Rule2023-00353
Department of State 2023 Civil Monetary Penalties Inflationary Adjustment
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 11, 2023
Effective
January 11, 2023
Issuing agencies
State Department
Abstract
This final rule is issued to adjust the civil monetary penalties (CMP) for regulatory provisions maintained and enforced by the Department of State. The revised CMP adjusts the amount of civil monetary penalties assessed by the Department of State based on the December 2022 guidance from the Office of Management and Budget and by recent legislation. For penalties adjusted according to the December 2022 guidance, the new amounts will apply only to those penalties assessed on or after the effective date of this rule, regardless of the date on which the underlying facts or violations occurred. For the penalty adjusted according to recent legislation, the new amounts will apply only to those penalties assessed for violations occurring on or after December 27, 2022.
Full Text
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<title>Federal Register, Volume 88 Issue 7 (Wednesday, January 11, 2023)</title>
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[Federal Register Volume 88, Number 7 (Wednesday, January 11, 2023)]
[Rules and Regulations]
[Pages 1505-1507]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-00353]
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DEPARTMENT OF STATE
22 CFR Parts 35, 103, 127, and 138
[Public Notice: 11959]
RIN 1400-AF59
Department of State 2023 Civil Monetary Penalties Inflationary
Adjustment
AGENCY: Department of State.
ACTION: Final rule.
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SUMMARY: This final rule is issued to adjust the civil monetary
penalties (CMP) for regulatory provisions maintained and enforced by
the Department of State. The revised CMP adjusts the amount of civil
monetary penalties assessed by the Department of State based on the
December 2022 guidance from the Office of Management and Budget and by
recent legislation. For penalties adjusted according to the December
2022 guidance, the new amounts will apply only to those penalties
assessed on or after the effective date of this rule, regardless of the
date on which the underlying facts or violations occurred. For the
penalty adjusted according to recent legislation, the new amounts will
apply only to those penalties assessed for violations occurring on or
after December 27, 2022.
DATES: This final rule is effective on January 11, 2023.
FOR FURTHER INFORMATION CONTACT: Alice Kottmyer, Attorney-Adviser,
Office of Management, <a href="/cdn-cgi/l/email-protection#2e45415a5a43574b5c4f436e5d5a4f5a4b00494158"><span class="__cf_email__" data-cfemail="d9b2b6adadb4a0bcabb8b499aaadb8adbcf7beb6af">[email protected]</span></a>. ATTN: Regulatory Change,
CMP Adjustments, (202) 647-2318.
SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation
Adjustment Act of 1990, Pub. L. 101-410, as amended by the Debt
Collection Improvement Act of 1996, Pub. L. 104-134, required the head
of each agency to adjust its CMPs for inflation no later than October
23, 1996 and required agencies to make adjustments at least once every
four years thereafter. The Federal Civil Penalties Inflation Adjustment
Act Improvements Act of 2015, Section 701 of Pub. L. 114-74 (the 2015
Act) further amended the 1990 Act by requiring agencies to adjust CMPs,
if necessary, pursuant to a ``catch-up'' adjustment methodology
prescribed by the 2015 Act, which mandated that the catch-up adjustment
take effect no later than August 1, 2016. Additionally, the 2015 Act
required agencies to make annual adjustments to their respective CMPs
in accordance with guidance issued by the Office of Management and
Budget (OMB).
Based on these statutes, the Department of State (the Department)
published a final rule in June 2016 \1\ to implement the ``catch-up''
provisions; and annual updates to its CMPs in January 2017,\2\ January
2018,\3\ March 2019 (delayed due to the Government shutdown),\4\
January 2020,\5\ February 2021 (delayed due to transition issues),\6\
and January 2022.\7\
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\1\ 81 FR 36771 (Jun. 8, 2016).
\2\ 82 FR 3168 (Jan. 11, 2017).
\3\ 83 FR 234 (Jan. 3, 2018).
\4\ 84 FR 9957 (Mar. 19, 2019).
\5\ 85 FR 2020 (Jan. 14, 2020).
\6\ 86 FR 7804 (Feb. 2, 2021).
\7\ 87 FR 1072 (Jan. 10, 2022).
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On December 15, 2022, OMB notified agencies that the annual cost-
of-living adjustment multiplier for fiscal year (FY) 2023, based on the
Consumer Price Index, is 1.07745. Additional information may be found
in OMB Memorandum M-23-05 at: <a href="https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf">https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf</a>. This final rule amends
Department CMPs for fiscal year 2023, with the exception of the CMP for
violation of 22 U.S.C 2778 at 22 CFR 127.10(a)(1)(i), which is amended
in accordance with section 9708 of the James M. Inhofe National Defense
Authorization Act for Fiscal Year 2023, Pub. L. 117-263.
Overview of the Areas Affected by This Rule
Within the Department of State (title 22, Code of Federal
Regulations), this rule affects four areas:
(1) Part 35, which implements the Program Fraud Civil Remedies Act
of 1986 (PFCRA), codified at 31 U.S.C. 3801-3812;
(2) Part 103, which implements the Chemical Weapons Convention
Implementation Act of 1998 (CWC Act) (22 U.S.C. 6761);
(3) Part 127, which implements the penalty provisions of sections
38(e), 39A(c), and 40(k) of the Arms Export Control Act (AECA) (22
U.S.C. 2778(e), 2779a(c), and 2780(k)); and
(4) Part 138, which implements section 319 of Pub. L. 101-121,
codified at 31 U.S.C. 1352, which prohibits recipients of Federal
contracts, grants, and loans from using appropriated funds for lobbying
the executive or legislative branches of the Federal Government in
connection with a specific contract.
Specific Changes to 22 CFR Made by this Rule
I. Part 35
The PFCRA, enacted in 1986, authorizes agencies, with approval from
the Department of Justice, to pursue individuals or firms for false
claims. Applying the FY 2023 inflationary adjustment of 1.07745, the
new maximum penalty is $13,508 for each false claim or statement, up to
a maximum of $405,270.
II. Part 103
The CWC Act provided domestic implementation of the Convention on
the Prohibition of the Development, Production, Stockpiling, and Use of
Chemical Weapons and on Their Destruction. The penalty provisions of
the CWC Act are codified at 22 U.S.C. 6761. Applying the FY 2023
multiplier, the new maximum amounts are as follows: prohibited acts
related to inspections, $45,429; for recordkeeping violations, $9,086.
III. Part 127
The Assistant Secretary of State for Political-Military Affairs is
responsible for the imposition of CMPs under the International Traffic
in Arms Regulations (ITAR), which is administered by the Directorate of
Defense Trade Controls (DDTC).
[[Page 1506]]
(1) AECA Section 38(e)
Amended in accordance with section 9708 of Public Law 117-263, the
new maximum penalty under 22 U.S.C. 2778 (22 CFR 127.10(a)(1)(i)) is
the greater of $1,200,000 or the amount that is twice the value of the
transaction that is the basis of the violation with respect to which
the penalty is imposed.
(2) AECA Section 39A(c)
Applying the multiplier, the new maximum penalty under 22 U.S.C.
2779a (22 CFR 127.10(a)(1)(ii)) is $996,685, or five times the amount
of the prohibited payment, whichever is greater.
(3) AECA Section 40(k)
Applying the multiplier, the new maximum penalty under 22 U.S.C.
2780 (22 CFR 127.10(a)(1)(iii)) is $1,186,338.
IV. Part 138
Section 319 of Public Law 101-121, codified at 31 U.S.C. 1352,
provides penalties for recipients of Federal contracts, grants, and
loans who use appropriated funds to lobby the executive or legislative
branches of the Federal Government in connection with a specific
contract, grant, or loan. Any person who violates that prohibition is
subject to a civil penalty. The statute also requires each person who
requests or receives a Federal contract, grant, cooperative agreement,
loan, or a Federal commitment to insure or guarantee a loan, to
disclose any lobbying; there is a penalty for failure to disclose.
Applying the FY 2023 multiplier, the maximum penalties for both
improper expenditures and failure to disclose, is: for first offenders,
$23,343; for others, not less than $23,727, and not more than $237,268.
Summary
FY 2023 Multiplier: 1.07745
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New (FY 23) max
Citation in 22 CFR FY22 Max penalties penalties
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Sec. 35.3..................... $12,537 up to $13,508 up to
$376,138. $405,270.
Sec. 103.6(a)(1) Prohibited $42,163........... $45,429.
Acts.
Sec. 103.6(a)(2) Recordkeeping $8,433............ $9,086.
Violations.
Sec. 127.10(a)(1)(i).......... $1,272,251........ the greater of
$1,200,000 or the
amount that is
twice the value
of the
transaction that
is the basis of
the violation
with respect to
which the penalty
is imposed.
Sec. 127.10(a)(1)(ii)......... $925,041 or five $996,685, or five
times the amount times the amount
of the prohibited of the prohibited
payment, payment,
whichever is whichever is
greater. greater.
Sec. 127.10(a)(1)(iii)........ $1,101,061........ $1,186,338.
Sec. 138.400 First Offenders.. $21,665........... $23,343.
Sec. 138.400.................. $22,021 up to $23,727 up to
$220,213. $237,268.
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Effective Date of Penalties
The revised CMP amounts for all penalties other than the penalty at
22 CFR 127.10(a)(1)(i) will go into effect on the date this rule is
published. All violations for which those CMPs are assessed on or after
the effective date of this rule, regardless of whether the violation
occurred before the effective date, will be assessed at the adjusted
penalty level. For the penalty at 22 CFR 127.10(a)(1)(i) adjusted
according to section 9708 of Public Law 117-263, the new amounts will
apply only to those penalties assessed for violations occurring on or
after December 27, 2022.
Future Adjustments and Reporting
The 2015 Act directed agencies to undertake an annual review of
CMPs using a formula prescribed by the statute. Annual adjustments to
CMPs are made in accordance with the guidance issued by OMB. As in this
rulemaking, the Department of State will publish notification of annual
inflation adjustments to CMPs in the Federal Register no later than
January 15 of each year, with the adjusted amount taking effect
immediately upon publication.
Regulatory Analysis and Notices
Administrative Procedure Act
The Department of State is publishing this rule using the ``good
cause'' exception to the Administrative Procedure Act (5 U.S.C.
553(b)), as the Department has determined that public comment on this
rulemaking would be impractical, unnecessary, or contrary to the public
interest. This rulemaking is mandatory and entirely without agency
discretion; it implements Public Law 114-74. See 5 U.S.C. 553(d)(3).
Regulatory Flexibility Act
Because this rulemaking is exempt from 5 U.S.C. 553, a regulatory
flexibility analysis is not required.
Unfunded Mandates Reform Act of 1995
This rule does not involve a mandate that will result in the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any year and it
will not significantly or uniquely affect small governments. Therefore,
no actions were deemed necessary under the provisions of the Unfunded
Mandates Reform Act of 1995.
Congressional Review Act
This rule is not a major rule within the meaning of the
Congressional Review Act, 5 U.S.C. 801 et seq.
Executive Orders 12372 and 13132
This amendment will not have substantial direct effects on the
States, on the relationship between the National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with Executive
Order 13132, it is determined that this amendment does not have
sufficient federalism implications to require consultations or warrant
the preparation of a federalism summary impact statement.
Executive Orders 12866 and 13563
The Department believes that benefits of the rulemaking outweigh
any costs, and there are no feasible alternatives to this rulemaking.
Pursuant to M-23-05, the Office of Information and Regulatory Affairs
(OIRA) has determined that agency regulations that (1) exclusively
implement the annual adjustment, (2) are consistent with this guidance,
and (3) have an annual impact of less than $100 million, are generally
not significant regulatory actions under E.O.
[[Page 1507]]
12866. Therefore, agencies are generally not required to submit
regulations satisfying those criteria to OIRA for review. This
regulation satisfies all of those criteria.
Executive Order 12988
The Department of State has reviewed the amendment in light of
Executive Order 12988 to eliminate ambiguity, minimize litigation,
establish clear legal standards, and reduce burden.
Executive Order 13175
The Department of State has determined that this rulemaking will
not have tribal implications, will not impose substantial direct
compliance costs on Indian Tribal governments, and will not preempt
Tribal law. Accordingly, Executive Order 13175 does not apply to this
rulemaking.
Paperwork Reduction Act
This rulemaking does not impose or revise any information
collections subject to 44 U.S.C. Chapter 35.
List of Subjects
22 CFR Part 35
Administrative practice and procedure, Claims, Fraud, Penalties.
22 CFR Part 103
Administrative practice and procedure, Chemicals, Classified
information, Foreign relations, Freedom of information, International
organization, Investigations, Penalties, Reporting and recordkeeping
requirements.
22 CFR Part 127
Arms and munitions, Crime, Exports, Penalties, Seizures and
forfeitures.
22 CFR Part 138
Government contracts, Grant programs, Loan programs, Lobbying,
Penalties, Reporting and recordkeeping requirements.
For the reasons set forth above, 22 CFR parts 35, 103, 127, and 138
are amended as follows:
PART 35--PROGRAM FRAUD CIVIL REMEDIES
0
1. The authority citation for part 35 continues to read as follows:
Authority: 22 U.S.C. 2651a; 31 U.S.C. 3801 et seq.; Pub. L.
114-74, 129 Stat. 584.
Sec. 35.3 [Amended]
0
2. In Sec. 35.3:
0
a. Remove ``$12,537''and add in its place ``$13,508'', wherever it
occurs.
0
b. In paragraph (f), remove ``$376,138'' and add in its place
``$405,270''.
PART 103--REGULATIONS FOR IMPLEMENTATION OF THE CHEMICAL WEAPONS
CONVENTION AND THE CHEMICAL WEAPONS CONVENTION IMPLEMENTATION ACT
OF 1998 ON THE TAKING OF SAMPLES AND ON ENFORCEMENT OF REQUIREMENTS
CONCERNING RECORDKEEPING AND INSPECTIONS
0
3. The authority citation for part 103 continues to read as follows:
Authority: 22 U.S.C. 2651a; 22 U.S.C. 6701 et seq.; Pub. L.
114-74, 129 Stat. 584.
Sec. 103.6 [Amended]
0
4. In Sec. 103.6:
0
a. In paragraph (a)(1), remove ``$42,163'' and add in its place
``$45,429''; and
0
b. In paragraph (a)(2), remove ``$8,433'' and add in its place
``$9,086''.
PART 127--VIOLATIONS AND PENALTIES
0
5. The authority citation for part 127 continues to read as follows:
Authority: Sections 2, 38, and 42, Pub. L. 90-629, 90 Stat. 744
(22 U.S.C. 2752, 2778, 2791); 22 U.S.C. 401; 22 U.S.C. 2651a; 22
U.S.C. 2779a; 22 U.S.C. 2780; E.O. 13637, 78 FR 16129; Pub. L. 114-
74, 129 Stat. 584.
Sec. 127.10 [Amended]
0
6. In Sec. 127.10:
0
a. In paragraph (a)(1)(i), remove ``$1,272, 251'' and add in its place
``the greater of $1,200,000 or the amount that is twice the value of
the transaction that is the basis of the violation with respect to
which the penalty is imposed'';
0
b. In paragraph (a)(1)(ii), remove ``$925,041'' and add in its place
``$996,685''; and
0
c. In paragraph (a)(1)(iii), remove ``$1,101,061'' and add in its place
``$1,186,338''.
PART 138--RESTRICTIONS ON LOBBYING
0
7. The authority citation for part 138 continues to read as follows:
Authority: 22 U.S.C. 2651a; 31 U.S.C. 1352; Pub. L. 114-74, 129
Stat. 584.
Sec. 138.400 [Amended]
0
8. In Sec. 138.400:
0
a. Remove ``$22,021'' and ``$220,213'' and add in their place
``$23,727'' and ``$237,268'', respectively, wherever they occur.
0
b. In paragraph (e), remove ``$21,665'' and add in its place
``$23,343''.
Kevin E. Bryant,
Deputy Director, Office of Directives Management, Department of State.
[FR Doc. 2023-00353 Filed 1-10-23; 8:45 am]
BILLING CODE 4710-10-P
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