Financial Crimes Enforcement Network; Inflation Adjustment of Civil Monetary Penalties
| Published date | 10 October 2019 |
| Record Number | 2019-22094 |
| Section | Rules and Regulations |
| Court | Financial Crimes Enforcement Network |
Federal Register, Volume 84 Issue 197 (Thursday, October 10, 2019)
[Federal Register Volume 84, Number 197 (Thursday, October 10, 2019)]
[Rules and Regulations]
[Pages 54495-54496]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22094]
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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 publishes this final rule to reflect inflation
adjustments to its civil monetary penalties (``CMPs'') as mandated by
the Federal Civil Penalties Inflation Adjustment Act of 1990, as
amended by the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015 (collectively referred to herein as ``the
Act''). This rule adjusts certain CMPs within the jurisdiction of
FinCEN to the maximum amount required by the Act.
DATES: Effective October 10, 2019.
FOR FURTHER INFORMATION CONTACT: The FinCEN Resource Center at (800)
767-2825 or email [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
In order to improve the effectiveness of CMPs and to maintain their
deterrent effect, the Federal Civil Penalties Inflation Adjustment Act
of 1990, 28 U.S.C. 2461 note (``the Inflation Adjustment Act''), as
amended by the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015 (Pub. L. 114-74) (``the 2015 Act''), requires
Federal agencies to adjust each CMP provided by law within the
jurisdiction of the agency. The 2015 Act requires agencies to adjust
the level of CMPs with an initial ``catch-up'' adjustment through an
interim final rulemaking and to make subsequent annual adjustments for
inflation, without needing to provide notice and the opportunity for
public comment otherwise required by 5 U.S.C. 553. The 2015 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\ However, the increased CMPs apply only with respect to
underlying violations occurring after the date of enactment of the
2015 Act, i.e., after November 2, 2015.
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II. Method of Calculation
The method of calculating CMP adjustments applied in this final
rule is required by the 2015 Act. Under the 2015 Act and the Office of
Management and Budget (``OMB'') guidance required by the 2015 Act,
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-19-04 of December 14, 2018, the
adjustment multiplier for 2019 is 1.02522. In order to complete the
2019 annual adjustment, each current CMP is multiplied by the 2019
adjustment multiplier. Under the 2015 Act, any increase in CMP must be
rounded to the nearest multiple of $1.
Procedural Matters
1. Administrative Procedure Act
The Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 (Section 701(b)) requires agencies, beginning in 2017, to
make annual adjustments for inflation to CMPs without needing to
provide notice and the opportunity for public comment required by 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. FinCEN is charged only with performing ministerial
computations to determine the dollar amount of 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,
5316-5332; Title III, sec. 314, Pub. L. 107-56, 115 Stat. 307; sec.
701, Pub. L. 114-74, 129 Stat. 599.
0
2. Amend Sec. 1010.821 by revising Table 1 of Sec. 1010.821 to read
as follows:
Sec. 1010.821 Penalty adjustment and table.
* * * * *
(b) * * *
[[Page 54496]]
Table 1 of Sec. 1010.821--Penalty Adjustment Table
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Maximum
penalty
amounts or
range of
minimum and
Penalties as maximum
U.S. Code citation Civil monetary penalty description last amended penalty
by statute amounts for
penalties
assessed on or
after October
10, 2019
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12 U.S.C. 1829b(j)......................... Relating to Recordkeeping $10,000 $21,039
Violations For Funds Transfers.
12 U.S.C. 1955............................. Willful or Grossly Negligent 10,000 21,039
Recordkeeping Violations.
31 U.S.C. 5318(k)(3)(C).................... Failure to Terminate Correspondent 10,000 14,231
Relationship with Foreign Bank.
31 U.S.C. 5321(a)(1)....................... General Civil Penalty.............. 25,000 57,317
Provision for Willful Violations of -100,000 -229,269
Bank Secrecy Act Requirements.
31 U.S.C. 5321(a)(5)(B)(i)................. Foreign Financial Agency 10,000 13,247
Transaction--Non-Willful Violation
of Transaction.
31 U.S.C. 5321(a)(5)(C)(i)(I).............. Foreign Financial Agency 100,000 132,469
Transaction--Willful Violation of
Transaction.
31 U.S.C. 5321(a)(6)(A).................... Negligent Violation by Financial 500 1,146
Institution or Non-Financial Trade
or Business.
31 U.S.C. 5321(a)(6)(B).................... Pattern of Negligent Activity by 50,000 89,170
Financial Institution or Non-
Financial Trade or Business.
31 U.S.C. 5321(a)(7)....................... Violation of Certain Due Diligence 1,000,000 1,423,088
Requirements, Prohibition on
Correspondent Accounts for Shell
Banks, and Special Measures.
31 U.S.C. 5330(e).......................... Civil Penalty for Failure to 5,000 8,457
Register as Money Transmitting
Business.
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Jamal El-Hindi,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2019-22094 Filed 10-9-19; 8:45 am]
BILLING CODE 4810-02-P
