[Federal Register Volume 71, Number 90 (Wednesday, May 10, 2006)]
[Rules and Regulations]
[Pages 27199-27203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-4351]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 594, 595 and 597


Global Terrorism Sanctions Regulations; Terrorism Sanctions 
Regulations; Foreign Terrorist Organizations Sanctions Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

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SUMMARY: The Treasury Department's Office of Foreign Assets Control 
(``OFAC'') is revising the Global Terrorism Sanctions Regulations, the 
Terrorism Sanctions Regulations, and the Foreign Terrorist 
Organizations Sanctions Regulations to add general licenses authorizing 
certain transactions with the Palestinian Authority (``PA'').

DATE: Effective May 10, 2006.

FOR FURTHER INFORMATION CONTACT: Assistant Director of Compliance, 
Outreach & Implementation, tel.: 202/622-2490, Assistant Director of 
Licensing, tel.: 202/622-2480, Assistant Director of Policy, tel.: 202/
622-4855, Office of Foreign Assets Control, or Chief Counsel (Foreign 
Assets Control), tel.: 202/622-2410, Office of the General Counsel, 
Department of the Treasury, Washington, DC 20220 (not toll free 
numbers).

SUPPLEMENTARY INFORMATION:

Electronic and Facsimile Availability

    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.

Background

    OFAC administers three sanctions programs with respect to 
terrorists and terrorist organizations. The Terrorism Sanctions 
Regulations, 31 CFR part 595 (``TSR''), implement Executive Order 12947 
of January 23, 1995, in which the President declared a national 
emergency with respect to ``grave acts of violence committed by foreign 
terrorists that disrupt the Middle East peace process'.'' The Global 
Terrorism Sanctions Regulations, 31 CFR part 594 (``GTSR''), implement 
Executive Order 13224 of September 23, 2001, in which the President 
declared an emergency more generally with respect to ``grave acts of 
terrorism and threats of terrorism committed by foreign terrorists'.'' 
The Foreign Terrorist Organizations Sanctions Regulations, 31 CFR part 
597 (``FTOSR''), implement provisions of the Antiterrorism and 
Effective Death Penalty Act of 1996 (``AEDPA'').
    HAMAS, members of which now form the majority party within the 
Palestinian Legislative Council and hold positions of authority within 
the government including the position of Prime Minister, is a target of 
each of these sanctions programs, resulting in the blocking of any 
property and interests in property of HAMAS that are in the United 
States or hereafter come within the United States, or that are in or 
hereafter come within the possession or control of a United States 
person. These restrictions prohibit U.S. persons from dealing in 
property or interests in property of HAMAS. OFAC has determined that, 
as a result of the recent elections, HAMAS has a property interest in 
the transactions of the Palestinian Authority. Accordingly, pursuant to 
the TSR, the GTSR and the FTOSR, U.S. persons are prohibited from 
engaging in transactions with the Palestinian Authority unless 
authorized. Notwithstanding the prohibitions, OFAC, consistent with 
current foreign policy, is authorizing U.S. persons to engage in 
certain transactions in which the Palestinian Authority may have an 
interest. It should be noted that the prohibitions involving the 
Palestinian Authority do not bar all transactions involving individuals 
and entities in Palestinian territory.

Executive Order 12866, Administrative Procedure Act, Regulatory 
Flexibility Act, and Paperwork Reduction Act

    Because the regulations at issue involve a foreign affairs 
function, the provisions of Executive Order 12866 and the 
Administrative Procedure Act (5 U.S.C. 553) requiring notice of 
proposed rulemaking, opportunity for public participation, and delay in 
effective date are inapplicable. Because no notice of proposed 
rulemaking is required for this rule, the Regulatory Flexibility Act (5 
U.S.C. 601-612) does not apply.
    The Paperwork Reduction Act does not apply because this rule does 
not impose information collection requirements that would require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501 et 
seq.

List of Subjects

31 CFR Part 594

    Administrative practice and procedure, Banks, Banking, Penalties, 
Reporting and recordkeeping requirements, Terrorism.

31 CFR Part 595

    Administrative practice and procedure, Banks, Banking, Currency, 
Foreign investments in United States, Penalties, Reporting and 
recordkeeping requirements, Securities, Terrorism.

31 CFR Part 597

    Administrative practice and procedure, Banks, Banking, Currency, 
Foreign investments in United States, Penalties, Reporting and 
recordkeeping requirements, Securities, Terrorism.

0
For the reasons set forth in the preamble, and under the authority of 
IEEPA and AEDPA, 31 CFR chapter V is amended by amending the 
interpretations and licenses provisions in 31 CFR parts 594, 595, and 
597 as set forth below.

PART 594--GLOBAL TERRORISM SANCTIONS REGULATIONS

0
1. The authority citation for part 594 continues to read as follows:

    Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 31 U.S.C. 321(b); 50 
U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 
U.S.C. 2461 note); E.O. 13224, 66 FR 49079,

[[Page 27200]]

September 25, 2001; E.O. 13268, 67 FR 44751, July 3, 2002; 3 CFR, 
2002 Comp., p. 240; E.O. 13284, 64 FR 4075, January 28, 2003.

Subpart D--Interpretations

0
1. Add a new Sec.  594.411 to subpart D to read as follows:


Sec.  594.411  Palestinian Authority.

    Following the January 2006 Palestinian elections, Hamas, a 
designated terrorist entity whose property and interests in property 
are blocked pursuant to Sec.  594.201, has been determined to have a 
property interest in the transactions of the Palestinian Authority. 
Accordingly, pursuant to Sec. Sec.  594.201 and 594.204, U.S. persons 
are prohibited from engaging in transactions with the Palestinian 
Authority unless authorized. Certain transactions with the Palestinian 
Authority may be authorized by license, see subpart E of this part.

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

0
2. Add a new Sec.  594.510 to subpart E to read as follows:


Sec.  594.510  Official activities of certain international 
organizations; U.S. person employees of certain governments.

    (a) Effective April 12, 2006, all transactions and activities with 
the Palestinian Authority otherwise prohibited under this part that are 
for the conduct of the official business of the United Nations are 
authorized, provided that no payment pursuant to this license may 
involve a debit to an account of the Palestinian Authority on the books 
of a U.S. financial institution or to any account blocked pursuant to 
this part.
    (b) Effective April 12, 2006, U.S. persons who are employees of the 
governments of states bordering the West Bank or Gaza are authorized to 
engage in all transactions and activities outside of the United States 
with the Palestinian Authority that are otherwise prohibited under this 
part in support of the U.S. persons' official duties, provided that no 
payment pursuant to this license may involve a debit to an account of 
the Palestinian Authority on the books of a U.S. financial institution 
or to any account blocked pursuant to this part.
    (c) For purposes of this section only, the term ``United Nations'' 
means its principal organs, including funds, bodies, commissions, 
agencies, departments and other entities of the Security Council, 
General Assembly, Economic and Social Council and Secretariat, 
specifically including, among others, the World Bank, the International 
Monetary Fund, the World Food Programme, and the World Health 
Organization.

0
3. Add a new Sec.  594.511 to subpart E to read as follows:


Sec.  594.511  Travel, employment, residence and maintenance 
transactions with the Palestinian Authority.

    Effective April 12, 2006, U.S. persons are authorized to engage in 
all transactions with the Palestinian Authority otherwise prohibited 
under this part that are ordinarily incident to their travel to or 
from, or employment, residence or personal maintenance within, the 
jurisdiction of the Palestinian Authority, including, but not limited 
to, receipt of salaries, payment of living expenses and acquisition of 
goods or services for personal use. Nothing in this license authorizes 
any debit to an account of the Palestinian Authority on the books of a 
U.S. financial institution or to any account blocked pursuant to this 
part.

0
4. Add a new Sec.  594.512 to subpart E to read as follows:


Sec.  594.512  Payment of taxes and incidental fees to the Palestinian 
Authority.

    Effective April 12, 2006, U.S. persons are authorized to pay taxes 
or fees to, and purchase or receive permits or public utility services 
from, the Palestinian Authority where such transactions are necessary 
and ordinarily incident to such persons' day-to-day operations. Nothing 
in this license authorizes a debit to an account of the Palestinian 
Authority on the books of a U.S. financial institution or to any 
account blocked pursuant to this part.

0
5. Add a new Sec.  594.513 to subpart E to read as follows:


Sec.  594.513  Transactions with entities under the control of the 
Palestinian President and certain other entities.

    (a) Effective April 12, 2006, U.S. persons are authorized to engage 
in all transactions otherwise prohibited under this part with the 
following entities and individuals:
    (1) The Palestinian Authority Presidency, including only the Office 
of the President, Presidential Security, General Intelligence 
Apparatus, Governors and Governorate staff, the Attorney General's 
Office, the Palestine Investment Fund (PIF), the Border Crossings 
Administration, and the Palestine Broadcasting Corporation (including 
the Voice of Palestine, Wafa News Agency, and the General Public 
Information Agency/State Information Services);
    (2) The Palestinian Judiciary, including the Higher Judicial 
Council;
    (3) Members of the Palestinian Legislative Council (PLC) who were 
not elected to the PLC on the party slate of Hamas or any other Foreign 
Terrorist Organization (FTO), Specially Designated Terrorist (SDT), or 
Specially Designated Global Terrorist (SDGT); and
    (4) The following independent agencies: The Central Elections 
Commission; the Independent Citizens Rights Commission; the General 
Audit Authority/External Audit Agency; and the Palestinian Monetary 
Authority.
    (b) Effective April 12, 2006, U.S. financial institutions are 
authorized to reject transactions with members of the Palestinian 
Legislative Council (PLC) who were elected to the PLC on the party 
slate of Hamas or any other Foreign Terrorist Organization (FTO), 
Specially Designated Terrorist (SDT), or Specially Designated Global 
Terrorist (SDGT), provided that any such individuals are not named on 
OFAC's list of Specially Designated Nationals and Blocked Persons.
    (c) Nothing in this license authorizes a debit to an account of the 
Palestinian Authority on the books of a U.S. financial institution or 
to any account blocked pursuant to this part.

0
6. Add a new Sec.  594.514 to subpart E to read as follows:


Sec.  594.514  Concluding activities with the Palestinian Authority.

    Effective April 12, 2006, all transactions and activities with the 
Palestinian Authority otherwise prohibited under this part are 
authorized through May 12, 2006, provided that they are necessary to 
conclude ongoing contracts or programs with the Palestinian Authority, 
and further provided that no payment pursuant to this license may 
involve a debit to an account of the Palestinian Authority on the books 
of a U.S. financial institution or to any account blocked pursuant to 
this part.

0
7. Add a new Sec.  594.515 to subpart E to read as follows:


Sec.  594.515  In-kind donations of medicine.

    Effective April 12, 2006, nongovernmental organizations that are 
U.S. persons are authorized to provide in-kind donations of medicine to 
the Palestinian Authority Ministry of Health, provided that such 
donations are strictly for distribution in the West Bank or Gaza and 
not intended for resale, and provided further that no payment pursuant 
to this license may involve a debit to an account of the

[[Page 27201]]

Palestinian Authority on the books of a U.S. financial institution or 
to any account blocked pursuant to this part.

PART 595--TERRORISM SANCTIONS REGULATIONS

0
1. The authority citation for part 595 continues to read as follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 
E.O. 12947, 60 FR 5079; 3 CFR, 1995 Comp., p. 319.

Subpart D--Interpretations

0
1. Add a new Sec.  595.409 to subpart D to read as follows:


Sec.  595.409  Palestinian Authority.

    Following the January 2006 Palestinian elections, Hamas, a 
designated terrorist entity whose property and interests in property 
are blocked pursuant to Sec. Sec.  595.201 and 595.204, has been 
determined to have a property interest in the transactions of the 
Palestinian Authority. Accordingly, pursuant to Sec. Sec.  595.201 and 
595.204, U.S. persons are prohibited from engaging in transactions with 
the Palestinian Authority unless authorized. Certain transactions with 
the Palestinian Authority may be authorized by license, see subpart E 
of this part.

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

0
2. Add a new Sec.  595.508 to subpart E to read as follows:


Sec.  595.508  Official activities of certain international 
organizations; U.S. person employees of certain governments.

    (a) Effective April 12, 2006, all transactions and activities with 
the Palestinian Authority otherwise prohibited under this part that are 
for the conduct of the official business of the United Nations are 
authorized, provided that no payment pursuant to this license may 
involve a debit to an account of the Palestinian Authority on the books 
of a U.S. financial institution or to any account blocked pursuant to 
this part.
    (b) Effective April 12, 2006, U.S. persons who are employees of the 
governments of states bordering the West Bank or Gaza are authorized to 
engage in all transactions and activities outside of the United States 
with the Palestinian Authority that are otherwise prohibited under this 
part in support of the U.S. persons' official duties, provided that no 
payment pursuant to this license may involve a debit to an account of 
the Palestinian Authority on the books of a U.S. financial institution 
or to any account blocked pursuant to this part.
    (c) For purposes of this section only, the term ``United Nations'' 
means its principal organs, including funds, bodies, commissions, 
agencies, departments and other entities of the Security Council, 
General Assembly, Economic and Social Council and Secretariat, 
specifically including, among others, the World Bank, the International 
Monetary Fund, the World Food Programme, and the World Health 
Organization.

0
3. Add a new Sec.  595.509 to subpart E to read as follows:


Sec.  595.509  Travel, employment, residence and maintenance 
transactions with the Palestinian Authority.

    Effective April 12, 2006, U.S. persons are authorized to engage in 
all transactions with the Palestinian Authority otherwise prohibited 
under this part that are ordinarily incident to their travel to or 
from, or employment, residence or personal maintenance within, the 
jurisdiction of the Palestinian Authority, including, but not limited 
to, receipt of salaries, payment of living expenses and acquisition of 
goods or services for personal use. Nothing in this license authorizes 
any debit to an account of the Palestinian Authority on the books of a 
U.S. financial institution or to any account blocked pursuant to this 
part.

0
4. Add a new Sec.  595.510 to subpart E to read as follows:


Sec.  595.510  Payment of taxes and incidental fees to the Palestinian 
Authority.

    Effective April 12, 2006, U.S. persons are authorized to pay taxes 
or fees to, and purchase or receive permits or public utility services 
from, the Palestinian Authority where such transactions are necessary 
and ordinarily incident to such persons' day-to-day operations. Nothing 
in this license authorizes a debit to an account of the Palestinian 
Authority on the books of a U.S. financial institution or to any 
account blocked pursuant to this part.

0
5. Add a new Sec.  595.511 to subpart E to read as follows:


Sec.  595.511  Transactions with entities under the control of the 
Palestinian President and certain other entities.

    (a) Effective April 12, 2006, U.S. persons are authorized to engage 
in all transactions otherwise prohibited under this part with the 
following entities and individuals:
    (1) The Palestinian Authority Presidency, including only the Office 
of the President, Presidential Security, General Intelligence 
Apparatus, Governors and Governorate staff, the Attorney General's 
Office, the Palestine Investment Fund (PIF), the Border Crossings 
Administration, and the Palestine Broadcasting Corporation (including 
the Voice of Palestine, Wafa News Agency, and the General Public 
Information Agency/State Information Services);
    (2) The Palestinian Judiciary, including the Higher Judicial 
Council;
    (3) Members of the Palestinian Legislative Council (PLC) who were 
not elected to the PLC on the party slate of Hamas or any other Foreign 
Terrorist Organization (FTO), Specially Designated Terrorist (SDT), or 
Specially Designated Global Terrorist (SDGT); and
    (4) The following independent agencies: The Central Elections 
Commission; the Independent Citizens Rights Commission; the General 
Audit Authority/External Audit Agency; and the Palestinian Monetary 
Authority.
    (b) Effective April 12, 2006, U.S. financial institutions are 
authorized to reject transactions with members of the Palestinian 
Legislative Council (PLC) who were elected to the PLC on the party 
slate of Hamas or any other Foreign Terrorist Organization (FTO), 
Specially Designated Terrorist (SDT), or Specially Designated Global 
Terrorist (SDGT), provided that any such individuals are not named on 
OFAC's list of Specially Designated Nationals and Blocked Persons.
    (c) Nothing in this license authorizes a debit to an account of the 
Palestinian Authority on the books of a U.S. financial institution or 
to any account blocked pursuant to this part.

0
6. Add a new Sec.  595.512 to subpart E to read as follows:


Sec.  595.512  Concluding activities with the Palestinian Authority.

    Effective April 12, 2006, all transactions and activities with the 
Palestinian Authority otherwise prohibited under this part are 
authorized through May 12, 2006, provided that they are necessary to 
conclude ongoing contracts or programs with the Palestinian Authority, 
and further provided that no payment pursuant to this license may 
involve a debit to an account of the Palestinian Authority on the books 
of a U.S. financial institution or to any account blocked pursuant to 
this part.

0
7. Add a new Sec.  595.513 to subpart E to read as follows:


Sec.  595.513  In-kind donations of medicine.

    Effective April 12, 2006, nongovernmental organizations that are 
U.S. persons are authorized to provide

[[Page 27202]]

in-kind donations of medicine to the Palestinian Authority Ministry of 
Health, provided that such donations are strictly for distribution in 
the West Bank or Gaza and not intended for resale, and provided further 
that no payment pursuant to this license may involve a debit to an 
account of the Palestinian Authority on the books of a U.S. financial 
institution or any account blocked pursuant to this part.

PART 597--FOREIGN TERRORIST ORGANIZATIONS SANCTIONS REGULATIONS

0
1. The authority citation for part 597 continues to read as follows:

    Authority: 31 U.S.C. 321(b); Pub. L. 101-410, 104 Stat. 890 (28 
U.S.C. 2461 note); Pub. L. 104-132, 110 Stat. 1214, 1248-53 (8 
U.S.C. 1189, 18 U.S.C. 2339B).

Subpart D--Interpretations

0
2. Add a new Sec.  597.407 to subpart D to read as follows:


Sec.  597.407  Palestinian Authority.

    Following the January 2006 Palestinian elections, Hamas, a 
designated terrorist entity whose property and interests in property 
are blocked pursuant to Sec.  597.201, has been determined to have a 
property interest in the transactions of the Palestinian Authority. 
Accordingly, pursuant to Sec.  597.201, U.S. persons are prohibited 
from engaging in transactions with the Palestinian Authority unless 
authorized. Certain transactions with the Palestinian Authority may be 
authorized by license, see subpart E of this part.

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

0
3. Add a new Sec.  597.506 to subpart E to read as follows:


Sec.  597.506  Official activities of certain international 
organizations; U.S. person employees of certain governments.

    (a) Effective April 12, 2006, U.S. financial institutions are 
authorized to engage in all financial transactions with the Palestinian 
Authority otherwise prohibited by this part that are for the conduct of 
the official business of the United Nations, provided that no payment 
pursuant to this license may involve a debit to an account of the 
Palestinian Authority on the books of a U.S. financial institution or 
to any account blocked pursuant to this part.
    (b) For purposes of this section only, the term ``United Nations'' 
means its principal organs, including funds, bodies, commissions, 
agencies, departments and other entities of the Security Council, 
General Assembly, Economic and Social Council and Secretariat, 
specifically including, among others, the World Bank, the International 
Monetary Fund, the World Food Programme, and the World Health 
Organization.
    (c) The retention and reporting provisions of Sec.  597.201 shall 
not apply with respect to transactions authorized by paragraph (a) of 
this section.

0
4. Add a new Sec.  597.507 to subpart E to read as follows:


Sec.  597.507  Travel, employment, residence and maintenance 
transactions with the Palestinian Authority.

    (a) Effective April 12, 2006, U.S. financial institutions are 
authorized to engage in all transactions that are ordinarily incident 
to U.S. persons' travel to or from, or employment, residence or 
personal maintenance within, the jurisdiction of the Palestinian 
Authority, including, but not limited to, receipt of salaries, payment 
of living expenses and acquisition of goods or services for personal 
use. Nothing in this license authorizes any debit to an account of the 
Palestinian Authority on the books of a U.S. financial institution or 
to any account blocked pursuant to this part.
    (b) The retention and reporting provisions of Sec.  597.201 shall 
not apply with respect to transactions authorized by paragraph (a) of 
this section.

0
5. Add a new Sec.  597.508 to subpart E to read as follows:


Sec.  597.508  Payment of taxes and incidental fees to the Palestinian 
Authority.

    (a) Effective April 12, 2006, U.S. financial institutions are 
authorized to conduct all transactions ordinarily incident to the 
following activities by U.S. persons: the payment of taxes or fees to, 
or the purchase or receipt of permits or public utility services from, 
the Palestinian Authority where such transactions are necessary and 
ordinarily incident to such persons' day-to-day operations. Nothing in 
this license authorizes a debit to an account of the Palestinian 
Authority on the books of a U.S. financial institution or to any 
account blocked pursuant to this part.
    (b) The retention and reporting provisions of Sec.  597.201 shall 
not apply with respect to transactions authorized by paragraph (a) of 
this section.

0
6. Add a new Sec.  597.509 to subpart E to read as follows:


Sec.  597.509  Transactions with entities under the control of the 
Palestinian President and certain other entities.

    (a) Effective April 12, 2006, U.S. financial institutions are 
authorized to engage in all transactions otherwise prohibited under 
this part with the following entities and individuals:
    (1) The Palestinian Authority Presidency, including only the Office 
of the President, Presidential Security, General Intelligence 
Apparatus, Governors and Governorate staff, the Attorney General's 
Office, the Palestine Investment Fund (PIF), the Border Crossings 
Administration, and the Palestine Broadcasting Corporation (including 
the Voice of Palestine, Wafa News Agency, and the General Public 
Information Agency/State Information Services);
    (2) The Palestinian Judiciary, including the Higher Judicial 
Council;
    (3) Members of the Palestinian Legislative Council (PLC) who were 
not elected to the PLC on the party slate of Hamas or any other Foreign 
Terrorist Organization (FTO), Specially Designated Terrorist (SDT), or 
Specially Designated Global Terrorist (SDGT); and
    (4) The following independent agencies: The Central Elections 
Commission; the Independent Citizens Rights Commission; the General 
Audit Authority/External Audit Agency; and the Palestinian Monetary 
Authority.
    (b) Effective April 12, 2006, U.S. financial institutions are 
authorized to reject transactions with members of the Palestinian 
Legislative Council (PLC) who were elected to the PLC on the party 
slate of Hamas or any other Foreign Terrorist Organization (FTO), 
Specially Designated Terrorist (SDT), or Specially Designated Global 
Terrorist (SDGT), provided that any such individuals are not named on 
OFAC's list of Specially Designated Nationals and Blocked Persons.
    (c) Nothing in this license authorizes a debit to an account of the 
Palestinian Authority on the books of a U.S. financial institution or 
to any account blocked pursuant to this part.
    (d) The retention and reporting provisions of Sec.  597.201 shall 
not apply with respect to transactions authorized by paragraph (a) of 
this section. The retention provisions of Sec.  597.201 shall not apply 
with respect to transactions authorized by paragraph (b) of this 
section.

0
7. Add a new Sec.  597.510 to subpart E to read as follows:


Sec.  597.510  Concluding activities with the Palestinian Authority.

    (a) Effective April 12, 2006, all transactions and activities with 
the Palestinian Authority otherwise prohibited under this part are 
authorized through May 12, 2006, provided that they are necessary to 
conclude ongoing contracts or programs

[[Page 27203]]

with the Palestinian Authority, and further provided that no payment 
pursuant to this license may involve a debit to an account of the 
Palestinian Authority on the books of a U.S. financial institution or 
to any account blocked pursuant to this part.
    (b) The retention and reporting provisions of Sec.  597.201 shall 
not apply with respect to transactions authorized by paragraph (a) of 
this section.

0
8. Add a new Sec.  597.511 to subpart E to read as follows:


Sec.  597.511  In-kind donations of medicine.

    (a) Effective April 12, 2006, U.S. financial institutions are 
authorized to conduct all transactions ordinarily incident to the 
provision by nongovernmental organizations that are U.S. persons of in-
kind donations of medicine to the Palestinian Authority Ministry of 
Health, provided that such donations are strictly for distribution in 
the West Bank or Gaza and not intended for resale, and provided further 
that no payment pursuant to this license may involve a debit to an 
account of the Palestinian Authority on the books of a U.S. financial 
institution or any account blocked pursuant to this part.
    (b) The retention and reporting provisions of Sec.  597.201 shall 
not apply with respect to transactions authorized by paragraph (a) of 
this section.

    Dated: April 13, 2006.
Barbara C. Hammerle,
Acting Director, Office of Foreign Assets Control.
Stuart A. Levey,
Under Secretary, Terrorism and Financial Intelligence.
[FR Doc. 06-4351 Filed 5-9-06; 8:45 am]
BILLING CODE 4811-37-P