[Federal Register Volume 84, Number 120 (Friday, June 21, 2019)]
[Rules and Regulations]
[Pages 29055-29062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13163]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 501
Reporting, Procedures and Penalties Regulations
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Interim final rule with request for comments.
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SUMMARY: The Department of the Treasury's Office of Foreign Assets
Control (OFAC) is issuing this interim final rule to amend the
Reporting, Procedures and Penalties Regulations (the Regulations) to
provide updated instructions and incorporate new requirements for
parties filing reports on blocked property, unblocked property, or
rejected transactions. In addition, OFAC is revising the licensing
procedures section of the Regulations to include information regarding
OFAC's electronic license application procedures and to provide
additional instructions regarding applications for the release of
blocked funds. OFAC also is clarifying the rules governing the
availability of information under the Freedom of Information Act (FOIA)
for information that is submitted to OFAC pursuant to the Regulations.
Finally, OFAC is making numerous technical and conforming edits
throughout the Regulations.
DATES: This interim final rule is effective June 21, 2019. Written
comments may be submitted on or before July 22, 2019.
ADDRESSES: You may submit comments by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov. Follow the
instructions on the website for submitting comments. Refer to Docket
Number OFAC-2019-0003.
Fax: Attn: Request for Comments (Amendments to OFAC's Reporting,
Procedures and Penalties Regulations) 202-622-1759.
Mail: Attn: Request for Comments (Amendments to OFAC's Reporting,
Procedures and Penalties Regulations), Office of Foreign Assets
Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW,
Freedman's Bank Building, Washington, DC 20220. Refer to Docket Number
OFAC-2019-0003.
Instructions: All submissions received must include the agency name
and the Federal Register Doc. number that appears at the end of this
document. All comments, including attachments and other supporting
materials, will become part of the public record and subject to public
disclosure. Sensitive personal information, such as account numbers or
Social Security numbers, should not be included. Comments generally
will not be edited to remove any identifying or contact information.
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:
Background
The Regulations set forth standard reporting and recordkeeping
requirements and license application and other procedures relevant to
the economic sanctions programs administered by OFAC. OFAC is updating
six sections of the Regulations.
Reports on Blocked and Unblocked Property
OFAC is revising Sec. 501.603 of the Regulations, which covers
reports on blocked property, to provide greater detail regarding the
information required to be provided to OFAC in connection with blocking
reports and to expand this section to cover reports on the release of
property from blocked status (i.e., unblocked property), as well as to
make certain technical and conforming changes related thereto. As a
general matter, in the past, when a submitter has not provided
sufficient information to identify blocked or unblocked property and to
determine the authority or authorities under which it was blocked or
unblocked, OFAC has requested follow up information from the submitter,
sometimes requiring multiple requests. OFAC is expanding the
information listed in Sec. 501.603 that is required to be submitted in
reports on blocked property in an effort to clarify what information is
needed to reduce the need for follow up requests from OFAC and in order
to lessen the overall reporting burden for submitters.
Initial blocking reports. The expanded instructions for initial
blocking reports require submitters to include the following
information: (1) The name and address of the person holding the blocked
property and a contact person from whom additional information may be
obtained; (2) a description of any transaction associated with the
blocking, including certain identifying information; (3) the associated
sanctions target(s) whose property is blocked or a reference to the
relevant written communication from OFAC if there is no associated
target or that target is unknown; (4) a description of the property
that is the subject of the blocking and its location; (5) the date the
property was blocked; (6) the actual, or if unknown, estimated value of
the property in U.S. Dollars; (7) the legal authority or authorities
under which the
[[Page 29056]]
property is blocked and the action taken with respect to the property
(e.g., that the property has been deposited into a new or existing
blocked, interest-bearing account); and (8) a copy of any payment or
transfer instructions or other relevant documentation.
Annual reports of blocked property. In the case of annual reports
of blocked property, Sec. 501.603 will require submitters to include
the following information: (1) The name and address of the person
holding the blocked property and a contact from whom additional
information may be obtained; (2) the number of accounts or items
reported in the annual report; (3) the associated sanctions target(s)
whose property is blocked or a reference to the relevant written
communication from OFAC if there is no associated target or that target
is unknown; (4) a description of the property that is the subject of
the blocking and its location; (5) the date the property was blocked;
(6) the actual, or if unknown, estimated value of the property in U.S.
Dollars; and (7) the legal authority or authorities under which the
property is blocked.
Annual report format. OFAC is revising Sec. 501.603(b)(2) to
provide additional information regarding the required format for
submitting annual reports of blocked property. Specifically, reports
must be submitted either using the most recent version of Form TDF 90-
22.50, Annual Report of Blocked Property, or by another official
reporting option, including electronic, as specified by OFAC on its
website. OFAC is updating Form TDF 90-22.50 in connection with the
amendment of the Regulations to align the form with the revised
requirements of the Regulations. The changes to Form TDF 90-22.50 are
also being made in an effort to reduce the need for follow up requests
from OFAC in order to lessen the overall reporting burden for
submitters. Requests to submit the information required pursuant to
Sec. 501.603(b)(2) in an alternate format will be considered by OFAC
on a case-by-case basis. OFAC is adding a new requirement for
submitters of annual reports of blocked property who maintain blocked
funds in omnibus accounts, requiring that annual reports contain a
disaggregated list showing each blocked asset contained within the
omnibus account. This new requirement to include disaggregated
information in the annual reports begins with the 2020 annual reports,
which are due no later than September 30, 2020.
Reports on property that is unblocked. OFAC is incorporating into
Sec. 501.603 certain requirements regarding reports on the release of
property from blocked status (i.e., property that is unblocked). These
reports are only due when specifically required by OFAC, such as when
they are made a condition of a general or specific license, and must be
filed within 10 business days from the date such property is unblocked
or as otherwise specified by OFAC. When a report is required, Sec.
501.603(b)(3) will now require submitters to include the following
information: (1) The name and address of the person holding the
property immediately prior to the property's release from blocked
status and a contact from whom additional information may be obtained;
(2) the associated sanctions target(s) whose property had been
previously blocked or a reference to the relevant written communication
from OFAC if there is no associated target or that target is unknown;
(3) a description of the property and its location immediately prior to
its release from blocked status, including certain required identifying
information; (4) the date the property was unblocked; (5) the actual,
or if unknown, estimated value of the property that was released from
blocked status in U.S. Dollars; (6) the legal authority or authorities
under which the property was unblocked; and (7) when available, a copy
of the original blocking report filed with OFAC pursuant to Sec.
501.603(b)(1). OFAC is making several technical and conforming changes
throughout Sec. 501.603 to reflect these additional requirements.
Electronic submission of reports. OFAC is revising Sec. 501.603 to
allow for the submission of all reports on blocked or unblocked
property by email, U.S. mail, or any other official reporting option,
including electronic, as specified by OFAC on its website (http://www.treasury.gov/ofac). OFAC strongly prefers to receive reports made
pursuant to this section by email or any other official electronic
reporting option, as specified by OFAC on its website (http://www.treasury.gov/ofac).
Rules regarding the availability of information. Finally, OFAC is
adding a new paragraph to Sec. 501.603 to clarify the rules regarding
the availability of information, under the FOIA. Specifically,
information provided to OFAC pursuant to Sec. 501.603 is subject to
the FOIA and, generally, will be released upon the receipt of a valid
FOIA request, unless OFAC determines that such information should be
withheld in accordance with an applicable FOIA exemption.
Reports on Rejected Transactions
OFAC is revising Sec. 501.604, which covers reports on rejected
transactions, to: Clarify that this section applies broadly to all
rejected transactions (and not only to rejected funds transfers);
provide greater detail regarding the information to be provided to OFAC
in connection with reports on rejected transactions; where to report
such information; and make certain technical and conforming changes.
Clarification of scope of transactions to be reported. OFAC is
replacing references to ``rejected funds transfers'' with references to
``rejected transactions'' and is adding a definition for the term
``transactions'' in order to provide additional clarity. Rejected
transactions covered under this revised section include rejected
transactions related to wire transfers, trade finance, securities,
checks, foreign exchange, and goods or services. OFAC also has made a
number of technical and conforming changes throughout Sec. 501.604 to
clarify that rejected transaction reporting is not limited to rejected
funds transfers.
Information to be included in reports. OFAC is also revising Sec.
501.604 to provide expanded instructions on the information to be
submitted in reports on rejected transactions. As a general matter, in
the past, when a submitter has not provided sufficient information to
identify a transaction and the authority or authorities under which the
transaction was rejected, OFAC has requested follow up information from
the submitter, sometimes requiring multiple requests. OFAC is expanding
its instructions on the information to be submitted in reports on
rejected transactions in an effort to reduce the need for follow up
requests from OFAC and in order to lessen the overall reporting burden
for submitters. Submitters must now include the following information:
(1) The name and address of the person that rejected the transaction
and a contact from whom additional information may be obtained; (2) a
description of the rejected transaction, including certain required
identifying information; (3) if applicable, the associated sanctions
target(s) whose involvement in the transaction has resulted in the
transaction being rejected and its location, if known; (4) the date the
transaction was rejected; (5) the actual, or if unknown, estimated
value of the property in U.S. Dollars; (6) the legal authority or
authorities under which the transaction was rejected; and (7) a copy of
any related payment or transfer instructions or other relevant
documentation.
Electronic submission of reports. OFAC is revising Sec. 501.604 to
allow for the submission of rejected transaction reports by email, U.S.
mail, or any other official reporting option, including
[[Page 29057]]
electronic, as specified by OFAC on its website ((http://www.treasury.gov/ofac). OFAC strongly prefers to receive reports made
pursuant to this section by email or any other official electronic
reporting option, as specified by OFAC on its website ((http://www.treasury.gov/ofac).
Rules regarding the availability of information. Finally, OFAC is
adding a new paragraph to Sec. 501.604 to clarify the rules regarding
the availability of information pursuant to the FOIA. Specifically,
information provided to OFAC pursuant to Sec. 501.604 is subject to
the FOIA and, generally, will be released upon the receipt of a valid
FOIA request, unless OFAC determines that such information should be
withheld in accordance with an applicable FOIA exemption.
Licensing Procedures
OFAC is revising Sec. 501.801, which describes licensing
procedures, to include information regarding OFAC's electronic license
application procedures and to make a number of technical and conforming
changes. Specifically, OFAC is revising Sec. 501.801 to require that
applications for specific licenses to engage in any transactions
otherwise prohibited pursuant to 31 CFR chapter V or sanctions programs
administered by OFAC be filed through OFAC's Reporting and License
Application Forms page (https://licensing.ofac.treas.gov/) or by mail.
Applications for the unblocking of funds must be submitted by one of
these means using Form TD-F 90-22.54, ``Application for the Release of
Blocked Funds,'' or in another format that contains all of the
information requested in Form TD-F 90-22.54. Form TD-F 90-22.54 may be
obtained from OFAC's Reporting and License Application Forms page. OFAC
also is revising this section to remove the provision governing
registration for non-governmental organizations, as this process has
been phased out in favor of standard licensing procedures. In addition,
OFAC is revising this section to clarify the rules governing the
availability, under the FOIA, of information submitted to OFAC pursuant
to Sec. 501.801.
Other Technical and Conforming Changes
OFAC is revising Sec. 501.602, which covers reports to be
furnished on demand, to provide additional clarity by adding references
to electronic documents, and adding a new paragraph defining the term
``document'' for purposes of this section. OFAC is adding a new
requirement that any persons providing documents to OFAC pursuant to
Sec. 501.602 must produce the documents in a usable format agreed upon
by OFAC. To provide guidance as to what will be considered a usable
format, OFAC is also adding a reference in the regulations to newly
updated guidance regarding data delivery standards and the submission
of documents, which is available on OFAC's website (http://www.treasury.gov/ofac).
In addition, OFAC is revising paragraph (a) of Sec. 501.701, which
describes penalties for willful violations of the Trading with the
Enemy Act (TWEA). Specifically, OFAC is adjusting the penalties as
required by Section 107(a)(4) of the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010 (Pub. L. 111-195, 124 Stat.
1312) (CISADA).
Finally, OFAC is revising Sec. 501.806, which describes procedures
for unblocking funds believed to have been blocked due to mistaken
identity, to require a party who believes that funds have been blocked
due to mistaken identity send requests to release funds to OFAC in
writing either by U.S. mail or electronically to OFAC's reports email
address ([email protected]). OFAC is also making a number of
technical and conforming changes to this section.
Electronic Availability
This document and additional information concerning OFAC are
available on OFAC's website (http://www.treasury.gov/ofac).
Public Participation
These amendments are being published as an interim final rule with
an effective date of June 21, 2019. Because the amendment of the
Regulations is a rule of agency procedure and because it involves 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. Although notice and comment procedures are not required, OFAC
invites comments on this interim final rule.
Paperwork Reduction Act
Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507),
the collections of information related to the existing Regulations have
been previously approved by the Office of Management and Budget under
control number 1505-0164. This interim final rule modifies certain of
the collections of information under the Regulations. Specifically, in
Sec. 501.603, OFAC is modifying the information to be collected and
the format and means of submission for reports on blocked property--
both initial reports and annual reports--and is adding requirements
regarding the information to be collected and the format and means of
submission for reports on previously blocked property that has been
unblocked. In Sec. 501.604, OFAC is modifying the information to be
collected and the format and means of submission for reports on
rejected transactions. OFAC is also clarifying the breadth of the
existing requirement for reporting on rejected funds transfers.
These modifications to the collections of information under the
Regulations, and certain forms available as a means to report such
information, have been submitted to the Office of Management and Budget
(OMB) for review and approval 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.
The likely respondents and record-keepers affected by these
collections of information collections contained in part 501 are
financial institutions, business organizations, nonprofit
organizations, individuals, and legal representatives.
Since OFAC's last filing, OFAC has reviewed and revised its
methodology to more accurately estimate the reporting burden as set
forth below. The burden of the recordkeeping requirement imposed by
501.601 is minimal because the records required to be maintained should
already be maintained under standard business practice.
Based on a general review of its databases and using OFAC's
enhanced methodology and updated data, OFAC's estimate for the number
of unique reporting respondents is approximately 6,900. The estimated
total annual reporting burden is approximately 14,850 hours.
Accordingly, the estimated annual hourly burden per respondent is
approximately 2.2 hours. The estimated annual frequency of responses is
between 1 and 3,300, varying greatly by entity depending on the size,
nature, and scope of business activities of each respondent. The
estimated total number of responses per year is approximately 31,601
responses.
[[Page 29058]]
OFAC assesses that there is an average time estimate for reports
associated with forms ranging from 15 minutes to 2 hours and for
reports associated with general licenses and other miscellaneous
reports ranging from 1 to 5 hours.
Comments are invited on: (a) Whether this collection of information
is necessary for the proper performance of the functions of the agency,
including whether the information has practical utility; (b) the
accuracy of the agency's estimate of the burden of the collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; (d) ways to minimize the burden of the
collection of information on respondents, including through the use of
automated collection techniques and other forms of information
technology; and (e) the estimated capital or start-up costs of the
operation, maintenance, and/or purchase of services to provide
information. Comments concerning the above information and the accuracy
of these burden estimates, and suggestions for reducing this burden,
should be directed to OMB, Attention: Desk Officer for the Department
of the Treasury, Office of Information and Regulatory Affairs (OIRA),
Washington, DC 20503 or by email to: [email protected], with
a copy to Chief of Records, Attention: Request for Comments, Office of
Foreign Assets Control, Department of the Treasury, 1500 Pennsylvania
Avenue NW, Freedman's Bank Building, Washington, DC 20220. Any such
comments should be submitted not later than July 22, 2019. All comments
on these collections of information will be a matter of public record.
List of Subjects in 31 CFR Part 501
Administrative practice and procedure, Banks, banking, Blocking of
assets, Foreign trade, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Department of the
Treasury's Office of Foreign Assets Control amends 31 CFR part 501 to
read as follows:
PART 501--REPORTING, PROCEDURES AND PENALTIES REGULATIONS
0
1. The authority citation for part 501 is revised as follows:
Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, 2339B; 19 U.S.C.
3901-3913; 21 U.S.C. 1901-1908; 22 U.S.C. 287c; 22 U.S.C. 2370(a),
6009, 6032, 7205; 28 U.S.C. 2461 note; 31 U.S.C. 321(b); 50 U.S.C.
1701-1706; 50 U.S.C. 4301-4341341; Pub. L. 111-195, 124 Stat. 1312
(22 U.S.C. 8501-8551).
Subpart C--Reports
0
2. Revise Sec. 501.602 to read as follows:
Sec. 501.602 Reports to be furnished on demand.
(a) Every person is required to furnish under oath, in the form of
reports or otherwise, from time to time and at any time as may be
required by the Office of Foreign Assets Control, complete information
relative to any act or transaction, regardless of whether such act or
transaction is effected pursuant to license or otherwise, subject to
the provisions of this chapter or relative to any property in which any
foreign country or any national thereof has or had any interest of any
nature whatsoever, direct or indirect. The Office of Foreign Assets
Control may require that such reports include the production of any
books, contracts, letters, papers, or other hard copy or electronic
documents relating to any such act, transaction, or property, in the
custody or control of the persons required to make such reports.
Reports with respect to transactions may be required either before,
during, or after such transactions. Except as provided in parts 596 and
597, the Office of Foreign Assets Control may, through any person or
agency, conduct investigations, hold hearings, administer oaths,
examine witnesses, receive evidence, take depositions, and require by
subpoena the attendance and testimony of witnesses and the production
of any books, contracts, letters, papers, and other hard copy or
electronic documents relating to any matter under investigation,
regardless of whether any report has been required or filed in
connection therewith.
(b) For purposes of paragraph (a) of this section, the term
``document'' includes any written, recorded, or graphic matter or other
means of preserving thought or expression (including in electronic
format), and all tangible things stored in any medium from which
information can be processed, transcribed, or obtained directly or
indirectly, including correspondence, memoranda, notes, messages,
contemporaneous communications such as text and instant messages,
letters, emails, spreadsheets, metadata, contracts, bulletins, diaries,
chronological data, minutes, books, reports, examinations, charts,
ledgers, books of account, invoices, air waybills, bills of lading,
worksheets, receipts, printouts, papers, schedules, affidavits,
presentations, transcripts, surveys, graphic representations of any
kind, drawings, photographs, graphs, video or sound recordings, and
motion pictures or other film.
(c) Persons providing documents to OFAC pursuant to this section
must produce documents in a usable format agreed upon by OFAC. For
guidance, see OFAC's data delivery standards available on OFAC's
website (http://www.treasury.gov/ofac).
Note 1 to Sec. 501.602: See subpart F of part 597 for the
relationship between this section and part 597.
0
3. Revise Sec. 501.603 to read as follows:
Sec. 501.603 Reports on blocked and unblocked property.
(a) Who must report--(1) Holders of blocked property. Any U.S.
person (or person subject to U.S. jurisdiction), including a financial
institution, holding property blocked pursuant to this chapter or
releasing property from blocked status (i.e., unblocking property)
pursuant to this chapter shall submit the relevant reports described in
this section to the Office of Foreign Assets Control (OFAC). This
requirement applies to all U.S. persons (or persons subject to U.S.
jurisdiction) who have or have had in their possession or control any
property blocked pursuant to this chapter, including financial
institutions that receive and block payments or transfers.
(2) Primary responsibility to report. A report may be filed on
behalf of a holder of blocked property or a releaser of property from
blocked status by an attorney, agent, or other person. Primary
responsibility for reporting, however, rests with the actual holder or
releaser of the property, or the person exercising control over
property located outside the United States, with the following
exceptions: Primary responsibility for reporting any trust assets rests
with the trustee; and primary responsibility for reporting real
property rests with any U.S. co-owner, legal representative, agent, or
property manager in the United States. No person is excused from filing
a report by reason of the fact that another person has submitted a
report with regard to the same property, except upon actual knowledge
of the report filed by such other person.
(3) Financial institution. For purposes of this section, the term
``financial institution'' includes a banking institution, domestic
bank, United States depository institution, financial institution, or
U.S. financial institution, as those terms are defined in the
applicable part of this chapter.
(b) What must be reported--(1) Initial blocking reports--(i) When
reports are
[[Page 29059]]
due. Reports shall be filed within 10 business days from the date that
property becomes blocked.
(ii) Required information to be reported. Initial reports on
blocked property shall include the following:
(A) The name and address of the person holding the property blocked
pursuant to this chapter (i.e., the person filing the report on blocked
property, such as a financial institution), and the name, telephone
number, and email address of a contact from whom additional information
may be obtained;
(B) A description of any transaction associated with the blocking,
including: The type of transaction; any persons, including financial
institutions, participating in the transaction and their respective
locations (e.g., if relevant, customers, beneficiaries, originators,
letter of credit applicants, and their banks; intermediary banks;
correspondent banks; issuing banks; and advising or confirming banks);
and any reference numbers, dates, or other information necessary to
identify the transaction;
(C) The associated sanctions target(s) whose property is blocked
(such as a Specially Designated National or other blocked person), the
location(s) of the target(s) (if known), and, if not evident, a
narrative description of the interest(s) of the target(s) in the
property; if there is no target or the target is not known, include a
reference to the relevant written communication from OFAC pursuant to
which the blocking action was taken;
(D) A description of the property that is the subject of the
blocking and its location in the United States or otherwise, including
any relevant account numbers and account types, check numbers,
reference numbers, dates, or other information necessary to identify
the property;
(E) The date the property was blocked;
(F) The actual, or if unknown, estimated value of the property in
U.S. Dollars. If the blocked property represents an outstanding loan, a
credit card receivable, or other property with a negative balance, the
amount blocked should be reported as $0.00 (zero) with the amount owed
reflected in a narrative description. Blocked trade finance documents
should also be reported as $0.00 (zero) with the value of the shipment
reflected in a narrative description. Transactions blocked in foreign
currencies must be reported in U.S. Dollars with the foreign currency
amount and notional exchange rate in the narrative;
(G) The legal authority or authorities under which the property is
blocked and any action taken with respect to the property (e.g., that
the property has been deposited into a new or existing blocked,
interest-bearing account that is labeled as such and is established in
the name of, or contains a means of clearly identifying the interest
of, the person subject to blocking pursuant to the requirements of this
chapter). This may include a reference to the sanctions program
(current programs are listed here: www.treasury.gov/resource-center/sanctions/SDN-List/Pages/program_tags.aspx), the applicable part of
this chapter (e.g., 31 CFR part 515, 31 CFR part 544), an Executive
order (E.O.) (e.g., E.O. 13224, E.O. 13599), or a statute (e.g.,
Foreign Narcotics Kingpin Designation Act). (Note: For this purpose,
the term ``SDN'' is generic and cannot be used to identify the legal
authority for blocking property); and
(H) A copy of any payment or transfer instructions, check, letter
of credit, accompanying bill of lading, invoice, or any other relevant
documentation received in connection with any related transaction.
(2) Annual reports of blocked property--(i) When reports are due. A
report on all blocked property held as of June 30 of the current year
shall be filed annually by September 30.
(ii) Required information to be reported. Annual reports on blocked
property shall include the following:
(A) The name and address of the person holding the property blocked
pursuant to this chapter (i.e., the person filing the report on blocked
property, such as a financial institution), and the name, telephone
number, and email address of a contact from whom additional information
may be obtained;
(B) The number of accounts or items reported in the annual report;
(C) Beginning with the annual report due no later than September
30, 2020, and for each subsequent reporting year, the associated
sanctions target(s) whose property is blocked, such as a Specially
Designated National or other blocked person, the location(s) of the
target(s), if known, and, if not evident, a narrative description of
the interest(s) of the target(s) in the transaction; if there is no
target or the target is not known, include a reference to the relevant
written communication from OFAC pursuant to which the blocking action
was taken;
(D) A description of the property that is the subject of the
blocking and its location in the United States or otherwise, including
any relevant account numbers and account types, check numbers,
reference numbers, dates, or other information necessary to identify
the property;
(E) The date the property was blocked;
(F) The actual, or if unknown, estimated value of the property in
U.S. Dollars as of June 30. If a June 30 value date is not available
and a value date other than June 30 is reported, so indicate. If the
blocked property represents an outstanding loan, a credit card
receivable, or other property with a negative balance, the amount
blocked should be reported as $0.00 (zero) with the amount owed
reflected in a narrative description. Blocked trade finance documents
should also be reported as $0.00 (zero) with the value of the shipment
reflected in a narrative description. Transactions blocked in foreign
currencies must be reported in U.S. Dollars with the foreign currency
amount and notional exchange rate in the narrative; and
(G) The legal authority or authorities under which the property is
blocked. This may include a reference to the sanctions program (current
programs are listed here: www.treasury.gov/resource-center/sanctions/SDN-List/Pages/program_tags.aspx), the applicable part of this chapter
(e.g., 31 CFR part 515, 31 CFR part 544), an Executive order (E.O.)
(e.g., E.O. 13224, E.O. 13599), or a statute (e.g., Foreign Narcotics
Kingpin Designation Act). (Note: For this purpose, the term ``SDN'' is
generic and cannot be used to identify the legal authority for blocking
property).
(iii) Format of annual reports. Annual reports shall be submitted
to OFAC either using the most recent version of Form TDF 90-22.50,
Annual Report of Blocked Property, or by another official reporting
option, including electronic, as specified by OFAC on its website
(http://www.treasury.gov/ofac). While blocked funds may be maintained
in omnibus accounts, the annual reports must contain a disaggregated
list showing each blocked asset contained within the omnibus account.
Form TDF 90-22.50 may be obtained directly from OFAC by downloading the
form from the OFAC Reporting and License Application Forms page on
OFAC's website (https://www.treasury.gov/resource-center/sanctions/Pages/forms-index.aspx). Requests to submit the information required
pursuant to Sec. 501.603(b)(2)(ii) in an alternative format developed
by the reporter are invited and will be considered by OFAC on a case-
by-case basis. A copy of reports submitted pursuant to Sec.
501.603(b)(2) shall be retained for the submitter's records.
(3) Unblocking reports--(i) When reports are due. These reports are
only due when specifically required by OFAC, such as when they are made
a
[[Page 29060]]
condition of a general or specific license, and shall be filed within
10 business days from the date property is unblocked.
(ii) Required information to be reported. Reports on the release of
property from blocked status (i.e., property that is unblocked) shall
include the following:
(A) The name and address of the person holding the property
immediately prior to the property's release from blocked status (i.e.,
the person filing the unblocking report, such as a financial
institution), and the name, telephone number, and email address of a
contact from whom additional information may be obtained;
(B) The associated sanctions target(s) whose property had been
previously blocked and was released from blocked status, such as a
Specially Designated National or other blocked person, the location(s)
of the target(s), if known, and, if not evident, a narrative
description of the interest(s) of the target(s) in the previously
blocked property or transaction; if there is no target or the target is
not known, include a reference to the relevant written communication
from OFAC pursuant to which the blocking action was taken;
(C) A description of the property that has been unblocked and its
location in the United States or otherwise immediately prior to its
release from blocked status, including any relevant account numbers and
account types, check numbers, reference numbers, dates, or other
information necessary to identify the property;
(D) The date the property was unblocked;
(E) The actual value of the property that was released from blocked
status in U.S. Dollars. If the property represented an outstanding
loan, a credit card receivable, or other property with a negative
balance, the amount unblocked should be reported as $0.00 (zero) with
the amount owed reflected in a narrative description. Trade finance
documents should also be reported as $0.00 (zero) with the value of the
shipment reflected in a narrative description. Transactions that were
previously blocked in foreign currencies and were unblocked in a
foreign currency must be reported in U.S. Dollars with the foreign
currency amount and notional exchange rate in the narrative;
(F) The legal authority or authorities under which the property was
unblocked. This may include, for example, reference to a specific or
general license under an applicable part of this chapter or an E.O.;
and
(G) A copy of the original blocking report filed with OFAC pursuant
to Sec. 501.603(b)(1), when available.
(c) Reports on retained funds pursuant to Sec. 596.504(b) of this
chapter. The reporting requirements set forth in this section are
applicable to any person retaining funds pursuant to Sec. 596.504(b)
or releasing such funds.
(d) Where to report. All reports under this section shall be
submitted to OFAC using one of the following methods: Email:
[email protected]; U.S. mail: Office of Foreign Assets Control,
Sanctions Compliance and Evaluation Division, U.S. Department of the
Treasury, 1500 Pennsylvania Avenue, NW, Freedman's Bank Building,
Washington, DC 20220; or any other official reporting option, including
electronic, as specified by OFAC on its website (http://www.treasury.gov/ofac). OFAC strongly prefers to receive reports made
pursuant to this section by email or any other official electronic
reporting option, as specified by OFAC on its website.
(e) Rules governing availability of information. OFAC records are
made available to the public in accordance with the Freedom of
Information Act (FOIA) (5 U.S.C. 552) and the provisions of 31 CFR part
1. See 31 CFR 1.5 for provisions pertaining to business information.
Reports on blocked and unblocked property and the information required
to be reported to OFAC pursuant to this section are subject to the
FOIA. Information provided to OFAC pursuant to this section generally
will be released upon the receipt of a valid FOIA request, unless OFAC
determines that such information should be withheld in accordance with
an applicable FOIA exemption.
0
4. Revise Sec. 501.604 to read as follows:
Sec. 501.604 Reports on rejected transactions.
(a) Who must report--(1) Persons rejecting transactions. Any U.S.
person (or person subject to U.S. jurisdiction), including a financial
institution, that rejects a transaction that is not blocked under the
provisions of this chapter, but where processing or engaging in the
transaction would nonetheless violate a provision contained in this
chapter, shall submit a report to the Office of Foreign Assets Control
(OFAC).
(2) Financial institution. For purposes of this section, the term
``financial institution'' includes a banking institution, domestic
bank, United States depository institution, financial institution, or
U.S. financial institution, as those terms are defined in the
applicable part of this chapter.
(3) Transaction. The term transaction includes transactions related
to wire transfers, trade finance, securities, checks, foreign exchange,
and goods or services.
(b) Required information to be reported. Reports on rejected
transactions shall include the following:
(1) The name and address of the person that rejected the
transaction pursuant to this chapter (i.e., the person filing the
report on the rejected transaction, such as a financial institution),
and the name and telephone number of a contact from whom additional
information may be obtained;
(2) A description of the rejected transaction, including the type
of transaction; any persons, including financial institutions,
participating in the transaction and their respective locations (e.g.,
customers, beneficiaries, originators, letter of credit applicants, and
their banks; intermediary banks; correspondent banks; issuing banks;
and advising or confirming banks); a description of the property that
is the subject of the transaction; and any reference numbers, account
numbers, dates, or other information necessary to identify the
transaction;
(3) If applicable, the associated sanctions target(s) whose
involvement in the transaction has resulted in the transaction being
rejected, the location(s) of the associated sanctions target(s), if
known, and, if not evident, a narrative description of the interest(s)
of the target(s) in the transaction;
(4) The date the transaction was rejected;
(5) The actual, or if unknown, estimated value of the property in
U.S. Dollars. Rejected trade documents should be reported as $0.00
(zero) with the value of the shipment reflected in a narrative
description. Rejected transactions in foreign currencies must be
reported in U.S. Dollars with the foreign currency amount and notional
exchange rate in a narrative description;
(6) The legal authority or authorities under which the transaction
was rejected. This may include a reference to the sanctions program
(current programs are listed here: www.treasury.gov/resource-center/sanctions/SDN-List/Pages/program_tags.aspx), the applicable part of
this chapter (e.g., 31 CFR part 515, 31 CFR part 544), an Executive
Order (E.O.) (e.g., E.O. 13224, E.O. 13599), or a statute (e.g.,
Foreign Narcotics Kingpin Designation Act). (Note: For this purpose,
the term ``SDN'' is generic and cannot be used to identify the legal
authority or authorities for rejecting transactions); and
[[Page 29061]]
(7) A copy of any related payment or transfer instructions, check,
letter of credit, accompanying bill of lading, invoice, or any other
relevant documentation received in connection with the transaction.
(c) When reports are due. Reports shall be filed within 10 business
days of the rejected transaction prohibited by the provisions of this
chapter.
(d) Where to report. Reports under this section shall be submitted
to OFAC using one of the following methods: Email:
[email protected]; U.S. mail: Office of Foreign Assets Control,
Sanctions Compliance and Evaluation Division, U.S. Department of the
Treasury, 1500 Pennsylvania Avenue, NW, Freedman's Bank Building,
Washington, DC 20220; or any other official reporting option, including
electronic, as specified by OFAC on its website (http://www.treasury.gov/ofac). OFAC strongly prefers to receive reports made
pursuant to this section by email or any other official electronic
reporting option, as specified by OFAC on its website.
(e) Rules governing availability of information. OFAC records are
made available to the public in accordance with the Freedom of
Information Act (FOIA) (5 U.S.C. 552) and the provisions of 31 CFR part
1. See 31 CFR 1.5 for provisions pertaining to business information.
Reports on rejected transactions and the information required to be
reported to OFAC pursuant to this section are subject to the FOIA.
Information provided to OFAC pursuant to this section generally will be
released upon the receipt of a valid FOIA request, unless OFAC
determines that such information should be withheld in accordance with
an applicable FOIA exemption.
Subpart D--Trading With the Enemy Act (TWEA) Penalties
0
5. Amend Sec. 501.701 by revising paragraph (a)(1) to read as follows:
Sec. 501.701 Penalties.
(a) * * *
(1) Persons who willfully violate any provision of TWEA or any
license, rule, or regulation issued thereunder, and persons who
willfully violate, neglect, or refuse to comply with any order of the
President issued in compliance with the provisions of TWEA shall, upon
conviction, be fined not more than $1,000,000 or, if an individual, be
imprisoned for not more than 20 years, or both.
* * * * *
Subpart E--Procedures
0
6. Revise Sec. 501.801 to read as follows:
Sec. 501.801 Licensing.
(a) General licenses. General licenses may be issued authorizing,
under appropriate terms and conditions, certain types of transactions
that are subject to the prohibitions contained in this chapter. General
licenses also may be issued authorizing, under appropriate terms and
conditions, certain types of transactions that are subject to
prohibitions contained in economic sanctions programs the
implementation and administration of which have been delegated to the
Director of the Office of Foreign Assets Control (OFAC) but which are
not yet codified in this chapter. General licenses are set forth in
subpart E of each part contained in this chapter or made available on
OFAC's website: https://www.treasury.gov/resourcecenter/sanctions/Programs/Pages/Programs.aspx. It is the policy of OFAC not to grant
applications for specific licenses authorizing transactions to which
the provisions of a general license are applicable. Persons availing
themselves of certain general licenses may be required to file reports
and statements in accordance with the instructions specified in those
licenses. Failure to file timely all required information in such
reports or statements may nullify the authorization otherwise provided
by the general license and result in apparent violations of the
applicable prohibitions that may be subject to OFAC enforcement action.
(b) Specific licenses--(1) General course of procedure.
Transactions subject to the prohibitions contained in this chapter, or
to prohibitions the implementation and administration of which have
been otherwise delegated to the OFAC Director, that are not authorized
by general license may be effected only under specific license.
(2) Applications for specific licenses. Applications for specific
licenses to engage in any transactions prohibited by or pursuant to
this chapter, or sanctions programs that have been otherwise delegated
to the OFAC Director for implementation and administration, must be
signed, either manually or electronically, and filed through OFAC's
Reporting and License Application Forms page (https://licensing.ofac.treas.gov/) or, if that option is unavailable, by mail,
addressed to the Office of Foreign Assets Control, Licensing Division,
U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW,
Freedman's Bank Building, Washington, DC 20220. Applications for the
unblocking of funds may be submitted via OFAC's Reporting and License
Application Forms page (https://licensing.ofac.treas.gov/) or, if that
option is unavailable, by using Form TD-F 90-22.54, ``Application for
the Release of Blocked Funds,'' or via a submission that otherwise
contains all of the information provided for in Form TD-F 90-22.54.
Form TD-F 90-22.54 may be obtained from OFAC's Reporting and License
Application Forms page, or by mail at the address above.
(i) Additional conditions. Applicants should submit only one copy
of a specific license application to OFAC; submitting multiple copies
may result in processing delays. Any person having an interest in a
transaction or proposed transaction may file an application for a
specific license authorizing such a transaction.
(ii) Information to be supplied. The applicant must supply all
information specified by relevant instructions (available on OFAC's
Reporting and License Application Forms page at https://licensing.ofac.treas.gov) and/or forms, and must fully disclose the
names of all parties who are concerned with or interested in the
proposed transaction. If the application is filed by an agent, the
agent must disclose the name of his or her principal(s). Such documents
as may be relevant shall be attached to each application as a part of
such application, whether filed electronically or by mail, except that
documents previously filed with OFAC may, where appropriate, be
incorporated by reference in such application. Applicants may be
required to furnish such further information as is deemed necessary to
assist OFAC in making a determination. Any applicant or other party in
interest desiring to present additional information may do so at any
time before or after OFAC makes its decision with respect to the
application. In unique circumstances, OFAC may determine that an oral
presentation regarding a license application would assist in OFAC's
review of the issues involved. Any requests to make such an oral
presentation must be submitted in writing to the attention of the
Director, but are rarely granted.
(3) Issuance of specific license. Specific licenses normally will
be issued by OFAC. Specific licenses also may be issued by the
Secretary of the Treasury acting directly or through any specifically
designated person, agency, or instrumentality.
(4) Reports under specific licenses. As a condition for the
issuance of any specific license, the licensee may be
[[Page 29062]]
required to file reports with respect to the transactions authorized by
the specific license in such form and at such times and places as may
be prescribed in the license or otherwise. Reports should be sent in
accordance with the instructions provided in the applicable specific
license.
(5) Effect of denial. The denial of a specific license does not
preclude the reconsideration of an application or the filing of a
further application. The applicant or any other party in interest may
at any time request, by written correspondence, reconsideration of the
denial of an application on the basis of new facts or changed
circumstances.
(6) Rules governing availability of information. OFAC records are
made available to the public in accordance with the Freedom of
Information Act (FOIA) (5 U.S.C. 552) and the provisions of 31 CFR part
1. See 31 CFR 1.5 for provisions pertaining to business information.
License applications submitted to OFAC and specific licenses issued by
OFAC are subject to the FOIA and generally will be released upon the
receipt of a valid FOIA request, unless OFAC determines that such
information should be withheld in accordance with an applicable FOIA
exemption.
Note 1 to paragraph (b)(6): OFAC views information submitted in
furtherance of an application for a specific license pursuant to
this paragraph (b) to be required information for purposes of
Exemption 4 of the FOIA.
0
7. Amend Sec. 501.806 by revising paragraph (b) to read as follows:
Sec. 501.806 Procedures for unblocking funds believed to have been
blocked due to mistaken identity.
* * * * *
(b) Requests to release funds which a party believes to have been
blocked due to mistaken identity must be made in writing and addressed
to the Office of Foreign Assets Control, Sanctions Compliance &
Evaluation Division, U.S. Department of the Treasury, 1500 Pennsylvania
Avenue NW, Freedman's Bank Building, Washington, DC 20220, or sent by
email to the Sanctions Compliance & Evaluation Division at
[email protected].
* * * * *
Dated: June 17, 2019.
Andrea Gacki,
Director, Office of Foreign Assets Control.
[FR Doc. 2019-13163 Filed 6-20-19; 8:45 am]
BILLING CODE 4810-AL-P