[Federal Register Volume 86, Number 41 (Thursday, March 4, 2021)]
[Rules and Regulations]
[Pages 12537-12539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04377]


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DEPARTMENT OF THE TREASURY

Office of the Secretary of the Treasury

31 CFR Parts 16, 27, and 50


Inflation Adjustment of Civil Monetary Penalties

AGENCY: Departmental Offices Treasury.

ACTION: Final rule; direct final rule.

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SUMMARY: The Department of the Treasury (``Department'' or 
``Treasury'') publishes this final rule to adjust its civil monetary 
penalties (``CMPs'') for inflation as mandated by the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended by the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 
(collectively referred to herein as ``the Act''). The Department also 
publishes this direct final rule to implement the inflation adjustment 
for the civil monetary penalties that may be assessed under 31 CFR part 
16 and updates the inflation adjustments through 2021.

DATES: Effective dates: The final rule amendments to 31 CFR part 27 and 
31 CFR part 50 are effective March 4, 2021.
    The direct final rule amendments to 31 CFR part 16 are effective 
May 3, 2021.
    Comments due: Written comments are due on or before April 5, 2021. 
If the Department receives substantive adverse comment, we will publish 
a timely withdrawal in the Federal Register informing the public that 
this direct final rule will not take effect.

ADDRESSES: You may submit comments on the amendments to 31 CFR part 16 
by any of the following methods:
    --Federal eRulemaking Portal: http://www.regulations.gov.
    --Mail: Richard Dodson, Senior Counsel, General Law, Ethics, and 
Regulation, Department of the Treasury, 1500 Pennsylvania Avenue NW, 
Washington, DC 20220.
    The www.regulations.gov site will accept comments until 11:59 p.m. 
Eastern Time on the comment due date. Received comments, including 
attachments and other supporting materials, are part of the public 
record and subject to public disclosure. Do not enclose any information 
in your comments or supporting materials that you consider confidential 
or

[[Page 12538]]

inappropriate for public disclosure. Properly submitted comments will 
be available for inspection and downloading at http://www.regulations.gov. The Department will consolidate all received 
comments and make them available without change. Commenters are 
encouraged to submit comments electronically via www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For information regarding the 
Terrorism Risk Insurance Program's CMPs, contact Richard Ifft, Senior 
Insurance Regulatory Policy Analyst, Federal Insurance Office, Room 
1410 MT, Department of the Treasury, 1500 Pennsylvania Avenue NW, 
Washington, DC 20220, at (202) 622-2922 (not a toll-free number), or 
Lindsey Baldwin, Senior Insurance Regulatory Policy Analyst, Federal 
Insurance Office, at (202) 622-3220 (not a toll free number). Persons 
who have difficulty hearing or speaking may access these numbers via 
TTY by calling the toll-free Federal Relay Service at (800) 877-8339.
    For information regarding the Treasury-wide CMPs, contact Richard 
Dodson, Senior Counsel, General Law, Ethics, and Regulation, 202-622-
9949.

SUPPLEMENTARY INFORMATION: 

I. Background

    In order to improve the effectiveness of CMPs and to maintain their 
deterrent effect, the Federal Civil Penalties Inflation Adjustment Act 
of 1990, 28 U.S.C. 2461 note (``the Inflation Adjustment Act''), as 
amended by the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (Pub. L. 114-74) (``the 2015 Act''), requires 
Federal agencies to adjust each CMP provided by law within the 
jurisdiction of the agency. The 2015 Act requires agencies to adjust 
the level of CMPs with an initial ``catch-up'' adjustment through an 
interim final rulemaking and to make subsequent annual adjustments for 
inflation, without needing to provide notice and the opportunity for 
public comment required by 5 U.S.C. 553. The Department's initial 
catch-up adjustment interim final rules were published on December 7, 
2016 (Departmental Offices) (81 FR 88600), and for 31 CFR part 27, on 
February 11, 2019 (84 FR 3105). The Department's 2018 annual adjustment 
was published on March 19, 2018 (83 FR 11876), the Department's 2019 
annual adjustment was published on April 17, 2019 (84 FR 15955), and 
the Department's 2020 annual adjustment was published on February 21, 
2020 (85 FR 10063). This rule constitutes the Department's 2021 annual 
adjustment. The 2015 Act provides that any increase in a CMP shall 
apply to CMPs that are assessed after the date the increase takes 
effect, regardless of whether the underlying violation predated such 
increase.\1\
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    \1\ However, the increased CMPs apply only with respect to 
underlying violations occurring after the date of enactment of the 
2015 Act, i.e., after November 2, 2015.
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    This rule also amends regulations that provide civil penalties for 
false, fictitious, or fraudulent claims or written statements under the 
Department's Regulations Implementing the Program Fraud Civil Remedies 
Act of 1986, at 31 CFR part 16. Adjustments to CMPs under that Part 
were inadvertently omitted from the Department's initial catch-up 
adjustment and its subsequent annual adjustments. In particular, this 
rule adjusts for inflation the maximum amount of the civil monetary 
penalties that may be assessed under 31 CFR part 16, and it updates the 
inflation adjustments through 2021 in accordance with instructions from 
the Office of Management and Budget.
    Treasury is currently authorized to impose CMPs against persons who 
make false, fictitious, or fraudulent claims or who make false, 
fictitious, or fraudulent written statements, pursuant to 31 U.S.C. 
3802(a). The maximum CMPs under this statute were established on 
October 21, 1986, and they have not been adjusted. The maximum CMPs 
established were $5,000 for each qualifying false claim or false 
written statement.

II. Method of Calculation

    The method of calculating CMP adjustments applied in this final 
rule is required by the 2015 Act. Under the 2015 Act and the Office of 
Management and Budget guidance required by the 2015 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-21-10 of December 23, 
2020, the adjustment multiplier for 2021 is 1.01182. In order to 
complete the 2021 annual adjustment, each current CMP is multiplied by 
the 2021 adjustment multiplier. Under the 2015 Act, any increase in CMP 
must be rounded to the nearest multiple of $1.
    With regard to the CMPs authorized by 31 U.S.C. 3802(a), 
adjustments had to be made back to 2016. Pursuant to OMB Guidance, the 
relevant inflation factor is 2.15628 for the initial catch-up 
adjustment. Because application of the factor would result in an 
adjustment of greater than 150% for both 31 U.S.C. 3802(a) CMPs, the 
initial adjustment of these penalties is limited to 150%. The relevant 
inflation factors for 2017 through 2021 are 1.01636 (2017), 1.02041 
(2018), 1.02522 (2019), 1.01764 (2020), and 1.01182 (2021).\2\
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    \2\ OMB Memoranda regarding the initial catch-up and yearly 
inflation adjustments include M-16-06 (Feb. 24, 2016), M-17-11 (Dec. 
16, 2016), M-18-03 (Dec. 15, 2017), M-19-04 (Dec. 14, 2018), M-20-05 
(Dec. 16, 2019), and M-21-10 (Dec. 23, 2020).
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    With respect to the $5,000 CMPs, applying the initial 150% 
adjustment would result in a maximum penalty amount of $7,500. 
Multiplying that amount by the 2017 factor of 1.01636 and rounding to 
the nearest dollar would yield a maximum penalty amount of $7,623. 
Multiplying that amount by the 2018 factor of 1.02041 and rounding 
yields a maximum penalty amount of $7,779. Multiplying that amount by 
the 2019 factor of 1.02522 and rounding yields a maximum penalty amount 
of $7,975. Multiplying that amount by the 2020 factor of 1.01764 and 
rounding yields a maximum penalty amount of $8,116. Finally, applying 
the 2021 factor of 1.01182 to that amount results in an adjusted 
maximum penalty of $8,212.

Procedural Matters

1. Administrative Procedure Act

    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015 (Section 701(b)) requires agencies to make annual 
adjustments for inflation to CMPs, without needing to provide notice 
and the opportunity for public comment and a delayed effective date 
required by 5 U.S.C. 553. Additionally, the methodology used for 
adjusting CMPs for inflation is provided by statute, with no discretion 
provided to agencies regarding the substance of the adjustments for 
inflation to CMPs. The Department is charged only with performing 
ministerial computations to determine the dollar amount of adjustments 
for inflation to CMPs. Accordingly, prior public notice, an opportunity 
for public comment, and a delayed effective date are not required for 
this rule, with the exception of the initial catch-up adjustment to 31 
CFR part 16.

2. Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do 
not apply.

[[Page 12539]]

3. Executive Order 12866

    This rule is not a significant regulatory action as defined in 
section 3.f of Executive Order 12866.

4. Paperwork Reduction Act

    The provisions of the Paperwork Reduction Act of 1995, Public Law 
104-13, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR 
part 1320, do not apply to this rule because there are no new or 
revised recordkeeping or reporting requirements.

5. Direct Final Procedures

    Treasury is issuing the amendments to 31 CFR part 16 as a direct 
final rule. The effective date of this rule is May 3, 2021 without 
further notice, unless Treasury receives written adverse comments 
before April 5, 2021.
    If Treasury receives timely written adverse comments on the 
amendments to 31 CFR part 16, Treasury will withdraw the regulation 
before its effective date.

List of Subjects

31 CFR Part 16

    Administrative Practice and Procedure, Claims, Fraud, Penalties.

31 CFR Part 27

    Administrative Practice and Procedure, Penalties.

31 CFR Part 50

    Insurance, Terrorism.

Authority and Issuance

    For the reasons set forth in the preamble, parts 16, 27, and 50 of 
title 31 of the Code of Federal Regulations are amended as follows:

PART 16--REGULATIONS IMPLEMENTING THE PROGRAM FRAUD CIVIL REMEDIES 
ACT OF 1986

0
1. The authority citation for part 16 continues to read as follows:

    Authority:  31 U.S.C. 3801-3812.


0
2. Effective May 3, 2021 amend Sec.  16.3 by revising paragraphs 
(a)(1)(iv) and (b)(1)(ii) to read as follows:


Sec.  16.3  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 $8,212 for each such claim.
* * * * *
    (b) * * * (1) * * *
    (ii) Includes or is accompanied by an express certification or 
affirmation of the truthfulness and accuracy of the content 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 $8,212 for 
each such statement.
* * * * *

PART 27--CIVIL PENALTY ASSESSMENT FOR MISUSE OF DEPARTMENT OF THE 
TREASURY NAMES, SYMBOLS, ETC.

0
3. The authority citation for part 27 continues to read as follows:

    Authority:  31 U.S.C. 321, 333.


0
4. Amend Sec.  27.3 by revising paragraph (c) to read as follows:


Sec.  27.3  Assessment of civil penalties.

* * * * *
    (c) Civil Penalty. An assessing official may impose a civil penalty 
on any person who violates the provisions of paragraph (a) of this 
section. The amount of a civil monetary penalty shall not exceed $8,212 
for each and every use of any material in violation of paragraph (a), 
except that such penalty shall not exceed $41,056 for each and every 
use if such use is in a broadcast or telecast.
* * * * *

PART 50--TERRORISM RISK INSURANCE PROGRAM

0
5. The authority citation for part 50 is revised to read as follows:

    Authority:  5 U.S.C. 301; 31 U.S.C. 321; Title I, Pub. L. 107-
297, 116 Stat. 2322, as amended by Pub. L. 109-144, 119 Stat. 2660, 
Pub. L. 110-160, 121 Stat. 1839, Pub. L. 114-1, 129 Stat. 3, and 
Pub. L. 116-94, 133 Stat. 2534 (15 U.S.C. 6701 note); Pub. L. 114-
74, 129 Stat. 601, Title VII (28 U.S.C. 2461 note).


0
6. Amend Sec.  50.83 by revising paragraph (a) to read as follows:


Sec.  50.83  Adjustment of civil monetary penalty amount.

    (a) Inflation Adjustment. Any penalty under the Act and these 
regulations may not exceed the greater of $1,436,220 and, in the case 
of any failure to pay, charge, collect or remit amounts in accordance 
with the Act or these regulations such amount in dispute.
* * * * *

John T. Norris,
Assistant Secretary for Management (Acting).
[FR Doc. 2021-04377 Filed 3-3-21; 8:45 am]
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