The US Department of Energy (DOE) has published a final rule increasing civil monetary penalties (CMPs) for unintentional violations of 10 CFR Part 810 (Part 810). The rule, which took effect on January 9, 2024, increases the maximum CMP from $120,816 to $124,732 per violation per day. The increased penalty aligns with DOE’s mandate to annually adjust CMPs for inflation.
Background
Part 810 controls the export of unclassified, nonpublic nuclear technology and assistance. The regulations have been in place for decades, and historically always included criminal penalties. Then, through the National Defense Authorization Act for Fiscal Year 2019, which amended Section 234.a of the Atomic Energy Act, Congress clarified that DOE has authority to impose CMPs.
As discussed in our prior blog post, DOE published a final rule on January 12, 2023 setting a maximum penalty of $112,131 per violation per day. On January 13, 2023, DOE published a final rule increasing the CMP from $112,131 to $120,816 to account for expected inflation in 2023.
Rationale for Penalty Increases
The Federal Civil Penalties Inflation Adjustment Act of 1990, as further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, requires federal agencies to annually modify their CMPs to account for inflation. Each year, the Office of Management and Budget (OMB) issues an adjustment multiplier, which determines how much CMPs must be increased by to account for inflation.
According to the final rule, the adjustment multiplier is “based on the percent change between the October Consumer Price Index for all Urban Consumers (CPI-U) preceding the date of adjustment, and the prior year’s October CPI-U.” Using this calculation, OMB determined that the 2024 adjustment multiplier is 1.03214. Applying this multiplier to the 2023 Part 810 CMP, DOE determined that the 2024 Part 810 CMP is $124,732 per violation per day.
Morgan Lewis will continue to monitor Part 810 developments.