Civil Monetary Penalties; Adjustment for Inflation

DEPARTMENT OF COMMERCE

Office of the Secretary

15 CFR Parts 6, 25, and 28

[Docket No. 961021291-6291-01]

RIN 0690-AA27

Civil Monetary Penalties; Adjustment for Inflation

AGENCY: Office of the Secretary, Commerce.

ACTION: Final rule.

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SUMMARY: This final rule is being issued to adjust each civil monetary

penalty provided by law within the jurisdiction of the Department of

Commerce (the Department). The Federal Civil Penalties Inflation

Adjustment Act of 1990, as amended by the Debt Collection Improvement

Act of 1996, requires the head of each agency to adjust its civil

monetary penalties for inflation no later than October 23, 1996, and at

least once every four years thereafter. The inflation adjustments will

apply only to violations that occur after the effective date of this

rule.

EFFECTIVE DATE: This rule is effective October 23, 1996.

FOR FURTHER INFORMATION CONTACT: Charles Yaple, 202-482-0232.

SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation

Adjustment Act of 1990, (Pub. L. 101-410), provided for the regular

evaluation of civil monetary penalties to ensure that they continued to

maintain their deterrent value and that penalty amounts due to the

Federal Government were properly accounted for and collected. On April

26, 1996, the Federal Civil Penalties Inflation Adjustment Act of 1990

was amended by the Debt Collection Improvement Act of 1996 (Public Law

104-134) to require each agency to issue regulations to adjust its

civil monetary penalties (CMP) for inflation. The amendment further

provides that any resulting increases in a CMP due to the inflation

adjustment should apply only to the violations that occur after October

23, 1996. The first inflation adjustment of any penalty shall not

exceed ten percent of such penalty.

A civil monetary penalty is defined as any penalty, fine, or other

sanction that:

1. Is for a specific monetary amount as provided by Federal law, or

has a maximum amount provided for by Federal law; and,

2. Is assessed or enforced by an agency pursuant to Federal law;

and,

3. Is assessed or enforced pursuant to an administrative proceeding

or a civil action in the Federal courts.

This regulation adjusts the civil penalties that are established by

law and assessed or enforced by the Department.

The actual penalty assessed for a particular violation is dependent

upon a variety of factors. For example, the NOAA Civil Administrative

Penalty Schedule (the Schedule), a compilation of internal guidelines

that are used when assessing penalties for violations for most of the

statutes the National Oceanic and Atmospheric Administration enforces,

will be adjusted in a manner consistent with this regulation to

maintain the deterrent effect of the penalties recommended therein. The

penalty ranges in the Schedule are intended to aid enforcement

attorneys in determining the appropriate penalty to assess for a

particular violation. Pursuant to the notice published in the Federal

Register (59 FR 19160, April 22, 1994), the Schedule is maintained and

made

[[Page 55093]]

available for inspection by the public at specific locations.

The inflation adjustment was determined pursuant to the methodology

prescribed by Public Law 101-410, which requires the maximum CMP, or

the minimum and maximum CMP, as applicable, to be increased by the

cost-of-living adjustment. The term ``cost-of-living'' adjustment means

the percentage for each CMP by which the Consumer Price Index (CPI) for

June of the calendar year preceding the adjustment exceeds the CPI for

the month of June of the calendar year in which the amount of such CMP

was last set or adjusted pursuant to law. For the purpose of computing

the First Adjustments, the CPI for June of the calendar year preceding

the adjustment means the CPI for June of 1995.

The raw inflation adjustment amounts are required by Public Law

101-410 to be rounded as follows:

1. If the increase is greater than $0 and less than or equal to

$100, round to the nearest multiple of $10.

2. If the increase is greater than $100 and less than or equal to

$1,000, round to nearest multiple of $100.

3. If the increase is greater than $1,000 and less than or equal to

$10,000, round to the nearest multiple of $1,000.

4. If the increase is greater than $10,000 and less than or equal

to $100,000, round to the nearest multiple of $5,000.

5. If the increase is greater than $100,000 and less than or equal

to $200,000, round to the nearest multiple of $10,000.

6. If the increase is greater than $200,000, round to the nearest

multiple of $25,000.

Public Law 101-410 requires each rounded increase to be added to

the minimum or maximum penalty amount being adjusted, and the total is

the amount of such penalty, as adjusted, subject to the ten percent

limitation provided by Public Law 104-134 for the First Adjustments.

Rulemaking Requirements

It has been determined that this rule is not significant for

purposes of Executive Order 12866. The Department for good cause finds

that notice and opportunity for comment and the 30-day delayed

effective date are unnecessary (5 U.S.C. 553(b)(B) and 5 U.S.C.

553(d)(3)) for this rulemaking. It is unnecessary to ask for notice and

comment and delay the effective date because the Debt Collection

Improvement Act of 1996 (the Act) requires the head of each agency to

adjust its civil monetary penalties for inflation by regulation no

later than October 23, 1996, and the Federal Civil Monetary Penalty

Inflation Adjustment Act of 1990, as amended by the Act, states how to

calculate the inflation adjustment. This rule merely adjusts the

Department's CMPs according to the statutory requirements. The

Department does not have any discretion in making the adjustments.

Because notice and opportunity for comment are not required by 5 U.S.C.

553, or any other law, a Regulatory Flexibility Analysis is not

required and was not prepared for purposes of the Regulatory

Flexibility Act. This rule does not contain information collection

requirements for purposes of the Paperwork Reduction Act.

List of Subjects

15 CFR Part 6

Law enforcement, Penalties.

15 CFR Part 25

Administrative practice and procedure, Fraud, Investigations,

Organizations and functions (Government agencies), Penalties.

15 CFR Part 28

Contract programs, Grant programs, Loan programs, Lobbying,

Penalties.

Dated: October 18, 1996.

Raymond G. Kammer,

Acting, Chief Financial Officer and Assistant Secretary for

Administration.

For the reasons set forth in the preamble, Title 15 of the Code of

Federal Regulations is amended by adding part 6 and amending parts 25

and 28 to read as follows:

1. Part 6 is added to read as follows:

PART 6--CIVIL MONETARY PENALTY INFLATION ADJUSTMENTS

Sec.

6.1 Definitions.

6.2 Purpose and scope.

6.3 Limitation on First Adjustments.

6.4 Adjustments to penalties.

6.5 Effective date of adjustments.

6.6 Subsequent adjustments.

Authority: Sec. 4, as amended, and sec. 5, Pub. L. 101-410, 104

Stat. 890 (28 U.S.C. 2461 note); Pub. L. 104-134, 110 Stat. 1321, 28

U.S.C. 2461 note.

Sec. 6.1 Definitions.

As used in this part:

(a) Inflation Adjustment Act means the Federal Civil Penalties

Inflation Adjustment Act of 1990 (Pub. L. 101-410, October 5, 1990, 104

Stat. 890, 28 U.S.C. 2461 note).

(b) Improvement Act means the Debt Collection Improvement Act of

1996 (Public Law 104-134, April 26, 1996).

(c) Amended Section Four means section 4 of the Inflation

Adjustment Act, as amended by the Improvement Act.

(d) Section Five means section 5 of the Inflation Adjustment Act.

(e) Department means the Department of Commerce.

(f) Secretary means the Secretary of the Department of Commerce.

(g) First Adjustments means the inflation adjustments made by

Sec. 6.4 of this part which, as provided in Sec. 6.5 of this part, are

effective on October 23, 1996.

Sec. 6.2 Purpose and scope.

The purpose of this part is to make the inflation adjustment,

described in Section Five and required by Amended Section Four, of each

minimum and maximum civil monetary penalty provided by law within the

jurisdiction of the Department.

Sec. 6.3 Limitation on First Adjustments.

Each of the First Adjustments may not exceed ten percent (10%) of

the respective penalty being adjusted.

Sec. 6.4 Adjustments to penalties.

The civil monetary penalties provided by law within the

jurisdiction of the respective agencies or bureaus of the Department,

as set forth below in this section, are hereby adjusted in accordance

with the inflation adjustment procedures prescribed in Section Five,

from the amounts of such penalties in effect prior to October 23, 1996,

to the amounts of such penalties, as thus adjusted.

(a) Bureau of Export Administration.

(1) 50 U.S.C. app. 2410(c), Export Administration Act,1 Non-

national security violation: from $10,000 to $11,000.

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\1\ See E.O. 12851 (June 11, 1993).

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(2) 50 U.S.C. app. 2410(c), Export Administration Act 1 and

Section 38 Arms Export Control Act, National security violation: from

$100,000 to $110,000.

(3) 50 U.S.C. 1705(b), International Emergency Economic Powers Act,

as invoked by E.O. 12924 (August 19, 1994) and E.O. 12938 (November 14,

1994), Export Administration Regulation violation: from $10,000 to

$11,000.

(b) Economic Development Administration.

(1) 19 U.S.C. 2349, Trade Act of 1974, False statement, etc.: from

$5,000 to $5,500.

(2) 42 U.S.C. 3220(a), Public Works and Economic Development Act of

1965, False statement, etc.: from $10,000 to $11,000.

(3) 42 U.S.C. 3220(b), Public Works and Economic Development Act of

[[Page 55094]]

1965, Embezzlement, etc.: from $10,000 to $11,000.

(c) Economics and Statistics Administration (ESA)/Census.

(1) 13 U.S.C. 304, Delinquency on delayed filing of export

documentation: from $100 per/day (up to $1,000) to $110 per/day (up to

$1,100).

(2) 13 U.S.C. 305, Collection of foreign trade statistics

violations: from $1,000 to $1,100.

(d) ESA/Bureau of Economic Analysis.

(1) 22 U.S.C. 3105(a), International Investment and Trade in

Services Act, Failure to furnish information: from a minimum of $2,500

to $2,750, and from a maximum of $25,000 to $27,500.

(2) [Reserved]

(e) Import Administration.

(1) 19 U.S.C. 81s, Foreign Trade Zone violation: from $1,000 to

$1,100.

(2) 19 U.S.C. 1677f(f)(4), North American Free Trade Agreement

Protective Order violation: from $100,000 to $110,000.

(f) National Oceanic and Atmospheric Administration.

(1) 15 U.S.C. 5623, Land Remote Sensing Policy Act of 1992

violation: from $10,000 to $10,900.

(2) 15 U.S.C. 5658, Land Remote Sensing Policy Act of 1992

violation: from $10,000 to $10,900.

(3) 16 U.S.C. 773f(3), Northern Pacific Halibut Act of 1982

violation: from $25,000 to $27,500.

(4) 16 U.S.C. 783, Sponge Act (1914), Violation involving catching

or taking within specific areas: from $500 to $550.

(5) 16 U.S.C. 957, Tuna Convention Act of 1950 (1962):

(i) Violation of Sec. 957(a) [Fine at Sec. 957(d)]: from $25,000 to

$27,500.

(A) Subsequent violation of section 957(a) [Fine at Sec. 957(d)]:

from $50,000 to $55,000.

(B) [Reserved]

(ii) Violation of section 957(b) [Fine at section 957(e)]: from

$1,000 to $1,100.

(A) Subsequent violation of Sec. 957(b) Fine at Sec. 957(e)]: from

$5,000 to $5,500.

(B) [Reserved]

(iii) Violation of section 957(c) [Fine at section 957(f)]: from

$100,000 to $110,000.

(6) 16 U.S.C. 971e(e), Atlantic Tunas Convention Act of 1975 (1995)

violation: from $100,000 to $100,000.

(7) 16 U.S.C. 972f(b), Eastern Pacific Tuna Licensing Act of 1984:

(i) Violation of section 972f(a)(1)-(3): from $25,000 to $27,500.

(A) Subsequent violation of Sec. 972f(a)(1)-(3): from $50,000 to

$55,000.

(B) [Reserved]

(ii) Violation of section 972f(a)(4)-(5): from $5,000 to $5,500.

(A) Subsequent violation of Sec. 972f(a)(4)-(5): from $5,000 to

$5,500.

(B) [Reserved]

(iii) Violation of section 972f(a)(6): from $100,000 to $110,000.

(8) 16 U.S.C. 973f(a), South Pacific Tuna Act of 1988 violation:

from $250,000 to $275,000.

(9) 16 U.S.C. 1375(a)(1), Marine Mammal Protection Act of 1972:

(i) Violation: from $10,000 to $11,000.

(ii) Knowing violation (1981): from $20,000 to $22,000.

(10) 16 U.S.C. 1437(c)(1), National Marine Sanctuaries Act (1992)

violation: from $100,000 to $109,000.

(11) 16 U.S.C. 1540(a)(1), Endangered Species Act of 1973:

(i) Knowing violations or engaged in business of section 1538

(a)(1)(A), (B), (C), (D), (E), or (F), (a)(2)(A), (B), (C), or (D),

(c), (d) (other than recordkeeping or filing reports), (f), or (g)

(1988): from $25,000 to $27,500.

(ii) Other knowing or business-related violations (1988): from

$12,000 to $13,200.

(iii) Otherwise (1978): from $500 to $550.

(12) 16 U.S.C. 1851 Note (Sec.5)(c)(1), Atlantic Striped Bass

Conservation Act (1984) violation: from $1,000 to $1,100.

(13) 16 U.S.C. 1858, Magnuson Fishery Conservation and Management

Act (1990): from $100,000 to $110,000.

(14) 16 U.S.C. 2437(a)(1), Antarctic Marine Living Resources

Convention Act (1984):

(i) Knowing violation: from $10,000 to $11,000.

(ii) Violation: from $5,000 to $5,500.

(15) 16 U.S.C. 3373(a), Lacey Act Amendments of 1981:

(i) Violations involving possession, sale, or transport of fish/

plants/wildlife (1981): from $10,000 to $11,000.

(ii) Marking violations of fish/plant/wildlife (1981): from $250 to

$275.

(iii) False labeling/knowingly (1988): from $10,000 to $11,000.

(16) 16 U.S.C. 3606, Atlantic Salmon Convention Act of 1982 (1990):

from $100,000 to $110,000.

(17) 16 U.S.C. 3637, Pacific Salmon Treaty Act of 1985 (1990): from

$100,000 to $110,000.

(18) 30 U.S.C. 1462(a), Deep Seabed Hard Mineral Resources Act

(1980): from $25,000 to $27,500.

(19) 42 U.S.C. 9152(c)(1), Ocean Thermal Energy Conversion Act of

1980: from $25,000 to $27,500.

Sec. 6.5 Effective date of adjustments.

The First Adjustments made by Sec. 6.4 of this part, of the

penalties there specified, are effective on October 23, 1996, and said

penalties, as thus adjusted by the First Adjustments made by Sec. 6.4

of this part, shall apply only to violations occurring after October

23, 1996, and before the effective date of any future inflation

adjustment thereto made subsequent to October 23, 1996, as provided in

Sec. 6.6 of this part. The penalties specified in Sec. 6.4 of this part

which became effective prior to October 23, 1996, shall, without any

First Adjustments thereto, apply only to violations occurring before

October 24, 1996.

Sec. 6.6 Subsequent adjustments.

The Secretary or his or her designee by regulation shall, at least

once every four years after October 23, 1996, make the inflation

adjustment, described in Section Five and required by Amended Section

Four, of each civil monetary penalty provided by law and within the

jurisdiction of the Department.

PART 25--PROGRAM FRAUD CIVIL REMEDIES

2. The authority for 15 CFR part 25 is revised to read as follows:

Authority: Secs. 6101-6104, Pub. L. 99-509, 100 Stat. 1874 (31

U.S.C. 3801-3812); Sec. 4, as amended, and sec. 5, Pub. L. 101-410,

104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 104-134, 110 Stat.

1321, 28 U.S.C. 2461 note.

3. Section 25.3 is amended by revising paragraphs (a)(1)(iv) and

(b)(1)(ii) to read as follows:

Sec. 25.3 Basis for civil penalties and assessments.

(a) * * *

(1) * * *

(iv) Is for payment for the provision of property or services which

the person has not provided as claimed, shall be subject, in addition

to any other remedy that may be prescribed by law, to a civil penalty

of not more than $5,000 for each such claim made on or before October

23, 1996, and of not more than $5,500 for each such claim made after

October 23, 1996.

* * * * *

(b) * * *

(1) * * *

(ii) Contains, or is accompanied by, an express certification or

affirmation of the truthfulness and accuracy of the contents of the

statement, shall be subject, in addition to any other remedy that may

be prescribed by law, to a civil penalty of not more than $5,000 for

each such statement made on or before October 23, 1996, and of not more

than $5,500 for each such statement made after October 23, 1996.

* * * * *

[[Page 55095]]

PART 28--NEW RESTRICTIONS ON LOBBYING

4. The authority for 15 CFR part 28 is revised to read as follows:

Authority: Sec. 319, Pub. L. 101-121 (31 U.S.C. 1352; 5 U.S.C.

301; Sec. 4, as amended, and sec. 5, Pub. L. 101-410, 104 Stat. 890

(28 U.S.C. 2461 note); Pub. L. 104-134, 110 Stat. 1321, 28 U.S.C.

2461 note.

5. Part 28 is amended by revising Sec. 28.400(a) and (b) and (e) to

read as follows:

Sec. 28.400 Penalties.

(a) Any person who makes an expenditure prohibited herein shall be

subject to a civil penalty of not less than $10,000 and not more than

$100,000 for each such expenditure made on or before October 23, 1996,

and of not less than $11,000 and not more than $110,000 for each such

expenditure made after October 23, 1996.

(b) Any person who fails to file or amend the disclosure form (see

Appendix B of this part) to be filed or amended if required herein,

shall be subject to a civil penalty of not less than $10,000 and not

more than $100,000 for each such failure occurring on or before October

23, 1996, and of not less than $11,000 and not more than $110,000 for

each such failure occurring after October 23, 1996.

* * * * *

(e) First offenders under paragraphs (a) or (b) of this section

shall be subject to a civil penalty of $10,000, absent aggravating

circumstances for each such offense committed on or before October 23,

1996, and $11,000 for each such offense committed after October 23,

1996. Second and subsequent offenses by persons shall be subject to an

appropriate civil penalty between $10,000 and $100,000 for each such

offense committed on or before October 23, 1996, and between $11,000

and $110,000 for each such offense committed after October 23, 1996, as

determined by the agency head or his or her designee.

* * * * *

6. Part 28 is further amended by revising paragraph (3) and all

that follows of Appendix A.

Appendix A to Part 28--Certification Regarding Lobbying

* * * * *

(3) The undersigned shall require that the language of this

certification be included in the award documents for all subawards

at all tiers (including subcontracts, subgrants, and contracts under

grants, loans, and cooperative agreements) and that all

subrecipients shall certify and disclose accordingly.

This certification is a material representation of fact upon

which reliance was placed when this transaction was made or entered

into. Submission of this certification is a prerequisite for making

or entering into this transaction imposed by section 1352, title 31,

U.S. Code. Any person who fails to file the required certification

shall be subject to a civil penalty of not less than $10,000 and not

more than $100,000 for each such failure occurring on or before

October 23, 1996, and of not less than $11,000 and not more than

$110,000 for each such failure occurring after October 23, 1996.

Statement for Loan Guarantees and Loan Insurance

The undersigned states, to the best of his or her knowledge and

belief, that:

If any funds have been paid or will be paid to any person for

influencing or attempting to influence an officer or employee of any

agency, a Member of Congress, an officer or employee of Congress, or

an employee of a Member of Congress in connection with this

commitment providing for the United States to insure or guarantee a

loan, the undersigned shall complete and submit Standard Form-LLL,

``Disclosure Form to Report Lobbying,'' in accordance with its

instructions.

Submission of this statement is a prerequisite for making or

entering into this transaction imposed by section 1352, title 31,

U.S. Code. Any person who fails to file the required statement shall

be subject to a civil penalty of not less than $10,000 and not more

than $100,000 for each such failure occurring on or before October

23, 1996, and of not less than $11,000 and not more than $110,000

for each such failure occurring after October 23, 1996.

[FR Doc. 96-27403 Filed 10-22-96; 12:31 pm]

BILLING CODE 3510-17-P