[Federal Register Volume 72, Number 207 (Friday, October 26, 2007)]
[Rules and Regulations]
[Pages 60772-60779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-21132]



[[Page 60772]]

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DEPARTMENT OF THE TREASURY

Monetary Offices

31 CFR Part 92

RIN 1506-AA58


Assessment of Civil Penalties for Misuse of Words, Letters, 
Symbols, and Emblems of the United States Mint

AGENCY: United States Mint, Treasury.

ACTION: Final rule.

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SUMMARY: The United States Mint is adopting a new rule establishing 
procedures under which the United States Mint will implement and 
execute 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 United States Mint.

DATES: Effective Date: This final rule is effective November 26, 2007.

FOR FURTHER INFORMATION CONTACT: James Adler, Senior Attorney, United 
States Mint, at (202) 354-7286.

SUPPLEMENTARY INFORMATION: The United States Mint is adopting today the 
new regulation set forth below under 31 CFR part 92.

I. Background

    Section 333(c) of title 31, United States Code, 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, including 
those of the United States Mint. The Secretary of the Treasury has 
delegated to the Director of the United States Mint the authority to 
enforce the civil penalty provisions of 31 U.S.C. 333(c) with respect 
to the misuse of United States Mint words, titles, abbreviations, 
initials, symbols, seals, trademarks, and badges, and with respect to 
the misuse of Department of the Treasury words, titles, abbreviations, 
initials, symbols, seals, trademarks, and badges when in connection 
with activities related to United States Mint operations and programs. 
This rule establishes procedures that the United States Mint will 
follow to carry out that authority and to ensure that those assessed a 
civil penalty under 31 U.S.C. 333(c) are accorded due process. These 
procedures are based on the procedures of the Department of the 
Treasury at 31 CFR part 27.

II. Notice of Proposed Rulemaking

    This final rule is based on the notice of proposed rulemaking 
published Wednesday, January 12, 2005 (the ``NPRM'') (70 FR 2081). The 
NPRM sought public comment on the proposed rule.
    The comment period for the NPRM ended on February 18, 2005. The 
United States Mint received 17 comments from members of the public, 
businesses and trade associations. The Federal Trade Commission also 
submitted a staff comment.

III. Summary of Comments

    Eight of the comments were from members of the public. Seven of the 
eight expressed support for the United States Mint's proposed 
regulation. One of these comments objected to the use of names by 
companies that ``attempt to confuse the public into the belief that the 
product is being sold and promoted by the U.S. Mint.'' Another 
expressed the opinion, ``You should come down as hard as possible on 
these companies.'' A third stated, ``I strongly recommend the proposal 
maintained be adopted that would prevent firms from cashing in on U.S. 
Mint.'' A fourth asserted that it is ``about time the U.S. Mint played 
hardball and protected its products. Use of Mint products to make money 
by misleading new collectors gives a black eye to collecting.'' The 
eighth submission enclosed a newspaper article on the proposed 
regulation without comment.

A. Discussion of Substantive Comments From the Public

    Substantive comments from the public included a request that the 
United States Mint not ``limit penalties to audience size'' and a 
suggestion that ``civil penalties must include a clause for full 
restitution for those customers who purchased the items that were 
marketed in violation of the statute.''
    As to the comment on restitution, we note that the proposed 
regulation would have permitted the imposition of a ``civil monetary 
penalty and/or civil or equitable remedy.'' Upon further examination of 
31 U.S.C. 333(c) and the statute's legislative history, however, we 
have determined that the term ``civil penalty'' in this regulation 
should refer only to a monetary penalty payable to the Treasury. 
Accordingly, the final regulation will permit an assessing official to 
impose a civil monetary penalty on a person ``who violates the 
provisions of paragraph (a) of this section.'' The phrase ``civil 
penalty'' is defined in the regulation to mean ``(1) A civil monetary 
penalty.'' Consistent with our view of the underlying statutory 
authority, therefore, the final regulation will not permit the United 
States Mint to order restitution as a remedy. This, of course, is in no 
way intended to limit any relief to which a person who is injured by 
the misleading use of United States Mint names or symbols may be 
entitled in private litigation or through an enforcement action by 
another Federal or state agency.
    With regard to the comment that the United States Mint not ``limit 
penalties to audience size,'' the proposed regulation's operative 
clause with regard to the amount of penalty imposed for a violation 
reads as follows:

    (c) Civil penalty. The 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 penalty shall not exceed 
$5,000 for each and every use of any material in violation of 
paragraph (a) of this section, except that such penalty shall not 
exceed $25,000 for each and every use if such use is in a broadcast 
or telecast.

These provisions do not limit penalties to ``audience size,'' but are 
based on each misuse of material and may be as high as $25,000 for each 
and every misuse if the misuse is in a broadcast or telecast.

    In reviewing the public comments on civil penalties, and the role 
of the examining official in recommending civil penalties to the 
assessing official, we concluded that the proposed rule did not make it 
clear that the Initial Notice of Assessment would include a proposed 
civil monetary penalty. We have clarified the provisions of Sec.  92.15 
to provide that the Initial Notice of Assessment will include a 
statement of the proposed penalty.

B. Discussion of Substantive Comments From Businesses, Trade 
Associations and Others Generally

    Six of the comments that the United States Mint received were from 
small businesses involved in the coin business. Each of these 
commenters expressed concern over the proposed regulation, with several 
expressing direct opposition. Two expressed general support for the 
regulation.
1. Fairness Comments
    The United States Mint acknowledges the perception of several 
commenters that the proposed regulation may not be fairly enforced 
because the United States Mint sells United States coinage and, under 
the regulation, would have the power to take action against private 
businesses whose advertisements and solicitations misuse the names, 
symbols

[[Page 60773]]

and indicia of the United States Mint or the United States Treasury 
Department.
    Several commenters expressed concern about the role of the United 
States Mint's Director as the decision maker under the regulation. One 
commenter raised the issue of whether the United States Mint's Director 
can be considered an impartial decision maker. Another commenter 
alleged that the regulations were unfair in that they gave the United 
States Mint, a competitor in the marketing of legal tender coinage, 
discretion to assess civil penalties against its own competitors. This, 
it stated, ``creat[ed] a situation that is intrinsically unfair and 
open to abuse.''
    We note, however, that there is no inherent conflict of interest in 
having the United States Mint policing the improper use of the United 
States Mint's and the Treasury Department's names and symbols. The 
owner of intellectual property has the responsibility of protecting 
that property from improper use; this doctrine is codified and well 
recognized in the body of Federal intellectual property law. 
Additionally, no United States Mint or Treasury Department official who 
could have a role in the execution of the regulation has any official 
duty that inherently conflicts with the interests that the regulation 
is designed to protect. The authority of a Government agency to assess 
fines, in accordance with the authority and procedures established 
under law, naturally requires officials of that agency to act fairly, 
impartially, and judiciously. Every United States Mint and Treasury 
Department official--like all Government officials--has a duty to avoid 
conflicts of interest, act impartially, not give preferential 
treatment, protect and conserve public property, and adhere to the law. 
5 CFR 2635.101. These duties are not inconsistent with these officials' 
fiduciary responsibility to protect public funds. Although it is true 
that the United States Mint generates revenues through the sale of 
numismatic items, the United States Mint is a Federal agency--not a 
commercial enterprise. By law, any amount in the United States Mint 
Public Enterprise Fund that is determined to be in excess of the amount 
required by the Fund, including the proceeds of fines assessed under 
the regulation, shall be transferred to the Treasury for deposit as 
miscellaneous receipts. See 31 U.S.C. 5136. Accordingly, fines paid 
under the regulation are not analogous to profit generated by a private 
company; they do not accrue to the benefit of either the United States 
Mint or its officials but, rather, to the General Treasury.
2. Economic Interest Comments
    One commenter stated, ``These regulations will be enforced by 
government officials who have an economic interest in the results of 
the enforcement proceedings.'' Contrary to the comment, neither the 
examining official nor the assessing official will have any economic 
interest in the results of enforcement proceedings under this subpart. 
Employee compensation for all United States Mint employees is not based 
upon the United States Mint's coin sales or revenue. The United States 
Mint has performance awards and incentives that do affect compensation; 
however, these are based on criteria relating to the United States 
Mint's efficiency of operations and reductions in overhead and other 
costs. Civil penalties assessed under this regulation affect none of 
these criteria.
3. Competition Comments
    Several commenters expressed the concern that the United States 
Mint would use its enforcement ability under the regulation in an 
unfair manner. One stated, ``The regulation gives the Mint too much 
power to unfairly pick and choose the competitors it wishes to 
punish.'' Another stated, ``We are concerned about the Mint's path on 
trying to eliminate competition with regulations and unfair enforcement 
actions.'' The United States Mint, in proposing and enacting these 
regulations, does not seek to ``eliminate competition'' but, rather, 
seeks to reduce consumer confusion and deceptive practices. Under 
Federal law, the United States Mint is the only entity permitted to 
produce United States coinage. As a Government monopoly, the United 
States Mint does not have competition in producing legal tender coinage 
for the United States. The purpose of the proposed rule, therefore, is 
not to eliminate competition but, instead, to protect consumers, 
collectors and the public from the improper use of Treasury and United 
States Mint names and symbols.
    This protection is necessary because third parties increasingly 
have engaged in marketing practices that have the potential to mislead 
consumers by using the United States Mint's and Treasury Department's 
name and symbols with products not produced by either the United States 
Mint or the Treasury Department. More specifically, the United States 
Mint is aware of advertisements that have used the United States Mint's 
name and symbols in marketing tokens and medals not produced by the 
United States Mint. These tokens and medals are designed to resemble 
the designs of United States legal tender coinage despite the fact that 
tokens and medals have no status as legal tender in the United States. 
The United States Mint is also aware that other parties have acquired 
coinage and numismatic items produced by the United States Mint, have 
altered them (usually by plating and coloring them), and then have 
advertised the resulting items for sale as products of the United 
States Mint. We view these practices as being deceptive because, in 
both instances, the use of the United States Mint's and the Treasury 
Department's names and symbols in these contexts conveys the false 
impression that the advertisement, product or activity is endorsed, 
sponsored or affiliated with the United States Mint or the Treasury 
Department. The goal of the United States Mint in enacting these 
regulations is simply to prevent the deceptive misuse of the Treasury 
Department's and the United States Mint's names and symbols by third 
parties.
4. Comments on the Use of Disclaimers
    Two commenters also expressed concern over the provision in the 
proposed regulations that disclaimers will not be considered when 
determining whether an advertisement is misusing a United States Mint 
or Treasury Department name or symbol. One commented, ``If a company 
has an advertisement for the sale of U.S. Mint coins, but clearly 
states that it is not affiliated, endorsed or authorized by the U.S. 
Mint, the regulation states that the disclaimers will be ignored. This 
makes no sense.''
    Similarly, the Federal Trade Commission's staff comment, in part, 
addressed the proposed rule's treatment of disclaimers of affiliation 
and indicated, ``The proposed rule's treatment of disclaimers of 
affiliation in this process may raise some potential legal and policy 
issues.'' The comment then set forth the FTC's approach to reviewing 
advertising claims.
    We note, however, that the statute upon which the regulation is 
based specifically addresses disclaimers. It states the following:
    (b) Treatment of Disclaimers.
    Any determination of whether a person has violated the provisions 
of subsection (a) 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.

31 U.S.C. 333(b).
    Given the clear requirement in 31 U.S.C. 333(b) that a 
determination of a violation be made without regard to any use of a 
disclaimer of affiliation, this

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requirement cannot be removed from the regulation.
    We believe, however, that it is appropriate to consider the use of 
a disclaimer as a factor in determining the amount of any civil penalty 
that the Assessing Official imposes under the regulation. If the 
disclaimer is clear and prominent and is likely to be noticed by a 
consumer and is not contradicted or confused by any claims made in the 
materials found to be in violation of 31 U.S.C. 333, then the Examining 
Official may propose, and the Assessing Official may assess, a civil 
penalty in an amount lower than that which would otherwise be 
appropriate, including, where warranted, a penalty in a nominal amount.

C. Discussion of Substantive Comments From Trade Associations in 
Particular

    The remaining comments were submitted by two trade associations. 
The Magazine Publishers of America, while supporting the proposed rule, 
indicated its concern ``that the proposed rule may inadvertently impose 
liability on publishers and other media that, through no fault of their 
own, disseminate false advertisements.'' The Magazine Publishers of 
America requested that an exception be included in the final rule ``to 
exempt the media from fines * * * associated with false advertising.'' 
The Magazine Publishers of America also cited several Federal statutes, 
court decisions and state statutes in which media publishers were not 
held responsible for the content of advertisements from parties who 
purchased advertising space in their publications.
    After considering these comments, we concur that publishers of 
newspapers, magazines, and other broadcasters of media, who merely sell 
advertising space to third parties should not be held responsible for 
ensuring compliance with the rule proposed by the United States Mint. 
The rule focuses on the person who ``uses'' the operable words, 
letters, symbols, or emblems in connection with, or as part of, an 
advertisement, solicitation, business activity, or product; the rule 
does not focus on a party who makes space available to the using 
person. Accordingly, we believe that the rule could not be applied to 
assess a penalty against a publisher or broadcaster that merely sells 
space and has no responsibility for the substantive content of an 
advertisement. However, we do not believe that amending the rule to 
excuse publishers or broadcasters from liability under all possible 
circumstances is appropriate. Rather, in each case, the examining and 
assessing officials will look to the extent of the publisher's or 
broadcaster's participation in the preparation of the challenged 
advertisement, solicitation, or business activity, and whether the 
publisher or broadcaster knew or should have known during that 
preparation process that the advertisement, solicitation, or business 
activity included improper uses of names, emblems, or symbols covered 
by 31 U.S.C. 333 and the rule. Finally, we note that the same 
definition of ``person'' has appeared at 31 CFR 27.2(f) (the Treasury 
Department regulation implementing 31 U.S.C. 333) since 1997 with no 
reported action against any publisher or broadcaster.
    The other trade association submitting comments was the Industry 
Council for Tangible Assets (ICTA), a trade association for rare coin 
and precious metals dealers. In summary, the ICTA believes the proposed 
regulations: (1) ``exceed the mandate of 31 U.S.C. 333 by adding 
`trademark' to the scope of the regulation''; (2) ``[are] overly broad 
and will deny due process to those who directly compete with the 
Mint''; (3) ``raise serious concerns about violations of commercial 
free speech protected by the first amendment''; and (4) ``are flawed in 
their failure to allow for a reasonable period to cure alleged 
violations.'' The ICTA comments also indicate that ``existing law 
provides the Mint with adequate remedies for perceived problems and 
there are more appropriate regulations that could be proposed to 
accomplish the goals of the Mint.'' The Professional Numismatics Guild 
sent a letter expressing its support for the comments made by the ICTA.
1. Use of the Word ``Trademark'' in the Definition of ``Symbol''
    The ICTA asserts that the United States Mint has ``exceeded the 
mandate of 31 U.S.C. 333 by adding `trademark' to the scope of the 
regulation.'' It also asserts that United States Mint's definition of 
the phrase ``symbol'' under the regulation ``facially appears to go 
beyond the scope of 31 U.S.C. 333(c)'' as it includes ``a trademark, 
designation of origin, or mark of identification.'' ITCA Comment at 13.
    An examination of the statute, 31 U.S.C. 333, shows that the word 
``symbol'' occurs in two places in subsection (a) although the statute 
does not define the term. The statute uses the term ``symbol'' in 
section (a) stating the following:

    No person may use, 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. * * *

The United States Mint's proposed regulation closely tracked the 
language of the statute in subsection (a). The United States Mint's 
proposed regulation, however, defined the term ``symbol'' as ``any 
letter, word, number, picture, design, graphic or any combination 
thereof used by the United States Mint or the Treasury Department as a 
trademark, designation of origin, or mark of identification.'' See 
Proposed Regulation, section 92.12(i).

    It is well-established that words in a statute are to be given 
their common, ordinary meaning. See Federal Deposit Ins. Corp. v. 
Meyer, 114 S. Ct. 996, 1000 (1994); Director, Office of Workers' 
Compensation Programs v. Greenwich Collieries, 114 S. Ct. 2251, 2255 
(1994). The word ``symbol'' has been commonly defined as ``[s]omething 
that represents something else by association, resemblance, or 
convention, especially a material object used to represent something 
invisible.'' American Heritage Dictionary of the English Language (4th 
ed. 2006). Similarly, under the Lanham Trademark Act, trademarks 
``includ[e] any word, name, symbol, or device, or any combination 
thereof adopted and used by a manufacturer or merchant to identify his 
goods and distinguish them from those manufactured or sold by others.'' 
15 U.S.C. 1127. Because of the close association between the word 
``symbol'' and the definition of trademark, we believe including 
trademarks as part of the definition of symbol in the final rule is a 
reasonable construction of the statute. See Chevron U.S.A., Inc. v. 
Natural Resources Defense Council, Inc., 467 U.S. 837, 844 (1984) 
(noting that ``considerable weight should be accorded to an executive 
department's construction of a statutory scheme it is entrusted to 
administer'').
    The United States Mint, however, has decided to modify slightly the 
definition of the word ``symbol'' in the final rule for clarity. Hence, 
``symbol'' is now defined as ``any design or graphic used by the United 
States Mint or the Treasury Department to represent themselves or their 
products.'' It further clarifies that a ``design or graphic may include 
(1) a trademark, designation of origin, or mark of identification, or 
(2) a stylized depiction comprising letters, words, or numbers.''
2. Assertion That the Proposed Rule Is ``Overly Broad'' and ``Violates 
Due Process''
    The ICTA, secondly, asserts that the proposed rule ``[is] overly 
broad and will deny due process to those who directly compete with the 
Mint.'' After

[[Page 60775]]

reviewing the proposed regulation and the enabling statute, we believe 
the regulation is narrowly drawn and is not overly broad. The proposed 
regulation closely tracks each of the elements of the enabling statute. 
The only new material sets forth the procedures being adopted for 
imposing a civil penalty. These procedures include written notice of 
any potential violations, an opportunity to respond, consideration of 
any response, a written decision with an evaluation of each penalty 
factor, and a right of appeal to any person found to have violated the 
regulation. These procedures, in our view, fully comply with applicable 
due process requirements.
3. Concern That the Rule Violates the First Amendment
    The ITCA commented that the proposed regulation ``threaten[s] the 
freedom of commercial speech under the First Amendment.'' In 
particular, the ITCA indicated that ``the regulations fail the Supreme 
Court's Central Hudson test because they are over broad.'' In Central 
Hudson Gas v. Public Service Comm. of New York, 447 U.S. 557, 563-64 
(1980), however, the United States Supreme Court noted that ``there can 
be no constitutional objection to the suppression of commercial 
messages that do not accurately inform the public about lawful 
activity.'' The Court also made it clear that ``[t]he government may 
ban forms of communication more likely to deceive the public than to 
inform it'' Id. (citing Friedman v. Rogers, 440 U.S. 1, 13, 15-16 
(1979); Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 464-65 (1978)). 
In light of this passage from Central Hudson, we do not believe the 
regulation violates any commercial free speech right under the First 
Amendment. To the contrary, the regulation implements a law that 
functions precisely in the manner to which the Central Hudson Court 
stated that ``there could be no constitutional objection.'' 
Specifically, 31 U.S.C. 333 effectively ``ban[s] forms of communication 
more likely to deceive the public than to inform it'': the misuse of 
Department of the Treasury or United States Mint names, titles, 
abbreviations, initials, symbols, or emblems in a manner that conveys a 
false impression.
4. Concern About Providing a Reasonable Period To Cure Alleged 
Violations
    The ICTA asserted that the proposed regulations ``are flawed in 
their failure to allow for a reasonable period to cure alleged 
violations.'' However, the statute does not provide for, nor does it 
require the agency to afford to an offending party, a cure period. 
Indeed, we note that another part of the statute (31 U.S.C. 333(d)) 
provides for criminal penalties for precisely the same offenses over 
which the agency would exercise civil penalty authority. Although a 
notice of assessment naturally would put an alleged offending party on 
notice that it immediately should consider steps to cure the alleged 
misuse, the inherent purpose for the statute is to allow the agency to 
penalize the offending party for the misuse. In light of this concern, 
however, the United States Mint has modified the final regulation 
slightly so that it expressly requires the examining and assessing 
officials to consider the repeated nature of the misuse in determining 
whether, and to what extent, a penalty should be imposed against an 
offending party.

D. Comments on Impartiality

    Some of the commenters pointed out that if the Government seeks to 
infringe upon a citizen's liberty, it ``always has the obligation of 
providing a neutral decision-maker--one who is not inherently biased 
against the individual or who has personal interest in the outcome.'' 
Tumey v. Ohio, 273 U.S. 510, 532 (1927). We acknowledge the commenters' 
concern about impartiality, but conclude that the proposed regulations 
fully comply with the agency's obligations in this respect.
    In general, ``[t]he mere fact that an administrative or 
adjudicative body derives a financial benefit from fines or penalties 
that it imposes is not in general a violation of due process * * *.'' 
Van Harkin v. City of Chicago, 103 F.3d 1346 at 1348 (7th Cir. 1997) 
(citing Dugan v. Ohio, 277 U.S. 61 (1928)); see Commonwealth of the 
Northern Mariana Islands v. Kaipat, 94 F.3d 574, 580-81 (9th Cir. 
1996); Doolin Security Savings Bank v. Federal Deposit Ins. Corp., 53 
F.3d 1395, 1405-07 (4th Cir. 1995). Moreover, in Doolin, the Fourth 
Circuit recognized that, although most Federal agencies have some form 
of institutional bias, this does not make them incapable of 
disinterested adjudication of disputes. 53 F.3d at 1407.
    We do not believe the regulation raises issues of impartiality. 
First, the Director of the United States Mint has no personal or 
official economic interest in the results of any enforcement action 
under this regulation. Pursuant to the United States Mint Public 
Enterprise Fund (PEF) statute, 31 U.S.C. 5136, all receipts from fines 
assessed under the regulation would be deposited in the PEF and the 
Secretary of the Treasury would transfer these amounts, along with 
regular United States Mint seigniorage and profits, to the General Fund 
as miscellaneous receipts. As miscellaneous receipts in the Treasury--
the drawing of funds from which are subject to appropriation by 
Congress--neither the Secretary of the Treasury, nor the Director of 
the Mint could be subject to ``possible temptation * * * when [their] 
executive responsibilities * * * may make [them] partisan to maintain 
the high level of contribution'' from the assessment process provided 
for under the regulation. Cf. Ward v. Village of Monroeville, 409 U.S. 
57, 60 (1972). Moreover, the amounts involved would nonetheless render 
any ostensible temptation inconsequential because the relatively small 
amounts that the United States Mint could be expected to receive in 
fines payable under 31 U.S.C. 333 would be de minimis when compared to 
the recent amounts ($600-800 million) that the United States Mint 
annually has transferred to the General Fund. See 2006 United States 
Mint Annual Report, at 17. Accordingly, for the reasons described 
above, as well as in paragraphs III(b)(1) and (2), the United States 
Mint has no intrinsic bias that may affect its ability to adjudicate 
matters under this regulation in a fair and objective manner.

IV. Additional Amendments

    Upon additional review and consideration of the provisions outlined 
in the interim rule, the agency has removed from the regulation 
sections 92.16(d)(3) & (4), which provide for agency counsel review. We 
also made conforming changes to section 92.17(a). The agency determined 
that these steps in the examination and assessment process are best 
addressed through internal procedures.
    We also have made minor clarifying changes throughout the final 
rule.

V. Procedural Requirements

    This final rule is not a significant regulatory action for the 
purposes of Executive Order 12866. While a proposed rule was published 
for public comment, the rule establishes agency practice and procedure, 
and prior notice and the opportunity for public comment were not 
required pursuant to 5 U.S.C. 553(b)(A) (or any other law). For this 
reason, a Regulatory Flexibility Act analysis is not required. See 5 
U.S.C. 604. Nonetheless, it is hereby certified that this rule will not 
have a significant economic impact on a substantial number of small 
entities. Any imposition of a civil penalty on a small business entity 
flows directly from the authorizing statute, 31 U.S.C. 333.

[[Page 60776]]

Paperwork Reduction Act

    The final rule does not require new ``collection of information'' 
requirements within the meaning of the Paperwork Reduction Act of 1995. 
The only information collected would be that provided voluntarily by 
persons sent Initial Notices of Assessment under the regulation.

VI. Format

    The format of the final rule is generally consistent with the 
format of the rule proposed in the NPRM.

List of Subjects in 31 CFR Part 92

    Administrative practice and procedure, Advertising, Consumer 
protection, Currency, Penalties, Seals and insignia, Signs and symbols, 
Trademarks.

Text of Rule

0
For the reasons set forth in the preamble, the United States Mint 
amends 31 CFR part 92 as follows:

PART 92--UNITED STATES MINT OPERATIONS AND PROCEDURES

0
1. The authority citation for part 92 is revised to read as follows:

    Authority: 5 U.S.C. 301, 31 U.S.C. 321 and 333.


0
2. The heading for part 92 is revised to read as set forth above.

0
3. Add a subpart heading before Sec.  92.1 to read as follows:

Subpart A--Numismatic Operations

0
4. Add a subpart heading before Sec.  92.5 to read as follows:

Subpart B--Availability of Records

0
5. Add a new Subpart C (Sec. Sec.  92.11 through 92.18) to read as 
follows:
Subpart C--Assessment of Civil Penalties for Misuse of Words, Letters, 
Symbols, or Emblems of the United States Mint
Sec.
92.11 Purpose.
92.12 Definitions.
92.13 Assessment of civil penalties.
92.14 Initiation of action.
92.15 Initial notice of assessment.
92.16 Written response.
92.17 Final action.
92.18 Judicial review.

Subpart C--Assessment of Civil Penalties for Misuse of Words, 
Letters, Symbols, or Emblems of the United States Mint


Sec.  92.11  Purpose.

    (a) The procedures in this subpart implement the provisions of 31 
U.S.C. 333(c), which authorize 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 
United States Mint in violation of 31 U.S.C. 333(a).
    (b) The procedures in this subpart do not apply to the extent that 
the Secretary of the Treasury, the Director of the United States Mint, 
or their authorized designees have specifically granted to the person 
express permission, in writing, to manufacture, produce, sell, possess, 
or use the words, titles, abbreviations, initials, symbols, emblems, 
seals, or badges in a contract, agreement, license, letter, memorandum, 
or similar document.
    (c) The procedures in this subpart are limited to actions initiated 
by the United States Mint to enforce the provisions of 31 U.S.C. 333. 
The procedures herein do not affect the provisions of 31 CFR Part 27. 
Therefore, this subpart shall not be construed as the exclusive means 
for the Secretary of the Treasury to enforce 31 U.S.C. 333 insofar as a 
covered misuse affects the United States Mint.


Sec.  92.12  Definitions.

    (a) Assessing official means the Director of the United States Mint 
or his designee.
    (b) Examining official means an employee of the United States Mint 
appointed by the Director of the United States Mint (or an employee of 
the Treasury Department appointed by the Director of the United States 
Mint with the concurrence of the head of that employee's organization), 
to administer the procedures in this subpart in a particular case and 
to propose findings and recommendations in that case to the assessing 
official. The examining official must be:
    (1) An employee of the Treasury Department in the grade of GS-15 or 
higher; and
    (2) Capable of examining the matter without actual or apparent 
conflict of interest.
    (c) Broadcast or telecast means widespread dissemination by 
electronic transmission or method, whether audio and/or visual.
    (d) Civil penalty means a civil monetary penalty
    (e) 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 United States Mint or its 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 31 U.S.C. 333 or the procedures in this 
subpart last occurred.
    (f) Days means calendar days, unless otherwise stated.
    (g) Person means an individual, partnership, association, 
corporation, company, business, firm, manufacturer, or any other 
organization, entity, or institution.
    (h) Respondent means a person named in an Initial Notice of 
Assessment.
    (i) Symbol means any design or graphic used by the United States 
Mint or the Treasury Department to represent themselves or their 
products. A design or graphic may include
    (1) A trademark, designation of origin, or mark of identification, 
or
    (2) A stylized depiction comprising letters, words, or numbers.


Sec.  92.13  Assessment of civil penalties.

    (a) General rule. The assessing official may impose a civil penalty 
on any person when the following two conditions are met:
    (1) That person 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 
Mint,'' or ``U.S. Mint'';
    (ii) The titles ``Secretary of the Treasury,'' ``Treasurer of the 
United States,'' ``Director of the United States Mint,'' or ``Director 
of the U.S. Mint'';
    (iii) The abbreviations or initials of any entity or title referred 
to in paragraph (a)(1)(i) or (a)(1)(ii) of this section;
    (iv) 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
    (v) Any colorable imitation of any such words, titles, 
abbreviations, initials, symbols, emblems, seals, or badges; and
    (2) That person's 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, authorized by, or associated with 
the United States Mint, 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

[[Page 60777]]

with the United States Government or any particular agency or 
instrumentality thereof.
    (c) Civil penalty. The 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 penalty shall not exceed $5,000 for 
each and every use of any material in violation of paragraph (a) of 
this section, 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 the 
procedures in this subpart must be assessed before the end of the 
three-year period beginning on the date of offense.
    (2) The 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.  92.17 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 the 
procedures in this subpart 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.  92.14  Initiation of action.

    (a) When an employee of the United States Mint learns of or 
discovers a potential violation of 31 U.S.C. 333 or this subpart, he or 
she will refer the matter, with all available evidence, to the 
assessing official.
    (b) The assessing official will consider relevant factors when 
determining whether to initiate an action to impose a civil penalty 
under the procedures in this subpart. Those factors may include, but 
are not limited to, the following:
    (1) The scope of the misuse;
    (2) The purpose and/or nature of the misuse;
    (3) The extent of the harm caused by the misuse;
    (4) The circumstances of the misuse;
    (5) The commercial benefit intended to be derived from the misuse; 
and
    (6) The repeated nature of the misuse.
    (c) If the assessing official decides to initiate an action to 
impose a civil penalty under the procedures in this subpart, he or she 
will, in writing:
    (1) Appoint an examining official; and
    (2) Delegate to the examining official the authority to prepare, 
sign, and serve an Initial Notice of Assessment on behalf of the 
assessing official.


Sec.  92.15  Initial notice of assessment.

    The examining official shall review all immediately available 
evidence on the matter; determine a proposed civil penalty based on the 
factors listed under Sec.  92.16(d)(2)(iii); and prepare and serve an 
Initial Notice of Assessment by United States mail or other means upon 
the person believed to be in violation of Sec.  92.13 and otherwise 
subject to a civil penalty. The notice shall provide the name and 
telephone number of the examining official, who can provide information 
concerning the notice and the procedures in this subpart. The notice 
shall include the following:
    (a) A specific reference to the provisions of Sec.  92.13 violated;
    (b) A concise statement of the facts that support the conclusion 
that such a violation occurred;
    (c) The amount of the civil penalty proposed and the maximum amount 
of the potential civil penalty that the assessing official could 
impose;
    (d) A notice informing the person alleged to be in violation of 
Sec.  92.13 that he or she:
    (1) May, within 30 days of the date of the notice, pay the proposed 
civil penalty, thereby waiving the right to make a written response 
under Sec.  92.16 and to seek judicial review under Sec.  92.18:
    (i) By electronic funds transfer (EFT) in accordance with 
instructions provided by the examining official in the Initial Notice 
of Assessment; or
    (ii) By means other than EFT only with the written approval of the 
assessing official;
    (2) May make a written response in accordance with Sec.  92.16 
within 30 days of the date of the notice addressing, as appropriate:
    (i) Why a civil penalty should not be imposed; and
    (ii) Why a civil penalty should be in a lesser amount than 
proposed.
    (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 examining 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 that 
the United States Mint compiled and relied on 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 protected by such privileges; however, 
any documents or other evidence withheld from disclosure shall be 
expunged from the record and shall not be considered by the examining 
and assessing officials in arriving at their respective recommendations 
and decisions); and
    (e) An advisement of the following:
    (1) If no written response is received within the time allowed in 
Sec.  92.16(b), a Final Notice of Assessment may be issued without a 
presentation by the person;
    (2) If a written response has been made and the examining official 
deems it necessary, the examining 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.  92.17 requiring that the proposed civil penalty be paid;
    (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.  92.16  Written response.

    (a) Form and contents. (1) The written response submitted by a 
person pursuant to Sec.  92.15(d)(2) must provide the following:
    (i) A reference to and specific identification of the Initial 
Notice of Assessment involved;
    (ii) The full name of the person against whom the Initial Notice of 
Assessment has been made;
    (iii) If the respondent is not a natural person, the name and title 
of the officer authorized to act on behalf of the respondent; and
    (iv) If a representative of the person named in the Initial Notice 
of Assessment 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.  
92.13 set forth in the Initial Notice of Assessment. Any violation not 
specifically denied will be presumed to be admitted. Where a violation 
is denied, the respondent shall specifically set forth the legal or 
factual basis upon which the allegation is denied. If the basis of the 
written response is that the respondent is not the person responsible 
for the alleged violation, the written response must set forth 
sufficient information to allow the examining and assessing officials 
to determine the truth of such an assertion. The written response 
should include any and all documents and other information that the 
respondent believes

[[Page 60778]]

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 section must be submitted 
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.  92.15(d)(4), the written response must be submitted not later 
than 20 days after the date of the United States Mint'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 is issued. 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 business day 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 examining official may extend the period for making a 
written response under paragraphs (b)(1) and (b)(2) of this section for 
up to ten days for good cause shown. Requests for extensions beyond ten 
days must be approved by the assessing official and must be based on 
good cause shown. Generally, failure to obtain representation in a 
timely manner will not be considered good cause.
    (c) Filing. The response may be sent by personal delivery, United 
States mail or commercial delivery. A written response transmitted by 
means other than United States mail will be considered filed on the 
date received at the address specified in the Initial Notice of 
Assessment.
    (d) Review and Recommendation. The examining official will fully 
consider the facts and arguments submitted by the respondent in the 
written response, any other documents filed by the respondent pursuant 
to this subpart, and the evidence in the United States Mint's record on 
the matter. If the respondent waives the right to submit a written 
response in accordance with Sec.  92.15(d)(1), or declines to submit a 
written response by the end of the 30-day response period, the 
examining official will fully consider the evidence in the United 
States Mint's record on the matter.
    (1) In fully considering the matter, the examining official will 
not consider any evidence introduced into the record by the United 
States Mint after the date of the Initial Notice of Assessment unless 
and until the respondent has been notified that such additional 
evidence will be considered, and has had an opportunity to request, 
review and comment on such evidence.
    (2) The examining official will prepare a concise report, addressed 
to the assessing official, which will contain the following:
    (i) The entire 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.  
92.15(e)(2), as well as all evidence upon which the Initial Notice of 
Assessment was based, and any additional evidence as provided for in 
Sec.  92.16(d)(1).
    (ii) A finding, based on the preponderance of the evidence, as to 
each alleged violation specified in the Initial Notice of Assessment;
    (iii) For each violation that the examining official determines to 
have occurred, a recommendation as to the appropriate amount of a civil 
penalty to be imposed which, upon additional consideration of the 
evidence, may be the same as, more than, or less than the amount 
initially proposed by the examining official pursuant to Sec.  92.15. 
In making this recommendation, the examining official will consider all 
relevant factors including, but 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;
    (E) The commercial benefit intended to be derived from the misuse; 
and
    (F) The repeated nature of the misuse.
    (iv) If the examining official determines that a violation has 
occurred, a proposed Final Notice of Assessment that incorporates his 
or her findings and recommendations.
    (v) Any additional information or considerations that the assessing 
officer should consider in a decision whether to issue a Final Notice 
of Assessment under Sec.  92.17.


Sec.  92.17  Final action.

    (a) In making a final determination whether to impose a penalty, 
the assessing official shall take into consideration the entire report 
prepared by the examining official. Although the assessing official 
should accord appropriate weight to the findings and recommendations of 
the examining official, the assessing official is not bound by them. 
The assessing official may approve, disapprove, modify, or substitute 
any or all of the examining official's findings and recommendations if, 
in his or her judgment, the evidence in the record supports such a 
decision. The assessing official will determine whether:
    (1) The facts warrant a conclusion that no violation has occurred; 
or
    (2)(i) The facts warrant a conclusion that one or more violations 
have occurred; and
    (ii) 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) If the assessing official determines that a violation has 
occurred:
    (1) 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 or her discretion:
    (i) Impose a civil penalty;
    (ii) Not impose a civil penalty; or
    (iii) Impose a civil penalty and suspend the payment of all or some 
of the civil penalty, conditioned on the violator's future compliance 
with 31 U.S.C. 333.
    (3) If a civil penalty is imposed under Sec.  92.17(c)(2)(i) or 
(iii), the assessing official shall determine the appropriate amount of 
the penalty in accordance with 31 U.S.C. 333(c)(2). In determining the 
amount of a civil penalty, the assessing official will consider 
relevant factors including, but not limited to, the following:
    (i) The scope of the misuse;
    (ii) The purpose and/or nature of the misuse;
    (iii) The extent of the harm caused by the misuse;
    (iv) The circumstances of the misuse;
    (v) The commercial benefit intended to be derived from the misuse; 
and
    (vi) The repeated nature of the misuse.
    (4) The Final Notice of Assessment shall:
    (i) Include the following:
    (A) A specific reference to each provision of Sec.  92.13 found to 
have been violated;
    (B) A concise statement of the facts supporting a conclusion that 
each violation has occurred;
    (C) An analysis of how the facts and each violation justifies the 
conclusion that a civil penalty should be imposed; and
    (D) The amount of each civil penalty imposed and a statement as to 
how the

[[Page 60779]]

amount of each penalty was determined; and
    (ii) Inform the person of the following:
    (A) Payment of a civil penalty imposed by the Final Notice of 
Assessment must be made within 30 days of the date of the notice;
    (B) Payment of a civil penalty imposed by the Final Notice of 
Assessment shall be paid 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) If payment of a civil penalty imposed by the Final Notice of 
Assessment has been suspended on the condition that the person comply 
in the future with 31 U.S.C. 333 and this subpart, the failure by the 
person to so comply will make the civil penalty payable on demand;
    (D) If a civil 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 section), 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
    (E) Any civil penalty imposed by the Final Notice of Assessment may 
be subject to judicial review in accordance with 5 U.S.C. 701 et seq.


Sec.  92.18  Judicial review.

    A Final Notice of Assessment issued under the procedures in this 
subpart may be subject to judicial review pursuant to 5 U.S.C. 701 et 
seq.

    Dated: October 22, 2007.
Edmund C. Moy,
Director, United States Mint.
[FR Doc. E7-21132 Filed 10-25-07; 8:45 am]
BILLING CODE 4810-02-P