[Federal Register Volume 70, Number 37 (Friday, February 25, 2005)]
[Rules and Regulations]
[Pages 9225-9226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-3651]



[[Page 9225]]

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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 515


Cuban Assets Control Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

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SUMMARY: The Office of Foreign Assets Control (``OFAC'') of the U.S. 
Department of the Treasury is amending the Cuban Assets Control 
Regulations, 31 CFR part 515 (the ``CACR''), to clarify the meaning of 
the term ``payment of cash in advance,'' which is used in the 
restrictions on payment and financing terms for authorized exports from 
the United States to Cuba.

DATES: Effective Date: February 22, 2005.

FOR FURTHER INFORMATION CONTACT: Chief of Policy Planning and Program 
Management, tel. (202) 622-4855, Chief of Licensing, tel.: (202) 622-
2480, Chief of Compliance, tel. (202) 622-2490, or Chief Counsel, tel.: 
(202) 622-2410, Office of Foreign Assets Control, Department of the 
Treasury, Washington, DC 20220 (not toll free numbers).

SUPPLEMENTARY INFORMATION:

Electronic and Facsimile Availability

    This file is available for download without charge in ASCII and 
Adobe Acrobat readable (*.PDF) formats at GPO Access. GPO Access 
supports HTTP, FTP, and Telnet at fedbbs.access.gpo.gov. It may also be 
accessed by modem dialup at (202) 512-1387 followed by typing ``/GO/
FAC.'' Paper copies of this document can be obtained by calling the 
Government Printing Office at (202) 512-1530. This document and 
additional information concerning the programs of the Office of Foreign 
Assets Control are available for downloading from the Office's Internet 
Home Page: http://www.treas.gov/ofac, or via FTP at ofacftp.treas.gov. 
Facsimiles of information are available through the Office's 24-hour 
fax-on-demand service: call (202) 622-0077 using a fax machine, fax 
modem, or (within the United States) a touch-tone telephone.

Background

    Section 908(b)(1) of the Trade Sanctions Reform and Export 
Enhancement Act of 2000, Pub. L. 106-387, prohibits U.S. persons from 
providing payment or financing terms for authorized sales of 
agricultural items to Cuba or any person in Cuba other than through 
``payment of cash in advance'' or certain financing by third-country 
financial institutions. Last fall, U.S. financial institutions stopped 
payments that were in process and requested guidance from the Treasury 
as to whether the term required the seller to receive payment before 
shipping the goods from the United States or before delivering the 
goods to the Cuban purchaser.
    To mitigate the immediate impact on the transfer of such payments, 
OFAC adopted an interim policy of issuing specific licenses that 
authorized the unblocking of such payments pending the issuance of 
further guidance clarifying the meaning of the term ``payment of cash 
in advance.'' OFAC created this specific licensing policy to ensure the 
Cuban people did not experience a disruption in agricultural shipments 
to Cuba and to avoid any unnecessary disruption of U.S. business.
    With this final rule, OFAC is amending paragraph (a)(2) of Sec.  
515.533 of the CACR to clarify that the term ``payment of cash in 
advance'' means that payment is received by the seller or the seller's 
agent prior to shipment of the goods from the port at which they are 
loaded. This conforms to the common understanding of the term in 
international trade finance. In order to continue to avoid a disruption 
in agricultural shipments to Cuba, OFAC is amending paragraph (d) of 
Sec.  515.533 to provide a general license authorizing the processing 
of payments received for certain exports to Cuba that are shipped prior 
to receipt of payment for a limited time. This general license only 
applies when the goods are shipped from the port at which they are 
loaded on or before March 24, 2005 and when payment is received by a 
U.S. banking institution on or before March 24, 2005 and prior to 
transfer of title to, and control of, the goods to the Cuban purchaser.

Public Participation

    Because the CACR involve a foreign affairs function, the provisions 
of Executive Order 12866 and the Administrative Procedure Act (5 U.S.C. 
553) (the ``APA'') requiring notice of proposed rulemaking, opportunity 
for public participation, and delay in effective date are inapplicable. 
Because no notice of proposed rulemaking is required for this rule, the 
Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

Paperwork Reduction Act

    The collections of information related to the CACR are contained in 
31 CFR part 501 (the ``Reporting, Procedures and Penalties 
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507), those collections of information have been approved by 
the Office of Management and Budget under 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 the collection of 
information displays a valid control number.

List of Subjects in 31 CFR Part 515

    Administrative practice and procedure, Banks, Banking, Blocking of 
assets, Cuba, Currency, Foreign trade, Imports, Reporting and 
recordkeeping requirements, Securities, Travel restrictions.


0
For the reasons set forth in the preamble, part 515 of 31 CFR chapter V 
is amended as follows:

PART 515--CUBAN ASSETS CONTROL REGULATIONS

0
1. The authority citation for 31 CFR part 515 continues to read as 
follows:

    Authority: 18 U.S.C. 2332d; 22 U.S.C. 2370(a), 6001-6010; 31 
U.S.C. 321(b); 50 U.S.C. App. 1-44; Pub. L. 101-410, 104 Stat. 890 
(28 U.S.C. 2461 note); Pub. L. 106-387, 114 Stat. 1549; E.O. 9193, 7 
FR 5205, 3 CFR, 1938-1943 Comp., p. 1147; E.O. 9989, 13 FR 4891, 3 
CFR, 1943-1948 Comp., p. 748; Proc. 3447, 27 FR 1085, 3 CFR, 1959-
1963 Comp., p. 157; E.O. 12854, 58 FR 36587. 3 CFR, 1993 Comp., p. 
614.

Subpart E--Licenses, Authorizations, and Statements of Licensing 
Policy

0
2. Amend Sec.  515.533 by revising paragraphs (a)(2) introductory text 
and (a)(2)(i) and by adding paragraph (d) to read as follows:


Sec.  515.533  Transactions incident to exportations from the United 
States to Cuba and reexportations of U.S.-origin items to Cuba; 
negotiation of executory contracts.

    (a) * * *
    (2) Only the following payment and financing terms may be used:
    (i) Payment of cash in advance. For the purposes of this section, 
the term ``payment of cash in advance'' means that payment is received 
by the seller or the seller's agent prior to shipment of the goods from 
the port at which they are loaded;
* * * * *
    (d) In addition to those transactions authorized pursuant to 
paragraph (a) of this section, all transactions ordinarily incident to 
the processing of payments received for items exported from the United 
States to any person within Cuba are authorized, provided that:
    (1) The exportation is licensed or otherwise authorized by the 
Department

[[Page 9226]]

of Commerce under the provisions of the Export Administration Act of 
1979, as amended (50 U.S.C. App. 2401-2420) (see the Export 
Administration Regulations, 15 CFR 730-774);
    (2) The items are shipped from the port at which they are loaded on 
or before March 24, 2005; and
    (3) Payment is received by a U.S. banking institution on or before 
March 24, 2005, and prior to the transfer of title to, and control of, 
the exported items to the Cuban purchaser.
* * * * *

    Dated: February 18, 2005.
Robert W. Werner,
Director, Office of Foreign Assets Control.
    Approved: February 18, 2005.
Juan C. Zarate,
Assistant Secretary for Terrorist Financing, Department of the 
Treasury.
[FR Doc. 05-3651 Filed 2-22-05; 3:00 pm]
BILLING CODE 4810-25-P