[Federal Register Volume 86, Number 93 (Monday, May 17, 2021)]
[Rules and Regulations]
[Pages 26661-26671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10314]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Parts 536 and 598
Narcotics Trafficking Sanctions Regulations and Foreign Narcotics
Kingpin 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 Narcotics Trafficking Sanctions
Regulations and the Foreign Narcotics Kingpin Sanctions Regulations to
add or amend general licenses with respect to payments for legal
services, certain transactions for personal maintenance, certain
transactions for maintenance of blocked tangible property, and
emergency medical services. In addition, OFAC is amending certain
prohibitions, definitions, and interpretive sections contained in these
sets of regulations. OFAC is also updating certain regulatory
provisions and making other technical and conforming edits.
DATES: This rule is effective May 17, 2021.
FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for
Licensing, 202-622-2480; Assistant Director for Regulatory Affairs,
202-622-4855; or Assistant Director for Sanctions Compliance &
Evaluation, 202-622-2490.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document and additional information concerning OFAC are
available on OFAC's website (www.treasury.gov/ofac).
Background
OFAC administers two sanctions programs with respect to narcotics
trafficking. The Narcotics Trafficking Sanctions Regulations, 31 CFR
part 536 (NTSR), implement Executive Order (E.O.) 12978 of October 21,
1995, ``Blocking Assets and Prohibiting Transactions With Significant
Narcotics Traffickers'' (60 FR 54579, October 24, 1995), as amended by
E.O. 13286 of February 28, 2003, ``Amendment of Executive Orders, and
Other Actions, in Connection With the Transfer of Certain Functions to
the Secretary of Homeland Security'' (68 FR 10619, March 3, 2003), in
which the President declared a national emergency, and imposed
sanctions, with respect to ``the actions
[[Page 26662]]
of significant foreign narcotics traffickers centered in Colombia, and
the unparalleled violence, corruption, and harm that they cause in the
United States and abroad.''
The Foreign Narcotics Kingpin Sanctions Regulations, 31 CFR part
598 (FNKSR), implement the Foreign Narcotics Kingpin Designation Act
(21 U.S.C. 1901-1908), which provides authority for the application of
sanctions to significant foreign narcotics traffickers and their
organizations operating worldwide.
Current Regulatory Action
OFAC is adopting this final rule amending the NTSR and the FNKSR
with respect to general licenses for payments for legal services,
certain transactions for personal maintenance, certain transactions for
maintenance of blocked tangible property, and emergency medical
services, as set forth in more detail below. OFAC is also amending
certain prohibitions, definitions, and interpretive sections, updating
certain regulatory provisions, and making other technical and
conforming edits, as also described below.
Payments for legal services. Section 536.506 of the NTSR and Sec.
598.507 of the FNKSR authorize U.S. persons to provide certain legal
services to or on behalf of a specially designated narcotics trafficker
(SDNT), as defined in Sec. 536.312 and Sec. 598.314, respectively,
provided that any payment of professional fees and reimbursement of
incurred expenses must be specifically licensed. OFAC is amending the
NTSR and the FNKSR to authorize certain permissible payment mechanisms
for legal services without the need for a specific license. With these
amendments, OFAC incorporates two mechanisms for payment for legal
services. As set forth in the regulations, these new mechanisms for the
payment of legal services are subject to additional reporting and
recordkeeping requirements and other conditions and limitations.
First, new Sec. 536.507 of the NTSR and new Sec. 598.508 of the
FNKSR now authorize payments from funds originating outside the United
States and that do not come from a U.S. person or any person whose
property and interests in property are blocked, other than the person
to whom or on whose behalf the authorized legal services are provided.
Second, new Sec. 536.508 of the NTSR and new Sec. 598.509 of the
FNKSR now authorize payment of professional fees and reimbursement of
incurred expenses from public funds in connection with authorized legal
services rendered on behalf of blocked persons.
Certain transactions for personal maintenance. OFAC also is adding
general licenses in new Sec. 536.509 of the NTSR and new Sec. 598.510
of the FNKSR, authorizing SDNTs who are in U.S. custody or incarcerated
in the United States to engage in certain personal maintenance
transactions. Specifically, these new general licenses authorize SDNTs
in U.S. custody or incarcerated in the United States to engage in
certain transactions for their maintenance and the maintenance of their
spouse or persons who are sharing or who would ordinarily share a
common dwelling as a family with them, including receiving goods and
services, engaging in employment, and establishing accounts at U.S.
financial institutions. These new general licenses are subject to
additional reporting and recordkeeping requirements and other
conditions and limitations set forth in those sections.
Certain transactions for maintenance of tangible blocked property.
OFAC is adding general licenses at new Sec. 536.510 of the NTSR and
new Sec. 598.511 of the FNKSR, authorizing SDNTs to make payment for,
and receive goods and services for the maintenance of, tangible
property blocked pursuant to Sec. 536.201 of the NTSR and Sec.
598.202(a) of the FNKSR, consistent with Sec. Sec. 536.206 of the NTSR
and 598.207 of the FNKSR. These new general licenses are subject to
additional reporting and recordkeeping requirements and other
conditions and limitations set forth in those sections.
Emergency medical services. OFAC is amending the general license in
Sec. 536.511 of the NTSR to expand the existing authorization and
adding a general license in new Sec. 598.512 of the FNKSR, each
authorizing the provision and receipt of nonscheduled emergency medical
services. Revised Sec. 536.511 of the NTSR no longer requires that
payment for such services be specifically licensed.
Definitions. OFAC is adding and amending several definitions. To
clarify the term narcotics trafficking as used in Sec. Sec. 536.311
and 598.310, OFAC is adding, in new Sec. 536.318 of the NTSR and new
Sec. 598.320 of the FNKSR, a definition of the term finance. OFAC is
also adding, in Sec. 536.319, definitions of the terms narcotic drug,
controlled substance, and listed chemical.
OFAC also is amending the definition of foreign person in Sec.
536.304 of the NTSR and Sec. 598.305 of the FNKSR to add the qualifier
``wherever located'' to clarify that the term includes foreign and dual
nationals regardless of their location. OFAC is amending the definition
of specially designated narcotics trafficker in Sec. 536.312 of the
NTSR and Sec. 598.314 of the FNKSR to clarify that these terms include
entities directly or indirectly owned 50 percent or more by one or more
specially designated narcotics traffickers, whether individually or in
the aggregate, as well as updating the definition of the terms blocked
account and blocked property in Sec. 536.301 of the NTSR and Sec.
598.301 of the FNKSR, to add a note referencing the definition of
specially designated narcotics trafficker. OFAC is adding, in new Sec.
536.319 of the NTSR and new Sec. 598.321 of the FNKSR, a definition of
the term OFAC to mean the Department of the Treasury's Office of
Foreign Assets Control.
Prohibited transactions and interpretive sections. OFAC is updating
the regulatory provisions with respect to prohibited transactions
involving blocked property in Sec. 536.201 of the NTSR. OFAC is
similarly updating the FNKSR by consolidating two existing sections
into revised Sec. 598.202 and removing and reserving Sec. 598.203. In
Sec. 536.204 and Sec. 598.204, OFAC is clarifying the terms evasions,
attempts, and conspiracies in the NTSR and the FNKSR to be consistent
with the definitions of these terms in other OFAC sanctions
regulations. In new Sec. 536.410 of the NTSR and new Sec. 598.411 of
the FNKSR, OFAC is clarifying that these prohibitions include 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, and the receipt of any contribution or
provision of funds, goods, or services from any such person. Pursuant
to the International Emergency Economic Powers Act (50 U.S.C. 1701 et
seq.) (IEEPA), the NTSR include an exception to this prohibition for
donations of articles, such as food, clothing, and medicine, intended
to be used to relieve human suffering, because E.O. 12978, as amended,
does not include a presidential determination to the contrary.
Updated delegation of authority by the Secretary of the Treasury.
This rule also updates the delegation of authority in Sec. 598.803 of
the FNKSR to add the Presidential Memorandum of May 15, 2015:
Delegation of Functions Under the Foreign Narcotics Kingpin Designation
Act and the Presidential Memorandum of May 31, 2013: Delegation of
Functions Under Subsection 804(h)(2)(A) of the Foreign Narcotics
Kingpin Designation Act.
Other technical and conforming changes. OFAC is updating certain
[[Page 26663]]
regulatory provisions and making other technical and conforming
changes. OFAC is updating and conforming the language in Sec. 536.203
of the NTSR and Sec. 598.206 of the FNKSR related to the holding of
funds in interest-bearing accounts and investment and reinvestment. In
new Sec. 536.206 of the NTSR and new Sec. 598.207 of the FNKSR, OFAC
is adding a standard provision relating to expenses of maintaining
blocked tangible property and liquidation of blocked property. OFAC is
updating and combining the definitions of the terms general license,
license, and specific license in Sec. Sec. 536.305, 536.308, and
536.313 of the NTSR and Sec. Sec. 598.306, 598.308, and 598.315 of the
FNKSR, as well as adding Sec. 536.300 to the NTSR and Sec. 598.300 to
the FNKSR to clarify that the definitions described in Subpart C of
each part apply to the entire part. OFAC is updating the language of
and making conforming edits to Sec. Sec. 598.404, 598.407, and 598.409
of the FNKSR to reference Sec. 598.202 instead of Sec. 598.203. OFAC
is also updating the language of Sec. 536.406 in the NTSR and Sec.
598.406 in the FNKSR, including adding a note referencing the emergency
medical services authorization. In Sec. 536.506 of the NTSR and Sec.
598.507 of the FNKSR, OFAC is updating regulatory provisions relating
to the provision of legal services. Finally, OFAC is updating the
authorities citation of the NTSR.
Public Participation
Because the NFSR and the FNKSR involve a foreign affairs function,
the provisions of E.O. 12866 of September 30, 1993, ``Regulatory
Planning and Review'' (58 FR 51735, October 4, 1993), and the
Administrative Procedure Act (5 U.S.C. 553) requiring notice of
proposed rulemaking, opportunity for public participation, and delay in
effective date 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 NTSR and the FNKSR
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
31 CFR Part 536
Administrative practice and procedure, Banks, Banking, Blocking of
assets, Credit, Currency, Drug traffic control, Foreign investments in
U.S., Narcotics trafficking, Foreign trade, Penalties, Reporting and
recordkeeping requirements, Sanctions, Securities, Specially designated
narcotics traffickers, Transfer of assets.
31 CFR Part 598
Administrative practice and procedure, Banks, Banking, Blocking of
assets, Credit, Currency, Drug traffic control, Foreign investments in
U.S., Narcotics trafficking, Foreign trade, Penalties, Reporting and
recordkeeping requirements, Sanctions, Securities, Significant foreign
narcotics traffickers, Specially designated narcotics traffickers,
Transfer of assets.
For the reasons set forth in the preamble, the Department of the
Treasury's Office of Foreign Assets Control amends 31 CFR parts 536 and
598 as follows:
PART 536--NARCOTICS TRAFFICKING SANCTIONS REGULATIONS
0
1. The authority citation for part 536 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; Pub. L. 101-410, 104 Stat. 890, as amended (28 U.S.C.
2461 note); E.O. 12978, 60 FR 54579, 3 CFR, 1995 Comp., p. 415; E.O.
13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 166.
Subpart B--Prohibitions
0
2. Revise Sec. 536.201 to read as follows:
Sec. 536.201 Prohibited transactions.
(a) 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 a specially designated
narcotics trafficker are blocked and may not be transferred, paid,
exported, withdrawn, or otherwise dealt in.
(b) The prohibitions in paragraph (a) of this section include
prohibitions on the following transactions:
(1) The making of any contribution or provision of funds, goods, or
services by, to, or for the benefit of any person whose property and
interests in property are blocked pursuant to paragraph (a) of this
section, other than donations of articles, such as food, clothing, and
medicine, intended to be used to relieve human suffering; and
(2) The receipt of any contribution or provision of funds, goods,
or services from any person whose property and interests in property
are blocked pursuant to paragraph (a) of this section.
(c) Unless authorized by this part or by a specific license
expressly referring to this part, any dealing in securities (or
evidence thereof) held within the possession or control of a U.S.
person and either registered or inscribed in the name of, or known to
be held for the benefit of, or issued by, a specially designated
narcotics trafficker is prohibited. This prohibition includes the
transfer (including the transfer on the books of any issuer or agent
thereof), disposition, transportation, importation, exportation, or
withdrawal of, or the endorsement or guaranty of signatures on, any
securities on or after the effective date. This prohibition applies
irrespective of the fact that at any time (whether prior to, on, or
subsequent to the effective date) the registered or inscribed owner of
any such securities may have or might appear to have assigned,
transferred, or otherwise disposed of the securities.
(d) The prohibitions in paragraph (a) of this section apply except
to the extent provided by regulations, orders, directives, or licenses
that may be issued pursuant to this part, and notwithstanding any
contract entered into or any license or permit granted prior to the
effective date.
Note 1 to Sec. 536.201: See Sec. 536.312 and the notes to that
section for the definition and information about the public listing
of specially designated narcotics traffickers and OFAC's Specially
Designated Nationals and Blocked Persons List (SDN List). See Sec.
536.312(d) 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. 536.201: 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.
0
3. Revise Sec. 536.203 to read as follows:
Sec. 536.203 Holding of funds in interest-bearing accounts;
investment and reinvestment.
(a) Except as provided in paragraphs (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. 536.201 shall hold or place such funds in
a blocked interest-bearing account located in the United States.
[[Page 26664]]
(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. 536.201 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 paragraphs
(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. 536.201 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 a specially designated narcotics trafficker, nor may their
holder cooperate in or facilitate the pledging or other attempted use
as collateral of blocked funds or other assets.
0
4. Revise Sec. 536.204 to read as follows:
Sec. 536.204 Evasions; attempts; conspiracies.
(a) Any transaction on or after the effective date that has the
purpose of evading or avoiding, causes a violation of, or attempts to
violate any of the prohibitions set forth in this part is prohibited.
(b) Any conspiracy formed to violate the prohibitions set forth in
this part is prohibited.
0
5. Add Sec. 536.206 to subpart B to read as follows:
Sec. 536.206 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. 536.201
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. 536.201 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.
Subpart C--General Definitions
0
6. Add Sec. 536.300 to subpart C to read as follows:
Sec. 536.300 Applicability of definitions.
The definitions in this subpart apply throughout the entire part.
0
7. Revise Sec. 536.301 to read as follows:
Sec. 536.301 Blocked account; blocked property.
The terms blocked account and blocked property mean any account or
property subject to the prohibitions in Sec. 536.201 held in the name
of a specially designated narcotics trafficker, or in which such person
has an interest, and with respect to which payments, transfers,
exportations, withdrawals, or other dealings may not be made or
effected except pursuant to a license or other authorization from OFAC
expressly authorizing such action.
Note 1 to Sec. 536.301: See Sec. 536.312 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 specially designated
narcotics traffickers.
0
8. Revise Sec. 536.304 to read as follows:
Sec. 536.304 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), wherever located, 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. 536.305 [Removed and Reserved]
0
9. Remove and reserve Sec. 536.305.
0
10. Revise Sec. 536.308 to read as follows:
Sec. 536.308 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. 536.308: See Sec. 501.801 of this chapter on
licensing procedures.
0
11. Revise Sec. 536.312 to read as follows:
Sec. 536.312 Specially designated narcotics trafficker.
The term specially designated narcotics trafficker means:
(a) Persons listed in the Annex to Executive Order 12978 of October
24, 1995, as amended;
(b) Foreign persons designated by the Secretary of the Treasury, in
consultation with the Attorney General, Secretary of Homeland Security,
and the Secretary of State, because they are found:
(1) To play a significant role in international narcotics
trafficking centered in Colombia; or
(2) Materially to assist in, or provide financial or technological
support for or goods or services in support of, the narcotics
trafficking activities of specially designated narcotics traffickers;
(c) Persons determined by the Secretary of the Treasury, in
consultation with the Attorney General, Secretary of Homeland Security,
and the Secretary of State, to be owned or controlled by, or to act for
or on behalf of, any other specially designated narcotics trafficker;
and
(d) Entities owned in the aggregate, directly or indirectly, 50
percent or
[[Page 26665]]
more by one or more specially designated narcotics traffickers.
Note 1 to Sec. 536.312: The names of persons determined to fall
within paragraph (a), (b), or (c) of this section, whose property
and interests in property therefore are blocked pursuant to Sec.
536.201, are published in the Federal Register and incorporated into
OFAC's Specially Designated Nationals and Blocked Persons List (SDN
List) with the identifier ``[SDNT].'' 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. Entities that fall within paragraph (d)
of this section are also persons whose property and interests in
property are blocked pursuant to this part, whether or not they are
identified by OFAC or appear on the SDN List.
Note 2 to Sec. 536.312: The International Emergency Economic
Powers Act (50 U.S.C. 1701-1706), in Section 203 (50 U.S.C. 1702),
authorizes the blocking of the 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 Sec. 536.201 also are published in the
Federal Register and incorporated into the SDN List with the
identifier ``[BPI-SDNT].''
Note 3 to Sec. 536.312: 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, or administrative reconsideration of their
status as persons whose property and interests in property are
blocked pursuant to this part.
Sec. 536.313 [Removed and Reserved]
0
12. Remove and reserve Sec. 536.313.
0
13. Add Sec. 536.318 to subpart C to read as follows:
Sec. 536.318 Finance.
The term finance includes engaging in any transaction involving
funds, other assets, property, or interest in property, that are
derived, obtained, or retained from, directly or indirectly, narcotic
drugs, controlled substances, or listed chemicals. This includes the
transporting, transmitting, or transferring of any such assets,
property, or interests in property that creates the appearance that the
funds, assets, or property were legitimately acquired, furthers the
illicit activity, conceals or disguises the assets, avoids reporting
requirements, or otherwise promotes the carrying on of illicit
activity, such as money laundering.
Note 1 to Sec. 536.318: The definition of finance listed above
is specific to this part and not any other parts of Chapter 31. See
Sec. 536.101.
0
14. Add Sec. 536.319 to subpart C to read as follows:
Sec. 536.319 Narcotic drug; controlled substance; listed chemical.
The terms narcotic drug, controlled substance, and listed chemical
have the meanings given those terms in section 102 of the Controlled
Substances Act (21 U.S.C. 802).
0
15. Add Sec. 536.320 to subpart C to read as follows:
Sec. 536.320 OFAC.
The term OFAC means the Department of the Treasury's Office of
Foreign Assets Control.
Subpart D--Interpretations
0
16. Revise Sec. 536.406 to read as follows:
Sec. 536.406 Provision of services.
(a) The prohibitions on transactions contained in Sec. 536.201
apply to services performed in the United States or by U.S. persons,
wherever located, including by a foreign branch of an entity located in
the United States:
(1) On behalf of or for the benefit of a specially designated
narcotics trafficker; or
(2) With respect to property interests of a specially designated
narcotics trafficker.
(b) For example, U.S. persons may not, except as authorized by or
pursuant to this part, provide legal, accounting, financial, brokering,
freight forwarding, transportation, public relations, or other services
to a specially designated narcotics trafficker.
Note 1 to Sec. 536.406: See Sec. Sec. 536.506 and 536.511 on
licensing policy with regard to the provision of certain legal and
emergency medical services.
0
17. Revise Sec. 536.407 to read as follows:
Sec. 536.407 Offshore transactions involving blocked property.
The prohibitions in Sec. 536.201 on transactions or dealings
involving blocked property, as defined in Sec. 536.301, apply to
transactions by any U.S. person in a location outside the United
States.
0
18. Revise Sec. 536.409 to read as follows:
Sec. 536.409 Credit extended and cards issued by financial
institutions to a person whose property and interests in property are
blocked.
The prohibition in Sec. 536.201 on dealing in property subject to
that section prohibits U.S. financial institutions from performing
under any existing credit agreements, including charge cards, debit
cards, or other credit facilities issued by a financial institution to
a specially designated narcotics trafficker.
0
19. Add Sec. 536.410 to subpart D to read as follows:
Sec. 536.410 Charitable contributions.
Unless specifically authorized by OFAC pursuant to this part, no
charitable contribution of funds, goods, services, or technology,
except donations of articles, such as food, clothing, and medicine,
intended to relieve human suffering, may be made by, to, or for the
benefit of, or received from, a specially designated narcotics
trafficker. For the purposes of this part, a contribution is made by,
to, or for the benefit of, or received from, a specially designated
narcotics trafficker if made by, to, or in the name of, or received
from or in the name of, such a person; if made by, to, or in the name
of, or received from or in the name of, an entity or individual acting
for or on behalf of, or owned or controlled by, such a person; or if
made in an attempt to violate, to evade, or to avoid the bar on the
provision of contributions by, to, or for the benefit of such a person,
or the receipt of contributions from such a person.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
0
20. Revise Sec. 536.506 to read as follows:
Sec. 536.506 Provision of certain legal services.
(a) The provision of the following legal services to or on behalf
of specially designated narcotics traffickers is authorized, provided
that any receipt of payment of professional fees and reimbursement of
incurred expenses must be authorized pursuant to Sec. 536.507 or
536.508, which authorize certain payments for legal services; via
specific licenses; 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
[[Page 26666]]
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 specially
designated narcotics traffickers 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 paragraph. 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. 536.405.
(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. 536.201 is prohibited unless licensed
pursuant to this part.
Note 1 to Sec. 536.506: 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
Sec. 536.507 [Redesignated as Sec. 536.511]
0
21. Redesignate Sec. 536.507 as Sec. 536.511.
0
22. Add new Sec. 536.507 to subpart E to read as follows:
Sec. 536.507 Payments for legal services from funds originating
outside the United States.
(a) Professional fees and incurred expenses. (1) Receipt of payment
of professional fees and reimbursement of incurred expenses for the
provision of legal services authorized pursuant to Sec. 536.506(a) to
or on behalf of a specially designated narcotics trafficker is
authorized from funds originating outside the United States, provided
that the funds do not originate from:
(i) A source within the United States;
(ii) Any source, wherever located, within the possession or control
of a U.S. person; or
(iii) Any individual or entity, other than the person on whose
behalf the legal services authorized pursuant to Sec. 536.506(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.
(2) Nothing in this paragraph authorizes payments for legal
services using funds in which a specially designated narcotics
trafficker, or any other person whose property and interests in
property are blocked pursuant to any other part of this chapter, or any
Executive order or statute 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.
0
23. Add Sec. 536.508 to subpart E to read as follows:
Sec. 536.508 Payment of legal fees and expenses at public expense.
U.S. persons that are attorneys, law firms, or legal services
organizations are authorized to receive payment of professional fees
and reimbursement of incurred expenses from public funds for the
provision of legal services authorized by Sec. 536.506(a).
0
24. Add Sec. 536.509 to subpart E to read as follows:
Sec. 536.509 Certain transactions for maintenance, employment, and
related banking services for blocked individuals physically located in
the United States.
(a) Individuals who are specially designated narcotics traffickers
who are in U.S. custody or incarcerated in jails, prisons, or similar
facilities in the United States (``covered individuals''), are
authorized to engage in the following transactions within the United
States:
(1) Purchasing, making payment for, and receiving goods and
services for their maintenance and the maintenance of their spouse or
persons who would ordinarily share a common dwelling as a family with
them, located in the United States, including food, clothing, housing,
medical care, education, transportation, insurance, and utilities;
(2) Obtaining or continuing employment and engaging in all
transactions ordinarily incident to such employment, including receipt
of salary and benefits;
(3) Establishing accounts with a U.S. financial institution, or a
commissary-type account with a prison, jail, or other similar facility,
located in the United States, for use in connection with the
transactions authorized in paragraph (a)(1) and (a)(2) of this section;
and
(4) Receiving and making funds transfers in furtherance of the
authorized transactions set forth in paragraphs (a)(1) through (3) of
this section from unblocked funds originating within or outside the
United States, provided that any funds received may not originate from
any individual or entity whose property or interests in property are
blocked pursuant to any part of this chapter or any Executive order or
statute, other than the covered individual or his or her spouse or
persons who would ordinarily share a common dwelling as a family with
the covered individual.
(b) Any financial institution that has established any account
pursuant to paragraph (a)(3) of this section, excluding commissary-type
accounts with prisons, jails, or other similar facilities, must provide
the name and address of the financial institution, the name of the
account holder, and the account number to OFAC within 10 business days
of the establishment of the account.
(c) This general license does not authorize any funds transfers to
any location outside the United States.
Note 1 to paragraph (c): A covered individual has an interest in
any funds remaining in a commissary-type account
[[Page 26667]]
with a prison, jail, or other similar facility established pursuant
to paragraph (a)(3) of this section after the covered individual is
released from custody or incarceration.
Note 2 to paragraph (c): In the case of individuals who are in
custody or incarcerated, funds transfers must be authorized by and
consistent with the conditions, protocols, and other requirements
established by the jail, prison, or other facility.
Note 3 to Sec. 536.509: The authorization in this section only
applies to laws and regulations administered by OFAC and should not
be interpreted to excuse compliance with other applicable laws or
regulations, including the immigration laws of the United States.
0
25. Add Sec. 536.510 to subpart E to read as follows:
Sec. 536.510 Certain transactions for the expenses of maintaining
blocked tangible property.
(a) Specially designated narcotics traffickers are authorized to
engage in the following transactions:
(1) Making payment for and receiving goods and services for the
maintenance of blocked tangible property required pursuant to Sec.
536.206; and
(2) Receiving and making funds transfers in furtherance of the
authorized transactions set forth in paragraph (a)(1) of this section
from unblocked funds originating outside the United States, provided
that any funds received may not originate from any individual or entity
whose property or interests in property are blocked pursuant to any
part of this chapter or any Executive order or statute, other than the
specially designated narcotics trafficker(s), who owns the property.
(b)(1) Any person making payment for or receiving goods and
services for the maintenance of tangible property blocked pursuant to
Sec. 536.201 and authorized by paragraph (a)(1) of this section must
file a report on the transactions with OFAC within 30 days of the first
transaction related to that property and annually thereafter. Such
reports shall include the following numbered sections and information:
(i) Estimated or actual dollar value of the transaction(s), as
determined by the value of the payment, goods, or services;
(ii) A description of the blocked property;
(iii) The parties involved;
(iv) The type and scope of transactions conducted; and
(v) The dates and duration of the transactions.
(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.
0
26. Revise newly redesignated Sec. 536.511 to read as follows:
Sec. 536.511 Emergency medical services.
The provision and receipt of nonscheduled emergency medical
services that are prohibited by this part are authorized.
PART 598--FOREIGN NARCOTICS KINGPIN SANCTIONS REGULATIONS
0
27. The authority citation for part 598 is revised to read as follows:
Authority: 3 U.S.C. 301; 21 U.S.C. 1901-1908; 31 U.S.C. 321(b);
Pub. L. 101-410, 104 Stat. 890, as amended (28 U.S.C. 2461 note).
Subpart B--Prohibitions
0
28. Revise Sec. 598.202 to read as follows:
Sec. 598.202 Prohibited transactions.
(a) 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 a specially designated
narcotics trafficker are blocked and may not be transferred, paid,
exported, withdrawn, or otherwise dealt in.
Note 1 to paragraph (a): See Sec. 598.314 and the notes to that
section for the definition and information about the public listing
of specially designated narcotics traffickers and OFAC's Specially
Designated Nationals and Blocked Persons List (SDN List). See
paragraph (c) of Sec. 598.314 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.
Note 2 to paragraph (a): Sections 501.806 and 501.807 of this
chapter describe the procedures to be followed by persons seeking,
respectively, the unblocking of funds that they believe were blocked
due to mistaken identity, and administrative reconsideration of
their status as persons whose property and interests in property are
blocked pursuant to paragraph (a) of this section.
(b) The prohibitions in paragraph (a) of this section include
prohibitions on the following transactions:
(1) The making of any contribution or provision of funds, goods, or
services by, to, or for the benefit of any person whose property and
interests in property are blocked pursuant to paragraph (a) of this
section; and
(2) The receipt of any contribution or provision of funds, goods,
or services from any person whose property and interests in property
are blocked pursuant to paragraph (a) of this section.
(c) Unless authorized by this part or by a specific license
expressly referring to this part, any dealing in securities (or
evidence thereof) held within the possession or control of a U.S.
person and either registered or inscribed in the name of, or known to
be held for the benefit of, or issued by, a specially designated
narcotics trafficker is prohibited. This prohibition includes the
transfer (including the transfer on the books of any issuer or agent
thereof), disposition, transportation, importation, exportation, or
withdrawal of, or the endorsement or guaranty of signatures on, any
securities on or after the effective date. This prohibition applies
irrespective of the fact that at any time (whether prior to, on, or
subsequent to the effective date) the registered or inscribed owner of
any such securities may have or might appear to have assigned,
transferred, or otherwise disposed of the securities.
(d) The prohibitions in paragraph (a) of this section apply except
to the extent provided by regulations, orders, directives, or licenses
that may be issued pursuant to this part, and notwithstanding any
contract entered into or any license or permit granted prior to the
effective date.
Sec. 598.203 [Removed and Reserved]
0
29. Remove and reserve Sec. 598.203.
0
30. Revise Sec. 598.204 to read as follows:
Sec. 598.204 Evasions; attempts; conspiracies.
(a) Any transaction on or after the effective date that has the
purpose of evading or avoiding, causes a violation of, or attempts to
violate any of the prohibitions set forth in this part is prohibited.
(b) Any conspiracy formed to violate the prohibitions set forth in
this part is prohibited.
0
31. Revise Sec. 598.206 to read as follows:
Sec. 598.206 Holding of funds in interest-bearing accounts;
investment and reinvestment.
(a) Except as provided in paragraphs (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. 598.202 shall hold or place such funds in
a blocked interest-bearing account located in the United States.
[[Page 26668]]
(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. 598.202 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 paragraphs
(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. 598.202 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 immediate financial or economic
benefit or access to any person whose property and interests in
property are blocked pursuant to Sec. 598.202, nor may their holder
cooperate in or facilitate the pledging or other attempted use as
collateral of blocked funds or other assets.
0
32. Add Sec. 598.207 to subpart B to read as follows:
Sec. 598.207 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. 598.202
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. 598.202 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.
Subpart C--General Definitions
0
33. Add Sec. 598.300 to subpart C to read as follows:
Sec. 598.300 Applicability of definitions.
The definitions in this subpart apply throughout the entire part.
0
34. Revise Sec. 598.301 to read as follows:
Sec. 598.301 Blocked account; blocked property.
The terms blocked account and blocked property shall mean any
account or property subject to the prohibitions in Sec. 598.202 held
in the name of a specially designated narcotics trafficker, or in which
such person has an interest, and with respect to which payments,
transfers, exportations, withdrawals, or other dealings may not be made
or effected except pursuant to a license or other authorization from
OFAC expressly authorizing such action.
Note 1 to Sec. 598.301: See Sec. 598.314 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 specially designated
narcotics traffickers.
0
35. Revise Sec. 598.305 to read as follows:
Sec. 598.305 Foreign person.
The term foreign person means any citizen or national of a foreign
state, wherever located, or any entity not organized under the laws of
the United States, but does not include a foreign state.
Sec. 598.306 [Removed and Reserved]
0
36. Remove and reserve Sec. 598.306.
0
37. Revise Sec. 598.308 to read as follows:
Sec. 598.308 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. 598.308: See Sec. 501.801 of this chapter on
licensing procedures.
0
38. Revise Sec. 598.313 to read as follows:
Sec. 598.313 Significant foreign narcotics trafficker.
The term significant foreign narcotics trafficker means any foreign
person that plays a significant role in international narcotics
trafficking that the President has determined to be appropriate for
sanctions and has publicly identified under section 804(b) or section
804(h)(1) of the Foreign Narcotics Kingpin Designation Act (21 U.S.C.
1903(b) or (h)(1)).
Note 1 to Sec. 598.313: On May 15, 2015, the functions
conferred upon the President by sections 804(b) and (h) of the
Foreign Narcotics Kingpin Designation Act (21 U.S.C. 1903(b) and
(h)), were delegated to the Secretary of the Treasury.
0
39. Revise Sec. 598.314 to read as follows:
Sec. 598.314 Specially designated narcotics trafficker.
The term specially designated narcotics trafficker means:
(a) Significant foreign narcotics traffickers; and
(b) Foreign persons designated by the Secretary of the Treasury, in
consultation with the Attorney General, the Director of Central
Intelligence, the Director of the Federal Bureau of Investigation, the
Administrator of the Drug Enforcement Administration, the Secretary of
Defense, and the Secretary of State, because they are found to be:
(1) Materially assisting in, or providing financial or
technological support for or to, or providing goods or services in
support of, the international narcotics trafficking activities of a
specially designated narcotics trafficker;
(2) Owned, controlled, or directed by, or acting for or on behalf
of, a specially designated narcotics trafficker; or
[[Page 26669]]
(3) Playing a significant role in international narcotics
trafficking; and
(c) Entities owned in the aggregate, directly or indirectly, 50
percent or more by one or more specially designated narcotics
traffickers.
Note 1 to Sec. 598.314: The names of persons determined to fall
within paragraph (a) or (b) of this definition, whose property and
interests in property therefore are blocked pursuant to this part,
are published in the Federal Register and incorporated into OFAC's
Specially Designated Nationals and Blocked Persons List (SDN List)
with the identifier ``[SDNTK].'' 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. Entities that fall within paragraph (c)
of this section are also persons whose property and interests in
property are blocked pursuant to this part, regardless of whether
they are identified by OFAC or appear on the SDN List.
Note 2 to Sec. 598.314: The Foreign Narcotics Kingpin
Designation Act (21 U.S.C. 1901-1908), in Section 806 (21 U.S.C.
1905), 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 part also are published in the
Federal Register and incorporated into the SDN List with the
identifier ``[BPI-SDNTK].''
Note 3 to Sec. 598.314: 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, or administrative reconsideration of their
status as persons whose property and interests in property are
blocked pursuant to this part.
Sec. 598.315 [Removed and Reserved]
0
40. Remove and reserve Sec. 598.315.
0
41. Add Sec. 598.320 to subpart C to read as follows:
Sec. 598.320 Finance.
The term finance includes engaging in any transaction involving
funds, other assets, property, or interest in property, that are
derived, obtained, or retained from, directly or indirectly, narcotic
drugs, controlled substances, or listed chemicals. This includes the
transporting, transmitting, or transferring of any such assets,
property, or interests in property that creates the appearance that the
funds, assets, or property were legitimately acquired, furthers the
illicit activity, conceals or disguises the assets, avoids reporting
requirements, or otherwise promotes the carrying on of illicit
activity, such as money laundering.
Note 1 to Sec. 598.320: The definition of finance listed above
is specific to this part and not any other parts of Chapter 31. See
Sec. 598.101.
0
42. Add Sec. 598.321 to subpart C to read as follows:
Sec. 598.321 OFAC.
The term OFAC means the Department of the Treasury's Office of
Foreign Assets Control.
Subpart D--Interpretations
0
43. Revise Sec. 598.404 to read as follows:
Sec. 598.404 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. 598.202 if effected after the effective date.
0
44. Revise Sec. 598.406 to read as follows:
Sec. 598.406 Provision of services.
(a) The prohibitions on transactions contained in Sec. 598.202
apply to services performed in the United States or by U.S. persons,
wherever located, including by a foreign branch of an entity located in
the United States:
(1) On behalf of or for the benefit of a specially designated
narcotics trafficker; or
(2) With respect to property interests of a specially designated
narcotics trafficker.
(b) For example, U.S. persons may not, except as authorized by or
pursuant to this part, provide legal, accounting, financial, brokering,
freight forwarding, transportation, public relations, or other services
to a specially designated narcotics trafficker.
Note 1 to Sec. 598.406: See Sec. Sec. 598.507 and 598.513 on
licensing policy with regard to the provision of certain legal and
emergency medical services.
0
45. Revise Sec. 598.407 to read as follows:
Sec. 598.407 Offshore transactions involving blocked property.
The prohibitions in Sec. 598.202 on transactions or dealings
involving blocked property, as defined in Sec. 598.301, apply to
transactions by any U.S. person in a location outside the United
States.
0
46. Revise Sec. 598.409 to read as follows:
Sec. 598.409 Credit extended and cards issued by financial
institutions to a specially designated narcotics trafficker.
The prohibition in Sec. 598.202 on dealing in property subject to
that section prohibits U.S. financial institutions from performing
under any existing credit agreements, including charge cards, debit
cards, or other credit facilities issued by a financial institution to
a specially designated narcotics trafficker.
0
47. Add Sec. 598.411 to subpart D to read as follows:
Sec. 598.411 Charitable contributions.
Unless specifically authorized by OFAC pursuant to this part, no
charitable contribution of funds, goods, services, or technology,
including contributions to relieve human suffering, such as food,
clothing, or medicine, may be made by, to, or for the benefit of, or
received from, a specially designated narcotics trafficker. For the
purposes of this part, a contribution is made by, to, or for the
benefit of, or received from, a specially designated narcotics
trafficker if made by, to, or in the name of, or received from or in
the name of, such a person; if made by, to, or in the name of, or
received from or in the name of, an entity or individual acting for or
on behalf of, or owned or controlled by, such a person; or if made in
an attempt to violate, to evade, or to avoid the bar on the provision
of contributions by, to, or for the benefit of such a person, or the
receipt of contributions from such a person.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
0
48. Revise Sec. 598.507 to read as follows:
Sec. 598.507 Provision of certain legal services.
(a) The provision of the following legal services to or on behalf
of a specially designated narcotics trafficker is authorized, provided
that any receipt of payment of professional fees and reimbursement of
incurred expenses must be authorized pursuant to Sec. Sec. 598.508 and
598.509, which authorize certain types of payments for legal services;
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 when 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;
[[Page 26670]]
(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 specially
designated narcotics traffickers, 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 paragraph. Additionally, U.S. persons
who provide services authorized by this paragraph 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. 598.405.
(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. 598.202(a), is prohibited unless licensed
pursuant to this part.
Note 1 to Sec. 598.507: Pursuant to part 501, subpart E, of
this chapter, U.S. persons seeking administrative reconsideration or
judicial review of their designation or the blocking of their
property and interests in property may apply for a specific license
from OFAC to authorize the release of certain blocked funds
necessary for the payment of professional fees and reimbursement of
incurred expenses where alternative funding sources are not
available.
0
49. Add Sec. 598.508 to subpart E to read as follows:
Sec. 598.508 Payments for legal services from funds originating
outside the United States.
(a) Professional fees and incurred expenses. (1) Receipt of payment
of professional fees and reimbursement of incurred expenses for the
provision of legal services authorized pursuant to Sec. 598.507(a) to
or on behalf of a specially designated narcotics trafficker is
authorized from funds originating outside the United States, provided
that the funds do not originate from:
(i) A source within the United States;
(ii) Any source, wherever located, within the possession or control
of a U.S. person; or
(iii) Any individual or entity, other than the person on whose
behalf the legal services authorized pursuant to Sec. 598.507(a) are
to be provided, whose property and interests in property are blocked
pursuant to any part of this chapter or any Executive order or statute.
(2) This paragraph authorizes the blocked person on whose behalf
the legal services authorized pursuant to Sec. 598.507(a) are to be
provided to make payments for authorized legal services using funds
originating outside the United States that were not previously blocked.
(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.
0
50. Add Sec. 598.509 to subpart E to read as follows:
Sec. 598.509 Payment of legal fees and expenses at public expense.
U.S. persons that are attorneys, law firms, or legal services
organizations are authorized to receive payment of professional fees
and reimbursement of incurred expenses from public funds for the
provision of legal services authorized by Sec. 598.507(a).
0
51. Add Sec. 598.510 to subpart E to read as follows:
Sec. 598.510 Certain transactions for maintenance, employment, and
related banking services for blocked individuals physically located in
the United States.
(a) Individuals who are specially designated narcotics traffickers
who are in U.S. custody or incarcerated in jails, prisons, or similar
facilities in the United States (``covered individuals''), are
authorized to engage in the following transactions within the United
States:
(1) Purchasing, making payment for, and receiving goods and
services for their maintenance and the maintenance of their spouse or
persons who are sharing or who would ordinarily share a common dwelling
as a family with them, located in the United States, including food,
clothing, housing, medical care, education, transportation, insurance,
and utilities;
(2) Obtaining or continuing employment and engaging in all
transactions ordinarily incident to such employment, including receipt
of salary and benefits;
(3) Establishing accounts with a U.S. financial institution, or a
commissary-type account with a prison, jail, or other similar facility,
located in the United States, for use in connection with the
transactions authorized in paragraph (a)(1) and (a)(2) of this section;
and
(4) Receiving and making funds transfers in furtherance of the
authorized transactions set forth in paragraphs (a)(1) through (3) of
this section from unblocked funds originating within or outside the
United States, provided that any funds received may not originate from
any individual or entity whose property or interests in property are
blocked pursuant to any part of this chapter or any Executive order or
statute, other than the covered individual or his or her spouse or
persons who are sharing or who would ordinarily share a common dwelling
as a family with the covered individual.
(b) Any financial institution that has established any account
pursuant to paragraph (a)(3) of this section, excluding commissary-type
accounts with prisons, jails, or other similar facilities, must provide
the name and address of the financial institution, the name of the
account holder, and the account number to OFAC within 10 business days
of the establishment of the account.
(c) This general license does not authorize any funds transfers to
any location outside the United States.
Note 1 to paragraph (c): A covered individual has an interest in
any funds remaining in a commissary-type account with a prison,
jail, or other similar facility established pursuant to paragraph
(a)(3) of
[[Page 26671]]
this section after the covered individual is released from custody
or incarceration.
Note 2 to paragraph (c): In the case of individuals who are in
custody or incarcerated, funds transfers must be authorized by and
consistent with the conditions, protocols, and other requirements
established by the jail, prison, or other facility.
Note 3 to Sec. 598.510: The authorization in this section only
applies to laws and regulations administered by OFAC and should not
be interpreted to excuse compliance with other applicable laws or
regulations, including the immigration laws of the United States.
0
52. Add Sec. 598.511 to subpart E to read as follows:
Sec. 598.511 Certain transactions for the expenses of maintaining
blocked tangible property
(a) Specially designated narcotics traffickers are authorized to
engage in the following transactions:
(1) Making payment for and receiving goods and services for the
maintenance of tangible property blocked pursuant to Sec. 598.202(a);
and
(2) Receiving and making funds transfers in furtherance of the
authorized transactions set forth in paragraph (a)(1) of this section
from unblocked funds originating outside the United States, provided
that any funds received may not originate from any individual or entity
whose property or interests in property are blocked pursuant to any
part of this chapter or any Executive order or statute, other than the
specially designated narcotics trafficker(s) who owns the property.
(b)(1) Any person making payment for or receiving goods and
services for the maintenance of tangible property blocked pursuant to
Sec. 598.202(a) authorized by paragraph (a)(1) of this section must
file a report on the transactions with OFAC within 30 days of the first
transaction related to that property. Such reports shall include the
following numbered sections and information:
(i) Estimated or actual dollar value of the transaction(s), as
determined by the value of the payment, goods, or services;
(ii) A description of the blocked property;
(iii) The parties involved;
(iv) The type and scope of transactions conducted; and
(iv) The dates and duration of the transactions.
(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.
0
53. Add Sec. 598.512 to subpart E to read as follows:
Sec. 598.512 Emergency medical services.
The provision and receipt of nonscheduled emergency medical
services that are prohibited by this part are authorized.
0
54. Revise Sec. 598.803 to read as follows:
Sec. 598.803 Delegation by the Secretary of the Treasury.
Any action that the Secretary of the Treasury is authorized to take
pursuant to the Foreign Narcotics Kingpin Designation Act, the
Presidential Memorandum of May 15, 2015: Delegation of Functions Under
the Foreign Narcotics Kingpin Designation Act, or the Presidential
Memorandum of May 31, 2013: Delegation of Functions Under Subsection
804(h)(2)(A) of the Foreign Narcotics Kingpin Designation Act may be
taken by the Director of the OFAC or by any other person to whom the
Secretary of the Treasury has delegated authority so to act.
Dated: May 12, 2021.
Bradley T. Smith,
Acting Director, Office of Foreign Assets Control.
[FR Doc. 2021-10314 Filed 5-14-21; 8:45 am]
BILLING CODE 4810-AL-P