The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing this final rule to adjust certain civil monetary penalties for inflation pursuant to the Fede...
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing this final rule to adjust certain civil monetary penalties for inflation pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
DATES:
This rule is effective April 9, 2020.
FOR FURTHER INFORMATION CONTACT:
OFAC: Assistant Director for Licensing, 202-622-2480; Assistant Director for Regulatory Affairs, 202-622-4855; 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 (
www.treasury.gov/ofac).
Background
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 Debt Collection Improvement Act of 1996 (Pub. L. 104-134, 110 Stat. 1321-373) and 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 annually 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.
OFAC has adjusted its CMPs four times since the Federal Civil Penalties Inflation Adjustment Act Improvements Act went into effect on November 2, 2015: An initial catch-up adjustment on August 1, 2016 (81 FR 43070, July 1, 2016), and annual adjustments on February 10, 2017 (82 FR 10434, February 10, 2017), March 19, 2018 (83 FR 11876, March 19, 2018), and June 14, 2019 (84 FR 27714, June 14, 2019).
Method of Calculation
The method of calculating CMP adjustments applied in this final rule is required by the FCPIA Act. Under the FCPIA Act and the Office of Management and Budget guidance required by the FCPIA Act, annual inflation adjustments subsequent to the initial catch-up adjustment are to be based on the percent change between the Consumer Price Index for all Urban Consumers (“CPI-U”) for the October preceding the date of the adjustment and the prior year's October CPI-U. As set forth in Office of Management and Budget Memorandum M-20-05 of December 16, 2019, the adjustment multiplier for 2020 is 1.01764. In order to complete the 2020 annual adjustment, each current CMP is multiplied by the 2020 adjustment multiplier. Under the FCPIA Act, any increase in CMP must be rounded to the nearest multiple of $1.
New Penalty Amounts
OFAC imposes CMPs pursuant to the penalty authority in five statutes: the Trading With the Enemy Act (50 U.S.C. 4301-4341, at 4315) (TWEA); the International Emergency Economic Powers Act (50 U.S.C. 1701-1706, at 1705) (IEEPA); the Antiterrorism and Effective Death Penalty Act of 1996 (Pub. L. 104-132, 110 Stat. 1212-1319, at 1250; 18 U.S.C. 2339B) (AEDPA); the Foreign Narcotics Kingpin Designation Act (Pub. L. 106-120, 113 Stat. 1626-1636, at 1632; 21 U.S.C. 1901-1908, at 1906) (FNKDA); and the Clean Diamond Trade Act (Pub. L. 108-19, 117 Stat. 631-637, at 634; 19 U.S.C. 3901-3913, at 3907) (CDTA).
The table below summarizes the existing and new maximum CMP amounts.
Statute
Existing maximum
CMP amount
Maximum CMP
amount effective
April 9, 2020
TWEA
$89,170
$90,743
IEEPA
302,584
307,922
AEDPA
79,874
81,283
( printed page 19885)
FNKDA
1,503,470
1,529,991
CDTA
13,669
13,910
In addition to updating these maximum CMP amounts, OFAC is also updating two references to one-half the IEEPA maximum CMP from $151,292 to $153,961.
Finally, OFAC is making the following technical changes in the authorities sections of the parts of 31 CFR chapter V that are being amended by this rule: (i) In the authorities sections of 31 CFR parts 501 and 542, OFAC is correcting a typographic error and is changing certain hyphens to en dashes; (ii) in the authorities sections of 31 CFR parts 510, 560, 561, and 583, OFAC is adding CFR Compilation citations for more recently issued Presidential documents listed in those authorities sections and is changing certain hyphens to en dashes; and (iii) in the authorities sections of 31 CFR parts 535, 536, 539, 541, 544, 546, 547, 548, 549, 566, 576, 584, 588, 592, 594, and 598, OFAC is changing certain hyphens to en dashes.
Public Participation
The FCPIA Act expressly exempts this final rule 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). As such, this final rule is being issued without prior public notice or opportunity for public comment, with an effective date of April 9, 2020. Because the amended regulations involve a foreign affairs function, the provisions of Executive Order 13771 are inapplicable.
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. 3501et seq.
2. In § 501.701(a)(3), remove “$89,170” and add in its place “$90,743”.
3. Amend appendix A to part 501 as follows:
a. In paragraph V.B.2.a.i., remove “$151,292” and add in its place “$153,961” and remove “$302,584” and add in its place “$307,922”.
b. In paragraph V.B.2.a.ii., remove “$302,584” in all three locations where it appears and add in its place in all three locations “$307,922”.
c. In paragraph V.B.2.a.v., remove “$302,584” and add in its place “$307,922”, remove “$89,170” and add in its place “$90,743”, remove “$1,503,470” and add in its place “$1,529,991”, remove “$79,874” and add in its place “$81,283”, and remove “$13,669” and add in its place “$13,910”.
d. Revise paragraph V.B.2.a.vi.
The revision reads as follows:
Appendix A to Part 501—Economic Sanctions Enforcement Guidelines
* * * * *
V. * * *
B. * * *
2. * * *
a. * * *
vi. The following matrix represents the base amount of the proposed civil penalty for each category of violation:
( printed page 19886)
* * * * *
PART 510—NORTH KOREA SANCTIONS REGULATIONS
4. The authority citation for part 510 is revised to read as follows:
