Zimbabwe Sanctions Regulations, 39312-39321 [2014-16111]

Agencies

• DEPARTMENT OF THE TREASURY
• Office of Foreign Assets Control

[Federal Register Volume 79, Number 132 (Thursday, July 10, 2014)]
[Rules and Regulations]
[Pages 39312-39321]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16111]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 541


Zimbabwe 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 adopting as final, with changes, the Zimbabwe 
Sanctions Regulations that previously were published in an interim 
final rule. These changes primarily amend the Zimbabwe Sanctions 
Regulations to implement Executive Order 13391 of November 22, 2005, 
``Blocking Property of Additional Persons Undermining Democratic 
Processes or Institutions in Zimbabwe,'' and Executive Order 13469 of 
July 25, 2008, ``Blocking Property of Additional Persons Undermining 
Democratic Processes or Institutions in Zimbabwe.''

DATES: Effective: July 10, 2014.

FOR FURTHER INFORMATION CONTACT: Assistant Director for Licensing, 
tel.: 202/622-2480, Assistant Director for Policy, tel.: 202/622-6746, 
Assistant Director for Regulatory Affairs, tel.: 202/622-4855, 
Assistant Director for Sanctions Compliance & Evaluation, tel.: 202/
622-2490, OFAC, 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

    OFAC originally issued the Zimbabwe Sanctions Regulations, 31 CFR 
Part 541, on July 29, 2004 (the ``Regulations''), as an interim final 
rule to implement Executive Order 13288 of March 6, 2003, ``Blocking 
Property of Persons Undermining Democratic Processes or Institutions in 
Zimbabwe'' (68 FR 11457, March 10, 2003) (E.O. 13288), effective at 
12:01 eastern standard time on March 7, 2003. In E.O. 13288, the 
President, invoking the authority of, inter alia, the International 
Emergency Economic Powers Act (50 U.S.C. 1701-1706) (IEEPA), determined 
that the actions and policies of certain members of the Government of 
Zimbabwe and other persons to undermine Zimbabwe's democratic processes 
or institutions, contributing to the deliberate breakdown in the rule 
of law in Zimbabwe, to politically motivated violence and intimidation 
in that country, and to political and economic instability in the 
southern African region, constitute an unusual and extraordinary threat 
to the foreign policy of the United States and declared a national 
emergency to deal with that threat. In E.O. 13288, the President 
ordered the blocking, with certain exceptions, of 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 United States persons, including their overseas branches, of: (1) 
The persons listed in the Annex to E.O. 13288; and (2) any person 
determined by the Secretary of the Treasury, in consultation with the 
Secretary of State, to be owned or controlled by, or acting or 
purporting to act directly or indirectly for or on behalf of, any of 
the persons listed in the Annex to E.O. 13288. The property and 
interests in property of these persons may not be transferred, paid, 
exported, withdrawn, or otherwise dealt in.
    OFAC is adopting as a final rule the interim final rule originally 
issued on July 29, 2004 (69 FR 45246), with changes to implement two 
more recent Executive orders and update the Regulations as set forth 
below.
    On November 22, 2005, the President, invoking the authority of, 
inter alia, IEEPA, issued Executive Order 13391 (70 FR 71201, November 
25, 2005) (E.O. 13391), effective at 12:01 a.m. eastern standard time 
on November 23, 2005. In E.O. 13391, the President took additional 
steps with respect to the continued actions and policies of certain 
persons who undermine Zimbabwe's democratic processes or institutions 
and with respect to the national emergency described and declared in 
E.O. 13288.
    Section 1 of E.O. 13391 provides that the Annex to E.O. 13288, 
which contained the names of 77 individuals, is replaced and superseded 
in its entirety by the Annex to E.O. 13391, containing the names of 128 
individuals and 33 entities.
    Section 2 of E.O. 13391 amends E.O. 13288 by renumbering section 6 
of E.O. 13288 as section 8, and by replacing sections 1 through 5 of 
E.O. 13288 with new sections 1 through 7. New section 1(a) of E.O. 
13288, as amended by E.O. 13391 (amended E.O. 13288) 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 United States persons, 
including their overseas branches, of: (1) The persons listed in the 
Annex to amended E.O. 13288; and (2) any person determined by the 
Secretary of the Treasury, in consultation with the Secretary of State: 
(i) To have engaged in actions or policies to undermine Zimbabwe's 
democratic processes or institutions; (ii) to have materially assisted, 
sponsored, or provided financial, material, or technological support 
for, or goods or services in support of, such actions or policies or 
any person whose property and interests in property are blocked 
pursuant to amended E.O. 13288; (iii) to be or have been an immediate 
family member of any person whose property and interests in property 
are blocked pursuant to amended E.O. 13288; or (iv) 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 amended E.O. 13288. The property and 
interests in property of these persons may not be transferred, paid, 
exported, withdrawn, or otherwise dealt in.
    In new section 1(b) of amended E.O. 13288, the President determined 
that the making of donations of certain articles, such as food, 
clothing, and medicine, intended to be used to relieve human suffering, 
as 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 amended E.O. 13288, would seriously 
impair his ability to deal with the national emergency declared in E.O. 
13288. The President, therefore, prohibited the donation of such items 
unless authorized by OFAC.
    New section 1(c) of amended E.O. 13288 replaces old section 2(a) 
and provides that the prohibition on any transaction or dealing in 
blocked property or interests in property includes, but is not limited 
to, 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 amended E.O. 13288, and 
the receipt of any contribution or provision of funds, goods, or 
services from any such person.

[[Page 39313]]

    New sections 2(a) and 2(b) of amended E.O. 13288 renumber old 
sections 2(b) and 2(c), and prohibit any transaction by a United States 
person or within the United States that evades or avoids, has the 
purpose of evading or avoiding, or attempts to violate any of the 
prohibitions set forth in amended E.O. 13288 as well as any conspiracy 
formed to violate such prohibitions.
    New section 5 of amended E.O. 13288 replaces old section 4 and 
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 
amended E.O. 13288. Section 5 of amended E.O. 13288 also provides that 
the Secretary of the Treasury may redelegate any of these functions to 
other officers and agencies of the U.S. Government.
    On July 25, 2008, the President, invoking the authority of, inter 
alia, IEEPA, issued Executive Order 13469 (73 FR 43841, July 29, 2008) 
(E.O. 13469). In E.O. 13469, the President found that the continued 
actions and policies of the Government of Zimbabwe and other persons to 
undermine Zimbabwe's democratic processes or institutions, manifested 
in the fundamentally undemocratic election held on June 27, 2008, to 
commit acts of violence and other human rights abuses against political 
opponents, and to engage in public corruption, including by misusing 
public authority, constitute an unusual and extraordinary threat to the 
foreign policy of the United States. To deal with that threat, the 
President expanded the scope of the national emergency declared in E.O. 
13288 and relied upon for additional steps taken in E.O. 13391.
    Section 1(a) of E.O. 13469 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 United States persons, including their 
overseas branches, of any person determined by the Secretary of the 
Treasury, after consultation with the Secretary of State: (i) To be a 
senior official of the Government of Zimbabwe; (ii) to be owned or 
controlled by, directly or indirectly, the Government of Zimbabwe or an 
official or officials of the Government of Zimbabwe; (iii) to have 
engaged in actions or policies to undermine Zimbabwe's democratic 
processes or institutions; (iv) to be responsible for, or to have 
participated in, human rights abuses related to political repression in 
Zimbabwe; (v) to be engaged in, or to have engaged in, activities 
facilitating public corruption by senior officials of the Government of 
Zimbabwe; (vi) to be a spouse or dependent child of any person whose 
property and interests in property are blocked pursuant to E.O. 13288, 
E.O. 13391, or E.O. 13469; (vii) to have materially assisted, 
sponsored, or provided financial, material, logistical or technical 
support for, or goods or services in support of, the Government of 
Zimbabwe, any senior official thereof, or any person whose property and 
interests in property are blocked pursuant to E.O. 13288, E.O. 13391, 
or E.O. 13469; or (viii) 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. 13288, E.O. 13391, or E.O. 13469. The property and interests in 
property of the persons described above may not be transferred, paid, 
exported, withdrawn, or otherwise dealt in.
    Sections 1(b) and 1(c) of E.O. 13469 contain provisions nearly 
identical to the same sections in amended E.O. 13288. Section 1(d) of 
E.O. 13469 states that the provisions of E.O. 13288 and E.O. 13391 
remain in effect, and that E.O. 13469 does not affect any action taken 
pursuant to those orders. Sections 2 and 5 of E.O. 13469 also contain 
provisions nearly identical to the same sections in amended E.O. 13288.
    OFAC today is amending the Regulations to implement the relevant 
provisions of E.O. 13391 and E.O. 13469, as well as to update certain 
provisions and to make other technical and conforming changes. OFAC is 
revising and republishing in its entirety subpart B of the Regulations, 
which sets forth the prohibitions contained in the Executive orders. In 
particular, OFAC is revising Sec.  541.201 to incorporate the new 
designation criteria provided for in E.O. 13391 and E.O. 13469.
    In subpart C, which defines key terms used throughout the 
Regulations, new Sec. Sec.  541.313 through 541.315 are being added to 
define key terms used in the new blocking prohibitions or elsewhere in 
the Regulations. Also, certain existing definitions in subpart C are 
being updated or revised to take account of new provisions and to 
provide greater clarity with respect to the terms being used.
    This rule also revises and republishes in its entirety subpart D, 
which contains interpretive sections regarding the Regulations. In 
particular, new Sec.  541.408 is being added to clarify prohibitions 
with respect to charitable contributions, and new Sec.  541.411 is 
being added to clarify that a person whose property and interests are 
blocked pursuant to this program 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.
    Transactions otherwise prohibited under 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. This rule also amends subpart E. In particular, a 
general license is being added in Sec.  541.508, authorizing payments 
from outside the United States for the provision of legal services 
authorized in Sec.  541.507. In addition, a general license that 
previously had been posted only on OFAC's Web site is being added in 
Sec.  541.510, authorizing all transactions involving Agricultural 
Development Bank of Zimbabwe and Infrastructure Development Bank of 
Zimbabwe, subject to certain limitations.
    Finally, this rule revises subparts G and H of the Regulations and 
republishes them in their entirety. Subpart G of the Regulations 
describes 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. Subpart H of the Regulations 
refers to subpart E of part 501 for applicable provisions relating to 
administrative procedures and contains a delegation of authority by the 
Secretary of the Treasury.

Public Participation

    Because the amendment of 31 CFR part 541 involves 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 (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-

[[Page 39314]]

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 541

    Administrative practice and procedure, Banks, Banking, Blocking of 
assets, Credit, Foreign Trade, Penalties, Reporting and recordkeeping 
requirements, Securities, Services, Zimbabwe.

    For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control is adopting the interim 
final rule of July 29, 2004 (see 69 FR 45246), as final, with the 
following changes:

PART 541--ZIMBABWE SANCTIONS REGULATIONS

0
1. The authority citation for part 541 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; 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. 13288, 68 
FR 11457, 3 CFR, 2003 Comp., p. 186; E.O. 13391, 70 FR 71201, 3 CFR, 
2005 Comp., p. 206; E.O. 13469, 73 FR 43841, 3 CFR, 2008 Comp., p. 
1025.


0
2. Revise subpart B to read as follows:
Subpart B--Prohibitions
Sec.
541.201 Prohibited transactions involving blocked property.
541.202 Effect of transfers violating the provisions of this part.
541.203 Holding of funds in interest-bearing accounts; investment 
and reinvestment.
541.204 Evasions; attempts; causing violations; conspiracies.
541.205 Expenses of maintaining blocked physical property; 
liquidation of blocked property.
541.206 Exempt transactions.

Subpart B--Prohibitions


Sec.  541.201  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 United States person, including any 
foreign branch, of the following persons are blocked and may not be 
transferred, paid, exported, withdrawn, or otherwise dealt in:
    (1) The persons listed in the Annex to Executive Order 13288 of 
March 6, 2003, as amended by Executive Order 13391 of November 22, 
2005;
    (2) Any person determined by the Secretary of the Treasury, in 
consultation with the Secretary of State:
    (i) To have engaged in actions or policies to undermine Zimbabwe's 
democratic processes or institutions;
    (ii) To have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services in support 
of, actions or policies described in paragraph (a)(2)(i) of this 
section or any person whose property and interests in property are 
blocked pursuant to paragraphs (a)(1) or (a)(2) of this section;
    (iii) To be or have been an immediate family member of any person 
whose property and interest in property are blocked pursuant to 
paragraphs (a)(1) or (a)(2) of this section; or
    (iv) 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) or 
(a)(2) of this section; and
    (3) Any person determined by the Secretary of the Treasury, after 
consultation with the Secretary of State:
    (i) To be a senior official of the Government of Zimbabwe;
    (ii) To be owned or controlled by, directly or indirectly, the 
Government of Zimbabwe or an official or officials of the Government of 
Zimbabwe;
    (iii) To have engaged in actions or policies to undermine 
Zimbabwe's democratic processes or institutions;
    (iv) To be responsible for, or to have participated in, human 
rights abuses related to political repression in Zimbabwe;
    (v) To be engaged in, or to have engaged in, activities 
facilitating public corruption by senior officials of the Government of 
Zimbabwe;
    (vi) To be a spouse or dependent child of any person whose property 
and interests in property are blocked pursuant to paragraph (a) of this 
section;
    (vii) To have materially assisted, sponsored, or provided 
financial, material, logistical, or technical support for, or goods or 
services in support of, the Government of Zimbabwe, any senior official 
thereof, or any person whose property and interests in property are 
blocked pursuant to paragraph (a) of this section; or
    (viii) 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) of this section.

    Note 1 to paragraph (a) of Sec.  541.201:  The names of persons 
listed in or designated pursuant to Executive Order 13288 of March 
6, 2003, Executive Order 13391 of November 22, 2005, or Executive 
Order 13469 of July 25, 2008, whose property and interests in 
property are blocked pursuant to paragraph (a) of this section, are 
published in the Federal Register and incorporated into OFAC's 
Specially Designated Nationals and Blocked Persons List (SDN List) 
with the identifier ``[ZIMBABWE].'' The SDN List is accessible 
through the following page on OFAC'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.  541.411 concerning entities 
that may not be listed on the SDN List but whose property and 
interests in property are nevertheless blocked pursuant to paragraph 
(a) of this section.)


    Note 2 to paragraph (a) of Sec.  541.201:  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 paragraph (a) of this 
section also are published in the Federal Register and incorporated 
into the SDN List with the identifier ``[BPI-ZIMBABWE].''


    Note 3 to paragraph (a) of Sec.  541.201:  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 paragraph (a) of this 
section.

    (b) The prohibitions in paragraph (a) of this section include, but 
are not limited to, prohibitions on the following transactions:
    (1) The making of any contribution or provision of funds, goods, or 
services by, to, or for the benefit of any person whose property and 
interests in property are blocked pursuant to paragraph (a) of this 
section; and
    (2) The receipt of any contribution or provision of funds, goods, 
or services from any person whose property and interests in property 
are blocked pursuant to paragraph (a) of this section.
    (c) Unless authorized by this part or by a specific license 
expressly referring to this 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 paragraph (a) of this 
section is prohibited. 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

[[Page 39315]]

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 transactions are authorized by regulations, orders, 
directives, rulings, instructions, licenses, or otherwise, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date.


Sec.  541.202  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.  
541.201(a), 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 interest.
    (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.  541.201(a), 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, 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, 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 
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 OFAC 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 OFAC 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 OFAC; 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.  541.202:  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 and interests in 
property blocked pursuant to Sec.  541.201(a).


Sec.  541.203  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 OFAC, any U.S. person holding funds, such as 
currency, bank deposits, or liquidated financial obligations, subject 
to Sec.  541.201(a) 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.  541.201(a) 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.  541.201(a) 
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, OFAC may issue licenses 
permitting or directing such sales or liquidation in appropriate cases.
    (h) Funds subject to this section may not be held, invested, or 
reinvested in a manner that provides immediate financial or economic 
benefit or access to any person whose property and interests in 
property are blocked pursuant to Sec.  541.201(a), nor may their holder 
cooperate in or facilitate the pledging or other attempted use as 
collateral of blocked funds or other assets.


Sec.  541.204  Evasions; attempts; causing violations; conspiracies.

    (a) Any transaction by a U.S. person or within the United States 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.

[[Page 39316]]

    (b) Any conspiracy formed to violate any of the prohibitions set 
forth in this part is prohibited.


Sec.  541.205  Expenses of maintaining blocked physical property; 
liquidation of blocked property.

    (a) Except as otherwise authorized, and notwithstanding the 
existence of any rights or obligations conferred or imposed by any 
international agreement or contract entered into or any license or 
permit granted prior to the effective date, all expenses incident to 
the maintenance of physical property blocked pursuant to Sec.  
541.201(a) shall be the responsibility of the owners or operators of 
such property, which expenses shall not be met from blocked funds.
    (b) Property blocked pursuant to Sec.  541.201(a) may, in the 
discretion of OFAC, be sold or liquidated and the net proceeds placed 
in a blocked interest-bearing account in the name of the owner of the 
property.


Sec.  541.206  Exempt transactions.

    (a) Personal communications. The prohibitions contained in this 
part do not apply to any postal, telegraphic, telephonic, or other 
personal communication that does not involve the transfer of anything 
of value.
    (b) Information or informational materials. (1) The prohibitions 
contained in this part do not apply to the importation from any country 
and the exportation to any country of any information or informational 
materials, as defined in Sec.  541.304, whether commercial or 
otherwise, regardless of format or medium of transmission.
    (2) This section does not exempt from regulation or authorize 
transactions related to information or informational materials not 
fully created and in existence at the date of the transactions, or to 
the substantive or artistic alteration or enhancement of informational 
materials, or to the provision of marketing and business consulting 
services. Such prohibited transactions include, but are not limited to, 
payment of advances for information or informational materials not yet 
created and completed (with the exception of prepaid subscriptions for 
widely circulated magazines and other periodical publications); 
provision of services to market, produce or co-produce, create, or 
assist in the creation of information or informational materials; and 
payment of royalties with respect to income received for enhancements 
or alterations made by U.S. persons to such information or 
informational materials.
    (3) This section does not exempt or authorize transactions incident 
to the exportation of software subject to the Export Administration 
Regulations, 15 CFR parts 730-774, or to the exportation of goods 
(including software) or technology for use in the transmission of any 
data, or to the provision, sale, or leasing of capacity on 
telecommunications transmission facilities (such as satellite or 
terrestrial network connectivity) for use in the transmission of any 
data. The exportation of such items or services and the provision, 
sale, or leasing of such capacity or facilities to a person whose 
property and interests in property are blocked pursuant to Sec.  
541.201(a) are prohibited.
    (c) Travel. The prohibitions contained in this part do not apply to 
transactions ordinarily incident to travel to or from any country, 
including importation or exportation of accompanied baggage for 
personal use, maintenance within any country including payment of 
living expenses and acquisition of goods or services for personal use, 
and arrangement or facilitation of such travel, including nonscheduled 
air, sea, or land voyages.

Subpart C--General Definitions

0
3. Add new Sec.  541.300 to read as follows:


Sec.  541.300  Applicability of definitions.

    The definitions in this subpart apply throughout the entire part.

0
4. Revise Sec.  541.301 to read as follows:


Sec.  541.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibitions in Sec.  541.201 held 
in the name of a person whose property and interests in property are 
blocked pursuant to Sec.  541.201(a), 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 to Sec.  541.301:  See Sec.  541.411 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.  541.201(a).


0
5. Revise Sec.  541.302 to read as follows:


Sec.  541.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this part as 
follows:
    (a) Except as set forth in paragraph (c) of this section, with 
respect to a person whose property and interests in property are 
blocked pursuant to Sec.  541.201(a)(1):
    (1) As a result of being listed in the Annex to Executive Order 
13391 of November 22, 2005, and except as provided in paragraph (a)(3) 
of this section, 12:01 a.m. eastern standard time on November 23, 2005;
    (2) As a result of initially being listed in the Annex to Executive 
Order 13288 of March 6, 2003, and subsequently being listed in the 
Annex to Executive Order 13391 of November 22, 2005, 12:01 a.m. eastern 
standard time on March 7, 2003; or
    (3) As a result of a determination pursuant to section 1(b) of 
Executive Order 13288 of March 6, 2003, as originally issued, 
regardless of whether the person was subsequently listed in the Annex 
to Executive Order 13391 of November 22, 2005, the earlier of the date 
of actual or constructive notice that such person's property and 
interests in property are blocked;
    (b) Except as set forth in paragraphs (a) and (c) of this section, 
with respect to a person whose property and interests in property are 
otherwise blocked pursuant to Sec.  541.201(a), the earlier of the date 
of actual or constructive notice that such person's property and 
interests in property are blocked; and
    (c) With respect to the prohibition in Sec.  541.201, as further 
explained in Sec.  541.408, on the making of donations of articles, 
such as food, clothing, and medicine, intended to be used to relieve 
human suffering by, to, or for the benefit of persons whose property 
and interests in property are blocked pursuant to Sec.  541.201(a), the 
later of the effective date as set forth in paragraphs (a) and (b) of 
this section and 12:01 a.m. eastern standard time on November 23, 2005.

0
6. Revise Sec.  541.306 to read as follows:


Sec.  541.306  Licenses; general and specific.

    (a) Except as otherwise provided in this part, the term license 
means any license or authorization contained in or issued pursuant to 
this part.
    (b) The term general license means any license or authorization the 
terms of which are set forth in subpart E of this part or made 
available on OFAC's Web site: www.treasury.gov/ofac.
    (c) The term specific license means any license or authorization 
issued pursuant to this part, but not set forth in subpart E of this 
part or made available on OFAC's Web site: www.treasury.gov/ofac.


[[Page 39317]]


    Note to Sec.  541.306:  See Sec.  501.801 of this chapter on 
licensing procedures.


0
7. Revise Sec.  541.309 to read as follows:


Sec.  541.309  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, filing, 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.

0
8. Revise Sec.  541.311 to read as follows:


Sec.  541.311  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 a loan or other extension of credit, or purchasing or selling 
foreign exchange, securities, 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.

0
9. Add new Sec.  541.313 to read as follows:


Sec.  541.313  Financial, material, or technological support; 
financial, material, logistical, or technical support.

    The terms financial, material, or technological support, and 
financial, material, logistical, or technical support as used in, 
respectively, Sec. Sec.  541.201(a)(2)(ii) and 541.201(a)(3)(vii), mean 
any property, tangible or intangible, including but not limited to 
currency, financial instruments, securities, or any other transmission 
of value; weapons or related materiel; chemical or biological agents; 
explosives; false documentation or identification; communications 
equipment; computers; electronic or other devices or equipment; 
technologies; lodging; safe houses; facilities; vehicles or other means 
of transportation; or goods. ``Technologies'' as used in this 
definition means specific information necessary for the development, 
production, or use of a product, including related technical data such 
as blueprints, plans, diagrams, models, formulae, tables, engineering 
designs and specifications, manuals, or other recorded instructions.

0
10. Add new Sec.  541.314 to read as follows:


Sec.  541.314  Government of Zimbabwe

    The term Government of Zimbabwe means the Government of Zimbabwe, 
its agencies, instrumentalities, and controlled entities.

0
11. Add new Sec.  541.315 to read as follows:


Sec.  541.315  OFAC.

    The term OFAC means the Department of the Treasury's Office of 
Foreign Assets Control.

0
12. Revise subpart D to read as follows:
Subpart D--Interpretations
Sec.
541.401 Reference to amended sections.
541.402 Effect of amendment.
541.403 Termination and acquisition of an interest in blocked 
property.
541.404 Transactions ordinarily incident to a licensed transaction.
541.405 Provision of services.
541.406 Offshore transactions involving blocked property.
541.407 Payments from blocked accounts to satisfy obligations 
prohibited.
541.408 Charitable contributions.
541.409 Credit extended and cards issued by U.S. financial 
institutions to a person whose property and interests in property 
are blocked.
541.410 Setoffs prohibited.
541.411 Entities owned by a person whose property and interests in 
property are blocked.

Subpart D--Interpretations


Sec.  541.401  Reference to amended sections.

    Except as otherwise specified, reference to any provision in or 
appendix to this part or chapter or to any regulation, ruling, order, 
instruction, directive, or license issued pursuant to this part refers 
to the same as currently amended.


Sec.  541.402  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 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 order, regulation, ruling, instruction, or 
license continue and may be enforced as if such amendment, 
modification, or revocation had not been made.


Sec.  541.403  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 whose property and interests in property 
are blocked pursuant to Sec.  541.201(a), such property shall no longer 
be deemed to be property blocked pursuant to Sec.  541.201(a), unless 
there exists in the property another interest that is blocked pursuant 
to Sec.  541.201(a), 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.  541.201(a), such property shall be deemed to be property in which 
such a person has an interest and therefore blocked.


Sec.  541.404  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:

[[Page 39318]]

    (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.  541.201(a); 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) 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.  541.201(a), 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.  541.201(a).


Sec.  541.405  Provision of services.

    (a) The prohibitions on transactions contained in Sec.  541.201 
apply to services performed in the United States or by U.S. persons, 
wherever located, including by a foreign branch of an entity located in 
the United States:
    (1) On behalf of or for the benefit of a person whose property and 
interests in property are blocked pursuant to Sec.  541.201(a); or
    (2) With respect to property interests of any person whose property 
and interests in property are blocked pursuant to Sec.  541.201(a).
    (b) Example. U.S. persons may not, except as authorized by or 
pursuant to this part, provide legal, accounting, financial, brokering, 
freight forwarding, transportation, public relations, or other services 
to a person whose property and interests in property are blocked 
pursuant to Sec.  541.201(a).

    Note to Sec.  541.405:  See Sec. Sec.  541.507 and 541.509 on 
licensing policy with regard to the provision of certain legal and 
emergency medical services.

Sec.  541.406  Offshore transactions involving blocked property.

    The prohibitions in Sec.  541.201 on transactions or dealings 
involving blocked property apply to transactions by any U.S. person in 
a location outside the United States with respect to property held in 
the name of a person whose property and interests in property are 
blocked pursuant to Sec.  541.201(a).


Sec.  541.407  Payments from blocked accounts to satisfy obligations 
prohibited.

    Pursuant to Sec.  541.201, no debits may be made to a blocked 
account to pay obligations to U.S. persons or other persons, except as 
authorized by or pursuant to this part.

    Note to Sec.  541.407:  See also Sec.  541.502(e), which 
provides that 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.

Sec.  541.408  Charitable contributions.

    Unless specifically authorized by OFAC pursuant to this part, no 
charitable contribution of funds, goods, services, or technology, 
including contributions to relieve human suffering, such as food, 
clothing, or medicine, may be made by, to, or for the benefit of, or 
received from, a person whose property and interests in property are 
blocked pursuant to Sec.  541.201(a). For the purposes of this part, a 
contribution is made by, to, or for the benefit of, or received from, a 
person whose property and interests in property are blocked pursuant to 
Sec.  541.201(a) if made by, to, or in the name of, or received from or 
in the name of, such a person; if made by, to, or in the name of, or 
received from or in the name of, an entity or individual acting for or 
on behalf of, or owned or controlled by, such a person; or if made in 
an attempt to violate, to evade, or to avoid the bar on the provision 
of contributions by, to, or for the benefit of such a person, or the 
receipt of contributions from such a person.


Sec.  541.409  Credit extended and cards issued by U.S. financial 
institutions to a person whose property and interests in property are 
blocked.

    The prohibition in Sec.  541.201 on dealing in property subject to 
that section prohibits U.S. financial institutions from performing 
under any existing credit agreements, including, but not limited to, 
charge cards, debit cards, or other credit facilities issued by a U.S. 
financial institution to a person whose property and interests in 
property are blocked pursuant to Sec.  541.201(a).


Sec.  541.410  Setoffs prohibited.

    A setoff against blocked property (including a blocked account), 
whether by a U.S. bank or other U.S. person, is a prohibited transfer 
under Sec.  541.201 if effected after the effective date.


Sec.  541.411  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.  541.201(a) 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.  541.201(a), regardless of whether the name of 
the entity is incorporated into OFAC's Specially Designated Nationals 
and Blocked Persons List (SDN List).

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

0
13. Revise Sec.  541.501 to read as follows:


Sec.  541.501  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 Zimbabwe sanctions page on OFAC's Web site: 
www.treasury.gov/ofac.

0
14. Amend Sec.  541.502 by revising paragraphs (a) and (b) and adding 
new paragraphs (d), (e), and (f) to read as follows:


Sec.  541.502  Effect of license or 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, or license authorizes any 
transaction prohibited under this part unless the regulation, ruling, 
instruction, or license is issued by OFAC and specifically refers to 
this part. No regulation, ruling, instruction, 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, or license specifically refers to such part.
* * * * *
    (d) Nothing contained in this part shall be construed to supersede 
the

[[Page 39319]]

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 which are not prohibited by this 
part or which 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 relevant OFAC general or specific license authorizing the 
payment to avoid the blocking or rejection of the transfer.

0
15. Revise Sec.  541.503 to read as follows:


Sec.  541.503  Exclusion from licenses.

    OFAC 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. OFAC 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.

0
16. Revise Sec.  541.504 to read as follows:


Sec.  541.504  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.  
541.201(a) 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.  541.504: See Sec.  501.603 of this chapter for 
mandatory reporting requirements regarding financial transfers. See 
also Sec.  541.203 concerning the obligation to hold blocked funds 
in interest-bearing accounts.


0
17. Amend Sec.  541.505 by revising paragraph (b) to read as follows:


Sec.  541.505  Entries in certain accounts for normal service charges 
authorized.

* * * * *
    (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.

0
18. Amend Sec.  541.506 by revising paragraph (c) to read as follows:


Sec.  541.506  Investment and reinvestment of certain funds.

* * * * *
    (c) No immediate financial or economic benefit accrues (e.g., 
through pledging or other use) to a person whose property and interests 
in property are blocked pursuant to Sec.  541.201(a).

0
19. Revise Sec.  541.507 to read as follows:


Sec.  541.507  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.  541.201(a) or any further Executive orders relating 
to the national emergency declared in E.O. 13288 of March 6, 2003, is 
authorized, provided that receipt of payment of professional fees and 
reimbursement of incurred expenses must be specifically licensed or 
otherwise authorized pursuant to Sec.  541.508:
    (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 persons whose 
property and interests in property are blocked pursuant to Sec.  
541.201(a) or any further Executive orders relating to the national 
emergency declared in E.O. 13288 of March 6, 2003, 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.  541.201(a) or any further Executive orders 
relating to the national emergency declared in E.O. 13288 of March 6, 
2003, is prohibited unless licensed pursuant to this part.

    Note to Sec.  541.507:  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 a limited 
amount of blocked funds for the payment of legal fees where 
alternative funding sources are not available. For more information, 
see OFAC's Guidance on the Release of Limited Amounts of Blocked 
Funds for Payment of Legal Fees and Costs Incurred in Challenging 
the Blocking of U.S. Persons in Administrative or Civil Proceedings, 
which is available on OFAC's Web site: www.treasury.gov/ofac.

Sec.  541.508  [Redesignated]

0
20. Redesignate Sec.  541.508 as Sec.  541.509.

0
21. Add new Sec.  541.508 to read as follows:


Sec.  541.508  Payments for legal services from funds outside the 
United States authorized.

    Receipts of payment of professional fees and reimbursement of 
incurred expenses for the provision of legal services authorized 
pursuant to Sec.  541.507(a) to or on behalf of any person whose 
property and interests in property are blocked pursuant to

[[Page 39320]]

Sec.  541.201(a) or any further Executive orders relating to the 
national emergency declared in E.O. 13288 of March 6, 2003, are 
authorized from funds originating outside the United States, provided 
that:
    (a) Prior to receiving payment for legal services authorized 
pursuant to Sec.  541.507(a) rendered to persons whose property and 
interests in property are blocked pursuant to Sec.  541.201(a) or any 
further Executive orders relating to the national emergency declared in 
E.O. 13288 of March 6, 2003, the U.S. person that is an attorney, law 
firm, or legal services organization provides to OFAC a copy of a 
letter of engagement or a letter of intent to engage specifying the 
services to be performed and signed by the individual to whom such 
services are to be provided or, where services are to be provided to an 
entity, by a legal representative of the entity. The copy of a letter 
of engagement or a letter of intent to engage, accompanied by 
correspondence referencing this paragraph (a), is to be mailed to: 
Licensing Division, Office of Foreign Assets Control, U.S. Department 
of the Treasury, 1500 Pennsylvania Avenue NW., Annex, Washington, DC 
20220.
    (b) The funds received by U.S. persons as payment of professional 
fees and reimbursement of incurred expenses for the provision of legal 
services authorized pursuant to Sec.  541.507(a) must not originate 
from:
    (1) A source within the United States;
    (2) Any source, wherever located, within the possession or control 
of a U.S. person; or
    (3) Any individual or entity, other than the person on whose behalf 
the legal services authorized pursuant to Sec.  541.507(a) are to be 
provided, whose property and interests in property are blocked pursuant 
to any part of this chapter or any Executive order.

    Note to paragraph (b) of Sec.  541.508:  This paragraph 
authorizes the blocked person on whose behalf the legal services 
authorized pursuant to Sec.  541.507(a) are to be provided to make 
payments for authorized legal services using funds originating 
outside the United States that were not previously blocked. Nothing 
in this paragraph authorizes payments for legal services using funds 
in which any other person whose property and interests in property 
are blocked pursuant to Sec.  541.201(a), any other part of this 
chapter, or any Executive order holds an interest.

    (c) Reports. (1) U.S. persons who receive payments in connection 
with legal services authorized pursuant to Sec.  541.507(a) must submit 
quarterly reports no later than 30 days following the end of the 
calendar quarter during which the payments were received providing 
information on the funds received. Such reports shall specify:
    (i) The individual or entity from whom the funds originated and the 
amount of funds received; and
    (ii) If applicable:
    (A) The names of any individuals or entities providing related 
services to the U.S. person receiving payment in connection with 
authorized legal services, such as private investigators or expert 
witnesses;
    (B) A general description of the services provided; and
    (C) The amount of funds paid in connection with such services.
    (2) In the event that no transactions occur or no funds are 
received during the reporting period, a statement is to be filed to 
that effect; and
    (3) The reports, which must reference this section, are to be 
mailed to: Licensing Division, Office of Foreign Assets Control, U.S. 
Department of the Treasury, 1500 Pennsylvania Avenue NW., Annex, 
Washington, DC 20220.

    Note 1 to Sec.  541.508:  U.S. persons who receive payments in 
connection with legal services authorized pursuant to Sec.  
541.507(a) 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. 
Additionally, U.S. persons do not need to obtain specific 
authorization to provide related services that are ordinarily 
incident to the provision of legal services authorized pursuant to 
Sec.  541.507(a).


0
22. Revise newly redesignated Sec.  541.509 to read as follows:


Sec.  541.509  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services in the 
United States to persons whose property or interests in property are 
blocked pursuant to Sec.  541.201(a) or any further Executive orders 
relating to the national emergency declared in E.O. 13288 of March 6, 
2003, is authorized, provided that all receipt of payment for such 
services must be specifically licensed.

0
23. Add new Sec.  541.510 to read as follows:


Sec.  541.510  Transactions related to Agricultural Development Bank of 
Zimbabwe and Infrastructure Development Bank of Zimbabwe authorized.

    (a) Except as provided in paragraphs (b) and (c) of this section, 
all transactions involving Agricultural Development Bank of Zimbabwe 
and Infrastructure Development Bank of Zimbabwe are authorized.
    (b) This section does not authorize transactions involving any 
person whose property and interests in property are blocked pursuant to 
Sec.  541.201(a), other than Agricultural Development Bank of Zimbabwe 
and Infrastructure Development Bank of Zimbabwe.
    (c) This section does not authorize the unblocking of any property 
and interests in property that were blocked as of April 24, 2013, 
pursuant to 31 C.F.R. Sec.  541.201(a), Executive Order 13288 of March 
6, 2003, Executive Order 13391 of November 22, 2005, or Executive Order 
13469 of July 25, 2008.

0
24. Revise subpart G to read as follows:
Subpart G--Penalties
Sec.
541.701 Penalties.
541.702 Pre-Penalty Notice; settlement.
541.703 Penalty imposition.
541.704 Administrative collection; referral to United States 
Department of Justice.

Subpart G--Penalties


Sec.  541.701  Penalties.

    (a) Attention is directed to section 206 of the International 
Emergency Economic Powers Act (50 U.S.C. 1705) (IEEPA), which is 
applicable to violations of the provisions of any license, ruling, 
regulation, order, directive, or instruction 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 license, 
order, regulation, or prohibition issued under IEEPA.

    Note to paragraph (a)(1) of Sec.  541.701: As of the date of 
publication in the Federal Register of the final rule amending and 
reissuing this part (July 10, 2014), IEEPA provides for a maximum 
civil penalty not to exceed the greater of $250,000 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.

    (2) A person who willfully commits, willfully attempts to commit, 
or willfully conspires to commit, or aids or abets in the commission of 
a violation of any license, order, regulation, 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) Adjustments to penalty amounts. (1) The civil penalties 
provided in IEEPA are subject to adjustment pursuant to the Federal 
Civil Penalties Inflation Adjustment Act of 1990 (Pub.

[[Page 39321]]

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) Attention is also directed to 18 U.S.C. 1001, which provides 
that 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, or imprisoned, or both.
    (d) Violations of this part may also be subject to other applicable 
laws.


Sec.  541.702  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 license, ruling, regulation, order, directive, or 
instruction 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 (IEEPA) 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)(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 the applicable 30-day period set forth in this 
paragraph. The failure to submit a response within the applicable time 
period set forth in this paragraph 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) on or before the 30th day 
after the postmark date on the envelope in which the Pre-Penalty Notice 
was mailed. 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, must 
contain information sufficient to indicate that it is in response to 
the Pre-Penalty Notice, and must include the OFAC identification number 
listed on the Pre-Penalty Notice. A copy of the written response may be 
sent by facsimile, but the original also must be sent to OFAC's 
Enforcement Division by mail or courier and must be postmarked or 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.


Sec.  541.703  Penalty imposition.

    If, after considering any written response to the Pre-Penalty 
Notice and any relevant facts, OFAC determines that there was a 
violation by the alleged violator named in the Pre-Penalty Notice and 
that a civil monetary penalty is appropriate, OFAC may issue a Penalty 
Notice to the violator containing a determination of the violation and 
the imposition of the monetary penalty. For additional details 
concerning issuance of a Penalty Notice, see Appendix A to part 501 of 
this chapter. The issuance of the Penalty Notice shall constitute final 
agency action. The violator has the right to seek judicial review of 
that final agency action in federal district court.


Sec.  541.704  Administrative collection; referral to United States 
Department of Justice.

    In the event that the violator does not pay the penalty imposed 
pursuant to this part or make payment arrangements acceptable to OFAC, 
the matter may be referred for administrative collection measures by 
the Department of the Treasury or to the United States Department of 
Justice for appropriate action to recover the penalty in a civil suit 
in a federal district court.

0
25. Revise subpart H to read as follows:
Subpart H--Procedures
Sec.
541.801 Procedures.
541.802 Delegation by the Secretary of the Treasury.


Sec.  541.801  Procedures.

    For license application procedures and procedures relating to 
amendments, modifications, or revocations of licenses; administrative 
decisions; rulemaking; and requests for documents pursuant to the 
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see 
part 501, subpart E, of this chapter.


Sec.  541.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13288 of March 6, 2003 (E.O. 13288), 
Executive Order 13391 of November 22, 2005, Executive Order 13469 of 
July 25, 2008, and any further Executive orders relating to the 
national emergency declared in E.O. 13288, 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.

    Dated: July 1, 2014.
Barbara C. Hammerle,
Acting Director, Office of Foreign Assets Control.
    Approved: July 2, 2014.

David S. Cohen,
Under Secretary for Terrorism and Financial Intelligence, Department of 
the Treasury.
[FR Doc. 2014-16111 Filed 7-9-14; 8:45 am]
BILLING CODE P