Reporting, Procedures and Penalties Regulations, 29055-29062 [2019-13163]

Agencies

• DEPARTMENT OF THE TREASURY
• Office of Foreign Assets Control

[Federal Register Volume 84, Number 120 (Friday, June 21, 2019)]
[Rules and Regulations]
[Pages 29055-29062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13163]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 501


Reporting, Procedures and Penalties Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Interim final rule with request for comments.

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SUMMARY: The Department of the Treasury's Office of Foreign Assets 
Control (OFAC) is issuing this interim final rule to amend the 
Reporting, Procedures and Penalties Regulations (the Regulations) to 
provide updated instructions and incorporate new requirements for 
parties filing reports on blocked property, unblocked property, or 
rejected transactions. In addition, OFAC is revising the licensing 
procedures section of the Regulations to include information regarding 
OFAC's electronic license application procedures and to provide 
additional instructions regarding applications for the release of 
blocked funds. OFAC also is clarifying the rules governing the 
availability of information under the Freedom of Information Act (FOIA) 
for information that is submitted to OFAC pursuant to the Regulations. 
Finally, OFAC is making numerous technical and conforming edits 
throughout the Regulations.

DATES: This interim final rule is effective June 21, 2019. Written 
comments may be submitted on or before July 22, 2019.

ADDRESSES: You may submit comments by any of the following methods:
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions on the website for submitting comments. Refer to Docket 
Number OFAC-2019-0003.
    Fax: Attn: Request for Comments (Amendments to OFAC's Reporting, 
Procedures and Penalties Regulations) 202-622-1759.
    Mail: Attn: Request for Comments (Amendments to OFAC's Reporting, 
Procedures and Penalties Regulations), Office of Foreign Assets 
Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, 
Freedman's Bank Building, Washington, DC 20220. Refer to Docket Number 
OFAC-2019-0003.
    Instructions: All submissions received must include the agency name 
and the Federal Register Doc. number that appears at the end of this 
document. All comments, including attachments and other supporting 
materials, will become part of the public record and subject to public 
disclosure. Sensitive personal information, such as account numbers or 
Social Security numbers, should not be included. Comments generally 
will not be edited to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for 
Licensing, tel.: 202-622-2480, Assistant Director for Regulatory 
Affairs, tel.: 202-622-4855, Assistant Director for Sanctions 
Compliance & Evaluation, tel.: 202-622-2490; or the Department of the 
Treasury's Office of the Chief Counsel (Foreign Assets Control), Office 
of the General Counsel, tel.: 202-622-2410.

SUPPLEMENTARY INFORMATION: 

Background

    The Regulations 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 
six sections of the Regulations.

Reports on Blocked and Unblocked Property

    OFAC is revising Sec.  501.603 of the Regulations, which covers 
reports on blocked property, to provide greater detail regarding the 
information required to be provided to OFAC in connection with blocking 
reports and to expand this section to cover reports on the release of 
property from blocked status (i.e., unblocked property), as well as to 
make certain technical and conforming changes related thereto. As a 
general matter, in the past, when a submitter has not provided 
sufficient information to identify blocked or unblocked property and to 
determine the authority or authorities under which it was blocked or 
unblocked, OFAC has requested follow up information from the submitter, 
sometimes requiring multiple requests. OFAC is expanding the 
information listed in Sec.  501.603 that is required to be submitted in 
reports on blocked property in an effort to clarify what information is 
needed to reduce the need for follow up requests from OFAC and in order 
to lessen the overall reporting burden for submitters.
    Initial blocking reports. The expanded instructions for initial 
blocking reports require submitters to include the following 
information: (1) The name and address of the person holding the blocked 
property and a contact person from whom additional information may be 
obtained; (2) a description of any transaction associated with the 
blocking, including certain identifying information; (3) the associated 
sanctions target(s) whose property is blocked or a reference to the 
relevant written communication from OFAC if there is no associated 
target or that target is unknown; (4) a description of the property 
that is the subject of the blocking and its location; (5) the date the 
property was blocked; (6) the actual, or if unknown, estimated value of 
the property in U.S. Dollars; (7) the legal authority or authorities 
under which the

[[Page 29056]]

property is blocked and the action taken with respect to the property 
(e.g., that the property has been deposited into a new or existing 
blocked, interest-bearing account); and (8) a copy of any payment or 
transfer instructions or other relevant documentation.
    Annual reports of blocked property. In the case of annual reports 
of blocked property, Sec.  501.603 will require submitters to include 
the following information: (1) The name and address of the person 
holding the blocked property and a contact from whom additional 
information may be obtained; (2) the number of accounts or items 
reported in the annual report; (3) the associated sanctions target(s) 
whose property is blocked or a reference to the relevant written 
communication from OFAC if there is no associated target or that target 
is unknown; (4) a description of the property that is the subject of 
the blocking and its location; (5) the date the property was blocked; 
(6) the actual, or if unknown, estimated value of the property in U.S. 
Dollars; and (7) the legal authority or authorities under which the 
property is blocked.
    Annual report format. OFAC is revising Sec.  501.603(b)(2) to 
provide additional information regarding the required format for 
submitting annual reports of blocked property. Specifically, reports 
must be submitted either using the most recent version of Form TDF 90-
22.50, Annual Report of Blocked Property, or by another official 
reporting option, including electronic, as specified by OFAC on its 
website. OFAC is updating Form TDF 90-22.50 in connection with the 
amendment of the Regulations to align the form with the revised 
requirements of the Regulations. The changes to Form TDF 90-22.50 are 
also being made in an effort to reduce the need for follow up requests 
from OFAC in order to lessen the overall reporting burden for 
submitters. Requests to submit the information required pursuant to 
Sec.  501.603(b)(2) in an alternate format will be considered by OFAC 
on a case-by-case basis. OFAC is adding a new requirement for 
submitters of annual reports of blocked property who maintain blocked 
funds in omnibus accounts, requiring that annual reports contain a 
disaggregated list showing each blocked asset contained within the 
omnibus account. This new requirement to include disaggregated 
information in the annual reports begins with the 2020 annual reports, 
which are due no later than September 30, 2020.
    Reports on property that is unblocked. OFAC is incorporating into 
Sec.  501.603 certain requirements regarding reports on the release of 
property from blocked status (i.e., property that is unblocked). These 
reports are only due when specifically required by OFAC, such as when 
they are made a condition of a general or specific license, and must be 
filed within 10 business days from the date such property is unblocked 
or as otherwise specified by OFAC. When a report is required, Sec.  
501.603(b)(3) will now require submitters to include the following 
information: (1) The name and address of the person holding the 
property immediately prior to the property's release from blocked 
status and a contact from whom additional information may be obtained; 
(2) the associated sanctions target(s) whose property had been 
previously blocked or a reference to the relevant written communication 
from OFAC if there is no associated target or that target is unknown; 
(3) a description of the property and its location immediately prior to 
its release from blocked status, including certain required identifying 
information; (4) the date the property was unblocked; (5) the actual, 
or if unknown, estimated value of the property that was released from 
blocked status in U.S. Dollars; (6) the legal authority or authorities 
under which the property was unblocked; and (7) when available, a copy 
of the original blocking report filed with OFAC pursuant to Sec.  
501.603(b)(1). OFAC is making several technical and conforming changes 
throughout Sec.  501.603 to reflect these additional requirements.
    Electronic submission of reports. OFAC is revising Sec.  501.603 to 
allow for the submission of all reports on blocked or unblocked 
property by email, U.S. mail, or any other official reporting option, 
including electronic, as specified by OFAC on its website (https://www.treasury.gov/ofac). OFAC strongly prefers to receive reports made 
pursuant to this section by email or any other official electronic 
reporting option, as specified by OFAC on its website (https://www.treasury.gov/ofac).
    Rules regarding the availability of information. Finally, OFAC is 
adding a new paragraph to Sec.  501.603 to clarify the rules regarding 
the availability of information, under the FOIA. Specifically, 
information provided to OFAC pursuant to Sec.  501.603 is subject to 
the FOIA and, generally, will be released upon the receipt of a valid 
FOIA request, unless OFAC determines that such information should be 
withheld in accordance with an applicable FOIA exemption.

Reports on Rejected Transactions

    OFAC is revising Sec.  501.604, which covers reports on rejected 
transactions, to: Clarify that this section applies broadly to all 
rejected transactions (and not only to rejected funds transfers); 
provide greater detail regarding the information to be provided to OFAC 
in connection with reports on rejected transactions; where to report 
such information; and make certain technical and conforming changes.
    Clarification of scope of transactions to be reported. OFAC is 
replacing references to ``rejected funds transfers'' with references to 
``rejected transactions'' and is adding a definition for the term 
``transactions'' in order to provide additional clarity. Rejected 
transactions covered under this revised section include rejected 
transactions related to wire transfers, trade finance, securities, 
checks, foreign exchange, and goods or services. OFAC also has made a 
number of technical and conforming changes throughout Sec.  501.604 to 
clarify that rejected transaction reporting is not limited to rejected 
funds transfers.
    Information to be included in reports. OFAC is also revising Sec.  
501.604 to provide expanded instructions on the information to be 
submitted in reports on rejected transactions. As a general matter, in 
the past, when a submitter has not provided sufficient information to 
identify a transaction and the authority or authorities under which the 
transaction was rejected, OFAC has requested follow up information from 
the submitter, sometimes requiring multiple requests. OFAC is expanding 
its instructions on the information to be submitted in reports on 
rejected transactions in an effort to reduce the need for follow up 
requests from OFAC and in order to lessen the overall reporting burden 
for submitters. Submitters must now include the following information: 
(1) The name and address of the person that rejected the transaction 
and a contact from whom additional information may be obtained; (2) a 
description of the rejected transaction, including certain required 
identifying information; (3) if applicable, the associated sanctions 
target(s) whose involvement in the transaction has resulted in the 
transaction being rejected and its location, if known; (4) the date the 
transaction was rejected; (5) the actual, or if unknown, estimated 
value of the property in U.S. Dollars; (6) the legal authority or 
authorities under which the transaction was rejected; and (7) a copy of 
any related payment or transfer instructions or other relevant 
documentation.
    Electronic submission of reports. OFAC is revising Sec.  501.604 to 
allow for the submission of rejected transaction reports by email, U.S. 
mail, or any other official reporting option, including

[[Page 29057]]

electronic, as specified by OFAC on its website ((https://www.treasury.gov/ofac). OFAC strongly prefers to receive reports made 
pursuant to this section by email or any other official electronic 
reporting option, as specified by OFAC on its website ((https://www.treasury.gov/ofac).
    Rules regarding the availability of information. Finally, OFAC is 
adding a new paragraph to Sec.  501.604 to clarify the rules regarding 
the availability of information pursuant to the FOIA. Specifically, 
information provided to OFAC pursuant to Sec.  501.604 is subject to 
the FOIA and, generally, will be released upon the receipt of a valid 
FOIA request, unless OFAC determines that such information should be 
withheld in accordance with an applicable FOIA exemption.

Licensing Procedures

    OFAC is revising Sec.  501.801, which describes licensing 
procedures, to include information regarding OFAC's electronic license 
application procedures and to make a number of technical and conforming 
changes. Specifically, OFAC is revising Sec.  501.801 to require that 
applications for specific licenses to engage in any transactions 
otherwise prohibited pursuant to 31 CFR chapter V or sanctions programs 
administered by OFAC be filed through OFAC's Reporting and License 
Application Forms page (https://licensing.ofac.treas.gov/) or by mail. 
Applications for the unblocking of funds must be submitted by one of 
these means using Form TD-F 90-22.54, ``Application for the Release of 
Blocked Funds,'' or in another format that contains all of the 
information requested in Form TD-F 90-22.54. Form TD-F 90-22.54 may be 
obtained from OFAC's Reporting and License Application Forms page. OFAC 
also is revising this section to remove the provision governing 
registration for non-governmental organizations, as this process has 
been phased out in favor of standard licensing procedures. In addition, 
OFAC is revising this section to clarify the rules governing the 
availability, under the FOIA, of information submitted to OFAC pursuant 
to Sec.  501.801.

Other Technical and Conforming Changes

    OFAC is revising Sec.  501.602, which covers reports to be 
furnished on demand, to provide additional clarity by adding references 
to electronic documents, and adding a new paragraph defining the term 
``document'' for purposes of this section. OFAC is adding a new 
requirement that any persons providing documents to OFAC pursuant to 
Sec.  501.602 must produce the documents in a usable format agreed upon 
by OFAC. To provide guidance as to what will be considered a usable 
format, OFAC is also adding a reference in the regulations to newly 
updated guidance regarding data delivery standards and the submission 
of documents, which is available on OFAC's website (https://www.treasury.gov/ofac).
    In addition, OFAC is revising paragraph (a) of Sec.  501.701, which 
describes penalties for willful violations of the Trading with the 
Enemy Act (TWEA). Specifically, OFAC is adjusting the penalties as 
required by Section 107(a)(4) of the Comprehensive Iran Sanctions, 
Accountability, and Divestment Act of 2010 (Pub. L. 111-195, 124 Stat. 
1312) (CISADA).
    Finally, OFAC is revising Sec.  501.806, which describes procedures 
for unblocking funds believed to have been blocked due to mistaken 
identity, to require a party who believes that funds have been blocked 
due to mistaken identity send requests to release funds to OFAC in 
writing either by U.S. mail or electronically to OFAC's reports email 
address ([email protected]). OFAC is also making a number of 
technical and conforming changes to this section.

Electronic Availability

    This document and additional information concerning OFAC are 
available on OFAC's website (https://www.treasury.gov/ofac).

Public Participation

    These amendments are being published as an interim final rule with 
an effective date of June 21, 2019. Because the amendment of the 
Regulations is a rule of agency procedure and because it involves a 
foreign affairs function, the provisions of Executive Order 12866 and 
the Administrative Procedure Act (5 U.S.C. 553) requiring notice of 
proposed rulemaking, opportunity for public participation, and delay in 
effective date, as well as the provisions of Executive Order 13771, are 
inapplicable. Because no notice of proposed rulemaking is required for 
this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not 
apply. Although notice and comment procedures are not required, OFAC 
invites comments on this interim final rule.

Paperwork Reduction Act

    Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), 
the collections of information related to the existing Regulations have 
been previously approved by the Office of Management and Budget under 
control number 1505-0164. This interim final rule modifies certain of 
the collections of information under the Regulations. Specifically, in 
Sec.  501.603, OFAC is modifying the information to be collected and 
the format and means of submission for reports on blocked property--
both initial reports and annual reports--and is adding requirements 
regarding the information to be collected and the format and means of 
submission for reports on previously blocked property that has been 
unblocked. In Sec.  501.604, OFAC is modifying the information to be 
collected and the format and means of submission for reports on 
rejected transactions. OFAC is also clarifying the breadth of the 
existing requirement for reporting on rejected funds transfers.
    These modifications to the collections of information under the 
Regulations, and certain forms available as a means to report such 
information, have been submitted to the Office of Management and Budget 
(OMB) for review and approval 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.
    The likely respondents and record-keepers affected by these 
collections of information collections contained in part 501 are 
financial institutions, business organizations, nonprofit 
organizations, individuals, and legal representatives.
    Since OFAC's last filing, OFAC has reviewed and revised its 
methodology to more accurately estimate the reporting burden as set 
forth below. The burden of the recordkeeping requirement imposed by 
501.601 is minimal because the records required to be maintained should 
already be maintained under standard business practice.
    Based on a general review of its databases and using OFAC's 
enhanced methodology and updated data, OFAC's estimate for the number 
of unique reporting respondents is approximately 6,900. The estimated 
total annual reporting burden is approximately 14,850 hours. 
Accordingly, the estimated annual hourly burden per respondent is 
approximately 2.2 hours. The estimated annual frequency of responses is 
between 1 and 3,300, varying greatly by entity depending on the size, 
nature, and scope of business activities of each respondent. The 
estimated total number of responses per year is approximately 31,601 
responses.

[[Page 29058]]

OFAC assesses that there is an average time estimate for reports 
associated with forms ranging from 15 minutes to 2 hours and for 
reports associated with general licenses and other miscellaneous 
reports ranging from 1 to 5 hours.
    Comments are invited on: (a) Whether this collection of information 
is necessary for the proper performance of the functions of the agency, 
including whether the information has practical utility; (b) the 
accuracy of the agency's estimate of the burden of the collection of 
information; (c) ways to enhance the quality, utility, and clarity of 
the information to be collected; (d) ways to minimize the burden of the 
collection of information on respondents, including through the use of 
automated collection techniques and other forms of information 
technology; and (e) the estimated capital or start-up costs of the 
operation, maintenance, and/or purchase of services to provide 
information. Comments concerning the above information and the accuracy 
of these burden estimates, and suggestions for reducing this burden, 
should be directed to OMB, Attention: Desk Officer for the Department 
of the Treasury, Office of Information and Regulatory Affairs (OIRA), 
Washington, DC 20503 or by email to: [email protected], with 
a copy to Chief of Records, Attention: Request for Comments, Office of 
Foreign Assets Control, Department of the Treasury, 1500 Pennsylvania 
Avenue NW, Freedman's Bank Building, Washington, DC 20220. Any such 
comments should be submitted not later than July 22, 2019. All comments 
on these collections of information will be a matter of public record.

List of Subjects in 31 CFR Part 501

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

    For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control amends 31 CFR part 501 to 
read as follows:

PART 501--REPORTING, PROCEDURES AND PENALTIES REGULATIONS

0
1. The authority citation for part 501 is revised 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. 4301-4341341; Pub. L. 111-195, 124 Stat. 1312 
(22 U.S.C. 8501-8551).

Subpart C--Reports

0
2. Revise Sec.  501.602 to read as follows:


Sec.  501.602   Reports to be furnished on demand.

    (a) Every person is required to furnish under oath, in the form of 
reports or otherwise, from time to time and at any time as may be 
required by the Office of Foreign Assets Control, complete information 
relative to any act or transaction, regardless of whether such act or 
transaction is effected pursuant to license or otherwise, subject to 
the provisions of this chapter or relative to any property in which any 
foreign country or any national thereof has or had any interest of any 
nature whatsoever, direct or indirect. The Office of Foreign Assets 
Control may require that such reports include the production of any 
books, contracts, letters, papers, or other hard copy or electronic 
documents relating to any such act, transaction, or property, in the 
custody or control of the persons required to make such reports. 
Reports with respect to transactions may be required either before, 
during, or after such transactions. Except as provided in parts 596 and 
597, the Office of Foreign Assets Control may, through any person or 
agency, conduct investigations, hold hearings, administer oaths, 
examine witnesses, receive evidence, take depositions, and require by 
subpoena the attendance and testimony of witnesses and the production 
of any books, contracts, letters, papers, and other hard copy or 
electronic documents relating to any matter under investigation, 
regardless of whether any report has been required or filed in 
connection therewith.
    (b) For purposes of paragraph (a) of this section, the term 
``document'' includes any written, recorded, or graphic matter or other 
means of preserving thought or expression (including in electronic 
format), and all tangible things stored in any medium from which 
information can be processed, transcribed, or obtained directly or 
indirectly, including correspondence, memoranda, notes, messages, 
contemporaneous communications such as text and instant messages, 
letters, emails, spreadsheets, metadata, contracts, bulletins, diaries, 
chronological data, minutes, books, reports, examinations, charts, 
ledgers, books of account, invoices, air waybills, bills of lading, 
worksheets, receipts, printouts, papers, schedules, affidavits, 
presentations, transcripts, surveys, graphic representations of any 
kind, drawings, photographs, graphs, video or sound recordings, and 
motion pictures or other film.
    (c) Persons providing documents to OFAC pursuant to this section 
must produce documents in a usable format agreed upon by OFAC. For 
guidance, see OFAC's data delivery standards available on OFAC's 
website (https://www.treasury.gov/ofac).

    Note 1 to Sec.  501.602:  See subpart F of part 597 for the 
relationship between this section and part 597.


0
3. Revise Sec.  501.603 to read as follows:


Sec.  501.603   Reports on blocked and unblocked property.

    (a) Who must report--(1) Holders of blocked property. Any U.S. 
person (or person subject to U.S. jurisdiction), including a financial 
institution, holding property blocked pursuant to this chapter or 
releasing property from blocked status (i.e., unblocking property) 
pursuant to this chapter shall submit the relevant reports described in 
this section to the Office of Foreign Assets Control (OFAC). This 
requirement applies to all U.S. persons (or persons subject to U.S. 
jurisdiction) who have or have had in their possession or control any 
property blocked pursuant to this chapter, including financial 
institutions that receive and block payments or transfers.
    (2) Primary responsibility to report. A report may be filed on 
behalf of a holder of blocked property or a releaser of property from 
blocked status by an attorney, agent, or other person. Primary 
responsibility for reporting, however, rests with the actual holder or 
releaser of the property, or the person exercising control over 
property located outside the United States, with the following 
exceptions: Primary responsibility for reporting any trust assets rests 
with the trustee; and primary responsibility for reporting real 
property rests with any U.S. co-owner, legal representative, agent, or 
property manager in the United States. No person is excused from filing 
a report by reason of the fact that another person has submitted a 
report with regard to the same property, except upon actual knowledge 
of the report filed by such other person.
    (3) Financial institution. For purposes of this section, the term 
``financial institution'' includes a banking institution, domestic 
bank, United States depository institution, financial institution, or 
U.S. financial institution, as those terms are defined in the 
applicable part of this chapter.
    (b) What must be reported--(1) Initial blocking reports--(i) When 
reports are

[[Page 29059]]

due. Reports shall be filed within 10 business days from the date that 
property becomes blocked.
    (ii) Required information to be reported. Initial reports on 
blocked property shall include the following:
    (A) The name and address of the person holding the property blocked 
pursuant to this chapter (i.e., the person filing the report on blocked 
property, such as a financial institution), and the name, telephone 
number, and email address of a contact from whom additional information 
may be obtained;
    (B) A description of any transaction associated with the blocking, 
including: The type of transaction; any persons, including financial 
institutions, participating in the transaction and their respective 
locations (e.g., if relevant, customers, beneficiaries, originators, 
letter of credit applicants, and their banks; intermediary banks; 
correspondent banks; issuing banks; and advising or confirming banks); 
and any reference numbers, dates, or other information necessary to 
identify the transaction;
    (C) The associated sanctions target(s) whose property is blocked 
(such as a Specially Designated National or other blocked person), the 
location(s) of the target(s) (if known), and, if not evident, a 
narrative description of the interest(s) of the target(s) in the 
property; if there is no target or the target is not known, include a 
reference to the relevant written communication from OFAC pursuant to 
which the blocking action was taken;
    (D) A description of the property that is the subject of the 
blocking and its location in the United States or otherwise, including 
any relevant account numbers and account types, check numbers, 
reference numbers, dates, or other information necessary to identify 
the property;
    (E) The date the property was blocked;
    (F) The actual, or if unknown, estimated value of the property in 
U.S. Dollars. If the blocked property represents an outstanding loan, a 
credit card receivable, or other property with a negative balance, the 
amount blocked should be reported as $0.00 (zero) with the amount owed 
reflected in a narrative description. Blocked trade finance documents 
should also be reported as $0.00 (zero) with the value of the shipment 
reflected in a narrative description. Transactions blocked in foreign 
currencies must be reported in U.S. Dollars with the foreign currency 
amount and notional exchange rate in the narrative;
    (G) The legal authority or authorities under which the property is 
blocked and any action taken with respect to the property (e.g., that 
the property has been deposited into a new or existing blocked, 
interest-bearing account that is labeled as such and is established in 
the name of, or contains a means of clearly identifying the interest 
of, the person subject to blocking pursuant to the requirements of this 
chapter). This may include a reference to the sanctions program 
(current programs are listed here: www.treasury.gov/resource-center/sanctions/SDN-List/Pages/program_tags.aspx), the applicable part of 
this chapter (e.g., 31 CFR part 515, 31 CFR part 544), an Executive 
order (E.O.) (e.g., E.O. 13224, E.O. 13599), or a statute (e.g., 
Foreign Narcotics Kingpin Designation Act). (Note: For this purpose, 
the term ``SDN'' is generic and cannot be used to identify the legal 
authority for blocking property); and
    (H) A copy of any payment or transfer instructions, check, letter 
of credit, accompanying bill of lading, invoice, or any other relevant 
documentation received in connection with any related transaction.
    (2) Annual reports of blocked property--(i) When reports are due. A 
report on all blocked property held as of June 30 of the current year 
shall be filed annually by September 30.
    (ii) Required information to be reported. Annual reports on blocked 
property shall include the following:
    (A) The name and address of the person holding the property blocked 
pursuant to this chapter (i.e., the person filing the report on blocked 
property, such as a financial institution), and the name, telephone 
number, and email address of a contact from whom additional information 
may be obtained;
    (B) The number of accounts or items reported in the annual report;
    (C) Beginning with the annual report due no later than September 
30, 2020, and for each subsequent reporting year, the associated 
sanctions target(s) whose property is blocked, such as a Specially 
Designated National or other blocked person, the location(s) of the 
target(s), if known, and, if not evident, a narrative description of 
the interest(s) of the target(s) in the transaction; if there is no 
target or the target is not known, include a reference to the relevant 
written communication from OFAC pursuant to which the blocking action 
was taken;
    (D) A description of the property that is the subject of the 
blocking and its location in the United States or otherwise, including 
any relevant account numbers and account types, check numbers, 
reference numbers, dates, or other information necessary to identify 
the property;
    (E) The date the property was blocked;
    (F) The actual, or if unknown, estimated value of the property in 
U.S. Dollars as of June 30. If a June 30 value date is not available 
and a value date other than June 30 is reported, so indicate. If the 
blocked property represents an outstanding loan, a credit card 
receivable, or other property with a negative balance, the amount 
blocked should be reported as $0.00 (zero) with the amount owed 
reflected in a narrative description. Blocked trade finance documents 
should also be reported as $0.00 (zero) with the value of the shipment 
reflected in a narrative description. Transactions blocked in foreign 
currencies must be reported in U.S. Dollars with the foreign currency 
amount and notional exchange rate in the narrative; and
    (G) The legal authority or authorities under which the property is 
blocked. This may include a reference to the sanctions program (current 
programs are listed here: www.treasury.gov/resource-center/sanctions/SDN-List/Pages/program_tags.aspx), the applicable part of this chapter 
(e.g., 31 CFR part 515, 31 CFR part 544), an Executive order (E.O.) 
(e.g., E.O. 13224, E.O. 13599), or a statute (e.g., Foreign Narcotics 
Kingpin Designation Act). (Note: For this purpose, the term ``SDN'' is 
generic and cannot be used to identify the legal authority for blocking 
property).
    (iii) Format of annual reports. Annual reports shall be submitted 
to OFAC either using the most recent version of Form TDF 90-22.50, 
Annual Report of Blocked Property, or by another official reporting 
option, including electronic, as specified by OFAC on its website 
(https://www.treasury.gov/ofac). While blocked funds may be maintained 
in omnibus accounts, the annual reports must contain a disaggregated 
list showing each blocked asset contained within the omnibus account. 
Form TDF 90-22.50 may be obtained directly from OFAC by downloading the 
form from the OFAC Reporting and License Application Forms page on 
OFAC's website (https://www.treasury.gov/resource-center/sanctions/Pages/forms-index.aspx). Requests to submit the information required 
pursuant to Sec.  501.603(b)(2)(ii) in an alternative format developed 
by the reporter are invited and will be considered by OFAC on a case-
by-case basis. A copy of reports submitted pursuant to Sec.  
501.603(b)(2) shall be retained for the submitter's records.
    (3) Unblocking reports--(i) When reports are due. These reports are 
only due when specifically required by OFAC, such as when they are made 
a

[[Page 29060]]

condition of a general or specific license, and shall be filed within 
10 business days from the date property is unblocked.
    (ii) Required information to be reported. Reports on the release of 
property from blocked status (i.e., property that is unblocked) shall 
include the following:
    (A) The name and address of the person holding the property 
immediately prior to the property's release from blocked status (i.e., 
the person filing the unblocking report, such as a financial 
institution), and the name, telephone number, and email address of a 
contact from whom additional information may be obtained;
    (B) The associated sanctions target(s) whose property had been 
previously blocked and was released from blocked status, such as a 
Specially Designated National or other blocked person, the location(s) 
of the target(s), if known, and, if not evident, a narrative 
description of the interest(s) of the target(s) in the previously 
blocked property or transaction; if there is no target or the target is 
not known, include a reference to the relevant written communication 
from OFAC pursuant to which the blocking action was taken;
    (C) A description of the property that has been unblocked and its 
location in the United States or otherwise immediately prior to its 
release from blocked status, including any relevant account numbers and 
account types, check numbers, reference numbers, dates, or other 
information necessary to identify the property;
    (D) The date the property was unblocked;
    (E) The actual value of the property that was released from blocked 
status in U.S. Dollars. If the property represented an outstanding 
loan, a credit card receivable, or other property with a negative 
balance, the amount unblocked should be reported as $0.00 (zero) with 
the amount owed reflected in a narrative description. Trade finance 
documents should also be reported as $0.00 (zero) with the value of the 
shipment reflected in a narrative description. Transactions that were 
previously blocked in foreign currencies and were unblocked in a 
foreign currency must be reported in U.S. Dollars with the foreign 
currency amount and notional exchange rate in the narrative;
    (F) The legal authority or authorities under which the property was 
unblocked. This may include, for example, reference to a specific or 
general license under an applicable part of this chapter or an E.O.; 
and
    (G) A copy of the original blocking report filed with OFAC pursuant 
to Sec.  501.603(b)(1), when available.
    (c) Reports on retained funds pursuant to Sec.  596.504(b) of this 
chapter. The reporting requirements set forth in this section are 
applicable to any person retaining funds pursuant to Sec.  596.504(b) 
or releasing such funds.
    (d) Where to report. All reports under this section shall be 
submitted to OFAC using one of the following methods: Email: 
[email protected]; U.S. mail: Office of Foreign Assets Control, 
Sanctions Compliance and Evaluation Division, U.S. Department of the 
Treasury, 1500 Pennsylvania Avenue, NW, Freedman's Bank Building, 
Washington, DC 20220; or any other official reporting option, including 
electronic, as specified by OFAC on its website (https://www.treasury.gov/ofac). OFAC strongly prefers to receive reports made 
pursuant to this section by email or any other official electronic 
reporting option, as specified by OFAC on its website.
    (e) Rules governing availability of information. OFAC records are 
made available to the public in accordance with the Freedom of 
Information Act (FOIA) (5 U.S.C. 552) and the provisions of 31 CFR part 
1. See 31 CFR 1.5 for provisions pertaining to business information. 
Reports on blocked and unblocked property and the information required 
to be reported to OFAC pursuant to this section are subject to the 
FOIA. Information provided to OFAC pursuant to this section generally 
will be released upon the receipt of a valid FOIA request, unless OFAC 
determines that such information should be withheld in accordance with 
an applicable FOIA exemption.

0
4. Revise Sec.  501.604 to read as follows:


Sec.  501.604   Reports on rejected transactions.

    (a) Who must report--(1) Persons rejecting transactions. Any U.S. 
person (or person subject to U.S. jurisdiction), including a financial 
institution, that rejects a transaction that is not blocked under the 
provisions of this chapter, but where processing or engaging in the 
transaction would nonetheless violate a provision contained in this 
chapter, shall submit a report to the Office of Foreign Assets Control 
(OFAC).
    (2) Financial institution. For purposes of this section, the term 
``financial institution'' includes a banking institution, domestic 
bank, United States depository institution, financial institution, or 
U.S. financial institution, as those terms are defined in the 
applicable part of this chapter.
    (3) Transaction. The term transaction includes transactions related 
to wire transfers, trade finance, securities, checks, foreign exchange, 
and goods or services.
    (b) Required information to be reported. Reports on rejected 
transactions shall include the following:
    (1) The name and address of the person that rejected the 
transaction pursuant to this chapter (i.e., the person filing the 
report on the rejected transaction, such as a financial institution), 
and the name and telephone number of a contact from whom additional 
information may be obtained;
    (2) A description of the rejected transaction, including the type 
of transaction; any persons, including financial institutions, 
participating in the transaction and their respective locations (e.g., 
customers, beneficiaries, originators, letter of credit applicants, and 
their banks; intermediary banks; correspondent banks; issuing banks; 
and advising or confirming banks); a description of the property that 
is the subject of the transaction; and any reference numbers, account 
numbers, dates, or other information necessary to identify the 
transaction;
    (3) If applicable, the associated sanctions target(s) whose 
involvement in the transaction has resulted in the transaction being 
rejected, the location(s) of the associated sanctions target(s), if 
known, and, if not evident, a narrative description of the interest(s) 
of the target(s) in the transaction;
    (4) The date the transaction was rejected;
    (5) The actual, or if unknown, estimated value of the property in 
U.S. Dollars. Rejected trade documents should be reported as $0.00 
(zero) with the value of the shipment reflected in a narrative 
description. Rejected transactions in foreign currencies must be 
reported in U.S. Dollars with the foreign currency amount and notional 
exchange rate in a narrative description;
    (6) The legal authority or authorities under which the transaction 
was rejected. This may include a reference to the sanctions program 
(current programs are listed here: www.treasury.gov/resource-center/sanctions/SDN-List/Pages/program_tags.aspx), the applicable part of 
this chapter (e.g., 31 CFR part 515, 31 CFR part 544), an Executive 
Order (E.O.) (e.g., E.O. 13224, E.O. 13599), or a statute (e.g., 
Foreign Narcotics Kingpin Designation Act). (Note: For this purpose, 
the term ``SDN'' is generic and cannot be used to identify the legal 
authority or authorities for rejecting transactions); and

[[Page 29061]]

    (7) A copy of any related payment or transfer instructions, check, 
letter of credit, accompanying bill of lading, invoice, or any other 
relevant documentation received in connection with the transaction.
    (c) When reports are due. Reports shall be filed within 10 business 
days of the rejected transaction prohibited by the provisions of this 
chapter.
    (d) Where to report. Reports under this section shall be submitted 
to OFAC using one of the following methods: Email: 
[email protected]; U.S. mail: Office of Foreign Assets Control, 
Sanctions Compliance and Evaluation Division, U.S. Department of the 
Treasury, 1500 Pennsylvania Avenue, NW, Freedman's Bank Building, 
Washington, DC 20220; or any other official reporting option, including 
electronic, as specified by OFAC on its website (https://www.treasury.gov/ofac). OFAC strongly prefers to receive reports made 
pursuant to this section by email or any other official electronic 
reporting option, as specified by OFAC on its website.
    (e) Rules governing availability of information. OFAC records are 
made available to the public in accordance with the Freedom of 
Information Act (FOIA) (5 U.S.C. 552) and the provisions of 31 CFR part 
1. See 31 CFR 1.5 for provisions pertaining to business information. 
Reports on rejected transactions and the information required to be 
reported to OFAC pursuant to this section are subject to the FOIA. 
Information provided to OFAC pursuant to this section generally will be 
released upon the receipt of a valid FOIA request, unless OFAC 
determines that such information should be withheld in accordance with 
an applicable FOIA exemption.

Subpart D--Trading With the Enemy Act (TWEA) Penalties

0
5. Amend Sec.  501.701 by revising paragraph (a)(1) to read as follows:


Sec.  501.701   Penalties.

    (a) * * *
    (1) Persons who willfully violate any provision of TWEA or any 
license, rule, or regulation issued thereunder, and persons who 
willfully violate, neglect, or refuse to comply with any order of the 
President issued in compliance with the provisions of TWEA shall, upon 
conviction, be fined not more than $1,000,000 or, if an individual, be 
imprisoned for not more than 20 years, or both.
* * * * *

Subpart E--Procedures

0
6. Revise Sec.  501.801 to read as follows:


Sec.  501.801   Licensing.

    (a) General licenses. General licenses may be issued authorizing, 
under appropriate terms and conditions, certain types of transactions 
that are subject to the prohibitions contained in this chapter. General 
licenses also may be issued authorizing, under appropriate terms and 
conditions, certain types of transactions that are subject to 
prohibitions contained in economic sanctions programs the 
implementation and administration of which have been delegated to the 
Director of the Office of Foreign Assets Control (OFAC) but which are 
not yet codified in this chapter. General licenses are set forth in 
subpart E of each part contained in this chapter or made available on 
OFAC's website: https://www.treasury.gov/resourcecenter/sanctions/Programs/Pages/Programs.aspx. It is the policy of OFAC not to grant 
applications for specific licenses authorizing transactions to which 
the provisions of a general license are applicable. Persons availing 
themselves of certain general licenses may be required to file reports 
and statements in accordance with the instructions specified in those 
licenses. Failure to file timely all required information in such 
reports or statements may nullify the authorization otherwise provided 
by the general license and result in apparent violations of the 
applicable prohibitions that may be subject to OFAC enforcement action.
    (b) Specific licenses--(1) General course of procedure. 
Transactions subject to the prohibitions contained in this chapter, or 
to prohibitions the implementation and administration of which have 
been otherwise delegated to the OFAC Director, that are not authorized 
by general license may be effected only under specific license.
    (2) Applications for specific licenses. Applications for specific 
licenses to engage in any transactions prohibited by or pursuant to 
this chapter, or sanctions programs that have been otherwise delegated 
to the OFAC Director for implementation and administration, must be 
signed, either manually or electronically, and filed through OFAC's 
Reporting and License Application Forms page (https://licensing.ofac.treas.gov/) or, if that option is unavailable, by mail, 
addressed to the Office of Foreign Assets Control, Licensing Division, 
U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, 
Freedman's Bank Building, Washington, DC 20220. Applications for the 
unblocking of funds may be submitted via OFAC's Reporting and License 
Application Forms page (https://licensing.ofac.treas.gov/) or, if that 
option is unavailable, by using Form TD-F 90-22.54, ``Application for 
the Release of Blocked Funds,'' or via a submission that otherwise 
contains all of the information provided for in Form TD-F 90-22.54. 
Form TD-F 90-22.54 may be obtained from OFAC's Reporting and License 
Application Forms page, or by mail at the address above.
    (i) Additional conditions. Applicants should submit only one copy 
of a specific license application to OFAC; submitting multiple copies 
may result in processing delays. Any person having an interest in a 
transaction or proposed transaction may file an application for a 
specific license authorizing such a transaction.
    (ii) Information to be supplied. The applicant must supply all 
information specified by relevant instructions (available on OFAC's 
Reporting and License Application Forms page at https://licensing.ofac.treas.gov) and/or forms, and must fully disclose the 
names of all parties who are concerned with or interested in the 
proposed transaction. If the application is filed by an agent, the 
agent must disclose the name of his or her principal(s). Such documents 
as may be relevant shall be attached to each application as a part of 
such application, whether filed electronically or by mail, except that 
documents previously filed with OFAC may, where appropriate, be 
incorporated by reference in such application. Applicants may be 
required to furnish such further information as is deemed necessary to 
assist OFAC in making a determination. Any applicant or other party in 
interest desiring to present additional information may do so at any 
time before or after OFAC makes its decision with respect to the 
application. In unique circumstances, OFAC may determine that an oral 
presentation regarding a license application would assist in OFAC's 
review of the issues involved. Any requests to make such an oral 
presentation must be submitted in writing to the attention of the 
Director, but are rarely granted.
    (3) Issuance of specific license. Specific licenses normally will 
be issued by OFAC. Specific licenses also may be issued by the 
Secretary of the Treasury acting directly or through any specifically 
designated person, agency, or instrumentality.
    (4) Reports under specific licenses. As a condition for the 
issuance of any specific license, the licensee may be

[[Page 29062]]

required to file reports with respect to the transactions authorized by 
the specific license in such form and at such times and places as may 
be prescribed in the license or otherwise. Reports should be sent in 
accordance with the instructions provided in the applicable specific 
license.
    (5) Effect of denial. The denial of a specific license does not 
preclude the reconsideration of an application or the filing of a 
further application. The applicant or any other party in interest may 
at any time request, by written correspondence, reconsideration of the 
denial of an application on the basis of new facts or changed 
circumstances.
    (6) Rules governing availability of information. OFAC records are 
made available to the public in accordance with the Freedom of 
Information Act (FOIA) (5 U.S.C. 552) and the provisions of 31 CFR part 
1. See 31 CFR 1.5 for provisions pertaining to business information. 
License applications submitted to OFAC and specific licenses issued by 
OFAC are subject to the FOIA and generally will be released upon the 
receipt of a valid FOIA request, unless OFAC determines that such 
information should be withheld in accordance with an applicable FOIA 
exemption.

    Note 1 to paragraph (b)(6):  OFAC views information submitted in 
furtherance of an application for a specific license pursuant to 
this paragraph (b) to be required information for purposes of 
Exemption 4 of the FOIA.


0
7. Amend Sec.  501.806 by revising paragraph (b) to read as follows:


Sec.  501.806   Procedures for unblocking funds believed to have been 
blocked due to mistaken identity.

* * * * *
    (b) Requests to release funds which a party believes to have been 
blocked due to mistaken identity must be made in writing and addressed 
to the Office of Foreign Assets Control, Sanctions Compliance & 
Evaluation Division, U.S. Department of the Treasury, 1500 Pennsylvania 
Avenue NW, Freedman's Bank Building, Washington, DC 20220, or sent by 
email to the Sanctions Compliance & Evaluation Division at 
[email protected].
* * * * *

    Dated: June 17, 2019.
Andrea Gacki,
Director, Office of Foreign Assets Control.
[FR Doc. 2019-13163 Filed 6-20-19; 8:45 am]
 BILLING CODE 4810-AL-P