E7-21357. Global Terrorism Sanctions Regulations; Terrorism Sanctions Regulations; Foreign Terrorist Organizations Sanctions Regulations

AGENCY:

Office of Foreign Assets Control, Treasury.

ACTION:

Final rule.

SUMMARY:

The Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) is revising the Global Terrorism Sanctions Regulations, the Terrorism Sanctions Regulations, and the Foreign Terrorist Organizations Sanctions Regulations to add a new general license authorizing all transactions with the Palestinian Authority, as defined in the general license.

DATES:

Effective Date: October 31, 2007.

FOR FURTHER INFORMATION CONTACT:

Assistant Director for Compliance, Outreach & Implementation, tel.: [phone], Assistant Director for Licensing, tel.: [phone], Assistant Director for Policy, tel.: [phone], Office of Foreign Assets Control, or Chief Counsel (Foreign Assets Control), tel.: [phone], Office of the General Counsel, Department of the Treasury, Washington, DC 20220 (not toll free numbers).

SUPPLEMENTARY INFORMATION:

Electronic and Facsimile Availability

This document and additional information concerning the Office of Foreign Assets Control (“OFAC”) are available from OFAC's Web site (http://www.treas.gov/​ofac) or via facsimile through a 24-hour fax-on demand service, tel.: [phone].

Background

OFAC administers three sanctions programs with respect to terrorists and terrorist organizations. The Terrorism Sanctions Regulations, 31 CFR part 595 (“TSR”), implement Executive Order 12947 of January 23, 1995, in which the President declared a national emergency with respect to “grave acts of violence committed by foreign terrorists that disrupt the Middle East peace process * * *” The Global Terrorism Sanctions Regulations, 31 CFR part 594 (“GTSR”), implement Executive Order 13224 of September 23, 2001, in which the President declared an emergency more generally with respect to “grave acts of terrorism and threats of terrorism committed by foreign terrorists * * *” The Foreign Terrorist Organizations Sanctions Regulations, 31 CFR part 597 (“FTOSR”), implement provisions of the Antiterrorism and Effective Death Penalty Act of 1996.

HAMAS is a target of each of these sanctions programs, resulting in the blocking of its property and interests in property that are in the United States or within the possession or control of a U.S. person. In the case of the FTOSR, U.S. financial institutions are required to retain possession or control of any funds of HAMAS and report the existence of such funds to Treasury. These restrictions effectively prohibit U.S. persons from dealing in property or interests in property of HAMAS. Following the 2006 parliamentary elections in the West Bank and Gaza, which resulted in HAMAS members forming the majority party within the Palestinian Legislative Council and holding positions of authority within the government, OFAC determined that HAMAS had a property interest in the transactions of the Palestinian Authority. That determination remains in place. Accordingly, pursuant to the TSR, the GTSR, and the FTOSR, U.S. persons are prohibited from engaging in transactions with the Palestinian Authority unless authorized. On April 12, 2006, OFAC issued six general licenses authorizing U.S. persons to engage in certain transactions in which the Palestinian Authority may have an interest.

Based on foreign policy considerations resulting from recent events in the West Bank and Gaza, including the appointment of Salam Fayyad as the new Prime Minister of the Palestinian Authority and of other ministers not affiliated with HAMAS, OFAC is revising the TSR, GTSR, and FTOSR to add a new general license as TSR § 595.514, GTSR § 594.516, and FTOSR § 597.512. Paragraph (a) of new §§ 595.514, 594.516, and 597.512 authorizes U.S. persons to engage in all transactions with the Palestinian Authority. Paragraph (b) of these sections defines the term Palestinian Authority, for purposes of the authorization in paragraph (a), as the Palestinian Authority government of Prime Minister Salam Fayyad and President Mahmoud Abbas, including all branches, ministries, offices, and agencies (independent or otherwise) thereof. Transactions with HAMAS, or in any property in which HAMAS has an interest, not covered by the general license remain prohibited.

Public Participation

Because the amendment of 31 CFR parts 594, 595, and 597 involves a foreign affairs function, the provisions of Executive Order 12866 and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date, are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

Paperwork Reduction Act

The collections of information related to 31 CFR parts 594, 595, and 597 are contained in 31 CFR part 501 (the “Reporting, Procedures and Penalties Regulations”). Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been approved by the Office of Management and Budget under control number 1505-0164. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

List of Subjects

31 CFR Part 594

• Administrative practice and procedure
• Banks
• Banking
• Currency
• Foreign investments in United States
• Penalties
• Reporting and recordkeeping requirements
• Securities
• Terrorism

31 CFR Part 595

• Administrative practice and procedure
• Banks
• Banking
• Currency
• Foreign investments in United States
• Penalties
• Reporting and recordkeeping requirements
• Securities
• Terrorism

31 CFR Part 597

• Administrative practice and procedure
• Banks
• Banking
• Currency
• Foreign investments in United States
• Penalties
• Reporting and recordkeeping requirements
• Securities
• Terrorism

For the reasons set forth in the preamble, the Office of Foreign Assets Control amends 31 CFR parts 594, 595, and 597 as follows:

PART 594—GLOBAL TERRORISM SANCTIONS REGULATIONS

1. Revise the authority citation for part 594 to read as follows:

Authority: 3 U.S.C. 301; 22 U.S.C. 287c; 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); Pub. L. 110-96, 121 Stat. 1011; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; E.O. 13268, 67 FR 44751, 3 CFR, 2002 Comp., p. 240; E.O. 13284, 68 FR 4075, 3 CFR, 2003 Comp., p. 161.

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

2. Add a new § 594.516 to read as follows:

§ 594.516

Transactions with the Palestinian Authority authorized.

(a) As of June 20, 2007, U.S. persons are authorized to engage in all transactions otherwise prohibited under this part with the Palestinian Authority.

(b) For purposes of this section only, the term Palestinian Authority means the Palestinian Authority government of Prime Minister Salam Fayyad and President Mahmoud Abbas, including all branches, ministries, offices, and agencies (independent or otherwise) thereof.

PART 595—TERRORISM SANCTIONS REGULATIONS

3. Revise the authority citation for part 595 to read as follows:

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); Pub. L. 110-96, 121 Stat. 1011; E.O. 12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 319.

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

4. Add a new § 595.514 to read as follows:

§ 595.514

Transactions with the Palestinian Authority authorized.

(a) As of June 20, 2007, U.S. persons are authorized to engage in all transactions otherwise prohibited under this part with the Palestinian Authority.

(b) For purposes of this section only, the term Palestinian Authority means the Palestinian Authority government of Prime Minister Salam Fayyad and President Mahmoud Abbas, including all branches, ministries, offices, and agencies (independent or otherwise) thereof.

PART 597—FOREIGN TERRORIST ORGANIZATIONS SANCTIONS REGULATIONS

5. The authority citation for part 597 continues to read as follows:

Authority: 31 U.S.C. 321(b); Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 104-132, 110 Stat. 1214, 1248-53 (8 U.S.C. 1189, 18 U.S.C. 2339B).

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

6. Add a new § 597.512 to read as follows:

§ 597.512

Transactions with the Palestinian Authority authorized.

(a) As of June 20, 2007, U.S. persons are authorized to engage in all transactions otherwise prohibited under this part with the Palestinian Authority.

(b) For purposes of this section only, the term Palestinian Authority means the Palestinian Authority government of Prime Minister Salam Fayyad and President Mahmoud Abbas, including all branches, ministries, offices, and agencies (independent or otherwise) thereof.

Dated: October 23, 2007.

Adam J. Szubin,

Director, Office of Foreign Assets Control.