Adjustment of Civil Monetary Penalties for Inflation, 65100-65103 [2012-26090]
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65100
Federal Register / Vol. 77, No. 207 / Thursday, October 25, 2012 / Rules and Regulations
Commission’s Rules of Practice. A
footnote in the document contained an
incorrect citation to the Commodity
Futures Trading Commission. This
notice corrects this error.
DATES: Effective November 9, 2012.
FOR FURTHER INFORMATION CONTACT:
Kenny A. Wright (202–326–2907), FTC,
Office of the General Counsel, 600
Pennsylvania Avenue NW., Washington,
DC 20580.
SUPPLEMENTARY INFORMATION:
Correction
In the Federal Register of September
27, 2012, in FR Doc. 2012–23691, on
page 59303, the second column, remove
‘‘8 CFR 1003.104’’ from the fourth line
of footnote 74 (continued) and add ‘‘17
CFR 14.8’’ in its place.
Donald S. Clark,
Secretary.
[FR Doc. 2012–26170 Filed 10–24–12; 8:45 am]
BILLING CODE 6750–01–P
COMMODITY FUTURES TRADING
COMMISSION
17 CFR Part 143
RIN 3038–AD76
Adjustment of Civil Monetary Penalties
for Inflation
Commodity Futures Trading
Commission
ACTION: Final rule.
AGENCY:
The Commodity Futures
Trading Commission (Commission) is
amending its rule that governs the
maximum amount of civil monetary
penalties, to adjust for inflation. This
rule sets forth the maximum, inflationadjusted dollar amount for civil
monetary penalties (CMPs) assessable
for violations of the Commodity
Exchange Act (CEA) and Commission
rules, regulations and orders
thereunder. The rule, as amended,
implements the Federal Civil Penalties
Inflation Adjustment Act of 1990, as
amended by the Debt Collection
Improvement Act of 1996.
DATES: Effective Date: This final rule
will become effective October 25, 2012.
FOR FURTHER INFORMATION CONTACT:
Edward J. Riccobene, Associate Chief
Counsel, Division of Enforcement, at
(202) 418–5327 or ericcobene@cftc.gov,
Commodity Futures Trading
Commission, 1155 21st Street NW.,
Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
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I. Background
The Federal Civil Penalties Inflation
Adjustment Act of 1990 (FCPIAA), as
amended by the Debt Collection
Improvement Act of 1996 (DCIA),1
requires the head of each Federal agency
to adjust by regulation, at least once
every four years, the maximum amount
of CMPs provided by law within the
jurisdiction of that agency by the cost of
living adjustment defined in the
FCPIAA, as amended.2 Because one of
the purposes of the inflation
adjustments includes maintaining the
deterrent effect of CMPs and promoting
compliance with the law, the
Commission monitors the impact of
inflation on its CMP maximums and
adjusts them as needed to implement
the requirements and purposes of the
FCPIAA.3
On July 21, 2010, President Obama
signed the Dodd-Frank Wall Street
Reform and Consumer Protection Act
(Dodd-Frank Act) into law.4 Section 753
of the Dodd-Frank Act set maximum
CMPs for Sections 6(c) and 6(d) of the
CEA, 7 U.S.C. 9, 13b. Section 753 of the
Dodd-Frank Act is effective August 15,
2011, the effective date for the
Commission’s rules implementing this
section.5
II. Commodity Exchange Act Civil
Monetary Penalties
The inflation adjustment requirement
applies to any penalty, fine or other
sanction that is for a specific monetary
amount as provided by Federal law; or
has a maximum amount provided for by
Federal law; and is assessed or enforced
by an agency pursuant to Federal law;
1 The FCPIAA, Public Law 101–410 (1990), and
the relevant amendments to the FCPIAA contained
in the DCIA, Public Law 104–134 (1996), is codified
at 28 U.S.C. 2461 note.
2 The DCIA also requires that the range of
minimum and maximum CMPs be adjusted, if
applicable. For the relevant CMPs within the
Commission’s jurisdiction, the Act provides only
for maximum amounts that can be assessed for each
violation of the Act or the rules, regulations and
orders promulgated thereunder; the Act does not set
forth any minimum penalties. Therefore, the
remainder of this release will refer only to CMP
maximums.
3 Specifically, the FCPIAA states that the purpose
of the FCPIAA is to establish a mechanism that
shall allow for regular adjustment for inflation of
civil monetary penalties; maintain the deterrent
effect of civil monetary penalties and promote
compliance with the law; and improve the
collection by the Federal Government of civil
monetary penalties.
4 See Dodd-Frank Act, Public Law 111–203, 124
Stat. 1376 (2010). The text of the Dodd-Frank Act
may be accessed at https://www.cftc.gov/
LawRegulation/OTCDERIVATIVES/index.htm.
5 Prohibition of Employment, or Attempted
Employment, of Manipulative and Deceptive
Devices and Prohibition on Price Manipulation, 76
FR 41398 (July 14, 2011) (implementing Section 753
of the CEA; effective August 15, 2011).
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and is assessed or enforced pursuant to
an administrative proceeding or a civil
action in the Federal courts. [28 U.S.C.
2461 note.] The CEA provides for CMPs
that meet the above definition and are,
therefore, subject to the inflation
adjustment in the following instances:
Sections 6(c), 6(d), 6b, and 6c of the
CEA.6
Section 6(c) of the CEA, as amended
by Section 753(a) of the Dodd-Frank
Act, sets the maximum CMP that may be
imposed by the Commission in an
administrative proceeding on ‘‘any
person (other than a registered entity)’’
for: (1) Each violation of Section 6(c) of
the CEA ‘‘or any other provisions of
[the] Act or of the rules, regulations, or
orders of the Commission thereunder’’
to the greater of $140,000 or triple the
monetary gain to the violator; and (2)
any ‘‘manipulation or attempted
manipulation in violation of’’ Section
6(c) or 9(a)(2) of the CEA to the greater
of $1,000,000 or triple the monetary
gain to the violator.7
Section 6(d) of the CEA, as amended
by Section 753(b) of the Dodd-Frank
Act, sets the maximum CMP that may be
imposed by the Commission in an
administrative proceeding on ‘‘any
person (other than a registered entity 8)’’
for violations of the CEA ‘‘or any other
provisions of [the CEA] or of the rules,
regulations, or orders of the Commission
thereunder’’ to ‘‘the greater of $140,000
or triple the monetary gain’’ to the
violator.9
Section 6b of the CEA provides that
the Commission in an administrative
proceeding may impose a CMP on: (1)
any registered entity for not enforcing or
has not enforced its rules of government
made a condition of its designation or
registration’’ as set forth in the CEA, or
(2) ‘‘any registered entity, or any
director, officer, agent, or employee of
any registered entity,’’ for violations of
the CEA ‘‘or any rules, regulations, or
orders of the Commission
thereunder.’’ 10 For each violation for
which a CMP is assessed pursuant to
67
U.S.C. 9, 13a, 13a–1, 13b.
U.S.C. 9.
8 The term ‘‘registered entity’’ is a defined term
under the CEA. Section 1a(40) provides that the
term ‘‘registered entity’’ means a board of trade
designated as a contract market under section 7 of
the CEA; a derivatives clearing organization
registered under section 7a–1 of the CEA; a board
of trade designated as a contract market under
section 7b–1 of the CEA; a swap execution facility
registered under section 7b–3 of the CEA; a swap
data repository registered under section 24a of the
CEA; and with respect to a contract that the
Commission determines is a significant price
discovery contract, any electronic trading facility on
which the contract is executed or traded. 7 U.S.C.
1a(40).
9 7 U.S.C. 13b.
10 7 U.S.C. 13a.
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Section 6b, Rule 143.8(a)(3) sets the
current maximum penalty at: the greater
of $1,000,000 or triple the monetary
gain to such person for manipulation or
attempted manipulation in violation of
Section 6(c), 6(d), or 9(a)(2) of the CEA;
and the greater of $675,000 or triple the
monetary gain to such person for all
other violations.11
Section 6c of the CEA provides that
Commission may bring an action in the
‘‘proper district court of the United
States or the proper United States court
of any territory or other place subject to
the jurisdiction of the United States’’
and the court may impose on a CMP on
‘‘any registered entity or other person’’
found by the court to have committed
any violation of any provision of the
CEA ‘‘or any rule, regulation, or order
thereunder, or is restraining trading in
any commodity for future delivery or
any swap.’’ 12 For each violation for
which a CMP is assessed pursuant to
Section 6c(d), Rule 143.8(a)(2) sets the
current maximum penalty at: the greater
of $1,000,000 or triple the monetary
gain to such person for manipulation or
attempted manipulation in violation of
Section 6(c), 6(d), or 9(a)(2) of the CEA;
and the greater of $140,000 or triple the
monetary gain to such person for all
other violations.13
III. Cost-of-Living Adjustment for
Commodity Exchange Act Civil
Monetary Penalties
A. Methodology
The formula for determining the costof-living adjustment, first defined by the
FCPIAA, and amended by the DCIA,
consists of a four-step process.
The first step entails determining the
inflation adjustment factor. This is done
by calculating the percentage increase
by which the Consumer Price Index for
all-urban consumers published by the
Department of Labor (CPI) 14 for the
month of June of the calendar year
preceding the adjustment exceeds the
CPI for the month of June of the
calendar year in which the amount of
such CMP was last set or adjusted
pursuant to law. The CMPs for Sections
6(c) and 6(d) of the CEA were last set
by the Dodd-Frank Act, effective in the
11 17
CFR 143.8(a)(3).
U.S.C. 13a–1.
13 17 CFR 143.8(a)(2).
14 The Consumer Price Index means the
Consumer Price Index for all urban consumers
published by the Department of Labor. Interested
parties may find the relevant Consumer Price Index
on the Internet. To access this information, go to the
Consumer Price Index Home Page at: https://
www.bls.gov/cpi/. Under the ‘‘CPI Databases’’
heading, select ‘‘CPI—All Urban Consumers
(Current Series)’’, ‘‘Top Picks.’’ Then check the box
for ‘‘U.S. All Items, 1967 = 100–CUUR0000AA0’’,
and click the ‘‘Retrieve data’’ button.
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calendar year 2011. The CMPs for
Sections 6b and 6c of the CEA were last
set by Commission Rule, effective in the
calendar year 2008.15 Accordingly, the
inflation adjustment factor for Sections
6(c) and 6(d) of the CEA equals the CPI
for June 2011 (i.e., June of the year
preceding this year) divided by that
index for June 2011, and the inflation
adjustment factor for Sections 6b and 6c
of the CEA equals the CPI for June 2011
divided by that index for June 2008.16
Second, the inflation adjustment
factors are then multiplied by the
current maximum CMPs to calculate the
raw inflation increase. Third, this raw
inflation increase is then rounded
according to the guidelines set forth by
the FCPIAA to calculate the final
inflation increase.17 Fourth, the final
inflation increase is added to the current
CMP maximum to obtain the new CMP
maximum penalty.
B. Civil Monetary Penalty Adjustments
In Commission actions pursuant to
Sections 6(c) or (d) of the CEA, the
amount set for the maximum CMP for
manipulation or attempted
manipulation violations is $1,000,000,
and the amount set for the maximum
CMP for all other violations is $140,000.
Applying the CPI adjustment
methodology, no adjustment to these
CMP amounts is required.18
In Commission actions pursuant to
Section 6b of the CEA, the amount set
for the CMP for manipulation and
attempted manipulation violations is
$1,000,000 (or triple the monetary gain)
and the amount set for the CMP for all
other violations is $675,000 (or triple
the monetary gain). Applying the CPI
adjustment methodology, these CMP
amounts must be increased by $25,000
each, and the new CMP maximums are
$1,025,000 (or triple the monetary gain)
for manipulation and attempted
manipulation violations, and $700,000
15 See Adjustment of Civil Monetary Penalties for
Inflation, 73 FR 57512 (Oct. 3, 2008) (effective Oct.
23, 2008).
16 The CPI for June 2011 was 676.162, and the CPI
for June 2008 was 655.474. Therefore, the relevant
inflation adjustment factor for Sections 6(c) and
6(d) of the Act equals 676.162 divided by 676.162,
which is 0.0 for computational purposes, and for
Sections 6b and 6c equals 676.162 divided by
655.474, which is 0.0316 for computational
purposes.
17 The FCPIAA, as amended by the DCIA,
provides in relevant part that any increase shall be
rounded to the nearest multiple of $10,000 in the
case of penalties greater than $100,000 but less than
or equal to $200,000; and multiple of $25,000 in the
case of penalties greater than $200,000.
18 Because the inflation adjustment factor for
these CMPs is 0.0, the CMP amounts are not
required to be revised pursuant to FCPIAA.
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65101
(or triple the monetary gain) for all other
violations.19
In Commission actions pursuant to
Section 6c of the CEA, the amount set
for the CMP for manipulation and
attempted manipulation violations is
$1,000,000 (or triple the monetary gain)
and the amount set for the CMP for all
other violations is $140,000 (or triple
the monetary gain). Applying the CPI
adjustment methodology, the CMP
amount for manipulation and attempted
manipulation violations must be
increased by $25,000 to $1,025,000 (or
triple the monetary gain), while the
CMP amount for all other violations
remains unchanged at $140,000 (or
triple the monetary gain).20
The FCPIAA provides that ‘‘any
increase under [FCPIAA] in a CMP shall
apply only to violations which occur
after the date the increase takes
effect.’’ 21 Thus, the new CMP amounts
may be applied only to violations of the
CEA that occur after the effective date
of this amendment, October 23, 2012.
IV. Administrative Compliance
A. Notice Requirement
The notice and comment procedures
of 5 U.S.C. 553 do not apply to this
rulemaking because the Commission is
acting herein pursuant to statutory
language which mandates that the
Commission act in a nondiscretionary
matter. Lake Carriers’ Ass’n v. E.P.A.,
652 F.3d 1, 10 (DC Cir. 2011).22
19 Multiplying the CMP amounts by the inflation
adjustment factor results in a raw adjustment
amount of $31,562 for manipulation and attempted
manipulation violations (0.03156 × $1,000,000), and
a raw adjustment amount of $21,304 for all other
violations (0.03156 × $675,000). Because the CMP
amounts are greater than $200,000, the raw
adjustment amounts must be rounded to the nearest
$25,000, which results in a final adjustment amount
of $25,000 for all violations, including
manipulation and attempted manipulation
violations.
20 Multiplying the CMP amounts by the inflation
adjustment factor results in a raw adjustment
amount of $31,562 for manipulation and attempted
manipulation violations (0.03156 × $1,000,000), and
a raw adjustment amount of $3,156 for all other
violations (0.03156 × $140,000). Because the CMP
amount for manipulation and attempted
manipulation violations is greater than $200,000,
the raw adjustment amount must be rounded to the
nearest $25,000, which results in a final adjustment
amount of $25,000 for these violations. Because the
CMP amount for all other violations is less than
$200,000, the raw adjustment amount must be
rounded to the nearest $10,000, which results in a
final adjustment amount of $0 for these violations.
21 See also Landgraf v. USI Film Products, 511
U.S. 244 (1994) (holding that there is a presumption
against retroactivity in changes to damage remedies
or civil penalties in the absence of clear statutory
language to the contrary).
22 The Commission has determined that the
amendment to Rule 143.8 is exempt from the
provisions of the Administrative Procedure Act, 5
U.S.C. 553, which generally require notice of
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B. Regulatory Flexibility Act
Act 23
The Regulatory Flexibility
requires agencies with rulemaking
authority to consider the impact of
certain of their rules on small
businesses. A regulatory flexibility
analysis is only required for ‘‘rule[s] for
which the agency publishes a general
notice of proposed rulemaking pursuant
to section 553(b) * * * or any other
law.’’ As the Commission is not
obligated by section 553(b) or any other
law to publish a general notice of
proposed rulemaking with respect to the
revisions being made to regulation
143.8, the Commission additionally is
not obligated to conduct a regulatory
flexibility analysis.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(PRA), 44 U.S.C. 3507(d), which
imposes certain requirements on
Federal agencies, including the
Commission, in connection with their
conducting or sponsoring any collection
of information as defined by the PRA,
does not apply to this rule. This rule
amendment does not contain
information collection requirements that
require the approval of the Office of
Management and Budget.
D. Consideration of Costs and Benefits
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Section 15(a) of the CEA, 7 U.S.C.
19(a), requires the Commission to
consider the costs and benefits of its
action before issuing a new regulation.
Section 15(a) further specifies that costs
and benefits shall be evaluated in light
of five broad areas of market and public
concern: (1) Protection of market
participants and the public; (2)
efficiency, competitiveness, and
financial integrity of futures markets; (3)
price discovery; (4) sound risk
management practices; and (5) other
public interest considerations.
The Commission believes that
benefits of this rulemaking greatly
outweigh the costs, if any. As the
Commission understands, the statutory
provisions by which it is making costof-living adjustments to the civil money
penalties in regulation 143.8 were
enacted to ensure that civil money
penalties do not lose their deterrence
value because of inflation. An analysis
of the costs and benefits of these
adjustments were made before
enactment of the statutory provisions
under which the Commission is
proposed rulemaking and provide other
opportunities for public participation, but excludes
rules of agency practice, such as those found in part
143 of the Commission’s regulations, and in
particular rule 143.8 being revised herein.
23 5 U.S.C. 601–612.
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operating, and limit the discretion of the
Commission to the extent that there are
no regulatory choices the Commission
could make that would supersede the
pre-enactment analysis with respect to
the five factors enumerated in section
15(a), or any other factors.
List of Subjects in 17 CFR Part 143
Civil monetary penalties, Claims.
In consideration of the foregoing and
pursuant to authority contained in
Sections 6(c), 6(d), 6b and 6c of the
CEA, 7 U.S.C. 9, 13a, 13a–1(d), 13b, and
28 U.S.C. 2461 note, the Commission
hereby amends part 143 of chapter I of
title 17 of the Code of Federal
Regulations as follows:
PART 143—COLLECTION OF CLAIMS
OWED THE UNITED STATES ARISING
FROM ACTIVITIES UNDER THE
COMMISSION’S JURISDICTION
1. The authority citation for part 143
continues to read as follows:
■
Authority: 7 U.S.C. 9, 15, 9a, 12a(5), 13a,
13a–1(d), 13(a), 13b; 31 U.S.C. 3701–3719; 28
U.S.C. 2461 note.
2. Section 143.8 is amended by
revising paragraph (a) to read as follows:
■
§ 143.8 Inflation-adjusted civil monetary
penalties.
(a) Unless otherwise amended by an
act of Congress, the inflation-adjusted
maximum civil monetary penalty for
each violation of the Commodity
Exchange Act or the rules, regulations or
orders promulgated thereunder that may
be assessed or enforced under the
Commodity Exchange Act in an
administrative proceeding before the
Commission or a civil action in Federal
court will be:
(1) For a civil penalty assessed
pursuant to Section 6(c) of the
Commodity Exchange Act, 7 U.S.C. 9,
against any person (other than a
registered entity):
(i) For manipulation or attempted
manipulation violations:
(A) Committed on or after May 22,
2008, not more than the greater of
$1,000,000 or triple the monetary gain
to such person for each such violation;
and
(ii) For all other violations:
(A) Committed between November 27,
1996 and October 22, 2000, not more
than the greater of $110,000 or triple the
monetary gain to such person for each
such violation;
(B) Committed between October 23,
2000 and October 22, 2004, not more
than the greater of $120,000 or triple the
monetary gain to such person for each
such violation;
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(C) Committed between October 23,
2004 and October 22, 2008, not more
than the greater of $130,000 or triple the
monetary gain to such person for each
such violation; and
(D) Committed on or after October 23,
2008, not more than the greater of
$140,000 or triple the monetary gain to
such person for each such violation; and
(2) For a civil monetary penalty
assessed pursuant to Section 6(d) of the
Commodity Exchange Act, 7 U.S.C. 13b,
against any person (other than a
registered entity):
(i) For violations committed on or
after August 15, 2011, not more than the
greater of $140,000 or triple the
monetary gain to such person for each
such violation; and
(ii) [Reserved]
(3) For a civil monetary penalty
assessed pursuant to Section 6b of the
Commodity Exchange Act, 7 U.S.C. 13a,
against any registered entity or any
director, officer, agent, or employee of
any registered entity:
(i) For manipulation or attempted
manipulation violations:
(A) Committed between May 22, 2008
and August 14, 2011, not more than the
greater of $1,000,000 or triple the
monetary gain to such person for each
such violation;
(B) committed on or after August 15,
2011, not more than the greater of
$1,025,000 or triple the monetary gain
to such person for each such violation;
and
(ii) For all other violations:
(A) Committed between November 27,
1996 and October 22, 2000, not more
than $550,000 for each such violation;
(B) Committed between October 23,
2000 and October 22, 2004, not more
than $575,000 for each such violation;
(C) Committed between October 23,
2004 and October 22, 2008, not more
than $625,000 for each such violation;
(D) Committed between October 23,
2008 and October 22, 2012, not more
than the greater of $675,000 or triple the
monetary gain to such person for each
such violation; and
(E) Committed on or after October 23,
2012, not more than the greater of
$700,000 or triple the monetary gain to
such person for each such violation; and
(4) For a civil monetary penalty
assessed pursuant to Section 6c of the
Commodity Exchange Act, 7 U.S.C. 13a–
1, against any registered entity or other
person:
(i) For manipulation or attempted
manipulation violations:
(A) Committed between May 22, 2008
and August 14, 2011, not more than the
greater of $1,000,000 or triple the
monetary gain to such person for each
such violation; and
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(B) Committed on or after August 15,
2011, not more than the greater of
$1,025,000 or triple the monetary gain
to such person for each such violation;
and
(ii) For all other violations:
(A) Committed between November 27,
1996 and October 22, 2000, not more
than the greater of $110,000 or triple the
monetary gain to such person for each
such violation;
(B) Committed between October 23,
2000 and October 22, 2004, not more
than the greater of $120,000 or triple the
monetary gain to such person for each
such violation;
(C) Committed between October 23,
2004 and October 22, 2008, not more
than the greater of $130,000 or triple the
monetary gain to such person for each
such violation; and
(D) Committed on or after October 23,
2008, not more than the greater of
$140,000 or triple the monetary gain to
such person for each such violation.
*
*
*
*
*
Issued in Washington, DC, on October 18,
2012, by the Commission.
Sauntia S. Warfield,
Assistant Secretary of the Commission.
22, 2012. This document announces
approval of the ICR.
DATES: The ICR associated with the final
rule published in the Federal Register
on October 20, 2011, at 76 FR 65121.
The Office of Management and Budget
(OMB) approved and cleared the
associated Information Collection
Requirements on August 22, 2012,
under OMB Control Number 0596–0227.
FOR FURTHER INFORMATION CONTACT:
Scott Stewart, U.S. Department of
Agriculture, Forest Service, State and
Private Forestry, Cooperative Forestry,
202–205–1618. Individuals who use
telecommunication devices for the deaf
(TDD) may call the Federal Information
Relay Service (FIRS) at 1–800–877–8339
between 8:00 a.m. and 8:00 p.m.,
Eastern Standard Time, Monday
through Friday.
Dated: October 16, 2012.
Harris D. Sherman,
Under Secretary, Natural Resources and
Environment.
[FR Doc. 2012–26247 Filed 10–24–12; 8:45 am]
BILLING CODE 3410–11–P
POSTAL SERVICE
Note: The following appendix will not
appear in the Code of Federal Regulations.
39 CFR Part 966
Appendix to Adjustment of Civil Monetary
Penalties for Inflation—Commission Voting
Summary and Statements of Commissioners
Rules of Practice in Proceedings
Relative to Administrative Offsets
Initiated Against Former Employees of
the Postal Service
Appendix 1—Commission Voting Summary
On this matter, Chairman Gensler and
Commissioners Sommers, Chilton, O’Malia
and Wetjen voted in the affirmative; no
Commissioner voted in the negative.
Postal Service.
Final rule.
AGENCY:
ACTION:
Forest Service, USDA.
Final rule; notice of approval of
Information Collection Request (ICR).
This document revises the
rules of practice of the Judicial Officer
in proceedings relative to administrative
offsets initiated against former
employees of the Postal Service. These
revisions update the rules to reflect
changes in the Postal Service’s debt
collection regulations and procedures,
eliminate outdated provisions, and
conform the rules to the Judicial
Officer’s existing practice.
DATES: Effective date: November 26,
2012.
FOR FURTHER INFORMATION CONTACT:
Administrative Judge Gary E. Shapiro,
2101 Wilson Boulevard, Suite 600,
Arlington, VA 22201–3078; Telephone:
(703) 812–1900.
SUPPLEMENTARY INFORMATION:
The final rule entitled
Community Forest and Open Space
Conservation Program was published on
October 20, 2011. The Office of
Management and Budget approved and
cleared the associated information
collection requirements (ICR) on August
A. Executive Summary
The rules of practice in proceedings
relative to administrative offsets
initiated against former employees of
the Postal Service are set forth in 39
CFR part 966. The Postal Service is
concurrently revising its regulations
[FR Doc. 2012–26090 Filed 10–24–12; 8:45 am]
BILLING CODE 6351–01–P
DEPARTMENT OF AGRICULTURE
Forest Service
36 CFR Part 230
RIN 0596–AC84
Community Forest and Open Space
Conservation Program; Approval of
Information Collection Request
AGENCY:
ACTION:
erowe on DSK2VPTVN1PROD with
SUMMARY:
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SUMMARY:
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65103
pertaining to collecting debts from
former employees contained in the
Postal Service Employment and Labor
Relations Manual (ELM). These ELM
revisions conform existing Postal
Service regulations to the requirements
of the Debt Collection Act. The revisions
in this document will bring 39 CFR part
966 into accord with the Postal Service’s
revised regulations for collecting debts
from former employees by
administrative offset. In addition, minor
changes will be made to eliminate
outdated provisions and conform these
rules to the existing practice of the
Judicial Officer.
The Postal Service published these
proposed changes to 39 CFR part 966 on
September 4, 2012 (77 FR 53830–34).
No comments were received. The final
version of the rule is, accordingly
unmodified, with the exception of
minor changes to § 966.9, intended to be
clarifying only.
B. Summary of Changes
Changes to § 966.2(a) cross reference
the Postal Service’s new ELM provisions
pertaining to administrative offsets and
also clarify that such offsets are taken
pursuant to the statutory authority of 31
U.S.C. 3716. Changes to § 966.2(b)
clarify that the regulations contained in
39 CFR part 966 are intended to be
consistent with the Federal Claims
Collection Standards promulgated
jointly by the Department of Justice and
the Treasury, found at 31 CFR parts
900–904.
Changes to § 966.3 update the
definitions of part 966 to refer to the
Postal Service Accounting Service
Center (ASC) or successor installation
instead of the area Postmaster/
Installation head. The definition of
‘‘reconsideration’’ in paragraph (i) is
thus revised to refer to action taken by
the ASC. These changes accurately
reflect the Postal Service’s current
practices for collecting debts from
former employees, as collections from
former employees are normally handled
through the ASC. Definitions are also
updated to include the Federal Claims
Collection Standards, referenced
elsewhere in the revised regulations.
Changes to paragraph (j) are nonsubstantive and provide the parties with
useful contact information.
Changes to § 966.4 revise the
procedures for filing a petition for a
hearing under part 966. These revisions
align these regulations with the Postal
Service’s revised ELM regulations
pertaining to collecting debts from
former employees by administrative
offset, the Postal Service’s current debt
collection procedures, and current
practice before the Judicial Officer.
E:\FR\FM\25OCR1.SGM
25OCR1
]]>Agencies
[Federal Register Volume 77, Number 207 (Thursday, October 25, 2012)]
[Rules and Regulations]
[Pages 65100-65103]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-26090]
=======================================================================
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 143
RIN 3038-AD76
Adjustment of Civil Monetary Penalties for Inflation
AGENCY: Commodity Futures Trading Commission
ACTION: Final rule.
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SUMMARY: The Commodity Futures Trading Commission (Commission) is
amending its rule that governs the maximum amount of civil monetary
penalties, to adjust for inflation. This rule sets forth the maximum,
inflation-adjusted dollar amount for civil monetary penalties (CMPs)
assessable for violations of the Commodity Exchange Act (CEA) and
Commission rules, regulations and orders thereunder. The rule, as
amended, implements the Federal Civil Penalties Inflation Adjustment
Act of 1990, as amended by the Debt Collection Improvement Act of 1996.
DATES: Effective Date: This final rule will become effective October
25, 2012.
FOR FURTHER INFORMATION CONTACT: Edward J. Riccobene, Associate Chief
Counsel, Division of Enforcement, at (202) 418-5327 or
ericcobene@cftc.gov, Commodity Futures Trading Commission, 1155 21st
Street NW., Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Civil Penalties Inflation Adjustment Act of 1990
(FCPIAA), as amended by the Debt Collection Improvement Act of 1996
(DCIA),\1\ requires the head of each Federal agency to adjust by
regulation, at least once every four years, the maximum amount of CMPs
provided by law within the jurisdiction of that agency by the cost of
living adjustment defined in the FCPIAA, as amended.\2\ Because one of
the purposes of the inflation adjustments includes maintaining the
deterrent effect of CMPs and promoting compliance with the law, the
Commission monitors the impact of inflation on its CMP maximums and
adjusts them as needed to implement the requirements and purposes of
the FCPIAA.\3\
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\1\ The FCPIAA, Public Law 101-410 (1990), and the relevant
amendments to the FCPIAA contained in the DCIA, Public Law 104-134
(1996), is codified at 28 U.S.C. 2461 note.
\2\ The DCIA also requires that the range of minimum and maximum
CMPs be adjusted, if applicable. For the relevant CMPs within the
Commission's jurisdiction, the Act provides only for maximum amounts
that can be assessed for each violation of the Act or the rules,
regulations and orders promulgated thereunder; the Act does not set
forth any minimum penalties. Therefore, the remainder of this
release will refer only to CMP maximums.
\3\ Specifically, the FCPIAA states that the purpose of the
FCPIAA is to establish a mechanism that shall allow for regular
adjustment for inflation of civil monetary penalties; maintain the
deterrent effect of civil monetary penalties and promote compliance
with the law; and improve the collection by the Federal Government
of civil monetary penalties.
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On July 21, 2010, President Obama signed the Dodd-Frank Wall Street
Reform and Consumer Protection Act (Dodd-Frank Act) into law.\4\
Section 753 of the Dodd-Frank Act set maximum CMPs for Sections 6(c)
and 6(d) of the CEA, 7 U.S.C. 9, 13b. Section 753 of the Dodd-Frank Act
is effective August 15, 2011, the effective date for the Commission's
rules implementing this section.\5\
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\4\ See Dodd-Frank Act, Public Law 111-203, 124 Stat. 1376
(2010). The text of the Dodd-Frank Act may be accessed at https://www.cftc.gov/LawRegulation/OTCDERIVATIVES/index.htm.
\5\ Prohibition of Employment, or Attempted Employment, of
Manipulative and Deceptive Devices and Prohibition on Price
Manipulation, 76 FR 41398 (July 14, 2011) (implementing Section 753
of the CEA; effective August 15, 2011).
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II. Commodity Exchange Act Civil Monetary Penalties
The inflation adjustment requirement applies to any penalty, fine
or other sanction that is for a specific monetary amount as provided by
Federal law; or has a maximum amount provided for by Federal law; and
is assessed or enforced by an agency pursuant to Federal law; and is
assessed or enforced pursuant to an administrative proceeding or a
civil action in the Federal courts. [28 U.S.C. 2461 note.] The CEA
provides for CMPs that meet the above definition and are, therefore,
subject to the inflation adjustment in the following instances:
Sections 6(c), 6(d), 6b, and 6c of the CEA.\6\
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\6\ 7 U.S.C. 9, 13a, 13a-1, 13b.
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Section 6(c) of the CEA, as amended by Section 753(a) of the Dodd-
Frank Act, sets the maximum CMP that may be imposed by the Commission
in an administrative proceeding on ``any person (other than a
registered entity)'' for: (1) Each violation of Section 6(c) of the CEA
``or any other provisions of [the] Act or of the rules, regulations, or
orders of the Commission thereunder'' to the greater of $140,000 or
triple the monetary gain to the violator; and (2) any ``manipulation or
attempted manipulation in violation of'' Section 6(c) or 9(a)(2) of the
CEA to the greater of $1,000,000 or triple the monetary gain to the
violator.\7\
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\7\ 7 U.S.C. 9.
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Section 6(d) of the CEA, as amended by Section 753(b) of the Dodd-
Frank Act, sets the maximum CMP that may be imposed by the Commission
in an administrative proceeding on ``any person (other than a
registered entity \8\)'' for violations of the CEA ``or any other
provisions of [the CEA] or of the rules, regulations, or orders of the
Commission thereunder'' to ``the greater of $140,000 or triple the
monetary gain'' to the violator.\9\
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\8\ The term ``registered entity'' is a defined term under the
CEA. Section 1a(40) provides that the term ``registered entity''
means a board of trade designated as a contract market under section
7 of the CEA; a derivatives clearing organization registered under
section 7a-1 of the CEA; a board of trade designated as a contract
market under section 7b-1 of the CEA; a swap execution facility
registered under section 7b-3 of the CEA; a swap data repository
registered under section 24a of the CEA; and with respect to a
contract that the Commission determines is a significant price
discovery contract, any electronic trading facility on which the
contract is executed or traded. 7 U.S.C. 1a(40).
\9\ 7 U.S.C. 13b.
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Section 6b of the CEA provides that the Commission in an
administrative proceeding may impose a CMP on: (1) any registered
entity for not enforcing or has not enforced its rules of government
made a condition of its designation or registration'' as set forth in
the CEA, or (2) ``any registered entity, or any director, officer,
agent, or employee of any registered entity,'' for violations of the
CEA ``or any rules, regulations, or orders of the Commission
thereunder.'' \10\ For each violation for which a CMP is assessed
pursuant to
[[Page 65101]]
Section 6b, Rule 143.8(a)(3) sets the current maximum penalty at: the
greater of $1,000,000 or triple the monetary gain to such person for
manipulation or attempted manipulation in violation of Section 6(c),
6(d), or 9(a)(2) of the CEA; and the greater of $675,000 or triple the
monetary gain to such person for all other violations.\11\
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\10\ 7 U.S.C. 13a.
\11\ 17 CFR 143.8(a)(3).
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Section 6c of the CEA provides that Commission may bring an action
in the ``proper district court of the United States or the proper
United States court of any territory or other place subject to the
jurisdiction of the United States'' and the court may impose on a CMP
on ``any registered entity or other person'' found by the court to have
committed any violation of any provision of the CEA ``or any rule,
regulation, or order thereunder, or is restraining trading in any
commodity for future delivery or any swap.'' \12\ For each violation
for which a CMP is assessed pursuant to Section 6c(d), Rule 143.8(a)(2)
sets the current maximum penalty at: the greater of $1,000,000 or
triple the monetary gain to such person for manipulation or attempted
manipulation in violation of Section 6(c), 6(d), or 9(a)(2) of the CEA;
and the greater of $140,000 or triple the monetary gain to such person
for all other violations.\13\
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\12\ 7 U.S.C. 13a-1.
\13\ 17 CFR 143.8(a)(2).
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III. Cost-of-Living Adjustment for Commodity Exchange Act Civil
Monetary Penalties
A. Methodology
The formula for determining the cost-of-living adjustment, first
defined by the FCPIAA, and amended by the DCIA, consists of a four-step
process.
The first step entails determining the inflation adjustment factor.
This is done by calculating the percentage increase by which the
Consumer Price Index for all-urban consumers published by the
Department of Labor (CPI) \14\ for the month of June of the calendar
year preceding the adjustment exceeds the CPI for the month of June of
the calendar year in which the amount of such CMP was last set or
adjusted pursuant to law. The CMPs for Sections 6(c) and 6(d) of the
CEA were last set by the Dodd-Frank Act, effective in the calendar year
2011. The CMPs for Sections 6b and 6c of the CEA were last set by
Commission Rule, effective in the calendar year 2008.\15\ Accordingly,
the inflation adjustment factor for Sections 6(c) and 6(d) of the CEA
equals the CPI for June 2011 (i.e., June of the year preceding this
year) divided by that index for June 2011, and the inflation adjustment
factor for Sections 6b and 6c of the CEA equals the CPI for June 2011
divided by that index for June 2008.\16\
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\14\ The Consumer Price Index means the Consumer Price Index for
all urban consumers published by the Department of Labor. Interested
parties may find the relevant Consumer Price Index on the Internet.
To access this information, go to the Consumer Price Index Home Page
at: https://www.bls.gov/cpi/. Under the ``CPI Databases'' heading,
select ``CPI--All Urban Consumers (Current Series)'', ``Top Picks.''
Then check the box for ``U.S. All Items, 1967 = 100-CUUR0000AA0'',
and click the ``Retrieve data'' button.
\15\ See Adjustment of Civil Monetary Penalties for Inflation,
73 FR 57512 (Oct. 3, 2008) (effective Oct. 23, 2008).
\16\ The CPI for June 2011 was 676.162, and the CPI for June
2008 was 655.474. Therefore, the relevant inflation adjustment
factor for Sections 6(c) and 6(d) of the Act equals 676.162 divided
by 676.162, which is 0.0 for computational purposes, and for
Sections 6b and 6c equals 676.162 divided by 655.474, which is
0.0316 for computational purposes.
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Second, the inflation adjustment factors are then multiplied by the
current maximum CMPs to calculate the raw inflation increase. Third,
this raw inflation increase is then rounded according to the guidelines
set forth by the FCPIAA to calculate the final inflation increase.\17\
Fourth, the final inflation increase is added to the current CMP
maximum to obtain the new CMP maximum penalty.
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\17\ The FCPIAA, as amended by the DCIA, provides in relevant
part that any increase shall be rounded to the nearest multiple of
$10,000 in the case of penalties greater than $100,000 but less than
or equal to $200,000; and multiple of $25,000 in the case of
penalties greater than $200,000.
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B. Civil Monetary Penalty Adjustments
In Commission actions pursuant to Sections 6(c) or (d) of the CEA,
the amount set for the maximum CMP for manipulation or attempted
manipulation violations is $1,000,000, and the amount set for the
maximum CMP for all other violations is $140,000. Applying the CPI
adjustment methodology, no adjustment to these CMP amounts is
required.\18\
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\18\ Because the inflation adjustment factor for these CMPs is
0.0, the CMP amounts are not required to be revised pursuant to
FCPIAA.
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In Commission actions pursuant to Section 6b of the CEA, the amount
set for the CMP for manipulation and attempted manipulation violations
is $1,000,000 (or triple the monetary gain) and the amount set for the
CMP for all other violations is $675,000 (or triple the monetary gain).
Applying the CPI adjustment methodology, these CMP amounts must be
increased by $25,000 each, and the new CMP maximums are $1,025,000 (or
triple the monetary gain) for manipulation and attempted manipulation
violations, and $700,000 (or triple the monetary gain) for all other
violations.\19\
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\19\ Multiplying the CMP amounts by the inflation adjustment
factor results in a raw adjustment amount of $31,562 for
manipulation and attempted manipulation violations (0.03156 x
$1,000,000), and a raw adjustment amount of $21,304 for all other
violations (0.03156 x $675,000). Because the CMP amounts are greater
than $200,000, the raw adjustment amounts must be rounded to the
nearest $25,000, which results in a final adjustment amount of
$25,000 for all violations, including manipulation and attempted
manipulation violations.
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In Commission actions pursuant to Section 6c of the CEA, the amount
set for the CMP for manipulation and attempted manipulation violations
is $1,000,000 (or triple the monetary gain) and the amount set for the
CMP for all other violations is $140,000 (or triple the monetary gain).
Applying the CPI adjustment methodology, the CMP amount for
manipulation and attempted manipulation violations must be increased by
$25,000 to $1,025,000 (or triple the monetary gain), while the CMP
amount for all other violations remains unchanged at $140,000 (or
triple the monetary gain).\20\
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\20\ Multiplying the CMP amounts by the inflation adjustment
factor results in a raw adjustment amount of $31,562 for
manipulation and attempted manipulation violations (0.03156 x
$1,000,000), and a raw adjustment amount of $3,156 for all other
violations (0.03156 x $140,000). Because the CMP amount for
manipulation and attempted manipulation violations is greater than
$200,000, the raw adjustment amount must be rounded to the nearest
$25,000, which results in a final adjustment amount of $25,000 for
these violations. Because the CMP amount for all other violations is
less than $200,000, the raw adjustment amount must be rounded to the
nearest $10,000, which results in a final adjustment amount of $0
for these violations.
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The FCPIAA provides that ``any increase under [FCPIAA] in a CMP
shall apply only to violations which occur after the date the increase
takes effect.'' \21\ Thus, the new CMP amounts may be applied only to
violations of the CEA that occur after the effective date of this
amendment, October 23, 2012.
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\21\ See also Landgraf v. USI Film Products, 511 U.S. 244 (1994)
(holding that there is a presumption against retroactivity in
changes to damage remedies or civil penalties in the absence of
clear statutory language to the contrary).
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IV. Administrative Compliance
A. Notice Requirement
The notice and comment procedures of 5 U.S.C. 553 do not apply to
this rulemaking because the Commission is acting herein pursuant to
statutory language which mandates that the Commission act in a
nondiscretionary matter. Lake Carriers' Ass'n v. E.P.A., 652 F.3d 1, 10
(DC Cir. 2011).\22\
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\22\ The Commission has determined that the amendment to Rule
143.8 is exempt from the provisions of the Administrative Procedure
Act, 5 U.S.C. 553, which generally require notice of proposed
rulemaking and provide other opportunities for public participation,
but excludes rules of agency practice, such as those found in part
143 of the Commission's regulations, and in particular rule 143.8
being revised herein.
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[[Page 65102]]
B. Regulatory Flexibility Act
The Regulatory Flexibility Act \23\ requires agencies with
rulemaking authority to consider the impact of certain of their rules
on small businesses. A regulatory flexibility analysis is only required
for ``rule[s] for which the agency publishes a general notice of
proposed rulemaking pursuant to section 553(b) * * * or any other
law.'' As the Commission is not obligated by section 553(b) or any
other law to publish a general notice of proposed rulemaking with
respect to the revisions being made to regulation 143.8, the Commission
additionally is not obligated to conduct a regulatory flexibility
analysis.
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\23\ 5 U.S.C. 601-612.
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C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3507(d), which
imposes certain requirements on Federal agencies, including the
Commission, in connection with their conducting or sponsoring any
collection of information as defined by the PRA, does not apply to this
rule. This rule amendment does not contain information collection
requirements that require the approval of the Office of Management and
Budget.
D. Consideration of Costs and Benefits
Section 15(a) of the CEA, 7 U.S.C. 19(a), requires the Commission
to consider the costs and benefits of its action before issuing a new
regulation. Section 15(a) further specifies that costs and benefits
shall be evaluated in light of five broad areas of market and public
concern: (1) Protection of market participants and the public; (2)
efficiency, competitiveness, and financial integrity of futures
markets; (3) price discovery; (4) sound risk management practices; and
(5) other public interest considerations.
The Commission believes that benefits of this rulemaking greatly
outweigh the costs, if any. As the Commission understands, the
statutory provisions by which it is making cost-of-living adjustments
to the civil money penalties in regulation 143.8 were enacted to ensure
that civil money penalties do not lose their deterrence value because
of inflation. An analysis of the costs and benefits of these
adjustments were made before enactment of the statutory provisions
under which the Commission is operating, and limit the discretion of
the Commission to the extent that there are no regulatory choices the
Commission could make that would supersede the pre-enactment analysis
with respect to the five factors enumerated in section 15(a), or any
other factors.
List of Subjects in 17 CFR Part 143
Civil monetary penalties, Claims.
In consideration of the foregoing and pursuant to authority
contained in Sections 6(c), 6(d), 6b and 6c of the CEA, 7 U.S.C. 9,
13a, 13a-1(d), 13b, and 28 U.S.C. 2461 note, the Commission hereby
amends part 143 of chapter I of title 17 of the Code of Federal
Regulations as follows:
PART 143--COLLECTION OF CLAIMS OWED THE UNITED STATES ARISING FROM
ACTIVITIES UNDER THE COMMISSION'S JURISDICTION
0
1. The authority citation for part 143 continues to read as follows:
Authority: 7 U.S.C. 9, 15, 9a, 12a(5), 13a, 13a-1(d), 13(a),
13b; 31 U.S.C. 3701-3719; 28 U.S.C. 2461 note.
0
2. Section 143.8 is amended by revising paragraph (a) to read as
follows:
Sec. 143.8 Inflation-adjusted civil monetary penalties.
(a) Unless otherwise amended by an act of Congress, the inflation-
adjusted maximum civil monetary penalty for each violation of the
Commodity Exchange Act or the rules, regulations or orders promulgated
thereunder that may be assessed or enforced under the Commodity
Exchange Act in an administrative proceeding before the Commission or a
civil action in Federal court will be:
(1) For a civil penalty assessed pursuant to Section 6(c) of the
Commodity Exchange Act, 7 U.S.C. 9, against any person (other than a
registered entity):
(i) For manipulation or attempted manipulation violations:
(A) Committed on or after May 22, 2008, not more than the greater
of $1,000,000 or triple the monetary gain to such person for each such
violation; and
(ii) For all other violations:
(A) Committed between November 27, 1996 and October 22, 2000, not
more than the greater of $110,000 or triple the monetary gain to such
person for each such violation;
(B) Committed between October 23, 2000 and October 22, 2004, not
more than the greater of $120,000 or triple the monetary gain to such
person for each such violation;
(C) Committed between October 23, 2004 and October 22, 2008, not
more than the greater of $130,000 or triple the monetary gain to such
person for each such violation; and
(D) Committed on or after October 23, 2008, not more than the
greater of $140,000 or triple the monetary gain to such person for each
such violation; and
(2) For a civil monetary penalty assessed pursuant to Section 6(d)
of the Commodity Exchange Act, 7 U.S.C. 13b, against any person (other
than a registered entity):
(i) For violations committed on or after August 15, 2011, not more
than the greater of $140,000 or triple the monetary gain to such person
for each such violation; and
(ii) [Reserved]
(3) For a civil monetary penalty assessed pursuant to Section 6b of
the Commodity Exchange Act, 7 U.S.C. 13a, against any registered entity
or any director, officer, agent, or employee of any registered entity:
(i) For manipulation or attempted manipulation violations:
(A) Committed between May 22, 2008 and August 14, 2011, not more
than the greater of $1,000,000 or triple the monetary gain to such
person for each such violation;
(B) committed on or after August 15, 2011, not more than the
greater of $1,025,000 or triple the monetary gain to such person for
each such violation; and
(ii) For all other violations:
(A) Committed between November 27, 1996 and October 22, 2000, not
more than $550,000 for each such violation;
(B) Committed between October 23, 2000 and October 22, 2004, not
more than $575,000 for each such violation;
(C) Committed between October 23, 2004 and October 22, 2008, not
more than $625,000 for each such violation;
(D) Committed between October 23, 2008 and October 22, 2012, not
more than the greater of $675,000 or triple the monetary gain to such
person for each such violation; and
(E) Committed on or after October 23, 2012, not more than the
greater of $700,000 or triple the monetary gain to such person for each
such violation; and
(4) For a civil monetary penalty assessed pursuant to Section 6c of
the Commodity Exchange Act, 7 U.S.C. 13a-1, against any registered
entity or other person:
(i) For manipulation or attempted manipulation violations:
(A) Committed between May 22, 2008 and August 14, 2011, not more
than the greater of $1,000,000 or triple the monetary gain to such
person for each such violation; and
[[Page 65103]]
(B) Committed on or after August 15, 2011, not more than the
greater of $1,025,000 or triple the monetary gain to such person for
each such violation; and
(ii) For all other violations:
(A) Committed between November 27, 1996 and October 22, 2000, not
more than the greater of $110,000 or triple the monetary gain to such
person for each such violation;
(B) Committed between October 23, 2000 and October 22, 2004, not
more than the greater of $120,000 or triple the monetary gain to such
person for each such violation;
(C) Committed between October 23, 2004 and October 22, 2008, not
more than the greater of $130,000 or triple the monetary gain to such
person for each such violation; and
(D) Committed on or after October 23, 2008, not more than the
greater of $140,000 or triple the monetary gain to such person for each
such violation.
* * * * *
Issued in Washington, DC, on October 18, 2012, by the
Commission.
Sauntia S. Warfield,
Assistant Secretary of the Commission.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix to Adjustment of Civil Monetary Penalties for Inflation--
Commission Voting Summary and Statements of Commissioners
Appendix 1--Commission Voting Summary
On this matter, Chairman Gensler and Commissioners Sommers,
Chilton, O'Malia and Wetjen voted in the affirmative; no
Commissioner voted in the negative.
[FR Doc. 2012-26090 Filed 10-24-12; 8:45 am]
BILLING CODE 6351-01-P
