02-32757. Unblocking of Assets; Federal Republic of Yugoslavia (Serbia & Montenegro) and Bosnian Serb-Controlled Areas of the Republic of Bosnia and Herzegovina Sanctions Regulations; Federal Republic of Yugoslavia (Serbia & Montenegro) Kosovo ...

AGENCY:

Office of Foreign Assets Control, Treasury.

ACTION:

Final rule.

SUMMARY:

The Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury is issuing general licenses, to be effective February 25, 2003, unblocking certain property and interests in property presently blocked pursuant to the Federal Republic of Yugoslavia (Serbia & Montenegro) and Bosnian Serb-controlled areas of the Republic of Bosnia and Herzegovina Sanctions Regulations set forth at 31 CFR part 585 and the Federal Republic of Yugoslavia (Serbia & Montenegro) Kosovo Sanctions Regulations set forth at 31 CFR part 586. The general licenses effecting the unblocking under both of the above sets of regulations will not apply to property or interests in property of those persons who are presently subject to sanctions under either the Federal Republic of Yugoslavia (Serbia & Montenegro) Milosevic Regulations set forth at 31 CFR part 587 or the Western Balkans Transactions Regulations set forth at 31 CFR part 588, or who are otherwise subject to sanctions under other parts of 31 CFR chapter V. In addition, the general license effecting the unblocking under 31 CFR part 585 will not apply to property or interests in property of diplomatic and/or consular missions of the former Socialist Federal Republic of Yugoslavia or to the blocked property or interests in property of the National Bank of Yugoslavia subject to part 585. In order to allow for claims and encumbrances associated with the property and interests in property being unblocked to be addressed, OFAC is also issuing general licenses, effective December 27, 2002, authorizing any person or government to seek judicial or other legal protection of any rights they may have with respect to the property and interests in property being unblocked.

DATES:

Effective Date: December 27, 2002.

Applicable Dates: The general licenses set forth in 31 CFR §§ 585.529(a) and 586.520(a) shall become applicable February 25, 2003. The general licenses set forth in 31 CFR 585.529(b) and 586.520(b) shall become applicable December 27, 2002.

FOR FURTHER INFORMATION CONTACT:

Chief of Compliance Programs, tel.: [phone], Chief of Licensing, tel.: [phone], Chief of Policy Planning and Program Management, tel.: [phone], or Chief Counsel, tel.: [phone], 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 Acrobat® 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

Pursuant to Presidential Determination No. 96-7 of December 27, 1995 (61 FR 2887, January 29, 1996), and Executive Order 13192 of January 17, 2001 (66 FR 7379, Jan. 23, 2001), most Treasury-administered sanctions imposed upon the Federal Republic of Yugoslavia (Serbia & Montenegro) (the “FRY(S&M)”) in response to the actions of the FRY(S&M) in Bosnia and Herzegovina from 1992 through 1995 and with respect to Kosovo from 1998 through 2000 have been suspended or lifted. Nevertheless, most property and interests in property blocked under either the Bosnia-related sanctions regulations (31 CFR part 585) or the Kosovo-related sanctions regulations (31 CFR part 586) have remained blocked, primarily to provide for the address of claims and encumbrances that may be associated with such property or interests in property, including potential claims of the successor states of the former Socialist Federal Republic of Yugoslavia.

As part of the U.S. Government's efforts to assist the FRY(S&M) in recovering from the effects of the Milosevic regime, certain steps are being taken to unblock much of the remaining property and interests in property blocked under either 31 CFR part 585 or 31 CFR part 586. On October 3, 2001 (66 FR 50506), OFAC issued an interim final rule amending 31 CFR part 586, which included authorization for the unblocking of certain Yugoslav debt and authorization for the release of certain blocked financial transfers. At present, OFAC is issuing general licenses, effective February 25, 2003, authorizing the unblocking of all remaining blocked property and interests in property, except (i) property or interests in property of diplomatic and/or consular missions of the former Socialist Federal Republic of Yugoslavia, (ii) property or interests in property of those persons who are presently subject to sanctions under either the Federal Republic of Yugoslavia (Serbia & Montenegro) Milosevic Regulations set forth at 31 CFR part 587 or the Western Balkans Transactions Regulations set forth at 31 CFR part 588, or who are otherwise subject to sanctions under other parts of 31 CFR chapter V, and (iii) the property or interests in property of the central bank of the former Socialist Federal Republic of Yugoslavia, i.e., the National Bank of Yugoslavia, that have been blocked pursuant to 31 CFR part 585. (Property and interests in property of the National Bank of Yugoslavia blocked pursuant to 31 CFR part 586 will be unblocked pursuant to the general license being issued at § 586.520.)

In order to allow for claims and encumbrances associated with the property and interests in property being unblocked to be addressed in a manner consistent with Presidential Determination No. 96-7 and Executive Order 13192, OFAC is also issuing general licenses, effective December 27, 2002, authorizing any person or government to seek judicial or other legal process with respect to property or interests in property being unblocked. These general licenses are intended to help persons and governments, including the successor states to the former Socialist Federal Republic of Yugoslavia, to protect any rights they may have with respect to such property or interests in property. These general licenses do not constitute a determination that any particular property or interest in property subject to the unblocking authorization would not be subject to defenses against any judicial or legal process, including claims of immunity.

Because the amendment of 31 CFR parts 585 and 586 involves 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. 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 585 and 586 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 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 585

• Administrative practice and procedure
• Banks and banking
• Blocking of assets
• Bosnia and Herzegovina
• Federal Republic of Yugoslavia (Serbia & Montenegro)
• Montenegro
• Reporting and recordkeeping requirements
• Serbia

31 CFR Part 586

• Administrative practice and procedure
• Banks
• Banking
• Blocking of assets
• Federal Republic of Yugoslavia (Serbia & Montenegro)
• Kosovo
• Montenegro
• Reporting and recordkeeping requirements
• Serbia

For the reasons set forth in the preamble, 31 CFR parts 585 and 586 are amended as follows:

PART 585—FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA & MONTENEGRO) AND BOSNIAN SERB-CONTROLLED AREAS OF THE REPUBLIC OF BOSNIA AND HERZEGOVINA SANCTIONS REGULATIONS

1. The authority citation for part 585 continues to read as follows:

Authority: 3 U.S.C. 301; 22 U.S.C. 287(c); 31 U.S.C. 321(b); 49 U.S.C. 40106; 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); E.O. 12808, 57 FR 23299, 3 CFR, 1992 Comp., p. 305; E.O. 12810, 57 FR 23299, 3 CFR, 1992 Comp., p. 307; E.O. 12831, 58 FR 5253, 3 CFR, 1993 Comp., p. 576; E.O. 12846, 58 FR 25771, 3 CFR, 1993 Comp., p. 599; E.O. 12934, 59 FR 54117, 3 CFR, 1994 Comp., p. 930.

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

2. Section 585.529 is added to subpart E to read as follows:

§ 585.529

Unblocking of previously blocked property.

(a)(1) Except for such property and interests in property described in paragraph (a)(2) of this section, as of February 25, 2003, all transactions that otherwise would be prohibited by this part involving property or interests in property blocked pursuant to Executive Order 12808 of May 30, 1992, Executive Order 12810 of June 5, 1992, Executive Order 12846 of April 25, 1993, or Executive Order 12934 of October 25, 1994, that has remained blocked pursuant to Presidential Determination No. 96-7 of December 27, 1995, are authorized.

(2) The authorization in paragraph (a)(1) does not apply to:

(i) Property or interests in property of diplomatic and/or consular missions of the former Socialist Federal Republic of Yugoslavia,

(ii) Property or interests in property blocked pursuant to this part of those persons presently subject to sanctions under either the Federal Republic of Yugoslavia (Serbia & Montenegro) Milosevic Regulations set forth at 31 CFR part 587 or the Western Balkans Transactions Regulations set forth at 31 CFR part 588, or who are otherwise subject to sanctions under this chapter, or

(iii) Property or interests in property of the National Bank of Yugoslavia blocked pursuant to this part.

(b) As of December 27, 2002, any person or government is authorized to seek an attachment, judgment, decree, lien, or other judicial or legal process against or with respect to any property or interests in property subject to the unblocking authorization set forth in paragraph (a) of this section. This section does not authorize any execution against, final settlement with respect to, garnishment of, or other action effecting the transfer of any property or interests in property subject to the unblocking authorization set forth in paragraph (a) of this section prior to February 25, 2003.

Note to paragraph (b) of § 585.529:

Any person or government seeking judicial or other legal process under the authority of this paragraph must comply with the reporting requirements set forth under 31 CFR 501.605 pertaining to litigation, arbitration and dispute resolution proceedings.

PART 586—FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA & MONTENEGRO) KOSOVO SANCTIONS REGULATIONS

3. The authority citation for part 586 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. 13088, 63 FR 32109, 3 CFR, 98 Comp., p. 191; E.O. 13121, 64 FR 24021, 3 CFR, 99 Comp., p. 176; E.O. 13192, 66 FR 7379, January 23, 2001.

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

4. Section 586.520 is added to subpart E to read as follows:

§ 586.520

Unblocking of previously blocked property.

(a)(1) Except for such property and interests in property set forth in paragraph (a)(2) of this section, as of February 25, 2003, all transactions that otherwise would be prohibited by this part involving property or interests in property blocked pursuant to Executive Order 13088 of June 9, 1998, or Executive Order 13121 of April 30, 1999, that has remained blocked pursuant to Executive Order 13192 of January 17, 2001, are authorized.

(2) The authorization in paragraph (a)(1) does not apply to property or interests in property blocked pursuant to this part of those persons presently subject to sanctions under either the Federal Republic of Yugoslavia (Serbia & Montenegro) Milosevic Regulations set forth at 31 CFR part 587 or the Western Balkans Transactions Regulations set forth at 31 CFR part 588, or who are otherwise subject to sanctions under this chapter.

(b)(1) As of December 27, 2002, any person or government is authorized to seek an attachment, judgment, decree, lien, or other judicial or legal process against or with respect to any property or interests in property subject to the unblocking authorization set forth in paragraph (a) of this section. This section does not authorize any execution against, final settlement with respect to, garnishment of, or other action effecting the transfer of any property or interests in property subject to the unblocking authorization set forth in paragraph (a) of this section prior to February 25, 2003.

Note to paragraph (b) of § 586.520:

Any person or government seeking judicial or other legal process under the authority of this paragraph must comply with the reporting requirements set forth under 31 CFR 501.605 pertaining to litigation, arbitration and dispute resolution proceedings.

Dated: December 12, 2002.

R. Richard Newcomb,

Director, Office of Foreign Assets Control.

Approved: December 17, 2002.

Kenneth E. Lawson,

Assistant Secretary (Enforcement), Department of the Treasury.