Financial Crimes Enforcement Network; Inflation Adjustment of Civil Monetary Penalties
| Published date | 19 February 2020 |
| Citation | 85 FR 9370 |
| Record Number | 2020-02526 |
| Section | Rules and Regulations |
| Court | Financial Crimes Enforcement Network |
Federal Register, Volume 85 Issue 33 (Wednesday, February 19, 2020)
[Federal Register Volume 85, Number 33 (Wednesday, February 19, 2020)]
[Rules and Regulations]
[Pages 9370-9371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02526]
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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 ``2015
Act''). This rule adjusts certain CMPs within the jurisdiction of
FinCEN to the maximum amount required by the 2015 Act.
DATES: Effective February 19, 2020.
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 (``Inflation Adjustment Act''), as amended
by the Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 (Pub. L. 114-74) (``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\ The increased CMPs, however, 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-20-05 of December 16, 2019, the
adjustment multiplier for 2020 is 1.01764. In order to complete the
2020 annual adjustment, each current CMP is
[[Page 9371]]
multiplied by the 2020 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
Section 701(b) of the 2015 Act 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.
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 5316-5332; 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 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
Penalties as last maximum penalty
U.S. Code citation Civil monetary penalty amended by amounts for
description statute penalties
assessed on or
after February
19, 2020
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12 U.S.C. 1829b(j)...................... Relating to Recordkeeping $10,000 $21,410
Violations For Funds Transfers.
12 U.S.C. 1955.......................... Willful or Grossly Negligent 10,000 21,410
Recordkeeping Violations.
31 U.S.C. 5318(k)(3)(C)................. Failure to Terminate 10,000 14,482
Correspondent Relationship with
Foreign Bank.
31 U.S.C. 5321(a)(1).................... General Civil Penalty Provision 25,000 58,328
for Willful Violations of Bank -100,000 -233,313
Secrecy Act Requirements.
31 U.S.C. 5321(a)(5)(B)(i).............. Foreign Financial Agency 10,000 13,481
Transaction--Non-Willful
Violation of Transaction.
31 U.S.C. 5321(a)(5)(C)(i)(I)........... Foreign Financial Agency 100,000 134,806
Transaction--Willful Violation
of Transaction.
31 U.S.C. 5321(a)(6)(A)................. Negligent Violation by Financial 500 1,166
Institution or Non-Financial
Trade or Business.
31 U.S.C. 5321(a)(6)(B)................. Pattern of Negligent Activity by 50,000 90,743
Financial Institution or Non-
Financial Trade or Business.
31 U.S.C. 5321(a)(7).................... Violation of Certain Due 1,000,000 1,448,191
Diligence Requirements,
Prohibition on Correspondent
Accounts for Shell Banks, and
Special Measures.
31 U.S.C. 5330(e)....................... Civil Penalty for Failure to 5,000 8,606
Register as Money Transmitting
Business.
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Jamal El-Hindi
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2020-02526 Filed 2-18-20; 8:45 am]
BILLING CODE 4810-02-P
