[Federal Register Volume 83, Number 43 (Monday, March 5, 2018)]
[Rules and Regulations]
[Pages 9182-9204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-04113]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 510


North Korea Sanctions Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

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SUMMARY: The Department of the Treasury's Office of Foreign Assets 
Control (OFAC) is amending the North Korea Sanctions Regulations and 
reissuing them in their entirety, in order to implement three recent 
Executive orders and to reference the North Korea Sanctions and Policy 
Enhancement Act of 2016 and the Countering America's

[[Page 9183]]

Adversaries Through Sanctions Act. OFAC is also incorporating several 
general licenses that have, until now, appeared only on OFAC's website 
on the North Korea Sanctions page, adding several new general licenses, 
and adding and expanding provisions to issue a more comprehensive set 
of regulations that will provide further guidance to the public. 
Finally, OFAC is updating certain regulatory provisions and making 
other technical and conforming changes. Due to the number of regulatory 
sections being updated or added, OFAC is reissuing the North Korea 
Sanctions Regulations in their entirety.

DATES: Effective: March 5, 2018.

FOR FURTHER INFORMATION CONTACT: The Department of the Treasury's 
Office of Foreign Assets Control: Assistant Director for Licensing, 
tel.: 202-622-2480, Assistant Director for Regulatory Affairs, tel: 
202-622-4855, Assistant Director for Sanctions Compliance & Evaluation, 
tel.: 202-622-2490; or the Department of the Treasury's Office of the 
Chief Counsel (Foreign Assets Control), Office of the General Counsel, 
tel.: 202-622-2410.

SUPPLEMENTARY INFORMATION: 

Electronic Availability

    This document and additional information concerning OFAC are 
available from OFAC's website (www.treasury.gov/ofac).

Background

Regulatory History and This Action

    On November 4, 2010, OFAC issued the North Korea Sanctions 
Regulations, 31 CFR part 510 (75 FR 67912, November 4, 2010) (the 
``Regulations''), to implement Executive Order 13466 of June 26, 2008 
(73 FR 36787, June 27, 2008) (E.O. 13466) and Executive Order 13551 of 
August 30, 2010 (75 FR 53837, September 1, 2010) (E.O. 13551) pursuant 
to authorities delegated to the Secretary of the Treasury in those 
orders. The Regulations were initially issued in abbreviated form for 
the purpose of providing immediate guidance to the public. On June 20, 
2011, OFAC amended the Regulations to implement Executive Order 13570 
of April 18, 2011 (76 FR 22291, April 20, 2011) (E.O. 13570) pursuant 
to authorities delegated to the Secretary of the Treasury in that order 
(76 FR 35740, June 20, 2011).
    Today, OFAC is amending the Regulations and reissuing them in their 
entirety. As set forth in more detail below, OFAC is implementing three 
recent Executive orders: Executive Order 13687 of January 2, 2015 
(``Imposing Additional Sanctions with Respect to North Korea'') (80 FR 
819, January 6, 2015) (E.O. 13687), Executive Order 13722 of March 15, 
2016 (``Blocking Property of the Government of North Korea and the 
Workers' Party of Korea, and Prohibiting Certain Transactions With 
Respect to North Korea'') (81 FR 14943, March 18, 2016) (E.O. 13722), 
and Executive Order 13810 of September 20, 2017 (``Imposing Additional 
Sanctions With Respect to North Korea'') (82 FR 44705, September 25, 
2017) (E.O. 13810). In addition, OFAC is amending the Regulations to 
reference the North Korea Sanctions and Policy Enhancement Act of 2016, 
Public Law 114-122, 130 Stat. 93 (22 U.S.C. 9201 note) (NKSPEA), and 
Title III of the Countering America's Adversaries Through Sanctions 
Act, Public Law 115-44, Aug. 2, 2017, 131 Stat. 886 (22 U.S.C. 9401 et 
seq.) (CAATSA). Additionally, OFAC is incorporating into the 
Regulations several new general licenses that have, until now, appeared 
only on OFAC's website on the North Korea Sanctions page, adding 
several new general licenses, and adding and expanding provisions to 
issue a more comprehensive set of regulations that will provide further 
guidance to the public. Finally, OFAC is updating certain regulatory 
provisions and making other technical and conforming changes. Due to 
the number of regulatory sections being updated or added, OFAC is 
reissuing the North Korea Sanctions Regulations in their entirety.

Executive and Statutory Authorities

    E.O. 13466. On June 26, 2008, the President, invoking the authority 
of, inter alia, the International Emergency Economic Powers Act (50 
U.S.C. 1701-1706) (IEEPA), issued E.O. 13466. In E.O. 13466, the 
President found that the 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 declared a national emergency to deal 
with that threat. The President further found that it is necessary to 
continue certain restrictions with respect to North Korea that would 
otherwise be lifted pursuant to a then-forthcoming proclamation that 
would terminate the exercise of authorities then in place under the 
Trading With the Enemy Act (50 U.S.C. App. 1 et seq.) (TWEA) with 
respect to North Korea.
    Section 1 of E.O. 13466 blocks, with certain exceptions, all 
property and interests in property of North Korea or a North Korean 
national that, pursuant to the President's authorities under the TWEA, 
were blocked as of June 16, 2000, and remained blocked immediately 
prior to the issuance of E.O. 13466.
    Section 2 of E.O. 13466 prohibits, with certain exceptions, U.S. 
persons from registering a vessel in North Korea, obtaining 
authorization for a vessel to fly the North Korean flag, or owning, 
leasing, operating, or insuring any vessel flagged by North Korea.
    E.O. 13551. On August 30, 2010, the President, invoking the 
authority of, inter alia, IEEPA and the United Nations Participation 
Act (22 U.S.C. 287c) (UNPA), and in view of United Nations Security 
Council Resolution (UNSCR) 1718 of October 14, 2006 and UNSCR 1874 of 
June 12, 2009, issued E.O 13551. In E.O. 13551, the President expanded 
the scope of the national emergency in E.O. 13466, finding that the 
continued actions and policies of the Government of North Korea--
manifested by its unprovoked attack that resulted in the sinking of a 
Republic of Korea navy ship and the deaths of those onboard; its 
actions in violation of UNSCRs, including the procurement of luxury 
goods; and its illicit and deceptive activities in international 
markets, 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.
    Section 1(a) of E.O. 13551 blocks, with certain exceptions, all 
property and interests in property that are in the United States, that 
come within the United States, or that are or come within the 
possession or control of any U.S. person of the persons listed in the 
Annex to E.O. 13551 and other persons determined by the Secretary of 
the Treasury, in consultation with the Secretary of State to meet 
certain criteria set forth in E.O. 13551.
    E.O. 13570. On April 18, 2011, the President, invoking the 
authority of, inter alia, IEEPA and section 5 of the UNPA, and in view 
of UNSCR 1718 of October 14, 2006 and UNSCR 1874 of June 12, 2009, 
issued E.O. 13570 to take additional steps to address the national 
emergency declared in E.O. 13466 and expanded in scope in E.O. 13551. 
Section 1 of E.O. 13570 prohibits, with certain exceptions, the 
importation into the United States, directly or indirectly, of any 
goods, services, or technology from North Korea.

[[Page 9184]]

    E.O. 13687. On January 2, 2015, the President, invoking the 
authority of, inter alia, IEEPA, issued E.O. 13687. In E.O. 13687, the 
President expanded the scope of the national emergency declared in E.O. 
13466, as modified in scope by and relied upon for additional steps in 
subsequent orders, finding that the provocative, destabilizing, and 
repressive actions and policies of the Government of North Korea, 
including its destructive, coercive cyber-related actions during 
November and December 2014, actions in violation of UNSCRs, and 
commission of serious human rights abuses, constitute a continuing 
threat to the national security, foreign policy, and economy of the 
United States.
    Section 1(a) of E.O. 13687 blocks, with certain exceptions, all 
property and interests in property that are in the United States, that 
come within the United States, or that are or come within the 
possession or control of any U.S. person of persons determined by the 
Secretary of the Treasury, in consultation with the Secretary of State 
to be an agency, instrumentality, or controlled entity of the 
Government of North Korea or the Workers' Party of Korea, to be an 
official of the Government of North Korea or the Workers' Party of 
Korea, or to meet other criteria set forth in E.O. 13687.
    E.O. 13722. On March 15, 2016, the President, invoking the 
authority of, inter alia, IEEPA, the UNPA, and NKSPEA, and in view of 
UNSCR 2270 of March 2, 2016, issued E.O. 13722 to take additional steps 
with respect to the national emergency declared in E.O. 13466, as 
modified in scope by and relied upon for additional steps taken in 
subsequent orders.
    Section 1(a) of E.O. 13722 blocks, with certain exceptions, all 
property and interests in property that are in the United States, that 
come within the United States, or that are or come within the 
possession or control of any U.S. person of the Government of North 
Korea or the Workers' Party of Korea. The property and interests in 
property of the Government of North Korea or the Workers' Party of 
Korea may not be transferred, paid, exported, withdrawn, or otherwise 
dealt in.
    Section 2(a) of E.O. 13722 blocks, with certain exceptions, all 
property and interests in property that are in the United States, that 
come within the United States, or that are or come within the 
possession or control of any U.S. person, of other persons determined 
by the Secretary of the Treasury, in consultation with the Secretary of 
State to operate in any industry in the North Korean economy as may be 
determined by the Secretary of the Treasury, in consultation with the 
Secretary of State, to be subject to section 2(a)(i) of E.O. 13722, 
including transportation, mining, energy, or financial services, or to 
meet other criteria set forth in E.O. 13722.
    Section 3(a) of E.O. 13722 prohibits, with certain exceptions: (i) 
The exportation or reexportation, direct or indirect, from the United 
States, or by a U.S. person, wherever located, of any goods, services, 
or technology to North Korea; (ii) new investment in North Korea by a 
U.S. person, wherever located; and (iii) any approval, financing, 
facilitation, or guarantee by a U.S. person, wherever located, of a 
transaction by a foreign person where the transaction by that foreign 
person would be prohibited by section 3(a) of E.O. 13722 if performed 
by a U.S. person or within the United States. The new exportation and 
reexportation prohibition operates in conjunction with preexisting 
comprehensive controls on North Korea that are maintained by the U.S. 
Department of Commerce under the Export Administration Regulations, 15 
CFR parts 730-774 (EAR). The Department of Commerce requires a license 
for the export from the United States of all items subject to the EAR 
(other than food or medicine) that are destined for North Korea, 
whether by U.S. persons or non-U.S. persons. It also requires a license 
for the reexport to North Korea from a third country of all items 
subject to the EAR, whether by U.S. persons or non-U.S. persons. 
Section 3(a) of E.O. 13722, in effect, complements the restrictions 
maintained by the Department of Commerce and enhances those 
restrictions by adding a prohibition against the reexportation to North 
Korea by a U.S. person, wherever located, of items that are not subject 
to the EAR, including, for example, purely foreign-origin items.
    E.O. 13810. On September 20, 2017, the President, invoking the 
authority of, inter alia, IEEPA and the UNPA, and in view of UNSCR 2321 
of November 30, 2016, UNSCR 2356 of June 2, 2017, UNSCR 2371 of August 
5, 2017, and UNSCR 2375 of September 11, 2017, issued E.O. 13810 to 
take further steps with respect to the national emergency declared in 
E.O. 13466, as modified in scope by and relied upon for additional 
steps in subsequent orders.
    Section 1(a) of E.O. 13810 blocks, with certain exceptions, all 
property and interests in property that are in the United States, that 
come within the United States, or that are or come within the 
possession or control of any U.S. person of any person determined by 
the Secretary of the Treasury, in consultation with the Secretary of 
State to have engaged in at least one significant importation from or 
exportation to North Korea of any goods, services, or technology, or to 
meet other criteria set forth in E.O. 13810.
    Section 2 of E.O. 13810 prohibits, with certain limited exceptions: 
(a) Any aircraft in which a foreign person has an interest that has 
landed at a place in North Korea from landing at a place in the United 
States within 180 days after departure from North Korea; and (b) any 
vessel in which a foreign person has an interest that has called at a 
port in North Korea within the previous 180 days, or that has engaged 
in a ship-to-ship transfer with such a vessel within the previous 180 
days, from calling at a port in the United States.
    Section 3(a) of E.O. 13810 blocks, with certain exceptions, all 
funds that are in the United States, that come within the United 
States, or that are or come within the possession or control of any 
U.S. person and that originate from, are destined for, or pass through 
a foreign bank account that has been determined by the Secretary of the 
Treasury to be owned or controlled by a North Korean person or to have 
been used to transfer funds in which any North Korean person has an 
interest. The funds described above may not be transferred, paid, 
exported, withdrawn, or otherwise dealt in.
    Section 4 of E.O. 13810 authorizes the Secretary of the Treasury, 
in consultation with the Secretary of State, to impose the sanctions 
described below on any foreign financial institution determined by the 
Secretary of the Treasury, in consultation with the Secretary of State, 
to have: (i) Knowingly conducted or facilitated any significant 
transaction on behalf of any person whose property and interests in 
property are blocked pursuant to E.O. 13551, E.O. 13687, E.O. 13722, or 
E.O. 13810, or of any person whose property and interests in property 
are blocked pursuant to Executive Order 13382 (70 FR 38567, July 1, 
2005) (``Blocking Property of Weapons of Mass Destruction Proliferators 
and Their Supporters'') in connection with North Korea-related 
activities; or (ii) knowingly conducted or facilitated any significant 
transaction in connection with trade with North Korea. With respect to 
a foreign financial institution determined to meet the criteria above, 
the Secretary of the Treasury, in consultation with the Secretary of 
State, may: (i) Prohibit the opening and prohibit or impose strict 
conditions on the maintenance of correspondent accounts or payable-
through accounts in the United States by such foreign financial 
institution; or (ii) block all

[[Page 9185]]

property and interests in property that are in the United States, that 
come within the United States, or that are or come within the 
possession or control of any U.S. person of such foreign financial 
institution, and such property and interests in property may not be 
transferred, paid, exported, withdrawn, or otherwise dealt in.
    Other Executive Order provisions. In section 1(b) of E.O. 13551, 
section 2 of E.O. 13687, section 5 of E.O. 13722, and section 1(c) of 
E.O. 13810, the President determined that the making of donations of 
certain articles, such as food, clothing, and medicine, intended to be 
used to relieve human suffering, as specified in section 203(b)(2) of 
IEEPA (50 U.S.C. 1702(b)(2)), by, to, or for the benefit of any person 
whose property and interests in property are blocked pursuant to those 
orders would seriously impair the President's ability to deal with the 
national emergency declared in E.O. 13466, as modified in scope by and 
relied upon for additional steps in the subsequent orders. The 
President therefore prohibited the donation of such items unless 
authorized by OFAC.
    Section 1(c) of E.O. 13551, section 3 of E.O. 13687, section 6 of 
E.O. 13722, and section 1(d) of E.O. 13810 provide that the prohibition 
on any transaction or dealing in blocked property or interests in 
property includes 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 those 
orders, and the receipt of any contribution or provision of funds, 
goods, or services from any such person.
    Section 3 of E.O. 13466, section 2 of E.O. 13551, section 2 of E.O. 
13570, section 5 of E.O. 13687, section 7 of E.O. 13722, and section 6 
of E.O. 13810 prohibit any transaction by a U.S. 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 
those orders, as well as any conspiracy formed to violate such 
prohibitions. Pursuant to a 2007 amendment of IEEPA clarifying that it 
is illegal to cause a violation of IEEPA, section 2 of E.O. 13551, 
section 2 of E.O. 13570, section 5 of E.O. 13687, section 7 of E.O. 
13722, and section 6 of E.O. 13810 further prohibit any transaction by 
a U.S. person or within the United States that causes a violation of 
any of those orders.
    Section 5 of E.O. 13466, section 6 of E.O. 13551, section 5 of E.O. 
13570, section 8 of E.O. 13687, section 11 of E.O. 13722, and section 
10 of E.O. 13810 authorize the Secretary of the Treasury, in 
consultation with the Secretary of State, to take such actions, 
including the promulgation of rules and regulations, and to employ all 
powers granted to the President by IEEPA, and, where relevant, the 
UNPA, as may be necessary to carry out the purposes of those orders. 
These sections also provide that the Secretary of the Treasury may 
redelegate any of these functions to other officers and agencies of the 
U.S. government.
    NKSPEA. On February 18, 2016, the President signed NKSPEA into law. 
Among other things, section 104(a) of NKSPEA provides that the 
President, with certain exceptions, shall block and prohibit all 
transactions in property and interests in property that are in the 
United States, that come within the United States, or that are or come 
within control or possession of a U.S. person of: The Government of 
North Korea, the Workers' Party of Korea, and certain other persons the 
President determines knowingly engage in certain North Korea-related 
activities.
    Section 404(a) of NKSPEA provides authority for the President to 
promulgate regulations as may be necessary to carry out the provisions 
of NKSPEA. Pursuant to Presidential Memorandum of May 18, 2016: 
Delegation of Certain Functions and Authorities under the North Korea 
Sanctions and Policy Enhancement Act of 2016, the President delegated 
to the Secretary of the Treasury, in consultation with the Secretary of 
State, the functions and authorities vested in the President by 
sections 104(a) and to the Secretary of State, the Secretary of the 
Treasury, the Secretary of Commerce, and the Director of National 
Intelligence the functions and authorities vested in the President by 
section 404(a) of NKSPEA as necessary to carry out the provisions of 
NKSPEA.
    CAATSA. On August 2, 2017, the President signed CAATSA into law. 
Title III of CAATSA, among other things, amends NKSPEA. Section 311(a) 
of CAATSA amends section 104(a) of NKSPEA to provide that the President 
shall, with certain exceptions, block and prohibit all transactions in 
property and interests in property that are in the United States, that 
come into the United States, or that are or come into the possession of 
U.S. persons of any person the President determines knowingly, directly 
or indirectly: imports, exports, or reexports to or from North Korea 
any defense article or defense service or engages in certain other 
North Korea-related activities.
    Section 333(a) of CAATSA provides that the President shall, not 
later than 180 days after the date of enactment, promulgate regulations 
as necessary for the implementation of and amendments made by title III 
of CAATSA. Pursuant to Presidential Memorandum of September 29, 2017: 
Delegation of Certain Functions and Authorities under the Countering 
America's Adversaries Through Sanctions Act of 2017, the Ukraine 
Freedom Support Act of 2014, and the Support for the Sovereignty, 
Integrity, Democracy, and Economic Stability of Ukraine Act of 2014, 
the President delegated to the Secretary of the Treasury, in 
consultation with the Secretary of State, the relevant functions and 
authorities vested in the President by section 321(b), with respect to 
section 302B(a) and (b) of the NKSPEA, as amended by CAATSA, and 
section 333 of CAATSA.
    The President, through the issuance of E.O. 13466, E.O. 13551, E.O. 
13570, E.O. 13687, E.O. 13722, and E.O. 13810, has put in place 
prohibitions and designation criteria that encompass all of the 
prohibitions and designation criteria contained in the provisions of 
NKSPEA and CAATSA discussed above and has thereby already taken the 
steps necessary to implement those provisions. While it is not legally 
necessary to take further steps, OFAC is issuing these amended 
Regulations to further implement the many provisions of E.O. 13466, 
E.O. 13551, E.O. 13570, E.O. 13687, E.O. 13722, and E.O. 13810.

Regulatory Structure

    Subpart A of the Regulations clarifies the relation of this part to 
other laws and regulations. Subpart B of the Regulations implements the 
prohibitions contained in the various Executive Orders. See, e.g., 
Sec. Sec.  510.201 and 510.208. Persons identified in the Annex to E.O. 
13551, designated for blocking by or under the authority of the 
Secretary of the Treasury pursuant to E.O. 13551, E.O. 13687, E.O. 
13722, or E.O. 13810, or otherwise subject to the blocking provisions 
of those orders, are referred to throughout the Regulations as 
``persons whose property and interests in property are blocked pursuant 
to Sec.  510.201(a).'' The names of persons listed in or designated 
pursuant to these orders are published on OFAC's Specially Designated 
Nationals and Blocked Persons List (SDN List), which is accessible via 
OFAC's website. Those names also are published in the Federal Register 
as they are added to the SDN List.
    Section 510.201 of subpart B implements the many blocking 
prohibitions contained in the Executive Orders. Sections 510.202 and 
510.203 of subpart B detail the effect of transfers of

[[Page 9186]]

blocked property in violation of the Regulations and set forth the 
requirement to hold blocked funds, such as currency, bank deposits, or 
liquidated financial obligations, in interest-bearing blocked accounts. 
Section 510.204 of subpart B provides that all expenses incident to the 
maintenance of blocked physical property shall be the responsibility of 
the owners and operators of such property, and that such expenses shall 
not be met from blocked funds, unless otherwise authorized. Section 
510.204 further provides that blocked property may, in OFAC's 
discretion, be sold or liquidated and the net proceeds placed in a 
blocked, interest-bearing account in the name of the owner of the 
property.
    Sections 510.205 through 510.209 and 510.211 set forth additional 
prohibitions pursuant to E.O. 13570, E.O. 13687, E.O. 13722, and E.O. 
13810, including prohibitions on certain North Korea-related vessel and 
aircraft transactions, the importation and exportation of goods, 
services, or technology to or from North Korea, and new investment in 
North Korea.
    Section 510.210 of subpart B implements the non-blocking provisions 
of section 4 of E.O. 13810 regarding the opening or maintenance of 
correspondent accounts or payable through accounts in the United States 
(the blocking provisions of section 4 of E.O. 13810 are implemented in 
Sec.  510.201 of subpart B). The names of foreign financial 
institutions that are determined by the Secretary of the Treasury, in 
consultation with the Secretary of State, to engage in the activities 
described in Sec.  510.210, and which are determined to be subject to 
prohibitions or strict conditions on the opening or maintaining of 
correspondent or payable-through accounts in the United States, will be 
listed on the Correspondent Account or Payable-Through Account 
Sanctions (CAPTA) List, which is accessible via OFAC's website 
(www.treasury.gov/ofac) and published in the Federal Register. This 
list also will state the prohibition or strict condition(s) that 
applies with respect to each sanctioned foreign financial institution, 
and the relevant or applicable sanctions program. The names of foreign 
financial institutions that meet these same criteria but whose property 
and interests in property are instead determined to be blocked pursuant 
to Sec.  510.201 will be published on the SDN List, which is also 
accessible via OFAC's website.
    Section 510.212 of subpart B implements the prohibitions of E.O. 
13466, E.O. 13551, E.O. 13570, E.O. 13687, E.O. 13722, and E.O. 13810 
on any transaction by a U.S. 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 those orders, and on 
any conspiracy formed to violate such prohibitions. Section 510.212 
further contains the additional prohibition, included in all but the 
first order but available for all IEEPA-based prohibitions, on any 
transaction by a U.S. person or within the United States that causes a 
violation of any of the prohibitions in any of the orders.
    Section 510.213 of subpart B details transactions that are exempt 
from the prohibitions of the Regulations pursuant to section 203(b)(1), 
(3), and (4) of IEEPA (50 U.S.C. 1702(b)(1), (3), and (4)). These 
exempt transactions relate to personal communications, the importation 
and exportation of information or informational materials, and 
transactions ordinarily incident to travel. The exemptions described in 
this section do not apply to any transactions involving property or 
interests in property of certain persons whose property and interests 
in property are blocked pursuant to the provisions of E.O. 13551, E.O. 
13722, or E.O. 13810 and that are blocked pursuant to the authority of 
the UNPA in addition to IEEPA.
    In subpart C of the Regulations, new definitions are being added to 
other key terms used in the Regulations. Because these new definitions 
were inserted in alphabetical order, the definitions that were in the 
prior abbreviated set of regulations have been renumbered. Similarly, 
in subpart D, which contains interpretations of the Regulations, 
certain provisions have been added and updated from those in the prior 
abbreviated set of regulations. Section 510.411 explains that the 
property and interests in property of an entity are blocked if the 
entity is directly or indirectly owned, whether individually or in the 
aggregate, 50 percent or more by one or more persons whose property and 
interests in property are blocked, whether or not the entity itself is 
incorporated into the SDN List. Section 510.412 provides information 
about facilitation, and Sec.  510.413 describes the non-exclusive 
factors the Secretary of the Treasury may consider when determining 
whether a transaction is significant.
    Transactions otherwise prohibited by the Regulations but found to 
be consistent with U.S. policy may be authorized by one of the general 
licenses contained in subpart E of the Regulations or by a specific 
license issued pursuant to the procedures described in subpart E of 31 
CFR part 501. Subpart E of the Regulations also contains certain 
statements of specific licensing policy in addition to the general 
licenses. General licenses and statements of licensing policy relating 
to this part also may be available through the North Korea sanctions 
page on OFAC's website: www.treasury.gov/ofac.
    With this rule, OFAC is incorporating into the Regulations, and in 
some cases amending, 10 general licenses that were previously posted 
only on OFAC's website. These general licenses have been removed from 
OFAC's website, because they have been replaced and superseded in their 
entirety by the Regulations. Nine of these general licenses were 
originally issued and posted on OFAC's website on March 16, 2016--
General Licenses 1 through 9--and then reissued and posted on OFAC's 
website on March 24, 2016, to incorporate a technical change regarding 
the date the President signed E.O. 13722. General License 1 was 
replaced and superseded in its entirety by General License 1-A, which 
was posted on OFAC's website on December 20, 2016. General License 1-A 
is now located in the Regulations at Sec.  510.510. General License 2, 
which authorizes the provision of certain legal services, is now 
located at Sec.  510.507. General License 3, which authorized certain 
blocked account-related transactions, was replaced and superseded in 
its entirety by General License 3-A, which was posted on OFAC's website 
on September 21, 2017. General License 3-A is now located at Sec.  
510.505. General License 4, regarding personal remittances, is now 
located at Sec.  510.511, and includes a cap on such remittances of 
$5,000 per year. General License 5, which authorizes certain activities 
of nongovernmental organizations, is now located at Sec.  510.512. With 
respect to General License 5, OFAC has removed an authorization 
relating to educational activities; OFAC also added an authorization 
relating to the exportation of food and medicines to harmonize with 
Department of Commerce authorities. General License 6, pertaining to 
third-country diplomatic and consular funds transfers, is now located 
at Sec.  510.515. General License 7, relating to telecommunications and 
mail service, is now located at Sec.  510.516; and General License 8, 
regarding patents and intellectual property, is now located at Sec.  
510.517. General License 9, authorizing emergency medical services, is 
now located in Sec.  510.509. On September 21, 2017, OFAC issued and 
posted on its website General License 10, authorizing the calling of 
certain vessels and landing of certain aircraft.

[[Page 9187]]

General License 10 is now located at Sec.  510.518.
    OFAC is also incorporating several new general licenses into the 
Regulations. Sections 510.506, 510.508, 510.513, and 510.514 authorize 
certain transactions relating to investment and reinvestment of certain 
funds, payments for legal services from funds originating outside the 
United States, the official business of the Federal government, and 
official activities of international organizations. Section 510.519 
authorizes certain transactions for a 10-day period related to closing 
a correspondent account or payable-through account for a foreign 
financial institution whose name is added to the CAPTA List pursuant to 
the prohibition in Sec.  510.211. This general license includes a 
reporting requirement pursuant to which a U.S. financial institution 
that maintained a correspondent account or a payable-through account 
for a foreign financial institution whose name is added to the CAPTA 
List must file a report with OFAC that provides full details on the 
closing of each such account within 30 days of the closure of the 
account. The report must include complete information on all 
transactions processed or executed in winding down and closing the 
account.
    Subpart F of the Regulations refers to subpart C of part 501 for 
recordkeeping and reporting requirements. Subpart G of the Regulations 
describes the civil and criminal penalties applicable to violations of 
the Regulations, as well as the procedures governing the potential 
imposition of a civil monetary penalty or issuance of a finding of 
violation. Subpart G also refers to appendix A of part 501 for a more 
complete description of these procedures.
    Subpart H of the Regulations refers to subpart E of part 501 for 
applicable provisions relating to administrative procedures and 
contains a delegation of certain authorities of the Secretary of the 
Treasury. Subpart I of the Regulations sets forth a Paperwork Reduction 
Act notice.

Public Participation

    Because the Regulations 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, as well as the 
provisions of Executive Order 13771, 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 Regulations 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 510

    Administrative practice and procedure, Aircraft, Banking, Blocking 
of assets, Diplomatic missions, Foreign financial institutions, Foreign 
trade, Imports, Medical services, Nongovernmental organizations, North 
Korea, Patents, Services, Telecommunications, United Nations, Vessels, 
Workers' Party of Korea.


0
For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control revises 31 CFR part 510 to 
read as follows:

PART 510--NORTH KOREA SANCTIONS REGULATIONS

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 involving blocked property.
510.202 Effect of transfers violating the provisions of this part.
510.203 Holding of funds in interest-bearing accounts; investment 
and reinvestment.
510.204 Expenses of maintaining blocked physical property; 
liquidation of blocked property.
510.205 Prohibited importation of goods, services, or technology 
from North Korea.
510.206 Prohibited exportation and reexportation of goods, services, 
or technology to North Korea.
510.207 Prohibited vessel transactions related to North Korean 
registration and flagging.
510.208 Prohibited aircraft landing or vessel calling in the United 
States.
510.209 Prohibited new investment in North Korea.
510.210 Prohibitions or strict conditions with respect to 
correspondent or payable-through accounts or blocking of certain 
foreign financial institutions identified by the Secretary of the 
Treasury.
510.211 Prohibited facilitation.
510.212 Evasions; attempts; causing violations; conspiracies.
510.213 Exempt transactions.
Subpart C--General Definitions
510.300 Applicability of definitions.
510.301 Arms or related materiel.
510.302 Blocked account; blocked property.
510.303 Correspondent account.
510.304 Effective date.
510.305 Entity.
510.306 Financial, material, or technological support.
510.307 Financial services.
510.308 Financial transaction.
510.309 Foreign financial institution.
510.310 Foreign person.
510.311 Government of North Korea.
510.312 Information or informational materials.
510.313 Interest.
510.314 Knowingly.
510.315 Licenses; general and specific.
510.316 Loans or other extensions of credit.
510.317 Luxury goods.
510.318 New investment.
510.319 North Korean person.
510.320 OFAC.
510.321 Payable-through account.
510.322 Person.
510.323 Property; property interest.
510.324 Transfer.
510.325 United States.
510.326 United States person; U.S. person.
510.327 U.S. depository institution.
510.328 U.S. financial institution.
510.329 U.S.-registered money transmitter.
510.330 U.S.-registered broker or dealer in securities.
Subpart D--Interpretations
510.401 Reference to amended sections.
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.
510.405 Exportation and reexportation of goods, services, or 
technology.
510.406 Offshore transactions involving blocked property.
510.407 Payments from blocked accounts to satisfy obligations 
prohibited.
510.408 Charitable contributions.
510.409 Credit extended and cards issued by financial institutions 
to a person whose property and interests in property are blocked.
510.410 Setoffs prohibited.
510.411 Entities owned by one or more persons whose property and 
interests in property are blocked.
510.412 Facilitation; change of policies and procedures; referral of 
business opportunities offshore.
510.413 Significant transaction(s).
Subpart E--Licenses, Authorizations, and Statements of Licensing Policy
510.501 General and specific licensing procedures.
510.502 Effect of license or other authorization.
510.503 Exclusion from licenses.
510.504 Payments and transfers to blocked accounts in U.S. financial 
institutions.

[[Page 9188]]

510.505 Entries in certain accounts for normal service charges.
510.506 Investment and reinvestment of certain funds.
510.507 Provision of certain legal services.
510.508 Payments for legal services from funds originating outside 
the United States.
510.509 Emergency medical services.
510.510 North Korean mission to the United Nations and employees of 
the United Nations.
510.511 Noncommercial, personal remittances.
510.512 Certain services in support of nongovernmental 
organizations' activities.
510.513 Official business of the Federal Government.
510.514 Official activities of international organizations.
510.515 Third-country diplomatic and consular funds transfers.
510.516 Transactions related to telecommunications and mail.
510.517 Certain transactions related to patents, trademarks, 
copyrights, and other intellectual property.
510.518 Calling of certain vessels and landing of certain aircraft.
510.519 Transactions related to closing a correspondent or payable-
through account.
Subpart F--Reports
510.601 Records and reports.
Subpart G--Penalties and Finding of Violation
510.701 Penalties.
510.702 Pre-Penalty Notice; settlement.
510.703 Penalty imposition.
510.704 Administrative collection; referral to United States 
Department of Justice.
510.705 Finding of Violation.
Subpart H--Procedures
510.801 Procedures.
510.802 Delegation of certain authorities of the Secretary of the 
Treasury.
Subpart I--Paperwork Reduction Act
510.901 Paperwork Reduction Act notice.

    Authority:  3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; 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); 
Pub. L. 114-122, 130 Stat. 93 (22 U.S.C. 9201-9255); Pub. L. 115-44, 
131 Stat 886 (22 U.S.C. 9201 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; E.O. 
13687, 80 FR 819, January 6, 2015; E.O. 13722, 81 FR 14943, March 
18, 2016; E.O. 13810, 82 FR 44705, September 25, 2017.

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.

Subpart B--Prohibitions


Sec.  510.201  Prohibited transactions involving blocked property.

    (a)(1) All property and interests in property that are in the 
United States, that come within the United States, or that are or come 
within the possession or control of any U.S. person of the Government 
of North Korea or the Workers' Party of Korea are blocked and may not 
be transferred, paid, exported, withdrawn, or otherwise dealt in.
    (2) All property and interests in property of North Korea or a 
North Korean national that were blocked pursuant to the Trading With 
the Enemy Act as of June 16, 2000 and remained blocked on June 26, 
2008, are blocked and may not be transferred, paid, exported, 
withdrawn, or otherwise dealt in.
    (3) All property and interests in property that are in the United 
States, that come within the United States, or that are or come within 
the possession or control of any U.S. person of the following persons 
are blocked and may not be transferred, paid, exported, withdrawn, or 
otherwise dealt in:
    (i) E.O. 13551 Annex. The persons listed in the Annex to Executive 
Order 13551 of August 30, 2010;
    (ii) E.O. 13551. 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 paragraphs (a)(3)(ii)(A) 
through (D) of this section or any person whose property and interests 
in property are blocked pursuant to paragraph (a)(3)(i) or (ii) of this 
section;
    (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 paragraph 
(a)(3)(i) or (ii) of this section; or
    (G) To have attempted to engage in any of the activities described 
in paragraphs (a)(3)(ii)(A) through (F) of this section;
    (iii) E.O. 13687. Any person determined by the Secretary of the 
Treasury, in consultation with the Secretary of State:
    (A) To be an agency, instrumentality, or controlled entity of the 
Government of North Korea or the Workers' Party of Korea;
    (B) To be an official of the Government of North Korea;
    (C) To be an official of the Workers' Party of Korea;
    (D) To have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services to or in 
support of, the Government of North Korea or any person whose property 
and interests in property are blocked pursuant to paragraph (a)(3)(iii) 
of this section; or
    (E) To be owned or controlled by, or to have acted or purported to 
act for or on behalf of, directly or indirectly, the Government of 
North Korea or any person whose property and interests in property are 
blocked pursuant to paragraph (a)(3)(iii) of this section;
    (iv) E.O. 13722. Any person determined by the Secretary of the

[[Page 9189]]

Treasury, in consultation with the Secretary of State:
    (A) To operate in any industry in the North Korean economy as may 
be determined by the Secretary of the Treasury, in consultation with 
the Secretary of State, to be subject to paragraph (a)(3)(iv) of this 
section, such as transportation, mining, energy, or financial services;

    Note 1 to paragraph (a)(3)(iv)(A): Any industry in the North 
Korean economy that is determined by the Secretary of the Treasury, 
in consultation with the Secretary of State, to be subject to 
paragraph (a)(3)(iv) of this section will be so identified in a 
publication in the Federal Register.

    (B) To have sold, supplied, transferred, or purchased, directly or 
indirectly, to or from North Korea or any person acting for or on 
behalf of the Government of North Korea or the Workers' Party of Korea, 
metal, graphite, coal, or software, where any revenue or goods received 
may benefit the Government of North Korea or the Workers' Party of 
Korea, including North Korea's nuclear or ballistic missile programs;
    (C) To have engaged in, facilitated, or been responsible for an 
abuse or violation of human rights by the Government of North Korea or 
the Workers' Party of Korea or any person acting for or on behalf of 
either such entity;
    (D) To have engaged in, facilitated, or been responsible for the 
exportation of workers from North Korea, including exportation to 
generate revenue for the Government of North Korea or the Workers' 
Party of Korea;
    (E) To have engaged in significant activities undermining 
cybersecurity through the use of computer networks or systems against 
targets outside of North Korea on behalf of the Government of North 
Korea or the Workers' Party of Korea;
    (F) To have engaged in, facilitated, or been responsible for 
censorship by the Government of North Korea or the Workers' Party of 
Korea;
    (G) To have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services to or in 
support of, any person whose property and interests in property are 
blocked pursuant to paragraph (a)(1) or (a)(3)(iv) of this section;
    (H) 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 paragraph 
(a)(1) or (a)(3)(iv) of this section; or
    (I) To have attempted to engage in any of the activities described 
in paragraphs (a)(3)(iv)(A) through (H) of this section;
    (v) E.O. 13810 section 1. Any person determined by the Secretary of 
the Treasury, in consultation with the Secretary of State:
    (A) To operate in the construction, energy, financial services, 
fishing, information technology, manufacturing, medical, mining, 
textiles, or transportation industries in North Korea;
    (B) To own, control, or operate any port in North Korea, including 
any seaport, airport, or land port of entry;
    (C) To have engaged in at least one significant importation from or 
exportation to North Korea of any goods, services, or technology;
    (D) To be a North Korean person, including a North Korean person 
that has engaged in commercial activity that generates revenue for the 
Government of North Korea or the Workers' Party of Korea;
    (E) To have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services to or in 
support of, any person whose property and interests in property are 
blocked pursuant to paragraph (a)(3)(v) of this section; or
    (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 paragraph 
(a)(3)(v) of this section; or
    (vi) E.O. 13810 section 4. Any person that is a foreign financial 
institution:
    (A) Determined by the Secretary of the Treasury, in consultation 
with the Secretary of State, to have, on or after September 21, 2017, 
knowingly conducted or facilitated any significant transaction:
    (1) On behalf of any person whose property and interests in 
property are blocked pursuant to Executive Order 13551, Executive Order 
13687, Executive Order 13722, or Executive Order 13810, or of any 
person whose property and interests in property are blocked pursuant to 
Executive Order 13382 in connection with North Korea-related 
activities; or
    (2) In connection with trade with North Korea; and
    (B) With respect to which the Secretary of the Treasury, in 
consultation with the Secretary of State, has exercised the authority 
to block all property and interests in property.

    Note 2 to paragraph (a)(3)(vi): See Sec.  510.210 for 
alternative sanctions that can be imposed on a foreign financial 
institution when the determination specified in paragraph 
(a)(3)(vi)(A) of this section is made.


    Note 3 to paragraph (a): The names of persons listed in or 
designated or identified pursuant to Executive Order 13551, 
Executive Order 13687, Executive Order 13722, or Executive Order 
13810 and whose property and interests in property are blocked 
pursuant to those orders and paragraph (a) of this section are 
published in the Federal Register and incorporated into OFAC's 
Specially Designated Nationals and Blocked Persons List (SDN List) 
with the identifier ``DPRK.'' The names of persons referenced in 
paragraph (a)(vi)(A)(2) of this section and listed in or designated 
or identified pursuant to Executive Order 13382 whose property and 
interests in property are blocked pursuant to Executive Order 13382 
in connection with North Korea-related activities are published in 
the Federal Register and incorporated into OFAC's SDN List with the 
identifier ``[NPWMD]'' and descriptive text ``Executive Order 13810 
Information: Subject to blocking in connection with North Korea-
related activities. The SDN List is accessible through the following 
page on OFAC's website: www.treasury.gov/sdn. Additional information 
pertaining to the SDN List can be found in appendix A to this 
chapter. See Sec.  510.411 concerning entities that may not be 
listed on the SDN List but whose property and interests in property 
are nevertheless blocked pursuant to paragraph (a) of this section. 
The property and interests in property of persons who meet the 
definition of the term Government of North Korea, as defined in 
Sec.  510.311, are blocked pursuant to paragraph (a) of this section 
regardless of whether the names of such persons are published in the 
Federal Register or incorporated into the SDN List.


    Note 4 to paragraph (a): 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 (a) of this section also are 
published in the Federal Register and incorporated into the SDN List 
with the identifier ``BPI-DPRK.''


    Note 5 to paragraph (a): 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, and administrative reconsideration of 
their status as persons whose property and interests in property are 
blocked pursuant to paragraph (a) of this section.

    (b) The prohibitions in paragraph (a) of this section include 
prohibitions on the following transactions:
    (1) 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 paragraph (a) of this 
section; and

[[Page 9190]]

    (2) The receipt of any contribution or provision of funds, goods, 
or services from any person whose property and interests in property 
are blocked pursuant to paragraph (a) of this section.
    (c) Unless authorized by this part or by a specific license 
expressly referring to this part, any dealing in securities (or 
evidence thereof) held within the possession or control of a U.S. 
person and either registered or inscribed in the name of, or known to 
be held for the benefit of, or issued by, the Government of North 
Korea, the Workers' Party of Korea, or any other person whose property 
and interests in property are blocked pursuant to paragraph (a) of this 
section is prohibited. This prohibition includes the transfer 
(including the transfer on the books of any issuer or agent thereof), 
disposition, transportation, importation, exportation, or withdrawal 
of, or the endorsement or guaranty of signatures on, any securities on 
or after the effective date. This prohibition applies irrespective of 
the fact that at any time (whether prior to, on, or subsequent to the 
effective date) the registered or inscribed owner of any such 
securities may have or might appear to have assigned, transferred, or 
otherwise disposed of the securities.
    (d) All funds that are in the United States, that come within the 
United States, or that are or come within the possession or control of 
any U.S. person and that originate from, are destined for, or pass 
through a foreign bank account that has been determined by the 
Secretary of the Treasury to be owned or controlled by a North Korean 
person, or to have been used to transfer funds in which any North 
Korean person has an interest, are blocked and may not be transferred, 
paid, exported, withdrawn, or otherwise dealt in.
    (e) Funds subject to blocking or blocking pending investigation 
pursuant to paragraph (d) of this section may be identified via actual 
or constructive notice from OFAC to relevant U.S. persons believed to 
be holding or to soon come into possession of such funds. To the extent 
a foreign bank account determined to meet the criteria contained in 
paragraph (d) of this section is publicized, it will be published in 
the Federal Register.
    (f)(1) The prohibitions in paragraph (a)(1) of this section apply 
except to the extent provided in regulations, orders, directives, or 
licenses that may be issued pursuant to this part or pursuant to the 
export control authorities implemented by the U.S. Department of 
Commerce, and notwithstanding any contract entered into or any license 
or permit granted prior to the effective date.
    (2) The prohibitions in paragraphs (a)(2), (a)(3)(i) through (iii), 
and (d) of this section apply except to the extent provided by 
regulations, orders, directives, or licenses that may be issued 
pursuant to this part, and notwithstanding any contract entered into or 
any license or permit granted prior to the effective date.
    (3) The prohibitions in paragraphs (a)(3)(iv) through (v) of this 
section apply except to the extent provided by regulations, orders, 
directives, or licenses that may be issued pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date. These prohibitions are in addition 
to the export control authorities administered by the Department of 
Commerce.


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 interests 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 interests in 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 any interest in, any property or interests 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, a license or other authorization 
issued by OFAC 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 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 OFAC 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 OFAC 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 OFAC; 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 1 to paragraph (d): The filing of a report in accordance 
with the provisions of paragraph (d)(3) of this section shall not be 
deemed evidence that the terms of paragraphs (d)(1) and (2) of this 
section have been satisfied.

    (e) Unless licensed pursuant to this part, any attachment, 
judgment, decree, lien, execution, garnishment, or other judicial 
process is null and void with respect to any property and interests 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 paragraph (e) or (f) of this section, or 
as otherwise directed or authorized by OFAC, 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

[[Page 9191]]

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) Funds held or placed in a blocked account pursuant to paragraph 
(a) of this section may not be invested in instruments the maturity of 
which exceeds 180 days.
    (c) 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.
    (d) For purposes of this section, if interest is credited to a 
separate blocked account or subaccount, the name of the account party 
on each account must be the same.
    (e) 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 paragraph 
(a) or (f) of this section.
    (f) 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.
    (g) 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, OFAC may issue licenses 
permitting or directing such sales or liquidation in appropriate cases.
    (h) Funds subject to this section may not be held, invested, or 
reinvested in a manner that provides financial or economic benefit or 
access to the Government of North Korea, the Workers' Party of Korea, 
or any other person whose property and interests in property are 
blocked pursuant to Sec.  510.201(a), nor may their holder cooperate in 
or facilitate the pledging or other attempted use as collateral of 
blocked funds or other assets.


Sec.  510.204  Expenses of maintaining blocked physical property; 
liquidation of blocked property.

    (a) Except as otherwise authorized, and notwithstanding the 
existence of any rights or obligations conferred or imposed by any 
international agreement or contract entered into or any license or 
permit granted prior to the effective date, all expenses incident to 
the maintenance of physical property blocked pursuant to Sec.  510.201 
shall be the responsibility of the owners or operators of such 
property, which expenses shall not be met from blocked funds.
    (b) Property blocked pursuant to Sec.  510.201 may, in the 
discretion of OFAC, be sold or liquidated and the net proceeds placed 
in a blocked interest-bearing account in the name of the owner of the 
property.


Sec.  510.205  Prohibited importation of goods, services, or technology 
from North Korea.

    (a) The importation into the United States, directly or indirectly, 
of any goods, services, or technology from North Korea is prohibited.
    (b) The prohibitions in this section apply except to the extent 
provided by regulations, orders, directives, or licenses that may be 
issued pursuant to this part, and notwithstanding any contract entered 
into or any license or permit granted prior to the effective date.


Sec.  510.206  Prohibited exportation or reexportation of goods, 
services, or technology to North Korea.

    (a) The exportation or reexportation, directly or indirectly, from 
the United States, or by a U.S. person, wherever located, of any goods, 
services, or technology to North Korea is prohibited.
    (b) The prohibitions in this section apply except to the extent 
provided in regulations, orders, directives, or licenses that may be 
issued pursuant to this part or pursuant to the export control 
authorities implemented by the U.S. Department of Commerce, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date.


Sec.  510.207  Prohibited vessel transactions related to North Korean 
registration and flagging.

    (a) U.S. 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.
    (b) The prohibitions in this section apply except to the extent 
provided by regulations, orders, directives, or licenses that may be 
issued pursuant to this part, and notwithstanding any contract entered 
into or any license or permit granted prior to the effective date.


Sec.  510.208  Prohibited aircraft landing or vessel calling in the 
United States.

    (a) No aircraft in which a foreign person has an interest that has 
landed at a place in North Korea may land at a place in the United 
States within 180 days after departure from North Korea.
    (b) No vessel in which a foreign person has an interest that has 
called at a port in North Korea within the previous 180 days, and no 
vessel in which a foreign person has an interest that has engaged in a 
ship-to-ship transfer with such a vessel within the previous 180 days, 
may call at a port in the United States.
    (c) The prohibitions in this section apply except to the extent 
provided by regulations, orders, directives, or licenses that may be 
issued pursuant to this part, and notwithstanding any contract entered 
into or any license or permit granted prior to the effective date.


Sec.  510.209  Prohibited new investment in North Korea.

    (a) New investment, as defined in Sec.  510.318, in North Korea by 
a U.S. person, wherever located, is prohibited.
    (b) The prohibitions in this section apply except to the extent 
provided by regulations, orders, directives, or licenses that may be 
issued pursuant to this part or pursuant to the export control 
authorities implemented by the U.S. Department of Commerce, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date.


Sec.  510.210  Prohibitions or strict conditions with respect to 
correspondent or payable-through accounts or blocking of certain 
foreign financial institutions identified by the Secretary of the 
Treasury.

    (a) Prohibited activities. A U.S. financial institution shall not:
    (1) Open or maintain a correspondent account or a payable-through 
account in the United States for a foreign financial institution for 
which the opening or maintaining of such an account is prohibited 
pursuant to this section; or
    (2) Maintain a correspondent account or a payable-through account 
in the United States in a manner that is inconsistent with any strict 
condition imposed and in effect pursuant to this section.
    (b) Sanctionable activity by foreign financial institutions. The 
Secretary of the Treasury, in consultation with the Secretary of State, 
may determine that a foreign financial institution has, on or after 
September 21, 2017, knowingly conducted or facilitated any significant 
transaction:
    (1) On behalf of any person whose property and interests in 
property are

[[Page 9192]]

blocked pursuant to Executive Order 13551, Executive Order 13687, 
Executive Order 13722, or Executive Order 13810, or on behalf of any 
person whose property and interests in property are blocked pursuant to 
Executive Order 13382 in connection with North Korea-related 
activities; or
    (2) In connection with trade with North Korea.

    Note 1 to paragraph (b): The names of persons listed in or 
designated or identified pursuant to Executive Order 13351, 
Executive Order 13687, Executive Order 13722, or Executive Order 
13810 and whose property and interests in property are blocked 
pursuant to those orders are published in the Federal Register and 
incorporated into OFAC's List of Specially Designated Nationals and 
Blocked Persons (SDN List) with the identifier ``DPRK.'' The names 
of persons listed in or designated or identified pursuant to 
Executive Order 13382 and whose property and interests in property 
are blocked pursuant to that order in connection with North Korea-
related activities are published in the Federal Register and 
incorporated into OFAC's SDN List with the identifier ``[NPWMD],'' 
and descriptive text ``Executive Order 13810 information: Subject to 
blocking in connection with North Korea-related activities''. The 
SDN List is accessible through the following page on OFAC's website: 
www.treasury.gov/sdn. Additional information pertaining to the SDN 
List can be found in Appendix A to this chapter. See Sec.  510.411 
concerning entities that may not be listed on the SDN List but whose 
property and interests in property are nevertheless blocked pursuant 
to paragraph (a) of this section. The property and interests in 
property of persons who meet the definition of the term Government 
of North Korea are blocked pursuant to paragraph (a) of this section 
regardless of whether the names of such persons are published in the 
Federal Register or incorporated into the SDN List.

    (c) Imposition of sanctions on foreign financial institutions. Upon 
determining that a foreign financial institution has engaged in 
sanctionable activity described in paragraph (b) of this section, the 
Secretary of the Treasury, in consultation with the Secretary of State, 
may:
    (1) Prohibit the opening or maintaining by a U.S. financial 
institution of a correspondent account or a payable-through account in 
the United States for the foreign financial institution; or
    (2) Impose one or more strict conditions on the maintaining by a 
U.S. financial institution of a correspondent account or a payable-
through account in the United States for the foreign financial 
institution. Such conditions may include the following:
    (i) Prohibiting or restricting any provision of trade finance 
through the correspondent account or payable-through account of the 
foreign financial institution;
    (ii) Restricting the transactions that may be processed through the 
correspondent account or payable-through account of the foreign 
financial institution to certain types of transactions, such as 
personal remittances;
    (iii) Placing monetary limits on, or limiting the volume of, the 
transactions that may be processed through the correspondent account or 
payable-through account of the foreign financial institution;
    (iv) Requiring pre-approval from the U.S. financial institution for 
all transactions processed through the correspondent account or 
payable-through account of the foreign financial institution; or
    (v) Prohibiting or restricting the processing of foreign exchange 
transactions through the correspondent account or payable-through 
account of the foreign financial institution.
    (d) Applicability of prohibitions. The prohibitions in this section 
apply except to the extent provided by regulations, orders, directives, 
or licenses that may be issued pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date.

    Note 2 to Sec.  510.210: The names of foreign financial 
institutions for which the opening or maintaining of a correspondent 
account or a payable-through account in the United States is 
prohibited or for which the maintenance of a correspondent account 
or payable-through account is subject to one or more strict 
conditions pursuant to this section will be added to the 
Correspondent Account or Payable-Through Account Sanctions (CAPTA) 
List on OFAC's website (www.treasury.gov/ofac), and published in the 
Federal Register along with the applicable prohibition or strict 
condition(s).

Sec.  510.211  Prohibited facilitation.

    (a) Except as otherwise authorized, U.S. persons, wherever located, 
are prohibited from approving, financing, facilitating, or guaranteeing 
a transaction by a foreign person where the transaction by that foreign 
person would be prohibited by Sec.  510.201(d), Sec.  510.206, or Sec.  
510.209 if performed by a U.S. person or within the United States.
    (b)(1) The prohibitions in this section with respect to Sec.  
510.201(d) apply except to the extent provided by regulations, orders, 
directives, or licenses that may be issued pursuant to this part, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date.
    (2) The prohibitions in this section with respect to Sec. Sec.  
510.206 and 510.209 apply except to the extent provided in regulations, 
orders, directives, or licenses that may be issued pursuant to this 
part or pursuant to the export control authorities implemented by the 
U.S. Department of Commerce, and notwithstanding any contract entered 
into or any license or permit granted prior to the effective date.


Sec.  510.212  Evasions; attempts; causing violations; conspiracies.

    (a) Any transaction on or after the effective date 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 part 
is prohibited.
    (b) Any conspiracy formed to violate the prohibitions set forth in 
this part is prohibited.


Sec.  510.213  Exempt transactions.

    (a) United Nations Participation Act. The exemptions described in 
this section do not apply to transactions involving property or 
interests in property of persons whose property and interests in 
property are blocked pursuant to the authority of the United Nations 
Participation Act, as amended (22 U.S.C. 287c(b)) (UNPA).

    Note 1 to paragraph (a): Persons whose property and interests in 
property are blocked pursuant to the authority of the UNPA include 
those listed on both OFAC's Specially Designated Nationals and 
Blocked Persons List (SDN List) and the Consolidated United Nations 
Security Council Sanctions List (see https://www.un.org) as well as 
persons listed on the SDN List for being owned or controlled by, or 
acting for or on behalf of, such persons.

    (b) Personal communications. The prohibitions contained in this 
part do not apply to any postal, telegraphic, telephonic, or other 
personal communication that does not involve the transfer of anything 
of value.
    (c) Information or informational materials. (1) The prohibitions 
contained in this part do not apply to the importation from any country 
and the exportation to any country of any information or informational 
materials, as defined in Sec.  510.312, whether commercial or 
otherwise, regardless of format or medium of transmission.
    (2) This section does not exempt from regulation transactions 
related to information or informational materials not fully created and 
in existence at the date of the transactions, or to the substantive or 
artistic alteration or enhancement of information or informational 
materials, or to the provision of marketing and business

[[Page 9193]]

consulting services. Such prohibited transactions include payment of 
advances for information or informational materials not yet created and 
completed (with the exception of prepaid subscriptions for widely 
circulated magazines and other periodical publications); provision of 
services to market, produce or co-produce, create, or assist in the 
creation of information or informational materials; and payment of 
royalties with respect to income received for enhancements or 
alterations made by U.S. persons to such information or informational 
materials.
    (3) This section does not exempt transactions incident to the 
exportation of software subject to the Export Administration 
Regulations, 15 CFR parts 730 through 774, or to the exportation of 
goods (including software) or technology for use in the transmission of 
any data, or to the provision, sale, or leasing of capacity on 
telecommunications transmission facilities (such as satellite or 
terrestrial network connectivity) for use in the transmission of any 
data. The exportation of such items or services and the provision, 
sale, or leasing of such capacity or facilities to a person whose 
property and interests in property are blocked pursuant to Sec.  
510.201(a) are prohibited.
    (d) Travel. The prohibitions contained in this part do not apply to 
transactions ordinarily incident to travel to or from any country, 
including importation or exportation of accompanied baggage for 
personal use, maintenance within any country including payment of 
living expenses and acquisition of goods or services for personal use, 
and arrangement or facilitation of such travel including nonscheduled 
air, sea, or land voyages.

    Note 2 to paragraph (d):  As of September 1, 2017, the U.S. 
Department of State has restricted the use of U.S. passports to 
travel into, in, or through North Korea. See 22 CFR 51.63. U.S. 
nationals who wish to travel to or within North Korea for the 
extremely limited purposes that are set forth in federal regulations 
must apply for a passport with a special validation from the 
Department of State. See travel.state.gov for additional details.

    (e) Official business. The prohibitions contained in Sec. Sec.  
510.201(a)(1), 510.201(a)(3)(iv) through (vi) and (d), 510.206, and 
510.208 through 510.211 do not apply to transactions for the conduct of 
the official business of the Federal Government or the United Nations 
and its Specialized Agencies, Programmes, Funds, and Related 
Organizations by employees, grantees, or contractors thereof.

    Note 3 to paragraph (e):  For an organizational chart listing 
the Specialized Agencies, Programmes, Funds, and Related 
Organizations of the United Nations, see the following page on the 
United Nations website: http://www.unsceb.org/directory.

Subpart C--General Definitions


Sec.  510.300  Applicability of definitions.

    The definitions in this subpart apply throughout the entire part.


Sec.  510.301  Arms or related materiel.

    The term arms or related materiel means arms or related materiel of 
all types, including any battle tanks, armored combat vehicles, large 
caliber artillery systems, combat aircraft, attack helicopters, 
warships, missiles or missile systems, or related materiel including 
spare parts.

    Note 1 to Sec.  510.301:  For additional guidance as to items 
that constitute arms or related materiel, please see determinations 
by the United Nations Security Council or its committee created 
pursuant to United Nations Security Council Resolution 1718, as well 
as designations by the Secretary of State of defense articles and 
defense services pursuant to the Arms Export Control Act and listed 
on the United States Munitions List (USML). In addition, items on 
the Commerce Control List as well as certain uncontrolled items that 
are subject to the Export Administration Act may be considered 
related materiel.

Sec.  510.302  Blocked account; blocked property.

    For the purposes of this part, the terms blocked account and 
blocked property shall mean:
    (a) Any account or property subject to the prohibitions in Sec.  
510.201(a) held in the name of the Government of North Korea, the 
Workers' Party of Korea, or any other person whose property and 
interests in property are blocked pursuant to Sec.  510.201(a), or in 
which such person has an interest, and with respect to which payments, 
transfers, exportations, withdrawals, or other dealings may not be made 
or effected except pursuant to a license or other authorization from 
OFAC expressly authorizing such action; and
    (b) Any account or property subject to the prohibitions in Sec.  
510.201(d), and with respect to which payments, transfers, 
exportations, withdrawals, or other dealings may not be made or 
effected except pursuant to a license or other authorization from OFAC 
expressly authorizing such action.

    Note 1 to Sec.  510.302:  See Sec.  510.411 concerning the 
blocked status of property and interests in property of an entity 
that is directly or indirectly owned, whether individually or in the 
aggregate, 50 percent or more by one or more persons whose property 
and interests in property are blocked pursuant to Sec.  510.201(a).

Sec.  510.303  Correspondent account.

    The term correspondent account means an account established by a 
U.S. financial institution for a foreign financial institution to 
receive deposits from, or to make payments on behalf of, the foreign 
financial institution, or to handle other financial transactions 
related to such foreign financial institution.


Sec.  510.304  Effective date.

    (a) The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this part as 
follows:
    (1) With respect to transfers or other dealings in blocked property 
and interests in property of the Government of North Korea, as defined 
in Sec.  510.311, or the Workers' Party of Korea prohibited by Sec.  
510.201(a)(1), 12:01 a.m. eastern daylight time, March 16, 2016;
    (2) With respect to a person whose property and interests in 
property are blocked pursuant to Sec.  510.201(a)(3)(i), 12:01 p.m. 
eastern daylight time, August 30, 2010;
    (3) With respect to a person whose property and interests in 
property are otherwise blocked pursuant to Sec.  510.201(a), the 
earlier of the date of actual or constructive notice that such person's 
property and interests in property are blocked;
    (4) With respect to funds subject to blocking pursuant to Sec.  
510.201(d), the earlier of the date of actual or constructive notice 
that funds are blocked or that a foreign bank account that the funds 
originate from, are destined for, or pass through has been determined 
to meet the criteria contained in Sec.  510.201(d).
    (5) With respect to the prohibition set forth in Sec.  510.207, 
June 26, 2008;
    (6) With respect to the prohibition set forth in Sec.  510.205, 
12:01 a.m. eastern daylight time, April 19, 2011;
    (7) With respect to the prohibitions set forth in Sec. Sec.  
510.206 and 510.209, 12:01 a.m. eastern daylight time, March 16, 2016;
    (8) With respect to the prohibitions set forth in Sec.  510.208, 
12:01 a.m. eastern daylight time, September 21, 2017; and
    (9) With respect to the prohibition set forth in Sec.  510.210, 
12:01 a.m. eastern daylight time, September 21, 2017. The effective 
date of a prohibition or strict condition imposed pursuant to Sec.  
510.210 on the opening or maintaining of a correspondent account or a 
payable-through account in the United States by a U.S. financial 
institution for a particular foreign financial institution is

[[Page 9194]]

the earlier of the date the U.S. financial institution receives actual 
or constructive notice of such prohibition, condition, or blocking.
    (b) For the purposes of this section, constructive notice is the 
date that a notice of the blocking of the relevant person's property 
and interests in property is published in the Federal Register.


Sec.  510.305  Entity.

    The term entity means a partnership, association, trust, joint 
venture, corporation, group, subgroup, or other organization.


Sec.  510.306  Financial, material, or technological support.

    The term financial, material, or technological support, as used in 
Sec.  510.201(a)(3)(ii)(E), (a)(3)(iii)(D), (a)(3)(iv)(G), and 
(a)(3)(v)(E), means any property, tangible or intangible, including 
currency, financial instruments, securities, or any other transmission 
of value; weapons or related materiel; chemical or biological agents; 
explosives; false documentation or identification; communications 
equipment; computers; electronic or other devices or equipment; 
technologies; lodging; safe houses; facilities; vehicles or other means 
of transportation; or goods. ``Technologies'' as used in this 
definition means specific information necessary for the development, 
production, or use of a product, including related technical data such 
as blueprints, plans, diagrams, models, formulae, tables, engineering 
designs and specifications, manuals, or other recorded instructions.


Sec.  510.307  Financial services.

    The term financial services includes loans, transfers, accounts, 
insurance, investments, securities, guarantees, foreign exchange, 
letters of credit, and commodity futures or options.


Sec.  510.308  Financial transaction.

    The term financial transaction means any transfer of value 
involving a financial institution.


Sec.  510.309  Foreign financial institution.

    The term foreign financial institution means any foreign entity 
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 depository institutions, banks, savings banks, 
money service businesses, 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, dealers in precious metals, stones, or jewels, and 
holding companies, affiliates, or subsidiaries of any of the foregoing. 
The term does not include the international financial institutions 
identified in 22 U.S.C. 262r(c)(2), the International Fund for 
Agricultural Development, the North American Development Bank, or any 
other international financial institution so notified by OFAC.


Sec.  510.310  Foreign person.

    The term foreign person means any person that is not a U.S. person.


Sec.  510.311  Government of North Korea.

    The term Government of North Korea includes:
    (a) The state and the Government of the Democratic People's 
Republic of Korea, as well as any political subdivision, agency, or 
instrumentality thereof;
    (b) Any entity owned or controlled, directly or indirectly, by the 
foregoing, including any corporation, partnership, association, or 
other entity in which the Government of North Korea owns a 50 percent 
or greater interest or a controlling interest, and any entity which is 
otherwise controlled by that government;
    (c) Any person that is, or has been, acting or purporting to act, 
directly or indirectly, for or on behalf of any of the foregoing; and
    (d) Any other person determined by OFAC to be included within 
paragraphs (a) through (c) of this section.

    Note 1 to Sec.  510.311:  The names of persons that OFAC has 
determined fall within this definition are published in the Federal 
Register and incorporated into OFAC's Specially Designated Nationals 
and Blocked Persons List (SDN List) with the identifier ``[DPRK].'' 
The SDN List is accessible through the following page on OFAC's 
website: www.treasury.gov/sdn. However, the property and interests 
in property of persons who meet the definition of the term 
Government of North Korea are blocked pursuant to Sec.  510.201(a) 
regardless of whether the names of such persons are published in the 
Federal Register or incorporated into the SDN List.


    Note 2 to Sec.  510.311:  Section 501.807 of this chapter 
describes the procedures to be followed by persons seeking 
administrative reconsideration of OFAC's determination that they 
fall within the definition of the term Government of North Korea.

Sec.  510.312  Information or informational materials.

    (a)(1) The term information or informational materials includes 
publications, films, posters, phonograph records, photographs, 
microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and 
news wire feeds.
    (2) To be considered information or informational materials, 
artworks must be classified under heading 9701, 9702, or 9703 of the 
Harmonized Tariff Schedule of the United States.
    (b) The term information or informational materials, with respect 
to exports, does not include items:
    (1) That were, as of April 30, 1994, or that thereafter become, 
controlled for export pursuant to section 5 of the Export 
Administration Act of 1979, 50 U.S.C. App. 2401-2420 (1979) (EAA), or 
section 6 of the EAA to the extent that such controls promote the 
nonproliferation or antiterrorism policies of the United States; or
    (2) With respect to which acts are prohibited by 18 U.S.C. chapter 
37.


Sec.  510.313  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.  510.314  Knowingly.

    The term knowingly, with respect to conduct, a circumstance, or a 
result, means that a person has actual knowledge, or should have known, 
of the conduct, the circumstance, or the result.


Sec.  510.315  Licenses; general and specific.

    (a) Except as otherwise provided in this part, 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 or made 
available on OFAC's website: www.treasury.gov/ofac.
    (c) The term specific license means any license or authorization 
issued pursuant to this part, but not set forth in subpart E of this 
part or made available on OFAC's website: www.treasury.gov/ofac.

    Note 1 to Sec.  510.315:  See Sec.  501.801 of this chapter on 
licensing procedures.

Sec.  510.316  Loans or other extensions of credit.

    The term loans or other extensions of credit means any transfer or 
extension of funds or credit on the basis of an obligation to repay, or 
any assumption or guarantee of the obligation of another

[[Page 9195]]

to repay an extension of funds or credit, including: Overdrafts; 
currency swaps; purchases of securities or debt securities, including 
securities from or issued by the Government of North Korea; purchases 
of a loan made by another person; sales of financial assets subject to 
an agreement to repurchase; renewals or refinancings whereby funds or 
credits are transferred or extended to a prohibited borrower or 
prohibited recipient; the issuance of standby letters of credit; and 
drawdowns on existing lines of credit.


Sec.  510.317  Luxury goods.

    The term luxury goods includes those items listed in 15 CFR 
746.4(b)(1) and supplement no. 1 to part 746 and similar items.


Sec.  510.318  New investment.

    The term new investment means a transaction after 12:01 a.m. 
eastern daylight March 16, 2016 that constitutes:
    (a) A commitment or contribution of funds or other assets; or
    (b) A loan or other extension of credit as defined in Sec.  
510.316.


Sec.  510.319  North Korean person.

    (a) The term North Korean person means any North Korean citizen, 
North Korean permanent resident alien, or entity organized under the 
laws of North Korea or any jurisdiction within North Korea (including 
foreign branches).
    (b) For the purposes of Sec.  510.201(a)(3)(v), the term North 
Korean person shall not include any United States citizen, any 
permanent resident alien of the United States, any alien lawfully 
admitted to the United States, or any alien holding a valid United 
States visa.


Sec.  510.320  OFAC.

    The term OFAC means the Department of the Treasury's Office of 
Foreign Assets Control.


Sec.  510.321  Payable-through account.

    The term payable-through account means a correspondent account 
maintained by a U.S. financial institution for a foreign financial 
institution by means of which the foreign financial institution permits 
its customers to engage, either directly or through a subaccount, in 
banking activities usual in connection with the business of banking in 
the United States.


Sec.  510.322  Person.

    The term person means an individual or entity.


Sec.  510.323  Property; property interest.

    The terms property and property interest include 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.  510.324  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 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.  510.325  United States.

    The term United States means the United States, its territories and 
possessions, and all areas under the jurisdiction or authority thereof.


Sec.  510.326  United States person; U.S. person.

    The term United States person or U.S. person means any United 
States citizen, permanent resident alien, entity organized under the 
laws of the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States.


Sec.  510.327  U.S. depository institution.

    The term U.S. depository institution means any entity (including 
its foreign branches) organized under the laws of the United States or 
any jurisdiction within the United States, or any agency, office, or 
branch located in the United States of a foreign entity, that is 
engaged primarily in the business of banking (for example, banks, 
savings banks, savings associations, credit unions, trust companies, 
and United States bank holding companies) and is subject to regulation 
by federal or state banking authorities.


Sec.  510.328  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 other extensions of credit, or purchasing or selling 
foreign exchange, securities, commodity futures or options, or 
procuring purchasers and sellers thereof, as principal or agent. It 
includes 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.  510.329  U.S.-registered money transmitter.

    The term U.S.-registered money transmitter means any U.S. citizen,

[[Page 9196]]

permanent resident alien, or entity organized under the laws of the 
United States or of any jurisdiction within the United States, 
including its foreign branches, or any agency, office, or branch of a 
foreign entity located in the United States, that is a money 
transmitter, as defined in 31 CFR 1010.100(ff)(5), and that is 
registered pursuant to 31 CFR 1022.380.


Sec.  510.330  U.S.-registered broker or dealer in securities.

    The term U.S.-registered broker or dealer in securities means any 
U.S. citizen, permanent resident alien, or entity organized under the 
laws of the United States or of any jurisdiction within the United 
States (including its foreign branches), or any agency, office, or 
branch of a foreign entity located in the United States, that:
    (a) Is a ``broker'' or ``dealer'' in securities within the meanings 
set forth in the Securities Exchange Act of 1934;
    (b) Holds or clears customer accounts; and
    (c) Is registered with the Securities and Exchange Commission under 
the Securities Exchange Act of 1934.

Subpart D--Interpretations


Sec.  510.401  Reference to amended sections.

    (a) Reference to any section in this part is a reference to the 
same as currently amended, unless the reference includes a specific 
date. See 44 U.S.C. 1510.
    (b) Reference to any ruling, order, instruction, direction or 
license issued pursuant to this part is a reference to the same as 
currently amended unless otherwise so specified.


Sec.  510.402  Effect of amendment.

    Unless otherwise specifically provided, any amendment, 
modification, or revocation of any provision in or appendix to this 
part or chapter or of any order, regulation, ruling, instruction, or 
license issued by OFAC 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 the Government of North Korea, the Workers' Party 
of Korea, or any other person whose property and interests in property 
are blocked pursuant to Sec.  510.201(a), such property shall no longer 
be deemed to be property blocked pursuant to Sec.  510.201(a), unless 
there exists in the property another interest that is blocked pursuant 
to Sec.  510.201(a), 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(a), such property shall be deemed to be property in which 
such person has an interest and therefore blocked.


Sec.  510.404  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) An ordinarily incident transaction, not explicitly authorized 
within the terms of the license, by or with the Government of North 
Korea, the Workers' Party of Korea, or any other person whose property 
and interests in property are blocked pursuant to Sec.  510.201(a);
    (2) 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; or
    (3) An ordinarily incident transaction, not explicitly authorized 
within the terms of the license, with a foreign financial institution 
that is subject to sanctions pursuant to Sec.  510.210 when the 
transaction is one that is prohibited by Sec.  510.210.
    (b) For example, a license authorizing a person to complete a 
securities sale involving Company A, whose property and interests in 
property are blocked pursuant to Sec.  510.201(a), 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, provided that such other persons 
are not themselves persons whose property and interests in property are 
blocked pursuant to Sec.  510.201(a).


Sec.  510.405  Exportation and reexportation of goods, services, or 
technology.

    (a) The prohibition on the exportation and reexportation of goods, 
services, or technology contained in Sec.  510.206 applies to services 
performed on behalf of a person in North Korea or the Government of 
North Korea or where the benefit of such services is otherwise received 
in North Korea, if such services are performed:
    (1) In the United States; or
    (2) Outside the United States by a U.S. person, including by a 
foreign branch of an entity located in the United States.
    (b) The benefit of services performed anywhere in the world on 
behalf of the Government of North Korea is presumed to be received in 
North Korea.
    (c) The prohibitions contained in Sec.  510.201 apply to services 
performed in the United States or by U.S. persons, wherever located, 
including by a foreign branch of an entity located in the United 
States:
    (1) On behalf of or for the benefit of the Government of North 
Korea, the Workers' Party of Korea, or any other person whose property 
and interests in property are blocked pursuant to Sec.  510.201(a); or
    (2) With respect to property interests of the Government of North 
Korea, the Workers' Party of Korea, or any other person whose property 
and interests in property are blocked pursuant to Sec.  510.201(a).
    (d)(1) For example, U.S. persons may not, except as authorized by 
or pursuant to this part, provide legal, accounting, financial, 
brokering, freight forwarding, transportation, public relations, or 
other services to any person in North Korea or to the Government of 
North Korea, the Workers' Party of Korea, or any other person whose 
property and interests in property are blocked pursuant to Sec.  
510.201(a).
    (2) For example, a U.S. person is engaged in a prohibited 
exportation of services to North Korea when it extends credit to a 
third-country firm specifically to enable that firm to manufacture 
goods for sale to North Korea or the Government of North Korea.

    Note 1 to Sec.  510.405:  See Sec. Sec.  510.507 and 510.509 on 
licensing policy with regard to the provision of certain legal and 
emergency medical services.

Sec.  510.406  Offshore transactions involving blocked property.

    The prohibitions in Sec.  510.201 on transactions or dealings 
involving blocked property (including a blocked account) apply to 
transactions by any U.S. person in a location outside the United States 
with respect to property held in the name of the Government of North 
Korea, the Workers' Party of Korea, or any other person whose property 
and interests in property are

[[Page 9197]]

blocked pursuant to Sec.  510.201(a) or any property blocked by Sec.  
510.201(d).


Sec.  510.407  Payments from blocked accounts to satisfy obligations 
prohibited.

    Pursuant to Sec.  510.201, no debits may be made to a blocked 
account to pay obligations to U.S. persons or other persons, except as 
authorized by or pursuant to this part.

    Note 1 to Sec.  510.407:  See also Sec.  510.502(e), which 
provides that no license or other authorization contained in or 
issued pursuant to this part authorizes transfers of or payments 
from blocked property or debits to blocked accounts unless the 
license or other authorization explicitly authorizes the transfer of 
or payment from blocked property or the debit to a blocked account.

Sec.  510.408  Charitable contributions.

    Unless specifically authorized by OFAC pursuant to this part, no 
charitable contribution of funds, goods, services, or technology, 
including contributions to relieve human suffering, such as food, 
clothing, or medicine, may be made by, to, or for the benefit of, or 
received from, the Government of North Korea, the Workers' Party of 
Korea, or any other person whose property and interests in property are 
blocked pursuant to Sec.  510.201(a). For the purposes of this part, a 
contribution is made by, to, or for the benefit of, or received from, 
the Government of North Korea, the Workers' Party of Korea, or any 
other person whose property and interests in property are blocked 
pursuant to Sec.  510.201(a) if made by, to, or in the name of, or 
received from or in the name of, such a person; if made by, to, or in 
the name of, or received from or in the name of, an entity or 
individual acting for or on behalf of, or owned or controlled by, such 
a person; or if made in an attempt to violate, to evade, or to avoid 
the bar on the provision of contributions by, to, or for the benefit of 
such a person, or the receipt of contributions from such a person.

    Note 1 to Sec.  510.408: Separate authorization by the 
Department of Commerce under the Export Administration Regulations 
(EAR), 15 CFR part 730 through 774, may be required if the 
charitable contributions are subject to the EAR.

Sec.  510.409  Credit extended and cards issued by financial 
institutions to a person whose property and interests in property are 
blocked.

    The prohibition in Sec.  510.201 on dealing in property subject to 
that section and the prohibition in Sec.  510.206 on exporting services 
to North Korea prohibit U.S. financial institutions from performing 
under any existing credit agreements, including charge cards, debit 
cards, or other credit facilities issued by a financial institution to 
the Government of North Korea, the Workers' Party of Korea, or any 
other person whose property and interests in property are blocked 
pursuant to Sec.  510.201(a).


Sec.  510.410  Setoffs prohibited.

    A setoff against blocked property (including a blocked account), 
whether by a U.S. bank or other U.S. person, is a prohibited transfer 
under Sec.  510.201 if effected after the effective date.


Sec.  510.411  Entities owned by one or more persons whose property and 
interests in property are blocked.

    (a) Persons whose property and interests in property are blocked 
pursuant to Sec.  510.201(a) have an interest in all property and 
interests in property of an entity in which such persons directly or 
indirectly own, whether individually or in the aggregate, 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(a), regardless of whether the name of the entity is 
incorporated into OFAC's Specially Designated Nationals and Blocked 
Persons List (SDN List).
    (b) This section, which deals with the consequences of ownership of 
entities, in no way limits the definition of the Government of North 
Korea in Sec.  510.311, which includes within its definition other 
persons whose property and interests in property are blocked but who 
are not on the SDN List.


Sec.  510.412  Facilitation; change of policies and procedures; 
referral of business opportunities offshore.

    With respect to Sec.  510.211, a prohibited facilitation or 
approval of a transaction by a foreign person occurs, among other 
instances, when a U.S. person:
    (a) Alters its operating policies or procedures, or those of a 
foreign affiliate, to permit a foreign affiliate to accept or perform a 
specific contract, engagement, or transaction involving North Korea or 
the Government of North Korea without the approval of the U.S. person, 
where such transaction previously required approval by the U.S. person 
and such transaction by the foreign affiliate would be prohibited by 
this part if performed directly by a U.S. person or from the United 
States;
    (b) Refers to a foreign person purchase orders, requests for bids, 
or similar business opportunities involving North Korea or the 
Government of North Korea to which the United States person could not 
directly respond as a result of the prohibitions contained in this 
part; or
    (c) Changes the operating policies and procedures of a particular 
affiliate with the specific purpose of facilitating transactions that 
would be prohibited by this part if performed by a U.S. person or from 
the United States.


Sec.  510.413  Significant transaction(s).

    In determining, for purposes of Sec. Sec.  510.201(a)(3)(vi) and 
510.210, whether a transaction(s) is significant, the Secretary of the 
Treasury or the Secretary's designee may consider the totality of the 
facts and circumstances. As a general matter, the Department of the 
Treasury may consider some or all of the following factors:
    (a) Size, number, and frequency. The size, number, and frequency of 
transaction(s) over a period of time, including whether the 
transaction(s) is increasing or decreasing over time and the rate of 
increase or decrease.
    (b) Nature. The nature of the transaction(s), including the type, 
complexity, and commercial purpose of the transaction(s).
    (c) Level of awareness; pattern of conduct. (1) Whether the 
transaction(s) is performed with the involvement or approval of 
management or only by clerical personnel; and
    (2) Whether the transaction(s) is part of a pattern of conduct or 
the result of a business development strategy.
    (d) Nexus. The proximity between the foreign financial institution 
engaging in the transaction(s) and North Korea or a blocked person 
described in Sec.  510.201.
    (e) Impact. The impact of the transaction(s) on the objectives of 
Executive Order 13810 including the economic or other benefit conferred 
or attempted to be conferred on North Korea or a blocked person 
described in Sec.  510.201.
    (f) Deceptive practices. Whether the transaction(s) involves an 
attempt to obscure or conceal the actual parties or true nature of the 
transaction(s) to evade sanctions.
    (g) Other relevant factors. Such other factors that the Department 
of the Treasury deems relevant on a case-by-case basis in determining 
the significance of a transaction(s).

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

[[Page 9198]]

this part are considered actions taken pursuant to this part. General 
licenses and statements of licensing policy relating to this part also 
may be available through the North Korea sanctions page on OFAC's 
website: www.treasury.gov/ofac.


Sec.  510.502  Effect of license or other authorization.

    (a) No license or other authorization contained in this part, or 
otherwise issued by OFAC, authorizes or validates any transaction 
effected prior to the issuance of such license or other authorization, 
unless specifically provided in such license or authorization.
    (b) No regulation, ruling, instruction, or license authorizes any 
transaction prohibited under this part unless the regulation, ruling, 
instruction, or license is issued by OFAC and specifically refers to 
this part. No regulation, ruling, instruction, or license referring to 
this part shall be deemed to authorize any transaction prohibited by 
any other part of this chapter unless the regulation, ruling, 
instruction, or license specifically refers to such part.
    (c) Any regulation, ruling, instruction, or license authorizing any 
transaction otherwise prohibited under this part has the effect of 
removing a prohibition contained in this part from the transaction, but 
only to the extent specifically stated by its terms. Unless the 
regulation, ruling, instruction, or license otherwise specifies, such 
an authorization does not create any right, duty, obligation, claim, or 
interest in, or with respect to, any property that would not otherwise 
exist under ordinary principles of law.
    (d) Nothing contained in this part shall be construed to supersede 
the requirements established under any other provision of law or to 
relieve a person from any requirement to obtain a license or other 
authorization from another department or agency of the U.S. Government 
in compliance with applicable laws and regulations subject to the 
jurisdiction of that department or agency. For example, exports of 
goods, services, or technical data that are not prohibited by this part 
or that do not require a license by OFAC nevertheless may require 
authorization by the U.S. Department of Commerce, the U.S. Department 
of State, or other agencies of the U.S. Government.
    (e) No license or other authorization contained in or issued 
pursuant to this part authorizes transfers of or payments from blocked 
property or debits to blocked accounts unless the license or other 
authorization explicitly authorizes the transfer of or payment from 
blocked property or the debit to a blocked account.
    (f) Any payment relating to a transaction authorized in or pursuant 
to this part that is routed through the U.S. financial system should 
reference the relevant OFAC general or specific license authorizing the 
payment to avoid the blocking or rejection of the transfer.


Sec.  510.503  Exclusion from licenses.

    OFAC reserves the right to exclude any person, property, 
transaction, or class thereof from the operation of any license or from 
the privileges conferred by any license. OFAC 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 the Government 
of North Korea, the Workers' Party of Korea, or any other person whose 
property and interests in property are blocked pursuant to Sec.  
510.201(a) has any interest that comes within the possession or control 
of a U.S. financial institution, or any payment of funds or transfer of 
credit, subject to Sec.  510.201(d) 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 1 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.

    (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 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  Investment and reinvestment of certain funds.

    Subject to the requirements of Sec.  510.203, U.S. financial 
institutions are authorized to invest and reinvest assets blocked 
pursuant to Sec.  510.201, subject to the following conditions:
    (a) The assets representing such investments and reinvestments are 
credited to a blocked account or subaccount that is held in the same 
name at the same U.S. financial institution, or within the possession 
or control of a U.S. person, but funds shall not be transferred outside 
the United States for this purpose;
    (b) The proceeds of such investments and reinvestments shall not be 
credited to a blocked account or subaccount under any name or 
designation that differs from the name or designation of the specific 
blocked account or subaccount in which such funds or securities were 
held; and
    (c) No immediate financial or economic benefit accrues (e.g., 
through pledging or other use) to the Government of North Korea or any 
other person whose property and interests in property are blocked 
pursuant to Sec.  510.201(a).


Sec.  510.507  Provision of certain legal services.

    (a) The provision of the following legal services to or on behalf 
of the Government of North Korea, the Workers' Party of Korea, any 
other person whose property and interests in property are blocked 
pursuant to Sec.  510.201(a) or any further Executive orders relating 
to the national emergency declared in Executive Order 13466 of June 26, 
2008, or any person in North Korea, or in circumstances in which the 
benefit is otherwise received in North Korea, is authorized, provided 
that receipt of payment of professional fees and reimbursement of 
incurred expenses must be authorized: Pursuant to Sec.  510.508, which 
authorizes certain payments for legal services from funds originating 
outside the United States; via specific license; or otherwise 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

[[Page 9199]]

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 or North Korea; 
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 or on behalf of 
the Government of North Korea, the Workers' Party of Korea, any other 
person whose property and interests in property are blocked pursuant to 
Sec.  510.201(a) or any further Executive orders relating to the 
national emergency declared in Executive Order 13466 of June 26, 2008, 
or any person in North Korea, or in circumstances in which the benefit 
is otherwise received in North Korea, not otherwise authorized in this 
part, requires the issuance of a specific license.
    (c) Consistent with Sec.  510.404, U.S. persons do not need to 
obtain specific authorization to provide related services, such as 
making filings and providing other administrative services, that are 
ordinarily incident to the provision of services authorized by 
paragraph (a) of this section. Additionally, U.S. persons who provide 
services authorized by paragraph (a) of this section 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.
    (d) 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, or any further Executive orders 
relating to the national emergency declared in Executive Order 13466 of 
June 26, 2008, is prohibited unless licensed pursuant to this part.

    Note 1 to Sec.  510.507:  Pursuant to part 501, subpart E, of 
this chapter, U.S. persons seeking administrative reconsideration or 
judicial review of their designation or the blocking of their 
property and interests in property may apply for a specific license 
from OFAC to authorize the release of certain blocked funds for the 
payment of professional fees and reimbursement of incurred expenses 
for the provision of such legal services where alternative funding 
sources are not available. For more information, see OFAC's Guidance 
on the Release of Limited Amounts of Blocked Funds for Payment of 
Legal Fees and Costs Incurred in Challenging the Blocking of U.S. 
Persons in Administrative or Civil Proceedings, which is available 
on OFAC's website at: www.treasury.gov/ofac.

Sec.  510.508  Payments for legal services from funds originating 
outside the United States.

    (a) Professional fees and incurred expenses. Receipt of payment of 
professional fees and reimbursement of incurred expenses for the 
provision of legal services authorized pursuant to Sec.  510.507(a) to 
or on behalf of the Government of North Korea, the Workers' Party of 
Korea, any other person whose property and interests in property are 
blocked pursuant to Sec.  510.201(a) or any further Executive orders 
relating to the national emergency declared in Executive Order 13466 of 
June 26, 2008, or any person in North Korea, or in circumstances in 
which the benefit is otherwise received in North Korea, is authorized 
from funds originating outside the United States, provided that the 
funds received by U.S. persons as payment of professional fees and 
reimbursement of incurred expenses for the provision of legal services 
authorized pursuant to Sec.  510.507(a) do not originate from:
    (1) A source within the United States;
    (2) Any source, wherever located, within the possession or control 
of a U.S. person; or
    (3) Any individual or entity, other than the person on whose behalf 
the legal services authorized pursuant to Sec.  510.507(a) are to be 
provided, whose property and interests in property are blocked pursuant 
to any part of this chapter or any Executive order or statute.

    Note 1 to paragraph (a):  Nothing in this paragraph (a) 
authorizes payments for legal services using funds in which any 
other person whose property and interests in property are blocked 
pursuant to Sec.  510.201(a), any other part of this chapter, or any 
Executive order has an interest.

    (b) Reports. (1) U.S. persons who receive payments 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:
    (i) The individual or entity from whom the funds originated and the 
amount of funds received; and
    (ii) If applicable:
    (A) The names of any individuals or entities providing related 
services to the U.S. person receiving payment in connection with 
authorized legal services, such as private investigators or expert 
witnesses;
    (B) A general description of the services provided; and
    (C) The amount of funds paid in connection with such services.
    (2) The reports, which must reference this section, are to be 
submitted to OFAC using one of the following methods:
    (i) Email (preferred method): 
[email protected]; or
    (ii) U.S. mail: OFAC Regulations Reports, Office of Foreign Assets 
Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, 
Freedman's Bank Building, Washington, DC 20220.


Sec.  510.509  Emergency medical services.

    The provision and receipt of nonscheduled emergency medical 
services that are otherwise prohibited by this part or any further 
Executive orders relating to the national emergency declared in 
Executive Order 13466 of June 26, 2008 are authorized.


Sec.  510.510  North Korean mission to the United Nations and employees 
of the United Nations.

    (a) Except as provided in paragraph (c) of this section, the 
provision of goods or services in the United States to the official 
mission of the Government of North Korea to the United Nations (the 
mission) and payment for such goods or services are authorized, 
provided that:
    (1) The goods or services are for the conduct of the official 
business of the mission, or for personal use of the employees of the 
mission, their families, or persons forming part of their household, 
and are not for resale;
    (2) The transaction does not involve the purchase, sale, financing, 
or refinancing of real property;
    (3) The transaction does not involve the purchase, sale, financing, 
or refinancing of luxury goods;
    (4) The transaction is not otherwise prohibited by law; and
    (5) Funds transfers to or from the mission or the employees of the 
mission, their families, or persons forming part of their household are 
conducted through an account at a U.S.

[[Page 9200]]

financial institution specifically licensed by OFAC.
    (b) Except as provided in paragraph (c) of this section, the 
provision of goods or services in the United States to the employees of 
the mission or of the United Nations, their families, or persons 
forming part of their household, and payment for such goods or 
services, are authorized, provided that:
    (1) The goods or services are for personal use of the employees of 
the mission or of the United Nations, their families, or persons 
forming part of their household, and are not for resale;
    (2) The transaction does not involve the purchase, sale, financing, 
or refinancing of luxury goods;
    (3) The transaction is not otherwise prohibited by law; and
    (4) Funds transfers to or from employees of the mission, their 
families, or persons forming part of their household are conducted 
through an account at a U.S. financial institution specifically 
licensed by OFAC.
    (c) This section does not authorize U.S. financial institutions to 
open and operate accounts for, or extend credit to, the mission of the 
Government of North Korea or to the employees of the mission, their 
families, or persons forming part of their household. U.S. financial 
institutions are required to obtain specific licenses to operate 
accounts for, or extend credit to, the mission or to the employees of 
the mission, their families, or persons forming part of their 
household.

    Note 1 to Sec.  510.510: Nothing in this section authorizes the 
transfer of any property to the Government of North Korea, the 
Workers' Party of Korea, or any other person whose property and 
interests in property are blocked pursuant to Sec.  510.201(a) other 
than the mission, nor does this section authorize any debit to a 
blocked account.

Sec.  510.511  Noncommercial, personal remittances.

    (a)(1) U.S. persons are authorized to send and receive and U.S. 
depository institutions, U.S.-registered brokers or dealers in 
securities, and U.S.-registered money transmitters are authorized to 
process transfers of funds to or from North Korea or for or on behalf 
of an individual ordinarily resident in North Korea, other than an 
individual whose property and interests in property are blocked 
pursuant to Sec.  510.201(a), in cases in which the transfers involve 
noncommercial, personal remittances, up to a maximum of $5,000 per 
year.
    (2) Noncommercial, personal remittances do not include charitable 
donations of funds to or for the benefit of an entity or funds 
transfers for use in supporting or operating a business, including a 
family-owned business.
    (b) The transferring institutions identified in paragraph (a) of 
this section may rely on the originator of a funds transfer with regard 
to compliance with paragraph (a) of this section, provided that the 
transferring institution does not know or have reason to know that the 
funds transfer is not in compliance with paragraph (a) of this section.
    (c) An individual who is a U.S. person is authorized to carry funds 
as a noncommercial, personal remittance, as described in paragraph (a) 
of this section, to an individual in North Korea or ordinarily resident 
in North Korea, other than an individual whose property and interests 
in property are blocked pursuant to Sec.  510.201(a), provided that the 
individual who is a U.S. person is carrying the funds on his or her 
behalf, not on behalf of another person.


Sec.  510.512  Certain services in support of nongovernmental 
organizations' activities.

    (a) Nongovernmental organizations are authorized to export or 
reexport services to North Korea that would otherwise be prohibited by 
this part in support of the following not-for-profit activities:
    (1) Activities to support humanitarian projects to meet basic human 
needs in North Korea, including drought, flood, and disaster relief; 
the distribution of food, medicine, and clothing intended to be used to 
relieve human suffering; the provision of shelter; the provision of 
clean water, sanitation, and hygiene assistance; the provision of 
health-related services; assistance for individuals with disabilities; 
and environmental programs;
    (2) Activities to support democracy building in North Korea, 
including rule of law, citizen participation, government 
accountability, universal human rights and fundamental freedoms, access 
to information, and civil society development projects;
    (3) Activities to support non-commercial development projects 
directly benefiting the North Korean people, including preventing 
infectious disease and promoting maternal/child health, sustainable 
agriculture, and clean water assistance; and
    (4) Activities to support environmental protection, including the 
preservation and protection of threatened or endangered species and the 
remediation of pollution or other environmental damage.
    (b) Nongovernmental organizations are authorized to export or 
reexport to North Korea from a third country food, as defined in 
paragraph (f)(1) of this section, and medicine, as defined in paragraph 
(f)(2) of this section, in support of the activities authorized in 
paragraph (a) of this section, provided that the food and medicine are 
not subject to the Export Administration Regulations (15 CFR parts 730 
through 774) (EAR). For export or reexport by a U.S. person to North 
Korea from a third country of other items that are not subject to the 
EAR, a specific license from OFAC is required.

    Note 1 to paragraph (b): Pursuant to 15 CFR 746.4(a), a license 
from the Department of Commerce is required to export or reexport 
any item subject to the EAR to North Korea, except food and medicine 
designated as EAR99.


    Note 2 to paragraphs (a) and (b):  The authorizations in 
paragraphs (a) and (b) of this section do not eliminate the need to 
comply with other applicable provisions of law, including any 
requirements of agencies other than the Department of the Treasury's 
Office of Foreign Assets Control. Such requirements include the EAR 
administered by the Department of Commerce and the International 
Traffic in Arms Regulations (22 CFR parts 120 through 130) 
administered by the Department of State.

    (c) U.S. depository institutions, U.S.-registered brokers or 
dealers in securities, and U.S.-registered money transmitters are 
authorized to process transfers of funds on behalf of U.S. or third-
country nongovernmental organizations, including transfers of funds to 
or from North Korea, in support of the activities authorized by 
paragraphs (a) and (b) of this section.
    (d) Nongovernmental organizations are authorized to engage in 
transactions with the Government of North Korea that are necessary for 
the activities authorized by paragraphs (a) and (b) of this section, 
including payment of reasonable and customary taxes, fees, and import 
duties to, and purchase or receipt of permits, licenses, or public 
utility services from, the Government of North Korea.

    Note 3 to paragraph (d): This paragraph (d) only authorizes 
nongovernmental organizations to conduct limited transactions with 
the Government of North Korea that are necessary for the activities 
described in paragraphs (a) and (b) of this section, such as payment 
of reasonable and customary taxes and other fees. Partnerships and 
partnership agreements between nongovernmental organizations and the 
Government of North Korea or other blocked persons that are 
necessary for nongovernmental organizations to provide authorized 
services are not permitted without a specific license from OFAC.

    (e) Except as authorized in paragraph (d) of this section, this 
section does not authorize the exportation or reexportation of services 
to, charitable

[[Page 9201]]

donations to or for the benefit of, or any other transactions involving 
the Government of North Korea, the Workers' Party of Korea, or any 
other person whose property and interests in property are blocked 
pursuant to Sec.  510.201(a). Specific licenses may be issued on a 
case-by-case basis for these purposes.
    (f)(1) For purposes of this section, the term food means items that 
are consumed by and provide nutrition to humans and animals, and seeds, 
with the exception of castor bean seeds, that germinate into items that 
will be consumed by and provide nutrition to humans and animals. 
Examples of ``food'' include processed or unprocessed food items for 
human consumption, feed, vitamins, minerals, food additives, dietary 
supplements, and containers of drinking water. The term food does not 
include livestock, cigarettes, alcoholic beverages, gum, castor beans, 
castor bean seeds, certified pathogen-free eggs (unfertilized or 
fertilized), dried egg albumin, live animals (excluding cattle 
embryos), Rosary/Jequirity peas, non-food-grade gelatin powder, 
peptones and their derivatives, super absorbent polymers, western red 
cedar, and all fertilizers.
    (2) The term medicine means an item that falls within the 
definition of the term ``drug'' in section 201 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 321) and that, in the case of an item 
subject to the EAR, is designated as EAR99 or, in the case of an item 
not subject to the EAR, is not listed under any multilateral export 
control regime.


Sec.  510.513  Official business of the Federal Government.

    All transactions otherwise prohibited by the provisions of this 
part, other than Sec. Sec.  510.201(a)(1), (a)(3)(iv) through (vi), and 
(d), 510.206, and 510.208 through 510.211, that are for the conduct of 
the official business of the Federal Government by employees, grantees, 
or contractors thereof are authorized.

    Note 1 to Sec.  510.513: Section 510.213(e) exempts transactions 
for the conduct of the official business of the Federal Government 
by employees, grantees, or contractors thereof to the extent such 
transactions are subject to the prohibitions contained in Sec. Sec.  
510.201(a)(1), (a)(3)(iv) through (vi), and (d), 510.206, and 
510.208 through 510.211.

Sec.  510.514  Official activities of international organizations.

    All transactions and activities otherwise prohibited by the 
provisions of this part, other than Sec. Sec.  510.201(a)(1), 
(a)(3)(iv) through (vi), and (d), 510.206, and 510.208 through 510.211, 
that are for the conduct of the official business of the United Nations 
and its Specialized Agencies, Programmes, Funds, and Related 
Organizations by employees, contractors, or grantees thereof are 
authorized.

    Note 1 to Sec.  510.514:  For an organizational chart listing 
the Specialized Agencies, Programmes, Funds, and Related 
Organizations of the United Nations, see the following page on the 
United Nations website: http://www.unsceb.org/directory.


    Note 2 to Sec.  510.514:  Section 510.213(e) exempts 
transactions for the conduct of the official business of the United 
Nations by employees, grantees, or contractors thereof to the extent 
such transactions are subject to the prohibitions contained in 
Sec. Sec.  510.201(a)(1), (a)(3)(iv) through (vi), and (d), 510.206, 
and 510.208 through 510.211.


    Note 3 to Sec.  510.514:  Separate authorization from the 
Department of Commerce may be required for the export or reexport of 
items related to such transactions and activities, if the items are 
subject to the Export Administration Regulations, 15 CFR parts 730 
through 744.

Sec.  510.515  Third-country diplomatic and consular funds transfers.

    (a) Except as provided in paragraph (b) of this section, U.S. 
depository institutions, U.S.-registered brokers or dealers in 
securities, and U.S.-registered money transmitters are authorized to 
process funds transfers necessary for the operating expenses or other 
official business of third-country diplomatic or consular missions in 
North Korea.
    (b) This section does not authorize funds transfers involving 
accounts blocked pursuant to Sec.  510.201(d).


Sec.  510.516  Transactions related to telecommunications and mail.

    (a)(1) Except as provided in paragraph (a)(2) of this section, all 
transactions necessary for the receipt and transmission of 
telecommunications involving North Korea are authorized.
    (2) This section does not authorize:
    (i) The provision, sale, or lease of telecommunications equipment 
or technology; or
    (ii) The provision, sale, or lease of capacity on 
telecommunications transmission facilities (such as satellite or 
terrestrial network connectivity).
    (b) All transactions of common carriers incident to the receipt or 
transmission of mail and packages between the United States and North 
Korea are authorized provided that the importation or exportation of 
such mail and packages is exempt from or authorized pursuant to this 
part.


Sec.  510.517  Certain transactions related to patents, trademarks, 
copyrights, and other intellectual property.

    (a) All of the following transactions in connection with a patent, 
trademark, copyright, or other form of intellectual property protection 
in the United States or North Korea are authorized, including 
exportation of services to North Korea, payment for such services, and 
payment to persons in North Korea directly connected to such 
intellectual property protection:
    (1) The filing and prosecution of any application to obtain a 
patent, trademark, copyright, or other form of intellectual property 
protection;
    (2) The receipt of a patent, trademark, copyright, or other form of 
intellectual property protection;
    (3) The renewal or maintenance of a patent, trademark, copyright, 
or other form of intellectual property protection; and
    (4) The filing and prosecution of any opposition or infringement 
proceeding with respect to a patent, trademark, copyright, or other 
form of intellectual property protection, or the entrance of a defense 
to any such proceeding.
    (b) This section authorizes the payment of fees to the U.S. 
Government or the Government of North Korea, and of the reasonable and 
customary fees and charges to attorneys or representatives within the 
United States or North Korea, in connection with the transactions 
authorized in paragraph (a) of this section, except that payment 
effected pursuant to the terms of this paragraph (b) may not be made 
from a blocked account.


Sec.  510.518  Calling of certain vessels and landing of certain 
aircraft.

    (a) Vessels and aircraft in which a foreign person has an interest 
that have called or landed at a port or place in North Korea within the 
previous 180 days, and vessels in which a foreign person has an 
interest that have engaged in a ship-to-ship transfer with such a 
vessel within the previous 180 days, are authorized to call or land at 
a port or place in the United States in the following circumstances 
only:
    (1) The vessel is in distress and seeks refuge in the United 
States;
    (2) The vessel's call at a port in North Korea was due solely to 
its distress and the resulting need to seek refuge;
    (3) The aircraft is engaging in a nontraffic stop or an emergency 
landing in the United States; or
    (4) The aircraft's landing in North Korea was due solely to an 
emergency landing.

[[Page 9202]]

    (b) For purposes of this section, a nontraffic stop includes a stop 
for any purpose other than taking on or discharging cargo, passengers, 
or mail.


Sec.  510.519  Transactions related to closing a correspondent or 
payable-through account.

    (a) During the 10-day period beginning on the effective date of the 
prohibition in Sec.  510.210 on the opening or maintaining of a 
correspondent account or a payable-through account for a foreign 
financial institution listed on the Correspondent Account or Payable-
Through Account Sanctions (CAPTA) List, U.S. financial institutions 
that maintain correspondent accounts or payable-through accounts for 
the foreign financial institution are authorized to:
    (1) Process only those transactions through the account, or permit 
the foreign financial institution to execute only those transactions 
through the account, that are for the purpose of, and necessary for, 
closing the account; and
    (2) Transfer the funds remaining in the correspondent account or 
the payable-through account to an account of the foreign financial 
institution located outside of the United States and close the 
correspondent account or the payable-through account.
    (b) A report must be filed with OFAC within 30 days of the closure 
of an account, providing full details on the closing of each 
correspondent account or payable-through account maintained by a U.S. 
financial institution for a foreign financial institution whose name is 
added to the CAPTA List. Such report must include complete information 
on the closing of the account and on all transactions processed or 
executed through the account pursuant to this section, including the 
account outside of the United States to which funds remaining in the 
account were transferred. The reports, which must reference this 
section, are to be submitted to OFAC using one of the following 
methods:
    (1) Email (preferred method): [email protected]; or
    (2) U.S. mail: Attention: Office of Compliance and Enforcement, 
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Avenue NW, Freedman's Bank Building, Washington, DC 20220.
    (c) Specific licenses may be issued on a case-by-case basis to 
authorize transactions outside the scope or time period authorized in 
paragraph (a) of this section by a U.S. financial institution with 
respect to a correspondent account or a payable-through account 
maintained by the U.S. financial institution for a foreign financial 
institution whose name is added to the CAPTA List. License applications 
should be filed in conformance with Sec.  501.801 of the Reporting, 
Procedures and Penalties Regulations, 31 CFR part 501.
    (d) Nothing in this section authorizes the opening of a 
correspondent account or a payable-through account for a foreign 
financial institution whose name appears on the CAPTA List.

    Note 1 to Sec.  510.519: This section does not authorize a U.S. 
financial institution to unblock property or interests in property, 
or to engage in any transaction or dealing in property or interests 
in property, blocked pursuant to any other part of this chapter in 
the process of closing a correspondent account or a payable-through 
account for a foreign financial institution whose name has been 
added to the CAPTA List. See Sec.  510.101.

Subpart F--Reports


Sec.  510.601  Records and reports.

    For provisions relating to required records and reports, see part 
501, subpart C, of this chapter. Recordkeeping and reporting 
requirements imposed by part 501 of this chapter with respect to the 
prohibitions contained in this part are considered requirements arising 
pursuant to this part.

Subpart G--Penalties and Finding of Violation


Sec.  510.701  Penalties.

    (a) Section 206 of the International Emergency Economic Powers Act 
(50 U.S.C. 1705) (IEEPA) is applicable to violations of the provisions 
of any license, ruling, regulation, order, directive, or instruction 
issued by or pursuant to the direction or authorization of the 
Secretary of the Treasury pursuant to this part or otherwise under 
IEEPA.
    (1) A civil penalty not to exceed the amount set forth in section 
206 of IEEPA may be imposed on any person who violates, attempts to 
violate, conspires to violate, or causes a violation of any license, 
order, regulation, or prohibition issued under IEEPA.

    Note 1 to paragraph (a)(1):
    IEEPA provides for a maximum civil penalty not to exceed the 
greater of $295,141 or an amount that is twice the amount of the 
transaction that is the basis of the violation with respect to which 
the penalty is imposed.

    (2) A person who willfully commits, willfully attempts to commit, 
willfully conspires to commit, or aids or abets in the commission of a 
violation of any license, order, regulation, or prohibition may, upon 
conviction, be fined not more than $1,000,000, or if a natural person, 
be imprisoned for not more than 20 years, or both.
    (b)(1) The civil penalties provided in IEEPA 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).
    (2) The criminal penalties provided in IEEPA are subject to 
adjustment pursuant to 18 U.S.C. 3571.
    (c) Pursuant to 18 U.S.C. 1001, whoever, in any matter within the 
jurisdiction of the executive, legislative, or judicial branch of the 
government of the United States, knowingly and willfully falsifies, 
conceals, or covers up by any trick, scheme, or device a material fact; 
or makes any materially false, fictitious, or fraudulent statement or 
representation; or makes or uses any false writing or document knowing 
the same to contain any materially false, fictitious, or fraudulent 
statement or entry shall be fined under title 18, United States Code, 
imprisoned, or both.
    (d) Section 5 of the United Nations Participation Act, as amended 
(22 U.S.C. 287c(b)) (UNPA), provides that any person who willfully 
violates or evades or attempts to violate or evade any order, rule, or 
regulation issued by the President pursuant to the authority granted in 
that section, upon conviction, shall be fined not more than $10,000 
and, if a natural person, may also be imprisoned for not more than 10 
years; and the officer, director, or agent of any corporation who 
knowingly participates in such violation or evasion shall be punished 
by a like fine, imprisonment, or both and any property, funds, 
securities, papers, or other articles or documents, or any vessel, 
together with her tackle, apparel, furniture, and equipment, or 
vehicle, or aircraft, concerned in such violation shall be forfeited to 
the United States.
    (e) Violations involving transactions described at section 
203(b)(1), (3), and (4) of IEEPA shall be subject only to the penalties 
set forth in paragraph (d) of this section.
    (f) Violations of this part may also be subject to other applicable 
laws.


Sec.  510.702  Pre-Penalty Notice; settlement.

    (a) When required. If OFAC has reason to believe that there has 
occurred a violation of any provision of this part or a violation of 
the provisions of any license, ruling, regulation, order, directive, or 
instruction issued by or pursuant to the direction or authorization of 
the Secretary of the Treasury pursuant to this part or otherwise under 
the International Emergency Economic Powers Act (50 U.S.C. 1705) 
(IEEPA) and determines that a civil monetary penalty is

[[Page 9203]]

warranted, OFAC will issue a Pre-Penalty Notice informing the alleged 
violator of the agency's intent to impose a monetary penalty. A Pre-
Penalty Notice shall be in writing. The Pre-Penalty Notice may be 
issued whether or not another agency has taken any action with respect 
to the matter. For a description of the contents of a Pre-Penalty 
Notice, see appendix A to part 501 of this chapter.
    (b) Response--(1) Right to respond. An alleged violator has the 
right to respond to a Pre-Penalty Notice by making a written 
presentation to OFAC. For a description of the information that should 
be included in such a response, see appendix A to part 501 of this 
chapter.
    (2) Deadline for response. A response to a Pre-Penalty Notice must 
be made within 30 days as set forth in paragraphs (b)(2)(i) and (ii) of 
this section. The failure to submit a response within 30 days shall be 
deemed to be a waiver of the right to respond.
    (i) Computation of time for response. A response to a Pre-Penalty 
Notice must be postmarked or date-stamped by the U.S. Postal Service 
(or foreign postal service, if mailed abroad) or courier service 
provider (if transmitted to OFAC by courier) on or before the 30th day 
after the postmark date on the envelope in which the Pre-Penalty Notice 
was mailed. If the Pre-Penalty Notice was personally delivered by a 
non-U.S. Postal Service agent authorized by OFAC, a response must be 
postmarked or date-stamped on or before the 30th day after the date of 
delivery.
    (ii) Extensions of time for response. If a due date falls on a 
federal holiday or weekend, that due date is extended to include the 
following business day. Any other extensions of time will be granted, 
at the discretion of OFAC, only upon specific request to OFAC.
    (3) Form and method of response. A response to a Pre-Penalty Notice 
need not be in any particular form, but it must be typewritten and 
signed by the alleged violator or a representative thereof, contain 
information sufficient to indicate that it is in response to the Pre-
Penalty Notice, and include the OFAC identification number listed on 
the Pre-Penalty Notice. A copy of the written response may be sent by 
facsimile, but the original also must be sent to OFAC's Office of 
Compliance and Enforcement by mail or courier and must be postmarked or 
date-stamped in accordance with paragraph (b)(2) of this section.
    (c) Settlement. Settlement discussion may be initiated by OFAC, the 
alleged violator, or the alleged violator's authorized representative. 
For a description of practices with respect to settlement, see appendix 
A to part 501 of this chapter.
    (d) Guidelines. Guidelines for the imposition or settlement of 
civil penalties by OFAC are contained in appendix A to part 501 of this 
chapter.
    (e) Representation. A representative of the alleged violator may 
act on behalf of the alleged violator, but any oral communication with 
OFAC prior to a written submission regarding the specific allegations 
contained in the Pre-Penalty Notice must be preceded by a written 
letter of representation, unless the Pre-Penalty Notice was served upon 
the alleged violator in care of the representative.


Sec.  510.703  Penalty imposition.

    If, after considering any written response to the Pre-Penalty 
Notice and any relevant facts, OFAC determines that there was a 
violation by the alleged violator named in the Pre-Penalty Notice and 
that a civil monetary penalty is appropriate, OFAC may issue a Penalty 
Notice to the violator containing a determination of the violation and 
the imposition of the monetary penalty. For additional details 
concerning issuance of a Penalty Notice, see appendix A to part 501 of 
this chapter. The issuance of the Penalty Notice shall constitute final 
agency action. The violator has the right to seek judicial review of 
that final agency action in federal district court.


Sec.  510.704  Administrative collection; referral to United States 
Department of Justice.

    In the event that the violator does not pay the penalty imposed 
pursuant to this part or make payment arrangements acceptable to OFAC, 
the matter may be referred for administrative collection measures by 
the Department of the Treasury or to the United States Department of 
Justice for appropriate action to recover the penalty in a civil suit 
in a federal district court.


Sec.  510.705  Finding of Violation.

    (a) When issued. (1) OFAC may issue an initial Finding of Violation 
that identifies a violation if OFAC:
    (i) Determines that there has occurred a violation of any provision 
of this part, or a violation of the provisions of any license, ruling, 
regulation, order, directive, or instruction issued by or pursuant to 
the direction or authorization of the Secretary of the Treasury 
pursuant to this part or otherwise under the International Emergency 
Economic Powers Act;
    (ii) Considers it important to document the occurrence of a 
violation; and
    (iii) Based on the Guidelines contained in appendix A to part 501 
of this chapter, concludes that an administrative response is warranted 
but that a civil monetary penalty is not the most appropriate response.
    (2) An initial Finding of Violation shall be in writing and may be 
issued whether or not another agency has taken any action with respect 
to the matter. For additional details concerning issuance of a Finding 
of Violation, see appendix A to part 501 of this chapter.
    (b) Response--(1) Right to respond. An alleged violator has the 
right to contest an initial Finding of Violation by providing a written 
response to OFAC.
    (2) Deadline for response; default determination. A response to an 
initial Finding of Violation must be made within 30 days as set forth 
in paragraphs (b)(2)(i) and (ii) of this section. The failure to submit 
a response within 30 days shall be deemed to be a waiver of the right 
to respond, and the initial Finding of Violation will become final and 
will constitute final agency action. The violator has the right to seek 
judicial review of that final agency action in federal district court.
    (i) Computation of time for response. A response to an initial 
Finding of Violation must be postmarked or date-stamped by the U.S. 
Postal Service (or foreign postal service, if mailed abroad) or courier 
service provider (if transmitted to OFAC by courier) on or before the 
30th day after the postmark date on the envelope in which the initial 
Finding of Violation was served. If the initial Finding of Violation 
was personally delivered by a non-U.S. Postal Service agent authorized 
by OFAC, a response must be postmarked or date-stamped on or before the 
30th day after the date of delivery.
    (ii) Extensions of time for response. If a due date falls on a 
federal holiday or weekend, that due date is extended to include the 
following business day. Any other extensions of time will be granted, 
at the discretion of OFAC, only upon specific request to OFAC.
    (3) Form and method of response. A response to an initial Finding 
of Violation need not be in any particular form, but it must be 
typewritten and signed by the alleged violator or a representative 
thereof, contain information sufficient to indicate that it is in 
response to the initial Finding of Violation, and include the OFAC 
identification number listed on the initial Finding of Violation. A 
copy of the written response may be sent by facsimile, but the original 
also must be sent to OFAC by mail or courier and must be postmarked or 
date-stamped in

[[Page 9204]]

accordance with paragraph (b)(2) of this section.
    (4) Information that should be included in response. Any response 
should set forth in detail why the alleged violator either believes 
that a violation of the regulations did not occur and/or why a Finding 
of Violation is otherwise unwarranted under the circumstances, with 
reference to the General Factors Affecting Administrative Action set 
forth in the Guidelines contained in appendix A to part 501. The 
response should include all documentary or other evidence available to 
the alleged violator that supports the arguments set forth in the 
response. OFAC will consider all relevant materials submitted in the 
response.
    (c) Determination--(1) Determination that a Finding of Violation is 
warranted. If, after considering the response, OFAC determines that a 
final Finding of Violation should be issued, OFAC will issue a final 
Finding of Violation that will inform the violator of its decision. A 
final Finding of Violation shall constitute final agency action. The 
violator has the right to seek judicial review of that final agency 
action in federal district court.
    (2) Determination that a Finding of Violation is not warranted. If, 
after considering the response, OFAC determines a Finding of Violation 
is not warranted, then OFAC will inform the alleged violator of its 
decision not to issue a final Finding of Violation.

    Note 1 to paragraph (c)(2): A determination by OFAC that a final 
Finding of Violation is not warranted does not preclude OFAC from 
pursuing other enforcement actions consistent with the Guidelines 
contained in appendix A to part 501 of this chapter.

    (d) Representation. A representative of the alleged violator may 
act on behalf of the alleged violator, but any oral communication with 
OFAC prior to a written submission regarding the specific alleged 
violations contained in the initial Finding of Violation must be 
preceded by a written letter of representation, unless the initial 
Finding of Violation was served upon the alleged violator in care of 
the representative.

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.


Sec.  510.802  Delegation of certain authorities of 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, Executive Order 
13551 of August 30, 2010, Executive Order 13570 of April 18, 2011, 
Executive Order 13687 of January 2, 2015, Executive Order 13722 of 
March 15, 2016, Executive Order 13810 of September 20, 2017, and any 
further Executive orders relating to the national emergency declared in 
Executive Order 13466 of June 26, 2008, and any action that the 
Secretary of the Treasury is authorized to take pursuant to 
Presidential Memorandum of May 18, 2016: Delegation of Certain 
Functions and Authorities under the North Korea Policy Enhancement Act 
of 2016 and Presidential Memorandum of September 29, 2017: Delegation 
of Certain Functions and Authorities under the Countering America's 
Adversaries Through Sanctions Act of 2017, the Ukraine Freedom Support 
Act of 2014, and the Support for the Sovereignty, Integrity, Democracy, 
and Economic Stability of Ukraine Act of 2014, may be taken by the 
Director of OFAC or by any other person to whom the Secretary of the 
Treasury has delegated authority so to act.

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 (44 U.S.C. 3507) of information 
collections relating to recordkeeping and reporting requirements, 
licensing procedures, 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.

    Dated: February 22, 2018.
Andrea Gacki,
Acting Director, Office of Foreign Assets Control.
    Approved: February 22, 2018.
Sigal P. Mandelker,
Under Secretary, Office of Terrorism and Financial Intelligence, 
Department of the Treasury.
[FR Doc. 2018-04113 Filed 3-1-18; 8:45 am]
 BILLING CODE 4810-AL-P