03-6754. Compliance With Inflation Adjustment Act

AGENCY:

Customs Service, Department of the Treasury.

ACTION:

Final rule.

SUMMARY:

Pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, (the Act), each Federal agency is required to adjust for inflation any civil monetary penalty covered by the Act that may be assessed in connection with violations of those statutes that the agency administers. While civil monetary penalties assessed by Customs under any provisions of the Tariff Act of 1930 are specifically exempted from the Act, Customs does administer two statutory provisions which provide for the assessment of civil monetary penalties that are covered by the Act. One statute concerns the transportation of passengers between ports or places in the United States; the other concerns the coastwise towing of vessels. The amount of the penalty that may be assessed for violations incurred under those statutes needs to be adjusted for inflation. Accordingly, Customs is amending its regulations in order to adjust the covered penalty amounts for inflation in compliance with the provisions of the Act.

EFFECTIVE DATE:

March 21, 2003.

FOR FURTHER INFORMATION CONTACT:

Jeremy Baskin, Penalties Branch, Office of Regulations and Rulings, (202-572-8750).

SUPPLEMENTARY INFORMATION:

Background

The Federal Civil Penalties Inflation Adjustment Act of 1990 (hereinafter, the Act), which is codified at 28 U.S.C. 2461 note, and which was amended in 1996 by the Debt Collection Improvement Act (Pub. L. 104-134, section 31001(s); 110 Stat. 1321-373), provides that each Federal agency must adjust for inflation any civil monetary penalties covered by the Act that are assessed in connection with violations that are incurred under those statutes that the agency administers. To this end, pursuant to the Act, as amended by the Debt Collection Improvement Act, the responsible Federal agency was required, by October 23, 1996, to make an initial inflationary adjustment to any civil monetary penalty covered by the Act; and each agency was then required to make these necessary inflationary adjustments at least once every 4 years thereafter.

The Act expressly exempts from its coverage any penalties that Customs may assess for violations that are incurred under any provision of the Tariff Act of 1930, as amended (19 U.S.C. 1202 et seq.). However, Customs does administer two statutes that are subject to the Act; and the penalties that Customs may assess for violations of these statutes have not previously been adjusted for inflation as required by the Act.

Specifically, the two statutes administered by Customs that are subject to the Act are 46 U.S.C. App. 289 and 46 U.S.C. App. 316(a). Section 289 prohibits foreign vessels from transporting passengers between ports or places in the United States; the penalty assessed under 46 U.S.C. App. 289 is $200 for every passenger transported in violation of the statute (§ 4.80(b)(2), Customs Regulations (19 CFR 4.80(b)(2))). Section 316(a) prohibits certain vessels from towing any vessel, other than a vessel in distress, between ports or places in the United States embraced within the coastwise laws; the penalties assessed for violations of 46 U.S.C. App. 316(a) are a minimum of $250 to a maximum of $1,000 per violation, plus $50 per ton on the measurement of every vessel towed in violation of the statute (§ 4.92, Customs Regulations (19 CFR 4.92)).

Section 5 of the Act (28 U.S.C. 2461 note, section 5) provides that civil monetary penalties must be adjusted based upon the cost of living, either by increasing the maximum civil monetary penalty or by increasing the range of minimum and maximum penalties for each civil monetary penalty, as appropriate. Any increase determined under section 5 of the Act is to be rounded to the nearest multiple of $10 in the case of penalties less than or equal to $100, and multiples of $100 in the case of penalties greater than $100 or less than or equal to $1,000.

In calculating the specific amount of the adjustment to any civil monetary penalty covered by the Act, section 5 required that the first such adjustment, which was to be made by October 23, 1996, could not exceed 10 percent of the penalty. Thereafter, in determining the proper adjustment to any civil monetary penalty covered by the Act, section 5 provides for a cost-of-living adjustment that would be determined based on the percentage by which the Consumer Price Index (CPI) for the month of June of the calendar year preceding the adjustment exceeds the CPI for the month of June of the calendar year in which the amount of such civil monetary penalty was last set or adjusted pursuant to law.

Hence, consistent with the provisions of Section 5 of the Act, as described, the civil penalty for violating 46 U.S.C. App. 289 is adjusted to $300 for every passenger transported in violation of the statute; and the civil penalties for violating 46 U.S.C. App. 316(a) are adjusted to a minimum of $350 and a maximum of $1,100, plus $60 per ton on the measurement of every vessel towed in violation of the statute.

Accordingly, this document amends §§ 4.80 and 4.92 of the Customs Regulations (19 CFR 4.80 and 4.92) in order to make the necessary inflation-induced adjustments to the penalties assessed for violations that are incurred under 46 U.S.C. App. 289 and 46 U.S.C. App. 316(a), as mandated by the Act. Furthermore, the specific authority citations for §§ 4.80 and 4.92 are revised to add a reference to the codification of the Act at 28 U.S.C. 2461 note.

Administrative Procedure Act, the Regulatory Flexibility Act, and Executive Order 12866

This final rule merely brings the Customs Regulations into conformance with the requirements of the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. As such, pursuant to 5 U.S.C. 553(b)(B) of the Administrative Procedure Act (APA), prior notice and public procedure are unnecessary in this case, and, pursuant to 5 U.S.C. 553(d)(3) of the APA, a delayed effective date is not required. Since this document is not subject to the notice and public procedure requirements of 5 U.S.C. 553, it is not subject to the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Nor do these amendments meet the criteria for a “significant regulatory action” as specified in E.O. 12866.

List of Subjects in 19 CFR Part 4

• Administrative practice and procedure
• Coastal zone
• Inspection
• Passenger vessels
• Penalties
• Reporting and recordkeeping requirements
• Vessels

Amendments to the Regulations

Part 4, Customs Regulations (19 CFR part 4), is amended as set forth below:

PART 4—VESSELS IN FOREIGN AND DOMESTIC TRADES

1. The general authority citation for part 4 continues, and the specific authority citations for §§ 4.80 and 4.92 are revised, to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1624; 46 U.S.C. App. 3, 91;

* * * * *

Section 4.80 also issued under 28 U.S.C. 2461 note; 46 U.S.C. 12106; 46 U.S.C. App. 251, 289, 319, 802, 808, 883, 883-1;

* * * * *

Section 4.92 also issued under 28 U.S.C. 2461 note; 46 U.S.C. App. 316(a);

* * * * *

2. Section 4.80 is amended by revising paragraph (b)(2) to read as follows:

§ 4.80

Vessels entitled to engage in coastwise trade.

* * * * *

(b) Penalties for violating coastwise laws. * * *

(2) The penalty imposed for the unlawful transportation of passengers between coastwise points is $300 for each passenger so transported and landed (46 U.S.C. App. 289, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990).

* * * * *

3. Section 4.92 is amended by revising its second sentence to read as follows:

§ 4.92

Towing.

* * * The penalties for violation of this provision are a fine of from $350 to $1100 against the owner or master of the towing vessel and a further penalty against the towing vessel of $60 per ton of the towed vessel (46 U.S.C. App. 316(a), as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990).

Robert C. Bonner,

Commissioner of Customs.

Approved: February 25, 2003.

Timothy E. Skud,

Deputy Assistant Secretary of the Treasury.