Inflation Adjustment of Civil Monetary Penalties Related to Reporting and Recordkeeping, 54911-54914 [2020-19237]
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Federal Register / Vol. 85, No. 172 / Thursday, September 3, 2020 / Rules and Regulations
Assistant Director for Sanctions
Compliance & Evaluation, 202–622–
2490.
SUPPLEMENTARY INFORMATION:
DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 501
[Docket Number OFAC–2020–0001]
Inflation Adjustment of Civil Monetary
Penalties Related to Reporting and
Recordkeeping
AGENCY:
Background
The Department of the
Treasury’s Office of Foreign Assets
Control (OFAC) is issuing this interim
final rule to further implement the
Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by
the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015, by adjusting for inflation its civil
monetary penalties for failure to comply
with certain recordkeeping and
reporting requirements, which are
contained in OFAC’s Economic
Sanctions Enforcement Guidelines in
OFAC’s Reporting, Procedures and
Penalties Regulations.
DATES: This rule is effective October 5,
2020. Comments must be received on or
before October 5, 2020.
ADDRESSES: You may submit comments
by either of the following methods:
Federal eRulemaking Portal:
www.regulations.gov. Follow the
instructions on the website for
submitting comments. Refer to Docket
Number OFAC–2020–0001.
Mail: Attn: Request for Comments
(Inflation Adjustment of Civil Monetary
Penalties Related to Reporting and
Recordkeeping), Office of Foreign Assets
Control, Department of the Treasury,
1500 Pennsylvania Avenue NW,
Freedman’s Bank Building, Washington,
DC 20220. Refer to Docket Number
OFAC–2020–0001.
Instructions: All submissions received
must include the agency name and the
docket number that appears at the end
of this document. All comments,
including attachments and other
supporting materials, will become part
of the public record and subject to
public disclosure. Sensitive personal
information, such as account numbers
or Social Security numbers, should not
be included. Comments generally will
not be edited to remove any identifying
or contact information.
FOR FURTHER INFORMATION CONTACT:
OFAC: Assistant Director for Licensing,
202–622–2480; Assistant Director for
Regulatory Affairs, 202–622–4855; or
The Federal Civil Penalties Inflation
Adjustment Act
Section 4 of the Federal Civil
Penalties Inflation Adjustment Act
(1990 Pub. L. 101–410, 104 Stat. 890; 28
U.S.C. 2461 note), as amended by the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (Pub. L. 114–74, 129 Stat. 599, 28
U.S.C. 2461 note) (collectively, the
FCPIA Act), requires each federal
agency with statutory authority to assess
civil monetary penalties (CMPs) to
adjust CMPs for inflation according to a
formula described in section 5 of the
FCPIA Act. One purpose of the FCPIA
Act is to ensure that CMPs continue to
maintain their deterrent effect through
periodic cost-of-living based
adjustments.
The FCPIA Act directs agencies to
adjust the level of CMPs for inflation
with an initial ‘‘catch-up’’ adjustment to
be effective no later than August 1,
2016, followed by annual adjustments.
The FCPIA directs the Office of
Management and Budget (OMB) to
provide agencies with guidance and
Consumer Price Index for all Urban
Consumers (CPI–U)-related multipliers
for the initial catch-up adjustment and
subsequent annual adjustments.
OFAC currently is authorized to
impose CMPs pursuant to five statutes:
The Trading with the Enemy Act (50
U.S.C. 4315) (TWEA); the International
Emergency Economic Powers Act (50
U.S.C. 1705) (IEEPA); the Antiterrorism
and Effective Death Penalty Act of 1996
(18 U.S.C. 2339B) (AEDPA); the Foreign
Narcotics Kingpin Designation Act (21
U.S.C. 1906) (FNKDA); and the Clean
Diamond Trade Act (19 U.S.C. 3907)
(CDTA).
OFAC issued an initial catch-up
adjustment rule for CMPs pursuant to
these statutes on August 1, 2016 (81 FR
43070, July 1, 2016), and issued annual
CMP increases on February 10, 2017 (82
FR 10434, February 10, 2017), March 19,
2018 (83 FR 11876, March 19, 2018),
June 14, 2019 (84 FR 27714, June 14,
2019), and April 9, 2020 (85 FR 19884,
April 9, 2020).
OFAC inadvertently omitted from its
initial catch-up regulation and
Office of Foreign Assets
Control, Treasury.
ACTION: Interim final rule with request
for comments.
SUMMARY:
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Electronic Availability
This document and additional
information concerning OFAC are
available from OFAC’s website (https://
www.treasury.gov/ofac).
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54911
subsequent annual increases its CMPs
for failure to comply with a requirement
to furnish information, the late filing of
a required report, and failure to
maintain records, which are located in
its Economic Sanctions Enforcement
Guidelines in appendix A to 31 CFR
part 501. This interim final rule
combines the catch-up adjustment that
would have become effective August 1,
2016, plus the annual adjustments for
2017 through 2020 for these CMPs.
In addition, OFAC is making
technical edits to the authority citation
for part 501 to conform to Federal
Register guidance.
Calculation Method for Catch-Up
Adjustments
In order to complete the catch-up
adjustment for CMPs, the FCPIA Act
directs agencies to identify when the
CMP amount or range was established
or last adjusted, other than adjustments
pursuant to the FCPIA Act. Agencies are
directed to use that amount or range as
a starting point for performing
calculations. The catch-up calculations
therefore exclude prior inflationary
adjustments under the FCPIA Act. The
FCPIA Act directs agencies to calculate
initial catch-up adjustments based on
the percent change between the CPI–U
for the month of October in the year of
the last non-FCPIA-Act-based
adjustment and the October 2015 CPI–
U. In accordance with the FCPIA Act,
the amount of the CMP catch-up
adjustment shall not exceed 150 percent
of the corresponding level in effect on
November 2, 2015 (the ‘‘maximum
adjustment’’), and agencies must round
all CMP levels to the nearest dollar after
applying the multiplier.
On February 24, 2016, OMB issued
written guidance providing agencies
with CPI–U-related multipliers to use
when adjusting the CMP level or range
of CMP levels based on the year the
CMP was established or last adjusted by
statute or regulation. (Memorandum for
the Heads of Executive Departments
and Agencies: Implementation of the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (OMB Catch-Up Guidance)).
Catch-Up Adjustments for Failure To
Comply With a Requirement To Furnish
Information and the Late Filing of a
Required Report
OFAC’s CMPs for failure to comply
with a requirement to furnish
information pursuant to 31 CFR 501.602
and the late filing of a report set forth
in regulations or a specific license are
contained in sections IV.A and B,
respectively, of appendix A to 31 CFR
part 501. OFAC established these CMPs
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on September 8, 2008 (73 FR 51933,
September 8, 2008), and OFAC has not
adjusted them since. Pursuant to the
OMB Catch-Up Guidance, the inflation
factor for catch-up adjustments for these
CMPs is 1.09819, with a maximum
allowable adjustment of 150 percent of
the CMP that was in effect on November
2, 2015.
The CMP established in 2008 for
failure to furnish information pursuant
to 31 CFR 501.602 irrespective of
whether any other violation is alleged is
$20,000. Applying the multiplier of
1.09819 results in a catch-up CMP of
$21,964. The CMP established in 2008
for failure to furnish information
pursuant to 31 CFR 501.602 where
OFAC has reason to believe that the
apparent violation(s) involves a
transaction(s) valued at greater than
$500,000, irrespective of whether any
other violation is alleged, is $50,000.
Applying the multiplier of 1.09819
results in a catch-up CMP amount of
$54,910. The CMP established in 2008
for the late filing of a required report,
whether set forth in regulations or in a
specific license, if filed within the first
30 days after the report is due, is $2,500.
Applying the multiplier of 1.09819
results in a catch-up CMP amount of
$2,745. The CMP established in 2008 for
the late filing of a required report,
whether set forth in regulations or in a
specific license, if filed more than 30
days after the report is due, is $5,000.
Applying the multiplier of 1.09819
results in a catch-up CMP amount of
$5,491. The 2008 CMP for the late filing
of a required report, whether set forth in
regulations or in a specific license, if the
report relates to blocked assets, is an
additional $1,000 for every 30 days that
the report is overdue, up to five years.
Applying the multiplier of 1.09819
results in a catch-up CMP amount of
$1,098. None of these catch-up increases
exceeds the maximum adjustment
amount. These catch-up increases are
shown in Column 2 of Table 1.
CMP is 1.10020, with a maximum
allowable adjustment of 150 percent of
the CMP that was in effect on November
2, 2015. Applying the multiplier of
1.10020 to this CMP results in the catchup amount up to $55,010, which does
not exceed the maximum adjustment.
This catch-up figure is shown in
Column 2 of Table 2.
Calculation Method for 2017, 2018,
2019, and 2020 Adjustments
The FCPIA Act requires agencies to
adjust CMPs annually for inflation
subsequent to the initial catch-up
adjustment. These annual adjustments
are to be based on the percent change
between the CPI–U for the October
preceding the date of the adjustment
and the prior year’s October CPI–U.
Each December, OMB issues the
adjustment multiplier for the upcoming
year’s calculations. In order to complete
the annual adjustment, each CMP (as
revised by the catch-up adjustment) is
multiplied by the adjustment multiplier
for that year. Under the FCPIA Act, any
increases in CMPs must be rounded to
the nearest multiple of $1.
The adjustment multiplier for the
2017 CMP increase was 1.01636, as set
forth in OMB Memorandum M–17–11 of
December 16, 2016 (Memorandum for
the Heads of Executive Departments
and Agencies: Implementation of the
2017 Annual Adjustment pursuant to
the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015). For the 2018 CMP increase, OMB
Memorandum M–18–03 of December
15, 2017 provided an adjustment
multiplier of 1.02041 (Memorandum for
the Heads of Executive Departments
and Agencies: Implementation of
Penalty Inflation Adjustments for 2018,
Pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015). For the 2019 CMP
increase, OMB Memorandum M–19–04
of December 14, 2018 stated the
Catch-Up Adjustment for Failure To
adjustment multiplier was 1.02522
Maintain Records in Conformance With (Memorandum for the Heads of
the Requirements of OFAC’s Regulations Executive Departments and Agencies:
or of a Specific License
Implementation of Penalty Inflation
OFAC last adjusted its CMP for failure Adjustments for 2019, Pursuant to the
Federal Civil Penalties Inflation
to maintain records in conformance
Adjustment Act Improvements Act of
with the requirements of OFAC’s
2015,). For the 2020 CMP increase, OMB
regulations or of a specific license,
Memorandum M–20–05 of December
which is located in section IV.C of
16, 2019 provided an adjustment
appendix A to 31 CFR part 501, on
multiplier of 1.01764 (Memorandum for
November 9, 2009 (74 FR 57593,
the Heads of Executive Departments
November 9, 2009). The 2009
and Agencies: Implementation of
adjustment of this CMP provides for a
Penalty Inflation Adjustments for 2020,
penalty in an amount up to $50,000.
Pursuant to the Federal Civil Penalties
Pursuant to the OMB Catch-Up
Inflation Adjustment Act Improvements
Guidance, the relevant inflation factor
Act of 2015).
for the catch-up adjustment for this
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Adjustments for 2017, 2018, 2019, and
2020 for Failure To Comply With a
Requirement To Furnish Information
and the Late Filing of a Required Report
If OFAC had calculated the 2017
annual adjustment for its CMPs for
failure to comply with a requirement to
furnish information and the late filing of
a report, each of the catch-up CMP
amounts would have been multiplied by
the OMB-provided factor of 1.01636.
The resulting amounts for the 2017
CMPs are shown in Column 3 of Table
1. If OFAC had calculated the 2018
annual adjustment, the 2017 CMPs
would have been multiplied by the
OMB-provided factor of 1.02041. The
resulting amounts for the 2018 CMPs are
shown in Column 4 of Table 1. If OFAC
had calculated the 2019 CMP
adjustment, the 2018 CMPs would have
been multiplied by the OMB-provided
factor of 1.02522. The resulting amounts
for the 2019 CMPs are shown in Column
5 of Table 1.
For the 2020 CMP increases, OMB
provided an adjustment factor of
1.01764. OFAC multiplied the 2019
CMP amounts by this factor, resulting in
the 2020 CMP amounts as shown in
Column 6 of Table 2. These 2020 CMP
amounts will be effective October 5,
2020 for associated violations that
occurred after November 2, 2015 for
which penalties were assessed on or
after October 5, 2020.
Adjustments for 2017, 2018, 2019, and
2020 for Failure To Maintain Records in
Conformance With the Requirements of
OFAC’s Regulations or of a Specific
License
If OFAC had calculated the 2017
annual adjustment for its CMP for
failure to maintain records in
conformance with the requirements of
OFAC’s regulations or of a specific
license, the catch-up CMP amount
would have been multiplied by the
OMB-provided factor of 1.01636. The
resulting amount for the 2017 CMP is
shown in Column 3 of Table 2. If OFAC
had calculated the 2018 annual CMP
adjustment, the 2017 CMP would have
been multiplied by the OMB-provided
factor of 1.02041. The resulting amount
for the 2018 CMP is shown in Column
4 of Table 2. If OFAC had calculated the
2019 CMP adjustment, the 2018 CMP
would have been multiplied by the
OMB-provided factor of 1.02522. The
resulting amount for the 2019 CMP is
shown in Column 5 of Table 2.
For the 2020 CMP increase, OMB
provided an adjustment factor of
1.01764. OFAC multiplied the 2019
CMP amount by this factor, resulting in
the 2020 CMP amount as shown in
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Federal Register / Vol. 85, No. 172 / Thursday, September 3, 2020 / Rules and Regulations
Column 6 of Table 2. This 2020 CMP
amount will be effective October 5, 2020
for associated violations that occurred
after November 2, 2015 for which
penalties were assessed on or after
October 5, 2020.
Summary of CMP Increases in This Rule
The CMP for failure to comply with
the requirement to furnish information
pursuant to 31 CFR 501.602 irrespective
of whether any other violation is alleged
will increase from $20,000 to $23,765.
The CMP for failure to comply with a
requirement to furnish information,
where OFAC has reason to believe that
the apparent violation(s) that is the
subject of the requirement to furnish
information involves a transaction(s)
valued at greater than $500,000,
irrespective of whether any other
violation is alleged, will increase from
$50,000 to $59,413. The CMP for late
filing of a required report, whether set
forth in regulations or in a specific
license, if filed within the first 30 days
after the report is due will increase from
$2,500 to $2,970. The CMP for late filing
of a required report, whether set forth in
regulations or in a specific license, if
54913
filed more than 30 days after the report
is due, will increase from $5,000 to
$5,942. The CMP for late filing of a
required report, whether set forth in
regulations or in a specific license, if the
report relates to blocked assets, an
additional CMP for every 30 days that
the report is overdue, up to five years,
will increase from $1,000 to $1,189. The
CMP for failure to maintain records in
conformance with the requirements of
OFAC’s regulations or of a specific
license will increase from a maximum
of $50,000 to $59,522.
TABLE 1—CMPS FOR FAILURE TO COMPLY WITH A REQUIREMENT TO FURNISH INFORMATION AND THE LATE FILING OF A
REPORT
Column 1
Column 2
Column 3
Column 4
Column 5
Column 6
Violation ..............................................................
Existing
CMP.
2016 catch-up CMP
(catch-up factor of
1.09819 applied to
existing CMP).
2017 adjusted CMP
(factor of 1.01636
applied to catch-up
CMP).
2018 CMP (factor of
1.02041 applied to
2017 CMP).
2019 CMP
(factor of
1.02522
applied
to 2018
CMP).
Failure to furnish information pursuant to 31
CFR 501.602 irrespective of whether any
other violation is alleged.
Failure to furnish information pursuant to 31
CFR 501.602 where OFAC has reason to believe that the apparent violation(s) involves a
transaction(s) valued at greater than
$500,000, irrespective of whether any other
violation is alleged.
Late filing of a required report, whether set forth
in regulations or in a specific license, if filed
within the first 30 days after the report is due.
Late filing of a required report, whether set forth
in regulations or in a specific license, if filed
more than 30 days after the report is due.
Late filing of a required report, whether set forth
in regulations or in a specific license, if the
report relates to blocked assets, an additional
CMP for every 30 days that the report is
overdue, up to five years.
$20,000 ....
$21,964 .......................
$22,323 .......................
$22,779 .......................
$23,353 ....
2020 CMP
(factor of
1.01764
applied
to 2019
CMP)
This is
the penalty effective
October
5, 2020.
$23,765.
$50,000 ....
$54,910 .......................
$55,808 .......................
$56,947 .......................
$58,383 ....
$59,413.
$2,500 ......
$2,745 .........................
$2,790 .........................
$2,847 .........................
$2,919 ......
$2,970.
$5,000 ......
$5,491 .........................
$5,581 .........................
$5,695 .........................
$5,839 ......
$5,942.
$1,000 ......
$1,098 .........................
$1,116 .........................
$1,139 .........................
$1,168 ......
$1,189.
TABLE 2—CMPS FOR FAILURE TO MAINTAIN RECORDS IN CONFORMANCE WITH THE REQUIREMENTS OF OFAC’S
REGULATIONS OR OF A SPECIFIC LICENSE
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Column 1
Column 2
Column 3
Column 4
Column 5
Column 6
2020 CMP
(factor of
1.01764
applied
to 2019
CMP)
This is
the penalty effective
October
5, 2020.
$59,522.
Violation ..............................................................
Existing
CMP.
2016 catch-up CMP
(catch-up factor of
1.10020 applied to
existing CMP).
2017 adjusted CMP
(factor of 1.01636
applied to catch-up
CMP).
2018 CMP (factor of
1.02041 applied to
2017 CMP).
2019 CMP
(factor of
1.02522
applied
to 2018
CMP).
Failure to maintain records in conformance with
the requirements of OFAC’s regulations or of
a specific license.
$50,000 ....
$55,010 .......................
$55,910 .......................
$57,051 .......................
$58,490 ....
The adjusted CMP amounts described
in this rule are applicable only to CMPs
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assessed after October 5, 2020, whose
associated violations occurred after
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November 2, 2015, the date of
enactment of the FCPIA Act.
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Federal Register / Vol. 85, No. 172 / Thursday, September 3, 2020 / Rules and Regulations
Procedural Requirements
Notice and Comment
As required by the FCPIA Act, these
amendments are being published as an
interim final rule with an effective date
of October 5, 2020. Although other
notice and comment procedures are not
required, OFAC invites comments on
this rule related to the catch-up
adjustment only. The FCPIA Act
expressly exempts the inflation
adjustments from the notice and
comment requirements of the
Administrative Procedure Act, by
directing agencies to adjust CMPs for
inflation ‘‘notwithstanding section 553
of title 5, United States Code’’ (Pub. L.
114–74, 129 Stat. 599; 28 U.S.C. 2461
note).
Regulatory Flexibility Act
Because no notice of proposed
rulemaking is required for this rule, the
Regulatory Flexibility Act (5 U.S.C.
601–612) does not apply.
Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because this rule does not
impose information collection
requirements that would require the
approval of the Office of Management
and Budget under 44 U.S.C. 3501 et seq.
List of Subjects for 31 CFR Part 501
Administrative practice and
procedure, Banks, banking, Blocking of
assets, Enforcement guidelines, Exports,
Foreign trade, Licensing, Penalties,
Recordkeeping, Sanctions.
For the reasons set forth in the
preamble, 31 CFR part 501 is amended
as follows:
PART 501—REPORTING,
PROCEDURES AND PENALTIES
REGULATIONS
1. The authority citation for part 501
is revised to read as follows:
■
Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d,
2339B; 19 U.S.C. 3901–3913; 21 U.S.C. 1901–
1908; 22 U.S.C. 287c, 2370(a), 6009, 6032,
7205, 8501–8551; Pub. L. 101–410, 104 Stat.
890 (28 U.S.C. 2461 note); 31 U.S.C. 321(b);
50 U.S.C. 1701–1706, 4301–4341.
Appendix A to Part 501—[Amended]
2. In appendix A to part 501:
a. Amend paragraph IV.A. as follows:
i. Remove ‘‘$20,000’’ and in its place
add ‘‘$23,765’’.
■ ii. Remove ‘‘$50,000’’ and in its place
add ‘‘$59,413’’.
■ b. Amend paragraph IV.B. as follows:
■ i. Remove ‘‘$2,500’’ and add in its
place ‘‘$2,970’’.
■ ii. Remove ‘‘$5,000’’ and add in its
place ‘‘$5,942’’.
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■
■
■
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iii. Remove ‘‘$1,000’’ and add in its
place ‘‘$1,189’’.
■ 5. In paragraph IV.C., remove
‘‘$50,000’’ and add in its place
‘‘$59,522’’.
■
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Dated: August 27, 2020.
Bradley T. Smith,
Deputy Director, Office of Foreign Assets
Control.
[FR Doc. 2020–19237 Filed 9–2–20; 8:45 am]
BILLING CODE 4810–AL–P
DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 199
[Docket ID: DoD–2020–HA–0050]
RIN 0720–AB82
TRICARE Coverage of Certain Medical
Benefits in Response to the COVID–19
Pandemic
Office of the Secretary,
Department of Defense.
ACTION: Interim final rule with request
for comments.
AGENCY:
The Assistant Secretary of
Defense for Health Affairs (ASD(HA))
issues this interim final rule (IFR) with
comment to temporarily modify the
TRICARE regulation by: Waiving the
three-day prior hospital qualifying stay
requirement for coverage of skilled
nursing facility (SNF) care; adding
coverage for treatment use of
investigational drugs under expanded
access authorized by the United States
(U.S.) Food and Drug Administration
(FDA) when for the treatment of
coronavirus disease 2019 (COVID–19);
temporarily waiving certain provisions
for acute care hospitals that will permit
authorization of temporary hospital
facilities and freestanding ambulatory
surgical centers (ASCs) providing
inpatient and outpatient hospital
services; and, consistent with similar
changes under the Centers for Medicaid
and Medicare Services (CMS), revising
diagnosis related group (DRG)
reimbursement by temporarily
reimbursing DRGs at a 20 percent higher
rate for COVID–19 patients and
temporarily waiving certain
requirements for long term care
hospitals (LTCHs). Finally, this IFR will
also adopt Medicare’s New Technology
Add-On Payments (NTAPs) adjustment
to DRGs for new medical services and
technologies and adopt Medicare’s
Hospital Value Based Purchasing
(HVBP) Program.
DATES:
SUMMARY:
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Effective date: This interim final rule
with comment is effective on September
3, 2020 through either the end of the
President’s national emergency
(Proclamation 9994, 85 Federal Register
(FR) 15337 (Mar. 18, 2020)) or the end
of the declared public health
emergency, including any extensions,
(as determined by 42 United States Code
(U.S.C.) 247d, except for NTAPs and
HVBP, which will not expire). The
ASD(HA) will publish a document
announcing the expiration date. See the
SUPPLEMENTARY INFORMATION section for
more information.
Applicability date: Some policies in
this IFR are applicable prior to the
effective date of this IFR. The temporary
waiver of the SNF three-day prior stay
rule is applicable beginning March 1,
2020. The temporary DRG and LTCH
reimbursement adjustments are
applicable beginning January 27, 2020,
and the adoption of the NTAPs and
HVBP are applicable beginning January
1, 2020. All other changes are applicable
on the effective date of this IFR.
Comment date: Comments are invited
and must be submitted on or before
November 2, 2020.
ADDRESSES: You may submit comments,
identified by docket number and/or
Regulation Identification Number (RIN)
number and title, by any of the
following methods:
• Federal Rulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: The Department of Defense
(DoD) cannot receive written comments
at this time due to the COVID–19
pandemic. Comments should be sent
electronically to the docket listed above.
Instructions: All submissions received
must include the agency name and
docket number or RIN for this Federal
Register document. The general policy
for comments and other submissions
from members of the public is to make
these submissions available for public
viewing on the internet at https://
www.regulations.gov as they are
received without change, including any
personal identifiers or contact
information.
FOR FURTHER INFORMATION CONTACT:
Erica Ferron, Medical Benefits and
Reimbursement Section, 303–676–3626,
erica.c.ferron.civ@mail.mil.
SUPPLEMENTARY INFORMATION:
Expiration date: Unless extended after
consideration of submitted comments,
the medical benefit provisions in this
IFR will cease to be in effect upon
termination of the President’s declared
national emergency, in accordance with
applicable law and regulation (e.g., 50
U.S.C. 1622(a)), except the temporary
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[Federal Register Volume 85, Number 172 (Thursday, September 3, 2020)]
[Rules and Regulations]
[Pages 54911-54914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19237]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 501
[Docket Number OFAC-2020-0001]
Inflation Adjustment of Civil Monetary Penalties Related to
Reporting and Recordkeeping
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Interim final rule with request for comments.
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SUMMARY: The Department of the Treasury's Office of Foreign Assets
Control (OFAC) is issuing this interim final rule to further implement
the Federal Civil Penalties Inflation Adjustment Act of 1990, as
amended by the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, by adjusting for inflation its civil monetary
penalties for failure to comply with certain recordkeeping and
reporting requirements, which are contained in OFAC's Economic
Sanctions Enforcement Guidelines in OFAC's Reporting, Procedures and
Penalties Regulations.
DATES: This rule is effective October 5, 2020. Comments must be
received on or before October 5, 2020.
ADDRESSES: You may submit comments by either of the following methods:
Federal eRulemaking Portal: www.regulations.gov. Follow the
instructions on the website for submitting comments. Refer to Docket
Number OFAC-2020-0001.
Mail: Attn: Request for Comments (Inflation Adjustment of Civil
Monetary Penalties Related to Reporting and Recordkeeping), Office of
Foreign Assets Control, Department of the Treasury, 1500 Pennsylvania
Avenue NW, Freedman's Bank Building, Washington, DC 20220. Refer to
Docket Number OFAC-2020-0001.
Instructions: All submissions received must include the agency name
and the docket number that appears at the end of this document. All
comments, including attachments and other supporting materials, will
become part of the public record and subject to public disclosure.
Sensitive personal information, such as account numbers or Social
Security numbers, should not be included. Comments generally will not
be edited to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for
Licensing, 202-622-2480; Assistant Director for Regulatory Affairs,
202-622-4855; or Assistant Director for Sanctions Compliance &
Evaluation, 202-622-2490.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document and additional information concerning OFAC are
available from OFAC's website (https://www.treasury.gov/ofac).
Background
The Federal Civil Penalties Inflation Adjustment Act
Section 4 of the Federal Civil Penalties Inflation Adjustment Act
(1990 Pub. L. 101-410, 104 Stat. 890; 28 U.S.C. 2461 note), as amended
by the Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 (Pub. L. 114-74, 129 Stat. 599, 28 U.S.C. 2461 note)
(collectively, the FCPIA Act), requires each federal agency with
statutory authority to assess civil monetary penalties (CMPs) to adjust
CMPs for inflation according to a formula described in section 5 of the
FCPIA Act. One purpose of the FCPIA Act is to ensure that CMPs continue
to maintain their deterrent effect through periodic cost-of-living
based adjustments.
The FCPIA Act directs agencies to adjust the level of CMPs for
inflation with an initial ``catch-up'' adjustment to be effective no
later than August 1, 2016, followed by annual adjustments. The FCPIA
directs the Office of Management and Budget (OMB) to provide agencies
with guidance and Consumer Price Index for all Urban Consumers (CPI-U)-
related multipliers for the initial catch-up adjustment and subsequent
annual adjustments.
OFAC currently is authorized to impose CMPs pursuant to five
statutes: The Trading with the Enemy Act (50 U.S.C. 4315) (TWEA); the
International Emergency Economic Powers Act (50 U.S.C. 1705) (IEEPA);
the Antiterrorism and Effective Death Penalty Act of 1996 (18 U.S.C.
2339B) (AEDPA); the Foreign Narcotics Kingpin Designation Act (21
U.S.C. 1906) (FNKDA); and the Clean Diamond Trade Act (19 U.S.C. 3907)
(CDTA).
OFAC issued an initial catch-up adjustment rule for CMPs pursuant
to these statutes on August 1, 2016 (81 FR 43070, July 1, 2016), and
issued annual CMP increases on February 10, 2017 (82 FR 10434, February
10, 2017), March 19, 2018 (83 FR 11876, March 19, 2018), June 14, 2019
(84 FR 27714, June 14, 2019), and April 9, 2020 (85 FR 19884, April 9,
2020).
OFAC inadvertently omitted from its initial catch-up regulation and
subsequent annual increases its CMPs for failure to comply with a
requirement to furnish information, the late filing of a required
report, and failure to maintain records, which are located in its
Economic Sanctions Enforcement Guidelines in appendix A to 31 CFR part
501. This interim final rule combines the catch-up adjustment that
would have become effective August 1, 2016, plus the annual adjustments
for 2017 through 2020 for these CMPs.
In addition, OFAC is making technical edits to the authority
citation for part 501 to conform to Federal Register guidance.
Calculation Method for Catch-Up Adjustments
In order to complete the catch-up adjustment for CMPs, the FCPIA
Act directs agencies to identify when the CMP amount or range was
established or last adjusted, other than adjustments pursuant to the
FCPIA Act. Agencies are directed to use that amount or range as a
starting point for performing calculations. The catch-up calculations
therefore exclude prior inflationary adjustments under the FCPIA Act.
The FCPIA Act directs agencies to calculate initial catch-up
adjustments based on the percent change between the CPI-U for the month
of October in the year of the last non-FCPIA-Act-based adjustment and
the October 2015 CPI-U. In accordance with the FCPIA Act, the amount of
the CMP catch-up adjustment shall not exceed 150 percent of the
corresponding level in effect on November 2, 2015 (the ``maximum
adjustment''), and agencies must round all CMP levels to the nearest
dollar after applying the multiplier.
On February 24, 2016, OMB issued written guidance providing
agencies with CPI-U-related multipliers to use when adjusting the CMP
level or range of CMP levels based on the year the CMP was established
or last adjusted by statute or regulation. (Memorandum for the Heads of
Executive Departments and Agencies: Implementation of the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (OMB Catch-
Up Guidance)).
Catch-Up Adjustments for Failure To Comply With a Requirement To
Furnish Information and the Late Filing of a Required Report
OFAC's CMPs for failure to comply with a requirement to furnish
information pursuant to 31 CFR 501.602 and the late filing of a report
set forth in regulations or a specific license are contained in
sections IV.A and B, respectively, of appendix A to 31 CFR part 501.
OFAC established these CMPs
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on September 8, 2008 (73 FR 51933, September 8, 2008), and OFAC has not
adjusted them since. Pursuant to the OMB Catch-Up Guidance, the
inflation factor for catch-up adjustments for these CMPs is 1.09819,
with a maximum allowable adjustment of 150 percent of the CMP that was
in effect on November 2, 2015.
The CMP established in 2008 for failure to furnish information
pursuant to 31 CFR 501.602 irrespective of whether any other violation
is alleged is $20,000. Applying the multiplier of 1.09819 results in a
catch-up CMP of $21,964. The CMP established in 2008 for failure to
furnish information pursuant to 31 CFR 501.602 where OFAC has reason to
believe that the apparent violation(s) involves a transaction(s) valued
at greater than $500,000, irrespective of whether any other violation
is alleged, is $50,000. Applying the multiplier of 1.09819 results in a
catch-up CMP amount of $54,910. The CMP established in 2008 for the
late filing of a required report, whether set forth in regulations or
in a specific license, if filed within the first 30 days after the
report is due, is $2,500. Applying the multiplier of 1.09819 results in
a catch-up CMP amount of $2,745. The CMP established in 2008 for the
late filing of a required report, whether set forth in regulations or
in a specific license, if filed more than 30 days after the report is
due, is $5,000. Applying the multiplier of 1.09819 results in a catch-
up CMP amount of $5,491. The 2008 CMP for the late filing of a required
report, whether set forth in regulations or in a specific license, if
the report relates to blocked assets, is an additional $1,000 for every
30 days that the report is overdue, up to five years. Applying the
multiplier of 1.09819 results in a catch-up CMP amount of $1,098. None
of these catch-up increases exceeds the maximum adjustment amount.
These catch-up increases are shown in Column 2 of Table 1.
Catch-Up Adjustment for Failure To Maintain Records in Conformance With
the Requirements of OFAC's Regulations or of a Specific License
OFAC last adjusted its CMP for failure to maintain records in
conformance with the requirements of OFAC's regulations or of a
specific license, which is located in section IV.C of appendix A to 31
CFR part 501, on November 9, 2009 (74 FR 57593, November 9, 2009). The
2009 adjustment of this CMP provides for a penalty in an amount up to
$50,000. Pursuant to the OMB Catch-Up Guidance, the relevant inflation
factor for the catch-up adjustment for this CMP is 1.10020, with a
maximum allowable adjustment of 150 percent of the CMP that was in
effect on November 2, 2015. Applying the multiplier of 1.10020 to this
CMP results in the catch-up amount up to $55,010, which does not exceed
the maximum adjustment. This catch-up figure is shown in Column 2 of
Table 2.
Calculation Method for 2017, 2018, 2019, and 2020 Adjustments
The FCPIA Act requires agencies to adjust CMPs annually for
inflation subsequent to the initial catch-up adjustment. These annual
adjustments are to be based on the percent change between the CPI-U for
the October preceding the date of the adjustment and the prior year's
October CPI-U. Each December, OMB issues the adjustment multiplier for
the upcoming year's calculations. In order to complete the annual
adjustment, each CMP (as revised by the catch-up adjustment) is
multiplied by the adjustment multiplier for that year. Under the FCPIA
Act, any increases in CMPs must be rounded to the nearest multiple of
$1.
The adjustment multiplier for the 2017 CMP increase was 1.01636, as
set forth in OMB Memorandum M-17-11 of December 16, 2016 (Memorandum
for the Heads of Executive Departments and Agencies: Implementation of
the 2017 Annual Adjustment pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015). For the 2018 CMP
increase, OMB Memorandum M-18-03 of December 15, 2017 provided an
adjustment multiplier of 1.02041 (Memorandum for the Heads of Executive
Departments and Agencies: Implementation of Penalty Inflation
Adjustments for 2018, Pursuant to the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015). For the 2019 CMP increase,
OMB Memorandum M-19-04 of December 14, 2018 stated the adjustment
multiplier was 1.02522 (Memorandum for the Heads of Executive
Departments and Agencies: Implementation of Penalty Inflation
Adjustments for 2019, Pursuant to the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015,). For the 2020 CMP increase,
OMB Memorandum M-20-05 of December 16, 2019 provided an adjustment
multiplier of 1.01764 (Memorandum for the Heads of Executive
Departments and Agencies: Implementation of Penalty Inflation
Adjustments for 2020, Pursuant to the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015).
Adjustments for 2017, 2018, 2019, and 2020 for Failure To Comply With a
Requirement To Furnish Information and the Late Filing of a Required
Report
If OFAC had calculated the 2017 annual adjustment for its CMPs for
failure to comply with a requirement to furnish information and the
late filing of a report, each of the catch-up CMP amounts would have
been multiplied by the OMB-provided factor of 1.01636. The resulting
amounts for the 2017 CMPs are shown in Column 3 of Table 1. If OFAC had
calculated the 2018 annual adjustment, the 2017 CMPs would have been
multiplied by the OMB-provided factor of 1.02041. The resulting amounts
for the 2018 CMPs are shown in Column 4 of Table 1. If OFAC had
calculated the 2019 CMP adjustment, the 2018 CMPs would have been
multiplied by the OMB-provided factor of 1.02522. The resulting amounts
for the 2019 CMPs are shown in Column 5 of Table 1.
For the 2020 CMP increases, OMB provided an adjustment factor of
1.01764. OFAC multiplied the 2019 CMP amounts by this factor, resulting
in the 2020 CMP amounts as shown in Column 6 of Table 2. These 2020 CMP
amounts will be effective October 5, 2020 for associated violations
that occurred after November 2, 2015 for which penalties were assessed
on or after October 5, 2020.
Adjustments for 2017, 2018, 2019, and 2020 for Failure To Maintain
Records in Conformance With the Requirements of OFAC's Regulations or
of a Specific License
If OFAC had calculated the 2017 annual adjustment for its CMP for
failure to maintain records in conformance with the requirements of
OFAC's regulations or of a specific license, the catch-up CMP amount
would have been multiplied by the OMB-provided factor of 1.01636. The
resulting amount for the 2017 CMP is shown in Column 3 of Table 2. If
OFAC had calculated the 2018 annual CMP adjustment, the 2017 CMP would
have been multiplied by the OMB-provided factor of 1.02041. The
resulting amount for the 2018 CMP is shown in Column 4 of Table 2. If
OFAC had calculated the 2019 CMP adjustment, the 2018 CMP would have
been multiplied by the OMB-provided factor of 1.02522. The resulting
amount for the 2019 CMP is shown in Column 5 of Table 2.
For the 2020 CMP increase, OMB provided an adjustment factor of
1.01764. OFAC multiplied the 2019 CMP amount by this factor, resulting
in the 2020 CMP amount as shown in
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Column 6 of Table 2. This 2020 CMP amount will be effective October 5,
2020 for associated violations that occurred after November 2, 2015 for
which penalties were assessed on or after October 5, 2020.
Summary of CMP Increases in This Rule
The CMP for failure to comply with the requirement to furnish
information pursuant to 31 CFR 501.602 irrespective of whether any
other violation is alleged will increase from $20,000 to $23,765. The
CMP for failure to comply with a requirement to furnish information,
where OFAC has reason to believe that the apparent violation(s) that is
the subject of the requirement to furnish information involves a
transaction(s) valued at greater than $500,000, irrespective of whether
any other violation is alleged, will increase from $50,000 to $59,413.
The CMP for late filing of a required report, whether set forth in
regulations or in a specific license, if filed within the first 30 days
after the report is due will increase from $2,500 to $2,970. The CMP
for late filing of a required report, whether set forth in regulations
or in a specific license, if filed more than 30 days after the report
is due, will increase from $5,000 to $5,942. The CMP for late filing of
a required report, whether set forth in regulations or in a specific
license, if the report relates to blocked assets, an additional CMP for
every 30 days that the report is overdue, up to five years, will
increase from $1,000 to $1,189. The CMP for failure to maintain records
in conformance with the requirements of OFAC's regulations or of a
specific license will increase from a maximum of $50,000 to $59,522.
Table 1--CMPs for Failure To Comply With a Requirement To Furnish Information and the Late Filing of a Report
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Column 1 Column 2 Column 3 Column 4 Column 5 Column 6
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Violation....................... Existing CMP...... 2016 catch-up CMP 2017 adjusted CMP 2018 CMP (factor 2019 CMP (factor 2020 CMP (factor
(catch-up factor (factor of of 1.02041 of 1.02522 of 1.01764
of 1.09819 1.01636 applied applied to 2017 applied to 2018 applied to 2019
applied to to catch-up CMP). CMP). CMP). CMP) This is the
existing CMP). penalty effective
October 5, 2020.
Failure to furnish information $20,000........... $21,964........... $22,323........... $22,779........... $23,353........... $23,765.
pursuant to 31 CFR 501.602
irrespective of whether any
other violation is alleged.
Failure to furnish information $50,000........... $54,910........... $55,808........... $56,947........... $58,383........... $59,413.
pursuant to 31 CFR 501.602
where OFAC has reason to
believe that the apparent
violation(s) involves a
transaction(s) valued at
greater than $500,000,
irrespective of whether any
other violation is alleged.
Late filing of a required $2,500............ $2,745............ $2,790............ $2,847............ $2,919............ $2,970.
report, whether set forth in
regulations or in a specific
license, if filed within the
first 30 days after the report
is due.
Late filing of a required $5,000............ $5,491............ $5,581............ $5,695............ $5,839............ $5,942.
report, whether set forth in
regulations or in a specific
license, if filed more than 30
days after the report is due.
Late filing of a required $1,000............ $1,098............ $1,116............ $1,139............ $1,168............ $1,189.
report, whether set forth in
regulations or in a specific
license, if the report relates
to blocked assets, an
additional CMP for every 30
days that the report is
overdue, up to five years.
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Table 2--CMPs for Failure To Maintain Records in Conformance With the Requirements of OFAC's Regulations or of a Specific License
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Column 1 Column 2 Column 3 Column 4 Column 5 Column 6
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Violation....................... Existing CMP...... 2016 catch-up CMP 2017 adjusted CMP 2018 CMP (factor 2019 CMP (factor 2020 CMP (factor
(catch-up factor (factor of of 1.02041 of 1.02522 of 1.01764
of 1.10020 1.01636 applied applied to 2017 applied to 2018 applied to 2019
applied to to catch-up CMP). CMP). CMP). CMP) This is the
existing CMP). penalty effective
October 5, 2020.
Failure to maintain records in $50,000........... $55,010........... $55,910........... $57,051........... $58,490........... $59,522.
conformance with the
requirements of OFAC's
regulations or of a specific
license.
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The adjusted CMP amounts described in this rule are applicable only
to CMPs assessed after October 5, 2020, whose associated violations
occurred after November 2, 2015, the date of enactment of the FCPIA
Act.
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Procedural Requirements
Notice and Comment
As required by the FCPIA Act, these amendments are being published
as an interim final rule with an effective date of October 5, 2020.
Although other notice and comment procedures are not required, OFAC
invites comments on this rule related to the catch-up adjustment only.
The FCPIA Act expressly exempts the inflation adjustments from the
notice and comment requirements of the Administrative Procedure Act, by
directing agencies to adjust CMPs for inflation ``notwithstanding
section 553 of title 5, United States Code'' (Pub. L. 114-74, 129 Stat.
599; 28 U.S.C. 2461 note).
Regulatory Flexibility Act
Because no notice of proposed rulemaking is required for this rule,
the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.
Paperwork Reduction Act
The Paperwork Reduction Act does not apply because this rule does
not impose information collection requirements that would require the
approval of the Office of Management and Budget under 44 U.S.C. 3501 et
seq.
List of Subjects for 31 CFR Part 501
Administrative practice and procedure, Banks, banking, Blocking of
assets, Enforcement guidelines, Exports, Foreign trade, Licensing,
Penalties, Recordkeeping, Sanctions.
For the reasons set forth in the preamble, 31 CFR part 501 is
amended as follows:
PART 501--REPORTING, PROCEDURES AND PENALTIES REGULATIONS
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1. The authority citation for part 501 is revised to read as follows:
Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, 2339B; 19 U.S.C.
3901-3913; 21 U.S.C. 1901-1908; 22 U.S.C. 287c, 2370(a), 6009, 6032,
7205, 8501-8551; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461
note); 31 U.S.C. 321(b); 50 U.S.C. 1701-1706, 4301-4341.
Appendix A to Part 501--[Amended]
0
2. In appendix A to part 501:
0
a. Amend paragraph IV.A. as follows:
0
i. Remove ``$20,000'' and in its place add ``$23,765''.
0
ii. Remove ``$50,000'' and in its place add ``$59,413''.
0
b. Amend paragraph IV.B. as follows:
0
i. Remove ``$2,500'' and add in its place ``$2,970''.
0
ii. Remove ``$5,000'' and add in its place ``$5,942''.
0
iii. Remove ``$1,000'' and add in its place ``$1,189''.
0
5. In paragraph IV.C., remove ``$50,000'' and add in its place
``$59,522''.
Dated: August 27, 2020.
Bradley T. Smith,
Deputy Director, Office of Foreign Assets Control.
[FR Doc. 2020-19237 Filed 9-2-20; 8:45 am]
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