[Federal Register Volume 83, Number 126 (Friday, June 29, 2018)]
[Rules and Regulations]
[Pages 30541-30548]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14060]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 583


Global Magnitsky 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 adding regulations to implement the Global Magnitsky 
Human Rights Accountability Act and Executive Order 13818 of December 
20, 2017 (``Blocking the Property of Persons Involved in Serious Human 
Rights Abuse or Corruption''). OFAC intends to supplement these 
regulations with a more comprehensive set of regulations, which may 
include additional interpretive and definitional guidance, general 
licenses, and statements of licensing policy.

DATES: Effective Date: June 29, 2018.

FOR FURTHER INFORMATION CONTACT: OFAC: 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

    On December 23, 2016, the President signed the Global Magnitsky 
Human Rights Accountability Act (Pub. L. 114-328, Title XII, Subtitle 
F) (the ``Act'') into law. The Act authorized the President to impose 
targeted sanctions on any foreign person the President determines is, 
among other things, responsible for extrajudicial killings, torture, or 
other gross violations of internationally recognized human rights, or a 
government official, or a senior associate of such an official, 
responsible for, or complicit in, ordering, controlling, or otherwise 
directing, acts of significant corruption.
    On December 20, 2017, the President, invoking the authority of, 
inter alia, the International Emergency Economic Powers Act (50 U.S.C. 
1701-1706) (IEEPA), issued Executive Order 13818 (82 FR 60839, December 
26, 2017) (E.O. 13818), effective at 12:01 a.m. eastern standard time 
on December 21, 2017.
    In E.O. 13818, the President determined that serious human rights 
abuse and corruption around the world constitute an unusual and 
extraordinary threat to the national security, foreign policy, and 
economy of the United States and declared a national emergency to deal 
with that threat.
    OFAC is issuing the Global Magnitsky Sanctions Regulations, 31 CFR 
part 583 (the ``Regulations''), to implement the Act and E.O. 13818, 
pursuant to authorities delegated to the Secretary of the Treasury in 
E.O. 13818. A copy of E.O. 13818 appears in appendix A to this part.
    The Regulations are being published in abbreviated form at this 
time for the purpose of providing immediate guidance to the public. 
OFAC intends to supplement this part 583 with a more comprehensive set 
of regulations, which may include additional interpretive and 
definitional guidance, general licenses, and statements of licensing 
policy. The appendix to the Regulations will be removed when OFAC 
supplements this part with a more comprehensive set of regulations.

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 583

    Administrative practice and procedure, Banks, Banking, Blocking of 
assets, Global Magnitsky, Penalties, Reporting and recordkeeping 
requirements, Sanctions.


0
For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control adds part 583 to 31 CFR 
chapter V to read as follows:

PART 583--GLOBAL MAGNITSKY SANCTIONS REGULATIONS

Subpart A--Relation of This Part to Other Laws and Regulations
Sec.
583.101 Relation of this part to other laws and regulations.
Subpart B--Prohibitions
583.201 Prohibited transactions involving blocked property.
583.202 Effect of transfers violating the provisions of this part.
583.203 Holding of funds in interest-bearing accounts; investment 
and reinvestment.
583.204 Expenses of maintaining blocked physical property; 
liquidation of blocked property.
583.205 Exempt transactions.
Subpart C--General Definitions
583.300 Applicability of definitions.
583.301 Blocked account; blocked property.
583.302 Effective date.
583.303 Entity.
583.304 Financial, material, or technological support.
583.305 Foreign person.
583.306 Information or informational materials.
583.307 Interest.
583.308 Licenses; general and specific.
583.309 OFAC.
583.310 Person.
583.311 Property; property interest.
583.312 Transfer.
583.313 United States.
583.314 United States person; U.S. person.
583.315 U.S. financial institution.
Subpart D--Interpretations
583.401 [Reserved]
583.402 Effect of amendment.
583.403 Termination and acquisition of an interest in blocked 
property.
583.404 Transactions ordinarily incident to a licensed transaction.
583.405 Setoffs prohibited.
583.406 Entities owned by one or more persons whose property and 
interests in property are blocked.

[[Page 30542]]

Subpart E--Licenses, Authorizations, and Statements of Licensing Policy
583.501 General and specific licensing procedures.
583.502 [Reserved]
583.503 Exclusion from licenses.
583.504 Payments and transfers to blocked accounts in U.S. financial 
institutions.
583.505 Entries in certain accounts for normal service charges.
583.506 Provision of certain legal services.
583.507 Payments for legal services from funds originating outside 
the United States.
583.508 Emergency medical services.
Subpart F--Reports
583.601 Records and reports.
Subpart G--Penalties and Findings of Violation
583.701 Penalties and Findings of Violation.
Subpart H--Procedures
583.801 Procedures.
583.802 Delegation of certain authorities of the Secretary of the 
Treasury.
Subpart I--Paperwork Reduction Act
583.901 Paperwork Reduction Act notice.
Appendix A to Part 583--Executive Order 13818 of December 20, 2017

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 
Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); Pub. L. 114-
328, Title XII, Subtitle F, 130 Stat. 2533 (22 U.S.C. 2656 note); 
E.O. 13818, 82 FR 60839, December 26, 2017.

Subpart A--Relation of This Part to Other Laws and Regulations


Sec.  583.101  Relation of this part to other laws and regulations.

    This part is separate from, and independent of, the other parts of 
this chapter, with the exception of part 501 of this chapter, the 
recordkeeping and reporting requirements and license application and 
other procedures of which apply to this part. Actions taken pursuant to 
part 501 of this chapter with respect to the prohibitions contained in 
this part are considered actions taken pursuant to this part. Differing 
foreign policy and national security circumstances may result in 
differing interpretations of similar language among the parts of this 
chapter. No license or authorization contained in or issued pursuant to 
those other parts authorizes any transaction prohibited by this part. 
No license or authorization contained in or issued pursuant to any 
other provision of law or regulation authorizes any transaction 
prohibited by this part. No license or authorization contained in or 
issued pursuant to this part relieves the involved parties from 
complying with any other applicable laws or regulations.

    Note 1 to Sec.  583.101: This part has been published in 
abbreviated form for the purpose of providing immediate guidance to 
the public. OFAC intends to supplement this part with a more 
comprehensive set of regulations, which may include additional 
interpretive and definitional guidance, general licenses, and 
statements of licensing policy.

Subpart B--Prohibitions


Sec.  583.201  Prohibited transactions involving blocked property.

    All transactions prohibited pursuant to Executive Order 13818 of 
December 20, 2017 are also prohibited pursuant to this part.

    Note 1 to Sec.  583.201:  The names of persons listed in or 
designated pursuant to Executive Order 13818, whose property and 
interests in property therefore are blocked pursuant to 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 ``[GLOMAG].'' 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.  583.406 concerning entities 
that may not be listed on the SDN List but whose property and 
interests in property are nevertheless blocked pursuant to this 
section.


    Note 2 to Sec.  583.201:  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 this section also are published in the 
Federal Register and incorporated into the SDN List with the 
identifier ``[BPI-GLOMAG]''.


    Note 3 to Sec.  583.201:  Sections 501.806 and 501.807 of this 
chapter describe the procedures to be followed by persons seeking, 
respectively, the unblocking of funds that they believe were blocked 
due to mistaken identity, and administrative reconsideration of 
their status as persons whose property and interests in property are 
blocked pursuant to this section.

Sec.  583.202  Effect of transfers violating the provisions of this 
part.

    (a) Any transfer after the effective date that is in violation of 
any provision of this part or of any regulation, order, directive, 
ruling, instruction, or license issued pursuant to this part, and that 
involves any property or interest in property blocked pursuant to Sec.  
583.201, 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.  583.201, 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

[[Page 30543]]

party or withholding of material facts or was otherwise fraudulently 
obtained.
    (e) 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.
    (f) 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.  583.201.


Sec.  583.203  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.  583.201 shall hold or place such funds in 
a blocked interest-bearing account located in the United States.
    (b)(1) For purposes of this section, the term blocked interest-
bearing account means a blocked account:
    (i) In a federally insured U.S. bank, thrift institution, or credit 
union, provided the funds are earning interest at rates that are 
commercially reasonable; or
    (ii) With a broker or dealer registered with the Securities and 
Exchange Commission under the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), provided the funds are invested in a money market 
fund or in U.S. Treasury bills.
    (2) 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.  583.201 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.  583.201 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 real or personal property, 
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 any person whose property and interests in property are 
blocked pursuant to Sec.  583.201, nor may their holder cooperate in or 
facilitate the pledging or other attempted use as collateral of blocked 
funds or other assets.


Sec.  583.204  Expenses of maintaining blocked tangible 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 tangible property blocked pursuant to Sec.  583.201 
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.  583.201 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.  583.205  Exempt transactions.

    (a) 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.
    (b) 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.  583.306, 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 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.  
583.201 are prohibited.
    (c) 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.

Subpart C--General Definitions


Sec.  583.300  Applicability of definitions.

    The definitions in this subpart apply throughout the entire part.


Sec.  583.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibitions in Sec.  583.201 held 
in the name of a person whose property and interests in property are 
blocked pursuant to Sec.  583.201, or in which such person has an 
interest, and with respect to which payments, transfers,

[[Page 30544]]

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.  583.301: See Sec.  583.406 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.  583.201.

Sec.  583.302  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 a person listed in the Annex to Executive Order 
13818 of December 20, 2017, 12:01 a.m. eastern standard time on 
December 21, 2017; and
    (2) With respect to a person whose property and interests in 
property are otherwise blocked pursuant to Sec.  583.201, the earlier 
of the date of actual or constructive notice that such person's 
property and interests in property are blocked.
    (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.  583.303  Entity.

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


Sec.  583.304  Financial, material, or technological support.

    The term financial, material, or technological support, as used in 
Executive Order 13818 of December 20, 2017, 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.  583.305  Foreign person.

    The term foreign person means any citizen or national of a foreign 
state (including any such individual who is also a citizen or national 
of the United States), or any entity not organized solely under the 
laws of the United States or existing solely in the United States, but 
does not include a foreign state.


Sec.  583.306  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.  583.307  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.  583.308  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.  583.308:  See Sec.  501.801 of this chapter on 
licensing procedures.

Sec.  583.309  OFAC.

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


Sec.  583.310  Person.

    The term person means an individual or entity.


Sec.  583.311  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.  583.312  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

[[Page 30545]]

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.  583.313  United States.

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


Sec.  583.314  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.  583.315  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, 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.

Subpart D--Interpretations


Sec.  583.401  [Reserved]


Sec.  583.402  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.  583.403  Termination and acquisition of an interest in blocked 
property.

    (a) Whenever a transaction licensed or authorized by or pursuant to 
this part results in the transfer of property (including any property 
interest) away from a person whose property and interests in property 
are blocked pursuant to Sec.  583.201, such property shall no longer be 
deemed to be property blocked pursuant to Sec.  583.201, unless there 
exists in the property another interest that is blocked pursuant to 
Sec.  583.201, 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.  583.201, such property shall be deemed to be property in which 
such person has an interest and therefore blocked.


Sec.  583.404  Transactions ordinarily incident to a licensed 
transaction.

    Any transaction ordinarily incident to a licensed transaction and 
necessary to give effect thereto is also authorized, except:
    (a) An ordinarily incident transaction, not explicitly authorized 
within the terms of the license, by or with a person whose property and 
interests in property are blocked pursuant to Sec.  583.201; or
    (b) An ordinarily incident transaction, not explicitly authorized 
within the terms of the license, involving a debit to a blocked account 
or a transfer of blocked property.


Sec.  583.405  Setoffs prohibited.

    A setoff against blocked property (including a blocked account), 
whether by a U.S. bank or other U.S. person, is a prohibited transfer 
under Sec.  583.201 if effected after the effective date.


Sec.  583.406  Entities owned by one or more persons whose property and 
interests in property are blocked.

    Persons whose property and interests in property are blocked 
pursuant to Sec.  583.201 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.  
583.201, regardless of whether the name of the entity is incorporated 
into OFAC's Specially Designated Nationals and Blocked Persons List 
(SDN List).

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


Sec.  583.501  General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501, 
subpart E, of this chapter. Licensing actions taken pursuant to part 
501 of this chapter with respect to the prohibitions contained in this 
part are considered actions taken pursuant to this part. General 
licenses and statements of licensing policy relating to this part also 
may be available through the Global Magnitsky sanctions page on OFAC's 
website: www.treasury.gov/ofac.


Sec.  583.502  [Reserved]


Sec.  583.503  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.  583.504  Payments and transfers to blocked accounts in U.S. 
financial institutions.

    Any payment of funds or transfer of credit in which a person whose 
property and interests in property are blocked pursuant to Sec.  
583.201 has any interest that comes within the possession or control of 
a U.S. financial institution must be blocked in an account on the books 
of that financial institution. A transfer of funds or credit by a U.S. 
financial institution between blocked accounts in its branches or 
offices is authorized, provided that no transfer is made from an 
account within the United States to an account held outside the United 
States, and further provided that a transfer from a blocked account may 
be made only to another blocked account held in the same name.

    Note 1 to Sec.  583.504: See Sec.  501.603 of this chapter for 
mandatory reporting requirements regarding financial transfers. See 
also Sec.  583.203 concerning the obligation to hold blocked funds 
in interest-bearing accounts.


[[Page 30546]]




Sec.  583.505  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.  583.506  Provision of certain legal services.

    (a) The provision of the following legal services to or on behalf 
of persons whose property and interests in property are blocked 
pursuant to Sec.  583.201 or any further Executive orders relating to 
the national emergency declared in Executive Order 13818 of December 
20, 2017, is authorized, provided that receipt of payment of 
professional fees and reimbursement of incurred expenses must be 
authorized pursuant to Sec.  583.507, 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 United States, provided that such advice and counseling are 
not provided to facilitate transactions in violation of this part;
    (2) Representation of persons named as defendants in or otherwise 
made parties to legal, arbitration, or administrative proceedings 
before any U.S. federal, state, or local court or agency;
    (3) Initiation and conduct of legal, arbitration, or administrative 
proceedings before any U.S. federal, state, or local court or agency;
    (4) Representation of persons before any U.S. federal, state, or 
local court or agency with respect to the imposition, administration, 
or enforcement of U.S. sanctions against such persons; and
    (5) Provision of legal services in any other context in which 
prevailing U.S. law requires access to legal counsel at public expense.
    (b) The provision of any other legal services to or on behalf of 
persons whose property and interests in property are blocked pursuant 
to Sec.  583.201 or any further Executive orders relating to the 
national emergency declared in Executive Order 13818 of December 20, 
2017, not otherwise authorized in this part, requires the issuance of a 
specific license.
    (c) 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 this section. Additionally, U.S. persons who 
provide services authorized by 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. See Sec.  583.404.
    (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.  583.201 or any further Executive orders 
relating to the national emergency declared in Executive Order 13818 of 
December 20, 2017 is prohibited unless licensed pursuant to this part.

    Note 1 to Sec.  583.506: 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.  583.507  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.  583.506(a) to 
or on behalf of any person whose property and interests in property are 
blocked pursuant to Sec.  583.201 or any further Executive orders 
relating to the national emergency declared in Executive Order 13818 of 
December 20, 2017 is authorized from funds originating outside the 
United States, provided that the funds 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.  583.506(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 authorizes 
payments for legal services using funds in which any other person 
whose property and interests in property are blocked pursuant to 
Sec.  583.201, 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.  583.508  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 13818 of December 20, 2017 are authorized.

[[Page 30547]]

Subpart F--Reports


Sec.  583.601  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 Findings of Violation


Sec.  583.701  Penalties and Findings of Violation.

    (a) The penalties available under section 206 of the International 
Emergency Economic Powers Act (50 U.S.C. 1701-1706) (IEEPA), as 
adjusted annually pursuant to the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 
note) or, in the case of criminal violations, as adjusted pursuant to 
18 U.S.C. 3571, are applicable to violations of the provisions of this 
part.
    (b) OFAC has the authority, pursuant to IEEPA, to issue Pre-Penalty 
Notices, Penalty Notices, and Findings of Violation; impose monetary 
penalties; engage in settlement discussions and enter into settlements; 
refer matters to the United States Department of Justice for 
administrative collection; and, in appropriate circumstances, refer 
matters to appropriate law enforcement agencies for criminal 
investigation and/or prosecution. For more information, see appendix A 
to part 501 of this chapter, which provides a general framework for the 
enforcement of all economic sanctions programs administered by OFAC, 
including enforcement-related definitions, types of responses to 
apparent violations, general factors affecting administrative actions, 
civil penalties for failure to comply with a requirement to furnish 
information or keep records, and other general civil penalties 
information.

Subpart H--Procedures


Sec.  583.801  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.  583.802  Delegation of certain authorities by the Secretary of 
the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13818 of December 20, 2017 and any further 
Executive orders relating to the national emergency declared therein, 
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.  583.901  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.

Appendix A to Part 583--Executive Order 13818

Executive Order 13818 of December 20, 2017

Blocking the Property of Persons Involved in Serious Human Rights Abuse 
or Corruption

    By the authority vested in me as President by the Constitution 
and the laws of the United States of America, including the 
International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) 
(IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) 
(NEA), the Global Magnitsky Human Rights Accountability Act (Public 
Law 114-328) (the ``Act''), section 212(f) of the Immigration and 
Nationality Act of 1952 (8 U.S.C. 1182(f)) (INA), and section 301 of 
title 3, United States Code,
    I, DONALD J. TRUMP, President of the United States of America, 
find that the prevalence and severity of human rights abuse and 
corruption that have their source, in whole or in substantial part, 
outside the United States, such as those committed or directed by 
persons listed in the Annex to this order, have reached such scope 
and gravity that they threaten the stability of international 
political and economic systems. Human rights abuse and corruption 
undermine the values that form an essential foundation of stable, 
secure, and functioning societies; have devastating impacts on 
individuals; weaken democratic institutions; degrade the rule of 
law; perpetuate violent conflicts; facilitate the activities of 
dangerous persons; and undermine economic markets. The United States 
seeks to impose tangible and significant consequences on those who 
commit serious human rights abuse or engage in corruption, as well 
as to protect the financial system of the United States from abuse 
by these same persons.
    I therefore determine that serious human rights abuse and 
corruption around the world constitute an unusual and extraordinary 
threat to the national security, foreign policy, and economy of the 
United States, and I hereby declare a national emergency to deal 
with that threat.
    I hereby determine and order:
    Section 1. (a) All property and interests in property that are 
in the United States, that hereafter come within the United States, 
or that are or hereafter come within the possession or control of 
any United States person of the following persons are blocked and 
may not be transferred, paid, exported, withdrawn, or otherwise 
dealt in:
    (i) The persons listed in the Annex to this order;
    (ii) any foreign person determined by the Secretary of the 
Treasury, in consultation with the Secretary of State and the 
Attorney General:
    (A) To be responsible for or complicit in, or to have directly 
or indirectly engaged in, serious human rights abuse;
    (B) to be a current or former government official, or a person 
acting for or on behalf of such an official, who is responsible for 
or complicit in, or has directly or indirectly engaged in:
    (1) Corruption, including the misappropriation of state assets, 
the expropriation of private assets for personal gain, corruption 
related to government contracts or the extraction of natural 
resources, or bribery; or
    (2) the transfer or the facilitation of the transfer of the 
proceeds of corruption;
    (C) to be or have been a leader or official of:
    (1) An entity, including any government entity, that has engaged 
in, or whose members have engaged in, any of the activities 
described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this 
section relating to the leader's or official's tenure; or
    (2) an entity whose property and interests in property are 
blocked pursuant to this order as a result of activities related to 
the leader's or official's tenure; or
    (D) to have attempted to engage in any of the activities 
described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this 
section; and
    (iii) any person determined by the Secretary of the Treasury, in 
consultation with the Secretary of State and the Attorney General:
    (A) To have materially assisted, sponsored, or provided 
financial, material, or technological support for, or goods or 
services to or in support of:
    (1) Any activity described in subsections (ii)(A), (ii)(B)(1), 
or (ii)(B)(2) of this section that is conducted by a foreign person;
    (2) any person whose property and interests in property are 
blocked pursuant to this order; or
    (3) any entity, including any government entity, that has 
engaged in, or whose members have engaged in, any of the activities 
described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this 
section, where the activity is conducted by a foreign person;
    (B) to be owned or controlled by, or to have acted or purported 
to act for or on behalf of, directly or indirectly, any person whose 
property and interests in property are blocked pursuant to this 
order; or

[[Page 30548]]

    (C) to have attempted to engage in any of the activities 
described in subsections (iii)(A) or (B) of this section.
    (b) The prohibitions in subsection (a) of this section apply 
except to the extent provided by statutes, or in regulations, 
orders, directives, or licenses that may be issued pursuant to this 
order, and notwithstanding any contract entered into or any license 
or permit granted before the effective date of this order.
    Sec. 2. The unrestricted immigrant and nonimmigrant entry into 
the United States of aliens determined to meet one or more of the 
criteria in section 1 of this order would be detrimental to the 
interests of the United States, and the entry of such persons into 
the United States, as immigrants or nonimmigrants, is hereby 
suspended. Such persons shall be treated as persons covered by 
section 1 of Proclamation 8693 of July 24, 2011 (Suspension of Entry 
of Aliens Subject to United Nations Security Council Travel Bans and 
International Emergency Economic Powers Act Sanctions).
    Sec. 3. I hereby determine that the making of donations of the 
types of articles 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 this order would 
seriously impair my ability to deal with the national emergency 
declared in this order, and I hereby prohibit such donations as 
provided by section 1 of this order.
    Sec. 4. The prohibitions in section 1 include:
    (a) The making of any contribution or provision of funds, goods, 
or services by, to, or for the benefit of any person whose property 
and interests in property are blocked pursuant to this order; and
    (b) the receipt of any contribution or provision of funds, 
goods, or services from any such person.
    Sec. 5. (a) Any transaction that evades or avoids, has the 
purpose of evading or avoiding, causes a violation of, or attempts 
to violate any of the prohibitions set forth in this order is 
prohibited.
    (b) Any conspiracy formed to violate any of the prohibitions set 
forth in this order is prohibited.
    Sec. 6. For the purposes of this order:
    (a) The term ``person'' means an individual or entity;
    (b) the term ``entity'' means a partnership, association, trust, 
joint venture, corporation, group, subgroup, or other organization; 
and
    (c) the term ``United States person'' means any United States 
citizen, permanent resident alien, entity organized under the laws 
of the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States.
    Sec. 7. For those persons whose property and interests in 
property are blocked pursuant to this order who might have a 
constitutional presence in the United States, I find that because of 
the ability to transfer funds or other assets instantaneously, prior 
notice to such persons of measures to be taken pursuant to this 
order would render those measures ineffectual. I therefore determine 
that for these measures to be effective in addressing the national 
emergency declared in this order, there need be no prior notice of a 
listing or determination made pursuant to this order.
    Sec. 8. The Secretary of the Treasury, in consultation with the 
Secretary of State, is hereby authorized to take such actions, 
including adopting rules and regulations, and to employ all powers 
granted to me by IEEPA and the Act as may be necessary to implement 
this order and section 1263(a) of the Act with respect to the 
determinations provided for therein. The Secretary of the Treasury 
may, consistent with applicable law, redelegate any of these 
functions to other officers and agencies of the United States. All 
agencies shall take all appropriate measures within their authority 
to implement this order.
    Sec. 9. The Secretary of State is hereby authorized to take such 
actions, including adopting rules and regulations, and to employ all 
powers granted to me by IEEPA, the INA, and the Act as may be 
necessary to carry out section 2 of this order and, in consultation 
with the Secretary of the Treasury, the reporting requirement in 
section 1264(a) of the Act with respect to the reports provided for 
in section 1264(b)(2) of that Act. The Secretary of State may, 
consistent with applicable law, redelegate any of these functions to 
other officers and agencies of the United States consistent with 
applicable law.
    Sec. 10. The Secretary of the Treasury, in consultation with the 
Secretary of State and the Attorney General, is hereby authorized to 
determine that circumstances no longer warrant the blocking of the 
property and interests in property of a person listed in the Annex 
to this order, and to take necessary action to give effect to that 
determination.
    Sec. 11. The Secretary of the Treasury, in consultation with the 
Secretary of State, is hereby authorized to submit recurring and 
final reports to the Congress on the national emergency declared in 
this order, consistent with section 401(c) of the NEA (50 U.S.C. 
1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).
    Sec. 12. This order is effective at 12:01 a.m., Eastern Standard 
Time, December 21, 2017.
    Sec. 13. This order is not intended to, and does not, create any 
right or benefit, substantive or procedural, enforceable at law or 
in equity by any party against the United States, its departments, 
agencies, or entities, its officers, employees, or agents, or any 
other person.

Donald J. Trump

THE WHITE HOUSE,

December 20, 2017.

Annex

1. Mukhtar Hamid Shah; Date of Birth (DOB) August 11, 1939; alt. DOB 
November 8, 1939; nationality, Pakistan
2. Angel Rondon Rijo; DOB July 16, 1950; nationality, Dominican 
Republic
3. Dan Gertler; DOB December 23, 1973; nationality, Israel; alt. 
nationality, Democratic Republic of the Congo
4. Maung Maung Soe; DOB March 1964; nationality, Burma
5. Yahya Jammeh; DOB May 25, 1965; nationality, The Gambia
6. Sergey Kusiuk; DOB December 1, 1966; nationality, Ukraine; alt. 
nationality, Russia
7. Benjamin Bol Mel; DOB January 3, 1978; alt. DOB December 24, 
1978; nationality, South Sudan; alt. nationality, Sudan
8. Julio Antonio Juarez Ramirez; DOB December 1, 1980; nationality, 
Guatemala
9. Goulnora Islamovna Karimova; DOB July 8, 1972; nationality, 
Uzbekistan
10. Slobodan Tesic; DOB December 21, 1958; nationality, Serbia
11. Artem Yuryevich Chayka; DOB September 25, 1975; nationality, 
Russia
12. Gao Yan; DOB April 1963; nationality, China
13. Roberto Jose Rivas Reyes; DOB July 6, 1954; nationality, 
Nicaragua

    Dated: June 26, 2018.
Andrea Gacki,
Acting Director, Office of Foreign Assets Control.
    Approved:

    Dated: June 26, 2018.
Sigal P. Mandelker,
Under Secretary, Office of Terrorism and Financial Intelligence, 
Department of the Treasury.
[FR Doc. 2018-14060 Filed 6-28-18; 8:45 am]
BILLING CODE 4810-AL-P