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e-CFR data is current as of November 14, 2019

Title 31Subtitle BChapter VPart 594 → Subpart B


Title 31: Money and Finance: Treasury
PART 594—GLOBAL TERRORISM SANCTIONS REGULATIONS


Subpart B—Prohibitions


Contents
§594.201   Prohibited transactions involving blocked property.
§594.202   Effect of transfers violating the provisions of this part.
§594.203   Holding of funds in interest-bearing accounts; investment and reinvestment.
§594.204   Prohibited transaction or dealing in property; contributions of funds, goods, or services.
§594.205   Evasions; attempts; conspiracies.
§594.206   Expenses of maintaining blocked property; liquidation of blocked property.
§594.207   Exempt transactions.

§594.201   Prohibited transactions involving blocked property.

(a) Except as authorized by statutes, regulations, orders, directives, rulings, instructions, licenses or otherwise, and notwithstanding any contracts entered into or any license or permit granted prior to the effective date, property and interests in property of the following persons that are in the United States, that hereafter come within the United States, or that hereafter come within the possession or control of U.S. persons, including their overseas branches, are blocked and may not be transferred, paid, exported, withdrawn or otherwise dealt in:

(1) Foreign persons listed in the Annex to Executive Order 13224 of September 23, 2001, as may be amended;

(2) Foreign persons determined by the Secretary of State, in consultation with the Secretary of the Treasury, the Secretary of Homeland Security and the Attorney General, to have committed, or to pose a significant risk of committing, acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States;

(3) Persons determined by the Secretary of the Treasury, in consultation with the Secretary of State, the Secretary of Homeland Security and the Attorney General, to be owned or controlled by, or to act for or on behalf of, any person whose property or interests in property are blocked pursuant to paragraphs (a)(1), (a)(2), (a)(3), or (a)(4)(i) of this section;

(4) Except as provided in section 5 of Executive Order 13224, any person determined by the Secretary of the Treasury, in consultation with the Secretary of State, the Secretary of Homeland Security and the Attorney General:

(i) To assist in, sponsor, or provide financial, material, or technological support for, or financial or other services to or in support of:

(A) Acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States, or

(B) Any person whose property or interests in property are blocked pursuant to paragraph (a) of this section; or

(ii) To be otherwise associated with any person whose property or interests in property are blocked pursuant to paragraph (a)(1), (2), or (3) or (a)(4)(i) of this section;

(5) Foreign persons that are identified on the Specially Designated Nationals and Blocked Persons List (SDN List) maintained by the Office of Foreign Assets Control as officials, agents, or affiliates of Iran's Islamic Revolutionary Guard Corps (IRGC);

(6) Foreign persons determined by the Secretary of the Treasury, in consultation with the Secretary of State, to knowingly provide significant financial, material, or technological support for or to:

(i) Bayt al-Mal, Jihad al-Bina, the Islamic Resistance Support Association, the Foreign Relations Department of Hizballah, the External Security Organization of Hizballah, or any successor or affiliate thereof as designated by the Secretary of the Treasury, in consultation with the Secretary of State;

(ii) Al-Manar TV, al Nour Radio, or the Lebanese Media Group, or any successor or affiliate thereof as designated by the Secretary of the Treasury, in consultation with the Secretary of State;

(iii) A foreign person determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be engaged in fundraising or recruitment activities for Hizballah; or

(iv) A foreign person owned or controlled by a person described in paragraph (a)(6)(i), (ii), or (iii) of this section;

(7) Agencies or instrumentalities of a foreign state determined by the Secretary of the Treasury, in consultation with the Secretary of State, to have, on or after October 25, 2018, knowingly:

(i) Conducted significant joint combat operations with, or significantly supported combat operations of, Hizballah; or

(ii) Provided significant financial support for or to, or significant arms or related materiel to, Hizballah;

(8) Foreign persons included on a list provided to Congress under paragraph (b) of Section 3 of the Sanctioning the Use of Civilians as Defenseless Shields Act of 2018 (Pub. L. 115-348) (Shields Act) because they have been determined by the Secretary of the Treasury, in consultation with the Secretary of State, on or after December 21, 2018:

(i) To be a member of Hizballah or to be knowingly acting on behalf of Hizballah; and

(ii) To knowingly order, control, or otherwise direct the use of civilians protected as such by the law of war to shield military objectives from attack;

(9) Foreign persons included on a list provided to Congress under paragraph (b) of Section 3 of the Shields Act because they have been determined by the Secretary of the Treasury, in consultation with the Secretary of State, on or after December 21, 2018:

(i) To be a member of HAMAS or to be knowingly acting on behalf of Hamas; and

(ii) To knowingly order, control, or otherwise direct the use of civilians protected as such by the law of war to shield military objectives from attack;

(10) Foreign persons, agencies, or instrumentalities of a foreign state, included on a list provided to Congress under paragraph (b) of Section 3 of the Shields Act because they have been determined by the Secretary of the Treasury, in consultation with the Secretary of State, on or after December 21, 2018, to knowingly and materially support, order, control, direct, or otherwise engage in:

(i) Any act described in paragraph (a)(8)(ii) of this section by a person described in paragraph (a)(8) of this section; or

(ii) Any act described in paragraph (a)(9)(ii) of this section by a person described in paragraph (a)(9) of this section; or

(11) Foreign persons included on a list provided to Congress under paragraph (c) of Section 3 of the Shields Act because they have been determined by the Secretary of the Treasury, in consultation with the Secretary of State, on or after December 21, 2018, to knowingly order, control, or otherwise direct the use of civilians protected as such by the law of war to shield military objectives from attack, and with respect to which the Secretary of the Treasury, in consultation with the Secretary of State, has exercised the authority to block all property and interests in property.

Note 1 to paragraph (a): Section 5 of Executive Order 13224, as amended, provides that, with respect to those persons designated pursuant to paragraph (a)(4) of this section, the Secretary of the Treasury, in the exercise of his discretion and in consultation with the Secretary of State, the Secretary of Homeland Security and the Attorney General, may take such other actions than the complete blocking of property or interests in property as the President is authorized to take under the International Emergency Economic Powers Act and the United Nations Participation Act if the Secretary of the Treasury, in consultation with the Secretary of State, the Secretary of Homeland Security and the Attorney General, deems such other actions to be consistent with the national interests of the United States, considering such factors as he deems appropriate.

Note 2 to paragraph (a) of §594.201: The names of persons whose property and interests in property are blocked pursuant to §594.201(a) are published in the Federal Register and incorporated into the Office of Foreign Assets Control's SDN List with the identifier “[SDGT].” Persons who have been identified by the Office of Foreign Assets Control as officials, agents, or affiliates of the IRGC are identified by a special reference to the “IRGC” at the end of their entries on the SDN List, in addition to the reference to this part. For example, an affiliate of the IRGC whose property and interests in property are blocked pursuant to this part will have the program tags “[SDGT] [IRGC]” at the end of its entry on the SDN List. The SDN List is accessible through the following page on the Office of Foreign Assets Control's Web site: http://www.treasury.gov/sdn. Additional information pertaining to the SDN List can be found in appendix A to this chapter. See §594.412 concerning entities that may not be listed on the SDN List but whose property and interests in property are nevertheless blocked pursuant to paragraph (a) of this section.

Note 3 to paragraph (a) of §594.201: 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 paragraph (a) of this section.

(b) 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 any person whose property or interests in property are blocked pursuant to §594.201(a) is prohibited. 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 any such security or the endorsement or guaranty of signatures on any such security. 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.

Note 1 to §594.201: The International Emergency Economic Powers Act (50 U.S.C. 1701-1706), in Section 203 (50 U.S.C. 1702), authorizes the blocking of property and interests in property of a person during the pendency of an investigation. The names of persons whose property and interests in property are blocked pending investigation pursuant to paragraph (a) of this section also are published in the Federal Register and incorporated into the SDN List with the identifier “[BPI-PA]” or “[BPI-SDGT].” The scope of the property or interests in property blocked during the pendency of an investigation may be more limited than the scope of the blocking set forth in §594.201(a). Inquiries regarding the scope of any such blocking should be directed to OFAC's Sanctions Compliance & Evaluation Division at 202/622-2490.

Note 2 to §594.201. The prohibitions set forth in this part are separate from and in addition to other parts of 31 CFR chapter V, including but not limited to the Terrorism Sanctions Regulations (part 595), the Terrorism List Government Sanctions Regulations (part 596), and the Foreign Terrorist Organizations Sanctions Regulations (part 597). The prohibitions set forth in this part also are separate and apart from the criminal prohibition, set forth at 18 U.S.C. 2339B, against providing material support or resources to foreign terrorist organizations designated pursuant to section 219 of the Immigration and Nationality Act, as amended.

(c) The prohibitions in paragraph (a) of this section do not apply to the importation of any goods that would otherwise be prohibited solely due to the interest of a person whose property and interests in property are blocked solely pursuant to paragraph (a)(6) or (7) of this section. For the purposes of this paragraph (c), the term “goods” means any articles, natural or manmade substance, material, supply or manufactured product, including inspection and test equipment, and excluding technical data.

[68 FR 34197, June 6, 2003, as amended at 72 FR 4206, Jan. 30, 2007; 76 FR 38544, June 30, 2011; 78 FR 38575, June 27, 2013; 82 FR 50314, Oct. 31, 2017; 84 FR 35312, July 23, 2019]

§594.202   Effect of transfers violating the provisions of this part.

(a) Any transfer after the effective date that is in violation of any provision of this part or of any regulation, order, directive, ruling, instruction, or license issued pursuant to this part, and that involves any property or interest in property blocked pursuant to §594.201(a), 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 property interests.

(b) No transfer before the effective date shall be the basis for the assertion or recognition of any right, remedy, power, or privilege with respect to, or any interest in, any property or interest in property blocked pursuant to §594.201(a), unless the person with whom such property is held or maintained, prior to that date, had written notice of the transfer or by any written evidence had recognized such transfer.

(c) Unless otherwise provided, an appropriate license or other authorization issued by or pursuant to the direction or authorization of the Director of the Office of Foreign Assets Control 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 the International Emergency Economic Powers Act, this part, and any regulation, order, directive, ruling, instruction, or license issued pursuant to this part.

(d) Transfers of property that otherwise would be null and void or unenforceable by virtue of the provisions of this section shall not be deemed to be null and void or unenforceable as to any person with whom such property was held or maintained (and as to such person only) in cases in which such person is able to establish to the satisfaction of the Director of the Office of Foreign Assets Control each of the following:

(1) Such transfer did not represent a willful violation of the provisions of this part by the person with whom such property was held or maintained;

(2) The person with whom such property was held or maintained did not have reasonable cause to know or suspect, in view of all the facts and circumstances known or available to such person, that such transfer required a license or authorization issued pursuant to this part and was not so licensed or authorized, or, if a license or authorization did purport to cover the transfer, that such license or authorization had been obtained by misrepresentation of a third party or withholding of material facts or was otherwise fraudulently obtained; and

(3) The person with whom such property was held or maintained filed with the Office of Foreign Assets Control a report setting forth in full the circumstances relating to such transfer promptly upon discovery that:

(i) Such transfer was in violation of the provisions of this part or any regulation, ruling, instruction, license, or other direction or authorization issued pursuant to this part;

(ii) Such transfer was not licensed or authorized by the Director of the Office of Foreign Assets Control; or

(iii) If a license did purport to cover the transfer, such license had been obtained by misrepresentation of a third party or withholding of material facts or was otherwise fraudulently obtained.

Note to paragraph (d): The filing of a report in accordance with the provisions of paragraph (d)(3) of this section shall not be deemed evidence that the terms of paragraphs (d)(1) and (d)(2) of this section have been satisfied.

(e) Except to the extent otherwise provided by law or 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 in which on or since the effective date there existed an interest of a person whose property or interests in property are blocked pursuant to §594.201(a).

§594.203   Holding of funds in interest-bearing accounts; investment and reinvestment.

(a) Except as provided in paragraph (c) or (d) of this section, or as otherwise directed by the Office of Foreign Assets Control, any U.S. person holding funds, such as currency, bank deposits, or liquidated financial obligations, subject to §594.201(a) shall hold or place such funds in a blocked interest-bearing account located in the United States.

(b)(1) For purposes of this section, the term blocked interest-bearing account means a blocked account:

(i) In a federally-insured U.S. bank, thrift institution, or credit union, provided the funds are earning interest at rates that are commercially reasonable; or

(ii) With a broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, provided the funds are invested in a money market fund or in U.S. Treasury bills.

(2) For purposes of this section, a rate is commercially reasonable if it is the rate currently offered to other depositors on deposits or instruments of comparable size and maturity.

(3) Funds held or placed in a blocked account pursuant to this paragraph (b) may not be invested in instruments the maturity of which exceeds 180 days. If interest is credited to a separate blocked account or subaccount, the name of the account party on each account must be the same.

(c) Blocked funds held in instruments the maturity of which exceeds 180 days at the time the funds become subject to §594.201(a) may continue to be held until maturity in the original instrument, provided any interest, earnings, or other proceeds derived therefrom are paid into a blocked interest-bearing account in accordance with paragraph (b) or (d) of this section.

(d) Blocked funds held in accounts or instruments outside the United States at the time the funds become subject to §594.201(a) may continue to be held in the same type of accounts or instruments, provided the funds earn interest at rates that are commercially reasonable.

(e) This section does not create an affirmative obligation for the holder of blocked tangible property, such as chattels or real estate, or of other blocked property, such as debt or equity securities, to sell or liquidate such property at the time the property becomes subject to §594.201(a). However, the Office of Foreign Assets Control may issue licenses permitting or directing such sales or liquidation in appropriate cases.

(f) Funds subject to this section may not be held, invested, or reinvested in a manner that provides immediate financial or economic benefit or access to any person whose property or interests in property are blocked pursuant to §594.201(a), nor may their holder cooperate in or facilitate the pledging or other attempted use as collateral of blocked funds or other assets.

§594.204   Prohibited transaction or dealing in property; contributions of funds, goods, or services.

Except as otherwise authorized, no U.S. person may engage in any transaction or dealing in property or interests in property of persons whose property and interests in property are blocked pursuant to §594.201(a), including but not limited to the following transactions:

(a) 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 §594.201(a); and

(b) 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 §594.201(a).

[78 FR 38575, June 27, 2013]

§594.205   Evasions; attempts; conspiracies.

(a) Except as otherwise authorized, and notwithstanding any contract entered into or any license or permit granted prior to the effective date, any transaction by any U.S. person or within the United States on or after the effective date that evades or avoids, has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in this part is prohibited.

(b) Except as otherwise authorized, and notwithstanding any contract entered into or any license or permit granted prior to the effective date, any conspiracy formed for the purpose of engaging in a transaction prohibited by this part is prohibited.

§594.206   Expenses of maintaining blocked property; liquidation of blocked property.

(a) Except as otherwise authorized, and notwithstanding the existence of any rights or obligations conferred or imposed by any international agreement or contract entered into or any license or permit granted before the effective date, all expenses incident to the maintenance of physical property blocked pursuant to §594.201(a) shall be the responsibility of the owners or operators of such property, which expenses shall not be met from blocked funds.

(b) Property blocked pursuant to §594.201(a) may, in the discretion of the Director, Office of Foreign Assets Control, be sold or liquidated and the net proceeds placed in a blocked interest-bearing account in the name of the owner of the property.

§594.207   Exempt transactions.

The prohibitions contained in §594.201(a)(6) and (7) do not apply to the following activities:

(a) Any authorized intelligence, law enforcement, or national security activities of the United States; or

(b) Any transaction necessary to comply with United States obligations under the Agreement between the United Nations and the United States of America regarding the Headquarters of the United States, signed at Lake Success June 26, 1947, and entered into force November 21, 1947, or the Convention on Consular Relations, done at Vienna April 24, 1963, and entered into force March 19, 1967, or any other United States international agreement.

[84 FR 35312, July 23, 2019]

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