2023-00943. Financial Crimes Enforcement Network; Inflation Adjustment of Civil Monetary Penalties  

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    AGENCY:

    Financial Crimes Enforcement Network (FinCEN), Treasury.

    ACTION:

    Final rule.

    SUMMARY:

    FinCEN is publishing this final rule to reflect inflation adjustments to its civil monetary penalties as mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. This rule adjusts certain maximum civil monetary penalties within the jurisdiction of FinCEN to the amounts required by that Act.

    DATES:

    Effective January 19, 2023.

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    FOR FURTHER INFORMATION CONTACT:

    The FinCEN Regulatory Support Section at 1-800-767-2825, or electronically at frc@fincen.gov.

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    SUPPLEMENTARY INFORMATION:

    I. Background

    In order to improve the effectiveness of civil monetary penalties (CMPs) and to maintain their deterrent effect, the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended in 2015 by section 701 of Public Law 114-74, codified at 28 U.S.C. 2461 note (the Act), requires Federal agencies to adjust for inflation each CMP provided by law within the jurisdiction of the agency. The Act requires agencies to adjust the level of CMPs with an initial “catch-up” adjustment through an interim final rulemaking. After the initial “catch-up” Start Printed Page 3312 adjustment, agencies are required to adjust CMPs annually and to make the adjustments notwithstanding 5 U.S.C. 553, which requires notice-and-comment rulemaking for certain agency actions. The 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]

    II. Method of Calculation

    The method of calculating CMP adjustments applied in this final rule is required by the Act. Under the Act and Office of Management and Budget (OMB) guidance, 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 OMB Memorandum M-23-05 of December 15, 2022, the adjustment multiplier for 2023 is 1.07745. In order to complete the 2023 annual adjustment, each current CMP (all of which were themselves last adjusted in 2022) is multiplied by the 2023 adjustment multiplier. Under the Act, any increase in CMP must be rounded to the nearest multiple of $1.[2]

    Procedural Matters

    1. Administrative Procedure Act

    Section 4(b) of the Act requires agencies, beginning in 2017, to make annual adjustments for inflation to CMPs notwithstanding the notice and comment requirements of 5 U.S.C. 553. Additionally, the methodology used for adjusting CMPs for inflation, effective 2017, is provided by statute, with no discretion provided to agencies regarding the substance of the adjustments for inflation to CMPs. Accordingly, prior public notice and an opportunity for public comment and a delayed effective date are not required for this rule.

    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.

    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.

    Start List of Subjects

    List of Subjects in 31 CFR Part 1010

    • Authority delegations (Government agencies)
    • Administrative practice and procedure
    • Banks, banking
    • Brokers
    • Currency
    • Foreign banking
    • Foreign currencies
    • Gambling
    • Investigations
    • Penalties
    • Reporting and recordkeeping requirements
    • Securities
    • Terrorism
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    Authority and Issuance

    For the reasons set forth in the preamble, part 1010 of chapter X of title 31 of the Code of Federal Regulations is amended as follows:

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    PART 1010—GENERAL PROVISIONS

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    1. The authority citation for part 1010 continues to read as follows:

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    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 and 5316-5336; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307; sec. 2006, Pub. L. 114-41, 129 Stat. 458-459; sec. 701, Pub. L. 114-74, 129 Stat. 599.

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    2. Amend § 1010.821 by revising table 1 following paragraph (b) to read as follows:

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    Penalty adjustment and table.
    * * * * *

    (b) * * *

    Table 1 of § 1010.821—Penalty Adjustment Table

    U.S. Code citationCivil monetary penalty descriptionPenalties as last amended by statuteMaximum penalty amounts or range of minimum and maximum penalty amounts for penalties assessed on or after 1/19/2022
    12 U.S.C. 1829b(j)Relating to Recordkeeping Violations For Funds Transfers$10,000$24,793
    12 U.S.C. 1955Willful or Grossly Negligent Recordkeeping Violations10,00024,793
    31 U.S.C. 5318(k)(3)(C)Failure to Terminate Correspondent Relationship with Foreign Bank10,00016,771
    31 U.S.C. 5321(a)(1)General Civil Penalty Provision for Willful Violations of Bank Secrecy Act Requirements25,000-100,00067,544-270,180
    31 U.S.C. 5321(a)(5)(B)(i)Foreign Financial Agency Transaction—Non-Willful Violation of Transaction10,00015,611
    31 U.S.C. 5321(a)(5)(C)(i)(I)Foreign Financial Agency Transaction—Willful Violation of Transaction100,000156,107
    31 U.S.C. 5321(a)(6)(A)Negligent Violation by Financial Institution or Non-Financial Trade or Business5001,350
    31 U.S.C. 5321(a)(6)(B)Pattern of Negligent Activity by Financial Institution or Non-Financial Trade or Business50,000105,083
    31 U.S.C. 5321(a)(7)Violation of Certain Due Diligence Requirements, Prohibition on Correspondent Accounts for Shell Banks, and Special Measures1,000,0001,677,030
    31 U.S.C. 5330(e)Civil Penalty for Failure to Register as Money Transmitting Business5,0009,966
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    Start Printed Page 3313

    Himamauli Das,

    Acting Director, Financial Crimes Enforcement Network.

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    Footnotes

    1.  The increased CMPs, however, apply only with respect to underlying violations occurring after November 2, 2015 the date of enactment of the most recent amendment to the Act.

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    2.  FinCEN has previously described that it applied a catch-up adjustment for each penalty subject to the Act, based on the year and corresponding amount(s) for which the maximum penalty or range of minimum and maximum penalties was established or last adjusted, whichever is later. See Civil Monetary Penalty Adjustment and Table, 81 FR 42503, 42504 (June 30, 2016). Because the year varies for different penalties, penalties that were originally of the same size when promulgated can have different values today pursuant to the application of the Act.

    Back to Citation

    [FR Doc. 2023-00943 Filed 1-18-23; 8:45 am]

    BILLING CODE 4810-02-P

Document Information

Effective Date:
1/19/2023
Published:
01/19/2023
Department:
Financial Crimes Enforcement Network
Entry Type:
Rule
Action:
Final rule.
Document Number:
2023-00943
Dates:
Effective January 19, 2023.
Pages:
3311-3313 (3 pages)
Topics:
Administrative practice and procedure, Authority delegations (Government agencies), Banks, banking, Banks, banking, Banks, banking, Banks, banking, Brokers, Currency, Foreign banking, Foreign currencies, Gambling, Investigations, Penalties, Reporting and recordkeeping requirements, Securities, Terrorism
PDF File:
2023-00943.pdf
Supporting Documents:
» Civil Monetary Penalty Inflation Adjustment
» Agency Information Collection Activities; Proposals, Submissions, and Approvals: Imposition of a Special Measure Concerning North Korea as a Jurisdiction of Primary Money Laundering Concern
» Imposition of Special Measure Prohibiting the Transmittal of Funds Involving Bitzlato
» Civil Monetary Penalty Inflation Adjustment
» Agency Information Collection Activities; Proposals, Submissions, and Approvals: Financial Crimes Enforcement Network
» Civil Monetary Penalty Inflation Adjustment
» Bank Secrecy Act Regulations: Reports of Foreign Financial Accounts Civil Penalties
» Request for Membership Applications: Bank Secrecy Act Advisory Group
» Orders Imposing Additional Reporting and Recordkeeping Requirements
» Financial Crimes Enforcement Network; Inflation Adjustment of Civil Monetary Penalties
CFR: (1)
31 CFR 1010.821