[Federal Register Volume 88, Number 128 (Thursday, July 6, 2023)]
[Rules and Regulations]
[Pages 43062-43063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14204]


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DEPARTMENT OF THE TREASURY

Bureau of Engraving and Printing

31 CFR Part 601


Distinctive Paper and Distinctive Counterfeit Deterrents for 
United States Federal Reserve Notes

AGENCY: Bureau of Engraving and Printing, Treasury.

ACTION: Final regulations.

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SUMMARY: This final rule updates the description of the distinctive 
paper and distinctive counterfeit deterrents used to guard against 
counterfeit and fraudulently altered United States (U.S.) Federal 
Reserve notes. This final rule adopts a January 18, 2023, proposed rule 
without change.

DATES: Effective August 7, 2023.

FOR FURTHER INFORMATION CONTACT: Leslie J. Rivera Pag[aacute]n, 
Attorney-Advisor, Office of Chief Counsel, U.S. Department of the 
Treasury, Bureau of Engraving and Printing, Room 419A, 14th & C Streets 
SW, Washington, DC 20028, phone at (202) 874-2500 or fax (202) 874-
2951.

SUPPLEMENTARY INFORMATION: 

Background and Proposed Rule

    The Department of the Treasury, Bureau of Engraving and Printing's 
(BEP) mission is to develop and manufacture U.S. Federal Reserve notes 
that are trusted worldwide. Accordingly, the Secretary of the Treasury 
has delegated specific authority and responsibilities related to 
producing U.S. Federal Reserve notes to the Director of BEP only. 
(Treasury Order 101-07, Delegation to the Director, Bureau of Engraving 
and Printing, for the Production of Currency Notes to Meet the Demands 
of the Federal Reserve Banks, January 4, 2021.)
    On January 18, 2023, BEP published a notice of proposed rulemaking 
(REG-00854-23) in the Federal Register (88 FR 2871). The BEP is 
adopting as final that proposed rule, which clarifies the description 
of the distinctive paper and distinctive counterfeit deterrents 
separately for U.S. Federal Reserve notes, removes obsolete language, 
aligns the regulation to the current state-of-art and emerging 
technologies generated as a result of BEP's research and development 
initiatives, clarifies the agency's authority for adopting distinctive 
paper and distinctive counterfeits deterrents, and announces the 
adoption of new distinctive paper and counterfeit deterrents by the 
Secretary of the Treasury.

This Final Rule

    The public comment period on the proposed rule closed on March 20, 
2023. No comments were received from the public in response to the 
notice of proposed rulemaking. Accordingly, BEP adopts the proposed 
regulation as the final regulation without modification for the reasons 
discussed in the proposed rule and this preamble.

Procedural Analyses

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) 
requires agencies to prepare an initial regulatory flexibility analysis 
(IRFA) to determine the economic impact of the rule on small entities. 
A small entity is defined as a small business, organization, or 
governmental jurisdiction; an individual is not a small entity. Section 
605(b) of the RFA allows an agency to prepare a certification instead 
of an IRFA if the rule does not have a significant economic impact on a 
substantial number of small entities. Pursuant to 5 U.S.C. 605(b), it 
is hereby certified that this regulation will not have a significant 
economic impact on a substantial number of small entities. The rule is 
limited to updating the description of the distinctive paper and 
distinctive counterfeit deterrents used to guard against counterfeit 
and fraudulently altered U.S. Federal Reserve notes and other 
obligations and securities in accordance with the U.S. Code. 
Accordingly, the rule will have no direct impact on small entities.

B. Regulatory Planning and Review (Executive Orders 12866 and 13563)

    Executive Orders 13563 and 12866 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
BEP has determined that this rule relates to the agency organization 
and management; therefore, Executive Orders 13563 and 12866 do not 
apply to this rule. This rule is not a ``significant regulatory 
action'' under Executive Order 12866.

C. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that agencies assess anticipated costs and benefits and take certain 
other actions before issuing a rule that includes any federal mandate 
that may result in expenditures in any one year by a state, local, or 
tribal government, in the aggregate, or by the private sector, of $100 
million in 1995 dollars, updated annually for inflation. This 
regulation does not include any federal mandate that may result in 
expenditures by state,

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local, or tribal governments or the private sector exceeding that 
threshold.

D. Federalism

    Executive Order 13132 (titled Federalism) prohibits an agency from 
publishing any rule that has federalism implications if the rule either 
imposes substantial, direct compliance costs on state and local 
governments and is not required by statute or preempts state law unless 
the agency meets the consultation and funding requirements of section 6 
of the Executive Order. This rule does not have federalism implications 
nor impose substantial direct compliance costs on state and local 
governments or preempt state law within the meaning of the Executive 
Order.

E. Paperwork Reduction Act (PRA) Notices

    The Paperwork Reduction Act does not apply because this rule did 
not impose information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

F. Severability

    BEP has considered how this regulation should be construed if any 
provision were held to be invalid or unenforceable. The distinctive 
paper and each of the distinctive counterfeit deterrents contribute 
independently to the security of U.S. Federal Reserve notes. 
Accordingly, were protection for any of these items stayed or 
invalidated by a reviewing court, prohibition of the unauthorized 
possession or control of the remaining items would continue to serve 
the intended purpose of guarding against counterfeit and fraudulently 
altered U.S. Federal Reserve notes.

List of Subjects in 31 CFR Part 601

    Currency, Securities, Printing.

    For the reasons stated in the preamble, BEP revises 31 CFR part 601 
to read as follows:

PART 601--DISTINCTIVE PAPER AND DISTINCTIVE COUNTERFEIT DETERRENTS 
FOR UNITED STATES FEDERAL RESERVE NOTES

Sec.
601.1 Notice and scope.
601.2 Distinctiveness requirement.
601.3 Distinctive paper.
601.4 Distinctive counterfeit deterrents.
601.5 Penalty for unauthorized control or possession.

    Authority: 5 U.S.C. 301; 12 U.S.C. 418, 421; 18 U.S.C. 474A; 31 
U.S.C. 321.


Sec.  601.1  Notice and scope.

    The regulation in this part governs the distinctive paper and 
distinctive counterfeit deterrents adopted by the Secretary of the 
Treasury for United States Federal Reserve notes, which are subject to 
18 U.S.C. 474A. The Director of Bureau of Engraving and Printing, by 
delegated authority, hereby gives notice of the distinctive paper and 
distinctive counterfeit deterrents adopted by the Secretary of the 
Treasury.


Sec.  601.2  Distinctiveness requirement.

    (a) The Secretary of the Treasury has adopted distinctive paper and 
distinctive counterfeit deterrents:
    (1) In which the United States has an exclusive property interest; 
or
    (2) That are not otherwise in commercial use or the public domain 
and are necessary for preventing the counterfeiting of United States 
Federal Reserve notes.
    (b) The distinctive paper and counterfeit deterrents are used in 
United States Federal Reserve notes.


Sec.  601.3   Distinctive paper.

    The distinctive paper is a cream-white currency note paper with 
fibers, colored red and blue, evenly distributed throughout the 
currency note paper. The distinctive paper shall contain distinctive 
counterfeit deterrents in the currency note paper denominations 
prescribed by the Secretary of the Treasury.


Sec.  601.4  Distinctive counterfeit deterrents.

    The distinctive counterfeit deterrents that may be used in the 
denominations of United States Federal Reserve notes as prescribed by 
the Secretary of the Treasury are:
    (a) Security threads containing graphics consisting of the 
designation ``USA'' and the denomination of the currency note, 
expressed in alphabetic or numeric characters.
    (b) Optically variable inks with material characteristics.
    (c) Non-visual characteristic inks with material characteristics.
    (d) Optically variable thread (three-dimensional (3-D) security 
ribbon and micro-optic stripe) visible in front or back of the currency 
note.
    (e) Non-visual characteristic features with material 
characteristics.


Sec.  601.5  Penalty for Unauthorized Control or Possession.

    (a) Control or possession of distinctive paper and/or distinctive 
counterfeit deterrents adopted in Sec. Sec.  601.3 and 601.4 require 
authorization by the Secretary of the Treasury.
    (b) The penalty for unauthorized control and/or possession of 
distinctive paper and/or distinctive counterfeit deterrents adopted in 
Sec. Sec.  601.3 and 601.4 is found at 18 U.S.C. 474A.

Leonard R. Olijar,
Director.
[FR Doc. 2023-14204 Filed 7-5-23; 8:45 am]
BILLING CODE 4840-01-P