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Federal Register / Vol. 86, No. 20 / Tuesday, February 2, 2021 / Rules and Regulations DATES:

This final rule is effective on February 2, 2021.

Overview of the Areas Affected by This Rule
FOR FURTHER INFORMATION CONTACT:

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.
38013812;
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 38e, 39Ac, and 40k of the Arms Export Control Act AECA 22 U.S.C. 2778e, 2779ac, and 2780k; and 4 Part 138, which implements Section 319 of Public Law 101121, 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.

Alice Kottmyer, Attorney-Adviser, Office of Management, kottmyeram@
state.gov. ATTN: Regulatory Change, CMP Adjustments, 202 6472318.
The Federal Civil Penalties Inflation Adjustment Act of 1990, Public Law 101410, as amended by the Debt Collection Improvement Act of 1996, Public Law 104134, 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 11474 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
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 M2110, at: https www.whitehouse.gov/wpcontent/uploads/2020/12/M-21-10.pdf.
This final rule amends Department CMPs for fiscal year 2021.

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SUPPLEMENTARY INFORMATION:

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.

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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 38e Applying the 2021 multiplier, the new maximum penalty under 22 U.S.C.
2778 22 CFR 127.10a1i is $1,197,728.
2 AECA Section 39Ac Applying the multiplier, the new maximum penalty under 22 U.S.C.
2779a 22 CFR 127.10a1ii is $870,856, or five times the amount of the prohibited payment, whichever is greater.
3 AECA Section 40k Applying the multiplier, the new maximum penalty under 22 U.S.C. 2780
22 CFR 127.10a1iii is $1,036,566.
IV. Part 138
Section 319 of Public Law 101121, 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
Citation in 22 CFR

2020 Max penalties
35.3
103.6a1
Prohibited Acts
103.6a2
Recordkeeping Violations
127.10a1i
127.10a1ii

$11,665 up to $343,969
$39,229

$11,803 up to $348,035.
$39,693.

$7,846

$7,939.

$1,183,736
$860,683
or 5 times the amount of the prohibited payment, whichever is greater.
$1,024,457

$1,197,728.
$870,856.
or 5 times the amount of the prohibited payment, whichever is greater.
$1,036,566.

127.10a1iii
1 81
2 82

FR 36771 Jun. 8, 2016.
FR 3168 Jan. 11, 2017.

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4 84

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FR 234 Jan. 3, 2018.
FR 9957 Mar. 19, 2019.

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New FY 21 max penalties
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FR 2020 Jan. 14, 2020.

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