Civil Monetary Penalty Adjustments for Inflation, 67069-67073 [2018-28141]

Download as PDF 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: amozie on DSK3GDR082PROD with RULES 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 VerDate Sep<11>2014 16:02 Dec 27, 2018 Jkt 247001 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. PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 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. E:\FR\FM\28DER1.SGM 28DER1 67070 Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Rules and Regulations amozie on DSK3GDR082PROD with RULES 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. VerDate Sep<11>2014 16:02 Dec 27, 2018 Jkt 247001 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 PO 00000 Frm 00038 Fmt 4700 Sfmt 4700 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 E:\FR\FM\28DER1.SGM 28DER1 67071 Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Rules and Regulations 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. amozie on DSK3GDR082PROD with RULES 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. VerDate Sep<11>2014 16:02 Dec 27, 2018 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 Jkt 247001 PO 00000 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. Frm 00039 Fmt 4700 Sfmt 4700 E:\FR\FM\28DER1.SGM 28DER1 67072 Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Rules and Regulations 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. amozie on DSK3GDR082PROD with RULES 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. VerDate Sep<11>2014 16:02 Dec 27, 2018 Jkt 247001 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.’’ PO 00000 Frm 00040 Fmt 4700 Sfmt 4700 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 E:\FR\FM\28DER1.SGM footnotes 2 and 4. 28DER1 Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Rules and Regulations 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