§ 586.408 - Exempt financial transactions within the territory of the FRY (S&M); prohibition on establishment of new offices in Serbia.

(a) Section 586.201(c) exempts financial transactions, including trade financing, from the prohibitions contained in § 586.201 by U.S. persons physically located within the territory of the FRY (S&M), where those transactions are conducted exclusively through the domestic banking system within the FRY (S&M) in local currency (dinars), or using bank notes or barter. A U.S. entity must have a permanent establishment, such as a branch or representative office, within the territory of the FRY (S&M) to be considered physically located there for purposes of this paragraph (a).

(b) The prohibition on new investment within Serbia contained in § 586.204, as defined in § 586.312, precludes the establishment after the effective date of a new representative or branch office or joint venture or other entity within the territory of the Republic of Serbia, because such activity would necessarily involve a commitment or contribution of funds or other assets to a public or private undertaking, entity, or project within Serbia. See § 586.513 concerning the authorization of certain trade-related transactions conducted using bank notes or barter by U.S. persons located outside of the territory of the FRY (S&M).

Note to § 586.408:

All transactions with respect to property in which the Government of the Republic of Montenegro has an interest are authorized pursuant to § 586.516. Therefore, all financial transactions by U.S. persons within the territory of the Republic of Montenegro are authorized, unless the transaction involves property in which another interest exists that is blocked pursuant to § 586.201 or any other part of this chapter. See § 586.403.