[Federal Register Volume 84, Number 125 (Friday, June 28, 2019)]
[Rules and Regulations]
[Pages 30868-30870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13652]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 510


Technical Amendments to North Korea Sanctions Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

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SUMMARY: The Department of the Treasury's Office of Foreign Assets 
Control (OFAC) is amending the North Korea Sanctions Regulations to 
update references to descriptive text that appears in certain entries 
on OFAC's Specially Designated Nationals and Blocked Persons List (SDN 
List) and the List of Foreign Financial Institutions Subject to 
Correspondent Account or Payable-Through Account Sanctions (CAPTA 
List).

DATES: Effective: June 28, 2019.

FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for 
Licensing, tel.: 202-622-2480; Assistant Director for Regulatory 
Affairs, tel.: 202-622-4855; or Assistant Director for Sanctions 
Compliance & Evaluation, tel.: 202-622-2490.

SUPPLEMENTARY INFORMATION: 

Electronic Availability

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

Background

    On March 5, 2018, OFAC amended and reissued in their entirety the 
North Korea Sanctions Regulations, 31 CFR part 510 (the 
``Regulations'') (83 FR 9182, March 5, 2018). Since that time, for 
clarity, OFAC has made two technical changes to certain text that 
appears on OFAC's website and that is referenced in the Regulations. 
This rule conforms the corresponding references in the Regulations to 
accurately reflect the amended website text.
    First, this rule updates references to descriptive text that 
appears in certain entries on OFAC's Specially Designated Nationals and 
Blocked Persons List (SDN List). This descriptive text provides 
additional information concerning secondary sanctions related to 
Executive Order 13810 of September 20, 2017 (``Imposing Additional 
Sanctions With Respect to North Korea'') (82 FR 44705, September 25, 
2017) (E.O. 13810). Section 4 of E.O. 13810 authorizes the Secretary of 
the Treasury, in consultation with the Secretary of State, to impose 
certain sanctions (often referred to as secondary sanctions) on any 
foreign financial institution determined by the Secretary of the 
Treasury, in consultation with the Secretary of State, to meet certain 
specified criteria. With respect to a foreign financial institution 
determined to meet any of the relevant criteria, the Secretary of the 
Treasury, in consultation with the Secretary of State, may: (i) 
Prohibit the opening and prohibit or impose strict conditions on the 
maintenance of correspondent accounts or payable-through accounts in 
the United States with respect to such foreign financial institution; 
or (ii) block all property and interests in property that are in the 
United States, that come within the United States, or that are or come 
within the possession or control of any U.S. person of such foreign 
financial institution. These prohibitions are implemented in Sec. Sec.  
510.210 and 510.201(a)(3)(vi) of the Regulations, respectively.
    Sections 510.201(a)(3)(vi)(A)(1) and 510.210(b)(1) provide that the 
Secretary of the Treasury, in consultation with the Secretary of State, 
may impose such sanctions on any foreign financial institution 
determined by the Secretary of the Treasury, in consultation with the 
Secretary of State, to have, on or after September 21, 2017, knowingly 
conducted or facilitated any significant transaction on behalf of (1) 
any person whose property and interests in property are blocked 
pursuant to Executive Order 13551 (``Blocking Property of Certain 
Persons With Respect to North Korea'') (75 FR 53837, September 1, 2010) 
(E.O. 13551), Executive Order 13687 (``Imposing Additional Sanctions 
With Respect to North Korea'') (80 FR 819, January 6, 2015) (E.O. 
13687), Executive Order 13722 (``Blocking Property of the Government of 
North Korea and the Workers' Party of Korea, and Prohibiting Certain 
Transactions With Respect to North Korea'') (81 FR 14943, March 18, 
2016) (E.O. 13722), or E.O. 13810, or (2) any person whose property and 
interests in property are blocked pursuant to Executive Order 13382 
(``Blocking Property of Weapons of Mass Destruction Proliferators and 
Their Supporters'') (70 FR 38567, July 1, 2005) (E.O. 13382) in 
connection with North Korea-related activities. Note 3 to paragraph (a) 
of Sec.  510.201 and Note 1 to paragraph (b) of Sec.  510.210 explain 
that the names of persons listed in or designated or identified 
pursuant to E.O. 13382 in connection with North Korea-related 
activities are published in the Federal Register and incorporated into 
OFAC's SDN List with the

[[Page 30869]]

identifier ``[NPWMD]'' and descriptive text ``Executive Order 13810 
Information: Subject to blocking in connection with North Korea-related 
activities.''
    Since the publication of the Regulations, however, OFAC has revised 
this descriptive text and included it in each SDN List entry that meets 
the criteria contained in sections 510.201(a)(3)(vi)(A)(1) and 
510.210(b)(1) in order to more clearly alert foreign financial 
institutions to attendant secondary sanctions risks. The revised 
descriptive text is ``Secondary sanctions risk: North Korea Sanctions 
Regulations, Sec. Sec.  510.201 and 510.210.'' On October 4, 2018, by 
separate action, OFAC incorporated this new descriptive text in the 
relevant entries on the SDN List of 371 persons whose property and 
interests in property are blocked pursuant to E.O.s 13551, 13687, 
13722, or 13810 and 91 persons whose property and interests in property 
are blocked pursuant to E.O. 13382.
    This rule amends the Regulations to conform corresponding 
references in the two specified notes to the new descriptive text 
language. This rule also corrects an incorrect regulatory citation in 
Note 3 to paragraph (a) of Sec.  510.201.
    Second, this rule updates references to the name of one of OFAC's 
sanctions lists. As noted above, Sec.  510.210 of the Regulations 
provides for the imposition of strict conditions or prohibitions on the 
opening or maintaining of correspondent accounts or payable-through 
accounts in the United States for a foreign financial institution that 
the Secretary of the Treasury, in consultation with the Secretary of 
State, determines knowingly engaged in specified activities. When the 
Regulations were reissued on March 5, 2018, Note 2 to Sec.  510.210 
explained that the names of foreign financial institutions for which 
the opening or maintaining of a correspondent account or a payable-
through account in the United States is prohibited or for which the 
maintenance of a correspondent account or payable-through account is 
subject to one or more strict conditions will be, among other things, 
added to the ``Correspondent Account or Payable-Through Account 
Sanctions (CAPTA) List'' on OFAC's website (www.treasury.gov/ofac). 
Section 510.519, which authorizes U.S. financial institutions to engage 
in certain limited transactions related to closing correspondent 
accounts for foreign financial institutions on the CAPTA List, also 
contains a full reference to the ``Correspondent Account or Payable-
Through Account Sanctions (CAPTA) List.''
    Since March 5, 2018, however, for additional consistency and 
clarity, OFAC has revised the name of the Correspondent Account or 
Payable-Through Account Sanctions (CAPTA) List as follows: ``List of 
Foreign Financial Institutions Subject to Correspondent Account or 
Payable-Through Account Sanctions (CAPTA List).'' This rule amends the 
Regulations to update the two specified references to the CAPTA List to 
correspond to the revised name.

Public Participation

    Because the amendment of the Regulations 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.

Paperwork Reduction Act

    The collections of information related to the Regulations are 
contained in 31 CFR part 501 (the ``Reporting, Procedures and Penalties 
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507), those collections of information have been approved by 
the Office of Management and Budget under control number 1505-0164. An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless the collection of 
information displays a valid control number.

List of Subjects in 31 CFR Part 510

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

    For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control amends 31 CFR part 510 
follows:

PART 510--NORTH KOREA SANCTIONS REGULATIONS

0
1. The authority citation for part 510 continues to read as follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; 22 U.S.C. 287c; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 
2461 note); Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); 
Pub. L. 114-122, 130 Stat. 93 (22 U.S.C. 9201-9255); Pub. L. 115-44, 
131 Stat 886 (22 U.S.C. 9201 note); E.O. 13466, 73 FR 36787, June 
27, 2008, 3 CFR, 2008 Comp., p. 195; E.O. 13551, 75 FR 53837, 
September 1, 2010; E.O. 13570, 76 FR 22291, April 20, 2011; E.O. 
13687, 80 FR 819, January 6, 2015; E.O. 13722, 81 FR 14943, March 
18, 2016; E.O. 13810, 82 FR 44705, September 25, 2017.

Subpart B--Prohibitions

0
2. In Sec.  510.201, revise Note 3 to paragraph (a) to read as follows:


Sec.  510.201  Prohibited transactions involving blocked property.

* * * * *

    Note 3 to paragraph (a):  The names of persons listed in or 
designated or identified pursuant to Executive Order 13551, 
Executive Order 13687, Executive Order 13722, or Executive Order 
13810 and whose property and interests in property are blocked 
pursuant to those orders and who are referenced in paragraph (a) of 
this section are published in the Federal Register and incorporated 
into OFAC's Specially Designated Nationals and Blocked Persons List 
(SDN List) with the identifier ``DPRK.'' Those persons are 
referenced in paragraph (a)(3)(vi)(A)(1) of this section, which 
related to secondary sanctions, and therefore their entries on the 
SDN List will also include the descriptive text ``Secondary 
sanctions risk: North Korea Sanctions Regulations sections 510.201 
and 510.210.'' Paragraph (a)(3)(vi)(A)(1) of this section also 
references persons listed in or designated or identified pursuant to 
Executive Order 13382 whose property and interests in property are 
blocked pursuant to Executive Order 13382 in connection with North 
Korea-related activities. Accordingly, the names of such persons, 
which are published in the Federal Register and incorporated into 
OFAC's SDN List with the identifier ``[NPWMD],'' also will include 
the descriptive text ``Secondary sanctions risk: North Korea 
Sanctions Regulations sections 510.201 and 510.210.'' The SDN List 
is accessible through the following page on OFAC's website: 
www.treasury.gov/sdn. Additional information pertaining to the SDN 
List can be found in appendix A to this chapter. See Sec.  510.411 
concerning entities that may not be listed on the SDN List but whose 
property and interests in property are nevertheless blocked pursuant 
to paragraph (a) of this section. The property and interests in 
property of persons who meet the definition of the term Government 
of North Korea, as defined in Sec.  510.311, are blocked pursuant to 
paragraph (a) of this section regardless of whether the names of 
such persons are published in the Federal Register or incorporated 
into the SDN List.

* * * * *

[[Page 30870]]


0
3. In Sec.  510.210, revise Note 1 to paragraph (b) and Note 2 to Sec.  
510.210 to read as follows:


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

* * * * *

    Note 1 to paragraph (b):  The names of persons listed in or 
designated or identified pursuant to Executive Order 13551, 
Executive Order 13687, Executive Order 13722, or Executive Order 
13810 and whose property and interests in property are blocked 
pursuant to those orders and paragraph (a) of this section are 
published in the Federal Register and incorporated into OFAC's 
Specially Designated Nationals and Blocked Persons List (SDN List) 
with the identifier ``DPRK.'' Those persons are referenced in 
paragraph (b)(1) of this section, which relates to secondary 
sanctions, and therefore their entries on the SDN List will include 
the descriptive text ``Secondary sanctions risk: North Korea 
Sanctions Regulations, sections 510.201 and 510.210.'' Paragraph 
(b)(1) of this section also references persons listed in or 
designated or identified pursuant to Executive Order 13382 whose 
property and interests in property are blocked pursuant to Executive 
Order 13382 in connection with North Korea-related activities. 
Accordingly, the names of such persons, which are published in the 
Federal Register and incorporated into OFAC's SDN List with the 
identifier ``[NPWMD],'' also will include the descriptive text 
``Secondary sanctions risk: North Korea Sanctions Regulations, 
sections 510.201 and 510.210.'' The SDN List is accessible through 
the following page on OFAC's website: www.treasury.gov/sdn. 
Additional information pertaining to the SDN List can be found in 
appendix A to this chapter. See Sec.  510.411 concerning entities 
that may not be listed on the SDN List but whose property and 
interests in property are nevertheless blocked pursuant to paragraph 
(a) of this section. The property and interests in property of 
persons who meet the definition of the term Government of North 
Korea, as defined in Sec.  510.311, are blocked pursuant to 
paragraph (a) of this section regardless of whether the names of 
such persons are published in the Federal Register or incorporated 
into the SDN List.

* * * * *

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

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


Sec.  510.519  [Amended]

0
4. In Sec.  510.519(a), remove ``Correspondent Account or Payable-
Through Account Sanctions (CAPTA) List'' and add in its place ``List of 
Foreign Financial Institutions Subject to Correspondent Account or 
Payable-Through Account Sanctions (CAPTA List)''.

    Dated: June 21, 2019.
Andrea Gacki,
Director, Office of Foreign Assets Control.
[FR Doc. 2019-13652 Filed 6-26-19; 8:45 am]
 BILLING CODE 4810-AL-P