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31 CFR § 501.807 Procedures governing delisting from the Specially Designated Nationals and Blocked Persons List (With Version Proposed in 5-8-24 Interim Final Rule)

Date issued: May. 08 2024

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§501.807 Procedures governing delisting from the Specially Designated Nationals and Blocked Persons List.
A person may seek administrative reconsideration of his, her or its designation or that of a vessel as blocked, or assert that the circumstances resulting in the designation no longer apply, and thus seek to have the designation rescinded pursuant to the following administrative procedures:
(a) A person blocked under the provisions of any part of this chapter, including a specially designated national, specially designated terrorist, or specially designated narcotics trafficker (collectively,"a blocked person"), or a person owning a majority interest in a blocked vessel may submit arguments or evidence that the person believes establishes that insufficient basis exists for the designation. The blocked person also may propose remedial steps on the person's part, such as corporate reorganization, resignation of persons from positions in a blocked entity, or similar steps, which the person believes would negate the basis for designation. A person owning a majority interest in a blocked vessel may propose the sale of the vessel, with the proceeds to be placed into a blocked interest-bearing account after deducting the costs incurred while the vessel was blocked and the costs of the sale. This submission must be made in writing and addressed to the Director, Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue, NW.—Annex, Washington, DC 20220.
(b) The information submitted by the blocked person seeking unblocking or by a person seeking the unblocking of a vessel will be reviewed by the Office of Foreign Assets Control, which may request clarifying, corroborating, or other additional information.
(c) A blocked person seeking unblocking or a person seeking the unblocking of a vessel may request a meeting with the Office of Foreign Assets Control; however, such meetings are not required, and the office may, at its discretion, decline to conduct such meetings prior to completing a review pursuant to this section.
(d) After the Office of Foreign Assets Control has conducted a review of the request for reconsideration, it will provide a written decision to the blocked person or person seeking the unblocking of a vessel.
[64 FR 5614, Feb. 4, 1999]

---[WITH VERSION PROPOSED IN 5-10-24 INTERIM FINAL RULE]---

§ 501.807 Procedures governing delisting from the Specially Designated Nationals and Blocked Persons List or any other list of sanctioned persons or property maintained by the Office of Foreign Assets Control.

A person may submit a petition for administrative reconsideration pursuant to the procedures outlined below in order to seek removal of a person or property (e.g., a vessel) from the List of Specially Designated Nationals and Blocked Persons (SDN List) or any other list or identification of sanctioned persons or property maintained by the Office of Foreign Assets Control (OFAC):
(a) A person blocked under the provisions of any part of this chapter, including a specially designated national, specially designated terrorist, specially designated narcotics trafficker, or a person otherwise subject to sanctions pursuant to the provisions of any part of this chapter (each, a “sanctioned person”), or a person owning a majority interest in property (e.g., a vessel) that is blocked or otherwise subject to sanctions may submit arguments or evidence that the person believes establishes that insufficient basis exists for the sanction or that the circumstances resulting in the sanction no longer apply. The sanctioned person also may propose remedial steps on the person’s part, such as corporate reorganization, resignation of persons from positions in a blocked entity, or similar steps, which the person believes would negate the basis for the sanction. A person owning a majority interest in property (e.g., a vessel) that is blocked or otherwise subject to sanctions may propose the sale of the vessel, with the proceeds to be placed into a blocked interest-bearing account after deducting the costs incurred while the vessel was blocked and the costs of the sale. This submission must be made via email to [email protected].
(b) For purposes of reconsideration petitions relating to persons or property sanctioned by OFAC:
(1) The information submitted by the person seeking removal of a person or property from the SDN List or any other list or identification of sanctioned persons or property maintained by OFAC will be reviewed by OFAC, which may request clarifying, corroborating, or other additional information.
(2) A person seeking removal of a person or property from the SDN List or any other list or identification of sanctioned persons or property maintained by OFAC may request a meeting with OFAC; however, such meetings are not required, and the office may, at its discretion, decline to conduct such meetings prior to completing a review pursuant to this section.
(3) After OFAC has conducted a review of the request for reconsideration, it will provide a written decision to the person seeking the removal of a person or property from the SDN List or any other list or identification of sanctioned persons or property maintained by OFAC.
External link location:
https://www.ecfr.gov/cgi-bin/text-idx?SID=39d526b0e9bbc0f7269459b6dd3007ab&mc=true&node=pt31.3.501&rgn=div5#se31.3.501_1807

TURBOFAC Commentary (324 words)

Update – on 5-8-24, OFAC published an “Interim final rule” announcing amendments to this RPPR provision and others, to be effective 90 days after its 5-10-24 publication in the FR. The left side of the screen includes the revised provision and the pre-existing provision. See the back of the PDF file for the Interim final rule and a redline comparing the revised and pre-existing versions.

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Notes:

1) The ins and outs of the process for the delisting of SDNs, which is highly ad hoc, are generally beyond the scope of this project.

For one explanation of a de-listing petition provisionally accepted (and notified to Congress as a result of applicable statutory requirements), see OFAC Notification to Congress of its Intention to Terminate the Sanctions Imposed on En+ Group plc, UC Rusal plc, and JSC EuroSibEnergo.

3) Note that, when a person designated to a typical list-based sanctions program has a stake of 50% or more in an entity, that entity is blocked by operation of law. When there is a divestment occurring wholly outside of the U.S., the entity blocked by operation of law becomes unblocked by operation of law, with no need for petition OFAC pursuant to this or any other provision of law (See FAQ # 402).

4) Procedures apply to non-blocking, list-based programs as well. See FAQ # 897.

5) See notable Terms of Removal agreement Deutsche Forfait Terms of Removal Agreement. See also LICENSE No. TCO-2017-348278-1; PacNet Group Terms of Removal Agreement and Agreement Between EN+ Group Plc, UC Rusal, and OFAC on the Terms of Removal of EN+ Group Plc, UC Rusal Plc, and JSC Eurosibenergo From the SDN List.

6) See Delisting Guidance for Those Designated for Sanctions by the Department of State, in which the State Department adopts delisting procedures based on this provision. The guidance appears to apply in some respects to all SDN delisting petitions.