[Federal Register Volume 61, Number 139 (Thursday, July 18, 1996)]
[Rules and Regulations]
[Pages 37385-37386]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18255]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 515


Cuban Assets Control Regulations; Indirect Financing in Cuba, 
Civil Penalties.

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule; amendments.

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SUMMARY: This rule amends the Cuban Assets Control Regulations to bring 
them into conformity with the Cuban Liberty and Democratic Solidarity 
(LIBERTAD) Act of 1996. This rule adds a new prohibition on bank 
financing, and makes other changes to the regulations governing civil 
penalties consistent with amendments to the Trading with the Enemy Act 
contained in the Libertad Act.

EFFECTIVE DATE: March 12, 1996, except for the amendment to 
Sec. 515.701 which is effective July 18, 1996.

FOR FURTHER INFORMATION CONTACT: Steven I. Pinter, Chief of Licensing 
(tel.: 202/622-2480); Betsy Sue Scott, Senior Program Manager, Civil 
Penalties Program (tel.: 202/622-6140); or William B. Hoffman, Chief 
Counsel (tel.: 202/622-2410), Office of Foreign Assets Control, 
Department of the Treasury, Washington, DC 20220.

SUPPLEMENTARY INFORMATION:

Electronic and Facsimile Availability

    This document is available as an electronic file on The Federal 
Bulletin Board the day of publication in the Federal Register. By 
modem, dial 202/512-1387 and type ``/GO FAC,'' or call 202/512-1530 for 
disk or paper copies. This file is available for downloading without 
charge in WordPerfect 5.1, ASCII, and Adobe AcrobatTM readable 
(*.PDF) formats. For Internet access, the address for use with the 
World Wide Web (Home Page), Telnet, or FTP protocol is: 
fedbbs.access.gpo.gov. The document is also accessible for downloading 
in ASCII format without charge from Treasury's Electronic Library 
(``TEL'') in the ``Business, Trade and Labor Mall'' of the FedWorld 
bulletin board. By modem, dial 703/321-3339, and select the appropriate 
self-expanding file in TEL. For Internet access, use one of the 
following protocols: Telnet = fedworld.gov (192.239.93.3); World Wide 
Web (Home Page) = http://www.fedworld.gov; FTP = ftp.fedworld.gov 
(192.239.92.205). Additional information concerning the programs of the 
Office of Foreign Assets Control is available for downloading from the 
Office's Internet Home Page: http://www.ustreas.gov/treasury/services/
fac/fac.html, or in fax form through the Office's 24-hour fax-on-demand 
service: call 202/622-0077 using a fax machine, fax modem, or touch 
tone telephone.

Background

    The enactment on March 12, 1996, of the Cuban Liberty and 
Democratic Solidarity (LIBERTAD) Act of 1996, sections 1-401, Pub. L. 
104-114, 110 Stat.785 (the ``Libertad Act'') requires amendment of the 
Cuban Assets Control Regulations, 31 CFR part 515 (the 
``Regulations''), to effect certain changes in the enforcement of the 
Cuban embargo contained in the Libertad Act.
    Section 515.208 is added to the Regulations to include a specific 
prohibition on knowingly making a loan, extending credit or other 
financing by a United States national, permanent resident alien, or a 
United States agency for the purpose of financing transactions 
involving confiscated property, the claim to which is owned by a United 
States national. (All transactions with respect to property or 
interests in property of the Cuban Government or Cuban nationals are 
prohibited pursuant to Sec. 515.201 of the Regulations.) Sections 
515.334, .335, .336, and .337 are added to the Regulations to 
incorporate definitions for ``United States national,'' 
``confiscated,'' ``property,'' and ``permanent resident alien'' as used 
in the Libertad Act's prohibition on financing, contained in 
Sec. 515.208. Section 515.701 is amended to state that violations of 
the prohibition on financing are subject to the civil penalties 
described in that section.
    Section 515.701 is further amended to describe the civil penalty 
authority contained in section 16 of the Trading with the Enemy Act, 50 
U.S.C. App. 1-44, as amended by the Libertad Act. Certain restrictions 
on the use of civil penalty authority were eliminated by the Act and 
references to those restrictions are removed.
    Because the Regulations involve a foreign affairs function, 
Executive Order 12866 and the provisions of the Administrative 
Procedure Act, 5 U.S.C. 553, requiring notice of proposed rulemaking, 
opportunity for public participation, and delay in effective date, are 
inapplicable. Because no

[[Page 37386]]

notice of proposed rulemaking is required for this rule, the Regulatory 
Flexibility Act, 5 U.S.C. 601-612, does not apply.

List of Subjects in 31 CFR Part 515

    Administrative practice and procedure, Air carriers, Banks, 
banking, Cuba, Currency, Estates, Exports, Fines and penalties, Foreign 
investment in the United States, Foreign trade, Imports, Informational 
materials, Publications, Reporting and recordkeeping requirements, 
Securities, Shipping, Specially designated nationals, Travel 
restrictions, Trusts and trustees, Vessels.

    For the reasons set forth in the preamble, 31 CFR part 515 is 
amended as set forth below:

PART 515--CUBAN ASSETS CONTROL REGULATIONS

    1. The authority citation for part 515 is revised to read as 
follows:
    Authority: 50 U.S.C. App. 144; 22 U.S.C. 6001-6010; 22 U.S.C. 
2370(a); Pub. L. 104-114, 106 Stat. 785 (22 U.S.C. 6021-6091); Proc. 
3447, 27 FR 1085, 3 CFR, 1959-1963 Comp., p. 157; E.O. 9193, 7 FR 
5205, 3 CFR, 1938-1943 Comp., p. 1147; E.O. 9989, 13 FR 4891, 3 CFR, 
1943-1948 Comp., p. 748; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., 
p. 614.

Subpart B--Prohibitions

    2. Section 515.208 is added to read as follows:


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.

Subpart C--Definitions

    3. Section 515.311 is amended by redesignating the existing 
paragraph as (a) and adding paragraph (b) to read as follows:


Sec. 515.311  Property; property interests.

    (a) * * *
    (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.

    4. Section 515.334 is added to read as follows:


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.

    5. Section 515.335 is added to read as follows:


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.

    6. Section 515.336 is added to read as follows:


Sec. 515.336  Confiscated.

    As used in Sec. 515.208, the term confiscated refers to:
    (a) The nationalization, expropriation, or other seizure by the 
Cuban Government of ownership or control of property, on or after 
January 1, 1959:
    (1) Without the property having been returned or adequate and 
effective compensation provided; or
    (2) Without the claim to the property having been settled pursuant 
to an international claims settlement agreement or other mutually 
accepted settlement procedure; and
    (b) The repudiation by the Cuban Government of, the default by the 
Cuban Government on, or the failure of the Cuban Government to pay, on 
or after January 1, 1959:
    (1) A debt of any enterprise which has been nationalized, 
expropriated, or otherwise taken by the Cuban Government;
    (2) A debt which is a charge on property nationalized, 
expropriated, or otherwise taken by the Cuban Government; or
    (3) A debt which was incurred by the Cuban Government in 
satisfaction or settlement of a confiscated property claim.

Subpart G--Penalties

    7. Section 515.701 is amended by removing paragraph (a)(5), 
redesignating paragraph (a)(6) as (a)(5), and adding paragraph (d) to 
read as follows:


Sec. 515.701  Penalties.

* * * * *
    (d) Attention is directed to 22 U.S.C. 6033, which provides that a 
violation of the prohibition against extending a loan, credit, or other 
financing for the purpose of financing transactions involving 
confiscated property, as contained in Sec. 515.208 of this part, shall 
be punishable by such civil penalties as are applicable to violations 
of this part.

    Dated: July 2, 1996.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: July 9, 1996.
James E. Johnson,
Assistant Secretary (Enforcement).
[FR Doc. 96-18255 Filed 7-15-96; 1:09 pm]
BILLING CODE 4810-25-F