Narcotics Trafficking Sanctions Regulations and Foreign Narcotics Kingpin Sanctions Regulations, 26661-26671 [2021-10314]

Agencies

• DEPARTMENT OF THE TREASURY
• Office of Foreign Assets Control

[Federal Register Volume 86, Number 93 (Monday, May 17, 2021)]
[Rules and Regulations]
[Pages 26661-26671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10314]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 536 and 598


Narcotics Trafficking Sanctions Regulations and Foreign Narcotics 
Kingpin Sanctions Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule.

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SUMMARY: The Department of the Treasury's Office of Foreign Assets 
Control (OFAC) is amending the Narcotics Trafficking Sanctions 
Regulations and the Foreign Narcotics Kingpin Sanctions Regulations to 
add or amend general licenses with respect to payments for legal 
services, certain transactions for personal maintenance, certain 
transactions for maintenance of blocked tangible property, and 
emergency medical services. In addition, OFAC is amending certain 
prohibitions, definitions, and interpretive sections contained in these 
sets of regulations. OFAC is also updating certain regulatory 
provisions and making other technical and conforming edits.

DATES: This rule is effective May 17, 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

    OFAC administers two sanctions programs with respect to narcotics 
trafficking. The Narcotics Trafficking Sanctions Regulations, 31 CFR 
part 536 (NTSR), implement Executive Order (E.O.) 12978 of October 21, 
1995, ``Blocking Assets and Prohibiting Transactions With Significant 
Narcotics Traffickers'' (60 FR 54579, October 24, 1995), as amended by 
E.O. 13286 of February 28, 2003, ``Amendment of Executive Orders, and 
Other Actions, in Connection With the Transfer of Certain Functions to 
the Secretary of Homeland Security'' (68 FR 10619, March 3, 2003), in 
which the President declared a national emergency, and imposed 
sanctions, with respect to ``the actions

[[Page 26662]]

of significant foreign narcotics traffickers centered in Colombia, and 
the unparalleled violence, corruption, and harm that they cause in the 
United States and abroad.''
    The Foreign Narcotics Kingpin Sanctions Regulations, 31 CFR part 
598 (FNKSR), implement the Foreign Narcotics Kingpin Designation Act 
(21 U.S.C. 1901-1908), which provides authority for the application of 
sanctions to significant foreign narcotics traffickers and their 
organizations operating worldwide.

Current Regulatory Action

    OFAC is adopting this final rule amending the NTSR and the FNKSR 
with respect to general licenses for payments for legal services, 
certain transactions for personal maintenance, certain transactions for 
maintenance of blocked tangible property, and emergency medical 
services, as set forth in more detail below. OFAC is also amending 
certain prohibitions, definitions, and interpretive sections, updating 
certain regulatory provisions, and making other technical and 
conforming edits, as also described below.
    Payments for legal services. Section 536.506 of the NTSR and Sec.  
598.507 of the FNKSR authorize U.S. persons to provide certain legal 
services to or on behalf of a specially designated narcotics trafficker 
(SDNT), as defined in Sec.  536.312 and Sec.  598.314, respectively, 
provided that any payment of professional fees and reimbursement of 
incurred expenses must be specifically licensed. OFAC is amending the 
NTSR and the FNKSR to authorize certain permissible payment mechanisms 
for legal services without the need for a specific license. With these 
amendments, OFAC incorporates two mechanisms for payment for legal 
services. As set forth in the regulations, these new mechanisms for the 
payment of legal services are subject to additional reporting and 
recordkeeping requirements and other conditions and limitations.
    First, new Sec.  536.507 of the NTSR and new Sec.  598.508 of the 
FNKSR now authorize payments from funds originating outside the United 
States and that do not come from a U.S. person or any person whose 
property and interests in property are blocked, other than the person 
to whom or on whose behalf the authorized legal services are provided.
    Second, new Sec.  536.508 of the NTSR and new Sec.  598.509 of the 
FNKSR now authorize payment of professional fees and reimbursement of 
incurred expenses from public funds in connection with authorized legal 
services rendered on behalf of blocked persons.
    Certain transactions for personal maintenance. OFAC also is adding 
general licenses in new Sec.  536.509 of the NTSR and new Sec.  598.510 
of the FNKSR, authorizing SDNTs who are in U.S. custody or incarcerated 
in the United States to engage in certain personal maintenance 
transactions. Specifically, these new general licenses authorize SDNTs 
in U.S. custody or incarcerated in the United States to engage in 
certain transactions for their maintenance and the maintenance of their 
spouse or persons who are sharing or who would ordinarily share a 
common dwelling as a family with them, including receiving goods and 
services, engaging in employment, and establishing accounts at U.S. 
financial institutions. These new general licenses are subject to 
additional reporting and recordkeeping requirements and other 
conditions and limitations set forth in those sections.
    Certain transactions for maintenance of tangible blocked property. 
OFAC is adding general licenses at new Sec.  536.510 of the NTSR and 
new Sec.  598.511 of the FNKSR, authorizing SDNTs to make payment for, 
and receive goods and services for the maintenance of, tangible 
property blocked pursuant to Sec.  536.201 of the NTSR and Sec.  
598.202(a) of the FNKSR, consistent with Sec. Sec.  536.206 of the NTSR 
and 598.207 of the FNKSR. These new general licenses are subject to 
additional reporting and recordkeeping requirements and other 
conditions and limitations set forth in those sections.
    Emergency medical services. OFAC is amending the general license in 
Sec.  536.511 of the NTSR to expand the existing authorization and 
adding a general license in new Sec.  598.512 of the FNKSR, each 
authorizing the provision and receipt of nonscheduled emergency medical 
services. Revised Sec.  536.511 of the NTSR no longer requires that 
payment for such services be specifically licensed.
    Definitions. OFAC is adding and amending several definitions. To 
clarify the term narcotics trafficking as used in Sec. Sec.  536.311 
and 598.310, OFAC is adding, in new Sec.  536.318 of the NTSR and new 
Sec.  598.320 of the FNKSR, a definition of the term finance. OFAC is 
also adding, in Sec.  536.319, definitions of the terms narcotic drug, 
controlled substance, and listed chemical.
    OFAC also is amending the definition of foreign person in Sec.  
536.304 of the NTSR and Sec.  598.305 of the FNKSR to add the qualifier 
``wherever located'' to clarify that the term includes foreign and dual 
nationals regardless of their location. OFAC is amending the definition 
of specially designated narcotics trafficker in Sec.  536.312 of the 
NTSR and Sec.  598.314 of the FNKSR to clarify that these terms include 
entities directly or indirectly owned 50 percent or more by one or more 
specially designated narcotics traffickers, whether individually or in 
the aggregate, as well as updating the definition of the terms blocked 
account and blocked property in Sec.  536.301 of the NTSR and Sec.  
598.301 of the FNKSR, to add a note referencing the definition of 
specially designated narcotics trafficker. OFAC is adding, in new Sec.  
536.319 of the NTSR and new Sec.  598.321 of the FNKSR, a definition of 
the term OFAC to mean the Department of the Treasury's Office of 
Foreign Assets Control.
    Prohibited transactions and interpretive sections. OFAC is updating 
the regulatory provisions with respect to prohibited transactions 
involving blocked property in Sec.  536.201 of the NTSR. OFAC is 
similarly updating the FNKSR by consolidating two existing sections 
into revised Sec.  598.202 and removing and reserving Sec.  598.203. In 
Sec.  536.204 and Sec.  598.204, OFAC is clarifying the terms evasions, 
attempts, and conspiracies in the NTSR and the FNKSR to be consistent 
with the definitions of these terms in other OFAC sanctions 
regulations. In new Sec.  536.410 of the NTSR and new Sec.  598.411 of 
the FNKSR, OFAC is clarifying that these prohibitions include 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, and the receipt of any contribution or 
provision of funds, goods, or services from any such person. Pursuant 
to the International Emergency Economic Powers Act (50 U.S.C. 1701 et 
seq.) (IEEPA), the NTSR include an exception to this prohibition for 
donations of articles, such as food, clothing, and medicine, intended 
to be used to relieve human suffering, because E.O. 12978, as amended, 
does not include a presidential determination to the contrary.
    Updated delegation of authority by the Secretary of the Treasury. 
This rule also updates the delegation of authority in Sec.  598.803 of 
the FNKSR to add the Presidential Memorandum of May 15, 2015: 
Delegation of Functions Under the Foreign Narcotics Kingpin Designation 
Act and the Presidential Memorandum of May 31, 2013: Delegation of 
Functions Under Subsection 804(h)(2)(A) of the Foreign Narcotics 
Kingpin Designation Act.
    Other technical and conforming changes. OFAC is updating certain

[[Page 26663]]

regulatory provisions and making other technical and conforming 
changes. OFAC is updating and conforming the language in Sec.  536.203 
of the NTSR and Sec.  598.206 of the FNKSR related to the holding of 
funds in interest-bearing accounts and investment and reinvestment. In 
new Sec.  536.206 of the NTSR and new Sec.  598.207 of the FNKSR, OFAC 
is adding a standard provision relating to expenses of maintaining 
blocked tangible property and liquidation of blocked property. OFAC is 
updating and combining the definitions of the terms general license, 
license, and specific license in Sec. Sec.  536.305, 536.308, and 
536.313 of the NTSR and Sec. Sec.  598.306, 598.308, and 598.315 of the 
FNKSR, as well as adding Sec.  536.300 to the NTSR and Sec.  598.300 to 
the FNKSR to clarify that the definitions described in Subpart C of 
each part apply to the entire part. OFAC is updating the language of 
and making conforming edits to Sec. Sec.  598.404, 598.407, and 598.409 
of the FNKSR to reference Sec.  598.202 instead of Sec.  598.203. OFAC 
is also updating the language of Sec.  536.406 in the NTSR and Sec.  
598.406 in the FNKSR, including adding a note referencing the emergency 
medical services authorization. In Sec.  536.506 of the NTSR and Sec.  
598.507 of the FNKSR, OFAC is updating regulatory provisions relating 
to the provision of legal services. Finally, OFAC is updating the 
authorities citation of the NTSR.

Public Participation

    Because the NFSR and the FNKSR 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 NTSR and the FNKSR 
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

31 CFR Part 536

    Administrative practice and procedure, Banks, Banking, Blocking of 
assets, Credit, Currency, Drug traffic control, Foreign investments in 
U.S., Narcotics trafficking, Foreign trade, Penalties, Reporting and 
recordkeeping requirements, Sanctions, Securities, Specially designated 
narcotics traffickers, Transfer of assets.

31 CFR Part 598

    Administrative practice and procedure, Banks, Banking, Blocking of 
assets, Credit, Currency, Drug traffic control, Foreign investments in 
U.S., Narcotics trafficking, Foreign trade, Penalties, Reporting and 
recordkeeping requirements, Sanctions, Securities, Significant foreign 
narcotics traffickers, Specially designated narcotics traffickers, 
Transfer of assets.

    For the reasons set forth in the preamble, the Department of the 
Treasury's Office of Foreign Assets Control amends 31 CFR parts 536 and 
598 as follows:

PART 536--NARCOTICS TRAFFICKING SANCTIONS REGULATIONS

0
1. The authority citation for part 536 continues to read as follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; Pub. L. 101-410, 104 Stat. 890, as amended (28 U.S.C. 
2461 note); E.O. 12978, 60 FR 54579, 3 CFR, 1995 Comp., p. 415; E.O. 
13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 166.

Subpart B--Prohibitions

0
2. Revise Sec.  536.201 to read as follows:


Sec.  536.201  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 a specially designated 
narcotics trafficker are blocked and may not be transferred, paid, 
exported, withdrawn, or otherwise dealt in.
    (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, other than donations of articles, such as food, clothing, and 
medicine, intended to be used to relieve human suffering; 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 
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, a specially designated 
narcotics trafficker 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.

    Note 1 to Sec.  536.201: See Sec.  536.312 and the notes to that 
section for the definition and information about the public listing 
of specially designated narcotics traffickers and OFAC's Specially 
Designated Nationals and Blocked Persons List (SDN List). See Sec.  
536.312(d) 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.  536.201: 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, and administrative reconsideration of 
their status as persons whose property and interests in property are 
blocked pursuant to this section.


0
3. Revise Sec.  536.203 to read as follows:


Sec.  536.203  Holding of funds in interest-bearing accounts; 
investment and reinvestment.

    (a) Except as provided in paragraphs (e) or (f) of this section, or 
as otherwise directed or authorized by OFAC, any U.S. person holding 
funds, such as currency, bank deposits, or liquidated financial 
obligations, subject to Sec.  536.201 shall hold or place such funds in 
a blocked interest-bearing account located in the United States.

[[Page 26664]]

    (b)(1) For purposes of this section, the term blocked interest-
bearing account means a blocked account:
    (i) In a federally insured U.S. bank, thrift institution, or credit 
union, provided the funds are earning interest at rates that are 
commercially reasonable; or
    (ii) With a broker or dealer registered with the Securities and 
Exchange Commission under the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), provided the funds are invested in a money market 
fund or in U.S. Treasury bills.
    (2) Funds held or placed in a blocked account pursuant to paragraph 
(a) of this section may not be invested in instruments the maturity of 
which exceeds 180 days.
    (c) For purposes of this section, a rate is commercially reasonable 
if it is the rate currently offered to other depositors on deposits or 
instruments of comparable size and maturity.
    (d) For purposes of this section, if interest is credited to a 
separate blocked account or subaccount, the name of the account party 
on each account must be the same.
    (e) Blocked funds held in instruments the maturity of which exceeds 
180 days at the time the funds become subject to Sec.  536.201 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 paragraphs 
(a) or (f) of this section.
    (f) Blocked funds held in accounts or instruments outside the 
United States at the time the funds become subject to Sec.  536.201 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 a specially designated narcotics trafficker, nor may their 
holder cooperate in or facilitate the pledging or other attempted use 
as collateral of blocked funds or other assets.

0
4. Revise Sec.  536.204 to read as follows:


Sec.  536.204  Evasions; attempts; conspiracies.

    (a) Any transaction on or after the effective date that 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.

0
5. Add Sec.  536.206 to subpart B to read as follows:


Sec.  536.206  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.  536.201 
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.  536.201 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.

Subpart C--General Definitions

0
6. Add Sec.  536.300 to subpart C to read as follows:


Sec.  536.300  Applicability of definitions.

    The definitions in this subpart apply throughout the entire part.

0
7. Revise Sec.  536.301 to read as follows:


Sec.  536.301  Blocked account; blocked property.

    The terms blocked account and blocked property mean any account or 
property subject to the prohibitions in Sec.  536.201 held in the name 
of a specially designated narcotics trafficker, 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.  536.301: See Sec.  536.312 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 specially designated 
narcotics traffickers.


0
8. Revise Sec.  536.304 to read as follows:


Sec.  536.304  Foreign person.

    The term foreign person means any citizen or national of a foreign 
state (including any such individual who is also a citizen or national 
of the United States), wherever located, or any entity not organized 
solely under the laws of the United States or existing solely in the 
United States, but does not include a foreign state.


Sec.  536.305  [Removed and Reserved]

0
9. Remove and reserve Sec.  536.305.

0
10. Revise Sec.  536.308 to read as follows:


Sec.  536.308  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.  536.308: See Sec.  501.801 of this chapter on 
licensing procedures.


0
11. Revise Sec.  536.312 to read as follows:


Sec.  536.312  Specially designated narcotics trafficker.

    The term specially designated narcotics trafficker means:
    (a) Persons listed in the Annex to Executive Order 12978 of October 
24, 1995, as amended;
    (b) Foreign persons designated by the Secretary of the Treasury, in 
consultation with the Attorney General, Secretary of Homeland Security, 
and the Secretary of State, because they are found:
    (1) To play a significant role in international narcotics 
trafficking centered in Colombia; or
    (2) Materially to assist in, or provide financial or technological 
support for or goods or services in support of, the narcotics 
trafficking activities of specially designated narcotics traffickers;
    (c) Persons determined by the Secretary of the Treasury, in 
consultation with the Attorney General, Secretary of Homeland Security, 
and the Secretary of State, to be owned or controlled by, or to act for 
or on behalf of, any other specially designated narcotics trafficker; 
and
    (d) Entities owned in the aggregate, directly or indirectly, 50 
percent or

[[Page 26665]]

more by one or more specially designated narcotics traffickers.

    Note 1 to Sec.  536.312: The names of persons determined to fall 
within paragraph (a), (b), or (c) of this section, whose property 
and interests in property therefore are blocked pursuant to Sec.  
536.201, are published in the Federal Register and incorporated into 
OFAC's Specially Designated Nationals and Blocked Persons List (SDN 
List) with the identifier ``[SDNT].'' 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. Entities that fall within paragraph (d) 
of this section are also persons whose property and interests in 
property are blocked pursuant to this part, whether or not they are 
identified by OFAC or appear on the SDN List.


    Note 2 to Sec.  536.312:  The International Emergency Economic 
Powers Act (50 U.S.C. 1701-1706), in Section 203 (50 U.S.C. 1702), 
authorizes the blocking of the 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 Sec.  536.201 also are published in the 
Federal Register and incorporated into the SDN List with the 
identifier ``[BPI-SDNT].''


    Note 3 to Sec.  536.312: 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 part.

Sec.  536.313  [Removed and Reserved]

0
12. Remove and reserve Sec.  536.313.


0
13. Add Sec.  536.318 to subpart C to read as follows:


Sec.  536.318  Finance.

    The term finance includes engaging in any transaction involving 
funds, other assets, property, or interest in property, that are 
derived, obtained, or retained from, directly or indirectly, narcotic 
drugs, controlled substances, or listed chemicals. This includes the 
transporting, transmitting, or transferring of any such assets, 
property, or interests in property that creates the appearance that the 
funds, assets, or property were legitimately acquired, furthers the 
illicit activity, conceals or disguises the assets, avoids reporting 
requirements, or otherwise promotes the carrying on of illicit 
activity, such as money laundering.

    Note 1 to Sec.  536.318: The definition of finance listed above 
is specific to this part and not any other parts of Chapter 31. See 
Sec.  536.101.


0
14. Add Sec.  536.319 to subpart C to read as follows:


Sec.  536.319  Narcotic drug; controlled substance; listed chemical.

    The terms narcotic drug, controlled substance, and listed chemical 
have the meanings given those terms in section 102 of the Controlled 
Substances Act (21 U.S.C. 802).

0
15. Add Sec.  536.320 to subpart C to read as follows:


Sec.  536.320  OFAC.

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

Subpart D--Interpretations

0
16. Revise Sec.  536.406 to read as follows:


Sec.  536.406  Provision of services.

    (a) The prohibitions on transactions contained in Sec.  536.201 
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 specially designated 
narcotics trafficker; or
    (2) With respect to property interests of a specially designated 
narcotics trafficker.
    (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 specially designated narcotics trafficker.

    Note 1 to Sec.  536.406: See Sec. Sec.  536.506 and 536.511 on 
licensing policy with regard to the provision of certain legal and 
emergency medical services.


0
17. Revise Sec.  536.407 to read as follows:


Sec.  536.407  Offshore transactions involving blocked property.

    The prohibitions in Sec.  536.201 on transactions or dealings 
involving blocked property, as defined in Sec.  536.301, apply to 
transactions by any U.S. person in a location outside the United 
States.

0
18. Revise Sec.  536.409 to read as follows:


Sec.  536.409  Credit extended and cards issued by financial 
institutions to a person whose property and interests in property are 
blocked.

    The prohibition in Sec.  536.201 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 specially designated narcotics trafficker.

0
19. Add Sec.  536.410 to subpart D to read as follows:


Sec.  536.410  Charitable contributions.

    Unless specifically authorized by OFAC pursuant to this part, no 
charitable contribution of funds, goods, services, or technology, 
except donations of articles, such as food, clothing, and medicine, 
intended to relieve human suffering, may be made by, to, or for the 
benefit of, or received from, a specially designated narcotics 
trafficker. For the purposes of this part, a contribution is made by, 
to, or for the benefit of, or received from, a specially designated 
narcotics trafficker 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.

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

0
20. Revise Sec.  536.506 to read as follows:


Sec.  536.506  Provision of certain legal services.

    (a) The provision of the following legal services to or on behalf 
of specially designated narcotics traffickers is authorized, provided 
that any receipt of payment of professional fees and reimbursement of 
incurred expenses must be authorized pursuant to Sec.  536.507 or 
536.508, which authorize certain payments for legal services; via 
specific licenses; 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

[[Page 26666]]

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 specially 
designated narcotics traffickers 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 this paragraph. Additionally, U.S. persons 
who provide services authorized by 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.  536.405.
    (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.  536.201 is prohibited unless licensed 
pursuant to this part.

    Note 1 to Sec.  536.506: 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.  536.507  [Redesignated as Sec.  536.511]

0
21. Redesignate Sec.  536.507 as Sec.  536.511.


0
22. Add new Sec.  536.507 to subpart E to read as follows:


Sec.  536.507  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.  536.506(a) to 
or on behalf of a specially designated narcotics trafficker 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.  536.506(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 this paragraph authorizes payments for legal 
services using funds in which a specially designated narcotics 
trafficker, or any other person whose property and interests in 
property are blocked pursuant to 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.

0
23. Add Sec.  536.508 to subpart E to read as follows:


Sec.  536.508  Payment of legal fees and expenses at public expense.

    U.S. persons that are attorneys, law firms, or legal services 
organizations are authorized to receive payment of professional fees 
and reimbursement of incurred expenses from public funds for the 
provision of legal services authorized by Sec.  536.506(a).

0
24. Add Sec.  536.509 to subpart E to read as follows:


Sec.  536.509  Certain transactions for maintenance, employment, and 
related banking services for blocked individuals physically located in 
the United States.

    (a) Individuals who are specially designated narcotics traffickers 
who are in U.S. custody or incarcerated in jails, prisons, or similar 
facilities in the United States (``covered individuals''), are 
authorized to engage in the following transactions within the United 
States:
    (1) Purchasing, making payment for, and receiving goods and 
services for their maintenance and the maintenance of their spouse or 
persons who would ordinarily share a common dwelling as a family with 
them, located in the United States, including food, clothing, housing, 
medical care, education, transportation, insurance, and utilities;
    (2) Obtaining or continuing employment and engaging in all 
transactions ordinarily incident to such employment, including receipt 
of salary and benefits;
    (3) Establishing accounts with a U.S. financial institution, or a 
commissary-type account with a prison, jail, or other similar facility, 
located in the United States, for use in connection with the 
transactions authorized in paragraph (a)(1) and (a)(2) of this section; 
and
    (4) Receiving and making funds transfers in furtherance of the 
authorized transactions set forth in paragraphs (a)(1) through (3) of 
this section from unblocked funds originating within or outside the 
United States, provided that any funds received may not originate from 
any individual or entity whose property or interests in property are 
blocked pursuant to any part of this chapter or any Executive order or 
statute, other than the covered individual or his or her spouse or 
persons who would ordinarily share a common dwelling as a family with 
the covered individual.
    (b) Any financial institution that has established any account 
pursuant to paragraph (a)(3) of this section, excluding commissary-type 
accounts with prisons, jails, or other similar facilities, must provide 
the name and address of the financial institution, the name of the 
account holder, and the account number to OFAC within 10 business days 
of the establishment of the account.
    (c) This general license does not authorize any funds transfers to 
any location outside the United States.

    Note 1 to paragraph (c): A covered individual has an interest in 
any funds remaining in a commissary-type account

[[Page 26667]]

with a prison, jail, or other similar facility established pursuant 
to paragraph (a)(3) of this section after the covered individual is 
released from custody or incarceration.


    Note 2 to paragraph (c): In the case of individuals who are in 
custody or incarcerated, funds transfers must be authorized by and 
consistent with the conditions, protocols, and other requirements 
established by the jail, prison, or other facility.


    Note 3 to Sec.  536.509:  The authorization in this section only 
applies to laws and regulations administered by OFAC and should not 
be interpreted to excuse compliance with other applicable laws or 
regulations, including the immigration laws of the United States.


0
25. Add Sec.  536.510 to subpart E to read as follows:


Sec.  536.510  Certain transactions for the expenses of maintaining 
blocked tangible property.

    (a) Specially designated narcotics traffickers are authorized to 
engage in the following transactions:
    (1) Making payment for and receiving goods and services for the 
maintenance of blocked tangible property required pursuant to Sec.  
536.206; and
    (2) Receiving and making funds transfers in furtherance of the 
authorized transactions set forth in paragraph (a)(1) of this section 
from unblocked funds originating outside the United States, provided 
that any funds received may not originate from any individual or entity 
whose property or interests in property are blocked pursuant to any 
part of this chapter or any Executive order or statute, other than the 
specially designated narcotics trafficker(s), who owns the property.
    (b)(1) Any person making payment for or receiving goods and 
services for the maintenance of tangible property blocked pursuant to 
Sec.  536.201 and authorized by paragraph (a)(1) of this section must 
file a report on the transactions with OFAC within 30 days of the first 
transaction related to that property and annually thereafter. Such 
reports shall include the following numbered sections and information:
    (i) Estimated or actual dollar value of the transaction(s), as 
determined by the value of the payment, goods, or services;
    (ii) A description of the blocked property;
    (iii) The parties involved;
    (iv) The type and scope of transactions conducted; and
    (v) The dates and duration of the transactions.
    (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.

0
26. Revise newly redesignated Sec.  536.511 to read as follows:


Sec.  536.511  Emergency medical services.

    The provision and receipt of nonscheduled emergency medical 
services that are prohibited by this part are authorized.

PART 598--FOREIGN NARCOTICS KINGPIN SANCTIONS REGULATIONS

0
27. The authority citation for part 598 is revised to read as follows:

    Authority: 3 U.S.C. 301; 21 U.S.C. 1901-1908; 31 U.S.C. 321(b); 
Pub. L. 101-410, 104 Stat. 890, as amended (28 U.S.C. 2461 note).

Subpart B--Prohibitions

0
28. Revise Sec.  598.202 to read as follows:


Sec.  598.202  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 a specially designated 
narcotics trafficker are blocked and may not be transferred, paid, 
exported, withdrawn, or otherwise dealt in.

    Note 1 to paragraph (a): See Sec.  598.314 and the notes to that 
section for the definition and information about the public listing 
of specially designated narcotics traffickers and OFAC's Specially 
Designated Nationals and Blocked Persons List (SDN List). See 
paragraph (c) of Sec.  598.314 concerning entities that may not be 
listed on the SDN List but whose property and interests in property 
are nevertheless blocked pursuant to paragraph (a) of this section.


    Note 2 to paragraph (a): 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, and administrative reconsideration of 
their status as persons whose property and interests in property are 
blocked pursuant to paragraph (a) of this section.

    (b) The prohibitions in paragraph (a) of this section include 
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 
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, a specially designated 
narcotics trafficker 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.


Sec.  598.203  [Removed and Reserved]

0
29. Remove and reserve Sec.  598.203.


0
30. Revise Sec.  598.204 to read as follows:


Sec.  598.204  Evasions; attempts; conspiracies.

    (a) Any transaction on or after the effective date that 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.

0
31. Revise Sec.  598.206 to read as follows:


Sec.  598.206  Holding of funds in interest-bearing accounts; 
investment and reinvestment.

    (a) Except as provided in paragraphs (e) or (f) of this section, or 
as otherwise directed or authorized by OFAC, any U.S. person holding 
funds, such as currency, bank deposits, or liquidated financial 
obligations, subject to Sec.  598.202 shall hold or place such funds in 
a blocked interest-bearing account located in the United States.

[[Page 26668]]

    (b)(1) For purposes of this section, the term blocked interest-
bearing account means a blocked account:
    (i) In a federally insured U.S. bank, thrift institution, or credit 
union, provided the funds are earning interest at rates that are 
commercially reasonable; or
    (ii) With a broker or dealer registered with the Securities and 
Exchange Commission under the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), provided the funds are invested in a money market 
fund or in U.S. Treasury bills.
    (2) Funds held or placed in a blocked account pursuant to paragraph 
(a) of this section may not be invested in instruments the maturity of 
which exceeds 180 days.
    (c) For purposes of this section, a rate is commercially reasonable 
if it is the rate currently offered to other depositors on deposits or 
instruments of comparable size and maturity.
    (d) For purposes of this section, if interest is credited to a 
separate blocked account or subaccount, the name of the account party 
on each account must be the same.
    (e) Blocked funds held in instruments the maturity of which exceeds 
180 days at the time the funds become subject to Sec.  598.202 may 
continue to be held until maturity in the original instrument, provided 
any interest, earnings, or other proceeds derived therefrom are paid 
into a blocked interest-bearing account in accordance with paragraphs 
(a) or (f) of this section.
    (f) Blocked funds held in accounts or instruments outside the 
United States at the time the funds become subject to Sec.  598.202 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 immediate financial or economic 
benefit or access to any person whose property and interests in 
property are blocked pursuant to Sec.  598.202, nor may their holder 
cooperate in or facilitate the pledging or other attempted use as 
collateral of blocked funds or other assets.

0
32. Add Sec.  598.207 to subpart B to read as follows:


Sec.  598.207  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.  598.202 
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.  598.202 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.

Subpart C--General Definitions

0
33. Add Sec.  598.300 to subpart C to read as follows:


Sec.  598.300  Applicability of definitions.

    The definitions in this subpart apply throughout the entire part.

0
34. Revise Sec.  598.301 to read as follows:


Sec.  598.301  Blocked account; blocked property.

    The terms blocked account and blocked property shall mean any 
account or property subject to the prohibitions in Sec.  598.202 held 
in the name of a specially designated narcotics trafficker, 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.  598.301: See Sec.  598.314 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 specially designated 
narcotics traffickers.


0
35. Revise Sec.  598.305 to read as follows:


Sec.  598.305  Foreign person.

    The term foreign person means any citizen or national of a foreign 
state, wherever located, or any entity not organized under the laws of 
the United States, but does not include a foreign state.


Sec.  598.306  [Removed and Reserved]

0
36. Remove and reserve Sec.  598.306.


0
37. Revise Sec.  598.308 to read as follows:


Sec.  598.308  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.  598.308: See Sec.  501.801 of this chapter on 
licensing procedures.


0
38. Revise Sec.  598.313 to read as follows:


Sec.  598.313  Significant foreign narcotics trafficker.

    The term significant foreign narcotics trafficker means any foreign 
person that plays a significant role in international narcotics 
trafficking that the President has determined to be appropriate for 
sanctions and has publicly identified under section 804(b) or section 
804(h)(1) of the Foreign Narcotics Kingpin Designation Act (21 U.S.C. 
1903(b) or (h)(1)).

    Note 1 to Sec.  598.313: On May 15, 2015, the functions 
conferred upon the President by sections 804(b) and (h) of the 
Foreign Narcotics Kingpin Designation Act (21 U.S.C. 1903(b) and 
(h)), were delegated to the Secretary of the Treasury.


0
39. Revise Sec.  598.314 to read as follows:


Sec.  598.314   Specially designated narcotics trafficker.

    The term specially designated narcotics trafficker means:
    (a) Significant foreign narcotics traffickers; and
    (b) Foreign persons designated by the Secretary of the Treasury, in 
consultation with the Attorney General, the Director of Central 
Intelligence, the Director of the Federal Bureau of Investigation, the 
Administrator of the Drug Enforcement Administration, the Secretary of 
Defense, and the Secretary of State, because they are found to be:
    (1) Materially assisting in, or providing financial or 
technological support for or to, or providing goods or services in 
support of, the international narcotics trafficking activities of a 
specially designated narcotics trafficker;
    (2) Owned, controlled, or directed by, or acting for or on behalf 
of, a specially designated narcotics trafficker; or

[[Page 26669]]

    (3) Playing a significant role in international narcotics 
trafficking; and
    (c) Entities owned in the aggregate, directly or indirectly, 50 
percent or more by one or more specially designated narcotics 
traffickers.

    Note 1 to Sec.  598.314: The names of persons determined to fall 
within paragraph (a) or (b) of this definition, whose property and 
interests in property therefore are blocked pursuant to this part, 
are published in the Federal Register and incorporated into OFAC's 
Specially Designated Nationals and Blocked Persons List (SDN List) 
with the identifier ``[SDNTK].'' 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. Entities that fall within paragraph (c) 
of this section are also persons whose property and interests in 
property are blocked pursuant to this part, regardless of whether 
they are identified by OFAC or appear on the SDN List.


    Note 2 to Sec.  598.314: The Foreign Narcotics Kingpin 
Designation Act (21 U.S.C. 1901-1908), in Section 806 (21 U.S.C. 
1905), 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 part also are published in the 
Federal Register and incorporated into the SDN List with the 
identifier ``[BPI-SDNTK].''


    Note 3 to Sec.  598.314: 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 part.

Sec.  598.315  [Removed and Reserved]

0
40. Remove and reserve Sec.  598.315.


0
41. Add Sec.  598.320 to subpart C to read as follows:


Sec.  598.320  Finance.

    The term finance includes engaging in any transaction involving 
funds, other assets, property, or interest in property, that are 
derived, obtained, or retained from, directly or indirectly, narcotic 
drugs, controlled substances, or listed chemicals. This includes the 
transporting, transmitting, or transferring of any such assets, 
property, or interests in property that creates the appearance that the 
funds, assets, or property were legitimately acquired, furthers the 
illicit activity, conceals or disguises the assets, avoids reporting 
requirements, or otherwise promotes the carrying on of illicit 
activity, such as money laundering.

    Note 1 to Sec.  598.320: The definition of finance listed above 
is specific to this part and not any other parts of Chapter 31. See 
Sec.  598.101.


0
42. Add Sec.  598.321 to subpart C to read as follows:


Sec.  598.321  OFAC.

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

Subpart D--Interpretations

0
43. Revise Sec.  598.404 to read as follows:


Sec.  598.404  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.  598.202 if effected after the effective date.

0
44. Revise Sec.  598.406 to read as follows:


Sec.  598.406  Provision of services.

    (a) The prohibitions on transactions contained in Sec.  598.202 
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 specially designated 
narcotics trafficker; or
    (2) With respect to property interests of a specially designated 
narcotics trafficker.
    (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 specially designated narcotics trafficker.

    Note 1 to Sec.  598.406: See Sec. Sec.  598.507 and 598.513 on 
licensing policy with regard to the provision of certain legal and 
emergency medical services.


0
45. Revise Sec.  598.407 to read as follows:


Sec.  598.407  Offshore transactions involving blocked property.

    The prohibitions in Sec.  598.202 on transactions or dealings 
involving blocked property, as defined in Sec.  598.301, apply to 
transactions by any U.S. person in a location outside the United 
States.

0
46. Revise Sec.  598.409 to read as follows:


Sec.  598.409  Credit extended and cards issued by financial 
institutions to a specially designated narcotics trafficker.

    The prohibition in Sec.  598.202 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 specially designated narcotics trafficker.

0
47. Add Sec.  598.411 to subpart D to read as follows:


Sec.  598.411  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 specially designated narcotics trafficker. For the 
purposes of this part, a contribution is made by, to, or for the 
benefit of, or received from, a specially designated narcotics 
trafficker 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.

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

0
48. Revise Sec.  598.507 to read as follows:


Sec.  598.507  Provision of certain legal services.

    (a) The provision of the following legal services to or on behalf 
of a specially designated narcotics trafficker is authorized, provided 
that any receipt of payment of professional fees and reimbursement of 
incurred expenses must be authorized pursuant to Sec. Sec.  598.508 and 
598.509, which authorize certain types of payments for legal services; 
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 when 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;

[[Page 26670]]

    (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 specially 
designated narcotics traffickers, 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 this paragraph. Additionally, U.S. persons 
who provide services authorized by this paragraph 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.  598.405.
    (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.  598.202(a), is prohibited unless licensed 
pursuant to this part.

    Note 1 to Sec.  598.507: 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 
necessary for the payment of professional fees and reimbursement of 
incurred expenses where alternative funding sources are not 
available.


0
49. Add Sec.  598.508 to subpart E to read as follows:


Sec.  598.508  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.  598.507(a) to 
or on behalf of a specially designated narcotics trafficker 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.  598.507(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) This paragraph authorizes the blocked person on whose behalf 
the legal services authorized pursuant to Sec.  598.507(a) are to be 
provided to make payments for authorized legal services using funds 
originating outside the United States that were not previously blocked.
    (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.

0
50. Add Sec.  598.509 to subpart E to read as follows:


Sec.  598.509  Payment of legal fees and expenses at public expense.

    U.S. persons that are attorneys, law firms, or legal services 
organizations are authorized to receive payment of professional fees 
and reimbursement of incurred expenses from public funds for the 
provision of legal services authorized by Sec.  598.507(a).

0
51. Add Sec.  598.510 to subpart E to read as follows:


Sec.  598.510  Certain transactions for maintenance, employment, and 
related banking services for blocked individuals physically located in 
the United States.

    (a) Individuals who are specially designated narcotics traffickers 
who are in U.S. custody or incarcerated in jails, prisons, or similar 
facilities in the United States (``covered individuals''), are 
authorized to engage in the following transactions within the United 
States:
    (1) Purchasing, making payment for, and receiving goods and 
services for their maintenance and the maintenance of their spouse or 
persons who are sharing or who would ordinarily share a common dwelling 
as a family with them, located in the United States, including food, 
clothing, housing, medical care, education, transportation, insurance, 
and utilities;
    (2) Obtaining or continuing employment and engaging in all 
transactions ordinarily incident to such employment, including receipt 
of salary and benefits;
    (3) Establishing accounts with a U.S. financial institution, or a 
commissary-type account with a prison, jail, or other similar facility, 
located in the United States, for use in connection with the 
transactions authorized in paragraph (a)(1) and (a)(2) of this section; 
and
    (4) Receiving and making funds transfers in furtherance of the 
authorized transactions set forth in paragraphs (a)(1) through (3) of 
this section from unblocked funds originating within or outside the 
United States, provided that any funds received may not originate from 
any individual or entity whose property or interests in property are 
blocked pursuant to any part of this chapter or any Executive order or 
statute, other than the covered individual or his or her spouse or 
persons who are sharing or who would ordinarily share a common dwelling 
as a family with the covered individual.
    (b) Any financial institution that has established any account 
pursuant to paragraph (a)(3) of this section, excluding commissary-type 
accounts with prisons, jails, or other similar facilities, must provide 
the name and address of the financial institution, the name of the 
account holder, and the account number to OFAC within 10 business days 
of the establishment of the account.
    (c) This general license does not authorize any funds transfers to 
any location outside the United States.

    Note 1 to paragraph (c): A covered individual has an interest in 
any funds remaining in a commissary-type account with a prison, 
jail, or other similar facility established pursuant to paragraph 
(a)(3) of

[[Page 26671]]

this section after the covered individual is released from custody 
or incarceration.


    Note 2 to paragraph (c): In the case of individuals who are in 
custody or incarcerated, funds transfers must be authorized by and 
consistent with the conditions, protocols, and other requirements 
established by the jail, prison, or other facility.


    Note 3 to Sec.  598.510: The authorization in this section only 
applies to laws and regulations administered by OFAC and should not 
be interpreted to excuse compliance with other applicable laws or 
regulations, including the immigration laws of the United States.


0
52. Add Sec.  598.511 to subpart E to read as follows:


Sec.  598.511  Certain transactions for the expenses of maintaining 
blocked tangible property

    (a) Specially designated narcotics traffickers are authorized to 
engage in the following transactions:
    (1) Making payment for and receiving goods and services for the 
maintenance of tangible property blocked pursuant to Sec.  598.202(a); 
and
    (2) Receiving and making funds transfers in furtherance of the 
authorized transactions set forth in paragraph (a)(1) of this section 
from unblocked funds originating outside the United States, provided 
that any funds received may not originate from any individual or entity 
whose property or interests in property are blocked pursuant to any 
part of this chapter or any Executive order or statute, other than the 
specially designated narcotics trafficker(s) who owns the property.
    (b)(1) Any person making payment for or receiving goods and 
services for the maintenance of tangible property blocked pursuant to 
Sec.  598.202(a) authorized by paragraph (a)(1) of this section must 
file a report on the transactions with OFAC within 30 days of the first 
transaction related to that property. Such reports shall include the 
following numbered sections and information:
    (i) Estimated or actual dollar value of the transaction(s), as 
determined by the value of the payment, goods, or services;
    (ii) A description of the blocked property;
    (iii) The parties involved;
    (iv) The type and scope of transactions conducted; and
    (iv) The dates and duration of the transactions.
    (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.

0
53. Add Sec.  598.512 to subpart E to read as follows:


Sec.  598.512  Emergency medical services.

    The provision and receipt of nonscheduled emergency medical 
services that are prohibited by this part are authorized.

0
54. Revise Sec.  598.803 to read as follows:


Sec.  598.803  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to the Foreign Narcotics Kingpin Designation Act, the 
Presidential Memorandum of May 15, 2015: Delegation of Functions Under 
the Foreign Narcotics Kingpin Designation Act, or the Presidential 
Memorandum of May 31, 2013: Delegation of Functions Under Subsection 
804(h)(2)(A) of the Foreign Narcotics Kingpin Designation Act may be 
taken by the Director of the OFAC or by any other person to whom the 
Secretary of the Treasury has delegated authority so to act.

    Dated: May 12, 2021.
Bradley T. Smith,
Acting Director, Office of Foreign Assets Control.
[FR Doc. 2021-10314 Filed 5-14-21; 8:45 am]
BILLING CODE 4810-AL-P