Sentencing Guidelines for United States Courts, 26425-26435 [2013-10678]
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Federal Register / Vol. 78, No. 87 / Monday, May 6, 2013 / Notices
DEPARTMENT OF THE TREASURY
Internal Revenue Service
Proposed Collection: Comment
Request for Regulation Project
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice and request for
comments.
AGENCY:
The Department of the
Treasury, as part of its continuing effort
to reduce paperwork and respondent
burden, invites the general public and
other Federal agencies to take this
opportunity to comment on proposed
and/or continuing information
collections, as required by the
Paperwork Reduction Act of 1995,
Public Law 104–13 (44 U.S.C.
3506(c)(2)(A)). Currently, the IRS is
soliciting comments concerning, Final
Election of Reduced Research Credit.
DATES: Written comments should be
received on or before July 5, 2013 to be
assured of consideration.
ADDRESSES: Direct all written comments
to Yvette B. Lawrence, Internal Revenue
Service, Room 6129, 1111 Constitution
Avenue NW., Washington, DC 20224.
FOR FURTHER INFORMATION CONTACT:
Requests for additional information or
copies of the regulations should be
directed to Kerry Dennis, (202) 927–
9368, or at Internal Revenue Service,
Room 6129, 1111 Constitution Avenue
NW., Washington DC 20224, or through
the Internet, at Kerry.Dennis@irs.gov.
SUPPLEMENTARY INFORMATION:
Title: Final Election of Reduced
Research Credit.
OMB Number: 1545–1155.
Regulation Project Number: TD 8282.
Abstract: This regulation relates to the
manner of making an election under
section 280C(3) of the Internal Revenue
Code. Taxpayers making this election
must reduce their section 41(a) research
credit, but are not required to reduce
their deductions for qualified research
expenses, as required in paragraphs (1)
and (2) of section 280C(c).
Current Actions: There is no change to
this existing regulation.
Type of Review: Extension of a
currently approved collection.
Affected Public: Individuals and
business or other for-profit
organizations.
Estimated Number of Respondents:
200.
Estimated Time per Respondent: 15
minutes.
Estimated Total Annual Burden
Hours: 50.
The following paragraph applies to all
of the collections of information covered
by this notice:
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SUMMARY:
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An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless the collection of information
displays a valid OMB control number.
Books or records relating to a collection
of information must be retained as long
as their contents may become material
in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential,
as required by 26 U.S.C. 6103.
Request for Comments: Comments
submitted in response to this notice will
be summarized and/or included in the
request for OMB approval. All
comments will become a matter of
public record. Comments are invited on:
(a) Whether the collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information shall have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the collection of
information; (c) ways to enhance the
quality, utility, and clarity of the
information to be collected; (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology; and (e) estimates of capital
or start-up costs and costs of operation,
maintenance, and purchase of services
to provide information.
Approved: April 29, 2013.
Yvette B. Lawrence,
IRS Reports Clearance Officer.
BILLING CODE 4830–01–P
UNITED STATES SENTENCING
COMMISSION
Sentencing Guidelines for United
States Courts
United States Sentencing
Commission.
ACTION: Notice of submission to
Congress of amendments to the
sentencing guidelines effective
November 1, 2013.
AGENCY:
Pursuant to its authority
under 28 U.S.C. 994(p), the Commission
has promulgated amendments to the
sentencing guidelines, policy
statements, commentary, and statutory
index. This notice sets forth the
amendments and the reason for each
amendment.
DATES: The Commission has specified
an effective date of November 1, 2013,
for the amendments set forth in this
notice.
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FOR FURTHER INFORMATION CONTACT:
Jeanne Doherty, Public Affairs Officer,
202–502–4502. The amendments set
forth in this notice also may be accessed
through the Commission’s Web site at
www.ussc.gov.
The
United States Sentencing Commission is
an independent agency in the judicial
branch of the United States
Government. The Commission
promulgates sentencing guidelines and
policy statements for federal sentencing
courts pursuant to 28 U.S.C. 994(a). The
Commission also periodically reviews
and revises previously promulgated
guidelines pursuant to 28 U.S.C. 994(o)
and generally submits guideline
amendments to Congress pursuant to 28
U.S.C. 994(p) not later than the first day
of May each year. Absent action of
Congress to the contrary, submitted
amendments become effective by
operation of law on the date specified
by the Commission (generally November
1 of the year in which the amendments
are submitted to Congress).
Notice of proposed amendments was
published in the Federal Register on
January 18, 2013 (see 78 FR 4197). The
Commission held a public hearing on
the proposed amendments in
Washington, DC, on March 13, 2013. On
April 30, 2013, the Commission
submitted these amendments to
Congress and specified an effective date
of November 1, 2013.
SUPPLEMENTARY INFORMATION:
Authority: 28 U.S.C. 994(a), (o), and (p);
USSC Rules of Practice and Procedure 4.1.
[FR Doc. 2013–10578 Filed 5–3–13; 8:45 am]
SUMMARY:
26425
Patti B. Saris,
Chair.
1. Amendment: Section 2B1.1(b) is
amended by striking paragraph (5); by
renumbering paragraphs (6) through (8)
as (5) through (7); by renumbering
paragraphs (13) through (18) as (14)
through (19); by inserting after
paragraph (12) the following:
‘‘(13) (Apply the greater) If the offense
involved misappropriation of a trade
secret and the defendant knew or
intended—
(A) that the trade secret would be
transported or transmitted out of the
United States, increase by 2 levels; or
(B) that the offense would benefit a
foreign government, foreign
instrumentality, or foreign agent,
increase by 4 levels.
If subparagraph (B) applies and the
resulting offense level is less than level
14, increase to level 14.’’; and in
paragraph (16) (as so renumbered) by
striking ‘‘(b)(15)(B)’’ and inserting
‘‘(b)(16)(B)’’.
The Commentary to § 2B1.1 captioned
‘‘Application Notes’’ is amended in
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Note 6 by striking ‘‘(b)(7)’’ both places
it appears and inserting ‘‘(b)(6)’’; in Note
10 by striking ‘‘(b)(13)’’ both places it
appears and inserting ‘‘(b)(14)’’; in Note
11 by striking ‘‘(b)(15)(A)’’ both places
it appears and inserting ‘‘(b)(16)(A)’’; in
Note 12 by striking ‘‘(b)(15)(B)’’ and
inserting ‘‘(b)(16)(B)’’; in Note 12(A) by
striking ‘‘(b)(15)(B)(i)’’ and inserting
‘‘(b)(16)(B)(i)’’; in Note 12(B) by striking
‘‘(b)(15)(B)(ii)’’ and inserting
‘‘(b)(16)(B)(ii)’’; in Note 13 by striking
‘‘(b)(17)’’ both places it appears and
inserting ‘‘(b)(18)’’; in Note 13(B) by
striking ‘‘(b)(17)(A)(iii)’’ both places it
appears and inserting ‘‘(b)(18)(A)(iii)’’,
and by striking ‘‘(b)(15)(B)’’ both places
it appears and inserting ‘‘(b)(16)(B)’’; in
Note 14 by striking ‘‘(b)(18)’’ each place
it appears and inserting ‘‘(b)(19)’’; and
in Note 19(B) by striking
‘‘(b)(17)(A)(iii)’’ and inserting
‘‘(b)(18)(A)(iii)’’.
The Commentary to § 2B1.1 captioned
‘‘Background’’ is amended by striking
‘‘(b)(6)’’, ‘‘(b)(8)’’, ‘‘(b)(14)(B)’’,
‘‘(b)(15)(A)’’, ‘‘(b)(15)(B)(i)’’, ‘‘(b)(16)’’,
‘‘(b)(17)’’, and ‘‘(b)(17)(B)’’ and inserting
‘‘(b)(5)’’, ‘‘(b)(7)’’, ‘‘(b)(15)(B)’’,
‘‘(b)(16)(A)’’, ‘‘(b)(16)(B)(i)’’, ‘‘(b)(17)’’,
‘‘(b)(18)’’, and ‘‘(b)(18)(B)’’, respectively;
and by inserting before the paragraph
that begins ‘‘Subsection (b)(15)(B)’’ (as
so amended) the following:
‘‘Subsection (b)(13) implements the
directive in section 3 of Public Law
112–269.’’.
Reason for Amendment: This
amendment responds to section 3 of the
Foreign and Economic Espionage
Penalty Enhancement Act of 2012,
Public Law 112–269 (enacted January
14, 2013), which contains a directive to
the Commission regarding offenses
involving stolen trade secrets or
economic espionage.
Section 3(a) of the Act directs the
Commission to ‘‘review and, if
appropriate, amend’’ the guidelines
‘‘applicable to persons convicted of
offenses relating to the transmission or
attempted transmission of a stolen trade
secret outside of the United States or
economic espionage, in order to reflect
the intent of Congress that penalties for
such offenses under the Federal
sentencing guidelines and policy
statements appropriately reflect the
seriousness of these offenses, account
for the potential and actual harm caused
by these offenses, and provide adequate
deterrence against such offenses.’’
Section 3(b) of the Act states that, in
carrying out the directive, the
Commission shall consider, among
other things, whether the guidelines
adequately address the simple
misappropriation of a trade secret; the
transmission or attempted transmission
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of a stolen trade secret outside of the
United States; and the transmission or
attempted transmission of a stolen trade
secret outside of the United States that
is committed or attempted to be
committed for the benefit of a foreign
government, foreign instrumentality, or
foreign agent.
The offenses described in the
directive may be prosecuted under 18
U.S.C. § 1831 (Economic espionage),
which requires that the defendant
specifically intend or know that the
offense ‘‘will benefit any foreign
government, foreign instrumentality, or
foreign agent,’’ and 18 U.S.C. § 1832
(Theft of trade secrets), which does not
require such specific intent or
knowledge. The statutory maximum
terms of imprisonment are 15 years for
a section 1831 offense and 10 years for
a section 1832 offense. Both offenses are
referenced in Appendix A (Statutory
Index) to § 2B1.1 (Theft, Property
Destruction, and Fraud).
In response to the directive, the
amendment revises the existing specific
offense characteristic at § 2B1.1(b)(5),
which provides an enhancement of two
levels ‘‘[i]f the offense involved
misappropriation of a trade secret and
the defendant knew or intended that the
offense would benefit a foreign
government, foreign instrumentality, or
foreign agent,’’ in two ways. First, it
broadens the scope of the enhancement
to provide a 2-level increase for trade
secret offenses in which the defendant
knew or intended that the trade secret
would be transported or transmitted out
of the United States. Second, it
increases the severity of the
enhancement to provide a 4-level
enhancement and a minimum offense
level of 14 for trade secret offenses in
which the defendant knew or intended
that the offense would benefit a foreign
government, foreign instrumentality, or
foreign agent. The enhancement also is
redesignated as subsection (b)(13).
In responding to the directive, the
Commission consulted with individuals
or groups representing law enforcement,
owners of trade secrets, victims of
economic espionage offenses, the
United States Department of Justice, the
United States Department of Homeland
Security, the United States Department
of State, the Office of the United States
Trade Representative, the Federal Public
and Community Defenders, and
standing advisory groups, among others.
The Commission also considered
relevant data and literature.
The Commission received public
comment and testimony that the
transmission of stolen trade secrets
outside of the United States creates
significant obstacles to effective
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investigation and prosecution and
causes both increased harm to victims
and more general harms to the nation.
With respect to the victim, civil
remedies may not be readily available or
effective, and the transmission of a
stolen trade secret outside of the United
States substantially increases the risk
that the trade secret will be exploited by
a foreign competitor. In contrast, the
simple movement of a stolen trade
secret within a domestic multinational
company (e.g., from a United States
office to an overseas office of the same
company) may not pose the same risks
or harms. More generally, the
Commission heard that foreign actors
increasingly target United States
companies for trade secret theft and that
such offenses pose a growing threat to
the nation’s global competitiveness,
economic growth, and national security.
Accordingly, the Commission
determined that a 2-level enhancement
is warranted for cases in which the
defendant knew or intended that a
stolen trade secret would be transported
or transmitted outside of the United
States.
The Commission also received public
comment and testimony that cases
involving economic espionage (i.e.,
trade secret offenses that benefit foreign
governments or entities under the
substantial control of foreign
governments) are particularly serious. In
such cases, the United States is unlikely
to obtain a foreign government’s
cooperation when seeking relief for the
victim, and offenders backed by a
foreign government likely will have
significant financial resources to combat
civil remedies. In addition, a foreign
government’s involvement increases the
threat to the nation’s economic and
national security. Accordingly, the
Commission determined that the
existing enhancement for economic
espionage should be increased from 2 to
4 levels and that such offenses should
be subject to a minimum offense level
of 14. This heightened enhancement is
consistent with the higher statutory
maximum penalties and fines applicable
to such offenses and the Commission’s
established treatment of economic
espionage as a more serious form of
trade secret theft.
Consistent with the directive, the
Commission also considered whether
the guidelines appropriately account for
the simple misappropriation of a trade
secret. The Commission determined that
such offenses are adequately accounted
for by existing provisions in the
Guidelines Manual, such as the loss
table in § 2B1.1(b)(1), the sophisticated
means enhancement at § 2B1.1(b)(10),
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and the adjustment for abuse of position
of trust or use of special skill at § 3B1.3.
2. Amendment: Section 2B1.1 is
amended by inserting before paragraph
(9) the following new paragraph:
‘‘(8) (Apply the greater) If—
(A) the offense involved conduct
described in 18 U.S.C. § 670, increase by
2 levels; or
(B) the offense involved conduct
described in 18 U.S.C. § 670, and the
defendant was employed by, or was an
agent of, an organization in the supply
chain for the pre-retail medical product,
increase by 4 levels.’’;
The Commentary to § 2B1.1 captioned
‘‘Application Notes’’ is amended in
Note 1 by inserting after the paragraph
that begins ‘‘ ‘Personal information’
means’’ the following:
‘‘ ‘Pre-retail medical product’ has the
meaning given that term in 18 U.S.C.
§ 670(e).’’; and by inserting after the
paragraph that begins ‘‘ ‘Publicly traded
company’ means’’ the following:
‘‘ ‘Supply chain’ has the meaning
given that term in 18 U.S.C. § 670(e).’’;
in Note 3(F)(i) by striking ‘‘Note 9(A)’’
and inserting ‘‘Note 10(A)’’; and by
renumbering Notes 7 through 19 as 8
through 20; by inserting after Note 6 the
following:
‘‘7. Application of Subsection
(b)(8)(B).—If subsection (b)(8)(B)
applies, do not apply an adjustment
under § 3B1.3 (Abuse of Position of
Trust or Use of Special Skill).’’; and in
Note 20 (as so renumbered) by adding
at the end of subparagraph (A)(ii) as the
last sentence the following: ‘‘Similarly,
an upward departure would be
warranted in a case involving conduct
described in 18 U.S.C. § 670 if the
offense resulted in serious bodily injury
or death, including serious bodily injury
or death resulting from the use of the
pre-retail medical product.’’.
The Commentary to § 2B1.1 captioned
‘‘Background’’ is amended by inserting
before the paragraph that begins
‘‘Subsection (b)(9)(D)’’ the following:
‘‘Subsection (b)(8) implements the
directive to the Commission in section
7 of Public Law 112–186.’’.
However, if § 2B1.1(b) already
contains a paragraph (8) because the
renumbering of paragraphs by
Amendment 1 of this document has not
taken effect, renumber the new
paragraph inserted into § 2B1.1(b) as
paragraph (8A) rather than paragraph
(8), and revise the Commentary so that
the new Note 7 inserted into the
Application Notes and the new
paragraph inserted into the Background
refer to subsection (b)(8A) rather than
subsection (b)(8).
Appendix A (Statutory Index) is
amended by inserting after the line
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referenced to 18 U.S.C. § 669 the
following:
‘‘18 U.S.C. § 670 2B1.1’’.
Reason for Amendment: This
amendment responds to the
Strengthening and Focusing
Enforcement to Deter Organized
Stealing and Enhance Safety Act of
2012, Public Law 112–186 (enacted
October 5, 2012) (the ‘‘Act’’), which
addressed various offenses involving
‘‘pre-retail medical products,’’ defined
as ‘‘a medical product that has not yet
been made available for retail purchase
by a consumer.’’ The Act created a new
criminal offense at 18 U.S.C. § 670 for
theft of pre-retail medical products,
increased statutory penalties for certain
related offenses when a pre-retail
medical product is involved, and
contained a directive to the
Commission.
New Offense at 18 U.S.C. § 670
The new offense at section 670 makes
it unlawful for any person in (or using
any means or facility of) interstate or
foreign commerce to—
(1) embezzle, steal, or by fraud or
deception obtain, or knowingly and
unlawfully take, carry away, or conceal
a pre-retail medical product;
(2) knowingly and falsely make, alter,
forge, or counterfeit the labeling or
documentation (including
documentation relating to origination or
shipping) of a pre-retail medical
product;
(3) knowingly possess, transport, or
traffic in a pre-retail medical product
that was involved in a violation of
paragraph (1) or (2);
(4) with intent to defraud, buy, or
otherwise obtain, a pre-retail medical
product that has expired or been stolen;
(5) with intent to defraud, sell, or
distribute, a pre-retail medical product
that is expired or stolen; or
(6) attempt or conspire to violate any
of paragraphs (1) through (5).
The offense generally carries a
statutory maximum term of
imprisonment of three years. If the
offense is an ‘‘aggravated offense,’’
however, higher statutory maximum
terms of imprisonment are provided.
The offense is an ‘‘aggravated offense’’
if—
(1) the defendant is employed by, or
is an agent of, an organization in the
supply chain for the pre-retail medical
product; or
(2) the violation—
(A) involves the use of violence, force,
or a threat of violence or force;
(B) involves the use of a deadly
weapon;
(C) results in serious bodily injury or
death, including serious bodily injury or
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26427
death resulting from the use of the
medical product involved; or
(D) is subsequent to a prior conviction
for an offense under section 670.
Specifically, the higher statutory
maximum terms of imprisonment are:
(1) Five years, if—
(A) the defendant is employed by, or
is an agent of, an organization in the
supply chain for the pre-retail medical
product; or
(B) the violation (i) involves the use
of violence, force, or a threat of violence
or force, (ii) involves the use of a deadly
weapon, or (iii) is subsequent to a prior
conviction for an offense under section
670.
(2) 15 years, if the value of the
medical products involved in the
offense is $5,000 or greater.
(3) 20 years, if both (1) and (2) apply.
(4) 30 years, if the offense results in
serious bodily injury or death, including
serious bodily injury or death resulting
from the use of the medical product
involved.
The amendment amends Appendix A
(Statutory Index) to reference the new
offense at 18 U.S.C. § 670 to § 2B1.1
(Theft, Property Destruction, and
Fraud). The Commission concluded that
§ 2B1.1 is the appropriate guideline
because the elements of the new offense
include theft or fraud.
Response to Directive
Section 7 of the Act directs the
Commission to ‘‘review and, if
appropriate, amend’’ the federal
sentencing guidelines and policy
statements applicable to the new offense
and the related offenses ‘‘to reflect the
intent of Congress that penalties for
such offenses be sufficient to deter and
punish such offenses, and appropriately
account for the actual harm to the
public from these offenses.’’ The
amendment amends § 2B1.1 to address
offenses involving pre-retail medical
products in two ways.
First, the amendment adds a new
specific offense characteristic at
§ 2B1.1(b)(8) that provides a twopronged enhancement with an
instruction to apply the greater. Prong
(A) provides a 2-level enhancement if
the offense involved conduct described
in 18 U.S.C. § 670. Prong (B) provides a
4-level enhancement if the offense
involved conduct described in 18 U.S.C.
§ 670 and the defendant was employed
by, or an agent of, an organization in the
supply chain for the pre-retail product.
Accompanying this new specific offense
characteristic is new Commentary
providing that, if prong (B) applies, ‘‘do
not apply an adjustment under § 3B1.3
(Abuse of Position of Trust or Use of
Special Skill).’’
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Based on public comment, testimony
and sentencing data, the Commission
concluded that an enhancement
differentiating fraud and theft offenses
involving medical products from those
involving other products is warranted
by the additional risk such offenses pose
to public health and safety. In addition,
such offenses undermine the public’s
confidence in the medical regulatory
and distribution system. The
Commission also concluded that the
risks and harms it identified would be
present in any theft or fraud offense
involving a pre-retail medical product,
regardless of the offense of conviction.
Therefore application of the new
specific offense characteristic is not
limited to offenses charged under 18
U.S.C. § 670.
The amendment provides a 4-level
enhancement for defendants who
commit such offenses while employed
in the supply chain for the pre-retail
medical product. Such defendants are
subject to an increased statutory
maximum and the Commission
determined that a heightened
enhancement should apply to reflect the
likelihood that the defendant’s position
in the supply chain facilitated the
commission or concealment of the
offense. Defendants who receive the 4level enhancement are not subject to the
adjustment at § 3B1.3 because the new
enhancement adequately accounts for
the concerns covered by § 3B1.3. The
Commission determined that existing
specific offense characteristics generally
account for other aggravating factors
included in the Act, such as loss, use or
threat of force, risk of death or serious
bodily injury, and weapon involvement,
and therefore additional new specific
offense characteristics are not necessary.
See, e.g., ’’§§ 2B1.1(b)(1), (b)(3), and
(b)(15) (as redesignated by the
amendment).
Second, it amends the upward
departure provisions in the Commentary
to § 2B1.1 at Application Note 19(A) to
provide—as an example of a case in
which an upward departure would be
warranted—a case ‘‘involving conduct
described in 18 U.S.C. § 670 if the
offense resulted in serious bodily injury
or death, including serious bodily injury
or death resulting from the use of the
pre-retail medical product.’’ Public
comment and testimony indicated that
§ 2B1.1 may not adequately account for
the harm created by theft or fraud
offenses involving pre-retail medical
products when such serious bodily
injury or death actually occurs as a
result of the offense. For example, some
pre-retail medical products are stolen as
part of a scheme to re-sell them into the
supply chain, but if the products have
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not been properly stored in the interim,
their subsequent use can seriously
injure the individual consumers who
buy and use them. Thus, the
amendment expands the scope of the
existing upward departure provision to
address such harms and to clarify that
an upward departure is appropriate in
such cases not only if serious bodily
injury or death occurred during the theft
or fraud, but also if such serious bodily
injury or death resulted from the
victim’s use of a pre-retail medical
product that had previously been
obtained by theft or fraud.
Finally, the proposed amendment
amends the Commentary to § 2B1.1 to
provide relevant definitions and make
other conforming changes.
3. Amendment: Section 2B5.3(b) is
amended by renumbering paragraph (5)
as (6); by inserting after paragraph (4)
the following:
‘‘(5) If the offense involved a
counterfeit drug, increase by 2 levels.’’;
and by inserting after paragraph (6) (as
so renumbered) the following:
‘‘(7) If the offense involved a
counterfeit military good or service the
use, malfunction, or failure of which is
likely to cause (A) the disclosure of
classified information; (B) impairment
of combat operations; or (C) other
significant harm to (i) a combat
operation, (ii) a member of the Armed
Forces, or (iii) national security,
increase by 2 levels. If the resulting
offense level is less than level 14,
increase to level 14.’’.
The Commentary to § 2B5.3 captioned
‘‘Application Notes’’ is amended in
Note 1 by inserting after the paragraph
that begins ‘‘’Commercial advantage’’
the following:
‘‘’Counterfeit drug’ has the meaning
given that term in 18 U.S.C. § 2320(f)(6).
‘‘’Counterfeit military good or service’
has the meaning given that term in 18
U.S.C. § 2320(f)(4).’’; by renumbering
Notes 3 and 4 as 4 and 5; by inserting
after Note 2 the following:
‘‘3. Application of Subsection (b)(7).—
In subsection (b)(7), ‘other significant
harm to a member of the Armed Forces’
means significant harm other than
serious bodily injury or death. In a case
in which the offense involved a
counterfeit military good or service the
use, malfunction, or failure of which is
likely to cause serious bodily injury or
death, subsection (b)(6)(A) (conscious or
reckless risk of serious bodily injury or
death) would apply.’’; and in Note 5 (as
so renumbered) by adding at the end the
following:
‘‘(D) The offense resulted in death or
serious bodily injury.’’.
The Commentary to § 2B5.3 captioned
‘‘Background’’ is amended by inserting
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after the paragraph that begins
‘‘Subsection (b)(1)’’ the following:
‘‘ Subsection (b)(5) implements the
directive to the Commission in section
717 of Public Law 112B144.’’.
Appendix A (Statutory Index) is
amended by striking the line referenced
to 21 U.S.C. § 333(b) and inserting the
following:
‘‘21 U.S.C. § 333(b)(1)–(6) 2N2.1
21 U.S.C. § 333(b)(7) 2N1.1’’.
Reason for Amendment: This
amendment responds to two recent Acts
that made changes to 18 U.S.C. § 2320
(Trafficking in counterfeit goods or
services). One Act increased penalties
for offenses involving counterfeit
military goods and services; the other
increased penalties for offenses
involving counterfeit drugs and
included a directive to the Commission.
The amendment also responds to recent
statutory changes to 21 U.S.C. § 333
(Penalties for violations of the Federal
Food, Drug, and Cosmetics Act) that
increase penalties for offenses involving
intentionally adulterated drugs.
Section 2320 and Counterfeit Military
Goods and Services
First, the amendment responds to
changes to section 2320 made by the
National Defense Authorization Act for
Fiscal Year 2012, Public Law 112–81
(enacted December 31, 2011) (the
‘‘NDAA’’). In general, section 2320
prohibits trafficking in goods or services
using a counterfeit mark, and provides
a statutory maximum term of
imprisonment of 10 years, or 20 years
for a second or subsequent offense. If
the offender knowingly or recklessly
causes or attempts to cause serious
bodily injury or death, the statutory
maximum is increased to 20 years or
any term of years or life, respectively.
Offenses under section 2320 are
referenced in Appendix A (Statutory
Index) to § 2B5.3 (Criminal Infringement
of Copyright or Trademark).
Section 818 of the NDAA amended
section 2320 to add a new subsection
(a)(3) that prohibits trafficking in
counterfeit military goods and services,
the use, malfunction, or failure of which
is likely to cause serious bodily injury
or death, the disclosure of classified
information, impairment of combat
operations, or other significant harm to
a combat operation, a member of the
Armed Forces, or national security. A
‘‘counterfeit military good or service’’ is
defined as a good or service that uses a
counterfeit mark and that (A) is falsely
identified or labeled as meeting military
specifications, or (B) is intended for use
in a military or national security
application. See 18 U.S.C. § 2320(f)(4).
An individual who commits an offense
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under subsection (a)(3) is subject to a
statutory maximum term of
imprisonment of 20 years, or 30 years
for a second or subsequent offense. See
18 U.S.C. § 2320(b)(3).
The legislative history of the NDAA
indicates that Congress amended section
2320 because of concerns about national
security and the protection of United
States servicemen and women. After
reviewing the legislative history, public
comment, testimony, and data, the
Commission determined that an offense
involving counterfeit military goods and
services that jeopardizes the safety of
United States troops and compromises
mission effectiveness warrants
increased punishment.
Specifically, the amendment
addresses offenses involving counterfeit
military goods and services by
amending § 2B5.3 to create a new
specific offense characteristic at
subsection (b)(7). Subsection (b)(7)
provides a 2-level enhancement and a
minimum offense level of 14 if the
offense involves a counterfeit military
good or service the use, malfunction, or
failure of which is likely to cause the
disclosure of classified information,
impairment of combat operations, or
other significant harm to a combat
operation, a member of the Armed
Forces, or to national security. The
Commission set the minimum offense
level at 14 so that it would be
proportionate to the minimum offense
level in the enhancement for ‘‘conscious
or reckless risk of death or serious
bodily injury’’ at subsection (b)(5)(A).
That enhancement is moved from
(b)(5)(A) to (b)(6)(A) by the amendment.
Although section 2320(a)(3) includes
offenses that are likely to cause ‘‘serious
bodily injury or death,’’ the new specific
offense characteristic does not because
the Commission determined that such
risk of harm is adequately addressed by
the existing enhancement for offenses
involving the ‘‘conscious or reckless risk
of death or serious bodily injury.’’
Consistent with that approach, the
amendment includes commentary
providing that the ‘‘other significant
harm’’ specified in subsection (b)(7)
does not include death or serious bodily
injury and that § 2B5.3(b)(6)(A) would
apply if the offense involved a
counterfeit military good or service the
use, malfunction, or failure of which is
likely to cause serious bodily injury or
death.
Section 2320 and Counterfeit Drugs
Second, the amendment responds to
changes made by section 717 of the
Food and Drug Administration Safety
and Innovation Act, Public Law 112–
144 (enacted July 9, 2012) (the
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‘‘FDASIA’’), which amended section
2320 to add a new subsection (a)(4) that
prohibits trafficking in a counterfeit
drug. A ‘‘counterfeit drug’’ is a drug, as
defined by section 201 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C.
§ 321), that uses a counterfeit mark. See
18 U.S.C. § 2320(f)(6). An individual
who commits an offense under
subsection (a)(4) is subject to the same
statutory maximum term of
imprisonment as for an offense
involving a counterfeit military good or
service—20 years, or 30 years for a
second or subsequent offense. See 18
U.S.C. 2320(b)(3).
Section 717 of the FDASIA also
contained a directive to the Commission
to ‘‘review and amend, if appropriate’’
the guidelines and policy statements
applicable to persons convicted of an
offense described in section 2320(a)(4)—
i.e., offenses involving counterfeit
drugs—‘‘in order to reflect the intent of
Congress that such penalties be
increased in comparison to those
currently provided by the guidelines
and policy statements.’’ See Public Law
112–144, § 717(b)(1). In addition,
section 717(b)(2) provides that, in
responding to the directive, the
Commission shall, among other things,
ensure that the guidelines reflect the
serious nature of section 2320(a)(4)
offenses and consider the extent to
which the guidelines account for the
potential and actual harm to the public
resulting from such offenses.
After reviewing the legislative history
of the FDASIA, public comment,
testimony, and data, the Commission
determined that offenses involving
counterfeit drugs involve a threat to
public safety and undermine the
public’s confidence in the drug supply
chain. Furthermore, unlike many other
goods covered by the infringement
guideline, offenses involving counterfeit
drugs circumvent a regulatory scheme
established to protect the health and
safety of the public. Accordingly, the
amendment responds to the directive by
adding a new specific offense
characteristic at § 2B5.3(b)(5) that
provides a 2-level enhancement if the
offense involves a counterfeit drug.
Offenses Resulting in Death or Serious
Bodily Injury
Third, the amendment amends the
Commentary to ’2B5.3 to add a new
upward departure consideration if the
offense resulted in death or serious
bodily injury. The addition of this
departure consideration recognizes the
distinction between an offense
involving the risk of death or serious
bodily injury and one in which death or
serious bodily injury actually results.
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Departures for these reasons are already
authorized in the guidelines, see
§§ 5K2.1 (Death) (Policy Statement),
5K2.2 (Physical Injury) (Policy
Statement), but the amendment is
intended to heighten awareness of the
availability of a departure in such cases.
Section 333 and Offenses Involving
Intentionally Adulterated Drugs
Finally, the amendment provides a
statutory reference for the new offense
at 21 U.S.C. 333(b)(7) created by section
716 of the FDASIA. Section 333(b)(7)
applies to any person who knowingly
and intentionally adulterates a drug
such that the drug is adulterated under
certain provisions of 21 U.S.C. § 351 and
has a reasonable probability of causing
serious adverse health consequences or
death to humans or animals. It provides
a statutory maximum term of
imprisonment of 20 years.
The amendment amends Appendix A
(Statutory Index) to reference offenses
under section 333(b)(7) to § 2N1.1
(Tampering or Attempting to Tamper
Involving Risk of Death or Bodily
Injury). The Commission concluded that
offenses under section 333(b)(7) are
similar to tampering offenses under 18
U.S.C. § 1365 (Tampering with
consumer products), which are
referenced to ’2N1.1. In addition, the
public health harms that Congress
intended to target in adulteration cases
are similar to those targeted by
violations of section 1365(a) and are
best addressed under § 2N1.1.
4. Amendment: The Commentary to
§ 2T1.1 captioned ‘‘Application Notes’’
is amended in Note 1 by inserting ‘‘Tax
Loss.—’’ at the beginning; in Note 2 by
inserting ‘‘Total Tax Loss Attributable to
the Offense.—’’ at the beginning, and by
redesignating subdivisions (a) through
(e) as (A) through (E); by inserting after
Note 2 the following:
‘‘3. Unclaimed Credits, Deductions,
and Exemptions.—In determining the
tax loss, the court should account for
the standard deduction and personal
and dependent exemptions to which the
defendant was entitled. In addition, the
court should account for any unclaimed
credit, deduction, or exemption that is
needed to ensure a reasonable estimate
of the tax loss, but only to the extent
that (A) the credit, deduction, or
exemption was related to the tax offense
and could have been claimed at the time
the tax offense was committed; (B) the
credit, deduction, or exemption is
reasonably and practicably
ascertainable; and (C) the defendant
presents information to support the
credit, deduction, or exemption
sufficiently in advance of sentencing to
provide an adequate opportunity to
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evaluate whether it has sufficient
indicia of reliability to support its
probable accuracy (see § 6A1.3
(Resolution of Disputed Factors) (Policy
Statement)).
However, the court shall not account
for payments to third parties made in a
manner that encouraged or facilitated a
separate violation of law (e.g., ‘under
the table’ payments to employees or
expenses incurred to obstruct justice).
The burden is on the defendant to
establish any such credit, deduction, or
exemption by a preponderance of the
evidence. See § 6A1.3, comment.’’; by
striking ‘‘3. ‘Criminal activity’ means’’
and inserting the following:
‘‘4. Application of Subsection (b)(1)
(Criminal Activity).—‘Criminal activity’
means’’; by striking ‘‘4. Sophisticated
Means Enhancement.C’’ and inserting
the following:
‘‘5. Application of Subsection (b)(2)
(Sophisticated Means).—’’; by striking
‘‘5. A ‘credit claimed’’ and all that
follows through the end of Note 6 and
inserting the following:
‘‘6. Other Definitions.—For purposes
of this section:
A ‘credit claimed against tax’ is an
item that reduces the amount of tax
directly. In contrast, a ‘deduction’ is an
item that reduces the amount of taxable
income. ‘Gross income’ has the same
meaning as it has in 26 U.S.C. § 61 and
26 CFR § 1.61.’’; and in Note 7 by
inserting ‘‘Aggregation of Individual
and Corporate Tax Loss.—’’ at the
beginning.
Reason for Amendment: This
amendment responds to a circuit
conflict regarding whether a sentencing
court, in calculating tax loss as defined
in § 2T1.1 (Tax Evasion; Willful Failure
to File Return, Supply Information, or
Pay Tax; Fraudulent or False Returns,
Statements, or Other Documents), may
consider previously unclaimed credits,
deductions, and exemptions that the
defendant legitimately could have
claimed if he or she had filed an
accurate tax return.
The Tenth and Second Circuits have
held that a sentencing court may give
the defendant credit for a legitimate but
unclaimed deduction. These circuit
courts generally reason that, while a
district court need not speculate about
unclaimed deductions if the defendant
offers weak support, nothing in the
guidelines prohibits a sentencing court
from considering evidence of unclaimed
deductions where a defendant offers
convincing proof. See United States v.
Hoskins, 654 F.3d 1086, 1094 (10th Cir.
2011) (‘‘[W]here defendant offers
convincing proof—where the court’s
exercise is neither nebulous nor
complex—nothing in the Guidelines
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prohibits a sentencing court from
considering evidence of unclaimed
deductions in analyzing a defendant’s
estimate of the tax loss suffered by the
government.’’); United States v.
Martinez-Rios, 143 F.3d 662, 671 (2d
Cir. 1998) (holding that ‘‘the sentencing
court need not base its tax loss
calculation on gross unreported income
if it can make a ’more accurate
determination’ of the intended loss and
that determination of the tax loss
involves giving the defendant the
benefit of legitimate but unclaimed
deductions’’); United States v. Gordon,
291 F.3d 181, 187 (2d Cir. 2002)
(applying Martinez-Rios, the court held
that the district court erred when it
refused to consider potential unclaimed
deductions in its sentencing analysis).
Six other circuit courts—the Fourth,
Fifth, Seventh, Eighth, Ninth, and
Eleventh—have reached the opposite
conclusion, directly or indirectly
holding that a court may not consider
unclaimed deductions to reduce the tax
loss. These circuit courts generally
reason that the ‘‘object of the
[defendant’s] offense’’ is established by
the amount stated on the fraudulent
return, and that courts should not be
required to reconstruct the defendant’s
return based on speculation regarding
the many hypothetical ways the
defendant could have completed the
return. See United States v. Delfino, 510
F.3d 468, 473 (4th Cir. 2007) (‘‘The law
simply does not require the district
court to engage in [speculation as to
what deductions would have been
allowed], nor does it entitle the Delfinos
to the benefit of deductions they might
have claimed now that they stand
convicted of tax evasion.’’); United
States v. Phelps, 478 F.3d 680, 682 (5th
Cir. 2007) (holding that the defendant
could not reduce tax loss by taking a
social security tax deduction that he did
not claim on the false return); United
States v. Chavin, 316 F.3d 666, 677 (7th
Cir. 2002) (‘‘Here, the object of [the
defendant]’s offense was the amount by
which he underreported and
fraudulently stated his tax liability on
his return; reference to other unrelated
mistakes on the return such as
unclaimed deductions tells us nothing
about the amount of loss to the
government that his scheme intended to
create.’’); United States v. Psihos, 683
F.3d 777, 781–82 (7th Cir. 2012)
(following Chavin in disallowing
consideration of unclaimed deductions);
United States v. Sherman, 372 F.App’x
668, 676–77 (8th Cir. 2010); United
States v. Blevins, 542 F.3d 1200, 1203
(8th Cir. 2008) (declining to decide
‘‘whether an unclaimed tax benefit may
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ever offset tax loss,’’ but finding the
district court properly declined to
reduce tax loss based on taxpayers’
unclaimed deductions); United States v.
Yip, 592 F.3d 1035, 1041 (9th Cir. 2010)
(‘‘We hold that § 2T1.1 does not entitle
a defendant to reduce the tax loss
charged to him by the amount of
potentially legitimate, but unclaimed,
deductions even if those deductions are
related to the offense.’’); United States v.
Clarke, 562 F.3d 1158, 1165 (11th Cir.
2009) (holding that the defendant was
not entitled to a tax loss calculation
based on a filing status other than the
one he actually used; ‘‘[t]he district
court did not err in computing the tax
loss based on the fraudulent return
Clarke actually filed, and not on the tax
return Clarke could have filed but did
not.’’).
The amendment resolves the conflict
by amending the Commentary to § 2T1.1
to establish a new application note
regarding the consideration of
unclaimed credits, deductions, or
exemptions in calculating a defendant’s
tax loss. This amendment reflects the
Commission’s view that consideration
of legitimate unclaimed credits,
deductions, or exemptions, subject to
certain limitations and exclusions, is
most consistent with existing provisions
regarding the calculation of tax loss in
§ 2T1.1. See, e.g., USSG § 2T1.1,
comment. (n.1) (‘‘the guidelines
contemplate that the court will simply
make a reasonable estimate based on the
available facts’’); USSG § 2T1.1,
comment. (backg’d.) (‘‘a greater tax loss
is obviously more harmful to the
treasury and more serious than a smaller
one with otherwise similar
characteristics’’); USSG § 2T1.1,
comment. (n.1) (allowing a sentencing
court to go beyond the presumptions set
forth in the guideline if ‘‘the
government or defense provides
sufficient information for a more
accurate assessment of the tax loss,’’ and
providing ‘‘the court should use any
method of determining the tax loss that
appears appropriate to reasonably
calculate the loss that would have
resulted had the offense been
successfully completed’’).
The new application note first
provides that courts should always
account for the standard deduction and
personal and dependent exemptions to
which the defendant was entitled. The
Commission received public comment
and testimony that such deductions and
exemptions are commonly considered
and accepted by the government during
the course of its investigation and
during the course of plea negotiations.
Consistent with this standard practice,
the Commission determined that
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accounting for these generally
undisputed and readily verifiable
deductions and exemptions where they
are not previously claimed (most
commonly where the offense involves a
failure to file a tax return) is
appropriate.
The new application note further
provides that courts should also account
for any other previously unclaimed
credit, deduction, or exemption that is
needed to ensure a reasonable estimate
of the tax loss, but only to the extent
certain conditions are met. First, the
credit, deduction, or exemption must be
one that was related to the tax offense
and could have been claimed at the time
the tax offense was committed. This
condition reflects the Commission’s
determination that a defendant should
not be permitted to invoke unforeseen
or after-the-fact changes or
characterizations—such as offsetting
losses that occur before or after the
relevant tax year or substituting a more
advantageous depreciation method or
filing status—to lower the tax loss. To
permit a defendant to optimize his
return in this manner would unjustly
reward defendants, and could require
unjustifiable speculation and
complexity at the sentencing hearing.
Second, the otherwise unclaimed
credit, deduction, or exemption must be
reasonably and practicably
ascertainable. Consistent with the
instruction in Application Note 1, this
condition reaffirms the Commission’s
position that sentencing courts need
only make a reasonable estimate of tax
loss. In this regard, the Commission
recognized that consideration of some
unclaimed credits, deductions, or
exemptions could require sentencing
courts to make unnecessarily complex
tax determinations, and therefore
concluded that limiting consideration of
unclaimed credits, deductions, or
exemptions to those that are reasonably
and practicably ascertainable is
appropriate.
Third, the defendant must present
information to support the credit,
deduction, or exemption sufficiently in
advance of sentencing to provide an
adequate opportunity to evaluate
whether it has sufficient indicia of
reliability to support its probable
accuracy. Consistent with the principles
set forth in § 6A1.3 (Resolution of
Disputed Factors) (Policy Statement),
this condition ensures that the parties
have an adequate opportunity to present
information relevant to the court’s
consideration of any unclaimed credits,
deductions, or exemptions raised at
sentencing.
In addition, the new application note
provides that certain categories of
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credits, deductions, or exemptions shall
not be considered by the court in any
case. In particular, ‘‘the court shall not
account for payments to third parties
made in a manner that encouraged or
facilitated a separate violation of law
(e.g., ‘under the table’ payments to
employees or expenses incurred to
obstruct justice).’’ The Commission
determined that payments made in this
manner result in additional harm to the
tax system and the legal system as a
whole. Therefore, to use them to reduce
the tax loss would unjustifiably benefit
the defendant and would result in a tax
loss figure that understates the
seriousness of the offense and the
culpability of the defendant.
Finally, the application note makes
clear that the burden is on the defendant
to establish any credit, deduction, or
exemption permitted under this new
application note by a preponderance of
the evidence, which is also consistent
with the commentary in § 6A1.3.
5. Amendment: The Commentary to
§ 3E1.1 captioned ‘‘Application Notes’’
is amended in Note 6 by adding at the
end of the paragraph that begins
‘‘Because the Government’’ the
following as the last sentence: ‘‘The
government should not withhold such a
motion based on interests not identified
in § 3E1.1, such as whether the
defendant agrees to waive his or her
right to appeal.’’; and by adding after the
paragraph that begins ‘‘Because the
Government’’ the following new
paragraph:
‘‘If the government files such a
motion, and the court in deciding
whether to grant the motion also
determines that the defendant has
assisted authorities in the investigation
or prosecution of his own misconduct
by timely notifying authorities of his
intention to enter a plea of guilty,
thereby permitting the government to
avoid preparing for trial and permitting
the government and the court to allocate
their resources efficiently, the court
should grant the motion.’’.
The Commentary to § 3E1.1 captioned
‘‘Background’’ is amended in the
paragraph that begins ‘‘Section 401(g)’’
by striking ‘‘the last paragraph’’ and
inserting ‘‘the first sentence of the
second paragraph’’.
Reason for Amendment: This
amendment addresses two circuit
conflicts involving the guideline for
acceptance of responsibility, § 3E1.1
(Acceptance of Responsibility). A
defendant who clearly demonstrates
acceptance of responsibility for his
offense receives a 2-level reduction
under subsection (a) of § 3E1.1. The two
circuit conflicts both involve the
circumstances under which the
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defendant is eligible for a third level of
reduction under subsection (b) of
§ 3E1.1. Subsection (b) provides:
(b) If the defendant qualifies for a
decrease under subsection (a), the
offense level determined prior to the
operation of subsection (a) is level 16 or
greater, and upon motion of the
government stating that the defendant
has assisted authorities in the
investigation or prosecution of his own
misconduct by timely notifying
authorities of his intention to enter a
plea of guilty, thereby permitting the
government to avoid preparing for trial
and permitting the government and the
court to allocate their resources
efficiently, decrease the offense level by
1 additional level.
The first circuit conflict involves the
government’s discretion under
subsection (b) and, in particular,
whether the government may withhold
a motion based on an interest not
identified in § 3E1.1, such as the
defendant’s refusal to waive his right to
appeal. The second conflict involves the
court’s discretion under subsection (b)
and, in particular, whether the court
may decline to apply the third level of
reduction when the government has
moved for it.
These circuit conflicts are unusual in
that they involve guideline and
commentary provisions that Congress
directly amended. See section 401(g) of
the Prosecutorial Remedies and Other
Tools to end the Exploitation of
Children Today Act of 2003, Public Law
108–21 (the ‘‘PROTECT Act’’); see also
USSG App. C, Amendment 649
(effective April 30, 2003) (implementing
amendments to the guidelines made
directly by the PROTECT Act). They
also implicate a congressional directive
to the Commission not to ‘‘alter or
repeal’’ the congressional amendments.
See section 401(j)(4) of the PROTECT
Act. Accordingly, in considering these
conflicts, the Commission has not only
reviewed public comment, sentencing
data, case law, and the other types of
information it ordinarily considers, but
has also studied the operation of § 3E1.1
before the PROTECT Act, the
congressional action to amend § 3E1.1,
and the legislative history of that
congressional action.
The Government’s Discretion to
Withhold the Motion
The first circuit conflict involves the
government’s discretion under
subsection (b) and, in particular,
whether the government may withhold
a motion based on an interest not
identified in § 3E1.1, such as the
defendant’s refusal to waive his right to
appeal.
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Several circuits have held that a
defendant’s refusal to sign an appellate
waiver is a legitimate reason for the
government to withhold a § 3E1.1(b)
motion. See, e.g., United States v.
Johnson, 581 F.3d 994, 1002 (9th Cir.
2009) (holding that ‘‘allocation and
expenditure of prosecutorial resources
for the purposes of defending an appeal
is a rational basis’’ for such refusal);
United States v. Deberry, 576 F.3d 708,
711 (7th Cir. 2009) (holding that
requiring the defendant to sign an
appeal waiver would avoid ‘‘expense
and uncertainty’’ on appeal); United
States v. Newson, 515 F.3d 374, 378 (5th
Cir. 2008) (holding that the
government’s interests under § 3E1.1
encompass not only the government’s
time and effort at prejudgment stage but
also at post-judgment proceedings).
In contrast, the Fourth Circuit has
held that a defendant’s refusal to sign an
appellate waiver is not a legitimate
reason for the government to withhold
a § 3E1.1(b) motion. See United States v.
Divens, 650 F.3d 343, 348 (4th Cir.
2011) (stating that ‘‘the text of § 3E1.1(b)
reveals a concern for the efficient
allocation of trial resources, not
appellate resources’’ [emphasis in
original]); see also United States v.
Davis, No. 12–3552, slip op. at 5, __
F.3d __ (7th Cir., April 9, 2013) (Rovner,
J., concurring) (‘‘insisting that [the
defendant] waive his right to appeal
before he may receive the maximum
credit under the Guidelines for
accepting responsibility serves none of
the interests identified in section
3E1.1’’). The majority in Davis called for
the conflict to be resolved, stating:
‘‘Resolution of this conflict is the
province of the Supreme Court or the
Sentencing Commission.’’ Davis, slip
op. at 3, __ F.3d at __ (per curiam). The
Second Circuit, stating that the Fourth
Circuit’s reasoning in Divens applies
‘‘with equal force’’ to the defendant’s
request for an evidentiary hearing on
sentencing issues, held that the
government may not withhold a § 3E1.1
motion based upon such a request. See
United States v. Lee, 653 F.3d 170, 175
(2d Cir. 2011).
The PROTECT Act added
Commentary to § 3E1.1 stating that
‘‘[b]ecause the Government is in the best
position to determine whether the
defendant has assisted authorities in a
manner that avoids preparing for trial,
an adjustment under subsection (b) may
only be granted upon a formal motion
by the Government at the time of
sentencing.’’ See § 3E1.1, comment.
(n.6). The PROTECT Act also amended
§ 3E1.1(b) to provide that the
government motion state, among other
things, that the defendant’s notification
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of his intention to enter a plea of guilty
permitted ‘‘the government to avoid
preparing for trial and . . . the
government and the court to allocate
their resources efficiently . . .’’.
In its study of the PROTECT Act, the
Commission could discern no
congressional intent to allow decisions
under § 3E1.1 to be based on interests
not identified in § 3E1.1. Furthermore,
consistent with Divens and the
concurrence in Davis, the Commission
determined that the defendant’s waiver
of his or her right to appeal is an
example of an interest not identified in
§ 3E1.1. Accordingly, this amendment
adds an additional sentence to the
Commentary stating that ‘‘[t]he
government should not withhold such a
motion based on interests not identified
in § 3E1.1, such as whether the
defendant agrees to waive his or her
right to appeal.’’
The Court’s Discretion to Deny the
Motion
The second conflict involves the
court’s discretion under subsection (b)
and, in particular, whether the court
may decline to apply the third level of
reduction when the government has
moved for it.
The Seventh Circuit has held that if
the government makes the motion (and
the other two requirements of
subsection (b) are met, i.e., the
defendant qualifies for the 2-level
decrease and the offense level is level 16
or greater), the third level of reduction
must be awarded. See United States v.
Mount, 675 F.3d 1052 (7th Cir. 2012).
In contrast, the Fifth Circuit has held
that the district court retains discretion
to deny the motion. See United States v.
Williamson, 598 F.3d 227, 230 (5th Cir.
2010). In Williamson, the defendant was
convicted after jury trial but
successfully appealed. After remand, he
pled guilty to a lesser offense. The
government moved for the third level of
reduction, but the court declined to
grant it because ‘‘regardless of however
much additional trial preparation the
government avoided through
Williamson’s guilty plea following
remand, the preparation for the initial
trial and the use of the court’s resources
for that trial meant that the § 3E1.1(b)
benefits to the government and the court
were not obtained’’. Id. at 231. The Fifth
Circuit affirmed, holding that the
decision whether to grant the third level
of reduction ‘‘is the district court’s—not
the government’s—even though the
court may only do so on the
government’s motion’’. Id. at 230.
This amendment amends the
Commentary to § 3E1.1 by adding the
following statement: ‘‘If the government
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files such a motion, and the court in
deciding whether to grant the motion
also determines that the defendant has
assisted authorities in the investigation
or prosecution of his own misconduct
by timely notifying authorities of his
intention to enter a plea of guilty,
thereby permitting the government to
avoid preparing for trial and permitting
the government and the court to allocate
their resources efficiently, the court
should grant the motion.’’
In its study of the PROTECT Act, the
Commission could discern no
congressional intent to take away from
the court its responsibility under § 3E1.1
to make its own determination of
whether the conditions were met. In
particular, both the language added to
the Commentary by the PROTECT Act
and the legislative history of the
PROTECT Act speak in terms of
allowing the court discretion to ‘‘grant’’
the third level of reduction. See USSG
§ 3E1.1, comment. (n.6) (stating that the
third level of reduction ‘‘may only be
granted upon a formal motion by the
Government’’); H.R. Rep. No. 108–66, at
59 (2003) (Conf. Rep.) (stating that the
PROTECT Act amendment would ‘‘only
allow courts to grant an additional third
point reduction for ‘acceptance of
responsibility’ upon motion of the
government.’’). In addition, the
Commission observes that one of the
considerations in § 3E1.1(b) is whether
the defendant’s actions permitted the
court to allocate its resources efficiently,
and the court is in the best position to
make that determination. Accordingly,
consistent with congressional intent,
this amendment recognizes that the
court continues to have discretion to
decide whether to grant the third level
of reduction.
Finally, and as mentioned above, the
Commission in its study of the
PROTECT Act could discern no
congressional intent to allow decisions
under § 3E1.1 to be based on interests
not identified in § 3E1.1. For that
reason, this amendment indicates that,
if the government has filed the motion
and the court also determines that the
circumstances identified in § 3E1.1 are
present, the court should grant the
motion.
6. Amendment: The Commentary to
§ 5G1.3 captioned ‘‘Background’’ is
amended by striking ‘‘In a case in
which’’ and all that follows through
‘‘Exercise of that authority,’’ and
inserting ‘‘Federal courts generally ‘have
discretion to select whether the
sentences they impose will run
concurrently or consecutively with
respect to other sentences that they
impose, or that have been imposed in
other proceedings, including state
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proceedings.’ See Setser v. United
States, 132 S. Ct. 1463, 1468 (2012); 18
U.S.C. § 3584(a). Federal courts also
generally have discretion to order that
the sentences they impose will run
concurrently with or consecutively to
other state sentences that are anticipated
but not yet imposed. See Setser, 132 S.
Ct. at 1468. Exercise of that discretion’’.
Reason for Amendment: This
amendment responds to a recent
Supreme Court decision that federal
courts have discretion to order that the
sentence run consecutively to (or
concurrently with) an anticipated, but
not yet imposed, state sentence. See
Setser v. United States, 132 S. Ct. 1463,
1468 (2012).
The discretion recognized in Setser
for anticipated state sentences is similar
to the discretion that federal courts have
under 18 U.S.C. § 3584 for previously
imposed sentences. Under section 3584,
a federal court imposing a sentence
generally has discretion to order that the
sentence run consecutively to (or, in the
alternative, concurrently with) a term of
imprisonment previously imposed but
not yet discharged. See 18 U.S.C.
§ 3584(a). Section 5G1.3 (Imposition of
a Sentence on a Defendant Subject to an
Undischarged Term of Imprisonment)
provides guidance to the court in
determining whether, and how, to use
the discretion under section 3584, i.e.,
whether the sentence should run
consecutively to (or, in the alternative,
concurrently with) the prior
undischarged term of imprisonment.
The amendment amends the
background commentary to § 5G1.3 to
include a statement that, in addition to
the discretion provided by section 3584,
federal courts also generally have
discretion under Setser to order that the
sentences they impose will run
consecutively to or concurrently with
other state sentences that are anticipated
but not yet imposed. Determining
whether, and how, to use this discretion
will depend on the adequacy of the
information available. See Setser, 132
S.Ct. at 1471 n.6 (‘‘Of course, a district
court should exercise the power to
impose anticipatory consecutive (or
concurrent) sentences intelligently. In
some situations, a district court may
have inadequate information and may
forbear, but in other situations, that will
not be the case.’’). Adding this statement
to the guideline that applies to the
court’s discretion under section 3584 is
intended to provide heightened
awareness of the court’s similar
discretion under Setser.
7. Amendment: The Commentary to
§ 2B1.1 captioned ‘‘Application Notes’’
is amended in Note 15 (as renumbered
by Amendment 2) by striking ‘‘1a(5)’’
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both places it appears and inserting
‘‘1a(11)’’; by striking ‘‘1a(6)’’ both places
it appears and inserting ‘‘1a(12)’’; by
striking ‘‘1a(20)’’ both places it appears
and inserting ‘‘1a(28)’’; and by striking
‘‘1a(23)’’ both places it appears and
inserting ‘‘1a(31)’’.
Section 2B2.3(b) is amended by
striking paragraph (1) and inserting the
following:
‘‘(1) (Apply the greater) If—
(A) the trespass occurred (i) at a
secure government facility; (ii) at a
nuclear energy facility; (iii) on a vessel
or aircraft of the United States; (iv) in a
secure area of an airport or a seaport; (v)
at a residence; (vi) at Arlington National
Cemetery or a cemetery under the
control of the National Cemetery
Administration; (vii) at any restricted
building or grounds; or (viii) on a
computer system used (I) to maintain or
operate a critical infrastructure; or (II)
by or for a government entity in
furtherance of the administration of
justice, national defense, or national
security, increase by 2 levels; or
(B) the trespass occurred at the White
House or its grounds, or the Vice
President’s official residence or its
grounds, increase by 4 levels.’’.
The Commentary to § 2B2.3 captioned
‘‘Application Notes’’ is amended in
Note 1 by inserting after the paragraph
that begins ‘‘ ‘Protected computer’
means’’ the following:
‘‘ ‘Restricted building or grounds’ has
the meaning given that term in 18 U.S.C.
§ 1752.’’; and in Note 2 by inserting
‘‘Application of Subsection (b)(3).—’’ at
the beginning.
The Notes to the Drug Quantity Table
in § 2D1.1(c) are amended in each of
Notes (H) and (I) by striking
‘‘1308.11(d)(30)’’ and inserting
‘‘1308.11(d)(31)’’.
The Commentary to § 2J1.2 captioned
‘‘Application Notes’’ is amended in
Note 2(A) by striking ‘‘Chapter Three,
Part C’’ in the heading and inserting
‘‘§ 3C1.1’’; and by striking ‘‘Chapter
Three, Part C (Obstruction and Related
Adjustments)’’ and inserting ‘‘§ 3C1.1
(Obstructing or Impeding the
Administration of Justice)’’.
The Commentary to § 2J1.3 captioned
‘‘Application Notes’’ is amended in
Note 2 by striking ‘‘Chapter Three, Part
C (Obstruction and Related
Adjustments)’’ and inserting ‘‘§ 3C1.1
(Obstructing or Impeding the
Administration of Justice)’’; and in Note
3 by striking ‘‘Chapter Three, Part C
(Obstruction and Related Adjustments)’’
and inserting ‘‘§ 3C1.1’’.
The Commentary to § 2J1.6 captioned
‘‘Application Notes’’ is amended in
Note 2 by striking ‘‘Chapter Three, Part
C (Obstruction and Related
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26433
Adjustments)’’ and inserting ‘‘§ 3C1.1
(Obstructing or Impeding the
Administration of Justice)’’.
The Commentary to § 2J1.9 captioned
‘‘Application Notes’’ is amended in
Note 1 by striking ‘‘Chapter Three, Part
C (Obstruction and Related
Adjustments)’’ and inserting ‘‘§ 3C1.1
(Obstructing or Impeding the
Administration of Justice)’’; and in Note
2 by striking ‘‘Chapter Three, Part C
(Obstruction and Related Adjustments)’’
and inserting ‘‘§ 3C1.1’’.
The Commentary to § 4A1.1 captioned
‘‘Application Notes’’ is amended in each
of Notes 2 and 3 by striking ‘‘court
martial’’ and inserting ‘‘court-martial’’.
Section 4A1.2(g) is amended by
striking ‘‘court martial’’ both places it
appears and inserting ‘‘court-martial’’.
Appendix A (Statutory Index) is
amended by inserting after the line
referenced to 18 U.S.C. § 38 the
following:
‘‘18 U.S.C. § 39A 2A5.2’’; in the line
referenced to 18 U.S.C. § 554 by
inserting ‘‘2M5.1,’’ after ‘‘2B1.5,’’; by
inserting after the line referenced to 18
U.S.C. § 1513 the following:
‘‘18 U.S.C. § 1514(c) 2J1.2’’; by
inserting after the line referenced to 18
U.S.C. § 1751(e) the following:
‘‘18 U.S.C. § 1752 2A2.4, 2B2.3’’; and
by inserting after the line referenced to
19 U.S.C. § 1586(e) the following:
‘‘19 U.S.C. § 1590(d)(1) 2T3.1
19 U.S.C. § 1590(d)(2) 2D1.1’’.
Reason for Amendment: This
amendment responds to recently
enacted legislation and miscellaneous
and technical guideline issues.
Aiming a Laser Pointer at an Aircraft
First, the amendment responds to
Section 311 of the FAA Modernization
and Reform Act of 2012, Public Law
112–95 (enacted February 14, 2012),
which established a new criminal
offense at 18 U.S.C. 39A (Aiming a laser
pointer at an aircraft). The offense
applies to whoever knowingly aims the
beam of a laser pointer at an aircraft in
the special aircraft jurisdiction of the
United States or at the flight path of
such an aircraft. The statutory
maximum term of imprisonment is five
years.
The amendment amends Appendix A
(Statutory Index) to reference section
39A offenses to § 2A5.2 (Interference
with Flight Crew Member or Flight
Attendant; Interference with Dispatch,
Navigation, Operation, or Maintenance
of Mass Transportation Vehicle).
Section 2A5.2 is the most analogous
guideline because the offense involves
interference with an aircraft in flight.
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Restraining the Harassment of a Victim
or Witness
Second, the amendment responds to
section 3(a) of the Child Protection Act
of 2012, Public Law 112–206 (enacted
December 7, 2012), which established a
new offense at 18 U.S.C. 1514(c) that
makes it a criminal offense to knowingly
and intentionally violate or attempt to
violate an order issued under section
1514 (Civil action to restrain harassment
of a victim or witness). The new offense
has a statutory maximum term of
imprisonment of five years.
The amendment amends Appendix A
(Statutory Index) to reference section
1514(c) offenses to § 2J1.2 (Obstruction
of Justice). Section 2J1.2 is the most
analogous guideline because the offense
involves interference with judicial
proceedings.
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Restricted Buildings and Grounds
Third, the amendment responds to the
Federal Restricted Buildings and
Grounds Improvement Act of 2011,
Public Law 112–98 (enacted March 8,
2012), which amended the criminal
offense at 18 U.S.C. § 1752 (Restricted
building or grounds). As so amended,
the statute defines ‘‘restricted buildings
or grounds’’ to mean any restricted area
(A) of the White House or its grounds,
or the Vice President’s official residence
or its grounds; (B) of a building or
grounds where the President or other
person protected by the United States
Secret Service is or will be temporarily
visiting; or (C) of a building or grounds
restricted in conjunction with an event
designated as a special event of national
significance. The statute makes it a
crime to enter or remain; to impede or
disrupt the orderly conduct of business
or official functions; to obstruct or
impede ingress or egress; or to engage in
any physical violence against any
person or property. The Act did not
change the statutory maximum term of
imprisonment, which is ten years if the
person used or carried a deadly or
dangerous weapon or firearm or if the
offense results in significant bodily
injury, and one year in any other case.
The amendment amends Appendix A
(Statutory Index) to reference section
1752 offenses to § 2A2.4 (Obstructing or
Impeding Officers) and § 2B2.3
(Trespass). These guidelines are most
analogous because the elements of
offenses under section 1752 involve
either trespass at certain locations (i.e.,
locations permanently or temporarily
protected by the Secret Service) or
interference with official business at
such locations, or both.
The amendment also amends
§ 2B2.3(b)(1) to ensure that a trespass
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under section 1752 provides a 4-level
enhancement if the trespass occurred at
the White House or the Vice President’s
official residence, or a 2-level
enhancement if the trespass occurred at
any other location permanently or
temporarily protected by the Secret
Service. Section 2B2.3(b)(1) provides a
2-level enhancement if the trespass
occurred at locations that involve a
significant federal interest, such as
nuclear facilities, airports, and seaports.
A trespass at a location protected by the
Secret Service is no less serious than a
trespass at other locations that involve
a significant federal interest and
warrants an equivalent enhancement of
2 levels. Section 2B2.3(b)(1) also
provides a 2-level enhancement if the
trespass occurred at a residence. A
trespass at the residence of the President
or the Vice President is more serious
and poses a greater risk of harm than a
trespass at an ordinary residence and
warrants an enhancement of 4 levels.
Aviation Smuggling
Fourth, the amendment responds to
the Ultralight Aircraft Smuggling
Prevention Act of 2012, Public Law
112–93 (enacted February 10, 2012),
which amended the criminal offense at
19 U.S.C. § 1590 (Aviation smuggling) to
clarify that the term ‘‘aircraft’’ includes
ultralight aircraft and to cover attempts
and conspiracies. Section 1590 makes it
unlawful for the pilot of an aircraft to
transport merchandise, or for any
individual on board any aircraft to
possess merchandise, knowing that the
merchandise will be introduced into the
United States contrary to law. It is also
unlawful for a person to transfer
merchandise between an aircraft and a
vessel on the high seas or in the customs
waters of the United States unlawfully.
The Act did not change the statutory
maximum terms of imprisonment,
which are 20 years if any of the
merchandise involved was a controlled
substance, see § 1590(d)(2), and five
years otherwise, see § 1590(d)(1). The
amendment amends Appendix A
(Statutory Index) to reference offenses
under section 1590(d)(1) to § 2T3.1
(Evading Import Duties or Restrictions
(Smuggling); Receiving or Trafficking in
Smuggled Property). In such cases,
§ 2T3.1 is the most analogous guideline
because the offense involves smuggling.
The amendment also amends Appendix
A (Statutory Index) to reference offenses
under section 1590(d)(2) to § 2D1.1
(Unlawful Manufacturing, Importing,
Exporting, or Trafficking (Including
Possession with Intent to Commit These
Offenses); Attempt or Conspiracy). In
such cases, § 2D1.1 is the most
analogous guideline because controlled
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substances are involved in these
offenses.
Interaction Between Offense Guidelines
in Chapter Two, Part J, and Certain
Adjustments in Chapter Three, Part C
Fifth, the amendment responds to an
application issue that may arise in cases
in which the defendant is sentenced
under an offense guideline in Chapter
Two, Part J (Offenses Involving the
Administration of Justice) and the
defendant may also be subject to an
adjustment under Chapter Three, Part C
(Obstruction and Related Adjustments).
Specifically, there are application notes
in four Chapter Two, Part J guidelines
that, it has been argued, preclude the
court from applying adjustments in
Chapter Three, Part C. See, e.g., United
States v. Duong, 665 F.3d 364 (1st Cir.
2012) (observing that, ‘‘according to the
literal terms’’ of the application notes,
an adjustment under Chapter Three,
Part C ‘‘ ‘does not apply’ ’’, but
‘‘reject[ing] that premise’’).
The amendment amends the relevant
application notes in Chapter Two, Part
J (see §§ 2J1.2, comment. (n.2(A)); 2J1.3,
comment. (n.2); 2J1.6, comment. (n.2);
2J1.9, comment. (n.1)) to clarify the
Commission’s intent that they restrict
the court from applying § 3C1.1
(Obstructing or Impeding the
Administration of Justice) but do not
restrict the court from applying
§§ 3C1.2, 3C1.3, and 3C1.4. These
changes resolve the application issue
consistent with Duong and promote
clarity and consistency in the
application of these adjustments.
Export Offenses Under 18 U.S.C. § 554
Sixth, the amendment broadens the
range of guidelines to which export
offenses under 18 U.S.C. § 554
(Smuggling goods from the United
States) are referenced. Section 554
makes it unlawful to export or send
from the United States (or attempt to do
so) any merchandise, article, or object
contrary to any law or regulation of the
United States. It also makes it unlawful
to receive, conceal, buy, sell, or in any
manner facilitate the transportation,
concealment, or sale of such
merchandise, article, or object, prior to
exportation, knowing the same to be
intended for exportation contrary to any
law or regulation of the United States.
Offenses under section 554 have a
statutory maximum term of
imprisonment of ten years, and they are
referenced in Appendix A (Statutory
Index) to three guidelines: §§ 2B1.5
(Theft of, Damage to, or Destruction of,
Cultural Heritage Resources or
Paleontological Resources; Unlawful
Sale, Purchase, Exchange,
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Transportation, or Receipt of Cultural
Heritage Resources or Paleontological
Resources), 2M5.2 (Exportation of Arms,
Munitions, or Military Equipment or
Services Without Required Validated
Export License), and 2Q2.1 (Offenses
Involving Fish, Wildlife, and Plants).
The amendment amends Appendix A
(Statutory Index) to add § 2M5.1
(Evasion of Export Controls; Financial
Transactions with Countries Supporting
International Terrorism) to the list of
guidelines to which offenses under
section 554 are referenced. Not all
offenses under section 554 involve
munitions, cultural resources, or
wildlife, so a reference to an additional
guideline is warranted. For example, a
section 554 offense may be based on the
export of ordinary commercial goods in
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violation of economic sanctions or on
the export of ‘‘dual-use’’ goods (i.e.,
goods that have both commercial and
military applications). For such cases,
the additional reference to § 2M5.1
promotes clarity and consistency in
guideline application, and the penalty
structure of § 2M5.1 provides
appropriate distinctions between
offenses that violate national security
controls and offenses that do not.
Technical and Stylistic Changes
Finally, the amendment makes certain
technical and stylistic changes to the
Guidelines Manual. First, it amends the
Commentary to § 2B1.1 (Theft, Property
Destruction, and Fraud) to provide
updated references to the definitions
contained in 7 U.S.C. 1a, which were
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26435
renumbered by Public Law 111B203
(enacted July 21, 2010). Second, it
amends the Notes to the Drug Quantity
Table in § 2D1.1 (Unlawful
Manufacturing, Importing, Exporting, or
Trafficking (Including Possession with
Intent to Commit These Offenses);
Attempt or Conspiracy) to provide
updated references to the definition of
tetrahydrocannabinols contained in 21
CFR 1308.11(d), which were
renumbered by 75 FR 79296 (December
20, 2010). Third, it makes several
stylistic revisions in the Guidelines
Manual to change ‘‘court martial’’ to
‘‘court-martial’’. The changes are not
substantive.
[FR Doc. 2013–10678 Filed 5–3–13; 8:45 am]
BILLING CODE 2210–40–P
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]]>Agencies
[Federal Register Volume 78, Number 87 (Monday, May 6, 2013)]
[Notices]
[Pages 26425-26435]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-10678]
=======================================================================
-----------------------------------------------------------------------
UNITED STATES SENTENCING COMMISSION
Sentencing Guidelines for United States Courts
AGENCY: United States Sentencing Commission.
ACTION: Notice of submission to Congress of amendments to the
sentencing guidelines effective November 1, 2013.
-----------------------------------------------------------------------
SUMMARY: Pursuant to its authority under 28 U.S.C. 994(p), the
Commission has promulgated amendments to the sentencing guidelines,
policy statements, commentary, and statutory index. This notice sets
forth the amendments and the reason for each amendment.
DATES: The Commission has specified an effective date of November 1,
2013, for the amendments set forth in this notice.
FOR FURTHER INFORMATION CONTACT: Jeanne Doherty, Public Affairs
Officer, 202-502-4502. The amendments set forth in this notice also may
be accessed through the Commission's Web site at www.ussc.gov.
SUPPLEMENTARY INFORMATION: The United States Sentencing Commission is
an independent agency in the judicial branch of the United States
Government. The Commission promulgates sentencing guidelines and policy
statements for federal sentencing courts pursuant to 28 U.S.C. 994(a).
The Commission also periodically reviews and revises previously
promulgated guidelines pursuant to 28 U.S.C. 994(o) and generally
submits guideline amendments to Congress pursuant to 28 U.S.C. 994(p)
not later than the first day of May each year. Absent action of
Congress to the contrary, submitted amendments become effective by
operation of law on the date specified by the Commission (generally
November 1 of the year in which the amendments are submitted to
Congress).
Notice of proposed amendments was published in the Federal Register
on January 18, 2013 (see 78 FR 4197). The Commission held a public
hearing on the proposed amendments in Washington, DC, on March 13,
2013. On April 30, 2013, the Commission submitted these amendments to
Congress and specified an effective date of November 1, 2013.
Authority: 28 U.S.C. 994(a), (o), and (p); USSC Rules of
Practice and Procedure 4.1.
Patti B. Saris,
Chair.
1. Amendment: Section 2B1.1(b) is amended by striking paragraph
(5); by renumbering paragraphs (6) through (8) as (5) through (7); by
renumbering paragraphs (13) through (18) as (14) through (19); by
inserting after paragraph (12) the following:
``(13) (Apply the greater) If the offense involved misappropriation
of a trade secret and the defendant knew or intended--
(A) that the trade secret would be transported or transmitted out
of the United States, increase by 2 levels; or
(B) that the offense would benefit a foreign government, foreign
instrumentality, or foreign agent, increase by 4 levels.
If subparagraph (B) applies and the resulting offense level is less
than level 14, increase to level 14.''; and in paragraph (16) (as so
renumbered) by striking ``(b)(15)(B)'' and inserting ``(b)(16)(B)''.
The Commentary to Sec. 2B1.1 captioned ``Application Notes'' is
amended in
[[Page 26426]]
Note 6 by striking ``(b)(7)'' both places it appears and inserting
``(b)(6)''; in Note 10 by striking ``(b)(13)'' both places it appears
and inserting ``(b)(14)''; in Note 11 by striking ``(b)(15)(A)'' both
places it appears and inserting ``(b)(16)(A)''; in Note 12 by striking
``(b)(15)(B)'' and inserting ``(b)(16)(B)''; in Note 12(A) by striking
``(b)(15)(B)(i)'' and inserting ``(b)(16)(B)(i)''; in Note 12(B) by
striking ``(b)(15)(B)(ii)'' and inserting ``(b)(16)(B)(ii)''; in Note
13 by striking ``(b)(17)'' both places it appears and inserting
``(b)(18)''; in Note 13(B) by striking ``(b)(17)(A)(iii)'' both places
it appears and inserting ``(b)(18)(A)(iii)'', and by striking
``(b)(15)(B)'' both places it appears and inserting ``(b)(16)(B)''; in
Note 14 by striking ``(b)(18)'' each place it appears and inserting
``(b)(19)''; and in Note 19(B) by striking ``(b)(17)(A)(iii)'' and
inserting ``(b)(18)(A)(iii)''.
The Commentary to Sec. 2B1.1 captioned ``Background'' is amended
by striking ``(b)(6)'', ``(b)(8)'', ``(b)(14)(B)'', ``(b)(15)(A)'',
``(b)(15)(B)(i)'', ``(b)(16)'', ``(b)(17)'', and ``(b)(17)(B)'' and
inserting ``(b)(5)'', ``(b)(7)'', ``(b)(15)(B)'', ``(b)(16)(A)'',
``(b)(16)(B)(i)'', ``(b)(17)'', ``(b)(18)'', and ``(b)(18)(B)'',
respectively; and by inserting before the paragraph that begins
``Subsection (b)(15)(B)'' (as so amended) the following:
``Subsection (b)(13) implements the directive in section 3 of
Public Law 112-269.''.
Reason for Amendment: This amendment responds to section 3 of the
Foreign and Economic Espionage Penalty Enhancement Act of 2012, Public
Law 112-269 (enacted January 14, 2013), which contains a directive to
the Commission regarding offenses involving stolen trade secrets or
economic espionage.
Section 3(a) of the Act directs the Commission to ``review and, if
appropriate, amend'' the guidelines ``applicable to persons convicted
of offenses relating to the transmission or attempted transmission of a
stolen trade secret outside of the United States or economic espionage,
in order to reflect the intent of Congress that penalties for such
offenses under the Federal sentencing guidelines and policy statements
appropriately reflect the seriousness of these offenses, account for
the potential and actual harm caused by these offenses, and provide
adequate deterrence against such offenses.'' Section 3(b) of the Act
states that, in carrying out the directive, the Commission shall
consider, among other things, whether the guidelines adequately address
the simple misappropriation of a trade secret; the transmission or
attempted transmission of a stolen trade secret outside of the United
States; and the transmission or attempted transmission of a stolen
trade secret outside of the United States that is committed or
attempted to be committed for the benefit of a foreign government,
foreign instrumentality, or foreign agent.
The offenses described in the directive may be prosecuted under 18
U.S.C. Sec. 1831 (Economic espionage), which requires that the
defendant specifically intend or know that the offense ``will benefit
any foreign government, foreign instrumentality, or foreign agent,''
and 18 U.S.C. Sec. 1832 (Theft of trade secrets), which does not
require such specific intent or knowledge. The statutory maximum terms
of imprisonment are 15 years for a section 1831 offense and 10 years
for a section 1832 offense. Both offenses are referenced in Appendix A
(Statutory Index) to Sec. 2B1.1 (Theft, Property Destruction, and
Fraud).
In response to the directive, the amendment revises the existing
specific offense characteristic at Sec. 2B1.1(b)(5), which provides an
enhancement of two levels ``[i]f the offense involved misappropriation
of a trade secret and the defendant knew or intended that the offense
would benefit a foreign government, foreign instrumentality, or foreign
agent,'' in two ways. First, it broadens the scope of the enhancement
to provide a 2-level increase for trade secret offenses in which the
defendant knew or intended that the trade secret would be transported
or transmitted out of the United States. Second, it increases the
severity of the enhancement to provide a 4-level enhancement and a
minimum offense level of 14 for trade secret offenses in which the
defendant knew or intended that the offense would benefit a foreign
government, foreign instrumentality, or foreign agent. The enhancement
also is redesignated as subsection (b)(13).
In responding to the directive, the Commission consulted with
individuals or groups representing law enforcement, owners of trade
secrets, victims of economic espionage offenses, the United States
Department of Justice, the United States Department of Homeland
Security, the United States Department of State, the Office of the
United States Trade Representative, the Federal Public and Community
Defenders, and standing advisory groups, among others. The Commission
also considered relevant data and literature.
The Commission received public comment and testimony that the
transmission of stolen trade secrets outside of the United States
creates significant obstacles to effective investigation and
prosecution and causes both increased harm to victims and more general
harms to the nation. With respect to the victim, civil remedies may not
be readily available or effective, and the transmission of a stolen
trade secret outside of the United States substantially increases the
risk that the trade secret will be exploited by a foreign competitor.
In contrast, the simple movement of a stolen trade secret within a
domestic multinational company (e.g., from a United States office to an
overseas office of the same company) may not pose the same risks or
harms. More generally, the Commission heard that foreign actors
increasingly target United States companies for trade secret theft and
that such offenses pose a growing threat to the nation's global
competitiveness, economic growth, and national security. Accordingly,
the Commission determined that a 2-level enhancement is warranted for
cases in which the defendant knew or intended that a stolen trade
secret would be transported or transmitted outside of the United
States.
The Commission also received public comment and testimony that
cases involving economic espionage (i.e., trade secret offenses that
benefit foreign governments or entities under the substantial control
of foreign governments) are particularly serious. In such cases, the
United States is unlikely to obtain a foreign government's cooperation
when seeking relief for the victim, and offenders backed by a foreign
government likely will have significant financial resources to combat
civil remedies. In addition, a foreign government's involvement
increases the threat to the nation's economic and national security.
Accordingly, the Commission determined that the existing enhancement
for economic espionage should be increased from 2 to 4 levels and that
such offenses should be subject to a minimum offense level of 14. This
heightened enhancement is consistent with the higher statutory maximum
penalties and fines applicable to such offenses and the Commission's
established treatment of economic espionage as a more serious form of
trade secret theft.
Consistent with the directive, the Commission also considered
whether the guidelines appropriately account for the simple
misappropriation of a trade secret. The Commission determined that such
offenses are adequately accounted for by existing provisions in the
Guidelines Manual, such as the loss table in Sec. 2B1.1(b)(1), the
sophisticated means enhancement at Sec. 2B1.1(b)(10),
[[Page 26427]]
and the adjustment for abuse of position of trust or use of special
skill at Sec. 3B1.3.
2. Amendment: Section 2B1.1 is amended by inserting before
paragraph (9) the following new paragraph:
``(8) (Apply the greater) If--
(A) the offense involved conduct described in 18 U.S.C. Sec. 670,
increase by 2 levels; or
(B) the offense involved conduct described in 18 U.S.C. Sec. 670,
and the defendant was employed by, or was an agent of, an organization
in the supply chain for the pre-retail medical product, increase by 4
levels.'';
The Commentary to Sec. 2B1.1 captioned ``Application Notes'' is
amended in Note 1 by inserting after the paragraph that begins ``
`Personal information' means'' the following:
`` `Pre-retail medical product' has the meaning given that term in
18 U.S.C. Sec. 670(e).''; and by inserting after the paragraph that
begins `` `Publicly traded company' means'' the following:
`` `Supply chain' has the meaning given that term in 18 U.S.C.
Sec. 670(e).''; in Note 3(F)(i) by striking ``Note 9(A)'' and
inserting ``Note 10(A)''; and by renumbering Notes 7 through 19 as 8
through 20; by inserting after Note 6 the following:
``7. Application of Subsection (b)(8)(B).--If subsection (b)(8)(B)
applies, do not apply an adjustment under Sec. 3B1.3 (Abuse of
Position of Trust or Use of Special Skill).''; and in Note 20 (as so
renumbered) by adding at the end of subparagraph (A)(ii) as the last
sentence the following: ``Similarly, an upward departure would be
warranted in a case involving conduct described in 18 U.S.C. Sec. 670
if the offense resulted in serious bodily injury or death, including
serious bodily injury or death resulting from the use of the pre-retail
medical product.''.
The Commentary to Sec. 2B1.1 captioned ``Background'' is amended
by inserting before the paragraph that begins ``Subsection (b)(9)(D)''
the following:
``Subsection (b)(8) implements the directive to the Commission in
section 7 of Public Law 112-186.''.
However, if Sec. 2B1.1(b) already contains a paragraph (8) because
the renumbering of paragraphs by Amendment 1 of this document has not
taken effect, renumber the new paragraph inserted into Sec. 2B1.1(b)
as paragraph (8A) rather than paragraph (8), and revise the Commentary
so that the new Note 7 inserted into the Application Notes and the new
paragraph inserted into the Background refer to subsection (b)(8A)
rather than subsection (b)(8).
Appendix A (Statutory Index) is amended by inserting after the line
referenced to 18 U.S.C. Sec. 669 the following:
``18 U.S.C. Sec. 670 2B1.1''.
Reason for Amendment: This amendment responds to the Strengthening
and Focusing Enforcement to Deter Organized Stealing and Enhance Safety
Act of 2012, Public Law 112-186 (enacted October 5, 2012) (the
``Act''), which addressed various offenses involving ``pre-retail
medical products,'' defined as ``a medical product that has not yet
been made available for retail purchase by a consumer.'' The Act
created a new criminal offense at 18 U.S.C. Sec. 670 for theft of pre-
retail medical products, increased statutory penalties for certain
related offenses when a pre-retail medical product is involved, and
contained a directive to the Commission.
New Offense at 18 U.S.C. Sec. 670
The new offense at section 670 makes it unlawful for any person in
(or using any means or facility of) interstate or foreign commerce to--
(1) embezzle, steal, or by fraud or deception obtain, or knowingly
and unlawfully take, carry away, or conceal a pre-retail medical
product;
(2) knowingly and falsely make, alter, forge, or counterfeit the
labeling or documentation (including documentation relating to
origination or shipping) of a pre-retail medical product;
(3) knowingly possess, transport, or traffic in a pre-retail
medical product that was involved in a violation of paragraph (1) or
(2);
(4) with intent to defraud, buy, or otherwise obtain, a pre-retail
medical product that has expired or been stolen;
(5) with intent to defraud, sell, or distribute, a pre-retail
medical product that is expired or stolen; or
(6) attempt or conspire to violate any of paragraphs (1) through
(5).
The offense generally carries a statutory maximum term of
imprisonment of three years. If the offense is an ``aggravated
offense,'' however, higher statutory maximum terms of imprisonment are
provided. The offense is an ``aggravated offense'' if--
(1) the defendant is employed by, or is an agent of, an
organization in the supply chain for the pre-retail medical product; or
(2) the violation--
(A) involves the use of violence, force, or a threat of violence or
force;
(B) involves the use of a deadly weapon;
(C) results in serious bodily injury or death, including serious
bodily injury or death resulting from the use of the medical product
involved; or
(D) is subsequent to a prior conviction for an offense under
section 670.
Specifically, the higher statutory maximum terms of imprisonment
are:
(1) Five years, if--
(A) the defendant is employed by, or is an agent of, an
organization in the supply chain for the pre-retail medical product; or
(B) the violation (i) involves the use of violence, force, or a
threat of violence or force, (ii) involves the use of a deadly weapon,
or (iii) is subsequent to a prior conviction for an offense under
section 670.
(2) 15 years, if the value of the medical products involved in the
offense is $5,000 or greater.
(3) 20 years, if both (1) and (2) apply.
(4) 30 years, if the offense results in serious bodily injury or
death, including serious bodily injury or death resulting from the use
of the medical product involved.
The amendment amends Appendix A (Statutory Index) to reference the
new offense at 18 U.S.C. Sec. 670 to Sec. 2B1.1 (Theft, Property
Destruction, and Fraud). The Commission concluded that Sec. 2B1.1 is
the appropriate guideline because the elements of the new offense
include theft or fraud.
Response to Directive
Section 7 of the Act directs the Commission to ``review and, if
appropriate, amend'' the federal sentencing guidelines and policy
statements applicable to the new offense and the related offenses ``to
reflect the intent of Congress that penalties for such offenses be
sufficient to deter and punish such offenses, and appropriately account
for the actual harm to the public from these offenses.'' The amendment
amends Sec. 2B1.1 to address offenses involving pre-retail medical
products in two ways.
First, the amendment adds a new specific offense characteristic at
Sec. 2B1.1(b)(8) that provides a two-pronged enhancement with an
instruction to apply the greater. Prong (A) provides a 2-level
enhancement if the offense involved conduct described in 18 U.S.C.
Sec. 670. Prong (B) provides a 4-level enhancement if the offense
involved conduct described in 18 U.S.C. Sec. 670 and the defendant was
employed by, or an agent of, an organization in the supply chain for
the pre-retail product. Accompanying this new specific offense
characteristic is new Commentary providing that, if prong (B) applies,
``do not apply an adjustment under Sec. 3B1.3 (Abuse of Position of
Trust or Use of Special Skill).''
[[Page 26428]]
Based on public comment, testimony and sentencing data, the
Commission concluded that an enhancement differentiating fraud and
theft offenses involving medical products from those involving other
products is warranted by the additional risk such offenses pose to
public health and safety. In addition, such offenses undermine the
public's confidence in the medical regulatory and distribution system.
The Commission also concluded that the risks and harms it identified
would be present in any theft or fraud offense involving a pre-retail
medical product, regardless of the offense of conviction. Therefore
application of the new specific offense characteristic is not limited
to offenses charged under 18 U.S.C. Sec. 670.
The amendment provides a 4-level enhancement for defendants who
commit such offenses while employed in the supply chain for the pre-
retail medical product. Such defendants are subject to an increased
statutory maximum and the Commission determined that a heightened
enhancement should apply to reflect the likelihood that the defendant's
position in the supply chain facilitated the commission or concealment
of the offense. Defendants who receive the 4-level enhancement are not
subject to the adjustment at Sec. 3B1.3 because the new enhancement
adequately accounts for the concerns covered by Sec. 3B1.3. The
Commission determined that existing specific offense characteristics
generally account for other aggravating factors included in the Act,
such as loss, use or threat of force, risk of death or serious bodily
injury, and weapon involvement, and therefore additional new specific
offense characteristics are not necessary. See, e.g., ''Sec. Sec.
2B1.1(b)(1), (b)(3), and (b)(15) (as redesignated by the amendment).
Second, it amends the upward departure provisions in the Commentary
to Sec. 2B1.1 at Application Note 19(A) to provide--as an example of a
case in which an upward departure would be warranted--a case
``involving conduct described in 18 U.S.C. Sec. 670 if the offense
resulted in serious bodily injury or death, including serious bodily
injury or death resulting from the use of the pre-retail medical
product.'' Public comment and testimony indicated that Sec. 2B1.1 may
not adequately account for the harm created by theft or fraud offenses
involving pre-retail medical products when such serious bodily injury
or death actually occurs as a result of the offense. For example, some
pre-retail medical products are stolen as part of a scheme to re-sell
them into the supply chain, but if the products have not been properly
stored in the interim, their subsequent use can seriously injure the
individual consumers who buy and use them. Thus, the amendment expands
the scope of the existing upward departure provision to address such
harms and to clarify that an upward departure is appropriate in such
cases not only if serious bodily injury or death occurred during the
theft or fraud, but also if such serious bodily injury or death
resulted from the victim's use of a pre-retail medical product that had
previously been obtained by theft or fraud.
Finally, the proposed amendment amends the Commentary to Sec.
2B1.1 to provide relevant definitions and make other conforming
changes.
3. Amendment: Section 2B5.3(b) is amended by renumbering paragraph
(5) as (6); by inserting after paragraph (4) the following:
``(5) If the offense involved a counterfeit drug, increase by 2
levels.''; and by inserting after paragraph (6) (as so renumbered) the
following:
``(7) If the offense involved a counterfeit military good or
service the use, malfunction, or failure of which is likely to cause
(A) the disclosure of classified information; (B) impairment of combat
operations; or (C) other significant harm to (i) a combat operation,
(ii) a member of the Armed Forces, or (iii) national security, increase
by 2 levels. If the resulting offense level is less than level 14,
increase to level 14.''.
The Commentary to Sec. 2B5.3 captioned ``Application Notes'' is
amended in Note 1 by inserting after the paragraph that begins
``'Commercial advantage'' the following:
``'Counterfeit drug' has the meaning given that term in 18 U.S.C.
Sec. 2320(f)(6).
``'Counterfeit military good or service' has the meaning given that
term in 18 U.S.C. Sec. 2320(f)(4).''; by renumbering Notes 3 and 4 as
4 and 5; by inserting after Note 2 the following:
``3. Application of Subsection (b)(7).--In subsection (b)(7),
`other significant harm to a member of the Armed Forces' means
significant harm other than serious bodily injury or death. In a case
in which the offense involved a counterfeit military good or service
the use, malfunction, or failure of which is likely to cause serious
bodily injury or death, subsection (b)(6)(A) (conscious or reckless
risk of serious bodily injury or death) would apply.''; and in Note 5
(as so renumbered) by adding at the end the following:
``(D) The offense resulted in death or serious bodily injury.''.
The Commentary to Sec. 2B5.3 captioned ``Background'' is amended
by inserting after the paragraph that begins ``Subsection (b)(1)'' the
following:
`` Subsection (b)(5) implements the directive to the Commission in
section 717 of Public Law 112B144.''.
Appendix A (Statutory Index) is amended by striking the line
referenced to 21 U.S.C. Sec. 333(b) and inserting the following:
``21 U.S.C. Sec. 333(b)(1)-(6) 2N2.1
21 U.S.C. Sec. 333(b)(7) 2N1.1''.
Reason for Amendment: This amendment responds to two recent Acts
that made changes to 18 U.S.C. Sec. 2320 (Trafficking in counterfeit
goods or services). One Act increased penalties for offenses involving
counterfeit military goods and services; the other increased penalties
for offenses involving counterfeit drugs and included a directive to
the Commission. The amendment also responds to recent statutory changes
to 21 U.S.C. Sec. 333 (Penalties for violations of the Federal Food,
Drug, and Cosmetics Act) that increase penalties for offenses involving
intentionally adulterated drugs.
Section 2320 and Counterfeit Military Goods and Services
First, the amendment responds to changes to section 2320 made by
the National Defense Authorization Act for Fiscal Year 2012, Public Law
112-81 (enacted December 31, 2011) (the ``NDAA''). In general, section
2320 prohibits trafficking in goods or services using a counterfeit
mark, and provides a statutory maximum term of imprisonment of 10
years, or 20 years for a second or subsequent offense. If the offender
knowingly or recklessly causes or attempts to cause serious bodily
injury or death, the statutory maximum is increased to 20 years or any
term of years or life, respectively. Offenses under section 2320 are
referenced in Appendix A (Statutory Index) to Sec. 2B5.3 (Criminal
Infringement of Copyright or Trademark).
Section 818 of the NDAA amended section 2320 to add a new
subsection (a)(3) that prohibits trafficking in counterfeit military
goods and services, the use, malfunction, or failure of which is likely
to cause serious bodily injury or death, the disclosure of classified
information, impairment of combat operations, or other significant harm
to a combat operation, a member of the Armed Forces, or national
security. A ``counterfeit military good or service'' is defined as a
good or service that uses a counterfeit mark and that (A) is falsely
identified or labeled as meeting military specifications, or (B) is
intended for use in a military or national security application. See 18
U.S.C. Sec. 2320(f)(4). An individual who commits an offense
[[Page 26429]]
under subsection (a)(3) is subject to a statutory maximum term of
imprisonment of 20 years, or 30 years for a second or subsequent
offense. See 18 U.S.C. Sec. 2320(b)(3).
The legislative history of the NDAA indicates that Congress amended
section 2320 because of concerns about national security and the
protection of United States servicemen and women. After reviewing the
legislative history, public comment, testimony, and data, the
Commission determined that an offense involving counterfeit military
goods and services that jeopardizes the safety of United States troops
and compromises mission effectiveness warrants increased punishment.
Specifically, the amendment addresses offenses involving
counterfeit military goods and services by amending Sec. 2B5.3 to
create a new specific offense characteristic at subsection (b)(7).
Subsection (b)(7) provides a 2-level enhancement and a minimum offense
level of 14 if the offense involves a counterfeit military good or
service the use, malfunction, or failure of which is likely to cause
the disclosure of classified information, impairment of combat
operations, or other significant harm to a combat operation, a member
of the Armed Forces, or to national security. The Commission set the
minimum offense level at 14 so that it would be proportionate to the
minimum offense level in the enhancement for ``conscious or reckless
risk of death or serious bodily injury'' at subsection (b)(5)(A). That
enhancement is moved from (b)(5)(A) to (b)(6)(A) by the amendment.
Although section 2320(a)(3) includes offenses that are likely to
cause ``serious bodily injury or death,'' the new specific offense
characteristic does not because the Commission determined that such
risk of harm is adequately addressed by the existing enhancement for
offenses involving the ``conscious or reckless risk of death or serious
bodily injury.'' Consistent with that approach, the amendment includes
commentary providing that the ``other significant harm'' specified in
subsection (b)(7) does not include death or serious bodily injury and
that Sec. 2B5.3(b)(6)(A) would apply if the offense involved a
counterfeit military good or service the use, malfunction, or failure
of which is likely to cause serious bodily injury or death.
Section 2320 and Counterfeit Drugs
Second, the amendment responds to changes made by section 717 of
the Food and Drug Administration Safety and Innovation Act, Public Law
112-144 (enacted July 9, 2012) (the ``FDASIA''), which amended section
2320 to add a new subsection (a)(4) that prohibits trafficking in a
counterfeit drug. A ``counterfeit drug'' is a drug, as defined by
section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
Sec. 321), that uses a counterfeit mark. See 18 U.S.C. Sec.
2320(f)(6). An individual who commits an offense under subsection
(a)(4) is subject to the same statutory maximum term of imprisonment as
for an offense involving a counterfeit military good or service--20
years, or 30 years for a second or subsequent offense. See 18 U.S.C.
2320(b)(3).
Section 717 of the FDASIA also contained a directive to the
Commission to ``review and amend, if appropriate'' the guidelines and
policy statements applicable to persons convicted of an offense
described in section 2320(a)(4)--i.e., offenses involving counterfeit
drugs--``in order to reflect the intent of Congress that such penalties
be increased in comparison to those currently provided by the
guidelines and policy statements.'' See Public Law 112-144, Sec.
717(b)(1). In addition, section 717(b)(2) provides that, in responding
to the directive, the Commission shall, among other things, ensure that
the guidelines reflect the serious nature of section 2320(a)(4)
offenses and consider the extent to which the guidelines account for
the potential and actual harm to the public resulting from such
offenses.
After reviewing the legislative history of the FDASIA, public
comment, testimony, and data, the Commission determined that offenses
involving counterfeit drugs involve a threat to public safety and
undermine the public's confidence in the drug supply chain.
Furthermore, unlike many other goods covered by the infringement
guideline, offenses involving counterfeit drugs circumvent a regulatory
scheme established to protect the health and safety of the public.
Accordingly, the amendment responds to the directive by adding a new
specific offense characteristic at Sec. 2B5.3(b)(5) that provides a 2-
level enhancement if the offense involves a counterfeit drug.
Offenses Resulting in Death or Serious Bodily Injury
Third, the amendment amends the Commentary to '2B5.3 to add a new
upward departure consideration if the offense resulted in death or
serious bodily injury. The addition of this departure consideration
recognizes the distinction between an offense involving the risk of
death or serious bodily injury and one in which death or serious bodily
injury actually results. Departures for these reasons are already
authorized in the guidelines, see Sec. Sec. 5K2.1 (Death) (Policy
Statement), 5K2.2 (Physical Injury) (Policy Statement), but the
amendment is intended to heighten awareness of the availability of a
departure in such cases.
Section 333 and Offenses Involving Intentionally Adulterated Drugs
Finally, the amendment provides a statutory reference for the new
offense at 21 U.S.C. 333(b)(7) created by section 716 of the FDASIA.
Section 333(b)(7) applies to any person who knowingly and intentionally
adulterates a drug such that the drug is adulterated under certain
provisions of 21 U.S.C. Sec. 351 and has a reasonable probability of
causing serious adverse health consequences or death to humans or
animals. It provides a statutory maximum term of imprisonment of 20
years.
The amendment amends Appendix A (Statutory Index) to reference
offenses under section 333(b)(7) to Sec. 2N1.1 (Tampering or
Attempting to Tamper Involving Risk of Death or Bodily Injury). The
Commission concluded that offenses under section 333(b)(7) are similar
to tampering offenses under 18 U.S.C. Sec. 1365 (Tampering with
consumer products), which are referenced to '2N1.1. In addition, the
public health harms that Congress intended to target in adulteration
cases are similar to those targeted by violations of section 1365(a)
and are best addressed under Sec. 2N1.1.
4. Amendment: The Commentary to Sec. 2T1.1 captioned ``Application
Notes'' is amended in Note 1 by inserting ``Tax Loss.--'' at the
beginning; in Note 2 by inserting ``Total Tax Loss Attributable to the
Offense.--'' at the beginning, and by redesignating subdivisions (a)
through (e) as (A) through (E); by inserting after Note 2 the
following:
``3. Unclaimed Credits, Deductions, and Exemptions.--In determining
the tax loss, the court should account for the standard deduction and
personal and dependent exemptions to which the defendant was entitled.
In addition, the court should account for any unclaimed credit,
deduction, or exemption that is needed to ensure a reasonable estimate
of the tax loss, but only to the extent that (A) the credit, deduction,
or exemption was related to the tax offense and could have been claimed
at the time the tax offense was committed; (B) the credit, deduction,
or exemption is reasonably and practicably ascertainable; and (C) the
defendant presents information to support the credit, deduction, or
exemption sufficiently in advance of sentencing to provide an adequate
opportunity to
[[Page 26430]]
evaluate whether it has sufficient indicia of reliability to support
its probable accuracy (see Sec. 6A1.3 (Resolution of Disputed Factors)
(Policy Statement)).
However, the court shall not account for payments to third parties
made in a manner that encouraged or facilitated a separate violation of
law (e.g., `under the table' payments to employees or expenses incurred
to obstruct justice).
The burden is on the defendant to establish any such credit,
deduction, or exemption by a preponderance of the evidence. See Sec.
6A1.3, comment.''; by striking ``3. `Criminal activity' means'' and
inserting the following:
``4. Application of Subsection (b)(1) (Criminal Activity).--
`Criminal activity' means''; by striking ``4. Sophisticated Means
Enhancement.C'' and inserting the following:
``5. Application of Subsection (b)(2) (Sophisticated Means).--'';
by striking ``5. A `credit claimed'' and all that follows through the
end of Note 6 and inserting the following:
``6. Other Definitions.--For purposes of this section:
A `credit claimed against tax' is an item that reduces the amount
of tax directly. In contrast, a `deduction' is an item that reduces the
amount of taxable income. `Gross income' has the same meaning as it has
in 26 U.S.C. Sec. 61 and 26 CFR Sec. 1.61.''; and in Note 7 by
inserting ``Aggregation of Individual and Corporate Tax Loss.--'' at
the beginning.
Reason for Amendment: This amendment responds to a circuit conflict
regarding whether a sentencing court, in calculating tax loss as
defined in Sec. 2T1.1 (Tax Evasion; Willful Failure to File Return,
Supply Information, or Pay Tax; Fraudulent or False Returns,
Statements, or Other Documents), may consider previously unclaimed
credits, deductions, and exemptions that the defendant legitimately
could have claimed if he or she had filed an accurate tax return.
The Tenth and Second Circuits have held that a sentencing court may
give the defendant credit for a legitimate but unclaimed deduction.
These circuit courts generally reason that, while a district court need
not speculate about unclaimed deductions if the defendant offers weak
support, nothing in the guidelines prohibits a sentencing court from
considering evidence of unclaimed deductions where a defendant offers
convincing proof. See United States v. Hoskins, 654 F.3d 1086, 1094
(10th Cir. 2011) (``[W]here defendant offers convincing proof--where
the court's exercise is neither nebulous nor complex--nothing in the
Guidelines prohibits a sentencing court from considering evidence of
unclaimed deductions in analyzing a defendant's estimate of the tax
loss suffered by the government.''); United States v. Martinez-Rios,
143 F.3d 662, 671 (2d Cir. 1998) (holding that ``the sentencing court
need not base its tax loss calculation on gross unreported income if it
can make a 'more accurate determination' of the intended loss and that
determination of the tax loss involves giving the defendant the benefit
of legitimate but unclaimed deductions''); United States v. Gordon, 291
F.3d 181, 187 (2d Cir. 2002) (applying Martinez-Rios, the court held
that the district court erred when it refused to consider potential
unclaimed deductions in its sentencing analysis).
Six other circuit courts--the Fourth, Fifth, Seventh, Eighth,
Ninth, and Eleventh--have reached the opposite conclusion, directly or
indirectly holding that a court may not consider unclaimed deductions
to reduce the tax loss. These circuit courts generally reason that the
``object of the [defendant's] offense'' is established by the amount
stated on the fraudulent return, and that courts should not be required
to reconstruct the defendant's return based on speculation regarding
the many hypothetical ways the defendant could have completed the
return. See United States v. Delfino, 510 F.3d 468, 473 (4th Cir. 2007)
(``The law simply does not require the district court to engage in
[speculation as to what deductions would have been allowed], nor does
it entitle the Delfinos to the benefit of deductions they might have
claimed now that they stand convicted of tax evasion.''); United States
v. Phelps, 478 F.3d 680, 682 (5th Cir. 2007) (holding that the
defendant could not reduce tax loss by taking a social security tax
deduction that he did not claim on the false return); United States v.
Chavin, 316 F.3d 666, 677 (7th Cir. 2002) (``Here, the object of [the
defendant]'s offense was the amount by which he underreported and
fraudulently stated his tax liability on his return; reference to other
unrelated mistakes on the return such as unclaimed deductions tells us
nothing about the amount of loss to the government that his scheme
intended to create.''); United States v. Psihos, 683 F.3d 777, 781-82
(7th Cir. 2012) (following Chavin in disallowing consideration of
unclaimed deductions); United States v. Sherman, 372 F.App'x 668, 676-
77 (8th Cir. 2010); United States v. Blevins, 542 F.3d 1200, 1203 (8th
Cir. 2008) (declining to decide ``whether an unclaimed tax benefit may
ever offset tax loss,'' but finding the district court properly
declined to reduce tax loss based on taxpayers' unclaimed deductions);
United States v. Yip, 592 F.3d 1035, 1041 (9th Cir. 2010) (``We hold
that Sec. 2T1.1 does not entitle a defendant to reduce the tax loss
charged to him by the amount of potentially legitimate, but unclaimed,
deductions even if those deductions are related to the offense.'');
United States v. Clarke, 562 F.3d 1158, 1165 (11th Cir. 2009) (holding
that the defendant was not entitled to a tax loss calculation based on
a filing status other than the one he actually used; ``[t]he district
court did not err in computing the tax loss based on the fraudulent
return Clarke actually filed, and not on the tax return Clarke could
have filed but did not.'').
The amendment resolves the conflict by amending the Commentary to
Sec. 2T1.1 to establish a new application note regarding the
consideration of unclaimed credits, deductions, or exemptions in
calculating a defendant's tax loss. This amendment reflects the
Commission's view that consideration of legitimate unclaimed credits,
deductions, or exemptions, subject to certain limitations and
exclusions, is most consistent with existing provisions regarding the
calculation of tax loss in Sec. 2T1.1. See, e.g., USSG Sec. 2T1.1,
comment. (n.1) (``the guidelines contemplate that the court will simply
make a reasonable estimate based on the available facts''); USSG Sec.
2T1.1, comment. (backg'd.) (``a greater tax loss is obviously more
harmful to the treasury and more serious than a smaller one with
otherwise similar characteristics''); USSG Sec. 2T1.1, comment. (n.1)
(allowing a sentencing court to go beyond the presumptions set forth in
the guideline if ``the government or defense provides sufficient
information for a more accurate assessment of the tax loss,'' and
providing ``the court should use any method of determining the tax loss
that appears appropriate to reasonably calculate the loss that would
have resulted had the offense been successfully completed'').
The new application note first provides that courts should always
account for the standard deduction and personal and dependent
exemptions to which the defendant was entitled. The Commission received
public comment and testimony that such deductions and exemptions are
commonly considered and accepted by the government during the course of
its investigation and during the course of plea negotiations.
Consistent with this standard practice, the Commission determined that
[[Page 26431]]
accounting for these generally undisputed and readily verifiable
deductions and exemptions where they are not previously claimed (most
commonly where the offense involves a failure to file a tax return) is
appropriate.
The new application note further provides that courts should also
account for any other previously unclaimed credit, deduction, or
exemption that is needed to ensure a reasonable estimate of the tax
loss, but only to the extent certain conditions are met. First, the
credit, deduction, or exemption must be one that was related to the tax
offense and could have been claimed at the time the tax offense was
committed. This condition reflects the Commission's determination that
a defendant should not be permitted to invoke unforeseen or after-the-
fact changes or characterizations--such as offsetting losses that occur
before or after the relevant tax year or substituting a more
advantageous depreciation method or filing status--to lower the tax
loss. To permit a defendant to optimize his return in this manner would
unjustly reward defendants, and could require unjustifiable speculation
and complexity at the sentencing hearing.
Second, the otherwise unclaimed credit, deduction, or exemption
must be reasonably and practicably ascertainable. Consistent with the
instruction in Application Note 1, this condition reaffirms the
Commission's position that sentencing courts need only make a
reasonable estimate of tax loss. In this regard, the Commission
recognized that consideration of some unclaimed credits, deductions, or
exemptions could require sentencing courts to make unnecessarily
complex tax determinations, and therefore concluded that limiting
consideration of unclaimed credits, deductions, or exemptions to those
that are reasonably and practicably ascertainable is appropriate.
Third, the defendant must present information to support the
credit, deduction, or exemption sufficiently in advance of sentencing
to provide an adequate opportunity to evaluate whether it has
sufficient indicia of reliability to support its probable accuracy.
Consistent with the principles set forth in Sec. 6A1.3 (Resolution of
Disputed Factors) (Policy Statement), this condition ensures that the
parties have an adequate opportunity to present information relevant to
the court's consideration of any unclaimed credits, deductions, or
exemptions raised at sentencing.
In addition, the new application note provides that certain
categories of credits, deductions, or exemptions shall not be
considered by the court in any case. In particular, ``the court shall
not account for payments to third parties made in a manner that
encouraged or facilitated a separate violation of law (e.g., `under the
table' payments to employees or expenses incurred to obstruct
justice).'' The Commission determined that payments made in this manner
result in additional harm to the tax system and the legal system as a
whole. Therefore, to use them to reduce the tax loss would
unjustifiably benefit the defendant and would result in a tax loss
figure that understates the seriousness of the offense and the
culpability of the defendant.
Finally, the application note makes clear that the burden is on the
defendant to establish any credit, deduction, or exemption permitted
under this new application note by a preponderance of the evidence,
which is also consistent with the commentary in Sec. 6A1.3.
5. Amendment: The Commentary to Sec. 3E1.1 captioned ``Application
Notes'' is amended in Note 6 by adding at the end of the paragraph that
begins ``Because the Government'' the following as the last sentence:
``The government should not withhold such a motion based on interests
not identified in Sec. 3E1.1, such as whether the defendant agrees to
waive his or her right to appeal.''; and by adding after the paragraph
that begins ``Because the Government'' the following new paragraph:
``If the government files such a motion, and the court in deciding
whether to grant the motion also determines that the defendant has
assisted authorities in the investigation or prosecution of his own
misconduct by timely notifying authorities of his intention to enter a
plea of guilty, thereby permitting the government to avoid preparing
for trial and permitting the government and the court to allocate their
resources efficiently, the court should grant the motion.''.
The Commentary to Sec. 3E1.1 captioned ``Background'' is amended
in the paragraph that begins ``Section 401(g)'' by striking ``the last
paragraph'' and inserting ``the first sentence of the second
paragraph''.
Reason for Amendment: This amendment addresses two circuit
conflicts involving the guideline for acceptance of responsibility,
Sec. 3E1.1 (Acceptance of Responsibility). A defendant who clearly
demonstrates acceptance of responsibility for his offense receives a 2-
level reduction under subsection (a) of Sec. 3E1.1. The two circuit
conflicts both involve the circumstances under which the defendant is
eligible for a third level of reduction under subsection (b) of Sec.
3E1.1. Subsection (b) provides:
(b) If the defendant qualifies for a decrease under subsection (a),
the offense level determined prior to the operation of subsection (a)
is level 16 or greater, and upon motion of the government stating that
the defendant has assisted authorities in the investigation or
prosecution of his own misconduct by timely notifying authorities of
his intention to enter a plea of guilty, thereby permitting the
government to avoid preparing for trial and permitting the government
and the court to allocate their resources efficiently, decrease the
offense level by 1 additional level.
The first circuit conflict involves the government's discretion
under subsection (b) and, in particular, whether the government may
withhold a motion based on an interest not identified in Sec. 3E1.1,
such as the defendant's refusal to waive his right to appeal. The
second conflict involves the court's discretion under subsection (b)
and, in particular, whether the court may decline to apply the third
level of reduction when the government has moved for it.
These circuit conflicts are unusual in that they involve guideline
and commentary provisions that Congress directly amended. See section
401(g) of the Prosecutorial Remedies and Other Tools to end the
Exploitation of Children Today Act of 2003, Public Law 108-21 (the
``PROTECT Act''); see also USSG App. C, Amendment 649 (effective April
30, 2003) (implementing amendments to the guidelines made directly by
the PROTECT Act). They also implicate a congressional directive to the
Commission not to ``alter or repeal'' the congressional amendments. See
section 401(j)(4) of the PROTECT Act. Accordingly, in considering these
conflicts, the Commission has not only reviewed public comment,
sentencing data, case law, and the other types of information it
ordinarily considers, but has also studied the operation of Sec. 3E1.1
before the PROTECT Act, the congressional action to amend Sec. 3E1.1,
and the legislative history of that congressional action.
The Government's Discretion to Withhold the Motion
The first circuit conflict involves the government's discretion
under subsection (b) and, in particular, whether the government may
withhold a motion based on an interest not identified in Sec. 3E1.1,
such as the defendant's refusal to waive his right to appeal.
[[Page 26432]]
Several circuits have held that a defendant's refusal to sign an
appellate waiver is a legitimate reason for the government to withhold
a Sec. 3E1.1(b) motion. See, e.g., United States v. Johnson, 581 F.3d
994, 1002 (9th Cir. 2009) (holding that ``allocation and expenditure of
prosecutorial resources for the purposes of defending an appeal is a
rational basis'' for such refusal); United States v. Deberry, 576 F.3d
708, 711 (7th Cir. 2009) (holding that requiring the defendant to sign
an appeal waiver would avoid ``expense and uncertainty'' on appeal);
United States v. Newson, 515 F.3d 374, 378 (5th Cir. 2008) (holding
that the government's interests under Sec. 3E1.1 encompass not only
the government's time and effort at prejudgment stage but also at post-
judgment proceedings).
In contrast, the Fourth Circuit has held that a defendant's refusal
to sign an appellate waiver is not a legitimate reason for the
government to withhold a Sec. 3E1.1(b) motion. See United States v.
Divens, 650 F.3d 343, 348 (4th Cir. 2011) (stating that ``the text of
Sec. 3E1.1(b) reveals a concern for the efficient allocation of trial
resources, not appellate resources'' [emphasis in original]); see also
United States v. Davis, No. 12-3552, slip op. at 5, ---- F.3d ---- (7th
Cir., April 9, 2013) (Rovner, J., concurring) (``insisting that [the
defendant] waive his right to appeal before he may receive the maximum
credit under the Guidelines for accepting responsibility serves none of
the interests identified in section 3E1.1''). The majority in Davis
called for the conflict to be resolved, stating: ``Resolution of this
conflict is the province of the Supreme Court or the Sentencing
Commission.'' Davis, slip op. at 3, ---- F.3d at ---- (per curiam). The
Second Circuit, stating that the Fourth Circuit's reasoning in Divens
applies ``with equal force'' to the defendant's request for an
evidentiary hearing on sentencing issues, held that the government may
not withhold a Sec. 3E1.1 motion based upon such a request. See United
States v. Lee, 653 F.3d 170, 175 (2d Cir. 2011).
The PROTECT Act added Commentary to Sec. 3E1.1 stating that
``[b]ecause the Government is in the best position to determine whether
the defendant has assisted authorities in a manner that avoids
preparing for trial, an adjustment under subsection (b) may only be
granted upon a formal motion by the Government at the time of
sentencing.'' See Sec. 3E1.1, comment. (n.6). The PROTECT Act also
amended Sec. 3E1.1(b) to provide that the government motion state,
among other things, that the defendant's notification of his intention
to enter a plea of guilty permitted ``the government to avoid preparing
for trial and . . . the government and the court to allocate their
resources efficiently . . .''.
In its study of the PROTECT Act, the Commission could discern no
congressional intent to allow decisions under Sec. 3E1.1 to be based
on interests not identified in Sec. 3E1.1. Furthermore, consistent
with Divens and the concurrence in Davis, the Commission determined
that the defendant's waiver of his or her right to appeal is an example
of an interest not identified in Sec. 3E1.1. Accordingly, this
amendment adds an additional sentence to the Commentary stating that
``[t]he government should not withhold such a motion based on interests
not identified in Sec. 3E1.1, such as whether the defendant agrees to
waive his or her right to appeal.''
The Court's Discretion to Deny the Motion
The second conflict involves the court's discretion under
subsection (b) and, in particular, whether the court may decline to
apply the third level of reduction when the government has moved for
it.
The Seventh Circuit has held that if the government makes the
motion (and the other two requirements of subsection (b) are met, i.e.,
the defendant qualifies for the 2-level decrease and the offense level
is level 16 or greater), the third level of reduction must be awarded.
See United States v. Mount, 675 F.3d 1052 (7th Cir. 2012).
In contrast, the Fifth Circuit has held that the district court
retains discretion to deny the motion. See United States v. Williamson,
598 F.3d 227, 230 (5th Cir. 2010). In Williamson, the defendant was
convicted after jury trial but successfully appealed. After remand, he
pled guilty to a lesser offense. The government moved for the third
level of reduction, but the court declined to grant it because
``regardless of however much additional trial preparation the
government avoided through Williamson's guilty plea following remand,
the preparation for the initial trial and the use of the court's
resources for that trial meant that the Sec. 3E1.1(b) benefits to the
government and the court were not obtained''. Id. at 231. The Fifth
Circuit affirmed, holding that the decision whether to grant the third
level of reduction ``is the district court's--not the government's--
even though the court may only do so on the government's motion''. Id.
at 230.
This amendment amends the Commentary to Sec. 3E1.1 by adding the
following statement: ``If the government files such a motion, and the
court in deciding whether to grant the motion also determines that the
defendant has assisted authorities in the investigation or prosecution
of his own misconduct by timely notifying authorities of his intention
to enter a plea of guilty, thereby permitting the government to avoid
preparing for trial and permitting the government and the court to
allocate their resources efficiently, the court should grant the
motion.''
In its study of the PROTECT Act, the Commission could discern no
congressional intent to take away from the court its responsibility
under Sec. 3E1.1 to make its own determination of whether the
conditions were met. In particular, both the language added to the
Commentary by the PROTECT Act and the legislative history of the
PROTECT Act speak in terms of allowing the court discretion to
``grant'' the third level of reduction. See USSG Sec. 3E1.1, comment.
(n.6) (stating that the third level of reduction ``may only be granted
upon a formal motion by the Government''); H.R. Rep. No. 108-66, at 59
(2003) (Conf. Rep.) (stating that the PROTECT Act amendment would
``only allow courts to grant an additional third point reduction for
`acceptance of responsibility' upon motion of the government.''). In
addition, the Commission observes that one of the considerations in
Sec. 3E1.1(b) is whether the defendant's actions permitted the court
to allocate its resources efficiently, and the court is in the best
position to make that determination. Accordingly, consistent with
congressional intent, this amendment recognizes that the court
continues to have discretion to decide whether to grant the third level
of reduction.
Finally, and as mentioned above, the Commission in its study of the
PROTECT Act could discern no congressional intent to allow decisions
under Sec. 3E1.1 to be based on interests not identified in Sec.
3E1.1. For that reason, this amendment indicates that, if the
government has filed the motion and the court also determines that the
circumstances identified in Sec. 3E1.1 are present, the court should
grant the motion.
6. Amendment: The Commentary to Sec. 5G1.3 captioned
``Background'' is amended by striking ``In a case in which'' and all
that follows through ``Exercise of that authority,'' and inserting
``Federal courts generally `have discretion to select whether the
sentences they impose will run concurrently or consecutively with
respect to other sentences that they impose, or that have been imposed
in other proceedings, including state
[[Page 26433]]
proceedings.' See Setser v. United States, 132 S. Ct. 1463, 1468
(2012); 18 U.S.C. Sec. 3584(a). Federal courts also generally have
discretion to order that the sentences they impose will run
concurrently with or consecutively to other state sentences that are
anticipated but not yet imposed. See Setser, 132 S. Ct. at 1468.
Exercise of that discretion''.
Reason for Amendment: This amendment responds to a recent Supreme
Court decision that federal courts have discretion to order that the
sentence run consecutively to (or concurrently with) an anticipated,
but not yet imposed, state sentence. See Setser v. United States, 132
S. Ct. 1463, 1468 (2012).
The discretion recognized in Setser for anticipated state sentences
is similar to the discretion that federal courts have under 18 U.S.C.
Sec. 3584 for previously imposed sentences. Under section 3584, a
federal court imposing a sentence generally has discretion to order
that the sentence run consecutively to (or, in the alternative,
concurrently with) a term of imprisonment previously imposed but not
yet discharged. See 18 U.S.C. Sec. 3584(a). Section 5G1.3 (Imposition
of a Sentence on a Defendant Subject to an Undischarged Term of
Imprisonment) provides guidance to the court in determining whether,
and how, to use the discretion under section 3584, i.e., whether the
sentence should run consecutively to (or, in the alternative,
concurrently with) the prior undischarged term of imprisonment.
The amendment amends the background commentary to Sec. 5G1.3 to
include a statement that, in addition to the discretion provided by
section 3584, federal courts also generally have discretion under
Setser to order that the sentences they impose will run consecutively
to or concurrently with other state sentences that are anticipated but
not yet imposed. Determining whether, and how, to use this discretion
will depend on the adequacy of the information available. See Setser,
132 S.Ct. at 1471 n.6 (``Of course, a district court should exercise
the power to impose anticipatory consecutive (or concurrent) sentences
intelligently. In some situations, a district court may have inadequate
information and may forbear, but in other situations, that will not be
the case.''). Adding this statement to the guideline that applies to
the court's discretion under section 3584 is intended to provide
heightened awareness of the court's similar discretion under Setser.
7. Amendment: The Commentary to Sec. 2B1.1 captioned ``Application
Notes'' is amended in Note 15 (as renumbered by Amendment 2) by
striking ``1a(5)'' both places it appears and inserting ``1a(11)''; by
striking ``1a(6)'' both places it appears and inserting ``1a(12)''; by
striking ``1a(20)'' both places it appears and inserting ``1a(28)'';
and by striking ``1a(23)'' both places it appears and inserting
``1a(31)''.
Section 2B2.3(b) is amended by striking paragraph (1) and inserting
the following:
``(1) (Apply the greater) If--
(A) the trespass occurred (i) at a secure government facility; (ii)
at a nuclear energy facility; (iii) on a vessel or aircraft of the
United States; (iv) in a secure area of an airport or a seaport; (v) at
a residence; (vi) at Arlington National Cemetery or a cemetery under
the control of the National Cemetery Administration; (vii) at any
restricted building or grounds; or (viii) on a computer system used (I)
to maintain or operate a critical infrastructure; or (II) by or for a
government entity in furtherance of the administration of justice,
national defense, or national security, increase by 2 levels; or
(B) the trespass occurred at the White House or its grounds, or the
Vice President's official residence or its grounds, increase by 4
levels.''.
The Commentary to Sec. 2B2.3 captioned ``Application Notes'' is
amended in Note 1 by inserting after the paragraph that begins ``
`Protected computer' means'' the following:
`` `Restricted building or grounds' has the meaning given that term
in 18 U.S.C. Sec. 1752.''; and in Note 2 by inserting ``Application of
Subsection (b)(3).--'' at the beginning.
The Notes to the Drug Quantity Table in Sec. 2D1.1(c) are amended
in each of Notes (H) and (I) by striking ``1308.11(d)(30)'' and
inserting ``1308.11(d)(31)''.
The Commentary to Sec. 2J1.2 captioned ``Application Notes'' is
amended in Note 2(A) by striking ``Chapter Three, Part C'' in the
heading and inserting ``Sec. 3C1.1''; and by striking ``Chapter Three,
Part C (Obstruction and Related Adjustments)'' and inserting ``Sec.
3C1.1 (Obstructing or Impeding the Administration of Justice)''.
The Commentary to Sec. 2J1.3 captioned ``Application Notes'' is
amended in Note 2 by striking ``Chapter Three, Part C (Obstruction and
Related Adjustments)'' and inserting ``Sec. 3C1.1 (Obstructing or
Impeding the Administration of Justice)''; and in Note 3 by striking
``Chapter Three, Part C (Obstruction and Related Adjustments)'' and
inserting ``Sec. 3C1.1''.
The Commentary to Sec. 2J1.6 captioned ``Application Notes'' is
amended in Note 2 by striking ``Chapter Three, Part C (Obstruction and
Related Adjustments)'' and inserting ``Sec. 3C1.1 (Obstructing or
Impeding the Administration of Justice)''.
The Commentary to Sec. 2J1.9 captioned ``Application Notes'' is
amended in Note 1 by striking ``Chapter Three, Part C (Obstruction and
Related Adjustments)'' and inserting ``Sec. 3C1.1 (Obstructing or
Impeding the Administration of Justice)''; and in Note 2 by striking
``Chapter Three, Part C (Obstruction and Related Adjustments)'' and
inserting ``Sec. 3C1.1''.
The Commentary to Sec. 4A1.1 captioned ``Application Notes'' is
amended in each of Notes 2 and 3 by striking ``court martial'' and
inserting ``court-martial''.
Section 4A1.2(g) is amended by striking ``court martial'' both
places it appears and inserting ``court-martial''.
Appendix A (Statutory Index) is amended by inserting after the line
referenced to 18 U.S.C. Sec. 38 the following:
``18 U.S.C. Sec. 39A 2A5.2''; in the line referenced to 18 U.S.C.
Sec. 554 by inserting ``2M5.1,'' after ``2B1.5,''; by inserting after
the line referenced to 18 U.S.C. Sec. 1513 the following:
``18 U.S.C. Sec. 1514(c) 2J1.2''; by inserting after the line
referenced to 18 U.S.C. Sec. 1751(e) the following:
``18 U.S.C. Sec. 1752 2A2.4, 2B2.3''; and by inserting after the
line referenced to 19 U.S.C. Sec. 1586(e) the following:
``19 U.S.C. Sec. 1590(d)(1) 2T3.1
19 U.S.C. Sec. 1590(d)(2) 2D1.1''.
Reason for Amendment: This amendment responds to recently enacted
legislation and miscellaneous and technical guideline issues.
Aiming a Laser Pointer at an Aircraft
First, the amendment responds to Section 311 of the FAA
Modernization and Reform Act of 2012, Public Law 112-95 (enacted
February 14, 2012), which established a new criminal offense at 18
U.S.C. 39A (Aiming a laser pointer at an aircraft). The offense applies
to whoever knowingly aims the beam of a laser pointer at an aircraft in
the special aircraft jurisdiction of the United States or at the flight
path of such an aircraft. The statutory maximum term of imprisonment is
five years.
The amendment amends Appendix A (Statutory Index) to reference
section 39A offenses to Sec. 2A5.2 (Interference with Flight Crew
Member or Flight Attendant; Interference with Dispatch, Navigation,
Operation, or Maintenance of Mass Transportation Vehicle). Section
2A5.2 is the most analogous guideline because the offense involves
interference with an aircraft in flight.
[[Page 26434]]
Restraining the Harassment of a Victim or Witness
Second, the amendment responds to section 3(a) of the Child
Protection Act of 2012, Public Law 112-206 (enacted December 7, 2012),
which established a new offense at 18 U.S.C. 1514(c) that makes it a
criminal offense to knowingly and intentionally violate or attempt to
violate an order issued under section 1514 (Civil action to restrain
harassment of a victim or witness). The new offense has a statutory
maximum term of imprisonment of five years.
The amendment amends Appendix A (Statutory Index) to reference
section 1514(c) offenses to Sec. 2J1.2 (Obstruction of Justice).
Section 2J1.2 is the most analogous guideline because the offense
involves interference with judicial proceedings.
Restricted Buildings and Grounds
Third, the amendment responds to the Federal Restricted Buildings
and Grounds Improvement Act of 2011, Public Law 112-98 (enacted March
8, 2012), which amended the criminal offense at 18 U.S.C. Sec. 1752
(Restricted building or grounds). As so amended, the statute defines
``restricted buildings or grounds'' to mean any restricted area (A) of
the White House or its grounds, or the Vice President's official
residence or its grounds; (B) of a building or grounds where the
President or other person protected by the United States Secret Service
is or will be temporarily visiting; or (C) of a building or grounds
restricted in conjunction with an event designated as a special event
of national significance. The statute makes it a crime to enter or
remain; to impede or disrupt the orderly conduct of business or
official functions; to obstruct or impede ingress or egress; or to
engage in any physical violence against any person or property. The Act
did not change the statutory maximum term of imprisonment, which is ten
years if the person used or carried a deadly or dangerous weapon or
firearm or if the offense results in significant bodily injury, and one
year in any other case.
The amendment amends Appendix A (Statutory Index) to reference
section 1752 offenses to Sec. 2A2.4 (Obstructing or Impeding Officers)
and Sec. 2B2.3 (Trespass). These guidelines are most analogous because
the elements of offenses under section 1752 involve either trespass at
certain locations (i.e., locations permanently or temporarily protected
by the Secret Service) or interference with official business at such
locations, or both.
The amendment also amends Sec. 2B2.3(b)(1) to ensure that a
trespass under section 1752 provides a 4-level enhancement if the
trespass occurred at the White House or the Vice President's official
residence, or a 2-level enhancement if the trespass occurred at any
other location permanently or temporarily protected by the Secret
Service. Section 2B2.3(b)(1) provides a 2-level enhancement if the
trespass occurred at locations that involve a significant federal
interest, such as nuclear facilities, airports, and seaports. A
trespass at a location protected by the Secret Service is no less
serious than a trespass at other locations that involve a significant
federal interest and warrants an equivalent enhancement of 2 levels.
Section 2B2.3(b)(1) also provides a 2-level enhancement if the trespass
occurred at a residence. A trespass at the residence of the President
or the Vice President is more serious and poses a greater risk of harm
than a trespass at an ordinary residence and warrants an enhancement of
4 levels.
Aviation Smuggling
Fourth, the amendment responds to the Ultralight Aircraft Smuggling
Prevention Act of 2012, Public Law 112-93 (enacted February 10, 2012),
which amended the criminal offense at 19 U.S.C. Sec. 1590 (Aviation
smuggling) to clarify that the term ``aircraft'' includes ultralight
aircraft and to cover attempts and conspiracies. Section 1590 makes it
unlawful for the pilot of an aircraft to transport merchandise, or for
any individual on board any aircraft to possess merchandise, knowing
that the merchandise will be introduced into the United States contrary
to law. It is also unlawful for a person to transfer merchandise
between an aircraft and a vessel on the high seas or in the customs
waters of the United States unlawfully. The Act did not change the
statutory maximum terms of imprisonment, which are 20 years if any of
the merchandise involved was a controlled substance, see Sec.
1590(d)(2), and five years otherwise, see Sec. 1590(d)(1). The
amendment amends Appendix A (Statutory Index) to reference offenses
under section 1590(d)(1) to Sec. 2T3.1 (Evading Import Duties or
Restrictions (Smuggling); Receiving or Trafficking in Smuggled
Property). In such cases, Sec. 2T3.1 is the most analogous guideline
because the offense involves smuggling. The amendment also amends
Appendix A (Statutory Index) to reference offenses under section
1590(d)(2) to Sec. 2D1.1 (Unlawful Manufacturing, Importing,
Exporting, or Trafficking (Including Possession with Intent to Commit
These Offenses); Attempt or Conspiracy). In such cases, Sec. 2D1.1 is
the most analogous guideline because controlled substances are involved
in these offenses.
Interaction Between Offense Guidelines in Chapter Two, Part J, and
Certain Adjustments in Chapter Three, Part C
Fifth, the amendment responds to an application issue that may
arise in cases in which the defendant is sentenced under an offense
guideline in Chapter Two, Part J (Offenses Involving the Administration
of Justice) and the defendant may also be subject to an adjustment
under Chapter Three, Part C (Obstruction and Related Adjustments).
Specifically, there are application notes in four Chapter Two, Part J
guidelines that, it has been argued, preclude the court from applying
adjustments in Chapter Three, Part C. See, e.g., United States v.
Duong, 665 F.3d 364 (1st Cir. 2012) (observing that, ``according to the
literal terms'' of the application notes, an adjustment under Chapter
Three, Part C `` `does not apply' '', but ``reject[ing] that
premise'').
The amendment amends the relevant application notes in Chapter Two,
Part J (see Sec. Sec. 2J1.2, comment. (n.2(A)); 2J1.3, comment. (n.2);
2J1.6, comment. (n.2); 2J1.9, comment. (n.1)) to clarify the
Commission's intent that they restrict the court from applying Sec.
3C1.1 (Obstructing or Impeding the Administration of Justice) but do
not restrict the court from applying Sec. Sec. 3C1.2, 3C1.3, and
3C1.4. These changes resolve the application issue consistent with
Duong and promote clarity and consistency in the application of these
adjustments.
Export Offenses Under 18 U.S.C. Sec. 554
Sixth, the amendment broadens the range of guidelines to which
export offenses under 18 U.S.C. Sec. 554 (Smuggling goods from the
United States) are referenced. Section 554 makes it unlawful to export
or send from the United States (or attempt to do so) any merchandise,
article, or object contrary to any law or regulation of the United
States. It also makes it unlawful to receive, conceal, buy, sell, or in
any manner facilitate the transportation, concealment, or sale of such
merchandise, article, or object, prior to exportation, knowing the same
to be intended for exportation contrary to any law or regulation of the
United States. Offenses under section 554 have a statutory maximum term
of imprisonment of ten years, and they are referenced in Appendix A
(Statutory Index) to three guidelines: Sec. Sec. 2B1.5 (Theft of,
Damage to, or Destruction of, Cultural Heritage Resources or
Paleontological Resources; Unlawful Sale, Purchase, Exchange,
[[Page 26435]]
Transportation, or Receipt of Cultural Heritage Resources or
Paleontological Resources), 2M5.2 (Exportation of Arms, Munitions, or
Military Equipment or Services Without Required Validated Export
License), and 2Q2.1 (Offenses Involving Fish, Wildlife, and Plants).
The amendment amends Appendix A (Statutory Index) to add Sec.
2M5.1 (Evasion of Export Controls; Financial Transactions with
Countries Supporting International Terrorism) to the list of guidelines
to which offenses under section 554 are referenced. Not all offenses
under section 554 involve munitions, cultural resources, or wildlife,
so a reference to an additional guideline is warranted. For example, a
section 554 offense may be based on the export of ordinary commercial
goods in violation of economic sanctions or on the export of ``dual-
use'' goods (i.e., goods that have both commercial and military
applications). For such cases, the additional reference to Sec. 2M5.1
promotes clarity and consistency in guideline application, and the
penalty structure of Sec. 2M5.1 provides appropriate distinctions
between offenses that violate national security controls and offenses
that do not.
Technical and Stylistic Changes
Finally, the amendment makes certain technical and stylistic
changes to the Guidelines Manual. First, it amends the Commentary to
Sec. 2B1.1 (Theft, Property Destruction, and Fraud) to provide updated
references to the definitions contained in 7 U.S.C. 1a, which were
renumbered by Public Law 111B203 (enacted July 21, 2010). Second, it
amends the Notes to the Drug Quantity Table in Sec. 2D1.1 (Unlawful
Manufacturing, Importing, Exporting, or Trafficking (Including
Possession with Intent to Commit These Offenses); Attempt or
Conspiracy) to provide updated references to the definition of
tetrahydrocannabinols contained in 21 CFR 1308.11(d), which were
renumbered by 75 FR 79296 (December 20, 2010). Third, it makes several
stylistic revisions in the Guidelines Manual to change ``court
martial'' to ``court-martial''. The changes are not substantive.
[FR Doc. 2013-10678 Filed 5-3-13; 8:45 am]
BILLING CODE 2210-40-P
