Removal of Certain Sanctions Regulations Relating to the Former Federal Republic of Yugoslavia

AGENCY:

Office of Foreign Assets Control, Treasury.

ACTION:

Final rule.

SUMMARY:

The Department of the Treasury's Office of Foreign Assets Control (“OFAC”) is removing from the Code of Federal Regulations the Federal Republic of Yugoslavia (Serbia and Montenegro) and Bosnian Serb-Controlled Areas of the Republic of Bosnia and Herzegovina Sanctions Regulations, the Federal Republic of Yugoslavia (Serbia and Montenegro) Kosovo Sanctions Regulations, and the Federal Republic of Yugoslavia (Serbia and Montenegro) Milosevic Sanctions Regulations. Pursuant to Executive Order 13304 of May 28, 2003, the national emergencies with respect to which these regulations had been issued were terminated, and all related Executive orders that had been implemented by these regulations were revoked. In addition, since the date of Executive Order 13304, the successor states to the former Socialist Federal Republic of Yugoslavia have reached an agreement concerning the division of assets of the former Socialist Federal Republic of Yugoslavia, and the statutes of limitations for other claims have run.

DATES:

Effective Date: June 29, 2011.

FOR FURTHER INFORMATION CONTACT:

Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490, Assistant Director for Licensing, tel.: 202-622-2480, Assistant Director for Policy, tel.: 202-622-4855, Office of Foreign Assets Control, or Chief Counsel (Foreign Assets Control), tel.: 202-622-2410, Office of the General Counsel, Department of the Treasury (not toll free numbers).

SUPPLEMENTARY INFORMATION:

Electronic and Facsimile Availability

This document and additional information concerning OFAC are available from OFAC's Web site ( http://www.treasury.gov/ofac ). Certain general information pertaining to OFAC's sanctions programs also is available via facsimile through a 24-hour fax-on demand service, tel.: 202-622-0077.

Background

On May 28, 2003, the President issued Executive Order 13304 (68 FR 32315, May 29, 2003), invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (“IEEPA”) and the National Emergencies Act (50 U.S.C. 1601 et seq.) (the “NEA”). In this order, the President determined that the situations that gave rise to the national emergencies declared in Executive Order 12808 of May 30, 1992 (57 FR 23299, June 2, 1992), and Executive Order 13088 of June 9, 1998 (63 FR 32109, June 12, 1998), with respect to the former Socialist Federal Republic of Yugoslavia have been significantly altered by the peaceful transition to democracy and other positive developments in Serbia and Montenegro (formerly the Federal Republic of Yugoslavia (Serbia and Montenegro) (“FRY(S&M)”)). Executive Order 13304 terminated the national emergencies with respect to the former Socialist Federal Republic of Yugoslavia declared in those orders and revoked those and all related orders, including Executive Order 12810 of June 5, 1992 (57 FR 24347, June 9, 1992), Executive Order 12831 of January 15, 1993 (58 FR 5253, January 21, 1993), Executive Order 12846 of April 25, 1993 (58 FR 25771, April 27, 1993), Executive Order 12934 of October 25, 1994 (59 FR 54117, October 27, 1994), Executive Order 13121 of April 30, 1999 (64 FR 24021, May 5, 1999), and Executive Order 13192 of January 17, 2001 (66 FR 7379, January 23, 2001).

In Executive Order 12808 of May 30, 1992, the President, invoking the authority of, inter alia, IEEPA and the NEA, had declared a national emergency with respect to actions and policies of the Governments of Serbia and Montenegro, acting under the name of the Socialist Federal Republic of Yugoslavia or the Federal Republic of Yugoslavia, in their involvement in and support for groups attempting to seize territory in Croatia and Bosnia-Herzegovina by force and violence. In Executive Order 12934 of October 25, 1994, the President expanded the scope of this national emergency to address the policies and actions of the Bosnian Serb forces and the authorities in the territory they controlled. To implement Executive Order 12808, OFAC issued the Federal Republic of Yugoslavia (Serbia and Montenegro) Sanctions Regulations, 31 CFR part 585 (58 FR 13201, March 10, 1993). These regulations were later renamed the Federal Republic of Yugoslavia (Serbia and Montenegro) and Bosnian Serb-Controlled areas of the Republic of Bosnia and Herzegovina Sanctions Regulations, 31 CFR part 585 (60 FR 34114, June 30, 1995) (the “Part 585 Regulations”), when they were amended to implement Executive Order 12934. The Part 585 Regulations required the blocking of all property and interests in property that were in the United States or within the possession or control of United States persons, including overseas branches, of the Governments of Serbia and Montenegro, in the name of the Governments of the Socialist Federal Republic of Yugoslavia or the Federal Republic of Yugoslavia, or of Bosnian Serb military and paramilitary forces, authorities, and entities.

In Executive Order 13088 of June 9, 1998, the President, invoking the authority of, inter alia, IEEPA and the NEA, had declared a national emergency with respect to the actions and policies of the Governments of the FRY(S&M) and the Republic of Serbia with respect to Kosovo, which, by promoting ethnic conflict and human suffering, threatened to destabilize the countries of the region and to disrupt progress in Bosnia and Herzegovina in implementing the Dayton peace agreement. To implement Executive Order 13088, OFAC issued the Federal Republic of Yugoslavia (Serbia and Montenegro) Kosovo Sanctions Regulations, 31 CFR part 586, (63 FR 54576, October 13, 1998) (the “Part 586 Regulations”). The Part 586 Regulations required the blocking of all property and interests in property that were in the United States or within the possession or control of United States persons, including overseas branches, of the Governments of the FRY(S&M), the Republic of Serbia, and the Republic of Montenegro.

On January 17, 2001, the President issued Executive Order 13192, invoking the authority of, inter alia, IEEPA, the NEA, and section 5 of the United Nations Participation Act, as amended (22 U.S.C. 287c) (the “UNPA”). In Executive Order 13192, the President amended Executive Order 13088 to lift the blocking of property of the Governments of the FRY(S&M), the Republic of Serbia, and the Republic of Montenegro, revoke the trade and investment sanctions against these governments and the FRY(S&M), and introduce new measures to support the work of the International Criminal Tribunal for the former Yugoslavia (“ICTY”), address the illegitimate control over FRY(S&M) political institutions and economic resources or enterprises exercised by former President Slobodan Milosevic and his associates, and counter continuing threats to regional stability and implementation of the Dayton peace agreement. The new measures targeted persons under open indictment by the ICTY and persons exercising illegitimate control over FRY(S&M) political processes or institutions or economic resources or enterprises. To implement the new measures imposed by Executive Order 13192, OFAC issued the Federal Republic of Yugoslavia (Serbia and Montenegro) Milosevic Sanctions Regulations, 31 CFR part 587 (66 FR 50511, October 3, 2001) (the “Part 587 Regulations”). The Part 587 Regulations required the blocking of all property and interests in property that were in the United States or within the possession or control of United States persons, including overseas branches, of (i) persons listed in the Annex to Executive Order 13192 and (ii) persons determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be under open indictment by the ICTY, subject to applicable laws and procedures, or to have sought, or to be seeking, to maintain or reestablish illegitimate control over the political processes or institutions or the economic resources or enterprises of the FRY(S&M), the Republic of Serbia, the Republic of Montenegro, or the territory of Kosovo.

In 2001-2002, before the date of Executive Order 13304, OFAC had issued a series of general licenses and regulatory amendments that had authorized, with certain exceptions, most transactions otherwise prohibited by the Part 585 Regulations and the Part 586 Regulations, and had unblocked most property previously blocked pursuant to those regulations, with the exception of property and interests in property of: (i) Diplomatic and/or consular missions of the former Socialist Federal Republic of Yugoslavia; (ii) persons subject to sanctions under the Western Balkans Stabilization Regulations, 31 CFR part 588, or otherwise subject to sanctions under other parts of 31 CFR chapter V; and (iii) the central bank of the former Socialist Federal Republic of Yugoslavia, i.e., the National Bank of Yugoslavia, blocked pursuant to the Part 585 Regulations.

Section 1 of Executive Order 13304 provides that, pursuant to section 202 of the NEA (50 U.S.C. 1622), termination of the national emergencies declared in Executive Orders 12808 and 13088 shall not affect any action taken or proceeding pending not finally concluded or determined as of the effective date of Executive Order 13304 (May 29, 2003), or any action or proceeding based on any act committed prior to such date or any rights or duties that matured or penalties that were incurred prior to such date.

In addition, section 1 of Executive Order 13304 invokes the authority of section 207 of IEEPA (50 U.S.C. 1706). Section 207(a) of IEEPA allows the President to continue to prohibit transactions involving property in which a foreign country or national thereof has an interest after a national emergency has been terminated if the President determines that the continuation of such a prohibition with respect to that property is necessary on account of claims involving such country or its nationals. Pursuant to section 207(a) of IEEPA, the President determined in section 1 of Executive Order 13304 that continuation of prohibitions with regard to transactions involving property blocked pursuant to Executive Orders 12808 or 13088 that continued to be blocked as of May 29, 2003 (the effective date of Executive Order 13304), was necessary on account of claims involving successor states to the former Socialist Federal Republic of Yugoslavia or other potential claimants.

Since the effective date of Executive Order 13304, the successor states to the former Socialist Federal Republic of Yugoslavia have reached an agreement concerning the division of assets of the former Socialist Federal Republic of Yugoslavia.

Accordingly, OFAC is removing the Federal Republic of Yugoslavia (Serbia & Montenegro) and Bosnian Serb-controlled Areas of the Republic of Bosnia and Herzegovina Sanctions Regulations, 31 CFR part 585, the Federal Republic of Yugoslavia (Serbia & Montenegro) Kosovo Sanctions Regulations, 31 CFR part 586, and the Federal Republic of Yugoslavia (Serbia & Montenegro) Milosevic Sanctions Regulations, 31 CFR part 587, from 31 CFR chapter V. The removal of these three parts from 31 CFR chapter V does not affect ongoing enforcement proceedings or prevent the initiation of enforcement proceedings where the relevant statute of limitations has not run.

Please note that certain transactions relating to the Western Balkans region remain subject to Executive Order 13219 of June 26, 2001, Executive Order 13304 of May 28, 2003, and the Western Balkans Stabilization Regulations, 31 CFR part 588 (the “WBSR”), and property and interests in property blocked pursuant to those Executive Orders and regulations remain blocked. In a separate final rule also published today, OFAC is amending the WBSR to implement Executive Order 13304 and to make other changes.

Public Participation

Because the Regulations involve a foreign affairs function, the provisions of Executive Order 12866 of September 30, 1993, and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

List of Subjects

31 CFR Part 585

• Administrative practice and procedure
• Banking and finance
• Blocking of assets
• Exports
• Federal Republic of Yugoslavia (Serbia and Montenegro)
• Foreign trade
• Imports
• Intellectual property
• Loans
• Penalties
• Reporting and recordkeeping requirements
• Securities
• Services
• Shipping
• Telecommunications
• Transfer of assets
• Vessels

31 CFR Part 586

• Administrative practice and procedure
• Banks
• Banking
• Blocking of assets
• Federal Republic of Yugoslavia (Serbia & Montenegro)
• Investments
• Kosovo
• Montenegro
• New investment
• Penalties
• Reporting and recordkeeping requirements
• Serbia

31 CFR Part 587

• Administrative practice and procedure
• Banks
• Banking
• Blocking of assets
• Credit
• Federal Republic of Yugoslavia (Serbia & Montenegro)
• Investments
• Milosevic
• Penalties
• Reporting and recordkeeping requirements
• Securities
• Services

PARTS 585, 586, AND 587—[REMOVED]

For the reasons set forth in the preamble, under the authority of Executive Order 13304 (68 FR 32315, May 29, 2003) and 50 U.S.C. 1701 et seq., the Department of the Treasury's Office of Foreign Assets Control amends 31 CFR chapter V by removing parts 585, 586, and 587.