[Federal Register Volume 84, Number 196 (Wednesday, October 9, 2019)]
[Rules and Regulations]
[Pages 54037-54040]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21640]
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FEDERAL MARITIME COMMISSION
46 CFR Parts 501 and 502
[Docket No. 19-07]
RIN 3072-AC78
Delegations to Bureau of Enforcement and Enforcement Procedures
AGENCY: Federal Maritime Commission.
ACTION: Direct final rule; request for comments.
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SUMMARY: The Federal Maritime Commission (Commission) is revising its
delegations to the Bureau of Enforcement and its procedures for
initiating enforcement action in order to facilitate Commission
oversight.
DATES: The rule is effective without further action on December 23,
2019, unless significant adverse comments are filed prior to November
8, 2019. If significant adverse comments are received, the Commission
will publish a timely withdrawal of the rule in the Federal Register no
later than November 25, 2019.
ADDRESSES: You may submit comments, identified by Docket No. 19-07, by
the following methods:
Email: [email protected]. For comments, include in the
subject line: ``Docket No. 19-07, Comments on Delegations to Bureau of
Enforcement and Enforcement Procedures.'' Comments should be attached
to the email as a Microsoft Word or text-searchable PDF document. Only
non-confidential and public versions of confidential comments should be
submitted by email.
Mail: Rachel E. Dickon, Secretary, Federal Maritime
Commission, 800 North Capitol Street NW, Washington, DC 20573-0001.
Instructions: For detailed instructions on submitting comments,
including requesting confidential treatment of comments, and additional
information on the rulemaking process, see the Public Participation
heading of the Supplementary Information section of this document. Note
that all comments received will be posted without change to the
Commission's website, unless the commenter has requested confidential
treatment.
Docket: For access to the docket to read background documents or
comments received, go to the Commission's Electronic Reading Room at:
https://www2.fmc.gov/readingroom/proceeding/19-07/, or to the Docket
Activity Library at 800 North Capitol Street NW, Washington, DC 20573,
between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal
holidays. Telephone: (202) 523-5725.
FOR FURTHER INFORMATION CONTACT: Rachel E. Dickon, Secretary; Phone:
(202) 523-5725; Email: [email protected].
SUPPLEMENTARY INFORMATION:
I. Introduction
The Commission's Bureau of Enforcement (BOE) is responsible for
investigating potential violations of the Shipping Act of 1984 and
Commission regulations, and initiating enforcement actions. Such
actions include formal Commission proceedings and informal compromises
of civil penalties. While Commission approval is necessary to initiate
formal Commission proceedings, BOE currently has broad delegated
authority with respect to informal enforcement action. Specifically,
BOE has the authority, with the approval of the Commission's Managing
Director, to send out Notice and Demand Letters (NDLs) describing
alleged violations and demanding civil penalties, and to enter
[[Page 54038]]
into agreements with the respondents compromising the penalties
(compromise agreements).
These activities may currently be conducted without input from or
approval by the Commission, thereby denying the Commissioners--the
policy officers for the Commission--the opportunity to provide ongoing
oversight and guidance to BOE enforcement priorities or to approve
final settlement agreements. In order to improve such oversight, the
Commission is revising the delegations to BOE and the regulations
governing formal enforcement action and informal compromise procedures.
These revised procedures include a single pre-enforcement process
that will: (1) Provide notice to the subjects of investigations that
BOE intends to recommend that the Commission initiate enforcement
proceedings and allow them an opportunity to respond before BOE submits
those recommendations; (2) require Commission approval before formal or
informal enforcement action is undertaken; and (3) require Commission
approval of any proposed compromise agreements.
II. Background
The Commission regulations currently provide for two types of
enforcement actions seeking civil penalties, formal enforcement action
under 46 CFR 502.63 and informal compromise procedures under 46 CFR
502.604. Both types of actions begin with a BOE investigation of
potential violations.
BOE does not have delegated authority to initiate formal
enforcement action under Sec. 502.63; when BOE determines that such
action is warranted, BOE recommends to the Commission that it issue an
Order of Investigation and Hearing initiating an adjudicatory
investigation before a Commission Administrative Law Judge. The
Commission then votes on the recommendation. There is no current
requirement, however, that BOE notify the subject of the investigation
or allow them to submit their written views on the investigation prior
to BOE making a recommendation to the Commission.
BOE does, however, have delegated authority under Sec. Sec.
501.5(i)(2), 501.28, and 502.604(g) to initiate informal compromise
procedures under Sec. 502.604, subject to the prior approval of the
Commission's Managing Director. Those procedures begin with the
issuance of an NDL to the person believed to have committed one or more
violations. See Sec. 502.604(b). The NDL describes: (1) The specific
violation(s) on which the claim is based, including the particular
facts, dates, and other elements necessary for the respondent to
identify the specific conduct constituting the alleged violation; (2)
the amount of the penalty demanded; (3) the availability of alternative
dispute resolution; and (4) the names of Commission personnel with whom
the demand may be discussed, if the person desires to compromise the
penalty. Id. The NDL also states the deadlines for the institution and
completion of compromise negotiations and the consequences of failure
to compromise. Id.
Any person receiving an NDL may, within the time period specified
in the NDL, deny the violation or submit matters explaining, mitigating
or showing extenuating circumstances, and may also make voluntary
disclosures of information and documents. Sec. 502.604(c). Civil
penalties demanded by an NDL may be compromised based on specific
criteria, and the person receiving the NDL may enter into a compromise
agreement with the Commission that includes certain specified terms.
Sec. 502.604(d)-(e). BOE currently has delegated authority to
negotiate the terms of compromise agreements, but both the BOE Director
and the Managing Director must approve and sign the compromise
agreement for it to be effective. Sec. 502.604(g).
III. Regulatory Changes
As described briefly above, the Commission is amending its
delegations of authority and enforcement procedures in order to
increase Commission oversight over the institution of enforcement
proceedings and to allow the subjects of investigations an opportunity
to respond to BOE's allegations prior to a recommendation for
enforcement action being submitted to the Commission. This process is
based on the Wells Process used by the Securities and Exchange
Commission's (SEC) Division of Enforcement. See SEC, Division of
Enforcement, Enforcement Manual section 2.4 (Nov. 28, 2017).\1\
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\1\ Available at https://www.sec.gov/divisions/enforce/enforcementmanual.pdf.
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A. Delegation of Authority to BOE
Similar to the current process for formal Commission enforcement
action, the Commission is revising its delegations of authority in
Sec. Sec. 501.5(i), 501.28, and 502.604 to require Commission approval
to initiate informal compromise procedures and Commission approval of
any compromise agreement before it becomes effective.
B. Pre-Enforcement Process
The Commission is adding a new paragraph to Sec. 502.63 to reflect
a new pre-enforcement process that includes notice to the subject of an
investigation that BOE is planning to recommend that the Commission
initiate enforcement action, and an opportunity for the subject of the
investigation to submit a written statement to BOE that will be
included in BOE's recommendation to the Commission. The regulatory
changes are intended to provide a basic framework for the new process;
the Commission may issue additional guidance or internal enforcement
policies to facilitate implementation.
Because the new process includes notice and an opportunity to
respond, the Commission is eliminating the NDL and response provisions
in Sec. 502.604(b) and (c) as duplicative. The Commission is making
other conforming amendments to Sec. Sec. 502.603 and 502.604 to
reflect the changes in Sec. 502.63.
IV. Public Participation
How do I prepare and submit comments?
Your comments must be written and in English. To ensure that your
comments are correctly filed in the docket, please include the docket
number of this document in your comments.
You may submit your comments via email to the email address listed
above under ADDRESSES. Please include the docket number associated with
this notice and the subject matter in the subject line of the email.
Comments should be attached to the email as a Microsoft Word or text-
searchable PDF document. Only non-confidential and public versions of
confidential comments should be submitted by email.
You may also submit comments by mail to the address listed above
under ADDRESSES.
How do I submit confidential business information?
The Commission will provide confidential treatment for identified
confidential information to the extent allowed by law. If your comments
contain confidential information, you must submit the following by mail
to the address listed above under ADDRESSES:
A transmittal letter requesting confidential treatment
that identifies the specific information in the comments for which
protection is sought and
[[Page 54039]]
demonstrates that the information is a trade secret or other
confidential research, development, or commercial information.
A confidential copy of your comments, consisting of the
complete filing with a cover page marked ``Confidential-Restricted,''
and the confidential material clearly marked on each page. You should
submit the confidential copy to the Commission by mail.
A public version of your comments with the confidential
information excluded. The public version must state ``Public Version--
confidential materials excluded'' on the cover page and on each
affected page, and must clearly indicate any information withheld. You
may submit the public version to the Commission by email or mail.
Will the Commission consider late comments?
The Commission will consider all comments received before the close
of business on the comment closing date indicated above under DATES.
Because this is a direct final rule that will go into effect as
specified in the DATES section in the absence of significant adverse
comment received during the comment period, the Commission will not
consider any comments filed after the comment closing date.
How can I read comments submitted by other people?
You may read the comments received by the Commission at the
Commission's Electronic Reading Room or the Docket Activity Library at
the addresses listed above under ADDRESSES.
V. Rulemaking Analyses and Notices
Direct Final Rule Justification
Under the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(A),
rules of agency organization, procedure, or practice do not require
notice and comment. This direct final rule relates to the Commission's
organization, procedures, and practices; it revises internal Commission
delegations of authority to BOE and the regulations governing
enforcement procedures.
This rule will therefore become effective on the date listed in the
DATES section, unless the Commission receives significant adverse
comments within the specified period. The Commission recognizes that
parties may have information that could impact the Commission's views
and intentions with respect to the revised regulations, and the
Commission intends to consider any comments filed. Filed comments that
are not adverse may be considered for modifications to the Commission's
regulations at a future date. If no significant adverse comments are
received, the rule will become effective without additional action by
the Commission. If significant adverse comments are received, the
Commission will withdraw the rule by the date specified in the DATES
section.
Congressional Review Act
The direct final rule is not a ``rule'' as defined by the
Congressional Review Act (CRA), codified at 5 U.S.C. 801 et seq., and
is not subject to the provisions of the CRA. The CRA adopts the
Administrative Procedure Act's definition of a ``rule'' in 5 U.S.C.
551, subject to certain exclusions. See 5 U.S.C. 804(3). In particular,
the CRA does not apply to rules relating to agency management and
personnel and rules of agency organization, procedure, and practice
that do not substantially affect the rights or obligations of non-
agency parties. Id. This direct final rule relates to agency management
and personnel as well as agency organization, procedures, and
practices. Specifically, the direct final rule revises internal
Commission delegations of authority to BOE and the regulations
governing enforcement procedures. The only effect the changes have with
respect to non-agency parties is to provide parties with notice of
alleged violations and an opportunity to respond prior to the
initiation of enforcement action by the Commission. The Commission
already provides notice and an opportunity to respond in both formal
and informal enforcement procedures. For formal enforcement action, the
rule merely adds an additional opportunity for parties to respond prior
to the Commission decision on whether to initiate enforcement action.
For informal compromise actions, the rule merely shifts the timing of
the notice and opportunity for response so that these steps occur prior
to the Commission's decision to pursue a compromise agreement.
Accordingly, although the direct final rule may affect the timing and
manner of non-agency parties' interactions with the Commission, it does
not affect their underlying rights and obligations under the Shipping
Act and the Commission's regulations. Therefore, the direct final rule
is not a ``rule'' under the CRA and is not subject to the CRA's
requirements.
Regulatory Flexibility Act
The Regulatory Flexibility Act (codified as amended at 5 U.S.C.
601-612) provides that whenever an agency promulgates a final rule
after being required to publish a notice of proposed rulemaking under
the APA (5 U.S.C. 553), the agency must prepare and make available a
final regulatory flexibility analysis (FRFA) describing the impact of
the rule on small entities. 5 U.S.C. 604. An agency is not required to
publish an FRFA, however, for the following types of rules, which are
excluded from the APA's notice-and-comment requirement: interpretative
rules; general statements of policy; rules of agency organization,
procedure, or practice; and rules for which the agency for good cause
finds that notice and comment is impracticable, unnecessary, or
contrary to public interest. See 5 U.S.C. 553(b).
As discussed above, this direct final rule is a rule of agency
organization, procedure, or practice. Therefore, the APA does not
require publication of a notice of proposed rulemaking in this
instance, and the Commission is not required to prepare an FRFA.
National Environmental Policy Act
The Commission's regulations categorically exclude certain
rulemakings from any requirement to prepare an environmental assessment
or an environmental impact statement because they do not increase or
decrease air, water or noise pollution or the use of fossil fuels,
recyclables, or energy. 46 CFR 504.4. The direct final rule revises
internal Commission delegations of authority to BOE and the regulations
governing enforcement procedures with respect to potential Shipping Act
violations. This rulemaking thus falls within the categorical
exclusions for procedural rules pursuant to 46 CFR part 502 (Sec.
504.4(a)(4)), investigatory and adjudicatory proceedings, the purpose
of which is to ascertain past violations of the Shipping Act of 1984
(Sec. 504.4(a)(22)), and matters related to Commission personnel
(Sec. 504.4(a)(28)). Therefore, no environmental assessment or
environmental impact statement is required.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA)
requires an agency to seek and receive approval from the Office of
Management and Budget (OMB) before collecting information from the
public. 44 U.S.C. 3507. The agency must submit collections of
information in rules to OMB in conjunction with the publication of the
notice of proposed rulemaking. 5 CFR 1320.11. This direct final rule
does not contain any collections of information as defined by 44 U.S.C.
3502(3) and 5 CFR 1320.3(c).
[[Page 54040]]
Executive Order 12988 (Civil Justice Reform)
This rule meets the applicable standards in E.O. 12988 titled,
``Civil Justice Reform,'' to minimize litigation, eliminate ambiguity,
and reduce burden.
Regulation Identifier Number
The Commission assigns a regulation identifier number (RIN) to each
regulatory action listed in the Unified Agenda of Federal Regulatory
and Deregulatory Actions (Unified Agenda). The Regulatory Information
Service Center publishes the Unified Agenda in April and October of
each year. You may use the RIN contained in the heading at the
beginning of this document to find this action in the Unified Agenda,
available at http://www.reginfo.gov/public/do/eAgendaMain.
List of Subjects
46 CFR Part 501
Administrative practice and procedure, Authority delegations
(Government agencies), Organization and functions (Government
agencies).
46 CFR Part 502
Administrative practice and procedure, Claims, Equal access to
justice, Investigations, Lawyers, Maritime carriers, Penalties,
Reporting and recordkeeping requirements.
For the reasons set forth above, the Federal Maritime Commission
amends 46 CFR parts 501 and 502 as follows:
PART 501--THE FEDERAL MARITIME COMMISSION--GENERAL
0
1. The authority citation for part 501 continues to read as follows:
Authority: 5 U.S.C. 551-557, 701-706, 2903 and 6304; 31 U.S.C.
3721; 41 U.S.C. 414 and 418; 44 U.S.C. 501-520 and 3501-3520; 46
U.S.C. 301-307, 40101-41309, 42101-42109, 44101-44106; Pub. L. 89-
56, 70 Stat. 195; 5 CFR part 2638; Pub. L. 104-320, 110 Stat. 3870.
0
2. Amend Sec. 501.5 by:
0
a. Revising paragraph (i)(2);
0
b. Redesignating paragraphs (i)(4) and (5) as paragraphs (i)(3) and
(4), respectively; and
0
c. Revising newly redesignated paragraphs (i)(3) and (4).
The revisions read as follows:
Sec. 501.5 Functions of the organizational components of the Federal
Maritime Commission.
* * * * *
(i) * * *
(2) Subject to the prior approval of the Commission, negotiates the
informal compromise of civil penalties under Sec. 502.604 of this
chapter, prepares and presents compromise agreements for Commission
approval, and represents the Commission in proceedings and
circumstances as designated;
(3) Subject to consultation with and guidance of the General
Counsel, coordinates with other bureaus and offices to provide legal
advice, attorney liaison, and prosecution, as warranted, in connection
with enforcement matters; and
(4) Conducts investigations and recommends enforcement action.
* * * * *
Sec. 501.28 [Removed]
0
3. Remove Sec. 501.28
PART 502--RULES OF PRACTICE AND PROCEDURE
0
4. The authority citation for part 502 continues to read as follows:
Authority: 5 U.S.C. 504, 551, 552, 553, 556(c), 559, 561-569,
571-596; 5 U.S.C. 571-584; 18 U.S.C. 207; 28 U.S.C. 2112(a); 31
U.S.C. 9701; 46 U.S.C. 305, 40103-40104, 40304, 40306, 40501-40503,
40701-40706, 41101-41109, 41301-41309, 44101-44106; 5 CFR part 2635.
0
5. Amend Sec. 502.63 by revising paragraph (c)(4)(ii) and adding
paragraph (d) to read as follows:
Sec. 502.63 Commission enforcement action.
* * * * *
(c) * * *
(4) * * *
(ii) The Bureau of Enforcement may make a motion for decision on
default.
(d) Pre-enforcement process. (1) Prior to recommending formal
enforcement action under this section or informal compromise procedures
under Sec. 502.604, the Bureau of Enforcement will advise the person
or persons who are the subject of an investigation that:
(i) The Bureau of Enforcement has made a preliminary determination
to recommend that the Commission initiate enforcement action against
them;
(ii) Identifies the specific violations that the Bureau of
Enforcement has preliminarily determined to include in the
recommendation; and
(iii) Provides notice that the person may make a written submission
to the Bureau of Enforcement concerning the proposed recommendation,
including the deadline for the submission and any other relevant
information (e.g., how and where to send such statements).
(2) Persons notified of such investigations may submit a written
statement to the Bureau of Enforcement setting forth their interests
and positions regarding the subject matter of the investigation.
(3) The Bureau of Enforcement will consider any written statements
submitted under paragraph (d)(2) of this section when making
recommendations to the Commission and will attach such written
statements to the Bureau's recommendations. [Rule 63.]
Sec. 502.603 [Amended]
0
6. Amend Sec. [thinsp]502.603(c) by removing the citation ``Sec.
[thinsp]502.604(e)'' and adding in its place the citation ``Sec.
[thinsp]502.604''.
0
7. Amend Sec. 502.604 by:
0
a. Revising paragraph (a);
0
b. Removing paragraphs (b), (c), and (g); and
0
c. Redesignating paragraphs (d), (e), and (f) as paragraphs (b), (c),
and (d), respectively.
The revision reads as follows:
Sec. 502.604 Compromise of penalties: Relation to assessment
proceedings.
(a) Scope. Except in pending civil penalty assessment proceedings
provided for in Sec. 502.603, the Commission, when it has reason to
believe a violation has occurred, may invoke the informal compromise
procedures of this section after observing the procedures in Sec.
502.63(d).
* * * * *
By the Commission.
Rachel Dickon,
Secretary.
[FR Doc. 2019-21640 Filed 10-8-19; 8:45 am]
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