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Federal Register/Vol. 86, No. 10/Friday, January 15, 2021/Rules and Regulations 3793
DEPARTMENT OF HEALTH AND On April 3, 2020, the final rule was DEPARTMENT OF THE TREASURY
HUMAN SERVICES challenged in the U.S. District Court for
the Eastern District of Texas.1 On May Office of Foreign Assets Control
Food and Drug Administration 8, 2020, the Court granted a joint motion
to govern proceedings in that case and 31 CFR Part 585
21 CFR Part 1141 postpone the effective date of the final Hong Kong-Related Sanctions
[Docket No. FDA–2019–N–3065] rule by 120 days.2 On December 2, 2020, Regulations
the same Court granted a new motion by
RIN 0910–AI39 Plaintiffs in the same case to postpone AGENCY: Office of Foreign Assets
the effective date of the final rule by an Control, Treasury.
Tobacco Products; Required Warnings 3 ACTION: Final rule.
for Cigarette Packages and additional 90 days. The new effective
Advertisements; Delayed Effective date of the final rule is January 14, 2022. SUMMARY: The Department of the
Date Pursuant to the court order, any Treasury’s Office of Foreign Assets
obligation to comply with a deadline Control (OFAC) is adding regulations to
AGENCY: Food and Drug Administration, tied to the effective date of the final rule implement a July 14, 2020, Hong Kong-
HHS. is similarly postponed, and those related Executive order. OFAC intends
ACTION: Final rule; delay of effective obligations and deadlines are now tied to supplement these regulations with a
date. to the postponed effective date. more comprehensive set of regulations,
SUMMARY: As required by an order To the extent that 5 U.S.C. 553 applies which may include additional
issued by the U.S. District Court for the to this action, the Agency’s interpretive and definitional guidance,
Eastern District of Texas, this action implementation of this action without general licenses, and statements of
delays the effective date of the final rule opportunity for public comment, licensing policy.
(‘‘Tobacco Products; Required Warnings effective immediately upon publication DATES: This rule is effective January 15,
for Cigarette Packages and today in the Federal Register, is based 2021.
Advertisements’’), which published on on the good cause exception in 5 U.S.C. FORFURTHERINFORMATIONCONTACT:
March 18, 2020. The new effective date 553(b)(B). Seeking public comment is OFAC: Assistant Director for Licensing,
is January 14, 2022. impracticable, unnecessary, and 202–622–2480; Assistant Director for
DATES: The effective date of the rule contrary to the public interest. The 90- Regulatory Affairs, 202–622–4855; or
amending 21 CFR part 1141 published day postponement of the effective date, Assistant Director for Sanctions
at 85 FR 15638, March 18, 2020, is until January 14, 2022, is required by Compliance & Evaluation, 202–622–
delayed until January 14, 2022. court order in accordance with the 2490.
FORFURTHERINFORMATIONCONTACT: court’s authority to postpone a rule’s SUPPLEMENTARYINFORMATION:
Courtney Smith, Office of Regulations, effective date pending judicial review (5 Electronic Availability
Center for Tobacco Products, Food and U.S.C. 705). Seeking prior public
Drug Administration, Document Control comment on this postponement would This document and additional
Center, 10903 New Hampshire Ave., have been impracticable, as well as information concerning OFAC are
Bldg. 71, Rm. G335, Silver Spring, MD contrary to the public interest in the available on OFAC’s website
20993–0002, 1–877–287–1371, email: orderly issue and implementation of (www.treasury.gov/ofac).
AskCTPRegulations@fda.hhs.gov. regulations. Background
SUPPLEMENTARYINFORMATION: In the Dated: January 6, 2021. On July 14, 2020, the President,
Federal Register of March 18, 2020, the Stephen M. Hahn, invoking the authority of, inter alia, the
Food and Drug Administration (FDA or Commissioner of Food and Drugs. International Emergency Economic
Agency) issued a final rule establishing Dated: January 8, 2021. Powers Act (50 U.S.C. 1701–1706)
new cigarette health warnings for Alex M. Azar II, (IEEPA), issued Executive Order (E.O.)
cigarette packages and advertisements. 13936 of July 14, 2020, ‘‘The President’s
The final rule implements a provision of Secretary, Department of Health and Human Executive Order on Hong Kong
the Family Smoking Prevention and Services. Normalization’’ (85 FR 43413, July 17,
Tobacco Control Act (Tobacco Control [FR Doc. 2021–00703 Filed 1–14–21; 8:45 am] 2020).
Act) (Pub. L. 111–31) that requires FDA BILLING CODE 4164–01–P In E.O. 13936, the President
to issue regulations requiring color determined that, pursuant to section 202
graphics depicting the negative health of the United States-Hong Kong Policy
consequences of smoking to accompany Act of 1992, the Special Administrative
new textual warning label statements. Region of Hong Kong (Hong Kong) is no
The Tobacco Control Act amends the longer sufficiently autonomous to justify
Federal Cigarette Labeling and differential treatment in relation to the
Advertising Act of 1965 (Pub. L. 89–92) People’s Republic of China (PRC or
to require each cigarette package and China) under the particular United
advertisement to bear one of the new 1R.J. Reynolds Tobacco Co. et al. v. United States States laws and provisions thereof set
required warnings. The final rule Food and Drug Administration et al., No. 6:20–cv– out in E.O. 13936. The President stated
specifies the 11 new textual warning 00176 (E.D. Tex. filed April 3, 2020). that in late May 2020, the National
label statements and accompanying 2R.J. Reynolds Tobacco Co. et al., No. 6:20–cv– People’s Congress of China announced
color graphics. Pursuant to section 00176 (E.D. Tex. May 8, 2020) (order granting joint its intention to unilaterally and
201(b) of the Tobacco Control Act, the motion and establishing schedule), Doc. No. 33. arbitrarily impose national security
rule was published with an effective 3R.J. Reynolds Tobacco Co. et al., No. 6:20–cv– legislation on Hong Kong. He indicated
date of June 18, 2021, 15 months after 00176 (E.D. Tex. May 8, 2020) (order granting that this announcement was China’s
Plaintiffs’ motion and postponing effective date),
the date of publication of the final rule. Doc. No. 80. latest in a series of actions that have
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3794 Federal Register/Vol. 86, No. 10/Friday, January 15, 2021/Rules and Regulations
increasingly denied autonomy and Paperwork Reduction Act 585.404 Transactions ordinarily incident to
freedoms that China promised to the The collections of information related a licensed transaction.
people of Hong Kong under the 1984 to the Regulations are contained in 31 585.405 Setoffs prohibited.
Joint Declaration of the Government of 585.406 Entities owned by one or more
the United Kingdom of Great Britain CFR part 501 (the ‘‘Reporting, persons whose property and interests in
Procedures and Penalties Regulations’’). property are blocked.
and Northern Ireland and the Pursuant to the Paperwork Reduction Subpart E—Licenses, Authorizations, and
Government of the People’s Republic of Act of 1995 (44 U.S.C. 3507), those Statements of Licensing Policy
China on the Question of Hong Kong collections of information have been 585.501 General and specific licensing
(Joint Declaration). The President approved by the Office of Management procedures.
detailed that China has since imposed and Budget under control number 1505– 585.502 [Reserved]
national security legislation on Hong 0164. An agency may not conduct or 585.503 Exclusion from licenses.
Kong, under which, inter alia, the sponsor, and a person is not required to 585.504 Payments and transfers to blocked
people of Hong Kong may face life in respond to, a collection of information accounts in U.S. financial institutions.
prison for what China considers to be unless the collection of information 585.505 Entries in certain accounts for
acts of secession or subversion of state displays a valid control number. normal service charges.
power, and the right to trial by jury may 585.506 Provision of certain legal services.
be suspended. The President therefore List of Subjects in 31 CFR Part 585 585.507 Payments for legal services from
funds originating outside the United
determined that the situation with Administrative practice and States.
respect to Hong Kong constitutes an procedure, Banks, banking, Blocking of 585.508 Emergency medical services.
unusual and extraordinary threat, which assets, Foreign trade, Hong Kong, 585.509 Official business of the United
has its source in substantial part outside Penalties, Reporting and recordkeeping States Government.
the United States, to the national requirements, Sanctions, Services. Subpart F—Reports
security, foreign policy, and economy of For the reasons set forth in the 585.601 Records and reports.
the United States and declared a preamble, the Department of the Subpart G—Penalties and Findings of
national emergency to deal with that Treasury’s Office of Foreign Assets Violation
threat. Control adds part 585 to 31 CFR chapter 585.701 Penalties and Findings of
OFAC is issuing the Hong Kong- V to read as follows: Violation.
Related Sanctions Regulations, 31 CFR PART 585—HONG KONG-RELATED Subpart H—Procedures
part 585 (the ‘‘Regulations’’), to SANCTIONS REGULATIONS 585.801 Procedures.
implement E.O. 13936, pursuant to 585.802 Delegation of certain authorities of
authorities delegated to the Secretary of Subpart A—Relation of This Part to Other the Secretary of the Treasury.
the Treasury in E.O. 13936. A copy of Laws and Regulations
E.O. 13936 appears in appendix A to Sec. Subpart I—Paperwork Reduction Act
this part. 585.101 Relation of this part to other laws 585.901 Paperwork Reduction Act notice.
The Regulations are being published and regulations. Appendix A to Part 585—Executive
in abbreviated form at this time for the Subpart B—Prohibitions Order 13936 of July 14, 2020
purpose of providing immediate 585.201 Prohibited transactions. Authority: 3 U.S.C. 301; 31 U.S.C. 321(b);
guidance to the public. OFAC intends to 585.202 Effect of transfers violating the 50 U.S.C. 1601–1651, 1701–1706; Pub. L.
supplement this part 585 with a more provisions of this part. 101–410, 104 Stat. 890 (28 U.S.C. 2461 note);
comprehensive set of regulations, which 585.203 Holding of funds in interest- E.O. 13936, 85 FR 43413, July 17, 2020.
may include additional interpretive and bearing accounts; investment and Subpart A—Relation of This Part to
definitional guidance, general licenses, reinvestment. Other Laws and Regulations
and statements of licensing policy. The 585.204 Expenses of maintaining blocked
appendix to the Regulations will be tangible property; liquidation of blocked §585.101 Relation of this part to other
removed when OFAC supplements this property. laws and regulations.
part with a more comprehensive set of 585.205 Exempt transactions. This part is separate from, and
regulations. Subpart C—General Definitions independent of, the other parts of this
585.300 Applicability of definitions. chapter, with the exception of part 501
Public Participation 585.301 Blocked account; blocked property. of this chapter, the recordkeeping and
Because the Regulations involve a 585.302 Effective date. reporting requirements and license
foreign affairs function, the provisions 585.303 Entity. application and other procedures of
585.304 Financial, material, or which apply to this part. Actions taken
of E.O. 12866 of September 30, 1993, technological support. pursuant to part 501 of this chapter with
‘‘Regulatory Planning and Review’’ (58 585.305 [Reserved] respect to the prohibitions contained in
FR 51735, October 4, 1993), and the 585.306 Interest. this part are considered actions taken
Administrative Procedure Act (5 U.S.C. 585.307 Licenses; general and specific. pursuant to this part. Differing foreign
553) requiring notice of proposed 585.308 OFAC. policy and national security
rulemaking, opportunity for public 585.309 Person. circumstances may result in differing
participation, and delay in effective 585.310 Property; property interest.
585.311 Transfer. interpretations of similar language
date, as well as the provisions of E.O. 585.312 United States. among the parts of this chapter. No
13771 of January 30, 2017, ‘‘Reducing 585.313 United States person; U.S. person. license or authorization contained in or
Regulation and Controlling Regulatory 585.314 U.S. financial institution. issued pursuant to those other parts
Costs’’ (82 FR 9339, February 3, 2017), Subpart D—Interpretations authorizes any transaction prohibited by
are inapplicable. Because no notice of 585.401 [Reserved] this part. No license or authorization
proposed rulemaking is required for this 585.402 Effect of amendment. contained in or issued pursuant to any
rule, the Regulatory Flexibility Act (5 585.403 Termination and acquisition of an other provision of law or regulation
U.S.C. 601–612) does not apply. interest in blocked property. authorizes any transaction prohibited by
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Federal Register/Vol. 86, No. 10/Friday, January 15, 2021/Rules and Regulations 3795
this part. No license or authorization funds that they believe were blocked due to misrepresentation of a third party or
contained in or issued pursuant to this mistaken identity, or administrative withholding of material facts or was
part relieves the involved parties from reconsideration of their status as persons otherwise fraudulently obtained; and
complying with any other applicable whose property and interests in property are (3) The person with whom such
laws or regulations. blocked pursuant to this section. property is or was held or maintained
Note 1 to §585.101. This part has been §585.202 Effect of transfers violating the filed with OFAC a report setting forth in
published in abbreviated form for the provisions of this part. full the circumstances relating to such
purpose of providing immediate guidance to (a) Any transfer after the effective date transfer promptly upon discovery that:
the public. OFAC intends to supplement this that is in violation of any provision of (i) Such transfer was in violation of
part with a more comprehensive set of this part or of any regulation, order, the provisions of this part or any
regulations, which may include additional regulation, ruling, instruction, license,
interpretive and definitional guidance, directive, ruling, instruction, or license or other directive or authorization
general licenses, and statements of licensing issued pursuant to this part, and that issued pursuant to this part;
policy. involves any property or interest in (ii) Such transfer was not licensed or
property blocked pursuant to §585.201, authorized by OFAC; or
Subpart B—Prohibitions is null and void and shall not be the (iii) If a license did purport to cover
§585.201 Prohibited transactions. basis for the assertion or recognition of the transfer, such license had been
(a) All transactions prohibited any interest in or right, remedy, power, obtained by misrepresentation of a third
pursuant to Executive Order (E.O.) or privilege with respect to such party or withholding of material facts or
13936 of July 14, 2020 are prohibited property or interest in property. was otherwise fraudulently obtained.
pursuant to this part. (b) No transfer before the effective (e) The filing of a report in accordance
(b) All transactions prohibited date shall be the basis for the assertion with the provisions of paragraph (d)(3)
pursuant to any further Executive orders or recognition of any right, remedy, of this section shall not be deemed
issued pursuant to the national power, or privilege with respect to, or evidence that the terms of paragraphs
emergency declared in E.O. 13936 are any interest in, any property or interest (d)(1) and (2) of this section have been
prohibited pursuant to this part. in property blocked pursuant to satisfied.
§585.201, unless the person who holds (f) Unless licensed pursuant to this
Note 1 to §585.201. The names of persons or maintains such property, prior to that part, any attachment, judgment, decree,
designated or identified as blocked pursuant date, had written notice of the transfer lien, execution, garnishment, or other
to E.O. 13936, or listed in, designated, or or by any written evidence had judicial process is null and void with
identified as blocked pursuant to any further recognized such transfer. respect to any property or interest in
Executive orders issued pursuant to the (c) Unless otherwise provided, a property blocked pursuant to §585.201.
national emergency declared in E.O. 13936, license or other authorization issued by
whose property and interests in property OFAC before, during, or after a transfer §585.203 Holding of funds in interest-
therefore are blocked pursuant to this shall validate such transfer or make it bearing accounts; investment and
section, are published in the Federal Register reinvestment.
and incorporated into OFAC’s Specially enforceable to the same extent that it (a) Except as provided in paragraph
Designated Nationals and Blocked Persons would be valid or enforceable but for (e) or (f) of this section, or as otherwise
List (SDN List) using the following identifier the provisions of this part and any directed or authorized by OFAC, any
formulation: ‘‘[HK–E.O.[E.O. number regulation, order, directive, ruling, U.S. person holding funds, such as
pursuant to which the person’s property and instruction, or license issued pursuant currency, bank deposits, or liquidated
interests in property are blocked]].’’ The SDN to this part. financial obligations, subject to
List is accessible through the following page (d) Transfers of property that
on OFAC’s website: www.treasury.gov/sdn. otherwise would be null and void or §585.201 shall hold or place such funds
Additional information pertaining to the SDN unenforceable by virtue of the in a blocked interest-bearing account
List can be found in appendix A to this located in the United States.
chapter. See §585.406 concerning entities provisions of this section shall not be (b)(1) For purposes of this section, the
that may not be listed on the SDN List but deemed to be null and void or term blocked interest-bearing account
whose property and interests in property are unenforceable as to any person with means a blocked account:
nevertheless blocked pursuant to this section. whom such property is or was held or (i) In a federally insured U.S. bank,
Note 2 to §585.201. The International maintained (and as to such person only) thrift institution, or credit union,
Emergency Economic Powers Act (50 U.S.C. in cases in which such person is able to provided the funds are earning interest
1701–1706), in Section 203 (50 U.S.C. 1702), establish to the satisfaction of OFAC at rates that are commercially
authorizes the blocking of property and each of the following: reasonable; or
interests in property of a person during the (1) Such transfer did not represent a (ii) With a broker or dealer registered
pendency of an investigation. The names of willful violation of the provisions of this with the Securities and Exchange
persons whose property and interests in part by the person with whom such Commission under the Securities
property are blocked pending investigation property is or was held or maintained Exchange Act of 1934 (15 U.S.C. 78a et
pursuant to this section also are published in (and as to such person only); seq.), provided the funds are invested in
the Federal Register and incorporated into (2) The person with whom such a money market fund or in U.S.
the SDN List using the following identifier property is or was held or maintained Treasury bills.
formulation: for E.O. 13936 and any further did not have reasonable cause to know (2) Funds held or placed in a blocked
Executive orders issued pursuant to the or suspect, in view of all the facts and
national emergency declared in E.O. 13936: account pursuant to paragraph (a) of this
‘‘[BPI–HK–E.O.[E.O. number pursuant to circumstances known or available to section may not be invested in
which the person’s property and interests in such person, that such transfer required instruments the maturity of which
property are blocked pending a license or authorization issued exceeds 180 days.
investigation]]’’. pursuant to this part and was not so (c) For purposes of this section, a rate
Note 3 to §585.201. Sections 501.806 and licensed or authorized, or, if a license or is commercially reasonable if it is the
501.807 of this chapter describe the authorization did purport to cover the rate currently offered to other depositors
procedures to be followed by persons transfer, that such license or on deposits or instruments of
seeking, respectively, the unblocking of authorization had been obtained by comparable size and maturity.
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3796 Federal Register/Vol. 86, No. 10/Friday, January 15, 2021/Rules and Regulations
(d) For purposes of this section, if telephonic, or other personal or other organization, including an
interest is credited to a separate blocked communication that does not involve international organization.
account or subaccount, the name of the the transfer of anything of value. §585.304 Financial, material, or
account party on each account must be (b) Official business. The prohibitions technological support.
the same. contained in §585.201(a) do not apply The term financial, material, or
(e) Blocked funds held in instruments to transactions for the conduct of the technological support means any
the maturity of which exceeds 180 days official business of the United States property, tangible or intangible,
at the time the funds become subject to Government by employees, grantees, or including currency, financial
§585.201 may continue to be held until contractors thereof. instruments, securities, or any other
maturity in the original instrument, Note 1 to paragraph (b). See §585.509 for transmission of value; weapons or
provided any interest, earnings, or other a general license authorizing transactions for related materiel; chemical or biological
proceeds derived therefrom are paid the conduct of the official business of the agents; explosives; false documentation
into a blocked interest-bearing account United States Government not otherwise or identification; communications
in accordance with paragraph (a) or (f) exempt. equipment; computers; electronic or
of this section. other devices or equipment;
(f) Blocked funds held in accounts or Subpart C—General Definitions technologies; lodging; safe houses;
instruments outside the United States at facilities; vehicles or other means of
the time the funds become subject to §585.300 Applicability of definitions.
§585.201 may continue to be held in the The definitions in this subpart apply transportation; or goods.
same type of accounts or instruments, throughout the entire part. ‘‘Technologies’’ as used in this
provided the funds earn interest at rates definition means specific information
that are commercially reasonable. §585.301 Blocked account; blocked necessary for the development,
(g) This section does not create an property. production, or use of a product,
affirmative obligation for the holder of The terms blocked account and including related technical data such as
blocked tangible property, such as real blocked property shall mean any blueprints, plans, diagrams, models,
or personal property, or of other blocked account or property subject to the formulae, tables, engineering designs
property, such as debt or equity prohibitions in §585.201 held in the and specifications, manuals, or other
securities, to sell or liquidate such name of a person whose property and recorded instructions.
property. However, OFAC may issue interests in property are blocked §585.305 [Reserved]
licenses permitting or directing such pursuant to §585.201, or in which such
sales or liquidation in appropriate cases. person has an interest, and with respect §585.306 Interest.
(h) Funds subject to this section may to which payments, transfers, Except as otherwise provided in this
not be held, invested, or reinvested in exportations, withdrawals, or other part, the term interest, when used with
a manner that provides financial or dealings may not be made or effected respect to property (e.g., ‘‘an interest in
economic benefit or access to any except pursuant to a license or other property’’), means an interest of any
person whose property and interests in authorization from OFAC expressly nature whatsoever, direct or indirect.
property are blocked pursuant to authorizing such action.
§585.201, nor may their holder Note 1 to §585.301. See §585.406 §585.307 Licenses; general and specific.
cooperate in or facilitate the pledging or concerning the blocked status of property (a) Except as otherwise provided in
other attempted use as collateral of and interests in property of an entity that is this part, the term license means any
blocked funds or other assets. directly or indirectly owned, whether license or authorization contained in or
individually or in the aggregate, 50 percent issued pursuant to this part.
§585.204 Expenses of maintaining or more by one or more persons whose (b) The term general license means
blocked tangible property; liquidation of property and interests in property are any license or authorization the terms of
blocked property. blocked pursuant to §585.201. which are set forth in subpart E of this
(a) Except as otherwise authorized, part or made available on OFAC’s
and notwithstanding the existence of §585.302 Effective date. website: www.treasury.gov/ofac.
any rights or obligations conferred or (a) The term effective date refers to (c) The term specific license means
imposed by any international agreement the effective date of the applicable any license or authorization issued
or contract entered into or any license prohibitions and directives contained in pursuant to this part but not set forth in
or permit granted prior to the effective this part, and with respect to a person subpart E of this part or made available
date, all expenses incident to the whose property and interests in on OFAC’s website: www.treasury.gov/
maintenance of tangible property property are blocked pursuant to ofac.
blocked pursuant to §585.201 shall be §585.201, the earlier of the date of Note 1 to §585.307. See §501.801 of this
the responsibility of the owners or actual or constructive notice that such chapter on licensing procedures.
operators of such property, which person’s property and interests in
expenses shall not be met from blocked property are blocked. §585.308 OFAC.
funds. (b) For the purposes of this section, The term OFAC means the
(b) Property blocked pursuant to constructive notice is the date that a Department of the Treasury’s Office of
§585.201 may, in the discretion of notice of the blocking of the relevant Foreign Assets Control.
OFAC, be sold or liquidated and the net person’s property and interests in
proceeds placed in a blocked interest- property is published in the Federal §585.309 Person.
bearing account in the name of the Register. The term person means an individual
owner of the property. §585.303 Entity. or entity.
§585.205 Exempt transactions. The term entity means a government §585.310 Property; property interest.
(a) Personal communications. The or instrumentality of such government, The terms property and property
prohibitions contained in this part do partnership, association, trust, joint interest include money, checks, drafts,
not apply to any postal, telegraphic, venture, corporation, group, subgroup, bullion, bank deposits, savings
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