[Title 31 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2017 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 31
Money and Finance:Treasury
________________________
Parts 500 to End
Revised as of July 1, 2017
Containing a codification of documents of general
applicability and future effect
As of July 1, 2017
Published by the Office of the Federal Register
National Archives and Records Administration as a
Special Edition of the Federal Register
[[Page ii]]
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Table of Contents
Page
Explanation................................................. v
Title 31:
SUBTITLE B--Regulations Relating to Money and Finance
(Continued)
Chapter V--Office of Foreign Assets Control,
Department of the Treasury 5
Chapter VI--Bureau of Engraving and Printing,
Department of the Treasury 629
Chapter VII--Federal Law Enforcement Training
Center, Department of the Treasury 635
Chapter VIII--Office of Investment Security,
Department of the Treasury 639
Chapter IX--Federal Claims Collection Standards
(Department of the Treasury--Department of Justice) 665
Chapter X--Financial Crimes Enforcement Network,
Department of the Treasury 685
Finding Aids:
Table of CFR Titles and Chapters........................ 841
Alphabetical List of Agencies Appearing in the CFR...... 861
List of CFR Sections Affected........................... 871
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 31 CFR 500.101
refers to title 31, part
500, section 101.
----------------------------
[[Page v]]
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
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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
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To determine whether a Code volume has been amended since its
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OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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PAST PROVISIONS OF THE CODE
Provisions of the Code that are no longer in force and effect as of
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for 1949-1963, 1964-1972, 1973-1985, and 1986-2000.
``[RESERVED]'' TERMINOLOGY
The term ``[Reserved]'' is used as a place holder within the Code of
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INCORPORATION BY REFERENCE
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This material, like any other properly issued regulation, has the force
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What is a proper incorporation by reference? The Director of the
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CFR INDEXES AND TABULAR GUIDES
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alphabetical list of agencies publishing in the CFR are also included in
this volume.
[[Page vii]]
An index to the text of ``Title 3--The President'' is carried within
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INQUIRIES
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Oliver A. Potts,
Director,
Office of the Federal Register.
July 1, 2017.
[[Page ix]]
THIS TITLE
Title 31--Money and Finance: Treasury is composed of three volumes.
The parts in these volumes are arranged in the following order: Parts 0-
199, parts 200-499, and part 500 to end. The contents of these volumes
represent all current regulations codified under this title of the CFR
as of July 1, 2017.
For this volume, Robert J. Sheehan, III was Chief Editor. The Code
of Federal Regulations publication program is under the direction of
John Hyrum Martinez, assisted by Stephen J. Frattini.
[[Page 1]]
TITLE 31--MONEY AND FINANCE: TREASURY
(This book contains part 500 to end)
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SUBTITLE B--Regulations Relating to Money and Finance (Continued)
Part
chapter v--Office of Foreign Assets Control, Department of
the Treasury.............................................. 500
chapter vi--Bureau of Engraving and Printing, Department of
the Treasury.............................................. 601
chapter vii--Federal Law Enforcement Training Center,
Department of the Treasury................................ 700
chapter viii--Office of Investment Security, Department of
the Treasury.............................................. 800
chapter ix--Federal Claims Collection Standards (Department
of the Treasury--Department of Justice)................... 900
chapter x--Financial Crimes Enforcement Network, Department
of the Treasury........................................... 1010
[[Page 3]]
Subtitle B--Regulations Relating to Money and Finance (Continued)
[[Page 5]]
CHAPTER V--OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY
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Part Page
500 [Reserved]
501 Reporting, procedures and penalties
regulations............................. 7
510 North Korea sanctions regulations........... 52
515 Cuban assets control regulations............ 63
535 Iranian assets control regulations.......... 123
536 Narcotics trafficking sanctions regulations. 148
538 Sudanese sanctions regulations.............. 160
539 Weapons of mass destruction trade control
regulations............................. 196
541 Zimbabwe sanctions regulations.............. 204
542 Syrian sanctions regulations................ 220
543 Cote D'Ivoire sanctions regulations......... 249
544 Weapons of mass destruction proliferators
sanctions regulations................... 262
546 Darfur sanctions regulations................ 275
547 Democratic Republic of the Congo sanctions
regulations............................. 288
548 Belarus sanctions regulations............... 301
549 Lebanon sanctions regulations............... 314
551 Somalia sanctions regulations............... 327
552 Yemen sanctions regulations................. 336
553 Central African Republic sanctions
regulations............................. 344
554 Burundi sanctions regulations............... 355
558 South Sudan Sanctions Regulations........... 365
560 Iranian transactions and sanctions
regulations............................. 375
561 Iranian financial sanctions regulations..... 426
562 Iranian human rights abuses sanctions
regulations............................. 448
566 Hizballah financial sanctions regulations... 457
570 Libyan sanctions regulations................ 467
576 Iraq stabilization and insurgency sanctions
regulations............................. 476
578 Cyber-related sanctions regulations......... 492
588 Western Balkans stabilization regulations... 502
589 Ukraine related sanctions regulations....... 515
590 Transnational criminal organizations
sanctions regulations................... 528
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591 Venezuela sanctions regulations............. 537
592 Rough diamonds control regulations.......... 548
594 Global terrorism sanctions regulations...... 556
595 Terrorism sanctions regulations............. 576
596 Terrorism List Governments sanctions
regulations............................. 593
597 Foreign terrorist organizations sanctions
regulations............................. 597
598 Foreign narcotics kingpin sanctions
regulations............................. 613
599 [Reserved]
Appendix A to Chapter V--Information Pertaining to the
Specially Designated Nationals and Blocked Persons List... 625
[[Page 7]]
PART 500 [RESERVED]
PART 501_REPORTING, PROCEDURES AND PENALTIES REGULATIONS--
Table of Contents
Subpart A_Relation of This Part to Other Parts in This Chapter
Sec.
501.101 Relation of this part to other parts in this chapter.
Subpart B_Definitions
501.301 Definitions.
Subpart C_Reports
501.601 Records and recordkeeping requirements.
501.602 Reports to be furnished on demand.
501.603 Reports on blocked property.
501.604 Reports by U.S. financial institutions on rejected funds
transfers.
501.605 Reports on litigation, arbitration, and dispute resolution
proceedings.
501.606 Reporting and recordkeeping requirements applicable to economic
sanctions programs.
Subpart D_Trading With the Enemy Act (TWEA) Penalties
501.700 Applicability.
501.701 Penalties.
501.702 Definitions.
501.703 Overview of civil penalty process and construction of rules.
501.704 Appearance and practice.
501.705 Service and filing.
501.706 Prepenalty Notice; issuance by Director.
501.707 Response to Prepenalty Notice.
501.708 Director's finding of no penalty warranted.
501.709 Penalty Notice.
501.710 Settlement.
501.711 Hearing request.
501.712 Acknowledgment of hearing request.
501.713 Order Instituting Proceedings.
501.714 Answer to Order Instituting Proceedings.
501.715 Notice of hearing.
501.716 Default.
501.717 Consolidation of proceedings.
501.718 Conduct and order of hearings.
501.719 Ex parte communications.
501.720 Separation of functions.
501.721 Hearings to be public.
501.722 Prehearing conferences.
501.723 Prehearing disclosures; methods to discover additional matter.
501.724 Documents that may be withheld.
501.725 Confidential treatment of information in certain filings.
501.726 Motions.
501.727 Motion for summary disposition.
501.728 Subpoenas.
501.729 Sanctions.
501.730 Depositions upon oral examination.
501.731 Depositions upon written questions.
501.732 Evidence.
501.733 Evidence: confidential information; protective orders.
501.734 Introducing prior sworn statements of witnesses into the
record.
501.735 Proposed findings, conclusions and supporting briefs.
501.736 Authority of Administrative Law Judge.
501.737 Adjustments of time, postponements and adjournments.
501.738 Disqualification and withdrawal of Administrative Law Judge.
501.739 Record in proceedings before Administrative Law Judge;
retention of documents; copies.
501.740 Decision of Administrative Law Judge.
501.741 Review of decision or ruling.
501.742 Secretary's designee's consideration of decisions by
Administrative Law Judge.
501.743 Briefs filed with the Secretary's designee.
501.744 Record before the Secretary's designee.
501.745 Orders and decisions: signature, date and public availability.
501.746 Referral to United States Department of Justice; administrative
collection measures.
501.747 Procedures on remand of decisions.
Subpart E_Procedures
501.801 Licensing.
501.802 Decisions.
501.803 Amendment, modification, or revocation.
501.804 Rulemaking.
501.805 Rules governing availability of information.
501.806 Procedures for unblocking funds believed to have been blocked
due to mistaken identity.
501.807 Procedures governing delisting from the Specially Designated
Nationals and Blocked Persons List.
501.808 License application and other procedures applicable to economic
sanctions programs.
Subpart F_Paperwork Reduction Act
501.901 Paperwork Reduction Act notice.
Appendix A to Part 501--Economic Sanctions Enforcement Guidelines
Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, 2339B; 19 U.S.C. 3901-
3913; 21 U.S.C. 1901-1908; 22 U.S.C. 287c; 22 U.S.C. 2370(a), 6009,
6032,
[[Page 8]]
7205; 28 U.S.C. 2461 note; 31 U.S.C. 321(b); 50 U.S.C. 1701-1706; 50
U.S.C. App. 1-44.
Source: 62 FR 45101, Aug. 25, 1997, unless otherwise noted.
Subpart A_Relation of This Part to Other Parts in This Chapter
Sec. 501.101 Relation of this part to other parts in this chapter.
This part sets forth standard reporting and recordkeeping
requirements and license application and other procedures governing
transactions regulated pursuant to other parts codified in this chapter,
as well as to economic sanctions programs for which implementation and
administration are delegated to the Office of Foreign Assets Control.
Substantive prohibitions and policies particular to each economic
sanctions program are not contained in this part but are set forth in
the particular part of this chapter dedicated to that program, or, in
the case of economic sanctions programs not yet implemented in
regulations, in the applicable executive order or other authority.
License application procedures and reporting requirements set forth in
this part govern transactions undertaken pursuant to general or specific
licenses. The criteria for general and specific licenses pertaining to a
particular economic sanctions program are set forth in subpart E of the
individual parts in this chapter. Statements of licensing policy
contained in subpart E of the individual parts in this chapter, however,
may contain additional information collection provisions that require
production of specified documentation unique to a given general license
or statement of licensing policy.
[62 FR 52494, Oct. 8, 1997]
Subpart B_Definitions
Sec. 501.301 Definitions.
Definitions of terms used in this part are found in subpart C of the
part within this chapter applicable to the relevant application, record,
report, procedure or transaction. In the case of economic sanctions
programs for which implementation and administration are delegated to
the Office of Foreign Assets Control but for which regulations have not
yet been issued, the definitions of terms in this part are governed by
definitions contained in the implementing statute or Executive order.
Subpart C_Reports
Sec. 501.601 Records and recordkeeping requirements.
Except as otherwise provided, every person engaging in any
transaction subject to the provisions of this chapter shall keep a full
and accurate record of each such transaction engaged in, regardless of
whether such transaction is effected pursuant to license or otherwise,
and such record shall be available for examination for at least 5 years
after the date of such transaction. Except as otherwise provided, every
person holding property blocked pursuant to the provisions of this
chapter or funds transfers retained pursuant to Sec. 596.504(b) of this
chapter shall keep a full and accurate record of such property, and such
record shall be available for examination for the period of time that
such property is blocked and for at least 5 years after the date such
property is unblocked.
Note: See subpart F of part 597 for the relationship between this
section and part 597.
[62 FR 45101, Aug. 25, 1997, as amended at 62 FR 52494, Oct. 8, 1997]
Sec. 501.602 Reports to be furnished on demand.
Every person is required to furnish under oath, in the form of
reports or otherwise, from time to time and at any time as may be
required by the Director, Office of Foreign Assets Control, complete
information relative to any transaction, regardless of whether such
transaction is effected pursuant to license or otherwise, subject to the
provisions of this chapter or relative to any property in which any
foreign country or any national thereof has any interest of any nature
whatsoever, direct or indirect. The Director may require that such
reports include the production of any books of account, contracts,
letters or other papers connected with any such transaction or property,
in the custody or control of
[[Page 9]]
the persons required to make such reports. Reports with respect to
transactions may be required either before or after such transactions
are completed. Except as provided in parts 596 and 597, the Director
may, through any person or agency, conduct investigations, hold
hearings, administer oaths, examine witnesses, receive evidence, take
depositions, and require by subpoena the attendance and testimony of
witnesses and the production of all books, papers, and documents
relating to any matter under investigation, regardless of whether any
report has been required or filed in connection therewith.
Note: See subpart F of part 597 for the relationship between this
section and part 597.
[62 FR 45101, Aug. 25, 1997, as amended at 62 FR 52494, Oct. 8, 1997]
Sec. 501.603 Reports on blocked property.
(a) Who must report--(1) Holders of blocked property. Any person,
including a financial institution, holding property blocked pursuant to
this chapter must report. The requirement includes financial
institutions that receive and block payments or transfers. This
requirement is mandatory and applies to all U.S. persons (or persons
subject to U.S. jurisdiction in the case of parts 500 and 515 of this
chapter) who have in their possession or control any property or
interests in property blocked pursuant to this chapter.
(2) Primary responsibility to report. A report may be filed on
behalf of a holder of blocked property by an attorney, agent, or other
person. Primary responsibility for reporting blocked property, however,
rests with the actual holder of the property, or the person exercising
control over property located outside the United States, with the
following exceptions: primary responsibility for reporting any trust
assets rest with the trustee; and primary responsibility for reporting
real property rests with any U.S. co-owner, legal representative, agent,
or property manager in the United States. No person is excused from
filing a report by reason of the fact that another person has submitted
a report with regard to the same property, except upon actual knowledge
of the report filed by such other person. Reports filed are regarded as
privileged and confidential.
(3) Financial institutions. For purposes of this section, the term
``financial institution'' shall include a banking institution, domestic
bank, United States depository institution, financial institution, or
U.S. financial institution, as those terms are defined in the applicable
part of this chapter.
(b) What must be reported--(1) Initial reports--(i) When reports are
due. Reports are required to be filed within 10 business days from the
date that property becomes blocked. This reporting requirement includes
payments or transfers that are received and blocked by financial
institutions.
(ii) Contents of reports. Initial reports on blocked property shall
describe the owner or account party, the property, its location, any
existing or new account number or similar reference necessary to
identify the property, actual or estimated value and the date it was
blocked, and shall include the name and address of the holder, along
with the name and telephone number of a contact person from whom
compliance information can be obtained. If the report is filed by a
financial institution and involves the receipt of a payment or transfer
of funds which are blocked by the financial institution, the report
shall also include a photocopy of the payment or transfer instructions
received and shall confirm that the payment has been deposited into a
new or existing blocked account which is labeled as such and is
established in the name of, or contains a means of clearly identifying
the interest of, the individual or entity subject to blocking pursuant
to the requirements of this chapter.
(2) Annual reports--(i) When reports are due. A comprehensive report
on all blocked property held as of June 30 of the current year shall be
filed annually by September 30. The first annual report is due September
30, 1997.
(ii) Contents of reports. Annual reports shall be filed using Form
TDF 90-22.50, Annual Report of Blocked Property. Copies of Form TDF 90-
22.50 may be obtained directly from the Office of Foreign Assets Control
by downloading the form from the OFAC Reporting and License Application
Forms page on
[[Page 10]]
OFAC's Web site (https://www.treasury.gov/resource-center/sanctions/
Pages/forms-index.aspx). A copy of reports filed using form TDF 90-22.50
or in alternative formats must be retained for the reporter's records.
(c) Reports on retained funds pursuant to Sec. 596.504(b) of this
chapter. The reporting requirements set forth in this section are
applicable to any financial institution retaining funds pursuant to
Sec. 596.504(b) of this chapter, except that the account name shall
reflect the name of the person whose interest required retention of the
funds.
(d) Where to report. All reports must be filed with the Office of
Foreign Assets Control, Compliance Programs Division, U.S. Treasury
Department, 1500 Pennsylvania Avenue NW.--Annex, Washington, DC 20220.
Note: See subpart F of part 597 for the relationship between this
section and part 597.
[62 FR 45101, Aug. 25, 1997, as amended at 62 FR 52495, Oct. 8, 1997; 81
FR 76863, Nov. 4, 2016]
Sec. 501.604 Reports by U.S. financial institutions on rejected funds
transfers.
(a) Who must report. Any financial institution that rejects a funds
transfer where the funds are not blocked under the provisions of this
chapter, but where processing the transfer would nonetheless violate, or
facilitate an underlying transaction that is prohibited under, other
provisions contained in this chapter, must report. For purposes of this
section, the term ``financial institution'' shall include a banking
institution, depository institution or United States depository
institution, domestic bank, financial institution or U.S. financial
institution, as those terms are defined in the applicable part of this
chapter.
(b) Rejected transfers. Examples of transactions involving rejected
funds transfers include funds transfer instructions:
(1) Referencing a blocked vessel but where none of the parties or
financial institutions involved in the transaction is a blocked person;
(2) Transferring unlicensed gifts or charitable donations from the
Government of Syria to a U.S. person;
(3) Crediting Iranian accounts on the books of a U.S. financial
institution; and
(4) Making unauthorized transfers from U.S. persons to Iran or the
Government of Iran.
(c) When reports are due. Reports are required to be filed within 10
business days by any financial institution rejecting instructions to
execute payments or transfers involving underlying transactions
prohibited by the provisions of this chapter.
(d) What must be reported. The report shall include the name and
address of the transferee financial institution, the date of the
transfer, the amount of the payment transfer, and a photocopy of the
payment or transfer instructions received, and shall state the basis for
the rejection of the transfer instructions. The report shall also
provide the name and telephone number of a contact person at the
transferee financial institution from whom compliance information may be
obtained.
(e) Where to report. Reports must be filed with the Office of
Foreign Assets Control, Compliance Programs Division, U.S. Treasury
Department, 1500 Pennsylvania Avenue NW.--Annex, Washington, DC 20220.
[62 FR 45101, Aug. 25, 1997, as amended 70 FR 34061, June 13, 2005; 81
FR 43073, July 1, 2016]
Sec. 501.605 Reports on litigation, arbitration, and dispute
resolution proceedings.
(a) U.S. persons (or persons subject to the jurisdiction of the
United States in the case of parts 500 and 515 of this chapter)
participating in litigation, arbitration, or other binding alternative
dispute resolution proceedings in the United States on behalf of or
against persons whose property or interests in property are blocked or
whose funds have been retained pursuant to Sec. 596.504(b) of this
chapter, or when the outcome of any proceeding may affect blocked
property or retained funds, must:
(1) Provide notice of such proceedings upon their commencement or
upon submission or receipt of documents bringing the proceedings within
the terms of the introductory text to this paragraph (a);
[[Page 11]]
(2) Submit copies of all pleadings, motions, memoranda, exhibits,
stipulations, correspondence, and proposed orders or judgments
(including any proposed final judgment or default judgment) submitted to
the court or other adjudicatory body, and all orders, decisions,
opinions, or memoranda issued by the court, to the Chief Counsel, Office
of Foreign Assets Control, U.S. Department of the Treasury, 1500
Pennsylvania Avenue, NW.--Annex, Washington, DC 20220, within 10 days of
filing, submission or issuance. This paragraph (a)(2) shall not apply to
discovery requests or responses, documents filed under seal, or requests
for procedural action not seeking action dispositive of the proceedings
(such as requests for extension of time to file); and
(3) Report by immediate facsimile transmission to the Chief Counsel,
Office of Foreign Assets Control, at facsimile number 202/622-1911, the
scheduling of any hearing or status conference in the proceedings
whenever it appears that the court or other adjudicatory body may issue
an order or judgment in the proceedings (including a final judgment or
default judgment) or is considering or may decide any pending request
dispositive of the merits of the proceedings or of any claim raised in
the proceedings.
(b) The reporting requirements of paragraph (a) of this section do
not apply to proceedings to which the Office of Foreign Assets Control
is a party.
(c) Persons initiating proceedings subject to the reporting
requirements of this section must notify the court or other adjudicatory
body of the restrictions set forth under the applicable part in this
chapter governing the transfer of blocked property or funds retained
pursuant to Sec. 596.504(b) of this chapter, including the prohibition
on any unlicensed attachment, judgment, decree, lien, execution,
garnishment or other judicial process with respect to any property in
which, on or after the applicable effective date, there existed an
interest of any person whose property and property interests were
subject to blocking pursuant to this chapter or were subject to
retention pursuant to Sec. 596.504(b) of this chapter.
Sec. 501.606 Reporting and recordkeeping requirements applicable
to economic sanctions programs.
The reporting and recordkeeping requirements set forth in this
subpart are applicable to economic sanctions programs for which
implementation and administration have been delegated to the Office of
Foreign Assets Control.
Subpart D_Trading With the Enemy Act (TWEA) Penalties
Source: 68 FR 53642, Sept. 11, 2003, unless otherwise noted.
Sec. 501.700 Applicability.
This subpart is applicable only to those parts of chapter V
promulgated pursuant to the TWEA, which include parts 500, 505, and 515.
Sec. 501.701 Penalties.
(a) Attention is directed to section 16 of the TWEA, as adjusted
pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990
(Pub. L. 101-410, as amended, 28 U.S.C. 2461 note), which provides that:
(1) Persons who willfully violate any provision of TWEA or any
license, rule, or regulation issued thereunder, and persons who
willfully violate, neglect, or refuse to comply with any order of the
President issued in compliance with the provisions of TWEA shall, upon
conviction, be fined not more than $1,000,000 or, if an individual, be
fined not more than $100,000 or imprisoned for not more than 10 years,
or both; and an officer, director, or agent of any corporation who
knowingly participates in such violation shall, upon conviction, be
fined not more than $100,000 or imprisoned for not more than 10 years,
or both.
Note to paragraph (a)(1): As of January 15, 2017, TWEA provides for
a maximum civil penalty not to exceed $85,236.
(2) Any property, funds, securities, papers, or other articles or
documents, or any vessel, together with its tackle, apparel, furniture,
and equipment, concerned in a violation of TWEA may upon conviction be
forfeited to the United States Government.
[[Page 12]]
(3) The Secretary of the Treasury may impose a civil penalty of not
more than $85,236 per violation on any person who violates any license,
order, or regulation issued under TWEA.
Note to paragraph (a)(3): The current civil penalty cap may be
adjusted for inflation pursuant to the Federal Civil Penalties Inflation
Adjustment Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461
note).
(4) Any property, funds, securities, papers, or other articles or
documents, or any vessel, together with its tackle, apparel, furniture,
and equipment, that is the subject of a violation subject to a civil
penalty issued pursuant to TWEA shall, at the discretion of the
Secretary of the Treasury, be forfeited to the United States Government.
(b) The criminal penalties provided in TWEA are subject to increase
pursuant to 18 U.S.C. 3571 which, when read in conjunction with section
16 of TWEA, provides that persons convicted of violating TWEA may be
fined up to the greater of either $250,000 for individuals and
$1,000,000 for organizations or twice the pecuniary gain or loss from
the violation.
(c) Attention is directed to 18 U.S.C. 1001, which provides that
whoever, in any matter within the jurisdiction of any department or
agency of the United States, knowingly and willfully falsifies, conceals
or covers up by any trick, scheme, or device a material fact, or makes
any false, fictitious or fraudulent statements or representations, or
makes or uses any false writing or document knowing the same to contain
any false, fictitious or fraudulent statement or entry, shall be fined
under title 18, United States Code, or imprisoned not more than 5 years,
or both.
[68 FR 53642, Sept. 11, 2003, as amended at 68 FR 61361, Oct. 28, 2003;
81 FR 43073, July 1, 2016; 82 FR 10435, Feb. 10, 2017]
Sec. 501.702 Definitions.
(a) Chief Counsel means the Chief Counsel (Foreign Assets Control),
Office of the General Counsel, Department of the Treasury.
(b) Day means calendar day. In computing any period of time
prescribed in or allowed by this subpart, the day of the act, event, or
default from which the designated period of time begins to run shall not
be included. The last day of the period so computed shall be included
unless it is a Saturday, Sunday, or Federal legal holiday, in which
event the period runs until the end of the next day that is not a
Saturday, Sunday, or Federal legal holiday. Intermediate Saturdays,
Sundays, and Federal legal holidays shall be excluded from the
computation when the period of time prescribed or allowed is seven days
or less, not including any additional time allowed for service by mail.
If on the day a filing is to be made, weather or other conditions have
caused the designated filing location to close, the filing deadline
shall be extended to the end of the next day that the filing location is
not closed and that is not a Saturday, a Sunday, or a Federal legal
holiday. If service is made by mail, three days shall be added to the
prescribed period for response.
(c) Department means the Department of the Treasury.
(d) Director means the Director of the Office of Foreign Assets
Control, Department of the Treasury.
(e) Ex Parte Communication means any material oral or written
communication not on the public record concerning the merits of a
proceeding with respect to which reasonable prior notice to all parties
is not given, on any material matter or proceeding covered by these
rules, that takes place between: A party to the proceeding, a party's
counsel, or any other interested individual; and the Administrative Law
Judge or Secretary's designee handling that proceeding. A request to
learn the status of a proceeding does not constitute an ex parte
communication; and settlement inquiries and discussions do not
constitute ex parte communications.
(f) General Counsel means the General Counsel of the U.S. Department
of the Treasury.
(g) Order of Settlement means a written order issued by the Director
terminating a civil penalty action. An Order of Settlement does not
constitute an agency decision that any violation took place.
[[Page 13]]
(h) Order Instituting Proceedings means a written order issued by
the Director to initiate a civil penalty hearing.
(i) Prepenalty Notice means a written notification from the Director
informing a respondent of the alleged violation(s) and the respondent's
right to respond.
(j) Penalty Notice means a written notification from the Director
informing a respondent that the Director has made a finding of violation
and, absent a request for a hearing, will impose a civil monetary
penalty.
(k) Proceeding means any agency process initiated by an ``Order
Instituting Proceedings,'' or by the filing of a petition for review of
an Administrative Law Judge's decision or ruling.
(l) Respondent means any individual alleged by the Director to have
violated a TWEA-based sanctions regulation.
(m) Secretary's designee means a U.S. Treasury Department official
delegated responsibility by the Secretary of the Treasury to consider
petitions for review of Administrative Law Judge decisions made in civil
penalty hearings conducted pursuant to this subpart.
(n) Secretary means the Secretary of the Treasury.
Sec. 501.703 Overview of civil penalty process and construction
of rules.
(a) The administrative process for enforcing TWEA sanctions programs
proceeds as follows:
(1) The Director of the Office of Foreign Assets Control will notify
a suspected violator (hereinafter ``respondent'') of an alleged
violation by issuing a ``Prepenalty Notice.'' The Prepenalty Notice
shall describe the alleged violation(s) and include a proposed civil
penalty amount.
(2) The respondent will have 60 days from the date the Prepenalty
Notice is served to make a written presentation either defending against
the alleged violation or admitting the violation. A respondent who
admits a violation may offer information as to why a monetary penalty
should not be imposed or why, if imposed, the monetary penalty should be
in a lesser amount than proposed.
(3) Absent a settlement agreement or a finding that no violation
occurred, the Director of the Office of Foreign Assets Control will
issue a ``Penalty Notice.'' The respondent will have 30 days from the
date of service to either pay the penalty or request a hearing.
(4) If the respondent requests a hearing, the Director of the Office
of Foreign Assets Control will have two options:
(i) The Director may issue an ``Order Instituting Proceedings'' and
refer the matter to an Administrative Law Judge for a hearing and
decision; or
(ii) The Director may determine to discontinue the penalty action
based on information presented by the respondent.
(5) Absent review by a Secretary's designee, the decision of the
Administrative Law Judge will become the final decision of the
Department without further proceedings.
(6) If review is taken by a Secretary's designee, the Secretary's
designee reaches the final decision of the Department.
(7) A respondent may seek judicial review of the final decision of
the Department.
(b) Construction of rules. The rules contained in this subpart shall
be construed and administered to promote the just, speedy, and
inexpensive determination of every action. To the extent there is a
conflict between the rules contained in this subpart and a procedural
requirement contained in any statute, the requirement in the statute
shall control.
Sec. 501.704 Appearance and practice.
No person shall be represented before the Director in any civil
penalty matter, or an Administrative Law Judge or the Secretary's
designee in a civil penalty hearing, under this subpart except as
provided in this section.
(a) Representing oneself. In any proceeding, an individual may
appear on his or her own behalf.
(b) Representative. Upon written notice to the Director,
(1) A respondent may be represented by a personal representative. If
a respondent wishes to be represented by counsel, such counsel must be
an attorney at law admitted to practice before
[[Page 14]]
the Supreme Court of the United States, the highest court of any State,
commonwealth, possession, or territory of the United States, or the
District of Columbia;
(2) A duly authorized member of a partnership may represent the
partnership; and
(3) A bona fide officer, director, or employee of a corporation,
trust or association may represent the corporation, trust or
association.
(c) Director representation. The Director shall be represented by
members of the Office of Chief Counsel or any other counsel specifically
assigned by the General Counsel.
(d) Conflicts of interest--(1) Conflict of interest in
representation. No individual shall appear as representative for a
respondent in a proceeding conducted pursuant to this subpart if it
reasonably appears that such representation may be materially limited by
that representative's responsibilities to a third person, or by that
representative's own interests.
(2) Corrective measures. An Administrative Law Judge may take
corrective measures at any stage of a proceeding to cure a conflict of
interest in representation, including the issuance of an order limiting
the scope of representation or disqualifying an individual from
appearing in a representative capacity for the duration of the
proceeding.
Sec. 501.705 Service and filing.
(a) Service of Prepenalty Notice, Penalty Notice, Acknowledgment of
Hearing Request and Order Instituting Proceedings. The Director shall
cause any Prepenalty Notice, Penalty Notice, Acknowledgment of Hearing
Request, Order Instituting Proceedings, and other related orders and
decisions, or any amendments or supplements thereto, to be served upon
the respondent.
(1) Service on individuals. Service shall be complete:
(i) Upon the date of mailing by first class (regular) mail to the
respondent at the respondent's last known address, or to a
representative authorized to receive service, including qualified
representatives noticed to the Director pursuant to Sec. 501.704. Absent
satisfactory evidence in the administrative record to the contrary, the
Director may presume that the date of mailing is the date stamped on the
first page of the notice or order. The respondent may rebut the
presumption that a notice or order was mailed on the stamped mailing
date only by presenting evidence of the postmark date on the envelope in
which the notice or order was mailed;
(ii) Upon personal service on the respondent; or leaving a copy at
the respondent's place of business with a clerk or other person in
charge thereof; or leaving a copy at the respondent's dwelling house or
usual place of abode with a person at least 18 years of age then
residing therein; or with any other representative authorized by
appointment or by law to accept or receive service for the respondent,
including representatives noticed to the Director pursuant to
Sec. 501.704; and evidenced by a certificate of service signed and dated
by the individual making such service, stating the method of service and
the identity of the individual with whom the notice or order was left;
or
(iii) Upon proof of service on a respondent who is not resident in
the United States by any method of service permitted by the law of the
jurisdiction in which the respondent resides or is located, provided the
requirements of such foreign law satisfy due process requirements under
United States law with respect to notice of administrative proceedings,
and where applicable laws or intergovernmental agreements or
understandings make the methods of service set forth in paragraphs
(a)(1)(i) and (ii) of this section inappropriate or ineffective for
service upon the nonresident respondent.
(2) Service on corporations and other entities. Service is complete
upon delivering a copy of the notice or order to a partner, bona fide
officer, director, managing or general agent, or any other agent
authorized by appointment or by law to receive such notice, by any
method specified in paragraph (a)(1) of this section.
(b) Service of responses to Prepenalty Notice, Penalty Notice, and
requests for a hearing. A respondent shall serve a response to a
Prepenalty Notice and any request for a hearing on the Director
[[Page 15]]
through the Chief of Civil Penalties, Office of Foreign Assets Control,
U.S. Treasury Department, 1500 Pennsylvania Avenue, NW., Washington DC
20220, with the envelope prominently marked ``Urgent: Part 501 Action.''
Service shall be complete upon the date of mailing, as evidenced by the
post-mark date on the envelope, by first class (regular) mail.
(c) Service or filing of papers in connection with any hearing by an
Administrative Law Judge or review by the Secretary's designee--(1)
Service on the Director and/or each respondent. (i) Each paper,
including each notice of appearance, written motion, brief, petition for
review, statement in opposition to petition for review, or other written
communication, shall be served upon the Director and/or each respondent
in the proceeding in accordance with paragraph (a) of this section;
provided, however, that no service shall be required in the case of
documents that are the subject of a motion seeking a protective order to
limit or prevent disclosure to another party.
(ii) Service upon the Director shall be made through the Chief
Counsel (Foreign Assets Control), U.S. Treasury Department, 1500
Pennsylvania Avenue, NW., Washington, DC 20220, with the envelope
prominently marked ``Urgent: Part 501 Proceeding.''
(iii) Service may be made:
(A) As provided in paragraph (a) of this section;
(B) By mailing the papers through the U.S. Postal Service by Express
Mail; or
(C) By transmitting the papers by facsimile machine where the
following conditions are met:
(1) The persons serving each other by facsimile transmission have
agreed to do so in a writing, signed by each party, which specifies such
terms as they deem necessary with respect to facsimile machine telephone
numbers to be used, hours of facsimile machine operation, the provision
of non-facsimile original or copy, and any other such matters; and
(2) Receipt of each document served by facsimile is confirmed by a
manually signed receipt delivered by facsimile machine or other means
agreed to by the parties.
(iv) Service by U.S. Postal Service Express Mail is complete upon
delivery as evidenced by the sender's receipt. Service by facsimile is
complete upon confirmation of transmission by delivery of a manually
signed receipt.
(2) Filing with the Administrative Law Judge. Unless otherwise
provided, all briefs, motions, objections, applications or other filings
made during a proceeding before an Administrative Law Judge, and all
requests for review by the Secretary's designee, shall be filed with the
Administrative Law Judge.
(3) Filing with the Secretary's designee. And all briefs, motions,
objections, applications or other filings made during a proceeding
before the Secretary's designee shall be filed with the Secretary's
designee.
(4) Certificate of service. Papers filed with an Administrative Law
Judge or Secretary's designee shall be accompanied by a certificate
stating the name of each person served, the date of service, the method
of service and the mailing address or facsimile telephone number to
which service was made, if not made in person. If the method of service
to any person is different from the method of service to any other
person, the certificate shall state why a different means of service was
used.
(5) Form of briefs. All briefs containing more than 10 pages shall,
to the extent applicable, include a table of contents, an alphabetized
table of cases, a table of statutes, and a table of other authorities
cited, with references to the pages of the brief wherein they are cited.
(6) Specifications. All original documents shall be filed with the
Administrative Law Judge or Secretary's designee, as appropriate. Papers
filed in connection with any proceeding shall:
(i) Be on one grade of unglazed white paper measuring 8.5 x 11
inches, except that, to the extent that the reduction of larger
documents would render them illegible, such documents may be filed on
larger paper;
(ii) Be typewritten or printed in either 10- or 12-point typeface or
otherwise reproduced by a process that produces permanent and plainly
legible copies;
[[Page 16]]
(iii) Include at the head of the paper, or on a title page, the
title of the proceeding, the name(s) of each respondent, the subject of
the particular paper or pleading, and the file number assigned to the
proceeding;
(iv) Be formatted with all margins at least 1 inch wide;
(v) Be double-spaced, with single-spaced footnotes and single-spaced
indented quotations; and
(vi) Be stapled, clipped or otherwise fastened in the upper left
corner.
(7) Signature requirement and effect. All papers must be dated and
signed by a member of the Office of Chief Counsel, or other counsel
assigned by the General Counsel to represent the Director, or a
respondent or respondent's representative, as appropriate. If a filing
is signed by a respondent's representative it shall state that
representative's mailing address and telephone number. A respondent who
represents himself or herself shall sign his or her individual name and
state his or her address and telephone number on every filing. A witness
deposition shall be signed by the witness.
(i) Effect of signature. The signature shall constitute a
certification that:
(A) The person signing the filing has read the filing;
(B) To the best of his or her knowledge, information, and belief,
formed after reasonable inquiry, the filing is well grounded in fact and
is warranted by existing law or a good faith argument for the extension,
modification, or reversal of existing law; and
(C) The filing is not made for any improper purpose, such as to
harass or to cause unnecessary delay or needless increase in the cost of
adjudication.
(ii) If a filing is not signed, the Administrative Law Judge (or the
Secretary's designee) shall strike the filing, unless it is signed
promptly after the omission is called to the attention of the person
making the filing.
(d) Service of written orders or decisions issued by the
Administrative Law Judge or Secretary's designee. Written orders or
decisions issued by the Administrative Law Judge or the Secretary's
designee shall be served promptly on each respondent and the Director
pursuant to any method of service authorized under paragraph (a) of this
section. Service of such orders or decisions shall be made by the
Administrative Law Judge or the Secretary's designee, as appropriate.
Sec. 501.706 Prepenalty Notice; issuance by Director.
(a) When required. If the Director has reason to believe there has
occurred a violation of any provision of parts 500 or 515 of this
chapter or a violation of the provisions of any license, ruling,
regulation, order, direction or instruction issued by or pursuant to the
direction or authorization of the Secretary pursuant to parts 500 or 515
of this chapter or otherwise under the Trading With the Enemy Act, and
the Director determines that further civil proceedings are warranted,
the Director shall issue a Prepenalty Notice. The Prepenalty Notice may
be issued whether or not another agency has taken any action with
respect to the matter.
(b) Contents of notice--(1) Facts of violation. The Prepenalty
Notice shall describe the alleged violation, specify the laws and
regulations allegedly violated, and state the amount of the proposed
monetary penalty.
(2) Right to respond. The Prepenalty Notice shall inform the
respondent of respondent's right to make a written presentation within
the time prescribed in Sec. 501.707 as to why the respondent believes
there should be no finding of a violation or why, if the respondent
admits the violation, a monetary penalty should not be imposed or why,
if imposed, the monetary penalty should be in a lesser amount than
proposed. The Prepenalty Notice shall also inform the respondent that:
(i) The act of submitting a written response by the respondent is a
factor that may result in a lower penalty absent any aggravating
factors; and
(ii) If the respondent fails to respond to the Prepenalty Notice
within the applicable 60-day period set forth in Sec. 501.707, the
Director may proceed with the issuance of a Penalty Notice.
(3) Right to request a hearing. The Prepenalty Notice shall inform
the respondent of respondent's right, if a subsequent Penalty Notice is
issued, to request an administrative hearing. The Director will not
consider any request
[[Page 17]]
for an administrative hearing until a Penalty Notice has been issued.
Sec. 501.707 Response to Prepenalty Notice.
(a) Deadline for response. (1) The respondent shall have 60 days
after the date of service of the Prepenalty Notice pursuant to
Sec. 501.705(a) to respond thereto. The response, signed and dated,
shall be served as provided in Sec. 501.705(b).
(2) In response to a written request by the respondent, the Director
may, at his or her discretion for the purpose of conducting settlement
negotiations or for other valid reasons, grant additional time for a
respondent to submit a response to the Prepenalty Notice.
(3) The failure to submit a response within the time period set
forth in this paragraph (a), including any additional time granted by
the Director, shall be deemed to be a waiver of the right to respond to
the Prepenalty Notice.
(b) Form and contents of response--(1) In general. The response need
not be in any particular form, but must be typewritten and contain the
heading ``Response to Prepenalty Notice'' and the Office of Foreign
Assets Control identification number shown near the top of the
Prepenalty Notice. It should be responsive to the allegations contained
therein and set forth the nature of the respondent's admission of the
violation, or defenses and claims for mitigation, if any.
(i) The response must admit or deny specifically each separate
allegation of violation made in the Prepenalty Notice. If the respondent
is without knowledge as to an allegation, the response shall so state,
and such statement shall constitute a denial. Any allegation not
specifically addressed in the response shall be deemed admitted.
(ii) The response must set forth any additional or new matter or
arguments the respondent seeks, or shall seek, to use in support of all
defenses or claims for mitigation. Any defense the respondent wishes to
assert must be included in the response.
(iii) The response must accurately state (for each respondent, if
applicable) the respondent's full name and address for future service,
together with a current telephone and, if applicable, facsimile machine
number. If respondent is represented, the representative's full name and
address, together with telephone and facsimile numbers, may be provided
instead of service information for the respondent. The respondent or
respondent's representative of record is responsible for providing
timely written notice to the Director of any subsequent changes in the
information provided.
(iv) Financial disclosure statement requirement. Any respondent who
asserts financial hardship or an inability to pay a penalty shall
include with the response a financial disclosure statement setting forth
in detail the basis for asserting the financial hardship or inability to
pay a penalty, subject to 18 U.S.C. 1001.
(2) Settlement. In addition, or as an alternative, to a written
response to a Prepenalty Notice, the respondent or respondent's
representative may seek settlement of the alleged violation(s). See
Sec. 501.710. In the event of settlement prior to the issuance of a
Penalty Notice, the claim proposed in the Prepenalty Notice will be
withdrawn and the respondent will not be required to make a written
response to the Prepenalty Notice. In the event no settlement is
reached, a written response to the Prepenalty Notice is required
pursuant to paragraph (c) of this section.
Sec. 501.708 Director's finding of no penalty warranted.
If after considering any written response to the Prepenalty Notice
submitted pursuant to Sec. 501.707 and any other relevant facts, the
Director determines that there was no violation or that the violation
does not warrant the imposition of a civil monetary penalty, the
Director promptly shall notify the respondent in writing of that
determination and that no civil monetary penalty pursuant to this
subpart will be imposed.
Sec. 501.709 Penalty notice.
(a) If, after considering any written response to the Prepenalty
Notice, and any other relevant facts, the Director determines that there
was a violation by the respondent and that a monetary penalty is
warranted, the Director
[[Page 18]]
promptly shall issue a Penalty Notice informing the respondent that,
absent a timely request for an administrative hearing, the Director will
impose the civil monetary penalty described in the Penalty Notice. The
Penalty Notice shall inform the respondent:
(1) Of the respondent's right to submit a written request for an
administrative hearing not later than 30 days after the date of service
of the Penalty Notice;
(2) That in the absence of a timely request for a hearing, the
issuance of the Penalty Notice constitutes final agency action;
(3) That, absent a timely request for a hearing, payment (or
arrangement with the Financial Management Service of the Department for
installment payment) of the assessed penalty must be made not later than
30 days after the date of service of the Penalty Notice; and
(4) That absent a timely request for a hearing, the respondent must
furnish respondent's taxpayer identification number pursuant to 31
U.S.C. 7701 and that the Director intends to use such information for
the purposes of collecting and reporting on any delinquent penalty
amount in the event of a failure to pay the penalty imposed.
Sec. 501.710 Settlement.
(a) Availability. Either the Director or any respondent may, at any
time during the administrative civil penalty process described in this
subpart, propose an offer of settlement. The amount accepted in
settlement may be less than the civil penalty that might be imposed in
the event of a formal determination of violation. Upon mutual agreement
by the Director and a respondent on the terms of a settlement, the
Director shall issue an Order of Settlement.
(b) Procedure--(1) Prior to issuance of Penalty Notice. Any offer of
settlement made by a respondent prior to the issuance of a Penalty
Notice shall be submitted, in writing, to the Chief of Civil Penalties,
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500
Pennsylvania Avenue, NW., Washington, DC 20220.
(2) After issuance of Penalty Notice. Any offer of settlement made
by a respondent after issuance of a Penalty Notice shall state that it
is made pursuant to this section; shall recite or incorporate as a part
of the offer the provisions of paragraphs (b)(5)(ii) and (b)(6) of this
section; shall be signed by the respondent making the offer, and not
only by his or her representative; and shall be submitted to the Chief
Counsel.
(3) Extensions of time. The submission of any settlement offer does
not provide a basis for adjourning or otherwise delaying all or any
portion of the administrative civil penalty process.
(i) Prior to issuance of Order Instituting Proceedings. Any
respondent (or potential respondent in the case of a pending Prepenalty
Notice) may request, in writing, that the Director withhold issuance of
any such notice, or grant an extension of time to respond to any such
Notice, for a period not to exceed 60 days for the exclusive purpose of
effecting settlement. The Director may grant any such request, in
writing, under terms and conditions within his or her discretion.
(ii) After issuance of Order Instituting Proceedings. Upon mutual
agreement of the Director and a respondent, the Administrative Law Judge
may grant an extension of time, for a period not to exceed 60 days, for
the exclusive purpose of effecting settlement.
(4) Views of Administrative Law Judge. Where an Administrative Law
Judge is assigned to a proceeding, the Director or the respondent may
request that the Administrative Law Judge express his or her views
regarding the appropriateness of the offer of settlement. A request for
the Administrative Law Judge to express his or her views on an offer of
settlement or otherwise to participate in a settlement conference
constitutes a waiver by the party making the request of any right to
claim bias or prejudgment by the Administrative Law Judge based on the
views expressed.
(5) Waivers. (i) By submitting an offer of settlement, a respondent
making the offer waives, subject to acceptance of the offer:
(A) All hearings pursuant to section 16 of the Trading with the
Enemy Act (50 U.S.C. App. 16);
[[Page 19]]
(B) The filing of proposed findings of fact and conclusions of law;
(C) Proceedings before, and a decision by, an Administrative Law
Judge;
(D) All post-hearing procedures; and
(E) Judicial review by any court.
(ii) By submitting an offer of settlement the respondent further
waives:
(A) Such provisions of this subpart or other requirements of law as
may be construed to prevent any member of the Director's staff, or
members of the Office of Chief Counsel or other counsel assigned by the
General Counsel, from participating in or advising the Director as to
any order, opinion, finding of fact, or conclusion of law to be entered
pursuant to the offer; and
(B) Any right to claim bias or prejudgment by the Director based on
the consideration of or discussions concerning settlement of all or any
part of the proceeding.
(6) If the Director rejects the offer of settlement, the respondent
shall be so notified in writing and the offer of settlement shall be
deemed withdrawn. The rejected offer shall not constitute a part of the
record in any proceeding against the respondent making the offer,
provided, however, that rejection of an offer of settlement does not
affect the continued validity of waivers pursuant to paragraph (b)(5) of
this section with respect to any discussions concerning the rejected
offer of settlement.
(7) No settlement offer or proposal, or any subsequent negotiation
or resolution, is admissible as evidence in any administrative
proceeding initiated by the Director.
Sec. 501.711 Hearing request.
(a) Deadline for request. A request for an agency hearing shall be
served on the Director not later than 30 days after the date of service
of the Penalty Notice. See Sec. 501.705(b). A respondent may not reserve
the right to request a hearing after expiration of the 30 calendar day
period. A request for a hearing that is not made as required by this
paragraph shall constitute a waiver of the respondent's right to a
hearing.
(b) Form and contents of request. The request need not be in any
particular form, but must be typewritten and contain the heading
``Request for Agency Hearing''. The request must include the Office of
Foreign Assets Control identification number shown near the top of the
Penalty Notice. It should be responsive to the determination contained
in the Penalty Notice and set forth the nature of the respondent's
defenses or claims for mitigation, if any.
(1) The request must admit or deny specifically each separate
determination of violation made in the Penalty Notice. If the respondent
is without knowledge as to a determination, the request shall so state,
and such statement shall constitute a denial. Any determination not
specifically addressed in the response shall be deemed admitted.
(2) The request must set forth any additional or new matter or
arguments the respondent seeks, or shall seek, to use in support of all
defenses or claims for mitigation. Any defense the respondent wishes to
assert must be included in the request.
(3) The request must accurately state, for each respondent (if
applicable), the respondent's full name and address for future service,
together with current telephone and, if applicable, a facsimile machine
number. If respondent is represented, the representative's full name and
address, together with telephone and facsimile numbers, may be provided
in lieu of service information for the respondent. The respondent or
respondent's representative is responsible for providing timely written
notice to the Director of any subsequent changes in the information
provided.
(c) Signature requirement. The respondent or, if represented, the
respondent's representative, must sign the hearing request.
Sec. 501.712 Acknowledgment of hearing request.
No later than 60 days after service of any hearing request, the
Director shall acknowledge receipt and inform a respondent, in writing,
whether an Order Instituting Proceedings shall be issued.
Sec. 501.713 Order Instituting Proceedings.
If a respondent makes a timely request for a hearing, the Director
shall
[[Page 20]]
determine, at his or her option, whether to dismiss the violation(s) set
forth in the Penalty Notice or to issue an Order Instituting Proceedings
to initiate the hearing process. The Order shall be served on the
respondent(s) as provided in Sec. 501.705(c)(1). The Director may, in
his or her discretion, withdraw an Order Instituting Proceedings at any
time prior to the issuance of a decision by the Administrative Law
Judge.
(a) Content of Order. The Order Instituting Proceedings shall:
(1) Be prepared by the Office of the Chief Counsel or other counsel
assigned by the General Counsel and based on information provided by the
Director;
(2) State the legal authority under which the hearing is to be held;
(3) Contain a short and plain statement of the alleged violation(s)
to be considered and determined (including the matters of fact and law
asserted) in such detail as will permit a specific response thereto;
(4) State the amount of the penalty sought in the proceeding; and
(5) Be signed by the Director.
(b) Combining penalty actions. The Director may combine claims
contained in two or more Penalty Notices involving the same respondent,
and for which hearings have been requested, into a single Order
Instituting Proceedings.
(c) Amendment to Order Instituting Proceedings. Upon motion by the
Director, the Administrative Law Judge may, at any time prior to
issuance of a decision, permit the Director to amend an Order
Instituting Proceedings to include new matters of fact or law that are
within the scope of the original Order Instituting Proceedings.
Sec. 501.714 Answer to Order Instituting Proceedings.
(a) When required. Not later than 45 days after service of the Order
Instituting Proceedings, the respondent shall file, with the
Administrative Law Judge and the Office of Chief Counsel, an answer to
each of the allegations contained therein. If the Order Instituting
Proceedings is amended, the Administrative Law Judge may require that an
amended answer be filed and, if such an answer is required, shall
specify a date for the filing thereof.
(b) Contents; effect of failure to deny. Unless otherwise directed
by the Administrative Law Judge, an answer shall specifically admit,
deny, or state that the respondent does not have, and is unable to
obtain, sufficient information to admit or deny each allegation in the
Order Instituting Proceedings. When a respondent intends to deny only a
part of an allegation, the respondent shall specify so much of it as is
true and shall deny only the remainder. A statement of lack of
information shall have the effect of a denial. A defense of res
judicata, statute of limitations or any other matter constituting an
affirmative defense shall be asserted in the answer. Any allegation not
specifically addressed in the answer shall be deemed admitted.
(c) Motion for more definite statement. A respondent may file with
an answer a motion for a more definite statement of specified matters of
fact or law to be considered or determined. Such motion shall state the
respects in which, and the reasons why, each such matter of fact or law
should be required to be made more definite. If the motion is granted,
the order granting such motion shall set the periods for filing such a
statement and any answer thereto.
(d) Amendments. A respondent may amend its answer at any time by
written consent of the Director or with permission of the Administrative
Law Judge. Permission shall be freely granted when justice so requires.
(e) Failure to file answer: default. If a respondent fails to file
an answer required by this subpart within the time prescribed, such
respondent may be deemed in default pursuant to Sec. 501.716(a). A party
may make a motion to set aside a default pursuant to Sec. 501.726(e).
Sec. 501.715 Notice of Hearing.
(a) If the Director issues an Order Instituting Proceedings, the
respondent shall receive not less than 45 days notice of the time and
place of the hearing.
(b) Time and place of hearing. All hearings shall be held in the
Washington, DC metropolitan area unless, based on extraordinary reasons,
otherwise mutually agreed by the respondent and the Director. The time
for any
[[Page 21]]
hearing shall be fixed with due regard for the public interest and the
convenience and necessity of the parties or their representatives.
Requests to change the time of a hearing may be submitted to the
Administrative Law Judge, who may modify the hearing date(s) and/or
time(s) and place. All requests for a change in the date and time and/or
place of a hearing must be received by the Administrative Law Judge and
served upon the parties no later than 15 days before the scheduled
hearing date.
(c) Failure to appear at hearings: default. Any respondent named in
an order instituting proceedings as a person against whom findings may
be made or penalties imposed who fails to appear (in person or through a
representative) at a hearing of which he or she has been duly notified
may be deemed to be in default pursuant to Sec. 501.716(a). Without
further proceedings or notice to the respondent, the Administrative Law
Judge may enter a finding that the right to a hearing was waived, and
the Penalty Notice shall constitute final agency action as provided in
Sec. 501.709(a)(2). A respondent may make a motion to set aside a
default pursuant to Sec. 501.726(e).
Sec. 501.716 Default.
(a) A party to a proceeding may be deemed to be in default and the
Administrative Law Judge (or the Secretary's designee during review
proceedings) may determine the proceeding against that party upon
consideration of the record if that party fails:
(1) To appear, in person or through a representative, at any hearing
or conference of which the party has been notified;
(2) To answer, to respond to a dispositive motion within the time
provided, or otherwise to prosecute or defend the proceeding; or
(3) To cure a deficient filing within the time specified by the
Administrative Law Judge (or the Secretary's designee) pursuant to
Sec. 501.729(b).
(b) In deciding whether to determine the proceedings against a party
deemed to be in default, the Administrative Law Judge shall consider the
record of the proceedings (including the Order Instituting Proceedings)
and shall construe contested matters of fact and law against the party
deemed to be in default.
(c) For information and procedures pertaining to a motion to set
aside a default, see Sec. 501.726(e).
Sec. 501.717 Consolidation of proceedings.
By order of the Administrative Law Judge, proceedings involving
common questions of law and fact may be consolidated for hearing of any
or all the matters at issue in such proceedings. The Administrative Law
Judge may make such orders concerning the conduct of such proceedings as
he or she deems appropriate to avoid unnecessary cost or delay.
Consolidation shall not prejudice any rights under this subpart and
shall not affect the right of any party to raise issues that could have
been raised if consolidation had not occurred.
Sec. 501.718 Conduct and order of hearings.
All hearings shall be conducted in a fair, impartial, expeditious
and orderly manner. Each party has the right to present its case or
defense by oral and documentary evidence and to conduct such cross
examination as may be required for full disclosure of the relevant
facts. The Director shall present his or her case-in-chief first. The
Director shall be the first party to present an opening statement and a
closing statement and may make a rebuttal statement after the
respondent's closing statement.
Sec. 501.719 Ex parte communications.
(a) Prohibition. (1) From the time the Director issues an Order
Instituting Proceedings until the date of final decision, no party,
interested person, or representative thereof shall knowingly make or
cause to be made an ex parte communication.
(2) Except to the extent required for the disposition of ex parte
communication matters as authorized by law, the Secretary's designee and
the Administrative Law Judge presiding over any proceeding may not:
(i) Consult a person or party on an issue, unless on notice and
opportunity for all parties to participate; or
[[Page 22]]
(ii) Be responsible to or subject to the supervision, direction of,
or evaluation by, an employee engaged in the performance of
investigative or prosecutorial functions for the Department.
(b) Procedure upon occurrence of ex parte communication. If an ex
parte communication is received by the Administrative Law Judge or the
Secretary's designee, the Administrative Law Judge or the Secretary's
designee, as appropriate, shall cause all of such written communication
(or, if the communication is oral, a memorandum stating the substance of
the communication) to be placed on the record of the proceeding and
served on all parties. A party may, not later than 10 days after the
date of service, file a response thereto and may recommend that the
person making the prohibited communication be sanctioned pursuant to
paragraph (c) of this section.
(c) Sanctions. Any party to the proceeding, a party's
representative, or any other interested individual, who makes a
prohibited ex parte communication, or who encourages or solicits another
to make any such communication, may be subject to any appropriate
sanction or sanctions imposed by the Administrative Law Judge or the
Secretary's designee, as appropriate, for good cause shown, including,
but not limited to, exclusion from the hearing and an adverse ruling on
the issue that is the subject of the prohibited communication.
Sec. 501.720 Separation of functions.
Any officer or employee engaged in the performance of investigative
or prosecutorial functions for the Department in a proceeding as defined
in Sec. 501.702 may not, in that proceeding or one that is factually
related, participate or advise in the decision pursuant to Section 557
of the Administrative Procedure Act, 5 U.S.C. 557, except as a witness
or counsel in the proceeding.
Sec. 501.721 Hearings to be public.
All hearings, except hearings on applications for confidential
treatment filed pursuant to Sec. 501.725(b), shall be public unless
otherwise ordered by the Administrative Law Judge or the Secretary's
designee, as appropriate, on his or her own motion or the motion of a
party.
Sec. 501.722 Prehearing conferences.
(a) Purposes of conferences. The purposes of prehearing conferences
include, but are not limited to:
(1) Expediting the disposition of the proceeding;
(2) Establishing early and continuing control of the proceeding by
the Administrative Law Judge; and
(3) Improving the quality of the hearing through more thorough
preparation.
(b) Procedure. On his or her own motion or at the request of a
party, the Administrative Law Judge may direct a representative or any
party to attend one or more prehearing conferences. Such conferences may
be held with or without the Administrative Law Judge present as the
Administrative Law Judge deems appropriate. Where such a conference is
held outside the presence of the Administrative Law Judge, the
Administrative Law Judge shall be advised promptly by the parties of any
agreements reached. Such conferences also may be held with one or more
persons participating by telephone or other remote means.
(c) Subjects to be discussed. At a prehearing conference
consideration may be given and action taken with respect to the
following:
(1) Simplification and clarification of the issues;
(2) Exchange of witness and exhibit lists and copies of exhibits;
(3) Admissions of fact and stipulations concerning the contents,
authenticity, or admissibility into evidence of documents;
(4) Matters of which official notice may be taken;
(5) The schedule for exchanging prehearing motions or briefs, if
any;
(6) The method of service for papers;
(7) Summary disposition of any or all issues;
(8) Settlement of any or all issues;
(9) Determination of hearing dates (when the Administrative Law
Judge is present);
(10) Amendments to the Order Instituting Proceedings or answers
thereto;
[[Page 23]]
(11) Production of documents as set forth in Sec. 501.723, and
prehearing production of documents in response to subpoenas duces tecum
as set forth in Sec. 501.728; and
(12) Such other matters as may aid in the orderly and expeditious
disposition of the proceeding.
(d) Timing of conferences. Unless the Administrative Law Judge
orders otherwise, an initial prehearing conference shall be held not
later than 14 days after service of an answer. A final conference, if
any, should be held as close to the start of the hearing as reasonable
under the circumstances.
(e) Prehearing orders. At or following the conclusion of any
conference held pursuant to this rule, the Administrative Law Judge
shall enter written rulings or orders that recite the agreement(s)
reached and any procedural determinations made by the Administrative Law
Judge.
(f) Failure to appear: default. A respondent who fails to appear, in
person or through a representative, at a prehearing conference of which
he or she has been duly notified may be deemed in default pursuant to
Sec. 501.716(a). A respondent may make a motion to set aside a default
pursuant to Sec. 501.726(e).
Sec. 501.723 Prehearing disclosures; methods to discover additional
matter.
(a) Initial disclosures. (1) Except to the extent otherwise
stipulated or directed by order of the Administrative Law Judge, a party
shall, without awaiting a discovery request, provide to the opposing
party:
(i) The name and, if known, the address and telephone number of each
individual likely to have discoverable information that the disclosing
party may use to support its claims or defenses, unless solely for
impeachment of a witness appearing in person or by deposition,
identifying the subjects of the information; and
(ii) A copy, or a description by category and location, of all
documents, data compilations, and tangible things that are in the
possession, custody, or control of the party and that the disclosing
party may use to support its claims or defenses, unless solely for
impeachment of a witness appearing in person or by deposition;
(2) The disclosures described in paragraph (a)(1)(i) of this section
shall be made not later than 30 days after the issuance of an Order
Instituting Proceedings, unless a different time is set by stipulation
or by order of the Administrative Law Judge.
(b) Prehearing disclosures. (1) In addition to the disclosures
required by paragraph (a) of this section, a party must provide to the
opposing party, and promptly file with the Administrative Law Judge, the
following information regarding the evidence that it may present at
hearing for any purpose other than solely for impeachment of a witness
appearing in person or by deposition:
(i) An outline or narrative summary of its case or defense (the
Order Instituting Proceedings will usually satisfy this requirement for
the Director and the answer thereto will usually satisfy this
requirement for the respondent);
(ii) The legal theories upon which it will rely;
(iii) Copies and a list of documents or exhibits that it intends to
introduce at the hearing; and
(iv) A list identifying each witness who will testify on its behalf,
including the witness's name, occupation, address, phone number, and a
brief summary of the expected testimony.
(2) Unless otherwise directed by the Administrative Law Judge, the
disclosures required by paragraph (b)(1) of this section shall be made
not later than 30 days before the date of the hearing.
(c) Disclosure of expert testimony. A party who intends to call an
expert witness shall submit, in addition to the information required by
paragraph (b)(1)(iv) of this section, a statement of the expert's
qualifications, a list of other proceedings in which the expert has
given expert testimony, and a list of publications authored or co-
authored by the expert.
(d) Form of disclosures. Unless the Administrative Law Judge orders
otherwise, all disclosures under paragraphs (a) through (c) of this
section shall be made in writing, signed, and served as provided in
Sec. 501.705.
[[Page 24]]
(e) Methods to discover additional matter. Parties may obtain
discovery by one or more of the following methods: Depositions of
witnesses upon oral examination or written questions; written
interrogatories to another party; production of documents or other
evidence for inspection; and requests for admission. All depositions of
Federal employees must take place in Washington, DC, at the Department
of the Treasury or at the location where the Federal employee to be
deposed performs his or her duties, whichever the Federal employee's
supervisor or the Office of Chief Counsel shall deem appropriate. All
depositions shall be held at a date and time agreed by the Office of
Chief Counsel and the respondent or respondent's representative, and for
an agreed length of time.
(f) Discovery scope and limits. Unless otherwise limited by order of
the Administrative Law Judge in accordance with paragraph (f)(2) of this
section, the scope of discovery is as follows:
(1) In general. The availability of information and documents
through discovery is subject to the assertion of privileges available to
the parties and witnesses. Privileges available to the Director and the
Department include exemptions afforded pursuant to the Freedom of
Information Act (5 U.S.C. 552(b)(1) through (9)) and the Privacy Act (5
U.S.C. 552a). Parties may obtain discovery regarding any matter, not
privileged, that is relevant to the merits of the pending action,
including the existence, description, nature, custody, condition, and
location of any books, documents, or other tangible things and the
identity and location of any persons having knowledge of any
discoverable matter. For good cause, the Administrative Law Judge may
order discovery of any matter relevant to the subject matter involved in
the proceeding. Relevant information need not be admissible at the
hearing if the discovery appears reasonably calculated to lead to the
discovery of admissible evidence.
(2) Limitations. The Administrative Law Judge may issue any order
that justice requires to ensure that discovery requests are not
unreasonable, oppressive, excessive in scope or unduly burdensome,
including an order to show cause why a particular discovery request is
justified upon motion of the objecting party. The frequency or extent of
use of the discovery methods otherwise permitted under this section may
be limited by the Administrative Law Judge if he or she determines that:
(i) The discovery sought is unreasonably cumulative or duplicative,
or is obtainable from some other source that is more convenient, less
burdensome, or less expensive;
(ii) The party seeking discovery has had ample opportunity by
discovery in the action to obtain the information sought; or
(iii) The burden or expense of the proposed discovery outweighs its
likely benefit, taking into account the needs of the hearing, the
importance of the issues at stake, and the importance of the proposed
discovery in resolving the issues.
(3) Interrogatories. Respondent's interrogatories shall be served
upon the Office of the Chief Counsel not later than 30 days after
issuance of the Order Instituting Proceedings. The Director's
interrogatories shall be served by the later of 30 days after the
receipt of service of respondent's interrogatories or 40 days after
issuance of the Order Instituting Proceedings if no interrogatories are
filed by respondent. Parties shall respond to interrogatories not later
than 30 days after the date interrogatories are received.
Interrogatories shall be limited to 20 questions only. Each subpart,
section, or other designation of a part of a question shall be counted
as one complete question in computing the permitted 20 question total.
Where more than 20 questions are served upon a party, the receiving
party may determine which of the 20 questions the receiving party shall
answer. The limitation on the number of questions in an interrogatory
may be waived by the Administrative Law Judge.
(4) Privileged matter. Privileged documents are not discoverable.
Privileges include, but are not limited to, the attorney-client
privilege, attorney work-product privilege, any government's or
government agency's deliberative-process or classified information
privilege, including materials classified pursuant
[[Page 25]]
to Executive Order 12958 (3 CFR, 1995 Comp., p. 333) and any future
Executive orders that may be issued relating to the treatment of
national security information, and all materials and information
exempted from release to the public pursuant to the Privacy Act (5
U.S.C. 552a) or the Freedom of Information Act (5 U.S.C. 552(b)(1)
through (9)).
(g) Updating discovery. A party who has made an initial disclosure
under paragraph (a) of this section or responded to a request for
discovery with a disclosure or response is under a duty to supplement or
correct the disclosure or response to include information thereafter
acquired whenever:
(1) The party learns that in some material respect the information
disclosed is incomplete or incorrect, if the additional or corrective
information has not otherwise been made known to the other party during
the discovery process or in writing; or
(2) Ordered by the Administrative Law Judge. The Administrative Law
Judge may impose sanctions for failure to supplement or correct
discovery.
(h) Time limits. All discovery, including all responses to discovery
requests, shall be completed not later than 20 days prior to the date
scheduled for the commencement of the hearing, unless the Administrative
Law Judge finds on the record that good cause exists to grant additional
time to complete discovery.
(i) Effect of failure to comply. No witness may testify and no
document or exhibit may be introduced at the hearing if such witness,
document, or exhibit is not listed in the prehearing submissions
pursuant to paragraphs (b) and (c) of this section, except for good
cause shown.
Sec. 501.724 Documents that may be withheld.
(a) Notwithstanding Sec. 501.723(f), the Director or respondent may
withhold a document if:
(1) The document is privileged;
(2) The document would disclose the identity of a confidential
source; or
(3) The Administrative Law Judge grants leave to withhold a document
or category of documents as not relevant to the subject matter of the
proceeding or otherwise, for good cause shown.
(b) Nothing in paragraph (a) of this section authorizes the Director
to withhold documents that contain material exculpatory evidence.
(c) Withheld document list. The Director and respondent shall
provide the Administrative Law Judge, for review, a list of documents
withheld pursuant to paragraphs (a)(1)-(3) of this section. The
Administrative Law Judge shall determine whether any such document
should be made available for inspection and copying.
Sec. 501.725 Confidential treatment of information in certain filings.
(a) Filing document under seal. (1) The Director may file any
document or any part of a document under seal and/or seek a protective
order concerning any document if disclosure of the document would be
inconsistent with the protection of the public interest or if justice
requires protection of any person, including a source or a party, from
annoyance, threat, oppression, or undue burden or expense, or the
disclosure of the information would be, or might reasonably lead to a
disclosure, contrary to Executive Order 12958, as amended by Executive
Order 13292, or other Executive orders concerning disclosure of
information, Department regulations, or the Privacy Act, or information
exempt from release under the Freedom of Information Act. The
Administrative Law Judge shall allow placement of any such document
under seal and/or grant a protective order upon a showing that the
disclosure would be inconsistent with any such statute or Executive
order, or that the harm resulting from disclosure would outweigh the
benefits of disclosure.
(2) A respondent may file any document or any part of a document
under seal and/or seek a protective order to limit such document from
disclosure to other parties or to the public. The Administrative Law
Judge shall allow placement of any document under seal and/or grant a
protective order upon a showing that the harm resulting from disclosure
would outweigh the benefits of disclosure.
(3) The Administrative Law Judge shall safeguard the security and
integrity of any documents under seal or
[[Page 26]]
protective order and shall take all appropriate steps to preserve the
confidentiality of such documents or any parts thereof, including
closing a hearing or portions of a hearing to the public. Release of any
information under seal or to the extent inconsistent with a protective
order, in any form or manner, is subject to the sanctions and the
exercise of the authorities as are provided with respect to ex parte
communications under Sec. 501.719.
(4) If the Administrative Law Judge denies placement of any document
under seal or under protective order, any party, and any person whose
document or material is at issue, may obtain interlocutory review by the
Secretary's designee. In such cases the Administrative Law Judge shall
not release or expose any of the records or documents in question to the
public or to any person for a period of 20 days from the date of the
Administrative Law Judge's ruling, in order to permit a party the
opportunity either to withdraw the records and documents or obtain
interlocutory review by the Secretary's designee and an order that the
records be placed under seal or a protective order.
(5) Upon settlement, final decision, or motion to the Administrative
Law Judge for good cause shown, all materials (including all copies)
under seal or protective order shall be returned to the submitting
parties, except when it may be necessary to retain a record until any
judicial process is completed.
(6)(i) Written notice of each request for release of documents or
materials under seal or subject to a protective order shall be given to
the parties at least 20 days prior to any permitted release or prior to
any access not specifically authorized under a protective order. A copy
of each request for information, including the name, address, and
telephone number of the requester, shall be provided to the parties.
(ii) Each request for access to protected material shall include the
names, addresses, and telephone numbers of all persons on whose behalf
the requester seeks access to protected information. The Administrative
Law Judge may impose sanctions as provided under Sec. 501.729 for
failure to provide this information.
(b) Application. An application for a protective order or to place
under seal shall be filed with the Administrative Law Judge. The
application shall be accompanied by a sealed copy of the materials as to
which confidential treatment is sought.
(1) Procedure for supplying additional information. The person
making the application may be required to furnish in writing additional
information with respect to the grounds for objection to public
disclosure. Failure to supply the information so requested within 14
days from the date of receipt of a notice of the information required
shall be deemed a waiver of the objection to public disclosure of that
portion of the information to which the additional information relates,
unless the Administrative Law Judge shall otherwise order for good cause
shown at or before the expiration of such 14-day period.
(2) Confidentiality of materials pending final decision. Pending the
determination of the application for confidential treatment,
transcripts, non-final orders including an initial decision, if any, and
other materials in connection with the application shall be placed under
seal; shall be for the confidential use only of the Administrative Law
Judge, the Secretary's designee, the applicant, the Director, and any
other respondent and representative; and shall be made available to the
public only in accordance with orders of the Administrative Law Judge or
the Secretary's designee.
(3) Public availability of orders. Any final order of the
Administrative Law Judge or the Secretary's designee denying or
sustaining an application for confidential treatment shall be made
public. Any prior findings or opinions relating to an application for
confidential treatment under this section shall be made public at such
time as the material as to which confidentiality was requested is made
public.
Sec. 501.726 Motions.
(a) Generally. Unless made during a hearing or conference, a motion
shall be in writing, shall state with particularity the grounds
therefor, shall set forth the relief or order sought, and shall be
accompanied by a written brief of the points and authorities relied
[[Page 27]]
upon. Motions by a respondent must be filed with the Administrative Law
Judge and served upon the Director through the Office of Chief Counsel
and with any other party respondent or respondent's representative,
unless otherwise directed by the Administrative Law Judge. Motions by
the Director must be filed with the Administrative Law Judge and served
upon each party respondent or respondent's representative. All written
motions must be served in accordance with, and otherwise meet the
requirements of, Sec. 501.705. The Administrative Law Judge may order
that an oral motion be submitted in writing. No oral argument shall be
heard on any motion unless the Administrative Law Judge otherwise
directs.
(b) Opposing and reply briefs. Except as provided in
Sec. 501.741(e), briefs in opposition to a motion shall be filed not
later than 15 days after service of the motion. Reply briefs shall be
filed not later than 3 days after service of the opposition. The failure
of a party to oppose a written motion or an oral motion made on the
record shall be deemed a waiver of objection by that party to the entry
of an order substantially in the form of any proposed order accompanying
the motion.
(c) Dilatory motions. Frivolous, dilatory, or repetitive motions are
prohibited. The filing of such motions may form the basis for sanctions.
(d) Length limitation. Except as otherwise ordered by the
Administrative Law Judge, a brief in support of, or in opposition to, a
motion shall not exceed 15 pages, exclusive of pages containing any
table of contents, table of authorities, or addendum.
(e) A motion to set aside a default shall be made within a
reasonable time as determined by the Administrative Law Judge, state the
reasons for the failure to appear or defend, and, if applicable, specify
the nature of the proposed defense in the proceeding. In order to
prevent injustice and on such conditions as may be appropriate, the
Administrative Law Judge, at any time prior to the filing of his or her
decision, or the Secretary's designee, at any time during the review
process, may for good cause shown set aside a default.
Sec. 501.727 Motion for summary disposition.
(a) At any time after a respondent's answer has been filed, the
respondent or the Director may make a motion for summary disposition of
any or all allegations contained in the Order Instituting Proceedings.
If the Director has not completed presentation of his or her case-in-
chief, a motion for summary disposition shall be made only with
permission of the Administrative Law Judge. The facts of the pleadings
of the party against whom the motion is made shall be taken as true,
except as modified by stipulations or admissions made by that party, by
uncontested affidavits, or by facts officially noticed pursuant to
Sec. 501.732(b).
(b) Decision on motion. The Administrative Law Judge may promptly
decide the motion for summary disposition or may defer decision on the
motion. The Administrative Law Judge shall issue an order granting a
motion for summary disposition if the record shows there is no genuine
issue with regard to any material fact and the party making the motion
is entitled to a summary disposition as a matter of law.
(c) A motion for summary disposition must be accompanied by a
statement of the material facts as to which the moving party contends
there is no genuine issue. Such motion must be supported by documentary
evidence, which may take the form of admissions in pleadings,
stipulations, depositions, transcripts, affidavits, and any other
evidentiary materials that the moving party contends support its
position. The motion must also be accompanied by a brief containing the
points and authorities in support of the moving party's arguments. Any
party opposing a motion for summary disposition must file a statement
setting forth those material facts as to which such party contends a
genuine dispute exists. The opposition must be supported by evidence of
the same type as that submitted with the motion for summary disposition
and a brief containing the points and authorities in support of the
contention that summary disposition would be inappropriate.
[[Page 28]]
Sec. 501.728 Subpoenas.
(a) Availability; procedure. In connection with any hearing before
an Administrative Law Judge, either the respondent or the Director may
request the issuance of subpoenas requiring the attendance and testimony
of witnesses at the designated time and place of hearing, and subpoenas
requiring the production of documentary or other tangible evidence
returnable at a designated time and place. Unless made on the record at
a hearing, requests for issuance of a subpoena shall be made in writing
and served on each party pursuant to Sec. 501.705.
(b) Standards for issuance. If it appears to the Administrative Law
Judge that a subpoena sought may be unreasonable, oppressive, excessive
in scope, or unduly burdensome, he or she may, in his or her discretion,
as a condition precedent to the issuance of the subpoena, require the
person seeking the subpoena to show the general relevance and reasonable
scope of the testimony or other evidence sought. If after consideration
of all the circumstances, the Administrative Law Judge determines that
the subpoena or any of its terms is unreasonable, oppressive, excessive
in scope, or unduly burdensome, he or she may refuse to issue the
subpoena, or issue a modified subpoena as fairness requires. In making
the foregoing determination, the Administrative Law Judge may inquire of
the other participants whether they will stipulate to the facts sought
to be proved.
(c) Service. Service of a subpoena shall be made pursuant to the
provisions of Sec. 501.705.
(d) Application to quash or modify--(1) Procedure. Any person to
whom a subpoena is directed or who is an owner, creator or the subject
of the documents or materials that are to be produced pursuant to a
subpoena may, prior to the time specified therein for compliance, but
not later than 15 days after the date of service of such subpoena,
request that the subpoena be quashed or modified. Such request shall be
made by application filed with the Administrative Law Judge and served
on all parties pursuant to Sec. 501.705. The party on whose behalf the
subpoena was issued may, not later than 5 days after service of the
application, file an opposition to the application.
(2) Standards governing application to quash or modify. If the
Administrative Law Judge determines that compliance with the subpoena
would be unreasonable, oppressive or unduly burdensome, the
Administrative Law Judge may quash or modify the subpoena, or may order
return of the subpoena only upon specified conditions. These conditions
may include, but are not limited to, a requirement that the party on
whose behalf the subpoena was issued shall make reasonable compensation
to the person to whom the subpoena was addressed for the cost of copying
or transporting evidence to the place for return of the subpoena.
(e) Witness fees and mileage. Witnesses summoned to appear at a
proceeding shall be paid the same fees and mileage that are paid to
witnesses in the courts of the United States, and witnesses whose
depositions are taken and the persons taking the same shall severally be
entitled to the same fees as are paid for like services in the courts of
the United States. Witness fees and mileage shall be paid by the party
at whose instance the witnesses appear.
Sec. 501.729 Sanctions.
(a) Contemptuous conduct--(1) Subject to exclusion or suspension.
Contemptuous conduct by any person before an Administrative Law Judge or
the Secretary's designee during any proceeding, including any
conference, shall be grounds for the Administrative Law Judge or the
Secretary's designee to:
(i) Exclude that person from such hearing or conference, or any
portion thereof; and/or
(ii) If a representative, summarily suspend that person from
representing others in the proceeding in which such conduct occurred for
the duration, or any portion, of the proceeding.
(2) Adjournment. Upon motion by a party represented by a
representative subject to an order of exclusion or suspension, an
adjournment shall be granted to allow the retention of a new
representative. In determining the length of an adjournment, the
Administrative Law Judge or the Secretary's designee shall consider, in
addition to
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the factors set forth in Sec. 501.737, the availability of another
representative for the party or, if the representative was a counsel, of
other members of a suspended counsel's firm.
(b) Deficient filings; leave to cure deficiencies. The
Administrative Law Judge, or the Secretary's designee in the case of a
request for review, may in his or her discretion, reject, in whole or in
part, any filing that fails to comply with any requirements of this
subpart or of any order issued in the proceeding in which the filing was
made. Any such filings shall not be part of the record. The
Administrative Law Judge or the Secretary's designee may direct a party
to cure any deficiencies and to resubmit the filing within a fixed time
period.
(c) Failure to make required filing or to cure deficient filing. The
Administrative Law Judge (or the Secretary's designee during review
proceedings) may enter a default pursuant to Sec. 501.716, dismiss the
case, decide the particular matter at issue against that person, or
prohibit the introduction of evidence or exclude testimony concerning
that matter if a person fails:
(1) To make a filing required under this subpart; or
(2) To cure a deficient filing within the time specified by the
Administrative Law Judge or the Secretary's designee pursuant to
paragraph (b) of this section.
(d) Failure to make required filing or to cure deficient filing in
the case of a request for review. The Secretary's designee, in any case
of a request for review, may decide the issue against that person, or
prohibit the introduction of evidence or exclude testimony concerning
that matter if a person fails:
(1) To make a filing required under this subpart; or
(2) To cure a deficient filing within the time specified by the
Secretary's designee pursuant to paragraph (b) of this section.
Sec. 501.730 Depositions upon oral examination.
(a) Procedure. Any party desiring to take the testimony of a witness
by deposition shall make a written motion setting forth the reasons why
such deposition should be taken including the specific reasons why the
party believes the witness may be unable to attend or testify at the
hearing; the name and address of the prospective witness; the matters
concerning which the prospective witness is expected to be questioned;
and the proposed time and place for the taking of the deposition.
(b) Required finding when ordering a deposition. In the discretion
of the Administrative Law Judge, an order for deposition may be issued
upon a finding that the prospective witness will likely give testimony
material to the proceeding, that it is likely the prospective witness
will be unable to attend or testify at the hearing because of age,
sickness, infirmity, imprisonment or other disability, and that the
taking of a deposition will serve the interests of justice.
(c) Contents of order. An order for deposition shall designate by
name a deposition officer. The designated officer may be the
Administrative Law Judge or any other person authorized to administer
oaths by the laws of the United States or of the place where the
deposition is to be held. An order for deposition also shall state:
(1) The name of the witness whose deposition is to be taken;
(2) The scope of the testimony to be taken;
(3) The time and place of the deposition;
(4) The manner of recording, preserving and filing the deposition;
and
(5) The number of copies, if any, of the deposition and exhibits to
be filed upon completion of the deposition.
(d) Procedure at depositions. A witness whose testimony is taken by
deposition shall swear or affirm before any questions are put to him or
her. Examination and cross-examination of witnesses may proceed as
permitted at a hearing. A witness being deposed may have counsel or a
representative present during the deposition.
(e) Objections to questions or evidence. Objections to questions or
evidence shall be in short form, stating the grounds of objection relied
upon. Objections to questions or evidence shall be noted by the
deposition officer upon the deposition, but a deposition officer (other
than an Administrative Law
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Judge) shall not have the power to decide on the competency, materiality
or relevance of evidence. Failure to object to questions or evidence
before the deposition officer shall not be deemed a waiver unless the
ground of the objection is one that might have been obviated or removed
if presented at that time.
(f) Filing of depositions. The questions asked and all answers or
objections shall be recorded or transcribed verbatim, and a transcript
shall be prepared by the deposition officer, or under his or her
direction. The transcript shall be subscribed by the witness and
certified by the deposition officer. The original deposition transcript
and exhibits shall be filed with the Administrative Law Judge. A copy of
the deposition transcript and exhibits shall be served on the opposing
party or parties. The cost of the transcript (including copies) shall be
paid by the party requesting the deposition.
Sec. 501.731 Depositions upon written questions.
(a) Availability. Depositions may be taken and submitted on written
questions upon motion of any party. The motion shall include the
information specified in Sec. 501.730(a). A decision on the motion shall
be governed by Sec. 501.730(b).
(b) Procedure. Written questions shall be filed with the motion. Not
later than 10 days after service of the motion and written questions,
any party may file objections to such written questions and any party
may file cross-questions. When a deposition is taken pursuant to this
section no persons other than the witness, representative or counsel to
the witness, the deposition officer, and, if the deposition officer does
not act as reporter, a reporter, shall be present at the examination of
the witness. No party shall be present or represented unless otherwise
permitted by order. The deposition officer shall propound the questions
and cross-questions to the witness in the order submitted.
(c) Additional requirements. The order for deposition, filing of the
deposition, form of the deposition and use of the deposition in the
record shall be governed by paragraphs (b) through (g) of Sec. 501.730,
except that no cross-examination shall be made.
Sec. 501.732 Evidence.
The applicable evidentiary standard for proceedings under this
subpart is proof by a preponderance of reliable, probative, and
substantial evidence. The Administrative Law Judge shall admit any
relevant and material oral, documentary, or demonstrative evidence. The
Federal Rules of Evidence do not apply, by their own force, to
proceedings under this subpart, but shall be employed as general
guidelines. The fact that evidence submitted by a party is hearsay goes
only to the weight of the evidence and does not affect its
admissibility.
(a) Objections and offers of proof--(1) Objections. Objections to
the admission or exclusion of evidence must be made on the record and
shall be in short form, stating the grounds relied upon. Exceptions to
any ruling thereon by the Administrative Law Judge need not be noted at
the time of the ruling. Such exceptions will be deemed waived on review
by the Secretary's designee, however, unless raised:
(i) Pursuant to interlocutory review in accordance with
Sec. 501.741;
(ii) In a proposed finding or conclusion filed pursuant to
Sec. 501.738; or
(iii) In a petition for the Secretary's designee's review of an
Administrative Law Judge's decision filed in accordance with
Sec. 501.741.
(2) Offers of proof. Whenever evidence is excluded from the record,
the party offering such evidence may make an offer of proof, which shall
be included in the record. Excluded material shall be retained pursuant
to Sec. 501.739(b).
(b) Official notice. An Administrative Law Judge or Secretary's
designee may take official notice of any material fact that might be
judicially noticed by a district court of the United States, any matter
in the public official records of the Secretary, or any matter that is
particularly within the knowledge of the Department as an expert body.
If official notice is requested or taken of a material fact not
appearing in the evidence in the record, a party, upon timely request to
the Administrative Law Judge, shall be afforded an opportunity to
establish the contrary.
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(c) Stipulations. The parties may, by stipulation, at any stage of
the proceeding agree upon any pertinent fact in the proceeding. A
stipulation may be received in evidence and, when accepted by the
Administrative Law Judge, shall be binding on the parties to the
stipulation.
(d) Presentation under oath or affirmation. A witness at a hearing
for the purpose of taking evidence shall testify under oath or
affirmation.
(e) Presentation, rebuttal and cross-examination. A party is
entitled to present its case or defense by oral or documentary evidence,
to submit rebuttal evidence, and to conduct such cross-examination as,
in the discretion of the Administrative Law Judge, may be required for a
full and true disclosure of the facts.
Sec. 501.733 Evidence: confidential information, protective orders.
(a) Procedure. In any proceeding as defined in Sec. 501.702, a
respondent; the Director; any person who is the owner, subject or
creator of a document subject to subpoena or which may be introduced as
evidence; or any witness who testifies at a hearing may file a motion
requesting a protective order to limit from disclosure to other parties
or to the public documents or testimony containing confidential
information. The motion should include a general summary or extract of
the documents without revealing confidential details. If a person seeks
a protective order against disclosure to other parties as well as the
public, copies of the documents shall not be served on other parties.
Unless the documents are unavailable, the person shall file for
inspection by the Administrative Law Judge a sealed copy of the
documents as to which the order is sought.
(b) Basis for issuance. Documents and testimony introduced in a
public hearing are presumed to be public. A motion for a protective
order shall be granted only upon a finding that the harm resulting from
disclosure would outweigh the benefits of disclosure.
(c) Requests for additional information supporting confidentiality.
A person seeking a protective order under paragraph (a) of this section
may be required to furnish in writing additional information with
respect to the grounds for confidentiality. Failure to supply the
information so requested not later than 5 days from the date of receipt
by the person of a notice of the information required shall be deemed a
waiver of the objection to public disclosure of that portion of the
documents to which the additional information relates, unless the
Administrative Law Judge shall otherwise order for good cause shown at
or before the expiration of such 5-day period.
(d) Confidentiality of documents pending decision. Pending a
determination of a motion under this section, the documents as to which
confidential treatment is sought and any other documents that would
reveal the confidential information in those documents shall be
maintained under seal and shall be disclosed only in accordance with
orders of the Administrative Law Judge. Any order issued in connection
with a motion under this section shall be made public unless the order
would disclose information as to which a protective order has been
granted, in which case that portion of the order that would reveal the
protected information shall not be made public.
Sec. 501.734 Introducing prior sworn statements of witnesses into
the record.
(a) At a hearing, any person wishing to introduce a prior, sworn
statement of a witness who is not a party to the proceeding, that is
otherwise admissible in the proceeding, may make a motion setting forth
the reasons therefor. If only part of a statement is offered in
evidence, the Administrative Law Judge may require that all relevant
portions of the statement be introduced. If all of a statement is
offered in evidence, the Administrative Law Judge may require that
portions not relevant to the proceeding be excluded. A motion to
introduce a prior sworn statement may be granted if:
(1) The witness is dead;
(2) The witness is out of the United States, unless it appears that
the absence of the witness was procured by the party offering the prior
sworn statement;
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(3) The witness is unable to attend or testify because of age,
sickness, infirmity, imprisonment or other disability;
(4) The party offering the prior sworn statement has been unable to
procure the attendance of the witness by subpoena; or,
(5) In the discretion of the Administrative Law Judge, it would be
desirable, in the interests of justice, to allow the prior sworn
statement to be used. In making this determination, due regard shall be
given to the presumption that witnesses will testify orally in an open
hearing. If the parties have stipulated to accept a prior sworn
statement in lieu of live testimony, consideration shall also be given
to the convenience of the parties in avoiding unnecessary expense.
Sec. 501.735 Proposed findings, conclusions and supporting briefs.
(a) Opportunity to file. Before a decision is issued by the
Administrative Law Judge, each party shall have an opportunity,
reasonable in light of all the circumstances, to file in writing
proposed findings and conclusions.
(b) Procedure. Proposed findings of fact must be supported by
citations to specific portions of the record. If successive filings are
directed, the proposed findings and conclusions of the party assigned to
file first shall be set forth in serially numbered paragraphs, and any
counter statement of proposed findings and conclusions shall, in
addition to any other matter presented, indicate those paragraphs of the
proposals already filed as to which there is no dispute. A reply brief
may be filed by the party assigned to file first, or, where simultaneous
filings are directed, reply briefs may be filed by each party, within
the period prescribed therefor by the Administrative Law Judge. No
further briefs may be filed except with permission of the Administrative
Law Judge.
(c) Time for filing. In any proceeding in which a decision is to be
issued:
(1) At the close of each hearing, the Administrative Law Judge
shall, by order, after consultation with the parties, prescribe the
period within which proposed findings and conclusions and supporting
briefs are to be filed. The party directed to file first shall make its
initial filing not later than 30 days after the end of the hearing
unless the Administrative Law Judge, for good cause shown, permits a
different period and sets forth in the order the reasons why the
different period is necessary.
(2) The total period within which all such proposed findings and
conclusions and supporting briefs and any counter statements of proposed
findings and conclusions and reply briefs are to be filed shall be no
longer than 90 days after the close of the hearing unless the
Administrative Law Judge, for good cause shown, permits a different
period and sets forth in an order the reasons why the different period
is necessary.
Sec. 501.736 Authority of Administrative Law Judge.
The Administrative Law Judge shall have authority to do all things
necessary and appropriate to discharge his or her duties. No provision
of these rules shall be construed to limit the powers of the
Administrative Law Judge provided by the Administrative Procedure Act, 5
U.S.C. 556, 557. The powers of the Administrative Law Judge include, but
are not limited to:
(a) Administering oaths and affirmations;
(b) Issuing subpoenas authorized by law and revoking, quashing, or
modifying any such subpoena;
(c) Receiving relevant evidence and ruling upon the admission of
evidence and offers of proof;
(d) Regulating the course of a proceeding and the conduct of the
parties and their representatives;
(e) Holding prehearing and other conferences as set forth in
Sec. 501.726 and requiring the attendance at any such conference of at
least one representative of each party who has authority to negotiate
concerning the resolution of issues in controversy;
(f) Subject to any limitations set forth elsewhere in this subpart,
considering and ruling on all procedural and other motions;
(g) Upon notice to all parties, reopening any hearing prior to the
issuance of a decision;
(h) Requiring production of records or any information relevant to
any act
[[Page 33]]
or transaction subject to a hearing under this subpart, and imposing
sanctions available under Federal Rule of Civil Procedure 37(b)(2) (Fed.
R. Civ. P. 37(b)(2), 28 U.S.C.) for a party's failure to comply with
discovery requests;
(i) Establishing time, place, and manner limitations on the
attendance of the public and the media for any hearing; and
(j) Setting fees and expenses for witnesses, including expert
witnesses.
Sec. 501.737 Adjustments of time, postponements and adjournments.
(a) Availability. Except as otherwise provided by law, the
Administrative Law Judge or the Secretary's designee, as appropriate, at
any time prior to the filing of his or her decision, may, for good cause
and in the interest of justice, modify any time limit prescribed by this
subpart and may, consistent with paragraph (b) of this section, postpone
or adjourn any hearing.
(b) Limitations on postponements, adjournments and adjustments. A
hearing shall begin at the time and place ordered, provided that, within
the limits provided, the Administrative Law Judge or the Secretary's
designee, as appropriate, may for good cause shown postpone the
commencement of the hearing or adjourn a convened hearing for a
reasonable period of time.
(1) Additional considerations. In considering a motion for
postponement of the start of a hearing, adjournment once a hearing has
begun, or extensions of time for filing papers, the Administrative Law
Judge or the Secretary's designee, as appropriate, shall consider, in
addition to any other factors:
(i) The length of the proceeding to date;
(ii) The number of postponements, adjournments or extensions already
granted;
(iii) The stage of the proceedings at the time of the request; and
(iv) Any other matter as justice may require.
(2) Time limit. Postponements, adjournments or extensions of time
for filing papers shall not exceed 21 days unless the Administrative Law
Judge or the Secretary's designee, as appropriate, states on the record
or sets forth in a written order the reasons why a longer period of time
is necessary.
Sec. 501.738 Disqualification and withdrawal of Administrative Law
Judge.
(a) Notice of disqualification. If at any time an Administrative Law
Judge or Secretary's designee believes himself or herself to be
disqualified from considering a matter, the Administrative Law Judge or
Secretary's designee, as appropriate, shall issue a notice stating that
he or she is withdrawing from the matter and setting forth the reasons
therefor.
(b) Motion for Withdrawal. Any party who has a reasonable, good
faith basis to believe an Administrative Law Judge or Secretary's
designee has a personal bias, or is otherwise disqualified from hearing
a case, may make a motion to the Administrative Law Judge or Secretary's
designee, as appropriate, that the Administrative Law Judge or
Secretary's designee withdraw. The motion shall be accompanied by a
statement subject to 18 U.S.C. 1001 setting forth in detail the facts
alleged to constitute grounds for disqualification. If the
Administrative Law Judge or Secretary's designee finds himself or
herself qualified, he or she shall so rule and shall continue to preside
over the proceeding.
Sec. 501.739 Record in proceedings before Administrative Law Judge;
retention of documents; copies.
(a) Recordation. Unless otherwise ordered by the Administrative Law
Judge, all hearings shall be recorded and a written transcript thereof
shall be prepared.
(1) Availability of a transcript. Transcripts of hearings shall be
available for purchase.
(2) Transcript correction. Prior to the filing of post-hearing
briefs or proposed findings and conclusions, or within such earlier time
as directed by the Administrative Law Judge, a party or witness may make
a motion to correct the transcript. Proposed corrections of the
transcript may be submitted to the Administrative Law Judge by
stipulation pursuant to Sec. 501.732(c), or by motion. Upon notice to
all parties to the proceeding, the Administrative Law
[[Page 34]]
Judge may, by order, specify corrections to the transcript.
(b) Contents of the record. The record of each hearing shall consist
of:
(1) The Order Instituting Proceedings, Answer to Order Instituting
Proceedings, Notice of Hearing and any amendments thereto;
(2) Each application, motion, submission or other paper, and any
amendments, motions, objections, and exceptions to or regarding them;
(3) Each stipulation, transcript of testimony, interrogatory,
deposition, and document or other item admitted into evidence;
(4) With respect to a request to disqualify an Administrative Law
Judge or to allow the Administrative Law Judge's withdrawal under
Sec. 501.738, each affidavit or transcript of testimony taken and the
decision made in connection with the request;
(5) All proposed findings and conclusions;
(6) Each written order issued by the Administrative Law Judge; and
(7) Any other document or item accepted into the record by the
Administrative Law Judge.
(c) Retention of documents not admitted. Any document offered as
evidence but excluded, and any document marked for identification but
not offered as an exhibit, shall not be part of the record. The
Administrative Law Judge shall retain any such document until the later
of the date the proceeding becomes final, or the date any judicial
review of the final proceeding is no longer available.
(d) Substitution of copies. A true copy of a document may be
substituted for any document in the record or any document retained
pursuant to paragraph (c) of this section.
Sec. 501.740 Decision of Administrative Law Judge.
The Administrative Law Judge shall prepare a decision that
constitutes his or her final disposition of the proceedings.
(a) Content. (1) The Administrative Law Judge shall determine
whether or not the respondent has violated any provision of parts 500
and 515 of this chapter or the provisions of any license, ruling,
regulation, order, direction or instruction issued by or under the
authority of the Secretary pursuant to part 500 or 515 of this chapter
or otherwise under the Trading with the Enemy Act.
(2) The Administrative Law Judge's decision shall include findings
and conclusions, and the reasons or basis therefor, as to all the
material issues of fact, law or discretion presented on the record.
(3) (i) Upon a finding of violation, the Administrative Law Judge
shall award an appropriate monetary civil penalty in an amount
consistent with the Penalty Guidelines published by the Director.
(ii) Notwithstanding paragraph (a)(3)(i) of this section, the
Administrative Law Judge:
(A) Shall provide an opportunity for a respondent to assert his or
her inability to pay a penalty, or financial hardship, by filing with
the Administrative Law Judge a financial disclosure statement subject to
18 U.S.C. 1001 that sets forth in detail the basis for the financial
hardship or the inability to pay; and
(B) Shall consider any such filing in determining the appropriate
monetary civil penalty.
(b) Administrative Law Judge's decision--(1) Service. The
Administrative Law Judge shall serve his or her decision on the
respondent and on the Director through the Office of Chief Counsel, and
shall file a copy of the decision with the Secretary's designee.
(2) Filing of report with the Secretary's designee. If the
respondent or Director files a petition for review pursuant to
Sec. 501.741, or upon a request from the Secretary's designee, the
Administrative Law Judge shall file his or her report with the
Secretary's designee not later than 20 days after service of his or her
decision on the parties. The report shall consist of the record,
including the Administrative Law Judge's decision, and any petition from
the respondent or the Director seeking review.
(3) Correction of errors. Until the Administrative Law Judge's
report has been directed for review by the Secretary's designee or, in
the absence of a direction for review, until the decision
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has become a final order, the Administrative Law Judge may correct
clerical errors and errors arising through oversight or inadvertence in
decisions, orders, or other parts of the record.
(c) Administrative Law Judge's decision final unless review
directed. Unless the Secretary's designee determines to review a
decision in accordance with Sec. 501.741(a)(1), the decision of the
Administrative Law Judge shall become the final decision of the
Department.
(d) Penalty awarded. The Director is charged with implementing all
final decisions of the Department and, upon a finding of violation and/
or award of a civil monetary penalty, shall carry out the necessary
steps to close the action.
Sec. 501.741 Review of decision or ruling.
(a) Availability. (1)(i) Review of the decision of the
Administrative Law Judge by the Secretary's designee is not a right. The
Secretary's designee may, in his or her discretion, review the decision
of the Administrative Law Judge on the petition of either the respondent
or the Director, or upon his or her own motion. The Secretary's designee
shall determine whether to review a decision:
(A) If a petition for review has been filed by the respondent or the
Director, not later than 30 days after that date the Administrative Law
Judge filed his or her report with the Secretary's designee pursuant to
paragraph (b)(2) of this section; or
(B) If no petition for review has been filed by the respondent or
the Director, not later than 40 days after the date the Administrative
Law Judge filed his or her decision with the Secretary's designee
pursuant to paragraph (b)(1) of this section.
(ii) In determining whether to review a decision upon petition of
the respondent or the Director, the Secretary's designee shall consider
whether the petition for review makes a reasonable showing that:
(A) A prejudicial error was committed in the conduct of the
proceeding; or
(B) The decision embodies:
(1) A finding or conclusion of material fact that is clearly
erroneous;
(2) A conclusion of law that is erroneous; or
(3) An exercise of discretion or decision of law or policy that is
important and that the Secretary's designee should review.
(2) Interlocutory review of ruling. The Secretary's designee shall
review any ruling of an Administrative Law Judge involving privileged or
confidential material that is the subject of a petition for review. See
Sec. 501.725.
(b) Filing. Either the respondent or the Director, when adversely
affected or aggrieved by the decision or ruling of the Administrative
Law Judge, may seek review by the Secretary's designee by filing a
petition for review. Any petition for review shall be filed with the
Administrative Law Judge within 10 days after service of the
Administrative Law Judge's decision or the issuance of a ruling
involving privileged or confidential material.
(c) Contents. The petition shall state why the Secretary's designee
should review the Administrative Law Judge's decision or ruling,
including: Whether the Administrative Law Judge's decision or ruling
raises an important question of law, policy or discretion; whether
review by the Secretary's designee will resolve a question about which
the Department's Administrative Law Judges have rendered differing
opinions; whether the Administrative Law Judge's decision or ruling is
contrary to law or Department precedent; whether a finding of material
fact is not supported by a preponderance of the evidence; or whether a
prejudicial error of procedure or an abuse of discretion was committed.
A petition should concisely state the portions of the decision or ruling
for which review is sought. A petition shall not incorporate by
reference a brief or legal memorandum.
(d) When filing effective. A petition for review is filed when
received by the Administrative Law Judge.
(e) Statements in opposition to petition. Not later than 8 days
after the filing of a petition for review, either the respondent or the
Director may file a statement in opposition to a petition. A statement
in opposition to a petition for review shall be filed in the manner
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specified in this section for filing of petitions for review. Statements
in opposition shall concisely state why the Administrative Law Judge's
decision or ruling should not be reviewed with respect to each portion
of the petition to which it is addressed.
(f) Number of copies. An original and three copies of a petition or
a statement in opposition to a petition shall be filed with the
Administrative Law Judge.
(g) Prerequisite to judicial review. Pursuant to section 704 of the
Administrative Procedure Act, 5 U.S.C. 704, a petition for review by the
Secretary's designee of an Administrative Law Judge decision or ruling
is a prerequisite to the seeking of judicial review of a final order
entered pursuant to such decision or ruling.
Sec. 501.742 Secretary's designee's consideration of decisions
by Administrative Law Judges.
(a) Scope of review. The Secretary's designee may affirm, reverse,
modify, set aside or remand for further proceedings, in whole or in
part, a decision or ruling by an Administrative Law Judge and may make
any findings or conclusions that in his or her judgment are proper and
on the basis of the record and such additional evidence as the
Secretary's designee may receive in his or her discretion.
(b) Summary affirmance. The Secretary's designee may summarily
affirm an Administrative Law Judge's decision or ruling based upon the
petition for review and any response thereto, without further briefing,
if he or she finds that no issue raised in the petition for review
warrants further consideration.
Sec. 501.743 Briefs filed with the Secretary's designee.
(a) Briefing schedule order. If review of a determination is
mandated by judicial order or whenever the Secretary's designee reviews
a decision or ruling, the Secretary's designee shall, unless such review
results in summary affirmance pursuant to Sec. 501.742(b), issue a
briefing schedule order directing the parties to file opening briefs and
specifying particular issues, if any, as to which briefing should be
limited or directed. Unless otherwise provided, opening briefs shall be
filed not later than 40 days after the date of the briefing schedule
order. Opposition briefs shall be filed not later than 30 days after the
date opening briefs are due. Reply briefs shall be filed not later than
14 days after the date opposition briefs are due. No briefs in addition
to those specified in the briefing schedule order may be filed without
permission of the Secretary's designee. The briefing schedule order
shall be issued not later than 21 days after the later of:
(1) The last day permitted for filing a brief in opposition to a
petition for review pursuant to Sec. 501.741(e); or
(2) Receipt by the Secretary's designee of the mandate of a court
with respect to a judicial remand.
(b) Contents of briefs. Briefs shall be confined to the particular
matters at issue. Each exception to the findings or conclusions being
reviewed shall be stated succinctly. Exceptions shall be supported by
citation to the relevant portions of the record, including references to
the specific pages relied upon, and by concise argument including
citation of such statutes, decisions and other authorities as may be
relevant. If the exception relates to the admission or exclusion of
evidence, the substance of the evidence admitted or excluded shall be
set forth in the brief, in an appendix thereto, or by citation to the
record. If the exception relates to interlocutory review, there is no
requirement to reference pages of the transcript. Reply briefs shall be
confined to matters in opposition briefs of other parties.
(c) Length limitation. Opening and opposition briefs shall not
exceed 30 pages and reply briefs shall not exceed 20 pages, exclusive of
pages containing the table of contents, table of authorities, and any
addendum, except with permission of the Secretary's designee.
Sec. 501.744 Record before the Secretary's designee.
The Secretary's designee shall determine each matter on the basis of
the record and such additional evidence as the Secretary's designee may
receive in his or her discretion. In any case of interlocutory review,
the Administrative Law Judge shall direct that a
[[Page 37]]
transcript of the relevant proceedings be prepared and forwarded to the
Secretary's designee.
(a) Contents of the record. In proceedings for final decision before
the Secretary's designee the record shall consist of:
(1) All items that are part of the record in accordance with
Sec. 501.739;
(2) Any petitions for review, cross-petitions or oppositions;
(3) All briefs, motions, submissions and other papers filed on
appeal or review; and
(4) Any other material of which the Secretary's designee may take
administrative notice.
(b) Review of documents not admitted. Any document offered in
evidence but excluded by the Administrative Law Judge and any document
marked for identification but not offered as an exhibit shall not be
considered a part of the record before the Secretary's designee on
review but shall be transmitted to the Secretary's designee if he or she
so requests. In the event that the Secretary's designee does not request
the document, the Administrative Law Judge shall retain the document not
admitted into the record until the later of:
(1) The date upon which the Secretary's designee's order becomes
final; or
(2) The conclusion of any judicial review of that order.
Sec. 501.745 Orders and decisions: signature, date and public
availability.
(a) Signature required. All orders and decisions of the
Administrative Law Judge or Secretary's designee shall be signed.
(b) Date of entry of orders. The date of entry of an order by the
Administrative Law Judge or Secretary's designee shall be the date the
order is signed. Such date shall be reflected in the caption of the
order, or if there is no caption, in the order itself.
(c) Public availability of orders. (1) In general, any final order
of the Department shall be made public. Any supporting findings or
opinions relating to a final order shall be made public at such time as
the final order is made public.
(2) Exception. Any final order of the Administrative Law Judge or
Secretary's designee pertaining to an application for confidential
treatment shall only be available to the public in accordance with
Sec. 501.725(b)(3).
Sec. 501.746 Referral to United States Department of Justice;
administrative collection measures.
In the event that the respondent does not pay any penalty imposed
pursuant to this part within 30 calendar days of the mailing of the
written notice of the imposition of the penalty, the matter may be
referred for administrative collection measures or to the United States
Department of Justice for appropriate action to recover the penalty in a
civil suit in a Federal district court.
Sec. 501.747 Procedures on remand of decisions.
Either an Administrative Law Judge or a Secretary's designee, as
appropriate, shall reconsider any Department decision on judicial remand
to the Department. The rules of practice contained in this subpart shall
apply to all proceedings held on judicial remand.
Subpart E_Procedures
Source: 62 FR 45101, Aug. 25, 1997, unless otherwise noted.
Redesignated at 68 FR 53642, Sept. 11, 2003.
Sec. 501.801 Licensing.
(a) General licenses. General licenses have been issued authorizing
under appropriate terms and conditions certain types of transactions
which are subject to the prohibitions contained in this chapter. General
licenses are set forth in subpart E of each part contained in this
chapter, and they also may be available through the following page on
OFAC's Web site: http://www.treasury.gov/resource-center/sanctions/
programs/Pages/Programs.aspx. General licenses may also be issued
authorizing under appropriate terms and conditions certain types of
transactions which are subject to prohibitions contained in economic
sanctions programs the implementation and administration of which have
been delegated to
[[Page 38]]
the Director of the Office of Foreign Assets Control but which are not
yet codified in this chapter. It is the policy of the Office of Foreign
Assets Control not to grant applications for specific licenses
authorizing transactions to which the provisions of an outstanding
general license are applicable. Persons availing themselves of certain
general licenses may be required to file reports and statements in
accordance with the instructions specified in those licenses. Failure to
file such reports or statements will nullify the authority of the
general license.
(b) Specific licenses--(1) General course of procedure. Transactions
subject to the prohibitions contained in this chapter, or to
prohibitions the implementation and administration of which have been
delegated to the Director of the Office of Foreign Assets Control, which
are not authorized by general license may be effected only under
specific licenses.
(2) Applications for specific licenses. Original signed applications
for specific licenses to engage in any transactions prohibited by or
pursuant to this chapter or sanctions programs that have been delegated
to the Director of the Office of Foreign Assets Control for
implementation and administration must be filed by mail or courier.
Applications will not be accepted by fax or electronically, unless
otherwise authorized. Applications may be submitted in letter form with
the exception of license applications for the unblocking of funds
transfers. Applications for the unblocking of funds transfers must be
submitted using TD-F 90-22.54, ``Application for the Release of Blocked
Funds,'' accompanied by two complete copies of the entire submission.
The form, which requires information regarding the date of the blocking,
the financial institutions involved in the transfer, and the beneficiary
and amount of the transfer, may be obtained from the OFAC Reporting and
License Application Forms page on OFAC's Web site (https://
www.treasury.gov/resource-center/sanctions/Pages/forms-index.aspx) or
the Office of Foreign Assets Control, Licensing Division, U.S.
Department of the Treasury, 1500 Pennsylvania Avenue NW., Freedman's
Bank Building, Washington, DC 20220. Any person having an interest in a
transaction or proposed transaction may file an application for a
license authorizing such transaction.
(3) Information to be supplied. The applicant must supply all
information specified by relevant instructions and/or forms, and must
fully disclose the names of all parties who are concerned with or
interested in the proposed transaction. If the application is filed by
an agent, the agent must disclose the name of his principal(s). Such
documents as may be relevant shall be attached to each application as a
part of such application, except that documents previously filed with
the Office of Foreign Assets Control may, where appropriate, be
incorporated by reference in such application. Applicants are required
to supply their taxpayer identifying number pursuant to 31 U.S.C. 7701,
which number may be used for purposes of collecting and reporting on any
delinquent amounts arising out of the applicant's relationship with the
United States Government. Applicants may be required to furnish such
further information as is deemed necessary to a proper determination by
the Office of Foreign Assets Control. Any applicant or other party in
interest desiring to present additional information may do so at any
time before or after decision. Arrangements for oral presentation should
be made with the Office of Foreign Assets Control.
(4) Effect of denial. The denial of a license does not preclude the
reopening of an application or the filing of a further application. The
applicant or any other party in interest may at any time request
explanation of the reasons for a denial by correspondence or personal
interview.
(5) Reports under specific licenses. As a condition for the issuance
of any license, the licensee may be required to file reports with
respect to the transaction covered by the license, in such form and at
such times and places as may be prescribed in the license or otherwise.
(6) Issuance of license. Licenses will be issued by the Office of
Foreign Assets Control acting on behalf of the Secretary of the Treasury
or licenses may be issued by the Secretary of the Treasury acting
directly or through
[[Page 39]]
any specifically designated person, agency, or instrumentality.
(7) Address. License applications, reports, and inquiries should be
addressed to the appropriate division or individual within the Office of
Foreign Assets Control, or to its Director, at the following address:
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500
Pennsylvania Avenue, NW.--Annex, Washington, DC 20220.
(c) Registration of nongovernmental organizations--(1) Purpose of
registration. For those parts of this chapter specifically authorizing
the registration of nongovernmental organizations (``NGOs''),
registration numbers may be issued on a case-by-case basis to NGOs
involved in humanitarian or religious activities in countries or
geographic areas subject to economic sanctions pursuant to this chapter
V. A registration number authorizes certain transactions by or on behalf
of the registered NGO otherwise prohibited by the specific part with
respect to which the registration number is issued, including the
exportation of goods, services, and funds to the country or geographic
area subject to such part for the purpose of relieving human suffering.
The transactions authorized for registered NGOs either will be specified
by the statement of licensing policy in the part under which the
registration number is issued or by the Office of Foreign Assets Control
letter issuing the registration number.
(2) Application information to be supplied. Applications for
registration numbers should be submitted to the Compliance Programs
Division, Office of Foreign Assets Control, U.S. Department of the
Treasury, 1500 Pennsylvania Avenue, NW., Annex, Washington, DC 20220, or
by facsimile to (202) 622-2426, and must include:
(i) The organization's name in English, in the language of origin,
and any acronym or other names used to identify the organization;
(ii) Address and phone number of the organization's headquarters
location;
(iii) Full name in English, in the language of origin, and any
acronym or other names used, as well as nationality, citizenship,
current country of residence, place and date of birth for key staff at
the organization's headquarters, such as the chairman and board members,
president, director, etc.;
(iv) Identification of field offices or partner offices elsewhere,
including addresses, phone numbers, and organizational names used, as
well as the identification of the senior officer(s) at these locations,
including the person's name, position, nationality, citizenship, and
date of birth (names of individuals and organizations shall be provided
in English, in the language of origin, and shall include any acronym or
other names used to identify the individuals or organizations);
(v) Identification of subcontracting organizations, if any, to the
extent known or contemplated at the time of the application;
(vi) Existing sources of income, such as official grants, private
endowments, commercial activities;
(vii) Financial institutions that hold deposits on behalf of or
extend lines of credit to the organization (names of individuals and
organizations shall be provided in English, in the language of origin,
and shall include any acronym or other names used to identify the
individuals or organizations);
(viii) Independent accounting firms, if employed in the production
of the organization's financial statements (names of individuals and
organizations shall be provided in English, in the language of origin,
and shall include any acronym or other names used to identify the
individuals or organizations);
(ix) A detailed description of the organization's humanitarian or
religious activities and projects in countries or geographic areas
subject to economic sanctions pursuant to this chapter V;
(x) Most recent official registry documents, annual reports, and
annual filings with the pertinent government, as applicable; and
(xi) Names and addresses of organizations to which the applicant
currently provides or proposes to provide funding, services or material
support, to the extent known at the time of the vetting, as applicable.
(3) Use of registration number. Registered NGOs conducting
transactions authorized by their registrations to
[[Page 40]]
support their humanitarian or religious activities pursuant to any part
of this chapter should reference the registration number on all payments
and funds transfers and on all related documentation, including all
purchasing, shipping, and financing documents.
(4) Limitations. Registered NGOs are not authorized to make
remittances from blocked accounts. Registration numbers are not
transferable and may be revoked or modified at any time at the
discretion of the Director, Office of Foreign Assets Control.
Registration numbers do not excuse compliance with any law or regulation
administered by the Office of Foreign Assets Control or any other agency
(including reporting requirements) applicable to the transaction(s)
herein authorized, nor does it release the Registrant or third parties
from civil or criminal liability for violation of any law or regulation.
(5) Prior numbers. Registration numbers already issued remain in
effect.
[62 FR 45101, Aug. 25, 1997, as amended at 65 FR 10708, Feb. 29, 2000;
66 FR 2728, Jan. 11, 2001; 77 FR 1864, Jan. 12, 2012; 81 FR 76863, Nov.
4, 2016]
Sec. 501.802 Decisions.
The Office of Foreign Assets Control will advise each applicant of
the decision respecting filed applications. The decision of the Office
of Foreign Assets Control acting on behalf of the Secretary of the
Treasury with respect to an application shall constitute final agency
action.
Sec. 501.803 Amendment, modification, or revocation.
Except as otherwise provided by law, the provisions of each part of
this chapter and any rulings, licenses (whether general or specific),
authorizations, instructions, orders, or forms issued thereunder may be
amended, modified or revoked at any time.
[63 FR 35809, July 1, 1998]
Sec. 501.804 Rulemaking.
(a) All rules and other public documents are issued by the Director
of the Office of Foreign Assets Control. In general, rulemaking by the
Office of Foreign Assets Control involves foreign affairs functions of
the United States, and for that reason is exempt from the requirements
under the Administrative Procedure Act (5 U.S.C. 553) for notice of
proposed rulemaking, opportunity for public comment, and delay in
effective date.
(b) Any interested person may petition the Director of the Office of
Foreign Assets Control in writing for the issuance, amendment, or repeal
of any rule.
Sec. 501.805 Rules governing availability of information.
(a) The records of the Office of Foreign Assets Control which are
required by the Freedom of Information Act (5 U.S.C. 552) to be made
available to the public shall be made available in accordance with the
definitions, procedures, payment of fees, and other provisions of the
regulations on the Disclosure of Records of the Departmental Offices and
of other bureaus and offices of the Department of the Treasury issued
under 5 U.S.C. 552 and published at 31 CFR part 1.
Note to paragraph Sec. 501.805(a): Records or information obtained
or created in the implementation of part 598 of this chapter are not
subject to disclosure under section 552(a)(3) of the Freedom of
Information Act. See Sec. 598.802 of this chapter.
(b) The records of the Office of Foreign Assets Control which are
required by the Privacy Act (5 U.S.C. 552a) to be made available to an
individual shall be made available in accordance with the definitions,
procedures, requirements for payment of fees, and other provisions of
the Regulations on the Disclosure of Records of the Departmental Offices
and of other bureaus and offices of the Department of the Treasury
issued under 5 U.S.C. 552a and published at 31 CFR part 1.
(c) Any form issued for use in connection with this chapter may be
obtained in person or by writing to the Office of Foreign Assets
Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue,
NW.--Annex, Washington, DC 20220, or by calling 202/622-2480.
(d) Certain Civil Penalties Information. (1) After the conclusion of
a civil penalties proceeding that results in either
[[Page 41]]
the imposition of a civil monetary penalty or an informal settlement,
OFAC shall make available to the public certain information on a routine
basis, not less frequently than monthly, as follows:
(i) In each such proceeding against an entity, OFAC shall make
available to the public
(A) The name and address of the entity involved,
(B) The sanctions program involved,
(C) A brief description of the violation or alleged violation,
(D) A clear indication whether the proceeding resulted in an
informal settlement or in the imposition of a penalty,
(E) An indication whether the entity voluntarily disclosed the
violation or alleged violation to OFAC, and
(F) The amount of the penalty imposed or the amount of the agreed
settlement.
(ii) In such proceedings against individuals, OFAC shall release on
an aggregate basis
(A) The number of penalties imposed and informal settlements
reached,
(B) The sanctions programs involved,
(C) A brief description of the violations or alleged violations,
(D) A clear indication whether the proceedings resulted in informal
settlements, in the imposition of penalties, or in administrative
hearing requests pursuant to the Trading With the Enemy Act (TWEA), 50
U.S.C. 5(b), and
(E) The amounts of the penalties imposed and the amounts of the
agreed settlements.
(2) The medium through which information will be released is OFAC's
website at http://www.treas.gov/ofac.
(3) The information made available pursuant to paragraph (d)(1) of
this section shall not include the following:
(i) The name of any violator or alleged violator who is an
individual.
(ii) Records or information obtained or created in the
implementation of part 598 of this chapter.
(4) On a case-by-case basis, OFAC may release additional information
concerning a particular civil penalties proceeding.
[62 FR 45101, Aug. 25, 1997, as amended at 65 FR 41335, July 5, 2000; 68
FR 6822, Feb. 11, 2003]
Sec. 501.806 Procedures for unblocking funds believed to have been
blocked due to mistaken identity.
When a transaction results in the blocking of funds at a financial
institution pursuant to the applicable regulations of this chapter and a
party to the transaction believes the funds have been blocked due to
mistaken identity, that party may seek to have such funds unblocked
pursuant to the following administrative procedures:
(a) Any person who is a party to the transaction may request the
release of funds which the party believes to have been blocked due to
mistaken identity.
(b) Requests to release funds which a party believes to have been
blocked due to mistaken identity must be made in writing and addressed
to the Office of Foreign Assets Control, Compliance Programs Division,
1500 Pennsylvania Avenue, NW.--Annex, Washington, DC 20220, or sent by
facsimile transmission to the Compliance Programs Division at 202/622-
1657.
(c) The written request to release funds must include the name,
address, telephone number, and (where available) fax number of the party
seeking the release of the funds. For individuals, the inclusion of a
social security number is voluntary but will facilitate resolution of
the request. For corporations or other entities, the application should
include its principal place of business, the state of incorporation or
organization, and the name and telephone number of the appropriate
person to contact regarding the application.
(d) A request to release funds should include the following
information, where known, concerning the transaction:
(1) The name of the financial institution in which the funds are
blocked;
(2) The amount blocked;
(3) The date of the blocking;
(4) The identity of the original remitter of the funds and any
intermediary financial institutions;
(5) The intended beneficiary of the blocked transfer;
(6) A description of the underlying transaction including copies of
related documents (e.g., invoices, bills of lading, promissory notes,
etc.);
[[Page 42]]
(7) The nature of the applicant's interest in the funds; and
(8) A statement of the reasons why the applicant believes the funds
were blocked due to mistaken identity.
(e) Upon receipt of the materials required by paragraph (d) of this
section, OFAC may request additional material from the applicant
concerning the transaction pursuant to Sec. 501.602.
(f) Following review of all applicable submissions, the Director of
the Office of Foreign Assets Control will determine whether to release
the funds. In the event the Director determines that the funds should be
released, the Office of Foreign Assets Control will direct the financial
institution to return the funds to the appropriate party.
(g) For purposes of this section, the term ``financial institution''
shall include a banking institution, depository institution or United
States depository institution, domestic bank, financial institution or
U.S. financial institution, as those terms are defined in the applicable
part of this chapter.
[62 FR 45101, Aug. 25, 1997, as amended at 62 FR 52495, Oct. 8, 1997]
Sec. 501.807 Procedures governing delisting from the Specially
Designated Nationals and Blocked Persons List.
A person may seek administrative reconsideration of his, her or its
designation or that of a vessel as blocked, or assert that the
circumstances resulting in the designation no longer apply, and thus
seek to have the designation rescinded pursuant to the following
administrative procedures:
(a) A person blocked under the provisions of any part of this
chapter, including a specially designated national, specially designated
terrorist, or specially designated narcotics trafficker
(collectively,``a blocked person''), or a person owning a majority
interest in a blocked vessel may submit arguments or evidence that the
person believes establishes that insufficient basis exists for the
designation. The blocked person also may propose remedial steps on the
person's part, such as corporate reorganization, resignation of persons
from positions in a blocked entity, or similar steps, which the person
believes would negate the basis for designation. A person owning a
majority interest in a blocked vessel may propose the sale of the
vessel, with the proceeds to be placed into a blocked interest-bearing
account after deducting the costs incurred while the vessel was blocked
and the costs of the sale. This submission must be made in writing and
addressed to the Director, Office of Foreign Assets Control, U.S.
Department of the Treasury, 1500 Pennsylvania Avenue, NW.--Annex,
Washington, DC 20220.
(b) The information submitted by the blocked person seeking
unblocking or by a person seeking the unblocking of a vessel will be
reviewed by the Office of Foreign Assets Control, which may request
clarifying, corroborating, or other additional information.
(c) A blocked person seeking unblocking or a person seeking the
unblocking of a vessel may request a meeting with the Office of Foreign
Assets Control; however, such meetings are not required, and the office
may, at its discretion, decline to conduct such meetings prior to
completing a review pursuant to this section.
(d) After the Office of Foreign Assets Control has conducted a
review of the request for reconsideration, it will provide a written
decision to the blocked person or person seeking the unblocking of a
vessel.
[64 FR 5614, Feb. 4, 1999]
Sec. 501.808 License application and other procedures applicable
to economic sanctions programs.
Upon submission to the Office of Management and Budget of an
amendment to the overall burden hours for the information collections
imposed under this part, the license application and other procedures
set forth in this subpart are applicable to economic sanctions programs
for which implementation and administration have been delegated to the
Office of Foreign Assets Control.
Subpart F_Paperwork Reduction Act
Source: 62 FR 45101, Aug. 25, 1997, unless otherwise noted.
Redesignated at 68 FR 53642, Sept. 11, 2003.
[[Page 43]]
Sec. 501.901 Paperwork Reduction Act notice.
The information collection requirements in subparts C and D have
been approved by the Office of Management and Budget (``OMB'') under the
Paperwork Reduction Act (44 U.S.C. 3507(j)) and assigned control number
1505-0164. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays a
valid control number assigned by OMB.
Sec. Appendix A to Part 501--Economic Sanctions Enforcement Guidelines.
Note: This appendix provides a general framework for the enforcement
of all economic sanctions programs administered by the Office of Foreign
Assets Control (OFAC).
I. Definitions
A. Apparent violation means conduct that constitutes an actual or
possible violation of U.S. economic sanctions laws, including the
International Emergency Economic Powers Act (IEEPA), the Trading With
the Enemy Act (TWEA), the Foreign Narcotics Kingpin Designation Act, and
other statutes administered or enforced by OFAC, as well as Executive
orders, regulations, orders, directives, or licenses issued pursuant
thereto.
B. Applicable schedule amount means:
1. $1,000 with respect to a transaction valued at less than $1,000;
2. $10,000 with respect to a transaction valued at $1,000 or more
but less than $10,000;
3. $25,000 with respect to a transaction valued at $10,000 or more
but less than $25,000;
4. $50,000 with respect to a transaction valued at $25,000 or more
but less than $50,000;
5. $100,000 with respect to a transaction valued at $50,000 or more
but less than $100,000;
6. $170,000 with respect to a transaction valued at $100,000 or more
but less than $170,000;
7. $250,000 with respect to a transaction valued at $170,000 or
more, except that where the applicable schedule amount as defined above
exceeds the statutory maximum civil penalty amount applicable to an
apparent violation, the applicable schedule amount shall equal such
applicable statutory maximum civil penalty amount.
C. OFAC means the Department of the Treasury's Office of Foreign
Assets Control.
D. Penalty is the final civil penalty amount imposed in a Penalty
Notice.
E. Proposed penalty is the civil penalty amount set forth in a Pre-
Penalty Notice.
F. Regulator means any Federal, State, local or foreign official or
agency that has authority to license or examine an entity for compliance
with federal, state, or foreign law.
G. Subject Person means an individual or entity subject to any of
the sanctions programs administered or enforced by OFAC.
H. Transaction value means the dollar value of a subject
transaction. In export and import cases, the transaction value generally
will be the domestic value in the United States of the goods,
technology, or services sought to be exported from or imported into the
United States, as demonstrated by commercial invoices, bills of lading,
signed Customs declarations, or similar documents. In cases involving
seizures by U.S. Customs and Border Protection (CBP), the transaction
value generally will be the domestic value as determined by CBP. If the
apparent violation at issue is a prohibited dealing in blocked property
by a Subject Person, the transaction value generally will be the dollar
value of the underlying transaction involved, such as the value of the
property dealt in or the amount of the funds transfer that a financial
institution failed to block or reject. Where the transaction value is
not otherwise ascertainable, OFAC may consider the market value of the
goods or services that were the subject of the transaction, the economic
benefit conferred on the sanctioned party, and/or the economic benefit
derived by the Subject Person from the transaction, in determining
transaction value. For purposes of these Guidelines, ``transaction
value'' will not necessarily have the same meaning, nor be applied in
the same manner, as that term is used for import valuation purposes at
19 CFR 152.103.
I. Voluntary self-disclosure means self-initiated notification to
OFAC of an apparent violation by a Subject Person that has committed, or
otherwise participated in, an apparent violation of a statute, Executive
order, or regulation administered or enforced by OFAC, prior to or at
the same time that OFAC, or any other federal, state, or local
government agency or official, discovers the apparent violation or
another substantially similar apparent violation. For these purposes,
``substantially similar apparent violation'' means an apparent violation
that is part of a series of similar apparent violations or is related to
the same pattern or practice of conduct. Notification of an apparent
violation to another government agency (but not to OFAC) by a Subject
Person, which is considered a voluntary self-disclosure by that agency,
may be considered a voluntary self-disclosure by OFAC, based on a case-
by-case assessment. Notification to OFAC of an apparent violation is not
a voluntary self-disclosure if: a third party is required to and does
notify OFAC of the apparent violation or a substantially similar
apparent violation because a transaction was blocked or rejected by that
third party (regardless of when OFAC receives such notice from the
[[Page 44]]
third party and regardless of whether the Subject Person was aware of
the third party's disclosure); the disclosure includes false or
misleading information; the disclosure (when considered along with
supplemental information provided by the Subject Person) is materially
incomplete; the disclosure is not self-initiated (including when the
disclosure results from a suggestion or order of a federal or state
agency or official); or, when the Subject Person is an entity, the
disclosure is made by an individual in a Subject Person entity without
the authorization of the entity's senior management. Responding to an
administrative subpoena or other inquiry from, or filing a license
application with, OFAC is not a voluntary self-disclosure. In addition
to notification, a voluntary self-disclosure must include, or be
followed within a reasonable period of time by, a report of sufficient
detail to afford a complete understanding of an apparent violation's
circumstances, and should also be followed by responsiveness to any
follow-up inquiries by OFAC. (As discussed further below, a Subject
Person's level of cooperation with OFAC is an important factor in
determining the appropriate enforcement response to an apparent
violation even in the absence of a voluntary self-disclosure as defined
herein; disclosure by a Subject Person generally will result in
mitigation insofar as it represents cooperation with OFAC's
investigation.)
II. Types of Responses to Apparent Violations
Depending on the facts and circumstances of a particular case, an
OFAC investigation may lead to one or more of the following actions:
A. No Action. If OFAC determines that there is insufficient evidence
to conclude that a violation has occurred and/or, based on an analysis
of the General Factors outlined in Section III of these Guidelines,
concludes that the conduct does not rise to a level warranting an
administrative response, then no action will be taken. In those cases in
which OFAC is aware that the Subject Person has knowledge of OFAC's
investigation, OFAC generally will issue a letter to the Subject Person
indicating that the investigation is being closed with no administrative
action being taken. A no-action determination represents a final
determination as to the apparent violation, unless OFAC later learns of
additional related violations or other relevant facts.
B. Request Additional Information. If OFAC determines that
additional information regarding the apparent violation is needed, it
may request further information from the Subject Person or third
parties, including through an administrative subpoena issued pursuant to
31 CFR 501.602. In the case of an institution subject to regulation
where OFAC has entered into a Memorandum of Understanding (MOU) with the
Subject Person's regulator, OFAC will follow the procedures set forth in
such MOU regarding consultation with the regulator. Even in the absence
of an MOU, OFAC may seek relevant information about a regulated
institution and/or the conduct constituting the apparent violation from
the institution's federal, state, or foreign regulator. Upon receipt of
information determined to be sufficient to assess the apparent
violation, OFAC will decide, based on an analysis of the General Factors
outlined in Section III of these Guidelines, whether to pursue further
enforcement action or whether some other response to the apparent
violation is appropriate.
C. Cautionary Letter: If OFAC determines that there is insufficient
evidence to conclude that a violation has occurred or that a Finding of
Violation or a civil monetary penalty is not warranted under the
circumstances, but believes that the underlying conduct could lead to a
violation in other circumstances and/or that a Subject Person does not
appear to be exercising due diligence in assuring compliance with the
statutes, Executive orders, and regulations that OFAC enforces, OFAC may
issue a cautionary letter, which may convey OFAC's concerns about the
underlying conduct and/or the Subject Person's OFAC compliance policies,
practices and/or procedures. A cautionary letter represents a final
enforcement response to the apparent violation, unless OFAC later learns
of additional related violations or other relevant facts, but does not
constitute a final agency determination as to whether a violation has
occurred.
D. Finding of Violation: If OFAC determines that a violation has
occurred and considers it important to document the occurrence of a
violation and, based on an analysis of the General Factors outlined in
Section III of these Guidelines, concludes that the Subject Person's
conduct warrants an administrative response but that a civil monetary
penalty is not the most appropriate response, OFAC may issue a Finding
of Violation that identifies the violation. A Finding of Violation may
also convey OFAC's concerns about the violation and/or the Subject
Person's OFAC compliance policies, practices and/or procedures, and/or
identify the need for further compliance steps to be taken. A Finding of
Violation represents a final enforcement response to the violation,
unless OFAC later learns of additional related violations or other
relevant facts, and constitutes a final agency determination that a
violation has occurred. A Finding of Violation will afford the Subject
Person an opportunity to respond to OFAC's determination that a
violation has occurred before that determination becomes final. In the
event a Subject Person so responds, the initial Finding of Violation
[[Page 45]]
will not constitute a final agency determination that a violation has
occurred. In such cases, after considering the response received, OFAC
will inform the Subject Person of its final enforcement response to the
apparent violation.
E. Civil Monetary Penalty. If OFAC determines that a violation has
occurred and, based on an analysis of the General Factors outlined in
Section III of these Guidelines, concludes that the Subject Person's
conduct warrants the imposition of a monetary penalty, OFAC may impose a
civil monetary penalty. Civil monetary penalty amounts will be
determined as discussed in Section V of these Guidelines. The imposition
of a civil monetary penalty constitutes a final agency determination
that a violation has occurred and represents a final civil enforcement
response to the violation. OFAC will afford the Subject Person an
opportunity to respond to OFAC's determination that a violation has
occurred before a final penalty is imposed.
F. Criminal Referral. In appropriate circumstances, OFAC may refer
the matter to appropriate law enforcement agencies for criminal
investigation and/or prosecution. Apparent sanctions violations that
OFAC has referred for criminal investigation and/or prosecution also may
be subject to OFAC civil penalty or other administrative action.
G. Other Administrative Actions. In addition to or in lieu of other
administrative actions, OFAC may also take the following administrative
actions in response to an apparent violation:
1. License Denial, Suspension, Modification, or Revocation. OFAC
authorizations to engage in a transaction (including the release of
blocked funds) pursuant to a general or specific license may be
withheld, denied, suspended, modified, or revoked in response to an
apparent violation.
2. Cease and Desist Order. OFAC may order the Subject Person to
cease and desist from conduct that is prohibited by any of the sanctions
programs enforced by OFAC when OFAC has reason to believe that a Subject
Person has engaged in such conduct and/or that such conduct is ongoing
or may recur.
III. General Factors Affecting Administrative Action
As a general matter, OFAC will consider some or all of the following
General Factors in determining the appropriate administrative action in
response to an apparent violation of U.S. sanctions by a Subject Person,
and, where a civil monetary penalty is imposed, in determining the
appropriate amount of any such penalty:
A. Willful or Reckless Violation of Law: a Subject Person's
willfulness or recklessness in violating, attempting to violate,
conspiring to violate, or causing a violation of the law. Generally, to
the extent the conduct at issue is the result of willful conduct or a
deliberate intent to violate, attempt to violate, conspire to violate,
or cause a violation of the law, the OFAC enforcement response will be
stronger. Among the factors OFAC may consider in evaluating willfulness
or recklessness are:
1. Willfulness. Was the conduct at issue the result of a decision to
take action with the knowledge that such action would constitute a
violation of U.S. law? Did the Subject Person know that the underlying
conduct constituted, or likely constituted, a violation of U.S. law at
the time of the conduct?
2. Recklessness. Did the Subject Person demonstrate reckless
disregard for U.S. sanctions requirements or otherwise fail to exercise
a minimal degree of caution or care in avoiding conduct that led to the
apparent violation? Were there warning signs that should have alerted
the Subject Person that an action or failure to act would lead to an
apparent violation?
3. Concealment. Was there an effort by the Subject Person to hide or
purposely obfuscate its conduct in order to mislead OFAC, Federal,
State, or foreign regulators, or other parties involved in the conduct
about an apparent violation?
4. Pattern of Conduct. Did the apparent violation constitute or
result from a pattern or practice of conduct or was it relatively
isolated and atypical in nature?
5. Prior Notice. Was the Subject Person on notice, or should it
reasonably have been on notice, that the conduct at issue, or similar
conduct, constituted a violation of U.S. law?
6. Management Involvement. In cases of entities, at what level
within the organization did the willful or reckless conduct occur? Were
supervisory or managerial level staff aware, or should they reasonably
have been aware, of the willful or reckless conduct?
B. Awareness of Conduct at Issue: the Subject Person's awareness of
the conduct giving rise to the apparent violation. Generally, the
greater a Subject Person's actual knowledge of, or reason to know about,
the conduct constituting an apparent violation, the stronger the OFAC
enforcement response will be. In the case of a corporation, awareness
will focus on supervisory or managerial level staff in the business unit
at issue, as well as other senior officers and managers. Among the
factors OFAC may consider in evaluating the Subject Person's awareness
of the conduct at issue are:
1. Actual Knowledge. Did the Subject Person have actual knowledge
that the conduct giving rise to an apparent violation took place? Was
the conduct part of a business process, structure or arrangement that
was designed or implemented with the intent to prevent or shield the
Subject Person from having such actual knowledge, or was the conduct
part of a business process, structure or arrangement implemented for
other legitimate reasons that made it difficult or
[[Page 46]]
impossible for the Subject Person to have actual knowledge?
2. Reason to Know. If the Subject Person did not have actual
knowledge that the conduct took place, did the Subject Person have
reason to know, or should the Subject Person reasonably have known,
based on all readily available information and with the exercise of
reasonable due diligence, that the conduct would or might take place?
3. Management Involvement. In the case of an entity, was the conduct
undertaken with the explicit or implicit knowledge of senior management,
or was the conduct undertaken by personnel outside the knowledge of
senior management? If the apparent violation was undertaken without the
knowledge of senior management, was there oversight intended to detect
and prevent violations, or did the lack of knowledge by senior
management result from disregard for its responsibility to comply with
applicable sanctions laws?
C. Harm to Sanctions Program Objectives: the actual or potential
harm to sanctions program objectives caused by the conduct giving rise
to the apparent violation. Among the factors OFAC may consider in
evaluating the harm to sanctions program objectives are:
1. Economic or Other Benefit to the Sanctioned Individual, Entity,
or Country: the economic or other benefit conferred or attempted to be
conferred to sanctioned individuals, entities, or countries as a result
of an apparent violation, including the number, size, and impact of the
transactions constituting an apparent violation(s), the length of time
over which they occurred, and the nature of the economic or other
benefit conferred. OFAC may also consider the causal link between the
Subject Person's conduct and the economic benefit conferred or attempted
to be conferred.
2. Implications for U.S. Policy: the effect that the circumstances
of the apparent violation had on the integrity of the U.S. sanctions
program and the related policy objectives involved.
3. License Eligibility: whether the conduct constituting the
apparent violation likely would have been licensed by OFAC under
existing licensing policy.
4. Humanitarian activity: whether the conduct at issue was in
support of a humanitarian activity.
D. Individual Characteristics: the particular circumstances and
characteristics of a Subject Person. Among the factors OFAC may consider
in evaluating individual characteristics are:
1. Commercial Sophistication: the commercial sophistication and
experience of the Subject Person. Is the Subject Person an individual or
an entity? If an individual, was the conduct constituting the apparent
violation for personal or business reasons?
2. Size of Operations and Financial Condition: the size of a Subject
Person's business operations and overall financial condition, where such
information is available and relevant. Qualification of the Subject
Person as a small business or organization for the purposes of the Small
Business Regulatory Enforcement Fairness Act, as determined by reference
to the applicable regulations of the Small Business Administration, may
also be considered.
3. Volume of Transactions: the total volume of transactions
undertaken by the Subject Person on an annual basis, with attention
given to the apparent violations as compared with the total volume.
4. Sanctions History: the Subject Person's sanctions history,
including OFAC's issuance of prior penalties, findings of violations or
cautionary, warning or evaluative letters, or other administrative
actions (including settlements). As a general matter, OFAC will only
consider a Subject Person's sanctions history for the five years
preceding the date of the transaction giving rise to the apparent
violation.
E. Compliance Program: the existence, nature and adequacy of a
Subject Person's risk-based OFAC compliance program at the time of the
apparent violation, where relevant. In the case of an institution
subject to regulation where OFAC has entered into a Memorandum of
Understanding (MOU) with the Subject Person's regulator, OFAC will
follow the procedures set forth in such MOU regarding consultation with
the regulator with regard to the quality and effectiveness of the
Subject Person's compliance program. Even in the absence of an MOU, OFAC
may take into consideration the views of federal, state, or foreign
regulators, where relevant. Further information about risk-based
compliance programs for financial institutions is set forth in the annex
hereto.
F. Remedial Response: the Subject Person's corrective action taken
in response to the apparent violation. Among the factors OFAC may
consider in evaluating the remedial response are:
1. The steps taken by the Subject Person upon learning of the
apparent violation. Did the Subject Person immediately stop the conduct
at issue?
2. In the case of an entity, the processes followed to resolve
issues related to the apparent violation. Did the Subject Person
discover necessary information to ascertain the causes and extent of the
apparent violation, fully and expeditiously? Was senior management fully
informed? If so, when?
3. In the case of an entity, whether the Subject Person adopted new
and more effective internal controls and procedures to prevent a
recurrence of the apparent violation. If the Subject Person did not have
an OFAC compliance program in place at the time of the apparent
violation, did it implement one
[[Page 47]]
upon discovery of the apparent violations? If it did have an OFAC
compliance program, did it take appropriate steps to enhance the program
to prevent the recurrence of similar violations? Did the entity provide
the individual(s) responsible for the apparent violation with additional
training, and/or take other appropriate action, to ensure that similar
violations do not occur in the future?
4. Where applicable, whether the Subject Person undertook a thorough
review to identify other possible violations.
G. Cooperation with OFAC: the nature and extent of the Subject
Person's cooperation with OFAC. Among the factors OFAC may consider in
evaluating cooperation with OFAC are:
1. Did the Subject Person voluntarily self-disclose the apparent
violation to OFAC?
2. Did the Subject Person provide OFAC with all relevant information
regarding an apparent violation (whether or not voluntarily self-
disclosed)?
3. Did the Subject Person research and disclose to OFAC relevant
information regarding any other apparent violations caused by the same
course of conduct?
4. Was information provided voluntarily or in response to an
administrative subpoena?
5. Did the Subject Person cooperate with, and promptly respond to,
all requests for information?
6. Did the Subject Person enter into a statute of limitations
tolling agreement, if requested by OFAC (particularly in situations
where the apparent violations were not immediately notified to or
discovered by OFAC, in particularly complex cases, and in cases in which
the Subject Person has requested and received additional time to respond
to a request for information from OFAC)? If so, the Subject Person's
entering into a tolling agreement will be deemed a mitigating factor.
Note: A Subject Person's refusal to enter into a tolling agreement
will not be considered by OFAC as an aggravating factor in assessing a
Subject Person's cooperation or otherwise under the Guidelines.
Where appropriate, OFAC will publicly note substantial cooperation
provided by a Subject Person.
H. Timing of apparent violation in relation to imposition of
sanctions: the timing of the apparent violation in relation to the
adoption of the applicable prohibitions, particularly if the apparent
violation took place immediately after relevant changes in the sanctions
program regulations or the addition of a new name to OFAC's List of
Specially Designated Nationals and Blocked Persons (SDN List).
I. Other enforcement action: other enforcement actions taken by
federal, state, or local agencies against the Subject Person for the
apparent violation or similar apparent violations, including whether the
settlement of alleged violations of OFAC regulations is part of a
comprehensive settlement with other federal, state, or local agencies.
J. Future Compliance/Deterrence Effect: the impact administrative
action may have on promoting future compliance with U.S. economic
sanctions by the Subject Person and similar Subject Persons,
particularly those in the same industry sector.
K. Other relevant factors on a case-by-case basis: such other
factors that OFAC deems relevant on a case-by-case basis in determining
the appropriate enforcement response and/or the amount of any civil
monetary penalty. OFAC will consider the totality of the circumstances
to ensure that its enforcement response is proportionate to the nature
of the violation.
IV. Civil Penalties for Failure To Comply With a Requirement To Furnish
Information or Keep Records
As a general matter, the following civil penalty amounts shall apply
to a Subject Person's failure to comply with a requirement to furnish
information or maintain records:
A. The failure to comply with a requirement to furnish information
pursuant to 31 CFR 501.602 may result in a penalty in an amount up to
$20,000, irrespective of whether any other violation is alleged. Where
OFAC has reason to believe that the apparent violation(s) that is the
subject of the requirement to furnish information involves a
transaction(s) valued at greater than $500,000, a failure to comply with
a requirement to furnish information may result in a penalty in an
amount up to $50,000, irrespective of whether any other violation is
alleged. A failure to comply with a requirement to furnish information
may be considered a continuing violation, and the penalties described
above may be imposed each month that a party has continued to fail to
comply with the requirement to furnish information. OFAC may also seek
to have a requirement to furnish information judicially enforced.
Imposition of a civil monetary penalty for failure to comply with a
requirement to furnish information does not preclude OFAC from seeking
such judicial enforcement of the requirement to furnish information.
B. The late filing of a required report, whether set forth in
regulations or in a specific license, may result in a civil monetary
penalty in an amount up to $2,500, if filed within the first 30 days
after the report is due, and a penalty in an amount up to $5,000 if
filed more than 30 days after the report is due. If the report relates
to blocked assets, the penalty may include an additional $1,000 for
every 30 days that the report is overdue, up to five years.
[[Page 48]]
C. The failure to maintain records in conformance with the
requirements of OFAC's regulations or of a specific license may result
in a penalty in an amount up to $50,000.
V. Civil Penalties
OFAC will review the facts and circumstances surrounding an apparent
violation and apply the General Factors for Taking Administrative Action
in Section III above in determining whether to initiate a civil penalty
proceeding and in determining the amount of any civil monetary penalty.
OFAC will give careful consideration to the appropriateness of issuing a
cautionary letter or Finding of Violation in lieu of the imposition of a
civil monetary penalty.
A. Civil Penalty Process
1. Pre-Penalty Notice. If OFAC has reason to believe that a
sanctions violation has occurred and believes that a civil monetary
penalty is appropriate, it will issue a Pre-Penalty Notice in accordance
with the procedures set forth in the particular regulations governing
the conduct giving rise to the apparent violation. The amount of the
proposed penalty set forth in the Pre-Penalty Notice will reflect OFAC's
preliminary assessment of the appropriate penalty amount, based on
information then in OFAC's possession. The amount of the final penalty
may change as OFAC learns additional relevant information. If, after
issuance of a Pre-Penalty Notice, OFAC determines that a penalty in an
amount that represents an increase of more than 10 percent from the
proposed penalty set forth in the Pre-Penalty Notice is appropriate, or
if OFAC intends to allege additional violations, it will issue a revised
Pre-Penalty Notice setting forth the new proposed penalty amount and/or
alleged violations.
a. In general, the Pre-Penalty Notice will set forth the following
with respect to the specific violations alleged and the proposed
penalties:
i. Description of the alleged violations, including the number of
violations and their value, for which a penalty is being proposed;
ii. Identification of the regulatory or other provisions alleged to
have been violated;
iii. Identification of the base category (defined below) according
to which the proposed penalty amount was calculated and the General
Factors that were most relevant to the determination of the proposed
penalty amount;
iv. The maximum amount of the penalty to which the Subject Person
could be subject under applicable law; and
v. The proposed penalty amount, determined in accordance with the
provisions set forth in these Guidelines.
b. The Pre-Penalty Notice will also include information regarding
how to respond to the Pre-Penalty Notice including:
i. A statement that the Subject Person may submit a written response
to the Pre-Penalty Notice by a date certain addressing the alleged
violation(s), the General Factors Affecting Administrative Action set
forth in Section III of these Guidelines, and any other information or
evidence that the Subject Person deems relevant to OFAC's consideration.
ii. A statement that a failure to respond to the Pre-Penalty Notice
may result in the imposition of a civil monetary penalty.
2. Response to Pre-Penalty Notice. A Subject Person may submit a
written response to the Pre-Penalty Notice in accordance with the
procedures set forth in the particular regulations governing the conduct
giving rise to the apparent violation. Generally, the response should
either agree to the proposed penalty set forth in the Pre-Penalty Notice
or set forth reasons why a penalty should not be imposed or, if imposed,
why it should be a lesser amount than proposed, with particular
attention paid to the General Factors Affecting Administrative Action
set forth in Section III of these Guidelines. The response should
include all documentary or other evidence available to the Subject
Person that supports the arguments set forth in the response. OFAC will
consider all relevant materials submitted.
3. Penalty Notice. If OFAC receives no response to a Pre-Penalty
Notice within the time prescribed in the Pre-Penalty Notice, or if
following the receipt of a response to a Pre-Penalty Notice and a review
of the information and evidence contained therein OFAC concludes that a
civil monetary penalty is warranted, a Penalty Notice generally will be
issued in accordance with the procedures set forth in the particular
regulations governing the conduct giving rise to the violation. A
Penalty Notice constitutes a final agency determination that a violation
has occurred. The penalty amount set forth in the Penalty Notice will
take into account relevant additional information provided in response
to a Pre-Penalty Notice. In the absence of a response to a Pre-Penalty
Notice, the penalty amount set forth in the Penalty Notice will
generally be the same as the proposed penalty set forth in the Pre-
Penalty Notice.
4. Referral to Financial Management Division. The imposition of a
civil monetary penalty pursuant to a Penalty Notice creates a debt due
the U.S. Government. OFAC will advise Treasury's Financial Management
Division upon the imposition of a penalty. The Financial Management
Division may take follow-up action to collect the penalty assessed if it
is not paid within the prescribed time period set forth in the Penalty
Notice.
[[Page 49]]
In addition or instead, the matter may be referred to the U.S.
Department of Justice for appropriate action to recover the penalty.
5. Final Agency Action. The issuance of a Penalty Notice constitutes
final agency action with respect to the violation(s) for which the
penalty is assessed.
B. Amount of Civil Penalty
1. Egregious case. In those cases in which a civil monetary penalty
is deemed appropriate, OFAC will make a determination as to whether a
case is deemed ``egregious'' for purposes of the base penalty
calculation. This determination will be based on an analysis of the
applicable General Factors. In making the egregiousness determination,
OFAC generally will give substantial weight to General Factors A
(``willful or reckless violation of law''), B (``awareness of conduct at
issue''), C (``harm to sanctions program objectives'') and D
(``individual characteristics''), with particular emphasis on General
Factors A and B. A case will be considered an ``egregious case'' where
the analysis of the applicable General Factors, with a focus on those
General Factors identified above, indicates that the case represents a
particularly serious violation of the law calling for a strong
enforcement response. A determination that a case is ``egregious'' will
be made by the Director or Deputy Director.
2. Pre-Penalty Notice. The penalty amount proposed in a Pre-Penalty
Notice shall generally be calculated as follows, except that neither the
base amount nor the proposed penalty will exceed the applicable
statutory maximum amount: \6\
---------------------------------------------------------------------------
\6\ For apparent violations identified in the Cuba Penalty Schedule,
68 Fed. Reg. 4429 (Jan. 29, 2003), for which a civil monetary penalty
has been deemed appropriate, the base penalty amount shall equal the
amount set forth in the Schedule for such violation, except that the
base penalty amount shall be reduced by 50% in cases of voluntary self-
disclosure.
---------------------------------------------------------------------------
a. Base Category Calculation
i. In a non-egregious case, if the apparent violation is disclosed
through a voluntary self-disclosure by the Subject Person, the base
amount of the proposed civil penalty in the Pre-Penalty Notice shall be
one-half of the transaction value, capped at a maximum base amount of
$144,619 per violation, except where the statutory maximum penalty
applicable to the apparent violation is less than $289,238, in which
case the base amount of the proposed civil penalty in the Pre-Penalty
Notice shall be capped at one-half the statutory maximum penalty
applicable to the apparent violation.
ii. In a non-egregious case, if the apparent violation comes to
OFAC's attention by means other than a voluntary self-disclosure, the
base amount of the proposed civil penalty in the Pre-Penalty Notice
shall be the ``applicable schedule amount,'' as defined above. For
apparent violations where the statutory maximum penalty applicable to
the apparent violation is $289,238 or greater, the maximum base amount
shall be capped at $289,238. For apparent violations where the statutory
maximum penalty applicable to the apparent violation is less than
$289,238, the maximum base amount shall be capped at the statutory
maximum penalty amount applicable to the apparent violation.
iii. In an egregious case, if the apparent violation is disclosed
through a voluntary self-disclosure by a Subject Person, the base amount
of the proposed civil penalty in the Pre-Penalty Notice shall be one-
half of the applicable statutory maximum penalty applicable to the
violation.
iv. In an egregious case, if the apparent violation comes to OFAC's
attention by means other than a voluntary self-disclosure, the base
amount of the proposed civil penalty in the Pre-Penalty Notice shall be
the applicable statutory maximum penalty amount applicable to the
violation.
Note to paragraph (a): As of January 15, 2017, the applicable
statutory maximum civil penalty per violation for each statute enforced
by OFAC is as follows: International Emergency Economic Powers Act
(IEEPA)--greater of $289,238 or twice the amount of the underlying
transaction; Trading with the Enemy Act (TWEA)--$85,236; Foreign
Narcotics Kingpin Designation Act (FNKDA)--$1,437,153; Antiterrorism and
Effective Death Penalty Act of 1996 (AEDPA)--greater of $76,351 or twice
the amount of which a financial institution was required to retain
possession or control; and Clean Diamond Trade Act (CDTA)--$13,066. The
civil penalty amounts authorized under these statutes are subject to
adjustment pursuant to the Federal Civil Penalties Inflation Adjustment
Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 note).
The following matrix represents the base amount of the proposed
civil penalty for each category of violation:
[[Page 50]]
[GRAPHIC] [TIFF OMITTED] TR10FE17.002
b. Adjustment for Applicable Relevant General Factors
The base amount of the proposed civil penalty may be adjusted to
reflect applicable General Factors for Administrative Action set forth
in Section III of these Guidelines. Each factor may be considered
mitigating or aggravating, resulting in a lower or higher proposed
penalty amount. As a general matter, in those cases where the following
General Factors are present, OFAC will adjust the base proposed penalty
amount in the following manner:
i. In cases involving substantial cooperation with OFAC but no
voluntary self-disclosure as defined herein, including cases in which an
apparent violation is reported to OFAC by a third party but the Subject
Person provides substantial additional information regarding the
apparent violation and/or other related violations, the base penalty
amount generally will be reduced between 25 and 40 percent. Substantial
cooperation in cases involving voluntary self-disclosure may also be
considered as a further mitigating factor.
ii. In cases involving a Subject Person's first violation, the base
penalty amount generally will be reduced up to 25 percent. An apparent
violation generally will be considered a ``first violation'' if the
Subject Person has not received a penalty notice or Finding of Violation
from OFAC in the five years preceding the date of the transaction giving
rise to the apparent violation. A group of substantially similar
apparent violations addressed in a single Pre-Penalty Notice shall be
considered as a single violation for purposes of this subsection. In
those cases where a prior penalty notice or Finding of Violation within
the preceding five years involved conduct of a substantially different
nature from the apparent violation at issue, OFAC may consider the
apparent violation at issue a ``first violation.'' In determining the
extent of any mitigation for a first violation, OFAC may consider any
prior OFAC enforcement action taken with respect to the Subject Person,
including any cautionary, warning or evaluative letters issued, or any
civil monetary settlements entered into with OFAC.
In all cases, the proposed penalty amount will not exceed the
applicable statutory maximum.
In cases involving a large number of apparent violations, where the
transaction value of all apparent violations is either unknown or would
require a disproportionate allocation of resources to determine, OFAC
may estimate or extrapolate the transaction value of the total universe
of apparent violations in determining the amount of any proposed civil
monetary penalty.
[[Page 51]]
3. Penalty Notice. The amount of the proposed civil penalty in the
Pre-Penalty Notice will be the presumptive starting point for
calculation of the civil penalty amount in the Penalty Notice. OFAC may
adjust the penalty amount in the Penalty Notice based on:
a. Evidence presented by the Subject Person in response to the Pre-
Penalty Notice, or otherwise received by OFAC with respect to the
underlying violation(s); and/or
b. Any modification resulting from further review and
reconsideration by OFAC of the proposed civil monetary penalty in light
of the General Factors for Administrative Action set forth in Section
III above.
In no event will the amount of the civil monetary penalty in the
Penalty Notice exceed the proposed penalty set forth in the Pre-Penalty
Notice by more than 10 percent, or include additional alleged
violations, unless a revised Pre-Penalty Notice has first been sent to
the Subject Person as set forth above. In the event that OFAC determines
upon further review that no penalty is appropriate, it will so inform
the Subject Person in a no-action letter, a cautionary letter, or a
Finding of Violation.
C. Settlements
A settlement does not constitute a final agency determination that a
violation has occurred.
1. Settlement Process. Settlement discussions may be initiated by
OFAC, the Subject Person or the Subject Person's authorized
representative. Settlements generally will be negotiated in accordance
with the principles set forth in these Guidelines with respect to
appropriate penalty amounts. OFAC may condition the entry into or
continuation of settlement negotiations on the execution of a tolling
agreement with respect to the statute of limitations.
2. Settlement Prior to Issuance of Pre-Penalty Notice. Where
settlement discussions occur prior to the issuance of a Pre-Penalty
Notice, the Subject Person may request in writing that OFAC withhold
issuance of a Pre-Penalty Notice pending the conclusion of settlement
discussions. OFAC will generally agree to such a request as long as
settlement discussions are continuing in good faith and the statute of
limitations is not at risk of expiring.
3. Settlement Following Issuance of Pre-Penalty Notice. If a matter
is settled after a Pre-Penalty Notice has been issued, but before a
final Penalty Notice is issued, OFAC will not make a final determination
as to whether a sanctions violation has occurred. In the event no
settlement is reached, the period specified for written response to the
Pre-Penalty Notice remains in effect unless additional time is granted
by OFAC.
4. Settlements of Multiple Apparent Violations. A settlement
initiated for one apparent violation may also involve a comprehensive or
global settlement of multiple apparent violations covered by other Pre-
Penalty Notices, apparent violations for which a Pre-Penalty Notice has
not yet been issued by OFAC, or previously unknown apparent violations
reported to OFAC during the pendency of an investigation of an apparent
violation.
Annex
The following matrix can be used by financial institutions to
evaluate their compliance programs:
OFAC Risk Matrix
------------------------------------------------------------------------
Low Moderate High
------------------------------------------------------------------------
Stable, well-known customer base Customer base A large,
in a localized environment. changing due to fluctuating
branching, client base in an
merger, or international
acquisition in environment.
the domestic
market.
Few high-risk customers; these A moderate number A large number of
may include nonresident aliens, of high-risk high-risk
foreign customers (including customers. customers.
accounts with U.S. powers of
attorney), and foreign
commercial customers.
No overseas branches and no Overseas branches Overseas branches
correspondent accounts with or correspondent or multiple
foreign banks. accounts with correspondent
foreign banks. accounts with
foreign banks.
No electronic services (e.g., e- The institution The institution
banking) offered, or products offers limited offers a wide
available are purely electronic (e.g., array of
informational or non- e-banking) electronic (e.g.,
transactional. products and e-banking)
services. products and
services (i.e.,
account
transfers, e-bill
payment, or
accounts opened
via the
Internet).
Limited number of funds A moderate number A high number of
transfers for customers and non- of funds customer and non-
customers, limited third-party transfers, mostly customer funds
transactions, and no for customers. transfers,
international funds transfers. Possibly, a few including
international international
funds transfers funds transfers.
from personal or
business accounts.
No other types of international Limited other A high number of
transactions, such as trade types of other types of
finance, cross-border ACH, and international international
management of sovereign debt. transactions. transactions.
[[Page 52]]
No history of OFAC actions. No A small number of Multiple recent
evidence of apparent violation recent actions actions by OFAC,
or circumstances that might (i.e., actions where the
lead to a violation. within the last institution has
five years) by not addressed the
OFAC, including issues, thus
notice letters, leading to an
or civil money increased risk of
penalties, with the institution
evidence that the undertaking
institution similar
addressed the violations in the
issues and is not future.
at risk of
similar
violations in the
future.
Management has fully assessed Management Management does
the institution's level of risk exhibits a not understand,
based on its customer base and reasonable or has chosen to
product lines. This understanding of ignore, key
understanding of risk and the key aspects aspects of OFAC
strong commitment to OFAC of OFAC compliance risk.
compliance is satisfactorily compliance and The importance of
communicated throughout the its commitment is compliance is not
organization. generally clear emphasized or
and communicated
satisfactorily throughout the
communicated organization.
throughout the
organization, but
it may lack a
program
appropriately
tailored to risk.
The board of directors, or board The board has The board has not
committee, has approved an OFAC approved an OFAC approved an OFAC
compliance program that compliance compliance
includes policies, procedures, program that program, or
controls, and information includes most of policies,
systems that are adequate, and the appropriate procedures,
consistent with the policies, controls, and
institution's OFAC risk profile. procedures, information
controls, and systems are
information significantly
systems necessary deficient.
to ensure
compliance, but
some weaknesses
are noted.
Staffing levels appear adequate Staffing levels Management has
to properly execute the OFAC appear generally failed to provide
compliance program. adequate, but appropriate
some deficiencies staffing levels
are noted. to handle
workload.
Authority and accountability for Authority and Authority and
OFAC compliance are clearly accountability accountability
defined and enforced, including are defined, but for compliance
the designation of a qualified some refinements have not been
OFAC officer. are needed. A clearly
qualified OFAC established. No
officer has been OFAC compliance
designated. officer, or an
unqualified one,
has been
appointed. The
role of the OFAC
officer is
unclear.
Training is appropriate and Training is Training is
effective based on the conducted and sporadic and does
institution's risk profile, management not cover
covers applicable personnel, provides adequate important
and provides necessary up-to- resources given regulatory and
date information and resources the risk profile risk areas or is
to ensure compliance. of the nonexistent.
organization;
however, some
areas are not
covered within
the training
program.
The institution employs strong The institution The institution
quality control methods. employs limited does not employ
quality control quality control
methods. methods.
------------------------------------------------------------------------
[74 FR 57601, Nov. 9, 2009, as amended at 81 FR 43073, July 1, 2016; 82
FR 10435, Feb. 10, 2017]
PART 510_NORTH KOREA SANCTIONS REGULATIONS--Table of Contents
Subpart A_Relation of This Part to Other Laws and Regulations
Sec.
510.101 Relation of this part to other laws and regulations.
Subpart B_Prohibitions
510.201 Prohibited transactions.
510.202 Effect of transfers violating the provisions of this part.
510.203 Holding of funds in interest-bearing accounts; investment and
reinvestment.
Subpart C_General Definitions
510.301 Blocked account; blocked property.
510.302 Effective date.
510.303 Entity.
510.304 Interest.
510.305 Licenses; general and specific.
510.306 Person.
510.307 Property; property interest.
510.308 Transfer.
510.309 United States.
510.310 U.S. financial institution.
510.311 United States person; U.S. person.
Subpart D_Interpretations
510.401 [Reserved]
510.402 Effect of amendment.
510.403 Termination and acquisition of an interest in blocked property.
510.404 Transactions ordinarily incident to a licensed transaction
authorized.
510.405 Setoffs prohibited.
510.406 Entities owned by a person whose property and interests in
property are blocked.
Subpart E_Licenses, Authorizations, and Statements of Licensing Policy
510.501 General and specific licensing procedures.
510.502 [Reserved]
[[Page 53]]
510.503 Exclusion from licenses.
510.504 Payments and transfers to blocked accounts in U.S. financial
institutions.
510.505 Entries in certain accounts for normal service charges
authorized.
510.506 Provision of certain legal services authorized.
510.507 Authorization of emergency medical services.
Subparts F-G [Reserved]
Subpart H_Procedures
510.801 Procedures.
510.802 Delegation by the Secretary of the Treasury.
Subpart I_Paperwork Reduction Act
510.901 Paperwork Reduction Act notice.
Appendix A to Part 510--Executive Order 13466
Appendix B to Part 510--Executive Order 13551
Appendix C to Part 510--Executive Order 13570
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651,
1701-1706; 22 U.S.C. 287c; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C.
2461 note); Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); E.O.
13466, 73 FR 36787, June 27, 2008, 3 CFR, 2008 Comp., p. 195; E.O.
13551, 75 FR 53837, September 1, 2010; E.O. 13570, 76 FR 22291, April
20, 2011.
Source: 75 FR 67913, Nov. 4, 2010, unless otherwise noted.
Subpart A_Relation of This Part to Other Laws and Regulations
Sec. 510.101 Relation of this part to other laws and regulations.
This part is separate from, and independent of, the other parts of
this chapter, with the exception of part 501 of this chapter, the
recordkeeping and reporting requirements and license application and
other procedures of which apply to this part. Actions taken pursuant to
part 501 of this chapter with respect to the prohibitions contained in
this part are considered actions taken pursuant to this part. Differing
foreign policy and national security circumstances may result in
differing interpretations of similar language among the parts of this
chapter. No license or authorization contained in or issued pursuant to
those other parts authorizes any transaction prohibited by this part. No
license or authorization contained in or issued pursuant to any other
provision of law or regulation authorizes any transaction prohibited by
this part. No license or authorization contained in or issued pursuant
to this part relieves the involved parties from complying with any other
applicable laws or regulations.
Note to Sec. 510.101: This part has been published in abbreviated
form for the purpose of providing immediate guidance to the public. OFAC
intends to supplement this part with a more comprehensive set of
regulations, which may include additional interpretive and definitional
guidance and additional general licenses and statements of licensing
policy.
Subpart B_Prohibitions
Sec. 510.201 Prohibited transactions.
(a) All transactions prohibited pursuant to Executive Order 13466
are also prohibited pursuant to this part.
Note to Sec. 510.201(a): The property and interests in property of
North Korea or a North Korean national blocked pursuant to this
paragraph are referred to throughout this part as ``property and
interests in property blocked pursuant to Sec. 510.201(a).''
(b) All transactions prohibited pursuant to Executive Order 13551
are also prohibited pursuant to this part.
Note 1 to Sec. 510.201(b): The names of persons listed in or
designated pursuant to Executive Order 13551, whose property and
interests in property therefore are blocked pursuant to paragraph (b) of
this section, are published in the Federal Register and incorporated
into the Office of Foreign Assets Control's Specially Designated
Nationals and Blocked Persons List (``SDN List'') with the identifier
``[DPRK].'' The SDN List is accessible through the following page on the
Office of Foreign Assets Control's Web site: http://www.treasury.gov/
sdn. Additional information pertaining to the SDN List can be found in
appendix A to this chapter. See Sec. 510.406 concerning entities that
may not be listed on the SDN List but whose property and interests in
property are nevertheless blocked pursuant to paragraph (b) of this
section.
Note 2 to Sec. 510.201(b): The International Emergency Economic
Powers Act (50 U.S.C. 1701-1706), in Section 203 (50 U.S.C. 1702),
authorizes the blocking of property and interests in property of a
person during the pendency of an investigation. The names of persons
whose property and interests in property are blocked pending
investigation pursuant to paragraph (b) of this section also are
published in the Federal Register and
[[Page 54]]
incorporated into the SDN List with the identifier ``[BPI-DPRK].''
(c) All transactions prohibited pursuant to Executive Order 13570
are also prohibited pursuant to this part.
Note to Sec. 510.201: Sections 501.806 and 501.807 of this chapter
describe the procedures to be followed by persons seeking, respectively,
the unblocking of funds that they believe were blocked due to mistaken
identity, or administrative reconsideration of the status of their
property and interests in property as blocked pursuant to
Sec. 501.201(a) or of their status as persons whose property and
interests in property are blocked pursuant to Sec. 510.201(b).
[75 FR 67913, Nov. 4, 2010, as amended at 76 FR 35741, June 20, 2011; 76
FR 38535, June 30, 2011]
Sec. 510.202 Effect of transfers violating the provisions of this
part.
(a) Any transfer after the effective date that is in violation of
any provision of this part or of any regulation, order, directive,
ruling, instruction, or license issued pursuant to this part, and that
involves any property or interest in property blocked pursuant to
Sec. 510.201 is null and void and shall not be the basis for the
assertion or recognition of any interest in or right, remedy, power, or
privilege with respect to such property or property interest.
(b) No transfer before the effective date shall be the basis for the
assertion or recognition of any right, remedy, power, or privilege with
respect to, or any interest in, any property or interest in property
blocked pursuant to Sec. 510.201, unless the person who holds or
maintains such property, prior to that date, had written notice of the
transfer or by any written evidence had recognized such transfer.
(c) Unless otherwise provided, an appropriate license or other
authorization issued by the Office of Foreign Assets Control before,
during, or after a transfer shall validate such transfer or make it
enforceable to the same extent that it would be valid or enforceable but
for the provisions of IEEPA, Executive Order 13466, Executive Order
13551, this part, and any regulation, order, directive, ruling,
instruction, or license issued pursuant to this part.
(d) Transfers of property that otherwise would be null and void or
unenforceable by virtue of the provisions of this section shall not be
deemed to be null and void or unenforceable as to any person with whom
such property is or was held or maintained (and as to such person only)
in cases in which such person is able to establish to the satisfaction
of the Office of Foreign Assets Control each of the following:
(1) Such transfer did not represent a willful violation of the
provisions of this part by the person with whom such property is or was
held or maintained (and as to such person only);
(2) The person with whom such property is or was held or maintained
did not have reasonable cause to know or suspect, in view of all the
facts and circumstances known or available to such person, that such
transfer required a license or authorization issued pursuant to this
part and was not so licensed or authorized, or, if a license or
authorization did purport to cover the transfer, that such license or
authorization had been obtained by misrepresentation of a third party or
withholding of material facts or was otherwise fraudulently obtained;
and
(3) The person with whom such property is or was held or maintained
filed with the Office of Foreign Assets Control a report setting forth
in full the circumstances relating to such transfer promptly upon
discovery that:
(i) Such transfer was in violation of the provisions of this part or
any regulation, ruling, instruction, license, or other directive or
authorization issued pursuant to this part;
(ii) Such transfer was not licensed or authorized by the Office of
Foreign Assets Control; or
(iii) If a license did purport to cover the transfer, such license
had been obtained by misrepresentation of a third party or withholding
of material facts or was otherwise fraudulently obtained.
Note to paragraph (d) of Sec. 510.202: The filing of a report in
accordance with the provisions of paragraph (d)(3) of this section shall
not be deemed evidence that the terms of paragraphs (d)(1) and (d)(2) of
this section have been satisfied.
(e) Unless licensed pursuant to this part, any attachment, judgment,
decree, lien, execution, garnishment, or other judicial process is null
and void
[[Page 55]]
with respect to any property or interest in property blocked pursuant to
Sec. 510.201.
Sec. 510.203 Holding of funds in interest-bearing accounts;
investment and reinvestment.
(a) Except as provided in paragraphs (c) or (d) of this section, or
as otherwise directed by the Office of Foreign Assets Control, any U.S.
person holding funds, such as currency, bank deposits, or liquidated
financial obligations, subject to Sec. 510.201 shall hold or place such
funds in a blocked interest-bearing account located in the United
States.
(b)(1) For purposes of this section, the term blocked interest-
bearing account means a blocked account:
(i) In a federally insured U.S. bank, thrift institution, or credit
union, provided the funds are earning interest at rates that are
commercially reasonable; or
(ii) With a broker or dealer registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.), provided the funds are invested in a money market fund or
in U.S. Treasury bills.
(2) For purposes of this section, a rate is commercially reasonable
if it is the rate currently offered to other depositors on deposits or
instruments of comparable size and maturity.
(3) Funds held or placed in a blocked account pursuant to this
paragraph (b) may not be invested in instruments the maturity of which
exceeds 180 days. If interest is credited to a separate blocked account
or subaccount, the name of the account party on each account must be the
same.
(c) Blocked funds held in instruments the maturity of which exceeds
180 days at the time the funds become subject to Sec. 510.201 may
continue to be held until maturity in the original instrument, provided
any interest, earnings, or other proceeds derived therefrom are paid
into a blocked interest-bearing account in accordance with paragraphs
(b) or (d) of this section.
(d) Blocked funds held in accounts or instruments outside the United
States at the time the funds become subject to Sec. 510.201 may continue
to be held in the same type of accounts or instruments, provided the
funds earn interest at rates that are commercially reasonable.
(e) This section does not create an affirmative obligation for the
holder of blocked tangible property, such as chattels or real estate, or
of other blocked property, such as debt or equity securities, to sell or
liquidate such property. However, the Office of Foreign Assets Control
may issue licenses permitting or directing such sales or liquidation in
appropriate cases.
(f) Funds subject to this section may not be held, invested, or
reinvested in a manner that provides immediate financial or economic
benefit or access to North Korea or any North Korean national who has
property or interests in property blocked pursuant to Sec. 510.201(a) or
any person whose property and interests in property are blocked pursuant
to Sec. 510.201(b), nor may their holder cooperate in or facilitate the
pledging or other attempted use as collateral of blocked funds or other
assets.
Subpart C_General Definitions
Sec. 510.301 Blocked account; blocked property.
The terms blocked account and blocked property shall mean any
account or property subject to the prohibitions in Sec. 510.201, and
either blocked pursuant to Sec. 510.201(a) or held in the name of a
person whose property and interests in property are blocked pursuant to
Sec. 510.201(b), or in which such person has an interest, and with
respect to which payments, transfers, exportations, withdrawals, or
other dealings may not be made or effected except pursuant to an
authorization or license from the Office of Foreign Assets Control
expressly authorizing such action.
Note to Sec. 510.301: See Sec. 510.406 concerning the blocked status
of property and interests in property of an entity that is 50 percent or
more owned by a person whose property and interests in property are
blocked pursuant to Sec. 510.201.
Sec. 510.302 Effective date.
The term effective date refers to the effective date of the
applicable prohibitions and directives contained in this part as
follows:
[[Page 56]]
(a) With respect to property and interests in property blocked
pursuant to E.O. 13466, June 26, 2008;
Note to paragraph (a): Prior to June 26, 2008, all property and
interests in property currently blocked pursuant to E.O. 13466 were
blocked pursuant to 31 CFR part 500.
(b) With respect to a person listed in the Annex to E.O. 13551,
12:01 p.m. eastern daylight time, August 30, 2010;
(c) With respect to a person whose property and interests in
property are otherwise blocked pursuant to E.O. 13551, the earlier of
the date of actual or constructive notice that such person's property
and interests in property are blocked; or
(d) With respect to E.O. 13570, 12:01 a.m. eastern daylight time,
April 19, 2011.
[75 FR 67913, Nov. 4, 2010, as amended at 76 FR 35741, June 20, 2011]
Sec. 510.303 Entity.
The term entity means a partnership, association, trust, joint
venture, corporation, group, subgroup, or other organization.
Sec. 510.304 Interest.
Except as otherwise provided in this part, the term interest, when
used with respect to property (e.g., ``an interest in property''), means
an interest of any nature whatsoever, direct or indirect.
Sec. 510.305 Licenses; general and specific.
(a) Except as otherwise specified, the term license means any
license or authorization contained in or issued pursuant to this part.
(b) The term general license means any license or authorization the
terms of which are set forth in subpart E of this part.
(c) The term specific license means any license or authorization not
set forth in subpart E of this part but issued pursuant to this part.
Note to Sec. 510.305: See Sec. 501.801 of this chapter on licensing
procedures.
Sec. 510.306 Person.
The term person means an individual or entity.
Sec. 510.307 Property; property interest.
The terms property and property interest include, but are not
limited to, money, checks, drafts, bullion, bank deposits, savings
accounts, debts, indebtedness, obligations, notes, guarantees,
debentures, stocks, bonds, coupons, any other financial instruments,
bankers acceptances, mortgages, pledges, liens or other rights in the
nature of security, warehouse receipts, bills of lading, trust receipts,
bills of sale, any other evidences of title, ownership or indebtedness,
letters of credit and any documents relating to any rights or
obligations thereunder, powers of attorney, goods, wares, merchandise,
chattels, stocks on hand, ships, goods on ships, real estate mortgages,
deeds of trust, vendors' sales agreements, land contracts, leaseholds,
ground rents, real estate and any other interest therein, options,
negotiable instruments, trade acceptances, royalties, book accounts,
accounts payable, judgments, patents, trademarks or copyrights,
insurance policies, safe deposit boxes and their contents, annuities,
pooling agreements, services of any nature whatsoever, contracts of any
nature whatsoever, and any other property, real, personal, or mixed,
tangible or intangible, or interest or interests therein, present,
future, or contingent.
Sec. 510.308 Transfer.
The term transfer means any actual or purported act or transaction,
whether or not evidenced by writing, and whether or not done or
performed within the United States, the purpose, intent, or effect of
which is to create, surrender, release, convey, transfer, or alter,
directly or indirectly, any right, remedy, power, privilege, or interest
with respect to any property. Without limitation on the foregoing, it
shall include the making, execution, or delivery of any assignment,
power, conveyance, check, declaration, deed, deed of trust, power of
attorney, power of appointment, bill of sale, mortgage, receipt,
agreement, contract, certificate, gift, sale, affidavit, or statement;
the making of any payment; the setting off of any obligation or credit;
the appointment of any agent, trustee, or fiduciary; the creation or
transfer of any
[[Page 57]]
lien; the issuance, docketing, filing, or levy of or under any judgment,
decree, attachment, injunction, execution, or other judicial or
administrative process or order, or the service of any garnishment; the
acquisition of any interest of any nature whatsoever by reason of a
judgment or decree of any foreign country; the fulfillment of any
condition; the exercise of any power of appointment, power of attorney,
or other power; or the acquisition, disposition, transportation,
importation, exportation, or withdrawal of any security.
Sec. 510.309 United States.
The term United States means the United States, its territories and
possessions, and all areas under the jurisdiction or authority thereof.
Sec. 510.310 U.S. financial institution.
The term U.S. financial institution means any U.S. entity (including
its foreign branches) that is engaged in the business of accepting
deposits, making, granting, transferring, holding, or brokering loans or
credits, or purchasing or selling foreign exchange, securities,
commodity futures or options, or procuring purchasers and sellers
thereof, as principal or agent. It includes but is not limited to
depository institutions, banks, savings banks, trust companies,
securities brokers and dealers, commodity futures and options brokers
and dealers, forward contract and foreign exchange merchants, securities
and commodities exchanges, clearing corporations, investment companies,
employee benefit plans, and U.S. holding companies, U.S. affiliates, or
U.S. subsidiaries of any of the foregoing. This term includes those
branches, offices and agencies of foreign financial institutions that
are located in the United States, but not such institutions' foreign
branches, offices, or agencies.
Sec. 510.311 United States person; U.S. person.
The term United States person or U.S. person means any United States
citizen, permanent resident alien, entity organized under the laws of
the United States or any jurisdiction within the United States
(including foreign branches), or any person in the United States.
Subpart D_Interpretations
Sec. 510.401 [Reserved]
Sec. 510.402 Effect of amendment.
Unless otherwise specifically provided, any amendment, modification,
or revocation of any provision in this part, any provision in or
appendix to this chapter, or any order, regulation, ruling, instruction,
or license issued by the Office of Foreign Assets Control does not
affect any act done or omitted, or any civil or criminal proceeding
commenced or pending, prior to such amendment, modification, or
revocation. All penalties, forfeitures, and liabilities under any such
order, regulation, ruling, instruction, or license continue and may be
enforced as if such amendment, modification, or revocation had not been
made.
Sec. 510.403 Termination and acquisition of an interest in blocked
property.
(a) Whenever a transaction licensed or authorized by or pursuant to
this part results in the transfer of property (including any property
interest) away from a person, such property shall no longer be deemed to
be property blocked pursuant to Sec. 510.201, unless there exists in the
property another interest that is blocked pursuant to Sec. 510.201 or
any other part of this chapter, the transfer of which has not been
effected pursuant to license or other authorization.
(b) Unless otherwise specifically provided in a license or
authorization issued pursuant to this part, if property (including any
property interest) is transferred or attempted to be transferred to a
person whose property and interests in property are blocked pursuant to
Sec. 510.201(b), such property shall be deemed to be property in which
that person has an interest and therefore blocked.
Sec. 510.404 Transactions ordinarily incident to a licensed
transaction authorized.
Any transaction ordinarily incident to a licensed transaction and
necessary
[[Page 58]]
to give effect thereto is also authorized, except:
(a) An ordinarily incident transaction, not explicitly authorized
within the terms of the license, by or with a person whose property and
interests in property are blocked pursuant to Sec. 510.201(b); or
(b) An ordinarily incident transaction, not explicitly authorized
within the terms of the license, involving a debit to a blocked account
or a transfer of blocked property.
Sec. 510.405 Setoffs prohibited.
A setoff against blocked property (including a blocked account),
whether by a U.S. bank or other U.S. person, is a prohibited transfer
under Sec. 510.201 if effected after the effective date.
Sec. 510.406 Entities owned by a person whose property and interests
in property are blocked.
A person whose property and interests in property are blocked
pursuant to Sec. 510.201(b) has an interest in all property and
interests in property of an entity in which it owns, directly or
indirectly, a 50 percent or greater interest. The property and interests
in property of such an entity, therefore, are blocked, and such an
entity is a person whose property and interests in property are blocked
pursuant to Sec. 510.201(b), regardless of whether the entity itself is
listed in the Annex or designated pursuant to Executive Order 13551.
Subpart E_Licenses, Authorizations, and Statements of Licensing Policy
Sec. 510.501 General and specific licensing procedures.
For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part 501
of this chapter with respect to the prohibitions contained in this part
are considered actions taken pursuant to this part.
[76 FR 35741, June 20, 2011]
Sec. 510.502 [Reserved]
Sec. 510.503 Exclusion from licenses.
The Office of Foreign Assets Control reserves the right to exclude
any person, property, or transaction from the operation of any license
or from the privileges conferred by any license. The Office of Foreign
Assets Control also reserves the right to restrict the applicability of
any license to particular persons, property, transactions, or classes
thereof. Such actions are binding upon actual or constructive notice of
the exclusions or restrictions.
Sec. 510.504 Payments and transfers to blocked accounts in U.S.
financial institutions.
Any payment of funds or transfer of credit in which a person whose
property and interests in property are blocked pursuant to
Sec. 510.201(b) has any interest that comes within the possession or
control of a U.S. financial institution must be blocked in an account on
the books of that financial institution. A transfer of funds or credit
by a U.S. financial institution between blocked accounts in its branches
or offices is authorized, provided that no transfer is made from an
account within the United States to an account held outside the United
States, and further provided that a transfer from a blocked account may
be made only to another blocked account held in the same name.
Note to Sec. 510.504: See Sec. 501.603 of this chapter for mandatory
reporting requirements regarding financial transfers. See also
Sec. 510.203 concerning the obligation to hold blocked funds in
interest-bearing accounts.
Sec. 510.505 Entries in certain accounts for normal service charges
authorized.
(a) A U.S. financial institution is authorized to debit any blocked
account held at that financial institution in payment or reimbursement
for normal service charges owed it by the owner of that blocked account.
(b) As used in this section, the term normal service charges shall
include charges in payment or reimbursement for interest due; cable,
telegraph, Internet, or telephone charges; postage costs; custody fees;
small adjustment
[[Page 59]]
charges to correct bookkeeping errors; and, but not by way of
limitation, minimum balance charges, notary and protest fees, and
charges for reference books, photocopies, credit reports, transcripts of
statements, registered mail, insurance, stationery and supplies, and
other similar items.
Sec. 510.506 Provision of certain legal services authorized.
(a) The provision of the following legal services to or on behalf of
persons whose property and interests in property are blocked pursuant to
Sec. 510.201(b) is authorized, provided that all receipts of payment of
professional fees and reimbursement of incurred expenses must be
specifically licensed:
(1) Provision of legal advice and counseling on the requirements of
and compliance with the laws of the United States or any jurisdiction
within the United States, provided that such advice and counseling are
not provided to facilitate transactions in violation of this part;
(2) Representation of persons named as defendants in or otherwise
made parties to domestic U.S. legal, arbitration, or administrative
proceedings;
(3) Initiation and conduct of domestic U.S. legal, arbitration, or
administrative proceedings in defense of property interests subject to
U.S. jurisdiction;
(4) Representation of persons before any federal or state agency
with respect to the imposition, administration, or enforcement of U.S.
sanctions against such persons; and
(5) Provision of legal services in any other context in which
prevailing U.S. law requires access to legal counsel at public expense.
(b) The provision of any other legal services to persons whose
property and interests in property are blocked pursuant to
Sec. 510.201(b), not otherwise authorized in this part, requires the
issuance of a specific license.
(c) Entry into a settlement agreement or the enforcement of any
lien, judgment, arbitral award, decree, or other order through
execution, garnishment, or other judicial process purporting to transfer
or otherwise alter or affect property or interests in property blocked
pursuant to Sec. 510.201 is prohibited unless licensed pursuant to this
part.
Sec. 510.507 Authorization of emergency medical services.
The provision of nonscheduled emergency medical services in the
United States to persons whose property and interests in property are
blocked pursuant to Sec. 510.201(b) is authorized, provided that all
receipt of payment for such services must be specifically licensed.
Subparts F-G [Reserved]
Subpart H_Procedures
Sec. 510.801 Procedures.
For license application procedures and procedures relating to
amendments, modifications, or revocations of licenses; administrative
decisions; rulemaking; and requests for documents pursuant to the
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see
part 501, subpart E, of this chapter.
[76 FR 35741, June 20, 2011]
Sec. 510.802 Delegation by the Secretary of the Treasury.
Any action that the Secretary of the Treasury is authorized to take
pursuant to Executive Order 13466 of June 26, 2008 (73 FR 36787, June
27, 2008), Executive Order 13551 of August 30, 2010 (75 FR 53837,
September 1, 2010), Executive Order 13570 of April 18, 2011 (76 FR
22291, April 20, 2011), and any further Executive orders relating to the
national emergency declared in Executive Order 13466 may be taken by the
Director of the Office of Foreign Assets Control or by any other person
to whom the Secretary of the Treasury has delegated authority so to act.
[76 FR 35741, June 20, 2011]
Subpart I_Paperwork Reduction Act
Sec. 510.901 Paperwork Reduction Act notice.
For approval by the Office of Management and Budget (``OMB'') under
the Paperwork Reduction Act of 1995
[[Page 60]]
(44 U.S.C. 3507) of information collections relating to recordkeeping
and reporting requirements, licensing procedures (including those
pursuant to statements of licensing policy), and other procedures, see
Sec. 501.901 of this chapter. An agency may not conduct or sponsor, and
a person is not required to respond to, a collection of information
unless it displays a valid control number assigned by OMB.
Sec. Appendix A to Part 510--Executive Order 13466
Executive Order 13466 of June 26, 2008
Continuing Certain Restrictions With Respect to North Korea and North
Korean Nationals
By the authority vested in me as President by the Constitution and
the laws of the United States of America, including the International
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the
National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), and section 301
of title 3, United States Code, I, GEORGE W. BUSH, President of the
United States of America, find that the current existence and risk of
the proliferation of weapons-usable fissile material on the Korean
Peninsula constitute an unusual and extraordinary threat to the national
security and foreign policy of the United States, and I hereby declare a
national emergency to deal with that threat. I further find that, as we
deal with that threat through multilateral diplomacy, it is necessary to
continue certain restrictions with respect to North Korea that would
otherwise be lifted pursuant to a forthcoming proclamation that will
terminate the exercise of authorities under the Trading With the Enemy
Act (50 U.S.C. App. 1 et seq.) (TWEA) with respect to North Korea.
Accordingly, I hereby order:
Section 1. Except to the extent provided in statutes or in
regulations, orders, directives, or licenses that may be issued pursuant
to this order, and notwithstanding any contract entered into or any
license or permit granted prior to the date of this order, the following
are blocked and may not be transferred, paid, exported, withdrawn, or
otherwise dealt in:
All property and interests in property of North Korea or a North
Korean national that, pursuant to the President's authorities under the
TWEA, the exercise of which has been continued in accordance with
section 101(b) of Public Law 95-223 (91 Stat. 1625; 50 U.S.C. App. 5(b)
note), were blocked as of June 16, 2000, and remained blocked
immediately prior to the date of this order.
Sec. 2. Except to the extent provided in statutes or in regulations,
orders, directives, or licenses that may be issued pursuant to this
order, and notwithstanding any contract entered into or any license or
permit granted prior to the date of this order, United States persons
may not register a vessel in North Korea, obtain authorization for a
vessel to fly the North Korean flag, or own, lease, operate, or insure
any vessel flagged by North Korea.
Sec. 3. (a) Any transaction by a United States person or within the
United States that evades or avoids, has the purpose of evading or
avoiding, or attempts to violate any of the prohibitions set forth in
this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set
forth in this order is prohibited.
Sec. 4. For the purposes of this order:
(a) The term ``person'' means an individual or entity;
(b) The term ``entity'' means a partnership, association, trust,
joint venture, corporation, group, subgroup, or other organization; and
(c) The term ``United States person'' means any United States
citizen, permanent resident alien, entity organized under the laws of
the United States or any jurisdiction within the United States
(including foreign branches), or any person in the United States.
Sec. 5. The Secretary of the Treasury, after consultation with the
Secretary of State, is hereby authorized to take such actions, including
the promulgation of rules and regulations, and to employ all powers
granted to the President by IEEPA as may be necessary to carry out the
purposes of this order. The Secretary of the Treasury may redelegate any
of these functions to other officers and agencies of the United States
Government consistent with applicable law. All agencies of the United
States Government are hereby directed to take all appropriate measures
within their authority to carry out the provisions of this order.
Sec. 6. The Secretary of the Treasury, after consultation with the
Secretary of State, is hereby authorized to submit the recurring and
final reports to the Congress on the national emergency declared in this
order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and
section 204(c) of IEEPA (50 U.S.C. 1703(c)).
Sec. 7. This order is not intended to, and does not, create any
right or benefit, substantive or procedural, enforceable at law or in
equity by any party against the United States, its departments,
agencies, instrumentalities, or entities, its officers or employees, or
any other person.
George W. Bush,
THE WHITE HOUSE,
June 26, 2008.
[[Page 61]]
Sec. Appendix B to Part 510--Executive Order 13551
Executive Order 13551 of August 30, 2010
Blocking Property of Certain Persons With Respect to North Korea
By the authority vested in me as President by the Constitution and
the laws of the United States of America, including the International
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the
National Emergencies Act (50 U.S.C. 1601 et seq.), section 5 of the
United Nations Participation Act of 1945 (22 U.S.C. 287c) (UNPA), and
section 301 of title 3, United States Code; in view of United Nations
Security Council Resolution (UNSCR) 1718 of October 14, 2006, and UNSCR
1874 of June 12, 2009; and to take additional steps with respect to the
situation in North Korea.
I, BARACK OBAMA, President of the United States of America, hereby
expand the scope of the national emergency declared in Executive Order
13466 of June 26, 2008, finding that the continued actions and policies
of the Government of North Korea, manifested most recently by its
unprovoked attack that resulted in the sinking of the Republic of Korea
Navy ship Cheonan and the deaths of 46 sailors in March 2010; its
announced test of a nuclear device and its missile launches in 2009; its
actions in violation of UNSCRs 1718 and 1874, including the procurement
of luxury goods; and its illicit and deceptive activities in
international markets through which it obtains financial and other
support, including money laundering, the counterfeiting of goods and
currency, bulk cash smuggling, and narcotics trafficking, destabilize
the Korean peninsula and imperil U.S. Armed Forces, allies, and trading
partners in the region, and thereby constitute an unusual and
extraordinary threat to the national security, foreign policy, and
economy of the United States.
I hereby order:
Section 1. (a) All property and interests in property that are in
the United States, that hereafter come within the United States, or that
are or hereafter come within the possession or control of any United
States person, including any overseas branch, of the following persons
are blocked and may not be transferred, paid, exported, withdrawn, or
otherwise dealt in:
(i) The persons listed in the Annex to this order; and
(ii) Any person determined by the Secretary of the Treasury, in
consultation with the Secretary of State:
(A) To have, directly or indirectly, imported, exported, or
reexported to, into, or from North Korea any arms or related materiel;
(B) To have, directly or indirectly, provided training, advice, or
other services or assistance, or engaged in financial transactions,
related to the manufacture, maintenance, or use of any arms or related
materiel to be imported, exported, or reexported to, into, or from North
Korea, or following their importation, exportation, or reexportation to,
into, or from North Korea;
(C) To have, directly or indirectly, imported, exported, or
reexported luxury goods to or into North Korea;
(D) To have, directly or indirectly, engaged in money laundering,
the counterfeiting of goods or currency, bulk cash smuggling, narcotics
trafficking, or other illicit economic activity that involves or
supports the Government of North Korea or any senior official thereof;
(E) To have materially assisted, sponsored, or provided financial,
material, or technological support for, or goods or services to or in
support of, the activities described in subsections (a)(ii)(A)-(D) of
this section or any person whose property and interests in property are
blocked pursuant to this order;
(F) To be owned or controlled by, or to have acted or purported to
act for or on behalf of, directly or indirectly, any person whose
property and interests in property are blocked pursuant to this order;
or (G) to have attempted to engage in any of the activities described in
subsections (a)(ii)(A)-(F) of this section.
(b) I hereby determine that, to the extent section 203(b)(2) of
IEEPA (50 U.S.C. 1702(b)(2)) may apply, the making of donations of the
types of articles specified in such section by, to, or for the benefit
of any person whose property and interests in property are blocked
pursuant to this order would seriously impair my ability to deal with
the national emergency declared in Executive Order 13466 and expanded in
scope in this order, and I hereby prohibit such donations as provided by
subsection (a) of this section.
(c) The prohibitions in subsection (a) of this section include, but
are not limited to:
(i) The making of any contribution or provision of funds, goods, or
services by, to, or for the benefit of any person whose property and
interests in property are blocked pursuant to this order; and
(ii) The receipt of any contribution or provision of funds, goods,
or services from any such person.
(d) The prohibitions in subsection (a) of this section apply except
to the extent provided by statutes, or in regulations, orders,
directives, or licenses that may be issued pursuant to this order, and
notwithstanding any contract entered into or any license or permit
granted prior to the effective date of this order.
Sec. 2. (a) Any transaction by a United States person or within the
United States that evades or avoids, has the purpose of evading or
avoiding, causes a violation of, or
[[Page 62]]
attempts to violate any of the prohibitions set forth in this order is
prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set
forth in this order is prohibited.
Sec. 3. The provisions of Executive Order 13466 remain in effect,
and this order does not affect any action taken pursuant to that order.
Sec. 4. For the purposes of this order:
(a) The term ``person'' means an individual or entity;
(b) The term ``entity'' means a partnership, association, trust,
joint venture, corporation, group, subgroup, or other organization;
(c) The term ``United States person'' means any United States
citizen, permanent resident alien, entity organized under the laws of
the United States or any jurisdiction within the United States
(including foreign branches), or any person in the United States;
(d) The term ``North Korea'' includes the territory of the
Democratic People's Republic of Korea and the Government of North Korea;
(e) The term ``Government of North Korea'' means the Government of
the Democratic People's Republic of Korea, its agencies,
instrumentalities, and controlled entities; and
(f) The term ``luxury goods'' includes those items listed in 15 CFR
746.4(b)(l) and Supplement No. 1 to part 746 and similar items.
Sec. 5. For those persons whose property and interests in property
are blocked pursuant to this order who might have a constitutional
presence in the United States, I find that because of the ability to
transfer funds or other assets instantaneously, prior notice to such
persons of measures to be taken pursuant to this order would render
these measures ineffectual. I therefore determine that for these
measures to be effective in addressing the national emergency declared
in Executive Order 13466 and expanded in scope in this order, there need
be no prior notice of a listing or determination made pursuant to
section 1(a) of this order.
Sec. 6. The Secretary of the Treasury, in consultation with the
Secretary of State, is hereby authorized to take such actions, including
the promulgation of rules and regulations, and to employ all powers
granted to the President by IEEPA and the UNPA, as may be necessary to
carry out the purposes of this order. The Secretary of the Treasury may
redelegate any of these functions to other officers and agencies of the
United States Government consistent with applicable law. All agencies of
the United States Government are hereby directed to take all appropriate
measures within their authority to carry out the provisions of this
order.
Sec. 7. The Secretary of the Treasury, in consultation with the
Secretary of State, is hereby authorized to determine that circumstances
no longer warrant the blocking of the property and interests in property
of a person listed in the Annex to this order, and to take necessary
action to give effect to that determination.
Sec. 8. This order is not intended to, and does not, create any
right or benefit, substantive or procedural, enforceable at law or in
equity by any party against the United States, its departments,
agencies, or entities, its officers, employees, agents, or any other
person.
Sec. 9. This order is effective at 12:01 p.m., eastern daylight time
on August 30, 2010.
Barack Obama,
THE WHITE HOUSE,
August 30, 2010.
ANNEX
Individual
1. KIM Yong Chol [born 1946 or 1947]
Entities
1. Green Pine Associated Corporation
2. Reconnaissance General Bureau
3. Office 39
Sec. Appendix C to Part 510--Executive Order 13570
Executive Order 13570 of April 18, 2011
Prohibiting Certain Transactions With Respect to North Korea
By the authority vested in me as President by the Constitution and
the laws of the United States of America, including the International
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the
National Emergencies Act (50 U.S.C. 1601 et seq.), section 5 of the
United Nations Participation Act of 1945 (22 U.S.C. 287c) (UNPA), and
section 301 of title 3, United States Code, and in view of United
Nations Security Council Resolution (UNSCR) 1718 of October 14, 2006,
and UNSCR 1874 of June 12, 2009,
I, BARACK OBAMA, President of the United States of America, in order
to take additional steps to address the national emergency declared in
Executive Order 13466 of June 26, 2008, and expanded in Executive Order
13551 of August 30, 2010, that will ensure implementation of the import
restrictions contained in UNSCRs 1718 and 1874 and complement the import
restrictions provided for in the Arms Export Control Act (22 U.S.C. 2751
et seq.), hereby order:
Section 1. Except to the extent provided in statutes or in licenses,
regulations, orders, or directives that may be issued pursuant to this
order, and notwithstanding any contract entered into or any license or
permit granted
[[Page 63]]
prior to the date of this order, the importation into the United States,
directly or indirectly, of any goods, services, or technology from North
Korea is prohibited.
Sec. 2. (a) Any transaction by a United States person or within the
United States that evades or avoids, has the purpose of evading or
avoiding, causes a violation of, or attempts to violate any of the
prohibitions set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set
forth in this order is prohibited.
Sec. 3. The provisions of Executive Orders 13466 and 13551 remain in
effect, and this order does not affect any action taken pursuant to
those orders.
Sec. 4. For the purposes of this order:
(a) The term ``person'' means an individual or entity;
(b) The term ``entity'' means a partnership, association, trust,
joint venture, corporation, group, subgroup, or other organization;
(c) The term ``United States person'' means any United States
citizen, permanent resident alien, entity organized under the laws of
the United States or any jurisdiction within the United States
(including foreign branches), or any person in the United States;
(d) The term ``North Korea'' includes the territory of the
Democratic People's Republic of Korea and the Government of North Korea;
and
(e) The term ``Government of North Korea'' means the Government of
the Democratic People's Republic of Korea, its agencies,
instrumentalities, and controlled entities.
Sec. 5. The Secretary of the Treasury, in consultation with the
Secretary of State, is hereby authorized to take such actions, including
the promulgation of rules and regulations, and to employ all powers
granted to the President by IEEPA and the UNPA as may be necessary to
carry out the purposes of this order. The Secretary of the Treasury may
redelegate any of these functions to other officers and agencies of the
United States Government consistent with applicable law. All agencies of
the United States Government are hereby directed to take all appropriate
measures within their authority to carry out the provisions of this
order.
Sec. 6. This order is not intended to, and does not, create any
right or benefit, substantive or procedural, enforceable at law or in
equity by any party against the United States, its departments,
agencies, or entities, its officers, employees, or agents, or any other
person.
Sec. 7. This order is effective at 12:01 a.m. eastern daylight time
on April 19, 2011.
Barack Obama,
THE WHITE HOUSE,
April 18, 2011.
[76 FR 35741, June 20, 2011]
PART 515_CUBAN ASSETS CONTROL REGULATIONS--Table of Contents
Subpart A_Relation of This Part to Other Laws and Regulations
Sec.
515.101 Relation of this part to other laws and regulations.
Subpart B_Prohibitions
515.201 Transactions involving designated foreign countries or their
nationals; effective date.
515.202 Transactions with respect to securities registered or inscribed
in the name of a designated national.
515.203 Effect of transfers violating the provisions of this part.
515.204 Importation of and dealings in certain merchandise.
515.205 Holding of certain types of blocked property in interest-
bearing accounts.
515.206 Exempt transactions.
515.207 Entry of vessels engaged in trade with Cuba.
515.208 Restrictions on loans, credits and other financing.
Subpart C_General Definitions
515.301 Foreign country.
515.302 National.
515.303 Nationals of more than one foreign country.
515.305 Designated national.
515.306 Specially designated national.
515.307 Unblocked national.
515.308 Person.
515.309 Transactions.
515.310 Transfer.
515.311 Property; property interests.
515.312 Interest.
515.313 Property subject to the jurisdiction of the United States.
515.314 Banking institution.
515.316 License.
515.317 General license.
515.318 Specific license.
515.319 Blocked account.
515.320 Domestic bank.
515.321 United States; continental United States.
515.322 Authorized trade territory; member of the authorized trade
territory.
515.323 Occupied area.
515.325 National securities exchange.
515.326 Custody of safe deposit boxes.
515.327 Blocked estate of a decedent.
515.329 Person subject to the jurisdiction of the United States; person
subject to U.S. jurisdiction.
[[Page 64]]
515.330 Person within the United States.
515.331 Merchandise.
515.332 Information and informational materials.
515.333 Depository institution.
515.334 United States national.
515.335 Permanent resident alien.
515.336 Confiscated.
515.337 Prohibited officials of the Government of Cuba.
515.338 Prohibited members of the Cuban Communist Party.
515.339 Close relative.
Subpart D_Interpretations
515.401 Reference to amended sections.
515.402 Effect of amendment of sections of this part or of other
orders, etc.
515.403 Termination and acquisition of the interest of a designated
national.
515.404 Transactions between principal and agent.
515.405 Exportation of securities, currency, checks, drafts and
promissory notes.
515.406 Drafts under irrevocable letters of credit; documentary drafts.
515.407 Administration of blocked estates of decedents.
515.408 Access to certain safe deposit boxes prohibited.
515.409 Certain payments to a designated foreign country and nationals
through third countries.
515.410 Dealing abroad in Cuban-origin commodities.
515.411-515.413 [Reserved]
515.415 Travel to Cuba; transportation of certain Cuban nationals.
515.416-515.419 [Reserved]
515.420 Travel to Cuba.
515.421 Transactions ordinarily incident to a licensed transaction.
Subpart E_Licenses, Authorizations, and Statements of Licensing Policy
515.501 General and specific licensing procedures.
515.502 Effect of subsequent license or authorization.
515.503 Exclusion from licenses and authorizations.
515.504 Certain judicial proceedings with respect to property of
designated nationals.
515.505 Certain Cuban nationals unblocked.
515.506-515.507 [Reserved]
515.508 Payments to blocked accounts in domestic banks.
515.509 Entries in certain accounts for normal service charges.
515.510 Payments to the United States, States and political
subdivisions.
515.511 Transactions by certain business enterprises.
515.512 Provision of certain legal services authorized.
515.513 Purchase and sale of certain securities.
515.514 Payment of dividends and interest on and redemption and
collection of securities.
515.515 Transfers of securities to blocked accounts in domestic banks.
515.516 Voting and soliciting of proxies on securities.
515.517 Access to safe deposit boxes under certain conditions.
515.518 [Reserved]
515.519 Limited payments from accounts of United States citizens
abroad.
515.520 Payments from accounts of United States citizens in employ of
United States in foreign countries and certain other persons.
515.521 U.S. assets of certain Cuban corporations.
515.522 [Reserved]
515.523 Transactions incident to the administration of decedents'
estates.
515.524 Payment from, and transactions in the administration of certain
trusts and estates.
515.525 Certain transfers as a consequence of the existence or change
of marital status authorized.
515.526 Transactions involving blocked life insurance policies.
515.527 Certain transactions with respect to United States intellectual
property.
515.528 Certain transactions with respect to blocked foreign
intellectual property.
515.529 Powers of attorney.
515.530 Exportation of powers of attorney or instructions relating to
certain types of transactions.
515.532 Completion of certain securities transactions.
515.533 Exportations from the United States to Cuba; reexportations to
Cuba; importation and servicing or repair of certain items
previously exported or reexported to Cuba.
515.534 Negotiation of, and entry into, contingent contracts relating
to transactions prohibited by this part.
515.535 Exchange of certain securities.
515.536 Certain transactions with respect to merchandise affected by
Sec. 515.204.
515.540 [Reserved]
515.542 Mail and telecommunications-related transactions.
515.543 Proof of origin.
515.544 Certain gifts sent to the United States.
515.545 Transactions related to information and informational
materials.
515.546 Accounts of Cuban sole proprietorships.
515.547 Certain transactions related to medical research and Cuban-
origin pharmaceuticals; research samples.
[[Page 65]]
515.548 Overflight payments, emergency landings, and air ambulance
services authorized.
515.549 Bank accounts and other property of non-Cuban citizens who were
in Cuba on or after July 8, 1963.
515.550 Certain vessel transactions authorized.
515.551 Joint bank accounts.
515.552 Proceeds of insurance policies.
515.553 Bank accounts of official representatives in Cuba of foreign
governments.
515.554 Transfers of abandoned property under State laws.
515.555 Assets of Cuban firms wholly or substantially owned by U.S.
citizens.
515.556 [Reserved]
515.557 Accounts of Cuban partnerships.
515.558 Bunkering of Cuban vessels and fueling of Cuban aircraft by
American-owned or controlled foreign firms.
515.559 Certain export and import transactions by U.S.-owned or -
controlled foreign firms.
515.560 Travel-related transactions to, from, and within Cuba by
persons subject to U.S. jurisdiction.
515.561 Family visits.
515.562 Official business of the U.S. government, foreign governments,
and certain intergovernmental organizations.
515.563 Journalistic activities in Cuba.
515.564 Professional research and professional meetings in Cuba.
515.565 Educational activities.
515.566 Religious activities in Cuba.
515.567 Public performances, clinics, workshops, athletic and other
competitions, and exhibitions.
515.568 [Reserved]
515.569 Foreign passengers' baggage.
515.570 Remittances.
515.571 Certain transactions incident to travel to, from, and within
the United States by Cuban nationals.
515.572 Provision of travel, carrier, other transportation-related, and
remittance forwarding services.
515.573 Physical presence and business presence in Cuba authorized;
Cuban news bureaus.
515.574 Support for the Cuban people.
515.575 Humanitarian projects.
515.576 Activities of private foundations or research or educational
institutes.
515.577 Authorized transactions necessary and ordinarily incident to
publishing.
515.578 Exportation, reexportation, and importation of certain
internet-based services; importation of software.
515.579 Funds transfers for third-country official missions and certain
intergovernmental organizations.
515.580 Global insurance policies covering individuals traveling to
Cuba.
515.581 Transactions related to conferences in third countries.
515.582 Importation of certain goods and services produced by
independent Cuban entrepreneurs.
515.583 Provision of certain goods and services to Cuban nationals
sequestered aboard vessels in U.S. ports.
515.584 Certain financial transactions involving Cuba.
515.585 Certain transactions in third countries.
515.586 Cuban official missions in the United States.
515.587 Remittances from Cuban nationals to persons subject to U.S.
jurisdiction.
515.588 Certain Cuban legal services authorized.
515.589 Authorization of emergency medical services.
515.590 Certain grants, scholarships, and awards.
515.591 Services related to infrastructure.
Subpart F_Reports
515.601 Records and reports.
Subpart G_Penalties
515.701 Penalties.
Subpart H_Procedures
515.801 Procedures.
515.802 Delegation by the Secretary of the Treasury.
Subpart I_Miscellaneous Provisions
515.901 Paperwork Reduction Act notice.
Authority: 22 U.S.C. 2370(a), 6001-6010, 7201-7211; 31 U.S.C.
321(b); 50 U.S.C. 4301- 4341; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C.
2461 note); Pub. L. 104-114, 110 Stat. 785 (22 U.S.C. 6021-6091); Pub.
L. 105-277, 112 Stat. 2681; Pub. L. 111-8, 123 Stat. 524; Pub. L. 111-
117, 123 Stat. 3034; E.O. 9193, 7 FR 5205, 3 CFR, 1938-1943 Comp., p.
1174; E.O. 9989, 13 FR 4891, 3 CFR, 1943-1948 Comp., p. 748; Proc. 3447,
27 FR 1085, 3 CFR, 1959-1963 Comp., p. 157; E.O. 12854, 58 FR 36587, 3
CFR, 1993 Comp., p. 614.
Source: 28 FR 6974, July 9, 1963, unless otherwise noted.
Subpart A_Relation of This Part to Other Laws and Regulations
Sec. 515.101 Relation of this part to other laws and regulations.
(a) This part is separate from, and independent of, the other parts
of this chapter with the exception of part 501 of this chapter, the
recordkeeping and reporting requirements and license application and
other procedures of which
[[Page 66]]
apply to this part. No license or authorization contained in or issued
pursuant to one of those parts, or any other provision of law,
authorizes any transaction prohibited by this part.
(b) No license or authorization contained in or issued pursuant to
this part shall be deemed to authorize any transaction prohibited by any
law other than the Trading With the Enemy Act, 50 U.S.C. App. 5(b), as
amended, the Foreign Assistance Act of 1961, 22 U.S.C. 2370, or any
proclamation, order, regulation or license issued pursuant thereto.
[50 FR 27437, July 3, 1985, as amended at 62 FR 45106, Aug. 25, 1997]
Subpart B_Prohibitions
Sec. 515.201 Transactions involving designated foreign countries
or their nationals; effective date.
(a) All of the following transactions are prohibited, except as
specifically authorized by the Secretary of the Treasury (or any person,
agency, or instrumentality designated by him) by means of regulations,
rulings, instructions, licenses, or otherwise, if either such
transactions are by, or on behalf of, or pursuant to the direction of a
foreign country designated under this part, or any national thereof, or
such transactions involve property in which a foreign country designated
under this part, or any national thereof, has at any time on or since
the effective date of this section had any interest of any nature
whatsoever, direct or indirect:
(1) All transfers of credit and all payments between, by, through,
or to any banking institution or banking institutions wheresoever
located, with respect to any property subject to the jurisdiction of the
United States or by any person (including a banking institution) subject
to the jurisdiction of the United States;
(2) All transactions in foreign exchange by any person within the
United States; and
(3) The exportation or withdrawal from the United States of gold or
silver coin or bullion, currency or securities, or the earmarking of any
such property, by any person within the United States.
(b) All of the following transactions are prohibited, except as
specifically authorized by the Secretary of the Treasury (or any person,
agency, or instrumentality designated by him) by means of regulations,
rulings, instructions, licenses, or otherwise, if such transactions
involve property in which any foreign country designated under this
part, or any national thereof, has at any time on or since the effective
date of this section had any interest of any nature whatsoever, direct
or indirect:
(1) All dealings in, including, without limitation, transfers,
withdrawals, or exportations of, any property or evidences of
indebtedness or evidences of ownership of property by any person subject
to the jurisdiction of the United States; and
(2) All transfers outside the United States with regard to any
property or property interest subject to the jurisdiction of the United
States.
(c) Any transaction for the purpose or which has the effect of
evading or avoiding any of the prohibitions set forth in paragraph (a)
or (b) of this section is hereby prohibited.
(d) For the purposes of this part, the term foreign country
designated under this part and the term designated foreign country mean
Cuba and the term effective date and the term effective date of this
section mean with respect to Cuba, or any national thereof, 12:01 a.m.,
e.s.t., July 8, 1963.
(e) When a transaction results in the blocking of funds at a banking
institution pursuant to this section and a party to the transaction
believes the funds have been blocked due to mistaken identity, that
party may seek to have such funds unblocked pursuant to the
administrative procedures set forth in Sec. 501.806 of this chapter.
[28 FR 6974, July 9, 1963, as amended at 62 FR 45106, Aug. 25, 1997]
Sec. 515.202 Transactions with respect to securities registered
or inscribed in the name of a designated national.
Unless authorized by a license expressly referring to this section,
the acquisition, transfer (including the transfer on the books of any
issuer or agent thereof), disposition, transportation, importation,
exportation, or
[[Page 67]]
withdrawal of, or the endorsement or guaranty of signatures on or
otherwise dealing in any security (or evidence thereof) registered or
inscribed in the name of any designated national is prohibited
irrespective of the fact that at any time (either prior to, on, or
subsequent to the ``effective date'') the registered or inscribed owner
thereof may have, or appears to have, assigned, transferred or otherwise
disposed of any such security.
Sec. 515.203 Effect of transfers violating the provisions of this part.
(a) Any transfer after the ``effective date'' which is in violation
of any provision of this part or of any regulation, ruling, instruction,
license, or other direction or authorization thereunder and involves any
property in which a designated national has or has had an interest since
such ``effective date'' is null and void and shall not be the basis for
the assertion or recognition of any interest in or right, remedy, power
or privilege with respect to such property.
(b) No transfer before the ``effective date'' shall be the basis for
the assertion or recognition of any right, remedy, power, or privilege
with respect to, or interest in, any property in which a designated
national has or has had an interest since the ``effective date'' unless
the person with whom such property is held or maintained had written
notice of the transfer or by any written evidence had recognized such
transfer prior to such ``effective date.''
(c) Unless otherwise provided, an appropriate license or other
authorization issued by or pursuant to the direction or authorization of
the Secretary of the Treasury before, during or after a transfer shall
validate such transfer or render it enforceable to the same extent as it
would be valid or enforceable but for the provisions of section 5(b) of
the Trading With the Enemy Act, as amended, and this part and any
ruling, order, regulation, direction or instruction issued hereunder.
(d) Transfers of property which otherwise would be null and void, or
unenforceable by virtue of the provisions of this section shall not be
deemed to be null and void, or unenforceable pursuant to such
provisions, as to any person with whom such property was held or
maintained (and as to such person only) in cases in which such person is
able to establish each of the following:
(1) Such transfer did not represent a willful violation of the
provisions of this part by the person with whom such property was held
or maintained;
(2) The person with whom such property was held or maintained did
not have reasonable cause to know or suspect, in view of all the facts
and circumstances known or available to such person, that such transfer
required a license or authorization by or pursuant to the provisions of
this part and was not so licensed or authorized or if a license or
authorization did purport to cover the transfer, that such license or
authorization had been obtained by misrepresentation or the withholding
of material facts or was otherwise fraudulently obtained; and
(3) Promptly upon discovery that:
(i) Such transfer was in violation of the provisions of this part or
any regulation, ruling, instruction, license or other direction or
authorization thereunder, or
(ii) Such transfer was not licensed or authorized by the Secretary
of the Treasury, or
(iii) If a license did purport to cover the transfer, such license
had been obtained by misrepresentation or the withholding of material
facts or was otherwise fraudulently obtained;
the person with whom such property was held or maintained filed with the
Treasury Department, Washington, D.C., a report in triplicate setting
forth in full the circumstances relating to such transfer. The filing of
a report in accordance with the provisions of this paragraph shall not
be deemed to be compliance or evidence of compliance with paragraphs (d)
(1) and (2) of this section.
(e) Unless licensed or authorized by Sec. 515.504 or otherwise
licensed or authorized pursuant to this chapter any attachment,
judgment, decree, lien, execution, garnishment, or other judicial
process is null and void with respect to any property in which on or
since the ``effective date'' there existed the interest of a designated
foreign country or national thereof.
[[Page 68]]
(f) For the purpose of this section the term property includes gold,
silver, bullion, currency, coin, credit, securities (as that term is
defined in section 2(1) of the Securities Act of 1933, as amended),
bills of exchange, notes, drafts, acceptances, checks, letters of
credit, book credits, debts, claims, contracts, negotiable documents of
title, mortgages, liens, annuities, insurance policies, options and
futures in commodities, and evidences of any of the foregoing. The term
property shall not, except to the extent indicated, be deemed to include
chattels or real property.
[28 FR 6974, July 9, 1963, as amended at 28 FR 7941, Aug. 3, 1963]
Sec. 515.204 Importation of and dealings in certain merchandise.
(a) Except as specifically authorized by the Secretary of the
Treasury (or any person, agency, or instrumentality designated by him)
by means of regulations, rulings, instructions, licenses, or otherwise,
no person subject to the jurisdiction of the United States may purchase,
transport, import, or otherwise deal in or engage in any transaction
with respect to any merchandise outside the United States if such
merchandise:
(1) Is of Cuban origin; or
(2) Is or has been located in or transported from or through Cuba;
or
(3) Is made or derived in whole or in part of any article which is
the growth, produce or manufacture of Cuba.
(b) [Reserved]
Sec. 515.205 Holding of certain types of blocked property in interest
-bearing accounts.
(a) Except as provided by paragraphs (d), (e) and (f) of this
section, or as authorized by the Secretary of the Treasury or his
delegate by specific license, any person holding any property included
in paragraph (h) of this section is prohibited from holding,
withholding, using, transferring, engaging in any transactions
involving, or exercising any right, power, or privilege with respect to
any such property, unless it is held in an interest-bearing account in a
domestic bank.
(b) Any person presently holding property subject to the provisions
of paragraph (a) of this section which, as of the effective date of this
section, is not being held in accordance with the provisions of that
paragraph shall transfer such property to or hold such property or cause
such property to be held in an interest-bearing account in any domestic
bank within 30 days of the effective date of this section.
(c) Any person holding any checks or drafts subject to the
provisions of Sec. 515.201 is authorized and directed, wherever possible
consistent with state law (except as otherwise specifically provided in
paragraph (c)(3) of this section), to negotiate or present for
collection or payment such instruments and credit the proceeds to
interest-bearing accounts. Any transaction by any person incident to the
negotiation, processing. presentment, collection or payment of such
instruments and deposit of the proceeds into an interest-bearing account
is hereby authorized: Provided that:
(1) The transaction does not represent, directly or indirectly, a
transfer of the interest of a designated national to any other country
or person;
(2) The proceeds are held in a blocked account indicating the
designated national who is the payee or owner of the instrument; and,
(3) In the case of a blocked check or draft which has been purchased
by the maker/drawer from the drawee bank (e.g., cashier's check, money
order, or traveler's check) or which is drawn against a presently
existing account, such bank, on presentment of the instrument in
accordance with the provisions of this section, shall either:
(i) Pay the instrument (subject to paragraphs (c)(1) and (2) of this
section) or
(ii) Credit a blocked account on its books with the amount payable
on the instrument.
In either event, the blocked account shall be identified as resulting
from the proceeds of a blocked check or draft, and the identification
shall include a reference to the names of both the maker and payee of
the instrument.
(d) Property subject to the provisions of paragraph (a) or (b) of
this section, held by a person claiming a set-off against such property,
is exempt from the provisions of paragraphs (a), (b)
[[Page 69]]
and (c) of this section to the extent of the set-off: Provided however,
That interest shall be due from 30 days after the effective date of this
section if it should ultimately be determined that the claim to a set-
off is without merit.
(e) Property subject to the provisions of paragraphs (a) and (b) of
this section, held in a customer's account by a registered broker/dealer
in securities, may continue to be held for the customer by the broker/
dealer provided interest is credited to the account on any balance not
invested in securities in accordance with Sec. 515.513. The interest
paid on such accounts by a broker/dealer who does not elect to hold such
property for a customer's account in a domestic bank shall not be less
than the maximum rate payable on the shortest time deposit available in
any domestic bank in the jurisdiction in which the broker/dealer holds
the account.
(f) Property subject to the provisions of paragraphs (a) and (b) of
this section, held by a state agency charged with the custody of
abandoned or unclaimed property under Sec. 515.554 may continue to be
held by the agency provided interest is credited to the blocked account
in which the property is held by the agency, or the property is held by
the agency in a blocked account in a domestic bank. The interest
credited to such accounts by an agency which does not elect to hold such
property in a domestic bank shall not be less than the maximum rate
payable on the shortest time deposit available in any domestic bank in
the state.
(g) For purposes of this section, the term interest-bearing account
means a blocked account earning interest at no less than the maximum
rate payable on the shortest time deposit in the domestic bank where the
account is held: Provided however, That such an account may include six-
month Treasury bills or insured certificates, with a maturity not
exceeding six-months, appropriate to the amounts involved.
(h) The following types of property are subject to paragraphs (a)
and (b) of this section:
(1) Any currency, bank deposit and bank accounts subject to the
provisions of Sec. 515.201;
(2) Any property subject to the provisions of Sec. 515.201 which
consists, in whole or in part, of undisputed and either liquidated or
matured debts, claims, obligations or other evidence of indebtedness, to
the extent of any amount that is undisputed and liquidated or matured;
and
(3) Any proceeds resulting from the payment of an obligation under
paragraph (c) of this section.
(i) For purposes of this section, the term domestic bank includes
any FSLIC-insured institution (as defined in 12 CFR 561.1).
(j) For the purposes of this section the term person includes the
United States Government or any agency or instrumentality thereof,
except where the agency or instrumentality submits to the Office of
Foreign Assets Control an opinion of its General Counsel that either:
(1) It lacks statutory authority to comply with this section, or
(2) The requirements of paragraphs (a) and (b) of this section are
inconsistent with the statutory program under which it operates.
[44 FR 11770, Mar. 2, 1979]
Sec. 515.206 Exempt transactions.
(a) Information and informational materials. (1) The importation
from any country and the exportation to any country of information or
informational materials as defined in Sec. 515.332, whether commercial
or otherwise, regardless of format or medium of transmission, are exempt
from the prohibitions and regulations of this part except for payments
owed to Cuba for telecommunications services between Cuba and the United
States, which are subject to the provisions of Sec. 515.542.
(2) This section does not authorize transactions related to
information or informational materials not fully created and in
existence at the date of the transaction, or to the substantive or
artistic alteration or enhancement of information or informational
materials, or to the provision of marketing and business consulting
services by a person subject to the jurisdiction of the United States.
Such prohibited transactions include, without limitation, payment of
advances for information or informational materials not yet
[[Page 70]]
created and completed, provision of services to market, produce or co-
produce, create or assist in the creation of information or
informational materials, and payment of royalties to a designated
national with respect to income received for enhancements or alterations
made by persons subject to the jurisdiction of the United States to
information or informational materials imported from a designated
national.
(3) This section does not authorize transactions incident to the
transmission of restricted technical data as defined in the Export
Administration Regulations, 15 CFR parts 730-774, or to the exportation
of goods for use in the transmission of any data. The exportation of
such goods to designated foreign countries is prohibited, as provided in
Sec. 515.201 of this part and Sec. 785.1 of the Export Administration
Regulations.
(4) This section does not authorize transactions related to travel
to Cuba when such travel is not otherwise authorized under Sec. 515.545.
Note to paragraph (a): See Sec. 515.545 for general licenses
authorizing certain travel-related and other transactions that are
directly incident to the export, import, or transmission of
informational materials and certain transactions related to the
creation, dissemination, or artistic or other substantive alteration or
enhancement of informational materials.
(b) Donation of food. The prohibitions contained in this part do not
apply to transactions incident to the donation of food to
nongovernmental organizations or individuals in Cuba.
[54 FR 5233, Feb. 2, 1989, as amended at 60 FR 39256, Aug. 2, 1995; 64
FR 25812, May 13, 1999; 81 FR 4584, Jan. 27, 2016]
Sec. 515.207 Entry of vessels engaged in trade with Cuba.
Except as specifically authorized by the Secretary of the Treasury
(or any person, agency or instrumentality designated by him), by means
of regulations, rulings, instructions, licenses or otherwise,
(a) No vessel that enters a port or place in Cuba to engage in the
trade of goods or the purchase or provision of services, may enter a
U.S. port for the purpose of loading or unloading freight for a period
of 180 days from the date the vessel departed from a port or place in
Cuba; and
(b) No vessel carrying goods or passengers to or from Cuba or
carrying goods in which Cuba or a Cuban national has an interest may
enter a U.S. port with such goods or passengers on board.
Note to Sec. 515.207: For the waiver of the prohibitions contained
in this section for vessels engaged in certain trade and travel with
Cuba, see Sec. 515.550.
[58 FR 34710, June 29, 1993, as amended at 66 FR 36687, July 12, 2001;
80 FR 2292, Jan. 16, 2015; 80 FR 56918, Sept. 21, 2015]
Sec. 515.208 Restrictions on loans, credits and other financing.
No United States national, permanent resident alien, or United
States agency may knowingly make a loan, extend credit or provide other
financing for the purpose of financing transactions involving
confiscated property the claim to which is owned by a United States
national, except for financing by a United States national owning such a
claim for a transaction permitted under United States law.
[61 FR 37386, July 18, 1996]
Subpart C_General Definitions
Sec. 515.301 Foreign country.
The term foreign country also includes, but not by way of
limitation:
(a) The state and the government of any such territory on or after
the ``effective date'' as well as any political subdivision, agency, or
instrumentality thereof or any territory, dependency, colony,
protectorate, mandate, dominion, possession or place subject to the
jurisdiction thereof,
(b) Any other government (including any political subdivision,
agency, or instrumentality thereof) to the extent and only to the extent
that such government exercises or claims to exercise control, authority,
jurisdiction or sovereignty over territory which on the ``effective
date'' constituted such foreign country,
(c) Any person to the extent that such person is, or has been, or to
the extent that there is reasonable cause to believe that such person
is, or has been, since the ``effective date,'' acting
[[Page 71]]
or purporting to act directly or indirectly for the benefit or on behalf
of any of the foregoing, and
(d) Any territory which on or since the ``effective date'' is
controlled or occupied by the military, naval or police forces or other
authority of such foreign country.
Sec. 515.302 National.
(a) The term national when used with respect to a country shall
include:
(1) A subject or citizen of that country or any person who has been
domiciled in or a permanent resident of that country at any time on or
since the ``effective date,'' except persons who were permanent
residents of or domiciled in that country in the service of the U.S.
Government and persons whose transactions in that country were
authorized by the Office of Foreign Assets Control.
(2) Any partnership, association, corporation, or other organization
that, on or since the effective date:
(i) Was or has been organized under the laws of that country;
(ii) Had or has had its principal place of business in that country;
or
(iii) Was or has been controlled by, or a substantial part of the
stocks, share, bonds, debentures, notes, drafts, or other securities or
obligations of which was or has been controlled by, directly or
indirectly, that country and/or one or more nationals thereof.
(3) Any organization's office or other sub-unit that is located
within that country.
(4) Any person to the extent that such person, on or since the
``effective date'' was or has been acting or purporting to act directly
or indirectly for the benefit or on behalf of any national of that
country.
(5) Any other person who there is reasonable cause to believe is a
``national'' as defined in this section.
(b) Persons who travel in Cuba do not become nationals of Cuba
solely because of such travel.
(c) The Secretary of the Treasury retains full power to determine
that any person is or shall be deemed to be a ``national'' within the
meaning of this section, and to specify the foreign country of which
such person is or shall be deemed to be a national.
[28 FR 6974, July 9, 1963, as amended at 50 FR 27437, July 3, 1985; 64
FR 25812, May 13, 1999; 68 FR 14144, Mar. 24, 2003]
Sec. 515.303 Nationals of more than one foreign country.
(a) Any person who by virtue of any provision in this chapter is a
national of more than one foreign country shall be deemed to be a
national of each of such foreign countries.
(b) In any case in which a person is a national of two or more
designated foreign countries, as defined in this chapter, a license or
authorization with respect to nationals of one of such designated
foreign countries shall not be deemed to apply to such person unless a
license or authorization of equal or greater scope is outstanding with
respect to nationals of each other designated foreign country of which
such person is a national.
(c) In any case in which the combined interests of two or more
designated foreign countries, as defined in this chapter, and/or
nationals thereof are sufficient in the aggregate to constitute control
or ownership of 25 per centum or more of the stock, shares, bonds,
debentures, notes, drafts, or other securities or obligations of a
partnership, association, corporation or other organization, but such
control or a substantial part of such stock, shares, bonds, debentures,
notes, drafts, or other securities or obligations is not held by any one
such foreign country and/or national thereof, such partnership,
association, corporation or other organization shall be deemed to be a
national of each of such foreign countries.
Sec. 515.305 Designated national.
For the purposes of this part, the term designated national shall
mean Cuba and any national thereof including any person who is a
specially designated national.
Sec. 515.306 Specially designated national.
(a) The term specially designated national shall mean:
(1) Any person who is determined by the Secretary of the Treasury to
be a specially designated national,
[[Page 72]]
(2) Any person who on or since the ``effective date'' has acted for
or on behalf of the Government or authorities exercising control over a
designated foreign country, or
(3) Any partnership, association, corporation or other organization
which on or since the ``effective date'' has been owned or controlled
directly or indirectly by the Government or authorities exercising
control over a designated foreign country or by any specially designated
national.
(b) [Reserved]
Note to Sec. 515.306: Please refer to the Office of Foreign Assets
Control's Specially Designated Nationals and Blocked Persons List (``SDN
List'') for a non-exhaustive listing of persons determined to fall
within this definition, whose property and interests in property
therefore are blocked pursuant to this part. The SDN List entries for
such persons include the identifier ``[CUBA].'' The SDN List is
accessible through the following page on the Office of Foreign Assets
Control's Web site: http://www.treasury.gov/sdn. Additional information
pertaining to the SDN List can be found in appendix A to this chapter.
Section 501.807 of this chapter sets forth the procedures to be followed
by persons seeking administrative reconsideration of their designation
or that of a vessel as blocked, or who wish to assert that the
circumstances resulting in the designation are no longer applicable.
[28 FR 6974, July 9, 1963, as amended at 61 FR 32938, June 26, 1996; 62
FR 45106, Aug. 25, 1997; 76 FR 38585, June 30, 2011]
Sec. 515.307 Unblocked national.
Any person licensed pursuant to Sec. 515.505 as an unblocked
national shall, while so licensed, be regarded as a person who is not a
national of any designated foreign country.
[80 FR 2292, Jan. 16, 2015]
Sec. 515.308 Person.
The term person means an individual, partnership, association,
corporation, or other organization.
Sec. 515.309 Transactions.
The phrase transactions which involve property in which a designated
foreign country, or any national thereof, has any interest of any nature
whatsoever, direct or indirect, includes, but not by way of limitation:
(a) Any payment or transfer to such designated foreign country or
national thereof,
(b) Any export or withdrawal from the United States to such
designated foreign country, and
(c) Any transfer of credit, or payment of an obligation, expressed
in terms of the currency of such designated foreign country.
Sec. 515.310 Transfer.
The term transfer shall mean any actual or purported act or
transaction, whether or not evidenced by writing, and whether or not
done or preformed within the United States, the purpose, intent, or
effect of which is to create, surrender, release, transfer, or alter,
directly or indirectly, any right, remedy, power, privilege, or interest
with respect to any property and without limitation upon the foregoing
shall include the making, execution, or delivery of any assignment,
power, conveyance, check, declaration, deed, deed of trust, power of
attorney, power of appointment, bill of sale, mortgage, receipt,
agreement, contract, certificate, gift, sale, affidavit, or statement;
the appointment of any agent, trustee, or other fiduciary; the creation
or transfer of any lien; the issuance, docketing, filing, or the levy of
or under any judgment, decree, attachment, execution, or other judicial
or administrative process or order, or the service of any garnishment;
the acquisition of any interest of any nature whatsoever by reason of a
judgment or decree of any foreign country; the fulfillment of any
condition, or the exercise of any power of appointment, power of
attorney, or other power.
Sec. 515.311 Property; property interests.
(a) Except as defined in Sec. 515.203(f) for the purposes of that
section the terms property and property interest or property interests
shall include, but not by way of limitation, money, checks, drafts,
bullion, bank deposits, savings accounts, debts, indebtedness
obligations, notes, debentures, stocks, bonds, coupons, and other
financial securities, bankers' acceptances, mortgages, pledges, liens or
other rights in the nature of security, warehouse receipts, bills of
lading, trust receipts, bills of
[[Page 73]]
sale, any other evidences of title, ownership or indebtedness, powers of
attorney, goods, wares, merchandise, chattels, stocks on hand, ships,
goods on ships, real estate mortgages, deeds of trust, vendors' sales
agreements, land contracts, real estate and any interest therein,
leaseholds, ground rents, options, negotiable instruments, trade
acceptances, royalties, book accounts, accounts payable, judgments,
patents, trademarks, copyrights, contracts or licenses affecting or
involving patents, trademarks or copyrights, insurance policies, safe
deposit boxes and their contents, annuities, pooling agreements,
contracts of any nature whatsoever, services, and any other property,
real, personal, or mixed, tangible or intangible, or interest or
interests therein, present, future or contingent.
(b) As used in Sec. 515.208, the term property means any property
(including patents, copyrights, trademarks, and any other form of
intellectual property), whether real, personal, or mixed, and any
present, future, or contingent right, security, or other interest
therein, including any leasehold interest.
[28 FR 6974, July 9, 1963, as amended at 50 FR 27437, July 3, 1985; 56
FR 49847, Oct. 2, 1991; 61 FR 37386, July 18, 1996]
Sec. 515.312 Interest.
The term interest when used with respect to property shall mean an
interest of any nature whatsoever, direct or indirect.
Sec. 515.313 Property subject to the jurisdiction of the United States.
(a) The phrase property subject to the jurisdiction of the United
States includes, without limitation, securities, whether registered or
bearer, issued by:
(1) The United States or any State, district, territory, possession,
county, municipality, or any other subdivision or agency or
instrumentality of any thereof; or
(2) Any person with the United States whether the certificate which
evidences such property or interest is physically located within or
outside the United States.
(b) The phrase property subject to the jurisdiction of the United
States also includes, without limitation, securities, whether registered
or bearer, by whomsoever issued, if the instrument evidencing such
property or interest is physically located within the United States.
Sec. 515.314 Banking institution.
The term banking institution shall include any person engaged
primarily or incidentally in the business of banking, of granting or
transferring credits, or of purchasing or selling foreign exchange or
procuring purchases and sellers thereof, as principal or agent, or any
person holding credits for others as a direct or incidental part of his
business, or any broker; and, each principal, agent, home office, branch
or correspondent of any person so engaged shall be regarded as a
separate ``banking institution.''
Sec. 515.316 License.
Except as otherwise specified, the term license shall mean any
license or authorization contained in or issued pursuant to this part.
Sec. 515.317 General license.
A general license is any license or authorization the terms of which
are set forth in this part.
Sec. 515.318 Specific license.
A specific license is any license or authorization issued pursuant
to this part but not set forth in this part.
[28 FR 6974, July 9, 1963; 28 FR 7427, July 20, 1963]
Sec. 515.319 Blocked account.
The term blocked account shall mean an account in which any
designated national has an interest, with respect to which account
payments, transfers or withdrawals or other dealings may not be made or
effected except pursuant to an authorization or license authorizing such
action. The term blocked account shall not be deemed to include accounts
of unblocked nationals.
[28 FR 6974, July 9, 1963; 28 FR 7427, July 20, 1963]
Sec. 515.320 Domestic bank.
The term domestic bank shall mean any branch or office within the
United States of any of the following which is not a national of a
designated foreign
[[Page 74]]
country; any bank or trust company incorporated under the banking laws
of the United States or any State, territory, or district of the United
States, or any private bank or banker subject to supervision and
examination under the banking laws of the United States or of any State,
territory or district of the United States. The Secretary of the
Treasury may also authorize any other banking institution to be treated
as a ``domestic bank'' for the purpose of this definition or for the
purpose of any or all sections of this part.
Sec. 515.321 United States; continental United States.
The term United States means the United States and all areas under
the jurisdiction or authority thereof, including the Trust Territory of
the Pacific Islands. The term continental United States means the States
of the United States and the District of Columbia.
[49 FR 27144, July 2, 1984]
Sec. 515.322 Authorized trade territory; member of the authorized
trade territory.
(a) The term authorized trade territory includes all countries,
including any colony, territory, possession, or protectorate, except
those countries subject to sanctions pursuant to this chapter. The term
does not include the United States.
(b) The term member of the authorized trade territory shall mean any
of the foreign countries or political subdivisions comprising the
authorized trade territory.
[43 FR 51762, Nov. 7, 1978, as amended at 60 FR 54195, Oct. 20, 1995]
Sec. 515.323 Occupied area.
The term occupied area shall mean any territory occupied by a
designated foreign country which was not occupied by such country prior
to the ``effective date'' of this part.
Sec. 515.325 National securities exchange.
The term national securities exchange shall mean an exchange
registered as a national securities exchange under section 6 of the
Securities Exchange Act of 1934 (48 Stat. 885, 15 U.S.C. 78f).
Sec. 515.326 Custody of safe deposit boxes.
Safe deposit boxes shall be deemed to be in the custody not only of
all persons having access thereto but also of the lessors of such boxes
whether or not such lessors have access to such boxes. The foregoing
shall not in any way be regarded as a limitation upon the meaning of the
term custody.
Sec. 515.327 Blocked estate of a decedent.
The term blocked estate of a decedent shall mean any decedent's
estate in which a designated national has an interest. A person shall be
deemed to have an interest in a decedent's estate if he:
(a) Was the decedent;
(b) Is a personal representative; or
(c) Is a creditor, heir, legatee, devisee, distributee, or
beneficiary.
Sec. 515.329 Person subject to the jurisdiction of the United States;
person subject to U.S. jurisdiction.
The terms person subject to the jurisdiction of the United States
and person subject to U.S. jurisdiction include:
(a) Any individual, wherever located, who is a citizen or resident
of the United States;
(b) Any person within the United States as defined in Sec. 515.330;
(c) Any corporation, partnership, association, or other organization
organized under the laws of the United States or of any State,
territory, possession, or district of the United States; and
(d) Any corporation, partnership, association, or other
organization, wherever organized or doing business, that is owned or
controlled by persons specified in paragraphs (a) or (c) of this
section.
[50 FR 27437, July 3, 1985, as amended at 68 FR 14145, Mar. 24, 2003; 80
FR 2292, Jan. 16, 2015; 81 FR 13991, Mar. 16, 2016]
Sec. 515.330 Person within the United States.
(a) The term person within the United States, includes:
(1) Any person, wheresoever located, who is a resident of the United
States;
(2) Any person actually within the United States;
[[Page 75]]
(3) Any corporation, partnership, association, or other organization
organized under the laws of the United States or of any State,
territory, possession, or district of the United States; and
(4) Any corporation, partnership, association, or other
organization, wherever organized or doing business, which is owned or
controlled by any person or persons specified in paragraphs (a)(1) or
(a)(3) of this section.
(b) [Reserved]
[28 FR 6974, July 9, 1963, as amended at 68 FR 14145, Mar. 24, 2003]
Sec. 515.331 Merchandise.
The term merchandise means all goods, wares and chattels of every
description without limitation of any kind.
Sec. 515.332 Information and informational materials.
(a) For purposes of this part, the term information and
informational materials means:
(1) Publications, films, posters, phonograph records, photographs,
microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, news
wire feeds, and other information and informational articles.
(2) To be considered informational materials, artworks must be
classified under Chapter subheading 9701, 9702, or 9703 of the
Harmonized Tariff Schedule of the United States.
(b) The term information and informational materials does not
include items:
(1) That would be controlled for export pursuant to section 5 of the
Export Administration Act of 1979, 50 U.S.C. App. 2401-2420 (1993) (the
``EAA''), or section 6 of the EAA to the extent that such controls
promote nonproliferation of antiterrorism policies of the United States,
including ``software'' that is not ``publicly available'' as these terms
are defined in 15 CFR parts 779 and 799.1 (1994); or
(2) With respect to which acts are prohibited by 18 U.S.C. chapter
37.
[60 FR 39256, Aug. 2, 1995]
Sec. 515.333 Depository institution.
The term depository institution means any of the following:
(a) An insured bank as defined in section 3 of the Federal Deposit
Insurance Act;
(b) An insured institution as defined in section 408(a) of the
National Housing Act;
(c) An insured credit union as defined in section 101 of the Federal
Credit Union Act; or
(d) Any other institution that is carrying on banking activities
pursuant to a charter from a Federal or state banking authority.
[57 FR 53997, Nov. 16, 1992]
Sec. 515.334 United States national.
As used in Sec. 515.208, the term United States national means:
(a) Any United States citizen; or
(b) Any other legal entity which is organized under the laws of the
United States, or of any State, the District of Columbia, or any
commonwealth, territory, or possession of the United States, and which
has its principal place of business in the United States.
[61 FR 37386, July 18, 1996]
Sec. 515.335 Permanent resident alien.
As used in Sec. 515.208, the term permanent resident alien means an
alien lawfully admitted for permanent residence into the United States.
[61 FR 37386, July 18, 1996]
Sec. 515.336 Confiscated.
As used in Sec. 515.208, the term confiscated refers to:
(a) The nationalization, expropriation, or other seizure by the
Cuban Government of ownership or control of property, on or after
January 1, 1959:
(1) Without the property having been returned or adequate and
effective compensation provided; or
(2) Without the claim to the property having been settled pursuant
to an international claims settlement agreement or other mutually
accepted settlement procedure; and
(b) The repudiation by the Cuban Government of, the default by the
Cuban Government on, or the failure of the Cuban Government to pay, on
or after January 1, 1959:
[[Page 76]]
(1) A debt of any enterprise which has been nationalized,
expropriated, or otherwise taken by the Cuban Government;
(2) A debt which is a charge on property nationalized, expropriated,
or otherwise taken by the Cuban Government; or
(3) A debt which was incurred by the Cuban Government in
satisfaction or settlement of a confiscated property claim.
[61 FR 37386, July 18, 1996]
Sec. 515.337 Prohibited officials of the Government of Cuba.
For purposes of this part, the term prohibited officials of the
Government of Cuba means members of the Council of Ministers and flag
officers of the Revolutionary Armed Forces.
[81 FR 71374, Oct. 17, 2016]
Sec. 515.338 Prohibited members of the Cuban Communist Party.
For purposes of this part, the term prohibited members of the Cuban
Communist Party means members of the Politburo.
[81 FR 71374, Oct. 17, 2016]
Sec. 515.339 Close relative.
(a) For purposes of this part, the term close relative used with
respect to any person means any individual related to that person by
blood, marriage, or adoption who is no more than three generations
removed from that person or from a common ancestor with that person.
(b) Example. Your mother's first cousin is your close relative for
purposes of this part, because you are both no more than three
generations removed from your great-grandparents, who are the ancestors
you have in common. Similarly, your husband's great-grandson is your
close relative for purposes of this part, because he is no more than
three generations removed from your husband. Your daughter's father-in-
law is not your close relative for purposes of this part, because you
have no common ancestor.
[74 FR 46003, Sept. 8, 2009]
Subpart D_Interpretations
Sec. 515.401 Reference to amended sections.
Reference to any section of this part or to any regulation, ruling,
order, instruction, direction or license issued pursuant to this part
shall be deemed to refer to the same as currently amended unless
otherwise so specified.
Sec. 515.402 Effect of amendment of sections of this part or of
other orders, etc.
Any amendment, modification, or revocation of any section of this
part or of any order, regulation, ruling, instruction, or license issued
by or under the direction of the Secretary of the Treasury pursuant to
section 3(a) or 5(b) of the Trading With the Enemy Act, as amended, or
pursuant to Proclamation 3447, shall not unless otherwise specifically
provided be deemed to affect any act done or omitted to be done, or any
suit or proceeding had or commenced in any civil or criminal case, prior
to such amendment, modification, or revocation, and all penalties,
forfeitures, and liabilities under any such section, order, regulation,
ruling, instruction or license shall continue and may be enforced as if
such amendment, modification, or revocation had not been made.
Sec. 515.403 Termination and acquisition of the interest of
a designated national.
(a) Except as provided in Sec. 515.525, whenever a transaction
licensed or authorized by or pursuant to this part results in the
transfer of property (including any property interest) away from a
designated national, such property shall no longer be deemed to be
property in which a designated national has or has had an interest
unless there exists in such property an interest of a designated
national, the transfer of which has not been effected pursuant to
license or other authorization.
(b) Unless otherwise specifically provided in a license or
authorization contained in or issued pursuant to this part, if property
(including any property interest) is transferred to a designated
national such property shall be deemed to be property in which there
[[Page 77]]
exists the interest of a designated national.
Sec. 515.404 Transactions between principal and agent.
A transaction between any person within the United States and any
principal, agent, home office, branch, or correspondent, outside the
United States of such person is a transaction prohibited by Sec. 515.201
to the same extent as if the parties to the transaction were in no way
affiliated or associated with each other.
Sec. 515.405 Exportation of securities, currency, checks, drafts
and promissory notes.
Section 515.201 prohibits the exportation of securities, currency,
checks, drafts and promissory notes to a designated foreign country.
Sec. 515.406 Drafts under irrevocable letters of credit; documentary
drafts.
Section 515.201 prohibits the presentation, acceptance or payment
of:
(a) Drafts or other orders for payment drawn under irrevocable
letters of credit issued in favor or on behalf of any designated
national;
(b) Drafts or other orders for payment, in which any designated
national has on or since the ``effective date'' had any interest, drawn
under any irrevocable letter of credit; and
(c) Documentary drafts in which any designated national has on or
since the ``effective date'' had any interest.
Sec. 515.407 Administration of blocked estates of decedents.
With respect to transactions incident to the administration of the
blocked estate of a decedent, including the appointment and
qualification of personal representatives, the collection and
liquidation of assets, the payment of claims, and distribution to
beneficiaries, attention is directed to Sec. 515.523, which authorizes
all transactions incident to the administration and distribution of the
assets of blocked estates of decedents.
[80 FR 56919, Sept. 21, 2015]
Sec. 515.408 Access to certain safe deposit boxes prohibited.
Section 515.201 prohibits access to any safe deposit box within the
United States in the custody of any designated national or containing
any property in which any designated national has any interest or which
there is reasonable cause to believe contains property in which any such
designated national has any interest. Attention is directed to
Sec. 515.517 which authorizes access to such safe deposit boxes under
certain conditions.
Sec. 515.409 Certain payments to a designated foreign country and
nationals through third countries.
Section 515.201 prohibits any request or authorization made by or on
behalf of a bank or other person within the United States to a bank or
other person outside of the United States as a result of which request
or authorization such latter bank or person makes a payment or transfer
of credit either directly or indirectly to a designated national.
Sec. 515.410 Dealing abroad in Cuban-origin commodities.
Section 515.204 prohibits, unless licensed, the importation of
commodities of Cuban origin. It also prohibits, unless licensed, persons
subject to the jurisdiction of the United States from purchasing,
transporting or otherwise dealing in commodities of Cuban origin which
are outside the United States. Attention is directed to Sec. 515.585,
which authorizes certain dealings in commodities of Cuban origin outside
the United States.
[81 FR 13991, Mar. 16, 2016]
Secs. 515.411-515.413 [Reserved]
Sec. 515.415 Travel to Cuba; transportation of certain Cuban nationals.
(a) The following transactions are prohibited by Sec. 515.201 when
in connection with the transportation of any Cuban national, except a
Cuban national holding an unexpired immigrant or non-immigrant visa or a
returning resident of the United States, from Cuba to the United States,
unless otherwise licensed:
[[Page 78]]
(1) Transactions incident to travel to, from, or within Cuba;
(2) The transportation to Cuba of a vessel or aircraft;
(3) The transportation into the United States of any vessel or
aircraft which has been in Cuba since the effective date, regardless of
registry;
(4) The provision of any services to a Cuban national, regardless of
whether any consideration for such services is furnished by the Cuban
national;
(5) The transportation or importation of baggage or other property
of a Cuban national;
(6) The transfer of funds or other property to any person where such
transfer involves the provision of services to a Cuban national or the
transportation or importation of, or any transactions involving,
property in which Cuba or any Cuban national has any interest, including
baggage or other such property;
(7) Any other transaction such as payment of port fees and charges
in Cuba and payment for fuel, meals, lodging; and
(8) The receipt or acceptance of any gratuity, grant, or support in
the form of meals, lodging, fuel, payments of travel or maintenance
expenses, or otherwise, in connection with travel to or from Cuba or
travel or maintenance within Cuba.
(b) Transactions incident to the travel to the United States of
Cuban nationals who are traveling other than in a non-immigrant status
or pursuant to other non-immigrant travel authorization issued by the
U.S. government are not authorized under the provisions of Sec. 515.571.
(c) Transactions described in paragraph (a) of this section are not
``transactions ordinarily incident to travel to and from Cuba'' as set
forth in Sec. 515.560(c).
[45 FR 32671, May 19, 1980, as amended at 64 FR 25812, May 13, 1999; 80
FR 56919, Sept. 21, 2015]
Secs. 515.416-515.419 [Reserved]
Sec. 515.420 Travel to Cuba.
The prohibition on dealing in property in which Cuba or a Cuban
national has an interest set forth in Sec. 515.201(b)(1) includes a
prohibition on the receipt of goods or services in Cuba, even if
provided free-of-charge by the Government of Cuba or a national of Cuba
or paid for by a third-country national who is not subject to U.S.
jurisdiction. The prohibition set forth in Sec. 515.201(b)(1) also
prohibits payment for air travel by a person subject to U.S.
jurisdiction to Cuba on a third-country carrier unless the travel is
pursuant to an OFAC general or specific license.
[69 FR 33771, June 16, 2004, as amended at 81 FR 71374, Oct. 17, 2016]
Sec. 515.421 Transactions ordinarily incident to a licensed transaction.
(a) Any transaction ordinarily incident to a licensed transaction
and necessary to give effect thereto is also authorized, except:
(1) A transaction by or with a prohibited official of the Government
of Cuba, as defined in Sec. 515.337, or a prohibited member of the Cuban
Communist Party, as defined in Sec. 515.338, where the terms of the
applicable general or specific license expressly exclude transactions
with such persons;
(2) A transaction involving a debit to a blocked account or a
transfer of blocked property that is not explicitly authorized within
the terms of the license;
(3) A transaction prohibited by Sec. 515.208; or
(4) In the case of export or reexport-related transactions
authorized by Sec. 515.533(a), payment or financing that is not
authorized by Sec. 515.533 or Sec. 515.584(f).
Note to paragraph (a)(4): See Sec. 515.533(a)(4) for payment and
financing terms for exportations or reexportations authorized pursuant
to Sec. 515.533.
(b) Examples. (1) A specific license authorizing a person to
complete a securities sale involving Cuban Company A, whose property and
interests in property are blocked pursuant to this part, also authorizes
other persons to engage in activities that are ordinarily incident and
necessary to complete the sale, including transactions by the buyer,
broker, transfer agents, and banks.
(2) A general license authorizing a person to import certain goods
from
[[Page 79]]
independent Cuban entrepreneurs also authorizes funds transfers or
payments that are ordinarily incident to the importation, including
payments made using online payment platforms.
[80 FR 56919, Sept. 21, 2015, as amended at 81 FR 4584, Jan. 27, 2016;
81 FR 71374, Oct. 17, 2016]
Subpart E_Licenses, Authorizations, and Statements of Licensing Policy
Sec. 515.501 General and specific licensing procedures.
For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part 501
of this chapter with respect to the prohibitions contained in this part
are considered actions taken pursuant to this part.
[68 FR 53657, Sept. 11, 2003]
Sec. 515.502 Effect of subsequent license or authorization.
(a) No license or other authorization contained in this part or
otherwise issued by or under the direction of the Secretary of the
Treasury pursuant to section 3(a) or 5(b) of the Trading With the Enemy
Act, as amended, or section 620(a), Pub. L. 87-195, or Proclamation
3447, shall be deemed to authorize or validate any transaction effected
prior to the issuance thereof, unless such license or other
authorization specifically so provides.
(b) No regulation, ruling, instruction, or license authorizes a
transaction prohibited under this part unless the regulation, ruling,
instruction, or license is issued by the Treasury Department and
specifically refers to this part.
[28 FR 6974, July 9, 1963, as amended at 80 FR 56919, Sept. 21, 2015]
Sec. 515.503 Exclusion from licenses and authorizations.
The Secretary of the Treasury reserves the right to exclude from the
operation of any license or from the privileges therein conferred or to
restrict the applicability thereof with respect to particular persons,
transactions or property or classes thereof. Such action shall be
binding upon all persons receiving actual notice or constructive notice
thereof.
Sec. 515.504 Certain judicial proceedings with respect to property
of designated nationals.
(a) Subject to the limitations of paragraphs (b), (c) and (d) of
this section judicial proceedings are authorized with respect to
property in which on or since the ``effective date'' there has existed
the interest of a designated national.
(b) A judicial proceeding is authorized by this section only if it
is based upon a cause of action which accrued prior to the ``effective
date''.
(c) This section does not authorize or license:
(1) The entry of any judgment or of any decree or order of similar
or analogous effect upon any judgment book, minute book, journal or
otherwise, or the docketing of any judgment in any docket book, or the
filing of any judgment roll or the taking of any other similar or
analogous action.
(2) Any payment or delivery out of a blocked account based upon a
judicial proceeding nor does it authorize the enforcement or carrying
out of any judgment or decree or order of similar or analogous effect
with regard to any property in which a designated national has an
interest.
(d) If a judicial proceeding relates to property in which there
exists the interest of any designated national other than a person who
would not have been a designated national except for his relationship to
an occupied area, such proceeding is authorized only if it is based upon
a claim in which no person other than any of the following has had an
interest since the ``effective date'':
(1) A citizen of the United States;
(2) A corporation organized under the laws of the United States or
any State, territory or possession thereof, or the District of Columbia;
(3) A natural person who is and has been since the ``effective
date'' a resident of the United States and who has not been a specially
designated national;
(4) A legal representative (whether or not appointed by a court of
the United States) or successor in interest by inheritance, device,
bequest, or operation
[[Page 80]]
of law, who falls within any of the categories specified in paragraphs
(a) (1), (2), and (3) of this section but only to the same extent that
their principals or predecessors would be qualified by such paragraphs.
Sec. 515.505 Certain Cuban nationals unblocked.
(a) General license unblocking certain persons. The following
persons are licensed as unblocked nationals, as that term is defined in
Sec. 515.307 of this part:
(1) Any individual national of Cuba who:
(i) Has taken up residence in the United States; and
(ii) Is a United States citizen; is a lawful permanent resident
alien of the United States; has applied to become a lawful permanent
resident alien of the United States and has an adjustment of status
application pending; or is lawfully present and intending to lawfully
remain in the United States on a permanent basis; and
(iii) Is not a prohibited official of the Government of Cuba, as
defined in Sec. 515.337 of this part, or a prohibited member of the
Cuban Communist Party, as defined in Sec. 515.338 of this part.
(2) Any individual national of Cuba who has taken up permanent
residence outside of Cuba, provided that the required documentation
specified in paragraph (c) of this section is obtained and the
individual is not a prohibited official of the Government of Cuba, as
defined in Sec. 515.337, or a prohibited member of the Cuban Communist
Party, as defined in Sec. 515.338;
(3) Any entity that otherwise would be a national of Cuba solely
because of the interest therein of one or more persons licensed in this
paragraph (a) as an unblocked national;
(4) Any entity, office, or other sub-unit authorized pursuant to
Sec. 515.573; and
(5) Any individual authorized to establish domicile in Cuba pursuant
to Sec. 515.573(a)(4).
Note to Sec. 515.505(a): An individual unblocked pursuant to this
paragraph does not become blocked again merely by leaving the United
States or the country in which he or she has taken up permanent
residence. An individual unblocked national remains unblocked unless and
until the individual thereafter becomes domiciled in or a permanent
resident of Cuba.
(b) General license unblocking blocked accounts. Banking
institutions, as defined in Sec. 515.314, including U.S. registered
brokers or dealers in securities and U.S. registered money transmitters,
are authorized to unblock any blocked account, as defined in
Sec. 515.319, that had been previously blocked solely because of the
interest therein of one or more persons licensed in paragraph (a) of
this section as unblocked nationals.
(c) Required documentation. In determining whether an individual
national of Cuba qualifies as an unblocked national under paragraph
(a)(2) of this section, persons subject to U.S. jurisdiction must obtain
evidence demonstrating that the individual satisfies the requirements of
that paragraph. Such evidence may include copies of documents issued by
government authorities demonstrating citizenship or lawful permanent
residence in a third country. These could include, depending on the
information provided in the document in question, a passport, voter
registration card, permanent resident alien card, national identity
card, or other similar documents. Where such documents are unavailable,
persons subject to U.S. jurisdiction may also rely on evidence that the
individual has been resident for the past two years without interruption
in a single country outside of Cuba, or a sworn statement or other
evidence that the individual does not intend to, or would not be welcome
to, return to Cuba.
(d) For the purposes of paragraph (a)(1) of this section, the term
``lawfully present and intending to lawfully remain in the United States
on a permanent basis'' includes an individual with a pending application
for asylum or who has been paroled into the United States under Cuban
Parole or Cuban Medical designations. It does not include anyone present
in the United States in a non-immigrant status.
Note to Sec. 515.505: See Sec. 515.571 for the authorization of
certain limited transactions incident to travel to, from, and within the
United States by Cuban nationals who are
[[Page 81]]
present in the United States in a non-immigrant status or pursuant to
other non-immigrant travel authorization issued by the U.S. government.
[80 FR 2292, Jan. 16, 2015, as amended at 80 FR 56919, Sept. 21, 2015;
81 FR 13991, Mar. 16, 2016]
Secs. 515.506-515.507 [Reserved]
Sec. 515.508 Payments to blocked accounts in domestic banks.
(a) Any payment or transfer of credit to a blocked account in a
domestic bank in the name of any designated national is hereby
authorized providing such payment or transfer shall not be made from any
blocked account if such payment or transfer represents, directly or
indirectly, a transfer of the interest of a designated national to any
other country or person.
(b) This section does not authorize:
(1) Any payment or transfer to any blocked account held in a name
other than that of the designated national who is the ultimate
beneficiary of such payment or transfer; or
(2) Any foreign exchange transaction including, but not by way of
limitation, any transfer of credit, or payment of an obligation,
expressed in terms of the currency of any foreign country.
(c) This section does not authorize any payment or transfer of
credit comprising an integral part of a transaction which cannot be
effected without the subsequent issuance of a further license.
(d) This section does not authorize the crediting of the proceeds of
the sale of securities held in a blocked account or a subaccount
thereof, or the income derived from such securities to a blocked account
or subaccount under any name or designation which differs from the name
or designation of the specific blocked account or subaccount in which
such securities were held.
(e) This section does not authorize any payment or transfer from a
blocked account in a domestic bank to a blocked account held under any
name or designation which differs from the name or designation of the
blocked account from which the payment or transfer is made.
Note to Sec. 515.508: Please refer to Sec. 501.603 of this chapter
for mandatory reporting requirements regarding financial transfers.
[32 FR 10846, July 25, 1967, as amended at 58 FR 47645, Sept. 10, 1993;
62 FR 45106, Aug. 25, 1997]
Sec. 515.509 Entries in certain accounts for normal service charges.
(a) Any banking institution within the United States is hereby
authorized to:
(1) Debit any blocked account with such banking institution (or with
another office within the United States of such banking institution) in
payment or reimbursement for normal service charges owed to such banking
institution by the owner of such blocked account.
(2) Make book entries against any foreign currency account
maintained by it with a banking institution in a designated foreign
country for the purpose of responding to debits to such account for
normal service charges in connection therewith.
(b) As used in this section, the term normal service charge shall
include charges in payment or reimbursement for interest due; cable,
telegraph, or telephone charges; postage costs; custody fees; small
adjustment charges to correct bookkeeping errors; and, but not by way of
limitation, minimum balance charges, account carrying charges, notary
and protest fees, and charges for reference books, photostats, credit
reports, transcripts of statements, registered mail insurance,
stationery and supplies, check books, and other similar items.
Sec. 515.510 Payments to the United States, States and political
subdivisions.
(a) The payment from any blocked account to the United States or any
agency or instrumentality thereof or to any State, territory, district,
county, municipality or other political subdivision in the United
States, of customs duties, taxes, and fees payable thereto by the owner
of such blocked account is hereby authorized.
(b) This section also authorizes transactions incident to the
payment of customs duties, taxes, and fees from blocked accounts, such
as the levying
[[Page 82]]
of assessments, the creation and enforcement of liens, and the sale of
blocked property in satisfaction of liens for customs duties, taxes, and
fees.
Sec. 515.511 Transactions by certain business enterprises.
(a) Except as provided in paragraphs (b), (c) and (d) of this
section any partnership, association, corporation or other organization
which on the ``effective date'' was actually engaged in a commercial,
banking or financial business within the United States and which is a
national of a designated foreign country, is hereby authorized to engage
in all transactions ordinarily incidental to the normal conduct of its
business activities within the United States.
(b) This section does not authorize any transaction which would
require a license if such organization were not a national of a
designated foreign country.
(c) This section does not authorize any transaction by a specially
designated national.
(d) Any organization engaging in business pursuant to this section
shall not engage in any transaction, pursuant to this section or any
other license or authorization contained in this part, which, directly
or indirectly, substantially diminishes or imperils the assets of such
organization or otherwise prejudicially affects the financial position
of such organization.
(e) No dealings with regard to any account shall be evidence that
any person having an interest therein is actually engaged in commercial,
banking or financial business within the United States.
Sec. 515.512 Provision of certain legal services authorized.
(a) The provision of the following legal services to or on behalf of
Cuba or a Cuban national is authorized, provided that receipt of payment
of professional fees and reimbursement of incurred expenses must be
authorized by or pursuant to paragraph (d) or (e) of this section, or
otherwise authorized pursuant to this part:
(1) Provision of legal advice and counseling on the requirements of
and compliance with the laws of the United States or any jurisdiction
within the United States, provided that such advice and counseling are
not provided to facilitate transactions in violation of this part;
(2) Representation of persons named as defendants in or otherwise
made parties to legal, arbitration, or administrative proceedings before
any U.S. federal, state, or local court or agency;
(3) Initiation and conduct of legal, arbitration, or administrative
proceedings before any U.S. federal, state, or local court or agency;
(4) Representation of persons before any U.S. federal, state, or
local court or agency with respect to the imposition, administration, or
enforcement of U.S. sanctions against such persons; and
(5) Provision of legal services in any other context in which
prevailing U.S. law requires access to legal counsel at public expense.
(b) The provision of any other legal services to Cuba or a Cuban
national, not otherwise authorized in this part, requires the issuance
of a specific license.
(c) Entry into a settlement agreement or the enforcement of any
lien, judgment, arbitral award, decree, or other order through
execution, garnishment, or other judicial process purporting to transfer
or otherwise alter or affect property in which Cuba or a Cuban national
has had an interest at any time on or since 12:01 a.m., Eastern Standard
Time, July 8, 1963, is prohibited unless licensed pursuant to this part.
(d) Receipts of payment--(1) Legal services to or on behalf of
certain blocked persons. All receipts of payment of professional fees
and reimbursement of incurred expenses for the provision of legal
services authorized pursuant to paragraph (a) of this section to or on
behalf of a prohibited official of the Government of Cuba, as defined in
Sec. 515.337, or a prohibited member of the Cuban Communist Party, as
defined in Sec. 515.338, must be specifically licensed or otherwise
authorized pursuant to Sec. 515.512(e), which authorizes certain
payments from funds originating outside the United States.
[[Page 83]]
(2) Legal services to or on behalf of all others. All receipts of
payment of professional fees and reimbursement of incurred expenses for
the provision of legal services authorized pursuant to paragraph (a) of
this section to or on behalf of Cuba or a Cuban national, other than
those described in paragraph (d)(1) of this section, are authorized,
except that nothing in this section authorizes the debiting of any
blocked account or the transfer of any blocked property.
(e) Payments for legal services from funds originating outside the
United States authorized. Receipts of payment of professional fees and
reimbursement of incurred expenses for the provision of legal services
authorized pursuant to Sec. 515.512(a) to or on behalf of a prohibited
official of the Government of Cuba, as defined in Sec. 515.337, or a
prohibited member of the Cuban Communist Party, as defined in
Sec. 515.338, are authorized from funds originating outside the United
States, provided that:
(1) The funds received by persons subject to U.S. jurisdiction as
payment of professional fees and reimbursement of incurred expenses for
the provision of legal services authorized pursuant to paragraph (a) of
this section do not originate from:
(i) A source within the United States;
(ii) Any source, wherever located, within the possession or control
of a person subject to U.S. jurisdiction; or
(iii) Any person, other than the person on whose behalf the legal
services authorized pursuant to paragraph (a) of this section are to be
provided, whose property and interests in property are blocked pursuant
to any part of this chapter other than part 515.
(2) Reports. (i) Persons subject to U.S. jurisdiction who receive
payments in connection with legal services authorized pursuant to
paragraph (a) of this section must submit annual reports no later than
30 days following the end of the calendar year during which the payments
were received providing information on the funds received. Such reports
shall specify:
(A) The individual or entity from whom the funds originated and the
amount of funds received; and
(B) If applicable:
(1) The names of any individuals or entities providing related
services to the person subject to U.S. jurisdiction receiving payment in
connection with authorized legal services, such as private investigators
or expert witnesses;
(2) A general description of the services provided; and
(3) The amount of funds paid in connection with such services.
(ii) The reports, which must reference this section, are to be
mailed to: Department of the Treasury, Office of Foreign Assets Control,
Attn: Licensing Division, 1500 Pennsylvania Avenue NW., Annex,
Washington, DC 20220.
Note 1 to Sec. 515.512: Persons subject to U.S. jurisdiction who
receive payments in connection with legal services authorized pursuant
to Sec. 515.512(a) do not need to obtain specific authorization to
contract for related services that are ordinarily incident to the
provision of those legal services, such as those provided by private
investigators or expert witnesses, or to pay for such services. This
does not authorize the hiring of Cuban nationals. Additionally, persons
subject to U.S. jurisdiction do not need to obtain specific
authorization to provide related services that are ordinarily incident
to the provision of legal services authorized pursuant to
Sec. 515.512(a).
Note 2 to Sec. 515.512: See Secs. 515.527 and 515.528 for general
licenses authorizing fees due to attorneys in connection with certain
intellectual property-related transactions. See Sec. 515.588 for a
general license authorizing the receipt of, and payment for, certain
legal services from Cuba or a Cuban national.
[80 FR 56919, Sept. 21, 2015]
Sec. 515.513 Purchase and sale of certain securities.
(a) The bona fide purchase and sale of securities on a national
securities exchange by banking institutions within the United States for
the account, and pursuant to the authorization, of nationals of a
designated foreign country and the making and receipt of payments,
transfers of credit, and transfers of such securities which are
necessary incidents of any such purchase or sale are hereby authorized
provided the following terms and conditions are complied with:
(1) In the case of the purchase of securities, the securities
purchased shall be held in an account in a banking institution within
the United States in
[[Page 84]]
the name of the national whose account was debited to purchase such
securities; and
(2) In the case of the sale of securities, the proceeds of the sale
shall be credited to an account in the name of the national for whose
account the sale was made and in the banking institution within the
United States which held the securities for such national.
(b) This section does not authorize the crediting of the proceeds of
the sale of securities held in a blocked account or a subaccount
thereof, to a blocked account or subaccount under any name or
designation which differs from the name or designation of the specific
blocked account or subaccount in which such securities were held.
(c) Securities issued or guaranteed by the Government of the United
States or any State, territory, district, county, municipality, or other
political subdivision thereof (including agencies and instrumentalities
of the foregoing) need not be purchased or sold on a national securities
exchange, but purchases or sales of such securities shall be made at
market value and pursuant to all other terms and conditions prescribed
in this section.
Sec. 515.514 Payment of dividends and interest on and redemption
and collection of securities.
(a) The payment to, and receipt by, a banking institution within the
United States of funds or other property representing dividends or
interest on securities held by such banking institution in a blocked
account is hereby authorized provided the funds or other property are
credited to or deposited in a blocked account in such banking
institution in the name of the national for whose account the securities
were held. Notwithstanding Sec. 515.202, this paragraph authorizes the
foregoing transactions although such securities are registered or
inscribed in the name of any designated national and although the
national in whose name the securities are registered or inscribed may
not be the owner of such blocked account.
(b) The payment to, and receipt by, a banking institution within the
United States of funds payable in respect of securities (including
coupons) presented by such banking institution to the proper paying
agents within the United States for redemption or collection for the
account and pursuant to the authorization of nationals of a designated
country is hereby authorized provided the proceeds of the redemption or
collection are credited to a blocked account in such banking institution
in the name of the national for whose account the redemption or
collection was made.
(c) The performance of such other acts, and the effecting of such
other transactions, as may be necessarily incident to any of the
foregoing, are also hereby authorized.
(d) This section does not authorize the crediting of the proceeds of
the redemption or collection of securities (including coupons) held in a
blocked account or a subaccount thereof, or the income derived from such
securities to a blocked account or subaccount under any name or
designation which differs from the name or designation of the specific
blocked account or subaccount in which such securities were held.
(e) This section does not authorize any issuer or other obligor,
with respect to a security, who is a designated national, to make any
payment, transfer or withdrawal.
Sec. 515.515 Transfers of securities to blocked accounts in domestic
banks.
(a) Transactions ordinarily incident to the transfer of securities
from a blocked account in the name of any person to a blocked account in
the same name in a domestic bank are hereby authorized provided such
securities shall not be transferred from any blocked account if such
transfer represents, directly or indirectly, a transfer of the interest
of a designated national to any other country or person.
(b) This section does not authorize the transfer of securities held
in a blocked account or subaccount thereof to a blocked account or
subaccount under any name or designation which differs from the name or
designation of the specific blocked account or subaccount in which such
securities were held.
[32 FR 10847, July 25, 1967]
[[Page 85]]
Sec. 515.516 Voting and soliciting of proxies on securities.
Notwithstanding Sec. 515.202, the voting and the soliciting of
proxies or other authorizations is authorized with respect to the voting
of securities issued by a corporation organized under the laws of the
United States or of any State, territory, or district thereof, in which
a designated national has any interest.
Sec. 515.517 Access to safe deposit boxes under certain conditions.
(a) Access to any safe deposit box leased to a designated national
or containing property in which any designated national has an interest,
and the deposit therein or removal therefrom of any property is hereby
authorized, provided the following terms and conditions are complied
with:
(1) Access shall be permitted only in the presence of an authorized
representative of the lessor of such box; and
(2) In the event that any property in which any designated national
has any interest is to be removed from such box, access shall be
permitted only in the presence of an authorized representative of a
banking institution within the United States, which may be the lessor of
such box, which shall receive such property into its custody immediately
upon removal from such box and which shall hold the same in a blocked
account under an appropriate designation indicating the interest therein
of designated nationals.
(b) The terms and conditions set forth in paragraph (a) of this
section shall not apply to access granted to a representative of the
Office of Alien Property pursuant to any rule, regulation or order of
such Office.
Sec. 515.518 [Reserved]
Sec. 515.519 Limited payments from accounts of United States
citizens abroad.
(a) Payments and transfers of credit from blocked accounts for
expenditures within the United States or the authorized trade territory
of any citizens of the United States who are within any foreign country
are hereby authorized provided the following terms and conditions are
complied with:
(1) Such payments and transfers shall be made only from blocked
accounts in the name, or in which the beneficial interest is held by,
such citizen or his family; and
(2) The total of all such payments and transfers made under this
section shall not exceed $1,000 in any one calendar month for any such
citizen or his family.
(b) This section does not authorize any remittance to a designated
foreign country or, any payment, transfer, or withdrawal which could not
be effected without a license by a person within the United States who
is not a national of a designated foreign country.
[28 FR 6974, July 9, 1963, as amended at 49 FR 27144, July 2, 1984]
Sec. 515.520 Payments from accounts of United States citizens
in employ of United States in foreign countries and certain other
persons.
(a) Banking institutions within the United States are hereby
authorized to make all payments, transfers and withdrawals from accounts
in the name of citizens of the United States while such citizens are
within any foreign country in the course of their employment by the
Government of the United States.
(b) Banking institutions within the United States are also hereby
authorized to make all payments, transfers and withdrawals from accounts
in the name of members of the armed forces of the United States and of
citizens of the United States accompanying such armed forces in the
course of their employment by any organization acting on behalf of the
Government of the United States while such persons are within any
foreign country.
(c) This section is deemed to apply to the accounts of members of
the armed forces of the United States and of citizens of the United
States accompanying such armed forces in the course of their employment
by the Government of the United States or by any organization acting on
its behalf even though they are captured or reported missing.
[[Page 86]]
Sec. 515.521 U.S. assets of certain Cuban corporations.
(a) Specific licenses may be issued unblocking the net pro rata
shares of individuals who are permanent residents of the United States
or the authorized trade territory, and who are not specially designated
nationals, in U.S.-located assets of corporations formed under the laws
of Cuba, after deducting the total debt due creditors for claims that
accrued prior to the effective date, in cases where all of the following
conditions are met:
(1) The assets were owned by, or accrued to, the corporation before
the effective date of the regulations;
(2) The corporation did not carry on substantial business in Cuba
under the management or control of the applicant(s) after the effective
date;
(3) In cases where the blocked assets purportedly have been
nationalized by Cuba, compensation has not been paid to the
applicant(s).
(b) Applications for specific licenses under this section must
include all of the following information:
(1) A detailed description of the corporation, its by-laws,
activities, distribution of shares, and its current status;
(2) Proof of the permanent residence of the applicant(s) in the
United States or the authorized trade territory;
(3) A list of all officers, directors and shareholders of the
corporation, giving the citizenship and the residence of each person as
of the date of the application;
(4) A detailed description of all of the assets of the corporation,
wherever located, including a statement of all known encumbrances or
claims against them; and
(5) Detailed information regarding the status of all debts and other
obligations of the corporation, specifying the citizenship and residence
of each creditor on the effective date and on the date of the
application.
[50 FR 33720, Aug. 21, 1985. Redesignated at 64 FR 25813, May 13, 1999]
Sec. 515.522 [Reserved]
Sec. 515.523 Transactions incident to the administration of decedents'
estates.
All transactions incident to the administration and distribution of
the assets of a blocked estate of a decedent are authorized. Such
transactions include the appointment and qualification of a personal
representative in the United States or Cuba, collection and preservation
of assets by a personal representative and associated fees, payment of
funeral expenses and expenses of the last illness, transfer of title,
and distribution of assets pursuant to a valid testamentary disposition
or intestate succession. All property distributed pursuant to this
section is unblocked, provided that neither Cuba nor a Cuban national
(other than the decedent or a person unblocked pursuant to Sec. 515.505)
has an interest in the property.
Note to Sec. 515.523: See Sec. 515.570(f)(1) for a general license
authorizing funds deposited in a blocked bank account in a banking
institution, as defined in Sec. 515.314, as a result of certain
administration of decedents' estates to be remitted to a national of
Cuba.
[80 FR 56920, Sept. 21, 2015]
Sec. 515.524 Payment from, and transactions in the administration
of certain trusts and estates.
(a) Any bank or trust company incorporated under the laws of the
United States, or of any State, territory, possession, or district of
the United States, or any private bank subject to supervision and
examination under the banking laws of any State of the United States,
acting as trustee of a trust created by gift, donation, or bequest and
administered in the United States, in which one or more persons who are
designated nationals have an interest, beneficial or otherwise, or are
co-trustees, is hereby authorized to engage in the following
transactions:
(1) Payments of distributive shares of principal or income to all
persons legally entitled thereto.
(2) Other transactions arising in the administration of such trust
which might be engaged in if no Cuban national were a beneficiary or co-
trustee of such trust.
[[Page 87]]
(b) This section does not authorize a trustee to engage in any other
transaction at the request, or upon the instructions, of any beneficiary
or co-trustee of such trust or other person who is a Cuban national.
Note to paragraph (b): See Sec. 515.523 for a general license
authorizing transactions incident to the administration of decedents'
estates. See Sec. 515.570(f)(1) for a general license authorizing funds
deposited in a blocked bank account in a banking institution as a result
of certain administration of decedents' estates to be remitted to a
national of Cuba.
(c) The application of this section to trusts is limited to trusts
established by gift, donation, or bequest from individuals or entities
to benefit specific heirs, charitable causes, and similar beneficiaries.
This section does not apply to trusts established for business or
commercial purposes, such as sinking funds established by an issuer of
securities in order to secure payment of interest or principal due on
such securities.
[28 FR 6974, July 9, 1963, as amended at 49 FR 27144, July 2, 1984; 54
FR 5234, Feb. 2, 1989; 80 FR 56920, Sept. 21, 2015]
Sec. 515.525 Certain transfers as a consequence of the existence
or change of marital status authorized.
Any transfer of any dower, curtesy, community property, or other
interest of any nature whatsoever, provided that such transfer arises
solely as a consequence of the existence or change of marital status, is
authorized.
[80 FR 56920, Sept. 21, 2015]
Sec. 515.526 Transactions involving blocked life insurance policies.
(a) The following transactions are hereby authorized:
(1) The payment of premiums and interest on policy loans with
respect to any blocked life insurance policy;
(2) The issuance, servicing or transfer of any blocked life
insurance policy in which the only blocked interest is that of one or
more of the following:
(i) A member of the armed forces of the United States or a person
accompanying such forces (including personnel of the American Red Cross,
and similar organizations);
(ii) An officer or employee of the United States; or
(iii) A citizen of the United States resident in a designated
foreign country; and
(3) The issuance, servicing or transfer of any blocked life
insurance policy in which the only blocked interest (other than that of
a person specified in paragraph (a)(2) of this section) is that of a
beneficiary.
(b) Paragraph (a) of this section does not authorize:
(1) Any payment to the insurer from any blocked account except a
blocked account of the insured or beneficiary, or
(2) Any payment by the insurer to a national of a designated foreign
country unless payment is made by deposit in a blocked account in a
domestic bank in the name of the national who is the ultimate
beneficiary thereof.
(c) The application, in accordance with the provisions of the policy
or the established practice of the insurer of the dividends, cash
surrender value, or loan value, of any blocked life insurance policy is
also hereby authorized for the purpose of:
(1) Paying premiums;
(2) Paying policy loans and interest thereon;
(3) Establishing paid-up insurance; or
(4) Accumulating such dividends or values to the credit of the
policy on the books of the insurer.
(d) As used in this section:
(1) The term blocked life insurance policy shall mean any life
insurance policy or annuity contract, or contract supplementary thereto,
in which there is a blocked interest.
(2) Any interest of a national of a designated foreign country shall
be deemed to be a ``blocked interest.''
(3) The term servicing shall mean the following transactions with
respect to any blocked life insurance policy:
(i) The payment of premiums, the payment of loan interest, and the
repayment of policy loans;
(ii) The effecting by a life insurance company or other insurer of
loans to an insured;
(iii) The effecting on behalf of an insured or surrenders,
conversions, modifications, and reinstatements; and
[[Page 88]]
(iv) The exercise or election by an insured of nonforfeiture
options, optional modes of settlement, optional disposition of
dividends, and other policy options and privileges not involving payment
by the insurer.
(4) The term transfer shall mean the change of beneficiary, or the
assignment or pledge of the interest of an insured in any blocked life
insurance policy subsequent to the issuance thereof.
(e) This section does not authorize any transaction with respect to
any blocked life insurance policy issued by a life insurance company or
other insurer which is a national of a designated foreign country or
which is not doing business or effecting insurance in the United States.
Sec. 515.527 Certain transactions with respect to United States
intellectual property.
(a)(1) Transactions related to the registration and renewal in the
United States Patent and Trademark Office or the United States Copyright
Office of patents, trademarks, and copyrights in which the Government of
Cuba or a Cuban national has an interest are authorized.
(2) No transaction or payment is authorized or approved pursuant to
paragraph (a)(1) of this section with respect to a mark, trade name, or
commercial name that is the same as or substantially similar to a mark,
trade name, or commercial name that was used in connection with a
business or assets that were confiscated, as that term is defined in
Sec. 515.336, unless the original owner of the mark, trade name, or
commercial name, or the bona fide successor-in-interest has expressly
consented.
(b) This section authorizes the payment from blocked accounts or
otherwise of fees currently due to the United States Government in
connection with any transaction authorized in paragraph (a) of this
section.
(c) This section further authorizes the payment from blocked
accounts or otherwise of the reasonable and customary fees and charges
currently due to attorneys or representatives within the United States
in connection with the transactions authorized in paragraph (a) of this
section.
[60 FR 54196, Oct. 20, 1995, as amended at 64 FR 25813, May 13, 1999]
Sec. 515.528 Certain transactions with respect to blocked foreign
intellectual property.
(a) The following transactions by any person who is not a designated
national are hereby authorized:
(1) The filing and prosecution of any application for a blocked
foreign patent, trademark or copyright, or for the renewal thereof;
(2) The receipt of any blocked foreign patent, trademark or
copyright;
(3) The filing and prosecution of opposition or infringement
proceedings with respect to any blocked foreign patent, trademark, or
copyright, and the prosecution of a defense to any such proceedings;
(4) The payment of fees currently due to the government of any
foreign country, either directly or through an attorney or
representative, in connection with any of the transactions authorized by
paragraphs (a) (1), (2), and (3) of this section or for the maintenance
of any blocked foreign patent, trademark or copyright; and
(5) The payment of reasonable and customary fees currently due to
attorneys or representatives in any foreign country incurred in
connection with any of the transactions authorized by paragraphs (a)
(1), (2), (3), or (4) of this section.
(b) Payments effected pursuant to the terms of paragraphs (a) (4)
and (5) of this section may not be made from any blocked account.
(c) As used in this section the term blocked foreign patent,
trademark, or copyright shall mean any patent, petty patent, design
patent, trademark or copyright issued by any foreign country in which a
designated foreign country or national thereof has an interest,
including any patent, petty patent, design patent, trademark, or
copyright issued by a designated foreign country.
[28 FR 6974, July 9, 1963, as amended at 60 FR 54196, Oct. 20, 1995]
Sec. 515.529 Powers of attorney.
(a) No power of attorney, whether granted before or after the
``effective
[[Page 89]]
date'' shall be invalid by reason of any of the provisions of this part
with respect to any transaction licensed by or pursuant to the
provisions of this part.
(b) This section does not authorize any transaction pursuant to a
power of attorney if such transaction is prohibited by Sec. 515.201 and
is not otherwise licensed or authorized by or pursuant to this part.
(c) This section does not authorize the creation of any power of
attorney in favor of any person outside of the United States or the
exportation from the United States of any power of attorney.
Sec. 515.530 Exportation of powers of attorney or instructions
relating to certain types of transactions.
(a) The exportation to any foreign country of powers of attorney or
other instruments executed or issued by any person within the United
States who is not a national of a designated foreign country, which are
limited to authorizations or instructions to effect transactions
incident to the following, are hereby authorized upon the condition
prescribed in paragraph (b) of this section:
(1) The representation of the interest of such person in a
decedent's estate which is being administered in a designated foreign
country and the collection of the distributive share of such person in
such estate;
(2) The maintenance, preservation, supervision or management of any
property located in a designated foreign country in which such person
has an interest; and
(3) The conveyance, transfer, release, sale or other disposition of
any property specified in paragraph (a)(1) of this section or any real
estate or tangible personal property if the value thereof does not
exceed the sum of $5,000 or its equivalent in foreign currency.
(b) No instrument which authorizes the conveyance, transfer,
release, sale or other disposition of any property may be exported under
this section unless it contains an express stipulation that such
authority may not be exercised if the value of such property exceeds the
sum of $5,000 or the equivalent thereof in foreign currency.
(c) As used in this section, the term tangible personal property
shall not include cash, bullion, deposits, credits, securities, patents,
trademarks, or copyrights.
Sec. 515.532 Completion of certain securities transactions.
(a) Banking institutions within the United States are hereby
authorized to complete, on or before July 12, 1963 purchases and sales
made prior to the ``effective date'' of securities purchased or sold for
the account of a designated foreign country or any designated national
thereof provided the following terms and conditions are complied with,
respectively:
(1) The proceeds of such sale are credited to a blocked account in a
banking institution in the name of the person for whose account the sale
was made; and
(2) The securities so purchased are held in a blocked account in a
banking institution in the name of the person for whose account the
purchase was made.
(b) This section does not authorize the crediting of the proceeds of
the sale of securities held in a blocked account or a subaccount
thereof, to a blocked account or subaccount under any name or
designation which differs from the name or designation of the specific
blocked account or subaccount in which such securities were held.
Sec. 515.533 Exportations from the United States to Cuba; reexportations to Cuba; importation and servicing or repair of certain items previously exported or
reexported to Cuba.
(a) All transactions ordinarily incident to the exportation of items
from the United States, or the reexportation of items from a third
country, to any person within Cuba are authorized, provided that:
(1) The exportation or reexportation is licensed or otherwise
authorized by the Department of Commerce under the provisions of the
Export Administration Act of 1979, as amended (50 U.S.C. 4601-4623) (see
the Export Administration Regulations, 15 CFR parts 730 through 774);
(2) The transaction is not a transaction between a U.S.-owned or -
controlled firm in a third country and
[[Page 90]]
Cuba for the exportation to Cuba of commodities produced in a country
other than the United States or Cuba;
(3) The transaction is not financed from any blocked account; and
(4) In the case of agricultural commodities, as that term is defined
in 15 CFR part 772, only the following payment and financing terms are
used:
(i) Payment of cash in advance. For the purposes of this section,
the term ``payment of cash in advance'' shall mean payment before the
transfer of title to, and control of, the exported items to the Cuban
purchaser; or
(ii) Financing by a banking institution located in a third country
provided the banking institution is not a designated national, a U.S.
citizen, a U.S. permanent resident alien, or an entity organized under
the laws of the United States or any jurisdiction within the United
States (including any foreign branch of such an entity). Such financing
may be confirmed or advised by a U.S. banking institution.
Note 1 to paragraph (a): The transactions authorized by this
paragraph include all transactions that are directly incident to the
shipping of specific exports or reexports (e.g., insurance and
transportation of the exports to Cuba). Transactions that are not tied
to specific exports or reexports, such as transactions involving future
(non-specific) shipments, must be separately licensed by OFAC. For the
waiver of the prohibitions on entry into U.S. ports contained in
Sec. 515.207 for vessels transporting shipments of items between the
United States and Cuba pursuant to this section, see Sec. 515.550.
Note 2 to paragraph (a): The limitation in paragraph (a)(4) applies
only to payment and financing terms for exports or reexports of
agricultural commodities and is required by the Trade Sanctions Reform
and Export Enhancement Act of 2000, 22 U.S.C. 7207(b)(1). For other
authorized exports and reexports, paragraph (a) does not restrict
payment and financing terms. See Sec. 515.584 for an authorization for
banking institutions to provide financing for authorized exports and
reexports of items other than agricultural commodities.
Note 3 to paragraph (a): Transactions ordinarily incident to
exportation from the United States authorized by this paragraph include
the importation into the United States of items from a third country for
exportation to Cuba pursuant to a license or other authorization by the
Department of Commerce.
Note 4 to paragraph (a): See Sec. 515.534 for a general license
authorizing certain contingent contracts, including contingent contracts
for the sale of items that may be exported from the United States to
Cuba or reexported from a third country to Cuba consistent with the
export licensing policy of the Department of Commerce, where performance
of such contingent contracts is expressly made contingent on prior
authorization by the Department of Commerce.
(b) Importation of certain items previously exported to Cuba;
servicing and repair of such items. (1) All transactions ordinarily
incident to the importation into the United States or a third country of
items previously exported from the United States to Cuba or exported or
reexported from a third country to Cuba, and the servicing and repair of
such items, are authorized, provided that:
(i) The items previously were exported or reexported to Cuba
pursuant to paragraph (a) of this section or Sec. 515.559; and
(ii) The items are being imported into the United States or a third
country either:
(A) In order to service or repair the items before they are exported
or reexported back to Cuba, or
(B) To return them to the United States or a third country.
Note to paragraph (b): This paragraph does not authorize the
exportation or reexportation of any item to Cuba. The exportation or
reexportation of serviced, repaired, or replacement items to Cuba must
be separately authorized pursuant to paragraph (a) of this section or
Sec. 515.559, in addition to any Department of Commerce authorization
that may be required.
(c) General license for travel-related transactions incident to
exportation or reexportation of certain items. (1) The travel-related
transactions set forth in Sec. 515.560(c) and such additional
transactions as are directly incident to the conduct of market research,
commercial marketing, sales or contract negotiation, accompanied
delivery, installation, leasing, servicing, or repair in Cuba of items
consistent with the export or reexport licensing policy of the
Department of Commerce are authorized, provided that the traveler's
schedule of activities does not include free time or recreation in
excess of that consistent with a full-time schedule.
[[Page 91]]
(2) The travel-related transactions set forth in Sec. 515.560(c) and
such additional transactions as are directly incident to the
facilitation of the temporary sojourn of aircraft and vessels as
authorized by 15 CFR 740.15 (License Exception Aircraft, Vessels and
Spacecraft) or pursuant to other authorization by the Department of
Commerce for authorized travel between the United States and Cuba,
including travel-related transactions by persons subject to U.S.
jurisdiction who are required for normal operation and service aboard a
vessel or aircraft, as well as persons subject to U.S. jurisdiction who
are required to provide services to a vessel in port or aircraft on the
ground, are authorized, provided that:
(i) Such travel-related transactions are limited to the duration and
scope of their duties in relation to the particular authorized temporary
sojourn; and
(ii) The aircraft or vessel must be transporting individuals whose
travel between the United States and Cuba is authorized pursuant to any
section of this part other than paragraph (c)(2) of this section.
(d) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are related to the
exportation and reexportation of items to Cuba when such transactions do
not qualify for the general license under paragraph (c) of this section.
[81 FR 71374, Oct. 17, 2016]
Sec. 515.534 Negotiation of, and entry into, contingent contracts
relating to transactions prohibited by this part.
(a) Persons subject to the jurisdiction of the United States are
authorized to enter into, and to engage in all transactions ordinarily
incident to the negotiation of and entry into, contingent contracts for
transactions that are prohibited by this part, provided that:
(1) The performance of any such contingent contract is made
expressly contingent on the prior authorization of the Office of Foreign
Assets Control pursuant to this part or authorization no longer being
required; and
(2) The performance of any such contingent contract that is subject
to licensing requirements of another Federal agency is expressly made
contingent upon the prior authorization of that agency or the removal of
those licensing requirements.
(b) For purposes of this section, the term ``contingent contracts''
includes executory contracts, executory pro forma invoices, agreements
in principle, executory offers capable of acceptance such as bids or
proposals in response to public tenders, binding memoranda of
understanding, or any other similar agreement.
Note to Sec. 515.534: This section does not authorize transactions
related to travel to, from, or within Cuba. See Sec. 515.533(c) for a
general license authorizing travel-related and other transactions
incident to the negotiation of contracts for the exportation or
reexportation of certain items to Cuba, and Sec. 515.564(a)(2) for a
general license authorizing travel-related and other transactions
incident to attending or organizing professional meetings in Cuba, which
include professional meetings relating to the negotiation of contingent
contracts authorized by this section.
[81 FR 71375, Oct. 17, 2016]
Sec. 515.535 Exchange of certain securities.
(a) Subject to the limitations and conditions of paragraph (b) of
this section and notwithstanding Sec. 515.202, any banking institution
within the United States is authorized to engage in the following
transactions with respect to securities listed on a national securities
exchange, including the withdrawal of such securities from blocked
accounts:
(1) Exchange of certificates necessitated by reason of changes in
corporate name, par value or capitalization,
(2) Exchanges of temporary for permanent certificates,
(3) Exchanges or deposits under plans of reorganization,
(4) Exchanges under refunding plans, or
(5) Exchanges pursuant to conversion privileges accruing to
securities held.
(b) This section does not authorize the following transactions:
(1) Any exchange of securities unless the new securities and other
proceeds,
[[Page 92]]
if any, received are deposited in the blocked account in which the
original securities were held immediately prior to the exchange.
(2) Any exchange of securities registered in the name of any
designated national, unless the new securities received are registered
in the same name in which the securities exchanged were registered prior
to the exchange.
(3) Any exchange of securities issued by a person engaged in the
business of offering, buying, selling, or otherwise dealing, or trading
in securities, or evidences thereof, issued by another person.
(4) Any transaction with respect to any security by an issuer or
other obligor who is a designated national.
Sec. 515.536 Certain transactions with respect to merchandise affected
by Sec. 515.204.
(a) The purchase outside the United States for importation into the
United States of nickel-bearing materials presumptively subject to
Sec. 515.204 and the importation of such merchandise into the United
States are authorized if there is presented to the collector of customs
in connection with such importation the original of an appropriate
certificate of origin as defined in paragraph (b) of this section and
provided that the merchandise was shipped to the United States directly,
or on a through bill of lading, from the country issuing the appropriate
certificate of origin.
(b) A certificate of origin is appropriate for the purposes of this
section only if
(1) It is a certificate of origin the availability of which for
Cuban Assets Control purposes has been announced in the Federal Register
by the Office of Foreign Assets Control; and
(2) It bears a statement by the issuing agency referring to the
Cuban Assets Control Regulations or stating that the certificate has
been issued under procedures agreed upon with the U.S. Government.
[30 FR 15371, Dec. 14, 1965, as amended at 47 FR 4254, Jan. 29, 1982; 50
FR 5753, Feb. 12, 1985; 54 FR 5234, Feb. 2, 1989; 81 FR 71375, Oct. 17,
2016]
Sec. 515.540 [Reserved]
Sec. 515.542 Mail and telecommunications-related transactions.
(a) All transactions, including payments, incident to the receipt or
transmission of mail and parcels between the United States and Cuba are
authorized, provided that the importation or exportation of such mail
and parcels is exempt from or authorized pursuant to this part.
(b) All transactions, including payments, incident to the provision
of telecommunications services related to the transmission or the
receipt of telecommunications involving Cuba, including the entry into
and performance under roaming service agreements with telecommunications
services providers in Cuba, by persons subject to U.S. jurisdiction are
authorized. This paragraph does not authorize any transactions addressed
in paragraphs (c) or (d) of this section, nor does it authorize the
entry into or performance of a contract with or for the benefit of any
particular individual in Cuba.
(c) All persons subject to U.S. jurisdiction are authorized to enter
into, and make payments under, contracts with telecommunications service
providers, or particular individuals in Cuba, for telecommunications
services provided to particular individuals in Cuba, provided that such
individuals in Cuba are not prohibited officials of the Government of
Cuba, as defined in Sec. 515.337 of this part, or prohibited members of
the Cuban Communist Party, as defined in Sec. 515.338 of this part. The
authorization in this paragraph includes payment for activation,
installation, usage (monthly, pre-paid, intermittent, or other),
roaming, maintenance, and termination fees.
(d) General license for telecommunications facilities. Transactions,
including payments, incident to the establishment of facilities,
including fiber-optic cable and satellite facilities, to provide
telecommunications services linking the United States or third countries
and Cuba, including facilities to provide telecommunications services in
Cuba, are authorized.
(e) Persons subject to U.S. jurisdiction are authorized to enter
into licensing agreements related to services
[[Page 93]]
authorized by paragraphs (b) through (d) of this section, and to market
such services.
(f) [Reserved]
(g) Any entity subject to U.S. jurisdiction relying on paragraph
(b), (c), or (d) of this section shall notify OFAC in writing within 30
days after commencing or ceasing to offer such services, as applicable,
and shall furnish by January 15 and July 15 of each year semiannual
reports providing the total amount of all payments made to Cuba or a
third country related to any of the services authorized by this section
during the prior six months. These notifications and reports must be
captioned ``Section 515.542 Notification'' or ``Section 515.542 Report''
and faxed to 202/622-6931 or mailed to the Office of Foreign Assets
Control, Attn: Regulatory Affairs Division, 1500 Pennsylvania Avenue
NW., Annex, Washington, DC 20220.
(h) For purposes of this section, the term ``telecommunications
services'' includes data, telephone, telegraph, internet connectivity,
radio, television, news wire feeds, and similar services, regardless of
the medium of transmission, including transmissions by satellite.
(i) Nothing in this section authorizes the exportation or
reexportation of any items to Cuba. For the rules related to
authorization of exports and reexports to Cuba, see Secs. 515.533 and
515.559.
(j) Nothing in this section authorizes transactions related to
travel to, from, or within Cuba.
Note 1 to Sec. 515.542: For an authorization of travel-related
transactions that are directly incident to the conduct of market
research, commercial marketing, sales or contract negotiation,
accompanied delivery, installation, leasing, servicing, or repair in
Cuba of items consistent with the export or reexport policy of the
Department of Commerce, see Sec. 515.533(c). For an authorization of
travel-related transactions that are directly incident to participation
in professional meetings, including where such meetings relate to
telecommunications services or other activities authorized by paragraphs
(b) through (e) of this section, see Sec. 515.564(a).
Note 2 to Sec. 515.542: For general licenses authorizing physical
and business presence in Cuba for certain persons, see Sec. 515.573. An
authorization related to business presence was previously included in
this section. For an authorization of certain internet-related services,
see Sec. 515.578.
[80 FR 2293, Jan. 16, 2015, as amended at 80 FR 56921, Sept. 21, 2015;
81 FR 13991, Mar. 16, 2016; 81 FR 71376, Oct. 17, 2016]
Sec. 515.543 Proof of origin.
Specific licenses for importation of goods of Cuban origin are
generally not issued unless the applicant submits satisfactory
documentary proof of the location of the goods outside Cuba prior to
July 8, 1963 and of the absence of any Cuban interest in the goods at
all times on or since that date. Since the type of document which would
constitute satisfactory proof varies depending upon the facts of the
particular case, it is not possible to state in advance the type of
documents required. However, it has been found that affidavits,
statements, invoices, and other documents prepared by manufacturers,
processors, sellers or shippers cannot be relied on and are therefore
not by themselves accepted by the Office of Foreign Assets Control as
satisfactory proof of origin. Independent corroborating documentary
evidence, such as insurance documents, bills of lading, etc., may be
accepted as satisfactory proof.
[39 FR 25317, July 10, 1974]
Sec. 515.544 Certain gifts sent to the United States.
The importation into the United States of merchandise from Cuba or
Cuban-origin merchandise from a third country intended as gifts is
authorized, provided that the value of the merchandise is not more than
$100; the merchandise is of a type and in quantities normally given as
gifts between individuals; the merchandise is sent and not carried by a
traveler (including as accompanied or unaccompanied baggage); and the
merchandise is not alcohol or tobacco products.
Note to Sec. 515.544: See Sec. 515.533 for a general license
authorizing transactions ordinarily incident to exports of items from
the United States that are licensed or otherwise authorized by the
Department of Commerce, which may include gifts sent to Cuba.
[80 FR 56921, Sept. 21, 2015]
[[Page 94]]
Sec. 515.545 Transactions related to information and informational
materials.
(a) Transactions relating to the creation, dissemination, artistic
or other substantive alteration, or enhancement of informational
materials are authorized, including employment of Cuban nationals and
remittance of royalties or other payments in connection with such
transactions. This section authorizes marketing related to the
dissemination of such informational materials but does not authorize
other marketing or business consulting services.
(b) General license. (1) The travel-related transactions set forth
in Sec. 515.560(c) and such additional transactions as are directly
incident to the exportation, importation, or transmission of information
or informational materials as defined in Sec. 515.332 are authorized,
provided that the traveler's schedule of activities does not include
free time or recreation in excess of that consistent with a full-time
schedule.
(2) The travel-related transactions set forth in Sec. 515.560(c) and
such additional transactions as are directly incident to professional
media or artistic productions of information or informational materials
for exportation, importation, or transmission, including the filming or
production of media programs (such as movies and television programs),
the recording of music, and the creation of artworks in Cuba, are
authorized, provided that the traveler is regularly employed in or has
demonstrated professional experience in a field relevant to such
professional media or artistic productions, and that the traveler's
schedule of activities does not include free time or recreation in
excess of that consistent with a full-time schedule.
(c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are related to
information and informational materials that do not qualify for the
general license under paragraph (b) of this section.
Note 1 to Sec. 515.545. With respect to transactions necessary and
ordinarily incident to the publishing and marketing of manuscripts,
books, journals and newspapers, see Sec. 515.577.
Note 2 to Sec. 515.545: See Sec. 515.332(a)(2) for clarification as
to the types of artworks that are considered to be informational
materials.
[54 FR 5234, Feb. 2, 1989, as amended at 60 FR 39257, Aug. 2, 1995; 64
FR 25813, May 13, 1999; 69 FR 75469, Dec. 17, 2004; 74 FR 46006, Sept.
8, 2009; 80 FR 2294, Jan. 16, 2015; 81 FR 4585, Jan. 27, 2016]
Sec. 515.546 Accounts of Cuban sole proprietorships.
Specific licenses are issued unblocking sole proprietorships
established under the laws of Cuba if the proprietor has emigrated from
Cuba and established residence in the United States or a country in the
authorized trade territory.
[39 FR 25319, July 10, 1974. Redesignated at 64 FR 25813, May 13, 1999]
Sec. 515.547 Certain transactions related to medical research and
Cuban-origin pharmaceuticals; research samples.
(a) Persons subject to U.S. jurisdiction are authorized to engage in
all transactions incident to joint medical research projects with Cuban
nationals.
Note 1 to paragraph (a): The export or reexport to Cuba of goods
(including software) or technology subject to the Export Administration
Regulations (15 CFR parts 730 through 774) may require separate
authorization from the Department of Commerce.
Note 2 to paragraph (a): This paragraph does not authorize
transactions related to travel to, from, or within Cuba, nor does it
authorize transactions related to travel to, from, or within the United
States by Cuban nationals. See Sec. 515.564(a) for a general license
authorizing travel-related and other transactions incident to
professional research and professional meetings in Cuba. See
Sec. 515.571 for a general license authorizing transactions incident to
travel to, from, and within the United States by certain Cuban
nationals.
Note 3 to paragraph (a): This paragraph also does not authorize
persons subject to U.S. jurisdiction to establish a business or physical
presence in Cuba, to hire Cuban nationals, or to engage in any
transactions prohibited by Sec. 515.208.
(b) Persons subject to U.S. jurisdiction are authorized to engage in
all transactions incident to obtaining approval from the U.S. Food and
Drug
[[Page 95]]
Administration (FDA) of Cuban-origin pharmaceuticals, including
discovery and development, pre-clinical research, clinical research,
regulatory review, regulatory approval and licensing, regulatory post-
market activities, and the importation into the United States of Cuban-
origin pharmaceuticals.
(c) Persons subject to U.S. jurisdiction are authorized to engage in
all transactions incident to the marketing, sale, or other distribution
in the United States of FDA-approved Cuban-origin pharmaceuticals,
including the importation into the United States of Cuban-origin
pharmaceuticals.
(d)(1) Opening and maintaining bank accounts at Cuban financial
institutions to engage in authorized transactions. The opening and
maintenance of accounts, including the deposit of funds in such accounts
by wire transfer, at a financial institution in Cuba, is authorized
provided that such accounts are used only for transactions authorized
pursuant to this section.
(2) Closing bank accounts. The closing of an account opened pursuant
to the authorization in paragraph (d)(1) of this section is authorized,
provided that any transfer of funds may only be effected by wire
transfer to an account maintained at a depository institution, as
defined in Sec. 515.333, that is a person subject to U.S. jurisdiction.
(e) Specific licenses. (1) To the extent not authorized by paragraph
(b) of this section, specific licenses may be issued for the importation
of Cuban-origin commodities for bona-fide research purposes in sample
quantities only.
(2) Specific licenses may be issued for transactions related to
medical research or pharmaceutical products not authorized by paragraphs
(a) through (c) of this section.
Note to Sec. 515.547: Transactions authorized by this section may
require separate authorizations or approvals by the FDA or other Federal
agencies.
[81 FR 71376, Oct. 17, 2016]
Sec. 515.548 Overflight payments, emergency landings, and air
ambulance services authorized.
(a) The receipt of, and payment of charges for, services rendered by
Cuba or a Cuban national in connection with overflights of Cuba or
emergency landings in Cuba by aircraft registered in the United States
or owned or controlled by, or chartered to, persons subject to U.S.
jurisdiction are authorized.
(b) Persons subject to U.S. jurisdiction are authorized to engage in
all transactions necessary to provide air ambulance and related medical
services, including medical evacuation from Cuba, for individual
travelers in Cuba, regardless of nationality or the purpose of the
individual's travel to Cuba.
Note to paragraph (b): Persons providing air ambulance services
authorized by paragraph (b) are authorized to carry persons who are
close relatives, as defined in Sec. 515.539, of the subject of the
evacuation.
[80 FR 56921, Sept. 21, 2015]
Sec. 515.549 Bank accounts and other property of non-Cuban decedents
in Cuba on or after July 8, 1963.
Specific licenses may be issued authorizing the administration of
the estates of non-Cuban decedents who died in Cuba on or after July 8,
1963, provided that any distribution to a blocked national of Cuba is
made by deposit in a blocked account in a domestic bank in the name of
the blocked national.
[80 FR 2294, Jan. 16, 2015]
Sec. 515.550 Certain vessel transactions authorized.
(a) Unless a vessel is otherwise engaging or has otherwise engaged
in transactions that would prohibit entry pursuant to Sec. 515.207,
Sec. 515.207 shall not apply to a vessel that is:
(1) Engaging or has engaged in trade with Cuba authorized pursuant
to this part;
Note to paragraph (a)(1): The authorization in this paragraph
includes, for example, trade with Cuba authorized pursuant to
Sec. 515.533, Sec. 515.559, or Sec. 515.582, or by specific license.
(2) Engaging or has engaged in trade with Cuba that is exempt from
the prohibitions of this part (see Sec. 515.206);
(3) Engaging or has engaged in the exportation or reexportation to
Cuba from a third country of agricultural
[[Page 96]]
commodities, medicine, or medical devices that, were they subject to the
Export Administration Regulations (15 CFR parts 730 through 774) (EAR),
would be designated as EAR99;
(4) A foreign vessel that has entered a port or place in Cuba while
carrying students, faculty, and staff that are authorized to travel to
Cuba pursuant to Sec. 515.565(a); or
(5) Carrying or has carried persons between the United States and
Cuba or within Cuba pursuant to the authorization in Sec. 515.572(a)(2)
or, in the case of a vessel used solely for personal travel (and not
transporting passengers), pursuant to a license or other authorization
issued by the Department of Commerce for the exportation or
reexportation of the vessel to Cuba.
(b) Unless a vessel is otherwise engaging or has otherwise engaged
in transactions that would prohibit entry pursuant to Sec. 515.207,
Sec. 515.207(a) shall not apply to a foreign vessel that has engaged in
the exportation to Cuba from a third country only of items that, were
they subject to the EAR, would be designated as EAR99 or would be
controlled on the Commerce Control List only for anti-terrorism reasons.
[81 FR 71376, Oct. 17, 2016]
Sec. 515.551 Joint bank accounts.
(a) Specific licenses are issued unblocking a portion of or all of a
joint bank account blocked by reason of the fact that one or more of the
persons in whose names the account is held is a blocked national, where
a non-blocked applicant claims beneficial ownership, as follows:
(1) Joint bank account, without survivorship provisions. Specific
licenses are issued unblocking only that amount with respect to which
the applicant is able to prove beneficial ownership by documentary
evidence independent of his assertions of interest.
(2) Joint bank account, with survivorship provisions. Specific
licenses are issued unblocking an amount equivalent to that portion of
the total amount to which the applicant would be entitled if the total
were divided evenly among the persons in whose names the account is held
(e.g. 50 percent where there are two names; 33\1/3\ percent where there
are three names). Such licenses generally are issued on the basis of
applicant's assertions of beneficial ownership interest without the
requirement of independent evidence.
(3) Joint bank account in the names of a husband and wife, with
survivorship provision. Specific licenses are issued unblocking portions
of such accounts blocked by reason of the residence of one spouse in
Cuba in favor of the non-blocked spouse under the policy stated in
paragraph (a)(2) of this section. However, if 50 percent of the account
has been unblocked under that policy, and the spouse who is the blocked
Cuban national subsequently dies, the surviving spouse may be entitled
to a license unblocking the remainder of the assets under Sec. 515.522.
(b) [Reserved]
[39 FR 25318, July 10, 1974, as amended at 49 FR 27145, July 2, 1984; 54
FR 5234, Feb. 2, 1989; 64 FR 25813, May 13, 1999]
Sec. 515.552 Proceeds of insurance policies.
(a) Specific licenses are issued authorizing payment of the proceeds
of blocked life insurance policies issued on the life of a Cuban
national who died in Cuba after July 8, 1963, to certain beneficiaries
licensed as unblocked nationals pursuant to Sec. 515.505, as follows:
(1) The applicant is a permanent resident of the United States or
the authorized trade territory and is not a specially designated
national; and
(2) No interest on the part of a designated national not licensed as
an unblocked national exists in that portion of the funds to which the
applicant is entitled.
(b) Applications for specific licenses under this section must
include all of the following information:
(1) Proof of permanent residence in the United States or the
authorized trade territory, to be established by the submission of
documentation issued by relevant government authorities that must
include at least two of the following documents:
(i) Passport;
(ii) Voter registration card;
(iii) Permanent resident alien card; or
(iv) National identity card.
[[Page 97]]
Other documents tending to show residency, such as income tax returns,
may also be submitted in support of government documentation, but will
not suffice in and of themselves;
(2) Proof of entitlement under the insurance policy to be
established by a copy of the policy and an affidavit from an appropriate
officer of a recognized insurance company acknowledging the legitimacy
of the beneficiary's claim and the amount of the payment; and
(c) Any document provided pursuant to this section that is not
written in the English language must be accompanied by a translation
into English, as well as a certification by the translator that he is
not an interested party to the proceeding, is qualified to make the
translation, and has made an accurate translation of the document in
question.
[54 FR 5234, Feb. 2, 1989]
Sec. 515.553 Bank accounts of official representatives in Cuba
of foreign governments.
Specific licenses are issued authorizing payments from accounts of
official representatives in Cuba of foreign governments for transactions
which are not inconsistent with the purposes of any of the regulations
in this chapter.
[39 FR 25319, July 10, 1974]
Sec. 515.554 Transfers of abandoned property under State laws.
(a) Except as stated in paragraphs (b) and (c) of this section,
specific licenses are not issued authorizing the transfer of blocked
property to State agencies under State laws governing abandoned
property.
(b) Specific licenses are issued authorizing the transfer of blocked
property, pursuant to the laws of the State governing abandoned
property, to the appropriate State agency: Provided, That the State's
laws are custodial in nature, i.e., there is no permanent transfer of
beneficial interest to the State. Licenses require the property to be
held by the State in accounts which are identified as blocked under the
regulations. A separate index of these blocked assets is required to be
maintained by the State agency. The requirements of this section for
identification and separate indexing of blocked assets apply to all
blocked assets held by State agencies and any licenses issued prior to
the effective date of this section hereby are amended by the
incorporation of such requirements.
(c) To be eligible for a specific license under this section, the
state agency must demonstrate that it has the statutory authority under
appropriate state law to comply with the requirements of Sec. 515.205.
Such a showing shall include an opinion of the State Attorney General
that such statutory authority exists.
[44 FR 11771, Mar. 2, 1979]
Sec. 515.555 Assets of Cuban firms wholly or substantially owned
by U.S. citizens.
(a) Specific licenses are issued to applicants requesting the
unblocking of their stock in Cuban corporations if:
(1) The corporation was wholly or substantially owned by United
States citizens on July 8, 1963;
(2) The assets are in the United States and either;
(3) The applicant is a stockholder who was a United States citizen
on July 8, 1963 and owned the stock interests on that date; or,
(4) The applicant is a non-blocked person who acquired such stock
interest after July 8, 1963 from a person specified in paragraph (a)(3)
of this section.
(b) The issuance of licenses is conditioned on the applicant's
furnishing the following information:
(1) Detailed information as to the status of all debts and other
obligations of the Cuban corporation, specifying the citizenship and
residence of each creditor as of July 8, 1963, and as of the date of
filing of the application;
(2) Current status of the Cuban corporation, e.g., liquidated,
nationalized, inoperative, etc.;
(3) A detailed description of all the corporation's assets, wherever
located;
(4) A list of all officers, directors, and stockholders giving the
citizenship and the residence of each such person as of July 8, 1963;
and,
(5) Satisfactory proof that such stock was owned by U.S. citizens as
of July 8,
[[Page 98]]
1963. Such proof may consist of sworn statements by the persons in
question attesting to their citizenship. The Office of Foreign Assets
Control reserves the right to require additional proof of citizenship.
[39 FR 25319, July 10, 1974]
Sec. 515.556 [Reserved]
Sec. 515.557 Accounts of Cuban partnerships.
Specific licenses are issued unblocking partnerships established
under the laws of Cuba as follows:
(a) Where all of the general partners and limited partners, if any,
have emigrated from Cuba and have established residence in the United
States or in a country in the authorized trade territory, specific
licenses are issued unblocking the assets of the partnership after
deducting the total debt due creditors wherever located.
(b) Where one or more partners, whether general or limited, is still
in Cuba (or elsewhere but still blocked), specific licenses are issued
unblocking only the net pro-rata shares of those partners who are
resident in the United States or in a country in the authorized trade
territory after deducting the total debt due creditors wherever located.
(c) The issuance of licenses is conditioned on the applicant's
furnishing the following information:
(1) Detailed information as to the status of all debts and other
obligations of the blocked partnership, specifying the citizenship and
residence of each creditor as of July 8, 1963, and as of the date of the
application;
(2) Current status of the Cuban partnership, e.g., liquidated,
nationalized, inoperative, etc.;
(3) A detailed description of all the partnership's assets, wherever
located; and,
(4) A list of all partners, indicating whether they are general,
limited, etc. and giving their citizenship and residence as of July 8,
1963, and as of the date of filing of the application.
[39 FR 25319, July 10, 1974]
Sec. 515.558 Bunkering of Cuban vessels and fueling of Cuban aircraft
by American-owned or controlled foreign firms.
Foreign firms owned or controlled by United States persons are
authorized to engage in transactions ordinarily incident to the
bunkering of vessels and to the fueling of aircraft owned or controlled
by, or chartered to, Cuba or nationals thereof.
(50 U.S.C. App. 5(b); 22 U.S.C. 2370(a); E. O. 9193, 3 CFR 1943 Cum.
Supp.; Treas. Dept. Order No. 128, 32 FR 3472)
[42 FR 58518, Nov. 10, 1977; 43 FR 19852, May 9, 1978. Redesignated at
64 FR 25813, May 13, 1999]
Sec. 515.559 Certain export and import transactions by U.S.-owned
or -controlled foreign firms.
(a) Effective October 23, 1992, no specific licenses will be issued
pursuant to paragraph (b) of this section for transactions between U.S.-
owned or controlled firms in third countries and Cuba for the
exportation to Cuba of commodities produced in the authorized trade zone
or for the importation of goods of Cuban origin into countries in the
authorized trade zone, unless, in addition to meeting all requirements
of paragraph (b), one or more of the following conditions are satisfied:
(1) The contract underlying the proposed transaction was entered
into prior to October 23, 1992;
(2) The transaction is for the exportation of medicine or medical
supplies from a third country to Cuba, which shall not be restricted:
(i) Except to the extent such restrictions would be permitted under
section 5(m) of the Export Administration Act of 1979 or section
203(b)(2) of the International Emergency Economic Powers Act if the
exportation were subject to these provisions;
(ii) Except in a case in which there is a reasonable likelihood that
the item to be exported will be used for purposes of torture or other
human rights abuses;
(iii) Except in a case in which there is a reasonable likelihood
that the item to be exported will be reexported; or
(iv) Except in a case in which the item to be exported could be used
in
[[Page 99]]
the production of any biotechnological product; and
(v) Except in a case where it is determined that the United States
Government is unable to verify, by on-site inspection or other means,
that the item to be exported will be used for the purpose for which it
was intended and only for the use and benefit of the Cuban people, but
this exception shall not apply to donations for humanitarian purposes to
a nongovernmental organization in Cuba.
(3) The transaction is for the exportation of telecommunications
equipment from a third country, when the equipment is determined to be
necessary for efficient and adequate telecommunications service between
the United States and Cuba.
(b) Specific licenses will be issued in appropriate cases for
certain categories of transactions between U.S.-owned or controlled
firms in third countries and Cuba, where local law requires, or policy
in the third country favors, trade with Cuba. The categories include:
(1) Exportation to Cuba of commodities produced in the authorized
trade territory, provided:
(i) The commodities to be exported are non-strategic;
(ii) United States-origin technical data (other than maintenance,
repair and operations data) will not be transferred;
(iii) If any U.S.-origin parts and components are included therein,
such inclusion has been authorized by the Department of Commerce;
(iv) If any U.S.-origin spares are to be reexported to Cuba in
connection with a licensed transaction, such reexport has been
authorized by the Department of Commerce;
(v) No U.S. dollar accounts are involved; and
(vi) Any financing or other extension of credit by a U.S.-owned or
controlled firm is granted on normal short-term conditions which are
appropriate for the commodity to be exported.
(2) [Reserved]
(3) Importation of goods of Cuban origin into countries in the
authorized trade territory.
Note to paragraph (b): On October 23, 1992, sections 1705 and 1706
of the Cuban Democracy Act of 1992, Pub. L. 102-484 (Oct. 23, 1992)
(codified at 22 U.S.C. 6004 and 6005, respectively), prohibited OFAC
from issuing licenses for any transaction described in this paragraph
other than those transactions currently set forth in paragraph (a).
(c) The term strategic goods means any item, regardless of origin,
of a type included in the Commodity Control List of the U.S. Department
of Commerce (15 CFR part 399) and identified by the code letter ``A''
following the Export Control Commodity Numbers, or of a type the
unauthorized exportation of which from the United States is prohibited
by regulations issued under the Arms Export Control Act of 1976, 22
U.S.C. 2778, or under the Atomic Energy Act of 1954, 42 U.S.C. 2011, et
seq., or successor acts restricting the export of strategic goods.
(d) General license. Travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are directly incident to
market research, commercial marketing, sales or contract negotiation,
accompanied delivery, installation, leasing, servicing, or repair in
Cuba of exports that are consistent with the licensing policy under
paragraph (a) of this section are authorized, provided that the
traveler's schedule of activities does not include free time or
recreation in excess of that consistent with a full-time schedule.
(e) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are related to certain
transactions by U.S.-owned or -controlled foreign firms with Cuba that
do not qualify for the general license under paragraph (d) of this
section.
Note 1 to Sec. 515.559: For authorization of the reexportation of
U.S.-origin items, see Sec. 515.533. Transactions by U.S.-owned or -
controlled foreign firms directly incident to the exportation of
information or informational materials or the donation of food to
nongovernmental entities or individuals in Cuba are exempt from the
prohibitions of this part. See Sec. 515.206. For the waiver of the
prohibitions contained in Sec. 515.207 with respect to vessels
transporting shipments of items pursuant to this section, see
Sec. 515.550.
[[Page 100]]
Note 2 to Sec. 515.559: See Sec. 515.585 for provisions related to
certain transactions by persons subject to U.S. jurisdiction with
certain Cuban nationals in third countries.
[40 FR 47108, Oct. 8, 1975, as amended at 42 FR 1472, Jan. 7, 1977; 42
FR 16621, Mar. 29, 1977; 50 FR 27438, July 3, 1985; 53 FR 47527, Nov.
23, 1988; 58 FR 34710, June 29, 1993; 64 FR 25814, May 13, 1999; 66 FR
36687, July 12, 2001; 68 FR 14146, Mar. 24, 2003; 80 FR 2294, Jan. 16,
2015; 80 FR 56921, Sept. 21, 2015; 81 FR 13991, Mar. 16, 2016; 81 FR
71376, Oct. 17, 2016]
Sec. 515.560 Travel-related transactions to, from, and within Cuba
by persons subject to U.S. jurisdiction.
(a) The travel-related transactions listed in paragraph (c) of this
section may be authorized either by a general license or on a case-by-
case basis by a specific license for travel related to the following
activities (see the referenced sections for the applicable general and
specific licensing criteria):
(1) Family visits (see Sec. 515.561);
(2) Official business of the U.S. government, foreign governments,
and certain intergovernmental organizations (see Sec. 515.562);
(3) Journalistic activity (see Sec. 515.563);
(4) Professional research and professional meetings (see
Sec. 515.564);
(5) Educational activities (see Sec. 515.565);
(6) Religious activities (see Sec. 515.566);
(7) Public performances, clinics, workshops, athletic and other
competitions, and exhibitions (see Sec. 515.567);
(8) Support for the Cuban people (see Sec. 515.574);
(9) Humanitarian projects (see Sec. 515.575);
(10) Activities of private foundations or research or educational
institutes (see Sec. 515.576);
(11) Exportation, importation, or transmission of information or
informational materials (see Sec. 515.545); and
(12) Certain export transactions that may be considered for
authorization under existing Department of Commerce regulations and
guidelines with respect to Cuba or engaged in by U.S.-owned or -
controlled foreign firms (see Secs. 515.533 and 515.559).
(b) Effective October 28, 2000, no specific licenses will be issued
authorizing the travel-related transactions in paragraph (c) of this
section in connection with activities other than those referenced in
paragraph (a) of this section.
(c) Persons generally or specifically licensed under this part to
engage in transactions in connection with travel to, from, and within
Cuba may engage in the following transactions:
(1) Transportation to and from Cuba. All transportation-related
transactions ordinarily incident to travel to and from (not within) Cuba
are authorized.
(2) Living expenses in Cuba. All transactions ordinarily incident to
travel within Cuba, including payment of living expenses and the
acquisition in Cuba of goods for personal consumption there, are
authorized.
(3) Importation of Cuban merchandise. The purchase or other
acquisition in Cuba and importation as accompanied baggage into the
United States of merchandise is authorized, provided that the
merchandise is imported for personal use only. The importation of Cuban-
origin information and informational materials is exempt from the
prohibitions of this part, as described in Sec. 515.206. The importation
of certain other specified goods and services is authorized in
Secs. 515.544, 515.547, 515.569, 515.578, 515.582, and 515.585.
(4) Carrying remittances to Cuba. The carrying to Cuba of any
remittances that the licensed traveler is authorized to remit pursuant
to Sec. 515.570 is authorized, provided that no emigration-related
remittances authorized by Sec. 515.570(e) are carried to Cuba unless a
U.S. immigration visa has been issued for each payee and the licensed
traveler can produce the visa recipients' full names, dates of birth,
visa numbers, and visa dates of issuance.
(5) Processing certain financial instruments. All transactions
incident to the processing and payment of credit cards, debit cards,
stored value cards, checks, drafts, travelers' checks, and similar
instruments used or negotiated in Cuba by any person authorized pursuant
to this part to engage in financial transactions in Cuba are authorized.
Persons subject to U.S. jurisdiction may rely on the traveler with
regard to compliance with this paragraph, provided that such persons do
not know or have reason to know that a transaction is not authorized by
this section.
[[Page 101]]
Note to Sec. 515.560(c)(5): Please see Sec. 515.584 for additional
provisions related to the processing and payment of credit and debit
card transactions.
(6)(i) Opening and maintaining bank accounts. All transactions
incident to the opening and maintenance of accounts, including the
deposit of funds in such accounts by wire transfer, at a financial
institution in Cuba are authorized, provided that such accounts are used
only while the traveler is located in Cuba and for the purpose of
accessing funds in Cuba for transactions authorized pursuant to, or
exempt from, this part.
(ii) Closing bank accounts. All transactions incident to the closing
of accounts opened pursuant to the authorization in paragraph (c)(6)(i)
of this section are authorized, provided that any transfer of funds may
only be effected by wire transfer to an account maintained at a
depository institution, as defined in Sec. 515.333, that is a person
subject to U.S. jurisdiction.
Note to paragraph (c)(6): Account(s) authorized by this general
license may only be accessed while the account holder is located in Cuba
for travel authorized pursuant to this part. The account(s) may not be
accessed or utilized by the account holder unless the account holder is
located in Cuba and is engaging in authorized transactions. The
account(s) may be maintained but not accessed while the account holder
is located outside of Cuba other than for the purpose of funding or
closing the bank account as authorized in paragraph (c)(6).
(d) A blocked Cuban national permanently resident in Cuba who is
departing the United States may carry currency as follows:
(1) The amount of any currency brought into the United States by the
Cuban national and registered with U.S. Customs and Border Protection
upon entry;
(2) Funds received as remittances pursuant to Sec. 515.570 by the
Cuban national during his or her stay in the United States; and
(3) Salaries or other compensation earned by the Cuban national up
to any amount that can be substantiated through payment receipts as
authorized in Sec. 515.571(a)(5).
(e) [Reserved]
(f) Nothing in this section authorizes transactions in connection
with tourist travel to Cuba.
Note 1 to Sec. 515.560: Each person relying on the general
authorization in this section must retain specific records related to
the authorized travel transactions. See Secs. 501.601 and 501.602 of
this chapter for applicable recordkeeping and reporting requirements.
Note 2 to Sec. 515.560: This section authorizes the provision of
health insurance-, life insurance-, and travel insurance-related
services to authorized travelers, as well as the receipt of emergency
medical services and the making of payments related thereto.
Note 3 to Sec. 515.560: The export or reexport to Cuba of goods
(including software) or technology subject to the Export Administration
Regulations (15 CFR parts 730 through 774) may require separate
authorization from the Department of Commerce.
[64 FR 25814, May 13, 1999, as amended at 66 FR 36688, July 12, 2001; 68
FR 14146, Mar. 24, 2003; 69 FR 33771, 33773, June 16, 2004; 74 FR 46006,
Sept. 8, 2009; 76 FR 5074, Jan. 28, 2011; 80 FR 2295, Jan. 16, 2015; 80
FR 56922, Sept. 21, 2015; 81 FR 13992, Mar. 16, 2016; 81 FR 71376, Oct.
17, 2016]
Sec. 515.561 Family visits.
(a) General license. Persons subject to the jurisdiction of the
United States and persons traveling with them who share a common
dwelling as a family with them are authorized to engage in the travel-
related transactions set forth in Sec. 515.560(c) and such additional
transactions as are directly incident to: visiting a close relative, as
defined in Sec. 515.339, who is a national of Cuba or a person
ordinarily resident in Cuba; or visiting a close relative located in
Cuba or accompanying a close relative traveling to Cuba pursuant to the
authorizations in Sec. 515.562 (official government business),
Sec. 515.563 (journalistic activity), Sec. 515.564(a) (professional
research), Sec. 515.565(a)(1) through (4) and (6) (educational
activities), Sec. 515.566 (religious activities), Sec. 515.575
(humanitarian projects), or Sec. 515.576 (activities of private
foundations or research or educational institutes).
Note to paragraph (a): Each person relying on the general
authorization in this paragraph must retain specific records related to
the authorized travel transactions. See Secs. 501.601 and 501.602 of
this chapter for applicable recordkeeping and reporting requirements.
[[Page 102]]
(b) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are related to family
visits that do not qualify for the general license under paragraph (a)
of this section.
(c) An entire group does not qualify for the general license in
paragraph (a) of this section merely because some members of the group
qualify individually.
[80 FR 2295, Jan. 16, 2015, as amended at 80 FR 56922, Sept. 21, 2015]
Sec. 515.562 Official business of the U.S. government, foreign
governments, and certain intergovernmental organizations.
(a) The travel-related transactions set forth in Sec. 515.560(c) and
such additional transactions as are directly incident to activities in
their official capacities by persons who are employees, contractors, or
grantees of the United States Government, any foreign government, or any
intergovernmental organization of which the United States is a member or
holds observer status, and who are traveling on the official business of
their government or intergovernmental organization, are authorized.
(b) All transactions otherwise prohibited by this part that are for
the conduct of the official business of the United States Government or
of any intergovernmental organization of which the United States is a
member, or holds observer status, by employees, grantees, or contractors
thereof, are authorized.
Note to Sec. 515.562(a) and (b): Each person relying on the general
authorization in this paragraph must retain specific records related to
the authorized travel transactions. For example, grantees or contractors
relying on the authorization in this section must retain a copy of their
grant or contract with the United States Government, foreign government,
or intergovernmental organization. See Secs. 501.601 and 501.602 of this
chapter for applicable recordkeeping and reporting requirements.
(c) An entire group does not qualify for the general license in
paragraph (a) of this section merely because some members of the group
qualify individually.
(d) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are related to official
government business that do not qualify for the general licenses under
paragraph (a) or (b) of this section.
[80 FR 2295, Jan. 16, 2015]
Sec. 515.563 Journalistic activities in Cuba.
(a) General license. The travel-related transactions set forth in
Sec. 515.560(c) and such additional transactions as are directly
incident to journalistic activities in Cuba are authorized, provided
that:
(1) The traveler is at least one of the following:
(i) Regularly employed as a journalist by a news reporting
organization;
(ii) Regularly employed as supporting broadcast or technical
personnel;
(iii) A freelance journalist with a record of previous journalistic
experience working on a freelance journalistic project; or
(iv) Broadcast or technical personnel with a record of previous
broadcast or technical experience, who are supporting a freelance
journalist working on a freelance journalistic project; and
(2) The traveler's schedule of activities does not include free time
or recreation in excess of that consistent with a full-time schedule.
Note to Sec. 515.563(a): Each person relying on the general
authorization in this paragraph must retain specific records related to
the authorized travel transactions. See Secs. 501.601 and 501.602 of
this chapter for applicable recordkeeping and reporting requirements.
(b) An entire group does not qualify for the general license in
paragraph (a) of this section merely because some members of the group
qualify individually.
(c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are related to
journalistic activity in Cuba that do
[[Page 103]]
not qualify for the general license under paragraph (a) of this section.
[80 FR 2296, Jan. 16, 2015]
Sec. 515.564 Professional research and professional meetings in Cuba.
(a) General license--(1) Professional research. The travel-related
transactions set forth in Sec. 515.560(c) and such additional
transactions as are directly incident to professional research are
authorized, provided that:
(i) The purpose of the research directly relates to the traveler's
profession, professional background, or area of expertise, including
area of graduate-level full-time study;
(ii) The traveler's schedule of activities does not include free
time or recreation in excess of that consistent with a full-time
schedule of professional research.
Example to Sec. 515.564(a)(1): The making of a documentary film in
Cuba would qualify for the general license in this section if it is a
vehicle for presentation of the research conducted pursuant to this
section.
Note to Sec. 515.564(a)(1): A person does not qualify as engaging in
professional research merely because that person is a professional who
plans to travel to Cuba.
(2) Professional meetings. The travel-related transactions set forth
in Sec. 515.560(c) and such additional transactions as are directly
incident to attendance at, or organization of, professional meetings or
conferences in Cuba are authorized, provided that:
(i) For a traveler attending a professional meeting or conference,
the purpose of the meeting or conference directly relates to the
traveler's profession, professional background, or area of expertise,
including area of graduate-level full-time study;
(ii) For a traveler organizing a professional meeting or conference
on behalf of an entity, either the traveler's profession must be related
to the organization of professional meetings or conferences or the
traveler must be an employee or contractor of an entity that is
organizing the professional meeting or conference; and
(iii) The traveler's schedule of activities does not include free
time or recreation in excess of that consistent with a full-time
schedule of attendance at, or organization of, professional meetings or
conferences.
Note to Sec. 515.564(a)(2): Transactions incident to the
organization of professional meetings or conferences include marketing
related to such meetings or conferences in Cuba.
Note to Sec. 515.564(a): Each person relying on the general
authorization in this paragraph must retain specific records related to
the authorized travel transactions. See Secs. 501.601 and 501.602 of
this chapter for applicable recordkeeping and reporting requirements.
(b) An entire group does not qualify for the general license in
paragraph (a) of this section of this section merely because some
members of the group qualify individually.
Example to Sec. 515.564(b): A musicologist travels to Cuba to
research Cuban music pursuant to the general license for professional
research set forth in paragraph (a) of this section. Others who are
simply interested in music may not engage in travel-related transactions
with the musicologist in reliance on this general license. For example,
an art historian who plays in the same band with the musicologist would
not qualify for the general license.
(c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are related to
professional research or professional meetings in Cuba that do not
qualify for the general license under paragraph (a) of this section.
[80 FR 2296, Jan. 16, 2015, as amended at 81 FR 4585, Jan. 27, 2016; 81
FR 71377, Oct. 17, 2016]
Sec. 515.565 Educational activities.
(a) General license for educational activities. Persons subject to
U.S. jurisdiction, including U.S. academic institutions and their
faculty, staff, and students, are authorized to engage in transactions,
including the travel-related transactions set forth in Sec. 515.560(c),
that are related to the following activities:
(1) Participation in a structured educational program in Cuba as
part of a course offered for credit by a U.S. graduate or undergraduate
degree-granting academic institution that is sponsoring the program;
[[Page 104]]
(2) Noncommercial academic research in Cuba specifically related to
Cuba and for the purpose of obtaining an undergraduate or graduate
degree;
(3) Participation in a formal course of study at a Cuban academic
institution, provided the formal course of study in Cuba will be
accepted for credit toward the student's graduate or undergraduate
degree;
(4) Teaching at a Cuban academic institution related to an academic
program at the Cuban institution, provided that the individual is
regularly employed by a U.S. or other non-Cuban academic institution;
(5) Sponsorship of a Cuban scholar to teach or engage in other
scholarly activity at the sponsoring U.S. academic institution (in
addition to those transactions authorized by the general license
contained in Sec. 515.571).
Note to paragraph (a)(5): See Sec. 515.571(a) for authorizations
related to certain banking transactions and receipt of salary or other
compensation by Cuban nationals present in the United States in a non-
immigrant status or pursuant to other non-immigrant travel authorization
issued by the U.S. government.
(6) Educational exchanges sponsored by Cuban or U.S. secondary
schools involving secondary school students' participation in a formal
course of study or in a structured educational program offered by a
secondary school or other academic institution and led by a teacher or
other secondary school official. This includes participation by a
reasonable number of adult chaperones to accompany the secondary school
students to Cuba.
(7) Sponsorship or co-sponsorship of non commercial academic
seminars, conferences, symposia, and workshops related to Cuba or global
issues involving Cuba and attendance at such events by faculty, staff,
and students of a participating U.S. academic institution;
(8) Establishment of academic exchanges and joint non-commercial
academic research projects with universities or academic institutions in
Cuba;
(9) Provision of standardized testing services, including
professional certificate examinations, university entrance examinations,
and language examinations, and related preparatory services for such
exams, to Cuban nationals, wherever located;
(10) Provision of internet-based courses, including distance
learning and Massive Open Online Courses, to Cuban nationals, wherever
located, provided that the course content is at the undergraduate level
or below; or
(11) The organization of, and preparation for, activities described
in paragraphs (a)(1) through (a)(10) of this section by employees or
contractors of the sponsoring organization that is a person subject to
U.S. jurisdiction;
(12) Facilitation by an organization that is a person subject to
U.S. jurisdiction, or a member of the staff of such an organization, of
licensed educational activities in Cuba on behalf of U.S. academic
institutions or secondary schools, provided that:
(i) The organization is directly affiliated with one or more U.S.
academic institutions or secondary schools; and
(ii) The organization facilitates educational activities that meet
the requirements of one or more of the general licenses set forth in
Sec. 515.565(a)(1), (2), (3), and (6).
Note 1 to paragraph (a): See Sec. 515.560(c)(6) for an authorization
for individuals to open and maintain accounts at Cuban financial
institutions; see Sec. 515.573 for an authorization for entities
conducting educational activities authorized by Sec. 515.565(a) to
establish a physical presence in Cuba, including an authorization to
open and maintain accounts at Cuban financial institutions.
Note 2 to paragraph (a): The authorization in this paragraph extends
to adjunct faculty and part-time staff of U.S. academic institutions. A
student enrolled in a U.S. academic institution is authorized pursuant
to Sec. 515.565(a)(1) to participate in the academic activities in Cuba
described above through any sponsoring U.S. academic institution.
Note 3 to paragraph (a): The export or reexport to Cuba of goods
(including software) or technology subject to the Export Administration
Regulations (15 CFR parts 730 through 774) may require separate
authorization from the Department of Commerce.
Note 4 to paragraph (a): See Sec. 515.590(a) for an authorization
for the provision of educational grants, scholarships, or awards to a
Cuban national or in which Cuba or a Cuban national otherwise has an
interest.
(b) General license for people-to-people travel. The travel-related
transactions
[[Page 105]]
set forth in Sec. 515.560(c) and such additional transactions as are
directly incident to educational exchanges not involving academic study
pursuant to a degree program are authorized, provided that:
(1) Travel-related transactions pursuant to this authorization must
be for the purpose of engaging, while in Cuba, in a full-time schedule
of activities intended to enhance contact with the Cuban people, support
civil society in Cuba, or promote the Cuban people's independence from
Cuban authorities;
(2) Each traveler has a full-time schedule of educational exchange
activities that will result in meaningful interaction between the
traveler and individuals in Cuba;
(3) The predominant portion of the activities engaged in by
individual travelers is not with a prohibited official of the Government
of Cuba, as defined in Sec. 515.337 of this part, or a prohibited member
of the Cuban Communist Party, as defined in Sec. 515.338 of this part;
(4) For travel conducted under the auspices of an organization that
is a person subject to U.S. jurisdiction that sponsors such exchanges to
promote people-to-people contact, an employee, paid consultant, or agent
of the sponsoring organization must accompany each group traveling to
Cuba to ensure that each traveler has a full-time schedule of
educational exchange activities; and
Note to Sec. 515.565(b)(4): An organization that sponsors and
organizes trips to Cuba in which travelers engage in individually
selected and/or self-directed activities would not qualify for the
general license. Authorized trips are expected to be led by the
organization and to have a full-time schedule of activities in which the
travelers will participate.
(5) In addition to all other information required by Sec. 501.601 of
this chapter, persons relying on the authorization in paragraph (b) of
this section must retain records sufficient to demonstrate that each
individual traveler has engaged in a full-time schedule of activities
that satisfy the requirements of paragraphs (b)(1) through (3) of this
section. In the case of an individual traveling under the auspices of an
organization that is a person subject to U.S. jurisdiction and that
sponsors such exchanges to promote people-to-people contact, the
individual may rely on the entity sponsoring the travel to satisfy his
or her recordkeeping requirements with respect to the requirements of
paragraphs (b)(1) through (3) of this section. These records must be
furnished to the Office of Foreign Assets Control on demand pursuant to
Sec. 501.602 of this chapter.
Example 1 to Sec. 515.565(b): An organization wishes to sponsor and
organize educational exchanges not involving academic study pursuant to
a degree program for individuals to learn side-by-side with Cuban
individuals in areas such as environmental protection or the arts. The
travelers will have a full-time schedule of educational exchange
activities that will result in meaningful interaction between the
travelers and individuals in Cuba. The organization's activities qualify
for the general license, and the individual may rely on the entity
sponsoring the travel to satisfy his or her recordkeeping requirement.
Example 2 to Sec. 515.565(b): An individual plans to travel to Cuba
to participate in discussions with Cuban artists on community projects,
exchanges with the founders of a youth arts program, and to have
extended dialogue with local city planners and architects to learn about
historical restoration projects in Old Havana. The traveler will have a
full-time schedule of such educational exchange activities that will
result in meaningful interaction between the traveler and individuals in
Cuba. The individual's activities qualify for the general license,
provided that the individual satisfies the recordkeeping requirement.
Example 3 to Sec. 515.565(b): An individual plans to travel to Cuba
to participate in discussions with Cuban farmers and produce sellers
about cooperative farming and agricultural practices and have extended
dialogue with religious leaders about the influence of African
traditions and religion on society and culture. The traveler fails to
keep any records of the travel. Although the traveler will have a full-
time schedule of educational exchange activities that will result in
meaningful interaction between the traveler and individuals in Cuba, the
traveler's failure to keep records means that the individual's
activities do not qualify for the general license.
Example 4 to Sec. 515.565(b): An individual plans to travel to Cuba
to rent a bicycle to explore the streets of Havana, engage in brief
exchanges with shopkeepers while making purchases, and have casual
conversations with waiters at restaurants and hotel staff. None of these
activities are educational exchange activities that will result in
meaningful
[[Page 106]]
interaction between the traveler and individuals in Cuba, and the
traveler's trip does not qualify for the general license.
Example 5 to Sec. 515.565(b): An individual plans to travel to Cuba
to participate in discussions with Cuban farmers and produce sellers
about cooperative farming and agricultural practices and have extended
dialogue with religious leaders about the influence of African
traditions and religion on society and culture. The individual also
plans to spend a few days engaging in brief exchanges with Cuban food
vendors while spending time at the beach. Only some of these activities
are educational exchange activities that will result in meaningful
interaction between the traveler and individuals in Cuba, and the
traveler therefore does not have a full-time schedule of such activities
on each day of the trip. The trip does not qualify for the general
license.
Note to Sec. 515.565(a) and (b): Except as provided in
Sec. 515.565(b)(5), each person relying on the general authorizations in
these paragraphs, including entities sponsoring travel pursuant to the
authorization in Sec. 515.565(b), must retain specific records related
to the authorized travel transactions. See Secs. 501.601 and 501.602 of
this chapter for applicable recordkeeping and reporting requirements.
(c) Transactions related to activities that are primarily tourist-
oriented are not authorized pursuant to this section.
(d) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are related to
educational activities that do not qualify for the general licenses
under paragraph (a) or (b) of this section.
[80 FR 2296, Jan. 16, 2015, as amended at 80 FR 56922, Sept. 21, 2015;
81 FR 13992, Mar. 16, 2016; 81 FR 71377, Oct. 17, 2016]
Sec. 515.566 Religious activities in Cuba.
(a) General license. Persons subject to U.S. jurisdiction, including
religious organizations located in the United States and members and
staff of such organizations, are authorized to engage in the travel-
related transactions set forth in Sec. 515.560(c) and such additional
transactions as are directly incident to engaging in religious
activities in Cuba, provided that the travel-related transactions
pursuant to this authorization must be for the purpose of engaging,
while in Cuba, in a full-time schedule of religious activities.
Note to Sec. 515.566(a): Each person relying on the general
authorization in this paragraph must retain specific records related to
the authorized travel transactions. See Secs. 501.601 and 501.602 of
this chapter for applicable recordkeeping and reporting requirements.
(b) Financial and material donations to Cuba or Cuban nationals are
not authorized by this section.
Note to Sec. 515.566(b): See Sec. 515.570 regarding authorized
remittances to religious organizations in Cuba and for other purposes.
See Sec. 515.533 regarding the exportation of items from the United
States to Cuba.
(c) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are related to religious
activities that do not qualify for the general license under paragraph
(a) of this section.
Note to Sec. 515.566: See Sec. 515.573 for an authorization
permitting religious organizations engaging in activities authorized
pursuant to this section to establish a physical presence in Cuba,
including an authorization to open and maintain accounts at Cuban
financial institutions.
[80 FR 2297, Jan. 16, 2015, as amended at 80 FR 56923, Sept. 21, 2015]
Sec. 515.567 Public performances, clinics, workshops, athletic and
other competitions, and exhibitions.
(a) General license for amateur and semi-professional international
sports federation competitions. The travel-related transactions set
forth in Sec. 515.560(c) and such other transactions as are directly
incident to participation in athletic competitions in Cuba by amateur or
semi-professional athletes or athletic teams, or organization of such
competitions, are authorized, provided that:
(1) The athletic competition in Cuba is held under the auspices of
the international sports federation for the relevant sport;
(2) The U.S. participants in the athletic competition are selected
by the U.S. federation for the relevant sport; and
(3) The competition is open for attendance, and in relevant
situations, participation, by the Cuban public.
(b) General license for public performances, clinics, workshops,
other athletic
[[Page 107]]
or non-athletic competitions, and exhibitions. The travel-related
transactions set forth in Sec. 515.560(c) and such other transactions as
are directly incident to participation in or organization of a public
performance, clinic, workshop, athletic competition not covered by
paragraph (a) of this section, non-athletic competition, or exhibition
in Cuba by participants in or organizers of such activities are
authorized, provided that the event is open for attendance, and in
relevant situations participation, by the Cuban public.
Example 1 to Sec. 515.567(a) and (b): An amateur baseball team
wishes to travel to Cuba to compete against a Cuban team in a baseball
game in Cuba. The game will not be held under the auspices of the
international sports federation for baseball. The baseball team's
activities therefore would not qualify for the general license in
paragraph (a). The game will, however, be open to the Cuban public. The
baseball team's activities would qualify for the general license in
paragraph (b).
Example 2 to Sec. 515.567(a) and (b): A U.S. concert promoter wishes
to organize a musical event in Cuba that would be open to the public and
feature U.S. musical groups. The organizing of the musical event in Cuba
by the U.S. concert promoter and the participation by U.S. musical
groups in the event would qualify for the general license in paragraph
(b).
Note 1 to Sec. 515.567(a) and (b): Each person relying on the
general authorizations in these paragraphs must retain specific records
related to the authorized travel transactions. See Secs. 501.601 and
501.602 of this chapter for applicable recordkeeping and reporting
requirements.
Note 2 to Sec. 515.567(a) and (b): Transactions incident to the
organization of amateur and semi-professional international sports
federation competitions and public performances, clinics, workshops,
other athletic or non-athletic competitions, and exhibitions include
marketing related to such events in Cuba.
(c) An entire group does not qualify for the general license in
paragraph (a) or (b) of this section merely because some members of the
group qualify individually.
(d) Specific licenses. Specific licenses may be issued on a case-by-
case basis authorizing the travel-related transactions set forth in
Sec. 515.560(c) and such other transactions as are related to public
performances, clinics, workshops, athletic and other competitions, and
exhibitions that do not qualify for the general licenses under
paragraphs (a) or (b) of this section.
[80 FR 2298, Jan. 16, 2015, as amended at 81 FR 4585, Jan. 27, 2016]
Sec. 515.568 [Reserved]