FINAL RULES PUBLISHED IN THE FEDERAL REGISTER

DURING JANUARY, 2006

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 (71 FR 1971 on January 12, 2006)

 

Commentary: The Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury is issuing an interim final rule, “Economic Sanctions Enforcement Procedure for Banking Institutions,” along with a request for comments.  This interim final rule supersedes OFAC’s proposed rule of January 29, 2003 (68 FR 4422-4429 (2003)), to the extent that the proposed rule applies to “banking institutions,” as defined below.  These administrative procedures are published as an appendix to the Reporting, Procedures and Penalties Regulations, 31 CFR Part 501.

 

For purposes of this interim rule, “banking institutions” means depository institutions regulated or supervised by one of the regulators that belongs to the Federal Financial Institutions Examination Council (“FFIEC”), i.e., the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. Please note that a depository institution may be a “banking institution,” as that term is defined in OFAC regulations, see, e.g., 31 CFR 500.314, 515.314, but not a “banking institution” for purposes of these enforcement procedures.

 

OFAC is publishing enforcement procedures for banking institutions because of their unique role in the implementation of OFAC sanctions programs and the nature of the transactions in which such institutions engage. The new enforcement procedures take into account that each banking institution's situation is different and that its compliance program should be tailored to its unique circumstances. This includes an analysis of its size, business volume, customer base, and product lines.

 

This interim final rule is effective for enforcement cases involving banking institutions commencing on or after February 13, 2006.  Written comments may be submitted on or before March 13, 2006.

 

2.                Reporting and Procedures Regulations:  Cuban Assets Control Regulations; Economic Sanctions Enforcement Guidelines; Partial Withdrawal (71 FR 1994 on January 12, 2006)

 

Commentary: OFAC has published a partial withdrawal of the proposed rule published on January 29, 2003 (68 FR 4422-4429(2203)), relating to the economic sanctions enforcement guidelines.  Specifically, this partial withdrawal is with respect to “banking institutions”, as that term is defined in the interim final rule (“OFAX Economic Sanctions Enforcement Procedures for Banking Institutions”) amending 31 CFR Part 501.

       

 

            

NOTICES PUBLISHED IN THE FEDERAL REGISTER

DURING JANUARY, 2006

DEPARTMENT OF STATE, OFFICE OF DEFENSE TRADE CONTROLS

INTERNATIONAL TRAFFIC IN ARMS REGULATIONS

(22 CFR Part 120 et seq.)

 

NOTE:                    CHANGES TO THE INTERNATIONAL TRAFFIC IN ARMS REGULATIONS LISTED BELOW ARE NUMBERED CONSECUTIVELY, BEGINNING IN JANUARY OF THE NEW YEAR. 

 

 

 

1.                  Bureau of Political Military Affairs; Statutory Debarment Under the International Traffic in Arms Regulations (71 FR 2291 on January 13, 2006)

 

        The Department of State has published a notice imposing a statutory debarment pursuant to Section 127.7(c) of the International Traffic in Arms Regulations (“ITAR”) (22 CFR Parts 120 to 130) on persons convicted of violating or conspiring to violate Section 38 of the Arms Export control Act (“AECA”) (22 U.S.C. 2778).  Pursuant to Section 38 of the AECA and Section 127.7 of the ITAR, the Assistant Secretary of State for Political-Military Affairs has statutorily debarred the following persons for a period of three years following the date of their AECA conviction:

 

1)  Jesus Arredondo-Sanchez (a.k.a. Jesus Arredondo), June 21, 2004, U.S. District Court, District of Arizona (Phoenix),                          Case: CR 03-00524-001-PHX-FJM.

2)  Omar Carrillo, October 7, 1999, U.S. District Court, Southern District of Texas (Laredo), Case: 5:99CR00241-001.

3)  Carlos Alberto Correa-Arango, August 31, 2005, U.S. District Court, Southern District of Florida (Miami), Case: 05-60122-CR-HUCK.

4)  Kozo Wada, June 9, 2005, U.S. District Court, District of Oregon (Portland), Case: Cr. 03-96-BR.

5)  Atallah Adwani, September 24, 2003, U.S. District Court, Southern District of Ohio (Cincinnati), Case: CR-1-02-71-1.

6)  Summit Marketing, Inc., October 24, 1997, U.S. District Court, District of Massachusetts (Boston), Case: 1:96CR10326-002-REK.

 

 

    As noted above, at the end of the three-year period, the above named persons/entities remain debarred unless licensing privileges are reinstated. Debarred persons are generally ineligible to participate in activity regulated under the ITAR (see e.g., sections 120.1(c) and (d), and 127.11(a)). The Department of State will not consider applications for licenses or requests for approvals that involve any person who has been convicted of violating or of conspiring to violate the AECA during the period of statutory debarment.

 

2.                Rule Title:  Amendment to the International Traffic in Arms Regulations:  Registration Fee Change (71 FR 3762 on January 24, 2006)

 

Commentary: The Department of State has published a rule finalizing the interim rule that amended the International Traffic in Arms Regulations (ITAR) (22 CFR Parts 122 and 129) by increasing the registration fees, changing the registration renewal period, and making other minor administrative changes. This final rule also publishes comments received on the interim rule.  In finalizing the interim rule, no changes were made to the interim rule.