Reporting, Procedures and Penalties Regulations, 40372-40378 [2024-10033]

Agencies

• DEPARTMENT OF THE TREASURY
• Office of Foreign Assets Control

[Federal Register Volume 89, Number 92 (Friday, May 10, 2024)]
[Rules and Regulations]
[Pages 40372-40378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10033]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 501


Reporting, Procedures and Penalties Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Interim final rule; request for comments.

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SUMMARY: The Department of the Treasury's Office of Foreign Assets 
Control (OFAC) is issuing this interim final rule to amend the 
Reporting, Procedures and Penalties Regulations (the ``Regulations''), 
to require electronic filing of certain submissions to OFAC and to 
describe and modify certain reporting requirements related to blocked 
property and rejected transactions. In particular, the rule would 
require use of the electronic OFAC Reporting System for submission of 
reports related to blocked property and rejected transactions, remove 
the mail option for certain other types of OFAC submissions, describe 
reports OFAC may require from financial institutions for transactions 
that meet specified criteria, and add a reporting requirement for any 
blocked property that is unblocked or transferred. Additionally, OFAC 
is clarifying the scope of the reporting requirement for rejected 
transactions, in part to respond to comments received on the interim 
final rule OFAC published on June 21, 2019 to amend the Regulations. 
Further, OFAC is modifying the procedures for requests relating to 
property that is blocked in error and updating the Regulations with 
respect to the availability of information under the Freedom of 
Information Act (FOIA) for certain categories of records. OFAC is also 
clarifying that persons may submit a petition for administrative 
reconsideration to seek removal of a person or property from the List 
of Specially Designated Nationals and Blocked Persons or any other list 
of sanctioned persons maintained by OFAC. OFAC is also adding a 
description of reports OFAC may require financial institutions to 
provide about transactions that meet specified criteria to aid in the 
identification of blocked property. Finally, OFAC is making several 
technical and conforming edits. OFAC is soliciting public comments for 
30 days on this interim final rule.

DATES: This interim final rule is effective August 8, 2024. Written 
comments may be submitted on or before June 10, 2024.

ADDRESSES: You may submit comments via the following methods, 
electronic is preferred:
    Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions on the website for submitting comments. Refer to Docket 
Number OFAC-2024-0002.
    Mail: Office of Foreign Assets Control, U.S. Department of the 
Treasury, Treasury Annex/Freedman's Bank Building, 1500 Pennsylvania 
Avenue NW, Washington, DC 20220. Refer to Docket Number OFAC-2024-0002.
    Instructions: All submissions received must include the agency name 
and the Federal Register Doc. number that appears at the end of this 
document. All comments, including attachments and other supporting 
materials, will become part of the public record and subject to public 
disclosure. Sensitive personal information, such as account numbers or 
Social Security numbers, should not be included. Comments generally 
will not be edited to remove any identifying or contact information.

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

SUPPLEMENTARY INFORMATION:

Background

    The Regulations (31 CFR part 501), originally issued August 25, 
1997 (62 FR 45098), set forth standard reporting and recordkeeping 
requirements, license application procedures, and other procedures 
relevant to the economic sanctions programs administered by OFAC. As 
described further below, OFAC is providing updates within nine sections 
of the Regulations: Sec. Sec.  501.602, 501.603, 501.604, 501.605, 
501.801, 501.804, 501.805, 501.806, and 501.807.

[[Page 40373]]

Electronic Filing of Submissions

    OFAC Reporting System for reports of blocked property and rejected 
transactions. This interim final rule would generally require filers to 
use the electronic OFAC Reporting System (ORS) for submission to OFAC 
of initial reports of blocked property and Annual Reports of Blocked 
Property pursuant to Sec.  501.603(d) and reports of rejected 
transactions pursuant to Sec.  501.604(d), beginning on August 8, 2024. 
Electronic submission of reports improves efficiencies in reporting and 
reviewing data, and thus reduces the overall burden on both filers and 
the U.S. government over the long term. Many filers currently use ORS, 
on a voluntary basis, to submit initial reports of blocked property, 
Annual Reports of Blocked Property, and reports of rejected 
transactions. OFAC encourages filers to become familiar with ORS and to 
submit reports using that system in advance of the August 8, 2024 
deadline. If a submitter can provide evidence of unique and 
extraordinary circumstances that would not permit the electronic filing 
of reports, such as lack of access to the internet, the submitter may 
request to submit reports in an alternative manner by calling 202-622-
2490. Such requests will be subject to a presumption of denial and 
granted only in writing.
    Email Submission of Other Reports. OFAC is amending several 
sections of the Regulations to require electronic submissions and to 
remove options for mail submission. OFAC is amending Sec.  
501.603(d)(2) to require electronic submission of reports of unblocked 
or transferred blocked property, as required pursuant to revised Sec.  
501.603(b)(3)(i). OFAC will accept such reports of unblocked or 
transferred blocked property pursuant to revised Sec.  501.603(b)(3)(i) 
via either email or ORS. OFAC is also amending Sec.  501.605(a) of the 
Regulations to require submission of the documentation and 
notifications required therein by email, given the time sensitivity of 
these reports, and to remove the options for submission by facsimile or 
mail. Finally, OFAC is requiring email submission or removing the 
options for mail submission in the following sections of the 
Regulations: Sec. Sec.  501.804, 501.805, 501.806, and 501.807. 
Electronic submission and use of OFAC's website will allow for more 
efficient receipt and processing of reports and requests from the 
public.

Reports of Unblocked or Transferred Blocked Property

    OFAC is revising Sec.  501.603(b)(3)(i) to require reports within 
10 business days of when blocked property is unblocked or transferred, 
including pursuant to a valid order issued by a U.S. government agency 
or U.S. court, as set out in that paragraph. This amendment will enable 
OFAC to ascertain the current status of blocked and unblocked property. 
Reports need not be submitted for credits of interest payments that 
would not be transfers of blocked property or debits to blocked 
accounts for normal service charges, in each case as authorized 
pursuant to OFAC sanctions. As noted above, filers must submit reports 
pursuant to this section electronically, either via email to 
[email protected] or via ORS. Additionally, in revised Sec.  
501.603(d)(1), OFAC is expanding the retention requirement previously 
in Sec.  501.603(b)(2)(iii) for Annual Reports of Blocked Property to 
extend to initial reports of blocked property.

Reports of Rejected Transactions

    OFAC is revising elements of Sec.  501.604 in response to public 
comments received on the June 21, 2019, interim final rule (84 FR 
29055), which expanded the scope of the reporting requirement for 
rejected transactions.
    Clarifying the definition of ``transaction.'' Several commenters 
requested clarity on the scope and types of rejected transactions that 
need to be reported to OFAC by non-financial institutions. In response 
to these comments, OFAC is amending Sec.  501.604(a) to clarify the 
scope of the term ``transaction'' for purposes of that section by 
specifying that the term includes transactions related to securities, 
checks, or foreign exchange, as well as sales or purchases of goods or 
services, thereby clarifying that securities, checks, foreign exchange, 
and goods and services are not in and of themselves transactions, when 
not provided as part of a transaction.
    Confirmation of the scope of the term ``U.S. persons.'' OFAC 
received several comments that requested clarity about whether the term 
``U.S. persons,'' as used in Sec.  501.604, includes U.S. persons other 
than U.S. financial institutions. OFAC confirms that this reporting 
requirement applies to all U.S. persons, as identified in the relevant 
parts of this chapter (or in the case of part 515, persons subject to 
U.S. jurisdiction), not only U.S. financial institutions.
    Clarifying information that must be reported for rejected 
transactions. Comments received by OFAC also noted that not all 
information required by OFAC may be readily available at the time a 
transaction is rejected, and, in many cases, it would be burdensome and 
sometimes impractical for filers to seek out additional information 
about transactions that they have already rejected. In light of these 
concerns, OFAC is amending Sec.  501.604(b) to clarify that the 
information required therein must be reported only to the extent the 
information is available to the filer at the time the transactions was 
rejected.
    Additional responses to public comments. Many comments received by 
OFAC anticipated that the interim final rule would cause a large 
increase in the volume of rejected transaction reports from non-
financial institutions, which the comments suggest would be overly 
burdensome for businesses to submit as well as for OFAC to review. 
Since the publication of the interim final rule, however, OFAC has not 
received a large number of reports of rejected transactions from non-
financial institutions as compared to the number of such reports from 
financial institutions. OFAC does not expect the volume of reported 
rejected transactions to be overly burdensome for businesses, 
particularly given that OFAC is providing additional clarity on the 
scope of rejected transaction reporting through this rule.
    Some commenters expressed concerns about the ability to identify 
all rejected transactions and provide all requested information in a 
timely manner without significant costs, particularly if this 
information was not already being gathered in the course of rejecting a 
transaction. As noted above, OFAC is amending the Regulations to 
require reporting of only the information that is available to the 
filer at the time the transaction is rejected. OFAC notes that many 
businesses already have systems to identify rejected transactions 
related to OFAC sanctions, so it would be less burdensome for those 
specific businesses to report those rejected transactions to OFAC. 
However, OFAC recognizes that there may have been an up-front increase 
in burden and costs for other businesses, such as some non-financial 
institutions, that did not already have such a system to identify 
rejected transactions in place.
    OFAC received a few comments questioning the utility to OFAC of 
receiving rejected transaction reports, particularly from U.S. non-
financial institutions. OFAC continues to believe that these reports 
are valuable to OFAC in supporting its mission, including to identify 
attempts by sanctioned persons

[[Page 40374]]

to utilize both financial and non-financial institutions to evade 
sanctions or further illicit activity.

Compliance Release Requests for Property Blocked Due to Mistaken 
Identity or Other Similar Errors

    OFAC is revising the procedures at Sec.  501.806 for requesting 
release of funds blocked due to ``mistaken identity'' to extend to a 
broader category of any property blocked due to ``typographical or 
similar errors leading to blocking.'' OFAC is also narrowing the 
procedures so they are available only to the person that mistakenly 
blocked the property. In these cases, the person that mistakenly 
blocked the property may request a ``Compliance Release'' from OFAC's 
Compliance Division. Others may continue to request unblocking of 
property through license applications submitted to OFAC's Licensing 
Division.

Rules Regarding the Availability of Information

    In Sec. Sec.  501.603(e), 501.604(e), and 501.801(b)(6), OFAC is 
updating the rules governing the availability of information under FOIA 
for certain categories of information that are submitted to OFAC 
pursuant to the Regulations, to clarify that such information will 
generally be protected from disclosure if OFAC determines that an 
exemption or exclusion under FOIA applies or the disclosure is 
otherwise prohibited by law.

Procedures for Delisting

    In Sec.  501.807, OFAC is clarifying that persons may submit a 
petition for administrative reconsideration to seek removal of a person 
or property from the List of Specially Designated Nationals and Blocked 
Persons (SDN List) or any other list of sanctioned persons maintained 
by OFAC, and making a technical update to the contact information, 
including to require submission by email.

Instruction To Report Certain Transactions

    OFAC is adding a note to Sec.  501.602 to describe reports OFAC may 
require financial institutions to provide about accounts or 
transactions that meet specified criteria to aid in the identification 
of blocked property. If OFAC has reason to believe an account or 
transaction (or class of transactions) may involve the property or 
interests in property of a blocked person, OFAC may instruct the 
financial to report transactions that meet specified criteria and to 
notify OFAC prior to processing such transactions. Upon review, OFAC 
may determine that a reported transaction involves the property or 
interests in property of a blocked person and may take further action.

Other Technical and Conforming Changes

    OFAC is updating the instructions in Sec. Sec.  501.603(b)(2)-(3), 
501.801(b)(2), and 501.806(d)(5) to request the relevant ORS 
identification numbers, when available, to support efficient processing 
of these reports. OFAC is making edits throughout Sec. Sec.  501.603, 
501.604, 501.801, and 501.805 to update the OFAC website links. OFAC is 
amending Sec.  501.804(b) to add contact information for OFAC. OFAC is 
also amending Sec. Sec.  501.603(a)(1) and 501.604 to make clear that 
the reporting requirements extend to persons subject to U.S. 
jurisdiction in the case of the Cuban Assets Control Regulations, 31 
CFR part 515. Additionally, OFAC is amending Sec.  501.805(a) and (b) 
to make clear that OFAC records required by FOIA shall be made 
available in accordance with the provisions of the Regulations in 
addition to referenced provisions of 31 CFR part 1. OFAC is also 
amending Sec.  501.805(c) to add an OFAC website link to obtain forms 
and remove the mail, phone, and in person options.

Electronic Availability

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

Public Participation

    Because the amendment of the Regulations is a rule of agency 
procedure and involves a foreign affairs function, the provisions of 
Executive Order 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

    Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), 
the collections of information related to the Regulations have been 
previously approved by the Office of Management and Budget (OMB) under 
control number 1505-0164. This interim final rule modifies the 
requirements for certain of the collections of information under the 
Regulations, such as requiring use of electronic submission for certain 
reports and clarifying the scope of certain reporting requirements. 
Specifically, in Sec. Sec.  501.603 and 501.604, the rule would mandate 
the use of electronic filing via ORS for initial reports of blocked 
property and reports of rejected transactions, as well as Annual 
Reports of Blocked Property, in order to improve efficiencies for both 
filers and the U.S. government. In addition, OFAC is revising Sec.  
501.603(b)(3)(i) to require reports not only when blocked property is 
unblocked, but also when it is transferred, such as pursuant to a valid 
order from a U.S. government agency or U.S. court, as further set out 
in that paragraph. In Sec.  501.604, OFAC is clarifying the scope of 
rejected transactions and associated information that must be reported 
to reduce unnecessary burdens on filers. Additionally, the rule will 
amend Sec.  501.605(a) of the Regulations to allow for only electronic 
submission of the documentation and notifications required therein, 
given the time sensitivity of these reports, and to remove the options 
for submission by facsimile or mail. The rule will also remove the 
options for mail submission or require email submission in the 
following sections of the Regulations: Sec. Sec.  501.804, 501.805, 
501.806, and 501.807. OFAC is making other technical and conforming 
edits in the rule to increase the presence of websites and use 
electronic reporting, such as in Sec. Sec.  501.603, 501.604, and 
501.801 to update the OFAC website links. Finally, OFAC is amending 
Sec.  501.805(c) to add an OFAC website link to obtain forms.
    These modifications to the collections of information under the 
Regulations have been submitted to OMB for review and approval under 
control number 1505-0164. Written comments and recommendations for the 
modified collection can be submitted by visiting www.reginfo.gov/public/do/PRAMain. Find this document by selecting ``Currently Under 
Review--Open for Public Comments'' or by using the search function. 
Comments are welcome and must be received by June 10, 2024.
    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.
    The likely filers and record-keepers affected by these collections 
of information contained in 31 CFR part 501 are financial institutions, 
business organizations, nonprofit organizations, individuals, and legal 
representatives.
    Since OFAC's last filing in June 2021, OFAC has reviewed the data 
on

[[Page 40375]]

reporting received and processed between April 4, 2022, and April 4, 
2023, to estimate the reporting burden, as set forth below. Given the 
number and type of reports received and processed during this period, 
the overall burden of the recordkeeping requirement imposed by Sec.  
501.601 is estimated to increase, largely due to the imposition of a 
broad range of sanctions in response to Russia's unjustified and 
unprovoked invasion of Ukraine in February 2022, which has led to a 
large influx of related reporting.
    Additionally, the new electronic reporting mandate for some reports 
may impose initial costs on businesses that do not already file such 
reports electronically. OFAC is taking into account this potential 
initial increase in burden and cost for some parts of the private 
sector in its updated Supporting Statement related to this regulatory 
amendment. However, in the long term, OFAC expects the use of 
electronic reporting via ORS to reduce the overall time, cost, and 
burden of reporting for filers. OFAC estimates that, during the first 
three months of 2023, less than 1% (estimated 0.03%) of reports for 
blocked property or rejected transactions were submitted to OFAC using 
non-electronic methods, while approximately 96% of reports were 
submitted electronically via ORS, and approximately 3% of reports were 
submitted electronically to OFAC via email. In its updated Supporting 
Statement related to this regulatory amendment, OFAC is taking into 
account a potential small initial increase in burden and cost for the 
small number of filers (an estimated 3%) who would need to transition 
from filing reports via traditional mail service or via email to the 
new ORS electronic system. Overall, OFAC estimates that there should be 
a minimal overall burden in mandating electronic submission via ORS 
because nearly all filers currently send reports to OFAC via ORS.
    The total burden for this collection is estimated to be:
    Estimated Number of Respondents: 136,784.
    Frequency of Response: On occasion.
    Estimated Total Number of Annual Responses: 136,784.
    Estimated Time per Response: Varies by form from 15 minutes to 5 
hours.
    Estimated Total Annual Burden Hours: 44,220.
    Comments are invited on: (a) Whether the collection of information 
is necessary for the proper performance of the functions of the agency, 
including whether the information has practical utility; (b) the 
accuracy of the agency's estimate of the burden of the collection of 
information; (c) ways to enhance the quality, utility, and clarity of 
the information to be collected; (d) ways to minimize the burden of the 
collection of information on respondents, including through the use of 
automated collection techniques or other forms of information 
technology; and (e) estimates of capital or start-up costs and costs of 
operation, maintenance, and purchase of services required to provide 
information.

List of Subjects in 31 CFR Part 501

    Administrative practice and procedure, Banks, Banking, Exports, 
Foreign trade, Licensing and registration, Penalties, Reporting and 
recordkeeping requirements.

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

PART 501--REPORTING, PROCEDURES AND PENALTIES REGULATIONS

0
1. The authority citation for part 501 continues to read as follows:

    Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, 2339B; 19 U.S.C. 
3901-3913; 21 U.S.C. 1901-1908; 22 U.S.C. 287c, 2370(a), 6009, 6032, 
7205, 8501-8551; 31 U.S.C. 321(b); 50 U.S.C. 1701-1706, 4301-4341; 
Pub. L. 101-410, 104 Stat. 890, as amended (28 U.S.C. 2461 note).


0
2. Amend Sec.  501.602 by redesignating Note 1 to Sec.  501.602 as Note 
2 to Sec.  501.602 and adding new Note 1 to Sec.  501.602 to read as 
follows:


Sec.  501.602  Reports to be furnished on demand.

* * * * *

    Note 1 to Sec.  501.602. If OFAC has reason to believe an 
account or transaction (or class of transactions) may involve the 
property or interests in property of a blocked person, OFAC may 
issue an instruction to one or more financial institutions that: (1) 
provides information or criteria to aid in the identification of 
blocked property; and (2) requires the financial institution to 
report transactions that meet the specified criteria and notify OFAC 
prior to processing such transactions. Upon review, OFAC may 
determine that a reported transaction involves the property or 
interests in property of a blocked person and take further action.

* * * * *

0
3. Amend Sec.  501.603 by:
0
a. Revising the section heading;
0
b. Revising and republishing paragraph (a);
0
c. Redesignating paragraphs (b)(1)(ii)(G) and (H) as paragraphs 
(b)(1)(ii)(H) and (I), respectively, adding new paragraph 
(b)(1)(ii)(G), and revising newly redesignated paragraph (b)(1)(ii)(H);
0
d. In paragraph (b)(2)(ii)(F), remove the ``and'' at the end of the 
paragraph;
0
e. Revising (b)(2)(ii)(G);
0
f. Adding a new paragraph (b)(2)(ii)(H);
0
g. Removing paragraph (b)(2)(iii);
0
h. Revising the paragraph heading to paragraph (b)(3);
0
i. Revising paragraph (b)(3)(i);
0
j. In paragraph (b)(3)(ii)(A), add ``or transfer'' after 
``unblocking'';
0
k. Revising paragraphs (b)(3)(ii)(F) and (b)(3)(ii)(G);
0
l. Adding Note 1 to paragraph (b)(3); and
0
m. Revising and republishing paragraphs (d) and (e).
    The revisions, republications, and additions to read as follows:


Sec.  501.603  Reports of blocked, unblocked, or transferred blocked 
property.

    (a) Who must report--(1) Persons holding, unblocking, or 
transferring blocked property. Any U.S. person (or person subject to 
U.S. jurisdiction in the case of part 515 of this chapter), including a 
financial institution, holding, unblocking, or transferring property 
blocked pursuant to this chapter shall submit the relevant reports 
described in this section to the Office of Foreign Assets Control 
(OFAC). This requirement applies to all U.S. persons (or persons 
subject to U.S. jurisdiction in the case of part 515 of this chapter), 
who have in their possession or control any property blocked pursuant 
to this chapter, including financial institutions that receive and 
block payments or transfers, or who have had in their possession or 
control such property that is unblocked or transferred, as set out in 
paragraph (b) of this section.
    (2) Primary responsibility to report. A report may be filed on 
behalf of a person who holds, transfers, or releases blocked property 
by an attorney, agent, or other person. Primary responsibility for 
reporting, however, rests with the actual holder, transferrer, or 
releaser of the property, or the person exercising control over 
property located outside the United States, with the following 
exceptions: primary responsibility for reporting any trust assets rests 
with the trustee; and primary responsibility for reporting real 
property rests with any U.S. co-owner, legal representative, agent, or 
property manager in the United States. No person is excused from filing 
a report by reason of the fact that another person has submitted a 
report with regard to the same property, except upon actual knowledge 
of the report filed by such other person.
    (3) Financial institution. For purposes of this section, the term 
``financial institution'' includes a banking institution, domestic 
bank, United States depository institution, financial

[[Page 40376]]

institution, or U.S. financial institution, as those terms are defined 
in the applicable part of this chapter.
    (b) * * *
    (1) * * *
    (ii) * * *
    (G) Any action taken with respect to the property (e.g., depositing 
the property into a new or existing blocked, interest-bearing account 
that is labeled as such and is established in the name of, or contains 
a means of clearly identifying the interest of, the person subject to 
blocking pursuant to the requirements of this chapter);
    (H) The legal authority or authorities under which the property is 
blocked. This may include a reference to the sanctions program (current 
programs are on OFAC's website: https://ofac.treasury.gov), the 
applicable part of this chapter (e.g., 31 CFR part 515, 31 CFR part 
544), an Executive order (E.O.) (e.g., E.O. 13224, E.O. 13599), or a 
statute (e.g., Foreign Narcotics Kingpin Designation Act). (Note: For 
this purpose, the term ``SDN'' is generic and cannot be used to 
identify the legal authority for blocking property); and
    (2) * * *
    (ii) * * *
    (G) The legal authority or authorities under which the property is 
blocked. This may include a reference to the sanctions program (current 
programs are listed here: https://ofac.treasury.gov), the applicable 
part of this chapter (e.g., 31 CFR part 515, 31 CFR part 544), an 
Executive order (E.O.) (e.g., E.O. 13224, E.O. 13599), or a statute 
(e.g., Foreign Narcotics Kingpin Designation Act). (Note: For this 
purpose, the term ``SDN'' is generic and cannot be used to identify the 
legal authority for blocking property); and
    (H) The relevant OFAC Reporting System identification numbers, when 
available.
    (3) Reports of blocked property that is unblocked or transferred--
(i) When reports are due. Reports shall be submitted to OFAC within 10 
business days from the date blocked property is unblocked or 
transferred, except that if such reports are already required as a 
condition of a general or specific license, no additional report is 
required to be submitted under this section. For example, such reports 
must be filed when blocked property is unblocked or transferred 
pursuant to a valid order from a U.S. government agency or U.S. court, 
including pursuant to a valid judicial order issued pursuant to Section 
201(a) of the Terrorism Risk Insurance Act (Pub. L. 107-297, 116 Stat. 
2322, 28 U.S.C. 1610 note) or a valid order of forfeiture by any U.S. 
government agency or U.S. court. Reports do not need to be filed under 
this section for debits to blocked accounts for normal service charges 
authorized pursuant to OFAC sanctions.
    (ii) * * *
    (F) The legal authority or authorities under which the property was 
unblocked or transferred. This may include, for example, reference to a 
specific or general license under an applicable part of this chapter or 
an E.O.; and
    (G) A copy of the original blocking report filed with OFAC pursuant 
to Sec.  501.603(b)(1) and the OFAC Reporting System report 
identification numbers, when available.

    Note 3 to paragraph (b)(3).  The reporting requirement set forth 
in this paragraph (b)(3) applies in addition to the reporting 
requirement set forth in Sec.  501.605 of this part, which requires 
litigants to notify OFAC of proceedings that may affect blocked 
property or retained funds.

* * * * *
    (d) How to report. (1) Except as otherwise provided, all initial 
reports of blocked property required under Sec.  501.603(b)(1) and the 
Annual Reports of Blocked Property required under Sec.  501.603(b)(2) 
must be filed electronically through the OFAC Reporting System (ORS), 
available on OFAC's website, https://ofac.treasury.gov/ofac-reporting-system. While blocked funds may be maintained in omnibus accounts, the 
Annual Reports of Blocked Property must contain a disaggregated list 
showing each blocked asset contained within the omnibus account. A copy 
of reports submitted pursuant to this section shall be retained for the 
submitter's records. If a submitter can provide evidence of unique and 
extraordinary circumstances that would not allow the submitter to use 
ORS, such as lack of access to the internet, the submitter may request 
to submit reports in an alternative manner by calling 202/622-2490. 
Such requests will be subject to a presumption of denial and granted 
only in writing.
    (2) All reports of unblocked or transferred blocked property 
required pursuant to Sec.  501.603(b)(3) must be submitted 
electronically to OFAC via email at [email protected], with the 
number of this section in the subject line, or through ORS, available 
on OFAC's website, https://ofac.treasury.gov/ofac-reporting-system. If 
a submitter can provide evidence of unique and extraordinary 
circumstances that would not allow the submitter to report 
electronically, such as lack of access to the internet, the submitter 
may request to submit reports in an alternative manner by calling 202/
622-2490. Such requests will be subject to a presumption of denial and 
granted only in writing.
    (e) Rules governing availability of information. Information 
submitted to OFAC pursuant to this section will be protected from 
disclosure under the Freedom of Information Act (FOIA) (5 U.S.C. 552) 
and the provisions of 31 CFR part 1 if OFAC reasonably foresees that 
disclosure would harm an interest protected by a FOIA exemption or 
disclosure is prohibited by law. See 31 CFR 1.5 for additional 
provisions relating to confidential commercial information.

0
4. Amend Sec.  501.604 by:
0
a. Revising the section heading;
0
b. In paragraph (a)(1), add ``in the case of part 515 of this chapter'' 
after ``(or a person subject to U.S. jurisdiction'';
0
c. Revising and republishing paragraph (a)(3);
0
d. Revising paragraph (b) introductory text;
0
e. In paragraph (b)(6), remove ``www.treasury.gov/resource-center/sanctions/SDN-List/Pages/program__tags.aspx'' and add in its place 
``https://ofac.treasury.gov''; and
0
f. Revising and republishing paragraphs (d) and (e).
    The revisions and republications to read as follows:


Sec.  501.604  Reports of rejected transactions.

    (a) * * *
    (3) Transaction. The term transaction for purposes of this section 
includes wire transfers, trade finance, transactions related to 
securities, checks, or foreign exchange, and sales or purchases of 
goods or services.
    (b) Required information to be reported. Reports of rejected 
transactions shall include the following information, to the extent the 
information is available to the person submitting the report at the 
time the transaction is rejected:
* * * * *
    (d) Where to report. Reports under this section shall be submitted 
to OFAC through the OFAC Reporting System, available on OFAC's website, 
https://ofac.treasury.gov/ofac-reporting-system. If a submitter can 
provide evidence of unique and extraordinary circumstances that would 
not allow the submitter to use ORS, such as lack of access to the 
internet, the submitter may request to submit reports in an alternative 
manner by calling 202/622-2490. Such requests will be subject to a 
presumption of denial and granted only in writing.
    (e) Rules governing availability of information. Information 
submitted to OFAC pursuant to this section will be

[[Page 40377]]

protected from disclosure under the Freedom of Information Act (FOIA) 
(5 U.S.C. 552) and the provisions of 31 CFR part 1 if OFAC reasonably 
foresees that disclosure would harm an interest protected by a FOIA 
exemption or disclosure is prohibited by law. See 31 CFR 1.5 for 
additional provisions relating to confidential commercial information.

0
5. In Sec.  501.605, revise and republish paragraph (a) to read as 
follows:


Sec.  501.605  Reports on litigation, arbitration, and dispute 
resolution proceedings.

    (a) U.S. persons (or persons subject to U.S. jurisdiction in the 
case of part 515 of this chapter) participating in litigation, 
arbitration, or other binding alternative dispute resolution 
proceedings in the United States on behalf of or against persons whose 
property or interests in property are blocked or whose funds have been 
retained pursuant to Sec.  596.504(b) of this chapter, or when the 
outcome of any proceeding may affect blocked property or retained 
funds, must:
    (1) Provide notice of such proceedings upon their commencement or 
upon submission or receipt of documents bringing the proceedings within 
the terms of the introductory text to this paragraph (a);
    (2) Submit copies of all pleadings, motions, memoranda, exhibits, 
stipulations, correspondence, and proposed orders or judgments 
(including any proposed final judgment or default judgment) submitted 
to the court or other adjudicatory body, and all orders, decisions, 
opinions, or memoranda issued by the court, to the Office of the Chief 
Counsel (Foreign Assets Control) at [email protected] with the 
number of this section in the subject line, within 10 days of filing, 
submission, or issuance. This paragraph (a)(2) shall not apply to 
discovery requests or responses, documents filed under seal, or 
requests for procedural action not seeking action dispositive of the 
proceedings (such as requests for extension of time to file); and
    (3) Report by email to the Office of the Chief Counsel (Foreign 
Assets Control), at [email protected] with the number of this 
section in the subject line, the scheduling of any hearing or status 
conference in the proceedings whenever it appears that the court or 
other adjudicatory body may issue an order or judgment in the 
proceedings (including a final judgment or default judgment) or is 
considering or may decide any pending request dispositive of the merits 
of the proceedings or of any claim raised in the proceedings.
* * * * *

0
6. Amend Sec.  501.801 by:
0
a. In paragraph (a), revise the third sentence; ``
0
b. Revise paragraph (b)(2)(ii);
0
c. In paragraph (b)(5), remove ``by written correspondence'' and add in 
its place ``via the OFAC License Application Page at https://ofac.treasury.gov/ofac-license-application-page''; and
0
d. Revise paragraph (b)(6).
    The revisions to read as follows:


Sec.  501.801  Licensing

    (a) * * * General licenses are set forth in subpart E of each part 
contained in this chapter, made available on OFAC's website (https://ofac.treasury.gov), or published in the Federal Register.* * *
    (b) * * *
    (2) * * *
    (ii) Information to be supplied. The applicant must supply all 
information specified by relevant instructions (available on OFAC's 
Reporting and License Application Forms page at https://licensing.ofac.treas.gov) or forms, and must fully disclose the names 
of all parties who are concerned with or interested in the proposed 
transaction. If the application is filed by an agent, the agent must 
disclose the name of his or her principal(s). Such documents as may be 
relevant shall be attached to each application as a part of such 
application, whether filed electronically or by mail, except that 
documents previously filed with OFAC may, where appropriate, be 
incorporated by reference in such application. For applications for the 
release of blocked funds, applicants are encouraged to include, when 
available, the OFAC Reporting System (ORS) transaction and submission 
identification numbers. Applicants may be required to furnish such 
further information as is deemed necessary to assist OFAC in making a 
determination. Any applicant or other party in interest desiring to 
present additional information may do so at any time before or after 
OFAC makes its decision with respect to the application. Any requests 
to make such an oral presentation must be submitted via the OFAC 
License Application Page at https://ofac.treasury.gov/ofac-license-application-page to the attention of the Licensing Division, 
referencing the relevant Case ID number and a ``Request for Oral 
Presentation.'' Such requests are rarely granted.
* * * * *
    (6) Rules governing availability of information. Information 
submitted to OFAC pursuant to this section will be protected from 
disclosure under the Freedom of Information Act (FOIA) (5 U.S.C. 552) 
and the provisions of 31 CFR part 1 if OFAC reasonably foresees that 
disclosure would harm an interest protected by a FOIA exemption or 
disclosure is prohibited by law. See 31 CFR 1.5 for additional 
provisions relating to confidential commercial information.

0
7. In Sec.  501.804, revise paragraph (b) to read as follows:


Sec.  501.804  Rulemaking.

* * * * *
    (b) Any interested person may petition the Office of Foreign Assets 
Control for the issuance, amendment, or repeal of any rule, including a 
general license, at [email protected] with the number of this 
section in the subject line.


Sec.  501.805  [Amended]

0
8. Amend Sec.  501.805 by:
0
a. In paragraphs (a) and (b), after the phrase ``31 CFR part 1'' add 
the phrase ``, as well as the provisions of this part'' in both places 
it appears;
0
b. In paragraph (c), remove the phrase ``in person or by writing to the 
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Avenue NW--Annex, Washington, DC 20220, or by calling 202/
622-2480'' with the phrase ``on OFAC's website (https://ofac.treasury.gov).''; and
0
c. In paragraph (d)(2), remove the reference ``https://www.treas.gov/ofac'' and add in its place the reference ``https://ofac.treasury.gov''.

0
9. Revise and republish Sec.  501.806 to read as follows:


Sec.  501.806  Procedures for unblocking property believed to have been 
blocked and reported in error due to mistaken identity or typographical 
or similar errors.

    When a party believes it has blocked property pursuant to the 
applicable regulations of this chapter due to mistaken identity or 
typographical or similar errors, such party may seek to have such 
property unblocked pursuant to the following administrative procedures:
    (a) Any person who has blocked and reported to the Office of 
Foreign Assets Control (OFAC) property pursuant to Sec.  501.603 may 
submit a request for authorization to release blocked property that was 
blocked in error due to mistaken identity or typographical or similar 
error.

[[Page 40378]]

    (b) Requests to release such property must be sent via email to 
[email protected] and include the phrase ``31 CFR 501.806--
Request for a Compliance Release'' in the subject line of the email.
    (c) A request to release property must include the name, address, 
telephone number, and email address of the person seeking the release 
of the property.
    (d) A request to release property should include the following 
information, where known, concerning the blocked property:
    (1) The name of the person that holds the blocked property or filed 
the initial report of blocked property;
    (2) The actual value, or if unknown, estimated value, in U.S. 
dollars of the blocked property, as included in the initial report of 
blocked property;
    (3) The date of the blocking included in the initial report of 
blocked property;
    (4) A copy of a valid government-issued identification document, 
social security number or employer identification number for a person 
whose property is believed to have been blocked in error, when 
applicable;
    (5) The OFAC Reporting System (ORS) identification numbers 
associated with the initial report of blocked property filed with OFAC, 
when available;
    (6) A description of the property or underlying transaction; and
    (7) A narrative description of the reasons why the applicant 
believes the property was blocked in error.
    (e) Upon receipt of the materials required by paragraph (d) of this 
section, OFAC may request additional material, if available, from the 
applicant concerning the blocked property pursuant to Sec.  501.602.
    (f) Following review of all applicable submissions, OFAC will 
determine whether the property should be released. In the event that 
OFAC determines that the property should be released, it will direct 
the person to release the property to the appropriate party.

0
10. Revise and republish Sec.  501.807 to read as follows:


Sec.  501.807  Procedures governing delisting from the Specially 
Designated Nationals and Blocked Persons List or any other list of 
sanctioned persons or property maintained by the Office of Foreign 
Assets Control.

    A person may submit a petition for administrative reconsideration 
pursuant to the procedures outlined below in order to seek removal of a 
person or property (e.g., a vessel) from the List of Specially 
Designated Nationals and Blocked Persons (SDN List) or any other list 
or identification of sanctioned persons or property maintained by the 
Office of Foreign Assets Control (OFAC):
    (a) A person blocked under the provisions of any part of this 
chapter, including a specially designated national, specially 
designated terrorist, specially designated narcotics trafficker, or a 
person otherwise subject to sanctions pursuant to the provisions of any 
part of this chapter (each, a ``sanctioned person''), or a person 
owning a majority interest in property (e.g., a vessel) that is blocked 
or otherwise subject to sanctions may submit arguments or evidence that 
the person believes establishes that insufficient basis exists for the 
sanction or that the circumstances resulting in the sanction no longer 
apply. The sanctioned person also may propose remedial steps on the 
person's part, such as corporate reorganization, resignation of persons 
from positions in a blocked entity, or similar steps, which the person 
believes would negate the basis for the sanction. A person owning a 
majority interest in property (e.g., a vessel) that is blocked or 
otherwise subject to sanctions may propose the sale of the vessel, with 
the proceeds to be placed into a blocked interest-bearing account after 
deducting the costs incurred while the vessel was blocked and the costs 
of the sale. This submission must be made via email to 
[email protected].
    (b) For purposes of reconsideration petitions relating to persons 
or property sanctioned by OFAC:
    (1) The information submitted by the person seeking removal of a 
person or property from the SDN List or any other list or 
identification of sanctioned persons or property maintained by OFAC 
will be reviewed by OFAC, which may request clarifying, corroborating, 
or other additional information.
    (2) A person seeking removal of a person or property from the SDN 
List or any other list or identification of sanctioned persons or 
property maintained by OFAC may request a meeting with OFAC; however, 
such meetings are not required, and the office may, at its discretion, 
decline to conduct such meetings prior to completing a review pursuant 
to this section.
    (3) After OFAC has conducted a review of the request for 
reconsideration, it will provide a written decision to the person 
seeking the removal of a person or property from the SDN List or any 
other list or identification of sanctioned persons or property 
maintained by OFAC.

Bradley T. Smith,
Director, Office of Foreign Assets Control.
[FR Doc. 2024-10033 Filed 5-8-24; 8:45 am]
BILLING CODE 4810-AL-P