[Federal Register Volume 86, Number 20 (Tuesday, February 2, 2021)]
[Rules and Regulations]
[Pages 7804-7807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00668]


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DEPARTMENT OF STATE

22 CFR Parts 35, 103, 127, and 138

[Public Notice 11298]
RIN 1400-AF16


Department of State 2021 Civil Monetary Penalties Inflationary 
Adjustment

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: This final rule is issued to adjust the civil monetary 
penalties (CMP) for regulatory provisions maintained and enforced by 
the Department of State. The revised CMP adjusts the amount of civil 
monetary penalties assessed by the Department of State based on the 
December 2020 guidance from the Office of Management and Budget. The 
new amounts will apply only to those penalties assessed on or after the 
effective date of this rule, regardless of the date on which the 
underlying facts or violations occurred.

[[Page 7805]]


DATES: This final rule is effective on February 2, 2021.

FOR FURTHER INFORMATION CONTACT: Alice Kottmyer, Attorney-Adviser, 
Office of Management, [email protected]. ATTN: Regulatory Change, 
CMP Adjustments, (202) 647-2318.

SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation 
Adjustment Act of 1990, Public Law 101-410, as amended by the Debt 
Collection Improvement Act of 1996, Public Law 104-134, required the 
head of each agency to adjust its CMPs for inflation no later than 
October 23, 1996 and required agencies to make adjustments at least 
once every four years thereafter. The Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015, Section 701 of Public Law 114-
74 (the 2015 Act) further amended the 1990 Act by requiring agencies to 
adjust CMPs, if necessary, pursuant to a ``catch-up'' adjustment 
methodology prescribed by the 2015 Act, which mandated that the catch-
up adjustment take effect no later than August 1, 2016. Additionally, 
the 2015 Act required agencies to make annual adjustments to their 
respective CMPs in accordance with guidance issued by the Office of 
Management and Budget (OMB).
    Based on these statutes, the Department of State (the Department) 
published a final rule in June 2016 \1\ to implement the ``catch-up'' 
provisions; and annual updates to its CMPs in January 2017,\2\ January 
2018,\3\ March 2019 (delayed due to the Government shutdown),\4\ and 
January 2020.\5\
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    \1\ 81 FR 36771 (Jun. 8, 2016).
    \2\ 82 FR 3168 (Jan. 11, 2017).
    \3\ 83 FR 234 (Jan. 3, 2018).
    \4\ 84 FR 9957 (Mar. 19, 2019).
    \5\ 85 FR 2020 (Jan. 14, 2020).
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    On December 29, 2020, OMB notified agencies that the annual cost-
of-living adjustment multiplier for 2021, based on the Consumer Price 
Index, is 1.01182. Additional information may be found in OMB 
Memorandum M-21-10, at: https://www.whitehouse.gov/wp-content/uploads/2020/12/M-21-10.pdf. This final rule amends Department CMPs for fiscal 
year 2021.

Overview of the Areas Affected by This Rule

    Within the Department of State (title 22, Code of Federal 
Regulations), this rule affects four areas:
    (1) Part 35, which implements the Program Fraud Civil Remedies Act 
of 1986 (PFCRA), codified at 31 U.S.C. 3801-3812;
    (2) Part 103, which implements the Chemical Weapons Convention 
Implementation Act of 1998 (CWC Act);
    (3) Part 127, which implements the penalty provisions of sections 
38(e), 39A(c), and 40(k) of the Arms Export Control Act (AECA) (22 
U.S.C. 2778(e), 2779a(c), and 2780(k)); and
    (4) Part 138, which implements Section 319 of Public Law 101-121, 
codified at 31 U.S.C. 1352, prohibits recipients of Federal contracts, 
grants, and loans from using appropriated funds for lobbying the 
executive or legislative branches of the Federal Government in 
connection with a specific contract.

Specific Changes to 22 CFR Made by This Rule

I. Part 35

    The PFCRA, enacted in 1986, authorizes agencies, with approval from 
the Department of Justice, to pursue individuals or firms for false 
claims. Applying the 2021 multiplier, the new maximum liabilities are 
as follows: $11,803 up to $348,035.

II. Part 103

    The CWC Act provided domestic implementation of the Convention on 
the Prohibition of the Development, Production, Stockpiling, and Use of 
Chemical Weapons and on Their Destruction. The penalty provisions of 
the CWC Act are codified at 22 U.S.C. 6761. Applying the 2021 
multiplier, the new maximum amounts are as follows: Prohibited acts 
related to inspections, $39,693; for Recordkeeping violations, $7,939.

III. Part 127

    The Assistant Secretary of State for Political-Military Affairs is 
responsible for the imposition of CMPs under the International Traffic 
in Arms Regulations (ITAR), which is administered by the Directorate of 
Defense Trade Controls (DDTC).
(1) AECA Section 38(e)
    Applying the 2021 multiplier, the new maximum penalty under 22 
U.S.C. 2778 (22 CFR 127.10(a)(1)(i)) is $1,197,728.
(2) AECA Section 39A(c)
    Applying the multiplier, the new maximum penalty under 22 U.S.C. 
2779a (22 CFR 127.10(a)(1)(ii)) is $870,856, or five times the amount 
of the prohibited payment, whichever is greater.
(3) AECA Section 40(k)
    Applying the multiplier, the new maximum penalty under 22 U.S.C. 
2780 (22 CFR 127.10(a)(1)(iii)) is $1,036,566.

IV. Part 138

    Section 319 of Public Law 101-121, codified at 31 U.S.C. 1352, 
provides penalties for recipients of Federal contracts, grants, and 
loans who use appropriated funds to lobby the executive or legislative 
branches of the Federal Government in connection with a specific 
contract, grant, or loan. Any person who violates that prohibition is 
subject to a civil penalty. The statute also requires each person who 
requests or receives a Federal contract, grant, cooperative agreement, 
loan, or a Federal commitment to insure or guarantee a loan, to 
disclose any lobbying; there is a penalty for failure to disclose.
    Applying the 2021 multiplier, the maximum penalties for both 
improper expenditures and failure to disclose, is: For first offenders, 
$20,396; for others, not less than $20,731, and not more than $207,314.

Summary

------------------------------------------------------------------------
                                                       New (FY 21) max
     Citation in 22 CFR        2020 Max penalties         penalties
------------------------------------------------------------------------
Sec.   35.3.................  $11,665 up to         $11,803 up to
                               $343,969.             $348,035.
Sec.   103.6(a)(1)..........  $39,229.............  $39,693.
Prohibited Acts.............
Sec.   103.6(a)(2)..........  $7,846..............  $7,939.
Recordkeeping Violations....
Sec.   127.10(a)(1)(i)......  $1,183,736..........  $1,197,728.
Sec.   127.10(a)(1)(ii).....  $860,683............  $870,856.
                              or 5 times the        or 5 times the
                               amount of the         amount of the
                               prohibited payment,   prohibited payment,
                               whichever is          whichever is
                               greater.              greater.
Sec.   127.10(a)(1)(iii)....  $1,024,457..........  $1,036,566.

[[Page 7806]]

 
Sec.   138.400..............  $20,158.............  $20,396.
First Offenders.............
Sec.   138.400..............  $20,489 up to         $20,731 up to
                               $204,892.             $207,314.
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Effective Date of Penalties

    The revised CMP amounts will go into effect on the date this rule 
is published. All violations for which CMPs are assessed on or after 
the effective date of this rule, regardless of whether the violation 
occurred before the effective date, will be assessed at the adjusted 
penalty level.

Future Adjustments and Reporting

    The 2015 Act directed agencies to undertake an annual review of 
CMPs using a formula prescribed by the statute. Annual adjustments to 
CMPs are made in accordance with the guidance issued by OMB. As in this 
rulemaking, the Department of State will publish notification of annual 
inflation adjustments to CMPs in the Federal Register no later than 
January 15 of each year, with the adjusted amount taking effect 
immediately upon publication.

Regulatory Analysis and Notices

Administrative Procedure Act

    The Department of State is publishing this rule using the ``good 
cause'' exception to the Administrative Procedure Act (5 U.S.C. 
553(b)), as the Department has determined that public comment on this 
rulemaking would be impractical, unnecessary, or contrary to the public 
interest. This rulemaking is mandatory and entirely without agency 
discretion; it implements Public Law 114-74. See 5 U.S.C. 553(d)(3).

Regulatory Flexibility Act

    Because this rulemaking is exempt from 5 U.S.C. 553, a Regulatory 
Flexibility Analysis is not required.

Unfunded Mandates Reform Act of 1995

    This rule does not involve a mandate that will result in the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector, of $100 million or more in any year and it 
will not significantly or uniquely affect small governments. Therefore, 
no actions were deemed necessary under the provisions of the Unfunded 
Mandates Reform Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule within the meaning of the Small 
Business Regulatory Enforcement Fairness Act of 1996.

Executive Orders 12372 and 13132

    This amendment will not have substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined that this amendment does not have 
sufficient federalism implications to require consultations or warrant 
the preparation of a federalism summary impact statement.

Executive Orders 12866 and 13563

    The Department believes that benefits of the rulemaking outweigh 
any costs, and there are no feasible alternatives to this rulemaking. 
Pursuant to M-20-05, OIRA has determined that agency regulations that 
(1) exclusively implement the annual adjustment, (2) are consistent 
with this guidance, and (3) have an annual impact of less than $100 
million, are generally not significant regulatory actions under E.O. 
12866. Therefore, agencies are generally not required to submit 
regulations satisfying those criteria to OIRA for review. This 
regulation satisfies all of those criteria.

Executive Order 12988

    The Department of State has reviewed the proposed amendment in 
light of Executive Order 12988 to eliminate ambiguity, minimize 
litigation, establish clear legal standards, and reduce burden.

Executive Order 13175

    The Department of State has determined that this rulemaking will 
not have tribal implications, will not impose substantial direct 
compliance costs on Indian Tribal governments, and will not preempt 
Tribal law. Accordingly, Executive Order 13175 does not apply to this 
rulemaking.

Paperwork Reduction Act

    This rulemaking does not impose or revise any information 
collections subject to 44 U.S.C. Chapter 35.

List of Subjects

22 CFR Part 35

    Administrative practice and procedure, Claims, Fraud, Penalties.

22 CFR Part 103

    Administrative practice and procedure, Chemicals, Classified 
information, Foreign relations, Freedom of information, International 
organization, Investigations, Penalties, Reporting and recordkeeping 
requirements.

22 CFR Part 127

    Arms and munitions, Exports.

22 CFR Part 138

    Government contracts, Grant programs, Loan programs, Lobbying, 
Penalties, Reporting and recordkeeping requirements.

    For the reasons set forth above, 22 CFR parts 35, 103, 127, and 138 
are amended as follows:

PART 35--PROGRAM FRAUD CIVIL REMEDIES

0
1. The authority citation for part 35 continues to read as follows:

    Authority:  22 U.S.C. 2651a; 31 U.S.C. 3801 et seq.; Pub. L. 
114-74, 129 Stat. 584.


Sec.  35.3  [Amended]

0
2. In Sec.  35.3:
0
a. Remove ``$11,665'' and add in its place ``$11,803'', wherever it 
occurs.
0
b. In paragraph (f), remove ``$343,969'' and add in its place 
``$348,035''.

PART 103--REGULATIONS FOR IMPLEMENTATION OF THE CHEMICAL WEAPONS 
CONVENTION AND THE CHEMICAL WEAPONS CONVENTION IMPLEMENTATION ACT 
OF 1998 ON THE TAKING OF SAMPLES AND ON ENFORCEMENT OF REQUIREMENTS 
CONCERNING RECORDKEEPING AND INSPECTIONS

0
3. The authority citation for part 103 continues to read as follows:

    Authority:  22 U.S.C. 2651a; 22 U.S.C. 6701 et seq.; Pub. L. 
114-74, 129 Stat. 584.


Sec.  103.6  [Amended]

0
4. In Sec.  103.6:
0
a. In paragraph (a)(1), remove ``$39,229'' and add in its place 
``$39,693''; and
0
b. In paragraph (a)(2), remove ``$7,846'' and add in its place 
``$7,939''.

[[Page 7807]]

PART 127--VIOLATIONS AND PENALTIES

0
5. The authority citation for part 127 continues to read as follows:

    Authority:  Sections 2, 38, and 42, Pub. L. 90-629, 90 Stat. 744 
(22 U.S.C. 2752, 2778, 2791); 22 U.S.C. 401; 22 U.S.C. 2651a; 22 
U.S.C. 2779a; 22 U.S.C. 2780; E.O. 13637, 78 FR 16129; Pub. L. 114-
74, 129 Stat. 584.


Sec.  127.10   [Amended]

0
6. In Sec.  127.10:
0
a. In paragraph (a)(1)(i), remove ``$1,183,736'' and add in its place 
``$1,197,728'';
0
b. In paragraph (a)(1)(ii), remove ``$860,683'' and add in its place 
``$870,856''; and
0
c. In paragraph (a)(1)(iii), remove ``$1,024,457'' and add in its place 
``$1,036,566''.

PART 138--RESTRICTIONS ON LOBBYING

0
7. The authority citation for part 138 continues to read as follows:

    Authority:  22 U.S.C. 2651a; 31 U.S.C. 1352; Pub. L. 114-74, 129 
Stat. 584.


Sec.  138.400  [Amended]

0
8. In Sec.  138.400:
0
a. Remove ``$20,489'' and ``$204,892'' and add in their place 
``$20,731'' and ``$207,314'', respectively, wherever they occur.
0
b. In paragraph (e), remove ``$20,158'' and add in its place 
``$20,396''.

Zachary A. Parker,
Director, Office of Directives Management.

    Editorial note: This document was received for publication by 
the Office of the Federal Register on January 11, 2021.
[FR Doc. 2021-00668 Filed 2-1-21; 8:45 am]
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