07-416. Global Terrorism Sanctions Regulations

AGENCY:

Office of Foreign Assets Control, Treasury.

ACTION:

Final rule.

SUMMARY:

The Treasury Department's Office of Foreign Assets Control (“OFAC”) is amending the Global Terrorism Sanctions Regulations to define the term “otherwise associated with” as used in 31 CFR 594.201 and to amend an explanatory note accompanying that section.

DATES:

Effective January 26, 2007.

FOR FURTHER INFORMATION CONTACT:

Chief Counsel (Foreign Assets Control), Office of the General Counsel, Department of the Treasury, Washington, DC 20220, tel.: [phone] (not a toll free number).

SUPPLEMENTARY INFORMATION:

Background

OFAC administers the Global Terrorism Sanctions Regulations, 31 CFR part 594 (“GTSR”), which implement and interpret Executive Order 13224 of September 23, 2001, in which the President declared a national emergency with respect to grave acts of terrorism and threats of terrorism committed by foreign terrorists and imposed economic sanctions with respect to certain designated individuals and entities. In section 7 of Executive Order 13224, the President authorized the Secretary of the Treasury, in consultation with other relevant Cabinet officials, to take such actions, including the promulgation of rules and regulations, as may be necessary to carry out the purposes of the order. The Secretary of the Treasury has, in turn, authorized the Director of OFAC to take these actions. 31 CFR 594.802. Today, OFAC is amending the GTSR by adding a new section 594.316 which defines the term “otherwise associated with” as used in section 594.201(a)(4)(ii). OFAC also is amending Note 3 to section 594.201 to clarify the scope of section 501.807 of this chapter.

The new section 594.316 defines a person “otherwise associated with” persons whose property and interests in property are blocked pursuant to section 594.201(a)(1), (a)(2), (a)(3), or (a)(4)(i) to include one who: (1) Owns or controls such persons; or (2) attempts, or conspires with one or more persons, to provide financial, material, or technological support, or financial or other services, to such persons. OFAC recognizes that this definition may include concepts that overlap with existing provisions of section 594.201 (a)(1), (a)(2), (a)(3), or (a)(4)(i). However, in light of the serious danger posed to national security by international terrorism, OFAC has determined that the benefit of greater specificity in its definitions outweighs any concerns with redundancy. In promulgating this definition, OFAC does not mean to imply any limitation on the scope of section 594.201(a)(1), (a)(2), (a)(3), or (a)(4)(i). Finally, as in all programs OFAC administers, these and other designation criteria in the GTSR will be applied in a manner consistent with pertinent Federal law, including, where applicable, the First Amendment to the United States Constitution.

Executive Order 12866, Administrative Procedure Act, Regulatory Flexibility Act, and Paperwork Reduction Act

Because the regulations at issue involve 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.

The Paperwork Reduction Act does not apply because this rule does not impose information collection requirements that would require the approval of the Office of Management and Budget under 44 U.S.C. 3501 et seq.

List of Subjects in 31 CFR Part 594

• Administrative practice and procedure
• Banks
• Banking
• Penalties
• Reporting and recordkeeping requirements
• Terrorism

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

PART 594—GLOBAL TERRORISM SANCTIONS REGULATIONS

1. The authority citation for part 594 continues 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. 109-177, 120 Stat. 192; 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, 64 FR 4075, 3 CFR, 2003 Comp., p. 161.

Subpart B—Prohibitions

2. In § 594.201, revise Note 3 to paragraph (a) to read as follows:

§ 594.201

Prohibited transactions involving blocked property.

(a) * * *

Note 3 to paragraph (a).

Section 501.807 of this chapter V sets forth the procedures to be followed by persons seeking administrative reconsideration of their designation pursuant to § 594.201(a) 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 § 501.806 of this chapter.

* * * * *

Subpart C—General Definitions

3. Add a new § 594.316 to subpart C to read as follows:

§ 594.316

Otherwise associated with.

The term “to be otherwise associated with,” as used in § 594.201(a)(4)(ii), means:

(a) To own or control; or

(b) To attempt, or to conspire with one or more persons, to act for or on behalf of or to provide financial, material, or technological support, or financial or other services, to.

Dated: January 25, 2007.

J. Robert McBrien,

Acting Director, Office of Foreign Assets Control.