§566.504 Transactions related to closing a correspondent or payable-through account.
(a) During the 10-day period beginning on the effective date of the prohibition in§566.201(c) on the opening or maintaining of a correspondent account or a payable-through account for a foreign financial institution listed on the List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (CAPTA List), U.S. financial institutions that maintain correspondent accounts or payable-through accounts for the foreign financial institution are authorized to:
(1) Process only those transactions through the account, or permit the foreign financial institution to execute only those transactions through the account, that are for the purpose of, and necessary for, closing the account; and
(2) Transfer the funds remaining in the correspondent account or the payable-through account to an account of the foreign financial institution located outside of the United States and close the correspondent account or the payable-through account.
(b) A report must be filed with OFAC within 30 days of the closure of an account, providing full details on the closing of each correspondent account or payable-through account maintained by a U.S. financial institution for a foreign financial institution whose name is added to the CAPTA List, maintained on OFAC's Web site (www.treasury.gov/ofac) on the Hizballah Sanctions page. Such report must include complete information on the closing of the account and on all transactions processed or executed through the account pursuant to this section, including the account outside of the United States to which funds remaining in the account were transferred. Reports should be addressed to the attention of the Sanctions, Compliance & Evaluation Division, Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW., Freedman's Bank Building, Washington, DC 20220.
(c) Specific licenses may be issued on a case-by-case basis to authorize transactions outside the scope or time period authorized in paragraph (a) by a U.S. financial institution with respect to a correspondent account or a payable-through account maintained by the U.S. financial institution for a foreign financial institution whose name is added to the CAPTA List. License applications should be filed in conformance with §501.801 of the Reporting, Procedures and Penalties Regulations, 31 CFR part 501.
(d) Nothing in this section authorizes the opening of a correspondent account or a payable-through account for a foreign financial institution whose name appears on the CAPTA List.
Note to §566.504: This section does not authorize a U.S. financial institution to unblock property or interests in property, or to engage in any transaction or dealing in property or interests in property, blocked pursuant to any other part of this chapter, in the process of closing a correspondent account or a payable-through account for a foreign financial institution whose name has been added to the CAPTA List, maintained on OFAC's Web site (www.treasury.gov/ofac). See §566.101.
[81 FR 22186, Apr. 15, 2016, as amended at 84 FR 9457, Mar. 15, 2019]
1) Section is substantively similar in the three secondary sanctions regulations that appear in the CFR (the IFSR at 561.504, NKSR at 510.519 and HFSR at 566.504). Note that, as reflected in NKSR, OFAC intends to consolidate all FFIs subject to secondary sanctions in the Correspondent Account or Payable-Through Account Sanctions (CAPTA) List, empty as of Jan, 2019 pending the sanctioning of another bank under a secondary sanctions authority.
2) Amended on 15 Mar. 2019 to change references to the Part 561 List to the CAPTA List.