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FEDERAL RESERVE BANK OF N EW YORK r Circular No. 0 0 9 6 "1 L January 11, 1968 J Exemption of Banks and Financial Institutions From U. S. Department of Commerce Foreign Direct Investment Program To All BanTcs and Other Financial Institutions in the Second Federal Reserve District: Printed below is an excerpt from the Federal Register of January 6, 1968, containing the text of a notice issued by the Board of Governors of the Federal Reserve System. It relates to the exemption of the banks and financial institutions that are subject to the Federal Reserve foreign credit restraint programs from the regulations of the Secretary of Commerce on foreign direct investments. Additional copies of this circular will be furnished upon request. A lfred H ayes, President. FEDERAL RESERVE SYSTEM B A N K S A N D F IN A N C IA L INSTITU TIO N S: CAPITAL TRANSFER A B R O A D By Executive Order 11387 (Jan. 1,1968, 33 F.R. 47), the President prohibited per sons owning 10 percent or more of a for eign business venture from engaging in transfers of capital abroad except as au thorized by the Secretary of Commerce, and also authorized the Secretary to re quire such persons to repatriate to the United States their earnings from such foreign business ventures and their short-term financial assets abroad, in cluding bank deposits. However, the President ordered the Secretary of Com merce to exempt from said requirements, to the extent delineated by the Board of Governors of the Federal Reserve Sys tem, banks and financial institutions certified by the Board as being subject to the Federal Reserve foreign credit restraint program. On January 2, 1968, the Board trans mitted to the Secretary of Commerce the letter set forth below, which certified that banks and financial institutions of the kinds described therein are subject to said program, the terms of which are stated in the revised Guidelines issued by the Board of Governors January 1, 1968. The Board delineated for exemption all banks and financial institutions with in the enumerated categories, with the exception of any bank or financial in stitution that is subject to the reporting provisions of the Guidelines and fails to report in substantial compliance with those reporting provisions. In accordance with the President’s Order, the “Foreign Direct Investment Regulations” of the Secretary of Com merce, published in the F e d e r a l R e g is t e r of January 3, 19f}a (33 F.R. 49), exempted banks and financial institutions “ to the extent that may be delineated from time to time by the Board of Governors” . Ac cordingly, all banks and financial insti tutions included in the Board’s list are now exempt from said regulations of the Secretary of Commerce, subject to the specified exception. Dated at Washington, D.C., the 4th day of January 1968. By order of the Board of Governors. [seal] R obert C. H olland, Secretary. B oard o f G overnors of th e S F ederal R eserve ystem O FFICE O F T H E C H A IR M A N January 2 ,1 9 6 8 . The Honorable Alexander B. Trowbridge, Secretary of Commerce, Washington, D.C. 20230. D e a r Mr. S e c r e t a r y : In accordance with the provisions of section 1 (c) of Executive Order 11,387, dated January 1,1968, the Board of Governors of the Federal Reserve System certifies that the following banks and finan cial institutions are subject to the foreign credit restraint programs referred to in said section 1 (c ): 1. Banks that accept deposits that the de positor has a legal right to withdraw on demand. 2. Savings banks, both stock and mutual. 3. Trust companies, and trust departments of banks. 4. Casualty, fire, marine, and life insurance companies, both stock and mutual. 5. Management investment companies (both open-end and closed-en d), as definedr' in sections 4 and 5 of the Investment Com pany Act of 1940. 6. Organizations engaged principally in ex tending credit through consumer, com m er cial, or Industrial loans; financing of sales or lease transactions; leasing of personal prop erty; or purchasing o f accounts receivable or similar claims. 7. Organizations engaged principally In underwriting or dealing in securities or act ing as broker in securities transactions. 8. Employee retirement and pension funds and similar employee-beneflt funds. 9. Foundations, trusts, institutions, and other nonprofit organizations principally de voted to the advancement o f art, education, health, philanthropy, recreation, religion, re search, orvsimilar areas o f activity directed at contributing to th e general welfare. 10. Corporations organized under section 25(a) o f the Federal Reserve Act (so-called “ Edge A ct corporations” ) and corporations having an agreement or undertaking w ith the Board o f Governors under section 25 o f said Act (so-called “ Agreement corporations” ) . 11. U.S. branches o f foreign banks and fi nancial institutions o f the kinds described in the foregoing enum eration. In accordance w ith the provisions of said section 1 (c ), the Board o f Governors delineates for exem ption from the provisions o f section 1 o f said Executive order all banks and financial institutions of the categories enumerated above, w ith the exception o f any bank or financial Institution that Is subject to the reporting provisions o f said programs b u t is n ot reporting (or covered b y reports filed by another or others on its behalf) in substantial com pliance with said reporting provisions. The foregoing certification and delinea tion are subject to m odification or termina tion with respect to any category o r individ ual bank or financial institution, in the event that (a) the foreign credit restraint programs referred to in section 1(c) o f said Executive order are so modified that such category or Individual bank or financial institution is no longer subject to said programs or (b ) the Board o f Governors determines that m odifi cation or term ination of said delineation is necessary or appropriate in the pu blic In terest. Any such m odification or term ination will be com m unicated by the Board to the Secretary o f Commerce. Sincerely yours, W m . McC. M artin , Jr. [F.R. Doc. 68-318; Filed, 8:48 a.m.] Jan. 5, 1968;
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