[Federal Register Volume 84, Number 197 (Thursday, October 10, 2019)]
[Rules and Regulations]
[Pages 54495-54496]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22094]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010


Financial Crimes Enforcement Network; Inflation Adjustment of 
Civil Monetary Penalties

AGENCY: Financial Crimes Enforcement Network (``FinCEN''), Treasury.

ACTION: Final rule.

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SUMMARY: FinCEN publishes this final rule to reflect inflation 
adjustments to its civil monetary penalties (``CMPs'') as mandated by 
the Federal Civil Penalties Inflation Adjustment Act of 1990, as 
amended by the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (collectively referred to herein as ``the 
Act''). This rule adjusts certain CMPs within the jurisdiction of 
FinCEN to the maximum amount required by the Act.

DATES: Effective October 10, 2019.

FOR FURTHER INFORMATION CONTACT: The FinCEN Resource Center at (800) 
767-2825 or email [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    In order to improve the effectiveness of CMPs and to maintain their 
deterrent effect, the Federal Civil Penalties Inflation Adjustment Act 
of 1990, 28 U.S.C. 2461 note (``the Inflation Adjustment Act''), as 
amended by the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (Pub. L. 114-74) (``the 2015 Act''), requires 
Federal agencies to adjust each CMP provided by law within the 
jurisdiction of the agency. The 2015 Act requires agencies to adjust 
the level of CMPs with an initial ``catch-up'' adjustment through an 
interim final rulemaking and to make subsequent annual adjustments for 
inflation, without needing to provide notice and the opportunity for 
public comment otherwise required by 5 U.S.C. 553. The 2015 Act 
provides that any increase in a CMP shall apply to CMPs that are 
assessed after the date the increase takes effect, regardless of 
whether the underlying violation predated such increase.\1\
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    \1\ However, the increased CMPs apply only with respect to 
underlying violations occurring after the date of enactment of the 
2015 Act, i.e., after November 2, 2015.
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II. Method of Calculation

    The method of calculating CMP adjustments applied in this final 
rule is required by the 2015 Act. Under the 2015 Act and the Office of 
Management and Budget (``OMB'') guidance required by the 2015 Act, 
annual inflation adjustments subsequent to the initial catch-up 
adjustment are to be based on the percent change between the Consumer 
Price Index for all Urban Consumers (``CPI-U'') for the October 
preceding the date of the adjustment and the prior year's October CPI-
U. As set forth in OMB Memorandum M-19-04 of December 14, 2018, the 
adjustment multiplier for 2019 is 1.02522. In order to complete the 
2019 annual adjustment, each current CMP is multiplied by the 2019 
adjustment multiplier. Under the 2015 Act, any increase in CMP must be 
rounded to the nearest multiple of $1.

Procedural Matters

1. Administrative Procedure Act
    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015 (Section 701(b)) requires agencies, beginning in 2017, to 
make annual adjustments for inflation to CMPs without needing to 
provide notice and the opportunity for public comment required by 5 
U.S.C. 553. Additionally, the methodology used for adjusting CMPs for 
inflation, effective 2017, is provided by statute, with no discretion 
provided to agencies regarding the substance of the adjustments for 
inflation to CMPs. FinCEN is charged only with performing ministerial 
computations to determine the dollar amount of adjustments for 
inflation to CMPs. Accordingly, prior public notice and an opportunity 
for public comment and a delayed effective date are not required for 
this rule.
2. Regulatory Flexibility Act
    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do 
not apply.
3. Executive Order 12866
    This rule is not a significant regulatory action as defined in 
section 3.f of Executive Order 12866.
4. Paperwork Reduction Act
    The provisions of the Paperwork Reduction Act of 1995, Public Law 
104-13, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR 
part 1320, do not apply to this rule because there are no new or 
revised recordkeeping or reporting requirements.

List of Subjects in 31 CFR Part 1010

    Authority delegations (Government agencies), Administrative 
practice and procedure, Banks, banking, Brokers, Currency, Foreign 
banking, Foreign currencies, Gambling, Investigations, Penalties, 
Reporting and recordkeeping requirements, Securities, Terrorism.

Authority and Issuance

    For the reasons set forth in the preamble, part 1010 of chapter X 
of title 31 of the Code of Federal Regulations is amended as follows:

PART 1010--GENERAL PROVISIONS

0
1. The authority citation for part 1010 continues to read as follows:

    Authority:  12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314, 
5316-5332; Title III, sec. 314, Pub. L. 107-56, 115 Stat. 307; sec. 
701, Pub. L. 114-74, 129 Stat. 599.


0
2. Amend Sec.  1010.821 by revising Table 1 of Sec.  1010.821 to read 
as follows:


Sec.  1010.821  Penalty adjustment and table.

* * * * *
    (b) * * *

[[Page 54496]]



                              Table 1 of Sec.   1010.821--Penalty Adjustment Table
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                                                                                                      Maximum
                                                                                                      penalty
                                                                                                    amounts or
                                                                                                     range of
                                                                                                    minimum and
                                                                                   Penalties as       maximum
             U.S. Code citation               Civil monetary penalty description   last amended       penalty
                                                                                    by statute      amounts for
                                                                                                     penalties
                                                                                                  assessed on or
                                                                                                   after October
                                                                                                     10, 2019
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12 U.S.C. 1829b(j).........................  Relating to Recordkeeping                   $10,000         $21,039
                                              Violations For Funds Transfers.
12 U.S.C. 1955.............................  Willful or Grossly Negligent                 10,000          21,039
                                              Recordkeeping Violations.
31 U.S.C. 5318(k)(3)(C)....................  Failure to Terminate Correspondent           10,000          14,231
                                              Relationship with Foreign Bank.
31 U.S.C. 5321(a)(1).......................  General Civil Penalty..............          25,000          57,317
                                             Provision for Willful Violations of        -100,000        -229,269
                                              Bank Secrecy Act Requirements.
31 U.S.C. 5321(a)(5)(B)(i).................  Foreign Financial Agency                     10,000          13,247
                                              Transaction--Non-Willful Violation
                                              of Transaction.
31 U.S.C. 5321(a)(5)(C)(i)(I)..............  Foreign Financial Agency                    100,000         132,469
                                              Transaction--Willful Violation of
                                              Transaction.
31 U.S.C. 5321(a)(6)(A)....................  Negligent Violation by Financial                500           1,146
                                              Institution or Non-Financial Trade
                                              or Business.
31 U.S.C. 5321(a)(6)(B)....................  Pattern of Negligent Activity by             50,000          89,170
                                              Financial Institution or Non-
                                              Financial Trade or Business.
31 U.S.C. 5321(a)(7).......................  Violation of Certain Due Diligence        1,000,000       1,423,088
                                              Requirements, Prohibition on
                                              Correspondent Accounts for Shell
                                              Banks, and Special Measures.
31 U.S.C. 5330(e)..........................  Civil Penalty for Failure to                  5,000           8,457
                                              Register as Money Transmitting
                                              Business.
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Jamal El-Hindi,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2019-22094 Filed 10-9-19; 8:45 am]
BILLING CODE 4810-02-P