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< Back to current issue of Immigration Daily < Back to current issue of Immigrant's Weekly

< Back to current issue of Immigration Daily                        < Back to current issue of Immigrant's Weekly

[Federal Register: January 11, 2001 (Volume 66, Number 8)]
[Rules and Regulations]               
[Page 2725-2741]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11ja01-29]                         


[[Page 2725]]

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Part IV





Department of the Treasury





-----------------------------------------------------------------------



Office of Foreign Assets Control



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31 CFR Parts 501, 538, 545



Reporting and Procedures Regulations; Sudanese Sanctions Regulations; 
Taliban (Afghanistan) Sanctions Regulations; Final Rules


[[Page 2726]]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Parts 501, 538, 545

 
Reporting and Procedures Regulations; Sudanese Sanctions 
Regulations; Taliban (Afghanistan) Sanctions Regulations

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Interim rule; amendments.

-----------------------------------------------------------------------

SUMMARY: The Office of Foreign Assets Control of the U.S. Department of 
the Treasury is amending provisions relating to the registration of 
nongovernmental organizations in the Reporting and Procedures 
Regulations and Sudanese Sanctions Regulations and is issuing the 
Taliban (Afghanistan) Sanctions Regulations to implement the 
President's declaration of a national emergency and imposition of 
sanctions against the Taliban in Executive Order 13129 of July 4, 1999.

DATES: Effective Date: January 11, 2001.
    Comments: Written comments must be received no later than February 
12, 2001. Comments may be submitted either via regular mail to the 
attention of David W. Mills, Chief, Policy Planning and Program 
Management Division, rm. 2176 Main Treasury Annex, 1500 Pennsylvania 
Ave. NW., Washington, DC 20220 or via OFAC's website (http://
www.treas.gov/ofac).

FOR FURTHER INFORMATION CONTACT: Dennis P. Wood, Chief of Compliance 
Programs, tel.: 202/622-2490, Steven I. Pinter, Acting Chief of 
Licensing, tel.: 202/622-2480, or Barbara C. Hammerle, Acting Chief 
Counsel, tel.: 202/622-2410, Office of Foreign Assets Control, 
Department of the Treasury, Washington, DC 20220.

SUPPLEMENTARY INFORMATION:

Electronic Availability

    This document is available as an electronic file on The Federal 
Bulletin Board the day of publication in the Federal Register. By 
modem, dial 202/512-1387 and type ``/GO FAC,'' or call 202/512-1530 for 
disk or paper copies. This file is available for downloading without 
charge in ASCII and Adobe Acrobat7 readable (*.PDF) formats. For 
Internet access, the address for use with the World Wide Web (Home 
Page), Telnet, or FTP protocol is: fedbbs.access.gpo.gov. This document 
and additional information concerning the programs of the Office of 
Foreign Assets Control are available for downloading from the Office's 
Internet Home Page: http://www.treas.gov/ofac, or in fax form through 
the Office's 24-hour fax-on-demand service: call 202/622-0077 using a 
fax machine, fax modem, or (within the United States) a touch-tone 
telephone.

Background

    The Treasury Department is adding paragraph (c) to Sec. 501.801 of 
the Reporting and Procedures Regulations, 31 CFR Part 501, to require 
registration of nongovernmental organizations seeking permission to 
perform humanitarian and religious activities otherwise prohibited in 
geographic areas subject to economic sanctions. This change will 
harmonize practices across all sanctions programs containing 
nongovernmental organization registration provisions. As a consequence 
of this change, OFAC is amending the nongovernmental registration 
provision contained in Sec. 538.521 of the Sudanese Sanctions 
Regulations, 31 CFR Part 538, to reference the new paragraph in 
Sec. 501.801.
    On July 4, 1999, the President issued Executive Order 13129 (64 FR 
36759, July 7, 1999), declaring a national emergency with respect to 
the actions and policies of the Taliban in Afghanistan and invoking the 
authority of, inter alia, the International Emergency Economic Powers 
Act, 50 U.S.C. 1701-1706 (``IEEPA''). The order blocks all property and 
interests in property of the Taliban that are in the United States, 
that are or hereafter come within the United States, or that are or 
hereafter come within the possession or control of U.S. persons, 
including overseas branches of U.S. entities. The order also prohibits 
trade with the Taliban or involving the territory of Afghanistan 
controlled by the Taliban. The order authorizes the Secretary of the 
Treasury, in consultation with the Secretary of State and the Attorney 
General, to take such actions, including the promulgation of rules and 
regulations, as may be necessary to carry out the purposes of the 
order. On October 15, 1999, the United Nations Security Council issued 
Resolution 1267 which, among other things, directs member states to 
freeze funds and other financial resources of the Taliban (effective 
November 14, 1999). To implement Executive Order 13129, and consistent 
with United Nations Security Council Resolution (``UNSCR'') 1267, the 
Office of Foreign Assets Control of the U.S. Department of the Treasury 
is promulgating the Taliban (Afghanistan) Sanctions Regulations, 31 CFR 
Part 545 (the ``Regulations'').
    Paragraph (a) of Sec. 545.201 of the Regulations implements section 
1(a) of Executive Order 13129 (the ``Executive Order'') by blocking all 
property and interests in property of the Taliban that are in the 
United States, that hereafter come within the United States, or that 
are or hereafter come within the possession or control of U.S. persons, 
including their overseas branches. To implement section 1(b) of the 
Executive Order, Sec. 545.201(a) also blocks all property and interests 
in property of persons determined by the Secretary of the Treasury, in 
consultation with the Secretary of State and the Attorney General, to 
be owned or controlled by, or to be acting for or on behalf of, or to 
provide financial, material, or technological support for, or services 
in support of, the Taliban and those associated with the Taliban. 
Persons coming within any of these categories are referred to as 
persons whose property or interests in property are blocked pursuant to 
Sec. 545.201 in these Regulations. Section 545.201(b) implements 
section 2(a) of the Executive Order by prohibiting U.S. persons from 
transferring, paying, exporting, withdrawing or otherwise dealing in 
property and interests in property blocked pursuant to the Executive 
Order.
    Section 545.204 implements section 2(b) of the Executive Order by 
prohibiting the exportation, reexportation, sale, or supply, directly 
or indirectly, from the United States or by a U.S. person, wherever 
located, of any goods, software, technology (including technical data), 
or services to the territory of Afghanistan controlled by the Taliban 
or to the Taliban or persons whose property or interests in property 
are blocked pursuant to Sec. 545.201.
    Section 545.205 implements section 2(c) of the Executive Order by 
prohibiting the importation into the United States of goods, software, 
technology, or services owned or controlled by the Taliban or persons 
whose property or interests in property are blocked pursuant to 
Sec. 545.201 or from the territory of Afghanistan controlled by the 
Taliban.
    Section 545.206 of the Regulations implements section 2(d) of the 
Executive Order by prohibiting actions that evade, avoid or attempt to 
violate the Regulations. This section also forbids conspiracies to 
violate the Regulations, implementing section 2(e) of the Executive 
Order.
    Section 545.208 details those types of transactions that are exempt 
from the Regulations. Exempted are transactions related to personal 
communications, information and informational materials, travel, 
official U.S.

[[Page 2727]]

government business, journalistic activity, and donations of articles 
to relieve human suffering. These exemptions derive from the exemptions 
set out in section 203(b) of IEEPA (50 U.S.C. 1702(b)).
    Defined terms are set forth in subpart C and interpretive 
provisions in subpart D of the Regulations. Section 545.408 of subpart 
D pertains to the prohibitions set forth in Secs. 545.201 and 545.204 
through 545.206, which extend to U.S. persons wherever they may be 
located. Consequently, Sec. 545.408 makes clear that even while outside 
the United States, U.S. persons are prohibited from dealing in property 
in which the Taliban or persons whose property or interests in property 
are blocked pursuant to Sec. 545.201 have an interest, including 
dealing in goods, software, technology or services owned or controlled 
by the Taliban or of persons whose property or interests in property 
are blocked pursuant to Sec. 545.201. Similarly, U.S. persons may not 
participate in the exportation or importation of goods, software, 
technology, or services into or out of the territory of Afghanistan 
controlled by the Taliban.
    Transactions otherwise prohibited under part 545 but found to be 
consistent with U.S. policy may be authorized by one of the general 
licenses contained in subpart E or by a specific license issued 
pursuant to the procedures described in subpart D of part 501 of 31 CFR 
chapter V. Penalties for violations of the Regulations are described in 
subpart G of the Regulations.
    The general licenses contained in subpart E include an 
authorization for U.S. financial institutions to debit blocked accounts 
for normal service charges in Sec. 545.504. Subject to the presentation 
of proof satisfactory to the U.S. Customs Service, under Sec. 545.505 
importation will be permitted of certain goods, software, or technology 
(but not services) from the territory of Afghanistan controlled by the 
Taliban that left that territory before the effective date of the 
Executive Order. This authority does not extend to those goods or that 
software or technology owned or controlled by the Taliban or by persons 
whose property or interests in property are blocked pursuant to 
Sec. 545.201.
    Section 545.506 permits the importation into the United States of 
gifts valued at no more than $100 per recipient. Section 545.507 allows 
travelers to enter or depart from the United States with their 
accompanied baggage. Sections 545.508 and 545.509 authorize 
transactions related to telecommunications and mail services. Section 
545.510 permits the importation and exportation of household and 
personal effects.
    Section 545.511 references the provision in Sec. 501.801 of 31 CFR, 
chapter V, permitting the registration of nongovernmental organizations 
involved in humanitarian or religious activities intended to relieve 
human suffering. Registration numbers authorize nongovernmental 
organizations to engage in transactions otherwise prohibited by the 
Taliban (Afghanistan) Sanctions Regulations, including the exportation 
of goods, software, technology, and services to the territory of 
Afghanistan controlled by the Taliban, and the transfer of funds to and 
from the territory of Afghanistan controlled by the Taliban if the 
funds are intended for the purpose of relieving human suffering.
    Section 545.512 grants a general license for payments to U.S. 
persons for obligations that arose prior to the effective date. Section 
545.513 authorizes the provision and exportation of certain legal 
services, provided that receipt of payment for such services is 
specifically licensed. Section 545.514 provides for specific licensing 
of payments for services to aircraft provided by the Taliban in 
connection with overflights or emergency landings. That section also 
indicates that specific licenses may be issued for the exportation to 
the territory of Afghanistan controlled by the Taliban of goods, 
software, technology, and services to ensure safe operation of 
aircraft.
    Section 545.515 permits U.S. persons to perfect and protect 
intellectual property rights in the territory of Afghanistan controlled 
by the Taliban. Section 545.516 permits U.S. financial institutions to 
process funds transfers to or from the territory of Afghanistan 
controlled by the Taliban where such transfers are related to 
transactions exempted from or authorized under the Regulations. Section 
545.517 authorizes provision of certain emergency medical services, 
provided that payment for such services is specifically licensed. 
Section 545.518 allows investment and reinvestment of blocked assets as 
long as immediate benefits do not accrue to persons whose property or 
interests in property are blocked pursuant to Sec. 545.201.
    Section 545.519 indicates the availability of specific licenses to 
allow payments for goods or services exported prior to the effective 
date. Section 545.520 permits noncommercial remittances to or from the 
territory of Afghanistan controlled by the Taliban. Section 545.521 
allows U.S. citizens permanently residing in the territory of 
Afghanistan controlled by the Taliban to engage in transactions related 
to their necessary maintenance and living expenses. Section 545.522 
authorizes U.S. financial institutions to operate accounts for private 
persons in the territory of Afghanistan controlled by the Taliban 
(provided that person's property is not blocked pursuant to 
Sec. 545.201).
    Sections 545.523 and 545.524 permit the extension or renewal of 
letters of credit (by general license) or loans (by specific license). 
Where the State Department has issued visas, Sec. 545.525 permits the 
importation of services and the completion of activities consistent 
with the visas. Section 545.526 allows the importation of goods, 
software, technology or services for diplomatic missions. Section 
545.527 allows importation of diplomatic pouches and their contents.
    In light of the recent passage of the Trade Sanctions Reform and 
Export Enhancement Act of 2000, Title IX of Public Law 106-387 (October 
28, 2000)(the ``Act''), requiring the President to terminate unilateral 
sanctions on the exportation of agricultural commodities and medicine 
and medical devices, section 3 of the Executive Order, permitting the 
commercial sale of agricultural commodities and products, medicine, and 
medical equipment to private persons or nongovernmental entities in the 
territory of Afghanistan controlled by the Taliban, is not being 
addressed in these Regulations. Regulations implementing the Act will 
be issued separately.
    Because the Regulations involve a foreign affairs function, the 
provisions of Executive Order 12866 and the Administrative Procedure 
Act (5 U.S.C. 553) (the ``APA'') requiring notice of proposed 
rulemaking, opportunity for public participation, and delay in 
effective date are inapplicable. However, because of the importance of 
the issues raised by these regulations, this rule is issued in interim 
form and comments will be considered in the development of final 
regulations. Accordingly, the Department encourages interested persons 
who wish to comment to do so at the earliest possible time to permit 
the fullest consideration of their views.
    The period for submission of comments will close February 12, 2001. 
The Department will consider all comments received before the close of 
the comment period in developing final regulations. Comments received 
after the end of the comment period will be

[[Page 2728]]

considered if possible, but their consideration cannot be assured. The 
Department will not accept public comments accompanied by a request 
that a part or all of the submission be treated confidentially because 
of its business proprietary nature or for any other reason. The 
Department will return such comments and materials when submitted by 
regular mail to the person submitting the comments and will not 
consider them in the development of final regulations. In the interest 
of accuracy and completeness, the Department requires comments in 
written form.
    All public comments on these regulations will be a matter of public 
record. Copies of the public record concerning these regulations will 
be made available, not sooner than March 12, 2001, and will be 
obtainable from OFAC's website (http://www.treas.gov/ofac). If that 
service is unavailable, written requests for copies may be sent to: 
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Ave., NW., Washington, DC 20220, Attn: Merete Evans.
    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 and Procedures 
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507), those collections of information have been previously 
approved by the Office of Management and Budget (``OMB'') under control 
number 1505-0164. An agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information unless the 
collection of information displays a valid control number.

List of Subjects

31 CFR Part 501

    Administrative practice and procedure, Banks, banking, Blocking of 
assets, Foreign trade, Reporting and recordkeeping requirements.

31 CFR Part 538

    Administrative practice and procedure, Agricultural commodities, 
Banks, banking, Blocking of assets, Drugs, Exports, Foreign trade, 
Humanitarian aid, Imports, Medical devices, Penalties, Reporting and 
recordkeeping requirements, Specially designated nationals, Sudan, 
Terrorism, Transportation.

31 CFR Part 545

    Administrative practice and procedure, Afghanistan, Agricultural 
commodities, Banks, banking, Blocking of assets, Drugs, Exports, 
Foreign trade, Humanitarian aid, Imports, Medical devices, Penalties 
reporting and recordkeeping requirements, Specially designated 
nationals, Taliban, Transportation.

    For the reasons set forth in the preamble, 31 CFR parts 501 and 538 
are amended and part 545 is added to read as follows:

PART 501--REPORTING AND PROCEDURES REGULATIONS

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

    Authority: 22 U.S.C. 287c; 31 U.S.C. 321(b); 50 U.S.C. 1701-
1706; 50 U.S.C. App. 1-44.

Subpart D--Procedures

    2. Section 501.801 is amended by adding paragraph (c) to read as 
follows:


Sec. 501.801  Licensing.

* * * * *
    (c) Registration of nongovernmental organizations--(1) Purpose of 
registration. For those parts of this chapter specifically authorizing 
the registration of nongovernmental organizations (``NGOs''), 
registration numbers may be issued on a case-by-case basis to NGOs 
involved in humanitarian or religious activities in countries or 
geographic areas subject to economic sanctions pursuant to this chapter 
V. A registration number authorizes certain transactions by or on 
behalf of the registered NGO otherwise prohibited by the specific part 
with respect to which the registration number is issued, including the 
exportation of goods, services, and funds to the country or geographic 
area subject to such part for the purpose of relieving human suffering. 
The transactions authorized for registered NGOs either will be 
specified by the statement of licensing policy in the part under which 
the registration number is issued or by the Office of Foreign Assets 
Control letter issuing the registration number.
    (2) Application information to be supplied. Applications for 
registration numbers should be submitted to the Compliance Programs 
Division, Office of Foreign Assets Control, U.S. Department of the 
Treasury, 1500 Pennsylvania Avenue, NW., Annex, Washington, DC 20220, 
or by facsimile to (202) 622-2426, and must include:
    (i) The organization's name in English, in the language of origin, 
and any acronym or other names used to identify the organization;
    (ii) Address and phone number of the organization's headquarters 
location;
    (iii) Full name in English, in the language of origin, and any 
acronym or other names used, as well as nationality, citizenship, 
current country of residence, place and date of birth for key staff at 
the organization's headquarters, such as the chairman and board 
members, president, director, etc.;
    (iv) Identification of field offices or partner offices elsewhere, 
including addresses, phone numbers, and organizational names used, as 
well as the identification of the senior officer(s) at these locations, 
including the person's name, position, nationality, citizenship, and 
date of birth (names of individuals and organizations shall be provided 
in English, in the language of origin, and shall include any acronym or 
other names used to identify the individuals or organizations);
    (v) Identification of subcontracting organizations, if any, to the 
extent known or contemplated at the time of the application;
    (vi) Existing sources of income, such as official grants, private 
endowments, commercial activities;
    (vii) Financial institutions that hold deposits on behalf of or 
extend lines of credit to the organization (names of individuals and 
organizations shall be provided in English, in the language of origin, 
and shall include any acronym or other names used to identify the 
individuals or organizations);
    (viii) Independent accounting firms, if employed in the production 
of the organization's financial statements (names of individuals and 
organizations shall be provided in English, in the language of origin, 
and shall include any acronym or other names used to identify the 
individuals or organizations);
    (ix) A detailed description of the organization's humanitarian or 
religious activities and projects in countries or geographic areas 
subject to economic sanctions pursuant to this chapter V;
    (x) Most recent official registry documents, annual reports, and 
annual filings with the pertinent government, as applicable; and
    (xi) Names and addresses of organizations to which the applicant 
currently provides or proposes to provide funding, services or material 
support, to the extent known at the time of the vetting, as applicable.
    (3) Use of registration number. Registered NGOs conducting 
transactions authorized by their registrations to support their 
humanitarian or religious activities

[[Page 2729]]

pursuant to any part of this chapter should reference the registration 
number on all payments and funds transfers and on all related 
documentation, including all purchasing, shipping, and financing 
documents.
    (4) Limitations. Registered NGOs are not authorized to make 
remittances from blocked accounts. Registration numbers are not 
transferable and may be revoked or modified at any time at the 
discretion of the Director, Office of Foreign Assets Control. 
Registration numbers do not excuse compliance with any law or 
regulation administered by the Office of Foreign Assets Control or any 
other agency (including reporting requirements) applicable to the 
transaction(s) herein authorized, nor does it release the Registrant or 
third parties from civil or criminal liability for violation of any law 
or regulation.
    (5) Prior numbers. Registration numbers already issued remain in 
effect.

PART 538--SUDANESE SANCTIONS REGULATIONS

    1. The authority citation for part 538 continues to read as 
follows:

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; E.O. 13067, 62 FR 59989, 3 CFR, 1997 Comp., p. 230.

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

    2. Section 538.521 is revised to read as follows:


Sec. 538.521  Registration of nongovernmental organizations for 
humanitarian or religious activities.

    (a) Registration numbers may be issued on a case-by-case basis for 
the registration of nongovernmental organizations involved in 
humanitarian or religious activities in Sudan, authorizing transactions 
by such organizations otherwise prohibited by this part, including the 
exportation of services, goods, software, or technology to Sudan and 
the transfer of funds to and from Sudan for the purpose of relieving 
human suffering. Applicants for registration numbers must comply with 
the requirements of Sec. 501.801(c), 31 CFR chapter V.
    (b) This section does not authorize transfers from blocked 
accounts.


    Note to Sec. 538.521: Registration does not excuse a U.S. person 
from compliance with other applicable U.S. laws governing the 
exportation or reexportation of U.S.-origin goods, software, or 
technology (including technical data). See, e.g., the Export 
Administration Regulations administered by the U.S. Department of 
Commerce (15 CFR parts 730-774).


    1. Part 545 is added to read as follows:

PART 545--TALIBAN (AFGHANISTAN) SANCTIONS REGULATIONS

Subpart A--Relation of This Part to Other Laws and Regulations
Sec.
545.101  Relation of this part to other laws and regulations.
Subpart B--Prohibitions
545.201  Prohibited transactions involving blocked property.
545.202  Effect of transfers violating the provisions of this part.
545.203  Holding of funds in interest-bearing accounts; investment 
and reinvestment.
545.204  Prohibited exportation, reexportation, sale, or supply of 
goods, software, technology, or services.
545.205  Prohibited importation of goods, software, technology, or 
services.
545.206  Evasions; attempts; conspiracies.
545.207  Expenses of maintaining blocked property; liquidation of 
blocked accounts.
545.208  Exempt transactions.
Subpart C--General Definitions
545.301  Blocked account; blocked property.
545.302  Effective date.
545.303  Entity.
545.304  Importation into the United States.
545.305  Information or informational materials.
545.306  Interest.
545.307  Licenses; general and specific.
545.308  Person.
545.309  Property; property interest.
545.310  The Taliban.
545.311  Territory of Afghanistan controlled by the Taliban.
545.312  Transfer.
545.313  United States.
545.314  U.S. financial institution.
545.315  United States person; U.S. person.
Subpart D--Interpretations
545.401  Reference to amended sections.
545.402  Effect of amendment.
545.403  Transactions incidental to a licensed transaction 
authorized.
545.404  Transshipment or transit through the United States 
prohibited.
545.405  [Reserved].
545.406  Exportation of services; performance of service contracts; 
legal services.
545.407  Services performed in the territory of Afghanistan 
controlled by the Taliban.
545.408  Offshore transactions.
545.409  Payments from blocked accounts to U.S. exporters and for 
other obligations prohibited.
545.410  Acquisition of instruments including bankers acceptances.
545.411  Exportation to third countries; transshipments.
545.412  Release of goods originating in the territory of 
Afghanistan controlled by the Taliban from a bonded warehouse or 
foreign trade zone.
545.413  Importation of goods from third countries; transshipments.
545.414  Loans or extensions of credit.
545.415  Payments from blocked accounts to U.S. exporters and for 
other obligations prohibited.
545.416  Termination and acquisition of an interest in blocked 
property.
545.417  Setoffs prohibited.
Subpart E--Licenses, Authorizations and Statements of Licensing Policy
545.501  Effect of license or authorization.
545.502  Exclusion from licenses.
545.503  Payments and transfers to blocked accounts in U.S. 
financial institutions.
545.504  Entries in certain accounts for normal service charges 
authorized.
545.505  Importation of goods, software, or technology exported from 
the territory of Afghanistan controlled by the Taliban prior to July 
6, 1999.
545.506  Importation of certain gifts authorized.
545.507  Accompanied baggage authorized.
545.508  Transactions related to telecommunications authorized.
545.509  Transactions related to mail authorized.
545.510  Importation of household and personal effects authorized.
545.511  Registration of nongovernmental organizations for 
humanitarian or religious activities.
545.512  Payment of obligations to U.S. persons authorized.
545.513  Provision of certain legal services authorized.
545.514  Payments for services rendered by the Taliban to aircraft.
545.515  Certain transactions related to patents, trademarks, and 
copyrights authorized.
545.516  Certain payments to or from the territory of Afghanistan 
controlled by the Taliban.
545.517  Authorization of emergency medical services.
545.518  Investment and reinvestment of certain funds.
545.519  Payments and transfers authorized for goods and services 
exported to the territory of Afghanistan controlled by the Taliban 
prior to the effective date.
545.520  Noncommercial personal remittances to and from the 
territory of Afghanistan controlled by the Taliban.
545.521  Transactions related to U.S. citizens residing in the 
territory of Afghanistan controlled by the Taliban.
545.522  Operation of accounts.
545.523  Extensions or renewals of letters of credit authorized.
545.524  Extensions or renewals of loans.
545.525  Certain services related to participation in various events 
and activities authorized.
545.526  Certain imports for diplomatic or official personnel 
authorized.
545.527  Diplomatic pouches.
Subpart F--Reports
545.601  Records and reports.
Subpart G--Penalties
545.701  Penalties.
545.702  Prepenalty notice.
545.703  Response to prepenalty notice; informal settlement.
[[Page 2730]]

545.704  Penalty imposition or withdrawal.
545.705  Administrative collection; referral to United States 
Department of Justice.
Subpart H--Procedures
545.801  Procedures.
545.802   Delegation by the Secretary of the Treasury.
Subpart I--Paperwork Reduction Act
545.901  Paperwork Reduction Act notice.

    Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 
1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 
E.O. 13129, 64 FR 36759, 3 CFR, 1999 Comp., p. 200.

Subpart A--Relation of This Part to Other Laws and Regulations


Sec. 545.101  Relation of this part to other laws and regulations.

    This part is separate from, and independent of, the other parts of 
this chapter, with the exception of part 501 of this chapter, the 
recordkeeping and reporting requirements and license application and 
other procedures of which apply to this part. Actions taken pursuant to 
part 501 of this chapter with respect to the prohibitions contained in 
this part are considered actions taken pursuant to this part. Differing 
foreign policy and national security circumstances may result in 
differing interpretations of similar language among the parts of this 
chapter. No license or authorization contained in or issued pursuant to 
those other parts authorizes any transaction prohibited by this part. 
No license or authorization contained in or issued pursuant to any 
other provision of law or regulation authorizes any transaction 
prohibited by this part. No license contained in or issued pursuant to 
this part relieves the involved parties from complying with any other 
applicable laws or regulations.

Subpart B--Prohibitions


Sec. 545.201  Prohibited transactions involving blocked property.

    (a) Except as otherwise authorized by regulations, orders, 
directives, rulings, instructions, licenses, or otherwise, and 
notwithstanding any contract entered into or any license or permit 
granted prior to the effective date, property or property interests of 
the following persons that are in the United States, that hereafter 
come within the United States, or that are or hereafter come within the 
possession or control of U.S. persons are blocked, and may not be 
transferred, paid, exported, withdrawn, or otherwise dealt in:
    (1) The Taliban; and
    (2) Persons determined by the Secretary of the Treasury, in 
consultation with the Secretary of State and the Attorney General:
    (i) To be owned or controlled by, or to act for or on behalf of, 
the Taliban; or
    (ii) To provide financial, material, or technological support for, 
or services in support of, any of the foregoing.

    Note to paragraph (a) of Sec. 545.201. Please refer to the 
appendices at the end of this chapter V for listings of persons 
designated pursuant to this section. Section 501.807 of this chapter 
V sets forth the procedures to be followed by persons seeking 
administrative reconsideration of their designation or who wish to 
assert that the circumstances resulting in designation no longer 
apply. Similarly, when a transaction results in the blocking of 
funds at a financial institution pursuant to this section and a 
party to the transaction believes the funds to have been blocked due 
to mistaken identity, that party may seek to have such funds 
unblocked pursuant to the administrative procedures set forth in 
Sec. 501.806 of this chapter.

    (b) Except as otherwise authorized, and notwithstanding any 
contract entered into or any license or permit granted prior to the 
effective date, any transaction or dealing by U.S. persons or within 
the United States in property or interests in property blocked pursuant 
to paragraph (a) of this section is prohibited, including the making or 
receiving of any contribution of funds, goods, or services to or for 
the benefit of the Taliban or persons designated pursuant to 
Sec. 545.201(a).
    (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 any person whose property or 
interests in property are blocked pursuant to this section 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 
January 11, 2001) the registered or inscribed owner of any such 
security may have or might appear to have assigned, transferred, or 
otherwise disposed of the security.


Sec. 545.202  Effect of transfers violating the provisions of this 
part.

    (a) Any transfer after the effective date that is in violation of 
any provision of this part or of any regulation, order, directive, 
ruling, instruction, or license issued pursuant to this part, and that 
involves any property or interest in property blocked pursuant to 
Sec. 545.201(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 Sec. 545.201(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

[[Page 2731]]

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) of Sec. 545.202: 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) 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 of Sec. 545.201 there existed an interest of a 
person whose property or interests in property are blocked pursuant to 
Sec. 545.201(a).


Sec. 545.203  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 Sec. 545.201(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 Sec. 545.201(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 Sec. 545.201(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 Sec. 545.201(a). However, the Office of Foreign Assets 
Control may issue licenses permitting or directing such sales 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 persons whose property or interests in property 
are blocked pursuant to Sec. 545.201(a), nor may their holder cooperate 
in or facilitate the pledging or other attempted use as collateral of 
blocked funds or other assets.


Sec. 545.204  Prohibited exportation, reexportation, sale, or supply of 
goods, software, technology, or services.

    Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, the exportation, reexportation, sale, or supply, directly or 
indirectly, from the United States, or by a U.S. person, wherever 
located, of any goods, software, technology (including technical data), 
or services to the territory of Afghanistan controlled by the Taliban 
or to the Taliban or to persons whose property or interests in property 
are blocked pursuant to Sec. 545.201 is prohibited.


Sec. 545.205  Prohibited importation of goods, software, technology, or 
services.

    Except as otherwise authorized, and notwithstanding any contract 
entered into or any license or permit granted prior to the effective 
date, the importation into the United States of any goods, software, 
technology, or services owned or controlled by the Taliban or persons 
whose property or interests in property are blocked pursuant to 
Sec. 545.201 or from the territory of Afghanistan controlled by the 
Taliban is prohibited.


Sec. 545.206  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.


Sec. 545.207  Expenses of maintaining blocked property; liquidation of 
blocked account.

    (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 12:01 a.m., Eastern Daylight Time, July 6, 1999, 
all expenses incident to the maintenance of physical property blocked 
pursuant to Sec. 545.201 shall be the responsibility of the owners or 
operators of such property, which expenses shall not be met from 
blocked funds.
    (b) Property blocked pursuant to Sec. 545.201 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.


Sec. 545.208  Exempt transactions.

    (a) Personal communications. The prohibitions contained in this 
part do not apply to any postal, telegraphic, telephonic, or other 
personal communication, which does not involve the transfer of anything 
of value.
    (b) Information or informational materials. (1) The importation 
from any country and the exportation to any country of information or 
informational materials as defined in Sec. 545.305, whether commercial 
or otherwise, regardless of format or medium of transmission, are 
exempt from the prohibitions of this part.

[[Page 2732]]

    (2) This section does not exempt from regulation or authorize 
transactions related to information and informational materials not 
fully created and in existence at the date of the transactions, or to 
the substantive or artistic alteration or enhancement of informational 
materials, or to the provision of marketing and business consulting 
services. Such prohibited transactions include, but are not limited to, 
payment of advances for information and informational materials not yet 
created and completed (with the exception of prepaid subscriptions for 
widely-circulated magazines and other periodical publications); 
provision of services to market, produce or co-produce, create, or 
assist in the creation of information or informational materials; and, 
with respect to information or informational materials imported from 
persons whose property and interests in property are blocked pursuant 
to Sec. 545.201 or from the territory of Afghanistan controlled by the 
Taliban, payment of royalties with respect to income received for 
enhancements or alterations made by U.S. persons to such information or 
informational materials.
    (3) This section does not exempt or authorize transactions incident 
to the exportation of software subject to the Export Administration 
Regulations, 15 CFR parts 730-774, or to the exportation of goods, 
technology or software, or to the provision, sale, or leasing of 
capacity on telecommunications transmission facilities (such as 
satellite or terrestrial network connectivity) for use in the 
transmission of any data. The exportation of such items or services and 
the provision, sale, or leasing of such capacity or facilities to a 
person whose property or interests in property are blocked pursuant to 
Sec. 545.201 are prohibited.
    (c) Travel. The prohibitions contained in this part do not apply to 
transactions ordinarily incident to travel to or from any country, 
including exportation or importation of accompanied baggage for 
personal use, maintenance within any country including payment of 
living expenses and acquisition of goods or services for personal use, 
and arrangement or facilitation of such travel including nonscheduled 
air, sea, or land voyages.
    (d) Official Business. The prohibitions contained in this part do 
not apply to transactions for the conduct of the official business of 
the United States Government or the United Nations by employees 
thereof.
    (e) Journalistic Activity. The prohibitions contained in this part 
do not apply to transactions in the territory of Afghanistan controlled 
by the Taliban for journalistic activity by persons regularly employed 
in such capacity by a news-gathering organization.
    (f) Humanitarian donations. The prohibitions contained in this part 
do not apply to donations by U.S. persons of articles, such as food, 
clothing, and medicine, intended to be used to relieve human suffering.

Subpart C--General Definitions


Sec. 545.301  Blocked account; blocked property.

    The terms blocked account and blocked property, shall mean any 
account or property subject to the prohibitions in Sec. 545.201 held in 
the name of the Taliban or persons whose property or interests in 
property are blocked pursuant to Sec. 545.201, or in which the Taliban 
or persons whose property or interests in property are blocked pursuant 
to Sec. 545.201 have an interest, and with respect to which payments, 
transfers, exportations, withdrawals, or other dealings may not be made 
or effected except pursuant to an authorization or license from the 
Office of Foreign Assets Control expressly authorizing such action.


Sec. 545.302  Effective date.

    The term effective date refers to the effective date of the 
applicable prohibitions and directives contained in this part which is 
12:01 a.m., Eastern Daylight Time, on July 6, 1999.


Sec. 545.303  Entity.

    The term entity means a partnership, association, corporation, or 
other organization, group, or subgroup.


Sec. 545.304  Importation into the United States.

    (a) With respect to goods, software, or technology, the term 
importation into the United States means the bringing of any goods, 
software, or technology into the United States. However, with respect 
to goods, software or technology being transported by vessel, 
importation into the United States means the bringing of any goods or 
technology into the United States with the intent to unlade. See also 
Sec. 545.404.
    (b) With respect to services, the term importation into the United 
States means the receipt in the United States of services or receipt in 
the United States of the benefit of services wherever such services may 
be performed. The benefit of services is received in the United States 
if the services are:
    (1) Performed on behalf of or for the benefit of a person located 
in the United States;
    (2) Received by a person located in the United States;
    (3) Received by a person located outside the United States on 
behalf of or for the benefit of an entity organized in the United 
States; or
    (4) Received by an individual temporarily located outside the 
United States for the purpose of obtaining such services for use in the 
United States.


Sec. 545.305  Information or informational materials.

    (a) For purposes of this part, the term information or 
informational materials includes, but is not limited to publications, 
films, posters, phonograph records, photographs, microfilms, 
microfiche, tapes, compact disks, CD ROMs, artworks, and news wire 
feeds.

    Note to Sec. 545.305(a). To be considered information or 
informational materials, artworks must be classified under chapter 
heading 9701, 9702, or 9703 of the Harmonized Tariff Schedule of the 
United States.

    (b) The term information and informational materials with respect 
to United States exports does not include items:
    (1) That were, as of April 30, 1994, or that thereafter become, 
controlled for export pursuant to section 5 of the Export 
Administration Act of 1979, 50 U.S.C. App. 2401-2420 (1979) (the 
``EAA''), or section 6 of the EAA to the extent that such controls 
promote the nonproliferation or antiterrorism policies of the United 
States; or
    (2) With respect to which acts are prohibited by 18 U.S.C. chapter 
37.


Sec. 545.306  Interest.

    Except as otherwise provided in this part, the term interest when 
used with respect to property (e.g., ``an interest in property'') means 
an interest of any nature whatsoever, direct or indirect.


Sec. 545.307  Licenses; general and specific.

    (a) Except as otherwise specified, 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.
    (c) The term specific license means any license or authorization 
not set forth in subpart E of this part but issued pursuant to this 
part.

    Note to Sec. 545.307: See Sec. 501.801 of this chapter on 
licensing procedures.

Sec. 545.308  Person.

    The term person means an individual or entity.

[[Page 2733]]

Sec. 545.309  Property; property interest.

    The terms property and property interest include, but are not 
limited to, money, checks, drafts, bullion, bank deposits, savings 
accounts, debts, indebtedness, obligations, notes, guarantees, 
debentures, stocks, bonds, coupons, any other financial instruments, 
bankers acceptances, mortgages, pledges, liens or other rights in the 
nature of security, warehouse receipts, bills of lading, trust 
receipts, bills of sale, any other evidences of title, ownership or 
indebtedness, letters of credit and any documents relating to any 
rights or obligations thereunder, powers of attorney, goods, wares, 
merchandise, chattels, stocks on hand, ships, goods on ships, real 
estate mortgages, deeds of trust, vendors' sales agreements, land 
contracts, leaseholds, ground rents, real estate and any other interest 
therein, options, negotiable instruments, trade acceptances, royalties, 
book accounts, accounts payable, judgments, patents, trademarks or 
copyrights, insurance policies, safe deposit boxes and their contents, 
annuities, pooling agreements, services of any nature whatsoever, 
contracts of any nature whatsoever, and any other property, real, 
personal, or mixed, tangible or intangible, or interest or interests 
therein, present, future or contingent.


Sec. 545.310  The Taliban.

    (a) For purposes of this part, the term the Taliban includes:
    (1) The political/military entity headquartered in Kandahar, 
Afghanistan that as of July 4, 1999, exercised de facto control over 
the territory of Afghanistan, described in Sec. 545.310(a);
    (2) Its agencies and instrumentalities;
    (3) The Taliban leaders listed in the Annex to Executive Order 
13129 (see appendix A of this chapter) and such additional leaders as 
may be designated by the Secretary of State in consultation with the 
Secretary of the Treasury and the Attorney General in accordance with 
section 4(c) of Executive Order 13129; and
    (4) Persons designated pursuant to Sec. 545.201(a)(2).

    Note to Sec. 545.310. The Taliban is also known as the 
``Taleban,'' ``Islamic Movement of Taliban,'' ``the Taliban Islamic 
Movement,'' ``Talibano Islami Tahrik,'' and ``Tahrike Islami'a 
Taliban.''

Sec. 545.311  Territory of Afghanistan controlled by the Taliban.

    The term territory of Afghanistan controlled by the Taliban means 
the territory referred to as the ``Islamic Emirate of Afghanistan,'' 
known in Pashtun as ``de Afghanistan Islami Emarat'' or in Dari as 
``Emarat Islami-e Afghanistan,'' including:
    (a) As of July 4, 1999, the following provinces of the country of 
Afghanistan: Kandahar, Farah, Helmund, Nimruz, Herat, Badghis, Ghowr, 
Oruzghon, Zabol, Paktiha, Ghazni, Nangarhar, Lowgar, Vardan, Faryab, 
Jowlan, Balkh, and Paktika; and
    (b) Thereafter, the description of the term territory of 
Afghanistan controlled by the Taliban may be modified by the Secretary 
of State in consultation with the Secretary of the Treasury and the 
Attorney General.

    Note to Sec. 545.311. The Secretary of State, in consultation 
with the Secretary of the Treasury and the Attorney General, has 
added the City of Kabul to the territory of Afghanistan controlled 
by the Taliban. (See Public Notice 3151 of October 21, 1999, 64 FR 
58879, November 1, 1999).

Sec. 545.312  Transfer.

    The term transfer means any actual or purported act or transaction, 
whether or not evidenced by writing, and whether or not done or 
performed within the United States, the purpose, intent, or effect of 
which is to create, surrender, release, convey, transfer, or alter, 
directly or indirectly, any right, remedy, power, privilege, or 
interest with respect to any property and, without limitation upon the 
foregoing, shall include the making, execution, or delivery of any 
assignment, power, conveyance, check, declaration, deed, deed of trust, 
power of attorney, power of appointment, bill of sale, mortgage, 
receipt, agreement, contract, certificate, gift, sale, affidavit, or 
statement; the making of any payment; the setting off of any obligation 
or credit; the appointment of any agent, trustee, or fiduciary; the 
creation or transfer of any lien; the issuance, docketing, filing, or 
levy of or under any judgment, decree, attachment, injunction, 
execution, or other judicial or administrative process or order, or the 
service of any garnishment; the acquisition of any interest of any 
nature whatsoever by reason of a judgment or decree of any foreign 
country; the fulfillment of any condition; the exercise of any power of 
appointment, power of attorney, or other power; or the acquisition, 
disposition, transportation, importation, exportation, or withdrawal of 
any security.


Sec. 545.313  United States.

    The term United States means the United States, its territories and 
possessions, and all areas under the jurisdiction or authority thereof.


Sec. 545.314  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, or purchasing or selling foreign exchange, 
securities, commodity futures or options, or procuring purchasers and 
sellers thereof, as principal or agent; including but not limited to, 
depository institutions, banks, savings banks, trust companies, 
securities brokers and dealers, commodity futures and options brokers 
and dealers, forward contract and foreign exchange merchants, 
securities and commodities exchanges, clearing corporations, investment 
companies, employee benefit plans, and U.S. holding companies, U.S. 
affiliates, or U.S. subsidiaries of any of the foregoing. This terms 
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.


Sec. 545.315  United States person; U.S. person.

    The term United States person or U.S. person means any United 
States citizen, permanent resident alien, entity organized under the 
laws of the United States (including foreign branches), or any person 
in the United States.

Subpart D--Interpretations


Sec. 545.401  Reference to amended sections.

    Except as otherwise specified, reference to any provision in or 
appendix to this part or chapter or to any regulation, ruling, order, 
instruction, direction, or license issued pursuant to this part refers 
to the same as currently amended.


Sec. 545.402  Effect of amendment.

    Unless otherwise specifically provided, any amendment, 
modification, or revocation of any provision in or appendix to this 
part or chapter or of any order, regulation, ruling, instruction, or 
license issued by or under the direction of the Director of the Office 
of Foreign Assets Control does not affect any act done or omitted, or 
any civil or criminal suit or proceeding commenced or pending prior to 
such amendment, modification, or revocation. All penalties, 
forfeitures, and liabilities under any such order, regulation, ruling, 
instruction, or license continue and may be enforced as if such 
amendment, modification, or revocation had not been made.

[[Page 2734]]

Sec. 545.403  Transactions incidental to a licensed transaction 
authorized.

    Any transaction ordinarily incident to a licensed transaction and 
necessary to give effect thereto is also authorized, except:
    (a) A transaction involving a person whose property or interests in 
property are blocked pursuant to Sec. 545.201, or involving a debit to 
a blocked account or a transfer of blocked property, not explicitly 
authorized within the terms of the license; and
    (b) Distribution or leasing in the territory of Afghanistan 
controlled by the Taliban of any containers or similar goods owned or 
controlled by U.S. persons after the performance of transportation 
services to the territory of Afghanistan controlled by the Taliban.


Sec. 545.404  Transshipment or transit through the United States 
prohibited.

    Except as otherwise specified:
    (a) The prohibitions in Secs. 545.201 and 545.204 apply to the 
importation into the United States, for transshipment or transit, of 
foreign goods which are intended or destined for the Taliban or the 
territory of Afghanistan controlled by the Taliban.
    (b) The prohibitions in Secs. 545.201 and 545.205 apply to the 
importation into the United States, for transshipment or transit to 
third countries, of goods owned or controlled by the Taliban or from 
the territory of Afghanistan controlled by the Taliban which are 
intended or destined for third countries.
    (c) Goods, software, or technology in which the Taliban have an 
interest that are imported into or transshipped through the United 
States are blocked pursuant to Sec. 545.201.

    Note to Sec. 545.404: See Sec. 545.304 for the definition of the 
term importation into the United States.

Sec. 545.405  [Reserved].


Sec. 545.406  Exportation of services; performance of service 
contracts; legal services.

    (a) The prohibition on transactions involving blocked property and 
the exportation of services contained in Secs. 545.201 and 545.204 
applies to services performed on behalf of the Taliban or persons whose 
property or interests in property are blocked pursuant to Sec. 545.201 
or where the benefit of such services is otherwise received in the 
territory of Afghanistan controlled by the Taliban, when such services 
are performed:
    (1) In the United States;
    (2) Outside the United States by a U.S. person, including by an 
overseas branch of an entity located in the United States.
    (b) The benefit of services performed anywhere in the world on 
behalf of the Taliban, including persons whose property or interests in 
property are blocked pursuant to Sec. 545.201, is presumed to have been 
received in the territory of Afghanistan controlled by the Taliban.

    Note to Sec. 545.406. See Sec. 545.513 with regard to provision 
of certain legal services and Sec. 545.516 with regard to the 
provision of certain financial services.

Sec. 545.407  Services performed in the territory of Afghanistan 
controlled by the Taliban.

    The prohibitions on transactions involving blocked property and 
certain transactions or dealings in that property and the importation 
into the United States of services contained in Secs. 545.201 and 
545.205, respectively, apply to services performed in the territory of 
Afghanistan controlled by the Taliban or by the Taliban, wherever 
located, when the benefit of such services is received in the United 
States or by a U.S. person outside the United States. See Sec. 545.304 
for the definition of the term importation into the United States and a 
description of circumstances in which the benefit of services is 
considered to be received in the United States.


Sec. 545.408  Offshore transactions.

    (a) The prohibitions contained in Sec. 545.201 apply:
    (1) To transactions by any U.S. person in a location outside the 
United States with respect to property in which the U.S. person knows, 
or has reason to know, that the Taliban or persons whose property or 
interests in property are blocked pursuant to Sec. 545.201 have or have 
had an interest since the effective date; and
    (2) With respect to goods, software, technology, or services which 
the U.S. person knows, or has reason to know, are from the territory of 
Afghanistan controlled by the Taliban.
    (b) Prohibited transactions include, but are not limited to:
    (1) Importation into or exportation from locations outside the 
United States of goods, software, technology or services owned or 
controlled by the Taliban or persons whose property or interests in 
property are blocked pursuant to Sec. 545.201; or
    (2) Purchasing, selling, financing, swapping, insuring, 
transporting, lifting, storing, incorporating, transforming, brokering 
or otherwise dealing in such blocked goods, software, technology, or 
services.
    (c) Example. A U.S. person may not, within the United States or 
abroad, purchase, sell, finance, insure, transport, act as a broker for 
the sale or transport of, or otherwise deal in goods (such as carpets, 
fruits, or nuts), owned or controlled by the Taliban or by persons 
whose property or interests in property are blocked pursuant to 
Sec. 545.201 or which comes from the territory of Afghanistan 
controlled by the Taliban.


Sec. 545.409  Payments from blocked accounts to U.S. exporters and for 
other obligations prohibited.

    No debits may be made to a blocked account to pay obligations to 
U.S. persons or other persons, including payment for goods, software, 
technology, or services exported prior to the effective date, except as 
authorized pursuant to this part.


Sec. 545.410  Acquisition of instruments including bankers acceptances.

    No U.S. persons may acquire or deal in any obligation, including 
bankers acceptances and debt of or guaranteed by a person whose 
property or interests in property are blocked pursuant to Sec. 545.201, 
in cases in which the documents evidencing the obligation indicate, or 
the U.S. person has actual knowledge, that the underlying transaction 
is in violation of Secs. 545.201 and 545.204 through 545.206. This 
interpretation does not apply to obligations arising from an underlying 
transaction licensed or otherwise authorized pursuant to this part.


Sec. 545.411  Exportation to third countries; transshipments.

    Except as otherwise specified, exportation of goods, software, or 
technology from the United States to third countries is prohibited if 
the exporter knows, or has reason to know, that the goods, software, or 
technology are intended for reexportation or transshipment to the 
Taliban, to persons whose property or interests in property are blocked 
pursuant to Sec. 545.201, or to the territory of Afghanistan controlled 
by the Taliban, including passage through, or storage in, intermediate 
destinations.


Sec. 545.412  Release of goods originating in the territory of 
Afghanistan controlled by the Taliban from a bonded warehouse or 
foreign trade zone.

    Section 545.205 does not prohibit the release from a bonded 
warehouse or foreign trade zone of goods originating in the territory 
of Afghanistan controlled by the Taliban imported into a bonded 
warehouse or foreign trade zone either prior to the effective date or 
in a transaction authorized pursuant to this part after the effective 
date.


[[Page 2735]]


    Note to Sec. 545.412: Property in which the Taliban or persons 
whose property or interests in property are blocked pursuant to 
Sec. 545.201 have an interest may not be released unless authorized 
or licensed by the Office of Foreign Assets Control.

Sec. 545.413  Importation of goods from third countries; 
transshipments.

    (a) Importation into the United States from third countries of 
goods containing raw materials or components originating in the 
territory of Afghanistan controlled by the Taliban is not prohibited if 
those raw materials or components have been incorporated into 
manufactured products or otherwise substantially transformed in a third 
country.
    (b) Importation into the United States of goods originating in the 
territory of Afghanistan controlled by the Taliban that have been 
transshipped through a third country without being incorporated into 
manufactured products or otherwise substantially transformed in a third 
country is prohibited.


Sec. 545.414  Loans or extensions of credit.

    (a) The prohibitions in Secs. 545.201 and 545.204 apply to loans or 
extensions of credit to a person in the territory of Afghanistan 
controlled by the Taliban, including overdraft protection on checking 
accounts, and the unauthorized renewal or rescheduling of credits or 
loans in existence as of 12:01 a.m., Eastern Daylight Time, July 6, 
1999, whether by affirmative action or operation of law.
    (b) The prohibitions in Secs. 545.201 and 545.204 apply to 
financial services including loans or credits extended in any currency.


Sec. 545.415  Payments from blocked accounts to U.S. exporters and for 
other obligations prohibited.

    Pursuant to Sec. 545.201, no debits may be made to a blocked 
account to pay obligations to U.S. persons or other persons, including 
payment for goods, technology or services exported prior to the 
effective date, except as authorized pursuant to this part.


Sec. 545.416  Termination and acquisition of an interest in blocked 
property.

    (a) Whenever a transaction licensed or authorized by or pursuant to 
this part results in the transfer of property (including any property 
interest) away from a person whose property or interests in property 
are blocked pursuant to Sec. 545.201, such property shall no longer be 
deemed to be property blocked pursuant to Sec. 545.201, unless there 
exists in the property another interest that is blocked pursuant to 
Sec. 545.201 or any other part of this chapter, the transfer of which 
has not been effected pursuant to license or other authorization.
    (b) Unless otherwise specifically provided in a license or 
authorization issued pursuant to this part, if property (including any 
property interest) is transferred or attempted to be transferred to a 
person whose property or interests in property are blocked pursuant to 
Sec. 545.201, such property shall be deemed to be property in which 
that person has an interest and therefore blocked.


Sec. 545.417  Setoffs prohibited.

    A setoff against blocked property (including a blocked account), 
whether by a U.S. bank or other U.S. person, is a prohibited transfer 
under Sec. 545.201 if effected after the effective date.

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


Sec. 545.501  Effect of license or authorization.

    (a) No license or other authorization contained in this part, or 
otherwise issued by or under the direction of the Director of the 
Office of Foreign Assets Control, authorizes or validates any 
transaction effected prior to the issuance of the license, unless 
specifically provided in such licenses or authorization.
    (b) No regulation, ruling, instruction, or license authorizes any 
transaction prohibited under this part unless the regulation, ruling, 
instruction or license is issued by the Office of Foreign Assets 
Control and specifically refers to this part. No regulation, ruling, 
instruction, or license referring to this part shall be deemed to 
authorize any transaction prohibited by any provision of this chapter 
unless the regulation, ruling, instruction, or license specifically 
refers to such provision.
    (c) Any regulation, ruling, instruction, or license authorizing any 
transaction otherwise prohibited under this part has the effect of 
removing a prohibition contained in this part from the transaction, but 
only to the extent specifically stated by its terms. Unless the 
regulation, ruling, instruction, or license otherwise specifies, such 
an authorization does not create any right, duty, obligation, claim, or 
interest in, or with respect to, any property which would not otherwise 
exist under ordinary principles of law.


Sec. 545.502  Exclusion from licenses.

    The Director of the Office of Foreign Assets Control reserves the 
right to exclude any person, property, or transaction from the 
operation of any license or from the privileges conferred by any 
license. The Director of the Office of Foreign Assets Control also 
reserves the right to restrict the applicability of any license to 
particular persons, property, transactions, or classes thereof. Such 
actions are binding upon all persons receiving actual or constructive 
notice of the exclusions or restrictions.


Sec. 545.503  Payments and transfers to blocked accounts in U.S. 
financial institutions.

    Any payment of funds or transfer of credit in which the Taliban or 
a person whose property or interests in property are blocked pursuant 
to Sec. 545.201 has any interest, that comes within the possession or 
control of a U.S. financial institution, must be blocked in an account 
on the books of that financial institution. A transfer of funds or 
credit by a U.S. financial institution between blocked accounts in its 
branches or offices is authorized, provided that no transfer is made 
from an account within the United States to an account held outside the 
United States, and further provided that a transfer from a blocked 
account may only be made to another blocked account held in the same 
name.


    Note to Sec. 545.503. Please refer to Sec. 501.603 of this 
chapter for mandatory reporting requirements regarding financial 
transfers. See also Sec. 545.203 concerning the obligation to hold 
blocked funds in interest bearing accounts.

Sec. 545.504  Entries in certain accounts for normal service charges 
authorized.

    (a) A U.S. financial institution is authorized to debit any blocked 
account held at that financial institution in payment or reimbursement 
for normal service charges owed it by the owner of that blocked 
account.
    (b) As used in this section, the term normal service charge shall 
include charges in payment or reimbursement for interest due; cable, 
telegraph, internet, or telephone charges; postage costs; custody fees; 
small adjustment charges to correct bookkeeping errors; and, but not by 
way of limitation, minimum balance charges, notary and protest fees, 
and charges for reference books, photocopies, credit reports, 
transcripts of statements, registered mail, insurance, stationery and 
supplies, and other similar items.


Sec. 545.505  Importation of goods, software, or technology exported 
from the territory of Afghanistan controlled by the Taliban prior to 
July 6, 1999.

    (a) Except for the persons and property described in paragraph (c) 
below, importation of goods, software,

[[Page 2736]]

or technology from the territory of Afghanistan controlled by the 
Taliban is authorized provided that:
    (1) The applicant submits proof satisfactory to the U.S. Customs 
Service that the goods, software, or technology were exported from the 
territory of Afghanistan controlled by the Taliban before the effective 
date; and
    (2) The importation is not otherwise prohibited by U.S. law.


    Note to Sec. 545.505(a). The general license in Sec. 545.505(a) 
does not extend to services.

    (b) The type of evidence that would constitute proof satisfactory 
to the U.S. Customs Service of the location of goods, software, or 
technology outside the territory of Afghanistan controlled by the 
Taliban before the effective date may vary depending on the facts of a 
particular case. However, independent corroborating documentary 
evidence issued and certified by a disinterested party normally will be 
required. This might include contracts, insurance documents, shipping 
documents, warehouse receipts, and appropriate customs documents, 
accompanied by a certification of an insurance agent, warehouse agent, 
or other appropriate person, identifying with particularity the goods 
sought to be imported and attesting that the goods concerned were 
located outside the territory of Afghanistan controlled by the Taliban 
at a time prior to the effective date. In general, affidavits, 
statements and other documents prepared by the applicant or other 
interested parties will not, by themselves, constitute satisfactory 
proof.
    (c) The authorization in paragraph (a) above, shall not apply to 
any goods, software, or technology in which the Taliban or persons 
whose property or interests in property are blocked pursuant to 
Sec. 545.201 have any interest.


Sec. 545.506  Importation of certain gifts authorized.

    The importation into the United States of goods from the territory 
of Afghanistan controlled by the Taliban or from a person whose 
property or interests in property are blocked pursuant to Sec. 545.201 
is authorized for goods sent as gifts to persons provided that:
    (a) The value of a gift is not more than $100 per recipient;
    (b) The goods are of a type and in quantities normally given as 
gifts between individuals; and
    (c) The goods are not controlled for chemical and biological 
weapons (CB), missile technology (MT), national security (NS), or 
nuclear proliferation (NP) (see Commerce Control List, 15 CFR part 774, 
supplement No. 1, of the Export Administration Regulations).


Sec. 545.507  Accompanied baggage authorized.

    (a) Persons entering the United States directly or indirectly from 
the territory of Afghanistan controlled by the Taliban are authorized 
to import into the United States accompanied baggage normally incident 
to travel.
    (b) Persons leaving the United States for the territory of 
Afghanistan controlled by the Taliban are authorized to export from the 
United States accompanied baggage normally incident to travel.
    (c) For purposes of this section, the term accompanied baggage 
normally incident to travel includes only baggage that accompanies the 
traveler on the same aircraft, train, or vehicle, and includes only 
articles that are necessary for personal use incident to travel, that 
are not intended for any other person or for sale, and that are not 
otherwise prohibited from importation or exportation under applicable 
United States laws.


Sec. 545.508  Transactions related to telecommunications authorized.

    All transactions ordinarily incident to the receipt or transmission 
of telecommunications involving the territory of Afghanistan controlled 
by the Taliban are authorized. This section does not authorize the 
provision, sale, or lease to the Taliban, or to persons whose property 
or interests in property are blocked pursuant to Sec. 545.201, or to 
the territory of Afghanistan controlled by the Taliban, of 
telecommunications equipment or technology; nor does it authorize the 
provision, sale, or leasing of capacity on telecommunications 
transmission facilities (such as satellite or terrestrial network 
connectivity).


Sec. 545.509  Transactions related to mail authorized.

    All transactions by U.S. persons, including payment and transfers 
to common carriers, incident to the receipt or transmission of mail 
between the United States and the territory of Afghanistan controlled 
by the Taliban are authorized, provided that mail is limited to 
personal communications not involving a transfer of anything of value.


Sec. 545.510  Importation of household and personal effects authorized.

    The importation of household and personal effects originating in 
the territory of Afghanistan controlled by the Taliban, including 
baggage and articles for family use, of persons arriving in the United 
States, directly or indirectly from the territory of Afghanistan 
controlled by the Taliban, is authorized; to qualify, articles included 
in such effects must actually have been used abroad by such persons or 
by other family members arriving from the same foreign household, must 
not be intended for any other person or for sale, and must not be 
otherwise prohibited from importation.


Sec. 545.511  Registration of nongovernmental organizations for 
humanitarian or religious activities.

    (a) Registration numbers may be issued on a case-by-case basis for 
the registration of nongovernmental organizations involved in 
humanitarian or religious activities in the territory of Afghanistan 
controlled by the Taliban, authorizing transactions by such 
organizations otherwise prohibited by this part, including the 
exportation of goods, software, technology or services to the territory 
of Afghanistan controlled by the Taliban and the transfer of funds to 
and from the territory of Afghanistan controlled by the Taliban for the 
purpose of relieving human suffering. Applicants for registration 
numbers must comply with the requirements of Sec. 501.801(c).
    (b) This section does not authorize transfers from blocked 
accounts.

    Note to Sec. 545.511: Registration does not excuse a U.S. person 
from compliance with other applicable U.S. laws governing the 
exportation or reexportation of U.S.-origin goods, software, or 
technology (including technical data). See, e.g., the Export 
Administration Regulations administered by the U.S. Department of 
Commerce (15 CFR parts 730-774).

Sec. 545.512  Payment of obligations to U.S. persons authorized.

    (a) The transfer of funds after the effective date by, through, or 
to any U.S. financial institution or other U.S. person solely for the 
purpose of payment of obligations owed to U.S. persons, including a 
payment of such obligations of persons whose property or interests in 
property are blocked pursuant to Sec. 545.201, is authorized, provided 
that (1) the obligation arose prior to the effective date or is 
otherwise authorized or not prohibited pursuant to statute or the 
provisions of this part; (2) the payment requires no debit to a blocked 
account; and (3) the U.S. person is not blocked pursuant to this 
chapter V.
    (b) A person receiving payment under this section may distribute 
all or part of that payment to any person, provided that any such 
payment to a person whose property or interests in property are blocked 
pursuant to Sec. 545.201 must be to a blocked account in a U.S. 
financial institution.


[[Page 2737]]


    Note to Sec. 545.512: Please refer to Sec. 501.603 of this 
chapter for mandatory reporting requirements regarding financial 
transfers. See also Sec. 545.203 concerning the obligation to hold 
blocked funds in interest-bearing accounts.

Sec. 545.513  Provision of certain legal services authorized.

    (a) The provision of the legal services set forth in paragraph (b) 
of this section to or on behalf of persons whose property or interests 
in property are blocked pursuant to Sec. 545.201, and the exportation 
of such legal services to persons located in the territory of 
Afghanistan controlled by the Taliban or in circumstances in which the 
benefit is otherwise received in the territory of Afghanistan 
controlled by the Taliban, are authorized, provided that all receipts 
of payment of professional fees and reimbursement of incurred expenses 
must be specifically licensed.
    (b) Specific licenses may be issued on a case-by-case basis 
authorizing receipt from unblocked sources of payment of professional 
fees and reimbursement of incurred expenses for the following legal 
services by U.S. persons to persons specified in paragraph (a) of this 
section:
    (1) Provision of legal advice and counseling on the requirements of 
and compliance with the laws of any jurisdiction within the United 
States, provided that such advice and counseling is not provided to 
facilitate transactions in violation of this part;
    (2) Representation of persons when named as defendants in or 
otherwise made parties to domestic U.S. legal, arbitration, or 
administrative proceedings;
    (3) Initiation and conduct of domestic U.S. legal, arbitration, or 
administrative proceedings in defense of property interests subject to 
U.S. jurisdiction;
    (4) Representation of persons before any federal or state 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.
    (c) The provision or exportation of any other legal services to 
persons whose property or interests in property are blocked pursuant to 
Sec. 545.201 or who are located in the territory of Afghanistan 
controlled by the Taliban, not otherwise authorized in this part, 
requires the issuance of a specific license.
    (d) Entry into a settlement agreement affecting property or 
interests in property 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. 545.201 is prohibited unless specifically licensed in accordance 
with Sec. 545.202(e).


Sec. 545.514  Payments for services rendered by the Taliban to 
aircraft.

    (a) Specific licenses may be issued on a case-by-case basis for 
authorization of payments to the Taliban, to persons whose property or 
interests in property are blocked pursuant to Sec. 545.201, or to 
persons within the territory of Afghanistan controlled by the Taliban 
of charges for services rendered in connection with the overflight of 
the territory of Afghanistan controlled by the Taliban or emergency 
landing in the territory of Afghanistan controlled by the Taliban by 
aircraft. Any such payments shall be made consistent with United 
Nations Security Council Resolution 1267.
    (b) Specific licenses may be issued on a case-by-case basis for the 
exportation, reexportation, sale, or supply, directly or indirectly, of 
goods, software, technology, and services to ensure the safety of civil 
aviation and safe operation of U.S.-origin commercial passenger 
aircraft.


Sec. 545.515  Certain transactions related to patents, trademarks, and 
copyrights authorized.

    (a) All of the following transactions in connection with patent, 
trademark, copyright or other intellectual property protection in the 
United States or Afghanistan are authorized:
    (1) The filing and prosecution of any application to obtain a 
patent, trademark, copyright or other form of intellectual property 
protection, including importation of or dealing in services or payment 
for services from the Taliban, persons whose property or interests in 
property are blocked pursuant to Sec. 545.201, or from persons within 
the territory of Afghanistan controlled by the Taliban connected to 
such intellectual property protection;
    (2) The receipt of patent, trademark, copyright, or other form of 
intellectual property protection;
    (3) The renewal or maintenance of a patent, trademark, copyright or 
other form of intellectual property protection; and
    (4) The filing and prosecution of opposition or infringement 
proceedings with respect to a patent, trademark, copyright or other 
form of intellectual property protection, or the entrance of a defense 
to any such proceedings.
    (b) Nothing in this section affects obligations under any other 
provision of law.


Sec. 545.516  Certain payments to or from the territory of Afghanistan 
controlled by the Taliban.

    (a) United States financial institutions, as defined in 
Sec. 545.314, are authorized to process transfers of funds to or from 
the territory of Afghanistan controlled by the Taliban if the transfer 
is covered in full by any of the following conditions and does not 
involve debiting a blocked account on the books of a U.S. financial 
institution:
    (1) The transfer arises from an underlying transaction that has 
been authorized by a specific license, general license, or 
nongovernmental organization's registration number issued pursuant to 
this part; or
    (2) The transfer arises from an underlying transaction that is not 
prohibited by or that is exempted from the prohibitions of this part, 
such as an exportation of information or informational materials to the 
territory of Afghanistan controlled by the Taliban, a travel-related 
remittance, or payment for the shipment of a donation of articles to 
relieve human suffering.
    (b) With respect to transactions meeting the conditions of 
paragraph (a) of this section, before a United States depository 
institution initiates a payment on behalf of any U.S. non-bank 
customer, or credits a transfer to the account on its books of the 
ultimate beneficiary, the United States depository institution must 
determine that the underlying transaction is not prohibited by this 
part. To meet this requirement, a United States depository institution 
must either obtain a copy of the applicable specific license or 
nongovernmental organization's registration number or obtain a 
certification from the customer or beneficiary confirming that the 
transaction is authorized by a general license or not prohibited by 
this part. Such a certification will not meet the requirements of this 
section if the United States depository institution knows or has reason 
to know that any part of the certification is false.


Sec. 545.517  Authorization of emergency medical services.

    The provision of nonscheduled emergency medical services in the 
United States to persons whose property or interests in property are 
blocked pursuant to Sec. 545.201 is authorized, provided that all 
receipt of payment for such services must be specifically licensed.

[[Page 2738]]

Sec. 545.518  Investment and reinvestment of certain funds.

    Subject to the requirements of Sec. 545.203, U.S. financial 
institutions are authorized to invest and reinvest assets blocked 
pursuant to Sec. 545.201, subject to the following conditions:
    (a) The assets representing such investments and reinvestments are 
credited to a blocked account or subaccount which is held in the same 
name at the same U.S. financial institution, or within the possession 
or control of a U.S. person, but funds shall not be transferred outside 
the United States for this purpose;
    (b) The proceeds of such investments and reinvestments shall not be 
credited to a blocked account or subaccount under any name or 
designation that differs from the name or designation of the specific 
blocked account or subaccount in which such funds or securities were 
held; and
    (c) No immediate financial or economic benefit accrues (e.g., 
through pledging or other use) to persons whose property or interests 
in property are blocked pursuant to Sec. 545.201.


Sec. 545.519  Payments and transfers authorized for goods and services 
exported to the territory of Afghanistan controlled by the Taliban 
prior to the effective date.

    (a) Specific licenses may be issued on a case-by-case basis to 
permit payment involving an irrevocable letter of credit issued or 
confirmed by a U.S. bank, or a letter of credit reimbursement confirmed 
by a U.S. bank, from a blocked account or otherwise, of amounts owed to 
or for the benefit of a person with respect to goods, software, 
technology, or services exported prior to the effective date, directly 
or indirectly to the territory of Afghanistan controlled by the 
Taliban, or to third countries for an entity operated from territory of 
Afghanistan controlled by the Taliban, or for the benefit of the 
Taliban, where the license application presents evidence satisfactory 
to the Office of Foreign Assets Control that the exportation occurred 
prior to the effective date (such evidence may include, for example, 
the bill of lading, the air waybill, the purchaser's written 
confirmation of completed services, customs documents, and insurance 
documents).
    (b) This section does not authorize the exportation of goods, 
software, technology, or services after the effective date pursuant to 
a contract entered into, or partially performed, prior to the effective 
date.


Sec. 545.520  Noncommercial personal remittances to or from the 
territory of Afghanistan controlled by the Taliban.

    United States financial institutions, as defined in Sec. 545.314, 
are authorized to process transfers of funds to or from the territory 
of Afghanistan controlled by the Taliban in cases in which the transfer 
involves a noncommercial, personal remittance, provided the beneficiary 
is not a person whose property or interests in property are blocked 
pursuant to Sec. 545.201 or any other part of this chapter and the 
transfer is not by, to, or through a person whose property or interests 
in property are blocked pursuant to Sec. 545.201 or any other part of 
this chapter V.


Sec. 545.521  Transactions related to U.S. citizens residing in the 
territory of Afghanistan controlled by the Taliban.

    U.S. citizens who reside on a permanent basis in the territory of 
Afghanistan controlled by the Taliban are authorized to engage in 
transactions within the territory of Afghanistan controlled by the 
Taliban ordinarily incident to their routine and necessary maintenance 
and other personal living expenses.

    Note to Sec. 545.521. This provision does not authorize U.S. 
financial institutions, as defined in Sec. 545.314, to transfer 
funds to persons whose property or interests in property are blocked 
pursuant to Sec. 545.201.

Sec. 545.522  Operation of accounts.

    The operation of an account in a U.S. financial institution, as 
defined in Sec. 545.314, for a natural person in the territory of 
Afghanistan controlled by the Taliban, other than a person whose 
property or interests in property are blocked pursuant to Sec. 545.201, 
is hereby authorized; however, such operation may not include the 
execution of transactions in support of transactions or activities 
prohibited by subpart B of this part.


Sec. 545.523  Extensions or renewals of letters of credit authorized.

    (a) The extension or renewal, at the request of the account party, 
of a letter of credit or a standby letter of credit issued or confirmed 
by a U.S. financial institution is authorized, provided the transfer of 
funds is not made to a blocked account.
    (b) Transactions conducted pursuant to this section must be 
reported to the Compliance Programs Division of the Office of Foreign 
Assets Control, U.S. Treasury Department, 1500 Pennsylvania Ave., NW., 
Annex, Washington, D.C. 20220, within 10 days after completion of the 
transaction.


Sec. 545.524  Extensions or renewals of loans.

    Specific licenses may be issued on a case-by-case basis for 
rescheduling loans or otherwise extending the maturities of existing 
loans, and for charging fees or interest at commercially reasonable 
rates in connection therewith, provided that no new funds or credits 
are thereby transferred or extended to the Taliban, persons whose 
property or interests in property are blocked pursuant to Sec. 545.201, 
or persons in the territory of Afghanistan controlled by the Taliban.


Sec. 545.525  Certain services relating to participation in various 
events and activities authorized.

    (a) The importation into the United States or other dealing in 
services originating in the territory of Afghanistan controlled by the 
Taliban is authorized where such services are performed in the United 
States by a person from the territory of Afghanistan controlled by the 
Taliban who enters the United States on a visa issued by the State 
Department for the purpose of, or which services relate directly to, 
participation in a public conference, performance, exhibition or 
similar event, provided such services are consistent with that purpose.
    (b) Persons otherwise qualified for a non-immigrant visa under 
categories A-3 and G-5 (attendants, servants and personal employees of 
aliens in the United States on diplomatic status), D (crewmen), F 
(students), I (information media representatives), J (exchange 
visitors), M (non-academic students), O and P (aliens with 
extraordinary ability, athletes, artists and entertainers), Q 
(international cultural exchange visitors), R (religious workers), or S 
(witnesses) are authorized to carry out in the United States those 
activities for which such a visa has been granted by the U.S. State 
Department.
    (c) Persons otherwise qualified for a visa under categories E-2 
(treaty investor), H-1b (temporary worker), or L (intra-company 
transferee) and all immigrant visa categories are authorized to carry 
out in the United States those activities for which such a visa has 
been granted by the U.S. State Department, provided that the persons 
are not coming to the United States to work as an agent, employee or 
contractor of the Taliban, or a person whose property or interests in 
property are blocked pursuant to Sec. 545.201, or a business entity or 
other organization territory of Afghanistan controlled by the Taliban.

[[Page 2739]]

Sec. 545.526  Certain importations for diplomatic or official personnel 
authorized.

    All transactions ordinarily incident to the importation into the 
United States of any goods, software, technology or services from the 
territory of Afghanistan controlled by the Taliban that are not for 
sale and are destined for official or personal use by personnel 
employed by the diplomatic missions of the Taliban to the United States 
and to international organizations located in the United States are 
authorized, unless the importation is otherwise prohibited by law.


Sec. 545.527  Diplomatic pouches.

    All transactions in connection with the importation into the United 
States from the territory of Afghanistan controlled by the Taliban, or 
the exportation from the United States to the territory of Afghanistan 
controlled by the Taliban, of diplomatic pouches and their contents are 
authorized.

Subpart F--Reports


Sec. 545.601  Records and reports.

    For provisions relating to required records and reports, see part 
501, subpart C, of this chapter. Recordkeeping and reporting 
requirements imposed by part 501 of this chapter with respect to the 
prohibitions contained in this part are considered requirements arising 
pursuant to this part.

Subpart G--Penalties


Sec. 545.701  Penalties.

    (a) Attention is directed to section 206 of the International 
Emergency Economic Powers Act (the ``Act'') (50 U.S.C. 1705), which is 
applicable to violations of the provisions of any license, ruling, 
regulation, order, direction, or instruction issued by or pursuant to 
the direction or authorization of the Secretary of the Treasury 
pursuant to this part or otherwise under the Act. Section 206 of the 
Act, as adjusted by the Federal Civil Penalties Inflation Adjustment 
Act of 1990 (Public Law 101-410, as amended, 28 U.S.C. 2461 note), 
provides that:
    (1) A civil penalty not to exceed $11,000 per violation may be 
imposed on any person who violates or attempts to violate any license, 
order, or regulation issued under the Act;
    (2) Whoever willfully violates or willfully attempts to violate any 
license, order, or regulation issued under the Act, upon conviction, 
shall be fined not more than $50,000, and if a natural person, may also 
be imprisoned for not more than 10 years; and any officer, director, or 
agent of any corporation who knowingly participates in such violation 
may be punished by a like fine, imprisonment, or both.
    (b) The criminal penalties provided in the Act are subject to 
increase pursuant to 18 U.S.C. 3571.
    (c) Attention is also directed to 18 U.S.C. 1001(a), which provides 
that 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 materially false writing or document knowing the same to contain 
any false, fictitious, or fraudulent statement or entry shall be fined 
under title 18, United States Code, or imprisoned not more than five 
years, or both.
    (d) Violations of this part may also be subject to relevant 
provisions of other applicable laws.


Sec. 545.702  Prepenalty notice.

    (a) When required. If the Director of the Office of Foreign Assets 
Control has reasonable cause to believe that there has occurred a 
violation of any provision of this part or a violation of the 
provisions of any license, ruling, regulation, order, direction, or 
instruction issued by or pursuant to the direction or authorization of 
the Secretary of the Treasury pursuant to this part or otherwise under 
the International Emergency Economic Powers Act, and the Director 
determines that further proceedings are warranted, the Director shall 
notify the alleged violator of the agency's intent to impose a monetary 
penalty by issuing a prepenalty notice. The prepenalty notice shall be 
in writing. The prepenalty notice may be issued whether or not another 
agency has taken any action with respect to the matter.
    (b) Contents of notice--(1) Facts of violation. The prepenalty 
notice shall describe the violation, specify the laws and regulations 
allegedly violated, and state the amount of the proposed monetary 
penalty.
    (2) Right to respond. The prepenalty notice also shall inform the 
respondent of respondent's right to make a written presentation within 
the applicable 30 day period set forth in section 545.703 as to why a 
monetary penalty should not be imposed or why, if imposed, the monetary 
penalty should be in a lesser amount than proposed.
    (c) Informal settlement prior to issuance of prepenalty notice. At 
any time prior to the issuance of a prepenalty notice, an alleged 
violator may request in writing that, for a period not to exceed sixty 
(60) days, the agency withhold issuance of the prepenalty notice for 
the exclusive purpose of effecting settlement of the agency's potential 
civil monetary penalty claims. In the event the Director grants the 
request, under terms and conditions within his discretion, the Office 
of Foreign Assets Control will agree to withhold issuance of the 
prepenalty notice for a period not to exceed 60 days and will enter 
into settlement negotiations of the potential civil monetary penalty 
claim.


Sec. 545.703  Response to prepenalty notice; informal settlement.

    (a) Deadline for response. The respondent may submit a response to 
the prepenalty notice within the applicable 30 day period set forth in 
this paragraph. The Director may grant, at his discretion, an extension 
of time in which to submit a response to the prepenalty notice. The 
failure to submit a response within the applicable time period set 
forth in this paragraph shall be deemed to be a waiver of the right to 
respond.
    (1) Computation of time for response. A response to the prepenalty 
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) on or before the 30th day 
after the postmark date on the envelope in which the prepenalty notice 
was mailed. If the respondent refused delivery or otherwise avoided 
receipt of the prepenalty notice, a response must be postmarked or 
date-stamped on or before the 30th day after the date on the stamped 
postal receipt maintained at the Office of Foreign Assets Control. If 
the prepenalty notice was personally delivered to the respondent by a 
non-U.S. Postal Service agent authorized by the Director, a response 
must be postmarked or date-stamped on or before the 30th day after the 
date of delivery.
    (2) 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 Director's discretion, only upon the respondent's specific 
request to the Office of Foreign Assets Control.
    (b) Form and method of response. The response must be submitted in 
writing and may be handwritten or typed. The response need not be in 
any particular form. A copy of the written response may be sent by 
facsimile, but the original also must be sent to the Office of Foreign 
Assets Control Civil Penalties

[[Page 2740]]

Division by mail or courier and must be postmarked or date-stamped, in 
accordance with paragraph (a) of this section.
    (c) Contents of response. A written response must contain 
information sufficient to indicate that it is in response to the 
prepenalty notice.
    (1) A written response must include the respondent's full name, 
address, telephone number, and facsimile number, if available, or those 
of the representative of the respondent.
    (2) A written response should either admit or deny each specific 
violation alleged in the prepenalty notice and also state if the 
respondent has no knowledge of a particular violation. If the written 
response fails to address any specific violation alleged in the 
prepenalty notice, that alleged violation shall be deemed to be 
admitted.
    (3) A written response should include any information in defense, 
evidence in support of an asserted defense, or other factors that the 
respondent requests the Office of Foreign Assets Control to consider. 
Any defense or explanation previously made to the Office of Foreign 
Assets Control or any other agency must be repeated in the written 
response. Any defense not raised in the written response will be 
considered waived. The written response also should set forth the 
reasons why the respondent believes the penalty should not be imposed 
or why, if imposed, it should be in a lesser amount than proposed.
    (d) Default. If the respondent elects not to submit a written 
response within the time limit set forth in paragraph (a) of this 
section, the Office of Foreign Assets Control will conclude that the 
respondent has decided not to respond to the prepenalty notice. The 
agency generally will then issue a written penalty notice imposing the 
penalty proposed in the prepenalty notice.
    (e) Informal settlement. In addition to or as an alternative to a 
written response to a prepenalty notice, the respondent or respondent's 
representative may contact the Office of Foreign Assets Control as 
advised in the prepenalty notice to propose the settlement of 
allegations contained in the prepenalty notice and related matters. 
However, the requirements set forth in paragraph (f) of this section as 
to oral communication by the representative must first be fulfilled. In 
the event of settlement at the prepenalty stage, the claim proposed in 
the prepenalty notice will be withdrawn, the respondent will not be 
required to take a written position on allegations contained in the 
prepenalty notice, and the Office of Foreign Assets Control will make 
no final determination as to whether a violation occurred. The amount 
accepted in settlement of allegations in a prepenalty notice may vary 
from the civil penalty that might finally be imposed in the event of a 
formal determination of violation. In the event no settlement is 
reached, the time limit specified in paragraph (a) of this section for 
written response to the prepenalty notice remains in effect unless 
additional time is granted by the Office of Foreign Assets Control.
    (f) Representation. A representative of the respondent may act on 
behalf of the respondent, but any oral communication with the Office of 
Foreign Assets Control prior to a written submission regarding the 
specific allegations contained in the prepenalty notice must be 
preceded by a written letter of representation, unless the prepenalty 
notice was served upon the respondent in care of the representative.


Sec. 545.704  Penalty imposition or withdrawal.

    (a) No violation. If, after considering any response to the 
prepenalty notice and any relevant facts, the Director of the Office of 
Foreign Assets Control determines that there was no violation by the 
respondent named in the prepenalty notice, the Director shall notify 
the respondent in writing of that determination and of the cancellation 
of the proposed monetary penalty.
    (b) Violation. (1) If, after considering any written response to 
the prepenalty notice, or default in the submission of a written 
response, and any relevant facts, the Director of the Office of Foreign 
Assets Control determines that there was a violation by the respondent 
named in the prepenalty notice, the Director is authorized to issue a 
written penalty notice to the respondent of the determination of 
violation and the imposition of the monetary penalty.
    (2) The penalty notice shall inform the respondent that payment or 
arrangement for installment payment of the assessed penalty must be 
made within 30 days of the date of mailing of the penalty notice by the 
Office of Foreign Assets Control.
    (3) The penalty notice shall inform the respondent of the 
requirement to furnish the respondent's taxpayer identification number 
pursuant to 31 U.S.C. 7701 and that such number will be used for 
purposes of collecting and reporting on any delinquent penalty amount.
    (4) The issuance of the penalty notice finding a violation and 
imposing a monetary penalty shall constitute final agency action. The 
respondent has the right to seek judicial review of that final agency 
action in federal district court.


Sec. 545.705  Administrative collection; referral to United States 
Department of Justice.

    In the event that the respondent does not pay the penalty imposed 
pursuant to this part or make payment arrangements acceptable to the 
Director of the Office of Foreign Assets Control within 30 days of the 
date of mailing of the penalty notice, the matter may be referred for 
administrative collection measures by the Department of the Treasury or 
to the United States Department of Justice for appropriate action to 
recover the penalty in a civil suit in a federal district court.

[[Page 2741]]

Subpart H--Procedures


Sec. 545.801  Procedures.

    For license application procedures and procedures relating to 
amendments, modifications, or revocations of licenses; administrative 
decisions; rulemaking; and requests for documents pursuant to the 
Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see 
part 501, subpart D, of this chapter.


Sec. 545.802  Delegation by the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take 
pursuant to Executive Order 13129 of July 4, 1999 (64 FR 36759, July 7, 
1999) and any further Executive orders relating to the national 
emergency declared in Executive Order 13129 may be taken by the 
Director of the Office of Foreign Assets Control or by any other person 
to whom the Secretary of the Treasury has delegated authority so to 
act.

Subpart I--Paperwork Reduction Act


Sec. 545.901  Paperwork Reduction Act notice.

    For approval by the Office of Management and Budget (``OMB'') under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information 
collections relating to recordkeeping and reporting requirements, 
licensing procedures (including those pursuant to statements of 
licensing policy), and other procedures, see Sec. 501.901 of this 
chapter. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a valid control number assigned by OMB.

Dated: December 26, 2000.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: January 2, 2001.
Elisabeth A. Bresee,
Assistant Secretary (Enforcement), Department of the Treasury.
[FR Doc. 01-690 Filed 1-5-01; 3:53 pm]
BILLING CODE 4810-25-P


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