PART 545--SOUTH AFRICAN TRANSACTIONS REGULATIONS Subpart A--Relation of this Part to Other Laws and Regulations Sec. 545.101 Relation of this part to other laws and regulations. Subpart B--Prohibitions 545.201 Prohibition on importation of South African gold coins. 545.202 Prohibition on loans. 545.203 Effective dates. 545.204 Evasions. 545.205 Prohibition on importation of South African agricultural products and food. 545.206 Prohibition on importation of iron ore, iron and steel. 545.207 Prohibition on sugar imports. 545.208 Prohibition on importation of products from parastatal organizations. 545.209 Prohibition on South African Government bank accounts. 545.210 Prohibition on new investment in South Africa. 545.211 Prohibition on importation of South African uranium ore, uranium oxide, coal, and textiles. Subpart C--General Definitions 545.301 Krugerrands and gold coins. 545.302 United States. 545.303 Importation. 545.304 Loan. 545.305 Financial institution. 545.306 Government of South Africa; South African Government. 545.308 Person. 545.309 Entity. 545.310 Affiliate. 545.311 Prohibited borrower. 545.312 South Africa. 545.313 National of the United States; U.S. national. 545.314 South African entity. 545.315 Parastatal organization. 545.316 The Act. 545.317 Code of Conduct. 545.318 Controlled South African entity. 545.319 New investment. 545.320 Prohibited recipient. 545.321 United States depository institution. Subpart D--Interpretations 545.401 Reference to amended sections. 545.402 Effect of amendment of sections of this chapter or of other orders, etc. 545.403 Krugerrand and gold coin jewelry. 545.404 Rescheduling existing loans. 545.406 Loans through intermediaries. 545.407 Substitution of the South African Government as obligor. 545.408 Approval of loans by foreign affiliates. 545.409 Loan participations. 545.410 South African law. 545.411 Third-country products otherwise exported from South Africa. 545.412 Release from bonded warehouse or foreign trade zone. 545.413 Import prohibitions applied cumulatively. 545.414 U.S. Customs Service rules of origin. 545.415 Trading in South African securities; American Depositary Receipts; recapitalizations. 545.416 Trading in commodities. 545.417 Expenses to comply with Code of Conduct. 545.418 Sales of goods, services, and technology. 545.419 Real estate acquisition. 545.420 Bank accounts in South Africa. 545.421 Charitable contributions. 545.422 Foreign exchange transactions. 545.423 Confirmation of short-term trade credits. 545.424 Firm owned by black South Africans. 545.425 Substantial transformation of uranium ore and oxide. 545.426 Repair of U.S.-origin goods exported by South African parastatals. Subpart E--Licenses, Authorizations and Statements of Licensing Policy 545.501 Effect of subsequent license or authorization. 545.502 Exclusion from licenses and authorizations. 545.503 Loans to benefit persons disadvantaged by the apartheid system. 545.599 Lifting of sanctions. Subpart F--Reports 545.601 Required records. 545.602 Reports to be furnished on demand. 545.603 Registration of new investment in firms owned by black South Africans. 545.604 Registration of contributions necessary to enable a controlled South African entity to operate in an economically sound manner. Subpart G--Penalties 545.701 Penalties. 545.702 Prepenalty notice. 545.703 Presentation responding to prepenalty notice. 545.704 Penalty notice. 545.705 Referral to United States Department of Justice. Subpart H--Procedures 545.801 Licensing. 545.802 Decisions. 545.803 Amendment, modification, or revocation. 545.804 Rulemaking. 545.805 Delegation by the Secretary of the Treasury. 545.806 Rules governing availability of information. 545.807 Certification concerning parastatal organizations. 545.808 Certification concerning hides, skins, leather, and furskins of animals from the wild. Subpart I--Miscellaneous 545.901 Paperwork Reduction Act notice. Authority: 22 U.S.C. 5001 - 5116, E.O. 12571, 51 FR 39505, October 29, 1986. Source: 50 FR 41682, Oct. 15, 1985, unless otherwise noted. Subpart A--Relation of this Part to Other Laws and Regulations 545.101 Relation of this part to other laws and regulations. (a) This part is independent of the other parts of this chapter. No license or authorization contained in or issued pursuant to the other parts of this chapter authorizes any transaction prohibited by this part. In addition, no license or authorization contained in or issued pursuant to any other provision of law or regulation authorizes any transaction prohibited by this part. (b) No license or authorization contained in or issued pursuant to this part relieves the involved parties from complying with any other applicable laws or regulations. [51 FR 41907, Nov. 19, 1986] Subpart B--Prohibitions 545.201 Prohibition on importation of South African gold coins. No person, including a bank, may import into the United States any South African Krugerrand, or any other gold coin minted in South Africa or offered for sale by the Government of South Africa. [51 FR 41907, Nov. 19, 1986] 545.202 Prohibition on loans. (a) No national of the United States or financial institution in the United States may make or approve any loan or other extension of credit, directly or indirectly, to the Government of South Africa or to any corporation, partnership or other organization which is owned or controlled by the Government of South Africa. (b) The prohibition contained in paragraph (a) of this section shall not apply to: (1) A loan or extension of credit for any education, housing, health, or humanitarian benefit which (i) is available to all persons on a nondiscriminatory basis; or (ii) is available in a geographic area accessible to all population groups without any legal or administrative restriction, provided that no such loan shall be made without first obtaining a specific license pursuant to 545.503; or (2) A loan or extension of credit by a national of the United States that is not a financial institution in the United States, for which an agreement was entered into before October 2, 1986, or a loan or extension of credit by a financial institution in the United States for which an agreement was entered into before September 9, 1985. [51 FR 41907, Nov. 19, 1986] 545.203 Effective dates. (a) The effective date of the import prohibition in 545.201 with respect to Krugerrands is 12:01 a.m. Eastern Daylight Time, October 11, 1985. The effective date of all other prohibitions in 545.201 is 12:01 a.m. Eastern Daylight Time, October 2, 1986. (b) The effective date of the prohibition in 545.202 with respect to financial institutions in the United States is 12:01 a.m. Eastern Standard Time, November 11, 1985. The effective date with respect to nationals of the United States that are not financial institutions in the United States is 12:01 a.m. Eastern Daylight Time, October 2, 1986. (c) The effective date of the prohibitions in 545.205 and 545.207 is 12:01 a.m. Eastern Daylight Time, October 3, 1986. (d) The effective date of the prohibitions in 545.206 and 545.208 is 12:01 a.m. Eastern Daylight Time, October 2, 1986. (e) The effective date of the prohibitions in 545.209 and 545.210 is 12:01 a.m. Eastern Standard Time, November 16, 1986. (f) The effective date of the prohibition in 545.211 is 12:01 a.m. Eastern Standard Time, December 31, 1986. [51 FR 41907, Nov. 19, 1986, as amended at 51 FR 46854, Dec. 29, 1986; 52 FR 7274, Mar. 10, 1987] 545.204 Evasions. The regulations set forth in this part shall apply to any person who undertakes or causes to be undertaken any transaction or activity with the intent to evade Executive Order 12532, Executive Order 12535, the Act, or these regulations. [51 FR 41907, Nov. 19, 1986] 545.205 Prohibition on importation of South African agricultural products and food. No (a) agricultural commodity or product or any byproduct or derivative thereof that is a product of South Africa, or (b) article that is suitable for human consumption that is a product of South Africa, may be imported into the United States. [51 FR 41907, Nov. 19, 1986] 545.206 Prohibition on importation of iron ore, iron and steel. No iron or steel produced or iron ore extracted in South Africa may be imported into the United States, except that any such commodity may be imported pursuant to a contract entered into before August 15, 1986, if no shipment of such commodity is imported by a national of the United States under such contract after December 31, 1986. [51 FR 41907, Nov. 19, 1986] 545.207 Prohibition on sugar imports. No sugars, sirups, or molasses that are products of the Republic of South Africa may be imported into the United States. [51 FR 41907, Nov. 19, 1986] 545.208 Prohibition on importation of products from parastatal organizations. (a) No article which is grown, produced, manufactured, marketed, or otherwise exported by a parastatal organization of South Africa may be imported into the United States, except for: (1) Those strategic minerals for which the President has certified to the Congress that the quantities essential for the economy or defense of the United States are unavailable from reliable and secure suppliers; and (2) Except as otherwise provided in this part, any article to be imported pursuant to a contract entered into before August 15, 1986, provided that no shipments may be received by a national of the United States under such contract after April 1, 1987. (b) Pursuant to 545.413 of this part, articles grown, produced, manufactured, marketed, or otherwise exported by a parastatal organization of South Africa, the importation of which is otherwise banned pursuant to subpart B of this part, are not eligible for importation pursuant to section 303(a)(1) of the Act or 545.208(a)(2) of this part. (c) Nothing in this section prohibits the importation into the United States of any publication, including any book, newspaper, magazine, film, phonograph record, tape recording, photograph, microfilm, microfiche, poster, or any other similar material. [51 FR 41907, Nov. 19, 1986] 545.209 Prohibition on South African Government bank accounts. A United States depository institution may not accept, receive, or hold a deposit account from the Government of South Africa or from any agency or entity owned or controlled by the Government of South Africa, except for such accounts which may be authorized pursuant to specific license for diplomatic or consular purposes. [51 FR 46854, Dec. 29, 1986] 545.210 Prohibition on new investment in South Africa. (a) No national of the United States may, directly or through another person, make any new investment in South Africa. (b) The prohibition contained in this section shall not apply to a firm owned by black South Africans, provided that prior registration of new investment in such a firm is filed pursuant to 545.603. [51 FR 46854, Dec. 29, 1986] 545.211 Prohibition on importation of South African uranium ore, uranium oxide, coal, and textiles. (a) Notwithstanding any other provision of law, no (1) uranium ore, (2) uranium oxide, (3) coal, or (4) textiles that are produced or manufactured in South Africa may be imported into the United States. (b) For purposes of this section, the term `'textiles'' does not include any article provided for in item 812.10 or 813.10 of the Tariff Schedules of the United States, 19 U.S.C. 1202. [52 FR 7273, Mar. 10, 1987] Subpart C--General Definitions 545.301 Krugerrands and gold coins. The terms Krugerrands and gold coins include Krugerrands and gold coins of all denominations and sizes, and Krugerrands and gold coins that have been modified, as by addition of a clasp or loop, into items that can be worn as jewelry. [51 FR 41907, Nov. 19, 1986] 545.302 United States. The term United States includes the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States. [51 FR 41907, Nov. 19, 1986] 545.303 Importation. The term importation means the bringing of any item within the jurisdictional limits of the United States with the intent to unlade it. [50 FR 46726, Nov. 12, 1985] 545.304 Loan. (a) The term loan means any transfer or extension of funds or credit on the basis of an obligation to repay, or any assumption or guarantee of the obligation of another to repay an extension of funds or credit, including, but not limited to, overdrafts; currency swaps; the purchase by a financial institution in the United States of debt securities issued by the Government of South Africa after November 11, 1985; the purchase of debt or equity securities issued by the Government of South Africa or a South African entity on or after October 2, 1986; the purchase of a loan made by another person; the sale of financial assets, including precious metals, subject to an agreement to repurchase; a renewal or refinancing whereby new funds or credits are transferred or extended to a prohibited borrower or recipient; or the issuance of a standby letter of credit. (b) The term loan does not include normal short-term trade financing for goods or services having a maturity not exceeding one year, as by commercial letters of credit, bankers' acceptances eligible for discount by a Federal Reserve Bank pursuant to paragraph 7 of section 13 of the Federal Reserve Act (12 U.S.C. 372), or similar trade credits; sales on open account in cases where such sales are normal business practice; or the rescheduling of existing loans, if no new funds or credits are thereby transferred or extended to a prohibited borrower or recipient. [51 FR 46854, Dec. 29, 1986] 545.305 Financial institution. The term financial institution means any entity engaged in the business of accepting deposits or making, transferring, holding, or brokering loans, including, but not limited to, banks, savings banks, trust companies, savings and loans associations, credit unions, securities brokers and dealers, investment companies, employee pension plans, holding companies of such institutions, and subsidiaries of any of the foregoing. [50 FR 46727, Nov. 12, 1985] 545.306 Government of South Africa; South African Government. The term Government of South Africa and South African Government include the government of the Republic of South Africa; the South African Reserve Bank; the government of any political subdivision of South Africa; the government of any territory under the administration, legal or illegal, of South Africa; the governments of the ``bantustans'' or ``homelands,'' to which South African blacks are assigned on the basis of ethnic origin, including the Transkei, Bophuthatswana, Ciskei, and Venda; and any entity controlled by the foregoing. [51 FR 41908, Nov. 19, 1986, as amended at 51 FR 46854, Dec. 29, 1986; 55 FR 10618, Mar. 22, 1990] 545.308 Person. The term person means an individual or an entity. [50 FR 46727, Nov. 12, 1985] 545.309 Entity. The term entity means a corporation, partnership, association, or other organization. [50 FR 46727, Nov. 12, 1985] 545.310 Affiliate. The term affiliate includes, but is not limited to, an office, branch, or subsidiary. [51 FR 41908, Nov. 19, 1986] 545.311 Prohibited borrower. The term prohibited borrower means a person, including the Government of South Africa, to whom the making of a loan or other extension of credit is prohibited by the terms of 545.202(a) or 545.210(a). [51 FR 46854, Dec. 29, 1986] 545.312 South Africa. The term South Africa includes the Republic of South Africa; any territory under the administration, legal or illegal, of South Africa; and the ``bantustans'' or ``homelands,'' to which South African blacks are assigned on the basis of ethnic origin, including the Transkei, Bophuthatswana, Ciskei, and Venda. [51 FR 41908, Nov. 19, 1986, as amended at 55 FR 10618, Mar. 22, 1990] 545.313 National of the United States; U.S. national. The terms national of the United States and U.S. national mean: (a) A natural person who is a citizen of the United States, or who owes permanent allegiance to the United States, or is an alien lawfully admitted for permanent residence in the United States, as defined by section 101(a)(20) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(20)); or (b) A corporation, partnership, or other business association which is organized under the laws of the United States, any State or territory thereof, or the District of Columbia, including foreign branches and offices of such entities. (c) For purposes of 545.206, 545.208, and 545.210 of this part, the terms national of the United States and U.S. national also mean a person located in the United States. [51 FR 41908, Nov. 19, 1986, as amended at 51 FR 46854, Dec. 29, 1986] 545.314 South African entity. The term South African entity means: (a) A corporation, partnership, or other business association or entity organized in South Africa; or (b) A branch, office, agency, or sole proprietorship in South Africa of a person that resides or is organized outside South Africa. [51 FR 41908, Nov. 19, 1986] 545.315 Parastatal organization. (a) For purposes of 545.208, the term parastatal organization means a corporation, partnership, or entity owned, controlled or subsidized by the Government of South Africa, but does not mean a corporation, partnership, or entity which previously received start-up assistance from the South African Industrial Development Corporation but which is now privately owned. (b) Pursuant to section 2 of Executive Order 12571, 51 FR 39505 (Oct. 29, 1986), the Secretary of State is responsible for determining which entities are parastatal organizations for purposes of this part. The Secretary of State will publish periodic notices in the Federal Register containing current lists of parastatal organizations. Determinations by the Department of State will be used as the exclusive guide for determining which South African entities are parastatal. Persons with specific questions concerning parastatal organizations may contact the Department of State, Office of Southern African Affairs, Washington, DC 20520. [51 FR 41908, Nov. 19, 1986] 545.316 The Act. The term the Act means the Comprehensive Anti-Apartheid Act of 1986, Pub. L. 99 - 440, 100 Stat. 1086, as amended by H.J. Res. 756, Pub. L. 99 - 631. [51 FR 41908, Nov. 19, 1986] 545.317 Code of Conduct. The term Code of Conduct means the Code of Conduct set forth in 208(a) of the Act, as well as the additional actions stated in, or adopted pursuant to, that section which are intended to promote the end of the apartheid system. [51 FR 46854, Dec. 29, 1986] 545.318 Controlled South African entity. The term controlled South African entity means-- (a) A corporation, partnership, or other business association or entity organized in South Africa and owned or controlled, directly or indirectly, by a national of the United States; or (b) A branch, office, agency, or sole proprietorship in South Africa of a national of the United States. [51 FR 46854, Dec. 29, 1986] 545.319 New investment. For purposes of 545.210, the term new investment means-- (a) A commitment or contribution of funds or other assets; and (b) A loan or other extension of credit, as defined in 545.304; but (c) Does not include-- (1) The reinvestment of profits generated by a controlled South African entity into that same controlled South African entity or the investment of such profits in a South African entity; (2) Contributions of money or other assets where such contributions are necessary to enable a controlled South African entity to operate in an economically sound manner, without expanding its operations; or (3)(i) The ownership or control of a share or interest in a South African entity, or a controlled South African entity, or a debt or equity security issued by the Government of South Africa or a South African entity before October 2, 1986, or (ii) The transfer or acquisition of such a share, interest, or debt or equity security, if any such transfer or acquisition does not result in a payment, contribution of funds or assets, or credit to a South African entity, a controlled South African entity, or the Government of South Africa. [51 FR 46854, Dec. 29, 1986] 545.320 Prohibited recipient. The term prohibited recipient means a person in whom the making of a new investment is prohibited pursuant to 545.210. [51 FR 46855, Dec. 29, 1986] 545.321 United States depository institution. (a) For purposes of 545.209, the term United States depository institution means a depository institution located in the United States, but does not include the foreign branches of a depository institution organized in the United States, or the parents, subsidiaries, branches or offices located outside the United States of a depository institution organized under foreign law. (b) For purposes of this section, the term depository institution means a depository institution as defined in section 19(b)(1) of the Federal Reserve Act, 12 U.S.C. 461(b)(1). [51 FR 46855, Dec. 29, 1986] Subpart D--Interpretations 545.401 Reference to amended sections. Reference to any section of this chapter or to any regulation, ruling, order, instruction, direction or license issued pursuant to this chapter shall be deemed to refer to the same as currently amended unless otherwise so specified. 545.402 Effect of amendment of sections of this chapter or of other orders, etc. Any modification of this chapter or of any regulation, ruling, order, instruction, direction or license issued by or under the direction of the Secretary of the Treasury shall not, unless otherwise specifically provided, be deemed to affect liability for any act performed or omitted, or any civil or criminal proceeding commenced, prior to such modification, and all penalties, forfeitures, and liabilities under any such regulation, ruling, order, instruction, direction or license shall continue and may be enforced as if such modification had not been made. [51 FR 41908, Nov. 19, 1986] 545.403 Krugerrand and gold coin jewelry. Section 545.201 prohibits the importation into the United States of Krugerrands or any other South African gold coins that have been modified, as by the addition of a clasp or loop, into items that can be worn as jewelry. For example, importation of a necklace consisting of a gold coin mounted on a chain would be prohibited. Section 545.201 does not prohibit the reimportation into the United States of Krugerrand jewelry which was originally imported into the United States prior to October 11, 1985, or of other gold coin jewelry originally imported into the United States prior to October 2, 1986, provided that (a) the importer can demonstrate to the satisfaction of the Secretary of the Treasury or his delegate that the initial importation was made before the relevant effective date, and (b) the jewelry to be reimported is in small quantities and for personal use only. [51 FR 41908, Nov. 19, 1986] 545.404 Rescheduling existing loans. Provided that no new funds or credits are thereby transferred or extended to a prohibited borrower or a prohibited recipient, 545.202 and 545.210 do not prohibit a national of the United States or a financial institution in the United States from rescheduling loans or otherwise extending the maturities of existing loans, or from charging fees, or interest at commercially reasonable rates, in connection therewith. [51 FR 46855, Dec. 29, 1986] 545.406 Loans through intermediaries. Sections 545.202 and 545.210 prohibit a national of the United States or a financial institution in the United States from making a loan to any person in the United States or a foreign country, where the U.S. national or financial institution has reason to believe that the loan is being obtained for, or on behalf of, a prohibited borrower or recipient, and that the relevant funds or credit will be made available to a prohibited borrower or recipient. [51 FR 46855, Dec. 29, 1986] 545.407 Substitution of the South African Government as obligor. Section 545.202 does not prohibit a national of the United States or a financial institution in the United States from complying with applicable laws, regulations or other directives of the South African Government requiring or permitting the South African Government to become the primary or secondary obligor with respect to an outstanding loan, provided that no new funds or credits are thereby transferred or extended to a prohibited borrower. [51 FR 41909, Nov. 19, 1986] 545.408 Approval of loans by foreign affiliates. Sections 545.202 and 545.210 prohibit nationals of the United States or financial institutions in the United States from approving loans by their foreign affiliates to prohibited borrowers or recipients. [51 FR 46855, Dec. 29, 1986] 545.409 Loan participations. Sections 545.202 and 545.210 prohibit a national of the United States or a financial institution in the United States from purchasing, or otherwise acquiring a participation in, all or part of any loan made by any other person or persons to a prohibited borrower or recipient, regardless of the date of the original loan. However, the prohibition of 545.202 does not apply if, in the case of a financial institution, it is obligated to make the purchase under an agreement entered into before September 9, 1985, or, in the case of a national of the United States that is not a financial institution in the United States, it is obligated to make the purchase under an agreement entered into before October 2, 1986. The prohibitions of 545.202 and 545.210 do not apply to the acquisition of all or part of a loan made by any other person or persons to a prohibited borrower or recipient if such acquisition is incidental to the purchase or acquisition of an entity or all or substantially all of the assets of an entity that has previously made, or acquired a participation in, such a loan. [51 FR 46855, Dec. 29, 1986] 545.410 South African law. If, under applicable laws of South Africa, a national of the United States or a financial institution in the United States cannot obtain enough information from a person in South Africa to enable it reasonably to conclude that a loan is not being obtained for, or on behalf of, a prohibited borrower or recipient, or that a new investment is not being made in, or with respect to, a prohibited recipient, 545.202 or 545.210 prohibits the loan or new investment. [51 FR 46855, Dec. 29, 1986] 545.411 Third-country products otherwise exported from South Africa. Products of third countries, e.g., Lesotho, Botswana, or Swaziland, which are transshipped through South Africa for exportation to the United States will not be deemed ``otherwise exported by a parastatal organization of South Africa'' for purposes of 545.208 merely because such goods are transported, graded, packaged, repackaged, containerized, or otherwise serviced in transit by a parastatal organization of South Africa. The foregoing interpretation shall not apply if the Government of South Africa or a parastatal organization has any financial interest in the export sale of such goods beyond remuneration for the fair value of services performed in South Africa in connection with such transshipment and exportation. This section shall not apply to the ``bantustans'' or ``homelands'' to which South Africa blacks are assigned on the basis of ethnic origin, including the Transkei, Bophuthatswana, Ciskei, and Venda, which, pursuant to 545.312, are deemed part of South Africa. [51 FR 41909, Nov. 19, 1986] 545.412 Release from bonded warehouse or foreign trade zone. Goods subject to import restrictions pursuant to subpart B of this part may be released from a bonded warehouse or a foreign trade zone if such goods were imported into the bonded warehouse or foreign trade zone prior to the effective date. [51 FR 41909, Nov. 19, 1986] 545.413 Import prohibitions applied cumulatively. An import transaction prohibited by any section of subpart B of this part is prohibited, notwithstanding the applicability to the same transaction of any other, less restrictive section of that subpart. Examples (a) The importation under a pre-August 15, 1986, contract of steel marketed by a parastatal organization is prohibited after December 31, 1986, pursuant to the iron and steel ban in 545.206. The longer parastatal importation period in 545.208(a)(2) is not available to permit importations after December 31, 1986. (b) Similarly, the ban in 545.205 on agricultural imports is applicable to, and prohibits, all agricultural import transactions after October 2, 1986, regardless of the involvement of a parastatal organization. [51 FR 41909, Nov. 19, 1986] 545.414 U.S. Customs Service rules of origin. Determinations of country of origin for purposes of this part will be made in accordance with normal Customs rules of origin. [51 FR 41909, Nov. 19, 1986] 545.415 Trading in South African securities; American Depositary Receipts; recapitalizations. (a) For purposes of the prohibition on new investment in 545.210, the ownership, control, transfer or acquisition of (1) a debt or equity security issued by the Government of South Africa or a South African entity, or (2) an American Depositary Receipt (ADR) evidencing an interest in such a security, is authorized provided that no interest represented by the security or ADR was issued on or after October 2, 1986. (b) Shares issued by a South African entity on or after October 2, 1986 in a stock split or similar recapitalization transaction, in a merger or other reorganization, or as a stock dividend, with respect to its shares issued on or prior to that date, will be deemed issued on the date of issuance of the underlying shares for the purposes of 545.210, provided that, except as permitted in 545.319(c)(1), such split, recapitalization, reorganization, or dividend does not result in a payment, contribution of funds or assets, or credit to, or for the benefit of, the South African issuer from, or on behalf of, the security holder. This treatment is not available for shares acquired on or after October 2, 1986 through the exercise of warrants or preemptive rights. Rights or warrants received on or after October 2, 1986 with respect to shares issued prior to that date may, however, be sold by the security holder, or on an ADR holder's behalf by the depositary. [51 FR 46855, Dec. 29, 1986] 545.416 Trading in commodities. Trading in commodities futures or options thereon with respect to South African commodities will be treated as the purchase or sale of the underlying goods. However, no such commodities subject to import prohibitions may be imported into the United States on or after the effective date of a relevant import prohibition. [51 FR 46855, Dec. 29, 1986] 545.417 Expenses to comply with Code of Conduct. Expenses incurred by U.S. nationals to comply with the Code of Conduct will not be treated as prohibited new investment in South Africa. [51 FR 46855, Dec. 29, 1986] 545.418 Sales of goods, services, and technology. Purchases and sales of goods, services, and technology in arms' length transactions on normal commercial terms will generally not be treated as new investment in South Africa for purposes of the prohibition in 545.210. [51 FR 46855, Dec. 29, 1986] 545.419 Real estate acquisition. The purchase of real estate in South Africa for use as a residence by the purchasing individual U.S. national will not be treated as new investment in South Africa for purposes of 545.210, provided that no commercial or rental use is made of such real estate. [51 FR 46855, Dec. 29, 1986] 545.420 Bank accounts in South Africa. (a) The opening and holding of personal bank accounts in South Africa by an individual resident in South Africa, or of corporate or similar accounts by an entity that is a U.S. national doing business through a permanent establishment in South Africa, will not be treated as a ``loan'' or ``new investment'' for purposes of 545.202 or 545.210. (b) The opening and holding of non-interest-bearing demand deposit or call accounts in South Africa by a U.S. national located outside South Africa will not be treated as a ``loan'' or ``new investment'' for purposes of 545.202 or 545.210, where such accounts are used exclusively to pay for and clear transactions with South African entities. [51 FR 46856, Dec. 29, 1986] 545.421 Charitable contributions. Contributions to charitable organizations engaged in social welfare, public health, religious, educational, and emergency relief activities in South Africa will not be treated as ``new investments'' for purposes of 545.210. [51 FR 46856, Dec. 29, 1986] 545.422 Foreign exchange transactions. A foreign exchange transaction executed at current market prices, for immediate or future delivery but without an extension of credit, will not be deemed a ``loan'' as defined in 545.304. [51 FR 46856, Dec. 29, 1986] 545.423 Confirmation of short-term trade credits. The confirmation of short-term trade financing instruments, such as commercial letters of credit, is authorized, provided that the instrument being confirmed is not within the definition of ``loan'' in 545.304. [51 FR 46856, Dec. 29, 1986] 545.424 Firm owned by black South Africans. For purposes of 545.210, the term ``firm owned by black South Africans'' means an entity owned by South African victims of apartheid. [51 FR 46856, Dec. 29, 1986] 545.425 Substantial transformation of uranium ore and oxide. Articles such as uranium hexafluoride, which are produced from uranium ore or uranium oxide and which the U.S. Customs Service determines to have been substantially transformed outside the United States, are not subject to the import prohibition of 545.211. [52 FR 7274, Mar. 10, 1987] 545.426 Repair of U.S.-origin goods exported by South African parastatals. The temporary return from South Africa to the United States of U.S.-origin goods for repair or servicing and re-export is not considered an exportation by a parastatal organization of South Africa pursuant to 545.208 of this part. [52 FR 7274, Mar. 10, 1987] Subpart E--Licenses, Authorizations and Statements of Licensing Policy 545.501 Effect of subsequent license or authorization. No license or other authorization contained in this chapter or otherwise issued by or under the authority of the Secretary of the Treasury shall be deemed to authorize or validate any transaction effected prior to the issuance thereof, unless such license or other authorization specifically so provides. [51 FR 41909, Nov. 19, 1986] 545.502 Exclusion from licenses and authorizations. The Secretary of the Treasury reserves the right to exclude any person or property from the operation of any license or to restrict the applicability thereof to any person or property. Such action shall be binding upon all persons receiving actual or constructive notice thereof. 545.503 Loans to benefit persons disadvantaged by the apartheid system. (a) Specific licenses may be issued to financial institutions in the United States that are not nationals of the United States authorizing them to make loans to prohibited borrowers where it is determined that the loans will improve the welfare or expand the economic opportunities of persons in South Africa disadvantaged by the apartheid system, provided that no such loan will be authorized to any apartheid enforcing entity. (b) Specific licenses may be issued to nationals of the United States or financial institutions in the United States where it is determined that the loans will finance any education, housing, or humanitarian benefit which (1) is available to all persons on a nondiscriminatory basis, or (2) is available in a geographic area accessible to all population groups without any legal or administrative restriction. [51 FR 41909, Nov. 19, 1986] 545.599 Lifting of sanctions. (a) The prohibitions contained in 545.201 through 545.211 of this part do not apply to any transaction occurring after 12:01 p.m. e.d.t., July 10, 1991. (b) Nothing in this section affects any action taken or proceeding pending and not finally concluded or determined on, or any action or proceeding based on any act committed prior to, or any rights or duties that matured or penalties that were incurred prior to 12:01 p.m. e.d.t., July 10, 1991. [56 FR 32056, July 12, 1991] Subpart F--Reports 545.601 Required records. Every person engaging in any act or transaction subject to this part shall keep a full, complete, and accurate record relative to any such act or transaction either before, during, or after the completion thereof, including any transaction effected pursuant to license or otherwise, and such records shall be available for examination for two years after the date of such transaction. [51 FR 41910, Nov. 19, 1986] 545.602 Reports to be furnished on demand. Every person is required to furnish under oath, in the form of reports or otherwise, at any time as may be required, complete information relative to any act or transaction subject to this part, regardless of whether such transaction is effected pursuant to license or otherwise. Such reports may be required to include the production of any books of account, contracts, letters, and other papers connected with any transaction in the custody or control of the persons required to make such reports. Reports with respect to transactions may be required before, during, or after such transactions are completed. The Secretary of the Treasury may, through any person or agency, conduct investigations, hold hearings, administer oaths, examine witnesses, receive evidence, take depositions, and require by subpoena the attendance and testimony of witnesses and the production of all books, papers, and documents relating to any matter under investigation. [51 FR 41910, Nov. 19, 1986] 545.603 Registration of new investment in firms owned by black South Africans. Every person making a new investment in a firm owned by black South Africans pursuant to the exception to the prohibition on new investment in 545.210(b) shall, prior to making such new investment, file with the Office of Foreign Assets Control a report with respect to such investment, including: (a) The name and address of the U.S. national making the investment; (b) The name of the black-owned firms, (c) Full information on the black-owned firm's ownership, sufficient to demonstrate its eligibility under 545.210(b); and (d) The amount and nature of the U.S. national's new investment. [51 FR 46856, Dec. 29, 1986] 545.604 Registration of contributions necessary to enable a controlled South African entity to operate in an economically sound manner. Every person making a contribution necessary to enable a controlled South African entity to operate in an economically sound manner, pursuant to the exception to the prohibition on new investment in 545.317(c)(2), shall, prior to making such contribution, file with the Office of Foreign Assets Control a report with respect to such contribution, including: (a) The name and address of the U.S. national making the contribution; (b) The name and address of the controlled South African entity; (c) Full information on the circumstances requiring the contribution, sufficient to demonstrate its eligibility under 545.319(c)(2); and (d) The amount and nature of the U.S. national's contribution. [51 FR 46856, Dec. 29, 1986] Subpart G--Penalties 545.701 Penalties. (a) Any person that violates any regulation, license, or order issued under this part shall be subject to a civil penalty of $50,000. (b) Any person, other than an individual, that willfully violates any regulation, license, or order issued under this part shall be fined not more than $1,000,000. (c) Any individual who willfully violates any regulation, license, or order issued under this part shall be fined not more than $50,000, or imprisoned not more than ten years, or both; and (d) Whenever a person commits a violation as to which a penalty under paragraph (a), (b) or (c) of this section applies, the following shall also apply: (1) Any officer, director, or employee of such person, or any natural person in control of such person, who knowingly and willfully ordered, authorized, acquiesced in, or carried out the act or practice constituting the violation; and (2) any agent of such person who knowingly and willfully carried out such act or practice, shall be fined not more than $10,000, or imprisoned not more than five years, or both. However, this paragraph (d) shall not apply in the case of a violation by an individual of section 301(a) of the Act, 545.201 of this part, or of any other regulation issued to carry out section 301(a) of the Act. (e) A fine imposed under paragraph (b) of this section on an individual for an act or practice constituting a violation may not be paid, directly or indirectly, by the person committing the violation itself. (f) Any individual who violates 545.201 of this part relating to the prohibition on the importation of Krugerrands or other South African gold coins shall, instead of the penalties set forth in paragraph (b) of this section, be fined not more than five times the value of the Krugerrands or gold coins involved. (The Act, 603 (b) and (c).) (g) Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000, or such greater amount as set forth in 18 U.S.C. 3623, or imprisoned not more than five years, or both. (18 U.S.C. 1001, 3623.) (h) Violations of this part may also be subject to relevant provisions of the Customs laws and other applicable laws. [51 FR 41910, Nov. 19, 1986] 545.702 Prepenalty notice. (a) When required. If the Director of the Office of Foreign Assets Control (hereinafter ``Director'') has reasonable cause to believe that there has occurred a violation of any provision of this part or a violation of the provisions of any license, ruling, regulation, order, direction or instruction issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to this part or otherwise under the Comprehensive Anti-Apartheid Act of l986, and the Director determines that further proceedings are warranted, he shall issue to the person concerned a notice of his intent to impose a monetary penalty. The prepenalty notice shall be issued whether or not another agency has taken any action with respect to this matter. (b) Contents--(1) Facts of violation. The prepenalty notice shall: (i) Describe the violation. (ii) Specify the laws and regulations allegedly violated. (iii) State the amount of the proposed monetary penalty. (2) Right to make presentations. The prepenalty notice also shall inform the person of his right to make a written presentation within thirty (30) days of mailing of the notice as to why a monetary penalty should not be imposed, or, if imposed, why it should be in a lesser amount than proposed. [53 FR 7357, Mar. 8, 1988] 545.703 Presentation responding to prepenalty notice. (a) Time within which to respond. The named person shall have 30 days from the date of mailing of the prepenalty notice to make a written presentation to the Director. (b) Form and contents of written presentation. The written presentation need not be in any particular form, but shall contain information sufficient to indicate that it is in response to the prepenalty notice. It should contain responses to the allegations in the prepenalty notice and set forth the reasons why the person believes the penalty should not be imposed or, if imposed, why it should be in a lesser amount than proposed. [53 FR 7357, Mar. 8, 1988] 545.704 Penalty notice. (a) No violation. If, after considering any presentations made in response to the prepenalty notice, the Director determines that there was no violation by the person named in the prepenalty notice, he promptly shall notify the person in writing of that determination and that no monetary penalty will be imposed. (b) Violation. If, after considering any presentations made in response to the prepenalty notice, the Director determines that there was a violation by the person named in the prepenalty notice, he promptly shall issue a written notice of the imposition of the monetary penalty to that person. [53 FR 7357, Mar. 8, 1988] 545.705 Referral to United States Department of Justice. In the event that the person named does not pay the penalty imposed pursuant to this subpart or make payment arrangements acceptable to the Director within thirty days of the mailing of the written notice of the imposition of the penalty, the matter shall be referred to the United States Department of Justice for appropriate action to recover the penalty in a civil suit in a Federal district court. [53 FR 7357, Mar. 8, 1988] Subpart H--Procedures 545.801 Licensing. (a) General licenses. General licenses may be issued authorizing under appropriate terms and conditions certain types of transactions which are subject to the prohibitions contained in subpart B of this part. Any and all such licenses will be set forth in subpart E of this part. It is the policy of the Office of Foreign Assets Control not to grant applications for specific licenses authorizing transactions to which the provisions of an outstanding general license are applicable. Persons availing themselves of certain general licenses may be required to file reports and statements in accordance with the instructions specified in those licenses. (b) Specific licenses. Transactions prohibited under subpart B may be effected only under specific license. (1) The specific licensing activities of the Office of Foreign Assets Control are performed by its Washington Office and by the Foreign Assets Control Division of the Federal Reserve Bank of New York. (2) Applications for specific licenses. Applications for specific licenses to engage in any transaction prohibited under this part are to be filed in duplicate with the Federal Reserve Bank of New York, Foreign Assets Control Division, 33 Liberty Street, New York, NY 10045. Any person having an interest in a transaction or proposed transaction may file an application for a license authorizing such transaction, and there is no requirement that any other person having an interest in such transaction shall or should join in making or filing such application. (3) Information to be supplied. The applicant must supply all information specified by the respective forms and instructions. Such documents as may be relevant shall be attached to each application except that documents previously filed with the Office of Foreign Assets Control may, where appropriate, be incorporated by reference. Applicants may be required to furnish such further information as is deemed necessary to a proper determination by the Office of Foreign Assets Control. Failure to furnish necessary information will not be excused because of any provision of South African law. If an applicant or other party in interest desires to present additional information or discuss or argue the application, he may do so at any time before or after decision. Arrangements for oral presentation should be made with the Office of Foreign Assets Control. (4) Effect of denial. The denial of a license does not preclude the reopening of an application or the filing of a further application. The applicant or any other party in interest may at any time request explanation of the reasons for a denial by correspondence or personal interview. (5) Reports under specific licenses. As a condition of the issuance of any license, the licensee may be required to file reports with respect to the transaction covered by the license, in such form and at such times and places as may be prescribed in the license or otherwise. (6) Issuance of license. Licenses will be issued by the Office of Foreign Assets Control acting on behalf of the Secretary of the Treasury or by the Federal Reserve Bank of New York, acting in accordance with such regulations, rulings, and instructions as the Secretary of the Treasury or the Office of Foreign Assets Control may from time to time prescribe, or licenses may be issued by the Secretary of the Treasury acting directly or through a designated person, agency, or instrumentality. [50 FR 41682, Oct. 15, 1985, as amended at 51 FR 41910, Nov. 19, 1986] 545.802 Decisions. The Office of Foreign Assets Control or the Federal Reserve Bank of New York will advise each applicant of the decision respecting filed applications. The decision of the Office of Foreign Assets Control with respect to an application shall constitute a final agency action. 545.803 Amendment, modification, or revocation. The provisions of this part and any rulings, licenses, authorizations, instructions, orders or forms issued hereunder may be amended, modified, or revoked at any time. 545.804 Rulemaking. (a) All rules and other public documents are issued by the Secretary of the Treasury upon recommendation of the Director of the Office of Foreign Assets Control. Except to the extent that there is involved any military, naval, or foreign affairs function of the United States or any matter relating to the agency management or personnel or to public property, loans, grants, benefits, or contracts, and except when interpretive rules, general statements of policy, or rules of agency organization, practice, or procedure are involved, or when notice and public procedure are impracticable, unnecessary, or contrary to the public interest, interested persons will be afforded an opportunity to participate in rulemaking through the submission of written data, views, or arguments, with oral presentation in the discretion of the Director. In general, rulemaking by the Office of Foreign Assets Control involves foreign affairs functions of the United States. Wherever possible, however, it is the practice to hold informal consultations with interested groups or persons before the issuance of any rule or other public document. (b) Any interested person may petition the Director of the Office of Foreign Assets Control in writing for the issuance, amendment or revocation of any rule. 545.805 Delegation by the Secretary of the Treasury. Any action that the Secretary of the Treasury is authorized to take with respect to the subject matter of this part may be taken by the Director of the Office of Foreign Assets Control, or by any other person to whom the Secretary of the Treasury delegated authority so to act. [51 FR 41910, Nov. 19, 1986] 545.806 Rules governing availability of information. (a) The records of the Office of Foreign Assets Control which are required by 5 U.S.C. 552 to be made available to the public shall be made available in accordance with the definitions, procedures, payment of fees, and other provisions of the regulations on the disclosure of records of the Office of the Secretary and of other bureaus and offices of the Department issued under 5 U.S.C. 552 and published as part 1 of this title 31 of the Code of Federal Regulations. (b) Any form issued for use in connection with this part may be obtained in person from or by writing to the Office of Foreign Assets Control, Treasury Department, Washington, DC 20220, or the Foreign Assets Control Division, Federal Reserve Bank of New York, 33 Liberty Street, New York, NY 10045. 545.807 Certification concerning parastatal organizations. (a) If the importer asserts that the imported articles were not grown, produced, manufactured, marketed, or otherwise exported by a parastatal organization, he shall file the following declaration with the U.S. Customs Service upon making an entry of goods from South Africa: These goods were obtained from ------, which is not a parastatal entity of South Africa, and these goods were not grown, produced, manufactured, marketed, or otherwise exported by a parastatal organization. (b) If parastatal status is declared upon making an entry of goods from South Africa, or from a third country in the case of goods marketed or otherwise exported by a parastatal organization, the following declaration shall be filed: These goods were grown, produced, manufactured, marketed or otherwise exported by ------, which is a parastatal organization of South Africa. When entering parastatal goods as described above, a copy of the import contract or other evidence of the date of the import contract pertaining to the goods must be submitted evidencing that the contract was entered into prior to August 15, 1986. Importation shall be permitted only for parastatal goods not otherwise prohibited pursuant to subpart B of this part, and only if the goods are imported prior to April 2, 1987. [51 FR 41910, Nov. 19, 1986] 545.808 Certification concerning hides, skins, leather, and furskins of animals from the wild. If the importer asserts that the imported articles are hides, skins, leather, or furskins, classifiable under Schedule 1, part 5, ``Hide, Skins, and Leather; Furskins'' (including TSUS numbers 120.11 through 120.50, 121.10 through 121.65, 123.00 through 123.50, and 124.10 through 124.80), of animals that are taken from the wild in South Africa, and that are not cultivated, ranched, or otherwise the product of animal husbandry, the following signed certificate shall be filed with the U.S. Customs Service upon making an entry of such goods from South Africa: These ____ [hides, skins, leather, or furskins], classifiable under TSUS number(s) ____ [from Schedule 1, Part 5, ``Hide, Skins, and Leather; Furskins'' (including TSUS numbers 120.11 through 120.50, 121.10 through 121.65, 123.00 through 123.50, and 124.10 through 124.80)], are from ____ [type of animal] that were taken from the wild in South Africa, and that were not cultivated, ranched, or otherwise the product of animal husbandry. The requirements of Title 50 of the Code of Federal Regulations (Wildlife and Fisheries), including those relating to endangered species, have been fully complied with in removing these articles from South Africa, and all applicable import certificates required pursuant to title 50 are presented with this entry. [52 FR 7855, Mar. 13, 1987] Subpart I--Miscellaneous 545.901 Paperwork Reduction Act notice. The information collection requirements in 545.503, 545.504, 545.601, and 545.602 have been approved by the Office of Management and Budget (OMB) and have been assigned control number 1505 - 0091. The information collection requirements of 545.807 have been approved by OMB and assigned control number 1505 - 0097. The information collection requirements of 545.603 and 545.604 have been approved by OMB and assigned control number 1505 - 0098. [52 FR 7274, Mar. 10, 1987]