Proposed Rule2023-00854
Distinctive Paper and Distinctive Counterfeit Deterrents for United States Federal Reserve Notes
Primary source
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Published
January 18, 2023
Issuing agencies
Treasury DepartmentEngraving and Printing Bureau
Abstract
This notice of proposed rulemaking would update the description of the distinctive paper and distinctive counterfeit deterrents used to guard against counterfeit and fraudulently altered United States (U.S.) Federal Reserve notes in accordance with the U.S. Code. The Department of the Treasury, Bureau of Engraving and Printing (BEP) is amending its distinctive paper and distinctive counterfeit deterrents regulation to remove obsolete language to align the regulation to the current state-of-art and emerging technologies generated as a result of BEP's research and development initiatives; clarify the agency's authority for adopting distinctive paper and distinctive counterfeits deterrents; and announce the adoption of new distinctive paper and counterfeit deterrents by the Secretary of the Treasury.
Full Text
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<title>Federal Register, Volume 88 Issue 11 (Wednesday, January 18, 2023)</title>
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[Federal Register Volume 88, Number 11 (Wednesday, January 18, 2023)]
[Proposed Rules]
[Pages 2871-2873]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-00854]
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DEPARTMENT OF THE TREASURY
Bureau of Engraving and Printing
31 CFR Part 601
Distinctive Paper and Distinctive Counterfeit Deterrents for
United States Federal Reserve Notes
AGENCY: Bureau of Engraving and Printing, Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This notice of proposed rulemaking would update the
description of the distinctive paper and distinctive counterfeit
deterrents used to guard against counterfeit and fraudulently altered
United States (U.S.) Federal Reserve notes in accordance with the U.S.
Code. The Department of the Treasury, Bureau of Engraving and Printing
(BEP) is amending its distinctive paper and distinctive counterfeit
deterrents regulation to remove obsolete language to align the
regulation to the current state-of-art and emerging technologies
generated as a result of BEP's research and development initiatives;
clarify the agency's authority for adopting distinctive paper and
distinctive counterfeits deterrents; and announce the adoption of new
distinctive paper and counterfeit deterrents by the Secretary of the
Treasury.
[[Page 2872]]
DATES: Comments must be received no later than March 20, 2023.
ADDRESSES: Interested persons are invited to submit comments regarding
this notice of proposed rulemaking according to the instructions below.
BEP encourages the early submission of comments. Comments may be
submitted through one of these methods:
<bullet> Electronic Submission: Please submit comments
electronically through the Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Electronic submission of comments allows the
commenter maximum time to prepare and submit a comment, ensures timely
receipt, and enables BEP to make them available to the public. Comments
submitted electronically through the <a href="http://www.regulations.gov">http://www.regulations.gov</a> website
can be viewed by other commenters and interested members of the public.
Comments received, including attachments and other supporting
materials, will be part of the public record and subject to public
disclosure. Do not enclose any information in your comment or
supporting materials that you consider confidential or inappropriate
for public disclosure. You should submit only information that you wish
to make available publicly.
<bullet> Postal Mail Submission: Comments may be sent to the Office
of the Chief Counsel, United States Department of the Treasury, Bureau
of Engraving and Printing, 14th and C Streets SW, Washington, DC 20228,
Room 419-A, Attention: Leslie J. Rivera Pag[aacute]n, Amendments to 31
CFR part 601. Because postal mail may be subject to processing delay,
it is recommended that comments be submitted electronically.
FOR FURTHER INFORMATION CONTACT: Leslie J. Rivera Pag[aacute]n,
Attorney-Advisor, Office of Chief Counsel, U.S. Department of the
Treasury, Bureau of Engraving and Printing, Room 419A, 14th & C Streets
SW, Washington, DC 20028, phone at (202) 874-2500 or fax (202) 874-
2951.
SUPPLEMENTARY INFORMATION:
I. Background
The BEP regulation appearing at 31 CFR part 601 relates to the
distinctive paper and distinctive counterfeit deterrents used to guard
against counterfeit and fraudulently altered U.S. Federal Reserve
notes. The last amendment to 31 CFR part 601 was on March 18, 1996.
Since then, BEP has engaged in research and development resulting in
modification of its distinctive paper and distinctive counterfeit
deterrents, thus necessitating revision of the entire regulation.
The U.S. Congress, which has power under the U.S. Constitution to
coin money and regulate the value thereof, has delegated to the
Secretary of the Treasury (``Secretary'') exclusive authority to
determine the form and tenor of U.S. Federal Reserve notes.
Accordingly, the Secretary may adopt and examine plates, dies, bed
pieces, and other materials used to print U.S. Federal Reserve notes
and issue regulations relating to such examination. The Secretary may
also prescribe regulations that the Secretary considers best calculated
to promote the public convenience and security, and to protect the U.S.
Government and individuals from fraud and loss that apply to anyone who
may receive on behalf of the U.S. Government, Treasury notes, United
States notes, or other Government securities. Additionally, the
Secretary has the authority to adopt any distinctive paper and
distinctive counterfeit deterrents for U.S. Federal Reserve notes in
the best manner to guard against counterfeits and fraudulent
alterations.
The BEP mission is to develop and manufacture U.S. Federal Reserve
notes that are trusted worldwide. The Secretary has delegated specific
authority and responsibilities related to the production of U.S.
Federal Reserve notes to the Director of BEP only. (Treasury Order 101-
07, Delegation to the Director, Bureau of Engraving and Printing, for
the Production of Currency Notes to Meet the Demands of the Federal
Reserve Banks, January 4, 2021.) BEP's Director may redelegate the
authority and responsibility to a BEP Associate Director only.
This proposed rule would update BEP's 1996 (61 FR 10895) regulation
concerning the distinctive paper and distinctive counterfeit deterrents
BEP intends to use to produce the next generations of U.S. Federal
Reserve notes to guard against counterfeits and fraudulent alterations.
The proposed revision would clarify the description of the distinctive
paper and distinctive counterfeit deterrents separately for U.S.
Federal Reserve notes, remove obsolete language, align the regulation
to the current state-of-art and emerging technologies generated as a
result of BEP's research and development initiatives, clarify the
agency's authority for adopting distinctive paper and distinctive
counterfeits deterrents, and announce the adoption of new distinctive
paper and counterfeit deterrents by the Secretary.
II. Procedural Analyses
A. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA)
requires agencies to prepare an initial regulatory flexibility analysis
(IRFA) to determine the economic impact of the rule on small entities.
A small entity is defined as either a small business, a small
organization, or a small governmental jurisdiction; an individual is
not a small entity. Section 605(b) of the RFA allows an agency to
prepare a certification instead of an IRFA if the rule does not have a
significant economic impact on a substantial number of small entities.
Pursuant to 5 U.S.C. 605(b), it is hereby certified that this
regulation will not have a significant economic impact on a substantial
number of small entities. The proposed rule is limited to updating the
description of the distinctive paper and distinctive counterfeit
deterrents used to guard against counterfeit and fraudulently altered
United States (``U.S.'') Federal Reserve notes and other obligations
and securities in accordance with the U.S. Code. Accordingly, if
finalized, this proposed rule will have no direct impact on small
entities. Notwithstanding this certification, BEP invites comments on
this proposed rule's impact, if any, on small entities.
B. Regulatory Planning and Review (Executive Orders 12866 and 13563)
Executive Orders 13563 and 12866 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
BEP has determined this proposed rule relates to the agency
organization and management, and therefore, Executive Orders 13563 and
12866 do not apply to this proposed rule. This proposed rule is not a
``significant regulatory action'' under Executive Order 12866.
C. Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 requires
that agencies assess anticipated costs and benefits and take certain
other actions before issuing a rule that includes any federal mandate
that may result in expenditures in any one year by a state, local, or
tribal government, in
[[Page 2873]]
the aggregate, or by the private sector, of $100 million in 1995
dollars, updated annually for inflation. BEP certifies that no actions
were deemed necessary under the Unfunded Mandates Reform Act of 1995.
Furthermore, these proposed regulations will not result in the
expenditure by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100,000,000 or more in any one year, and
they will not significantly or uniquely affect small governments.
D. Federalism
Executive Order 13132 (titled Federalism) prohibits an agency from
publishing any rule that has federalism implications if the rule either
imposes substantial, direct compliance costs on state and local
governments, and is not required by statute, or preempts state law
unless the agency meets the consultation and funding requirements of
section 6 of the Executive Order. This proposed rule has been reviewed
under Executive Order 13132 and would not have federalism implications
and or impose substantial direct effects on States, on the relationship
between the National Government and the States, or the distribution of
power and responsibilities among the various levels of government
within the meaning of the Executive Order. Therefore, in accordance
with Executive Order 13132, it is determined that this proposed rule
does not have sufficient federalism implications to warrant the
preparation of a federalism summary impact statement.
E. Paperwork Reduction Act (PRA) Notices
The Paperwork Reduction Act does not apply because this proposed
rule would not impose information collection requirements that require
the approval of the Office of Management and Budget under 44 U.S.C.
3501, et seq.
List of Subjects in 31 CFR Part 601
Currency, Securities, Printing.
For the reasons stated in the preamble, BEP proposes to revise 31
CFR part 601 as follows:
PART 601--DISTINCTIVE PAPER AND DISTINCTIVE COUNTERFEIT DETERRENTS
FOR UNITED STATES FEDERAL RESERVE NOTES
Sec.
601.1 Notice and scope.
601.2 Distinctiveness requirement.
601.3 Distinctive paper.
601.4 Distinctive counterfeit deterrents.
601.5 Penalty for unauthorized control or possession.
Authority: 5 U.S.C. 301; 12 U.S.C. 418, 421; 18 U.S.C. 474A; 31
U.S.C. 321.
Sec. 601.1 Notice and scope.
The regulation in this part governs the distinctive paper and
distinctive counterfeit deterrents adopted by the Secretary of the
Treasury for United States Federal Reserve notes, which are subject to
18 U.S.C. 474A. The Director of Bureau of Engraving and Printing, by
delegated authority, hereby gives notice of the distinctive paper and
distinctive counterfeit deterrents adopted by the Secretary of the
Treasury.
Sec. 601.2 Distinctiveness requirement.
(a) The Secretary of the Treasury has adopted distinctive paper and
distinctive counterfeit deterrents:
(1) In which the United States has an exclusive property interest;
or
(2) That are not otherwise in commercial use or the public domain
and are necessary for preventing the counterfeiting of United States
Federal Reserve notes.
(b) The distinctive paper and counterfeit deterrents are used in
United States Federal Reserve notes.
Sec. 601.3 Distinctive paper.
The distinctive paper is a cream-white currency note paper with
fibers, colored red and blue, evenly distributed throughout the
currency note paper. The distinctive paper shall contain distinctive
counterfeit deterrents in the currency note paper denominations
prescribed by the Secretary of the Treasury.
Sec. 601.4 Distinctive counterfeit deterrents.
The distinctive counterfeit deterrents that may be used in the
denominations of United States Federal Reserve notes as prescribed by
the Secretary of the Treasury are:
(a) Security threads containing graphics consisting of the
designation ``USA'' and the denomination of the currency note,
expressed in alphabetic or numeric characters.
(b) Optically variable inks with material characteristics.
(c) Non-visual characteristic inks with material characteristics.
(d) Optically variable thread (three-dimensional (3-D) security
ribbon and micro-optic stripe) visible in front or back of the currency
note.
(e) Non-visual characteristic features with material
characteristics.
Sec. 601.5 Penalty for Unauthorized Control or Possession.
(a) Control or possession of distinctive paper and/or distinctive
counterfeit deterrents adopted in Sec. Sec. 601.3 and 601.4 require
authorization by the Secretary of the Treasury.
(b) The penalty for unauthorized control and/or possession of
distinctive paper and/or distinctive counterfeit deterrents adopted in
Sec. Sec. 601.3 and 601.4 is found at 18 U.S.C. 474A.
Leonard R. Olijar,
Director.
[FR Doc. 2023-00854 Filed 1-17-23; 8:45 am]
BILLING CODE 4840-01-P
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</html>Indexed from Federal Register on January 18, 2023.
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