[Federal Register Volume 68, Number 237 (Wednesday, December 10, 2003)]
[Rules and Regulations]
[Pages 68720-68723]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30632]


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FEDERAL RESERVE SYSTEM

12 CFR Part 264b

[Docket No. R-1174]


Rules Regarding Foreign Gifts and Decorations

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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[[Page 68721]]

SUMMARY: The Board is revising its Rules Regarding Foreign Gifts and 
Decorations, which govern the acceptance, retention, and disposition of 
gifts and decorations from foreign governments by Board employees under 
the Foreign Gifts and Decorations Act of 1966, as amended (``Act''). 
The revisions reorganize and update the language of the existing rules, 
update the internal procedures of the Office of the Secretary, augment 
practices for complying with the Act, and delegate certain approval and 
enforcement authority. The substantive requirements for compliance with 
the rules remain unchanged.

EFFECTIVE DATE: The final rule is effective January 9, 2004.

FOR FURTHER INFORMATION CONTACT: Robert deV. Frierson, Deputy Secretary 
of the Board, Board of Governors of the Federal Reserve System, 
Washington, DC at (202) 452-3711. For users of Telecommunications 
Device for the Deaf (TDD) only, contact (202) 263-4869.

SUPPLEMENTARY INFORMATION: Section 515(a)(1) of the Foreign Relations 
Authorization Act, Fiscal Year 1978, amended the Foreign Gifts and 
Decorations Act of 1966 (5 U.S.C. 7342), making substantial changes to 
the law governing acceptance and retention of gifts and decorations 
from foreign governments. In 1979, the Board implemented these changes 
by adopting its Rules Regarding Foreign Gifts and Decorations (12 CFR 
part 264b).
    The final rule updates the organization and language of the 
existing rules to make them easier to understand. In addition, it 
augments practices for complying with the Act, which include 
aggregating the value of all tangible gifts presented at or marking an 
event for purposes of applying the minimal-value threshold ($285 or 
less, adjusted every three years for inflation), but not aggregating 
the total value of tangible gifts received at two or more events, even 
if on the same day. The revisions also clarify that gifts of travel or 
travel expenses of more than minimal value for travel taking place 
entirely outside the United States are accepted in accordance with 
specific instructions of the Board if preapproved by the Administrative 
Governor or the Administrative Governor's designee. Gifts of travel or 
travel expenses accepted without such prior approval must be reported 
to the Office of the Secretary and must receive after-the-fact 
approval, or the Board employee is personally liable to repay the 
expenses.
    The final rule also delegates to the Administrative Governor (or 
designee) the authority to approve acceptance and retention of 
decorations and to report, after consultation with the General Counsel, 
to the Attorney General cases in which there is reason to believe that 
a Board employee has violated the Act. The Office of the Secretary is 
delegated the authority to approve and retain tangible gifts of more 
than minimal value for official use.

Regulatory Flexibility Act

    This final rule relates solely to the internal management, 
operations, and personnel of the Board and, therefore, is exempt from 
notice and comment under 5 U.S.C. 533(a)(2). Accordingly, the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) does not apply and a 
regulatory flexibility analysis is not required.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3506; 5 CFR 1320 appendix A.1), the Board reviewed the final rule under 
the authority delegated to the Board by the Office of Management and 
Budget. No collections of information pursuant to the Paperwork 
Reduction Act are contained in the final rule.

Plain Language

    Section 722 of the Gramm-Leach-Bliley Act (12 U.S.C. 4809) requires 
the Board to use ``plain language'' in all rules published in the 
Federal Register after January 1, 2000. The Board believes that the 
final rule is simple and straightforward and is consistent with this 
``plain language'' directive.

List of Subjects in 12 CFR Part 264b

    Decorations, medals, awards, Foreign relations, Government 
employees, Government property.

Authority and Issuance

0
For the reasons set forth in the preamble, revise part 264b of title 12 
of the Code of Federal Regulations to read as follows:

PART 264b--RULES REGARDING FOREIGN GIFTS AND DECORATIONS

Sec.
264b.1 Purpose and scope.
264b.2 Definitions.
264b.3 Restrictions on acceptance of gifts and decorations.
264b.4 Gifts of minimal value.
264b.5 Gifts of more than minimal value.
264b.6 Requirements for gifts of more than minimal value.
264b.7 Decorations.
264b.8 Disposition or retention of gifts and decorations deposited 
with the Office of the Secretary.
264b.9 Enforcement.
264b.10 Certain grants excluded.

    Authority: 5 U.S.C. 552, 7342; 12 U.S.C. 248(i).

Sec.  264b.1  Purpose and scope.

    These rules govern when Board employees, their spouses, and their 
dependents may accept and retain gifts and decorations from foreign 
governments under the Foreign Gifts and Decorations Act of 1966, as 
amended (5 U.S.C. 7342) (``Act'').


Sec.  264b.2  Definitions.

    When used in this part, the following terms have the meanings 
indicated:
    (a) Board employees means:
    (1) Members of the Board of Governors of the Federal Reserve System 
(``Board''), officers, and other employees of the Board, including 
experts or consultants while employed by, and acting on behalf of, the 
Board; and
    (2) Spouses (unless separated) or dependents (within the meaning of 
section 152 of the Internal Revenue Code of 1986 (26 U.S.C. 152)) of 
such persons.
    (b) Foreign government means:
    (1) Any unit of foreign governmental authority, including any 
foreign national, State, local, or municipal government;
    (2) Any international or multinational organization whose 
membership is composed of any unit of foreign government as described 
in paragraph (b)(1) of this section; and
    (3) Any agent or representative of any such unit or organization, 
while acting as such.
    (c) Gift means a tangible or intangible present (other than a 
decoration) tendered by, or received from, a foreign government.
    (d) Decoration means an order, device, medal, badge, insignia, 
emblem, or award tendered by, or received from, a foreign government.
    (e) Minimal value means retail value in the United States at the 
time of acceptance of $285 or less as of January 1, 2002, and at 3-year 
intervals thereafter, as redefined in regulations prescribed by the 
Administrator of General Services, in consultation with the Secretary 
of State, to reflect changes in the consumer price index for the 
immediately preceding 3-year period.
    (f) Administrative Governor means the Board member serving as the 
Administrative Governor and includes persons designated by the 
Administrative Governor to exercise the authority granted under this 
part in the governor's absence.

[[Page 68722]]

Sec.  264b.3  Restrictions on acceptance of gifts and decorations.

    (a) Board employees are prohibited from requesting or otherwise 
encouraging the tender of a gift or decoration from a foreign 
government.
    (b) Board employees are prohibited from accepting a gift or 
decoration from a foreign government, except in accordance with this 
part.


Sec.  264b.4  Gifts of minimal value.

    (a) Board employees may accept and retain a gift of minimal value 
tendered and received as a souvenir or mark of courtesy. If more than 
one tangible gift is presented at or marks an event, the value of all 
such gifts must not exceed ``minimal value.'' If tangible gifts are 
presented at or mark separate events, their value must not exceed 
``minimal value'' for each event, but may exceed ``minimal value'' for 
all events, even if the events occur on the same day.
    (b) Board employees may determine at the time a gift is offered 
whether it is of minimal value, or they may submit an accepted gift as 
soon as practicable to the Office of the Secretary for valuation.
    (c) Disagreements over whether a gift is of minimal value will be 
resolved by an independent appraisal under procedures established by 
the Office of the Secretary.


Sec.  264b.5  Gifts of more than minimal value.

    (a) Educational scholarships or medical treatment. Board employees 
may accept and retain gifts of more than minimal value when such gifts 
are in the nature of an educational scholarship or medical treatment.
    (b) Travel or travel expenses. Board employees may accept gifts of 
travel or expenses for travel taking place entirely outside the United 
States (such as transportation, food, and lodging) of more than minimal 
value if appropriate, consistent with the interests of the United 
States, and permitted by the Board under paragraph (b)(1) or (b)(2) of 
this section.
    (1) Board employees may accept gifts of travel or expenses for 
travel under paragraph (b) of this section in accordance with specific 
instructions of the Board, as evidenced by the prior approval of the 
Administrative Governor. Board employees must request prior approval 
under procedures established by the Office of the Secretary.
    (2) Board employees may accept gifts of travel or expenses for 
travel under paragraph (b) of this section without the prior approval 
of the Administrative Governor if such expenses are reported under 
Sec.  264b.6(b) and the Administrative Governor approves their 
acceptance after the fact. Board employees must personally repay gifts 
of travel or expenses for travel of more than minimal value that are 
not approved by the Administrative Governor.
    (c) Other gifts. (1) Board employees may typically regard the 
refusal of gifts of more than minimal value at the inception (when 
offered or received without a prior offer) as consistent with the 
interests and general policy of the United States.
    (2) Board employees may accept gifts of more than minimal value 
when it appears that refusal would likely cause offense or 
embarrassment or otherwise adversely affect the foreign relations of 
the United States. Tangible gifts are considered to have been accepted 
on behalf of the United States and become the property of the United 
States on acceptance. Accordingly, they must be deposited and 
documented in accordance with Sec.  264b.6(a) and can only be returned 
or otherwise processed by the Office of the Secretary under Sec.  
264b.8.


Sec.  264b.6  Requirements for gifts of more than minimal value.

    (a) Tangible gifts. Board employees must deposit tangible gifts of 
more than minimal value with the Office of the Secretary within 60 days 
of acceptance and assist in preparing a statement that contains the 
following information for each gift:
    (1) The name and position of the Board employee;
    (2) A brief description of the gift and the circumstances 
justifying acceptance;
    (3) The identity, if known, of the foreign government and the name 
and position of the individual who presented the gift;
    (4) The date of acceptance of the gift;
    (5) The estimated value in the United States of the gift at the 
time of acceptance; and
    (6) The disposition or current location of the gift.
    (b) Travel or travel expenses without prior approval. Board 
employees who accept a gift of travel or expenses for travel under 
Sec.  264b.5(b)(2) without the prior approval of the Administrative 
Governor must submit a report to the Office of the Secretary within 30 
days of acceptance that contains the following information:
    (1) The name and position of the Board employee;
    (2) A brief description of the gift, including its estimated value, 
and the circumstances justifying acceptance; and
    (3) The identity, if known, of the foreign government and the name 
and position of the individual who presented the gift.
    (c) Reports to the Secretary of State. The Office of the Secretary 
must report the information contained in the statements described in 
paragraphs (a) and (b) of this section to the Secretary of State, who 
must publish in the Federal Register not later than January 31 of each 
year a comprehensive listing of all such statements for gifts of more 
than minimal value that were received by federal employees during the 
preceding year.


Sec.  264b.7  Decorations.

    (a) Board employees may accept, retain, and wear a decoration 
tendered or awarded by a foreign government in recognition of active 
field service in time of combat operations or for other outstanding or 
unusually meritorious performance, subject to the approval of the 
Administrative Governor. Requests for approval must be submitted to the 
Office of the Secretary and contain a statement of the circumstances 
surrounding the award and include any accompanying documentation. The 
recipient may retain the decoration pending action on the request.
    (b) Decorations accepted by Board employees without the approval of 
the Administrative Governor are considered to have been accepted on 
behalf of the United States and must be deposited within 60 days of the 
decoration's acceptance with the Office of the Secretary for 
disposition or retention under Sec.  264b.8.


Sec.  264b.8  Disposition or retention of gifts and decorations 
deposited with the Office of the Secretary.

    (a) The Office of the Secretary may dispose of gifts and 
decorations deposited under Sec. Sec.  264b.6(a) and 264b.7(b) by 
returning them to the donors or by handling them in accordance with 
instructions from the General Services Administration under applicable 
law.
    (b) The Office of the Secretary may approve and retain gifts and 
decorations deposited under Sec. Sec.  264b.6(a) and 264b.7(b) for 
official use. The Office of the Secretary must dispose of a gift within 
30 days of the termination of its official use in accordance with 
instructions from the General Services Administration under applicable 
law.


Sec.  264b.9  Enforcement.

    (a) The Administrative Governor, after consultation with the 
General Counsel, must report to the Attorney General cases in which 
there is reason to believe that a Board employee has violated the Act.

[[Page 68723]]

    (b) The Attorney General may bring a civil action in any district 
court of the United States against a Board employee who knowingly 
solicits or accepts a gift from a foreign government in violation of 
the Act, or who fails to deposit or report such a gift as required by 
the Act. The court may assess a maximum penalty of the retail value of 
a gift improperly solicited or received plus $5,000.


Sec.  264b.10  Certain grants excluded.

    This part does not apply to grants and other forms of assistance to 
which Sec.  108A of the Mutual Educational and Cultural Exchange Act of 
1961 applies. See 22 U.S.C. 2458a.

    By order of the Board of Governors of the Federal Reserve 
System, December 4, 2003.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 03-30632 Filed 12-9-03; 8:45 am]
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