Rule2023-00943
Financial Crimes Enforcement Network; Inflation Adjustment of Civil Monetary Penalties
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 19, 2023
Effective
January 19, 2023
Issuing agencies
Treasury DepartmentFinancial Crimes Enforcement Network
Abstract
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.
Full Text
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<title>Federal Register, Volume 88 Issue 12 (Thursday, January 19, 2023)</title>
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[Federal Register Volume 88, Number 12 (Thursday, January 19, 2023)]
[Rules and Regulations]
[Pages 3311-3313]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-00943]
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DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
31 CFR Part 1010
Financial Crimes Enforcement Network; Inflation Adjustment of
Civil Monetary Penalties
AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.
ACTION: Final rule.
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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.
FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section
at 1-800-767-2825, or electronically at <a href="/cdn-cgi/l/email-protection#b5d3c7d6f5d3dcdbd6d0db9bd2dac3"><span class="__cf_email__" data-cfemail="d2b4a0b192b4bbbcb1b7bcfcb5bda4">[email protected]</span></a>.
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''
[[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\
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\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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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\
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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.
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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.
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.
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:
PART 1010--GENERAL PROVISIONS
0
1. The authority citation for part 1010 continues to read as follows:
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.
0
2. Amend Sec. 1010.821 by revising table 1 following paragraph (b) to
read as follows:
Sec. 1010.821 Penalty adjustment and table.
* * * * *
(b) * * *
Table 1 of Sec. 1010.821--Penalty Adjustment Table
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Maximum penalty amounts
or range of minimum and
U.S. Code citation Civil monetary penalty Penalties as last maximum penalty amounts
description amended by statute for penalties assessed
on or after 1/19/2022
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12 U.S.C. 1829b(j)................ Relating to Recordkeeping $10,000 $24,793
Violations For Funds
Transfers.
12 U.S.C. 1955.................... Willful or Grossly 10,000 24,793
Negligent Recordkeeping
Violations.
31 U.S.C. 5318(k)(3)(C)........... Failure to Terminate 10,000 16,771
Correspondent
Relationship with Foreign
Bank.
31 U.S.C. 5321(a)(1).............. General Civil Penalty 25,000-100,000 67,544-270,180
Provision for Willful
Violations of Bank
Secrecy Act Requirements.
31 U.S.C. 5321(a)(5)(B)(i)........ Foreign Financial Agency 10,000 15,611
Transaction--Non-Willful
Violation of Transaction.
31 U.S.C. 5321(a)(5)(C)(i)(I)..... Foreign Financial Agency 100,000 156,107
Transaction--Willful
Violation of Transaction.
31 U.S.C. 5321(a)(6)(A)........... Negligent Violation by 500 1,350
Financial Institution or
Non-Financial Trade or
Business.
31 U.S.C. 5321(a)(6)(B)........... Pattern of Negligent 50,000 105,083
Activity by Financial
Institution or Non-
Financial Trade or
Business.
31 U.S.C. 5321(a)(7).............. Violation of Certain Due 1,000,000 1,677,030
Diligence Requirements,
Prohibition on
Correspondent Accounts
for Shell Banks, and
Special Measures.
31 U.S.C. 5330(e)................. Civil Penalty for Failure 5,000 9,966
to Register as Money
Transmitting Business.
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[[Page 3313]]
Himamauli Das,
Acting Director, Financial Crimes Enforcement Network.
[FR Doc. 2023-00943 Filed 1-18-23; 8:45 am]
BILLING CODE 4810-02-P
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