Updates to the Darfur Sanctions Regulations, 15744-15753 [2024-04500]

Agencies

• DEPARTMENT OF THE TREASURY
• Office of Foreign Assets Control

[Federal Register Volume 89, Number 44 (Tuesday, March 5, 2024)]
[Rules and Regulations]
[Pages 15744-15753]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04500]



[[Page 15744]]

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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 546


Updates to the Darfur 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 changing the heading of the Darfur Sanctions 
Regulations to the Sudan Stabilization Sanctions Regulations and 
amending the renamed regulations to implement a May 4, 2023 Sudan-
related Executive Order. This rule also updates or adds new 
definitions, general licenses, and interpretative guidance, among other 
regulatory provisions.

DATES: This rule is effective March 5, 2024.

FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for 
Licensing, 202-622-2480; Assistant Director for Regulatory Affairs, 
202-622-4855; or Assistant Director for Compliance, 202-622-2490.

SUPPLEMENTARY INFORMATION:

Electronic Availability

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

Background

    On May 28, 2009, OFAC issued the Darfur Sanctions Regulations, 31 
CFR part 546 (74 FR 25432, May 28, 2009) (the ``Regulations'') to 
implement Executive Order (E.O.) 13400 of April 26, 2006, ``Blocking 
Property of Persons in Connection with the Conflict in Sudan's Darfur 
Region'' (71 FR 25483, May 1, 2006). The Regulations were issued 
pursuant to authorities delegated to the Secretary of the Treasury in 
E.O. 13400, which expanded the scope of the national emergency declared 
in E.O. 13067 of November 3, 1997, ``Blocking Sudanese Government 
Property and Prohibiting Transactions with Sudan'' (62 FR 59989, 
November 5, 1997) with respect to the policies and actions of the 
Government of Sudan. Since then, OFAC has amended the Regulations 
several times. OFAC is now amending the Regulations to implement 
provisions of E.O. 14098, ``Imposing Sanctions on Certain Persons 
Destabilizing Sudan and Undermining the Goal of a Democratic 
Transition'' (88 FR 29529, May 5, 2023). In addition, OFAC is amending 
the Regulations to update or add new definitions, general licenses, and 
interpretative guidance, among other regulatory provisions. 
Furthermore, OFAC is renaming the Darfur Sanctions Regulations as the 
Sudan Stabilization Sanctions Regulations to reflect the expanded scope 
of the national emergency, as set forth in E.O. 14098.
    On May 4, 2023, the President, invoking the authority of, inter 
alia, the International Emergency Economic Powers Act (50 U.S.C. 1701 
et seq.) (IEEPA), issued E.O. 14098. In E.O. 14098, the President 
expanded the scope of the national emergency declared in E.O. 13067, 
and expanded by E.O. 13400, finding that the situation in Sudan, 
including the military's seizure of power in October 2021 and the 
outbreak of inter-service fighting in April 2023, constitutes an 
unusual and extraordinary threat to the national security and foreign 
policy of the United States.
    Section 1(a) of E.O. 14098 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 U.S. person of: (i) any foreign person 
determined by the Secretary of the Treasury, in consultation with the 
Secretary of State, to be responsible for, or complicit in, or to have 
directly or indirectly engaged or attempted to engage in, any of the 
following: (A) actions or policies that threaten the peace, security, 
or stability of Sudan; (B) actions or policies that obstruct, 
undermine, delay, or impede, or pose a significant risk of obstructing, 
undermining, delaying, or impeding, the formation or operation of a 
civilian transitional government, Sudan's transition to democracy, or a 
future democratically elected government; (C) actions or policies that 
have the purpose or effect of undermining democratic processes or 
institutions in Sudan; (D) censorship or other actions or policies that 
prohibit, limit, or penalize the exercise of freedoms of expression, 
association, or peaceful assembly by individuals in Sudan, or that 
limit access to free and independent news or information in or with 
respect to Sudan; (E) corruption, including bribery, misappropriation 
of state assets, and interference with public processes such as 
government oversight of parastatal budgets and revenues for personal 
benefit; (F) serious human rights abuse, including serious human rights 
abuse related to political repression, in or with respect to Sudan; (G) 
the targeting of women, children, or any other civilians through the 
commission of acts of violence (including killing, maiming, torture, or 
rape or other sexual violence), abduction, forced displacement, or 
attacks on schools, hospitals, religious sites, or locations where 
civilians are seeking refuge, or through conduct that would constitute 
a serious abuse or violation of human rights or a violation of 
international humanitarian law; (H) the obstruction of the activities 
of United Nations missions--including peacekeeping missions, as well as 
diplomatic or humanitarian missions--in Sudan, or of the delivery of, 
distribution of, or access to humanitarian assistance; or (I) attacks 
against United Nations missions, including peacekeeping operations; 
(ii) any foreign person determined by the Secretary of the Treasury, in 
consultation with the Secretary of State, to be or have been a leader, 
official, senior executive officer, or member of the board of directors 
of any entity: (A) that has, or whose members have, engaged in any 
activity described in subsection (a)(i) of E.O. 14098 relating to the 
tenure of such leader, official, senior executive officer, or member of 
the board of directors; or (B) whose property and interests in property 
are blocked pursuant to E.O. 14098 relating to the tenure of such 
leader, official, senior executive officer, or member of the board of 
directors; (iii) any foreign person determined by the Secretary of the 
Treasury, in consultation with the Secretary of State, to be a spouse 
or adult child of any person whose property and interests in property 
are blocked pursuant to E.O. 14098; (iv) any foreign person determined 
by the Secretary of the Treasury, in consultation with the Secretary of 
State, to have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services to or in 
support of, any activity described in section 1(a)(i) of E.O. 14098 or 
any person whose property and interests in property are blocked 
pursuant to E.O. 14098; or (v) any foreign person determined by the 
Secretary of the Treasury, in consultation with the Secretary of State, 
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. 14098. The blocked 
property and interests in property of the persons described above may 
not be transferred, paid, exported, withdrawn, or otherwise dealt in.
    Section 1(b) of E.O. 14098 provides that the prohibitions in 
section 1(a) of E.O. 14098 apply except to the extent

[[Page 15745]]

provided by statutes, or in regulations, orders, directives, or 
licenses that may be issued pursuant to E.O. 14098, and notwithstanding 
any contract entered into or any license or permit granted before the 
date of E.O. 14098.
    Section 3 of E.O. 14098 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 the benefit of any person whose property and 
interests in property are blocked pursuant to E.O. 14098, and the 
receipt of any contribution or provision of funds, goods, or services 
from any such person.
    In Section 4 of E.O. 14098, the President determined that the 
making of donations of the types of articles 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. 14098 would seriously impair the President's ability 
to deal with the national emergency declared in E.O. 13067, as 
expanded. The President therefore prohibited the donation of such items 
except to the extent provided by statutes, or in regulations, rulings, 
instructions, orders, directives, or licenses that may be issued 
pursuant to E.O. 14098.
    Section 5 of E.O. 14098 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 E.O. 14098, 
as well as any conspiracy formed to violate such prohibitions.
    Section 9 of E.O. 14098 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 as may be necessary to carry 
out the purposes of E.O. 14098. Section 9 of E.O. 14098 also provides 
that the Secretary of the Treasury may, consistent with applicable law, 
redelegate any of these functions within the Department of the 
Treasury.

Current Regulatory Action

    In furtherance of the purposes of E.O. 14098, OFAC is changing the 
heading of the Darfur Sanctions Regulations, 31 CFR part 546, to the 
Sudan Stabilization Sanctions Regulations and amending the renamed 
Regulations to implement E.O. 14098, among other changes. In 
particular, in subpart B of the Regulations, OFAC is revising Sec.  
546.201 to incorporate the new designation criteria provided in E.O. 
14098, as well as adding Sec.  546.201(e) to implement any future 
Executive orders issued pursuant to E.O. 13067. Accordingly, throughout 
the Regulations, OFAC is amending all references to Sec.  546.201(a) to 
references to Sec.  546.201. In addition, OFAC is adding Sec.  546.206 
to detail transactions that are exempt from the prohibitions of the 
Regulations pursuant to section 203(b) of IEEPA (50 U.S.C. 1702(b)).
    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. 
Specifically, OFAC is clarifying that the term OFAC means the Office of 
Foreign Assets Control, providing a definition for foreign person at 
Sec.  546.306, and adding definitional guidance at Sec.  546.300 
clarifying that the terms defined in subpart C apply throughout the 
Regulations. Furthermore, OFAC is updating multiple definitions, 
including its definition of the term effective date at Sec.  546.303.
    In subpart D, which contains interpretive sections regarding the 
Regulations, OFAC is amending several interpretive provisions to align 
with the aforementioned changes to subpart B, as well as updating 
several provisions for clarity. OFAC has also added an interpretive 
provision at Sec.  546.412 to clarify that the property and interests 
in property of an entity, including any political subdivision, agency, 
or instrumentality of a governmental entity, are not blocked solely 
because one or more persons whose property and interests in property 
are blocked pursuant to Sec.  546.201 is a member, leader, official, 
senior executive officer, or otherwise exercises control.
    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. OFAC is updating Sec.  546.502 to conform with current 
statements of licensing policy and revising Sec.  546.511, which 
authorizes certain transactions for the official business of certain 
international organizations and entities, and Sec.  546.513, which 
authorizes certain transactions related to the provision of 
agricultural commodities, medicine, medical devices, replacement parts 
and components, or software updates, and the extraction, processing, 
transport, sale, or distribution of water in Sudan. OFAC has also added 
Sec.  546.508, which authorizes certain payments for legal services 
from funds originating outside the United States. In addition, the 
interpretive provisions that were in the prior set of regulations have 
been renumbered.
    In subpart G of the Regulations, OFAC is revising several sections 
to describe 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. OFAC is adding Sec.  546.705 describing the procedures 
governing the potential issuance of a Finding of Violation. Finally, in 
subpart H of the Regulations, OFAC is updating a section heading at 
Sec.  546.802 to reflect the delegation of certain authorities of the 
Secretary of the Treasury.
    Throughout the Regulations, OFAC is changing references to ``the 
Office of Foreign Assets Control'' and ``the Director of the Office of 
Foreign Assets Control'' to ``OFAC'' for purposes of clarity and 
simplicity.

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), as amended, 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 546

    Administrative practice and procedure, Banks, banking, Blocking of 
assets, Credit, Foreign trade, Penalties, Reporting and recordkeeping 
requirements, Sanctions, Securities, Services, Sudan.

    For the reasons set forth in the preamble, OFAC amends 31 CFR part 
546 as follows:

[[Page 15746]]

PART 546--SUDAN STABILIZATION SANCTIONS REGULATIONS

0
1. Revise the heading of part 546 to read as set forth above.

0
2. The authority citation for part 546 is revised to read as follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; 22 U.S.C. 287c; Pub. L. 101-410, 104 Stat. 890, as 
amended (28 U.S.C. 2461 note); E.O. 13067, 62 FR 59989, 3 CFR, 1997 
Comp., p. 230; E.O. 13400, 71 FR 25483, 3 CFR, 2006 Comp., p. 220; 
E.O. 14098, 88 FR 29529.

Subpart B--Prohibitions

0
3. Revise Sec.  546.201 to read as follows:


Sec.  546.201  Prohibited transactions involving blocked property.

    (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) E.O. 13400 Annex. The persons listed in the Annex to Executive 
Order 13400 of April 26, 2006.
    (2) E.O. 13400. Any person determined by the Secretary of the 
Treasury, after consultation with the Secretary of State:
    (i) To have constituted a threat to the peace process in Darfur;
    (ii) To have constituted a threat to stability in Darfur and the 
region;
    (iii) To be responsible for conduct related to the conflict in 
Darfur that violates international law;
    (iv) To be responsible for heinous conduct with respect to human 
life or limb related to the conflict in Darfur;
    (v) To have directly or indirectly supplied, sold, or transferred 
arms or any related materiel, or any assistance, advice, or training 
related to military activities to:
    (A) The Government of Sudan;
    (B) The Sudan Liberation Movement/Army;
    (C) The Justice and Equality Movement;
    (D) The Janjaweed; or
    (E) Any person (other than a person listed in paragraph 
(a)(2)(v)(A) through (D) of this section) operating in the states of 
North Darfur, South Darfur, or West Darfur that is a belligerent, a 
nongovernmental entity, or an individual;
    (vi) To be responsible for offensive military overflights in and 
over the Darfur region;
    (vii) To have materially assisted, sponsored, or provided 
financial, material, or technological support for, or goods or services 
in support of, the activities described in paragraphs (a)(2)(i) through 
(vi) of this section or any person whose property and interests in 
property are blocked pursuant to paragraphs (a)(1) through (2) of this 
section; or
    (viii) To be owned or controlled by, or acting or purporting to act 
for or on behalf of, directly or indirectly, any person whose property 
and interests in property are blocked pursuant to paragraphs (a)(1) 
through (2) of this section.
    (3) E.O. 14098. Any foreign person determined by the Secretary of 
the Treasury, in consultation with the Secretary of State:
    (i) To be responsible for, or complicit in, or to have directly or 
indirectly engaged or attempted to engage in, any of the following:
    (A) Actions or policies that threaten the peace, security, or 
stability of Sudan;
    (B) Actions or policies that obstruct, undermine, delay, or impede, 
or pose a significant risk of obstructing, undermining, delaying, or 
impeding, the formation or operation of a civilian transitional 
government, Sudan's transition to democracy, or a future democratically 
elected government;
    (C) Actions or policies that have the purpose or effect of 
undermining democratic processes or institutions in Sudan;
    (D) Censorship or other actions or policies that prohibit, limit, 
or penalize the exercise of freedoms of expression, association, or 
peaceful assembly by individuals in Sudan, or that limit access to free 
and independent news or information in or with respect to Sudan;
    (E) Corruption, including bribery, misappropriation of state 
assets, and interference with public processes such as government 
oversight of parastatal budgets and revenues for personal benefit;
    (F) Serious human rights abuse, including serious human rights 
abuse related to political repression, in or with respect to Sudan;
    (G) The targeting of women, children, or any other civilians 
through the commission of acts of violence (including killing, maiming, 
torture, or rape or other sexual violence), abduction, forced 
displacement, or attacks on schools, hospitals, religious sites, or 
locations where civilians are seeking refuge, or through conduct that 
would constitute a serious abuse or violation of human rights or a 
violation of international humanitarian law;
    (H) The obstruction of the activities of United Nations missions--
including peacekeeping missions, as well as diplomatic or humanitarian 
missions--in Sudan, or of the delivery of, distribution of, or access 
to humanitarian assistance; or
    (I) Attacks against United Nations missions, including peacekeeping 
operations;
    (ii) To be or have been a leader, official, senior executive 
officer, or member of the board of directors of any entity:
    (A) That has, or whose members have, engaged in any activity 
described in paragraph (a)(3)(i) of this section relating to the tenure 
of such leader, official, senior executive officer, or member of the 
board of directors; or
    (B) Whose property and interests in property are blocked pursuant 
to this order relating to the tenure of such leader, official, senior 
executive officer, or member of the board of directors;
    (iii) To be a spouse or adult child of any person whose property 
and interests in property are blocked pursuant to paragraph (a)(3) of 
this section;
    (iv) To have materially assisted, sponsored, or provided financial, 
material, or technological support for, or goods or services to or in 
support of, any activity described in paragraph (a)(3)(i) of this 
section or any person whose property and interests in property are 
blocked pursuant to paragraph (a)(3) of this section; or
    (v) 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 paragraph 
(a)(3) of this section.
    (b) The prohibitions in this section include, but are not limited 
to, prohibitions on the following transactions when engaged in by a 
United States person or within the United States:
    (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 otherwise authorized by this part or by a specific 
license expressly referring to this section, any dealing in any 
security (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, any person whose 
property and interests in property are blocked pursuant to this section 
is prohibited.

[[Page 15747]]

This prohibition includes but is not limited to 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 such security 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 security may have 
or might appear to have assigned, transferred, or otherwise disposed of 
the security.
    (d) The prohibitions in paragraph (a) of this section apply except 
to the extent provided by statutes, or in regulations, rulings, 
instructions, 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 Executive order 
issued after May 4, 2023 pursuant to the national emergency declared in 
E.O. 13067 of November 3, 1997 and expanded by E.O. 13400 of April 26, 
2006 and E.O. 14098 of May 4, 2023 are prohibited pursuant to this 
part.

    Note 1 to Sec.  546.201. The names of persons listed in, or 
designated or identified as blocked pursuant to E.O. 13067, or any 
further Executive orders issued pursuant to the national emergency 
declared therein, 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 E.O. 13400: ``[DARFUR]''; for E.O. 14098: ``[SUDAN-EO14098]''; 
and for any further Executive orders issued pursuant to the national 
emergency declared in E.O. 13067 using the identifier formulation 
``[SUDAN-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.  546.411 
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.  546.201. Section 203 of the International 
Emergency Economic Powers Act (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 E.O. 13400: ``[BPI-DARFUR]''; for E.O. 14098, ``[BPI-SUDAN-
EO14098]''; and for any further Executive orders issued pursuant to 
the national emergency declared in E.O. 13067: using the identifier 
formulation ``[BPI-SUDAN-[E.O. number pursuant to which the person's 
property and interests in property are blocked pending 
investigation]].''


    Note 3 to Sec.  546.201. 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.


0
4. Amend Sec.  546.202 by:
0
a. Revising and republishing paragraph (a);
0
b. In paragraph (b), removing ``Sec.  546.201(a)'' and adding in its 
place ``Sec.  546.201''.
0
c. Revising paragraph (c).
0
d. In paragraph (d)(3)(i), removing ``license, or other directive'' and 
adding in its place ``order, directive, license,''.
0
e. Redesignating paragraph (e) as paragraph (f).
0
f. Redesignating Note to paragraph (d) of Sec.  546.202 as paragraph 
(e).
0
g. In newly redesignated paragraph (e), removing ``(d)(1) and (d)(2)'' 
and adding in its place ``(d)(1) and (2)''.
0
h. Revising newly redesignated paragraph (f);
0
i. Removing ``the Director of the Office of Foreign Assets Control'' 
wherever it appears and adding in its place ``OFAC''.
    The revisions read as follows:


Sec.  546.202  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, ruling, instruction, 
order, directive, or license issued pursuant to this part, and that 
involves any property or interest in property blocked pursuant to Sec.  
546.201, 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.
* * * * *
    (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, ruling, instruction, order, directive, or license issued 
pursuant to this part.
* * * * *
    (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.  546.201.

0
5. Revise Sec.  546.205 to read as follows:


Sec.  546.205  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.

0
6. Add Sec.  546.206 to read as follows:


Sec.  546.206  Exempt transactions.

    (a) United Nations Participation Act. The exemptions described in 
this section do 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) (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) International Emergency Economic Powers Act. The 
prohibitions contained in this part do not apply to any transactions 
that are exempt pursuant to section 203(b) of the International 
Emergency Economic Powers Act (50 U.S.C. 1702(b)).
    (c) Official business. The prohibitions contained in Sec.  
546.201(a)(3) do not apply to transactions for the conduct of the 
official business of the United States Government or the United 
Nations (and its Specialized Agencies, Programmes, Funds, and 
Related Organizations) by employees, grantees, or contractors 
thereof.


    Note 2 to Sec.  546.206.  See Sec.  546.510 for a general 
license authorizing transactions for the conduct of the official 
business of the United States Government not otherwise exempt.


    Note 3 to Sec.  546.206.  See Sec.  546.511 for a general 
license authorizing transactions for the conduct of the official 
business of certain international organizations and entities not 
otherwise exempt.


[[Page 15748]]



Subpart C--General Definitions


Sec. Sec.  546.305  through 546.313 [Redesignated]

0
7. Redesignate Sec. Sec.  546.305 through 546.313 as follows:

------------------------------------------------------------------------
            Old section                          New section
------------------------------------------------------------------------
                 546.305                              546.308
                 546.306                              546.309
                 546.307                              546.311
                 546.308                              546.312
                 546.309                              546.313
                 546.310                              546.314
                 546.311                              546.315
                 546.312                              546.316
                 546.313                              546.305
------------------------------------------------------------------------


0
8. Add Sec.  546.300 to read as follows:


Sec.  546.300  Applicability of definitions.

    The definitions in this subpart apply throughout the entire part.

0
9. Revise and republish Sec.  546.302 to read as follows:


Sec.  546.302  Blocked account; blocked property.

    The terms blocked account and blocked property mean any account or 
property subject to the prohibitions in Sec.  546.201 held in the name 
of a person whose property and interests in property are blocked 
pursuant to Sec.  546.201, 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.  546.302:  See Sec.  546.411 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.  546.201.


0
10. Revise Sec.  546.303 to read as follows:


Sec.  546.303  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 whose property and interests in 
property are blocked pursuant to Sec.  546.201(a)(1), 12:01 a.m. 
eastern daylight time, April 27, 2006;
    (2) With respect to a person whose property and interests in 
property are otherwise blocked pursuant to Sec.  546.201, the earlier 
of the date of actual or constructive notice that such person's 
property and interests in property are blocked.
    (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.  546.305  [Amended]

0
11. Amend newly designated Sec.  546.305 as follows:
0
a. Remove ``, as used in Sec.  546.201(a)(2)(vii) of this part,''.
0
b. Remove '' but not limited to''.

0
12. Add Sec.  546.306 to read as follows:


Sec.  546.306  Foreign person.

    The term foreign person means any person that is not a U.S. person.


Sec.  546.307  [Reserved]

0
13. Add and reserve Sec.  546.307.


Sec.  546.309  [Amended]

0
14. Revise newly designated Sec.  546.309 as follows:
    (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: https://ofac.treasury.gov/.
    (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: https://ofac.treasury.gov.

0
15. Add Sec.  546.310 to read as follows:


Sec.  546.310  OFAC.

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


Sec.  546.312  [Amended]

0
16. In newly designated Sec.  546.312, remove ``, but are not limited 
to,''.


Sec.  546.313  [Amended]

0
17. Amend newly designated Sec.  546.313 by removing `` and, without 
limitation upon the foregoing'' and adding, in its place, ``. Without 
limitation on the foregoing, it''.

0
18. Revise newly redesignated Sec.  546.315 to read as follows:


Sec.  546.315  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 credits, purchasing or selling foreign exchange, 
securities, futures or options, or procuring purchasers and sellers 
thereof, as principal or agent. It includes depository institutions, 
banks, savings banks, money services businesses, operators of credit 
card systems, trust companies, insurance 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, 
dealers in precious metals, stones, or jewels, 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 United States, 
but not such institutions' foreign branches, offices, or agencies.

Subpart D--Interpretations

0
19. Revise Sec.  546.401 to read as follows:


Sec.  546.401  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 regulation, ruling, instruction, order, 
directive, or license issued pursuant to this part is a reference to 
the same as currently amended unless otherwise specified.

0
20. Revise Sec.  546.402 to read as follows:


Sec.  546.402  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 regulation, ruling, instruction, order, 
directive, 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 regulation, ruling, 
instruction, order, directive, or license continue and may be enforced 
as if such amendment, modification, or revocation had not been made.


Sec.  546.403  [Amended]

0
21. Amend Sec.  546.403 as follows:
0
a. In paragraph (a),
0
i. Add `` whose property and interests in property are blocked pursuant 
to Sec.  546.201'' after ``away from a person''; and

[[Page 15749]]

0
ii. Remove ``or any other part of this chapter''; and
0
b. Remove ``Sec.  546.201(a)'' wherever it appears and add in its place 
``Sec.  546.201''.

0
22. Revise Sec.  546.404 to read as follows:


Sec.  546.404  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.  546.201; 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.  546.201, 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.  546.201.


Sec.  546.405  [Amended]

0
23. Amend Sec.  546.405 as follows:
0
a. In both places where it occurs, remove ``Sec.  546.201(a)'' and add 
in its place ``Sec.  546.201''.
0
b. In Note to Sec.  546.405, remove ``Sec. Sec.  546.507 and 546.508'' 
and add in its place ``Sec. Sec.  546.507 and 546.509''.


Sec.  546.410  [Amended]

0
24. Amend Sec.  546.410 by removing ``bank'' and adding in its place 
``financial institution''.

0
25. Add Sec.  546.412 to read as follows:


Sec.  546.412  Entities of which one or more blocked persons is a 
member, leader, official, senior executive officer, or otherwise 
exercises control.

    (a) The property and interests in property of an entity, including 
any political subdivision, agency, or instrumentality of a governmental 
entity, are not blocked solely because one or more persons whose 
property and interests in property are blocked pursuant to Sec.  
546.201 is a member, leader, official, senior executive officer, or 
otherwise exercises control.

    Note 1 to paragraph (a). See Sec.  546.411 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.  546.201.
    (b) For example, U.S. persons may not, except as authorized or 
exempt pursuant to this part, engage in the following transactions 
with a person whose property and interests in property are blocked 
pursuant to Sec.  546.201: enter into contracts that are signed by a 
blocked person, enter into negotiations with a blocked person, or 
process transactions, directly or indirectly, on behalf of a person 
whose property and interests in property are blocked pursuant to 
Sec.  546.201. However, U.S. persons are not prohibited from 
engaging in a routine interaction with an agency in which a blocked 
person is an official, but which does not involve the blocked person 
directly or indirectly.


    Note 2 to Sec.  546.412. OFAC encourages U.S. persons to be 
cautious in engaging in transactions with any entity of which a 
person whose property and interests in property are blocked pursuant 
to Sec.  546.201 is a member, leader, official, senior executive 
officer, or otherwise exercises control to ensure that U.S. persons 
are not engaged in transactions, directly or indirectly, with a 
blocked person, except as authorized or exempt pursuant to this 
part.

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

0
26. Redesignate Sec. Sec.  546.508 through 546.512 as follows:

------------------------------------------------------------------------
            Old section                          New section
------------------------------------------------------------------------
                 546.508                              546.509
                 546.509                              546.510
                 546.510                              546.511
                 546.511                              546.512
                 546.512                              546.513
------------------------------------------------------------------------


0
27. Revise and republish Sec.  546.501 to read as follows:


Sec.  546.501  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 Sudan Stabilization Sanctions Regulations 
sanctions page on OFAC's website: https://ofac.treasury.gov.

0
28. Revise Sec.  546.502 to read as follows:


Sec.  546.502  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, order, directive, or 
license authorizes any transaction prohibited under this part unless 
the regulation, ruling, instruction, order, directive, or license is 
issued by OFAC and specifically refers to this part. No regulation, 
ruling, instruction, order, directive, 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, 
order, directive, or license specifically refers to such part.
    (c) Any regulation, ruling, instruction, order, directive, 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, order, directive, 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

[[Page 15750]]

relevant OFAC general or specific license authorizing the payment to 
avoid the blocking or rejection of the transfer.

0
29. Revise Sec.  546.507 to read as follows:


Sec.  546.507  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.  546.201 is authorized, provided that any receipt of 
payment of professional fees and reimbursement of incurred expenses 
must be authorized pursuant to Sec.  546.508, which authorizes certain 
payments for legal services from funds 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.  546.201, 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.  546.404.
    (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.  546.201 is prohibited unless licensed 
pursuant to this part.

    Note 1 to Sec.  546.507. 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.


0
30. Add Sec.  546.508 to read as follows:


Sec.  546.508  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.  546.507(a) to 
or on behalf of any person whose property and interests in property are 
blocked pursuant to Sec.  546.201, 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.  546.507(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 this paragraph (a) authorizes payments for legal 
services using funds in which any other person whose property and 
interests in property are blocked pursuant to Sec.  546.201, any other 
part of this chapter, or any Executive order or statute has an 
interest.
    (b) Records. Consistent with Sec.  501.601 of this chapter, U.S. 
persons who receive payments pursuant to paragraph (a) of this section 
must retain for five years from the date of the relevant payment a 
record that specifies the following for each payment:
    (1) The individual or entity from whom the funds originated and the 
amount of funds received; and
    (2) If applicable:
    (i) 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;
    (ii) A general description of the services provided; and
    (iii) The amount of funds paid in connection with such services.
    (3) These records must be furnished to OFAC on demand consistent 
with Sec.  501.602 of this chapter.

0
31. Revise newly redesignated Sec.  546.509 to read as follows:


Sec.  546.509  Emergency medical services.

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

0
32. Amend newly redesignated Sec.  546.511 by:
0
a. In paragraph (a)(5), removing ``and'';
0
b. In paragraph (a)(6), removing ``.'' and adding in its place ``; 
and''; and
0
c. Adding paragraph (a)(7).
    The addition reads as follows:


Sec.  546.511  Official business of certain international organizations 
and entities.

* * * * *
    (a) * * *
    (7) The African Union, including the African Union Commission and 
other subsidiary bodies and organs.
* * * * *

0
33. Revise newly redesignated Sec.  546.513 to read as follows:


Sec.  546.513  Transactions related to the provision of agricultural 
commodities, medicine, medical devices, replacement parts and 
components, or software updates, and the extraction, processing, 
transport, sale, or distribution of water in Sudan.

    (a) All transactions prohibited by this part that are related to 
the provision of agricultural commodities, medicine, medical devices, 
replacement parts and components for medical devices, or software 
updates for medical devices to Sudan or to persons in third countries 
purchasing specifically for resale to Sudan, or to an individual whose 
property and interests in property are blocked pursuant to this part in 
quantities consistent with personal, non-commercial use, are 
authorized.
    (b) All transactions prohibited by this part that are related to 
the extraction, processing, transport, sale, or distribution of water, 
including the

[[Page 15751]]

maintenance or repair of water pipelines, are authorized.
    (c) For the purposes of this general license, agricultural 
commodities, medicine, and medical devices are defined as follows:
    (1) Agricultural commodities. Agricultural commodities are 
products:
    (i) That fall within the term ``agricultural commodity'' as defined 
in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602); 
and
    (ii) That are intended for ultimate use in Sudan as:
    (A) Food for humans (including raw, processed, and packaged foods; 
live animals; vitamins and minerals; food additives or supplements; and 
bottled drinking water) or animals (including animal feeds);
    (B) Seeds for food crops;
    (C) Fertilizers or organic fertilizers; or
    (D) Reproductive materials (such as live animals, fertilized eggs, 
embryos, and semen) for the production of food animals.
    (2) Medicine. Medicine is an item that falls within the definition 
of the term ``drug'' in section 201 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 321).
    (3) Medical devices. A medical device is an item that falls within 
the definition of ``device'' in section 201 of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 321).

    Note 1 to Sec.  546.513. This general license does not relieve 
any person authorized thereunder from complying with any other 
applicable laws or regulations.

Subpart G--Penalties and Findings of Violation

0
34. Revise the heading of subpart G to read as set forth above.

0
35. Revise Sec.  546.701 to read as follows:


Sec.  546.701  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 regulation, ruling, instruction, order, directive, or license 
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 may be imposed on any person who violates, attempts to 
violate, conspires to violate, or causes a violation of any regulation, 
ruling, instruction, order, directive, license, or prohibition issued 
under IEEPA.
    (2) IEEPA provides for a maximum civil penalty not to exceed the 
greater of $368,136 or 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 regulation, ruling, instruction, order, directive, 
license, 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(b) 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 Section 5(a) of 
the UNPA shall, upon conviction, be fined not more than $1,000,000 and, 
if a natural person, be imprisoned for not more than 20 years, or both.
    (e) Violations involving transactions described at section 
203(b)(1), (3), and (4) 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.

0
36. Revise Sec.  546.702 to read as follows:


Sec.  546.702  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 regulation, ruling, instruction, order, 
directive, or license 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 et seq.) 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 (electronic 
signature is acceptable), 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. The response 
must be sent to OFAC's Enforcement Division by mail or courier or email 
and must be postmarked or

[[Page 15752]]

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.

0
37. Add Sec.  546.705 to read as follows:


Sec.  546.705  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 regulation, 
ruling, instruction, order, directive, or license 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 et seq);
    (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 (electronic signature is acceptable), 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. The response must be sent to OFAC's 
Enforcement Division 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. [Amended]

0
38. Revise and republish Sec.  546.802 to read as follows:


Sec.  546.802  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 13400, Executive Order 14098, and any 
further Executive orders relating to the national emergency declared in 
Executive Order 13067, 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.


Sec.  Sec.  546.503, 546.704.  [Amended]

0
39. In addition to the amendments set forth above, in 31 CFR part 546, 
remove the words ``the Director of the Office of Foreign Assets 
Control'' and add, in their place, the words ``OFAC'' in the following 
places:
0
a. Section 546.503; and
0
b. Section 546.704.


Sec. Sec.  546.203, 546.204, 546.408, 546.703.  [Amended]

0
40. In addition to the amendments set forth above, in 31 CFR part 546, 
remove the words ``the Office of Foreign Assets Control'' and add, in 
their place, the words ``OFAC'' in the following places:
0
a. Section 546.203(a) and (c);

[[Page 15753]]

0
b. Section 546.204(b);
0
c. Section 546.408; and
0
d. Section 546.703.


Sec. Sec.  546.203, 546.204, 546.406, 546.408, 546.409, 546.504, and 
546.506.  [Amended]

0
41. In addition to the amendments set forth above, in 31 CFR part 546, 
remove the words ``546.201(a)'' and add, in their place, the words 
``546.201'' in the following places:
0
a. Section 546.203(a), (c), (d), and (f);
0
b. Section 546.204(a) and (b);
0
c. Section 546.406;
0
d. Section 546.408;
0
e. Section 546.409;
0
f. Section 546.504; and
0
g. Section 546.506.

Bradley T. Smith,
Director, Office of Foreign Assets Control.
[FR Doc. 2024-04500 Filed 3-1-24; 8:45 am]
BILLING CODE 4810-AL-P