[Federal Register Volume 89, Number 44 (Tuesday, March 5, 2024)]
[Rules and Regulations]
[Pages 15744-15753]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04500]
[[Page 15744]]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 546
Updates to the Darfur 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 changing the heading of the Darfur Sanctions
Regulations to the Sudan Stabilization Sanctions Regulations and
amending the renamed regulations to implement a May 4, 2023 Sudan-
related Executive Order. This rule also updates or adds new
definitions, general licenses, and interpretative guidance, among other
regulatory provisions.
DATES: This rule is effective March 5, 2024.
FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for
Licensing, 202-622-2480; Assistant Director for Regulatory Affairs,
202-622-4855; or Assistant Director for Compliance, 202-622-2490.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document and additional information concerning OFAC are
available on OFAC's website: https://ofac.treasury.gov/.
Background
On May 28, 2009, OFAC issued the Darfur Sanctions Regulations, 31
CFR part 546 (74 FR 25432, May 28, 2009) (the ``Regulations'') to
implement Executive Order (E.O.) 13400 of April 26, 2006, ``Blocking
Property of Persons in Connection with the Conflict in Sudan's Darfur
Region'' (71 FR 25483, May 1, 2006). The Regulations were issued
pursuant to authorities delegated to the Secretary of the Treasury in
E.O. 13400, which expanded the scope of the national emergency declared
in E.O. 13067 of November 3, 1997, ``Blocking Sudanese Government
Property and Prohibiting Transactions with Sudan'' (62 FR 59989,
November 5, 1997) with respect to the policies and actions of the
Government of Sudan. Since then, OFAC has amended the Regulations
several times. OFAC is now amending the Regulations to implement
provisions of E.O. 14098, ``Imposing Sanctions on Certain Persons
Destabilizing Sudan and Undermining the Goal of a Democratic
Transition'' (88 FR 29529, May 5, 2023). In addition, OFAC is amending
the Regulations to update or add new definitions, general licenses, and
interpretative guidance, among other regulatory provisions.
Furthermore, OFAC is renaming the Darfur Sanctions Regulations as the
Sudan Stabilization Sanctions Regulations to reflect the expanded scope
of the national emergency, as set forth in E.O. 14098.
On May 4, 2023, the President, invoking the authority of, inter
alia, the International Emergency Economic Powers Act (50 U.S.C. 1701
et seq.) (IEEPA), issued E.O. 14098. In E.O. 14098, the President
expanded the scope of the national emergency declared in E.O. 13067,
and expanded by E.O. 13400, finding that the situation in Sudan,
including the military's seizure of power in October 2021 and the
outbreak of inter-service fighting in April 2023, constitutes an
unusual and extraordinary threat to the national security and foreign
policy of the United States.
Section 1(a) of E.O. 14098 blocks, with certain exceptions, 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: (i) any foreign person
determined by the Secretary of the Treasury, in consultation with the
Secretary of State, to be responsible for, or complicit in, or to have
directly or indirectly engaged or attempted to engage in, any of the
following: (A) actions or policies that threaten the peace, security,
or stability of Sudan; (B) actions or policies that obstruct,
undermine, delay, or impede, or pose a significant risk of obstructing,
undermining, delaying, or impeding, the formation or operation of a
civilian transitional government, Sudan's transition to democracy, or a
future democratically elected government; (C) actions or policies that
have the purpose or effect of undermining democratic processes or
institutions in Sudan; (D) censorship or other actions or policies that
prohibit, limit, or penalize the exercise of freedoms of expression,
association, or peaceful assembly by individuals in Sudan, or that
limit access to free and independent news or information in or with
respect to Sudan; (E) corruption, including bribery, misappropriation
of state assets, and interference with public processes such as
government oversight of parastatal budgets and revenues for personal
benefit; (F) serious human rights abuse, including serious human rights
abuse related to political repression, in or with respect to Sudan; (G)
the targeting of women, children, or any other civilians through the
commission of acts of violence (including killing, maiming, torture, or
rape or other sexual violence), abduction, forced displacement, or
attacks on schools, hospitals, religious sites, or locations where
civilians are seeking refuge, or through conduct that would constitute
a serious abuse or violation of human rights or a violation of
international humanitarian law; (H) the obstruction of the activities
of United Nations missions--including peacekeeping missions, as well as
diplomatic or humanitarian missions--in Sudan, or of the delivery of,
distribution of, or access to humanitarian assistance; or (I) attacks
against United Nations missions, including peacekeeping operations;
(ii) any foreign person determined by the Secretary of the Treasury, in
consultation with the Secretary of State, to be or have been a leader,
official, senior executive officer, or member of the board of directors
of any entity: (A) that has, or whose members have, engaged in any
activity described in subsection (a)(i) of E.O. 14098 relating to the
tenure of such leader, official, senior executive officer, or member of
the board of directors; or (B) whose property and interests in property
are blocked pursuant to E.O. 14098 relating to the tenure of such
leader, official, senior executive officer, or member of the board of
directors; (iii) any foreign person determined by the Secretary of the
Treasury, in consultation with the Secretary of State, to be a spouse
or adult child of any person whose property and interests in property
are blocked pursuant to E.O. 14098; (iv) any foreign person determined
by the Secretary of the Treasury, in consultation with the Secretary of
State, to have materially assisted, sponsored, or provided financial,
material, or technological support for, or goods or services to or in
support of, any activity described in section 1(a)(i) of E.O. 14098 or
any person whose property and interests in property are blocked
pursuant to E.O. 14098; or (v) any foreign person determined by the
Secretary of the Treasury, in consultation with the Secretary of State,
to be owned or controlled by, or to have acted or purported to act for
or on behalf of, directly or indirectly, any person whose property and
interests in property are blocked pursuant to E.O. 14098. The blocked
property and interests in property of the persons described above may
not be transferred, paid, exported, withdrawn, or otherwise dealt in.
Section 1(b) of E.O. 14098 provides that the prohibitions in
section 1(a) of E.O. 14098 apply except to the extent
[[Page 15745]]
provided by statutes, or in regulations, orders, directives, or
licenses that may be issued pursuant to E.O. 14098, and notwithstanding
any contract entered into or any license or permit granted before the
date of E.O. 14098.
Section 3 of E.O. 14098 provides that the prohibition on any
transaction or dealing in blocked property or interests in property
includes 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 E.O. 14098, and the
receipt of any contribution or provision of funds, goods, or services
from any such person.
In Section 4 of E.O. 14098, the President determined that the
making of donations of the types of articles specified in section
203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)), by, to, or for the benefit
of any person whose property and interests in property are blocked
pursuant to E.O. 14098 would seriously impair the President's ability
to deal with the national emergency declared in E.O. 13067, as
expanded. The President therefore prohibited the donation of such items
except to the extent provided by statutes, or in regulations, rulings,
instructions, orders, directives, or licenses that may be issued
pursuant to E.O. 14098.
Section 5 of E.O. 14098 prohibits any transaction that evades or
avoids, has the purpose of evading or avoiding, causes a violation of,
or attempts to violate any of the prohibitions set forth in E.O. 14098,
as well as any conspiracy formed to violate such prohibitions.
Section 9 of E.O. 14098 authorizes the Secretary of the Treasury,
in consultation with the Secretary of State, to take such actions,
including the promulgation of rules and regulations, and to employ all
powers granted to the President by IEEPA as may be necessary to carry
out the purposes of E.O. 14098. Section 9 of E.O. 14098 also provides
that the Secretary of the Treasury may, consistent with applicable law,
redelegate any of these functions within the Department of the
Treasury.
Current Regulatory Action
In furtherance of the purposes of E.O. 14098, OFAC is changing the
heading of the Darfur Sanctions Regulations, 31 CFR part 546, to the
Sudan Stabilization Sanctions Regulations and amending the renamed
Regulations to implement E.O. 14098, among other changes. In
particular, in subpart B of the Regulations, OFAC is revising Sec.
546.201 to incorporate the new designation criteria provided in E.O.
14098, as well as adding Sec. 546.201(e) to implement any future
Executive orders issued pursuant to E.O. 13067. Accordingly, throughout
the Regulations, OFAC is amending all references to Sec. 546.201(a) to
references to Sec. 546.201. In addition, OFAC is adding Sec. 546.206
to detail transactions that are exempt from the prohibitions of the
Regulations pursuant to section 203(b) of IEEPA (50 U.S.C. 1702(b)).
In subpart C of the Regulations, new definitions are being added to
other key terms used throughout the Regulations. Because these new
definitions were inserted in alphabetical order, the definitions that
were in the prior abbreviated set of regulations have been renumbered.
Specifically, OFAC is clarifying that the term OFAC means the Office of
Foreign Assets Control, providing a definition for foreign person at
Sec. 546.306, and adding definitional guidance at Sec. 546.300
clarifying that the terms defined in subpart C apply throughout the
Regulations. Furthermore, OFAC is updating multiple definitions,
including its definition of the term effective date at Sec. 546.303.
In subpart D, which contains interpretive sections regarding the
Regulations, OFAC is amending several interpretive provisions to align
with the aforementioned changes to subpart B, as well as updating
several provisions for clarity. OFAC has also added an interpretive
provision at Sec. 546.412 to clarify that the property and interests
in property of an entity, including any political subdivision, agency,
or instrumentality of a governmental entity, are not blocked solely
because one or more persons whose property and interests in property
are blocked pursuant to Sec. 546.201 is a member, leader, official,
senior executive officer, or otherwise exercises control.
Transactions otherwise prohibited by the Regulations but found to
be consistent with U.S. policy may be authorized by one of the general
licenses contained in subpart E of the Regulations or by a specific
license issued pursuant to the procedures described in subpart E of 31
CFR part 501. OFAC is updating Sec. 546.502 to conform with current
statements of licensing policy and revising Sec. 546.511, which
authorizes certain transactions for the official business of certain
international organizations and entities, and Sec. 546.513, which
authorizes certain transactions related to the provision of
agricultural commodities, medicine, medical devices, replacement parts
and components, or software updates, and the extraction, processing,
transport, sale, or distribution of water in Sudan. OFAC has also added
Sec. 546.508, which authorizes certain payments for legal services
from funds originating outside the United States. In addition, the
interpretive provisions that were in the prior set of regulations have
been renumbered.
In subpart G of the Regulations, OFAC is revising several sections
to describe the civil and criminal penalties applicable to violations
of the Regulations, as well as the procedures governing the potential
imposition of a civil monetary penalty or issuance of a Finding of
Violation. OFAC is adding Sec. 546.705 describing the procedures
governing the potential issuance of a Finding of Violation. Finally, in
subpart H of the Regulations, OFAC is updating a section heading at
Sec. 546.802 to reflect the delegation of certain authorities of the
Secretary of the Treasury.
Throughout the Regulations, OFAC is changing references to ``the
Office of Foreign Assets Control'' and ``the Director of the Office of
Foreign Assets Control'' to ``OFAC'' for purposes of clarity and
simplicity.
Public Participation
Because the Regulations 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), as amended, 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 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 546
Administrative practice and procedure, Banks, banking, Blocking of
assets, Credit, Foreign trade, Penalties, Reporting and recordkeeping
requirements, Sanctions, Securities, Services, Sudan.
For the reasons set forth in the preamble, OFAC amends 31 CFR part
546 as follows:
[[Page 15746]]
PART 546--SUDAN STABILIZATION SANCTIONS REGULATIONS
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1. Revise the heading of part 546 to read as set forth above.
0
2. The authority citation for part 546 is revised 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, as
amended (28 U.S.C. 2461 note); E.O. 13067, 62 FR 59989, 3 CFR, 1997
Comp., p. 230; E.O. 13400, 71 FR 25483, 3 CFR, 2006 Comp., p. 220;
E.O. 14098, 88 FR 29529.
Subpart B--Prohibitions
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3. Revise Sec. 546.201 to read as follows:
Sec. 546.201 Prohibited transactions involving blocked property.
(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 the following persons
are blocked and may not be transferred, paid, exported, withdrawn, or
otherwise dealt in:
(1) E.O. 13400 Annex. The persons listed in the Annex to Executive
Order 13400 of April 26, 2006.
(2) E.O. 13400. Any person determined by the Secretary of the
Treasury, after consultation with the Secretary of State:
(i) To have constituted a threat to the peace process in Darfur;
(ii) To have constituted a threat to stability in Darfur and the
region;
(iii) To be responsible for conduct related to the conflict in
Darfur that violates international law;
(iv) To be responsible for heinous conduct with respect to human
life or limb related to the conflict in Darfur;
(v) To have directly or indirectly supplied, sold, or transferred
arms or any related materiel, or any assistance, advice, or training
related to military activities to:
(A) The Government of Sudan;
(B) The Sudan Liberation Movement/Army;
(C) The Justice and Equality Movement;
(D) The Janjaweed; or
(E) Any person (other than a person listed in paragraph
(a)(2)(v)(A) through (D) of this section) operating in the states of
North Darfur, South Darfur, or West Darfur that is a belligerent, a
nongovernmental entity, or an individual;
(vi) To be responsible for offensive military overflights in and
over the Darfur region;
(vii) To have materially assisted, sponsored, or provided
financial, material, or technological support for, or goods or services
in support of, the activities described in paragraphs (a)(2)(i) through
(vi) of this section or any person whose property and interests in
property are blocked pursuant to paragraphs (a)(1) through (2) of this
section; or
(viii) To be owned or controlled by, or acting or purporting to act
for or on behalf of, directly or indirectly, any person whose property
and interests in property are blocked pursuant to paragraphs (a)(1)
through (2) of this section.
(3) E.O. 14098. Any foreign person determined by the Secretary of
the Treasury, in consultation with the Secretary of State:
(i) To be responsible for, or complicit in, or to have directly or
indirectly engaged or attempted to engage in, any of the following:
(A) Actions or policies that threaten the peace, security, or
stability of Sudan;
(B) Actions or policies that obstruct, undermine, delay, or impede,
or pose a significant risk of obstructing, undermining, delaying, or
impeding, the formation or operation of a civilian transitional
government, Sudan's transition to democracy, or a future democratically
elected government;
(C) Actions or policies that have the purpose or effect of
undermining democratic processes or institutions in Sudan;
(D) Censorship or other actions or policies that prohibit, limit,
or penalize the exercise of freedoms of expression, association, or
peaceful assembly by individuals in Sudan, or that limit access to free
and independent news or information in or with respect to Sudan;
(E) Corruption, including bribery, misappropriation of state
assets, and interference with public processes such as government
oversight of parastatal budgets and revenues for personal benefit;
(F) Serious human rights abuse, including serious human rights
abuse related to political repression, in or with respect to Sudan;
(G) The targeting of women, children, or any other civilians
through the commission of acts of violence (including killing, maiming,
torture, or rape or other sexual violence), abduction, forced
displacement, or attacks on schools, hospitals, religious sites, or
locations where civilians are seeking refuge, or through conduct that
would constitute a serious abuse or violation of human rights or a
violation of international humanitarian law;
(H) The obstruction of the activities of United Nations missions--
including peacekeeping missions, as well as diplomatic or humanitarian
missions--in Sudan, or of the delivery of, distribution of, or access
to humanitarian assistance; or
(I) Attacks against United Nations missions, including peacekeeping
operations;
(ii) To be or have been a leader, official, senior executive
officer, or member of the board of directors of any entity:
(A) That has, or whose members have, engaged in any activity
described in paragraph (a)(3)(i) of this section relating to the tenure
of such leader, official, senior executive officer, or member of the
board of directors; or
(B) Whose property and interests in property are blocked pursuant
to this order relating to the tenure of such leader, official, senior
executive officer, or member of the board of directors;
(iii) To be a spouse or adult child of any person whose property
and interests in property are blocked pursuant to paragraph (a)(3) of
this section;
(iv) To have materially assisted, sponsored, or provided financial,
material, or technological support for, or goods or services to or in
support of, any activity described in paragraph (a)(3)(i) of this
section or any person whose property and interests in property are
blocked pursuant to paragraph (a)(3) of this section; or
(v) To be owned or controlled by, or to have acted or purported to
act for or on behalf of, directly or indirectly, any person whose
property and interests in property are blocked pursuant to paragraph
(a)(3) of this section.
(b) The prohibitions in this section include, but are not limited
to, prohibitions on the following transactions when engaged in by a
United States person or within the United States:
(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 otherwise authorized by this part or by a specific
license expressly referring to this section, any dealing in any
security (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, any person whose
property and interests in property are blocked pursuant to this section
is prohibited.
[[Page 15747]]
This prohibition includes but is not limited to 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 such security 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 security may have
or might appear to have assigned, transferred, or otherwise disposed of
the security.
(d) The prohibitions in paragraph (a) of this section apply except
to the extent provided by statutes, or in regulations, rulings,
instructions, 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.
(e) All transactions prohibited pursuant to any Executive order
issued after May 4, 2023 pursuant to the national emergency declared in
E.O. 13067 of November 3, 1997 and expanded by E.O. 13400 of April 26,
2006 and E.O. 14098 of May 4, 2023 are prohibited pursuant to this
part.
Note 1 to Sec. 546.201. The names of persons listed in, or
designated or identified as blocked pursuant to E.O. 13067, or any
further Executive orders issued pursuant to the national emergency
declared therein, whose property and interests in property therefore
are blocked pursuant to this section, are published in the Federal
Register and incorporated into OFAC's Specially Designated Nationals
and Blocked Persons List (SDN List) using the following identifiers:
for E.O. 13400: ``[DARFUR]''; for E.O. 14098: ``[SUDAN-EO14098]'';
and for any further Executive orders issued pursuant to the national
emergency declared in E.O. 13067 using the identifier formulation
``[SUDAN-E.O.[E.O. number pursuant to which the person's property
and interests in property are blocked]].'' 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. 546.411
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. 546.201. Section 203 of the International
Emergency Economic Powers Act (50 U.S.C. 1702) authorizes the
blocking of property and interests in property of a person during
the pendency of an investigation. The names of persons whose
property and interests in property are blocked pending investigation
pursuant to this section also are published in the Federal Register
and incorporated into the SDN List using the following identifiers:
for E.O. 13400: ``[BPI-DARFUR]''; for E.O. 14098, ``[BPI-SUDAN-
EO14098]''; and for any further Executive orders issued pursuant to
the national emergency declared in E.O. 13067: using the identifier
formulation ``[BPI-SUDAN-[E.O. number pursuant to which the person's
property and interests in property are blocked pending
investigation]].''
Note 3 to Sec. 546.201. 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, or administrative reconsideration of their
status as persons whose property and interests in property are
blocked pursuant to this section.
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4. Amend Sec. 546.202 by:
0
a. Revising and republishing paragraph (a);
0
b. In paragraph (b), removing ``Sec. 546.201(a)'' and adding in its
place ``Sec. 546.201''.
0
c. Revising paragraph (c).
0
d. In paragraph (d)(3)(i), removing ``license, or other directive'' and
adding in its place ``order, directive, license,''.
0
e. Redesignating paragraph (e) as paragraph (f).
0
f. Redesignating Note to paragraph (d) of Sec. 546.202 as paragraph
(e).
0
g. In newly redesignated paragraph (e), removing ``(d)(1) and (d)(2)''
and adding in its place ``(d)(1) and (2)''.
0
h. Revising newly redesignated paragraph (f);
0
i. Removing ``the Director of the Office of Foreign Assets Control''
wherever it appears and adding in its place ``OFAC''.
The revisions read as follows:
Sec. 546.202 Effect of transfers violating the provisions of this
part.
(a) Any transfer after the effective date that is in violation of
any provision of this part or of any regulation, ruling, instruction,
order, directive, or license issued pursuant to this part, and that
involves any property or interest in property blocked pursuant to Sec.
546.201, is null and void and shall not be the basis for the assertion
or recognition of any interest in or right, remedy, power, or privilege
with respect to such property or interest in property.
* * * * *
(c) Unless otherwise provided, a license or other authorization
issued by OFAC before, during, or after a transfer shall validate such
transfer or make it enforceable to the same extent that it would be
valid or enforceable but for the provisions of this part and any
regulation, ruling, instruction, order, directive, or license issued
pursuant to this part.
* * * * *
(f) Unless licensed pursuant to this part, any attachment,
judgment, decree, lien, execution, garnishment, or other judicial
process is null and void with respect to any property or interest in
property blocked pursuant to Sec. 546.201.
0
5. Revise Sec. 546.205 to read as follows:
Sec. 546.205 Evasions; attempts; causing violations; conspiracies.
(a) Any transaction on or after the effective date that evades or
avoids, has the purpose of evading or avoiding, causes a violation of,
or attempts to violate any of the prohibitions set forth in this part
is prohibited.
(b) Any conspiracy formed to violate the prohibitions set forth in
this part is prohibited.
0
6. Add Sec. 546.206 to read as follows:
Sec. 546.206 Exempt transactions.
(a) United Nations Participation Act. The exemptions described in
this section do not apply to transactions involving property or
interests in property of persons whose property and interests in
property are blocked pursuant to the authority of the United Nations
Participation Act, as amended (22 U.S.C. 287c) (UNPA).
Note 1 to paragraph (a). Persons whose property and interests in
property are blocked pursuant to the authority of the UNPA include
those listed on both OFAC's Specially Designated Nationals and
Blocked Persons List (SDN List) and the Consolidated United Nations
Security Council Sanctions List (UN List) (see https://www.un.org),
as well as persons listed on the SDN List for being owned or
controlled by, or acting for or on behalf of, persons listed on both
the SDN List and the UN List.
(b) International Emergency Economic Powers Act. The
prohibitions contained in this part do not apply to any transactions
that are exempt pursuant to section 203(b) of the International
Emergency Economic Powers Act (50 U.S.C. 1702(b)).
(c) Official business. The prohibitions contained in Sec.
546.201(a)(3) do not apply to transactions for the conduct of the
official business of the United States Government or the United
Nations (and its Specialized Agencies, Programmes, Funds, and
Related Organizations) by employees, grantees, or contractors
thereof.
Note 2 to Sec. 546.206. See Sec. 546.510 for a general
license authorizing transactions for the conduct of the official
business of the United States Government not otherwise exempt.
Note 3 to Sec. 546.206. See Sec. 546.511 for a general
license authorizing transactions for the conduct of the official
business of certain international organizations and entities not
otherwise exempt.
[[Page 15748]]
Subpart C--General Definitions
Sec. Sec. 546.305 through 546.313 [Redesignated]
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7. Redesignate Sec. Sec. 546.305 through 546.313 as follows:
------------------------------------------------------------------------
Old section New section
------------------------------------------------------------------------
546.305 546.308
546.306 546.309
546.307 546.311
546.308 546.312
546.309 546.313
546.310 546.314
546.311 546.315
546.312 546.316
546.313 546.305
------------------------------------------------------------------------
0
8. Add Sec. 546.300 to read as follows:
Sec. 546.300 Applicability of definitions.
The definitions in this subpart apply throughout the entire part.
0
9. Revise and republish Sec. 546.302 to read as follows:
Sec. 546.302 Blocked account; blocked property.
The terms blocked account and blocked property mean any account or
property subject to the prohibitions in Sec. 546.201 held in the name
of a person whose property and interests in property are blocked
pursuant to Sec. 546.201, 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. 546.302: See Sec. 546.411 concerning the
blocked status of property and interests in property of an entity
that is directly or indirectly owned, whether individually or in the
aggregate, 50 percent or more by one or more persons whose property
and interests in property are blocked pursuant to Sec. 546.201.
0
10. Revise Sec. 546.303 to read as follows:
Sec. 546.303 Effective date.
(a) The term effective date refers to the effective date of the
applicable prohibitions and directives contained in this part as
follows:
(1) With respect to a person whose property and interests in
property are blocked pursuant to Sec. 546.201(a)(1), 12:01 a.m.
eastern daylight time, April 27, 2006;
(2) With respect to a person whose property and interests in
property are otherwise blocked pursuant to Sec. 546.201, the earlier
of the date of actual or constructive notice that such person's
property and interests in property are blocked.
(b) For the purposes of this section, constructive notice is the
date that a notice of the blocking of the relevant person's property
and interests in property is published in the Federal Register.
Sec. 546.305 [Amended]
0
11. Amend newly designated Sec. 546.305 as follows:
0
a. Remove ``, as used in Sec. 546.201(a)(2)(vii) of this part,''.
0
b. Remove '' but not limited to''.
0
12. Add Sec. 546.306 to read as follows:
Sec. 546.306 Foreign person.
The term foreign person means any person that is not a U.S. person.
Sec. 546.307 [Reserved]
0
13. Add and reserve Sec. 546.307.
Sec. 546.309 [Amended]
0
14. Revise newly designated Sec. 546.309 as follows:
(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: https://ofac.treasury.gov/.
(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: https://ofac.treasury.gov.
0
15. Add Sec. 546.310 to read as follows:
Sec. 546.310 OFAC.
The term OFAC means the Department of the Treasury's Office of
Foreign Assets Control.
Sec. 546.312 [Amended]
0
16. In newly designated Sec. 546.312, remove ``, but are not limited
to,''.
Sec. 546.313 [Amended]
0
17. Amend newly designated Sec. 546.313 by removing `` and, without
limitation upon the foregoing'' and adding, in its place, ``. Without
limitation on the foregoing, it''.
0
18. Revise newly redesignated Sec. 546.315 to read as follows:
Sec. 546.315 U.S. financial institution.
The term U.S. financial institution means any U.S. entity
(including its foreign branches) that is engaged in the business of
accepting deposits, making, granting, transferring, holding, or
brokering loans or credits, purchasing or selling foreign exchange,
securities, futures or options, or procuring purchasers and sellers
thereof, as principal or agent. It includes depository institutions,
banks, savings banks, money services businesses, operators of credit
card systems, trust companies, insurance companies, securities brokers
and dealers, futures and options brokers and dealers, forward contract
and foreign exchange merchants, securities and commodities exchanges,
clearing corporations, investment companies, employee benefit plans,
dealers in precious metals, stones, or jewels, and U.S. holding
companies, U.S. affiliates, or U.S. subsidiaries of any of the
foregoing. This term includes those branches, offices, and agencies of
foreign financial institutions that are located in the United States,
but not such institutions' foreign branches, offices, or agencies.
Subpart D--Interpretations
0
19. Revise Sec. 546.401 to read as follows:
Sec. 546.401 Reference to amended sections.
(a) Reference to any section in this part is a reference to the
same as currently amended, unless the reference includes a specific
date. See 44 U.S.C. 1510.
(b) Reference to any regulation, ruling, instruction, order,
directive, or license issued pursuant to this part is a reference to
the same as currently amended unless otherwise specified.
0
20. Revise Sec. 546.402 to read as follows:
Sec. 546.402 Effect of amendment.
Unless otherwise specifically provided, any amendment,
modification, or revocation of any provision in or appendix to this
part or chapter or of any regulation, ruling, instruction, order,
directive, or license issued by OFAC does not affect any act done or
omitted, or any civil or criminal proceeding commenced or pending,
prior to such amendment, modification, or revocation. All penalties,
forfeitures, and liabilities under any such regulation, ruling,
instruction, order, directive, or license continue and may be enforced
as if such amendment, modification, or revocation had not been made.
Sec. 546.403 [Amended]
0
21. Amend Sec. 546.403 as follows:
0
a. In paragraph (a),
0
i. Add `` whose property and interests in property are blocked pursuant
to Sec. 546.201'' after ``away from a person''; and
[[Page 15749]]
0
ii. Remove ``or any other part of this chapter''; and
0
b. Remove ``Sec. 546.201(a)'' wherever it appears and add in its place
``Sec. 546.201''.
0
22. Revise Sec. 546.404 to read as follows:
Sec. 546.404 Transactions ordinarily incident to a licensed
transaction.
(a) Any transaction ordinarily incident to a licensed transaction
and necessary to give effect thereto is also authorized, except:
(1) An ordinarily incident transaction, not explicitly authorized
within the terms of the license, by or with a person whose property and
interests in property are blocked pursuant to Sec. 546.201; or
(2) An ordinarily incident transaction, not explicitly authorized
within the terms of the license, involving a debit to a blocked account
or a transfer of blocked property.
(b) For example, a license authorizing a person to complete a
securities sale involving Company A, whose property and interests in
property are blocked pursuant to Sec. 546.201, also authorizes other
persons to engage in activities that are ordinarily incident and
necessary to complete the sale, including transactions by the buyer,
broker, transfer agents, and banks, provided that such other persons
are not themselves persons whose property and interests in property are
blocked pursuant to Sec. 546.201.
Sec. 546.405 [Amended]
0
23. Amend Sec. 546.405 as follows:
0
a. In both places where it occurs, remove ``Sec. 546.201(a)'' and add
in its place ``Sec. 546.201''.
0
b. In Note to Sec. 546.405, remove ``Sec. Sec. 546.507 and 546.508''
and add in its place ``Sec. Sec. 546.507 and 546.509''.
Sec. 546.410 [Amended]
0
24. Amend Sec. 546.410 by removing ``bank'' and adding in its place
``financial institution''.
0
25. Add Sec. 546.412 to read as follows:
Sec. 546.412 Entities of which one or more blocked persons is a
member, leader, official, senior executive officer, or otherwise
exercises control.
(a) The property and interests in property of an entity, including
any political subdivision, agency, or instrumentality of a governmental
entity, are not blocked solely because one or more persons whose
property and interests in property are blocked pursuant to Sec.
546.201 is a member, leader, official, senior executive officer, or
otherwise exercises control.
Note 1 to paragraph (a). See Sec. 546.411 concerning the
blocked status of property and interests in property of an entity
that is directly or indirectly owned, whether individually or in the
aggregate, 50 percent or more by one or more persons whose property
and interests in property are blocked pursuant to Sec. 546.201.
(b) For example, U.S. persons may not, except as authorized or
exempt pursuant to this part, engage in the following transactions
with a person whose property and interests in property are blocked
pursuant to Sec. 546.201: enter into contracts that are signed by a
blocked person, enter into negotiations with a blocked person, or
process transactions, directly or indirectly, on behalf of a person
whose property and interests in property are blocked pursuant to
Sec. 546.201. However, U.S. persons are not prohibited from
engaging in a routine interaction with an agency in which a blocked
person is an official, but which does not involve the blocked person
directly or indirectly.
Note 2 to Sec. 546.412. OFAC encourages U.S. persons to be
cautious in engaging in transactions with any entity of which a
person whose property and interests in property are blocked pursuant
to Sec. 546.201 is a member, leader, official, senior executive
officer, or otherwise exercises control to ensure that U.S. persons
are not engaged in transactions, directly or indirectly, with a
blocked person, except as authorized or exempt pursuant to this
part.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
0
26. Redesignate Sec. Sec. 546.508 through 546.512 as follows:
------------------------------------------------------------------------
Old section New section
------------------------------------------------------------------------
546.508 546.509
546.509 546.510
546.510 546.511
546.511 546.512
546.512 546.513
------------------------------------------------------------------------
0
27. Revise and republish Sec. 546.501 to read as follows:
Sec. 546.501 General and specific licensing procedures.
For provisions relating to licensing procedures, see part 501,
subpart E of this chapter. Licensing actions taken pursuant to part 501
of this chapter with respect to the prohibitions contained in this part
are considered actions taken pursuant to this part. General licenses
and statements of licensing policy relating to this part also may be
available through the Sudan Stabilization Sanctions Regulations
sanctions page on OFAC's website: https://ofac.treasury.gov.
0
28. Revise Sec. 546.502 to read as follows:
Sec. 546.502 Effect of license or other authorization.
(a) No license or other authorization contained in this part, or
otherwise issued by OFAC, authorizes or validates any transaction
effected prior to the issuance of such license or other authorization,
unless specifically provided in such license or authorization.
(b) No regulation, ruling, instruction, order, directive, or
license authorizes any transaction prohibited under this part unless
the regulation, ruling, instruction, order, directive, or license is
issued by OFAC and specifically refers to this part. No regulation,
ruling, instruction, order, directive, or license referring to this
part shall be deemed to authorize any transaction prohibited by any
other part of this chapter unless the regulation, ruling, instruction,
order, directive, or license specifically refers to such part.
(c) Any regulation, ruling, instruction, order, directive, or
license authorizing any transaction prohibited under this part has the
effect of removing a prohibition contained in this part from the
transaction, but only to the extent specifically stated by its terms.
Unless the regulation, ruling, instruction, order, directive, or
license otherwise specifies, such an authorization does not create any
right, duty, obligation, claim, or interest in, or with respect to, any
property that would not otherwise exist under ordinary principles of
law.
(d) Nothing contained in this part shall be construed to supersede
the requirements established under any other provision of law or to
relieve a person from any requirement to obtain a license or other
authorization from another department or agency of the U.S. government
in compliance with applicable laws and regulations subject to the
jurisdiction of that department or agency. For example, exports of
goods, services, or technical data that are not prohibited by this part
or that do not require a license by OFAC nevertheless may require
authorization by the U.S. Department of Commerce, the U.S. Department
of State, or other agencies of the U.S. government.
(e) No license or other authorization contained in or issued
pursuant to this part authorizes transfers of or payments from blocked
property or debits to blocked accounts unless the license or other
authorization explicitly authorizes the transfer of or payment from
blocked property or the debit to a blocked account.
(f) Any payment relating to a transaction authorized in or pursuant
to this part that is routed through the U.S. financial system should
reference the
[[Page 15750]]
relevant OFAC general or specific license authorizing the payment to
avoid the blocking or rejection of the transfer.
0
29. Revise Sec. 546.507 to read as follows:
Sec. 546.507 Provision of certain legal services.
(a) The provision of the following legal services to or on behalf
of persons whose property and interests in property are blocked
pursuant to Sec. 546.201 is authorized, provided that any receipt of
payment of professional fees and reimbursement of incurred expenses
must be authorized pursuant to Sec. 546.508, which authorizes certain
payments for legal services from funds originating outside the United
States; via specific license; or otherwise pursuant to this part:
(1) Provision of legal advice and counseling on the requirements of
and compliance with the laws of the United States or any jurisdiction
within the United States, provided that such advice and counseling are
not provided to facilitate transactions in violation of this part;
(2) Representation of persons named as defendants in or otherwise
made parties to legal, arbitration, or administrative proceedings
before any U.S. Federal, state, or local court or agency;
(3) Initiation and conduct of legal, arbitration, or administrative
proceedings before any U.S. Federal, state, or local court or agency;
(4) Representation of persons before any U.S. Federal, state, or
local court or agency with respect to the imposition, administration,
or enforcement of U.S. sanctions against such persons; and
(5) Provision of legal services in any other context in which
prevailing U.S. law requires access to legal counsel at public expense.
(b) The provision of any other legal services to or on behalf of
persons whose property and interests in property are blocked pursuant
to Sec. 546.201, 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 paragraph (a) of this section. Additionally,
U.S. persons who provide services authorized by paragraph (a) of 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. 546.404.
(d) Entry into a settlement agreement or the enforcement of any
lien, judgment, arbitral award, decree, or other order through
execution, garnishment, or other judicial process purporting to
transfer or otherwise alter or affect property or interests in property
blocked pursuant to Sec. 546.201 is prohibited unless licensed
pursuant to this part.
Note 1 to Sec. 546.507. 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 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.
0
30. Add Sec. 546.508 to read as follows:
Sec. 546.508 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. 546.507(a) to
or on behalf of any person whose property and interests in property are
blocked pursuant to Sec. 546.201, 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. 546.507(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) Nothing in this paragraph (a) authorizes payments for legal
services using funds in which any other person whose property and
interests in property are blocked pursuant to Sec. 546.201, any other
part of this chapter, or any Executive order or statute has an
interest.
(b) Records. Consistent with Sec. 501.601 of this chapter, U.S.
persons who receive payments pursuant to paragraph (a) of this section
must retain for five years from the date of the relevant payment a
record that specifies the following for each payment:
(1) The individual or entity from whom the funds originated and the
amount of funds received; and
(2) If applicable:
(i) 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;
(ii) A general description of the services provided; and
(iii) The amount of funds paid in connection with such services.
(3) These records must be furnished to OFAC on demand consistent
with Sec. 501.602 of this chapter.
0
31. Revise newly redesignated Sec. 546.509 to read as follows:
Sec. 546.509 Emergency medical services.
The provision and receipt of nonscheduled emergency medical
services that are prohibited by this part are authorized.
0
32. Amend newly redesignated Sec. 546.511 by:
0
a. In paragraph (a)(5), removing ``and'';
0
b. In paragraph (a)(6), removing ``.'' and adding in its place ``;
and''; and
0
c. Adding paragraph (a)(7).
The addition reads as follows:
Sec. 546.511 Official business of certain international organizations
and entities.
* * * * *
(a) * * *
(7) The African Union, including the African Union Commission and
other subsidiary bodies and organs.
* * * * *
0
33. Revise newly redesignated Sec. 546.513 to read as follows:
Sec. 546.513 Transactions related to the provision of agricultural
commodities, medicine, medical devices, replacement parts and
components, or software updates, and the extraction, processing,
transport, sale, or distribution of water in Sudan.
(a) All transactions prohibited by this part that are related to
the provision of agricultural commodities, medicine, medical devices,
replacement parts and components for medical devices, or software
updates for medical devices to Sudan or to persons in third countries
purchasing specifically for resale to Sudan, or to an individual whose
property and interests in property are blocked pursuant to this part in
quantities consistent with personal, non-commercial use, are
authorized.
(b) All transactions prohibited by this part that are related to
the extraction, processing, transport, sale, or distribution of water,
including the
[[Page 15751]]
maintenance or repair of water pipelines, are authorized.
(c) For the purposes of this general license, agricultural
commodities, medicine, and medical devices are defined as follows:
(1) Agricultural commodities. Agricultural commodities are
products:
(i) That fall within the term ``agricultural commodity'' as defined
in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602);
and
(ii) That are intended for ultimate use in Sudan as:
(A) Food for humans (including raw, processed, and packaged foods;
live animals; vitamins and minerals; food additives or supplements; and
bottled drinking water) or animals (including animal feeds);
(B) Seeds for food crops;
(C) Fertilizers or organic fertilizers; or
(D) Reproductive materials (such as live animals, fertilized eggs,
embryos, and semen) for the production of food animals.
(2) Medicine. Medicine is an item that falls within the definition
of the term ``drug'' in section 201 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321).
(3) Medical devices. A medical device is an item that falls within
the definition of ``device'' in section 201 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321).
Note 1 to Sec. 546.513. This general license does not relieve
any person authorized thereunder from complying with any other
applicable laws or regulations.
Subpart G--Penalties and Findings of Violation
0
34. Revise the heading of subpart G to read as set forth above.
0
35. Revise Sec. 546.701 to read as follows:
Sec. 546.701 Penalties.
(a) Section 206 of the International Emergency Economic Powers Act
(50 U.S.C. 1705) (IEEPA) is applicable to violations of the provisions
of any regulation, ruling, instruction, order, directive, or license
issued by or pursuant to the direction or authorization of the
Secretary of the Treasury pursuant to this part or otherwise under
IEEPA.
(1) A civil penalty not to exceed the amount set forth in section
206 of IEEPA may be imposed on any person who violates, attempts to
violate, conspires to violate, or causes a violation of any regulation,
ruling, instruction, order, directive, license, or prohibition issued
under IEEPA.
(2) IEEPA provides for a maximum civil penalty not to exceed the
greater of $368,136 or an amount that is twice the amount of the
transaction that is the basis of the violation with respect to which
the penalty is imposed.
(3) A person who willfully commits, willfully attempts to commit,
willfully conspires to commit, or aids or abets in the commission of a
violation of any regulation, ruling, instruction, order, directive,
license, or prohibition may, upon conviction, be fined not more than
$1,000,000, or if a natural person, be imprisoned for not more than 20
years, or both.
(b)(1) The civil penalties provided in IEEPA are subject to
adjustment pursuant to the Federal Civil Penalties Inflation Adjustment
Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 note).
(2) The criminal penalties provided in IEEPA are subject to
adjustment pursuant to 18 U.S.C. 3571.
(c) Pursuant to 18 U.S.C. 1001, whoever, in any matter within the
jurisdiction of the executive, legislative, or judicial branch of the
government of the United States, knowingly and willfully falsifies,
conceals, or covers up by any trick, scheme, or device a material fact;
or makes any materially false, fictitious, or fraudulent statement or
representation; or makes or uses any false writing or document knowing
the same to contain any materially false, fictitious, or fraudulent
statement or entry shall be fined under title 18, United States Code,
imprisoned, or both.
(d) Section 5(b) of the United Nations Participation Act, as
amended (22 U.S.C. 287c(b)) (UNPA), provides that any person who
willfully violates or evades or attempts to violate or evade any order,
rule, or regulation issued by the President pursuant to Section 5(a) of
the UNPA shall, upon conviction, be fined not more than $1,000,000 and,
if a natural person, be imprisoned for not more than 20 years, or both.
(e) Violations involving transactions described at section
203(b)(1), (3), and (4) of IEEPA shall be subject only to the penalties
set forth in paragraph (d) of this section.
(f) Violations of this part may also be subject to other applicable
laws.
0
36. Revise Sec. 546.702 to read as follows:
Sec. 546.702 Pre-Penalty Notice; settlement.
(a) When required. If OFAC has reason to believe that there has
occurred a violation of any provision of this part or a violation of
the provisions of any regulation, ruling, instruction, order,
directive, or license issued by or pursuant to the direction or
authorization of the Secretary of the Treasury pursuant to this part or
otherwise under the International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.) and determines that a civil monetary penalty is
warranted, OFAC will issue a Pre-Penalty Notice informing the alleged
violator of the agency's intent to impose a monetary penalty. A Pre-
Penalty Notice shall be in writing. The Pre-Penalty Notice may be
issued whether or not another agency has taken any action with respect
to the matter. For a description of the contents of a Pre-Penalty
Notice, see appendix A to part 501 of this chapter.
(b) Response--(1) Right to respond. An alleged violator has the
right to respond to a Pre-Penalty Notice by making a written
presentation to OFAC. For a description of the information that should
be included in such a response, see appendix A to part 501 of this
chapter.
(2) Deadline for response. A response to a Pre-Penalty Notice must
be made within 30 days as set forth in paragraphs (b)(2)(i) and (ii) of
this section. The failure to submit a response within 30 days shall be
deemed to be a waiver of the right to respond.
(i) Computation of time for response. A response to a Pre-Penalty
Notice must be postmarked or date-stamped by the U.S. Postal Service
(or foreign postal service, if mailed abroad) or courier service
provider (if transmitted to OFAC by courier), or dated if sent by
email, on or before the 30th day after the postmark date on the
envelope in which the Pre-Penalty Notice was mailed or date the Pre-
Penalty Notice was emailed. If the Pre-Penalty Notice was personally
delivered by a non-U.S. Postal Service agent authorized by OFAC, a
response must be postmarked or date-stamped on or before the 30th day
after the date of delivery.
(ii) Extensions of time for response. If a due date falls on a
federal holiday or weekend, that due date is extended to include the
following business day. Any other extensions of time will be granted,
at the discretion of OFAC, only upon specific request to OFAC.
(3) Form and method of response. A response to a Pre-Penalty Notice
need not be in any particular form, but it must be typewritten and
signed by the alleged violator or a representative thereof (electronic
signature is acceptable), contain information sufficient to indicate
that it is in response to the Pre-Penalty Notice, and include the OFAC
identification number listed on the Pre-Penalty Notice. The response
must be sent to OFAC's Enforcement Division by mail or courier or email
and must be postmarked or
[[Page 15752]]
date-stamped in accordance with paragraph (b)(2) of this section.
(c) Settlement. Settlement discussion may be initiated by OFAC, the
alleged violator, or the alleged violator's authorized representative.
For a description of practices with respect to settlement, see appendix
A to part 501 of this chapter.
(d) Guidelines. Guidelines for the imposition or settlement of
civil penalties by OFAC are contained in appendix A to part 501 of this
chapter.
(e) Representation. A representative of the alleged violator may
act on behalf of the alleged violator, but any oral communication with
OFAC prior to a written submission regarding the specific allegations
contained in the Pre-Penalty Notice must be preceded by a written
letter of representation, unless the Pre-Penalty Notice was served upon
the alleged violator in care of the representative.
0
37. Add Sec. 546.705 to read as follows:
Sec. 546.705 Findings of Violation.
(a) When issued. (1) OFAC may issue an initial Finding of Violation
that identifies a violation if OFAC:
(i) Determines that there has occurred a violation of any provision
of this part, or a violation of the provisions of any regulation,
ruling, instruction, order, directive, or license issued by or pursuant
to the direction or authorization of the Secretary of the Treasury
pursuant to this part or otherwise under the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq);
(ii) Considers it important to document the occurrence of a
violation; and
(iii) Based on the Guidelines contained in appendix A to part 501
of this chapter, concludes that an administrative response is warranted
but that a civil monetary penalty is not the most appropriate response.
(2) An initial Finding of Violation shall be in writing and may be
issued whether or not another agency has taken any action with respect
to the matter. For additional details concerning issuance of a Finding
of Violation, see appendix A to part 501 of this chapter.
(b) Response--(1) Right to respond. An alleged violator has the
right to contest an initial Finding of Violation by providing a written
response to OFAC.
(2) Deadline for response; default determination. A response to an
initial Finding of Violation must be made within 30 days as set forth
in paragraphs (b)(2)(i) and (ii) of this section. The failure to submit
a response within 30 days shall be deemed to be a waiver of the right
to respond, and the initial Finding of Violation will become final and
will constitute final agency action. The violator has the right to seek
judicial review of that final agency action in federal district court.
(i) Computation of time for response. A response to an initial
Finding of Violation must be postmarked or date-stamped by the U.S.
Postal Service (or foreign postal service, if mailed abroad) or courier
service provider (if transmitted to OFAC by courier), or dated if sent
by email, on or before the 30th day after the postmark date on the
envelope in which the initial Finding of Violation was served or date
the Finding of Violation was sent by email. If the initial Finding of
Violation was personally delivered by a non-U.S. Postal Service agent
authorized by OFAC, a response must be postmarked or date-stamped on or
before the 30th day after the date of delivery.
(ii) Extensions of time for response. If a due date falls on a
federal holiday or weekend, that due date is extended to include the
following business day. Any other extensions of time will be granted,
at the discretion of OFAC, only upon specific request to OFAC.
(3) Form and method of response. A response to an initial Finding
of Violation need not be in any particular form, but it must be
typewritten and signed by the alleged violator or a representative
thereof (electronic signature is acceptable), contain information
sufficient to indicate that it is in response to the initial Finding of
Violation, and include the OFAC identification number listed on the
initial Finding of Violation. The response must be sent to OFAC's
Enforcement Division by mail or courier or email and must be postmarked
or date-stamped in accordance with paragraph (b)(2) of this section.
(4) Information that should be included in response. Any response
should set forth in detail why the alleged violator either believes
that a violation of the regulations did not occur and/or why a Finding
of Violation is otherwise unwarranted under the circumstances, with
reference to the General Factors Affecting Administrative Action set
forth in the Guidelines contained in appendix A to part 501 of this
chapter. The response should include all documentary or other evidence
available to the alleged violator that supports the arguments set forth
in the response. OFAC will consider all relevant materials submitted in
the response.
(c) Determination--(1) Determination that a Finding of Violation is
warranted. If, after considering the response, OFAC determines that a
final Finding of Violation should be issued, OFAC will issue a final
Finding of Violation that will inform the violator of its decision. A
final Finding of Violation shall constitute final agency action. The
violator has the right to seek judicial review of that final agency
action in federal district court.
(2) Determination that a Finding of Violation is not warranted. If,
after considering the response, OFAC determines a Finding of Violation
is not warranted, then OFAC will inform the alleged violator of its
decision not to issue a final Finding of Violation.
Note 1 to paragraph (c)(2). A determination by OFAC that a
final Finding of Violation is not warranted does not preclude OFAC
from pursuing other enforcement actions consistent with the
Guidelines contained in appendix A to part 501 of this chapter.
(d) Representation. A representative of the alleged violator may
act on behalf of the alleged violator, but any oral communication
with OFAC prior to a written submission regarding the specific
alleged violations contained in the initial Finding of Violation
must be preceded by a written letter of representation, unless the
initial Finding of Violation was served upon the alleged violator in
care of the representative.
Subpart H--Procedures. [Amended]
0
38. Revise and republish Sec. 546.802 to read as follows:
Sec. 546.802 Delegation of certain authorities of the Secretary of
the Treasury
Any action that the Secretary of the Treasury is authorized to take
pursuant to Executive Order 13400, Executive Order 14098, and any
further Executive orders relating to the national emergency declared in
Executive Order 13067, may be taken by the Director of OFAC or by any
other person to whom the Secretary of the Treasury has delegated
authority so to act.
Sec. Sec. 546.503, 546.704. [Amended]
0
39. In addition to the amendments set forth above, in 31 CFR part 546,
remove the words ``the Director of the Office of Foreign Assets
Control'' and add, in their place, the words ``OFAC'' in the following
places:
0
a. Section 546.503; and
0
b. Section 546.704.
Sec. Sec. 546.203, 546.204, 546.408, 546.703. [Amended]
0
40. In addition to the amendments set forth above, in 31 CFR part 546,
remove the words ``the Office of Foreign Assets Control'' and add, in
their place, the words ``OFAC'' in the following places:
0
a. Section 546.203(a) and (c);
[[Page 15753]]
0
b. Section 546.204(b);
0
c. Section 546.408; and
0
d. Section 546.703.
Sec. Sec. 546.203, 546.204, 546.406, 546.408, 546.409, 546.504, and
546.506. [Amended]
0
41. In addition to the amendments set forth above, in 31 CFR part 546,
remove the words ``546.201(a)'' and add, in their place, the words
``546.201'' in the following places:
0
a. Section 546.203(a), (c), (d), and (f);
0
b. Section 546.204(a) and (b);
0
c. Section 546.406;
0
d. Section 546.408;
0
e. Section 546.409;
0
f. Section 546.504; and
0
g. Section 546.506.
Bradley T. Smith,
Director, Office of Foreign Assets Control.
[FR Doc. 2024-04500 Filed 3-1-24; 8:45 am]
BILLING CODE 4810-AL-P