The US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the US Department of State (“State”), the US Department of Commerce (“Commerce”), and the US Department of Energy (“DOE”) issued rules adjusting maximum civil monetary penalties (“CMPs”) under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, as outlined below. (For additional years of CMPs, see our previous blog post available here.)
OFAC CMP Adjustments
Under OFAC’s final rule issued on January 13, 2023, the adjusted penalties apply to CMPs that are assessed after January 13, 2023, as long as the violation occurred after November 2, 2015 (i.e., the date of the enactment of the 2015 Act). OFAC imposes CMPs pursuant to the penalty authority in five statutes: the Trading with the Enemy Act (“TWEA”), the International Emergency Economic Powers Act (“IEEPA”), the Foreign Narcotics Kingpin Designation Act (“FNKDA”), the Antiterrorism and Effective Death Penalty Act (“AEDPA”), and the Clean Diamond Trade Act (“CDTA”). OFAC penalty adjustments for each of these statutes, as well as the 2022 adjustments for reference, are below:
| Statute | Original Maximum CMP (per violation) | 2022 Adjusted Maximum CMP (per violation) | 2023 Adjusted Maximum CMP (per violation) | |
| Trading with the Enemy Act (TWEA) | $65,000 | $97,529 | $105,083 | |
| International Emergency Economic Powers Act (IEEPA) | The greater of $250,000 or twice the amount of the underlying transaction | The greater of $330,947 or twice the amount of the underlying transaction | The greater of $356,579 or twice the amount of the underlying transaction | |
| Foreign Narcotics Kingpin Designation Act (FNKDA) | $1,075,000 | $1,644,396 | $1,771,754 | |
| Antiterrorism and Effective Death Penalty Act (AEDPA) | The greater of $55,000 or twice the amount of which a financial institution was required to retain possession or control | The greater of $87,361 or twice the amount of which a financial institution was required to retain possession or control | The greater of $94,127 or twice the amount of which a financial institution was required to retain possession or control | |
| Clean Diamond Trade Act (CDTA) | $10,000 | $14,950 | $16,108 |
State CMP Adjustments
State published the CMP adjustments in a final rule on January 11, 2023, which included the CMP adjustments for the Arms Export Control Act (“AECA”), the statute under which the International Traffic in Arms Regulations (“ITAR”) are enforced. State will apply the increased CMPs to all penalties assessed on or after the effective date of the final rule, January 11, 2023, regardless of when the underlying violations occurred. The penalties assessed by State for violations of specific sections within the AECA, as well as the 2021 and 2022 adjustments for reference, are as follows:
| AECA Section | Original Maximum CMP | 2021 Adjusted Maximum CMP (per violation) | 2022 Adjusted Maximum CMP (per violation) | 2023 Adjusted Maximum CMP (per violation) | |
| 22 USC § 2778(e) (control of exports and imports) | $500,000 | $1,197,728 | $ 1,272,251 | the greater of $1,200,000 or the amount that is twice the value of the transaction | |
| 22 USC § 2779a(c) (prohibition on incentive payments) | $500,000 | The greater of $870,856 or five times the amount of the prohibited payment | The greater of $925,041 or five times the amount of the prohibited payment | The greater of $996,685 or five times the amount of the prohibited payment | |
| 22 USC § 2780(k) (transactions with countries supporting acts of international terrorism) | $500,000 | $1,036,566 | $1,101,061 | $1,186,338 |
Commerce CMP Adjustments
Commerce adjusted a number of CMPs in a final rule issued on January 3, 2023, which went into effect on January 15, 2023. CMPs for violations of the Export Control Reform Act of 2018, the statute under which the Export Administration Regulations are enforced, was adjusted from $328,121 to $353,534 per violation or twice the value of the transaction. In the same final rule, Commerce adjusted CMPs for violations of the Collection of Foreign Trade Statistics Act of 2002 from $15,256 to $16,438.
DOE CMP Adjustments
Finally, DOE in a final rule effective on February 13, 2023 issued procedures for the imposition of civil penalties for violations of the Atomic Energy Act of 1954 (“AEA”), implemented by DOE’s 10 C.F.R part 810 regulations (“Part 810”). In this final rule, DOE updated 10 C.F.R. § 810.15(c) to reflect the maximum civil penalty amount of $112,131 for violations of Section 57 b. of the AEA and Part 810.
The authors acknowledge the assistance of Ryan Orange in the preparation of this blog post.
