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Code of Federal Regulations Title 31. Money and Finance–Treasury § 31.561.205 Metals-related sanctions on certain foreign financial institutions

Current as of January 02, 2025 | Updated by Findlaw Staff

(a) Imposition of sanctions. Subject to the exemptions set forth in paragraph (d) of this section, upon a determination by the Secretary of the Treasury, in consultation with the Secretary of State, that a foreign financial institution has, on or after May 8, 2019, knowingly engaged in one or more of the activities described in paragraph (b) of this section, the Secretary of the Treasury may:

(1) Prohibit U.S. financial institutions from opening a correspondent account or a payable-through account in the United States for the foreign financial institution with respect to which the determination has been made;  and either

(2)(i) Prohibit U.S. financial institutions from maintaining a correspondent account or a payable-through account in the United States for the foreign financial institution with respect to which the determination has been made;  or

(ii) Impose one or more strict conditions on the maintaining of a correspondent account or payable-through account in the United States for the foreign financial institution with respect to which the determination has been made.

Note 1 to paragraph (a):  The name of any foreign financial institution with respect to which a determination has been made pursuant to this paragraph (a), along with the relevant sanctions to be imposed (prohibition(s) and/or strict condition(s)), will be added to the List of Foreign Financial Institutions Subject to Correspondent Account or Payable–Through Account Sanctions (CAPTA List), which is maintained on the Office of Foreign Assets Control's website (www.treasury.gov/ofac), and published in the Federal Register.

Note 2 to paragraph (a):  See § 561.203(b) for examples of strict conditions that might be imposed, pursuant to paragraph (a)(2)(ii) of this section, on the maintaining of a correspondent account or payable-through account for a foreign financial institution with respect to which the Secretary of the Treasury's determination has been made.

(b) Sanctionable activity. A foreign financial institution has engaged in an activity described in this paragraph if it knowingly conducted or facilitated, on or after May 8, 2019, any significant financial transaction:

(1) For the sale, supply, or transfer to Iran of significant goods or services used in connection with the iron, steel, aluminum, or copper sectors of Iran;

(2) For the purchase, acquisition, sale, transport, or marketing of iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran;  or

(3) For or on behalf of any person whose property and interests in property are blocked pursuant to Executive Order 13871.

(c) Prohibitions.

(1) A U.S. financial institution shall not open a correspondent account or payable-through account in the United States for a foreign financial institution for which the opening of such an account is prohibited pursuant to paragraph (a)(1) of this section.

(2) A U.S. financial institution shall not maintain a correspondent account or payable-through account in the United States for a foreign financial institution for which the maintaining of such an account is prohibited pursuant to paragraph (a)(2)(i) of this section.

(3) A U.S. financial institution shall not maintain a correspondent account or payable-through account in the United States for a foreign financial institution in a manner that is inconsistent with any strict condition imposed and in effect pursuant to paragraph (a)(2)(ii) of this section.

(4) The prohibitions in paragraphs (c)(1) through (c)(3) of this section apply except to the extent provided by regulations, orders, directives, or licenses that may be issued pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

(d) Exempt activity. Nothing in this section shall apply to transactions for the conduct of the official business of the Federal Government or the United Nations (including its specialized agencies, programmes, funds, and related organizations) by employees, grantees, or contractors thereof.

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Cite this article: FindLaw.com - Code of Federal Regulations Title 31. Money and Finance–Treasury § 31.561.205 Metals-related sanctions on certain foreign financial institutions - last updated January 02, 2025 | https://codes.findlaw.com/cfr/title-31-money-and-finance-treasury/cfr-sect-31-561-205/

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