Civil Monetary Penalty Adjustments for Inflation, 67069-67073 [2018-28141]
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Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Rules and Regulations
Authority: 15 U.S.C. 79; 15 U.S.C. 717–
717z; 16 U.S.C. 791a–828c, 2601–2645; 31
U.S.C. 9701; 42 U.S.C. 7101–7352.
§ 141.14
[Removed]
■ 6. Remove § 141.14.
[FR Doc. 2018–28250 Filed 12–27–18; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
19 CFR Part 4
[CBP Dec. 18–16]
RIN 1651–AB32
Civil Monetary Penalty Adjustments for
Inflation
U.S. Customs and Border
Protection, DHS.
ACTION: Final rule.
AGENCY:
This rule adjusts for inflation
the amounts that U.S. Customs and
Border Protection (CBP) can assess as
civil monetary penalties for the
following two violations—transporting
passengers coastwise for hire by certain
vessels (known as Bowaters vessels) that
do not meet specified conditions; and
employing a vessel in a trade without a
required Certificate of Documentation.
These adjustments are being made in
accordance with the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015 (2015 Act)
which was enacted on November 2,
2015. Other CBP civil penalty amounts
were adjusted pursuant to this 2015 Act
in rule documents published in the
Federal Register on July 1, 2016;
January 27, 2017; December 8, 2017; and
April 2, 2018, but the adjustments for
these two civil penalties were
inadvertently left out of those
documents.
SUMMARY:
This rule is effective on
December 28, 2018. The adjusted
penalty amounts will be applicable for
penalties assessed after December 28,
2018 if the associated violations
occurred after November 2, 2015.
FOR FURTHER INFORMATION CONTACT:
Millie Gleason, Office of Field
Operations, U.S. Customs and Border
Protection. Phone: (202) 325–4291.
SUPPLEMENTARY INFORMATION:
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DATES:
I. Statutory and Regulatory Background
On November 2, 2015, the President
signed into law the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015 (Pub. L. 114–
74 section 701 (Nov. 2, 2015)) (2015
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Act).1 The 2015 Act amended the
Federal Civil Penalties Inflation
Adjustment Act of 1990 (28 U.S.C. 2461
note) (1990 Inflation Adjustment Act) to
improve the effectiveness of civil
monetary penalties and to maintain
their deterrent effect. The 2015 Act
required agencies to: (1) Adjust the level
of civil monetary penalties with an
initial ‘‘catch-up’’ adjustment through
issuance of an interim final rule (IFR)
and (2) make subsequent annual
adjustments for inflation. Through the
‘‘catch-up’’ adjustment, agencies were
required to adjust the maximum
amounts of civil monetary penalties to
more accurately reflect inflation rates.
The 2015 Act directed the Office of
Management and Budget (OMB) to issue
guidance to agencies on implementing
the initial ‘‘catch-up’’ adjustment. The
2015 Act required that agencies publish
their IFRs in the Federal Register no
later than July 1, 2016 and that the
adjusted amounts were to take effect no
later than August 1, 2016.
For the subsequent annual
adjustments, the 2015 Act requires
agencies to increase the penalty
amounts by a cost-of-living adjustment.
The 2015 Act directs OMB to provide
guidance to agencies each year to assist
agencies in making the annual
adjustments. The 2015 Act requires
agencies to make the annual
adjustments no later than January 15 of
each year and to publish the
adjustments in the Federal Register.
The Department of Homeland
Security (DHS) undertook a review of
the civil penalties that DHS and its
components administer to determine
which penalties would need
adjustments. On July 1, 2016, DHS
published an IFR adjusting the civil
monetary penalties with an initial
‘‘catch-up’’ adjustment, as required by
the 2015 Act. See 81 FR 42987. DHS
calculated the adjusted penalties based
upon nondiscretionary provisions in the
2015 Act and upon guidance issued by
OMB on February 24, 2016.2 The
adjusted penalties were effective for
civil penalties assessed after August 1,
2016 (the effective date of the IFR)
where the associated violations
occurred after November 2, 2015 (the
date of enactment of the 2015 Act).3 On
January 27, 2017, DHS published a final
1 The 2015 Act was enacted as part of the
Bipartisan Budget Act of 2015, Public Law 114–74
(Nov. 2, 2015).
2 OMB, Implementation of the Federal Civil
Penalties Inflation Adjustment Act Improvements
Act of 2015, February 24, 2016. https://obamaw
hitehouse.archives.gov/sites/default/files/omb/
memoranda/2016/m-16-06.pdf.
3 DHS published a correction to the IFR on
August 23, 2016 to correct one amendatory
instruction. See 81 FR 57442.
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67069
rule adopting as final the civil monetary
penalty adjustment methodology from
the IFR and making the 2017 annual
inflation adjustment pursuant to the
2015 Act and upon guidance OMB
issued to agencies on December 16,
2016.4 See 82 FR 8571. On April 2, 2018,
DHS published a final rule making the
2018 annual inflation adjustment
pursuant to the 2015 Act and the
guidance OMB issued to agencies on
December 15, 2017.5 See 83 FR 13826.
As discussed in Section II below,
several civil monetary penalties
assessed by CBP and subject to the 2015
Act were inadvertently omitted from
these DHS rulemakings.
II. CBP Penalties
CBP assesses or enforces penalties
under various titles of the United States
Code (U.S.C.) and the Code of Federal
Regulations (CFR). These penalties
include civil monetary penalties for
certain violations of title 8 of the CFR
pursuant to the Immigration and
Nationality Act of 1952,6 as well as
certain civil monetary penalties for
customs violations for laws codified in
title 19 of the U.S.C. and the CFR. CBP
assesses many of the title 19 penalties
under the Tariff Act of 1930, as
amended, and as discussed in the IFR
preamble at 81 FR 42987, the 2015 Act
specifically exempts Tariff Act penalties
from the inflation adjustment
requirements in the 2015 Act. For that
reason, DHS did not list those penalties
in the tables of CBP penalty adjustments
in the DHS rulemakings. There are also
various other monetary penalties found
throughout the U.S.C. and CFR which
CBP may seek to issue or enforce but
which were not included in the tables
because they fall within the purview of
4 OMB, Implementation of the 2017 annual
adjustment pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of
2015, December 16, 2016. https://obama
whitehouse.archives.gov/sites/default/files/omb/
memoranda/2017/m-17-11_0.pdf.
5 OMB, Implementation of Penalty Inflation
Adjustments for 2018, Pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements
Act of 2015, December 15, 2017. https://
www.whitehouse.gov/wp-content/uploads/2017/11/
M-18-03.pdf.
6 Public Law 82–414, as amended (INA). The INA
contains provisions that impose penalties on
persons, including carriers and aliens, who violate
specified provisions of the INA. While CBP is
responsible for enforcing various provisions of the
INA and assessing penalties for violations of those
provisions, all the penalty amounts CBP can assess
for violations of the INA are set forth in one section
of title 8 of the CFR—8 CFR 280.53. For a complete
list of the INA sections for which penalties are
assessed, in addition to a brief description of each
violation, see the IFR preamble at 81 FR 42989–
42990.
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another Department or Agency for
purposes of the 2015 Act.7
Several non-Tariff Act penalties that
are assessed by CBP were inadvertently
omitted from the DHS rulemakings. On
December 8, 2017, CBP published a
rule, correcting for three penalties that
had been omitted from the DHS
rulemakings for the following three
violations—transporting passengers
between coastwise points in the United
States by a non-coastwise qualified
vessel; towing a vessel between
coastwise points in the United States by
a non-coastwise qualified vessel; and
dealing in or using an empty stamped
imported liquor container after it has
already been used once. See 82 FR
57821.
However, two additional non-Tariff
Act penalties that are assessed by CBP
were inadvertently omitted from the
DHS rulemakings and the CBP
correction rulemaking. The first is a
penalty set forth at 46 U.S.C. 12118(f)(3)
for transporting passengers coastwise for
hire by certain vessels (known as
Bowaters vessels) that do not meet
specified conditions. This penalty is
incurred if a vessel that is used
primarily in manufacturing or mineral
industries and owned by a Bowaters
corporation transports passengers for
hire except as a service for a parent or
subsidiary of the corporation owning
the vessel or under a bareboat charter to
a corporation otherwise qualifying as a
citizen of the United States.8 The
conditions under which a vessel
identified as a Bowaters vessel under
the authority of 46 U.S.C. 12118 may
transport passengers coastwise for hire
are detailed in 46 U.S.C. 12118(d)(2)
and 19 CFR 4.80(d). The penalty amount
is only set forth in the statute and is not
reflected in the CBP regulations. The
second is a penalty for employing a
vessel in a trade without a required
Certificate of Documentation pursuant
to 19 U.S.C. 1706a and 19 CFR 4.80(i).
A Certificate of Documentation is form
CG–1270 issued by the U.S. Coast
Guard. This form is required for the
7 For example, CBP may enforce the Clean
Diamond Trade Act penalty set forth in 19 U.S.C.
3907, which falls within the purview of the
Department of the Treasury. See 31 CFR part 501,
app. A.
8 The term ‘‘Bowaters corporation’’ is defined in
46 U.S.C. 12118(a)(1). It means a corporation that
has filed a certificate under oath with the Secretary
of Homeland Security stating that the corporation
meets the conditions set forth in 46 U.S.C.
12118(a)(1)(A)–(F). Among other things, the
corporation must be incorporated under the laws of
the United States or a State, the majority of the
officers and directors must be citizens of the United
States, and it must buy or produce in the United
States at least 75 percent of the raw materials used
or sold in its operations.
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operation of a vessel in certain trades.
See 19 CFR 4.0(c) and 46 CFR part 67.
This final rule adjusts these penalty
amounts using the same civil monetary
penalty adjustment methodology that
DHS announced in the IFR (81 FR
42987) and finalized in the DHS final
rule (82 FR 8571), and detailed below.
III. Inflation Adjustment Methodology
Required by 2015 Act
A. Overview
The 2015 Act provides a new method
for calculating inflation adjustments.
The new method differs substantially
from the methods that agencies used in
the past when conducting inflation
adjustments pursuant to the 1990
Inflation Adjustment Act. The new
method is intended to more accurately
reflect inflation. Previously, when
agencies conducted adjustments to civil
penalties, they did so under rules that
required significant rounding of figures.
For example, an agency would round a
penalty increase that was greater than
$1,000, but less than or equal to
$10,000, to the nearest multiple of
$1,000. While this allowed penalties to
be kept at round numbers, it meant that
agencies would often not increase
penalties at all if the inflation factor was
not large enough. Furthermore,
increases to penalties were capped at 10
percent, which meant that longer
periods without an inflation adjustment
could cause a penalty to rapidly lose
value in real terms. Over time, the
formula used in the 1990 Inflation
Adjustment Act calculations frequently
caused penalties to lose value relative to
actual inflation. The 2015 Act removed
these rounding rules, and instead
instructs agencies to round penalties to
the nearest $1. While this creates
penalty values that are no longer round
numbers, it does ensure that agencies
will increase penalties each year to a
figure commensurate with the actual
calculated inflation.
To better reflect the original impact of
civil penalties, the 2015 Act ‘‘resets’’ the
inflation calculations by excluding prior
inflationary adjustments under the
Inflation Adjustment Act. To do this,
the 2015 Act requires agencies to
identify, for each penalty, the year that
Congress originally enacted the
maximum penalty level/range of
minimum and maximum penalty levels
or the year that the agency last adjusted
the penalty amount other than pursuant
to the Inflation Adjustment Act, and the
corresponding penalty amount(s). The
2015 Act then requires agencies to
perform an initial ‘‘catch-up’’
adjustment, using the original amounts
of civil penalties as a baseline, so that
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the 2016 penalty levels are equal, in real
terms, to the penalty amounts as they
were originally established. The 2015
Act also requires agencies to make
subsequent annual adjustments to
increase the penalty amounts by a costof-living adjustment.
B. Catch-Up Adjustment
This section sets forth the initial
‘‘catch-up’’ adjustment for the two civil
monetary penalties assessed by CBP that
were inadvertently omitted from the
DHS rulemakings and CBP correction
rulemaking. The catch-up adjustments
for these two penalties are listed in
Table 1 below. This table shows how
DHS would have initially increased the
penalties pursuant to the 2015 Act. The
table contains the following
information:
• In the first column (penalty name),
we provide a description of the penalty.
• In the second column (citation), we
provide the statutory cite from the
United States Code (U.S.C.) and the
regulatory cite from the Code of Federal
Regulations (CFR).
• In the third column (current
penalty), we list the existing penalty in
effect on November 2, 2015.
• In the fourth column (baseline
penalty (year)), we provide the amount
and year of the penalty as enacted by
Congress or as last changed through a
mechanism other than pursuant to the
Inflation Adjustment Act, whichever is
later.
• In the fifth column (2016
multiplier), we list the multiplier used
to adjust the penalty pursuant to the
initial OMB catch-up guidance. The
multiplier is determined by the year of
enactment or last adjustment of the
penalty. The multiplier is based upon
the Consumer Price Index (CPI–U) for
the month of October 2015, not
seasonally adjusted.
• In the sixth column (preliminary
new penalty), we list the amount
obtained by multiplying the Baseline
Penalty from column 4 with the
Multiplier from column 5. This amount
will be the catch-up adjustment amount,
if, in accordance with the 2015 Act, this
level does not increase penalty levels by
more than 150 percent of the
corresponding levels in effect on
November 2, 2015.
• In the seventh column (adjusted
2016 penalty), we provide the number
for the penalty as it would have been
adjusted for 2016. To derive this
number, we compare the preliminary
new penalty with the current penalty
from column 3. The adjusted new
penalty is the lesser of either the
preliminary new penalty or an amount
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equal to 150 percent more than the
current penalty.
TABLE 1—U.S. CUSTOMS AND BORDER PROTECTION CIVIL PENALTIES INITIAL CATCH-UP ADJUSTMENTS
Penalty name
Current
penalty
Citation
Penalty for transporting passengers
coastwise for hire by certain vessels (known as Bowaters vessels) that do not meet specified
conditions.
Penalty for employing a vessel in a
trade without a required Certificate of Documentation.
Baseline
penalty *
(year)
Preliminary
new penalty
[2016
multiplier ×
baseline
penalty]
2016
Multiplier **
Adjusted 2016
penalty [increase
capped at
150%
more than
current penalty]
46 U.S.C. 12118(f)(3)
$200
$200 (1958)
8.22969
$1,646
$500
19 U.S.C. 1706a, 19
CFR 4.80(i).
500
$500 (1980)
2.80469
1,402
1,250
* The amount of the penalty and the year when the penalty was established or last adjusted in statute or regulation other than pursuant to the
Inflation Adjustment Act of 1990.
** OMB, Implementation of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Table A: 2016 Civil Monetary Penalty Catch-Up Adjustment Multiplier by Calendar Year, February 24, 2016. https://obamawhitehouse.archives.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
C. 2017 Adjustments
rulemakings and CBP correction
rulemaking, pursuant to the 2015 Act
and the guidance OMB issued to
agencies on December 16, 2016.9 In
Table 2 below, we show: (1) The civil
penalty (or penalties) name, (2) the
penalty statutory and/or regulatory
This table shows how DHS would
have made the 2017 annual inflation
adjustment for the two civil monetary
penalties assessed by CBP that were
inadvertently omitted from the DHS
citation, (3) the penalty amount as it
would have been adjusted in 2016 (See
Table 1), (4) the cost-of-living
adjustment multiplier for 2017 that
OMB provided in its December 16, 2016
guidance, and (5) the 2017 adjusted
penalty.
TABLE 2— U.S. CUSTOMS AND BORDER PROTECTION CIVIL PENALTIES 2017 ADJUSTMENTS
Adjusted 2016
penalty
(see Table 1)
2017
Multiplier *
Adjusted 2017
penalty
Penalty name
Citation
Penalty for transporting passengers coastwise for hire by certain
vessels (known as Bowaters vessels) that do not meet specified
conditions.
Penalty for employing a vessel in a trade without a required Certificate of Documentation.
46 U.S.C. 12118(f)(3) ..
$500
1.01636
$508
19 U.S.C. 1706a, 19
CFR 4.80(i).
1,250
1.01636
1,270
* OMB, Implementation of the 2017 annual adjustment pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of
2015, December 16, 2016. https://obamawhitehouse.archives.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf.
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D. 2018 Adjustments
This final rule also makes the 2018
annual inflation adjustment pursuant to
the 2015 Act and the guidance OMB
issued to agencies on December 15,
2017.10 Pursuant to 28 U.S.C. 2461 note
sec. 6, as amended by the 2015 Act, the
penalty amounts adjusted by this final
rule will be applicable for penalties
assessed after December 28, 2018 where
the associated violation occurred after
November 2, 2015 (i.e., the date the
9 See
footnote 4.
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2015 Act was signed into law).
Consistent with OMB guidance, the
2015 Act does not change previously
assessed penalties that the agency is
actively collecting or has collected.
In Table 3 below, we show: (1) The
civil penalty (or penalties) name, (2) the
penalty statutory and/or regulatory
citation, (3) the penalty amount as it
would have been adjusted in 2017 (See
Table 2), (4) the cost-of-living
adjustment multiplier for 2018 that
10 See
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OMB provided in its December 15, 2017
guidance, and (5) the new 2018 adjusted
penalty.
Additionally, we have made
conforming edits to the regulatory text
for the new adjusted penalty amounts in
19 CFR 4.80(i). Because the 46 U.S.C.
12118 penalty is not included in 19 CFR
4.80(d), there are no conforming edits to
be made to the regulatory text. However,
this penalty is listed in Table 3 for
informational purposes.
footnote 5.
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TABLE 3—U.S. CUSTOMS AND BORDER PROTECTION CIVIL PENALTIES 2018 ADJUSTMENTS
Adjusted 2017
penalty
(see Table 2)
2018
Multiplier *
New penalty
as adjusted by
this final rule
Penalty name
Citation
Penalty for transporting passengers coastwise for hire by certain vessels (known as Bowaters vessels) that do not meet
specified conditions.
Penalty for employing a vessel in a trade without a required
Certificate of Documentation.
46 U.S.C. ............................
12118(f)(3) ..........................
$508
1.02041
** $518
19 U.S.C. 1706a, 19 CFR
4.80(i).
1,270
1.02041
1,296
* OMB, Implementation of Penalty Inflation Adjustments for 2018, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, December 15, 2017. https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
** No applicable conforming edit to regulatory text.
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IV. Administrative Procedure Act
The Administrative Procedure Act
(APA) generally requires agencies to
publish a notice of proposed rulemaking
in the Federal Register (5 U.S.C. 553(b))
and to provide interested persons with
the opportunity to submit comments (5
U.S.C. 553(c)). The APA also requires
agencies to provide a delayed effective
date (of not less than 30 days) for
substantive rules. 5 U.S.C. 553(d). The
2015 Act, however, specifically
instructed that agencies are to make the
required annual adjustments
notwithstanding section 553 of title 5 of
the U.S.C.
DHS is promulgating this final rule to
ensure that the amounts for civil
penalties that CBP assesses or enforces
that were inadvertently omitted from
the DHS rulemakings reflect the
statutorily mandated ranges as adjusted
for inflation. The 2015 Act provides a
clear nondiscretionary formula for
adjustment of the civil penalties; DHS
and CBP have been charged only with
performing ministerial computations to
determine the amounts of adjustments
for inflation to civil monetary penalties.
Additionally, although the 2015 Act
requires publication of an IFR to take
effect not later than August 1, 2016, that
date has passed and publishing a
separate IFR to account for these
inadvertently omitted penalty
adjustments would cause unnecessary
delay. Further, this final rule merely
applies the adjustment methodology
that DHS provided for public comment
in the 2016 IFR and finalized in the
2017 final rule. DHS finds that it is
unnecessary to seek further public
comment regarding the application of
the finalized methodology to these two
penalties. For these reasons, and as
specified in the 2015 Act, DHS finds
good cause to promulgate these CBP
civil monetary penalty adjustments as a
final rule and finds that the prior public
notice-and-comment procedures and
delayed effective date requirements of
the APA are unnecessary and do not
apply to this rule.
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As described in Section I above, the
2015 Act requires agencies to make
annual adjustments to civil monetary
penalties no later than January 15 of
each year and to publish the
adjustments in the Federal Register.
DHS will make future annual inflation
adjustments required pursuant to the
2015 Act by final rule notwithstanding
the notice-and-comment and delayed
effective date requirements of the APA,
as required by the 2015 Act. For future
annual adjustments, DHS will update
the penalty amounts by applying a costof-living adjustment multiplier pursuant
to OMB guidance. DHS will publish a
final rule that provides a table with the
adjusted penalty amounts and that
updates the numbers in the regulatory
text accordingly. DHS will incorporate
the two CBP penalties adjusted in this
final rule into such future annual
adjustment final rules.
V. Regulatory Analyses
A. Executive Orders 12866, 13563, and
13771
Executive Orders 12866 (‘‘Regulatory
Planning and Review’’) and 13563
(‘‘Improving Regulation and Regulatory
Review’’) direct agencies to assess the
costs and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. Executive
Order 13771 (‘‘Reducing Regulation and
Controlling Regulatory Costs’’) directs
agencies to reduce regulation and
control regulatory costs and provides
that ‘‘for every one new regulation
issued, at least two prior regulations be
identified for elimination, and that the
cost of planned regulations be prudently
managed and controlled through a
budgeting process.’’
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OMB has not designated this rule a
significant regulatory action under
section 3(f) of Executive Order 12866.
Accordingly, OMB has not reviewed it.
As this rule is not a significant
regulatory action it is not subject to the
requirements of Executive Order 13771.
See OMB’s Memorandum, ‘‘Guidance
Implementing Executive Order 13771,
Titled ‘Reducing Regulation and
Controlling Regulatory Costs’ ’’ (April 5,
2017) at Q2.
This final rule makes
nondiscretionary adjustments to
existing civil monetary penalties in
accordance with the 2015 Act and OMB
guidance.11 DHS therefore did not
consider alternatives and does not have
the flexibility to alter the adjustments of
the civil monetary penalty amounts as
provided in this rule. To the extent this
final rule increases civil monetary
penalties, it would result in an increase
in transfers from persons or entities
assessed a civil monetary penalty to the
government.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act applies
only to rules for which an agency
publishes a notice of proposed
rulemaking pursuant to 5 U.S.C. 553(b).
See 5 U.S.C. 601–612. The Regulatory
Flexibility Act does not apply to this
final rule because a notice of proposed
rulemaking was not required for the
reasons stated above.
C. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995, 2 U.S.C. 1531–1538, requires
Federal agencies to assess the effects of
their discretionary regulatory actions. In
particular, the Act addresses actions
that may result in the expenditure by a
State, local, or Tribal government, in the
aggregate, or by the private sector of
$100,000,000 (adjusted for inflation) or
more in any one year. This final rule
will not result in such an expenditure.
11 See
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cargo are subject to seizure and
forfeiture.
D. Paperwork Reduction Act
The provisions of the Paperwork
Reduction Act of 1995, 44 U.S.C.
chapter 35, and its implementing
regulations, 5 CFR part 1320, do not
apply to this final rule, because this
final rule does not trigger any new or
revised recordkeeping or reporting.
Claire M. Grady,
Under Secretary for Management and Senior
Official Performing the Duties of the Deputy
Secretary.
[FR Doc. 2018–28141 Filed 12–27–18; 8:45 am]
BILLING CODE 9111–14–P
VI. Signing Authority
The signing authority for this
document falls under 19 CFR 0.2(a).
Accordingly, this document is signed by
the Secretary of Homeland Security.
PENSION BENEFIT GUARANTY
CORPORATION
List of Subjects in 19 CFR Part 4
RIN 1212–AB45
Exports, Freight, Harbors, Maritime
carriers, Oil pollution, Reporting and
recordkeeping requirements, Vessels.
Adjustment of Civil Penalties for
Inflation
For the reasons stated in the
preamble, CBP amends 19 CFR part 4 as
follows:
PART 4—VESSELS IN FOREIGN AND
DOMESTIC TRADES
1. The authority citation for part 4
continues to read in part as follows:
■
Authority: 5 U.S.C. 301; 19 U.S.C. 66,
1431, 1433, 1434, 1624, 2071 note; 46 U.S.C.
501, 60105.
*
*
*
*
Sections 4.80, 4.80a, and 4.80b also issued
under 19 U.S.C. 1706a; 28 U.S.C. 2461 note;
46 U.S.C. 12112, 12117, 12118, 50501–55106,
55107, 55108, 55110, 55114, 55115, 55116,
55117, 55119, 56101, 55121, 56101, 57109;
Pub. L. 108–7, Division B, Title II, § 211;
*
■
*
*
*
*
2. Revise § 4.80(i) to read as follows:
§ 4.80 Vessels entitled to engage in
coastwise trade.
amozie on DSK3GDR082PROD with RULES
*
*
*
*
*
(i) Any vessel, entitled to be
documented and not so documented,
employed in a trade for which a
Certificate of Documentation is issued
under the vessel documentation laws
(see § 4.0(c)), other than a trade covered
by a registry, is liable to a civil penalty
of $500 for each port at which it arrives
without the proper Certificate of
Documentation on or before November
2, 2015, and $1296 for each port at
which it arrives without the proper
Certificate of Documentation after
November 2, 2015 (19 U.S.C. 1706a, as
adjusted by the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015). If such a vessel has on
board any foreign merchandise (sea
stores excepted), or any domestic
taxable alcoholic beverages, on which
the duty and taxes have not been paid
or secured to be paid, the vessel and its
VerDate Sep<11>2014
16:02 Dec 27, 2018
Jkt 247001
Pension Benefit Guaranty
Corporation.
ACTION: Final rule.
AGENCY:
Amendments to the Regulations
*
29 CFR Parts 4071 and 4302
The Pension Benefit Guaranty
Corporation is required to amend its
regulations annually to adjust for
inflation the maximum civil penalty for
failure to provide certain notices or
other material information and for
failure to provide certain multiemployer
plan notices.
DATES: Effective date: This rule is
effective on December 28, 2018.
Applicability date: The increases in
the civil monetary penalties under
sections 4071 and 4302 of the Employee
Retirement Income Security Act
provided for in this rule apply to such
penalties assessed after December 28,
2018.
FOR FURTHER INFORMATION CONTACT:
Stephanie Cibinic, Deputy Assistant
General Counsel for Regulatory Affairs
(cibinic.stephanie@pbgc.gov), Office of
the General Counsel, Pension Benefit
Guaranty Corporation, 1200 K Street
NW, Washington, DC 20005–4026; 202–
326–4400 extension 6352. (TTY users
may call the Federal relay service tollfree at 800–877–8339 and ask to be
connected to 202–326–4400 extension
6352.)
SUMMARY:
SUPPLEMENTARY INFORMATION:
Executive Summary
Purpose of the Regulatory Action
This rule is needed to carry out the
requirements of the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015 and Office of
Management and Budget guidance M–
19–04. The rule adjusts, as required for
2019, the maximum civil penalties
under 29 CFR part 4071 and 29 CFR part
4302 that the Pension Benefit Guaranty
Corporation (PBGC) may assess for
failure to provide certain notices or
PO 00000
Frm 00041
Fmt 4700
Sfmt 4700
67073
other material information and certain
multiemployer plan notices.
PBGC’s legal authority for this action
comes from the Federal Civil Penalties
Inflation Adjustment Act of 1990 as
amended by the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015 and from sections
4002(b)(3), 4071, and 4302 of the
Employee Retirement Income Security
Act of 1974 (ERISA).
Major Provisions of the Regulatory
Action
This rule adjusts as required by law
the maximum civil penalties that PBGC
may assess under sections 4071 and
4302 of ERISA. The new maximum
amounts are $2,194 for section 4071
penalties and $292 for section 4302
penalties.
Background
PBGC administers title IV of ERISA.
Title IV has two provisions that
authorize PBGC to assess civil monetary
penalties.1 Section 4302, added to
ERISA by the Multiemployer Pension
Plan Amendments Act of 1980,
authorizes PBGC to assess a civil
penalty of up to $100 a day for failure
to provide a notice under subtitle E of
title IV of ERISA (dealing with
multiemployer plans). Section 4071,
added to ERISA by the Omnibus Budget
Reconciliation Act of 1987, authorizes
PBGC to assess a civil penalty of up to
$1,000 a day for failure to provide a
notice or other material information
under subtitles A, B, and C of title IV
and sections 303(k)(4) and 306(g)(4) of
title I of ERISA.
Adjustment of Civil Penalties
On November 2, 2015, the President
signed into law the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015,2 which
requires agencies to adjust civil
monetary penalties for inflation and to
publish the adjustments in the Federal
Register. An initial adjustment was
required to be made by interim final
rule published by July 1, 2016, and
effective by August 1, 2016. Subsequent
adjustments must be published by
January 15 each year after 2016.
On December 14, 2018, the Office of
Management and Budget issued
1 Under the Federal Civil Penalties Inflation
Adjustment Act of 1990, a penalty is a civil
monetary penalty if (among other things) it is for
a specific monetary amount or has a maximum
amount specified by Federal law. Title IV also
provides (in section 4007) for penalties for late
payment of premiums, but those penalties are
neither in a specified amount nor subject to a
specified maximum amount.
2 Sec. 701, Public Law 114–74, 129 Stat. 599–601
(Bipartisan Budget Act of 2015).
E:\FR\FM\28DER1.SGM
28DER1
]]>Agencies
[Federal Register Volume 83, Number 248 (Friday, December 28, 2018)]
[Rules and Regulations]
[Pages 67069-67073]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28141]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
19 CFR Part 4
[CBP Dec. 18-16]
RIN 1651-AB32
Civil Monetary Penalty Adjustments for Inflation
AGENCY: U.S. Customs and Border Protection, DHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule adjusts for inflation the amounts that U.S. Customs
and Border Protection (CBP) can assess as civil monetary penalties for
the following two violations--transporting passengers coastwise for
hire by certain vessels (known as Bowaters vessels) that do not meet
specified conditions; and employing a vessel in a trade without a
required Certificate of Documentation. These adjustments are being made
in accordance with the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015 (2015 Act) which was enacted on November 2,
2015. Other CBP civil penalty amounts were adjusted pursuant to this
2015 Act in rule documents published in the Federal Register on July 1,
2016; January 27, 2017; December 8, 2017; and April 2, 2018, but the
adjustments for these two civil penalties were inadvertently left out
of those documents.
DATES: This rule is effective on December 28, 2018. The adjusted
penalty amounts will be applicable for penalties assessed after
December 28, 2018 if the associated violations occurred after November
2, 2015.
FOR FURTHER INFORMATION CONTACT: Millie Gleason, Office of Field
Operations, U.S. Customs and Border Protection. Phone: (202) 325-4291.
SUPPLEMENTARY INFORMATION:
I. Statutory and Regulatory Background
On November 2, 2015, the President signed into law the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub.
L. 114-74 section 701 (Nov. 2, 2015)) (2015 Act).\1\ The 2015 Act
amended the Federal Civil Penalties Inflation Adjustment Act of 1990
(28 U.S.C. 2461 note) (1990 Inflation Adjustment Act) to improve the
effectiveness of civil monetary penalties and to maintain their
deterrent effect. The 2015 Act required agencies to: (1) Adjust the
level of civil monetary penalties with an initial ``catch-up''
adjustment through issuance of an interim final rule (IFR) and (2) make
subsequent annual adjustments for inflation. Through the ``catch-up''
adjustment, agencies were required to adjust the maximum amounts of
civil monetary penalties to more accurately reflect inflation rates.
The 2015 Act directed the Office of Management and Budget (OMB) to
issue guidance to agencies on implementing the initial ``catch-up''
adjustment. The 2015 Act required that agencies publish their IFRs in
the Federal Register no later than July 1, 2016 and that the adjusted
amounts were to take effect no later than August 1, 2016.
---------------------------------------------------------------------------
\1\ The 2015 Act was enacted as part of the Bipartisan Budget
Act of 2015, Public Law 114-74 (Nov. 2, 2015).
---------------------------------------------------------------------------
For the subsequent annual adjustments, the 2015 Act requires
agencies to increase the penalty amounts by a cost-of-living
adjustment. The 2015 Act directs OMB to provide guidance to agencies
each year to assist agencies in making the annual adjustments. The 2015
Act requires agencies to make the annual adjustments no later than
January 15 of each year and to publish the adjustments in the Federal
Register.
The Department of Homeland Security (DHS) undertook a review of the
civil penalties that DHS and its components administer to determine
which penalties would need adjustments. On July 1, 2016, DHS published
an IFR adjusting the civil monetary penalties with an initial ``catch-
up'' adjustment, as required by the 2015 Act. See 81 FR 42987. DHS
calculated the adjusted penalties based upon nondiscretionary
provisions in the 2015 Act and upon guidance issued by OMB on February
24, 2016.\2\ The adjusted penalties were effective for civil penalties
assessed after August 1, 2016 (the effective date of the IFR) where the
associated violations occurred after November 2, 2015 (the date of
enactment of the 2015 Act).\3\ On January 27, 2017, DHS published a
final rule adopting as final the civil monetary penalty adjustment
methodology from the IFR and making the 2017 annual inflation
adjustment pursuant to the 2015 Act and upon guidance OMB issued to
agencies on December 16, 2016.\4\ See 82 FR 8571. On April 2, 2018, DHS
published a final rule making the 2018 annual inflation adjustment
pursuant to the 2015 Act and the guidance OMB issued to agencies on
December 15, 2017.\5\ See 83 FR 13826.
---------------------------------------------------------------------------
\2\ OMB, Implementation of the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015, February 24, 2016. https://obamawhitehouse.archives.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
\3\ DHS published a correction to the IFR on August 23, 2016 to
correct one amendatory instruction. See 81 FR 57442.
\4\ OMB, Implementation of the 2017 annual adjustment pursuant
to the Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015, December 16, 2016. https://obamawhitehouse.archives.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf.
\5\ OMB, Implementation of Penalty Inflation Adjustments for
2018, Pursuant to the Federal Civil Penalties Inflation Adjustment
Act Improvements Act of 2015, December 15, 2017. https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
---------------------------------------------------------------------------
As discussed in Section II below, several civil monetary penalties
assessed by CBP and subject to the 2015 Act were inadvertently omitted
from these DHS rulemakings.
II. CBP Penalties
CBP assesses or enforces penalties under various titles of the
United States Code (U.S.C.) and the Code of Federal Regulations (CFR).
These penalties include civil monetary penalties for certain violations
of title 8 of the CFR pursuant to the Immigration and Nationality Act
of 1952,\6\ as well as certain civil monetary penalties for customs
violations for laws codified in title 19 of the U.S.C. and the CFR. CBP
assesses many of the title 19 penalties under the Tariff Act of 1930,
as amended, and as discussed in the IFR preamble at 81 FR 42987, the
2015 Act specifically exempts Tariff Act penalties from the inflation
adjustment requirements in the 2015 Act. For that reason, DHS did not
list those penalties in the tables of CBP penalty adjustments in the
DHS rulemakings. There are also various other monetary penalties found
throughout the U.S.C. and CFR which CBP may seek to issue or enforce
but which were not included in the tables because they fall within the
purview of
[[Page 67070]]
another Department or Agency for purposes of the 2015 Act.\7\
---------------------------------------------------------------------------
\6\ Public Law 82-414, as amended (INA). The INA contains
provisions that impose penalties on persons, including carriers and
aliens, who violate specified provisions of the INA. While CBP is
responsible for enforcing various provisions of the INA and
assessing penalties for violations of those provisions, all the
penalty amounts CBP can assess for violations of the INA are set
forth in one section of title 8 of the CFR--8 CFR 280.53. For a
complete list of the INA sections for which penalties are assessed,
in addition to a brief description of each violation, see the IFR
preamble at 81 FR 42989-42990.
\7\ For example, CBP may enforce the Clean Diamond Trade Act
penalty set forth in 19 U.S.C. 3907, which falls within the purview
of the Department of the Treasury. See 31 CFR part 501, app. A.
---------------------------------------------------------------------------
Several non-Tariff Act penalties that are assessed by CBP were
inadvertently omitted from the DHS rulemakings. On December 8, 2017,
CBP published a rule, correcting for three penalties that had been
omitted from the DHS rulemakings for the following three violations--
transporting passengers between coastwise points in the United States
by a non-coastwise qualified vessel; towing a vessel between coastwise
points in the United States by a non-coastwise qualified vessel; and
dealing in or using an empty stamped imported liquor container after it
has already been used once. See 82 FR 57821.
However, two additional non-Tariff Act penalties that are assessed
by CBP were inadvertently omitted from the DHS rulemakings and the CBP
correction rulemaking. The first is a penalty set forth at 46 U.S.C.
12118(f)(3) for transporting passengers coastwise for hire by certain
vessels (known as Bowaters vessels) that do not meet specified
conditions. This penalty is incurred if a vessel that is used primarily
in manufacturing or mineral industries and owned by a Bowaters
corporation transports passengers for hire except as a service for a
parent or subsidiary of the corporation owning the vessel or under a
bareboat charter to a corporation otherwise qualifying as a citizen of
the United States.\8\ The conditions under which a vessel identified as
a Bowaters vessel under the authority of 46 U.S.C. 12118 may transport
passengers coastwise for hire are detailed in 46 U.S.C. 12118(d)(2) and
19 CFR 4.80(d). The penalty amount is only set forth in the statute and
is not reflected in the CBP regulations. The second is a penalty for
employing a vessel in a trade without a required Certificate of
Documentation pursuant to 19 U.S.C. 1706a and 19 CFR 4.80(i). A
Certificate of Documentation is form CG-1270 issued by the U.S. Coast
Guard. This form is required for the operation of a vessel in certain
trades. See 19 CFR 4.0(c) and 46 CFR part 67.
---------------------------------------------------------------------------
\8\ The term ``Bowaters corporation'' is defined in 46 U.S.C.
12118(a)(1). It means a corporation that has filed a certificate
under oath with the Secretary of Homeland Security stating that the
corporation meets the conditions set forth in 46 U.S.C.
12118(a)(1)(A)-(F). Among other things, the corporation must be
incorporated under the laws of the United States or a State, the
majority of the officers and directors must be citizens of the
United States, and it must buy or produce in the United States at
least 75 percent of the raw materials used or sold in its
operations.
---------------------------------------------------------------------------
This final rule adjusts these penalty amounts using the same civil
monetary penalty adjustment methodology that DHS announced in the IFR
(81 FR 42987) and finalized in the DHS final rule (82 FR 8571), and
detailed below.
III. Inflation Adjustment Methodology Required by 2015 Act
A. Overview
The 2015 Act provides a new method for calculating inflation
adjustments. The new method differs substantially from the methods that
agencies used in the past when conducting inflation adjustments
pursuant to the 1990 Inflation Adjustment Act. The new method is
intended to more accurately reflect inflation. Previously, when
agencies conducted adjustments to civil penalties, they did so under
rules that required significant rounding of figures. For example, an
agency would round a penalty increase that was greater than $1,000, but
less than or equal to $10,000, to the nearest multiple of $1,000. While
this allowed penalties to be kept at round numbers, it meant that
agencies would often not increase penalties at all if the inflation
factor was not large enough. Furthermore, increases to penalties were
capped at 10 percent, which meant that longer periods without an
inflation adjustment could cause a penalty to rapidly lose value in
real terms. Over time, the formula used in the 1990 Inflation
Adjustment Act calculations frequently caused penalties to lose value
relative to actual inflation. The 2015 Act removed these rounding
rules, and instead instructs agencies to round penalties to the nearest
$1. While this creates penalty values that are no longer round numbers,
it does ensure that agencies will increase penalties each year to a
figure commensurate with the actual calculated inflation.
To better reflect the original impact of civil penalties, the 2015
Act ``resets'' the inflation calculations by excluding prior
inflationary adjustments under the Inflation Adjustment Act. To do
this, the 2015 Act requires agencies to identify, for each penalty, the
year that Congress originally enacted the maximum penalty level/range
of minimum and maximum penalty levels or the year that the agency last
adjusted the penalty amount other than pursuant to the Inflation
Adjustment Act, and the corresponding penalty amount(s). The 2015 Act
then requires agencies to perform an initial ``catch-up'' adjustment,
using the original amounts of civil penalties as a baseline, so that
the 2016 penalty levels are equal, in real terms, to the penalty
amounts as they were originally established. The 2015 Act also requires
agencies to make subsequent annual adjustments to increase the penalty
amounts by a cost-of-living adjustment.
B. Catch-Up Adjustment
This section sets forth the initial ``catch-up'' adjustment for the
two civil monetary penalties assessed by CBP that were inadvertently
omitted from the DHS rulemakings and CBP correction rulemaking. The
catch-up adjustments for these two penalties are listed in Table 1
below. This table shows how DHS would have initially increased the
penalties pursuant to the 2015 Act. The table contains the following
information:
In the first column (penalty name), we provide a
description of the penalty.
In the second column (citation), we provide the statutory
cite from the United States Code (U.S.C.) and the regulatory cite from
the Code of Federal Regulations (CFR).
In the third column (current penalty), we list the
existing penalty in effect on November 2, 2015.
In the fourth column (baseline penalty (year)), we provide
the amount and year of the penalty as enacted by Congress or as last
changed through a mechanism other than pursuant to the Inflation
Adjustment Act, whichever is later.
In the fifth column (2016 multiplier), we list the
multiplier used to adjust the penalty pursuant to the initial OMB
catch-up guidance. The multiplier is determined by the year of
enactment or last adjustment of the penalty. The multiplier is based
upon the Consumer Price Index (CPI-U) for the month of October 2015,
not seasonally adjusted.
In the sixth column (preliminary new penalty), we list the
amount obtained by multiplying the Baseline Penalty from column 4 with
the Multiplier from column 5. This amount will be the catch-up
adjustment amount, if, in accordance with the 2015 Act, this level does
not increase penalty levels by more than 150 percent of the
corresponding levels in effect on November 2, 2015.
In the seventh column (adjusted 2016 penalty), we provide
the number for the penalty as it would have been adjusted for 2016. To
derive this number, we compare the preliminary new penalty with the
current penalty from column 3. The adjusted new penalty is the lesser
of either the preliminary new penalty or an amount
[[Page 67071]]
equal to 150 percent more than the current penalty.
Table 1--U.S. Customs and Border Protection Civil Penalties Initial Catch-Up Adjustments
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted 2016
Preliminary new penalty
Current Baseline penalty * 2016 penalty [2016 [increase
Penalty name Citation penalty (year) Multiplier multiplier x capped at 150%
** baseline more than
penalty] current penalty]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Penalty for transporting passengers 46 U.S.C. 12118(f)(3)... $200 $200 (1958)............. 8.22969 $1,646 $500
coastwise for hire by certain vessels
(known as Bowaters vessels) that do
not meet specified conditions.
Penalty for employing a vessel in a 19 U.S.C. 1706a, 19 CFR 500 $500 (1980)............. 2.80469 1,402 1,250
trade without a required Certificate 4.80(i).
of Documentation.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The amount of the penalty and the year when the penalty was established or last adjusted in statute or regulation other than pursuant to the Inflation
Adjustment Act of 1990.
** OMB, Implementation of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Table A: 2016 Civil Monetary Penalty Catch-Up
Adjustment Multiplier by Calendar Year, February 24, 2016. https://obamawhitehouse.archives.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
C. 2017 Adjustments
This table shows how DHS would have made the 2017 annual inflation
adjustment for the two civil monetary penalties assessed by CBP that
were inadvertently omitted from the DHS rulemakings and CBP correction
rulemaking, pursuant to the 2015 Act and the guidance OMB issued to
agencies on December 16, 2016.\9\ In Table 2 below, we show: (1) The
civil penalty (or penalties) name, (2) the penalty statutory and/or
regulatory citation, (3) the penalty amount as it would have been
adjusted in 2016 (See Table 1), (4) the cost-of-living adjustment
multiplier for 2017 that OMB provided in its December 16, 2016
guidance, and (5) the 2017 adjusted penalty.
---------------------------------------------------------------------------
\9\ See footnote 4.
Table 2-- U.S. Customs and Border Protection Civil Penalties 2017 Adjustments
----------------------------------------------------------------------------------------------------------------
Adjusted 2016
Penalty name Citation penalty (see 2017 Adjusted 2017
Table 1) Multiplier * penalty
----------------------------------------------------------------------------------------------------------------
Penalty for transporting passengers 46 U.S.C. 12118(f)(3)... $500 1.01636 $508
coastwise for hire by certain vessels
(known as Bowaters vessels) that do
not meet specified conditions.
Penalty for employing a vessel in a 19 U.S.C. 1706a, 19 CFR 1,250 1.01636 1,270
trade without a required Certificate 4.80(i).
of Documentation.
----------------------------------------------------------------------------------------------------------------
* OMB, Implementation of the 2017 annual adjustment pursuant to the Federal Civil Penalties Inflation Adjustment
Act Improvements Act of 2015, December 16, 2016. https://obamawhitehouse.archives.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf.
D. 2018 Adjustments
This final rule also makes the 2018 annual inflation adjustment
pursuant to the 2015 Act and the guidance OMB issued to agencies on
December 15, 2017.\10\ Pursuant to 28 U.S.C. 2461 note sec. 6, as
amended by the 2015 Act, the penalty amounts adjusted by this final
rule will be applicable for penalties assessed after December 28, 2018
where the associated violation occurred after November 2, 2015 (i.e.,
the date the 2015 Act was signed into law). Consistent with OMB
guidance, the 2015 Act does not change previously assessed penalties
that the agency is actively collecting or has collected.
---------------------------------------------------------------------------
\10\ See footnote 5.
---------------------------------------------------------------------------
In Table 3 below, we show: (1) The civil penalty (or penalties)
name, (2) the penalty statutory and/or regulatory citation, (3) the
penalty amount as it would have been adjusted in 2017 (See Table 2),
(4) the cost-of-living adjustment multiplier for 2018 that OMB provided
in its December 15, 2017 guidance, and (5) the new 2018 adjusted
penalty.
Additionally, we have made conforming edits to the regulatory text
for the new adjusted penalty amounts in 19 CFR 4.80(i). Because the 46
U.S.C. 12118 penalty is not included in 19 CFR 4.80(d), there are no
conforming edits to be made to the regulatory text. However, this
penalty is listed in Table 3 for informational purposes.
[[Page 67072]]
Table 3--U.S. Customs and Border Protection Civil Penalties 2018 Adjustments
----------------------------------------------------------------------------------------------------------------
New penalty as
Adjusted 2017 2018 adjusted by
Penalty name Citation penalty (see Multiplier * this final
Table 2) rule
----------------------------------------------------------------------------------------------------------------
Penalty for transporting passengers 46 U.S.C................ $508 1.02041 ** $518
coastwise for hire by certain vessels 12118(f)(3).............
(known as Bowaters vessels) that do
not meet specified conditions.
Penalty for employing a vessel in a 19 U.S.C. 1706a, 19 CFR 1,270 1.02041 1,296
trade without a required Certificate 4.80(i).
of Documentation.
----------------------------------------------------------------------------------------------------------------
* OMB, Implementation of Penalty Inflation Adjustments for 2018, Pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015, December 15, 2017. https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
** No applicable conforming edit to regulatory text.
IV. Administrative Procedure Act
The Administrative Procedure Act (APA) generally requires agencies
to publish a notice of proposed rulemaking in the Federal Register (5
U.S.C. 553(b)) and to provide interested persons with the opportunity
to submit comments (5 U.S.C. 553(c)). The APA also requires agencies to
provide a delayed effective date (of not less than 30 days) for
substantive rules. 5 U.S.C. 553(d). The 2015 Act, however, specifically
instructed that agencies are to make the required annual adjustments
notwithstanding section 553 of title 5 of the U.S.C.
DHS is promulgating this final rule to ensure that the amounts for
civil penalties that CBP assesses or enforces that were inadvertently
omitted from the DHS rulemakings reflect the statutorily mandated
ranges as adjusted for inflation. The 2015 Act provides a clear
nondiscretionary formula for adjustment of the civil penalties; DHS and
CBP have been charged only with performing ministerial computations to
determine the amounts of adjustments for inflation to civil monetary
penalties. Additionally, although the 2015 Act requires publication of
an IFR to take effect not later than August 1, 2016, that date has
passed and publishing a separate IFR to account for these inadvertently
omitted penalty adjustments would cause unnecessary delay. Further,
this final rule merely applies the adjustment methodology that DHS
provided for public comment in the 2016 IFR and finalized in the 2017
final rule. DHS finds that it is unnecessary to seek further public
comment regarding the application of the finalized methodology to these
two penalties. For these reasons, and as specified in the 2015 Act, DHS
finds good cause to promulgate these CBP civil monetary penalty
adjustments as a final rule and finds that the prior public notice-and-
comment procedures and delayed effective date requirements of the APA
are unnecessary and do not apply to this rule.
As described in Section I above, the 2015 Act requires agencies to
make annual adjustments to civil monetary penalties no later than
January 15 of each year and to publish the adjustments in the Federal
Register. DHS will make future annual inflation adjustments required
pursuant to the 2015 Act by final rule notwithstanding the notice-and-
comment and delayed effective date requirements of the APA, as required
by the 2015 Act. For future annual adjustments, DHS will update the
penalty amounts by applying a cost-of-living adjustment multiplier
pursuant to OMB guidance. DHS will publish a final rule that provides a
table with the adjusted penalty amounts and that updates the numbers in
the regulatory text accordingly. DHS will incorporate the two CBP
penalties adjusted in this final rule into such future annual
adjustment final rules.
V. Regulatory Analyses
A. Executive Orders 12866, 13563, and 13771
Executive Orders 12866 (``Regulatory Planning and Review'') and
13563 (``Improving Regulation and Regulatory Review'') direct agencies
to assess the costs and benefits of available regulatory alternatives
and, if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility. Executive Order 13771 (``Reducing Regulation and
Controlling Regulatory Costs'') directs agencies to reduce regulation
and control regulatory costs and provides that ``for every one new
regulation issued, at least two prior regulations be identified for
elimination, and that the cost of planned regulations be prudently
managed and controlled through a budgeting process.''
OMB has not designated this rule a significant regulatory action
under section 3(f) of Executive Order 12866. Accordingly, OMB has not
reviewed it. As this rule is not a significant regulatory action it is
not subject to the requirements of Executive Order 13771. See OMB's
Memorandum, ``Guidance Implementing Executive Order 13771, Titled
`Reducing Regulation and Controlling Regulatory Costs' '' (April 5,
2017) at Q2.
This final rule makes nondiscretionary adjustments to existing
civil monetary penalties in accordance with the 2015 Act and OMB
guidance.\11\ DHS therefore did not consider alternatives and does not
have the flexibility to alter the adjustments of the civil monetary
penalty amounts as provided in this rule. To the extent this final rule
increases civil monetary penalties, it would result in an increase in
transfers from persons or entities assessed a civil monetary penalty to
the government.
---------------------------------------------------------------------------
\11\ See footnotes 2 and 4.
---------------------------------------------------------------------------
B. Regulatory Flexibility Act
The Regulatory Flexibility Act applies only to rules for which an
agency publishes a notice of proposed rulemaking pursuant to 5 U.S.C.
553(b). See 5 U.S.C. 601-612. The Regulatory Flexibility Act does not
apply to this final rule because a notice of proposed rulemaking was
not required for the reasons stated above.
C. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538,
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or Tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. This final rule will not result in
such an expenditure.
[[Page 67073]]
D. Paperwork Reduction Act
The provisions of the Paperwork Reduction Act of 1995, 44 U.S.C.
chapter 35, and its implementing regulations, 5 CFR part 1320, do not
apply to this final rule, because this final rule does not trigger any
new or revised recordkeeping or reporting.
VI. Signing Authority
The signing authority for this document falls under 19 CFR 0.2(a).
Accordingly, this document is signed by the Secretary of Homeland
Security.
List of Subjects in 19 CFR Part 4
Exports, Freight, Harbors, Maritime carriers, Oil pollution,
Reporting and recordkeeping requirements, Vessels.
Amendments to the Regulations
For the reasons stated in the preamble, CBP amends 19 CFR part 4 as
follows:
PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADES
0
1. The authority citation for part 4 continues to read in part as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624,
2071 note; 46 U.S.C. 501, 60105.
* * * * *
Sections 4.80, 4.80a, and 4.80b also issued under 19 U.S.C.
1706a; 28 U.S.C. 2461 note; 46 U.S.C. 12112, 12117, 12118, 50501-
55106, 55107, 55108, 55110, 55114, 55115, 55116, 55117, 55119,
56101, 55121, 56101, 57109; Pub. L. 108-7, Division B, Title II,
Sec. 211;
* * * * *
0
2. Revise Sec. 4.80(i) to read as follows:
Sec. 4.80 Vessels entitled to engage in coastwise trade.
* * * * *
(i) Any vessel, entitled to be documented and not so documented,
employed in a trade for which a Certificate of Documentation is issued
under the vessel documentation laws (see Sec. 4.0(c)), other than a
trade covered by a registry, is liable to a civil penalty of $500 for
each port at which it arrives without the proper Certificate of
Documentation on or before November 2, 2015, and $1296 for each port at
which it arrives without the proper Certificate of Documentation after
November 2, 2015 (19 U.S.C. 1706a, as adjusted by the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015). If such a
vessel has on board any foreign merchandise (sea stores excepted), or
any domestic taxable alcoholic beverages, on which the duty and taxes
have not been paid or secured to be paid, the vessel and its cargo are
subject to seizure and forfeiture.
Claire M. Grady,
Under Secretary for Management and Senior Official Performing the
Duties of the Deputy Secretary.
[FR Doc. 2018-28141 Filed 12-27-18; 8:45 am]
BILLING CODE 9111-14-P
