Somalia Sanctions Regulations, 22346-22357 [2021-08836]
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in section 274(e)(2) and in paragraph
(e)(2)(i) of this section cannot be applied
to reduce a section 274(a)(4)
disallowance calculated using this
methodology. * * *
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(f) * * *
(8) * * *
(iv) * * * The primary use of H’s
leased parking facility under paragraph
(d)(2)(ii)(B)(2) of this section is not to
provide parking to the general public
because 60% (60/100 = 60%) of the lot
is used by its employees. * * *
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Crystal Pemberton,
Senior Federal Register Liaison, Legal
Processing Division, Associate Chief Counsel,
(Procedure and Administration).
[FR Doc. 2021–08391 Filed 4–27–21; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 551
Somalia Sanctions Regulations
Office of Foreign Assets
Control, Treasury.
AGENCY:
ACTION:
Final rule.
The Department of the
Treasury’s Office of Foreign Assets
Control (OFAC) is amending the
Somalia Sanctions Regulations and
reissuing them in their entirety to
further implement an April 12, 2010
Somalia-related Executive order, and to
implement a July 20, 2012 Somaliarelated Executive order. This final rule
replaces the regulations that were
published in abbreviated form on May
5, 2010 and includes additional
interpretive and definitional guidance,
general licenses, statements of licensing
policy, and other regulatory provisions
that will provide further guidance to the
public. Due to the number of regulatory
sections being updated or added, OFAC
is reissuing the Somalia Sanctions
Regulations in their entirety.
SUMMARY:
DATES:
This rule is effective April 28,
2021.
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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:
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Electronic Availability
This document and additional
information concerning OFAC are
available on OFAC’s website
(www.treasury.gov/ofac).
Background
On May 5, 2010, OFAC issued the
Somalia Sanctions Regulations, 31 CFR
part 551 (75 FR 24394, May 5, 2010) (the
‘‘Regulations’’), to implement Executive
Order (E.O.) 13536 of April 12, 2010,
‘‘Blocking Property of Certain Persons
Contributing to the Conflict in Somalia’’
(75 FR 19869, April 15, 2010), pursuant
to authorities delegated to the Secretary
of the Treasury in E.O. 13536. The
Regulations were initially issued in
abbreviated form for the purpose of
providing immediate guidance to the
public. OFAC is revising the
Regulations to further implement E.O.
13536 and to implement E.O. 13620 of
July 20, 2012, ‘‘Taking Additional Steps
to Address the National Emergency
With Respect to Somalia’’ (77 FR 43483,
July 24, 2012), which amended E.O.
13536. OFAC is amending and reissuing
the Regulations as a more
comprehensive set of regulations that
includes additional interpretive and
definitional guidance, general licenses,
statements of licensing policy, and other
regulatory provisions that will provide
further guidance to the public. Due to
the number of regulatory sections being
updated or added, OFAC is reissuing
the Regulations in their entirety.
E.O. 13536
On April 12, 2010, the President,
invoking the authority of, inter alia, the
International Emergency Economic
Powers Act (50 U.S.C. 1701–1706)
(IEEPA) and the United Nations
Participation Act, as amended (22
U.S.C. 287c) (UNPA), issued E.O. 13536.
In E.O. 13536, the President found that
the deterioration of the security
situation and the persistence of violence
in Somalia, and acts of piracy and
armed robbery at sea off the coast of
Somalia, and violations of a United
Nations arms embargo, constitute an
unusual and extraordinary threat to the
national security and foreign policy of
the United States and declared a
national emergency to deal with that
threat.
Section 1(a) of E.O. 13536 blocked,
with certain exceptions, all property
and interests in property that are in the
United States, that come within the
United States, or that are or come within
the possession or control of any U.S.
person of: (i) The persons listed in the
Annex to E.O. 13536; and (ii) any
person determined by the Secretary of
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the Treasury, in consultation with the
Secretary of State: (A) To have engaged
in acts that directly or indirectly
threaten the peace, security, or stability
of Somalia, including: (1) Acts that
threaten the Djibouti Agreement of
August 18, 2008, or the political
process; or (2) acts that threaten the
Transitional Federal Institutions, the
African Union Mission in Somalia
(AMISOM), or other international
peacekeeping operations related to
Somalia; (B) to have obstructed the
delivery of humanitarian assistance to
Somalia, or access to, or distribution of,
humanitarian assistance in Somalia; (C)
to have directly or indirectly supplied,
sold, or transferred to Somalia, or to
have been the recipient in the territory
of Somalia of, arms or any related
materiel, or any technical advice,
training, or assistance, including
financing and financial assistance,
related to military activities; (D) to have
materially assisted, sponsored, or
provided financial, material, logistical,
or technical support for, or goods or
services in support of, the activities
described above or any person whose
property and interests in property are
blocked pursuant to E.O. 13536; or (E)
to be owned or controlled by, or to have
acted or purported to act for or on behalf
of, directly or indirectly, any person
whose property and interests in
property are blocked pursuant to E.O.
13536. The property and interests in
property of the persons described above
may not be transferred, paid, exported,
withdrawn, or otherwise dealt in. As
discussed further below, section 1(a) of
E.O. 13536 was amended by E.O. 13620.
In Section 1(b) of E.O. 13536, the
President determined that acts of piracy
or armed robbery at sea off the coast of
Somalia threaten the peace, security, or
stability of Somalia.
In Section 1(c) of E.O. 13536, the
President further determined that the
making of donations of certain articles,
such as food, clothing, and medicine,
intended to be used to relieve human
suffering, as specified in section
203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2))
by, to, or for the benefit of any person
whose property and interests in
property are blocked pursuant to E.O.
13536 would seriously impair his ability
to deal with the national emergency
declared in E.O. 13536. The President
therefore prohibited the provision of
such donations unless authorized by
OFAC.
Section 1(d) of E.O. 13536 provides
that the prohibition on any transaction
or dealing in blocked property or
interests in property includes the
making of any contribution or provision
of funds, goods, or services by, to, or for
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the benefit of any person whose
property and interests in property are
blocked pursuant to E.O. 13536, and the
receipt of any contribution or provision
of funds, goods, or services from any
such person.
Section 2 of E.O. 13536 prohibits any
transaction by a U.S. person or within
the United States that evades or avoids,
has the purpose of evading or avoiding,
causes a violation of, or attempts to
violate any of the prohibitions set forth
in E.O. 13536, as well as any conspiracy
formed to violate such prohibitions.
Section 3 of E.O. 13536 provides
definitions for certain terms used in the
order.
Section 5 of E.O. 13536 authorizes the
Secretary of the Treasury, in
consultation with the Secretary of State,
to take such actions, including the
promulgation of rules and regulations,
and to employ all powers granted to the
President by IEEPA and the UNPA, as
may be necessary to carry out the
purposes of E.O. 13536. Section 5 also
provides that the Secretary of the
Treasury may redelegate any of these
functions to other officers and agencies
of the U.S. Government.
E.O. 13620
On July 20, 2012, pursuant to, inter
alia, IEEPA and the UNPA, the
President issued E.O. 13620. In E.O.
13620, the President took additional
steps regarding the national emergency
with respect to the situation in Somalia
declared in E.O. 13536, in view of
United Nations Security Council
Resolution 2036 of February 22, 2012,
and Resolution 2002 of July 29, 2011,
and to address: Exports of charcoal from
Somalia, which generate significant
revenue for al-Shabaab; the
misappropriation of Somali public
assets; and certain acts of violence
committed against civilians in Somalia,
all of which contribute to the
deterioration of the security situation
and the persistence of violence in
Somalia. E.O. 13620 amends E.O. 13536,
by replacing subsection (1)(a) of E.O.
13536 in its entirety but does not amend
the Annex to E.O. 13536 as originally
issued, and imposes new prohibitions.
New section 1(a) of E.O. 13536 as
amended by E.O. 13620 (‘‘amended E.O.
13536’’) blocks, with certain exceptions,
all property and interests in property
that are in the United States, that come
within the United States, or that are or
come within the possession or control of
any United States person of: (i) The
persons listed in the Annex to amended
E.O. 13536; and (ii) any person
determined by the Secretary of the
Treasury, in consultation with the
Secretary of State: (A) To have engaged
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in acts that directly or indirectly
threaten the peace, security, or stability
of Somalia, including: (1) Acts that
threaten the Djibouti Agreement of
August 18, 2008, or the political
process; or (2) acts that threaten the
Transitional Federal Institutions or
future Somali governing institutions,
AMISOM, or other future international
peacekeeping operations related to
Somalia; or (3) acts to misappropriate
Somali public assets; (B) to have
obstructed the delivery of humanitarian
assistance to Somalia, or access to, or
distribution of, humanitarian assistance
in Somalia; (C), to have directly or
indirectly supplied, sold, or transferred
to Somalia, or to have been the recipient
in the territory of Somalia of, arms or
any related material, or any technical
advice, training or assistance, including
financing and financial assistance,
related to military activities; (D) to be
responsible for or complicit in, or
responsible for ordering, controlling, or
otherwise directing, or to have
participated in, the commission of acts
of violence targeting civilians in
Somalia, including killing and maiming,
sexual and gender-based violence,
attacks on schools and hospitals, taking
hostages, and forced displacement; (E)
to be a political or military leader
recruiting or using children in armed
conflict in Somalia; (F) to have engaged,
directly or indirectly, in the import or
export of charcoal from Somalia on or
after February 22, 2012; (G) to have
materially assisted, sponsored, or
provided financial, material, logistical,
or technical support for, or goods or
services in support of, the activities
described above or any person whose
property and interests in property are
blocked pursuant to amended E.O.
13536; or (H) to be owned or controlled
by, or to have acted or purported to act
for or on behalf of, directly or indirectly,
any person whose property and interests
in property are blocked pursuant to
amended E.O. 13536. The property and
interests in property of the persons
described above may not be transferred,
paid, exported, withdrawn, or otherwise
dealt in. Because E.O. 13620 did not
amend the Annex to E.O. 13536, the
term ‘‘Annex to amended E.O. 13536’’
refers to the Annex to E.O. 13536 as
originally issued.
Section 2 of E.O. 13620 prohibits the
importation into the United States,
directly or indirectly, of charcoal from
Somalia.
Section 3 of E.O. 13620 prohibits any
transaction by a United States person or
within the United States that evades or
avoids, has the purpose of evading or
avoiding, causes a violation of, or
attempts to violate any of the
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prohibitions set forth in E.O. 13620, as
well as any conspiracy formed to violate
such prohibitions.
Section 4 of E.O. 13620 provides
definitions for certain terms used in the
order.
Section 5 of E.O. 13620 authorizes the
Secretary of the Treasury, in
consultation with the Secretary of State,
to take such actions, including the
promulgation of rules and regulations,
and to employ all powers granted to the
President by IEEPA and the UNPA, as
may be necessary to carry out the
purposes of E.O. 13620. Section 5 of
E.O. 13620 also provides that the
Secretary of the Treasury may redelegate
any of these functions to other officers
and agencies of the U.S. Government.
Current Regulatory Action
In furtherance of the purposes of E.O.
13536 and E.O. 13620, OFAC is
amending and reissuing the Regulations.
The Regulations implement targeted
sanctions that are directed at persons
determined to meet the criteria set forth
in § 551.201 of the Regulations, as well
as sanctions that may be set forth in any
further Executive orders issued
pursuant to the national emergency
declared in E.O. 13536. The sanctions in
amended E.O. 13536 and E.O. 13620 do
not generally prohibit trade or the
provision of banking or other financial
services to the country of Somalia.
Instead, the sanctions in amended E.O.
13536 and E.O. 13620 apply where the
transaction or service in question
involves property or interests in
property that are blocked pursuant to
these sanctions, and prohibit the
importation into the United States,
directly or indirectly, of charcoal from
Somalia.
Subpart A of the Regulations clarifies
the relation of this part to other laws
and regulations. Subpart B of the
Regulations implements the
prohibitions contained in Sections 1
and 2 of amended E.O. 13536 and
sections 2 and 3 of E.O. 13620, as well
as the prohibitions that may be set forth
in any further Executive orders issued
pursuant to the national emergency
declared in E.O. 13536. See, e.g.,
§§ 551.201 and 551.205. Persons
identified in the Annex to amended E.O.
13536, designated by or under the
authority of the Secretary of the
Treasury pursuant to amended E.O.
13536, or otherwise subject to the
blocking provisions of amended E.O.
13536, as well as persons who are
blocked pursuant to any further
Executive orders issued pursuant to the
national emergency declared in E.O.
13536, are referred to throughout the
Regulations as ‘‘persons whose property
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and interests in property are blocked
pursuant to § 551.201.’’ The names of
persons listed in, designated, or
identified pursuant to amended E.O.
13536, or listed in, designated, or
identified pursuant to any further
Executive orders issued pursuant to the
national emergency declared in E.O.
13536, are published on OFAC’s
Specially Designated Nationals and
Blocked Persons List (SDN List), which
is accessible via OFAC’s website. Those
names also are published in the Federal
Register as they are added to the SDN
List.
Sections 551.202 and 551.203 of
subpart B detail the effect of transfers of
blocked property in violation of the
Regulations and set forth the
requirement to hold blocked funds, such
as currency, bank deposits, or liquidated
financial obligations, in interest-bearing
blocked accounts. Section 551.204 of
subpart B provides that all expenses
incident to the maintenance of blocked
tangible property shall be the
responsibility of the owners and
operators of such property, and that
such expenses shall not be met from
blocked funds, unless otherwise
authorized. The section further provides
that blocked property may, in OFAC’s
discretion, be sold or liquidated and the
net proceeds placed in a blocked
interest-bearing account in the name of
the owner of the property.
Section 551.205 of subpart B prohibits
any transaction that evades or avoids,
has the purpose of evading or avoiding,
causes a violation of, or attempts to
violate any of the prohibitions set forth
in § 551.201 of the Regulations, and any
conspiracy formed to violate such
prohibitions.
Section 551.206 of subpart B details
transactions that are exempt from the
prohibitions of the Regulations pursuant
to section 203(b)(1) of IEEPA (50 U.S.C.
1702(b)(1)), which relates to personal
communications. Section 551.207 of
subpart B sets out the prohibition on the
importation into the United States,
directly or indirectly, of charcoal from
Somalia.
In subpart C of the Regulations, new
definitions are being added to other key
terms used throughout the Regulations.
Because these new definitions were
inserted in alphabetical order, the
definitions that were in the prior
abbreviated set of regulations have been
renumbered. Similarly, in subpart D,
which contains interpretive sections
regarding the Regulations, certain
provisions have been added to those in
the prior abbreviated set of regulations.
Section 551.411 explains that the
property and interests in property of an
entity are blocked if the entity is
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directly or indirectly owned, whether
individually or in the aggregate, 50
percent or more by one or more persons
whose property and interests in
property are blocked, whether or not the
entity itself is incorporated into OFAC’s
SDN List.
Transactions otherwise prohibited by
the Regulations but found to be
consistent with U.S. policy may be
authorized by one of the general
licenses contained in subpart E of the
Regulations or by a specific license
issued pursuant to the procedures
described in subpart E of 31 CFR part
501. Subpart E of the Regulations also
contains certain statements of specific
licensing policy in addition to the
general licenses. General licenses and
statements of licensing policy relating to
this part also may be available through
the Somalia sanctions page on OFAC’s
website: www.treasury.gov/ofac.
OFAC is also incorporating several
new general licenses into the
Regulations, making technical edits to
certain existing general licenses, and
renumbering existing general licenses.
Sections 551.506, 551.508, 551.510, and
551.511 authorize, respectively, certain
transactions relating to the investment
of certain funds, payments for legal
services from funds originating outside
the United States, official business of
the United States Government, and
official activities of international
organizations. Section 551.506 was
renumbered as § 551.507 and § 551.507
was renumbered as § 551.509. In
§ 551.509, OFAC has removed the
requirement that payment for
emergency medical services be
specifically licensed.
Subpart F of the Regulations refers to
subpart C of part 501 for recordkeeping
and reporting requirements. Subpart G
of the Regulations describes the civil
and criminal penalties applicable to
violations of the Regulations, as well as
the procedures governing the potential
imposition of a civil monetary penalty
or issuance of a Finding of Violation.
Subpart G also refers to appendix A of
part 501 for a more complete
description of these procedures.
Subpart H of the Regulations refers to
subpart E of part 501 for applicable
provisions relating to administrative
procedures and contains a delegation of
certain authorities of the Secretary of
the Treasury. Subpart I of the
Regulations sets forth a Paperwork
Reduction Act notice.
Public Participation
Because the Regulations involve a
foreign affairs function, the provisions
of E.O. 12866 of September 30, 1993,
‘‘Regulatory Planning and Review’’ (58
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FR 51735, October 4, 1993), and the
Administrative Procedure Act (5 U.S.C.
553) requiring notice of proposed
rulemaking, opportunity for public
participation, and delay in effective date
are inapplicable. Because no notice of
proposed rulemaking is required for this
rule, the Regulatory Flexibility Act (5
U.S.C. 601–612) does not apply.
Paperwork Reduction Act
The collections of information related
to the Regulations are contained in 31
CFR part 501 (the ‘‘Reporting,
Procedures and Penalties Regulations’’).
Pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3507), those
collections of information have been
approved by the Office of Management
and Budget under control number 1505–
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 551
Administrative practice and
procedure, Banks, banking, Blocking of
assets, Charcoal, Foreign trade,
Penalties, Reporting and recordkeeping
requirements, Sanctions, Securities,
Services, Somalia.
■ For the reasons set forth in the
preamble, the Department of the
Treasury’s Office of Foreign Assets
Control revises 31 CFR part 551 to read
as follows:
PART 551—SOMALIA SANCTIONS
REGULATIONS
Subpart A—Relation of This Part to Other
Laws and Regulations
Sec.
551.101 Relation of this part to other laws
and regulations.
Subpart B—Prohibitions
551.201 Prohibited transactions.
551.202 Effect of transfers violating the
provisions of this part.
551.203 Holding of funds in interestbearing accounts; investment and
reinvestment.
551.204 Expenses of maintaining blocked
tangible property; liquidation of blocked
property.
551.205 Evasions; attempts; causing
violations; conspiracies.
551.206 Exempt transactions.
551.207 Prohibited importation of charcoal
from Somalia.
Subpart C—General Definitions
551.300 Applicability of definitions.
551.301 African Union Mission in Somalia;
AMISOM.
551.302 Arms or any related materiel.
551.303 Blocked account; blocked property.
551.304 Charcoal.
551.305 Effective date.
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551.306 Entity.
551.307 Financial, material, or technical
support.
551.308 [Reserved]
551.309 Interest.
551.310 Licenses; general and specific.
551.311 OFAC.
551.312 Person.
551.313 Property; property interest.
551.314 Transfer.
551.315 Transitional Federal Institutions.
551.316 United States.
551.317 United States person; U.S. person.
551.318 U.S. financial institution.
Subpart D—Interpretations
551.401 Reference to amended sections.
551.402 Effect of amendment.
551.403 Termination and acquisition of an
interest in blocked property.
551.404 Transactions ordinarily incident to
a licensed transaction.
551.405 Provision of services.
551.406 Offshore transactions involving
blocked property.
551.407 Payments from blocked accounts to
satisfy obligations prohibited.
551.408 Charitable contributions.
551.409 Credit extended and cards issued
by financial institutions to a person
whose property and interests in property
are blocked.
551.410 Setoffs prohibited.
551.411 Entities owned by one or more
persons whose property and interests in
property are blocked.
Subpart E—Licenses, Authorizations, and
Statements of Licensing Policy
551.501 General and specific licensing
procedures.
551.502 Effect of license or other
authorization.
551.503 Exclusion from licenses.
551.504 Payments and transfers to blocked
accounts in U.S. financial institutions.
551.505 Entries in certain accounts for
normal service charges.
551.506 Investment and reinvestment of
certain funds.
551.507 Provision of certain legal services.
551.508 Payments for legal services from
funds originating outside the United
States.
551.509 Emergency medical services.
551.510 Official business of the United
States Government.
551.511 Official activities of international
organizations.
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Subpart F—Reports
551.601 Records and reports.
Subpart G—Penalties and Findings of
Violation
551.701 Penalties.
551.702 Pre-Penalty Notice; settlement.
551.703 Penalty imposition.
551.704 Administrative collection; referral
to United States Department of Justice.
551.705 Findings of Violation.
Subpart H—Procedures
551.801 Procedures.
551.802 Delegation of certain authorities of
the Secretary of the Treasury.
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Subpart I—Paperwork Reduction Act
551.901 Paperwork Reduction Act notice.
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; Pub. L. 101–410, 104 Stat. 890, as
amended (28 U.S.C. 2461 note); E.O. 13536,
75 FR 19869, 3 CFR, 2010 Comp., p. 203; E.O.
13620, 77 FR 43483, 3 CFR, 2012 Comp., p.
281.
Subpart A—Relation of This Part to
Other Laws and Regulations
§ 551.101 Relation of this part to other
laws and regulations.
This part is separate from, and
independent of, the other parts of this
chapter, with the exception of part 501
of this chapter, the recordkeeping and
reporting requirements and license
application and other procedures of
which apply to this part. Actions taken
pursuant to part 501 of this chapter with
respect to the prohibitions contained in
this part are considered actions taken
pursuant to this part. Differing foreign
policy and national security
circumstances may result in differing
interpretations of similar language
among the parts of this chapter. No
license or authorization contained in or
issued pursuant to those other parts
authorizes any transaction prohibited by
this part. No license or authorization
contained in or issued pursuant to any
other provision of law or regulation
authorizes any transaction prohibited by
this part. No license or authorization
contained in or issued pursuant to this
part relieves the involved parties from
complying with any other applicable
laws or regulations.
Subpart B—Prohibitions
§ 551.201
Prohibited transactions.
(a) All property and interests in
property that are in the United States,
that come within the United States, or
that are or come within the possession
or control of any U.S. person of the
following persons are blocked and may
not be transferred, paid, exported,
withdrawn, or otherwise dealt in:
(1) The persons listed in the Annex to
Executive Order (E.O.) 13536 of April
12, 2010; and
(2) Any person determined by the
Secretary of the Treasury, in
consultation with the Secretary of State
to:
(i) Have engaged in acts that directly
or indirectly threaten the peace,
security, or stability of Somalia,
including:
(A) Acts that threaten the Djibouti
Agreement of August 18, 2008, or the
political process;
(B) Acts that threaten the Transitional
Federal Institutions or future Somali
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governing institutions, the African
Union Mission in Somalia (AMISOM),
or other future international
peacekeeping operations related to
Somalia;
(C) Acts to misappropriate Somali
public assets; or
(D) Acts of piracy or armed robbery at
sea off the coast of Somalia;
(ii) Have obstructed the delivery of
humanitarian assistance to Somalia, or
access to, or distribution of,
humanitarian assistance in Somalia;
(iii) Have directly or indirectly
supplied, sold, or transferred to
Somalia, or to have been the recipient
in the territory of Somalia of, arms or
any related materiel, or any technical
advice, training, or assistance, including
financing and financial assistance,
related to military activities;
(iv) Be responsible for or complicit in,
or responsible for ordering, controlling,
or otherwise directing, or to have
participated in, the commission of acts
of violence targeting civilians in
Somalia, including killing and maiming,
sexual and gender-based violence,
attacks on schools and hospitals, taking
hostages, and forced displacement;
(v) Be a political or military leader
recruiting or using children in armed
conflict in Somalia;
(vi) Have engaged, directly or
indirectly, in the import or export of
charcoal from Somalia on or after
February 22, 2012;
(vii) Have materially assisted,
sponsored, or provided financial,
material, logistical, or technical support
for, or goods or services in support of,
the activities described in subsections
(a)(2)(i) through (vi) of this section or
any person whose property and interests
in property are blocked pursuant to
paragraph (a) of this section; or
(viii) Be owned or controlled by, or to
have acted or purported to act for or on
behalf of, directly or indirectly, any
person whose property and interests in
property are blocked pursuant to
paragraph (a) of this section.
(b) The prohibitions in paragraph (a)
of this section include prohibitions on
the following transactions:
(1) The making of any contribution or
provision of funds, goods, or services
by, to, or for the benefit of any person
whose property and interests in
property are blocked pursuant to
paragraph (a) of this section; and
(2) The receipt of any contribution or
provision of funds, goods, or services
from any person whose property and
interests in property are blocked
pursuant to paragraph (a) of this section.
(c) Unless authorized by this part or
by a specific license expressly referring
to this part, any dealing in securities (or
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evidence thereof) held within the
possession or control of a U.S. person
and either registered or inscribed in the
name of, or known to be held for the
benefit of, or issued by, any person
whose property and interests in
property are blocked pursuant to
paragraph (a) of this section is
prohibited. This prohibition includes
the transfer (including the transfer on
the books of any issuer or agent thereof),
disposition, transportation, importation,
exportation, or withdrawal of, or the
endorsement or guaranty of signatures
on, any securities on or after the
effective date. This prohibition applies
irrespective of the fact that at any time
(whether prior to, on, or subsequent to
the effective date) the registered or
inscribed owner of any such securities
may have or might appear to have
assigned, transferred, or otherwise
disposed of the securities. (d) The
prohibitions in paragraph (a) of this
section apply except to the extent
provided by regulations, orders,
directives, or licenses that may be
issued pursuant to this part, and
notwithstanding any contract entered
into or any license or permit granted
prior to the effective date.
(e) All transactions prohibited
pursuant to any E.O. issued after July
20, 2012, pursuant to the national
emergency declared in E.O. 13536 of
April 12, 2010, are prohibited pursuant
to this part.
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Note 1 to § 551.201. The names of persons
listed in or designated or identified pursuant
to amended E.O. 13536, or listed in or
designated or identified pursuant to any
further Executive orders issued pursuant to
the national emergency declared in E.O.
13536, whose property and interests in
property therefore are blocked pursuant to
this section, are published in the Federal
Register and incorporated into OFAC’s
Specially Designated Nationals and Blocked
Persons List (SDN List) using the following
identifiers: For amended E.O. 13536:
‘‘[SOMALIA]’’ and for any further Executive
orders issued pursuant to the national
emergency declared in amended E.O. 13536:
Using the identifier formulation
‘‘[SOMALIA–E.O.[E.O. number pursuant to
which the person’s property and interests in
property are blocked]]’’. 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 § 551.411 concerning entities
that may not be listed on the SDN List but
whose property and interests in property are
nevertheless blocked pursuant to this section.
Note 2 to § 551.201. The International
Emergency Economic Powers Act (50 U.S.C.
1701–1706), in Section 203 (50 U.S.C. 1702),
authorizes the blocking of property and
interests in property of a person during the
pendency of an investigation. The names of
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persons whose property and interests in
property are blocked pending investigation
pursuant to this section also are published in
the Federal Register and incorporated into
the SDN List using the following identifiers:
For amended E.O. 13536: ‘‘[BPI–SOMALIA]’’
and for any further Executive orders issued
pursuant to the national emergency declared
in E.O. 13536: Using the identifier
formulation ‘‘[BPI–SOMALIA–E.O.[E.O.
number pursuant to which the person’s
property and interests in property are
blocked pending investigation]].’’
Note 3 to § 551.201. Sections 501.806 and
501.807 of this chapter describe the
procedures to be followed by persons
seeking, respectively, the unblocking of
funds that they believe were blocked due to
mistaken identity, or administrative
reconsideration of their status as persons
whose property and interests in property are
blocked pursuant to this section.
§ 551.202 Effect of transfers violating the
provisions of this part.
(a) Any transfer after the effective date
that is in violation of any provision of
this part or of any regulation, order,
directive, ruling, instruction, or license
issued pursuant to this part, and that
involves any property or interest in
property blocked pursuant to § 551.201,
is null and void and shall not be the
basis for the assertion or recognition of
any interest in or right, remedy, power,
or privilege with respect to such
property or interest in property.
(b) No transfer before the effective
date shall be the basis for the assertion
or recognition of any right, remedy,
power, or privilege with respect to, or
any interest in, any property or interest
in property blocked pursuant to
§ 551.201, unless the person who holds
or maintains such property, prior to that
date, had written notice of the transfer
or by any written evidence had
recognized such transfer.
(c) Unless otherwise provided, a
license or other authorization issued by
OFAC before, during, or after a transfer
shall validate such transfer or make it
enforceable to the same extent that it
would be valid or enforceable but for
the provisions of this part and any
regulation, order, directive, ruling,
instruction, or license issued pursuant
to this part.
(d) Transfers of property that
otherwise would be null and void or
unenforceable by virtue of the
provisions of this section shall not be
deemed to be null and void or
unenforceable as to any person with
whom such property is or was held or
maintained (and as to such person only)
in cases in which such person is able to
establish to the satisfaction of OFAC
each of the following:
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(1) Such transfer did not represent a
willful violation of the provisions of this
part by the person with whom such
property is or was held or maintained
(and as to such person only);
(2) The person with whom such
property is or was held or maintained
did not have reasonable cause to know
or suspect, in view of all the facts and
circumstances known or available to
such person, that such transfer required
a license or authorization issued
pursuant to this part and was not so
licensed or authorized, or, if a license or
authorization did purport to cover the
transfer, that such license or
authorization had been obtained by
misrepresentation of a third party or
withholding of material facts or was
otherwise fraudulently obtained; and
(3) The person with whom such
property is or was held or maintained
filed with OFAC a report setting forth in
full the circumstances relating to such
transfer promptly upon discovery that:
(i) Such transfer was in violation of
the provisions of this part or any
regulation, ruling, instruction, license,
or other directive or authorization
issued pursuant to this part;
(ii) Such transfer was not licensed or
authorized by OFAC; or
(iii) If a license did purport to cover
the transfer, such license had been
obtained by misrepresentation of a third
party or withholding of material facts or
was otherwise fraudulently obtained.
(e) The filing of a report in accordance
with the provisions of paragraph (d)(3)
of this section shall not be deemed
evidence that the terms of paragraphs
(d)(1) and (2) of this section have been
satisfied.
(f) Unless licensed pursuant to this
part, any attachment, judgment, decree,
lien, execution, garnishment, or other
judicial process is null and void with
respect to any property or interest in
property blocked pursuant to § 551.201.
§ 551.203 Holding of funds in interestbearing accounts; investment and
reinvestment.
(a) Except as provided in paragraph
(e) or (f) of this section, or as otherwise
directed or authorized by OFAC, any
U.S. person holding funds, such as
currency, bank deposits, or liquidated
financial obligations, subject to
§ 551.201 shall hold or place such funds
in a blocked interest-bearing account
located in the United States.
(b)(1) For purposes of this section, the
term blocked interest-bearing account
means a blocked account:
(i) In a federally insured U.S. bank,
thrift institution, or credit union,
provided the funds are earning interest
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at rates that are commercially
reasonable; or
(ii) With a broker or dealer registered
with the Securities and Exchange
Commission under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.), provided the funds are invested in
a money market fund or in U.S.
Treasury bills.
(2) Funds held or placed in a blocked
account pursuant to paragraph (a) of this
section may not be invested in
instruments the maturity of which
exceeds 180 days.
(c) For purposes of this section, a rate
is commercially reasonable if it is the
rate currently offered to other depositors
on deposits or instruments of
comparable size and maturity.
(d) For purposes of this section, if
interest is credited to a separate blocked
account or subaccount, the name of the
account party on each account must be
the same.
(e) Blocked funds held in instruments
the maturity of which exceeds 180 days
at the time the funds become subject to
§ 551.201 may continue to be held until
maturity in the original instrument,
provided any interest, earnings, or other
proceeds derived therefrom are paid
into a blocked interest-bearing account
in accordance with paragraph (a) or (f)
of this section.
(f) Blocked funds held in accounts or
instruments outside the United States at
the time the funds become subject to
§ 551.201 may continue to be held in the
same type of accounts or instruments,
provided the funds earn interest at rates
that are commercially reasonable.
(g) This section does not create an
affirmative obligation for the holder of
blocked tangible property, such as real
or personal property, or of other blocked
property, such as debt or equity
securities, to sell or liquidate such
property. However, OFAC may issue
licenses permitting or directing such
sales or liquidation in appropriate cases.
(h) Funds subject to this section may
not be held, invested, or reinvested in
a manner that provides financial or
economic benefit or access to any
person whose property and interests in
property are blocked pursuant to
§ 551.201, nor may their holder
cooperate in or facilitate the pledging or
other attempted use as collateral of
blocked funds or other assets.
§ 551.204 Expenses of maintaining
blocked tangible property; liquidation of
blocked property.
(a) Except as otherwise authorized,
and notwithstanding the existence of
any rights or obligations conferred or
imposed by any international agreement
or contract entered into or any license
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or permit granted prior to the effective
date, all expenses incident to the
maintenance of tangible property
blocked pursuant to § 551.201 shall be
the responsibility of the owners or
operators of such property, which
expenses shall not be met from blocked
funds.
(b) Property blocked pursuant to
§ 551.201 may, in the discretion of
OFAC, be sold or liquidated and the net
proceeds placed in a blocked interestbearing account in the name of the
owner of the property.
§ 551.205 Evasions; attempts; causing
violations; conspiracies.
(a) Any transaction on or after the
effective date that evades or avoids, has
the purpose of evading or avoiding,
causes a violation of, or attempts to
violate any of the prohibitions set forth
in this part is prohibited.
(b) Any conspiracy formed to violate
the prohibitions set forth in this part is
prohibited.
§ 551.206
Exempt transactions.
(a) United Nations Participation Act.
The exemption described in this section
does not apply to transactions involving
property or interests in property of
persons whose property and interests in
property are blocked pursuant to the
authority of the United Nations
Participation Act, as amended (22
U.S.C. 287c(b)) (UNPA).
Note 1 to paragraph (a). Persons whose
property and interests in property are
blocked pursuant to the authority of the
UNPA include those listed on both OFAC’s
Specially Designated Nationals and Blocked
Persons List (SDN List) and the Consolidated
United Nations Security Council Sanctions
List (UN List) (see https://www.un.org), as
well as persons listed on the SDN List for
being owned or controlled by, or acting for
or on behalf of, persons listed on both the
SDN List and the UN List.
22351
Subpart C—General Definitions
§ 551.300
Applicability of definitions.
The definitions in this subpart apply
throughout the entire part.
§ 551.301 African Union Mission in
Somalia; AMISOM
The term African Union Mission in
Somalia or AMISOM means the mission
authorized by the United Nations
Security Council in Resolution 1744 of
February 20, 2007, and reauthorized in
subsequent resolutions, and includes its
agencies, instrumentalities, and
controlled entities.
§ 551.302
Arms or any related materiel.
The term arms or any related materiel
means arms or related materiel of all
types, including military aircraft and
equipment, transferred in violation of
the United Nations arms embargo on
Somalia.
§ 551.303
property.
Blocked account; blocked
The terms blocked account and
blocked property mean any account or
property subject to the prohibitions in
§ 551.201 held in the name of a person
whose property and interests in
property are blocked pursuant to
§ 551.201, or in which such person has
an interest, and with respect to which
payments, transfers, exportations,
withdrawals, or other dealings may not
be made or effected except pursuant to
a license or other authorization from
OFAC expressly authorizing such
action.
Note 1 to § 551.303. See § 551.411
concerning the blocked status of property
and interests in property of an entity that is
directly or indirectly owned, whether
individually or in the aggregate, 50 percent
or more by one or more persons whose
property and interests in property are
blocked pursuant to § 551.201.
(b) Personal communications. The
prohibitions contained in this part do
not apply to any postal, telegraphic,
telephonic, or other personal
communication that does not involve
the transfer of anything of value.
§ 551.304
§ 551.207 Prohibited importation of
charcoal from Somalia.
(a) The term effective date refers to
the effective date of the applicable
prohibitions and directives contained in
this part as follows:
(1) With respect to a person listed in
the Annex to E.O. 13536, as amended by
E.O. 13620, 12:01 a.m. eastern daylight
time, April 13, 2010;
(2) With respect to a person whose
property and interests in property are
otherwise blocked pursuant to
§ 551.201, the earlier of the date of
actual or constructive notice that such
(a) The importation into the United
States, directly or indirectly, of charcoal
from Somalia is prohibited.
(b) The prohibition in paragraph (a) of
this section applies except to the extent
provided by statutes, or in regulations,
orders, directives, or licenses that may
be issued pursuant to this part, and
notwithstanding any contract entered
into or any license or permit granted
prior to the effective date.
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Charcoal.
The term charcoal means any product
classifiable in heading 3802 or 4402 of
the Harmonized Tariff Schedule of the
United States.
§ 551.305
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person’s property and interests in
property are blocked; and
(3) With respect to the prohibition set
forth in § 551.207, 2:00 p.m. eastern
daylight time, July 20, 2012.
(b) For the purposes of this section,
constructive notice is the date that a
notice of the blocking of the relevant
person’s property and interests in
property is published in the Federal
Register.
Note 1 to § 551.310. See § 501.801 of this
chapter on licensing procedures.
§ 551.306
§ 551.313
Entity.
The term entity means a partnership,
association, trust, joint venture,
corporation, group, subgroup, or other
organization.
§ 551.307 Financial, material, logistical, or
technical support.
The term financial, material,
logistical, or technical support, as used
in this part, means any property,
tangible or intangible, including
currency, financial instruments,
securities, or any other transmission of
value; weapons or related materiel;
chemical or biological agents;
explosives; false documentation or
identification; communications
equipment; computers; electronic or
other devices or equipment;
technologies; lodging; safe houses;
facilities; vehicles or other means of
transportation; or goods.
‘‘Technologies’’ as used in this
definition means specific information
necessary for the development,
production, or use of a product,
including related technical data such as
blueprints, plans, diagrams, models,
formulae, tables, engineering designs
and specifications, manuals, or other
recorded instructions.
§ 551.308
[Reserved]
§ 551.309
Interest.
Except as otherwise provided in this
part, the term interest, when used with
respect to property (e.g., ‘‘an interest in
property’’), means an interest of any
nature whatsoever, direct or indirect.
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§ 551.310
Licenses; general and specific.
(a) Except as otherwise provided in
this part, the term license means any
license or authorization contained in or
issued pursuant to this part.
(b) The term general license means
any license or authorization the terms of
which are set forth in subpart E of this
part or made available on OFAC’s
website: www.treasury.gov/ofac.
(c) The term specific license means
any license or authorization issued
pursuant to this part but not set forth in
subpart E of this part or made available
on OFAC’s website: www.treasury.gov/
ofac.
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§ 551.311
OFAC.
The term OFAC means the
Department of the Treasury’s Office of
Foreign Assets Control.
§ 551.312
Person.
The term person means an individual
or entity.
Property; property interest.
The terms property and property
interest include money, checks, drafts,
bullion, bank deposits, savings
accounts, debts, indebtedness,
obligations, notes, guarantees,
debentures, stocks, bonds, coupons, any
other financial instruments, bankers
acceptances, mortgages, pledges, liens
or other rights in the nature of security,
warehouse receipts, bills of lading, trust
receipts, bills of sale, any other
evidences of title, ownership, or
indebtedness, letters of credit and any
documents relating to any rights or
obligations thereunder, powers of
attorney, goods, wares, merchandise,
chattels, stocks on hand, ships, goods on
ships, real estate mortgages, deeds of
trust, vendors’ sales agreements, land
contracts, leaseholds, ground rents, real
estate and any other interest therein,
options, negotiable instruments, trade
acceptances, royalties, book accounts,
accounts payable, judgments, patents,
trademarks or copyrights, insurance
policies, safe deposit boxes and their
contents, annuities, pooling agreements,
services of any nature whatsoever,
contracts of any nature whatsoever, and
any other property, real, personal, or
mixed, tangible or intangible, or interest
or interests therein, present, future, or
contingent.
§ 551.314
Transfer.
The term transfer means any actual or
purported act or transaction, whether or
not evidenced by writing, and whether
or not done or performed within the
United States, the purpose, intent, or
effect of which is to create, surrender,
release, convey, transfer, or alter,
directly or indirectly, any right, remedy,
power, privilege, or interest with respect
to any property. Without limitation on
the foregoing, it shall include the
making, execution, or delivery of any
assignment, power, conveyance, check,
declaration, deed, deed of trust, power
of attorney, power of appointment, bill
of sale, mortgage, receipt, agreement,
contract, certificate, gift, sale, affidavit,
or statement; the making of any
payment; the setting off of any
obligation or credit; the appointment of
any agent, trustee, or fiduciary; the
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creation or transfer of any lien; the
issuance, docketing, filing, or levy of or
under any judgment, decree,
attachment, injunction, execution, or
other judicial or administrative process
or order, or the service of any
garnishment; the acquisition of any
interest of any nature whatsoever by
reason of a judgment or decree of any
foreign country; the fulfillment of any
condition; the exercise of any power of
appointment, power of attorney, or
other power; or the acquisition,
disposition, transportation, importation,
exportation, or withdrawal of any
security.
§ 551.315
Transitional Federal Institutions.
The term Transitional Federal
Institutions means the Transitional
Federal Charter of the Somali Republic
adopted in February 2004 and the
Somali federal institutions established
pursuant to such charter, and includes
their agencies, instrumentalities, and
controlled entities.
§ § 551.316
United States.
The term United States means the
United States, its territories and
possessions, and all areas under the
jurisdiction or authority thereof.
§ 551.317
person.
United States person; U.S.
The term United States person or U.S.
person means any United States citizen,
permanent resident alien, entity
organized under the laws of the United
States or any jurisdiction within the
United States (including foreign
branches), or any person in the United
States.
§ 551.318
U.S. financial institution.
The term U.S. financial institution
means any U.S. entity (including its
foreign branches) that is engaged in the
business of accepting deposits, making,
granting, transferring, holding, or
brokering loans or other extensions of
credit, or purchasing or selling foreign
exchange, securities, commodity futures
or options, or procuring purchasers and
sellers thereof, as principal or agent. It
includes depository institutions, banks,
savings banks, trust companies,
securities brokers and dealers, futures
and options brokers and dealers,
forward contract and foreign exchange
merchants, securities and commodities
exchanges, clearing corporations,
investment companies, employee
benefit plans, and U.S. holding
companies, U.S. affiliates, or U.S.
subsidiaries of any of the foregoing. This
term includes those branches, offices,
and agencies of foreign financial
institutions that are located in the
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United States, but not such institutions’
foreign branches, offices, or agencies.
Subpart D—Interpretations
§ 551.401
Reference to amended sections.
(a) Reference to any section in this
part is a reference to the same as
currently amended, unless the reference
includes a specific date. See 44 U.S.C.
1510.
(b) Reference to any ruling, order,
instruction, direction, or license issued
pursuant to this part is a reference to the
same as currently amended unless
otherwise so specified.
§ 551.402
Effect of amendment.
Unless otherwise specifically
provided, any amendment,
modification, or revocation of any
provision in or appendix to this part or
chapter or of any order, regulation,
ruling, instruction, or license issued by
OFAC does not affect any act done or
omitted, or any civil or criminal
proceeding commenced or pending,
prior to such amendment, modification,
or revocation. All penalties, forfeitures,
and liabilities under any such order,
regulation, ruling, instruction, or license
continue and may be enforced as if such
amendment, modification, or revocation
had not been made.
§ 551.403 Termination and acquisition of
an interest in blocked property.
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(a) Whenever a transaction licensed or
authorized by or pursuant to this part
results in the transfer of property
(including any property interest) away
from a person whose property and
interests in property are blocked
pursuant to § 551.201, such property
shall no longer be deemed to be
property blocked pursuant to § 551.201,
unless there exists in the property
another interest that is blocked pursuant
to § 551.201, the transfer of which has
not been effected pursuant to license or
other authorization.
(b) Unless otherwise specifically
provided in a license or authorization
issued pursuant to this part, if property
(including any property interest) is
transferred or attempted to be
transferred to a person whose property
and interests in property are blocked
pursuant to § 551.201, such property
shall be deemed to be property in which
such person has an interest and
therefore blocked.
§ 551.404 Transactions ordinarily incident
to a licensed transaction.
(a) Any transaction ordinarily
incident to a licensed transaction and
necessary to give effect thereto is also
authorized, except:
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(1) An ordinarily incident transaction,
not explicitly authorized within the
terms of the license, by or with a person
whose property and interests in
property are blocked pursuant to
§ 551.201; or
(2) An ordinarily incident transaction,
not explicitly authorized within the
terms of the license, involving a debit to
a blocked account or a transfer of
blocked property.
(b) For example, a license authorizing
a person to complete a securities sale
involving Company A, whose property
and interests in property are blocked
pursuant to § 551.201, also authorizes
other persons to engage in activities that
are ordinarily incident and necessary to
complete the sale, including
transactions by the buyer, broker,
transfer agents, and banks, provided that
such other persons are not themselves
persons whose property and interests in
property are blocked pursuant to
§ 551.201.
§ 551.405
Provision of services.
(a) The prohibitions on transactions
contained in § 551.201 apply to services
performed in the United States or by
U.S. persons, wherever located,
including by a foreign branch of an
entity located in the United States:
(1) On behalf of or for the benefit of
a person whose property and interests
in property are blocked pursuant to
§ 551.201; or
(2) With respect to property interests
of any person whose property and
interests in property are blocked
pursuant to § 551.201.
(b) For example, U.S. persons may
not, except as authorized by or pursuant
to this part, provide legal, accounting,
financial, brokering, freight forwarding,
transportation, public relations, or other
services to a person whose property and
interests in property are blocked
pursuant to § 551.201.
Note 1 to § 551.405. See §§ 551.507 and
551.509 on licensing policy with regard to
the provision of certain legal and emergency
medical services.
§ 551.406 Offshore transactions involving
blocked property.
The prohibitions in § 551.201 on
transactions or dealings involving
blocked property, as defined in
§ 551.303, apply to transactions by any
U.S. person in a location outside the
United States.
§ 551.407 Payments from blocked
accounts to satisfy obligations prohibited.
Pursuant to § 551.201, no debits may
be made to a blocked account to pay
obligations to U.S. persons or other
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22353
persons, except as authorized by or
pursuant to this part.
Note 1 to § 551.407. See also § 551.502(e),
which provides that no license or other
authorization contained in or issued
pursuant to this part authorizes transfers of
or payments from blocked property or debits
to blocked accounts unless the license or
other authorization explicitly authorizes the
transfer of or payment from blocked property
or the debit to a blocked account.
§ 551.408
Charitable contributions.
Unless specifically authorized by
OFAC pursuant to this part, no
charitable contribution of funds, goods,
services, or technology, including
contributions to relieve human
suffering, such as food, clothing, or
medicine, may be made by, to, or for the
benefit of, or received from, a person
whose property and interests in
property are blocked pursuant to
§ 551.201. For the purposes of this part,
a contribution is made by, to, or for the
benefit of, or received from, a person
whose property and interests in
property are blocked pursuant to
§ 551.201 if made by, to, or in the name
of, or received from or in the name of,
such a person; if made by, to, or in the
name of, or received from or in the
name of, an entity or individual acting
for or on behalf of, or owned or
controlled by, such a person; or if made
in an attempt to violate, to evade, or to
avoid the bar on the provision of
contributions by, to, or for the benefit of
such a person, or the receipt of
contributions from such a person.
§ 551.409 Credit extended and cards
issued by financial institutions to a person
whose property and interests in property
are blocked.
The prohibition in § 551.201 on
dealing in property subject to that
section prohibits U.S. financial
institutions from performing under any
existing credit agreements, including
charge cards, debit cards, or other credit
facilities issued by a financial
institution to a person whose property
and interests in property are blocked
pursuant to § 551.201.
§ 551.410
Setoffs prohibited.
A setoff against blocked property
(including a blocked account), whether
by a U.S. bank or other U.S. person, is
a prohibited transfer under § 551.201 if
effected after the effective date.
§ 551.411 Entities owned by one or more
persons whose property and interests in
property are blocked.
Persons whose property and interests
in property are blocked pursuant to
§ 551.201 have an interest in all
property and interests in property of an
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entity in which such persons directly or
indirectly own, whether individually or
in the aggregate, a 50 percent or greater
interest. The property and interests in
property of such an entity, therefore, are
blocked, and such an entity is a person
whose property and interests in
property are blocked pursuant to
§ 551.201, regardless of whether the
name of the entity is incorporated into
OFAC’s Specially Designated Nationals
and Blocked Persons List (SDN List).
Subpart E—Licenses, Authorizations,
and Statements of Licensing Policy
§ 551.501 General and specific licensing
procedures.
For provisions relating to licensing
procedures, see part 501, subpart E, of
this chapter. Licensing actions taken
pursuant to part 501 of this chapter with
respect to the prohibitions contained in
this part are considered actions taken
pursuant to this part. General licenses
and statements of licensing policy
relating to this part also may be
available through the Somalia Sanctions
page on OFAC’s website:
www.treasury.gov/ofac.
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§ 551.502 Effect of license or other
authorization.
(a) No license or other authorization
contained in this part, or otherwise
issued by OFAC, authorizes or validates
any transaction effected prior to the
issuance of such license or other
authorization, unless specifically
provided in such license or
authorization.
(b) No regulation, ruling, instruction,
or license authorizes any transaction
prohibited under this part unless the
regulation, ruling, instruction, or license
is issued by OFAC and specifically
refers to this part. No regulation, ruling,
instruction, or license referring to this
part shall be deemed to authorize any
transaction prohibited by any other part
of this chapter unless the regulation,
ruling, instruction, or license
specifically refers to such part.
(c) Any regulation, ruling, instruction,
or license authorizing any transaction
prohibited under this part has the effect
of removing a prohibition contained in
this part from the transaction, but only
to the extent specifically stated by its
terms. Unless the regulation, ruling,
instruction, or license otherwise
specifies, such an authorization does
not create any right, duty, obligation,
claim, or interest in, or with respect to,
any property that would not otherwise
exist under ordinary principles of law.
(d) Nothing contained in this part
shall be construed to supersede the
requirements established under any
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other provision of law or to relieve a
person from any requirement to obtain
a license or other authorization from
another department or agency of the
U.S. Government in compliance with
applicable laws and regulations subject
to the jurisdiction of that department or
agency. For example, exports of goods,
services, or technical data that are not
prohibited by this part or that do not
require a license by OFAC nevertheless
may require authorization by the U.S.
Department of Commerce, the U.S.
Department of State, or other agencies of
the U.S. Government.
(e) No license or other authorization
contained in or issued pursuant to this
part authorizes transfers of or payments
from blocked property or debits to
blocked accounts unless the license or
other authorization explicitly authorizes
the transfer of or payment from blocked
property or the debit to a blocked
account.
(f) Any payment relating to a
transaction authorized in or pursuant to
this part that is routed through the U.S.
financial system should reference the
relevant OFAC general or specific
license authorizing the payment to
avoid the blocking or rejection of the
transfer.
§ 551.503
Exclusion from licenses.
OFAC reserves the right to exclude
any person, property, transaction, or
class thereof from the operation of any
license or from the privileges conferred
by any license. OFAC also reserves the
right to restrict the applicability of any
license to particular persons, property,
transactions, or classes thereof. Such
actions are binding upon actual or
constructive notice of the exclusions or
restrictions.
§ 551.504 Payments and transfers to
blocked accounts in U.S. financial
institutions.
Any payment of funds or transfer of
credit in which a person whose property
and interests in property are blocked
pursuant to § 551.201 has any interest
that comes within the possession or
control of a U.S. financial institution
must be blocked in an account on the
books of that financial institution. A
transfer of funds or credit by a U.S.
financial institution between blocked
accounts in its branches or offices is
authorized, provided that no transfer is
made from an account within the
United States to an account held outside
the United States, and further provided
that a transfer from a blocked account
may be made only to another blocked
account held in the same name.
Note 1 to § 551.504. See § 501.603 of this
chapter for mandatory reporting
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requirements regarding financial transfers.
See also § 551.203 concerning the obligation
to hold blocked funds in interest-bearing
accounts.
§ 551.505 Entries in certain accounts for
normal service charges.
(a) A U.S. financial institution is
authorized to debit any blocked account
held at that financial institution in
payment or reimbursement for normal
service charges owed it by the owner of
that blocked account.
(b) As used in this section, the term
normal service charges shall include
charges in payment or reimbursement
for interest due; cable, telegraph,
internet, or telephone charges; postage
costs; custody fees; small adjustment
charges to correct bookkeeping errors;
and, but not by way of limitation,
minimum balance charges, notary and
protest fees, and charges for reference
books, photocopies, credit reports,
transcripts of statements, registered
mail, insurance, stationery and supplies,
and other similar items.
§ 551.506 Investment and reinvestment of
certain funds.
Subject to the requirements of
§ 551.203, U.S. financial institutions are
authorized to invest and reinvest assets
blocked pursuant to § 551.201, subject
to the following conditions:
(a) The assets representing such
investments and reinvestments are
credited to a blocked account or
subaccount that is held in the same
name at the same U.S. financial
institution, or within the possession or
control of a U.S. person, but funds shall
not be transferred outside the United
States for this purpose;
(b) The proceeds of such investments
and reinvestments shall not be credited
to a blocked account or subaccount
under any name or designation that
differs from the name or designation of
the specific blocked account or
subaccount in which such funds or
securities were held; and
(c) No immediate financial or
economic benefit accrues (e.g., through
pledging or other use) to a person whose
property and interests in property are
blocked pursuant to § 551.201.
§ 551.507
services.
Provision of certain legal
(a) The provision of the following
legal services to or on behalf of persons
whose property and interests in
property are blocked pursuant to
§ 551.201 is authorized, provided that
any receipt of payment of professional
fees and reimbursement of incurred
expenses must be authorized pursuant
to § 551.508, which authorizes certain
payments for legal services from funds
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originating outside the United States;
via specific license; or otherwise
pursuant to this part:
(1) Provision of legal advice and
counseling on the requirements of and
compliance with the laws of the United
States or any jurisdiction within the
United States, provided that such advice
and counseling are not provided to
facilitate transactions in violation of this
part;
(2) Representation of persons named
as defendants in or otherwise made
parties to legal, arbitration, or
administrative proceedings before any
U.S. federal, state, or local court or
agency;
(3) Initiation and conduct of legal,
arbitration, or administrative
proceedings before any U.S. federal,
state, or local court or agency;
(4) Representation of persons before
any U.S. federal, state, or local court or
agency with respect to the imposition,
administration, or enforcement of U.S.
sanctions against such persons; and
(5) Provision of legal services in any
other context in which prevailing U.S.
law requires access to legal counsel at
public expense.
(b) The provision of any other legal
services to or on behalf of persons
whose property and interests in
property are blocked pursuant to
§ 551.201 not otherwise authorized in
this part, requires the issuance of a
specific license.
(c) U.S. persons do not need to obtain
specific authorization to provide related
services, such as making filings and
providing other administrative services,
that are ordinarily incident to the
provision of services authorized by
paragraph (a) of this section.
Additionally, U.S. persons who provide
services authorized by paragraph (a) of
this section do not need to obtain
specific authorization to contract for
related services that are ordinarily
incident to the provision of those legal
services, such as those provided by
private investigators or expert
witnesses, or to pay for such services.
See § 551.404.
(d) Entry into a settlement agreement
or the enforcement of any lien,
judgment, arbitral award, decree, or
other order through execution,
garnishment, or other judicial process
purporting to transfer or otherwise alter
or affect property or interests in
property blocked pursuant to § 551.201
is prohibited unless licensed pursuant
to this part.
Note 1 to § 551.507. Pursuant to part 501,
subpart E, of this chapter, U.S. persons
seeking administrative reconsideration or
judicial review of their designation or the
blocking of their property and interests in
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property may apply for a specific license
from OFAC to authorize the release of certain
blocked funds for the payment of
professional fees and reimbursement of
incurred expenses for the provision of such
legal services where alternative funding
sources are not available.
§ 551.508 Payments for legal services from
funds originating outside the United States.
(a) Professional fees and incurred
expenses. (1) Receipt of payment of
professional fees and reimbursement of
incurred expenses for the provision of
legal services authorized pursuant to
§ 551.507(a) to or on behalf of any
person whose property and interests in
property are blocked pursuant to
§ 551.201 is authorized from funds
originating outside the United States,
provided that the funds do not originate
from:
(i) A source within the United States;
(ii) Any source, wherever located,
within the possession or control of a
U.S. person; or
(iii) Any individual or entity, other
than the person on whose behalf the
legal services authorized pursuant to
§ 551.507(a) are to be provided, whose
property and interests in property are
blocked pursuant to any part of this
chapter or any Executive order or
statute.
(2) Nothing in paragraph (a) of this
section authorizes payments for legal
services using funds in which any other
person whose property and interests in
property are blocked pursuant to
§ 551.201, any other part of this chapter,
or any Executive order or statute has an
interest.
(b) Reports. (1) U.S. persons who
receive payments pursuant to paragraph
(a) of this section must submit annual
reports no later than 30 days following
the end of the calendar year during
which the payments were received
providing information on the funds
received. Such reports shall specify:
(i) The individual or entity from
whom the funds originated and the
amount of funds received; and
(ii) If applicable:
(A) The names of any individuals or
entities providing related services to the
U.S. person receiving payment in
connection with authorized legal
services, such as private investigators or
expert witnesses;
(B) A general description of the
services provided; and
(C) The amount of funds paid in
connection with such services.
(2) The reports, which must reference
this section, are to be submitted to
OFAC using one of the following
methods:
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(i) Email (preferred method):
OFAC.Regulations.Reports@
treasury.gov; or
(ii) U.S. mail: OFAC Regulations
Reports, Office of Foreign Assets
Control, U.S. Department of the
Treasury, 1500 Pennsylvania Avenue
NW, Freedman’s Bank Building,
Washington, DC 20220.
§ 551.509
Emergency medical services.
The provision and receipt of
nonscheduled emergency medical
services that are prohibited by this part
are authorized.
§ 551.510 Official business of the United
States Government.
All transactions prohibited by this
part that are for the conduct of the
official business of the United States
Government by employees, grantees, or
contractors thereof are authorized.
§ 551.511 Official activities of international
organizations.
All transactions and activities
prohibited by this part that are for the
conduct of the official business of the
United Nations and its Specialized
Agencies, Programmes, Funds, and
Related Organizations by employees,
contractors, or grantees thereof are
authorized.
Note 1 to § 551.511. For an organizational
chart listing the Specialized Agencies,
Programmes, Funds, and Related
Organizations of the United Nations, see the
following page on the United Nations
website: https://www.unsceb.org/directory.
Subpart F—Reports
§ 551.601
Records and reports.
For provisions relating to required
records and reports, see part 501,
subpart C, of this chapter.
Recordkeeping and reporting
requirements imposed by part 501 of
this chapter with respect to the
prohibitions contained in this part are
considered requirements arising
pursuant to this part.
Subpart G—Penalties and Findings of
Violation
§ 551.701
Penalties.
(a) Section 206 of the International
Emergency Economic Powers Act (50
U.S.C. 1705) (IEEPA) is applicable to
violations of the provisions of any
license, ruling, regulation, order,
directive, or instruction issued by or
pursuant to the direction or
authorization of the Secretary of the
Treasury pursuant to this part or
otherwise under IEEPA.
(1) A civil penalty not to exceed the
amount set forth in section 206 of IEEPA
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may be imposed on any person who
violates, attempts to violate, conspires
to violate, or causes a violation of any
license, order, regulation, or prohibition
issued under IEEPA.
(2) IEEPA provides for a maximum
civil penalty not to exceed the greater of
$311,562or an amount that is twice the
amount of the transaction that is the
basis of the violation with respect to
which the penalty is imposed.
(3) A person who willfully commits,
willfully attempts to commit, willfully
conspires to commit, or aids or abets in
the commission of a violation of any
license, order, regulation, or prohibition
may, upon conviction, be fined not
more than $1,000,000, or if a natural
person, be imprisoned for not more than
20 years, or both.
(b)(1) The civil penalties provided in
IEEPA are subject to adjustment
pursuant to the Federal Civil Penalties
Inflation Adjustment Act of 1990 (Pub.
L. 101–410, as amended, 28 U.S.C. 2461
note).
(2) The criminal penalties provided in
IEEPA are subject to adjustment
pursuant to 18 U.S.C. 3571.
(c) Pursuant to 18 U.S.C. 1001,
whoever, in any matter within the
jurisdiction of the executive, legislative,
or judicial branch of the Government of
the United States, knowingly and
willfully falsifies, conceals, or covers up
by any trick, scheme, or device a
material fact; or makes any materially
false, fictitious, or fraudulent statement
or representation; or makes or uses any
false writing or document knowing the
same to contain any materially false,
fictitious, or fraudulent statement or
entry shall be fined under title 18,
United States Code, imprisoned, or
both.
(d) Section 5 of the United Nations
Participation Act, as amended (22
U.S.C. 287c(b)) (UNPA), provides that
any person who willfully violates or
evades or attempts to violate or evade
any order, rule, or regulation issued by
the President pursuant to the authority
granted in that section shall, upon
conviction, be fined not more than
$1,000,000 or, if a natural person, be
imprisoned for not more than 20 years,
or both.
(e) Violations involving transactions
described at section 203(b)(1) of IEEPA
shall be subject only to the penalties set
forth in paragraph (d) of this section.
(f) Violations of this part may also be
subject to other applicable laws.
§ 551.702
Pre-Penalty Notice; settlement.
(a) When required. If OFAC has
reason to believe that there has occurred
a violation of any provision of this part
or a violation of the provisions of any
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license, ruling, regulation, order,
directive, or instruction issued by or
pursuant to the direction or
authorization of the Secretary of the
Treasury pursuant to this part or
otherwise under the International
Emergency Economic Powers Act (50
U.S.C. 1701–1706) and determines that
a civil monetary penalty is warranted,
OFAC will issue a Pre-Penalty Notice
informing the alleged violator of the
agency’s intent to impose a monetary
penalty. A Pre-Penalty Notice shall be in
writing. The Pre-Penalty Notice may be
issued whether or not another agency
has taken any action with respect to the
matter. For a description of the contents
of a Pre-Penalty Notice, see appendix A
to part 501 of this chapter.
(b) Response—(1) Right to respond.
An alleged violator has the right to
respond to a Pre-Penalty Notice by
making a written presentation to OFAC.
For a description of the information that
should be included in such a response,
see appendix A to part 501 of this
chapter.
(2) Deadline for response. A response
to a Pre-Penalty Notice must be made
within 30 days as set forth in paragraphs
(b)(2)(i) and (ii) of this section. The
failure to submit a response within 30
days shall be deemed to be a waiver of
the right to respond.
(i) Computation of time for response.
A response to a Pre-Penalty Notice must
be postmarked or date-stamped by the
U.S. Postal Service (or foreign postal
service, if mailed abroad) or courier
service provider (if transmitted to OFAC
by courier), or dated if sent by email, on
or before the 30th day after the postmark
date on the envelope in which the PrePenalty Notice was mailed or date the
Pre-Penalty Notice was emailed. If the
Pre-Penalty Notice was personally
delivered by a non-U.S. Postal Service
agent authorized by OFAC, a response
must be postmarked or date-stamped on
or before the 30th day after the date of
delivery.
(ii) Extensions of time for response. If
a due date falls on a federal holiday or
weekend, that due date is extended to
include the following business day. Any
other extensions of time will be granted,
at the discretion of OFAC, only upon
specific request to OFAC.
(3) Form and method of response. A
response to a Pre-Penalty Notice need
not be in any particular form, but it
must be typewritten and signed by the
alleged violator or a representative
thereof, contain information sufficient
to indicate that it is in response to the
Pre-Penalty Notice, and include the
OFAC identification number listed on
the Pre-Penalty Notice. A copy of the
written response may be sent by
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facsimile, but the original also must be
sent to OFAC’s Office of Compliance
and Enforcement by mail or courier or
email and must be postmarked or datestamped in accordance with paragraph
(b)(2) of this section.
(c) Settlement. Settlement discussion
may be initiated by OFAC, the alleged
violator, or the alleged violator’s
authorized representative. For a
description of practices with respect to
settlement, see appendix A to part 501
of this chapter.
(d) Guidelines. Guidelines for the
imposition or settlement of civil
penalties by OFAC are contained in
appendix A to part 501 of this chapter.
(e) Representation. A representative of
the alleged violator may act on behalf of
the alleged violator, but any oral
communication with OFAC prior to a
written submission regarding the
specific allegations contained in the PrePenalty Notice must be preceded by a
written letter of representation, unless
the Pre-Penalty Notice was served upon
the alleged violator in care of the
representative.
§ 551.703
Penalty imposition.
If, after considering any written
response to the Pre-Penalty Notice and
any relevant facts, OFAC determines
that there was a violation by the alleged
violator named in the Pre-Penalty
Notice and that a civil monetary penalty
is appropriate, OFAC may issue a
Penalty Notice to the violator containing
a determination of the violation and the
imposition of the monetary penalty. For
additional details concerning issuance
of a Penalty Notice, see appendix A to
part 501 of this chapter. The issuance of
the Penalty Notice shall constitute final
agency action. The violator has the right
to seek judicial review of that final
agency action in federal district court.
§ 551.704 Administrative collection;
referral to United States Department of
Justice.
In the event that the violator does not
pay the penalty imposed pursuant to
this part or make payment arrangements
acceptable to OFAC, the matter may be
referred for administrative collection
measures by the Department of the
Treasury or to the United States
Department of Justice for appropriate
action to recover the penalty in a civil
suit in a federal district court.
§ 551.705
Findings of Violation.
(a) When issued. (1) OFAC may issue
an initial Finding of Violation that
identifies a violation if OFAC:
(i) Determines that there has occurred
a violation of any provision of this part,
or a violation of the provisions of any
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license, ruling, regulation, order,
directive, or instruction issued by or
pursuant to the direction or
authorization of the Secretary of the
Treasury pursuant to this part or
otherwise under the International
Emergency Economic Powers Act (50
U.S.C. 1701–1706);
(ii) Considers it important to
document the occurrence of a violation;
and
(iii) Based on the Guidelines
contained in appendix A to part 501 of
this chapter, concludes that an
administrative response is warranted
but that a civil monetary penalty is not
the most appropriate response.
(2) An initial Finding of Violation
shall be in writing and may be issued
whether or not another agency has taken
any action with respect to the matter.
For additional details concerning
issuance of a Finding of Violation, see
appendix A to part 501 of this chapter.
(b) Response—(1) Right to respond.
An alleged violator has the right to
contest an initial Finding of Violation
by providing a written response to
OFAC.
(2) Deadline for response; Default
determination. A response to an initial
Finding of Violation must be made
within 30 days as set forth in paragraphs
(b)(2)(i) and (ii) of this section. The
failure to submit a response within 30
days shall be deemed to be a waiver of
the right to respond, and the initial
Finding of Violation will become final
and will constitute final agency action.
The violator has the right to seek
judicial review of that final agency
action in federal district court.
(i) Computation of time for response.
A response to an initial Finding of
Violation must be postmarked or datestamped by the U.S. Postal Service (or
foreign postal service, if mailed abroad)
or courier service provider (if
transmitted to OFAC by courier), or
dated if sent by email, on or before the
30th day after the postmark date on the
envelope in which the initial Finding of
Violation was served or date the Finding
of Violation was sent by email. If the
initial Finding of Violation was
personally delivered by a non-U.S.
Postal Service agent authorized by
OFAC, a response must be postmarked
or date-stamped on or before the 30th
day after the date of delivery.
(ii) Extensions of time for response. If
a due date falls on a federal holiday or
weekend, that due date is extended to
include the following business day. Any
other extensions of time will be granted,
at the discretion of OFAC, only upon
specific request to OFAC.
(3) Form and method of response. A
response to an initial Finding of
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Violation need not be in any particular
form, but it must be typewritten and
signed by the alleged violator or a
representative thereof, contain
information sufficient to indicate that it
is in response to the initial Finding of
Violation, and include the OFAC
identification number listed on the
initial Finding of Violation. A copy of
the written response may be sent by
facsimile, but the original also must be
sent to OFAC by mail or courier or
email and must be postmarked or datestamped in accordance with paragraph
(b)(2) of this section.
(4) Information that should be
included in response. Any response
should set forth in detail why the
alleged violator either believes that a
violation of the regulations did not
occur and/or why a Finding of Violation
is otherwise unwarranted under the
circumstances, with reference to the
General Factors Affecting
Administrative Action set forth in the
Guidelines contained in appendix A to
part 501 of this chapter. The response
should include all documentary or other
evidence available to the alleged
violator that supports the arguments set
forth in the response. OFAC will
consider all relevant materials
submitted in the response.
(c) Determination—(1) Determination
that a Finding of Violation is warranted.
If, after considering the response, OFAC
determines that a final Finding of
Violation should be issued, OFAC will
issue a final Finding of Violation that
will inform the violator of its decision.
A final Finding of Violation shall
constitute final agency action. The
violator has the right to seek judicial
review of that final agency action in
federal district court.
(2) Determination that a Finding of
Violation is not warranted. If, after
considering the response, OFAC
determines a Finding of Violation is not
warranted, then OFAC will inform the
alleged violator of its decision not to
issue a final Finding of Violation.
Note 1 to paragraph (c)(2). A
determination by OFAC that a final Finding
of Violation is not warranted does not
preclude OFAC from pursuing other
enforcement actions consistent with the
Guidelines contained in appendix A to part
501 of this chapter.
(d) Representation. A representative
of the alleged violator may act on behalf
of the alleged violator, but any oral
communication with OFAC prior to a
written submission regarding the
specific alleged violations contained in
the initial Finding of Violation must be
preceded by a written letter of
representation, unless the initial
Finding of Violation was served upon
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the alleged violator in care of the
representative.
Subpart H—Procedures
§ 551.801
Procedures.
For license application procedures
and procedures relating to amendments,
modifications, or revocations of
licenses; administrative decisions;
rulemaking; and requests for documents
pursuant to the Freedom of Information
and Privacy Acts (5 U.S.C. 552 and
552a), see part 501, subpart E, of this
chapter.
§ 551.802 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 (E.O.) 13536 of April
12, 2010, E.O. 13620 of July 20, 2012,
and any further Executive orders
relating to the national emergency
declared in E.O. 13536, 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.
Subpart I—Paperwork Reduction Act
§ 551.901
Paperwork Reduction Act notice.
For approval by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(44 U.S.C. 3507) of information
collections relating to recordkeeping
and reporting requirements, licensing
procedures, and other procedures, see
§ 501.901 of this chapter. An agency
may not conduct or sponsor, and a
person is not required to respond to, a
collection of information unless it
displays a valid control number
assigned by OMB.
Bradley T. Smith,
Acting Director, Office of Foreign Assets
Control.
[FR Doc. 2021–08836 Filed 4–27–21; 8:45 am]
BILLING CODE 4810–AL–P
DEPARTMENT OF HOMELAND
SECURITY
Federal Emergency Management
Agency
44 CFR Part 64
[Docket ID FEMA–2021–0003; Internal
Agency Docket No. FEMA–8677]
Suspension of Community Eligibility
Federal Emergency
Management Agency, Department of
Homeland Security (DHS).
ACTION: Final rule.
AGENCY:
E:\FR\FM\28APR1.SGM
28APR1
Agencies
[Federal Register Volume 86, Number 80 (Wednesday, April 28, 2021)]
[Rules and Regulations]
[Pages 22346-22357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08836]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 551
Somalia 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 Somalia Sanctions Regulations and
reissuing them in their entirety to further implement an April 12, 2010
Somalia-related Executive order, and to implement a July 20, 2012
Somalia-related Executive order. This final rule replaces the
regulations that were published in abbreviated form on May 5, 2010 and
includes additional interpretive and definitional guidance, general
licenses, statements of licensing policy, and other regulatory
provisions that will provide further guidance to the public. Due to the
number of regulatory sections being updated or added, OFAC is reissuing
the Somalia Sanctions Regulations in their entirety.
DATES: This rule is effective April 28, 2021.
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
On May 5, 2010, OFAC issued the Somalia Sanctions Regulations, 31
CFR part 551 (75 FR 24394, May 5, 2010) (the ``Regulations''), to
implement Executive Order (E.O.) 13536 of April 12, 2010, ``Blocking
Property of Certain Persons Contributing to the Conflict in Somalia''
(75 FR 19869, April 15, 2010), pursuant to authorities delegated to the
Secretary of the Treasury in E.O. 13536. The Regulations were initially
issued in abbreviated form for the purpose of providing immediate
guidance to the public. OFAC is revising the Regulations to further
implement E.O. 13536 and to implement E.O. 13620 of July 20, 2012,
``Taking Additional Steps to Address the National Emergency With
Respect to Somalia'' (77 FR 43483, July 24, 2012), which amended E.O.
13536. OFAC is amending and reissuing the Regulations as a more
comprehensive set of regulations that includes additional interpretive
and definitional guidance, general licenses, statements of licensing
policy, and other regulatory provisions that will provide further
guidance to the public. Due to the number of regulatory sections being
updated or added, OFAC is reissuing the Regulations in their entirety.
E.O. 13536
On April 12, 2010, the President, invoking the authority of, inter
alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-
1706) (IEEPA) and the United Nations Participation Act, as amended (22
U.S.C. 287c) (UNPA), issued E.O. 13536. In E.O. 13536, the President
found that the deterioration of the security situation and the
persistence of violence in Somalia, and acts of piracy and armed
robbery at sea off the coast of Somalia, and violations of a United
Nations arms embargo, constitute an unusual and extraordinary threat to
the national security and foreign policy of the United States and
declared a national emergency to deal with that threat.
Section 1(a) of E.O. 13536 blocked, with certain exceptions, all
property and interests in property that are in the United States, that
come within the United States, or that are or come within the
possession or control of any U.S. person of: (i) The persons listed in
the Annex to E.O. 13536; and (ii) any person determined by the
Secretary of the Treasury, in consultation with the Secretary of State:
(A) To have engaged in acts that directly or indirectly threaten the
peace, security, or stability of Somalia, including: (1) Acts that
threaten the Djibouti Agreement of August 18, 2008, or the political
process; or (2) acts that threaten the Transitional Federal
Institutions, the African Union Mission in Somalia (AMISOM), or other
international peacekeeping operations related to Somalia; (B) to have
obstructed the delivery of humanitarian assistance to Somalia, or
access to, or distribution of, humanitarian assistance in Somalia; (C)
to have directly or indirectly supplied, sold, or transferred to
Somalia, or to have been the recipient in the territory of Somalia of,
arms or any related materiel, or any technical advice, training, or
assistance, including financing and financial assistance, related to
military activities; (D) to have materially assisted, sponsored, or
provided financial, material, logistical, or technical support for, or
goods or services in support of, the activities described above or any
person whose property and interests in property are blocked pursuant to
E.O. 13536; or (E) to be owned or controlled by, or to have acted or
purported to act for or on behalf of, directly or indirectly, any
person whose property and interests in property are blocked pursuant to
E.O. 13536. The property and interests in property of the persons
described above may not be transferred, paid, exported, withdrawn, or
otherwise dealt in. As discussed further below, section 1(a) of E.O.
13536 was amended by E.O. 13620.
In Section 1(b) of E.O. 13536, the President determined that acts
of piracy or armed robbery at sea off the coast of Somalia threaten the
peace, security, or stability of Somalia.
In Section 1(c) of E.O. 13536, the President further determined
that the making of donations of certain articles, such as food,
clothing, and medicine, intended to be used to relieve human suffering,
as specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by,
to, or for the benefit of any person whose property and interests in
property are blocked pursuant to E.O. 13536 would seriously impair his
ability to deal with the national emergency declared in E.O. 13536. The
President therefore prohibited the provision of such donations unless
authorized by OFAC.
Section 1(d) of E.O. 13536 provides that the prohibition on any
transaction or dealing in blocked property or interests in property
includes the making of any contribution or provision of funds, goods,
or services by, to, or for
[[Page 22347]]
the benefit of any person whose property and interests in property are
blocked pursuant to E.O. 13536, and the receipt of any contribution or
provision of funds, goods, or services from any such person.
Section 2 of E.O. 13536 prohibits any transaction by a U.S. person
or within the United States that evades or avoids, has the purpose of
evading or avoiding, causes a violation of, or attempts to violate any
of the prohibitions set forth in E.O. 13536, as well as any conspiracy
formed to violate such prohibitions.
Section 3 of E.O. 13536 provides definitions for certain terms used
in the order.
Section 5 of E.O. 13536 authorizes the Secretary of the Treasury,
in consultation with the Secretary of State, to take such actions,
including the promulgation of rules and regulations, and to employ all
powers granted to the President by IEEPA and the UNPA, as may be
necessary to carry out the purposes of E.O. 13536. Section 5 also
provides that the Secretary of the Treasury may redelegate any of these
functions to other officers and agencies of the U.S. Government.
E.O. 13620
On July 20, 2012, pursuant to, inter alia, IEEPA and the UNPA, the
President issued E.O. 13620. In E.O. 13620, the President took
additional steps regarding the national emergency with respect to the
situation in Somalia declared in E.O. 13536, in view of United Nations
Security Council Resolution 2036 of February 22, 2012, and Resolution
2002 of July 29, 2011, and to address: Exports of charcoal from
Somalia, which generate significant revenue for al-Shabaab; the
misappropriation of Somali public assets; and certain acts of violence
committed against civilians in Somalia, all of which contribute to the
deterioration of the security situation and the persistence of violence
in Somalia. E.O. 13620 amends E.O. 13536, by replacing subsection
(1)(a) of E.O. 13536 in its entirety but does not amend the Annex to
E.O. 13536 as originally issued, and imposes new prohibitions.
New section 1(a) of E.O. 13536 as amended by E.O. 13620 (``amended
E.O. 13536'') blocks, with certain exceptions, all property and
interests in property that are in the United States, that come within
the United States, or that are or come within the possession or control
of any United States person of: (i) The persons listed in the Annex to
amended E.O. 13536; and (ii) any person determined by the Secretary of
the Treasury, in consultation with the Secretary of State: (A) To have
engaged in acts that directly or indirectly threaten the peace,
security, or stability of Somalia, including: (1) Acts that threaten
the Djibouti Agreement of August 18, 2008, or the political process; or
(2) acts that threaten the Transitional Federal Institutions or future
Somali governing institutions, AMISOM, or other future international
peacekeeping operations related to Somalia; or (3) acts to
misappropriate Somali public assets; (B) to have obstructed the
delivery of humanitarian assistance to Somalia, or access to, or
distribution of, humanitarian assistance in Somalia; (C), to have
directly or indirectly supplied, sold, or transferred to Somalia, or to
have been the recipient in the territory of Somalia of, arms or any
related material, or any technical advice, training or assistance,
including financing and financial assistance, related to military
activities; (D) to be responsible for or complicit in, or responsible
for ordering, controlling, or otherwise directing, or to have
participated in, the commission of acts of violence targeting civilians
in Somalia, including killing and maiming, sexual and gender-based
violence, attacks on schools and hospitals, taking hostages, and forced
displacement; (E) to be a political or military leader recruiting or
using children in armed conflict in Somalia; (F) to have engaged,
directly or indirectly, in the import or export of charcoal from
Somalia on or after February 22, 2012; (G) to have materially assisted,
sponsored, or provided financial, material, logistical, or technical
support for, or goods or services in support of, the activities
described above or any person whose property and interests in property
are blocked pursuant to amended E.O. 13536; or (H) to be owned or
controlled by, or to have acted or purported to act for or on behalf
of, directly or indirectly, any person whose property and interests in
property are blocked pursuant to amended E.O. 13536. The property and
interests in property of the persons described above may not be
transferred, paid, exported, withdrawn, or otherwise dealt in. Because
E.O. 13620 did not amend the Annex to E.O. 13536, the term ``Annex to
amended E.O. 13536'' refers to the Annex to E.O. 13536 as originally
issued.
Section 2 of E.O. 13620 prohibits the importation into the United
States, directly or indirectly, of charcoal from Somalia.
Section 3 of E.O. 13620 prohibits any transaction by a United
States person or within the United States that evades or avoids, has
the purpose of evading or avoiding, causes a violation of, or attempts
to violate any of the prohibitions set forth in E.O. 13620, as well as
any conspiracy formed to violate such prohibitions.
Section 4 of E.O. 13620 provides definitions for certain terms used
in the order.
Section 5 of E.O. 13620 authorizes the Secretary of the Treasury,
in consultation with the Secretary of State, to take such actions,
including the promulgation of rules and regulations, and to employ all
powers granted to the President by IEEPA and the UNPA, as may be
necessary to carry out the purposes of E.O. 13620. Section 5 of E.O.
13620 also provides that the Secretary of the Treasury may redelegate
any of these functions to other officers and agencies of the U.S.
Government.
Current Regulatory Action
In furtherance of the purposes of E.O. 13536 and E.O. 13620, OFAC
is amending and reissuing the Regulations. The Regulations implement
targeted sanctions that are directed at persons determined to meet the
criteria set forth in Sec. 551.201 of the Regulations, as well as
sanctions that may be set forth in any further Executive orders issued
pursuant to the national emergency declared in E.O. 13536. The
sanctions in amended E.O. 13536 and E.O. 13620 do not generally
prohibit trade or the provision of banking or other financial services
to the country of Somalia. Instead, the sanctions in amended E.O. 13536
and E.O. 13620 apply where the transaction or service in question
involves property or interests in property that are blocked pursuant to
these sanctions, and prohibit the importation into the United States,
directly or indirectly, of charcoal from Somalia.
Subpart A of the Regulations clarifies the relation of this part to
other laws and regulations. Subpart B of the Regulations implements the
prohibitions contained in Sections 1 and 2 of amended E.O. 13536 and
sections 2 and 3 of E.O. 13620, as well as the prohibitions that may be
set forth in any further Executive orders issued pursuant to the
national emergency declared in E.O. 13536. See, e.g., Sec. Sec.
551.201 and 551.205. Persons identified in the Annex to amended E.O.
13536, designated by or under the authority of the Secretary of the
Treasury pursuant to amended E.O. 13536, or otherwise subject to the
blocking provisions of amended E.O. 13536, as well as persons who are
blocked pursuant to any further Executive orders issued pursuant to the
national emergency declared in E.O. 13536, are referred to throughout
the Regulations as ``persons whose property
[[Page 22348]]
and interests in property are blocked pursuant to Sec. 551.201.'' The
names of persons listed in, designated, or identified pursuant to
amended E.O. 13536, or listed in, designated, or identified pursuant to
any further Executive orders issued pursuant to the national emergency
declared in E.O. 13536, are published on OFAC's Specially Designated
Nationals and Blocked Persons List (SDN List), which is accessible via
OFAC's website. Those names also are published in the Federal Register
as they are added to the SDN List.
Sections 551.202 and 551.203 of subpart B detail the effect of
transfers of blocked property in violation of the Regulations and set
forth the requirement to hold blocked funds, such as currency, bank
deposits, or liquidated financial obligations, in interest-bearing
blocked accounts. Section 551.204 of subpart B provides that all
expenses incident to the maintenance of blocked tangible property shall
be the responsibility of the owners and operators of such property, and
that such expenses shall not be met from blocked funds, unless
otherwise authorized. The section further provides that blocked
property may, in OFAC's discretion, be sold or liquidated and the net
proceeds placed in a blocked interest-bearing account in the name of
the owner of the property.
Section 551.205 of subpart B prohibits any transaction that evades
or avoids, has the purpose of evading or avoiding, causes a violation
of, or attempts to violate any of the prohibitions set forth in Sec.
551.201 of the Regulations, and any conspiracy formed to violate such
prohibitions.
Section 551.206 of subpart B details transactions that are exempt
from the prohibitions of the Regulations pursuant to section 203(b)(1)
of IEEPA (50 U.S.C. 1702(b)(1)), which relates to personal
communications. Section 551.207 of subpart B sets out the prohibition
on the importation into the United States, directly or indirectly, of
charcoal from Somalia.
In subpart C of the Regulations, new definitions are being added to
other key terms used throughout the Regulations. Because these new
definitions were inserted in alphabetical order, the definitions that
were in the prior abbreviated set of regulations have been renumbered.
Similarly, in subpart D, which contains interpretive sections regarding
the Regulations, certain provisions have been added to those in the
prior abbreviated set of regulations. Section 551.411 explains that the
property and interests in property of an entity are blocked if the
entity is directly or indirectly owned, whether individually or in the
aggregate, 50 percent or more by one or more persons whose property and
interests in property are blocked, whether or not the entity itself is
incorporated into OFAC's SDN List.
Transactions otherwise prohibited by the Regulations but found to
be consistent with U.S. policy may be authorized by one of the general
licenses contained in subpart E of the Regulations or by a specific
license issued pursuant to the procedures described in subpart E of 31
CFR part 501. Subpart E of the Regulations also contains certain
statements of specific licensing policy in addition to the general
licenses. General licenses and statements of licensing policy relating
to this part also may be available through the Somalia sanctions page
on OFAC's website: www.treasury.gov/ofac.
OFAC is also incorporating several new general licenses into the
Regulations, making technical edits to certain existing general
licenses, and renumbering existing general licenses. Sections 551.506,
551.508, 551.510, and 551.511 authorize, respectively, certain
transactions relating to the investment of certain funds, payments for
legal services from funds originating outside the United States,
official business of the United States Government, and official
activities of international organizations. Section 551.506 was
renumbered as Sec. 551.507 and Sec. 551.507 was renumbered as Sec.
551.509. In Sec. 551.509, OFAC has removed the requirement that
payment for emergency medical services be specifically licensed.
Subpart F of the Regulations refers to subpart C of part 501 for
recordkeeping and reporting requirements. Subpart G of the Regulations
describes the civil and criminal penalties applicable to violations of
the Regulations, as well as the procedures governing the potential
imposition of a civil monetary penalty or issuance of a Finding of
Violation. Subpart G also refers to appendix A of part 501 for a more
complete description of these procedures.
Subpart H of the Regulations refers to subpart E of part 501 for
applicable provisions relating to administrative procedures and
contains a delegation of certain authorities of the Secretary of the
Treasury. Subpart I of the Regulations sets forth a Paperwork Reduction
Act notice.
Public Participation
Because the Regulations involve a foreign affairs function, the
provisions of E.O. 12866 of September 30, 1993, ``Regulatory Planning
and Review'' (58 FR 51735, October 4, 1993), and the Administrative
Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking,
opportunity for public participation, and delay in effective date are
inapplicable. Because no notice of proposed rulemaking is required for
this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not
apply.
Paperwork Reduction Act
The collections of information related to the Regulations are
contained in 31 CFR part 501 (the ``Reporting, Procedures and Penalties
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44
U.S.C. 3507), those collections of information have been approved by
the Office of Management and Budget under control number 1505-0164. 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 551
Administrative practice and procedure, Banks, banking, Blocking of
assets, Charcoal, Foreign trade, Penalties, Reporting and recordkeeping
requirements, Sanctions, Securities, Services, Somalia.
0
For the reasons set forth in the preamble, the Department of the
Treasury's Office of Foreign Assets Control revises 31 CFR part 551 to
read as follows:
PART 551--SOMALIA SANCTIONS REGULATIONS
Subpart A--Relation of This Part to Other Laws and Regulations
Sec.
551.101 Relation of this part to other laws and regulations.
Subpart B--Prohibitions
551.201 Prohibited transactions.
551.202 Effect of transfers violating the provisions of this part.
551.203 Holding of funds in interest-bearing accounts; investment
and reinvestment.
551.204 Expenses of maintaining blocked tangible property;
liquidation of blocked property.
551.205 Evasions; attempts; causing violations; conspiracies.
551.206 Exempt transactions.
551.207 Prohibited importation of charcoal from Somalia.
Subpart C--General Definitions
551.300 Applicability of definitions.
551.301 African Union Mission in Somalia; AMISOM.
551.302 Arms or any related materiel.
551.303 Blocked account; blocked property.
551.304 Charcoal.
551.305 Effective date.
[[Page 22349]]
551.306 Entity.
551.307 Financial, material, or technical support.
551.308 [Reserved]
551.309 Interest.
551.310 Licenses; general and specific.
551.311 OFAC.
551.312 Person.
551.313 Property; property interest.
551.314 Transfer.
551.315 Transitional Federal Institutions.
551.316 United States.
551.317 United States person; U.S. person.
551.318 U.S. financial institution.
Subpart D--Interpretations
551.401 Reference to amended sections.
551.402 Effect of amendment.
551.403 Termination and acquisition of an interest in blocked
property.
551.404 Transactions ordinarily incident to a licensed transaction.
551.405 Provision of services.
551.406 Offshore transactions involving blocked property.
551.407 Payments from blocked accounts to satisfy obligations
prohibited.
551.408 Charitable contributions.
551.409 Credit extended and cards issued by financial institutions
to a person whose property and interests in property are blocked.
551.410 Setoffs prohibited.
551.411 Entities owned by one or more persons whose property and
interests in property are blocked.
Subpart E--Licenses, Authorizations, and Statements of Licensing Policy
551.501 General and specific licensing procedures.
551.502 Effect of license or other authorization.
551.503 Exclusion from licenses.
551.504 Payments and transfers to blocked accounts in U.S. financial
institutions.
551.505 Entries in certain accounts for normal service charges.
551.506 Investment and reinvestment of certain funds.
551.507 Provision of certain legal services.
551.508 Payments for legal services from funds originating outside
the United States.
551.509 Emergency medical services.
551.510 Official business of the United States Government.
551.511 Official activities of international organizations.
Subpart F--Reports
551.601 Records and reports.
Subpart G--Penalties and Findings of Violation
551.701 Penalties.
551.702 Pre-Penalty Notice; settlement.
551.703 Penalty imposition.
551.704 Administrative collection; referral to United States
Department of Justice.
551.705 Findings of Violation.
Subpart H--Procedures
551.801 Procedures.
551.802 Delegation of certain authorities of the Secretary of the
Treasury.
Subpart I--Paperwork Reduction Act
551.901 Paperwork Reduction Act notice.
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; Pub. L. 101-410, 104 Stat. 890, as
amended (28 U.S.C. 2461 note); E.O. 13536, 75 FR 19869, 3 CFR, 2010
Comp., p. 203; E.O. 13620, 77 FR 43483, 3 CFR, 2012 Comp., p. 281.
Subpart A--Relation of This Part to Other Laws and Regulations
Sec. 551.101 Relation of this part to other laws and regulations.
This part is separate from, and independent of, the other parts of
this chapter, with the exception of part 501 of this chapter, the
recordkeeping and reporting requirements and license application and
other procedures of which apply to this part. Actions taken pursuant to
part 501 of this chapter with respect to the prohibitions contained in
this part are considered actions taken pursuant to this part. Differing
foreign policy and national security circumstances may result in
differing interpretations of similar language among the parts of this
chapter. No license or authorization contained in or issued pursuant to
those other parts authorizes any transaction prohibited by this part.
No license or authorization contained in or issued pursuant to any
other provision of law or regulation authorizes any transaction
prohibited by this part. No license or authorization contained in or
issued pursuant to this part relieves the involved parties from
complying with any other applicable laws or regulations.
Subpart B--Prohibitions
Sec. 551.201 Prohibited transactions.
(a) All property and interests in property that are in the United
States, that come within the United States, or that are or come within
the possession or control of any U.S. person of the following persons
are blocked and may not be transferred, paid, exported, withdrawn, or
otherwise dealt in:
(1) The persons listed in the Annex to Executive Order (E.O.) 13536
of April 12, 2010; and
(2) Any person determined by the Secretary of the Treasury, in
consultation with the Secretary of State to:
(i) Have engaged in acts that directly or indirectly threaten the
peace, security, or stability of Somalia, including:
(A) Acts that threaten the Djibouti Agreement of August 18, 2008,
or the political process;
(B) Acts that threaten the Transitional Federal Institutions or
future Somali governing institutions, the African Union Mission in
Somalia (AMISOM), or other future international peacekeeping operations
related to Somalia;
(C) Acts to misappropriate Somali public assets; or
(D) Acts of piracy or armed robbery at sea off the coast of
Somalia;
(ii) Have obstructed the delivery of humanitarian assistance to
Somalia, or access to, or distribution of, humanitarian assistance in
Somalia;
(iii) Have directly or indirectly supplied, sold, or transferred to
Somalia, or to have been the recipient in the territory of Somalia of,
arms or any related materiel, or any technical advice, training, or
assistance, including financing and financial assistance, related to
military activities;
(iv) Be responsible for or complicit in, or responsible for
ordering, controlling, or otherwise directing, or to have participated
in, the commission of acts of violence targeting civilians in Somalia,
including killing and maiming, sexual and gender-based violence,
attacks on schools and hospitals, taking hostages, and forced
displacement;
(v) Be a political or military leader recruiting or using children
in armed conflict in Somalia;
(vi) Have engaged, directly or indirectly, in the import or export
of charcoal from Somalia on or after February 22, 2012;
(vii) Have materially assisted, sponsored, or provided financial,
material, logistical, or technical support for, or goods or services in
support of, the activities described in subsections (a)(2)(i) through
(vi) of this section or any person whose property and interests in
property are blocked pursuant to paragraph (a) of this section; or
(viii) Be owned or controlled by, or to have acted or purported to
act for or on behalf of, directly or indirectly, any person whose
property and interests in property are blocked pursuant to paragraph
(a) of this section.
(b) The prohibitions in paragraph (a) of this section include
prohibitions on the following transactions:
(1) The making of any contribution or provision of funds, goods, or
services by, to, or for the benefit of any person whose property and
interests in property are blocked pursuant to paragraph (a) of this
section; and
(2) The receipt of any contribution or provision of funds, goods,
or services from any person whose property and interests in property
are blocked pursuant to paragraph (a) of this section.
(c) Unless authorized by this part or by a specific license
expressly referring to this part, any dealing in securities (or
[[Page 22350]]
evidence thereof) held within the possession or control of a U.S.
person and either registered or inscribed in the name of, or known to
be held for the benefit of, or issued by, any person whose property and
interests in property are blocked pursuant to paragraph (a) of this
section is prohibited. This prohibition includes the transfer
(including the transfer on the books of any issuer or agent thereof),
disposition, transportation, importation, exportation, or withdrawal
of, or the endorsement or guaranty of signatures on, any securities on
or after the effective date. This prohibition applies irrespective of
the fact that at any time (whether prior to, on, or subsequent to the
effective date) the registered or inscribed owner of any such
securities may have or might appear to have assigned, transferred, or
otherwise disposed of the securities. (d) The prohibitions in paragraph
(a) of this section apply except to the extent provided by regulations,
orders, directives, or licenses that may be issued pursuant to this
part, and notwithstanding any contract entered into or any license or
permit granted prior to the effective date.
(e) All transactions prohibited pursuant to any E.O. issued after
July 20, 2012, pursuant to the national emergency declared in E.O.
13536 of April 12, 2010, are prohibited pursuant to this part.
Note 1 to Sec. 551.201. The names of persons listed in or
designated or identified pursuant to amended E.O. 13536, or listed
in or designated or identified pursuant to any further Executive
orders issued pursuant to the national emergency declared in E.O.
13536, whose property and interests in property therefore are
blocked pursuant to this section, are published in the Federal
Register and incorporated into OFAC's Specially Designated Nationals
and Blocked Persons List (SDN List) using the following identifiers:
For amended E.O. 13536: ``[SOMALIA]'' and for any further Executive
orders issued pursuant to the national emergency declared in amended
E.O. 13536: Using the identifier formulation ``[SOMALIA-E.O.[E.O.
number pursuant to which the person's property and interests in
property are blocked]]''. 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. 551.411 concerning entities that may not be
listed on the SDN List but whose property and interests in property
are nevertheless blocked pursuant to this section.
Note 2 to Sec. 551.201. The International Emergency Economic
Powers Act (50 U.S.C. 1701-1706), in Section 203 (50 U.S.C. 1702),
authorizes the blocking of property and interests in property of a
person during the pendency of an investigation. The names of persons
whose property and interests in property are blocked pending
investigation pursuant to this section also are published in the
Federal Register and incorporated into the SDN List using the
following identifiers: For amended E.O. 13536: ``[BPI-SOMALIA]'' and
for any further Executive orders issued pursuant to the national
emergency declared in E.O. 13536: Using the identifier formulation
``[BPI-SOMALIA-E.O.[E.O. number pursuant to which the person's
property and interests in property are blocked pending
investigation]].''
Note 3 to Sec. 551.201. Sections 501.806 and 501.807 of this
chapter describe the procedures to be followed by persons seeking,
respectively, the unblocking of funds that they believe were blocked
due to mistaken identity, or administrative reconsideration of their
status as persons whose property and interests in property are
blocked pursuant to this section.
Sec. 551.202 Effect of transfers violating the provisions of this
part.
(a) Any transfer after the effective date that is in violation of
any provision of this part or of any regulation, order, directive,
ruling, instruction, or license issued pursuant to this part, and that
involves any property or interest in property blocked pursuant to Sec.
551.201, is null and void and shall not be the basis for the assertion
or recognition of any interest in or right, remedy, power, or privilege
with respect to such property or interest in property.
(b) No transfer before the effective date shall be the basis for
the assertion or recognition of any right, remedy, power, or privilege
with respect to, or any interest in, any property or interest in
property blocked pursuant to Sec. 551.201, unless the person who holds
or maintains such property, prior to that date, had written notice of
the transfer or by any written evidence had recognized such transfer.
(c) Unless otherwise provided, a license or other authorization
issued by OFAC before, during, or after a transfer shall validate such
transfer or make it enforceable to the same extent that it would be
valid or enforceable but for the provisions of this part and any
regulation, order, directive, ruling, instruction, or license issued
pursuant to this part.
(d) Transfers of property that otherwise would be null and void or
unenforceable by virtue of the provisions of this section shall not be
deemed to be null and void or unenforceable as to any person with whom
such property is or was held or maintained (and as to such person only)
in cases in which such person is able to establish to the satisfaction
of OFAC each of the following:
(1) Such transfer did not represent a willful violation of the
provisions of this part by the person with whom such property is or was
held or maintained (and as to such person only);
(2) The person with whom such property is or was held or maintained
did not have reasonable cause to know or suspect, in view of all the
facts and circumstances known or available to such person, that such
transfer required a license or authorization issued pursuant to this
part and was not so licensed or authorized, or, if a license or
authorization did purport to cover the transfer, that such license or
authorization had been obtained by misrepresentation of a third party
or withholding of material facts or was otherwise fraudulently
obtained; and
(3) The person with whom such property is or was held or maintained
filed with OFAC a report setting forth in full the circumstances
relating to such transfer promptly upon discovery that:
(i) Such transfer was in violation of the provisions of this part
or any regulation, ruling, instruction, license, or other directive or
authorization issued pursuant to this part;
(ii) Such transfer was not licensed or authorized by OFAC; or
(iii) If a license did purport to cover the transfer, such license
had been obtained by misrepresentation of a third party or withholding
of material facts or was otherwise fraudulently obtained.
(e) The filing of a report in accordance with the provisions of
paragraph (d)(3) of this section shall not be deemed evidence that the
terms of paragraphs (d)(1) and (2) of this section have been satisfied.
(f) Unless licensed pursuant to this part, any attachment,
judgment, decree, lien, execution, garnishment, or other judicial
process is null and void with respect to any property or interest in
property blocked pursuant to Sec. 551.201.
Sec. 551.203 Holding of funds in interest-bearing accounts;
investment and reinvestment.
(a) Except as provided in paragraph (e) or (f) of this section, or
as otherwise directed or authorized by OFAC, any U.S. person holding
funds, such as currency, bank deposits, or liquidated financial
obligations, subject to Sec. 551.201 shall hold or place such funds in
a blocked interest-bearing account located in the United States.
(b)(1) For purposes of this section, the term blocked interest-
bearing account means a blocked account:
(i) In a federally insured U.S. bank, thrift institution, or credit
union, provided the funds are earning interest
[[Page 22351]]
at rates that are commercially reasonable; or
(ii) With a broker or dealer registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.), provided the funds are invested in a money market
fund or in U.S. Treasury bills.
(2) Funds held or placed in a blocked account pursuant to paragraph
(a) of this section may not be invested in instruments the maturity of
which exceeds 180 days.
(c) For purposes of this section, a rate is commercially reasonable
if it is the rate currently offered to other depositors on deposits or
instruments of comparable size and maturity.
(d) For purposes of this section, if interest is credited to a
separate blocked account or subaccount, the name of the account party
on each account must be the same.
(e) Blocked funds held in instruments the maturity of which exceeds
180 days at the time the funds become subject to Sec. 551.201 may
continue to be held until maturity in the original instrument, provided
any interest, earnings, or other proceeds derived therefrom are paid
into a blocked interest-bearing account in accordance with paragraph
(a) or (f) of this section.
(f) Blocked funds held in accounts or instruments outside the
United States at the time the funds become subject to Sec. 551.201 may
continue to be held in the same type of accounts or instruments,
provided the funds earn interest at rates that are commercially
reasonable.
(g) This section does not create an affirmative obligation for the
holder of blocked tangible property, such as real or personal property,
or of other blocked property, such as debt or equity securities, to
sell or liquidate such property. However, OFAC may issue licenses
permitting or directing such sales or liquidation in appropriate cases.
(h) Funds subject to this section may not be held, invested, or
reinvested in a manner that provides financial or economic benefit or
access to any person whose property and interests in property are
blocked pursuant to Sec. 551.201, nor may their holder cooperate in or
facilitate the pledging or other attempted use as collateral of blocked
funds or other assets.
Sec. 551.204 Expenses of maintaining blocked tangible property;
liquidation of blocked property.
(a) Except as otherwise authorized, and notwithstanding the
existence of any rights or obligations conferred or imposed by any
international agreement or contract entered into or any license or
permit granted prior to the effective date, all expenses incident to
the maintenance of tangible property blocked pursuant to Sec. 551.201
shall be the responsibility of the owners or operators of such
property, which expenses shall not be met from blocked funds.
(b) Property blocked pursuant to Sec. 551.201 may, in the
discretion of OFAC, be sold or liquidated and the net proceeds placed
in a blocked interest-bearing account in the name of the owner of the
property.
Sec. 551.205 Evasions; attempts; causing violations; conspiracies.
(a) Any transaction on or after the effective date that evades or
avoids, has the purpose of evading or avoiding, causes a violation of,
or attempts to violate any of the prohibitions set forth in this part
is prohibited.
(b) Any conspiracy formed to violate the prohibitions set forth in
this part is prohibited.
Sec. 551.206 Exempt transactions.
(a) United Nations Participation Act. The exemption described in
this section does not apply to transactions involving property or
interests in property of persons whose property and interests in
property are blocked pursuant to the authority of the United Nations
Participation Act, as amended (22 U.S.C. 287c(b)) (UNPA).
Note 1 to paragraph (a). Persons whose property and interests in
property are blocked pursuant to the authority of the UNPA include
those listed on both OFAC's Specially Designated Nationals and
Blocked Persons List (SDN List) and the Consolidated United Nations
Security Council Sanctions List (UN List) (see https://www.un.org),
as well as persons listed on the SDN List for being owned or
controlled by, or acting for or on behalf of, persons listed on both
the SDN List and the UN List.
(b) Personal communications. The prohibitions contained in this
part do not apply to any postal, telegraphic, telephonic, or other
personal communication that does not involve the transfer of anything
of value.
Sec. 551.207 Prohibited importation of charcoal from Somalia.
(a) The importation into the United States, directly or indirectly,
of charcoal from Somalia is prohibited.
(b) The prohibition in paragraph (a) of this section applies except
to the extent provided by statutes, or in regulations, orders,
directives, or licenses that may be issued pursuant to this part, and
notwithstanding any contract entered into or any license or permit
granted prior to the effective date.
Subpart C--General Definitions
Sec. 551.300 Applicability of definitions.
The definitions in this subpart apply throughout the entire part.
Sec. 551.301 African Union Mission in Somalia; AMISOM
The term African Union Mission in Somalia or AMISOM means the
mission authorized by the United Nations Security Council in Resolution
1744 of February 20, 2007, and reauthorized in subsequent resolutions,
and includes its agencies, instrumentalities, and controlled entities.
Sec. 551.302 Arms or any related materiel.
The term arms or any related materiel means arms or related
materiel of all types, including military aircraft and equipment,
transferred in violation of the United Nations arms embargo on Somalia.
Sec. 551.303 Blocked account; blocked property.
The terms blocked account and blocked property mean any account or
property subject to the prohibitions in Sec. 551.201 held in the name
of a person whose property and interests in property are blocked
pursuant to Sec. 551.201, or in which such person has an interest, and
with respect to which payments, transfers, exportations, withdrawals,
or other dealings may not be made or effected except pursuant to a
license or other authorization from OFAC expressly authorizing such
action.
Note 1 to Sec. 551.303. See Sec. 551.411 concerning the
blocked status of property and interests in property of an entity
that is directly or indirectly owned, whether individually or in the
aggregate, 50 percent or more by one or more persons whose property
and interests in property are blocked pursuant to Sec. 551.201.
Sec. 551.304 Charcoal.
The term charcoal means any product classifiable in heading 3802 or
4402 of the Harmonized Tariff Schedule of the United States.
Sec. 551.305 Effective date.
(a) The term effective date refers to the effective date of the
applicable prohibitions and directives contained in this part as
follows:
(1) With respect to a person listed in the Annex to E.O. 13536, as
amended by E.O. 13620, 12:01 a.m. eastern daylight time, April 13,
2010;
(2) With respect to a person whose property and interests in
property are otherwise blocked pursuant to Sec. 551.201, the earlier
of the date of actual or constructive notice that such
[[Page 22352]]
person's property and interests in property are blocked; and
(3) With respect to the prohibition set forth in Sec. 551.207,
2:00 p.m. eastern daylight time, July 20, 2012.
(b) For the purposes of this section, constructive notice is the
date that a notice of the blocking of the relevant person's property
and interests in property is published in the Federal Register.
Sec. 551.306 Entity.
The term entity means a partnership, association, trust, joint
venture, corporation, group, subgroup, or other organization.
Sec. 551.307 Financial, material, logistical, or technical support.
The term financial, material, logistical, or technical support, as
used in this part, means any property, tangible or intangible,
including currency, financial instruments, securities, or any other
transmission of value; weapons or related materiel; chemical or
biological agents; explosives; false documentation or identification;
communications equipment; computers; electronic or other devices or
equipment; technologies; lodging; safe houses; facilities; vehicles or
other means of transportation; or goods. ``Technologies'' as used in
this definition means specific information necessary for the
development, production, or use of a product, including related
technical data such as blueprints, plans, diagrams, models, formulae,
tables, engineering designs and specifications, manuals, or other
recorded instructions.
Sec. 551.308 [Reserved]
Sec. 551.309 Interest.
Except as otherwise provided in this part, the term interest, when
used with respect to property (e.g., ``an interest in property''),
means an interest of any nature whatsoever, direct or indirect.
Sec. 551.310 Licenses; general and specific.
(a) Except as otherwise provided in this part, the term license
means any license or authorization contained in or issued pursuant to
this part.
(b) The term general license means any license or authorization the
terms of which are set forth in subpart E of this part or made
available on OFAC's website: www.treasury.gov/ofac.
(c) The term specific license means any license or authorization
issued pursuant to this part but not set forth in subpart E of this
part or made available on OFAC's website: www.treasury.gov/ofac.
Note 1 to Sec. 551.310. See Sec. 501.801 of this chapter on
licensing procedures.
Sec. 551.311 OFAC.
The term OFAC means the Department of the Treasury's Office of
Foreign Assets Control.
Sec. 551.312 Person.
The term person means an individual or entity.
Sec. 551.313 Property; property interest.
The terms property and property interest include money, checks,
drafts, bullion, bank deposits, savings accounts, debts, indebtedness,
obligations, notes, guarantees, debentures, stocks, bonds, coupons, any
other financial instruments, bankers acceptances, mortgages, pledges,
liens or other rights in the nature of security, warehouse receipts,
bills of lading, trust receipts, bills of sale, any other evidences of
title, ownership, or indebtedness, letters of credit and any documents
relating to any rights or obligations thereunder, powers of attorney,
goods, wares, merchandise, chattels, stocks on hand, ships, goods on
ships, real estate mortgages, deeds of trust, vendors' sales
agreements, land contracts, leaseholds, ground rents, real estate and
any other interest therein, options, negotiable instruments, trade
acceptances, royalties, book accounts, accounts payable, judgments,
patents, trademarks or copyrights, insurance policies, safe deposit
boxes and their contents, annuities, pooling agreements, services of
any nature whatsoever, contracts of any nature whatsoever, and any
other property, real, personal, or mixed, tangible or intangible, or
interest or interests therein, present, future, or contingent.
Sec. 551.314 Transfer.
The term transfer means any actual or purported act or transaction,
whether or not evidenced by writing, and whether or not done or
performed within the United States, the purpose, intent, or effect of
which is to create, surrender, release, convey, transfer, or alter,
directly or indirectly, any right, remedy, power, privilege, or
interest with respect to any property. Without limitation on the
foregoing, it shall include the making, execution, or delivery of any
assignment, power, conveyance, check, declaration, deed, deed of trust,
power of attorney, power of appointment, bill of sale, mortgage,
receipt, agreement, contract, certificate, gift, sale, affidavit, or
statement; the making of any payment; the setting off of any obligation
or credit; the appointment of any agent, trustee, or fiduciary; the
creation or transfer of any lien; the issuance, docketing, filing, or
levy of or under any judgment, decree, attachment, injunction,
execution, or other judicial or administrative process or order, or the
service of any garnishment; the acquisition of any interest of any
nature whatsoever by reason of a judgment or decree of any foreign
country; the fulfillment of any condition; the exercise of any power of
appointment, power of attorney, or other power; or the acquisition,
disposition, transportation, importation, exportation, or withdrawal of
any security.
Sec. 551.315 Transitional Federal Institutions.
The term Transitional Federal Institutions means the Transitional
Federal Charter of the Somali Republic adopted in February 2004 and the
Somali federal institutions established pursuant to such charter, and
includes their agencies, instrumentalities, and controlled entities.
Sec. Sec. 551.316 United States.
The term United States means the United States, its territories and
possessions, and all areas under the jurisdiction or authority thereof.
Sec. 551.317 United States person; U.S. person.
The term United States person or U.S. person means any United
States citizen, permanent resident alien, entity organized under the
laws of the United States or any jurisdiction within the United States
(including foreign branches), or any person in the United States.
Sec. 551.318 U.S. financial institution.
The term U.S. financial institution means any U.S. entity
(including its foreign branches) that is engaged in the business of
accepting deposits, making, granting, transferring, holding, or
brokering loans or other extensions of credit, or purchasing or selling
foreign exchange, securities, commodity futures or options, or
procuring purchasers and sellers thereof, as principal or agent. It
includes depository institutions, banks, savings banks, trust
companies, securities brokers and dealers, futures and options brokers
and dealers, forward contract and foreign exchange merchants,
securities and commodities exchanges, clearing corporations, investment
companies, employee benefit plans, and U.S. holding companies, U.S.
affiliates, or U.S. subsidiaries of any of the foregoing. This term
includes those branches, offices, and agencies of foreign financial
institutions that are located in the
[[Page 22353]]
United States, but not such institutions' foreign branches, offices, or
agencies.
Subpart D--Interpretations
Sec. 551.401 Reference to amended sections.
(a) Reference to any section in this part is a reference to the
same as currently amended, unless the reference includes a specific
date. See 44 U.S.C. 1510.
(b) Reference to any ruling, order, instruction, direction, or
license issued pursuant to this part is a reference to the same as
currently amended unless otherwise so specified.
Sec. 551.402 Effect of amendment.
Unless otherwise specifically provided, any amendment,
modification, or revocation of any provision in or appendix to this
part or chapter or of any order, regulation, ruling, instruction, or
license issued by OFAC does not affect any act done or omitted, or any
civil or criminal proceeding commenced or pending, prior to such
amendment, modification, or revocation. All penalties, forfeitures, and
liabilities under any such order, regulation, ruling, instruction, or
license continue and may be enforced as if such amendment,
modification, or revocation had not been made.
Sec. 551.403 Termination and acquisition of an interest in blocked
property.
(a) Whenever a transaction licensed or authorized by or pursuant to
this part results in the transfer of property (including any property
interest) away from a person whose property and interests in property
are blocked pursuant to Sec. 551.201, such property shall no longer be
deemed to be property blocked pursuant to Sec. 551.201, unless there
exists in the property another interest that is blocked pursuant to
Sec. 551.201, the transfer of which has not been effected pursuant to
license or other authorization.
(b) Unless otherwise specifically provided in a license or
authorization issued pursuant to this part, if property (including any
property interest) is transferred or attempted to be transferred to a
person whose property and interests in property are blocked pursuant to
Sec. 551.201, such property shall be deemed to be property in which
such person has an interest and therefore blocked.
Sec. 551.404 Transactions ordinarily incident to a licensed
transaction.
(a) Any transaction ordinarily incident to a licensed transaction
and necessary to give effect thereto is also authorized, except:
(1) An ordinarily incident transaction, not explicitly authorized
within the terms of the license, by or with a person whose property and
interests in property are blocked pursuant to Sec. 551.201; or
(2) An ordinarily incident transaction, not explicitly authorized
within the terms of the license, involving a debit to a blocked account
or a transfer of blocked property.
(b) For example, a license authorizing a person to complete a
securities sale involving Company A, whose property and interests in
property are blocked pursuant to Sec. 551.201, also authorizes other
persons to engage in activities that are ordinarily incident and
necessary to complete the sale, including transactions by the buyer,
broker, transfer agents, and banks, provided that such other persons
are not themselves persons whose property and interests in property are
blocked pursuant to Sec. 551.201.
Sec. 551.405 Provision of services.
(a) The prohibitions on transactions contained in Sec. 551.201
apply to services performed in the United States or by U.S. persons,
wherever located, including by a foreign branch of an entity located in
the United States:
(1) On behalf of or for the benefit of a person whose property and
interests in property are blocked pursuant to Sec. 551.201; or
(2) With respect to property interests of any person whose property
and interests in property are blocked pursuant to Sec. 551.201.
(b) For example, U.S. persons may not, except as authorized by or
pursuant to this part, provide legal, accounting, financial, brokering,
freight forwarding, transportation, public relations, or other services
to a person whose property and interests in property are blocked
pursuant to Sec. 551.201.
Note 1 to Sec. 551.405. See Sec. Sec. 551.507 and 551.509 on
licensing policy with regard to the provision of certain legal and
emergency medical services.
Sec. 551.406 Offshore transactions involving blocked property.
The prohibitions in Sec. 551.201 on transactions or dealings
involving blocked property, as defined in Sec. 551.303, apply to
transactions by any U.S. person in a location outside the United
States.
Sec. 551.407 Payments from blocked accounts to satisfy obligations
prohibited.
Pursuant to Sec. 551.201, no debits may be made to a blocked
account to pay obligations to U.S. persons or other persons, except as
authorized by or pursuant to this part.
Note 1 to Sec. 551.407. See also Sec. 551.502(e), which
provides that no license or other authorization contained in or
issued pursuant to this part authorizes transfers of or payments
from blocked property or debits to blocked accounts unless the
license or other authorization explicitly authorizes the transfer of
or payment from blocked property or the debit to a blocked account.
Sec. 551.408 Charitable contributions.
Unless specifically authorized by OFAC pursuant to this part, no
charitable contribution of funds, goods, services, or technology,
including contributions to relieve human suffering, such as food,
clothing, or medicine, may be made by, to, or for the benefit of, or
received from, a person whose property and interests in property are
blocked pursuant to Sec. 551.201. For the purposes of this part, a
contribution is made by, to, or for the benefit of, or received from, a
person whose property and interests in property are blocked pursuant to
Sec. 551.201 if made by, to, or in the name of, or received from or in
the name of, such a person; if made by, to, or in the name of, or
received from or in the name of, an entity or individual acting for or
on behalf of, or owned or controlled by, such a person; or if made in
an attempt to violate, to evade, or to avoid the bar on the provision
of contributions by, to, or for the benefit of such a person, or the
receipt of contributions from such a person.
Sec. 551.409 Credit extended and cards issued by financial
institutions to a person whose property and interests in property are
blocked.
The prohibition in Sec. 551.201 on dealing in property subject to
that section prohibits U.S. financial institutions from performing
under any existing credit agreements, including charge cards, debit
cards, or other credit facilities issued by a financial institution to
a person whose property and interests in property are blocked pursuant
to Sec. 551.201.
Sec. 551.410 Setoffs prohibited.
A setoff against blocked property (including a blocked account),
whether by a U.S. bank or other U.S. person, is a prohibited transfer
under Sec. 551.201 if effected after the effective date.
Sec. 551.411 Entities owned by one or more persons whose property and
interests in property are blocked.
Persons whose property and interests in property are blocked
pursuant to Sec. 551.201 have an interest in all property and
interests in property of an
[[Page 22354]]
entity in which such persons directly or indirectly own, whether
individually or in the aggregate, a 50 percent or greater interest. The
property and interests in property of such an entity, therefore, are
blocked, and such an entity is a person whose property and interests in
property are blocked pursuant to Sec. 551.201, regardless of whether
the name of the entity is incorporated into OFAC's Specially Designated
Nationals and Blocked Persons List (SDN List).
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
Sec. 551.501 General and specific licensing procedures.
For provisions relating to licensing procedures, see part 501,
subpart E, of this chapter. Licensing actions taken pursuant to part
501 of this chapter with respect to the prohibitions contained in this
part are considered actions taken pursuant to this part. General
licenses and statements of licensing policy relating to this part also
may be available through the Somalia Sanctions page on OFAC's website:
www.treasury.gov/ofac.
Sec. 551.502 Effect of license or other authorization.
(a) No license or other authorization contained in this part, or
otherwise issued by OFAC, authorizes or validates any transaction
effected prior to the issuance of such license or other authorization,
unless specifically provided in such license or authorization.
(b) No regulation, ruling, instruction, or license authorizes any
transaction prohibited under this part unless the regulation, ruling,
instruction, or license is issued by OFAC and specifically refers to
this part. No regulation, ruling, instruction, or license referring to
this part shall be deemed to authorize any transaction prohibited by
any other part of this chapter unless the regulation, ruling,
instruction, or license specifically refers to such part.
(c) Any regulation, ruling, instruction, or license authorizing any
transaction prohibited under this part has the effect of removing a
prohibition contained in this part from the transaction, but only to
the extent specifically stated by its terms. Unless the regulation,
ruling, instruction, or license otherwise specifies, such an
authorization does not create any right, duty, obligation, claim, or
interest in, or with respect to, any property that would not otherwise
exist under ordinary principles of law.
(d) Nothing contained in this part shall be construed to supersede
the requirements established under any other provision of law or to
relieve a person from any requirement to obtain a license or other
authorization from another department or agency of the U.S. Government
in compliance with applicable laws and regulations subject to the
jurisdiction of that department or agency. For example, exports of
goods, services, or technical data that are not prohibited by this part
or that do not require a license by OFAC nevertheless may require
authorization by the U.S. Department of Commerce, the U.S. Department
of State, or other agencies of the U.S. Government.
(e) No license or other authorization contained in or issued
pursuant to this part authorizes transfers of or payments from blocked
property or debits to blocked accounts unless the license or other
authorization explicitly authorizes the transfer of or payment from
blocked property or the debit to a blocked account.
(f) Any payment relating to a transaction authorized in or pursuant
to this part that is routed through the U.S. financial system should
reference the relevant OFAC general or specific license authorizing the
payment to avoid the blocking or rejection of the transfer.
Sec. 551.503 Exclusion from licenses.
OFAC reserves the right to exclude any person, property,
transaction, or class thereof from the operation of any license or from
the privileges conferred by any license. OFAC also reserves the right
to restrict the applicability of any license to particular persons,
property, transactions, or classes thereof. Such actions are binding
upon actual or constructive notice of the exclusions or restrictions.
Sec. 551.504 Payments and transfers to blocked accounts in U.S.
financial institutions.
Any payment of funds or transfer of credit in which a person whose
property and interests in property are blocked pursuant to Sec.
551.201 has any interest that comes within the possession or control of
a U.S. financial institution must be blocked in an account on the books
of that financial institution. A transfer of funds or credit by a U.S.
financial institution between blocked accounts in its branches or
offices is authorized, provided that no transfer is made from an
account within the United States to an account held outside the United
States, and further provided that a transfer from a blocked account may
be made only to another blocked account held in the same name.
Note 1 to Sec. 551.504. See Sec. 501.603 of this chapter for
mandatory reporting requirements regarding financial transfers. See
also Sec. 551.203 concerning the obligation to hold blocked funds
in interest-bearing accounts.
Sec. 551.505 Entries in certain accounts for normal service charges.
(a) A U.S. financial institution is authorized to debit any blocked
account held at that financial institution in payment or reimbursement
for normal service charges owed it by the owner of that blocked
account.
(b) As used in this section, the term normal service charges shall
include charges in payment or reimbursement for interest due; cable,
telegraph, internet, or telephone charges; postage costs; custody fees;
small adjustment charges to correct bookkeeping errors; and, but not by
way of limitation, minimum balance charges, notary and protest fees,
and charges for reference books, photocopies, credit reports,
transcripts of statements, registered mail, insurance, stationery and
supplies, and other similar items.
Sec. 551.506 Investment and reinvestment of certain funds.
Subject to the requirements of Sec. 551.203, U.S. financial
institutions are authorized to invest and reinvest assets blocked
pursuant to Sec. 551.201, subject to the following conditions:
(a) The assets representing such investments and reinvestments are
credited to a blocked account or subaccount that is held in the same
name at the same U.S. financial institution, or within the possession
or control of a U.S. person, but funds shall not be transferred outside
the United States for this purpose;
(b) The proceeds of such investments and reinvestments shall not be
credited to a blocked account or subaccount under any name or
designation that differs from the name or designation of the specific
blocked account or subaccount in which such funds or securities were
held; and
(c) No immediate financial or economic benefit accrues (e.g.,
through pledging or other use) to a person whose property and interests
in property are blocked pursuant to Sec. 551.201.
Sec. 551.507 Provision of certain legal services.
(a) The provision of the following legal services to or on behalf
of persons whose property and interests in property are blocked
pursuant to Sec. 551.201 is authorized, provided that any receipt of
payment of professional fees and reimbursement of incurred expenses
must be authorized pursuant to Sec. 551.508, which authorizes certain
payments for legal services from funds
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originating outside the United States; via specific license; or
otherwise pursuant to this part:
(1) Provision of legal advice and counseling on the requirements of
and compliance with the laws of the United States or any jurisdiction
within the United States, provided that such advice and counseling are
not provided to facilitate transactions in violation of this part;
(2) Representation of persons named as defendants in or otherwise
made parties to legal, arbitration, or administrative proceedings
before any U.S. federal, state, or local court or agency;
(3) Initiation and conduct of legal, arbitration, or administrative
proceedings before any U.S. federal, state, or local court or agency;
(4) Representation of persons before any U.S. federal, state, or
local court or agency with respect to the imposition, administration,
or enforcement of U.S. sanctions against such persons; and
(5) Provision of legal services in any other context in which
prevailing U.S. law requires access to legal counsel at public expense.
(b) The provision of any other legal services to or on behalf of
persons whose property and interests in property are blocked pursuant
to Sec. 551.201 not otherwise authorized in this part, requires the
issuance of a specific license.
(c) U.S. persons do not need to obtain specific authorization to
provide related services, such as making filings and providing other
administrative services, that are ordinarily incident to the provision
of services authorized by paragraph (a) of this section. Additionally,
U.S. persons who provide services authorized by paragraph (a) of this
section do not need to obtain specific authorization to contract for
related services that are ordinarily incident to the provision of those
legal services, such as those provided by private investigators or
expert witnesses, or to pay for such services. See Sec. 551.404.
(d) Entry into a settlement agreement or the enforcement of any
lien, judgment, arbitral award, decree, or other order through
execution, garnishment, or other judicial process purporting to
transfer or otherwise alter or affect property or interests in property
blocked pursuant to Sec. 551.201 is prohibited unless licensed
pursuant to this part.
Note 1 to Sec. 551.507. Pursuant to part 501, subpart E, of
this chapter, U.S. persons seeking administrative reconsideration or
judicial review of their designation or the blocking of their
property and interests in property may apply for a specific license
from OFAC to authorize the release of certain blocked funds for the
payment of professional fees and reimbursement of incurred expenses
for the provision of such legal services where alternative funding
sources are not available.
Sec. 551.508 Payments for legal services from funds originating
outside the United States.
(a) Professional fees and incurred expenses. (1) Receipt of payment
of professional fees and reimbursement of incurred expenses for the
provision of legal services authorized pursuant to Sec. 551.507(a) to
or on behalf of any person whose property and interests in property are
blocked pursuant to Sec. 551.201 is authorized from funds originating
outside the United States, provided that the funds do not originate
from:
(i) A source within the United States;
(ii) Any source, wherever located, within the possession or control
of a U.S. person; or
(iii) Any individual or entity, other than the person on whose
behalf the legal services authorized pursuant to Sec. 551.507(a) are
to be provided, whose property and interests in property are blocked
pursuant to any part of this chapter or any Executive order or statute.
(2) Nothing in paragraph (a) of this section authorizes payments
for legal services using funds in which any other person whose property
and interests in property are blocked pursuant to Sec. 551.201, any
other part of this chapter, or any Executive order or statute has an
interest.
(b) Reports. (1) U.S. persons who receive payments pursuant to
paragraph (a) of this section must submit annual reports no later than
30 days following the end of the calendar year during which the
payments were received providing information on the funds received.
Such reports shall specify:
(i) The individual or entity from whom the funds originated and the
amount of funds received; and
(ii) If applicable:
(A) The names of any individuals or entities providing related
services to the U.S. person receiving payment in connection with
authorized legal services, such as private investigators or expert
witnesses;
(B) A general description of the services provided; and
(C) The amount of funds paid in connection with such services.
(2) The reports, which must reference this section, are to be
submitted to OFAC using one of the following methods:
(i) Email (preferred method):
[email protected]; or
(ii) U.S. mail: OFAC Regulations Reports, Office of Foreign Assets
Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW,
Freedman's Bank Building, Washington, DC 20220.
Sec. 551.509 Emergency medical services.
The provision and receipt of nonscheduled emergency medical
services that are prohibited by this part are authorized.
Sec. 551.510 Official business of the United States Government.
All transactions prohibited by this part that are for the conduct
of the official business of the United States Government by employees,
grantees, or contractors thereof are authorized.
Sec. 551.511 Official activities of international organizations.
All transactions and activities prohibited by this part that are
for the conduct of the official business of the United Nations and its
Specialized Agencies, Programmes, Funds, and Related Organizations by
employees, contractors, or grantees thereof are authorized.
Note 1 to Sec. 551.511. For an organizational chart listing the
Specialized Agencies, Programmes, Funds, and Related Organizations
of the United Nations, see the following page on the United Nations
website: https://www.unsceb.org/directory.
Subpart F--Reports
Sec. 551.601 Records and reports.
For provisions relating to required records and reports, see part
501, subpart C, of this chapter. Recordkeeping and reporting
requirements imposed by part 501 of this chapter with respect to the
prohibitions contained in this part are considered requirements arising
pursuant to this part.
Subpart G--Penalties and Findings of Violation
Sec. 551.701 Penalties.
(a) Section 206 of the International Emergency Economic Powers Act
(50 U.S.C. 1705) (IEEPA) is applicable to violations of the provisions
of any license, ruling, regulation, order, directive, or instruction
issued by or pursuant to the direction or authorization of the
Secretary of the Treasury pursuant to this part or otherwise under
IEEPA.
(1) A civil penalty not to exceed the amount set forth in section
206 of IEEPA
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may be imposed on any person who violates, attempts to violate,
conspires to violate, or causes a violation of any license, order,
regulation, or prohibition issued under IEEPA.
(2) IEEPA provides for a maximum civil penalty not to exceed the
greater of $311,562or an amount that is twice the amount of the
transaction that is the basis of the violation with respect to which
the penalty is imposed.
(3) A person who willfully commits, willfully attempts to commit,
willfully conspires to commit, or aids or abets in the commission of a
violation of any license, order, regulation, or prohibition may, upon
conviction, be fined not more than $1,000,000, or if a natural person,
be imprisoned for not more than 20 years, or both.
(b)(1) The civil penalties provided in IEEPA are subject to
adjustment pursuant to the Federal Civil Penalties Inflation Adjustment
Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 note).
(2) The criminal penalties provided in IEEPA are subject to
adjustment pursuant to 18 U.S.C. 3571.
(c) Pursuant to 18 U.S.C. 1001, whoever, in any matter within the
jurisdiction of the executive, legislative, or judicial branch of the
Government of the United States, knowingly and willfully falsifies,
conceals, or covers up by any trick, scheme, or device a material fact;
or makes any materially false, fictitious, or fraudulent statement or
representation; or makes or uses any false writing or document knowing
the same to contain any materially false, fictitious, or fraudulent
statement or entry shall be fined under title 18, United States Code,
imprisoned, or both.
(d) Section 5 of the United Nations Participation Act, as amended
(22 U.S.C. 287c(b)) (UNPA), provides that any person who willfully
violates or evades or attempts to violate or evade any order, rule, or
regulation issued by the President pursuant to the authority granted in
that section shall, upon conviction, be fined not more than $1,000,000
or, if a natural person, be imprisoned for not more than 20 years, or
both.
(e) Violations involving transactions described at section
203(b)(1) of IEEPA shall be subject only to the penalties set forth in
paragraph (d) of this section.
(f) Violations of this part may also be subject to other applicable
laws.
Sec. 551.702 Pre-Penalty Notice; settlement.
(a) When required. If OFAC has reason to believe that there has
occurred a violation of any provision of this part or a violation of
the provisions of any license, ruling, regulation, order, directive, or
instruction issued by or pursuant to the direction or authorization of
the Secretary of the Treasury pursuant to this part or otherwise under
the International Emergency Economic Powers Act (50 U.S.C. 1701-1706)
and determines that a civil monetary penalty is warranted, OFAC will
issue a Pre-Penalty Notice informing the alleged violator of the
agency's intent to impose a monetary penalty. A Pre-Penalty Notice
shall be in writing. The Pre-Penalty Notice may be issued whether or
not another agency has taken any action with respect to the matter. For
a description of the contents of a Pre-Penalty Notice, see appendix A
to part 501 of this chapter.
(b) Response--(1) Right to respond. An alleged violator has the
right to respond to a Pre-Penalty Notice by making a written
presentation to OFAC. For a description of the information that should
be included in such a response, see appendix A to part 501 of this
chapter.
(2) Deadline for response. A response to a Pre-Penalty Notice must
be made within 30 days as set forth in paragraphs (b)(2)(i) and (ii) of
this section. The failure to submit a response within 30 days shall be
deemed to be a waiver of the right to respond.
(i) Computation of time for response. A response to a Pre-Penalty
Notice must be postmarked or date-stamped by the U.S. Postal Service
(or foreign postal service, if mailed abroad) or courier service
provider (if transmitted to OFAC by courier), or dated if sent by
email, on or before the 30th day after the postmark date on the
envelope in which the Pre-Penalty Notice was mailed or date the Pre-
Penalty Notice was emailed. If the Pre-Penalty Notice was personally
delivered by a non-U.S. Postal Service agent authorized by OFAC, a
response must be postmarked or date-stamped on or before the 30th day
after the date of delivery.
(ii) Extensions of time for response. If a due date falls on a
federal holiday or weekend, that due date is extended to include the
following business day. Any other extensions of time will be granted,
at the discretion of OFAC, only upon specific request to OFAC.
(3) Form and method of response. A response to a Pre-Penalty Notice
need not be in any particular form, but it must be typewritten and
signed by the alleged violator or a representative thereof, contain
information sufficient to indicate that it is in response to the Pre-
Penalty Notice, and include the OFAC identification number listed on
the Pre-Penalty Notice. A copy of the written response may be sent by
facsimile, but the original also must be sent to OFAC's Office of
Compliance and Enforcement by mail or courier or email and must be
postmarked or date-stamped in accordance with paragraph (b)(2) of this
section.
(c) Settlement. Settlement discussion may be initiated by OFAC, the
alleged violator, or the alleged violator's authorized representative.
For a description of practices with respect to settlement, see appendix
A to part 501 of this chapter.
(d) Guidelines. Guidelines for the imposition or settlement of
civil penalties by OFAC are contained in appendix A to part 501 of this
chapter.
(e) Representation. A representative of the alleged violator may
act on behalf of the alleged violator, but any oral communication with
OFAC prior to a written submission regarding the specific allegations
contained in the Pre-Penalty Notice must be preceded by a written
letter of representation, unless the Pre-Penalty Notice was served upon
the alleged violator in care of the representative.
Sec. 551.703 Penalty imposition.
If, after considering any written response to the Pre-Penalty
Notice and any relevant facts, OFAC determines that there was a
violation by the alleged violator named in the Pre-Penalty Notice and
that a civil monetary penalty is appropriate, OFAC may issue a Penalty
Notice to the violator containing a determination of the violation and
the imposition of the monetary penalty. For additional details
concerning issuance of a Penalty Notice, see appendix A to part 501 of
this chapter. The issuance of the Penalty Notice shall constitute final
agency action. The violator has the right to seek judicial review of
that final agency action in federal district court.
Sec. 551.704 Administrative collection; referral to United States
Department of Justice.
In the event that the violator does not pay the penalty imposed
pursuant to this part or make payment arrangements acceptable to OFAC,
the matter may be referred for administrative collection measures by
the Department of the Treasury or to the United States Department of
Justice for appropriate action to recover the penalty in a civil suit
in a federal district court.
Sec. 551.705 Findings of Violation.
(a) When issued. (1) OFAC may issue an initial Finding of Violation
that identifies a violation if OFAC:
(i) Determines that there has occurred a violation of any provision
of this part, or a violation of the provisions of any
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license, ruling, regulation, order, directive, or instruction issued by
or pursuant to the direction or authorization of the Secretary of the
Treasury pursuant to this part or otherwise under the International
Emergency Economic Powers Act (50 U.S.C. 1701-1706);
(ii) Considers it important to document the occurrence of a
violation; and
(iii) Based on the Guidelines contained in appendix A to part 501
of this chapter, concludes that an administrative response is warranted
but that a civil monetary penalty is not the most appropriate response.
(2) An initial Finding of Violation shall be in writing and may be
issued whether or not another agency has taken any action with respect
to the matter. For additional details concerning issuance of a Finding
of Violation, see appendix A to part 501 of this chapter.
(b) Response--(1) Right to respond. An alleged violator has the
right to contest an initial Finding of Violation by providing a written
response to OFAC.
(2) Deadline for response; Default determination. A response to an
initial Finding of Violation must be made within 30 days as set forth
in paragraphs (b)(2)(i) and (ii) of this section. The failure to submit
a response within 30 days shall be deemed to be a waiver of the right
to respond, and the initial Finding of Violation will become final and
will constitute final agency action. The violator has the right to seek
judicial review of that final agency action in federal district court.
(i) Computation of time for response. A response to an initial
Finding of Violation must be postmarked or date-stamped by the U.S.
Postal Service (or foreign postal service, if mailed abroad) or courier
service provider (if transmitted to OFAC by courier), or dated if sent
by email, on or before the 30th day after the postmark date on the
envelope in which the initial Finding of Violation was served or date
the Finding of Violation was sent by email. If the initial Finding of
Violation was personally delivered by a non-U.S. Postal Service agent
authorized by OFAC, a response must be postmarked or date-stamped on or
before the 30th day after the date of delivery.
(ii) Extensions of time for response. If a due date falls on a
federal holiday or weekend, that due date is extended to include the
following business day. Any other extensions of time will be granted,
at the discretion of OFAC, only upon specific request to OFAC.
(3) Form and method of response. A response to an initial Finding
of Violation need not be in any particular form, but it must be
typewritten and signed by the alleged violator or a representative
thereof, contain information sufficient to indicate that it is in
response to the initial Finding of Violation, and include the OFAC
identification number listed on the initial Finding of Violation. A
copy of the written response may be sent by facsimile, but the original
also must be sent to OFAC by mail or courier or email and must be
postmarked or date-stamped in accordance with paragraph (b)(2) of this
section.
(4) Information that should be included in response. Any response
should set forth in detail why the alleged violator either believes
that a violation of the regulations did not occur and/or why a Finding
of Violation is otherwise unwarranted under the circumstances, with
reference to the General Factors Affecting Administrative Action set
forth in the Guidelines contained in appendix A to part 501 of this
chapter. The response should include all documentary or other evidence
available to the alleged violator that supports the arguments set forth
in the response. OFAC will consider all relevant materials submitted in
the response.
(c) Determination--(1) Determination that a Finding of Violation is
warranted. If, after considering the response, OFAC determines that a
final Finding of Violation should be issued, OFAC will issue a final
Finding of Violation that will inform the violator of its decision. A
final Finding of Violation shall constitute final agency action. The
violator has the right to seek judicial review of that final agency
action in federal district court.
(2) Determination that a Finding of Violation is not warranted. If,
after considering the response, OFAC determines a Finding of Violation
is not warranted, then OFAC will inform the alleged violator of its
decision not to issue a final Finding of Violation.
Note 1 to paragraph (c)(2). A determination by OFAC that a final
Finding of Violation is not warranted does not preclude OFAC from
pursuing other enforcement actions consistent with the Guidelines
contained in appendix A to part 501 of this chapter.
(d) Representation. A representative of the alleged violator may
act on behalf of the alleged violator, but any oral communication with
OFAC prior to a written submission regarding the specific alleged
violations contained in the initial Finding of Violation must be
preceded by a written letter of representation, unless the initial
Finding of Violation was served upon the alleged violator in care of
the representative.
Subpart H--Procedures
Sec. 551.801 Procedures.
For license application procedures and procedures relating to
amendments, modifications, or revocations of licenses; administrative
decisions; rulemaking; and requests for documents pursuant to the
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see
part 501, subpart E, of this chapter.
Sec. 551.802 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 (E.O.) 13536 of April 12, 2010, E.O. 13620
of July 20, 2012, and any further Executive orders relating to the
national emergency declared in E.O. 13536, 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.
Subpart I--Paperwork Reduction Act
Sec. 551.901 Paperwork Reduction Act notice.
For approval by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information
collections relating to recordkeeping and reporting requirements,
licensing procedures, and other procedures, see Sec. 501.901 of this
chapter. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a valid control number assigned by OMB.
Bradley T. Smith,
Acting Director, Office of Foreign Assets Control.
[FR Doc. 2021-08836 Filed 4-27-21; 8:45 am]
BILLING CODE 4810-AL-P