Rules and Regulations. Final amendments
17,948 words·~82 min read·
/register/2007/10/26/07-5354·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
BILLING CODE 4910-13-M CONSUMER PRODUCT SAFETY COMMISSION 16 CFR Parts 1630 and 1631 Technical Amendment to the Flammability Standards for Carpets and Rugs AGENCY: Consumer Product Safety Commission. ACTION: Final amendments. SUMMARY: The Commission is amending the flammability standards for carpets and rugs to remove the reference to Eli Lilly Company Product No. 1588 in Catalog No. 79, December 1, 1969, as the standard ignition source and provide a technical specification defining the ignition source.
The specification for the standard ignition source is a timed burning tablet, consisting of essentially pure methenamine, with a nominal heat of combustion value of 7180 calories/gram, a mass of 150 mg +/−5 mg, flat, and a nominal diameter of 6 mm. The amendment has an immediate effective date. DATES: The amendment is effective October 26, 2007. FOR FURTHER INFORMATION CONTACT: Patricia K. Adair, Project Manager, Directorate for Engineering Sciences, Consumer Product Safety Commission, Washington, DC 20207; telephone
(301)504-7536. SUPPLEMENTARY INFORMATION: A. Background The standards for surface flammability of carpets and rugs appear at 16 CFR parts 1630 and 1631. They were codified and published in 1975, 40 FR 59931 and 59935 (December 30, 1975). The standards were originally issued in 1970 by the Department of Commerce under the authority of the Flammable Fabrics Act (FFA). Subpart A of 16 CFR parts 1630 and 1631 set forth the standards. Subpart B contains the implementing regulations of the standards. Subpart C contains alternative washing procedures for hide carpets and rugs and wool flotaki carpets and rugs. Subpart D of 16 CFR part 1630 contains the staff interpretations and policies. 16 CFR parts 1630 and 1631 establish minimum acceptance criteria for the surface flammability of carpets and rugs when exposed to a standard small source of ignition, a burning methenamine tablet, under prescribed conditions (the “pill test”). These standards reduce the risks of death, personal injury, and property damage associated with fires that result from the surface ignition of carpets and rugs. Both standards require a timed burning tablet as the standard ignition source for flammability performance testing. The standards define the ignition source at 1630.1(f) and 1631.1(f) as a methenamine tablet, weighing approximately 0.149 grams (2.30 grains), sold as Product No. 1588 in Catalog No. 79, December 1, 1969 by the Eli Lilly Company, or an equal tablet. In April 2002, Commission staff learned that the Eli Lilly Company was no longer producing the methenamine tablets specified in the carpet and rug standards. Although the standards allow for the use of “an equal” methenamine tablet and give parameters for chemical composition and weight of the tablet, they do not provide any guidance on determining whether tablets from alternative sources are “equal” to those manufactured by the Eli Lilly Company. In July 2003, CPSC staff met with representatives of the Carpet and Rug Institute
(CRI)to discuss evaluation of alternative methenamine tablets for use in 16 CFR part 1630 and Part 1631. CRI members were experiencing differing test results using the old Eli Lilly tablets and currently available tablets. CRI members had begun to study the various characteristics of the current tablets. In one case, about 50% of one manufacturer's tablets were found broken in the bottle, with others breaking later. This problem was attributed to the tablets having a domed top. The problem has since been corrected with a flat tablet. CRI urged the Commission to specify clearly the characteristics of the “equal” tablets that should be used for determining compliance to the carpet and rug standards. In an effort to make such a determination, the Commission staff conducted a comparison study to evaluate the weight, chemical composition, and combustion characteristics of presently available brands of methenamine tablets relative to each other and those produced by the Eli Lilly Company. The outcome of the study indicated that tablets consisting of essentially pure methenamine, having a heat of combustion value of approximately 7180 calories/gram and weighing approximately 0.149 grams may be considered equivalent to the tablets produced by the Eli Lilly Company and referenced in the regulation. On July 29, 2004, the Commission's Office of Compliance issued a letter to industry in response to inquiries received by the CPSC staff regarding the equivalency of methenamine tablets formerly manufactured by the Eli Lilly Company and similar tablets currently produced by other manufacturers. The letter stated that the Commission staff determined that tablets consisting of essentially pure methenamine and weighing approximately 0.149 grams may be considered equivalent to the tablets formerly produced by the Eli Lilly Company. Therefore, tablets meeting these criteria may be used for purposes of determining conformance with the carpet and rug standards. B. Amending the Flammability Standards 1. Outcome of Commission Testing As mentioned above, the Eli Lilly Company is no longer producing the methenamine tablets specified in the carpet and rug standards. The standards allow for the use of “an equal” methenamine tablet and give parameters for chemical composition and weight of the tablet, but they do not provide any guidance on determining whether tablets from the alternative sources are “equal” to those manufactured by the Eli Lilly Company. The Commission staff conducted a comparison study to evaluate the weight, chemical composition, and combustion characteristics of presently available brands of methenamine tablets relative to each other and those produced by the Eli Lilly Company. The outcome of the Commission's comparative study indicated that tablets consisting of essentially pure methenamine, having a heat of combustion value of approximately 7,180 calories/gram and weighing approximately 0.149 grams may be considered equivalent to the tablets produced by the Eli Lilly Company and referenced in the regulation. 2. Proposed Amendment On November 13, 2006, the Commission issued a **Federal Register** notice to amend the flammability standards for carpets and rugs to remove the reference to the Eli Lilly Company's tablet as the standard ignition source and provide a generic specification defining the ignition source at § 1630.1(f) and § 1631.1(f) and solicited public comments. The Commission received one comment in support of the proposal, and one objecting to flammability testing as a mandatory requirement and recommending that compliance with the standards be voluntary to avoid potential trade restrictions on woolen rugs. On January 12, 2007, the Commission issued a **Federal Register** notice providing interested persons the opportunity for oral or written presentations regarding the proposed technical amendment to the flammability standards for carpets and rugs. No responses to the **Federal Register** notice were received. 3. Final Rule The carpet and rug flammability standards were issued under section 4 of the FFA (15 U.S.C. 1193), which authorizes the issuance or amendment of flammability standards to protect the public against unreasonable risks of fire leading to death, personal injury, or significant property damage. As required by section 4(b) of the FFA, both standards are based on findings that they are needed to adequately protect the public against the unreasonable risk of the occurrence of fire leading to death, personal injury, or significant property damage. Section 4(j)(1) of the Flammable Fabrics Act requires the Commission to prepare a final regulatory analysis before issuing a final rule. The regulatory analysis must contain a description of the potential benefits and costs of the regulation, a description of any alternatives to the final regulation, and a summary of any significant issues raised by the comments submitted during the public comment period. The Commission must also find that the benefits expected from the rule bear a reasonable relationship to its costs and that the rule imposes the least burdensome requirement which prevents or adequately reduces the risk of injury for which the regulation is being promulgated. 15 U.S.C. 1193(j)(2). Potential Costs and Benefits Since 2002, when production of the previous methenamine tablet was discontinued by its manufacturer, producers and importers of carpets and rugs that comply with the standards have been performing tests with “equivalent” methenamine tablets. The technical amendment will, therefore, maintain current industry practice. The technical amendment to redefine the methenamine tablet will have no significant impact on expected benefits or costs of the flammability standards for carpets and rugs. 4. Comments The Commission received two comments on the proposed rule. The American Fiber Manufacturers Associated supported the technical amendment as proposed. The Permanent Mission of India to the World Trade Organization objected to flammability as a mandatory requirement and recommended that compliance with the standards be voluntary to avoid potential trade restrictions on woolen rugs. The Commission notes that the standards have been in effect since 1970; the amendment only provides a generic specification for the ignition source and will not alter the overall scope of the standards. Thus, the amendment will have no impact on U.S. or international trade. Review of Other Existing Standards The Commission staff is aware of one U.S. voluntary standard regarding the type of ignition source to be used in testing the flammability of carpets and rugs. This standard, ASTM D2859-04, “Standard Test Method for Ignition Characteristics of Finished Textile Floor Covering Materials,” describes the use of the Eli Lilly Tablet as satisfactory. It also states that “normal variation in the weight of the different tablets will not affect the test results.” There is an existing international voluntary standard developed by the International Organization for Standardization in 1982 (ISO 6925), that describes a tablet test for the flammability of textile floor coverings. The prescribed tablets are of “hexamethylenetetramine, flat, having a mass of 150mg (plus or minus 5mg) and a diameter of 6mm.” The allowable variance is about 3.3%. The mass expressed in ISO 6925 is essentially equivalent to that specified in the U.S. Standards under the FFA. While the ISO standard did not identify the Eli Lilly tablet, it noted that the tablets were commercially available. Thus, the ISO-specified tablet is equivalent to the Eli Lilly tablet in its specifications. Canada's 1973 mandatory standard for carpets and textile floor coverings under the Hazardous Products Act, CGSB 4-GP-2, also specifies in its appendix the Eli Lilly tablet as the ignition source. It notes that “normal variation in weight * * * will not affect the test results.” 5. Effective Date Section 4(b) of the FFA (15 U.S.C. 1193(b)) provides that an amendment of a flammability standard shall become effective one year from the date it is promulgated, unless the Commission finds for good cause that an earlier or later effective date is in the public interest, and publishes that finding. Because manufacturers are already using “equal” methenamine tablets as allowed by the current standards, the Commission finds that an immediate effective date upon publication of the amendments is appropriate. C. Other Issues 1. Impact on Small Businesses In accordance with section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 605(b)), in the proposed rule, the Commission preliminarily certified that these amendments to the carpet and rug flammability standards would not have a significant economic impact on a substantial number of small entities, including small businesses. 71 FR 66,145. No information available to the Commission since the issuance of the proposed rule warrants changing this preliminary certification. The amendments keep current industry practices and procedures in place. No additional actions will be required of small entities. Based on available information, there will be little or no effect on small producers of carpets and rugs, since the standards already require that all carpets and rugs meet the criteria of the tests, and, given the equivalence of the test tablets, the results of the tests should be the same. Accordingly, the Commission certifies that this final rule will not have a significant economic impact on a substantial number of small entities. 2. Environmental Considerations The amendments fall within the categories of Commission actions described at 16 CFR 1021.5(c) that have little or no potential for affecting the human environment. The amendments are not expected to have a significant effect on production processes or on the types or amounts of materials used for the manufacture of carpets and rugs. The amendments will not render existing inventories unsalable, or require destruction of existing goods. The Commission has no information indicating any special circumstances in which these amendments may affect the human environment. For that reason, as discussed in the proposed rule, neither an environmental assessment nor an environmental impact statement is required. 71 FR 66145. 3. Executive Order 12988 Executive Order 12988, Civil Justice Reform, (February 5, 1996), requires that the Commission specify the preemptive effect, if any, to be given each new regulation. This technical amendment does not alter the preemptive effect of the underlying regulation. List of Subjects in 16 CFR Parts 1630 and 1631 Carpets, Consumer protection, Flammable materials, Floor coverings, Labeling, Records, Rugs, Textiles, Warranties. Conclusion Therefore, pursuant to the authority of section 30(b) of the Consumer Product Safety Act (15 U.S.C. 2079(b)) and sections 4 and 5 of the Flammable Fabrics Act (15 U.S.C. 1193, 1194), the Commission hereby amends title 16 of the Code of Federal Regulations, Chapter II, Subchapter D, parts 1630 and 1631 to read as follows: PART 1630—STANDARD FOR THE SURFACE FLAMMABILITY OF CARPETS AND RUGS 1. The authority for subpart A of part 1630 continues to read as follows: Authority: Sec. 4, 67 Stat. 112, as amended, 81 Stat. 569-570; 15 U.S.C. 1193. 2. Section 1630.1(f) is revised to read as follows: § 1630.1 Definitions.
(f)*Timed Burning Tablet*
(pill)means a methenamine tablet, flat, with a nominal heat of combustion value of 7180 calories/gram, a mass of 150 mg +/−5mg and a nominal diameter of 6mm. 3. Section 1630.4 is amended by revising the first sentence of paragraph
(3)to read as follows: § 1630.4 Test procedure.
(a)* * *
(3)*Standard igniting source.* A methenamine tablet, flat, with a nominal heat of combustion value of 7180 calories/gram, a mass of 150 mg +/−5 mg and a nominal diameter of 6mm. * * * PART 1631—STANDARD FOR THE SURFACE FLAMMABILITY OF SMALL CARPETS AND RUGS 1. The authority for subpart A of part 1631 continues to read as follows: Authority: Sec. 4, 67 Stat. 112, as amended, 81 Stat. 569-570; 15 U.S.C. 1193. 2. Section 1631.1(f) is revised to read as follows: § 1631.1 Definitions.
(f)*Timed Burning Tablet*
(pill)means a methenamine tablet, flat, with a nominal heat of combustion value of 7180 calories/gram, a mass of 150 mg +/−5mg and a nominal diameter of 6mm. 3. Section 1631.4 is amended by revising the first sentence of paragraph (a)(3) to read as follows: § 1631.4 Test procedure.
(a)* * *
(3)*Standard igniting source.* A methenamine tablet, flat, with a nominal heat of combustion value of 7180 calories/gram, a mass of 150 mg +/−5 mg and a nominal diameter of 6mm. * * * Dated: October 16, 2007. Todd A. Stevenson, Secretary, Consumer Product Safety Commission. List of Relevant Documents 1. “Briefing Package: Technical Amendment to the Flammability Standards for Carpets and Rugs, 16 CFR part 1630 and 16 CFR part 1631,” U.S. Consumer Product Safety Commission, October 3, 2006. 2. Technical Amendment to the Flammability Standards for Carpets and Rugs; Proposed Amendments, 71 FR 66145 (November 13, 2006). 3. Proposed Technical Amendment to the Flammability Standards for Carpets and Rugs; Notice of Opportunity for Oral Comment, 72 FR 1472 (January 12, 2007). [FR Doc. E7-20666 Filed 10-25-07; 8:45 am] BILLING CODE 6355-01-P COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 18 RIN 3038-AC22 Maintenance of Books, Records and Reports by Traders AGENCY: Commodity Futures Trading Commission. ACTION: Final rule. SUMMARY: The Commodity Futures Trading Commission (Commission) is amending Commission Regulation 18.05 in two respects: to make it explicit that persons holding or controlling reportable positions on a designated contract market
(DCM)or derivatives transaction execution facility
(DTEF)must retain books and records and make available to the Commission upon request any pertinent information with respect to all other positions and transactions in the commodity in which the trader has a reportable position, including positions held or controlled or transactions executed on all reporting markets, over-the-counter
(OTC)and/or pursuant to Sections 2(d), 2(g) or 2(h)(1)-(2) of the Commodity Exchange Act
(Act)or Part 35 of the Commission's regulations, on exempt commercial markets operating pursuant to Sections 2(h)(3)-(5) of the Act (ECMs), on exempt boards of trade operating pursuant to Section 5d of the Act (EBOTs), and on foreign boards of trade (FBOTs); and to make the regulation clearer and more complete with respect to hedging activity. The amendments will enhance the Commission's ability to deter and prevent price manipulation or any other disruptions to the integrity of the regulated futures markets, help to ensure the avoidance of systemic risk, and clarify the meaning of the regulation. DATES: *Effective Date:* November 26, 2007. FOR FURTHER INFORMATION CONTACT: Duane C. Andresen, Special Counsel, Division of Market Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. Telephone 202-418-5492; e-mail *dandresen@cftc.gov* . SUPPLEMENTARY INFORMATION: I. Purpose of Regulation 18.05 and Statutory Basis Section 3(b) of the Act 1 declares that the purpose of the Act is to, among other things, deter and prevent price manipulation or any other disruptions to market integrity and to ensure the financial integrity of all transactions subject to the Act and the avoidance of systemic risk. Section 4i of the Act 2 requires persons holding futures or option positions at DCMs or DTEFs at or above certain levels to keep books and records of all: 1 7 U.S.C. § 5(b) (2007). § 3(b) of the Act provides in full: It is the purpose of this chapter to serve the public interests described in subsection
(a)of this section through a system of effective self-regulation of trading facilities, clearing systems, market participants and market professionals under the oversight of the Commission. To foster these public interests, it is further the purpose of this chapter to deter and prevent price manipulation or any other disruptions to market integrity; to ensure the financial integrity of all transactions subject to this chapter and the avoidance of systemic risk; to protect all market participants from fraudulent or other abusive sales practices and misuses of customer assets; and to promote responsible innovation and fair competition among boards of trade, other markets and market participants. 2 7 U.S.C.§ 6i (2007). § 4i of the Act provides: It shall be unlawful for any person to make any contract for the purchase or sale of any commodity for future delivery on or subject to the rules of any contract market or derivatives transaction execution facility—
(1)if such person shall directly or indirectly make such contracts with respect to any commodity or any future of such commodity during any one day in an amount equal to or in excess of such amount as shall be fixed from time to time by the Commission, and
(2)if such person shall directly or indirectly have or obtain a long or short position in any commodity or any future of such commodity equal to or in excess of such amount as shall be fixed from time to time by the Commission, unless such person files or causes to be filed with the properly designated officer of the Commission such reports regarding any transactions or positions described in clauses
(1)and
(2)hereof as the Commission may by rule or regulation require and unless, in accordance with rules and regulations of the Commission, such person shall keep books and records of all such transactions and positions and transactions and positions in any such commodity traded on or subject to the rules of any other board of trade, and of cash or spot transactions in, and inventories and purchase and sale commitments of such commodity. Such books and records shall show complete details concerning all such transactions, positions, inventories, and commitments, including the names and addresses of all persons having any interest therein, and shall be open at all times to inspection by any representative of the Commission or the Department of Justice. For the purposes of this section, the futures and cash or spot transactions and positions of any person shall include such transactions and positions of any persons directly or indirectly controlled by such person.
(1)Transactions and positions in the exchange-traded commodity;
(2)Transactions and positions in any such commodity traded on or subject to the rules of any other board of trade; and
(3)Cash or spot transactions in, and inventories and purchase and sale commitments of such commodity. Such books and records must be open at all times for inspection by any representative of the Commission or the Department of Justice. Section 8a(5) of the Act 3 provides explicit authority to the Commission to make and promulgate such rules and regulations as, in the judgment of the Commission, are reasonably necessary to effectuate any of the provisions or to accomplish any of the purposes of the Act. In order to accomplish the purposes of Sections 3(b) and 4i set forth above, the Commission has promulgated regulations creating market and large trader reporting requirements. 4 Included among these regulations is a requirement that persons holding futures or option positions at DCMs or DTEFs (reporting markets) 5 at or above reportable levels (reportable positions) 6 be identified to the Commission through the large trader reporting system (LTRS). 3 7 U.S.C. 12a(5) (2007). 4 The Commission's market and large trader reporting rules are contained in Parts 15 through 21 of the Commission's regulations. 5 Pursuant to Commission Regulation 15.00(m), a reporting market means a DCM and, unless determined otherwise by the Commission with respect to the facility or a specific contract listed by the facility, a DTEF. 6 Pursuant to Commission Regulation 15.00(l), reportable position means:
(1)For reports specified in parts 17, 18 and § 19.00(a)(2) and (a)(3) of this chapter any open contract position that at the close of the market on any business day equals or exceeds the quantity specified in § 15.03 of this part in either:
(i)Any one future of any commodity on any one reporting market, excluding future contracts against which notices of delivery have been stopped by a trader or issued by the clearing organization of a reporting market; or
(ii)Long or short put or call options that exercise into the same future of any commodity, or long or short put or call options for options on physicals that have identical expirations and exercise into the same physical, on any one reporting market.
(2)For the purposes of reports specified in § 19.00(a)(1) of this chapter, any combined futures and futures-equivalent option open contract position as defined in part 150 of this chapter in any one month or in all months combined, either net long or net short in any commodity on any one reporting market, excluding futures positions against which notices of delivery have been stopped by a trader or issued by the clearing organization of a reporting market, which at the close of the market on the last business day of the week exceeds the net quantity limit in spot, single or in all-months fixed in § 150.2 of this chapter for the particular commodity and reporting market. The LTRS, which requires that clearing members, futures commission merchants
(FCM)and foreign brokers file daily reports with the Commission, enables the Commission to assess an individual trader's activities and potential market power and to enforce the Commission or DCM-set limits on speculative positions. 7 Once a trader holds a reportable position, the trader is subject to Commission Regulation 18.05, 8 which requires that the trader keep books and records showing all details concerning: 7 The Commission also uses large trader reporting information as a means to ensure the avoidance of systemic risk in that such information enables Commission staff to determine which FCMs carrying accounts might have exposure in particular markets. 8 Regulation 18.05 states in full: Every trader who holds or controls a reportable futures or option position shall keep books and records showing all details concerning all positions and transactions for future delivery in the commodity on all reporting markets, all positions and transactions in the commodity option, and all positions and transactions in the cash commodity, its products and byproducts and, in addition, commercial activities that the trader hedges in the commodity underlying the futures contract in which the trader is reportable, and shall upon request furnish to the Commission any pertinent information concerning such positions, transactions or activities.
(1)All positions and transactions for future delivery in the commodity on all reporting markets;
(2)All positions and transactions in the commodity option;
(3)All positions and transactions in the cash commodity, its products and byproducts; and
(4)Commercial activities that the trader hedges in the commodity underlying the futures contract in which the trader is reportable. 9 9 In describing the requirements of Regulation 18.05 in 1981, the Commission stated: The regulation requires reportable traders to maintain books and records of futures positions and transactions in the commodity in which they are reportable and all positions and transactions in the cash commodity and its products and byproducts * * *. [T]he Commission wishes to underscore its view that the book and recordkeeping requirements and inspection provision contained therein are essential to accomplish the purposes of the Act and within the Commission's authority to adopt pursuant to section[s] 4i and 8a(5) of the Act. These requirements have always applied to the traders who hold or control a reportable position, and have not been restricted in any way. “Reporting Requirements for Contract Markets, Futures Commission Merchants, Members of Exchanges and Large Traders,” 46 FR 59960, 59963 (December 8, 1981) (footnote omitted). A reportable trader is required to furnish to the Commission, upon request, any pertinent information concerning these positions, transactions or activities. 10 Traders who do not hold reportable positions do not have obligations under Regulation 18.05. 10 The Commission currently requests such information an average of three times per year. II. Proposal A. Introduction In order to enhance its ability to detect and prevent manipulation of regulated markets and products and to ensure the avoidance of systemic risk, as well as to clarify the meaning of the regulation and bring it up to date, the Commission published in the **Federal Register** a proposal to amend Regulation 18.05 in the following respects: 11 11 72 FR 34413 (June 22, 2007). 1. To make it explicit that persons holding or controlling reportable positions on a reporting market must retain books and records and make available to the Commission upon request pertinent information with respect to all non-reporting transactions, *i.e.* , all positions and transactions in the commodity in which the trader is reportable, including transactions executed on all reporting markets, OTC and/or pursuant to Sections 2(d), 2(g) or 2(h)(1)-(2) of the Act or Part 35 of the Commission's regulations, on ECMs operating pursuant to Sections 2(h)(3)-(5) of the Act, on EBOTs operating pursuant to Section 5d of the Act, and on FBOTs; and 2. To make the regulation clearer and more complete with respect to hedging activity. B. Proposed Amendments Related to Recordkeeping and Reporting The proposal recognized that there is a close relationship among transactions conducted on reporting markets and non-reporting transactions and that it is sometimes necessary to determine all transactions and positions in the commodity in which the trader is reportable in order to more effectively detect and prevent manipulation of regulated markets and products and to ensure the avoidance of systemic risk. 12 The Commission recognized that it is particularly important that staff be able to assess the reportable trader's overall position in the same commodity in light of the growing volume of trading on the non-reporting markets, the close relationship among the various products and markets, the increasing globalization of the futures markets, and the growth of trading on FBOTs. 13 12 *See* sections 6(c), 6c, 6(d) and 9(a)(2) of the Act for the Commission's antimanipulation authority. 13 For instance, since 1999, Commission staff, through foreign terminal no-action letters, has allowed 19 FBOTs to make their trading systems available by direct access to members and other participants in the U.S. without requiring the FBOTs to register as DCMs or DTEFs. The proposal noted that while Regulation 18.05 explicitly requires that a trader holding reportable positions keep books and records and provide to the Commission, upon request, pertinent information with respect to positions and transactions in the underlying commodity on DCMs and DTEFs, it does not explicitly do so with respect to positions and transactions in virtually identical contracts executed on ECMs, EBOTs or FBOTs or in the same commodity executed OTC and/or pursuant to Sections 2(d), 2(g) or 2(h)(1)-(2) of the Act or Part 35 of the Commission's regulations. The Commission noted that information concerning non-reporting transactions is important to its ability to conduct effective market surveillance of the DCM and DTEF contracts. Thus, if a trader is reportable because of futures or option positions in a contract on a DCM or DTEF, the trader's books and records with respect to non-reporting positions and transactions in the same commodity are relevant to effective surveillance and supervision of the DCM or DTEF contract in which the trader is reportable. The proposal noted that the Act provides ample authority to require keeping books and records and providing pertinent information concerning non-reporting transactions. Section 4i explicitly encompasses non-reporting transactions on “any other board of trade” (such as FBOTs, ECMs operating pursuant to Sections 2(h)(3)-(5) of the Act, and EBOTs operating pursuant to Section 5d of the Act) and in the form of cash or spot transactions, inventories, and purchase and sale commitments. Further, Section 3(b) of the Act declares that the purpose of the Act is to, among other things, deter and prevent price manipulation or any other disruptions to market integrity and to ensure the avoidance of systemic risk. Section 8a(5) of the Act authorizes the Commission to promulgate such regulations as, in its judgment, are reasonably necessary to accomplish any of the purposes of the Act. As noted in the proposal, amending Regulation 18.05 to clearly require that reportable traders keep books and records showing all details concerning non-reporting transactions in the reportable commodity is a reasonably necessary means of accomplishing the purposes of Section 3(b) of the Act. The proposal also noted that although non-reporting transactions themselves generally are not subject to most regulatory provisions of the Act, the futures or option transactions executed and maintained on a DCM or DTEF that result in a reportable position are subject to such provisions and, pursuant to Section 3(a) of the Act, are affected with a national public interest. It is the purpose of the Act pursuant to Section 3(b) that the Commission deter and prevent price manipulation of all commodities traded on these regulated markets. The proposal stated that to accomplish this purpose, it is necessary that the Commission have the ability to review all activities in commodities traded on these markets, regardless of where the transactions are executed. By taking a position on a regulated market, a trader agrees to abide by the rules of the market and the Commission, including prohibitions against manipulation. To enhance its ability to detect and deter manipulation and other threats to market integrity, the Commission requires persons holding reportable positions to maintain books and records of transactions that could impact the regulated market and related cash market, including non-reporting transactions. Finally, the proposal noted that staff has interpreted Regulation 18.05 to include position and transaction data for non-reporting transactions and has received such information in response to requests made pursuant to the Regulation. Thus, consistent with the Act and Commission practice, the Commission proposed to amend Regulation 18.05 to make explicit that a trader with a reportable position must keep books and records showing all details concerning all non-reporting transactions in the same commodity and provide pertinent information to the Commission upon request. C. Amendments Related to Clarity and Completeness The proposal also noted that there are two issues that arise in connection with the Regulation 18.05 requirement that traders keep books and records showing all details concerning “commercial activities that the trader hedges in the commodity underlying the futures contract in which the trader is reportable.” First, the phrase has led to some confusion. Originally inserted into the paragraph as “commercial activities that the trader hedges in the futures commodity in which the trader is reportable,” its purpose was to require that, “in addition to books and records of positions or transactions in a cash commodity, a reportable trader must also maintain records of commercial activities which the trader hedges.” 14 Second, the proposal stated that reportable positions can be option positions, as well as futures positions, but it is not clear that the current language also addresses commercial activities that the trader hedges in the commodity underlying any option contract in which the trader is reportable. 14 46 FR 42463, 42466 (August 21, 1981). The Commission therefore proposed to amend the regulation to revert to the original approach and include hedges in the option contract in which the trader is reportable. By modifying the phrase to read “commercial activities that the trader hedges in the futures or option contract in which the trader is reportable,” Regulation 18.05 captures information with respect to hedges in other than the cash commodity, its products or byproducts (i.e., a trader with a reportable position in gold futures or options that is a hedge of a cash position in silver would be required to comply with the Regulation 18.05 requirements with respect to the silver position). III. Comments Regarding the Proposal The Commission received six comment letters on its proposal. Commenters included the American Public Gas Association (APGA), the Industrial Energy Consumers of America (IECA), the International Swaps and Derivatives Association, Inc. (ISDA), the Managed Funds Association (MFA), the New York Public Service Commission (NYPSC), and the New York Mercantile Exchange (NYMEX). Most of the commenters generally endorsed the proposal and/or its underlying purpose, but felt that additional steps are necessary to resolve the underlying matters that the proposal is intended to address. Two commenters raised concerns regarding the recordkeeping and reporting aspects of the proposal. The APGA commented that it strongly supports the proposed amendment but is concerned about the economic links between NYMEX and OTC contracts and believes that further steps are necessary for the Commission to carry out surveillance of the natural gas markets. It expressed concern that the LTRS does not routinely reach traders' large OTC positions and noted that it has petitioned Congress to provide the Commission with authority for a LTRS with respect to trading in financial contracts in natural gas. Further, the APGA commented that reliance on special call authority leaves open the potential for manipulation or other disruptive behavior with little risk of detection until after damage to the market has been done. The IECA commented that it supports the proposal but noted that requiring companies to keep books and records does not prevent market manipulation and that preemptive monitoring of entities with large positions that cover both futures and OTC markets is necessary. Further, such entities should be required to report daily to the Commission. The IECA also recommended that the Commission support the establishment of an advisory panel on energy markets with consumer participation thereon. The NYPSC noted that it supports the proposed rule and its underlying purpose and that given the increases in natural gas prices over the past several years, the relevant government entities must take all available steps to prevent market manipulation and ensure the integrity of the natural gas markets. The NYPSC maintained that it is essential to evaluate exposure on both NYMEX and the InterContinental Exchange (ICE), an ECM, and stated that the Commission's inability to directly regulate traders that use ICE exclusively creates a serious loophole in effective regulatory oversight of the financial markets. Concerned that traders will avoid regulatory oversight by trading exclusively on ICE, the NYPSC recommended that the Commission should monitor the migration of traders that currently utilize NYMEX to ICE as the exclusive means of trading natural gas contracts. The ISDA and the MFA voiced support for the proposal but raised concerns about the proposal's recordkeeping and reporting obligations. The ISDA stated its view that the proposal does not create additional recordkeeping or reporting obligations and requested clarification with respect to the scope of Regulation 1.35(a), which contains recordkeeping and reporting language similar to that in proposed Regulation 18.05. Further, the ISDA requested clarification that the records required to be retained under proposed Regulation 18.05 are subject to Regulation 1.31 retention requirements and consist of accurate records of positions and actual transaction documentation created in the ordinary course of business. The MFA requested that the Commission confirm that the current system of books and records maintained by traders in the normal course of business and in the format created in the normal course of business would meet the proposal's recordkeeping and retention requirements. The NYMEX voiced support for the intention underlying the proposal but commented that the purpose of the proposal can be met only by imposing identical requirements on linked trading facilities meeting specified criteria. NYMEX posited that the proposal, if implemented, would create an incentive for market participants to do all their trading at unregulated or non-transparent venues or to trade at a level below the reportable level on the regulated exchange. Further, NYMEX commented that the proposal was limited in effectiveness because of the anticipated infrequent use of the special call procedure; would impose a cost on the regulated exchanges because of the shift in trading activity; and would have adverse public policy consequences. NYMEX recommended that the Commission defer the amendments to Regulation 18.05 in favor of a more comprehensive legislative approach that would result in the implementation of reporting requirements on organized trading facilities that have triggered specified criteria. 15 15 As noted above, other commenters also recommended legislation action, i.e., to provide the Commission with authority for a LTRS with respect to trading in financial contracts in natural gas on non-reporting markets and to require entities that control large positions in the OTC market to report daily to the Commission. The Commission has carefully considered the comments submitted and has decided, for reasons cited herein and in the proposal, to amend the regulation as proposed. As previously stated, staff has interpreted Regulation 18.05 to include position and transaction data for non-reporting transactions and has received such information in response to requests made pursuant to the Regulation. Thus, the proposal to amend Regulation 18.05 merely makes explicit what has been implicit. NYMEX's comment that the proposal would lead market participants to move their trading activity to unregulated or non-transparent venues, or trade at a level below the reportable level on the regulated exchange in order to avoid the consequences of holding reportable positions, is highly speculative and, in the Commission's estimation, unlikely. As previously discussed, the amendments to Regulation 18.05 clarify existing authority and, accordingly, any “disincentive” for traders to trade on a regulated market already exists, with or without the amendments. In addition, the Commission sees little merit in following NYMEX's suggestion to defer in favor of a legislative approach. The Commission can control neither the timing nor the terms of legislation addressing reporting obligations on currently non-reporting markets, or even whether such legislation is enacted in the first instance. Should legislation in this area be enacted which expands the Commission's jurisdiction with respect to transactions that are currently non-reportable, further amendments to the regulation could be considered. With respect to the comments regarding the proposal's recordkeeping and reporting obligations, the Commission confirms that the amendments should not change current recordkeeping or reporting obligations, assuming that traders are currently keeping complete transaction records. Records required to be retained under Regulation 18.05 consist of accurate records of positions and actual transaction documentation created in the ordinary course of business. Thus, books and records that currently should be maintained by traders in the normal course of business and in the format created in the normal course of business would meet the regulation's recordkeeping requirements. Such records are subject to the Regulation 1.31 retention requirements. Finally, Regulation 18.05 does not alter or add to the Regulation 1.35(a) recordkeeping and reporting requirements. IV. Related Matters A. Cost Benefit Analysis Section 15(a) of the Act requires the Commission to consider the costs and benefits of its action before issuing a new regulation or order under the Act. By its terms, Section 15(a) does not require the Commission to quantify the costs and benefits of a new regulation or to determine whether the benefits of the regulation outweigh its costs. Rather, Section 15(a) simply requires the Commission to “consider the costs and benefits” of its action. Section 15(a) further specifies that the costs and benefits of the rule or order shall be evaluated in light of five broad areas of market and public concern:
(1)Protection of market participants and the public;
(2)efficiency, competitiveness, and financial integrity of futures markets;
(3)price discovery;
(4)sound risk management practices; and
(5)other public interest considerations. The Commission may, in its discretion, give greater weight to any one of the five enumerated areas of concern and may, in its discretion, determine that, notwithstanding its costs, a particular rule or order is necessary or appropriate to protect the public interest or to effectuate any of the provisions or to accomplish any of the purposes of the Act. The Commission's proposal contained an analysis of its consideration of these costs and benefits and solicited public comment thereon. As previously noted, NYMEX commented that the proposal, by adding another incentive for market participants to shift their trading activity from regulated and transparent venues to unregulated and non-transparent venues, would impose a cost on the regulated exchanges and would have adverse public policy consequences. NYMEX also questioned the extent of the benefits to be obtained from the proposal in light of the acknowledgement that special calls for information would continue to be made on an infrequent basis. The Commission believes, as it stated in the discussion of NYMEX's comments above, that attempting to discern what impact amended Regulation 18.05 will have on potential large traders, or what costs to the regulated exchanges would be associated with any shift in trading activity, is highly speculative. Because the amendments clarify existing authority, any “disincentive” for traders to trade on a regulated market already exists, with or without the amendments. Additionally, the Commission finds no merit in the contention that the extent of the benefits to be obtained from the amendments are questionable in light of the acknowledgement that special calls for information would continue to be made on an infrequent basis. The Commission is confident that such special calls will be made when deemed necessary and that the information provided in response to such special calls will assist the Commission in meeting its regulatory responsibilities. After consideration of the costs and benefits and the public comments received thereon, the Commission has determined to adopt the amendments to Regulation 18.05 set forth below. B. The Regulatory Flexibility Act The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 *et seq.* , requires that agencies consider the impact of their rules on small businesses. The Commission has previously determined that exchanges, futures commission merchants and large traders are not “small entities” for the purposes of the RFA. 16 The requirements related to the amended recordkeeping and reporting rule fall on large traders. Accordingly, the Acting Chairman, on behalf of the Commission, hereby certifies, pursuant to 5 U.S.C. 605(b), that the actions adopted herein will not have a significant economic impact on a substantial number of small entities. 16 47 FR 18618, 18618-21 (April 30, 1982). C. The Paperwork Reduction Act The Paperwork Reduction Act
(PRA)17 imposes certain requirements on Federal agencies, including the Commission, in connection with conducting or sponsoring any collection of information as defined by the PRA. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. In its proposal, the Commission noted that the proposed amendments would require traders with reportable positions to keep books and records showing all details concerning all positions and transactions in the commodity in which the trader is reportable and to furnish to the Commission, upon request, any pertinent information concerning such positions, transactions or activities in a form acceptable to the Commission and that this information is part of an approved collection of information. The Commission further noted that the proposed amendments would not result in any material modifications to this approved collection. Accordingly, for purposes of the PRA, the Commission certified that the proposed amendment did not impose any new reporting or recordkeeping requirements. 17 Public Law 104-13 (May 13, 1995). The Commission submitted the proposed rule amendments and their associated information collection requirements to the Office of Management and Budget
(OMB)for its review. No comments were received in response to the Commission's invitation in the notice of proposed rulemaking to comment on the information which would be required by the proposed rule amendments. List of Subjects in 17 CFR Part 18 Commodity futures, Reporting and recordkeeping requirements. Accordingly, 17 CFR Chapter I is amended as follows: PART 18—REPORTS BY TRADERS 1. The authority citation for part 18 is revised to read as follows: Authority: 7 U.S.C. 2, 4, 5, 6a, 6c, 6f, 6g, 6i, 6k, 6m, 6n, 12a and 19; 5 U.S.C. 552 and 552(b), unless otherwise noted. 2. Revise § 18.05 to read as follows: § 18.05 Maintenance of books and records.
(a)Every trader who holds or controls a reportable futures or option position shall keep books and records showing all details concerning all positions and transactions in the commodity:
(1)On all reporting markets;
(2)Over the counter and/or pursuant to Sections 2(d), 2(g) or 2(h)(1)-(2) of the Act or Part 35 of this chapter;
(3)On exempt commercial markets operating pursuant to Sections 2(h)(3)-(5) of the Act;
(4)On exempt boards of trade operating pursuant to Section 5d of the Act; and
(5)On foreign boards of trade.
(b)Every such trader shall also keep books and records showing all details concerning all positions and transactions in the cash commodity, its products and byproducts, and all commercial activities that the trader hedges in the futures or option contract in which the trader is reportable.
(c)The trader shall upon request furnish to the Commission any pertinent information concerning such positions, transactions, or activities in a form acceptable to the Commission. Issued in Washington, DC, this 22nd day of October, 2007, by the Commission. David A. Stawick, Secretary of the Commission. [FR Doc. E7-21077 Filed 10-25-07; 8:45 am] BILLING CODE 6351-01-P DEPARTMENT OF THE TREASURY Monetary Offices 31 CFR Part 92 RIN 1506-AA58 Assessment of Civil Penalties for Misuse of Words, Letters, Symbols, and Emblems of the United States Mint AGENCY: United States Mint, Treasury. ACTION: Final rule. SUMMARY: The United States Mint is adopting a new rule establishing procedures under which the United States Mint will implement and execute the provisions of 31 U.S.C. 333(c), which authorizes the Secretary of the Treasury to assess a civil penalty against any person who has misused the words, titles, abbreviations, initials, symbols, emblems, seals, or badges of the United States Mint. DATES: *Effective Date:* This final rule is effective November 26, 2007. FOR FURTHER INFORMATION CONTACT: James Adler, Senior Attorney, United States Mint, at
(202)354-7286. SUPPLEMENTARY INFORMATION: The United States Mint is adopting today the new regulation set forth below under 31 CFR part 92. I. Background Section 333(c) of title 31, United States Code, authorizes the Secretary of the Treasury to assess a civil penalty against any person who has misused the words, titles, abbreviations, initials, symbols, emblems, seals, or badges of the Department of the Treasury, including those of the United States Mint. The Secretary of the Treasury has delegated to the Director of the United States Mint the authority to enforce the civil penalty provisions of 31 U.S.C. 333(c) with respect to the misuse of United States Mint words, titles, abbreviations, initials, symbols, seals, trademarks, and badges, and with respect to the misuse of Department of the Treasury words, titles, abbreviations, initials, symbols, seals, trademarks, and badges when in connection with activities related to United States Mint operations and programs. This rule establishes procedures that the United States Mint will follow to carry out that authority and to ensure that those assessed a civil penalty under 31 U.S.C. 333(c) are accorded due process. These procedures are based on the procedures of the Department of the Treasury at 31 CFR part 27. II. Notice of Proposed Rulemaking This final rule is based on the notice of proposed rulemaking published Wednesday, January 12, 2005 (the “NPRM”) (70 FR 2081). The NPRM sought public comment on the proposed rule. The comment period for the NPRM ended on February 18, 2005. The United States Mint received 17 comments from members of the public, businesses and trade associations. The Federal Trade Commission also submitted a staff comment. III. Summary of Comments Eight of the comments were from members of the public. Seven of the eight expressed support for the United States Mint's proposed regulation. One of these comments objected to the use of names by companies that “attempt to confuse the public into the belief that the product is being sold and promoted by the U.S. Mint.” Another expressed the opinion, “You should come down as hard as possible on these companies.” A third stated, “I strongly recommend the proposal maintained be adopted that would prevent firms from cashing in on U.S. Mint.” A fourth asserted that it is “about time the U.S. Mint played hardball and protected its products. Use of Mint products to make money by misleading new collectors gives a black eye to collecting.” The eighth submission enclosed a newspaper article on the proposed regulation without comment. A. Discussion of Substantive Comments From the Public Substantive comments from the public included a request that the United States Mint not “limit penalties to audience size” and a suggestion that “civil penalties must include a clause for full restitution for those customers who purchased the items that were marketed in violation of the statute.” As to the comment on restitution, we note that the proposed regulation would have permitted the imposition of a “civil monetary penalty and/or civil or equitable remedy.” Upon further examination of 31 U.S.C. 333(c) and the statute's legislative history, however, we have determined that the term “civil penalty” in this regulation should refer only to a monetary penalty payable to the Treasury. Accordingly, the final regulation will permit an assessing official to impose a civil monetary penalty on a person “who violates the provisions of paragraph
(a)of this section.” The phrase “civil penalty” is defined in the regulation to mean “(1) A civil monetary penalty.” Consistent with our view of the underlying statutory authority, therefore, the final regulation will not permit the United States Mint to order restitution as a remedy. This, of course, is in no way intended to limit any relief to which a person who is injured by the misleading use of United States Mint names or symbols may be entitled in private litigation or through an enforcement action by another Federal or state agency. With regard to the comment that the United States Mint not “limit penalties to audience size,” the proposed regulation's operative clause with regard to the amount of penalty imposed for a violation reads as follows:
(c)*Civil penalty* . The assessing official may impose a civil penalty on any person who violates the provisions of paragraph
(a)of this section. The amount of a civil penalty shall not exceed $5,000 for each and every use of any material in violation of paragraph
(a)of this section, except that such penalty shall not exceed $25,000 for each and every use if such use is in a broadcast or telecast. These provisions do not limit penalties to “audience size,” but are based on each misuse of material and may be as high as $25,000 for each and every misuse if the misuse is in a broadcast or telecast. In reviewing the public comments on civil penalties, and the role of the examining official in recommending civil penalties to the assessing official, we concluded that the proposed rule did not make it clear that the Initial Notice of Assessment would include a proposed civil monetary penalty. We have clarified the provisions of § 92.15 to provide that the Initial Notice of Assessment will include a statement of the proposed penalty. B. Discussion of Substantive Comments From Businesses, Trade Associations and Others Generally Six of the comments that the United States Mint received were from small businesses involved in the coin business. Each of these commenters expressed concern over the proposed regulation, with several expressing direct opposition. Two expressed general support for the regulation. 1. Fairness Comments The United States Mint acknowledges the perception of several commenters that the proposed regulation may not be fairly enforced because the United States Mint sells United States coinage and, under the regulation, would have the power to take action against private businesses whose advertisements and solicitations misuse the names, symbols and indicia of the United States Mint or the United States Treasury Department. Several commenters expressed concern about the role of the United States Mint's Director as the decision maker under the regulation. One commenter raised the issue of whether the United States Mint's Director can be considered an impartial decision maker. Another commenter alleged that the regulations were unfair in that they gave the United States Mint, a competitor in the marketing of legal tender coinage, discretion to assess civil penalties against its own competitors. This, it stated, “creat[ed] a situation that is intrinsically unfair and open to abuse.” We note, however, that there is no inherent conflict of interest in having the United States Mint policing the improper use of the United States Mint's and the Treasury Department's names and symbols. The owner of intellectual property has the responsibility of protecting that property from improper use; this doctrine is codified and well recognized in the body of Federal intellectual property law. Additionally, no United States Mint or Treasury Department official who could have a role in the execution of the regulation has any official duty that inherently conflicts with the interests that the regulation is designed to protect. The authority of a Government agency to assess fines, in accordance with the authority and procedures established under law, naturally requires officials of that agency to act fairly, impartially, and judiciously. Every United States Mint and Treasury Department official—like all Government officials—has a duty to avoid conflicts of interest, act impartially, not give preferential treatment, protect and conserve public property, and adhere to the law. 5 CFR 2635.101. These duties are not inconsistent with these officials' fiduciary responsibility to protect public funds. Although it is true that the United States Mint generates revenues through the sale of numismatic items, the United States Mint is a Federal agency—not a commercial enterprise. By law, any amount in the United States Mint Public Enterprise Fund that is determined to be in excess of the amount required by the Fund, including the proceeds of fines assessed under the regulation, shall be transferred to the Treasury for deposit as miscellaneous receipts. See 31 U.S.C. 5136. Accordingly, fines paid under the regulation are not analogous to profit generated by a private company; they do not accrue to the benefit of either the United States Mint or its officials but, rather, to the General Treasury. 2. Economic Interest Comments One commenter stated, “These regulations will be enforced by government officials who have an economic interest in the results of the enforcement proceedings.” Contrary to the comment, neither the examining official nor the assessing official will have any economic interest in the results of enforcement proceedings under this subpart. Employee compensation for all United States Mint employees is not based upon the United States Mint's coin sales or revenue. The United States Mint has performance awards and incentives that do affect compensation; however, these are based on criteria relating to the United States Mint's efficiency of operations and reductions in overhead and other costs. Civil penalties assessed under this regulation affect none of these criteria. 3. Competition Comments Several commenters expressed the concern that the United States Mint would use its enforcement ability under the regulation in an unfair manner. One stated, “The regulation gives the Mint too much power to unfairly pick and choose the competitors it wishes to punish.” Another stated, “We are concerned about the Mint's path on trying to eliminate competition with regulations and unfair enforcement actions.” The United States Mint, in proposing and enacting these regulations, does not seek to “eliminate competition” but, rather, seeks to reduce consumer confusion and deceptive practices. Under Federal law, the United States Mint is the only entity permitted to produce United States coinage. As a Government monopoly, the United States Mint does not have competition in producing legal tender coinage for the United States. The purpose of the proposed rule, therefore, is not to eliminate competition but, instead, to protect consumers, collectors and the public from the improper use of Treasury and United States Mint names and symbols. This protection is necessary because third parties increasingly have engaged in marketing practices that have the potential to mislead consumers by using the United States Mint's and Treasury Department's name and symbols with products not produced by either the United States Mint or the Treasury Department. More specifically, the United States Mint is aware of advertisements that have used the United States Mint's name and symbols in marketing tokens and medals not produced by the United States Mint. These tokens and medals are designed to resemble the designs of United States legal tender coinage despite the fact that tokens and medals have no status as legal tender in the United States. The United States Mint is also aware that other parties have acquired coinage and numismatic items produced by the United States Mint, have altered them (usually by plating and coloring them), and then have advertised the resulting items for sale as products of the United States Mint. We view these practices as being deceptive because, in both instances, the use of the United States Mint's and the Treasury Department's names and symbols in these contexts conveys the false impression that the advertisement, product or activity is endorsed, sponsored or affiliated with the United States Mint or the Treasury Department. The goal of the United States Mint in enacting these regulations is simply to prevent the deceptive misuse of the Treasury Department's and the United States Mint's names and symbols by third parties. 4. Comments on the Use of Disclaimers Two commenters also expressed concern over the provision in the proposed regulations that disclaimers will not be considered when determining whether an advertisement is misusing a United States Mint or Treasury Department name or symbol. One commented, “If a company has an advertisement for the sale of U.S. Mint coins, but clearly states that it is not affiliated, endorsed or authorized by the U.S. Mint, the regulation states that the disclaimers will be ignored. This makes no sense.” Similarly, the Federal Trade Commission's staff comment, in part, addressed the proposed rule's treatment of disclaimers of affiliation and indicated, “The proposed rule's treatment of disclaimers of affiliation in this process may raise some potential legal and policy issues.” The comment then set forth the FTC's approach to reviewing advertising claims. We note, however, that the statute upon which the regulation is based specifically addresses disclaimers. It states the following:
(b)Treatment of Disclaimers. Any determination of whether a person has violated the provisions of subsection
(a)shall be made without regard to any use of a disclaimer of affiliation with the United States Government or any particular agency or instrumentality thereof. 31 U.S.C. 333(b). Given the clear requirement in 31 U.S.C. 333(b) that a determination of a violation be made without regard to any use of a disclaimer of affiliation, this requirement cannot be removed from the regulation. We believe, however, that it is appropriate to consider the use of a disclaimer as a factor in determining the amount of any civil penalty that the Assessing Official imposes under the regulation. If the disclaimer is clear and prominent and is likely to be noticed by a consumer and is not contradicted or confused by any claims made in the materials found to be in violation of 31 U.S.C. 333, then the Examining Official may propose, and the Assessing Official may assess, a civil penalty in an amount lower than that which would otherwise be appropriate, including, where warranted, a penalty in a nominal amount. C. Discussion of Substantive Comments From Trade Associations in Particular The remaining comments were submitted by two trade associations. The Magazine Publishers of America, while supporting the proposed rule, indicated its concern “that the proposed rule may inadvertently impose liability on publishers and other media that, through no fault of their own, disseminate false advertisements.” The Magazine Publishers of America requested that an exception be included in the final rule “to exempt the media from fines * * * associated with false advertising.” The Magazine Publishers of America also cited several Federal statutes, court decisions and state statutes in which media publishers were not held responsible for the content of advertisements from parties who purchased advertising space in their publications. After considering these comments, we concur that publishers of newspapers, magazines, and other broadcasters of media, who merely sell advertising space to third parties should not be held responsible for ensuring compliance with the rule proposed by the United States Mint. The rule focuses on the person who “uses” the operable words, letters, symbols, or emblems in connection with, or as part of, an advertisement, solicitation, business activity, or product; the rule does not focus on a party who makes space available to the using person. Accordingly, we believe that the rule could not be applied to assess a penalty against a publisher or broadcaster that merely sells space and has no responsibility for the substantive content of an advertisement. However, we do not believe that amending the rule to excuse publishers or broadcasters from liability under all possible circumstances is appropriate. Rather, in each case, the examining and assessing officials will look to the extent of the publisher's or broadcaster's participation in the preparation of the challenged advertisement, solicitation, or business activity, and whether the publisher or broadcaster knew or should have known during that preparation process that the advertisement, solicitation, or business activity included improper uses of names, emblems, or symbols covered by 31 U.S.C. 333 and the rule. Finally, we note that the same definition of “person” has appeared at 31 CFR 27.2(f) (the Treasury Department regulation implementing 31 U.S.C. 333) since 1997 with no reported action against any publisher or broadcaster. The other trade association submitting comments was the Industry Council for Tangible Assets (ICTA), a trade association for rare coin and precious metals dealers. In summary, the ICTA believes the proposed regulations:
(1)“exceed the mandate of 31 U.S.C. 333 by adding ‘trademark' to the scope of the regulation”;
(2)“[are] overly broad and will deny due process to those who directly compete with the Mint”;
(3)“raise serious concerns about violations of commercial free speech protected by the first amendment”; and
(4)“are flawed in their failure to allow for a reasonable period to cure alleged violations.” The ICTA comments also indicate that “existing law provides the Mint with adequate remedies for perceived problems and there are more appropriate regulations that could be proposed to accomplish the goals of the Mint.” The Professional Numismatics Guild sent a letter expressing its support for the comments made by the ICTA. 1. Use of the Word “Trademark” in the Definition of “Symbol” The ICTA asserts that the United States Mint has “exceeded the mandate of 31 U.S.C. 333 by adding ‘trademark' to the scope of the regulation.” It also asserts that United States Mint's definition of the phrase “symbol” under the regulation “facially appears to go beyond the scope of 31 U.S.C. 333(c)” as it includes “a trademark, designation of origin, or mark of identification.” ITCA Comment at 13. An examination of the statute, 31 U.S.C. 333, shows that the word “symbol” occurs in two places in subsection
(a)although the statute does not define the term. The statute uses the term “symbol” in section
(a)stating the following: No person may use, in connection with, or as a part of, any advertisement, solicitation, business activity or product, whether alone or with other words, letters, *symbols* or emblems. * * * The United States Mint's proposed regulation closely tracked the language of the statute in subsection (a). The United States Mint's proposed regulation, however, defined the term “symbol” as “any letter, word, number, picture, design, graphic or any combination thereof used by the United States Mint or the Treasury Department as a trademark, designation of origin, or mark of identification.” See Proposed Regulation, section 92.12(i). It is well-established that words in a statute are to be given their common, ordinary meaning. *See Federal Deposit Ins. Corp.* v. *Meyer* , 114 S. Ct. 996, 1000 (1994); *Director, Office of Workers' Compensation Programs* v. *Greenwich Collieries* , 114 S. Ct. 2251, 2255 (1994). The word “symbol” has been commonly defined as “[s]omething that represents something else by association, resemblance, or convention, especially a material object used to represent something invisible.” American Heritage Dictionary of the English Language (4th ed. 2006). Similarly, under the Lanham Trademark Act, trademarks “includ[e] any word, name, symbol, or device, or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others.” 15 U.S.C. 1127. Because of the close association between the word “symbol” and the definition of trademark, we believe including trademarks as part of the definition of symbol in the final rule is a reasonable construction of the statute. *See Chevron U.S.A., Inc.* v. *Natural Resources Defense Council, Inc.* , 467 U.S. 837, 844
(1984)(noting that “considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer”). The United States Mint, however, has decided to modify slightly the definition of the word “symbol” in the final rule for clarity. Hence, “symbol” is now defined as “any design or graphic used by the United States Mint or the Treasury Department to represent themselves or their products.” It further clarifies that a “design or graphic may include
(1)a trademark, designation of origin, or mark of identification, or
(2)a stylized depiction comprising letters, words, or numbers.” 2. Assertion That the Proposed Rule Is “Overly Broad” and “Violates Due Process” The ICTA, secondly, asserts that the proposed rule “[is] overly broad and will deny due process to those who directly compete with the Mint.” After reviewing the proposed regulation and the enabling statute, we believe the regulation is narrowly drawn and is not overly broad. The proposed regulation closely tracks each of the elements of the enabling statute. The only new material sets forth the procedures being adopted for imposing a civil penalty. These procedures include written notice of any potential violations, an opportunity to respond, consideration of any response, a written decision with an evaluation of each penalty factor, and a right of appeal to any person found to have violated the regulation. These procedures, in our view, fully comply with applicable due process requirements. 3. Concern That the Rule Violates the First Amendment The ITCA commented that the proposed regulation “threaten[s] the freedom of commercial speech under the First Amendment.” In particular, the ITCA indicated that “the regulations fail the Supreme Court's *Central Hudson* test because they are over broad.” In *Central Hudson Gas* v. *Public Service Comm. of New York* , 447 U.S. 557, 563-64 (1980), however, the United States Supreme Court noted that “there can be no constitutional objection to the suppression of commercial messages that do not accurately inform the public about lawful activity.” The Court also made it clear that “[t]he government may ban forms of communication more likely to deceive the public than to inform it” Id. (citing *Friedman* v. *Rogers* , 440 U.S. 1, 13, 15-16 (1979); *Ohralik* v. *Ohio State Bar Assn.* , 436 U.S. 447, 464-65 (1978)). In light of this passage from *Central Hudson* , we do not believe the regulation violates any commercial free speech right under the First Amendment. To the contrary, the regulation implements a law that functions precisely in the manner to which the *Central Hudson* Court stated that “there could be no constitutional objection.” Specifically, 31 U.S.C. 333 effectively “ban[s] forms of communication more likely to deceive the public than to inform it”: the misuse of Department of the Treasury or United States Mint names, titles, abbreviations, initials, symbols, or emblems in a manner that conveys a false impression. 4. Concern About Providing a Reasonable Period To Cure Alleged Violations The ICTA asserted that the proposed regulations “are flawed in their failure to allow for a reasonable period to cure alleged violations.” However, the statute does not provide for, nor does it require the agency to afford to an offending party, a cure period. Indeed, we note that another part of the statute (31 U.S.C. 333(d)) provides for criminal penalties for precisely the same offenses over which the agency would exercise civil penalty authority. Although a notice of assessment naturally would put an alleged offending party on notice that it immediately should consider steps to cure the alleged misuse, the inherent purpose for the statute is to allow the agency to penalize the offending party for the misuse. In light of this concern, however, the United States Mint has modified the final regulation slightly so that it expressly requires the examining and assessing officials to consider the repeated nature of the misuse in determining whether, and to what extent, a penalty should be imposed against an offending party. D. Comments on Impartiality Some of the commenters pointed out that if the Government seeks to infringe upon a citizen's liberty, it “always has the obligation of providing a neutral decision-maker—one who is not inherently biased against the individual or who has personal interest in the outcome.” *Tumey* v. *Ohio* , 273 U.S. 510, 532 (1927). We acknowledge the commenters' concern about impartiality, but conclude that the proposed regulations fully comply with the agency's obligations in this respect. In general, “[t]he mere fact that an administrative or adjudicative body derives a financial benefit from fines or penalties that it imposes is not in general a violation of due process * * *.” *Van Harkin* v. *City of Chicago* , 103 F.3d 1346 at 1348 (7th Cir. 1997) (citing *Dugan* v. *Ohio* , 277 U.S. 61 (1928)); *see Commonwealth of the Northern Mariana Islands* v. *Kaipat* , 94 F.3d 574, 580-81 (9th Cir. 1996); *Doolin Security Savings Bank* v. *Federal Deposit Ins. Corp.* , 53 F.3d 1395, 1405-07 (4th Cir. 1995). Moreover, in Doolin, the Fourth Circuit recognized that, although most Federal agencies have some form of institutional bias, this does not make them incapable of disinterested adjudication of disputes. 53 F.3d at 1407. We do not believe the regulation raises issues of impartiality. First, the Director of the United States Mint has no personal or official economic interest in the results of any enforcement action under this regulation. Pursuant to the United States Mint Public Enterprise Fund
(PEF)statute, 31 U.S.C. 5136, all receipts from fines assessed under the regulation would be deposited in the PEF and the Secretary of the Treasury would transfer these amounts, along with regular United States Mint seigniorage and profits, to the General Fund as miscellaneous receipts. As miscellaneous receipts in the Treasury—the drawing of funds from which are subject to appropriation by Congress—neither the Secretary of the Treasury, nor the Director of the Mint could be subject to “possible temptation * * * when [their] executive responsibilities * * * may make [them] partisan to maintain the high level of contribution” from the assessment process provided for under the regulation. *Cf. Ward* v. *Village of Monroeville* , 409 U.S. 57, 60 (1972). Moreover, the amounts involved would nonetheless render any ostensible temptation inconsequential because the relatively small amounts that the United States Mint could be expected to receive in fines payable under 31 U.S.C. 333 would be *de minimis* when compared to the recent amounts ($600-800 million) that the United States Mint annually has transferred to the General Fund. *See* 2006 United States Mint Annual Report, at 17. Accordingly, for the reasons described above, as well as in paragraphs III(b)(1) and (2), the United States Mint has no intrinsic bias that may affect its ability to adjudicate matters under this regulation in a fair and objective manner. IV. Additional Amendments Upon additional review and consideration of the provisions outlined in the interim rule, the agency has removed from the regulation sections 92.16(d)(3) & (4), which provide for agency counsel review. We also made conforming changes to section 92.17(a). The agency determined that these steps in the examination and assessment process are best addressed through internal procedures. We also have made minor clarifying changes throughout the final rule. V. Procedural Requirements This final rule is not a significant regulatory action for the purposes of Executive Order 12866. While a proposed rule was published for public comment, the rule establishes agency practice and procedure, and prior notice and the opportunity for public comment were not required pursuant to 5 U.S.C. 553(b)(A) (or any other law). For this reason, a Regulatory Flexibility Act analysis is not required. *See* 5 U.S.C. 604. Nonetheless, it is hereby certified that this rule will not have a significant economic impact on a substantial number of small entities. Any imposition of a civil penalty on a small business entity flows directly from the authorizing statute, 31 U.S.C. 333. Paperwork Reduction Act The final rule does not require new “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995. The only information collected would be that provided voluntarily by persons sent Initial Notices of Assessment under the regulation. VI. Format The format of the final rule is generally consistent with the format of the rule proposed in the NPRM. List of Subjects in 31 CFR Part 92 Administrative practice and procedure, Advertising, Consumer protection, Currency, Penalties, Seals and insignia, Signs and symbols, Trademarks. Text of Rule For the reasons set forth in the preamble, the United States Mint amends 31 CFR part 92 as follows: PART 92—UNITED STATES MINT OPERATIONS AND PROCEDURES 1. The authority citation for part 92 is revised to read as follows: Authority: 5 U.S.C. 301, 31 U.S.C. 321 and 333. 2. The heading for part 92 is revised to read as set forth above. 3. Add a subpart heading before § 92.1 to read as follows: Subpart A—Numismatic Operations 4. Add a subpart heading before § 92.5 to read as follows: Subpart B—Availability of Records 5. Add a new Subpart C (§§ 92.11 through 92.18) to read as follows: Subpart C—Assessment of Civil Penalties for Misuse of Words, Letters, Symbols, or Emblems of the United States Mint Sec. 92.11 Purpose. 92.12 Definitions. 92.13 Assessment of civil penalties. 92.14 Initiation of action. 92.15 Initial notice of assessment. 92.16 Written response. 92.17 Final action. 92.18 Judicial review. Subpart C—Assessment of Civil Penalties for Misuse of Words, Letters, Symbols, or Emblems of the United States Mint § 92.11 Purpose.
(a)The procedures in this subpart implement the provisions of 31 U.S.C. 333(c), which authorize the Secretary of the Treasury to assess a civil penalty against any person who has misused the words, titles, abbreviations, initials, symbols, emblems, seals, or badges of the United States Mint in violation of 31 U.S.C. 333(a).
(b)The procedures in this subpart do not apply to the extent that the Secretary of the Treasury, the Director of the United States Mint, or their authorized designees have specifically granted to the person express permission, in writing, to manufacture, produce, sell, possess, or use the words, titles, abbreviations, initials, symbols, emblems, seals, or badges in a contract, agreement, license, letter, memorandum, or similar document.
(c)The procedures in this subpart are limited to actions initiated by the United States Mint to enforce the provisions of 31 U.S.C. 333. The procedures herein do not affect the provisions of 31 CFR Part 27. Therefore, this subpart shall not be construed as the exclusive means for the Secretary of the Treasury to enforce 31 U.S.C. 333 insofar as a covered misuse affects the United States Mint. § 92.12 Definitions.
(a)*Assessing official* means the Director of the United States Mint or his designee.
(b)*Examining official* means an employee of the United States Mint appointed by the Director of the United States Mint (or an employee of the Treasury Department appointed by the Director of the United States Mint with the concurrence of the head of that employee's organization), to administer the procedures in this subpart in a particular case and to propose findings and recommendations in that case to the assessing official. The examining official must be:
(1)An employee of the Treasury Department in the grade of GS-15 or higher; and
(2)Capable of examining the matter without actual or apparent conflict of interest.
(c)*Broadcast* or *telecast* means widespread dissemination by electronic transmission or method, whether audio and/or visual.
(d)*Civil penalty* means a civil monetary penalty
(e)*Date of offense* means the later of:
(1)The date that the misuse occurred;
(2)The date that the misuse had the effect of conveying the false impression that the activity was associated with or approved, endorsed, sponsored or authorized by the United States Mint or its officers or employees; or
(3)If the violation is a continuing one, the date on which the misuse of the words, titles, abbreviations, initials, symbols, emblems, seals, or badges protected by 31 U.S.C. 333 or the procedures in this subpart last occurred.
(f)*Days* means calendar days, unless otherwise stated.
(g)*Person* means an individual, partnership, association, corporation, company, business, firm, manufacturer, or any other organization, entity, or institution.
(h)*Respondent* means a person named in an Initial Notice of Assessment.
(i)*Symbol* means any design or graphic used by the United States Mint or the Treasury Department to represent themselves or their products. A design or graphic may include
(1)A trademark, designation of origin, or mark of identification, or
(2)A stylized depiction comprising letters, words, or numbers. § 92.13 Assessment of civil penalties.
(a)*General rule* . The assessing official may impose a civil penalty on any person when the following two conditions are met:
(1)That person uses in connection with, or as a part of, any advertisement, solicitation, business activity, or product, whether alone or with other words, letters, symbols, or emblems—
(i)The words “Department of the Treasury,” “United States Mint,” or “U.S. Mint”;
(ii)The titles “Secretary of the Treasury,” “Treasurer of the United States,” “Director of the United States Mint,” or “Director of the U.S. Mint”;
(iii)The abbreviations or initials of any entity or title referred to in paragraph (a)(1)(i) or (a)(1)(ii) of this section;
(iv)Any symbol, emblem, seal, or badge of an entity referred to in paragraph (a)(1)(i) of this section (including the design of any envelope, stationery, or identification card used by such an entity); or
(v)Any colorable imitation of any such words, titles, abbreviations, initials, symbols, emblems, seals, or badges; and
(2)That person's use is in a manner that could reasonably be interpreted or construed as conveying the false impression that such advertisement, solicitation, business activity, or product is in any manner approved, endorsed, sponsored, authorized by, or associated with the United States Mint, or any officer, or employee thereof.
(b)*Disclaimers* . Any determination of whether a person has violated the provisions of paragraph
(a)of this section shall be made without regard to any use of a disclaimer of affiliation with the United States Government or any particular agency or instrumentality thereof.
(c)*Civil penalty* . The assessing official may impose a civil penalty on any person who violates the provisions of paragraph
(a)of this section. The amount of a civil penalty shall not exceed $5,000 for each and every use of any material in violation of paragraph
(a)of this section, except that such penalty shall not exceed $25,000 for each and every use if such use is in a broadcast or telecast.
(d)*Time limitations* .
(1)Civil penalties imposed under the procedures in this subpart must be assessed before the end of the three-year period beginning on the date of offense.
(2)The assessing official may commence a civil action to recover or enforce any civil penalty imposed in a Final Notice of Assessment issued pursuant to § 92.17 at any time before the end of the two-year period beginning on the date of the Final Notice of Assessment. If judicial review of the Final Notice of Assessment is sought, the two-year period begins to run from the date that a final and unappealable court order is issued.
(e)*Criminal Proceeding* . No civil penalty may be imposed under the procedures in this subpart with respect to any violation of paragraph
(a)of this section after a criminal proceeding on the same violation has been commenced by indictment or information under 31 U.S.C. 333(d). § 92.14 Initiation of action.
(a)When an employee of the United States Mint learns of or discovers a potential violation of 31 U.S.C. 333 or this subpart, he or she will refer the matter, with all available evidence, to the assessing official.
(b)The assessing official will consider relevant factors when determining whether to initiate an action to impose a civil penalty under the procedures in this subpart. Those factors may include, but are not limited to, the following:
(1)The scope of the misuse;
(2)The purpose and/or nature of the misuse;
(3)The extent of the harm caused by the misuse;
(4)The circumstances of the misuse;
(5)The commercial benefit intended to be derived from the misuse; and
(6)The repeated nature of the misuse.
(c)If the assessing official decides to initiate an action to impose a civil penalty under the procedures in this subpart, he or she will, in writing:
(1)Appoint an examining official; and
(2)Delegate to the examining official the authority to prepare, sign, and serve an Initial Notice of Assessment on behalf of the assessing official. § 92.15 Initial notice of assessment. The examining official shall review all immediately available evidence on the matter; determine a proposed civil penalty based on the factors listed under § 92.16(d)(2)(iii); and prepare and serve an Initial Notice of Assessment by United States mail or other means upon the person believed to be in violation of § 92.13 and otherwise subject to a civil penalty. The notice shall provide the name and telephone number of the examining official, who can provide information concerning the notice and the procedures in this subpart. The notice shall include the following:
(a)A specific reference to the provisions of § 92.13 violated;
(b)A concise statement of the facts that support the conclusion that such a violation occurred;
(c)The amount of the civil penalty proposed and the maximum amount of the potential civil penalty that the assessing official could impose;
(d)A notice informing the person alleged to be in violation of § 92.13 that he or she:
(1)May, within 30 days of the date of the notice, pay the proposed civil penalty, thereby waiving the right to make a written response under § 92.16 and to seek judicial review under § 92.18:
(i)By electronic funds transfer
(EFT)in accordance with instructions provided by the examining official in the Initial Notice of Assessment; or
(ii)By means other than EFT only with the written approval of the assessing official;
(2)May make a written response in accordance with § 92.16 within 30 days of the date of the notice addressing, as appropriate:
(i)Why a civil penalty should not be imposed; and
(ii)Why a civil penalty should be in a lesser amount than proposed.
(3)May be represented by an attorney or other representative, provided that a designation of representative signed by the person alleged to be in violation is received by the examining official; and
(4)May request, within 20 days of the date of the notice, a copy of or opportunity to review any documents and/or other evidence that the United States Mint compiled and relied on in determining to issue the notice (the assessing official reserves the right to assert privileges available under law and may decline to disclose certain documents and/or other evidence protected by such privileges; however, any documents or other evidence withheld from disclosure shall be expunged from the record and shall not be considered by the examining and assessing officials in arriving at their respective recommendations and decisions); and
(e)An advisement of the following:
(1)If no written response is received within the time allowed in § 92.16(b), a Final Notice of Assessment may be issued without a presentation by the person;
(2)If a written response has been made and the examining official deems it necessary, the examining official may request, orally or in writing, additional information from the respondent;
(3)A Final Notice of Assessment may be issued in accordance with § 92.17 requiring that the proposed civil penalty be paid;
(4)A Final Notice of Assessment is subject to judicial review in accordance with 5 U.S.C. 701 *et seq.* ; and
(5)All submissions sent in response to the Initial Notice of Assessment must be transmitted to the address specified in the notice and include the name, address, and telephone number of the respondent. § 92.16 Written response.
(a)*Form and contents* .
(1)The written response submitted by a person pursuant to § 92.15(d)(2) must provide the following:
(i)A reference to and specific identification of the Initial Notice of Assessment involved;
(ii)The full name of the person against whom the Initial Notice of Assessment has been made;
(iii)If the respondent is not a natural person, the name and title of the officer authorized to act on behalf of the respondent; and
(iv)If a representative of the person named in the Initial Notice of Assessment is filing the written response, a copy of the duly executed designation as representative.
(2)The written response must admit or deny each violation of § 92.13 set forth in the Initial Notice of Assessment. Any violation not specifically denied will be presumed to be admitted. Where a violation is denied, the respondent shall specifically set forth the legal or factual basis upon which the allegation is denied. If the basis of the written response is that the respondent is not the person responsible for the alleged violation, the written response must set forth sufficient information to allow the examining and assessing officials to determine the truth of such an assertion. The written response should include any and all documents and other information that the respondent believes should be a part of the administrative record on the matter.
(b)*Time* .
(1)Except as provided in paragraph (b)(2) of this section, any written response made under this section must be submitted not later than 30 days after the date of the Initial Notice of Assessment.
(2)If a request for documents or other evidence is made pursuant to § 92.15(d)(4), the written response must be submitted not later than 20 days after the date of the United States Mint's response to the request. (3)(i) In computing the number of days allowed for filing a written response under this paragraph, the first day counted is the day after the date of the Initial Notice of Assessment is issued. If the last date on which the response is required to be filed by this paragraph is a Saturday, Sunday or Federal holiday, the response will be due on the next business day after that date.
(ii)If a response is transmitted by United States mail, it will be deemed timely filed if postmarked on or before the due date.
(4)The examining official may extend the period for making a written response under paragraphs (b)(1) and (b)(2) of this section for up to ten days for good cause shown. Requests for extensions beyond ten days must be approved by the assessing official and must be based on good cause shown. Generally, failure to obtain representation in a timely manner will not be considered good cause.
(c)*Filing* . The response may be sent by personal delivery, United States mail or commercial delivery. A written response transmitted by means other than United States mail will be considered filed on the date received at the address specified in the Initial Notice of Assessment.
(d)*Review and Recommendation* . The examining official will fully consider the facts and arguments submitted by the respondent in the written response, any other documents filed by the respondent pursuant to this subpart, and the evidence in the United States Mint's record on the matter. If the respondent waives the right to submit a written response in accordance with § 92.15(d)(1), or declines to submit a written response by the end of the 30-day response period, the examining official will fully consider the evidence in the United States Mint's record on the matter.
(1)In fully considering the matter, the examining official will not consider any evidence introduced into the record by the United States Mint after the date of the Initial Notice of Assessment unless and until the respondent has been notified that such additional evidence will be considered, and has had an opportunity to request, review and comment on such evidence.
(2)The examining official will prepare a concise report, addressed to the assessing official, which will contain the following:
(i)The entire administrative record on the matter, including all information provided in or with a written response timely filed by the respondent and any additional information provided pursuant to § 92.15(e)(2), as well as all evidence upon which the Initial Notice of Assessment was based, and any additional evidence as provided for in § 92.16(d)(1).
(ii)A finding, based on the preponderance of the evidence, as to each alleged violation specified in the Initial Notice of Assessment;
(iii)For each violation that the examining official determines to have occurred, a recommendation as to the appropriate amount of a civil penalty to be imposed which, upon additional consideration of the evidence, may be the same as, more than, or less than the amount initially proposed by the examining official pursuant to § 92.15. In making this recommendation, the examining official will consider all relevant factors including, but not limited to, the following:
(A)The scope of the misuse;
(B)The purpose and/or nature of the misuse;
(C)The extent of the harm caused by the misuse;
(D)The circumstances of the misuse;
(E)The commercial benefit intended to be derived from the misuse; and
(F)The repeated nature of the misuse.
(iv)If the examining official determines that a violation has occurred, a proposed Final Notice of Assessment that incorporates his or her findings and recommendations.
(v)Any additional information or considerations that the assessing officer should consider in a decision whether to issue a Final Notice of Assessment under § 92.17. § 92.17 Final action.
(a)In making a final determination whether to impose a penalty, the assessing official shall take into consideration the entire report prepared by the examining official. Although the assessing official should accord appropriate weight to the findings and recommendations of the examining official, the assessing official is not bound by them. The assessing official may approve, disapprove, modify, or substitute any or all of the examining official's findings and recommendations if, in his or her judgment, the evidence in the record supports such a decision. The assessing official will determine whether:
(1)The facts warrant a conclusion that no violation has occurred; or (2)(i) The facts warrant a conclusion that one or more violations have occurred; and
(ii)The facts and violations found justify the conclusion that a civil penalty should be imposed.
(b)If the assessing official determines that no violation has occurred, the official shall promptly send a letter indicating that determination to the person served with an Initial Notice of Assessment and to any designated representative of such person.
(c)If the assessing official determines that a violation has occurred:
(1)The assessing official shall issue a Final Notice of Assessment to the person served with an Initial Notice of Assessment and to any designated representative of such person.
(2)The assessing official may, in his or her discretion:
(i)Impose a civil penalty;
(ii)Not impose a civil penalty; or
(iii)Impose a civil penalty and suspend the payment of all or some of the civil penalty, conditioned on the violator's future compliance with 31 U.S.C. 333.
(3)If a civil penalty is imposed under § 92.17(c)(2)(i) or (iii), the assessing official shall determine the appropriate amount of the penalty in accordance with 31 U.S.C. 333(c)(2). In determining the amount of a civil penalty, the assessing official will consider relevant factors including, but not limited to, the following:
(i)The scope of the misuse;
(ii)The purpose and/or nature of the misuse;
(iii)The extent of the harm caused by the misuse;
(iv)The circumstances of the misuse;
(v)The commercial benefit intended to be derived from the misuse; and
(vi)The repeated nature of the misuse.
(4)The Final Notice of Assessment shall:
(i)Include the following:
(A)A specific reference to each provision of § 92.13 found to have been violated;
(B)A concise statement of the facts supporting a conclusion that each violation has occurred;
(C)An analysis of how the facts and each violation justifies the conclusion that a civil penalty should be imposed; and
(D)The amount of each civil penalty imposed and a statement as to how the amount of each penalty was determined; and
(ii)Inform the person of the following:
(A)Payment of a civil penalty imposed by the Final Notice of Assessment must be made within 30 days of the date of the notice;
(B)Payment of a civil penalty imposed by the Final Notice of Assessment shall be paid by EFT in accordance with instructions provided in the notice, unless the assessing official has given written approval to have payment made by other means;
(C)If payment of a civil penalty imposed by the Final Notice of Assessment has been suspended on the condition that the person comply in the future with 31 U.S.C. 333 and this subpart, the failure by the person to so comply will make the civil penalty payable on demand;
(D)If a civil penalty is not paid within 30 days of the date of the Final Notice of Assessment (or on demand under paragraph (c)(3)(ii)(D) of this section), a civil action to collect the penalty or enforce compliance may be commenced at any time within two years of the date of the Final Notice of Assessment; and
(E)Any civil penalty imposed by the Final Notice of Assessment may be subject to judicial review in accordance with 5 U.S.C. 701 *et seq.* § 92.18 Judicial review. A Final Notice of Assessment issued under the procedures in this subpart may be subject to judicial review pursuant to 5 U.S.C. 701 *et seq.* Dated: October 22, 2007. Edmund C. Moy, Director, United States Mint. [FR Doc. E7-21132 Filed 10-25-07; 8:45 am] BILLING CODE 4810-02-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. COTP Morgan City—07-018] RIN 1625—AA00 Safety Zone; Morgan City-Port Allen Alternate Route, Mile Marker 0.5 to Mile Marker 1.0, Bank to Bank AGENCY: Coast Guard, DHS. ACTION: Temporary final rule. SUMMARY: The Coast Guard is establishing a temporary Safety Zone on the Morgan City-Port Allen Alternate Route, from Mile Marker 0.5 to Mile Marker 1.0, bank to bank. This Safety Zone is needed to protect divers, vessels, and tows from destruction, loss, or injury from salvage operations to remove a crane from beneath the Long-Allen Fixed Bridge, and to facilitate compliance with a court approved Consent Judgment whereby the crane must be removed prior to December 1, 2007. DATES: This rule is effective from 6 a.m. on October 29, 2007 until 6 p.m. on November 11, 2007. ADDRESSES: Documents indicated in this preamble as being available in the docket are part of COTP Morgan City-07-018 and are available for inspection or copying at Marine Safety Unit Morgan City, 800 David Drive, Morgan City, Louisiana, 70380 between 8 a.m. and 4 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Lieutenant Commander
(LCDR)Rick Paciorka, Marine Safety Unit Morgan City, at
(985)380-5320. SUPPLEMENTARY INFORMATION: Regulatory Information We did not publish a notice of proposed rulemaking
(NPRM)for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM, and under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the **Federal Register** . Establishment of this safety zone is required to comply with a Consent Judgment approved by the Honorable Kurt D. Engelhardt, U.S. District Judge, in his order dated May 17, 2007. Pursuant to his Order, the Consent Judgment between Jefferson Marine Towing Inc., *et al* and the United States requires the crane to be removed by Jefferson Marine not later than 1 December 2007. In order to effect the Consent Judgment's court approved deadline, the U.S. Army Corps of Engineers (ACOE), the U.S. Coast Guard, and Jefferson Marine met to discuss the parameters of a salvage plan. This plan was preliminarily approved on 29 August 2007. The preliminary plan projected salvage operations beginning on 17 September 2007. Given the potential impact on the public and industry of this near term major waterway closure, the Coast Guard and the ACOE negotiated a later date beginning 29 October 2007. This later date allowed for transit planning that accommodates the vast majority of fall harvest barge movement while still allowing for completion of the salvage work by the court ordered deadline. The 29 October date was tentatively agreed upon on 13 September 2007. Publishing an NPRM and delaying its effective date would be contrary to public interest since immediate action is needed to protect divers, vessels, and mariners from the hazards associated with salvage operations in the area, and to facilitate compliance with the court approved Consent Judgment whereby the salvage operation must be concluded by 1 December 2007. Background and Purpose Due to an allision with the Long-Allen fixed bridge, a crane was lost from a barge into the Morgan City-Port Allen Alternate Route. Salvage operations will be conducted in the vicinity of the Long-Allen Fixed bridge to recover the crane. The Morgan City-Port Allen Alternate Route will be closed to marine traffic during salvage operations. This Safety Zone is needed to protect divers, vessels, and tows from destruction, loss or injury from the dangers associated with the salvage operations, and to facilitate compliance with a court approved Consent Judgment whereby the salvage operation must be concluded by 1 December 2007. Discussion of Rule The Coast Guard is establishing a temporary Safety Zone on the Morgan City-Port Allen Alternate Route, from Mile Marker 0.5 to Mile Marker 1.0, bank to bank. The temporary Safety Zone will continue in effect until the salvage operations are complete. Vessels and tows may not enter this zone while salvage operations are taking place. This rule is effective from 6 a.m. on October 29, 2007 until 6 p.m. on November 11, 2007. Regulatory Evaluation This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. This rule will only be in effect for a 14 day period of time and notifications to the marine community will be made through broadcast notice to mariners. The impacts on routine navigation are expected to be moderate to great. Vessels may continue to transit through alternate routes to their destinations. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601—612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605
(b)that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit through the Safety Zone from 6 a.m. CDT on October 29, 2007 until 6 p.m. CST on November 11, 2007. This Safety Zone will not have a significant economic impact on a substantial number of small entities because this rule will be in effect for a 14 day period of time. Additionally, vessels may continue to transit through alternate routes to their destinations. If you are a small business entity and are significantly affected by this regulation, please contact LCDR Rick Paciorka, Marine Safety Unit Morgan City, at
(985)380-5320. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). Collection of Information This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children. Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that Order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Environment We have analyzed this rule under Commandant Instruction M16475.1D, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969
(NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation because this rule is not expected to result in any significant adverse environmental impact as described in NEPA. Under figure 2-1, paragraph (34)(g), of the Instruction, an “Environmental Analysis Check List” and a “Categorical Exclusion Determination” are not required for this rule. List of Subjects in 33 CFR Part 165 Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways. For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows: PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1. 2. A new temporary § 165.T08-018 is added to read as follows: § 165.T08-018 Safety Zone; Morgan City-Port Allen Alternate Route, from Mile Marker 0.5 to Mile Marker 1.0, bank to bank.
(a)*Enforcement Areas* . Morgan City-Port Allen Alternate Route, from Mile Marker 0.5 to Mile Marker 1.0, bank to bank.
(b)*Effective date* . This section is effective from 6 a.m. on October 29, 2007 until 6 p.m. on November 11, 2007.
(c)*Regulations* .
(1)In accordance with the general regulations in § 165.33 of this part, entry into this zone is prohibited unless authorized by the Captain of the Port Morgan City.
(2)Vessels requiring entry into or passage through the Safety Zone must request permission from the Captain of the Port Morgan City, or a designated representative. They may be contacted on VHF Channel 11, or by telephone at
(985)380-5320.
(3)All persons and vessels shall comply with the instructions of the Captain of the Port Morgan City and designated on-scene U.S. Coast Guard patrol personnel. On-scene U.S. Coast Guard patrol personnel include commissioned, warrant, and petty officers of the U.S. Coast Guard. Dated: October 23, 2007. J. Scott Paradis, Captain, U.S. Coast Guard, Captain of the Port Morgan City. [FR Doc. 07-5354 Filed 10-24-07; 1:09 pm]
Connectionstraces to 28
Traces to 28 documents
U.S. Code
- Flammability standards or regulations§ 1193
- Avoidance of duplicative or unnecessary analyses§ 605
- Transfers of functions§ 2079
- Findings and purpose§ 5
- Reports of deals equal to or in excess of trading limits; books and records; cash and controlled transactions§ 6i
- Registration of commodity dealers and associated persons; regulation of registered entities§ 12a
- Definitions§ 601
- Jurisdiction of Commission; liability of principal for act of agent; Commodity Futures Trading Commission; transaction in interstate commerce§ 2
- Public information; agency rules, opinions, orders, records, and proceedings§ 552
- Prohibition of misuse of Department of the Treasury names, symbols, etc.§ 333
- United States Mint Public Enterprise Fund§ 5136
- Construction and definitions; intent of chapter§ 1127
- Rule making§ 553
- Final regulatory flexibility analysis§ 604
- Departmental regulations§ 301
- General authority of the Secretary§ 321
- Application; definitions§ 701
- Transferred§ 1226
- Transferred§ 191
register
25 references not yet in our index
- 16 CFR 1630
- 67 Stat. 112
- 81 Stat. 569
- 16 CFR 1631
- 17 CFR 18
- Pub. L. 104-13
- 31 CFR 92
- 31 CFR 27
- 5 CFR 2635.101
- 467 U.S. 837
- 447 U.S. 557
- 440 U.S. 1
- 436 U.S. 447
- 273 U.S. 510
- 103 F.3d 1346
- 277 U.S. 61
- 94 F.3d 574
- 53 F.3d 1395
- 409 U.S. 57
- 33 CFR 165
- Pub. L. 104-121
- 44 USC 3501-3520
- 2 USC 1531-1538
- 42 USC 4321-4370f
- Pub. L. 107-295
Citation graph
cites case law
Rules and Regulations
Final amendments
Cites 53 · showing 12Cited by 0 across 0 sources