Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices 79

Commodity Description and Coding

System Explanatory Notes are not

legally binding, they do represent the

international interpretation of the

Harmonized System and provide

guidance in determining the scope of

the various headings.

As Customs believes the garments in

the previously named rulings were

properly classified in heading 6208,

HTSUS, based on the examination of the

garments by Customs which determined

that the garments were sleepwear, it is

only the subheadings in which the

garments were classified that is viewed

as an error. Clearly, these garments were

of a type which may be characterized as

‘‘intimate apparel’’, i.e., garments which

are either worn under other apparel

(undergarments) or, garments which are

not worn outside the home and when

worn in the home would be worn only

in the presence of family or intimate

friends. Therefore, Customs is

modifying these decisions to reflect the

proper classification of the garments in

subheading 6208.91.3010, HTSUSA, if

of cotton or in subheading

6208.92.0030, HTSUSA, if of man-made

fibers. These subheadings provide for,

inter alia, women’s other garments

similar to nightdresses, pajamas,

negligees, bathrobes, and dressing

gowns.

Authority

This notice is published pursuant to

5 U.S.C. 552 (a)(1)(D). Publication of

this notice in the Federal Register

pursuant to the foregoing provision

provides a higher degree of notice than

that required under section 625 of the

Tariff Act of 1930 (19 U.S.C. 1625), as

amended by section 623 of Title VI

(Customs Modernization) of the North

American Free Trade Agreement

Implementation Act (Pub. L. 103–182,

107 Stat. 2057, (hereinafter section 625).

Accordingly, it is Customs position that

publication pursuant to section 625 is

unnecessary. Customs is using Federal

Register publication 1) because all

rulings to which this notice relates may

not have been identified, 2) in order to

ensure a uniform and consistent

position with respect to classification of

this merchandise at an early date, 3) to

assist Customs in its responsibility to

administer informed compliance with

respect to the trade community, and 4)

as an aid to the importing community in

exercising reasonable care with respect

to importations of merchandise subject

to this notice.

George J. Weise,

Commissioner of Customs.

Approved: November 29, 1995.

Dennis M. O’Connell,

Acting Deputy Assistant Secretary of the

Treasury.

[FR Doc. 95–31499 Filed 12–29–95; 8:45 am]

BILLING CODE 4820–02–P

UNITED STATES SENTENCING

COMMISSION

Sentencing Guidelines for United

States Courts

AGENCY: United States Sentencing

Commission.

ACTION: Notice of proposed amendments

to sentencing guidelines, policy

statements, and commentary. Request

for public comment.

SUMMARY: The Commission is

considering promulgating certain

amendments to the sentencing

guidelines, policy statements, and

commentary. This notice sets forth the

proposed amendments and, for each

proposed amendment, a synopsis of the

issues addressed by that amendment.

The Commission seeks comment on the

proposed amendments, alternative

proposed amendments, and any other

aspect of the sentencing guidelines,

policy statements, and commentary. The

Commission may submit amendments

to the Congress not later than May 1,

1996.

DATES: Written public comment should

be received by the Commission not later

than March 6, 1996, in order to be

considered by the Commission in the

promulgation of amendments and in the

possible submission of those

amendments to the Congress by May 1,

1996.

ADDRESSES: Public comment should be

sent to: United States Sentencing

Commission, One Columbus Circle,

N.E., Suite 2–500, Washington, D.C.

20002–8002, Attention: Public

Information.

FOR FURTHER INFORMATION CONTACT:

Michael Courlander, Public Information

Specialist, Telephone: (202) 273–4590.

SUPPLEMENTARY INFORMATION: The

United States Sentencing Commission is

an independent agency in the judicial

branch of the United States

Government. The Commission

promulgates sentencing guidelines and

policy statements for federal sentencing

courts pursuant to 28 U.S.C. 994(a). The

Commission also periodically reviews

and revises previously promulgated

guidelines pursuant to 28 U.S.C. 994(o)

and submits guideline amendments to

the Congress not later than the first day

of May each year pursuant to 28 U.S.C.

994(p).

Ordinarily, the rule-making

requirements of the Administrative

Procedure Act are inapplicable to

judicial agencies; however, 28 U.S.C.

994(x) makes the rule-making

provisions of 5 U.S.C. 553 applicable to

the promulgation of sentencing

guidelines by the Commission.

The proposed amendments are

presented in this notice in one of two

formats. First, some of the amendments

are proposed as specific revisions of a

guideline, policy statement, or

commentary. Second, the Commission

has highlighted certain issues for

comment and invites suggestions for

specific amendment language and, in

the case of penalties for cocaine

offenses, related legislative proposals.

Section 1B1.10 of the United States

Sentencing Commission Guidelines

Manual sets forth the Commission’s

policy statement regarding retroactivity

of amended guideline ranges. The

Commission requests comment as to

whether any of the proposed

amendments should be made retroactive

under this policy statement.

As set forth more fully in its notice

dated September 22, 1995, (see 60 F.R.

49316–17), the Commission currently is

engaged in a comprehensive guideline

assessment and simplification effort.

This project is expected to be a two-year

initiative that may produce amendments

in the 1996–97 amendment cycle for

submission to Congress not later than

May 1, 1997. During this initial year of

the project, the Commission generally

plans to promulgate no guideline

amendments, except as may be

necessary to implement legislation

enacted by Congress. The Commission

believes that a one-year hiatus in the

heretofore annual amendment process is

appropriate at this juncture to allow a

guideline settling period and to permit

more deliberate consideration of broader

guideline concerns.

The matters published for comment in

this notice pertaining to sentencing

policy for cocaine and money

laundering offenses are responsive to

Pub. L. 104–38 (Oct. 30, 1995). The

matters relating to proposed guideline

amendments for food and drug offenses

are a product of a staff working group

that has considered these issues during

the past two years. The Commission

voted at its September 5, 1995, meeting,

prior to its subsequent decision

declaring a one-year hiatus on

Commission amendment initiatives, to
80 Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices

publish these amendments for

comment.

Publication of these matters for

comment reflects only the Commission’s

determination that public comment on

the amendment or issue would be

welcome and helpful at this time. The

Commission may or may not act upon

these proposals in the current

amendment cycle.

Authority. 28 U.S.C. 994 (a), (o), (p), (x).

Richard P. Conaboy,

Chairman.

Cocaine Offenses

Chapter Two, Part D (Offenses Involving

Drugs)

1. Issue for Comment: The Violent

Crime Control and Law Enforcement

Act of 1994 directed the Commission to

issue a report and recommendations on

the issue of cocaine and federal

sentencing policy. On February 28,

1995, the Commission issued its report

to Congress in which it recommended

that changes be made to the current

cocaine sentencing scheme, including

changes to the 100-to-1 quantity ratio

between crack cocaine and powder

cocaine used in calculating sentences in

the current guidelines. The report

indicated that the Commission would

investigate the feasibility of creating

new guideline enhancements and

amending current enhancements to

more fully and fairly address the harms

associated with cocaine offenses

generally and the harms associated with

crack cocaine offenses, specifically.

Based on these new enhancements, the

Commission would make appropriate

adjustments in the guideline quantity

ratio.

On May 1, 1995, the Commission sent

to Congress proposed changes to the

sentencing guidelines implementing the

recommendations made in the report.

See 60 Fed. Reg. 25074, 25075–77 (May

10, 1995). The proposed guidelines

included provisions that would have

enhanced penalties for drug offenders,

including crack cocaine offenders, who

used weapons during their drug crimes,

involved minors in the drug crimes, or

committed their crimes near a school, or

for other specified reasons that made

those crimes more dangerous to society.

In addition, the proposed amendments

adjusted the guideline quantity ratio so

that the base sentences, from which the

enhancements would be added, would

be the same for both powder cocaine

and crack cocaine offenses.

Pursuant to 28 U.S.C. 994(p),

Congress subsequently enacted

legislation disapproving the

Commission’s proposed amendments.

See Pub. L. 104–38, 109 Stat. 334 (Oct.

30, 1995). In the legislation, Congress

directed the Commission to:

‘‘(1) * * * submit to Congress

recommendations (and an explanation

therefor), regarding changes to the

statutes and sentencing guidelines

governing sentences for unlawful

manufacturing, importing, exporting,

trafficking of cocaine, and like offenses,

including unlawful possession with

intent to commit any of the foregoing

offenses, and attempt and conspiracy to

commit any of the foregoing offenses.

The recommendations shall reflect the

following considerations—

(A) the sentence imposed for

trafficking in a quantity of crack cocaine

should generally exceed the sentence

imposed for trafficking in a like quantity

of powder cocaine;

(B) high-level wholesale cocaine

traffickers, organizers, and leaders, of

criminal activities should generally

receive longer sentences than low-level

retail cocaine traffickers and those who

played a minor or minimal role in such

activity;

(C) if the Government establishes that

a defendant who traffics in powder

cocaine has knowledge that such

cocaine will be converted into crack

cocaine prior to its distribution to

individual users, the defendant should

be treated at sentencing as though the

defendant had trafficked in crack

cocaine; and

(D) an enhanced sentence should

generally be imposed on a defendant

who, in the course of an offense

described in this subsection—

(i) murders or causes serious bodily

injury to an individual;

(ii) uses a dangerous weapon;

(iii) uses or possesses a firearm;

(iv) involves a juvenile or a woman

who the defendant knows or should

know to be pregnant;

(v) engages in a continuing criminal

enterprise or commits other criminal

offenses in order to facilitate his drug

trafficking activities;

(vi) knows, or should know, that he is

involving an unusually vulnerable

person;

(vii) restrains a victim;

(viii) traffics in cocaine within 500

feet of a school;

(ix) obstructs justice;

(x) has a significant prior criminal

record; or

(xi) is an organizer or leader of drug

trafficking activities involving five or

more persons.

(2) Ratio.—The recommendations

described in the preceding subsection

shall propose revision of the drug

quantity ratio of crack cocaine to

powder cocaine under the relevant

statutes and guidelines in a manner

consistent with the ratios set for other

drugs and consistent with the objectives

set forth in section 3553(a) of title 28

United States Code.’’

The Commission invites comment

regarding implementation of this

congressional directive, including

comment on appropriate enhancements

for violence and other harms associated

with crack and powder cocaine, as well

as the quantity ratio that should be

substituted for the current 100-to-1

ratio. (Note that the reference in the

congressional directive to section

3553(a) of title 28, United States Code,

should be a reference to section 3553(a)

of title 18, United States Code.)

A number of amendment proposals

and issues for comment relating to

cocaine sentencing policy are set forth

in the Federal Registers of January 9

and March 15, 1995. See 60 Fed. Reg.

2430, 2445–51; 14054–55.

Money Laundering Offenses

Chapter Two, Part S (Money Laundering

and Monetary Transaction Reporting)

2. Synopsis of Proposed Amendment:

In 1992, the Commission formed a staff

working group to assess the operation of

the guidelines for money laundering

and monetary transaction reporting

offenses. The group produced a report

and recommended amendments. The

Commission subsequently adopted a

revised guideline covering monetary

transaction reporting offenses. See

Guidelines Manual, Appendix C,

Amendment 490 (effective November 1,

1993). In 1995, after considering an

updated analysis prepared by the

working group, the Commission

adopted a revised, consolidated

guideline for money laundering

offenses. See amendment 18, 60 Fed.

Reg. 25074, 25085–86 (May 10, 1995).

This amendment subsequently was

disapproved by Congress. See Pub. L.

104–38, 109 Stat. 334 (Oct. 30, 1995).

Congressional debate related to the

disapproval legislation appears to

suggest, however, that the Commission

is expected to modify and resubmit

appropriate amendments to the money

laundering guidelines, taking into

account concerns that serious money

laundering offenses continue to receive

appropriately severe punishment. See

generally 14 Cong. Rec. H10,255–84

(daily ed. Oct. 18, 1995).

Accordingly, to frame the discussion

for continued efforts to develop

appropriate revisions to the money

laundering guidelines, the Commission

is republishing for comment the

amendment submitted to Congress in

1995 along with a Department of Justice

alternative. The Commission invites
Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices 81

comment on these alternative proposals

or on some variation of them that

appropriately addresses the goals of: (1)

Assuring that offense levels comport

with the seriousness of the defendant’s

offense conduct; and (2) avoiding

unwarranted sentencing disparities as a

result of charging practices.

(A) Proposed Amendment

Sections 2S1.1 and 2S1.2 are deleted

and the following inserted in lieu

thereof:

‘‘§ 2S1.1. Laundering of Monetary

Instruments; Engaging in Monetary

Transactions in Property Derived from

Unlawful Activity

(a) Base Offense Level (Apply the

Greatest)

(1) The offense level for the

underlying offense from which the

funds were derived, if the defendant

committed the underlying offense (or

otherwise would be accountable for the

commission of the underlying offense

under § 1B1.3 (Relevant Conduct)) and

the offense level for that offense can be

determined; or

(2) 12 plus the number of offense

levels from the table in § 2F1.1 (Fraud

and Deceit) corresponding to the value

of the funds, if the defendant knew or

believed that the funds were the

proceeds of, or were to be used to

promote, an offense involving the

manufacture, importation, or

distribution of controlled substances or

listed chemicals; a crime of violence; or

an offense involving firearms or

explosives, national security, or

international terrorism; or

(3) 8 plus the number of offense levels

from the table in § 2F1.1 (Fraud and

Deceit) corresponding to the value of the

funds.

(b) Specific Offense Characteristics

(1) If the defendant knew or believed

that (A) the financial or monetary

transactions, transfers, transportation, or

transmissions were designed in whole

or in part to conceal or disguise the

proceeds of criminal conduct, or (B) the

funds were to be used to promote

further criminal conduct, increase by 2

levels.

(2) If subsection (b)(1)(A) is applicable

and the offense (A) involved placement

of funds into, or movement of funds

through or from, a company or financial

institution outside the United States, or

(B) otherwise involved a sophisticated

form of money laundering, increase by

2 levels.

Commentary

Statutory Provisions: 18 U.S.C. 1956, 1957.

Application Notes

1. ‘‘Value of the funds’’ means the

value of the funds or property involved

in the financial or monetary

transactions, transportation, transfers, or

transmissions that the defendant knew

or believed (A) were criminally derived

funds or property, or (B) were to be used

to promote criminal conduct.

When a financial or monetary

transaction, transfer, transportation, or

transmission involves legitimately

derived funds that have been

commingled with criminally derived

funds, the value of the funds is the

amount of the criminally derived funds,

not the total amount of the commingled

funds. For example, if the defendant

deposited $50,000 derived from a bribe

together with $25,000 of legitimately

derived funds, the value of the funds is

$50,000, not $75,000.

Criminally derived funds are any

funds that are derived from a criminal

offense; e.g., in a drug trafficking

offense, the total proceeds of the offense

are criminally derived funds. In a case

involving fraud, however, the loss

attributable to the offense occasionally

may be considerably less than the value

of the criminally derived funds (e.g., the

defendant fraudulently sells stock for

$200,000 that is worth $120,000 and

deposits the $200,000 in a bank; the

value of the criminally derived funds is

$200,000, but the loss is $80,000). If the

defendant is able to establish that the

loss, as defined in § 2F1.1 (Fraud and

Deceit), was less than the value of the

funds (or property) involved in the

financial or monetary transactions,

transfers, transportation, or

transmissions, the loss from the offense

shall be used as the ’value of the funds.’

2. If the defendant is to be sentenced

both on a count for an offense from

which the funds were derived and on a

count under this guideline, the counts

will be grouped together under

subsection (c) of § 3D1.2 (Groups of

Closely-Related Counts).

3. Subsection (b)(1)(A) provides an

increase for those cases that involve

efforts to make criminally derived funds

appear to have a legitimate source. This

subsection will apply, for example,

when the defendant conducted a

transaction through a straw party or a

front company, concealed a moneylaundering transaction in a legitimate

business, or used an alias or otherwise

provided false information to disguise

the true source or ownership of the

funds.

4. In order for subsection (b)(1)(B) to

apply, the defendant must have known

or believed that the funds would be

used to promote further criminal

conduct, i.e, criminal conduct beyond

the underlying criminal conduct from

which the funds were derived.

5. Subsection (b)(2) provides an

additional increase for those money

laundering cases that are more difficult

to detect because sophisticated steps

were taken to conceal the origin of the

money. Subsection (b)(2)(B) will apply,

for example, if the offense involved the

’layering’ of transactions, i.e., the

creation of two or more levels of

transaction that were intended to appear

legitimate.

Background

The statutes covered by this guideline

were enacted as part of the Anti-Drug

Abuse Act of 1986. These statutes cover

a wide range of conduct. For example,

they apply to large-scale operations that

engage in international laundering of

illegal drug proceeds. They also apply to

a defendant who deposits $11,000 of

fraudulently obtained funds in a bank.

In order to achieve proportionality in

sentencing, this guideline generally

starts from a base offense level

equivalent to that which would apply to

the specified unlawful activity from

which the funds were derived. The

specific offense characteristics provide

enhancements if the offense was

designed to conceal or disguise the

proceeds of criminal conduct and if the

offense involved sophisticated money

laundering.’’.

Section 3D1.2(d) is amended in the

second paragraph by deleting ‘‘2S1.2,’’.

Section 8C2.1(a) is amended by

deleting ‘‘2S1.2,’’.

The Commentary to § 8C2.4 captioned

‘‘Application Notes’’ is amended in

Note 5 by deleting ‘‘§ 2S1.1 (Laundering

of Monetary Instruments); § 2S1.2

(Engaging in Monetary Transactions in

Property Derived from Specified

Unlawful Activity); and § 2S1.3

(Structuring Transactions to Evade

Reporting Requirements; Failure to

Report Cash or Monetary Transactions;

Failure to File Currency and Monetary

Instrument Report; Knowingly Filing

False Reports)’’; and by inserting ‘‘or’’

immediately before ‘‘§ 2R1.1’’.

Appendix A (Statutory Index) is

amended in the line reference to 18

U.S.C. § 1957 by deleting ‘‘2S1.2’’ and

inserting in lieu thereof ‘‘2S1.1’’.

(B) Proposed Amendment—Department

of Justice Alternative

Sections 2S1.1 and 2S1.2 are deleted

and the following inserted in lieu

thereof:

‘‘§ 2S1.1. Laundering of Monetary

Instruments; Engaging in Monetary

Transactions in Property Derived from

Unlawful Activity
82 Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices

(a) Base Offense Level (Apply the

Greatest)

(1) the offense level for the underlying

offense from which the funds were

derived plus 2 levels, if the defendant

committed the underlying offense and

the offense level for that offense can be

determined; or

(2) 16 plus the number of offense

levels from the table in § 2F1.1 (Fraud

and Deceit) corresponding to the value

of the funds, if the defendant knew or

believed that the funds were the

proceeds of an unlawful activity

involving a matter of national security

or munitions control, a crime of

violence, a firearm, an explosive, the

sexual exploitation of children, or the

manufacture, importation, or

distribution of a controlled substance, or

were intended to promote those

offenses; or

(3) 12 plus the number of offense

levels from the table in § 2F1.1 (Fraud

and Deceit) corresponding to the value

of the funds.

(b) Specific Offense Characteristics

(1) Apply the greater:

(A) If the defendant knew or believed

that (i) the transactions were designed

in whole or in part to conceal or

disguise the proceeds of criminal

conduct, or (ii) the funds were to be

used to promote further criminal

activity, increase by 2 levels; or

(B) If the defendant (i) intended to

engage in conduct constituting a

violation of section 7201 or 7206 of the

Internal Revenue Code of 1986, or (ii)

knew or believed that the transactions

were designed in whole or in part to

avoid a transaction reporting

requirement under State or Federal law,

increase by 1 level.

(2) If subsection (b)(1)(A) is applicable

and the offense involved (A) placement

of funds into, or movement of funds

through or from, a company or financial

institution outside the United States, or

(B) otherwise involved the used of a

sophisticated form of money laundering,

increase by 2 levels.

(c) Special Instruction for Receipt and

Deposit Cases

The offense level is 8 plus the number

of offense levels from the table in

§ 2F1.1 (Fraud and Deceit)

corresponding to the value of the funds

where all of the following are present:

(1) the defendant’s money laundering

conduct is limited solely to the deposit

of the unlawful proceeds into a

domestic financial institution account

that is readily identifiable as belonging

to the person who committed the

specified unlawful activity; (2) the

offense was not intended or designed,

either in whole or in part, to conceal or

disguise the nature, location, source,

ownership, or control of the proceeds of

specified unlawful activity, to violate

section 7201 or 7206 of the Internal

Revenue Code of 1986, or to avoid a

transaction reporting requirement under

State or Federal law; and

(3) the specified unlawful activity did

not involve a matter of national security

or munitions control, a crime of

violence, a firearm, an explosive, the

sexual exploitation of children, or the

manufacture, importation, or

distribution of a controlled substance.

Commentary

Statutory Provisions: 18 U.S.C. 1956, 1957.

Application Notes

1. ‘‘Value of the funds’’ means the

value of the funds or property involved

in the financial or monetary

transactions, transportation, transfers, or

transmissions that the defendant knew

or believed (A) were criminally derived

funds or property, or (B) were to be used

to promote criminal conduct.

When a financial or monetary

transaction, transfer, transportation, or

transmission involves legitimately

derived funds that have been

commingled with criminally derived

funds, the value of the funds is the

amount of the criminally derived funds,

not the total amount of the commingled

funds. For example, if the defendant

deposited $50,000 derived from a bribe

together with $25,000 of legitimately

derived funds, the value of the funds is

$50,000, not $75,000.

Where a financial or monetary

transaction, transfer, transportation, or

transmission involves legitimately

derived funds from a place in the

United States to or through a place

outside the United States or to a place

in the United States from or through a

place outside the United States with the

intent to promote the carrying on of

specified unlawful activity, the value of

the funds is the amount intended to

promote the carrying on of specified

unlawful activity.

2. If the defendant is to be sentenced

both on a count for an offense from

which the funds were derived and on a

count under this guideline, the counts

will be grouped together under

subsection (c) of § 3D1.2 (Groups of

Closely-Related Counts).

3. Subsection (b)(1)(A) is intended to

provide an increase for those cases that

involve efforts to make criminally

derived funds appear to have a

legitimate source. This subsection will

apply, for example, when the defendant

conducted a transaction through a straw

party or a front company, concealed a

money-laundering transaction in a

legitimate business, or used an alias or

otherwise provided false information to

disguise the true source or ownership of

the funds.

4. In order for subsection (b)(1)(B) to

apply, the defendant must have known

or believed that the funds would be

used to promote further criminal

conduct, i.e., criminal conduct beyond

the underlying criminal conduct from

which the funds were derived.

5. Subsection (b)(2) is designed to

provide an additional increase for those

money laundering cases that are more

difficult to detect because sophisticated

steps were taken to conceal the origin of

the money. Subsection (b)(2)(B) will

apply, for example, if the offense

involved the ‘layering’ of transactions,

i.e., the creation of two or more levels

of transaction that were intended to

appear legitimate, or if the offense

involved the use of individuals or

organizations engaged in the business of

money laundering, i.e., those who

receive payment or other benefit for

conducting or assisting in the

transaction.

6. The lower offense level provided by

the special instruction in subsection (c)

is reserved for offenses which meet the

specified criteria. First, the defendant’s

money laundering conduct must be

limited solely to the deposit of the

unlawful proceeds into a domestic

financial institution account that is

readily identifiable as belonging to the

person who committed the specified

unlawful activity. Second, the offense

cannot have been intended or designed,

either in whole or in part, to conceal or

disguise the nature, location, source,

ownership, or control of the proceeds of

the specified unlawful activity, to

violate section 7201 or 7206 of the

Internal Revenue Code of 1986, or to

avoid a transaction reporting

requirement under State or Federal law.

Finally, the underlying unlawful

activity must not have involved a matter

of national security or munitions

control, a crime of violence, a firearm,

an explosive, the sexual exploitation of

children, or the manufacture,

importation, or distribution of a

controlled substance.

For example, a defendant who

deposits a check constituting the

proceeds of his or her spouse’s specified

unlawful activity into the spouse’s

account would qualify for the reduced

level of subsection (c) if all the other

limitations are present.’’.
Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices 83

Food and Drug Offenses

Chapter Two, Parts D (Offenses

Involving Drugs), F (Offenses Involving

Fraud or Deceit), and N (Offenses

Involving Food, Drugs, Agricultural

Products, and Odometer Laws); Chapter

Eight, Part C (Fines)

3. Synopsis of Proposed Amendment:

In 1993, the Commission established a

Food and Drug Working Group to study

the application of the guidelines to food

and drug offenses and to assess the

feasibility of developing organizational

guidelines for offenses covered by

§ 2N2.1. During the first year of its work,

the group studied food and drug

offenses and the operation of § 2N2.1 as

it applied to individual defendants. In

its second year, the group focussed its

attention on the development of

organizational guidelines for these

offenses. In February 1995, a final report

was submitted to the Commission

outlining the group’s findings and

conclusions. The report is available for

inspection at the Commission or

through the Depository Library System

of the U.S. Government Printing Office.

The report also can be downloaded

through USSC OnLine, the

Commission’s public access electronic

bulletin board, by dialing (202) 273–

4709.

On September 5, 1995, the

Commission voted to publish for

comment the working group’s proposals

for handling food and drug offenses

under the guidelines. With minor

changes to the fraud guideline (§ 2F1.1),

the working group determined that food

and drug cases for individuals and

organizations could appropriately be

sentenced under that guideline. The

working group’s proposal would delete

existing § 2N2.1 (Violations of Statutes

and Regulations Dealing With Any

Food, Drug, Biological Product, Device,

Cosmetic, or Agricultural Product) in its

entirety and replace references to that

guideline in the statutory index with

references to § 2F1.1. To address

concerns about risk of harm associated

with these offenses, the working group

recommended adding an application

note to § 2F1.1 inviting an upward

departure in circumstances in which the

offense placed a large number of

persons at risk of serious bodily injury.

(A) Proposed Amendment—

Consolidation of §§ 2F1.1 and 2N2.1

Section 2N2.1 is deleted in its

entirety.

Section 2F1.1 is amended in the title

by inserting ‘‘; Violations of Statutes and

Regulations Dealing With Any Food,

Drug, Biological Product, Device,

Cosmetic, or Agricultural Product’’ at

the end thereof.

The Commentary to § 2F1.1 captioned

‘‘Statutory Provisions’’ is amended by

inserting ‘‘21 U.S.C. §§ 101–105, 111,

115, 117, 120– 122, 124, 126, 134(a)–(e),

135a, 141, 143–145, 151–158, 331,

333(a)(1)–(2), 333(b), 458–461, 463, 466,

610–611, 614, 617, 619– 620, 642–644,

676’’ immediately following ‘‘2315’’.

The Commentary to § 8C2.1 captioned

‘‘Application Notes’’ is amended in

Note 2 by deleting the second sentence.

Appendix A is amended as follows:

in the line beginning ‘‘7 U.S.C. § 87b’’

by deleting ‘‘2N2.1’’ and inserting in

lieu thereof ‘‘2F1.1’’;

in the lines beginning ‘‘7 U.S.C.

§ 149’’ through ‘‘7 U.S.C. § 195’’ by

deleting ‘‘2N2.1’’ and inserting in lieu

thereof ‘‘2F1.1’’;

in the lines beginning ‘‘7 U.S.C.

§ 281’’ through ‘‘7 U.S.C. § 516’’ by

deleting ‘‘2N2.1’’ and inserting in lieu

thereof ‘‘2F1.1’’;

in the lines beginning ‘‘21 U.S.C.

§ 101’’ through ‘‘21 U.S.C. § 333(a)(1)’’

by deleting ‘‘2N2.1’’ and inserting in

lieu thereof ‘‘2F1.1’’;

in the line beginning ‘‘21 U.S.C.

§ 333(a)(2)’’ by deleting ‘‘, 2N2.1’’;

in the lines beginning ‘‘21 U.S.C.

§ 333(b)’’ through ‘‘21 U.S.C. § 620’’ by

deleting ‘‘2N2.1’’ and inserting in lieu

thereof ‘‘2F1.1’’;

in the lines beginning ‘‘21 U.S.C.

§ 642’’ through ‘‘21 U.S.C. § 644’’ by

deleting ‘‘2N2.1’’ and inserting in lieu

thereof ‘‘2F1.1’’;

in the line beginning ‘‘21 U.S.C.

§ 676’’ by deleting ‘‘2N2.1’’ and

inserting in lieu thereof ‘‘2F1.1’’;

in the line beginning ‘‘42 U.S.C.

§ 262’’ by deleting ‘‘2N2.1’’ and

inserting in lieu thereof ‘‘2F1.1’’.

(B) Proposed Amendment—Upward

Departures for Offenses Involving Risk

to a Large Number of Persons

The Commentary to § 2F1.1 captioned

‘‘Application Notes’’ is amended by

inserting the following additional note:

‘‘11. Subsection (b)(4) applies when

the offense caused a conscious or

reckless risk of serious bodily injury to

one or more persons. If the risk affected

a large number of persons, an upward

departure may be warranted.’’

and by renumbering notes 11–18 as

12–19, respectively.

(C) Additional Issue for Comment

The Commission invites comment as

to whether ‘‘gain’’ should be a substitute

for ‘‘loss’’ when the essence of the

offense is fraud against regulatory

authorities with no economic loss.

Currently, Application Note 8 of § 2F1.1

provides that gain realized from a

covered offense is an alternative

estimate that ordinarily will

underestimate the loss. The Fourth and

Seventh Circuits have held, however,

that when a case involves no loss, the

defendant’s gain may not be used to

calculate loss under § 2F1.1. See United

States v. Chatterji, 46 F. 3d 1336 (4th

Cir. 1995) and United States v.

Anderson, 45 F. 3d 217 (7th Cir. 1995).

[FR Doc. 95–31570 Filed 12–29–95; 8:45 am]

BILLING CODE 2210–40–P