Reporting, Procedures and Penalties Regulations; Transnational Criminal Organizations Sanctions Regulations, 1864-1869 [2012-156]

Agencies

• DEPARTMENT OF THE TREASURY
• Office of Foreign Assets Control

[Federal Register Volume 77, Number 8 (Thursday, January 12, 2012)]
[Rules and Regulations]
[Pages 1864-1869]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-156]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 501 and 590


Reporting, Procedures and Penalties Regulations; Transnational 
Criminal Organizations 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 issuing regulations to implement Executive Order 
13581 of July 24, 2011 (``Blocking Property of Transnational Criminal 
Organizations''). OFAC intends to supplement this part 590 with a more 
comprehensive set of regulations, which may include additional 
interpretive and definitional guidance and additional general licenses 
and statements of licensing policy. OFAC also is amending other 
regulations to clarify the availability of general licenses on OFAC's 
Web site.

DATES: Effective Date: January 12, 2012.

FOR FURTHER INFORMATION CONTACT: Assistant Director for Sanctions, 
Compliance & Evaluations, tel.: (202) 622-2490, Assistant Director for 
Licensing, tel.: (202) 622-2480, Assistant Director for Policy, tel.: 
(202) 622-4855, Office of Foreign Assets Control, or Chief Counsel 
(Foreign Assets Control), tel.: (202) 622-2410, Office of the General 
Counsel, Department of the Treasury (not toll free numbers).

SUPPLEMENTARY INFORMATION: 

Electronic and Facsimile Availability

    This document and additional information concerning OFAC are 
available from OFAC's Web site (www.treasury.gov/ofac). Certain general 
information pertaining to OFAC's sanctions programs also is available 
via facsimile through a 24-hour fax-on-demand service, tel.: (202) 622-
0077.

Background

    On July 24, 2011, the President issued Executive Order 13581 (76 FR 
44757, July 27, 2011) (``E.O. 13581''), invoking the authority of, 
inter alia, the International Emergency Economic Powers Act (50 U.S.C. 
1701 et seq.) and the National Emergencies Act (50 U.S.C. 1601 et 
seq.).
    The Department of the Treasury's Office of Foreign Assets Control 
(``OFAC'') is issuing the Transnational Criminal Organizations 
Sanctions Regulations, 31 CFR part 590 (the ``Regulations''), to 
implement E.O. 13581, pursuant to authorities delegated to the 
Secretary of the Treasury in E.O. 13581. A copy of E.O. 13581 appears 
in appendix A to this part.
    The Regulations are being published in abbreviated form at this 
time for the purpose of providing immediate guidance to the public. 
OFAC intends to supplement this part 590 with a more comprehensive set 
of regulations, which may include additional interpretive and 
definitional guidance and additional general licenses and statements of 
licensing policy. The appendix to the Regulations will be removed when 
OFAC supplements this part with a more comprehensive set of 
regulations.
    The Reporting, Procedures and Penalties Regulations, 31 CFR part 
501, set forth standard reporting and recordkeeping requirements and 
license application and other procedures relevant to the economic 
sanctions programs administered by OFAC. OFAC is updating the 
regulation that describes general licenses to account for the 
availability of such licenses on OFAC's Web site.

Public Participation

    Because the Regulations involve a foreign affairs function, the 
provisions of Executive Order 12866 of September 30, 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 Regulations are 
contained in 31 CFR part 501. 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 501

    Administrative practice and procedure, Banks, Banking, Blocking of 
assets, Foreign trade, Reporting and recordkeeping requirements.

31 CFR Part 590

    Administrative practice and procedure, Banking, Banks, Blocking of 
assets, Brokers, Credit, Foreign trade, Investments, Loans, Securities, 
Services, Transnational Criminal Organizations.

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

PART 501--REPORTING, PROCEDURES AND PENALTIES REGULATIONS

0
1. The authority citation for part 501 continues to read as follows:

    Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, 2339B; 19 U.S.C. 
3901-3913; 21 U.S.C. 1901-1908; 22 U.S.C. 287c; 22 U.S.C. 2370(a), 
6009, 6032, 7205; 28 U.S.C. 2461 note; 31 U.S.C. 321(b); 50 U.S.C. 
1701-1706; 50 U.S.C. App. 1-44.

Subpart E--Procedures

0
2. Revise the second sentence of paragraph (a) of Sec.  501.801 to read 
as follows:


Sec.  501.801  Licensing.

    (a) General Licenses. * * * General licenses are set forth in 
subpart E of each part contained in this chapter, and they also may be 
available through the following page on OFAC's Web site: https://www.treasury.gov/resource-center/sanctions/programs/Pages/Programs.aspx. * * *

[[Page 1865]]


0
3. Add part 590 to read as follows:

PART 590--TRANSNATIONAL CRIMINAL ORGANIZATIONS SANCTIONS 
REGULATIONS

Subpart A--Relation of This Part to Other Laws and Regulations
Sec.
590.101 Relation of this part to other laws and regulations.
Subpart B--Prohibitions
590.201 Prohibited transactions.
590.202 Effect of transfers violating the provisions of this part.
590.203 Holding of funds in interest-bearing accounts; investment 
and reinvestment.
Subpart C--General Definitions
590.301 Blocked account; blocked property.
590.302 Effective date.
590.303 Entity.
590.304 [Reserved]
590.305 [Reserved]
590.306 Interest.
590.307 Licenses; general and specific.
590.308 Person.
590.309 Property; property interest.
590.310 [Reserved]
590.311 Transfer.
590.312 United States.
590.313 U.S. financial institution.
590.314 United States person; U.S. person.
Subpart D--Interpretations
590.401 [Reserved]
590.402 Effect of amendment.
590.403 Termination and acquisition of an interest in blocked 
property.
590.404 Transactions ordinarily incident to a licensed transaction.
590.405 Setoffs prohibited.
590.406 Entities owned by a person whose property and interests in 
property are blocked.
Subpart E--Licenses, Authorizations, and Statements of Licensing Policy
590.501 General and specific licensing procedures.
590.502 [Reserved]
590.503 Exclusion from licenses.
590.504 Payments and transfers to blocked accounts in U.S. financial 
institutions.
590.505 Entries in certain accounts for normal service charges 
authorized.
590.506 Provision of certain legal services authorized.
590.507 Authorization of emergency medical services.
Subpart F--[Reserved]
Subpart G--[Reserved]
Subpart H--Procedures
590.801 [Reserved]
590.802 Delegation by the Secretary of the Treasury.
Subpart I--Paperwork Reduction Act
590.901 Paperwork Reduction Act notice.

Appendix A to Part 590--Executive Order 13581 of July 24, 2011

    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 (28 U.S.C. 2461 note); 
Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); E.O. 13581, 76 
FR 44757, July 27, 2011.

Subpart A--Relation of This Part to Other Laws and Regulations


Sec.  590.101  Relation of this part to other laws and regulations.

    This part is separate from, and independent of, the other parts of 
this chapter, with the exception of part 501 of this chapter, the 
recordkeeping and reporting requirements and license application and 
other procedures of which apply to this part. 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. Differing 
foreign policy and national security circumstances may result in 
differing interpretations of similar language among the parts of this 
chapter. No license or authorization contained in or issued pursuant to 
those other parts authorizes any transaction prohibited by this part. 
No license or authorization contained in or issued pursuant to any 
other provision of law or regulation authorizes any transaction 
prohibited by this part. No license or authorization contained in or 
issued pursuant to this part relieves the involved parties from 
complying with any other applicable laws or regulations.

    Note to Sec.  590.101: This part has been published in 
abbreviated form for the purpose of providing immediate guidance to 
the public. OFAC intends to supplement this part with a more 
comprehensive set of regulations, which may include additional 
interpretive and definitional guidance and additional general 
licenses and statements of licensing policy.

Subpart B--Prohibitions


Sec.  590.201  Prohibited transactions.

    All transactions prohibited pursuant to Executive Order 13581 of 
July 24, 2011 (76 FR 44757, July 27, 2011) are also prohibited pursuant 
to this part.

    Note 1 to Sec.  590.201:  The names of persons listed in or 
designated pursuant to Executive Order 13581, whose property and 
interests in property therefore are blocked pursuant to this 
section, are published in the Federal Register and incorporated into 
the Office of Foreign Assets Control's Specially Designated 
Nationals and Blocked Persons List (``SDN List'') with the 
identifier ``[TCO].'' The SDN List is accessible through the 
following page on the Office of Foreign Assets Control's Web site: 
www.treasury.gov/sdn. Additional information pertaining to the SDN 
List can be found in Appendix A to this chapter. See Sec.  590.406 
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.  590.201:  The International Emergency Economic 
Powers Act (50 U.S.C. 1701-1706), in Section 203 (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 with the 
identifier ``[BPI-TCO].''


    Note 3 to Sec.  590.201: 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.

Sec.  590.202  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, order, directive, 
ruling, instruction, or license issued pursuant to this part, and that 
involves any property or interest in property blocked pursuant to Sec.  
590.201, 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 property interests.
    (b) No transfer before the effective date shall be the basis for 
the assertion or recognition of any right, remedy, power, or privilege 
with respect to, or any interest in, any property or interest in 
property blocked pursuant to Sec.  590.201, unless the person who holds 
or maintains such property, prior to that date, had written notice of 
the transfer or by any written evidence had recognized such transfer.
    (c) Unless otherwise provided, an appropriate license or other 
authorization issued by the Office of Foreign Assets Control 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 the International Emergency Economic Powers 
Act, Executive Order 13581, this part, and any regulation, order, 
directive, ruling, instruction, or license issued pursuant to this 
part.
    (d) Transfers of property that otherwise would be null and void or 
unenforceable by virtue of the provisions of this section shall not be

[[Page 1866]]

deemed to be null and void or unenforceable as to any person with whom 
such property is or was held or maintained (and as to such person only) 
in cases in which such person is able to establish to the satisfaction 
of the Office of Foreign Assets Control each of the following:
    (1) Such transfer did not represent a willful violation of the 
provisions of this part by the person with whom such property is or was 
held or maintained (and as to such person only);
    (2) The person with whom such property is or was held or maintained 
did not have reasonable cause to know or suspect, in view of all the 
facts and circumstances known or available to such person, that such 
transfer required a license or authorization issued pursuant to this 
part and was not so licensed or authorized, or, if a license or 
authorization did purport to cover the transfer, that such license or 
authorization had been obtained by misrepresentation of a third party 
or withholding of material facts or was otherwise fraudulently 
obtained; and
    (3) The person with whom such property is or was held or maintained 
filed with the Office of Foreign Assets Control a report setting forth 
in full the circumstances relating to such transfer promptly upon 
discovery that:
    (i) Such transfer was in violation of the provisions of this part 
or any regulation, ruling, instruction, license, or other directive or 
authorization issued pursuant to this part;
    (ii) Such transfer was not licensed or authorized by the Office of 
Foreign Assets Control; or
    (iii) If a license did purport to cover the transfer, such license 
had been obtained by misrepresentation of a third party or withholding 
of material facts or was otherwise fraudulently obtained.

    Note to paragraph (d) of Sec.  590.202: The filing of a report 
in accordance with the provisions of paragraph (d)(3) of this 
section shall not be deemed evidence that the terms of paragraphs 
(d)(1) and (d)(2) of this section have been satisfied.

    (e) 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 in which, on or 
since the effective date, there existed an interest of a person whose 
property and interests in property are blocked pursuant to Sec.  
590.201.


Sec.  590.203  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 by the Office of Foreign Assets Control, any U.S. 
person holding funds, such as currency, bank deposits, or liquidated 
financial obligations, subject to Sec.  590.201 shall hold or place 
such funds in a blocked interest-bearing account located in the United 
States.
    (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.  590.201 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.  590.201 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 chattels or real estate, 
or of other blocked property, such as debt or equity securities, to 
sell or liquidate such property. However, the Office of Foreign Assets 
Control 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.  590.201, nor may their holder 
cooperate in or facilitate the pledging or other attempted use as 
collateral of blocked funds or other assets.

Subpart C--General Definitions


Sec.  590.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibitions in Sec.  590.201 held 
in the name of a person whose property and interests in property are 
blocked pursuant to Sec.  590.201, 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 an authorization or license from the Office of Foreign 
Assets Control expressly authorizing such action.

    Note to Sec.  590.301: See Sec.  590.406 concerning the blocked 
status of property and interests in property of an entity that is 50 
percent or more owned by a person whose property and interests in 
property are blocked pursuant to Sec.  590.201.

Sec.  590.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this part as 
follows:
    (a) With respect to a person listed in the Annex to Executive Order 
13581, 12:01 a.m. eastern daylight time, July 25, 2011; or
    (b) With respect to a person whose property and interests in 
property are otherwise blocked pursuant to Executive Order 13581, the 
earlier of the date of actual or constructive notice that such person's 
property and interests in property are blocked.


Sec.  590.303  Entity.

    The term entity means a partnership, association, trust, joint 
venture, corporation, group, subgroup, or other organization.


Sec.  590.304  [Reserved]


Sec.  590.305  [Reserved]


Sec.  590.306  Interest.

    Except as otherwise provided in this part, the term interest, when 
used with respect to property (e.g., ``an interest in property''), 
means an interest of any nature whatsoever, direct or indirect.


Sec.  590.307  Licenses; general and specific.

    (a) Except as otherwise specified, the term license means any 
license or authorization contained in or issued pursuant to this part.

[[Page 1867]]

    (b) The term general license means any license or authorization the 
terms of which are set forth in subpart E of this part.
    (c) The term specific license means any license or authorization 
not set forth in subpart E of this part but issued pursuant to this 
part.

    Note to Sec.  590.307: See Sec.  501.801 of this chapter on 
licensing procedures.

Sec.  590.308  Person.

    The term person means an individual or entity.


Sec.  590.309  Property; property interest.

    The terms property and property interest include, but are not 
limited to, money, checks, drafts, bullion, bank deposits, savings 
accounts, debts, indebtedness, obligations, notes, guarantees, 
debentures, stocks, bonds, coupons, any other financial instruments, 
bankers acceptances, mortgages, pledges, liens or other rights in the 
nature of security, warehouse receipts, bills of lading, trust 
receipts, bills of sale, any other evidences of title, ownership or 
indebtedness, letters of credit and any documents relating to any 
rights or obligations thereunder, powers of attorney, goods, wares, 
merchandise, chattels, stocks on hand, ships, goods on ships, real 
estate mortgages, deeds of trust, vendors' sales agreements, land 
contracts, leaseholds, ground rents, real estate and any other interest 
therein, options, negotiable instruments, trade acceptances, royalties, 
book accounts, accounts payable, judgments, patents, trademarks or 
copyrights, insurance policies, safe deposit boxes and their contents, 
annuities, pooling agreements, services of any nature whatsoever, 
contracts of any nature whatsoever, and any other property, real, 
personal, or mixed, tangible or intangible, or interest or interests 
therein, present, future, or contingent.


Sec.  590.310  [Reserved]


Sec.  590.311  Transfer.

    The term transfer means any actual or purported act or transaction, 
whether or not evidenced by writing, and whether or not done or 
performed within the United States, the purpose, intent, or effect of 
which is to create, surrender, release, convey, transfer, or alter, 
directly or indirectly, any right, remedy, power, privilege, or 
interest with respect to any property. Without limitation on the 
foregoing, it shall include the making, execution, or delivery of any 
assignment, power, conveyance, check, declaration, deed, deed of trust, 
power of attorney, power of appointment, bill of sale, mortgage, 
receipt, agreement, contract, certificate, gift, sale, affidavit, or 
statement; the making of any payment; the setting off of any obligation 
or credit; the appointment of any agent, trustee, or fiduciary; the 
creation or transfer of any lien; the issuance, docketing, or filing 
of, or levy of or under, any judgment, decree, attachment, injunction, 
execution, or other judicial or administrative process or order, or the 
service of any garnishment; the acquisition of any interest of any 
nature whatsoever by reason of a judgment or decree of any foreign 
country; the fulfillment of any condition; the exercise of any power of 
appointment, power of attorney, or other power; or the acquisition, 
disposition, transportation, importation, exportation, or withdrawal of 
any security.


Sec.  590.312  United States.

    The term United States means the United States, its territories and 
possessions, and all areas under the jurisdiction or authority thereof.


Sec.  590.313  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, or purchasing or selling foreign exchange, 
securities, or commodity futures or options, or procuring purchasers 
and sellers thereof, as principal or agent. It includes but is not 
limited to depository institutions, banks, savings banks, trust 
companies, securities brokers and dealers, commodity futures and 
options brokers and dealers, forward contract and foreign exchange 
merchants, securities and commodities exchanges, clearing corporations, 
investment companies, employee benefit plans, 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.


Sec.  590.314  United States person; U.S. person.

    The term United States person or U.S. person means any United 
States citizen, permanent resident alien, entity organized under the 
laws of the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States.

Subpart D--Interpretations


Sec.  590.401  [Reserved]


Sec.  590.402  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 order, regulation, ruling, instruction, or 
license issued by the Office of Foreign Assets Control 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 order, 
regulation, ruling, instruction, or license continue and may be 
enforced as if such amendment, modification, or revocation had not been 
made.


Sec.  590.403  Termination and acquisition of an interest in blocked 
property.

    (a) Whenever a transaction licensed or authorized by or pursuant to 
this part results in the transfer of property (including any property 
interest) away from a person, such property shall no longer be deemed 
to be property blocked pursuant to Sec.  590.201, unless there exists 
in the property another interest that is blocked pursuant to Sec.  
590.201, the transfer of which has not been effected pursuant to 
license or other authorization.
    (b) Unless otherwise specifically provided in a license or 
authorization issued pursuant to this part, if property (including any 
property interest) is transferred or attempted to be transferred to a 
person whose property and interests in property are blocked pursuant to 
Sec.  590.201, such property shall be deemed to be property in which 
that person has an interest and therefore blocked.


Sec.  590.404  Transactions ordinarily incident to a licensed 
transaction.

    Any transaction ordinarily incident to a licensed transaction and 
necessary to give effect thereto is also authorized, except:
    (a) 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.  590.201; or
    (b) 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.


Sec.  590.405  Setoffs prohibited.

    A setoff against blocked property (including a blocked account), 
whether

[[Page 1868]]

by a U.S. bank or other U.S. person, is a prohibited transfer under 
Sec.  590.201 if effected after the effective date.


Sec.  590.406  Entities owned by a person whose property and interests 
in property are blocked.

    A person whose property and interests in property are blocked 
pursuant to Sec.  590.201 has an interest in all property and interests 
in property of an entity in which it owns, directly or indirectly, a 50 
percent or greater interest. The property and interests in property of 
such an entity, therefore, are blocked, and such an entity is a person 
whose property and interests in property are blocked pursuant to Sec.  
590.201, regardless of whether the entity itself is listed in the Annex 
or designated pursuant to Executive Order 13581.

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


Sec.  590.501  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 following page on OFAC's Web site: https://www.treasury.gov/resource-center/sanctions/programs/pages/tco.aspx.


Sec.  590.502  [Reserved]


Sec.  590.503  Exclusion from licenses.

    The Office of Foreign Assets Control reserves the right to exclude 
any person, property, transaction, or class thereof from the operation 
of any license or from the privileges conferred by any license. The 
Office of Foreign Assets Control also reserves the right to restrict 
the applicability of any license to particular persons, property, 
transactions, or classes thereof. Such actions are binding upon actual 
or constructive notice of the exclusions or restrictions.


Sec.  590.504  Payments and transfers to blocked accounts in U.S. 
financial institutions.

    Any payment of funds or transfer of credit in which a person whose 
property and interests in property are blocked pursuant to Sec.  
590.201 has any interest that comes within the possession or control of 
a U.S. financial institution must be blocked in an account on the books 
of that financial institution. A transfer of funds or credit by a U.S. 
financial institution between blocked accounts in its branches or 
offices is authorized, provided that no transfer is made from an 
account within the United States to an account held outside the United 
States, and further provided that a transfer from a blocked account may 
be made only to another blocked account held in the same name.

    Note to Sec.  590.504: See Sec.  501.603 of this chapter for 
mandatory reporting requirements regarding financial transfers. See 
also Sec.  590.203 concerning the obligation to hold blocked funds 
in interest-bearing accounts.

Sec.  590.505  Entries in certain accounts for normal service charges 
authorized.

    (a) A U.S. financial institution is authorized to debit any blocked 
account held at that financial institution in payment or reimbursement 
for normal service charges owed it by the owner of that blocked 
account.
    (b) As used in this section, the term normal service charges shall 
include charges in payment or reimbursement for interest due; cable, 
telegraph, Internet, or telephone charges; postage costs; custody fees; 
small adjustment charges to correct bookkeeping errors; and, but not by 
way of limitation, minimum balance charges, notary and protest fees, 
and charges for reference books, photocopies, credit reports, 
transcripts of statements, registered mail, insurance, stationery and 
supplies, and other similar items.


Sec.  590.506  Provision of certain legal services authorized.

    (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.  590.201 is authorized, provided that all receipts of 
payment of professional fees and reimbursement of incurred expenses 
must be specifically licensed:
    (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 domestic U.S. legal, arbitration, or administrative 
proceedings;
    (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 persons whose 
property and interests in property are blocked pursuant to Sec.  
590.201, not otherwise authorized in this part, requires the issuance 
of a specific license.
    (c) 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.  590.201 is prohibited unless licensed 
pursuant to this part.


Sec.  590.507  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services in the 
United States to persons whose property and interests in property are 
blocked pursuant to Sec.  590.201 is authorized, provided that all 
receipt of payment for such services must be specifically licensed.

Subpart F--[Reserved]

Subpart G--[Reserved]

Subpart H--Procedures


Sec.  590.801  [Reserved]


Sec.  590.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13581 of July 24, 2011 (76 FR 44757, July 
27, 2011), and any further Executive orders relating to the national 
emergency declared therein, may be taken by the Director of the Office 
of Foreign Assets Control or by any other person to whom the Secretary 
of the Treasury has delegated authority so to act.

Subpart I--Paperwork Reduction Act


Sec.  590.901  Paperwork Reduction Act notice.

    For approval by the Office of Management and Budget (``OMB'') under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information 
collections relating to recordkeeping and reporting requirements, 
licensing procedures (including those pursuant to statements of 
licensing policy), and other procedures, see Sec.  501.901 of this 
chapter. An agency may not conduct or sponsor, and a person is not 
required to

[[Page 1869]]

respond to, a collection of information unless it displays a valid 
control number assigned by OMB.

Appendix A to Part 590--Executive Order 13581 of July 24, 2011

EXECUTIVE ORDER

* * * * *

Blocking Property of Transnational Criminal Organizations

    By the authority vested in me as President by the Constitution 
and the laws of the United States of America, including the 
International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) 
(IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) 
(NEA), and section 301 of title 3, United States Code,
    I, BARACK OBAMA, President of the United States of America, find 
that the activities of significant transnational criminal 
organizations, such as those listed in the Annex to this order, have 
reached such scope and gravity that they threaten the stability of 
international political and economic systems.
    Such organizations are becoming increasingly sophisticated and 
dangerous to the United States; they are increasingly entrenched in 
the operations of foreign governments and the international 
financial system, thereby weakening democratic institutions, 
degrading the rule of law, and undermining economic markets. These 
organizations facilitate and aggravate violent civil conflicts and 
increasingly facilitate the activities of other dangerous persons. I 
therefore determine that significant transnational criminal 
organizations constitute an unusual and extraordinary threat to the 
national security, foreign policy, and economy of the United States, 
and hereby declare a national emergency to deal with that threat.
    Accordingly, I hereby order:
    Section 1. (a) All property and interests in property that are 
in the United States, that hereafter come within the United States, 
or that are or hereafter come within the possession or control of 
any United States person, including any overseas branch, of the 
following persons are blocked and may not be transferred, paid, 
exported, withdrawn, or otherwise dealt in:
    (i) the persons listed in the Annex to this order and
    (ii) any person determined by the Secretary of the Treasury, in 
consultation with the Attorney General and the Secretary of State:
    (A) to be a foreign person that constitutes a significant 
transnational criminal organization;
    (B) to have materially assisted, sponsored, or provided 
financial, material, or technological support for, or goods or 
services to or in support of, any person whose property and 
interests in property are blocked pursuant to this order; or
    (C) 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 this 
order.
    (b) I hereby determine 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 this order would 
seriously impair my ability to deal with the national emergency 
declared in this order, and I hereby prohibit such donations as 
provided by subsection (a) of this section.
    (c) The prohibitions in subsection (a) of this section include, 
but are not limited to:
    (i) 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 this order; and
    (ii) the receipt of any contribution or provision of funds, 
goods, or services from any such person.
    (d) The prohibitions in subsection (a) of this section apply 
except to the extent provided by statutes, or in regulations, 
orders, directives, or licenses that may be issued pursuant to this 
order, and notwithstanding any contract entered into or any license 
or permit granted prior to the effective date of this order.
    Sec. 2. (a) Any transaction by a United States person or within 
the United States 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 order is prohibited.
    (b) Any conspiracy formed to violate any of the prohibitions set 
forth in this order is prohibited.
    Sec. 3. For the purposes of this order:
    (a) the term ``person'' means an individual or entity;
    (b) the term ``entity'' means a partnership, association, trust, 
joint venture, corporation, group, subgroup, or other organization;
    (c) the term ``United States person'' means any United States 
citizen, permanent resident alien, entity organized under the laws 
of the United States or any jurisdiction within the United States 
(including foreign branches), or any person in the United States;
    (d) the term ``foreign person'' means any citizen or national of 
a foreign state, or any entity organized under the laws of a foreign 
state or existing in a foreign state, including any such individual 
or entity who is also a United States person; and
    (e) the term ``significant transnational criminal organization'' 
means a group of persons, such as those listed in the Annex to this 
order, that includes one or more foreign persons; that engages in an 
ongoing pattern of serious criminal activity involving the 
jurisdictions of at least two foreign states; and that threatens the 
national security, foreign policy, or economy of the United States.
    Sec. 4. For those persons whose property and interests in 
property are blocked pursuant to this order who might have a 
constitutional presence in the United States, I find that because of 
the ability to transfer funds or other assets instantaneously, prior 
notice to such persons of measures to be taken pursuant to this 
order would render these measures ineffectual. I therefore determine 
that for these measures to be effective in addressing the national 
emergency declared in this order, there need be no prior notice of a 
listing or determination made pursuant to section 1(a) of this 
order.
    Sec. 5. The Secretary of the Treasury, in consultation with the 
Attorney General and the Secretary of State, is hereby authorized 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 this order. 
The Secretary of the Treasury may redelegate any of these functions 
to other officers and agencies of the United States Government 
consistent with applicable law. All agencies of the United States 
Government are hereby directed to take all appropriate measures 
within their authority to carry out the provisions of this order.
    Sec. 6. The Secretary of the Treasury, in consultation with the 
Attorney General and the Secretary of State, is hereby authorized to 
submit the recurring and final reports to the Congress on the 
national emergency declared in this order, consistent with section 
401(c) of the NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA 
(50 U.S.C. 1703(c)).
    Sec. 7. The Secretary of the Treasury, in consultation with the 
Attorney General and the Secretary of State, is hereby authorized to 
determine that circumstances no longer warrant the blocking of the 
property and interests in property of a person listed in the Annex 
to this order, and to take necessary action to give effect to that 
determination.
    Sec. 8. This order is not intended to, and does not, create any 
right or benefit, substantive or procedural, enforceable at law or 
in equity by any party against the United States, its departments, 
agencies, or entities, its officers, employees, or agents, or any 
other person.
    Sec. 9. This order is effective at 12:01 a.m. eastern daylight 
time on July 25, 2011.

Barack Obama

THE WHITE HOUSE,
July 24, 2011.

ANNEX

Entities

    1. THE BROTHERS' CIRCLE (f.k.a. FAMILY OF ELEVEN; f.k.a. THE 
TWENTY)
    2. CAMORRA
    3. YAKUZA (a.k.a. BORYOKUDAN; a.k.a. GOKUDO)
    4. LOS ZETAS

    Dated: January 3, 2012.
Adam J. Szubin,
Director, Office of Foreign Assets Control.

    Approved: January 3, 2012.
David S. Cohen,
Under Secretary, Office of Terrorism and Financial Intelligence, 
Department of the Treasury.
[FR Doc. 2012-156 Filed 1-11-12; 8:45 am]
BILLING CODE 4810-AL-P