[Federal Register Volume 72, Number 218 (Tuesday, November 13, 2007)]
[Rules and Regulations]
[Pages 63783-63785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-22056]



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  Federal Register / Vol. 72, No. 218 / Tuesday, November 13, 2007 / 
Rules and Regulations  

[[Page 63783]]



OFFICE OF MANAGEMENT AND BUDGET

2 CFR Part 175


Trafficking in Persons: Grants and Cooperative Agreements

AGENCY: Office of Federal Financial Management, Office of Management 
and Budget.

ACTION: Interim final guidance.

-----------------------------------------------------------------------

SUMMARY: The Office of Federal Financial Management (OFFM) is 
establishing a government-wide award term for agencies to include in 
grants and cooperative agreements as part of their implementation of 
paragraph (g) of section 106 of the Trafficking Victims Protection Act 
of 2000, as amended (22 U.S.C. 7104). In each award under which funding 
is provided to a private entity, the statute requires the awarding 
agency to include a condition authorizing termination of the award if 
the recipient or a subrecipient engages in certain activities related 
to trafficking in persons.

DATES: The effective date for this interim final guidance is December 
13, 2007. To be considered in preparation of the final guidance, 
comments on the interim final guidance must be received by January 14, 
2008.

ADDRESSES: Due to potential delays in OMB's receipt and processing of 
mail sent through the U.S. Postal Service, we encourage respondents to 
submit comments electronically to ensure timely receipt. We cannot 
guarantee that comments mailed will be received before the comment 
closing date. Electronic mail comments may be submitted to: 
[email protected]. Please include ``OMB Trafficking in Persons 
guidance'' in the subject line of your e-mail message. Also, please 
include the full body of your comments in the text of the electronic 
message, as well as in an attachment. Please include your name, title, 
organization, postal address, telephone number, and e-mail address in 
the text of the message. Comments may also be submitted via facsimile 
to (202) 395-3952 or by mail at 725 17th St., NW., Room 6025, 
Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Marguerite Pridgen, Office of Federal 
Financial Management, Office of Management and Budget, telephone (202) 
395-7844 (direct) or (202) 395-3993 (main office) and e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    In the Trafficking Victims Protection Reauthorization Act of 2003 
(Pub. L. 108-193, Sec.  3), Congress amended the Trafficking Victims 
Protection Act of 2000 (TVPA; Pub. L. No. 106-386, Div. A). One of the 
amendments was the addition of a new paragraph (g) to section 106 of 
the TVPA (Section 106 is codified at 22 U.S.C. 7104). Paragraph (g) 
provides that:

    ``Any grant, contract, or cooperative agreement provided or 
entered into by a Federal department or agency under which funds are 
to be provided to a private entity, in whole or in part, shall 
include a condition that authorizes the department or agency to 
terminate the grant, contract, or cooperative agreement, without 
penalty, if the grantee or any subgrantee, or the contractor or any 
subcontractor (i) engages in severe forms of trafficking in persons 
or has procured a commercial sex act during the period of time that 
the grant, contract, or cooperative agreement is in effect, or (ii) 
uses forced labor in the performance of the grant, contract, or 
cooperative agreement.''

As originally added in 2003, subsection (g) applied to ``funds made 
available to carry out any program, project, or activity abroad funded 
under major functional budget category 150 (relating to international 
affairs).'' Following the enactment of the 2003 Act, the President 
issued Executive Order (EO) No. 13333 (69 FR 13455; March 23, 2004), 
which implemented this new subsection 106(g) by amending EO No. 13257. 
One of the amendments to EO 13257 was the addition of a new Section 5 
(``Enhanced Prevention of Trafficking in Persons''), which provides in 
part that ``[e]ach affected executive branch department or agency shall 
implement, within that department or agency, the requirements set out 
in section 106(g) of the Act with respect to grants and cooperative 
agreements.''

    Section 106(g) was subsequently amended in the Trafficking Victims 
Protection Reauthorization Act of 2005 (Pub. L. No. 109-164). Section 
201(b) of this Act repealed the language that had previously stated 
that subsection (g) applied with respect to ``category 150'' funding. 
As a result, section 106(g) now applies to all Federal grants and 
cooperative agreements under which funds would be provided to private 
entities.
    In implementing Section 106(g), as amended, it is important to 
ensure effective government-wide implementation of this national 
policy. To that end, we are issuing, on an interim final basis, a 
Government-wide standard award term (and related guidance) on 
trafficking in persons for agencies to include in their grants and 
cooperative agreements. This award term was developed by an interagency 
workgroup under the Grants Policy Committee of the Chief Financial 
Officers Council.

II. Next Steps

    We will consider all comments received on the interim final version 
of the OMB guidance as we develop the final guidance. Federal agencies 
that award grants or cooperative agreements will implement the guidance 
through appropriate regulations and award terms.

List of Subjects in 2 CFR Part 175

    Administrative practice and procedure, Colleges and universities, 
Cooperative agreements, Grant programs, Grants administration, 
Hospitals, Indians--tribal government, Industry, Nonprofit 
organizations, State and local governments, Trafficking in persons.

Danny Werfel,
Acting Controller.

0
For the reasons set forth above, the Office of Management and Budget 
amends 2 CFR chapter I by adding a part 175 to read as follows:

PART 175--AWARD TERM FOR TRAFFICKING IN PERSONS

Sec.
175.5 Purpose of this part.
175.10 Statutory requirement.
175.15 Award term.

[[Page 63784]]

175.20 Referral.
175.25 Definitions.

    Authority: 22 U.S.C. 7104(g); 31 U.S.C. 503; 31 U.S.C. 1111; 41 
U.S.C. 405; Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR 
10737, 3 CFR, 1966-1970, p. 939.


Sec.  175.5  Purpose of this part.

    This part establishes a Governmentwide award term for grants and 
cooperative agreements to implement the requirement in paragraph (g) of 
section 106 of the Trafficking Victims Protection Act of 2000 (TVPA), 
as amended (22 U.S.C. 7104(g)).


Sec.  175.10  Statutory requirement.

    In each agency award (i.e., grant or cooperative agreement) under 
which funding is provided to a private entity, section 106(g) of the 
TVPA, as amended, requires the agency to include a condition that 
authorizes the agency to terminate the award, without penalty, if the 
recipient or a subrecipient--
    (a) Engages in severe forms of trafficking in persons during the 
period of time that the award is in effect;
    (b) Procures a commercial sex act during the period of time that 
the award is in effect; or
    (c) Uses forced labor in the performance of the award or subawards 
under the award.


Sec.  175.15  Award term.

    (a) To implement the trafficking in persons requirement in section 
106(g) of the TVPA, as amended, a Federal awarding agency must include 
the award term in paragraph (b) of this section in--
    (1) A grant or cooperative agreement to a private entity, as 
defined in Sec.  175.25(d); and
    (2) A grant or cooperative agreement to a State, local government, 
Indian tribe or foreign public entity, if funding could be provided 
under the award to a private entity as a subrecipient.
    (b) The award term that an agency must include, as described in 
paragraph (a) of this section, is:

    I. Trafficking in persons.
    a. Provisions applicable to a recipient that is a private 
entity.
    1. You as the recipient, your employees, subrecipients under 
this award, and subrecipients' employees may not--
    i. Engage in severe forms of trafficking in persons during the 
period of time that the award is in effect;
    ii. Procure a commercial sex act during the period of time that 
the award is in effect; or
    iii. Use forced labor in the performance of the award or 
subawards under the award.
    2. We as the Federal awarding agency may unilaterally terminate 
this award, without penalty, if you or a subrecipient that is a 
private entity --
    i. Is determined to have violated a prohibition in paragraph a.1 
of this award term; or
    ii. Has an employee who is determined by the agency official 
authorized to terminate the award to have violated a prohibition in 
paragraph a.1 of this award term through conduct that is either--
    A. Associated with performance under this award; or
    B. Imputed to you or the subrecipient using the standards and 
due process for imputing the conduct of an individual to an 
organization that are provided in 2 CFR part 180, ``OMB Guidelines 
to Agencies on Governmentwide Debarment and Suspension 
(Nonprocurement),'' as implemented by our agency at [agency must 
insert reference here to its regulatory implementation of the OMB 
guidelines in 2 CFR part 180 (e.g., ``2 CFR part XX'')].
    b. Provision applicable to a recipient other than a private 
entity. We as the Federal awarding agency may unilaterally terminate 
this award, without penalty, if a subrecipient that is a private 
entity--
    1. Is determined to have violated an applicable prohibition in 
paragraph a.1 of this award term; or
    2. Has an employee who is determined by the agency official 
authorized to terminate the award to have violated an applicable 
prohibition in paragraph a.1 of this award term through conduct that 
is either--
    i. Associated with performance under this award; or
    ii. Imputed to the subrecipient using the standards and due 
process for imputing the conduct of an individual to an organization 
that are provided in 2 CFR part 180, ``OMB Guidelines to Agencies on 
Governmentwide Debarment and Suspension (Nonprocurement),'' as 
implemented by our agency at [agency must insert reference here to 
its regulatory implementation of the OMB guidelines in 2 CFR part 
180 (e.g., ``2 CFR part XX'')].
    c. Provisions applicable to any recipient.
    1. You must inform us immediately of any information you receive 
from any source alleging a violation of a prohibition in paragraph 
a.1 of this award term.
    2. Our right to terminate unilaterally that is described in 
paragraph a.2 or b of this section:
    i. Implements section 106(g) of the Trafficking Victims 
Protection Act of 2000 (TVPA), as amended (22 U.S.C. 7104(g)), and
    ii. Is in addition to all other remedies for noncompliance that 
are available to us under this award.
    3. You must include the requirements of paragraph a.1 of this 
award term in any subaward you make to a private entity.
    d. Definitions. For purposes of this award term:
    1. ``Employee'' means either:
    i. An individual employed by you or a subrecipient who is 
engaged in the performance of the project or program under this 
award; or
    ii. Another person engaged in the performance of the project or 
program under this award and not compensated by you including, but 
not limited to, a volunteer or individual whose services are 
contributed by a third party as an in-kind contribution toward cost 
sharing or matching requirements.
    2. ``Forced labor'' means labor obtained by any of the following 
methods: the recruitment, harboring, transportation, provision, or 
obtaining of a person for labor or services, through the use of 
force, fraud, or coercion for the purpose of subjection to 
involuntary servitude, peonage, debt bondage, or slavery.
    3. ``Private entity'':
    i. Means any entity other than a State, local government, Indian 
tribe, or foreign public entity, as those terms are defined in 2 CFR 
175.25.
    ii. Includes:
    A. A nonprofit organization, including any nonprofit institution 
of higher education, hospital, or tribal organization other than one 
included in the definition of Indian tribe at 2 CFR 175.25(b).
    B. A for-profit organization.
    4. ``Severe forms of trafficking in persons,'' ``commercial sex 
act,'' and ``coercion'' have the meanings given at section 103 of 
the TVPA, as amended (22 U.S.C. 7102).

    (c) An agency may use different letters and numbers to designate 
the paragraphs of the award term in paragraph (b) of this section, if 
necessary, to conform the system of paragraph designations with the one 
used in other terms and conditions in the agency's awards.


Sec.  175.20  Referral.

    An agency official should inform the agency's suspending or 
debarring official if he or she terminates an award based on a 
violation of a prohibition contained in the award term under Sec.  
175.15.


Sec.  175.25  Definitions.

    Terms used in this part are defined as follows:
    (a) Foreign public entity means:
    (1) A foreign government or foreign governmental entity;
    (2) A public international organization, which is an organization 
entitled to enjoy privileges, exemptions, and immunities as an 
international organization under the International Organizations 
Immunities Act (22 U.S.C. 288-288f);
    (3) An entity owned (in whole or in part) or controlled by a 
foreign government; and
    (4) Any other entity consisting wholly or partially of one or more 
foreign governments or foreign governmental entities.
    (b) Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaskan Native village or 
regional or village corporation (as defined in, or established under, 
the Alaskan Native

[[Page 63785]]

Claims Settlement Act (43 U.S.C. 1601, et seq.)) that is recognized by 
the United States as eligible for the special programs and services 
provided by the United States to Indians because of their status as 
Indians.
    (c) Local government means a:
    (1) County;
    (2) Borough;
    (3) Municipality;
    (4) City;
    (5) Town;
    (6) Township;
    (7) Parish;
    (8) Local public authority, including any public housing agency 
under the United States Housing Act of 1937;
    (9) Special district;
    (10) School district;
    (11) Intrastate district;
    (12) Council of governments, whether or not incorporated as a 
nonprofit corporation under State law; and
    (13) Any other instrumentality of a local government.
    (d) Private entity.
    (1) This term means any entity other than a State, local 
government, Indian tribe, or foreign public entity.
    (2) This term includes:
    (i) A nonprofit organization, including any nonprofit institution 
of higher education, hospital, or tribal organization other than one 
included in the definition of Indian tribe in paragraph (b) of this 
section.
    (ii) A for-profit organization.
    (e) State, consistent with the definition in section 103 of the 
TVPA, as amended (22 U.S.C. 7102), means:
    (1) Any State of the United States;
    (2) The District of Columbia;
    (3) Any agency or instrumentality of a State other than a local 
government or State-controlled institution of higher education;
    (4) The Commonwealths of Puerto Rico and the Northern Mariana 
Islands; and
    (5) The United States Virgin Islands, Guam, American Samoa, and a 
territory or possession of the United States.

[FR Doc. E7-22056 Filed 11-9-07; 8:45 am]
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