North Korea Sanctions Regulations, 20158-20163 [2020-07497]
Download as PDF
<![CDATA[
20158
Federal Register / Vol. 85, No. 70 / Friday, April 10, 2020 / Rules and Regulations
Employee’s Expanded Family and
Medical Leave entitlement.
■ 7. In § 826.70, revise the section
heading and paragraph (e) and remove
paragraph (f) to read as follows:
§ 826.70 Leave to care for a child due to
School or Place of Care closure or child
care unavailability—intersection of EFMLEA
and the FMLA.
*
*
*
*
*
(e) An Eligible Employee can take a
maximum of twelve workweeks of
Expanded Family and Medical Leave
during the period in which the leave
may be taken (April 1, 2020 to
December 31, 2020) even if that period
spans two FMLA leave twelve-month
periods. For example, if an Employer’s
twelve-month period begins on July 1,
and an Eligible Employee took seven
weeks of Expanded Family and Medical
Leave in May and June, 2020, the
Eligible Employee could only take up to
five additional weeks of Expanded
Family and Medical Leave between July
1 and December 31, 2020, even though
the first seven weeks of Expanded
Family and Medical Leave fell in the
prior twelve-month period.
■ 8. Revise § 826.100(d) to read as
follows:
§ 826.100
leave.
Documentation of need for
*
*
*
*
*
(d) To take Paid Sick Leave for a
qualifying COVID–19 related reason
under § 826.20(a)(1)(iv) an Employee
must additionally provide the Employer
with either:
(1) The name of the government entity
that issued the Quarantine or Isolation
Order to which the individual being
care for is subject; or
(2) The name of the health care
provider who advised the individual
being cared for to self-quarantine due to
concerns related to COVID–19.
*
*
*
*
*
Signed at Washington, DC, this 8th day of
April, 2020.
Cheryl M. Stanton,
Administrator, Wage and Hour Division.
[FR Doc. 2020–07711 Filed 4–8–20; 4:15 pm]
BILLING CODE 4510–27–P
DEPARTMENT OF THE TREASURY
lotter on DSKBCFDHB2PROD with RULES
Office of Foreign Assets Control
31 CFR Part 510
North Korea Sanctions Regulations
Office of Foreign Assets
Control, Treasury.
ACTION: Final rule.
AGENCY:
VerDate Sep<11>2014
16:16 Apr 09, 2020
Jkt 250001
The Department of the
Treasury’s Office of Foreign Assets
Control (OFAC) is amending the North
Korea Sanctions Regulations to
implement the Treasury-administered
provisions of the North Korea Sanctions
and Policy Enhancement Act of 2016, as
amended by the Countering America’s
Adversaries Through Sanctions Act and
the National Defense Authorization Act
for Fiscal Year 2020. Specifically, OFAC
is incorporating blocking and
correspondent account sanctions
provisions, adding a new prohibition
that is applicable for persons that are
owned or controlled by a U.S. financial
institution and established or
maintained outside the United States,
adding new statutory exemptions
relevant to certain newly added
prohibitions, making technical and
conforming edits to three definitions,
revising an interpretive provision, and
updating the authorities and delegation
sections of the regulations. OFAC is also
amending the definition of luxury
goods.
DATES: This rule is effective April 10,
2020.
FOR FURTHER INFORMATION CONTACT:
OFAC: Assistant Director for Licensing,
tel.: 202–622–2480; Assistant Director
for Regulatory Affairs, tel.: 202–622–
4855; or Assistant Director for Sanctions
Compliance & Evaluation, tel.: 202–622–
2490.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Electronic Availability
This document and additional
information concerning OFAC are
available on OFAC’s website
(www.treasury.gov/ofac).
Background
On November 4, 2010, OFAC issued
the North Korea Sanctions Regulations,
31 CFR part 510 (75 FR 67912,
November 4, 2010) (the ‘‘Regulations’’).
Since then, OFAC has amended the
Regulations several times. This rule
amends the Regulations to incorporate
the Treasury-administered provisions of
the North Korea Sanctions and Policy
Enhancement Act of 2016, Public Law
114–122, 130 Stat. 93 (22 U.S.C. 9201–
9255) (NKSPEA), as amended by the
Countering America’s Adversaries
Through Sanctions Act, Public Law
115–44, 131 Stat. 886 (22 U.S.C. 9201 et
seq.) (CAATSA) and the National
Defense Authorization Act for Fiscal
Year 2020, Public Law 116–92, 133 Stat.
1198 (FY 2020 NDAA).
NKSPEA
On February 18, 2016, the President
signed NKSPEA into law. Among other
PO 00000
Frm 00008
Fmt 4700
Sfmt 4700
things, section 104 of NKSPEA provides
that the President, with certain
exceptions, shall block and prohibit all
transactions in property and interests in
property that are in the United States,
that come within the United States, or
that are or come within control or
possession of a U.S. person of: The
Government of North Korea, the
Workers’ Party of Korea, and other
persons the President determines
knowingly engage in certain North
Korea-related activities.
On August 2, 2017, the President
signed CAATSA into law. Title III of
CAATSA, among other things, amends
NKSPEA. Section 311(a) of CAATSA
amends section 104(a) of NKSPEA to
provide that the President shall, with
certain exceptions, block and prohibit
all transactions in property and interests
in property that are in the United States,
that come into the United States, or that
are or come into the possession of U.S.
persons of any person the President
determines knowingly, directly or
indirectly, imports, exports, or reexports
to or from North Korea any defense
article or defense service or engages in
certain other North Korea-related
activities. Section 104(b) of NKSPEA
provides that the President may, with
certain exceptions, block any person
that knowingly engages in, contributes
to, assists, sponsors, or provides
financial, material, or technological
support for, or goods and services in
support of, any sanctioned person.
On December 20, 2019, the President
signed the FY 2020 NDAA. Title LXXI
of the 2020 NDAA, titled the ‘‘Otto
Warmbier North Korea Sanctions and
Enforcement Act of 2019,’’ among other
things, amends NKSPEA by adding new
sections 104(g), 201B, and 201C.
NKSPEA section 104(g) requires the
President to designate any person that
he determines knowingly engages in
certain specified North Korea-related
activities.
New section 201B of NKSPEA
requires the Secretary of the Treasury to
impose sanctions with respect to any
foreign financial institution (FFI) that
the Secretary of the Treasury
determines, in consultation with the
Secretary of State, knowingly on or after
April 18, 2020, provides significant
financial services to any person
designated for the imposition of
sanctions with respect to North Korea
under NKSPEA subsections 104(a),
104(b), or 104(g), an applicable
Executive order, or an applicable United
Nations Security Council resolution.
Section 201B provides that the Secretary
may impose blocking sanctions on such
FFIs, or may prohibit or impose strict
conditions on the opening or
E:\FR\FM\10APR1.SGM
10APR1
Federal Register / Vol. 85, No. 70 / Friday, April 10, 2020 / Rules and Regulations
maintenance of a correspondent account
or a payable-through account in the
United States.
New section 201C of NKSPEA
requires the Secretary of the Treasury,
in consultation with the Secretary of
State, to prohibit an entity owned or
controlled by a U.S. financial institution
and established or maintained outside
the United States from knowingly
engaging in any transaction, directly or
indirectly, with the Government of
North Korea or any person designated
for the imposition of sanctions with
respect to North Korea under NKSPEA
subsections 104(a), 104(b), or 104(g), an
applicable Executive order, or an
applicable United Nations Security
Council resolution.
lotter on DSKBCFDHB2PROD with RULES
Regulatory Amendments
With this rule, OFAC is incorporating
the blocking and correspondent or
payable-through account sanctions
contained in sections 104(a), 104(b),
104(g), and 201B of NKSPEA, as
amended by CAATSA and the FY 2020
NDAA (NKSPEA, as amended), into the
Regulations as new § 510.201(a)(3)(vii)
through (x), respectively. OFAC is
incorporating the correspondent or
payable-through account sanctions of
section 201B of NKSPEA, as amended,
in § 510.210(c), and adding a new
provision at § 510.214 to implement
section 201C of NKSPEA, as amended.
OFAC is also incorporating certain
statutory exemptions under NKSPEA, as
amended, in new paragraph (f) to
§ 510.213; amending the definition of
luxury goods at § 510.317 to create a
regulatory exception to exclude items
approved for import, export, or reexport
to or into North Korea by the United
Nations Security Council; making
technical and conforming edits to the
definitions of ‘‘effective date’’ in
§ 510.304, ‘‘financial, material, or
technological support’’ in § 510.306, and
‘‘North Korean person’’ in § 510.319;
amending the interpretive provision at
§ 510.413 related to significant
transactions; updating the authorities
section of the Regulations to incorporate
the FY 2020 NDAA and to shorten
citations to conform with Federal
Register guidance; and amending the
delegation section at § 510.802 to add
the delegation of certain functions with
respect to the FY 2020 NDAA.
Public Participation
Because the amendment of the
Regulations 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,
VerDate Sep<11>2014
16:16 Apr 09, 2020
Jkt 250001
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.
Paperwork Reduction Act
The collections of information related
to the Regulations are contained in 31
CFR part 501 (the ‘‘Reporting,
Procedures and Penalties Regulations’’).
Pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3507), those
collections of information have been
approved by the Office of Management
and Budget under control number 1505–
0164. An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless the collection of information
displays a valid control number.
List of Subjects in 31 CFR Part 510
Administrative practice and
procedure, Banks, Banking, Blocking of
assets, Foreign financial institutions,
Foreign trade, Imports, North Korea,
Services, United Nations, Vessels,
Workers’ Party of Korea.
For the reasons set forth in the
preamble, the Department of the
Treasury’s Office of Foreign Assets
Control amends 31 CFR part 510 as
follows:
PART 510—NORTH KOREA
SANCTIONS REGULATIONS
1. The authority citation for part 510
is revised to read as follows:
■
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b);
50 U.S.C. 1601–1651, 1701–1706; 22 U.S.C.
287c; 28 U.S.C. 2461 note; 50 U.S.C. 1705
note; 22 U.S.C. 9201–9255; 22 U.S.C. 9201
note; Pub. L. 116–92, 133 Stat. 1198; E.O.
13466, 73 FR 36787, 3 CFR, 2008 Comp., p.
195; E.O. 13551, 75 FR 53837, 3 CFR, 2010
Comp., p. 242; E.O. 13570, 76 FR 22291, 3
CFR, 2011 Comp., p. 233; E.O. 13687, 80 FR
819, 3 CFR, 2015 Comp., p. 259; E.O. 13722,
81 FR 14943, 3 CFR, 2016 Comp., p. 446; E.O.
13810, 82 FR 44705, 3 CFR, 2017 Comp., p.
379.
Subpart B—Prohibitions
2. Amend § 510.201 as follows:
a. Remove the word ‘‘or’’ at the end
of paragraph (a)(3)(v)(F).
■ b. Remove the period at the end of
paragraph (a)(3)(vi)(B) and add a
semicolon in its place.
■ c. Redesignate Notes 3, 4, and 5 to
paragraph (a) as Notes 4, 5, and 6 to
paragraph (a).
■ d. Add paragraphs (a)(3)(vii) through
(x).
■ e. Revise newly redesignated Note 4 to
paragraph (a).
■
■
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
20159
The additions and revision read as
follows:
§ 510.201 Prohibited transactions
involving blocked property.
(a) * * *
(3) * * *
(vii) Section 104(a) of the North Korea
Sanctions and Policy Enhancement Act
of 2016, as amended by the Countering
America’s Adversaries Through
Sanctions Act and the National Defense
Authorization Act for Fiscal Year 2020
(NKSPEA, as amended). Any person the
Secretary of the Treasury determines, in
consultation with the Secretary of State,
knowingly:
(A) Directly or indirectly, imports,
exports, or reexports to, into, or from
North Korea any goods, services, or
technology controlled for export by the
United States because of the use of such
goods, services, or technology for
weapons of mass destruction or delivery
systems for such weapons and
materially contributes to the use,
development, production, possession, or
acquisition by any person of a nuclear,
radiological, chemical, or biological
weapon or any device or system
designed in whole or in part to deliver
such a weapon;
(B) Directly or indirectly, provides
training, advice, or other services or
assistance, or engages in significant
financial transactions, relating to the
manufacture, maintenance, or use of any
such weapon, device, or system to be
imported, exported, or reexported to,
into, or from North Korea;
(C) Directly or indirectly, imports,
exports, or reexports luxury goods to or
into North Korea;
(D) Engages in, is responsible for, or
facilitates censorship by the
Government of North Korea;
(E) Engages in, is responsible for, or
facilitates serious human rights abuses
by the Government of North Korea;
(F) Directly or indirectly, engages in
money laundering, the counterfeiting of
goods or currency, bulk cash smuggling,
or narcotics trafficking that supports the
Government of North Korea or any
senior official or person acting for or on
behalf of that Government;
(G) Engages in significant activities
undermining cybersecurity through the
use of computer networks or systems
against foreign persons, governments, or
other entities on behalf of the
Government of North Korea;
(H) Directly or indirectly, sells,
supplies, or transfers to or from the
Government of North Korea or any
person acting for or on behalf of that
Government, a significant amount of
precious metal, graphite, raw or semifinished metals or aluminum, steel,
E:\FR\FM\10APR1.SGM
10APR1
lotter on DSKBCFDHB2PROD with RULES
20160
Federal Register / Vol. 85, No. 70 / Friday, April 10, 2020 / Rules and Regulations
coal, or software, for use by or in
industrial processes directly related to
weapons of mass destruction and
delivery systems for such weapons,
other proliferation activities, the Korean
Workers’ Party, armed forces, internal
security or intelligence activities, or the
operation and maintenance of political
prison camps or forced labor camps,
including outside of North Korea;
(I) Directly or indirectly, imports,
exports, or reexports to, into, or from
North Korea any arms or related
materiel or any defense article or
defense service (as such terms are
defined in section 47 of the Arms Export
Control Act (22 U.S.C. 2794));
(J) Directly or indirectly, purchases or
otherwise acquires from North Korea
any significant amounts of gold,
titanium ore, vanadium ore, copper,
silver, nickel, zinc, or rare earth
minerals;
(K) Directly or indirectly, sells or
transfers to North Korea any significant
amounts of rocket, aviation, or jet fuel
(except for use by a civilian passenger
aircraft outside North Korea, exclusively
for consumption during its flight to
North Korea or its return flight);
(L) Directly or indirectly, provides
significant amounts of fuel or supplies,
provides bunkering services, or
facilitates a significant transaction or
transactions to operate or maintain, a
vessel or aircraft that is designated
under an applicable Executive order or
an applicable United Nations Security
Council resolution (as such terms are
defined in NKSPEA, as amended), or
that is owned or controlled by a person
designated under an applicable
Executive order or applicable United
Nations Security Council resolution (as
such terms are defined in NKSPEA, as
amended);
(M) Directly or indirectly, insures,
registers, facilitates the registration of,
or maintains insurance or a registration
for, a vessel owned or controlled by the
Government of North Korea, except as
specifically approved by the United
Nations Security Council;
(N) Directly or indirectly, maintains a
correspondent account as defined in
section 201A(d)(1) of NKSPEA, as
amended, with any North Korean
financial institution, except as
specifically approved by the United
Nations Security Council; or
(O) Attempts to engage in any of the
conduct described in paragraphs
(a)(3)(vii)(A) through (N) of this section;
(viii) Section 104(b) of NKSPEA, as
amended. Any person the Secretary of
the Treasury determines, in consultation
with the Secretary of State, knowingly:
(A) Engages in, contributes to, assists,
sponsors, or provides financial,
VerDate Sep<11>2014
16:16 Apr 09, 2020
Jkt 250001
material, or technological support for, or
goods and services in support of, any
person designated pursuant to: An
applicable United Nations Security
Council resolution (as defined in
NKSPEA, as amended); this section; or
any applicable Executive order (as
defined in NKSPEA, as amended);
(B) Contributed to:
(1) The bribery of an official of the
Government of North Korea or any
person acting for on behalf of that
official;
(2) The misappropriation, theft, or
embezzlement of public funds by, or for
the benefit of, an official of the
Government of North Korea or any
person acting for or on behalf of that
official; or
(3) The use of any proceeds of any
activity described in paragraph
(a)(3)(viii)(B)(1) or (2) of this section;
(C) Materially assisted, sponsored, or
provided significant financial, material,
or technological support for, or goods or
services to or in support of, the
activities described in paragraph
(a)(3)(viii)(A) or (B) of this section;
(D) Directly or indirectly, purchased
or otherwise acquired from the
Government of North Korea significant
quantities of coal, iron, or iron ore, in
excess of the limitations provided in
applicable United Nations Security
Council resolutions (as defined in
NKSPEA, as amended);
(E) Directly or indirectly, purchased
or otherwise acquired significant types
or amounts of textiles from the
Government of North Korea;
(F) Facilitated a significant transfer of
funds or property of the Government of
North Korea that materially contributes
to any violation of an applicable United
Nations Security Council resolution (as
defined in NKSPEA, as amended);
(G) Directly or indirectly, facilitated a
significant transfer to or from the
Government of North Korea of bulk
cash, precious metals, gemstones, or
other stores of value not described
under paragraph (a)(3)(vii)(J) of this
section;
(H) Directly or indirectly, sold,
transferred, or otherwise provided
significant amounts of crude oil,
condensates, refined petroleum, other
types of petroleum or petroleum
byproducts, liquefied natural gas, or
other natural gas resources to the
Government of North Korea (except for
heavy fuel oil, gasoline, or diesel fuel
for humanitarian use or as excepted
under paragraph (a)(3)(vii)(K) of this
section);
(I) Directly or indirectly, engaged in,
facilitated, or was responsible for the
online commercial activities of the
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
Government of North Korea, including
online gambling;
(J) Directly or indirectly, purchased or
otherwise acquired fishing rights from
the Government of North Korea;
(K) Knowingly, directly or indirectly,
purchased or otherwise acquired
significant types or amounts of food or
agricultural products from the
Government of North Korea;
(L) Directly or indirectly, engaged in,
facilitated, or was responsible for the
exportation of workers from North
Korea in a manner intended to generate
significant revenue, directly or
indirectly, for use by the Government of
North Korea or by the Workers’ Party of
Korea;
(M) Conducted a significant
transaction or transactions in North
Korea’s transportation, mining, energy,
or financial services industries; or
(N) Facilitated the operation of any
branch, subsidiary, or office of a North
Korean financial institution, except as
specifically approved by the United
Nations Security Council, and other
than through a correspondent account
as described in paragraph (a)(3)(vii)(N)
of this section;
(ix) Section 104(g) of NKSPEA, as
amended. Any person the Secretary of
the Treasury determines, in consultation
with the Secretary of State, knowingly:
(A) Directly or indirectly, engages in
the importation from or exportation to
North Korea of significant quantities of:
(1) Coal, textiles, seafood, iron, or iron
ore;
(2) Refined petroleum products or
crude oil above limits set by the United
Nations Security Council and with
which the United States concurs; or
(3) Services or technology related to
goods specified in paragraph
(a)(3)(ix)(A)(1) and (2) of this section;
(B) Facilitates a significant transfer of
funds or property of the Government of
North Korea that materially contributes
to any violation of an applicable United
Nations Security Council resolution (as
defined in NKSPEA, as amended);
(C) Directly or indirectly, engages in,
facilitates, or is responsible for the
exportation of workers from North
Korea, or the employment of such
workers, in a manner that generates
significant revenue, directly or
indirectly, for use by the Government of
North Korea or by the Workers’ Party of
Korea;
(D) Directly or indirectly, sells or
transfers a significant number of vessels
to North Korea, except as specifically
approved by the United Nations
Security Council;
(E) Engages in a significant activity to
charter, insure, register, facilitate the
registration of, or maintain insurance or
E:\FR\FM\10APR1.SGM
10APR1
Federal Register / Vol. 85, No. 70 / Friday, April 10, 2020 / Rules and Regulations
a registration for, a vessel owned,
controlled, commanded, or crewed by a
North Korean person; or
(F) Contributes to and participates in:
(1) A significant act of bribery of an
official of the Government of North
Korea or any person acting for or on
behalf of that official;
(2) The misappropriation, theft, or
embezzlement of a significant amount of
public funds by, or for the benefit of, an
official of the Government of North
Korea or any person acting for or on
behalf of that official; or
(3) The use of any proceeds of any
activity described in paragraph
(a)(3)(ix)(A) or (B) of this section; or
(x) Section 201B of NKSPEA, as
amended. Any foreign financial
institution that the Secretary of the
Treasury determines, in consultation
with the Secretary of State, knowingly,
on or after April 18, 2020, provides
significant financial services to any
person designated for the imposition of
sanctions with respect to North Korea
described in paragraphs (a)(3)(vii)
through (ix) of this section and under an
applicable Executive order (as defined
in NKSPEA, as amended) or an
applicable United Nations Security
Council resolution (as defined in
NKSPEA, as amended), and with respect
to which the Secretary of the Treasury
has exercised the authority to block all
property and interests in property.
lotter on DSKBCFDHB2PROD with RULES
Note 3 to paragraph (a)(3)(x): See
§ 510.210(c) for alternative sanctions that can
be imposed on a foreign financial institution
when the determination specified in
paragraph (a)(3)(x) of this section is made.
Note 4 to paragraph (a): The names of
persons listed in or designated or identified
pursuant to E.O. 13551, E.O. 13687, E.O.
13722, or E.O. 13810 and whose property and
interests in property are blocked pursuant to
those orders and who are referenced in
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
following identifiers: for E.O. 13551:
‘‘[DPRK];’’ for E.O. 13687: ‘‘[DPRK2];’’ for
E.O. 13722: ‘‘[DPRK3];’’ and for E.O. 13810:
‘‘[DPRK4].’’ The names of persons designated
or identified pursuant to NKSPEA, as
amended, will be incorporated into the SDN
List with the identifier ‘‘[DPRK–NKSPEA].’’
Certain transactions with persons blocked
pursuant to paragraph (a) of this section, or
blocked pursuant to other parts of 31 CFR
chapter V in connection with North Korearelated activities, may result in the
imposition of secondary sanctions, and
therefore such blocked persons’ entries on
the SDN List will also include the descriptive
prefix text ‘‘Secondary sanctions risk:’’,
followed by information about the applicable
secondary sanctions authority. Pursuant to
§ 510.214, persons owned or controlled by a
U.S. financial institution are subject to
VerDate Sep<11>2014
16:16 Apr 09, 2020
Jkt 250001
certain prohibitions under this part; as a
result, the entries of persons blocked
pursuant to paragraph (a) of this section, or
blocked pursuant to other parts of 31 CFR
chapter V in connection with North Korearelated activities, will also include the
descriptive prefix text ‘‘Transactions
Prohibited For Persons Owned or Controlled
By U.S. Financial Institutions:’’, followed by
information about the applicable sanctions
authority. The SDN List is accessible through
the following page on OFAC’s website:
www.treasury.gov/sdn. Additional
information pertaining to the SDN List can be
found in appendix A to this chapter. See
§ 510.411 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. The property and interests in
property of persons who meet the definition
of the term Government of North Korea, as
defined in § 510.311, are blocked pursuant to
paragraph (a) of this section regardless of
whether the names of such persons are
published in the Federal Register or
incorporated into the SDN List.
3. Amend § 510.210 as follows:
a. In the heading of paragraph (b), add
‘‘prohibited by Executive Order 13810’’
after the word ‘‘institutions’’.
■ b. Remove Note 1 to Paragraph (b).
■ c. Redesignate paragraphs (c) and (d)
as paragraphs (d) and (e).
■ d. Add new paragraph (c).
■ e. In newly redesignated paragraph (d)
introductory text, add ‘‘or (c)’’ after the
words ‘‘paragraph (b)’’.
■ f. Add Note 1 to § 510.210.
The additions read as follows:
■
■
§ 510.210 Prohibitions or strict conditions
with respect to correspondent or payablethrough accounts or blocking of certain
foreign financial institutions identified by
the Secretary of the Treasury.
*
*
*
*
*
(c) Sanctionable activity by foreign
financial institutions prohibited by
NKSPEA, as amended. The Secretary of
the Treasury, in consultation with the
Secretary of State, may determine that a
foreign financial institution has, on or
after April 18, 2020, knowingly
provided significant financial services
to any person designated for the
imposition of sanctions with respect to
North Korea described in
§ 510.201(a)(3)(vii) through (ix) and
under an applicable Executive order (as
defined in NKSPEA, as amended) or an
applicable United Nations Security
Council resolution (as defined in
NKSPEA, as amended).
*
*
*
*
*
Note 1 to § 510.210: For information
regarding persons blocked pursuant to this
part, or another part of 31 CFR chapter V in
connection with North Korea-related
activities, including identifier information for
PO 00000
Frm 00011
Fmt 4700
Sfmt 4700
20161
entries on the SDN List, see Note 4 to
§ 510.201(a).
*
*
*
*
*
4. Amend § 510.213 by adding
paragraph (f) to read as follows:
■
§ 510.213
Exempt transactions.
*
*
*
*
*
(f) Exemptions under the North Korea
Sanctions and Policy Enhancement Act
of 2016, as amended by the Countering
America’s Adversaries Through
Sanctions Act and the National Defense
Authorization Act for Fiscal Year 2020.
The prohibitions contained in
§§ 510.201(a)(3)(vii) through (x),
510.210(c), and 510.214 do not apply to
the following activities:
(1) Activities subject to the reporting
requirements under title V of the
National Security Act of 1947 (50 U.S.C.
3091 et seq.), or to any authorized
intelligence activities of the United
States.
(2) Any transaction necessary to
comply with United States obligations
under the Agreement between the
United Nations and the United States of
America regarding the Headquarters of
the United Nations, signed at Lake
Success June 26, 1947, and entered into
force November 21, 1947, or under the
Convention on Consular Relations, done
at Vienna April 24, 1963, and entered
into force March 19, 1967, or under
other international agreements.
(3) Any activities incidental to the
POW/MIA accounting mission in North
Korea, including activities by the
Defense POW/MIA Accounting Agency
and other governmental or
nongovernmental organizations tasked
with identifying or recovering the
remains of members of the United States
Armed Forces in North Korea.
■ 5. Add § 510.214 to read as follows:
§ 510.214 Prohibitions on persons owned
or controlled by U.S. financial institutions.
Except as otherwise authorized
pursuant to this part, any person that is
owned or controlled by a U.S. financial
institution and established or
maintained outside the United States is
prohibited from knowingly engaging in
any transaction directly or indirectly
with the Government of North Korea or
any person designated for the
imposition of sanctions with respect to
North Korea described in
§ 510.201(a)(3)(vii) through (ix) and
under an applicable Executive order (as
defined in NKSPEA, as amended) or an
applicable United Nations Security
Council resolution (as defined in
NKSPEA, as amended).
Note 1 to § 510.214: For information
regarding persons blocked pursuant to this
E:\FR\FM\10APR1.SGM
10APR1
20162
Federal Register / Vol. 85, No. 70 / Friday, April 10, 2020 / Rules and Regulations
part, or another part of 31 CFR chapter V in
connection with North Korea-related
activities, including identifier information for
entries on the SDN List, see Note 4 to
§ 510.201(a).
Note 2 to § 510.214: A U.S. financial
institution is subject to the civil penalties
provided for in section 206(b) of the
International Emergency Economic Powers
Act (50 U.S.C. 1701 et seq.) if any entity that
it owns or controls violates, attempts to
violate, conspires to violate, or causes a
violation of the prohibitions set forth in this
section. See § 510.701.
§ 510.319
[Amended]
9. In § 510.319(b), remove
‘‘§ 510.201(a)(3)(v)’’ and add in its place
‘‘§ 510.201(a)’’.
■
Subpart C—General Definitions
Subpart D—Interpretations
6. Amend § 510.304 as follows:
a. In paragraph (a)(4), remove the
period at the end of the paragraph and
add in its place a semicolon.
■ b. In paragraph (a)(8), remove the
word ‘‘and’’ after the semicolon.
■ c. In paragraph (a)(9), remove
‘‘§ 510.210’’ everywhere it appears and
add in its place ‘‘§ 510.210(b)’’ and
remove ‘‘such prohibition, condition, or
blocking.’’ and add in its place ‘‘such
prohibition or condition; and’’.
■ d. Add paragraph (a)(10).
■ e. In paragraph (b), add ‘‘, or a notice
of the imposition of a prohibition or
strict condition pursuant to § 510.210,’’
after the words ‘‘interests in property’’.
The addition reads as follows:
■
■
■
§ 510.304
Effective date.
(a) * * *
(10) With respect to the prohibition
set forth in § 510.210(c), April 18, 2020.
The effective date of a prohibition or
strict condition imposed pursuant to
§ 510.210(c) on the opening or
maintaining of a correspondent account
or a payable-through account in the
United States by a U.S. financial
institution for a particular foreign
financial institution is the earlier of the
date the U.S. financial institution
receives actual or constructive notice of
such prohibition or condition.
*
*
*
*
*
§ 510.306
[Amended]
7. In § 510.306, remove
‘‘§ 510.201(a)(3)(ii)(E), (a)(3)(iii)(D),
(a)(3)(iv)(G), and (a)(3)(v)(E),’’ and add
in its place ‘‘§ 510.201(a),’’.
■ 8. Revise § 510.317 to read as follows:
■
§ 510.317
lotter on DSKBCFDHB2PROD with RULES
Enhancement Act of 2016, as amended
by the Countering America’s
Adversaries Through Sanctions Act and
the National Defense Authorization Act
for Fiscal Year 2020), except as
specifically approved by the United
Nations Security Council for import,
export, or reexport to or into North
Korea.
Luxury goods.
The term luxury goods, as used in
§ 510.201(a) includes those items listed
in 15 CFR 746.4(b)(1) and supplement
no. 1 to part 746, similar items, and
items so designated under an applicable
United Nations Security Council
resolution (as defined by the North
Korea Sanctions and Policy
VerDate Sep<11>2014
16:16 Apr 09, 2020
Jkt 250001
10. Revise § 510.413 to read as
follows:
§ 510.413 Significant activity or activities;
significant transaction(s); significant
financial service(s).
In determining, for purposes of
§§ 510.201(a) and 510.210, whether an
activity or activities, transaction(s), or
financial service(s) are significant, the
Secretary of the Treasury or the
Secretary’s designee may consider the
totality of the facts and circumstances.
As a general matter, the Department of
the Treasury may consider some or all
of the following factors:
(a) Size, number, and frequency. The
size, number, and frequency of the
activity or activities, transaction(s), or
financial service(s) conducted or
performed over a period of time,
including whether the activity or
activities, transaction(s), or financial
service(s) are increasing or decreasing
over time and the rate of increase or
decrease.
(b) Nature. The nature of the activity
or activities, transaction(s), or financial
service(s), including the type,
complexity, and commercial purpose of
the activity or activities, transaction(s),
or financial service(s).
(c) Level of awareness; pattern of
conduct. (1) Whether the activity or
activities, transaction(s), or financial
service(s) are performed with the
involvement or approval of management
or only by clerical personnel; and
(2) Whether the activity or activities,
transaction(s), or financial service(s) are
part of a pattern of conduct or the result
of a business development strategy.
(d) Nexus. The proximity between the
foreign financial institution engaging in
the activity or activities, transaction(s),
or financial service(s) and North Korea
or a person blocked pursuant to
§ 510.201, a person sanctioned pursuant
to § 510.210, or trade with North Korea.
(e) Impact. The impact of the activity
or activities, transaction(s), or financial
service(s) on the relevant U.S. sanctions
program objectives including:
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
(1) The economic or other benefit
conferred or attempted to be conferred
on North Korea or a person blocked
pursuant to § 510.201, or sanctioned
pursuant to § 510.210; and
(2) Whether and how the activity or
activities, transaction(s), or financial
service(s) contribute(s) to North Korea’s
nuclear and ballistic missile programs,
commission of serious human rights
abuses, use of funds generated through
international trade to support its nuclear
and missile programs and weapons
proliferation, money laundering and
other illicit activities, procurement of
luxury goods, human rights violations,
and violations of United Nations
Security Council Resolutions.
(f) Deceptive practices. Whether the
activity or activities, transaction(s), or
financial service(s) involve(s) an attempt
to obscure or conceal the actual parties
or true nature of the activity or
activities, transaction(s), or financial
service(s) or to evade sanctions.
(g) Other relevant factors. Such other
factors that the Department of the
Treasury deems relevant on a case-bycase basis in determining the
significance of an activity or activities,
transaction(s), or financial service(s).
Subpart H—Procedures
11. Revise § 510.802 to read as
follows:
■
§ 510.802 Delegation of certain authorities
of the Secretary of the Treasury.
Any action that the Secretary of the
Treasury is authorized to take pursuant
to Executive Order 13466 of June 26,
2008, Executive Order 13551 of August
30, 2010, Executive Order 13570 of
April 18, 2011, Executive Order 13687
of January 2, 2015, Executive Order
13722 of March 15, 2016, Executive
Order 13810 of September 20, 2017, and
any further Executive orders relating to
the national emergency declared in
Executive Order 13466 of June 26, 2008,
and any action that the Secretary of the
Treasury is authorized to take pursuant
to Presidential Memorandum of May 18,
2016: Delegation of Certain Functions
and Authorities under the North Korea
Policy Enhancement Act of 2016,
Presidential Memorandum of September
29, 2017: Delegation of Certain
Functions and Authorities under the
Countering America’s Adversaries
Through Sanctions Act of 2017, the
Ukraine Freedom Support Act of 2014,
and the Support for the Sovereignty,
Integrity, Democracy, and Economic
Stability of Ukraine Act of 2014, and
Presidential Memorandum of February
21, 2020: Delegation of Certain
Functions and Authorities under the
E:\FR\FM\10APR1.SGM
10APR1
Federal Register / Vol. 85, No. 70 / Friday, April 10, 2020 / Rules and Regulations
National Defense Authorization Act for
Fiscal Year 2020, 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: April 6, 2020.
Andrea Gacki,
Director, Office of Foreign Assets Control.
[FR Doc. 2020–07497 Filed 4–9–20; 8:45 am]
BILLING CODE 4810–AL–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 165
[Docket Number USCG–2020–0103]
RIN 1625–AA00
Safety Zone; Ohio River, Troy, IN
Coast Guard, DHS.
Temporary final rule.
AGENCY:
ACTION:
The Coast Guard is
establishing temporary safety zone for
all navigable waters of the Ohio River
from mile marker (MM) 731.0 to MM
734.0. This action is necessary to
provide for the safety of life on these
navigable waters near Troy, IN, during
a wire-crossing event. Entry into,
transiting through, or anchoring within
this zone is prohibited unless
authorized by the Captain of the Port
Sector Ohio Valley (COTP) or a
designated representative.
DATES: This rule is effective from 7 a.m.
on April 14, 2020, through 6 p.m. on
April 23, 2020.
ADDRESSES: To view documents
mentioned in this preamble as being
available in the docket, go to https://
www.regulations.gov, type USCG–2020–
0103 in the ‘‘SEARCH’’ box and click
‘‘SEARCH.’’ Click on Open Docket
Folder on the line associated with this
rule.
FOR FURTHER INFORMATION CONTACT: If
you have questions on this rule, call or
email MST3 Riley Jackson, Waterways
Department Sector Ohio Valley, U.S.
Coast Guard; telephone 502–779–5347,
email SECOHV-WWM@uscg.mil.
SUPPLEMENTARY INFORMATION:
lotter on DSKBCFDHB2PROD with RULES
SUMMARY:
I. Table of Abbreviations
CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
§ Section
U.S.C. United States Code
VerDate Sep<11>2014
16:16 Apr 09, 2020
Jkt 250001
II. Background Information and
Regulatory History
On July 22, 2019, the Coast Guard was
notified of a wire crossing event that
will take place on the Ohio River,
between Mile Marker (MM) 731.0 &
734.0 from 7 a.m. through 6 p.m. each
day from April 14, 2020, through April
23, 2020. The Captain of the Port Sector
Ohio Valley (COTP) has determined that
potential hazards associated with the
wire crossing would be a safety concern
for anyone within a three mile radius of
the construction area. In response, on
February 25, 2020, the Coast Guard
published a notice of proposed
rulemaking (NPRM) titled Safety Zones;
Coast Guard Sector Ohio Valley Wire
Crossing (85 FR 10640). The Coast
Guard invited comments on our
proposed regulatory action related to
this wire crossing. During the comment
period that ended March 26, 2020 no
comments were received.
Under 5 U.S.C. 553(d)(3), the Coast
Guard finds that good cause exists for
making it effective less than 30 days
after publication in the Federal
Register. Delaying the effective date of
this rule would be impracticable and
contrary to the public interest because
immediate action is necessary to
respond to the potential safety hazards
associated with the wire crossing.
III. Legal Authority and Need for Rule
The Coast Guard is issuing this rule
under authority in 46 U.S.C. 70034
(previously 33 U.S.C. 1231). The
Captain of the Port Ohio Valley (COTP)
has determined that potential hazards
associated with the wire crossing
occuring on April 14, 2020 through
April 23, 2020, will be a safety concern
for anyone near the construction zone.
The purpose of this rule is to ensure
safety of vessels and the navigable
waters in the safety zone before, during,
and after the scheduled event.
IV. Discussion of Comments, Changes,
and the Rule
As noted above, no comments were
received on NPRM published February
25, 2020. There are no changes in the
regulatory text of this rule from the
proposed rule in the NPRM.
This rule establishes a safety zone
from 7 a.m. to 6 p.m. each day, April 14,
2020 through April 23, 2020. The
temporary safety zone would cover all
navigable waters on the Ohio River
extending from MM 731.0 to MM 734.0.
The duration of the zone is intended to
ensure the safety of vessels and these
navigable waters before, during, and
after the scheduled 7 a.m. to 6 p.m. wire
crossing. No vessel or person will be
PO 00000
Frm 00013
Fmt 4700
Sfmt 4700
20163
permitted to enter the safety zone
without obtaining permission from the
COTP or a designated representative.
V. Regulatory Analyses
We developed this rule after
considering numerous statutes and
Executive orders related to rulemaking.
Below we summarize our analyses
based on a number of these statutes and
Executive orders, and we discuss First
Amendment rights of protestors.
A. Regulatory Planning and Review
Executive Orders 12866 and 13563
direct agencies to assess the costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits.
Executive Order 13771 directs agencies
to control regulatory costs through a
budgeting process. This rule has not
been designated a ‘‘significant
regulatory action,’’ under Executive
Order 12866. Accordingly, this rule has
not been reviewed by the Office of
Management and Budget (OMB), and
pursuant to OMB guidance it is exempt
from the requirements of Executive
Order 13771.
This regulatory action determination
is based on the size, location, and
duration of the temporary safety zone.
The temporary safety zone would only
be in effect for 11 hours each day over
ten days and limit access to a three-mile
stretch of the Ohio River. The Coast
Guard expects minimum adverse impact
to mariners. Also, mariners would be
permitted to request authorization from
the COTP or a designated representative
to transit the temporary safety zone.
B. Impact on Small Entities
The Regulatory Flexibility Act of
1980, 5 U.S.C. 601–612, as amended,
requires Federal agencies to consider
the potential impact of regulations on
small entities during rulemaking. The
term ‘‘small entities’’ comprises small
businesses, not-for-profit organizations
that are independently owned and
operated and are not dominant in their
fields, and governmental jurisdictions
with populations of less than 50,000.
The Coast Guard received no comments
from the Small Business Administration
on this rulemaking. The Coast Guard
certifies under 5 U.S.C. 605(b) that this
rule will not have a significant
economic impact on a substantial
number of small entities.
While some owners or operators of
vessels intending to transit the safety
zone may be small entities, for the
reasons stated in section V.A above, this
rule will not have a significant
E:\FR\FM\10APR1.SGM
10APR1
]]>Agencies
[Federal Register Volume 85, Number 70 (Friday, April 10, 2020)]
[Rules and Regulations]
[Pages 20158-20163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07497]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 510
North Korea Sanctions Regulations
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of the Treasury's Office of Foreign Assets
Control (OFAC) is amending the North Korea Sanctions Regulations to
implement the Treasury-administered provisions of the North Korea
Sanctions and Policy Enhancement Act of 2016, as amended by the
Countering America's Adversaries Through Sanctions Act and the National
Defense Authorization Act for Fiscal Year 2020. Specifically, OFAC is
incorporating blocking and correspondent account sanctions provisions,
adding a new prohibition that is applicable for persons that are owned
or controlled by a U.S. financial institution and established or
maintained outside the United States, adding new statutory exemptions
relevant to certain newly added prohibitions, making technical and
conforming edits to three definitions, revising an interpretive
provision, and updating the authorities and delegation sections of the
regulations. OFAC is also amending the definition of luxury goods.
DATES: This rule is effective April 10, 2020.
FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for
Licensing, tel.: 202-622-2480; Assistant Director for Regulatory
Affairs, tel.: 202-622-4855; or Assistant Director for Sanctions
Compliance & Evaluation, tel.: 202-622-2490.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document and additional information concerning OFAC are
available on OFAC's website (www.treasury.gov/ofac).
Background
On November 4, 2010, OFAC issued the North Korea Sanctions
Regulations, 31 CFR part 510 (75 FR 67912, November 4, 2010) (the
``Regulations''). Since then, OFAC has amended the Regulations several
times. This rule amends the Regulations to incorporate the Treasury-
administered provisions of the North Korea Sanctions and Policy
Enhancement Act of 2016, Public Law 114-122, 130 Stat. 93 (22 U.S.C.
9201-9255) (NKSPEA), as amended by the Countering America's Adversaries
Through Sanctions Act, Public Law 115-44, 131 Stat. 886 (22 U.S.C. 9201
et seq.) (CAATSA) and the National Defense Authorization Act for Fiscal
Year 2020, Public Law 116-92, 133 Stat. 1198 (FY 2020 NDAA).
NKSPEA
On February 18, 2016, the President signed NKSPEA into law. Among
other things, section 104 of NKSPEA provides that the President, with
certain exceptions, shall block and prohibit all transactions in
property and interests in property that are in the United States, that
come within the United States, or that are or come within control or
possession of a U.S. person of: The Government of North Korea, the
Workers' Party of Korea, and other persons the President determines
knowingly engage in certain North Korea-related activities.
On August 2, 2017, the President signed CAATSA into law. Title III
of CAATSA, among other things, amends NKSPEA. Section 311(a) of CAATSA
amends section 104(a) of NKSPEA to provide that the President shall,
with certain exceptions, block and prohibit all transactions in
property and interests in property that are in the United States, that
come into the United States, or that are or come into the possession of
U.S. persons of any person the President determines knowingly, directly
or indirectly, imports, exports, or reexports to or from North Korea
any defense article or defense service or engages in certain other
North Korea-related activities. Section 104(b) of NKSPEA provides that
the President may, with certain exceptions, block any person that
knowingly engages in, contributes to, assists, sponsors, or provides
financial, material, or technological support for, or goods and
services in support of, any sanctioned person.
On December 20, 2019, the President signed the FY 2020 NDAA. Title
LXXI of the 2020 NDAA, titled the ``Otto Warmbier North Korea Sanctions
and Enforcement Act of 2019,'' among other things, amends NKSPEA by
adding new sections 104(g), 201B, and 201C. NKSPEA section 104(g)
requires the President to designate any person that he determines
knowingly engages in certain specified North Korea-related activities.
New section 201B of NKSPEA requires the Secretary of the Treasury
to impose sanctions with respect to any foreign financial institution
(FFI) that the Secretary of the Treasury determines, in consultation
with the Secretary of State, knowingly on or after April 18, 2020,
provides significant financial services to any person designated for
the imposition of sanctions with respect to North Korea under NKSPEA
subsections 104(a), 104(b), or 104(g), an applicable Executive order,
or an applicable United Nations Security Council resolution. Section
201B provides that the Secretary may impose blocking sanctions on such
FFIs, or may prohibit or impose strict conditions on the opening or
[[Page 20159]]
maintenance of a correspondent account or a payable-through account in
the United States.
New section 201C of NKSPEA requires the Secretary of the Treasury,
in consultation with the Secretary of State, to prohibit an entity
owned or controlled by a U.S. financial institution and established or
maintained outside the United States from knowingly engaging in any
transaction, directly or indirectly, with the Government of North Korea
or any person designated for the imposition of sanctions with respect
to North Korea under NKSPEA subsections 104(a), 104(b), or 104(g), an
applicable Executive order, or an applicable United Nations Security
Council resolution.
Regulatory Amendments
With this rule, OFAC is incorporating the blocking and
correspondent or payable-through account sanctions contained in
sections 104(a), 104(b), 104(g), and 201B of NKSPEA, as amended by
CAATSA and the FY 2020 NDAA (NKSPEA, as amended), into the Regulations
as new Sec. 510.201(a)(3)(vii) through (x), respectively. OFAC is
incorporating the correspondent or payable-through account sanctions of
section 201B of NKSPEA, as amended, in Sec. 510.210(c), and adding a
new provision at Sec. 510.214 to implement section 201C of NKSPEA, as
amended.
OFAC is also incorporating certain statutory exemptions under
NKSPEA, as amended, in new paragraph (f) to Sec. 510.213; amending the
definition of luxury goods at Sec. 510.317 to create a regulatory
exception to exclude items approved for import, export, or reexport to
or into North Korea by the United Nations Security Council; making
technical and conforming edits to the definitions of ``effective date''
in Sec. 510.304, ``financial, material, or technological support'' in
Sec. 510.306, and ``North Korean person'' in Sec. 510.319; amending
the interpretive provision at Sec. 510.413 related to significant
transactions; updating the authorities section of the Regulations to
incorporate the FY 2020 NDAA and to shorten citations to conform with
Federal Register guidance; and amending the delegation section at Sec.
510.802 to add the delegation of certain functions with respect to the
FY 2020 NDAA.
Public Participation
Because the amendment of the Regulations 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.
Paperwork Reduction Act
The collections of information related to the Regulations are
contained in 31 CFR part 501 (the ``Reporting, Procedures and Penalties
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44
U.S.C. 3507), those collections of information have been approved by
the Office of Management and Budget under control number 1505-0164. An
agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the collection of
information displays a valid control number.
List of Subjects in 31 CFR Part 510
Administrative practice and procedure, Banks, Banking, Blocking of
assets, Foreign financial institutions, Foreign trade, Imports, North
Korea, Services, United Nations, Vessels, Workers' Party of Korea.
For the reasons set forth in the preamble, the Department of the
Treasury's Office of Foreign Assets Control amends 31 CFR part 510 as
follows:
PART 510--NORTH KOREA SANCTIONS REGULATIONS
0
1. The authority citation for part 510 is revised to read as follows:
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651,
1701-1706; 22 U.S.C. 287c; 28 U.S.C. 2461 note; 50 U.S.C. 1705 note;
22 U.S.C. 9201-9255; 22 U.S.C. 9201 note; Pub. L. 116-92, 133 Stat.
1198; E.O. 13466, 73 FR 36787, 3 CFR, 2008 Comp., p. 195; E.O.
13551, 75 FR 53837, 3 CFR, 2010 Comp., p. 242; E.O. 13570, 76 FR
22291, 3 CFR, 2011 Comp., p. 233; E.O. 13687, 80 FR 819, 3 CFR, 2015
Comp., p. 259; E.O. 13722, 81 FR 14943, 3 CFR, 2016 Comp., p. 446;
E.O. 13810, 82 FR 44705, 3 CFR, 2017 Comp., p. 379.
Subpart B--Prohibitions
0
2. Amend Sec. 510.201 as follows:
0
a. Remove the word ``or'' at the end of paragraph (a)(3)(v)(F).
0
b. Remove the period at the end of paragraph (a)(3)(vi)(B) and add a
semicolon in its place.
0
c. Redesignate Notes 3, 4, and 5 to paragraph (a) as Notes 4, 5, and 6
to paragraph (a).
0
d. Add paragraphs (a)(3)(vii) through (x).
0
e. Revise newly redesignated Note 4 to paragraph (a).
The additions and revision read as follows:
Sec. 510.201 Prohibited transactions involving blocked property.
(a) * * *
(3) * * *
(vii) Section 104(a) of the North Korea Sanctions and Policy
Enhancement Act of 2016, as amended by the Countering America's
Adversaries Through Sanctions Act and the National Defense
Authorization Act for Fiscal Year 2020 (NKSPEA, as amended). Any person
the Secretary of the Treasury determines, in consultation with the
Secretary of State, knowingly:
(A) Directly or indirectly, imports, exports, or reexports to,
into, or from North Korea any goods, services, or technology controlled
for export by the United States because of the use of such goods,
services, or technology for weapons of mass destruction or delivery
systems for such weapons and materially contributes to the use,
development, production, possession, or acquisition by any person of a
nuclear, radiological, chemical, or biological weapon or any device or
system designed in whole or in part to deliver such a weapon;
(B) Directly or indirectly, provides training, advice, or other
services or assistance, or engages in significant financial
transactions, relating to the manufacture, maintenance, or use of any
such weapon, device, or system to be imported, exported, or reexported
to, into, or from North Korea;
(C) Directly or indirectly, imports, exports, or reexports luxury
goods to or into North Korea;
(D) Engages in, is responsible for, or facilitates censorship by
the Government of North Korea;
(E) Engages in, is responsible for, or facilitates serious human
rights abuses by the Government of North Korea;
(F) Directly or indirectly, engages in money laundering, the
counterfeiting of goods or currency, bulk cash smuggling, or narcotics
trafficking that supports the Government of North Korea or any senior
official or person acting for or on behalf of that Government;
(G) Engages in significant activities undermining cybersecurity
through the use of computer networks or systems against foreign
persons, governments, or other entities on behalf of the Government of
North Korea;
(H) Directly or indirectly, sells, supplies, or transfers to or
from the Government of North Korea or any person acting for or on
behalf of that Government, a significant amount of precious metal,
graphite, raw or semi-finished metals or aluminum, steel,
[[Page 20160]]
coal, or software, for use by or in industrial processes directly
related to weapons of mass destruction and delivery systems for such
weapons, other proliferation activities, the Korean Workers' Party,
armed forces, internal security or intelligence activities, or the
operation and maintenance of political prison camps or forced labor
camps, including outside of North Korea;
(I) Directly or indirectly, imports, exports, or reexports to,
into, or from North Korea any arms or related materiel or any defense
article or defense service (as such terms are defined in section 47 of
the Arms Export Control Act (22 U.S.C. 2794));
(J) Directly or indirectly, purchases or otherwise acquires from
North Korea any significant amounts of gold, titanium ore, vanadium
ore, copper, silver, nickel, zinc, or rare earth minerals;
(K) Directly or indirectly, sells or transfers to North Korea any
significant amounts of rocket, aviation, or jet fuel (except for use by
a civilian passenger aircraft outside North Korea, exclusively for
consumption during its flight to North Korea or its return flight);
(L) Directly or indirectly, provides significant amounts of fuel or
supplies, provides bunkering services, or facilitates a significant
transaction or transactions to operate or maintain, a vessel or
aircraft that is designated under an applicable Executive order or an
applicable United Nations Security Council resolution (as such terms
are defined in NKSPEA, as amended), or that is owned or controlled by a
person designated under an applicable Executive order or applicable
United Nations Security Council resolution (as such terms are defined
in NKSPEA, as amended);
(M) Directly or indirectly, insures, registers, facilitates the
registration of, or maintains insurance or a registration for, a vessel
owned or controlled by the Government of North Korea, except as
specifically approved by the United Nations Security Council;
(N) Directly or indirectly, maintains a correspondent account as
defined in section 201A(d)(1) of NKSPEA, as amended, with any North
Korean financial institution, except as specifically approved by the
United Nations Security Council; or
(O) Attempts to engage in any of the conduct described in
paragraphs (a)(3)(vii)(A) through (N) of this section;
(viii) Section 104(b) of NKSPEA, as amended. Any person the
Secretary of the Treasury determines, in consultation with the
Secretary of State, knowingly:
(A) Engages in, contributes to, assists, sponsors, or provides
financial, material, or technological support for, or goods and
services in support of, any person designated pursuant to: An
applicable United Nations Security Council resolution (as defined in
NKSPEA, as amended); this section; or any applicable Executive order
(as defined in NKSPEA, as amended);
(B) Contributed to:
(1) The bribery of an official of the Government of North Korea or
any person acting for on behalf of that official;
(2) The misappropriation, theft, or embezzlement of public funds
by, or for the benefit of, an official of the Government of North Korea
or any person acting for or on behalf of that official; or
(3) The use of any proceeds of any activity described in paragraph
(a)(3)(viii)(B)(1) or (2) of this section;
(C) Materially assisted, sponsored, or provided significant
financial, material, or technological support for, or goods or services
to or in support of, the activities described in paragraph
(a)(3)(viii)(A) or (B) of this section;
(D) Directly or indirectly, purchased or otherwise acquired from
the Government of North Korea significant quantities of coal, iron, or
iron ore, in excess of the limitations provided in applicable United
Nations Security Council resolutions (as defined in NKSPEA, as
amended);
(E) Directly or indirectly, purchased or otherwise acquired
significant types or amounts of textiles from the Government of North
Korea;
(F) Facilitated a significant transfer of funds or property of the
Government of North Korea that materially contributes to any violation
of an applicable United Nations Security Council resolution (as defined
in NKSPEA, as amended);
(G) Directly or indirectly, facilitated a significant transfer to
or from the Government of North Korea of bulk cash, precious metals,
gemstones, or other stores of value not described under paragraph
(a)(3)(vii)(J) of this section;
(H) Directly or indirectly, sold, transferred, or otherwise
provided significant amounts of crude oil, condensates, refined
petroleum, other types of petroleum or petroleum byproducts, liquefied
natural gas, or other natural gas resources to the Government of North
Korea (except for heavy fuel oil, gasoline, or diesel fuel for
humanitarian use or as excepted under paragraph (a)(3)(vii)(K) of this
section);
(I) Directly or indirectly, engaged in, facilitated, or was
responsible for the online commercial activities of the Government of
North Korea, including online gambling;
(J) Directly or indirectly, purchased or otherwise acquired fishing
rights from the Government of North Korea;
(K) Knowingly, directly or indirectly, purchased or otherwise
acquired significant types or amounts of food or agricultural products
from the Government of North Korea;
(L) Directly or indirectly, engaged in, facilitated, or was
responsible for the exportation of workers from North Korea in a manner
intended to generate significant revenue, directly or indirectly, for
use by the Government of North Korea or by the Workers' Party of Korea;
(M) Conducted a significant transaction or transactions in North
Korea's transportation, mining, energy, or financial services
industries; or
(N) Facilitated the operation of any branch, subsidiary, or office
of a North Korean financial institution, except as specifically
approved by the United Nations Security Council, and other than through
a correspondent account as described in paragraph (a)(3)(vii)(N) of
this section;
(ix) Section 104(g) of NKSPEA, as amended. Any person the Secretary
of the Treasury determines, in consultation with the Secretary of
State, knowingly:
(A) Directly or indirectly, engages in the importation from or
exportation to North Korea of significant quantities of:
(1) Coal, textiles, seafood, iron, or iron ore;
(2) Refined petroleum products or crude oil above limits set by the
United Nations Security Council and with which the United States
concurs; or
(3) Services or technology related to goods specified in paragraph
(a)(3)(ix)(A)(1) and (2) of this section;
(B) Facilitates a significant transfer of funds or property of the
Government of North Korea that materially contributes to any violation
of an applicable United Nations Security Council resolution (as defined
in NKSPEA, as amended);
(C) Directly or indirectly, engages in, facilitates, or is
responsible for the exportation of workers from North Korea, or the
employment of such workers, in a manner that generates significant
revenue, directly or indirectly, for use by the Government of North
Korea or by the Workers' Party of Korea;
(D) Directly or indirectly, sells or transfers a significant number
of vessels to North Korea, except as specifically approved by the
United Nations Security Council;
(E) Engages in a significant activity to charter, insure, register,
facilitate the registration of, or maintain insurance or
[[Page 20161]]
a registration for, a vessel owned, controlled, commanded, or crewed by
a North Korean person; or
(F) Contributes to and participates in:
(1) A significant act of bribery of an official of the Government
of North Korea or any person acting for or on behalf of that official;
(2) The misappropriation, theft, or embezzlement of a significant
amount of public funds by, or for the benefit of, an official of the
Government of North Korea or any person acting for or on behalf of that
official; or
(3) The use of any proceeds of any activity described in paragraph
(a)(3)(ix)(A) or (B) of this section; or
(x) Section 201B of NKSPEA, as amended. Any foreign financial
institution that the Secretary of the Treasury determines, in
consultation with the Secretary of State, knowingly, on or after April
18, 2020, provides significant financial services to any person
designated for the imposition of sanctions with respect to North Korea
described in paragraphs (a)(3)(vii) through (ix) of this section and
under an applicable Executive order (as defined in NKSPEA, as amended)
or an applicable United Nations Security Council resolution (as defined
in NKSPEA, as amended), and with respect to which the Secretary of the
Treasury has exercised the authority to block all property and
interests in property.
Note 3 to paragraph (a)(3)(x): See Sec. 510.210(c) for
alternative sanctions that can be imposed on a foreign financial
institution when the determination specified in paragraph (a)(3)(x)
of this section is made.
Note 4 to paragraph (a): The names of persons listed in or
designated or identified pursuant to E.O. 13551, E.O. 13687, E.O.
13722, or E.O. 13810 and whose property and interests in property
are blocked pursuant to those orders and who are referenced in
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 following identifiers: for
E.O. 13551: ``[DPRK];'' for E.O. 13687: ``[DPRK2];'' for E.O. 13722:
``[DPRK3];'' and for E.O. 13810: ``[DPRK4].'' The names of persons
designated or identified pursuant to NKSPEA, as amended, will be
incorporated into the SDN List with the identifier ``[DPRK-
NKSPEA].'' Certain transactions with persons blocked pursuant to
paragraph (a) of this section, or blocked pursuant to other parts of
31 CFR chapter V in connection with North Korea-related activities,
may result in the imposition of secondary sanctions, and therefore
such blocked persons' entries on the SDN List will also include the
descriptive prefix text ``Secondary sanctions risk:'', followed by
information about the applicable secondary sanctions authority.
Pursuant to Sec. 510.214, persons owned or controlled by a U.S.
financial institution are subject to certain prohibitions under this
part; as a result, the entries of persons blocked pursuant to
paragraph (a) of this section, or blocked pursuant to other parts of
31 CFR chapter V in connection with North Korea-related activities,
will also include the descriptive prefix text ``Transactions
Prohibited For Persons Owned or Controlled By U.S. Financial
Institutions:'', followed by information about the applicable
sanctions authority. The SDN List is accessible through the
following page on OFAC's website: www.treasury.gov/sdn. Additional
information pertaining to the SDN List can be found in appendix A to
this chapter. See Sec. 510.411 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.
The property and interests in property of persons who meet the
definition of the term Government of North Korea, as defined in
Sec. 510.311, are blocked pursuant to paragraph (a) of this section
regardless of whether the names of such persons are published in the
Federal Register or incorporated into the SDN List.
0
3. Amend Sec. 510.210 as follows:
0
a. In the heading of paragraph (b), add ``prohibited by Executive Order
13810'' after the word ``institutions''.
0
b. Remove Note 1 to Paragraph (b).
0
c. Redesignate paragraphs (c) and (d) as paragraphs (d) and (e).
0
d. Add new paragraph (c).
0
e. In newly redesignated paragraph (d) introductory text, add ``or
(c)'' after the words ``paragraph (b)''.
0
f. Add Note 1 to Sec. 510.210.
The additions read as follows:
Sec. 510.210 Prohibitions or strict conditions with respect to
correspondent or payable-through accounts or blocking of certain
foreign financial institutions identified by the Secretary of the
Treasury.
* * * * *
(c) Sanctionable activity by foreign financial institutions
prohibited by NKSPEA, as amended. The Secretary of the Treasury, in
consultation with the Secretary of State, may determine that a foreign
financial institution has, on or after April 18, 2020, knowingly
provided significant financial services to any person designated for
the imposition of sanctions with respect to North Korea described in
Sec. 510.201(a)(3)(vii) through (ix) and under an applicable Executive
order (as defined in NKSPEA, as amended) or an applicable United
Nations Security Council resolution (as defined in NKSPEA, as amended).
* * * * *
Note 1 to Sec. 510.210: For information regarding persons
blocked pursuant to this part, or another part of 31 CFR chapter V
in connection with North Korea-related activities, including
identifier information for entries on the SDN List, see Note 4 to
Sec. 510.201(a).
* * * * *
0
4. Amend Sec. 510.213 by adding paragraph (f) to read as follows:
Sec. 510.213 Exempt transactions.
* * * * *
(f) Exemptions under the North Korea Sanctions and Policy
Enhancement Act of 2016, as amended by the Countering America's
Adversaries Through Sanctions Act and the National Defense
Authorization Act for Fiscal Year 2020. The prohibitions contained in
Sec. Sec. 510.201(a)(3)(vii) through (x), 510.210(c), and 510.214 do
not apply to the following activities:
(1) Activities subject to the reporting requirements under title V
of the National Security Act of 1947 (50 U.S.C. 3091 et seq.), or to
any authorized intelligence activities of the United States.
(2) Any transaction necessary to comply with United States
obligations under the Agreement between the United Nations and the
United States of America regarding the Headquarters of the United
Nations, signed at Lake Success June 26, 1947, and entered into force
November 21, 1947, or under the Convention on Consular Relations, done
at Vienna April 24, 1963, and entered into force March 19, 1967, or
under other international agreements.
(3) Any activities incidental to the POW/MIA accounting mission in
North Korea, including activities by the Defense POW/MIA Accounting
Agency and other governmental or nongovernmental organizations tasked
with identifying or recovering the remains of members of the United
States Armed Forces in North Korea.
0
5. Add Sec. 510.214 to read as follows:
Sec. 510.214 Prohibitions on persons owned or controlled by U.S.
financial institutions.
Except as otherwise authorized pursuant to this part, any person
that is owned or controlled by a U.S. financial institution and
established or maintained outside the United States is prohibited from
knowingly engaging in any transaction directly or indirectly with the
Government of North Korea or any person designated for the imposition
of sanctions with respect to North Korea described in Sec.
510.201(a)(3)(vii) through (ix) and under an applicable Executive order
(as defined in NKSPEA, as amended) or an applicable United Nations
Security Council resolution (as defined in NKSPEA, as amended).
Note 1 to Sec. 510.214: For information regarding persons
blocked pursuant to this
[[Page 20162]]
part, or another part of 31 CFR chapter V in connection with North
Korea-related activities, including identifier information for
entries on the SDN List, see Note 4 to Sec. 510.201(a).
Note 2 to Sec. 510.214: A U.S. financial institution is
subject to the civil penalties provided for in section 206(b) of the
International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)
if any entity that it owns or controls violates, attempts to
violate, conspires to violate, or causes a violation of the
prohibitions set forth in this section. See Sec. 510.701.
Subpart C--General Definitions
0
6. Amend Sec. 510.304 as follows:
0
a. In paragraph (a)(4), remove the period at the end of the paragraph
and add in its place a semicolon.
0
b. In paragraph (a)(8), remove the word ``and'' after the semicolon.
0
c. In paragraph (a)(9), remove ``Sec. 510.210'' everywhere it appears
and add in its place ``Sec. 510.210(b)'' and remove ``such
prohibition, condition, or blocking.'' and add in its place ``such
prohibition or condition; and''.
0
d. Add paragraph (a)(10).
0
e. In paragraph (b), add ``, or a notice of the imposition of a
prohibition or strict condition pursuant to Sec. 510.210,'' after the
words ``interests in property''.
The addition reads as follows:
Sec. 510.304 Effective date.
(a) * * *
(10) With respect to the prohibition set forth in Sec. 510.210(c),
April 18, 2020. The effective date of a prohibition or strict condition
imposed pursuant to Sec. 510.210(c) on the opening or maintaining of a
correspondent account or a payable-through account in the United States
by a U.S. financial institution for a particular foreign financial
institution is the earlier of the date the U.S. financial institution
receives actual or constructive notice of such prohibition or
condition.
* * * * *
Sec. 510.306 [Amended]
0
7. In Sec. 510.306, remove ``Sec. 510.201(a)(3)(ii)(E),
(a)(3)(iii)(D), (a)(3)(iv)(G), and (a)(3)(v)(E),'' and add in its place
``Sec. 510.201(a),''.
0
8. Revise Sec. 510.317 to read as follows:
Sec. 510.317 Luxury goods.
The term luxury goods, as used in Sec. 510.201(a) includes those
items listed in 15 CFR 746.4(b)(1) and supplement no. 1 to part 746,
similar items, and items so designated under an applicable United
Nations Security Council resolution (as defined by the North Korea
Sanctions and Policy Enhancement Act of 2016, as amended by the
Countering America's Adversaries Through Sanctions Act and the National
Defense Authorization Act for Fiscal Year 2020), except as specifically
approved by the United Nations Security Council for import, export, or
reexport to or into North Korea.
Sec. 510.319 [Amended]
0
9. In Sec. 510.319(b), remove ``Sec. 510.201(a)(3)(v)'' and add in
its place ``Sec. 510.201(a)''.
Subpart D--Interpretations
0
10. Revise Sec. 510.413 to read as follows:
Sec. 510.413 Significant activity or activities; significant
transaction(s); significant financial service(s).
In determining, for purposes of Sec. Sec. 510.201(a) and 510.210,
whether an activity or activities, transaction(s), or financial
service(s) are significant, the Secretary of the Treasury or the
Secretary's designee may consider the totality of the facts and
circumstances. As a general matter, the Department of the Treasury may
consider some or all of the following factors:
(a) Size, number, and frequency. The size, number, and frequency of
the activity or activities, transaction(s), or financial service(s)
conducted or performed over a period of time, including whether the
activity or activities, transaction(s), or financial service(s) are
increasing or decreasing over time and the rate of increase or
decrease.
(b) Nature. The nature of the activity or activities,
transaction(s), or financial service(s), including the type,
complexity, and commercial purpose of the activity or activities,
transaction(s), or financial service(s).
(c) Level of awareness; pattern of conduct. (1) Whether the
activity or activities, transaction(s), or financial service(s) are
performed with the involvement or approval of management or only by
clerical personnel; and
(2) Whether the activity or activities, transaction(s), or
financial service(s) are part of a pattern of conduct or the result of
a business development strategy.
(d) Nexus. The proximity between the foreign financial institution
engaging in the activity or activities, transaction(s), or financial
service(s) and North Korea or a person blocked pursuant to Sec.
510.201, a person sanctioned pursuant to Sec. 510.210, or trade with
North Korea.
(e) Impact. The impact of the activity or activities,
transaction(s), or financial service(s) on the relevant U.S. sanctions
program objectives including:
(1) The economic or other benefit conferred or attempted to be
conferred on North Korea or a person blocked pursuant to Sec. 510.201,
or sanctioned pursuant to Sec. 510.210; and
(2) Whether and how the activity or activities, transaction(s), or
financial service(s) contribute(s) to North Korea's nuclear and
ballistic missile programs, commission of serious human rights abuses,
use of funds generated through international trade to support its
nuclear and missile programs and weapons proliferation, money
laundering and other illicit activities, procurement of luxury goods,
human rights violations, and violations of United Nations Security
Council Resolutions.
(f) Deceptive practices. Whether the activity or activities,
transaction(s), or financial service(s) involve(s) an attempt to
obscure or conceal the actual parties or true nature of the activity or
activities, transaction(s), or financial service(s) or to evade
sanctions.
(g) Other relevant factors. Such other factors that the Department
of the Treasury deems relevant on a case-by-case basis in determining
the significance of an activity or activities, transaction(s), or
financial service(s).
Subpart H--Procedures
0
11. Revise Sec. 510.802 to read as follows:
Sec. 510.802 Delegation of certain authorities of the Secretary of
the Treasury.
Any action that the Secretary of the Treasury is authorized to take
pursuant to Executive Order 13466 of June 26, 2008, Executive Order
13551 of August 30, 2010, Executive Order 13570 of April 18, 2011,
Executive Order 13687 of January 2, 2015, Executive Order 13722 of
March 15, 2016, Executive Order 13810 of September 20, 2017, and any
further Executive orders relating to the national emergency declared in
Executive Order 13466 of June 26, 2008, and any action that the
Secretary of the Treasury is authorized to take pursuant to
Presidential Memorandum of May 18, 2016: Delegation of Certain
Functions and Authorities under the North Korea Policy Enhancement Act
of 2016, Presidential Memorandum of September 29, 2017: Delegation of
Certain Functions and Authorities under the Countering America's
Adversaries Through Sanctions Act of 2017, the Ukraine Freedom Support
Act of 2014, and the Support for the Sovereignty, Integrity, Democracy,
and Economic Stability of Ukraine Act of 2014, and Presidential
Memorandum of February 21, 2020: Delegation of Certain Functions and
Authorities under the
[[Page 20163]]
National Defense Authorization Act for Fiscal Year 2020, 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: April 6, 2020.
Andrea Gacki,
Director, Office of Foreign Assets Control.
[FR Doc. 2020-07497 Filed 4-9-20; 8:45 am]
BILLING CODE 4810-AL-P
