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CHAPTER V-OFFICE OF FOREIGN ASSETS CONTROL,

DEPARTMENT OF THE TREASURY1

Part

500

505

515

Foreign Assets Control Regulations.

Regulations prohibiting transactions involving the shipment of certain

merchandise between foreign countries.

Cuban Assets Control Regulations.

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Subpart A-Relation of This Chapter to Other Laws and Regulations § 500.101 Relation of this chapter to other laws and regulations including 8 CFR Ch. II.

(a) This chapter is independent of 8 CFR Ch. II. The prohibitions contained in this chapter are in addition to the prohibitions contained in 8 CFR Ch. II. No license or authorization contained in or issued pursuant to 8 CFR Ch. II shall be deemed to authorize any transaction prohibited by this chapter, nor shall any license or authorization issued pursuant to any other provision of law (except this chapter) be deemed to authorize any transaction so prohibited.

(b) No license or authorization contained in or issued pursuant to this chapter shall be deemed to authorize any transaction to the extent that it is prohibited by reason of the provisions of any law or statute other than Section 5(b) of the Trading with the Enemy Act, as amended, or any proclamation, order or regulation other than those contained in or issued pursuant to this chapter or pursuant to section 620 (a) of the Foreign Assistance Act of 1961. [15 F.R. 9040, Dec. 19, 1950, as amended at 27 F.R. 1116, Feb. 7, 1962]

Subpart B-Prohibitions ✓

§ 500.201 Transactions involving designated foreign countries or their nationals; effective date.

(a) All of the following transactions are prohibited, except as specifically authorized by the Secretary of the Treasury (or any person, agency, or instrumentality designated by him) by means of regulations, rulings, instructions, licenses, or otherwise, if either such transactions are by, or on behalf of, or pursuant to the direction of any designated foreign country, or any national thereof, or such transactions involve property in which any designated foreign country, or any national thereof, has at any time on or since the effective date of this section had any interest of any nature whatsoever, direct or indirect:

(1) All transfers of credit and all payments between, by, through, or to any banking institution or banking institutions wheresoever located, with respect to any property subject to the jurisdic

tion of the United States or by any person (including a banking institution) subject to the jurisdiction of the United States;

(2) All transactions in foreign exchange by any person within the United States; and

(3) The exportation or withdrawal from the United States of gold or silver coin or bullion, currency or securities, or the earmarking of any such property, by any person within the United States.

(b) All of the following transactions are prohibited, except as specifically authorized by the Secretary of the Treasury (or any person, agency, or instrumentality designated by him) by means of regulations, rulings, instructions, licenses, or otherwise, if such transactions involve property in which any designated foreign country, or any national thereof, has at any time on or since the effective date of this section had any interest of any nature whatsoever, direct or indirect:

(1) All dealings in, including, without limitation, transfers, withdrawals, or exportations of, any property or evidences of indebtedness or evidences of ownership of property by any person subject to the jurisdiction of the United States; and

(2) All transfers outside the United States with regard to any property or property interest subject to the jurisdiction of the United States.

(c) Any transaction for the purpose or which has the effect of evading or avoiding any of the prohibitions set forth in paragraphs (a) or (b) of this section is hereby prohibited.

(d) The term "designated foreign 'country" means a foreign country in the following schedule and the term "effective date" and the term "effective date of this section" mean with respect to any designated foreign country, or any national thereof, 12:01 a.m., eastern standard time of the date specified in the following schedule:

SCHEDULE

COUNTRY AND EFFECTIVE DATE

1. China: December 17, 1950.

2. North Korea, i.e., Korea north of the 38th parallel of north latitude: December 17, 1950.

3. North Viet-Nam, i.e., Viet-Nam north of the 17th parallel of north latitude: May 5, 1964.

With respect to any country and for any other purpose for which an "effective date" is not otherwise provided the "effective date" shall be December 17, 1950.

[15 F.R. 9040, Dec. 19, 1950, as amended at 18 F.R. 2079, Apr. 14, 1953; 29 F.R. 6010, May 7, 1964]

§ 500.202 Transactions with respect to securities registered or inscribed in the name of a designated national. Unless authorized by a license expressly referring to this section, the acquisition, transfer (including the transfer on the books of any issuer or agent thereof), disposition, transportation, importation, exportation, or withdrawal of, or the endorsement or guaranty of signatures on, or otherwise dealing in any security (or evidence thereof) registered or inscribed in the name of any designated national is prohibited irrespective of the fact that at any time (either prior to, on or subsequent to the "effective date") the registered or inscribed owner thereof may have, or appears to have, assigned, transferred or otherwise disposed of any such security.

§ 500.203

Effect of transfers violating the provisions of this chapter. (a) Any transfer after the "effective date" which is in violation of any provision of this chapter or of any regulation, ruling, instruction, license, or other direction or authorization thereunder and involves any property in which a designated national has or has had an interest since such "effective date" is null and void and shall not be the basis for the assertion or recognition of any interest in or right, remedy, power or privilege with respect to such property.

(b) No transfer before the "effective date" shall be the basis for the assertion or recognition of any right, remedy, power, or privilege with respect to, or interest in, any property in which a designated national has or has had an interest since the "effective date" unless the person with whom such property is held or maintained had written notice of the transfer or by any written evidence had recognized such transfer prior to such "effective date."

(c) Unless otherwise provided, an appropriate license or other authorization issued by or pursuant to the direction or authorization of the Secretary of the Treasury before, during or after a transfer shall validate such transfer or render it enforceable to the same extent as it would be valid or enforceable but for

the provisions of section 5(b) of the Trading With the Enemy Act, as amended, and this chapter and any ruling, order, regulation, direction or instruction issued thereunder.

(d) Transfers of property which otherwise would be null and void, or unenforceable, by virtue of the provisions of this section shall not be deemed to be null and void, or unenforceable pursuant to such provisions, as to any person with whom such property was held or maintained (and as to such person only) in cases in which such person is able to establish each of the following:

(1) Such transfer did not represent a willful violation of the provisions of this chapter by the person with whom such property was held or maintained;

(2) The person with whom such property was held or maintained did not have reasonable cause to know or suspect, in view of all the facts and circumstances known or available to such person, that such transfer required a license or authorization by or pursuant to the provisions of this chapter and was not so licensed or authorized or if a license or authorization did purport to cover the transfer, that such license or authorization had been obtained by misrepresentation or the withholding of material facts or was otherwise fraudulently obtained; and

(3) Promptly upon discovery that:

(i) Such transfer was in violation of the provisions of this chapter or any regulation, ruling, instruction, license or other direction or authorization thereunder, or

(ii) Such transfer was not licensed or authorized by the Secretary of the Treasury, or

(iii) If a license did purport to cover the transfer, such license had been obtained by misrepresentation or the withholding of material facts or was otherwise fraudulently obtained;

the person with whom such property was held or maintained filed with the Treasury Department, Washington, D.C. 20220, a report in triplicate setting forth in full the circumstances relating to such transfer. The filing of a report in accordance with the provisions of this paragraph shall not be deemed to be compliance or evidence of compliance with paragraph (d) (1) and (2) of this section.

(e) Unless licensed or authorized by § 500.504 or otherwise licensed or au

thorized pursuant to this chapter any attachment, judgment, decree, lien, execution, garnishment, or other judicial process is null and void with respect to any property in which on or since the "effective date" there existed the interest of a designated foreign country or national thereof.

(f) For the purpose of this section the term "property" includes gold, silver, bullion, currency, coin, credit, securities (as that term is defined in section 2 (1) of the Securities Act of 1933, as amended), bills of exchange, notes, drafts, acceptances, checks, letters of credit, book credits, debts, claims, contracts, negotiable documents of title, mortgages, liens, annuities, insurance policies, options and futures in commodities, and evidences of any of the foregoing. The term "property" shall not, except to the extent indicated, be deemed to include chattels or real property.

§ 500.204 Importation of and dealings in certain merchandise.

(a) Except as specifically authorized by the Secretary of the Treasury (or any person, agency, or instrumentality designated by him) by means of regulations, or rulings, instructions, licenses, or otherwise, persons subject to the jurisdiction of the United States may not purchase, transport, import, or otherwise deal in or engage in any transaction with respect to any merchandise outside the United States specified in following subparagraph (1) of this paragraph, and they may not import into the United States merchandise specified in following subparagraphs (2), (3), or (4) of this paragraph:

(1) Merchandise the country of origin of which is China (except Formosa), North Korea, or North Viet-Nam. Articles which are the growth, produce or manufacture of these areas shall be deemed for the purposes of this chapter to be merchandise whose country of origin is China (except Formosa), North Korea, or North Viet-Nam, notwithstanding that they may have been subjected to one or any combination of the following processes in another country: (i) Grading; (ii) testing; (iii) checking; (iv) shredding; (v) slicing; (vi) peeling or splitting; (vii) scraping; (viii) cleaning; (ix) washing; (x) soaking; (xi) drying; (xii) cooling, chilling, or refrigerating; (xiii) roasting; (xiv) steaming; (xv) cooking; (xvi) curing; (xvii) combining of fur skins into plates; (xviii)

blending; (xix) flavoring; (xx) preserving; (xxi) pickling; (xxii) smoking; (xxiii) dressing; (xxiv) salting; (xXV) dyeing; (xxvi) bleaching; (xxvii) tanning; (xxviii) packing; (xxix) canning; (xxx) labeling; (xxxi) carding; (xxxii) combing; (xxxiii) pressing; (xxxiv) any process similar to any of the foregoing. Any article wheresoever manufactured shall be deemed for the purposes of this chapter to be merchandise whose country of origin is China (except Formosa), North Korea, or North Viet-Nam, if there shall have been added to such articles any embroidery, needle point, petit point, lace or any other article of adornment which is the product of China (except Formosa), North Korea, or North VietNam notwithstanding that such addition to the merchandise may have occurred in a country other than China (except Formosa), North Korea, or North VietNam.

(2) Merchandise specified in this subparagraph, howsoever processed, unless such merchandise originated in a country named as excepted for that type of merchandise and is imported into the United States directly from that country:

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