31 C.F.R. Subpart D—Interpretations
Title 31 - Money and Finance: Treasury
Except as otherwise specified, reference to any provision in or appendix to this part or chapter or to any regulation, ruling, order, instruction, direction, or license issued pursuant to this part refers to the same as currently amended. Unless otherwise specifically provided, any amendment, modification, or revocation of any provision in or appendix to this part or chapter or of any order, regulation, ruling, instruction, or license issued by or under the direction of the Director of the Office of Foreign Assets Control does not affect any act done or omitted, or any civil or criminal suit or proceeding commenced or pending prior to such amendment, modification, or revocation. All penalties, forfeitures, and liabilities under any such order, regulation, ruling, instruction, or license continue and may be enforced as if such amendment, modification, or revocation had not been made. (a) Whenever a transaction licensed or authorized by or pursuant to this part results in the transfer of property (including any property interest) away from a person, such property shall no longer be deemed to be property blocked pursuant to §537.201(a), unless there exists in the property another interest that is blocked pursuant to §537.201(a) or any other part of this chapter, the transfer of which has not been effected pursuant to license or other authorization. (b) Unless otherwise specifically provided in a license or authorization issued pursuant to this part, if property (including any property interest) is transferred or attempted to be transferred to a person whose property or interests in property are blocked pursuant to §537.201(a), such property shall be deemed to be property in which that person has an interest and therefore blocked. (a) Any transaction ordinarily incident to a licensed transaction and necessary to give effect thereto is also authorized, except: (1) A transaction, not explicitly authorized within the terms of the license, by or with a person whose property or interests in property are blocked pursuant to §537.201(a), except as provided in paragraph (b) of this section; or (2) A transaction, not explicitly authorized within the terms of the license, involving a debit to a blocked account or a transfer of blocked property, except as provided in paragraph (b) of this section. (b) Transactions licensed pursuant to subpart E of this part and those transactions falling within the scope of paragraph (a) of this section are authorized even though they may involve transfers to or from an account of a financial institution whose property or interests in property are blocked pursuant to §537.201(a), provided that the account is not on the books of a financial institution that is a U.S. person. (a) Except as provided in §537.210, the prohibitions on transactions involving blocked property contained in §537.201 apply to services performed in the United States or by U.S. persons, wherever located, including by an overseas branch of an entity located in the United States: (1) On behalf of or for the benefit of a person whose property or interests in property are blocked pursuant to §537.201(a); or (2) With respect to property interests subject to §537.201. (b) Example: U.S. persons may not, except as authorized by or pursuant to this part, provide legal, accounting, financial, brokering, freight forwarding, transportation, public relations, or other services to a person whose property or interests in property are blocked pursuant to §537.201(a).
NOTE TO §537.405: See §§537.507 and 537.508 on licensing policy with regard to the provision of certain legal or medical services, respectively. The prohibitions in §537.201 on transactions involving blocked property apply to transactions by any U.S. person in a location outside the United States with respect to property that the U.S. person knows, or has reason to know, is held in the name of a person whose property or interests in property are blocked pursuant to §537.201(a) or in which the U.S. person knows, or has reason to know, a person whose property or interests in property are blocked pursuant to §537.201(a) has or has had an interest since the effective date. Pursuant to §537.201, no debits may be made to a blocked account to pay obligations to U.S. persons or other persons, except as authorized by or pursuant to this part. A setoff against blocked property (including a blocked account), whether by a U.S. bank or other U.S. person, is a prohibited transfer under §537.201 if effected after the effective date. Section 537.210(c) exempts from all prohibitions contained in this part, except those contained in §537.203, activities undertaken by a U.S. person pursuant to an agreement entered into prior to May 21, 1997, between a U.S. person and the Government of Burma or a nongovernmental entity in Burma. A U.S. person who is a party to a pre-May 21, 1997 agreement falling outside the scope of §537.203 may enter into subsequent agreements with foreign persons where such agreements are pursuant to, or in exercise of rights under, the pre-May 21, 1997 agreement and are specifically contemplated by the pre-May 21, 1997 agreement. The exercise of rights under a pre-May 21, 1997 agreement falling outside the scope of §537.203 may include the exercise of options to extend the contract, depending on such factors as the degree of specificity with which the option to extend is described in the pre-May 21, 1997 agreement, and the degree to which the party wishing to renew can enforce its decision to exercise the option. Section 537.204 prohibits new investment in Burma by U.S. persons. Section 537.311 defines the term new investment to include certain contracts providing for the general supervision and guarantee of another person's performance of a contract that includes the economic development of resources located in Burma. With respect to entry into such contracts, only the following will be considered new investment in Burma: (a) Entry into contracts for supervision and guarantee at the highest level of project management, such as entry into a contract with a development project's sponsor or owner to become a prime contractor or general manager for a development project; (b) Entry into subcontracts where the functional scope of the subcontractor's obligations is substantially similar to that of a prime contractor's or general manager's obligations for a development project; or (c) Entry into a contract or subcontract where the consideration includes a share of ownership in, or participation in the royalties, earnings or profits of, the economic development of resources located in Burma. The purchase, directly or indirectly, from the Government of Burma or a nongovernmental entity in Burma of shares of ownership, including an equity interest, in the economic development of resources located in Burma is prohibited unless the purchase is pursuant to an agreement entered into prior to May 21, 1997. (a) The purchase of shares in a third-country company that is engaged in the economic development of resources located in Burma is prohibited by §537.204 where the company's profits are predominantly derived from the company's economic development of resources located in Burma. (b) If a U.S. person holds shares in an entity which subsequently engages predominantly in the economic development of resources located in Burma or subsequently derives its income exclusively or predominantly from such economic development, the U.S. person is not required to relinquish its shares, but may not purchase additional shares. Divestiture of the shares in such an entity to a foreign person—otherwise constituting the facilitation of that foreign person's investment in Burma—is authorized under general license pursuant to §537.524. The sale to a foreign person of a U.S. person's equity or income interest in a development project in Burma constitutes facilitation of that foreign person's investment in Burma, unless pursuant to a pre-May 21, 1997 agreement. Such a sale, however, is authorized by general license under §537.524.
Title 31: Money and Finance: Treasury
PART 537—BURMESE SANCTIONS REGULATIONS
Subpart D—Interpretations
§ 537.401 Reference to amended sections.
§ 537.402 Effect of amendment.
§ 537.403 Termination and acquisition of an interest in blocked property.
§ 537.404 Transactions incidental to a licensed transaction authorized.
§ 537.405 Provision of services.
§ 537.406 Offshore transactions.
§ 537.407 Payments from blocked accounts to satisfy obligations prohibited.
§ 537.408 Setoffs prohibited.
§ 537.409 Activities under pre-May 21, 1997 agreements.
§ 537.410 Contracts and subcontracts regarding economic development of resources in Burma.
§ 537.411 Purchase of shares in economic development projects in Burma.
§ 537.412 Investments in entities involved in economic development projects in Burma.
§ 537.413 Sale of interest in economic development projects in Burma.
