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Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Rules and Regulations
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inappropriate for public disclosure.
Properly submitted comments will be available for inspection and downloading at http
www.regulations.gov. The Department will consolidate all received comments and make them available without change. Commenters are encouraged to submit comments electronically via www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For information regarding the Terrorism Risk Insurance Programs CMPs, contact Richard Ifft, Senior Insurance Regulatory Policy Analyst, Federal Insurance Office, Room 1410 MT, Department of the Treasury, 1500
Pennsylvania Avenue NW, Washington, DC 20220, at 202 6222922 not a tollfree number, or Lindsey Baldwin, Senior Insurance Regulatory Policy Analyst, Federal Insurance Office, at 202 6223220 not a toll free number.
Persons who have difficulty hearing or speaking may access these numbers via TTY by calling the toll-free Federal Relay Service at 800 8778339.
For information regarding the Treasury-wide CMPs, contact Richard Dodson, Senior Counsel, General Law, Ethics, and Regulation, 2026229949.
SUPPLEMENTARY INFORMATION:
I. Background In order to improve the effectiveness of CMPs and to maintain their deterrent effect, the Federal Civil Penalties Inflation Adjustment Act of 1990, 28
U.S.C. 2461 note the Inflation Adjustment Act, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 Pub. L. 11474 the 2015 Act, requires Federal agencies to adjust each CMP provided by law within the jurisdiction of the agency. The 2015 Act requires agencies to adjust the level of CMPs with an initial catch-up adjustment through an interim final rulemaking and to make subsequent annual adjustments for inflation, without needing to provide notice and the opportunity for public comment required by 5 U.S.C. 553. The Departments initial catch-up adjustment interim final rules were published on December 7, 2016
Departmental Offices 81 FR 88600, and for 31 CFR part 27, on February 11, 2019 84 FR 3105. The Departments 2018 annual adjustment was published on March 19, 2018 83 FR 11876, the Departments 2019 annual adjustment was published on April 17, 2019 84 FR
15955, and the Departments 2020
annual adjustment was published on February 21, 2020 85 FR 10063. This rule constitutes the Departments 2021

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annual adjustment. The 2015 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.1
This rule also amends regulations that provide civil penalties for false, fictitious, or fraudulent claims or written statements under the Departments Regulations Implementing the Program Fraud Civil Remedies Act of 1986, at 31 CFR part 16. Adjustments to CMPs under that Part were inadvertently omitted from the Departments initial catch-up adjustment and its subsequent annual adjustments. In particular, this rule adjusts for inflation the maximum amount of the civil monetary penalties that may be assessed under 31 CFR part 16, and it updates the inflation adjustments through 2021 in accordance with instructions from the Office of Management and Budget.
Treasury is currently authorized to impose CMPs against persons who make false, fictitious, or fraudulent claims or who make false, fictitious, or fraudulent written statements, pursuant to 31
U.S.C. 3802a. The maximum CMPs under this statute were established on October 21, 1986, and they have not been adjusted. The maximum CMPs established were $5,000 for each qualifying false claim or false written statement.
II. Method of Calculation The method of calculating CMP
adjustments applied in this final rule is required by the 2015 Act. Under the 2015 Act and the Office of Management and Budget guidance required by the 2015 Act, annual inflation adjustments subsequent to the initial catch-up adjustment are to be based on the percent change between the Consumer Price Index for all Urban Consumers CPIU for the October preceding the date of the adjustment and the prior years October CPIU. As set forth in Office of Management and Budget Memorandum M2110 of December 23, 2020, the adjustment multiplier for 2021 is 1.01182. In order to complete the 2021 annual adjustment, each current CMP is multiplied by the 2021
adjustment multiplier. Under the 2015
Act, any increase in CMP must be rounded to the nearest multiple of $1.
With regard to the CMPs authorized by 31 U.S.C. 3802a, adjustments had to be made back to 2016. Pursuant to OMB
1 However,
the increased CMPs apply only with respect to underlying violations occurring after the date of enactment of the 2015 Act, i.e., after November 2, 2015.

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Guidance, the relevant inflation factor is 2.15628 for the initial catch-up adjustment. Because application of the factor would result in an adjustment of greater than 150% for both 31 U.S.C.
3802a CMPs, the initial adjustment of these penalties is limited to 150%. The relevant inflation factors for 2017
through 2021 are 1.01636 2017, 1.02041 2018, 1.02522 2019, 1.01764
2020, and 1.01182 2021.2
With respect to the $5,000 CMPs, applying the initial 150% adjustment would result in a maximum penalty amount of $7,500. Multiplying that amount by the 2017 factor of 1.01636
and rounding to the nearest dollar would yield a maximum penalty amount of $7,623. Multiplying that amount by the 2018 factor of 1.02041
and rounding yields a maximum penalty amount of $7,779. Multiplying that amount by the 2019 factor of 1.02522 and rounding yields a maximum penalty amount of $7,975.
Multiplying that amount by the 2020
factor of 1.01764 and rounding yields a maximum penalty amount of $8,116.
Finally, applying the 2021 factor of 1.01182 to that amount results in an adjusted maximum penalty of $8,212.
Procedural Matters 1. Administrative Procedure Act The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 Section 701b requires agencies to make annual adjustments for inflation to CMPs, without needing to provide notice and the opportunity for public comment and a delayed effective date required by 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. The Department is charged only with performing ministerial computations to determine the dollar amount of adjustments for inflation to CMPs.
Accordingly, prior public notice, an opportunity for public comment, and a delayed effective date are not required for this rule, with the exception of the initial catch-up adjustment to 31 CFR
part 16.
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.
2 OMB Memoranda regarding the initial catch-up and yearly inflation adjustments include M1606
Feb. 24, 2016, M1711 Dec. 16, 2016, M1803
Dec. 15, 2017, M1904 Dec. 14, 2018, M20
05 Dec. 16, 2019, and M2110 Dec. 23, 2020.

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