International Law Advisory - Regulations implementing Presidential Executive Order 13288

This is to advise you that the Department of Treasury, Office of Foreign Assets Control (“OFAC”) yesterday issued regulations implementing Presidential Executive Order 13288 (March 10, 2003), which blocked the assets of certain persons in Zimbabwe who have been deemed to have contributed to the deteriorating political and economic environment in Zimbabwe.  The implementing regulations have been published in today’s Federal Register (69 Fed. Reg. 45,246) and are effective.  OFAC has invited interested parties to submit comments on the regulations; the deadline for submitting comments is September 27, 2004.

Pursuant to the new regulations (and as originally set forth in the Executive Order), all “property and interests in property” of designated persons that come within the United States, or the possession/control of U.S. persons, are blocked and “may not be transferred, paid, exported, withdrawn, or otherwise dealt in.”  U.S. persons who assume possession/control of blocked funds must hold those funds in an interest-bearing account, and are subject to certain restrictions (set forth in the regulations) as to how the funds may be invested.  Notably, the regulations specifically prohibit dealing in securities “inscribed in the name of or known to be held for the benefit of” blocked persons, and also prohibit the provision of services to blocked persons (except for certain medical and legal services). 

A copy of the new regulations are attached to this advisory.  OFAC will maintain a list of names of those who are designated as blocked persons under the regulations, which it will periodically update (the list is available for review on OFAC’s website). Companies should update their OFAC compliance screening mechanisms to ensure that any existing business relationships or transactions, and any relationships or transactions in the future, are in compliance with the regulations issued today.

We will advise you of any further developments regarding sanctions against Zimbabwe.  If you have questions regarding the attached regulation, please contact Ed Krauland (202-429-8083) or David Lorello (202-429-6757).