was made upon such terms and conditions as constituted a special
deposit, or a deposit for a specific purpose, as distinguished from a
general deposit." Keyes, 61 F.2d at 613.
D.C. Precision contends that its deposit with Jugobanka is necessarily
a special deposit because, under New York law, an agency of a bank
organized under the laws of a foreign country, such as Jugobanka, is
ordinarily not permitted to accept deposits from United States citizens
or residents. See In the Matter of the Liquidation of the New York Agency
and Other Assets of Bank of Credit and Commerce Int'l, S.A., 90 N.Y.2d 410,
422, 660 N.Y.S.2d 850, 683 N.E.2d 756 (1997). According to plaintiff,
since Jugobanka is not empowered to accept general deposits, any deposit
accepted must have been accepted for a specific purpose, and thereby, a
OFAC rejected this precise argument as part of its denial of D.C.
Precision's application for a license to withdraw its assets from
Jugobanka. See Jones Declar., Exh. A. As previously discussed, Executive
Order 12846 blocks the property and interests in property of all
commercial, industrial, and public utility entities organized or located
in the FRY (S & M). See Exec. Order No. 12846, 58 Fed. Reg. 25771
(1993). Under the Sanctions Regulations, the "term interest when used
with respect to property (e.g., an interest in property) means an
interest of any nature whatsoever, direct or indirect." See
31 C.F.R. § 585.303, 586.310. Moreover, the Sanctions Regulations
list a wide array of property and property interests that are subject to
blocking, including "bank deposits," "letters of credit and any documents
relating to any rights or obligations thereunder," "powers of attorney,"
"contracts of any nature whatsoever," and "any other property, real,
personal, or mixed, tangible or intangible, or interest or interests
therein, present, future or contingent." See 31 C.F.R. § 585.304.
Applying the Sanctions Regulations to the instant case, OFAC found that
even if D.C. Precision's deposit with Jugobanka is special under New York
law, the assets are nevertheless considered property in which Jugobanka
has an "interest."
An agency's interpretation of its own regulations must be given
"controlling weight unless it is plainly erroneous or inconsistent with
the regulation." Stinson v. United States, 508 U.S. 36, 45, 113 S.Ct.
1913, 123 L.Ed.2d 598 (1993). See also Consarc Corp. v. Iraqi Ministry,
27 F.3d 695, 701 (D.C.Cir. 1994) ("We think that OFAC may choose and
apply its own definition of property interests, subject to deferential
judicial review."). Therefore, the court's inquiry is limited to whether
the plain language of the Sanctions Regulations themselves or some other
indication of OFAC's intent at the time of promulgation compels a
different result from the agency's determination that D.C. Precision's
deposit is an interest in property of Jugobanka. See Rock of Ages Corp.
v. Secretary of Labor, 170 F.3d 148, 154 (2d Cir. 1999).
Assuming that the deposit is indeed "special" under New York law, as
the court is bound to do on a motion to dismiss, the court nevertheless
finds that OFAC's determination is not inconsistent from the plain
language of the Sanctions Regulations. Not only do the Sanctions
Regulations define property and property interests in broad, sweeping
terms, but the regulations also include property that is considered
"special" under New York law — the very type of property that
plaintiff asserts is not subject to blocking under the Executive Orders.
For instance, the Regulations specifically state that a letter of credit
is considered property or an interest in property. See
31 C.F.R. § 585.304. Under New York law, special deposits include
deposits made "for the purpose of paying such funds to a third person
upon the presentation of certain papers or instruments of title," i.e.,
letters of credit. See 9 N.Y. Jur.2d Banks and Fin. Institutions §
263. Accordingly, D.C. Precision's contention that the deposit's
status as "special" under New York law precludes the assets from blocking
pursuant to the Executive Orders is without merit.
For the foregoing reasons, the government's and Jugobanka's motions to
dismiss are granted.*fn2 As plaintiff has not asserted a cognizable
claim against any of the defendants, plaintiffs complaint is hereby
dismissed with prejudice in its entirety.
IT IS SO ORDERED.