[Federal Register Volume 89, Number 17 (Thursday, January 25, 2024)]
[Rules and Regulations]
[Pages 4820-4821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01420]


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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.

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SUMMARY: FinCEN is publishing this final rule to reflect inflation 
adjustments to its civil monetary penalties as mandated by the Federal 
Civil Penalties Inflation Adjustment Act of 1990, as amended. This rule 
adjusts certain maximum civil monetary penalties within the 
jurisdiction of FinCEN to the amounts required by that Act.

DATES: Effective January 25, 2024.

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

SUPPLEMENTARY INFORMATION:

I. Background

    To improve the effectiveness of civil monetary penalties (CMPs) and 
to maintain their deterrent effect, the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (the Act) \1\ requires Federal 
agencies to adjust for inflation each CMP provided by law within the 
jurisdiction of the agency. Under the Act, agencies are required to 
adjust CMPs annually and publish these adjustments in the Federal 
Register.\2\ Agencies are to make the adjustments without engaging in 
notice-and-comment rulemaking, and these adjustments may be immediately 
effective upon publication.\3\ 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.\4\ FinCEN publishes CMP inflation adjustments in its 
regulations at 31 CFR 1010.821.
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    \1\ Public Law 101-410, as amended in 2015 by section 701 of 
Public Law 114-74 and codified as a note to 28 U.S.C. 2461.
    \2\ Act, sec. 4(a).
    \3\ Act, sec. 4(b)(2) (adjustments are to be made 
``notwithstanding'' the rulemaking requirements of 5 U.S.C. 553 of 
the Administrative Procedure Act).
    \4\ 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. Act, sec. 6.
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II. Method of Calculation

    The method of calculating CMP adjustments applied in this final 
rule is determined by the Act. Under the Act and Office of Management 
and Budget (OMB) guidance, annual inflation adjustments 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.\5\ As set forth in OMB Memorandum 
M-24-07 of December 19, 2023, the adjustment multiplier for 2024 is 
1.03241. To complete the 2024 annual adjustment, each current FinCEN 
CMP is multiplied by the 2024 adjustment multiplier. Under the Act, any 
increase in CMP must be rounded to the nearest multiple of $1.\6\
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    \5\ Act, sec. 5; OMB Mem. M-24-07 (Dec. 19, 2023).
    \6\ Act, sec. 5(a). FinCEN previously applied a catch-up 
adjustment for each penalty subject to the Act in 2016 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 of 
establishment or last adjustment is different for different 
penalties, penalties that were of the same size when each was 
promulgated can have different values today if promulgated at 
different times.
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    This final rule lists adjusted CMPs associated with violations of 
the Corporate Transparency Act (CTA) \7\ for the first time: 
specifically, the CMPs for beneficial ownership information (BOI) 
reporting violations (31 U.S.C. 5336(h)(3)(A)(i)) and for the 
unauthorized disclosure or use of BOI (31 U.S.C. 5336(h)(3)(B)(i)). 
These CMPs were established when the CTA became law in 2021, but were 
not published with prior adjustments because FinCEN's regulations 
implementing the CTA were then not yet effective.\8\ Because these CTA-
associated CMPs will be effective in 2024, they are listed in this 
adjustment. As these CMPs were established in 2021, they were also 
subject to the CMP adjustments imposed in 2022 and 2023, even though 
they were not published with those adjustments; accordingly, this rule 
applies the 2022, 2023, and 2024 adjustment multipliers to the CMPs 
established by the CTA.\9\
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    \7\ The CTA is Title LXIV of the William M. (Mac) Thornberry 
National Defense Authorization Act for Fiscal Year 2021, Public Law 
116-283 (Jan. 1, 2021). The CTA is codified at 31 U.S.C. 5336.
    \8\ The CTA's BOI reporting requirements are implemented by 
regulations effective January 1, 2024, and the CTA's requirements 
regarding BOI access and safeguards are implemented by regulations 
effective February 20, 2024. See FinCEN, Beneficial Ownership 
Information Reporting Requirements, 87 FR 59498 (Sept. 30, 2022); 
FinCEN, Beneficial Ownership Information Access and Safeguards, 88 
FR 88732 (Dec. 22, 2023).
    \9\ Under section 5(b)(2)(B) of the Act, the adjustment is to 
``be applied to the amount of the civil monetary penalty as it was 
most recently established or adjusted under a provision of law other 
than [the Act].'' This amount is the penalty ``established (i.e., as 
originally enacted by Congress), or last adjusted (i.e., by Congress 
in statute, or by the agency through regulation), whichever is 
later, other than pursuant to [Act].'' OMB Mem. M-16-06 (Feb. 24, 
2016). Because the CTA-associated CMPs were established by Congress 
in 2021 and have not since been adjusted by statute or regulation, 
they were subject to the 2022 and 2023 adjustments required by the 
Act, as well as the 2024 adjustment. FinCEN applied an adjustment 
multiplier of 1.06222 in 2022 and of 1.07745 in 2023 to CMPs. 
FinCEN, Inflation Adjustment of Civil Monetary Penalties, 87 FR 
3433, 3434 (Jan. 24, 2022); FinCEN, Inflation Adjustment of Civil 
Monetary Penalties, 88 FR 3311, 3312 (Jan. 19, 2023).
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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 notwithstanding the 
rulemaking requirements of 5 U.S.C. 553. Additionally, the methodology 
used for adjusting CMPs for inflation is provided by statute, with no 
discretion provided to agencies regarding the substance of the 
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
    This rule is not a significant regulatory action as defined in 
section

[[Page 4821]]

3(f) of Executive Order 12866, as amended.
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

    Administrative practice and procedure, Aliens, Authority 
delegations (Government agencies), Banks and banking, Brokers, Business 
and industry, Commodity futures, Currency, Citizenship and 
naturalization, Electronic filing, Federal savings associations, 
Federal-States relations, Federally recognized tribes, Foreign persons, 
Holding companies, Indian law, Indians, Insurance companies, Investment 
advisers, Investment companies, Investigations, Law enforcement, 
Penalties, Reporting and recordkeeping requirements, Small businesses, 
Securities, Terrorism, Tribal government, Time.

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 1951-1960; 31 U.S.C. 5311-5314 
and 5316-5336; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307; 
sec. 2006, Pub. L. 114-41, 129 Stat. 458-459; sec. 701, Pub. L. 114-
74, 129 Stat. 599.



0
2. Amend Sec.  1010.821 by revising table 1 of Sec.  1010.821 to read 
as follows:


Sec.  1010.821  Penalty adjustment and table.

* * * * *

                              Table 1 to Sec.   1010.821--Penalty Adjustment Table
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                                                                                         Maximum penalty amounts
                                                                                         or range of minimum and
                                      Civil monetary penalty       Penalties as last     maximum penalty amounts
        U.S. Code citation                  description            amended by statute     for penalties assessed
                                                                                         on or after January 25,
                                                                                                   2024
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12 U.S.C. 1829b(j)................  Relating to Recordkeeping                   $10,000                  $25,597
                                     Violations for Funds
                                     Transfers.
12 U.S.C. 1955....................  Willful or Grossly                           10,000                   25,597
                                     Negligent Recordkeeping
                                     Violations.
31 U.S.C. 5318(k)(3)(C)...........  Failure To Terminate                         10,000                   17,315
                                     Correspondent
                                     Relationship with Foreign
                                     Bank.
31 U.S.C. 5321(a)(1)..............  General Civil Penalty                25,000-100,000           69,733-278,937
                                     Provision for Willful
                                     Violations of Bank
                                     Secrecy Act Requirements.
31 U.S.C. 5321(a)(5)(B)(i)........  Foreign Financial Agency                     10,000                   16,117
                                     Transaction--Non-Willful
                                     Violation of Transaction.
31 U.S.C. 5321(a)(5)(C)(i)(I).....  Foreign Financial Agency                    100,000                  161,166
                                     Transaction--Willful
                                     Violation of Transaction.
31 U.S.C. 5321(a)(6)(A)...........  Negligent Violation by                          500                    1,394
                                     Financial Institution or
                                     Non-Financial Trade or
                                     Business.
31 U.S.C. 5321(a)(6)(B)...........  Pattern of Negligent                         50,000                  108,489
                                     Activity by Financial
                                     Institution or Non-
                                     Financial Trade or
                                     Business.
31 U.S.C. 5321(a)(7)..............  Violation of Certain Due                  1,000,000                1,731,383
                                     Diligence Requirements,
                                     Prohibition on
                                     Correspondent Accounts
                                     for Shell Banks, and
                                     Special Measures.
31 U.S.C. 5330(e).................  Civil Penalty for Failure                     5,000                   10,289
                                     To Register as Money
                                     Transmitting Business.
31 U.S.C. 5336(h)(3)(A)(i)........  Civil Penalty for                               500                      591
                                     Beneficial Ownership
                                     Information Reporting
                                     Violation.
31 U.S.C. 5336(h)(3)(B)(i)........  Civil Penalty for                               500                      591
                                     Unauthorized Disclosure
                                     or Use of Beneficial
                                     Ownership Information.
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Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2024-01420 Filed 1-24-24; 8:45 am]
BILLING CODE 4810-02-P