03-1895. Civil Monetary Penalties; Adjustments

AGENCY:

Office of the Secretary, Commerce.

ACTION:

Final rule.

SUMMARY:

This final rule is being issued to adjust civil monetary penalties provided by law within the jurisdiction of the Department of Commerce (the Department). As required by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996, the Secretary of Commerce adjusted the Department's civil monetary penalties for inflation on October 24, 1996, and subsequently on November 1, 2000. On September 30, 2002, the United States General Accounting Office (GAO) sent the Secretary of Commerce a letter indicating that the Department's November 1, 2000, adjustment was inconsistent with the requirements of the statute, and recommending corrective action. The purpose of this rule is to bring the Department into compliance with GAO's interpretation of the statute.

DATES:

This rule is effective January 29, 2003.

ADDRESSES:

Office of Financial Management, Department of Commerce, 14th and Constitution Avenue, MS 6827, Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT:

Lisa Casias, 202-482-0766.

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 (Pub. L. 104-134) to require each agency to issue regulations to adjust its civil monetary penalties (CMP) for inflation at least every four years. The amendment further provides that any resulting increases in a CMP due to the inflation adjustment should apply only to the violations that occur subsequent to the date of the publication in the Federal Register of the increased amount of the CMP. The first inflation adjustment of any penalty shall not exceed ten percent of such penalty.

The amount of CMP adjustments is based on changes to the Consumer Price Index from June of the calendar year in which penalties were last set or adjusted through June of the year prior to the adjustment. The stated purpose for such adjustments is to keep civil penalties in pace with inflation.

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; and

2. Is assessed or enforced pursuant to Federal law; and

3. Is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts.

On October 24, 1996, the Department published in the Federal Register a schedule of CMPs adjusted for inflation as required by law. In one instance, the initial CMP inflation adjustment was zero, and was published accordingly. In two cases, the adjustment was nine percent. All other CMPs adjusted at that time were increased by the ten percent maximum amount. In the October 24, 1996, publication, however, ten then-existing CMPs were not included.

On November 1, 2000, the Department again adjusted CMPs for inflation as prescribed by law. In the case of the CMPs that were not previously adjusted, the 2002 CMPs were increased by ten percent, the initial inflation adjustment limitation. For various reasons, other CMPs were adjusted by lesser amounts, kept at the same levels, or deleted.

In early 2002, GAO conducted a government wide review of the implementation of the Federal Civil Penalties Inflation Adjustment Act of 1990. During that review, GAO determined that the Department had adjusted its civil penalties in a manner inconsistent with the requirements of the statute, and on September 30, 2002, sent a report explaining that determination to the Secretary of Commerce. Specifically, GAO asserted that the Department's method of rounding is inconsistent with the requirements of the statute.

In adjusting its CMPs, the Department noted that the statute requires the raw inflation amounts to be rounded, and also that the categories of rounding were determined by the size of the penalty increase. GAO disagreed, asserting that the “plain language” of the statute requires that the appropriate category of rounding be determined by the size of the penalty, not the size of the increase. GAO did, however, recognize that there exist certain advantages to rounding on the basis of the size of the increase rather than the size of the penalty.

Although the Department believes that the GAO reading of the Federal Civil Penalties Inflation Adjustment Act of 1990 produces a result which is inconsistent with the stated purpose of the statute (i.e., to keep civil penalties in pace with inflation), the Department will nevertheless comply with the recommendation contained in the September 30, 2002, letter. Accordingly, this rule adjusts the civil penalties that are established by law and assessed or enforced by the Department in the manner suggested by GAO. The actual penalty assessed for a particular violation will continue to be dependent upon a variety of factors.

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 an opportunity for comments required by 5 U.S.C. 553(b)(B) of the Administrative Procedure Act are unnecessary for this rulemaking 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 at least every four years, 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, as interpreted by GAO. Because the Department adjusted the CMPs in 2000 in a manner that was not in compliance with GAO's reading of the law, the Department is adjusting the CMPs sooner than four years. The Department does not have any discretion in making the adjustments. For the same reason, and because the published amounts of some penalties have been in error for approximately two years, there also exists good cause to waive the thirty day delay in effectiveness, pursuant to 5 U.S.C. 553(d)(3).

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 the purposes of the Regulatory Flexibility Act.

This rule does not contain information collection requirements for purposes of the Paperwork Reduction Act.

List of Subjects in 15 CFR Part 6

• Law enforcement
• Penalties

James L. Taylor,

Deputy Chief Financial Officer and Director for Financial Management.

For the reasons set forth in the preamble, subtitle A of title 15 of the Code of Federal Regulations is amended as follows:

PART 6—CIVIL MONETARY PENALTY INFLATION ADJUSTMENTS

1. The authority citation for part 6 continues to read as follows:

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.

2. Section 6.4 is revised to read as follows:

§ 6.4

Adjustments to penalties.

(a) Bureau of Industry and Security.

(1) 15 U.S.C. 5408(b)(1), Fastener Quality Act, violation, from $100,000 to $110,000.

(2) 22 U.S.C. 7661(a)(1)(A), Chemical Weapons Implementation Acts—Inspection Violation, from $25,000 to $25,000.

(3) 22 U.S.C. 7661(a)(1)(B), Chemical Weapons Implementation Acts—Record Keeping Violation, from $5,000 to $5,000.

(4) 50 U.S.C. 1705(a), International Emergency Power Act—Import Violations, from $10,000 to $11,000.

(5) 50 U.S.C. App. 2410(c), Export Administration Act, Non-National Security Violation, from $11,000 to $11,000.

(6) 50 U.S.C. App. 2410(c), Export Administration Act and Section 3 Arms Export Control Act, National Security Violation, from $110,000 to $120,000

(7) 50 U.S.C. App. 1705(b), International Emergency Powers Act, Export Violations, from $10,000 to $11,000.

(b) Economic Development Administration.

(1) 19 U.S.C. 2349, Trade Act of 1974, False Statements or Submissions with Applications for Assistance, from $5,500 to $5,500.

(c) Economics and Statistics Administration.

(1) 13 U.S.C. 304, Delinquency on Delayed Filing of Export Documentation, from $110 per day (up to $1,100) to $110 per day (up to $1,100).

(2) 13 U.S.C. 305, Collection of Foreign Trade Statistics/Violations, from $1,100 to $1,100.

(3) 22 U.S.C. 3105(a), International Investment and Trade in Services Act, Failure to Furnish Information, from $27,500 to $27,500.

(d) Import Administration.

(1) 19 U.S.C. 81s, Foreign Trade Zone Violation, from $1,100 to $1,100.

(2) 19 U.S.C. 1677(f)(4), U.S.-Canada FTA Protective Order Violation, from $110,000 to $120,000.

(e) National Oceanic and Atmospheric Administration.

(1) 15 U.S.C. 4243(a)(3), Land Remote-Sensing Commercialization Act, Violations, from $10,000 to $11,000.

(2) 15 U.S.C. 5623(a)(3), Land Remote Sensing Policy Act of 1992, Violations, from $11,000 to $11,000.

(3) 15 U.S.C. 5658(c), Land Remote Sensing Policy Act of 1992, Violations, from $11,000 to $11,000.

(4) 16 U.S.C. 773f(3), Northern Pacific Halibut Act of 1982, violations, from $27,500 to $27,500.

(5) 16 U.S.C. 783, Sponge Act Violations, Catching or Taking Within Specified Areas, from $550 to $550.

(6) 16 U.S.C. 957, Tuna Convention Act of 1950:

(i) Violation/subsection a: from $27,500 to $27,500.

(ii) Subsequent violation/subsection a: from $55,000 to $60,000.

(iii) Violation/subsection b: from $1,100 to $1,100.

(iv) Subsequent violation/subsection b: from $5,500 to $5,500.

(v) Violation/subsection c: from $110,000 to $120,000.

(7) 16 U.S.C. 971e(e)(1), Atlantic Tuna Convention Act of 1975:

(i) Violation/subsection a: from $25,000 to $27,500.

(ii) Subsequent violation/subsection a: from $50,000 to $55,000.

(iii) Violation/subsection b or c: from $1,000 to $1,100.

(iv) Subsequent violation/subsection b or c: from $5,000 to $5,500.

(v) Violation/subsection d: from $110,000 to $120,000.

(8) 16 U.S.C. 972f(b), Eastern Pacific Tuna Licensing Act:

(i) Violations/subsections (a)(1)-(3): from $27,500 to $27,500.

(ii) Subsequent violations/subsections (a)(1)-(3): from $55,000 to $60,000.

(iii) Violations, subsections (a)(4)-(5): from $5,500 to $5,500.

(iv) Subsequent violations/subsections (a)(4)-(5): from $5,500 to $5,500.

(v) Violations, subsection (a)(6): from $110,000 to $120,000.

(9) 16 U.S.C. 973f(a), South Pacific Tuna Fishing, violations, from $275,000 to $300,000.

(10) 16 U.S.C. 1030(a)(1) North Pacific Fisheries Act of 1954, from $25,000 to $27,500.

(11) 16 U.S.C. 1174(b), Fur Seal Act Amendment of 1983, from $10,000 to $11,000.

(12) 16 U.S.C. 1375(a)(1), Marine Mammal Protection Act of 1972:

(i) Violations, from $11,000 to $11,000.

(ii) Knowing Violations, from $22,000 to $22,000.

(13) 16 U.S.C. 1385(e), Dolphin Protection Consumer Information Act, from $100,000 to $110,000.

(14) 16 U.S.C. 1437(c)(1), Marine Protection, Research and Sanctuaries Act, from $110,000 to $120,000.

(15) 16 U.S.C. 1462(a), Deep Sea-Bed Hard Mineral Resources Act, from $25,000 to $27,500.

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

(i) Knowing violations, from $27,500 to $27,500.

(ii) Other knowing or business-related violations, from $13,200 to $13,200.

(iii) Otherwise violations, from $550 to $550.

(17) 16 U.S.C. 1858(a), Magnuson-Stevens Fishery Conservation and Management Act, from $110,000 to $120,000.

(18) 16 U.S.C. 2437(a)(1), Antarctic Marine Living Resources Convention Act:

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

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

(19) 16 U.S.C. 2465(a), Antarctic Protection Act of 1990:

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

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

(20) 16 U.S.C. 3373(a), Lacey Act:

(i) Purchase and sale violation, from $11,000 to $11,000.

(ii) Marking violations of fish, plants and wildlife, from $275 to $275.

(iii) False labeling violation, from $11,000 to $11,000.

(iv) Other than marking violation, from $10,000 to $11,000.

(21) 16 U.S.C. 3606(b), Atlantic Salmon Convention Act of 1982, from $110,000 to $120,000.

(22) 16 U.S.C. 3637(b), Pacific Salmon Treaty Act of 1985, from $110,000 to $120,000.

(23) 16 U.S.C. 4016(b)(1)(B), Fish and Seafood Promotion Act of 1986, from $5,000 to $5,500.

(24) 16 U.S.C. 5010(a), North Pacific Anadromous Stocks Act of 1992, from $100,000 to $110,000.

(25) 16 U.S.C. 5103(b)(2), Atlantic Coastal Fisheries Cooperative Management Act, from $100,000 to $110,000.

(26) 16 U.S.C. 5507(a), High Seas Fishing Compliance Act of 1995, from $100,000 to $110,000.

(27) 16 U.S.C. 5606(b), Northwest Atlantic Fisheries Convention Act of 1995, from $100,000 to $110,000.

(28) 22 U.S.C. 1978(e), Fishermen's Protective Act of 1967:

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

(ii) Subsequent violation, from $25,000 to $27,500.

(29) 30 U.S.C. 1462(a), Deep Seabed Hard Mineral Resources Act, from $27,500 to $27,500.

(30) 42 U.S.C. 9152(c)(1), Ocean Thermal Energy Conversion Act of 1980, from $27,500 to $27,500.

3. Section 6.5 is revised to read as follows:

§ 6.5

Effective date of adjustments.

The adjustments made by § 6.4 of this part, of the penalties there specified, are effective on January 29, 2003, and said penalties, as thus adjusted by the adjustments made by § 6.4 of this part, shall apply only to violations occurring after January 29, 2003, and before the effective date of any future inflation adjustment thereto made subsequent to January 29, 2003, as provided in § 6.6 of this part.