[Federal Register Volume 88, Number 69 (Tuesday, April 11, 2023)]
[Rules and Regulations]
[Pages 21478-21480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07566]


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POSTAL SERVICE

39 CFR Part 111


Counterfeit Postage

AGENCY: Postal ServiceTM.

ACTION: Final rule.

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SUMMARY: The Postal Service is amending Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM[supreg]) in various 
sections to clarify the handling of items found in the mail bearing 
counterfeit postage.

DATES: Effective: May 7, 2023.

FOR FURTHER INFORMATION CONTACT: Jane Quenk at (202) 268-7098 or Garry 
Rodriguez at (202) 268-7281.

SUPPLEMENTARY INFORMATION: On February 16, 2023, the Postal Service 
published a notice of proposed rulemaking (88 FR 10068) to revise the 
DMM in various sections to clarify the handling of items found in the 
mail bearing counterfeit postage. The Postal Service received numerous 
comments on that notice, and it appreciates the valuable public input. 
Multiple commenters expressed support for the Postal Service efforts to 
address counterfeit postage, an issue that many commenters viewed as 
wide-spread, problematic, and a risk to Postal Service revenue. The 
Postal Service now responds to the comments received as follows:

Comments Relating to Information About Counterfeit Postage

    Comment: The Postal Service received several comments requesting to 
know how to avoid purchasing counterfeit postage.

[[Page 21479]]

    Response: Customers are urged to purchase their postage from 
legitimate vendors. Information about where to buy legitimate postage 
is available on usps.com. See https://faq.usps.com/s/article/What-is-an-Approved-Postal-Provider.
    Comment: Various commenters requested training that would provide 
them information to allow them to tell the difference between 
counterfeit and legitimate postage.
    Response: Training about security enhancements and security 
measures found in postage will not be provided to the public because 
revealing this information could lead to misuse of the information and 
enable the creation of counterfeit postage.
    Comment: Comments reflect that customers and shippers want to know 
when an item they expect to be delivered has been identified as having 
counterfeit postage.
    Response: USPS is looking at enhancements to tracking and scanning 
technologies to provide appropriate messaging.

Comments Related to How the Postal Service Will Identify Counterfeit 
Postage and Whether There Will Be an Administrative Review Process

    Comment: Commenters expressed concerns related to the process of 
identifying counterfeit postage and were concerned about the possible 
misidentification of valid postage as counterfeit postage. Others 
worried that a misidentification would lead to improper abandonment, 
disposal, or to items being stolen. Further, one commenter asked about 
whether there would be an administrative review process for such 
findings.
    Response: The Postal Service is mindful of these concerns. To limit 
misidentification of counterfeit postage, the Postal Service will only 
allow related determinations to be made by individuals who are trained 
and authorized or by approved machine systems programmed to identify 
the counterfeit postage. This will help to build expertise and reduce 
opportunities for the improper, or inconsistent, handling of such 
matters and will better ensure the security of the mails. Further, the 
Postal Service is not planning to implement an administrative review 
process. The Postal Service is making its best efforts to reduce the 
occurrence of misidentified counterfeit postage. Given the volume of 
mail using counterfeit postage, and the prevalence of invalid return 
addresses used on items bearing counterfeit postage, implementation of 
such an administrative process is impractical. As the issuer of 
postage, the Postal Service is the final arbiter of what is valid 
postage versus what is counterfeit postage.

Comments Regarding the Plan To Abandon and Dispose of Items Bearing 
Counterfeit Postage

    The rule will allow items found in the mails with counterfeit 
postage to be ``considered abandoned'' and allows for such items to be 
``disposed of at the discretion of the Postal Service.''
    Comment: Several comments were received suggesting that items that 
bear counterfeit postage not be abandoned; instead, they sought to have 
such items delivered postage due, postage due with a fine, or 
alternatively to be delivered COD (collect on delivery--requires 
payment of postage and fees at time of mailing). The comments 
characterize the refusal to deliver the items as postage due as 
``punishing the victim.''
    Response: These suggestions carry a significant cost for the Postal 
Service, and under existing regulations, the Postal Service may not 
deliver--even as postage due or as COD--items with no postage, 
including those that bear counterfeit postage. This regulation is not 
intended to punish the addressee. Instead, the regulation seeks to 
abide with current regulations by refusing to expend resources to 
deliver an item for which no postage was paid.
    Comment: Some comments suggested that it was improper to abandon 
and dispose of these items unless the Postal Service could prove that 
the sender knew the postage was counterfeit.
    Response: The introduction to the regulation referred to fact that 
that the intentional use of counterfeit postage to defraud the 
government is a crime. Although the Postal Service noted this fact, and 
the regulation may discourage this activity, the regulation is not 
issued to penalize criminal activity and therefore, the Postal Service 
is not required to prove that the mailer knew the postage was 
counterfeit when it used it for mailing purposes. Instead, the 
regulation is promulgated under the Postal Service's broad authority to 
deliver the mails in a cost-efficient manner and to comply with 
existing regulations.

Comments Questioning the Efficacy of the Rule and Suggesting Alternate 
Manners of Combatting Counterfeit Postage

    Comment: Some comments pointed out that the regulation would be 
helpful but noted that it would not adequately address or solve 
counterfeit postage issues. Other comments pointed to problems with 
various types of postage and complex pricing models that lead to 
losses, while others identified alternate manners of combatting 
counterfeit postage.
    Response: The alternate methods discussed included: improvements to 
various postage payment methods, the enforcement of criminal laws, 
deputizing retired stamp collectors to monitor ads that sell 
counterfeit postage, and creating a counterfeit postage vendor list. 
The abandonment process in the regulation does not replace the 
investigation and prosecution of criminal conduct. The Postal 
Inspection Service continues to work on these investigations. The 
Postal Service does not view the new regulation as an exclusive 
solution, rather, it views it as part of a multi-pronged approach to 
address counterfeit postage issues.

Miscellaneous Comments Outside of the Scope of the Regulation

    Comment: Many comments were submitted providing tips on where 
counterfeit postage is being sold.
    Response: These comments are beyond the scope of the regulation, 
but they will be forwarded to the Postal Inspection Service.
    Comment: Some comments received suggested the Postal Service donate 
items that are abandoned or expressed concerns with how the items will 
be handled after abandonment.
    Response: These comments are outside of the scope of regulation 
because once the property is abandoned, the disposition of that 
property is within the Postal Service's discretion. Even so, the Postal 
Service is aware of the many methods that may be used to dispose of 
items and will handle these items in a responsible and sustainable 
manner.
    Comment: ``What does resembling a postage stamp [sic] in form and 
design mean? Can I affix foreign stamps for philatelic purposes.''
    Response: Although these questions are beyond the scope of the 
regulation, we refer the commenter to DMM 604.1.3. This provision 
explains that the use of foreign stamps is invalid for use as postage 
in the United States and may not be used for domestic originated 
international mail.
    Comment: One commenter pointed out that there was no cost benefit 
analysis provided with the proposed regulation.
    Response: The Administrative Procedures Act does not apply to the 
Postal Service, nonetheless, the Postal Service has chosen to publish 
the proposed regulation to provide public notice and an opportunity to 
comment.

[[Page 21480]]

The Postal Service is not required to provide a cost benefit analysis 
to substantiate this rule. However, as the Postal Service has 
explained, the rule has been issued to address the critical problem 
resulting from the increases in the volume of packages with counterfeit 
postage.
    The Postal Service seeks to distinguish the handling of articles 
entered without postage under subsection 604.8.2 from those that 
contain counterfeit postage.
    Therefore, the Postal Service is revising subsection 604.8.4 to 
provide that when all articles with counterfeit postage are found they 
will be considered abandoned and disposed of at the discretion of the 
Postal Service, rather than be returned to the sender as the affixing 
of counterfeit postage reflects a refusal to pay postage or an 
intentional effort to avoid paying postage. The Postal Service is also 
revising various other subsections for clarity with the revision to 
subsection 604.8.4.
    We believe this revision will provide customers with clarity on the 
handling of items bearing counterfeit postage.
    The Postal Service adopts the following changes to Mailing 
Standards of the United States Postal Service, Domestic Mail Manual 
(DMM), incorporated by reference in the Code of Federal Regulations. 
See 39 CFR 111.1.
    We will publish an appropriate amendment to 39 CFR part 111 to 
reflect these changes.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

    Accordingly, 39 CFR part 111 is amended as follows:

PART 111--GENERAL INFORMATION ON POSTAL SERVICE

0
1. The authority citation for 39 CFR part 111 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-
1737; 39 U.S.C. 101, 401-404, 414, 416, 3001-3018, 3201-3220, 3401-
3406, 3621, 3622, 3626, 3629, 3631-3633, 3641, 3681-3685, and 5001.


0
2. Revise the Mailing Standards of the United States Postal Service, 
Domestic Mail Manual (DMM) as follows:

Mailing Standards of the United States Postal Service, Domestic Mail 
Manual (DMM)

* * * * *

500 Additional Mailing Services

* * * * *

507 Mailer Services

1.0 Treatment of Mail
1.1 Nondelivery of Mail
    Mail can be undeliverable for these reasons:
* * * * *
    [Renumber items b through g as c through h and add new item b to 
read as follows:]
    b. Counterfeit Postage (see 604.8.4).
* * * * *

604 Postage Payment Methods and Refunds

1.0 Stamps
* * * * *
1.4 Imitations of Stamps
    [Revise the text of 1.4 to read as follows:]
    Matter bearing imitations of postage stamps, in adhesive or printed 
form, or private seals or stickers resembling a postage stamp in form 
and design, is not acceptable for mailing (See 8.4.2 for handling items 
with counterfeit postage.).
* * * * *
4.0 Postage Meters and PC Postage Products (``Postage Evidencing 
Systems'')
* * * * *
4.4 Postage Discrepancies
4.4.1 Definitions
    [Revise the text of 4.4.1 by deleting the last sentence.]
* * * * *
8.0 Insufficient or Omitted Postage
* * * * *
8.2 Omitted Postage
8.2.1 Handling Mail With Omitted Postage
    [Revise the first sentence of 8.2.1 to read as follows:]
    Except under 8.4 matter of any class, including that for which 
extra services are indicated, received at either the office of mailing 
or office of address without postage, is endorsed ``Returned for 
Postage'' and is returned to the sender without an attempt at delivery. 
* * *
* * * * *
    [Revise the heading and text of 8.4 to read as follows:]
8.4 Counterfeit Postage
8.4.1 Definition
    Counterfeit postage is any marking or indicia that has been made, 
printed, or otherwise created without authorization from the Postal 
Service that is printed or applied, or otherwise affixed, on an article 
placed in the mails that indicates or represents that valid postage has 
been paid to mail the article.
8.4.2 Handling Items With Counterfeit Postage
    Items found in the mail bearing counterfeit postage will be 
considered abandoned and disposed of at the discretion of the Postal 
Service.
* * * * *

Tram T. Pham,
Attorney, Ethics and Legal Compliance.
[FR Doc. 2023-07566 Filed 4-10-23; 8:45 am]
BILLING CODE P