDIS (see PALESTINE ISLAMIC 
JIHAD-SHAQAQI FACTION) [SDT, FTO]
ABU HAFS (see ATEF, Muhammad) [SDT]
ABU HAFS (see ATIF, Muhammad) (individual) [SDT] [SDGT]
ABU HAFS THE MAURITANIAN (a.k.a. AL-SHANQITI, Khalid; a.k.a. AL-WALID, 
Mafouz Walad; a.k.a. AL-WALID, Mahfouz Ould; a.k.a. SLAHI, Mahamedou 
Ould) (DOB 1 Jan 1975) (individual) [SDGT]
ABU ISLAM (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
ABU ISMAIL (see UTHMAN, Omar Mahmoud) (individual) [SDGT]
ABU KHADIIJAH (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
ABU MARIAM (see ABDULLAH, Abdullah Ahmed) (individual) [SDGT]
ABU MARZOOK, Mousa Mohammed (a.k.a. ABU-'UMAR; a.k.a. ABU-MARZUQ, Dr. 
Musa; a.k.a. ABU-MARZUQ, Sa'id; a.k.a. MARZOOK, Mousa Mohamed Abou; 
a.k.a. MARZUK, Musa Abu), Political Leader in Amman, Jordan and 
Damascus, Syria for HAMAS (DOB 9 February 1951; POB Gaza, Egypt; 
Passport No. 92/664 (Egypt); SSN 523-33-8386.) (individual) [SDT]
ABU NIDAL ORGANIZATION (a.k.a. ANO; a.k.a. BLACK SEPTEMBER; a.k.a. FATAH 
REVOLUTIONARY COUNCIL; a.k.a. ARAB REVOLUTIONARY COUNCIL; a.k.a. ARAB 
REVOLUTIONARY BRIGADES; a.k.a. REVOLUTIONARY ORGANIZATION OF SOCIALIST 
MUSLIMS) [SDT, FTO]
ABU OMRAN (see AL-MUGHASSIL, Ahmad Ibrahim) (individual) [SDGT]
ABU SAYYAF GROUP (a.k.a. AL HARAKAT AL ISLAMIYYA) [FTO]
ABU SAYYAF GROUP (a.k.a. AL HARAKAT AL ISLAMIYYA) [FTO] [SDGT]
ABU SITTA, Subhi (see ATIF, Muhammad) (individual) [SDT] [SDGT]
ABU UMAR, Abu Omar (see UTHMAN, Omar Mahmoud) [SDGT]
ABU YASIR (see MUSA, Rifa'i Ahmad Taha) [SDT]
ABU ZUBAIDA (see ABU ZUBAYDAH) (individual) [SDGT]
ABU ZUBAYDAH (a.k.a. ABU ZUBAIDA; a.k.a. AL-WAHAB, Abd Al-Hadi; a.k.a. 
HUSAIN, Zain Al-Abidin Muhahhad; a.k.a. HUSAYN, Zayn al-Abidin Muhammad; 
a.k.a. TARIQ) (DOB 12 Mar 1971; POB Riyadh, Saudi Arabia) (individual) 
[SDGT]
ACCOUNTS AND ELECTRONICS EQUIPMENTS, c/o ENGINEERING EQUIPMENT 
CORPORATION, P.O. Box 97, Khartoum, Sudan [SUDAN]
ACE INDIC NAVIGATION CO. LTD., c/o ANGLO-CARIBBEAN SHIPPING CO. LTD., 
4th Floor, South Phase 2, South Quay Plaza II, 183, March Wall, London, 
England [CUBA]
ACECHILLY NAVIGATION CO. LTD., c/o ANGLO-CARIBBEAN SHIPPING CO. LTD., 
4th Floor, South Phase 2, South Quay Plaza II, 183, March Wall, London, 
England [CUBA]
ACEFROSTY SHIPPING CO., LTD., 171 Old Bakery Street, Valletta, Malta 
[CUBA]
ACERO, Cesar Augusto, Avenida 7N No. 17A-48, Cali, Colombia; c/o 
AGROPECUARIA LA ROBLEDA S.A., Cali, Colombia (Cedula No. 70564947 
(Colombia)) (individual) [SDNT]
ACEVEDO P., Francisco Luis, Carrera 1 No. 18-52, Cali, Colombia; c/o 
INVERSIONES INVERVALLE S.A., Cali, Colombia (Cedula No. 71660070 
(Colombia)) (individual) [SDNT]
ACIMOVIC, Slobodan, Assistant Director of Beogradska Banka (DOB 19 Sep 
51) (individual) [FRYM]
AD-DAR AL JAMAHIRIYA FOR PUBLISHING DISTRIBUTION & ADVERTISING, P.O. Box 
15977, Casablanca, Morocco [LIBYA]
AD-DAR AL JAMAHIRIYA FOR PUBLISHING DISTRIBUTION & ADVERTISING, P.O. Box 
17459, Misurata, Libya [LIBYA]
AD-DAR AL JAMAHIRIYA FOR PUBLISHING DISTRIBUTION & ADVERTISING, P.O. Box 
20108, Sebha, Libya [LIBYA]
AD-DAR AL JAMAHIRIYA FOR PUBLISHING DISTRIBUTION & ADVERTISING, P.O. Box 
321, Benghazi, Libya [LIBYA]
AD-DAR AL JAMAHIRIYA FOR PUBLISHING DISTRIBUTION & ADVERTISING, P.O. Box 
547, Valletta, Malta [LIBYA]
AD-DAR AL JAMAHIRIYA FOR PUBLISHING DISTRIBUTION & ADVERTISING, P.O. Box 
959, Tripoli, Libya [LIBYA]
ADBALLAH, Fazul (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
ADEMI, Xhevat, Member of National Liberation Army (NLA) (DOB: 8 Dec 
1962; POB: Tetovo, FYROM) (individual) [BALKANS]
ADEMULERO, Babestan Oluwole (see OGUNGBUYI, Oluwole A.) (individual) 
[SDNTK]
ADMACOOP (a.k.a. COOPERATIVA MULTIACTIVA DE ADMINISTRACION Y MANEJO 
ADMACOOP), Calle 12B No. 28-58, Bogota, Colombia; Carrera 28A No. 14-29,

[[Page 929]]

Bogota, Colombia; NIT  830030933-6 (Colombia) [SDNT]
ADMINCHECK LIMITED, 1 Old Burlington Street, London, England [IRAQ]
ADMINISTRACION INMOBILIARIA BOLIVAR S.A., Avenida 2CN No. 24N-92, Cali, 
Colombia; Calle 17N No. 6N-28, Cali, Colombia (NIT 800149060-5) 
[SDNT]
ADVANCED ELECTRONICS DEVELOPMENT, LTD., 3 Mandeville Place, London, 
England [IRAQ]
AEROCARIBBEAN AIRLINES (a.k.a. AERO-CARIBBEAN), Havana, Cuba [CUBA]
AEROTAXI EJECUTIVO, S.A., Managua, Nicaragua [CUBA]
AFRICAN DRILLING COMPANY, Khartoum, Sudan [SUDAN]
AFGHAN NATIONAL BANK (see BANKE MILLIE AFGHAN) [TALIBAN]
AFGHAN, Shear (a.k.a. AFGHAN, Sher; a.k.a. AFGHAN, Shir; a.k.a. AZIZ, 
Mohammad; a.k.a. KHAN, Abdullah) DOB 1962; alt. DOB 1959; POB Pakistan 
(individual) [SDNTK]
AFGHAN, Sher (a.k.a. AFGHAN, Shear; a.k.a. AFGHAN, Shir; a.k.a. AZIZ, 
Mohammad; a.k.a. KHAN, Abdullah) DOB 1962; alt. DOB 1959; POB Pakistan 
(individual) [SDNTK]
AFGHAN, Shir (a.k.a. AFGHAN, Shear; a.k.a. AFGHAN, Sher; a.k.a. AZIZ, 
Mohammad; a.k.a. KHAN, Abdullah) DOB 1962; alt. DOB 1959; POB Pakistan 
(individual) [SDNTK]
THE AFGHAN STATE BANK (see DA AFGHANISTAN BANK) [TALIBAN]
AFRICAN OIL CORPORATION, P.O. Box 1, Khartoum North, Sudan [SUDAN]
AGENCIA DE VIAJES GUAMA (a.k.a. GUAMA TOUR; a.k.a. GUAMATUR, S.A.; 
a.k.a. VIAJES GUAMA TOURS), Bal Harbour Shopping Center, Via Italia, 
Panama City, Panama [CUBA]
AGHA, Haji Abdul Manan (a.k.a. SAIYID, Abd Al-Man'am), Pakistan 
(individual) [SDGT]
AGHIL, Yousef I., Libya (individual) [LIBYA]
AGIP NORTH AFRICA AND MIDDLE EAST OIL COMPANY (a.k.a. AGIP (N.A.M.E.) 
LIMITED), Adahr, P.O. Box 346, Sciara Giakarta, Tripoli, Libya [LIBYA]
AGIP NORTH AFRICA AND MIDDLE EAST OIL COMPANY (a.k.a. AGIP (N.A.M.E.) 
LIMITED), Benghazi Office, P.O. Box 4120, Benghazi, Libya (Designation 
applies only to joint venture located in Libya) [LIBYA]
AGRICOLA GANADERA HENAO GONZALEZ Y CIA. S.C.S., Carrera 4A No. 16-04 
apt. 303, Cartago, Colombia; Km. 5 Via Aeropuerto, Cartago, Colombia; 
Carrera 1 No. 13-08, Cartago, Colombia; NIT  800021615-1 
(Colombia) [SDNT]
AGRICOLA HUMYAMI LTDA., Apartado Aereo 30352, Cali, Colombia [SDNT]
AGRICOLA SONGO LTDA., Calle 74 No. 53-30, Barranquilla, Colombia; NIT 
 890115794-3 (Colombia) [SDNT]
AGRICULTURAL BANK OF SUDAN, P.O. Box 1363, Khartoum, Sudan [SUDAN]
AGRICULTURAL CO-OPERATIVE BANK, Rashid Street, Baghdad, Iraq [IRAQ]
AGRICULTURAL ENGINEERING COMPANY, Libya [LIBYA]
AGROINVERSORA URDINOLA HENAO Y CIA. S.C.S., Calle 5 No. 22-39 of. 205, 
Cali, Colombia; Calle 52 No. 28E-30, Cali, Colombia; NIT  
800042180-1 (Colombia) [SDNT]
AGROPECUARIA BETANIA LTDA., Calle 70N No. 14-31, Cali, Colombia; Carrera 
61 No. 11-58, Cali, Colombia [SDNT]
AGROPECUARIA LA ROBLEDA S.A., Carrera 61 No. 11-58, Cali, Colombia; 
Avenida 2DN No. 24N-76, Cali, Colombia (NIT  800160353-2) 
[SDNT]
AGROPECUARIA Y REFRESTADORA HERREBE LTDA., Avenida 2N No. 7N-55 of. 501, 
Cali, Colombia [SDNT]
AGROVETERINARIA EL TORO (see INVERSIONES BOMBAY S.A.) [SDNT]
AGROVETERINARIA EL TORO 2 (see INVERSIONES BOMBAY S.A.) [SDNT]
AGUADO ORTIZ, Luis Jamerson, c/o D'CACHE S.A., Cali, Colombia; c/o 
DISTRIBUIDORA MIGIL LTDA., Cali, Colombia; c/o FLEXOEMPAQUES LTDA., 
Cali, Colombia; c/o INVERSIONES Y CONSTRUCCIONES COSMOVALLE LTDA., Cali, 
Colombia; c/o PLASTICOS CONDOR LTDA., Cali, Colombia; Cedula No. 2935839 
(Colombia) (individual) [SDNT]
AGUAS LOZADA, Rafael, c/o COSMEPOP, Bogota, Colombia; c/o DROGAS LA 
REBAJA BOGOTA S.A., Bogota, Colombia; c/o LABORATORIOS BLAIMAR DE 
COLOMBIA S.A., Bogota, Colombia (Cedula No. 11385426 (Colombia)) 
(individual) [SDNT]
AGUDELO GALVEZ, Lieride, c/o INVERSIONES GEMINIS S.A., Cali, Colombia 
(Cedula No. 6511576 (Colombia)) (individual) [SDNT]
AGUDELO, Ivan de Jesus, Avenida 6N No. 47-197 17, Cali, Colombia; c/o 
INDUSTRIA MADERERA ARCA LTDA., Cali, Colombia (individual) [SDNT]
AGUIAR, Raul, Director, Banco Nacional de Cuba, Avenida de Concha, 
Espina 8, E-28036, Madrid, Spain (individual) [CUBA]
AGUILERA QUIJANO, Harold, c/o ASESORIAS COSMOS LTDA., Cali, Colombia 
(Cedula No. 16594227 (Colombia)) (individual) [SDNT]
AH HAQ, Dr. Amin (see AL-HAQ, Amin) (individual) [SDGT]
AHLYA BUILDING MATERIALS CO., P.O. Box 1351, Benghazi, Libya; P.O. Box 
8545, Jumhouriya Street, Tripoli, Libya [LIBYA]
AHMAD, Abu Bakr (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]

[[Page 930]]

AHMAD, Mufti Rasheed (see LADEHYANOY, Mufti Rashid Ahmad) (individual) 
[SDGT]
AHMAD, Mustafa Muhammad (see SAI'ID, Shaykh) (individual) [SDGT]
AHMAD QASSEM AND SONS CO., Libya [LIBYA]
AHMAD, Rasem, P.O. Box 1318, Amman, Jordan (individual) [IRAQ]
AHMAD, Tariq Anwar al-Sayyid (a.k.a. FARAG, Hamdi Ahmad; a.k.a. FATHI, 
Amr Al-Fatih) (DOB 15 Mar 1963; POB Alexandria, Egypt) (individual) 
[SDGT]
AHMAD, Wallid Issa, Iraq (individual) [IRAQ]
AHMED, A. (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
AHMED, Abubakar (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
AHMED, Abubakar K. (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
AHMED, Abubakar Khalfan (see GHAILANI, Ahmed Khalfan) (individual) 
[SDGT]
AHMED, Abubakary K. (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
AHMED, Ahmed (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
AHMED, Ahmed Khalfan (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
AHMED HAMED (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
AHMED THE EGYPTIAN (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
AHMED THE TALL (see SWEDAN, Sheikh Ahmed Salim) (individual) [SDGT]
``AHMED THE TANZANIAN'' (see GHAILANI, Ahmed Khalfan) (individual) 
[SDGT]
AHMETI, Ali, Member of National Liberation Army (NLA) (DOB: 4 Jan 1959; 
POB: Kicevo, FYROM) (individual) [BALKANS]
AIADI, Ben Muhammad (see BIN MUHAMMAD, Ayadi Chafiq) (individual) [SDGT]
AIADY, Ben Muhammad (see BIN MUHAMMAD, Ayadi Chafiq) (individual) [SDGT]
AIAI (see AL-ITIHAAD AL-ISLAMIYA) [SDGT]
A.I.C. COMPREHENSIVE RESEARCH INSTITUTE (See AUM SHINRIKYO) [FTO]
A.I.C. SOGO KENKYUSHO (See AUM SHINRIKYO) [FTO]
AIIB (see JAPANESE RED ARMY) [FTO]
AIRMORES SHIPPING CO. LTD. (a.k.a. AIMOROS SHIPPING CO. LTD.), c/o MELFI 
MARINE CORPORATION S.A., Oficina 7, Edificio Senorial, Calle 50, 
Apartado 31, Panama City 5, Panama [CUBA]
AISHA, Abu (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
AKSH (see ALBANIAN NATIONAL ARMY) [BALKANS]
AL ABIAR FODDER PLANT, Libya [LIBYA]
AL-'ADIL, Saif (see AL-ADL, Sayf) (individual) [SDGT]
AL-ADL, Sayf (a.k.a. AL-'ADIL, Saif) (DOB 1963; POB Egypt) (individual) 
[SDGT]
AL-AGELI, Dr. Muktar Ali (a.k.a. EL-AGELI, Dr. Mukhtar Ali; a.k.a. EL-
AGELI, Dr. Muktar Ali), Apartment 10, Maida Vale, Little Venice, London, 
England; 15/17 Lodge Road, St. Johns Wood, London NW8 7JA, England (DOB 
23 July 1944) (individual) [LIBYA]
AL-AHDAL, Mohammad Hamdi Sadiq (see AL-HAMATI, Muhammad) (individual) 
[SDGT]
AL AHLIYA CO. FOR TRADING AND MANUFACTURE OF CLOTHING, P.O. Box 4152, 
Benghazi, Libya; P.O. Box 15182, Tripoli, Libya [LIBYA]
AL-AHMAD, Mahmoud Diab (a.k.a. AL-AHMAD, Mahmud Dhiyab), Minister of 
Housing and Reconstruction, Iraq (individual) [IRAQ]
AL AMAL CO. FOR TRADING AND MANUFACTURING OF CLOTHING, Libya [LIBYA]
AL-AMIRI, Adnan Talib Hassim, 43 Palace Mansions, Hammersmith, London, 
England (individual) [IRAQ]
AL-AMRIKI, Abu-Ahmad (see HIJAZI, Riad) (individual) [SDGT]
AL-ARABI TRADING COMPANY LIMITED, Lane 11, Hai Babil, Baghdad District 
929, Iraq [IRAQ]
AL-ATRUSH, Abd al-Wahhab Umar Mirza (a.k.a. AL-ATRUSHI, Abdel Wahab), a 
minister of state, Iraq (DOB 1936) (individual) [IRAQ]
AL-AZAWI, Dafir, Iraq (individual) [IRAQ]
AL-BAZZAZ, Hikmet Abdallah (a.k.a. AL-BAZAZ, Hikmet Abdullah), Minister 
of Education, Iraq (individual) [IRAQ]
AL-DAJANI, Leila N.S., P.O. Box 1318, Amman, Jordan (individual) [IRAQ]
AL-DAJANI, Nadim S., P.O. Box 1318, Amman, Jordan (individual) [IRAQ]
AL-DAJANI, Sa'ad, P.O. Box 1318, Amman, Jordan (individual) [IRAQ]
AL-DULAIMI, Khalaf M. M., Baghdad, Iraq (individual) [IRAQ]
AL-FARAN (see HARAKAT UL-MUJAHIDEEN) [FTO]
AL-FILISTINI, Abu Qatada (see UTHMAN, Omar Mahmoud) (individual) [SDGT]
AL-GAMA'AT (see GAMA'A AL-ISLAMIYYA) [SDT, FTO]
AL GAZEERA BENGHAZI, P.O. Box 2456, Benghazi, Libya [LIBYA]
AL-HABOBI, Dr. Safa Haji J. (a.k.a. AL-HABOBI, Dr. Safa; a.k.a. AL-
HABUBI, Dr. Safa Hadi Jawad; a.k.a. HABUBI, Dr. Safa Hadi Jawad; a.k.a. 
HABUBI, Dr. Safa Jawad; a.k.a. JAWAD, Dr. Safa Hadi), Minister of Oil, 
Flat 4D Thorney Court, Palace Gate, Kensington, England; Iraq (DOB 1 
July 1946) (individual) [IRAQ]
AL-HADID (see HARAKAT UL-MUJAHIDEEN) [FTO]
AL-HADITH (see HARAKAT UL-MUJAHIDEEN) [FTO]
AL-HAMATI, Muhammad (a.k.a. AL-AHDAL, Mohammad Hamdi Sadiq; a.k.a.

[[Page 931]]

AL-MAKKI, Abu Asim), Yemen (individual) [SDGT].
AL-HAMATI SWEETS BAKERIES, Al-Mukallah, Hadhramawt Governorate, Yemen 
[SDGT]
AL HAMBRA HOLDING COMPANY, Madrid, Spain [LIBYA]
AL-HAMMADI, Hamid Yusif (a.k.a. HAMADI, Hamed Yussef), Minister of 
Culture and Information, Iraq (individual) [IRAQ]
AL-HAQ, Amin (a.k.a. AMIN, Muhammad; a.k.a. AH HAQ, Dr. Amin; a.k.a. UL-
HAQ, Dr. Amin) (DOB 1960; POB Nangahar Province, Afghanistan) 
(individual) [SDGT]
AL HARAKAT AL ISLAMIYYA (see ABU SAYYAF GROUP) [FTO]
AL HARAKAT AL ISLAMIYYA (see ABU SAYYAF GROUP) [FTO] [SDGT]
AL-HASSAN, Anas Malik Dohan (a.k.a. AL-HASSAN, Anas; a.k.a. DOHAN, Anas; 
a.k.a. DOHAN, Anas Malik; a.k.a. MALIK, Anas), Baghdad, Iraq 
(individual) [IRAQ]
AL-HASSAN, Anas Malik Dohan (a.k.a. AL-HASSAN, Anas; a.k.a. DOHAN, Anas; 
a.k.a. DOHAN, Anas Malik; a.k.a. MALIK, Anas), Jordan (individual) 
[IRAQ]
AL-HASSAN, Watban Ibrahim (a.k.a. AL-TAKRITI, Watban; a.k.a. AL-TIKRITI, 
Watban Ibrahim al-Hasan), Minister of the Interior, Baghdad, Iraq (DOB 
1952) (individual) [IRAQ]
AL-HAWEN, Abu-Ahmad (see HIJAZI, Riad) (individual) [SDGT]
AL-HIJAZI, Mahmud, Secretary of Justice and Public Security of the 
Government of Libya, Libya (DOB 1944, POB Batta, Libya) (individual) 
[LIBYA]
AL-HINSHIRI, Izz Al-Din Al-Muhammad, Secretary of Communications and 
Transport of the Government of Libya, Libya (DOB 6 October 1951) 
(individual) [LIBYA]
AL-HOURI, Ali Saed Bin Ali (see EL-HOORIE, Ali Saed Bin Ali) 
(individual) [SDGT]
AL-HUWAYSH, Isam Rashid, Governor of the Central Bank, Iraq (individual) 
[IRAQ]
AL-IRAQI, Abd al-Hadi (a.k.a. ABU ABDALLAH; a.k.a. AL-IRAQI, Abdal al-
Hadi) (individual) [SDGT]
AL-IRAQI, Abdal al-Hadi (see AL-IRAQI, Abd al-Hadi) (individual) [SDGT]
AL-ITIHAAD AL-ISLAMIYA (a.k.a. AIAI) [SDGT]
AL-JABBURI, Sadi Tuma Abbas, Adviser to the President for Military 
Affairs, Iraq (DOB 1939) (individual) [IRAQ]
AL-JADAWI, Saqar (DOB 1965) (individual) [SDGT]
AL-JAMA'AH AL-ISLAMIYAH AL-MUSALLAH (see ARMED ISLAMIC GROUP) [FTO]
AL-JAMA'AH AL-ISLAMIYAH AL-MUSALLAH (see ARMED ISLAMIC GROUP) [FTO] 
[SDGT]
AL JAMAL TRADING EST. (BENGHAZI), Benghazi, Libya [LIBYA]
AL-JIHAD (a.k.a. EGYPTIAN AL-JIHAD; a.k.a. EGYPTIAN ISLAMIC JIHAD; 
a.k.a. JIHAD GROUP; a.k.a. NEW JIHAD) [SDT] [FTO] [SDGT]
AL-JIHAD (a.k.a. EGYPTIAN AL-JIHAD; a.k.a. NEW JIHAD; a.k.a. EGYPTIAN 
ISLAMIC JIHAD; a.k.a. JIHAD GROUP) [SDT, FTO]
AL-JIHIMI, Tahir, Secretary of Economy and Trade of the Government of 
Libya, Libya (individual) [LIBYA]
AL KABIR, 1 Giaddet Omar Mokhtar, P.O. Box 685, Tripoli, Libya 
(individual) [LIBYA]
AL-KADR, Ahmad Sa'id (a.k.a. AL-KANADI, Abu Abd Al-Rahman) (DOB 01 Mar 
1948; POB Cairo, Egypt) (individual) [SDGT]
AL-KAFI, Isa Abd, Secretary of Agrarian Reform, Land Reclamation, and 
Animal Resources of the Government of Libya, Libya (individual) [LIBYA]
AL-KAMEL, Salah 'Ali (see MUSA, Rifa'i Ahmad Taha) [SDT]
AL-KANADI, Abu Abd Al-Rahman (see AL-KADR, Ahmad Sa'id) (individual) 
[SDGT]
AL-KHAFAJI, Sabah, 254 Rue Adolphe Pajeaud, 92160 Antony, France 
(individual) [IRAQ]
AL-KHODAIR, Ahmad Hussein (a.k.a. SAMARRAI, Ahmad Husayn Khudayir), 
Minister of Finance, Iraq (DOB 1941) (individual) [IRAQ]
AL-KINI, Usama (see MSALAM, Fahid Mohammed Ally) (individual) [SDGT]
AL-LIBI, Anas (see AL-LIBY, Anas) (individual) [SDGT]
AL-LIBI, Ibn Al-Shaykh (individual) [SDGT]
AL-LIBY, Anas (a.k.a. AL-LIBI, Anas; a.k.a. AL-RAGHIE, Nazih; a.k.a. AL-
RAGHIE, Nazih Abdul Hamed; a.k.a. AL-SABAI, Anas), Afghanistan (DOB 30 
Mar 1964; alt. DOB 14 May 1964; POB Tripoli, Libya; Citizen Libya) 
(individual) [SDGT]
AL-MAGHRIBI, Rashid (see HIJAZI, Riad) (individual) [SDGT]
AL-MAHMUDI, Baghdadi, Secretary of Health and Social Security of the 
Government of Libya, Libya (individual) [LIBYA]
AL-MAJID, General Ali Hassan (a.k.a. AL-MAJID, General Ali Hasan), 
Minister of Defense, Baghdad, Iraq (DOB 1941) (individual) [IRAQ]
AL-MAJID, Hussein Kamel Hassan (a.k.a. AL-MAJID, Husayn Kamil Hasan), 
Minister of Industry and Minerals and Advisor to the President, Baghdad, 
Iraq (DOB 1955) (individual) [IRAQ]
AL-MAKKI, Abu Asim (see AL-HAMATI, Muhammad) (individual) [SDGT]
AL-MAL, Muhammad Bayt, Secretary of Planning and Finance of the 
Government of Libya, Libya (individual) [LIBYA]
AL-MALIKI, Shabib Lazem (a.k.a. AL-MALEKI, Shebib Lazim), Minister of 
Justice, Iraq (DOB 1936) (individual) [IRAQ]
AL MASRI, Abd Al Wakil (see FADHIL, Mustafa Mohamed) (individual) [SDGT]

[[Page 932]]

AL-MASRI, Abu Hafs (see ATEF, Muhammad) [SDT]
AL-MASRI, Abu Hafs (see ATIF, Muhammad) (individual) [SDT] [SDGT]
AL-MASRI, Abu Mohamed (see ABDULLAH, Abdullah Ahmed) (individual) [SDGT]
AL-MASRI, Ahmad (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
AL-MUGHASSIL, Ahmad Ibrahim (a.k.a. AL-MUGHASSIL, Ahmed Ibrahim; a.k.a. 
ABU OMRAN) (DOB 26 Jun 1967; POB Qatif--Bab al Shamal, Saudi Arabia; 
Citizen Saudi Arabia) (individual) [SDGT]
AL-MUGHASSIL, Ahmed Ibrahim (see AL-MUGHASSIL, Ahmad Ibrahim) 
(individual) [SDGT]
AL-MUHAJIR, Abdul Rahman (see ATWAH, Muhsin Musa Matwalli) (individual) 
[SDGT]
AL-MUNTASIR, Umar Mustafa, Secretary of People's External Liaison and 
International Cooperation Bureau of the Government of Libya, Libya (DOB 
1939, POB Misurata, Libya) (individual) [LIBYA]
AL-NAMER, Mohammed K.A. (see ATWAH, Muhsin Musa Matwalli) (individual) 
[SDGT]
AL-NASSER, Abdelkarim Hussein Mohamed (POB Al Ihsa, Saudi Arabia; 
Citizen Saudi Arabia) (individual) [SDGT]
AL-NUBI, Abu (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
AL-NUR HONEY CENTER (see AL-NUR HONEY PRESS SHOPS) [SDGT]
AL-NUR HONEY PRESS SHOPS (a.k.a. AL-NUR HONEY CENTER), Sanaa, Yemen 
[SDGT]
AL-QADI, Yasin (a.k.a. KADI, Shaykh Yassin Abdullah; a.k.a. KAHDI, 
Yasin), Jeddah, Saudi Arabia (individual) [SDGT]
AL QAEDA (see AL QA'IDA) [SDT, FTO]
AL QAEDA (see AL QAIDA) [SDT] [FTO] [SDGT]
AL QA'IDA (a.k.a. AL QAEDA; a.k.a. ``The BASE''; a.k.a. ISLAMIC ARMY; 
a.k.a. WORLD ISLAMIC FRONT FOR JIHAD AGAINST JEWS AND CRUSADERS; a.k.a. 
ISLAMIC ARMY FOR THE LIBERATION OF THE HOLY PLACES; a.k.a. USAMA BIN 
LADEN NETWORK; a.k.a. USAMA BIN LADEN ORGANIZATION; a.k.a. ISLAMIC 
SALVATION FOUNDATION; a.k.a. THE GROUP FOR THE PRESERVATION OF THE HOLY 
SITES) [SDT, FTO]
AL QA'IDA (see AL QAIDA) [SDT] [FTO] [SDGT]
AL-QAIDA (see ISLAMIC ARMY) [SDT]
AL QAIDA (a.k.a. ISLAMIC ARMY; a.k.a. ``THE BASE''; a.k.a. AL QA'IDA; 
a.k.a. AL QAEDA; a.k.a. INTERNATIONAL FRONT FOR FIGHTING JEWS AND 
CRUSADES; a.k.a. ISLAMIC ARMY FOR THE LIBERATION OF HOLY SITES; a.k.a. 
ISLAMIC SALVATION FOUNDATION; a.k.a. THE GROUP FOR THE PRESERVATION OF 
THE HOLY SITES; a.k.a. THE ISLAMIC ARMY FOR THE LIBERATION OF THE HOLY 
PLACES; a.k.a. THE WORLD ISLAMIC FRONT FOR JIHAD AGAINST JEWS AND 
CRUSADERS; a.k.a. USAMA BIN LADEN NETWORK; a.k.a. USAMA BIN LADEN 
ORGANIZATION) [SDT] [FTO] [SDGT]
AL-QA'UD, Abd Al Majid, Secretary of Libya's General People's Committee, 
Libya (DOB 1943, POB Ghariar, Libya) (individual) [LIBYA]
AL-QADHAFI, Muammar Abu Minyar, head of the Libyan Government and de 
facto Chief of State, Libya (DOB 1942, POB Sirte, Libya) (individual) 
[LIBYA]
AL-QASIR, Nazar Jumah Ali (a.k.a. AL-QASSIR, Nizar Jomaa Ali), Minister 
of Irrigation, Iraq (individual) [IRAQ]
AL-RAFIDAIN SHIPPING COMPANY, Bombay, India [IRAQ]
AL-RAGHIE, Nazih (see AL-LIBY, Anas) (individual) [SDGT]
AL-RAGHIE, Nazih Abdul Hamed (see AL-LIBY, Anas) (individual) [SDGT]
AL RAHMAN, Shaykh Umar Abd, Chief Ideological Figure of ISLAMIC GAMA'AT 
(DOB 3 May 1938, POB Egypt) (individual) [SDT]
AL RASHEED TRUST (see AL RASHID TRUST) [SDGT]
AL-RASHEED TRUST (see AL RASHID TRUST) [SDGT]
AL RASHID TRUST (a.k.a. AL RASHEED TRUST; a.k.a. AL-RASHEED TRUST; 
a.k.a. AL-RASHID TRUST), Kitab Ghar, 4 Dar-el-Iftah, Nazimabad, Karachi, 
Pakistan; Jamia Masjid, Sulaiman Park, Begum Pura, Lahore, Pakistan; 
Office Dha'rb-i-M'unin, opposite Khyber Bank, Abbottabad Road, Mansehra, 
Pakistan; Office Dha'rb-i-M'unin, Z.R. Brothers, Katchehry Road, Chowk 
Yadgaar, Peshawar, Pakistan; Office Dha'rb-i-M'unin, Room no. 3, Third 
Floor, Moti Plaza, near Liaquat Bagh, Murree Road, Rawalpindi, Pakistan; 
Office Dha'rb-i-M'unin, Top Floor, Dr. Dawa Khan Dental Clinic Surgeon, 
Main Baxar, Mingora, Swat, Pakistan (Operations in Afghanistan: Herat, 
Jalalabad, Kabul, Kandahar, Mazar Sharif. Also operations in: Kosovo, 
Chechnya) [SDGT]
AL-RASHID TRUST (see AL RASHID TRUST) [SDGT]
AL-RIDA, Karim Hasan (a.k.a. RIDA, Karim Hassan), Minister of 
Agriculture, Iraq (DOB 1944) (individual) [IRAQ]
AL-RUBA, Dr. Khadim, Managing Director of REAL ESTATE BANK, Iraq 
(individual) [IRAQ]
AL-SABAI, Anas (see AL-LIBY, Anas) (individual) [SDGT]
AL-SAHHAF, Muhammad Said Kazim (a.k.a. AL-SAHAF, Mohammed Said), 
Minister of Foreign Affairs, Iraq (DOB 1940) (individual) [IRAQ]
AL-SALIH, Muhammad Mahdi (a.k.a. SALEH, Mohammed Mahdi), Minister of 
Trade (DOB 1947) (individual) [IRAQ]

[[Page 933]]

AL-SHAHID, Abu-Ahmad (see HIJAZI, Riad) (individual) [SDGT]
AL-SHAMIKH, Mubarak, Secretary of Housing and Utilities of the 
Government of Libya, Libya (DOB 1950) (individual) [LIBYA]
AL-SHANQITI, Khalid (see ABU HAFS THE MAURITANIAN) (individual) [SDGT]
AL-SHARIF, Sa'd (DOB 1969; POB Saudi Arabia) (individual) [SDGT]
AL-SHIFA' HONEY PRESS FOR INDUSTRY AND COMMERCE, P.O. Box 8089, Al-
Hasabah, Sanaa, Yemen; By the Shrine Next to the Gas Station, Jamal 
Street, Ta'iz, Yemen; Al-rudh Square, Khur Maksar, Aden, Yemen; Al-Nasr 
Street, Doha, Qatar [SDGT]
AL SUDANI, Abu Seif (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
AL-SURIR, Abu Islam (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
AL-TAKRITI, Barzan Ibrahim Hassan (a.k.a. AL-TIKRITI, Barzan Ibrahim 
Hasan), Advisor to the President, Iraq; Geneva, Switzerland (DOB 17 
February 1951) (individual) [IRAQ]
AL-TAKRITI, Sabawi Ibrahim Hassan, Baghdad, Iraq (individual) [IRAQ]
AL TANZANI, Ahmad (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
AL WAFA (see WAFA HUMANITARIAN ORGANIZATION) [SDGT]
AL WAFA ORGANIZATION (see WAFA HUMANITARIAN ORGANIZATION) [SDGT]
AL-WAHAB, Abd Al-Hadi (see ABU ZUBAYDAH) (individual) [SDGT]
AL-WALID, Mafouz Walad (see ABU HAFS THE MAURITANIAN) (individual) 
[SDGT]
AL-WALID, Mahfouz Ould (see ABU HAFS THE MAURITANIAN) (individual) 
[SDGT]
AL-YACOUB, Ibrahim Salih Mohammed (DOB 16 Oct 1966; POB Tarut, Saudi 
Arabia; Citizen Saudi Arabia) (individual) [SDGT]
AL-ZANATI, Muhammad, Secretary of the General People's Congress of 
Libya, Libya (individual) [LIBYA]
AL-ZAWAHIRI, Aiman Muhammad Rabi (see AL-ZAWAHIRI, Ayman) (individual) 
[SDT] [SDGT]
AL-ZAWAHIRI, Ayman (a.k.a. AL ZAWAHIRI, Dr. Ayman; a.k.a. AL-ZAWAHIRI, 
Aiman Muhammad Rabi; a.k.a. SALIM, Ahmad Fuad), Operational and Military 
Leader of JIHAD GROUP (DOB 19 Jun 1951; POB Giza, Egypt; Passport No. 
1084010 (Egypt); alt. Passport No. 19820215) (individual) [SDT] [SDGT]
AL ZAWAHIRI, Dr. Ayman, Operational and Military Leader of JIHAD GROUP 
(DOB 19 June 1951, POB Giza, Egypt, Passport No. 1084010 (Egypt)) 
(individual) [SDT]
AL ZAWAHIRI, Dr. Ayman (see AL-ZAWAHIRI, Ayman) (individual) [SDT] 
[SDGT]
AL-ZIBARI, Arshad Muhammad Ahmad Muhammad, a minister of state, Iraq 
(DOB 1942) (individual) [IRAQ]
AL-ZUBAYDI, Muhammad Hamsa (a.k.a. AL-ZUBAIDI, Mohammed Hamza), Deputy 
Prime Minister, Iraq (DOB 1938) (individual) [IRAQ]
AL-ZUMAR, Abbud (a.k.a. ZUMAR, Colonel Abbud), Factional Leader of JIHAD 
GROUP, Egypt (POB Egypt) (individual) [SDT]
ALAKTAN COTTON TRADING COMPANY (see ALAKTAN TRADING COMPANY) [SUDAN]
ALAKTAN TRADING COMPANY (a.k.a. ALAKTAN COTTON TRADING COMPANY), P.O. 
Box 2067, Khartoum, Sudan [SUDAN]
ALAVAREZ GAVIRIA, Jaime Antonio, c/o EXPORT CAFE LTDA., Cali, Colombia 
(DOB 17 Aug 1947; Cedula No. 10060853 (Colombia)) (individual) [SDNT]
ALAWI, Abdel-Salam Abdel-Rahman (a.k.a. ALLAWI, Salam), General Manager 
of INDUSTRIAL BANK OF IRAQ, Iraq (individual) [IRAQ]
ALBANIAN NATIONAL ARMY (a.k.a. ANA; a.k.a. AKSH) [BALKANS]
ALBUNOVIC, Veljko, General Manager of Pozarevacka Banka AD (individual) 
[FRYM]
ALCIDES MAGANA, Ramon (a.k.a. ALCIDES MAGANE, Ramon; a.k.a. ALCIDES 
MAYENA, Ramon; a.k.a. ALCIDEZ MAGANA, Ramon; a.k.a. GONZALEZ QUIONES, 
Jorge; a.k.a. MAGANA ALCIDES, Ramon; a.k.a. MAGANA, Jorge; a.k.a. MAGNA 
ALCIDEDES, Ramon; a.k.a. MATA, Alcides; a.k.a. RAMON MAGANA, Alcedis; 
a.k.a. RAMON MAGANA, Alcides; a.k.a. ROMERO, Antonio); DOB 4 Sep 1957 
(individual) [SDNTK]
ALCIDES MAGANE, Ramon (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES 
MAYENA, Ramon; a.k.a. ALCIDEZ MAGANA, Ramon; a.k.a. GONZALEZ QUIONES, 
Jorge; a.k.a. MAGANA ALCIDES, Ramon; a.k.a. MAGANA, Jorge; a.k.a. MAGNA 
ALCIDEDES, Ramon; a.k.a. MATA, Alcides; a.k.a. RAMON MAGANA, Alcedis; 
a.k.a. RAMON MAGANA, Alcides; a.k.a. ROMERO, Antonio); DOB 4 Sep 1957 
(individual) [SDNTK]
ALCIDES MAYENA, Ramon (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES 
MAGANE, Ramon; a.k.a. ALCIDEZ MAGANA, Ramon; a.k.a. GONZALEZ QUIONES, 
Jorge; a.k.a. MAGANA ALCIDES, Ramon; a.k.a. MAGANA, Jorge; a.k.a. MAGNA 
ALCIDEDES, Ramon; a.k.a. MATA, Alcides; a.k.a. RAMON MAGANA, Alcedis; 
a.k.a. RAMON MAGANA, Alcides; a.k.a. ROMERO, Antonio); DOB 4 Sep 1957 
(individual) [SDNTK]
ALCIDEZ MAGANA, Ramon (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES 
MAGANE, Ramon; a.k.a. ALCIDES MAYENA, Ramon; a.k.a. GONZALEZ QUIONES, 
Jorge; a.k.a. MAGANA ALCIDES, Ramon; a.k.a. MAGANA, Jorge;

[[Page 934]]

a.k.a. MAGNA ALCIDEDES, Ramon; a.k.a. MATA, Alcides; a.k.a. RAMON 
MAGANA, Alcedis; a.k.a. RAMON MAGANA, Alcides; a.k.a. ROMERO, Antonio); 
DOB 4 Sep 1957 (individual) [SDNTK]
ALFA PHARMA S.A., Diagonal 17 No. 28A-80, Bogota, Colombia [SDNT]
ALI, Ahmed Khalfan (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
ALI, Ahmed Mohammed (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
ALI, Ahmed Mohammed Hamed (a.k.a. ABDUREHMAN, Ahmed Mohammed; a.k.a. ABU 
FATIMA; a.k.a. ABU ISLAM; a.k.a. ABU KHADIIJAH; a.k.a. AHMED, Ahmed; 
a.k.a. AHMED HAMED; a.k.a. Ahmed The Egyptian; a.k.a. ALI, Hamed; a.k.a. 
ALI, Ahmed Mohammed; a.k.a. AL-MASRI, Ahmad; a.k.a. AL-SURIR, Abu Islam; 
a.k.a. HEMED, Ahmed; a.k.a. SHIEB, Ahmed; a.k.a. SHUAIB), Afghanistan 
(DOB 1965; POB Egypt; Citizen Egypt) (individual) [SDGT]
ALI, Ali Abdul Mutalib, Germany (individual) [IRAQ]
ALI, Fadel Abdallah Mohammed (see MOHAMMED, Fazul Abdullah) (individual) 
[SDGT]
ALI, Hamed (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
ALI, Hassan (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
ALI, Salem (see MOHAMMED, Khalid Shaikh) (individual) [SDGT]
ALKALA ASOCIADOS S.A. (f.k.a. INVHERESA S.A.), Calle 1A No. 62A-130, 
Cali, Colombia; Calle 1A No. 62A-120, Cali, Colombia; Avenida 2N No. 7N-
55 of. 501, Cali, Colombia; Calle 70N No. 14-31, Cali, Colombia; NIT 
 800108121-0 (Colombia) [SDNT]
ALKHAYOUN, Dhiah H., Chairman and General Manager of RASHEED BANK, Iraq 
(individual) [IRAQ]
ALLY, Ahmed (see SWEDAN, Sheikh Ahmed Salim) (individual) [SDGT]
ALLY, Fahid Mohammed (see MSALAM, Fahid Mohammed Ally) (individual) 
[SDGT]
ALMANZA CANON, Nohora Juliana, c/o COSMEPOP, Bogota, Colombia (Cedula 
No. 52557912 (Colombia)) (individual) [SDNT]
ALOARDI, Carlo Giovanni, Milan, Italy (individual) [CUBA]
ALUBAF ARAB INTERNATIONAL BANK E.C. (a.k.a. ALUBAF), UGB Tower, 
Diplomatic Area, P.O. Box 12529, Manama, Bahrain [LIBYA]
ALUBAF INTERNATIONAL BANK - TUNIS (a.k.a. ALUBAF - TUNIS), 90-92 Avenue 
Hedi Chaker, P.O. Box 51, 1002 Tunis Belvedere, Tunisia [LIBYA]
ALVARADO BONILLA, Alejandro, c/o DROGAS LA REBAJA Bogota S.A., Bogota, 
Colombia (Cedula No. 79641039 (Colombia)) (individual) [SDNT]
ALVAREZ, Manuel (AGUIRRE), Panama (individual) [CUBA]
ALVAREZ TOSTADO, Jose (a.k.a. CASTELLANOS ALVAREZ TOSTADO, Juan Jose; 
a.k.a. GONZALEZ, Jose); DOB 27 Aug 1955; POB Mexico (individual) [SDNTK]
ALWAN, Allaidin Hussain (a.k.a. ALWAN, Alla Idin Hussain), Baghdad, Iraq 
(individual) [IRAQ]
ALZATE SALAZAR, Luis Alfredo, c/o COINTERCOS S.A., Bogota, Colombia; c/o 
DEPOSITO POPULAR DE DROGAS S.A., Bogota, Colombia; c/o DROGAS LA REBAJA 
Bogota S.A., Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA 
S.A., Bogota, Colombia (Cedula No. 16595689 (Colombia)) (individual) 
[SDNT]
AMAN CO. FOR TYRES AND BATTERIES, P.O. Box 2394, Benghazi, Libya; P.O. 
Box 17757, Misurata, Libya; Sabha, Libya; Tajura Km. 19, P.O. Box 30737, 
Tripoli, Libya; Tripoli, Libya [LIBYA]
AMARO, Joaquim Ferreira, Praca Pio X, 54-10o Andar CEP 20091, Rio de 
Janeiro, Brazil (individual) [IRAQ]
AMAYA OROZCO, Luis Alberto, Calle 18N No. 9-46, Cali, Colombia; c/o 
COMERCIALIZADORA DE CARNES DEL PACIFICO LTDA., Cali, Colombia (Cedula 
No. 4882167 (Colombia)) (individual) [SDNT]
AMD CO. LTD AGENCY, Al-Tahrir Car Parking Building, Tahrir Sq., Floor 3, 
Office 33, P.O. Box 8044, Baghdad, Iraq [IRAQ]
AMERICAN AIR WAYS CHARTERS, INC., 1840 West 49th Street, Hialeah, 
Florida, U.S.A. [CUBA]
AMESCUA, Chuey (see AMEZCUA CONTRERAS, Jose de Jesus) (individual) 
[SDNTK]
AMEZCUA CONTRERAS, Jesus (see AMEZCUA CONTRERAS, Jose de Jesus) 
(individual) [SDNTK]
AMEZCUA CONTRERAS, Jose de Jesus (a.k.a. AMESCUA, Chuey; a.k.a. AMEZCUA 
CONTRERAS, Jesus; a.k.a. AMEZCUA, Chuy; a.k.a. AMEZCUA, Jose de Jesus; 
a.k.a. HERNANDEZ, Adan), DOB 31 July 1963; alt. DOB 31 July 1964; alt. 
DOB 31 July 1965; POB Mexico (individual) [SDNTK]
AMEZCUA CONTRERAS, Luis Ignacio (a.k.a. AMEZCUA, Luis; a.k.a. CONTRERAS, 
Luis C.; a.k.a. LOPEZ, Luis; a.k.a. LOZANO, Eduardo; a.k.a. OCHOA, 
Salvador; a.k.a. RODRIGUEZ LOPEZ, Sergio), DOB 22 February 1964; alt. 
DOB 21 February 1964; alt. DOB 21 February 1974; POB Mexico (individual) 
[SDNTK]
AMEZCUA, Chuy (see AMEZCUA CONTRERAS, Jose de Jesus) (individual) 
[SDNTK]
AMEZCUA, Jose de Jesus (see AMEZCUA CONTRERAS, Jose de Jesus) 
(individual) [SDNTK]

[[Page 935]]

AMEZCUA, Luis (see AMEZCUA CONTRERAS, Luis Ignacio) (individual) [SDNTK]
AMEZQUITA MENESES, Salustio, c/o INMOBILIARIA U.M.V. S.A., Cali, 
Colombia; c/o INVERSIONES GEMINIS S.A., Cali, Colombia (Cedula No. 
14943885 (Colombia)) (individual) [SDNT]
AMIN EL GEZAI COMPANY (a.k.a. EL AMIN EL GEZAI COMPANY), Khartoum, Sudan 
[SUDAN]
AMIN, Muhammad (see AL-HAQ, Amin) (individual) [SDGT]
AMPARO RODRIGUEZ DE GIL Y CIA. S. EN C., Avenida 4N No. 5N-20, Cali, 
Colombia [SDNT]
ANA (see ALBANIAN NATIONAL ARMY) [BALKANS]
ANDINA DE CONSTRUCCIONES S.A., Cali, Colombia [SDNT]
ANDRADE QUINTERO, Ancizar, c/o INMOBILIARIA BOLIVAR LTDA., Cali, 
Colombia; c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia; c/o SERVICIOS 
INMOBILIARIAS LTDA., Cali, Colombia (Cedula No. 16672464 (Colombia)) 
(individual) [SDNT]
ANGELINI, Alejandro Abood, Panama (individual) [CUBA]
ANGLO-CARIBBEAN CO., LTD. (a.k.a. AVIA IMPORT), Ibex House, The 
Minories, London EC3N 1DY, England [CUBA]
ANGULO OROBIO, Jose Francisco, Avenida 4N No. 17-43 apt. 801, Cali, 
Colombia; c/o INVERSIONES Y CONSTRUCCIONES VALLE S.A., Cali, Colombia 
(Cedula No. 16706561 (Colombia)) (individual) [SDNT]
ANIS, Abu (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
ANO (see ABU NIDAL ORGANIZATION) [SDT, FTO]
ANSAR ALLAH (see HIZBALLAH) [SDT, FTO]
ANTI-IMPERIALIST INTERNATIONAL BRIGADE (see JAPANESE RED ARMY) [FTO]
ANTILLANA SALVAGE CO. LTD., c/o EMPRESA ANTILLANA DE SALVAMENTO, 4th 
Floor, Lonja del Comercio, Havana Vieja, Havana, Cuba [CUBA]
ANTI-WAR DEMOCRATIC FRONT (see JAPANESE RED ARMY) [FTO]
AQUITAINE LIBYE, Omar El Mokhtar Street, P.O. Box 282, Tripoli, Libya 
(Designation applies only to joint venture located in Libya) [LIBYA]
ARAB BANK FOR INVESTMENT AND FOREIGN TRADE (a.k.a. ARBIFT), Al Masood 
Building, Khalifa Street, P.O. Box 7588, Abu Dhabi, U.A.E. [LIBYA]
ARAB BANK FOR INVESTMENT AND FOREIGN TRADE (a.k.a. ARBIFT), ARBIFT 
Tower, Baniyas Street, P.O. Box 5549, Deira, Dubai, United Arab Emirates 
[LIBYA]
ARAB BANK FOR INVESTMENT AND FOREIGN TRADE (a.k.a. ARBIFT), Head Office, 
ARBIFT Building, Sheikh Hamdan Street, P.O. Box 2484, Abu Dhabi, U.A.E. 
[LIBYA]
ARAB BANK FOR INVESTMENT AND FOREIGN TRADE (a.k.a. ARBIFT), Khalfan Bin 
Rakan Building, Khalifa Street, P.O. Box 16003, Al Ain, U.A.E. [LIBYA]
AB CO. FOR IMPORTATION AND MANUFACTURE OF CLOTHING AND TEXTILES, Libya 
[LIBYA]
ARAB CEMENT COMPANY, Durdeib, Sudan; P.O. Box 6180, Khartoum, Sudan 
[SUDAN]
ARAB COMMERCIAL INSURANCE COMPANY, Channel Islands [LIBYA]
ARAB HELLENIC BANK, S.A. (a.k.a. APABO), 43 Penepistimiou Street, GR-105 
64, Athens, Greece; 8088 Syngrou Avenue, GR-117 41, Athens, Greece; P.O. 
Box 19126, GR-117 10, Athens, Greece [LIBYA]
ARAB LIBYAN SYRIAN INDUSTRIAL & AGRICULTURAL INVESTMENT COMPANY (a.k.a. 
SYLICO; a.k.a. SYRIAN LIBYAN COMPANY - INDUSTRIAL & AGRICULTURAL 
INVESTMENTS), 9 Mazze, Autostrade, Damascus, Syria [LIBYA]
ARAB PETROLEUM ENGINEERING COMPANY LTD., Amman, Jordan [IRAQ]
ARAB PROJECTS COMPANY S.A. LTD., P.O. Box 1318, Amman, Jordan [IRAQ]
ARAB PROJECTS COMPANY S.A. LTD., P.O. Box 1972, Riyadh, Saudi Arabia 
[IRAQ]
ARAB PROJECTS COMPANY S.A. LTD., P.O. Box 7939, Beirut, Lebanon [IRAQ]
ARAB REAL ESTATE COMPANY (a.k.a. ARESCO), Beirut, Lebanon [LIBYA]
ARAB REVOLUTIONARY BRIGADES (see ABU NIDAL ORGANIZATION) [SDT, FTO]
ARAB REVOLUTIONARY COUNCIL (see ABU NIDAL ORGANIZATION) [SDT, FTO]
ARAB UNION CONTRACTING CO., P.O. Box 3475, Tripoli, Libya [LIBYA]
ARABIAN GULF OIL COMPANY (a.k.a. AGOCO), P.O. Box 263, Al Kish, 
Benghazi, Libya [LIBYA]
ARABIAN GULF OIL COMPANY (a.k.a. AGOCO), P.O. Box 693-325, Ben Ashour 
Street, Tripoli, Libya [LIBYA]
ARABIAN GULF OIL COMPANY (a.k.a. AGOCO), Sarir Field, Libya [LIBYA]
ARABIAN GULF OIL COMPANY (a.k.a. AGOCO), Windsor House, 42-50 Victoria 
Street, London SW1H 0NW, England [LIBYA]
ARANA MARIA, Jairo Abraham, Calle 74 No. 53-30, Barranquilla, Colombia; 
c/o DESARROLLOS URBANOS ``DESARROLLAR'' LTDA., Barranquilla, Colombia; 
c/o EDIFICACIONES DEL CARIBE LTDA., Barranquilla, Colombia; c/o GRAN 
COMPAN[tilde]IA DE HOTELES LTDA., Barranquilla, Colombia; c/o HOTELES E 
INMUEBLES DE COLOMBIA LTDA., Barranquilla, Colombia; c/o INMOBILIARIA 
DEL CARIBE LTDA., Barranquilla, Colombia; c/o INMOBILIARIA

[[Page 936]]

HOTELERA DEL CARIBE LTDA., Barranquilla, Colombia; c/o INVERSIONES 
HOTELERAS DEL LITORAL LTDA., Barranquilla, Colombia; c/o INVERSIONES 
PRADO TRADE CENTER LTDA., Barranquilla, Colombia; c/o NEGOCIOS Y 
PROPIEDADES DEL CARIBE LTDA., Barranquilla, Colombia; c/o SURAMERICANA 
DE HOTELES LTDA., Barranquilla, Colombia; DOB 8 February 1953; alt. DOB 
2 May 1946; alt. DOB 21 May 1946; Passport Z4966601 (Colombia); Passport 
K1030420 (Colombia); Cedula No. 7450538 (Colombia) (individual) [SDNT]
ARAP TURK BANKASI A.S. (a.k.a. ARAB TURKISH BANK; a.k.a. ATB), 
Gaziosmanpasa Bulvari No. 10/1, 35210 Alsancak, Izmir, Turkey [LIBYA]
ARAP TURK BANKASI A.S. (a.k.a. ARAB TURKISH BANK; a.k.a. ATB), Havuzlu 
Sok. No. 3, 06540 Asagi Ayranci, Ankara, Turkey [LIBYA]
ARAP TURK BANKASI A.S. (a.k.a. ARAB TURKISH BANK; a.k.a. ATB), P.O. Box 
11, 01321 Adana, Turkey [LIBYA]
ARAP TURK BANKASI A.S. (a.k.a. ARAB TURKISH BANK; a.k.a. ATB), P.O. Box 
38, 06552 Cankaya, Ankara, Turkey [LIBYA]
ARAP TURK BANKASI A.S. (a.k.a. ARAB TURKISH BANK; a.k.a. ATB), P.O. Box 
380, 80223 Sisli, Istanbul, Turkey [LIBYA]
ARAP TURK BANKASI A.S. (a.k.a. ARAB TURKISH BANK; a.k.a. ATB), P.O. Box 
52, 35212 Pasaport, Izmir, Turkey [LIBYA]
ARAP TURK BANKASI A.S. (a.k.a. ARAB TURKISH BANK; a.k.a. ATB), Vali 
Konagi Cad. No. 10, 80200 Nistantas, Istanbul, Turkey [LIBYA]
ARAP TURK BANKASI A.S. (a.k.a. ARAB TURKISH BANK; a.k.a. ATB), Ziyapasa 
Bulvari No. 14/A, 01130 Adana, Turkey [LIBYA]
ARBELAEZ GALLON, Gladys, c/o SERVICIOS INMOBILIARIOS LTDA., Cali, 
Colombia (Cedula No. 31858038 (Colombia)) (individual) [SDNT]
ARBELAEZ PARDO, Amparo, Casa No. 19, Avenida Lago, Ciudad Jardin, Cali, 
Colombia; c/o CREDIREBAJA S.A., Cali, Colombia; c/o INTERAMERICANA DE 
CONSTRUCCIONES S.A., Cali, Colombia; c/o INVERSIONES ARA LTDA., Cali, 
Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia; 
c/o VALORES MOBILIARIOS DE OCCIDENTE, Bogota, Colombia; DOB 9 August 
1950; Passports AC568973 (Colombia), PE001850 (Colombia); Cedula No. 
31218903 (Colombia) (individual) [SDNT]
ARBOLEDA ARROYAVE, Pedro Nicholas (Nicolas), c/o CREDIREBAJA S.A., Cali, 
Colombia; c/o D'CACHE S.A., Cali, Colombia; c/o DEPOSITO POPULAR DE 
DROGAS S.A., Cali, Colombia; c/o DISTRIBUIDORA DE DROGAS CONDOR LTDA., 
Bogota, Colombia; DOB 23 June 1957; Cedula No. 16602372 (Colombia) 
(individual) [SDNT]
ARBOLEDA, Julio, c/o INVERSIONES BETANIA LTDA., Cali, Colombia; c/o 
INVERSIONES EL PEN[tilde]ON S.A., Cali, Colombia (Cedula No. 16205508 
(Colombia)) (individual) [SDNT]
ARCHI CENTRE I.C.E. LIMITED, 3 Mandeville Place, London, England [IRAQ]
ARCHICONSULT LIMITED, 128 Buckingham Place, London 5, England [IRAQ]
AREGON, Max (a.k.a. CARO RODRIGUEZ, Gilberto; a.k.a. GUIERREZ LOERA, 
Jose Luis; a.k.a. GUMAN LOERAL, Joaquin; a.k.a. GUZMAN, Achivaldo; 
a.k.a. GUZMAN, Archibaldo; a.k.a. GUZMAN, Aureliano; a.k.a. GUZMAN, 
Chapo; a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, Joaquin Chapo; 
a.k.a. GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, Joaquin; a.k.a. 
GUZMAN LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN 
PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. 
RAMIREZ, Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB 
Mexico (individual) [SDNTK]
ARELLANO FELIX, Benjamin Alberto, DOB 12 March 1952; alt. DOB 8 November 
1953; alt. DOB 11 August 1955; POB Mexico (individual) [SDNTK]
ARELLANO FELIX, Ramon Eduardo (a.k.a. COMACHO RODRIGUES, Gilberto; 
a.k.a. TORRES MENDEZ, Ramon), DOB 31 August 1964; POB Mexico 
(individual) [SDNTK]
ARIANA AFGHAN AIRLINES (f.k.a. BAKHTAR AFGHAN AIRLINES), Afghan 
Authority Building, P.O. Box 76, Ansari Watt, Kabul, Afghanistan 
[TALIBAN]
ARIAS CASTRO, Libardo (see CASTRO ARIAS, Libardo) (individual) [SDNT]
ARIAS RAMIREZ, Jhon Helmer, c/o IMPORTADORA Y COMERCIALIZADORA LTDA., 
Cali, Colombia (Cedula No. 16796537 (Colombia)) (individual) [SDNT]
ARIFI, Dr. Najmeddine Abdalla (a.k.a. ARIFI, Dr. Nagmeddin Abdalla), 
P.O. Box 2134, Tripoli, Libya (DOB 21 November 1947) (individual) 
[LIBYA]
ARION SHIPPING CO., LTD., 60 South Street, Valletta, Malta [CUBA]
ARISTIZABAL ATEHORTUA, Jaime Alberto, c/o COLOR 89.5 FM STEREO, Cali, 
Colombia; c/o DERECHO INTEGRAL Y CIA. LTDA., Cali, Colombia; c/o 
INVERSIONES MIGUEL RODRIGUEZ E HIJO, Cali, Colombia; c/o RADIO UNIDAS FM 
S.A., Cali, Colombia; c/o REVISTA DEL AMERICA LTDA., Cali, Colombia 
(Cedula No. 16756325 (Colombia)) (individual) [SDNT]
ARIZABALETA ARZAYUS, Phanor (Fanor), Avenida 39 No. 15-22, Bogota, 
Colombia; Calle 110 No. 30-45, Bogota, Colombia; Carrera 9 No. 9S-35, 
Buga, Colombia; Carrera 4 No. 12-41 of. 710, Cali, Colombia;

[[Page 937]]

c/o CONSTRUCTORA ALTOS DE RETIRO LTDA., Bogota, Colombia; c/o 
INVERSIONES ARIO LTDA., Cali, Colombia (DOB 12 May 1938; Cedula No. 
2879530 (Colombia)) (individual) [SDNT]
ARJONA ALVARADO, Rafael, c/o ALPHA PHARMA S.A., Bogota, Colombia; c/o 
FARMATODO S.A., Bogota, Colombia; c/o LABORATORIOS BLAIMAR, Bogota, 
Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia 
(Cedula No. 19442698 (Colombia)) (individual) [SDNT]
ARLONE FACELLI, Roberto, c/o DISTRIBUIDORA DE DROGAS CONDOR S.A., 
Bogota, Colombia (Cedula No. 16632415 (Colombia)) (individual) [SDNT]
ARMANI, Dino, Via Abruzzi 94, Milan, Italy; Via San Francesco d'Assisi 
10, Milan, Italy; Viale Abbruzzi 24, Milan, Italy (DOB 20 September 
1920) (individual) [LIBYA]
ARMANI, Giampiero, Viale Abruzzi 94, Milan, Italy (DOB 15 September 
1932) (individual) [LIBYA]
ARMED ISLAMIC GROUP (AIG) (a.k.a. GIA; a.k.a. GROUPEMENT ISLAMIQUE ARME; 
a.k.a. AL-JAMA'AH AL-ISLAMIYAH AL-MUSALLAH) [FTO]
ARMED ISLAMIC GROUP (a.k.a. AL-JAMA'AH AL-ISLAMIYAH AL-MUSALLAH; a.k.a. 
GIA; a.k.a. GROUPEMENT ISLAMIQUE ARME) [FTO] [SDGT]
ARMERO RIASCOS, Jose Eliecer, Carrera 5 No. 8-00, Buenaventura, 
Colombia; c/o INDUSTRIA DE PESCA SOBRE EL PACIFICO S.A., Buenaventura, 
Colombia; Cedula No. 16471549 (Colombia) (individual) [SDNT]
ARMY OF MOHAMMED (see JAISH-I-MOHAMMED) [SDGT]
ASBAT AL-ANSAR [SDGT]
ASESORIAS COSMOS LTDA., Carrera 40 No. 6-50 apt. 13-01, Cali, Colombia 
[SDNT]
ASPOIR DEL PACIFICO Y CIA. LTDA., Cali, Colombia [SDNT]
ASSOCIATED ENGINEERS, England [IRAQ]
ASTERIS S.A. INDUSTRIAL & COMMERCIAL CORPORATION, Athens, Greece [LIBYA]
ATAMALLO SHIPPING CO. LTD. (a.k.a. ANTAMALLO SHIPPING CO. LTD.), c/o 
EMPRESA DE NAVEGACION MAMBISA, Apartado 543, San Ignacio 104, Havana, 
Cuba [CUBA]
ATBARA CEMENT COMPANY LIMITED, P.O. Box 36, Atbara, Sudan [SUDAN]
ATEF, Muhammad (a.k.a. ABU HAFS; a.k.a. ABDULLAH, Sheikh Taysir; a.k.a. 
AL-MASRI, Abu Hafs; a.k.a. EL KHABIR, Abu Hafs el Masry; a.k.a. TAYSIR) 
DOB 1956; POB Egypt (individual) [SDT]
ATEF, Muhammad (see ATIF, Muhammad) (individual) [SDT] [SDGT]
ATIA, Hachim K., 2 Stratford Place, London W1N 9AE, England (individual) 
[IRAQ]
ATIA, Hachim K., Hay Al-Adil, Mahala-645, Zukak-8, No.-39, Baghdad, Iraq 
(individual) [IRAQ]
ATIA, Hachim K., Lane 15, Area 902, Hai Al-Wahda, Baghdad, Iraq 
(individual) [IRAQ]
ATIF, Mohamed (see ATIF, Muhammad) (individual) [SDT] [SDGT]
ATIF, Muhammad (a.k.a. AL-MASRI, Abu Hafs; a.k.a. ABDULLAH, Sheikh 
Taysir; a.k.a. ABU HAFS; a.k.a. ABU SITTA, Subhi; a.k.a. ATEF, Muhammad; 
a.k.a. ATIF, Mohamed; a.k.a. EL KHABIR, Abu Hafs el Masry; a.k.a. 
TAYSIR) (DOB 1951; alt. DOB 1956 alt. DOB 1944; POB Alexandria, Egypt) 
(individual) [SDT] [SDGT]
ATLAS AIR CONDITIONING COMPANY LIMITED, 55 Roebuck House, Palace Street, 
London, England [IRAQ]
ATLAS EQUIPMENT COMPANY LIMITED, 55 Roebuck House, Palace Street, 
London, England [IRAQ]
ATWA, Ali (a.k.a. BOUSLIM, Ammar Mansour; a.k.a. SALIM, Hassan Rostom), 
Lebanon (DOB 1960; POB Lebanon; Citizen Lebanon) (individual) [SDGT]
ATWAH, Muhsin Musa Matwalli (a.k.a. ABDEL RAHMAN; a.k.a. ABDUL RAHMAN; 
a.k.a. AL-MUHAJIR, Abdul Rahman; a.k.a. AL-NAMER, Mohammed K.A.), 
Afghanistan (DOB 19 Jun 1964; POB Egypt; Citizen Egypt) (individual) 
[SDGT]
AUM SHINRIKYO (a.k.a. AUM SUPREME TRUTH; a.k.a. A.I.C. SOGO KENKYUSHO; 
a.k.a. A.I.C. COMPREHENSIVE RESEARCH INSTITUTE) [FTO]
AUM SUPREME TRUTH (see AUM SHINRIKYO) [FTO]
AUREAL INMOBILIARIA LTDA., Avenida 7 No. 112-38 of. 104, Bogota, 
Colombia [SDNT]
AUTO BATTERY PLANT, Libya [LIBYA]
AUTOMOBILE CORPORATION, Khartoum, Sudan [SUDAN]
AVALON, S.A., Colon Free Zone, Panama [CUBA]
AVENDAN[tilde]O GUTIERREZ, Francisco Eduardo, Carrera 8 No. 66-21 apt. 
204, Bogota, Colombia; Transversal 1A No. 69-54 apt. 502, Bogota, 
Colombia; c/o CONSTRUCCIONES AVENDANO GUTIERREZ Y CIA. LTDA., Bogota, 
Colombia; c/o LABORATORIOS GENERICOS VETERINARIOS, Bogota, Colombia; 
Cedula No. 16645182 (Colombia) (individual) [SDNT]
AVILA DE MONDRAGON, Ana Dolores, c/o COMPAX LTDA., Cali, Colombia; c/o 
INVERSIONES Y CONSTRUCCIONES ABC S.A., Cali, Colombia; c/o INVERSIONES Y 
CONSTRUCCIONES COSMOVALLE LTDA., Cali, Colombia; Cedula No. 29183223 
(Colombia) (individual) [SDNT]
AVILA MIRANDA, Jorge A., Calle 52N No. 2D-29, Cali, Colombia; c/o 
CAUCALITO LTDA., Cali, Colombia; (Cedula No. 12534286 (Colombia)) 
(individual) [SDNT]

[[Page 938]]

AWDA, Abd Al Aziz, Chief Ideological Figure of PALESTINIAN ISLAMIC JIHAD 
- SHIQAQI (DOB 1946) (individual) [SDT]
AYADI CHAFIK, Ben Muhammad (see BIN MUHAMMAD, Ayadi Chafiq) (individual) 
[SDGT]
AYADI SHAFIQ, Ben Muhammad (see BIN MUHAMMAD, Ayadi Chafiq) (individual) 
[SDGT]
AZIZ, Fouad Hamza, Praca Pio X, 54-10o Andar, CEP 20091, Rio de Janeiro, 
Brazil (individual) [IRAQ]
AZIZ, Mohammad (a.k.a. AFGHAN, Shear; a.k.a. AFGHAN, Sher; a.k.a. 
AFGHAN, Shir; a.k.a. KHAN, Abdullah) DOB 1962; alt. DOB 1959; POB 
Pakistan (individual) [SDNTK]
AZIZ, Tariq Mikhail, Deputy Prime Minister, Iraq (DOB 1936) (individual) 
[IRAQ]
AZIZIA BOTTLE PLANT, Libya [LIBYA]
AZRAK S.A., Panama [CUBA]
AZZAWIYA OIL REFINING COMPANY, Benghazi Asphalt Plant Office, Benghazi, 
Libya [LIBYA]
AZZAWIYA OIL REFINING COMPANY, P.O. Box 6451, Tripoli, Libya [LIBYA]
BABANOUSA MILK PRODUCTS FACTORY, P.O. Box 16, Babanousa, Sudan [SUDAN]
BABESTAN, Abeni O. (see OGUNGBUYI, Abeni O.) (individual) [SDNTK]
BABESTAN, Wole A. (see OGUNGBUYI, Oluwole A.) (individual) [SDNTK]
BABIL INTERNATIONAL, Aeroport D'Orly, 94390 Orly Aerogare, France [IRAQ]
BADI, Mahmud, Secretary of People's Control and Follow-up of the 
Government of Libya, Libya (individual) [LIBYA]
BAEZA MOLINA, Carlos Alberto, c/o DERECHO INTEGRAL Y CIA. LTDA., Cali, 
Colombia; c/o INVERSIONES MIGUEL RODRIGUEZ E HIJO, Cali, Colombia 
(Cedula No. 16621765 (Colombia)) (individual) [SDNT]
BAHAMAD (see SWEDAN, Sheikh Ahmed Salim) (individual) [SDGT]
BAHAMAD, Sheik (see SWEDAN, Sheikh Ahmed Salim) (individual) [SDGT]
BAHAMADI, Sheikh (see SWEDAN, Sheikh Ahmed Salim) (individual) [SDGT]
BAKHTAR AFGHAN AIRLINES (see ARIANA AFGHAN AIRLINES) [TALIBAN]
BAKR, Abu (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
BALTOVSKI, Mira, General Manager for International Operations of 
Beogradska Banka (individual) [FRYM]
BANCO BRASILEIRO-IRAQUIANO S.A., Praca Pio X, 54-10o Andar CEP 20091, 
Rio de Janeiro, Brazil (Head office and city branch) [IRAQ]
BANCO NACIONAL DE CUBA (a.k.a. BNC; a.k.a. NATIONAL BANK OF CUBA), 
Avenida de Concha Espina 8, E-28036 Madrid, Spain [CUBA]
BANCO NACIONAL DE CUBA (a.k.a. BNC; a.k.a. NATIONAL BANK OF CUBA), Dai-
Ichi Bldg. 6th Floor, 10-2 Nihombashi, 2-chome, Chuo-ku, Tokyo 103, 
Japan [CUBA]
BANCO NACIONAL DE CUBA (a.k.a. BNC; a.k.a. NATIONAL BANK OF CUBA), 
Federico Boyd Avenue & 51 Street, Panama City, Panama [CUBA]
BANCO NACIONAL DE CUBA (a.k.a. BNC; a.k.a. NATIONAL BANK OF CUBA), 
Zweierstrasse 35, CH-8022 Zurich, Switzerland [CUBA]
BANDERAS, Aracelly, c/o AGROPECUARIA LA ROBLEDA S.A., Cali, Colombia 
(individual) [SDNT]
BANK E. MILLIE AFGHAN (see BANKE MILLIE AFGHAN) [TALIBAN]
BANK OF AFGHANISTAN (see DA AFGHANISTAN BANK) [TALIBAN]
BANK OF KHARTOUM (a.k.a. BANK OF KHARTOUM GROUP), P.O. Box 1008, 
Khartoum, Sudan; P.O. Box 312, Khartoum, Sudan; P.O. Box 880, Khartoum, 
Sudan; P.O. Box 2732, Khartoum, Sudan; P.O. Box 408, Barlaman Ave., 
Khartoum, Sudan; P.O. Box 67, Omdurman, Sudan; P.O. Box 241, Port Sudan, 
Sudan; P.O. Box 131, Wad Medani, Sudan; Abu Hammad, Sudan; Abugaouta, 
Sudan; Assalaya, Sudan; P.O. Box 89, Atbara, Sudan; Berber, Sudan; 
Dongola, Sudan; El Daba, Sudan; El Dain, Sudan; El Damazeen, Sudan; El 
Damer, Sudan; El Dilling, Sudan; El Dinder, Sudan; El Fashir, Sudan; El 
Fow, Sudan; El Gadarit, Sudan; El Garia, Sudan; El Ghadder, Sudan; El 
Managil, Sudan; El Mazmoum, Sudan; P.O. Box 220, El Obeid, Sudan; El 
Rahad, Sudan; El Roseirs, Sudan; El Suk el Shabi, Sudan; Halfa el 
Gadida, Sudan; Karima, Sudan; Karkoug, Sudan; Kassala, Sudan; Omdurman 
P.O. Square, P.O. Box 341, Khartoum, Sudan; Sharia el Barlaman, P.O. Box 
922, Khartoum, Sudan; Sharia el Gama'a, P.O. Box 880, Khartoum, Sudan; 
Sharia el Gamhoria, P.O. Box 312, Khartoum, Sudan; Sharia el Murada, 
Khartoum, Sudan; Tayar Murad, P.O. Box 922, Khartoum, Sudan; Suk el 
Arabi, P.O. Box 4160, Khartoum, Sudan; University of Khartoum, Khartoum, 
Sudan; P.O. Box 12, Kosti, Sudan; P.O. Box 135, Nyala, Sudan; Rabak, 
Sudan; Rufaa, Sudan; Sawakin, Sudan; Shendi, Sudan; Singa, Sudan; 
Tamboul, Sudan; Tandalti, Sudan; Tokar, Sudan; Wadi Halfa, Sudan [SUDAN]
BANK OF SUDAN, Sharia El Gamaa, P.O. Box 313, Khartoum, Sudan; Atbara, 
Sudan; P.O. Box 27, El Obeid, Sudan; P.O. Box 136, Juba, Sudan; P.O. Box 
73, Kosti, Sudan; Nyala, Sudan; P.O. Box 34, Port Sudan, Sudan; Wad 
Medani, Sudan; Wau, Sudan [SUDAN]
BANKE MILLIE AFGHAN (a.k.a. AFGHAN NATIONAL BANK; a.k.a. BANK E. MILLIE 
AFGHAN) Jada Ibn Sina, Kabul, Afghanistan [TALIBAN]
BANOVIC, Nenad, (ICTY indictee, Bosnian Serb) (individual) [FRYM]

[[Page 939]]

BANOVIC, Predrag, (ICTY indictee, Bosnian Serb) (individual) [FRYM]
BANQUE ARABE DU NORD-BAAN (a.k.a. BANQUE ARABE D'AFRIQUE DU NORD [BAAN]; 
a.k.a. N.A.I.B.; a.k.a. NORTH AFRICA INTERNATIONAL BANK; a.k.a. NORTH 
AFRICAN INTERNATIONAL BANK), P.O. Box 102, Le Belvedere, 1002 Tunis, 
Tunisia [LIBYA]
BANQUE ARABE DU NORD-BAAN (a.k.a. BANQUE ARABE D'AFRIQUE DU NORD [BAAN]; 
a.k.a. N.A.I.B.; a.k.a. NORTH AFRICA INTERNATIONAL BANK; a.k.a. NORTH 
AFRICAN INTERNATIONAL BANK), 25 Avenue Khereddine Pacha, Tunis, Tunisia 
[LIBYA]
BANQUE ARABE DU NORD-BAAN (a.k.a. BANQUE ARABE D'AFRIQUE DU NORD [BAAN]; 
a.k.a. N.A.I.B.; a.k.a. NORTH AFRICA INTERNATIONAL BANK; a.k.a. NORTH 
AFRICAN INTERNATIONAL BANK), P.O. Box 485, 1080 Tunis Cedex, Tunisia 
[LIBYA]
BANQUE ARABE DU NORD-BAAN (a.k.a. BANQUE ARABE D'AFRIQUE DU NORD [BAAN]; 
a.k.a. N.A.I.B.; a.k.a. NORTH AFRICA INTERNATIONAL BANK; a.k.a. NORTH 
AFRICAN INTERNATIONAL BANK), Avenue Kheireddine Pacha 25, Tunis, Tunisia 
[LIBYA]
BANQUE ARABE LIBYENNE BURKINABE POUR LE COMMERCE EXTERIEUR ET LE 
DEVELOPPEMENT, 1336 Avenue Nelson Mandela, Ouagadougou, Burkina Faso 
[LIBYA]
BANQUE ARABE LIBYENNE MALIENNE POUR LE COMMERCE EXTERIEUR ET LE 
DEVELOPPEMENT (a.k.a. BALIMA; a.k.a. BANQUE COMMERCIALE DU SAHEL; a.k.a. 
CHINGUETTY BANK), P.O. Box 2372, Bamako, Mali [LIBYA]
BANQUE ARABE LIBYENNE MAURITANIENNE POUR LE COMMERCE EXTERIEUR ET LE 
DEVELOPPEMENT (a.k.a. BALM), Jamal Abdulnasser Street, P.O. Box 262, 
Nouakchott, Mauritania [LIBYA]
BANQUE ARABE LIBYENNE NIGERIENNE POUR LE COMMERCE EXTERIEUR ET LE 
DEVELOPPEMENT (a.k.a. BALINEX; a.k.a. BANQUE COMMERCIALE DU NIGER; 
a.k.a. BCN), P.O. Box 11363, Niamey, Niger [LIBYA]
BANQUE ARABE LIBYENNE TOGOLAISE DU COMMERCE EXTERIEUR (a.k.a. BALTEX; 
a.k.a. SOCIETE INTERAFFRICAINE DU BANQUE), P.O. Box 4874, Lome, Togo 
[LIBYA]
BANQUE ARABE TUNISO-LIBYENNE DE DEVELOPPEMENT ET DE COMMERCE EXTERIEUR 
(a.k.a. B.T.L.), 25 Avenue Kheireddine Pacha, P.O. Box 102, 1002 Le 
Belvedere, Tunis, Tunisia [LIBYA]
BANQUE INTERCONTINENTALE ARABE, 67, Avenue Franklin Roosevelt, 75008 
Paris, France [LIBYA]
BANQUE TCHADO ARABE LIBYENNE, P.O. Box 104, N'Djamena, Chad [LIBYA]
BARON DIAZ, Carlos Arturo, c/o GRACADAL S.A., Bogota, Colombia; c/o 
DISTRIBUIDORA MIGIL LTDA., Cali, Colombia (Cedula No. 49994 (Colombia)) 
(individual) [SDNT]
BARONA, Fernando, c/o DISMERCOOP, Cali, Colombia (Cedula No. 16688872 
(Colombia)) (individual) [SDNT]
BAROON SHIPPING COMPANY LIMITED, Haven Court, 5 Library Ramp, Gibraltar 
[IRAQ]
BARRIOS, Alba Lucia, Los Alcazares Bloq. 93 Ap. 402, Cali, Colombia; c/o 
CREDIREBAJA S.A., Cali, Colombia; c/o POLIEMPAQUES S.A., Cali, Colombia; 
c/o SONAR F.M. E.U. DIETER MURRLE, Cali, Colombia; c/o SONAR F.M. S.A., 
Cali, Colombia; Cedula No. 38853130 (Colombia) (individual) [SDNT]
BARRIOS SENIOR, Jario Ascanio, c/o PENTACOOP LTDA., Bogota, Colombia 
(Cedula No. 8723099 (Colombia)) (individual) [SDNT]
``The BASE'' (see AL QA'IDA) [SDT, FTO]
``THE BASE'' (see AL QAIDA) [SDT] [FTO] [SDGT]
BASQUE FATHERLAND AND LIBERTY (a.k.a. EUZKADI TA ASKATASUNA; a.k.a. ETA) 
[FTO]
BATISTA, Miguel, Panama (individual) [CUBA]
BAY INDUSTRIES, INC., 10100 Santa Monica Boulevard, Santa Monica, 
California, U.S.A. [IRAQ]
BECERRA BECERRA, Alvaro, c/o AGROPECUARIA LA ROBLEDA LTDA., Cali, 
Colombia (Cedula No. 2730788 (Colombia)) (individual) [SDNT]
BECERRA, Martin (a.k.a. BECERRA MIRELES, Martin; a.k.a. MACHERBE, Oscar; 
a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; a.k.a. MAHLERBE, Polo; 
a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; a.k.a. MALERHBE DE LEON, 
Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE DE LEON, Oscar; a.k.a. 
MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
BECERRA MIRELES, Martin (a.k.a. BECERRA, Martin; a.k.a. MACHERBE, Oscar; 
a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; a.k.a. MAHLERBE, Polo; 
a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; a.k.a. MALERHBE DE LEON, 
Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE DE LEON, Oscar; a.k.a. 
MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a.

[[Page 940]]

QALHARBE DE LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB 
Mexico (individual) [SDNTK]
BECHARA SIMANCA, Salim, c/o SOCOVALLE, Cali, Colombia (DOB 26 July 1950; 
Cedula No. 19163957 (Colombia)) (individual) [SDNT]
BELMEX IMPORT EXPORT CO., LTD., 24 Corner Regent and Kings Streets, 
Belize City, Belize [CUBA]
BENGHAZI CEMENT PLANT, Libya [LIBYA]
BENGHAZI EST. FOR BUILDING AND CONSTRUCTION, P.O. Box 2118, Benghazi, 
Libya [LIBYA]
BENGHAZI LIME PLANT, Libya [LIBYA]
BENGHAZI PAPER BAGS PLANT, Libya [LIBYA]
BENGHAZI TANNERY, Libya [LIBYA]
BENITEZ CASTELLANOS, Cesar Tulio, Carrera 65 No. 13B-82, Cali, Colombia; 
c/o COMUNICACION VISUAL LTDA., Cali, Colombia; c/o D'CACHE S.A., Cali, 
Colombia; c/o DROGAS LA REBAJA, Cali, Colombia; c/o INVERSIONES 
MONDRAGON Y CIA. S.C.S., Cali, Colombia; c/o INVERSIONES Y 
CONSTRUCCIONES ABC S.A., Cali, Colombia; c/o RIONAP COMERCIOS Y 
REPRESENTACIONES S.A., Quito, Ecuador; Cedula No. 14969366 (Colombia) 
(individual) [SDNT]
BERRUIEN, Dr. Nuri Abdalla, c/o ARABIAN GULF OIL COMPANY, P.O. Box 263, 
Benghazi, Libya (DOB 18 March 1946) (individual) [LIBYA]
BETTINA SHIPPING CO. LTD., c/o EMPRESA DE NAVEGACION MAMBISA, Apartado 
543, San Ignacio 104, Havana, Cuba [CUBA]
BEWELL CORPORATION, INC., Panama [CUBA]
BEXHETI, Nuri, Member of National Liberation Army (NLA) (DOB: 1962; POB: 
Tetovo, FYROM) (individual) [BALKANS]
BIN KHALID, Fahd Bin Adballah (see MOHAMMED, Khalid Shaikh) (individual) 
[SDGT]
BIN LADEN, Osama (see BIN LADEN, Usama) (individual) [SDT] [SDGT]
BIN LADEN, Usama (a.k.a. BIN LADIN, Usama bin Muhammad bin Awad; a.k.a. 
BIN LADEN, Osama; a.k.a. BIN LADIN, Osama; a.k.a. BIN LADIN, Osama bin 
Muhammad bin Awad; a.k.a. BIN LADIN, Usama) (DOB 30 Jul 57; alt. DOB 
1958; POB Jeddah, Saudi Arabia; alt. POB Yemen) (individual) [SDT] 
[SDGT]
BIN LADIN, Osama (see BIN LADEN, Usama) (individual) [SDT] [SDGT]
BIN LADIN, Osama bin Muhammad bin Awad (see BIN LADEN, Usama) 
(individual) [SDT] [SDGT]
BIN LADIN, Usama (see BIN LADEN, Usama) (individual) [SDT] [SDGT]
BIN LADIN, Usama bin Muhammad bin Awad (a.k.a. BIN LADIN, Usama), DOB 30 
July 1957; POB Jeddah, Saudi Arabia (individual) [SDT]
BIN LADIN, Usama bin Muhammad bin Awad (see BIN LADEN, Usama) 
(individual) [SDT] [SDGT]
BIN MARWAN, Bilal (DOB 1947) (individual) [SDGT]
BIN MUHAMMAD, Ayadi Chafiq (a.k.a. AYADI SHAFIQ, Ben Muhammad; a.k.a. 
AYADI CHAFIK, Ben Muhammad; a.k.a. AIADI, Ben Muhammad; a.k.a. AIADY, 
Ben Muhammad), Helene Meyer Ring 10-1415-80809, Munich, Germany; 129 
Park Road, NW8, London, England; 28 Chaussee de Lille, Mouscron, 
Belgium; Darvingasse 1/2/58-60, Vienna, Austria; Tunisia (DOB 21 Jan 
1963; POB Safais (Sfax), Tunisia) (individual) [SDGT]
BLACK SEPTEMBER (see ABU NIDAL ORGANIZATION) [SDT, FTO]
BLUE NILE BREWERY, P.O. Box 1408, Khartoum, Sudan [SUDAN]
BLUE NILE PACKING CORPORATION, P.O. Box 385, Khartoum, Sudan [SUDAN]
BOILEAU, Pierre, 1078 Rue Champigny, Duvernay, Quebec, Canada 
(individual) [CUBA]
BONOMERCAD S.A. (f.k.a. DECACOOP S.A.), Transversal 29 No. 39-92, 
Bogota, Colombia; NIT  830018919-3 (Colombia) [SDNT]
BOROVNICA, Goran, (ICTY indictee, Bosnian Serb) (individual) [FRYM]
BORRERO Q., Hector Fabio, c/o INMOBILIARIA SAMARIA LTDA., Cali, 
Colombia; c/o INVERSIONES SANTA LTDA., Cali, Colombia; c/o SOCIEDAD 
CONSTRUCTORA LA CASCADA S.A., Cali, Colombia (individual) [SDNT]
BORTOLOTTI PETROLI S.p.A., Via San Desiderio, 11, 25020 Flero, Italy; 
Magazzino con Vendita Ingrosso, Via Garibaldi, 51, 25030 Paratico, 
Italy; Deposito, Via Zette, 14/A, 25087 Salo, Italy [SDN]
BOUSLIM, Ammar Mansour (see ATWA, Ali) (individual) [SDGT]
BOUTIQUE LA MAISON, 42 Via Brasil, Panama City, Panama [CUBA]
BOZOVIC, Radoman, ex-Managing Director of Genex (DOB 10 Jan 53) 
(individual) [FRYM]
BRADFIELD MARITIME CORPORATION INC., c/o EMPRESA DE NAVEGACION MAMBISA, 
Apartado 543, San Ignacio 104, Havana, Cuba [CUBA]
BREGA INTERNATIONAL MARKETING COMPANY, Al Nassar Street, P.O. Box 4768, 
Tripoli, Libya [LIBYA]
BREGA PETROLEUM MARKETING COMPANY, Alnaser Street, P.O. Box 402, 
Tripoli, Libya [LIBYA]
BREGA PETROLEUM MARKETING COMPANY, Azzawiya Km. 50, P.O. Box 402, 
Tripoli, Libya [LIBYA]
BREGA PETROLEUM MARKETING COMPANY, P.O. Box 1278, Benghazi, Libya 
[LIBYA]

[[Page 941]]

BREGA PETROLEUM MARKETING COMPANY, Sayedi Street, P.O. Box 402, Tripoli, 
Libya [LIBYA]
BUDISIN, Radmila, General Manager, Legal, BB Browncourt Trading (DOB 3 
Mar 44; POB Srobobran) (individual) [FRYM]
BUENDIA CUELLAR, Luis Alfonso, c/o GALAPAGOS S.A., Cali, Colombia; 
Cedula No. 6044411 (Colombia) (individual) [SDNT]
BUHLER, Bruno, 57 Rue du Rhone, CH-1204 Geneva, Switzerland (individual) 
[IRAQ]
BUILDING MATERIALS AND REFRACTORIES CORPORATION, P.O. Box 2241, 
Khartoum, Sudan [SUDAN]
BUITRAGO DE HERRERA, Luz Mery, c/o AGROPECUARIA BETANIA LTDA., Cali, 
Colombia; c/o AGROPECUARIA Y REFORESTADORA HERREBE LTDA., Cali, 
Colombia; c/o CONSTRUEXITO S.A., Cali, Colombia; c/o INVERSIONES BETANIA 
LTDA., Cali, Colombia; c/o INVERSIONES EL GRAN CRISOL LTDA., Cali, 
Colombia; c/o INVERSIONES GEMINIS S.A., Cali, Colombia; c/o INVERSIONES 
HERREBE LTDA., Cali, Colombia; c/o INVERSIONES INVERVALLE S.A., Cali, 
Colombia; c/o SOCOVALLE, Cali, Colombia; c/o VALLADARES LTDA., Cali, 
Colombia; c/o W. HERRERA Y CIA., Cali, Colombia; Cedula No. 29641219 
(Colombia) (individual) [SDNT]
BUITRAGO MARIN, Adiela, c/o CONSTRUEXITO S.A., Cali, Colombia; c/o 
INDUSTRIA AVICOLA PALMASECA S.A., Cali, Colombia (Cedula No. 31137617 
(Colombia)) (individual) [SDNT]
BUITRAGO MARIN, Nubia, c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia 
(Cedula No. 31132922 (Colombia)) (individual) [SDNT]
BULATOVIC, Momir, Ex-Prime Minister, Federal Republic of Yugoslavia (DOB 
21 Sep 56) (individual) [FRYM]
BURGAN INTERNATIONAL, Kuwait [CUBA]
BUSENTI, Marcantonio or Marcello, Via Alatri 14, Rome, Italy (DOB 30 MAY 
38) (individual) [LIBYA]
BUSHWESHA, Abdullah (individual) [LIBYA]
C.N.A. PUBLICIDAD LTDA., Calle 74 No. 53-30, Barranquilla, Colombia; NIT 
 802002664-9 (Colombia) [SDNT]
CABALLERO, Roger Montanes (a.k.a. DOOLEY, Roger Edward; a.k.a. MONTANES, 
Roger), Panama (individual) [CUBA]
CAICEDO VERGARA, Nohemy,(a.k.a. CAICEDO VERGARA, Nohemi), Km. 4 El 
Pinal, Buenaventura, Colombia; c/o INDUSTRIA DE PESCA SOBRE EL PACIFICO 
S.A., Buenaventura, Colombia; Cedula No. 31375185 (Colombia) 
(individual) [SDNT]
CALDERON RODRIGUEZ, Solange, c/o INMOBILIARIA AURORA LTDA., Cali, 
Colombia; c/o INVERSIONES SANTA LTDA., Cali, Colombia; c/o SOCIEDAD 
CONSTRUCTORA LA CASCADA S.A., Cali, Colombia (individual) [SDNT]
CAMACHO RIOS, Jaime, c/o CONSTRUCCIONES ASTRO S.A., Cali, Colombia; 
(Cedula No. 14950781 (Colombia)) (individual) [SDNT]
CAMALATA, Abilio (see KAMALATA, Abilio Jose Augusto ``Numa'') 
(individual) [UNITA]
CAMPO VERDE LTDA., Carrera 54 No. 75-97 piso 2, Barranquilla, Colombia; 
NIT  800204479-2 (Colombia) [SDNT]
CANDEIA, Anibal Jose Mateus ``Kile'' (a.k.a. KANDEYA, Amilcar Jose 
Mateus; a.k.a. KANDEYA, Anibal), UNITA Representative to the United 
Kingdom; DOB 21 August 1954; POB Dondi, Huambo Province, Angola; 
Passport No. PSAE/505893 (Ivory Coast) (individual) [UNITA]
CANIPEL S.A. (a.k.a. CANAPEL S.A.), c/o EMPRESA DE NAVEGACION MAMBISA, 
Apartado 543, San Ignacio 104, Havana, Cuba [CUBA]
CARBONICA, S.A., Panama [CUBA]
CARDENAS CASTILLO, Osiel (a.k.a. CARDENAS GILLEN, Osiel; a.k.a. CARDENAS 
GUILLEN, Ociel; a.k.a. CARDENAS GUILLEN, Oscar; a.k.a. CARDENAS GUILLEN, 
Osiel; a.k.a. CARDENAS GUILLEN, Oziel; a.k.a. CARDENAS GULLEN, Osiel; 
a.k.a. CARDENAS TUILLEN, Osiel; a.k.a. SALINA AGUILAR, Jorge; a.k.a. 
SALINAS AGUILAR, Jorge) DOB 18 May 1967; POB Mexico (individual) [SDNTK]
CARDENAS GILLEN, Osiel (a.k.a. CARDENAS CASTILLO, Osiel; a.k.a. ; a.k.a. 
CARDENAS GUILLEN, Ociel; a.k.a. CARDENAS GUILLEN, Oscar; a.k.a. CARDENAS 
GUILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Oziel; a.k.a. CARDENAS GULLEN, 
Osiel; a.k.a. CARDENAS TUILLEN, Osiel; a.k.a. SALINA AGUILAR, Jorge; 
a.k.a. SALINAS AGUILAR, Jorge) DOB 18 May 1967; POB Mexico (individual) 
[SDNTK]
CARDENAS GUILLEN, Ociel (a.k.a. CARDENAS CASTILLO, Osiel; a.k.a. 
CARDENAS GILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Oscar; a.k.a. CARDENAS 
GUILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Oziel; a.k.a. CARDENAS GULLEN, 
Osiel; a.k.a. CARDENAS TUILLEN, Osiel; a.k.a. SALINA AGUILAR, Jorge; 
a.k.a. SALINAS AGUILAR, Jorge) DOB 18 May 1967; POB Mexico (individual) 
[SDNTK]
CARDENAS GUILLEN, Oscar (a.k.a. CARDENAS CASTILLO, Osiel; a.k.a. 
CARDENAS GILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Ociel; a.k.a. CARDENAS 
GUILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Oziel; a.k.a. CARDENAS GULLEN, 
Osiel; a.k.a. CARDENAS TUILLEN, Osiel; a.k.a. SALINA AGUILAR, Jorge; 
a.k.a. SALINAS

[[Page 942]]

AGUILAR, Jorge) DOB 18 May 1967; POB Mexico (individual) [SDNTK]
CARDENAS GUILLEN, Osiel (a.k.a. CARDENAS CASTILLO, Osiel; a.k.a. 
CARDENAS GILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Ociel; a.k.a. CARDENAS 
GUILLEN, Oscar; a.k.a. CARDENAS GUILLEN, Oziel; a.k.a. CARDENAS GULLEN, 
Osiel; a.k.a. CARDENAS TUILLEN, Osiel; a.k.a. SALINA AGUILAR, Jorge; 
a.k.a. SALINAS AGUILAR, Jorge) DOB 18 May 1967; POB Mexico (individual) 
[SDNTK]
CARDENAS GUILLEN, Oziel (a.k.a. CARDENAS CASTILLO, Osiel; a.k.a. 
CARDENAS GILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Ociel; a.k.a. CARDENAS 
GUILLEN, Oscar; a.k.a. CARDENAS GUILLEN, Osiel; a.k.a. CARDENAS GULLEN, 
Osiel; a.k.a. CARDENAS TUILLEN, Osiel; a.k.a. SALINA AGUILAR, Jorge; 
a.k.a. SALINAS AGUILAR, Jorge) DOB 18 May 1967; POB Mexico (individual) 
[SDNTK]
CARDENAS GULLEN, Osiel (a.k.a. CARDENAS CASTILLO, Osiel; a.k.a. CARDENAS 
GILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Ociel; a.k.a. CARDENAS GUILLEN, 
Oscar; a.k.a. CARDENAS GUILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Oziel; 
a.k.a. CARDENAS TUILLEN, Osiel; a.k.a. SALINA AGUILAR, Jorge; a.k.a. 
SALINAS AGUILAR, Jorge) DOB 18 May 1967; POB Mexico (individual) [SDNTK]
CARDENAS TUILLEN, Osiel (a.k.a. CARDENAS CASTILLO, Osiel; a.k.a. 
CARDENAS GILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Ociel; a.k.a. CARDENAS 
GUILLEN, Oscar; a.k.a. CARDENAS GUILLEN, Osiel; a.k.a. CARDENAS GUILLEN, 
Oziel; a.k.a. CARDENAS GULLEN, Osiel; a.k.a. ; a.k.a. SALINA AGUILAR, 
Jorge; a.k.a. SALINAS AGUILAR, Jorge) DOB 18 May 1967; POB Mexico 
(individual) [SDNTK]
CARDONA OCHOA, Carlos Julio, c/o AUREAL INMOBILIARIA LTDA., Bogota, 
Colombia; c/o GRUPO SANTA LTDA., Cali, Colombia (Cedula No. 7524996 
(Colombia)) (individual) [SDNT]
CARDONA RUEDA, Fernando Ivan, c/o COINTERCOS S.A., Bogota, Colombia; c/o 
DROGAS LA REBAJA Bogota S.A., Bogota, Colombia; c/o LABORATORIOS 
KRESSFOR DE COLOMBIA S.A., Bogota, Colombia (Cedula No. 16607447 
(Colombia)) (individual) [SDNT]
CARIBBEAN HAPPY LINES (a.k.a. CARIBBEAN HAPPY LINES CO.), Panama [CUBA]
CARIBBEAN HAPPY LINES CO. (a.k.a. CARIBBEAN HAPPY LINES), Panama [CUBA]
CARIBBEAN PRINCESS SHIPPING LTD., c/o EMPRESA DE NAVEGACION MAMBISA, 
Apartado 543, San Ignacio 104, Havana, Cuba [CUBA]
CARIBBEAN QUEEN SHIPPING LTD., c/o EMPRESA DE NAVEGACION MAMBISA, 
Apartado 543, San Ignacio 104, Havana, Cuba [CUBA]
CARIBERIA, S.A., Spain [CUBA]
CARIBSUGAR INTERNATIONAL TRADERS, S.A., 125-133 Camden High Street, 
London, NW1 7JR, England [CUBA]
CARIBSUGAR, S.A., Panama [CUBA]
CARISUB, S.A., Panama [CUBA]
CARMONA, Juan Manuel, c/o INVERSIONES ARA LTDA., Cali, Colombia; c/o 
INVERSIONES RODRIGUEZ ARBELAEZ, Cali, Colombia; c/o INVERSIONES 
RODRIGUEZ MORENO, Cali, Colombia (individual) [SDNT]
CARO QUINTERO, Miguel Angel; DOB 9 Mar 1963; POB Mexico (individual) 
[SDNTK]
CARO QUINTERO, Rafael (a.k.a. CARO QUINTERO, Raphael), DOB 12 December 
1952; alt. DOB 24 November 1955; alt. DOB 24 October 1955; POB Mexico 
(individual) [SDNTK]
CARO QUINTERO, Raphael (see CARO QUINTERO, Rafael) (individual) [SDNTK]
CARO RODRIGUEZ, Gilberto (a.k.a. AREGON, Max; a.k.a. ; a.k.a. GUIERREZ 
LOERA, Jose Luis; a.k.a. GUMAN LOERAL, Joaquin; a.k.a. GUZMAN, 
Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. GUZMAN, Aureliano; a.k.a. 
GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, Joaquin 
Chapo; a.k.a. GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, Joaquin; 
a.k.a. GUZMAN LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN 
PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. 
RAMIREZ, Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB 
Mexico (individual) [SDNTK]
CARRERO BURBANO, Emma Alexandra, c/o DROMARCA Y CIA. S.C.S., Bogota, 
Colombia; c/o FARMACOOP, Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE 
COLOMBIA S.A., Bogota, Colombia; Cedula No. 52362326 (Colombia) 
(individual) [SDNT]
CARRILLO FUENTES, Andres (see CARRILLO FUENTES, Vicente) (individual) 
[SDNTK]
CARRILLO FUENTES, Vicente (a.k.a. CARRILLO FUENTES, Andres), DOB 16 
October 1962; POB Mexico (individual) [SDNTK]
CARRILLO QUINTERO, Eugenio, c/o BONOMERCAD S.A., Bogota, Colombia; c/o 
DECAFARMA S.A., Bogota, Colombia; c/o DISTRIBUIDORA AGROPECUARIA 
COLOMBIANA S.A., Cali, Colombia; c/o PATENTES MARCAS Y REGISTROS S.A., 
Bogota, Colombia; c/o SHARPER S.A., Bogota, Colombia; Cedula No. 
73094061 (Colombia) (individual) [SDNT]

[[Page 943]]

CARRILLO SILVA, Armando, c/o GRACADAL S.A., Bogota, Colombia; c/o DROGAS 
LA REBAJA, Cali, Colombia; c/o INTERAMERICA DE CONSTRUCCIONES S.A., 
Cali, Colombia; c/o INVERSIONES CAMINO REAL S.A., Cali, Colombia (Cedula 
No. 16242828 (Colombia)) (individual) [SDNT]
CARRION JIMENEZ, Jose Alonso, c/o BONOMERCAD S.A., Bogota, Colombia; c/o 
GLAJAN S.A., Bogota, Colombia; c/o SHARPER S.A., Bogota, Colombia; 
Cedula No. 79000519 (Colombia) (individual) [SDNT]
CARS & CARS LTDA. (a.k.a. CENTRO COMERCIAL DEL AUTOMOVIL; a.k.a. 
COMERCIALIZADORA INTEGRAL LTDA.; a.k.a. PROYECTO CARS & CARS), Avenida 
Roosevelt entre carreras 38 y 38A esquinas, Cali, Colombia [SDNT]
CARVAJAL SUAREZ, Luz Mary, c/o DISMERCOOP, Cali, Colombia (Cedula No. 
24626230 (Colombia)) (individual) [SDNT]
CASA DE CUBA, Mexico; Spain [CUBA]
CASA DEL REPUESTO, Panama City, Panama [CUBA]
CASQUETE VARGAS, Orlando, c/o ALFA PHARMA S.A., Bogota, Colombia; c/o 
LABORATORIOS GENERICOS VETERINARIOS, Bogota, Colombia; c/o LABORATORIOS 
KRESSFOR, Bogota, Colombia; c/o PENTA PHARMA DE COLOMBIA S.A., Bogota, 
Colombia (Cedula No. 19270159 (Colombia)) (individual) [SDNT]
CASTAN[tilde]EDA BLANCO, Carlos Julio, c/o COSMEPOP, Bogota, Colombia 
(Cedula No. 79390781 (Colombia)) (individual) [SDNT]
CASTAN[tilde]EDA QUINTERO, Luis Alberto, c/o FARMACOOP, Bogota, 
Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia; 
c/o PENTA PHARMA DE COLOMBIA S.A., Bogota, Colombia; c/o PENTACOOP 
LTDA., Bogota, Colombia (Cedula No. 6064977 (Colombia)) (individual) 
[SDNT]
CASTAN[tilde]EDA RAMIREZ, Lorena Constanza, c/o PENTA PHARMA DE COLOMBIA 
S.A., Bogota, Colombia; c/o PENTACOOP LTDA., Bogota, Colombia (Cedula 
No. 52071011 (Colombia)) (individual) [SDNT]
CASTANO ARANGO, Fernando, c/o AGROPECUARIA LA ROBLEDA S.A., Cali, 
Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, Colombia (Cedula 
No. 14953602 (Colombia)) (individual) [SDNT]
CASTA[tilde]O PATIN[tilde]O, Maria Janet, c/o CONSTRUVIDA S.A., Cali, 
Colombia (Cedula No. 31149394 (Colombia)) (individual) [SDNT]
CASTELL, Osvaldo Antonio (VALDEZ), Panama (individual) [CUBA]
CASTELLANOS ALVAREZ TOSTADO, Juan Jose (a.k.a. ALVAREZ TOSTADO, Jose; 
a.k.a. GONZALEZ, Jose); DOB 27 Aug 1955; POB Mexico (individual) [SDNTK]
CASTRILLON CRUZ, Maria Leonor, c/o AGROPECUARIA LA ROBLEDA S.A., Cali, 
Colombia (individual) [SDNT]
CASTRO ARIAS, Libardo, (a.k.a. ARIAS CASTRO, Libardo), c/o BONOMERCAD 
S.A., Bogota, Colombia; c/o COMEDICAMENTOS S.A., Bogota, Colombia; c/o 
DECAFARMA S.A., Bogota, Colombia; c/o GLAJAN S.A., Bogota, Colombia; c/o 
SHARPER S.A., Bogota, Colombia; Cedula No. 2312291 (Colombia) 
(individual) [SDNT]
CASTRO DE SANTACRUZ, Amparo, c/o COMERCIALIZACION Y FINANCIACION DE 
AUTOMOTORES S.A., Cali, Colombia; c/o INMOBILIARIA SAMARIA LTDA., Cali, 
Colombia; c/o INVERSIONES EL PASO LTDA., Cali, Colombia; c/o INVERSIONES 
INTEGRAL LTDA., Cali, Colombia; c/o INVERSIONES SANTA LTDA., Cali, 
Colombia; c/o MIRALUNA LTDA., Cali, Colombia; c/o SAMARIA LTDA., Cali, 
Colombia; c/o URBANIZACIONES Y CONSTRUCCIONES LTDA. DE CALI, Cali, 
Colombia; DOB 13 January 1948; alt. DOBs 13 January 1946, 14 April 1959; 
Passports PE027370 (Colombia), AA429676 (Colombia); Cedula No. 38983611 
(Colombia) (individual) [SDNT]
CASTRO VERGARA, Sandra, c/o INVERSIONES EL PEN[tilde]ON S.A., Cali, 
Colombia (Cedula No. 31924082 (Colombia)) (individual) [SDNT]
CAUCALITO LTDA., (f.k.a. GANADERA LTDA.), (f.k.a. GANADERIA), Apartado 
Aereo 10077, Cali, Colombia; Carrera 4 No. 12-41 of. 1403, Edificio 
Seguros Bolivar, Cali, Colombia; NIT  800029160-9 [SDNT]
CAVIEDES CRUZ, Leonardo, Calle 21 Norte No. 3N-84, Cali, Colombia; c/o 
CAVIEDES DILEO Y CIA S.C.S., Cali, Colombia; c/o INVERSIONES SANTA 
LTDA., Cali, Colombia; DOB 23 November 1952; Passports AB151486 
(Colombia); AC444270 (Colombia), OC444290 (Colombia); Cedula No. 
16593470 (Colombia) (individual) [SDNT]
CAVIEDES DILEO Y CIA. S.C.S, Calle 21 Norte No. 3N-64, Cali, Colombia; 
NIT 800113437-2 (Colombia) [SDNT]
CECOEX, S.A., Panama City, Panama [CUBA]
CENTRAL BANK OF AFGHANISTAN (see DA AFGHANISTAN BANK) [TALIBAN]
CENTRAL BANK OF LIBYA, Al-Fatah Street, P.O. Box 1103, Tripoli, Libya 
[LIBYA]
CENTRAL BANK OF LIBYA, Benghazi, Libya [LIBYA]
CENTRAL BANK OF LIBYA, Sebha, Libya [LIBYA]
CENTRAL ELECTRICITY AND WATER CORPORATION (see PUBLIC ELECTRICITY AND 
WATER CORPORATION) [SUDAN]
CESIC, Ranko, (ICTY indictee, Bosnian Serb) (DOB 5 Sep 64; POB Drvar) 
(individual) [FRYM]

[[Page 944]]

CHACON PACHON, Rodolfo, c/o COSMEPOP, Bogota, Colombia; c/o 
DISTRIBUIDORA DE DROGAS CONDOR S.A., Bogota, Colombia (Cedula No. 
79538033 (Colombia)) (individual) [SDNT]
CHAMET IMPORT, S.A., Panama [CUBA]
CHAN, Changtrakul (see CHANG, Chi Fu) (individual) [SDNTK]
CHANG BARRERO, Pedro Antonio, c/o DISTRIBUIDORA MIGIL LTDA., Cali, 
Colombia; c/o RADIO UNIDAS FM S.A., Cali, Colombia (Cedula No. 14960909 
(Colombia) (individual) [SDNT]
CHANG, Chi Fu (a.k.a. CHAN, Changtrakul; a.k.a. CHANG, Shi-Fu; a.k.a. 
CHANG, Xifu; a.k.a. CHANGTRAKUL, Chan; a.k.a. KHUN SA), DOB 17 February 
1933; alt. DOB 7 January 1932; alt. DOB 12 February 1932; POB Burma 
(individual) [SDNTK]
CHANG, Ping Yun (a.k.a KHUN, Saeng); DOB 7 Jan 1940; POB Burma 
(individual) [SDNTK]
CHANG, Shi-Fu (see CHANG, Chi Fu) (individual) [SDNTK]
CHANG, Xifu (see CHANG, Chi Fu) (individual) [SDNTK]
CHANGTRAKUL, Chan (see CHANG, Chi Fu) (individual) [SDNTK]
CHAO, Lazaro R., Executive Director, Havana International Bank, 20 
Ironmonger Lane, London EC2V 8EY, England (individual) [CUBA]
CHARALAMBIDES, Kypros, Cyprus (individual) [LIBYA]
CHARNCHAI, Chiwinnitipanya (see WEI, Hsueh Kang) (individual) [SDNTK]
CHAVARRO, Hector Fabio, c/o AGROPECUARIA BETANIA LTDA., Cali, Colombia; 
c/o INVERSIONES VILLA PAZ S.A., Cali, Colombia; c/o VALLADARES LTDA., 
Cali, Colombia (Cedula No. 16263212 (Colombia)) (individual) [SDNT]
CHEEWINNITTIPANYA, Prasit (see WEI, Hsueh Kang) (individual) [SDNTK]
CHEMPETROL INTERNATIONAL (a.k.a. CHEMPETROL), 145, Flat 9, Tower Road, 
Sliema, Malta [LIBYA]
CHEMPETROL INTERNATIONAL LTD., 28 Lincoln's Inn Fields, London WC2A 3HH, 
England [LIBYA]
CHEMPETROL INTERNATIONAL LTD., 5th Floor, Quality Court, Chancery Lane, 
London WC2A 1HP, England [LIBYA]
CHILALA, Odeth Ludovina Baca Joaquim (a.k.a. LUDEVINA, Odeth), President 
of UNITA's League of Angolan Women (Secretary of Women's Organization 
for UNITA); DOB 5 August 1959; POB Bela Vista, Huambo Province, Angola 
(individual) [UNITA]
CHIVINNITIPANYA, Prasit (see WEI, Hsueh Kang) (individual) [SDNTK]
CHIWINNITIPANYA, Charnchai (see WEI, Hsueh Kang) (individual) [SDNTK]
CHOSUNBOHOM (a.k.a. KOREA FOREIGN INSURANCE COMPANY), 1080 Berlin 
Glinkastrasse 5, Germany [NKOREA]
CHOSUNBOHOM (a.k.a. KOREA FOREIGN INSURANCE COMPANY), 123, Rue des 
Tennerolles, 92210 Saint-Cloud, Paris, France [NKOREA]
CHOSUNBOHOM (a.k.a. KOREA FOREIGN INSURANCE COMPANY), Unt. Batterieweg 
35, CH-4008 Basel, Switzerland [NKOREA]
CIMECO, SRL, Milan, Italy [CUBA]
CIMEX IBERICA, Spain [CUBA]
CIMEX, Emerson No. 148 Piso 7, 11570 Mexico, D.F., Mexico [CUBA]
CIMEX, S.A., Panama [CUBA]
CIVIL AVIATION AUTHORITY, Sharia El Saidi, Tripoli, Libya [LIBYA]
CLAUDIA PILAR RODRIGUEZ Y CIA. S.C.S., Calle 17A No. 28A-43, Bogota, 
Colombia; NIT  830007201-7 (Colombia) [SDNT]
CLAVIJO GARCIA, Hector Augusto, c/o GANADERIAS DEL VALLE, Cali, Colombia 
(Cedula No. 16613930 (Colombia)) (individual) [SDNT]
CLINICA ESPECIALIZADA DEL VALLE S.A., (a.k.a. C.E.V. S.A.), Calle 10 No. 
44A-26, Cali, Colombia; Apartado Aereo 32412, Cali, Colombia; Carrera 46 
No. 9C-85, Cali, Colombia; Carrera 40 No. 6-50, Of. 1501, Cali, 
Colombia; NIT  800134099-6 (Colombia) [SDNT]
CLUB AMERICA DE CALI (see CORPORACION DEPORTIVA AMERICA) [SDNT]
CLUB DEPORTIVO AMERICA (see CORPORACION DEPORTIVA AMERICA) [SDNT]
COBALT REFINERY CO. INC., Fort Saskatchewan, AB, Canada [CUBA]
COINTERCOS S.A. (a.k.a. CIA. INTERAMERICANA DE COSMETICOS S.A.; f.k.a. 
BLAIMAR; f.k.a. LABORATORIOS BLAIMAR DE COLOMBIA S.A.), Apartado Aereo 
33248, Bogota, Colombia; Calle 12B No. 27-39, Bogota, Colombia (NIT 
 860511578-8) [SDNT]
COLCERDOS LTDA. (see COLOMBIANA DE CERDOS LTDA.) [SDNT]
COLL, Gabriel (PRADO), Panama (individual) [CUBA]
COLLOMBEY REFINERY (a.k.a. RAFFINERIE DU SUD-OUEST; a.k.a. RSO), 
Collombey, Valais, Switzerland [LIBYA]
COLOMBIANA DE CERDOS LTDA. (a.k.a. COLCERDOS LTDA.), Km. 3 Via Marsella 
Parque Industrial, Pereira, Colombia; Apartado Aereo 3786, Pereira, 
Colombia; NIT  800018928-0 (Colombia) [SDNT]
COLON, Eduardo (BETANCOURT), Panama (individual) [CUBA]
COLONY TRADING, S.A., Panama [CUBA]
COLOR 89.5 FM STEREO, Calle 15N No. 6N-34 piso 15, Edificio Alcazar, 
Cali, Colombia; Calle 19N No. 2N-29, Cali, Colombia [SDNT]
COLOR STEREO S.A. (see SONAR F.M. S.A.) [SDNT]

[[Page 945]]

COLOR'S S.A. (see SONAR F.M. S.A.) [SDNT]
COMACHO RODRIGUES, Gilberto (see ARELLANO FELIX, Ramon Eduardo) 
(individual) [SDNTK]
COMECARNES LTDA. (see COMERCIALIZADORA DE CARNES LTDA.) [SDNT]
COMEDICAMENTOS S.A., Transversal 29 No. 39-92, Bogota, Colombia; NIT 
830030803-7 (Colombia) [SDNT]
COMERCIAL CIMEX, S.A., Panama [CUBA]
COMERCIAL DE NEGOCIOS CLARIDAD Y CIA., Avenida Caracas No. 59-77 of. 
201A, 401B y 405B, Bogota, Colombia (NIT  800080719-0) [SDNT]
COMERCIAL DE RODAJES Y MAQUINARIA, S.A. (a.k.a. CRYMSA), Jose Lazaro 
Galdeano 6-6, 28016 Madrid, Spain [CUBA]
COMERCIAL IBEROAMERICANA, S.A. (a.k.a. COIBA), Spain [CUBA]
COMERCIAL MURALLA, S.A. (a.k.a. MURALLA, S.A.), Panama City, Panama 
[CUBA]
COMERCIALIZACION DE PRODUCTOS VARIOS (a.k.a. COPROVA; a.k.a. COPROVA 
SARL), Paris, France [CUBA]
COMERCIALIZACION Y FINANCIACION DE AUTOMOTORES S.A. (a.k.a. COMFIAUTOS 
S.A.), Carrera 4 No. 11-33 of. 303, Cali, Colombia; Avenida 2N No. 7N-55 
of. 609, Cali, Colombia; NIT  800086115-1 (Colombia) [SDNT]
COMERCIALIZADORA DE CARNES DEL PACIFICO LTDA., Calle 25 No. 8-54, Cali, 
Colombia [SDNT]
COMERCIALIZADORA DE CARNES LTDA., (a.k.a. COMECARNES LTDA.), Km. 3 Via 
Marsella, Pereira, Colombia; NIT 800076369-0 (Colombia) [SDNT]
COMERCIALIZADORA EXPERTA Y CIA. S. EN C., Avenida Caracas No. 59-77 of. 
201A, 401B, 405B y 407B, Bogota, Colombia (NIT  800075687-3) 
[SDNT]
COMERCIALIZADORA OROBANCA (a.k.a. SOCIR S.A.) (a.k.a. Soucir, S.A.), 
Calle 36A No. 3GN-07 of. 302, Edificio El Parque, Cali, Colombia; Calle 
22N No. 5A-75 of. 702, Edificio Via Veneto, Cali, Colombia [SDNT]
COMFIAUTOS S.A. (see COMERCIALIZACION Y FINANCIACION DE AUTOMOTORES 
S.A.) [SDNT]
COMMITTEE FOR THE SAFETY OF THE ROADS (see KACH) [SDT, FTO]
COMPAGNIE ALGERO-LIBYENNE DE TRANSPORT MARITIME (a.k.a. CALTRAM), 21 Rue 
des Freres Bouadou, Birmandreis, Algiers, Algeria [LIBYA]
COMPAN[tilde]IA ADMINISTRADORA DE VIVIENDA S.A. (f.k.a. INVERSIONES 
GEMINIS S.A.), Carrera 40 No. 6-24 of. 402B, Cali, Colombia; Carrera 41 
No. 6-15/35, Cali, Colombia; NIT  800032419-1 (Colombia) [SDNT]
COMPANIA AGROINVERSORA HENAGRO LTDA., Carrera 1 No. 13-08, Cartago, 
Colombia; Hacienda Coque, Cartago, Colombia; Km. 5 Via Aeropuerto, 
Cartago, Colombia; NIT  800084326-8 (Colombia) [SDNT]
COMPANIA DE COALICION DEL COMERCIO DE COREA, S.A., Panama [NKOREA]
COMPANIA DE IMPORTACION Y EXPORTACION IBERIA (a.k.a. CIMEX), Spain 
[CUBA]
COMPANIA FENIX INTERNACIONAL, S.A., Caracas, Venezuela [CUBA]
COMPANIA PESQUERA INTERNACIONAL, S.A., Panama [CUBA]
COMPRESSED LEATHER BOARD FIBRE PLANT, Tajoura, Libya [LIBYA]
COMTECO LTDA., (a.k.a. COMUNICACIONES TECNICAS DE COLOMBIA LIMITADA), 
Calle 44 Norte No. 2BN-08, Cali, Colombia; Calle 12N No. 9N-58, Cali, 
Colombia; NIT 800113514-1 (Colombia) [SDNT]
COMUNICACIONES TECNICAS DE COLOMBIA LIMITADA (see COMTECO LTDA.) [SDNT]
COMUNICACION VISUAL LTDA., (a.k.a. COMVIS LTDA.), Calle 11 No. 19-44, 
Cali, Colombia [SDNT]
COMVIS LTDA. (see COMUNICACION VISUAL LTDA.) [SDNT]
CONAGE LTDA. (see CONSTRUCCIONES AVENDANO GUTIERREZ Y CIA. LTDA.) [SDNT]
CONCRETOS CALI S.A., Calle 7 No. 82-65, Cali, Colombia [SDNT]
CONE S.A. (see CONSTRUCTORA EL NOGAL S.A.) [SDNT]
CONSTRUCCIONES ASTRO S.A., (f.k.a. SOCIEDAD CONSTRUCTORA LA CASCADA 
S.A.), (f.k.a. CONSTRUCTORA CASCADA), Apartado Aereo 10077, Cali, 
Colombia; Calle 1A 62A-120, Cali, Colombia; Calle 1A 62A-120 B2 108, 
Cali, Colombia; Calle 1A 62A-120 2305, Cali, Colombia; Calle 1A 62A-120 
2418, Cali, Colombia; Calle 1A 62A-120 4114, Cali, Colombia; Calle 1A 
62A-120 6245, Cali, Colombia; Calle 13 3-22 piso 12 y piso 14, Cali, 
Colombia; Carrera 4 No. 12-41 of. 1401, Cali, Colombia; Carrera 4 No. 
12-41 of. 1402, Edificio Seguros Bolivar, Cali, Colombia; Carrera 4 No. 
12-41 of. 1403, Cali, Colombia; Carrera 64 1C-63, Cali, Colombia; 
Carrera 64 1B-83, Cali, Colombia; NIT  890307311-4 [SDNT]
CONSTRUCCIONES AVENDANO GUTIERREZ Y CIA. LTDA., (a.k.a. CONAGE LTDA.), 
Carrera 71 No. 57-07, Bogota, Colombia; NIT 800211560-0 
(Colombia) [SDNT]
CONSTRUCCIONES COLOMBO-ANDINAS LTDA., Carrera 8 No. 16-79 of. 504, 
Bogota, Colombia; Calle 29 No. 36-61, Bogota, Colombia; NIT  
860505252-8 (Colombia) [SDNT]

[[Page 946]]

CONSTRUCTORA ALTOS DEL RETIRO LTDA., Carrera 4 No. 86-88, Bogota, 
Colombia; Carrera 7 No. 72-28 of. 301, Bogota, Colombia; Transversal 3 
No. 85-10 apt. 401 Interior 1, Bogota, Colombia (NIT  
890329139-8) [SDNT]
CONSTRUCTORA CENTRAL DEL VALLE LTDA., (a.k.a. C.C.V. LTDA.), Calle 10 
No. 44A-26, Cali, Colombia; NIT  800144098-1 (Colombia) [SDNT]
CONSTRUCTORA DIMISA LTDA., Calle 70N No. 14-31, Cali, Colombia [SDNT]
CONSTRUCTORA E INMOBILIARIA URVALLE CIA. LTDA., Carrera 9 No. 9-49 of. 
902, Cali, Colombia; NIT 800094652-7 (Colombia) [SDNT]
CONSTRUCTORA EL NOGAL S.A. (f.k.a. CONE S.A.; f.k.a. CONSTRUEXITO S.A.), 
Avenida 2N No. 7N-55 of. 501, Cali, Colombia; Calle 2A No. 65A-110, 
apto. 501 B3, Cali, Colombia; NIT  800051378-9 (Colombia) 
[SDNT]
CONSTRUCTORA GOPEVA LTDA., Avenida 3A No. 51-15, Cali, Colombia [SDNT]
CONSTRUCTORA TREMI LTDA., Carrera 1A Oeste No. 68-75, Cali, Colombia 
[SDNT]
CONSTRUCTORA UNIVERSAL LTDA., Carrera 50 No. 9B-20 of. 07, Cali, 
Colombia; Calle 52 No. 28E-30, Cali, Colombia; NIT 800112051-9 
(Colombia) [SDNT]
CONSTRUEXITO S.A. (a.k.a. CONE S.A.), Avenida 2N No. 7N-55 of. 501, 
Cali, Colombia [SDNT]
CONSTRUEXITO S.A. (see CONSTRUCTORA EL NOGAL S.A.) [SDNT]
CONSTRUVIDA S.A., Avenida 2N No. 7N-55 of. 521, Cali, Colombia; Calle 
70N No. 14-31, Cali, Colombia; Carrera 68 No. 13B-61 of. 104B, Cali, 
Colombia (NIT  800108122-8) [SDNT]
CONSULTORIA EMPRESARIAL ESPECIALIZADA LTDA., Avenida 2N No. 7N-55 of. 
421, Cali, Colombia (NIT  800109042-1) [SDNT]
CONTEX, S.A., Panama [CUBA]
CONTRERAS, Luis C. (see AMEZCUA CONTRERAS, Luis Ignacio) (individual) 
[SDNTK]
COOBAR, Hadi N., Manama, Bahrain (individual) [LIBYA]
COOBAR, Hadi N., Tripoli, Libya (individual) [LIBYA]
COOPERATIVA MULTIACTIVA DE ADMINISTRACION Y MANEJO ADMACOOP (see 
ADMACOOP) [SDNT]
COPSERVIR LTDA. (a.k.a. COOPERATIVA MULTIACTIVA DE EMPLEADOS DE 
DISTRIBUIDORES DE DROGAS COPSERVIR LTDA.; f.k.a. DISTRIBUIDORA DE DROGAS 
LA REBAJA PRINCIPAL S.A.; f.k.a. DISTRIBUIDORA DE DROGAS LA REBAJA S.A.; 
f.k.a. DROGAS LA REBAJA), Calle 4 No. 22-24, Bogota, Colombia; Carrera 
66A No. 53-47 piso 3, Bogota, Colombia; Carrera 99 No. 46A-10 Bdg 6 y 8, 
Bogota, Colombia; Calle 10 No. 4-47 piso 19, Cali, Colombia; Calle 14 
No. 6-66, Cali, Colombia; Calle 18 No. 121-130 Avenida 
Can[tilde]asgordas Pance, Cali, Colombia; Carrera 10 No. 11-71, Cali, 
Colombia; Carrera 7 No. 13-132 piso 4, Cali, Colombia; Carrera 7A No. 
14-25 piso 2, Cali, Colombia (NIT  830011670-3) [SDNT]
COPTRADE COMPANY LIMITED (PHARMACEUTICAL AND CHEMICAL DIVISION), P.O. 
Box 246, Khartoum, Sudan; Port Sudan, Sudan [SUDAN]
CORDOBA VALENCIA, Juan Ramon, c/o BONOMERCAD S.A., Bogota, Colombia; c/o 
PATENTES MARCAS Y REGISTROS S.A., Bogota, Colombia; c/o SHARPER S.A., 
Bogota, Colombia; Cedula No. 19273511 (Colombia) (individual) [SDNT]
CORINTHIA GROUP OF COMPANIES, Head Office, 22, Europa Centre, Floriana, 
Malta [LIBYA]
CORINTHIA PALACE HOTEL COMPANY LIMITED, De Paula Avenue, Attard, Malta 
[LIBYA]
CORPORACION ARGENTINA DE INGENIERIA Y ARQUITECTURA, S.A. (a.k.a. COPIA, 
S.A.), San Martin 323, 4th Floor, Buenos Aires, Argentina [CUBA]
CORPORACION CIMEX, S.A., Panama [CUBA]
CORPORACION DEPORTIVA AMERICA (a.k.a. CLUB AMERICA DE CALI; a.k.a. CLUB 
DEPORTIVO AMERICA), Carrera 56 No. 2-70, Cali, Colombia; Avenida 
Guadalupe No. 2-70, Cali, Colombia; Calle 24N No. 5BN-22, Cali, 
Colombia; Calle 13 Carrera 70, Cali, Colombia; Sede Cascajal, Cali, 
Colombia; Sede Naranjal, Cali, Colombia; NIT  890305773-4 
(Colombia) [SDNT]
CORPORACION IBEROAMERICANA DEL COMERCIO (a.k.a. CIDECO), Spain [CUBA]
CORREA PULGARIN, Ernesto, c/o AGROPECUARIA LA ROBLEDA S.A., Cali, 
Colombia (Cedula No. 2510585 (Colombia)) (individual) [SDNT]
CORTEZ, Oliverio Abril (see ABRIL CORTEZ, Oliverio) (individual) [SDNT]
COSMEPOP (a.k.a. COOPERATIVA DE COSMETICOS Y POPULARES COSMEPOP; f.k.a. 
BLAIMAR; f.k.a. CIA. INTERAMERICANA DE COSMETICOS S.A.; f.k.a. 
COINTERCOS S.A.; f.k.a. LABORATORIOS BLAIMAR DE COLOMBIA S.A.; f.k.a. 
LABORATORIOS BLANCO PHARMA S.A.), Calle 12A No. 27-72, Bogota, Colombia; 
A.A. 55538, Bogota, Colombia; Calle 12B No. 27-37/39, Bogota, Colombia; 
Calle 26 Sur No. 7-30 Este, Bogota, Colombia; Carrera 99 y 100 No. 46A-
10, Bodega 4, Bogota, Colombia; NIT 800251322-5 (Colombia) 
[SDNT]
COTEI, Milan, Italy [CUBA]
CREACIONES DEPORTIVAS WILLINGTON LTDA., Cosmocentro, Local 130, Cali, 
Colombia; Calle 5 No. 25-65, Cali, Colombia [SDNT]
CREDIREBAJA S.A., Calle 16 No. 100-88, Cali, Colombia; Calle 19 No. 2-29 
of. 3001,

[[Page 947]]

Cali, Colombia; NIT 805001030-6 (Colombia) [SDNT]
CRIADERO DE POLLOS EL ROSAL S.A., (f.k.a. INDUSTRIA AVICOLA PALMASECA 
S.A.), Carrera 61 No. 11-58, Cali, Colombia; Carretera Central via 
Aeropuerto Palmaseca, Colombia; NIT  800146749-7 [SDNT]
CRUZ, Antonio Pedro (REYES), Milan, Italy (individual) [CUBA]
CRUZ, Juan M. de la, Director, Banco Nacional de Cuba, Dai-Ichi Bldg. 
6th Floor, 10-2 Nihombashi, 2-chome, Chuo-ku, Tokyo 103, Japan 
(individual) [CUBA]
CRYMSA - ARGENTINA, S.A., Buenos Aires, Argentina [CUBA]
CUARTES MORALES, Juan Carlos, c/o INVERSIONES Y CONSTRUCCIONES VALLE 
S.A., Cali, Colombia (Cedula No. 16757375 (Colombia)) (individual) 
[SDNT]
CUBACANCUN CIGARS AND GIFT SHOPS, Cancun, Mexico [CUBA]
CUBAEXPORT, Spain [CUBA]
CUBAFRUTAS, Spain [CUBA]
CUBAN CIGARS TRADE, Italy [CUBA]
CUBANATUR, Baja California 255, Edificio B. Oficina 103, Condesa 06500, 
Mexico, D.F., Mexico [CUBA]
CUBATABACO, Spain [CUBA]
CUECA V., Miguel A., c/o ADMACOOP, Bogota, Colombia; c/o FARMACOOP, 
Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, 
Colombia; Cedula No. 11386978 (Colombia) (individual) [SDNT]
CUECA VILLARAGA, Hernan, c/o DROGAS LA REBAJA Bogota S.A., Bogota, 
Colombia (Cedula No. 11352426 (Colombia)) (individual) [SDNT]
CUENCA, Ramon Cesar, Panama [CUBA]
CUERO MARTINEZ, Otalvaro, c/o ALKALA ASOCIADOS S.A., Cali, Colombia; c/o 
INVHERESA S.A., Cali, Colombia; Cedula No. 16599979 (Colombia) 
(individual) [SDNT]
CUJAR DE FORERO, Claudia, c/o BONOMERCAD S.A., Bogota, Colombia; c/o 
DISTRIBUIDORA AGROPECUARIA COLOMBIANA S.A., Cali, Colombia; Cedula No. 
20198740 (Colombia) (individual) [SDNT]
CULZAT LUGSIR, Rafael Alberto, Calle 7 Oeste No. 2-228, Cali, Colombia; 
Transversal 3 No. 86-73, Bogota, Colombia; c/o CONSTRUCTORA ALTOS DEL 
RETIRO LTDA., Bogota, Colombia; c/o INVERSIONES CULZAT GUEVARA Y CIA. 
S.C.S., Cali, Colombia (DOB 23 October 1940; Passport No. P551220 
(Colombia); Cedula No. 14962523 (Colombia)) (individual) [SDNT]
CUMEXINT, S.A., 1649 Adolfo Prieto, Colonia del Valle, Mexico City, 
Mexico [CUBA]
CUREF METAL PROCESSING BV, Boezembolcht 23, Rotterdam, Netherlands 
[CUBA]
CVETANOVIC, Ninoslav, General Director, RUDARSKO; Executive of Bor 
Mining (DOB 1940) (individual) [FRYM]
D'CACHE S.A., Calle 25N No. 3AN-39, Cali, Colombia; NIT  
800149284-8 (Colombia) [SDNT]
D'ELCON S.A. (see DISTRIBUIDORA DE ELEMENTOS PARA LA CONSTRUCCION S.A.) 
[SDNT]
DA AFGHANISTAN BANK (a.k.a. BANK OF AFGHANISTAN; a.k.a. CENTRAL BANK OF 
AFGHANISTAN; a.k.a. THE AFGHAN STATE BANK), Ibni Sina Wat, Kabul, 
Afghanistan [TALIBAN]
DACHALA, Marcial Adriano, UNITA Information Secretary; DOB 11 August 
1956; POB Bela Vista, Huambo Province, Angola (individual) [UNITA]
DAGHIR, Ali Ashour, 2 Western Road, Western Green, Thames Ditton, 
Surrey, England (individual) [IRAQ]
DAHAIM, Ayad S., Vali Konagi Cad. No. 10, 80200 Nistantas, Istanbul, 
Turkey (individual) [LIBYA]
DALIPI, Tahir, Member of Political Council of Presevo, Medvedja, and 
Bujanovac (PCPMB) (DOB: 1958; POB: Ilince, Presevo mun., FRY) 
(individual) [BALKANS]
DARKAZANLI, Mamoun, Uhlenhorster Weg 34 11, Hamburg, 22085 Germany (DOB 
4 Aug 1958; POB Aleppo, Syria; Passport No. 1310636262 (Germany)) 
(individual) [SDGT]
DARKAZANLI COMPANY (see MAMOUN DARKAZANLI IMPORT-EXPORT COMPANY) [SDGT]
DARKAZANLI EXPORT-IMPORT SONDERPOSTEN (see MAMOUN DARKAZANLI IMPORT-
EXPORT COMPANY) [SDGT]
DAZA QUIROGA, Hugo Carlos, c/o DISTRIBUIDORA DE DROGAS CONDOR LTDA., 
Bogota, Colombia; c/o DISTRIBUIDORA MYRAMIREZ S.A., Bogota, Colombia; c/
o LABORATORIOS GENERICOS VETERINARIOS, Bogota, Colombia; c/o 
LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia (Cedula No. 
19236485 (Colombia)) (individual) [SDNT]
DAZA RIVERA, Pablo Emilio, c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o 
COLOR 89.5 FM STEREO, Cali, Colombia; c/o DISTRIBUIDORA MYRAMIZEZ S.A., 
Bogota, Colombia; c/o DROGAS LA REBAJA, Cali, Colombia; c/o FARMATODO 
S.A., Bogota, Colombia; c/o INVERSIONES Y CONSTRUCCIONES ABC S.A., Cali, 
Colombia; c/o LABORATORIOS KRESSFOR, Bogota, Colombia; c/o RIONAP 
COMERCIO Y REPRESENTACIONES S.A., Quito, Ecuador; Cedula No. 4904545 
(Colombia) (individual) [SDNT]
DE FRANCE, Naomi A., Cubanatur, Baja California 255, Edificio B., 
Oficina 103, Condesa 06500, Mexico, D.F., Mexico (individual) [CUBA]

[[Page 948]]

DECACOOP S.A. (see BONOMERCAD S.A.) [SDNT]
DECAFARMA S.A., Transversal 29 No. 39-92, Bogota, Colombia; NIT 
 800241240-7 (Colombia) [SDNT]
DELGADO, Antonio (ARSENIO), Panama (individual) [CUBA]
DELGADO GUTIERREZ, Luis Alvaro, c/o TAURA S.A., Cali, Colombia; Cedula 
No. 16718474 (Colombia) (individual) [SDNT]
DELGADO, Jorge Armando, c/o ALFA PHARMA S.A., Bogota, Colombia; c/o 
COINTERCOS S.A., Bogota, Colombia; c/o COPSERVIR LTDA., Bogota, 
Colombia; c/o COSMEPOP, Bogota, Colombia; c/o DISTRIBUIDORA MYRAMIREZ 
S.A., Bogota, Colombia; c/o FARMATODO S.A., Bogota, Colombia; c/o 
LABORATORIOS BLAIMAR DE COLOMBIA S.A., Bogota, Colombia; c/o 
LABORATORIOS BLANCO PHARMA DE COLOMBIA S.A., Bogota, Colombia; c/o 
LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia (Cedula No. 
19354318 (Colombia)) (individual) [SDNT]
DELVEST HOLDING, S.A. (a.k.a. DELVEST HOLDING COMPANY), Case Postale 
236, 10 Bis Rue Du Vieux College 12-11, Geneva, Switzerland [CUBA]
DEMBO, Antonio Sebastiao, Vice-President of UNITA; DOB 25 August 1944; 
POB Nambuangongo, Luanda Province, Angola (individual) [UNITA]
DEMOCRATIC FRONT FOR THE LIBERATION OF PALESTINE (see DEMOCRATIC FRONT 
FOR THE LIBERATION OF PALESTINE--HAWATMEH FACTION) [SDT]
DEMOCRATIC FRONT FOR THE LIBERATION OF PALESTINE--HAWATMEH FACTION 
(a.k.a. DEMOCRATIC FRONT FOR THE LIBERATION OF PALESTINE, a.k.a. DFLP, 
a.k.a. RED STAR FORCES, a.k.a. RED STAR BATTALIONS) [SDT]
DEPOSITO POPULAR DE DROGAS S.A., Carrera 6 No. 24-77, Cali, Colombia 
[SDNT]
DERECHO INTEGRAL Y CIA. LTDA., Calle 22N No. 5A-75 piso 5, Cali, 
Colombia [SDNT]
DESARROLLO DE PROYECTOS, S.A. (a.k.a. DEPROSA, S.A.), Panama City, 
Panama [CUBA]
DESARROLLO INDUSTRIAL CUBANO ESPANOL, S.A. (a.k.a. DICESA), Jose Lazaro 
Caldeano, 6-6, 28016 Madrid, Spain [CUBA]
DESARROLLO INDUSTRIAL CUBANO ESPANOL, S.A. (a.k.a. DICESA), Paseo De La 
Castellana 157, Madrid, Spain [CUBA]
DESARROLLOS COMERCIALES E INDUSTRIALES HENAO GONZALEZ Y CIA. S.C.S., 
Carrera 4A No. 16-04 apt. 303, Cartago, Colombia; NIT  
800160475-2 (Colombia) [SDNT]
DESARROLLOS URBANOS ``DESARROLLAR'' LTDA., (a.k.a. DESARROLLAR LTDA.), 
Calle 74 No. 53-30, Barranquilla, Colombia; NIT  890108104-2 
(Colombia) [SDNT]
DEV SOL (see REVOLUTIONARY PEOPLE'S LIBERATION PARTY/FRONT) [FTO]
DEV SOL ARMED REVOLUTIONARY UNITS (see REVOLUTIONARY PEOPLE'S LIBERATION 
PARTY/FRONT) [FTO]
DEV SOL SDB (see REVOLUTIONARY PEOPLE'S LIBERATION PARTY/FRONT) [FTO]
DEV SOL SILAHLI DEVRIMCI BIRLIKLERI (see REVOLUTIONARY PEOPLE'S 
LIBERATION PARTY/FRONT) [FTO]
DEVRIMCI HALK KURTULUS PARTISI-CEPHESI (see REVOLUTIONARY PEOPLE'S 
LIBERATION PARTY/FRONT) [FTO]
DEVRIMCI SOL (see REVOLUTIONARY PEOPLE'S LIBERATION PARTY/FRONT) [FTO]
DFLP (see DEMOCRATIC FRONT FOR THE LIBERATION OF PALESTINE--HAWATMEH 
FACTION) [SDT]
DHKP/C (see REVOLUTIONARY PEOPLE'S LIBERATION PARTY/FRONT)
DIAGNOSTICENTRO LA GARANTIA (see SERVIAUTOS UNO A 1A LIMITADA) [SDNT]
DIAGROCOL S.A. (see DISTRIBUIDORA AGROPECUARIA COLOMBIANA S.A.) [SDNT]
DIAZ FAJARDO, Ricardo Javier, c/o COPSERVIR LTDA., Bogota, Colombia; c/o 
DISTRIBUIDORA DE DROGAS CONDOR S.A., Bogota, Colombia; c/o LABORATORIOS 
BLANCO PHARMA DE COLOMBIA S.A., Bogota, Colombia; Carrera 45 No. 166-42B 
B apt. 206, Bogota, Colombia (Cedula No. 79119795 (Colombia)) 
(individual) [SDNT]
DIAZ SANCHEZ, Alberto, Carrera 66 No. 5-23, Cali, Colombia; c/o 
CONCRETOS CALI S.A., Cali, Colombia; c/o CONSTRUCTORA DIMISA LTDA., 
Cali, Colombia; c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia (DOB 
January 1956 ; Cedula No. 16259623 (Colombia)) (individual) [SDNT]
DIAZ, Manuel, c/o COMERCIAL DE NEGOCIOS CLARIDAD Y CIA., Bogota, 
Colombia; c/o COMERCIALIZADORA EXPERTA Y CIA. S. EN C., Bogota, 
Colombia; c/o INMOBILIARIA GALES LTDA, Bogota, Colombia (Cedula No. 
396358 (Colombia)) (individual) [SDNT]
DIAZ, Rolando (GONZALEZ), Frankfurt, Germany (individual) [CUBA]
DIAZ, Rosa Isabel, c/o INVHERESA, S.A., Cali, Colombia (individual) 
[SDNT]
DIKUY BOGDIM (see KACH) [SDT, FTO]
DISMERCOOP (a.k.a. COOPERATIVA MULTIACTIVA DE EMPLEADOS DE SUPERMERCADOS 
Y AFINES; f.k.a. DISTRIBUIDORA MIGIL Bogota LTDA.; f.k.a. DISTRIBUIDORA 
MIGIL CALI S.A.; f.k.a. DISTRIBUIDORA MIGIL LTDA.; f.k.a. GRACADAL S.A.; 
f.k.a. MIGIL), Calle 5C No. 41-30, Cali, Colombia; Carrera

[[Page 949]]

26 No. 5B-65, Cali, Colombia; Carrera 30 No. 5-12, Cali, Colombia (NIT 
 805003637-5) [SDNT]
DISTRIBUIDORA AGROPECUARIA COLOMBIANA S.A., (a.k.a. DIAGROCOL S.A.), 
Avenida 3 Bis Norte No. 23C-69, Cali, Colombia; NIT 805011649-7 
(Colombia) [SDNT]
DISTRIBUIDORA DE DROGAS CONDOR LTDA. (a.k.a. CONDOR), Calle 10 No. 32A-
64, Bogota, Colombia; Calle 68 52-05, Bogota, Colombia [SDNT]
DISTRIBUIDORA DE DROGAS LA REBAJA S.A. (a.k.a. DISTRIBUIDORA DE DROGAS 
LA REBAJA PRINCIPAL S.A.; a.k.a. DROGAS LA REBAJA), Carrera 99 No. 46 A-
10 Blg 6 y 8, Bogota, Colombia; Calle 10 No. 4-47 Piso 19, Cali, 
Colombia; Calle 14 6-66, Cali, Colombia; Calle 18 121-130, Cali, 
Colombia; Carrera 10 11-71, Cali, Colombia; Carrera 7 13-132 piso 4, 
Cali, Colombia; Carrera 7A 14-25 piso 2, Cali, Colombia [SDNT]
DISTRIBUIDORA DE ELEMENTOS PARA LA CONSTRUCCION S.A. (a.k.a. D'ELCON 
S.A.), Carrera 23D No. 13B-59, Cali, Colombia; NIT  800117780-2 
(Colombia) [SDNT]
DISTRIBUIDORA MIGIL LTDA. (f.k.a. DISTRIBUIDORA MIGIL Bogota LTDA.; 
a.k.a. DISTRIBUIDORA MIGIL CALI S.A.; a.k.a. MIGIL), Calle 5C 41-30, 
Cali, Colombia; Carrera 26 5B-65, Cali, Colombia; Carrera 30-5-12, Cali, 
Colombia [SDNT]
DISTRIBUIDORA MYRAMIREZ S.A., Calle 33BN No. 2BN-49 apt. 503A, Cali, 
Colombia; Carrera 69A No. 49A-49, Bogota, Colombia [SDNT]
DJAKOVIC, Milan, Director of NIS JUGOPETROL (DOB 5 Oct 37) (individual) 
[FRYM]
DOMINGUEZ GARIBELLO (GARIVELLO), Freddy Orlando, c/o INDUSTRIA AVICOLA 
PALMASECA S.A., Cali, Colombia (Cedula No. 16659634 (Colombia)) 
(individual) [SDNT]
DOMINGUEZ, Carlos, Vinales Tours, Oaxaca 80, Roma, Mexico, D.F., Mexico 
(individual) [CUBA]
DOMINGUEZ, Fernando, c/o DISMERCOOP, Cali, Colombia (Cedula No. 16701778 
(Colombia)) (individual) [SDNT]
DOMINION INTERNATIONAL, England [IRAQ]
DONNEYS GONZALEZ, Federico, c/o DISTRIBUIDORA DE DROGAS CONDOR LTDA., 
Bogota, Colombia (individual) [SDNT]
DOOLEY, Michael P., Panama (individual) [CUBA]
DOV (see KACH) [SDT, FTO]
DROGAS LA REBAJA BARRANQUILLA S.A., Avenida Pedro Heredia, Barranquilla, 
Colombia; Local Cerete, Barranquilla, Colombia; Local de Riohacha, 
Barranquilla, Colombia [SDNT]
DROGAS LA REBAJA BUCARAMANGA S.A., Local No. 1, Bucaramanga, Colombia; 
Local No. 1, Cucuta, Colombia; Local No. 2, Cucuta, Colombia; Local No. 
6, Cucuta, Colombia; Local No. 7, Cucuta, Colombia; Local No. 9, Cucuta, 
Colombia; Local 201, Valledupar, Colombia [SDNT]
DROGAS LA REBAJA CALI S.A., Barrio Siloe, Cali, Colombia; Calle 13 
6-85, Cali, Colombia; Calle 3 4-02 B/Ventura, Cali, 
Colombia; Local Comuneros No. 20, Cali, Colombia; Local del Poblado No. 
17, Cali, Colombia; Santander de Quilichao, Cali, Colombia [SDNT]
DROGAS LA REBAJA NEIVA S.A., Neiva, Colombia [SDNT]
DROGAS LA REBAJA PASTO S.A., Calle 18 26-40, Pasto, Colombia; 
Local No. 6, Pasto, Colombia; Local No. 13, Puerto Asis, Colombia [SDNT]
DROGAS LA REBAJA PEREIRA S.A., Local Cajamarca, Pereira, Colombia; Local 
Dos Quebradas, Pereira, Colombia; Local la Virginia, Pereira, Colombia; 
Local Santa Rosa de Cabal, Pereira, Colombia [SDNT]
DROGUERIA FARMAHOGAR (see FARMAHOGAR) [SDNT]
DROMARCA Y CIA. S.C.S., Calle 39 Bis A No. 27-169, Bogota, Colombia; 
Calle 12B No. 28-58, Bogota, Colombia; NIT 800225556-1 
(Colombia) [SDNT]
DRY BATTERY PLANT, Libya [LIBYA]
DUQUE BOTERO, Jorge Alirio, Calle 5 No. 5A-49, Buenaventura, Colombia; 
c/o INDUSTRIA DE PESCA SOBRE EL PACIFICO S.A., Buenaventura, Colombia; 
Cedula No. 616084 (Colombia) (individual) [SDNT]
DUQUE M., Carmen Lucia, c/o COMEDICAMENTOS S.A., Bogota, Colombia; c/o 
GLAJAN S.A., Bogota, Colombia; c/o PATENTES MARCAS Y REGISTROS S.A., 
Bogota, Colombia; Cedula No. 51988916 (Colombia) (individual) [SDNT]
DUQUE MARTINEZ, Maria Consuelo, c/o FARMACOOP, Bogota, Colombia; c/o 
LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia (Cedula No. 
41716296 (Colombia)) (individual) [SDNT]
DUQUE, Carlos Jaen, Panama (individual) [CUBA]
DURAND PROPERTIES LIMITED, Haven Court, 5 Library Ramp, Gibraltar [IRAQ]
DURDA, Abu Zayd Umar, Assistant Secretary of Libya's General People's 
Congress, Libya (individual) [LIBYA]
DURGACO, London, England [CUBA]
DUTY FREE SHOPS CORPORATION, P.O. Box 1789, Khartoum, Sudan [SUDAN]
EAST ISLAND SHIPPING CO. LTD., c/o EMPRESA DE NAVEGACION MAMBISA, 
Apartado 543, San Ignacio 104, Havana, Cuba [CUBA]
ECHEVERRI, German, Panama (individual) [CUBA]
ECHEVERRY HERRERA, Hernando,(a.k.a. ECHEVERRI HERRERA, Hernando), c/o 
INDUSTRIA DE PESCA SOBRE EL PACIFICO S.A., Buenaventura, Colombia;

[[Page 950]]

Cedula No. 1625525 (Colombia) (individual) [SDNT]
ECHEVERRY TRUJILLO, Martha Lucia, c/o CORPORACION DEPORTIVA AMERICA, 
Cali, Colombia; c/o M C M Y CIA. LTDA., Cali, Colombia; c/o M.O.C. 
ECHEVERRY HERMANOS LTDA., Cali, Colombia; c/o REVISTA DEL AMERICA LTDA., 
Cali, Colombia; Cedula No. 31151067 (Colombia) (individual) [SDNT]
EDICIONES CUBANAS, Spain [CUBA]
EDIFICACIONES DEL CARIBE LTDA., (a.k.a. EDIFICAR), Calle 74 No. 53-30, 
Barranquilla, Colombia; NIT  890108103-5 (Colombia) [SDNT]
EDYJU, S.A., Panama [CUBA]
EGGLETON, Wilfred, Director General, Cubanatur, Baja California 255, 
Edificio B., Oficina 103, Condesa 06500, Mexico, D.F., Mexico 
(individual) [CUBA]
EGP (see SHINING PATH) [FTO]
EGYPTIAN AL-GAMA'AT AL-ISLAMIYYA (see GAMA'A AL-ISLAMIYYA) [SDT, FTO]
EGYPTIAN AL-JIHAD (see AL-JIHAD) [SDT, FTO]
EGYPTIAN AL-JIHAD (see AL-JIHAD) [SDT] [FTO] [SDGT]
EGYPTIAN ISLAMIC JIHAD (see AL-JIHAD) [SDT, FTO]
EGYPTIAN ISLAMIC JIHAD (see AL-JIHAD) [SDT] [FTO] [SDGT]
EJERCITO DE LIBERACION NACIONAL (see NATIONAL LIBERATION ARMY) [FTO]
EJERCITO GUERRILLERO POPULAR (PEOPLE'S GUERRILLA ARMY) (see SHINING 
PATH) [FTO]
EJERCITO POPULAR DE LIBERACION (PEOPLE'S LIBERATION ARMY) (see SHINING 
PATH) [FTO]
EL AMIR, Bahjat Fadel, 5 Rowsham Dell, Gifford Park, Milton Keynes Bucks 
MK14 5JS, England (DOB 1 January 1942) (individual) [LIBYA]
EL BADRI, Abdullah Salim, Tripoli, Libya (individual) [LIBYA]
EL BAIDA ROADS AND UTILITIES CO., P.O. Box 232/561, El Baida, Libya 
[LIBYA]
EL FATAH AGENCY, P.O. Box 233, Tripoli, Libya [LIBYA]
EL FERJANI, Abdalla M., Libya (DOB 3 January 1952) (individual) [LIBYA]
EL-FIGHI, El Hadi M., Jamal Abdulnasser Street, P.O. Box 262, 
Nouakchott, Mauritania (individual) [LIBYA]
EL-FIGHI, El Hadi M., P.O. Box 1114, Diplomatic Area, Manama, Bahrain 
(individual) [LIBYA]
EL GHRABLI, Abdudayem, Libya (individual) [LIBYA]
EL-HOORIE, Ali Saed Bin Ali (a.k.a. AL-HOURI, Ali Saed Bin Ali; a.k.a. 
EL-HOURI, Ali Saed Bin Ali) (DOB 10 Jul 1965; alt. DOB 11 Jul 1965; POB 
El Dibabiya, Saudi Arabia; Citizen Saudi Arabia) (individual) [SDGT]
EL-HOURI, Ali Saed Bin Ali (see EL-HOORIE, Ali Saed Bin Ali) 
(individual) [SDGT]
EL HUWEIJ, Mohamed A., Tripoli, Libya (individual) [LIBYA]
EL KEBIR, Mahmoud I., Libya (DOB 24 December 1948) (individual) [LIBYA]
EL KHABIR, Abu Hafs el Masry (see ATEF, Muhammad) [SDT]
EL KHABIR, Abu Hafs el Masry (see ATIF, Muhammad) (individual) [SDT] 
[SDGT]
EL-KHALLAS, Kamel, Vali Konagi Cad. No. 10, 80200 Nistantas, Istanbul, 
Turkey (individual) [LIBYA]
EL-KHOJA, Mustapha Ali, Saied Ibnu Zeid, Tripoli, Libya (individual) 
[LIBYA]
EL-KIB, Abdullatif, Manama, Bahrain (individual) [LIBYA]
EL-KIB, Abdullatif, Tripoli, Libya (individual) [LIBYA]
EL MAMOURA FOOD COMPANY, Benghazi, Libya; P.O. Box 15058, Tripoli, 
Libya; Tripoli, Libya [LIBYA]
EL NAILI, Smeida El-Hosh, 21 Redlands Drive, Loughton, Milton Keynes 
Bucks MK5 8EJ, England (DOB 19 February 1944) (individual) [LIBYA]
EL PASO LTDA. (see MIRALUNA LTDA.) [SDNT]
ELA (see REVOLUTIONARY PEOPLE'S STRUGGLE) [FTO]
ELBISHY, Moustafa Ali (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
ELECTRIC WIRES AND CABLES PLANT, Libya [LIBYA]
ELECTRICAL CONSTRUCTION CO., Dehli, India; Sebha, India; Benghazi, 
Libya; Misurata, Libya; P.O. Box 5309, Tripoli, Libya [LIBYA]
ELKHALEGE GENERAL CONSTRUCTION CO., P.O. Box 445, Agedabia, Libya; 
Benghazi Office, Benghazi, Libya; Sirti Office, P.O. Box 105, Sirti, 
Libya [LIBYA]
ELLALAN FORCE (see LIBERATION TIGERS OF TAMIL EELAM) [FTO]
ELN (see NATIONAL LIBERATION ARMY) [FTO]
ELSHANI, Gafur, Member of Popular Movement of Kosovo (LPK) (DOB: 29 Mar 
1958; POB: Suva Reka, FRY) (individual) [BALKANS]
EMIRATES AND SUDAN INVESTMENT COMPANY LIMITED, P.O. Box 7036, Khartoum, 
Sudan; Port Sudan, Sudan [SUDAN]
EMNUHOOD EST. FOR CONTRACTS, P.O. Box 1380, Benghazi, Libya [LIBYA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), 1 Place Ville 
Marie, Suite 3431, Montreal, Canada [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), 24 Rue Du Quatre 
Septembre, Paris, France [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), 32 Main Street, 
Georgetown, Guyana [CUBA]

[[Page 951]]

EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Belas Airport, 
Luanda, Angola [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), c/o Anglo-Caribbean 
Shipping Co. Ltd., Ibex House, The Minories, London EC3N 1DY, England 
[CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Calle 29 y Avda 
Justo Arosemena, Panama City, Panama [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Corrientes 545 
Primer Piso, Buenos Aires, Argentina [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Dobrininskaya No. 
7, Sec 5, Moscow, Russia [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Frankfurter TOR 8-
A, Berlin, Germany [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Grantley Adams 
Airport, Christ Church, Barbados [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Madrid, Spain 
[CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Melchor Ocampo 469, 
5DF Mexico City, Mexico [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Norman Manley 
International Airport, Kingston, Jamaica [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Parizska 17, 
Prague, Czech Republic [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Paseo de la 
Republica 126, Lima, Peru [CUBA]
EMPRESA CUBANA DE AVIACION (a.k.a. CUBANA AIRLINES), Piarco Airport, 
Port au Prince, Haiti [CUBA]
EMPRESA CUBANA DE PESCADOS Y MARISCOS (a.k.a. CARIBBEAN EXPORT 
ENTERPRISE; a.k.a. CARIBEX), Moscow, Russia [CUBA]
EMPRESA CUBANA DE PESCADOS Y MARISCOS (a.k.a. CARIBBEAN EXPORT 
ENTERPRISE; a.k.a. CARIBEX), Milan, Italy [CUBA]
EMPRESA CUBANA DE PESCADOS Y MARISCOS (a.k.a. CARIBBEAN EXPORT 
ENTERPRISE; a.k.a. CARIBEX), Tokyo, Japan [CUBA]
EMPRESA CUBANA DE PESCADOS Y MARISCOS (a.k.a. CARIBBEAN EXPORT 
ENTERPRISE; a.k.a. CARIBEX), Downsview, Ontario, Canada [CUBA]
EMPRESA CUBANA DE PESCADOS Y MARISCOS (a.k.a. CARIBBEAN EXPORT 
ENTERPRISE; a.k.a. CARIBEX), Paris, France [CUBA]
EMPRESA CUBANA DE PESCADOS Y MARISCOS (a.k.a. CARIBBEAN EXPORT 
ENTERPRISE; a.k.a. CARIBEX), Madrid, Spain [CUBA]
EMPRESA CUBANA DE PESCADOS Y MARISCOS (a.k.a. CARIBBEAN EXPORT 
ENTERPRISE; a.k.a. CARIBEX), Cologne, Germany [CUBA]
EMPRESA DE TURISMO NACIONAL Y INTERNACIONAL (a.k.a. CUBATUR), Buenos 
Aires, Argentina [CUBA]
ENDSHIRE EXPORT MARKETING, England [IRAQ]
ENGINEERING EQUIPMENT COMPANY, c/o ENGINEERING EQUIPMENT CORPORATION, 
P.O. Box 97, Khartoum, Sudan [SUDAN]
ENGINEERING EQUIPMENT CORPORATION, P.O. Box 97, Khartoum, Sudan [SUDAN]
EPAMAC SHIPPING CO. LTD., c/o EMPRESA DE NAVEGACION MAMBISA, Apartado 
543, San Ignacio 104, Havana, Cuba [CUBA]
EPANASTATIKI ORGANOSI 17 NOEMVRI (see REVOLUTIONARY ORGANIZATION 17 
NOVEMBER) [FTO]
EPANASTATIKOS LAIKOS AGONAS (see REVOLUTIONARY PEOPLE'S STRUGGLE) [FTO]
EPL (see SHINING PATH) [FTO]
ESCOBAR BUITRAGO, Walter, c/o INMOBILIARIA BOLIVAR LTDA., Cali, 
Colombia; c/o SERVIAUTOS UNO A 1A LIMITADA, Cali, Colombia; DOB 18 Feb 
1971; Cedula No. 16785833 (Colombia) (individual) [SDNT]
ESPITIA PERILLA, Ruben Nowerfaby, c/o ADMACOOP, Bogota, Colombia; c/o 
DROMARCA Y CIA. S.C.S., Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE 
COLOMBIA S.A., Bogota, Colombia; Cedula No. 79280623 (Colombia) 
(individual) [SDNT]
ESTRADA RAMIREZ, Jose Arnoldo, Calle 39 No. 1H-31, Cali, Colombia; 
Carrera 1H No. 39-56, Cali, Colombia; c/o CLINICA ESPECIALIZADA DEL 
VALLE S.A., Cali, Colombia; c/o CONSTRUCTORA CENTRAL DEL VALLE LTDA., 
Cali, Colombia; c/o HIELO CRISTAL Y REFRIGERACION LTDA., Cali, Colombia; 
c/o INVERSIONES JAER LTDA., Cali, Colombia; c/o INVERSIONES SAN JOSE 
LTDA., Cali, Colombia; c/o MARIN ESTRADA Y CIA S. EN C.S., Cali, 
Colombia; c/o PARQUE INDUSTRIAL LAS DELICIAS LTDA., Cali, Colombia; DOB 
14 July 1947; Cedula No. 16200018 (Colombia) (individual) [SDNT]
ETA (see BASQUE FATHERLAND AND LIBERTY) [FTO]
ETCO INTERNATIONAL COMMODITIES LTD., Devonshire House, 1 Devonshire 
Street, London, England [CUBA]
ETCO INTERNATIONAL COMPANY, LIMITED, Kawabe Building, 1-5 Kanda Nishiki-
Cho, Chiyoda-Ku, Tokyo, Japan [CUBA]
EUROMAC EUROPEAN MANUFACTURER CENTER SRL, Via Ampere 5, 20052 Monza, 
Italy [IRAQ]

[[Page 952]]

EUROMAC TRANSPORTI INTERNATIONAL SRL, Via Ampere 5, 20052 Monza, Italy 
[IRAQ]
EUROMAC, LTD., 4 Bishops Avenue, Northwood, Middlesex, England [IRAQ]
EUZKADI TA ASKATASUNA (see BASQUE FATHERLAND AND LIBERTY) [FTO]
EXAGAN (see EXPLOTACIONES AGRICOLAS Y GANADERAS LA LORENA S.C.S.) [SDNT]
EXPLORATION AND PRODUCTION AUTHORITY (SUDAN), Kuwait Building, Nile 
Avenue, Khartoum, Sudan; P.O. Box 2986, Khartoum, Sudan [SUDAN]
EXPORT CAFE LTDA., Carrera 7 No. 11-22 of. 413, Cali, Colombia [SDNT]
EXPLOTACIONES AGRICOLAS Y GANADERAS LA LORENA S.C.S., (a.k.a. EXAGAN), 
Calle 5 No. 22-39 of. 205, Cali, Colombia; Calle 52 No. 28E-30, Cali, 
Colombia; NIT 800083192-3 (Colombia) [SDNT]
EXPORTADORA DEL CARIBE, Medira, Mexico [CUBA]
F.A. PETROLI S.P.A., Italy [LIBYA]
FABRO INVESTMENT, INC., Panama [CUBA]
FACOBATA, Panama [CUBA]
FADHIL, Mustafa Mohamed (a.k.a. ELBISHY, Moustafa Ali; a.k.a. MOHAMMED, 
Mustafa; a.k.a. FAZUL, Mustafa; a.k.a. HUSSEIN; a.k.a. ALI, Hassan; 
a.k.a. FADIL, Mustafa Muhamad; a.k.a. AL MASRI, Abd Al Wakil; a.k.a. 
ANIS, Abu; a.k.a. YUSSRR, Abu; a.k.a. ALI, Hassan; a.k.a. MAN, Nu; 
a.k.a. KHALID; a.k.a. JIHAD, Abu; a.k.a. AL-NUBI, Abu) (DOB 23 Jun 1976; 
POB Cairo, Egypt; Citizen Egypt; alt. Citizen Kenya; Kenyan ID No. 
12773667; Serial No. 201735161) (individual) [SDGT]
FADIL, Mustafa Muhamad (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
FADLALLAH, Shaykh Muhammad Husayn, Leading Ideological Figure of 
HIZBALLAH (DOB 1938 or 1936, POB Najf Al Ashraf (Najaf), Iraq) 
(individual) [SDT]
FALCON SYSTEMS, England [IRAQ]
FAMESA INTERNATIONAL, S.A., Panama [CUBA]
FARAG, Hamdi Ahmad (see AHMAD, Tariq Anwar al-Sayyid) (individual) 
[SDGT]
FARAJ, Samal Majid, Minister of Planning, Iraq (individual) [IRAQ]
FARALLONES STEREO 91.5 FM, Calle 15N No. 6N-34 piso 15, Edificio 
Alcazar, Cali, Colombia [SDNT]
FARC (see REVOLUTIONARY ARMED FORCES OF COLOMBIA) [FTO]
FARMACOOP (a.k.a. COOPERATIVA MULTIACTIVA DE COMERCIALIZACION Y 
SERVICIOS FARMACOOP; f.k.a. LABORATORIOS KRESSFOR DE COLOMBIA S.A.), 
A.A. 18491, Bogota, Colombia; Calle 16 No. 28A-51, Bogota, Colombia; 
Calle 16 No. 28A-57, Bogota, Colombia; Calle 17A No. 28-43, Bogota, 
Colombia; Calle 17A No. 28A-43, Bogota, Colombia (NIT  
830010878-3) [SDNT]
FARMAHOGAR (a.k.a. DROGUERIA FARMAHOGAR; a.k.a. FARMAHOGAR COPSERVIR 
19), Carrera 7 No. 118-38, Bogota, Colombia; Avenida 7 No. 118-46, 
Bogota, Colombia; NIT  830011670-3 (Colombia) [SDNT]
FARMAHOGAR COPSERVIR 19 (see FARMAHOGAR) [SDNT]
FARMATODO S.A., Diagonal 17 No. 28A-39, Bogota, Colombia; Diagonal 17 
No. 28A-80, Bogota, Colombia [SDNT]
FARMERS BANK FOR INVESTMENT & RURAL DEVELOPMENT, Khartoum, Sudan [SUDAN]
FARTRADE HOLDINGS S.A., Switzerland [IRAQ]
FATAH REVOLUTIONARY COUNCIL (see ABU NIDAL ORGANIZATION) [SDT, FTO]
FATHI, Amr Al-Fatih (see AHMAD, Tariq Anwar al-Sayyid) (individual) 
[SDGT]
FATTAH, Jum'a Abdul, P.O. Box 1318, Amman, Jordan (individual) [IRAQ]
FAZANI, Juma, Secretary of Arab Unity of the Government of Libya, Libya 
(individual) [LIBYA]
FAZUL, Abdalla (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
FAZUL, Abdallah (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
FAZUL, Abdallah Mohammed (see MOHAMMED, Fazul Abdullah) (individual) 
[SDGT]
FAZUL, Haroon (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
FAZUL, Harun (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
FAZUL, Mustafa (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
FERJANI, A.S.A., Tripoli, Libya (individual) [LIBYA]
FERNANDEZ LUNA, Tiberio, c/o COPSERVIR LTDA., Bogota, Colombia; c/o 
DISTRIBUIDORA DE DROGAS CONDOR S.A., Bogota, Colombia; c/o LABORATORIOS 
BLANCO PHARMA DE COLOMBIA S.A., Bogota, Colombia (Cedula No. 93286690 
(Colombia)) (individual) [SDNT]
FIDUSER LTDA., Calle 12A No. 27-72, Bogota, Colombia; NIT 
830013160-8 (Colombia) [SDNT]
FIESTA STEREO 91.5 F.M. (see SONAR F.M. E.U. DIETER MURRLE) [SDNT]
FIGUEROA DE BRUSATIN, Dacier, c/o INVERSIONES EL GRAN CRISOL LTDA., 
Cali, Colombia; c/o W. HERRERA Y CIA. S. EN C., Cali, Colombia; Cedula 
No. 29076093 (Colombia) (individual) [SDNT]
FLEXOEMPAQUES LTDA. (f.k.a. PLASTICOS CONDOR LTDA.), Carrera 13 No. 16-
62, Cali, Colombia (NIT  800044167-2) [SDNT]
FLIGHT DRAGON SHIPPING LTD., c/o ANGLO-CARIBBEAN SHIPPING CO. LTD., 4th 
Floor, South Phase 2, South Quay Plaza II, 183, March Wall, London, 
England [CUBA]

[[Page 953]]

FOLLOWERS OF THE PROPHET MUHAMMED (see HIZBALLAH) [SDT, FTO]
FOMEQUE BLANCO, Amparo, Mz. 21 Casa 5 Barrio San Fernando, Pereira, 
Colombia; c/o INDUSTRIA DE PESCA SOBRE EL PACIFICO S.A., Buenaventura, 
Colombia; Cedula No. 31206092 (Colombia) (individual) [SDNT]
FOMEQUE CAMPO, Deicy,(a.k.a. FOMEQUE CAMPO, Daysy), Avenida 4N No. 10N-
100, Cali, Colombia; c/o INDUSTRIA DE PESCA SOBRE EL PACIFICO S.A., 
Buenaventura, Colombia; Cedula No. 38650034 (Colombia) (individual) 
[SDNT]
FOOD INDUSTRIES CORPORATION, P.O. Box 2341, Khartoum, Sudan [SUDAN]
``FOOPIE'' (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
FOOTWEAR PLANT, Misurata, Libya [LIBYA]
FOREFRONT OF THE IDEA (see KACH) [SDT, FTO]
FORERO FERNANDEZ, Alberto Mario, c/o HAPPY DAYS S. de H., Barranquilla, 
Colombia; Cedula No. 8715143 (Colombia) (individual) [SDNT]
FRIENDSHIP SPINNING FACTORY, Hassaheisa, Sudan [SUDAN]
FRUNI TRADING CO., c/o MELFI MARINE CORPORATION S.A., Oficina 7, 
Edificio Senorial, Calle 50, Apartado 31, Panama City 5, Panama [CUBA]
FUENTES, Fernando (COBA), Cozumel, Mexico (individual) [CUBA]
FUERZAS ARMADAS REVOLUCIONARIAS DE COLOMBIA (see REVOLUTIONARY ARMED 
FORCES OF COLOMBIA) [FTO]
``FUPI'' (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
FUSTAR, Dragan, (ICTY indictee, Bosnian Serb) (DOB 28 Mar 56) 
(individual) [FRYM]
GAJIC-MILOSEVIC, Milica, daughter-in-law of Slobodan Milosevic (DOB 
1970) (individual) [FRYM]
GALAPAGOS S.A., Calle 24N No. 6AN-15, Cali, Colombia; Carrera 115 No. 
16B-121, Cali, Colombia; NIT  800183712-2 (Colombia) [SDNT]
GALAX TRADING CO., LTD. (a.k.a. GALAX INC.), 5250 Ferrier Street, 
Montreal, Quebec, Canada [CUBA]
GALINDO HERRERA, Diana Paola, c/o COMERCIAL DE NEGOCIOS CLARIDAD Y CIA., 
Bogota, Colombia; c/o COMERCIALIZADORA EXPERTA Y CIA. S. EN C., Bogota, 
Colombia; c/o INMOBILIARIA GALES LTDA., Bogota, Colombia; c/o 
AGROPECUARIA Y REFORESTADORA HERREBE LTDA., Cali, Colombia; c/o 
CONSTRUEXITO S.A., Cali, Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., 
Cali, Colombia; c/o INVERSIONES HERREBE LTDA., Cali, Colombia 
(individual) [SDNT]
GALINDO HERRERA, Diego Alexander, c/o COMERCIAL DE NEGOCIOS CLARIDAD Y 
CIA., Bogota, Colombia; c/o COMERCIALIZADORA EXPERTA Y CIA. S. EN C., 
Bogota, Colombia; c/o INMOBILIARIA GALES LTDA., Bogota, Colombia; c/o 
AGROPECUARIA Y REFORESTADORA HERREBE LTDA., Cali, Colombia; c/o 
CONSTRUEXITO S.A., Cali, Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., 
Cali, Colombia; c/o INVERSIONES HERREBE LTDA., Cali, Colombia 
(individual) [SDNT]
GALINDO, Gilmer Antonio (a.k.a. GUZMAN TRUJILLO, Carlos Arturo), c/o 
COMERCIAL DE NEGOCIOS CLARIDAD Y CIA., Bogota, Colombia; c/o 
COMERCIALIZADORA EXPERTA Y CIA. S. EN C., Bogota, Colombia; c/o 
INMOBILIARIA GALES LTDA., Bogota, Colombia; c/o CONSTRUEXITO S.A., Cali, 
Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, Colombia; Carrera 
4C No. 53-40 apt. 307, Cali, Colombia (Cedula No. 16245188 (Colombia)) 
(individual) [SDNT]
GALLEGO BERRIO, Elizabeth, c/o CONCRETOS CALI S.A., Cali, Colombia 
(Cedula No. 34529671 (Colombia)) (individual) [SDNT]
GALLEGO SANCHEZ, Isaac, c/o DISMERCOOP, Cali, Colombia; c/o GRACADAL 
S.A., Cali, Colombia (Cedula No. 6457399 (Colombia)) (individual) [SDNT]
GALLEGO SOSSA, Rosa Esperanza, Calle 24AN No. 42BN-61, Cali, Colombia; 
c/o CONCRETOS CALI S.A., Cali, Colombia; c/o CONSTRUCTORA DIMISA LTDA., 
Cali, Colombia (Cedula No. 43059188 (Colombia)) (individual) [SDNT]
GALLO IMPORT, Panama [CUBA]
GALOVIC, Predrag, General Manager of Jugobanka AD; ex-Assistant Minister 
for the Economy, Federal Republic of Yugoslavia (individual) [FRYM]
GAMA'A AL-ISLAMIYYA (a.k.a. ISLAMIC GROUP; a.k.a. IG; a.k.a. AL-GAMA'AT; 
a.k.a. ISLAMIC GAMA'AT; a.k.a. EGYPTIAN AL-GAMA'AT AL-ISLAMIYYA; a.k.a. 
GI) [SDT, FTO]
GAMBA SANCHEZ, Fernando, c/o DISTRIBUIDORA DE DROGAS CONDOR S.A., 
Bogota, Colombia (Cedula No. 19494919 (Colombia)) (individual) [SDNT]
GAMOENNS CONTRACTS AND UTILITIES EST., P.O. Box 3038, Benghazi, Libya 
[LIBYA]
GANADERA LTDA. (a.k.a. GANADERIA), Carrera 4 12-41 piso 15, Edificio 
Seguros Bolivar, Cali, Colombia [SDNT]
GANADERIAS DEL VALLE S.A., Avenida 2FN No. 24N-92, Cali, Colombia; 
Carrera 61 No. 11-58, Cali, Colombia; Carrera 83 No. 6-50, Cali, 
Colombia (NIT  800119808-9) [SDNT]
GARABULLI FODDER PLANT, Libya [LIBYA]

[[Page 954]]

GARAVITO, Doris Amelia, c/o GALAPAGOS S.A., Cali, Colombia; Cedula No. 
31233463 (Colombia) (individual) [SDNT]
GARBAYA, Ahmed (see IZZ-AL-DIN, Hasan) (individual) [SDGT]
GARCES VARGAS, Elmo, c/o INVERSIONES BETANIA LTDA., Cali, Colombia; c/o 
INVERSIONES EL PEN[tilde]ON S.A., Cali, Colombia; c/o SOCOVALLE, Cali, 
Colombia (Cedula No. 16581793 (Colombia)) (individual) [SDNT]
GARCIA MANTILLA, Edgar Alberto (see GARCIA MONTILLA, Edgar Alberto) 
(individual) [SDNT]
GARCIA MOGAR, Edgar (see GARCIA MONTILLA, Edgar Alberto) (individual) 
[SDNT]
GARCIA MONTELLA, Edgar Alberto (see GARCIA MONTILLA, Edgar Alberto) 
(individual) [SDNT]
GARCIA MONTILLA, Edgar Alberto (a.k.a. GARCIA MANTILLA, Edgar Alberto; 
a.k.a. GARCIA MOGAR, Edgar; a.k.a. GARCIA MONTELLA, Edgar Alberto), c/o 
COMERCIALIZACION Y FINANCIACION DE AUTOMOTORES S.A., Cali, Colombia; c/o 
LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia; c/o REVISTA 
DEL AMERICA LTDA., Cali, Colombia; DOB 28 November 1946; Passports 
AC365457 (Colombia), PE008603 (Colombia), PO564495 (Colombia), AA294885 
(Colombia); Cedula No. 14936775 (Colombia) (individual) [SDNT]
GARCIA PIZARRO, Gentil Velez, c/o GALAPAGOS S.A., Cali, Colombia; Cedula 
No. 6616986 (Colombia) (individual) [SDNT]
GARCIA ROMERO, Audra Yamile, c/o ALKALA ASOCIADOS S.A., Cali, Colombia; 
c/o INVHERESA S.A., Cali, Colombia; Cedula No. 66765096 (Colombia) 
(individual) [SDNT]
GARCIA VARELA, Luis Fernando, c/o TAURA S.A., Cali, Colombia; Cedula No. 
16282923 (Colombia) (individual) [SDNT]
GARCIA, Daniel, Manager, Promociones Artisticas (PROARTE), Avenida 
Insurgentes Sur No. 421, Bloque B Despacho 404, C.P. 06100, Mexico, 
D.F., Mexico (individual) [CUBA]
GARCIA, Freddy (Fredy), c/o COMERCIALIZADORA INTERNACIONAL VALLE DE ORO 
S.A., Cali, Colombia (individual) [SDNT]
GARZON HERNANDEZ, Rodrigo, c/o DROGAS LA REBAJA, Cali, Colombia 
(individual) [SDNT]
GARZON RESTREPO, Juan Leonardo, c/o ALFA PHARMA S.A., Bogota, Colombia; 
c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o FARMATODO S.A., Bogota, 
Colombia; c/o LABORATORIOS GENERICOS VETERINARIOS DE COLOMBIA S.A., 
Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, 
Colombia; c/o PENTA PHARMA DE COLOMBIA S.A., Bogota, Colombia; c/o 
PENTACOOP LTDA., Bogota, Colombia; c/o VALORES MOBILIARIOS DE OCCIDENTE 
S.A., Bogota, Colombia; Diagonal 53 No. 38A-20 apt. 103, Bogota, 
Colombia; c/o DISTRIBUIDORA MYRAMIREZ S.A., Cali, Colombia; c/o DROGAS 
LA REBAJA, Cali, Colombia; c/o INVERSIONES ARA LTDA., Cali, Colombia; 
Carrera 7P No. 76-90, Cali, Colombia (DOB 14 January 1962; Cedula No. 
16663709 (Colombia)) (individual) [SDNT]
GASHI, Sabit, Member of National Movement for the Liberation of Kosovo 
(LKCK) (DOB: 30 Dec 1967; POB: Suva Reka, FRY) (individual) [BALKANS]
GATO, Armindo Lukamba ``Gato'' (see PAULO, Armindo Lucas ``Gato'') 
(individual) [UNITA]
GATO, Paulo Lukamba (see PAULO, Armindo Lucas ``Gato'') (individual) 
[UNITA]
GAVIRIA POSADA, Gilberto, c/o ALFA PHARMA S.A., Bogota, Colombia; c/o 
BLANCO PHARMA S.A., Bogota, Colombia (Cedula No. 16593492 (Colombia)) 
(individual) [SDNT]
GEMEX AUSSENHANDELS GMBH, Hanauer Landstr. 126-128, D-6000, Frankfurt am 
Main 1, Germany [CUBA]
GENERAL ARAB AFRICAN ENTERPRISE (a.k.a. GAAC; a.k.a. GAAE; a.k.a. 
GENERAL ARAB AFRICAN COMPANY), P.O. box 8059, 219 Mohammed El Megarief 
Street, Tripoli, Libya [LIBYA]
GENERAL ARAB AFRICAN ENTERPRISE (a.k.a. GAAC; a.k.a. GAAE; a.k.a. 
GENERAL ARAB AFRICAN COMPANY), Nasser Street, Benghazi, Libya [LIBYA]
GENERAL CATERING CORPORATION, P.O. Box 491, Tripoli, Libya [LIBYA]
GENERAL CLEANING COMPANY, P.O. Box 920, Tripoli, Libya [LIBYA]
GENERAL CO. FOR AGRICULTURAL MACHINERY AND NECESSITIES, Alziraia, Libya; 
Benghazi Office, P.O. Box 2094, Benghazi, Libya; Sebha, Libya; P.O. Box 
324, Tripoli, Libya; Zawia, Libya [LIBYA]
GENERAL CO. FOR AGRICULTURAL PROJECTS, P.O. Box 265, Gharian, Libya; 
P.O. Box 2284, Tripoli, Libya [LIBYA]
GENERAL CO. FOR CERAMIC AND GLASS PRODUCTS, Aziza, Amiri Bldg, Suani Ben 
Adam, P.O. Box 12581, Dhara-Tripoli, Libya [LIBYA]
GENERAL CO. FOR CIVIL WORKS, P.O. Box 1299, Benghazi, Libya; P.O. Box 
3306, Tripoli, Libya [LIBYA]
GENERAL CO. FOR CONSTRUCTION AND EDUCATIONAL BUILDINGS, P.O. Box 4087, 
Benghazi, Libya; P.O. Box 1186, Tripoli, Libya [LIBYA]
GENERAL CO. FOR ELECTRIC WIRES AND PRODUCTS, P.O. Box 1177, Benghazi, 
Libya; P.O. Box 12629, Tripoli, Libya [LIBYA]

[[Page 955]]

GENERAL CO. FOR LAND RECLAMATION, P.O. Box 307, Souani Road, Tripoli, 
Libya [LIBYA]
GENERAL CO. FOR LEATHER PRODUCTS AND MANUFACTURE, P.O. Box 152, 
Benghazi, Libya; P.O. Box 2319, Tripoli, Libya [LIBYA]
GENERAL CO. FOR MARKETING AND AGRICULTURAL PRODUCTION, P.O. Box 4251, 
Benghazi, Libya; P.O. Box 2897, Hadba Al Khadra, Tripoli, Libya [LIBYA]
GENERAL CO. FOR TEXTILES, P.O. Box 1816, Benghazi, Libya; P.O. Box 3257, 
Tripoli, Libya [LIBYA]
GENERAL CO. FOR TOYS AND SPORT EQUIPMENT, P.O. Box 3270, Tripoli, Libya 
[LIBYA]
GENERAL COMPANY FOR CHEMICAL INDUSTRIES, P.O. Box 100/411, 100/071, 
Zuara, Libya [LIBYA]
GENERAL CONSTRUCTION COMPANY, Gharian Office, P.O. Box 178, Gharian, 
Libya; P.O. Box 8636, Tripoli, Libya [LIBYA]
GENERAL CORPORATION FOR PUBLIC TRANSPORT, P.O. Box 9528, Benghazi, 
Libya; 2175 Sharla Magaryef Tatanaka Bldg, P.O. Box 4875, Tripoli, Libya 
[LIBYA]
GENERAL DAIRIES AND PRODUCTS CO., Benghazi Factory, Benghazi, Libya; 
P.O. Box 9118, Benghazi, Libya; Jebel Akhdar Factory, Jebel Akhdar, 
Libya; Khoms Factory, Khoms, Libya; P.O. Box 5318, Tripoli, Libya; 
Tripoli Factory, Tripoli, Libya [LIBYA]
GENERAL ELECTRICITY CORPORATION, P.O. Box 3047, Benghazi, Libya; P.O. 
Box 668, Tripoli, Libya [LIBYA]
GENERAL ELECTRONICS CO., P.O. box 2068, Benghazi, Libya; P.O. Box 12580, 
Tripoli, Libya [LIBYA]
GENERAL EST. FOR PUBLICATION DISTRIBUTION & ADVERTISING, P.O. Box 113, 
Beirut, Lebanon [LIBYA]
GENERAL FURNITURE CO., Suani Road, Km. 15, P.O. Box 12655, Tripoli, 
Libya [LIBYA]
GENERAL LIBYAN CO. FOR ROAD CONSTRUCTION AND MAINTENANCE, P.O. Box 2676, 
Swani Road, Tripoli, Libya [LIBYA]
GENERAL NATIONAL CO. FOR FLOUR MILLS AND FODDER, Benghazi Office, Gamel 
Abdumaser Street, P.O. Box 209, Benghazi, Libya; Bab Bin Ghashir, P.O. 
Box 984, Tripoli, Libya [LIBYA]
GENERAL NATIONAL CO. FOR INDUSTRIAL CONSTRUCTION, Tripoli Branch, P.O. 
Box 295, Tripoli, Libya; P.O. Box 953, Beida, Libya; Benghazi Branch, 
Gamal Abd El Naser Street, P.O. Box 9502, Benghazi, Libya [LIBYA]
GENERAL NATIONAL MARITIME TRANSPORT CO. (a.k.a. NATIONAL LINE OF LIBYA, 
THE), P.O. Box 2450, Benghazi, Libya; P.O. Box 80173, 2 Ahmed Sharif 
Street, Tripoli, Libya (And at all Libyan ports) [LIBYA]
GENERAL NATIONAL ORGANISATION FOR INDUSTRIALIZATION, P.O. Box 2779, 
Benghazi, Libya; Shaira Sana'a, P.O. Box 4388, Tripoli, Libya [LIBYA]
GENERAL ORGANISATION FOR TOURISM AND FAIRS, P.O. Box 891, Sharia Haiti, 
Tripoli, Libya [LIBYA]
GENERAL PAPER AND PRINTING CO., Benghazi, Libya; Sebha, Libya; P.O. Box 
8096, Tripoli, Libya [LIBYA]
GENERAL POST AND TELECOMMUNICATIONS CORP., Maidan al Jazair, Tripoli, 
Libya [LIBYA]
GENERAL RAHILA AUTOMOBILE CO., Libya [LIBYA]
GENERAL TOBACCO COMPANY, Benghazi, Libya; Garian, Libya; Khoms, Libya; 
Sebha, Libya; Gorji Road Km. 6, P.O. Box 696, Tripoli, Libya; Zavia, 
Libya [Libya]
GENERAL WATER WELL DRILLING CO., P.O. Box 2532, Benghazi, Libya; P.O. 
Box 2532, Sharia Omar Muktar, Mormesh Bldg., Tripoli, Libya [LIBYA]
GEZIRA AUTOMOBILE COMPANY (a.k.a. EL GEZIRA AUTOMOBILE COMPANY), P.O. 
Box 232, Khartoum, Sudan [SUDAN]
GEZIRA TANNERY, Gezira, Sudan [SUDAN]
GEZIRA TRADE & SERVICES COMPANY LIMITED, P.O. Box 215, Khartoum, Sudan; 
P.O. Box 17, Port Sudan, Sudan; El Obeid, Sudan; Gedarit, Sudan; Juba, 
Sudan; Kosti, Sudan; Sennar, Sudan; Wad Medani, Sudan [SUDAN]
GHADAMSI, Bashir, Italy (individual) [LIBYA]
GHADBAN, Mohammed Mustafa, P.O. Box 452, Fadiel Abu Omar Square, El-
Berkha, Benghazi, Libya (individual) [LIBYA]
GHADBAN, Mohammed Mustafa, P.O. Box 4647, Shuhada Square, Tripoli, Libya 
(individual) [LIBYA]
GHADBAN, Mohammed Mustafa, Vali Konagi Cad. No. 10, 80200 Nistantas, 
Istanbul, Turkey (individual) [LIBYA]
GHAILANI, Abubakary Khalfan Ahmed (see GHAILANI, Ahmed Khalfan) 
(individual) [SDGT]
GHAILANI, Ahmed (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
GHAILANI, Ahmed Khalfan (a.k.a. GHILANI, Ahmad Khalafan; a.k.a. AHMED, 
Ahmed Khalfan; a.k.a. AHMED, Abubakar K.; a.k.a. AHMED, Abubakary K.; 
a.k.a. AHMED, Abubakar; a.k.a. AHMAD, Abu Bakr; a.k.a. AHMED, A.; a.k.a. 
KHALFAN, Ahmed; a.k.a. ALI, Ahmed Khalfan; a.k.a. AHMED, Abubakar 
Khalfan; a.k.a. GHAILANI, Ahmed; a.k.a. AL TANZANI, Ahmad; a.k.a. 
KHABAR, Abu; a.k.a. BAKR, Abu; a.k.a. GHAILANI, Abubakary Khalfan Ahmed; 
a.k.a. HUSSEIN, Mahafudh Abubakar Ahmed Abdallah; a.k.a. MOHAMMED, 
Shariff Omar; a.k.a. ``FOOPIE''; a.k.a. ``FUPI''; a.k.a. ``AHMED THE 
TANZANIAN'') (DOB

[[Page 956]]

14 Mar 1974; alt. DOB 13 Apr 1974; alt. DOB 14 Apr 1974; alt. DOB 1 Aug 
1970; POB Zanzibar, Tanzania; Citizen Tanzania) (individual) [SDGT]
GHILANI, Ahmad Khalafan (see GHAILANI, Ahmed Khalfan) (individual) 
[SDGT]
GI (see GAMA'A AL-ISLAMIYYA) [SDT, FTO]
GIA (see ARMED ISLAMIC GROUP) [FTO]
GIA (see ARMED ISLAMIC GROUP) [FTO] [SDGT]
GIBRIL, Mustafa Saleh, P.O. Box 3224, Martyr Street, Megrief, Tripoli, 
Libya (individual) [LIBYA]
GIL, Josef (a.k.a. GILBERT, Joseph; a.k.a. GILBOA, Joseph; a.k.a. 
GILBOA, Joseph Papzian; a.k.a. GILBOA, Yosef); DOB 8 Apr 1943; POB 
Israel (individual) [SDNTK]
GIL OSORIO, Alfonso, c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o 
D'CACHE S.A., Cali, Colombia; c/o DEPOSITO POPULAR DE DROGAS S.A., Cali, 
Colombia; c/o DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, Colombia; c/
o DISTRIBUIDORA DE DROGAS LA REBAJA S.A., Bogota, Colombia; c/o 
DISTRIBUIDORA MIGIL LTDA., Cali, Colombia; c/o FARMATODO S.A., Bogota, 
Colombia; c/o LABORATORIOS BLAIMAR DE COLOMBIA S.A., Bogota, Colombia; 
c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia; c/o 
SERVICIOS SOCIALES LTDA., Barranquilla, Colombia; DOB 17 December 1946; 
alt. DOB 17 December 1940; Passports 14949229 (Colombia), 14949279 
(Colombia), 14949289 (Colombia), AC342060 (Colombia); Cedula No. 
14949279 (Colombia) (individual) [SDNT]
GILBERT, Joseph (a.k.a. GIL, Josef; a.k.a. GILBOA, Joseph; a.k.a. 
GILBOA, Joseph Papzian; a.k.a. GILBOA, Yosef); DOB 8 Apr 1943; POB 
Israel (individual) [SDNTK]
GILBOA, Joseph (a.k.a. GIL, Josef; a.k.a. GILBERT, Joseph; a.k.a. 
GILBOA, Joseph Papzian; a.k.a. GILBOA, Yosef); DOB 8 Apr 1943; POB 
Israel (individual) [SDNTK]
GILBOA, Joseph Papzian (a.k.a. GIL, Josef; a.k.a. GILBERT, Joseph; 
a.k.a. GILBOA, Joseph; a.k.a. GILBOA, Yosef); DOB 8 Apr 1943; POB Israel 
(individual) [SDNTK]
GILBOA, Yosef (a.k.a. GIL, Josef; a.k.a. GILBERT, Joseph; a.k.a. GILBOA, 
Joseph; a.k.a. GILBOA, Joseph Papzian); DOB 8 Apr 1943; POB Israel 
(individual) [SDNTK]
GILMAN FRANCO, Maria, c/o TAURA S.A., Cali, Colombia; Cedula No. 
22103099 (Colombia) (individual) [SDNT]
GINEID SUGAR FACTORY, P.O. Box 1, Gineid, Sudan [SUDAN]
GIOVANNI IANORA, D.O.B. June 5, 1943, Via A. Costa 17, Milan, Italy; 
(individual)[SDN]
GIRALDO ARBELAEZ, Fernando, c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia 
(Cedula No. 16249351 (Colombia)) (individual) [SDNT]
GIRALDO JARAMILLO, Clara Stella, Avenida 2N No. 19-73 apt. 302, Cali, 
Colombia; c/o CONCRETOS CALI S.A., Cali, Colombia; c/o CONSTRUCTORA 
DIMISA LTDA., Cali, Colombia (Cedula No. 31855785 (Colombia)) 
(individual) [SDNT]
GIRALDO SARRIA, Octavio, c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia 
(individual) [SDNT]
GIRALDO SARRIA, Rosa Amelia, c/o INMOBILIARIA U.M.V. S.A., Cali, 
Colombia (individual) [SDNT]
GLAJAN S.A., Transversal 29 No. 39-92, Bogota, Colombia; NIT 
830023266-2 (Colombia) [SDNT]
GLOBAL MARINE OVERSEAS, INC., Panama [CUBA]
GNPOC (see GREATER NILE PETROLEUM OPERATING COMPANY LIMITED) [SUDAN]
GOLDEN COMET NAVIGATION CO. LTD., c/o EMPRESA DE NAVEGACION MAMBISA, 
Apartado 543, San Ignacio 104, Havana, Cuba [CUBA]
GOMEZ BELTRAN, Jorge, c/o LABORATORIOS GENERICOS VETERINARIOS, Bogota, 
Colombia (Cedula No. 19091811 (Colombia)) (individual) [SDNT]
GOMEZ BERRIO, Olmes (Holmes) de Jesus, Carrera 1 No. 18-52, Cali, 
Colombia; c/o INVERSIONES INVERVALLE S.A., Cali, Colombia; c/o 
INVERSIONES Y CONSTRUCCIONES VALLE S.A., Cali, Colombia (Cedula No. 
73105133 (Colombia)) (individual) [SDNT]
GOMEZ GALINDO, Omaira, Apartado Aereo 38028, Cali, Colombia; Avenida 6N 
No. 38-90, Cali, Colombia; c/o CONSTRUCTORA GOPEVA LTDA., Cali, Colombia 
(Cedula No. 31299825 (Colombia)) (individual) [SDNT]
GOMEZ J., Luis Fernando, c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia 
(Cedula No. 16716914 (Colombia)) (individual) [SDNT]
GOMEZ LOPEZ, Diego Fernando, c/o CONSTRUCTORA DIMISA LTDA., Cali, 
Colombia (individual) [SDNT]
GOMEZ MORA, Ricardo, c/o INVERSIONES GEELE LTDA., Bogota, Colombia; c/o 
LABORATORIOS GENERICOS VETERINARIOS, Bogota, Colombia (Cedula No. 
3249673 (Colombia)) (individual) [SDNT]
GOMEZ V., Manuel Antonio, c/o GANADERA LTDA., Cali, Colombia (Cedula No. 
7921814 (Colombia)) (individual) [SDNT]
GOMEZ, Julio Humberto, c/o LABORATORIOS GENERICOS VETERINARIOS, Bogota, 
Colombia (Cedula No. 19091811 (Colombia)) (individual) [SDNT]
GONGORA ALARCON, Hernando, c/o TAURA S.A., Cali, Colombia; Cedula No. 
19298944 (Colombia) (individual) [SDNT]

[[Page 957]]

GONZALEZ BENITEZ, Olga Patricia, Hacienda Coque, Cartago, Colombia; 
Carrera 4 No. 16-04 apt. 303, Cartago, Colombia; c/o AGRICOLA GANADERA 
HENAO GONZALEZ Y CIA. S.C.S., Cartago, Colombia; c/o DESARROLLOS 
COMERCIALES E INDUSTRIALES HENAO GONZALEZ Y CIA. S.C.S., Cartago, 
Colombia; Cedula No. 29503761 (Colombia) (individual) [SDNT]
GONZALEZ, Jose (a.k.a. ALVAREZ TOSTADO, Jose; a.k.a. CASTELLANOS ALVAREZ 
TOSTADO, Juan Jose); DOB 27 Aug 1955; POB Mexico (individual) [SDNTK]
GONZALEZ QUINTERO, Melba Patricia, c/o COINTERCOS S.A., Bogota, 
Colombia; c/o DISTRIBUIDORA DE DROGAS CONDOR S.A., Bogota, Colombia; c/o 
FIDUSER LTDA., Bogota, Colombia; Cedula No. 35415232 (Colombia) 
(individual) [SDNT]
GONZALEZ QUIONES, Jorge (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES 
MAGANE, Ramon; a.k.a. ALCIDES MAYENA, Ramon; a.k.a. ALCIDEZ MAGANA, 
Ramon; a.k.a. MAGANA ALCIDES, Ramon; a.k.a. MAGANA, Jorge; a.k.a. MAGNA 
ALCIDEDES, Ramon; a.k.a. MATA, Alcides; a.k.a. RAMON MAGANA, Alcedis; 
a.k.a. RAMON MAGANA, Alcides; a.k.a. ROMERO, Antonio); DOB 4 Sep 1957 
(individual) [SDNTK]
GONZALEZ ROBLEDO, Julio Cesar, c/o LABORATORIOS GENERICOS VETERINARIOS, 
Bogota, Colombia (Cedula No. 2905977 (Colombia)) (individual) [SDNT]
GONZALEZ, Carlos Alfonso (a.k.a. ALFONSO, Carlos), Panama (individual) 
[CUBA]
GONZALEZ, Maria Lorena, c/o INVERSIONES Y CONSTRUCCIONES ATLAS LTDA., 
Cali, Colombia; (Cedula No. 31992548 (Colombia)) (individual) [SDNT]
GRAN COMPAN[tilde]IA DE HOTELES LTDA., (a.k.a. GRANCO), Calle 74 No. 53-
30, Barranquilla, Colombia; NIT  800011606-2 (Colombia) [SDNT]
GREATER NILE PETROLEUM OPERATING COMPANY LIMITED (a.k.a. GNPOC), Hotel 
Palace, Room 420, El Nil Avenue, Khartoum, Sudan; El Harr Oilfield, 
Muglad Basin, Sudan; El Nar Oilfield, Muglad Basin, Sudan; El Toor 
Oilfield, Muglad Basin, Sudan; Heglig Oilfield, Muglad Basin, Sudan; 
Heglig Processing Facility, Muglad Basin, Sudan; Kaikang Oilfield, 
Muglad Basin, Sudan; Toma South Oilfield, Muglad Basin, Sudan; Unity 
Oilfield, Muglad Basin, Sudan; Pipeline, Heglig via El-Obeid to Port 
Sudan, Sudan; Red Sea Export Terminal, Marsa al-Basha'ir, Sudan [SUDAN]
GRETE SHIPPING CO. S.A., c/o EMPRESA DE NAVEGACION CARIBE, Edificio 
Lonja del Comercio, Lamparilla 2, Caja Postal 1784, Havana 1, Cuba 
[CUBA]
GROUP FOR THE PRESERVATION OF THE HOLY SITES, THE (see ISLAMIC ARMY) 
[SDT]
THE GROUP FOR THE PRESERVATION OF THE HOLY SITES (see AL QA'IDA) [SDT, 
FTO]
THE GROUP FOR THE PRESERVATION OF THE HOLY SITES (see AL QAIDA) [SDT] 
[FTO] [SDGT]
GROUPED INDUSTRIES CORPORATION, P.O. Box 2241, Khartoum, Sudan [SUDAN]
GROUPEMENT ISLAMIQUE ARME (see ARMED ISLAMIC GROUP) [FTO]
GROUPEMENT ISLAMIQUE ARME (see ARMED ISLAMIC GROUP) [FTO] [SDGT]
GRUBAN, Momcilo, (ICTY indictee, Bosnian Serb) (DOB 19 Jun 61) 
(individual) [FRYM]
GRUPO SANTA LTDA., Calle 18 106-98 of. 201/202, Cali, Colombia; Carrera 
4 12-41 piso 14 y 15, Edificio Seguros Bolivar, Cali, Colombia; Carrera 
84 17-29, Cali, Colombia [SDNT]
GSPC (see SALAFIST GROUP FOR CALL AND COMBAT) [SDGT]
GUACA EXPORT, Panama [CUBA]
GUAMAR SHIPPING CO. S.A., c/o EMPRESA DE NAVEGACION CARIBE, Edificio 
Lonja del Comercio, Lamparilla 2, Caja Postal 1784, Havana 1, Cuba 
[CUBA]
GUAMATUR, Buenos Aires, Argentina [CUBA]
GUIERREZ LOERA, Jose Luis (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, 
Gilberto; a.k.a. GUMAN LOERAL, Joaquin; a.k.a. GUZMAN, Achivaldo; a.k.a. 
GUZMAN, Archibaldo; a.k.a. GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; 
a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a. 
GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, Joaquin; a.k.a. GUZMAN 
LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN PADILLA, 
Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. RAMIREZ, 
Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB Mexico 
(individual) [SDNTK]
GUMAN LOERAL, Joaquin (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, 
Gilberto; a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUZMAN, Achivaldo; 
a.k.a. GUZMAN, Archibaldo; a.k.a. GUZMAN, Aureliano; a.k.a. GUZMAN, 
Chapo; a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, Joaquin Chapo; 
a.k.a. GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, Joaquin; a.k.a. 
GUZMAN LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN 
PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. 
RAMIREZ, Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB 
Mexico (individual) [SDNTK]
GUTIERRES CERDAS, Alvaro (a.k.a. GUTIERREZ CERDAS, Alvaro), c/o

[[Page 958]]

DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, Colombia (DOB 9 May 42; 
Cedula No. 14966562 (Colombia)) (individual) [SDNT]
GUTIERREZ ARDILA, Eduardo, c/o EXPORT CAFE LTDA., Cali, Colombia (DOB 8 
Aug 1958; Cedula No. 16642433 (Colombia)) (individual) [SDNT]
GUTIERREZ BURAGLIA, German, c/o PENTACOOP LTDA., Bogota, Colombia 
(Cedula No. 19439177 (Colombia)) (individual) [SDNT]
GUTIERREZ CANCINO, Fernando Antonio, c/o ALFA PHARMA S.A., Bogota, 
Colombia; c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o DISTRIBUIDORA DE 
DROGAS LA REBAJA S.A., Bogota, Colombia; c/o FARMATODO S.A., Bogota, 
Colombia; c/o INVERSIONES GEELE LTDA., Bogota, Colombia; c/o 
LABORATORIOS BLAIMAR DE COLOMBIA S.A., Bogota, Colombia; c/o 
LABORATORIOS GENERICOS VETERINARIOS DE COLOMBIA S.A., Bogota, Colombia; 
c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia; c/o PENTA 
PHARMA DE COLOMBIA S.A., Bogota, Colombia; c/o CREACIONES DEPORTIVAS 
WILLINGTON LTDA., Cali, Colombia; c/o SERVICIOS SOCIALES LTDA., Cali, 
Colombia (DOB 4 December 1941; Cedula No. 6089071 (Colombia)) 
(individual) [SDNT]
GUTIERREZ LOZANO, Ana Maria, c/o SERVICIOS SOCIALES LTDA., Barranquilla, 
Colombia; c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o INVERSIONES 
GEELE LTDA., Bogota, Colombia; c/o LABORATORIOS GENERICOS VETERINARIOS 
DE COLOMBIA S.A., Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE 
COLOMBIA S.A., Bogota, Colombia (DOB 1972; Cedula No. 39783954 
(Colombia)) (individual) [SDNT]
GUTIERREZ LOZANO, Juan Pablo, c/o SERVICIOS SOCIALES LTDA., 
Barranquilla, Colombia; c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o 
INVERSIONES GEELE LTDA., Bogota, Colombia; c/o LABORATORIOS GENERICOS 
VETERINARIOS DE COLOMBIA S.A., Bogota, Colombia; c/o LABORATORIOS 
KRESSFOR DE COLOMBIA S.A., Bogota, Colombia (DOB 11 April 1972; Passport 
AC480604 (Colombia); Cedula No. 79570028 (Colombia)) (individual) [SDNT]
GUTIERREZ PADILLA, Clara Ines, c/o ADMACOOP, Bogota, Colombia; c/o 
DECAFARMA S.A., Bogota, Colombia; c/o FARMACOOP, Bogota, Colombia; 
Cedula No. 51583831 (Colombia) (individual) [SDNT]
GUTIERREZ PARDO, Elvira Patricia, c/o ADMACOOP, Bogota, Colombia; c/o 
BONOMERCAD S.A., Bogota, Colombia; c/o COMEDICAMENTOS S.A., Bogota, 
Colombia; c/o PATENTES MARCAS Y REGISTROS S.A., Bogota, Colombia; Cedula 
No. 39612308 (Colombia) (individual) [SDNT]
GUTIERREZ REYES, Jose, Vinales Tours, Oaxaca 80, Roma, Mexico, D.F., 
Mexico (individual) [CUBA]
GUZMAN, Achivaldo (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, Gilberto; 
a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, Joaquin; a.k.a. 
GUZMAN, Archibaldo; a.k.a. GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; 
a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a. 
GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, Joaquin; a.k.a. GUZMAN 
LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN PADILLA, 
Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. RAMIREZ, 
Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB Mexico 
(individual) [SDNTK]
GUZMAN, Archibaldo (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, Gilberto; 
a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, Joaquin; a.k.a. 
GUZMAN, Achivaldo; a.k.a. GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; 
a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a. 
GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, Joaquin; a.k.a. GUZMAN 
LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN PADILLA, 
Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. RAMIREZ, 
Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB Mexico 
(individual) [SDNTK]
GUZMAN, Aureliano (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, Gilberto; 
a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, Joaquin; a.k.a. 
GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. GUZMAN, Chapo; 
a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a. 
GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, Joaquin; a.k.a. GUZMAN 
LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN PADILLA, 
Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. RAMIREZ, 
Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB Mexico 
(individual) [SDNTK]
GUZMAN, Chapo (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, Gilberto; 
a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, Joaquin; a.k.a. 
GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. GUZMAN, Aureliano; 
a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a. 
GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, Joaquin; a.k.a. GUZMAN 
LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN PADILLA, 
Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. RAMIREZ, 
Joise Luis; a.k.a.

[[Page 959]]

RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB Mexico (individual) [SDNTK]
GUZMAN FERNANDEZ, Joaquin (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, 
Gilberto; a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, 
Joaquin; a.k.a. GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. 
GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN, Joaquin Chapo; 
a.k.a. GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, Joaquin; a.k.a. 
GUZMAN LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN 
PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. 
RAMIREZ, Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB 
Mexico (individual) [SDNTK]
GUZMAN, Joaquin Chapo (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, 
Gilberto; a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, 
Joaquin; a.k.a. GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. 
GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, 
Joaquin; a.k.a. GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, Joaquin; 
a.k.a. GUZMAN LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN 
PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. 
RAMIREZ, Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB 
Mexico (individual) [SDNTK]
GUZMAN LOEIA, Joaguin (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, 
Gilberto; a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, 
Joaquin; a.k.a. GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. 
GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, 
Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a. GUZMAN LOERA, Joaquin; 
a.k.a. GUZMAN LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN 
PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. 
RAMIREZ, Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB 
Mexico (individual) [SDNTK]
GUZMAN LOERA, Joaquin (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, 
Gilberto; a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, 
Joaquin; a.k.a. GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. 
GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, 
Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a.GUZMAN LOEIA, Joaguin; 
a.k.a. GUZMAN LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN 
PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. 
RAMIREZ, Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB 
Mexico (individual) [SDNTK]
GUZMAN LOESA, Joaquin (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, 
Gilberto; a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, 
Joaquin; a.k.a. GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. 
GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, 
Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a. GUZMAN LOEIA, Joaguin; 
a.k.a. GUZMAN LOERA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; a.k.a. GUZMAN 
PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; a.k.a. 
RAMIREZ, Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB 
Mexico (individual) [SDNTK]
GUZMAN LOREA, Chapo (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, 
Gilberto; a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, 
Joaquin; a.k.a. GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. 
GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, 
Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a. GUZMAN LOEIA, Joaguin; 
a.k.a. GUZMAN LOERA, Joaquin; a.k.a. GUZMAN LOESA, Joaquin; a.k.a. 
GUZMAN PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; 
a.k.a. RAMIREZ, Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; 
POB Mexico (individual) [SDNTK]
GUZMAN PADILLA, Joaquin (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, 
Gilberto; a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, 
Joaquin; a.k.a. GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. 
GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, 
Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a. GUZMAN LOEIA, Joaguin; 
a.k.a. GUZMAN LOERA, Joaquin; a.k.a. GUZMAN LOESA, Joaquin; a.k.a. 
GUZMAN LOREA, Chapo; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, Gilberto; 
a.k.a. RAMIREZ, Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; 
POB Mexico (individual) [SDNTK]
GUZMAN VELASQUEZ, Luz Marcela, c/o TAURA S.A., Cali, Colombia; Cedula 
No. 43568327 (Colombia) (individual) [SDNT]
H & H METALFORM GMBH, Postfach 1160, Strontianitstrasse 5, 4406 
Drensteinfurt, Germany [IRAQ]
HABANOS TRADING, Geneva, Switzerland [CUBA]
HABBASH, George (a.k.a. HABASH, George), Secretary General of POPULAR 
FRONT FOR THE LIBERATION OF PALESTINE (individual) [SDT]
HABIB, Mohammed Turki, Baghdad, Iraq (individual) [IRAQ]
HABIBI, Skender, Member of Party for Democratic Progress for Kosovo 
(PDK) (DOB: 13 Jul 1968; POB: Ljubiste, FRY) (individual) [BALKANS]

[[Page 960]]

HACHITO SANCHEZ, Angel Alberto, c/o COPSERVIR LTDA., Bogota, Colombia 
(DOB 9 November 1962; Cedula No. 17634454 (Colombia)) (individual) 
[SDNT]
HACIENDA LA NOVILLERA (a.k.a. NOVILLERA; a.k.a. NOVILLERA GANADERA), 
Carrera 4 12-41 piso 15, Edificio Seguros Bolivar, Cali, Colombia; Paso 
de la Bolsa, Jamundi, Valle del Cauca, Cali, Colombia [SDNT]
HACIENDA SANDRANA (a.k.a. SANDRANA GANADERA; a.k.a. SANDRANDA), Carrera 
4 12-41 piso 15, Edificio Seguros Bolivar, Cali, Colombia; San Pedro, 
Valle del Cauca, Colombia [SDNT]
HAGGAR ASSALAYA SUGAR FACTORY, Haggar Assalaya, Sudan [SUDAN]
HALHUL GANG (see POPULAR FRONT FOR THE LIBERATION OF PALESTINE) [SDT, 
FTO]
HALHUL SQUAD (see POPULAR FRONT FOR THE LIBERATION OF PALESTINE) [SDT, 
FTO]
HAMAS (a.k.a. ISLAMIC RESISTANCE MOVEMENT; a.k.a. HARAKAT AL-MUQAWAMA 
AL-ISLAMIYA; a.k.a. STUDENTS OF AYYASH; a.k.a. STUDENTS OF THE ENGINEER; 
a.k.a. YAHYA AYYASH UNITS; a.k.a. IZZ AL-DIN AL-QASSIM BRIGADES; a.k.a. 
IZZ AL-DIN AL-QASSIM FORCES; a.k.a. IZZ AL-DIN AL-QASSIM BATTALIONS; 
a.k.a. IZZ AL-DIN AL QASSAM BRIGADES; a.k.a. IZZ AL-DIN AL QASSAM 
FORCES; a.k.a. IZZ AL-DIN AL QASSAM BATTALIONS) [SDT, FTO]
HAMEIAH, Jamel (a.k.a. HAMEIAH, Jamil; a.k.a. HAMEIAH, Mamil; a.k.a. 
HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. HAMER, Jamil; a.k.a. 
HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. HAMIE, Jamil Abdulkarim; 
a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; a.k.a. HAMIEAH, Jamiel; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMEIAH, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Mamil; a.k.a. 
HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. HAMER, Jamil; a.k.a. 
HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. HAMIE, Jamil Abdulkarim; 
a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; a.k.a. HAMIEAH, Jamiel; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMEIAH, Mamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. HAMER, Jamil; a.k.a. 
HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. HAMIE, Jamil Abdulkarim; 
a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; a.k.a. HAMIEAH, Jamiel; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMEIEH, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIH, Jamill; a.k.a. HAMER, Jamil; a.k.a. 
HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. HAMIE, Jamil Abdulkarim; 
a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; a.k.a. HAMIEAH, Jamiel; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMEIH, Jamill (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMER, Jamil; a.k.a. 
HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. HAMIE, Jamil Abdulkarim; 
a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; a.k.a. HAMIEAH, Jamiel; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMER, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a.

[[Page 961]]

HAMEIH, Jamill; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIL, Jamil; a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; 
a.k.a. HAMIYYAH, Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; 
a.k.a. KARIM, Jamil Abdul; a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. 
NIZAM, Abou); DOB Sep 1938 (individual) [SDNTK]
HAMIAEH, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. HAMIE, Jamil Abdulkarim; 
a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; a.k.a. HAMIEAH, Jamiel; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIAH, Jamiel (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIE, Jamil Abdulkarim; 
a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; a.k.a. HAMIEAH, Jamiel; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIE, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamile; a.k.a. HAMIEAH, Jamiel; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIE, Jamil Abdulkarim (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; 
a.k.a. HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; 
a.k.a. HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; 
a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; a.k.a. HAMIEAH, Jamiel; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIE, Jamile (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIEAH, Jamiel; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIEAH, Jamiel (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIEAH, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a.

[[Page 962]]

HAMEIH, Jamill; a.k.a. HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. 
HAMIAH, Jamiel; a.k.a. HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; 
a.k.a. HAMIE, Jamile; a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIL, Jamil; a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; 
a.k.a. HAMIYYAH, Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; 
a.k.a. KARIM, Jamil Abdul; a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. 
NIZAM, Abou); DOB Sep 1938 (individual) [SDNTK]
HAMIEH, Jamal (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamiel; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIEH, Jamiel (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; a.k.a. 
HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIEH, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Mamil; a.k.a. HAMIEL, Jamil; 
a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; 
a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, 
Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil 
Abdul; a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB 
Sep 1938 (individual) [SDNTK]
HAMIEH, Mamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEL, Jamil; 
a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; 
a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, 
Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil 
Abdul; a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB 
Sep 1938 (individual) [SDNTK]
HAMIEL, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; 
a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, 
Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil 
Abdul; a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB 
Sep 1938 (individual) [SDNTK]
HAMIEYE, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYYEH, Jamil; a.k.a. HAMIL, Jamil; 
a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, 
Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil 
Abdul; a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB 
Sep 1938 (individual) [SDNTK]
HAMIEYYEH, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a.

[[Page 963]]

HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIL, Jamil; a.k.a. 
HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIL, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, 
Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil 
Abdul; a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB 
Sep 1938 (individual) [SDNTK]
HAMIYA, Abdul Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; 
a.k.a. HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; 
a.k.a. HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; 
a.k.a. HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, 
Jamile; a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, 
Jamal; a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, 
Mamil; a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, 
Jamil; a.k.a. HAMIL, Jamil; a.k.a. HAMIYE, Jamil; a.k.a. HAMIYYAH, 
Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil 
Abdul; a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB 
Sep 1938 (individual) [SDNTK]
HAMIYE, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIL, Jamil; a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYYAH, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIYYAH, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIL, Jamil; a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; 
a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMIYYEH, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIL, Jamil; a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; 
a.k.a. HAMIYYAH, Jamil; a.k.a. HAMYH, Jamil; a.k.a. KARIM, Jamil Abdul; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
HAMYH, Jamil (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIL, Jamil; a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; 
a.k.a. HAMIYYAH, Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. KARIM, Jamil 
Abdul; a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB 
Sep 1938 (individual) [SDNTK]
HAPPY DAYS (see M C M Y CIA. LTDA.) [SDNT]

[[Page 964]]

HAPPY DAYS S. de H., Calle 78 No. 53-70, Locales 315 y 316, 
Barranquilla, Colombia; NIT 802003826-1 (Colombia) [SDNT]
HARADINAJ, Daut, Chief of Staff of Kosovo Protection Corps (KPC) (DOB: 6 
Apr 1978; POB: Goldane, FRY) (individual) [BALKANS]
HARAKAT AL-MUQAWAMA AL-ISLAMIYA (see HAMAS) [SDT, FTO]
HARAKAT UL-ANSAR (see HARAKAT UL-MUJAHIDEEN) [FTO]
HARAKAT UL-ANSAR (see HARAKAT UL-MUJAHIDIN) [FTO] [SDGT]
HARAKAT UL-MUJAHIDEEN (a.k.a. HUM; a.k.a. HARAKAT UL-ANSAR; a.k.a. HUA; 
a.k.a. AL-HADID; a.k.a. AL-HADITH; a.k.a. AL-FARAN) [FTO]
HARAKAT UL-MUJAHIDEEN (see HARAKAT UL-MUJAHIDIN) [FTO] [SDGT]
HARAKAT UL-MUJAHIDIN (a.k.a. HARAKAT UL-MUJAHIDEEN; a.k.a. HARAKAT UL-
ANSAR; a.k.a. HUA; a.k.a. HUM) [FTO] [SDGT]
HAROON (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
HAROUN, Fadhil (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
HARUN (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
HASANAYN, Nasr Fahmi Nasr (see SALAH, Muhammad) (individual) [SDGT]
HASANI, Xhavit, Member of National Liberation Army (NLA) (DOB: 5 May 
1957; POB: Tanishec, FYROM) (individual) [BALKANS]
HAVANA INTERNATIONAL BANK, LTD., 20 Ironmonger Lane, London EC2V 8EY, 
England [CUBA]
HAVANATUR, 54 Rue Richelieu, Paris, France [CUBA]
HAVANATUR, S.A., Hialeah, Florida, U.S.A. [CUBA]
HAVANATUR, S.A., Panama City, Panama [CUBA]
HAVINPEX, S.A. (a.k.a. TRANSOVER, S.A.), Panama City, Panama [CUBA]
HAWATMA, Nayif (a.k.a. HAWATMAH, Nayif; a.k.a. HAWATMEH, Nayif; a.k.a. 
KHALID, Abu), Secretary General of DEMOCRATIC FRONT FOR THE LIBERATION 
OF PALESTINE - HAWATMEH FACTION (DOB 1933) (individual) [SDT]
HAYA, Francisco, Panama (individual) [CUBA]
HAYDEE DE MUN[tilde]OZ Y CIA. S. EN C., Avenida 6N No. 23DN-16, Cali, 
Colombia; Avenida 4N No. 5N-20, Cali, Colombia [SDNT]
HEATH, Noel Timothy (a.k.a. ZAMBA, Noel Heath; a.k.a. ZAMBO, Noel 
Heath), Cardin Avenue, St. Kitts; DOB 16 December 1949; POB St. Kitts 
and Nevis; Passport 03574 (Great Britain) (individual) [SDNTK]
HELFORD DIRECTORS LIMITED, Haven Court, 5 Library Ramp, Gibraltar [IRAQ]
HEMED, Ahmed (see ALI, Ahmed Mohammeed Hamed) (individual) [SDGT]
HENAO DE SANCHEZ, Hortensia, c/o ALFA PHARMA S.A., Bogota, Colombia 
(Cedula No. 29013554 (Colombia)) (individual) [SDNT]
HENAO LOPEZ, Alberto (a.k.a. HENAO, Alberto Lopez), c/o ALFA PHARMA 
S.A., Bogota, Colombia (Cedula No. 2630951 (Colombia)) (individual) 
[SDNT]
HENAO MONTOYA, Arcangel de Jesus, Hacienda Coque, Cartago, Colombia; 
Carrera 4 No. 16-04 apt. 303, Cartago, Colombia; c/o AGRICOLA GANADERA 
HENAO GONZALEZ Y CIA. S.C.S., Cartago, Colombia; c/o COMPANIA 
AGROINVERSORA HENAGRO LTDA., Cartago, Colombia; c/o DESARROLLOS 
COMERCIALES E INDUSTRIALES HENAO GONZALEZ Y CIA. S.C.S., Cartago, 
Colombia; c/o MAQUINARIA TECNICA Y TIERRAS LTDA., Cartago, Colombia; c/o 
ORGANIZACION EMPRESARIAL A DE J HENAO M E HIJOS Y CIA. S.C.S., Cartago, 
Colombia; DOB 7 October 1954; Cedula No. 16215230 (Colombia) 
(individual) [SDNT]
HENAO MONTOYA, Lorena, Calle 52 No. 28E-30, Cali, Colombia; Calle 8 No. 
39-79 of. 201, Cali, Colombia; c/o AGROINVERSORA URDINOLA HENAO Y CIA. 
S.C.S., Cali, Colombia; c/o CONSTRUCTORA UNIVERSAL LTDA., Cali, 
Colombia; c/o EXPLOTACIONES AGRICOLAS Y GANADERAS LA LORENA S.C.S., 
Cali, Colombia; c/o INDUSTRIAS AGROPECUARIAS DEL VALLE LTDA., Cali, 
Colombia; c/o INVERSIONES EL EDEN S.C.S., Cali, Colombia; DOB 9 Oct 
1968; Cedula No. 31981533 (Colombia) (individual) [SDNT]
HENAO VDA. DE BOTERO, maria Yolanda, c/o ALFA PHARMA S.A., Bogota, 
Colombia (Cedula No. 29070489 (Colombia)) (individual) [SDNT]
HENAO, Maria Nohelio, c/o INVHERESA S.A., Cali, Colombia (Cedula No. 
26271587 (Colombia)) (individual) [SDNT]
HENIN, Ashraf Refaat Nabith (see MOHAMMED, Khalid Shaikh) (individual) 
[SDGT]
HERMANN SHIPPING CORP., INC., Panama [CUBA]
HERNANDEZ, Adan (see AMEZCUA CONTRERAS, Jose de Jesus) (individual) 
[SDNTK]
HERNANDEZ, Alexis Eneilo (CARBALLOSA), Milan, Italy (individual) [CUBA]
HERNANDEZ, Oscar, Mz. 21 Casa 5 Barrio San Fernando, Pereira, Colombia; 
c/o TAURA S.A., Cali, Colombia; Cedula No. 6157940 (Colombia) 
(individual) [SDNT]
HERNANDEZ C., Hector Fabio, c/o INVERSIONES BETANIA LTDA., Cali, 
Colombia; c/o INVERSIONES EL PEN[tilde]ON S.A., Cali, Colombia (Cedula 
No. 16615804 (Colombia)) (individual) [SDNT]

[[Page 965]]

HERRAN SAAVEDRA, Victor Hugo, c/o GALAPAGOS S.A., Cali, Colombia; Cedula 
No. 16447166 (Colombia) (individual) [SDNT]
HERRERA BUITRAGO, Alvaro, Avenida 6N No. 25-14, Cali, Colombia; c/o 
INDUSTRIA AVICOLA PALMASECA S.A., Cali, Colombia (DOB 10 October 1955; 
Cedula No. 16258303 (Colombia)) (individual) [SDNT]
HERRERA BUITRAGO, Helmer, (a.k.a. ``Pacho''; a.k.a. ``H7''), Cali, 
Colombia (DOB 24 August 1951; alt. DOB 5 July 1951; Passport J287011 
(Colombia); Cedula No. 16247821 (Colombia).) (individual) [SDNT]
HERRERA BUITRAGO, Stella, c/o COMERCIAL DE NEGOCIOS CLARIDAD Y CIA., 
Bogota, Colombia; c/o COMERCIALIZADORA EXPERTA Y CIA. S. EN C., Bogota, 
Colombia; c/o INMOBILIARIA GALES LTDA., Bogota, Colombia; Avenida 1B 
Oeste No. 1-44 apt. 602, Medeira Building, Cali, Colombia; c/o 
AGROPECUARIA Y REFORESTADORA HERREBE LTDA., Cali, Colombia; c/o 
CONCRETOS CALI S.A., Cali, Colombia; c/o CONSTRUCTORA DIMISA LTDA., 
Cali, Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, Colombia; c/
o INVERSIONES GEMINIS S.A., Cali, Colombia; c/o INVERSIONES HERREBE 
LTDA., Cali, Colombia; c/o SOCOVALLE LTDA., Cali, Colombia (DOB 7 
October (Year Unknown); Cedula No. 31143871 (Colombia)) (individual) 
[SDNT]
HERRERA BUITRAGO, Sulay (a.k.a. BUITRAGO, Sulay), c/o AGROPECUARIA Y 
REFORESTADORA HERREBE LTDA., Cali, Colombia; c/o CONSTRUEXITO S.A., 
Cali, Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, Colombia; c/
o INVERSIONES HERREBE LTDA., Cali, Colombia (individual) [SDNT]
HERRERA BUITRAGO, William, c/o W. HERRERA Y CIA. S. EN C., Cali, 
Colombia (DOB 29 November 1964; Passport No. P046550 (Colombia); Cedula 
No. 16716887 (Colombia)) (individual) [SDNT]
HERRERA INFANTE, Alberto, c/o CONSTRUCTORA DIMISA LTDA., Cali, Colombia; 
c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, Colombia (Cedula No. 
16637518 (Colombia)) (individual) [SDNT]
HERRERA RAMIREZ, Giselle, c/o AGROPECUARIA Y REFORESTADORA HERREBE 
LTDA., Cali, Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, 
Colombia; c/o INVERSIONES HERREBE LTDA., Cali, Colombia (individual) 
[SDNT]
HERRERA RAMIREZ, Linda Nicolle, c/o INDUSTRIA AVICOLA PALMASECA S.A., 
Cali, Colombia (individual) [SDNT]
HERRERA TOBON, Maria Cecilia, c/o LABORATORIOS GENERICOS VETERINARIOS, 
Bogota, Colombia (Cedula No. 31397821 (Colombia)) (individual) [SDNT]
HEYWOOD NAVIGATION CORPORATION, c/o MELFI MARINE CORPORATION S.A., 
Oficina 7, Edificio Senorial, Calle 50, Apartado 31, Panama City 5, 
Panama [CUBA]
HIELO CRISTAL Y REFRIGERACION LTDA., (a.k.a. CUATRO FRIO), Carrera 8 No. 
32-16, Cali, Colombia; Carrera 44A No. 9C-85, Bogota, Colombia; NIT 
 890303017-5 (Colombia) [SDNT]
HIGUERA GUERRERO, Ismael; DOB 17 Mar 1961; POB Mexico (individual) 
[SDNTK]
HIJAZI, Raed M. (see HIJAZI, Riad) (individual) [SDGT]
HIJAZI, Riad (a.k.a. HIJAZI, Raed M.; a.k.a. AL-HAWEN, Abu-Ahmad; a.k.a. 
AL-MAGHRIBI, Rashid; a.k.a. AL-AMRIKI, Abu-Ahmad; a.k.a. AL-SHAHID, Abu-
Ahmad), Jordan (DOB 1968; POB California, U.S.A.; SSN 548-91-5411) 
(individual) [SDGT]
HIZBALLAH (a.k.a. PARTY OF GOD; a.k.a. ISLAMIC JIHAD; a.k.a. ISLAMIC 
JIHAD ORGANIZATION; a.k.a. REVOLUTIONARY JUSTICE ORGANIZATION; a.k.a. 
ORGANIZATION OF THE OPPRESSED ON EARTH; a.k.a. ISLAMIC JIHAD FOR THE 
LIBERATION OF PALESTINE; a.k.a. ORGANIZATION OF RIGHT AGAINST WRONG; 
a.k.a. ANSAR ALLAH; a.k.a. FOLLOWERS OF THE PROPHET MUHAMMED) [SDT, FTO]
HOLBORN EUROPA RAFFINERIE GmbH (a.k.a. HER), Moorburger Strasse 16, D-
2100 Hamburg 90, Germany [LIBYA]
HOLBORN EUROPA RAFFINERIE GmbH (a.k.a. HER), Rothenbaumchaussee 5, 4th 
Floor, D-2000 Hamburg 13, Germany [LIBYA]
HOLBORN EUROPEAN MARKETING COMPANY LIMITED (a.k.a. HEMCL), Hofplein 33, 
3011 AJ Rotterdam, Netherlands [LIBYA]
HOLBORN EUROPEAN MARKETING COMPANY LIMITED (a.k.a. HEMCL), Miranda Court 
No. 1, Ipirou Street, P.O. Box 897, Larnaca, Cyprus [LIBYA]
HOLBORN INVESTMENT COMPANY LIMITED (a.k.a. HICL), Miranda Court No. 1, 
Ipirou Street, P.O. Box 897, Larnaca, Cyprus [LIBYA]
HOLGUIN SARRIA, Alvaro, c/o DISTRIBUIDORA DE DROGAS CONDOR LTDA., 
Bogota, Colombia; c/o DEPOSITO POPULAR DE DROGAS S.A., Cali, Colombia; 
c/o DERECHO INTEGRAL Y CIA. LTDA., Cali, Colombia; c/o DISTRIBUIDORA 
MIGIL LTDA., Cali, Colombia (Cedula No. 14950269 or 18950260 (Colombia)) 
(individual) [SDNT]
HOLY WAR BRIGADE (see JAPANESE RED ARMY) [FTO]
HOTEL MILANO DUE, Gzira, Malta [LIBYA]
HOTELES E INMUEBLES DE COLOMBIA LTDA., (a.k.a. HOTINCOL), Calle 74 No. 
53-30, Barranquilla, Colombia; NIT  800013139-3 (Colombia) 
[SDNT]

[[Page 966]]

HUA (see HARAKAT UL-MUJAHIDEEN) [FTO]
HUA (see HARAKAT UL-MUJAHIDIN) [FTO] [SDGT]
HUM (see HARAKAT UL-MUJAHIDEEN) [FTO]
HUM (see HARAKAT UL-MUJAHIDIN) [FTO] [SDGT]
HUNTSLAND NAVIGATION CO. LTD., c/o NIPPON CARIBBEAN SHIPPING CO. LTD., 
8th Floor, Tsukiji Hosoda Building, 2-1, Tsukiji 2-chome, Chuo-ku, 
Tokyo, Japan [CUBA]
HUNTSVILLE NAVIGATION CO. LTD., c/o NIPPON CARIBBEAN SHIPPING CO. LTD., 
8th Floor, Tsukiji Hosoda Building, 2-1, Tsukiji 2-chome, Chuo-ku, 
Tokyo, Japan [CUBA]
HUSAIN, Zain Al-Abidin Muhahhad (see ABU ZUBAYDAH) (individual) [SDGT]
HUSAYN, Zayn al-Abidin Muhammad (see ABU ZUBAYDAH) (individual) [SDGT]
HUSSEIN (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
HUSSEIN, Mahafudh Abubakar Ahmed Abdallah (see GHAILANI, Ahmed Khalfan) 
(individual) [SDGT]
HUSSEIN, Saddam (a.k.a. HUSAYN, Saddam; a.k.a. HUSSAIN, Saddam), 
President and Prime Minister, Iraq (DOB 28 April 1937) (individual) 
[IRAQ]
HUSSEIN, Udai Saddam, Baghdad, Iraq (individual) [IRAQ]
I.P.C. INTERNATIONAL LIMITED, England [IRAQ]
I.P.C. MARKETING LIMITED, England [IRAQ]
IBANEZ LOPEZ, Raul Alberto, c/o AGROPECUARIA LA ROBLEDA S.A., Cali, 
Colombia; c/o DISTRIBUIDORA DE ELEMENTOS PARA LA CONSTRUCCION S.A., 
Cali, Colombia; c/o GANADERIAS DEL VALLE S.A., Cali, Colombia; c/o 
INCOES LTDA., Cali, Colombia; c/o INMOBILIARIA U.M.V. S.A., Cali, 
Colombia; Cedula No. 16640123 (Colombia) (individual) [SDNT]
IBN SHATWAN, Fathi, Secretary of Industry of the Government of Libya, 
Libya (DOB 1950) (individual) [LIBYA]
IBRAHIM, Muhammad Ahmad, Secretary of Information, Culture, and Mass 
Mobilization of the Government of Libya, Libya (individual) [LIBYA]
IDARRAGA ESCANDON, Herned (Hernet), c/o DISMERCOOP, Cali, Colombia; c/o 
GRACADAL S.A., Cali, Colombia; Carrera 25A No. 49-73, Cali, Colombia 
(Cedula No. 16595668 (Colombia)) (individual) [SDNT]
IDARRAGA ORTIZ, Jaime, c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o 
DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, Colombia; c/o 
DISTRIBUIDORA DE DROGAS LA REBAJA S.A., Bogota, Colombia; c/o DROGAS LA 
REBAJA Bogota S.A., Bogota, Colombia; c/o FARMATODO S.A., Bogota, 
Colombia; c/o LABORATORIOS BLAIMAR DE COLOMBIA S.A., Bogota, Colombia; 
c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia; c/o 
DEPOSITO POPULAR DE DROGAS S.A., Cali, Colombia; c/o DISTRIBUIDORA MIGIL 
LTDA., Cali, Colombia; c/o INTERAMERICA DE CONSTRUCCIONES S.A., Cali, 
Colombia; c/o INVERSIONES CAMINO REAL S.A., Cali, Colombia (Cedula No. 
8237011 (Colombia)) (individual) [SDNT]
IDROBO ZAPATA, Edgar Hernando, c/o INMOBILIARIA U.M.V. S.A., Cali, 
Colombia; c/o INVERSIONES EL PEN[tilde]ON S.A., Cali, Colombia (Cedula 
No. 6078860 (Colombia)) (individual) [SDNT]
IG (see GAMA'A AL-ISLAMIYYA) [SDT, FTO]
IMPERATORI, Julio A., Managing Director, Havana International Bank, 20 
Ironmonger Lane, London EC2V 8EY, England (individual) [CUBA]
IMPORTADORA Y COMERCIALIZADORA LTDA. (a.k.a. IMCOMER), Avenida 6N y 
Avenida 4 No. 13N-50 of. 1201, Cali, Colombia (NIT  800152058-
0) [SDNT]
IMPRISA, S.A., Panama [CUBA]
IMPRISA, Spain [CUBA]
IMU (see ISLAMIC MOVEMENT OF UZBEKISTAN) [FTO] [SDGT]
INDUSTRIA AVICOLA PALMASECA S.A., Carrera 61 No. 11-58, Cali, Colombia; 
Carretera Central via Aeropuerto Palmaseca, Colombia [SDNT]
INDUSTRIA DE PESCA SOBRE EL PACIFICO S.A., (a.k.a. INPESCA S.A.), Km. 5 
El Pinal, Buenaventura, Colombia; Av. Simon Bolivar Km. 5 El Pinal, 
Buenaventura, Colombia; NIT  890302172-4 (Colombia) [SDNT]
INDUSTRIA MADERERA ARCA LTDA., Calle 11 No. 32-47 Bodega 41 Arroyohondo, 
Cali, Colombia; Calle 32 No. 11-41 Bodega 4 Arroyohondo, Cali, Colombia 
(NIT  800122866-7) [SDNT]
INDUSTRIAL BANK COMPANY FOR TRADE & DEVELOPMENT LIMITED, Khartoum, Sudan 
[SUDAN]
INDUSTRIAL BANK OF IRAQ (a.k.a. INDUSTRIAL BANK), Arbil, Iraq; P.O. Box 
5825, Al-Jamhourya Street, Baghdad, Iraq; Basrah, Iraq; Hilla, Iraq; 
Kerbala, Iraq; Kirkuk, Iraq; Mosul, Iraq; Najaf, Iraq; Sulaymania, Iraq 
[IRAQ]
INDUSTRIAL DE GESTION DE NEGOCIOS E.U., Calle 5C No. 41-30, Cali, 
Colombia; NIT  805005946-5 (Colombia) [SDNT]
INDUSTRIAL PRODUCTION CORPORATION, P.O. Box 1034, El Gamaa Street, 
Khartoum, Sudan [SUDAN]
INDUSTRIAL RESEARCH AND CONSULTANCY INSTITUTE, P.O. Box 268, Khartoum, 
Sudan [SUDAN]
INDUSTRIAS AGROPECUARIAS DEL VALLE LTDA., Carrera 50 No. 9B-20 of. 07, 
Cali, Colombia; Calle 52 No. 28E-30, Cali,

[[Page 967]]

Colombia; NIT 800068160-5 (Colombia) [SDNT]
INGASSANA HILLS MINES CORPORATION (a.k.a. INGESSANA HILLS MINES 
CORPORATION), P.O. Box 2241, Khartoum, Sudan; P.O. Box 1108, Khartoum, 
Sudan [SUDAN]
INGESSANA HILLS MINES CORPORATION (see INGASSANA HILLS MINES 
CORPORATION) [SUDAN]
INMOBILIARIA AURORA LTDA., Avenida Canasgordas con Avenida Guali Casa 
35, Cali, Colombia; Carrera 24F Oeste 3-70, Cali, Colombia; Carrera 38A 
No. 5E-31, Edificio Conquistadores, Cali, Colombia; Carrera 4 12-41 piso 
15, Edificio Seguros Bolivar, Cali, Colombia [SDNT]
INMOBILIARIA BOLIVAR LTDA., Calle 17N No. 6N-28, Cali, Colombia; Calle 
24N No. 6N-21, Cali, Colombia (NIT  890330573-3) [SDNT]
INMOBILIARIA DEL CARIBE LTDA., Calle 74 No. 53-30, Barranquilla, 
Colombia; NIT  890108105-1 (Colombia) [SDNT]
INMOBILIARIA GALES LTDA., Avenida Caracas No. 59-77, of. 201A, 401B y 
405B, Bogota, Colombia (NIT  800061287-1) [SDNT]
INMOBILIARIA HOTELERA DEL CARIBE LTDA., (a.k.a. INHOCAR), Calle 74 No. 
53-30, Barranquilla, Colombia; NIT  800012713-7 (Colombia) 
[SDNT]
INMOBILIARIA SAMARIA LTDA., Calle 13 3-32 piso 13, Cali, Colombia; Calle 
13A 64-50 F201, Cali, Colombia; Calle 18, No. 106-98 of. 201/202, Cali, 
Colombia; Carrera 4 12-41 piso 15, Edificio Seguros Bolivar, Cali, 
Colombia [SDNT]
INMOBILIARIA U.M.V. S.A., Carrera 83 No. 6-50, Edificio Alqueria, Torre 
C, of. 302, Cali, Colombia [SDNT]
INSTALACIONES INDUSTRIALES PENINSULARES, Calle 35 No. 498-A, ZP 97, 
Merida, Mexico [CUBA]
INSTITUTO NACIONAL DE TURISMO DE CUBA, Spain [CUBA]
INTERAMERICA DE CONSTRUCCIONES S.A. (f.k.a. ANDINA DE CONSTRUCCIONES 
S.A.), Calle 12 Norte No. 9N-56, Cali, Colombia (NIT  
800237404-2) [SDNT]
INTERCONSULT, Panama [CUBA]
INTERCREDITOS S.A. (a.k.a. INTERCREDITOS Bogota; a.k.a. INTERCREDITOS 
CALI), Bogota, Colombia; Avenida Roosevelt No. 38-32, piso 2, Cali, 
Colombia [SDNT]
INTERNATIONAL COBALT CO. INC., Fort Saskatchewan, AB, Canada [CUBA]
INTERNATIONAL FRONT FOR FIGHTING JEWS AND CRUSADES (see AL QAIDA) [SDT] 
[FTO] [SDGT]
INTERNATIONAL HOLDING COMPANY, Luxembourg Ville, Luxembourg [LIBYA]
INTERNATIONAL PETROLEUM, S.A. (a.k.a. IPESCO), Colon Free Zone, Panama 
[CUBA]
INTERNATIONAL TRANSPORT CORPORATION, Colon Free Zone, Panama [CUBA]
INTERVENTORIA, CONSULTORIA Y ESTUDIOS LIMITADA INGENIEROS ARQUITECTOS 
(a.k.a. INCOES), Avenida 6N No. 13N-50 of. 1209, Cali, Colombia (NIT 
 800144790-0) [SDNT]
INVERSIONES AGRICOLAS AVICOLAS Y GANADERAS LA CARMELITA LTDA., Carrera 
61 Nos. 11-58 y 11-62, Cali, Colombia (NIT  800052898-1) [SDNT]
INVERSIONES ARA LTDA., Avenida 4N 6N-67 of. 601, Cali, Colombia; Avenida 
6AN 18-69 1-128, Cali, Colombia; Avenida 6AN 23DN-16 of. 402, Cali, 
Colombia; Club El Remanso, Jamundi, Colombia [SDNT]
INVERSIONES ARIO LTDA., Carrera 4 No. 12-41 of. 608 y 701, Cali, 
Colombia (NIT  890328888-1) [SDNT]
INVERSIONES BETANIA LTDA., Avenida 2N No. 7N-55 of. 501, Cali, Colombia; 
Carrera 53 No. 13-55 apt. 102B, Cali, Colombia [SDNT]
INVERSIONES BETANIA LTDA. (see SAN MATEO S.A.) [SDNT]
INVERSIONES BETANIA S.A. (see SAN MATEO S.A.) [SDNT]
INVERSIONES BOMBAY S.A., (a.k.a. AGROVETERINARIA EL TORO; a.k.a. 
AGROVETERINARIA EL TORO 2), Transversal 29 No. 39-92, Bogota, 
Colombia; Calle 12B No. 28-50, Bogota, Colombia; Avenida 3 Bis Norte No. 
23CN-69, Cali, Colombia; Calle 7 No. 25-69, Cali, Colombia; NIT 
830019226-2 (Colombia) [SDNT]
INVERSIONES CAMINO REAL S.A., Calle 10 No. 4-47 piso 19, Cali, Colombia 
[SDNT]
INVERSIONES CAMINO REAL S.A. (see INVERSIONES Y CONSTRUCCIONES ABC S.A.) 
(Colombia) [SDNT]
INVERSIONES CULZAT GUEVARA Y CIA. S.C.S., Avenida 4A Oeste No. 5-107 
apt. 401, Cali, Colombia; Avenida 4A Oeste No. 5-187 apt. 401, Cali, 
Colombia; Avenida 7N No. 23N-39, Cali, Colombia (NIT  
860065523-1) [SDNT]
INVERSIONES EL EDEN S.C.S., Calle 5 No. 22-39 of. 205, Cali, Colombia; 
Calle 52 No. 28E-30, Cali, Colombia; NIT 800083195-5 (Colombia) 
[SDNT]
INVERSIONES EL GRAN CRISOL LTDA. (f.k.a. W. HERRERA Y CIA. S. EN C.), 
Avenida 2N 7N-55 of. 501, Cali, Colombia; Carrera 24D Oeste No. 6-237, 
Cali, Colombia; NIT  800001330-2 (Colombia) [SDNT]
INVERSIONES EL PASO LTDA. (f.k.a. INVERSIONES NEGOAGRICOLA S.A.), 
Carrera 4 No. 12-41 of. 1403, Cali, Colombia [SDNT]
INVERSIONES EL PEN[tilde]ON S.A., Avenida 2N, Cali, Colombia [SDNT]
INVERSIONES GEELE LTDA., Calle 17A No. 28A-23, Bogota, Colombia [SDNT]
INVERSIONES GEMINIS S.A., Carrera 40 No. 6-24 of. 402B, Cali, Colombia 
[SDNT]

[[Page 968]]

INVERSIONES GEMINIS S.A. (see COMPAN[tilde]IA ADMINISTRADORA DE VIVIENDA 
S.A.) [SDNT]
INVERSIONES HERREBE LTDA., Avenida 2N No. 7N-55 of. 501, Cali, Colombia; 
Carrera 25 No. 4-65, Cali, Colombia [SDNT]
INVERSIONES HOTELERAS DEL LITORAL LTDA., (a.k.a. INHOTEL), Calle 74 No. 
53-30, Barranquilla, Colombia; NIT  800011604-8 (Colombia) 
[SDNT]
INVERSIONES INTEGRAL LTDA., Carrera 4 No. 12-41 of. 1403, 1501 Edificio 
Seguros Bolivar, Cali, Colombia; Apartado Aereo 10077, Cali, Colombia; 
NIT  800092770-9 (Colombia) [SDNT]
INVERSIONES INTEGRAL Y CIA., Calle 16B No. 114-80 Casa 2, Cali, 
Colombia; Carrera 2 Oeste 5-46 apt/of 503, Cali, Colombia [SDNT]
INVERSIONES INVERVALLE S.A. (a.k.a. INVERVALLE), Avenida 2N No. 7N-55 
of. 501, Cali, Colombia; Calle 70N No. 14-31, Cali, Colombia [SDNT]
INVERSIONES INVERVALLE S.A. (see SAN VICENTE S.A.) [SDNT]
INVERSIONES JAER LTDA., Carrera 7 No. 34-341 Bodega 7, Cali, Colombia; 
Apartado Aereo 10454, Cali, Colombia; Calle 6A Norte No. 2N-36 of. 436, 
Cali, Colombia; Carrera 1H No. 39-42, Cali, Colombia; NIT  
890332242-1 (Colombia) [SDNT]
INVERSIONES LA SEXTA LTDA., Calle 10 No. 4-47 piso 19, Cali, Colombia 
[SDNT]
INVERSIONES LUPAMAR, S.A. (a.k.a. LUPAMAR INVESTMENT COMPANY), Panama 
[CUBA]
INVERSIONES MIGUEL RODRIGUEZ E HIJO, Avenida 4N 6N-67 of. 601, Cali, 
Colombia; Avenida 6N 23DN-16 of. 202, 301, 302, 401, 402, Cali, Colombia 
[SDNT]
INVERSIONES MOMPAX LTDA. (a.k.a. MOMPAX LTDA.), Calle 10 No. 4-47 piso 
19, Cali, Colombia [SDNT]
INVERSIONES MONDRAGON Y CIA. S.C.S. (f.k.a. MARIELA DE RODRIGUEZ Y CIA. 
S. EN C.), Calle 12 Norte No. 9N-56/58, Cali, Colombia; NIT  
890328152-1 (Colombia) [SDNT]
INVERSIONES NAMOS Y CIA. LTDA., Carrera 54 No. 75-107, Barranquilla, 
Colombia; NIT  800182475-7 (Colombia) [SDNT]
INVERSIONES PRADO TRADE CENTER LTDA., (a.k.a. IPRACARIBE), Calle 74 No. 
53-30, Barranquilla, Colombia; NIT  800236713-9 (Colombia) 
[SDNT]
INVERSIONES RODRIGUEZ ARBELAEZ Y CIA. S. EN C., Avenida 4N No. 5N-20, 
Cali, Colombia; Avenida 6N No. 23D-16 of. 402, Cali, Colombia [SDNT]
INVERSIONES RODRIGUEZ MORENO Y CIA. S. EN C., Calle 10 No. 4-47, Cali, 
Colombia [SDNT]
INVERSIONES RODRIGUEZ RAMIREZ Y CIA. S.C.S.S., Calle 10 No. 4-47 piso 
19, Cali, Colombia [SDNT]
INVERSIONES SAN JOSE LTDA., Carrera 7 No. 34-341, Cali Colombia; 
Apartado Aereo 10454, Cali, Colombia; Calle 44 No. 1E-135, Cali, 
Colombia; Calle 44 No. 1E-155, Cali, Colombia; NIT  800079682-5 
(Colombia) [SDNT]
INVERSIONES SANTA LTDA. (f.k.a. INVERSIONES Y CONSTRUCCIONES SANTA 
LIMITADA), Calle 13 3-32 piso 14, Cali, Colombia; Calle 5 66B-49 piso 3, 
Cali, Colombia; Calle 5 Oeste 3A-26 apt/of 103, 301, 404, 502, 503, 
Cali, Colombia; Calle 7 Oeste 2548, Cali, Colombia; Calle 9 No. 46-69 
Of. 302, Cali, Colombia; Carrera 2 Oeste 5-46 of 502, Cali, Colombia; 
Carrera 4 12-41 piso 14, Edificio Seguros Bolivar, Cali, Colombia; 
Carrera 4 12-41 piso 15, Edificio Seguros Bolivar, Cali, Colombia [SDNT]
INVERSIONES VILLA PAZ S.A., Avenida 2CN No. 24N-92, Cali, Colombia; 
Avenida 2DN No. 24-N76, Cali, Colombia; Calle 70N No. 14-31, Cali, 
Colombia; Carrera 61 No. 11-58, Cali, Colombia (NIT  800091083-
2) [SDNT]
INVERSIONES Y COMERCIALIZADORA RAMIREZ Y CIA. LTDA., Calle 12N No. 9N-
58, Cali, Colombia; Avenida 4 No. 8N-67, Cali, Colombia; NIT 
800075600-3 (Colombia) [SDNT]
INVERSIONES Y CONSTRUCCIONES ABC S.A. (f.k.a. INVERSIONES CAMINO REAL 
S.A.), Calle 10 No. 4-47 piso 19, Cali, Colombia; Calle 12 Norte No. 9N-
56/58, Cali, Colombia; NIT  890325389-4 (Colombia) [SDNT]
INVERSIONES Y CONSTRUCCIONES ATLAS LTDA., (f.k.a. INVERSIONES MOMPAX 
LTDA.), (f.k.a. MOMPAX LTDA.), Calle 10 No. 4-47 piso 19, Cali, 
Colombia; NIT  800102408-1 [SDNT]
INVERSIONES Y CONSTRUCCIONES COSMOVALLE LTDA. (a.k.a. COSMOVALLE; f.k.a. 
COMPAX LTDA.; f.k.a. INVERSIONES Y DISTRIBUCIONES COMPAX LTDA.), Calle 
10 No. 4-47 piso 19, Cali, Colombia (NIT  800102403-5) [SDNT]
INVERSIONES Y CONSTRUCCIONES VALLE S.A. (a.k.a. INCOVALLE), Avenida 2N 
No. 7N-55 of. 501, Cali, Colombia [SDNT]
INVERSIONES Y DISTRIBUCIONES COMPAX LTDA. (a.k.a. COMPAX LTDA.), Calle 
10 No. 4-47 piso 19, Cali, Colombia [SDNT]
INVERVALLE S.A. (see SAN VICENTE S.A.) [SDNT]
INVESTACAST PRECISION CASTINGS, LTD., 112 City Road, London, England 
[IRAQ]
INVHERESA S.A., Avenida 2N No. 7N-55 of. 501, Cali, Colombia; Calle 70N 
No. 14-31, Cali, Colombia (NIT  800108121-0) [SDNT]
INVHERESA S.A. (see ALKALA ASOCIADOS S.A.) [SDNT]
IRAQ-JORDAN LAND TRANSPORT COMPANY (a.k.a. IJLTC; a.k.a. IRAQI-JORDANIAN 
LAND TRANSPORT COMPANY; a.k.a. IRAQI-JORDANIAN OVERLAND TRANSPORT 
COMPANY), P.O. Box 5134, 4th Circle, Jabal, Amman, Jordan [IRAQ]

[[Page 969]]

IRAQI AIRWAYS, 1211 Avenue of the Americas, New York, New York 10036, 
U.S.A. [IRAQ]
IRAQI AIRWAYS, 25040 Southfield Road, Southfield, Michigan 48075, U.S.A. 
[IRAQ]
IRAQI AIRWAYS, 27, Ulica Grojecka, Central Warsaw, Poland [IRAQ]
IRAQI AIRWAYS, 4 Lower Regent Street, London SW1Y 4P, England [IRAQ]
IRAQI AIRWAYS, 5825 W. Sunset Blvd., 218, Los Angeles, 
California 90028, U.S.A. [IRAQ]
IRAQI AIRWAYS, Abu Dhabi, United Arab Emirates [IRAQ]
IRAQI AIRWAYS, Ankara, Turkey [IRAQ]
IRAQI AIRWAYS, Belgrade, Serbia [IRAQ]
IRAQI AIRWAYS, Building 68, J.F.K. International Airport, Jamaica, New 
York 11430, U.S.A. [IRAQ]
IRAQI AIRWAYS, Casablanca, Morocco [IRAQ]
IRAQI AIRWAYS, Copenhagen, Denmark [IRAQ]
IRAQI AIRWAYS, General Service Agent, Bangladeshi-Owned Travel Agency, 
Dhaka, Bangladesh [IRAQ]
IRAQI AIRWAYS, Jianguomenwai Diplomatic Housing Compound, Building 7-1, 
5th Floor, Apartment 4, Beijing, People's Republic of China [IRAQ]
IRAQI AIRWAYS, Main Eisenhuttenplatz 26, Frankfurt 6, Germany [IRAQ]
IRAQI AIRWAYS, Moscow, Russia [IRAQ]
IRAQI AIRWAYS, Nekazanka 3, Prague 1, Czech Republic [IRAQ]
IRAQI AIRWAYS, Netherlands [IRAQ]
IRAQI AIRWAYS, Opernring 6, 1010 Wien, Vienna, Austria [IRAQ]
IRAQI AIRWAYS, Prague Airport, Prague, Czech Republic [IRAQ]
IRAQI AIRWAYS, Rio de Janeiro, Brazil [IRAQ]
IRAQI AIRWAYS, Rome, Italy [IRAQ]
IRAQI AIRWAYS, Saddam International Airport, Baghdad, Iraq [IRAQ]
IRAQI AIRWAYS, Sanaa, Yemen Arab Republic [IRAQ]
IRAQI AIRWAYS, Tokyo, Japan [IRAQ]
IRAQI AIRWAYS, Tunis, Tunisia [IRAQ]
IRAQI ALLIED SERVICES LIMITED, England [IRAQ]
IRAQI FREIGHT SERVICES LIMITED, England [IRAQ]
IRAQI REINSURANCE COMPANY, 31-35 Fenchurch Street, London EC3M 3D, 
England [IRAQ]
IRAQI STATE ENTERPRISE FOR FOODSTUFFS TRADING, P.O. Box 1308, Colombo 3, 
Sri Lanka [IRAQ]
IRAQI STATE ENTERPRISE FOR FOODSTUFFS TRADING, P.O. Box 2839, Calcutta 
700.001, India [IRAQ]
IRAQI STATE ENTERPRISE FOR MARITIME TRANSPORT, Amman, Jordan [IRAQ]
IRAQI STATE ENTERPRISE FOR MARITIME TRANSPORT, Bremen, Germany [IRAQ]
IRAQI TRADE CENTER, Dubai, United Arab Emirates [IRAQ]
IRISH REPUBLICAN PRISONERS WELFARE ASSOCIATION (a.k.a. 32 COUNTY 
SOVEREIGNTY COMMITTEE; a.k.a. 32 COUNTY SOVEREIGNTY MOVEMENT; a.k.a. 
REAL IRA; a.k.a. REAL IRISH REPUBLICAN ARMY; a.k.a. REAL OGLAIGH NA 
HEIREANN; a.k.a. RIRA) [FTO]
ISLAMBOULI, Mohammad Shawqi, Military Leader of ISLAMIC GAMA'AT (DOB 15 
January 1955, POB Egypt, Passport No. 304555 (Egypt)) (individual) [SDT]
ISLAMIC ARMY (a.k.a. AL-QAIDA; a.k.a. ISLAMIC SALVATION FOUNDATION; 
a.k.a. THE ISLAMIC ARMY FOR THE LIBERATION OF THE HOLY PLACES; a.k.a. 
THE WORLD ISLAMIC FRONT FOR JIHAD AGAINST JEWS AND CRUSADERS; a.k.a. THE 
GROUP FOR THE PRESERVATION OF THE HOLY SITES) [SDT]
ISLAMIC ARMY (see AL QA'IDA) [SDT, FTO]
ISLAMIC ARMY (see AL QAIDA) [SDT] [FTO] [SDGT]
ISLAMIC ARMY FOR THE LIBERATION OF THE HOLY PLACES (see AL QA'IDA) [SDT, 
FTO]
THE ISLAMIC ARMY FOR THE LIBERATION OF THE HOLY PLACES (see AL QAIDA) 
[SDT] [FTO] [SDGT]
ISLAMIC ARMY FOR THE LIBERATION OF THE HOLY PLACES, THE (see ISLAMIC 
ARMY) [SDT]
ISLAMIC ARMY FOR THE LIBERATION OF HOLY SITES (see AL QAIDA) [SDT] [FTO] 
[SDGT]
ISLAMIC ARMY OF ADEN [SDGT]
ISLAMIC CO-OPERATIVE DEVELOPMENT BANK (a.k.a. ICDB), P.O. Box 62, 
Khartoum, Sudan [SUDAN]
ISLAMIC GAMA'AT (see GAMA'A AL-ISLAMIYYA) [SDT, FTO]
ISLAMIC GROUP (see GAMA'A AL-ISLAMIYYA) [ SDT, FTO]
ISLAMIC JIHAD (see HIZBALLAH) [SDT, FTO]
ISLAMIC JIHAD FOR THE LIBERATION OF PALESTINE (see HIZBALLAH) [SDT, FTO]
ISLAMIC JIHAD IN PALESTINE (see PALESTINE ISLAMIC JIHAD-SHAQAQI FACTION) 
[SDT, FTO]
ISLAMIC JIHAD OF PALESTINE (see PALESTINE ISLAMIC JIHAD-SHAQAQI FACTION) 
[SDT, FTO]
ISLAMIC JIHAD ORGANIZATION (see HIZBALLAH) [SDT, FTO]
ISLAMIC MOVEMENT OF TALIBAN (see TALIBAN) [TALIBAN]
ISLAMIC MOVEMENT OF UZBEKISTAN (a.k.a. IMU) [FTO] [SDGT]

[[Page 970]]

THE ISLAMIC MOVEMENT OF UZBEKISTAN [FTO]
ISLAMIC RESISTANCE MOVEMENT (see HAMAS) [SDT, FTO]
ISLAMIC SALVATION FOUNDATION (see AL QA'IDA) [SDT, FTO]
ISLAMIC SALVATION FOUNDATION (see AL QAIDA) [SDT] [FTO] [SDGT]
ISLAMIC SALVATION FOUNDATION (see ISLAMIC ARMY) [SDT]
IZQUIERDO OREJUELA, Patricia, c/o LABORATORIOS KRESSFOR DE COLOMBIA 
S.A., Bogota, Colombia (Cedula No. 41594424 (Colombia)) (individual) 
[SDNT]
IZQUIERDO QUINTERO, Rosalino, c/o INVERSIONES INVERVALLE S.A., Cali, 
Colombia (Cedula No. 70111037 (Colombia)) (individual) [SDNT]
IZZ AL-DIN AL QASSAM BATTALIONS (see HAMAS) [SDT, FTO]
IZZ AL-DIN AL QASSAM BRIGADES (see HAMAS) [SDT, FTO]
IZZ AL-DIN AL QASSAM FORCES (see HAMAS) [SDT, FTO]
IZZ AL-DIN AL-QASSIM BATTALIONS (see HAMAS) [SDT, FTO]
IZZ AL-DIN AL-QASSIM BRIGADES (see HAMAS) [SDT, FTO]
IZZ AL-DIN AL-QASSIM FORCES (see HAMAS) [SDT, FTO]
IZZ-AL-DIN, Hasan (a.k.a. GARBAYA, Ahmed; a.k.a. SA-ID; a.k.a. SALWWAN, 
Samir), Lebanon (DOB 1963; POB Lebanon; Citizen Lebanon) (individual) 
[SDGT]
JABRIL, Ahmad (a.k.a. JIBRIL, Ahmad), Secretary General of POPULAR FRONT 
FOR THE LIBERATION OF PALESTINE - GENERAL COMMAND (DOB 1938, POB Ramleh, 
Israel) (individual) [SDT]
JAIMES RIVERA, Jose Isidro, c/o ADMINISTRACION INMOBILIARIA BOLIVAR 
S.A., Cali, Colombia; c/o COMERCIALIZADORA INTERNACIONAL VALLE DE ORO 
S.A., Cali, Colombia; c/o CONCRETOS CALI S.A., Cali, Colombia; c/o 
CONSTRUCTORA DIMISA LTDA., Cali, Colombia; c/o CONSULTORIA EMPRESARIAL 
ESPECIALIZADA LTDA., Cali, Colombia; c/o GANADERIAS DEL VALLE S.A., 
Cali, Colombia; c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia; c/o 
INVERSIONES BETANIA LTDA., Cali, Colombia; c/o INVERSIONES EL 
PEN[tilde]ON S.A., Cali, Colombia; c/o INVERSIONES GEMINIS S.A., Cali, 
Colombia; c/o SOCOVALLE LTDA., Cali, Colombia; c/o INDUSTRIA DE CARNES 
LTDA., Pereira, Colombia (Cedula No. 19090006 (Colombia)) (individual) 
[SDNT]
JAISH-I-MOHAMMED (a.k.a. ARMY OF MOHAMMED), Pakistan [SDGT]
JAMAHIRIYA BANK (f.k.a. MASRAF AL-GUMHOURIA) (38 local branches in 
Libya) [LIBYA]
JAMAHIRIYA BANK (f.k.a. MASRAF AL-GUMHOURIA), Emhemed Megrief Street, 
Tripoli, Libya [LIBYA]
JAMAHIRIYA BANK (f.k.a. MASRAF AL-GUMHOURIA), P.O. Box 1291, Benghazi, 
Libya [LIBYA]
JAMAHIRIYA BANK (f.k.a. MASRAF AL-GUMHOURIA), P.O. Box 3224, Martyr 
Street, Megarief, Tripoli, Libya [LIBYA]
JAM'IYAT AL TA'AWUN AL ISLAMIYYA (see JAM'YAH TA'AWUN AL-ISLAMIA) [SDGT]
JAM'YAH TA'AWUN AL-ISLAMIA (a.k.a. JAM'IYAT AL TA'AWUN AL ISLAMIYYA; 
a.k.a. JIT; a.k.a. SOCIETY OF ISLAMIC COOPERATION), Qandahar City, 
Afghanistan [SDGT]
JANJIC, Stanisa, Director of JUMKO Holding; member of SPS Main Committee 
(DOB 10 Mar 48) (individual) [FRYM]
JANKOVIC, Gojko, (ICTY indictee, Bosnian Serb) (DOB 31 Oct 54) 
(individual) [FRYM]
JANKOVIC, Tomislav, President of Galenika Board (individual) [FRYM]
JANUARY SHUHADA (MARTYRS) PLANT, Libya [LIBYA]
JAPANESE RED ARMY (a.k.a. NIPPON SEKIGUN; a.k.a. NIHON SEKIGUN; a.k.a. 
ANTI-IMPERIALIST INTERNATIONAL BRIGADE; a.k.a. HOLY WAR BRIGADE; a.k.a. 
ANTI-WAR DEMOCRATIC FRONT; a.k.a. JRA; a.k.a. AIIB) [FTO]
JARACO S.A. (a.k.a. SOKTAR; f.k.a. TRADACO S.A.), 45 Route de Frontenex, 
CH-1207 Geneva, Switzerland [IRAQ]
JARAMILLO F., Harvy, c/o DISMERCOOP, Cali, Colombia (Cedula No. 16711189 
(Colombia)) (individual) [SDNT]
JARDINE HOUSE, 6 Crutched Friars, London EC3N 2HT, England [LIBYA]
JASIM, Latif Nusayyif (a.k.a. JASSEM, Latif Nassif), Minister of Labor 
and Social Affairs, Baghdad, Iraq (DOB 1941) (individual) [IRAQ]
JAWABY TECHNICAL SERVICES LIMITED (a.k.a. TEKXEL LIMITED), London, 
England [LIBYA]
JERMA PALACE HOTEL, Maarsancala, Malta [LIBYA]
JIHAD, Abu (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
JIHAD GROUP (see AL-JIHAD) [SDT, FTO]
JIHAD GROUP (see AL-JIHAD) [SDT] [FTO] [SDGT]
JIMENEZ, Isabel Cristina, c/o INVERSIONES Y CONSTRUCCIONES ATLAS LTDA., 
Cali, Colombia; (Cedula No. 66852533 (Colombia)) (individual) [SDNT]
JIMINEZ, Gillermo (SOLER), Panama (individual) [CUBA]
JIT (see JAM'YAH TA'AWUN AL-ISLAMIA) [SDGT]
JOCIC, Vladislav, General Manager of Sabacka Banka AD (individual) 
[FRYM]
JOINT TURKISH LIBYAN AGRICULTURAL LIVESTOCK COMPANY, Ankara, Turkey 
[LIBYA]

[[Page 971]]

JON, Hana Paul, 19 Tudor House, Windsor Way, Brook Green, London, 
England (individual) [IRAQ]
JOSIC, Milan, General Manager of Loznicka Banka AD (individual) [FRYM]
JOWFE (a.k.a. NATIONAL COMPANY DRILLING CHEMICAL & EQUIPMENT), NOC 
Building, Ashjara Square, Benghazi, Libya [LIBYA]
JRA (see JAPANESE RED ARMY) [FTO]
JUBA DUTY FREE SHOP, Juba, Sudan [SUDAN]
JUDEA POLICE (see KACH) [SDT, FTO]
JUME'AN, George, P.O. Box 1318, Amman, Jordan (individual) [IRAQ]
THE JUDEAN LEGION (see KAHANE CHAI) [SDT, FTO]
THE JUDEAN VOICE (see KAHANE CHAI) [SDT, FTO]
JUNE 78 (see REVOLUTIONARY PEOPLE'S STRUGGLE) [FTO]
K. P. TO JEANS WEAR S. DE H., Calle 78 No. 53-70 Local 218, 
Barranquilla, Colombia; NIT  800211718-7 (Colombia) [SDNT]
KACH (a.k.a. REPRESSION OF TRAITORS; a.k.a. DIKUY BOGDIM; a.k.a. DOV; 
a.k.a. STATE OF JUDEA; a.k.a. COMMITTEE FOR THE SAFETY OF THE ROADS; 
a.k.a. SWORD OF DAVID; a.k.a. JUDEA POLICE; a.k.a. FOREFRONT OF THE 
IDEA; a.k.a. THE QOMEMIYUT MOVEMENT; a.k.a. THE YESHIVA OF THE JEWISH 
IDEA) [SDT, FTO]
KADHUM, Dr. Fadel Jawad, c/o Alvaney Court, 250 Finchley Road, London, 
England (individual) [IRAQ]
KADI, Shaykh Yassin Abdullah (see AL-QADI, Yasin) (individual) [SDGT]
KADUMPORN, Somboon (see WEI, Hsueh Kang) (individual) [SDNTK]
KAELBLE-GMEINDER GMBH (a.k.a. KAELBLE & GMEINDER COMPANY), Maubacher 
Strasse 100, Postfach 13 20, W-7150 Backnang, Germany [LIBYA]
KAHANE CHAI (a.k.a. KAHANE LIVES; a.k.a. KFAR TAPUAH FUND; a.k.a. THE 
JUDEAN VOICE; a.k.a. THE JUDEAN LEGION; a.k.a. THE WAY OF THE TORAH; 
a.k.a. THE YESHIVA OF THE JEWISH IDEA; a.k.a. KOACH) [SDT, FTO]
KAHANE LIVES (see KAHANE CHAI) [SDT, FTO]
KAHDI, Yasin (see AL-QADI, Yasin) (individual) [SDGT]
KAMALATA, Abilio Jose Augusto ``Numa'' (a.k.a. CAMALATA, Abilio), 
General of UNITA; DOB 31 August 1955; POB Cubal, Benguela Province, 
Angola (individual) [UNITA]
KANDEYA, Amilcar Jose Mateus (see CANDEIA, Anibal Jose Mateus ``Kile'') 
(individual) [UNITA]
KANDEYA, Anibal (see CANDEIA, Anibal Jose Mateus ``Kile'') (individual) 
[UNITA]
KARADZIC, Radovan, (ICTY indictee, Bosnian Serb) (DOB 19 Jun 45; POB 
Petnica, Montenegro) (individual) [FRYM]
KARAGHULLY, Labeed A., General Manager of REAL ESTATE BANK, Iraq 
(individual) [IRAQ]
KARIC, Palmira Bogoljub, Businessman; ex-Minister without Portfolio, 
Republic of Serbia (DOB 17 Jan 54; POB Pec, Kosovo) (individual) [FRYM]
KARIM, Jamil Abdul (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIL, Jamil; a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; 
a.k.a. HAMIYYAH, Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; 
a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB Sep 1938 
(individual) [SDNTK]
KARIMA DATE FACTORY, Karima, Sudan [SUDAN]
KARIMA FRUIT AND VEGETABLE CANNING FACTORY, P.O. Box 54, Karima, Sudan 
[SUDAN]
KASPAR SHIPPING CO. S.A., c/o EMPRESA DE NAVEGACION CARIBE, Edificio 
Lonja del Comercio, Lamparilla 2, Caja Postal 1784, Havana 1, Cuba 
[CUBA]
KASSALA FRUIT PROCESSING COMPANY, Khartoum, Sudan [SUDAN]
KASSALA ONION DEHYDRATION FACTORY, P.O. Box 22, Kassala, Sudan [SUDAN]
KAVE, S.A., Panama [CUBA]
KEENCLOUD LIMITED, 11 Catherine Place, Westminister, London, England 
[IRAQ]
KENAF SOCKS FACTORY, Abu Naama, Sudan [SUDAN]
KERTES, Mihail, Ex-Director of Customs, Federal Republic of Yugoslavia 
(DOB 29 Aug 47; POB Palanka, Vojvodina, Serbia) (individual) [FRYM]
KFAR TAPUAH FUND (see KAHANE CHAI) [SDT, FTO]
KHABAR, Abu (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
KHALFAN, Ahmed (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
KHALID (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
KHALIL, Dr. Ahmad Murtada Ahmad (a.k.a. KHALIL, Ahmad Murtadha Ahmad), 
Minister of Transport and Communications, Iraq (individual) [IRAQ]
KHAN, Abdullah (a.k.a. AFGHAN, Shear; a.k.a. AFGHAN, Sher; a.k.a. 
AFGHAN, Shir; a.k.a. AZIZ, Mohammad) DOB 1962; alt. DOB 1959; POB 
Pakistan (individual) [SDNTK]

[[Page 972]]

KHAN, Ali (a.k.a. KHAN, Nafir Ali; a.k.a. KHAN, Nasir Ali; a.k.a. KHAN, 
Nazir Ali; a.k.a. KHAN, Nisan Ali; a.k.a. KHAN, Nisar Ali; a.k.a. NASIR, 
Ali Khan; a.k.a. NASIR, Khan Ali); DOB 1 Oct 1955; POB Pakistan 
(individual) [SDNTK]
KHAN, Nafir Ali (a.k.a. KHAN, Ali; a.k.a. KHAN, Nasir Ali; a.k.a. KHAN, 
Nazir Ali; a.k.a. KHAN, Nisan Ali; a.k.a. KHAN, Nisar Ali; a.k.a. NASIR, 
Ali Khan; a.k.a. NASIR, Khan Ali); DOB 1 Oct 1955; POB Pakistan 
(individual) [SDNTK]
KHAN, Nasir Ali (a.k.a. KHAN, Ali; a.k.a. KHAN, Nafir Ali; a.k.a. KHAN, 
Nazir Ali; a.k.a. KHAN, Nisan Ali; a.k.a. KHAN, Nisar Ali; a.k.a. NASIR, 
Ali Khan; a.k.a. NASIR, Khan Ali); DOB 1 Oct 1955; POB Pakistan 
(individual) [SDNTK]
KHAN, Nazir Ali (a.k.a. KHAN, Ali; a.k.a. KHAN, Nafir Ali; a.k.a. KHAN, 
Nasir Ali; a.k.a. KHAN, Nisan Ali; a.k.a. KHAN, Nisar Ali; a.k.a. NASIR, 
Ali Khan; a.k.a. NASIR, Khan Ali); DOB 1 Oct 1955; POB Pakistan 
(individual) [SDNTK]
KHAN, Nisan Ali (a.k.a. KHAN, Ali; a.k.a. KHAN, Nafir Ali; a.k.a. KHAN, 
Nasir Ali; a.k.a. KHAN, Nazir Ali; a.k.a. KHAN, Nisar Ali; a.k.a. NASIR, 
Ali Khan; a.k.a. NASIR, Khan Ali); DOB 1 Oct 1955; POB Pakistan 
(individual) [SDNTK]
KHAN, Nisar Ali (a.k.a. KHAN, Ali; a.k.a. KHAN, Nafir Ali; a.k.a. KHAN, 
Nasir Ali; a.k.a. KHAN, Nazir Ali; a.k.a. KHAN, Nisan Ali; a.k.a. NASIR, 
Ali Khan; a.k.a. NASIR, Khan Ali); DOB 1 Oct 1955; POB Pakistan 
(individual) [SDNTK]
KHARTOUM CENTRAL FOUNDRY, Khartoum, Sudan [SUDAN]
KHARTOUM COMMERCIAL AND SHIPPING COMPANY LIMITED, Kasr Avenue, P.O. Box 
221, Khartoum, Sudan [SUDAN]
KHARTOUM TANNERY, P.O. Box 134, Khartoum South, Sudan [SUDAN]
KHOMS CEMENT PLANT, Khoms, Libya [LIBYA]
KHOR OMER ENGINEERING COMPANY, P.O. Box 305, Khartoum, Sudan [SUDAN]
KHUN SA (see CHANG, Chi Fu) (individual) [SDNTK]
KHUN, Saeng (a.k.a CHANG, Ping Yun); DOB 7 Jan 1940; POB Burma 
(individual) [SDNTK]
KKCMTSH (see NATIONAL COMMITTEE FOR THE LIBERATION AND PROTECTION OF 
ALBANIAN LANDS) [BALKANS]
KNEZEVIC, Dusan, (ICTY indictee, Bosnian Serb) (DOB 23 Jun 55; POB 
Orlovci) (individual) [FRYM]
KOACH (see KAHANE CHAI) [SDT, FTO]
KOL INVESTMENTS, INC., Miami, Florida, U.S.A. [CUBA]
KORDOFAN AUTOMOBILE COMPANY, P.O. Box 97, Khartoum, Sudan [SUDAN]
KORDOFAN COMPANY, Khartoum, Sudan [SUDAN]
KRIKAH INDUSTRIES GROUP, P.O. Box 755, Khartoum North, Sudan [SUDAN]
KUFRA AGRICULTURAL CO., P.O. Box 4239, Benghazi, Libya; Tripoli Office, 
P.O. Box 2306, Damascus Street, Tripoli, Libya [LIBYA]
KUFRA PRODUCTION PROJECT, P.O. Box 6324, Benghazi, Libya; P.O. Box 2306, 
Tripoli, Libya [LIBYA]
KURDISTAN WORKERS` PARTY (a.k.a. PKK; a.k.a. PARTIYA KARKERAN KURDISTAN) 
[FTO]
KUWAYBAH, Muftah Muhammad, Secretary of Marine Resources of the 
Government of Libya, Libya (individual) [LIBYA]
KYOEI INTERNATIONAL COMPANY, LIMITED, Tokyo, Japan [CUBA]
LA COMPANIA GENERAL DE NIQUEL (a.k.a. GENERAL NICKEL SA), Cuba [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Barcelona, Spain [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Buenos Aires, Argentina [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Genoa, Italy [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Mexico [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Montreal, Canada [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Moscow, Russia [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Pyongyang, Korea (Peoples Democratic Republic) [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Rostock, Germany [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Rotterdam, Netherlands [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Syczecin, Poland [CUBA]
LA EMPRESA CUBANA DE FLETES (a.k.a. CUBAN FREIGHT ENTERPRISE; a.k.a. 
CUFLET), Varna, Bulgaria [CUBA]
LABORATORIOS BLAIMAR DE COLOMBIA S.A. (a.k.a. BLAIMAR), Calle 12B 27 39, 
Bogota, Colombia [SDNT]
LABORATORIOS BLANCO PHARMA S.A. (a.k.a. BLANCO PHARMA S.A.), Carrera 99 
y 100 No. 46A-10, Bodega 4, Bogota, Colombia [SDNT]
LABORATORIOS GENERICOS VETERINARIOS DE COLOMBIA S.A, Carrera 71 No. 57-
07, Bogota, Colombia [SDNT]
LABORATORIOS KRESSFOR DE COLOMBIA S.A. (a.k.a. KRESSFOR), Calle 16 28A 
51, Bogota, Colombia; Calle 16 28A 57, Bogota, Colombia; Calle 17 28A-
43, Bogota,

[[Page 973]]

Colombia; Calle 17A 28 43, Bogota, Colombia [SDNT]
LADEHYANOY, Mufti Rashid Ahmad (a.k.a. LUDHIANVI, Mufti Rashid Ahmad; 
a.k.a. AHMAD, Mufti Rasheed; a.k.a. WADEHYANOY, Mufti Rashid Ahmad), 
Karachi, Pakistan (individual) [SDGT]
LAFI TRADE MALTA, 14517 Tower Road, Sliema, Malta [LIBYA]
LAFITRADE HOLDINGS BV, P.O. Box 75265, 1070 AG Amsterdam, Netherlands; 
De Lairessestraat 133, 1075 HJ Amsterdam, Netherlands [LIBYA]
LAHMAR, Mohammed, Dat El Imad Administrative Complex Tower No. 2, P.O. 
Box 2542, Tripoli, Libya (individual) [LIBYA]
LAKSHMI, Panama [CUBA]
LARRANAGA CALVACHE, Juan Carlos, c/o ADMINISTRACION INMOBILIARIA BOLIVAR 
S.A., Cali, Colombia; c/o COMERCIALIZADORA INTERNACIONAL VALLE DE ORO 
S.A., Cali, Colombia; c/o INMOBILIARIA BOLIVAR LTDA., Cali, Colombia; c/
o INVERSIONES EL PEN[tilde]ON S.A., Cali, Colombia (Cedula No. 12982064 
(Colombia)) (individual) [SDNT]
LAVERDE GOMEZ, German, c/o CONSTRUCTORA ALTOS DEL RETIRO LTDA., Bogota, 
Colombia (individual) [SDNT]
LAYAS, Mohammed Hussein, Tripoli, Libya (individual) [LIBYA]
LE GROUPE SALAFISTE POUR LA PREDICATION ET LE COMBAT (see SALAFIST GROUP 
FOR CALL AND COMBAT) [SDGT]
LEAL FLOREZ, Luis Alejandro, c/o COINTERCOS S.A., Bogota, Colombia; c/o 
DISTRIBUIDORA DE DROGAS CONDOR S.A., Bogota, Colombia; c/o FIDUSER 
LTDA., Bogota, Colombia; Cedula No. 7217432 (Colombia) (individual) 
[SDNT]
LEAL RODRIGUEZ, Jose Guillermo, c/o DECAFARMA S.A., Bogota, Colombia; c/
o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia; c/o PENTA 
PHARMA DE COLOMBIA S.A., Bogota, Colombia; c/o PENTACOOP LTDA., Bogota, 
Colombia; Cedula No. 89867 (Colombia) (individual) [SDNT]
LEATHER INDUSTRIES CORPORATION (a.k.a. LEATHER INDUSTRIES TANNERIES), 
P.O. Box 1639, Khartoum, Sudan [SUDAN]
LEATHER INDUSTRIES TANNERIES (see LEATHER INDUSTRIES CORPORATION) 
[SUDAN]
LEBREDO, Jose A., Director, Banco Nacional de Cuba, Zweierstrasse 35, 
CH-8022 Zurich, Switzerland (individual) [CUBA]
LEVERAGE, S.A., San Martin 323, Piso 14, Buenos Aires, Argentina [CUBA]
LEVERYE, S.A., Corrientes 1386, 5th Floor, Buenos Aires, Argentina 
[CUBA]
LEYBDA CORPORATION, S.A., Panama [CUBA]
LIBERATION ARMY OF PRESEVO, MEDVEDJA, AND BUJANOVAC (a.k.a. PMBLA; 
a.k.a. UCPMB) [BALKANS]
LIBERATION STRUGGLE (see REVOLUTIONARY PEOPLE'S STRUGGLE) [FTO]
LIBERATION TIGERS OF TAMIL EELAM (a.k.a. LTTE; a.k.a. TAMIL TIGERS; 
a.k.a. ELLALAN FORCE) [FP-2]
LIBERIAN LIBYAN HOLDING COMPANY, Monrovia, Liberia [LIBYA]
LIBREROS DIEZ, Orlando, c/o CONSTRUCTORA DIMISA LTDA., Cali,Colombia; c/
o DISTRIBUIDORA DE ELEMENTOS PARA LA CONSTRUCCION S.A., Cali, Colombia; 
c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, Colombia; c/o VALLE 
COMUNICACIONES LTDA., Cali, Colombia; Cedula No. 16651068 (Colombia) 
(individual) [SDNT]
LIBYA INSURANCE CO. (CYPRUS OFFICE) LTD., Cyprus [LIBYA]
LIBYA INSURANCE COMPANY, Cyprus Office, Nicosia, Cyprus [LIBYA]
LIBYA INSURANCE COMPANY, P.O. Box 2438, Usama Bldg., 1st September 
Street, Tripoli, Libya (7 main branches and 58 sub-branches in Libya) 
[LIBYA]
LIBYAN ARAB AIRLINES (Numerous branch offices and facilities abroad) 
[LIBYA]
LIBYAN ARAB CO. FOR DOMESTIC ELECTRICAL MATERIALS, P.O. Box 453, 
Benghazi, Libya; P.O. Box 12718, Tripoli, Libya [LIBYA]
LIBYAN ARAB FOREIGN BANK (a.k.a. LAFB), Dat El Imad Complex Tower No. 2, 
P.O. Box 2542, Tripoli, Libya [LIBYA]
LIBYAN ARAB FOREIGN INVESTMENT COMPANY (a.k.a. LAFICO), Athens, Greece 
[LIBYA]
LIBYAN ARAB FOREIGN INVESTMENT COMPANY (a.k.a. LAFICO), Malta [LIBYA]
LIBYAN ARAB FOREIGN INVESTMENT COMPANY (a.k.a. LAFICO), Rome, Italy 
[LIBYA]
LIBYAN ARAB MALTESE HOLDING CO. LTD. (a.k.a. LAMHCO), St. Mark House, 
Cappuchan Street, Floriana, Malta [LIBYA]
LIBYAN ARAB UGANDA HOLDING CO. LTD. (a.k.a. UGANDA LIBYAN HOLDING CO. 
LTD.), Kampala, Uganda [LIBYA]
LIBYAN BRICK MANUFACTURING CO., P.O. Box 25, Km. 17, Suani Road, Suani, 
Libya; P.O. Box 10700, Tripoli, Libya [LIBYA]
LIBYAN CEMENT CO., P.O. Box 2108, Benghazi, Libya [LIBYA]
LIBYAN CINEMA CORPORATION, P.O. Box 2076, Benghazi, Libya; P.O. box 878, 
Tripoli, Libya [LIBYA]
LIBYAN ETERNIT COMPANY, P.O. Box 6103, Zanzour Km. 17, Tripoli, Libya 
[LIBYA]
LIBYAN FISHING COMPANY, P.O. Box 3749, Tripoli, Libya [LIBYA]

[[Page 974]]

LIBYAN-GREEK INVESTMENT COMPANY, Athens, Greece [LIBYA]
LIBYAN HOTELS AND TOURISM CO., P.O. Box 2977, Tripoli, Libya [LIBYA]
LIBYAN INSURANCE COMPANY, Benghazi, Libya; Derna, libya; Gharian, Libya; 
Homs, Libya; Misurata, Libya; Sebha, Libya; Ousama Bldg, 1st September 
Street, P.O. Box 2438, Tripoli, Libya; Zawiya, Libya [LIBYA]
LIBYAN ISLAMIC FIGHTING GROUP [SDGT]
LIBYAN MILLS COMPANY, Sharia 1st September, P.O. Box 310, Tripoli, Libya 
[LIBYA]
LIBYAN NATIONAL OIL CORPORATION (a.k.a. LNOC; a.k.a. NATIONAL OIL 
CORPORATION; a.k.a. NOC), Dahra Gas Projects Office, Dahra Street, P.O. 
Box 12221, Dahra, Tripoli, Libya [LIBYA]
LIBYAN NATIONAL OIL CORPORATION (a.k.a. LNOC; a.k.a. NATIONAL OIL 
CORPORATION; a.k.a. NOC), Petroleum Training and Qualifying Institute, 
Zawia Road, Km. 9, P.O. Box 6184, Tripoli, Libya [LIBYA]
LIBYAN NATIONAL OIL CORPORATION (a.k.a. LNOC; a.k.a. NATIONAL OIL 
CORPORATION; a.k.a. NOC) (Subsidiaries and joint ventures in Libya and 
worldwide) [LIBYA]
LIBYAN NATIONAL OIL CORPORATION (a.k.a. LNOC; a.k.a. NATIONAL OIL 
CORPORATION; a.k.a. NOC), P.O. Box 2978, Benghazi, Libya [LIBYA]
LIBYAN NATIONAL OIL CORPORATION (a.k.a. LNOC; a.k.a. NATIONAL OIL 
CORPORATION; a.k.a. NOC), Petroleum Research Centre, Al Nasser Street, 
P.O. Box 6431, Tripoli, Libya [LIBYA]
LIBYAN NATIONAL OIL CORPORATION (a.k.a. LNOC; a.k.a. NATIONAL OIL 
CORPORATION; a.k.a. NOC), Bashir Saadawi Street, P.O. Box 2655, Tripoli, 
Libya [LIBYA]
LIBYAN TRACTOR ESTABLISHMENT, P.O. Box 12507, Dahra, Libya [LIBYA]
LICOREXPORT S.A., Quito, Ecuador [CUBA]
LINARES REYES, Ricardo Jose (a.k.a. LLENARES REYES, Jose Ricardo), c/o 
ADMINISTRACION INMOBILIARIA BOLIVAR S.A., Cali, Colombia; c/o CONCRETOS 
CALI S.A., Cali, Colombia; c/o CONSTRUEXITO S.A., Cali, Colombia; c/o 
INCOVALLE, Cali, Colombia; c/o INVERSIONES BETANIA LTDA., Cali, 
Colombia; c/o INVERSIONES EL PEN[tilde]ON S.A., Cali, Colombia; c/o 
INVERSIONES HERREBE LTDA., Cali, Colombia; c/o INVERSIONES INVERVALLE 
S.A., Cali, Colombia; c/o INVHERESA S.A., Cali, Colombia; c/o VIAJES 
MERCURIO LTDA, Cali, Colombia; c/o W. HERRERA Y CIA. S. EN C., Cali, 
Colombia (DOB 8 March 1955; Passport PO466638 (Colombia); Cedula No. 
14440139 (Colombia)) (individual) [SDNT]
LINDO HURTADO, Edgar, c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia 
(individual) [SDNT]
LITRACO IMPEX LTD., P.O. Box 5686, Benghazi, Libya (Branch of NATIONAL 
SOFT DRINKS EST.) [LIBYA]
LKCK (a.k.a. NATIONAL MOVEMENT FOR THE LIBERATION OF KOSOVO) [BALKANS]
LLADROVICI, Ramiz, Deputy Commander, Guard & Rapid Reaction Group of 
Kosovo Protection Corps (KPC) (DOB: 3 Jan 1966) (individual) [BALKANS]
LOBATO, Julio (a.k.a. PRADO, Julio), Panama (individual) [CUBA]
LONDON[tilde]O DE UPEGUI, Maria del Carmen, c/o INVERSIONES VILLA PAZ 
S.A., Cali, Colombia (individual) [SDNT]
LOPERA LONDON[tilde]O, Vicente de Jesus, c/o INVERSIONES Y 
CONSTRUCCIONES VALLE S.A., Calle, Colombia (Cedula No. 1393107 
(Colombia)) (individual) [SDNT]
LOPEZ, Luis (see AMEZCUA CONTRERAS, Luis Ignacio) (individual) [SDNTK]
LOPEZ, Miguel, A., Deputy Chairman, Havana International Bank, 20 
Ironmonger Lane, London EC2V 8EY, England (individual) [CUBA]
LOPEZ, Quirino Gutierrez, c/o ANGLO CARIBBEAN SHIPPING CO., LTD., 7th 
Floor, Ibex House, the Minories, London, EC3N 1DY, England (individual) 
[CUBA]
LOPEZ RODRIGUEZ, Cecilia, c/o COMERCIALIZADORA INTERNACIONAL VALLE DE 
ORO S.A., Cali, Colombia (individual) [SDNT]
LOPEZ VALENCIA, Oscar, c/o FLEXOEMPAQUES LTDA., Cali, Colombia; c/o 
PLASTICOS CONDOR LTDA., Cali, Colombia; Carrera 6A No. 11-43 501-2, 
Cali, Colombia (Cedula No. 10537943 (Colombia)) (individual) [SDNT]
LOPEZ ZAPATA, Hernan de Jesus, c/o AGROPECUARIA LA ROBLEDA S.A., Cali, 
Colombia; c/o INDUSTRIA MADERERA ARCA LTDA., Cali, Colombia (Cedula No. 
16344058 (Colombia)) (individual) [SDNT]
LOUTH HOLDINGS, S.A., Panama [CUBA]
LOZANO CANCINO DE GUTIERREZ, Maria Gladys (a.k.a. LOZANO DE GUTIERREZ, 
Gladys), c/o INVERSIONES GEELE LTDA., Bogota, Colombia; c/o LABORATORIOS 
GENERICOS VETERINARIOS DE COLOMBIA S.A., Bogota, Colombia; c/o 
LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia; c/o PENTA 
PHARMA DE COLOMBIA S.A., Bogota, Colombia; c/o SERVICIOS SOCIALES LTDA., 
Bogota, Colombia (DOB 19 October 1948; Cedula No. 41444092 (Colombia)) 
(individual) [SDNT]
LOZANO DE GOMEZ, Zilia, c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o 
LABORATORIOS GENERICOS VETERINARIOS DE COLOMBIA S.A., Bogota, Colombia; 
c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota,

[[Page 975]]

Colombia (Cedula No. 541577886 (Colombia)) (individual) [SDNT]
LOZANO, Eduardo (see AMEZCUA CONTRERAS, Luis Ignacio) (individual) 
[SDNTK]
LPK (a.k.a. POPULAR MOVEMENT OF KOSOVO) [BALKANS]
LTTE (see LIBERATION TIGERS OF TAMIL EELAM) [FTO]
LUDEVINA, Odeth (see CHILALA, Odeth Ludovina Baca Joaquim) (individual) 
[UNITA]
LUDHIANVI, Mufti Rashid Ahmad (see LADEHYANOY, Mufti Rashid Ahmad) 
(individual) [SDGT]
LUGO VILLAFAN[tilde]E, Jesus Alberto, c/o CONCRETOS CALI S.A., Cali, 
Colombia; c/o INVERSIONES Y CONSTRUCCIONES VALLE S.A., Cali, Colombia; 
c/o INVHERESA S.A., Cali, Colombia; Calle 70N No. 14-31, Cali, Colombia 
(Cedula No. 14977685 (Colombia)) (individual) [SDNT]
LUKIC, Milan, (ICTY indictee, Bosnian Serb) (DOB 6 Sep 67; POB Foca, 
Bosnia-Herzegovina) (individual) [FRYM]
LUKIC, Sredoje, (ICTY indictee, Bosnian Serb) (DOB 5 Apr 61; POB 
Visegrad, Bosnia-Herzegovina) (individual) [FRYM]
LUQMAN, Abu (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
LUSHTAKU, Sami, Regional Task Group 2 Commander of Kosovo Protection 
Corps (KPC) (DOB: 20 Feb 1961; POB: Srbica, FRY) (individual) [BALKANS]
M. RODRIGUEZ O. Y CIA. S. EN C.S., Cali, Colombia [SDNT]
M.O.C. ECHEVERRY HERMANOS LTDA., Calle 23AN No. 5AN-21, Cali, Colombia; 
NIT  800038241-5 (Colombia) [SDNT]
MACHERBE, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; a.k.a. MAHLERBE, Polo; 
a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; a.k.a. MALERHBE DE LEON, 
Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE DE LEON, Oscar; a.k.a. 
MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
MADAN, Jorge (RIVAS), Frankfurt, Germany (individual) [CUBA]
MADI, Ragiab Saad, P.O. Box 2297, Shoman Street, Fashioum, Tripoli, 
Libya (individual) [LIBYA]
MAGANA ALCIDES, Ramon (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES 
MAGANE, Ramon; a.k.a. ALCIDES MAYENA, Ramon; a.k.a. ALCIDEZ MAGANA, 
Ramon; a.k.a. GONZALEZ QUIONES, Jorge; a.k.a. MAGANA, Jorge; a.k.a. 
MAGNA ALCIDEDES, Ramon; a.k.a. MATA, Alcides; a.k.a. RAMON MAGANA, 
Alcedis; a.k.a. RAMON MAGANA, Alcides; a.k.a. ROMERO, Antonio); DOB 4 
Sep 1957 (individual) [SDNTK]
MAGANA, Jorge (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES MAGANE, 
Ramon; a.k.a. ALCIDES MAYENA, Ramon; a.k.a. ALCIDEZ MAGANA, Ramon; 
a.k.a. GONZALEZ QUIONES, Jorge; a.k.a. MAGANA ALCIDES, Ramon; a.k.a. 
MAGNA ALCIDEDES, Ramon; a.k.a. MATA, Alcides; a.k.a. RAMON MAGANA, 
Alcedis; a.k.a. RAMON MAGANA, Alcides; a.k.a. ROMERO, Antonio); DOB 4 
Sep 1957 (individual) [SDNTK]
MAGCOBAR (LIBYA) LTD., Benghazi, Libya; P.O. Box 867, Tripoli, Libya 
[LIBYA]
MAGNA ALCIDEDES, Ramon (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES 
MAGANE, Ramon; a.k.a. ALCIDES MAYENA, Ramon; a.k.a. ALCIDEZ MAGANA, 
Ramon; a.k.a. GONZALEZ QUIONES, Jorge; a.k.a. MAGANA ALCIDES, Ramon; 
a.k.a. MAGANA, Jorge; a.k.a. MATA, Alcides; a.k.a. RAMON MAGANA, 
Alcedis; a.k.a. RAMON MAGANA, Alcides; a.k.a. ROMERO, Antonio); DOB 4 
Sep 1957 (individual) [SDNTK]
MAHARI GENERAL AUTOMOBILE CO., Libya [LIBYA]
MAHERBE, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MACHERBE, Oscar; a.k.a. MAHLERBE, Oscar; a.k.a. MAHLERBE, Polo; 
a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; a.k.a. MALERHBE DE LEON, 
Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE DE LEON, Oscar; a.k.a. 
MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
MAHLERBE, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Polo; 
a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; a.k.a. MALERHBE DE LEON, 
Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE DE LEON, Oscar; a.k.a. 
MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
MAHLERBE, Polo (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; 
a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; a.k.a. MALERHBE DE LEON, 
Oscar; a.k.a. MALERVA, Oscar; a.k.a.

[[Page 976]]

MALHARBE DE LEON, Oscar; a.k.a. MALHERBE DE LEON, Oscar; a.k.a. MALHERBE 
DELEON, Oscar; a.k.a. MALMERBE, Oscar; a.k.a. MELARBE, Oscar; a.k.a. 
NALHERBE, Oscar; a.k.a. QALHARBE DE LEON, Oscar; a.k.a. VARGAS, Jorge); 
DOB 10 Jan 1964; POB Mexico (individual) [SDNTK]
MAKHTAB AL-KHIDAMAT/AL KIFAH, House no. 125, Street 54, Phase II, 
Hayatabad, Peshawar, Pakistan [SDGT]
MALARBE, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; 
a.k.a. MAHLERBE, Polo; a.k.a. MALERBE, Oscar; a.k.a. MALERHBE DE LEON, 
Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE DE LEON, Oscar; a.k.a. 
MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
MALERBE, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; 
a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERHBE DE LEON, 
Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE DE LEON, Oscar; a.k.a. 
MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
MALERHBE DE LEON, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, 
Martin; a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, 
Oscar; a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERBE, 
Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE DE LEON, Oscar; a.k.a. 
MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
MALERVA, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; 
a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; 
a.k.a. MALERHBE DE LEON, Oscar; a.k.a. MALHARBE DE LEON, Oscar; a.k.a. 
MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
MALHARBE DE LEON, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, 
Martin; a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, 
Oscar; a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERBE, 
Oscar; a.k.a. MALERHBE DE LEON, Oscar; a.k.a. MALERVA, Oscar; a.k.a. 
MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
MALHERBE DE LEON, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, 
Martin; a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, 
Oscar; a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERBE, 
Oscar; a.k.a. MALERHBE DE LEON, Oscar; a.k.a. MALERVA, Oscar; a.k.a. 
MALHARBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MALMERBE, 
Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
MALHERBE DELEON, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, 
Martin; a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, 
Oscar; a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERBE, 
Oscar; a.k.a. MALERHBE DE LEON, Oscar; a.k.a. MALERVA, Oscar; a.k.a. 
MALHARBE DE LEON, Oscar; a.k.a. MALHERBE DE LEON, Oscar; a.k.a. 
MALMERBE, Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. 
QALHARBE DE LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB 
Mexico (individual) [SDNTK]
MALIK, Assim Mohammed Rafiq Abdul (a.k.a. ABDULMALIK, Abdul Hameed; 
a.k.a. RAFIQ, Assem), 14 Almotaz Sad Al Deen Street, Al Nozha, Cairo, 
Egypt (individual) [IRAQ]
MALJKOVIC, Nebojsa, Member of JUL Directorate; ex-Deputy Prime Minister, 
Federal Republic of Yugoslavia; ex-Minister for Cooperation, Federal 
Republic of Yugoslavia; President of Dunav Insurance (DOB 4 Sep 54) 
(individual) [FRYM]
MALMERBE, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; 
a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; 
a.k.a. MALERHBE DE LEON, Oscar;

[[Page 977]]

a.k.a. MALERVA, Oscar; a.k.a. MALHARBE DE LEON, Oscar; a.k.a. MALHERBE 
DE LEON, Oscar; a.k.a. MALHERBE DELEON, Oscar; a.k.a. MELARBE, Oscar; 
a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE DE LEON, Oscar; a.k.a. VARGAS, 
Jorge); DOB 10 Jan 1964; POB Mexico (individual) [SDNTK]
MALUT SUGAR FACTORY, Malut, Sudan [SUDAN]
MAMOUN DARKAZANLI IMPORT-EXPORT COMPANY (a.k.a. DARKAZANLI COMPANY; 
a.k.a. DARKAZANLI EXPORT-IMPORT SONDERPOSTEN), Uhlenhorsterweg 34 11, 
Hamburg, Germany [SDGT]
MAN, Nu (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
MANA, Salem, Frankfurt, Germany (individual) [LIBYA]
MANA, Salem, Libya (individual) [LIBYA]
MANAURE S.A. (f.k.a. AGROPECUARIA LA ROBLEDA S.A.), Avenida 2D Norte No. 
24N-76, Cali, Colombia; Carrera 61 No. 11-58, Cali, Colombia (NIT 
 800160353-2) [SDNT]
MANGALA SUGAR FACTORY, Mangala, Sudan [SUDAN]
MANJARRES GRANDE, Jorge (see MANJARREZ GRANDE, Jorge) (individual) 
[SDNT]
MANJARREZ GRANDE, Jorge (a.k.a. MANJARRES GRANDE, Jorge), c/o GRACADAL 
S.A., Cali, Colombia; c/o INTERAMERICANA DE CONSTRUCCIONES S.A., Cali, 
Colombia; c/o RADIO UNIDAS F.M. S.A., Cali, Colombia; c/o SERVIFAR S.A., 
Cali, Colombia; c/o SONAR F.M. S.A., Cali, Colombia; Cedula No. 16632969 
(Colombia) (individual) [SDNT]
MANZPER CORP., Panama [CUBA]
MAQUINARIA TECNICA Y TIERRAS LTDA. (a.k.a. M.T.T. LTDA.), Carrera 4A No. 
16-04, Cartago, Colombia; NIT  800084233-1 (Colombia) [SDNT]
MARIELA DE RODRIGUEZ Y CIA. S. EN C., Cali, Colombia [SDNT]
MARIELA DE RODRIGUEZ Y CIA. S. EN C. (see INVERSIONES MONDRAGON Y CIA. 
S.C.S.) [SDNT]
MARIELA MONDRAGON DE R. Y CIA. S. EN C., Calle 12 Norte No. 9N-56/58, 
Cali, Colombia; Avenida 4 Norte No. 8N-67, Cali, Colombia; NIT  
800122032-1 (Colombia) [SDNT]
MARIN ESTRADA Y CIA. S. EN C.S., Carrera 8 No. 32-16, Cali, Colombia; 
Apartado Aereo 1175, Cali, Colombia; Calle 44 No. 1E-155, Cali, 
Colombia; Calle 45 No. 1E-86, Cali, Colombia; NIT  800083114-9 
(Colombia) [SDNT]
MARINA SAN GORG CO. LTD. (a.k.a. MARINA SAN GORG HOLIDAY COMPLEX), Malta 
[LIBYA]
MARINE REGISTRATION COMPANY, Panama [CUBA]
MARINIC, Zoran, (ICTY indictee, Bosnian Serb) (DOB 6 Jun 63; POB 
Busovaca) (individual) [FRYM]
MARISCO (or MARISCOS) DE FARALLON, S.A., Panama [CUBA]
MARJANOVIC, Mirko, Ex-Prime Minister of Serbia (DOB 27 Jul 37; POB Knin, 
Croatia) (individual) [FRYM]
MARKETING ASSOCIATES CORPORATION, Calle 52 E, Campo Alegre, Panama City, 
Panama [CUBA]
MARKOVIC, Mirjana, wife of Slobodan Milosevic (DOB 10 Jul 42) 
(individual) [FRYM]
MARKOVIC, Momir, Private Banker; ex-Deputy Governor of National Bank of 
Yugoslavia; Editor of Velika Srbija (individual) [FRYM]
MARKOVIC, Radomir, Chief of Intelligence; head of RDB (DOB 1946 or 1947) 
(individual) [FRYM]
MARKOVIC, Vladimir, Member of JUL; General Director of Merima Chemical 
(individual) [FRYM]
MARKOVIC, Zoran, Executive Director of Beogradska Banka (individual) 
[FRYM]
MARMOLEJO LOAIZA, Carlos Julio, c/o COMERCIALIZADORA INTERNACIONAL VALLE 
DE ORO S.A., Cali, Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, 
Colombia; c/o INVERSIONES AGRICOLAS AVICOLAS Y GANADERAS LA CARMELITA 
LTDA., Cali, Colombia; c/o INVERSIONES BETANIA LTDA., Cali, Colombia 
(Cedula No. 16601783 (Colombia)) (individual) [SDNT]
MARMOLEJO VACA, Hernan Rodrigo, c/o INVERSIONES INVERVALLE S.A., Cali, 
Colombia (Cedula No. 14972401 (Colombia)) (individual) [SDNT]
MARQUEZ CANOVAS, Alberto, c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia; 
c/o SERVICIOS INMOBILIARIOS LTDA., Cali, Colombia (Cedula No. 14993019 
(Colombia)) (individual) [SDNT]
MARTIC, Milan, (ICTY indictee, Bosnian Serb) (DOB 18 Nov 54; POB 
Zagrovic) (individual) [FRYM]
MARUF, Taha Muhyi al-Din, Vice President, Iraq (DOB 1924) (individual) 
[IRAQ]
MARYOL ENTERPRISES INC., c/o EMPRESA DE NAVEGACION MAMBISA, Apartado 
543, San Ignacio 104, Havana, Cuba [CUBA]
MASPIO CEMENT CORPORATION, P.O. Box 96, Atbara, Sudan [SUDAN]
MATA, Alcides (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES MAGANE, 
Ramon; a.k.a. ALCIDES MAYENA, Ramon; a.k.a. ALCIDEZ MAGANA, Ramon; 
a.k.a. GONZALEZ QUIONES, Jorge; a.k.a. MAGANA ALCIDES, Ramon; a.k.a. 
MAGANA, Jorge; a.k.a. MAGNA ALCIDEDES, Ramon; a.k.a. RAMON MAGANA, 
Alcedis; a.k.a. RAMON MAGANA, Alcides; a.k.a. ROMERO, Antonio); DOB 4 
Sep 1957 (individual) [SDNTK]

[[Page 978]]

MATADERO METROPOLITANO LTDA., Km. 3 Via Marsella Parque Industrial, 
Pereira, Colombia; Carrera 10 No. 34-21 Dosq., Pereira, Colombia; 
Apartado Aereo 3786, Pereira, Colombia; NIT  891412986-8 
(Colombia) [SDNT]
MATHEW, Glenroy (see MATTHEWS, Glenroy Vingrove) (individual) [SDNTK]
MATRIX CHURCHILL CORPORATION, 5903 Harper Road, Cleveland, Ohio 44139, 
U.S.A. [IRAQ]FP-1MATTHEW, Glenroy Wingrove (see MATTHEWS, 
Glenroy Vingrove) (individual) [SDNTK]
MATTHEWS, Glenroy Vingrove (a.k.a. MATHEW, Glenroy; a.k.a. MATTHEW, 
Glenroy Wingrove; a.k.a. MATTHEWS, Glen Roy), Frigate Bay, St. Kitts; 
DOB 26 July 1958; POB St. Kitts and Nevis; Passport 047815 (St. Kitts) 
(individual) [SDNTK]
MATTHEWS, Glen Roy (see MATTHEWS, Glenroy Vingrove) (individual) [SDNTK]
MATUQ, Matuq Muhammad, Secretary of Education, Youth, Scientific 
Research, and Vocational Education of the Government of Libya, Libya 
(DOB 1956) (individual) [LIBYA]
MAXITIENDAS TODO EN UNO, Avenida Guadalupe con Avenida Simon Bolivar, 
Cali, Colombia [SDNT]
MAY ENGINEERING COMPANY, c/o ENGINEERING EQUIPMENT CORPORATION, P.O. Box 
97, Khartoum, Sudan [SUDAN]
MAZUERO ERAZO, Hugo, c/o GRUPO SANTA LTDA., Cali, Colombia; c/o 
INVERSIONES SANTA LTDA., Cali, Colombia; c/o SOCIEDAD CONSTRUCTORA LA 
CASCADA S.A., Cali, Colombia (DOB 17 July 1936; alt. DOB 1945; Cedula 
No. 2445590 (Colombia)) (individual) [SDNT]
MCM Y CIA. LTDA., (a.k.a. HAPPY DAYS), Calle 25 Norte No. 3AN-39, Cali, 
Colombia; Calle 22 Norte No. 5A-75, Cali, Colombia; NIT 
800204288-2 (Colombia) [SDNT]
MEDAVIA (a.k.a. MEDITERRANEAN AVIATION COMPANY, LTD.), Malta [LIBYA]
MEDICAL EQUIPMENT COMPANY, P.O. Box 750, Benghazi, Libya; P.O. Box 464, 
Sebha, Libya; P.O. Box 12419, Tripoli, Libya [LIBYA]
MEDINA, Ana Maria or Anita, Panama (individual) [CUBA]
MEDISAN LIMITED, R1 6A, Qasam Industrial, Limiti tai Ricasch, Kalkara, 
Malta [LIBYA]
MEDITERRANEAN FEED SERVICES S.A., Schutzengasse 25, Zurich CH-8001, 
Switzerland [LIBYA]
MEDITERRANEAN OIL SERVICES GMBH (a.k.a. MEDITERRANEAN SEA OIL SERVICES 
GMBH; a.k.a. MEDOIL), P.O. Box 5601, Immermannstrasse 40, Dusseldorf 1, 
Germany [LIBYA]
MEDITERRANEAN POWER ELECTRIC COMPANY LIMITED, A 18B, Industrial Estate, 
Marsa, Malta [LIBYA]
MEJAKIC, Zeljko, (ICTY indictee, Bosnian Serb) (DOB 2 Aug 64; POB Petrov 
Gaj) (individual) [FRYM]
MEK (see MUJAHEDIN-E KHALQ ORGANIZATION) [FTO]
MELARBE, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; 
a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; 
a.k.a. MALERHBE DE LEON, Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE 
DE LEON, Oscar; a.k.a.MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, 
Oscar; a.k.a. MALMERBE, Oscar; a.k.a. NALHERBE, Oscar; a.k.a. QALHARBE 
DE LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
MENIL ENSTALT COMPANY, Vaduz, Liechtenstein [LIBYA]
MERCAVICOLA LTDA., Calle 34 No. 5A-25, Cali, Colombia; Calle 47AN, Cali, 
Colombia (NIT  800086338-5) [SDNT]
MERCURIUS IMPORT/EXPORT COMPANY, PANAMA, S.A., Calle C, Edificio 18, Box 
4048, Colon Free Zone, Panama [CUBA]
METROVIA, Switzerland [LIBYA]
MIDCO FINANCE S.A. (a.k.a. MIDCO FINANCIAL S.A.; a.k.a. MONTANA 
MANAGEMENT INC.), c/o Morgan & Morgan, Edificio Torre Swiss Bank, Piso 
16, Calle 53 Este, Marbella, Panama City, Republic of Panama [IRAQ]
MIDCO FINANCE S.A. (a.k.a. MIDCO FINANCIAL S.A.; a.k.a. MONTANA 
MANAGEMENT INC.), 57 Rue du Rhone, CH-1204 Geneva, Switzerland [IRAQ]
MILACIC, Borislav, Minister of Finance, Republic of Serbia (DOB 13 May 
53) (individual) [FRYM]
MILANOVIC, Dafina, ex-President of Dafiment Bank (individual) [FRYM]
MILITARY COMMERCIAL CORPORATION, P.O. Box 221, Khartoum, Sudan [SUDAN]
MILLAN BONILLA, German, c/o CONSTRUVIDA S.A., Cali, Colombia (Cedula No. 
14995885 (Colombia)) (individual) [SDNT]
MILOSEVIC, Borislav, brother of Slobodan Milosevic (DOB 1936) 
(individual) [FRYM]
MILOSEVIC, Marija, daughter of Slobodan Milosevic (DOB 1965) 
(individual) [FRYM]
MILOSEVIC, Marko, son of Slobodan Milosevic (DOB 2 Jul 74) (individual) 
[FRYM]
MILOSEVIC, Milanka, sister-in-law of Slobodan Milosevic (individual) 
[FRYM]
MILOSEVIC, Slobodan, Ex-President of Federal Republic of Yugoslavia; 
(ICTY indictee) (DOB 20 Aug 41; POB Pozarevac, Serbia) (individual) 
[FRYM]
MILUTINOVIC, Milan, President, Republic of Serbia; (ICTY indictee) (DOB 
19 Dec 42; POB Belgrade, Serbia) (individual) [FRYM]

[[Page 979]]

MIRALUNA LTDA. (f.k.a. EL PASO LTDA.), Carrera 4 No. 12-41 of. 1403, 
1501, Cali, Colombia; NIT  890328836-9 (Colombia) [SDNT]
MIRALUNA LTDA. Y CIA. S. EN C.S., (f.k.a. INVERSIONES EL PASO LTDA.), 
(f.k.a. INVERSIONES NEGOAGRICOLA S.A.), Carrera 4 No. 12-41 of. 1403, 
Cali, Colombia; Carrera 4 No. 12-41 of. 1501, Cali, Colombia; NIT 
 890937860-9 [SDNT]
MISTRA VILLAGE LTD., (registered address) 22 Europa Centre, Floriana, 
Malta; (operating address) Xemija Hill, St. Paul's Bay, Malta [LIBYA]
MISURATA GENERAL ROADS CO., P.O. Box 200, Misurata, Libya; P.O. Box 958, 
Tripoli, Libya [LIBYA]
MITCO (a.k.a. MAGHREBAN INTERNATIONAL TRADE COMPANY), 47, Avenue 
Kheireddine Pacha, 1002 Tunis, Tunisia [LIBYA]
MITROVIC, Borislav, Ex-Secretary General, President's Secretariat 
(individual) [FRYM]
MITROVIC, Zeljko, Owner of TV Pink; Member of JUL Directorate (DOB 31 
May 67) (individual) [FRYM]
MITSUKURA BOEKI K.K. (a.k.a. MITSUKURA BOEKI-KAISHA, LTD.; a.k.a. 
MITSUKURA CORPORATION; a.k.a. MITSUKURA TRADING COMPANY LIMITED), 4-1-13 
Hachiman-dori, Chuo-Ku Kobe, Japan [CUBA]
MITSUKURA BOEKI K.K. (a.k.a. MITSUKURA BOEKI-KAISHA, LTD.; a.k.a. 
MITSUKURA CORPORATION; a.k.a. MITSUKURA TRADING COMPANY LIMITED), 2-26 
Isobe-dori, 4-chome, Chuo-Ku Kobe, Japan [CUBA]
MKO (see MUJAHEDIN-E KHALQ ORGANIZATION) [FTO]
MLADIC, Ratko, (ICTY indictee, Bosnian Serb) (DOB 12 Mar 43; POB 
Bozinovici, Bosnia Herzegovina) (individual) [FRYM]
MOA NICKEL SA, Cuba [CUBA]
MODERN ELECTRONIC COMPANY, Khartoum, Sudan [SUDAN]
MODERN FASHION CO. FOR TRADING AND MANUFACTURING OF CLOTHING, THE, Libya 
[LIBYA]
MODERN LAUNDRY BLUE FACTORY (a.k.a. THE MODERN LAUNDRY BLUEFACTORY), 
P.O. Box 2241, Khartoum, Sudan [SUDAN]
MODERN PLASTIC & CERAMICS INDUSTRIES COMPANY, Khartoum, Sudan [SUDAN]
MOGOLLON RUEDA, Eduardo, c/o ALFA PHARMA S.A., Bogota, Colombia; c/o 
DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, Colombia; c/o DEPOSITO 
POPULAR DE DROGAS S.A., Cali, Colombia; c/o INVERSIONES RODRIGUEZ MORENO 
Y CIA. S. EN C., Cali, Colombia (DOB 5 February 1953; Cedula No. 
19194691 (Colombia)) (individual) [SDNT]
MOHAMED, Abdul Kader Ibrahim, Jianguomenwai Diplomatic Housing Compound, 
Building 7-1, 5th Floor, Apartment 4, Beijing, People's Republic of 
China (individual) [IRAQ]
MOHAMMED, Fazul (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
MOHAMMED, Fazul Abdilahi (see MOHAMMED, Fazul Abdullah) (individual) 
[SDGT]
MOHAMMED, Fazul Abdullah (a.k.a. FAZUL, Abdallah; a.k.a. FAZUL, Abdalla; 
a.k.a. FAZUL, Abdallah Mohammed; a.k.a. MOHAMMED, Fazul Abdilahi; a.k.a. 
ADBALLAH, Fazul; a.k.a. ABDALLA, Fazul; a.k.a. MOHAMMED, Fazul; a.k.a. 
HAROON; a.k.a. HARUN; a.k.a. FAZUL, Haroon; a.k.a. FAZUL, Harun; a.k.a. 
MUHAMAD, Fadil Abdallah; a.k.a. HAROUN, Fadhil; a.k.a. AL SUDANI, Abu 
Seif; a.k.a. AISHA, Abu; a.k.a. LUQMAN, Abu; a.k.a. ALI, Fadel Abdallah 
Mohammed; a.k.a. MOHAMMED, Fouad) (DOB 25 Aug 1972; alt. DOB 25 Dec 
1974; alt. DOB 25 Feb 1974; POB Moroni, Comoros Islands; Citizen 
Comoros; alt. Citizen Kenya) (individual) [SDGT]
MOHAMMED, Fouad (see MOHAMMED, Fazul Abdullah) (individual) [SDGT]
MOHAMMED, Khalid Shaikh (a.k.a. HENIN, Ashraf Refaat Nabith; a.k.a. 
WADOOD, Khalid Adbul; a.k.a. ALI, Salem; a.k.a. BIN KHALID, Fahd Bin 
Adballah) (DOB 14 Apr 1965; alt. DOB 01 Mar 1964; POB Kuwait; Citizen 
Kuwait) (individual) [SDGT]
MOHAMMED, Mustafa (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
MOHAMMED, Shariff Omar (see GHAILANI, Ahmed Khalfan) (individual) [SDGT]
MONDRAGON AVILA, Alicia, c/o INVERSIONES Y CONSTRUCCIONES COSMOVALLE 
LTDA., Cali, Colombia (Cedula No. 29086010 (Colombia)) (individual) 
[SDNT]
MONDRAGON DE RODRIGUEZ, Mariela, c/o COMPAX LTDA., Cali, Colombia; c/o 
CORPORACION DEPORTIVA AMERICA, Cali, Colombia; c/o INVERSIONES MONDRAGON 
Y CIA. S.C.S., Cali, Colombia; c/o INVERSIONES Y CONSTRUCCIONES 
COSMOVALLE LTDA., Cali, Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA 
S.A., Bogota, Colombia; c/o MARIELA DE RODRIGUEZ Y CIA. S. EN C., Cali, 
Colombia; c/o MARIELA MONDRAGON DE R. Y CIA. S. EN C., Cali, Colombia; 
DOB 12 April 1935; Passport 4436059 (Colombia); Cedula No. 29072613 
(Colombia) (individual) [SDNT]
MONET TRADING COMPANY, Panama [CUBA]
MONROY ARCILA, Francisco Jose, c/o COMPAN[tilde]IA ADMINISTRADORA DE 
VIVIENDA S.A., Cali, Colombia; c/o CONSTRUCTORA DIMISA LTDA., Cali, 
Colombia; c/o INVERSIONES EL PEN[tilde]ON,

[[Page 980]]

Cali, Colombia; c/o INVERSIONES GEMINIS S.A., Cali, Colombia; Cedula No. 
79153691 (Colombia) (individual) [SDNT]
MONTANEZ, Michael, Panama (individual) [CUBA]
MONTAN[tilde]O BERMUDEZ, Libardo, c/o LABORATORIOS GENERICOS 
VETERINARIOS, Bogota, Colombia (Cedula No. 17083296 (Colombia)) 
(individual) [SDNT]
MONTOYA MARTINEZ, Juan Carlos, c/o AGROPECUARIA BETANIA LTDA., Cali, 
Colombia; c/o AGROPECUARIA LA ROBLEDA S.A., Cali, Colombia; c/o 
INDUSTRIA AVICOLA PALMASECA S.A., Cali, Colombia; c/o INVERSIONES VILLA 
PAZ S.A., Cali, Colombia (Cedula No. 16801475 (Colombia)) (individual) 
[SDNT]
MOONEX INTERNATIONAL, S.A., Kingston, Jamaica [CUBA]
MOONEX INTERNATIONAL, S.A., Panama [CUBA]
MORALES CASTRILLON, Victor Hugo, c/o TAURA S.A., Cali, Colombia; Cedula 
No. 16620349 (Colombia) (individual) [SDNT]
MORAN GUERRERO, Mario Fernando, c/o COINTERCOS S.A., Bogota, Colombia; 
c/o LABORATORIOS KRESSFOR, Bogota, Colombia; c/o PENTA PHARMA DE 
COLOMBIA S.A., Bogota, Colombia; c/o PENTACOOP LTDA., Bogota, Colombia 
(Cedula No. 12983857 (Colombia)) (individual) [SDNT]
MORENO, Carlos Arturo, c/o INVERSIONES EL PEN[tilde]ON S.A., Cali, 
Colombia (Cedula No. 14264233 (Colombia)) (individual) [SDNT]
MORENO DAZA, Ricardo Alfredo, Carrera 38D No. 4B-57, Cali, Colombia; c/o 
GALAPAGOS S.A., Cali, Colombia; c/o TAURA S.A., Cali, Colombia; Cedula 
No. 16631400 (Colombia) (individual) [SDNT]
MOSQUERA, Juan Carlos, Calle 24N No. 6-17, Cali, Colombia; c/o 
INMOBILIARIA U.M.V. S.A., Cali, Colombia (Cedula No. 16692007 
(Colombia)) (individual) [SDNT]
MOVIMIENTO REVOLUCIONARIO TUPAC AMARU (see TUPAC AMARU REVOLUTIONARY 
MOVEMENT) [FTO]
MRKSIC, Milan, (ICTY indictee, Serb) (DOB 20 Jul 47) (individual) [FRYM]
MRTA (see TUPAC AMARU REVOLUTIONARY MOVEMENT) [FTO]
MSALAM, Fahad Ally (see MSALAM, Fahid Mohammed Ally) (individual) [SDGT]
MSALAM, Fahid Mohammed Ali (see MSALAM, Fahid Mohammed Ally) 
(individual) [SDGT]
MSALAM, Fahid Mohammed Ally (a.k.a. ALLY, Fahid Mohammed; a.k.a. 
MUSALAAM, Fahid Mohammed Ali; a.k.a. MSALAM, Fahid Mohammed Ali; a.k.a. 
SALEM, Fahid Muhamad Ali; a.k.a. MSALAM, Mohammed Ally; a.k.a. AL-KINI, 
Usama; a.k.a. MSALAM, Fahad Ally) (DOB 19 Feb 1976; POB Mombasa, Kenya; 
Citizen Kenya) (individual) [SDGT]
MSALAM, Mohammed Ally (see MSALAM, Fahid Mohammed Ally) (individual) 
[SDGT]
M.T.T. LTDA. (see MAQUINARIA TECNICA Y TIERRAS LTDA.) [SDNT]
MUBARAK, Umid Medhat (a.k.a. MUBARAK, Umid Midhat), Minister of Health, 
Iraq (DOB ca. 1940) (individual) [IRAQ]
MUGHNIYAH, Imad Fa'iz (a.k.a. MUGHNIYAH, Imad Fayiz), Senior 
Intelligence Officer of HIZBALLAH (DOB 7 December 1962, POB Tayr Dibba, 
Lebanon, Passport No. 432298 (Lebanon)) (individual) [SDT]
MUHAMAD, Fadil Abdallah (see MOHAMMED, Fazul Abdullah) (individual) 
[SDGT]
MUHARIKAAT GENERAL AUTOMOBILE CO., P.O. Box 203, Benghazi, Libya; P.O. 
Box 259, Tripoli, Libya [LIBYA]
MUJAHEDIN-E KHALQ (see MUJAHEDIN-E KHALQ ORGANIZATION) [FTO] MUJAHEDIN-E 
KHALQ ORGANIZATION (a.k.a. MEK; a.k.a. MKO; a.k.a. MUJAHEDIN-E KHALQ; 
a.k.a. PEOPLE'S MUJAHEDIN ORGANIZATION OF IRAN; a.k.a. PMOI; a.k.a. 
ORGANIZATION OF THE PEOPLE'S HOLY WARRIORS OF IRAN; a.k.a. SAZEMAN-E 
MUJAHEDIN-E KHALQ-E IRAN; a.k.a. NATIONAL COUNCIL OF RESISTANCE (NCR); 
a.k.a. NATIONAL LIBERATION ARMY OF IRAN; a.k.a. NLA) [FTO]
MULATO, Ernesto Joaquim, UNITA Representative to Germany; DOB 12 August 
1940; POB Bembe, Uige Province, Angola (individual) [UNITA]
MUN[tilde]OZ CORTES (CORTEZ), Julio Cesar, c/o DROGAS LA REBAJA 
BARRANQUILLA S.A., Barranquilla, Colombia; c/o BLANCO PHARMA S.A., 
Bogota, Colombia; c/o COPSERVIR LTDA., Bogota, Colombia; c/o 
DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, Colombia; c/o DROGAS LA 
REBAJA PRINCIPAL S.A., Bogota, Colombia; c/o DROGAS LA REBAJA CALI S.A., 
Cali, Colombia (Cedula No. 14938700 (Colombia)) (individual) [SDNT]
MUN[tilde]OZ PAZ, Adriana del Socorro, c/o INVERSIONES Y CONSTRUCCIONES 
VALLE S.A., Cali, Colombia (Cedula No. 31950689 (Colombia)) (individual) 
[SDNT]
MUN[tilde]OZ PAZ, Joaquin Emilio, Avenida 4AN No. 47-89, Cali, Colombia; 
c/o CONSTRUCTORA DIMISA LTDA., Cali, Colombia; c/o INMOBILIARIA U.M.V. 
S.A., Cali, Colombia; c/o INVERSIONES Y CONSTRUCCIONES VALLE S.A., Cali, 
Colombia; DOB 18 January 1971; Cedula No. 16789012 (Colombia) 
(individual) [SDNT]
MUN[tilde]OZ RODRIGUEZ, Juan Carlos, c/o BLANCO PHARMA S.A., Bogota, 
Colombia; c/o CREDIREBAJA S.A., Cali, Colombia; c/o DEPOSITO POPULAR DE 
DROGAS S.A., Cali, Colombia; c/o DISTRIBUIDORA DE DROGAS CONDOR LTDA., 
Bogota, Colombia; c/o DISTRIBUIDORA DE DROGAS LA

[[Page 981]]

REBAJA S.A., Bogota, Colombia; c/o DISTRIBUIDORA MIGIL LTDA., Cali, 
Colombia; c/o GRACADAL S.A., Cali, Colombia; c/o INVERSIONES Y 
CONSTRUCCIONES ABC S.A., Cali, Colombia; c/o LABORATORIOS BLAIMAR DE 
COLOMBIA S.A., Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA 
S.A., Bogota, Colombia; DOB 25 September 1964; Passport 16703148 
(Colombia); Cedula No. 16703148 (Colombia) (individual) [SDNT]
MUN[tilde]OZ RODRIGUEZ, Soraya, c/o BLANCO PHARMA S.A., Bogota, 
Colombia; c/o DEPOSITO POPULAR DE DROGAS S.A., Cali, Colombia; c/o 
DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, Colombia; c/o 
DISTRIBUIDORA DE DROGAS LA REBAJA S.A., Bogota, Colombia; c/o 
DISTRIBUIDORA MIGIL LTDA., Cali, Colombia; c/o INVERSIONES Y 
CONSTRUCCIONES ABC S.A., Cali, Colombia; c/o LABORATORIOS BLAIMAR DE 
COLOMBIA S.A., Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA 
S.A., Bogota, Colombia; c/o RADIO UNIDAS FM S.A., Cali, Colombia; c/o 
SORAYA Y HAYDEE LTDA., Cali, Colombia; DOB 26 July 1967; Passport 
AC569012 (Colombia); Cedula No. 31976822 (Colombia) (individual) [SDNT]
MUN[tilde]OZ Y RODRIGUEZ Y CIA. LTDA., Avenida 6N No. 23DN-26, Cali, 
Colombia [SDNT]
MURILLO MURILLO, Jose Tolentino, c/o AGROPECUARIA LA ROBLEDA S.A., Cali, 
Colombia (Cedula No. 2240779 (Colombia)) (individual) [SDNT]
MUSA, Rifa'i Ahmad Taha (a.k.a. 'ABD ALLAH, 'Issam 'Ali Muhammad; a.k.a. 
'ABD-AL-'IZ; a.k.a. ABD-AL-WAHAB, Abd-al-Hai Ahmad; a.k.a. ABU YASIR; 
a.k.a. AL-KAMEL, Salah 'Ali; a.k.a. TAHA, Rifa'i Ahmad; a.k.a. TAHA 
MUSA, Rifa'i Ahmad; a.k.a. THABIT 'IZ), DOB 24 June 1954; POB Egypt; 
Passport No. 83860 (Sudan), 30455 (Egypt), 1046403 (Egypt) (individual) 
[SDT]
MUSALAAM, Fahid Mohammed Ali (see MSALAM, Fahid Mohammed Ally) 
(individual) [SDGT]
MUSLIU, Jonusz, Member of Political Council of Presevo, Medvedja, and 
Bujanovac (PCPMB) (DOB: 5 Jan 1959; POB: Konculj, FRY) (individual) 
[BALKANS]
MUSLIU, Shefqet, Member of Liberation Army of Presevo, Medvedja, and 
Bujanovac (UCPMB) (DOB: 12 Feb 1963; POB: Konculj, FRY) (individual) 
[BALKANS]
MUSTAFA, Rrustem, Regional Task Group 6 Commander of Kosovo Protection 
Corps (KPC) (DOB: 27 Feb 1971; POB: Podujevo, FRY) (individual) 
[BALKANS]
NAAS, Mahmoud, Libya (individual) [LIBYA]
NAIZAQUE PUENTES, Jose de Jesus, c/o COINTERCOS S.A., Bogota, Colombia; 
c/o COSMEPOP, Bogota, Colombia; c/o LABORATORIOS BLAIMAR DE COLOMBIA 
S.A., Bogota, Colombia; Calle 58A S 80C-31, Bogota, Colombia (Cedula No. 
19348370 (Colombia)) (individual) [SDNT]
NAJAH, Tahor, Manama, Bahrain (individual) [LIBYA]
NAJAH, Tahor, Tripoli, Libya (individual) [LIBYA]
NAJI, Talal Muhammad Rashid, Principal Deputy of POPULAR FRONT FOR THE 
LIBERATION OF PALESTINE - GENERAL COMMAND (DOB 1930, POB Al Nasiria, 
Palestine) (individual) [SDT]
NALHERBE, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; 
a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; 
a.k.a. MALERHBE DE LEON, Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE 
DE LEON, Oscar; a.k.a. MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, 
Oscar; a.k.a. MALMERBE, Oscar; a.k.a. MELARBE, Oscar; a.k.a. QALHARBE DE 
LEON, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
NAMAN, Saalim or Sam, P.O. Box 39, Fletchamstead Highway, Coventry, 
England; Iraq; Amman, Jordan; 5903 Harper Road, Solon, OH, U.S.A.; 3343 
Woodview Lake Road, West Bloomfield, Michiga 48323, U.S.A. (individual) 
[IRAQ]
NAPETCO (f.k.a. NATIONAL METHANOL COMPANY; a.k.a. NATIONAL 
PETROCHEMICALS COMPANY), Dusseldorf, Germany (Office closed) [LIBYA]
NAPETCO (f.k.a. NATIONAL METHANOL COMPANY; a.k.a. NATIONAL 
PETROCHEMICALS COMPANY), P.O. Box 20812, Marsa Brega, Libya [LIBYA]
NAPETCO (f.k.a. NATIONAL METHANOL COMPANY; a.k.a. NATIONAL 
PETROCHEMICALS COMPANY), P.O. Box 5324, Garden City, Benghazi, Libya 
[LIBYA]
NASIR, Ali Khan (a.k.a. KHAN, Ali; a.k.a. KHAN, Nafir Ali; a.k.a. KHAN, 
Nasir Ali; a.k.a. KHAN, Nazir Ali; a.k.a. KHAN, Nisan Ali; a.k.a. KHAN, 
Nisar Ali; a.k.a. NASIR, Khan Ali); DOB 1 Oct 1955; POB Pakistan 
(individual) [SDNTK]
NASIR, Khan Ali (a.k.a. KHAN, Ali; a.k.a. KHAN, Nafir Ali; a.k.a. KHAN, 
Nasir Ali; a.k.a. KHAN, Nazir Ali; a.k.a. KHAN, Nisan Ali; a.k.a. KHAN, 
Nisar Ali; a.k.a. NASIR, Ali Khan); DOB 1 Oct 1955; POB Pakistan 
(individual) [SDNTK]
NASRALLAH, Hasan, Secretary General of HIZBALLAH (DOB 31 August 1960 or 
1953 or 1955 or 1958, POB Al Basuriyah, Lebanon, Passport No. 042833 
(Lebanon)) (individual) [SDT]
NASSER ARANA, Carlos Alberto, Calle 74 No. 53-30, Barranquilla, 
Colombia; c/o AGRICOLA SONGO LTDA., Barranquilla,

[[Page 982]]

Colombia; c/o DESARROLLOS URBANOS ``DESARROLLAR'' LTDA., Barranquilla, 
Colombia; c/o EDIFICACIONES DEL CARIBE LTDA., Barranquilla, Colombia; c/
o GRAN COMPAN[tilde]IA DE HOTELES LTDA., Barranquilla, Colombia; c/o 
HOTELES E INMUEBLES DE COLOMBIA LTDA., Barranquilla, Colombia; c/o 
INMOBILIARIA DEL CARIBE LTDA., Barranquilla, Colombia; c/o INMOBILIARIA 
HOTELERA DEL CARIBE LTDA., Barranquilla, Colombia; c/o INVERSIONES 
HOTELERAS DEL LITORAL LTDA., Barranquilla, Colombia; c/o INVERSIONES 
NAMOS Y CIA. LTDA., Barranquilla, Colombia; c/o INVERSIONES PRADO TRADE 
CENTER LTDA., Barranquilla, Colombia; c/o K. P. TO JEANS WEAR S. DE H., 
Barranquilla, Colombia; c/o NEGOCIOS Y PROPIEDADES DEL CARIBE LTDA., 
Barranquilla, Colombia; c/o PROMOCIONES Y CONSTRUCCIONES DEL CARIBE 
LTDA., Barranquilla, Colombia; c/o PROMOCIONES Y CONSTRUCCIONES DEL 
CARIBE LTDA. Y CIA. S.C.A., Barranquilla, Colombia; c/o PROMOTORA HOTEL 
BARRANQUILLA LTDA., Barranquilla, Colombia; c/o SURAMERICANA DE HOTELES 
LTDA., Barranquilla, Colombia; DOB November 21, 1964; Passport T707770 
(Colombia); Passport PE008808 (Colombia); Cedula No. 8745045 (Colombia) 
(individual) [SDNT]
NASSER ARANA, Claudia Patricia (a.k.a. Claudia Patricia NASSER DE 
HASBUN; a.k.a. Claudia Patricia NASSER DE HAZBUN), Calle 74 No. 53-30, 
Barranquilla, Colombia; Carrera 54 No. 74-79, Barranquilla, Colombia; 
Carrera 54 No. 75-97 piso 2, Barranquilla, Colombia; c/o AGRICOLA SONGO 
LTDA., Barranquilla, Colombia; c/o CAMPO VERDE LTDA., Barranquilla, 
Colombia; c/o COMPAN[tilde]IA HOTEL DEL PRADO S.A., Barranquilla, 
Colombia; c/o DESARROLLOS URBANOS ``DESARROLLAR'' LTDA., Barranquilla, 
Colombia; c/o EDIFICACIONES DEL CARIBE LTDA., Barranquilla, Colombia; c/
o GRAN COMPAN[tilde]IA DE HOTELES LTDA., Barranquilla, Colombia; c/o 
HOTELES E INMUEBLES DE COLOMBIA LTDA., Barranquilla, Colombia; c/o 
INMOBILIARIA DEL CARIBE LTDA., Barranquilla, Colombia; c/o INMOBILIARIA 
HOTELERA DEL CARIBE LTDA., Barranquilla, Colombia; c/o INVERSIONES 
HOTELERAS DEL LITORAL LTDA., Barranquilla, Colombia; c/o INVERSIONES 
PRADO TRADE CENTER LTDA., Barranquilla, Colombia; c/o NEGOCIOS Y 
PROPIEDADES DEL CARIBE LTDA., Barranquilla, Colombia; c/o PROMOCIONES Y 
CONSTRUCCIONES DEL CARIBE LTDA., Barranquilla, Colombia; c/o PROMOCIONES 
Y CONSTRUCCIONES DEL CARIBE LTDA. Y CIA. S.C.A., Barranquilla, Colombia; 
c/o PROMOTORA HOTEL BARRANQUILLA LTDA., Barranquilla, Colombia; c/o 
SURAMERICANA DE HOTELES LTDA., Barranquilla, Colombia; c/o VILLA DE ARTE 
S. DE H., Barranquilla, Colombia; DOB January 23, 1966; Passport 
AC751227 (Colombia); Cedula No. 32665137 (Colombia) (individual) [SDNT]
NASSER ARANA, Jorge, Calle 74 No. 53-30, Barranquilla, Colombia; c/o 
AGRICOLA SONGO LTDA., Barranquilla, Colombia; c/o DESARROLLOS URBANOS 
``DESARROLLAR'' LTDA., Barranquilla, Colombia; c/o EDIFICACIONES DEL 
CARIBE LTDA., Barranquilla, Colombia; c/o GRAN COMPANN[tilde]IA DE 
HOTELES LTDA., Barranquilla, Colombia; c/o HAPPY DAYS S. de H., 
Barranquilla, Colombia; c/o HOTELES E INMUEBLES DE COLOMBIA LTDA., 
Barranquilla, Colombia; c/o INMOBILIARIA DEL CARIBE LTDA., Barranquilla, 
Colombia; INMOBILIARIA HOTELERA DEL CARIBE LTDA., Barranquilla, 
Colombia; INVERSIONES HOTELERAS DEL LITORAL LTDA., Barranquilla, 
Colombia; INVERSIONES PRADO TRADE CENTER LTDA., Barranquilla, Colombia; 
c/o NEGOCIOS Y PROPIEDADES DEL CARIBE LTDA., Barranquilla, Colombia; c/o 
PROMOCIONES Y CONSTRUCCIONES DEL CARIBE LTDA., Barranquilla, Colombia; 
c/o PROMOCIONES Y CONSTRUCCIONES DEL CARIBE LTDA. Y CIA. S.C.A., 
Barranquilla, Colombia; c/o PROMOTORA HOTEL BARRANQUILLA LTDA., 
Barranquilla, Colombia; c/o SURAMERICANA DE HOTELES LTDA., Barranquilla, 
Colombia; c/o VESTIMENTA J Y J S. de H., Barranquilla, Colombia; DOB 6 
November 1966; Passports T705915 (Colombia), AC143719 (Colombia); Cedula 
No. 72139939 (Colombia) (individual) [SDNT]
NASSER DAVID, Julio Cesar, (a.k.a. ``Jaime Perez Pen[tilde]a''), Calle 
74 No. 53-30, Barranquilla, Colombia; Carrera 38B No. 76-40, 
Barranquilla, Colombia; c/o AGRICOLA SONGO LTDA., Barranquilla, 
Colombia; c/o DESARROLLOS URBANOS ``DESARROLLAR'' LTDA., Barranquilla, 
Colombia; c/o EDIFICACIONES DEL CARIBE LTDA., Barranquilla, Colombia; c/
o GRAN COMPAN[tilde]IA DE HOTELES LTDA., Barranquilla, Colombia; c/o 
HOTELES E INMUEBLES DE COLOMBIA LTDA., Barranquilla, Colombia; c/o 
INMOBILIARIA DEL CARIBE LTDA., Barranquilla, Colombia; c/o INMOBILIARIA 
HOTELERA DEL CARIBE LTDA., Barranquilla, Colombia; c/o INVERSIONES 
HOTELERAS DEL LITORAL LTDA., Barranquilla, Colombia; c/o INVERSIONES 
PRADO TRADE CENTER LTDA., Barranquilla, Colombia; c/o NEGOCIOS Y 
PROPIEDADES DEL CARIBE LTDA., Barranquilla, Colombia; c/o PROMOCIONES Y 
CONSTRUCCIONES DEL CARIBE LTDA.,

[[Page 983]]

Barranquilla, Colombia; c/o PROMOCIONES Y CONSTRUCCIONES DEL CARIBE 
LTDA. Y CIA. S.C.A., Barranquilla, Colombia; c/o PROMOTORA HOTEL 
BARRANQUILLA LTDA., Barranquilla, Colombia; c/o SURAMERICANA DE HOTELES 
LTDA., Barranquilla, Colombia; DOB 1 November 1940; alt. DOB 1 October 
1940; Passport H130865 (Colombia); Cedula No. 3710619 (Colombia) 
(individual) [SDNT]
NASSER DE HASBUN, Claudia Patricia (see NASSER ARANA, Claudia Patricia) 
(individual) [SDNT]
NASSER DE HAZBUN, Claudia Patricia (see NASSER ARANA, Claudia Patricia) 
(individual) [SDNT]
NATIONAL AGRICULTURAL BANK OF LIBYA (a.k.a. AGRICULTURAL BANK, THE; 
a.k.a. LIBYAN AGRICULTURAL BANK), 52, Omar El Mokhtar Street, P.O. Box 
1100, Tripoli, Libya [LIBYA]
NATIONAL AGRICULTURAL BANK OF LIBYA (a.k.a. AGRICULTURAL BANK, THE; 
a.k.a. LIBYAN AGRICULTURAL BANK) (1 city branch and 27 branches in 
Libya) [LIBYA]
NATIONAL CEMENT AND BUILDING MATERIALS EST., P.O. Box 628, Sharia Hayati 
21, Tripoli, Libya [LIBYA]
NATIONAL CO. FOR CHEMICAL PREPARATION AND COSMETIC PRODUCTS, Benghazi 
Office, Benghazi, Libya; P.O. Box 2442, Tripoli, Libya [LIBYA]
NATIONAL CO. FOR CONSTRUCTION AND MAINTENANCE OF MUNICIPAL WORKS, P.O. 
Box 441, Benghazi, Libya; P.O. Box 12908, Zavia Street, Tripoli, Libya 
[LIBYA]
NATIONAL CO. FOR LIGHT EQUIPMENT, P.O. Box 540, Benghazi, Libya; P.O. 
Box 8707, Tripoli, Libya [LIBYA]
NATIONAL CO. FOR METAL WORKS, P.O. Box 4093, Benghazi, Libya; P.O. Box 
4093, Benghazi, Libya; Lift Department, P.O. Box 1000, Tripoli, Libya 
[LIBYA]
NATIONAL CO. FOR ROAD EQUIPMENT, P.O. Box 700, Benghazi, Libya; P.O. Box 
12392, Tripoli, Libya [LIBYA]
NATIONAL CO. FOR ROADS AND AIRPORTS, P.O. Box 4050, Benghazi, Libya; 
P.O. Box 8634, Sharia Al Jaraba, Tripoli, Libya [LIBYA]
NATIONAL CO. FOR TRADING AND MANUFACTURING OF CLOTHING, Libya [LIBYA]
NATIONAL CO. OF SOAP AND CLEANING MATERIALS, P.O. Box 246, Benghazi, 
Libya; P.O. Box 12025, Tripoli, Libya [LIBYA]
NATIONAL COMMERCIAL BANK S.A.L. (22 branches in Libya) [LIBYA]
NATIONAL COMMERCIAL BANK S.A.L., P.O. Box 166, Benghazi, Libya [LIBYA]
NATIONAL COMMERCIAL BANK S.A.L., P.O. Box 4647, Shuhada Square, Tripoli, 
Libya [LIBYA]
NATIONAL COMMITTEE FOR THE LIBERATION AND PROTECTION OF ALBANIAN LANDS 
(a.k.a. KKCMTSH) [BALKANS]
NATIONAL COMPANY FOR FIELD AND TERMINALS CATERING, Airport Road, Km. 3, 
P.O. Box 491, Tripoli, Libya [LIBYA]
NATIONAL COMPANY FOR OILFIELD EQUIPMENT, P.O. Box 8707, Tripoli, Libya 
[LIBYA]
NATIONAL CONSTRUCTION AND ENGINEERING CO., P.O. Box 259, Benghazi, 
Libya; P.O. Box 1060, Sharia Sidi Issa, Tripoli, Libya [LIBYA]
NATIONAL CONSULTING BUREAU, Sirte City Branch Office, Sirte City, Libya; 
P.O. Box 12795, Tripoli, Libya [LIBYA]
NATIONAL CORPORATION FOR HOUSING, P.O. Box 4829, Sharia el Jumhuriya, 
Tripoli, Libya [LIBYA]
NATIONAL COTTON AND TRADE COMPANY, P.O. Box 1552, Khartoum, Sudan 
[SUDAN]
NATIONAL COUNCIL OF RESISTANCE (NCR) (see MUJAHEDIN-E KHALQ 
ORGANIZATION) [FTO]
NATIONAL DEPARTMENT STORES CO., P.O. Box 5327, Sharia el Jumhuriya, 
Tripoli, Libya [LIBYA]
NATIONAL DRILLING COMPANY (a.k.a. NATIONAL DRILLING COMPANY (LIBYA); 
a.k.a. NATIONAL DRILLING WORKOVER COMPANY), 208 Omar El Mokhtar Street, 
P.O. Box 1454, Tripoli, Libya [LIBYA]
NATIONAL DRILLING COMPANY (LIBYA) (a.k.a. NATIONAL DRILLING COMPANY; 
a.k.a. NATIONAL DRILLING WORKOVER COMPANY), 208 Omar El Mokhtar Street, 
P.O. Box 1454, Tripoli, Libya [LIBYA]
NATIONAL EXPORT-IMPORT BANK (n.k.a. BANK OF KHARTOUM GROUP), Sudanese 
Kuwait Commercial Centre, Nile Street, P.O. Box 2732, Khartoum, Sudan 
[SUDAN]
NATIONAL FOODSTUFFS IMPORTS, EXPORTS AND MANUFACTURING CO. SAL, P.O. Box 
2439, Benghazi, Libya; P.O. Box 11114, Tripoli, Libya [LIBYA]
NATIONAL GENERAL INDUSTRIAL CONTRACTING CO., Sharia el Jumhouria, P.O. 
Box 295, Tripoli, Libya [LIBYA]
NATIONAL LIBERATION ARMY (a.k.a. ELN; a.k.a. EJERCITO DE LIBERACION 
NACIONAL) [FTO]
NATIONAL LIBERATION ARMY (a.k.a. NLA; a.k.a. UCK) [BALKANS]
NATIONAL LIBERATION ARMY OF IRAN (see MUJAHEDIN-E KHALQ ORGANIZATION) 
[FTO]
NATIONAL LIVESTOCK AND MEAT CO., P.O. Box 4153, Sharia Jamal 
Abdulnasser, Benghazi, Libya; P.O. Box 389, Sharia Zawiet Dahmani, 
Tripoli, Libya [LIBYA]
NATIONAL MOVEMENT FOR THE LIBERATION OF KOSOVO (a.k.a. LKCK) [BALKANS]
NATIONAL PHARMACEUTICAL CO. SAL, P.O. Box 2620, Benghazi, Libya; 20 
Jalal Bayer Street, P.O. Box 2296, Tripoli, Libya;

[[Page 984]]

Jamahiriya Street, P.O. Box 10225, Tripoli, Libya [LIBYA]
NATIONAL REINSURANCE COMPANY (SUDAN) LIMITED, P.O. Box 443, Khartoum, 
Sudan [SUDAN]
NATIONAL SOFT DRINKS EST., P.O. Box 559, Benghazi, Libya; (branch) 
Litraco Impex Ltd., P.O. Box 5686, Benghazi, Libya [LIBYA]
NATIONAL STORES AND COLD STORES CO., P.O. Box 9250, Benghazi, Libya; 
P.O. Box 8454, Tripoli, Libya [LIBYA]
NATIONAL SUPPLIES CORPORATION (a.k.a. NASCO), P.O. Box 2071, Benghazi, 
Libya; P.O. Box 3402, Sharia Omar Mukhtar, Tripoli, Libya [LIBYA]
NATIONAL TELECOMMUNICATIONS CO., P.O. Box 4139, Benghazi, Libya; P.O. 
Box 886, Shara Zawia, Tripoli, Libya [LIBYA]
NAVARRO REYES, Fernando, c/o DEPOSITO POPULAR DE DROGAS S.A., Cali, 
Colombia; c/o DROGAS LA REBAJA BARRANQUILLA S.A., Bogota, Colombia; c/o 
DROGAS LA REBAJA BOGOTA S.A., Bogota, Colombia; c/o DROGAS LA REBAJA 
CALI S.A., Cali, Colombia; c/o DROGAS LA REBAJA NEIVA S.A., Neiva, 
Colombia; c/o DROGAS LA REBAJA PEREIRA S.A., Pereira, Colombia; c/o 
DROGAS LA REBAJA PRINCIPAL S.A., Cali, Colombia; c/o SERVICIOS 
FARMACEUTICOS SERVIFAR S.A., Cali, Colombia; Cedula No. 16617177 
(Colombia) (individual) [SDNT]
NAVARRO, Samuel (MARTINEZ), Frankfurt, Germany (individual) [CUBA]
NAVIERA MARITIMA DE AROSA, S.A., Paseo de Pereda 36, Apartado 141, 39004 
Santander, Spain [CUBA]
NAVIGABLE WATER CORPORATION, c/o EMPRESA DE NAVEGACION CARIBE, Edificio 
Lonja del Comercio, Lamparilla 2, Caja Postal 1784, Havana 1, Cuba 
[CUBA]
NAZIM, Abou (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIL, Jamil; a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; 
a.k.a. HAMIYYAH, Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; 
a.k.a. KARIM, Jamil Abdul; a.k.a. NEZAM, Abu; a.k.a. NIZAM, Abou); DOB 
Sep 1938 (individual) [SDNTK]
NEGOCIOS LOS SAUCES LTDA., (f.k.a. SAMARIA LTDA.), Apartado Aereo 10077, 
Cali, Colombia; Carrera 4 No. 4-21 of. 1501, Edificios Seguros Bolivar, 
Cali, Colombia; NIT  890328835-1 [SDNT]
NEGOCIOS LOS SAUCES LTDA. Y CIA. S.C.S., (f.k.a. INMOBILIARIA SAMARIA 
LTDA.), Calle 13 No. 3-32 piso 13, Cali, Colombia; Calle 13A No. 64-50 
F102, Cali, Colombia; Calle 18 No. 106-96 of. 201/202, Cali, Colombia; 
Carrera 4 No. 12-41 of. 1501, Edificio Seguros Bolivar, Cali, Colombia; 
NIT  890937859-0 [SDNT]
NEGOCIOS Y PROPIEDADES DEL CARIBE LTDA., (f.k.a. NEGOCIAR LTDA.), Calle 
74 No. 53-30, Barranquilla, Colombia; NIT  890108102-8 
(Colombia) [SDNT]
NESSI, Ferruccio, Piazza Grande 26, 6600 Locarno, Switzerland 
(individual) [IRAQ]
NEUTRON INTERNATIONAL, Tripoli, Libya [LIBYA]
NEW HAIFA SUGAR FACTORY, Kashm el Girba, Sudan [SUDAN]
NEW JIHAD (see AL-JIHAD) [SDT, FTO]
NEW JIHAD (see AL-JIHAD) [SDT] [FTO] [SDGT]
NEW KHARTOUM TANNERY, P.O. Box 17, Khartoum, Sudan [SUDAN]
NEZAM, Abu (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIL, Jamil; a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; 
a.k.a. HAMIYYAH, Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; 
a.k.a. KARIM, Jamil Abdul; a.k.a. NAZIM, Abou; a.k.a. NIZAM, Abou); DOB 
Sep 1938 (individual) [SDNTK]
NIDAL, Abu (a.k.a. AL BANNA, Sabri Khalil Abd Al Qadir), Founder and 
Secretary General of ABU NIDAL ORGANIZATION (DOB May 1937 or 1940, POB 
Jaffa, Israel) (individual) [SDT]
NIHON SEKIGUN (see JAPANESE RED ARMY) [FTO]
NILE CEMENT COMPANY LIMITED, P.O. Box 1502, Khartoum, Sudan; Factories 
at Rabak, St. 45-47, Khartoum Extension, Sudan [SUDAN]
NILEIN INDUSTRIAL DEVELOPMENT BANK (SUDAN) (a.k.a. EL NILEIN INDUSTRIAL 
DEVELOPMENT BANK (SUDAN); a.k.a. EL NILEIN INDUSTRIAL DEVELOPMENT BANK 
GROUP; f.k.a. EL NILEIN BANK; f.k.a. INDUSTRIAL BANK OF SUDAN), P.O. Box 
466/1722, United Nations Square, Khartoum, Sudan; Parliament Street, 
P.O. Box 466, Khartoum, Sudan; P.O. Box 6013, Abu Dhabi City, United 
Arab Emirates [SUDAN]
NIPPON-CARIBBEAN CO., LTD., Chuo-Ku, Akasaki-Chuo 1-1 Akasaki Bldg., 
Tokyo, Japan [CUBA]

[[Page 985]]

NIPPON SEKIGUN (see JAPANESE RED ARMY) [FTO]
NIREF, Boezembolcht 23, Rotterdam, Netherlands [CUBA]
NIZAM, Abou (a.k.a. HAMEIAH, Jamel; a.k.a. HAMEIAH, Jamil; a.k.a. 
HAMEIAH, Mamil; a.k.a. HAMEIEH, Jamil; a.k.a. HAMEIH, Jamill; a.k.a. 
HAMER, Jamil; a.k.a. HAMIAEH, Jamil; a.k.a. HAMIAH, Jamiel; a.k.a. 
HAMIE, Jamil Abdulkarim; a.k.a. HAMIE, Jamil; a.k.a. HAMIE, Jamile; 
a.k.a. HAMIEAH, Jamiel; a.k.a. HAMIEAH, Jamil; a.k.a. HAMIEH, Jamal; 
a.k.a. HAMIEH, Jamiel; a.k.a. HAMIEH, Jamil; a.k.a. HAMIEH, Mamil; 
a.k.a. HAMIEL, Jamil; a.k.a. HAMIEYE, Jamil; a.k.a. HAMIEYYEH, Jamil; 
a.k.a. HAMIL, Jamil; a.k.a. HAMIYA, Abdul Jamil; a.k.a. HAMIYE, Jamil; 
a.k.a. HAMIYYAH, Jamil; a.k.a. HAMIYYEH, Jamil; a.k.a. HAMYH, Jamil; 
a.k.a. KARIM, Jamil Abdul; a.k.a. NAZIM, Abou; a.k.a. NEZAM, Abu); DOB 
Sep 1938 (individual) [SDNTK]
NLA (a.k.a. NATIONAL LIBERATION ARMY; a.k.a. UCK) [BALKANS]
NLA (see MUJAHEDIN-E KHALQ ORGANIZATION) [FTO]
NORDDEUTSCHE OELLEITUNGSGESELLSCHAFT MBH (a.k.a. NDO; a.k.a. NORTH 
GERMAN OIL PIPELINE), Wilhelmshaven to Hamburg pipeline, Germany [LIBYA]
NORDDEUTSCHE OELLEITUNGSGESELLSCHAFT MBH (a.k.a. NDO; a.k.a. NORTH 
GERMAN OIL PIPELINE), Moorburger Strasse 16, D2000 Hamburg-Harburg 90, 
Germany [LIBYA]
NORDSTRAND LTD., Liechtenstein [CUBA]
NORDSTRAND MARITIME AND TRADING COMPANY, 33 Akti Maouli, 185-35 Pireas 
(Piraeus), Greece [CUBA]
NORIEGA, Manuel Antonio, Panama (individual) [CUBA]
NORTH AFRICA COMMERCIAL BANK S.A.L. (f.k.a. ARAB LIBYAN TUNISIAN BANK 
S.A.L.), P.O. Box 9575/11, 1st Floor, Piccadily Centre, Hamra Street, 
Beirut, Lebanon [LIBYA]
NORTH AFRICA INDUSTRIAL TRADING AND CONTRACTING CO., P.O. Box 245, 
Tripoli, Libya [LIBYA]
NORTH ISLAND SHIPPING CO. LTD., c/o UNION MARITIMA PORTUARIA, 9-Piso, 
Apartado B, Esquina Cuarteles y Pena Pobre 60, Havana Vieje, Havana, 
Cuba [CUBA]
NORTHWEST SENNAR SUGAR FACTORY, Northwest Sennar, Sudan [SUDAN]
OBEYMAR MAFLA, Carlos, c/o MERCAVICOLA LTDA., Cali, Colombia (Cedula No. 
6226643 (Colombia)) [SDNT]
OCAMPO, Carlos, c/o CONSTRUCCIONES ASTRO S.A., Cali, Colombia; (Cedula 
No. 6401478 (Colombia)) (individual) [SDNT]
OCCIDENTAL COMUNICACIONES LTDA., Calle 44N No. 2BN-10, Cali, Colombia; 
Calle 19N No. 2N-29 piso 10 Sur, Cali, Colombia; NIT 800146996-
1 (Colombia) [SDNT]
OCHOA, Salvador (see AMEZCUA CONTRERAS, Luis Ignacio) (individual) 
[SDNTK]
OCTUBRE HOLDING SOCIETE ANONIME (a.k.a. OCTOBER HOLDING COMPANY), Vaduz, 
Liechtenstein [CUBA]
OEA DRINKS CO., P.O. Box 101, Ibn El Jarrah Street, Tripoli, Libya 
[LIBYA]
OGUNGBUYI, Abeni O. (a.k.a. BABESTAN, Abeni O.; a.k.a. SHOFESO, Olatutu 
Temitope), DOB 30 June 1952; POB Nigeria (individual) [SDNTK]
OGUNGBUYI, Oluwole A. (a.k.a. ADEMULERO, Babestan Oluwole; a.k.a. 
BABESTAN, Wole A.; a.k.a. OGUNGBUYI, Wally; a.k.a. OGUNGBUYI, Wole A.; 
a.k.a. SHOFESO, Olatude I.; a.k.a. SHOFESO, Olatunde Irewole), DOB 4 
March 1953, POB Nigeria (individual) [SDNTK]
OGUNGBUYI, Wally (see OGUNGBUYI, Oluwole A.) (individual) [SDNTK]
OGUNGBUYI, Wole A. (see OGUNGBUYI, Oluwole A.) (individual) [SDNTK]
OIL CORPORATION, P.O. Box 64, Khartoum, Sudan [SUDAN]
OIL ENERGY FRANCE, France [LIBYA]
OILINVEST (NETHERLANDS) B.V. (a.k.a. OILINVEST HOLLAND B.V.), Museumpln 
11, 1071 DJ Amsterdam, Netherlands [LIBYA]
OILINVEST ESPANOLA (a.k.a. OIL ENERGY SPAIN; a.k.a. OILINVEST SPAIN), 
Spain [LIBYA]
OILINVEST INTERNATIONAL N.V. (a.k.a. FOREIGN PETROLEUM INVESTMENT 
CORPORATION; a.k.a. LIBYAN OIL INVESTMENTS INTERNATIONAL COMPANY; a.k.a. 
OIIC; a.k.a. OILINVEST), Tripoli, Libya [LIBYA]
OILINVEST INTERNATIONAL N.V. (a.k.a. FOREIGN PETROLEUM INVESTMENT 
CORPORATION; a.k.a. LIBYAN OIL INVESTMENTS INTERNATIONAL COMPANY; a.k.a. 
OIIC; a.k.a. OILINVEST), Netherlands Antilles [LIBYA]
OJDANIC, Dragoljub, Ex-Minister of Defense, Federal Republic of 
Yugoslavia; (ICTY indictee) (DOB 1 Jun 41; POB Ravni, Cajetina) 
(individual) [FRYM]
OKBA FOOTWEAR PLANT, Tajoura, Libya [LIBYA]
OMAR, Mohammed, Commander of the Faithful (``Amir al-Mumineen''), 
Kandahar, Afghanistan; DOB 1950; POB Hotak, Kandahar Province, 
Afghanistan (individual) [TALIBAN]
OMDURMAN SHOE FACTORY, Omdurman, Sudan [SUDAN]
OMEISH, Ramadan M., Tripoli, Libya; Abu Dhabi, U.A.E. (individual) 
[LIBYA]
OMRAN, Karim Dhaidas, Iraq (individual) [IRAQ]
OMRANI, Abuzeid Ramadan, Administrative Manager of Libyan Arab Foreign 
Investment Company, Libya (individual)

[[Page 986]]

[LIBYA]FP-1ORGANIZACION EMPRESARIAL A DE J HENAO M E HIJOS Y 
CIA. S.C.S., Carrera 4A No. 16-04 apt. 303, Cartago, Colombia; Km. 5 Via 
Aeropuerto, Hacienda Coque, Cartago, Colombia; NIT  800157331-1 
(Colombia) [SDNT]
ORGANIZATION OF REVOLUTIONARY INTERNATIONALIST SOLIDARITY (see 
REVOLUTIONARY PEOPLE'S STRUGGLE) [FTO]
ORGANIZATION OF RIGHT AGAINST WRONG (see HIZBALLAH) [SDT, FTO]
ORGANIZATION OF THE OPPRESSED ON EARTH (see HIZBALLAH) [SDT, FTO]
ORGANIZATION OF THE PEOPLE'S HOLY WARRIORS OF IRAN (see MUJAHEDIN-E 
KHALQ ORGANIZATION) [FTO]
ORIENT SHIPPING LIMITED, Lot 18, Bay Street, Kingstowne, St. Vincent and 
the Grenadines [IRAQ]
ORS, Jose Antonio Rego, Tokyo, Japan (individual) [CUBA]
ORTEGA, Dario (PINA), Edificio Saldivar, Panama City, Panama 
(individual) [CUBA]
ORTEGA, Miguel (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, Gilberto; 
a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, Joaquin; a.k.a. 
GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. GUZMAN, Aureliano; 
a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, 
Joaquin Chapo; a.k.a. GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, 
Joaquin; a.k.a. GUZMAN LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; 
a.k.a. GUZMAN PADILLA, Joaquin; a.k.a. OSUNA, Gilberto; a.k.a. RAMIREZ, 
Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB Mexico 
(individual) [SDNTK]
ORTIZ PALACIOS, Willington A., Avenida 5AN No. 23D-68 piso 2, Cali, 
Colombia; Carrera 62 Bis No. 6A, Cali, Colombia; c/o CREACIONES 
DEPORTIVAS WILLINGTON LTDA., Cali, Colombia (individual) [SDNT]
ORTIZ, Guadalupe, Cubanatur, Baja California 255, Edificio B, Oficina 
103, Condesa 06500, Mexico, D.F., Mexico (individual) [CUBA]
OS OILINVEST SERVICES A.G., Loewenstrasse 60, Zurich, Switzerland 
[LIBYA]
OSORIO CADAVID, Maria Victoria, c/o COLOR 89.5 FM STEREO, Cali, 
Colombia; c/o DERECHO INTEGRAL Y CIA. LTDA., Cali, Colombia (Cedula No. 
31932294 (Colombia)) (individual) [SDNT]
OSTREMI, Gezim, Member of National Liberation Army (NLA) (DOB: 1 Nov 
1942; POB: Debar, Macedonia) (individual) [BALKANS]
OSUNA, Gilberto (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, Gilberto; 
a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, Joaquin; a.k.a. 
GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. GUZMAN, Aureliano; 
a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, 
Joaquin Chapo; a.k.a. GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, 
Joaquin; a.k.a. GUZMAN LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; 
a.k.a. GUZMAN PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. RAMIREZ, 
Joise Luis; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 1954; POB Mexico 
(individual) [SDNTK]
PADRON, Amado (TRUJILLO), Panama (individual) [CUBA]
PAK-LIBYAN HOLDING COMPANY LTD., Karachi, Pakistan [LIBYA]
PALESTINE ISLAMIC JIHAD-SHAQAQI FACTION (a.k.a. PIJ-SHAQAQI FACTION; 
a.k.a. PIJ-SHALLAH FACTION; a.k.a. PALESTINIAN ISLAMIC JIHAD; a.k.a. 
PIJ; a.k.a. ISLAMIC JIHAD OF PALESTINE; a.k.a. ISLAMIC JIHAD IN 
PALESTINE; a.k.a. ABU GHUNAYM SQUAD OF THE HIZBALLAH BAYT AL-MAQDIS) 
[SDT, FTO]
PALESTINE LIBERATION FRONT (see PALESTINE LIBERATION FRONT--ABU ABBAS 
FACTION) [SDT, FTO]
PALESTINE LIBERATION FRONT--ABU ABBAS FACTION (a.k.a. PALESTINE 
LIBERATION FRONT; a.k.a. PLF; a.k.a. PLF-ABU ABBAS) [SDT, FTO]
PALESTINIAN ISLAMIC JIHAD (see PALESTINE ISLAMIC JIHAD-SHAQAQI FACTION) 
[SDT, FTO]
PALMA SAADE, Jessica Maria, Calle 78 No. 53-70, Local 202, Barranquilla, 
Colombia; c/o VESTIMENTA J y J S. de H., Barranquilla, Colombia; Cedula 
No. 32758645 (Colombia) (individual) [SDNT]
PAMIT C. SHIPPING CO., LTD., Limassol, Cyprus [CUBA]
PANAMERICAN IMPORT AND EXPORT COMMERCIAL CORPORATION, Panama [CUBA]
PANDORA SHIPPING CO. S.A., Honduras [IRAQ]
PANOAMERICANA, Panama [CUBA]
PARADISSIOTIS, Christoforos Pavlou, 34 Grosvenor Street, London W1X 9FG, 
England (individual) [LIBYA]
PARADISSIOTIS, Christoforos Pavlou, Larnaca, Cyprus (individual) [LIBYA]
PAREDES GONZALEZ, Nohora, c/o COPSERVIR LTDA., Bogota, Colombia (Cedula 
No. 36376456 (Colombia)) (individual) [SDNT]
PARQUE INDUSTRIAL LAS DELICIAS LTDA., Carrera 7 No. 34-341, Cali, 
Colombia; Carrera 7 No. 34-341 L-6, Cali, Colombia [SDNT]
PARTIDO COMUNISTA DEL PERU (COMMUNIST PARTY OF PERU) (see SHINING PATH) 
[FTO]
PARTIDO COMUNISTA DEL PERU EN EL SENDERO LUMINOSO DE JOSE CARLOS 
MARIATEGUI (COMMUNIST PARTY OF

[[Page 987]]

PERU ON THE SHINING PATH OF JOSE CARLOS MARIATEGUI) (see SHINING PATH) 
[FTO]
PARTIYA KARKERAN KURDISTAN (see KURDISTAN WORKERS' PARTY) [FTO]
PARTY OF GOD (see HIZBALLAH) [SDT, FTO]
PATENTES MARCAS Y REGISTROS S.A. (a.k.a. PATMAR S.A.), Transversal 29 
No. 39-92, Bogota, Colombia; NIT  830016913-0 (Colombia) [SDNT]
PATIN[tilde]O RINCON, Octavio, c/o INVERSIONES VILLA PAZ S.A., Cali, 
Colombia (Cedula No. 2438955 (Colombia)) (individual) [SDNT]
PATIN[tilde]O URIBE, Carlos Augusto, c/o DISTRIBUIDORA MIGIL LTDA., 
Cali, Colombia (Cedula No. 16627574 (Colombia).) (individual) [SDNT]
PATIN[tilde]O FOMEQUE, Sonia Daysi,(a.k.a. PATIO FOMEQUE, Sonia Daicy), 
Calle 9 Oeste No. 25-106, Cali, Colombia; c/o INDUSTRIA DE PESCA SOBRE 
EL PACIFICO S.A., Buenaventura, Colombia; Cedula No. 66920533 (Colombia) 
(individual) [SDNT]
PATI[tilde]O FOMEQUE, Victor Julio, (a.k.a. PATINO FOMEQUE, Victor 
Hugo), Avenida 4N No. 10N-100, Cali, Colombia; 6 c/o INDUSTRIA DE PESCA 
SOBRE EL PACIFICO S.A., Buenaventura, Colombia; c/o TAURA S.A., Cali, 
Colombia; c/o GALAPAGOS S.A., Cali, Colombia; DOB 31 Jan 1959; Cedula 
No. 16473543 (Colombia)(individual) [SDNT]
PATIN[tilde]O NARANJO, Joaquin Gustavo, Avenida 4N No. 10N-100, Cali, 
Colombia; c/o INDUSTRIA DE PESCA SOBRE EL PACIFICO S.A., Buenaventura, 
Colombia; Cedula No. 2730245 (Colombia) (individual) [SDNT]
PATMAR S.A. (see PATENTES MARCAS Y REGISTROS S.A.) [SDNT]
PAULO, Armindo Lucas ``Gato'' (a.k.a. GATO, Armindo Lukamba ``Gato''; 
a.k.a. GATO, Paulo Lukamba), UNITA Secretary-General; DOB 13 May 1954; 
POB Bailundo, Huambo Province, Angola (individual) [UNITA]
PAUNOVIC, Radisav, General Manager of Izvozna Banka AD (individual) 
[FRYM]
PAVKOVIC, Nebojsa, Chief of General Staff, Army (DOB 10 Apr 46; POB 
Senjski Rudnik, Despotovac Municipality, Pozarevac, Serbia) (individual) 
[FRYM]
PAZ MAHECHA, Gonzalo Rodrigo, Calle 102 No. 48A-08, Bogota, Colombia; 
Calle 13 No. 4-25 piso 6, Cali, Colombia; Calle 13A No. 66B-60 apt. 
101A, Cali, Colombia; Calle 13A No. 66B-60 apt. 102A, Cali, Colombia; 
Calle 13A No. 66B-60 apt. 902A, Cali, Colombia; Carrera 4 No. 11-45 apt. 
621, Cali, Colombia; Carrera 4 No. 11-45 apt. 624, Cali, Colombia; 
Carrera 4 No. 11-45 of. 802, Cali, Colombia; Carrera 4 No. 11-45 of. 
809, Cali, Colombia; Transversal 98 No. 28A-46, Cali, Colombia; c/o 
COLOR 89.5 FM STEREO, Cali, Colombia (Cedula No. 16590653 (Colombia)) 
(individual) [SDNT]
PCP (see SHINING PATH) [FTO]
PCPMB (a.k.a. POLITICAL COUNCIL OF PRESEVO, MEDVEDJA, AND BUJANOVAC) 
[BALKANS]
PELAEZ DE HENAO, Teresa, c/o ALFA PHARMA S.A., Bogota, Colombia (Cedula 
No. 29013555 (Colombia)) (individual) [SDNT]
PENA, Jose (TORRES), Panama (individual) [CUBA]
PENA, Victor, Panama (individual) [CUBA]
PENEZIC, Branislav, General Manager of DUNAV Banka AD (individual) 
[FRYM]
PENTA PHARMA DE COLOMBIA S.A., Calle 17A No. 28A-23, Bogota, Colombia; 
Calle 17A No. 28A-43, Bogota, Colombia [SDNT]
PENTACOOP LTDA. (f.k.a. PENTA PHARMA DE COLOMBIA S.A.), Calle 17A No. 
28A-23, Bogota, Colombia; Calle 17A No. 28A-43, Bogota, Colombia (NIT 
 830016989-1) [SDNT]
PEONY SHIPPING CO. LTD., c/o NORDSTRAND MARITIME & TRADING CO. LTD., 26 
Skouze Street, Piraeus, Greece [CUBA]
PEOPLE'S CO-OPERATIVE BANK, P.O. Box 922, Khartoum, Sudan [SUDAN]
PEOPLE'S MUJAHEDIN ORGANIZATION OF IRAN (see MUJAHEDIN-E KHALQ 
ORGANIZATION) [FTO]
PERDOMO ZUN[tilde]IGA, Hugo Ivan, c/o CONSTRUVIDA S.A., Cali, Colombia 
(Cedula No. 16669843 (Colombia)) (individual) [SDNT]
PEREZ GARCIA, Carlos, c/o ASESORIAS COSMOS LTDA., Cali, Colombia (Cedula 
No. 14920419 (Colombia)) (individual) [SDNT]
PEREZ ORTEGA, Publio Eliecer, c/o INVERSIONES VILLA PAZ S.A., Cali, 
Colombia (Cedula No. 16597479 (Colombia)) (individual) [SDNT]
PEREZ SERNA, Wilmar Armando, c/o INVHERESA S.A., Cali, Colombia 
(individual) [SDNT]
PEREZ VARELA, Jaime Diego, c/o CONSTRUCTORA GOPEVA LTDA., Cali, Colombia 
(Cedula No. 2895666 (Colombia)) (individual) [SDNT]
PEREZ, Alfonso, Panama (individual) [CUBA]
PEREZ, Manuel Martin, Panama (individual) [CUBA]
PEREZ, Osvaldo (CRUZ), Panama (individual) [CUBA]
PESCABRAVA, S.A., France [CUBA]
PESCABRAVA, S.A., Italy [CUBA]
PESCABRAVA, S.A., Spain [CUBA]
PESCADOS Y MARISCOS DE PANAMA, S.A. (a.k.a. PESMAR (or PEZMAR), S.A.), 
Panama City, Panama [CUBA]
PETRA NAVIGATION & INTERNATIONAL TRADING CO. LTD. (a.k.a. AL PETRA 
COMPANY FOR GOODS TRANSPORT

[[Page 988]]

LTD.), Hai Al Wahda Mahalat 906, 906 Zulak 50, House 14, Baghdad, Iraq 
[IRAQ]
PETROLEUM GENERAL ADMINISTRATION, P.O. Box 2649, Khartoum, Sudan [SUDAN]
PETROVIC, Radoje, General Manager for International Payments of 
Beogradska Banka (individual) [FRYM]
PFLP (see POPULAR FRONT FOR THE LIBERATION OF PALESTINE) [SDT, FTO]
PFLP-GC (see POPULAR FRONT FOR THE LIBERATION OF PALESTINE-GENERAL 
COMMAND) [SDT, FTO]
PIEDRAHITA, Gustavo Adolfo, c/o AGROPECUARIA LA ROBLEDA S.A., Cali, 
Colombia (Cedula No. 16764002 (Colombia)) (individual) [SDNT]
PIJ (see PALESTINE ISLAMIC JIHAD-SHAQAQI FACTION) [SDT, FTO]
PIJ-SHALLAH FACTION (see PALESTINE ISLAMIC JIHAD-SHAQAQI FACTION) [SDT, 
FTO]
PIJ-SHAQAQI FACTION (see PALESTINE ISLAMIC JIHAD-SHAQAQI FACTION) [SDT, 
FTO]
PIN[tilde]EROS LEON, Miguel E., c/o COPSERVIR LTDA., Bogota, Colombia 
(Cedula No. 468712 (Colombia)) (individual) [SDNT]
PINZON, Marco Antonio, c/o DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, 
Colombia; c/o DEPOSITO POPULAR DE DROGAS S.A., Cali, Colombia (Cedula 
No. 17801803 (Colombia)) (individual) [SDNT]
PINZON CEDIEL, John Jairo, c/o TAURA S.A., Cali, Colombia; Cedula No. 
13542103 (Colombia) (individual) [SDNT]
PIONEER SHIPPING LTD., c/o Anglo Caribbean Shipping Co., Ltd., 4th 
Floor, South Phase 2, South Quay Plaza 2, 183 Marsh Wall, London E14 
9SH, England; 171 Old Bakery Street, Valletta, Malta [CUBA]
PIRAMIDE INTERNATIONAL, Panama [CUBA]
PIRANHA NAVIGATION CO. LTD., c/o NORDSTRAND MARITIME & TRADING CO. LTD., 
26 Skouze Street, Piraeus, Greece [CUBA]
PKK (see KURDISTAN WORKERS' PARTY) [FTO]
PLASTIC SACKS FACTORY (see SACKS FACTORY) [SUDAN]
PLASTICOS CONDOR LTDA., Carrera 13 No. 16-62, Cali, Colombia [SDNT]
PLF (see PALESTINE LIBERATION FRONT--ABU ABBAS FACTION) [SDT, FTO]
PLF-ABU ABBAS (see PALESTINE LIBERATION FRONT--ABU ABBAS FACTION) [SDT, 
FTO]
PMBLA (a.k.a. LIBERATION ARMY OF PRESEVO, MEDVEDJA, AND BUJANOVAC; 
a.k.a. UCPMB) [BALKANS]
PMOI (see MUJAHEDIN-E KHALQ ORGANIZATION) [FTO]
POCHO NAVIGATION CO. LTD., c/o EMPRESA DE NAVEGACION MAMBISA, Apartado 
543, San Ignacio 104, Havana, Cuba [CUBA]
POLIEMPAQUES LTDA., Carrera 13A No. 16-49, Cali, Colombia; Carrera 13A 
No. 16-55, Cali, Colombia; Carrera 13 No. 16-62, Cali, Colombia; NIT 
805003763-5 (Colombia) [SDNT]
POLITICAL COUNCIL OF PRESEVO, MEDVEDJA, AND BUJANOVAC (a.k.a. PCPMB) 
[BALKANS]
PONCE DE LEON, Lazaro (GOMEZ), Medira, Mexico (individual) [CUBA]
PONS, Alberto, Executive Representative, Banco Nacional de Cuba, 
Federico Boyd Avenue & 51 Street, Panama City, Panama (Licensed pending 
removal by FAC) (individual) [CUBA]
POPULAR FRONT FOR THE LIBERATION OF PALESTINE (a.k.a. PFLP; a.k.a. RED 
EAGLES; a.k.a. RED EAGLE GROUP; a.k.a. RED EAGLE GANG; a.k.a. HALHUL 
GANG; a.k.a. HALHUL SQUAD) [SDT, FTO]
POPULAR FRONT FOR THE LIBERATION OF PALESTINE-GENERAL COMMAND (a.k.a. 
PFLP-GC) [SDT, FTO]
POPULAR MOVEMENT OF KOSOVO (a.k.a. LPK) [BALKANS]
POPULAR REVOLUTIONARY STRUGGLE (see REVOLUTIONARY PEOPLE'S STRUGGLE) 
[FTO]
PORT SUDAN COTTON AND TRADE COMPANY (a.k.a. PORT SUDAN COTTON COMPANY), 
P.O. Box 590, Khartoum, Sudan; P.O. Box 261, Port Sudan, Sudan [SUDAN]
PORT SUDAN COTTON COMPANY (see PORT SUDAN COTTON AND TRADE COMPANY) 
[SUDAN]
PORT SUDAN DUTY FREE SHOP, Port Sudan, Sudan [SUDAN]
PORT SUDAN EDIBLE OILS STORAGE CORPORATION, P.O. Box 429, Port Sudan, 
Sudan [SUDAN]
PORT SUDAN REFINERY LIMITED, P.O. Box 354, Port Sudan, Sudan [SUDAN]
PORT SUDAN SPINNING FACTORY, Port Sudan, Sudan [SUDAN]
POSSO DE LONDON[tilde]O, Maria del Carmen, c/o INVERSIONES VILLA PAZ 
S.A., Cali, Colombia (Cedula No. 29664243 (Colombia)) (individual) 
[SDNT]
PRADO CUERO, Salomon (a.k.a. CHALO), Avenida 26 No. 42B-89, Bogota, 
Colombia; Carrera 101B No. 11B-50, Cali, Colombia; c/o COLOR 89.5 FM 
STEREO, Cali, Colombia (DOB 1 August 1948) (individual) [SDNT]FP-
1PRASIT, Cheewinnittipanya (see WEI, Hsueh Kang) (individual) 
[SDNTK]
PRASIT, Chivinnitipanya (see WEI, Hsueh Kang) (individual) [SDNTK]
PRELASA, Mexico [CUBA]

[[Page 989]]

PRENSA LATINA CANADA LTD., 1010 O Rue Ste. Catherine, Montreal PQ H303 
IGI, Canada [CUBA]
PRENSA LATINA, Spain [CUBA]
PRESA, S.A., Panama [CUBA]
PREVIA S.A. (a.k.a. PREVENCION Y ANALISIS DE RIESGOS), Carrera 3 No. 10-
20 of. 202, Cali, Colombia; Carrera 3 No. 12-40 of. 504, Cali, Colombia 
[SDNT]
PRIETO, Diocelina (see PRIETO, Dioselina) (individual) [SDNT]
PRIETO, Dioselina, (a.k.a. PRIETO, Diocelina), Carrera 12 No. 2-81, 
Bogota, Colombia; c/o COMEDICAMENTOS S.A., Bogota, Colombia; c/o 
DISTRIBUIDORA AGROPECUARIA COLOMBIANA S.A., Cali, Colombia; c/o GLAJAN 
S.A., Bogota, Colombia; c/o INVERSIONES BOMBAY S.A., Bogota, Colombia; 
Cedula No. 41760201 (Colombia) (individual) [SDNT]
PRIMA EXPORT/IMPORT, Jamaica [CUBA]
PRISMA STEREO 89.5 F.M. (see SONAR F.M. E.U. DIETER MURRLE) [SDNT]
PROCESADORA DE POLLOS SUPERIOR S.A. (a.k.a. COMERCIALIZADORA 
INTERNACIONAL VALLE DE ORO S.A.), A.A. 1689, Cali, Colombia; Avenida 2N 
No. 7N-55 of. 521, Cali, Colombia; Carrera 3 No. 12-40, Cali, Colombia; 
Km 17 Recta Cali-Palmira, Palmira, Colombia (NIT  800074991-3 
(Colombia)) [SDNT]
PRODUCCIONES CARNAVAL DEL NORTE Y COMPANIA LIMITADA, Calle 22N No. 5A-75 
05, Cali, Colombia; NIT 800250531-3 (Colombia) [SDNT]
PROHUEVO DE COLOMBIA LTDA., 1 Km Antes de Cavasa Palmira-Cali, Colombia; 
Calle 34 No. 5A-25, Cali, Colombia; Granja Pio Pio Carretera Cali-
Candelaria Km 12, Cali, Colombia (NIT  800089683-5) [SDNT]
PROMOCIONES ARTISTICAS (a.k.a. PROARTE), Avenida Insurgentes Sur No. 
421, Bloque B Despacho 404, C.P. 06l00, Mexico, D.F., Mexico [CUBA]
PROMOCIONES Y CONSTRUCCIONES DEL CARIBE LTDA., Calle 74 No. 53-30, 
Barranquilla, Colombia; Calle 78 No. 53-70 Centro Comercial Villa 
Country, Barranquilla, Colombia; Carrera 54 No. 72-80 Ejecutivo I, 
Barranquilla, Colombia; Carrera 54 No. 72-147, Barranquilla, Colombia; 
Carrera 55 No. 72-109 Piso 1, Barranquilla, Colombia; Carrera 56 No. 70-
60, Barranquilla, Colombia; Carrera 57 No. 79-149, Barranquilla, 
Colombia; NIT  890108115-3 (Colombia) [SDNT]
PROMOCIONES Y CONSTRUCCIONES DEL CARIBE LTDA. Y CIA. S.C.A., (a.k.a. 
PROMOCON), Calle 74 No. 53-30, Barranquilla, Colombia; Calle 78 No. 53-
70 Centro Comercial Villa Country, Barranquilla, Colombia; Carrera 54 
No. 72-80 L-21 Ejecutivo I, Barranquilla, Colombia; Carrera 54 No. 72-
147 L-115, Barranquilla, Colombia; Carrera 55 No. 80-192, Barranquilla, 
Colombia; Carrera 55 No. 80-192 Ap. 6, Barranquilla, Colombia; Apartado 
Aereo 50183, Barranquilla, Colombia; Apartado Aereo 51110, Barranquilla, 
Colombia; NIT  890108148-6 (Colombia) [SDNT]
PROMOTORA ANDINA, S.A., Quito, Ecuador [CUBA]
PROMOTORA HOTEL BARRANQUILLA LTDA., Calle 74 No. 53-30, Barranquilla, 
Colombia; Apartado Aereo 51110, Barranquilla, Colombia; NIT  
890111684-3 (Colombia) [SDNT]
PROYECTOS J.A.M. LTDA., Carrera 53 No. 74-16, Barranquilla, Colombia; 
Carrera 54 No. 72-147, Barranquilla, Colombia; Calle 77 No. 65-37 L-6, 
Barranquilla, Colombia; NIT  800234529-0 (Colombia) [SDNT]
PROYECTOS J.A.M. LTDA. Y CIA. S. EN C., Calle 74 No. 53-23 of. 401, 
Barranquilla, Colombia; Calle 74 No. 53-23 L-503, Barranquilla, 
Colombia; Carrera 53 No. 74-16 of. 401, Barranquilla, Colombia; Carrera 
53 No. 74-16, Barranquilla, Colombia; NIT  800243483-9 
(Colombia) [SDNT]
PUBLIC COMPANY FOR GARMENTS, P.O. Box 4152, Benghazi, Libya [LIBYA]
PUBLIC CORPORATION FOR BUILDING AND CONSTRUCTION, P.O. Box 2110, 
Khartoum, Sudan [SUDAN]
PUBLIC CORPORATION FOR IRRIGATION AND EXCAVATION, P.O. Box 619, 
Khartoum, Sudan; P.O. Box 123, Wad Medani, Sudan [SUDAN]
PUBLIC CORPORATION FOR OIL PRODUCTS AND PIPELINES, Khartoum, Sudan 
[SUDAN]
PUBLIC ELECTRICAL WORKS CO., P.O. Box 32811, Benghazi, Libya; P.O. Box 
8539, Sharia Halab, Tripoli, Libya [LIBYA]
PUBLIC ELECTRICITY AND WATER CORPORATION (a.k.a. CENTRAL ELECTRICITY AND 
WATER CORPORATION), P.O. Box 1380, Khartoum, Sudan [SUDAN]
PUBLIC SAFETY COMMODITY IMPORTING CO. (a.k.a. SILAMNIA), P.O. Box 12942, 
Tripoli, Libya [LIBYA]
QAFALA GENERAL AUTOMOBILE CO., Libya [LIBYA]
QALHARBE DE LEON, Oscar (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, 
Martin; a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, 
Oscar; a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERBE, 
Oscar; a.k.a. MALERHBE DE LEON, Oscar; a.k.a. MALERVA, Oscar; a.k.a. 
MALHARBE DE LEON, Oscar; a.k.a. MALHERBE DE LEON, Oscar; a.k.a. MALHERBE 
DELEON, Oscar; a.k.a. MALMERBE, Oscar; a.k.a. MELARBE, Oscar; a.k.a. 
NALHERBE, Oscar; a.k.a. VARGAS, Jorge); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
QASEM, Talat Fouad, Propaganda Leader of ISLAMIC GAMA'AT (DOB 2 June 
1957 or 3 June 1957, POB Al Mina, Egypt) (individual) [SDT]
THE QOMEMIYUT MOVEMENT (see KACH) [SDT, FTO]

[[Page 990]]

QUALITY SHOES COMPANY, UB33, Industrial Estate, San Gwann, Malta [LIBYA]
QUIGUA ARIAS, Omar, c/o IMCOMER, Cali, Colombia; c/o INCOES, Cali, 
Colombia (individual) [SDNT]
QUIMINTER GMBH, Vienna, Austria [CUBA]
QUINTANA HERNANDEZ, Gonzalo, c/o DISTRIBUIDORA DE DROGAS LA REBAJA 
BOGOTA S.A., Bogota, Colombia; c/o GRACADAL S.A., Cali, Colombia; c/o 
POLIEMPAQUES LTDA., Bogota, Colombia; Cedula No. 16603939 (Colombia) 
(individual) [SDNT]
QUINTERO SALAZAR, Lisimaco, c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia 
(individual) [SDNT]
RABAK OIL MILL, P.O. Box 2105, Khartoum, Sudan [SUDAN]
RABITA TRUST, Room 9A, 2nd Floor, Wahdat Road, Education Town, Lahore, 
Pakistan; Wares Colony, Lahore, Pakistan [SDGT]
RADENKOVIC, Ljiljana, Anglo-Yugoslav Bank London; Antexol Trading Ltd., 
Cyprus (individual) [FRYM]
RADIC, Miroslav, (ICTY indictee, Serb) (DOB 1 Jan 61) (individual) 
[FRYM]
RADIO SERVICE, S.A., Panama [CUBA]
RADIO UNIDAS FM S.A., Calle 15N No. 6N-34 piso 15, Edificio Alcazar, 
Cali, Colombia; Calle 19N No. 2N-29 piso 10 Sur, Cali, Colombia [SDNT]
RADIO UNIDAS FM S.A. (see SONAR F.M. S.A.) [SDNT]
RAFIDAIN BANK, 114 Tahreer Str. Eldukki, P.O.Box 239, Omran Giza, Cairo, 
Egypt [IRAQ]
RAFIDAIN BANK, 2nd Floor Sadat Tower, P.O. Box 1891, Beirut, Lebanon (2 
branches in Lebanon) [IRAQ]
RAFIDAIN BANK, Mafraq, Jordan [IRAQ]
RAFIDAIN BANK, New Banks' Street, P.O. Box 11360, Massarif, Baghdad, 
Iraq (227 branches in Iraq) [IRAQ]
RAFIDAIN BANK, P.O. Box 10023, Sanaa, Yemen Arab Republic [IRAQ]
RAFIDAIN BANK, P.O. Box 1194, Cinema al-Hussein Street, Amman, Jordan 
[IRAQ]
RAFIDAIN BANK, P.O. Box 607, Manama, Bahrain (2 branches in Bahrain) 
[IRAQ]
RAFIDAIN BANK, P.O. Box 685, Aqaba, Jordan [IRAQ]
RAFIDAIN BANK, P.O.Box 815401, Jabal Amman, Jordan [IRAQ]
RAFIDAIN BANK, Rafidain Bank Building, 7-10 Leadenhall Street, London 
EC3V 1NL, England [IRAQ]
RAFIDAIN BANK, Sheikh Khalifa Street, P.O. Box 2727, Abu Dhabi, United 
Arab Emirates [IRAQ]
RAHMAN, Pavle, General Manager for Funds and Liquidity of Beogradska 
Banka (individual) [FRYM]
RAINBOW FACTORIES, P.O. Box 1768, Khartoum, Sudan [SUDAN]
RAJBROOK LIMITED, England [IRAQ]
RAJIC, Ivica, (ICTY indictee, Bosnian Croat) (DOB 5 May 58; POB Johovac) 
(individual) [FRYM]
RAKETIC, Srdjan, Director General of Privredna Banka Pancevo AD 
(individual) [FRYM]
RAMADAN, Taha Yasin (or Yassin), Vice President and Deputy Prime 
Minister, Iraq (DOB 1936) (individual) [IRAQ]
RAMIREZ ABADIA, Juan Carlos, Calle 6A No. 34-65, Cali, Colombia; DOB 16 
February 1963; Passport AD127327 (Colombia); Cedula No. 16684736 
(Colombia) (individual) [SDNT]
RAMIREZ BUITRAGO, Luis Eduardo, c/o INCOES, Cali, Colombia (individual) 
[SDNT]
RAMIREZ BUITRAGO, Placido, c/o COMERCIALIZADORA INTERNACIONAL VALLE DE 
ORO S.A., Cali, Colombia (individual) [SDNT]
RAMIREZ CORTES, Delia Nhora (Nora), c/o ADMINISTRACION INMOBILIARIA 
BOLIVAR S.A., Cali, Colombia; c/o AGROPECUARIA Y REFORESTADORA HERREBE 
LTDA., Cali, Colombia; c/o COMPAN[tilde]IA ADMINISTRADORA DE VIVIENDA 
S.A., Cali, Colombia; c/o CONSTRUCTORA ALTOS DEL RETIRO LTDA., Bogota, 
Colombia; c/o CONSTRUEXITO S.A., Cali, Colombia; c/o INDUSTRIA AVICOLA 
PALMASECA S.A., Cali, Colombia; c/o INMOBILIARIA BOLIVAR LTDA., Cali, 
Colombia; c/o INVERSIONES GEMINIS S.A., Cali, Colombia; c/o INVERSIONES 
HERREBE LTDA., Cali, Colombia; c/o INVERSIONES INVERVALLE S.A., Cali, 
Colombia; c/o SOCOVALLE LTDA., Cali, Colombia; c/o VIAJES MERCURIO 
LTDA., Cali, Colombia; DOB 20 January 1959; Cedula No. 38943729 
(Colombia) (individual) [SDNT]
RAMIREZ de CASTAN[tilde]EDA, Maria, c/o PENTA PHARMA DE COLOMBIA S.A., 
Bogota, Colombia; c/o PENTACOOP LTDA., Bogota, Colombia (Cedula No. 
31226330 (Colombia)) (individual) [SDNT]
RAMIREZ ESCUDERO, Pedro Emilio, Calle 6A No. 48-36, Cali, Colombia; c/o 
GALAPAGOS S.A., Cali, Colombia; Cedula No. 16280602 (Colombia) 
(individual) [SDNT]
RAMIREZ, James Alberto, c/o ANDINA DE CONSTRUCCIONES S.A., Cali, 
Colombia; c/o DISMERCOOP, Cali, Colombia; c/o GRACADAL S.A., Cali, 
Colombia; c/o INTERAMERICANA DE CONSTRUCCIONES S.A., Cali, Colombia; c/o 
INVERSIONES MONDRAGON Y CIA. S.C.S., Cali, Colombia; c/o INVERSIONES Y 
CONSTRUCCIONES COSMOVALLE LTDA., Cali, Colombia; c/o SERVICIOS 
FARMACEUTICOS SERVIFAR S.A., Cali, Colombia; Cedula No. 16691796 
(Colombia) (individual) [SDNT]
RAMIREZ, Julio Cesar, c/o RADIO UNIDAS FM S.A., Cali, Colombia (Cedula 
No. 16685808 (Colombia)) (individual) [SDNT]

[[Page 991]]

RAMIREZ, Joise Luis (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, 
Gilberto; a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, 
Joaquin; a.k.a. GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. 
GUZMAN, Aureliano; a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, 
Joaquin; a.k.a. GUZMAN, Joaquin Chapo; a.k.a. GUZMAN LOEIA, Joaguin; 
a.k.a. GUZMAN LOERA, Joaquin; a.k.a. GUZMAN LOESA, Joaquin; a.k.a. 
GUZMAN LOREA, Chapo; a.k.a. GUZMAN PADILLA, Joaquin; a.k.a. ORTEGA, 
Miguel; a.k.a. OSUNA, Gilberto; a.k.a. RAMOX PEREZ, Jorge) DOB 25 Dec 
1954; POB Mexico (individual) [SDNTK]
RAMIREZ LIBREROS, Gladys Miriam, c/o DISTRIBUIDORA DE DROGAS LA REBAJA 
S.A., Bogota, Colombia; c/o LABORATORIOS BLAIMAR DE COLOMBIA S.A., 
Bogota, Colombia; c/o INVERSIONES MOMPAX LTDA., Cali, Colombia (DOB 20 
November 1945; Passport 38974109 (Colombia); Cedula No. 38974109 
(Colombia)) (individual) [SDNT]
RAMIREZ M., Oscar, c/o INVERSIONES ARA LTDA., Cali, Colombia; c/o 
VALORES MOBILIARIOS DE OCCIDENTE S.A., Bogota, Colombia; c/o RIONAP 
COMERCIO Y REPRESENTACIONES S.A., Quito, Ecuador (individual) [SDNT]
RAMIREZ SANCHEZ, Alben, c/o INCOES, Cali, Colombia (individual) [SDNT]
RAMIREZ SUAREZ (SUARES), Luis Carlos, c/o COPSERVIR LTDA., Bogota, 
Colombia; c/o DROGAS LA REBAJA BUCARAMANGA S.A., Bucaramanga, Colombia 
(Cedula No. 19164938 (Colombia)) (individual) [SDNT]
RAMIREZ VALENCIANO, William, c/o ADMINISTRACION INMOBILIARIA BOLIVAR 
S.A., Cali, Colombia; c/o CONCRETOS CALI S.A., Cali, Colombia; c/o 
CONSTRUCTORA DIMISA LTDA., Cali, Colombia; c/o IMCOMER LTDA., Cali, 
Colombia; c/o INVERSIONES BETANIA LTDA., Cali, Colombia; c/o INVERSIONES 
EL PEN[tilde]ON S.A., Cali, Colombia; c/o INVERSIONES GEMINIS S.A., 
Cali, Colombia; Calle 3C No. 72-64 10, Cali, Colombia (Cedula No. 
16694719 (Colombia)) (individual) [SDNT]
RAMON MAGANA, Alcedis (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES 
MAGANE, Ramon; a.k.a. ALCIDES MAYENA, Ramon; a.k.a. ALCIDEZ MAGANA, 
Ramon; a.k.a. GONZALEZ QUIONES, Jorge; a.k.a. MAGANA ALCIDES, Ramon; 
a.k.a. MAGANA, Jorge; a.k.a. MAGNA ALCIDEDES, Ramon; a.k.a. MATA, 
Alcides; a.k.a. RAMON MAGANA, Alcides; a.k.a. ROMERO, Antonio); DOB 4 
Sep 1957 (individual) [SDNTK]
RAMON MAGANA, Alcides (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES 
MAGANE, Ramon; a.k.a. ALCIDES MAYENA, Ramon; a.k.a. ALCIDEZ MAGANA, 
Ramon; a.k.a. GONZALEZ QUIONES, Jorge; a.k.a. MAGANA ALCIDES, Ramon; 
a.k.a. MAGANA, Jorge; a.k.a. MAGNA ALCIDEDES, Ramon; a.k.a. MATA, 
Alcides; a.k.a. RAMON MAGANA, Alcedis; a.k.a. ROMERO, Antonio); DOB 4 
Sep 1957 (individual) [SDNTK]
RAMOS BONILLA, Blanca Clemencia, c/o COSMEPOP, Bogota, Colombia; c/o 
LABORATORIOS BLAIMAR DE COLOMBIA S.A., Bogota, Colombia (Cedula No. 
41767311 (Colombia)) (individual) [SDNT]
RAMOS GARBIRAS, Gerardo Alfonso, Carrera 29 No. 9-64, Cali, Colombia; c/
o DISTRIBUIDORA AGROPECUARIA COLOMBIANA S.A., Cali, Colombia; c/o 
INVERSIONES BOMBAY S.A., Bogota, Colombia; Cedula No. 6457125 (Colombia) 
(individual) [SDNT]
RAMOS RAYO, Heriberto, c/o INVERSIONES VILLA PAZ S.A., Cali, Colombia 
(Cedula No. 6186403 (Colombia)) (individual) [SDNT]
RAMOX PEREZ, Jorge (a.k.a. AREGON, Max; a.k.a. CARO RODRIGUEZ, Gilberto; 
a.k.a. GUIERREZ LOERA, Jose Luis; a.k.a. GUMAN LOERAL, Joaquin; a.k.a. 
GUZMAN, Achivaldo; a.k.a. GUZMAN, Archibaldo; a.k.a. GUZMAN, Aureliano; 
a.k.a. GUZMAN, Chapo; a.k.a. GUZMAN FERNANDEZ, Joaquin; a.k.a. GUZMAN, 
Joaquin Chapo; a.k.a. GUZMAN LOEIA, Joaguin; a.k.a. GUZMAN LOERA, 
Joaquin; a.k.a. GUZMAN LOESA, Joaquin; a.k.a. GUZMAN LOREA, Chapo; 
a.k.a. GUZMAN PADILLA, Joaquin; a.k.a. ORTEGA, Miguel; a.k.a. OSUNA, 
Gilberto; a.k.a. RAMIREZ, Joise Luis) DOB 25 Dec 1954; POB Mexico 
(individual) [SDNTK]
RAOUF, Khalid Mohammed, Praca Pio X, 54-10o Andar, CEP 20091, Rio de 
Janeiro, Brazil (individual) [IRAQ]
RAS HILAL MARITIME CO., P.O. Box 1496, Benghazi, Libya [LIBYA]
RAS LANUF OIL AND GAS PROCESSING COMPANY, LTD. (a.k.a. RASCO), Benghazi 
Complex, P.O. Box 1971, Gamel Abdul Nasser Street, Benghazi, Libya 
[LIBYA]
RAS LANUF OIL AND GAS PROCESSING COMPANY, LTD. (a.k.a. RASCO), P.O. Box 
75071, Tripoli, Libya [LIBYA]
RAS LANUF OIL AND GAS PROCESSING COMPANY, LTD. (a.k.a. RASCO), Ras Lanuf 
Complex and Terminal, Ghout El Shaal, Libya [LIBYA]
RASHEED BANK (a.k.a. AL-RASHEED BANK; a.k.a. AL-RASHID BANK), P.O. Box 
7177, Haifa Street, Baghdad, Iraq [IRAQ] including but not limited to: 
Al-Rusafi Branch, No. 505, Al-Masarif Street, Baghdad, Iraq [IRAQ] 
Basrah Branch, Al Thawrah Street, No. 88, P.O. Box 116, Basrah, Iraq 
[IRAQ] Credit Commercial Branch, No. 506, Khalid bin Alwaleed Street, 
Baghdad, Iraq [IRAQ] Mosul Branch, No. 3, P.O. Box 183, Mosul, Iraq 
[IRAQ]

[[Page 992]]

REA SWEET FACTORY, P.O. Box 1027, Khartoum, Sudan [SUDAN]
READY-MADE SUITS PLANT, Derna, Libya [LIBYA]
REAL ESTATE BANK, Hassan Bin Thabit St, Baghdad, Iraq [IRAQ]
REAL IRA (a.k.a. 32 COUNTY SOVEREIGNTY COMMITTEE; a.k.a. 32 COUNTY 
SOVEREIGNTY MOVEMENT; a.k.a. IRISH REPUBLICAN PRISONERS WELFARE 
ASSOCIATION; a.k.a. REAL IRISH REPUBLICAN ARMY; a.k.a. REAL OGLAIGH NA 
HEIREANN; a.k.a. RIRA) [FTO]
REAL IRISH REPUBLICAN ARMY (a.k.a. 32 COUNTY SOVEREIGNTY COMMITTEE; 
a.k.a. 32 COUNTY SOVEREIGNTY MOVEMENT; a.k.a. IRISH REPUBLICAN PRISONERS 
WELFARE ASSOCIATION; a.k.a. REAL IRA; a.k.a. REAL OGLAIGH NA HEIREANN; 
a.k.a. RIRA) [FTO]
REAL OGLAIGH NA HEIREANN (a.k.a. 32 COUNTY SOVEREIGNTY COMMITTEE; a.k.a. 
32 COUNTY SOVEREIGNTY MOVEMENT; a.k.a. IRISH REPUBLICAN PRISONERS 
WELFARE ASSOCIATION; a.k.a. REAL IRA; a.k.a. REAL IRISH REPUBLICAN ARMY; 
a.k.a. RIRA) [FTO]
RECICLAJE INDUSTRIAL, S.A., Panama [CUBA]
RECITEC LTDA., Calle 16 No. 12-49, Cali, Colombia; NIT 
800037780-9 (Colombia) [SDNT]
RECONSTRUYE LTDA. (see REPARACIONES Y CONSTRUCCIONES LTDA.) [SDNT]
RED EAGLE GANG (see POPULAR FRONT FOR THE LIBERATION OF PALESTINE) [SDT, 
FTO]
RED EAGLE GROUP (see POPULAR FRONT FOR THE LIBERATION OF PALESTINE) 
[SDT, FTO]
RED EAGLES (see POPULAR FRONT FOR THE LIBERATION OF PALESTINE) [SDT, 
FTO]
RED SEA HILLS MINERALS COMPANY, c/o SUDANESE MINING CORPORATION, P.O. 
Box 1034, Khartoum, Sudan [SUDAN]
RED SEA STEVEDORING, P.O. Box 215, Khartoum, Sudan; P.O. Box 17, Port 
Sudan, Sudan [SUDAN]
RED STAR BATTALIONS (see DEMOCRATIC FRONT FOR THE LIBERATION OF 
PALESTINE--HAWATMEH FACTION) [SDT]
RED STAR FORCES (see DEMOCRATIC FRONT FOR THE LIBERATION OF PALESTINE--
HAWATMEH FACTION) [SDT]
REDESTOS SHIPPING CO. LTD., c/o EMPRESA DE NAVEGACION MAMBISA, Apartado 
543, San Ignacio 104, Havana, Cuba [CUBA]
REFRIGERATION AND ENGINEERING IMPORT COMPANY, P.O. Box 1092, Khartoum, 
Sudan [SUDAN]
RENDON, Maria Fernanda, c/o DISMERCOOP, Cali, Colombia (Cedula No. 
38864017 (Colombia)) (individual) [SDNT]
RENT-A-CAR, S.A., Panama [CUBA]
REPARACIONES Y CONSTRUCCIONES LTDA. (a.k.a. RECONSTRUYE LTDA.), Avenida 
6N No. 23DN-16 of. 402, Cali, Colombia; NIT  800053838-4 
(Colombia) [SDNT]
REPRESSION OF TRAITORS (see KACH) [SDT, FTO]
RESTREPO HERNANDEZ, Ruben Dario, c/o DISMERCOOP, Cali, Colombia (Cedula 
No. 10094108 (Colombia)) (individual) [SDNT]
RESTREPO VILLEGAS, Camilio, Calle 116 No. 12-49, Bogota, Colombia; c/o 
FLEXOEMPAQUES LTDA., Cali, Colombia; c/o PLASTICOS CONDOR LTDA., Cali, 
Colombia (Cedula No. 6051150 (Colombia)) (individual) [SDNT]
REVISTA DEL AMERICA LTDA., Calle 23AN No. 5AN-19, Cali, Colombia [SDNT]
REVOLUTIONARY ARMED FORCES OF COLOMBIA (a.k.a. FARC; a.k.a. FUERZAS 
ARMADAS REVOLUCIONARIAS DE COLOMBIA) [FTO]
REVOLUTIONARY CELLS (see REVOLUTIONARY PEOPLE'S STRUGGLE) [FTO]
REVOLUTIONARY JUSTICE ORGANIZATION (see HIZBALLAH) [SDT, FTO]
REVOLUTIONARY LEFT (see REVOLUTIONARY PEOPLE'S LIBERATION PARTY/FRONT) 
[FTO]
REVOLUTIONARY NUCLEI (see REVOLUTIONARY PEOPLE'S STRUGGLE) [FTO]
REVOLUTIONARY ORGANIZATION 17 NOVEMBER (a.k.a. 17 NOVEMBER; a.k.a. 
EPANASTATIKI ORGANOSI 17 NOEMVRI) [FTO]
REVOLUTIONARY ORGANIZATION OF SOCIALIST MUSLIMS (see ABU NIDAL 
ORGANIZATION) [SDT, FTO]
REVOLUTIONARY PEOPLE'S LIBERATION PARTY/FRONT (a.k.a. DEVRIMCI HALK 
KURTULUS PARTISI-CEPHESI; a.k.a. DHKP/C; a.k.a. DEVRIMCI SOL; a.k.a. 
REVOLUTIONARY LEFT; a.k.a. DEV SOL; a.k.a. DEV SOL SILAHLI DEVRIMCI 
BIRLIKLERI; a.k.a. DEV SOL SDB; a.k.a. DEV SOL ARMED REVOLUTIONARY 
UNITS) [FTO]
REVOLUTIONARY PEOPLE'S STRUGGLE (a.k.a. EPANASTATIKOS LAIKOS AGONAS; 
a.k.a. ELA; a.k.a. REVOLUTIONARY POPULAR STRUGGLE; a.k.a. POPULAR 
REVOLUTIONARY STRUGGLE; a.k.a. JUNE 78; a.k.a. ORGANIZATION OF 
REVOLUTIONARY INTERNATIONALIST SOLIDARITY; a.k.a. REVOLUTIONARY NUCLEI; 
a.k.a. REVOLUTIONARY CELLS; a.k.a. LIBERATION STRUGGLE) [FTO]
REVOLUTIONARY POPULAR STRUGGLE (see REVOLUTIONARY PEOPLE'S STRUGGLE) 
[FTO]

[[Page 993]]

REYES MURCIA, Edgar, c/o CONSTRUVIDA S.A., Cali, Colombia (Cedula No. 
17181081 (Colombia)) (individual) [SDNT]
REYES, Guillermo (VERGARA), Panama City, Panama (individual) [CUBA]
REYNOLDS AND WILSON, LTD., 21 Victoria Road, Surbiton, Surrey KT6 4LK, 
England [IRAQ]
RICKS, Roy, 87 St. Mary's Frice, Benfleet, Essex, England (individual) 
[IRAQ]
RICUARTE FLOREZ, Gilma Leonor, c/o LABORATORIOS GENERICOS VETERINARIOS, 
Bogota, Colombia (Cedula No. 51640309 (Colombia)) (individual) [SDNT]
RIECKE, Dr. Hans Guenter, Hamburg, Germany (individual) [LIBYA]
RIONAP COMERCIO Y REPRESENTACIONES S.A., Quito, Ecuador [SDNT]
RIRA (a.k.a. 32 COUNTY SOVEREIGNTY COMMITTEE; a.k.a. 32 COUNTY 
SOVEREIGNTY MOVEMENT; a.k.a. IRISH REPUBLICAN PRISONERS WELFARE 
ASSOCIATION; a.k.a. REAL IRA; a.k.a. REAL IRISH REPUBLICAN ARMY; a.k.a. 
REAL OGLAIGH NA HEIREANN) [FTO]
RISTIC, Ljubisa, President of JUL (DOB 8 Feb 47) (individual) [FRYM]
RISTIC, Milorad, Director General of Niska Banka AD (individual) [FRYM]
RIVEROS TRIANA, Raul, c/o COMEDICAMENTOS S.A., Bogota, Colombia; c/o 
DECAFARMA S.A., Bogota, Colombia; c/o FARMACOOP, Bogota, Colombia; c/o 
PATENTES MARCAS Y REGISTROS S.A., Bogota, Colombia; c/o SHARPER S.A., 
Bogota, Colombia; Cedula No. 3252672 (Colombia) (individual) [SDNT]
RIZO MORENO, Jorge Luis, Transversal 11, Diagonal 23-30, apt. 304A, 
Cali, Colombia; c/o CONSTRUCTORA DIMISA LTDA., Cali, Colombia; c/o 
CONSTRUVIDA S.A., Cali, Colombia; c/o IMPORTADORA Y COMERCIALIZADORA 
LTDA., Cali, Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, 
Colombia; c/o INTERVENTORIA, CONSULTORIA Y ESTUDIOS LIMITADA INGENIEROS 
ARQUITECTOS, Cali, Colombia; c/o INVERSIONES EL PEN[tilde]ON S.A., Cali, 
Colombia; c/o PROCESADORA DE POLLOS SUPERIOR S.A., Palmira, Colombia; c/
o SERVIAUTOS UNO A 1A LIMITADA, Cali, Colombia; c/o SERVICIOS 
INMOBILIARIOS LTDA., Cali, Colombia; Cedula No. 16646582 (Colombia) 
(individual) [SDNT]
ROADS AND BRIDGES PUBLIC CORPORATION, P.O. Box 756, Khartoum, Sudan 
[SUDAN]
ROCHA, Antonio, Panama City, Panama (individual) [CUBA]
RODAS, Luis Alberto, c/o COMERCIALIZACION Y FINANCIACION DE AUTOMOTORES 
S.A., Cali, Colombia; c/o CONSTRUCCIONES ASTRO S.A., Cali, Colombia; 
Cedula No. 16630332 (Colombia) (individual) [SDNT]
RODIC, Milan, Member of JUL Directorate; CEO Serbian Lumber Monopoly 
(DOB 11 Dec 48) (individual) [FRYM]
RODRIGUEZ ARBELAEZ, Maria Fernanda, c/o CREDIREBAJA S.A., Cali, 
Colombia; c/o D'CACHE S.A., Cali, Colombia; c/o DEPOSITO POPULAR DE 
DROGAS S.A., Cali, Colombia; c/o DISTRIBUIDORA DE DROGAS LA REBAJA S.A., 
Bogota, Colombia; c/o DROGAS LA REBAJA BOGOTA S.A., Bogota, Colombia; c/
o INTERAMERICANA DE CONSTRUCCIONES S.A., Cali, Colombia; c/o INVERSIONES 
ARA LTDA., Cali, Colombia; c/o PRODUCCIONES CARNAVAL DEL NORTE Y 
COMPANIA LIMITADA, Cali, Colombia; c/o RIONAP COMERCIO Y 
REPRESENTACIONES S.A., Quito, Ecuador; c/o VALORES MOBILIARIOS DE 
OCCIDENTE S.A., Cali, Colombia; DOB 28 November 1973; Alt. DOB 28 August 
1973; Passport AC568974 (Colombia); Cedula No. 66860965 (Colombia) 
(individual) [SDNT]
RODRIGUEZ ARBELAEZ, Carolina, c/o INVERSIONES ARA LTDA., Cali, Colombia; 
c/o PRODUCCIONES CARNAVAL DEL NORTE Y COMPANIA LIMITADA, Cali, Colombia; 
DOB 17 May 1979; Cedula No. 29117505 (Colombia) (individual) [SDNT]
RODRIGUEZ ARBELAEZ, Juan Miguel, Avenida del Lago Calle Cocli Casa 19 
Ciudad Jardin, Cali, Colombia; c/o CREDIREBAJA S.A., Cali, Colombia; c/o 
INVERSIONES ARA LTDA., Cali, Colombia; c/o INVERSIONES RODRIGUEZ 
ARBELAEZ Y CIA. S.C.S., Cali, Colombia; c/o M. RODRIGUEZ O. Y CIA. 
S.C.S., Cali, Colombia; c/o VALORES MOBILIARIOS DE OCCIDENTE S.A., Cali, 
Colombia; Cedula No. 94491333 (Colombia) (individual) [SDNT]
RODRIGUEZ ARBELAEZ, Maria Fernanda, c/o CREDIREBAJA S.A., Cali, 
Colombia; c/o D'CACHE S.A., Cali, Colombia; c/o DEPOSITO POPULAR DE 
DROGAS S.A., Cali, Colombia; c/o DISTRIBUIDORA DE DROGAS LA REBAJA S.A., 
Bogota, Colombia; c/o DROGAS LA REBAJA BOGOTA S.A., Bogota, Colombia; c/
o INTERAMERICANA DE CONSTRUCCIONES S.A., Cali, Colombia; c/o INVERSIONES 
ARA LTDA., Cali, Colombia; c/o PRODUCCIONES CARNAVAL DEL NORTE Y 
COMPANIA LIMITADA, Cali, Colombia; c/o RIONAP COMERCIO Y 
REPRESENTACIONES S.A., Quito, Ecuador; c/o VALORES MOBILIARIOS DE 
OCCIDENTE S.A., Cali, Colombia; DOB 28 November 1973; Alt. DOB 28 August 
1973; Passport AC568974 (Colombia); Cedula No. 66860965 (Colombia) 
(individual) [SDNT]
RODRIGUEZ DE MUN[tilde]OZ, Haydee (see RODRIGUEZ DE ROJAS, Haydee) 
(individual) [SDNT]

[[Page 994]]

RODRIGUEZ DE ROJAS, Haydee, (a.k.a. RODRIGUEZ DE MUN[tilde]OZ, Haydee; 
a.k.a. RODRIGUEZ OREJUELA, Haydee), c/o BLANCO PHARMA S.A., Bogota, 
Colombia; c/o CORPORACION DEPORTIVA AMERICA, Cali, Colombia; c/o 
CREACIONES DEPORTIVAS WILLINGTON LTDA., Cali, Colombia; c/o 
DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, Colombia; c/o 
DISTRIBUIDORA MIGIL LTDA., Cali, Colombia; c/o HAYDEE DE MUN[tilde]OZ Y 
CIA. S. EN C., Cali, Colombia; c/o RADIO UNIDAS FM S.A., Cali, Colombia; 
c/o SORAYA Y HAYDEE LTDA., Cali, Colombia; DOB 22 September 1940; Cedula 
No. 38953333 (Colombia) (individual) [SDNT]
RODRIGUEZ LOPEZ, Sergio (see AMEZCUA CONTRERAS, Luis Ignacio) 
(individual) [SDNTK]
RODRIGUEZ MONDRAGON, Alexandra (see RODRIGUEZ MONDRAGON, Maria 
Alexandra) (individual) [SDNT]
RODRIGUEZ MONDRAGON, Humberto, c/o ANDINA DE CONSTRUCCIONES S.A., Cali, 
Colombia; c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o CLAUDIA PILAR 
RODRIGUEZ Y CIA. S.C.S., Bogota, Colombia; c/o CREDIREBAJA S.A., Cali, 
Colombia; c/o D'CACHE S.A., Cali, Colombia; c/o DEPOSITO POPULAR DE 
DROGAS S.A., Cali, Colombia; c/o DISTRIBUIDORA DE DROGAS CONDOR LTDA., 
Bogota, Colombia; c/o DISTRIBUIDORA DE DROGAS LA REBAJA S.A., Bogota, 
Colombia; c/o DISTRIBUIDORA MIGIL LTDA., Cali, Colombia; c/o FARAMATODO 
S.A., Bogota, Colombia; c/o GRACADAL S.A., Cali, Colombia; c/o 
INDUSTRIAL DE GESTION DE NEGOCIOS E.U., Cali, Colombia; c/o 
INTERAMERICANA DE CONSTRUCCIONES S.A., Cali, Colombia; c/o INVERSIONES 
MONDRAGON Y CIA. S.C.S., Cali, Colombia; c/o LABORATORIOS BLAIMAR DE 
COLOMBIA S.A., Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA 
S.A., Bogota, Colombia; c/o MARIELA DE RODRIGUEZ Y CIA. S. EN C., Cali, 
Colombia; c/o MAXITIENDAS TODO EN UNO, Cali, Colombia; c/o PENTA PHARMA 
DE COLOMBIA S.A., Bogota, Colombia; c/o RADIO UNIDAS FM S.A., Cali, 
Colombia; c/o RIONAP COMERCIO Y REPRESENTACIONES S.A., Quito, Ecuador; 
DOB 21 June 1963; Passport AD387757 (Colombia); Cedula No. 16688683 
(Colombia) (individual) [SDNT]
RODRIGUEZ MONDRAGON, Jaime, c/o BLANCO PHARMA S.A., Bogota, Colombia; c/
o CORPORACION DEPORTIVA AMERICA, Cali, Colombia; c/o CREDIREBAJA S.A., 
Cali, Colombia; c/o D'CACHE S.A., Cali, Colombia; c/o DEPOSITO POPULAR 
DE DROGAS S.A., Cali, Colombia; c/o DISTRIBUIDORA DE DROGAS CONDOR 
LTDA., Bogota, Colombia; c/o DISTRIBUIDORA DE DROGAS LA REBAJA S.A., 
Bogota, Colombia; c/o DISTRIBUIDORA MIGIL LTDA., Cali, Colombia; c/o 
FARMATODO S.A., Bogota, Colombia; c/o FLEXOEMPAQUES LTDA., Cali, 
Colombia; c/o GRACADAL S.A., Cali, Colombia; c/o INVERSIONES MONDRAGON Y 
CIA. S.C.S., Cali, Colombia; c/o LABORATORIOS BLAIMAR DE COLOMBIA S.A., 
Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, 
Colombia; c/o MARIELA DE RODRIGUEZ Y CIA. S. EN C., Cali, Colombia; c/o 
PENTA PHARMA DE COLOMBIA S.A., Bogota, Colombia; c/o PLASTICOS CONDOR 
LTDA., Cali, Colombia; c/o RIONAP COMERCIO Y REPRESENTACIONES S.A., 
Quito, Ecuador; DOB 30 March 1960; Passport AE426347 (Colombia); Cedula 
No. 16637592 (Colombia) (individual) [SDNT]
RODRIGUEZ MONDRAGON, Maria Alexandra, (a.k.a. RODRIGUEZMONDRAGON, 
Alexandra), c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o CORPORACION 
DEPORTIVA AMERICA, Cali, Colombia; c/o CREDIREBAJA S.A., Cali, Colombia; 
c/o D'CACHE S.A., Cali, Colombia; c/o DEPOSITO POPULAR DE DROGAS S.A., 
Cali, Colombia; c/o DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, 
Colombia; c/o DISTRIBUIDORA DE DROGAS LA REBAJA S.A., Bogota, Colombia; 
c/o DISTRIBUIDORA MIGIL LTDA., Cali, Colombia; c/o GRACADAL S.A., Cali, 
Colombia; c/o INTERAMERICANA DE CONSTRUCCIONES S.A., Cali, Colombia; c/o 
INVERSIONES MONDRAGON Y CIA. S.C.S., Cali, Colombia; c/o LABORATORIOS 
BLAIMAR DE COLOMBIA S.A., Bogota, Colombia; c/o MARIELA DE RODRIGUEZ Y 
CIA. S. EN C., Cali, Colombia; c/o MARIELA MONDRAGON DE R. Y CIA. S. EN 
C., Cali, Colombia; c/o PENTA PHARMA DE COLOMBIA S.A., Bogota, Colombia; 
c/o TOBOGON, Cali, Colombia; DOB 30 May 1969; alt. DOB 5 May 1969; 
Passport AD359106 (Colombia); Cedula No. 66810048 (Colombia) 
(individual) [SDNT]
RODRIGUEZ MORENO, Juan Pablo, Carrera 65 647, Cali, Colombia; c/o 
INVERSIONES RODRIGUEZ MORENO, Cali, Colombia (DOB 30 July 1980) 
(individual) [SDNT]
RODRIGUEZ MORENO, Miguel Andres, Carrera 65 No. 6-47, Cali, Colombia; 
Carrera 66 No. 6-47, Cali, Colombia; c/o INVERSIONES RODRIGUEZ MORENO, 
Cali, Colombia (DOB 14 July 1977; Passport No. AD253939 (Colombia); 
Cedula No. 94328841 (Colombia) (individual) [SDNT]
RODRIGUEZ OREJUELA DE GIL, Amparo, c/o BLANCO PHARMA S.A., Bogota, 
Colombia; c/o CORPORACION DEPORTIVA AMERICA, Cali, Colombia; c/o 
CREACIONES DEPORTIVAS

[[Page 995]]

WILLINGTON LTDA., Cali, Colombia; c/o D'CACHE S.A., Cali, Colombia; c/o 
DEPOSITO POPULAR DE DROGAS S.A., Cali, Colombia; c/o DISTRIBUIDORA DE 
DROGAS CONDOR LTDA., Bogota, Colombia; c/o DISTRIBUIDORA MIGIL LTDA., 
Cali, Colombia; c/o LABORATORIOS BLAIMAR DE COLOMBIA S.A., Bogota, 
Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia; 
c/o RADIO UNIDAS FM S.A., Cali, Colombia; DOB 13 March 1949; Passport 
AC342062 (Colombia); Cedula No. 31218703 (Colombia) (individual) [SDNT]
RODRIGUEZ OREJUELA, Gilberto, (a.k.a. ``The Chess Player''; a.k.a. 
``Lucas''), Cali, Colombia (DOB 31 January 1939; Passports T321642 
(Colombia), 77588 (Argentina), 10545599 (Venezuela); Cedula No. 6068015 
(Colombia)) (individual) [SDNT]
RODRIGUEZ OREJUELA, Haydee (see RODRIGUEZ DE ROJAS, Haydee) (individual) 
[SDNT]
RODRIGUEZ OREJUELA, Miguel Angel, (a.k.a. ``El Sen[tilde]or''; a.k.a. 
``Patricia''; a.k.a. ``Patricio''; a.k.a. ``Patty''; a.k.a. ``Pat''; 
a.k.a. ``Manuel''; a.k.a ``Manolo''; a.k.a ``Mike''; a.k.a. ``Mauro''; 
a.k.a. ``Doctor M.R.O.''), Casa No. 19, Avenida Lago, Ciudad Jardin, 
Cali, Colombia (DOB 23 November 1943; alt. DOB 15 August 1943; Cedula 
No. 6095803 (Colombia)) (individual) [SDNT]
RODRIGUEZ RAMIREZ, Claudia Pilar (Patricia), c/o CLAUDIA PILAR RODRIGUEZ 
Y CIA. S.C.S., Bogota, Colombia; c/o CREDIREBAJA S.A., Cali, Colombia; 
c/o D'CACHE S.A., Cali, Colombia; c/o DEPOSITO POPULAR DE DROGAS S.A., 
Cali, Colombia; c/o DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, 
Colombia; c/o DISTRIBUIDORA DE DROGAS LA REBAJA S.A., Bogota, Colombia; 
c/o DISTRIBUIDORA MIGIL LTDA., Cali, Colombia; c/o FARMATODO S.A., 
Bogota, Colombia; c/o GRACADAL S.A., Cali, Colombia; c/o INTERAMERICANA 
DE CONSTRUCCIONES S.A., Cali, Colombia; c/o LABORATORIOS BLAIMAR DE 
COLOMBIA S.A., Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE COLOMBIA 
S.A., Bogota, Colombia; DOB 30 June 1963; alt. DOB 30 August 1963; alt. 
DOB 1966; Passports 007281 (Colombia), P0555266 (Colombia); Cedula No. 
51741013 (Colombia) (individual) [SDNT]
RODRIGUEZ, Jorge Enrique, c/o DISMERCOOP, Cali, Colombia (Cedula No. 
16202232 (Colombia)) (individual) [SDNT]
RODRIGUEZ, Manuel, c/o ALFA PHARMA S.A., Cali, Colombia; c/o 
LABORATORIOS KRESSFOR, Bogota, Colombia (Cedula No. 17171485 (Colombia)) 
(individual) [SDNT]
RODRIQUEZ, Jesus (BORGES or BORJES), Panama (individual) [CUBA]
RODRIQUEZ, Jose Julio, Chairman, Havana International Bank, 20 
Ironmonger Lane, London EC2V 8EY, England (individual) [CUBA]
ROJAS GALARZA, Carmen Amparo, Carrera 35 No. 10-130, Cali, Colombia; c/o 
CREDIREBAJA S.A., Cali, Colombia; Cedula No. 34511289 (Colombia) 
(individual) [SDNT]
ROJAS MEJIA, Hernan, Calle 2A Oeste No. 24B-45 apt. 503A, Cali, 
Colombia; Calle 6A No. 9N-34, Cali, Colombia; c/o COLOR 89.5 FM STEREO, 
Cali, Colombia; c/o CONSTRUCCIONES COLOMBO-ANDINAS LTDA., Bogota, 
Colombia; c/o INVERSIONES Y CONSTRUCCIONES ABC S.A., Cali, Colombia; c/o 
OCCIDENTAL COMUNICACIONES LTDA., Cali, Colombia; DOB 28 Aug 1948; Cedula 
No. 16242661 (Colombia) (individual) [SDNT]
ROJAS ORTIS, Rosa, c/o ALFA PHARMA S.A., Cali, Colombia (Cedula No. 
26577444 (Colombia)) (individual) [SDNT]
ROMAN DOMINGUEZ, Erika, c/o TAURA S.A., Cali, Colombia; Cedula No. 
66955540 (Colombia) (individual) [SDNT]
ROMEO, Charles (a.k.a. ROMEO, Charles Henri Robert), Panama (individual) 
[CUBA]
ROMEO, Charles Henri Robert (a.k.a. ROMEO, Charles), Panama (individual) 
[CUBA]
ROMERO, Antonio (a.k.a. ALCIDES MAGANA, Ramon; a.k.a. ALCIDES MAGANE, 
Ramon; a.k.a. ALCIDES MAYENA, Ramon; a.k.a. ALCIDEZ MAGANA, Ramon; 
a.k.a. GONZALEZ QUIONES, Jorge; a.k.a. MAGANA ALCIDES, Ramon; a.k.a. 
MAGANA, Jorge; a.k.a. MAGNA ALCIDEDES, Ramon; a.k.a. MATA, Alcides; 
a.k.a. RAMON MAGANA, Alcedis; a.k.a. RAMON MAGANA, Alcides); DOB 4 Sep 
1957 (individual) [SDNTK]
ROPERT, Miria Contreras (a.k.a. CONTRERAS, Miria), Paris, France 
(individual) [CUBA]
ROQUE, Roberto (PEREZ), Panama (individual) [CUBA]
ROSALES DIAZ, Hector Emilio, c/o ADMINISTRACION INMOBILIARIA BOLIVAR 
S.A., Cali, Colombia; c/o COMPAN[tilde]IA ADMINISTRADORA DE VIVIENDA 
S.A., Cali, Colombia; c/o CONCRETOS CALI S.A., Cali, Colombia; c/o 
CONSTRUCTORA DIMISA LTDA., Cali, Colombia; c/o INDUSTRIA AVICOLA 
PALMASECA S.A., Cali, Colombia; c/o INVERSIONES EL PEN[tilde]ON S.A., 
Cali, Colombia; c/o INVERSIONES GEMINIS S.A., Cali, Colombia; c/o 
INVERSIONES VILLA PAZ S.A., Cali, Colombia; c/o MERCAVICOLA LTDA., Cali, 
Colombia; Cedula No. 16588924 (Colombia) (individual) [SDNT]
ROZO C., Miguel, c/o CONSTRUCTORA ALTOS DEL RETIRO LTDA., Bogota, 
Colombia (Cedula No. 17093270 (Colombia)) (individual) [SDNT]

[[Page 996]]

ROZO VARON, Luis Carlos, c/o BLANCO PHARMA S.A., Bogota, Colombia; c/o 
FARMATODO S.A., Bogota, Colombia; c/o LABORATORIOS GENERICOS 
VETERINARIOS, Bogota, Colombia; c/o LABORATORIOS KRESSFOR, Bogota, 
Colombia; Cedula No. 5838525 (Colombia) (individual) [SDNT]
RUEDA FAJARDO, Herberth Gonzalo, c/o FARMACOOP, Bogota, Colombia; c/o 
LABORATORIOS GENERICOS VETERINARIOS, Bogota, Colombia; c/o LABORATORIOS 
KRESSFOR DE COLOMBIA S.A., Bogota, Colombia (Cedula No. 12126395 
(Colombia)) (individual) [SDNT]
RUIZ HERNANDEZ, Gregorio Rafael, c/o COMERCIALIZADORA OROBANCA, Cali, 
Colombia (DOB 20 May 1963; Cedula No. 16823501 (Colombia)) (individual) 
[SDNT]
RUIZ, Ramon Miguel (POO), Panama (individual) [CUBA]
RZOOKI, Hanna, Chairman of REAL ESTATE BANK, Iraq (individual) [IRAQ]
S.M.I. SEWING MACHINES ITALY S.P.A., Italy [IRAQ]
SAAVEDRA RESTREPO, Jesus Maria, Calle 5 No. 46-83 Local 119, Cali, 
Colombia; c/o CONCRETOS CALI S.A., Cali, Colombia; c/o CONSTRUCTORA 
DIMISA LTDA., Cali, Colombia; c/o INMOBILIARIA U.M.V. S.A., Cali, 
Colombia (DOB 10 July 1958; Cedula No. 16603482 (Colombia)) (individual) 
[SDNT]
SABTINA LIMITED, 530-532 Elder House, Elder Gate, Central Milton Keynes 
MK9 1LR, England [LIBYA]
SACKS FACTORY (a.k.a. PLASTIC SACKS FACTORY), P.O. Box 2328, Khartoum, 
Sudan [SUDAN]
SAHABI OIL FIELD PROJECT, P.O. Box 982, Tripoli, Libya [LIBYA]
SAHARA BANK (22 branches in Libya) [LIBYA]
SAHARA BANK, 10 First September Street, P.O. Box 270, Tripoli, Libya 
[LIBYA]
SA-ID (see IZZ-AL-DIN, Hasan) (individual) [SDGT]
SAI'ID, Shaykh (a.k.a. AHMAD, Mustafa Muhammad) (POB Egypt) (individual) 
[SDGT]
SAINOVIC, Nikola, Ex-Deputy Prime Minister, Federal Republic of 
Yugoslavia; (ICTY indictee) (DOB 7 Dec 48; POB Bor, Serbia) (individual) 
[FRYM]
SAIYID, Abd Al-Man'am (see AGHA, Haji Abdul Manan) (individual) [SDGT]
SAKALA, Alcides (see SIMOES, Alcides Sakala) (individual) [UNITA]
SALAFIST GROUP FOR CALL AND COMBAT (a.k.a. GSPC; a.k.a. LE GROUPE 
SALAFISTE POUR LA PREDICATION ET LE COMBAT) [SDGT]
SALAH, Mohammad Abd El-Hamid Khalil (a.k.a. AHMAD, Abu; a.k.a. AHMED, 
Abu; a.k.a. SALAH, Mohammad Abdel Hamid Halil; a.k.a. SALAH, Muhammad 
A.), 9229 South Thomas, Bridgeview, Illinois 60455, U.S.A.; P.O. Box 
2578, Bridgeview, Illinois 60455, U.S.A.; P.O. Box 2616, Bridgeview, 
Illinois 60455-661, U.S.A.; Israel (DOB 5/30/53, SSN 342-52-7612, 
passport no. 024296248 (U.S.A.).) (individual) [SDT]
SALAH, Muhammad (a.k.a. HASANAYN, Nasr Fahmi Nasr) (individual) [SDGT]
SALAZAR, Jose Leonel, c/o COMERCIALIZADORA INTERNACIONAL VALLE DE ORO 
S.A., Cali, Colombia; c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia 
(individual) [SDNT]
SALCEDO RAMIREZ, Jamie, c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia 
(Cedula No. 16706222 (Colombia)) (individual) [SDNT]
SALCEDO RAMIREZ, Nhora Clemencia, c/o ADMINISTRACION INMOBILIARIA 
BOLIVAR S.A., Cali, Colombia; c/o INMOBILIARIA BOLIVAR LTDA., Cali, 
Colombia (Cedula No. 31273613 (Colombia)) (individual) [SDNT]
SALDARRIAGA ACEVEDO, Carlos Omar, Calle 9B No. 50-100 apt. 102, Cali, 
Colombia; c/o RADIO UNIDAS FM S.A., Cali, Colombia (DOB 16 January 1954; 
Cedula No. 14998632 (Colombia)) (individual) [SDNT]
SALEH (see ABDULLAH, Abdullah Ahmed) (individual) [SDGT]
SALEM, Fahid Muhamad Ali (see MSALAM, Fahid Mohammed Ally) (individual) 
[SDGT]
SALIH, Abd al-Munim Ahmad (a.k.a. SALEH, Abdel Moneim Ahmad), Minister 
of Awqaf and Religious Affairs, Iraq (DOB 1943) (individual) [IRAQ]
SALIM, Ahmad Fuad (see AL-ZAWAHIRI, Ayman) (individual) [SDT] [SDGT]
SALIM, Hassan Rostom (see ATWA, Ali) (individual) [SDGT]
SALINA AGUILAR, Jorge (a.k.a. CARDENAS CASTILLO, Osiel; a.k.a. CARDENAS 
GILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Ociel; a.k.a. CARDENAS GUILLEN, 
Oscar; a.k.a. CARDENAS GUILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Oziel; 
a.k.a. CARDENAS GULLEN, Osiel; a.k.a. CARDENAS TUILLEN, Osiel; a.k.a. 
SALINAS AGUILAR, Jorge) DOB 18 May 1967; POB Mexico (individual) [SDNTK]
SALINAS AGUILAR, Jorge (a.k.a. CARDENAS CASTILLO, Osiel; a.k.a. CARDENAS 
GILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Ociel; a.k.a. CARDENAS GUILLEN, 
Oscar; a.k.a. CARDENAS GUILLEN, Osiel; a.k.a. CARDENAS GUILLEN, Oziel; 
a.k.a. CARDENAS GULLEN, Osiel; a.k.a. CARDENAS TUILLEN, Osiel; a.k.a. 
SALINA AGUILAR, Jorge) DOB 18 May 1967; POB Mexico (individual) [SDNTK]
SALWWAN, Samir (see IZZ-AL-DIN, Hasan) (individual) [SDGT]
SAMARIA ARRENDAMIENT, Cali, Colombia [SDNT]
SAMARIA CAN[tilde]AS, Cali, Colombia [SDNT]

[[Page 997]]

SAMARIA INTERESES, Cali, Colombia [SDNT]
SAMARIA LTDA., Cali, Colombia [SDNT]
SAMARIA TIERRAS, Cali, Colombia [SDNT]
SAN MATEO S.A. (f.k.a. INVERSIONES BETANIA LTDA.; f.k.a. INVERSIONES 
BETANIA S.A.), Avenida 2N No. 7N-55 of. 501, Cali, Colombia; Carrera 53 
No. 13-55 apt. 102B, Cali, Colombia; Carrera 3 No. 12-40, Cali, 
Colombia; NIT  890330910-2 (Colombia) [SDNT]
SAN VICENTE S.A. (f.k.a. INVERSIONES INVERVALLE S.A.; f.k.a. INVERVALLE 
S.A.), Avenida 2N No. 7N-55 of. 501, Cali, Colombia; Calle 70N No. 14-
31, Cali, Colombia; Avenida 4 Norte No. 17N-43 L.1, Cali, Colombia; NIT 
 800061212-8 (Colombia) [SDNT]
SANCHEZ DE VALENCIA, Dora Gladys, c/o INMOBILIARIA U.M.V. S.A., Cali, 
Colombia (DOB 7 August 1955; Cedula No. 31273248 (Colombia)) 
(individual) [SDNT]
SANDRANA CAN[tilde]AS, Cali, Colombia [SDNT]
SANTACRUZ CASTRO, Ana Milena, c/o AUREAL INMOBILIARIA LTDA., Bogota, 
Colombia; c/o COMERCIALIZACION Y FINANCIACION DE AUTOMOTORES S.A., Cali, 
Colombia; c/o INMOBILIARIA SAMARIA LTDA., Cali, Colombia; c/o 
INVERSIONES EL PASO LTDA., Cali, Colombia; c/o INVERSIONES INTEGRAL 
LTDA., Cali, Colombia; c/o INVERSIONES SANTA LTDA., Cali, Colombia; c/o 
MIRALUNA LTDA., Cali, Colombia; c/o SAMARIA LTDA., Cali, Colombia; c/o 
SOCIEDAD CONSTRUCTORA LA CASCADA S.A., Cali, Colombia; c/o 
URBANIZACIONES Y CONSTRUCCIONES LTDA. DE CALI, Cali, Colombia; DOB 31 
March 1965; Passports 31929808 (Colombia), AB151189 (Colombia); Cedula 
No. 31929808 (Colombia) (individual) [SDNT]
SANTACRUZ LONDON[tilde]O, Jose, (a.k.a ``Chepe''; a.k.a. ``Don Chepe''; 
a.k.a. ``El Gordo Chepe''; a.k.a. ``07''), Cali, Colombia (DOB 1 October 
1943; Passport AB149814 (Colombia); Cedula No. 14432230 (Colombia)) 
(individual) [SDNT]
SANTAMARINA DE LA TORRE, Rafael Garcia (a.k.a. GARCIA SANTAMARINA DE LA 
TORRE, Alfredo Rafael), Panama (individual) [CUBA]
SANTO, Anabel, Avenida Insurgentes Sur No. 421, Bloque B Despacho 404, 
C.P. 06100, Mexico, D.F., Mexico (individual) [CUBA]
SAPALALO, Altino Bango ``Bock,'' General of UNITA; DOB 5 November 1954; 
POB Andulo, Bie Province, Angola (individual) [UNITA]
SARMIENTO MARTINEZ, Diana, c/o TAURA S.A., Cali, Colombia; Cedula No. 
65698369 (Colombia) (individual) [SDNT]
SARRIA HOLGUIN, Ramiro Hernan (Robert), Avenida 6N No. 23D-16 of. L301, 
Cali, Colombia; Carrera 100 No. 11-60 of. 603, AA 20903, Cali, Colombia; 
c/o INVERSIONES ARA LTDA., Cali, Colombia; c/o INVERSIONES MIGUEL 
RODRIGUEZ E HIJO, Cali, Colombia; c/o INVERSIONES RODRIGUEZ ARBELAEZ, 
Cali, Colombia; c/o INVERSIONES RODRIGUEZ MORENO, Cali, Colombia; c/o 
REPARACIONES Y CONSTRUCCIONES LTDA., Cali, Colombia; c/o VALORES 
MOBILIARIOS DE OCCIDENTE S.A., Cali, Colombia; Cedula No. 6078583 
(Colombia) (individual) [SDNT]
SAUDI, Abdullah Ammar, Manama, Bahrain (individual) [LIBYA]
SAVIMBI, Jonas Malheiro, President and Founder of UNITA; DOB 3 August 
          1934; POB Munhango, Bie Province, Angola (individual) [UNITA]
SAVING AND REAL ESTATE INVESTMENT BANK, P.O. Box 2297, Shoman Street, 
Fashioum, Tripoli, Libya (24 branches in Libya) [LIBYA]
SAZEMAN-E MUJAHEDIN-E KHALQ-E IRAN (see MUJAHEDIN-E KHALQ ORGANIZATION) 
[FTO]
SCHMITT, Rogerio Eduardo, Praca Pio X, 54-10o Andar, CEP 20091, Rio De 
Janeiro, Brazil (individual) [IRAQ]
SEBHA FODDER PLANT, Libya [LIBYA]
SEBHA GRAIN MILL, Libya [LIBYA]
SEBHA ROADS AND CONSTRUCTION CO., P.O. Box 92, Sebha, Libya; P.O. Box 
8264, Tripoli, Libya [LIBYA]
SEKULIC, Zarko, Director-General of Agrobanka AD (individual) [FRYM]
SELIMI, Rexhep, Commander, Guard & Rapid Reaction Group of Kosovo 
Protection Corps (KPC) (DOB: 15 Mar 1971; POB: Iglarevo, FRY) 
(individual) [BALKANS]
SENANQUE SHIPPING CO. LTD., c/o EMPRESA DE NAVEGACION CARIBE, Edificio 
Lonja del Comercio, Lamparilla 2, Caja Postal 1784, Havana 1, Cuba 
[CUBA]
SENDERO LUMINOSO (see SHINING PATH) [FTO]
SEPULVEDA SEPULVEDA, Manuel Salvador, c/o ALKALA ASOCIADOS S.A., Cali, 
Colombia; c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia; c/o INVHERESA 
S.A., Cali, Colombia; Cedula No. 16855038 (Colombia) (individual) [SDNT]
SERNA, Maria Norby, c/o ALKALA ASOCIADOS S.A., Cali, Colombia; c/o 
INVHERESA S.A., Cali, Colombia; Cedula No. 29475049 (Colombia) 
(individual) [SDNT]
SERRANO, Jose Delio, c/o DISMERCOOP, Cali, Colombia (Cedula No. 16711205 
(Colombia)) (individual) [SDNT]
SERVIAUTOS UNO A 1A LIMITADA, (a.k.a. DIAGNOSTICENTRO LA GARANTIA), 
Calle 34 No. 5A-25, Cali, Colombia; Carrera 15 No. 44-68, Cali, 
Colombia; NIT 800032413-8 (Colombia) [SDNT]
SERVICIOS FARMACEUTICOS SERVIFAR S.A. (a.k.a. SERVIFAR S.A.), Carrera 4 
No. 31-96, Cali, Colombia; NIT  805003968-8 (Colombia) [SDNT]

[[Page 998]]

SERVICIOS INMOBILIARIOS LTDA., Carrera 65 No. 13-82, Cali, Colombia; 
Avenida 2N No. 7N-55 of. 605, Cali, Colombia [SDNT]
SERVICIOS SOCIALES LTDA., Barranquilla, Colombia [SDNT]
SERVIFAR S.A. (see SERVICIOS FARMACEUTICOS SERVIFAR S.A.) [SDNT]
SERVIMPEX, S.A., Panama [CUBA]
SERVINAVES, S.A., Panama [CUBA]
SHAKIRI, Hisni, Member of National Liberation Army (NLA) (DOB: 1 Mar 
1949; POB: Otlja, FYROM) (individual) [BALKANS]
SHALLOUF, Farag Al Amin, P.O. Box 9575/11, 1st Floor, Piccadily Centre, 
Hamra Street, Beirut, Lebanon; Vali Conagi Cad. No. 10, 80200 Nisantasi, 
P.O. Box 380, 802323 Sisli, Istanbul, Turkey (individual) [LIBYA]
SHANAB, Tariq Abu, Musherfeh, P.O. Box 766, Zarka, Jordan (individual) 
[IRAQ]
SHANSHAL, Abd al-Jabbar Khalil, Minister of State for Military Affairs, 
Iraq (DOB 1920) (individual) [IRAQ]
SHAQAQI, Fathi, Secretary General of PALESTINIAN ISLAMIC JIHAD-SHIQAQI 
(individual) [SDT]
SHAQIRI, Shaqir, Member of Liberation Army of Presevo, Medvedja, and 
Bujanovac (UCPMB) (DOB: 1 Sep 1964; POB: FRY) (individual) [BALKANS]
SHARIF, Bashir M., Dat El Imad Administrative Complex Tower No. 2, P.O. 
Box 2542, Tripoli, Libya (individual) [LIBYA]
SHARIF, Bashir M., Vali Konagi Cad. No. 10, 80200 Nistantas, Istanbul, 
Turkey (individual) [LIBYA]
SHARPER S.A., Calle 17A No. 28A-43, Bogota, Colombia; Calle 12B No. 28-
58, Bogota, Colombia; Calle 12B No. 28-70, Bogota, Colombia; Calle 16 
No. 28A-42, Bogota, Colombia; Calle 16 No. 28A-57, Bogota, Colombia; NIT 
 830026833-2 (Colombia) [SDNT]
SHELL PETROLEUM DEVELOPMENT CO. OF LIBYA, P.O. Box 1420, Benghazi, Libya 
[LIBYA]
SHEREIK MICA MINES COMPANY (a.k.a. SHEREIK MICA PROJECT), c/o SUDANESE 
MINING CORPORATION, P.O. Box 1034, Khartoum, Sudan [SUDAN]
SHEREIK MICA PROJECT (see SHEREIK MICA MINES COMPANY) [SUDAN]
SHERLALA, Kassem M., P.O. Box 2438, Usama Bldg., 1st September Street, 
Tripoli, Libya (individual) [LIBYA]
SHIEB, Ahmed (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
SHIHATA, Thirwat Salah (a.k.a. ABDALLAH, Tarwat Salah; a.k.a. THIRWAT, 
Salah Shihata; a.k.a. THIRWAT, Shahata) (DOB 29 Jun 60; POB Egypt) 
(individual) [SDGT]
SHINING PATH (a.k.a. SENDERO LUMINOSO; a.k.a. SL; a.k.a. PARTIDO 
COMUNISTA DEL PERU EN EL SENDERO LUMINOSO DE JOSE CARLOS MARIATEGUI 
(COMMUNIST PARTY OF PERU ON THE SHINING PATH OF JOSE CARLOS MARIATEGUI); 
a.k.a. PARTIDO COMUNISTA DEL PERU (COMMUNIST PARTY OF PERU); a.k.a. PCP; 
a.k.a. SOCORRO POPULAR DEL PERU (PEOPLE'S AID OF PERU); a.k.a. SPP; 
a.k.a. EJERCITO GUERRILLERO POPULAR (PEOPLE'S GUERRILLA ARMY); a.k.a. 
EGP; a.k.a. EJERCITO POPULAR DE LIBERACION (PEOPLE'S LIBERATION ARMY); 
a.k.a. EPL) [FTO]
SHIPLEY SHIPPING CORP., Panama [CUBA]
SHOFESO, Olatude I. (see OGUNGBUYI, Oluwole A.) (individual) [SDNTK]
SHOFESO, Olatunde Irewole (see OGUNGBUYI, Oluwole A.) (individual) 
[SDNTK]
SHOFESO, Olatutu Temitope (see OGUNGBUYI, Abeni O.) (individual) [SDNTK]
SHUAIB (see ALI, Ahmed Mohammed Hamed) (individual) [SDGT]
SIALA, Mohamed Taher Hammuda, Tripoli, Libya (individual) [LIBYA]
SIBONEY INTERNACIONAL, S.A., Edificio Balmoral, 82 Via Argentina, Panama 
City, Panama [CUBA]
SIBONEY INTERNACIONAL, S.A., Venezuela [CUBA]
SIEIRO DE NORIEGA, Felicidad, Panama (individual) [CUBA]
SILOS AND STORAGE CORPORATION, P.O. Box 1183, Khartoum, Sudan [SUDAN]
SILVA PERDOMO, Alejandro, c/o COMERCIALIZADORA DE CARNES LTDA., Pereira, 
Colombia; c/o CONSTRUVIDA S.A., Avenida 2N No. 7N-55 y No. 521, Cali, 
Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, Colombia; Cedula 
No. 14983500 (Colombia) (individual) [SDNT]
SIM, Gilberto F., Praca Pio X, 54-10o Andar, CEP 20091, Rio De Janeiro, 
Brazil (individual) [IRAQ]
SIMANOVIC, Vojislav, General Manager of PKB; President of JUL Comm. for 
Agri. (DOB 23 Sep 53) (individual) [FRYM]
SIMIC, Blagoje, (ICTY indictee, Bosnian Serb) (DOB 1 Jul 60; POB 
Kruskovo, Polje) (individual) [FRYM]
SIMOES, Alcides Sakala (a.k.a. SAKALA, Alcides; a.k.a. TCHACALA, 
Alcides), UNITA Foreign Affairs Secretary; DOB 23 December 1953; POB 
Bailundo, Huambo Province, Angola (individual) [UNITA]
SIRM HOLDING S.R.L., Rome, Italy [LIBYA]
SIRTE OIL CO. FOR PRODUCTION MANUFACTURING OIL & GAS MARSA EL BREGA 
(a.k.a. SIRTE OIL COMPANY), Marsa El Brega, Libya [LIBYA]
SIRTE OIL CO. FOR PRODUCTION MANUFACTURING OIL & GAS MARSA EL

[[Page 999]]

BREGA (a.k.a. SIRTE OIL COMPANY), P.O. Box 2582, Tripoli, Libya [LIBYA]
SIRTE OIL CO. FOR PRODUCTION MANUFACTURING OIL & GAS MARSA EL BREGA 
(a.k.a. SIRTE OIL COMPANY), P.O. Box 385, Tripoli, Libya [LIBYA]
SIRTE OIL CO. FOR PRODUCTION MANUFACTURING OIL & GAS MARSA EL BREGA 
(a.k.a. SIRTE OIL COMPANY), Benghazi, Libya [LIBYA]
SIRTE OIL CO. FOR PRODUCTION MANUFACTURING OIL & GAS MARSA EL BREGA 
(a.k.a. SIRTE OIL COMPANY), Sirte Field, Libya [LIBYA]
SL (see SHINING PATH) [FTO]
SLAHI, Mahamedou Ould (see ABU HAFS THE MAURITANIAN) (individual) [SDGT]
SLIJIVANCANIN, Veselin, (ICTY indictee, Serb) (DOB 13 Jun 53) 
(individual) [FRYM]
SOCIALIST EST. FOR SPINNING AND WEAVING, P.O. Box 852, Benghazi, Libya; 
Zanzour Km. 15, P.O. Box 30186, Tripoli, Libya [LIBYA]
SOCIEDAD COMERCIAL Y DEPORTIVA LTDA., Carrera 34 Diag. 29-86 Estadio 
Pascual Guerrero, Cali, Colombia; Carrera 34 Diag. 29-05, Cali, 
Colombia; Carrera 34 Diagonal 29 Estadio, Cali, Colombia; NIT  
800141329-4 (Colombia) [SDNT]
SOCIEDAD CONSTRUCTORA LA CASCADA S.A. (a.k.a. CONSTRUCTORA CASCADA), 
Calle 13 3-32 piso 12 y piso 14, Cali, Colombia; Calle 1A 62A-120, Cali, 
Colombia; Calle 1A 62A-120 2305, Cali, Colombia; Calle 1A 62A-120 2418, 
Cali, Colombia; Calle 1A 62A-120 4114, Cali, Colombia; Calle 1A 62A-120 
6245, Cali, Colombia; Calle 1A 62A-120 B2 108, Cali, Colombia; Carrera 4 
12-41 of. 1401, Cali, Colombia; Carrera 4 No. 12-41 of. 1403, Cali, 
Colombia; Carrera 64 1B-83, Cali, Colombia; Carrera 64 1C-63, Cali, 
Colombia [SDNT]
SOCIEDAD CONSTRUCTORA Y ADMINISTRADORA DEL VALLE LTDA. (a.k.a. SOCOVALLE 
LTDA.), Avenida 2N No. 7N-55 of. 601-602, Cali, Colombia [SDNT]
SOCIETA COMMERCIA MINERALI E METTALLI, SRL (a.k.a. SOCOMET, SPA), Milan, 
Italy [CUBA]
SOCIETE AGRICOLE TOGOLAISE ARABE LIBYENNE, Lome, Togo [LIBYA]
SOCIETE ARABE LIBYENNE-CENTRAFRICAINE D'IMPORT-EXPORT, Bangui, Central 
African Republic [LIBYA]
SOCIETE ARABE LIBYENNE MALIENNE POUR L'AGRICULTURE ET L'ELEVAGE (a.k.a. 
SOLIMA), Bamako, Mali [LIBYA]
SOCIETE ARABE LIBYENNE MAURITANIENNE DES RESSOURCES MARITIMES (a.k.a. 
SALIMAUREM), Nouadhibou, Mauritania [LIBYA]
SOCIETE ARABE LIBYO-GUINEENNE POUR LE DEVELOPPEMENT AGRICOLE ET AGRO-
INDUSTRIEL (a.k.a. SALGUIDIA), Conakry, Guinea [LIBYA]
SOCIETE ARABE LIBYO-NIGERE POUR LE DEVELOPPEMENT ET LA COMMERCIALISATION 
DES PRODUITS AGRICOLES, Niamey, Niger [LIBYA]
SOCIETE ARABE LIBYO-TUNISIENNE DE TRANSPORT MARITIME, Tunis, Tunisia 
[LIBYA]
SOCIETE D'ECONOMIE MIXTE CENTRE AFRICAINE LIBYENNE DES PRODUITS 
AGRICOLES, Bangui, Central African Republic [LIBYA]
SOCIETE DE RECHERCHE ET D'EXPLOITATION COMMUNE ET DE SERVICE PETROLIERE 
(a.k.a. JOINT EXPLORATION, EXPLOITATION AND PETROLEUM SERVICES COMPANY; 
a.k.a. JOINT OIL; a.k.a. JOINT OIL TUNISIA; a.k.a. LIBYAN-TUNISIAN 
EXPLORATION COMPANY), B.P. 350 Houmt Souk 4180, Djerba Island, Tunisia 
[LIBYA]
SOCIETE DE RECHERCHE ET D'EXPLOITATION COMMUNE ET DE SERVICE PETROLIERE 
(a.k.a. JOINT EXPLORATION, EXPLOITATION AND PETROLEUM SERVICES COMPANY; 
a.k.a. JOINT OIL; a.k.a. JOINT OIL TUNISIA; a.k.a. LIBYAN-TUNISIAN 
EXPLORATION COMPANY), Planning & Logistic Group complex, Port of Zarzis, 
Tunisia [LIBYA]
SOCIETE DE RECHERCHE ET D'EXPLOITATION COMMUNE ET DE SERVICE PETROLIERE 
(a.k.a. JOINT EXPLORATION, EXPLOITATION AND PETROLEUM SERVICES COMPANY; 
a.k.a. JOINT OIL; a.k.a. JOINT OIL TUNISIA; a.k.a. LIBYAN-TUNISIAN 
EXPLORATION COMPANY), 7th of November offshore field, Gulf of Gabes 
[LIBYA]
SOCIETE LIBYENNE CENTRE AFRICAINE DES MINES, Bangui, Central African 
Republic [LIBYA]
SOCIETE MAGHREBINE D'INVESTISSEMENT ET DE PARTICIPATION (a.k.a. SMIP), 
47, Avenue Kheireddine Pacha, 1002 Tunis, Tunisia [LIBYA]
SOCIETE MIXTE RWANDO-ARABE LIBYENNE DE PROMOTION HOTELIERE ET 
TOURISTIQUE AU RWANDA, Kigali, Rwanda [LIBYA]
SOCIETE MIXTE RWANDO ARABE LIBYENNE POUR LE DEVELOPPEMENT ET LA 
COMMERCIALISATION DES PRODUTS AGRICOLES ET D'ELEVAGE, Kigali, Rwanda 
[LIBYA]
SOCIETE TOGOLAISE ARABE LIBYENNE DE PECHE, Lome, Togo [LIBYA]
SOCIETY OF ISLAMIC COOPERATION (see JAM'YAH TA'AWUN AL-ISLAMIA) [SDGT]
SOCORRO POPULAR DEL PERU (PEOPLE'S AID OF PERU) (see SHINING PATH) [FTO]
SOKOLOVACKI, Zivko, Member of JUL Directorate; Chairman of the Board, 
Nis (individual) [FRYM]

[[Page 1000]]

SOLAQUE SANCHEZ, Alfredo, c/o ALFA PHARMA S.A., Bogota, Colombia; c/o 
DISTRIBUIDORA DE DROGAS CONDOR LTDA., Bogota, Colombia; c/o LABORATORIOS 
BLAIMAR DE COLOMBIA S.A., Bogota, Colombia; c/o LABORATORIOS KRESSFOR DE 
COLOMBIA S.A., Bogota, Colombia; c/o PENTA PHARMA DE COLOMBIA S.A., 
Bogota, Colombia; c/o PENTACOOP LTDA., Bogota, Colombia (Cedula No. 
79261845 (Colombia)) (individual) [SDNT]
SOMBOON, Kadumporn (see WEI, Hsueh Kang) (individual) [SDNTK]
SONAR F.M. E.U. DIETER MURRLE (a.k.a. FIESTA STEREO 91.5 F.M.; a.k.a. 
PRISMA STEREO 89.5 F.M.), Calle 15 Norte No. 6N-34 of. 1003, Cali, 
Colombia; Calle 43A No. 1-29 Urb. Sta. Maria del Palmar, Palmira, 
Colombia; NIT  805006273-1 (Colombia) [SDNT]
SONAR F.M. S.A. (f.k.a. COLOR STEREO S.A.; f.k.a. COLOR'S S.A.; f.k.a. 
RADIO UNIDAS FM S.A.), Calle 15 Norte No. 6N-34 piso 15 Edificio 
Alcazar, Cali, Colombia; Calle 19N No. 2N-29 piso 10 Sur, Cali, 
Colombia; NIT  800163602-5 (Colombia) [SDNT]
SORAYA Y HAYDEE LTDA., Calle 15 Norte No. 6N-34, Piso 15, Cali, 
Colombia; NIT 805000643-6 (Colombia) [SDNT]
SORMAN FODDER PLANT, Libya [LIBYA]
SOSSA RIOS, Diego Alberto, (a.k.a. SOSA RIOS, Diego Alberto), Calle 46 
No. 13-56 of. 111, Bogota, Colombia; c/o BONOMERCAD S.A., Bogota, 
Colombia; c/o DECAFARMA S.A., Bogota, Colombia; c/o DISTRIBUIDORA 
AGROPECUARIA COLOMBIANA S.A.; c/o FARMACOOP, Bogota, Colombia; c/o 
INVERSIONES BOMBAY S.A., Bogota, Colombia; c/o PENTAPHARMA DE COLOMBIA 
S.A., Bogota, Colombia; c/o SHARPER S.A., Bogota, Colombia; Cedula No. 
71665932 (Colombia) (individual) [SDNT]
SOTO CELIS, Oscar, c/o COPSERVIR LTDA., Bogota, Colombia (Cedula No. 
16546889 (Colombia)) (individual) [SDNT]
SOTO GUTIERREZ, Hernan, c/o INVERSIONES ARIO LTDA, Cali, Colombia 
(individual) [SDNT]
SOUK EL KHAMIS CEMENT CO., Libya [LIBYA]
SOUK EL KHAMIS GENERAL CEMENT AND BUILDING MATERIALS CORP., Tarhuna, 
Sharia Bou Harida, P.O. Box 1084, Tripoli, Libya [LIBYA]
SOUK EL KHAMIS LIME FACTORY, Libya [LIBYA]
SOUSA SHIPPING AND STEVEDORING EST., P.O. Box 2973, Benghazi, Libya 
[LIBYA]
SOUTH ISLAND SHIPPING CO. LTD., c/o EMPRESA DE NAVEGACION MAMBISA, 
Apartado 543, San Ignacio 104, Havana, Cuba [CUBA]
SOUZA, Francisco Antonio, Praca Pio X, 54-10o Andar, CEP 20091, Rio De 
Janeiro, Brazil (individual) [IRAQ]
SPECKMAN, Jeanine, England (individual) [IRAQ]
SPINNING AND WEAVING CORPORATION, P.O. Box 795, Khartoum, Sudan [SUDAN]
SPP (see SHINING PATH) [FTO]
STANDWEAR SHIPPING CO. LTD., c/o EMPRESA DE NAVEGACION MAMBISA, Apartado 
543, San Ignacio 104, Havana, Cuba [CUBA]
STANKOVIC, Radovan, (ICTY indictee, Bosnian Serb) (DOB 10 Mar 69; POB 
Trebica) (individual) [FRYM]
STANKOVIC, Srboljub, Director of NIS Naftagas; Member of JUL Directorate 
(DOB 1940) (individual) [FRYM]
STATE CORPORATION FOR CINEMA, P.O. Box 6028, Khartoum, Sudan [SUDAN]
STATE OF JUDEA (see KACH) [SDT, FTO]
STATE TRADING COMPANY (a.k.a. STATE TRADING CORPORATION), P.O. Box 211, 
Khartoum, Sudan [SUDAN]
STAVROU, Stavros, Cyprus (individual) [LIBYA]
STERN, Alfred Kaufman, Prague, Czech Republic (individual) [CUBA]
STOJILJKOVIC, Vlajko, Ex-Minister of the Interior, Serbia; (ICTY 
indictee) (DOB 1937; POB Mala Krsna, Serbia) (individual) [FRYM]
STUDENTS OF AYYASH (see HAMAS) [SDT, FTO]
STUDENTS OF THE ENGINEER (see HAMAS) [SDT, FTO]
SUANI GYPSUM PLANT, Libya [LIBYA]
SUDAN AIR (a.k.a. SUDAN AIRWAYS), P.O. Box 253, Khartoum, Sudan; 
Bahrain; Chad; Egypt; Ethiopia; Germany; Greece; Italy; Kenya; Kuwait; 
Nigeria; Saudi Arabia; Uganda; United Arab Emirates; England (and 
perhaps elsewhere in the United Kingdom); 211 East 43rd Street, New 
York, New York 10017, U.S.A.; 199 Atlantic Avenue, Brooklyn, New York, 
New York 11201-5606 U.S.A. [SUDAN]
SUDAN COMMERCIAL BANK, P.O. Box 1116, Al-Qasr Avenue, Khartoum, Sudan; 
P.O. Box 182, El Gadaref, Sudan; P.O. Box 412, El Obeid, Sudan; P.O. Box 
1174, Khartoum, Sudan; P.O. Box 570, Port Sudan, Sudan [SUDAN]
SUDAN COTTON COMPANY, Khartoum, Sudan [SUDAN]
SUDAN COTTON COMPANY LIMITED, P.O. Box 1672, Khartoum, Sudan [SUDAN]
SUDAN DEVELOPMENT CORPORATION, Street 21, P.O. Box 710, Khartoum, Sudan 
[SUDAN]
SUDAN EXHIBITION AND FAIRS CORPORATION, P.O. Box 2366, Khartoum, Sudan 
[SUDAN]
SUDAN OIL CORPORATION, P.O. Box 2, Khartoum North, Sudan [SUDAN]
SUDAN OIL SEEDS COMPANY LIMITED, P.O. Box 167, Khartoum, Sudan; Nyala,

[[Page 1001]]

Sudan; Obied, Sudan; Port Sudan, Sudan; Tandalty, Sudan [SUDAN]
SUDAN PETROLEUM COMPANY LIMITED (see SUDAPET LTD.) [SUDAN]
SUDAPET (see SUDAPET LTD.) [SUDAN]
SUDAPET LTD. (a.k.a. SUDAPET, a.k.a. SUDAN PETROLEUM COMPANY LIMITED), 
El Nil Street, Khartoum, Sudan [SUDAN]
SUDAN RAILWAYS CORPORATION (a.k.a. SRC), P.O. Box 43, Bara, Sudan; 
Babanousa, Sudan; Khartoum, Sudan; Kosti, Sudan; Port Sudan, Sudan 
[SUDAN]
SUDAN RURAL DEVELOPMENT COMPANY LIMITED (a.k.a. SRDC), P.O. Box 2190, 
Khartoum, Sudan [SUDAN]
SUDAN SOAP CORPORATION, P.O. Box 23, Khartoum North, Sudan [SUDAN]
SUDAN WAREHOUSING COMPANY, P.O. Box 215, Khartoum, Sudan; P.O. Box 17, 
Port Sudan, Sudan; El Obeid, Sudan; Gedarit, Sudan; Juba, Sudan; Kosti, 
Sudan; Sennar, Sudan; Wad Medani, Sudan [SUDAN]
SUDANESE COMPANY FOR BUILDING AND CONSTRUCTION LIMITED, P.O. Box 2110, 
Khartoum, Sudan [SUDAN]
SUDANESE ESTATES BANK, Al-Baladiya Avenue, P.O. Box 309, Khartoum, Sudan 
[SUDAN]
SUDANESE INTERNATIONAL TOURISM COMPANY, c/o TOURISM AND HOTELS 
CORPORATION, P.O. Box 7104, Khartoum, Sudan [SUDAN]
SUDANESE MINING CORPORATION, P.O. Box 1034, Khartoum, Sudan [SUDAN]
SUDANESE REAL ESTATE SERVICES COMPANY, Khartoum, Sudan [SUDAN]
SUDANESE SAVINGS BANK, P.O. Box 159, Wad Medani, Sudan [SUDAN]
SUGAR AND DISTILLING CORPORATION, New Mustafa el Amin Building, Barlaman 
Avenue, P.O. Box 511, Khartoum, Sudan [SUDAN]
SUMA, Emrush, Member of National Liberation Army (NLA) (DOB: 27 May 
1974; POB: Dimce, FRY) (individual) [BALKANS]
SUPERTIENDAS LA REBAJA, Avenida Colombia No. 2-45, Cali, Colombia; Calle 
9, No. 26-98, Cali, Colombia [SDNT]
SUPLIDORA LATINO AMERICANA, S.A. (a.k.a. SUPLILAT, S.A.), Panama City, 
Panama [CUBA]
SURAMERICANA DE HOTELES LTDA., (a.k.a. SURATEL), Calle 74 No. 53-30, 
Barranquilla, Colombia; NIT  800011603-0 (Colombia) [SDNT]
SUWEIDAN, Sheikh Ahmad Salem (see SWEDAN, Sheikh Ahmed Salim) 
(individual) [SDGT]
SWAN LAUNDRY AND DRY CLEANING COMPANY, LTD., 55, Racecourse Street, 
Marsa, Malta [LIBYA]
SWEDAN, Sheikh (see SWEDAN, Sheikh Ahmed Salim) (individual) [SDGT]
SWEDAN, Sheikh Ahmed Salem (see SWEDAN, Sheikh Ahmed Salim) (individual) 
[SDGT]
SWEDAN, Sheikh Ahmed Salim (a.k.a. SUWEIDAN, Sheikh Ahmad Salem; a.k.a. 
SWEDAN, Sheikh Ahmed Salem; a.k.a. SWEDAN, Sheikh; a.k.a. BAHAMADI, 
Sheikh; a.k.a. ALLY, Ahmed; a.k.a. BAHAMAD; a.k.a. BAHAMAD, Sheik; 
a.k.a. Ahmed the Tall) (DOB 09 Apr 1969; alt. DOB 09 Apr 1960; POB 
Mombasa, Kenya; Citizen Kenya) (individual) [SDGT]
SWORD OF DAVID (see KACH) [SDT, FTO]
SYLA, Azem, Member of Party for Democratic Progress for Kosovo (PDK) 
(DOB: 5 Apr 1951; POB: FRY) (individual) [BALKANS]
T N K FABRICS LIMITED, England [IRAQ]
T.E.G. LIMITED, 3 Mandeville Place, London, England [IRAQ]
T.M.G. ENGINEERING LIMITED, Castle Row, Horticultural Place, Chiswick, 
London, England [IRAQ]
TAHA, Abdul Rahman S. (see YASIN, Abdul Rahman) (individual) [SDGT]
TAHA, Rifa'i Ahmad (see MUSA, Rifa'i Ahmad Taha) [SDT]
TAHA MUSA, Rifa'i Ahmad (see MUSA, Rifa'i Ahmad Taha) [SDT]
TAHARAR FOOTWEAR PLANT, Tripoli, Libya [LIBYA]
TAHER, Abdul Rahman S. (see YASIN Abdul Rahman) (individual) [SDGT]
TAHEER PERFUMERY CORPORATION, (a.k.a. EL TAHEER PERFUMERY CORPORATION), 
P.O. Box 2241, Khartoum, Sudan [SUDAN]
TAHREER PERFUMERY CORPORATION, (a.k.a. EL TAHREER PERFUMERY 
CORPORATION), Omdurman, Sudan [SUDAN]
TAHRIKE ISLAMI'A TALIBAN (see TALIBAN) [TALIBAN]
TAJOURA MODERN TANNERY, Libya [LIBYA]
TAKA AUTOMOBILE COMPANY, EL (a.k.a. EL TAKA AUTOMOBILE COMPANY), P.O. 
Box 221, Khartoum, Sudan [SUDAN]
TAKFIRI, Abu ``Umr (see UTHMAN, Omar Mahmoud) (individual) [SDGT]
TALEBAN (see TALIBAN) [TALIBAN]
TALIBAN (a.k.a. ISLAMIC MOVEMENT OF TALIBAN; a.k.a. TAHRIKE ISLAMI'A 
TALIBAN; a.k.a. TALEBAN; a.k.a TALIBAN ISLAMIC MOVEMENT; a.k.a. TALIBANO 
ISLAMI TAHRIK), Afghanistan [TALIBAN]
TALIBAN ISLAMIC MOVEMENT (see TALIBAN) [TALIBAN]
TALIBANO ISLAMI TAHRIK (see TALIBAN) [TALIBAN]
TALL, Aktham, P.O. Box 1318, Amman, Jordan (individual) [IRAQ]
TALLER DE REPARACIONES NAVALES, S.A. (a.k.a. TARENA, S.A.), Panama City, 
Panama [CUBA]
TAMIL TIGERS (see LIBERATION TIGERS OF TAMIL EELAM) [FTO]

[[Page 1002]]

TAMOIL HUNGARIA, Hungary [LIBYA]
TAMOIL ITALIA S.P.A., Cremona Refinery, Italy [LIBYA]
TAMOIL ITALIA S.P.A., Piazzetta Bossi 3, I-20121 Milan, Italy [LIBYA]
TAMOIL PETROLI ITALIANA S.P.A. (1,977 gasoline retail outlets in Italy) 
[LIBYA]
TAMOIL PETROLI ITALIANA S.P.A., Milan, Italy [LIBYA]
TAMOIL SUISSE S.A. (f.k.a. GATOIL SUISSE S.A.; a.k.a. TAMOIL 
SWITZERLAND) (330 gasoline retail outlets in Switzerland) [LIBYA]
TAMOIL SUISSE S.A. (f.k.a. GATOIL SUISSE S.A.; a.k.a. TAMOIL 
SWITZERLAND) (RSO refinery in Collombey) [LIBYA]
TAMOIL SUISSE S.A. (f.k.a. GATOIL SUISSE S.A.; a.k.a. TAMOIL 
SWITZERLAND), Geneva, Switzerland [LIBYA]
TAMOIL SUISSE S.A. (f.k.a. GATOIL SUISSE S.A.; a.k.a. TAMOIL 
SWITZERLAND), Zug, Switzerland [LIBYA]
TAMOIL TRADING LTD. (f.k.a. TAMOIL [UK] LTD.), 1 St. Paul's Churchyard, 
London EC4M 8SH, England [LIBYA]
TAMOIL TRADING LTD. (f.k.a. TAMOIL [UK] LTD.), 24 Boulevard Princess 
Charlotte, Monte Carlo, Monaco [LIBYA]
TAMOIL TRADING LTD. (f.k.a. TAMOIL [UK] LTD.), 25 Schutzengasse CH 8001, 
Zurich, Switzerland [LIBYA]
TARIQ ABU SHANAB EST. FOR TRADE & COMMERCE (a.k.a. ABU SHANAB METALS 
ESTABLISHMENT; a.k.a. AMIN ABU SHANAB & SONS CO.; a.k.a. SHANAB METALS 
ESTABLISHMENT; a.k.a. TARIQ ABU SHANAB EST.; a.k.a. TARIQ ABU SHANAB 
METALS ESTABLISHMENT), Musherfeh, P.O. Box 766, Zarka, Jordan [IRAQ]
TARIQ (see ABU ZUBAYDAH) (individual) [SDGT]
TAURA S.A., Calle 13 No. 68-06, Of. 204, Cali, Colombia; Calle 13 No. 
68-26, Of. 214, 313 & 314, Cali, Colombia; Carrera 115 No. 16B-121, 
Cali, Colombia; NIT  800183713-1 (Colombia) [SDNT]
TAVEIRA, A. Arnaldo G., Praca Pio X, 54-10o Andar, CEP 20091, Rio De 
Janeiro, Brazil (individual) [IRAQ]
TAYSIR (see ATEF, Muhammad) [SDT]
TAYSIR (see ATIF, Muhammad) (individual) [SDT] [SDGT]
TCHACALA, Alcides (see SIMOES, Alcides Sakala) (individual) [UNITA]
TEA PACKETING AND TRADING COMPANY, P.O. Box 369, Khartoum, Sudan [SUDAN]
TECHNIC DIGEMEX CORP., Calle 34 No. 4-50, Office 301, Panama City, 
Panama [CUBA]
TECHNIC HOLDING INC., Calle 34 No. 4-50, Office 301, Panama City, Panama 
[CUBA]
TECHNICAL CO. FOR AGRICULTURAL PEST CONTROL, Nacer Street, Benghazi, 
Libya; New Gourgy Road, P.O. Box 6445, Tripoli, Libya [LIBYA]
TECHNOLOGY AND DEVELOPMENT GROUP LTD. (a.k.a. T.D.G.), Centric House 
390/391, Strand, London, England [IRAQ]
TEKNICA (UK) LIMITED (f.k.a. FC9063 LIMITED), 15/17 Lodge Road, St. 
Johns Wood, London NW8 7JA, England; Avon House, 360-366 Oxford Street, 
London W1N 9HA, England; Tripoli, Libya [LIBYA]
TEKNICA OIL SERVICES (OVERSEAS) LIMITED, Cyprus [LIBYA]
TEKNICA PETROLEUM SERVICES LIMITED, Suite 1100, 736 Sixth Avenue S.W., 
Calgary, Alberta T2P 3T7, Canada [LIBYA]
TEMIS SHIPPING CO., Panama [CUBA]
THABIT 'IZ (see MUSA, Rifa'i Ahmad Taha) [SDT]
THIRWAT, Salah Shihata (see SHIHATA, Thirwat Salah) (individual) [SDGT]
THIRWAT, Shahata (see SHIHATA, Thirwat Salah) (individual) [SDGT]
TIBESTI AUTOMOBILE GENERAL CO., P.O. Box 5397, Benghazi, Libya; Dema, 
Libya; Gharian, Libya; Khums, Libya; Misurata, Libya; Sebha, Libya; P.O. 
Box 8456, Tripoli, Libya; Tripoli, Libya; Zawia, Libya [LIBYA]
TIGRIS TRADING, INC., 2 Stratford Place, London W1N 9AE, England [IRAQ]
TIGRIS TRADING, INC., 5903 Harper Road, Solon, Ohio 44139, U.S.A. [IRAQ]
TITOS BOLO CLUB, Carrera 51B No. 94-110, Barranquilla, Colombia; NIT 
 890108148-6 (Colombia) [SDNT]
TOBOGON, Avenida Guadalupe con Avenida Simon Bolivar, Cali, Colombia 
[SDNT]
TOLEDO, R.F., Managing Director, Havana International Bank, 20 
Ironmonger Lane, London EC2V 8EF, England (individual) [CUBA]
TOLMETHA SHIPPING ESTABLISHMENT, P.O. Box 208, Derna, Libya [LIBYA]
TOMASEVIC, Ljiljana, Executive Director of Beogradska Banka (individual) 
[FRYM]
TOMOVIC, Slobodan, SPS Regional head KRAGUJEVAC; ex-Minister of Energy, 
Federal Republic of Yugoslavia; Member of SPS Main Committee (DOB 1946) 
(individual) [FRYM]
TORRES, Manuel, Representative, Banco Nacional de Cuba, Federico Boyd 
Avenue & 51 Street, Panama City, Panama (individual) [CUBA]
TORRES CORTES, Joselin, c/o AUREAL INMOBILIARIA LTDA., Bogota, Colombia 
(Cedula No. 19482747 (Colombia)) (individual) [SDNT]
TORRES LOZANO, Isolina, c/o COSMEPOP, Bogota, Colombia; c/o LABORATORIOS 
BLAIMAR DE COLOMBIA S.A., Bogota, Colombia (Cedula No. 28796392 
(Colombia)) (individual) [SDNT]
TORRES MENDEZ, Ramon (see ARELLANO FELIX, Ramon Eduardo) (individual) 
[SDNTK]

[[Page 1003]]

TOSCO, Arnaldo (GARCIA), Panama (individual) [CUBA]
TOURISM AND HOTELS CORPORATION, P.O. Box 7104, Khartoum, Sudan; Ed 
Damer, Sudan; El Fasher, Sudan; Khartoum Airport, Sudan; Port Sudan, 
Sudan [SUDAN]
TRADING & MARITIME INVESTMENTS, San Lorenzo, Honduras [IRAQ]
TRAMP PIONEER SHIPPING CO., Panama, c/o Anglo Caribbean Shipping Co., 
Ltd., 4th Floor, South Phase 2, South Quay Plaza, 183 Mars, London E14 
9SH, England [CUBA]
TRANSIT, S.A., Panama [CUBA]
TRAVEL SERVICES, INC., Hialeah, Florida, U.S.A. [CUBA]
TREJOS AGUILAR, Sonia, Carrera 8 No. 6-37, Zarzal, Valle del Cauca, 
Colombia; Cali, Colombia; c/o AGROINVERSORA URDINOLA HENAO Y CIA. 
S.C.S., Cali, Colombia; c/o EXPLOTACIONES AGRICOLAS Y GANADERAS LA 
LORENA S.C.S., Cali, Colombia; c/o INDUSTRIAS AGROPECUARIAS DEL VALLE 
LTDA., Cali, Colombia; c/o INVERSIONES EL EDEN S.C.S., Cali, Colombia; 
Cedula No. 66675927 (Colombia) (individual) [SDNT]
TREJOS MARQUEZ, Arnulfo, Carrera 4 No. 9-17 of. 308, AA 38028, Cali, 
Colombia; c/o CONSTRUCTORA TREMI LTDA., Cali, Colombia (Cedula No. 
6090595 (Colombia)) (individual) [SDNT]
TREVISO TRADING CORPORATION, Edificio Banco de Boston, Panama City, 
Panama [CUBA]
TRIANA TEJADA, Luis Humberto, c/o COMERCIALIZADORA DE CARNES DEL 
PACIFICO LTDA., Cali, Colombia (Cedula No. 4916206 (Colombia)) 
(individual) [SDNT]
TRIPOLI CEMENT SILOS, Libya [LIBYA]
TRIPOLI GRAIN MILL, Libya [LIBYA]
TROBER, S.A. (a.k.a. TROVER, S.A.), Edificio Saldivar, Panama City, 
Panama [CUBA]
TROPIC TOURS GMBH (a.k.a. TROPICANA TOURS GMBH), Lietzenburger Strasse 
51, Berlin, Germany [CUBA]
TROPICAL AFRICAN BANK LIMITED (f.k.a. LIBYAN ARAB UGANDA BANK FOR 
FOREIGN TRADE AND DEVELOPMENT), P.O. Box 9485, Kampala, Uganda [LIBYA]
TRUJILLO CAICEDO, Francisco Javiar (Pacho), Calle 8 Oeste No. 24C-75 
apt. 1501, Cali, Colombia; Calle 13C No. 75-95 piso 2, Cali, Colombia; 
Carrera 76A No. 6-34 apt. 107, Cali, Colombia; c/o COLOR 89.5 FM STEREO, 
Cali, Colombia (DOB 23 November 1960; Cedula No. 16264395 (Colombia)) 
(individual) [SDNT]
TRUST IMPORT-EXPORT, S.A., Panama [CUBA]
TUFAYLI, Subhi, Former Secretary General and Current Senior Figure of 
HIZBALLAH (DOB 1947, POB Biqa Valley, Lebanon) (individual) [SDT]
TUPAC AMARU REVOLUTIONARY MOVEMENT (a.k.a. MOVIMIENTO REVOLUCIONARIO 
TUPAC AMARU; a.k.a. MRTA) [FTO]
TURKISH-LIBYAN JOINT MARITIME TRANSPORT STOCK COMPANY (a.k.a. TURLIB), 
Kemeralti Caddesi 99, 80020 Karakoy, Istanbul, Turkey [LIBYA]
TYRE PLANT, Libya [LIBYA]
TYRES RETREADING CENTRES, Libya [LIBYA]
U.I. INTERNATIONAL, England [IRAQ]
UCK (a.k.a. NATIONAL LIBERATION ARMY; a.k.a. NLA) [BALKANS]
UCPMB (a.k.a. LIBERATION ARMY OF PRESEVO, MEDVEDJA, AND BUJANOVAC; 
a.k.a. PMBLA) [BALKANS]
UGUETO, Luis David (MOROS), Cyprus (individual) [LIBYA]
UL-HAQ, Dr. Amin (see AL-HAQ, Amin) (individual) [SDGT]
UMAR, Abu Umar (see UTHMAN, Omar Mahmoud) (individual) [SDGT]
UMM AL-JAWABY OIL SERVICE COMPANY, LTD., 33 Cavendish Square, London W1M 
9HF, England [LIBYA]
UMM AL-JAWABY PETROLEUM CO. S.A.L., Nafoora Field, Libya [LIBYA]
UMM AL-JAWABY PETROLEUM CO. S.A.L., P.O. Box 693, Tripoli, Libya [LIBYA]
UMMA BANK S.A.L. (31 branches throughout Libya) [LIBYA]
UMMA BANK S.A.L., 1 Giaddet Omar Mokhtar, P.O. Box 685, Tripoli, Libya 
[LIBYA]
UNITED FAIR AGENCIES, 1202 Carrian Center, 151 Gloucester Road, Wanchai, 
Hong Kong [CUBA]
UNITY BANK (now part of BANK OF KHARTOUM GROUP), Bariman Ave., P.O. Box 
408, Khartoum, Sudan [SUDAN]
UNIVERSAL SHIPPING AGENCY, Benghazi, Libya [LIBYA]
UNIVERSAL SHIPPING AGENCY, Mersa El Brega, Libya [LIBYA]
UNIVERSAL SHIPPING AGENCY, Misurata, Libya [LIBYA]
UNIVERSAL SHIPPING AGENCY, Tripoli, Libya [LIBYA]
UNIVERSAL SHIPPING AGENCY, Zuetina, Libya [LIBYA]
UNKOVIC, Slobodan, Federal Republic of Yugoslavia Ambassador to China 
(DOB 1938) (individual) [FRYM]
URBANIZACIONES Y CONSTRUCCIONES LTDA. (see URBANIZACIONES Y 
CONSTRUCCIONES LTDA. DE CALI) [SDNT]
URBANIZACIONES Y CONSTRUCCIONES LTDA. DE CALI (f.k.a. URBANIZACIONES Y 
CONSTRUCCIONES LTDA.), Carrera 4 No. 12-41 of. 1403, Cali, Colombia; NIT 
 890306569-2 (Colombia) [SDNT]
URDINOLA GRAJALES, Ivan, (a.k.a. URDINOLA GRAJALES, Jairo Ivan), Calle 
52 No. 28E-30, Cali, Colombia; Hacienda La

[[Page 1004]]

Lorena, Zarzal, Valle del Cauca, Colombia; c/o AGROINVERSORA URDINOLA 
HENAO Y CIA. S.C.S., Cali, Colombia; c/o CONSTRUCTORA UNIVERSAL LTDA., 
Cali, Colombia; c/o EXPLOTACIONES AGRICOLAS Y GANADERAS LA LORENA 
S.C.S., Cali, Colombia; c/o INDUSTRIAS AGROPECUARIAS DEL VALLE LTDA., 
Cali, Colombia; c/o INVERSIONES EL EDEN S.C.S., Cali, Colombia; DOB 1 
December 1960; Passport AD129003 (Colombia); Cedula No. 94190353 
(Colombia) (individual) [SDNT]
URDINOLA GRAJALES, Jairo Ivan (see URDINOLA GRAJALES, Ivan) (individual) 
[SDNT]
URDINOLA GRAJALES, Julio Fabio, Carrera 40 No. 5A-40, Cali, Colombia; c/
o CONSTRUCTORA E INMOBILIARIA URVALLE CIA. LTDA., Cali, Colombia; Cedula 
No. 16801454 (Colombia) (individual) [SDNT]
URIBE GONZALEZ, Jose Abelardo, c/o COMERCIALIZADORA INTERNACIONAL VALLE 
DE ORO S.A., Cali, Colombia; c/o CONSULTORIA EMPRESARIAL ESPECIALIZADA 
LTDA., Cali, Colombia; c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia; c/o 
SERVICIOS INMOBILIARIAS LTDA., Cali, Colombia (Cedula No. 16647906 
(Colombia)) (individual) [SDNT]
USAMA BIN LADEN NETWORK (see AL QA'IDA) [SDT, FTO]
USAMA BIN LADEN NETWORK (see AL QAIDA) [SDT] [FTO] [SDGT]
USAMA BIN LADEN ORGANIZATION (see AL QA'IDA) [SDT, FTO]
USAMA BIN LADEN ORGANIZATION (see AL QAIDA) [SDT] [FTO] [SDGT]
UTHMAN, Al-Samman (see UTHMAN, Omar Mahmoud) (individual) [SDGT]
UTHMAN, Omar Mahmoud (a.k.a. ABU ISMAIL; a.k.a. ABU UMAR, Abu Omar; 
a.k.a. AL-FILISTINI, Abu Qatada; a.k.a. TAKFIRI, Abu `Umr; a.k.a. UMAR, 
Abu Umar; a.k.a. UTHMAN, Al-Samman; a.k.a. UTHMAN, Umar), London, 
England (DOB 30 Dec 1960; alt. DOB 13 Dec 1960) (individual) [SDGT]
UTHMAN, Umar (see UTHMAN, Omar Mahmoud) (individual) [SDGT]
VALDIVIESO FONTAL, Diego, c/o VALLADARES LTDA., Cali, Colombia (Cedula 
No. 16662362 (Colombia)) (individual) [SDNT]
VALENCIA ARIAS, Jhon Gavy (John Gaby), Avenida 7N No. 17A-46, Cali, 
Colombia; Carrera 76 No. 6-200 102, Cali, Colombia; c/o INVERSIONES 
BETANIA LTDA., Cali, Colombia; c/o INVERSIONES EL PEN[tilde]ON S.A., 
Cali, Colombia (Cedula No. 16741491 (Colombia)) (individual) [SDNT]
VALENCIA ARIAS, Luis Fernando, c/o INVERSIONES BETANIA LTDA., Cali, 
Colombia; c/o INVERSIONES EL PEN[tilde]ON S.A., Cali, Colombia; c/o 
INVERSIONES GEMINIS S.A., Cali, Colombia (Cedula No. 71626881 
(Colombia)) (individual) [SDNT]
VALENCIA DE JARAMILLO, Maria Diocelina, c/o AGROPECUARIA LA ROBLEDA 
S.A., Cali, Colombia (individual) [SDNT]
VALENCIA FRANCO, Manuel, c/o GANADERIAS DEL VALLE S.A., Cali, Colombia 
(individual) [SDNT]
VALENCIA, Jesus Antonio, c/o DISMERCOOP, Cali, Colombia (Cedula No. 
16447249 (Colombia)) (individual) [SDNT]
VALENCIA, Reynel (Reinel), c/o COMERCIALIZADORA INTERNACIONAL VALLE DE 
ORO S.A., Cali, Colombia; c/o GANADERIAS DEL VALLE S.A., Cali, Colombia; 
c/o INMOBILIARIA U.M.V. S.A., Cali, Colombia (Cedula No. 16258610 
(Colombia)) (individual) [SDNT]
VALETTA SHIPPING CORPORATION, c/o EMPRESA DE NAVEGACION MAMBISA, 
Apartado 543, San Ignacio 104, Havana, Cuba [CUBA]
VALLADARES LTDA. (f.k.a. AGROPECUARIA BETANIA LTDA.), Calle 70N No. 14-
31, Cali, Colombia; Carrera 61 No. 11-58, Cali, Colombia (NIT  
890329123-0) [SDNT]
VALLE COMUNICACIONES LTDA. (a.k.a. VALLECOM), Carrera 60 No. 2A-107, 
Cali, Colombia [SDNT]
VALLE DE ORO S.A., Cali, Colombia; Pollo Tanrico Km 17 Recta Cali-
Palmira, Palmira, Colombia (NIT  890331067-2 (Colombia)) [SDNT]
VALORES MOBILIARIOS DE OCCIDENTE S.A., Avenida 6 Norte No. 23DN-16, 
Cali, Colombia; Avenida Colombia No. 2-45, Cali, Colombia; Carrera 1 No. 
2-45, Cali, Colombia; Carrera 100 No. 11-90 of. 602, Cali, Colombia; 
Bogota, Colombia; NIT  800249439-1 (Colombia) [SDNT]
VARGAS, Jorge (a.k.a. BECERRA, Martin; a.k.a. BECERRA MIRELES, Martin; 
a.k.a. MACHERBE, Oscar; a.k.a. MAHERBE, Oscar; a.k.a. MAHLERBE, Oscar; 
a.k.a. MAHLERBE, Polo; a.k.a. MALARBE, Oscar; a.k.a. MALERBE, Oscar; 
a.k.a. MALERHBE DE LEON, Oscar; a.k.a. MALERVA, Oscar; a.k.a. MALHARBE 
DE LEON, Oscar; a.k.a. MALHERBE DE LEON, Oscar; a.k.a. MALHERBE DELEON, 
Oscar; a.k.a. MALMERBE, Oscar; a.k.a. MELARBE, Oscar; a.k.a. NALHERBE, 
Oscar; a.k.a. QALHARBE DE LEON, Oscar); DOB 10 Jan 1964; POB Mexico 
(individual) [SDNTK]
VARGAS GARCIA, Carlos Alberto, Quito, Ecuador; c/o DISTRIBUIDORA DE 
DROGAS CONDOR LTDA., Bogota, Colombia; c/o RIONAP COMERCIO Y 
REPRESENTACIONES S.A., Quito, Ecuador (individual) [SDNT]
VARGAS LOPEZ, Gustavo Adolfo, c/o AGROPECUARIA LA ROBLEDA S.A., Cali, 
Colombia; c/o COLOMBIANA DE CERDOS LTDA., Pereira, Colombia; c/o 
INDUSTRIA

[[Page 1005]]

MADERERA ARCA LTDA., Cali, Colombia; c/o INVERSIONES VILLA PAZ S.A., 
Cali, Colombia; c/o MATADERO METROPOLITANO LTDA., Pereira, Colombia; 
Cedula No. 6457925 (Colombia) (individual) [SDNT]
VASILJEVIC, Jezdimir, Director of failed pyramid scheme based out of 
Jugoskandik Bank (DOB 1948) (individual) [FRYM]
VASQUES (or VAZQUEZ), Oscar D., Panama (individual) [CUBA]
VAZ, Jose, Managing Director, Havana International Bank, 20 Ironmonger 
Lane, London EC2V 8EY, England (individual) [CUBA]
VEBA OIL OPERATIONS B.V. (f.k.a. MOBIL OIL LIBYA, LTD.; a.k.a. VEBA OIL 
LIBYA GMBH; a.k.a. VEBA OIL LIBYAN BRANCH), Al Magharba Street, P.O. Box 
690, Tripoli, Libya (Designation applies only to joint venture located 
in Libya and office located in the Netherlands) [LIBYA]
VEBA OIL OPERATIONS B.V. (f.k.a. MOBIL OIL LIBYA, LTD.; a.k.a. VEBA OIL 
LIBYA GMBH; a.k.a. VEBA OIL LIBYAN BRANCH), P.O. Box 2357, Tripoli, 
Libya (Designation applies only to joint venture located in Libya and 
office located in the Netherlands) [LIBYA]
VEBA OIL OPERATIONS B.V. (f.k.a. MOBIL OIL LIBYA, LTD.; a.k.a. VEBA OIL 
LIBYA GMBH; a.k.a. VEBA OIL LIBYAN BRANCH), The Hague, Netherlands 
(Designation applies only to joint venture located in Libya and office 
located in the Netherlands) [LIBYA]
VEGA, Rosalba, c/o BONOMERCAD S.A., Bogota, Colombia; c/o GLAJAN S.A., 
Bogota, Colombia; c/o PATENTES MARCAS Y REGISTROS S.A., Bogota, 
Colombia; c/o SHARPER S.A., Bogota, Colombia; Cedula No. 21132758 
(Colombia) (individual) [SDNT]
VELIU, Fazli, Member of National Liberation Army (NLA) (DOB: 4 Jan 1945; 
POB: Kercove, FYROM) (individual) [BALKANS]
VESTIMENTA J Y J S. de H., Calle 78 No. 53-70, Local 112, Barranquilla, 
Colombia; NIT 802001338-8 (Colombia) [SDNT]
VIACON INTERNATIONAL, INC., Apartment 7B Torre Mar Building, Punta 
Paitilla Area, Panama City, Panama [CUBA]
VIACON INTERNATIONAL, INC., France Field, Colon Free Zone, Panama [CUBA]
VIAJES GUAMA, S.A., Spain [CUBA]
VIAJES MERCURIO LTDA., Carrera 3 No. 10-02 Local 113, Cali, Colombia 
[SDNT]
VICTORIA POTES, Nestor Raul, c/o ADMINISTRACION INMOBILIARIA S.A., Cali, 
Colombia; c/o AGROPECUARIA BETANIA LTDA., Cali, Colombia; c/o 
AGROPECUARIA LA ROBLEDA S.A., Cali, Colombia; c/o GANADERIAS DEL VALLE 
S.A., Cali, Colombia; c/o INDUSTRIA AVICOLA PALMASECA S.A., Cali, 
Colombia; c/o INVERSIONES VILLA PAZ S.A., Cali, Colombia; c/o PROHUEVO 
DE COLOMBIA LTDA., Cali, Colombia; Calle 70N No. 14-31, AA26397, Cali, 
Colombia (Cedula No. 16247701 (Colombia)) (individual) [SDNT]
VICTORIA, Mercedes, c/o COLOR 89.5 FM STEREO, Cali, Colombia; c/o COMPAX 
LTDA., Cali, Colombia; c/o INVERSIONES GEELE LTDA., Bogota, Colombia; c/
o LABORATORIOS KRESSFOR, Bogota, Colombia (individual) [SDNT]
VILLA D'ARTE (see VILLA DE ARTE S. DE H.) [SDNT]
VILLA DE ARTE S. DE H. (a.k.a. VILLA D'ARTE), Carrera 54 No. 74-79, 
Barranquilla, Colombia; Aereo Apartado 51881, Barranquilla, Colombia; 
NIT  800125346-2 (Colombia) [SDNT]
VILLADA ZUNIGA, Elmer, Calle 15 No. 20-10, Cali, Colombia; c/o TAURA 
S.A., Cali, Colombia; Cedula No. 14988902 (Colombia) (individual) [SDNT]
VILLEGAS ARIAS, Maria Deisy (Deicy), c/o CONCRETOS CALI S.A., Cali, 
Colombia; c/o CONSTRUEXITO S.A., Cali, Colombia; c/o GANADERIAS DEL 
VALLE S.A., Cali, Colombia; c/o INDUSTRIA MADERERA ARCA LTDA, Cali, 
Colombia; c/o SOCOVALLE LTDA., Cali, Colombia; Calle 66 No. 1A-6 51, 
Cali, Colombia (Cedula No. 31200871 (Colombia)) (individual) [SDNT]
VILLEGAS BOLAN[tilde]OS, Silver Amado, c/o ADMINISTRACION INMOBILIARIA 
BOLIVAR S.A., Cali, Colombia; c/o CONCRETOS CALI S.A., Cali, Colombia; 
c/o CONSULTORIA EMPRESARIAL ESPECIALIZADA LTDA., Cali, Colombia; c/o 
GANADERIAS DEL VALLE S.A., Cali, Colombia (Cedula No. 10480869 
(Colombia)) (individual) [SDNT]
VILLOTA GALVIS, Fernando, c/o FARMACOOP, Bogota, Colombia; c/o 
LABORATORIOS KRESSFOR DE COLOMBIA S.A., Bogota, Colombia (Cedula No. 
17118703 (Colombia)) (individual) [SDNT]
VINALES TOURS, Cancun, Mexico [CUBA]
VINALES TOURS, Guadalajara, Mexico [CUBA]
VINALES TOURS, Mexico City, Mexico [CUBA]
VINALES TOURS, Monterey, Mexico [CUBA]
VINALES TOURS, Roma, Mexico [CUBA]
VIOLET NAVIGATION CO. LTD., c/o EMPRESA DE NAVEGACION MAMBISA, Apartado 
543, San Ignacio 104, Havana, Cuba [CUBA]
VLATKOVIC, Dusan, Ex-Governor, NBJ, member of JUL (DOB 12 Feb 38) 
(individual) [FRYM]
VUCIC, Borka, Minister for Cooperation with International Financial 
Institutions, Federal Republic of Yugoslavia (DOB 4 Apr 26) (individual) 
[FRYM]
VUKOVIC, Slobodan, General Manager of PRVA Preduzetnicka Banka AD (DOB 2 
Jan 40) (individual) [FRYM]

[[Page 1006]]

VULCAN OIL S.P.A., Delta Energy/ERG bunkering service, Genoa, Italy 
[LIBYA]
VULCAN OIL S.P.A., Milano 2, Centro Direz. Pal. Canova, 20090 Segrate, 
Milan, Italy [LIBYA]
VULCAN OIL S.P.A., United Kingdom (offshore) [LIBYA]
W. HERRERA Y CIA. S. EN C., Avenida 2N 7N-55 of. 501, Cali, Colombia 
[SDNT]
W. HERRERA Y CIA. S. EN C. (see INVERSIONES EL GRAN CRISOL LTDA.) [SDNT]
WAD MADANI DUTY FREE SHOP, Wad Madani, Sudan [SUDAN]
WADEHYANOY, Mufti Rashid Ahmad (see LADEHYANOY, Mufti Rashid Ahmad) 
(individual) [SDGT]
WADENA SHIPPING CORPORATION, c/o EMPRESA DE NAVEGACION MAMBISA, Apartado 
543, San Ignacio 104, Havana, Cuba [CUBA]
WADOOD, Khalid Adbul (see MOHAMMED, Khalid Shaikh) (individual) [SDGT]
WAFA AL-IGATHA AL-ISLAMIA (see WAFA HUMANITARIAN ORGANIZATION) [SDGT]
WAFA HUMANITARIAN ORGANIZATION (a.k.a. AL WAFA; a.k.a. AL WAFA 
ORGANIZATION; a.k.a. WAFA AL-IGATHA AL&-ISLAMIA) [SDGT]
WAFRA CHEMICALS & TECHNO-MEDICAL SERVICES LIMITED, Khartoum, Sudan 
[SUDAN]
WAHA OIL COMPANY, Inas Building, Omar El Mokhtar Street, Box 395, 
Tripoli, Libya [LIBYA]
WAHA OIL COMPANY, P.O. Box 1075, Tripoli, Libya [LIBYA]
WAHA OIL COMPANY, P.O. Box 221, Benghazi, Libya [LIBYA]
WAHA OIL COMPANY, Sidi Issa Street, P.O. Box 915, Tripoli, Libya [LIBYA]
WAHDA BANK (37 branches throughout Libya) [LIBYA]
WAHDA BANK, Jamel Abdul Nasser Street, P.O. Box 452, Fadiel Abu Omar 
Square, El-Berhka, Benghazi, Libya [LIBYA]
WAHDA BANK, P.O. Box 1320, Benghazi, Libya [LIBYA]
WAHDA BANK, P.O. Box 3427, Tripoli, Libya [LIBYA]
WAU FRUIT AND VEGETABLE CANNING FACTORY, P.O. Box 110, Wau, Sudan 
[SUDAN]
THE WAY OF THE TORAH (see KAHANE CHAI) [SDT, FTO]
WEAVING, DYEING AND FINISHING PLANT, Libya [LIBYA]
WEI, Hsueh Kang (a.k.a. CHARNCHAI, Chiwinnitipanya; a.k.a. 
CHEEWINNITTIPANYA, Prasit; a.k.a. CHIVINNITIPANYA, Prasit; a.k.a. 
CHIWINNITIPANYA, Charnchai; a.k.a. KADUMPORN, Somboon; a.k.a. PRASIT, 
Cheewinnittipanya; a.k.a. PRASIT, Chivinnitipanya; a.k.a. SOMBOON, 
Kadumporn; a.k.a. WEI, Shao-Kang; a.k.a. WEI, Sia-Kang; a.k.a. WEI, 
Xuekang), DOB 29 June 1952; alt. DOB 29 May 1952; Passports Q081061, 
E091929 (Thailand) (individual) [SDNTK]
WEI, Shao-Kang (see WEI, Hsueh Kang) (individual) [SDNTK]
WEI, Sia-Kang (see WEI, Hsueh Kang) (individual) [SDNTK]
WEI, Xuekang (see WEI, Hsueh Kang) (individual) [SDNTK]
WEST ISLAND SHIPPING CO. LTD., c/o UNION MARITIMA PORTUARIA, 9-Piso, 
Apartado B, Esquina Cuarteles y Pena Pobre 60, Havana Vieja, Havana, 
Cuba [CUBA]
WHALE SHIPPING LTD., c/o Government of Iraq, State Organization of 
Ports, Maqal, Basrah, Iraq [IRAQ]
WHITE NILE BATTERY COMPANY, Khartoum, Sudan [SUDAN]
WHITE NILE BREWERY, P.O. Box 1378, Khartoum, Sudan [SUDAN]
WHITE NILE TANNERY, P.O. Box 4078, Khartoum, Sudan [SUDAN]
WHITE SWAN SHIPPING CO. LTD., c/o EMPRESA DE NAVEGACION CARIBE, Edificio 
Lonja del Comercio, Lamparilla 2, Caja Postal 1784, Havana 1, Cuba 
[CUBA]
WITTGREEN, Carlos (a.k.a. WITTGREEN A., Carlos; a.k.a. WITTGREEN 
Antinori, Carlos; a.k.a. WITTGREEN, Carlos Antonio), Panama (individual) 
[CUBA]
WOOL WASHING AND SPINNING PLANT, Marj, Libya [LIBYA]
WORLD ISLAMIC FRONT FOR JIHAD AGAINST JEWS AND CRUSADERS (see AL QA'IDA) 
[SDT, FTO]
THE WORLD ISLAMIC FRONT FOR JIHAD AGAINST JEWS AND CRUSADERS (see AL 
QAIDA) [SDT] [FTO] [SDGT]
WORLD ISLAMIC FRONT FOR JIHAD AGAINST JEWS AND CRUSADERS, THE (see 
ISLAMIC ARMY) [SDT]
XHEMAJLI, Emrush, Member of Popular Movement of Kosovo (LPK) (DOB: 5 May 
1959; POB: Urosevac, FRY) (individual) [BALKANS]
XHEMAJLI, Muhamet, Member of Liberation Army of Presevo, Medvedja, and 
Bujanovac (UCPMB) (DOB: 8 Feb 1958; POB: Muhovac, FRY) (individual) 
[BALKANS]
YAHYA AYYASH UNITS (see HAMAS) [SDT, FTO]
YAM, Melvia Isabel Gallegos, Merida, Mexico (individual) [CUBA]
YAMARU TRADING CO., LTD., Tokyo, Japan [CUBA]
YASIN, Abdul Rahman (a.k.a. TAHA, Abdul Rahman S.; a.k.a. TAHER, Abdul 
Rahman S.; a.k.a. YASIN, Abdul Rahman Said; a.k.a. YASIN, Aboud) (DOB 10 
Apr 1960; POB Bloomington, Indiana, U.S.A.; SSN 156-92-9858 (U.S.A.); 
Passport No. 27082171 (U.S.A. [issued 21 Jun 1992 in Amman, Jordan]); 
alt. Passport No. M0887925 (Iraq); Citizen U.S.A. (individual) [SDGT]

[[Page 1007]]

YASIN, Abdul Rahman Said (see YASIN, Abdul Rahman) (individual) [SDGT]
YASIN, Aboud (see YASIN, Abdul Rahman) (individual) [SDGT]
YASIN, Shaykh Ahmad, Founder and Chief Ideological Figure of HAMAS (DOB 
1931) (individual) [SDT]
THE YESHIVA OF THE JEWISH IDEA (see KACH) [SDT, FTO]
THE YESHIVA OF THE JEWISH IDEA (see KAHANE CHAI) [SDT, FTO]
YOUSEF, Mohamed T., Libya (individual) [LIBYA]
YULDASHEV, Takhir (see YULDASHEV, Tohir) (individual) [SDGT]
YULDASHEV, Tohir (a.k.a. YULDASHEV, Takhir), Uzbekistan (individual) 
[SDGT]
YUSSRR, Abu (see FADHIL, Mustafa Mohamed) (individual) [SDGT]
ZAHRAN, Yousuf, P.O. Box 1318, Amman, Jordan (individual) [IRAQ]
ZAINAL, Akram, Chairman and General Manager of AGRICULTURAL CO-OPERATIVE 
BANK, Iraq (individual) [IRAQ]
ZAMBA, Noel Heath (see HEATH, Noel Timothy) (individual) [SDNTK]
ZAMBO, Noel Heath (see HEATH, Noel Timothy) (individual) [SDNTK]
ZAMBRANO CERON, Maria Concepcion, c/o AGROPECUARIA LA ROBLEDA S.A., 
Cali, Colombia (individual) [SDNT]
ZAMBRANO MADRONERO, Carmen Alicia, c/o COSMEPOP, Bogota, Colombia; c/o 
PATENTES MARCAS Y REGISTROS S.A., Bogota, Colombia; Cedula No. 30738265 
(Colombia) (individual) [SDNT]
ZAMORA RUIZ, Alexander, c/o INPESCA S.A., Buenaventura, Colombia; Cedula 
No. 16498805 (Colombia) (individual) [SDNT]
ZECEVIC, Miodrag, Director of Jubmes Bank (individual) [FRYM]
ZELENOVIC, Dragan, (ICTY indictee, Bosnian Serb) (DOB 12 Feb 61) 
(individual) [FRYM]
ZIA, Ahmad (see ZIA, Mohammad) (individual) [SDGT].
ZIA, Mohammad, (a.k.a. ZIA, Ahmad) c/o Ahmed Shah s/o Painda Mohammad 
al-Karim Set, Peshawar, Pakistan; c/o Alam General Store Shop 17, Awami 
Market, Peshawar, Pakistan; c/o Zahir Shah s/o Murad Khan Ander Sher, 
Peshawar, Pakistan (individual) [SDGT]
ZLITEN FODDER PLANT, Libya [LIBYA]
ZLITEN GRAIN MILL, Libya [LIBYA]
ZLITNI, Dr. Abdul Hafid Mahmoud, Abu Dhabi, U.A.E. (individual) [LIBYA]
ZLITNI, Dr. Abdul Hafid Mahmoud, Tripoli, Libya (individual) [LIBYA]
ZUEITINA OIL COMPANY, Gas Processing Plants, Tripoli, Libya [LIBYA]
ZUEITINA OIL COMPANY, Mitchell Cotts Building, P.O. Box 2134, Tripoli, 
Libya [LIBYA]
ZUEITINA OIL COMPANY, Plant at Intisar Field A, Tripoli, Libya [LIBYA]
ZUEITINA OIL COMPANY, Zueitina Building ``A'', Sidi Issa, Dahra, P.O. 
Box 2134, Tripoli, Libya [LIBYA]
ZUGHAID, Hassan Senoussi, 15/17 Lodge Road, St. Johns Wood, London NW8 
7JA, England (individual) [LIBYA]
ZUN[tilde]IGA OSORIO, Marco Fidel, c/o FARMATODO S.A., Bogota, Colombia; 
c/o LABORATORIOS BLANCO PHARMA, Bogota, Colombia (individual) [SDNT]

[62 FR 34936, June 27, 1997, as amended at 62 FR 41851, Aug. 4, 1997; 62 
FR 48178, Sept. 15, 1997; 62 FR 67730, Dec. 30, 1997; 63 FR 28896, May 
27, 1998; 63 FR 29609, June 1, 1998; 64 FR 34986, 34987, 34991, 34992, 
June 30, 1999; 64 FR 35576, 35577, July 1, 1999; 64 FR 60661, Nov. 8, 
1999; 65 FR 17591, Apr. 4, 2000; 65 FR 39100, June 23, 2000; 65 FR 
75630, Dec. 4, 2000; 65 FR 80750, Dec. 22, 2000; 66 FR 29229, May 30, 
2001; 66 FR 54404, Oct. 26, 2001; 66 FR 57373, 57379-57381, Nov. 15, 
2001; 67 FR 16309, Apr. 5, 2002]

[[Page 1008]]

 Appendix B to Chapter V--Alphabetical Listing of Vessels That Are the 
      Property of Blocked Persons or Specially Designated Nationals

                                                                                         Blocked Vessels
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
          Vessel Name               Program           Flag           Vessel Type          DWT            GRT          Call Sign                Vessel Owner                  Alternate Names
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1 ATHAR                         IRAQ            Iraq             Tanker              1,502          .............  HNAR            Iraqi Oil Tankers Company             .......................
7 NISSAN                        IRAQ            Iraq             Tanker              1,502          .............  HNNN            Iraqi Oil Tankers Company             .......................
ACECHILLY                       CUBA            ...............  ..................  .............  .............  ..............  Acechilly Navigation Co., Malta       .......................
ACEFROSTY                       CUBA            ...............  ..................  .............  .............  ..............  Acefrosty Shipping Co., Malta         .......................
AIN ZALAH                       IRAQ            Iraq             Tanker              36,330         .............  HNAZ            Iraqi Oil Tankers Company, Basrah,    .......................
                                                                                                                                    Iraq
AL-ALYAA                        IRAQ            Iraq             Tug                 375            .............  N/A             State Org. of Iraqi Ports             .......................
AL-AMIN                         IRAQ            Iraq             Tug                 368            .............  YIAM            State Org. of Iraqi Ports             .......................
AL ANBAR                        IRAQ            Iraqi flag       Tug                 .............  .............  YIAV            Government of the Republic of Iraq.   .......................
                                                                                                                                    Managed by the State Organization
                                                                                                                                    of Iraqi Ports, Basrah, Iraq
AL-BAATH                        IRAQ            Iraq             Tanker              9,928          .............  HNBT            Iraqi Oil Tankers Company             .......................
AL-BAKR                         IRAQ            Iraq             Research            390            .............  YIBR            State Org. of Iraqi Ports             .......................
AL-BAYAA                        IRAQ            Iraq             Barge               1,662          .............  HNHB            Iraqi State Enterprise for Water      fka HIBOOB
                                                                                                                                    Transport
AL-ENTISAR                      IRAQ            Iraq             Tug                 375            .............  N/A             State Org. of Iraqi Ports             .......................
AL FAO                          IRAQ            Iraq             Research            80             .............  YIAN            State Org. of Iraqi Ports             .......................
AL-HATHER                       IRAQ            Iraq             Tug                 368            .............  YIHR            State Org. of Iraqi Ports             .......................
AL KARAMAH                      IRAQ            Iraq             Tanker              12,882         .............  HNKM            Iraqi Oil Tankers Company             .......................
AL-KARRKH                       IRAQ            Iraq             Tug                 368            .............  YIKH            State Org. of Iraqi Ports             .......................
AL KHALIDA                      IRAQ            Iraq             Tanker              7,155          .............  HNKD            Iraqi Oil Tankers Company             .......................
AL-KHALIJ-AL-ARABI              IRAQ            Iraq             Service             4,740          .............  YIKA            State Org. of Iraqi Ports             .......................
AL MANSUR                       IRAQ            Iraq             Yacht               1,223          .............  HNMR            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
AL MERBID                       IRAQ            Iraq             Service             4,649          .............  YIMD            State Org. of Iraqi Ports             .......................
AL MOSUL                        IRAQ            Iraq             Service             1,219          .............  YIAS            State Org. of Iraqi Ports             .......................
AL NAJAF                        IRAQ            Iraq             Service             4,740          .............  YINF            State Org. of Iraqi Ports             .......................
AL NASR                         IRAQ            Iraq             Service             2,444          .............  DDRH            State Org. of Iraqi Ports             .......................
AL NASR                         IRAQ            Iraq             Tanker              1,502          .............  HNNR            Iraqi Oil Tanker Company              .......................
AL-NOHOODH                      IRAQ            Iraq             Tug                 375            .............  YINU            State Org. of Iraqi Ports             .......................
AL OMARAH                       IRAQ            Iraq             Tug                 320            .............  YIAW            State Org. of Iraqi Ports             .......................
AL-QADISIYA                     IRAQ            Iraq             Yacht               100            .............  HNKS            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
AL RAMADI                       IRAQ            Iraq             Tug                 320            .............  YIAY            State Org. of Iraqi Ports             .......................
AL RASHEED                      IRAQ            Iraq             Service             304            .............  YIBE            State Org. of Iraqi Ports             .......................
AL RATBA                        IRAQ            Iraq             Tanker              544            .............  YIBA            State Org. of Iraqi Ports             .......................
AL-RESSAFA                      IRAQ            Iraq             Tug                 368            .............  YIRF            State Org. of Iraqi Ports             .......................
AL-SAHIL-AL-ARABI               IRAQ            Iraq             Service             6,396          .............  HNSA            Iraqi State Enterprise for Sea        .......................
                                                                                                                                    Fisheries, Basrah Iraq
AL SHUMOOKH                     IRAQ            Iraq             Tug                 375            .............  N/A             State Org. of Iraqi Ports             .......................
AL-THIRTHAR                     IRAQ            Iraq             Tanker              524            .............  YITH            State Org. of Iraqi Ports             .......................
AL-WAHDAH                       IRAQ            Iraq             Tug                 149            .............  YIWH            State Org. of Iraqi Ports             .......................
AL WALEED                       IRAQ            Iraq             Research            .............  .............  YIBF            State Org. of Iraqi Ports             .......................
AL ZAB                          IRAQ            Iraq             Tug                 .............  .............  YIBH            State Org. of Iraqi Ports             .......................

[[Page 1009]]

 
AL-ZAHRAA                       IRAQ            Iraq             RO/RO               3,985          .............  HNNZ            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
AL ZAWRAA                       IRAQ            Iraq             Cargo               3,549          .............  HNZW            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport, Baghdad
ALABID                          IRAQ            Iraq             Barge               1,662          .............  HNDB            Iraqi State Enterprise for Water      fka SANABUL
                                                                                                                                    Transport
ALAMINOS                        CUBA            Cyprus           General Cargo       15088          8909           P32C3           Alaminos Shipping Co. Ltd.            fka RUBY ISLANDS
ALEDREESI                       IRAQ            Iraq             Cargo               3,550          .............  HNID            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
ALEGRIA DE PIO                  CUBA            ...............  ..................  .............  .............  ..............  Naviera Maritima de Arosa, Spain      .......................
ALFARABI                        IRAQ            Iraq             Cargo               8,342          .............  HNFB            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
ALFARAHIDI                      IRAQ            Iraq             Tanker              149,441        .............  HNFR            Iraqi Oil Tankers Company             .......................
ALFIDAA                         IRAQ            Iraq             Barge               1,662          .............  HNFD            Iraqi State Enterprise for Water      fka SILOWAT
                                                                                                                                    Transport
ALKHANSAA                       IRAQ            Iraq             Cargo               3,525          .............  HNKN            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
ALKINDI                         IRAQ            Iraq             Cargo               8,342          .............  HNKI            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
ALMUSTANSIRIYAH                 IRAQ            Iraqi flag       Tanker              155,210        .............  HNMS            Iraqi Oil Tankers Company             .......................
ALMUTANABBI                     IRAQ            Iraq             Tanker              130,241        .............  HNMB            Iraqi Oil Tankers Company             .......................
ALNAJAF                         IRAQ            Iraq             Service             4,740          .............  YINF            State Org. of Iraqi Ports             .......................
ALQADISIYAH                     IRAQ            Iraq             Tanker              155,210        .............  HNQS            Iraqi Oil Tankers Company             .......................
ALSUMOOD                        IRAQ            Iraq             Service             6,977          .............  YISD            State Org. of Iraqi Ports             .......................
ALTAAWIN-ALARABI                IRAQ            Iraq             Cargo               13,634         .............  HNAI            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
ALWAHDA                         IRAQ            Iraq             Barge               1,662          .............  HNAD            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
ALWASITTI                       IRAQ            Iraq             Cargo               8,343          .............  HNWS            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
ALYARMUK                        IRAQ            Iraq             Tanker              149,371        .............  HNYK            Iraqi Oil Tankers Company             .......................
ALZUBAIR                        IRAQ            Iraq             Service             4,640          .............  YIZR            State Org. of Iraqi Ports             .......................
AMURIYAH                        IRAQ            Iraq             Tanker              155,210        .............  HNAM            Iraqi Oil Tankers Company             .......................
ANTARA                          IRAQ            Iraq             Service             508            .............  YIBD            State Org. of Iraqi Ports             .......................
ARBEEL                          IRAQ            Iraq             Tug                 320            .............  YIBB            State Org. of Iraqi Ports             .......................
BABA GURGUR                     IRAQ            Iraq             Tanker              36,397         .............  HNGR            Iraqi Oil Tankers Company             .......................
BABYLON                         IRAQ            Iraq             Cargo               13,656         .............  HNBB            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
BADR 7                          IRAQ            Saudi Arabia     Service             647            .............  N/A             Government of the Republic of Iraq,   .......................
                                                                                                                                    Ministry of Oil, State Company for
                                                                                                                                    Oil Projects, Baghdad, Iraq
BAGHDAD                         IRAQ            Iraq             Service             2,900          .............  YIAD            State Org. of Iraqi Ports             .......................
BAGHDAD                         IRAQ            Iraq             Cargo               13,656         .............  HNBD            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
BALQEES                         IRAQ            Iraq             RO/RO               3,985          .............  HNBL            State Organization for Iraq           .......................
                                                                                                                                    Government
BASRA                           IRAQ            Iraq             Service             2,906          .............  YIAB            State Org. of Iraqi Ports             .......................
BASRAH                          IRAQ            Iraq             Cargo               13,656         .............  HNBS            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
BROTHERS                        CUBA            Cyprus           Bulk Carrier        25573          16605          C4QK            Ciflare Shipping Co. Ltd.             fka TULIP ISLANDS
BUZURGAN                        IRAQ            Iraq             Tanker              36,400         .............  HNBR            Iraqi Oil Tankers Company             .......................

[[Page 1010]]

 
CARIBBEAN PRINCESS              CUBA            Cyprus           General Cargo       24155          16794          C4GL            CARIBBEAN PRINCESS SHIPPING (SDN)     .......................
CARIBBEAN QUEEN                 CUBA            Cyprus           General Cargo       24106          16794          C4JO            CARIBBEAN QUEEN SHIPPING (SDN)        .......................
CARIBBEAN SALVOR                CUBA            Malta            Tug                 669            856            9H2275          Compania Navegacion Golfo S.A.        .......................
CASABLANCA                      CUBA            ...............  ..................  .............  .............  ..............  Epamac Shipping Co., Ltd., Malta      .......................
CELTIC                          CUBA            Cyprus           Bulk Carrier        27652          16582          C4WU            Atlantic Marie Shipping Co. Ltd.      fka VIOLET ISLANDS
CICLON                          CUBA            ...............  ..................  .............  .............  ..............  Senanque Shipping Co., Ltd., Cyprus   .......................
COTTY                           CUBA            ...............  ..................  .............  .............  ..............  Heywood Navigation Corp., Panama      .......................
CRIOLLO                         CUBA            Cuba             Tug                 NA             181            CL2257          Samir de Navegacion S.A.              .......................
DAMASCUS                        IRAQ            Iraq             Tug                 149            .............  YIDS            State Org. of Iraqi Ports             .......................
DAMEN GORINCHEM 5716            IRAQ            Iraq             Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
DAMEN GORINCHEM 5717            IRAQ            Iraq             Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
DAMEN GORINCHEM 5718            IRAQ            Iraq             Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
DEYALA                          IRAQ            Iraq             Tug                 350            .............  YIBJ            State Org. of Iraqi Ports             .......................
DIJLAH                          IRAQ            Iraq             Tug                 356            .............  HNDJ            State Org. of Iraqi Ports             .......................
DIVING LAUNCH 1                 IRAQ            Iraq             Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
DIWANIYA                        IRAQ            Iraq             Tug                 350            .............  YIBK            State Org. of Iraqi Ports             .......................
DOCKAN                          IRAQ            Iraq             Tanker              528            .............  YIDN            State Org. of Iraqi Ports             .......................
DUMP BARGE I                    IRAQ            Gibralter        Service             1,330          .............  J8IY            Whale Shipping Ltd., c/o State Org.   .......................
                                                                                                                                    of Iraqi Ports
DUMP BARGE II                   IRAQ            Gibralter        Service             1,330          .............  J8IZ            Whale Shipping Ltd., c/o State Org.   .......................
                                                                                                                                    of Iraqi Ports
DUMP BARGE III                  IRAQ            Gibralter        Service             1,330          .............  J8JA            Whale Shipping Ltd., c/o State Org.   .......................
                                                                                                                                    of Iraqi Ports
EAST ISLANDS                    CUBA            Cyprus           General cargo       15120          8996           C4QB            EAST ISLAND SHIPPING CO. LTD. (SDN)   .......................
EMERALD ISLANDS                 CUBA            Malta            General cargo       15088          8909           9HRP2           BETTINA SHIPPING CO. LTD. (SDN)       .......................
FIRE BOAT No. 705               IRAQ            Iraq             Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
FIRE BOAT No. 706               IRAQ            Iraq             Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
FLYING DRAGON                   CUBA            ...............  ..................  .............  .............  ..............  Flight Dragon Shipping Ltd., Malta    .......................
FOREL                           IRAQ            Iraqi flag       Fishing             1,163          .............  HNFL            Rafidain Fisheries Co. Ltd., Basrah,  .......................
                                                                                                                                    Iraq
FRIGO HISPANIA                  CUBA            ...............  ..................  .............  .............  ..............  Ace Indic Navigation Co., Malta       .......................
FURAT                           IRAQ            Iraq             Tug                 350            .............  HNFT            State Org. of Iraqi Ports             .......................
GAZA                            IRAQ            Iraq             Service             2,422          .............  YIGZ            State Org. of Iraqi Ports             .......................
GRETE STAR                      CUBA            Panama           Container ship      17820          11318          HOQD            Avisfaith Shipping                    fka AVIS FAITH
HAMDAN                          IRAQ            Iraq             Tug                 387            .............  YIHM            State Org. of Iraqi Ports             .......................
HARNMAN H                       CUBA            Cyprus           Bulk cargo          26400          15864          5BXH            PEONY SHIPPING CO. LTD. (SDN)         fka PEONY ISLANDS
HEET                            IRAQ            Iraq             Tug                 89             .............  N/A             State Org. of Iraqi Ports             .......................
HERMANN                         CUBA            Cuba             General cargo       2597           1098           CL2685          Compania Navegacion Golfo S.A.        .......................
HILLAH                          IRAQ            Iraq             Service             6,709          .............  YIAR            State Org. of Iraqi Ports             .......................
HIMREEN                         IRAQ            Iraq             Service             508            .............  YIHN            State Org. of Iraqi Ports             .......................
HITTIN                          IRAQ            Iraq             Tanker              155,210        .............  HNHT            Iraqi Oil Tankers Company             .......................
HUNTSLAND                       CUBA            ...............  ..................  .............  .............  ..............  Huntsland Navigation Co., Ltd.,       .......................
                                                                                                                                    Malta
HUNTSVILLE                      CUBA            ...............  ..................  .............  .............  ..............  Huntsville Navigation Co., Ltd.,      .......................
                                                                                                                                    Malta

[[Page 1011]]

 
HURACAN                         CUBA            ...............  ..................  .............  .............  ..............  Senanque Shipping Co., Ltd., Cyprus   .......................
HYALITE                         CUBA            ...............  ..................  .............  .............  ..............  Whiteswan Shipping Co., Ltd., Cyprus  .......................
IBN KHALDOON                    IRAQ            Iraq             Service             12,670         .............  HNIN            State Org. of Iraqi Ports             .......................
IBN MAJID 6                     IRAQ            Saudi Arabia     Service             .............  .............  N/A             Iraqi State Company for Oil Projects  .......................
IMHEJRAN                        IRAQ            Iraq             Tug                 386            .............  YIMH            State Org. of Iraqi Ports             .......................
JABHA                           IRAQ            Iraq             Tug                 244            .............  YIJA            State Org. of Iraqi Ports             .......................
JAMBUR                          IRAQ            Iraq             Tanker              35,338         .............  HNJM            Iraqi Oil Tankers Company             .......................
JAMHORIA                        IRAQ            Iraq             Tug                 368            .............  YIJR            State Org. of Iraqi Ports             .......................
KEFAL                           IRAQ            Iraqi flag       Fishing             1,170          .............  HNKL            Rafidain Fisheries Co. Ltd.           .......................
KERBALA                         IRAQ            Iraq             Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
KHALID IBIN AL WALEED           IRAQ            Iraq             Service             2,235          .............  YIBM            State Org. of Iraqi Ports             .......................
KHANAQIN                        IRAQ            Iraq             Tanker              35,338         .............  HNKQ            Iraqi Oil Tankers Company             .......................
KHAWLA BINT AL ZAWRA            IRAQ            Iraq             RO/RO               3,985          .............  HNKH            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
KIRKUK                          IRAQ            Iraq             Tanker              35,338         .............  HNKK            Iraqi Oil Tankers Company             .......................
LAS COLORADOS                   CUBA            ...............  ..................  .............  .............  ..............  Naviera Maritima de Arosa, Spain      .......................
LAURA I                         CUBA            Panama           Container ship      2213           1843           HP7988          Naviera Polovina S.A.                 fka LAURA
LILAC ISLANDS                   CUBA            Panama           General cargo       15175          8976           3FIM2           VALETTA SHIPPING CORPORATION (SDN)    .......................
LOTUS ISLANDS                   CUBA            Panama           General cargo       15175          8976           3FIL2           WADENA SHIPPING CORPORATION (SDN)     .......................
MANDALI                         IRAQ            Iraq             Service             6,977          .............  YIQS            State Org. of Iraqi Ports             fka ALKADISIYAH
MAR AZUL                        CUBA            Cuba             Tug                 NA             212            CL2192          Samir de Navegacion S.A.              .......................
MAYSALOON                       IRAQ            Iraq             Tug                 368            .............  YIMY            State Org. of Iraqi Ports             .......................
MEASAN                          IRAQ            Iraq             Tug                 310            .............  YIMN            State Org. of Iraqi Ports             .......................
METHAQ                          IRAQ            Iraq             Tug                 248            .............  YIMQ            State Org. of Iraqi Ports             .......................
NAGROOR                         IRAQ            Iraqi flag       Fishing             140            .............  N/A             Government of the Republic of Iraq,   .......................
                                                                                                                                    Ministry of Agriculture & Agrarian
                                                                                                                                    Reform, State Fisheries Company,
                                                                                                                                    Baghdad, Iraq
NAINAWA                         IRAQ            Iraq             Tug                 310            .............  YINW            State Org. of Iraqi Ports             .......................
NEW GROVE                       CUBA            Cyprus           General cargo       1909           754            P3QJ3           Oakgrove Shipping Co. Ltd.            fka KASPAR
NISR                            IRAQ            Iraq             Service             744            .............  YISR            State Org. of Iraqi Ports             .......................
NO. 1                           IRAQ            Iraq             Service             30             .............  N/A             State Org. of Iraqi Ports             .......................
NO. 2                           IRAQ            Iraq             Service             30             .............  N/A             State Org. of Iraqi Ports             .......................
NORTH ISLANDS                   CUBA            Cyprus           General cargo       15136          8996           P3CH2           NORTH ISLAND SHIPPING CO. LTD. (SDN)  .......................
NUWAIBI                         IRAQ            Iraqi flag       Fishing             140            .............  N/A             Iraqi State Fisheries Co.             .......................
OHOD 5                          IRAQ            Saudi Arabia     Service             .............  .............  N/A             Iraqi State Company for Oil Projects  .......................
OHOD 6                          IRAQ            Saudi Arabia     Service             .............  .............  N/A             Iraqi State Company for Oil Projects  .......................
OHOD 7                          IRAQ            Saudi Arabia     Service             .............  .............  N/A             Iraqi State Company for Oil Projects  .......................
ONYX ISLANDS                    CUBA            ...............  ..................  .............  .............  ..............  Maryol Enterprises, Inc., Panama      .......................
OROOBA                          IRAQ            Iraq             Tug                 368            .............  YIOB            State Org. of Iraqi Ports             .......................
OTORI MARU No. 2                IRAQ            ...............  Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
PALESTINE                       IRAQ            Iraq             Service             4,649          .............  YIFN            State Org. of Iraqi Ports             .......................
PALMA MOCHA                     CUBA            ...............  ..................  .............  .............  ..............  Naviera Maritima de Arosa, Spain      .......................
PILOT 393                       IRAQ            Iraq             Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
PILOT 394                       IRAQ            Iraq             Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
PINECONE                        CUBA            Cyprus           General cargo       1941           753            P3QH3           Pinecone Shipping Co. Ltd.            fka GRETE
PINO DEL AGUA                   CUBA            ...............  ..................  .............  .............  ..............  Naviera Maritima de Arosa, Spain      .......................

[[Page 1012]]

 
POLICE 1                        IRAQ            Iraq             Patrol              .............  .............  N/A             State Org. of Iraqi Ports             .......................
POLICE 2                        IRAQ            Iraq             Patrol              .............  .............  N/A             State Org. of Iraqi Ports             .......................
POLICE 3                        IRAQ            Iraq             Patrol              .............  .............  N/A             State Org. of Iraqi Ports             .......................
RADHWA 18                       IRAQ            Iraq             Tug                 .............  .............  N/A             Iraqi State Company for Oil Projects  .......................
RADHWA 19                       IRAQ            Iraq             Tug                 .............  .............  N/A             Iraqi State Company for Oil Projects  .......................
RADHWA 20                       IRAQ            Saudi Arabia     Tug                 .............  .............  N/A             Iraqi State Company for Oil Projects  .......................
RAHIM 3                         CUBA            ...............  ..................  .............  .............  ..............  Pioneer Shipping Ltd., Malta          .......................
RAVENS                          CUBA            Malta            General cargo       2468           1586           9H2485          ATAMALLO SHIPPING CO. LTD. (a.k.a.    .......................
                                                                                                                                    ANTAMALLO SHIPPING CO. LTD.) (SDN)
REDESTOS                        CUBA            Cyprus           General Cargo       15180          8953           H2SA            REDESTOS SHIPPING CO. LTD. (SDN)      .......................
ROBIAN                          IRAQ            Iraqi flag       Fishing             129            .............  N/A             Iraqi State Fisheries Company         .......................
ROSE ISLANDS                    CUBA            ...............  ..................  .............  .............  ..............  Shipley Shipping Corp., Panama        .......................
RUMAILA                         IRAQ            Iraq             Tanker              36,330         .............  HNRM            Iraqi Oil Tankers Company             .......................
SAIF SAAD                       IRAQ            Iraq             Service             742            .............  N/A             State Org. of Iraqi Ports             .......................
SAMARRA                         IRAQ            Iraq             Ferry               .............  .............  YIBC            State Org. of Iraqi Ports             .......................
SANAM                           IRAQ            Iraq             Service             508            .............  YISM            State Org. of Iraqi Ports             .......................
SAND SWAN                       CUBA            Cyprus           General cargo       2595           1116           P3QG3           Sand & Swan Navigation Co. Ltd.       fka ANA I
SBOOR                           IRAQ            Iraqi flag       Fishing             129            .............  HRN2            Iraqi State Fisheries Company         .......................
SEAMUSIC II                     IRAQ            Malta            Cargo               26,732         .............  9HYH2           Seamusic Shipping Co. Ltd., c/o       .......................
                                                                                                                                    Thenamaris Ships Management Inc.,
                                                                                                                                    Athens, Greece. Vessel seized by
                                                                                                                                    Government of Iraq
SEBAA NISSAN                    IRAQ            Iraq             Tug                 368            .............  YISN            State Org. of Iraqi Ports             .......................
SENANQUE                        CUBA            Cyprus           General cargo       5479           2974           5BJR            SENANQUE SHIPPING CO. LTD. (SDN)      .......................
SHABOOT                         IRAQ            Iraq             Fish                1,163          .............  HNLK            Rafidain Fisheries Co. Ltd.           .......................
SHATT AL BASRAH                 IRAQ            Iraqi flag       Fishing             404            .............  HNSR            Iraqi State Fisheries Company         .......................
SHOROOK                         IRAQ            Iraq             Service             403            .............  YISH            State Org. of Iraqi Ports             .......................
SHU' ALAH                       IRAQ            Iraq             Tug                 .............  .............  N/A             State Org. of Iraqi Ports             .......................
SIHAN                           IRAQ            Iraq             Tug                 387            .............  YISI            State Org. of Iraqi Ports             .......................
SINAI                           IRAQ            Iraq             Service             1,286          .............  N/A             State Org. of Iraqi Ports             .......................
SINJAR                          IRAQ            Iraq             Service             .............  .............  YIAY            State Org. of Iraqi Ports             .......................
SKY SEA                         IRAQ            Honduras flag    Cargo               8,334          .............  HNRZ            Pandora Shipping Co. S.A., Honduras.  fka ALRAZI
                                                                                                                                    Managed by Petra Navigation &
                                                                                                                                    International Trading Co. Ltd.,
                                                                                                                                    Amman, Jordan.
SOLNECHNIK                      IRAQ            Iraqi flag       Fishing             404            .............  UOJE            Iraqi State Fisheries Company         .......................
SOUTH ISLANDS                   CUBA            Cyprus           General cargo       15147          8996           C4AN            SOUTH ISLAND SHIPPING CO. LTD.        .......................
STANDWEAR                       CUBA            Cyprus           Bulk carrier        19095          12147          5BQH            STANDWEAR SHIPPING CO. LTD. (SDN)     .......................
STAR 1                          CUBA            ...............  ..................  .............  .............  ..............  Canapel, S.A., Panama                 .......................
SULAIMANIYAH                    IRAQ            Iraq             Service             .............  .............  YIAG            State Org. of Iraqi Ports             .......................
SURVEY LAUNCH No. 1             IRAQ            ...............  Research            .............  .............  N/A             State Org. of Iraqi Ports             .......................
SURVEY LAUNCH No. 2             IRAQ            ...............  research            .............  .............  N/A             State Org. of Iraqi Ports             .......................

[[Page 1013]]

 
SURVEY LAUNCH No. 3             IRAQ            ...............  Research            .............  .............  N/A             State Org. of Iraqi Ports             .......................
TADMUR                          IRAQ            Iraq             Tanker              3,627          .............  HNTD            Iraqi Oil Tankers Company             .......................
TAHREER                         IRAQ            Iraq             Service             4,649          .............  YITR            State Org. of Iraqi Ports             .......................
TAMMANY H                       CUBA            Cyprus           Bulk carrier        26400          15864          5BXG            Odielo Shipping Co. Ltd.              fka PRIMROSE ISLANDS
TARIK IBN ZIYAD                 IRAQ            Iraq             Tanker              118,139        .............  HNTZ            Iraqi Oil Tankers Company             .......................
TEPHYS                          CUBA            Cyprus           General cargo       15123          8935           H2RZ            Tephys Shipping Co. Ltd.              fka PAMIT C
THEEQAR                         IRAQ            Iraq             Tug                 220            .............  YIAC            State Org. of Iraqi Ports             .......................
TIFON                           CUBA            Cuba             Tug                 NA             164            CL2059          Samir de Navegacion S.A.              .......................
UR                              IRAQ            Iraq             Tug                 368            .............  YIUR            State Org. of Iraqi Ports             .......................
WEST ISLANDS                    CUBA            Cyprus           General Cargo       15136          9112           C4IB            WEST ISLAND SHIPPING CO. LTD. (SDN)   .......................
WORK BOAT No. 6                 IRAQ            Iraq             Barge               .............  .............  N/A             State Org. of Iraqi Ports             .......................
WORKSHIP 3                      IRAQ            Iraq             Service             .............  .............  N/A             State Org. of Iraqi Ports             .......................
YANBU 31                        IRAQ            Saudi Arabia     Service             .............  .............  N/A             Iraqi State Company for Oil Projects  .......................
YOUSIFAN                        IRAQ            Iraq             Tug                 386            .............  YIYN            State Org. of Iraqi Ports             .......................
ZAIN AL QAWS                    IRAQ            Iraq             Cargo               9,247          .............  HNZQ            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport
 
ZAMZAM                          IRAQ            Iraq             Tanker              544            .............  YIAZ            State Org. of Iraqi Ports             .......................
ZANOOBIA                        IRAQ            Iraqi flag       Cargo               3,549          .............  HNZN            Iraqi State Enterprise for Water      .......................
                                                                                                                                    Transport. Represented by Ceylon
                                                                                                                                    Shipping Co., Colombo, Sri Lanka
ZUBAIDY                         IRAQ            Iraqi flag       Fishing             .............  .............  YIBO            State Org. of Iraqi Ports             .......................
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[62 FR 35029, June 27, 1997, as amended at 63 FR 29612, June 1, 1998. 
Redesignated at 64 FR 34991, June 30, 1999; 64 FR 60671, Nov. 8, 1999]

[[Page 1015]]



CHAPTER VI--BUREAU OF ENGRAVING AND PRINTING, DEPARTMENT OF THE TREASURY




  --------------------------------------------------------------------
Part                                                                Page
601             Distinctive paper for United States currency 
                    and other securities....................        1017
605             Regulations governing conduct in Bureau of 
                    Engraving and Printing Buildings and on 
                    the grounds of Washington, DC and Fort 
                    Worth, Texas............................        1017

[[Page 1017]]



PART 601--DISTINCTIVE PAPER FOR UNITED STATES CURRENCY AND OTHER SECURITIES--Table of Contents




Sec.
601.1  Notice to the public.
601.2  Description of paper.
601.3  Use of paper.
601.4  Use of paper; interest-bearing securities of the United States.
601.5  Penalty for unauthorized control or possession.

    Authority: 5 U.S.C. 301; 12 U.S.C. 418; 18 U.S.C. 474A.

    Source: 61 FR 10895, Mar. 18, 1996, unless otherwise noted.



Sec. 601.1  Notice to the public.

    The Secretary of the Treasury, by authority of law, has adopted a 
new distinctive paper for use in printing United States currency in 
addition to the existing distinctive papers for use in printing United 
States currency and other securities.



Sec. 601.2  Description of paper.

    The paper utilized in the printing of United States currency and 
public debt issues is cream-white bank note paper which must contain 
security features prescribed by the Secretary of the Treasury. All 
currency paper shall contain distinctive fibers, colored red and blue, 
incorporated in the body of the paper while in the process of 
manufacture and evenly distributed throughout. In addition to 
distinctive red and blue fibers, currency paper shall contain, for 
denominations prescribed by the Secretary of the Treasury, security 
threads embedded beneath the surface of the paper during the 
manufacturing process. Security threads shall contain graphics 
consisting of the designation ``USA'' and the denomination of the 
currency, expressed in alphabetic or numeric characters. In addition to 
the security thread, for the denominations prescribed by the Secretary 
of the Treasury, the paper will bear a watermark identical to the 
portrait to be printed on the paper.



Sec. 601.3  Use of paper.

    The new distinctive paper shall be used for printing Federal Reserve 
Notes of the denominations prescribed by the Secretary of the Treasury. 
The use of the existing distinctive papers, the distinctive features of 
which consist of distinctive fibers, colored red and blue, incorporated 
in the body of the paper while in the process of manufacture and evenly 
distributed throughout, and the security thread containing graphics 
consisting of the designation ``USA'' and the denomination of the 
currency, will be continued for printing of any currency denomination 
prescribed by the Secretary of the Treasury.



Sec. 601.4  Use of paper; interest-bearing securities of the United States.

    The existing distinctive papers shall be used for the printing of 
interest-bearing securities of the United States, and for any other 
printing where the use of distinctive paper is indicated.



Sec. 601.5  Penalty for unauthorized control or possession.

    The Secretary of the Treasury hereby gives notice that the new 
distinctive paper, together with any other distinctive papers heretofore 
adopted for the printing of paper currency or other obligations or 
securities of the United States, is and will be subject to the 
provisions of 18 U.S.C. 474A which provides, in part, that it is against 
the law to possess any paper, or facsimile thereof, designated by the 
Secretary of the Treasury for the printing of U.S. currency or any other 
security of the United States, except with the permission of the 
Secretary or the authorized official. This crime is punishable by a fine 
not to exceed five thousand dollars or imprisonment for not more than 
fifteen years, or both.



PART 605--REGULATIONS GOVERNING CONDUCT IN BUREAU OF ENGRAVING AND PRINTING BUILDINGS AND ON THE GROUNDS OF WASHINGTON, DC AND FORT WORTH, TEXAS--Table of Contents




    Authority: 5 U.S.C. 301; Delegation, Administrator, General 
Services, dated December 3, 1992; Treasury Delegation, Assistant 
Secretary (Management), dated February 4, 1993.

[[Page 1018]]



Sec. 605.1  Conduct on Bureau of Engraving and Printing property.

    (a) Applicability. These regulations apply to the Buildings and 
grounds of the Bureau of Engraving and Printing located in Washington, 
DC at 14th and C Streets SW., and in Fort Worth, Texas, at 9000 Blue 
Mound Road, and to all persons entering in or on such property. Unless 
otherwise stated herein, the Bureau of Engraving and Printing Buildings 
and grounds shall be referred to in these regulations as the 
``property.'' It is the responsibility of the occupant agencies to 
require observance of the regulations in this part by their employees.
    (b) Limited access. (1) The property shall, in general, be closed to 
the public. Except as specified in this subsection, access is limited to 
Bureau of Engraving and Printing (BEP) employees and those individuals 
having official business with the BEP.
    (2) Public tours of the facilities are available during authorized 
hours, or during such other times as the Director may prescribe.
    (3) Limited areas of the premises may be open to individuals, 
authorized by the Director, by prior arrangement on infrequent occasions 
that are announced in advance.
    (4) All persons entering the property, except for the public areas 
specified in paragraph (b)(2) of this section, may be required to 
present suitable identification and may be required to sign entry logs 
or registers.
    (5) All persons entering the property may be subjected to screening 
by weapons detection devices and shall submit to such screening upon 
request as a condition of entrance.
    (6) All persons entering the property may be subjected to 
inspections of their personal handbags, briefcases, and other handheld 
articles.
    (7) In the event of emergency situations, access to the property may 
be more tightly controlled and restricted.
    (8) Any entrance onto the property without official permission is 
prohibited.
    (c) Recording presence. All persons entering the property may be 
monitored by means of closed circuit television. Most internal areas of 
the property, especially production areas, are continuously monitored by 
closed circuit television. Any video image from the closed circuit 
television systems may be recorded for later use as needed.
    (d) Preservation of property. It shall be unlawful for any person 
without proper authority to willfully destroy, damage, deface, or remove 
property or any part thereof or any furnishings therein.
    (e) Compliance with signs and directions. Persons in and on the 
property shall comply with the instructions of BEP Special Police, other 
authorized officials, and posted signs or notices.
    (f) Nuisances. The use of loud, abusive, or profane language, 
unwarranted loitering, unauthorized assembly, the creation of any hazard 
to persons or property, improper disposal of rubbish, spitting, prurient 
prying, the commission of any obscene or indecent act, or any other 
disorderly conduct on the property is prohibited. The throwing of any 
articles of any kind in, upon, or from the property and climbing upon 
any part thereof is prohibited.
    (g) Gambling. (1) Participating in games for money or other 
property, the operation of gambling devices, the conduct of a lottery or 
pool, the selling or purchasing of numbers, tickets, or any other 
gambling in or on the property is prohibited.
    (2) Possession in or on the property of any numbers slip or ticket, 
record, notation, receipt or other writing of a type ordinarily used in 
any illegal form of gambling such as a tip sheet or dream book, unless 
explained to the satisfaction of the Director or his delegate, shall be 
prima facie evidence that there is participation in an illegal form of 
gambling in or on such property.
    (h) Intoxicating beverages, narcotics, and drugs. Entering or being 
on the property, or operating a motor vehicle thereon, by a person under 
the influence of intoxicating beverages, narcotics, hallucinogenic or 
dangerous drugs, or marijuana, or the consumption of such beverages or 
the use of such drugs or marijuana in or on the property is prohibited. 
Intoxicants, nonprescription narcotics, and other controlled substances 
(21 CFR part 1308) are prohibited on the property.

[[Page 1019]]

    (i) Soliciting, vending, debt collection, and distribution of 
handbills. The unauthorized soliciting of alms and contributions, the 
commercial soliciting and vending of all kinds, the display or 
distribution of commercial advertising, or the collecting of private 
debts other than as provided by law, in or on the property is 
prohibited. This rule does not apply to BEP concessions or notices 
posted by authorized employees on the bulletin boards. Distribution of 
material such as pamphlets, handbills, and flyers is prohibited without 
prior approval from the Director or his delegate.
    (j) Photographs. The taking of photographs on the property is 
prohibited, without the written permission of the Director. Title 18 
United States Code, Section 474 provides, in part, that whoever 
photographs any obligation or other security of the United States, or 
any part thereof, shall be fined not more than $5,000 or imprisoned not 
more than 15 years, or both.
    (k) Dogs and other animals. Dogs and other animals, except seeing-
eye dogs, shall not be brought upon the property for other than official 
purposes.
    (l) Vehicular and pedestrian traffic. (1) Drivers of all vehicles in 
or on the property shall drive in a careful and safe manner at all times 
and shall comply with the signals and directions of BEP Special Police 
and all posted traffic signs.
    (2) The blocking of entrances, driveways, walks, loading platforms, 
fire hydrants, or standpipes in or on the property is prohibited.
    (3) Parking in or on the property is not allowed without a permit or 
specific authority. Parking without authority, parking in unauthorized 
locations or in locations reserved for other persons or continuously in 
excess of 8 hours without permission, or contrary to the direction of 
BEP Special Police or of posted signs is prohibited.
    (4) This subsection may be supplemented from time to time, with the 
approval of the Director or his delegate, by the issuance and posting of 
such specific traffic directives as may be required and when so issued 
and posted such directives shall have the same force and effect as if 
made a part hereof.
    (m) Weapons and explosives. No person while on the property shall 
carry firearms, other dangerous or deadly weapons, or explosives, either 
openly or concealed, except for official purposes. According to 18 
United States Code, Section 930, ``dangerous weapon'' means ``a weapon, 
device, instrument, material, or substance, animate or inanimate, that 
is used for, or readily capable of, causing death or serious bodily 
injury . . .''
    (n) Penalties and other law. (1) Violations of this part shall be 
punishable by a fine of not more than $50 or imprisonment of not more 
than 30 days, or both in accordance with 40 United States Code, Section 
318c.
    (2) Violations of 18 United States Code, Section 930 (dangerous 
weapon clause) shall be punishable by a fine of $100,000 or imprisonment 
for not more than a year, or both, unless there is intent to commit a 
crime with the weapon, in which case the punishment shall be a fine of 
$250,000 or imprisonment for not more than five years, or both.
    (3) Nothing contained in this part shall be construed to abrogate 
any other Federal, District of Columbia, or Texas law or regulations, or 
any Tarrant County ordinance applicable to the property.

[59 FR 41978, Aug. 16, 1994]

[[Page 1021]]



          CHAPTER VII--FEDERAL LAW ENFORCEMENT TRAINING CENTER,






                       DEPARTMENT OF THE TREASURY




  --------------------------------------------------------------------
Part                                                                Page
700             Regulations governing conduct in or on the 
                    Federal Law Enforcement Training Center 
                    (FLETC) buildings and grounds...........        1023

[[Page 1023]]



PART 700--REGULATIONS GOVERNING CONDUCT IN OR ON THE FEDERAL LAW ENFORCEMENT TRAINING CENTER (FLETC) BUILDINGS AND GROUNDS--Table of Contents




Sec.
700.2  Applicability.
700.3  Recording presence.
700.4  Preservation of property.
700.5  Compliance with signs and directions.
700.6  Nuisances.
700.7  Alcoholic beverages, narcotics, and drugs.
700.8  Soliciting, vending, debt collection, and distribution of 
          handbills.
700.9  Photographs for news, advertising, or commercial purposes.
700.10  Vehicular and pedestrian traffic.
700.11  Weapons and explosives.
700.12  Authority to search persons and vehicles.
700.13  Nondiscrimination.
700.14  Smoking.

    Authority: 5 U.S.C. 301; 31 U.S.C. 321; Treasury Department Order 
No. 140-01, dated September 20, 1994; 41 FR 5869, dated Feb. 10, 1996.

    Source: 63 FR 39730, July 24, 1998, unless otherwise noted.



Sec. 700.2  Applicability.

    The regulations in this part apply to the buildings and surrounding 
property of the FLETC, Glynco, Georgia; Artesia, New Mexico; FLECT's 
Washington Office; any other temporary site FLETC may occupy; and to all 
persons entering such buildings or property.



Sec. 700.3  Recording presence.

    Except as otherwise ordered, the property shall be closed to the 
general public. Admission to the property will be limited to authorized 
individuals who will be required to obtain a visitor's pass and/or 
display identification documents, in accordance with FLETC policy.



Sec. 700.4  Preservation of property.

    It shall be unlawful for any person without proper authority to 
willfully destroy, damage, deface, or remove property (including Federal 
records) or any part thereof or any furnishing therein.



Sec. 700.5  Compliance with signs and directions.

    Persons in and on the property shall comply with the instructions of 
uniformed FLETC security officers, other authorized officials, official 
signs of a prohibitory or directory nature, and all applicable statutes 
and regulations.



Sec. 700.6  Nuisances.

    The use of loud, abusive, or profane language, except as part of an 
authorized practical training exercise, unwarranted loitering, 
unauthorized assembly, the creation of any hazard to persons or things, 
improper disposal of rubbish, or the commission of any disorderly 
conduct on the property is prohibited. Prohibited actions in the 
preceding sentence are limited to those actions which impede, obstruct, 
or otherwise interfere with the Government's business which includes, 
among other things, the maintenance of the facility, protection of 
persons and property, and the smooth administration of academic 
activities and supporting services. The entry, without specific 
permission, upon any part of the property to which authorized visitors 
do not customarily have access, is prohibited.



Sec. 700.7  Alcoholic beverages, narcotics, and drugs.

    Entering or being on the property, or operating a motor vehicle 
thereon, by a person under the influence of alcoholic beverages, 
narcotics, hallucinogenic or dangerous drugs, or marijuana is 
prohibited. The possession or use of any unlawful drug or substance 
contrary to the provisions of Federal, State, or local law in or on the 
property is prohibited.



Sec. 700.8  Soliciting, vending, debt collection and distribution of handbills.

    The unauthorized soliciting for charity and contributions, 
commercial soliciting and vending of all kinds, the display or 
distribution of commercial advertising, or the collecting of private 
debts, other than legal service of process, in or on the property, is 
prohibited. This prohibition does not apply to Federal Law Enforcement 
Training Center concessions or notices posted by authorized employees on 
the bulletin boards. Distribution of material such

[[Page 1024]]

as pamphlets, handbills, and flyers is prohibited without prior approval 
of the Director.



Sec. 700.9  Photographs for news, advertising, or commercial purposes.

    Photographs for news, advertising, or commercial purposes may be 
taken on the property only with the prior permission of the Director. 
Taking photographs of a student is prohibited without the consent of the 
student.



Sec. 700.10  Vehicular and pedestrian traffic.

    (a) Drivers of all vehicles on the property shall drive in a careful 
and safe manner at all times and shall comply with the signals and 
directions of security officers and all posted traffic signs. All 
persons on the property must comply with all applicable Federal, State, 
and local laws. All drivers operating a vehicle on property roadways 
must possess a valid driver's license.
    (b) The blocking of entrances, driveways, walks, loading platforms, 
or fire-hydrants in or on the property is prohibited.
    (c) Parking is permitted only in authorized locations.
    (d) This section may be supplemented from time to time by the 
Director by the issuance and posting of traffic directives. When so 
issued and posted, such directives shall have the same force and effect 
as if made a part hereof.



Sec. 700.11  Weapons and explosives.

    No person, while on the property, shall carry firearms, other 
dangerous or deadly weapons, or explosives, either openly or concealed, 
except for authorized training or official purposes, in accordance with 
FLETC regulations.



Sec. 700.12  Authority to search persons and vehicles.

    Persons and vehicles entering upon FLETC facilities are subject to 
search by authorized security officers.



Sec. 700.13  Nondiscrimination.

    (a) No one entering upon FLETC property shall discriminate against 
or harass any other person on such property, on the basis of race, 
color, religion, national origin, sex, sexual orientation, age, or 
disability, Sexual harassment is a form of sex discrimination and is 
expressly prohibited.
    (b) Appropriate action will be taken against any person who violates 
any discrimination prohibition contained in paragraph (a) of this 
section. However, this section does not create any legal rights 
enforceable against the Department of the Treasury, its officers, or 
employees, or any other person. Although this section does not create 
any enforceable rights, actions in violation of the section may still 
result in civil or criminal action in accordance with applicable laws.



Sec. 700.14  Smoking.

    Smoking of cigarettes, cigars and pipes is prohibited in all FLETC 
buildings and vehicles.

[[Page 1025]]



  CHAPTER VIII--OFFICE OF INTERNATIONAL INVESTMENT, DEPARTMENT OF THE 
                                TREASURY




  --------------------------------------------------------------------
Part                                                                Page
800             Regulations pertaining to mergers, 
                    acquisitions, and takeovers by foreign 
                    persons.................................        1027

[[Page 1027]]



PART 800--REGULATIONS PERTAINING TO MERGERS, ACQUISITIONS, AND TAKEOVERS BY FOREIGN PERSONS--Table of Contents




                           Subpart A--General

Sec.
800.101  Scope.
800.102  Effect on other laws.
800.103  Prior acquisitions.
800.104  Transactions or devices for avoidance.

                         Subpart B--Definitions

800.201  Acquisition.
800.202  Affiliate.
800.203  Committee; Chairman of the Committee.
800.204  Control.
800.205  Conversion.
800.206  Convertible voting security.
800.207  Effective date.
800.208  Engage in.
800.209  Entity.
800.210  Foreign government.
800.211  Foreign interest.
800.212  Foreign national.
800.213  Foreign person.
800.214  Hold.
800.215  Parent.
800.216  A party or parties to an acquisition.
800.217  Person.
800.218  Section 721.
800.219  Solely for the purpose of investment.
800.220  United States.
800.221  United States national.
800.222  United States person.
800.223  Voting securities.

                           Subpart C--Coverage

800.301  Transactions that are acquisitions under section 721.
800.302  Transactions that are not acquisitions under section 721.
800.303  Lending transactions.

                            Subpart D--Notice

800.401  Procedures for notice.
800.402  Contents of voluntary notice.
800.403  Treatment of certain voluntary notices.
800.404  Beginning of thirty-day review period.

        Subpart E--Committee Procedures: Review and Investigation

800.501  General.
800.502  Determination not to investigate.
800.503  Commencement of investigation.
800.504  Completion or termination of investigation and report to the 
          President.
800.505  Withdrawal of notice.

                     Subpart F--Presidential Action

800.601  Statutory time frame, standards for Presidential action, and 
          permissible actions under section 721.

            Subpart G--Provision and Handling of Information

800.701  Obligation of parties to provide information.
800.702  Confidentiality.

Appendix A to Part 800--Preamble to Regulations on Mergers, 
          Acquisitions, and Takeovers by Foreign Persons (Published 
          November 21, 1991)
Appendix B to Part 800--Preamble to Regulations on Mergers, 
          Acquisitions, and Takeovers by Foreign Persons (Published May 
          25, 1994)

    Authority: Section 721 of Pub. L. 100-418, 102 Stat. 1107, made 
permanent law by section 8 of Pub. L. 102-99, 105 Stat. 487 (50 U.S.C. 
App. 2170) and amended by section 837 of the National Defense 
Authorization Act for Fiscal Year 1993, Pub. L. 102-484, 106 Stat. 2315, 
2463; E.O. 12661, 54 FR 779, 3 CFR, 1988 Comp., p. 618.

    Source: 56 FR 58780, Nov. 21, 1991, unless otherwise noted.



                           Subpart A--General



Sec. 800.101  Scope.

    The regulations in this part implement section 721 of title VII of 
the Defense Production Act of 1950, hereinafter referred to as ``section 
721'' (see Sec. 800.216 of this part). The definitions in this part are 
applicable to section 721 and these regulations. The principal purpose 
of section 721 is to authorize the President to suspend or prohibit any 
merger, acquisition, or takeover, by or with a foreign person, of a 
person engaged in interstate commerce in the United States when, in the 
President's view, the foreign interest exercising control over that 
person might take action that threatens to impair the national security. 
In addition, section 721 authorizes the President to seek divestment or 
other appropriate relief in the case of concluded transactions.



Sec. 800.102  Effect on other laws.

    Nothing in this part shall be construed to alter or affect any 
existing power, process, regulation, investigation, enforcement measure, 
or review provided by any other provision of law.

[[Page 1028]]



Sec. 800.103  Prior acquisitions.

    Section 721 and the regulations in this part apply to acquisitions 
concluded on or after the effective date (as defined in Sec. 800.207), 
including acquisitions concluded prior to issuance of these regulations. 
Section 721 and the regulations in this part do not apply to 
acquisitions concluded prior to the effective date.



Sec. 800.104  Transactions or devices for avoidance.

    Any transaction(s) or other device(s) entered into or employed for 
the purpose of avoiding section 721 shall be disregarded, and section 
721 and these rules shall be applied to the substance of the 
transaction(s).

    Example. Corporation A is organized under the laws of a foreign 
state and is wholly owned and controlled by a foreign national. With a 
view towards avoiding possible application of section 721, Corporation A 
transfers money to a U.S. citizen, who, pursuant to informal 
arrangements with Corporation A and on its behalf, purchases all the 
shares in Corporation X, a corporation which is organized under the laws 
of a state of the United States, and which engages in business 
activities in the United States. That sham transaction is subject to 
section 721.



                         Subpart B--Definitions



Sec. 800.201  Acquisition.

    The term acquisition is used in these regulations to refer 
collectively to an acquisition, merger, or takeover. It includes, 
without limitation:
    (a) The acquisition of a person by:
    (1) The purchase of its voting securities,
    (2) The conversion of its convertible voting securities,
    (3) The acquisition of its convertible voting securities if that 
involves the acquisition of control, or
    (4) The acquisition and the voting of proxies, if that involves the 
acquisition of control.
    (b) The acquisition of a business, including any acquisition of 
production or research and development facilities operated prior to the 
acquisition as part of a business, if there will likely be a substantial 
use of:
    (1) The technology of that business, excluding technical information 
generally accompanying the sale of equipment, or
    (2) Personnel previously employed by that business.
    (c) A consolidation.

    Example (relating to paragraph (b) of this section). Corporation A, 
organized under the laws of a foreign state and wholly owned and 
controlled by a foreign national, acquires, from separate United States 
nationals, (a) products held in inventory, (b) land, and (c) machinery 
for export. Corporation A has not acquired a business and has not made 
an acquisition within the meaning of these regulations.



Sec. 800.202  Affiliate.

    An affiliate of an entity, as that term is used in Secs. 800.205 and 
800.402, is any other entity in the chain of ownership between a parent 
and that entity.

    Example. Corporation P holds 50 percent of the voting securities of 
Corporations R and S. Corporation R holds 40 percent of the voting 
securities of Corporation X, and Corporation S holds 50 percent of the 
voting securities of Corporation Y. Under this definition, Corporation S 
is an affiliate of Corporation Y. (An entity can be both an affiliate 
and a parent.) Corporation R is not an affiliate of Corporation S or Y 
because it is not in the chain of ownership between Corporation P and 
Corporation Y. Corporation X is also not an affiliate of Corporation Y.



Sec. 800.203  Committee; Chairman of the Committee.

    The term Committee means the Committee on Foreign Investment in the 
United States, as established in Executive Order No. 11858, 40 FR 20263, 
3 CFR, 1971-1975 Comp., p. 990, as amended. The Chairman of the 
Committee is the Secretary of the Treasury.



Sec. 800.204  Control.

    (a) The term control means the power, direct or indirect, whether or 
not exercised, and whether or not exercised or exercisable through the 
ownership of a majority or a dominant minority of the total outstanding 
voting securities of an issuer, or by proxy voting, contractual 
arrangements or other means, to determine, direct or decide matters 
affecting an entity; in particular, but without limitation, to 
determine, direct, take, reach or cause decisions regarding:

[[Page 1029]]

    (1) The sale, lease, mortgage, pledge or other transfer of any or 
all of the principal assets of the entity, whether or not in the 
ordinary course of business;
    (2) The dissolution of the entity;
    (3) The closing and/or relocation of the production or research and 
development facilities of the entity;
    (4) The termination or non-fulfillment of contracts of the entity; 
or
    (5) The amendment of the Articles of Incorporation or constituent 
agreement of the entity with respect to the matters described at 
paragraph (a) (1) through (4) of this section.
    (b) In examining questions of control in situations where more than 
one foreign person has an interest in a U.S. person, consideration will 
be given to factors such as whether the foreign persons are related and/
or whether they have commitments to act in concert.



Sec. 800.205  Conversion.

    The term conversion means the exercise of a right inherent in the 
ownership or holding of particular securities to exchange such 
securities for securities which currently entitle the owner or holder to 
vote for directors of the issuer or of any affiliate of the issuer.



Sec. 800.206  Convertible voting security.

    The term convertible voting security means a security which 
currently does not entitle its owner or holder to vote for directors of 
any entity and which is convertible into a voting security. See 
Secs. 800.201 and 800.302(c).



Sec. 800.207  Effective date.

    The term effective date means August 23, 1988, the date section 721 
became effective.



Sec. 800.208  Engage in.

    The term engage in, as used in the phrase seeks to engage in any 
merger, acquisition or takeover in section 721(b), means seeks to 
acquire control through.

[59 FR 27179, May 25, 1994]



Sec. 800.209  Entity.

    The term entity means any branch, partnership, associated group, 
association, estate, trust, corporation, division of a corporation, 
business enterprise, or other organization (whether or not organized 
under the laws of any State), and any government (including a foreign 
government, the United States Government, a State or local government, 
and any agency, corporation, financial institution, or other entity or 
instrumentality thereof, including a government sponsored agency).

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.210  Foreign government.

    The term foreign government means any government or body exercising 
governmental functions, other than the government of the United States, 
a State of the United States, or a political subdivision of the United 
States or a State. The term includes but is not limited to national, 
state, provincial and municipal governments, including their respective 
departments, agencies, government-owned enterprises and other agencies 
and instrumentalities.

[59 FR 27179, May 25, 1994]



Sec. 800.211  Foreign interest.

    The term foreign interest means any foreign person, including a 
foreign government.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.212  Foreign national.

    The term foreign national means any natural person other than a 
United States national.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.213  Foreign person.

    The term foreign person means
    (a) Any foreign national or
    (b) Any entity over which control is exercised or exercisable by a 
foreign interest.

    Example 1. Corporation A is organized under the laws of a foreign 
state and is engaged in business outside the United States. All its 
shares are held by Corporation X, which controls Corporation A. 
Corporation X is organized in the United States, and is wholly owned and 
controlled by U.S. nationals. Corporation A, although organized and 
operating outside the U.S., is not a ``foreign

[[Page 1030]]

person,'' and its acquisition of a U.S. person would not be subject to 
section 721.
    Example 2. Same facts as in the first two sentences of Example 1, 
except that Country A through governmental intervenors exercises full 
decision-making power over Corporation A, including the decisions 
described in Sec. 800.204 (a) through (e). There is a foreign interest 
which is exercising control over Corporation A, which is a ``foreign 
person.''
    Example 3. Corporation A is organized under the laws of a foreign 
state and is owned and controlled by a foreign national. Through a 
branch, Corporation A engages in business in the United States. 
Corporation A and/or its branch is a ``foreign person'' should 
Corporation A make an acquisition. Its branch business in the United 
States is also a ``U.S. person'' which may be the subject of an 
acquisition.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.214  Hold.

    The terms hold(s) and holding mean legal or beneficial ownership, 
whether direct or indirect, through fiduciaries, agents or other means.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.215  Parent.

    The term parent, as used in Secs. 800.302 and 800.402, means a 
person who or which, directly or indirectly,
    (a) Holds or will hold 50 percent or more of the outstanding voting 
securities of an entity; or
    (b) In case of an entity that has no outstanding voting securities, 
holds or will hold the right to 50 percent or more of the profits of the 
entity, or has or will have the right in the event of the dissolution to 
50 percent or more of the assets of the entity.

    Example. Corporation P holds 50 percent of the voting securities of 
Corporations R and S. Corporation R holds 40 percent of the voting 
securities of Corporation X, and Corporation S holds 50 percent of the 
voting securities of Corporation Y. Corporation P is a parent of 
Corporations R, S and Y, but not of Corporation X. Corporation S is a 
parent of Corporation Y because it holds 50 percent of the voting 
securities of Corporation Y.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.216  A party or parties to an acquisition.

    The terms party to an acquisition and parties to an acquisition 
mean:
    (a) In the case of an acquisition of a person by the purchase of its 
voting securities, the person acquiring the voting securities, and the 
person issuing those voting securities;
    (b) In the case of a merger, the surviving person, and the person or 
persons that lose its or their separate pre-merger identity;
    (c) In the case of an acquisition of an entity or a business of an 
entity, the person acquiring or seeking to acquire that entity or 
business, and the person selling that entity or business;
    (d) In the case of a consolidation, the entities being consolidated, 
and the new consolidated entity;
    (e) In the case of a proxy solicitation, the person soliciting 
proxies, and the person who issued the voting securities.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.217  Person.

    The term person means any natural person or entity.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.218  Section 721.

    The term Section 721 means section 721 of title VII of the Defense 
Production Act of 1950, 50 U.S.C. App. 2171, as added by section 5021 of 
the Omnibus Trade and Competitiveness Act of 1988, Public Law 100-418, 
102 Stat. 1107.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.219  Solely for the purpose of investment.

    (a) Voting securities are held or acquired ``solely for the purpose 
of investment'' if the person holding or acquiring such voting 
securities has no intention of determining or directing the basic 
business decisions of the issuer, including those at Sec. 800.204(a) (1) 
through (5).
    (b) Voting securities are not held solely for the purpose of 
investment if the person holding or acquiring such voting securities:

[[Page 1031]]

    (1) Possesses or develops any purpose other than investment, or
    (2) Takes any action inconsistent with acquiring or holding such 
securities solely for the purpose of investment.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.220  United States.

    The term United States means the United States of America, the 
States of the United States, the District of Columbia, and any 
commonwealth, territory, dependency, or possession of the United States, 
and includes the Outer Continental Shelf, as defined in section 2(a) of 
the Outer Continental Shelf Lands Act (43 U.S.C. 1131 (a)). For purposes 
of these regulations and their examples, an entity organized under the 
laws of the United States of America, one of the States, the District of 
Columbia, or a commonwealth, territory, dependency or possession of the 
United States, is an entity organized ``in the United States.''

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.221  United States national.

    The term United States national or U.S. national means a citizen of 
the United States or a natural person who, although not a citizen of the 
United States, owes permanent allegiance to the United States.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



Sec. 800.222  United States person.

    The term U.S. person or United States person means any natural 
person or entity but, in the case of the latter, only to the extent of 
its business activities in interstate commerce in the United States, 
irrespective of the nationality of the natural persons or entities which 
control it.

    Example 1. Corporation A is organized under the laws of a foreign 
state and is wholly owned and controlled by a foreign national. It 
engages in business activities in a state of the U.S. through a branch 
office or subsidiary. That branch office or subsidiary of Corporation A 
is an ``entity'' and a ``U.S. person.'' The branch office or subsidiary 
is also a foreign person under Sec. 800.213.
    Example 2. Same facts as in the first sentence of Example 1. 
Corporation A, however, does not have a branch office, subsidiary or 
fixed place of business in the United States. It exports and licenses 
technology to an unrelated company in the United States. Corporation A 
is not a ``U.S. person.''
    Example 3. Corporation A is organized under the laws of a foreign 
state and is wholly owned and controlled by Corporation X. Corporation X 
is organized in the United States and is wholly owned and controlled by 
U.S. nationals. Corporation A does not have a branch office, subsidiary, 
or fixed place of business in the United States. It exports goods to 
Corporation X and to unrelated companies in the United States. The sale 
of Corporation A by Corporation X to a foreign person would not 
constitute an acquisition of a U.S. person for purposes of section 721.

[56 FR 58780, Nov. 21, 1991. Redesignated and amended at 59 FR 27179, 
May 25, 1994]



Sec. 800.223  Voting securities.

    The term voting securities means any securities which at present or 
upon conversion entitle the owner or holder thereof to vote for the 
election of directors of the issuer, or, with respect to unincorporated 
entities, individuals exercising similar functions.

[56 FR 58780, Nov. 21, 1991. Redesignated at 59 FR 27179, May 25, 1994]



                           Subpart C--Coverage



Sec. 800.301  Transactions that are acquisitions under section 721.

    (a) Section 721 applies to acquisitions:
    (1) Proposed or pending on or after the effective date
    (2) By or with foreign persons
    (3) Which could result in foreign control of persons engaged in 
interstate commerce in the United States.
    (b) Transactions that are acquisitions under section 721 include, 
without limitation:
    (1) Proposed or completed acquisitions by or with foreign persons 
which could or did result in foreign control of a U.S. person, 
irrespective of the actual arrangements for control planned or in place 
for that particular acquisition.

    Example 1. Corporation A, a foreign person, proposes to purchase all 
the shares in Corporation X, which is organized in the United States and 
engages in interstate commerce in the United States.

[[Page 1032]]

    Under the applicable law, Corporation A will have the right to elect 
directors and appoint other primary officers of Corporation X, and those 
directors will have the right to reach decisions about the closing and 
relocation of particular production facilities, and the termination of 
contracts. They also will have the right to propose (for approval by 
Corporation A as a shareholder) the dissolution of Corporation X and the 
sale of its principal assets.
    For purposes of section 721, the proposed acquisition of Corporation 
X by Corporation A would result in control of a U.S. person (Corporation 
X) by a foreign person (Corporation A).
    Example 2. Same facts as in Example 1, except that Corporation A 
plans to retain the existing directors of Corporation X, all of whom are 
U.S. nationals.
    Although, under these plans, Corporation A may not in fact exercise 
control over Corporation X (because the directors as U.S. nationals may 
exercise that control), the acquisition of Corporation X by Corporation 
A still would result in foreign control over a U.S. person for purposes 
of section 721.

    (2) A proposed acquisition by or with a foreign person, which could 
result in foreign control of a U.S. person, including, without 
limitation, an offer to purchase all or a substantial portion of the 
securities of a U.S. person.

    Example. Corporation A, a foreign person makes an offer to purchase 
all the shares in Corporation X, a U.S. person. That acquisition is 
``proposed'' and subject to section 721.

    (3) Proposed or completed acquisitions, even by entities organized 
in the United States, if those entities are ``foreign persons,'' and if 
those acquisitions could or did result in a different foreign interest 
controlling the U.S. person to be acquired.

    Example 1. Corporation X is organized and operates in the United 
States. Its shares are held by a foreign person. While Corporation X is 
a ``U.S. person,'' it is also a ``foreign person'' within the meaning of 
section 721, because control over it is or could be exercised by a 
foreign person. Its acquisition of a U.S. person is subject to section 
721 because that acquisition could result in control by Corporation X (a 
``foreign person'') of a U.S. person.
    Example 2. Same facts as Example 1, except that Corporation Y, a 
foreign person, seeks to acquire Corporation X from its existing 
shareholder. That proposed acquisition is subject to section 721 because 
it could result in control of Corporation X (in this context a ``U.S. 
person'') by a different foreign person (Corporation Y).

    (4) Proposed or completed acquisitions by or with foreign persons 
which involve acquisitions of businesses and could or did result in 
foreign control of businesses located in the United States.

    Example 1. Corporation A, a foreign person, proposes to buy a branch 
office business in the United States of Corporation X, which is a 
foreign person. For purposes of these regulations, the branch office 
business of Corporation X is a United States person to the extent of its 
business activities in the U.S., and the proposed acquisition of the 
business in question is subject to section 721.
    Example 2. Corporation A, a foreign person, buys a branch office 
business located entirely outside the United States of Corporation Y, 
which is incorporated in the United States. The branch office business 
of Corporation Y is not deemed to be a United States person, and the 
acquisition is not subject to section 721.
    Example 3. Corporation A, a foreign person, makes a start-up or 
``greenfield'' investment in the United States. That investment involves 
such activities as separately arranging for the financing of and the 
construction of a plant to make a new product, buying supplies and 
inputs, hiring personnel, and purchasing the necessary technology. The 
investment may involve the acquisition of shares in a newly incorporated 
subsidiary. Corporation A will not have acquired the ``business'' of a 
U.S. person, and its greenfield investment is not subject to section 
721.

    (5) Joint ventures in which a United States person and a foreign 
person enter into contractual or other similar arrangements, including 
agreements on the establishment of a new entity, but only if a United 
States person contributes an existing identifiable business in the 
United States and a foreign interest would gain control over that 
existing business by means of the joint venture.

    Example 1. Corporation A, a foreign person, and Corporation X, a 
United States person, form a separate corporation, JV Corp., to which 
Corporation X contributes an identifiable business in the United States. 
There is no foreign interest which does or could exercise control over 
Corporation X. Under the Articles of Incorporation of JV Corp., Corp. A 
through its shareholding in JV Corp. may elect a majority of the Board 
of Directors of JV Corp. The formation of JV Corp. could result in 
foreign control of a U.S. person and is an acquisition subject to 
section 721.
    Example 2. Same facts as in Example 1, except that Corporations A 
and X each own 50 percent of the shares of JV Corp. and, under

[[Page 1033]]

the Articles of Incorporation of JV Corp. both A and X have veto power 
over all decisions by JV Corp. identified under Sec. 800.204(a) (1) 
through (5). The formation of JV Corp. is not an acquisition subject to 
section 721.
    Example 3. Corporation A, a foreign person, and Corporation X, a 
United States person, form a separate corporation, JV Corp., to which 
Corporation A contributes funding and managerial and technical 
personnel, while Corporation X contributes certain patents and equipment 
that do not under these circumstances constitute an identifiable 
business. The formation of JV Corp. is not an acquisition subject to 
section 721.

[56 FR 58780, Nov. 21, 1991, as amended at 59 FR 27179, May 25, 1994]



Sec. 800.302  Transactions that are not acquisitions under section 721.

    The following transactions are not considered acquisitions for 
purposes of section 721:
    (a) An acquisition of voting securities pursuant to a stock split or 
pro rata stock dividend which does not involve a change in control.
    (b) An acquisition in which the parent of the entity making the 
acquisition is the same as the parent of the entity being acquired.

    Example. Corporation A, a foreign person, merges its two wholly 
owned U.S. subsidiaries S1 and S2, and in addition creates a new U.S. 
subsidiary, S3. S3 then buys a business from S4, another wholly-owned 
U.S. subsidiary of Corporation A. These acquisitions are not subject to 
section 721.

    (c) An acquisition of convertible voting securities that does not 
involve control.

    Example. Corporation A, a foreign person, buys debentures, options 
and warrants of Corporation X, a U.S. person. By their terms, the 
debentures are convertible into common stock, and the options and 
warrants can be exercised for common stock. The acquisition of those 
debentures, options and warrants is not subject to section 721 so long 
as it does not involve control. The conversion of those debentures into 
common stock, or the exchange of those options and warrants for common 
stock, may be an acquisition for purposes of section 721. See 
Sec. 800.201.

    (d) A purchase of voting securities or comparable interests in a 
United States person solely for the purpose of investment, as defined in 
Sec. 800.219, if, as a result of the acquisition,
    (1) The foreign person would hold ten percent or less of the 
outstanding voting securities of the U.S. person, regardless of the 
dollar value of the voting securities so acquired or held, or
    (2) The purchase is made directly by a bank, trust company, 
insurance company, investment, company, pension fund, employee benefit 
plan, mutual fund, finance company or brokerage company in the ordinary 
course of business for its own account, provided that a significant 
portion of that business does not involve the acquisition of entities.

    Example 1. In an open market purchase solely for the purpose of 
investment, Corporation A, a foreign person, acquires 7 percent of the 
voting securities of Corporation X, which is incorporated under the laws 
of the United States. The acquisition of those securities is not subject 
to section 721.
    Example 2. Same facts as Example 1 except Corporation A is an 
investment company which makes only portfolio investments. It purchases 
14 percent of the voting securities of Corporation X for its own 
account, solely for the purpose of investment. The acquisition of those 
securities is not subject to section 721.
    Example 3. Same facts as Example 2 except that a significant portion 
of the business of Corporation A is acquiring control over corporations. 
Its purchase of 14 percent of the shares of Corporation X is subject to 
section 721.

    (e) An acquisition of assets in the United States that does not 
constitute a business in the United States. See Secs. 800.201 and 
800.301(b)(4).

    Example 1. Corporation A, a foreign person, acquires, from separate 
United States nationals, (a) products held in inventory, (b) land, and 
(c) machinery for export. Corporation A has not acquired a ``business'' 
within the meaning of section 721.
    Example 2. Corporation X produces armored personnel carriers in the 
United States. Corporation A, a foreign person, seeks to acquire the 
annual production of those carriers from Corporation X under a long-term 
contract. Neither the proposed acquisition of those carriers, nor the 
actual acquisition, is subject to section 721.
    Example 3. Same facts as Example 2, except that Corporation X, a 
U.S. person, has developed important technology in connection with the 
production of armored personnel carriers. Corporation A seeks to 
negotiate an agreement under which it would be licensed to manufacture 
using that technology. Neither the proposed acquisition of technology 
pursuant to that license agreement, nor the actual acquisition, is 
subject to section 721.

[[Page 1034]]

    Example 4. Same facts as Example 2, except that Corporation A enters 
into a contractual arrangement to acquire the entire armored personnel 
carrier business of Corporation X, including production facilities, 
customer lists, technology and staff. This acquisition is subject to 
section 721. See Sec. 800.201.

    (f) An acquisition of securities by a person acting as a securities 
underwriter, in the ordinary course of business, and in the process of 
underwriting.
    (g) An acquisition pursuant to a condition in a contract of 
insurance relating to fidelity, surety, or casualty obligations if the 
contract was made by an insurer in the ordinary course of business.
    (h) An acquisition of a security interest, but not control, in the 
voting securities or assets of a U.S. person at the time a loan or other 
financing is extended (see Sec. 800.303).
    (i) An acquisition of voting securities or assets that does not 
involve an acquisition of control of a person engaged in interstate 
commerce in the United States.

    Example 1. Corporation A, which is organized under the laws of a 
foreign state and is controlled by foreign persons, advises the 
Committee that it intends to acquire seven percent of the voting 
securities of Corporation X, which is organized under the laws of the 
United States and engaged in interstate commerce within the United 
States. In this particular case, Corporation A's purchase of this 
interest in Corporation X would not be sufficient to permit Corporation 
A to control Corporation X for purposes of Sec. 800.204. This 
transaction is not an acquisition for purposes of section 721.
    Example 2. Corporation A, which is organized under the laws of a 
foreign state and controlled by foreign persons, acquires from 
Corporation B 100 percent of the voting securities of Corporation X, a 
wholly-owned subsidiary of Corporation B that is organized under the 
laws of the United States. Corporation X currently has no employees, 
plants, equipment or subsidiaries in the United States. Corporation B 
maintains records in the United States on behalf of Corporation X and 
uses U.S. mail and telecommunications facilities on its behalf. For 
purposes of section 721, Corporation X is not engaged in interstate 
commerce in the United States, and the acquisition by Corporation A of 
securities of Corporation X is not an acquisition for purposes of 
section 721.

[56 FR 58780, Nov. 21, 1991, as amended at 59 FR 27179, May 25, 1994]



Sec. 800.303  Lending transactions.

    (a) The extension of a loan or similar financing by a foreign person 
to a U.S. person, accompanied by the creation in the foreign person of a 
secured interest in securities or other assets of the U.S. person, does 
not, by itself, subject the transaction to section 721. However, if 
control is acquired by the foreign person at the time the loan or other 
financing is extended, then the transaction may be subject to section 
721.
    (1) The Committee will not, at the time of extension of the loan or 
other financing, accept notices from parties to a loan or other 
financing transaction in which control is not acquired by the foreign 
person at that time.
    (2) The Committee will accept notices concerning transactions that 
involve loans or financing by foreign persons where, because of imminent 
or actual default or other condition, there is a significant possibility 
that the foreign person may obtain control of the U.S. person.
    (3) For purposes of this section, in determining whether an 
acquisition of a U.S. person by a foreign person results in foreign 
control under section 721, the Committee will take into account 
arrangements which the foreign person might establish to transfer day-
to-day control over the U.S. person to U.S. nationals.
    (b) Control will not be deemed to be acquired for purposes of 
section 721 in cases involving an acquisition of voting securities or 
assets of a U.S. person by a foreign person upon default, or other 
condition, involving a loan or other financing, provided that the loan 
was made by a syndicate of banks in a loan participation where the 
foreign lender (or lenders) in the syndicate:
    (1) Needs the majority consent of the U.S. participants in the 
syndicate to take action, and cannot on its own initiate any action vis-
a-vis the debtor; or
    (2) Does not have a lead role in the syndicate, and is subject to a 
provision in the loan or financing documents limiting its influence, 
ownership or control of the debtor such that control

[[Page 1035]]

for purposes of Sec. 800.204 could not be acquired.



                            Subpart D--Notice



Sec. 800.401  Procedures for notice.

    (a) A party or the parties to an acquisition subject to section 721 
may submit a voluntary notice to the Committee of the proposed or 
completed acquisition by sending thirteen copies of the information set 
out in Sec. 800.402 to the Staff Chairman of the Committee on Foreign 
Investment in the United States (hereinafter ``Staff Chairman''), Office 
of International Investment, room 5100, Department of the Treasury, 15th 
Street and Pennsylvania Avenue, NW., Washington, DC 20220.
    (b) Any member of the Committee may submit an agency notice of a 
proposed or completed acquisition to the Committee through its Staff 
Chairman if that member has reason to believe, based on facts then 
available, that the acquisition is subject to section 721 and may have 
adverse impacts on the national security. In the event of agency notice, 
the Committee will promptly furnish the parties to the acquisition with 
written advice of such notice.
    (c) No agency notice, or review or investigation by the Committee, 
shall be made with respect to a transaction more than three years after 
the date of conclusion of the transaction, unless the Chairman of the 
Committee, in consultation with other members of the Committee, requests 
an investigation.
    (d) No communications other than those described in paragraphs (a) 
and (b), and (c) of this section shall constitute notice for purposes of 
section 721.

[56 FR 58780, Nov. 21, 1991, as amended at 59 FR 27179, May 25, 1994]



Sec. 800.402  Contents of voluntary notice.

    (a) If the parties to an acquisition jointly submit a voluntary 
notice, they shall provide in detail the information set out in this 
section, which must be accurate and complete with respect to all 
parties. All parties shall sign a joint notice.
    (b) If fewer than all the parties to an acquisition submit a 
voluntary notice:
    (1) Each notifying party shall provide the information set out in 
this section with respect to itself and, to the extent known or 
reasonably available to it, with respect to each non-notifying party.
    (2) The Staff Chairman may delay acceptance of the notice, and the 
beginning of the thirty-day review period, in order to obtain any 
information set forth under this section that has not been submitted by 
the notifying party. Where necessary to obtain such information, the 
Staff Chairman may inform the non-notifying party or parties that notice 
has been initiated with respect to a proposed transaction involving the 
party, and request that certain information set forth in this section, 
as specified by the Staff Chairman, be forwarded to the Committee within 
seven days after such request by the Staff Chairman.
    (c) A voluntary notice submitted pursuant to Sec. 800.401(a) shall 
describe:
    (1) The transaction in question, including
    (i) A summary setting forth the essentials of the transaction;
    (ii) The nature of the transaction, e.g., whether the acquisition is 
by merger, consolidation, the purchase of voting securities, or 
otherwise;
    (iii) The name, United States address (if any), and address of the 
principal place of business of the foreign person making the 
acquisition;
    (iv) The name and address of the U.S. person being acquired;
    (v) The name, address and nationality of the parent, if any, of the 
foreign person making the acquisition, and of each affiliate of that 
person;
    (vi) The name, address and nationality of the persons or interests 
that will control the U.S. person being acquired; and
    (vii) The expected date for concluding the transaction, or the date 
it was concluded.
    (2) The assets of the U.S. person being acquired (to be described 
only for an acquisition of an entity structured as an acquisition of 
assets or a business).
    (3) With respect to the U.S. person being acquired, and any entity 
of which it is a parent that is also being acquired:

[[Page 1036]]

    (i) The business activities of each of them, as, for example, set 
forth in annual reports, and the product lines of each;
    (ii) The street address (or mailing address, if different) within 
the United States of the facilities of each of them, which are 
manufacturing classified or unclassified products or producing services 
described in subparagraph (v) below, and their respective Commercial and 
Government Entity Code (CAGE Code), if any, assigned by the Department 
of Defense;
    (iii) Except as may be identified in paragraph (c)(3)(iv) of this 
section, each contract (identified by agency and number), which is 
currently in effect, or was in effect within the past three years, with 
an agency of the Government of the United States with national defense 
responsibilities, including any component of the Department of Defense, 
and the name, office, and telephone number of the contracting official;
    (iv) Each contract (identified by agency and number), which is 
currently in effect or was in effect within the past five years, with 
any agency of the Government of the United States involving any 
information, technology or data, which is classified under Executive 
Order 12356 of April 2, 1982, and the name, office, and telephone number 
of the contracting official;
    (v) Any products or services (including research and development) of 
each of them with respect to which
    (A) It is a supplier, for example, a prime contractor, or a first 
tier subcontractor, or, if known, a subcontractor at any tier, to the 
Department of Defense or any component of the Department of Defense, or 
a seller to any such prime contractor or subcontractor, and, to the 
knowledge of the parties submitting notice, to what extent the U.S. 
person is a sole-source supplier to the Department of Defense for a 
particular product or service;
    (B) It has technology which has military applications.
    (4) Whether the U.S. person being acquired produces:
    (i) Products or technical data subject to validated licenses or 
under General License GTDR pursuant to the U.S. Export Administration 
Regulations (15 CFR parts 768-799); if applicable, the relevant 
Commodity Control List number shall be provided and the technical data 
shall be described; and
    (ii) Defense articles and defense services under the International 
Traffic in Arms Regulations (22 CFR subchapter M).
    (5) With respect to the foreign person:
    (i) The business or businesses of the foreign person making the 
acquisition, and of its parent and any affiliates, as described, for 
example, in annual reports. Provide CAGE codes, if any, for such 
facilities;
    (ii) The plans of the foreign person for the U.S. person with 
respect to:
    (A) Reducing, eliminating or selling research and development 
facilities,
    (B) Changing product quality,
    (C) Shutting down or moving offshore facilities which are within the 
United States,
    (D) Consolidating or selling product lines or technology, or
    (E) Modifying or terminating contracts referred to in paragraphs 
(c)(3) (iii) and (iv) of this section for defense-related goods or 
services or for goods and services otherwise affecting national 
security;
    (iii) Whether the foreign person is acting on behalf of a foreign 
government, for example, as an agent or a representative, or in some 
similar capacity; and
    (iv) Whether a foreign government or an entity controlled by a 
foreign government--
    (A) Has the power or right to determine, direct, take, reach or 
cause decisions of the acquirer with respect to any of the matters 
listed in Sec. 800.204, and, if so, the source of that power or right 
(e.g., shareholders agreement, contract, statute, regulation) and the 
mechanics of its operation;
    (B) Owns or controls voting or convertible securities of the 
acquiring foreign person or any affiliate of the acquiring foreign 
person, and if so, the nature and percentage amount of any such 
securities;
    (C) Has the right or power to appoint any of the principal officers 
or the members of the board of directors of

[[Page 1037]]

the acquiring foreign person or any affiliate of the acquiring foreign 
person; or
    (D) Holds any contingent interest (e.g., such as might arise from a 
lending transaction) in the foreign acquiring party and, if so, the 
rights that are covered by this contingent interest, and the manner in 
which they would be enforced.
    (d) The voluntary notice shall list any filings with or reports to 
agencies of the United States Government which have been or will be made 
in respect of the acquisition prior to its closing indicating the 
agencies concerned, the nature of the filing or report, the date by 
which it was filed or the estimated date by which it will be filed, and 
a relevant telephone number and/or contact point within the agency, if 
known.

    Example. Corporation A, a foreign person, intends to acquire 
Corporation X, which is wholly owned and controlled by a U.S. national, 
and which has a Facility Security Clearance under the Department of 
Defense Industrial Security Program. See Department of Defense, 
``Industrial Security Regulation,'' DOD 5220.22-R, and ``Industrial 
Security Manual for Safeguarding Classified Information,'' DOD 5220.22-
M. Corporation X accordingly files a revised Form DD 441s, and enters 
into discussions with the Defense Investigative Service about 
effectively insulating its facilities from the foreign interest.
    Paragraph (d) requires that certain specific information about these 
steps be reported to the Committee in a voluntary notice.

    (e) In the case of a joint venture subject to section 721, 
information for the voluntary notice shall be prepared on the assumption 
that the foreign person which is party to the joint venture has made an 
acquisition of the business or businesses that the U.S. person which is 
a party to the joint venture is contributing or transferring to the 
joint venture. In addition, the voluntary notice shall describe the name 
and address of the joint venture or other corporation.
    (f) In the case of acquisitions of some but not all of the 
businesses or assets of a U.S. person, Sec. 800.402(c) only requires 
submission of the specified information with respect to the business or 
assets that have been or are proposed to be acquired.
    (g) Persons filing a voluntary notice shall, in respect of the 
foreign person making the acquisition, its parent and affiliates, the 
U.S. person being acquired, and each entity of which it is a parent, 
append to the voluntary notice the most recent annual report of each 
such entity, if available. Separate reports are not required for any 
entity whose financial results are included within the consolidated 
financial results stated in the annual report of any direct or indirect 
parent of any such entity.
    (h) Persons filing a voluntary notice shall, during the time that 
the matter is pending before the Committee or the President, promptly 
advise the Staff Chairman of any material changes in plans or 
information provided to the Committee. See also Sec. 800.701(a).
    (i) Persons filing a voluntary notice shall include a copy of the 
most recent asset or stock purchase agreement or other document 
establishing the terms of the acquisition.

[56 FR 58780, Nov. 21, 1991, as amended at 59 FR 27179, May 25, 1994]



Sec. 800.403  Treatment of certain voluntary notices.

    The Committee, acting through the Staff Chairman, may
    (a) Reject voluntary notices not complying with Sec. 800.402;
    (b) Delay the beginning of the thirty-day review period until 
information specified in Sec. 800.402 has been furnished to the 
Committee;
    (c) Reject any voluntary notice at any time if, after the notice has 
been submitted and before action by the Committee or the President has 
been concluded, there is a material change in the transaction as to 
which notification has been made; and
    (d) Notify the party submitting a voluntary notice that an analysis 
of national security considerations will not be undertaken in cases 
where the Committee has found that a transaction presented is not 
subject to section 721.

    Example 1. The Staff Chairman receives a joint filing by Corporation 
A, a foreign person, and Corporation X, a company that is owned and 
controlled by U.S. nationals, with respect to Corporation A's intent to 
purchase all of the shares of Corporation X. The joint filing does not 
contain any information

[[Page 1038]]

described under Sec. 800.402(c)(3) (iv) and (v) concerning classified 
materials and products or services supplied to the U.S. military 
services. The Staff Chairman may (1) reject the filing, or (2) delay the 
start of the thirty-day review period while the parties are asked to 
supply the omitted information.
    Example 2. Same facts as in first sentence of Example 1, except that 
the joint filing indicates that Corporation A does not intend to 
purchase Corporation X's Division Y, which is engaged in classified work 
for a U.S. Government agency. Corporations A and X notify the Committee 
on the 25th day of the 30-day notice period that Division Y will also be 
acquired by Corporation A. This fact constitutes a material change with 
respect to the transaction as originally notified, and the Staff 
Chairman may reject the notice.
    Example 3. The Staff Chairman receives a joint filing by Corporation 
A, a foreign person, and Corporation X, a company that is owned and 
controlled by U.S. nationals, indicating that Corporation A intends to 
purchase 10.5 percent of the voting securities of Corporation X. Under 
the particular facts and circumstances presented, the Committee 
concluded that Corporation A's purchase of this interest in Corporation 
X would not constitute control as defined in Sec. 800.204. The Staff 
Chairman may advise the parties in writing that the transaction as 
presented is not subject to section 721 and that no analysis of national 
security considerations has been undertaken.



Sec. 800.404  Beginning of thirty-day review period.

    (a) A thirty-day period for review of the acquisition shall be 
deemed to commence on the next calendar day after voluntary notice has 
been accepted, agency notice has been received by the Staff Chairman of 
the Committee, or the Chairman of the Committee has requested an 
investigation pursuant to Sec. 800.401. Such review shall end no later 
than the thirtieth day after it has commenced, or if the thirtieth day 
is not a business day, no later than the next business day after the 
thirtieth day.
    (b) Within two business days after its receipt by the Staff 
Chairman, the Staff Chairman of the Committee shall send written advice 
of an agency notice to the parties to an acquisition.



        Subpart E--Committee Procedures: Review and Investigation



Sec. 800.501  General.

    (a) The Committee's review or investigation (if it has been 
determined that an investigation shall be conducted) shall examine, as 
appropriate, whether:
    (1) The acquisition is by or with a foreign person and could result 
in control by a foreign person of a U.S. person or persons engaged in 
interstate commerce in the United States;
    (2) There is credible evidence to support a belief that the foreign 
interest exercising control of the U.S. person to be acquired might take 
action that threatens to impair the national security; and
    (3) Provisions of law, other than section 721 and the International 
Emergency Economic Powers Act (50 U.S.C. 1701-1706), provide adequate 
and appropriate authority to protect the national security.
    (b) During the thirty-day review period or during an investigation, 
the Staff Chairman may invite the parties to a notified transaction to 
attend a meeting with the Committee staff to discuss and clarify issues 
pertaining to the transaction. During an investigation, a party to the 
investigated transaction may request a meeting with the Committee staff; 
such a request ordinarily will be granted.



Sec. 800.502  Determination not to investigate.

    (a) If the Committee determines, during the review period described 
in Sec. 800.404, not to undertake an investigation, such determination 
shall conclude action under section 721.
    (b) The Staff Chairman of the Committee shall promptly advise the 
parties to an acquisition of a determination not to investigate.



Sec. 800.503  Commencement of investigation.

    (a) If it is determined that an investigation should be undertaken, 
such investigation shall commence no later

[[Page 1039]]

than the end of the thirty-day period described in Sec. 800.404.
    (b) The Staff Chairman of the Committee shall promptly send written 
advice to the parties to an acquisition of the commencement of an 
investigation.



Sec. 800.504  Completion or termination of investigation and report to the President.

    (a) The Committee shall complete its investigation no later than the 
forty-fifth day after the date the investigation commences, or, if the 
forty-fifth day is not a business day, no later than the next business 
day after the forty-fifth day.
    (b) Upon completion or termination of any investigation, the 
Committee shall report to the President and present a recommendation. 
Any such report shall include information relevant to subparagraphs (e) 
(1) and (2) of section 721. If the Committee is unable to reach a 
unanimous recommendation, the Chairman shall submit a report of the 
Committee to the President setting forth the differing views and 
presenting the issues for decision.

[56 FR 58780, Nov. 21, 1991, as amended at 59 FR 27179, May 25, 1994]



Sec. 800.505  Withdrawal of notice.

    (a) A party to an acquisition that has submitted notice under 
Sec. 800.401(a), or, if more than one such party has submitted notice, 
the parties to an acquisition, may, at any time prior to an announcement 
by the President of his decision as described in Sec. 800.601, request 
in writing that such notice(s) be withdrawn. Such request shall be 
directed to the Staff Chairman and shall state the reasons why the 
request is being made. Such requests will ordinarily be granted, except 
as determined by the Committee. A written notification of the decision 
on the request to withdraw notice shall be sent promptly to the 
requester(s).
    (b) Any withdrawal in writing of an agency notice by the agency that 
submitted it shall be effective on its receipt by the Staff Chairman, 
who shall promptly send notice of the withdrawal to the parties to an 
acquisition.
    (c) In any case where a request to withdraw notice is granted under 
paragraph (a), or where the withdrawal is effective under paragraph (b) 
of this section, or where notice has been rejected under Sec. 800.403, 
such notice shall be considered not to have been made for purposes of 
Sec. 800.401. Section 800.702 shall nevertheless apply with respect to 
information or documentary material filed with the Committee. With 
respect to any subsequent acquisition among the parties that is within 
this part, notice made in accordance with Sec. 800.401 shall be deemed a 
new notice for purposes of these regulations, including Sec. 800.601.



                     Subpart F--Presidential Action



Sec. 800.601  Statutory time frame, standards for Presidential action, and permissible actions under section 721.

    (a) The President shall announce his decision to take action 
pursuant to section 721 no later than the fifteenth day after an 
investigation is completed, or, if the fifteenth day is not a business 
day, no later than the next business day following the fifteenth day.
    (b) The President may exercise the authority conferred by section 
721(d) if the President makes the findings required by section 721(e), 
namely, that--
    (1) There is credible evidence that leads the President to believe 
that the foreign interest exercising control might take action that 
threatens to impair the national security, and
    (2) Provisions of law, other than section 721 and the International 
Emergency Economic Powers Act (50 U.S.C. 1701-1706), do not in the 
President's judgment provide adequate and appropriate authority for the 
President to protect the national security in the matter before the 
President.
    The President's findings under section 721(d) shall not be subject 
to judicial review.
    (c) Under section 721 (d) and (e), the President:
    (1) Is empowered to take such action for such time as the President 
considers appropriate to suspend or prohibit any acquisition subject to 
section 721 that is the subject of a recommendation or recommendations 
by the Committee; and

[[Page 1040]]

    (2) Is empowered to direct the Attorney General to seek appropriate 
relief, including divestment relief, in the district courts of the 
United States in order to implement and enforce section 721.
    (d) All authority available to the President under section 721(d), 
including divestment authority, shall remain available at the discretion 
of the President in respect of acquisitions which have been concluded at 
any time on or after the effective date, but only if the purpose for 
which divestment or other appropriate relief is sought is based on 
facts, conditions, or circumstances existing at the time the transaction 
was concluded. Such authority shall not be exercised if:
    (1) The Committee, through its Staff Chairman, has in writing 
advised a party (or the parties) that a particular transaction, with 
respect to which voluntary notice was attempted, was not subject to 
section 721;
    (2) The Committee has previously determined under Sec. 800.502 not 
to undertake an investigation of the acquisition when proposed, pending, 
or completed; or
    (3) The President has previously determined not to exercise his 
authority under section 721 with respect to that acquisition.
    (e) Notwithstanding any other provision in these regulations, in any 
case where the parties to an acquisition submitted false or misleading 
material information to the Committee, or omitted material information, 
including relevant information that was supplied in response to 
provisions of Sec. 800.402; that was requested specifically by the 
Committee in the course of review, investigation, or Presidential 
determination; or that was actually provided by a party, in addition to 
such other penalties as may be provided by law,
    (1) The Committee may reopen its review or investigation of the 
transaction, and revise any recommendation or recommendations submitted 
to the President;
    (2) Any Committee member may submit or resubmit an agency notice 
under Sec. 800.401, to begin anew the process of review and 
investigation; and/or
    (3) The President may take such action for such time as the 
President deems appropriate in respect of the acquisition, and may 
revise actions earlier taken.
    (f) The Committee will generally not consider as material minor 
inaccuracies, omissions, or changes relating to financial or commercial 
factors not having a bearing on national security.

    Example 1. Corporation A, a foreign person, states in its joint 
filing with Corporation X, a U.S.-controlled person, that Corporation A 
will acquire all of the shares of Corporation X at $100 per share on 
July 31, 1991. For commercial reasons, the acquisition in fact takes 
place on August 31 of the same year, and the actual price paid per share 
is $150. The Committee would not regard these factors alone as reason to 
set aside a prior decision by the Committee not to investigate the 
proposed transaction.
    Example 2. Same facts as stated in sentence one of Example 1, except 
that the joint filing of Corporations A and X also states, in responding 
to Sec. 800.402(b)(3)(iv), that Corporation X has no contracts involving 
classified information. In fact, Corporation X has classified contracts 
with the Department of Defense. The statement would be considered false 
and could lead to action by the Committee under paragraph (e) of this 
section.

    (g) Divestment or other relief under section 721 shall not be 
available with respect to transactions that were concluded prior to the 
effective date.

[56 FR 58780, Nov. 21, 1991, as amended at 59 FR 27180, May 25, 1994]



            Subpart G--Provision and Handling of Information



Sec. 800.701  Obligation of parties to provide information.

    (a) Parties to a transaction which is notified under subpart D shall 
provide information to the Staff Chairman of the Committee that will 
enable the Committee to conduct a full review and/or investigation of 
the proposed transaction, and shall promptly advise the Staff Chairman 
of any changes in plans or information pursuant to Sec. 800.402(h). See, 
generally, 50 U.S.C. app. 2155(a) for authorities available to the 
Committee for obtaining information.

[[Page 1041]]

    (b) Documentary materials or information required or requested to be 
submitted under this part shall be submitted in English. Supplementary 
materials, such as annual reports, written in a foreign language, shall 
be submitted in certified English translation, at the request of the 
Committee.



Sec. 800.702  Confidentiality.

    (a) Section 721(c) provides that any information or documentary 
material filed with the Committee pursuant to these regulations shall be 
exempt from disclosure under section 552 of title 5, United States Code, 
and no such information or documentary material may be made public, 
except as may be relevant to any administrative or judicial action or 
proceeding. Nothing in section 721 shall be construed to prevent 
disclosure to either House of Congress or to any duly authorized 
committee or subcommittee of the Congress.
    (b) The provisions of 50 U.S.C. app. 2155(e) relating to fines and 
imprisonment shall apply in respect of disclosure of information or 
documentary material filed with the Committee under these regulations.

[56 FR 58780, Nov. 21, 1991, as amended at 59 FR 27180, May 25, 1994]

      Appendix A to Part 800--Preamble to Regulations on Mergers, 
 Acquisitions, and Takeovers by Foreign Persons (Published November 21, 
                                  1991)

    Note: For the convenience of the reader, this appendix contains the 
text of the preamble to the final regulations on mergers, acquisitions 
and takeovers by foreign persons beginning at the heading ``Discussion 
of Final Rule'' and ending before ``List of Subjects in 31 CFR Part 
800'' (56 FR 58780; November 21, 1991). Certain sections of the 
regulations were renumbered in a final rule published on May 25, 1994, 
and those number changes are reflected in the ``Section-by-Section 
Discussion of Changes'' in this appendix. (See appendix B of this part 
for the preamble of the May 25, 1994, final rule.)

                        Discussion of Final Rule

                             I. Introduction

    On July 14, 1989, the Department of the Treasury published proposed 
Regulations Pertaining to Mergers, Acquisitions and Takeovers by Foreign 
Persons. The purpose of the proposed regulations was to implement 
section 721 (hereinafter referred to as ``section 721'') of title VII of 
the Defense Production Act of 1950, as added section 5021 of the Omnibus 
Trade and Competitiveness Act of 1988 (Pub. L. 100-418), relating to 
mergers, acquisitions, and takeovers of U.S. persons by or with foreign 
persons. Section 721, which was subject to the sunset provision of the 
DPA, lapsed on October 20, 1990, and was reinstated and made permanent 
law by Public Law 102-99 (signed August 17, 1991).
    The period for receiving comments on the proposed regulations closed 
on September 14, 1989; during that time, over seventy parties--including 
private and public, as well as domestic and foreign entities--filed in 
total some 500 pages of comments. The changes that have been 
incorporated into the final version of the regulations reflect both 
suggestions made in those comments and the experience of the Committee 
on Foreign Investment in the United States (``the Committee'') in 
reviewing transactions notified under section 721 since the proposed 
regulations were published. These changes are of a substantive nature as 
well as of a technical nature; examples of the latter include 
clarifications of terms and changes in format. The substantive issues 
will be discussed in the next section; the most significant technical 
changes will be discussed in the third section of this preamble.

 II. General Discussion: Major Substantive Issues Raised by the Public 
                                Comments

    Despite the wide range of interests represented by the public 
comments and the large volume of those comments, the comments generally 
focused on nine major issues: the meaning of ``national security''; the 
scope of section 721's coverage, focusing largely on the size of a 
transaction or date of completion; the definition of ``foreign 
control''; the application of section 721 to foreign lenders; the 
desirability of fast track treatment for certain types of transactions; 
the treatment of transactions involving hostile parties; the provisions 
of the regulations providing remedies for material omissions or errors; 
Committee procedures; and the possibility of a ``sunset'' on the 
President's power to act under section 721 on non-notified transactions. 
The suggested resolutions of these issues varied significantly in many 
cases. Each of these major issues, including some of the resolutions 
proposed by the public, will be discussed generally in this section of 
the preamble. A more detailed analysis, tied to the actual wording of 
the final regulations, follows in the next section. The final section 
reiterates certain information on international obligations of the 
United States that was set forth in the preamble to the proposed 
regulations.

[[Page 1042]]

                            National Security

    The desire for a definition of ``national security,'' or for 
expanded guidance as to the meaning of that term, was a major theme of 
the public comments. Commenters had a wide range of recommendations on 
this point. Their suggestions, as well as the Committee's view of them, 
will be discussed generally in the following paragraphs.
    Some commenters suggested that changes be made in the regulations to 
incorporate either positive lists of products and services considered 
essential to the national security, or negative lists of areas that are 
not so considered. Other commenters suggested that the regulations 
incorporate a multi-factor test, based on a list of products and 
services the significance of which to the national security would depend 
on a number of other factors, such as the dollar value of the 
transaction, or the availability of the product or service from other 
U.S. suppliers. The Committee rejected these proposals, because they 
could improperly curtail the President's broad authority to protect the 
national security, and, at the same time, not result in guidance 
sufficiently detailed to be helpful to parties.
    A third approach recommended in the public comments was to offer 
guidance as to the factors that are considered in a national security 
analysis. Such guidance would not have the legal effect of exemptions or 
lists, but would be intended to give the Committee's general views as to 
when filing might be considered appropriate. The Committee has adopted a 
limited form of this latter approach; however, since it believes such 
guidance is more appropriate to the preamble than the regulations 
themselves, the guidance is set forth below.
    As is made clear in the principal legislative history (H.R. Report 
No. 576, 100th Cong., 2d Sess. 925-928, hereinafter ``Conference 
Report''), the focus of section 721 is on transactions that could 
threaten to impair the national security. Although neither the statute 
nor the Conference Report defines national security, the conferees 
explain that it is to be interpreted broadly and without limitation to 
particular industries. Conference Report at 926-927. In line with both 
the statute and the Conference Report, the final regulations do not 
define ``national security.'' Ultimately, under section 721 and the 
Constitution the judgment as to whether a transaction threatens national 
security rests within the President's discretion.
    Generally speaking, transactions that involve products, services, 
and technologies that are important to U.S. national defense 
requirements will usually be deemed significant with respect to the 
national security. It is the Committee's view that notice, while 
voluntary, would clearly be appropriate when, for example, a company is 
being acquired that provides products or key technologies essential to 
U.S. defense requirements. On the other hand, the Committee does not 
intend to suggest that notice should be submitted in cases where the 
entire output of a company to be acquired consists of products and/or 
services that clearly have no particular relationship to national 
security.
    The regulations contemplate that persons considering transactions 
will exercise their own judgment and discretion in determining whether 
to give notice to the Committee with respect to a particular 
transaction. Nonetheless, persons wishing to seek general guidance are 
invited to contact the office of the Staff Chairman, at the address and 
telephone number indicated above.
    In addition to proposing changes to the regulations themselves, a 
number of commenters suggested that the Committee publish guidance 
outside the regulations, in order to enhance public understanding of 
``national security.'' For example, some suggested that the Committee 
issue binding advisory opinions with respect to transactions on the 
strength of something less than full notice. The Committee rejected this 
suggestion on the grounds that it would be impossible for the Committee 
to fulfill its obligation to make a thorough national security analysis 
based on an abbreviated or informal filing, and the Committee in such 
cases would generally have to advise the parties to submit a formal 
filing, resulting in lost time on both sides.
    Several parties asked the Committee to consider publishing in 
summary form a digest of all the reviews and investigations the 
Committee had undertaken, including information on how the Committee 
disposed of each transaction. This approach was determined to have two 
essential shortcomings. First, national security considerations preclude 
revealing why the Committee or the President reached a particular view. 
Without that information, parties could inappropriately conclude that an 
outcome in a previous case would be relevant to the outcome of their own 
case where both appeared to involve similar facts and circumstances. The 
public would have no way of assessing which factors were most important 
to the Committee's final determination, or whether other factors, not 
mentioned in the summary, played an important role in the outcome. 
Second, the Committee is statutorily required to maintain 
confidentiality with respect to section 721 filings. Publication of even 
``cleansed'' summaries could sacrifice the confidentiality of a filing 
and potentially create concerns by parties over inadvertent publication 
of business confidential information, while affording relatively little 
useful information to readers.

[[Page 1043]]

                            Scope of Coverage

    With respect to the scope of coverage of section 721, a number of 
parties suggested various ``bright line'' tests to eliminate certain 
transactions from coverage, primarily based on their size, but also on 
other criteria. For example, it was frequently suggested that 
transactions under a certain dollar threshold be exempted, on the theory 
that very small acquisitions could not possibly have a meaningful impact 
on the national security. Other parties suggested a test based on the 
market share represented by a particular transaction. Because the 
Committee's experience in reviewing notified transactions has 
demonstrated that there is no predictable relationship between the size 
or dollar value of a transaction and its significance to the national 
security, it decided that it would be inappropriate to adopt bright line 
tests based on such criteria.
    Many commenters argued that there should be an exemption for 
transactions completed after the date on which section 721 became 
effective (August 23, 1988), but which were not notified to the 
Committee. The Committee has not adopted this suggestion, which, in the 
Committee's view, would seriously undermine the effectiveness of the 
statute.
    The regulations establish a voluntary, rather than a mandatory, 
system of notice. Nevertheless, the Committee wanted to ensure that the 
President would be able to act with respect to any transaction that 
might threaten the national security. For this reason, agency notice was 
permitted for transactions that were not notified by parties to the 
transaction. Also, as an incentive for parties to give notice of 
transactions that might raise concerns, the possibility of Presidential 
action exists for completed transactions that have not been notified to 
the Committee.
    This approach is justified by the language of section 721. The first 
sentence of paragraph (a) of section 721 provides:

    The President or his designee may make an investigation to determine 
the effects on national security of mergers, acquisitions, and takeovers 
proposed or pending on or after the date of enactment of this section by 
or with foreign persons which could result in foreign control of persons 
engaged in interstate commerce in the United States. (Emphasis 
provided).

    The plain meaning of this sentence is that one of two criteria must 
be present to bring a transaction under section 721. A transaction must 
have been proposed on or after the date of enactment, or it must be (or 
have been) pending on or after the date of enactment to be subject to 
section 721. This language does not exclude completed transactions. 
Thus, a transaction proposed on or after the date of enactment--
regardless of whether it is completed by the time of notice--is subject 
to section 721. Similarly, a transaction proposed before the effective 
date but still pending on or after that date would also be subject to 
section 721, again, regardless of whether it was completed at the time 
of notice.
    Some commenters have read the second sentence of section 721(a) as 
suggesting that Congress did not intend to capture completed 
transactions. That sentence reads: ``If it is determined that an 
investigation should be undertaken, it shall commence no later than 30 
days after receipt by the President or the President's designee of 
written notice of the proposed or pending merger, acquisition, or 
takeover as prescribed by regulations promulgated pursuant to this 
section.'' (Emphasis added.) Some commenters have argued that this 
sentence suggests that transactions must also be proposed or pending as 
of the time of notice, thereby precluding notice of completed 
transactions.
    However, it would be inconsistent with the national security 
purposes of the statute to infer that Congress intended to establish a 
large loophole by which parties could avoid a review under section 721 
simply by not giving notice of a transaction. It is much more reasonable 
to view this language as reflecting the usual case, i.e., that parties 
give notice or transactions while they are still proposed or pending, 
but not precluding notice of completed transactions as well. Once a 
transaction is subject to section 721, all of the powers and remedies 
granted the President under that section apply to the transaction, 
including, but not limited to, divestment relief. Section 721(c) 
provides that the President may ``take any action * * * to suspend or 
prohibit any acquisition * * * proposed or pending on or after the date 
of enactment of this section * * * so that [foreign] control will not 
threaten to impair the national security.'' Section 721(c) further 
provides that the President ``may direct the Attorney General to seek 
appropriate relief, including divestment relief * * * in order to 
implement and enforce this section.'' Again, the relief available under 
the statute for any transaction pending on or after the date of 
enactment is broad, and nothing in the statute narrows the availability 
of any Presidential remedies.

                             Foreign Control

    The proposed regulations defined control functionally, in terms of 
the ability of the acquirer to make certain important decisions about 
the acquired company, such as whether to dissolve the entity, or to 
relocate or close production or research and development facilities. A 
number of commenters complained that this standard is too nebulous, and 
advocated the adoption of a bright

[[Page 1044]]

line control test based on a particular percentage of stock ownership 
and/or the composition of the board of directors. Given the national 
security purposes underlying section 721, the Committee believes it 
would be inappropriate to adopt such bright line tests, which would make 
it relatively easy to structure transactions to circumvent the statute. 
However, the Committee did make certain minor adjustments in the control 
standard to remove unnecessary ambiguity. These changes are discussed 
below in the section-by-section analysis at Secs. 800.204 and 800.211.

                             Foreign Lenders

    At the time the proposed regulations were drafted, the Committee had 
almost no information on how section 721 would affect transactions 
involving foreign lenders. The proposed regulations were therefore 
deliberately vague as to whether foreign lending transactions would be 
covered and, if so, the appropriate time for giving notice--i.e., at the 
time a loan was made, or at the time of default. Since the publication 
of the proposed regulations in July 1989, the Committee has had more 
experience in reviewing lending transactions, in addition to the benefit 
of the public comments. Although the comments were not unanimous on this 
point, most commenters urged that lending transactions not be covered at 
the time a loan is made, in view of the unlikelihood that the loan 
itself will culminate in the foreign lender's acquiring control.
    However, these commenters were nevertheless concerned that foreign 
lenders be given some assurance that the value of their security 
interest would not be affected by CFIUS action. The Committee concluded 
that the acquisition of a security interest, without control, is not 
covered by section 721. Thus, if a lending transaction included, for 
example, contractual or other arrangements that conferred control, the 
transaction would be subject to section 721. However, the Committee 
would not view standard provisions of loan contracts (e.g., ordinary 
covenants of the borrower pertaining to liens, or a lender's right of 
veto over mergers or the sale of property), in and of themselves, to 
confer control over the borrower. (See the discussions below under 
Secs. 800.302 and 800.303 for further elaboration of the treatment of 
foreign lending transactions.)

                      Internal Fast Track Mechanism

    A number of commenters urged the adoption of a fast track procedure 
for reviewing notices under section 721 that clearly do not raise 
serious national security concerns. Because of the very short time frame 
for reviews that already exists (as provided in the statute), and in 
order not to encourage parties to give notice of marginal transactions, 
the Committee decided not to create a formal fast track in the 
regulations. The Committee Staff Chairman is available to discuss 
proposed transactions with parties contemplating notice.

                            Hostile Takeovers

    Fast track treatment of notified transactions involving hostile 
parties was also requested in several of the comments, on the grounds 
that the delay caused by Committee review under section 721 can unfairly 
give a target company time to thwart an unsolicited bid. Although this 
has not been a significant problem to date, the Committee will not 
tolerate attempts to delay or obstruct the review process; the final 
regulations make clear that the parties that did not file the notice 
must file information requested by the Staff Chairman within seven days 
of that request. (See the discussion in the section-by-section analysis 
at 800.402.) If necessary, the Committee can resort to its subpoena 
authority in the Defense Production Act to enforce compliance with 
section 721.

               Remedies for Material Omissions and Errors

    Many of the commenters contended that the absence of any definition 
for ``material'' in Secs. 800.601 (pertaining to material omissions) and 
800.701 (pertaining to material changes) creates uncertainty about the 
finality of any decision by the President not to investigate or take 
other action with respect to a notified transaction. To lessen this 
uncertainty, some commenters suggested that the final regulations 
incorporate a limit on the President's authority to reopen consideration 
of a transaction previously considered under section 721 due to a 
material omission. Others suggested that there be a time limit on the 
Committee's ability to reject a notice on the grounds of material 
change. The Committee did not adopt either of these time limitations. 
The former could potentially reward parties who conceal information or 
fail to take adequate care to bring all material facts about a 
transaction to light in a notice. The latter limitation could prevent 
the Committee from declining to complete its review of a transaction 
that changes radically very late in the 30-day review period, and could 
force an investigation even in a case where it would not otherwise be 
necessary.
    The Committee also did not accept the suggestion made by a few 
commenters that a transaction be reopened only when the Committee can 
show that the parties deliberately withheld material information. If 
information is material to the Committee's or the President's 
deliberation, it is irrelevant to the issue of materiality whether the 
information was intentionally withheld. The Committee has accepted 
suggestions that

[[Page 1045]]

greater guidance as to the meaning of ``materiality'' be given in the 
regulations. It is also important to note that parties may at any time 
during the course of a review under section 721 amend the notice to 
apprise the Committee of an omission in the original filing or of a 
change in the transaction since the time the filing was made, and that 
such an amendment will not necessarily affect the Committee's ability to 
complete its review of the transaction within the statutory time 
periods. From the parties' perspective, it is clearly advantageous to 
bring material changes and omissions to light during the course of a 
review, rather than to risk discovery of such matters by the Committee 
at a subsequent time.
    A material change that occurs during the course of review that is 
not brought to the Committee's attention will be subsequently viewed as 
an omission, and may cause the Committee to reopen its consideration of 
a case. The same would be true of a change that occurs after the 
President has announced his decision but was contemplated by the parties 
at the time the transaction was under review and not communicated to the 
Committee. However, recognizing that businesses often change in terms of 
function and structure, the Committee would not consider a material 
change that is both conceived and executed after the President's 
determination as a basis for reopening a case.

                          Committee Procedures

    Commenters made a number of suggestions regarding Committee 
procedures. In some cases, the Committee had already been following the 
recommended procedures, and the final rule makes that explicit. For 
example, in appropriate instances, the Committee has met with parties 
involved in particular transactions in order to obtain further 
clarification or elaboration of the materials presented in the initial 
filing.
    It is worth noting that the Committee follows certain other 
procedures, not spelled out in the final regulations, that help ensure 
the fairness of the review process. For example, the Committee sometimes 
receives unsolicited communications from third parties concerning 
certain transactions. In order to ensure fairness, the Committee 
generally requests the parties to comment on the substance of third 
party communications that the Committee believes may be relevant to its 
full understanding of the notified transaction. Similarly, the Staff 
Chairman handles all communications by the Committee with the parties, 
so as to avoid any confusion resulting from contacts with individual 
Committee members by the parties or third parties.
    A number of the recommendations in the comments about Committee 
procedures would make the review process a highly formalistic, 
adversarial process. This outcome was considered undesirable by the 
Committee, and such recommendations were not accepted. For example, the 
Committee did not adopt the suggestion that the parties be required to 
exchange public versions of their submissions to the Committee, or that 
material be filed only under oath. The Committee believes that giving 
the parties an opportunity to comment, when appropriate, on the 
substance of statements made by each other, as well as by non-
governmental third parties, adequately ensure the integrity of the 
review process.

           Sunset on Presidential Authority Under Section 721

    Another concern expressed in the public comments pertained to the 
fact that the statute places no time limits on the President's authority 
to take action with respect to non-notified transactions. Some 
commenters argued that the absence of a limit on the President's power 
to divest a completed transaction effectively converts section 721 into 
a screening mechanism, since most parties will file notices to eliminate 
the possibility of future divestment. Several commenters suggested 
adoption of a sunset.
    The Committee acknowledges that parties may have to make difficult 
decisions about whether or not to file under section 721, particularly 
when time is a critical factor in closing a deal. However, in the 
Committee's view, it would be inappropriate for the regulations to limit 
the President's authority to protect the national security with respect 
to any given transaction after a particular time. Instead, the 
regulations contain a new provision that limits to three years the time 
during which an agency can give notice with respect to a completed 
transaction. After the three year period, only transactions that appear 
to raise national security concerns can be reviewed and investigated, 
pursuant to a request from the Chairman of the Committee, in 
consultation with other members of the Committee. (See below 
Sec. 800.401.)
    Some commenters evidently fear that a transaction could be reviewed 
several years after it was completed. The Committee notes that 
divestment with respect to a completed but non-notified transaction 
would be limited by the requirement in paragraph (d) of Sec. 800.601 
that it be based on facts, conditions, or circumstances existing at the 
time the transaction was concluded. Parties should also note the 
addition of a new limitation on reviewing completed transactions, which 
has been incorporated at Sec. 800.601(d). Advice in writing by the 
Committee that a notified transaction is not subject to section 721, 
e.g., because the transaction would not result in foreign control of a 
U.S. business, is final and binding with respect to the transaction, as 
long as the information on which that determination is based is accurate 
with respect

[[Page 1046]]

to the transaction. However, subsequent changes in the material facts 
pertaining to control, e.g., a proposal by the foreign party to acquire 
additional stock, may result in a situation where notice to the 
Committee could be appropriate.

                        International Obligations

    In discharging its responsibilities under section 721, the Committee 
takes a case-by-case approach. The Conference Report states that section 
721 is not intended to abrogate existing obligations of the United 
States under treaties, including Treaties of Friendship, Commerce and 
Navigation. Conference Report at 927. Those treaties contain national 
treatment provisions under which the United States is obligated to 
extend foreign parties treatment no less favorable than that accorded 
domestic parties, but is permitted to institute measures to protect U.S. 
national security. The Committee intends to implement section 721 and 
the regulations in a manner fully consistent with the international 
obligations of the United States.

              III. Section-by-Section Discussion of Changes

    The Definitions section, subpart B, has been alphabetized.
    Section 800.201. In subsection (a), the definition of acquisition 
has been expanded to include specifically the acquisition of a person by 
a proxy contest undertaken for the purpose of obtaining control. In the 
preamble to the proposed regulations, the Committee requested public 
comments on the desirability of covering proxy contests under the 
regulations. The comments were inconclusive on this point. The Committee 
decided to cover specifically proxy contests undertaken for the purpose 
of obtaining control, such as a contest to change the board of 
directors, because such a contest represents a takeover attempt. Parties 
may give notice at or just prior to the time a proxy solicitation 
commences. However, contests undertaken for any purpose other than to 
obtain control would not be covered by the regulations.
    In subsection (b), qualifying language has been added to the 
provision concerning the acquisition of assets where, in addition to the 
asset acquisition, the acquirer will make substantial use of the 
seller's technology. The qualifier ``excluding technical information 
generally accompanying the sale of equipment'' is intended to convey 
that an acquisition of assets is not covered by section 721 unless the 
technology acquired by the foreign person is separate and apart from 
that inherent in, or typically accompanying the asset, such as 
instruction manuals and operating procedures that would routinely 
accompany equipment.
    Section 800.204. The definition of control in the proposed 
regulations included the ability to ``formulate'' matters or decisions 
affecting an entity. A number of public commenters noted that the 
ability to ``formulate'' in this sense is not a meaningful index of 
control, since technically any shareholder has this right. To alleviate 
any uncertainty on this point, ``formulate'' has been dropped from the 
definition.
    The definition of control has also been modified with the addition 
of subsection (b) to clarify that a U.S. person will not automatically 
be deemed to be foreign-controlled where a number of unrelated foreign 
parties hold an interest in that person. This point would apply even 
when the foreign parties taken as a whole hold the majority of stock in 
a U.S. company. The Committee would have to determine in such a case, as 
it would in any notified transaction, whether any single foreign party, 
acting on its own or in concert with another party (e.g., through 
contractual arrangements), could control the U.S. person.
    Section 800.213. A minor change to the wording of the definition of 
foreign person has been made to emphasize that there must be the present 
potential for control by a foreign interest, rather than a mere remote 
possibility, for an entity to be considered a foreign person under 
section 721. Whereas the regulation previously read ``an entity over 
which control is or could be exercised by a foreign interest,'' the 
underlined phrase has been replaced by ``exercised or exercisable'' to 
alleviate vagueness or remoteness in the standard. Thus, only the 
present potential for control (regardless of whether the foreign 
interest actually exercises it) matters for purposes of this section.
    Section 800.216. The proposed regulations left unresolved the issue 
of who are the parties to an acquisition in the case of a proxy 
solicitation. In light of the Committee's decision to cover proxy 
solicitations undertaken for the purpose of obtaining control just prior 
to and at the time the solicitation is made, the final regulations make 
both the persons soliciting proxies as well as the person who issued the 
voting securities parties to the acquisition.
    Section 800.219. To make this section consistent with the modified 
definition of control, the word formulation has been deleted from the 
definition of ``solely for the purpose of investment.'' (See 
Sec. 800.204 above.) With respect to Sec. 800.302(d) (which should be 
consulted), a party that has no intention of determining or directing 
the basic business decisions of the issuer, and who does not possess or 
develop any purpose other than investment, or take any action 
inconsistent with that purpose, would be deemed to hold securities 
solely for the purpose of investment.
    Section 800.222. This section defines U.S. person as any entity 
``but only to the extent of its business activities in interstate 
commerce in the United States, irrespective of

[[Page 1047]]

the nationality of the individuals or entities which control it.'' To 
underscore the significance of that qualifier to the definition, a third 
example has been added to this section. The example describes the 
acquisition by a foreign person of a foreign subsidiary of a U.S. 
corporation. In the facts presented by the example, the foreign 
subsidiary has no fixed place of business in the United States, but 
merely exports goods to the U.S. parent and to unaffiliated companies in 
the United States. The acquisition of such an entity by a foreign person 
would not constitute the acquisition of a U.S. person under section 721 
because the mere export of goods to the United States by a foreign 
subsidiary with no fixed place of business in this country does not 
constitute ``business activity in interstate commerce in the United 
States'' for purposes of the section.
    Section 800.301. A few points pertaining to joint venture 
transactions have been clarified in this section. First, a joint venture 
transaction is subject to section 721 only if an existing, identifiable 
business in the United States is contributed to the venture. A joint 
venture transaction in which the U.S. contribution is a company founded 
for the purposes of the transaction would not be subject to section 721. 
Moreover, even where an identifiable business has been contributed to 
the venture, the transaction is not subject to section 721 unless the 
foreign party would control the venture. Therefore, joint venture 
transactions in which control is equally shared by the U.S. partner and 
the foreign partner, i.e., where each party has a veto power over all 
the decisions of the joint venture, would not be subject to section 721. 
It is important to note, however, that this rule does not apply to other 
forms of business organization, such as when a foreign person acquires 
50 percent of the stock of an existing U.S. company. In such cases, the 
Committee may, depending on the other facts surrounding the transaction, 
conclude that the stock acquisition confers control on the foreign 
person.
    Section 800.302. Subsection (i) has been added to Sec. 800.302 as a 
corollary to section 301(b)(1), which provides that proposed or 
completed acquisitions by or with foreign persons which could or do 
result in foreign control of a U.S. person would be subject to section 
721. Subsection (i) of Sec. 800.302 provides that an acquisition (1) 
that does not involve the acquisition of control of (2) a person engaged 
in interstate commerce in the United States (i.e., a U.S. person) would 
not be subject to section 721. Two examples are provided to illustrate 
the two components of this provision. First, with respect to the 
acquisition of control, when a foreign person acquires an interest, such 
as stock, in a U.S. person, but that interest is insufficient to confer 
control, the acquisition is not subject to section 721. The Committee's 
options for handling a notice of such a transaction are set out in 
Sec. 800.403 of the regulations.
    Second, with respect to the component pertaining to being engaged in 
interstate commerce in the United States, Example 2 is intended to 
illustrate that the acquisition of a business that is essentially a non-
operational shell--i.e., having no employees, plants, equipment, or 
subsidiaries in the United States--would not satisfy this component and 
would therefore not be an acquisition subject to section 721.
    Section 800.303. This section has been added to the regulations to 
clarify the Committee's treatment of lending transactions. As explained 
under Sec. 800.302 above, the acquisition of a security interest by a 
foreign lender in a lending transaction does not, without control, 
subject a transaction to section 721. Section 800.303 provides that the 
Committee will not accept notices of such transactions. However, the 
Committee will accept notice of such transactions where, because of 
actual or imminent default or other condition, the foreign lender is 
likely to obtain control of the U.S. person. In general, the Committee 
will accept the parties' view of the imminence of default, recognizing 
that in some cases waiting too long before filing notice could affect 
the lender's recourse to certain remedies, or the willingness of the 
borrower to cooperate fully in the preparation of a filing.
    Some commenters argued that if the Committee does not accept notices 
of lending transactions until actual or imminent default, the lender 
will never have adequate assurance of the value of its security 
interest, which may eventually discourage foreign lenders from entering 
into financing transactions that may be subject to section 721. Some 
argued that the acquisition of stock or assets as a result of a default 
should be exempt from section 721, because it is essentially similar to 
an acquisition pursuant to an insurance contract made in the ordinary 
course of business, which is exempt under Sec. 800.302(g). The Committee 
does not find it appropriate to exempt the acquisition of a U.S. person 
that results from a borrower's default. However, to help alleviate the 
lenders' concerns in such circumstances, the Committee will take into 
account steps the lender takes to transfer day-to-day control over the 
U.S. person to U.S. nationals, pending final sale of the U.S. person. 
For example, in appropriate cases, the Committee could determine that 
the lender does not control a company acquired through default when it 
appoints a trustee to run the company and commits to sell it within a 
specified reasonable period of time.
    Section 800.303 also contains a special provision--subsection (b)--
for foreign banks participating in loan syndications. In view of the 
limitations on control of the borrower by any one bank that are often 
inherent in the

[[Page 1048]]

structure of a syndicate of banks in a loan participation, the Committee 
will deem any foreign lender in a syndicate not to have control for 
purposes of section 721 where such lender needs the consent of the 
majority of the U.S. participants to take action, or does not have a 
lead role in the syndicate and is subject to a special provision 
limiting its influence, ownership or control over the borrower.
    Section 800.401. This section contains a new provision with respect 
to non-notified transactions. No agency notice can be made with respect 
to such a transaction more than three years after the date it was 
concluded unless the Chairman of the Committee, in consultation with 
other members of the Committee, requests an investigation. This 
provision was added to assuage public concern that non-notified 
transactions are indefinitely subject to divestment by the President. 
The President's powers under section 721 are not affected by this 
provision.
    Section 800.402. Until now, the Committee has been willing to accept 
notices of transactions from just one of the parties to a transaction, 
recognizing that in some cases one of the parties alone will be able to 
provide answers and materials responsive to the questions posed in 
Sec. 800.402. Although the Committee will continue to accept joint 
notices prepared by just one party to a transaction that give 
information with respect to all the parties, the final regulations 
require all the parties to sign such a filing, thereby indicating to the 
Committee that each party is satisfied that the information in the 
filing pertaining to it is accurate and complete.
    With respect to filings submitted by a party independently of the 
other parties, several points are worth noting. First, a minor wording 
change has been made in paragraph (1) of subsection (b) of this section 
for purposes of clarity: ``Such information'' has been replaced by ``the 
information set out in this section.'' Although the phrase in that 
paragraph, ``to the extent known or reasonably available to it,'' 
remains unchanged from the proposed regulations, it merits discussion 
here in order to remove any uncertainty. When a party giving notice is 
unable to answer fully a question pertaining to the other party, it is 
not excused by the words ``to the extent known or reasonably available 
to it'' from submitting a complete and accurate filing, as has evidently 
been assumed by some parties. The Committee expects that in such a case 
either the party giving notice will obtain the assistance of the other 
party or parties, or that the latter independently will make a filing to 
the Committee, supplying the relevant information.
    In any case, the Committee will delay beginning the initial thirty-
day review period until the filing is complete with respect to both 
parties. Subsection (b) makes clear that the Staff Chairman of the 
Committee, when necessary, will contact directly the party or parties 
that did not file the notice and request that information responsive to 
Sec. 800.402 be filed within seven days of receipt of the request.
    A new provision has been added to subsection (c), requesting parties 
to submit a summary of the transaction. The Committee requests that the 
party(ies) that give notice be as clear and concise as possible. A 
readily understandable summary will expedite the Committee's work.
    Paragraph (3) of subsection (c) has also been modified to lengthen 
the period of time from three to five years for which contracts 
involving classified information should be described in a filing. As for 
contracts with the Department of Defense or any other agency of the U.S. 
Government with national defense responsibilities (such as the 
Department of Energy or the Nuclear Regulatory Commission), which 
contracts do not involve classified information, parties should continue 
to provide information for the past three years only.
    Section 800.403. This new section sets out the Committee's options 
for handling certain voluntary notices; most of these points have been 
addressed in the preceding discussion. The Committee will delay 
acceptance of a notice that does not comply with Sec. 800.402. It 
reserves the right to reject a voluntary notice at any time before 
action by the Committee or the President has been concluded, if there 
has been a material change in the notified transaction.
    As provided in Sec. 800.403(a)(4), the Committee will also inform 
the party submitting a voluntary notice if it decides not to undertake a 
substantive review of a transaction because it has determined that the 
notified transaction is not subject to section 721. For example, where 
the Committee determines that a notified transaction will not result in 
foreign control, the Committee would inform the parties of the nature of 
its determination, (e.g., no foreign control) and advise them to 
consider filing at a later date should an acquisition of control be 
contemplated.
    Section 800.404. A technical wording change has been made to this 
section (which was numbered Sec. 800.403 under the proposed 
regulations). The words ``has been accepted'' in the first sentence of 
that section replace ``is received'' to underscore that the 30-day 
review period does not begin until the Chair has determined that the 
voluntary notice complies with the requirements of Sec. 800.402. Further 
technical changes were made to subsection (a) to reflect changes made in 
Sec. 800.401 concerning agency notice.
    Section 800.501. Subsection (b) has been added to this section to 
make explicit a practice the Committee has been following since it began 
receiving notices under section 721, i.e., inviting the parties to 
certain

[[Page 1049]]

notified transactions to meet with the Committee. The Staff Chairman, at 
his discretion, may invite the parties to a meeting to clarify certain 
issues with respect to the filing; such a meeting may occur either 
during the 30-day review period or during the investigation. When the 
parties involved in investigations request a meeting with the Committee, 
the request is ordinarily granted.
    Section 800.601. A number of commenters expressed concern that the 
finality of Committee or Presidential action under section 721 is called 
into question if there is a right to reopen consideration of a case on 
the basis of material omissions or material misstatements. This section 
has been expanded in an attempt to allay some of those concerns. 
Subsection (f) has been added to clarify the matters the Committee 
considers ``material'': These are confined to information requested by 
Sec. 800.402 of the regulations; information requested by the Committee 
during the course of an initial review, an investigation, or the 
Presidential determination period; or information provided by the 
party(ies) sua sponte. However, the Committee will generally not find 
information to be ``material'' if it concerns purely commercial matters 
having no bearing on national security, such as the price of stock.

                          Drafting Information

    The principal author of this document is the Office of the Assistant 
General Counsel (International Affairs). However, personnel from other 
offices at the Treasury Department and from other agencies that are 
members of the Committee participated extensively in its development.

[56 FR 58780, Nov. 21, 1991. Redesignated and amended at 59 FR 27180, 
May 25, 1994]

      Appendix B to Part 800--Preamble to Regulations on Mergers, 
 Acquisitions, and Takeovers by Foreign Persons (Published May 25, 1994)

    Note: For the convenience of the reader, this appendix contains the 
text of the preamble to the final rules amending the regulations on 
mergers, acquisitions, and takeovers by foreign persons beginning at the 
heading ``Discussion of the Final Rule'' and ending before ``List of 
Subjects in 31 CFR Part 800'' (59 FR 27178, May 25, 1994).

                      Discussion of the Final Rule

    Section 837(a) of the Defense Authorization Act creates for the 
first time a mandatory investigation provision under Exon-Florio. There 
are three points worth noting about this provision. First, this 
provision is limited in application to certain types of acquisitions. 
Specifically, the acquirer in question must be a foreign government 
controlled entity, or an entity acting on behalf of a foreign 
government. Furthermore, the acquisition must be one which ``could 
result in control of a person engaged in interstate commerce in the 
United States that could affect the national security of the United 
States'' (emphasis added). Thus, even where the other specified criteria 
are met, this provision does not mandate an investigation for cases that 
could not ``affect the national security of the United States.''
    Second, for purposes of determining whether the acquisition results 
in foreign government control, CFIUS is applying the same functional 
test for control as provided in Sec. 800.204.
    Third, in contrast to the criterion for Presidential action under 
Exon-Florio, i.e., that the foreign party acquiring control might take 
action that ``threatens to impair the national security,'' the criterion 
for undertaking an investigation of transactions involving government 
controlled entities is that there could be an effect on the national 
security.
    The term ``foreign government'' has been broadly defined for 
purposes of these regulations to include any government or body 
exercising governmental functions, and includes but is not limited to 
national as well as various regional and local levels of government. It 
is important to note that the definition is not limited to the 
particular levels of government that are specified in the regulation, 
and that other governmental bodies, including supra-national entities 
such as the European Union (including its component parts), are covered 
by this regulation.
    For purposes of the mandatory investigation provision, the 
regulations define the term ``engage in'' as used in the phrase ``seeks 
to engage in any merger, acquisition or takeover * * *'' to mean ``seeks 
to acquire control through.'' The purpose of this regulation is to 
clarify that the mandatory investigation provision would not be 
triggered in cases where a foreign government controlled entity's 
participation in an acquisition is solely for the purpose of investment, 
as defined in Sec. 800.217 of the regulations. The Committee believes 
that this reading is supported by the legislative history, and 
particularly floor statements made by members of Congress who sponsored 
this particular amendment. See, e.g., Cong. Rec., Sept. 18, 1992, pages 
S 14050 through 14053 (comments of Senators Exon, Sarbanes and Riegle); 
and Cong. Rec. Oct. 3, 1992, page H 10986 (comments of Representative 
Collins). Subparagraph 800.402(c)(5)(iii) has been changed in the final 
regulations by the addition of the words ``for example'' to clarify that 
an agency or representative role are examples of ways in which a foreign 
person can act on behalf of a foreign government, but are not the only 
ways in which such a relationship could be conducted.

[[Page 1050]]

                          Drafting Information

    The principal author of this document is the Office of the Assistant 
General Counsel (International Affairs). However, personnel from other 
offices of the Treasury Department and from other agencies that are 
members of the Committee participated extensively in its development.

[59 FR 27180, May 25, 1994]

[[Page 1051]]



   CHAPTER IX--FEDERAL CLAIMS COLLECTION STANDARDS (DEPARTMENT OF THE 
                    TREASURY--DEPARTMENT OF JUSTICE)




  --------------------------------------------------------------------
Part                                                                Page
900             Scope of standards..........................        1053
901             Standards for the administrative collection 
                    of claims...............................        1055
902             Standards for the compromise of claims......        1064
903             Standards for suspending or terminating 
                    collection activity.....................        1066
904             Referrals to the Department of Justice......        1068

[[Page 1053]]



PART 900--SCOPE OF STANDARDS--Table of Contents




Sec.
900.1  Prescription of standards.
900.2  Definitions and construction.
900.3  Antitrust, fraud, and tax and interagency claims excluded.
900.4  Compromise, waiver, or disposition under other statutes not 
          precluded.
900.5  Form of payment.
900.6  Subdivision of claims not authorized.
900.7  Required administrative proceedings.
900.8  No private rights created.

    Authority: 31 U.S.C. 3711.

    Source: 65 FR 70395, Nov. 22, 2000, unless otherwise noted.



Sec. 900.1  Prescription of standards.

    (a) The Secretary of the Treasury and the Attorney General of the 
United States are issuing the regulations in parts 900-904 of this 
chapter under the authority contained in 31 U.S.C. 3711(d)(2). The 
regulations in this chapter prescribe standards for Federal agency use 
in the administrative collection, offset, compromise, and the suspension 
or termination of collection activity for civil claims for money, funds, 
or property, as defined by 31 U.S.C. 3701(b), unless specific Federal 
agency statutes or regulations apply to such activities or, as provided 
for by Title 11 of the United States Code, when the claims involve 
bankruptcy. Federal agencies include agencies of the executive, 
legislative, and judicial branches of the Government, including 
Government corporations. The regulations in this chapter also prescribe 
standards for referring debts to the Department of Justice for 
litigation. Additional guidance is contained in the Office of Management 
and Budget's Circular A-129 (Revised), ``Policies for Federal Credit 
Programs and Non-Tax Receivables,'' the Department of the Treasury's 
``Managing Federal Receivables,'' and other publications concerning debt 
collection and debt management. These publications are available from 
the Debt Management Services, Financial Management Service, Department 
of the Treasury, 401 14th Street SW., Room 151, Washington, DC 20227.
    (b) Additional rules governing centralized administrative offset and 
the transfer of delinquent debt to the Department of the Treasury 
(Treasury) or Treasury-designated debt collection centers for collection 
(cross-servicing) under the Debt Collection Improvement Act of 1996, 
Public Law 104-134, 110 Stat. 1321, 1358 (April 26, 1996), are issued in 
separate regulations by Treasury. Rules governing the use of certain 
debt collection tools created under the Debt Collection Improvement Act 
of 1996, such as administrative wage garnishment, also are issued in 
separate regulations by Treasury. See generally 31 CFR part 285.
    (c) Agencies are not limited to the remedies contained in parts 900-
904 of this chapter and are encouraged to use all authorized remedies, 
including alternative dispute resolution and arbitration, to collect 
civil claims, to the extent that such remedies are not inconsistent with 
the Federal Claims Collection Act, as amended, Public Law 89-508, 80 
Stat. 308 (July 19, 1966), the Debt Collection Act of 1982, Public Law 
97-365, 96 Stat. 1749 (October 25, 1982), the Debt Collection 
Improvement Act of 1996, or other relevant statutes. The regulations in 
this chapter are not intended to impair agencies' common law rights to 
collect debts.
    (d) Standards and policies regarding the classification of debt for 
accounting purposes (for example, write off of uncollectible debt) are 
contained in the Office of Management and Budget's Circular A-129 
(Revised), ``Policies for Federal Credit Programs and Non-Tax 
Receivables.''



Sec. 900.2  Definitions and construction.

    (a) For the purposes of the standards in this chapter, the terms 
``claim'' and ``debt'' are synonymous and interchangeable. They refer to 
an amount of money, funds, or property that has been determined by an 
agency official to be due the United States from any person, 
organization, or entity, except another Federal agency. For the purposes 
of administrative offset under 31 U.S.C. 3716, the terms ``claim'' and 
``debt'' include an amount of money, funds, or property owed by a person 
to a State (including past-due support being enforced by a State), the 
District of Columbia, American Samoa, Guam, the United States Virgin 
Islands, the

[[Page 1054]]

Commonwealth of the Northern Mariana Islands, or the Commonwealth of 
Puerto Rico.
    (b) A debt is ``delinquent'' if it has not been paid by the date 
specified in the agency's initial written demand for payment or 
applicable agreement or instrument (including a post-delinquency payment 
agreement), unless other satisfactory payment arrangements have been 
made.
    (c) In parts 900-904 of this chapter, words in the plural form shall 
include the singular and vice versa, and words signifying the masculine 
gender shall include the feminine and vice versa. The terms ``includes'' 
and ``including'' do not exclude matters not listed but do include 
matters that are in the same general class.
    (d) Recoupment is a special method for adjusting debts arising under 
the same transaction or occurrence. For example, obligations arising 
under the same contract generally are subject to recoupment.
    (e) For purposes of the standards in this chapter, unless otherwise 
stated, ``Secretary'' means the Secretary of the Treasury or the 
Secretary's delegate.



Sec. 900.3  Antitrust, fraud, and tax and interagency claims excluded.

    (a) The standards in parts 900-904 of this chapter relating to 
compromise, suspension, and termination of collection activity do not 
apply to any debt based in whole or in part on conduct in violation of 
the antitrust laws or to any debt involving fraud, the presentation of a 
false claim, or misrepresentation on the part of the debtor or any party 
having an interest in the claim. Only the Department of Justice has the 
authority to compromise, suspend, or terminate collection activity on 
such claims. The standards in parts 900-904 of this chapter relating to 
the administrative collection of claims do apply, but only to the extent 
authorized by the Department of Justice in a particular case. Upon 
identification of a claim based in whole or in part on conduct in 
violation of the antitrust laws or any claim involving fraud, the 
presentation of a false claim, or misrepresentation on the part of the 
debtor or any party having an interest in the claim, agencies shall 
promptly refer the case to the Department of Justice for action. At its 
discretion, the Department of Justice may return the claim to the 
forwarding agency for further handling in accordance with the standards 
in parts 900-904 of this chapter.
    (b) Parts 900-904 of this chapter do not apply to tax debts.
    (c) Parts 900-904 of this chapter do not apply to claims between 
Federal agencies. Federal agencies should attempt to resolve interagency 
claims by negotiation in accordance with Executive Order 12146 (3 CFR, 
1980 Comp., pp. 409-412).



Sec. 900.4  Compromise, waiver, or disposition under other statutes not precluded.

    Nothing in parts 900-904 of this chapter precludes agency 
disposition of any claim under statutes and implementing regulations 
other than subchapter II of chapter 37 of Title 31 of the United States 
Code (Claims of the United States Government) and the standards in this 
chapter. See, e.g., the Federal Medical Care Recovery Act, Public Law 
87-693, 76 Stat. 593 (September 25, 1962) (codified at 42 U.S.C. 2651 et 
seq.), and applicable regulations, 28 CFR part 43. In such cases, the 
laws and regulations that are specifically applicable to claims 
collection activities of a particular agency generally take precedence 
over parts 900-904 of this chapter.



Sec. 900.5  Form of payment.

    Claims may be paid in the form of money or, when a contractual basis 
exists, the Government may demand the return of specific property or the 
performance of specific services.



Sec. 900.6  Subdivision of claims not authorized.

    Debts may not be subdivided to avoid the monetary ceiling 
established by 31 U.S.C. 3711(a)(2). A debtor's liability arising from a 
particular transaction or contract shall be considered a single debt in 
determining whether the debt is one of less than $100,000 (excluding 
interest, penalties, and administrative costs) or such higher amount as 
the Attorney General shall from time to time prescribe for purposes of 
compromise

[[Page 1055]]

or suspension or termination of collection activity.



Sec. 900.7  Required administrative proceedings.

    Agencies are not required to omit, foreclose, or duplicate 
administrative proceedings required by contract or other laws or 
regulations.



Sec. 900.8  No private rights created.

    The standards in this chapter do not create any right or benefit, 
substantive or procedural, enforceable at law or in equity by a party 
against the United States, its agencies, its officers, or any other 
person, nor shall the failure of an agency to comply with any of the 
provisions of parts 900-904 of this chapter be available to any debtor 
as a defense.



PART 901--STANDARDS FOR THE ADMINISTRATIVE COLLECTION OF CLAIMS--Table of Contents




Sec.
901.1  Aggressive agency collection activity.
901.2  Demand for payment.
901.3  Collection by administrative offset.
901.4  Reporting debts.
901.5  Contracting with private collection contractors and with entities 
          that locate and recover unclaimed assets.
901.6  Suspension or revocation of eligibility for loans and loan 
          guaranties, licenses, permits, or privileges.
901.7  Liquidation of collateral.
901.8  Collection in installments.
901.9  Interest, penalties, and administrative costs.
901.10  Analysis of costs.
901.11  Use and disclosure of mailing addresses.
901.12  Exemptions.

    Authority: 31 U.S.C. 3701, 3711, 3716, 3717, 3718, and 3720B.

    Source: 65 FR 70396, Nov. 22, 2000, unless otherwise noted.



Sec. 901.1  Aggressive agency collection activity.

    (a) Federal agencies shall aggressively collect all debts arising 
out of activities of, or referred or transferred for collection services 
to, that agency. Collection activities shall be undertaken promptly with 
follow-up action taken as necessary. Nothing contained in parts 900-904 
of this chapter requires the Department of Justice, Treasury, or other 
Treasury-designated debt collection centers, to duplicate collection 
activities previously undertaken by other agencies or to perform 
collection activities that other agencies should have undertaken.
    (b) Debts referred or transferred to Treasury, or Treasury-
designated debt collection centers under the authority of 31 U.S.C. 
3711(g), shall be serviced, collected, or compromised, or the collection 
action will be suspended or terminated, in accordance with the statutory 
requirements and authorities applicable to the collection of such debts.
    (c) Agencies shall cooperate with one another in their debt 
collection activities.
    (d) Agencies should consider referring debts that are less than 180 
days delinquent to Treasury or to Treasury-designated ``debt collection 
centers'' to accomplish efficient, cost effective debt collection. 
Treasury is a debt collection center, is authorized to designate other 
Federal agencies as debt collection centers based on their performance 
in collecting delinquent debts, and may withdraw such designations. 
Referrals to debt collection centers shall be at the discretion of, and 
for a time period acceptable to, the Secretary. Referrals may be for 
servicing, collection, compromise, suspension, or termination of 
collection action.
    (e) Agencies shall transfer to the Secretary any debt that has been 
delinquent for a period of 180 days or more so that the Secretary may 
take appropriate action to collect the debt or terminate collection 
action. See 31 CFR 285.12 (Transfer of Debts to Treasury for 
Collection). This requirement does not apply to any debt that:
    (1) Is in litigation or foreclosure;
    (2) Will be disposed of under an approved asset sale program;
    (3) Has been referred to a private collection contractor for a 
period of time acceptable to the Secretary;
    (4) Is at a debt collection center for a period of time acceptable 
to the Secretary (see paragraph (d) of this section);
    (5) Will be collected under internal offset procedures within three 
years after the debt first became delinquent; or

[[Page 1056]]

    (6) Is exempt from this requirement based on a determination by the 
Secretary that exemption for a certain class of debt is in the best 
interest of the United States. Agencies may request that the Secretary 
exempt specific classes of debts.
    (f) Agencies operating Treasury-designated debt collection centers 
are authorized to charge a fee for services rendered regarding referred 
or transferred debts. The fee may be paid out of amounts collected and 
may be added to the debt as an administrative cost (see Sec. 901.10).



Sec. 901.2  Demand for payment.

    (a) Written demand as described in paragraph (b) of this section 
shall be made promptly upon a debtor of the United States in terms that 
inform the debtor of the consequences of failing to cooperate with the 
agency to resolve the debt. The specific content, timing, and number of 
demand letters shall depend upon the type and amount of the debt and the 
debtor's response, if any, to the agency's letters or telephone calls. 
Generally, one demand letter should suffice. In determining the timing 
of the demand letter(s), agencies should give due regard to the need to 
refer debts promptly to the Department of Justice for litigation, in 
accordance with Sec. 904.1 of this chapter or otherwise. When necessary 
to protect the Government's interest (for example, to prevent the 
running of a statute of limitations), written demand may be preceded by 
other appropriate actions under parts 900-904 of this chapter, including 
immediate referral for litigation.
    (b) Demand letters shall inform the debtor of:
    (1) The basis for the indebtedness and the rights, if any, the 
debtor may have to seek review within the agency;
    (2) The applicable standards for imposing any interest, penalties, 
or administrative costs;
    (3) The date by which payment should be made to avoid late charges 
(i.e. interest, penalties, and administrative costs) and enforced 
collection, which generally should not be more than 30 days from the 
date that the demand letter is mailed or hand-delivered; and
    (4) The name, address, and phone number of a contact person or 
office within the agency.
    (c) Agencies should exercise care to ensure that demand letters are 
mailed or hand-delivered on the same day that they are dated. There is 
no prescribed format for demand letters. Agencies should utilize demand 
letters and procedures that will lead to the earliest practicable 
determination of whether the debt can be resolved administratively or 
must be referred for litigation.
    (d) Agencies should include in demand letters such items as the 
agency's willingness to discuss alternative methods of payment; its 
policies with respect to the use of credit bureaus, debt collection 
centers, and collection agencies; the agency's remedies to enforce 
payment of the debt (including assessment of interest, administrative 
costs and penalties, administrative garnishment, the use of collection 
agencies, Federal salary offset, tax refund offset, administrative 
offset, and litigation); the requirement that any debt delinquent for 
more than 180 days be transferred to the Department of the Treasury for 
collection; and, depending on applicable statutory authority, the 
debtor's entitlement to consideration of a waiver.
    (e) Agencies should respond promptly to communications from debtors, 
within 30 days whenever feasible, and should advise debtors who dispute 
debts to furnish available evidence to support their contentions.
    (f) Prior to the initiation of the demand process or at any time 
during or after completion of the demand process, if an agency 
determines to pursue, or is required to pursue, offset, the procedures 
applicable to offset should be followed (see Sec. 901.3). The 
availability of funds or money for debt satisfaction by offset and the 
agency's determination to pursue collection by offset shall release the 
agency from the necessity of further compliance with paragraphs (a), 
(b), (c), and (d) of this section.
    (g) Prior to referring a debt for litigation, agencies should advise 
each person determined to be liable for the debt that, unless the debt 
can be collected administratively, litigation may be initiated. This 
notification should

[[Page 1057]]

comply with Executive Order 12988 (3 CFR, 1996 Comp., pp. 157-163) and 
may be given as part of a demand letter under paragraph (b) of this 
section or in a separate document. Litigation counsel for the Government 
should be advised that this notice has been given.
    (h) When an agency learns that a bankruptcy petition has been filed 
with respect to a debtor, before proceeding with further collection 
action, the agency should immediately seek legal advice from its agency 
counsel concerning the impact of the Bankruptcy Code on any pending or 
contemplated collection activities. Unless the agency determines that 
the automatic stay imposed at the time of filing pursuant to 11 U.S.C. 
362 has been lifted or is no longer in effect, in most cases collection 
activity against the debtor should stop immediately.
    (1) After seeking legal advice, a proof of claim should be filed in 
most cases with the bankruptcy court or the Trustee. Agencies should 
refer to the provisions of 11 U.S.C. 106 relating to the consequences on 
sovereign immunity of filing a proof of claim.
    (2) If the agency is a secured creditor, it may seek relief from the 
automatic stay regarding its security, subject to the provisions and 
requirements of 11 U.S.C. 362.
    (3) Offset is stayed in most cases by the automatic stay. However, 
agencies should seek legal advice from their agency counsel to determine 
whether their payments to the debtor and payments of other agencies 
available for offset may be frozen by the agency until relief from the 
automatic stay can be obtained from the bankruptcy court. Agencies also 
should seek legal advice from their agency counsel to determine whether 
recoupment is available.



Sec. 901.3  Collection by administrative offset.

    (a) Scope. (1) The term ``administrative offset'' has the meaning 
provided in 31 U.S.C. 3701(a)(1).
    (2) This section does not apply to:
    (i) Debts arising under the Social Security Act, except as provided 
in 42 U.S.C. 404;
    (ii) Payments made under the Social Security Act, except as provided 
for in 31 U.S.C. 3716(c) (see 31 CFR 285.4, Federal Benefit Offset);
    (iii) Debts arising under, or payments made under, the Internal 
Revenue Code (see 31 CFR 285.2, Tax Refund Offset) or the tariff laws of 
the United States;
    (iv) Offsets against Federal salaries to the extent these standards 
are inconsistent with regulations published to implement such offsets 
under 5 U.S.C. 5514 and 31 U.S.C. 3716 (see 5 CFR part 550, subpart K, 
and 31 CFR 285.7, Federal Salary Offset);
    (v) Offsets under 31 U.S.C. 3728 against a judgment obtained by a 
debtor against the United States;
    (vi) Offsets or recoupments under common law, State law, or Federal 
statutes specifically prohibiting offsets or recoupments of particular 
types of debts; or
    (vii) Offsets in the course of judicial proceedings, including 
bankruptcy.
    (3) Unless otherwise provided for by contract or law, debts or 
payments that are not subject to administrative offset under 31 U.S.C. 
3716 may be collected by administrative offset under the common law or 
other applicable statutory authority.
    (4) Unless otherwise provided by law, administrative offset of 
payments under the authority of 31 U.S.C. 3716 to collect a debt may not 
be conducted more than 10 years after the Government's right to collect 
the debt first accrued, unless facts material to the Government's right 
to collect the debt were not known and could not reasonably have been 
known by the official or officials of the Government who were charged 
with the responsibility to discover and collect such debts. This 
limitation does not apply to debts reduced to a judgment.
    (5) In bankruptcy cases, agencies should seek legal advice from 
their agency counsel concerning the impact of the Bankruptcy Code, 
particularly 11 U.S.C. 106, 362, and 553, on pending or contemplated 
collections by offset.
    (b) Mandatory centralized administrative offset. (1) Creditor 
agencies are required to refer past due, legally enforceable nontax 
debts which are over 180 days delinquent to the Secretary for collection 
by centralized administrative offset. Debts which are less than 180 days 
delinquent also may be

[[Page 1058]]

referred to the Secretary for this purpose. See Sec. 901.3(b)(5) for 
debt certification requirements.
    (2) The names and taxpayer identifying numbers (TINs) of debtors who 
owe debts referred to the Secretary as described in paragraph (b)(1) of 
this section shall be compared to the names and TINs on payments to be 
made by Federal disbursing officials. Federal disbursing officials 
include disbursing officials of Treasury, the Department of Defense, the 
United States Postal Service, other Government corporations, and 
disbursing officials of the United States designated by the Secretary. 
When the name and TIN of a debtor match the name and TIN of a payee and 
all other requirements for offset have been met, the payment will be 
offset to satisfy the debt.
    (3) Federal disbursing officials will notify the debtor/payee in 
writing that an offset has occurred to satisfy, in part or in full, a 
past due, legally enforceable delinquent debt. The notice shall include 
a description of the type and amount of the payment from which the 
offset was taken, the amount of offset that was taken, the identity of 
the creditor agency requesting the offset, and a contact point within 
the creditor agency who will respond to questions regarding the offset.
    (4)(i) Before referring a delinquent debt to the Secretary for 
administrative offset, agencies must have prescribed administrative 
offset regulations consistent with this section or have adopted this 
section without change by cross-reference.
    (ii) Such regulations shall provide that offsets may be initiated 
only after the debtor:
    (A) Has been sent written notice of the type and amount of the debt, 
the intention of the agency to use administrative offset to collect the 
debt, and an explanation of the debtor's rights under 31 U.S.C. 3716; 
and
    (B) The debtor has been given:
    (1) The opportunity to inspect and copy agency records related to 
the debt;
    (2) The opportunity for a review within the agency of the 
determination of indebtedness; and
    (3) The opportunity to make a written agreement to repay the debt.
    (iii) Agency regulations may provide for the omission of the 
procedures set forth in paragraph (a)(4)(ii) of this section when:
    (A) The offset is in the nature of a recoupment;
    (B) The debt arises under a contract as set forth in Cecile 
Industries, Inc. v. Cheney, 995 F.2d 1052 (Fed. Cir. 1993) (notice and 
other procedural protections set forth in 31 U.S.C. 3716(a) do not 
supplant or restrict established procedures for contractual offsets 
accommodated by the Contracts Disputes Act); or
    (C) In the case of non-centralized administrative offsets conducted 
under paragraph (c) of this section, the agency first learns of the 
existence of the amount owed by the debtor when there is insufficient 
time before payment would be made to the debtor/payee to allow for prior 
notice and an opportunity for review. When prior notice and an 
opportunity for review are omitted, the agency shall give the debtor 
such notice and an opportunity for review as soon as practicable and 
shall promptly refund any money ultimately found not to have been owed 
to the Government.
    (iv) When an agency previously has given a debtor any of the 
required notice and review opportunities with respect to a particular 
debt (see, e.g., Sec. 901.2), the agency need not duplicate such notice 
and review opportunities before administrative offset may be initiated.
    (5) Agencies referring delinquent debts to the Secretary must 
certify, in a form acceptable to the Secretary, that:
    (i) The debt(s) is (are) past due and legally enforceable; and
    (ii) The agency has complied with all due process requirements under 
31 U.S.C. 3716(a) and the agency's regulations.
    (6) Payments that are prohibited by law from being offset are exempt 
from centralized administrative offset. The Secretary shall exempt 
payments under means-tested programs from centralized administrative 
offset when requested in writing by the head of the payment certifying 
or authorizing agency. Also, the Secretary may exempt other classes of 
payments from

[[Page 1059]]

centralized offset upon the written request of the head of the payment 
certifying or authorizing agency.
    (7) Benefit payments made under the Social Security Act (42 U.S.C. 
301 et seq.), part B of the Black Lung Benefits Act (30 U.S.C. 921 et 
seq.), and any law administered by the Railroad Retirement Board (other 
than tier 2 benefits), may be offset only in accordance with Treasury 
regulations, issued in consultation with the Social Security 
Administration, the Railroad Retirement Board, and the Office of 
Management and Budget. See 31 CFR 285.4.
    (8) In accordance with 31 U.S.C. 3716(f), the Secretary may waive 
the provisions of the Computer Matching and Privacy Protection Act of 
1988 concerning matching agreements and post-match notification and 
verification (5 U.S.C. 552a(o) and (p)) for centralized administrative 
offset upon receipt of a certification from a creditor agency that the 
due process requirements enumerated in 31 U.S.C. 3716(a) have been met. 
The certification of a debt in accordance with paragraph (b)(5) of this 
section will satisfy this requirement. If such a waiver is granted, only 
the Data Integrity Board of the Department of the Treasury is required 
to oversee any matching activities, in accordance with 31 U.S.C. 
3716(g). This waiver authority does not apply to offsets conducted under 
paragraphs (c) and (d) of this section.
    (c) Non-centralized administrative offset. (1) Generally, non-
centralized administrative offsets are ad hoc case-by-case offsets that 
an agency conducts, at the agency's discretion, internally or in 
cooperation with the agency certifying or authorizing payments to the 
debtor. Unless otherwise prohibited by law, when centralized 
administrative offset is not available or appropriate, past due, legally 
enforceable nontax delinquent debts may be collected through non-
centralized administrative offset. In these cases, a creditor agency may 
make a request directly to a payment authorizing agency to offset a 
payment due a debtor to collect a delinquent debt. For example, it may 
be appropriate for a creditor agency to request that the Office of 
Personnel Management (OPM) offset a Federal employee's lump sum payment 
upon leaving Government service to satisfy an unpaid advance.
    (2) Before requesting a payment authorizing agency to conduct a non-
centralized administrative offset, agencies must adopt regulations 
providing that such offsets may occur only after:
    (i) The debtor has been provided due process as set forth in 
paragraph (b)(4) of this section; and
    (ii) The payment authorizing agency has received written 
certification from the creditor agency that the debtor owes the past 
due, legally enforceable delinquent debt in the amount stated, and that 
the creditor agency has fully complied with its regulations concerning 
administrative offset.
    (3) Payment authorizing agencies shall comply with offset requests 
by creditor agencies to collect debts owed to the United States, unless 
the offset would not be in the best interests of the United States with 
respect to the program of the payment authorizing agency, or would 
otherwise be contrary to law. Appropriate use should be made of the 
cooperative efforts of other agencies in effecting collection by 
administrative offset.
    (4) When collecting multiple debts by non-centralized administrative 
offset, agencies should apply the recovered amounts to those debts in 
accordance with the best interests of the United States, as determined 
by the facts and circumstances of the particular case, particularly the 
applicable statute of limitations.
    (d) Requests to OPM to offset a debtor's anticipated or future 
benefit payments under the Civil Service Retirement and Disability Fund. 
Upon providing OPM written certification that a debtor has been afforded 
the procedures provided in paragraph (b)(4) of this section, creditor 
agencies may request OPM to offset a debtor's anticipated or future 
benefit payments under the Civil Service Retirement and Disability Fund 
(Fund) in accordance with regulations codified at 5 CFR 831.1801-
831.1808. Upon receipt of such a request, OPM will identify and ``flag'' 
a debtor's account in anticipation of the time when the debtor requests, 
or becomes eligible to receive, payments from the Fund. This will 
satisfy any requirement that offset be initiated prior to the expiration 
of

[[Page 1060]]

the time limitations referenced in paragraph (a)(4) of this section.
    (e) Review requirements. (1) For purposes of this section, whenever 
an agency is required to afford a debtor a review within the agency, the 
agency shall provide the debtor with a reasonable opportunity for an 
oral hearing when the debtor requests reconsideration of the debt and 
the agency determines that the question of the indebtedness cannot be 
resolved by review of the documentary evidence, for example, when the 
validity of the debt turns on an issue of credibility or veracity.
    (2) Unless otherwise required by law, an oral hearing under this 
section is not required to be a formal evidentiary hearing, although the 
agency should carefully document all significant matters discussed at 
the hearing.
    (3) This section does not require an oral hearing with respect to 
debt collection systems in which a determination of indebtedness rarely 
involves issues of credibility or veracity and the agency has determined 
that review of the written record is ordinarily an adequate means to 
correct prior mistakes.
    (4) In those cases when an oral hearing is not required by this 
section, an agency shall accord the debtor a ``paper hearing,'' that is, 
a determination of the request for reconsideration based upon a review 
of the written record.



Sec. 901.4  Reporting debts.

    (a) Agencies shall develop and implement procedures for reporting 
delinquent debts to credit bureaus and other automated databases. 
Agencies also may develop procedures to report non-delinquent debts to 
credit bureaus. See 31 U.S.C. 3711(e).
    (1) In developing procedures for reporting debts to credit bureaus, 
agencies shall comply with the Bankruptcy Code and the Privacy Act of 
1974, 5 U.S.C. 552a, as amended. The provisions of the Privacy Act do 
not apply to credit bureaus.
    (2) Agency procedures for reporting delinquent consumer debts to 
credit bureaus shall be consistent with the due process and other 
requirements contained in 31 U.S.C. 3711(e). When an agency has given a 
debtor any of the required notice and review opportunities with respect 
to a particular debt, the agency need not duplicate such notice and 
review opportunities before reporting that delinquent consumer debt to 
credit bureaus.
    (b) Agencies should report delinquent debts to the Department of 
Housing and Urban Development's Credit Alert Interactive Voice Response 
System (CAIVRS). For information about the CAIVRS program, agencies 
should contact the Director of Information Resources Management Policy 
and Management Division, Office of Information Technology, Department of 
Housing and Urban Development, 451 7th Street, SW., Washington, DC 
20410.



Sec. 901.5  Contracting with private collection contractors and with entities that locate and recover unclaimed assets.

    (a) Subject to the provisions of paragraph (b) of this section, 
Federal agencies may contract with private collection contractors, as 
defined in 31 U.S.C. 3701(f), to recover delinquent debts provided that:
    (1) Agencies retain the authority to resolve disputes, compromise 
debts, suspend or terminate collection activity, and refer debts for 
litigation;
    (2) The private collection contractor is not allowed to offer the 
debtor, as an incentive for payment, the opportunity to pay the debt 
less the private collection contractor's fee unless the agency has 
granted such authority prior to the offer;
    (3) The contract provides that the private collection contractor is 
subject to the Privacy Act of 1974 to the extent specified in 5 U.S.C. 
552a(m), and to applicable Federal and state laws and regulations 
pertaining to debt collection practices, including but not limited to 
the Fair Debt Collection Practices Act, 15 U.S.C. 1692; and
    (4) The private collection contractor is required to account for all 
amounts collected.
    (b) Agencies shall use government-wide debt collection contracts to 
obtain debt collection services provided by private collection 
contractors. However, agencies may refer debts to private collection 
contractors pursuant to a contract between the agency and the private 
collection contractor only if

[[Page 1061]]

such debts are not subject to the requirement to transfer debts to 
Treasury for debt collection. See 31 U.S.C. 3711(g); 31 CFR 285.12(e).
    (c) Agencies may fund private collection contractor contracts in 
accordance with 31 U.S.C. 3718(d), or as otherwise permitted by law.
    (d) Agencies may enter into contracts for locating and recovering 
assets of the United States, such as unclaimed assets. Agencies must 
establish procedures that are acceptable to the Secretary before 
entering into contracts to recover assets of the United States held by a 
state government or a financial institution.
    (e) Agencies may enter into contracts for debtor asset and income 
search reports. In accordance with 31 U.S.C. 3718(d), such contracts may 
provide that the fee a contractor charges the agency for such services 
may be payable from the amounts recovered, unless otherwise prohibited 
by statute.



Sec. 901.6  Suspension or revocation of eligibility for loans and loan guaranties, licenses, permits, or privileges.

    (a) Unless waived by the head of the agency, agencies are not 
permitted to extend financial assistance in the form of a loan, loan 
guarantee, or loan insurance to any person delinquent on a nontax debt 
owed to a Federal agency. This prohibition does not apply to disaster 
loans. The authority to waive the application of this section may be 
delegated to the Chief Financial Officer and redelegated only to the 
Deputy Chief Financial Officer of the agency. Agencies may extend credit 
after the delinquency has been resolved. The Secretary may exempt 
classes of debts from this prohibition and has prescribed standards 
defining when a ``delinquency'' is ``resolved'' for purposes of this 
prohibition. See 31 CFR 285.13 (Barring Delinquent Debtors From 
Obtaining Federal Loans or Loan Insurance or Guarantees).
    (b) In non-bankruptcy cases, agencies seeking the collection of 
statutory penalties, forfeitures, or other types of claims should 
consider the suspension or revocation of licenses, permits, or other 
privileges for any inexcusable or willful failure of a debtor to pay 
such a debt in accordance with the agency's regulations or governing 
procedures. The debtor should be advised in the agency's written demand 
for payment of the agency's ability to suspend or revoke licenses, 
permits, or privileges. Any agency making, guaranteeing, insuring, 
acquiring, or participating in, loans should consider suspending or 
disqualifying any lender, contractor, or broker from doing further 
business with the agency or engaging in programs sponsored by the agency 
if such lender, contractor, or broker fails to pay its debts to the 
Government within a reasonable time or if such lender, contractor, or 
broker has been suspended, debarred, or disqualified from participation 
in a program or activity by another Federal agency. The failure of any 
surety to honor its obligations in accordance with 31 U.S.C. 9305 should 
be reported to the Treasury. The Treasury will forward to all interested 
agencies notification that a surety's certificate of authority to do 
business with the Government has been revoked by the Treasury.
    (c) The suspension or revocation of licenses, permits, or privileges 
also should extend to Federal programs or activities that are 
administered by the states on behalf of the Federal Government, to the 
extent that they affect the Federal Government's ability to collect 
money or funds owed by debtors. Therefore, states that manage Federal 
activities, pursuant to approval from the agencies, should ensure that 
appropriate steps are taken to safeguard against issuing licenses, 
permits, or privileges to debtors who fail to pay their debts to the 
Federal Government.
    (d) In bankruptcy cases, before advising the debtor of an agency's 
intention to suspend or revoke licenses, permits, or privileges, 
agencies should seek legal advice from their agency counsel concerning 
the impact of the Bankruptcy Code, particularly 11 U.S.C. 362 and 525, 
which may restrict such action.



Sec. 901.7  Liquidation of collateral.

    (a) Agencies should liquidate security or collateral through the 
exercise of a power of sale in the security instrument or a nonjudicial 
foreclosure, and apply the proceeds to the applicable debt(s), if the 
debtor fails to pay

[[Page 1062]]

the debt(s) within a reasonable time after demand and if such action is 
in the best interest of the United States. Collection from other 
sources, including liquidation of security or collateral, is not a 
prerequisite to requiring payment by a surety, insurer, or guarantor 
unless such action is expressly required by statute or contract.
    (b) When an agency learns that a bankruptcy petition has been filed 
with respect to a debtor, the agency should seek legal advice from its 
agency counsel concerning the impact of the Bankruptcy Code, including, 
but not limited to, 11 U.S.C. 362, to determine the applicability of the 
automatic stay and the procedures for obtaining relief from such stay 
prior to proceeding under paragraph (a) of this section.



Sec. 901.8  Collection in installments.

    (a) Whenever feasible, agencies shall collect the total amount of a 
debt in one lump sum. If a debtor is financially unable to pay a debt in 
one lump sum, agencies may accept payment in regular installments. 
Agencies should obtain financial statements from debtors who represent 
that they are unable to pay in one lump sum and independently verify 
such representations whenever possible (see Sec. 902.2(g) of this 
chapter). Agencies that agree to accept payments in regular installments 
should obtain a legally enforceable written agreement from the debtor 
that specifies all of the terms of the arrangement and that contains a 
provision accelerating the debt in the event of default.
    (b) The size and frequency of installment payments should bear a 
reasonable relation to the size of the debt and the debtor's ability to 
pay. If possible, the installment payments should be sufficient in size 
and frequency to liquidate the debt in three years or less.
    (c) Security for deferred payments should be obtained in appropriate 
cases. Agencies may accept installment payments notwithstanding the 
refusal of the debtor to execute a written agreement or to give 
security, at the agency's option.



Sec. 901.9  Interest, penalties, and administrative costs.

    (a) Except as provided in paragraphs (g), (h), and (i) of this 
section, agencies shall charge interest, penalties, and administrative 
costs on debts owed to the United States pursuant to 31 U.S.C. 3717. An 
agency shall mail or hand-deliver a written notice to the debtor, at the 
debtor's most recent address available to the agency, explaining the 
agency's requirements concerning these charges except where these 
requirements are included in a contractual or repayment agreement. These 
charges shall continue to accrue until the debt is paid in full or 
otherwise resolved through compromise, termination, or waiver of the 
charges.
    (b) Agencies shall charge interest on debts owed the United States 
as follows:
    (1) Interest shall accrue from the date of delinquency, or as 
otherwise provided by law.
    (2) Unless otherwise established in a contract, repayment agreement, 
or by statute, the rate of interest charged shall be the rate 
established annually by the Secretary in accordance with 31 U.S.C. 3717. 
Pursuant to 31 U.S.C. 3717, an agency may charge a higher rate of 
interest if it reasonably determines that a higher rate is necessary to 
protect the rights of the United States. The agency should document the 
reason(s) for its determination that the higher rate is necessary.
    (3) The rate of interest, as initially charged, shall remain fixed 
for the duration of the indebtedness. When a debtor defaults on a 
repayment agreement and seeks to enter into a new agreement, the agency 
may require payment of interest at a new rate that reflects the current 
value of funds to the Treasury at the time the new agreement is 
executed. Interest shall not be compounded, that is, interest shall not 
be charged on interest, penalties, or administrative costs required by 
this section. If, however, a debtor defaults on a previous repayment 
agreement, charges that accrued but were not collected under the 
defaulted agreement shall be added to the principal under the new 
repayment agreement.

[[Page 1063]]

    (c) Agencies shall assess administrative costs incurred for 
processing and handling delinquent debts. The calculation of 
administrative costs should be based on actual costs incurred or upon 
estimated costs as determined by the assessing agency.
    (d) Unless otherwise established in a contract, repayment agreement, 
or by statute, agencies shall charge a penalty, pursuant to 31 U.S.C. 
3717(e)(2), not to exceed six percent a year on the amount due on a debt 
that is delinquent for more than 90 days. This charge shall accrue from 
the date of delinquency.
    (e) Agencies may increase an ``administrative debt'' by the cost of 
living adjustment in lieu of charging interest and penalties under this 
section. ``Administrative debt'' includes, but is not limited to, a debt 
based on fines, penalties, and overpayments, but does not include a debt 
based on the extension of Government credit, such as those arising from 
loans and loan guaranties. The cost of living adjustment is the 
percentage by which the Consumer Price Index for the month of June of 
the calendar year preceding the adjustment exceeds the Consumer Price 
Index for the month of June of the calendar year in which the debt was 
determined or last adjusted. Increases to administrative debts shall be 
computed annually. Agencies should use this alternative only when there 
is a legitimate reason to do so, such as when calculating interest and 
penalties on a debt would be extremely difficult because of the age of 
the debt.
    (f) When a debt is paid in partial or installment payments, amounts 
received by the agency shall be applied first to outstanding penalties, 
second to administrative charges, third to interest, and last to 
principal.
    (g) Agencies shall waive the collection of interest and 
administrative charges imposed pursuant to this section on the portion 
of the debt that is paid within 30 days after the date on which interest 
began to accrue. Agencies may extend this 30-day period on a case-by-
case basis. In addition, agencies may waive interest, penalties, and 
administrative costs charged under this section, in whole or in part, 
without regard to the amount of the debt, either under the criteria set 
forth in these standards for the compromise of debts, or if the agency 
determines that collection of these charges is against equity and good 
conscience or is not in the best interest of the United States.
    (h) Agencies shall set forth in their regulations the circumstances 
under which interest and related charges will not be imposed for periods 
during which collection activity has been suspended pending agency 
review.
    (i) Agencies are authorized to impose interest and related charges 
on debts not subject to 31 U.S.C. 3717, in accordance with the common 
law.



Sec. 901.10  Analysis of costs.

    Agency collection procedures should provide for periodic comparison 
of costs incurred and amounts collected. Data on costs and corresponding 
recovery rates for debts of different types and in various dollar ranges 
should be used to compare the cost effectiveness of alternative 
collection techniques, establish guidelines with respect to points at 
which costs of further collection efforts are likely to exceed 
recoveries, assist in evaluating offers in compromise, and establish 
minimum debt amounts below which collection efforts need not be taken.



Sec. 901.11  Use and disclosure of mailing addresses.

    (a) When attempting to locate a debtor in order to collect or 
compromise a debt under parts 900-904 of this chapter or other 
authority, agencies may send a request to the Secretary (or designee) to 
obtain a debtor's mailing address from the records of the Internal 
Revenue Service.
    (b) Agencies are authorized to use mailing addresses obtained under 
paragraph (a) of this section to enforce collection of a delinquent debt 
and may disclose such mailing addresses to other agencies and to 
collection agencies for collection purposes.



Sec. 901.12  Exemptions.

    (a) The preceding sections of this part, to the extent they reflect 
remedies or procedures prescribed by the Debt Collection Act of 1982 and 
the Debt Collection Improvement Act of 1996, such as administrative 
offset, use

[[Page 1064]]

of credit bureaus, contracting for collection agencies, and interest and 
related charges, do not apply to debts arising under, or payments made 
under, the Internal Revenue Code of 1986, as amended (26 U.S.C. 1 et 
seq.); the Social Security Act (42 U.S.C. 301 et seq.), except to the 
extent provided under 42 U.S.C. 404 and 31 U.S.C. 3716(c); or the tariff 
laws of the United States. These remedies and procedures, however, may 
be authorized with respect to debts that are exempt from the Debt 
Collection Act of 1982 and the Debt Collection Improvement Act of 1996, 
to the extent that they are authorized under some other statute or the 
common law.
    (b) This section should not be construed as prohibiting the use of 
these authorities or requirements when collecting debts owed by persons 
employed by agencies administering the laws cited in paragraph (a) of 
this section unless the debt arose under those laws.



PART 902--STANDARDS FOR THE COMPROMISE OF CLAIMS--Table of Contents




Sec.
902.1  Scope and application.
902.2  Bases for compromise.
902.3  Enforcement policy.
902.4  Joint and several liability.
902.5  Further review of compromise offers.
902.6  Consideration of tax consequences to the Government.
902.7  Mutual releases of the debtor and the Government.

    Authority: 31 U.S.C. 3711.

    Source: 65 FR 70402, Nov. 22, 2000, unless otherwise noted.



Sec. 902.1  Scope and application.

    (a) The standards set forth in this part apply to the compromise of 
debts pursuant to 31 U.S.C. 3711. An agency may exercise such compromise 
authority for debts arising out of activities of, or referred or 
transferred for collection services to, that agency when the amount of 
the debt then due, exclusive of interest, penalties, and administrative 
costs, does not exceed $100,000 or any higher amount authorized by the 
Attorney General. Agency heads may designate officials within their 
respective agencies to exercise the authorities in this section.
    (b) Unless otherwise provided by law, when the principal balance of 
a debt, exclusive of interest, penalties, and administrative costs, 
exceeds $100,000 or any higher amount authorized by the Attorney 
General, the authority to accept the compromise rests with the 
Department of Justice. The agency should evaluate the compromise offer, 
using the factors set forth in this part. If an offer to compromise any 
debt in excess of $100,000 is acceptable to the agency, the agency shall 
refer the debt to the Civil Division or other appropriate litigating 
division in the Department of Justice using a Claims Collection 
Litigation Report (CCLR). Agencies may obtain the CCLR from the 
Department of Justice's National Central Intake Facility. The referral 
shall include appropriate financial information and a recommendation for 
the acceptance of the compromise offer. Justice Department approval is 
not required if the agency rejects a compromise offer.



Sec. 902.2  Bases for compromise.

    (a) Agencies may compromise a debt if the Government cannot collect 
the full amount because:
    (1) The debtor is unable to pay the full amount in a reasonable 
time, as verified through credit reports or other financial information;
    (2) The Government is unable to collect the debt in full within a 
reasonable time by enforced collection proceedings;
    (3) The cost of collecting the debt does not justify the enforced 
collection of the full amount; or
    (4) There is significant doubt concerning the Government's ability 
to prove its case in court.
    (b) In determining the debtor's inability to pay, agencies should 
consider relevant factors such as the following:
    (1) Age and health of the debtor;
    (2) Present and potential income;
    (3) Inheritance prospects;
    (4) The possibility that assets have been concealed or improperly 
transferred by the debtor; and
    (5) The availability of assets or income that may be realized by 
enforced collection proceedings.
    (c) Agencies should verify the debtor's claim of inability to pay by 
using

[[Page 1065]]

a credit report and other financial information as provided in paragraph 
(g) of this section. Agencies should consider the applicable exemptions 
available to the debtor under state and Federal law in determining the 
Government's ability to enforce collection. Agencies also may consider 
uncertainty as to the price that collateral or other property will bring 
at a forced sale in determining the Government's ability to enforce 
collection. A compromise effected under this section should be for an 
amount that bears a reasonable relation to the amount that can be 
recovered by enforced collection procedures, with regard to the 
exemptions available to the debtor and the time that collection will 
take.
    (d) If there is significant doubt concerning the Government's 
ability to prove its case in court for the full amount claimed, either 
because of the legal issues involved or because of a bona fide dispute 
as to the facts, then the amount accepted in compromise of such cases 
should fairly reflect the probabilities of successful prosecution to 
judgment, with due regard given to the availability of witnesses and 
other evidentiary support for the Government's claim. In determining the 
litigative risks involved, agencies should consider the probable amount 
of court costs and attorney fees pursuant to the Equal Access to Justice 
Act, 28 U.S.C. 2412, that may be imposed against the Government if it is 
unsuccessful in litigation.
    (e) Agencies may compromise a debt if the cost of collecting the 
debt does not justify the enforced collection of the full amount. The 
amount accepted in compromise in such cases may reflect an appropriate 
discount for the administrative and litigative costs of collection, with 
consideration given to the time it will take to effect collection. 
Collection costs may be a substantial factor in the settlement of small 
debts. In determining whether the cost of collecting justifies enforced 
collection of the full amount, agencies should consider whether 
continued collection of the debt, regardless of cost, is necessary to 
further an enforcement principle, such as the Government's willingness 
to pursue aggressively defaulting and uncooperative debtors.
    (f) Agencies generally should not accept compromises payable in 
installments. This is not an advantageous form of compromise in terms of 
time and administrative expense. If, however, payment of a compromise in 
installments is necessary, agencies should obtain a legally enforceable 
written agreement providing that, in the event of default, the full 
original principal balance of the debt prior to compromise, less sums 
paid thereon, is reinstated. Whenever possible, agencies also should 
obtain security for repayment in the manner set forth in part 901 of 
this chapter.
    (g) To assess the merits of a compromise offer based in whole or in 
part on the debtor's inability to pay the full amount of a debt within a 
reasonable time, agencies should obtain a current financial statement 
from the debtor, executed under penalty of perjury, showing the debtor's 
assets, liabilities, income and expenses. Agencies also may obtain 
credit reports or other financial information to assess compromise 
offers. Agencies may use their own financial information form or may 
request suitable forms from the Department of Justice or the local 
United States Attorney's Office.



Sec. 902.3  Enforcement policy.

    Pursuant to this part, agencies may compromise statutory penalties, 
forfeitures, or claims established as an aid to enforcement and to 
compel compliance, if the agency's enforcement policy in terms of 
deterrence and securing compliance, present and future, will be 
adequately served by the agency's acceptance of the sum to be agreed 
upon.



Sec. 902.4  Joint and several liability.

    (a) When two or more debtors are jointly and severally liable, 
agencies should pursue collection activity against all debtors, as 
appropriate. Agencies should not attempt to allocate the burden of 
payment between the debtors but should proceed to liquidate the 
indebtedness as quickly as possible.
    (b) Agencies should ensure that a compromise agreement with one 
debtor does not release the agency's claim against the remaining 
debtors. The

[[Page 1066]]

amount of a compromise with one debtor shall not be considered a 
precedent or binding in determining the amount that will be required 
from other debtors jointly and severally liable on the claim.



Sec. 902.5  Further review of compromise offers.

    If an agency is uncertain whether to accept a firm, written, 
substantive compromise offer on a debt that is within the agency's 
delegated compromise authority, it may refer the offer to the Civil 
Division or other appropriate litigating division in the Department of 
Justice, using a CCLR accompanied by supporting data and particulars 
concerning the debt. The Department of Justice may act upon such an 
offer or return it to the agency with instructions or advice.



Sec. 902.6  Consideration of tax consequences to the Government.

    In negotiating a compromise, agencies should consider the tax 
consequences to the Government. In particular, agencies should consider 
requiring a waiver of tax-loss-carry-forward and tax-loss-carry-back 
rights of the debtor. For information on discharge of indebtedness 
reporting requirements see Sec. 903.5 of this chapter.



Sec. 902.7  Mutual releases of the debtor and the Government.

    In all appropriate instances, a compromise that is accepted by an 
agency should be implemented by means of a mutual release, in which the 
debtor is released from further non-tax liability on the compromised 
debt in consideration of payment in full of the compromise amount and 
the Government and its officials, past and present, are released and 
discharged from any and all claims and causes of action arising from the 
same transaction that the debtor may have. In the event a mutual release 
is not executed when a debt is compromised, unless prohibited by law, 
the debtor is still deemed to have waived any and all claims and causes 
of action against the Government and its officials related to the 
transaction giving rise to the compromised debt.



PART 903--STANDARDS FOR SUSPENDING OR TERMINATING COLLECTION ACTIVITY--Table of Contents




Sec.
903.1  Scope and application.
903.2  Suspension of collection activity.
903.3  Termination of collection activity.
903.4  Exception to termination.
903.5  Discharge of indebtedness; reporting requirements.

    Authority: 31 U.S.C. 3711.

    Source: 65 FR 70403, Nov. 22, 2000, unless otherwise noted.



Sec. 903.1  Scope and application.

    (a) The standards set forth in this part apply to the suspension or 
termination of collection activity pursuant to 31 U.S.C. 3711 on debts 
that do not exceed $100,000, or such other amount as the Attorney 
General may direct, exclusive of interest, penalties, and administrative 
costs, after deducting the amount of partial payments or collections, if 
any. Prior to referring a debt to the Department of Justice for 
litigation, agencies may suspend or terminate collection under this part 
with respect to debts arising out of activities of, or referred or 
transferred for collection services to, that agency.
    (b) If, after deducting the amount of any partial payments or 
collections, the principal amount of a debt exceeds $100,000, or such 
other amount as the Attorney General may direct, exclusive of interest, 
penalties, and administrative costs, the authority to suspend or 
terminate rests solely with the Department of Justice. If the agency 
believes that suspension or termination of any debt in excess of 
$100,000 may be appropriate, the agency shall refer the debt to the 
Civil Division or other appropriate litigating division in the 
Department of Justice, using the CCLR. The referral should specify the 
reasons for the agency's recommendation. If, prior to referral to the 
Department of Justice, an agency determines that a debt is plainly 
erroneous or clearly without legal merit, the agency may terminate 
collection activity regardless of the amount involved without obtaining 
Department of Justice concurrence.

[[Page 1067]]



Sec. 903.2  Suspension of collection activity.

    (a) Agencies may suspend collection activity on a debt when:
    (1) The agency cannot locate the debtor;
    (2) The debtor's financial condition is expected to improve; or
    (3) The debtor has requested a waiver or review of the debt.
    (b) Based on the current financial condition of the debtor, agencies 
may suspend collection activity on a debt when the debtor's future 
prospects justify retention of the debt for periodic review and 
collection activity and:
    (1) The applicable statute of limitations has not expired; or
    (2) Future collection can be effected by administrative offset, 
notwithstanding the expiration of the applicable statute of limitations 
for litigation of claims, with due regard to the 10-year limitation for 
administrative offset prescribed by 31 U.S.C. 3716(e)(1); or
    (3) The debtor agrees to pay interest on the amount of the debt on 
which collection will be suspended, and such suspension is likely to 
enhance the debtor's ability to pay the full amount of the principal of 
the debt with interest at a later date.
    (c)(1) Agencies shall suspend collection activity during the time 
required for consideration of the debtor's request for waiver or 
administrative review of the debt if the statute under which the request 
is sought prohibits the agency from collecting the debt during that 
time.
    (2) If the statute under which the request is sought does not 
prohibit collection activity pending consideration of the request, 
agencies may use discretion, on a case-by-case basis, to suspend 
collection. Further, an agency ordinarily should suspend collection 
action upon a request for waiver or review if the agency is prohibited 
by statute or regulation from issuing a refund of amounts collected 
prior to agency consideration of the debtor's request. However, an 
agency should not suspend collection when the agency determines that the 
request for waiver or review is frivolous or was made primarily to delay 
collection.
    (d) When an agency learns that a bankruptcy petition has been filed 
with respect to a debtor, in most cases the collection activity on a 
debt must be suspended, pursuant to the provisions of 11 U.S.C. 362, 
1201, and 1301, unless the agency can clearly establish that the 
automatic stay has been lifted or is no longer in effect. Agencies 
should seek legal advice immediately from their agency counsel and, if 
legally permitted, take the necessary legal steps to ensure that no 
funds or money are paid by the agency to the debtor until relief from 
the automatic stay is obtained.



Sec. 903.3  Termination of collection activity.

    (a) Agencies may terminate collection activity when:
    (1) The agency is unable to collect any substantial amount through 
its own efforts or through the efforts of others;
    (2) The agency is unable to locate the debtor;
    (3) Costs of collection are anticipated to exceed the amount 
recoverable;
    (4) The debt is legally without merit or enforcement of the debt is 
barred by any applicable statute of limitations;
    (5) The debt cannot be substantiated; or
    (6) The debt against the debtor has been discharged in bankruptcy.
    (b) Before terminating collection activity, the agency should have 
pursued all appropriate means of collection and determined, based upon 
the results of the collection activity, that the debt is uncollectible. 
Termination of collection activity ceases active collection of the debt. 
The termination of collection activity does not preclude the agency from 
retaining a record of the account for purposes of:
    (1) Selling the debt, if the Secretary determines that such sale is 
in the best interests of the United States;
    (2) Pursuing collection at a subsequent date in the event there is a 
change in the debtor's status or a new collection tool becomes 
available;
    (3) Offsetting against future income or assets not available at the 
time of termination of collection activity; or
    (4) Screening future applicants for prior indebtedness.
    (c) Generally, agencies shall terminate collection activity on a 
debt that

[[Page 1068]]

has been discharged in bankruptcy, regardless of the amount. Agencies 
may continue collection activity, however, subject to the provisions of 
the Bankruptcy Code, for any payments provided under a plan of 
reorganization. Offset and recoupment rights may survive the discharge 
of the debtor in bankruptcy and, under some circumstances, claims also 
may survive the discharge. For example, the claims of an agency that it 
is a known creditor of a debtor may survive a discharge if the agency 
did not receive formal notice of the proceedings. Agencies should seek 
legal advice from their agency counsel if they believe they have claims 
or offsets that may survive the discharge of a debtor.



Sec. 903.4  Exception to termination.

    When a significant enforcement policy is involved, or recovery of a 
judgment is a prerequisite to the imposition of administrative 
sanctions, agencies may refer debts for litigation even though 
termination of collection activity may otherwise be appropriate.



Sec. 903.5  Discharge of indebtedness; reporting requirements.

    (a) Before discharging a delinquent debt (also referred to as a 
close out of the debt), agencies shall take all appropriate steps to 
collect the debt in accordance with 31 U.S.C. 3711(g), including, as 
applicable, administrative offset, tax refund offset, Federal salary 
offset, referral to Treasury, Treasury-designated debt collection 
centers or private collection contractors, credit bureau reporting, wage 
garnishment, litigation, and foreclosure. Discharge of indebtedness is 
distinct from termination or suspension of collection activity under 
part 903 of this title and is governed by the Internal Revenue Code. 
When collection action on a debt is suspended or terminated, the debt 
remains delinquent and further collection action may be pursued at a 
later date in accordance with the standards set forth in this chapter. 
When an agency discharges a debt in full or in part, further collection 
action is prohibited. Therefore, agencies should make the determination 
that collection action is no longer warranted before discharging a debt. 
Before discharging a debt, agencies must terminate debt collection 
action.
    (b) Section 3711(i), title 31, United States Code, requires agencies 
to sell a delinquent nontax debt upon termination of collection action 
if the Secretary determines such a sale is in the best interests of the 
United States. Since the discharge of a debt precludes any further 
collection action (including the sale of a delinquent debt), agencies 
may not discharge a debt until the requirements of 31 U.S.C. 3711(i) 
have been met.
    (c) Upon discharge of an indebtedness, agencies must report the 
discharge to the IRS in accordance with the requirements of 26 U.S.C. 
6050P and 26 CFR 1.6050P-1. An agency may request Treasury or Treasury-
designated debt collection centers to file such a discharge report to 
the IRS on the agency's behalf.
    (d) When discharging a debt, agencies must request that litigation 
counsel release any liens of record securing the debt.



PART 904--REFERRALS TO THE DEPARTMENT OF JUSTICE--Table of Contents




Sec.
904.1  Prompt referral.
904.2  Claims Collection Litigation Report.
904.3  Preservation of evidence.
904.4  Minimum amount of referrals to the Department of Justice.

    Authority: 31 U.S.C. 3711.

    Source: 65 FR 70404, Nov. 22, 2000, unless otherwise noted.



Sec. 904.1  Prompt referral.

    (a) Agencies shall promptly refer to the Department of Justice for 
litigation debts on which aggressive collection activity has been taken 
in accordance with part 901 of this chapter and that cannot be 
compromised, or on which collection activity cannot be suspended or 
terminated, in accordance with parts 902 and 903 of this chapter. 
Agencies may refer those debts arising out of activities of, or referred 
or transferred for collection services to, that agency. Debts for which 
the principal amount is over $1,000,000, or such other amount as the 
Attorney General may direct, exclusive of interest and penalties, shall 
be referred to the Civil

[[Page 1069]]

Division or other division responsible for litigating such debts at the 
Department of Justice, Washington, D.C. Debts for which the principal 
amount is $1,000,000, or less, or such other amount as the Attorney 
General may direct, exclusive of interest or penalties, shall be 
referred to the Department of Justice's Nationwide Central Intake 
Facility as required by the CCLR instructions. Debts should be referred 
as early as possible, consistent with aggressive agency collection 
activity and the observance of the standards contained in parts 900-904 
of this chapter, and, in any event, well within the period for 
initiating timely lawsuits against the debtors. Agencies shall make 
every effort to refer delinquent debts to the Department of Justice for 
litigation within one year of the date such debts last became 
delinquent. In the case of guaranteed or insured loans, agencies should 
make every effort to refer these delinquent debts to the Department of 
Justice for litigation within one year from the date the loan was 
presented to the agency for payment or re-insurance.
    (b) The Department of Justice has exclusive jurisdiction over the 
debts referred to it pursuant to this section. The referring agency 
shall immediately terminate the use of any administrative collection 
activities to collect a debt at the time of the referral of that debt to 
the Department of Justice. The agency should advise the Department of 
Justice of the collection activities which have been utilized to date, 
and their result. The referring agency shall refrain from having any 
contact with the debtor and shall direct all debtor inquiries concerning 
the debt to the Department of Justice. The referring agency shall 
immediately notify the Department of Justice of any payments credited by 
the agency to the debtor's account after referral of a debt under this 
section. The Department of Justice shall notify the referring agency, in 
a timely manner, of any payments it receives from the debtor.



Sec. 904.2  Claims Collection Litigation Report.

    (a) Unless excepted by the Department of Justice, agencies shall 
complete the CCLR (see Sec. 902.1(b) of this chapter), accompanied by a 
signed Certificate of Indebtedness, to refer all administratively 
uncollectible claims to the Department of Justice for litigation. 
Referring agencies shall complete all of the sections of the CCLR 
appropriate to each claim as required by the CCLR instructions and 
furnish such other information as may be required in specific cases.
    (b) Agencies shall indicate clearly on the CCLR the actions they 
wish the Department of Justice to take with respect to the referred 
claim. The CCLR permits the agency to indicate specifically any of a 
number of litigative activities which the Department of Justice may 
pursue, including enforced collection, judgment lien only, renew 
judgment lien only, renew judgment lien and enforce collection, program 
enforcement, foreclosure only, and foreclosure and deficiency judgment.
    (c) Agencies also shall use the CCLR to refer claims to the 
Department of Justice to obtain approval of any proposals to compromise 
the claims or to suspend or terminate agency collection activity.



Sec. 904.3  Preservation of evidence.

    Referring agencies must take care to preserve all files and records 
that may be needed by the Department of Justice to prove their claims in 
court. Agencies ordinarily should include certified copies of the 
documents that form the basis for the claim in the packages referring 
their claims to the Department of Justice for litigation. Agencies shall 
provide originals of such documents immediately upon request by the 
Department of Justice.



Sec. 904.4  Minimum amount of referrals to the Department of Justice.

    (a) Agencies shall not refer for litigation claims of less than 
$2,500, exclusive of interest, penalties, and administrative costs, or 
such other amount as the Attorney General shall from time to time 
prescribe. The Department of Justice shall promptly notify referring 
agencies if the Attorney General changes this minimum amount.
    (b) Agencies shall not refer claims of less than the minimum amount 
unless:

[[Page 1070]]

    (1) Litigation to collect such smaller claims is important to ensure 
compliance with the agency's policies or programs;
    (2) The claim is being referred solely for the purpose of securing a 
judgment against the debtor, which will be filed as a lien against the 
debtor's property pursuant to 28 U.S.C. 3201 and returned to the 
referring agency for enforcement; or
    (3) The debtor has the clear ability to pay the claim and the 
Government effectively can enforce payment, with due regard for the 
exemptions available to the debtor under state and Federal law and the 
judicial remedies available to the Government.
    (c) Agencies should consult with the Financial Litigation Staff of 
the Executive Office for United States Attorneys in the Department of 
Justice prior to referring claims valued at less than the minimum 
amount.


[[Page 1071]]



                              FINDING AIDS




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

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Material Approved for Incorporation by Reference
  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 1073]]

            Material Approved for Incorporation by Reference

                      (Revised as of July 1, 2002)

  The Director of the Federal Register has approved under 5 U.S.C. 
552(a) and 1 CFR Part 51 the incorporation by reference of the following 
publications. This list contains only those incorporations by reference 
effective as of the revision date of this volume. Incorporations by 
reference found within a regulation are effective upon the effective 
date of that regulation. For more information on incorporation by 
reference, see the preliminary pages of this volume.


31 CFR (PARTS 200 TO END)

FISCAL SERVICE, DEPARTMENT OF THE TREASURY
                                                                  31 CFR


American Law Institute

  4025 Chestnut Street, Philadelphia, PA 19104
Uniform Commercial Code, Revised Article 8,        354.1; 357.2; 357.10; 
  Investment Securities (with conforming and                      357.11
  miscellaneous amendments to Articles 1, 3, 4, 5, 
  9, and 10) 1994 Official Text.
Uniform Commercial Code, Revised Article 9,        357.2; 357.10; 357.11
  Secured Transactions, (with conforming and 
  miscellaneous amendments to Articles 1, 2, 2A, 
  4, 5, 6, 7, and 8) 1999 Official Text.


National Automated Clearing House Association

  The Electronic Payments Association, 13665 
  Dulles Technology Drive, Suite 300, Herndon, VA 
  20171
2002 ACH Rules: A Complete Guide to Rules &                     210.3(b)
  Regulations Governing the ACH Network,(including 
  rule changes with an effective date on or before 
  March 15, 2002, as published in Parts II, III, 
  and IV.).



[[Page 1075]]



                    Table of CFR Titles and Chapters




                      (Revised as of July 1, 2002)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                          Title 2--[Reserved]

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  General Accounting Office (Parts 1--99)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Part 2100)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Part 3201)
     XXIII  Department of Energy (Part 3301)
      XXIV  Federal Energy Regulatory Commission (Part 3401)
       XXV  Department of the Interior (Part 3501)
      XXVI  Department of Defense (Part 3601)

[[Page 1076]]

    XXVIII  Department of Justice (Part 3801)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Part 4301)
      XXXV  Office of Personnel Management (Part 4501)
        XL  Interstate Commerce Commission (Part 5001)
       XLI  Commodity Futures Trading Commission (Part 5101)
      XLII  Department of Labor (Part 5201)
     XLIII  National Science Foundation (Part 5301)
       XLV  Department of Health and Human Services (Part 5501)
      XLVI  Postal Rate Commission (Part 5601)
     XLVII  Federal Trade Commission (Part 5701)
    XLVIII  Nuclear Regulatory Commission (Part 5801)
         L  Department of Transportation (Part 6001)
       LII  Export-Import Bank of the United States (Part 6201)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Part 6401)
      LVII  General Services Administration (Part 6701)
     LVIII  Board of Governors of the Federal Reserve System (Part 
                6801)
       LIX  National Aeronautics and Space Administration (Part 
                6901)
        LX  United States Postal Service (Part 7001)
       LXI  National Labor Relations Board (Part 7101)
      LXII  Equal Employment Opportunity Commission (Part 7201)
     LXIII  Inter-American Foundation (Part 7301)
       LXV  Department of Housing and Urban Development (Part 
                7501)
      LXVI  National Archives and Records Administration (Part 
                7601)
      LXIX  Tennessee Valley Authority (Part 7901)
      LXXI  Consumer Product Safety Commission (Part 8101)
    LXXIII  Department of Agriculture (Part 8301)
     LXXIV  Federal Mine Safety and Health Review Commission (Part 
                8401)
     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)
    LXXVII  Office of Management and Budget (Part 8701)

                          Title 6--[Reserved]

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)

[[Page 1077]]

       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy, Department of Agriculture (Parts 
                2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)

[[Page 1078]]

     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Immigration and Naturalization Service, Department of 
                Justice (Parts 1--599)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 1000-
                -1099)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Part 1800)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)

[[Page 1079]]

       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)

[[Page 1080]]

        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  United States Customs Service, Department of the 
                Treasury (Parts 1--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)

[[Page 1081]]

       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 800-
                -899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training, Department of Labor 
                (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 1600-
                -1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)

[[Page 1082]]

        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

[[Page 1083]]

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Part 1200)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--899)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Bureau of Alcohol, Tobacco and Firearms, Department of 
                the Treasury (Parts 1--299)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--199)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 0-
                -99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)

[[Page 1084]]

        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Pension and Welfare Benefits Administration, 
                Department of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 200-
                -399)
        IV  Secret Service, Department of the Treasury (Parts 400-
                -499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)

[[Page 1085]]

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Transportation (Parts 1--
                199)
        II  Corps of Engineers, Department of the Army (Parts 200-
                -399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799)
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

[[Page 1086]]

                        Title 35--Panama Canal

         I  Panama Canal Regulations (Parts 1--299)

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 300-
                -399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Part 1501)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Rate Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--799)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)

[[Page 1087]]

       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System
       201  Federal Information Resources Management Regulation 
                (Parts 201-1--201-99) [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-70)
       304  Payment from a Non-Federal Source for Travel Expenses 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

[[Page 1088]]

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10005)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)

[[Page 1089]]

     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Transportation (Parts 1--
                199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Transportation (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 300-
                -399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Department of Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  United States Agency for International Development 
                (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)

[[Page 1090]]

        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        35  Panama Canal Commission (Parts 3500--3599)
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)
        54  Defense Logistics Agency, Department of Defense (Part 
                5452)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Research and Special Programs Administration, 
                Department of Transportation (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Transportation (Parts 400--
                499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)

[[Page 1091]]

        XI  Bureau of Transportation Statistics, Department of 
                Transportation (Parts 1400--1499)
       XII  Transportation Security Administration, Department of 
                Transportation (Parts 1500--1599)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR



[[Page 1093]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of July 1, 2002)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development, United      22, II
     States
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Alcohol, Tobacco and Firearms, Bureau of          27, I
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII

[[Page 1094]]

Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV, VI
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Corporation for National and Community Service    45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    28, VIII
     for the District of Columbia
Customs Service, United States                    19, I
Defense Contract Audit Agency                     32, I
Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII

[[Page 1095]]

  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 2
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   5, LIV; 40, I, IV, VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                5, III, LXXVII; 14, VI; 
                                                  48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           5, LII; 12, IV
Family Assistance, Office of                      45, II

[[Page 1096]]

Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
  Federal Acquisition Regulation                  48, 44
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Accounting Office                         4, I
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulation          41, 101
  Federal Travel Regulation System                41, Subtitle F

[[Page 1097]]

  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          5, XLV; 45, Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Naturalization Service            8, I
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V

[[Page 1098]]

  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  Minerals Management Service                     30, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                5, XXVIII; 28, I, XI; 40, 
                                                  IV
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration and Naturalization Service          8, I
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Pension and Welfare Benefits Administration     29, XXV
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II

[[Page 1099]]

Micronesian Status Negotiations, Office for       32, XXVII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
National Aeronautics and Space Administration     5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Bureau of Standards                      15, II
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV, VI
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
National Weather Service                          15, IX
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Panama Canal Commission                           48, 35
Panama Canal Regulations                          35, I
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
   Certain Employees
[[Page 1100]]

Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension and Welfare Benefits Administration       29, XXV
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Postal Rate Commission                            5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Regional Action Planning Commissions              13, V
Relocation Allowances                             41, 302
Research and Special Programs Administration      49, I
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     13, I
Smithsonian Institution                           36, V
Social Security Administration                    20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II

[[Page 1101]]

  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V
  Research and Special Programs Administration    49, I
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Security Administration          49, XII
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol, Tobacco and Firearms, Bureau of        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs Service, United States                  19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 1103]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations which were 
made by documents published in the Federal Register since January 1, 
1986, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 1986, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, and 1973-1985'' published in seven 
separate volumes.

                                  1986

31 CFR
                                                                   51 FR
                                                                    Page
Chapter II
203.15  (d)(10) added..............................................46853
306  Authority citation revised....................................16174
306.3  (e) revised.................................................16174
315.31  (a) revised; eff. 9-19-86..................................23753
    Effective date corrected.......................................28933
315.35  (e) revised; eff. 9-19-86..................................23753
    Effective date corrected.......................................28933
316.8  (b) introductory text, (1), and (2)(i) revised..............39990
317.6  (b) Fee schedules...........................................30212
317.8  Appendix amended.............................................6401
321.23  (a) Fee schedules..........................................30212
332.2  (e) revised.................................................23753
    Effective date corrected.......................................28933
332.8  (b)(4) revised..............................................39990
332.10  Revised....................................................23753
    Effective date corrected.......................................28933
342.2a  (b)(1) revised.............................................39991
344  Revised; interim..............................................47401
351.0  Amended.....................................................39991
351.2  (c) table and (h) amended; (e) introductory text and (1) 
        revised....................................................39991
352.0  Amended.....................................................39991
352.2  (d) and (f) revised.........................................23753
    Effective date corrected.......................................28933
    (e)(1) through (4) redesignated as (e)(2) through (5); new 
(e)(1) added; new (e)(2) revised...................................39991
353.35  (c) revised................................................23754
    Effective date corrected.......................................28933
357  Added.........................................................18265
357.22  (b)(2) corrected...........................................18884
357.24  (c) corrected..............................................18884
357.28  (c)(3)(ii)(C) and (d)(1) corrected.........................18884
357.31  (c)(3) corrected...........................................18884
357  Appendix A added..............................................18260
    Appendix A corrected...........................................18884
361.6  (a) amended.................................................19751
390.5  Revised.....................................................39657
390.6  Added.......................................................39657
390.7  Added.......................................................39657
Chapter V
500  Authority extended by Memorandum of Aug. 20, 1986.............30201
    Specially designated nationals list............................44460
505  Authority extended by Memorandum of Aug. 20, 1986.............30201
515  Authority extended by Memorandum of Aug. 20, 1986.............30201
    Specially designated nationals list............................44460
520  Authority extended by Memorandum of Aug. 20, 1986.............30201
535.622  Added.....................................................37569
545  Authority citation revised.............................41907, 46854
    Interpretation.................................................41911
545.101  Revised...................................................41907
545.201  Revised...................................................41907
545.202  Revised...................................................41907
545.203  Revised...................................................41907
    (e) added......................................................46854
545.204  Revised...................................................41907
545.205--545.208  Added............................................41907
545.209  Added.....................................................46854
545.210  Added.....................................................46854
545.301  Revised...................................................41907
545.302  Revised...................................................41907

[[Page 1104]]

545.304  Revised............................................41908, 46854
545.306  Revised...................................................41908
    Amended........................................................46854
545.307  Removed...................................................46854
545.310  Revised...................................................41908
545.311  Added.....................................................41908
    Revised........................................................46854
545.312  Added.....................................................41908
545.313  Added.....................................................41908
    (c) revised....................................................46854
545.314--545.316  Added............................................41908
545.317--545.319  Added............................................46854
545.320  Added.....................................................46855
545.321  Added.....................................................46855
545.402  Revised...................................................41908
545.403  Revised...................................................41908
545.404  Revised............................................41909, 46855
545.405  Removed...................................................41909
545.406  Revised............................................41909, 46855
545.407  Revised...................................................41909
545.408  Revised............................................41909, 46855
545.409  Revised............................................41909, 46855
545.410  Revised............................................41909, 46855
545.411--545.414  Added............................................41909
545.415--545.419  Added............................................46855
545.420--545.424  Added............................................46856
545.501  Revised...................................................41909
545.503  Revised...................................................41909
545.504  Removed...................................................41910
545.601  Revised...................................................41910
545.602  Revised...................................................41910
545.603  Added.....................................................46856
545.604  Added.....................................................46856
545.701  Revised...................................................41910
545.801  (a) added.................................................41910
545.805  Revised...................................................41910
545.807  Added.....................................................41910
545.901  Added.....................................................28933
    Revised........................................................46856
550  Added..........................................................1354
    Authority citation revised......................................2462
550.209  Revised....................................................2462
550.210  Added......................................................2462
550.301  Revised....................................................2463
550.304  Revised....................................................2463
550.313--550.314  Added.............................................2463
550.315--550.320  Added.............................................2464
550.404  (c) removed................................................2464
550.409  Revised; eff. 7-7-86......................................22803
    (e) correctly revised..........................................25635
550.412--550.416  Added.............................................2464
550.417--550.421  Added.............................................2465
550.511--550.512  Added.............................................2465
550.513--550.516  Added.............................................2466
550.560  Added (pending OMB approval)..............................19752
550.568  Added......................................................2466
550.602  Amended....................................................2467
550.605  Added.....................................................25634
    (b)(1) and (2), (c)(3) introductory text and (i), and (e)(3) 
corrected..........................................................26687
550.901  Revised...................................................28933
550.901  (Subpart I) Added.........................................22803
555  Added.........................................................41916

                                  1987

31 CFR
                                                                   52 FR
                                                                    Page
Chapter II
210  Revised........................................................2406
210.14  (a) introductory text corrected.............................3917
316  Updated tables................................................48422
342  Updated tables................................................48422
344  Average marginal tax rates.....................................3115
351  Authority citation revised....................................46455
    Updated tables.................................................48422
351.5  (a) revised.................................................46456
354  Authority citation revised.....................................4495
354.0  (a) revised; interim.........................................4495
354.2  (e) removed; interim.........................................4495
358  Added; interim................................................41991
Chapter V
545  Interpretation and guidelines..................................7275
    Interpretation..................................................7855
545.203  (f) added..................................................7274
545.211  Added......................................................7273
545.425  Added......................................................7274
545.426  Added......................................................7274
545.427  Added; interim eff. to 7-1-87..............................7275
    Interpretation.................................................25576
545.808  Added......................................................7855
545.901  Revised....................................................7274
550.630  Added.....................................................35548
550.635  Added.....................................................35549
560  Added.........................................................44076

                                  1988

31 CFR
                                                                   53 FR
                                                                    Page
Chapter II
235  Policy statement...............................................3584
240  Policy statement...............................................3584
245  Policy statement...............................................3584
248  Policy statement...............................................3584
306  Authority citation revised....................................15554

[[Page 1105]]

306.23  Added......................................................15554
316  Updated tables..........................................9617, 37523
321  Revised.......................................................37511
321.1  (f) and (j) corrected.......................................39581
321.23  (b) corrected..............................................39581
321  Appendix corrected............................................39581
330  Revised.......................................................37519
330.7  Corrected...................................................39404
342  Updated tables..........................................9617, 37523
351  Updated tables..........................................9617, 37523
357.22  (a) introductory text amended..............................10074
358  Addition confirmed............................................19776
Chapter V
500  Specially designated nationals list...........................44397
500.563  Revised....................................................7354
515  Specially designated nationals list...........................44398
    Technical correction...........................................48368
515.559  (c) revised...............................................47527
515.560  (c) introductory text, (d) (1), (2), and (g) revised; (c) 
        (4) and (5) removed; (c)(6) redesignated as (c)(4); (i) 
        and (k) added..............................................47527
    (d)(1) corrected...............................................50491
515.563  (d) added.................................................47529
515.701  (c) added.................................................47530
515.901  Amended...................................................47530
535.702  Added......................................................7356
535.703  Added......................................................7356
535.704  Added......................................................7356
535.705  Added......................................................7356
540.703  Added......................................................7356
540.704  Added......................................................7356
540.705  Added......................................................7356
540.706  Added......................................................7357
545.702  Added......................................................7357
545.703  Added......................................................7357
545.704  Added......................................................7357
545.705  Added......................................................7357
550.304  (a)(3) amended; (a)(4) and (b) added.......................5571
550.406  Revised....................................................5572
550.703  Added......................................................7357
550.704  Added......................................................7357
550.705  Added......................................................7358
550.706  Added......................................................7358
560.901 (Subpart I)  Added.........................................37556
565  Added.........................................................20566
565.503  (b), (c), and (d) redesignated as (c), (d), and (e); new 
        (b) added; new (d) and (e) amended.........................23621
    565.503  (d) and (e) revised...................................32222
565.504  Amended...................................................23621
565.901  Added.....................................................37556

                                  1989

31 CFR
                                                                   54 FR
                                                                    Page
Chapter II
203  Authority citation revised.....................................8534
203.10  (b)(2)(ii) revised..........................................8534
203.14  Revised.....................................................8534
210  Authority citation revised....................................20569
210.1  Revised.....................................................20569
210.2  Amended.....................................................20570
210.4  (c)(5) added................................................20570
210.6  (e) revised.................................................20570
210.7  (d) revised.................................................20570
210.8  Redesignated as 210.9; new 210.8 added......................20570
210.9  Redesignated from 210.8, new 210.9 redesignated as 210.10 
                                                                   20570
210.10  Redesignated as 210.11.....................................50618
210.11  (b) revised................................................20570
    Redesignated as 210.12; new 210.11 redesignated from 210.10....50618
210.12  Redesignated as 210.13; new 210.12 redesignated from 
        210.11.....................................................50618
210.13  Redesignated as 210.14; new 210.13 redesignated from 
        210.12.....................................................50618
210.14  Redesignated as 210.15; new 210.14 redesignated from 
        210.13.....................................................50618
210.15  Redesignated from 210.14...................................50618
210.16--210.18 (Subpart C)  Added..................................20571
214  Authority citation revised.....................................8534
214.6  (b) revised..................................................8534
235  Heading and authority citation revised........................35642
235.1  Amended.....................................................35642
235.3  Amended.....................................................35642
235.6  Revised.....................................................35642
240  Revised.......................................................35642
240.12  (a)(2)(ii) correctly revised...............................46728
245  Revised.......................................................35647
248  Authority citation revised....................................35647
248.1  Revised.....................................................35647
248.5  Amended.....................................................35648
315.31  Revised....................................................40255
316  Updated tables revised.................................15925, 46053
    Updated tables corrected................................19486, 20476

[[Page 1106]]

    Updated tables correctly republished...........................30633
317  Revised.......................................................40830
332.2  (e) revised.................................................40255
342  Updated tables revised.................................15925, 46053
    Updated tables corrected................................19486, 20476
    Updated tables correctly republished...........................30633
344  Revised.......................................................28754
351  Updated tables revised.................................15925, 46053
    Updated tables corrected................................19486, 20476
    Updated tables correctly republished...........................30633
352  Revised.......................................................40249
353.31  Revised....................................................40254
370  Added.........................................................38988
Chapter V
500  Specially designated nationals list...........................32064
500.206  Added......................................................5231
500.307  Amended....................................................5231
500.322  (a)(3) revised.............................................5231
500.332  Added......................................................5231
500.407  Amended....................................................5231
500.505  (a)(1) and (2) redesignated as (a)(2) and (3); new (a)(1) 
        added.......................................................5232
500.523  (a)(4) and flush text following (a)(4) added; (b)(3) 
        revised.....................................................5232
500.524  (a) revised; (d) added.....................................5232
500.525  (b) amended................................................5232
500.536  Appendix removed...........................................5232
500.550  Revised....................................................5232
500.557  Revised....................................................5232
500.562  Removed....................................................5232
500.563  (a)(3) revised; (b) removed; (c), (d), and (e) 
        redesignated as (b), (c), and (d)...........................5232
500.568  Added......................................................5232
500.569  Added........................................................21
    Correctly designated...........................................11185
515  Specially designated nationals list...........................3447,
9431, 14215
    Specially designated nationals list...........................38810,
45730, 49258
515.206  Added......................................................5233
515.307  Amended....................................................5233
515.322  (a)(3) revised.............................................5233
515.332  Added......................................................5233
515.407  Amended....................................................5234
515.505  (a)(1) and (2) redesignated as (a)(2) and (3); new (a)(1) 
        added.......................................................5234
515.523  (a)(4) and flush text following (a)(4) added; (b)(3) 
        revised.....................................................5234
515.524  (a) revised; (d) added.....................................5234
515.525  (b) amended................................................5234
515.536  Appendix removed...........................................5234
515.545  Revised....................................................5234
515.546  Removed....................................................5234
515.550  Removed....................................................5234
515.551  (a)(3) amended.............................................5234
515.552  Revised....................................................5234
515.560  (c)(3) and (5) revised; (e) removed........................5235
    (i)(3) added...................................................13881
    (c)(2) revised.................................................35326
515.563  (d)(7) added..............................................13882
515.568  Added......................................................5235
515.569  Added.....................................................35326
565.304  (a)(4) amended............................................36272
565.509  Added........................................................22
565  Appendix A amended............................................13883
    Appendix B added...............................................36272

                                  1990

31 CFR
                                                                   55 FR
                                                                    Page
Chapter II
215.2  (h)(1) and (i) revised.......................................3590
    (h)(1)(ii) and (i) corrected....................................7494
317  Authority citation revised....................................39960
317.6  (b) redesignated as (b)(1); (b)(2) added....................39960
321  Authority citation revised.............................35395, 39960
321.1  (f) revised; (g) through (o) redesignated as (h) through 
        (p) and revised; new (g) and (q) added.....................35395
321.3  (a) revised.................................................35395
321.7  (a) amended; (e) redesignated as (g) and revised; new (e) 
        and (f) added..............................................35395
321.8  (b)(2) and (3) revised......................................35396
321.9  (e), (f), (h), and (i) revised..............................35396
321.10  (a) revised................................................35396
321.11  (d) and (e) redesignated as (e) and (f); new (e) revised; 
        (d) added..................................................35396
321.23  (a)(3) added...............................................39960
321  Appendix amended..............................................35397
351  Revised.........................................................567
353.5  (c) revised...................................................575
Chapter V
500.311  Amended...................................................31179
500.563  (a)(2) amended.....................................31179, 49997

[[Page 1107]]

500.566  (a)(1) amended............................................31179
500.569  Amended...................................................31179
515  Specially designated nationals list...........................2644,
12173, 24556, 31179, 38326
515.560  (l) added.................................................32076
535.441  Added.....................................................40831
540.599  Added.....................................................28614
545  Authority citation revised....................................10618
545.306  Amended...................................................10618
545.312  Amended...................................................10618
565.410  Added......................................................3561
565.510  Added......................................................3561
565.511  Added......................................................3561
570  Added.........................................................49857

                                  1991

31 CFR
                                                                   56 FR
                                                                    Page
Chapter II
211.1  (a) amended.................................................56932
Chapter V
500.563  Heading revised; (c)(1) and (2) amended; (c)(3) added.....65992
500.564  Amended...................................................65993
500.565  (g) added..................................................5351
    Revised........................................................20349
505  Authority citation revised....................................45895
505.10  Amended....................................................45895
505.31  (a)(2) and (b) revised.....................................45895
515.311  Amended...................................................49847
515.560  (c)(1) revised; (c)(5) removed............................49847
515.563  (a)(1) and (2) revised....................................49847
515.564  (a) introductory text and (1) revised; (c) added..........49847
515.569  (d) and (e) redesignated as (e) and (f); new (d) added....49847
515.570  Added.....................................................13284
520  Authority citation revised....................................45895
520.101  (a)(3) removed; (a)(4) redesignated as (a)(3); (a)(1) and 
        new (3) revised............................................45895
535.217  (b) revised...............................................40553
535.222  (g) revised................................................6546
535.568  (k) added..................................................6546
545.599  Added.....................................................32056
550  Authority citation revised....................................20541
550.514  Removed...................................................66338
550  Appendix A added..............................................20541
    Appendix A amended.............................................37157
    Appendix B added...............................................37157
    Appendix B amended.............................................65994
560.409  Added.....................................................61373
560.513  Added.....................................................11100
560.514  Added.....................................................61374
570.205  Amended....................................................5351
570.301  Amended....................................................5352
570.408  (a) amended................................................5352
570.504  (a)(1) amended.............................................5352
570.507  (a)(1) amended.............................................5352
570.512  (b)(2) revised.............................................5352
570.518  (a)(2)(ii) amended.........................................5352
570.522  Added.....................................................10356
570.523  Added.....................................................12450
    (b) revised....................................................26035
570.603  Removed...................................................26035
    Correctly designated...........................................29308
570.701  (b) and (c) redesignated as (c) and (d); new (b) added.....5352
570.801  (b)(2) and (3) amended.....................................5352
570.901  Added......................................................5352
575  Added..........................................................2113
575.322  Added......................................................5636
575.503  (i) removed................................................5636
575.507  (a)(1) amended.............................................5636
575.604  Added......................................................5637
575.605  Added......................................................5637
575  Appendix A added..............................................13585
    Appendix B added...............................................13587
    Appendix A amended......................................29121, 48104
Chapter VIII
Chapter VIII  Established..........................................58780
800  Added.........................................................58780

                                  1992

31 CFR
                                                                   57 FR
                                                                    Page
Chapter II
204  Removed.......................................................40330
205  Revised................................................44280, 60676
211.1  (a) revised.................................................44999
257  Removed.......................................................57345
312  Note amended..................................................34684
315  Authority citation revised....................................39602
315.40  (d) revised................................................39602
315.64  Revised....................................................39602
315.65  Removed; new 315.65 redesignated from 315.66...............39602
315.66  Redesignated as 315.65.....................................39602
316  Revised.......................................................14276
317.2  (a) amended.................................................34684
332  Revised.......................................................14281
342  Revised.......................................................14282
351  Authority citation revised....................................14285
351.2  (b) revised.................................................14285
351.3  (a) revised.................................................14285
351.5  (a), (b) and (d) revised....................................14285
351.7  (a) revised.................................................14285
352  Authority citation revised....................................14286

[[Page 1108]]

352.3  (a) and (b) revised.........................................14286
353  Authority citation revised....................................39602
353.40  (d) revised................................................39602
353.64  Revised....................................................39602
353.65  Removed; new 353.65 redesignated from 353.66...............39603
353.66  Redesignated as 353.65.....................................39603
357.21  (c) amended; (f) added.....................................38774
357.26  (b)(1)(vii), (viii), (4), (5), (6), (d) and (e) removed; 
        (f) redesignated as (d); (b)(2) and (3) revised............38774
358.0  (c) added...................................................40608
Chapter V
500.563  (c)(4) added..............................................28613
500.570  Added......................................................1872
500.571  Added.....................................................17855
    (a) revised; (b) redesignated as (c); new (b) added............28613
    Revised........................................................58986
500.572  Added.....................................................20766
500.573  Added.....................................................20766
500.574  Added.....................................................62230
500.612  Added......................................................9053
500.801  (b)(1) and (6) amended; (b)(2) and (3) revised; (c) added
                                                                    1387
500.803  Amended....................................................1387
500.808  (a)(6)(ii) and (c) amended.................................1387
500.809  Revised....................................................1387
500.901  Amended (OMB number).......................................6297
    Amended (OMB number)............................................9053
515.207  Added.....................................................15216
515.333  Added.....................................................53997
515.416  Added.....................................................53997
515.533  (b) redesignated as (c); new (b) added....................15216
515.540  Revised...................................................53998
515.560  (k) revised...............................................15216
    Revised........................................................53998
515.563  Revised...................................................53998
515.564  (c) revised; (d) added....................................53999
515.566  Added.....................................................53999
515.801  (b)(1) and (6) amended; (b)(2) and (3) revised; (c) added
                                                                    1388
515.803  Amended....................................................1388
515.808  (a)(6)(iii) and (d) amended................................1388
515.809  Revised....................................................1388
515.901  Revised (OMB number).......................................6297
520  Authority citation revised...............................1388, 6297
520.101  (a)(2) removed; (a)(3) redesignated as (a)(2).............44682
520.801  (b)(1) and (6) amended; (b)(2) and (3) revised.............1388
    (c) added.......................................................1389
520.803  Amended....................................................1389
520.809  Revised....................................................1389
520.901  Amended (OMB number).......................................6297
530  Removed........................................................1389
535.801  (b)(1) and (6) amended; (b)(2) and (3) revised; (c) added
                                                                    1389
535.803  Amended....................................................1389
535.807  Added......................................................1389
535.905  Amended (OMB number).......................................6297
550  Authority citation revised.............................41697, 54177
550.212  Added.....................................................41697
550.511  Heading and (g) revised; (a) amended......................41697
550.514  Technical correction........................................525
550.515  Removed...................................................41697
550.520  Added.....................................................41697
550.801  (b)(1) amended.............................................1389
    (b)(2) and (3) revised; (b)(6) amended; (c) added...............1390
550.802  Amended....................................................1390
550.805  Amended...................................................41697
550.806  Revised....................................................1390
550.807  (a)(7)(iii) and (c) amended................................1390
550  Appendix A amended............................................10799
    Appendix A revised.............................................29425
    Appendix B revised.............................................29427
    Appendixes A and B amended.....................................54177
555  Authority citation revised....................................10291
555.503  Added.....................................................10291
555.901 (Subpart I)  Added.........................................10291
560.801  (b)(1) and (6) amended; (b)(2) and (3) revised; (c) added
                                                                    1390
560.802  Amended....................................................1390
560.806  (b)(3) amended.............................................1390
    (d) amended.....................................................1391
560.807  Revised....................................................1391
575.603  Removed...................................................39603
575.806  Revised....................................................1391
575.901  Added (OMB number).........................................6297
580  Added.........................................................10821
580.211  Added.....................................................23955
580.405  Amended...................................................23955
580.516  Added.....................................................39604

[[Page 1109]]

                                  1993

31 CFR
                                                                   58 FR
                                                                    Page
Chapter II
203  Revised; eff. 8-2-93..........................................35396
205.18  (b)(2) corrected............................................4460
210.6  (c) revised.................................................21636
250.2  Amended......................................................4578
250.3  (a)(1) and (b) amended.......................................4578
250.4  (b)(1) and (f) amended.......................................4578
250.6  Amended......................................................4578
251  Removed.......................................................25774
253  Removed.......................................................25775
254  Removed.......................................................25775
270  Revised.......................................................25943
290  Removed.......................................................25776
316.8  (c)(1) revised; (c)(2) introductory text through (viii) 
        removed; (c)(2)(ix) redesignated as (c)(2).................60936
    (e) amended....................................................60937
317.6  (b) revised.................................................63529
332.8  (b) revised.................................................60937
342.3  (b)(1) revised; (b)(2) introductory text, (i) and (ii) 
        removed; (b)(2)(iii) redesignated as (b)(2)................60937
    Amended........................................................60938
344.2  (c)(2)(1) through (4) redesignated as (c)(2)(i) through 
        (iv).......................................................31909
349  Removed.........................................................414
351.0  Amended.....................................................60938
351.2  (c) table, (e) introductory text, (1), (g)(3)(i) and (h) 
        amended; (g)(2) tables revised.............................60938
    (i) amended....................................................60939
351  Appendix amended..............................................60939
352.0  Amended.....................................................60947
352.2  (e)(1)(i) through (vi) redesignated (e)(1)(ii) through 
        (vii); new (e)(1)(i) added; (e)(1)(ii) and (2) revised; 
        (e)(1) amended.............................................60947
352  Table revised.................................................60947
356  Added...........................................................414
Chapter V
500  Authority citation revised....................................47644
500.413  Added.....................................................68530
500.508  (f) revised...............................................47644
500.566  (a) introductory text amended; (b) redesignated as (c); 
        heading and new (c) revised; new (b) added.................63084
500.575  Added.....................................................63084
500.576  Added.....................................................68531
500.577  Added.....................................................68532
500.603  Added.....................................................47644
500  Appendix A added..............................................68532
505.10  (b) amended................................................13198
505.31  (a)(1) and (2) revised.....................................13198
515  Authority citation revised......................34710, 45060, 47644
515.207  Revised...................................................34710
515.417  Added.....................................................34710
515.418  Added.....................................................45060
515.508  (f) added.................................................47645
515.559  Heading revised; (a), (b) and (c) redesignated as (b), 
        (c) and (d); new (a) added.................................34710
515.560  (b) revised...............................................34711
515.563  (b) amended...............................................45060
515.569  (b) and (c) amended.......................................45060
515.571  Added.....................................................34711
515.603  Added.....................................................47645
515.701--501.707 (Subpart G)  Revised..............................34711
515.901  Amended...................................................45061
550  Authority citation revised....................................47645
550.422  Added.....................................................13199
550.511  (g) revised...............................................47645
550.517  Added.....................................................13199
550.603  Added.....................................................47645
575  Authority citation revised....................................47645
575.503  (h) revised...............................................47646
575.606  Added.....................................................47646
580  Policy statement...............................................3228
580  Authority citation revised.............................40044, 47646
580.503  (h) revised...............................................47646
580.510  Revised....................................................4081
580.517  Added......................................................4081
580.518  Added.....................................................46541
    Removed........................................................54024
580.603  Revised...................................................47646
580  Appendix A added..............................................40044
    Appendix A amended.............................................46541
585  Added.........................................................13201
585  Authority citation revised.............................35828, 47646
585.201  (b) redesignated as (c); (b) added........................35828
585.215  Added.....................................................35829
585.216  Added.....................................................35829
585.217  Added.....................................................35829
585.218  Added.....................................................35829
585.301  (a) revised; (c) and (d) amended; (e) added...............35829
585.418  Added.....................................................35829
585.419  Added.....................................................35829
585.503  (a) revised...............................................47646
585.509  Heading and (a) revised; (b) and (d)(2)(ii) amended.......35829

[[Page 1110]]

585.524  Added.....................................................35829
585.603  Revised...................................................47647
585.901  Added.....................................................35830
590  Added.........................................................64904

                                  1994

31 CFR
                                                                   59 FR
                                                                    Page
Chapter II
205.3  Amended.....................................................28262
205.4  (b) revised; interim.................................14754, 51855
206  Revised........................................................4538
306  Authority citation revised....................................59036
306.2  (p), (q) and (r) redesignated as (r), (s) and (t); (g) 
        through (o) redesignated as (h) through (p); new (g) and 
        (q) added..................................................59036
306.40  Revised....................................................59036
306.45  Revised....................................................59037
306.46  Removed....................................................59037
306.47  Removed....................................................59037
306.48  Removed....................................................59037
306.49  Removed....................................................59037
315.1  (a) amended; (b) revised....................................10534
315.31  (d) amended................................................10535
315.35  (e) amended................................................10535
315.39  (b) amended................................................10535
315.40  (a) amended................................................10535
315.41  Amended....................................................10535
315.56  (a) amended................................................10535
316.3  Footnote 2 amended..........................................10535
316.6  (c) amended.................................................10535
316.10  (b) amended................................................10535
316.12  Revised....................................................10535
317.1  (b) revised; (c) amended....................................10535
317.3  (a) revised.................................................10535
    (b)  and (c) amended...........................................10536
317.5  (a) and (b) amended.........................................10536
317.6  (a)  and (b) amended........................................10536
317.7  Amended.....................................................10536
317.8  Amended.....................................................10536
317.9  (a) revised; (b) redesignated as (c); new (b) added; new 
        (c) heading and introductory text amended..................10536
321.1  (f) removed; (d) and (e) redesignated as (e) and (f); new 
        (d) added; new (f) revised.................................10536
321.2  (b) revised.................................................10536
321.3  (a) introductory text, concluding text, (b) and (c) 
        amended; (d) revised.......................................10536
321.5  (a) and (b) amended.........................................10537
321.8  (d) revised.................................................10537
321.11  (f) revised................................................10537
321.13  Amended....................................................10537
321.14  Revised....................................................10537
321.20  Amended....................................................10537
321.22  Amended....................................................10537
321.23  (a) introductory text amended; (a)(1) removed; (a)(2) and 
        (3) redesignated as (a)(1) and (2).........................10537
321.25  Revised....................................................10537
321  Appendix amended..............................................10538
330  Authority citation revised....................................10538
330.1  (a) revised.................................................10538
    (c)  and (i) amended...........................................10539
330.2  (a) and (c) amended.........................................10539
330.3  (a) and (b) amended.........................................10539
330.4  Introductory text amended...................................10539
330.6  (c) amended.................................................10539
330.7  Amended.....................................................10539
330.8  Amended.....................................................10539
330.9  Revised.....................................................10539
332.10  Amended....................................................10539
332.12  Revised....................................................10539
337  Revised.......................................................42162
342.7  (a) amended.................................................10540
342.9  Revised.....................................................10540
347  Removed.......................................................24047
348  Removed........................................................5724
351.5  (b)(1) amended..............................................10540
351.7  (b) amended.................................................10540
351.12  Revised....................................................10540
352.2  (h) amended.................................................10540
352.5  Amended.....................................................10540
352.7  (b) and (c) amended.........................................10540
352.13  Revised....................................................10541
353.1  (a) amended; (b) revised....................................10541
353.13  (d) introductory text amended..............................10541
353.31  (d) amended................................................10541
353.35  (c) amended................................................10541
353.39  (b) amended................................................10541
353.40  (a) amended................................................10541
353.41  Amended....................................................10541
356  Heading revised...............................................28774
356.2  Amended.....................................................28774
356.11  (b)(2) and (3) redesignated as (b)(3) and (4); new (b)(2) 
        added......................................................28774
356.16  (b)(2)(ii) revised; (b)(2)(iii) added......................28774
356.24  (a) and (c) revised........................................28775
356  Exhibit B heading revised.....................................28775
357  Authority citation revised....................................59038
357.3  Amended.....................................................59038
357.30  Amended....................................................59038
357.31  Revised....................................................59038

[[Page 1111]]

Chapter V
500  Authority citation revised....................................60559
500.570  Revised...................................................60559
500.578  Added......................................................5696
500.579  Added.....................................................26602
500.701--500.707 (Subpart G)  Revised..............................16776
500.901  Amended...................................................16777
505  Authority citation revised....................................16777
505.50  Revised....................................................16777
515  Authority citation revised....................................31142
515.416  Revised...................................................44885
515.417  Removed...................................................31142
515.522  Removed...................................................44885
515.528  (a) introductory text amended.............................44885
515.533  (d) added.................................................44885
515.560  (g) amended; (a) and (b) revised..........................44885
515.563  (a) introductory text and (1) revised; (c) removed........44885
515.564  (c) revised; (d) removed..................................44886
515.565  (b) removed; (c) redesignated as (b) and amended..........44886
515.566  (f) removed...............................................31142
515.566  (a)(3) and (c)(4)(ii) amended.............................44886
515.569  (c) and (d) amended.......................................44886
515.701  (a)(4) and (5) revised; (b) redesignated as (c); (a)(6) 
        and new (b) added..........................................31142
515.702  (a) revised...............................................31143
520  Authority citation revised....................................16777
520.701  Revised...................................................16777
550.304  Revised...................................................31143
550.516  Removed....................................................5106
550  Appendixes A and B amended.............................13211, 51108
    Appendix A amended.............................................35260
    Appendix B amended.............................................35261
565  Authority citation revised....................................24644
    Announcement...................................................46720
565.510  Revised...................................................55209
565.512  Added.....................................................24644
580  Policy statement.................................8134, 15342, 25817
    Authority citation revised.....................................16549
51066, 66476
580.211  Removed...................................................51066
580.516  Heading revised; (a) and (b) designation removed..........51067
580.518  Added.....................................................51067
580.519  Added.....................................................51067
580.520  Added.....................................................51067
580.521  Added.....................................................51067
580.522  Added.....................................................51067
580.523  Added.....................................................51067
580.524  Added.....................................................66476
580  Appendix A amended............................................16549
    Appendix A revised.............................................51067
Chapter VI
601  Revised.......................................................22973
605  Revised.......................................................41978
Chapter VIII
800  Authority citation revised....................................27179
800.208  Redesignated as 800.209; new 800.208 added................27179
800.209  Redesignated as 800.211; new 800.209 redesignated from 
        800.208....................................................27179
800.210  Redesignated as 800.212; new 800.210 added................27179
800.211  Redesignated as 800.213; new 800.211 redesignated from 
        800.209....................................................27179
800.212  Redesignated as 800.214; new 800.212 redesignated from 
        800.210....................................................27179
800.213  Redesignated as 800.215; new 800.213 redesignated from 
        800.211....................................................27179
800.214  Redesignated as 800.216; new 800.214 redesignated from 
        800.212....................................................27179
800.215  Redesignated as 800.217; new 800.215 redesignated from 
        800.213....................................................27179
800.216  Redesignated as 800.218; new 800.216 redesignated from 
        800.214....................................................27179
800.217  Redesignated as 800.219; new 800.217 redesignated from 
        800.215....................................................27179
800.218  Redesignated as 800.220; new 800.218 redesignated from 
        800.216....................................................27179
800.219  Redesignated as 800.221; new 800.219 redesignated from 
        800.217....................................................27179
800.220  Redesignated as 800.222; new 800.220 redesignated from 
        800.218....................................................27179
800.221  Redesignated as 800.223; new 800.221 redesignated from 
        800.219....................................................27179
800.222  Redesignated from 800.220 and amended.....................27179
800.223  Redesignated from 800.221.................................27179
800.301  (b)(5) Example 1 amended..................................27179
800.302  (d) introductory text amended.............................27179
800.401  (a) amended...............................................27179

[[Page 1112]]

800.402  (c)(3)(v)(A) revised; (c)(5)(i) and (ii)(E) amended; 
        (c)(5)(iii), (iv) and (i) added............................27179
800.504  Amended...................................................27179
800.601  (b), (c) and (d) amended..................................27180
800.702  (a) amended...............................................27180
800  Appendix redesignated as appendix A; appendix B added; new 
        appendix A and appendix B amended..........................27180

                                  1995

31 CFR
                                                                   60 FR
                                                                    Page
Chapter II
247  Added.........................................................25993
306.24  Added.......................................................4377
321  Appendix corrected; CFR correction............................35126
344  Revised........................................................4504
351  Authority citation revised....................................15431
351.0  Amended.....................................................15431
351.2  (e)(1) correctly revised; CFR correction....................10019
    (c), (e) heading, introductory text, (1), (2)(iii), (f)(2), 
(g) heading, introductory text, (2) and (h) amended................15431
    (h) and (i) amended; (j) added.................................15432
356.2  Amended.....................................................13907
356.12  (c)(1) revised.............................................13907
357.20  (f) added...................................................4377
390  Removed.......................................................65569
Chapter IV
413  Added.........................................................27885
Chapter V
Chapter  V Policy statement........................................34142
500.206  Heading, (a) and (b) revised; (c) and Example 4 amended 
                                                                    8934
500.332  Revised....................................................8934
500.550  Heading and (a) revised; (b) amended.......................8934
500.563  Revised....................................................8935
500.564  Removed....................................................8935
500.566  Heading, (a) introductory text and (1) revised; (b) 
        removed; (c) redesignated as (b)............................8935
500.569  Removed....................................................8935
500.571  Amended....................................................8935
500.578  Revised...................................................12886
500.579  Existing text designated as (a); (b) added.................8935
500.580  Added......................................................8935
500.581  Added......................................................8935
500.582  Added......................................................8935
500.583  Added......................................................8935
500.584  Added......................................................8935
505  Authority citation revised....................................34144
505.10  (b) revised................................................34144
505.31  (a) introductory text and (1) revised......................34144
515.206  Heading and (a) revised; (b) removed; (c), (d) and (e) 
        redesignated as (b), (c) and (d); new (b) amended..........39256
515.322  (a) revised...............................................54195
515.332  Revised...................................................39256
515.413  Removed...................................................54195
515.416  (a) introductory text and (1) revised.....................54195
515.417  Added.....................................................54195
515.419  Added.....................................................54196
515.527  Revised...................................................54196
515.528  Heading and (a) introductory text revised.................54196
515.542  Heading, (b) and (c) revised..............................39256
515.545  Heading and (a) revised...................................39257
515.560  (a), (b) and (g) revised..................................54196
515.561  Removed...................................................54196
515.563  Revised...................................................54196
515.565  (c) added.................................................54197
515.570  Removed...................................................39257
515.572  Added.....................................................54197
515.573  Added.....................................................54197
515.574  Added.....................................................54197
520  Removed.......................................................33726
540  Removed.......................................................33726
545  Removed.......................................................33726
550  Authority citation revised.....................................8301
    Appendix A amended.......................................8301, 37941
    Appendix B amended..............................................8304
555  Removed.......................................................33726
560  Revised.......................................................47063
565  Removed.......................................................33726
570  Removed.......................................................33726
575  Authority citation revised.....................................6376
    Appendix A amended........................................6377, 6378
    Appendix B amended..............................................6378
580  Removed.......................................................33726
585  Heading revised...............................................34145
    Authority citation revised.....................................34145
585.201  (a) amended; (c) redesignated as (d); new (c) added.......34145
585.202  (a), (b) and (e) revised..................................34145
585.203  (a)(2) and (c) amended....................................34145
585.217  Revised...................................................34145
585.218  Revised...................................................34145
585.301  (a), (d) and (e) amended; (f) added.......................34146

[[Page 1113]]

585.302  Revised...................................................34146
585.403  Revised...................................................34146
585.405  Amended...................................................34146
585.406  (a) revised...............................................34146
585.408  (a) revised...............................................34146
585.412  Note revised..............................................34146
585.413  Amended...................................................34146
585.420  Added.....................................................34146
585.504  (c) introductory text revised.............................34146
585.505  (a) and (b) revised.......................................34146
585.506  Heading, (a) and (b) revised..............................34147
585.512  (c) amended...............................................34147
585.524  Heading, (a) and (b) amended..............................34147

                                  1996

31 CFR
                                                                   61 FR
                                                                    Page
Chapter II
208  Added; interim................................................39258
209  Removed.......................................................68155
211  Authority citation revised....................................41739
211.1  (a) revised.................................................41739
211.2  Revised.....................................................41739
214  Removed.......................................................43656
224.1  Revised.....................................................26840
224.5  Removed; new 224.5 redesignated from 224.6..................26840
224.6  Redesignated as 224.5; new 224.6 redesignated from 224.7 
        and revised................................................26840
224.7  Redesignated as 224.6.......................................26840
306.115  Revised...................................................43637
306.116  Removed; new 306.116 redesignated from 306.117 and 
        revised....................................................43637
306.117  Redesignated as 306.116; new 306.117 redesignated from 
        306.119 and revised........................................43637
306.118  Removed...................................................43637
306.119  Redesignated as 306.117...................................43637
306.120  Removed...................................................43637
306.121  Removed...................................................43637
306.122  Removed...................................................43637
306.115--306.122 (Subpart O)  Appendix removed.....................43637
321  Authority citation revised....................................37197
321.21  Revised....................................................37197
321  Appendix amended..............................................37197
344  Revised.......................................................55693
350  Removed.......................................................43637
351.2  (g)(3)(i) correctly revised; CFR correction..................5510
353.24  Added......................................................53822
356  Authority citation revised....................................37010
356.2  Amended..............................................37010, 43637
356.3  Introductory text revised; (a) amended......................43637
356.5  Introductory text amended...................................43637
356.11  (a)(1) amended.............................................37010
    (a)(2) amended.................................................43637
356.13  (a)(2) removed; (a)(1) redesignated as (a); new (a) 
        amended....................................................37010
356.15  Redesignated as 356.16; new 356.15 added...................37010
356.16  Redesignated as 356.17; new 356.16 redesignated from 
        356.15.....................................................37010
356.17  Redesignated from 356.16...................................37010
    (b) revised....................................................43637
    (a)(2) and (b)(2) redesignated as (a)(3) and (b)(3); (a) 
introductory text, new (3), (b) introductory text and new (3) 
introductory text revised; new (a)(2) and new (b)(2) added.........54909
356.21  (a) revised................................................37011
356.22  (b) amended................................................37011
356.25  (b) redesignated as (c); (a) introductory text and new (c) 
        introductory text revised; new (b) added...................54910
356.31  (a) and (c) amended; (d) revised...........................43637
356.36  Revised (OMB numbers)......................................37011
356  Appendix A amended............................................37011
357.0  Added.......................................................43628
357.1  Added.......................................................43628
357.2  Redesignated from 357.3 and amended.........................43628
357.3  Redesignated as 357.2.......................................43628
357.10--357.14 (Subpart B)  Added..................................43629
357.26  (b)(3) revised..............................................6113
357.41  Revised....................................................43630
357.42  Added......................................................43630
357.44  Added......................................................43631
357  Appendix B added..............................................43631
358.3  Revised.....................................................43638
361.7  (a) amended.................................................20437
361.8  Amended.....................................................20437
370  Heading revised...............................................54910
370.0  Revised...............................................6114, 54910
370.1--370.4 (Subpart A)  Subpart designation and heading added....54910
370.1  Amended.....................................................54910

[[Page 1114]]

370.2  Redesignated as 370.5.......................................54910
370.3  Redesignated as 370.6.......................................54910
370.4  Redesignated as 370.7.......................................54910
370.5--370.16 (Subpart B)  Subpart designation and heading added 
                                                                   54910
370.5  Redesignated as 370.8; new 370.5 redesignated from 370.2....54910
370.6  Redesignated as 370.9; new 370.6 redesignated from 370.3....54910
370.7  Redesignated as 370.10; new 370.7 redesignated from 370.4 
                                                                   54910
370.8  Redesignated as 370.11; new 370.8 redesignated from 370.5 
                                                                   54910
370.9  Redesignated as 370.12; new 370.9 redesignated from 370.6 
                                                                   54910
370.10  Redesignated as 370.13; new 370.10 redesignated from 370.7
                                                                   54910
370.11  Redesignated as 370.14; new 370.11 redesignated from 370.8
                                                                   54910
370.12  Redesignated as 370.15; new 370.12 redesignated from 370.9
                                                                   54910
370.13  Redesignated as 370.30; new 370.13 redesignated from 
        370.10.....................................................54910
370.14  Redesignated as 370.16; new 370.14 redesignated from 
        370.11.....................................................54910
370.15  Redesignated as 370.31; new 370.15 redesignated from 
        370.12; heading revised....................................54910
370.16  Redesignated from 370.14...................................54910
370.20--370.25 (Subpart C)  Added..................................54910
370.30--370.31 (Subpart D)  Subpart designation and heading added 
                                                                   54911
370.30  Redesignated from 370.13...................................54910
370.31  Redesignated from 370.15...................................54910
    Revised........................................................54911
Chapter IV
411  Added.........................................................27281
Chapter V
500  Authority citation revised.............................43460, 54938
500.306  Note added................................................32938
500.573  Revised....................................................9344
500.701  (c) added.................................................43460
    (a)(6) removed; (b) and (c) redesignated as (c) and (d); (a) 
introductory text, (3) and new (c) revised; new (b) added..........54938
515  Authority citation revised......................37386, 43461, 54938
515.208  Added.....................................................37386
515.306  Note added................................................32938
515.311  Existing text designated as (a); (b) added................37386
515.334  Added.....................................................37386
515.335  Added.....................................................37386
515.336  Added.....................................................37386
515.701  (a)(5) removed; (a)(6) redesignated as (a)(5); (d) added 
                                                                   37386
    (e) added......................................................43461
    (a)(5) removed; (b) through (e) redesignated as (c) through 
(f); (a) introductory text, (3) and new (d) revised; new (b) added
                                                                   54938
535  Authority citation revised.............................43461, 54938
535.217  (b) revised................................................8216
    Corrected......................................................15382
535.701  (c) added.................................................43461
    (b) and (c) redesignated as (c) and (d); (a) and new (c) 
revised; new (b) added.............................................54938
550  Authority citation revised.............................43461, 54939
550.304  Note added................................................32938
550.701  (c) redesignated as (d); new (c) added....................43461
    (b), (c) and (d) redesignated as (c), (d) and (e); (a) and new 
(c) revised; new (b) added.........................................54939
550  Appendixes A and B removed....................................32938
560  Authority citation revised......................43461, 54939, 58480
560.603  (f)(2) revised............................................58481
560.701  (e) added.................................................43461
    (b), (c) and (e) redesignated as (c), (e) and (d); (a) and new 
(c) revised; new (b) added.........................................54939
575  Authority citation revised......................43461, 54939, 65313
575.306  Note added................................................32938
575.323  Added.....................................................36628
575.324  Added.....................................................36628
575.325  Added.....................................................36628

[[Page 1115]]

    Revised........................................................65313
575.326  Added.....................................................36628
575.327  Added.....................................................65313
575.328  Added.....................................................65313
575.522  Added.....................................................36628
    (a)(2) removed; (a)(3), (4) and (b) through (e) redesignated 
as (a)(2), (3) and (c) through (f); new (b) added; new (c) amended
                                                                   65313
575.523  Added.....................................................65313
575.524  Added.....................................................65314
575.525  Added.....................................................65314
575.526  Added.....................................................65315
575.701  (d) redesignated as (e); new (d) added....................43461
    (b) through (e) redesignated as (c) through (f); (a) 
introductory text, (1) and new (d) revised; new (b) added; new (c) 
amended............................................................54939
575.901  Amended (OMB number)......................................65315
575  Appendixes A and B removed....................................32938
585  Authority citation revised....................................54940
585.201  (c) note added............................................32938
585.311  Noted revised.............................................32938
585.525  Added......................................................1284
585.526  Added......................................................1284
585.527  Added.....................................................24697
585.701  (b), (c) and (d) redesignated as (c), (d) and (e); (a) 
        and new (d) revised; new (b) added; new (c) amended........54940
590  Authority citation revised....................................54940
590.701  (b), (c) and (d) redesignated as (c), (d) and (e); (a) 
        and new (d) revised; new (b) added; new (c) amended........54940
595  Added..........................................................3806
    Authority citation revised.....................................54940
595.311  Note added................................................32938
595.701  (b) redesignated as (c); (a) and new (c) revised; new (b) 
        added......................................................54940
596  Added.........................................................43463
596.505  Added.....................................................67944
Chapter  V Appendixes A, B and C added.............................32939
    Appendixes A and B amended..............................43459, 64290
    Appendix C amended.............................................54334
Chapter VI
601  Revised.......................................................10895

                                  1997

31 CFR
                                                                   62 FR
                                                                    Page
Chapter II
202  Authority citation revised....................................45520
202.1  Revised.....................................................45520
202.2  (a)(2) removed; (a)(3) and (4) redesignated as (a)(2) and 
        (3); (a)(1), new (2) and new (3) revised; authority 
        citation removed...........................................45521
202.3  (a), (b)(1) introductory text, (2) introductory text and 
        (i) revised; authority citation removed....................45521
202.4  Heading, introductory text, (c), (d) and (e) revised; 
        authority citation removed.................................45521
202.6  (b) and (e)(1) revised; authority citation removed..........45521
202.7  (a) revised; authority citation removed.....................45521
285  Added; interim; eff. 7-25-97..................................34179
    Authority citation revised.....................................36210
285.1  Added; interim..............................................36210
343  Revised.......................................................49914
344.1  (f) through (j) redesignated as (g) through (k); new (f) 
        added; new (g)(3) revised..................................46445
344.3  (b)(3)(iii) revised.........................................46446
351.0  Amended.....................................................24281
351.2  (j) heading, (1) introductory text, (vi), (2) and (3) 
        amended; (k) added.........................................24281
351.9  Revised.....................................................24283
351  Appendix Table 3 amended......................................24283
354  Revised.........................................................622
356.2  Amended................................................850, 25114
356.3  Introductory text and (a) heading revised; Footnote 1 
        removed; (a) and (b) amended.................................850
356.5  Introductory text, (b) and (c) revised........................851
356.10  Amended......................................................851
356.12  (a) and (b)(2) amended; (c)(1)(i) and (ii) revised; 
        (c)(1)(iii) added............................................851
    Corrected......................................................32033
    (c)(1)(i) revised..............................................43093
356.13  (a) revised....................................851, 25115, 43093
356.17  Introductory text amended; (a) introductory text and (b) 
        introductory text revised....................................852
    Corrected......................................................32032
356.20  (c) introductory text revised; (c)(2) amended................852
356.25  (a)(2) amended; (d) added....................................852

[[Page 1116]]

356.30  Existing text designated as (a); (a) heading and (b) 
        added; new (a) amended.......................................852
356.31  (c) and (d) redesignated as (g) and (h); (a) and new (h) 
        revised; (b) and new (g) amended; new (c), new (d), (e) 
        and (f) added................................................852
356.32  Revised......................................................853
356  Appendix B amended...............................854, 855, 864, 866
    Appendixes C and D added; Exhibit A amended......................873
    Appendix B and Exhibit A amended...............................43094
357  Determination......................................26, 33010, 61912
357.2  Amended.....................................................18694
    Corrected......................................................33548
357.20  (e) introductory text, (1), (2) and (3) revised; (e) 
        concluding text amended; (f) redesignated as (g); (e)(4) 
        and new (f) added..........................................18004
    Corrected......................................................32033
357.22  (b) through (e) redesignated as (c) through (f); new (b) 
        added......................................................46861
357.27  (b) revised................................................18694
357.29  Amended....................................................18694
357.30  Amended....................................................18694
357  Appendix B amended............................................43284
370.1 (Subpart A)  Correctly designated............................33548
Chapter V
500  Authority citation revised.............................17548, 45101
500.101 (Subpart A)  Heading revised...............................45101
500.101  (a) amended...............................................45101
500.201  (e) added.................................................45101
500.306  Note amended..............................................45101
500.508  (f) removed; note added...................................45101
500.585  Added.....................................................17548
500.601 (Subpart F)  Revised.......................................45101
500.602  Added.....................................................64721
500.701  (a) introductory text amended.............................45101
500.801  Revised...................................................45101
500.802  Removed; new 500.802 redesignated from 500.807............45101
500.803  Removed; new 500.803 redesignated from 500.808............45101
500.804  Removed...................................................45101
500.805  Removed...................................................45101
500.806  Removed...................................................45101
500.807  Redesignated as 500.802...................................45101
500.808  Redesignated as 500.803...................................45101
500.809  Removed...................................................45101
500.901  Revised...................................................45101
    Amended; OMB number............................................64722
501  Added.........................................................45101
501.101  Revised...................................................52494
501.601  Note added................................................52494
501.602  Amended...................................................52494
501.603  Note added................................................52495
501.806  (b) revised...............................................52495
501.807  (a) revised...............................................52495
505  Authority citation revised....................................45106
505.40  Amended....................................................45106
505.60  Revised....................................................45106
515  Authority citation revised....................................45106
515.101  (a) amended...............................................45106
515.201  (e) added.................................................45106
515.306  Note amended..............................................45106
515.508  (f) removed; note added...................................45106
515.601 (Subpart F)  Revised.......................................45106
515.701  (a) introductory text amended.............................45106
515.801  Revised...................................................45106
515.802  Removed; new 515.802 redesignated from 515.807............45106
515.803  Removed; new 515.803 redesignated from 515.808............45106
500.804  Removed...................................................45101
500.805  Removed...................................................45101
500.806  Removed...................................................45101
500.807  Redesignated as 500.802...................................45101
500.808  Redesignated as 500.803...................................45101
500.809  Removed...................................................45101
500.901  Revised...................................................45101
    Amended; OMB number............................................64722
501  Added.........................................................45101
501.101  Revised...................................................52494
501.601  Note added................................................52494
501.602  Amended...................................................52494
501.603  Note added................................................52495
501.806  (b) revised...............................................52495
501.807  (a) revised...............................................52495
505  Authority citation revised....................................45106
505.40  Amended....................................................45106
505.60  Revised....................................................45106
515  Authority citation revised....................................45106
515.101  (a) amended...............................................45106
515.201  (e) added.................................................45106
515.306  Note amended..............................................45106
515.508  (f) removed; note added...................................45106
515.601 (Subpart F)  Revised.......................................45106
515.701  (a) introductory text amended.............................45106
515.801  Revised...................................................45106
515.802  Removed; new 515.802 redesignated from 515.807............45106

[[Page 1117]]

515.803  Removed; new 515.803 redesignated from 515.808............45106
515.804  Removed...................................................45106
515.805  Removed...................................................45106
515.806  Removed...................................................45106
515.807  Redesignated as 515.802...................................45106
515.808  Redesignated as 515.803...................................45106
515.901  Revised...................................................45106
535  Authority citation revised....................................45106
535.101  (a) amended...............................................45107
535.508  (f) removed; note added...................................45107
535.601 (Subpart F)  Revised.......................................45107
535.701  (a) introductory text amended.............................45107
535.801 (Subpart H)  Revised.......................................45107
535.905  Revised...................................................45107
536  Added..........................................................9960
    Authority citation revised.....................................45107
536.101  (a) amended...............................................45107
536.201  Existing text designated as (a); (b) added................45107
536.312  Note added................................................45107
536.503  (a) revised; note added...................................45107
536.601 (Subpart F)  Revised.......................................45107
536.801  Revised...................................................45107
536.802  Removed; new 536.802 redesignated from 536.805............45108
536.803  Removed...................................................45108
536.804  Removed...................................................45108
536.805  Redesignated as 536.802...................................45108
536.806  Removed...................................................45108
536.901  Revised...................................................45108
550  Authority citation revised....................................45108
550.101  (a) amended...............................................45108
550.209  (c) added.................................................45108
550.304  Note amended..............................................45108
550.511  (g) removed; (h) redesignated as (g); new (g) amended; 
        note added.................................................45108
550.601 (Subpart F)  Revised.......................................45108
550.701  (a) introductory text amended.............................45108
550.801  Revised...................................................45108
550.802  Removed; new 550.802 redesignated from 550.805............45108
550.803  Removed; new 550.803 redesignated from 550.807............45108
550.804  Removed...................................................45108
550.805  Redesignated as 550.802...................................45108
550.806  Removed...................................................45108
550.807  Redesignated as 550.803...................................45108
550.901  Revised...................................................45108
560  Reporting time extension.......................................1832
    Authority citation revised.......................19671, 41852, 45108
560.101  (a) amended...............................................45109
560.510  (d) revised...............................................41852
560.525  (a) introductory text, (3) and (5)(i) revised.............41852
560.601  Revised...................................................45109
560.602  Removed...................................................45109
560.603  Revised...................................................19671
560.701  (a) introductory text amended.............................45109
560.801  Revised...................................................45109
560.802  Removed; new 560.802 redesignated from 560.805............45109
560.803  Removed; new 560.803 redesignated from 560.806............45109
560.804  Removed...................................................45109
560.805  Redesignated as 560.802...................................45109
560.806  Redesignated as 560.803...................................45109
560.807  Removed...................................................45109
560.901  Revised...................................................45109
575  Authority citation revised....................................45109
575.101  (a) amended...............................................45109
575.201  (c) added.................................................45109
575.306  Note amended..............................................45109
575.503  (h) removed; note added...................................45109
575.601 (Subpart F)  Revised.......................................45109
575.701  (a) introductory text amended.............................45109
575.801  Revised...................................................45109
575.802  Removed; new 575.802 redesignated from 575.805............45109
575.803  Removed...................................................45109
575.804  Removed...................................................45109
575.805  Redesignated as 575.802...................................45109
575.806  Removed...................................................45109
575.901  Revised...................................................45110
585  Authority citation revised.............................19673, 45110
585.101  (a) amended...............................................45110
585.201  (c) note amended; (e) added...............................45110
585.311  Note amended..............................................45110
585.503  (a) revised; note added...................................45110
585.528  Added.....................................................19673
585.601 (Subpart F)  Revised.......................................45110
585.701  (a) introductory text amended.............................45110
585.801  Revised...................................................45110
585.802  Removed; new 585.802 redesignated from 585.805............45110
585.803  Removed...................................................45110
585.804  Removed...................................................45110
585.805  Redesignated as 585.802...................................45110
585.806  Removed...................................................45110
585.901  Revised...................................................45110
590  Authority citation revised....................................45110
590.101  (a) amended...............................................45111

[[Page 1118]]

590.601 (Subpart F)  Revised.......................................45111
590.701  (a) introductory text amended.............................45111
590.801  Revised...................................................45111
590.802  Removed; new 590.802 redesignated from 590.805............45111
590.803  Removed...................................................45111
590.804  Removed...................................................45111
590.805  Redesignated as 590.802...................................45111
590.806  Removed...................................................45111
590.901  Added.....................................................45111
595  Authority citation revised....................................45111
595.101  (a) amended...............................................45111
595.201  Existing text designated as (a); (b) added................45111
595.311  Note amended..............................................45111
595.503  (a) revised; note added...................................45111
595.601 (Subpart F)  Revised.......................................45111
595.701  (a) introductory text amended.............................45111
595.801  Revised...................................................45111
595.802  Removed; new 595.802 redesignated from 595.805............45111
595.803  Removed...................................................45111
595.804  Removed...................................................45111
595.805  Redesignated as 595.802...................................45111
595.806  Removed...................................................45111
595.901  Revised...................................................45111
596  Authority citation revised....................................45112
596.101  (a) amended...............................................45112
596.601 (Subpart F)  Revised.......................................45112
596.801  Revised...................................................45112
596.802  Removed; new 596.802 redesignated from 596.805............45112
596.803  Removed...................................................45112
596.804  Removed...................................................45112
596.805  Redesignated as 596.802...................................45112
596.806  Removed...................................................45112
596.901  Revised...................................................45112
597  Added.........................................................52495
Chapter V  Appendixes A and B amended....2904, 2906, 2909, 19501, 19503, 
                                                            41851, 48178
    Appendix C amended......................................19500, 19673
    Appendix A revised.............................................34936
    Appendix B revised.............................................34972
    Appendix C revised.............................................35029
    Notes to Appendixes revised....................................67729
    Appendix A amended.............................................67730
    Appendix B amended.............................................67732

                                  1998

31 CFR
                                                                   63 FR
                                                                    Page
Chapter II
203  Revised........................................................5650
208  Revised.......................................................51502
285  Authority citation revised........16356, 23357, 25139, 67756, 72094
    Regulation at 62 FR 34179 confirmed............................46140
285.1  Regulation at 62 FR 36210 confirmed; (a) amended; (g), (m), 
        (n) and (o) revised; (j)(5) added..........................46145
285.3  Added.......................................................72094
285.4  Added; interim..............................................44988
    Regulation at 63 FR 44988 confirmed............................71204
285.7  Added; interim..............................................23357
285.11  Added......................................................25139
285.12 (Subpart B)  Added; interim.................................16356
285.13  Added......................................................67756
317  Authority citation revised.............................38041, 64550
317.0  Revised.....................................................38041
317.1  (d) revised.................................................38041
    Revised........................................................64550
317.2  Revised.....................................................64550
317.3  (a) introductory text revised; (b) and (c) amended..........64550
317.6  (b) revised.................................................64550
317.8  Appendix amended.....................................38041, 64550
317.9  (b)(2) removed; (b)(1) redesignated as (b); new (b) table 
        amended....................................................38041
321  Authority citation revised....................................38042
321.0  (a) and (b) revised.........................................38042
321.1  (o) revised.................................................38042
321.3  (c) revised.................................................38042
321.6  Revised.....................................................38042
321.7  (a) and (g) revised.........................................38042
321.9  (a) revised.................................................38042
321.12  Revised....................................................38042
321.25  (b)(2) removed; (b)(1) redesignated as (b); new (b) table 
        amended....................................................38042
321  Appendix amended.......................................38042, 38043
330  Authority citation revised....................................38044
330.1  (f) revised.................................................38044
330.5  (a) revised.................................................38044
330.6  (a) revised.................................................38044
330.7  Revised.....................................................38044
330.8  Revised.....................................................38044
330.9  (b)(2) removed; (b)(1) redesignated as (b); new (b) table 
        amended....................................................38044
330.10  Revised....................................................38044
351.1  Revised.....................................................64551
351.5  Revised.....................................................64551
353  Authority citation revised....................................64551

[[Page 1119]]

353.6  (b)(4) amended..............................................64551
353.13  (c)(3) amended.............................................64551
353.21  (a) revised................................................64551
353.27  Revised....................................................64551
356.2  Amended; eff. 3-31-99.......................................35783
356.12  (b)(2) revised..............................................4187
356.31  Revised; eff. 3-31-99......................................35783
356  Appendix B amended; eff. 3-31-99..............................35784
    Exhibit C heading revised; eff. 3-31-99........................35785
357  Determination...................................20099, 35807, 50159
    Appendix B amended.............................................69191
358  Revised.......................................................11355
359  Added.........................................................38044
359.2  (e)(1)(i) through (v) revised...............................45946
359.3  (b)(1) revised..............................................45947
360  Added.........................................................38049
370  Authority citation revised....................................64552
    Heading revised................................................64552
370.0--370.1 (Subpart A)  Revised..................................64552
370.20--370.25 (Subpart C)  Heading revised........................64553
370.30--370.31 (Subpart D)  Redesignated as 370.60--370.61 
        (Subpart F)................................................64553
370.30--370.38 (Subpart D)  Added..................................64553
370.50--370.57 (Subpart E)  Added..................................64554
370.60--370.61 (Subpart F)  redesignated from 370.30-370.31 
        (Subpart D)................................................64553
Chapter V
500  Authority citation revised....................................10323
500.701--500.718 (Subpart G)  Revised..............................10324
501.803  Correctly revised.........................................35809
505  Authority citation revised....................................10331
505.50  Revised....................................................10331
515  Authority citation revised.............................10331, 27349
515.560  (g) revised...............................................27351
    Corrected......................................................35808
515.563  Revised...................................................27349
515.564  (c) amended...............................................27349
515.566  (a)(2) amended............................................27349
515.569  (d) revised...............................................27349
515.701--515.718 (Subpart G)  Revised..............................10331
537  Added.........................................................27847
538  Added.........................................................35810
560  Authority citation revised....................................62941
560.525  Corrected.................................................35808
560.603  Revised...................................................62941
575  Authority citation revised....................................62942
575.522  Heading revised; (a)(2) and (3) amended; (a)(4) added.....62942
585  Authority citation revised....................................59884
585.528  Heading revised; (d) added................................59884
586  Added.........................................................54576
Chapter V  Appendixes A and B amended..............................28896
    Note 6 to Appendixes revised...................................29609
    Appendix A amended.............................................29609
    Appendix B amended......................................29611, 29612
    Appendix C amended.............................................29612
Chapter VII
700  Revised.......................................................39730

                                  1999

31 CFR
                                                                   64 FR
                                                                    Page
Chapter II
205.4--205.18 (Subpart A)  Appendix A revised......................24243
210  Revised.......................................................17487
225  Revised........................................................4763
285.8  Added; interim..............................................71231
285.11  (g)(2) revised.............................................22908
285.12  Heading, (b), (c)(3), (d)(4), (f), (g), (h) and (j) 
        revised; (c)(4), (d)(5)(iii) and (6) added; (a) amended....22908
306.1  Revised.....................................................38125
306.2  (c) revised.................................................38125
306.3  Revised.....................................................38125
306.12  Amended....................................................38125
306.15  (a) revised; (b) introductory text amended; (b)(2) revised
                                                                   38125
306.17  Revised....................................................38126
306.19  Revised....................................................38126
306.23  (c) revised; (g) amended...................................38126
306.24  Amended....................................................38126
306.25  (a) amended................................................38126
306.26  Revised....................................................38126
306.27  Amended....................................................38126
306.28  Removed....................................................38126
306.37  (d) revised................................................38126
306.38  Amended....................................................38126
306.40  Amended....................................................38126
306.41  Amended....................................................38126
306.43  Amended....................................................38126
306.56  (a) and (b) amended........................................38126
306.57  (c)(1) amended.............................................38126
306.117  Heading and (d) revised; (b) amended......................38126

[[Page 1120]]

315.31  (b) and (c) amended; (h)(2) and (7) removed; (h)(3) 
        through (6), (8) and (i) redesignated as (h)(2) through 
        (5), (6) and (7); (h)(1), new (5), new (6) and new (7) 
        revised....................................................40486
353.31  (c)(2), (d) and (e) removed; (c)(1), (f), (g) and (h) 
        redesignated as (c) through (f); (b) and new (c) amended; 
        new (f)(2) and new (7) removed; new (f)(3) through (f)(6), 
        new (f)(8) and (i) redesignated as (f)(2) through (5), (6) 
        and (7); new (f)(1), (5)(ii), (6) and (7) revised..........40487
356.2  Amended......................................................3634
356.20  (b) revised.................................................3634
356.21  (a) amended.................................................3634
356.23  Revised.....................................................3634
356  Appendix B and Exhibit A amended...............................3634
357.22  (a) introductory text revised...............................6527
357.26  Heading, (a) and (b) heading revised; (b)(1)(i), (iv), 
        (2), (3), (c) and (d) removed; (b)(1)(ii), (iii), (v) and 
        (vi) redesignated as (b), (c), (d) and (e); new (c) 
        heading, new (d) heading and (e) heading added.............40487
357.30  Revised....................................................40487
370  Revised.......................................................40487
Chapter V
501.807  Revised....................................................5614
515.206  Heading revised; (a) through (d) redesignated as (a)(1) 
        through (4); (a) heading and new (b) added; new (a)(3) and 
        new (4) amended............................................25812
515.302  (b) redesignated as (c); new (b) added....................25812
515.407  Amended...................................................25812
515.415  (b) and (c) amended.......................................25812
515.416  Removed...................................................25812
515.417  Removed...................................................25812
515.418  (b) amended...............................................25812
515.419  Removed...................................................25812
515.420  Added.....................................................25812
515.518  Removed...................................................25813
515.521  Removed; new 515.521 redesignated from 515.567............25813
515.522  Redesignated from 515.568.................................25813
515.523  (b)(3) amended............................................25813
515.525  (b) amended...............................................25813
515.527  (a) existing text designated as (a)(1); (a)(2) added......25813
515.533  Heading, (a) introductory text, (1) and (d) revised; (e), 
        (f) and note added.........................................25813
515.540  Redesignated as 515.569...................................25813
515.545  (b) amended; (c) added....................................25813
515.546  Redesignated from 515.558.................................25813
515.550  Redesignated from 515.571 and revised.....................25813
515.551  (a)(3) amended............................................25813
515.556  Removed...................................................25813
515.558  Redesignated as 515.546; new 515.558 redesignated from 
        515.562....................................................25813
515.559  (b)(2) and note added.....................................25814
515.560  Revised...................................................25814
515.561  Added.....................................................25815
515.562  Redesignated as 515.558...................................25813
    Added..........................................................25815
515.563  Removed...................................................25813
    Added..........................................................25815
515.564  Removed...................................................25813
    Added..........................................................25815
515.565  Removed...................................................25813
    Added..........................................................25816
515.566  Redesignated as 515.572...................................25813
    Added..........................................................25817
515.567  Redesignated as 515.521...................................25813
    Added..........................................................25817
515.568  Redesignated as 515.522...................................25813
515.569  Removed; new 515.569 redesignated from 515.540............25813
    Revised........................................................25818
515.570  Added.....................................................25818
515.571  Redesignated as 515.550...................................25813
    Added..........................................................25819
515.572  Redesignated as 515.573; new 515.572 redesignated from 
        515.566....................................................25813
    Amended; heading and (c)(4)(i) revised; (c)(4)(ii), (d)(2), 
(e)(2)(ii)(A), (D) and (3)(iii) introductory text amended..........25819
515.573  Removed...................................................25813
    Redesignated from 515.572......................................25813
515.574  (a) introductory text revised.............................25819
515.575  Added.....................................................25819
515.576  Added.....................................................25820
538.405  Revised...................................................41786
538.523  Added.....................................................41787
    Heading revised; (b)(4) amended................................58790

[[Page 1121]]

538.524  Added.....................................................41787
    Heading revised; (b)(4) amended................................58790
538.525  Added.....................................................41788
    (b) amended....................................................58790
538.526  Added.....................................................41788
    (b)(3) amended.................................................58790
538  Appendix A added..............................................41788
539  Added..........................................................8716
550  Authority citation revised....................................41789
550.405  Revised...................................................41789
550.569  Added.....................................................41789
    Heading and (a) introductory text revised; (b)(4) amended......58790
550.570  Added.....................................................41790
    Heading revised; (b)(4) amended................................58791
550.571  Added.....................................................41790
    (b) amended....................................................58791
550.572  Added.....................................................41790
    (b)(3) amended.................................................58791
550.573  Added.....................................................41791
550  Appendix A added..............................................41791
    Appendix B added...............................................58791
560.201  Revised...................................................20170
560.204  Revised...................................................20170
560.205  Revised...................................................20170
560.206  Revised...................................................20170
560.207  Revised...................................................20170
560.208  Revised...................................................20171
560.210  (c) and (d) revised.......................................20171
    (c)(2) amended.................................................58791
560.301  Revised...................................................20171
560.306  Revised...................................................20171
560.308  Revised...................................................20171
560.315  Heading, (a) introductory text, (b) introductory text and 
        (1) revised................................................20171
560.318  Removed...................................................20171
560.319  Revised...................................................20171
560.403  Added.....................................................20172
560.405  Added.....................................................41791
560.406  Revised...................................................20172
560.410  Revised...................................................20172
560.411  Removed...................................................20172
560.412  Revised...................................................20172
560.414  Revised...................................................20172
560.416  Added.....................................................20172
560.417  Added.....................................................20172
560.418  Added.....................................................20173
560.419  Added.....................................................20173
560.420  Added.....................................................20173
560.501  (d) and (e) added.........................................20173
560.505  (c) amended...............................................58791
    Revised........................................................20173
560.506  Revised...................................................20174
560.509  (a)(1) revised............................................20174
560.511  Added.....................................................20174
560.515  (a) revised; (d) removed..................................20174
560.516  (a)(3), (4) and (b) revised...............................20174
560.523  Revised...................................................20175
560.529  Added.....................................................20175
560.530  Added.....................................................41791
    Heading and (a) introductory text revised; (b)(4) amended......58791
560.531  Added.....................................................41792
    Heading revised; (b)(4) amended................................58791
560.532  Added.....................................................41793
    (b) amended; (c) revised.......................................58791
560.533  Added.....................................................41793
    (b)(3) amended; (c) revised....................................58791
560  Appendix designated as Appendix A; Appendix B added...........41793
    Appendix C added...............................................58792
560  Appendix added................................................20175
590  Revised.......................................................43926
Chapter  V Note 7 to Appendixes added..............................34985
    Appendix A amended.................34986, 34987, 34992, 35576, 35577
    Appendix A amended; Appendix B removed; Appendix C 
redesignated as Appendix B.........................................34991
    Appendices A and B amended.....................................60661
    Appendix B amended.............................................60671

                                  2000

31 CFR
                                                                   65 FR
                                                                    Page
Chapter II
202  Heading and authority citation revised........................55428
202.6  (b) revised.................................................55428
203.24  (d) revised................................................55429
210.2  (a) and (d) revised; interim................................18869
    Regulation at 65 FR 18869 eff. date corrected to 4-7-00........19818
210.3  (b) revised; interim........................................18869
    Regulation at 65 FR 18869 eff. date corrected to 4-7-00........19818
210.5  (a) revised; interim........................................18869
    Regulation at 65 FR 18869 eff. date corrected to 4-7-00........19818
    Corrected......................................................33449
225  Authority citation revised....................................55430
225.3  (e) revised.................................................55430
247  Removed.......................................................20905
306.128  Revised...................................................66175

[[Page 1122]]

317.2  Introductory text and (a) revised............................2035
344  Revised; interim..............................................55405
355  Revised.......................................................65700
356.31  (a) amended; (b)(1) revised................................66175
356  Exhibit C removed.............................................66175
358  Revised.......................................................65701
375  Added..........................................................3116
380  Added.........................................................55427
Chapter V
500.533  Revised...................................................38165
500.586  Added.....................................................38165
501  Authority citation revised....................................41335
501.801  (b)(2) revised............................................10707
501.805  (a) note added............................................41335
560.405  (b) and (d) revised; (c) amended; (e) added...............25643
560.524  (b) amended...............................................25643
560.534  Added.....................................................25643
560.535  Added.....................................................25643
598  Added.........................................................41336
Chapter V  Appendix A amended.................17591, 39100, 75630, 80750
Chapter IX
Chapter  IX Established............................................70395

                                  2001

31 CFR
                                                                   66 FR
                                                                    Page
Chapter II
210.2  (d) revised; interim........................................10580
210.3  (b) revised; interim........................................10580
211.1  (a) revised.................................................63623
285.11  (b)(3), (c), (e)(3) and (g) revised........................51868
337.0  Revised.....................................................56432
337.2  Revised.....................................................56432
337.4  (a) revised.................................................56432
337.14  Revised....................................................56432
337.15  Revised....................................................56432
356.13  (b) revised................................................56761
357  Determination.................................................33832
    Policy statement...............................................44526
Chapter V
501.801  (c) added; interim.........................................2728
515  Authority citation revised....................................36687
515.207  Note added; interim.......................................36687
515.533  Heading, (a) and (e) revised; (f) removed; interim........36687
515.559  Heading and note revised; interim.........................36687
515.560  (b) revised; interim......................................36688
535.215  (a) revised; interim......................................38554
535.333  Revised; interim..........................................38554
538  Authority citation revised....................................36688
538.205  Revised; interim..........................................36688
538.211  (b) through (e) redesignated as (c) through (f); new (b) 
        added; interim.............................................36688
538.405  (b) revised; interim......................................36688
538.521  Revised; interim...........................................2729
538.523  Revised; interim..........................................36688
538.524  Removed; interim..........................................36689
538.525  Heading and (d) revised; (e) added; interim...............36689
538.526  Heading, (a), (b) introductory text, (1) and (2) revised; 
        interim....................................................36689
539  Authority citation amended....................................57381
    Appendix I amended.............................................57381
540  Added; interim.................................................3305
    Revised........................................................38555
545  Added; interim.................................................2729
550  Authority citation revised....................................36690
550.306  Revised; interim..........................................36690
550.308  Revised; interim..........................................36690
550.318  Revised; interim..........................................36690
550.405  (b) revised; interim......................................36690
550.569  Revised; interim..........................................36690
550.570  Removed; interim..........................................36691
550.571  Heading and (d) revised; new (e) added; interim...........36691
550.572  Heading, (a), (b) introductory text, (1) and (2) revised; 
        interim....................................................36691
550.573  Revised; interim..........................................36692
560  Authority citation revised....................................36692
560.405  (b) revised; interim......................................36692
560.520  Heading revised; interim..................................36692
560.530  Revised; interim..........................................36692
560.531  Removed; interim..........................................36693
560.532  Heading and (d) revised; (e) added; interim...............36693
560.533  Heading, (a), (b) introductory text, (1) and (2) revised; 
        interim....................................................36693
586  Authority citation revised....................................50508
586.201  (a) note, (b) note and (d) note added; (c) and endnote 
        revised; interim...........................................50509
586.204  Note added; interim.......................................50509
586.302  Revised; interim..........................................50509
586.319  Revised; interim..........................................50509
586.405  Revised; interim..........................................50509
586.406  (a) amended; interim......................................50509
586.501  Amended; interim..........................................50509
586.517  Added; interim............................................50509
586.518  Added; interim............................................50509

[[Page 1123]]

586.519  Added; interim............................................50510
586.701  Revised; interim..........................................50510
586.702  Revised; interim..........................................50510
586.703  Revised; interim..........................................50510
586.704  Revised; interim..........................................50511
586.705  Revised; interim..........................................50511
587  Added; interim................................................50511
Chapter  V Appendix A amended..........29229, 54404, 57373, 57379--57381

                                  2002

   (Regulations published from January 1, 2002, through July 1, 2002)

31 CFR
                                                                   67 FR
                                                                    Page
Chapter II
203.2  (w) through (kk) redesignated as (x) through (ee) and (hh) 
        through (nn); new (w) added; (g), new (x), (dd) and (nn) 
        revised; (ff) and (gg) added...............................11575
203.3  (c) revised.................................................11576
203.13  (b), (c)(1) and (d)(1) revised.............................11576
203.19  Revised....................................................11576
203.21  Revised....................................................11576
203.22  (b) amended; (c) revised; (d) added........................11576
203.23  (a)(1), (2), (c), (d) and (e) revised; (f) added...........11576
203.24  (b) through (f) redesignated as (c) through (g); (a) and 
        new (d)(1) revised; new (b) added..........................11577
205  Revised.......................................................31885
210.2  (d) revised; interim........................................17902
210.3  (b) revised; interim........................................17903
210.6  (g), (h) and (i) added; interim.............................17903
210  Appendices A, B and C  added; interim.........................17903
240  Authority citation revised....................................36518
240.7  (a)(1), (b) and (c)(1) revised; interim.....................36518
240.8  (c) revised; interim........................................36518
240.9  Redesignated as 240.10; new 240.9 added; interim............36518
240.10  Redesignated as 240.11; new 240.10 redesignated from 
        240.9; interim.............................................36518
240.11  Redesignated as 240.12; new 240.11 redesignated from 
        240.10; interim............................................36518
240.12  Redesignated as 240.13; new 240.12 redesignated from 
        240.11; interim............................................36518
240.13  Redesignated as 240.14; new 240.13 redesignated from 
        240.12; (a)(2)(ii) revised; interim........................36518
240.14  Redesignated as 240.15; new 240.14 redesignated from 
        240.13; interim............................................36518
240.15  Redesignated as 240.16; new 240.15 redesignated from 
        240.14; interim............................................36518
240.16  Redesignated from 240.15; interim..........................36518
357.2  Amended......................................................7079
357.10--357.15 (Subpart B)  Revised.................................7080
357.44  Removed.....................................................7082
Chapter V
588  Added; interim................................................37673
591  Added; interim.................................................5473
Chapter V  Appendix A amended......................................16309


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