[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]
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