[Federal Register Volume 89, Number 4 (Friday, January 5, 2024)]
[Rules and Regulations]
[Pages 700-702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-29003]


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DEPARTMENT OF STATE

22 CFR Parts 35, 103, 127, and 138

[Public Notice: 12298]
RIN 1400-AF72


Department of State 2024 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 2023 guidance from the Office of Management and Budget and by 
recent legislation. For penalties adjusted according to the December 
2023 guidance, 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.

DATES: This final rule is effective on January 5, 2024.

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, followed by annual updates in January of each year. The 
most recent update was in January 2023.\2\
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    \1\ 81 FR 36771 (Jun. 8, 2016).
    \2\ 88 FR 1505 (Jan. 11, 2023).
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    On December 19, 2023, OMB notified agencies that the annual cost-
of-living adjustment multiplier for fiscal year (FY) 2024, based on the 
Consumer Price Index, is 1.03241. Additional information may be found 
in OMB Memorandum M-24-07. This final rule amends Department CMPs for 
fiscal year 2024.

Overview of the Areas Affected by This Rule

    See the table for specific changes. 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. The PFCRA, enacted in 
1986, authorizes agencies, with approval from the Department of 
Justice, to pursue individuals or firms for false claims;
    (2) Part 103, which implements the Chemical Weapons Convention 
Implementation Act of 1998 (CWC Act) (22 U.S.C. 6761). 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(a);
    (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)). 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); and
    (4) Part 138, which implements 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.

[[Page 701]]



                       FY 2024 Multiplier: 1.03241
------------------------------------------------------------------------
                                                        New FY 24 max
     Citation in 22 CFR          FY 23 penalties          penalties
------------------------------------------------------------------------
Sec.   35.3.................  $13,508 up to         $13,946 up to
                               $405,270.             $418,405.
Sec.   103.6(a)(1)            $45,429.............  $46,901.
 Prohibited Acts.
Sec.   103.6(a)(2)            $9,086..............  $9,380.
 Recordkeeping Violations.
Sec.   127.10(a)(1)(i)......  The greater of        The greater of
                               $1,200,000 or the     $1,238,892 or the
                               amount that is        amount that is
                               twice the value of    twice the value of
                               the transaction       the transaction
                               that is the basis     that is the basis
                               of the violation      of the violation
                               with respect to       with respect to
                               which the penalty     which the penalty
                               is imposed.           is imposed.
Sec.   127.10(a)(1)(ii).....  $996,685, or five     $1,028,988, or five
                               times the amount of   times the amount of
                               the prohibited        the prohibited
                               payment, whichever    payment, whichever
                               is greater.           is greater.
Sec.   127.10(a)(1)(iii)....  $1,186,338..........  $1,224,787.
Sec.   138.400 First          $23,343.............  $24,100.
 Offenders.
Sec.   138.400 Others.......  $23,727 up to         $24,496 up to
                               $237,268.             $244,958.
------------------------------------------------------------------------

Effective Date of Penalties

    The revised CMP amounts for all penalties will go into effect on 
the date this rule is published. All violations for which those 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.

Congressional Review Act

    This rule is not a major rule within the meaning of the 
Congressional Review Act, 5 U.S.C. 801 et seq.

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, 14094, 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-23-05, the Office of Information and Regulatory Affairs 
(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 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, Crime, Exports, Penalties, Seizures and 
forfeitures.

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:


[[Page 702]]


    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. In paragraphs (a)(1) introductory text, (b)(1)(ii), and (f) remove 
``$13,508'' and add in its place ``13,946; and
0
b. In paragraph (f), remove ``$405,270'' and add in its place 
``$418,405''.

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 ``$45,429'' and add in its place 
``$46,901''; and
0
b. In paragraph (a)(2), remove ``$9,086'' and add in its place 
``$9,380''.

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 ``$1,200,000'' and add in its place 
``$1,238,892'';
0
b. In paragraph (a)(1)(ii), remove ``$996,685'' and add in its place 
``$1,028,988''; and
0
c. In paragraph (a)(1)(iii), remove ``$1,186,338'' and add in its place 
``$1,224,787''.

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. In paragraphs (a), (b), and (e), remove ``$23,727'' and ``$237,268'' 
and add in their place ``$24,496'' and ``$244,958'', respectively; and
0
b. In paragraph (e), remove ``$23,343'' and add in its place 
``$24,100''.

Kevin E. Bryant,
Deputy Director, Office of Directives Management, Department of State.
[FR Doc. 2023-29003 Filed 1-4-24; 8:45 am]
BILLING CODE 4710-08-P