[Federal Register Volume 62, Number 151 (Wednesday, August 6, 1997)]
[Rules and Regulations]
[Pages 42212-42216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20646]
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DEPARTMENT OF THE TREASURY
31 CFR Part 27
Departmental Offices; Civil Penalty Assessment for Misuse of
Department of the Treasury Names, Symbols, Etc.
AGENCY: Departmental Offices, Treasury.
ACTION: Interim rule.
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SUMMARY: This interim rule sets forth the procedures by which civil
penalties may be imposed for violations of the statutory prohibition
against misuse of Department of the Treasury names, symbols, titles,
abbreviations, initials, seals, or badges. Section 333(c) of title 31,
United States Code, authorizes the Secretary of the Treasury to impose
these civil penalties. These regulations are being promulgated to
ensure that persons assessed a civil penalty under section 333(c) are
accorded due process.
Published in the proposed rules section of this Federal Register,
is a notice of proposed rulemaking inviting comments on the interim
rule for a 60-day period following the publication date of this interim
rule.
EFFECTIVE DATE: The interim regulations are effective August 6, 1997.
FOR FURTHER INFORMATION CONTACT: Karen Wehner, Senior Advisor, Office
of Enforcement, 202-622-0300 (not a toll-free call).
SUPPLEMENTARY INFORMATION:
Introduction
This document sets forth an interim rule implementing 31 U.S.C.
333(c), which authorizes the Secretary of the Treasury to impose a
civil penalty on any person who violates 31 U.S.C. 333(a), which
prohibits the misuse of Department of the Treasury names, symbols, etc.
Section 333(c) was enacted by title III, section 312(l)(1) of the
social Security Independence and Program improvements Act of 1994, Pub.
L. 103-296 (August 15, 1994).
Background
Section 333(a) of title 31, United States Code, prohibits, in
connection with any advertisement, solicitation, business activity, or
product, the unauthorized use (1) of the words, abbreviations,
initials, symbols, or emblems of Treasury or any of its components; (2)
the titles of any officer or employee of the Treasury or any of its
components; or (3) the words ``United States Savings Bond'' or the name
of any other obligation issued by the Treasury. This prohibition
extends to colorable imitations of words, titles, abbreviations,
initials, symbols, and emblems. Section 333(b) provides that the
prohibition applies regardless of whether the violator has used a
disclaimer of affiliation with the United States Government or any
agency thereof.
Section 333(c) provides that Secretary of the Treasury may impose a
civil penalty on any person who violates section 333(a), in an amount
not to exceed $5,000 for each use of material in violation of section
333(a), unless the use is in a broadcast or telecast, in which case the
penalty shall not exceed $25,000 for each use. Section 333(c) imposes a
three-year statute of limitation within which the Secretary of the
Treasury may assess civil penalties, beginning on the date of the
violation of section 333(a). Section 333(c) also imposes a two-year
statute of limitation within which the Secretary of the Treasury may
commence a civil action to recover any civil penalty imposed under
section 333(c), beginning on the date the civil penalty was assessed.
Section 333(d) sets forth criminal penalties for knowing violations
of 333(a). However, section 333(d)(3) provides that no criminal
proceeding may be commenced under its provisions if a civil penalty
previously has been assessed for that violation under section 333(c).
Similarly, section 333(c)(4) provides that no civil penalty may be
assessed under its provisions for a violation if a criminal proceeding
has been commenced for that violation under section 333(d).
These regulations implement the authority of the Secretary of the
Treasury under section 333(c) to impose a civil penalty on any person
who violates section 333(a). The regulations also ensure that any
person assessed with a civil penalty pursuant to section 333(c) is
accorded due process in the civil penalty proceeding. Specifically, the
regulations provide that any person assessed with a civil penalty
pursuant to section 333(c): (1) Shall receive a notice of assessment
citing the statutory provisions which allegedly have been violated, the
factual basis for the allegation, the amount of any proposed civil
monetary penalty and/or any other proposed civil or equitable remedy;
(2)
[[Page 42213]]
shall have the opportunity to provide a written response to the notice
of assessment requesting that the civil monetary penalty not be
imposed, why the penalty should be in a lesser amount than proposed and
or why the terms of a proposed civil or equitable remedy should be
modified; (3) if it is determined that a violation has occurred, shall
receive a final notice citing the statutory provisions found to have
been violated, the facts warranting this conclusion, an analysis of why
the facts and violations justify imposing a civil monetary penalty, the
amount of penalty being imposed and/or the terms of any civil or
equitable remedy imposed; and (4) is advised of the right to judicial
review pursuant to 5 U.S.C. 701 et seq. of any penalty or remedy
imposed. The regulations detail the time frames for issuing a notice of
assessment, filing a written response to the notice, issuing a final
notice of assessment and commencing a civil action to recover or
enforce any penalty or remedy imposed.
The regulations also cite a nonexclusive list of factors which may
be considered in determining whether to assess or impose a civil
penalty pursuant to section 333(c).
Administrative Procedure Act
The Treasury Department for good cause finds that notice of these
regulations, and public procedure thereon, is contrary to the public
interest and, therefore, is issuing these regulations as an interim
rule, without notice and public procedure under 5 U.S.C. 553(b), and
without being subject to the effective date limitation in Sec. 553(d).
See 5 U.S.C. Sec. 553(b)(B). Providing notice of these regulations and
an opportunity for public procedure thereon is contrary to the public
interest because the purposes of section 333 and these regulations are
to protect the public from commercial activities that convey the false
impression that they are associated with or approved, endorsed,
sponsored or authorized by the Department of the Treasury, and to
ensure that persons alleged to have engaged in any such activity are
accorded due process.
Executive Order 12866
It has been determined that this interim rule is not a significant
regulatory action as defined in E.O. 12866. Therefore, a regulatory
assessment is not required.
Regulatory Flexibility Act
The provisions of the Regulatory Flexibility Act do not apply
because no notice of proposed rulemaking is required by 5 U.S.C. 553 or
any other law. Accordingly, a regulatory flexibility analysis is not
required.
Drafting Information
The principal author of this document is Abigail Roth, Attorney-
Advisor, Office of the Assistant General Counsel (Enforcement).
However, other personnel in the Departmental Offices contributed to
this document both as to substance and style.
List of Subjects in 31 CFR Part 27
Administrative practice and procedure, Penalties.
For the reasons set out in the preamble, Title 31, Subtitle A, Part
27 of the Code of Federal Regulations is added to read as follows:
PART 27--CIVIL PENALTY ASSESSMENT FOR MISUSE OF DEPARTMENT OF THE
TREASURY NAMES, SYMBOLS, ETC.
Sec.
27.1 Purpose.
27.2 Definitions.
27.3 Assessment of civil penalties.
27.4 Factors to be considered.
27.5 Initial Notice of Assessment.
27.6 Written response.
27.7 Final Notice of Assessment.
27.8 Judicial review.
Authority: 31 U.S.C. 321, 333.
Sec. 27.1 Purpose.
(a) The regulations in this part implement the provisions of 31
U.S.C. 333(c), which authorizes the Secretary of the Treasury to assess
a civil penalty against any person who has misused the words, titles,
abbreviations, initials, symbols, emblems, seals, or badges of the
Department of the Treasury or any subdivision thereof in violation of
31 U.S.C. 333(a), in accordance with that section and this part.
(b) The regulations in this part do not apply to the extent that
the Secretary or his/her designee has specifically authorized the
person to manufacture, produce, sell, possess, or use the words,
titles, abbreviations, initials, symbols, emblems, seals, or badges by
written contract, agreement, or letter.
Sec. 27.2 Definitions.
(a) The term ``assessing official'' means:
(1) The head of a bureau or other subdivision of the Department of
the Treasury who has been delegated the authority to assess civil
penalties under 31 U.S.C. 333(c); or
(2) An officer or employee of a bureau or subdivision at the grade
of GS-15 or above to whom such authority has been redelegated by the
head of such bureau or subdivision.
(b) The term ``broadcast'' or ``telecast'' mean widespread
dissemination by electronic transmission or method, whether audio and/
or visual.
(c) The term ``civil penalty'' means:
(1) A civil monetary penalty; and
(2) Any other civil or equitable remedy deemed necessary to rectify
the potential for a continued misuse or harm from an activity found to
have been in violation of 31 U.S.C. 333 or this part.
(d) The term ``date of offense'' means the later of--
(1) The date that the misuse occurred;
(2) The date that the misuse had the effect of conveying the false
impression that the activity was associated with or approved, endorsed,
sponsored or authorized by the Department or any of its subdivisions or
officers or employees; or
(3) If the violation is a continuing one, the date on which the
misuse of the words, titles, abbreviations, initials, symbols, emblems,
seals, or badges protected by this part last occurred.
(e) The term ``days'' means calendar days, unless otherwise stated.
(f) The term ``person'' means an individual, partnership,
association, corporation, company, business, firm, manufacturer, or any
other organization or institution.
Sec. 27.3 Assessment of civil penalties.
(a) General Rule. An assessing official may impose a civil penalty
on any person--
(1) Who uses in connection with, or as a part of, any
advertisement, solicitation, business activity, or product, whether
alone or with other words, letters, symbols, or emblems;
(i) The words ``Department of the Treasury,'' ``United States
Secret Service,'' ``United States Customs Service,'' ``Internal Revenue
Service,'' ``Bureau of Alcohol, Tobacco and Firearms,'' ``Bureau of the
Public Debt,'' ``Bureau of Engraving and Printing,'' ``Comptroller of
the Currency,'' ``Federal Law Enforcement Training Center,''
``Financial Crimes Enforcement Network,'' ``United States Mint,'' or
the name of any service, bureau, office, or other subdivision of the
Department of the Treasury;
(ii) The titles ``Secretary of the Treasury,'' ``Treasurer of the
United States,'' ``Director of the Secret Service,'' ``Commissioner of
Customs,'' ``Commissioner of Internal Revenue,'' ``Director, Bureau of
Alcohol, Tobacco and Firearms,'' ``Commissioner of the Public Debt,''
``Director of the Bureau of Engraving and Printing,'' ``Comptroller of
the Currency,'' ``Director of the Federal Law Enforcement Training
[[Page 42214]]
Center,'' ``Director of the Financial Crimes Enforcement Network,''
``Director of the United States Mint,'' or the title of any other
officer or employee of the Department of the Treasury or subdivision
thereof;
(iii) The abbreviations or initials of any entity or title referred
to in paragraph (a)(1)(i) or (a)(1)(ii) of this section, including but
not limited to ``USSS,'' ``USCS,'' ``IRS,'' ``ATF,'' or ``BATF,''
``BPD,'' ``FLETC,'' ``FINCEN'' or ``FinCEN,''and ``SBMO'';
(iv) The words ``United States Savings Bond,'' including any
variation thereof, or the name of any other security, obligation, or
financial instrument issued by the Department of the Treasury or any
subdivision thereof;
(v) Any symbol, emblem, seal, or badge of an entity referred to in
paragraph (a)(1)(i) of this section (including the design of any
envelope, stationery, or identification card used by such an entity);
or
(vi) Any colorable imitation of any such words, titles,
abbreviations, initials, symbol, emblem, seal, or badge; and
(2) Where such use is in a manner that could reasonably be
interpreted or construed as conveying the false impression that such
advertisement, solicitation, business activity, or product is in any
manner approved, endorsed, sponsored, or authorized by, or associated
with the Department of the Treasury or any entity referred to in
paragraph (a)(1)(i) of this section, or any officer, or employee
thereof.
(b) Disclaimers. Any determination of whether a person has violated
the provisions of paragraph (a) of this section shall be made without
regard to any use of a disclaimer of affiliation with the United States
Government or any particular agency or instrumentality thereof.
(c) Civil Penalty. An assessing official may impose a civil penalty
on any person who violates the provisions of paragraph (a) of this
section. The amount of a civil monetary penalty shall not exceed $5,000
for each and every use of any material in violation of paragraph (a),
except that such penalty shall not exceed $25,000 for each and every
use if such use is in a broadcast or telecast.
(d) Time Limitations. (1) Civil penalties imposed under this part
must be assessed before the end of the three year period beginning on
the date of offense charged.
(2) An assessing official may commence a civil action to recover or
enforce any civil penalty imposed in a Final Notice of Assessment
issued pursuant to Sec. 27.7 at any time before the end of the two year
period beginning on the date of the Final Notice of Assessment. If
judicial review of the Final Notice of Assessment is sought, the two
year period begins to run from the date that a final and unappealable
court order is issued.
(e) Criminal Proceeding. No civil penalty may be imposed under this
part with respect to any violation of paragraph (a) of this section
after a criminal proceeding on the same violation has been commenced by
indictment or information under 31 U.S.C. 333(d).
Sec. 27.4 Factors to be considered.
The assessing official will consider relevant factors when
determining whether to assess or impose a civil penalty under this
part, and the amount of a civil monetary penalty. Those factors may
include, but are not limited to, the following:
(a) The scope of the misuse;
(b) The purpose and/or nature of the misuse;
(c) The extent of the harm caused by the misuse;
(d) The circumstances of the misuse; and
(e) The benefit intended to be derived from the misuse.
Sec. 27.5 Initial Notice of Assessment.
The assessing official shall serve an Initial Notice of Assessment
by United States mail or other means upon any person believed to be in
violation of Sec. 27.3 and otherwise subject to a civil penalty. The
notice shall provide the name and telephone number of an agency officer
or employee who can provide information concerning the notice and the
provisions of this part, and shall include the following:
(a) A specific reference to the provisions of Sec. 27.3 violated;
(b) A concise statement of the facts that support the conclusion
that such a violation occurred;
(c) The amount of the penalty proposed, and/or any other proposed
civil or equitable remedy;
(d) A notice informing the person alleged to be in violation of
Sec. 27.3 that he/she:
(1) May, within 30 days of the date of the notice, pay the proposed
civil monetary penalty and consent to each proposed civil or equitable
remedy, thereby waiving the right to make a written response under
Sec. 27.6 and to seek judicial review under Sec. 27.8:
(i) By electronic funds transfer (EFT) in accordance with
instructions provided in the notice, or
(ii) By means other than EFT only with the written approval of the
assessing official;
(2) May make a written response within 30 days of the date of the
notice asserting, as appropriate:
(i) Why a civil monetary penalty and/or other civil or equitable
remedy should not be imposed;
(ii) Why a civil monetary penalty should be in a lesser amount than
proposed; and
(iii) Why the terms of a proposed civil or equitable remedy should
be modified;
(3) May be represented by an attorney or other representative,
provided that a designation of representative signed by the person
alleged to be in violation is received by the assessing official; and
(4) May request, within 20 days of the date of the notice, a copy
of or opportunity to review any documents and/or other evidence
compiled and relied on by the agency in determining to issue the notice
(the assessing official reserves the right to assert privileges
available under law and may decline to disclose certain documents and/
or other evidence); and
(e) The Initial Notice of Assessment shall also inform the person
that:
(1) If no written response is received within the time allowed in
Sec. 27.6(b), a Final Notice of Assessment may be issued without a
presentation by the person;
(2) If a written response has been made and it is deemed necessary,
the assessing official may request, orally or in writing, additional
information from the respondent;
(3) A Final Notice of Assessment may be issued in accordance with
Sec. 27.7 requiring that the civil monetary penalty be paid and
compliance with the terms of any other civil or equitable remedy;
(4) A Final Notice of Assessment is subject to judicial review in
accordance with 5 U.S.C. 701 et seq.; and
(5) All submissions sent in response to the Initial
Notice of Assessment must be transmitted to the address specified
in the notice and include the name, address, and telephone number of
the respondent.
Sec. 27.6 Written response.
(a)(1) A person served with an Initial Notice of Assessment may
make a written response explaining why the civil penalty should not be
imposed, explaining why a civil monetary penalty should be in a lesser
amount than proposed and/or explaining why the terms of a proposed
civil or equitable remedy should be modified. The written response must
provide:
(i) A reference to and specifically identify the Initial Notice of
Assessment involved;
(ii) The full name of the person charged;
[[Page 42215]]
(iii) If not a natural person, the name and title of the head of
the organization charged; and
(iv) If a representative of the person charged is filing the
written response, a copy of the duly executed designation as
representative.
(2) The written response must admit or deny each violation of
Sec. 27.3 charged in the Initial Notice of Assessment. Any charge not
specifically denied will be presumed to be admitted. Where a charge is
denied, the respondent shall specifically set forth the legal or
factual basis upon which the charge is denied. If the basis of the
written response is that the person charged is not the person
responsible for the misuse(s) charged, the written response must set
forth sufficient information to allow the agency to determine the truth
of such an assertion. The written response should include any and all
documents and/or other information that the respondent believes should
be a part of the administrative record on the matter.
(b) Time. (1) Except as provided in paragraph (b)(2) of this
section, any written response made under this paragraph must be
received not later than 30 days after the date of the Initial Notice of
Assessment.
(2) If a request for documents or other evidence is made pursuant
to Sec. 27.5(d)(4), the written response must be received not later
than 20 days after the date of the Department's response to the
request.
(3)(i) In computing the number of days allowed for filing a written
response under this paragraph, the first day counted is the day after
the date of the Initial Notice of Assessment. If the last date on which
the response is required to be filed by this paragraph is a Saturday,
Sunday or Federal holiday, the response will be due on the next weekday
after that date.
(ii) If a response is transmitted by United States mail, it will be
deemed timely filed if postmarked on or before the due date.
(4) The assessing official may extend the period for making a
written response under paragraphs (b)(1) and (b)(2) for good cause
shown. Generally, failure to obtain representation in a timely manner
will not be considered good cause.
(c) Filing. A written response will be considered filed on the date
received at the address specified in the Initial Notice of Assessment.
The response may be sent by personal delivery, United States mail or
commercial delivery. At the discretion of the assessing official,
filing may be accomplished by facsimile or any other method deemed
appropriate.
(d) The assessing official will fully consider the facts and
arguments submitted by the respondent in the written response and any
other documents filed pursuant to this paragraph in determining whether
to issue a Final Notice of Assessment under Sec. 27.7, the appropriate
amount of the civil monetary penalty imposed and the terms of any other
appropriate civil or equitable remedy.
Sec. 27.7 Final Notice of Assessment.
(a) In making a final determination whether to impose a penalty,
the assessing official shall take into consideration all available
information in the administrative record on the matter, including all
information provided in or with a written response timely filed by the
respondent and any additional information provided pursuant to
Sec. 27.5(e)(2). The assessing official will determine whether:
(1) The facts warrant a conclusion that no violation has occurred;
or
(2) The facts warrant a conclusion that one or more violations have
occurred; and
(3) The facts and violations found justify the conclusion that a
civil penalty should be imposed.
(b) If the assessing official determines that no violation has
occurred, the official shall promptly send a letter indicating that
determination to the person served with an Initial Notice of Assessment
and to any designated representative of such person.
(c)(1) If it has been determined that a violation has occurred, the
assessing official shall issue a Final Notice of Assessment to the
person served with an Initial Notice of Assessment and to any
designated representative of such person.
(2) The assessing official may, in his/her discretion:
(i) Impose a civil monetary penalty and/or any civil or equitable
remedy deemed necessary to rectify the potential for a continued misuse
or harm from the violation(s);
(ii) Not impose a civil monetary penalty and/or civil or equitable
remedy; or
(iii) Impose a civil monetary penalty and/or civil or equitable
remedy and condition payment of the civil monetary penalty on the
violator's future compliance with 31 U.S.C. 333, this part and any
civil or equitable remedy contained in the Final Notice of Assessment.
If a civil monetary penalty is imposed, the assessing official shall
determine the appropriate amount of the penalty in accordance with 31
U.S.C. 333(c)(2).
(3) The Final Notice of Assessment shall:
(i) Include:
(A) A specific reference to the provisions of Sec. 27.3 found to
have been violated;
(B) A concise statement of the facts warranting a conclusion that a
violations has occurred;
(C) An analysis of how the facts and violation(s) justify the
conclusion that a civil monetary penalty and/or civil or equitable
remedy should be imposed; and
(D) The amount of each civil monetary penalty imposed, a statement
as to how the amount of each penalty was determined, and the terms of
any civil or equitable remedy deemed necessary to rectify the potential
for a continued misuse or harm from the violation(s); and
(ii) Inform the person that:
(A) Payment of a civil monetary penalty imposed by the Final Notice
of Assessment must be made within 30 days of the date of the notice,
and that any civil or equitable remedy imposed must be complied with as
provided in the Final Notice of Assessment;
(B) Payment of a civil monetary penalty imposed by the Final Notice
of Assessment shall be by EFT in accordance with instructions provided
in the notice, unless the assessing official has given written approval
to have payment made by other means;
(C) payment of a civil monetary penalty imposed by the Final Notice
of Assessment constitutes consent by the person to comply with the
terms of any civil or equitable remedy contained in the notice;
(D) If payment of a civil monetary penalty imposed by the Final
Notice of Assessment has been waived on the condition that the person
comply with the terms of any civil or equitable remedy contained in the
notice or comply in the future with 31 U.S.C. 333 and this part,
failure by the person to so comply will make the civil monetary penalty
payable on demand;
(E) If a civil monetary penalty is not paid within 30 days of the
date of the Final Notice of Assessment (or on demand under paragraph
(C)(3)(ii)(D) of this sectiion), or if a civil or equitable remedy is
not complied with in accordance with the terms of the notice, a civil
action to collect the penalty or enforce compliance may be commenced at
any time within two years of the date of the Final Notice of
Assessment; and
(F) Any civil monetary penalty and civil or equitable remedy
imposed by the Final Notice of Assessment may be subject to judicial
review in accordance with 5 U.S.C. 70 et seq.
[[Page 42216]]
Sec. 27.8 Judicial review.
A final Notice of Assessment issued under this party may be subject
to judicial review pursuant to 5 U.S.C. 701 et seq.
Dated: July 18, 1997.
Raymond W. Kelly,
Under Secretary for Enforcement.
[FR Doc. 97-20646 Filed 8-5-97; 8:45 am]
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