[Code of Federal Regulations]

[Title 31, Volume 3]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 31CFR515.205]



[Page 94-95]

 

                  TITLE 31--MONEY AND FINANCE: TREASURY

 

 CHAPTER V--OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY

 

PART 515_CUBAN ASSETS CONTROL REGULATIONS--Table of Contents

 

                         Subpart B_Prohibitions

 

Sec.  515.205  Holding of certain types of blocked property in 

interest-bearing accounts.



    (a) Except as provided by paragraphs (d), (e) and (f) of this 

section, or as authorized by the Secretary of the Treasury or his 

delegate by specific license, any person holding any property included 

in paragraph (h) of this section is prohibited from holding, 

withholding, using, transferring, engaging in any transactions 

involving, or exercising any right, power, or privilege with respect to 

any such property, unless it is held in an interest-bearing account in a 

domestic bank.

    (b) Any person presently holding property subject to the provisions 

of paragraph (a) of this section which, as of the effective date of this 

section, is not being held in accordance with the provisions of that 

paragraph shall transfer such property to or hold such property or cause 

such property to be held in an interest-bearing account in any domestic 

bank within 30 days of the effective date of this section.

    (c) Any person holding any checks or drafts subject to the 

provisions of Sec.  515.201 is authorized and directed, wherever 

possible consistent with state law (except as otherwise specifically 

provided in paragraph (c)(3) of this section), to negotiate or present 

for collection or payment such instruments and credit the proceeds to 

interest-bearing accounts. Any transaction by any person incident to the 

negotiation, processing. presentment, collection or payment of such 

instruments and deposit of the proceeds into an interest-bearing account 

is hereby authorized: Provided that:

    (1) The transaction does not represent, directly or indirectly, a 

transfer of the interest of a designated national to any other country 

or person;

    (2) The proceeds are held in a blocked account indicating the 

designated national who is the payee or owner of the instrument; and,

    (3) In the case of a blocked check or draft which has been purchased 

by the maker/drawer from the drawee bank (e.g., cashier's check, money 

order, or traveler's check) or which is drawn against a presently 

existing account, such bank, on presentment of the instrument in 

accordance with the provisions of this section, shall either:

    (i) Pay the instrument (subject to paragraphs (c)(1) and (2) of this 

section) or

    (ii) Credit a blocked account on its books with the amount payable 

on the instrument.



In either event, the blocked account shall be identified as resulting 

from the proceeds of a blocked check or draft, and the identification 

shall include a reference to the names of both the maker and payee of 

the instrument.

    (d) Property subject to the provisions of paragraph (a) or (b) of 

this section, held by a person claiming a set-off against such property, 

is exempt from the provisions of paragraphs (a), (b) and (c) of this 

section to the extent of the set-off: Provided however, That interest 

shall be due from 30 days after the effective date of this section if it 

should ultimately be determined that the claim to a set-off is without 

merit.

    (e) Property subject to the provisions of paragraphs (a) and (b) of 

this section, held in a customer's account by a registered broker/dealer 

in securities, may continue to be held for the customer by the broker/

dealer provided interest is credited to the account on any balance not 

invested in securities in accordance with Sec.  515.513. The interest 

paid on such accounts by a broker/dealer who does not elect to hold such 

property for a customer's account in a



[[Page 95]]



domestic bank shall not be less than the maximum rate payable on the 

shortest time deposit available in any domestic bank in the jurisdiction 

in which the broker/dealer holds the account.

    (f) Property subject to the provisions of paragraphs (a) and (b) of 

this section, held by a state agency charged with the custody of 

abandoned or unclaimed property under Sec.  515.554 may continue to be 

held by the agency provided interest is credited to the blocked account 

in which the property is held by the agency, or the property is held by 

the agency in a blocked account in a domestic bank. The interest 

credited to such accounts by an agency which does not elect to hold such 

property in a domestic bank shall not be less than the maximum rate 

payable on the shortest time deposit available in any domestic bank in 

the state.

    (g) For purposes of this section, the term interest-bearing account 

means a blocked account earning interest at no less than the maximum 

rate payable on the shortest time deposit in the domestic bank where the 

account is held: Provided however, That such an account may include six-

month Treasury bills or insured certificates, with a maturity not 

exceeding six-months, appropriate to the amounts involved.

    (h) The following types of property are subject to paragraphs (a) 

and (b) of this section:

    (1) Any currency, bank deposit and bank accounts subject to the 

provisions of Sec.  515.201;

    (2) Any property subject to the provisions of Sec.  515.201 which 

consists, in whole or in part, of undisputed and either liquidated or 

matured debts, claims, obligations or other evidence of indebtedness, to 

the extent of any amount that is undisputed and liquidated or matured; 

and

    (3) Any proceeds resulting from the payment of an obligation under 

paragraph (c) of this section.

    (i) For purposes of this section, the term domestic bank includes 

any FSLIC-insured institution (as defined in 12 CFR 561.1).

    (j) For the purposes of this section the term person includes the 

United States Government or any agency or instrumentality thereof, 

except where the agency or instrumentality submits to the Office of 

Foreign Assets Control an opinion of its General Counsel that either:

    (1) It lacks statutory authority to comply with this section, or

    (2) The requirements of paragraphs (a) and (b) of this section are 

inconsistent with the statutory program under which it operates.



[44 FR 11770, Mar. 2, 1979]