Rule2023-08073
Delegations to Bureau of Enforcement, Investigations, and Compliance
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
April 17, 2023
Effective
May 17, 2023
Issuing agencies
Federal Maritime Commission
Abstract
The Federal Maritime Commission (Commission) is delegating authority to the Bureau of Enforcement, Investigations, and Compliance (BEIC), to issue Notice(s) of Violations and to compromise civil penalty claims subject to review by the Commission. Delegation of authority to BEIC provides enhanced efficiency flexibility during the enforcement process while maintaining Commission oversight.
Full Text
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<title>Federal Register, Volume 88 Issue 73 (Monday, April 17, 2023)</title>
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[Federal Register Volume 88, Number 73 (Monday, April 17, 2023)]
[Rules and Regulations]
[Pages 23361-23364]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-08073]
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FEDERAL MARITIME COMMISSION
46 CFR Parts 501 and 502
[Docket No. FMC-2023-0011]
RIN 3072-AC97
Delegations to Bureau of Enforcement, Investigations, and
Compliance
AGENCY: Federal Maritime Commission
ACTION: Final rule.
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SUMMARY: The Federal Maritime Commission (Commission) is delegating
authority to the Bureau of Enforcement, Investigations, and Compliance
(BEIC), to issue Notice(s) of Violations and to compromise civil
penalty claims subject to review by the Commission. Delegation of
authority to BEIC provides enhanced efficiency flexibility during the
enforcement process while maintaining Commission oversight.
DATES: The rule is effective without further action on May 17, 2023.
FOR FURTHER INFORMATION CONTACT: William Cody, Secretary; Phone: (202)
523-5725; Email: <a href="/cdn-cgi/l/email-protection#eb988e88998e9f8a9992ab8d8688c58c849d"><span class="__cf_email__" data-cfemail="1360767061766772616a53757e703d747c65">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Introduction
The Commission's Bureau of Enforcement, Investigations, and
Compliance (BEIC) is responsible for investigating potential violations
of the Shipping Act of 1984, as amended, and associated Commission
regulations, and initiating enforcement actions. The Commission is
delegating authority to BEIC to issue Notice(s) of Violations (NOV) and
to compromise civil penalty claims subject to approval by the
Commission. Delegation of authority to BEIC coupled with Commission
review of compromise agreements will provide enhanced efficiency and
flexibility during the enforcement process while maintaining Commission
oversight.
II. Background
Pursuant to its authority under the Shipping Act of 1984, as
amended, Commission regulations currently provide for two types of
enforcement actions seeking civil penalties, formal enforcement action
under 46 CFR 502.63 and informal compromise procedures under 46 CFR
502.604. Currently, both require Commission approval to proceed at
multiple steps during the process, thereby making the enforcement
process unnecessarily burdensome and hindering the efficient resolution
of enforcement matters.
The current process for BEIC to conduct an enforcement action
requires: (1) providing notice to the subjects of investigations that
BEIC intends to recommend that the Commission initiate enforcement
proceedings and allowing the subject an opportunity to respond before
BEIC submits those recommendations and responses to the Commission for
approval; (2) receiving Commission approval before formal or informal
enforcement action is undertaken, including approval to enter into
compromise discussions; and (3) receiving Commission approval of any
proposed compromise agreements. The current process has proven
procedurally complicated since it involves multiple levels and cycles
of approval prior to any case culminating in resolution. The rigidity
of the process combined with the opportunity for respondents to submit
responses of up to 40 pages has increased time and resource costs in
enforcement matters both for the Commission and for the entities it
regulates.
III. Regulatory Changes
As briefly described in Section II, the Commission is streamlining
the current process by delegating authority to BEIC to issue Notice(s)
of Violations setting forth alleged violations and to compromise such
claims, subject to review by the Commission instead of requiring
Commission approval at each step under the current approach. Compromise
agreements will be subject to Commission review after the parties have
reached an agreement rather than before negotiations begin and again at
the conclusion, thereby increasing the efficiency of Commission
enforcement efforts by removing an added level of approval at the
outset of an informal enforcement action.
The revised procedure will also give BEIC delegated authority with
respect to the investigative and initial compromise phases of the
enforcement process. Specifically, BEIC will have the authority to (1)
directly enter discussions to compromise civil penalty allegations
prior to the issuance of an NOV if a party requests to negotiate a
compromise, (2) issue NOVs providing notice of alleged violations and
the corresponding civil penalty proposed by BEIC, or (3) recommend that
the Commission institute a formal adjudicatory proceeding. An NOV will
provide the opportunity for the subject to either request to enter into
compromise discussions or to submit a written response, if desired. The
Commission retains the authority to review any proposed compromise
agreement reached by the parties pursuant to Sec. 501.11(f)(2); and
Commission approval continues to be required to initiate a formal
proceeding pursuant to Sec. 502.63(a). Accordingly, BEIC has the
flexibility to assess an enforcement matter and to determine the most
appropriate process given the facts of a particular matter.
A. Informal Enforcement Process
The Commission is revising the informal enforcement process under
Sec. 502.63(d) to give BEIC discretion to issue an NOV to expedite the
enforcement process. The current pre-enforcement notice (PEN) process
requires multiple levels of review and approval for an enforcement case
to progress, starting with the issuance of a PEN and culminating either
in a compromise agreement or a formal proceeding. In either instance,
BEIC's ability to compromise is subject to approval by the Commission.
Once a PEN is issued, the respondent has 30
[[Page 23362]]
days to submit a written response, limited in length to 40 pages,
addressing the alleged violations identified in the PEN. If a
respondent desires to initiate compromise discussions regarding BEIC's
preliminary determinations instead of proceeding with a written
submission, BEIC is currently required to obtain Commission approval
prior to entering such discussions. These regulatory changes are
intended to provide a basic framework for the new process. Under the
revised process, the respondent may either request to enter compromise
discussions (and BEIC would proceed, if appropriate, with these
discussions immediately without first seeking Commission approval) or
submit a written response.
B. Delegation of Authority to BEIC
The Commission is revising Sec. 501.18 to add a new section giving
BEIC the authority to issue NOVs and informally identify and compromise
civil penalties, subject to review by the Commission. The grant of
delegated authority gives BEIC the flexibility to resolve cases where a
respondent requests to compromise the civil penalty ahead of the
issuance of a NOV as well as authority to enter into compromise
discussions after issuance of a NOV. The discretion to exercise either
option allows BEIC to conclude cases on an expedited timeline where a
respondent is preemptively offering to not only negotiate in good faith
but also to provide disclosures that may lead to the opening of other
investigations of violations of the Shipping Act by other entities
involved in violations voluntarily disclosed by the respondent.
Commission oversight is maintained by providing the Commission with the
opportunity to review all compromise agreements prior to them becoming
effective.
IV. Rulemaking Analysis and Notices
A. Review Under the Administrative Procedure Act
The Administrative Procedure Act (APA) requires that a notice of
proposed rulemaking be published in the Federal Register unless certain
exceptions apply. 5 U.S.C. 553(b). These exceptions include rules of
agency procedure or practice, 5 U.S.C. 553(b)(A), as well as rules for
which the agency finds good cause to waive notice and comment as
unnecessary, impracticable or contrary to the public interest. 5 U.S.C.
553(b)(B). This rule amends regulations that set forth the agency's
internal procedures by delegating to the BEIC the authority to engage
in the investigative and initial compromise phases of the enforcement
process while retaining the Commission's authority to review any
proposed compromise agreement reached by the parties pursuant to Sec.
501.11(f)(2) and in approving the initiation of a formal proceeding
pursuant to Sec. 502.63(a). Accordingly, the exception to the notice
and comment provisions provided under 5 U.S.C. 553(b)(A) applies.
Similarly, because this rule involves changes to the Commission's
internal procedures on its administratively handling of enforcement-
related matters, holding notice and comment on these changes would be
impracticable, unnecessary, and contrary to the public interest since
it would delay Commission's implementation of these changes and may
impact the efficiently handling of these matters. For these reasons,
the Commission also finds that notice and comment on the adoption of
these internal procedural changes is unnecessary, impracticable and
contrary to the public interest under 5 U.S.C. 553(b)(B).
B. Congressional Review Act
This final rule is not a ``rule'' as defined by the Congressional
Review Act (CRA), codified at 5 U.S.C. 801 et seq., and is not subject
to the provisions of the CRA. The CRA adopts the Administrative
Procedure Act's definition of a ``rule'' in 5 U.S.C. 551, subject to
certain exclusions. See 5 U.S.C. 804(3). In particular, the CRA does
not apply to rules relating to agency management and personnel and
rules of agency organization, procedure, and practice that do not
substantially affect the rights or obligations of non-agency parties.
Id. This final rule relates to agency management and personnel as well
as agency organization, procedures, and practices. Specifically, this
final rule revises internal Commission delegations of investigatory and
initial settlement authority to BEIC and the regulations governing
enforcement procedures. The only effect the changes have with respect
to non-agency parties is to provide parties with an earlier opportunity
to enter compromise discussions with BEIC. The Commission already
provides notice and an opportunity to respond in both formal and
informal enforcement procedures. For informal compromise actions, the
rule delegates to BEIC the authority to issue a NOV and to enter into
compromise discussions Accordingly, although the Interim Final Rule may
affect the timing and manner of non-agency parties' interactions with
the Commission, it does not affect their underlying rights and
obligations under the Shipping Act and the Commission's regulations.
Therefore, this final rule is not a ``rule'' under the CRA and is not
subject to the CRA's requirements.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (codified as amended at 5 U.S.C.
601-612) provides that whenever an agency promulgates a final rule
after being required to publish a notice of proposed rulemaking under
the APA (5 U.S.C. 553), the agency must prepare and make available a
final regulatory flexibility analysis (FRFA) describing the impact of
the rule on small entities. 5 U.S.C. 604. An agency is not required to
publish an FRFA, however, for the following types of rules, which are
excluded from the APA's notice-and-comment requirement: interpretative
rules; general statements of policy; rules of agency organization,
procedure, or practice; and rules for which the agency for good cause
finds that notice and comment is impracticable, unnecessary, or
contrary to public interest. See 5 U.S.C. 553(b).
As discussed above, this final rule is a rule of agency
organization, procedure, or practice. Therefore, the APA does not
require publication of a notice of proposed rulemaking in this
instance, and the Commission is not required to prepare an FRFA.
D. National Environmental Policy Act
The Commission's regulations categorically exclude certain
rulemakings from any
requirement to prepare an environmental assessment or an
environmental impact statement because they do not increase or decrease
air, water or noise pollution or the use of fossil fuels, recyclables,
or energy. 46 CFR 504.4. This rule revises internal Commission
delegations of investigatory and initial settlement authority to BEIC
and the regulations governing enforcement procedures with respect to
potential Shipping Act violations. This rulemaking thus falls within
the categorical exclusions for procedural rules pursuant to 46 CFR part
502 (Sec. 504.4(a)(4)), investigatory and adjudicatory proceedings,
the purpose of which is to ascertain past violations of the Shipping
Act of 1984 (Sec. 504.4(a)(22)), and matters related to Commission
personnel (Sec. 504.4(a)(28)).
Therefore, no environmental assessment or environmental impact
statement is required.
E. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA)
requires an agency to seek and receive approval from the Office of
Management and
[[Page 23363]]
Budget (OMB) before collecting information from the public. 44 U.S.C.
3507. The agency must submit collections of information in rules to OMB
in conjunction with the publication of the notice of proposed
rulemaking. 5 CFR 1320.11. This final rule does not contain any
collections of information as defined by 44 U.S.C. 3502(3) and 5 CFR
1320.3(c).
F. Executive Order 12988 (Civil Justice Reform)
This rule meets the applicable standards in E.O. 12988 titled,
``Civil Justice Reform,'' to minimize litigation, eliminate ambiguity,
and reduce burden.
G. Regulation Identifier Number
The Commission assigns a regulation identifier number (RIN) to each
regulatory action listed in the Unified Agenda of Federal Regulatory
and Deregulatory Actions (Unified Agenda). The Regulatory Information
Service Center publishes the Unified Agenda in April and October of
each year. You may use the RIN contained in the heading at the
beginning of this document to find this action in the Unified Agenda,
available at <a href="http://www.reginfo.gov/public/do/eAgendaMain">http://www.reginfo.gov/public/do/eAgendaMain</a>.
List of Subjects
46 CFR Part 501
Administrative practice and procedure, Authority delegations
(Government agencies), Organization and functions (Government
agencies).
46 CFR Part 502
Administrative practice and procedure, Claims, Equal access to
justice, Investigations, Lawyers, Maritime carriers, Penalties,
Reporting and recordkeeping requirements.
For the reasons set forth above, the Federal Maritime Commission
amends 46 CFR parts 501 and 502 of chapter IV of Title 46, Code of
Federal Regulations as set forth below:
PART 501--THE FEDERAL MARITIME COMMISSION--GENERAL
0
1. Revise the authority citation for part 501 to read as follows:
Authority: 5 U.S.C. 551-557, 701-706, 2903 and 6304; 31 U.S.C.
3721; 41 U.S.C. 414 and 418; 44 U.S.C. 501-520 and 3501-3520; 46
U.S.C. 40101-41309, 42101-42109, 44101-44106, 46101-46108; Pub. L.
89-56, 70 Stat. 195; 5 CFR part 2638; Pub. L. 104-320, 110 Stat.
3870.
0
2. Add Sec. 501.18 to subpart B to read as follows:
Sec. 501.18 Delegation to the Director, Bureau of Enforcement,
Investigations, and Compliance.
As set forth in Sec. Sec. 502.63(d) and 502.604, the Director,
Bureau of Enforcement, Investigations, and Compliance (BEIC) has
delegated authority to issue Notice(s) of Violations (NOV) and to
compromise civil penalty claims subject to review by the Commission
pursuant to Sec. 501.11(f)(2). This delegation shall include the
authority to compromise claims relating to the retention, suspension,
or revocation of ocean transportation intermediary licenses.
PART 502--RULES OF PRACTICE AND PROCEDURE
0
3. Revise the authority citation for part 502 to read as follows:
Authority: 5 U.S.C. 504, 551, 552, 553, 556(c), 559, 561-569,
571-596; 5 U.S.C. 571-584; 18 U.S.C. 207; 28 U.S.C. 2112(a); 31
U.S.C. 9701; 46 U.S.C. 40103-40104, 40304, 40306, 40501-40503,
40701-40706, 41101-41109, 41301-41309, 44101-44106, 46105; 5 CFR
part 2635.
0
4. In Sec. 502.63, revise paragraphs (a), paragraph (d) paragraph
heading and (d)(1) to read as follows:
Sec. 502.63 Commission enforcement action.
(a) The Commission may issue an Order of Investigation and Hearing
commencing an adjudicatory investigation against one or more
respondents alleging one or more violations of the statutes that it
administers. Prior to recommending the issuance of an Order of
Investigation and Hearing, BEIC will provide a respondent with notice
of BEIC's intent and provide the respondent with the opportunity to
make a written submission within 15 days for consideration by the
Commission.
* * * * *
(d) Informal enforcement process. (1) BEIC may issue a Notice of
Violations (NOV) to provide the person or persons with notice of the
alleged violations and provide the opportunity for informal resolution
of such claims pursuant to the procedures in Sec. 502.604. [Rule 63.]
* * * * *
0
5. Revise Sec. 502.604 to read as follows:
Sec. 502.604 Compromise of penalties: Relation to assessment
proceedings.
(a) Scope. Except in pending civil penalty assessment proceedings
provided for in Sec. 502.603, the Commission, when it has reason to
believe a violation has occurred, may invoke the informal compromise
procedures of this section.
(b) Notice. When the Commission considers it appropriate to afford
an opportunity for the compromise of a civil penalty, it will, except
when circumstances render it unnecessary, send a Notice of Violations
(NOV) to the respondent by electronic and registered or certified mail,
or by other means reasonably calculated to give notice. The NOV will
describe specific violation(s) on which the claim is based, including
the particular facts, dates, and other elements necessary for the
respondent to identify the specific conduct constituting the alleged
violation; the amount of the penalty demanded; and the names of
Commission personnel with whom the demand may be discussed, if the
person desires to compromise the penalty. The NOV also will state the
deadlines for the institution and completion of compromise
negotiations. If a compromise agreement is not reached between the
parties and BEIC intends to recommend that the Commission institute a
formal proceeding pursuant to Sec. 502.63(a), then BEIC shall provide
notice of its intent to the respondent and provide the respondent with
the opportunity to make a written submission within 15 days for
consideration by the Commission.
(c) Request for compromise. Any person receiving an NOV provided
for in paragraph (b) of this section may, within the time specified,
request opportunity for informal resolution, deny the violation, or
submit materials explaining, mitigating, or showing extenuating
circumstances, as well as make voluntary disclosures of information and
documents.
(d) Criteria for compromise. In addition to the factors set forth
in Sec. 502.603(b), in compromising a penalty claim, the Commission
may consider litigative concerns, the cost of collecting the claim, and
enforcement policy.
(e) Disposition of claims in compromise procedures. (1) When a
penalty is compromised and the respondent agrees to settle, a
compromise agreement shall be executed by the respondent. This
agreement, after reciting the nature of the claim, will include a
statement evidencing the respondent's agreement to the compromise of
the Commission's penalty claim for the amount set forth in the
agreement and will also embody an approval and acceptance provision
which is to be signed by the appropriate Commission official subsequent
to Commission review under Sec. 501.11, if any. Upon compromise of the
penalty in the agreed amount, a duplicate original of the fully
executed agreement shall be furnished to the respondent.
[[Page 23364]]
(2) Upon completion of the compromise, the Commission may issue a
public notice thereof, the terms and language of which are not subject
to negotiation.
(f) Relation to assessment proceedings. Except by order of the
Commission, no compromise procedure shall be initiated or continued
after institution of a Commission assessment proceeding directed to the
same violations. Any offer of compromise submitted by the respondent
pursuant to this section shall be deemed to have been furnished by the
respondent without prejudice and shall not be used against the
respondent in any proceeding.
(g) Delegation of compromise authority. The compromise authority
set forth in this subpart is delegated to the Director, Bureau of
Enforcement, Investigations, and Compliance. The Director, Bureau of
Enforcement, Investigations, and Compliance, has the authority to
negotiate the terms of compromise agreements, provided that any
compromise agreement shall not become effective until the Commission
has had the opportunity to review pursuant to Sec. 501.11(f)(2). [Rule
604.]
By the Commission.
William Cody,
Secretary.
[FR Doc. 2023-08073 Filed 4-14-23; 8:45 am]
BILLING CODE 6730-02-P
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</html>Indexed from Federal Register on April 17, 2023.
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