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FINAL RULES PUBLISHED IN THE FEDERAL REGISTER DURING 2005

TREASURY DEPARTMENT, OFFICE OF FOREIGN ASSET CONTROL

FOREIGN ASSET CONTROL REGULATIONS

(31 CFR Part 500 et seq.)

NOTE: CHANGES TO THE FOREIGN ASSET CONTROL REGULATIONS LISTED BELOW ARE NUMBERED CONSECUTIVELY, BEGINNING IN JANUARY OF THE NEW YEAR.

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1. Cuban Assets Control Regulations (70 FR 9225 on February 25, 2005)

Commentary: The Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury is amending the Cuban Assets Control Regulations, 31 CFR 515 (the “CACR”), to clarify the meaning of the term “payment of cash in advance,” which is used in the restrictions on payment and financing terms for authorized exports from the United States to Cuba.

2. Iranian Transactions Regulations (70 FR 15583 on March 28, 2005)

Commentary: OFAC is revising the Iranian Transactions Regulations (ITR) to clarify the applicability of certain general licenses to brokers and dealers in securities. For example, OFAC is adding a new provision at 31 CFR 560.321 to establish a regulatory definition of the term United States registered broker or dealer in securities and amending Section 560.320 of the ITR to clarify that the term Iranian accounts includes accounts of persons located in Iran or of the Government of Iran maintained on the books of a United States registered broker or dealer in securities. This rule also amends Sections 560.516, 560.517, and 560.532 of the ITR.

3. Administrative Collection of Civil Penalties in the Iranian Assets Control Regulations, the Libyan Sanctions Regulations, and the Iraqi Sanctions Regulations (70 FR 15761 on March 29, 2005)

Commentary: OFAC is revising the Iranian Assets Control Regulations, 31 CFR Part 535, the Libyan Sanctions Regulations, 31 CFR Part 550, and the Iraqi Sanctions Regulations, 31 CFR Part 575, to reaffirm that administrative collection of unpaid civil penalties imposed by OFAC is authorized in addition to judicial means of collection.

4. Syrian Sanctions Regulations (70 FR 17201 on April 5, 2005)

Commentary: OFAC has added a new Part 542 to Chapter V of 31 CFR to carry out the purposes of Executive Order 13338 of May 11, 2004, “Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods to Syria.” Pursuant to section 9 of the Order, the Department of the Treasury's OFAC is promulgating the Syrian Sanctions Regulations, 31 CFR Part 542 (the “Regulations”). A few specific provisions are summarized below.

Persons designated under Section 3 of the Order are referred to throughout the Regulations as “persons whose property or interests in property are blocked pursuant to Section 542.201(a).” Their names will be published on OFAC's Web site, announced in the Federal Register, and incorporated on an ongoing basis into Appendix A to 31 CFR Chapter V, which lists persons that are the targets of various sanctions programs administered by OFAC.

Section 542.201, with certain exceptions, blocks all property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession of control of U.S. persons, of persons determined by the Secretary of the Treasury, in consultation with the Secretary of State, to meet the criteria set forth in section 3 of the Order. These criteria include directing or otherwise significantly contributing to: (1) The Government of Syria's provision of safe haven to or other support for any persons whose property is blocked under U.S. law for terrorism-related reasons; (2) the Government of Syria's military or security presence in Lebanon; (3) the Government of Syria's pursuit of the development and production of weapons of mass destruction and medium- and long-range surface-to-surface missiles; and (4) any steps taken by the Government of Syria to undermine U.S. and international efforts with respect to the stabilization and reconstruction of Iraq. Also subject to designation are those individuals or entities owned or controlled by, or acting for or on behalf of, directly or indirectly, any person whose property or interests in property is blocked pursuant to the Order.

Section 542.206 of Subpart B details transactions that are exempt from the prohibitions of Part 542 pursuant to Sections 203(b)(1), (3) and (4) of IEEPA (50 U.S.C. 1702(b)(1), (3), and (4)). These exemptions relate to personal communications, the importation and exportation of information or informational materials, and transactions relating to travel. Donations of the type of articles specified in Section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)), i.e., articles such as food, clothing, and medicine intended to relieve human suffering are from the scope of these Regulations and are prohibited, unless authorized by OFAC or otherwise authorized by law.

5. Reporting, Procedures and Penalties Regulations and Sudanese Sanctions Regulations (70 FR 34060 on June 13, 2005)

Commentary: OFAC is revising the Reporting, Procedures and Penalties Regulations (“RPPR”) to make a technical change in order to remove a reference to the Government of Sudan that was used prior to the promulgation of Executive Order 13067 and the Sudanese Sanctions Regulations.

OFAC is also amending the Sudanese Sanctions Regulations, (“SSR”). The amendments to the SSR include the issuance to two general licenses, effective June 13, 2005. One general license authorizes the operation of accounts in U.S. financial institutions under certain circumstances for individuals ordinarily resident in Sudan. The other general license authorizes U.S. depository institutions, U.S. registered brokers and dealers in securities, and U.S. registered money transmitters to process transfers of funds constituting noncommercial, personal remittances to or from Sudan or for or on behalf of individuals ordinarily resident in Sudan. Other amendments to the SSR include: the removal of two regulatory provisions, the revision of a provision regarding reexportation of U.S.-origin goods, technology or software by non-U.S. persons and a change in OFAC’s procedure for imposing civil penalties.

6. Alphabetical Listing of Blocked Persons, Specially Designated Nationals, Specially Designated Terrorists, Specially Designated Global Terrorists, Foreign Terrorist Organizations, and Specially Designated Narcotics Traffickers; Amendment of Final Rule (70 FR 38256 on July 1, 2005)

Commentary: The Treasury Department has amended Appendix A to 31 CFR Chapter V to (1) reflect the addition or removal, since it was last published, of the names of individuals and entities subject to the various economic sanctions programs administered by the Treasury’s Office of Foreign Assets Controls and (2) provide updated identifying and clarifying information for certain individuals and entities included in the Appendix. The Treasury Department also has amended the notes to the Appendices to 31 CFR Chapter V to reflect the revisions to Appendix A and changes in the status of several programs. For a detailed list please refer to the above citation.

7. Burmese Sanctions Regulations (70 FR 48240 on August 16, 2005)

Commentary: OFAC has amended and reissued in its entirety the Burmese Sanctions Regulations to implement Executive Order 13310 of July 28, 2003, which placed new sanctions on Burma. Executive Order 13310 of July 28, 2003, (the Burmese Freedom and Democracy Act of 2003 “BFDA”) blocks all property and interest in property of the persons listed in the Annex to the Order and of certain persons determined to meet the criteria set forth in the Order. It also bans the importation into the United States of products of Burma (while waiving the ban where it would conflict with the international obligations of the United States under certain conventions on diplomatic and consular relations and similar agreements) and the exportation or reexportation to Burma of financial services from the United States or by U.S. persons. For more information, refer to the regulation cited above.

8. Iraqi Debt Unblocked (70 FR 54258 on September 14, 2005)

Commentary: OFAC has issued a new general license unblocking debt in which the Government of Iraq has an interest, subject to certain conditions, due to the lifting of multilateral and U.S. sanctions against Iraq, including the resolution of issues related to Iraqi debt. First, notwithstanding the new general license, transactions that remained prohibited by paragraphs (b)(3) and (b)(5) of 31 CFR 575.533 continue to remain prohibited. Second, the general license does not authorize the purchase, exchange or settlement of debt in which the Government of Iraq has an interest utilizing funds or other property that is blocked pursuant to this part.