[Federal Register Volume 86, Number 17 (Thursday, January 28, 2021)]
[Rules and Regulations]
[Pages 7348-7349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01919]


=======================================================================
-----------------------------------------------------------------------

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.

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

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. This rule adjusts certain CMPs within the jurisdiction of 
FinCEN to the maximum amount required by that act.

DATES: Effective January 28, 2021.

FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section 
at 1-800-767-2825, or electronically at [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    In order to improve the effectiveness of civil monetary penalties 
(``CMPs'') and to maintain their deterrent effect, the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended, 28 U.S.C. 2461 
note (the ``Act''), requires Federal agencies to adjust each CMP 
provided by law within the jurisdiction of the agency. The 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 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\
---------------------------------------------------------------------------

    \1\ The increased CMPs, however, apply only with respect to 
underlying violations occurring after November 2, 2015 the date of 
enactment of the most recent amendment to the Act.
---------------------------------------------------------------------------

II. Method of Calculation

    The method of calculating CMP adjustments applied in this final 
rule is required by the Act. Under the Act and the Office of Management 
and Budget (``OMB'') guidance required by the 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-21-10 of December 23, 2020, the adjustment multiplier for 
2021 is 1.01182. In order to complete the 2021 annual adjustment, each 
current CMP is multiplied by the 2021 adjustment multiplier. Under the 
Act, any increase in CMP must be rounded to the nearest multiple of 
$1.\2\
---------------------------------------------------------------------------

    \2\ FinCEN has previously described that it applied a catch-up 
adjustment for each penalty subject to the Act, based on the year 
and corresponding amount(s) for which the maximum penalty or range 
of minimum and maximum penalties was established or last adjusted, 
whichever is later. See Civil Monetary Penalty Adjustment and Table, 
81 FR 42503, 42504 (June 30, 2016). Because the year varies for 
different penalties, penalties that were originally of the same size 
when promulgated can have different values today pursuant to the 
application of the Act.
---------------------------------------------------------------------------

Procedural Matters

1. Administrative Procedure Act
    Section 4(b) of the Act 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

[[Page 7349]]

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 and 13771
    This rule is not a significant regulatory action as defined in 
section 3(f) of Executive Order 12866, and, as a result, this rule is 
not considered a regulatory action under Executive Order 13771.
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 in paragraph (b) to read as 
follows:


Sec.  1010.821   Penalty adjustment and table.

* * * * *
    (b) * * *

                              Table 1 of Sec.   1010.821--Penalty Adjustment Table
----------------------------------------------------------------------------------------------------------------
                                                                                                Maximum penalty
                                                                                               amounts or range
                                                                                                of minimum and
                                                                                                maximum penalty
                                               Civil monetary penalty      Penalties as last      amounts for
           U.S. Code citation                       description                amended by     penalties assessed
                                                                                statute           on or after
                                                                                                [INSERT DATE OF
                                                                                              PUBLICATION IN THE
                                                                                               FEDERAL REGISTER]
----------------------------------------------------------------------------------------------------------------
12 U.S.C. 1829b(j)......................  Relating to Recordkeeping                  $10,000             $21,663
                                           Violations For Funds Transfers.
12 U.S.C. 1955..........................  Willful or Grossly Negligent                10,000              21,663
                                           Recordkeeping Violations.
31 U.S.C. 5318(k)(3)(C).................  Failure to Terminate                        10,000              14,653
                                           Correspondent Relationship
                                           with Foreign Bank.
31 U.S.C. 5321(a)(1)....................  General Civil Penalty Provision     25,000-100,000      59,017-236,071
                                           for Willful Violations of Bank
                                           Secrecy Act Requirements.
31 U.S.C. 5321(a)(5)(B)(i)..............  Foreign Financial Agency                    10,000              13,640
                                           Transaction--Non-Willful
                                           Violation of Transaction.
31 U.S.C. 5321(a)(5)(C)(i)(I)...........  Foreign Financial Agency                   100,000             136,399
                                           Transaction--Willful Violation
                                           of Transaction.
31 U.S.C. 5321(a)(6)(A).................  Negligent Violation by                         500               1,180
                                           Financial Institution or Non-
                                           Financial Trade or Business.
31 U.S.C. 5321(a)(6)(B).................  Pattern of Negligent Activity               50,000              91,816
                                           by Financial Institution or
                                           Non-Financial Trade or
                                           Business.
31 U.S.C. 5321(a)(7)....................  Violation of Certain Due                 1,000,000           1,465,309
                                           Diligence Requirements,
                                           Prohibition on Correspondent
                                           Accounts for Shell Banks, and
                                           Special Measures.
31 U.S.C. 5330(e).......................  Civil Penalty for Failure to                 5,000               8,708
                                           Register as Money Transmitting
                                           Business.
----------------------------------------------------------------------------------------------------------------


Kenneth A. Blanco,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2021-01919 Filed 1-27-21; 8:45 am]
BILLING CODE 4810-02-P