Cuban Assets Control Regulations, 67988-67989 [2020-23725]

Download as PDF 67988 Federal Register / Vol. 85, No. 208 / Tuesday, October 27, 2020 / Rules and Regulations carried over to be used by the nonlife group. (v) Example 5. P owns all of the stock of S1 and of L1. On January 1, 2017, L1 purchases all of the stock of L2. For 2021, the group elects under section 1504(c)(2) to file a consolidated return. For 2021, L1 is an eligible corporation under paragraph (b)(12) of this section but L2 is ineligible. Thus, L1 but not L2 is a member for 2021. For 2021, L2 sustains a net operating loss, which cannot be carried back (see section 172(b)). For 2021, L2 is treated under paragraph (d)(6) of this section as a member of a controlled group of corporations under section 1563 with P, S, and L1. For 2022, L2 is eligible and is included on the group’s consolidated return. L2’s net operating loss for 2021 that may be carried to 2022 is not treated under paragraph (b)(11) of this section as having been sustained in a separate return limitation year for purposes of computing consolidated LICTI of the L1–L2 life subgroup for 2022. Furthermore, the portion of L2’s net operating loss not used under paragraph (g)(2) of this section against life subgroup income in 2022 may be included in offsettable life consolidated net operating loss under paragraph (j)(2) and (h)(3)(i) of this section that reduces in 2022 nonlife consolidated taxable income (subject to the limitation in section 172(a)) because L2’s loss in 2021 was not sustained in a separate return limitation year under paragraph (j)(2) and (h)(3)(ix)(A) of this section or in a separate return year (2021) when an election was in effect under neither section 1504(c)(2) nor section 243(b)(3). * * * * * (n) Effective/applicability dates. The rules of this section apply to taxable years beginning after December 31, 2020. However, a taxpayer may choose to apply the rules of this section to taxable years beginning on or before December 31, 2020. If a taxpayer makes the choice described in the previous sentence, the taxpayer must apply those rules in their entirety and consistently with the provisions of subchapter L of the Internal Revenue Code applicable to the years at issue. Par. 5. Section 1.1503(d)–4 is amended by: ■ 1. In paragraph (c)(3)(iii)(B), removing the period and adding in its place a semi-colon. ■ 2. In paragraph (c)(3)(iv), removing the period and adding in its place ‘‘; and’’. ■ 3. Adding paragraph (c)(3)(v). The addition reads as follows: jbell on DSKJLSW7X2PROD with RULES ■ VerDate Sep<11>2014 15:51 Oct 26, 2020 Jkt 253001 § 1.1503(d)–4 Domestic use limitation and related operating rules. * * * * * (c) * * * (3) * * * (v) The SRLY limitation is applied without regard to § 1.1502–21(c)(1)(i)(E) (section 172(a) limitation applicable to a SRLY member). * * * * * ■ Par. 6. Section 1.1503(d)–8 is amended by adding paragraph (b)(8) to read as follows: § 1.1503(d)–8 Effective dates. * * * * * (b) * * * (8) Rule providing that SRLY limitation applies without regard to § 1.1502–21(c)(1)(i)(E). Section 1.1503(d)–4(c)(3)(v) applies to any period to which § 1.1502–21(c)(1)(i)(E) applies. Sunita Lough, Deputy Commissioner for Services and Enforcement. Approved: September 29, 2020. David J. Kautter, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. 2020–22974 Filed 10–23–20; 11:15 am] BILLING CODE 4830–01–P DEPARTMENT OF THE TREASURY Office of Foreign Assets Control 31 CFR Part 515 Cuban Assets Control Regulations Office of Foreign Assets Control, Treasury. ACTION: Final rule. AGENCY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Cuban Assets Control Regulations to further implement portions of the President’s foreign policy toward Cuba to deny the Cuban government access to funds in connection with remittances to Cuba. DATES: This rule is effective November 26, 2020. FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for Licensing, 202–622–2480, Assistant Director for Regulatory Affairs, 202–622–4855, or Assistant Director for Sanctions Compliance & Evaluation, 202–622– 2490. SUPPLEMENTARY INFORMATION: SUMMARY: Electronic Availability This document and additional information concerning OFAC are PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 available on OFAC’s website (www.treasury.gov/ofac). Background The Department of the Treasury issued the Cuban Assets Control Regulations, 31 CFR part 515 (the ‘‘Regulations’’), on July 8, 1963, under various authorities, including the Trading With the Enemy Act (50 U.S.C. 4301–41). OFAC has amended the Regulations on numerous occasions, including to implement the President’s foreign policy toward Cuba as set forth in National Security Presidential Memorandum-5, ‘‘Strengthening the Policy of the United States Toward Cuba,’’ signed by the President on June 16, 2017. Today, OFAC, in consultation with the State Department, is taking additional action to implement the Administration’s foreign policy toward Cuba, as set forth in more detail below. This rule provides for a 30-day implementation period before it is effective in order to allow for technical implementation of these additional restrictions. Restrictions on Certain RemittanceRelated Transactions To and From Cuba OFAC is amending the Regulations to remove from the scope of certain remittance-related general authorizations any transactions involving entities or subentities identified on the Cuba Restricted List, as maintained by the State Department and published in the Federal Register. This action is intended to restrict such entities’ and subentities’ access to funds obtained in connection with remittancerelated activities, including in their role as intermediaries or in their receipt of fees or commissions from processing remittance transactions. Specifically, OFAC is amending three general licenses in Subpart E of the Regulations to exclude from the scope of such authorizations any transaction involving any entity or subentity identified on the Cuba Restricted List: (i) § 515.570, which relates to remittances from persons subject to U.S. jurisdiction or from blocked accounts; (ii) § 515.572(a)(3), which relates to the provision of remittance forwarding services; and (iii) § 515.587, which relates to remittances from Cuban nationals to persons subject to U.S. jurisdiction. OFAC is also amending § 515.421, which provides interpretative guidance with respect to transactions ordinarily incident to a licensed transaction, to make clear that a transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity E:\FR\FM\27OCR1.SGM 27OCR1 Federal Register / Vol. 85, No. 208 / Tuesday, October 27, 2020 / Rules and Regulations identified on the Cuba Restricted List is not authorized as an ordinarily incident transaction where the terms of the general or specific license expressly exclude any such transactions. Because the amendments to §§ 515.570, 515.572(a)(3), and 515.587 expressly exclude these remittance-related transactions involving any entity or subentity on the Cuba Restricted List, upon the effective date of this rule, such transactions will not be authorized as ordinarily incident to licensed transactions under those provisions. OFAC is also adding a clarifying note in § 515.209 consistent with the amended § 515.421. 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. 601–12) does not apply. jbell on DSKJLSW7X2PROD with RULES Paperwork Reduction Act The collections of information related to the Regulations are contained in 31 CFR part 501 (the ‘‘Reporting, Procedures and Penalties Regulations’’) and § 515.572 of this part. Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information are covered by the Office of Management and Budget under control numbers 1505–0164, 1505–0167, and 1505–0168. 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 515 Administrative practice and procedure, Banks, Banking, Blocking of assets, Cuba, Export, Financial transactions, Remittances, 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 515 as follows: PART 515—CUBAN ASSETS CONTROL REGULATIONS 1. The authority citation for part 515 continues to read as follows: ■ VerDate Sep<11>2014 15:51 Oct 26, 2020 Jkt 253001 Authority: 22 U.S.C. 2370(a), 6001–6010, 7201–7211; 31 U.S.C. 321(b); 50 U.S.C. 4301– 4341; Pub. L. 101–410, 104 Stat. 890 (28 U.S.C. 2461 note); 22 U.S.C. 6021–6091; Pub. L. 105–277, 112 Stat. 2681; Pub. L. 111–8, 123 Stat. 524; Pub. L. 111–117, 123 Stat. 3034; E.O. 9989, 13 FR 4891, 3 CFR, 1943– 1948 Comp., p. 748; Proc. 3447, 27 FR 1085, 3 CFR, 1959–1963 Comp., p. 157; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 614. Subpart B—Prohibitions 2. Amend § 515.209 as follows: a. Redesignate Note to § 515.209 as Note 1 to § 515.209. ■ b. Add new Note 2 to § 515.209. The addition reads as follows: ■ ■ § 515.209 Restrictions on direct financial transactions with certain entities and subentities. * * * * * Note 2 to § 515.209: A transaction relating to the collection, forwarding, or receipt of remittances involving an entity or subentity identified on the Cuba Restricted List is not authorized as a transaction ordinarily incident to a licensed transaction where the terms of the applicable general or specific license expressly exclude any such transactions. See §§ 515.570, 515.572(a)(3), and 515.587. Subpart D—Interpretations 3. Amend § 515.421 as follows: a. In paragraph (a)(5), remove ‘‘or’’ at the end of the paragraph. ■ b. In paragraph (a)(6), remove the period at the end of the paragraph and add in its place ‘‘; or’’. ■ c. Add paragraph (a)(7). The addition reads as follows: ■ ■ § 515.421 Transactions ordinarily incident to a licensed transaction. (a) * * * (7) A transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the Cuba Restricted List, as published in the Federal Register and maintained by the State Department and available at https://www.state.gov/cuba-sanctions/ cuba-restricted-list/, where the terms of the applicable general or specific license expressly exclude any such transactions. * * * * * Subpart E—Licenses, Authorizations, and Statements of Licensing Policy (j) Remittance transactions with entities or subentities on the Cuba Restricted List prohibited. Nothing in paragraphs (a) through (i) authorizes a transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the Cuba Restricted List, as published in the Federal Register and maintained by the State Department and available at https://www.state.gov/cubasanctions/cuba-restricted-list/. * * * * * 5. In § 515.572 amend paragraph (a)(3) by adding a sentence at the end of the paragraph to read as follows: ■ § 515.572 Provision of travel, carrier, other transportation-related, and remittance forwarding services. (a) * * * (3) * * * Nothing in this paragraph (a)(3) authorizes a transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the Cuba Restricted List, as published in the Federal Register and maintained by the State Department and available at https://www.state.gov/cuba-sanctions/ cuba-restricted-list/.’’ * * * * * 6. Amend § 515.587 by adding a sentence at the end of the section to read as follows: ■ § 515.587 Remittances from Cuban nationals to persons subject to U.S. jurisdiction. * * * Nothing in this paragraph authorizes a transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the Cuba Restricted List, as published in the Federal Register and maintained by the State Department and available at https://www.state.gov/cuba-sanctions/ cuba-restricted-list/.’’ * * * * * Dated: October 22, 2020. Andrea Gacki, Director, Office of Foreign Assets Control. [FR Doc. 2020–23725 Filed 10–23–20; 11:15 am] BILLING CODE 4810–AL–P 4. Amend § 515.570 as follows: a. Redesignate paragraph (j) as paragraph (k). ■ b. Add new paragraph (j). The addition reads as follows: ■ ■ § 515.570 * PO 00000 * Remittances. * Frm 00025 * Fmt 4700 * Sfmt 9990 67989 E:\FR\FM\27OCR1.SGM 27OCR1

Agencies

[Federal Register Volume 85, Number 208 (Tuesday, October 27, 2020)]
[Rules and Regulations]
[Pages 67988-67989]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23725]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 515


Cuban Assets Control 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 Cuban Assets Control Regulations to 
further implement portions of the President's foreign policy toward 
Cuba to deny the Cuban government access to funds in connection with 
remittances to Cuba.

DATES: This rule is effective November 26, 2020.

FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for 
Licensing, 202-622-2480, Assistant Director for Regulatory Affairs, 
202-622-4855, or Assistant Director for Sanctions Compliance & 
Evaluation, 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

    The Department of the Treasury issued the Cuban Assets Control 
Regulations, 31 CFR part 515 (the ``Regulations''), on July 8, 1963, 
under various authorities, including the Trading With the Enemy Act (50 
U.S.C. 4301-41). OFAC has amended the Regulations on numerous 
occasions, including to implement the President's foreign policy toward 
Cuba as set forth in National Security Presidential Memorandum-5, 
``Strengthening the Policy of the United States Toward Cuba,'' signed 
by the President on June 16, 2017.
    Today, OFAC, in consultation with the State Department, is taking 
additional action to implement the Administration's foreign policy 
toward Cuba, as set forth in more detail below. This rule provides for 
a 30-day implementation period before it is effective in order to allow 
for technical implementation of these additional restrictions.

Restrictions on Certain Remittance-Related Transactions To and From 
Cuba

    OFAC is amending the Regulations to remove from the scope of 
certain remittance-related general authorizations any transactions 
involving entities or subentities identified on the Cuba Restricted 
List, as maintained by the State Department and published in the 
Federal Register. This action is intended to restrict such entities' 
and subentities' access to funds obtained in connection with 
remittance-related activities, including in their role as 
intermediaries or in their receipt of fees or commissions from 
processing remittance transactions. Specifically, OFAC is amending 
three general licenses in Subpart E of the Regulations to exclude from 
the scope of such authorizations any transaction involving any entity 
or subentity identified on the Cuba Restricted List: (i) Sec.  515.570, 
which relates to remittances from persons subject to U.S. jurisdiction 
or from blocked accounts; (ii) Sec.  515.572(a)(3), which relates to 
the provision of remittance forwarding services; and (iii) Sec.  
515.587, which relates to remittances from Cuban nationals to persons 
subject to U.S. jurisdiction. OFAC is also amending Sec.  515.421, 
which provides interpretative guidance with respect to transactions 
ordinarily incident to a licensed transaction, to make clear that a 
transaction relating to the collection, forwarding, or receipt of 
remittances involving any entity or subentity

[[Page 67989]]

identified on the Cuba Restricted List is not authorized as an 
ordinarily incident transaction where the terms of the general or 
specific license expressly exclude any such transactions. Because the 
amendments to Sec. Sec.  515.570, 515.572(a)(3), and 515.587 expressly 
exclude these remittance-related transactions involving any entity or 
subentity on the Cuba Restricted List, upon the effective date of this 
rule, such transactions will not be authorized as ordinarily incident 
to licensed transactions under those provisions. OFAC is also adding a 
clarifying note in Sec.  515.209 consistent with the amended Sec.  
515.421.

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. 601-12) 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'') and Sec.  515.572 of this part. Pursuant to the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of 
information are covered by the Office of Management and Budget under 
control numbers 1505-0164, 1505-0167, and 1505-0168. 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 515

    Administrative practice and procedure, Banks, Banking, Blocking of 
assets, Cuba, Export, Financial transactions, Remittances, 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 515 as 
follows:

PART 515--CUBAN ASSETS CONTROL REGULATIONS

0
1. The authority citation for part 515 continues to read as follows:

    Authority:  22 U.S.C. 2370(a), 6001-6010, 7201-7211; 31 U.S.C. 
321(b); 50 U.S.C. 4301-4341; Pub. L. 101-410, 104 Stat. 890 (28 
U.S.C. 2461 note); 22 U.S.C. 6021-6091; Pub. L. 105-277, 112 Stat. 
2681; Pub. L. 111-8, 123 Stat. 524; Pub. L. 111-117, 123 Stat. 3034; 
E.O. 9989, 13 FR 4891, 3 CFR, 1943-1948 Comp., p. 748; Proc. 3447, 
27 FR 1085, 3 CFR, 1959-1963 Comp., p. 157; E.O. 12854, 58 FR 36587, 
3 CFR, 1993 Comp., p. 614.

Subpart B--Prohibitions

0
2. Amend Sec.  515.209 as follows:
0
a. Redesignate Note to Sec.  515.209 as Note 1 to Sec.  515.209.
0
b. Add new Note 2 to Sec.  515.209.
    The addition reads as follows:


Sec.  515.209  Restrictions on direct financial transactions with 
certain entities and subentities.

* * * * *

    Note 2 to Sec.  515.209:  A transaction relating to the 
collection, forwarding, or receipt of remittances involving an 
entity or subentity identified on the Cuba Restricted List is not 
authorized as a transaction ordinarily incident to a licensed 
transaction where the terms of the applicable general or specific 
license expressly exclude any such transactions. See Sec. Sec.  
515.570, 515.572(a)(3), and 515.587.

Subpart D--Interpretations

0
3. Amend Sec.  515.421 as follows:
0
a. In paragraph (a)(5), remove ``or'' at the end of the paragraph.
0
b. In paragraph (a)(6), remove the period at the end of the paragraph 
and add in its place ``; or''.
0
c. Add paragraph (a)(7).
    The addition reads as follows:


Sec.  515.421  Transactions ordinarily incident to a licensed 
transaction.

    (a) * * *
    (7) A transaction relating to the collection, forwarding, or 
receipt of remittances involving any entity or subentity identified on 
the Cuba Restricted List, as published in the Federal Register and 
maintained by the State Department and available at https://www.state.gov/cuba-sanctions/cuba-restricted-list/, where the terms of 
the applicable general or specific license expressly exclude any such 
transactions.
* * * * *

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

0
4. Amend Sec.  515.570 as follows:
0
a. Redesignate paragraph (j) as paragraph (k).
0
b. Add new paragraph (j).
    The addition reads as follows:


Sec.  515.570  Remittances.

* * * * *
    (j) Remittance transactions with entities or subentities on the 
Cuba Restricted List prohibited. Nothing in paragraphs (a) through (i) 
authorizes a transaction relating to the collection, forwarding, or 
receipt of remittances involving any entity or subentity identified on 
the Cuba Restricted List, as published in the Federal Register and 
maintained by the State Department and available at https://www.state.gov/cuba-sanctions/cuba-restricted-list/.
* * * * *

0
5. In Sec.  515.572 amend paragraph (a)(3) by adding a sentence at the 
end of the paragraph to read as follows:


Sec.  515.572  Provision of travel, carrier, other transportation-
related, and remittance forwarding services.

    (a) * * *
    (3) * * * Nothing in this paragraph (a)(3) authorizes a transaction 
relating to the collection, forwarding, or receipt of remittances 
involving any entity or subentity identified on the Cuba Restricted 
List, as published in the Federal Register and maintained by the State 
Department and available at https://www.state.gov/cuba-sanctions/cuba-restricted-list/.''
* * * * *

0
6. Amend Sec.  515.587 by adding a sentence at the end of the section 
to read as follows:


Sec.  515.587  Remittances from Cuban nationals to persons subject to 
U.S. jurisdiction.

    * * * Nothing in this paragraph authorizes a transaction relating 
to the collection, forwarding, or receipt of remittances involving any 
entity or subentity identified on the Cuba Restricted List, as 
published in the Federal Register and maintained by the State 
Department and available at https://www.state.gov/cuba-sanctions/cuba-restricted-list/.''
* * * * *

    Dated: October 22, 2020.
Andrea Gacki,
Director, Office of Foreign Assets Control.
[FR Doc. 2020-23725 Filed 10-23-20; 11:15 am]
BILLING CODE 4810-AL-P